MIME-Version: 1.0 X-Document-Type: Workbook Content-Type: multipart/related; boundary="----=_NextPart_e4b555a2_dce1_4883_ae98_ddb405247342" This document is a Single File Web Page, also known as a Web Archive file. If you are seeing this message, your browser or editor doesn't support Web Archive files. Please download a browser that supports Web Archive, such as Microsoft Internet Explorer. ------=_NextPart_e4b555a2_dce1_4883_ae98_ddb405247342 Content-Location: file:///C:/e4b555a2_dce1_4883_ae98_ddb405247342/Workbook.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"

This page should be opened with Microsoft Excel XP or newer.

------=_NextPart_e4b555a2_dce1_4883_ae98_ddb405247342 Content-Location: file:///C:/e4b555a2_dce1_4883_ae98_ddb405247342/Worksheets/Sheet01.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Document and Entity Information
6 Months Ended
Jun. 30, 2013
Aug. 08, 2013
Document and Entity Information
Entity Registrant Name SYNERGY PHARMACEUTICALS, INC.
Entity Central Index Key 0001347613
Document Type 10-Q
Document Period End Date Jun 30, 2013
Amendment Flag false
Current Fiscal Year End Date --12-31
Entity Current Reporting Status Yes
Entity Filer Category Accelerated Filer
Entity Common Stock, Shares Outstanding 90,182,115
Document Fiscal Year Focus 2013
Document Fiscal Period Focus Q2
------=_NextPart_e4b555a2_dce1_4883_ae98_ddb405247342 Content-Location: file:///C:/e4b555a2_dce1_4883_ae98_ddb405247342/Worksheets/Sheet02.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2013
Dec. 31, 2012
Current Assets:
Cash and cash equivalents $ 8,312 $ 12,416
Available-for-sale securities 83,988 20,086
Prepaid expenses and other current assets 2,349 1,547
Total Current Assets 94,649 34,049
Property and equipment, net 489 30
Security deposits 94 20
Due from controlling shareholder 3,306
Total Assets 95,232 37,405
Current Liabilities:
Accounts payable 4,980 5,255
Accrued expenses 2,989 2,060
Total Current Liabilities 7,969 7,315
Derivative financial instruments, at estimated fair value-warrants 973 5,258
Total Liabilities 8,942 12,573
Stockholders' Equity:
Preferred stock, Authorized 20,000,000 shares and none outstanding, at June 30, 2013 and December 31, 2012      
Common stock, par value of $.0001 authorized 200,000,000 shares at June 30, 2013 and 100,000,000 shares at December 31, 2012. Issued and outstanding 90,182,115 and 66,621,832 shares at June 30, 2013 and December 31, 2012, respectively 10 7
Additional paid-in capital 224,069 133,878
Deficit accumulated during development stage (137,789) (109,053)
Total Stockholders' Equity 86,290 24,832
Total Liabilities and Stockholders' Equity $ 95,232 $ 37,405
------=_NextPart_e4b555a2_dce1_4883_ae98_ddb405247342 Content-Location: file:///C:/e4b555a2_dce1_4883_ae98_ddb405247342/Worksheets/Sheet03.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)
Jun. 30, 2013
Dec. 31, 2012
CONDENSED CONSOLIDATED BALANCE SHEETS
Preferred stock, authorized shares 20,000,000 20,000,000
Preferred stock, outstanding shares 0 0
Common stock, par value (in dollars per share) $ 0.0001 $ 0.0001
Common stock, authorized shares 200,000,000 100,000,000
Common stock, Issued shares 90,182,115 66,621,832
Common stock, outstanding shares 90,182,115 66,621,832
------=_NextPart_e4b555a2_dce1_4883_ae98_ddb405247342 Content-Location: file:///C:/e4b555a2_dce1_4883_ae98_ddb405247342/Worksheets/Sheet04.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 6 Months Ended 91 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Costs and Expenses:
Research and development $ 9,055 $ 7,626 $ 23,399 $ 12,964 $ 81,106
Purchased in-process research and development 29,157
General and administrative 2,803 1,919 6,081 3,650 33,666
Loss from Operations (11,858) (9,545) (29,480) (16,614) (143,929)
Interest and investment income 16 48 34 86 530
Interest expense (12)
Other income 256 256 1,363
Change in fair value of derivative instruments-warrants 1,803 (1,317) 710 (1,309) 4,331
Total Other Income/(Expense) 1,819 (1,013) 744 (967) 6,212
Loss from Continuing Operations (10,039) (10,558) (28,736) (17,581) (137,717)
Loss from discontinued operations (72)
Net Loss $ (10,039) $ (10,558) $ (28,736) $ (17,581) $ (137,789)
Weighted Average Common Shares Outstanding Basic and Diluted (in shares) 87,482,939 60,416,068 80,176,564 57,357,081
Net Loss per Common Share, Basic and Diluted
Net Loss per Common Share, Basic and Diluted (in dollars per share) $ (0.11) $ (0.17) $ (0.36) $ (0.31)
------=_NextPart_e4b555a2_dce1_4883_ae98_ddb405247342 Content-Location: file:///C:/e4b555a2_dce1_4883_ae98_ddb405247342/Worksheets/Sheet05.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) (USD $)
Total
Common Stock, Par Value
Additional Paid in Capital
Deficit Accumulated during the Development Stage
Balance at Nov. 15, 2005
Increase (Decrease) in Stockholders' Equity
Sale of unregistered common stock to founder $ 2,000 $ 7,000 $ (5,000)
Sale of unregistered common stock to founder (in shares) 75,690,608
Common stock issued via registered direct offerings, private placements and other 18,000 1,000 17,000
Common stock issued via registered direct offerings, private placements and other (in shares) 6,850,000
Balance at Dec. 31, 2005 20,000 8,000 12,000
Balance (in shares) at Dec. 31, 2005 82,540,608
Increase (Decrease) in Stockholders' Equity
Net loss for the period (20,000) (20,000)
Balance at Dec. 31, 2006 8,000 12,000 (20,000)
Balance (in shares) at Dec. 31, 2006 82,540,608
Increase (Decrease) in Stockholders' Equity
Capital contribution by shareholders 9,000 9,000
Net loss for the period (20,000) (20,000)
Balance at Dec. 31, 2007 (11,000) 8,000 21,000 (40,000)
Balance (in shares) at Dec. 31, 2007 82,540,608
Increase (Decrease) in Stockholders' Equity
Common stock issued via registered direct offerings, private placements and other 3,025,000 3,025,000
Common stock issued via registered direct offerings, private placements and other (in shares) 2,520,833
Cancellation of unregistered shares (7,000) 7,000
Cancellation of unregistered shares (in shares) (74,990,604)
Common stock issued via exchange transactions to former Callisto Shareholders and other 27,280,000 3,000 27,277,000
Common stock issued via exchange transactions to former Callisto Shareholders and other (in shares) 22,732,380
Fees and expenses related to financing transactions - paid in cash (73,000) (73,000)
Stock based compensation expense 380,000 380,000
Net loss for the period (31,757,000) (31,757,000)
Balance at Dec. 31, 2008 (1,156,000) 4,000 30,637,000 (31,797,000)
Balance (in shares) at Dec. 31, 2008 32,803,217
Increase (Decrease) in Stockholders' Equity
Common stock issued via registered direct offerings, private placements and other 15,970,000 1,000 15,969,000
Common stock issued via registered direct offerings, private placements and other (in shares) 11,407,213
Fees and expenses related to financing transactions - paid in cash (260,000) (260,000)
Common stock Issued for services rendered 2,000 2,000
Common stock Issued for services rendered (in shares) 1,250
Stock based compensation expense 1,052,000 1,052,000
Net loss for the period (8,124,000) (8,124,000)
Balance at Dec. 31, 2009 7,484,000 5,000 47,400,000 (39,921,000)
Balance (in shares) at Dec. 31, 2009 44,211,680
Increase (Decrease) in Stockholders' Equity
Common stock issued via registered direct offerings and private placements 7,179,000 7,179,000
Common stock issued via registered direct offerings and private placements (in shares) 1,209,000
Fees and expenses related to financing transactions - paid in cash (468,000) (468,000)
Warrants classified to derivative liability - net (3,785,000) (3,785,000)
Common stock issued to extend lock-up agreements related to unregistered shares (in shares) 670,933
Common stock Issued for services rendered 18,000 18,000
Common stock Issued for services rendered (in shares) 2,469
Stock based compensation expense 694,000 694,000
Net loss for the period (15,221,000) (15,221,000)
Balance at Dec. 31, 2010 (4,099,000) 5,000 51,038,000 (55,142,000)
Balance (in shares) at Dec. 31, 2010 46,094,082
Increase (Decrease) in Stockholders' Equity
Common stock issued via registered direct offerings and private placements 34,369,000 1,000 34,368,000
Common stock issued via registered direct offerings and private placements (in shares) 7,733,093
Fees and expenses related to financing transactions - paid in cash (2,148,000) (2,148,000)
Fees and expenses related to financing transactions - paid in units of common stock and warrants (in shares) 77,750
Warrants classified to derivative liability - net (5,094,000) (5,094,000)
Common stock issued to make whole certain unregistered shares (in shares) 215,981
Exercise of warrant 415,000 415,000
Exercise of warrant (in shares) 80,000
Common stock Issued for services rendered 341,000 341,000
Common stock Issued for services rendered (in shares) 79,000
Stock based compensation expense 481,000 481,000
Net loss for the period (14,467,000) (14,467,000)
Balance at Dec. 31, 2011 9,798,000 6,000 79,401,000 (69,609,000)
Balance (in shares) at Dec. 31, 2011 54,279,906
Increase (Decrease) in Stockholders' Equity
Common stock issued via registered direct offerings, private placements and other 55,862,000 1,000 55,861,000
Common stock issued via registered direct offerings, private placements and other (in shares) 12,315,654
Fees and expenses related to financing transactions - paid in cash (3,774,000) (3,774,000)
Common stock Issued for services rendered 93,000 93,000
Common stock Issued for services rendered (in shares) 26,272
Stock based compensation expense 2,297,000 2,297,000
Net loss for the period (39,444,000) (39,444,000)
Balance at Dec. 31, 2012 24,832,000 7,000 133,878,000 (109,053,000)
Balance (in shares) at Dec. 31, 2012 66,621,832 66,621,832
Increase (Decrease) in Stockholders' Equity
Common stock issued via registered direct offerings, private placements and other 94,734,000 2,000 94,732,000
Common stock issued via registered direct offerings, private placements and other (in shares) 17,133,093
Cancellation of unregistered shares (2,000) 2,000
Cancellation of unregistered shares (in shares) (22,294,976)
Common stock issued via exchange transactions to former Callisto Shareholders and other 3,000 (3,000)
Common stock issued via exchange transactions to former Callisto Shareholders and other (in shares) 28,605,379
Fees and expenses related to financing transactions - paid in cash (5,623,000) (5,623,000)
Warrants classified to derivative liability - net 3,575,000 3,575,000
Recapitalization of Synergy (4,904,000) (4,904,000)
Common stock Issued for services rendered 250,000 250,000
Common stock Issued for services rendered (in shares) 55,000
Exercise of stock options 119,000 119,000
Exercise of stock options (in shares) 61,787
Stock based compensation expense 2,043,000 2,043,000
Net loss for the period (28,736,000) (28,736,000)
Balance at Jun. 30, 2013 $ 86,290,000 $ 10,000 $ 224,069,000 $ (137,789,000)
Balance (in shares) at Jun. 30, 2013 90,182,115 90,182,115
------=_NextPart_e4b555a2_dce1_4883_ae98_ddb405247342 Content-Location: file:///C:/e4b555a2_dce1_4883_ae98_ddb405247342/Worksheets/Sheet06.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Thousands, unless otherwise specified
6 Months Ended 91 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Cash Flows From Operating Activities:
Net loss $ (28,736) $ (17,581) $ (137,789)
Adjustments to reconcile net loss to net cash (used in)/provided by operating activities:
Depreciation 1 10
Loss on disposal of property and equipment 2 2
Stock-based compensation expense 2,168 792 7,652
Accretion of discount/premium on investment securities 98 (160) 12
Purchased in-process research and development 28,157
Change in fair value of derivative instruments-warrants (710) 1,309 (4,331)
Changes in operating assets and liabilities:
Security deposit (6) (20)
Accounts payable and accrued expenses (623) 2,173 5,844
Prepaid expenses and other current assets (802) (345) (2,349)
Total Adjustments 131 3,766 34,977
Net Cash Used in Operating Activities (28,605) (13,815) (102,812)
Cash Flows From Investing Activities:
Net liabilities assumed in connection with Exchange Agreement (155)
Loans to related parties (270) (395) (3,576)
Purchases of available-for-sale securities (64,000) (20,000) (84,000)
Additions to property and equipment (459) (501)
Net Cash Used in Investing Activities (64,729) (20,395) (88,232)
Cash Flows From Financing Activities:
Proceeds from sale of common stock 94,734 51,750 211,168
Fees and expenses related to sale of common stock (5,623) (3,358) (12,346)
Proceeds from exercise of stock warrants 415
Proceeds from exercise of stock options 119 119
Net Cash Provided by Financing Activities 89,230 48,392 199,356
Net (decrease) increase in cash and cash equivalents (4,104) 14,182 8,312
Cash and cash equivalents at beginning of period 12,416 13,245
Cash and cash equivalents at end of period 8,312 27,427 8,312
Supplementary disclosure of cash flow information:
Cash paid for taxes 27 12 167
Supplementary disclosure of non-cash investing and financing activities:
Value of warrants classified as derivative liability-net (3,575) 169 5,304
Value of common stock issued to induce stockholders to extend lock-up agreements 3,235
Recapitalization of Synergy $ 4,904 $ 4,904
------=_NextPart_e4b555a2_dce1_4883_ae98_ddb405247342 Content-Location: file:///C:/e4b555a2_dce1_4883_ae98_ddb405247342/Worksheets/Sheet07.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Business Overview
6 Months Ended
Jun. 30, 2013
Business Overview
Business Overview

1. Business Overview

 

Synergy is a biopharmaceutical company focused primarily on the development of drugs to treat gastrointestinal, or GI, disorders and diseases. Its lead product candidate is plecanatide (formerly called SP-304), a guanylate cyclase C, or GC-C, receptor agonist, to treat GI disorders, primarily chronic idiopathic constipation, or CIC, and constipation-predominant-irritable bowel syndrome, or IBS-C. CIC and IBS-C are functional gastrointestinal disorders that afflict millions of sufferers worldwide. CIC is primarily characterized by constipation symptoms but a majority of these patients report experiencing straining, bloating and abdominal discomfort as among their most bothersome symptoms. IBS-C is characterized by frequent and recurring abdominal pain and/or discomfort associated with chronic constipation. Synergy is also developing SP-333, a second generation GC-C receptor agonist for the treatment of inflammatory bowel diseases, such as ulcerative colitis, or UC.

------=_NextPart_e4b555a2_dce1_4883_ae98_ddb405247342 Content-Location: file:///C:/e4b555a2_dce1_4883_ae98_ddb405247342/Worksheets/Sheet08.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Basis of Presentation
6 Months Ended
Jun. 30, 2013
Basis of Presentation
Basis of Presentation

2. Basis of Presentation

 

These unaudited condensed consolidated financial statements include Synergy and its wholly-owned subsidiaries:  (1) Synergy Advanced Pharmaceuticals, Inc. (2) IgX, Ltd (Ireland—inactive) and (3) ContraVir Pharmaceuticals, Inc. These unaudited condensed consolidated financial statements have been prepared following the requirements of the Securities and Exchange Commission (“SEC”) and United States generally accepted accounting principles (“GAAP”) for interim reporting. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, which include only normal recurring adjustments, necessary to present fairly Synergy’s interim financial information. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements as of and for the year ended December 31, 2012 contained in the Company’s Annual Report on Form 10-K filed with the Securities Exchange Commission (“SEC”) on March 18, 2013. All intercompany balances and transactions have been eliminated.

------=_NextPart_e4b555a2_dce1_4883_ae98_ddb405247342 Content-Location: file:///C:/e4b555a2_dce1_4883_ae98_ddb405247342/Worksheets/Sheet09.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Recent Accounting Pronouncements
6 Months Ended
Jun. 30, 2013
Recent Accounting Pronouncements
Recent Accounting Pronouncements

3. Recent Accounting Pronouncements

 

There are no recent accounting pronouncements affecting the Company.

------=_NextPart_e4b555a2_dce1_4883_ae98_ddb405247342 Content-Location: file:///C:/e4b555a2_dce1_4883_ae98_ddb405247342/Worksheets/Sheet10.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Fair Value of Financial Instruments
6 Months Ended
Jun. 30, 2013
Fair Value of Financial Instruments
Fair Value of Financial Instruments

4. Fair Value of Financial Instruments

 

Financial instruments consist of cash and cash equivalents, marketable securities, accounts payable and derivative instruments. These financial instruments are stated at their respective historical carrying amounts, which approximate fair value due to their short term nature, except derivative instruments which are marked to market at the end of each reporting period.

------=_NextPart_e4b555a2_dce1_4883_ae98_ddb405247342 Content-Location: file:///C:/e4b555a2_dce1_4883_ae98_ddb405247342/Worksheets/Sheet11.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Cash, Cash Equivalents and Marketable Securities
6 Months Ended
Jun. 30, 2013
Cash, Cash Equivalents and Marketable Securities
Cash, Cash Equivalents and Marketable Securities

5. Cash, Cash Equivalents and Marketable Securities

 

All highly liquid investments with maturities of three months or less at the date of purchase are classified as cash equivalents. As of June 30, 2013, the amount of cash and cash equivalents was approximately $8.3 million and consists of checking accounts and short-term money market funds held at U.S. commercial banks. As of December 31, 2012, the amount of cash and cash equivalent was approximately $12.4 million and consisted of checking accounts and short-term money market funds with U.S. commercial banks. At any point in time, the Company’s balance of cash and cash equivalent may exceed federally insured limits.

 

The Company’s marketable securities as of June 30, 2013 consist of approximately $84 million in U.S. Treasury securities with maturities of less than one year and have been classified and accounted for as available-for-sale. Marketable securities as of December 31, 2012 consisted of approximately $20 million in U.S. Treasury securities.  Management determines the appropriate classification of its investments at the time of purchase and reevaluates the available-for-sale designations as of each balance sheet date. Cash equivalents, marketable securities are carried at amounts that approximate fair value due to their short-term maturities. As of June 30, 2013 and 2012, gross unrealized losses were not material. The Company recognized no net realized gains or losses for the three and six months ended June 30, 2013 and 2012. The Company considers the declines in market value of its marketable securities investment portfolio to be temporary in nature. Fair values were determined for each individual security in the investment portfolio. When evaluating the investments for other-than-temporary impairment, the Company reviews factors such as the length of time and extent to which fair value has been below cost basis, the financial condition of the issuer and any changes thereto, and the Company’s intent to sell, or whether it is more likely than not it will be required to sell, the investment before recovery of the investment’s amortized cost basis. During the three and six months ended June 30, 2013 and 2012, the Company did not recognize any impairment charges. As of June 30, 2013 and December 31, 2012, the Company did not consider any of its investments to be other-than-temporarily impaired.

------=_NextPart_e4b555a2_dce1_4883_ae98_ddb405247342 Content-Location: file:///C:/e4b555a2_dce1_4883_ae98_ddb405247342/Worksheets/Sheet12.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Accounting for Shared-Based Payments
6 Months Ended
Jun. 30, 2013
Accounting for Shared-Based Payments
Accounting for Shared-Based Payments

6. Accounting for Shared-Based Payments

 

Stock Options

 

ASC Topic 718 “Compensation—Stock Compensation” requires companies to measure the cost of employee services received in exchange for the award of equity instruments based on the estimated fair value of the award at the date of grant. The expense is to be recognized over the period during which an employee is required to provide services in exchange for the award. ASC Topic 718 did not change the way Synergy accounts for non-employee stock-based compensation. Synergy continues to account for shares of common stock, stock options and warrants issued to non-employees based on the fair value of the stock, stock option or warrant, if that value is more reliably measurable than the fair value of the consideration or services received. The Company accounts for stock options issued and vesting to non-employees in accordance with ASC Topic 505-50 “Equity -Based Payment to Non-Employees” and accordingly the value of the stock compensation to non-employees is based upon the measurement date as determined at either a) the date at which a performance commitment is reached, or b) at the date at which the necessary performance to earn the equity instruments is complete. Accordingly the fair value of these options is being “marked to market” quarterly until the measurement date is determined.

 

ASC Topic 718 requires that cash flows resulting from tax deductions in excess of the cumulative compensation cost recognized for options exercised (excess tax benefits) be classified as cash inflows from financing activities and cash outflows from operating activities. Due to Synergy’s accumulated deficit position, no excess tax benefits have been recognized. Synergy accounts for common stock, stock options, and warrants granted to employees and non-employees based on the fair market value of the instrument, using the Black-Scholes option pricing model based on assumptions for expected stock price volatility, term of the option, risk-free interest rate and expected dividend yield, at the grant date.

 

Synergy adopted the 2008 Equity Compensation Incentive Plan (the “Plan”) during the quarter ended September 30, 2008. Stock options granted under the Plan typically vest after three years of continuous service from the grant date and have a contractual term of ten years. On January 17, 2013, Synergy amended its 2008 Equity Compensation Incentive Plan and increased the number of shares of its common stock reserved for issuance under the Plan from 7,500,000 to 15,000,000.

 

Stock-based compensation has been recognized in operating results as follow: (dollars in thousands)

 

 

 

Three Months
Ended June 30,

 

Six Months
Ended June 30

 

November 15,
2005
(inception) to

 

 

 

2013

 

2012

 

2013

 

2012

 

June 30, 2013

 

Employees—included in research and development

 

$

278

 

$

146

 

$

555

 

$

262

 

$

2,156

 

Employees—included in general and administrative

 

331

 

100

 

781

 

194

 

2,190

 

Subtotal employee stock based compensation

 

609

 

246

 

1,336

 

456

 

4,346

 

Non-employees—included in research and development

 

2

 

 

137

 

 

433

 

Non-employees—included in general and administrative

 

300

 

108

 

695

 

336

 

2,873

 

Subtotal non-employee stock based compensation

 

302

 

108

 

832

 

337

 

3,306

 

 

 

 

 

 

 

 

 

 

 

 

 

Total stock-based compensation expense

 

$

911

 

$

354

 

$

2,168

 

$

792

 

$

7,652

 

 

The unrecognized compensation cost related to non-vested stock options outstanding at June 30, 2013, net of expected forfeitures, was approximately $7.4 million to be recognized over a weighted-average remaining vesting period of approximately 2 years. This unrecognized compensation cost does not include amounts related to 4,364,000 shares of stock options which vest upon a change of control.

 

The estimated fair value of stock option awards was determined on the date of grant using the Black-Scholes option valuation model with the following weighted-average assumptions during the periods indicated.

 

 

 

Six Months
Ended
June 30, 2013

 

Six Months
Ended
June 30, 2012

 

Risk-free interest rate

 

0.41%-1.11%

 

0.97%-1.50%

 

Dividend yield

 

 

 

Expected volatility

 

60%

 

60%

 

Expected term (in years)

 

6 years

 

6 years

 

 

A summary of stock option activity and of changes in stock options outstanding under the Plan is presented below:

 

 

 

Number of
Options

 

Exercise Price
Per Share

 

Weighted Average
Exercise Price
Per Share

 

Intrinsic
Value
(in thousands)

 

Weighted Average
Remaining
Contractual Term

 

Balance outstanding, December 31, 2012

 

9,734,268

 

$

0.50 — 5.20

 

$

2.75

 

$

24,482

 

6.45 years

 

Granted

 

1,589,316

(a)

$

0.44 — 20.01

 

$

7.62

 

 

 

 

 

Exercised

 

(61,787

)

$

0.44 — 4.28

 

$

1.91

 

 

 

 

 

Forfeited

 

(798,734

)(a)

$

4.42 — 12.51

 

$

5.85

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance outstanding, June 30, 2013

 

10,463,063

(a)

$

0.44-20.01

 

$

3.25

 

$

16,649

 

7.2 years

 

Exercisable at June 30, 2013

 

3,591,494

(a)

$

0.44-20.01

 

$

2.68

 

$

8,472

 

5.5 years

 

 

(a)         Includes 1,221,316 stock options issued to former Callisto option holders under the terms of Callisto Synergy Merger Agreement dated January 17, 2013, of which 711,293 stock options are vested and 298,734 stock options expired were forfeited through June 30, 2013.

------=_NextPart_e4b555a2_dce1_4883_ae98_ddb405247342 Content-Location: file:///C:/e4b555a2_dce1_4883_ae98_ddb405247342/Worksheets/Sheet13.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Income Taxes
6 Months Ended
Jun. 30, 2013
Income Taxes
Income Taxes

7. Income Taxes

 

During the year ended December 31, 2012 the Company recorded refundable tax credits in prepaid and other current assets for its (i) 2011 New York State QETC credit, totaling $250,000 and (ii) the 2012 New York City Biotechnology Tax Credit totaling $250,000. These credits have been recorded as other current assets at December 31, 2012 and June 30, 2013. On July 23, 2013, the Company received $250,000 for the 2011 New York State QETC credit.

------=_NextPart_e4b555a2_dce1_4883_ae98_ddb405247342 Content-Location: file:///C:/e4b555a2_dce1_4883_ae98_ddb405247342/Worksheets/Sheet14.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Stockholder's Equity
6 Months Ended
Jun. 30, 2013
Stockholder's Equity
Stockholder's Equity

8. Stockholder’s Equity

 

On April 16, 2013, Synergy closed a registered direct offering of 16,375,000 shares of its common stock at a price of $5.50 per share. The gross proceeds to the Company from this sale was approximately $90 million, before deducting underwriting discounts and commissions and other offering expenses of approximately $5.5 million by the Company.

 

From January 1, 2013 through June 30, 2013, Synergy sold 758,093 shares of common stock with gross proceeds of approximately $4.7 million, at an average selling price of $6.16 per share, pursuant to the June 2012 controlled equity sales agreement with a placement agent. Selling expenses totaled approximately $0.1 million.

 

On November 14, 2011, Synergy entered into a securities purchase agreement with certain accredited investors for the sale of 1,328,941 units in a private placement and on December 1, 2011, Synergy issued 77,750 units to a selling agent related to November and December financing transactions. Each unit consists of one share of common stock and one warrant to purchase one share of Synergy’s common stock. Based upon the Company’s analysis of the criteria contained in ASC Topic 815-40, “Derivatives and Hedging—Contracts in Entity’s Own Equity” Synergy recorded the above warrants as derivative liabilities upon issuance and they were marked to market on a quarterly basis. The price protection clauses on 1,328,941warrants and 77,750 warrants expired on May 14, 2013 and June 1, 2013 respectively, which removed the condition requiring derivative liability accounting and resulting in a zero value ratchet and leaving a plain vanilla warrant, that can be valued using Black Scholes.  Accordingly the total fair value of approximately $3.6 million was reclassified from derivative liability - warrants to additional paid in capital upon the expiration dates, and approximately $870,000 was marked to market from the expiration dates through June 30, 2013.

 

On October 18, 2012 Synergy entered into a Stock Purchase Agreement with a clinical trial contract research organization (or CRO) whereby the CRO would be compensated for services performed by issuance of shares of Synergy common stock. The agreed fair value of the work performed was $250,000 and represented approximately 25% of the total contract. The agreed number of shares was 55,000 at a price of $4.55 per share. The closing stock price for Synergy common stock on October 17, 2012 was $4.57 per share. Approximately 50% of the services were completed as of December 31, 2012 and Synergy accrued stock based compensation expense of $125,000 during the quarter ended December 31, 2012. The remaining balance of $125,000 was recorded as stock based compensation expense upon completion of the contact in January 2013 and Synergy issued 55,000 shares to the CRO during the quarter ended March 31, 2013.

 

On January 17, 2013, the number of authorized shares of common stock increased from 100,000,000 to 200,000,000.

 

Synergy - Callisto Merger

 

On January 17, 2013, Synergy completed its acquisition of Callisto Pharmaceuticals, pursuant to the Merger Agreement.  As a result of the Merger, Synergy issued a total of 28,605,379 shares of its common stock to former Callisto stockholders in exchange for their shares of Callisto common stock, in which each outstanding share of Callisto common stock was converted into the right to receive 0.1799 of one share of Synergy common stock (the Exchange Ratio). The 22,294,976 shares of Synergy common stock held by Callisto were canceled. The 28,605,379 new shares of Synergy common stock issued to Callisto shareholders are locked-up for 18 months until July 17, 2014.

 

In addition, each stock option exercisable for shares of Callisto common stock that was outstanding on January 17, 2013 was assumed by Synergy and converted into a stock option to purchase the number of shares of Synergy’s common stock that the holder would have received if such holder had exercised such stock option for shares of Callisto common stock prior to the Merger and exchanged such shares for shares of the Company’s common stock in accordance with the Exchange Ratio. Synergy issued 1,221,316 stock options in connection with this exchange. In addition, each outstanding warrant or obligation to issue a warrant to purchase shares of Callisto common stock, whether or not vested, was cancelled.

 

As Callisto does not meet the input, process and output definition of a business under ASC 805, the merger was not accounted for as a business combination. The merger was accounted for as a recapitalization of Synergy, affected through exchange of Callisto shares for Synergy shares, and the cancellation of its shares held by Callisto. The excess of Synergy shares issued to Callisto shareholders over Synergy shares held by Callisto is the result of a discount associated with the restricted nature of the new Synergy shares received by Callisto shareholders. Therefore, considering this discount, the share exchange has been determined to be equal from a fair value standpoint. Upon the effective date of the Merger, Synergy accounted for the merger by assuming Callisto’s net liabilities, of approximately $1.3 million, with a corresponding decrease in additional paid in capital. Synergy’s financial statements will not be restated retroactively to reflect the historical financial position or results of operations of Callisto.

 

In addition, as of January 17, 2013, Synergy had advanced Callisto approximately $3.6 million, which was Callisto’s share of Synergy payments for common operating costs since July 2008. This balance was eliminated upon the recapitalization date, with a corresponding decrease in additional paid in capital.

 

Net liabilities of Callisto assumed and advances to Callisto eliminated in connection with this recapitalization were as follows:

 

 

 

Balance

 

($ in thousands)

 

January 17, 2013

 

Assets

 

 

 

Cash

 

$

 

Security deposits

 

74

 

Total assets acquired

 

74

 

Liabilities

 

 

 

Accounts payable and other liabilities

 

(1,400

)

Net assumed liabilities

 

(1,326

)

Elimination of amounts due from Callisto

 

(3,578

)

Recapitalization of Synergy

 

$

(4,904

)

------=_NextPart_e4b555a2_dce1_4883_ae98_ddb405247342 Content-Location: file:///C:/e4b555a2_dce1_4883_ae98_ddb405247342/Worksheets/Sheet15.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Research and Development Expense
6 Months Ended
Jun. 30, 2013
Research and Development Expense
Research and Development Expense

9. Research and Development Expense

 

Research and development costs include expenditures in connection with an in-house research and development laboratory, salaries and staff costs, application and filing for regulatory approval of proposed products, purchased in-process research and development, regulatory and scientific consulting fees, as well as contract research, patient costs, drug formulation and tableting, data collection, monitoring, and clinical insurance.

 

In accordance with FASB ASC Topic 730-10-55, Research and Development, Synergy recorded prepaid research and development costs of approximately $1.5 million and $0.9 million as of June 30, 2013 and December 31, 2012, respectively, for nonrefundable pre-payments for production of drug substance, analytical testing services and clinical trial monitoring for its drug candidates. In accordance with this guidance, Synergy expenses these costs when drug compound is delivered and services are performed.

------=_NextPart_e4b555a2_dce1_4883_ae98_ddb405247342 Content-Location: file:///C:/e4b555a2_dce1_4883_ae98_ddb405247342/Worksheets/Sheet16.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Derivative Financial Instruments
6 Months Ended
Jun. 30, 2013
Derivative Financial Instruments
Derivative Financial Instruments

10. Derivative Financial Instruments

 

Synergy Derivative Financial Instruments

 

Effective January 1, 2009, the Company adopted provisions of ASC Topic 815-40, “Derivatives and Hedging: Contracts in Entity’s Own Equity” (“ASC Topic 815-40”). ASC Topic 815-40 clarifies the determination of whether an instrument issued by an entity (or an embedded feature in the instrument) is indexed to an entity’s own stock, which would qualify as a scope exception under ASC Topic 815-10.

 

Based upon the Company’s analysis of the criteria contained in ASC Topic 815-40, Synergy has determined that certain warrants issued in connection with sale of its common stock must be classified as derivative instruments. In accordance with ASC Topic 815-40, these warrants are also being re-measured at each balance sheet date based on estimated fair value, and any resultant changes in fair value is being recorded in the Company’s statement of operations. The Company estimates the fair value of certain warrants using the Black-Scholes option pricing model in order to determine the associated derivative instrument liability and change in fair value described above. The range of assumptions used to determine the fair value of the warrants at each period end were:

 

 

 

Six Months Ended
June 30, 2013

 

Six Months Ended
June 30, 2012

 

Fair value of Synergy common stock

 

$

4.32

 

$

$4.75

 

Expected warrant term

 

5-7 years

 

5-7 years

 

Risk-free interest rate

 

0.36%-1.41%

 

0.32%-1.33%

 

Expected volatility

 

60%

 

60%

 

Dividend yield

 

 

 

 

Fair value of stock is the closing market price of the Company’s common stock on the date of warrant issuance and at the end of each reporting period when the derivative instruments are marked to market. Expected volatility is a management estimate of future volatility, over the expected warrant term, based on historical volatility of Synergy’s common stock. The warrants have a transferability provision and based on guidance provided in SAB 107 for instruments issued with such a provision, Synergy used the full contractual term as the expected term of the warrants. The risk free rate is based on the U.S. Treasury security rates for maturities consistent with the expected remaining term of the warrants at the date of grant or quarterly revaluation.

 

On November 14, 2011, Synergy entered into a securities purchase agreement with certain accredited investors for the sale of 1,328,941 units in a private placement and on December 1, 2011, Synergy issued 77,750 units to a selling agent related to November and December financing transactions. Each unit consists of one share of common stock and one warrant to purchase one share of Synergy’s common stock. Based upon the Company’s analysis of the criteria contained in ASC Topic 815-40, “Derivatives and Hedging—Contracts in Entity’s Own Equity” Synergy recorded the above warrants as derivative liabilities upon issuance and they were marked to market on a quarterly basis. The price protection clauses on 1,328,941warrants and 77,750 warrants expired on May 14, 2013 and June 1, 2013 respectively, which removed the condition requiring derivative liability accounting and resulting in a zero value ratchet and leaving a plain vanilla warrant, that can be valued using Black Scholes.  Accordingly the total fair value of approximately $3.6 million was reclassified from derivative liability - warrants to additional paid in capital upon the expiration dates, and approximately $870,000 was marked to market from the expiration dates through June 30, 2013.

 

As of June 30, 2013, Synergy does not have outstanding warrants, which contained terms which required the use of a binomial model to determine fair value.

 

The range of assumptions in the binomial model used to determine the fair value of certain warrants at the dates indicated was as follows:

 

 

 

Six months ended,
June 30th, 2013

 

Six months ended,
June 30, 2012

 

Fair value of Synergy common stock

 

$

 

$3.28-$4.50

 

Expected warrant term

 

 

4.4 - 4.6 years

 

Risk-free interest rate

 

 

0.72%-1.03%

 

Expected volatility

 

 

60%

 

Dividend yield

 

 

 

 

Fair value of stock is the closing market price of the Company’s common stock on the date of warrant issuance and end of each reporting period the derivative instruments are marked to market. Expected volatility is based in part on the historical volatility of Synergy’s common stock. The warrants have a transferability provision and based on guidance provided in SAB 107 for instruments issued with such a provision, Synergy used the full contractual term as the expected term of the warrants. The risk free rate is based on the U.S. Treasury security rates for maturities consistent with the expected remaining term of the warrants at the date of grant or quarterly revaluation.

 

The following table sets forth the components of changes in the Synergy’s outstanding warrants which were deemed derivative financial instruments and the associated liability balance for the periods indicated:

 

Date

 

Description

 

Warrants

 

Derivative
Instrument
Liability
(in thousands)

 

12/31/2011

 

Balance

 

2,265,160

 

$

3,325

 

3/31/2012

 

Fair value of new warrants issued during the quarter

 

 

 

 

 

3/31/2012

 

Change in fair value of warrants during the quarter recognized as other income in the statement of operations

 

 

 

(8

)

3/31/2012

 

Balance

 

2,265,160

 

3,317

 

6/30/2012

 

Fair value of new warrants issued during the quarter

 

112,500

 

169

 

 

 

 

 

 

 

 

 

6/30/2012

 

Change in fair value of warrants during the quarter recognized as other expense in the statement of operations

 

 

1,317

 

6/30/2012

 

Balance

 

2,377,660

 

4,803

 

9/30/2012

 

Fair value of new warrants issued during the quarter

 

 

 

9/30/2012

 

Change in fair value of warrants during the quarter recognized as other income in the statement of operations

 

 

(140

)

9/30/2012

 

Balance

 

2,377,660

 

4,663

 

12/31/2012

 

Fair value of new warrants issued during the quarter

 

 

 

12/31/2012

 

Reclass of derivative liability to equity during the quarter

 

(112,500

)

(169

)

12/31/2012

 

Change in fair value of warrants during the quarter recognized as other expense in the statement of operations

 

 

764

 

12/31/2012

 

Balance

 

2,265,160

 

5,258

 

3/31/2013

 

Change in fair value of warrants during the quarter recognized as other expense in the statement of operations

 

 

1,093

 

 

 

 

 

 

 

 

 

3/31/2013

 

Balance

 

2,265,160

 

6,351

 

6/30/2013

 

Fair value of new warrants issued during the quarter

 

 

 

6/30/2013

 

Reclass of derivative liability to equity during the quarter

 

(1,406,691

)

(3,575

)

6/30/2013

 

Change in fair value of warrants during the quarter recognized as other income in the statement of operations

 

 

(1,803

)

6/30/2013

 

Balance

 

858,469

 

$

973

 

 

Synergy Fair Value Measurements

 

The following table presents the Company’s liabilities that are measured and recognized at fair value on a recurring basis classified under the appropriate level of the fair value hierarchy as of December 31, 2012 and June 30, 2013:

 

($ in thousands)

 

Description

 

Quoted Prices
in
Active
Markets
for Identical
Assets and
Liabilities
(Level 1)

 

Significant
Other
Observable
Inputs
(Level 2)

 

Significant
Unobservable
Inputs
(Level 3)

 

Balance as of
December 31,
2012

 

Quoted Prices
in
Active
Markets
for Identical
Assets and
Liabilities
(Level 1)

 

Significant
Other
Observable
Inputs
(Level 2)

 

Significant
Unobservable
Inputs
(Level 3)

 

Balance as of
June 30,
2013

 

Derivative liabilities related to Warrants

 

$

 

$

 

$

5,258

 

$

5,258

 

$

 

$

 

$

973

 

$

973

 

 

The following table sets forth a summary of changes in the fair value of the Company’s Level 3 liabilities for the six months ended June 30, 2013:

 

Description 

 

Balance at
December 31,
2012

 

Fair value of
warrants
reclassified to
additional paid
in capital

 

(Gain) or loss
recognized in
earning from
Change in Fair
Value

 

Balance as of
June 30,
2013

 

Derivative liabilities related to Warrants

 

$

5,258

 

$

(3,575

)

$

(710

)

$

973

 

 

The unrealized gains or losses on the derivative liabilities are recorded as a change in fair value of derivative liabilities in the Company’s statement of operations. 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. At each reporting period, the Company reviews the assets and liabilities that are subject to ASC Topic 815-40. At each reporting period, all assets and liabilities for which the fair value measurement is based on significant unobservable inputs are instruments which trade infrequently and therefore have little or no price transparency are classified as Level 3.

------=_NextPart_e4b555a2_dce1_4883_ae98_ddb405247342 Content-Location: file:///C:/e4b555a2_dce1_4883_ae98_ddb405247342/Worksheets/Sheet17.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Loss per Share
6 Months Ended
Jun. 30, 2013
Loss per Share
Loss per Share

11. Loss per Share

 

Basic and diluted net loss per share is presented in conformity with ASC Topic 260, Earnings per Share, (“ASC Topic 260”) for all periods presented. In accordance with ASC Topic 260, basic and diluted net loss per common share was determined by dividing net loss applicable to common stockholders by the weighted-average common shares outstanding during the period. Diluted weighted-average shares are the same as basic weighted-average shares because shares issuable pursuant to the exercise of stock options would be antidilutive.

 

For the three and six months ended June 30, 2013 the effect of 10,463,063 outstanding stock options and 5,647,203 warrants were excluded from the calculation of diluted loss per share because the effect was antidilutive. For the three and six months ended June 30, 2012 the effect of 7,131,039 outstanding stock options and 5,647,203 warrants were excluded from the calculation of diluted loss per share because the effect was antidilutive.

------=_NextPart_e4b555a2_dce1_4883_ae98_ddb405247342 Content-Location: file:///C:/e4b555a2_dce1_4883_ae98_ddb405247342/Worksheets/Sheet18.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Subsequent Event
6 Months Ended
Jun. 30, 2013
Subsequent Event
Subsequent Event

12. Subsequent Event

 

Spin-off of FV-100

 

On August 17, 2012, Synergy entered into an Asset Purchase Agreement (“Asset Purchase Agreement”) with Bristol-Myers Squibb Company (“BMS”) and acquired certain assets related to FV-100 (“FV-100”), an orally available nucleoside analog, for the treatment of shingles, a severe, painful skin rash caused by reactivation of the varicella zoster virus — the virus that causes chickenpox. Pursuant to the BMS Purchase Agreement Synergy purchased from BMS certain assets defined as “Acquired Assets” and assumed from BMS certain liabilities defined as “Assumed Liabilities”, in each case relating to the business being conducted by BMS as of the date of the BMS Purchase Agreement, consisting of the research, development, product design and related activities of BMS relating solely to FV-100, the vinyl ester pro-drug of Cf1743, a bicyclic nucleoside analogue (the “Product”)

 

On May 15, 2013 Synergy formed ContraVir Pharmaceuticals, Inc. (ContraVir), a Delaware corporation, for the purpose of developing the FV-100 Product.

 

During the period May 15, 2013 (inception) through June 30, 2013:

 

Contribution Agreement

 

Synergy and ContraVir entered into a Contribution Agreement (the “Contribution Agreement”), transferring the FV-100 Product to ContraVir, in exchange for the issuance to Synergy of 9,000,000 shares of the ContraVir common stock, par value $0.0001 per share (the “Common Stock”), representing 100% of the outstanding shares of Common Stock as of immediately following such issuance. During the period since August 17, 2012 through June 30, 2013 Synergy made no expenditures related to the research and development of FV-100, thus, the Company determined that the contributed asset did not meet the definition of a business, as defined in ASC 805, “Business Combinations” and was accounted for under ASC 350, “Intangibles Goodwill and Other” as a contribution of assets. The contribution of this asset was accounted for at Synergy’s net book value which was zero.  This agreement was amended and restated on August 5, 2013 to clarify certain indemnification provisions.

 

Loan and Security Agreement

 

On June 5, 2013 ContraVir entered into a Loan and Security Agreement with Synergy pursuant to which Synergy agreed to lend ContraVir up to five hundred thousand dollars ($500,000) for working capital purposes (the “Loan Agreement”).  Pursuant to the Loan Agreement Synergy made an advance to ContraVir of $100,000 under a promissory note (the “Note”).  The Note bears interest at six percent (6%) per annum and such interest shall be paid on the 15th of each of January, March, June and September, beginning September 15, 2013.  The Note matures on the earlier of June 10, 2014 or the date that the entire principal amount and interest shall become due and payable by reason of an event of default under the Note or otherwise.  In addition, Synergy has the right to demand payment of the unpaid principal amount and all accrued but unpaid interest thereon at any time after August 4, 2013, upon providing ContraVir fifteen (15) days prior written notice.  In connection with the Loan Agreement ContraVir granted Synergy a security interest in all of its assets, including its intellectual property, until the Note is repaid in full.

 

Shared Services Agreement

 

On July 8, 2013, ContraVir entered into a Shared Services Agreement with Synergy, effective May 16, 2013.  Under the Shared Services Agreement, Synergy will provide and/or make available to ContraVir various administrative, financial (including internal audit and payroll functions), legal, insurance, facility, information technology, laboratory, real estate and other services to be provided by, or on behalf of, Synergy, together with such other services as reasonably requested by ContraVir.

 

In consideration for such services, ContraVir will pay fees to Synergy for the services provided, and those fees will generally be in amounts intended to allow Synergy to recover all of its direct and indirect costs incurred in providing those services. The personnel performing services under the Shared Services Agreement will be employees and/or independent contractors of Synergy and will not be under our direction or control. These personnel costs will be based upon the actual time spent by Synergy personnel performing services for ContraVir under the shared services agreement. ContraVir will also reimburse Synergy for direct out-of-pocket costs incurred by Synergy for third party services provided to ContraVir.

 

The shared services agreement will continue in effect until terminated (1) by ContraVir at any time on at least 30 days’ prior written notice, (2) by either party if the non-defaulting party shall have failed to perform any of its material obligations under the agreement, provided the non-defaulting party shall have notified the defaulting party in writing and such failure shall have continued for a period of at least 30 days after receipt of such written notice. This agreement was amended and restated on August 5, 2013 to clarify certain indemnification provisions.

 

On August 8, 2013 ContraVir Pharmaceuticals, Inc., filed an initial Form 10 Registration Statement (“Form 10”) with the U.S. Securities and Exchange Commission. The separation contemplates a 100% distribution of the ContraVir shares of common stock, now held by Synergy, to Synergy’s stockholders on a pro-rata basis.  Completion of the transaction is subject to a number of conditions, including effectiveness of the registration statement filed with the SEC, and other customary conditions. The transaction also remains subject to final approval by the Synergy Board of Directors. Synergy notes that there can be no assurance that any separation transaction will ultimately occur, or, if one does occur, its terms or timing.

------=_NextPart_e4b555a2_dce1_4883_ae98_ddb405247342 Content-Location: file:///C:/e4b555a2_dce1_4883_ae98_ddb405247342/Worksheets/Sheet19.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Accounting for Shared-Based Payments (Tables)
6 Months Ended
Jun. 30, 2013
Accounting for Shared-Based Payments
Schedule of stock-based compensation expense

Stock-based compensation has been recognized in operating results as follow: (dollars in thousands)

 

 

 

Three Months
Ended June 30,

 

Six Months
Ended June 30

 

November 15,
2005
(inception) to

 

 

 

2013

 

2012

 

2013

 

2012

 

June 30, 2013

 

Employees—included in research and development

 

$

278

 

$

146

 

$

555

 

$

262

 

$

2,156

 

Employees—included in general and administrative

 

331

 

100

 

781

 

194

 

2,190

 

Subtotal employee stock based compensation

 

609

 

246

 

1,336

 

456

 

4,346

 

Non-employees—included in research and development

 

2

 

 

137

 

 

433

 

Non-employees—included in general and administrative

 

300

 

108

 

695

 

336

 

2,873

 

Subtotal non-employee stock based compensation

 

302

 

108

 

832

 

337

 

3,306

 

 

 

 

 

 

 

 

 

 

 

 

 

Total stock-based compensation expense

 

$

911

 

$

354

 

$

2,168

 

$

792

 

$

7,652

 

Schedule of weighted-average assumptions used to estimate fair value of stock option awards using the Black-Scholes option valuation model

 

 

Six Months
Ended
June 30, 2013

 

Six Months
Ended
June 30, 2012

 

Risk-free interest rate

 

0.41%-1.11%

 

0.97%-1.50%

 

Dividend yield

 

 

 

Expected volatility

 

60%

 

60%

 

Expected term (in years)

 

6 years

 

6 years

 

Summary of stock option activity and of changes in stock options outstanding under the Plan

 

 

Number of
Options

 

Exercise Price
Per Share

 

Weighted Average
Exercise Price
Per Share

 

Intrinsic
Value
(in thousands)

 

Weighted Average
Remaining
Contractual Term

 

Balance outstanding, December 31, 2012

 

9,734,268

 

$

0.50 — 5.20

 

$

2.75

 

$

24,482

 

6.45 years

 

Granted

 

1,589,316

(a)

$

0.44 — 20.01

 

$

7.62

 

 

 

 

 

Exercised

 

(61,787

)

$

0.44 — 4.28

 

$

1.91

 

 

 

 

 

Forfeited

 

(798,734

)(a)

$

4.42 — 12.51

 

$

5.85

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance outstanding, June 30, 2013

 

10,463,063

(a)

$

0.44-20.01

 

$

3.25

 

$

16,649

 

7.2 years

 

Exercisable at June 30, 2013

 

3,591,494

(a)

$

0.44-20.01

 

$

2.68

 

$

8,472

 

5.5 years

 

 

(a)         Includes 1,221,316 stock options issued to former Callisto option holders under the terms of Callisto Synergy Merger Agreement dated January 17, 2013, of which 711,293 stock options are vested and 298,734 stock options expired were forfeited through June 30, 2013.

------=_NextPart_e4b555a2_dce1_4883_ae98_ddb405247342 Content-Location: file:///C:/e4b555a2_dce1_4883_ae98_ddb405247342/Worksheets/Sheet20.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Stockholder's Equity (Tables)
6 Months Ended
Jun. 30, 2013
Stockholder's Equity
Schedule of net liabilities of Callisto assumed and advances to Callisto eliminated in connection with this recapitalization

 

 

Balance

 

($ in thousands)

 

January 17, 2013

 

Assets

 

 

 

Cash

 

$

 

Security deposits

 

74

 

Total assets acquired

 

74

 

Liabilities

 

 

 

Accounts payable and other liabilities

 

(1,400

)

Net assumed liabilities

 

(1,326

)

Elimination of amounts due from Callisto

 

(3,578

)

Recapitalization of Synergy

 

$

(4,904

)

------=_NextPart_e4b555a2_dce1_4883_ae98_ddb405247342 Content-Location: file:///C:/e4b555a2_dce1_4883_ae98_ddb405247342/Worksheets/Sheet21.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Derivative Financial Instruments (Tables)
6 Months Ended
Jun. 30, 2013
Derivative Financial Instruments
Schedule of changes in derivative financial instruments liability balance

Date

 

Description

 

Warrants

 

Derivative
Instrument
Liability
(in thousands)

 

12/31/2011

 

Balance

 

2,265,160

 

$

3,325

 

3/31/2012

 

Fair value of new warrants issued during the quarter

 

 

 

 

 

3/31/2012

 

Change in fair value of warrants during the quarter recognized as other income in the statement of operations

 

 

 

(8

)

3/31/2012

 

Balance

 

2,265,160

 

3,317

 

6/30/2012

 

Fair value of new warrants issued during the quarter

 

112,500

 

169

 

 

 

 

 

 

 

 

 

6/30/2012

 

Change in fair value of warrants during the quarter recognized as other expense in the statement of operations

 

 

1,317

 

6/30/2012

 

Balance

 

2,377,660

 

4,803

 

9/30/2012

 

Fair value of new warrants issued during the quarter

 

 

 

9/30/2012

 

Change in fair value of warrants during the quarter recognized as other income in the statement of operations

 

 

(140

)

9/30/2012

 

Balance

 

2,377,660

 

4,663

 

12/31/2012

 

Fair value of new warrants issued during the quarter

 

 

 

12/31/2012

 

Reclass of derivative liability to equity during the quarter

 

(112,500

)

(169

)

12/31/2012

 

Change in fair value of warrants during the quarter recognized as other expense in the statement of operations

 

 

764

 

12/31/2012

 

Balance

 

2,265,160

 

5,258

 

3/31/2013

 

Change in fair value of warrants during the quarter recognized as other expense in the statement of operations

 

 

1,093

 

 

 

 

 

 

 

 

 

3/31/2013

 

Balance

 

2,265,160

 

6,351

 

6/30/2013

 

Fair value of new warrants issued during the quarter

 

 

 

6/30/2013

 

Reclass of derivative liability to equity during the quarter

 

(1,406,691

)

(3,575

)

6/30/2013

 

Change in fair value of warrants during the quarter recognized as other income in the statement of operations

 

 

(1,803

)

6/30/2013

 

Balance

 

858,469

 

$

973

 

Schedule of liabilities that are measured and recognized at fair value on a recurring basis

($ in thousands)

 

Description

 

Quoted Prices
in
Active
Markets
for Identical
Assets and
Liabilities
(Level 1)

 

Significant
Other
Observable
Inputs
(Level 2)

 

Significant
Unobservable
Inputs
(Level 3)

 

Balance as of
December 31,
2012

 

Quoted Prices
in
Active
Markets
for Identical
Assets and
Liabilities
(Level 1)

 

Significant
Other
Observable
Inputs
(Level 2)

 

Significant
Unobservable
Inputs
(Level 3)

 

Balance as of
June 30,
2013

 

Derivative liabilities related to Warrants

 

$

 

$

 

$

5,258

 

$

5,258

 

$

 

$

 

$

973

 

$

973

 

Summary of changes in the fair value of Level 3 liabilities

Description 

 

Balance at
December 31,
2012

 

Fair value of
warrants
reclassified to
additional paid
in capital

 

(Gain) or loss
recognized in
earning from
Change in Fair
Value

 

Balance as of
June 30,
2013

 

Derivative liabilities related to Warrants

 

$

5,258

 

$

(3,575

)

$

(710

)

$

973

 

Derivative instrument liability | Warrants | Black-Scholes option pricing model
Derivative Financial Instruments
Schedule of range of assumptions used to determine the fair value of the warrants

 

 

Six Months Ended
June 30, 2013

 

Six Months Ended
June 30, 2012

 

Fair value of Synergy common stock

 

$

4.32

 

$

$4.75

 

Expected warrant term

 

5-7 years

 

5-7 years

 

Risk-free interest rate

 

0.36%-1.41%

 

0.32%-1.33%

 

Expected volatility

 

60%

 

60%

 

Dividend yield

 

 

 

Derivative instrument liability | Warrants | Binomial model
Derivative Financial Instruments
Schedule of range of assumptions used to determine the fair value of the warrants

 

 

Six months ended,
June 30th, 2013

 

Six months ended,
June 30, 2012

 

Fair value of Synergy common stock

 

$

 

$3.28-$4.50

 

Expected warrant term

 

 

4.4 - 4.6 years

 

Risk-free interest rate

 

 

0.72%-1.03%

 

Expected volatility

 

 

60%

 

Dividend yield

 

 

 

------=_NextPart_e4b555a2_dce1_4883_ae98_ddb405247342 Content-Location: file:///C:/e4b555a2_dce1_4883_ae98_ddb405247342/Worksheets/Sheet22.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Cash, Cash Equivalents and Marketable Securities (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Jun. 30, 2012
Dec. 31, 2012
Dec. 31, 2011
Cash, Cash Equivalents and Marketable Securities
Cash and cash equivalents $ 8,312 $ 27,427 $ 8,312 $ 27,427 $ 12,416 $ 13,245
Available-for-sale securities 83,988 83,988 20,086
Maximum maturity period of U.S. Treasury securities 1 year
Net realized gains or losses $ 0 $ 0 $ 0 $ 0
------=_NextPart_e4b555a2_dce1_4883_ae98_ddb405247342 Content-Location: file:///C:/e4b555a2_dce1_4883_ae98_ddb405247342/Worksheets/Sheet23.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Accounting for Shared-Based Payments (Details) (USD $)
3 Months Ended 6 Months Ended 91 Months Ended 3 Months Ended 6 Months Ended 91 Months Ended 3 Months Ended 6 Months Ended 91 Months Ended 3 Months Ended 6 Months Ended 91 Months Ended 3 Months Ended 6 Months Ended 91 Months Ended 3 Months Ended 6 Months Ended 91 Months Ended 3 Months Ended 6 Months Ended 91 Months Ended 6 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Jan. 17, 2013
2008 Equity Compensation Incentive Plan
Dec. 31, 2012
2008 Equity Compensation Incentive Plan
Jun. 30, 2013
Employees
Jun. 30, 2012
Employees
Jun. 30, 2013
Employees
Jun. 30, 2012
Employees
Jun. 30, 2013
Employees
Jun. 30, 2013
Employees
Research and development
Jun. 30, 2012
Employees
Research and development
Jun. 30, 2013
Employees
Research and development
Jun. 30, 2012
Employees
Research and development
Jun. 30, 2013
Employees
Research and development
Jun. 30, 2013
Employees
General and administrative
Jun. 30, 2012
Employees
General and administrative
Jun. 30, 2013
Employees
General and administrative
Jun. 30, 2012
Employees
General and administrative
Jun. 30, 2013
Employees
General and administrative
Jun. 30, 2013
Non-employees
Jun. 30, 2012
Non-employees
Jun. 30, 2013
Non-employees
Jun. 30, 2012
Non-employees
Jun. 30, 2013
Non-employees
Jun. 30, 2013
Non-employees
Research and development
Jun. 30, 2013
Non-employees
Research and development
Jun. 30, 2013
Non-employees
Research and development
Jun. 30, 2013
Non-employees
General and administrative
Jun. 30, 2012
Non-employees
General and administrative
Jun. 30, 2013
Non-employees
General and administrative
Jun. 30, 2012
Non-employees
General and administrative
Jun. 30, 2013
Non-employees
General and administrative
Jun. 30, 2013
Stock options
Jun. 30, 2012
Stock options
Shared-based payments
Amount of excess tax benefits recognized $ 0
Vesting period 3 years
Contractual term 10 years
Number of shares reserved under the plan 15,000,000 7,500,000
Total stock-based compensation expense (in dollars) 911,000 354,000 2,168,000 792,000 7,652,000 609,000 246,000 1,336,000 456,000 4,346,000 278,000 146,000 555,000 262,000 2,156,000 331,000 100,000 781,000 194,000 2,190,000 302,000 108,000 832,000 337,000 3,306,000 2,000 137,000 433,000 300,000 108,000 695,000 336,000 2,873,000
Unrecognized compensation cost related to non-vested employee stock options (in dollars) $ 7,400,000
Weighted-average remaining vesting period over which unrecognized compensation cost is to be recognized 2 years
Number of stock options which vest upon a change of control 4,364,000
Weighted-average assumptions used to estimate fair value of stock option awards using the Black-Scholes option valuation model
Risk-free interest rate, minimum (as a percent) 0.41% 0.97%
Risk-free interest rate, maximum (as a percent) 1.11% 1.50%
Expected volatility (as a percent) 60.00% 60.00%
Expected term 6 years 6 years
------=_NextPart_e4b555a2_dce1_4883_ae98_ddb405247342 Content-Location: file:///C:/e4b555a2_dce1_4883_ae98_ddb405247342/Worksheets/Sheet24.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Accounting for Shared-Based Payments (Details 2) (Stock options, USD $)
In Thousands, except Share data, unless otherwise specified
0 Months Ended 6 Months Ended 12 Months Ended 6 Months Ended
Jan. 17, 2013
Callisto
Jun. 30, 2013
Callisto
Dec. 31, 2012
Exercise price per Share 0.50 - 5.20
Jun. 30, 2013
Exercise price per Share 0.44 - 20.01
Jun. 30, 2013
Exercise price per Share 0.44 - 20.01
Maximum
Jun. 30, 2013
Exercise price per Share 0.44 - 20.01
Minimum
Jun. 30, 2013
Exercise price per Share 0.44 - 4.28
Jun. 30, 2013
Exercise price per Share 0.44 - 4.28
Maximum
Jun. 30, 2013
Exercise price per Share 0.44 - 4.28
Minimum
Jun. 30, 2013
Exercise price per Share 4.42 - 12.51
Jun. 30, 2013
Exercise price per Share 4.42 - 12.51
Maximum
Jun. 30, 2013
Exercise price per Share 4.42 - 12.51
Minimum
Shared-based payments
Options outstanding (in shares) 9,734,268 10,463,063
Granted (in shares) 1,221,316 1,589,316
Exercised (in shares) (61,787)
Forfeited (in shares) (298,734) (798,734)
Exercisable at the end of the period (in shares) 3,591,494
Exercise Price Per Share
Exercise price, low end of the range (in dollars per share) $ 0.5 $ 0.44 $ 0.44 $ 4.42
Exercise price, high end of the range (in dollars per share) $ 5.2 $ 20.01 $ 4.28 $ 12.51
Granted (in dollars per share) $ 20.01 $ 0.44
Exercised (in dollars per share) $ 4.28 $ 0.44
Forfeited (in dollars per share) $ 12.51 $ 4.42
Exercisable at the end of the period (in dollars per share) $ 20.01 $ 0.44
Weighted average exercise price per share of outstanding options (in dollars per share) $ 2.75 $ 3.25
Granted (in dollars per share) $ 7.62
Exercised (in dollars per share) $ 1.91
Forfeited (in dollars per share) $ 5.85
Exercisable at the end of the period (in dollars per share) $ 2.68
Intrinsic Value
Intrinsic value of options outstanding (in dollars) $ 24,482 $ 16,649
Intrinsic value of options exercisable (in dollars) $ 8,472
Weighted Average Remaining Contractual Term
Balance at the end of the period 6 years 5 months 12 days 7 years 2 months 12 days
Exercisable at the end of the period 5 years 6 months
Additional disclosures
Vested (in shares) 711,293
------=_NextPart_e4b555a2_dce1_4883_ae98_ddb405247342 Content-Location: file:///C:/e4b555a2_dce1_4883_ae98_ddb405247342/Worksheets/Sheet25.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Income Taxes (Details) (New York City Department of Finance, USD $)
Jun. 30, 2013
QETC credit
Dec. 31, 2012
QETC credit
Jul. 23, 2013
QETC credit
Subsequent event
Jun. 30, 2013
Biotechnology Tax Credit
Dec. 31, 2012
Biotechnology Tax Credit
Income taxes
Refundable tax credits $ 250,000 $ 250,000 $ 250,000 $ 250,000
Refund received from tax credit $ 250,000
------=_NextPart_e4b555a2_dce1_4883_ae98_ddb405247342 Content-Location: file:///C:/e4b555a2_dce1_4883_ae98_ddb405247342/Worksheets/Sheet26.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Stockholder's Equity (Details) (USD $)
3 Months Ended 6 Months Ended 12 Months Ended 91 Months Ended 6 Months Ended 0 Months Ended 1 Months Ended 3 Months Ended 0 Months Ended 3 Months Ended 0 Months Ended
Jun. 30, 2013
Dec. 31, 2012
Jun. 30, 2013
Jun. 30, 2012
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Jun. 30, 2013
Jan. 17, 2013
Jun. 30, 2013
June 21, 2012 Equity sales agreement
Jan. 17, 2013
Callisto Merger Agreement
Oct. 18, 2012
CRO stock purchase agreement
Jan. 31, 2013
CRO stock purchase agreement
Dec. 31, 2012
CRO stock purchase agreement
Jun. 30, 2013
CRO stock purchase agreement
Mar. 31, 2013
CRO stock purchase agreement
Dec. 31, 2012
CRO stock purchase agreement
Oct. 17, 2012
CRO stock purchase agreement
Apr. 16, 2013
April 2013 Registered Direct Offering
Nov. 14, 2011
November 14, 2011 securities purchase agreements
Jun. 30, 2013
November 14, 2011 securities purchase agreements
Dec. 01, 2011
November 14, 2011 securities purchase agreements
Selling agent
Stockholder's Equity
Number of authorized shares of common stock 200,000,000 100,000,000 200,000,000 100,000,000 200,000,000 100,000,000
Stockholder's Equity
Common stock issued (in shares) 758,093 16,375,000
Common stock price (in dollars per share) $ 6.16 $ 4.55 $ 5.5
Gross proceeds from sale of common stock by the entity $ 94,734,000 $ 51,750,000 $ 211,168,000 $ 4,700,000 $ 90,000,000
Stock issuance costs 5,623,000 3,358,000 12,346,000 100,000 5,500,000
Number of units sold 1,328,941
Number of units issued for services (in units) 77,750
Number of shares of common stock per unit 1
Number of warrants per unit 1
Number of common shares that can be acquired upon exercise of each warrant 1
Fair value of derivative liabilities reclassified to equity 3,575,000 169,000 3,600,000
Derivative liability marked to market 870,000
Fair value of common stock issued for services rendered 250,000 93,000 341,000 18,000 2,000 250,000
Percentage of services completed of total contract 50.00%
Fair value of common stock issued for services rendered (in shares) 55,000
Closing stock price (in dollars per share) $ 4.57
Stock based compensation expense 2,168,000 792,000 7,652,000 125,000 125,000
Percentage of the total contract 25.00%
Shares issued in connection with merger 28,605,379
Exchange Ratio of shares 0.1799
Cancellation of stock (in shares) 22,294,976
Lock-up period 18 months
Shares granted in connection with merger 1,221,316
Assets
Security deposits 74,000
Total assets acquired 74,000
Liabilities
Accounts payable and other liabilities (1,400,000)
Net assumed liabilities (1,326,000)
Elimination of amounts due from Callisto (3,578,000)
Recapitalization of Synergy $ (4,904,000) $ (4,904,000) $ (4,904,000)
------=_NextPart_e4b555a2_dce1_4883_ae98_ddb405247342 Content-Location: file:///C:/e4b555a2_dce1_4883_ae98_ddb405247342/Worksheets/Sheet27.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Research and Development Expense (Details) (USD $)
In Millions, unless otherwise specified
Jun. 30, 2013
Dec. 31, 2012
Research and Development Expense
Prepaid research and development costs $ 1.5 $ 0.9
------=_NextPart_e4b555a2_dce1_4883_ae98_ddb405247342 Content-Location: file:///C:/e4b555a2_dce1_4883_ae98_ddb405247342/Worksheets/Sheet28.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Derivative Financial Instruments (Details) (Derivative instrument liability, Warrants, USD $)
6 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Black-Scholes option pricing model
Range of assumptions used to determine the fair value of the warrants
Fair value of Synergy common stock (in dollars per share) $ 4.32 $ 4.75
Expected volatility (as a percent) 60.00% 60.00%
Black-Scholes option pricing model | Minimum
Range of assumptions used to determine the fair value of the warrants
Expected warrant term 5 years 5 years
Risk-free interest rate (as a percent) 0.36% 0.32%
Black-Scholes option pricing model | Maximum
Range of assumptions used to determine the fair value of the warrants
Expected warrant term 7 years 7 years
Risk-free interest rate (as a percent) 1.41% 1.33%
Binomial model
Range of assumptions used to determine the fair value of the warrants
Expected volatility (as a percent) 60.00%
Binomial model | Minimum
Range of assumptions used to determine the fair value of the warrants
Fair value of Synergy common stock (in dollars per share) $ 3.28
Expected warrant term 4 years 4 months 24 days
Risk-free interest rate (as a percent) 0.72%
Binomial model | Maximum
Range of assumptions used to determine the fair value of the warrants
Fair value of Synergy common stock (in dollars per share) $ 4.5
Expected warrant term 4 years 7 months 6 days
Risk-free interest rate (as a percent) 1.03%
------=_NextPart_e4b555a2_dce1_4883_ae98_ddb405247342 Content-Location: file:///C:/e4b555a2_dce1_4883_ae98_ddb405247342/Worksheets/Sheet29.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Derivative Financial Instruments (Details 2) (USD $)
3 Months Ended 0 Months Ended 3 Months Ended 0 Months Ended
Jun. 30, 2013
Dec. 31, 2012
Nov. 14, 2011
November 14, 2011 securities purchase agreements
Jun. 30, 2013
November 14, 2011 securities purchase agreements
Dec. 01, 2011
November 14, 2011 securities purchase agreements
Selling agent
Derivative Financial Instruments
Number of units sold 1,328,941
Number of units issued for services (in units) 77,750
Number of shares of common stock per unit 1
Number of warrants per unit 1
Number of common shares that can be acquired upon exercise of each warrant 1
Fair value of derivative liabilities reclassified to equity $ 3,575,000 $ 169,000 $ 3,600,000
Derivative liability marked to market $ 870,000
------=_NextPart_e4b555a2_dce1_4883_ae98_ddb405247342 Content-Location: file:///C:/e4b555a2_dce1_4883_ae98_ddb405247342/Worksheets/Sheet30.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Derivative Financial Instruments (Details 3) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 6 Months Ended 91 Months Ended
Jun. 30, 2013
Mar. 31, 2013
Dec. 31, 2012
Sep. 30, 2012
Jun. 30, 2012
Mar. 31, 2012
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Changes in warrants
Balance at the beginning of the period (in shares) 2,265,160 2,265,160 2,377,660 2,377,660 2,265,160 2,265,160 2,265,160 2,265,160
Fair value of new warrants issued during the quarter (in shares) 112,500
Reclassification of derivative liability to equity during the quarter (in shares) (1,406,691) (112,500)
Balance at the end of the period (in shares) 858,469 2,265,160 2,265,160 2,377,660 2,377,660 2,265,160 858,469 2,377,660 858,469
Changes in derivative instrument liability
Balance at the beginning of the period $ 6,351 $ 5,258 $ 4,663 $ 4,803 $ 3,317 $ 3,325 $ 5,258 $ 3,325
Fair value of new warrants issued during the quarter 169
Reclassification of derivative liability to equity during the quarter (3,575) (169)
Change in fair value of warrants during the quarter recognized as other income in the statement of operations (1,803) 1,093 764 (140) 1,317 (8) (710) 1,309 (4,331)
Balance at the end of the period $ 973 $ 6,351 $ 5,258 $ 4,663 $ 4,803 $ 3,317 $ 973 $ 4,803 $ 973
------=_NextPart_e4b555a2_dce1_4883_ae98_ddb405247342 Content-Location: file:///C:/e4b555a2_dce1_4883_ae98_ddb405247342/Worksheets/Sheet31.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Derivative Financial Instruments (Details 4) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2013
Mar. 31, 2013
Dec. 31, 2012
Sep. 30, 2012
Jun. 30, 2012
Mar. 31, 2012
Dec. 31, 2011
Derivative Financial Instruments
Derivative liabilities related to Warrants $ 973 $ 6,351 $ 5,258 $ 4,663 $ 4,803 $ 3,317 $ 3,325
Fair value on a recurring basis | Significant Unobservable Inputs (Level 3) | Derivative instrument liability | Warrants
Derivative Financial Instruments
Derivative liabilities related to Warrants 973 5,258
Fair value on a recurring basis | Total Fair Value | Derivative instrument liability | Warrants
Derivative Financial Instruments
Derivative liabilities related to Warrants $ 973 $ 5,258
------=_NextPart_e4b555a2_dce1_4883_ae98_ddb405247342 Content-Location: file:///C:/e4b555a2_dce1_4883_ae98_ddb405247342/Worksheets/Sheet32.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Derivative Financial Instruments (Details 5) (Derivative instrument liability, Warrants, Level 3, USD $)
In Thousands, unless otherwise specified
6 Months Ended
Jun. 30, 2013
Derivative instrument liability | Warrants | Level 3
Changes in the fair value of Level 3 liabilities
Balance at the beginning of the period $ 5,258
Fair value of warrants reclassified to additional paid in capital (3,575)
(Gain) or loss recognized in earning from Change in Fair Value (710)
Balance at the end of the period $ 973
------=_NextPart_e4b555a2_dce1_4883_ae98_ddb405247342 Content-Location: file:///C:/e4b555a2_dce1_4883_ae98_ddb405247342/Worksheets/Sheet33.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Loss per Share (Details)
3 Months Ended 6 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Jun. 30, 2012
Stock options
Loss per Share
Number of antidilutive securities excluded from the calculation of diluted loss per share 10,463,063 7,131,039 10,463,063 7,131,039
Warrants
Loss per Share
Number of antidilutive securities excluded from the calculation of diluted loss per share 5,647,203 5,647,203 5,647,203 5,647,203
------=_NextPart_e4b555a2_dce1_4883_ae98_ddb405247342 Content-Location: file:///C:/e4b555a2_dce1_4883_ae98_ddb405247342/Worksheets/Sheet34.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Subsequent Event (Details) (USD $)
3 Months Ended 6 Months Ended 91 Months Ended 2 Months Ended 10 Months Ended 0 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Dec. 31, 2012
Jun. 30, 2013
ContraVir
Contribution Agreement
Jun. 30, 2013
ContraVir
Contribution Agreement
Jun. 05, 2013
ContraVir
Promissory note
Aug. 08, 2013
Subsequent event
ContraVir
Jul. 08, 2013
Subsequent event
ContraVir
Shared Services Agreement
Minimum
Subsequent Event
Number of shares issued of common stock 9,000,000
Common stock, par value (in dollars per share) $ 0.0001 $ 0.0001 $ 0.0001 $ 0.0001 $ 0.0001 $ 0.0001
Percentage of outstanding shares of common stock upon issuance 100.00%
Research and development expenditures $ 9,055,000 $ 7,626,000 $ 23,399,000 $ 12,964,000 $ 81,106,000 $ 0
Net book value of asset contributed 0 0
Maximum amount that the subsidiary agreed to repay entity in relation to a promissory note 500,000
Unpaid principal amount of advances made to subsidiaries $ 100,000
Interest rate (as a percent) 6.00%
Period of prior written notice for demanding payment of unpaid principal amount and all accrued but unpaid interest thereon at anytime after specified date 15 days
Period of prior written notice for termination of agreement 30 days
Period of failure to perform material obligations after receipt of written notice for termination of agreement 30 days
Percentage of common stock for a potential distribution to the entity's stockholders 100.00%
------=_NextPart_e4b555a2_dce1_4883_ae98_ddb405247342 Content-Location: file:///C:/e4b555a2_dce1_4883_ae98_ddb405247342/Worksheets/filelist.xml Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii" ------=_NextPart_e4b555a2_dce1_4883_ae98_ddb405247342--