||Organization and Operations |
Inc. (the “Company”) is a late-stage biopharmaceutical company focused on the development of novel, first-in-class
pharmaceuticals to address the medical needs of patients with kidney and vascular disease. The Company was formed in June 2001
and incorporated on March 24, 2006.
The Company devotes
substantially all of its efforts to product research and development, initial market development and raising capital. The Company
has not generated any product revenue related to its primary business purpose to date and is subject to a number of risks similar
to those of other development stage companies, including dependence on key individuals, competition from other companies, the need
for development of commercially viable products and the need to obtain adequate additional financing to fund the development of
its product candidates. The Company is also subject to a number of risks similar to other companies in the biotechnology industry,
including regulatory approval of products, uncertainty of market acceptance of products, competition from therapeutic alternatives
and larger companies, compliance with government regulations, protection of proprietary technology, dependence on third parties
and product liability.
As of September 30,
2017, the Company had cash, cash equivalents and available-for-sale investments of $47.4 million. The Company believes that its
existing cash, cash equivalents and available-for-sale investments will be sufficient to fund operations and capital expenditures
into the fourth quarter of 2019. The Company had an accumulated deficit of $184.2 million as of September 30, 2017.
On November 12, 2015,
the Company filed a shelf registration statement on Form S-3 (the “Registration Statement”), and entered into a Sales
Agreement (the "Sales Agreement") with Cowen and Company, LLC (“Cowen”) to establish an at-the-market (“ATM”)
equity offering program pursuant to which they are able, with the Company’s authorization, to offer and sell up to $40 million
of the Company’s Common Stock at prevailing market prices from time to time. The Registration Statement became effective
on January 12, 2016. The Company will pay Cowen a commission equal to 3% of the gross proceeds of the sales price of all shares
sold through it as sales agent under the Sales Agreement. The offering costs are offset against proceeds from the sale of common
stock under this agreement. The Company filed a prospectus supplement on March 16, 2017 because the Company is currently subject
to General Instruction I.B.6 of Form S-3, which limits the amounts that the Company may sell under the Registration Statement.
For the three and nine months ended September 30, 2017, the Company sold 0 shares and 896,811 shares, respectively, of common stock
under the Sales Agreement for aggregate gross proceeds of $0 and $1.4 million, respectively. For the three and nine months ending
September 30, 2017, total offering costs of $0 and $0.2 million, respectively, were offset against the proceeds from the sale of
On June 22, 2017, the Company entered into
a Securities Purchase Agreement (the “Purchase Agreement”) with a syndicate of current and new institutional investors,
led by an affiliate of Deerfield Management Company, L.P., pursuant to which the Company agreed to issue and sell to the investors
an aggregate of 22,000 shares of the Company’s Series A Convertible Preferred Stock, par value $0.001 per share (the “Transaction”),
for a purchase price of $1,000 per share, or an aggregate gross purchase price of $22.0 million, all upon the terms and conditions
set forth in the Purchase Agreement. The Company closed this Transaction on August 2, 2017 (see Note 6).
||Summary of Significant Accounting Policies|
Basis of Presentation, Principles
of Consolidation and Use of Estimates
The unaudited interim
condensed consolidated financial statements of the Company included herein have been prepared, pursuant to the rules and regulations
of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included
in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have
been condensed or omitted from this report, as is permitted by such rules and regulations. Accordingly, these condensed consolidated
financial statements should be read in conjunction with the financial statements as of and for the year ended December 31, 2016
and notes thereto, included in the Company’s Annual Report on Form 10-K, as filed with the SEC on March 16, 2017.
The unaudited interim
condensed consolidated financial statements have been prepared on the same basis as the audited financial statements. In the opinion
of the Company’s management, the accompanying unaudited interim condensed consolidated financial statements contain all adjustments
which are necessary to fairly present the Company’s financial position as of September 30, 2017, the results of its operations
for the three and nine months ended September 30, 2017 and 2016 and its cash flows for the nine months ended September 30, 2017
and 2016. Such adjustments are of a normal and recurring nature. The results for the three and nine months ended September 30,
2017 are not necessarily indicative of the results for the year ending December 31, 2017, or for any future period.