−Removed: Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
+Added: Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Market Information for Common Stock
−Removed: Our common stock is listed on the Nasdaq Global Select Market under the symbol “ACRS.”
+Added: Our common stock is listed on the Nasdaq Global Select Market under the symbol “ACRS.”
Dividend Policy
1 unchanged sentence
We anticipate that we will retain all of our future earnings, if any, for use in the operation and expansion of our business and do not anticipate paying cash dividends in the foreseeable future.
−Removed: As of February 24, 2020, we had 41,528,822 shares of common stock outstanding held by 60 holders of record.
+Added: As of January 31, 2021, we had 51,804,258 shares of common stock outstanding held by 56 holders of record.
The actual number of stockholders is greater than this number of record holders and includes stockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees.
4 unchanged sentences
Not applicable.
−Removed: Management’s Discussion and Analysis of Financial Condition and Results of Operations
−Removed: You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the consolidated financial statements and the related notes to those statements included later in this Annual Report.
−Removed: In addition to historical financial information, the following discussion contains forward‑looking statements that reflect our plans, estimates, beliefs and expectations that involve risks and uncertainties.
−Removed: Our actual results and the timing of events could differ materially from those discussed in these forward‑looking statements.
−Removed: Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Annual Report, particularly in “Item 1A.
−Removed: Risk Factors”
−Removed: and “Special Note Regarding Forward‑Looking Statements.”
−Removed: We are a physician-led biopharmaceutical company focused on immuno-inflammatory diseases.
−Removed: We currently have a pipeline of drug candidates focused on immuno-inflammatory diseases, as well as one product approved by the U.S.
−Removed: Food and Drug Administration, or FDA, that we are not currently distributing, marketing or selling, and other investigational drug candidates.
−Removed: In September 2019, we announced the completion of a strategic review of our business, as a result of which we are refocusing our resources on our immuno-inflammatory development programs.
−Removed: We plan to pursue strategic alternatives, including identifying and consummating transactions with third-party partners, to further develop, obtain marketing approval for and/or commercialize our drug candidates and ESKATA (hydrogen peroxide) topical solution, 40% (w/w), or ESKATA, our non-marketed FDA-approved product.
−Removed: Since our inception, we have incurred significant operating losses.
−Removed: Our net loss was $161.4 million for the year ended December 31, 2019 and $132.7 million for the year ended December 31, 2018.
−Removed: As of December 31, 2019, we had an accumulated deficit of $453.5 million.
−Removed: We expect to incur significant expenses and operating losses for the foreseeable future as we advance our drug candidates from discovery through preclinical and clinical development.
−Removed: In addition, our drug candidates, even if they are approved by regulatory agencies for marketing, may not achieve commercial success.
−Removed: We may also not be successful in pursuing strategic alternatives, including identifying and consummating transactions with third-party partners, to further develop, obtain marketing approval for and/or commercialize our drug candidates or ESKATA .
−Removed: Furthermore, we have incurred and expect to continue to incur significant costs associated with operating as a public company, including legal, accounting, investor relations and other expenses.
−Removed: As a result, we will need substantial additional funding to support our continuing operations.
−Removed: We have historically financed our operations primarily with sales of our convertible preferred stock, as well as net proceeds from our initial public offering, or IPO, in October 2015, and subsequent public offerings of, and a private placement of, our common stock.
−Removed: In the near term, we expect to finance our operations through the sale of equity, debt financings or other capital sources, including potential partnerships with other companies or other strategic transactions.
−Removed: We may be unable to raise additional funds or enter into such other agreements or arrangements when needed on commercially acceptable terms, or at all.
−Removed: If we fail to raise capital or enter into such agreements as, and when, needed, we may have to significantly delay, scale back or discontinue the development of one or more of our drug candidates .
−Removed: License Agreement with Rigel
−Removed: In August 2015, we entered into an exclusive, worldwide license and collaboration agreement with Rigel Pharmaceuticals, Inc., or Rigel, for the development and commercialization of products containing two specified Janus Kinase, or JAK, inhibitors, ATI-501 and ATI-502, or the Rigel License Agreement, which we amended in October 2019.
−Removed: Under this agreement, we may develop these JAK inhibitors for the treatment of alopecia areata, or AA, and other dermatological conditions.
−Removed: We paid Rigel an upfront nonrefundable payment of $8.0 million in 2015 and $4.0 million upon the achievement of a specified development milestone in 2019.
−Removed: In addition, we have agreed to make remaining aggregate payments of up to $76.0 million upon the achievement of specified development milestones, such as clinical trials and regulatory approvals.
−Removed: Further, we have agreed to pay up to an additional $10.5 million to Rigel upon the achievement of a second set of development milestones.
−Removed: In addition, in connection with the amendment of the agreement in October 2019, we agreed to pay Rigel an amendment fee of $1.5 million in three installments of $0.5 million in January 2020, April 2020 and July 2020, which is included in accrued expenses on our consolidated balance sheet.
−Removed: With respect to any products we commercialize under the Rigel License Agreement, we will pay Rigel quarterly tiered royalties on our annual net sales of each product at a high single digit percentage of annual net sales, subject to specified reductions until the date that all of the patent rights for that product have expired, as determined on a country-by-country and product-by-
−Removed: product basis or, in specified countries under specified circumstances, 10 years from the first commercial sale of such product.
−Removed: The Rigel License Agreement terminates on the date of expiration of all royalty obligations unless earlier terminated by either party for a material breach.
−Removed: We may also terminate the Rigel License Agreement without cause at any time upon advance written notice to Rigel.
−Removed: Rigel, after consultation with us, will be responsible for maintaining and prosecuting the patent rights, and we will have final decision-making authority regarding such patent rights for a product in the United States and the European Union.
−Removed: To the extent that we jointly develop intellectual property, we will confer and decide which party will be responsible for filing, prosecuting and maintaining those patent rights.
−Removed: The Rigel License Agreement also establishes a joint steering committee composed of an equal number of representatives for each party, which will monitor progress in the development of products.
−Removed: Stock Purchase Agreement with Vixen Pharmaceuticals, Inc.
−Removed: and License Agreement with Columbia University
−Removed: In March 2016, we entered into a stock purchase agreement, or the Vixen Agreement, with Vixen Pharmaceuticals, Inc., or Vixen , and JAK1, LLC, JAK2, LLC and JAK3, LLC, or together, the Selling Stockholders, and Shareholder Representative Services LLC as the representative of the Selling Stockholders.
−Removed: Pursuant to the Vixen Agreement, we acquired all shares of Vixen’s capital stock from the Selling Stockholders, or the Vixen Acquisition.
−Removed: Following the Vixen Acquisition, Vixen became our wholly-owned subsidiary.
−Removed: Pursuant to the Vixen Agreement, we paid $0.6 million upfront and issued an aggregate of 159,420 shares of our common stock to the Selling Stockholders.
−Removed: We are obligated to make annual payments of $0.1 million through March 2022, with such amounts being creditable against specified future payments that may be paid under the Vixen Agreement.
−Removed: Under the Vixen Agreement we are obligated to make aggregate payments of up to $18.0 million to the Selling Stockholders upon the achievement of specified pre-commercialization milestones for three products covered by the Vixen patent rights in the United States, the European Union and Japan, and aggregate payments of up to $22.5 million upon the achievement of specified commercial milestones for products covered by the Vixen patent rights.
−Removed: With respect to any covered products that we commercialize under the Vixen Agreement, we are obligated to pay low single-digit royalties on net sales, subject to specified reductions, limitations and other adjustments, until the date that all of the patent rights for that product have expired, as determined on a country-by-country and product-by-product basis or, in specified circumstances, ten years from the first commercial sale of such product.
−Removed: If we sublicense any of Vixen’s patent rights and know-how acquired pursuant to the Vixen Agreement, we will be obligated to pay a portion of any consideration we receive from such sublicenses in specified circumstances.
−Removed: As a result of the Vixen Acquisition, we became party to the Exclusive License Agreement, by and between Vixen and the Trustees of Columbia University in the City of New York, or Columbia, dated as of December 31, 2015, or, as amended, the Columbia License Agreement.
−Removed: Under the Columbia License Agreement, we are obligated to pay Columbia an annual license fee of $10,000 subject to specified adjustments for patent expenses incurred by Columbia and creditable against any royalties that may be paid under the Columbia License Agreement.
−Removed: We are also obligated to pay up to an aggregate of $11.6 million upon the achievement of specified commercial milestones, including specified levels of net sales of products covered by Columbia patent rights and/or know-how, and royalties at a sub-single-digit percentage of annual net sales of products covered by Columbia patent rights and/or know-how, subject to specified adjustments.
−Removed: If we sublicense any of Columbia’s patent rights and know-how acquired pursuant to the Columbia License Agreement, we will be obligated to pay Columbia a portion of any consideration received from such sublicenses in specified circumstances.
−Removed: The royalties, as determined on a country-by-country and product-by-product basis, are payable until the date that all of the patent rights for that product have expired, the expiration of any market exclusivity period granted by a regulatory body or, in specified circumstances, ten years from the first commercial sale of such product.
−Removed: The Columbia License Agreement terminates on the date of expiration of all royalty obligations thereunder unless earlier terminated by either party for a material breach, subject to a specified cure period.
−Removed: We may also terminate the Columbia License Agreement without cause at any time upon advance written notice to Columbia.
−Removed: Agreement and Plan of Merger with Confluence
−Removed: In August 2017, we entered into an Agreement and Plan of Merger, or the Confluence Agreement, with Confluence, Aclaris Life Sciences, Inc., our wholly-owned subsidiary, or Merger Sub, and Fortis Advisors LLC, as representative of the equity holders of Confluence.
−Removed: Pursuant to the terms of the Confluence Agreement, the Merger Sub merged with and into Confluence, with Confluence surviving as our wholly-owned subsidiary.
−Removed: We paid $10.3 million in cash and issued 349,527 shares of our common stock with a fair value of $9.7 million to the Confluence equity holders.
−Removed: In November 2018, we achieved a development milestone specified in the Confluence Agreement.
−Removed: The milestone payment to the former Confluence equity holders was comprised of $2.5 million in cash and 253,208 shares of our common stock with a fair value of $2.2 million.
−Removed: We also agreed to pay the former Confluence equity holders aggregate remaining contingent consideration of up to $75.0 million, based upon the achievement of specified regulatory and commercial milestones set forth in the Confluence Agreement.
−Removed: In addition, we have agreed to pay the former Confluence equity holders future royalty payments calculated as a low single-digit percentage of annual net sales, subject to specified reductions, limitations and other adjustments, until the date that all of the patent rights for that product have expired, as determined on a country-by-country and product-by-product basis or, in specified circumstances, ten years from the first commercial sale of such product.
−Removed: In addition, if we sell, license or transfer any of the intellectual property acquired from Confluence pursuant to the Confluence Agreement to a third party, we will be obligated to pay the former Confluence equity holders a portion of any incremental consideration (in excess of the development and milestone payments described above) that we receive from such sale, license or transfer in specified circumstances.
−Removed: License, Development and Commercialization Agreement with Cipher Pharmaceuticals Inc.
−Removed: In April 2018, we entered into an exclusive license agreement with Cipher Pharmaceuticals Inc., or Cipher, for the rights to obtain regulatory approval of and commercialize A-101 40% Topical Solution, which we marketed under the brand name ESKATA in the United States, in Canada for the treatment of seborrheic keratosis, or the Cipher License Agreement.
−Removed: We received an upfront payment of $1.0 million upon signing of the Cipher License Agreement and $0.5 million upon the achievement of a specified regulatory milestone.
−Removed: In September 2019, we and Cipher mutually terminated the Cipher License Agreement.
−Removed: Asset Purchase Agreement with Allergan
−Removed: In November 2018, we acquired RHOFADE (oxymetazoline hydrochloride) cream, 1%, or RHOFADE, which included an exclusive license to certain intellectual property for RHOFADE, as well as additional intellectual property, from Allergan Sales, LLC, or Allergan, pursuant to an asset purchase agreement.
−Removed: At the closing of the acquisition, we paid total cash consideration of $66.1 million, consisting of $59.6 million paid to Allergan and $6.5 million placed in escrow.
−Removed: In addition, we agreed to pay Allergan specified royalty payments, ranging from a mid-single digit percentage to a mid-teen percentage of net sales, subject to specified reductions, limitations and other adjustments.
−Removed: In addition, we agreed to assume the obligation to pay specified royalties and milestone payments under agreements with Aspect Pharmaceuticals, LLC and Vicept Therapeutics, Inc.
−Removed: We incurred an aggregate expense of approximately $0.7 million and $0.2 million related to royalty payments under these agreements during the years ended December 31, 2019 and 2018, respectively.
−Removed: Asset Purchase Agreement with EPI Health
−Removed: In October 2019, we entered into an asset purchase agreement with EPI Health, LLC, or EPI Health, pursuant to which we sold the worldwide rights to RHOFADE, which included the assignment of certain licenses for related intellectual property assets, or the Disposition.
−Removed: Pursuant to the asset purchase agreement, EPI Health paid us an upfront payment of $35.0 million, $1.75 million of which was placed in escrow, and $0.2 million for inventory.
−Removed: In addition, EPI Health has agreed to pay us (i) potential sales milestone payments of up to $20.0 million in the aggregate upon the achievement of specified levels of net sales of products covered by the agreement, (ii) a specified high single-digit royalty calculated as a percentage of net sales, on a product-by-product and country-by-country basis, until the date that the patent rights related to a particular product, such as RHOFADE, have expired, provided, that with respect to sales of RHOFADE in any territory outside of the United
−Removed: States, such royalty shall be paid on a country-by-country basis until the date that the RHOFADE patent rights in the particular country have expired or, if later, 10 years from the date of the first commercial sale of RHOFADE in such country and (iii) 25% of any upfront, license, milestone, maintenance or fixed payment received by EPI Health in connection with any license or sublicense of the assets transferred in the Disposition in any territory outside of the United States, subject to specified exceptions.
−Removed: In addition, EPI Health has agreed to assume our obligation to pay specified royalties and milestone payments under our existing agreements with Allergan, Aspect Pharmaceuticals, LLC and Vicept Therapeutics, Inc.
−Removed: Other Third-Party Agreements
−Removed: Under an assignment agreement, pursuant to which we acquired intellectual property, we have agreed to pay royalties on sales of ESKATA and related products at rates ranging in low single-digit percentages of net sales, as defined in the agreement.
−Removed: Under this assignment agreement, we paid $0.2 million in connection with a specified development milestone, and there are no remaining milestone payment obligations.
−Removed: In connection with the assignment agreement, we also entered into a finder’s services agreement under which we have made aggregate milestone payments of $3.0 million upon the achievement of specified pre-commercialization milestones, such as clinical trials and regulatory approvals, and commercial milestones as described in the agreement.
−Removed: We have also agreed to make an additional payment of $3.0 million upon the achievement of a specified commercial milestone.
−Removed: In addition, we have agreed to pay royalties on sales of ESKATA and related products at a low single-digit percentage of net sales, as defined in the agreement.
−Removed: In August 2019, we voluntarily discontinued the commercialization of ESKATA in the United States and withdrew the marketing authorizations we had previously received for the product in all countries outside of the United States.
−Removed: Components of Our Results of Operations
−Removed: Product Sales, net
−Removed: We sold RHOFADE in the United States during the years ended December 31, 2019 and 2018.
−Removed: We relied on Allergan to distribute RHOFADE on our behalf pursuant to the terms of a transition services agreement.
−Removed: We sold RHOFADE to wholesalers in the United States, which, in turn, distributed it to pharmacies that ultimately filled patient prescriptions.
−Removed: We also entered into, or were subject to, arrangements with third-party payors, including pharmacy benefit managers and government agencies, as well as group purchasing organizations, or GPOs, which provided for government mandated or privately negotiated rebates, chargebacks, and discounts with respect to the purchase of RHOFADE.
−Removed: We never sold RHOFADE outside of the United States.
−Removed: We sold the worldwide rights to RHOFADE to EPI Health in October 2019.
−Removed: During the years ended December 31, 2019 and 2018, we sold ESKATA to one wholesaler, McKesson Specialty Care Distribution, or McKesson, which in turn resold ESKATA to health care providers.
−Removed: We also entered into agreements with two GPOs that provided for administrative fees and discounted pricing in the form of volume-based rebates and chargebacks.
−Removed: We never sold ESKATA outside of the United States.
−Removed: We discontinued sales of ESKATA in the United States in August 2019.
−Removed: Product sales, net has been reclassified to discontinued operations for all periods presented.
−Removed: Contract Research
−Removed: We earn revenue from the provision of laboratory services to clients through Confluence, our wholly-owned subsidiary.
−Removed: Contract research revenue is generally evidenced by contracts with clients which are on an agreed upon fixed-price, fee-for-service basis and are generally billed on a monthly basis in arrears for services rendered.
−Removed: We have also received revenue from grants under the Small Business Innovation Research program of the National Institutes of Health, or NIH.
−Removed: During the year ended December 31, 2018, we had two active grants from NIH related to early-stage research.
−Removed: As of December 31, 2019, there were no remaining funds available to us under the grants.
−Removed: Cost of Revenue
−Removed: Cost of revenue consists of the costs incurred in connection with the provision of contract research services to our clients through Confluence.
−Removed: Cost of revenue primarily includes:
−Removed: employee-related expenses, which include salaries, benefits and stock-based compensation;
−Removed: outsourced professional scientific services;
−Removed: depreciation of laboratory equipment;
−Removed: facility-related costs;
−Removed: laboratory materials and supplies used to support the services provided.
−Removed: Research and Development Expenses
−Removed: Research and development expenses consist of expenses incurred in connection with the discovery and development of our drug candidates.
−Removed: These expenses primarily include:
−Removed: expenses incurred under agreements with contract research organizations, or CROs, as well as investigative sites and consultants that conduct our clinical trials and preclinical studies;
−Removed: manufacturing scale-up expenses and the cost of acquiring and manufacturing active pharmaceutical ingredients and preclinical and clinical trial materials;
−Removed: outsourced professional scientific development services;
−Removed: medical affairs expenses related to our drug candidates, including investigator-initiated studies;
−Removed: employee-related expenses, which include salaries, benefits and stock-based compensation;
−Removed: depreciation of manufacturing equipment;
−Removed: payments made under agreements with third parties under which we have acquired or licensed intellectual property;
−Removed: expenses relating to regulatory activities, including filing fees paid to regulatory agencies;
−Removed: laboratory materials and supplies used to support our research activities;
−Removed: non-cash charges for changes in the fair value of contingent consideration.
−Removed: Research and development activities are central to our business model.
−Removed: Drug candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials.
−Removed: We expect to continue to incur research and development expenses in the near term as we continue the clinical development of ATI-450 as a potential treatment for rheumatoid arthritis and other immuno-inflammatory diseases, continue the development of our preclinical compounds, and continue to identify, research and develop additional drug candidates.
−Removed: Our direct research and development expenses primarily consist of external costs including fees paid to CROs, consultants, investigator sites, regulatory agencies and third parties that manufacture our preclinical and clinical trial materials, and are tracked on a program-by-program basis.
−Removed: We do not allocate personnel costs, facilities or other indirect expenses, to specific research and development programs.
−Removed: The successful development of our drug candidates is highly uncertain.
−Removed: At this time, we cannot reasonably estimate or know the nature, timing and costs of the efforts that will be necessary to complete the remainder of the development of, or when, if ever, material net cash inflows may commence from any of our drug candidates.
−Removed: This uncertainty is due to the numerous risks and uncertainties associated with the duration and cost of clinical trials, which vary significantly over the life of a project as a result of many factors, including:
−Removed: the number of clinical sites included in the trials;
−Removed: the length of time required to enroll suitable subjects;
−Removed: the number of subjects that ultimately participate in the trials;
−Removed: the number of doses subjects receive;
−Removed: the duration of subject follow-up;
−Removed: the results of our clinical trials.
−Removed: Our expenditures are subject to additional uncertainties, including the preparation of regulatory filings for our drug candidates, and the expense of filing, prosecuting, defending and enforcing any patent claims or other intellectual property rights.
−Removed: We may obtain unexpected results from our clinical trials.
−Removed: We may elect to discontinue, delay or modify clinical trials of some drug candidates or focus on others.
−Removed: A change in the outcome of any of these variables with respect to the development of a drug candidate could mean a significant change in the costs and timing associated with the development of that drug candidate.
−Removed: For example, if the FDA or other regulatory authorities were to require us to conduct clinical trials beyond those that we currently anticipate, or if we experience significant delays in enrollment in any of our clinical trials, we could be required to expend significant additional financial resources and time on the completion of clinical development.
−Removed: Sales and Marketing Expenses
−Removed: Sales and marketing expenses primarily consist of market research activities related to A-101 45% Topical Solution and our JAK inhibitors.
−Removed: General and Administrative Expenses
−Removed: General and administrative expenses consist principally of salaries and related costs for personnel in executive, administrative, finance, investor relations and legal functions, including stock-based compensation, travel expenses and recruiting expenses.
−Removed: General and administrative expenses also include facility-related costs, patent filing and prosecution costs, professional fees for legal, auditing and tax services, insurance costs, as well as payments made under a terminated related party sublease agreement and milestone payments under our finder’s services agreement.
−Removed: We anticipate that we will incur increased director and officer insurance premiums and legal expenses associated with defending the current lawsuits described in this report.
−Removed: Other Income (Expense), net
−Removed: Other income (expense), net consists of interest earned on our cash, cash equivalents and marketable securities, interest expense, and gains and losses on transactions denominated in foreign currencies.
−Removed: Critical Accounting Policies and Significant Judgments and Estimates
−Removed: Our consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States.
−Removed: The preparation of our consolidated financial statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of expenses during the reported period.
−Removed: We base our estimates on historical experience, known trends and events and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.
−Removed: We evaluate our estimates and judgments on an ongoing basis.
−Removed: Our actual results may differ from these estimates under different assumptions and conditions.
−Removed: While our significant accounting policies are described in more detail in the notes to our consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K, we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our consolidated financial statements.
−Removed: Revenue Recognition
−Removed: We account for revenue in accordance with Accounting Standards Codification, or ASC, Topic 606, Revenue from Contracts with Customers.
−Removed: Under ASC Topic 606, revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services.
−Removed: To determine revenue recognition in accordance with ASC Topic 606, we perform the following five steps:
−Removed: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) performance obligations are satisfied.
−Removed: We recognize revenue when collection of the consideration we are entitled to under a contract with a customer is probable.
−Removed: At contract inception, we assess the goods or services promised within a contract with a customer to identify the performance obligations, and to determine if they are distinct.
−Removed: We recognize revenue that is allocated to each distinct performance obligation when (or as) that performance obligation is satisfied.
−Removed: We only recognize revenue when collection of the consideration we are entitled to under a contract with a customer is probable.
−Removed: Product Sales, net
−Removed: We recognized revenue from product sales at the point the customer obtained control, which generally occurred upon delivery.
−Removed: We also included estimates of variable consideration in the same period revenue was recognized.
−Removed: Components of variable consideration included trade discounts and allowances, product returns, government rebates, discounts and rebates, other incentives such as patient co-pay assistance, and other fee for service amounts.
−Removed: Variable consideration was recorded on the consolidated balance sheet as either a reduction of accounts receivable, if payable to a customer, or as a current liability, if payable to a third-party other than a customer.
−Removed: We considered all relevant information when estimating variable consideration such as contractual and statutory requirements, specific known market events and trends, industry data and forecasted customer buying and payment patterns.
−Removed: The amount of net revenue that can be recognized is constrained by estimates of variable consideration which are included in the transaction price.
−Removed: Payment terms with customers did not exceed one year and, therefore, we did not account for a financing component in our arrangements.
−Removed: We expensed incremental costs of obtaining a contract with a customer, including sales commissions, when incurred as the period of benefit was less than one year.
−Removed: Trade Discounts and Allowances - We provided customers with trade discounts, rebates, allowances and/or other incentives.
−Removed: We recorded estimates for these items as a reduction of revenue in the same period the revenue was recognized.
−Removed: Government and Payor Rebates –
−Removed: We contracted with, or were subject to arrangements with, certain third-party payors, including pharmacy benefit managers and government agencies, for the payment of rebates with respect to utilization of our commercial products.
−Removed: We also entered into agreements with GPOs that provided for administrative fees and discounted pricing in the form of volume-based rebates.
−Removed: We were also subject to discount and rebate obligations under state Medicaid programs and Medicare.
−Removed: We recorded estimates for these discounts and rebates as a reduction of revenue in the same period the revenue was recognized.
−Removed: Other Incentives –
−Removed: We maintained a co-pay assistance program which was intended to provide financial assistance to qualified commercially-insured patients with prescription drug co-payments required by third-party payors.
−Removed: We estimated and recorded accruals for these incentives as a reduction of revenue in the period the revenue was recognized.
−Removed: Our estimated amounts for co-pay assistance were based upon the number of claims and the cost per claim that we expected to receive associated with product that had been sold to customers but remained in the distribution channel at the end of each reporting period.
−Removed: Product Returns - Consistent with industry practice, we have a product returns policy for RHOFADE which may provide customers a right of return for product purchased within a specified period prior to and subsequent to the product’s expiration date.
−Removed: The right of return lapses upon shipment of the product to a patient.
−Removed: We recorded an estimate for the amount of product which may be returned as a reduction of revenue in the period the related revenue was recognized.
−Removed: Our estimates for product returns were based upon available industry data and our own sales information, including visibility into the inventory remaining in the distribution channel.
−Removed: There is no return liability associated with sales of ESKATA as we had a no returns policy for ESKATA when we commercialized it.
−Removed: Contract Research
−Removed: Revenue related to laboratory services is generally recognized as the laboratory services are performed, based upon the rates specified in the contracts.
−Removed: Under ASC Topic 606, we elected to apply the “right to invoice”
−Removed: practical expedient when recognizing contract research revenue.
−Removed: We recognize contract research revenue in the amount to which we have the right to invoice.
−Removed: We recognize revenue related to grants as amounts become reimbursable under each grant, which is generally when research is performed, and the related costs are incurred.
−Removed: Other Revenue
−Removed: Licenses of Intellectual Property –
−Removed: We recognize revenue received from non-refundable, upfront fees related to the licensing of intellectual property when the intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the license has been transferred to the customer, and the customer is able to use and benefit from the license.
−Removed: Milestone Payments –
−Removed: At the inception of each arrangement that includes milestone payments, we evaluate whether the milestones are considered probable of being reached and estimate the amount to be included in the transaction price using the most likely amount method.
−Removed: If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the amount allocated to the license of intellectual property.
−Removed: Milestone payments that are not within our control or the control of the customer, such as regulatory approvals, are not considered probable of being achieved until those approvals are received.
−Removed: Inventory included the third-party cost of manufacturing and assembly of the finished product forms of ESKATA and RHOFADE, quality control and other overhead costs.
−Removed: Inventory is stated at the lower of cost or net realizable value.
−Removed: Inventory is adjusted for short-dated, unmarketable inventory equal to the difference between the cost of inventory and the estimated value based upon assumptions about future demand and market conditions.
−Removed: Inventory was comprised primarily of finished goods and has been reclassified to discontinued operations for all periods presented.
−Removed: Intangible Assets
−Removed: Our intangible assets include both definite-lived and indefinite-lived assets.
−Removed: Definite-lived intangible assets are amortized over their estimated useful life based on the pattern over which the intangible assets are consumed or otherwise used up.
−Removed: If that pattern cannot be reliably determined, the straight-line method of amortization is used.
−Removed: Our definite-lived intangible assets consist of a research technology platform acquired through the acquisition of Confluence.
−Removed: Prior to the disposition in 2019, definite-lived intangible assets also included the intellectual property rights related to RHOFADE.
−Removed: Our indefinite-lived intangible assets consist of an in-process research and development, or IPR&D, drug candidate acquired through the acquisition of Confluence.
−Removed: IPR&D assets are considered indefinite-lived until the completion or abandonment of the associated research and development efforts.
−Removed: The cost of IPR&D assets is either amortized over their estimated useful life beginning when the underlying drug candidate is approved and launched commercially, or expensed immediately if development of the drug candidate is abandoned.
−Removed: Definite-lived intangible assets are tested for impairment when events or changes in circumstances indicate that the carrying value of the asset may not be recoverable.
−Removed: Indefinite-lived intangible assets are tested for impairment at least annually, which we perform during the fourth quarter, or when indicators of an impairment are present.
−Removed: We recognize an impairment loss when and to the extent that the estimated fair value of an indefinite-lived intangible asset is less than its carrying value.
−Removed: During the year ended December 31, 2019, we performed an impairment analysis of the RHOFADE intangible asset due to our decision to discontinue commercial operations and actively seek a commercialization partner for RHOFADE.
−Removed: Our impairment analysis, which primarily utilized a third-party indication of fair value, resulted in a fair value for the RHOFADE intangible asset which was less than its carrying value.
−Removed: As a result, we recorded an impairment charge of $27.6 million to adjust the carrying value of the RHOFADE intangible asset to its net realizable value.
−Removed: Goodwill is not amortized, but rather is subject to testing for impairment at least annually, which we perform either during the fourth quarter or when indicators of an impairment are present.
−Removed: We consider each of our operating segments, therapeutics and contract research, to be a reporting unit since this is the lowest level for which discrete financial information is available.
−Removed: We attributed the full amount of the goodwill in connection with the acquisition of Confluence, or $18.5 million, to our therapeutics segment.
−Removed: We perform an impairment test annually which is a qualitative assessment based upon current facts and circumstances related to operations of the therapeutics segment.
−Removed: If our qualitative assessment indicates an impairment may be present, we would perform the required quantitative analysis and an impairment charge would be recognized to the extent that the estimated fair value of the reporting unit is less than its carrying amount.
−Removed: However, any loss recognized would not exceed the total amount of goodwill allocated to that reporting unit.
−Removed: During the year ended December 31, 2019, we performed an impairment analysis due to the decline in our stock price, which was considered a triggering event to evaluate goodwill for impairment.
−Removed: Our impairment analysis, which utilized a market approach, noted that our stock price, including a reasonable control premium, resulted in a fair value for the therapeutics reporting unit which was less than its carrying value.
−Removed: As a result, we recorded an impairment charge of $18.5 million, the full balance of goodwill.
−Removed: Leases represent a company’s right to use an underlying asset and a corresponding obligation to make payments to a lessor for the right to use those assets.
−Removed: We evaluate leases at their inception to determine if they are an operating lease or a finance lease.
−Removed: A lease is accounted for as a finance lease if it meets one of the following five criteria:
−Removed: the lease has a purchase option that is reasonably certain of being exercised, the present value of the future cash flows are substantially all of the fair market value of the underlying asset, the lease term is for a significant portion of the remaining economic life of the underlying asset, the title to the underlying asset transfers at the end of the lease term, or if the underlying asset is of such a specialized nature that it is expected to have no alternative uses to the lessor at the end of the term.
−Removed: Leases that do not meet the finance lease criteria are accounted for as an operating lease.
−Removed: We recognize assets and liabilities for leases at their inception based upon the present value of all payments due under the lease.
−Removed: We use an implicit interest rate to determine the present value of finance leases, and our incremental borrowing rate to determine the present value of operating leases.
−Removed: We determine incremental borrowing rates by
−Removed: referencing collateralized borrowing rates for debt instruments with terms similar to the respective lease.
−Removed: We recognize expense for operating and finance leases on a straight-line basis over the term of each lease, and interest expense related to finance leases is recognized over the lease term based on the effective interest method.
−Removed: We include estimates for any residual value guarantee obligations under our leases in lease liabilities recorded on our consolidated balance sheet.
−Removed: Right-of-use assets are included in other assets and property and equipment, net on our consolidated balance sheet for operating and finance leases, respectively.
−Removed: Obligations for lease payments are included in current portion of lease liabilities and other liabilities on our consolidated balance sheet for both operating and finance leases.
−Removed: Contingent Consideration
−Removed: We initially recorded the contingent consideration related to future potential payments based upon the achievement of specified development, regulatory and commercial milestones, resulting from the acquisition of Confluence, at its estimated fair value on the date of acquisition.
−Removed: Changes in fair value reflect new information about the likelihood of the payment of the contingent consideration and the passage of time.
−Removed: For example, if the timing of the development of an acquired drug candidate, or the size of potential commercial opportunities related to an acquired drug, differ from our assumptions, then the fair value of contingent consideration would be adjusted accordingly.
−Removed: Future changes in the fair value of the contingent consideration, if any, will be recorded as income or expense in our consolidated statement of operations.
−Removed: During the year ended December 31, 2019, we updated our assumptions for contingent consideration related to the acquisition of Confluence as a result of the filing of an IND for ATI-450, which resulted in a charge of $0.7 million.
−Removed: Research and Development Expenses
−Removed: As part of the process of preparing our consolidated financial statements, we are required to estimate our research and development expenses.
−Removed: This process involves reviewing open contracts and purchase orders, communicating with our applicable personnel to identify services that have been performed on our behalf and estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of actual costs.
−Removed: The majority of our preclinical development activities and clinical trials are performed pursuant to quotes and contracts with multiple vendors, including research institutions and CROs, that conduct and manage such activities on our behalf.
−Removed: Many of the contracts with our vendors require advance payments;
−Removed: while others invoice us in arrears for services performed, or on a pre-determined schedule, or upon the successful enrollment of subjects, or when contractual milestones are met.
−Removed: We record expenses for preclinical development activities and clinical trials based upon estimates of the total cost of the services to be provided by the vendor and the time period over which the vendor is to perform those services.
−Removed: Estimates of research and development expenses included in our consolidated financial statements are based on facts and circumstances known to us at that time.
−Removed: The financial terms of our agreements are subject to negotiation, vary from contract to contract, and may result in uneven payment flows.
−Removed: There may be times when payments made to a vendor exceed the level of services provided, resulting in a prepayment for work to be performed.
−Removed: We may confirm the accuracy of our estimates with the service providers, or make adjustments to our estimates based upon new or updated facts and circumstances, as necessary.
−Removed: For example, if the timing and/or cost of services to be performed is materially different from our previous estimates, we would make a prospective adjustment for the change in our estimates in the period in which we become aware of the new cost and/or timing.
−Removed: Although we do not expect our estimates to be materially different from actual amounts incurred, our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in reporting amounts that are too high or too low in any particular period.
−Removed: To date, we have not made any material adjustments to our estimates of research and development expenses.
−Removed: Stock-Based Compensation
−Removed: We measure the compensation expense of stock-based awards granted to employees and directors using the grant date fair value of the award.
−Removed: We have issued stock options and restricted stock unit, or RSU, awards with service-based vesting conditions, as well as with performance-based vesting conditions.
−Removed: We have not issued awards that include market-based conditions.
−Removed: For service-based awards, we recognize stock-based compensation expense on a straight-line basis over the requisite service period.
−Removed: For performance-based awards, we recognize stock-based compensation expense on a straight-line basis over the requisite service period beginning in the period that it becomes probable the performance conditions will occur.
−Removed: At each balance sheet date, we evaluate whether any performance conditions related to a
−Removed: performance-based award have changed.
−Removed: The effect of any change in performance conditions would be recognized as a cumulative catch-up adjustment in the period such change occurs, and any remaining unrecognized compensation expense would be recognized on a straight-line basis over the remaining requisite service period.
−Removed: The impact of forfeitures is recognized in the period in which they occur.
−Removed: We initially measure the compensation expense of stock-based awards granted to consultants using the grant date fair value of the award.
−Removed: We recognize compensation expense over the period during which services are rendered by the consultant.
−Removed: At the end of each financial reporting period prior to the completion of services being rendered, we re-measure the compensation expense related to these awards using the then current fair value of our common stock for RSUs, or based upon updated assumptions in the Black-Scholes option-pricing model for stock option awards.
−Removed: We estimate the fair value of each stock option grant using the Black-Scholes option-pricing model.
−Removed: We estimate expected volatility based on historical volatility of a set of peer companies, which are publicly traded, and we expect to continue to do so until we have adequate historical data regarding the volatility of our own publicly-traded stock price.
−Removed: The expected term of our stock options has been determined using the “simplified”
−Removed: method for awards that qualify as “plain vanilla”
−Removed: The expected term of stock options we granted to non-employees is equal to the contractual term of the option award.
−Removed: The risk-free interest rate is determined by reference to the U.S.
−Removed: Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award.
−Removed: We use an expected dividend yield of zero because we have not paid cash dividends to date, and have no intention of paying cash dividends in the future.
−Removed: Prior to our IPO, we valued our common stock using a hybrid method which used market approaches to estimate our enterprise value.
−Removed: The hybrid method used was a probability-weighted expected return method which was a scenario-based methodology that estimated the fair value of our common stock based upon an analysis of future values for the company assuming various outcomes.
−Removed: The hybrid method used calculated equity values using an option pricing model in one or more of scenarios, and also considered the rights of each class of stock.
−Removed: The fair value of each RSU is measured using the closing price of our common stock on the date of grant.
−Removed: Since our inception, we have not recorded U.S.
−Removed: federal or state income tax benefits for the net operating losses we have incurred in each year or for our earned research and development tax credits, due to our uncertainty of realizing a benefit from those items.
−Removed: Results of Operations
−Removed: Comparison of Years Ended December 31, 2019 and 2018
−Removed: Year Ended December 31,
−Removed: (In thousands)
−Removed: Product sales, net
−Removed: Contract research
−Removed: Other revenue
−Removed: Total revenue, net
−Removed: Costs and expenses:
−Removed: Cost of revenue
−Removed: Research and development
−Removed: Sales and marketing
−Removed: General and administrative
−Removed: Goodwill impairment
−Removed: Amortization of definite-lived intangible
−Removed: Total costs and expenses
−Removed: Loss from operations
−Removed: Other income (expense), net
−Removed: Loss from continuing operations
−Removed: Loss from discontinued operations
−Removed: Contract research revenue was $4.2 million and $4.7 million for the years ended December 31, 2019 and 2018, respectively, and was comprised primarily of fees earned from the provision of laboratory services to clients through Confluence.
−Removed: Other revenue for the year ended December 31, 2018 related to the Cipher License Agreement and consisted of an upfront payment of $1.0 million, and $0.5 million earned upon the achievement of a specified regulatory milestone.
−Removed: Revenue from sales of ESKATA and RHOFADE has been reclassified to discontinued operations for all periods presented (see Note 18 to the consolidated financial statements included in this report for more information).
−Removed: Cost of Revenue
−Removed: Cost of revenue was $4.1 million and $4.3 million for the years ended December 31, 2019 and 2018, respectively, and related to providing laboratory services to our clients through Confluence.
−Removed: Cost of revenue for sales of ESKATA and RHOFADE has been reclassified to discontinued operations for all periods presented (see Note 18 to the consolidated financial statements included in this report for more information).
−Removed: Research and Development Expenses
−Removed: The following table summarizes our research and development expenses:
−Removed: (In thousands)
−Removed: A-101 45% Topical Solution
−Removed: JAK inhibitors
−Removed: Personnel expenses
−Removed: Restructuring expenses
−Removed: Milestones and licensing expenses
−Removed: Change in contingent consideration
−Removed: Other research expenses
−Removed: Stock-based compensation
−Removed: Total research and development expenses
−Removed: Expenses related to A-101 45% Topical Solution increased primarily due to our two pivotal Phase 3 clinical trials, which were initiated during the third quarter of 2018 and were completed in September 2019 and October 2019, respectively.
−Removed: Development expenses related to our JAK inhibitors decreased primarily as a result of several Phase 2 clinical trials of ATI-501 and ATI-502 which were completed during the year ended December 31, 2019.
−Removed: The increase in expenses for ATI-450 resulted primarily from preclinical development activities as well as a Phase 1 clinical trial, which was initiated and near completion during the year ended December 31, 2019.
−Removed: The increase in personnel expenses was primarily the result of increased headcount prior to our restructuring.
−Removed: The decrease in stock-based compensation expense was primarily the result of forfeitures by certain employees during 2019.
−Removed: Restructuring expenses primarily included the cost of termination benefits given to employees that were involuntarily terminated during the year ended December 31, 2019.
−Removed: Milestones and licensing expenses consisted of $4.0 million related to the achievement of a development milestone under the Rigel License Agreement, as well as $1.5 million we agreed to pay to Rigel in connection with the amendment of the agreement.
−Removed: The change in contingent consideration was the result of updates to our assumptions related to drug discovery research on our soft-JAK inhibitors, which progressed more quickly than we had originally planned.
−Removed: Other research expenses, which primarily included expenses for medical affairs activities and drug discovery, decreased primarily as a result of lower medical affairs activities during the year ended December 31, 2019.
−Removed: Expenses related to ESKATA primarily consisted of stability testing.
−Removed: Expenses related to ESKATA for post-NDA approval activities have been reclassified to discontinued operations for all periods presented (see Note 18 to the consolidated financial statements included in this report for more information).
−Removed: Sales and Marketing Expenses
−Removed: The following table summarizes our sales and marketing expenses:
−Removed: (In thousands)
−Removed: Direct marketing and professional fees
−Removed: Personnel expenses
−Removed: Other sales and marketing expenses
−Removed: Stock-based compensation
−Removed: Total sales and marketing expenses
−Removed: Sales and marketing expenses primarily consisted of market research activities related to A-101 45% Topical Solution and our JAK inhibitors.
−Removed: Direct marketing and professional fees, personnel expenses, other sales and marketing expenses and stock-based compensation related to ESKATA and RHOFADE have been reclassified to discontinued
−Removed: operations for all periods presented (see Note 18 to the consolidated financial statements included in this report for more information).
−Removed: General and Administrative Expenses
−Removed: The following table summarizes our general and administrative expenses:
−Removed: (In thousands)
−Removed: Personnel expenses
−Removed: Restructuring expenses
−Removed: Professional and legal fees
−Removed: Facility and support services
−Removed: Other general and administrative expenses
−Removed: Stock-based compensation
−Removed: Total general and administrative expenses
−Removed: Personnel and stock-based compensation expenses increased due to increased headcount prior to our restructuring.
−Removed: Restructuring expenses primarily include the costs of termination benefits given to employees that were involuntarily terminated during the year ended December 31, 2019.
−Removed: Professional and legal fees included accounting, legal, investor relations and corporate communication costs, as well as legal fees related to patents and business development.
−Removed: The decrease in professional and legal fees was primarily related to lower corporate communications costs as well as lower legal costs incurred related to patents.
−Removed: Facility and support services included general office expenses and information technology costs, which increased due to our new office and laboratory facility in St.
−Removed: Louis, which we moved into during 2019, as well as increased headcount prior to our restructuring.
−Removed: Other general and administrative expenses included insurance, travel costs, depreciation and other miscellaneous expenses.
−Removed: Goodwill Impairment
−Removed: During the year ended December 31, 2019, we performed an impairment analysis due to the decline in our stock price.
−Removed: Our impairment analysis noted that our stock price, including a reasonable control premium, resulted in a fair value for the therapeutics reporting unit which was less than its carrying value.
−Removed: As a result, we recorded an impairment charge of $18.5 million writing off the full balance of goodwill.
−Removed: Amortization of Definite-Lived Intangible
−Removed: Amortization expense related to the intangible asset for RHOFADE intellectual property has been reclassified to discontinued operations for all periods presented (see Note 18 to the consolidated financial statements included in this report for more information).
−Removed: Other Income (Expense), net
−Removed: The $5.2 million decrease in other income (expense), net was primarily due to interest expense incurred on our debt with Oxford, which we borrowed in October 2018.
−Removed: We repaid the debt in full in October 2019.
−Removed: Comparison of Years Ended December 31, 2018 and 2017
−Removed: Year Ended December 31,
−Removed: (In thousands)
−Removed: Product sales, net
−Removed: Contract research
−Removed: Other revenue
−Removed: Total revenue, net
−Removed: Costs and expenses:
−Removed: Cost of revenue
−Removed: Research and development
−Removed: Sales and marketing
−Removed: General and administrative
−Removed: Total costs and expenses
−Removed: Loss from operations
−Removed: Other income, net
−Removed: Loss from continuing operations
−Removed: Loss from discontinued operations
−Removed: Benefit from income taxes
−Removed: Contract research revenue was $4.7 million and $1.7 million for the years ended December 31, 2018 and 2017, respectively, and was comprised primarily of fees earned from the provision of laboratory services to clients through Confluence, which we acquired in August 2017.
−Removed: Other revenue for the year ended December 31, 2018 related to the Cipher License Agreement and consisted of an upfront payment of $1.0 million, and $0.5 million earned upon the achievement of a specified regulatory milestone.
−Removed: Revenue from sales of ESKATA and RHOFADE has been reclassified to discontinued operations for all periods presented (see Note 18 to the consolidated financial statements included in this report for more information).
−Removed: Cost of Revenue
−Removed: Cost of revenue was $4.3 million and $1.2 million for the years ended December 31, 2019 and 2018, respectively, and related to providing laboratory services to our clients through Confluence.
−Removed: Cost of revenue for sales of ESKATA and RHOFADE has been reclassified to discontinued operations for all periods presented (see Note 18 to the consolidated financial statements included in this report for more information).
−Removed: Research and Development Expenses
−Removed: The following table summarizes our research and development expenses:
−Removed: (In thousands)
−Removed: A-101 45% Topical Solution
−Removed: JAK inhibitors
−Removed: Personnel expenses
−Removed: Change in contingent consideration
−Removed: Other research expenses
−Removed: Stock-based compensation
−Removed: Total research and development expenses
−Removed: Expenses related to A-101 45% Topical Solution increased primarily due to the initiation of Phase 3 clinical trials for the treatment of common warts during the third quarter of 2018.
−Removed: Development expenses for our JAK inhibitors increased due to continued growth in both preclinical and clinical trial expenses as we continued to conduct multiple Phase 2 clinical trials of ATI-501 and ATI-502.
−Removed: Development expenses for ATI-450 increased as we performed IND-enabling preclinical studies and manufacturing scale-up activities in preparation for the initiation of clinical trials.
−Removed: The increase in personnel expenses was primarily the result of increased headcount.
−Removed: The increase in stock-based compensation expense was primarily the result of new awards granted during 2018.
−Removed: The change in contingent consideration was the result of updates to our assumptions related to our soft-JAK inhibitors that reflected the achievement of a specified development milestone in November 2018 under the Confluence Agreement.
−Removed: Other research expenses primarily included expenses for medical affairs activities, and expenses related to drug discovery performed by Confluence, which we acquired in August 2017;
−Removed: we did not incur similar drug discovery expenses prior to that acquisition.
−Removed: The increase in other research expenses was also driven by expenses related to our ITK inhibitor.
−Removed: Expenses related to ESKATA primarily consisted of stability testing and regulatory costs.
−Removed: The decrease in expenses related to ESKATA primarily related to the regulatory costs associated with the filing of the NDA, which occurred during the year ended December 31, 2017.
−Removed: Expenses related to ESKATA for post-NDA approval activities have been reclassified to discontinued operations for all periods presented (see Note 18 to the consolidated financial statements included in this report for more information).
−Removed: Sales and Marketing Expenses
−Removed: The following table summarizes our sales and marketing expenses:
−Removed: (In thousands)
−Removed: Direct marketing and professional fees
−Removed: Personnel expenses
−Removed: Other sales and marketing expenses
−Removed: Stock-based compensation
−Removed: Total sales and marketing expenses
−Removed: Sales and marketing expenses primarily consisted of market research activities related to A-101 45% Topical Solution and our JAK inhibitors.
−Removed: Direct marketing and professional fees, personnel expenses, other sales and marketing expenses and stock-based compensation related to ESKATA and RHOFADE have been reclassified to discontinued operations for all periods presented (see Note 18 to the consolidated financial statements included in this report for more information).
−Removed: General and Administrative Expenses
−Removed: The following table summarizes our general and administrative expenses:
−Removed: (In thousands)
−Removed: Personnel expenses
−Removed: Professional and legal fees
−Removed: Facility and support services
−Removed: Milestone payment
−Removed: Other general and administrative expenses
−Removed: Stock-based compensation
−Removed: Total general and administrative expenses
−Removed: Personnel and stock-based compensation expenses increased due to increased headcount as we expanded our operations.
−Removed: Professional and legal fees included accounting, legal and investor relations costs associated with being a public company, as well as legal fees related to patents.
−Removed: The increase in professional and legal fees was related to legal and consulting expenses associated with business development activities.
−Removed: Facility and support services included general office expenses and information technology costs which were higher due to our increased headcount as well as the relocation of our headquarters during the year ended December 31, 2018.
−Removed: The milestone payment of $1.0 million in the year ended December 31, 2017 was made upon the achievement of specified regulatory milestones pursuant to our Finder’s Services Agreement with KPT Consulting, LLC.
−Removed: Other general and administrative expenses included insurance, travel costs, depreciation and other miscellaneous expenses.
−Removed: Other Income, net
−Removed: The $0.6 million increase in other income, net was primarily due to higher invested balances of marketable securities as a result of funds received from our financing transactions in 2017 and 2018, as well as higher yields on those invested balances.
−Removed: Benefit from Income Taxes
−Removed: Benefit from income taxes was $1.8 million for the year ended December 31, 2017 and was comprised primarily of the revaluation of our deferred tax assets, net resulting from the Tax Cuts and Jobs Act of 2017, which was enacted on December 22, 2017.
−Removed: Liquidity and Capital Resources
−Removed: Since our inception, we have incurred net losses and negative cash flows from our operations.
−Removed: Prior to our acquisition of Confluence in August 2017, we did not generate any revenue.
−Removed: We have financed our operations over the last several years primarily through sales of our equity securities in public offerings and a private placement transaction , as well as debt financing that has since been repaid in full .
−Removed: We may engage in additional debt and equity financing transactions in order to raise additional funds.
−Removed: In addition, to the extent we are able to consummate transactions with third-party partners to further develop, obtain marketing approval for and/or commercialize our drug candidates or ESKATA, we may receive upfront payments, milestone payments or royalties from such arrangements that would increase our liquidity.
−Removed: As of December 31, 2019, we had cash, cash equivalents and marketable securities of $75.0 million.
−Removed: Cash in excess of immediate requirements is invested in accordance with our investment policy, primarily with a view towards liquidity and capital preservation.
−Removed: We currently have no ongoing material financing commitments, such as lines of credit or guarantees, that are expected to affect our liquidity over the next five years, other than sublease obligations, capital lease obligations and contingent obligations under acquisition and intellectual property licensing agreements, which are summarized below under “Contractual Obligations and Commitments .”
−Removed: At-The-Market Facility
−Removed: In November 2016, we entered into a sales agreement with Cowen and Company, LLC, or Cowen, pursuant to which Cowen acted as our agent in connection with sales of our common stock from time to time under an “at-the-market”
−Removed: equity facility.
−Removed: In April 2017, we sold 635,000 shares of common stock at a weighted average price per share of $31.50, for aggregate gross proceeds of $19.3 million.
−Removed: We paid underwriting discounts and commissions of $0.6 million, and also incurred expenses of $0.1 million in connection with this sale.
−Removed: In October 2018, we terminated the at-the-market sales agreement with Cowen without having sold any additional shares of common stock.
−Removed: August 2017 Public Offering
−Removed: In August 2017, we closed our follow-on public offering in which we sold 3,747,602 shares of common stock at a price to the public of $23.02 per share, for aggregate gross proceeds of $86.3 million.
−Removed: We paid underwriting discounts and commissions of $5.2 million, and we also incurred expenses of $0.2 million in connection with the offering.
−Removed: As a result, the net offering proceeds received by us, after deducting underwriting discounts, commissions and offering expenses, were $80.9 million.
−Removed: October 2018 Public Offering
−Removed: In October 2018, we closed a public offering in which we sold 9,941,750 shares of common stock at a price to the public of $10.75 per share, for aggregate gross proceeds of $106.9 million.
−Removed: We paid underwriting discounts and commissions of $6.4 million to the underwriters, and we incurred expenses of $0.3 million in connection with the offering.
−Removed: As a result, the net offering proceeds received by us, after deducting underwriting discounts, commissions and offering expenses, were $100.2 million.
−Removed: Loan and Security Agreement with Oxford
−Removed: In October 2018, we entered into a loan and security agreement, or the Loan Agreement, with Oxford Finance LLC, or Oxford.
−Removed: The Loan Agreement provided for up to $65.0 million in term loans.
−Removed: Of the $65.0 million, we borrowed $30.0 million in October 2018.
−Removed: The Loan Agreement provided for interest only payments through the payment date immediately prior to November 1, 2021, followed by 24 consecutive equal monthly payments of principal and interest in arrears starting on November 1, 2021 and continuing through the maturity date of October 1, 2023.
−Removed: The Loan Agreement provided for an annual interest rate equal to the greater of (i) 8.35% and (ii) the 30-day U.S.
−Removed: LIBOR rate reported in The Wall Street Journal on the last business day of the month that immediately preceded the month in which the interest was to accrue plus 6.25%.
−Removed: The Loan Agreement also provided for a final payment equal to 5.75% of the original principal amount of the term loans drawn.
−Removed: We had the option to prepay the outstanding balance of the term loans in full, subject to a prepayment fee of (i) 3% of the original principal amount of the aggregate term loans drawn for any prepayment prior to the first anniversary of the applicable funding date, (ii) 2% of the original principal amount of the aggregate term loans drawn for any prepayment between the first and second anniversaries of the applicable funding date or (iii) 1% of the original principal amount of the aggregate term loans drawn for any prepayment after the second anniversary of the applicable funding date but before October 1, 2023.
−Removed: In October 2019, we repaid in full the $30.0 million that was outstanding under the Loan Agreement and paid a prepayment fee of $0.6 million and a final payment fee of $1.7 million.
−Removed: The following table summarizes our cash flows for each of the periods presented:
−Removed: Year Ended December 31,
−Removed: (In thousands)
−Removed: Net cash used in operating activities
−Removed: Net cash provided by (used in) investing activities
−Removed: Net cash provided by (used in) financing activities
−Removed: Net increase (decrease) in cash and cash equivalents
−Removed: Operating Activities
−Removed: During the year ended December 31, 2019, operating activities used $96.4 million of cash primarily resulting from our net loss of $161.4 million, partially offset by non-cash adjustments of $67.6 million.
−Removed: Net cash used by changes in our operating assets and liabilities during the year ended December 31, 2019 consisted of a $5.1 million decrease in accounts payable and accrued expenses and a $0.8 million increase in accounts receivable, which were partially offset by a $3.7 million decrease in prepaid expenses and other assets.
−Removed: The decrease in accounts payable and accrued expenses was primarily driven by lower levels of expenses, including sales discounts and allowances, as the result of the disposition of RHOFADE, and lower research and development expenses as a result of the completion of our two pivotal Phase 3 clinical trials for A-101 45% Topical Solution, as well as the timing of vendor invoicing and payments.
−Removed: The decrease in prepaid expenses and other assets was due to research and development activities primarily related to preclinical development activities for ATI-450 and ATI-502, which concluded during the year ended December 31, 2019, and the elimination of sales and marketing activities as a result of the disposition of RHOFADE in October 2019.
−Removed: The increase in accounts receivable was primarily the result of the timing of cash receipts from our contract research customers.
−Removed: Non-cash expenses of $67.6 million were composed of an intangible asset impairment charge of $27.6 million, a goodwill impairment charge of $18.5 million, stock-based compensation expense of $16.2 million, a charge of $0.7 million related to the change in the fair value of contingent consideration and depreciation and amortization expense of $6.4 million, partially offset by a gain of $1.9 million recognized on the disposition of RHOFADE.
−Removed: During the year ended December 31, 2018, operating activities used $100.8 million of cash primarily resulting from our net loss of $132.7 million, partially offset by changes in our operating assets and liabilities of $9.4 million, and non-cash adjustments of $23.2 million.
−Removed: Net cash provided by changes in our operating assets and liabilities during the year ended December 31, 2018 consisted of a $13.8 million increase in accounts payable and accrued expenses, which was partially offset by a $4.4 million increase in accounts receivable.
−Removed: The increase in accounts payable and accrued expenses was primarily driven by expenses incurred, but not yet paid, as of December 31, 2018, as well as the timing of vendor invoicing and payments.
−Removed: Expenses incurred, but not yet paid, as of December 31, 2018 primarily included sales and marketing expenses related to the commercial launch of ESKATA in the United States in May 2018, amounts payable for copay assistance and commercial rebates related to sales of RHOFADE which we began selling in December 2018, as well as expenses related to our Phase 3 clinical trials for A-101 45% Topical Solution and our Phase 2 clinical trials for ATI-501 and ATI-502.
−Removed: The increase in accounts receivable was the result of the commercial launch of ESKATA in May 2018 and sales of RHOFADE which we acquired in November 2018.
−Removed: Non-cash expenses of $23.2 million were primarily composed of stock-based compensation expense.
−Removed: During the year ended December 31, 2017, operating activities used $54.7 million of cash primarily resulting from our net loss of $68.5 million, partially offset by changes in our operating assets and liabilities of $0.9 million and non-cash adjustments of $13.0 million.
−Removed: Net cash used by changes in our operating assets and liabilities during the year ended December 31, 2017 consisted of a $4.3 million increase in prepaid expenses and other assets offset by a $5.2 million increase in accounts payable and accrued expenses.
−Removed: The increase in prepaid expenses and other assets was primarily due to a $2.0 million PDUFA fee paid to the FDA in conjunction with the filing of the NDA for ESKATA, as well as deposits made for clinical supplies and development activities that were incurred during 2018.
−Removed: The increase in accounts payable and accrued expenses was primarily due to an increase of $1.2 million in accrued bonuses payable due to increased headcount, $0.6 million payable to NST Consulting LLC in connection with the early termination of our sublease with them, as well as expenses incurred, but not yet paid, in connection with our Phase 2 clinical trials for A-101 45% Topical Solution, ATI-501 and ATI-502.
−Removed: Non-cash expenses of $13.0 million included stock-based compensation expense of
−Removed: $14.4 million, and $0.4 million of depreciation and amortization, partially offset by an adjustment to our deferred tax liability, net of $1.8 million which was the result of the Tax Cuts and Jobs Act of 2017 enacted on December 22, 2017.
−Removed: Investing Activities
−Removed: During the year ended December 31, 2019, investing activities provided $105.7 million of cash, consisting of proceeds from sales and maturities of marketable securities of $210.5 million and $34.2 million from the disposition of RHOFADE, partially offset by purchases of marketable securities of $137.4 million and purchases of equipment of $1.6 million.
−Removed: During the year ended December 31, 2018, investing activities provided $9.4 million of cash, consisting of proceeds from sales and maturities of marketable securities of $239.4 million, partially offset by purchases of marketable securities of $161.6 million, $67.1 million for the acquisition of RHOFADE, and purchases of equipment of $1.4 million.
−Removed: During the year ended December 31, 2017, investing activities used $55.7 million of cash, consisting of purchases of marketable securities of $197.3 million, $9.6 million for the acquisition of Confluence and purchases of property and equipment of $1.2 million, partially offset by proceeds from sales and maturities of marketable securities of $152.5 million.
−Removed: Financing Activities
−Removed: During the year ended December 31, 2019, financing activities used $30.3 million of cash consisting of $30.0 million for the repayment of our term loan with Oxford and $0.5 million related to finance lease payments, partially offset by $0.2 million of cash received from the exercise of employee stock options.
−Removed: During the year ended December 31, 2018, financing activities provided $128.3 million of cash and included net proceeds of $100.2 million received from our public offering of common stock in October 2018, $29.9 million of net borrowings pursuant to the Loan Agreement with Oxford, and $0.6 million of cash received from the exercise of employee stock options, partially offset by $1.8 million paid to the former Confluence equity holders as a result of the achievement of a development milestone and $0.6 million of finance lease payments.
−Removed: During the year ended December 31, 2017, financing activities provided $100.4 million of cash and included $19.3 million of net proceeds received from the sale of common stock under our sales agreement with Cowen in April 2017, $80.9 million of net proceeds received from our public offering of common stock in August 2017, and $0.2 million of cash received from the exercise of employee stock options, partially offset by $0.1 million of finance lease payments for laboratory equipment.
−Removed: Funding Requirements
−Removed: We anticipate we will incur net losses in the near term as we continue the clinical development of ATI-450 as a potential treatment for rheumatoid arthritis and other immuno-inflammatory diseases, continue the development of our preclinical compounds, and continue to identify, research and develop additional drug candidates.
−Removed: We may not be able to generate revenue from these programs if, among other things, our clinical trials are not successful, the FDA does not approve our drug candidates currently in clinical trials when we expect, or at all, or we are not able to identify and consummate transactions with third-party partners to further develop, obtain marketing approval for and/or commercialize our drug candidates.
−Removed: Our primary uses of capital are, and we expect will continue in the near term to be, compensation and related expenses, clinical costs, external research and development services, laboratory and related supplies, legal and other regulatory expenses, and administrative and overhead costs.
−Removed: Our future funding requirements will be heavily determined by the resources needed to support the development of our drug candidates.
−Removed: As a publicly traded company, we have incurred and will continue to incur significant legal, accounting and other expenses that we were not required to incur as a private company.
−Removed: In addition, the Sarbanes-Oxley Act of 2002, as well as rules adopted by the SEC and the Nasdaq Stock Market LLC, requires public companies to implement specified corporate governance practices that were not applicable to us prior to our IPO.
−Removed: We expect ongoing compliance with these rules and regulations will increase our legal and financial compliance costs and will make some activities more time-
−Removed: consuming and costly, in particular after we cease to be an “emerging growth company”
−Removed: under the Jumpstart Our Business Startups Act of 2012, or JOBS Act, which we expect to occur on December 31, 2020.
−Removed: We believe our existing cash, cash equivalents and marketable securities are sufficient to fund our operating and capital expenditure requirements for a period greater than 12 months from the date of issuance of our consolidated financial statements that appear in Item 8 of this Annual Report on Form 10-K based on our current operating assumptions.
−Removed: We expect that we will require additional capital to complete the clinical development of ATI-450, to develop our preclinical compounds, and to support our discovery efforts.
−Removed: Additional funds may not be available on a timely basis, on commercially acceptable terms, or at all, and such funds, if raised, may not be sufficient to enable us to continue to implement our long-term business strategy.
−Removed: If we are unable to raise sufficient additional capital or generate revenue from transactions with third-party partners for the development and/or commercialization of our drug candidates, we may need to substantially curtail our planned operations.
−Removed: We may raise additional capital through the sale of equity or debt securities.
−Removed: In such an event, your ownership will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of a holder of our common stock.
−Removed: Because of the numerous risks and uncertainties associated with research and development of pharmaceutical drugs, we are unable to estimate the exact amount of our working capital requirements.
−Removed: Our funding requirements in the near term will depend on many factors, including:
−Removed: the number and development requirements of the drug candidates that we may pursue;
−Removed: the scope, progress, results and costs of preclinical development, laboratory testing and conducting preclinical and clinical trials for our drug candidates;
−Removed: the costs, timing and outcome of regulatory review of our drug candidates;
−Removed: the extent to which we in-license or acquire additional drug candidates and technologies;
−Removed: the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims;
−Removed: our ability to identify and consummate transactions with third-party partners to further develop, obtain marketing approval for and/or commercialize our drug candidates, and earn revenue from such arrangements;
−Removed: the revenue earned from our commercial products as a result of licenses to, or partnerships with, third parties.
−Removed: See “Risk Factors”
−Removed: for additional risks associated with our substantial capital requirements.
−Removed: Contractual Obligations and Commitments
−Removed: We occupy space for our headquarters in Wayne, Pennsylvania under a sublease agreement which has a term through October 2023.
−Removed: We occupy office and laboratory space in St.
−Removed: Louis, Missouri under a sublease agreement which has a term through June 2029.
−Removed: We lease laboratory equipment used in our laboratory space in St.
−Removed: Louis, Missouri under two capital lease financing arrangements which have terms through October 2020 and December 2020.
−Removed: Under the assignment agreement with the Estate of Mickey Miller pursuant to which we acquired intellectual property, we have agreed to pay royalties on sales of ESKATA and related products at rates ranging in low single-digit percentages of net sales, as defined in the agreement.
−Removed: Under the related finder’s services agreement with KPT Consulting, LLC, we have agreed to make a remaining payment of $3.0 million upon the achievement of a specified commercial milestone.
−Removed: In addition, we have agreed to pay royalties on sales of ESKATA and related products at a low single-digit percentage of net sales, as defined in the agreement.
−Removed: In August 2019, we voluntarily discontinued the commercialization of ESKATA in the United States and withdrew the marketing authorizations we had previously received for the product in all countries outside of the United States.
−Removed: Under the Rigel License Agreement, we have agreed to make remaining aggregate payments of up to $76.0 million upon the achievement of specified development milestones, such as clinical trials and regulatory approvals.
−Removed: Further, we have agreed to pay up to an additional $10.5 million to Rigel upon the achievement of a second set of development milestones.
−Removed: In addition, in connection with the amendment of the agreement in October 2019, we agreed to pay Rigel an amendment fee of $1.5 million in three installments of $500,000 in January 2020, April 2020 and July 2020.
−Removed: With respect to any products we commercialize under the Rigel License Agreement, we will pay Rigel quarterly tiered royalties on our annual net sales of each product developed using the licensed JAK inhibitors at a high single digit percentage of annual net sales, subject to specified reductions.
−Removed: Under the Vixen Agreement , w e are obligated to make aggregate payments of up to $18.0 million upon the achievement of specified pre-commercialization milestones for three products covered by the Vixen patent rights in the United States, the European Union and Japan, and aggregate payments of up to $22.5 million upon the achievement of specified commercial milestones for products covered by the Vixen patent rights.
−Removed: We are also obligated to make an annual payment of $0.1 million through March 2022, which amounts are creditable against any specified future payments that may be paid under the Vixen Agreement.
−Removed: With respect to any covered products that we commercialize under the Vixen Agreement , we are obligated to pay low single-digit percentage of annual net sales, subject to specified reductions, limitations and other adjustments, until the date that all of the patent rights for that product have expired, as determined on a country-by-country and product-by-product basis or, in specified circumstances, ten years from the first commercial sale of such product.
−Removed: If we sublicense any of the patent rights and know-how acquired pursuant to the Vixen Agreement , we will be obligated to pay a portion of any consideration we receive from such sublicenses in specified circumstances.
−Removed: Under the Columbia License Agreement, we are obligated to pay an annual license fee of $10,000, subject to specified adjustments for patent expenses incurred by Columbia and creditable against any royalties that may be paid under the license agreement.
−Removed: We are also obligated to pay up to an aggregate of $11.6 million upon the achievement of specified commercial milestones, including specified levels of net sales of products covered by Columbia patent rights and/or know-how, and royalties at a sub-single-digit percentage of annual net sales of products covered by Columbia patent rights and/or know-how, subject to specified adjustments.
−Removed: If we sublicense any of Columbia’s patent rights and know-how acquired pursuant to the Columbia License Agreement, we will be obligated to pay Columbia a portion of any consideration Vixen receives from such sublicenses in specified circumstances.
−Removed: Under the Confluence Agreement, w e are obligated to make remaining aggregate payments of up to $75.0 million upon the achievement of specified regulatory and commercialization milestones.
−Removed: With respect to any covered products we commercialize, we are obligated to pay a low single-digit percentage of annual net sales, subject to specified reductions, limitations and other adjustments, until the date that all of the patent rights for that product have expired, as determined on a country-by-country and product-by-product basis or, in specified circumstances, ten years from the first commercial sale of such product.
−Removed: If we sublicense any of the patent rights and know-how acquired pursuant to the Confluence Agreement, we will be obligated to pay a portion of any consideration we receive from such sublicenses in specified circumstances.
−Removed: We enter into contracts in the normal course of business with CROs for clinical trials, preclinical research studies and testing, manufacturing and other services and products for operating purposes.
−Removed: These contracts generally provide for termination upon notice, and therefore we believe that our non-cancelable obligations under these agreements are not material.
−Removed: Off-Balance Sheet Arrangements
−Removed: We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.
−Removed: Recently Issued Accounting Pronouncements
−Removed: In November 2018, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, 2018-18, Collaborative Arrangements (Topic 808):
−Removed: Clarifying the Interaction Between Topic 808 and Topic 606, which, among other things, provides guidance on how to assess whether certain collaborative arrangement transactions should be accounted for under Topic 606.
−Removed: The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019.
−Removed: We adopted this standard as of January 1, 2020, the impact of which on our consolidated financial statements was not significant.
−Removed: In August 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40).
−Removed: ASU 2018-15 requires a customer in a cloud computing arrangement that is a service contract to follow the internal-use software guidance in Accounting Standards Codification, or ASC, 350-40 to determine which implementation costs to capitalize as assets or expense as incurred.
−Removed: The standard will be effective for fiscal years beginning after December 15, 2019, including interim periods within such fiscal years.
−Removed: We adopted this standard as of January 1, 2020, the impact of which on our consolidated financial statements was not significant.
−Removed: In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820).
−Removed: The FASB developed the amendments to ASC 820 as part of its broader disclosure framework project, which aims to improve the effectiveness of disclosures in the notes to financial statements by focusing on requirements that clearly communicate the most important information to users of the financial statements.
−Removed: This update eliminates certain disclosure requirements for fair value measurements for all entities, requires public entities to disclose certain new information and modifies some of the existing disclosure requirements.
−Removed: The standard will be effective for fiscal years beginning after December 15, 2019, including interim periods within such fiscal years.
−Removed: We adopted this standard as of January 1, 2020, the impact of which on our consolidated financial statements was not significant.
−Removed: In June 2018, the FASB, issued ASU 2018-07, Compensation—Stock Compensation (Topic 718).
−Removed: The amendments in this ASU expand the scope of Topic 718 to include stock-based compensation arrangements with non-employees except for specific guidance on option pricing model inputs and cost attribution.
−Removed: ASU 2018-07 is effective for annual reporting periods beginning after December 31, 2018, including interim periods within that year.
−Removed: We adopted this standard as of January 1, 2019, the impact of which on our consolidated financial statements was not significant.
−Removed: In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842).
−Removed: In July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases, and ASU 2018-11, Targeted Improvements, both of which included a number of technical corrections and improvements, including additional options for transition.
−Removed: The new standard establishes a right-of-use model that requires a lessee to record a right-of-use asset and a lease liability on the balance sheet for all leases with terms longer than 12 months.
−Removed: Leases are classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement.
−Removed: ASU 2016-02 is effective for annual periods beginning after December 15, 2018, including interim periods within those annual periods.
−Removed: The amendments in ASU 2016-02 must be applied to all leases existing at the date a company initially applies the standard.
−Removed: We adopted the new standard as of January 1, 2019, using the effective date as the date of initial application, and we used the modified retrospective approach.
−Removed: In addition, we elected the practical expedients permitted under the transition guidance within the new standard, which, among other things, allowed us to carry forward the historical lease identification and classification.
−Removed: We also elected the practical expedient to not separate lease and non-lease components, as well as the short-term lease exemption which allowed us to not capitalize leases with terms less than 12 months that do not contain a reasonably certain purchase option.
−Removed: Our consolidated financial statements have not been updated, and disclosures required by the new standard have not been provided, for periods before January 1, 2019.
−Removed: The adoption of ASU 2016-02 resulted in us recording additional assets and liabilities of $2.1 million and $2.3 million, respectively, upon adoption on January 1, 2019.
−Removed: The adoption of ASU 2016-02 did not have a material impact on our consolidated statement of operations or cash flows.
−Removed: Emerging Growth Company Status
−Removed: The Jumpstart Our Business Startups Act of 2012, or the JOBS Act, permits an “emerging growth company”
−Removed: such as us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies until those standards would otherwise apply to private companies.
−Removed: We have irrevocably elected to “opt out”
−Removed: of this provision and, as a result, we will comply with new or revised accounting standards when they are required to be adopted by public companies that are not emerging growth companies.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.