View Filing Data

Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2018	Nov. 06, 2018
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q3
Trading Symbol	HSGX
Entity Registrant Name	Histogenics Corporation
Entity Central Index Key	0001372299
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Common Stock, Shares Outstanding		62,025,398

Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 5,192	$ 7,081
Marketable securities		900
Prepaid expenses and other current assets	825	194
Total current assets	6,017	8,175
Property and equipment, net	4,352	2,723
Other assets, long-term	375
Restricted cash	137	137
Total assets	10,881	11,035
Current liabilities:
Accounts payable	1,690	776
Accrued expenses	1,973	2,705
Current portion of deferred revenue	5,000
Current portion of deferred rent	42	35
Current portion of deferred lease incentive	238	111
Current portion of equipment loan		178
Total current liabilities	8,943	3,805
Accrued expenses due to Intrexon Corporation	3,040	3,040
Deferred revenue, net of current portion	5,000
Deferred rent, net of current portion	334	280
Deferred lease incentive, net of current portion	1,085	499
Warrant liability	2,155	14,679
Total liabilities	20,557	22,303
Commitments and contingencies (Note 5)
Convertible preferred stock and stockholders’ equity (deficit):
Convertible preferred stock, $0.01 par value; 30,000 shares authorized, 400.4910 and 4,605.6533 shares issued and outstanding at September 30, 2018 and December 31, 2017, respectively
Common stock, $0.01 par value; 100,000,000 shares authorized, 35,002,742 and 24,571,029 shares issued and outstanding at September 30, 2018 and December 31, 2017, respectively	221	159
Additional paid-in capital	206,115	196,760
Accumulated deficit	(216,012)	(208,187)
Total stockholders’ deficit	(9,676)	(11,268)
Total liabilities and stockholders’ deficit	$ 10,881	$ 11,035

Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2018	Dec. 31, 2017
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	35,002,742	24,571,029
Common stock, shares outstanding	35,002,742	24,571,029
Series A Convertible Preferred Stock [Member]
Convertible preferred stock, par value	$ 0.01	$ 0.01
Convertible preferred stock, shares authorized	30,000	30,000
Convertible preferred stock, shares issued	400.4910	4,605.6533
Convertible preferred stock, shares outstanding	400.4910	4,605.6533

Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Income Statement [Abstract]
Revenue	$ 0	$ 0	$ 0	$ 0
Operating expenses:
Research and development	4,563	3,488	12,307	12,200
General and administrative	2,426	2,225	8,059	6,717
Total operating expenses	6,989	5,713	20,366	18,917
Loss from operations	(6,989)	(5,713)	(20,366)	(18,917)
Other income (expense):
Interest income, net	19	39	88	114
Other expense, net	(21)	(52)	(71)	(142)
Change in fair value of warrant liability	17,776	(269)	12,524	(673)
Total other income (expense), net	17,774	(282)	12,541	(701)
Net income (loss)	10,785	(5,995)	(7,825)	(19,618)
Other comprehensive income (loss):
Unrealized gain from available for sale securities		1
Comprehensive income (loss)	10,785	(5,994)	(7,825)	(19,618)
Net income (loss) attributable to common stockholders—basic	10,650	(5,080)	(7,657)	(16,380)
Net (loss) attributable to common stockholders—diluted	$ (7,126)	$ (5,080)	$ (20,181)	$ (16,380)
Net income (loss) per common share—basic	$ 0.36	$ (0.23)	$ (0.27)	$ (0.74)
Net loss per common share—diluted	$ (0.24)	$ (0.23)	$ (0.68)	$ (0.74)
Weighted-average shares used to compute income (loss) per common share—basic	29,737,632	22,552,341	28,723,500	22,219,666
Weighted-average shares used to compute income (loss) per common share—diluted	29,737,632	22,552,341	29,515,700	22,219,666

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (7,825)	$ (19,618)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	364	1,178
Amortization of discount of investments		24
Deferred rent and lease incentive	774	(407)
Stock-based compensation	1,249	1,233
Change in fair value of warrant	(12,524)	673
Changes in operating assets and liabilities:
Prepaid expenses and other current assets	(631)	(85)
Other assets, long-term	(375)
Accounts payable	861	(761)
Accounts payable due to Intrexon Corporation		(360)
Accrued expenses	(732)	(578)
Deferred revenue	10,000
Net cash used in operating activities	(8,839)	(18,701)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment	(1,940)	(132)
Proceeds from maturities of marketable securities	900	6,159
Purchases of marketable securities		(8,004)
Net cash used in investing activities	(1,040)	(1,977)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments on equipment term loan	(178)	(437)
Net proceeds from issuance of common stock	8,164
Proceeds from exercise of warrants	2
Proceeds from exercise of stock options	2	5
Net cash provided by (used in) financing activities	7,990	(432)
Net decrease in cash and cash equivalents and restricted cash	(1,889)	(21,110)
Cash and cash equivalents and restricted cash—Beginning of period	7,218	32,045
Cash and cash equivalents and restricted cash—End of period	5,329	$ 10,935
Supplemental cash flow disclosures from investing and financing activities:
Purchases of property and equipment in accounts payable and accrued expenses	53
Public offering costs in accounts payable and accrued expenses	$ 160

Nature of Business	9 Months Ended
Nature of Business	Sep. 30, 2018
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Nature of Business	1. NATURE OF BUSINESS Organization Histogenics Corporation (the “Company”) was incorporated under the laws of the Commonwealth of Massachusetts on June 28, 2000 and has its principal operations in Waltham, Massachusetts. In 2006, the Company’s board of directors approved a corporate reorganization pursuant to which the Company incorporated as a Delaware corporation. The Company is a leader in the development of restorative cell therapies (“RCTs”). RCTs refer to a new class of products the Company is developing that are designed to offer patients rapid-onset pain relief and restored function through the repair of damaged or worn tissue. NeoCart, the Company’s lead investigational product, is an innovative cell therapy that utilizes various aspects of the Company’s RCT technology platform to treat tissue injury in the field of orthopedics, specifically cartilage damage in the knee. NeoCart is designed to rebuild a patient’s own knee cartilage to treat pain at the source, improve function and potentially prevent a patient’s progression to osteoarthritis. NeoCart is one of the most rigorously studied restorative cell therapies for orthopedic use and is currently in a 249 patient, Phase 3 clinical trial in the United States (the “U.S.”) under a special protocol assessment with the U.S. Food and Drug Administration (the “FDA”). In the third quarter of 2018, the Company announced that its Phase 3 clinical trial of NeoCart did not meet the primary endpoint of a statistically significant improvement in pain and function in a dual threshold responder analysis one year after treatment as compared to microfracture. However, NeoCart did demonstrate statistically significant and clinically meaningful improvements on the dual threshold responder analysis six months after treatment and on nearly all individual pain and function measures when compared to microfracture one and two years after treatment. As a result, the Company met with the FDA on October 30, 2018 to discuss the data and a potential Biologics License Application (“BLA”) submission. The FDA has not made a final decision regarding a potential BLA submission. The Company and the FDA are continuing to discuss the clinical data generated to date, the potential need for any additional supplemental clinical data (which may include longer-term data from the ongoing Phase 3 clinical trial or additional studies) and potential alternative regulatory pathways for the BLA to be accepted. On December 18, 2014, the Company formed a wholly owned subsidiary, Histogenics Securities Corporation, under the laws of the Commonwealth of Massachusetts. On September 29, 2016, the Company closed a private placement of common stock, preferred stock and warrants, contemplated by a securities purchase agreement dated September 15, 2016, with certain institutional and accredited investors. The net proceeds after deducting placement agent fees and other transaction-related expenses was $27.6 million. See Note 6, Capital Stock, for further discussion of the private placement. In January 2018, the Company completed an underwritten registered direct offering of 2,691,494 shares of common stock. The total net proceeds of the offering were $5.7 million after deducting underwriter’s discounts and commissions, and expenses related to the offering. In March 2018, the Company entered into an equity distribution agreement (“ATM Agreement”) with Canaccord Genuity Inc. (“Canaccord”), pursuant to which the Company may, from time to time, sell shares of its common stock having an aggregate offering price of up to $10.0 million (the “Shares”) through Canaccord, as sales agent. During the nine months ended September 30, 2018, the Company sold an aggregate of 5,766,247 shares of common stock and received $4.0 million after deducting commissions related to the ATM Agreement and other offering costs. From October 1, 2018 through November 6, 2018, the Company sold an aggregate of 867,656 shares of its common stock and received $0.5 million after deducting commissions related to the ATM Agreement. On October 10, 2018, the Company closed an underwritten public offering of 26,155,000 shares of its common stock and warrants to purchase up to 19,616,250 shares of common stock, at a combined purchase price of $0.65 per share of common stock and accompanying warrant. The gross proceeds from this offering were $17.0 million, before deducting underwriting discounts and commissions, and offering expenses payable by the Company. The warrants are exercisable immediately upon issuance at a price of $0.70 per share of common stock and have a term of five years commencing on the date of issuance. Since its inception, the Company has devoted substantially all of its efforts to product development, recruiting management and technical staff, raising capital, starting up production and building infrastructure and has not yet generated revenues from its planned principal operations. Expenses have primarily been for research and development and related administrative costs. The Company is subject to a number of risks. The developmental nature of its activities is such that significant inherent risks exist in the Company’s operations. Principal among these risks are the successful development of therapeutics, ability to obtain adequate financing, obtaining regulatory approval for any of its product candidates in any jurisdiction, obtaining adequate reimbursement rates for any of its approved product candidates, compliance with government regulations, protection of proprietary therapeutics, fluctuations in operating results, dependence on key personnel and collaborative partners, adoption of the Company’s products by the physician community, rapid technological changes inherent in the markets targeted, the introduction of substitute products and competition from larger companies. Liquidity The consolidated financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying consolidated financial statements, the Company had an accumulated deficit at September 30, 2018 of $216.0 million and has incurred losses and cash flow deficits from operations for the nine months ended September 30, 2018 and 2017. The Company has financed operations to date primarily through public and private placements of equity securities, and borrowings under debt agreements. The Company anticipates that it will continue to incur net losses for the next several years. The Company believes that its existing cash, cash equivalents and marketable securities will only be sufficient to fund its projected cash needs into the middle of 2019. Accordingly, these factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The Company will require additional capital to sustain operations through FDA approval of NeoCart and to commercialize NeoCart, if approved. To meet its capital needs, the Company intends to raise additional capital through debt or equity financing or other strategic transactions. However, such financing may not be on favorable terms or available to the Company. The failure of the Company to obtain sufficient funds on commercially acceptable terms when needed will have a material adverse effect on the Company’s business, results of operations and financial condition. The forecast of cash resources is forward-looking information that involves risks and uncertainties, and the actual amount of our expenses could vary materially and adversely as a result of a number of factors. The Company has based its estimates on assumptions that may prove to be wrong, and the Company’s expenses could prove to be significantly higher than it currently anticipates. Basis of Accounting The consolidated financial statements are unaudited and have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). However, they do not include all of the information and footnotes required by GAAP for complete financial statements. These interim consolidated financial statements, in the opinion of the Company’s management, reflect all normal recurring adjustments necessary for a fair presentation of the Company’s financial position and results of operations for the interim periods ended September 30, 2018 and 2017. The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full year. These interim financial statements should be read in conjunction with the audited financial statements as of and for the year ended December 31, 2017, and the notes thereto, which are included in the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission (the “SEC”) on March 15, 2018. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, ProChon and Histogenics Securities Corporation. All significant intercompany accounts and transactions are eliminated in consolidation.

Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2018

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

During the nine months ended September 30, 2018, there have been no material changes to the significant accounting policies described in the Company’s audited financial statements as of and for the year ended December 31, 2017, and the notes thereto, which are included in the Annual Report on Form 10-K, except as noted below.

Fair Value Measurements

The carrying amounts reported in the Company’s consolidated financial statements for cash and cash equivalents, marketable securities, accounts payable, equipment loan, and accrued liabilities approximate their respective fair values because of the short-term nature of these accounts.

Fair value is defined as the price that would be received if selling an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

Additionally, from time to time, the Company may be required to record at fair value other assets on a nonrecurring basis, such as assets held for sale and certain other assets. These nonrecurring fair value adjustments typically involve the application of lower-of-cost-or-market accounting or write-downs of individual assets.

The fair value hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets (Level 1), and the lowest priority to unobservable inputs (Level 3). The Company’s financial assets are classified within the fair value hierarchy based on the lowest level of inputs that is significant to the fair value measurement. The three levels of the fair value hierarchy, and their applicability to the Company’s financial assets, are described below.

Level 1 : Unadjusted quoted prices in active markets that are accessible at the measurement date of identical, unrestricted assets.

Level 2 : Quoted prices for similar assets, or inputs that are observable, either directly or indirectly, for substantially the full term through corroboration with observable market data. Level 2 includes investments valued at quoted prices adjusted for legal or contractual restrictions specific to the security.

Level 3 : Pricing inputs are unobservable for the assets. Level 3 assets include private investments that are supported by little or no market activity. Level 3 valuations are for instruments that are not traded in active markets or are subject to transfer restrictions and may be adjusted to reflect illiquidity and/or non-transferability, with such adjustment generally based on available market evidence. In the absence of such evidence, management’s best estimate is used.

An adjustment to the pricing method used within either Level 1 or Level 2 inputs could generate a fair value measurement that effectively falls in a lower level in the hierarchy. The Company had no material re-measurements of fair value with respect to financial assets and liabilities, during the periods presented, other than those assets and liabilities that are measured at fair value on a recurring basis. Other than the warrants issued in connection with the private placement transaction which closed on September 29, 2016, the Company had no assets or liabilities classified as Level 3 as of September 30, 2018 and December 31, 2017. Transfers are calculated on values as of the transfer date. There were no transfers between Levels 1, 2 and 3 during the nine months ended September 30, 2018 and twelve months ended December 31, 2017.

The fair value of the warrants is considered a Level 3 valuation and was determined using a Monte Carlo simulation model. This model incorporated several assumptions at each valuation date including: the price of the Company’s common stock on the date of valuation, the historical volatility of the price of the Company’s common stock, the remaining contractual term of the warrant and estimates of the probability of a fundamental transaction occurring (See Note 6 for further discussion of the private placement).

The Company’s financial instruments as of September 30, 2018 consisted primarily of cash and cash equivalents and warrant liability. The Company’s financial instruments as of December 31, 2017 consisted primarily of cash, cash equivalents and marketable securities and warrant liability. As of September 30, 2018, and December 31, 2017, the Company’s financial assets recognized at fair value consisted of the following:

Description	Total		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
	(in thousands)
September 30, 2018
Assets:
Cash Equivalents
Money market funds	$	3,933	$	3,933	$	—	$	—
Total	$	3,933	$	3,933	$	—	$	—
Liabilities:
Warrant liability	$	2,155	$	—	$	—	$	2,155
December 31, 2017
Assets:
Cash Equivalents
Money market funds	$	5,547	$	5,547	$	—	$	—
Marketable securities
Asset-backed securities	$	900	$	—	$	900	$	—
Liabilities:
Warrant liability	$	14,679	$	—	$	—	$	14,679

The following table provides a reconciliation of all liabilities measured at fair value using Level 3 significant unobservable inputs:

		September 30, 2018
		(in thousands)
Beginning balance, December 31, 2017	$		14,679
Change in fair value of warrant liability			(12,524	)
Ending balance	$		2,155

Cash and Cash Equivalents

The Company considers all highly liquid securities with original maturities of three months or less from the date of purchase to be cash equivalents. Cash and cash equivalents are comprised of funds in money market accounts. In addition, the Company has recorded restricted cash of $0.1 million as of September 30, 2018 and December 31, 2017. Restricted cash consist of security provided for lease obligation.

Marketable Securities

The Company classifies marketable securities with a remaining maturity of greater than three months when purchased as available for sale. The Company considers all available for sale securities, including those with maturity dates beyond 12 months, as available to support current operational liquidity needs and therefore classifies all securities including those with maturity dates beyond 90 days at the date of purchase as current assets within the consolidated balance sheets. Available for sale securities are maintained by the Company’s investment managers and may consist of commercial paper, high-grade corporate notes, U.S. Treasury securities, U.S. government agency securities, and certificates of deposit. Available for sale securities are carried at fair value with the unrealized gains and losses included in other comprehensive income (loss) as a component of stockholders’ equity (deficit) until realized. Any premium or discount arising at purchase is amortized and/or accreted to interest income and/or expense over the life of the instrument. Realized gains and losses are determined using the specific identification method and are included in other income (expense).

If any adjustment to fair value reflects a decline in value of the investment, the Company considers all available evidence to evaluate the extent to which the decline is “other-than-temporary” and, if so, marks the investment to market through a charge to the Company’s consolidated statement of operations and comprehensive loss.

The amortized cost of available for sale securities is adjusted for amortization of premiums and accretion of discounts to maturity. There were no available for sale securities as of September 30, 2018.

Revenue Recognition

In May 2014, the Financial Accounting Standards Board (the “FASB”) issued a new standard related to revenue recognition, Accounting Standard Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers. This new accounting standard will replace most current U.S. GAAP guidance on this topic and eliminate most industry-specific guidance. It provides a unified model to determine when and how revenue is recognized. The core principle is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. Entities may adopt the new standard either retrospectively to all periods presented in the financial statements (the full retrospective method) or as a cumulative-effect adjustment as of the date of adoption (modified retrospective method) in the year of adoption without applying to comparative years’ financial statements. Further, in August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers: Deferral of the Effective Date, to defer the effective adoption date by one year to December 15, 2017 for annual reporting periods beginning after that date and permitted early adoption of the standard, but not before fiscal years beginning after the original effective date of December 15, 2016. The Company elected to early adopt the guidance in 2017 using the modified retrospective method. There was no cumulative impact due to the adoption of this standard.

Revenue is recognized when, or as, performance obligations are satisfied, which occurs when control of the promised products or services is transferred to customers. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products or services to a customer (“transaction price”). To the extent that the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing the most likely amount method. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. Estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of the Company’s anticipated performance and all information (historical, current and forecasted) that is reasonably available.

If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative standalone selling price basis unless the transaction price is variable and meets the criteria to be allocated entirely to a performance obligation or to a distinct service that forms part of a single performance obligation. The Company currently generates revenue primarily through collaborative research, development and commercialization agreements. The terms of these agreements may contain multiple promises which may include: (i) licenses to the Company’s technology; (ii) services related to the transfer and update of know-how; and (iii) manufacturing supply services. Payments to the Company under these arrangements typically include one or more of the following: non-refundable upfront license fees; milestone payments; royalties on future product sales; and fees for manufacturing supply services. None of the Company's contracts as of September 30, 2018 contained a significant financing component.

The Company assesses the promises to determine if they are distinct performance obligations. Once the performance obligations are determined, the transaction price is allocated based on a relative standalone selling price basis. Milestone payments and royalties are typically considered variable consideration at the outset of the contract and are recognized in the transaction price either upon occurrence or when the constraint of a probable reversal is no longer applicable.

Collaboration Revenue

While no revenue has been recognized as of September 30, 2018, the Company expects to generate revenue through collaboration and license agreements with strategic partners for the development and commercialization of product candidates. The collaboration and license agreements are within the scope of Accounting Standards Codification (“ASC 606”) Revenue from Contracts with Customers.

In determining the appropriate amount of revenue to be recognized as it fulfills its obligations under the agreements, the Company performs the following steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. As part of the accounting for the arrangement, the Company must develop assumptions that require judgment to determine the stand-alone selling price for each performance obligation identified in the contract. The Company uses key assumptions to determine the stand-alone selling price, which may include market conditions, reimbursement rates for personnel costs, development timelines and probabilities of regulatory success.

Licenses of intellectual property: If the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenues from non-refundable, up-front fees allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license. For licenses that are bundled with other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from non-refundable, up-front fees. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition.

Manufacturing Supply Services: If the promise to supply products for clinical and/or commercial development are determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenues from the fees allocated to the supply when or as the supply is transferred to the customer, generally upon delivery to the customer. If the promise to supply products for clinical and/or commercial development are not determined to be distinct from the other performance obligations identified in the arrangement, the Company utilizes judgement to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue , including amounts from non-refundable, up-front fees. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition.

Milestone Payments: At the inception of each arrangement that includes developmental and regulatory milestone payments, the Company evaluates whether the achievement of each milestone specifically relates to the Company’s efforts to satisfy a performance obligation or transfer a distinct good or service within a performance obligation. If the achievement of a milestone is considered a direct result of the Company’s efforts to satisfy a performance obligation or transfer a distinct good or service and the receipt of the payment is based upon the achievement of the milestone, the associated milestone value is allocated to that distinct good or service and revenue is recognized in the period in which the milestone is achieved. If the milestone payment is not specifically related to the Company’s effort to satisfy a performance obligation or transfer a distinct good or service, the Company evaluates the milestone to determine whether the milestone is considered probable of being reached and estimates the amount to be included in the transaction price using either the most likely amount or the expected value method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price to be allocated. At the end of each subsequent reporting period, the Company re-evaluates the probability of achievement of such development milestones and any related constraint, and if necessary, adjusts its estimate of the overall allocation. Any such adjustments are recorded on a cumulative catch-up basis, which would affect license, collaboration and other revenues and earnings in the period of adjustment.

Royalties: For arrangements that include sales-based or usage-based royalties, including milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company will recognize revenue at the later of: (i) when the related sales occur; or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied).

License and Collaboration Arrangements

MEDINET Co., Ltd.

In December 2017, the Company entered into a License and Commercialization Agreement (the “License Agreement”) with MEDINET Co., Ltd. (“MEDINET”) to grant MEDINET a license under certain patents, patent applications, know-how, and technology to develop and commercialize certain therapeutic products to replace or repair damaged, worn, or defective cartilage.

In exchange for the license, MEDINET agreed to pay the Company an upfront cash payment of $10.0 million which the Company received in January 2018. As of September 30, 2018, the contract with MEDINET was wholly unperformed and all revenue under the License Agreement has been deferred and has not been recognized. As of September 30, 2018, the aggregate amount of the transaction price allocated to remaining performance obligations was $10.0 million. The Company expects to recognize revenue on approximately 50% and 100% of the remaining performance obligations over the next 12 months and the following 12 months, respectively.

MEDINET also agreed to pay the Company tiered royalties, at percentages ranging from the low single digits to low double digits, of net sales of MEDINET products governed by the License Agreement. Over the life of the License Agreement, the Company is eligible to receive up to ¥330 million ($2.9 million as of September 30, 2018) in development milestone payments, $1.0 million and ¥720 million ($7.4 million as of September 30, 2018) in regulatory payments and up to an aggregate of ¥7,300 million ($64.1 million as of September 30, 2018) for the achievement of certain commercial milestones related to the sales of MEDINET products governed by the License Agreement.

As a condition of the License Agreement, the Company agreed to supply NeoCart for MEDINET’s planned Phase 3 clinical trial in Japan. The Company assessed its promised goods and services under the License Agreement to determine if they are distinct. Due to the unique nature of the clinical manufacturing services to be provided by the Company, there are currently no other third-party vendors from which MEDINET can obtain such supply. The Company expects to be the only vendor capable of providing the manufacturing services for a period of at least one to two years, which is approximately the estimated length of time for the Japanese clinical trial period. After this point, if the Company were to transfer to a third-party its technology and know-how related to the manufacturing services, the third-party vendor would be capable of providing the commercial manufacturing services, and therefore MEDINET would be able to choose whether to utilize the Company for such services or another vendor. The Company determined that MEDINET’s option to obtain commercial manufacturing services does not represent a material right, as the fees charged to MEDINET by the Company are expected to approximate the fair market value for manufacturing services. As noted, with the assistance of the Company, third-party vendors could have the capability to perform commercial manufacturing services by this time, and the Company expects the contract value to approximate the market price. Due to MEDINET’s limitations in obtaining the clinical manufacturing services from a third-party, as well as MEDINET’s limited ability to obtain the benefits of the licensed intellectual property without the clinical manufacturing services, the licensed intellectual property and clinical manufacturing services are determined to be a combined performance obligation. Based on this assessment, the Company determined that the promised goods and services do not have standalone value and are highly interrelated. Accordingly, the promised goods and services represent one performance obligation.

Based on the assessment of the combined performance obligation, the Company determined that the predominant promise in the arrangement is the transfer of the license and associated know-how expected to occur over the length of the clinical trial. The Company determined that MEDINET will be simultaneously receiving and consuming the benefits of the Company’s performance related to the supply of the clinical trial. Therefore, the revenue associated with the combined performance obligation will be recognized over time.

In determining the correct measure of progress to use when recognizing revenue over time, the Company assessed whether an input or output based measure of progress would be appropriate. The Company determined that an output based measure of progress would be appropriate to use when recognizing revenue associated with the combined performance obligation. The Company will recognize revenue under the License Agreement as the clinical manufacturing services are performed. At the outset of the clinical trials to be conducted by MEDINET, the Company will have quantifiable estimates of total clinical candidates, and therefore, of total estimated performance. The Company will recognize revenue based on performance completed to date, as evidenced by the estimated number of clinical trial enrollees. The Company expects to provide the clinical manufacturing services to MEDINET over the estimated time to enroll the Japanese Phase 3 clinical trial which is currently estimated to be 12 months, beginning in the fourth quarter of 2018. Therefore, the estimated one - year clinical manufacturing period is the appropriate timing of revenue recognition for the combined performance obligation. Management will re-evaluate that estimate at each reporting period.

Revenue will be recognized using the output method over the length of the clinical trial enrollment, as the clinical manufacturing services are delivered, over the estimated one-year service period. Upon the conclusion of the clinical manufacturing period, the Company expects other third-party vendors to have the capabilities to provide similar services. At this point, the license would effectively become a distinct performance obligation, with no remaining undelivered obligations. Therefore, the Company determined that the up-front payment associated with the licensed intellectual property should be fully recognized by the conclusion of the clinical manufacturing service period.

At contract inception, the Company determined that the $10.0 million non-refundable upfront amount constituted the entirety of the consideration to be included in the transaction price as the development, regulatory, and commercial milestones represent variable consideration and were fully constrained. As part of its evaluation of the constraint, the Company considered numerous factors, including that receipt of the milestones is outside the control of the Company and contingent upon success in future clinical trials and the licensees’ efforts. Any consideration related to sales-based milestones (including royalties) will be recognized when the related sales occur. The Company will re-evaluate the transaction price in each reporting period and as uncertain events are resolved or other changes in circumstances occur. The Company also determined that consideration associated with the clinical trials, which are payable by MEDINET on per-patient basis represent variable consideration, will be included in the transaction price upon occurrence, or once the associated clinical manufacturing service(s) for the patient are concluded.

The Company incurred cost of $0.9 million related to the License Agreement with MEDINET, of which $0.8 million was recorded as an asset that will be expensed proportionally over the performance service period.

Stock-Based Compensation

The Company accounts for stock options and restricted stock based on their grant date fair value and recognizes compensation expense on a straight-line basis over their vesting period. The Company estimates the fair value of stock options as of the date of grant using the Black-Scholes option pricing model, with the exception of stock options that include a market condition, and restricted stock based on the fair value of the underlying common stock as of the date of grant or the value of the services provided, whichever is more readily determinable. The Company, in conjunction with adoption of ASU 2016-09- Stock Compensation: Improvements to Employee Share-Based Payment Accounting has elected to estimate forfeitures at the time of grant, and revise those estimates in subsequent periods if actual forfeitures differ from its estimates. The Company uses historical data to estimate pre-vesting option forfeitures and records stock-based compensation expense only for those awards that are expected to vest. To the extent that actual forfeitures differ from the Company’s estimates, the differences are recorded as a cumulative adjustment in the period the estimates were revised. Stock-based compensation expense is classified as research and development or general and administrative based on the grantee’s respective compensation classification.

For stock option grants with vesting triggered by the achievement of performance-based milestones, the expense is recorded over the remaining service period after the point when the achievement of the milestone is probable or the performance condition has been achieved. For stock option grants with both performance-based milestones and market conditions, expense is recorded over the derived service period after the point when the achievement of the performance-based milestone is probable or the performance condition has been achieved. For stock option grants with market conditions, the expense is calculated using the Monte Carlo model based on the grant date fair value of the option and is recorded on a straight line basis over the requisite service period, which represents the derived service period and accelerated when the market condition is satisfied. The Company did not issue awards with market conditions during the nine months ended September 30, 2018. The Company accounts for stock options and restricted stock awards to non-employees using the fair value approach. Stock options and restricted stock awards to non-employees are subject to periodic revaluation over their vesting terms.

Warrant Accounting

As noted in Note 6, Capital Stock, the Company classifies a warrant to purchase shares of its common stock as a liability on its consolidated balance sheet if the warrant is a free-standing financial instrument that may require the Company to transfer consideration upon exercise. Each warrant of this type is initially recorded at fair value on date of grant using the Monte Carlo simulation model net of issuance costs, and is subsequently re-measured to fair value at each subsequent balance sheet date. Changes in fair value of the warrant are recognized as a component of other income (expense), net in the consolidated statement of operations and comprehensive loss. The Company will continue to adjust the liability for changes in fair value until the earlier of the exercise or expiration of the warrant.

Recent Accounting Pronouncements

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Changes to the Disclosure Requirements for Fair Value Measurement. The amendments in this update modify the disclosure requirements on fair value measurements based on the concepts in the Concepts Statement, including the consideration of costs and benefits. The amendments in this update are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019 with early adoption permitted upon issuance of this Update. The Company is currently evaluating the impact that the adoption of this guidance will have on the Company’s consolidated financial statements and related disclosures.

In June 2018, the FASB issued ASU No. 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share- Based Payment Accounting. This update is to simplify the aspects of accounting for nonemployee shared based payment transactions for acquiring goods or services from nonemployees. The amendments in this update are effective for fiscal years beginning after December 15, 2018, including interim periods within that year. The Company is currently evaluating the impact that the adoption of this guidance will have on the Company’s consolidated financial statements and related disclosures.

In July 2017, the FASB issued ASU No. 2017-11, Earnings Per Share (Topic 260): Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (PART I) Accounting for certain financial instruments with down round features. This update addresses the complexity of accounting for certain financial instruments with down round features. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company has concluded that this guidance has no impact on the presentation of its results of operations, financial position and disclosures.

In May 2017, the FASB issued ASU No. 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting. This standard provides guidance on changes to the terms or conditions of a share based payment award that requires an entity to apply modification accounting. The guidance is effective prospectively for annual periods beginning after December 15, 2017, and for interim periods and annual periods thereafter. There were no modifications to the Company’s share based payment awards during the nine months ended September 30, 2018.

In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows: Restricted Cash (“ASU 2016-18”). The amendments in this update require that amounts generally described as restricted cash and restricted cash equivalents be included within cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU 2016-18 was effective January 1, 2018. As a result of adopting ASU 2016-18, the Company includes its restricted cash balance in the cash and cash equivalents reconciliation of operating, investing and financing activities. The following table provides a reconciliation of cash, cash equivalents, and restricted cash within the statement of financial position that sum to the total of the same such amounts shown in the statement of cash flows.

	As of September 30,
	2018		2017
	(in thousands)
Cash and cash equivalents	$	5,192	$	10,798
Restricted cash		137		137
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows	$	5,329	$	10,935

In February 2016, the FASB issued ASU No. 2016-02- Leases (Topic 842). This standard requires companies to recognize on the balance sheet the assets and liabilities for the rights and obligations created by leased assets. ASU 2016-02 will be effective for the Company in the first quarter of 2019, with early adoption permitted. The Company estimates that it will recognize approximately $8 million to $10 million of right-of-use assets and corresponding lease liabilities on the balance sheet upon adoption. However, the population of contracts subject to balance sheet recognition and their initial measurement remains under evaluation; final balance sheet impacts will depend on the lease portfolio as the time of adoption. The Company does not expect that adoption will have a material impact on its results of operations or statement of cash flows.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (“Topic 606”), which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. In the fourth quarter of 2017, the Company early adopted ASC 606 and this standard applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases, insurance, collaboration arrangements and financial instruments. The Company had only one revenue arrangement as of the adoption date. Topic 606 requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. Topic 606 provides a five-step model for determining revenue recognition for arrangements that are within the scope of the standard: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of Topic 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations, and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. For a complete discussion of accounting for revenues, see Note 2, Revenue Recognition.

Loss Per Common Share

9 Months Ended

Sep. 30, 2018

Earnings Per Share [Abstract]

Loss Per Common Share

3. LOSS PER COMMON SHARE

The Company computes basic and diluted loss per share using a methodology that gives effect to the impact of outstanding participating securities (the “two-class method”). For the three and nine months ended September 30, 2018, there was dilution attributed to the weighted-average shares outstanding in the calculation of diluted loss per share.

	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
	(In thousands, except share and per share data)
Numerator:
Net Income (loss)	$	10,785		$	(5,995	)	$	(7,825	)	$	(19,618	)
Net income (loss) attributable to Series A Preferred Stock (a)		135			(915	)		(168	)		(3,238	)
Income (loss) attributable to common stockholders - basic	$	10,650		$	(5,080	)	$	(7,657	)	$	(16,380	)
Effect of dilutive securities:
Deduct change in fair value of warrant liability		(17,776	)		—			(12,524	)		—
Numerator for dilutive EPS-Earnings(loss) attributable to common stockholders after assumed conversions	$	(7,126	)	$	(5,080	)	$	(20,181	)	$	(16,380	)
Denominator:
Weighted-average number of common shares used in earnings (loss) per share - basic		29,737,632			22,552,341			28,723,500			22,219,666
Effect of dilutive securities:
Nonparticipating warrants		—			—			792,200			—
Denominator for diluted EPS-Adjusted weighted average shares		29,737,632			22,552,341			29,515,700			22,219,666
Earnings (loss) per share - basic	$	0.36		$	(0.23	)	$	(0.27	)	$	(0.74	)
Loss per share - diluted	$	(0.24	)	$	(0.23	)	$	(0.68	)	$	(0.74	)

(a)	The Series A Preferred Stock participates in income and losses.

The following potentially dilutive securities have been excluded from the computation of diluted weighted-average shares outstanding, as they would be anti-dilutive (in common stock equivalent shares):

	Three and Nine months ended September 30,
	2018		2017
Unvested restricted stock and options to purchase common stock		3,655,578		2,194,630
Series A preferred stock unconverted		177,996		3,826,920
Warrants exercisable into common stock		13,528,978		13,633,070

Property and Equipment

9 Months Ended

Sep. 30, 2018

Property Plant And Equipment [Abstract]

Property and Equipment

4. PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

	September 30,			December 31,
	2018			2017
	(in thousands)
Office equipment	$	279		$	279
Laboratory equipment		4,670			4,565
Leasehold improvements		7,711			7,712
Construction in progress		2,876			990
Software		96			96
Total property and equipment		15,632			13,642
Less: B depreciation		(11,280	)		(10,919	)
Property and equipment, net	$	4,352		$	2,723

Depreciation expense related to property and equipment amounted to $0.1 million and $0.4 million for the three months ended September 30, 2018 and 2017, respectively, and $0.4 million and $1.2 million for the nine months ended September 30, 2018 and 2017, respectively.

On September 5, 2018, the Company experienced a drop in stock price of 73%. As a result, the Company applied the multi-step process as described in FASB Accounting Standards Codification (“ASC”) Topic 360, “Property, Plant, and Equipment”. The first step requires the Company to determine whether there are indicators of impairment of its long-lived assets. It concluded that the drop in stock price was a triggering event for impairment. Step 2 of the process is to determine whether the carrying amount of the asset group is recoverable, based on a comparison of the total undiscounted future cash flows from the asset group to the carrying amount of the asset group. It was determined that the undiscounted cash flows are less than the carrying value of the net asset group. Step 3 is to measure the impairment loss by determining if the if the carrying value of the long-lived asset group exceeds its fair value. The Company concluded that the carrying value of the asset group did not exceed its fair value and therefore there is no impairment charge.

Commitments and Contingencies

9 Months Ended

Sep. 30, 2018

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

5. COMMITMENTS AND CONTINGENCIES

Operating Leases

The Company leases its office and research facilities in Waltham and Lexington, Massachusetts under non-cancellable operating leases. The Lexington, Massachusetts facility lease expires in June 2023. The Waltham, Massachusetts facility lease was extended in April 2017. The effective date of the extension is January 2018. Under the terms of the extension, the lease will expire in December 2024 with one extension term of five years. Terms of the agreements generally provide for an initial rent-free period and future rent escalation and provide that in addition to minimum lease rental payments, the Company is responsible for a pro-rata share of common area operating expenses.

Rent expense under operating lease agreements amounted to approximately $0.4 million and $0.2 million for the three months ended September 30, 2018 and 2017, respectively, and $1.2 million and $0.7 million for the nine months ended September 30, 2018 and 2017, respectively.

As an inducement to enter into its Lexington facility lease, the lessor agreed to provide the Company with a construction allowance of up to $1.0 million towards the total cost of tenant improvements. As an inducement to enter into the Waltham lease extension, the lessor agreed to provide the Company with a tenant improvement allowance not to exceed $0.9 million, of which $0.5 million can be applied to future rental payments. The Company has recorded these costs in the consolidated balance sheets as leasehold improvements, with the corresponding liability as deferred lease incentive. The liability is amortized on a straight-line basis over the term of the leases as a reduction of rent expense.

License Agreements

From time to time, the Company enters into various licensing agreements whereby the Company may use certain technologies in conjunction with its product research and development. Licensing agreements and the Company’s commitments under the agreements are as follows:

Hydrogel License

In May 2005, the Company entered into an exclusive license agreement with Angiotech Pharmaceuticals (US), Inc. for the use of certain patents, patent applications, and knowledge related to the manufacture and use of a hydrogel material in conjunction with NeoCart and certain other products (“Hydrogel License Agreement”). As of September 30, 2018, the Company has paid an aggregate $3.2 million in commercialization milestones under the terms of the Hydrogel License Agreement, which have been expensed to research and development.

Under the terms of the Hydrogel License Agreement, the Company’s future commitments include:

•

A one-time $3.0 million payment upon approval of an eligible product by the FDA; and

•

Single digit royalties on the net sales of NeoCart and certain other future products.

Tissue Regeneration License

In April 2001, the Company entered into an exclusive license agreement with The Board of Trustees of the Leland Stanford Junior University (“Stanford University”) for the use of certain technology to develop, manufacture and sell licensed products in the field of growth and regeneration of cartilage (“Tissue Regeneration License Agreement”). The term of the Tissue Regeneration License Agreement extends to the expiration date of Stanford University’s last to expire domestic or foreign patents. As of September 30, 2018, the Company has paid an aggregate $0.8 million in patent reimbursement costs, royalty fees, and commercialization milestone payments under the terms of the Tissue Regeneration License Agreement, which have been recorded to research and development expense.

Under the terms of the Tissue Regeneration License Agreement, the Company’s future commitments include:

•

A one-time $0.3 million payment upon approval of an eligible product by the FDA;

•

An annual minimum non-refundable royalty fee of $10 thousand for the life of the license that may be used to offset up to 50% of the earned royalty below; and

•

Low single digit royalties on net sales.

Honeycomb License

In March 2013, the Company entered into a license agreement with Koken Co., Ltd. (“Koken”) and paid a fee for a non-exclusive, non-transferable and non-sublicensable right to use its know-how related to the process for manufacturing atelocollagen honeycomb sponge materials, which is used in scaffolds (the “Honeycomb License Agreement”). Under the terms of the Honeycomb License Agreement, future commitments will be based on the amount of materials supplied to the Company and may vary from period to period over the term of the agreement.

Tissue Processor Sub-License

In December 2005, the Company entered into an exclusive agreement to sub-license certain technology from Purpose, Co. (“Purpose”), which is owned by a stockholder of the Company (“Sub-License Agreement”). Purpose entered into the original license agreement (“Original Agreement”) with Brigham and Women’s Hospital, Inc. (“Brigham and Women’s”) in August 2001. The Original Agreement shall remain in effect for the term of the licensed patents owned by Brigham and Women’s unless extended or terminated as provided for in the agreement. The technology is to be used to develop, manufacture, use and sell licensed products that cultivate cell or tissue development. The Sub-License Agreement extends to the expiration date of the last to expire domestic or foreign patents covered by the agreement. As of September 30, 2018, the Company has paid an aggregate $1.1 million in royalty and sub-license payments under the terms of the Sub-License Agreement.

The Sub-License Agreement was amended and restated in June 2012. Under the amended and restated agreement, the Company made Purpose the sole supplier of equipment the Company uses in its manufacturing processes and granted Purpose distribution rights of the Company’s products for certain territories. In exchange, Purpose allowed for the use of its technology (owned or licensed) and manufactured and serviced exogenous tissue processors used by the Company. Under the terms of the agreement, as amended, Purpose granted the Company: (a) exclusive rights to all of Purpose’s technology (owned or licensed) related to the exogenous tissue processors, (b) continued supply of exogenous tissue processors during the Company’s clinical trials, and (c) rights to manufacture the exogenous tissue processors at any location the Company chooses. In exchange for such consideration, the Company granted Purpose an exclusive license in Japan for the use of all of the Company’s technology and made a payment of $0.3 million to reimburse Purpose for development costs on a next generation tissue processor.

In May 2016, the Original Agreement was amended whereby the Company acquired the development and commercialization rights to NeoCart for the Japanese market from Purpose. Under the terms of the amended agreement, the Company assumes sole responsibility for and rights to the development and commercialization of NeoCart in Japan. In exchange for the transfer of development and commercialization rights, the Company will pay a success-based milestone to Purpose upon conditional approval of NeoCart in Japan, as well as commercial milestones and a low single digit royalty on Japanese sales of NeoCart, upon full approval, if any, in Japan.

In addition to the above, the Company’s future commitments under the terms of the Original Agreement and Sub-License Agreement include:

•

A minimum non-refundable annual royalty fee of $20 thousand, for the life of the license;

•

An additional, non-refundable annual royalty fee of $30 thousand from 2016 through 2019;

•

$10.2 million in potential milestone payments; and

•

Low single digit royalties on net sales of a licensed product.

The OCS Agreement

In connection with its research and development, the Company received grants from the Office of Chief Scientist of the Ministry of Industry and Trade in Israel (“OCS”) in the aggregate of $1.1 million for funding the fibroblast growth factor (“FGF”) program. In consideration for this grant, the Company is committed to pay royalties at a rate of 3% to 5% of the sales of sponsored products developed using the grant money, up to the amount of the participation payments received. The Company committed to pay up to 100% of grants received plus interest according to the LIBOR interest rate if the sponsored product is produced in Israel. If the manufacturing of the sponsored product takes place outside of Israel, the royalties can increase up to, but no more than, 300% of grants received plus interest based on the LIBOR interest rate, depending on the percentage of the manufacturing of sponsored product that takes place outside of Israel.

Collagen Supply Agreement

In September 2015, the Company entered into an agreement with Collagen Solutions (UK) Limited (the “Supplier”) to purchase soluble collagen that meets specifications provided by the Company. The initial term of the agreement is three years and will automatically renew from year to year thereafter unless otherwise terminated with at least 180 days’ notice by either party. In February 2017, the Company entered into an amendment with the Supplier. Pursuant to the amendment, the Company agreed to pay the Supplier approximately $0.1 million in exchange for eliminating the minimum annual order of material and/or services and any other amounts due to Supplier. As of September 30, 2018, the Company has paid $0.1 million under the terms of the amendment. There is no remaining obligation to be paid.

Capital Stock	9 Months Ended
Capital Stock	Sep. 30, 2018
Equity [Abstract]
Capital Stock	6. CAPITAL STOCK In March 2018, the Company entered into an equity distribution agreement (“ATM Agreement”) with Canaccord Genuity Inc. (“Canaccord”), pursuant to which the Company may, from time to time, sell shares of its common stock having an aggregate offering price of up to up to $10.0 million (the “Shares”) through Canaccord, as sales agent. The Shares will be offered and sold by the Company pursuant to its previously filed and currently effective Registration Statement on Form S-3 (Reg. No. 333-216741) (the “Registration Statement”). The Shares may only be offered and sold by means of a prospectus, including a prospectus supplement, forming part of the effective Registration Statement. Sales of the common stock, if any, will be made at market prices by methods deemed to be an “at the market offering” as defined in Rule 415 promulgated under the Securities Act of 1933, as amended (the “Securities Act”), including sales made directly on The Nasdaq Capital Market, on any other existing trading market for the common stock, or to or through a market maker other than on an exchange. During the nine months ended September 30, 2018, the Company sold an aggregate of 5,766,247 shares of common stock and received $4.0 million after deducting commissions related to the ATM Agreement. In January 2018, the Company completed an underwritten registered direct offering of 2,691,494 shares of common stock at a price of $2.35 per share. The total net proceeds of the offering were $5.7 million after deducting underwriter’s discounts and commissions, and expenses related to the offering. On September 29, 2016, the Company closed a private placement with certain institutional and accredited investors in which the Company received gross proceeds of $30.0 million (the “Private Placement”). The net proceeds after deducting placement agent fees and other transaction-related expenses was $27.6 million. At the closing, the Company issued 2,596,059 shares of the Company’s common stock at a per share price of $2.25 and 24,158.8693 shares of the Company’s newly-created Series A Convertible Preferred Stock (“Series A Preferred Stock”), which are convertible into approximately 10,737,275 shares of common stock. As of September 30, 2018, there were 400.4910 shares of Series A Preferred Stock outstanding, which remain convertible into 177,996 shares of the Company’s common stock. As part of the Private Placement, the investors received warrants to purchase up to 13,333,334 shares of the Company’s common stock at an exercise price of $2.25 per share. The placement agent for the Private Placement, H.C. Wainwright & Co. LLC (“HCW”), and certain of its affiliates were also granted warrants to purchase 133,333 shares of the Company’s common stock with an exercise price of $2.25 per share in exchange for the services provided by HCW. The placement agent warrants were considered a financing cost of the Company and included in warrant expense within the consolidated statements of operations. The warrants include a cashless-exercise feature that may be exercised solely in the event there is no effective registration statement, or no current prospectus available for, the resale of the shares of common stock underlying the warrants as of the six-month anniversary of the closing of the Private Placement. Upon a fundamental transaction, the holders of the warrant may require the Company to purchase any unexercised warrants in an amount equal to the Black-Scholes value of the warrant. A fundamental transaction is defined as a merger, sale of assets, sale of the Company, recapitalization of stock and a sale of stock whereby any owner after the transaction would own greater than 50% of the outstanding common stock in the Company. The warrants became exercisable following approval of the Private Placement by our stockholders in November 2016 and expire five years after the date of such stockholder approval. The Company determined the warrants are classified as a liability on the consolidated balance sheet because they contain a provision whereby in a fundamental transaction (as described above), the holder can elect to receive either the amount they are entitled to on an as-if-exercised basis or an amount based on the Black-Scholes value of the warrants at the time of the fundamental transaction. At the issuance date, the warrants were recorded at the fair value of $30.7 million and approximately $0.4 million excess of the fair value of the liability recorded for these warrants over the proceeds received was recorded as a charge to earnings in the third quarter of 2016 and included in warrant expense within the consolidated statement of operations. Concurrent with the closing of the Private Placement, the Company’s Certificate of Incorporation was amended by the filing of a Certificate of Designation to create the Series A Preferred Stock. The Series A Preferred Stock has a par value of $0.01 and each share is convertible into 444.44 shares of common stock, at a conversion price of $2.25 per share, at the option of the holder. The Series A Preferred Stock has no voting rights and is only entitled to dividends as declared on an as-converted basis. The Series A Preferred Stock contains no liquidation preferences or redemption rights and shares in distributions of the Company on an as-converted basis with the common stock. The Series A Preferred Stock shall not be converted if, after giving effect to the conversion, the holder and its affiliated persons would own beneficially more than 4.99% of our common stock (subject to adjustment up to 9.99% solely at the holder’s discretion upon 61 days’ prior notice to us or, solely as to a holder, if such limitation is waived by such holder upon execution of the private placement agreement). As part of the Private Placement, affiliates of certain members of the Company’s Board of Directors purchased an aggregate of 283,046 shares of common stock, an aggregate of 2,563.1439 shares of Series A Preferred Stock and received warrants to purchase up to 1,422,221 shares of common stock at an exercise price of $2.25 per share in the Private Placement. These amounts are included in the amounts noted above.

Warrants

9 Months Ended

Sep. 30, 2018

Warrants And Rights Note Disclosure [Abstract]

Warrants

7. WARRANTS

The Company has warrants to purchase its common stock outstanding as of September 30, 2018, as follows:

Issued

Classification

Warrants Outstanding

Exercise Price

Expiration

September 2016

Liability

13,466,667

2.25

November 2021

March 2015

Equity

3,699

9.75

March 2025

July 2014

Equity

6,566

7.99

July 2024

July 2012

Equity

52,046

0.01

July 2022

Stock-Based Compensation

9 Months Ended

Sep. 30, 2018

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock-Based Compensation

8. STOCK-BASED COMPENSATION

Stock option activity under the Company’s 2012 Equity Incentive Plan (the “2012 Plan”) and 2013 Equity Incentive Plan (the “2013 Plan”) for the nine months ended September 30, 2018 is summarized as follows:

	Number of Options			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2017		2,158,348		$	4.40		8.1	$	436
Granted		1,530,150			2.38
Exercised		(919	)		2.56
Cancelled		(32,001	)		2.71
Outstanding at September 30, 2018		3,655,578		$	3.57		8.3	$	—
Vested and expected to vest at September 30, 2018		3,288,917		$	3.69		8.2	$	—
Exercisable at September 30, 2018		1,460,898		$	4.86		7.2	$	—

As of September 30, 2018, the unrecognized compensation cost related to outstanding options was $2.5 million and is expected to be recognized as expense over approximately 2.51 years. As of September 30, 2018, the weighted average grant date fair value of vested options was $3.25 and the weighted average grant date fair value of options outstanding was $2.33. On October 1, 2018, the Company approved a repricing of 2,774,140 stock options granted prior to September 1, 2018. See Note 12 for further discussion of the repricing.

The weighted average grant date fair value per share of employee option grants was $1.06 and $1.14 for the three months ended September 30, 2018 and 2017, respectively, and $1.77 and $1.01 for the nine months ended September 30, 2018 and 2017, respectively.

Stock-Based Compensation Expense

The Company granted stock options to employees during the three and nine months ended September 30, 2018 and 2017. The Company estimates the fair value of stock options as of the date of grant using the Black-Scholes option pricing model and restricted stock based on the stock price, with the exception of those stock options that included a market condition. The Company estimates the fair value of stock options that include a market condition using a Monte-Carlo model. Stock options and restricted stock issued to non-board member, non-employees are accounted for using the fair value approach and are subject to periodic revaluation over their vesting terms.

Stock-based compensation expense amounted to $0.4 million and $0.4 million for the three months ended September 30, 2018 and 2017, respectively, and $1.2 million and $1.2 million for the nine months ended September 30, 2018 and 2017, respectively.

The allocation of stock-based compensation for all options granted and restricted stock awards is as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
	(in thousands)				(in thousands)
Research and development	$	131	$	86	$	352	$	326
General and administrative		307		283		897		907
Total stock-based compensation expense	$	438	$	369	$	1,249	$	1,233

The weighted-average assumptions used in the Black-Scholes option pricing model to determine the fair value of the employee stock option grants were as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
Risk-free interest rate		2.92	%		1.95	%		2.77	%		2.03	%
Expected volatility		86.4	%		60.0	%		87.5	%		63.1	%
Expected term (in years)		6.08		6.08				6.08			6.08
Expected dividend yield		0.0	%		0.0	%		0.0	%		0.0	%

The weighted-average assumptions used in the Black-Scholes option pricing model to determine the fair value of the non-employee stock option grants were as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
Risk-free interest rate		1.97	%		1.35	%		1.97	%		1.28	%
Expected volatility		74.0	%		59.7	%		74.0	%		63.0	%
Expected term (in years)		6.08			6.08			6.08			6.08
Expected dividend yield		0.0	%		0.0	%		0.0	%		0.0	%

Income Taxes	9 Months Ended
Income Taxes	Sep. 30, 2018
Income Tax Disclosure [Abstract]
Income Taxes	9. INCOME TAXES Deferred tax assets and deferred tax liabilities are recognized based on temporary differences between the financial reporting and tax basis of assets and liabilities using statutory rates. A valuation allowance is recorded against deferred tax assets if it is more likely than not that some or all of the deferred tax assets will not be realized. Due to the uncertainty surrounding the realization of the favorable tax attributes in future tax returns, the Company has recorded a full valuation allowance against the Company’s otherwise recognizable net deferred tax assets. The Company recorded no income tax expense or benefit during the nine months ended September 30, 2018 and 2017, due to a full valuation allowance recognized against its deferred tax assets. TAX REFORM The SEC issued Staff Accounting Bulletin No. 118 (“SAB 118”) on December 22, 2017. SAB 118 provides a one-year measurement period from a registrant’s reporting period that includes the Tax Cuts and Jobs Act of 2017 (“TCJA”) enactment date to allow the registrant sufficient time to obtain, prepare and analyze information to complete the accounting required under ASC 740. Although the Company made a reasonable estimate of the gross amounts of the deferred tax assets as discussed in our Annual Report on Form 10-K for the year ended December 31, 2017, a final determination of the TCJA’s impact on the deferred tax assets and related valuation allowance requirements remains incomplete pending a full analysis of the provisions of the TCJA and the related interpretations. The ultimate impact of the TCJA on the Company’s reported results in 2018 and beyond may differ from the estimates provided therein, possibly materially, due to, among other things, changes in interpretations and assumptions the Company has made, guidance that may be issued, and other actions the Company may take as a result of the TCJA, different from what is presently contemplated. As of September 30, 2018, the Company has not recorded incremental accounting adjustments related to the TCJA as it continues to consider interpretations of its application. However, we expect to complete the accounting by December 2018.

Equipment Loan Payable

9 Months Ended

Sep. 30, 2018

Debt Disclosure [Abstract]

Equipment Loan Payable

10. EQUIPMENT LOAN PAYABLE

The Company had the following outstanding borrowing obligations for the periods indicated:

	September 30,		December 31,
	2018		2017
	(in thousands)
Silicon Valley Bank Equipment Loan Payable	$	—	$	178
Less: current portion		—		(178	)
Long-term debt, net	$	—	$	—

In July 2014, the Company entered into a loan and security agreement with Silicon Valley Bank, which provided for a line of credit to finance certain equipment purchases up to an aggregate of $1.8 million through March 31, 2015. The line was payable in 36 monthly installments of principal and interest, with an annual interest rate of 2.75% plus the greater of 3.25% and the prime rate in effect at the time of each draw, as published in the Wall Street Journal. Draws under the line of credit were secured by a first priority lien over all equipment purchased using the line of credit. The Company was in compliance with all required covenants as of December 31, 2017 and May 31, 2018 at which date the loan matured and was repaid.

In accordance with the terms of the equipment line of credit, the Company issued a warrant to Silicon Valley Bank in July 2014 to purchase 6,566 shares of its common stock at an exercise price per share of $7.99 as discussed in Note 7.

Related Parties	9 Months Ended
Related Parties	Sep. 30, 2018
Related Party Transactions [Abstract]
Related Parties	11. RELATED PARTIES Intrexon Corporation In September 2014, the Company entered into an Exclusive Channel Collaboration Agreement (the “Collaboration Agreement”) with Intrexon Corporation (“Intrexon”) to use Intrexon’s proprietary technology for the development and commercialization of allogeneic cell therapeutics (the “Collaboration Products”) to treat or repair damaged articular hyaline cartilage in humans. The term of the Collaboration Agreement commenced upon the effective date, September 30, 2014, and continues until either written notice of termination is given by the Company within ninety days, or if either party creates a material breach that cannot be remedied within sixty days. Under the terms of the Collaboration Agreement, the Company is solely responsible for the costs to develop and commercialize any Collaboration Products with the following exceptions: (i) the establishment of certain manufacturing capabilities and facilities; (ii) the cost of basic research related to Intrexon’s proprietary technology outside of costs related to the Collaboration Products; (iii) payments related to certain in-licensed third party IP; (iv) the costs of filing, prosecution and maintenance of Intrexon patents; and (v) any other costs mutually agreed upon as being the responsibility of Intrexon. As partial consideration, the Company will pay commercialization milestones totaling $12 million, if and when achieved, and sales milestones totaling $22.5 million, if and when achieved. The milestone payments are payable in cash or shares of the Company’s common stock at the option of the Company. In the event the Company is sold prior to making any of these milestone payments and the Collaboration Agreement is transferred in the sale, the milestone payments would be payable in cash. The Company is also required to make low double-digit royalty payments to Intrexon on any gross profit arising from the sale of Collaboration Products and to pay an intermediate double-digit percentage of any sublicensing revenue it receives. Under the terms of the Collaboration Agreement, the Company reimburses Intrexon for 50% of the product research and development costs with the remaining 50% due after acceptance by the FDA or equivalent regulatory authority of an Investigational New Drug Application or equivalent regulatory filing of a collaboration product or upon 90 day written notice of cancellation by the Company. There were no expenses incurred under the collaboration for the nine months ended September 30, 2018 and 2017. The total accrued expenses due to Intrexon at September 30, 2018 and December 31, 2017 were $3.0 million and $3.0 million, respectively. These expenses were included in research and development in the consolidated statements of operations at the time they were incurred. Purpose, Co. In June 2012, the Company entered into an agreement with Purpose to amend its previous agreements. In the previous agreements, Purpose granted the Company a perpetual license to its patents related to its exogenous tissue processor which is used in the development of the Company’s products. In exchange, the Company granted Purpose a perpetual license to all of the Company’s biotechnology and biomaterial for use in Japan. The agreement provided for Purpose to manufacture and sell machinery to the Company for cost until the Company’s products become commercially viable. The Company also agreed to pay royalties on any third-party revenue generated using Purpose’s licensed technology. Under the June 2012 amendment, the Company received exclusive rights to all of Purpose’s technology related to the exogenous tissue processor, continued supply of exogenous tissue processors during the Company’s clinical trials, and rights to manufacture the exogenous tissue processors at any location the Company chooses. In exchange for such consideration, the Company named Purpose the sole manufacturer of equipment and also clarified the geographic territories of the exclusive license that Purpose was granted for use of the Company’s technology. In addition, the Company agreed to reimburse Purpose for $0.3 million of development costs on a next generation tissue processer. Refer to the discussion under Note 5, Tissue Processor Sub-License. In May 2016, the Company acquired the development and commercialization rights to NeoCart for the Japanese market from Purpose. Under the terms of the amended agreement, the Company assumes sole responsibility for and rights to the development and commercialization of NeoCart in Japan. In exchange for the transfer of development and commercialization rights, the Company will pay a success-based milestone to Purpose upon conditional approval of NeoCart in Japan, as well as commercial milestones and a low single digit royalty on Japanese sales of NeoCart, upon full approval, if any, in Japan. The Company paid Purpose $0.1 million and $0.1 million in the nine months ended September 30, 2018 and 2017, respectively.

Subsequent Events	9 Months Ended
Subsequent Events	Sep. 30, 2018
Subsequent Events [Abstract]
Subsequent Events	12. SUBSEQUENT EVENTS On October 10, 2018, the Company closed an underwritten public offering of 26,155,000 shares of its common stock and warrants to purchase up to 19,616,250 shares of common stock, at a combined purchase price of $0.65 per share of common stock and accompanying warrant. The gross proceeds from this offering were $17.0 million, before deducting underwriting discounts and commissions, and offering expenses payable by the Company. The warrants are exercisable immediately upon issuance at a price of $0.70 per share of common stock and have a term of five years commencing on the date of issuance. From October 1, 2018 through November 6, 2018, the Company sold an aggregate of 867,656 shares of its common stock and received $0.5 million after deducting commissions related to the ATM Agreement. On October 1, 2018, the Compensation Committee (the “Committee”) of the Company’s Board of Directors (the “Board”), following consultation with the full Board, approved a repricing of 2,774,140 stock options granted prior to September 1, 2018 (the “Repricing”). The options had exercise prices between $0.75628 and $9.97 per share, which were reduced to $0.568 per share. In connection with the Repricing, on October 1, 2018, the Committee also approved the cancelation of certain options with performance-based vesting conditions (the “Performance Options”) previously issued to Messrs. Gridley, Lieber and Kennedy. Messrs. Gridley, Lieber and Kennedy were previously granted the Performance Options to purchase 60,000, 30,000 and 30,000 shares of the Company’s common stock, respectively, which would vest in full if the Company’s stock price was at or above $19.92 for any consecutive 60-day period within 4 years of the date of grant as long as the recipient provided continuous service during such consecutive 60-day period (the “Performance Criteria”). The Committee determined that the probability of achieving the Performance Criteria was unlikely based on the current trading price of the Company’s common stock on The Nasdaq Capital Market and cancelled the Performance Options pursuant to the Committee’s authority under the 2013 Plan.

Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2018

Accounting Policies [Abstract]

Fair Value Measurements

Level 1 : Unadjusted quoted prices in active markets that are accessible at the measurement date of identical, unrestricted assets.

Description	Total		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
	(in thousands)
September 30, 2018
Assets:
Cash Equivalents
Money market funds	$	3,933	$	3,933	$	—	$	—
Total	$	3,933	$	3,933	$	—	$	—
Liabilities:
Warrant liability	$	2,155	$	—	$	—	$	2,155
December 31, 2017
Assets:
Cash Equivalents
Money market funds	$	5,547	$	5,547	$	—	$	—
Marketable securities
Asset-backed securities	$	900	$	—	$	900	$	—
Liabilities:
Warrant liability	$	14,679	$	—	$	—	$	14,679

The following table provides a reconciliation of all liabilities measured at fair value using Level 3 significant unobservable inputs:

		September 30, 2018
		(in thousands)
Beginning balance, December 31, 2017	$		14,679
Change in fair value of warrant liability			(12,524	)
Ending balance	$		2,155

Cash and Cash Equivalents

Marketable Securities

Revenue Recognition

Collaboration Revenue

License and Collaboration Arrangements

MEDINET Co., Ltd.

Stock-Based Compensation

Warrant Accounting

Recent Accounting Pronouncements

	As of September 30,
	2018		2017
	(in thousands)
Cash and cash equivalents	$	5,192	$	10,798
Restricted cash		137		137
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows	$	5,329	$	10,935

Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2018

Accounting Policies [Abstract]

Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis

As of September 30, 2018, and December 31, 2017, the Company’s financial assets recognized at fair value consisted of the following:

Description	Total		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
	(in thousands)
September 30, 2018
Assets:
Cash Equivalents
Money market funds	$	3,933	$	3,933	$	—	$	—
Total	$	3,933	$	3,933	$	—	$	—
Liabilities:
Warrant liability	$	2,155	$	—	$	—	$	2,155
December 31, 2017
Assets:
Cash Equivalents
Money market funds	$	5,547	$	5,547	$	—	$	—
Marketable securities
Asset-backed securities	$	900	$	—	$	900	$	—
Liabilities:
Warrant liability	$	14,679	$	—	$	—	$	14,679

Schedule of Reconciliation of Liabilities Measured at Fair Value

The following table provides a reconciliation of all liabilities measured at fair value using Level 3 significant unobservable inputs:

		September 30, 2018
		(in thousands)
Beginning balance, December 31, 2017	$		14,679
Change in fair value of warrant liability			(12,524	)
Ending balance	$		2,155

Schedule of Reconciliation of Cash, Cash Equivalents, and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents, and restricted cash within the statement of financial position that sum to the total of the same such amounts shown in the statement of cash flows.

	As of September 30,
	2018		2017
	(in thousands)
Cash and cash equivalents	$	5,192	$	10,798
Restricted cash		137		137
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows	$	5,329	$	10,935

Loss Per Common Share (Tables)

9 Months Ended

Sep. 30, 2018

Earnings Per Share [Abstract]

Schedule of Basic and Diluted Loss Per Common Share

For the three and nine months ended September 30, 2018, there was dilution attributed to the weighted-average shares outstanding in the calculation of diluted loss per share.

	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
	(In thousands, except share and per share data)
Numerator:
Net Income (loss)	$	10,785		$	(5,995	)	$	(7,825	)	$	(19,618	)
Net income (loss) attributable to Series A Preferred Stock (a)		135			(915	)		(168	)		(3,238	)
Income (loss) attributable to common stockholders - basic	$	10,650		$	(5,080	)	$	(7,657	)	$	(16,380	)
Effect of dilutive securities:
Deduct change in fair value of warrant liability		(17,776	)		—			(12,524	)		—
Numerator for dilutive EPS-Earnings(loss) attributable to common stockholders after assumed conversions	$	(7,126	)	$	(5,080	)	$	(20,181	)	$	(16,380	)
Denominator:
Weighted-average number of common shares used in earnings (loss) per share - basic		29,737,632			22,552,341			28,723,500			22,219,666
Effect of dilutive securities:
Nonparticipating warrants		—			—			792,200			—
Denominator for diluted EPS-Adjusted weighted average shares		29,737,632			22,552,341			29,515,700			22,219,666
Earnings (loss) per share - basic	$	0.36		$	(0.23	)	$	(0.27	)	$	(0.74	)
Loss per share - diluted	$	(0.24	)	$	(0.23	)	$	(0.68	)	$	(0.74	)

(a)	The Series A Preferred Stock participates in income and losses.

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

	Three and Nine months ended September 30,
	2018		2017
Unvested restricted stock and options to purchase common stock		3,655,578		2,194,630
Series A preferred stock unconverted		177,996		3,826,920
Warrants exercisable into common stock		13,528,978		13,633,070

Property and Equipment (Tables)

9 Months Ended

Sep. 30, 2018

Property Plant And Equipment [Abstract]

Schedule of Property and Equipment

Property and equipment consisted of the following:

	September 30,			December 31,
	2018			2017
	(in thousands)
Office equipment	$	279		$	279
Laboratory equipment		4,670			4,565
Leasehold improvements		7,711			7,712
Construction in progress		2,876			990
Software		96			96
Total property and equipment		15,632			13,642
Less: B depreciation		(11,280	)		(10,919	)
Property and equipment, net	$	4,352		$	2,723

Warrants (Tables)

9 Months Ended

Sep. 30, 2018

Warrants And Rights Note Disclosure [Abstract]

Schedule of Warrants to Purchase Common Stock Outstanding

The Company has warrants to purchase its common stock outstanding as of September 30, 2018, as follows:

Issued

Classification

Warrants Outstanding

Exercise Price

Expiration

September 2016

Liability

13,466,667

2.25

November 2021

March 2015

Equity

3,699

9.75

March 2025

July 2014

Equity

6,566

7.99

July 2024

July 2012

Equity

52,046

0.01

July 2022

- Definition

Tabular disclosure of warrants or rights issued. Warrants and rights outstanding are derivative securities that give the holder the right to purchase securities (usually equity) from the issuer at a specific price within a certain time frame. Warrants are often included in a new debt issue to entice investors by a higher return potential. The main difference between warrants and call options is that warrants are issued and guaranteed by the company, whereas options are exchange instruments and are not issued by the company. Also, the lifetime of a warrant is often measured in years, while the lifetime of a typical option is measured in months. Disclose the title of issue of securities called for by warrants and rights outstanding, the aggregate amount of securities called for by warrants and rights outstanding, the date from which the warrants or rights are exercisable, and the price at which the warrant or right is exercisable.

+ References + Details

Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2018

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Summary of Stock Option Activity Under the 2012 and 2013 Plans

	Number of Options			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2017		2,158,348		$	4.40		8.1	$	436
Granted		1,530,150			2.38
Exercised		(919	)		2.56
Cancelled		(32,001	)		2.71
Outstanding at September 30, 2018		3,655,578		$	3.57		8.3	$	—
Vested and expected to vest at September 30, 2018		3,288,917		$	3.69		8.2	$	—
Exercisable at September 30, 2018		1,460,898		$	4.86		7.2	$	—

Summary of Stock-Based Compensation for all Options Granted and Restricted Stock Awards

The allocation of stock-based compensation for all options granted and restricted stock awards is as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
	(in thousands)				(in thousands)
Research and development	$	131	$	86	$	352	$	326
General and administrative		307		283		897		907
Total stock-based compensation expense	$	438	$	369	$	1,249	$	1,233

Summary of Weighted-Average Assumptions Used in the Black-Scholes Option Pricing Model to Determine the Fair Value of the Employee Stock Option Grants

The weighted-average assumptions used in the Black-Scholes option pricing model to determine the fair value of the employee stock option grants were as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
Risk-free interest rate		2.92	%		1.95	%		2.77	%		2.03	%
Expected volatility		86.4	%		60.0	%		87.5	%		63.1	%
Expected term (in years)		6.08		6.08				6.08			6.08
Expected dividend yield		0.0	%		0.0	%		0.0	%		0.0	%

Summary of Weighted-Average Assumptions Used in the Black-Scholes Option Pricing Model to Determine the Fair Value of the Non-Employee Stock Option Grants

The weighted-average assumptions used in the Black-Scholes option pricing model to determine the fair value of the non-employee stock option grants were as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
Risk-free interest rate		1.97	%		1.35	%		1.97	%		1.28	%
Expected volatility		74.0	%		59.7	%		74.0	%		63.0	%
Expected term (in years)		6.08			6.08			6.08			6.08
Expected dividend yield		0.0	%		0.0	%		0.0	%		0.0	%

Equipment Loan Payable (Tables)

9 Months Ended

Sep. 30, 2018

Debt Disclosure [Abstract]

Schedule of Outstanding Borrowing Obligations

The Company had the following outstanding borrowing obligations for the periods indicated:

	September 30,		December 31,
	2018		2017
	(in thousands)
Silicon Valley Bank Equipment Loan Payable	$	—	$	178
Less: current portion		—		(178	)
Long-term debt, net	$	—	$	—

Nature of Business - Additional Information (Detail) - USD ($)			1 Months Ended		9 Months Ended
	Oct. 10, 2018	Sep. 29, 2016	Nov. 06, 2018	Jan. 31, 2018	Sep. 30, 2018	Dec. 31, 2017
Nature Of Business And Basis Of Presentation [Line Items]
Net proceeds of offering after deducting underwriting discounts and commissions					$ 8,164,000
Accumulated deficit					$ 216,012,000	$ 208,187,000
Common Stock [Member]
Nature Of Business And Basis Of Presentation [Line Items]
Shares issued				2,691,494
Net proceeds of offering after deducting underwriting discounts and commissions				$ 5,700,000
Combined purchase price				$ 2.35
Private Placement [Member]
Nature Of Business And Basis Of Presentation [Line Items]
Proceeds from issuance of common stock, preferred stock and warrants, net of issuance costs		$ 27,600,000
Class of Warrants or right to purchase common stock		13,333,334
Combined purchase price		$ 2.25
Warrant exercise price		$ 2.25			$ 2.25
Private Placement [Member] \| Common Stock [Member]
Nature Of Business And Basis Of Presentation [Line Items]
Shares issued		2,596,059
At-The-Market Sales Agreement [Member] \| Common Stock [Member]
Nature Of Business And Basis Of Presentation [Line Items]
Shares issued					5,766,247
Net proceeds of offering after deducting underwriting discounts and commissions					$ 4,000,000
At-The-Market Sales Agreement [Member] \| Common Stock [Member] \| Subsequent Event [Member]
Nature Of Business And Basis Of Presentation [Line Items]
Shares issued			867,656
Net proceeds of offering after deducting underwriting discounts and commissions			$ 500,000
At-The-Market Sales Agreement [Member] \| Common Stock [Member] \| Maximum [Member]
Nature Of Business And Basis Of Presentation [Line Items]
Aggregate offering price of shares					$ 10,000,000
Underwritten Public Offering [Member] \| Subsequent Event [Member]
Nature Of Business And Basis Of Presentation [Line Items]
Class of Warrants or right to purchase common stock	19,616,250
Gross proceeds from offering, before deducting underwriting discounts and commissions and offering expenses	$ 17,000,000
Warrant exercise price	$ 0.70
Warrants exercisable term	5 years
Underwritten Public Offering [Member] \| Common Stock [Member] \| Subsequent Event [Member]
Nature Of Business And Basis Of Presentation [Line Items]
Shares issued	26,155,000
Underwritten Public Offering [Member] \| Common Stock and Warrants [Member] \| Subsequent Event [Member]
Nature Of Business And Basis Of Presentation [Line Items]
Combined purchase price	$ 0.65

Summary of Significant Accounting Policies - Additional Information (Detail) ¥ in Millions	1 Months Ended				9 Months Ended
	Sep. 30, 2018 USD ($)	Sep. 30, 2018 CNY (¥)	Jan. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Sep. 30, 2018 USD ($)	Mar. 31, 2019 USD ($)
Summary Of Significant Accounting Policies [Line Items]
Transfers between Levels 1, 2 and 3	$ 0			$ 0	$ 0
Restricted cash	100,000			100,000	100,000
Available for sale securities	0				0
MEDINET Co. [Member]
Summary Of Significant Accounting Policies [Line Items]
Upfront cash payment under license agreement			$ 10,000,000
Remaining performance obligations	$ 10,000,000				$ 10,000,000
Remaining performance obligation explanation					Expects to recognize revenue on approximately 75% and 100% of the remaining performance obligations over the next 12 months and the following 12 months, respectively.
Percentage of recognize revenue next 12 months					50.00%
Percentage of recognize revenue following 12 months					100.00%
Remaining performance obligation expected period	12 months				12 months
Royalties at percentage rates ranging					Low single digits to low double digits
Development milestone payments		¥ 330			$ 2,900,000
Regulatory payments	$ 1,000,000	720			7,400,000
Commercial Milestones Payment		¥ 7,300			64,100,000
Non-refundable upfront amount				10,000,000
Deferred license agreement cost	800,000				800,000
MEDINET Co. [Member] \| License Agreement [Member]
Summary Of Significant Accounting Policies [Line Items]
Cost incurred related to license agreement					900,000
ASU 2014-09 [Member]
Summary Of Significant Accounting Policies [Line Items]
Cumulative impact	0				0
ASU 2016-02 [Member] \| Minimum [Member] \| Scenario, Forecast [Member]
Summary Of Significant Accounting Policies [Line Items]
Right-of-use assets						$ 8,000,000
ASU 2016-02 [Member] \| Maximum [Member] \| Scenario, Forecast [Member]
Summary Of Significant Accounting Policies [Line Items]
Right-of-use assets						$ 10,000,000
Significant Unobservable Inputs (Level 3) [Member] \| Fair Value Measurement Recurring [Member]
Summary Of Significant Accounting Policies [Line Items]
Assets, fair value disclosure, recurring	0			0	0
Liabilities, fair value disclosure, recurring	$ 0			$ 0	$ 0

Summary of Significant Accounting Policies - Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Assets:
Money market funds, fair value	$ 3,933	$ 5,547
Cash Equivalents, fair value	3,933
Liabilities:
Warrant liability, fair value	2,155	14,679
Asset Backed Securities [Member]
Assets:
Marketable securities, fair value		900
Quoted Prices in Active Markets (Level 1) [Member]
Assets:
Money market funds, fair value	3,933	5,547
Cash Equivalents, fair value	3,933
Significant Other Observable Inputs (Level 2) [Member] \| Asset Backed Securities [Member]
Assets:
Marketable securities, fair value		900
Significant Unobservable Inputs (Level 3) [Member]
Liabilities:
Warrant liability, fair value	$ 2,155	$ 14,679

Summary of Significant Accounting Policies - Schedule of Reconciliation of Liabilities Measured at Fair Value (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Change in fair value of warrant liability	$ (17,776)	$ 269	$ (12,524)	$ 673
Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning balance			14,679
Change in fair value of warrant liability			(12,524)
Ending balance	$ 2,155		$ 2,155

Summary of Significant Accounting Policies - Schedule of Reconciliation of Cash, Cash Equivalents, and Restricted Cash (Detail) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017	Sep. 30, 2017
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Cash and cash equivalents	$ 5,192	$ 7,081
Restricted cash	100	$ 100
ASU 2016-18 [Member]
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Cash and cash equivalents	5,192		$ 10,798
Restricted cash	137		137
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows	$ 5,329		$ 10,935

Loss Per Common Share - Schedule of Basic and Diluted Loss Per Common Share (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Numerator:
Net Income (loss)	$ 10,785	$ (5,995)	$ (7,825)	$ (19,618)
Net income (loss) attributable to Series A Preferred Stock	135	(915)	(168)	(3,238)
Income (loss) attributable to common stockholders - basic	10,650	(5,080)	(7,657)	(16,380)
Effect of dilutive securities:
Change in fair value of warrant liability	(17,776)	269	(12,524)	673
Numerator for dilutive EPS-Earnings(loss) attributable to common stockholders after assumed conversions	$ (7,126)	$ (5,080)	$ (20,181)	$ (16,380)
Denominator:
Weighted-average number of common shares used in earnings (loss) per share - basic	29,737,632	22,552,341	28,723,500	22,219,666
Effect of dilutive securities:
Nonparticipating warrants			792,200
Denominator for diluted EPS-Adjusted weighted average shares	29,737,632	22,552,341	29,515,700	22,219,666
Earnings (loss) per share - basic	$ 0.36	$ (0.23)	$ (0.27)	$ (0.74)
Loss per share - diluted	$ (0.24)	$ (0.23)	$ (0.68)	$ (0.74)

Loss Per Common Share - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Detail) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Series A Preferred Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from computation of earnings per share	177,996	3,826,920	177,996	3,826,920
Unvested Restricted Stock and Options to Purchase Common Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from computation of earnings per share	3,655,578	2,194,630	3,655,578	2,194,630
Warrants Exercisable into Common Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from computation of earnings per share	13,528,978	13,633,070	13,528,978	13,633,070

Property and Equipment - Schedule of Property and Equipment (Detail) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 15,632	$ 13,642
Less: B depreciation	(11,280)	(10,919)
Property and equipment, net	4,352	2,723
Office Equipment [Member]
Property, Plant and Equipment [Line Items]
Total property and equipment	279	279
Laboratory Equipment [Member]
Property, Plant and Equipment [Line Items]
Total property and equipment	4,670	4,565
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Total property and equipment	7,711	7,712
Construction in Progress [Member]
Property, Plant and Equipment [Line Items]
Total property and equipment	2,876	990
Software [Member]
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 96	$ 96

Property and Equipment - Additional Information (Detail) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Sep. 05, 2018
Property Plant And Equipment [Abstract]
Depreciation expense	$ 100,000	$ 400,000	$ 364,000	$ 1,178,000
Percentage of stock price drop					73.00%
Asset impairment charge			$ 0

Commitments and Contingencies - Additional Information (Detail)	1 Months Ended			3 Months Ended		9 Months Ended
	Feb. 28, 2017 USD ($)	Sep. 30, 2015	Jun. 30, 2012 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2018 USD ($) Option	Sep. 30, 2017 USD ($)
Loss Contingencies [Line Items]
Rent expense under operating lease agreements				$ 400,000	$ 200,000	$ 1,200,000	$ 700,000
Research and development expense				4,563,000	$ 3,488,000	12,307,000	$ 12,200,000
Collagen Supply Agreement [Member]
Loss Contingencies [Line Items]
Amount to be paid upon FDA approval				0		$ 0
Supplier agreement description						The initial term of the agreement is three years and will automatically renew from year to year thereafter unless otherwise terminated with at least 180 days’ notice by either party.
Initial term of the agreement		3 years
Minimum amount of material and/or services	$ 100,000
Amount paid during period for amending the agreement						$ 100,000
OCS Agreement [Member]
Loss Contingencies [Line Items]
Accrued and received grants, aggregate				1,100,000		1,100,000
Tissue Processor Sub License Agreement [Member]
Loss Contingencies [Line Items]
Research and development expense						1,100,000
Reimbursement for development cost			$ 300,000
Additional non-refundable royalty fee						$ 30,000
Additional non-refundable royalty fee payment description						2016 through 2019
Potential milestone payments				10,200,000		$ 10,200,000
Hydrogel License Agreement [Member]
Loss Contingencies [Line Items]
Research and development expense						3,200,000
Amount to be paid upon FDA approval				3,000,000		3,000,000
Tissue Regeneration License Agreement [Member]
Loss Contingencies [Line Items]
Research and development expense						800,000
Amount to be paid upon FDA approval				300,000		$ 300,000
Percentage of royalty offsetting						50.00%
Maximum [Member] \| OCS Agreement [Member]
Loss Contingencies [Line Items]
Royalties payment, rate						5.00%
Royalty payment percentage as percentage of grant received						300.00%
Minimum [Member] \| OCS Agreement [Member]
Loss Contingencies [Line Items]
Royalties payment, rate						3.00%
Royalty payment percentage as percentage of grant received						100.00%
Minimum [Member] \| Tissue Processor Sub License Agreement [Member]
Loss Contingencies [Line Items]
Non-refundable royalty fee						$ 20,000
Minimum [Member] \| Tissue Regeneration License Agreement [Member]
Loss Contingencies [Line Items]
Non-refundable royalty fee						10,000
Waltham [Member]
Loss Contingencies [Line Items]
Tenant improvement allowance for future rental payments						500,000
Waltham [Member] \| Maximum [Member]
Loss Contingencies [Line Items]
Tenant improvement allowance				$ 900,000		$ 900,000
Waltham [Member] \| Massachusetts [Member]
Loss Contingencies [Line Items]
Effective date of amended lease						Jan. 01, 2018
Lease termination date						Dec. 31, 2024
Number of additional renewal terms \| Option						1
Additional operating lease term				5 years		5 years
Lexington [Member] \| Maximum [Member]
Loss Contingencies [Line Items]
Construction allowances to total cost of tenant improvements						$ 1,000,000
Lexington [Member] \| Massachusetts [Member]
Loss Contingencies [Line Items]
Lease expiration period						2023
Number of additional renewal terms \| Option						1
Additional operating lease term				5 years		5 years

Capital Stock - Additional Information (Detail) - USD ($)		1 Months Ended	9 Months Ended
	Sep. 29, 2016	Jan. 31, 2018	Sep. 30, 2018
Class Of Stock [Line Items]
Proceeds from issuance of common stock			$ 8,164,000
Minimum threshold percentage of beneficial common stock interest	4.99%
Maximum threshold percentage of beneficial common stock interest on holder's discretion	9.99%
Convertible preferred stock, terms of conversion			The Series A Preferred Stock shall not be converted if, after giving effect to the conversion, the holder and its affiliated persons would own beneficially more than 4.99% of our common stock (subject to adjustment up to 9.99% solely at the holder’s discretion upon 61 days’ prior notice to us or, solely as to a holder, if such limitation is waived by such holder upon execution of the private placement agreement).
Private Placement [Member]
Class Of Stock [Line Items]
Common stock price per share	$ 2.25
Gross proceeds from issuance of common stock, preferred stock and warrants	$ 30,000,000
Conversion of preferred stock in to common stock, preferred stock converted	10,737,275		444.44
Class of Warrants or right to purchase common stock	13,333,334
Class of Warrants or right to purchase common stock, exercise price	$ 2.25		$ 2.25
Warrants granted to placement agent	133,333
Proceeds from issuance of common stock, preferred stock and warrants, net of issuance costs	$ 27,600,000
Warrants granted to placement agent, exercise price	$ 2.25
Minimum percentage of outstanding common stock			50.00%
Warrants expiry period			5 years
Warrants exercisable period			6 months
Fair value of warrants			$ 30,700,000
Excess fair value of warrant liability			$ 400,000
Convertible preferred stock, par value			$ 0.01
Private Placement [Member] \| Members of Board of Directors [Member]
Class Of Stock [Line Items]
Class of Warrants or right to purchase common stock			1,422,221
Class of Warrants or right to purchase common stock, exercise price			$ 2.25
Private Placement [Member] \| Series A Preferred Stock [Member]
Class Of Stock [Line Items]
Number of shares issued	24,158.8693
Convertible preferred stock, shares outstanding			400.4910
Private Placement [Member] \| Series A Preferred Stock [Member] \| Members of Board of Directors [Member]
Class Of Stock [Line Items]
Number of shares issued			2,563.1439
Common Stock [Member]
Class Of Stock [Line Items]
Number of shares issued		2,691,494
Proceeds from issuance of common stock		$ 5,700,000
Common stock price per share		$ 2.35
Common Stock [Member] \| At-The-Market Sales Agreement [Member]
Class Of Stock [Line Items]
Number of shares issued			5,766,247
Proceeds from issuance of common stock			$ 4,000,000
Common Stock [Member] \| Private Placement [Member]
Class Of Stock [Line Items]
Number of shares issued	2,596,059
Common Stock [Member] \| Private Placement [Member] \| Members of Board of Directors [Member]
Class Of Stock [Line Items]
Number of shares issued			283,046
Common Stock [Member] \| Private Placement [Member] \| Series A Preferred Stock [Member]
Class Of Stock [Line Items]
Conversion of preferred stock in to common stock, preferred stock converted			177,996
Common Stock [Member] \| Maximum [Member] \| At-The-Market Sales Agreement [Member]
Class Of Stock [Line Items]
Aggregate offering price of shares			$ 10,000,000

Warrants - Schedule of Warrants to Purchase Common Stock Outstanding (Detail)	9 Months Ended
	Sep. 30, 2018 $ / shares shares
Warrants Issued September 2016 [Member]
Class of Warrant or Right [Line Items]
Issued	2016-09
Warrants Outstanding \| shares	13,466,667
Exercise Price \| $ / shares	$ 2.25
Expiration	2021-11
Warrants Issued March 2015 [Member]
Class of Warrant or Right [Line Items]
Issued	2015-03
Warrants Outstanding \| shares	3,699
Exercise Price \| $ / shares	$ 9.75
Expiration	2025-03
Warrants Issued July 2014 [Member]
Class of Warrant or Right [Line Items]
Issued	2014-07
Warrants Outstanding \| shares	6,566
Exercise Price \| $ / shares	$ 7.99
Expiration	2024-07
Warrants Issued July 2012 [Member]
Class of Warrant or Right [Line Items]
Issued	2012-07
Warrants Outstanding \| shares	52,046
Exercise Price \| $ / shares	$ 0.01
Expiration	2022-07

Stock-Based Compensation - Summary of Stock Option Activity Under the 2012 and 2013 Plans (Detail) - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Number of Options, Outstanding Beginning Balance	2,158,348
Number of Options, Granted	1,530,150
Number of Options, Exercised	(919)
Number of Options, Cancelled	(32,001)
Number of Options, Outstanding Ending Balance	3,655,578	2,158,348
Number of Options, Vested and expected to vest outstanding	3,288,917
Number of Options, Exercisable	1,460,898
Weighted Average Exercise Price, Outstanding Beginning Balance	$ 4.40
Weighted Average Exercise Price, Granted	2.38
Weighted Average Exercise Price, Exercised	2.56
Weighted Average Exercise Price, Cancelled	2.71
Weighted Average Exercise Price, Outstanding Ending Balance	3.57	$ 4.40
Weighted Average Exercise Price, Vested and expected to vest outstanding	3.69
Weighted Average Exercise Price, Exercisable	$ 4.86
Weighted Average Remaining Contractual Term, Outstanding	8 years 3 months 18 days	8 years 1 month 6 days
Weighted Average Remaining Contractual Term, Vested and expected to vest outstanding	8 years 2 months 12 days
Weighted Average Remaining Contractual Term, Exercisable	7 years 2 months 12 days
Aggregate Intrinsic Value, Outstanding		$ 436

Stock-Based Compensation - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended		9 Months Ended
	Oct. 01, 2018	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost related to outstanding options		$ 2,500		$ 2,500
Weighted average grant date fair value of vested options				$ 3.25
Weighted average grant date fair value of options outstanding		$ 2.33		$ 2.33
Stock options granted				1,530,150
Weighted average grant date fair value per share of employee option granted		$ 1.06	$ 1.14	$ 1.77	$ 1.01
Stock-based compensation expense		$ 438	$ 369	$ 1,249	$ 1,233
Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost, recognition period				2 years 6 months 3 days
Stock Option Repricing [Member] \| Subsequent Event [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options granted	2,774,140

Stock-Based Compensation - Summary of Stock-Based Compensation for all Options Granted and Restricted Stock Awards (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	$ 438	$ 369	$ 1,249	$ 1,233
Research and Development [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	131	86	352	326
General and Administrative [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	$ 307	$ 283	$ 897	$ 907

Stock-Based Compensation - Summary of Weighted-Average Assumptions Used in the Black-Scholes Option Pricing Model to Determine the Fair Value of the Employee Stock Option Grants (Detail)	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Share Based Compensation Arrangement By Share Based Payment Award Fair Value Assumptions And Methodology [Abstract]
Risk-free interest rate	2.92%	1.95%	2.77%	2.03%
Expected volatility	86.40%	60.00%	87.50%	63.10%
Expected term (in years)	6 years 29 days	6 years 29 days	6 years 29 days	6 years 29 days
Expected dividend yield	0.00%	0.00%	0.00%	0.00%

Stock-Based Compensation - Summary of Weighted-Average Assumptions Used in the Black-Scholes Option Pricing Model to Determine the Fair Value of the Non-Employee Stock Option Grants (Detail)	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Share Based Goods And Nonemployee Services Transaction [Abstract]
Risk-free interest rate	1.97%	1.35%	1.97%	1.28%
Expected volatility	74.00%	59.70%	74.00%	63.00%
Expected term (in years)	6 years 29 days	6 years 29 days	6 years 29 days	6 years 29 days
Expected dividend yield	0.00%	0.00%	0.00%	0.00%

Income Taxes - Additional Information (Detail) - USD ($)	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Income Tax Disclosure [Abstract]
Income tax expense or benefit	$ 0	$ 0

Equipment Loan Payable - Schedule of Outstanding Borrowing Obligations (Detail) $ in Thousands	Dec. 31, 2017 USD ($)
Debt Instrument [Line Items]
Less: current portion	$ (178)
Silicon Valley Bank [Member]
Debt Instrument [Line Items]
Total debt	$ 178

Equipment Loan Payable - Additional Information (Detail) - Silicon Valley Bank [Member] - USD ($)	1 Months Ended	9 Months Ended
	Jul. 31, 2014	Sep. 30, 2018
Class of Warrant or Right [Line Items]
Amount of loan to purchase equipment	$ 1,800,000
Line of credit facility, interest rate, stated percentage	3.25%
Bank loan and security agreement, repayment period	36 months
Debt instrument, maturity date		May 31, 2018
Warrants Outstanding	6,566
Exercise Price	$ 7.99
Prime Rate [Member]
Class of Warrant or Right [Line Items]
Amount of loan bears interest basis spread on variable rate	2.75%

Related Parties - Additional Information (Detail) - USD ($)	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017	Jun. 30, 2012
Intrexon [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Collaboration Agreement cancellation notification	90 days
Collaboration Agreement cancellation with material breach that cannot be remedied	60 days
Accrued expenses due to related party	$ 3,000,000		$ 3,000,000
Intrexon [Member] \| Research and Development [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Percentage of reimbursement expenses	50.00%
Percentage of reimbursement expenses subject to acceptance	50.00%
Research and development expense from transaction with Intrexon	$ 0	$ 0
Intrexon [Member] \| Commercialization Milestones [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Commercialization milestones obligation	12,000,000
Intrexon [Member] \| Sales Milestones [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Sales milestones	22,500,000
Purpose, Co. [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Reimbursement for development cost, amount				$ 300,000
Reimbursement for development cost, paid	$ 100,000	$ 100,000

Subsequent Events - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands			1 Months Ended		9 Months Ended
	Oct. 10, 2018	Oct. 01, 2018	Nov. 06, 2018	Jan. 31, 2018	Sep. 30, 2018
Subsequent Event [Line Items]
Net proceeds of offering after deducting underwriting discounts and commissions					$ 8,164
Stock options granted					1,530,150
Stock options exercise price, lower range					$ 0.75628
Stock options exercise price, upper range					$ 9.97
Stock options cancelled					32,001
Common Stock [Member]
Subsequent Event [Line Items]
Shares issued				2,691,494
Combined purchase price				$ 2.35
Net proceeds of offering after deducting underwriting discounts and commissions				$ 5,700
At-The-Market Sales Agreement [Member] \| Common Stock [Member]
Subsequent Event [Line Items]
Shares issued					5,766,247
Net proceeds of offering after deducting underwriting discounts and commissions					$ 4,000
Subsequent Event [Member]
Subsequent Event [Line Items]
Stock options vesting period		4 years
Threshold days for performance criteria		60 days
Subsequent Event [Member] \| Minimum [Member]
Subsequent Event [Line Items]
Share price		$ 19.92
Subsequent Event [Member] \| Stock Option Repricing [Member]
Subsequent Event [Line Items]
Stock options granted		2,774,140
Stock options reduced exercise price		$ 0.568
Subsequent Event [Member] \| Performance Options [Member] \| Gridley [Member]
Subsequent Event [Line Items]
Stock options cancelled		60,000
Subsequent Event [Member] \| Performance Options [Member] \| Lieber [Member]
Subsequent Event [Line Items]
Stock options cancelled		30,000
Subsequent Event [Member] \| Performance Options [Member] \| Kennedy [Member]
Subsequent Event [Line Items]
Stock options cancelled		30,000
Subsequent Event [Member] \| Underwritten Public Offering [Member]
Subsequent Event [Line Items]
Class of Warrants or right to purchase common stock	19,616,250
Gross proceeds from offering, before deducting underwriting discounts and commissions and offering expenses	$ 17,000
Warrant exercise price	$ 0.70
Warrants exercisable term	5 years
Subsequent Event [Member] \| Underwritten Public Offering [Member] \| Common Stock [Member]
Subsequent Event [Line Items]
Shares issued	26,155,000
Subsequent Event [Member] \| Underwritten Public Offering [Member] \| Common Stock and Warrants [Member]
Subsequent Event [Line Items]
Combined purchase price	$ 0.65
Subsequent Event [Member] \| At-The-Market Sales Agreement [Member] \| Common Stock [Member]
Subsequent Event [Line Items]
Shares issued			867,656
Net proceeds of offering after deducting underwriting discounts and commissions			$ 500