Document and Entity Information (USD $)	12 Months Ended
Document and Entity Information (USD $)	Dec. 31, 2014	Feb. 06, 2015	Jun. 30, 2014
Document and Entity Information
Entity Registrant Name	Xencor Inc
Entity Central Index Key	0001326732
Document Type	10-K
Document Period End Date	Dec. 31, 2014
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Public Float			$ 151,512,499
Entity Common Stock, Shares Outstanding		31,472,763
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	FY

Condensed Balance Sheets (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Current assets
Cash	$ 54,649	$ 77,975
Accounts receivable	2,966	59
Prepaid expenses and other current assets	134	60
Total current assets	57,749	78,094
Property and equipment
Computers, software and equipment	4,270	3,514
Furniture and fixtures	97	89
Leasehold improvements	3,086	3,081
Less accumulated depreciation and amortization	(6,554)	(6,377)
Property and equipment, net	899	307
Other assets
Patents, licenses, and other intangible assets, net	9,116	8,814
Other assets	59	100
Total other assets	9,175	8,914
Total assets	67,823	87,315
Current liabilities
Accounts payable	1,691	2,633
Accrued expenses	2,251	1,393
Current portion of deferred revenue	2,254	3,444
Current portion of capital lease obligations		9
Total current liabilities	6,196	7,479
Deferred revenue, less current portion	2,337	6,302
Capital lease obligations, less current portion		1
Total liabilities	8,533	13,782
Commitments and contingencies
Stockholders' equity
Common stock, $0.01 par value: 200,000,000 authorized shares; 31,434,272 issued and outstanding shares at December 31, 2014 and 31,354,467 issued and outstanding at December 31, 2013	314	314
Additional paid-in capital	302,969	300,790
Accumulated deficit	(243,993)	(227,571)
Total stockholders' equity	59,290	73,533
Total liabilities and stockholders' equity	$ 67,823	$ 87,315

Condensed Balance Sheets (Parenthetical) (USD $)	Dec. 31, 2014	Dec. 31, 2013
Condensed Balance Sheets
Common Stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common Stock, shares authorized	200,000,000	200,000,000
Common Stock, shares issued	31,434,272	31,354,467
Common Stock, shares outstanding	31,434,272	31,354,467

Condensed Statements of Operations (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Revenue
Collaborations, licenses and milestones, (including related party revenue of zero for 2014 and 2013 and $0.75 million for 2012, respectively)	$ 9,520	$ 10,172	$ 9,524
Operating expenses
Research and development (including equity-based compensation of $1,013, $158 and $11 for 2014, 2013 and 2012, respectively)	18,516	17,000	12,668
General and administrative (including equity-based compensation of $848, $40 and $18 for 2014, 2013 and 2012, respectively)	7,461	3,692	3,086
Total operating expenses	25,977	20,692	15,754
Loss from operations	(16,457)	(10,520)	(6,230)
Other income (expenses)
Interest income	33	14	11
Interest expense	(9)	(1,213)	(2,461)
Other (expense) income	11	16	86
Loss on settlement of notes		(48,556)
Total other income (expense), net	35	(49,739)	(2,364)
Net loss	(16,422)	(60,259)	(8,594)
Deemed contribution (distribution) on exchange of preferred stock		144,765
Net income (loss) attributable to common stockholders	$ (16,422)	$ 84,506	$ (8,594)
Net income (loss) per share attributable to common shareholders:
Basic (in dollars per share)	$ (0.52)	$ 34.18	$ (118.86)
Diluted (in dollars per share)	$ (0.52)	$ (3.85)	$ (118.86)
Weighted average shares used to compute net loss per share attributable to common stockholders:
Basic (in shares)	31,390,631	2,472,581	72,302
Diluted (in shares)	31,390,631	15,645,789	72,302

Condensed Statements of Operations (Parenthetical) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Related party revenue	$ 0	$ 0	$ 750,000
Equity-based compensation	1,861,000	198,000	29,000
Research and development
Equity-based compensation	1,013,000	158,000	11,000
General and administrative
Equity-based compensation	$ 848,000	$ 40,000	$ 18,000

- Definition

Amount of revenue, fees and commissions earned from transactions between (a) a parent company and its subsidiaries; (b) subsidiaries of a common parent; (c) an entity and trusts for the benefit of employees, for example, but not limited to, pension and profit-sharing trusts that are managed by or under the trusteeship of the entity's management; (d) an entity and its principal, owners, management, or members of their immediate families; and (e) affiliates.

+ References+ Details

Statements of Mezzanine Equity and Stockholders’ Equity (USD $) In Thousands, except Share data, unless otherwise specified	Series A Convertible Preferred Stock	Series B Convertible Preferred Stock	Series C Convertible Preferred Stock	Series D Convertible Preferred Stock	Series E Convertible Preferred Stock	Series A-1 Convertible Preferred Stock	Series A-2 Convertible Preferred Stock	Total
Balance at Dec. 31, 2012	$ 3,550	$ 12,375	$ 50,000	$ 20,000	$ 60,841
Balance (in shares) at Dec. 31, 2012	857,792	1,328,941	2,416,281	7,936,483	25,245,566
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss								(60,259)
Stock-based compensation expense								198
Series A-1 shares issued in exchange of convertible notes						70,689
Series A-1 shares issued in exchange of convertible notes (in shares)						45,902,321
Sale of Series A-1 preferred stock						13,355
Sale of Series A-1 preferred stock (in shares)						7,352,940
Exchange of Series A-1 and A-2 preferred for common stock						(78,526)	(1,075)
Exchange of Series A-1 and A-2 preferred for common stock (in shares)						(49,671,392)	(1,851,814)
Exchange of Series A-E Preferred for Series A-1 preferred stock	(3,550)	(12,375)	(50,000)	(20,000)	(60,841)	3,045
Exchange of Series A-E Preferred for Series A-1 preferred stock (in shares)	(857,792)	(1,328,941)	(2,416,281)	(7,936,483)	(25,245,566)	1,977,137
Exchange of Series A-1 preferred for Series A-2 preferred stock						$ (8,563)	$ 1,075
Exchange of Series A-1 preferred for Series A-2 preferred stock (in shares)						(5,561,006)	1,851,814
Balance at Dec. 31, 2013

Statements of Mezzanine Equity and Stockholders’ Equity (Deficit) (USD $) In Thousands, except Share data, unless otherwise specified	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Total
Balance at Dec. 31, 2011	$ 1	$ 1,014	$ (158,718)	$ (157,703)
Balance (in shares) at Dec. 31, 2011	72,302
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss			(8,594)	(8,594)
Stock-based compensation expense		29		29
Balance at Dec. 31, 2012	1	1,043	(167,312)	(166,268)
Balance (in shares) at Dec. 31, 2012	72,302
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Deemed contribution on exchange of Series A-E Preferred Stock for Series A-1		143,681		143,681
Deemed contribution on exchange of Series A-1 preferred for Series A-2 preferred stock		7,489		7,489
Deemed dividend on sale of Series A-1 preferred		(3,429)		(3,429)
Exchange of Series A-1 and A-2 preferred for common stock	166	79,435		79,601
Exchange of Series A-1 and A-2 preferred for common stock (in shares)	16,620,274
Sale of common stock, net of issuance cost	146	72,361		72,507
Sale of common stock, net of issuance cost (in shares)	14,639,500
Issuance of common stock upon exercise and vesting of stock awards	1	12		13
Issuance of common stock upon exercise and vesting of stock awards (in shares)	22,391
Net loss			(60,259)	(60,259)
Stock-based compensation expense		198		198
Balance at Dec. 31, 2013	314	300,790	(227,571)	73,533
Balance (in shares) at Dec. 31, 2013	31,354,467
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock upon exercise and vesting of stock awards		11		11
Issuance of common stock upon exercise and vesting of stock awards (in shares)	15,941
Issuance of common stock under the Employee Stock Purchase Plan		307		307
Issuance of common stock under the Employee Stock Purchase Plan (in shares)	63,864
Net loss			(16,422)	(16,422)
Stock-based compensation expense		1,861		1,861
Balance at Dec. 31, 2014	$ 314	$ 302,969	$ (243,993)	$ 59,290
Balance (in shares) at Dec. 31, 2014	31,434,272

Condensed Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Cash flows from operating activities
Net loss	$ (16,422)	$ (60,259)	$ (8,594)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization	882	711	527
Stock-based compensation	1,861	198	29
Abandonment of capitalized intangible assets	509	205	388
Gain from non-monetary exchange			(754)
Gain on disposal of assets	(2)	(16)	(86)
Loss on exchange of notes for preferred stock		48,556
Accrued interest on convertible promissory notes (See Note 3)		1,211	2,456
Changes in operating assets and liabilities:
Accounts receivable	(2,907)	293	(325)
Prepaid expenses and other assets	(73)	115	(90)
Other assets	41	(20)	15
Accounts payable	(943)	1,319	(522)
Accrued expenses	859	109	460
Deferred revenue	(5,156)	2,125	(4,556)
Net cash used in operating activities	(21,351)	(5,453)	(11,052)
Cash flows from investing activities
Purchase of intangible assets	(1,505)	(1,158)	(1,217)
Purchase of property and equipment	(780)	(136)	(41)
Proceeds from sale of property and equipment	2	16	97
Net cash used in investing activities	(2,283)	(1,278)	(1,161)
Cash flows from financing activities
Preferred stock issuance cost		(116)
Proceeds from the sale of Series A-1 preferred		10,000
Proceeds from issuance of common stock upon exercise of stock awards	9	13
Proceeds from issuance of common stock under the Employee Stock Purchase Plan	307
Proceeds from sale of common stock		80,517
Payments of Initial Public Offering costs		(8,010)
Payments on capital lease obligations	(8)	(10)	(12)
Net cash provided by financing activities	308	82,394	(12)
Net increase (decrease) in cash	(23,326)	75,663	(12,225)
Cash, beginning of period	77,975	2,312	14,537
Cash, end of period	54,649	77,975	2,312
Cash paid for:
Interest	9	1	3
Taxes	1
Supplemental Schedule of Noncash Investing and Financing Activities
Capitalization of licensing rights acquired in non-monetary exchange			754
Equipment acquired under capital lease			22
Settlement of notes payable for preferred stock		$ 22,134

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2014

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

1. Summary of Significant Accounting Policies

Description of Business

Xencor, Inc. (we, us, our, or the Company) was incorporated in California in 1997 and reincorporated in Delaware in September 2004. We are a clinical‑stage biopharmaceutical company focused on discovering and developing engineered monoclonal antibodies to treat severe and life‑threatening diseases with unmet medical needs. We use our proprietary XmAb technology platform to create next‑generation antibody product candidates designed to treat autoimmune and allergic diseases, cancer, and other conditions. We focus on the portion of the antibody that interacts with multiple segments of the immune system, referred to as the Fc domain, which is constant and interchangeable among antibodies. Our engineered Fc domains, the XmAb technology, are applied to our pipeline of antibody‑based drug candidates to increase immune inhibition, improve cytotoxicity, extend half‑life and most recently bispecific antibodies.

Our operations are based in Monrovia and San Diego, California. We operate in one segment.

Basis of Presentation

The Company’s financial statements as of December 31, 2014, and 2013 and for the years then‑ended have been prepared in accordance with accounting principles generally accepted in the United States.

Reverse Stock Split and Conversion of Preferred Stock

On November 1, 2013, our board of directors and the requisite holders of our voting stock authorized the filing of a certificate of amendment to our amended and restated certificate of incorporation for the purposes of effecting a 3.1‑for‑1 reverse split of the common stock. The certificate of amendment was filed on November 1, 2013 and the stock split became effective as of that date. Accordingly, all references to numbers of common shares, including the number of common shares on an as‑if‑converted basis, per‑share data and share prices and exercise prices in the accompanying financial statements have been adjusted to reflect the reverse stock split on a retroactive basis.

Each 3.1 shares of convertible preferred stock was convertible, at the stockholder’s option, into one share of common stock. Additionally, each share of convertible preferred stock was automatically converted into common stock, at the then‑effective conversion rate upon the effective date of a registration statement filed with the SEC under the Securities Act or Exchange act.

On December 3, 2013, our registration statement on Form S‑1 related to our initial public offering became effective and 49,671,392 shares of Series A‑1 preferred stock converted into 16,022,915 shares of common stock and 1,851,814 shares of Series A‑2 preferred stock converted into 597,359 shares of common stock.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ materially from those estimates.

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers, which establishes principles for reporting revenue and cash flows arising from an entity’s contracts with customers. The new pronouncement is effective for reporting periods beginning after December 15, 2016 and will replace most of the existing revenue recognition guidance within the United States GAAP. The new pronouncement permits the use of either the retroactive or cumulative effect transition method. Early adoption is not permitted.

The Company is evaluating the effect that ASU 2014-09 will have on its financial statements and related disclosures.

Revenue Recognition

We have, to date, earned revenue from research collaborations, which may include research and development services, licenses of our internally‑developed technologies, or a combination of both. We recognize revenue when all of the following criteria are met: persuasive evidence of an arrangement exists; transfer or access of technology has been completed or services have been rendered; our price to the customer is fixed or determinable and collectability is reasonably assured.

The terms of our license and research and development agreements generally include nonrefundable upfront payments, research funding, license fees and, milestone and other contingent payments to us for the achievement of defined collaboration objectives and certain clinical, regulatory and sales‑based events, as well as royalties on sales of any commercialized products.

The terms of our licensing agreements include non‑refundable upfront fees, annual licensing fees, and contractual payment obligations for the achievement of pre‑defined preclinical, clinical, regulatory and sales‑based events by our partners. The licensing agreements also include royalties on sales of any commercialized products by our partners.

Multiple‑Element Revenue Arrangements. Certain of our collaboration and license agreements represent multiple‑element revenue arrangements. To account for such transactions, we determine the elements, or deliverables, included in the arrangement and determine which deliverables are separate units for accounting purposes. We consider delivered items to be separate units of accounting if the delivered items have stand‑alone value to the customer. If the delivered items are separate units we allocate the consideration received or due under the arrangement to the various elements based on each elements’ relative selling price. The identification of individual elements in a multiple‑element arrangement and the estimation of the selling price of each element involve significant judgment, including consideration as to whether each delivered element has standalone value to the customer. We determine the estimated selling price for deliverables within each arrangement using vendor‑specific objective evidence (VSOE) of selling price, if available, or third‑party evidence of selling price if VSOE is not available, or our best evidence of selling price if neither VSOE nor third‑party evidence is available.

Determining the best estimate of selling price for a deliverable requires significant judgment. We use our best estimate of selling price to estimate the selling price for licenses to our technologies and product candidates, since we do not have VSOE or third‑party evidence of selling for these deliverables. The basis of our estimate of selling price is the arm’s length negotiation with the licensee that occurs in each transaction. The potential value of our technology to a licensee in a transaction depends on a variety of factors unique to each transaction. Factors that impact the negotiation and hence that we consider in our estimates center on the specific product candidate and include: the product candidate’s potential market size, the product candidate’s stage of development, the existence of competitive technologies that could be substituted for ours by the licensee and the scientific assessment of the product candidate’s likelihood of success at various development stages. The most common deliverable is the commercial license for our technology in the product candidate, and frequently a research license with an option for commercial license. The upfront payments, annual license fees, contingent payments, milestones and royalties relate to these licenses and/or options and depend on the product‑specific factors described above. The other significant deliverable is research and development services and the price for these depends on estimates for our personnel and supply costs and the costs of third‑party contract research organizations necessary to support the services.

We recognize consideration allocated to an individual element when all other revenue recognition criteria are met for that element. Our multiple‑element revenue arrangements may include the following:

License arrangements. The deliverables under our collaboration and license agreements generally include exclusive or non‑exclusive licenses to one or more of our technologies. The technologies can be applied to a collaborator’s product candidates for discovery, development, manufacturing and commercialization. We will also enter into agreements for the exclusive or non‑exclusive licenses to our internally developed product candidates. To account for this element of the arrangement, we evaluate whether the exclusive or non‑exclusive license has standalone value apart from the undelivered elements to the collaboration partner, which may include research and development services or options for commercial licenses, based on the consideration of the facts and circumstances of each arrangement, including the research and development capabilities of the collaboration partner and other market participants. We recognize arrangement consideration allocated to licenses upon delivery of the license, if the facts and circumstances indicate the license has standalone value apart from the undelivered elements. If facts and circumstances indicate that the delivered license does not have standalone value from the undelivered elements, we recognize the revenue as a combined unit of accounting. In those circumstances we recognize revenue from non‑refundable upfront fees in the same manner as the undelivered item(s), which is generally the period over which we provide research and developments services.

Research and Development Services. The deliverables under our collaboration and license arrangements may include research and development services we perform on behalf of or with the collaboration partner. As the provision of research and development services is an integral part of our operations and we may be principally responsible for the performance of these services under the agreements, we recognize revenue on a gross basis for research and development services as we perform those services. Additionally, we recognize research related funding under collaboration research and development efforts as revenue as we perform or deliver the related services in accordance with contract terms.

Milestone Revenue. Our collaboration and license agreements generally include contingent contractual payments related to achievement of specific research, development and regulatory milestones and sales‑based milestones that are based solely upon the performance of the licensor or collaborator. Research, development and regulatory contingent contractual payments and milestone payments are typically payable under our collaborations when our collaborator selects a compound, or initiates or advances a covered product candidate in preclinical or clinical development, upon submission for marketing approval of a covered product with regulatory authorities, upon receipt of actual marketing approvals of a covered product or for additional indications, or upon the first commercial sale of a covered product. Sales‑based contingent contractual payments are typically payable when annual sales of a covered product reach specific levels.

At the inception of each arrangement that includes contingent contractual payments, we evaluate whether each potential payment and milestone is substantive and at risk to both parties based on the basis of the contingent nature of the milestone event. We evaluate factors such as scientific, regulatory, commercial and other risks that we must overcome to achieve the respective milestone event, whether the contractual payments due at each milestone event is reasonable relative to all deliverables and payment terms in the arrangement in making this assessment and whether the contingent contractual payment relates solely to past performance. Additionally, certain of our product development and technology license arrangements may include milestone payments related to the achievement of specific research and development milestones, which are achieved in whole or in part on our performance.

We recognize any payment that is contingent upon the achievement of a substantive milestone entirely in the period in which the milestone is achieved. A milestone is defined as an event that can only be achieved based in whole or in part either on our performance, or the performance of our collaborators, or the occurrence of a specific outcome resulting from our past performance for which there is a substantive uncertainty at the date the arrangement is entered into that the event will be achieved.

Collaborative Research and Licensing Agreements

Novo Nordisk A/S

In December 2014, we entered into a Collaboration and License Agreement with Novo Nordisk A/S (Novo). Under the terms of the agreement, we granted Novo a research license to use certain Xencor technologies including our bispecific, IIb, Xtend and others during a two year research term. We will provide research support for four FTE’s in collaboration with Novo to apply our technologies to Novo provided targets to identify compounds with improved properties. Novo has an option to extend the research term for another twelve months upon written notice to us and payment of another year of research funding. At the end of the research term, Novo will have a commercial license to develop and commercialize any new targets identified during the research term.

Under the agreement, in January 2015, we received an upfront payment of $2.5 million and we will receive research funding of $1.6 million per year over the research term. We are also eligible to receive $2.0 million in milestone payments upon the successful completion of certain projects during the research term. In addition, if Novo identifies a compound from the collaboration to advance into clinical development, we are eligible to receive future development, regulatory and commercial milestone payments and royalties. The potential future milestones total $167.3 million and include $36.3 million in development milestones, $51.0 million in regulatory milestones and $80.0 million in sales milestones.

We determined that the deliverables under the arrangement were the research license to our technologies and the research support. We believe that the research support and the technologies are integral to each other and are not separate units of accounting. The commercial license did not have standalone value at inception of the arrangement due to the uncertainty of identifying a commercial target.

At inception of the arrangement, we determined that consideration under the agreement is represented by the upfront payment and the research funding and we are recognizing the $2.5 million upfront payment as income over the two year research term. The research funding is being recognized into income over the period that the services are being provided. We determined that future milestone payments were substantive and contingent and we did not allocate any of the upfront consideration to these milestones.

During the year ended December 31, 2014 we recognized $0.1 million in revenue related to the arrangement; as of December 31, 2014 we have $2.9 million in deferred revenue related to the agreement.

MorphoSys Ag

In June 2010, we entered into a Collaboration and License Agreement with MorpohSys AG (MorphoSys), which we subsequently amended in March 2012. The agreement provided us an upfront payment of $13.0 million in exchange for an exclusive worldwide license to our patents and know‑how to research, develop and commercialize our XmAb5574 product candidate (subsequently renamed MOR208) with the right to sublicense under certain conditions. Under the agreement, we agreed to collaborate with MorphoSys to develop and commercialize XmAb5574/MOR208. We determined that the arrangement was one with multiple deliverables and we identified the multiple elements in the agreement as the license of XmAb5574/MOR208 and the research and development services provided by us for the initial Phase 1 clinical trial. If certain developmental, regulatory and sales milestones are achieved, we are eligible to receive future milestone payments and royalties. We determined that the future milestone payments were substantive and contingent and we did not allocate any of the upfront consideration to these milestones. Our responsibility with respect to the collaboration services is limited to completion of the Phase 1 clinical trial. MorphoSys is responsible all further development of XmAb5574/MOR208.

Under the terms of the amendment, we received additional proceeds for the additional research and development services related to extension of the Phase 1 clinical trial. During 2012, we recognized $0.4 million of revenue related to the additional services provided.

In April and May 2013, MorphoSys initiated two Phase II clinical trials under the arrangement and we received a milestone payment of $3.0 million. We have recognized the payment as revenue in the period that the milestone event occurred.

The total revenue recognized under this arrangement was zero, $3.0 million and $2.0 million for the years ended December 31, 2014, 2013 and 2012, respectively. As of December 31, 2014, we have no deferred revenue related to this agreement.

Alexion Pharmaceuticals, Inc.

In January 2013, we entered into an option and license agreement with Alexion Pharmaceuticals, Inc. (Alexion). Under the terms of the agreement, we granted to Alexion an exclusive research license, with limited sublicensing rights, to make and use our Xtend technology to evaluate and advance compounds against six different target programs during a five‑year research term under the agreement, up to completion of the first multi‑dose human clinical trial for each target compound. Alexion may extend the research term for an additional three years upon written notice to us and payment of an extension fee of $2.0 million. Alexion is responsible for conducting all research and development activities under the agreement at its own expense.

In addition, we granted to Alexion an exclusive option, on a target‑ by‑target basis, to obtain an exclusive commercial, worldwide, royalty‑ bearing license, with sublicensing rights, under our Xtend technology to develop and commercialize products that contain the target for which the option is exercised. In order to exercise this option, Alexion must pay a $4.0 million option fee with respect to each target for which the option is exercised. Alexion may exercise this option at any time during the research term but must exercise it prior to initiating a second clinical trial with a target that includes our technology.

Under the agreement, we received an upfront payment of $3.0 million. Alexion is also required to pay an annual maintenance fee of $0.5 million during the research term of the agreement and $1.0 million during any extension of the research term. In addition, if certain development, regulatory and commercial milestones are achieved, we are eligible to receive up to $66.5 million for the first product to achieve such milestones on a target‑by‑target basis. If licensed products are successfully commercialized, we are also entitled to receive royalties based on a percentage of net sales of such products sold by Alexion, its affiliates or its sublicensees, which percentage is in the low single digits. Alexion’s royalty obligations continue on a product‑by‑product and country‑by‑ country basis until the expiration of the last‑to‑expire valid claim in a licensed patent covering the applicable product in such country.

Absent early termination, the term of the agreement will continue until the expiration of Alexion’s royalty payment obligations or until the expiration of the research term if Alexion has not exercised its option for a product license under the agreement. Either party may terminate the agreement for a material breach of the agreement by the other party if such breach remains uncured for 60 days, or 30 days in the case of a non‑payment breach. Alexion may terminate the agreement without cause on a target‑by‑target basis upon 90 days’ advance written notice to us.

The total revenue recognized under this arrangement was $1.0 million and $0.9 million for the years ended December 31, 2014 and 2013 respectively. As of December 31, 2014 we have deferred revenue related to this agreement of $1.6 million.

Amgen, Inc.

In December 2010, we entered into a Collaboration and Option Agreement with Amgen, Inc. (Amgen), pursuant to which we agreed to collaborate with Amgen to research, develop and commercialize XmAb5871 and products based thereon. Under the agreement, we granted to Amgen an option to acquire an exclusive license to research, develop, manufacture and commercialize XmAb5871 and certain related products worldwide, which option is exercisable by Amgen only after Amgen’s (1) notification to us that it is electing to exercise the option and (2) payment of an option exercise fee to us during the option period under the agreement. The term of the option began at the effective date of the Agreement and expires 90 days after delivery of the data from a Phase 2 proof‑of‑concept (POC) clinical trial. During the option period and prior to Amgen exercising its option under the agreement, we retain ownership of the compound and are responsible for all clinical development of the compound through completion of the Phase 2 POC clinical trial and delivery of the clinical study data for the POC clinical trial. We received a nonrefundable upfront payment of $11.0 million upon execution of the agreement and a $2.0 million payment in January 2013 upon initiation of a Phase 1b trial. We determined that substantially all of the future milestones and related payments were substantive and contingent and we did not allocate any of the upfront consideration to the milestones.

We determined that the arrangement is one with multiple deliverables and we identified the multiple elements at the inception of the agreement. We determined that the deliverables under the arrangement were the research and development services and the option to acquire the rights to XmAb5871. Since the option is a contingent and a substantive element, no portion of the upfront fee was allocated to it. The upfront payment was allocated to the research and development services and is being recognized ratably over the estimated service period to complete the Phase 2 POC trial and delivery of the clinical study reports to Amgen. We have estimated that the term of the service period to be 72 months from inception of the agreement through completion of the POC trial.

In October 2014, we entered into an agreement with Amgen to terminate the Collaboration Agreement pursuant to which all worldwide rights to develop and commercialize XmAb5871 reverted back to us. Our obligations to continue development of XmAb5871 under the terms of the Collaboration Agreement terminated effective as of the date of the termination agreement. As a result of and effective as of the date of the termination agreement, all of Amgen’s rights to XmAb5871 terminated including the right to exercise an exclusive option to acquire the worldwide rights to XmAb5871. Amgen’s obligations to make any further payments to us are also terminated. In connection with the termination, we granted Amgen a right of first negotiation (ROFN) to obtain an exclusive license to develop and commercialize any XmAb5871 product.

The ROFN requires us to notify Amgen if we decide to pursue a licensing transaction with a third party involving XmAb5871. Upon receipt of the notification, Amgen will have a limited time to review the data from XmAb5871 and enter into negotiations to obtain an exclusive license to develop and commercialize any future XmAb5871 product. The ROFN will expire upon the earlier of: (1) October 27, 2019, (2) initiation by us of a Phase 3 clinical trial with XmAb5871 or (3) the transfer or sale to a third party of substantially all of our business.

We have determined that the termination results in a cancellation of all our obligations to Amgen under the Collaboration Agreement. We have evaluated the terms of the ROFN and determined that it has de minimis value because Amgen’s rights under the ROFN are limited to an exclusive negotiating period of a short duration and there is no bargain element in the ROFN. As a result of the termination, we have recognized $5.2 million of income which represents the balance of the deferred revenue related to the agreement at the time of the termination.

The total revenue recognized under this arrangement was $6.9 million, $2.2 million and $1.8 million for the years ended December 31, 2014, 2013 and 2012, respectively. As of December 31, 2014 we have no deferred revenue related to this agreement.

MedImmune LLC

In December 2012, we entered into a Cross‑License Agreement with MedImmune, LLC (MedImmune). Under the agreement we provided MedImmune with a non‑exclusive research license to certain technology and options to acquire commercial licenses to a limited number of compounds. In exchange, MedImmune provided us with a worldwide, non‑exclusive, royalty‑free license and sub‑license to certain U.S. patent rights granted to MedImmune. We determined that the exchange is a non‑monetary transaction as provided under ACS 845‑10, Non‑Monetary Transactions. The transaction did not include any cash proceeds and only the exchange of intellectual property rights between the two companies.

We estimated the fair value of the license and options transferred to be $0.75 million. Our estimate was based on the risk adjusted discounted cash flow that is associated with the research license and options to commercial licenses transferred to MedImmune. We recognized licensing revenue on the exchange of $0.75 million for the year ended December 31, 2012 equal to the fair value of the assets transferred. We also recorded an asset of $0.75 million to reflect the licensing rights that we acquired from MedImmune in the exchange; the capitalized rights are being amortized over the shorter of the remaining patent term or the estimated useful life of the license.

MedImmune Ventures, Inc., an affiliate of MedImmune, was one of our 5% stockholders and has a designee on our Board of Directors as of December 31, 2012. As a result of our Initial Public Offering that became effective December 2013, MedImmune was no longer a 5% stockholder.

Boehringer Ingelheim International GmbH

In 2007 we entered into a Research Licensee and Collaboration Agreement with Boehringer Ingelheim International GmbH (BI). Under the agreement, we provided BI with a three‑year research license to one of our technologies and commercial options. We identified the deliverables under the agreement at inception as the research licenses and options to acquire commercial licenses to up to two compounds. Upon exercise of an option to a commercial license, we are eligible to receive future milestone payments and royalties. We determined that the future milestones and related payments were substantive and contingent and we did not allocate any of the upfront consideration to the milestones. The upfront payment and the annual license fees are being recognized ratably into income over the research license term which expired in 2011 and payments for the commercial options were recognized in the period the commercial option was exercised since the options were contingent and substantive. During 2012, BI advanced a compound that incorporates our technology into clinical development and we received a milestone payment of $1.2 million and recognized the payment as revenue in the period the milestone event occurred. No revenue related to this arrangement was recognized in 2014 or 2013. There is no deferred revenue related to this agreement at December 31, 2104.

Janssen, Research & Development, LLC

In 2009 we entered into a Research License and Option Agreement with Janssen, Research & Development, LLC (Janssen). Under the agreement, we provided Janssen with non‑exclusive research license and options for exclusive commercial licenses to apply our technology to their compounds. We identified the deliverables under the agreement at inception as the research licenses and options to acquire commercial licenses to up to three compounds. Upon exercise of an option, we are eligible to receive future milestone and royalty payments. We determined that the options and future milestones and related payments were substantive and contingent and we did not allocate any of the upfront consideration to the options or milestones. The upfront payment of $1.0 million received at inception and the annual research license renewal payments are being recognized as revenue recorded ratably over the two‑year term of the research license. During 2012, we recognized total revenue of $1.4 million consisting of $0.9 million in research license revenue and $0.5 million for the exercise of a commercial option. No revenues related to this arrangement were recognized in 2014 and 2013. There is no deferred revenue related to this agreement at December 31, 2104.

CSL Limited

In 2009 we entered into a Research License and Commercialization Agreement with CSL Limited (CSL-2009). Under the agreement, we provided CSL with a research license to one of our technologies and up to five commercial options. The upfront payment of $0.75 million received at inception and the annual research license renewal payments were recognized as revenue ratably over the five‑year term of the research license. During 2012, we recognized total revenue of $1.8 million consisting of $0.3 million in annual research license revenue and $1.5 million in milestone payments. We identified the deliverables under the agreement at inception as the five‑year research licenses and options to acquire commercial licenses.

In May 2013, we entered into an amendment to a February 2009 Research License and Commercialization Agreement with CSL, which eliminated a contingent milestone payment requirement and reduced the royalty rate on net sales for a product in development. The amendment provided for a payment upon signing of $2.5 million. We determined that the amendment was a material modification to the original agreement and evaluated the remaining deliverables at the date of the amendment. We determined that the remaining deliverables were the research license which expires in February 2014 and four additional options to take commercial licenses through the term of the research period. The options were considered to be substantive and contingent and we did not allocate any of the proceeds received in the amendment to the options. The amendment proceeds were recognized into income over the remaining period of the research term. Total revenue recognized for the years ended December 31, 2014, 2013 and 2012 was $0.7 million, $2.4 million and $1.8 million respectively. As of December 31, 2014 we have no deferred revenue related to this agreement.

In March 2013, we entered into a License Agreement with CSL Limited (CSL-2013). Under the terms of the agreement, we provided CSL with a non‑exclusive commercial license to apply our technology to one of their compounds. The agreement provided for upfront payment of $0.5 million and we are eligible to receive future milestones as CSL advances the compound into clinical development. We determined that the deliverables under this agreement were the non‑exclusive commercial license. We determined that the future milestones and related payments were substantive and contingent and we did not allocate any of the upfront consideration to the milestones. We recognized zero and $0.5 million of revenue related to this agreement for the year ended December 31, 2014 and 2013, respectively. There is no deferred revenue related to this agreement at December 31, 2014.

Merck Sharp & Dohme Corp.

In July 2013, we entered into a License Agreement with Merck Sharp & Dohme Corp (Merck). Under the terms of the agreement, we provided Merck with a non‑exclusive commercial license to certain patent rights to our Fc domains to apply to one of their compounds. We also provided Merck with contingent options to take additional non‑exclusive commercial licenses. The contingent options provide Merck an opportunity to take non‑exclusive commercial licenses at an amount less than the amount paid for the original license. The agreement provided for an upfront payment of $1.0 million and annual maintenance fees totaling $0.5 million. We are also eligible to receive future milestones and royalties as Merck advances the compound into clinical development.

We determined that the deliverables under this agreement were the non‑exclusive commercial license and the options. The options are considered substantive and contingent and no amount of the upfront payment was allocated to these options. We also determined that the future milestones and related payments were substantive and contingent and did not allocate any of the upfront payment to the milestones.

In the first quarter of 2014, Merck initiated a Phase 1 clinical trial which triggered a $0.5 million milestone payment to us. For the years ended December 31, 2014 and 2013 total revenue recognized was $0.6 million and $1.0 million respectively. As of December 31, 2014, we had deferred revenue of $0.1 million related to this agreement.

As of December 31, 2014, the Company may be eligible to receive the following maximum payments from its collaborative partners and licensees based upon contractual terms in the agreements assuming all options are exercised and all milestones are achieved:


	Potential Milestones (in millions) (1)
							Total
Partner	Development-based		Regulatory-based		Sales-based		Milestones
MorphoSys	$	62.0	$	187.0	$	50.0	$	299.0
Alexion		51.0		168.0		180.0		399.0
BI		9.0		6.0		12.0		27.0
CSL 2009		6.0		4.0		5.0		15.0
CSL 2013		8.0		4.0		24.5		36.5
Merck		3.5		6.0		—		9.5
Novo Nordisk		36.3		51.0		80.0		167.3
Janssen		6.0		—		4.0		10.0
Total	$	181.8	$	426.0	$	355.5	$	963.3

(1)

The payments are solely dependent upon activities of the collaborative partner or licensee.

The $9.5 million, $10.2 million and $9.5 million of revenue recorded for the years ended December 31, 2014, 2013 and 2012, respectively was earned principally from the following licensees (in millions):


	Year Ended December 31,
	Year Ended December 31,
	2014		2013		2012
Amgen	$	6.9	$	2.2	$	1.8
MorphoSys		—		3.0		2.0
Janssen		—		—		1.4
Merck		0.6		1.0		—
Alexion		1.0		0.9		—
CSL		0.7		2.9		1.8
BI		—		—		1.2
Other		0.3		0.2		1.3
Total	$	9.5	$	10.2	$	9.5

As of December 31, 2014 and 2013 our accounts receivable included $3.0 million and $0.1 million from Novo Nordisk A/S and MorphoSys AG respectively.

A substantial portion of our revenue is earned from collaboration partners outside the United States. Non‑U.S. revenue is denominated in U.S. dollars. A breakdown of our revenue from U.S. and Non‑U.S. sources for the years ended December 31, 2014, 2013 and 2012 is as follows (in millions):


	Year Ended
	December 31,
	2014		2013		2012
U.S. Revenue	$	8.6	$	4.2	$	4.4
Non-U.S. Revenue		0.9		6.0		5.1
Total	$	9.5	$	10.2	$	9.5

Deferred Revenue

Deferred revenue arises from payments received in advance of the culmination of the earnings process. We have classified deferred revenue expected to be recognized within the next 12 months as a current liability. We recognize deferred revenue as revenue in future periods when the applicable revenue recognition criteria have been met. The total amounts reported as deferred revenue were $4.6 million and $9.7 million for the years ended December 31, 2014 and 2013, respectively.

Research and Development Expenses

Research and development expenses include costs we incur for our own and for our collaborators research and development activities. Research and development costs are expensed as incurred. These costs consist primarily of salaries and benefits, including associated stock‑based compensation, laboratory supplies, facility costs, and applicable overhead expenses of personnel directly involved in the research and development of new technology and products, as well as fees paid to other entities that conduct certain research development activities on our behalf. We estimate preclinical study and clinical trial expenses based on the services performed pursuant to the contracts with research institutions and clinical research organizations that conduct and manage preclinical studies and clinical trials on our behalf based on the actual time and expenses incurred by them. Further, we accrue expenses related to clinical trials based on the level of patient enrollment and activity according to the related agreement. We monitor patient enrollment levels and related activity to the extent reasonably possible and adjust estimates accordingly. During 2014, 2013 and 2012 we expensed $18.5 million, $17.0 million and $12.7 million, respectively, for research and development.

We capitalize acquired research and development technology licenses and third‑party contract rights and amortize the costs over the shorter of the license term or the expected useful life. We review the license arrangements and the amortization period on a regular basis and adjust the carrying value or the amortization period of the licensed rights if there is evidence of a change in the carrying value or useful life of the asset. See “Patents, licenses and other intangible assets.”

Cash and Cash Equivalents

We consider cash equivalents to be only those investments which are highly liquid, readily convertible to cash and which mature within three months from the date of purchase.

The primary objectives for our investment portfolio are liquidity and safety of principal. Investments are made to achieve the highest rate of return for us, while maintaining consistency with these two objectives.

Concentrations of Risk

Cash and cash equivalents are maintained at financial institutions and, at times, balances may exceed federally insured limits. We have never experienced any losses related to these balances. Amounts on deposit in excess of federally insured limits at December 31, 2014 and 2013 approximated $54.0 million and $77.5 million, respectively.

We have payables with one service provider that represents 47% of our total payables and five service providers that represented 57% of our total payables for the years ended December 31, 2014 and 2013, respectively. We rely on two critical suppliers for the manufacture of our drug product for use in our clinical trials. While we believe that there are alternative vendors available, a change in manufacturing vendors could cause a delay in the availability of drug product and result in a delay of conducting and completing our clinical trials. No other vendor accounted for more than 10.0% of payables at December 31, 2014 and 2013.

Fair Value of Financial Instruments

Our financial instruments primarily consist of cash, money market funds, trade accounts receivable, accounts payable, accrued expenses and convertible notes payable. The fair value of cash, money market funds, trade accounts receivable, accounts payable and accrued expenses closely approximate their carrying value due to their short maturities. The carrying amounts of convertible notes payable approximate their fair value, as the interest rates, in consideration of the conversion feature, approximate the interest rates presently available to us.

We determine the fair value of the principal amount of financial and nonfinancial assets and liabilities using the fair value hierarchy, which describes three levels of inputs that may be used to measure fair value, as follows:

Level 1—Quoted prices in active markets for identical assets or liabilities;

Level 2—Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and

Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

There are no fair value assets or liabilities.

Property and Equipment

Property and equipment are recorded at cost and depreciated using the straight‑line method over the estimated useful lives of the assets, ranging from three to seven years, or the lease term, whichever is shorter. Expenditures for repairs and maintenance are charged to expense as incurred while renewals and improvements are capitalized. Useful lives by asset category are as follows:



Computers, software and equipment		3 - 5 years
Furniture and fixtures		5 - 7 years
Leasehold improvements		5 - 7 years or remaining
		lease term, whichever is less

Patents, Licenses, and Other Intangible Assets

The cost of acquiring licenses is capitalized and amortized on the straight‑ line basis over the shorter of the term of the license or its estimated economic life, ranging from five to 25 years. Third‑party costs incurred for acquiring patents are capitalized. Capitalized costs are accumulated until the earlier of the period that a patent is issued or we abandon the patent claims. Cumulative capitalized patent costs are amortized on a straight‑line basis from the date of issuance over the shorter of the patent term or the estimated useful economic life of the patent, ranging from 13 to 20 years. Our senior management, with advice from outside patent counsel, assesses three primary criteria to determine if a patent will be capitalized initially: i) technical feasibility, ii) magnitude and scope of new technical function covered by the patent compared to the company’s existing technology and patent portfolio, particularly assessing the value added to our product candidates or licensing business, and iii) legal issues, primarily assessment of patentability and prosecution cost. We review our intellectual property on a regular basis to determine if there are changes in the estimated useful life of issued patents and if any capitalized costs for unissued patents should be abandoned. Capitalized patent costs related to abandoned patent filings are charged off in the year of the decision to abandon. During 2014, 2013 and 2012, we abandoned previously capitalized patent and licensing related charges of $509,000, $205,000 and $388,000, respectively.

The carrying amount and accumulated amortization of patents, licenses, and other intangibles is as follows (in thousands):


	December 31,
	2014		2013
Patents, definite life	$	5,720	$	4,834
Patents, pending issuance		3,654		3,515
Licenses and other amortizable intangible assets		1,797		1,917
Nonamortizable intangible assets (trademarks)		400		369
Total gross carrying amount		11,571		10,635
Accumulated amortization—patents		(1,776)		(1,395)
Accumulated amortization—licenses and other		(679)		(426)
Total intangible assets, net	$	9,116	$	8,814

Amortization expense for patents, licenses, and other intangible assets was $694,000, $598,000 and $373,000 for the years ended December 31, 2014, 2013 and 2012, respectively.

Future amortization expense for patents, licenses, and other intangible assets recorded as of December 31, 2014, and for which amortization has commenced, is as follows:


	Years ending
	December 31,
	(in thousands)
2015	$	535
2016		538
2017		538
2018		527
2019		515
Thereafter		2,408
Total	$	5,061

The above amortization expense forecast is an estimate. Actual amounts of amortization expense may differ from estimated amounts due to additional intangible asset acquisitions, impairment of intangible assets, accelerated amortization of intangible assets, and other events. As of December 31, 2014, the Company has $3.7 million of intangible assets which are in‑process and have not been placed in service and, accordingly amortization on these assets has not commenced.

Long‑Lived Assets

Management reviews long‑lived assets which include fixed assets and certain identifiable intangibles for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset (or asset group) may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets. Fair value for our long‑lived assets is determined using the expected cash flows discounted at a rate commensurate with the risks involved.

As of December 31, 2014, we determined that our continuing losses from operations triggered a review of the carrying value of our long‑lived assets including our capitalized patent and licensing costs. We conducted an impairment analysis of the assets in accordance with ASC 360 by estimating the future undiscounted cash flows as of December 31, 2014, by patent family, which included granted and pending patents and related licenses. For purposes of the analysis, we grouped our patents into the four primary technology groups, IIb, ADCC, Xtend and, bi‑specific, and compared the carrying value of the group to the undiscounted cash flows expected to be received from the patents in each group. We determined that the fair value of the potential future cash flows using this method was in excess of the carrying value of the intangible assets as of December 31, 2014. The patent groups assessed for impairment were the IIb, ADCC, Xtend and bi‑specific patent families and represented the lowest level of cash flows for evaluation. These four patent families cover all of our current product candidates and our current license agreements. We modeled the cash flows from our internal product development program XmAb7195 and licensed programs that use each particular category of patent asset. We used multiple published sources of pharmaceutical product development stage failure rates to estimate failure rates at each stage of clinical development in order to probability weight the cash flows for each internal and licensed program. We did not recognize a loss from impairment for the years ended December 31, 2014, 2013 or, 2012.

Income Taxes

We account for income taxes in accordance with accounting guidance which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed annually for differences between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is the tax payable or refundable for the period plus or minus the change during the period in deferred tax assets and liabilities.

We assess our income tax positions and record tax benefits for all years subject to examination based upon our evaluation of the facts, circumstances and information available at the reporting date. For those tax positions where there is greater than 50% likelihood that a tax benefit will be sustained, we have recorded the largest amount of tax benefit that may potentially be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where there is a 50% or less likelihood that a tax benefit will be sustained, no tax benefit has been recognized in the financial statements.

Our policy is to recognize interest and penalties on taxes, if any, as a component of income tax expense. We did not have any uncertain tax positions at December 31, 2014 or 2013.

We are potentially subject to tax authority audits for the years 2011 and onwards for U.S. federal purposes and 2010 and onwards for state purposes.

Stock‑Based Compensation

We recognize compensation expense using a fair‑value‑based method for costs related to all share‑based payments, including stock options and shares issued under our Employee Stock Purchase Plan (“ESPP”). Stock‑based compensation cost related to employees and directors is measured at the grant date, based on the fair‑value—based measurement of the award using the Black‑Scholes method, and is recognized as expense over the requisite service period on a straight‑line basis. We are required to estimate forfeitures at the time of grant and revise those estimates in subsequent period if actual forfeitures differ from those estimates. We use historical data and industry published statistics to estimate pre‑vesting option forfeitures and record stock‑based compensation expense only for those awards that are expected to vest. We recorded stock‑based compensation (benefit) and expense for stock‑based awards to employees, directors and consultants of approximately $1.8 million, $198,000 and $29,000 for the years ended December 31, 2014, 2013 and 2012, respectively. Included in the 2014 total compensation expense is $172,000 under our ESPP.

Options granted to individual service providers that are not employees or directors are accounted for at estimated fair value using the Black‑Scholes option‑pricing method and are subject to periodic re‑measurement over the period during which the services are rendered.

Net Loss Per Share

Basic net loss per common share is computed by dividing the net loss by the weighted‑average number of common shares outstanding during the period. Potentially dilutive securities consisting of stock options at December 31, 2014, 2013 and 2012, and convertible preferred stock and convertible promissory notes at December 31, 2012 and 2011 were not included in the diluted net loss per common shares calculation because the inclusion of such shares would have had an antidilutive effect.


	Year Ended
	December 31,
	2014	2013	2012
	(in thousands)
Convertible preferred stock	—	—	12,188
Convertible promissory notes	—	—	2,800
Options to purchase common stock	2,827	1,794	1,305
Employee stock purchase plan shares	25	—	—
Total	2,852	1,794	16,293

The loss for the period ended December 31, 2013 was adjusted, for purposes of the diluted net income per share calculation, to reflect the deemed contribution of $144.8 million. This reflects a deemed contribution of $148.1 million from the exchange of convertible preferred stock, a deemed dividend of $1.0 million for the difference between the fair value of the shares of Series A‑1 convertible preferred stock and the price at which shares were sold in June 2013, and an additional deemed dividend of $2.3 million for the difference between the fair value of the shares of Series A‑1 convertible preferred stock and the price at which additional shares were sold in the subsequent Series A‑1 closing in September 2013.

For 2013, the diluted loss per share calculation assumes the conversion of outstanding shares of convertible preferred stock into common stock using the as‑if converted method.


	Year Ended December 31
	2014			2013			2012
	(in thousands, except
	per share data)
Basic
Numerator:
Net loss	$		(16,422)	$		(60,259)	$	(8,594)
Deemed contribution			—			144,765		—
Net income (loss) attributable to common stockholders for basic income per share	$		(16,422)	$		84,506	$	(8,594)
Denominator:
Weighted-average common shares outstanding		31,390,631				2,472,581		72,302
Basic net income (loss) per common share	$		(0.52)	$		34.18	$	(118.86)
Diluted:
Numerator:
Net income (loss) attributable to common stockholders for basic net loss per share	$		(16,422)	$		84,506	$	(8,594)
Deemed contribution			—			(144,765)		—
Net loss attributable to common stockholders for diluted net loss per share	$		(16,422)	$		(60,259)	$	(8,594)
Denominator:
Weighted average number of common shares outstanding used in computing basic net (loss) income per common share		31,390,631				2,472,581		72,302
Dilutive effect of conversion of convertible preferred stock			—		13,173,208			—
Weighted-average number of common shares outstanding used in computing net loss per common share		31,390,631			15,645,789			72,302
Diluted net loss per common share	$		(0.52)	$		(3.85)	$	(118.86)

Segment Reporting

The Company determines its segment reporting based upon the way the business is organized for making operating decisions and assessing performance. The Company has only one operating segment related to the development of pharmaceutical products.

Convertible Notes Payable	12 Months Ended
Convertible Notes Payable	Dec. 31, 2014
Convertible Notes Payable
Convertible Notes Payable	2. Convertible Notes Payable In 2009, we issued $7.7 million of convertible promissory notes (the 2009 Notes) to existing preferred stockholders. Originally, the 2009 Notes had an interest rate of 10.0% per annum and original maturity date of September 30, 2009 which was subsequently extended to July 31, 2011. In June 2011, the 2009 Notes were amended to increase the interest rate on the Note from 10.0% to 12.5% and to extend the maturity date to December 31, 2012. In December 2010, we issued an additional $7.5 million of convertible promissory notes (the 2010 Notes) to existing preferred stockholders. The 2010 Notes bear similar terms as the 2009 notes and, originally had an interest rate of 10.0% per annum and an original maturity date of December 31, 2011. In December 2011, the 2010 Notes were amended to increase the interest rate from 10.0% to 12.5% and to extend the maturity date of the Notes to December 31, 2012. In December 2012 the maturity dates for the 2009 Notes and the 2010 Notes were extended to April 15, 2013 and in April 2013 the maturity dates were extended again to June 15, 2013, with each such extension considered to be a modification of debt under ASC 470‑50‑40. In June 2013, and prior to the maturity dates of the 2009 Notes and the 2010 Notes, our Board of Directors and the requisite stockholders and holders of the 2009 Notes and 2010 Notes agreed to exchange the outstanding principal into shares of our Series A‑1 convertible preferred stock in connection with a concurrent financing . The exchange of the 2009 Notes and 2010 Notes was not pursuant to the terms of the applicable notes so we accounted for the exchange as an extinguishment of the original debt instrument.

Capital Structure	12 Months Ended
Capital Structure	Dec. 31, 2013
Capital Structure
Capital Structure	3. Capital Structure Authorized Capital Stock We are authorized to issue 200,000,000 shares of common stock and 10,000,000 shares of preferred stock as of December 31, 2014. We had 200,000,000 shares of common stock and 10,000,000 shares of preferred stock authorized as of December 31, 2013.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 210

-SubTopic 10

-Section S99

-Paragraph 1

-Subparagraph (SX 210.5-02.29-31)

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Reference 2: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 505

-SubTopic 10

-Section 50

-Paragraph 6

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Reference 3: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Regulation S-X (SX)

-Number 210

-Section 02

-Paragraph 29, 30, 31

-Article 5

Reference 4: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 310

-SubTopic 10

-Section S99

-Paragraph 2

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-URI http://asc.fasb.org/extlink&oid=27010918&loc=d3e74512-122707

Reference 5: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 505

-SubTopic 10

-Section S99

-Paragraph 4

-Subparagraph (SAB TOPIC 4.C)

-URI http://asc.fasb.org/extlink&oid=27012166&loc=d3e187143-122770

Reference 6: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Regulation S-X (SX)

-Number 210

-Section 08

-Article 4

Reference 7: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Staff Accounting Bulletin (SAB)

-Number Topic 4

-Section C

Reference 8: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Staff Accounting Bulletin (SAB)

-Number Topic 4

-Section E

Reference 9: http://www.xbrl.org/2003/role/presentationRef

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-Name Accounting Standards Codification

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-Name Accounting Standards Codification

-Glossary Preferred Stock

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Reference 11: http://www.xbrl.org/2003/role/presentationRef

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-Name Regulation S-X (SX)

-Number 210

-Section 04

-Article 3

Reference 12: http://www.xbrl.org/2003/role/presentationRef

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-Name Accounting Standards Codification

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-Subparagraph (SX 210.3-04)

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-Name Regulation S-X (SX)

-Number 210

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-URI http://asc.fasb.org/extlink&oid=6405834&loc=d3e23285-112656

+ Details

Property and Equipment

12 Months Ended

Dec. 31, 2014

Property and Equipment

Property and Equipment

4. Property and Equipment

Property and equipment consist of the following:


	December 31,
	2014		2013
	(In thousands)
Computers, software and equipment	$	4,270	$	3,514
Furniture and fixtures		97		89
Leasehold and tenant improvements		3,086		3,081
		7,453		6,684
Less accumulated depreciation and amortization		(6,554)		(6,377)
	$	899	$	307

During 2012, we entered into a capital lease for certain computer equipment for $22,000. Total assets under capital lease were $22,000 as of December 31, 2014 and 2013, respectively; accumulated depreciation for these assets was $20,000 and $12,900 at December 31, 2014 and 2013, respectively.

Depreciation expense in 2014, 2013 and 2012 was $188,000, $113,000 and $154,000, respectively.

- Definition

The entire disclosure for long-lived, physical assets used in the normal conduct of business and not intended for resale. Includes, but is not limited to, accounting policies and methodology, roll forwards, depreciation, depletion and amortization expense, including composite depreciation, accumulated depreciation, depletion and amortization expense, useful lives and method used, income statement disclosures, assets held for sale and public utility disclosures.

+ References+ Details

Income Taxes

12 Months Ended

Dec. 31, 2014

Income Taxes

Income Taxes

5. Income Taxes

We use the assets and liability method to account for income taxes in accordance with ASC 740‑10, Income taxes. Under this method, deferred income tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities. At each balance sheet date, we evaluate the available evidence about future taxable income and other possible source of realization of deferred income tax assets, and record a valuation allowance that reduces the deferred income tax assets to an amount that represents management’s best estimate of the amount of such deferred income tax assets that more likely than not will be realized. We did not record a liability or an asset related to an uncertain tax position for the years ended December 31, 2014 and 2013.

Our effective tax rate differs from the statutory federal income tax rate, primarily as a result of the operating loss and tax credits generated. For the years ended December 31, 2014, 2013 and 2012 there was no current provision for federal or state income taxes due to taxable losses incurred in each of the years.

A reconciliation of the federal statutory income tax rate to our effective income tax rate is as follows (in thousands):


	Year Ended
	December 31,
	2014		2013		2012
Federal statutory income tax rate	$	(5,583)	$	(20,488)	$	(2,922)
Loss on settlement of notes		—		18,884		—
Non-deductible research and development credit		435		—		336
Stock based compensation		478		—		—
Other		2		4		12
Net change in valuation allowance		4,668		1,600		2,574
Net effective tax rate	$	—	$	—	$	—

The tax effect of temporary differences that give rise to a significant portion of the deferred tax assets and liabilities at December 31, 2014 and 2013 is presented below (in thousands):


	2014		2013
Deferred income tax assets
Net operating loss carryforwards	$	47,401	$	58,286
Research credits		12,789		24,276
Depreciation		790		849
Stock-based compensation		—		52
Accrued compensation		373		137
Deferred revenue		1,836		3,899
Gross deferred income tax assets		63,189		87,499
Valuation allowance		(59,602)		(84,045)
Net deferred income tax assets		3,587		3,454
Deferred income tax liabilities
Patent costs		(3,199)		(2,929)
Licensing costs		(317)		(406)
Capitalized legal costs		(71)		(119)
Gross deferred income tax liabilities		(3,587)		(3,454)
Net deferred income tax asset/(liability)	$	—	$	—

Due to the uncertainty surrounding the realization of the benefits of our deferred tax assets in future tax periods, we have placed a valuation allowance against our deferred tax assets. The Company recognizes valuation allowances to reduce deferred tax assets to the amount that is more likely than not to be realized. The Company’s net deferred income tax asset is not more likely than not to be realized due to the lack of sufficient sources of future taxable income and cumulative book losses that have resulted over the years. During the years ended December 31, 2014, the valuation allowance decreased by $21.4 million; during 2013 the valuation allowance increased by $3.0 million. Upon analysis, there were changes in ownership under Section 382 of the Internal Revenue Code and related state provisions. Section 382 limits the amount of net operating losses and tax credit forwards that may be available after a change in ownership. The Company has adjusted its net operating loss and tax credit carryforwards to reflect the impact of the section 382 limitations. The Company’s tax returns remain open to potential inspection for the years 2011 and onwards for federal purposes and 2010 and onwards for state purposes.

As of December 31, 2014, we had cumulative net operating loss carryforwards for federal and state income tax purposes of $169.2 million and $134.2 million respectively, and available tax credit carryforwards of approximately $15.2 million for federal income tax purposes and $11.5 million for state income tax purposes, which can be carried forward to offset future taxable income, if any.

Our federal net operating loss carryforwards expire starting in 2019, state net operating losses expire starting in 2015 and federal tax credit carryforwards expire starting in 2033. Utilization of the net operating losses and tax credits are subject to a substantial annual limitation due to “ownership changes” which occurred. As a result of these changes, provisions in the Internal Revenue Code of 1986 under Section 382 and similar state provisions may result in the expiration of certain of our net operating losses and tax credits before we could use them.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References+ Details

Stock-Based Compensation

12 Months Ended

Dec. 31, 2014

Stock-Based Compensation

Stock-Based Compensation

6. Stock‑Based Compensation

Our Board of Directors and the requisite stockholders previously approved the 2010 Equity Incentive Plan. In October 2013, our Board of Directors approved the 2013 Equity Incentive plan (the 2013 Plan) and in November 2013 our stockholders approved the 2013 Plan. The 2013 Plan became effective as of December 3, 2013, the date of the Company’s IPO. As of December 2, 2013, we suspended the 2010 Plan and no additional awards may be granted under the 2010 Plan. Any shares of common stock covered by awards granted under the Prior Plans that terminate after December 2, 2013 by expiration, forfeiture, cancellation or other means without the issuance of such shares will be added to the 2013 Plan reserve.

As of December 31, 2014, the total number of shares of common stock available for issuance under the 2013 Plan was 5,409,980, which includes 2,662,065 of common stock that were available for issuance under the Prior Plans as of the effective date of the 2013 Plan. Unless otherwise determined by the Board, beginning January 1, 2014, and continuing until the expiration of the 2013 Plan, the total number of shares of common stock available for issuance under the 2013 Plan will automatically increase annually on January 1 by 4% of the total number of issued and outstanding shares of common stock as of December 31 of the immediate preceding year. On January 1, 2014, the total number of shares of common stock available for issuance under the 2013 Plan was automatically increased by 1,254,179 shares, which number is included in the number of shares available for issuance above. As of December 31, 2014 a total of 1,063,500 options had been issued under the 2013 Plan.

In November 2013, our Board of Directors and stockholders approved the 2013 Employee Stock Purchase Plan (ESPP), which became effective as of December 5, 2013. Under the ESPP our employees may elect to have between 1-15% of their compensation withheld to purchase Company stock at a discount. The ESPP has an initial two-year term that includes four six-month purchase periods and employee withholding amounts may be used to purchase Company stock during each six-month purchase period. The total number of shares that can be purchased with the withholding amounts are based on the lower of 85% of the Company’s stock price at the initial offering date or, 85% of the Company’s stock price at each purchase date. We have reserved a total of 581,286 shares of common stock for issuance under the ESPP. Unless otherwise determined by our Board, beginning on January 1, 2014, and continuing until the expiration of the ESPP, the total number shares of common stock available for issuance under the ESPP will automatically increase annually on January 1 by the lesser of (i) 1% of the total number of issued and outstanding shares of common stock as of December 31 of the immediately preceding year, or (ii) 621,814 shares of common stock. On January 1, 2014, the total number of shares of common stock available for issuance under the ESPP was automatically increased by 313,545 shares, which number is included in the number of shares reserved for issuance above. As of December 31, 2014, we have issued a total of 63,864 shares of common stock under the ESPP.

Information with respect to stock options outstanding is as follows:


	December 31,
	2014		2013		2012
Exercisable options		1,393,729		1,203,885		1,094,573
Weighted average exercise price per share of exercisable options	$	1.01	$	0.59	$	0.59
Weighted average grant date fair value per share of options granted during the year	$	7.39	$	3.78	$	0.34
Options available for future grants		2,583,186		2,403,368		753,692
Weighted average remaining contractual life		6.43		5.72		7.79

The following table summarizes stock option activity for the years ended December 31, 2014 and 2013:


				Weighted-
		Weighted-		Average
		Average		Remaining
		Exercise		Contractual	Aggregate
	Number of	Price		Term	Intrinsic Value
	Shares	(Per Share)(1)		(in years)	(in thousands)(2)
Balances at December 31, 2012	1,304,848	$	0.59	7.79
Options granted	517,062		4.29
Options canceled	(5,305)		0.59
Options exercised(3)	(22,391)		0.59
Balances at December 31, 2013	1,794,214		1.66	5.72	$	13,429
Options granted	1,049,521		10.99
Options forfeited	(1,000)		10.31
Options exercised(3)	(15,941)		0.59
Balances at December 31, 2014	2,826,794	$	5.12	6.43	$	30,863
As of December 31, 2014:
Options vested and expected to vest	2,531,221	$	4.72	6.12	$	28,642
Exercisable	1,393,729	$	1.01	3.68	$	20,949

(1)

The weighted average exercise price per share is determined using exercise price per share for stock options.

(2)

The aggregate intrinsic value is calculated as the difference between the exercise price of the option and the fair value of our common stock for in‑ the‑money options at December 31, 2014.

(3)

The total intrinsic value of stock options exercised was $155,000 and $191,000 for the years ended December 31, 2014 and 2013 respectively. There were no option exercises in 2012.

The stock options outstanding and exercisable by exercise price at December 31, 2014 are as follows:


Stock Options Outstanding					Stock Options Exercisable
		Weighted-
		Average
		Remaining	Weighted-			Weighted-
Range of		Contractual	Average			Average
Exercise	Number of	Term	Exercise Price		Number of	Exercise Price
Prices	Shares	(in years)	Per Share		Shares	Per Share
$0.59 - $4.25	1,763,294	4.71	$	1.63	1,388,779	$	0.99
$4.25 - $8.56	55,000	9.28	$	7.73	4,950	$	5.50
$9.26 – 16.52	1,008,500	9.28	$	11.1	—	$	—
	2,826,794	6.43	$	5.12	1,393,729	$	1.01

We estimated the fair value of employee and non‑employee awards using the Black‑Scholes valuation model. The fair value of employee stock options is being amortized on a straight‑line basis over the requisite service period of the awards. Management’s estimates the probability of non‑employee awards being vested based upon an evaluation of the non‑employee achieving their specific performance goals.

Options granted after our Initial Public Offering, are issued at the fair market value of our stock at the date the grant is approved by our board of directors. For 2013 options granted prior to our Initial Public Offering, we used and estimated fair value of $4.25 per share as determined by the board of directors based on input from management. For the options granted in the year ended December 31, 2012, we used an estimated fair value per share of $0.59, originally determined by our Board of Directors as of December 31, 2009. For options granted prior to 2012, we used the capital asset valuation model to determine fair value with the following key assumptions: junior nature of the common stock to outstanding convertible preferred stock and convertible preferred promissory notes, conversion dilution, minority status and the illiquid nature of our common stock.

The fair value of employee stock options was estimated using the following weighted average assumptions for the years ended December 31, 2014, 2013 and 2012


	Options
	2014		2013		2012
Common stock fair value per share	$	8.56 - 16.52	$	5.50	$	0.59
Expected volatility		77.4%		86.7%		63.7%
Risk-free interest rate		1.67% - 1.96%		0.9% – 2.1%		2.68%
Expected dividend yield		—		—		—
Expected term (in years)		6.0		6.0		6.0


	ESPP
	Year Ended
	December 31,
	2014	2013	2012
Expected term (years)	0.5 - 2.0	—	—
Expected volatility	70.6% - 71.8%	—	—
Risk-free interest rate	.06% - .46%	—	—
Expected dividend yield	—	—	—

Total employee, director and non‑employee stock‑based compensation expense recognized was as follows:


	Years Ended
	December 31,
(In thousands)	2014		2013		2012
General and administrative	$	848	$	40	$	19
Research and development		1,013		158		10
	$	1,861	$	198	$	29

The expected term of stock options represents the average period the stock options are expected to remain outstanding. The expected stock price volatility for our stock options for the years ended December 31, 2014, 2013 and 2012 was determined by examining the historical volatilities for industry peers and adjusting for differences in our life cycle and financing leverage. Industry peers consist of several public companies in the biopharmaceutical industry.

We determined the average expected life of stock options based on the simplified method because our common stock has not been publicly traded for an extended period and we do not have a track record of establishing the volatility. For all option grants prior to our Initial Public Offering we were a privately held company.

The risk‑free interest rate assumption is based on the U.S. Treasury instruments whose term was consistent with the expected term of our stock options.

The expected dividend assumption is based on our history and expectation of dividend payouts.

At December 31, 2014, 2013 and 2012, the unamortized compensation expense related to unvested stock options was $7.6 million, $895,000 and $26,000, respectively. The remaining unamortized compensation expense will be recognized over the next 3.57 years At December 31, 2014, the unamortized compensation expense of $204,000 under our ESPP will be recognized in the next year.

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

+ References+ Details

Commitments and Contingencies

12 Months Ended

Dec. 31, 2014

Commitments and Contingencies

Commitments and Contingencies

7. Commitments and Contingencies

Although we may be involved from time to time in litigation incidental to our business, we are not currently aware of any ongoing, pending or threatened litigation which would have a material adverse effect on our financial position, results of operations and cash flows. However, unforeseen litigation may be initiated by us or by third parties. Such litigation could adversely affect our business, financial position and results of operations and divert our attention and resources from other matters.

In 2009, we purchased certain computer equipment under a three‑year capital lease. Total payments due under the capital lease are listed below.

In 2011, we entered into an agreement with its landlord to amend the terms of its existing facility lease in Monrovia, California. The new lease extends the term of the lease from January 2012 to April 2015 and provides for a new rent payment schedule. In January 2015, we entered into a new lease agreement for the Monrovia property the new lease replaces the previous lease and extends our lease term to June 2020 with an option to renew for an additional five year. The new lease is a non‑cancelable operating lease. We are responsible for other lease related costs such as personal property taxes, insurance, maintenance and utilities.

In May 2014 we entered into a lease for office space in San Diego, California. The lease term is for 26 months with an option to renew for an additional year. The total payments under the lease are approximately $200,000.

Future minimum payments under the non‑cancelable operating and capital leases consist of the following at December 31, 2014 (in thousands):


	Capital
	Equipment		Operating
Years ending December 31,	Lease		Leases
2015	$	2	$	398
2016		—		598
2017		—		547
2018		—		564
2019		—		581
Thereafter		—		299
Total	$	2	$	2,987

Net rent expense for the years ended December 31, 2014 and 2013 was $597,000 and $547,000 respectively.

Guarantees

In the normal course of business, we indemnify certain employees and other parties, such as collaboration partners and other parties that perform certain work on behalf of, or for the Company or take licenses to our technologies. hawse have agreed to hold these parties harmless against losses arising from our breach of representations or covenants, intellectual property infringement or other claims made against these parties in performance of their work with us.

These agreements typically limit the time within which the party may seek indemnification by us and the amount of the claim. It is not possible to prospectively determine the maximum potential amount of liability under these indemnification agreements since we have not had any prior indemnification claims on which to base the calculation. Further, each potential claim would be based on the unique facts and circumstances of the claim and the particular provisions of each agreement. We are not aware of any potential claims and did not record a liability as of December 31, 2014 and 2013.

- Definition

The entire disclosure for commitments and contingencies.

+ References+ Details

Related Parties	12 Months Ended
Related Parties	Dec. 31, 2014
Related Parties
Related Parties	9. Related Parties On September 4, 2013, our Board of Directors authorized the forgiveness of the outstanding principal and interest of approximately $166,000, under the promissory note from our Chief Executive Officer, effective and contingent upon the filing of a registration statement on Form S‑1 for our initial public offering with the U.S. Securities and Exchange Commission.

- Definition

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References+ Details

Convertible Promissory Notes and Conversion of Convertible Preferred Stock

12 Months Ended

Dec. 31, 2014

Conversion of Convertible Promissory Notes and Preferred Stock

Conversion of Convertible Promissory Notes and Preferred Stock

10. Conversion of Convertible Promissory Notes and Preferred Stock

In June 2013, our Board of Directors and the requisite holders of the 2009 Notes and 2010 Notes and requisite preferred stockholders agreed to a series of transactions as follows:

an exchange of the outstanding principal due on the 2009 Notes and 2010 Notes for shares of Series A‑1 convertible preferred stock and cancellation of the accrued and unpaid interest thereon, pursuant to a Note Conversion Agreement;

an exchange of the current outstanding shares of Preferred Series A—E for Series A‑1 convertible preferred stock pursuant to the operation of provisions in our amended and restated certificate of incorporation;

the sale of an additional $10.0 million in Series A‑1 convertible preferred stock to existing stockholders; and

the conversion of certain shares of Series A‑1 convertible preferred stock into shares of Series A‑2 convertible preferred stock at a conversion rate of 1 for 3, pursuant to a mandatory conversion provision (e.g. a “pay to play” provision) in our amended and restated certificate of incorporation.

The primary business purpose for this series of transactions was to raise an additional $10 million of capital from the sale of shares of our Series A‑1 convertible preferred stock (the financing). The exchange of Notes, cancellation of interest, restatement of our certificate of incorporation to effect the exchange of Preferred Series A—E for Series A‑1 convertible preferred stock and the conversion of certain shares of Series A‑1 convertible preferred stock for shares of Series A‑2 convertible preferred stock were each negotiated aspects of, and conditions to, the financing. When considering the terms for the financing, our Board of Directors took these conditions into account and, ultimately, determined that the financing was in the best interests of the Company and our stockholders. Subsequent to approval of the financing by our Board of Directors, the requisite stockholders and holders of the Notes also approved this series of transactions.

Under the terms of the Note Conversion Agreement, the total outstanding principal due on the Notes as of June 13, 2013 was exchanged for 45,902,321 shares of Series A‑1 convertible preferred stock, 5,303,597 of which were subsequently converted into 1,766,097 shares of Series A‑2 convertible preferred stock. We determined that the per share fair value of the shares of Series A‑1 convertible preferred stock issued was $1.54 and the total fair value of the issued shares under the Note Conversion Agreement was $70.7 million and we recognized a loss on the exchange of $48.6 million for the difference in the fair value of the shares of Series A‑1 convertible preferred stock and the carrying value of the Notes as of June 13, 2013.

The $48.6 million loss is reported on our Statement of Operation as a Loss on Settlement of Notes as an Other Expense for the year ended December 31, 2013. Associated transaction costs of $41,000 related to the exchange were expensed.

After the exchange of the Notes, the outstanding shares of Preferred Series A—E were exchanged for 1,977,137 shares of Series A‑1 convertible preferred stock, 257,409 of which were subsequently converted into 85,717 shares of Series A‑2 convertible preferred stock. We determined the fair value of the shares of Series A‑1 convertible preferred stock issued to be $3.0 million and we recorded a deemed contribution to equity of $140.6 million equal to the difference in the fair value of the shares issued and the carrying value of the existing shares of Preferred Series A—E. We record issuance costs related to our preferred stock sales as a reduction to paid‑in capital at the time the preferred securities are issued and reflect the carrying value of the preferred stock at the aggregate issuance price. We record these issuances as a non‑cash equity distribution at the date of redemption. The deemed contribution has been adjusted to reflect $3.0 million of original issuance costs of the Preferred Series A—E.

We determined that the value of the Series A‑2 convertible preferred stock to be $0.58 per share. A total of 1,851,814 shares of Series A‑2 convertible preferred stock with a fair value of $1.1 million were issued in exchange for 5,561,006 shares of Series A‑1 convertible preferred stock with the fair value of $8.6 million. We recognized a deemed contribution of $7.5 million for the difference in the fair value of the shares of Series A‑2 convertible preferred stock issued in exchange for the shares of Series A‑1 convertible preferred stock.

On June 26, 2013 we sold 5,586,510 shares of additional Series A‑1 convertible preferred stock to existing stockholders at a purchase price of $1.36 per share for aggregate proceeds of $7.6 million. We determined that the fair value of the shares sold in June 2013 to be $8.6 million and we recorded a deemed dividend of $1.0 million for the difference in the sales price of the Series A‑1 convertible preferred stock and the fair value of the shares. The $40,000 of transaction costs related to the sale was recorded against Additional Paid in Capital.

We determined that the fair value of the Series A‑1 and Series A‑2 convertible preferred stock as of June 26, 2013 was $1.54 and $0.58, respectively. We used the probability‑weighted expected return method (PWERM) to determine the fair value of the shares of the Series A‑1 and A‑2 convertible preferred stock. PWERM is a scenario‑based analysis that estimates the value per share based on the probability‑weighted present value of expected future investment returns, considering each of the possible outcomes available to us, as well as the economic and control rights of each share class.

On September 23, 2013 we sold 1,766,430 additional shares of Series A‑1 convertible preferred stock for gross proceeds of $2.4 million at a purchase price of $1.36 per share. We determined the fair value of the shares of Series A‑1 convertible preferred stock sold to be $4.7 million, based on a per share fair value of $2.69, determined by estimating the enterprise value of the Company based on a projected offering price in an initial public offering, and we recorded a deemed dividend of $2.3 million for the difference in the sales price of the Series A‑1 convertible preferred stock and the fair value of the shares. Transaction costs of $34,000 related to the sale were recorded against Additional Paid in Capital.

Subsequent Events	12 Months Ended
Subsequent Events	Dec. 31, 2014
Subsequent Events
Subsequent Events	12. Subsequent Events We completed an evaluation of all subsequent events through the date the financial statements were issued to ensure that this filing includes appropriate disclosure of events both recognized in the December 31, 2014 financial statements and events which occurred but were not recognized in the financial statements. In January 2015, we entered into a new lease agreement for the Monrovia property. The new lease agreement replaces the existing lease, is effective January 1, 2015 and extends the term of the lease to June 2020. The lease includes an option to renew at our discretion for an additional five years at the prevailing market rate. The total payments under the new lease are $2.8 million. We are also obligated for other lease related costs such as personal property taxes, insurance, maintenance and utilities.

Condensed Quarterly Financial Data (unaudited)

12 Months Ended

Dec. 31, 2014

Condensed Quarterly Financial Data (unaudited)

Condensed Quarterly Financial Data (unaudited)

13. Condensed Quarterly Financial Data (unaudited)

The following table contains selected unaudited financial data for each quarter of 2014 and 2013. The unaudited information should be read in conjunction with the Company’s financial statements and related notes included elsewhere in this report. The Company believes that the following information reflects all normal recurring adjustments necessary for a fair presentation of the information for the periods presented. The operating results for any quarter are not necessarily indicative of results for any future period.

Quarterly Financial Data (in thousands, except per share data):


	2014 Quarter Ended
	March 31,		June 30,		September 30,		December 31,
Total revenue	$	2,184	$	824	$	848	$	5,664
Loss from operations		(3,767)		(5,053)		(6,287)		(1,350)
Net loss		(3,751)		(5,044)		(6,278)		(1,349)
Basic net loss per common share		(0.12)		(0.16)		(0.20)		(0.04)
Diluted net loss per common share	$	(0.12)	$	(0.16)	$	(0.20)	$	(0.04)


	2013 Quarter Ended
	March 31,		June 30,			September 30,		December 31,
Total revenue	$	1,345	$		3,921	$	3,161	$	1,745
Loss from operations		(3,961)			(1,006)		(1,843)		(3,710)
Net loss		(4,612)			(50,109)		(1,835)		(3,703)
Basic net loss per common share		(63.78)		1,341.67			(57.87)		(0.37)
Diluted net loss per common share	$	(63.78)	$		(3.88)	$	(57.87)	$	(0.37)

- Definition

The entire disclosure for the quarterly financial data in the annual financial statements. The disclosure may include a tabular presentation of financial information for each fiscal quarter for the current and previous year, including revenues, gross profit, income or loss before extraordinary items and earnings per share data. It also includes an indication if the information in the note is unaudited, comments on the aggregate effect of year-end adjustments, and an explanation of matters or transactions that affect comparability or are pertinent to an understanding of the information furnished.

+ References+ Details

Summary of Significant Accounting Policies (Polices)

12 Months Ended

Dec. 31, 2014

Summary of Significant Accounting Policies

Basis of Presentation

Reverse Stock Split and Conversion of Preferred Stock

Use of Estimates

Recent Accounting Pronouncements

The Company is evaluating the effect that ASU 2014-09 will have on its financial statements and related disclosures.

Revenue Recognition

Collaborative Research and Licensing Agreements

Novo Nordisk A/S

During the year ended December 31, 2014 we recognized $0.1 million in revenue related to the arrangement; as of December 31, 2014 we have $2.9 million in deferred revenue related to the agreement.

MorphoSys Ag

Alexion Pharmaceuticals, Inc.

Amgen, Inc.

MedImmune LLC

Boehringer Ingelheim International GmbH

Janssen, Research & Development, LLC

CSL Limited

Merck Sharp & Dohme Corp.


	Potential Milestones (in millions) (1)
							Total
Partner	Development-based		Regulatory-based		Sales-based		Milestones
MorphoSys	$	62.0	$	187.0	$	50.0	$	299.0
Alexion		51.0		168.0		180.0		399.0
BI		9.0		6.0		12.0		27.0
CSL 2009		6.0		4.0		5.0		15.0
CSL 2013		8.0		4.0		24.5		36.5
Merck		3.5		6.0		—		9.5
Novo Nordisk		36.3		51.0		80.0		167.3
Janssen		6.0		—		4.0		10.0
Total	$	181.8	$	426.0	$	355.5	$	963.3

(1)

The payments are solely dependent upon activities of the collaborative partner or licensee.


	Year Ended December 31,
	Year Ended December 31,
	2014		2013		2012
Amgen	$	6.9	$	2.2	$	1.8
MorphoSys		—		3.0		2.0
Janssen		—		—		1.4
Merck		0.6		1.0		—
Alexion		1.0		0.9		—
CSL		0.7		2.9		1.8
BI		—		—		1.2
Other		0.3		0.2		1.3
Total	$	9.5	$	10.2	$	9.5

As of December 31, 2014 and 2013 our accounts receivable included $3.0 million and $0.1 million from Novo Nordisk A/S and MorphoSys AG respectively.


	Year Ended
	December 31,
	2014		2013		2012
U.S. Revenue	$	8.6	$	4.2	$	4.4
Non-U.S. Revenue		0.9		6.0		5.1
Total	$	9.5	$	10.2	$	9.5

Deferred Revenue


	Year Ended
	December 31,
	2014		2013		2012
U.S. Revenue	$	8.6	$	4.2	$	4.4
Non-U.S. Revenue		0.9		6.0		5.1
Total	$	9.5	$	10.2	$	9.5

Deferred Revenue

Research and Development Expenses

Cash and Cash Equivalents

We consider cash equivalents to be only those investments which are highly liquid, readily convertible to cash and which mature within three months from the date of purchase.

Concnetrations of Risk

Concentrations of Risk

Fair Value of Financial Instruments

Level 1—Quoted prices in active markets for identical assets or liabilities;

Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

There are no fair value assets or liabilities.

Property and Equipment



Computers, software and equipment		3 - 5 years
Furniture and fixtures		5 - 7 years
Leasehold improvements		5 - 7 years or remaining
		lease term, whichever is less

Patents, Licenses, and Other Intangible Assets

The carrying amount and accumulated amortization of patents, licenses, and other intangibles is as follows (in thousands):


	December 31,
	2014		2013
Patents, definite life	$	5,720	$	4,834
Patents, pending issuance		3,654		3,515
Licenses and other amortizable intangible assets		1,797		1,917
Nonamortizable intangible assets (trademarks)		400		369
Total gross carrying amount		11,571		10,635
Accumulated amortization—patents		(1,776)		(1,395)
Accumulated amortization—licenses and other		(679)		(426)
Total intangible assets, net	$	9,116	$	8,814

Amortization expense for patents, licenses, and other intangible assets was $694,000, $598,000 and $373,000 for the years ended December 31, 2014, 2013 and 2012, respectively.

Future amortization expense for patents, licenses, and other intangible assets recorded as of December 31, 2014, and for which amortization has commenced, is as follows:


	Years ending
	December 31,
	(in thousands)
2015	$	535
2016		538
2017		538
2018		527
2019		515
Thereafter		2,408
Total	$	5,061

Long-Lived Assets

Long‑Lived Assets

Income Taxes

Our policy is to recognize interest and penalties on taxes, if any, as a component of income tax expense. We did not have any uncertain tax positions at December 31, 2014 or 2013.

We are potentially subject to tax authority audits for the years 2011 and onwards for U.S. federal purposes and 2010 and onwards for state purposes.

Stock-Based Compensation

Stock‑Based Compensation

Net Loss Per Share


	Year Ended
	December 31,
	2014	2013	2012
	(in thousands)
Convertible preferred stock	—	—	12,188
Convertible promissory notes	—	—	2,800
Options to purchase common stock	2,827	1,794	1,305
Employee stock purchase plan shares	25	—	—
Total	2,852	1,794	16,293

For 2013, the diluted loss per share calculation assumes the conversion of outstanding shares of convertible preferred stock into common stock using the as‑if converted method.


	Year Ended December 31
	2014			2013			2012
	(in thousands, except
	per share data)
Basic
Numerator:
Net loss	$		(16,422)	$		(60,259)	$	(8,594)
Deemed contribution			—			144,765		—
Net income (loss) attributable to common stockholders for basic income per share	$		(16,422)	$		84,506	$	(8,594)
Denominator:
Weighted-average common shares outstanding		31,390,631				2,472,581		72,302
Basic net income (loss) per common share	$		(0.52)	$		34.18	$	(118.86)
Diluted:
Numerator:
Net income (loss) attributable to common stockholders for basic net loss per share	$		(16,422)	$		84,506	$	(8,594)
Deemed contribution			—			(144,765)		—
Net loss attributable to common stockholders for diluted net loss per share	$		(16,422)	$		(60,259)	$	(8,594)
Denominator:
Weighted average number of common shares outstanding used in computing basic net (loss) income per common share		31,390,631				2,472,581		72,302
Dilutive effect of conversion of convertible preferred stock			—		13,173,208			—
Weighted-average number of common shares outstanding used in computing net loss per common share		31,390,631			15,645,789			72,302
Diluted net loss per common share	$		(0.52)	$		(3.85)	$	(118.86)

Segment Reporting


	Year Ended December 31
	2014			2013			2012
	(in thousands, except
	per share data)
Basic
Numerator:
Net loss	$		(16,422)	$		(60,259)	$	(8,594)
Deemed contribution			—			144,765		—
Net income (loss) attributable to common stockholders for basic income per share	$		(16,422)	$		84,506	$	(8,594)
Denominator:
Weighted-average common shares outstanding		31,390,631				2,472,581		72,302
Basic net income (loss) per common share	$		(0.52)	$		34.18	$	(118.86)
Diluted:
Numerator:
Net income (loss) attributable to common stockholders for basic net loss per share	$		(16,422)	$		84,506	$	(8,594)
Deemed contribution			—			(144,765)		—
Net loss attributable to common stockholders for diluted net loss per share	$		(16,422)	$		(60,259)	$	(8,594)
Denominator:
Weighted average number of common shares outstanding used in computing basic net (loss) income per common share		31,390,631				2,472,581		72,302
Dilutive effect of conversion of convertible preferred stock			—		13,173,208			—
Weighted-average number of common shares outstanding used in computing net loss per common share		31,390,631			15,645,789			72,302
Diluted net loss per common share	$		(0.52)	$		(3.85)	$	(118.86)

Segment Reporting

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2014

Summary of Significant Accounting Policies

Schedule of receivables from maximum payments from collaborative partners and licensees


	Potential Milestones (in millions) (1)
							Total
Partner	Development-based		Regulatory-based		Sales-based		Milestones
MorphoSys	$	62.0	$	187.0	$	50.0	$	299.0
Alexion		51.0		168.0		180.0		399.0
BI		9.0		6.0		12.0		27.0
CSL 2009		6.0		4.0		5.0		15.0
CSL 2013		8.0		4.0		24.5		36.5
Merck		3.5		6.0		—		9.5
Novo Nordisk		36.3		51.0		80.0		167.3
Janssen		6.0		—		4.0		10.0
Total	$	181.8	$	426.0	$	355.5	$	963.3

(1)

The payments are solely dependent upon activities of the collaborative partner or licensee.

Schedule of revenue by licensees


	Year Ended December 31,
	Year Ended December 31,
	2014		2013		2012
Amgen	$	6.9	$	2.2	$	1.8
MorphoSys		—		3.0		2.0
Janssen		—		—		1.4
Merck		0.6		1.0		—
Alexion		1.0		0.9		—
CSL		0.7		2.9		1.8
BI		—		—		1.2
Other		0.3		0.2		1.3
Total	$	9.5	$	10.2	$	9.5

Schedule of revenue from U.S. and Non U.S. sources

A breakdown of our revenue from U.S. and Non‑U.S. sources for the years ended December 31, 2014, 2013 and 2012 is as follows (in millions):


	Year Ended
	December 31,
	2014		2013		2012
U.S. Revenue	$	8.6	$	4.2	$	4.4
Non-U.S. Revenue		0.9		6.0		5.1
Total	$	9.5	$	10.2	$	9.5

Schedule of useful lives by asset category



Computers, software and equipment		3 - 5 years
Furniture and fixtures		5 - 7 years
Leasehold improvements		5 - 7 years or remaining
		lease term, whichever is less

Schedule of carrying amount and accumulated amortization of patents, licenses, and other intangibles

The carrying amount and accumulated amortization of patents, licenses, and other intangibles is as follows (in thousands):


	December 31,
	2014		2013
Patents, definite life	$	5,720	$	4,834
Patents, pending issuance		3,654		3,515
Licenses and other amortizable intangible assets		1,797		1,917
Nonamortizable intangible assets (trademarks)		400		369
Total gross carrying amount		11,571		10,635
Accumulated amortization—patents		(1,776)		(1,395)
Accumulated amortization—licenses and other		(679)		(426)
Total intangible assets, net	$	9,116	$	8,814

Future amortization expense for patents, licenses, and other intangible assets


	Years ending
	December 31,
	(in thousands)
2015	$	535
2016		538
2017		538
2018		527
2019		515
Thereafter		2,408
Total	$	5,061

Schedule of potentially dilutive securities excluded from the calculation of diluted net loss per share as the effect would have been antidilutive


	Year Ended
	December 31,
	2014	2013	2012
	(in thousands)
Convertible preferred stock	—	—	12,188
Convertible promissory notes	—	—	2,800
Options to purchase common stock	2,827	1,794	1,305
Employee stock purchase plan shares	25	—	—
Total	2,852	1,794	16,293

Schedule of calculation of diluted loss per shares


	Year Ended December 31
	2014			2013			2012
	(in thousands, except
	per share data)
Basic
Numerator:
Net loss	$		(16,422)	$		(60,259)	$	(8,594)
Deemed contribution			—			144,765		—
Net income (loss) attributable to common stockholders for basic income per share	$		(16,422)	$		84,506	$	(8,594)
Denominator:
Weighted-average common shares outstanding		31,390,631				2,472,581		72,302
Basic net income (loss) per common share	$		(0.52)	$		34.18	$	(118.86)
Diluted:
Numerator:
Net income (loss) attributable to common stockholders for basic net loss per share	$		(16,422)	$		84,506	$	(8,594)
Deemed contribution			—			(144,765)		—
Net loss attributable to common stockholders for diluted net loss per share	$		(16,422)	$		(60,259)	$	(8,594)
Denominator:
Weighted average number of common shares outstanding used in computing basic net (loss) income per common share		31,390,631				2,472,581		72,302
Dilutive effect of conversion of convertible preferred stock			—		13,173,208			—
Weighted-average number of common shares outstanding used in computing net loss per common share		31,390,631			15,645,789			72,302
Diluted net loss per common share	$		(0.52)	$		(3.85)	$	(118.86)

Property and Equipment (Tables)

12 Months Ended

Dec. 31, 2014

Property and Equipment

Schedule of property and equipment


	December 31,
	2014		2013
	(In thousands)
Computers, software and equipment	$	4,270	$	3,514
Furniture and fixtures		97		89
Leasehold and tenant improvements		3,086		3,081
		7,453		6,684
Less accumulated depreciation and amortization		(6,554)		(6,377)
	$	899	$	307

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2014

Income Taxes

Reconciliation of the federal statutory income tax rate to our effective income tax rate


	Year Ended
	December 31,
	2014		2013		2012
Federal statutory income tax rate	$	(5,583)	$	(20,488)	$	(2,922)
Loss on settlement of notes		—		18,884		—
Non-deductible research and development credit		435		—		336
Stock based compensation		478		—		—
Other		2		4		12
Net change in valuation allowance		4,668		1,600		2,574
Net effective tax rate	$	—	$	—	$	—

Schedule of tax effect of temporary differences that give rise to a significant portion of the deferred tax assets and liabilities


	2014		2013
Deferred income tax assets
Net operating loss carryforwards	$	47,401	$	58,286
Research credits		12,789		24,276
Depreciation		790		849
Stock-based compensation		—		52
Accrued compensation		373		137
Deferred revenue		1,836		3,899
Gross deferred income tax assets		63,189		87,499
Valuation allowance		(59,602)		(84,045)
Net deferred income tax assets		3,587		3,454
Deferred income tax liabilities
Patent costs		(3,199)		(2,929)
Licensing costs		(317)		(406)
Capitalized legal costs		(71)		(119)
Gross deferred income tax liabilities		(3,587)		(3,454)
Net deferred income tax asset/(liability)	$	—	$	—

Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2014

Stock-Based Compensation

Schedule of stock options outstanding


	December 31,
	2014		2013		2012
Exercisable options		1,393,729		1,203,885		1,094,573
Weighted average exercise price per share of exercisable options	$	1.01	$	0.59	$	0.59
Weighted average grant date fair value per share of options granted during the year	$	7.39	$	3.78	$	0.34
Options available for future grants		2,583,186		2,403,368		753,692
Weighted average remaining contractual life		6.43		5.72		7.79

Summary of stock option activity


				Weighted-
		Weighted-		Average
		Average		Remaining
		Exercise		Contractual	Aggregate
	Number of	Price		Term	Intrinsic Value
	Shares	(Per Share)(1)		(in years)	(in thousands)(2)
Balances at December 31, 2012	1,304,848	$	0.59	7.79
Options granted	517,062		4.29
Options canceled	(5,305)		0.59
Options exercised(3)	(22,391)		0.59
Balances at December 31, 2013	1,794,214		1.66	5.72	$	13,429
Options granted	1,049,521		10.99
Options forfeited	(1,000)		10.31
Options exercised(3)	(15,941)		0.59
Balances at December 31, 2014	2,826,794	$	5.12	6.43	$	30,863
As of December 31, 2014:
Options vested and expected to vest	2,531,221	$	4.72	6.12	$	28,642
Exercisable	1,393,729	$	1.01	3.68	$	20,949

Schedule of stock options outstanding and exercisable by exercise price


Stock Options Outstanding					Stock Options Exercisable
		Weighted-
		Average
		Remaining	Weighted-			Weighted-
Range of		Contractual	Average			Average
Exercise	Number of	Term	Exercise Price		Number of	Exercise Price
Prices	Shares	(in years)	Per Share		Shares	Per Share
$0.59 - $4.25	1,763,294	4.71	$	1.63	1,388,779	$	0.99
$4.25 - $8.56	55,000	9.28	$	7.73	4,950	$	5.50
$9.26 – 16.52	1,008,500	9.28	$	11.1	—	$	—
	2,826,794	6.43	$	5.12	1,393,729	$	1.01

Schedule of weighted average assumptions used for estimation of fair value of stock options


	Options
	2014		2013		2012
Common stock fair value per share	$	8.56 - 16.52	$	5.50	$	0.59
Expected volatility		77.4%		86.7%		63.7%
Risk-free interest rate		1.67% - 1.96%		0.9% – 2.1%		2.68%
Expected dividend yield		—		—		—
Expected term (in years)		6.0		6.0		6.0

Schedule of weighted average assumptions used for estimation of fair value of ESPP


	ESPP
	Year Ended
	December 31,
	2014	2013	2012
Expected term (years)	0.5 - 2.0	—	—
Expected volatility	70.6% - 71.8%	—	—
Risk-free interest rate	.06% - .46%	—	—
Expected dividend yield	—	—	—

Schedule of total employee, director and non-employee stock-based compensation expense recognized


	Years Ended
	December 31,
(In thousands)	2014		2013		2012
General and administrative	$	848	$	40	$	19
Research and development		1,013		158		10
	$	1,861	$	198	$	29

Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2014

Commitments and Contingencies

Schedule of future minimum payments under the non-cancelable operating and capital leases

Future minimum payments under the non‑cancelable operating and capital leases consist of the following at December 31, 2014 (in thousands):


	Capital
	Equipment		Operating
Years ending December 31,	Lease		Leases
2015	$	2	$	398
2016		—		598
2017		—		547
2018		—		564
2019		—		581
Thereafter		—		299
Total	$	2	$	2,987

Condensed Quarterly Financial Data (unaudited) (Tables)

12 Months Ended

Dec. 31, 2014

Condensed Quarterly Financial Data (unaudited)

Schedule of Quarterly Financial Data


	2014 Quarter Ended
	March 31,		June 30,		September 30,		December 31,
Total revenue	$	2,184	$	824	$	848	$	5,664
Loss from operations		(3,767)		(5,053)		(6,287)		(1,350)
Net loss		(3,751)		(5,044)		(6,278)		(1,349)
Basic net loss per common share		(0.12)		(0.16)		(0.20)		(0.04)
Diluted net loss per common share	$	(0.12)	$	(0.16)	$	(0.20)	$	(0.04)


	2013 Quarter Ended
	March 31,		June 30,			September 30,		December 31,
Total revenue	$	1,345	$		3,921	$	3,161	$	1,745
Loss from operations		(3,961)			(1,006)		(1,843)		(3,710)
Net loss		(4,612)			(50,109)		(1,835)		(3,703)
Basic net loss per common share		(63.78)		1,341.67			(57.87)		(0.37)
Diluted net loss per common share	$	(63.78)	$		(3.88)	$	(57.87)	$	(0.37)

Summary of Significant Accounting Policies (Details) (USD $) In Millions, except Share data, unless otherwise specified	0 Months Ended		0 Months Ended	12 Months Ended			0 Months Ended	12 Months Ended
	Nov. 01, 2013	Dec. 31, 2014	Dec. 03, 2013 Series A-1 Convertible Preferred Stock	Dec. 31, 2013 Series A-1 Convertible Preferred Stock	Dec. 03, 2013 Series A-1 Convertible Preferred Stock	Jun. 26, 2013 Series A-1 Convertible Preferred Stock	Dec. 03, 2013 Series A-2 Convertible Preferred Stock	Dec. 31, 2013 Series A-2 Convertible Preferred Stock	Dec. 03, 2013 Series A-2 Convertible Preferred Stock	Jun. 26, 2013 Series A-2 Convertible Preferred Stock
Fair value of financial instruments
Assets recorded at fair value		$ 0
Liabilities recorded at fair value		$ 0
Reverse Stock Split and Conversion of Preferred Stock
Reverse stock split ratio	3.1
Conversion of Stock, Shares Converted			49,671,392	(49,671,392)			1,851,814	(1,851,814)
Exchange of Series A-1 and A-2 preferred for common stock (in shares)					16,022,915	5,561,006			597,359	1,851,814

Summary of Significant Accounting Policies (Details 2) (USD $)	3 Months Ended								12 Months Ended									0 Months Ended		1 Months Ended		12 Months Ended
	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2014 segment item	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2012 Convertible preferred stock	Dec. 31, 2012 Convertible Promissory Notes	Dec. 31, 2014 Employee stock options	Dec. 31, 2013 Employee stock options	Dec. 31, 2012 Employee stock options	Dec. 31, 2014 Employee Stock Purchase Plan	Sep. 23, 2013 Series A-1 Convertible Preferred Stock	Jun. 26, 2013 Series A-1 Convertible Preferred Stock	Sep. 30, 2013 Series A-1 Convertible Preferred Stock	Jun. 30, 2013 Series A-1 Convertible Preferred Stock	Dec. 31, 2013 Series A-1 Convertible Preferred Stock
Outstanding potentially dilutive securities have been excluded from the computations of diluted net loss per common share
Anti-dilutive securities (in shares)									2,852,000	1,794,000	16,293,000	12,188,000	2,800,000	2,827,000	1,794,000	1,305,000	25,000
Deemed dividend (in dollars)										$ (3,429,000)								$ 2,300,000	$ 1,000,000		$ 1,000,000
Deemed contribution																				2,300,000
Basic numerator:
Net loss	(1,349,000)	(6,278,000)	(5,044,000)	(3,751,000)	(3,703,000)	(1,835,000)	(50,109,000)	(4,612,000)	(16,422,000)	(60,259,000)	(8,594,000)
Deemed contribution (distribution) on exchange of preferred stock										144,765,000
Net income (loss) attributable to common stockholders for basic net income (loss) per share									(16,422,000)	84,506,000	(8,594,000)
Denominator:
Weighted average common shares outstanding									31,390,631	2,472,581	72,302
Basic net income (loss) per common share (in dollars per share)	$ (0.04)	$ (0.20)	$ (0.16)	$ (0.12)	$ (0.37)	$ (57.87)	$ 1,341.67	$ (63.78)	$ (0.52)	$ 34.18	$ (118.86)
Diluted numerator:
Net income (loss) attributable to common stockholders for basic net income (loss) per share									(16,422,000)	84,506,000	(8,594,000)
Deemed contribution										144,765,000												148,100,000
Net loss attributable to common stockholders for diluted net loss per share									(16,422,000)	(60,259,000)	(8,594,000)
Denominator
Weighted average common shares outstanding									31,390,631	2,472,581	72,302
Dilutive effect of conversion of convertible preferred stock										13,173,208
Weighted Average Number of Shares Outstanding, Diluted									31,390,631	15,645,789	72,302
Diluted net loss per common share	$ (0.04)	$ (0.20)	$ (0.16)	$ (0.12)	$ (0.37)	$ (57.87)	$ (3.88)	$ (63.78)	$ (0.52)	$ (3.85)	$ (118.86)
Segment Reporting [Abstract]
Number of Operating Segments									1
Stock-Based Compensation
Stock-based compensation expense									1,861,000	198,000	29,000						172,000
Deferred Revenue
Deferred revenue									$ 4,600,000	$ 9,700,000
Number of primary technology groups									4

Summary of Significant Accounting Policies (Details 3) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Research and Development Expense [Abstract]
Research and Development Expense	$ 18,516,000	$ 17,000,000	$ 12,668,000
Concentrations of Risk
Amounts on deposit in excess of federally insured limits approximately	$ 54,000,000	$ 77,500,000
Payables \| Service providers
Concentrations of risk
Number of service providers	1	5
Concentration risk percentage	47.00%	57.00%

- Definition

The aggregate costs incurred (1) in a planned search or critical investigation aimed at discovery of new knowledge with the hope that such knowledge will be useful in developing a new product or service, a new process or technique, or in bringing about a significant improvement to an existing product or process; or (2) to translate research findings or other knowledge into a plan or design for a new product or process or for a significant improvement to an existing product or process whether intended for sale or the entity's use, during the reporting period charged to research and development projects, including the costs of developing computer software up to the point in time of achieving technological feasibility, and costs allocated in accounting for a business combination to in-process projects deemed to have no alternative future use.

+ References+ Details

Summary of Significant Accounting Policies (Details 4) (USD $)	12 Months Ended
	Dec. 31, 2014 item	Dec. 31, 2013	Dec. 31, 2012
Patents, licenses, and other intangible assets
Number of primary criteria to determine capitalization of patent	3
Total gross carrying amount	$ 11,571,000	$ 10,635,000
Total intangible assets, net	9,116,000	8,814,000
Amortization expense for patents, licenses, and other intangible assets	694,000	598,000	373,000
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
2015	535,000
2016	538,000
2017	538,000
2018	527,000
2019	515,000
Thereafter	2,408,000
Total	5,061,000
Nonamortizable intangible assets (trademarks)
Patents, licenses, and other intangible assets
Nonamortizable intangible assets (trademarks)	400,000	369,000
Acquired licenses \| Minimum
Patents, licenses, and other intangible assets
Estimated economic life	5 years
Acquired licenses \| Maximum
Patents, licenses, and other intangible assets
Estimated economic life	25 years
Patents
Patents, licenses, and other intangible assets
Accumulated amortization	(1,776,000)	(1,395,000)
Patents \| Minimum
Patents, licenses, and other intangible assets
Estimated economic life	13 years
Patents \| Maximum
Patents, licenses, and other intangible assets
Estimated economic life	20 years
Patents, definite life
Patents, licenses, and other intangible assets
Amortizable intangible assets	5,720,000	4,834,000
Patents, pending issuance
Patents, licenses, and other intangible assets
Amortizable intangible assets	3,654,000	3,515,000
Licenses and other amortizable intangible assets
Patents, licenses, and other intangible assets
Amortizable intangible assets	1,797,000	1,917,000
Accumulated amortization	(679,000)	(426,000)
Capitalized patent and licensing
Patents, licenses, and other intangible assets
Impairment of Intangible Assets (Excluding Goodwill)	509,000	205,000	388,000
In Process Intangible Assets [Member]
Patents, licenses, and other intangible assets
Total gross carrying amount	$ 3,700,000

Summary of Significant Accounting Policies (Details 6) (USD $)	3 Months Ended								12 Months Ended						12 Months Ended						1 Months Ended	12 Months Ended																	3 Months Ended	12 Months Ended				1 Months Ended				12 Months Ended					12 Months Ended					12 Months Ended
	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2014 Development-based	Dec. 31, 2014 Regulatory-based	Dec. 31, 2014 Sales-based	Dec. 31, 2014 UNITED STATES	Dec. 31, 2013 UNITED STATES	Dec. 31, 2012 UNITED STATES	Dec. 31, 2014 Non United States [Member]	Dec. 31, 2013 Non United States [Member]	Dec. 31, 2012 Non United States [Member]	Oct. 31, 2014 Amgen, Inc.	Dec. 31, 2014 Amgen, Inc.	Dec. 31, 2013 Amgen, Inc.	Dec. 31, 2012 Amgen, Inc.	Dec. 31, 2014 MorphoSys	Dec. 31, 2013 MorphoSys	Dec. 31, 2012 MorphoSys	Dec. 31, 2014 MorphoSys Development-based	Dec. 31, 2014 MorphoSys Regulatory-based	Dec. 31, 2014 MorphoSys Sales-based	Dec. 31, 2014 Alexion Pharmaceuticals, Inc.	Dec. 31, 2014 Alexion Pharmaceuticals, Inc. Development-based	Dec. 31, 2014 Alexion Pharmaceuticals, Inc. Regulatory-based	Dec. 31, 2014 Alexion Pharmaceuticals, Inc. Sales-based	Dec. 31, 2014 BI	Dec. 31, 2014 BI Development-based	Dec. 31, 2014 BI Regulatory-based	Dec. 31, 2014 BI Sales-based	Mar. 31, 2014 Merck Sharp & Dohme Corp.	Dec. 31, 2014 Merck Sharp & Dohme Corp.	Dec. 31, 2013 Merck Sharp & Dohme Corp.	Dec. 31, 2014 Merck Sharp & Dohme Corp. Development-based	Dec. 31, 2014 Merck Sharp & Dohme Corp. Regulatory-based	Dec. 31, 2014 Novo Nordisk	Dec. 31, 2014 Novo Nordisk Development-based	Dec. 31, 2014 Novo Nordisk Regulatory-based	Dec. 31, 2014 Novo Nordisk Sales-based	Dec. 31, 2014 Janssen	Dec. 31, 2013 Janssen	Dec. 31, 2012 Janssen	Dec. 31, 2014 Janssen Development-based	Dec. 31, 2014 Janssen Sales-based	Dec. 31, 2012 2009 Research License and Commercialization Agreement CSL Limited	Dec. 31, 2014 2009 Research License and Commercialization Agreement CSL Limited	Dec. 31, 2014 2009 Research License and Commercialization Agreement CSL Limited Development-based	Dec. 31, 2014 2009 Research License and Commercialization Agreement CSL Limited Regulatory-based	Dec. 31, 2014 2009 Research License and Commercialization Agreement CSL Limited Sales-based	Dec. 31, 2014 May 2013 Research License and Commercialization Agreement CSL Limited	Dec. 31, 2013 May 2013 Research License and Commercialization Agreement CSL Limited	Dec. 31, 2012 May 2013 Research License and Commercialization Agreement CSL Limited	Dec. 31, 2014 May 2013 Research License and Commercialization Agreement CSL Limited Development-based	Dec. 31, 2014 May 2013 Research License and Commercialization Agreement CSL Limited Regulatory-based	Dec. 31, 2014 May 2013 Research License and Commercialization Agreement CSL Limited Sales-based
Revenue recognition
Total	$ 963,300,000								$ 963,300,000			$ 181,800,000	$ 426,000,000	$ 355,500,000											$ 299,000,000			$ 62,000,000	$ 187,000,000	$ 50,000,000	$ 399,000,000	$ 51,000,000	$ 168,000,000	$ 180,000,000	$ 27,000,000	$ 9,000,000	$ 6,000,000	$ 12,000,000		$ 9,500,000		$ 3,500,000	$ 6,000,000	$ 167,300,000	$ 36,300,000	$ 51,000,000	$ 80,000,000	$ 10,000,000			$ 6,000,000	$ 4,000,000		$ 15,000,000	$ 6,000,000	$ 4,000,000	$ 5,000,000	$ 36,500,000			$ 8,000,000	$ 4,000,000	$ 24,500,000
Revenue recognized	5,664,000	848,000	824,000	2,184,000	1,745,000	3,161,000	3,921,000	1,345,000	9,520,000	10,172,000	9,524,000				8,600,000	4,200,000	4,400,000	900,000	6,000,000	5,100,000	5,200,000	6,900,000	2,200,000	1,800,000	0	3,000,000	2,000,000												500,000	600,000	1,000,000			100,000				0	0	1,400,000			1,800,000					700,000	2,400,000	1,800,000
Accounts receivable	$ 2,966,000				$ 59,000				$ 2,966,000	$ 59,000																$ 100,000																		$ 3,000,000

Summary of Significant Accounting Policies (Details 7) (USD $)	3 Months Ended								12 Months Ended			1 Months Ended		2 Months Ended	12 Months Ended			1 Months Ended			12 Months Ended			1 Months Ended	3 Months Ended	12 Months Ended							1 Months Ended	12 Months Ended					1 Months Ended	12 Months Ended		1 Months Ended	12 Months Ended					1 Months Ended	12 Months Ended
	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2014 Novo Nordisk	Jun. 30, 2010 MorphoSys	May 31, 2013 MorphoSys item	Dec. 31, 2014 MorphoSys	Dec. 31, 2013 MorphoSys	Dec. 31, 2012 MorphoSys	Oct. 31, 2014 Amgen, Inc.	Jan. 31, 2013 Amgen, Inc.	Dec. 31, 2010 Amgen, Inc.	Dec. 31, 2014 Amgen, Inc.	Dec. 31, 2013 Amgen, Inc.	Dec. 31, 2012 Amgen, Inc.	Jul. 31, 2013 Merck Sharp & Dohme Corp. item	Mar. 31, 2014 Merck Sharp & Dohme Corp.	Dec. 31, 2014 Merck Sharp & Dohme Corp.	Dec. 31, 2013 Merck Sharp & Dohme Corp.	Dec. 31, 2014 Alexion Pharmaceuticals, Inc.	Dec. 31, 2014 Janssen	Dec. 31, 2013 Janssen	Dec. 31, 2012 Janssen	Dec. 31, 2009 Janssen item	Mar. 31, 2013 CSL Limited item	Dec. 31, 2014 Boehringer Ingelheim International GmbH [Member]	Dec. 31, 2013 Boehringer Ingelheim International GmbH [Member]	Dec. 31, 2012 Boehringer Ingelheim International GmbH [Member]	Dec. 31, 2007 Boehringer Ingelheim International GmbH [Member] item	Dec. 31, 2012 MedImmune L L C [Member]	Mar. 31, 2013 License Agreement CSL Limited	Dec. 31, 2014 License Agreement CSL Limited	Dec. 31, 2013 License Agreement CSL Limited	Jan. 31, 2013 Option and license agreement Alexion Pharmaceuticals, Inc. item	Dec. 31, 2014 Option and license agreement Alexion Pharmaceuticals, Inc.	Dec. 31, 2013 Option and license agreement Alexion Pharmaceuticals, Inc.	Dec. 31, 2012 2009 Research License and Commercialization Agreement CSL Limited	Dec. 31, 2009 2009 Research License and Commercialization Agreement CSL Limited item	Dec. 31, 2014 2009 Research License and Commercialization Agreement CSL Limited	May 31, 2013 May 2013 Research License and Commercialization Agreement CSL Limited	Dec. 31, 2014 May 2013 Research License and Commercialization Agreement CSL Limited	Dec. 31, 2013 May 2013 Research License and Commercialization Agreement CSL Limited	Dec. 31, 2012 May 2013 Research License and Commercialization Agreement CSL Limited	Dec. 31, 2014 Development-based	Dec. 31, 2014 Development-based Novo Nordisk	Dec. 31, 2014 Development-based MorphoSys	Dec. 31, 2014 Development-based Merck Sharp & Dohme Corp.	Dec. 31, 2014 Development-based Alexion Pharmaceuticals, Inc.	Dec. 31, 2014 Development-based Janssen	Dec. 31, 2014 Development-based 2009 Research License and Commercialization Agreement CSL Limited	Dec. 31, 2014 Development-based May 2013 Research License and Commercialization Agreement CSL Limited	Dec. 31, 2014 Regulatory-based	Dec. 31, 2014 Regulatory-based Novo Nordisk	Dec. 31, 2014 Regulatory-based MorphoSys	Dec. 31, 2014 Regulatory-based Merck Sharp & Dohme Corp.	Dec. 31, 2014 Regulatory-based Alexion Pharmaceuticals, Inc.	Dec. 31, 2014 Regulatory-based 2009 Research License and Commercialization Agreement CSL Limited	Dec. 31, 2014 Regulatory-based May 2013 Research License and Commercialization Agreement CSL Limited	Dec. 31, 2014 Sales-based	Dec. 31, 2014 Sales-based Novo Nordisk	Dec. 31, 2014 Sales-based MorphoSys	Dec. 31, 2014 Sales-based Alexion Pharmaceuticals, Inc.	Dec. 31, 2014 Sales-based Janssen	Dec. 31, 2014 Sales-based 2009 Research License and Commercialization Agreement CSL Limited	Dec. 31, 2014 Sales-based May 2013 Research License and Commercialization Agreement CSL Limited
Collaboration research and licensing agreements
Nonrefundable upfront payment												$ 2,500,000	$ 13,000,000							$ 11,000,000				$ 1,000,000								$ 1,000,000							$ 500,000			$ 3,000,000				$ 750,000
Research funding												1,600,000
Annual maintenance fees																								500,000																		500,000
Milestone payment received												2,000,000		3,000,000					2,000,000																	1,200,000									1,500,000			2,500,000
Potential milestone payment	963,300,000								963,300,000			167,300,000			299,000,000											9,500,000		399,000,000	10,000,000																		15,000,000		36,500,000			181,800,000	36,300,000	62,000,000	3,500,000	51,000,000	6,000,000	6,000,000	8,000,000	426,000,000	51,000,000	187,000,000	6,000,000	168,000,000	4,000,000	4,000,000	355,500,000	80,000,000	50,000,000	180,000,000	4,000,000	5,000,000	24,500,000
Revenue from additional services provided																	400,000
Revenue recognized	5,664,000	848,000	824,000	2,184,000	1,745,000	3,161,000	3,921,000	1,345,000	9,520,000	10,172,000	9,524,000	100,000			0	3,000,000	2,000,000	5,200,000			6,900,000	2,200,000	1,800,000		500,000	600,000	1,000,000		0	0	1,400,000			0	0					0	500,000		1,000,000	900,000	1,800,000				700,000	2,400,000	1,800,000
Deferred revenue												2,900,000			0						0					100,000			0											0			1,600,000						0
Current portion of deferred revenue	2,254,000				3,444,000				2,254,000	3,444,000
Research license revenue																															900,000							750,000								300,000
Fair value of license and options																																						750,000
Revenue from exercise of commercial option																															500,000
Research license term												2 years																				2 years					3 years					5 years			5 years
Additional research term												12 months																														3 years
Number of technologies to which research license is provided																																														1
Number of commercial options																																					1									5
Number of compounds																								1								3	1				2
Number of clinical trials initiated														2
Estimated term of service period of research and development services																				72 months
Extension fee																																										2,000,000
Annual maintenance fees payable during any extension of research term																																										1,000,000
Option term after delivery of the data from a Phase 2 proof-of-concept (POC) clinical trial																				90 days
Option fee																																										4,000,000
Number of different target programs																																										6
Milestone payment to be received for first product upon achievement of certain development, regulatory and commercial milestones																																										$ 66,500,000
Term of adavnce notice period									90 days
Termination period if the breach remains uncured																												60 days
Termination period in case of non payment breach																												30 days
Interest held (as a percent)																																						5.00%

Capital Structure (Details)	Dec. 31, 2014	Dec. 31, 2013
Capital Structure
Common Stock, shares authorized	200,000,000	200,000,000
Preferred Stock, Shares Authorized	10,000,000	10,000,000

Property and Equipment (Details) (USD $)	12 Months Ended
Property and Equipment (Details) (USD $)	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Property and equipment
Property and equipment, gross	$ 7,453,000	$ 6,684,000
Less accumulated depreciation and amortization	(6,554,000)	(6,377,000)
Property, Plant and Equipment, Net	899,000	307,000
Depreciation expense	188,000	113,000	154,000
Computers, software and equipment
Property and equipment
Property and equipment, gross	4,270,000	3,514,000
Furniture and fixtures
Property and equipment
Property and equipment, gross	97,000	89,000
Leasehold and tenant improvements
Property and equipment
Property and equipment, gross	3,086,000	3,081,000
Capital lease
Property and equipment
Property and equipment, gross	22,000	22,000
Less accumulated depreciation and amortization	(20,000)	(12,900)
Capital lease entered for computer equipment			$ 22,000

Income Taxes (Details) (USD $)	12 Months Ended
Income Taxes (Details) (USD $)	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Reconciliation of federal statutory income tax rate to effective income tax rate
Federal statutory income tax rate	$ (5,583,000)	$ (20,488,000)	$ (2,922,000)
Loss on settlement of notes		18,884,000
Non-deductible research and development credit	435,000		336,000
Stock based compensation	478,000
Other	2,000	4,000	12,000
Net change in valuation allowance	4,668,000	1,600,000	2,574,000
Net effective tax rate
Deferred income tax assets
Net operating loss carryforwards	47,401,000	58,286,000
Research credits	12,789,000	24,276,000
Depreciation	790,000	849,000
Stock-based compensation		52,000
Accrued compensation	373,000	137,000
Deferred revenue	1,836,000	3,899,000
Gross deferred income tax assets	63,189,000	87,499,000
Valuation allowance	(59,602,000)	(84,045,000)
Net deferred income tax assets	3,587,000	3,454,000
Deferred income tax liabilities
Patent costs	(3,199,000)	(2,929,000)
Licensing costs	(317,000)	(406,000)
Capitalized legal costs	(71,000)	(119,000)
Gross deferred income tax liabilities	(3,587,000)	(3,454,000)
Net deferred income tax asset/(liability)
Increase (decrease) in deferred tax asset valuation allowance		$ 3,000,000

Income Taxes (Details 2) (USD $) In Millions, unless otherwise specified	Dec. 31, 2014
Federal
Income Taxes [Line Items]
Cumulative net operating loss carryforwards	$ 169.2
Tax credit carryforwards	15.2
State
Income Taxes [Line Items]
Cumulative net operating loss carryforwards	$ 134.2

Stock-Based Compensation (Details) (USD $)	12 Months Ended				0 Months Ended	12 Months Ended		0 Months Ended	12 Months Ended	13 Months Ended		12 Months Ended
Stock-Based Compensation (Details) (USD $)	Dec. 31, 2014 Stock options	Dec. 31, 2013 Stock options	Dec. 31, 2012 Stock options	Dec. 31, 2014 The 2010 Plan	Jan. 01, 2014 The 2013 Plan	Dec. 31, 2014 The 2013 Plan	Dec. 02, 2013 Prior Plans	Jan. 01, 2014 Employee Stock Purchase Plan	Dec. 31, 2014 Employee Stock Purchase Plan item	Dec. 31, 2014 Employee Stock Purchase Plan item	Dec. 31, 2014 Employee Stock Purchase Plan Minimum	Dec. 31, 2014 Employee Stock Purchase Plan Maximum
Stock-based compensation
Total number of shares of common stock available for issuance	2,583,186	2,403,368	753,692	0		5,409,980	2		581,286	581,286
Percentage of compensation that employees may withhold to purchase stock at a discount											1.00%	15.00%
Initial term of plan									2 years
Number of six month purchase periods									4	4
Purchase period									6 months
Purchase price as percentage of stock price at the initial offering date												85.00%
Purchase price as percentage of stock price at the purchase date												85.00%
Annual percentage increase in shares of common stock available for issuance						4.00%						1.00%
Annual increase in shares of common stock available for issuance (in shares)												621,814
Increase in shares of common stock available for issuance (in shares)					1,254,179			313,545
Awards issued under the plan (in shares)										63,864
Information with respect to stock options outstanding
Exercisable options (in shares)	1,393,729	1,203,885	1,094,573
Weighted-average exercise price per share of exercisable options (in dollars per share)	$ 1.01	$ 0.59	$ 0.59
Weighted average grant date fair value per share of options granted during the year (in dollars per share)	$ 7.39	$ 3.78	$ 0.34
Weighted-average remaining contractual life	6 years 5 months 5 days	5 years 8 months 19 days	7 years 9 months 15 days

Stock-Based Compensation (Details 2) (Stock options, USD $)	12 Months Ended			13 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2014 The 2013 Plan
Stock option activity, Number of Shares
Balance at the beginning of the period (in shares)	1,794,214	1,304,848
Options granted (in shares)	1,049,521	517,062		1,063,500
Options canceled (in shares)		(5,305)
Options forfeited (in shares)	(1,000)
Options exercised (in shares)	(15,941)	(22,391)	0
Balance at the end of the period (in shares)	2,826,794	1,794,214	1,304,848
Options vested and expected to vest (in shares)	2,531,221
Exercisable (in shares)	1,393,729	1,203,885	1,094,573
Weighted Average Exercise Price (Per Share)
Balance at the beginning of the period (in dollars per share)	$ 1.66	$ 0.59
Options granted (in dollars per share)	$ 10.99	$ 4.29
Options canceled (in dollars per share)		$ 0.59
Options forfeited (in dollars per share)	$ 10.31
Options exercised (in dollars per share)	$ 0.59	$ 0.59
Balance at the end of the period (in dollars per share)	$ 5.12	$ 1.66	$ 0.59
Options vested and expected to vest (in dollars per share)	$ 4.72
Exercisable (in dollars per share)	$ 1.01	$ 0.59	$ 0.59
Additional information
Weighted-Average Remaining Contractual Term, Balance outstanding	6 years 5 months 5 days	5 years 8 months 19 days	7 years 9 months 15 days
Weighted-Average Remaining Contractual Term, Options vested and expected to vest	6 years 1 month 13 days
Weighted-Average Remaining Contractual Term, Exercisable	3 years 8 months 5 days
Aggregate Intrinsic Value, Balance outstanding	$ 30,863,000	$ 13,429,000
Aggregate Intrinsic Value, Options vested and expected to vest	28,642,000
Aggregate Intrinsic Value, Exercisable	20,949,000
Intrinsic value of options exercised	$ 155,000	$ 191,000

Stock-Based Compensation (Details 3) (USD $)	12 Months Ended
Stock-Based Compensation (Details 3) (USD $)	Dec. 31, 2014
Stock options outstanding and exercisable by exercise price
Stock Options Outstanding, Number of Shares	2,826,794
Stock Options Outstanding, Remaining Contractual Term	6 years 5 months 5 days
Stock Options Outstanding, Weighted-Average Exercise Price (in dollars per share)	$ 5.12
Stock Options Exercisable, Number of Shares	1,393,729
Stock Options Exercisable, Weighted-Average Exercise Price (in dollars per share)	$ 1.01
$0.59 - $4.25
Stock options outstanding and exercisable by exercise price
Range of Exercise Prices, lower limit (in dollars per share)	$ 0.59
Range of Exercise Prices, upper limit (in dollars per share)	$ 4.25
Stock Options Outstanding, Number of Shares	1,763,294
Stock Options Outstanding, Remaining Contractual Term	4 years 8 months 16 days
Stock Options Outstanding, Weighted-Average Exercise Price (in dollars per share)	$ 1.63
Stock Options Exercisable, Number of Shares	1,388,779
Stock Options Exercisable, Weighted-Average Exercise Price (in dollars per share)	$ 0.99
$4.25 - $8.56
Stock options outstanding and exercisable by exercise price
Range of Exercise Prices, lower limit (in dollars per share)	$ 4.25
Range of Exercise Prices, upper limit (in dollars per share)	$ 8.56
Stock Options Outstanding, Number of Shares	55,000
Stock Options Outstanding, Remaining Contractual Term	9 years 3 months 11 days
Stock Options Outstanding, Weighted-Average Exercise Price (in dollars per share)	$ 7.73
Stock Options Exercisable, Number of Shares	4,950
Stock Options Exercisable, Weighted-Average Exercise Price (in dollars per share)	$ 5.50
$9.26 – 16.52
Stock options outstanding and exercisable by exercise price
Range of Exercise Prices, lower limit (in dollars per share)	$ 9.26
Range of Exercise Prices, upper limit (in dollars per share)	$ 16.52
Stock Options Outstanding, Number of Shares	1,008,500
Stock Options Outstanding, Remaining Contractual Term	9 years 3 months 11 days
Stock Options Outstanding, Weighted-Average Exercise Price (in dollars per share)	$ 11.10

Stock-Based Compensation (Details 4) (USD $)	11 Months Ended	12 Months Ended
Stock-Based Compensation (Details 4) (USD $)	Dec. 02, 2013	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Compensation expense
Total employee, director and non-employee stock-based compensation expense		$ 1,861,000	$ 198,000	$ 29,000
Employee Stock Purchase Plan
Weighted average assumptions for estimated fair value of employee stock options
Expected volatility, low end of range (as a percent)		70.60%
Expected volatility, high end of range (as a percent)		71.80%
Risk-free interest rate, low end of range (as a percent)		0.06%
Risk-free interest rate, high end of range (as a percent)		0.46%
Compensation expense
Unamortized compensation expense related to unvested options		204,000
Employee Stock Purchase Plan \| Minimum
Weighted average assumptions for estimated fair value of employee stock options
Expected term (years)		6 months
Employee Stock Purchase Plan \| Maximum
Weighted average assumptions for estimated fair value of employee stock options
Expected term (years)		2 years
Employee stock options
Weighted average assumptions for estimated fair value of employee stock options
Common stock fair value per share (in dollars per share)	$ 4.25		$ 5.50	$ 0.59
Expected volatility (as a percent)		77.40%	86.70%	63.70%
Risk-free interest rate, low end of range (as a percent)		1.67%	0.90%
Risk-free interest rate, high end of range (as a percent)		1.96%	2.10%
Risk-free interest rate (as a percent)				2.68%
Expected term (years)		6 years	6 years	6 years
Compensation expense
Unamortized compensation expense related to unvested options		7,600,000	895,000	26,000
Period to recognize unamortized compensation expense		3 years 6 months 26 days
Employee stock options \| Maximum
Weighted average assumptions for estimated fair value of employee stock options
Common stock fair value per share (in dollars per share)		$ 16.52
General and administrative
Compensation expense
Total employee, director and non-employee stock-based compensation expense		848,000	40,000	19,000
Research and development
Compensation expense
Total employee, director and non-employee stock-based compensation expense		$ 1,013,000	$ 158,000	$ 10,000

Commitments and Contingencies (Details) (USD $)	12 Months Ended			1 Months Ended
Commitments and Contingencies (Details) (USD $)	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2009	May 31, 2014 Office Space
Capital lease term			3 years	26 months
Capital Equipment Lease
2015	$ 2,000
Total	2,000
Operating Leases
2015	398,000
2016	598,000
2017	547,000
2018	564,000
2019	581,000
Thereafter	299,000
Total	2,987,000
Net rent expense	$ 597,000	$ 547,000		$ 200,000

Convertible Promissory Notes and Conversion of Convertible Preferred Stock (Details 2) (USD $)	12 Months Ended		12 Months Ended	0 Months Ended		0 Months Ended				1 Months Ended	12 Months Ended				0 Months Ended			0 Months Ended	12 Months Ended
	Dec. 31, 2013	Dec. 02, 2013	Dec. 31, 2013 Note Conversion Agreement	Jun. 13, 2013 Series AE Converted To Series A-1 Preferred Shares	Jun. 13, 2013 Series AE Converted To Series A-1 Preferred Shares	Jun. 26, 2013 Series A1 Converted To Series A2 Preferred Shares	Dec. 03, 2013 Series A-1 Convertible Preferred Stock	Sep. 23, 2013 Series A-1 Convertible Preferred Stock	Jun. 26, 2013 Series A-1 Convertible Preferred Stock	Jun. 30, 2013 Series A-1 Convertible Preferred Stock	Dec. 31, 2013 Series A-1 Convertible Preferred Stock	Dec. 03, 2013 Series A-1 Convertible Preferred Stock	Sep. 23, 2013 Series A-1 Convertible Preferred Stock	Jun. 26, 2013 Series A-1 Convertible Preferred Stock	Jun. 13, 2013 Series A-1 Convertible Preferred Stock Note Conversion Agreement	Jun. 13, 2013 Series A-1 Convertible Preferred Stock Note Conversion Agreement	Jun. 13, 2013 Series A-1 Convertible Preferred Stock Series AE Converted To Series A-1 Preferred Shares	Dec. 03, 2013 Series A-2 Convertible Preferred Stock	Dec. 31, 2013 Series A-2 Convertible Preferred Stock	Dec. 03, 2013 Series A-2 Convertible Preferred Stock	Jun. 26, 2013 Series A-2 Convertible Preferred Stock	Jun. 13, 2013 Series A-2 Convertible Preferred Stock Note Conversion Agreement	Jun. 13, 2013 Series A-2 Convertible Preferred Stock Series A1 Converted To Series A2 Preferred Shares
Convertible Promissory Notes
Number of shares issued on conversion of notes											45,902,321				45,902,321
Number of preferred stock converted (in shares)							49,671,392				(49,671,392)				5,303,597			1,851,814	(1,851,814)
Exchange of Series A-E/A-1 for A-1/A-2 Preferred stock					257,409							16,022,915		5,561,006			1,977,137			597,359	1,851,814	1,766,097	85,717
Loss on extinguishment of debt (in dollars)	$ (48,556,000)
Associated transaction costs (in dollars)			41,000					34,000	40,000
Deemed contribution (distribution) on exchange of preferred stock	144,765,000			140,600,000		7,500,000
Reduction in deemed contribution due to issuance cost	116,000			3,000,000
Fair value of stock issued (in dollars)													4,700,000			70,700,000	3,000,000				1,100,000
Fair value of stock converted (in dollars)	79,601,000								8,600,000
Convertible preferred stock issued (in shares)											7,352,940		1,766,430	5,586,510
Share Price		$ 5.50											$ 1.36	$ 1.36		$ 1.54
Aggregate purchase price of convertible preferred stock (in dollars)	10,000,000							2,400,000	7,600,000
Deemed dividend (in dollars)	$ (3,429,000)							$ 2,300,000	$ 1,000,000	$ 1,000,000
Fair value of convertible preferred stock (in dollars per share)													$ 2.69	$ 1.54							$ 0.58

Initial Public Offering (Details) (USD $)	0 Months Ended	12 Months Ended
Initial Public Offering (Details) (USD $)	Dec. 02, 2013	Dec. 31, 2013	Dec. 02, 2013
Initial Public Offering
Common stock sold under initial public offering (in shares)	14,639,500
IPO price (in dollars per share)			$ 5.50
Proceeds from Issuance of Common Stock		$ 80,517,000
Net proceeds received from initial public offering	$ 72,500,000

Condensed Quarterly Financial Data (unaudited) (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Condensed Quarterly Financial Data (unaudited)
Total revenue	$ 5,664	$ 848	$ 824	$ 2,184	$ 1,745	$ 3,161	$ 3,921	$ 1,345	$ 9,520	$ 10,172	$ 9,524
Loss from operations	(1,350)	(6,287)	(5,053)	(3,767)	(3,710)	(1,843)	(1,006)	(3,961)	(16,457)	(10,520)	(6,230)
Net loss	$ (1,349)	$ (6,278)	$ (5,044)	$ (3,751)	$ (3,703)	$ (1,835)	$ (50,109)	$ (4,612)	$ (16,422)	$ (60,259)	$ (8,594)
Basic (in dollars per share)	$ (0.04)	$ (0.20)	$ (0.16)	$ (0.12)	$ (0.37)	$ (57.87)	$ 1,341.67	$ (63.78)	$ (0.52)	$ 34.18	$ (118.86)
Diluted (in dollars per share)	$ (0.04)	$ (0.20)	$ (0.16)	$ (0.12)	$ (0.37)	$ (57.87)	$ (3.88)	$ (63.78)	$ (0.52)	$ (3.85)	$ (118.86)

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

+ References+ Details

- Definition

The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

+ References+ Details

401(k) Plan	12 Months Ended
401(k) Plan	Dec. 31, 2014
401(k) Plan
401(k) Plan	8. 401(k) Plan We have a 401(k) plan covering all full‑time employees. Employees may make pre‑tax contributions up to the maximum allowable by the Internal Revenue Code. Participants are immediately vested in their employee contributions and employer discretionary contributions, if any. No employer contributions were made for the years ended December 31, 2014, 2013 or 2012.

Convertible Notes Payable (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended		1 Months Ended
	Dec. 31, 2009 the 2009 Notes	Jun. 30, 2011 the 2009 Notes	Dec. 31, 2010 the 2010 Notes	Dec. 31, 2011 the 2010 Notes
Amount of debt issued	$ 7.7		$ 7.5
Interest rate (as a percent)	10.00%	12.50%	10.00%	12.50%

Related Parties (Details) (USD $)	0 Months Ended
Related Parties (Details) (USD $)	Sep. 04, 2013
Related Parties
Waiver of debt availed by CEO	$ 166,000

Summary of Significant Accounting Policies (Details 5)	12 Months Ended
Summary of Significant Accounting Policies (Details 5)	Dec. 31, 2014
Computers, software and equipment \| Minimum
Property and Equipment
Estimated useful lives of the assets	3 years
Computers, software and equipment \| Maximum
Property and Equipment
Estimated useful lives of the assets	5 years
Furniture and fixtures \| Minimum
Property and Equipment
Estimated useful lives of the assets	5 years
Furniture and fixtures \| Maximum
Property and Equipment
Estimated useful lives of the assets	7 years
Leasehold improvements \| Minimum
Property and Equipment
Estimated useful lives of the assets	5 years
Leasehold improvements \| Maximum
Property and Equipment
Estimated useful lives of the assets	7 years

Subsequent Events (Details) (USD $)	12 Months Ended		1 Months Ended
Subsequent Events (Details) (USD $)	Dec. 31, 2014	Dec. 31, 2013	Jan. 31, 2015 Subsequent Event
Subsequent Event [Line Items]
Additional renewal period			5 years
Payments under lease agreement	$ 597,000	$ 547,000	$ 2,800,000