The accompanying notes are an integral part of these condensed consolidated financial statements.
The accompanying notes are an integral part of these condensed consolidated financial statements.
The accompanying notes are an integral part of these condensed consolidated financial statements.
The accompanying notes are an integral part of these condensed consolidated financial statements.
Notes to Condensed Consolidated
Financial Statements
1. Nature of the Business
Nightstar Therapeutics plc (the “Company”) is a clinical-stage gene therapy company focused on developing and commercializing novel one-time treatments for patients suffering from rare inherited retinal diseases that would otherwise progress to blindness. The Company is developing a pipeline of proprietary product candidates that are designed to substantially modify or halt the progression of inherited retinal diseases for which there are no currently approved treatments. The Company’s lead product candidate, NSR-REP1, for the treatment of choroideremia is in Phase 3 clinical development. The Company’s second product candidate, NSR-RPGR, is in Phase 2/3 clinical development for the treatment of X-linked retinitis pigmentosa. The Company also has product candidates in preclinical development for a number of inherited retinal diseases for which there are no approved treatments such as Stargardt disease.
2. Basis of Presentation
The terms “Nightstar” and “the Company” each refer to Nightstar Therapeutics plc and its subsidiaries, unless the context indicates otherwise. The accompanying unaudited consolidated condensed financial statements were prepared in accordance with generally accepted accounting principles in the United States (“GAAP”), for interim financial information and with the instructions to Form 10-Q and Article 10 and Article 8 of Regulation S-X of the Securities and Exchange Commission (“SEC”). Accordingly, certain information and footnote disclosure have been condensed or omitted.
These unaudited consolidated condensed financial statements should be read in conjunction with the consolidated financial statements and accompanying notes to consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. In the Company’s opinion, the accompanying unaudited consolidated condensed financial statements reflect all adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation, in all material respects, of the information contained herein. Results for the interim periods are not necessarily indicative of results that may be expected for the year.
See the recently adopted accounting pronouncements section in Note 11 below for information concerning the adoption of new accounting guidance. Except for these changes, Nightstar has consistently applied the accounting policies to all periods presented in these unaudited condensed consolidated financial statements. The adoption of new accounting guidance did not result in significant changes in the Company’s reporting of its assets, liabilities, equity, operations and cash flow.
3. Foreign Currency Translation
On January 1, 2019, the Company adopted the U.S. dollar as its functional currency. The change from the pound sterling is due to the continued expansion of our operations in the U.S. and the change in anticipated long-term shift of operations from the United Kingdom to the U.S in 2019 and beyond. This resulted in a significant reduction in foreign currency transaction gains and losses in 2019, when compared to prior periods. The foreign currency exchange transaction gain was $0.1 million for the three months ended March 31, 2019, compared to a foreign currency transaction exchange loss of $5.9 million in the three months ended March 31, 2018. Foreign exchange transaction gains and losses are included net in other income (expense) in the condensed consolidated statement of operations and comprehensive loss for the respective periods.
Foreign currency exchange gains and losses are driven primarily by balances of cash, cash equivalents and marketable securities, as well as accounts payable, denominated in a currency other than the Company’s functional currency. A significant majority of these balances are denominated in U.S. dollars. Prior to January 1, 2019, the functional currency of the Company was the pound sterling. Accordingly, a substantial portion of foreign currency transaction gains and losses in the years and interim periods in prior periods related to the exchange rate changes between the U.S. dollar and pound sterling on the U.S. dollar denominated funds held by the Company.
The Company’s reporting currency has been and continues to be the U.S. dollar. For periods prior to January 1, 2019, the functional currency was pounds sterling and the reporting currency was the U.S. dollar. Translation adjustments were not included in the determination of net loss; they were included as foreign currency translation adjustments in accumulated other comprehensive income (loss), a component of shareholders’ equity. With the adoption of the U.S. dollar as the Company’s functional currency, the cumulative foreign currency translation adjustment of $4.9 million as of January 1, 2019, will be retained as a part of shareholders’ equity. The Company recorded a foreign currency translation adjustment gain of $6.3 million for three months ended March 31, 2018 and none for the three months ended March 31, 2019.
6
4. Fair Value of Financial Assets and Liabilities
The Company’s investments are all classified within Levels 1 and 2 of the fair value hierarchy. The Company’s investments classified within Level 1 of the fair value hierarchy are valued based quoted prices in active markets. The Company’s investments classified in Level 2 of the fair value hierarchy are based on matrix pricing compiled by third party pricing vendors, using observable market inputs such as interest rates, yield curves, and credit risk. For cash, current receivables, and accounts payable, the carrying amounts approximate fair value because of the short maturity of these instruments, and therefore fair value information is not included in the table below (in thousands):
|
March 31, 2019
|
|
|
December 31, 2018
|
|
|
Total
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Total
|
|
|
Level 1
|
|
|
Level 2
|
|
Money market funds and short-term
U.S. Treasury securities, included in
cash and cash equivalents
|
$
|
92,586
|
|
|
$
|
92,586
|
|
|
$
|
—
|
|
|
$
|
23,514
|
|
|
$
|
23,514
|
|
|
$
|
—
|
|
U.S Treasury securities
|
$
|
58,944
|
|
|
|
38,420
|
|
|
|
20,524
|
|
|
$
|
136,385
|
|
|
|
100,949
|
|
|
|
35,436
|
|
|
$
|
151,530
|
|
|
$
|
131,006
|
|
|
$
|
20,524
|
|
|
$
|
159,899
|
|
|
$
|
124,463
|
|
|
$
|
35,436
|
|
The Company did not have transfers in or out of Level 3 of the fair value hierarchy during the three months ended March 31, 2019 and 2018.
The Company had no liabilities measured at fair value on a recurring basis as of March 31, 2019 and December 31, 2018.
5. Marketable securities
As of March 31, 2019, the Company held the following investments in marketable securities classified as available-for-sale (in thousands):
|
|
Maturity
|
|
Amortized
cost
|
|
|
Gross
Unrealized
Holding Gains
(Losses)
|
|
|
Aggregate
Estimated Fair
Value
|
|
U.S. Treasury securities (1)
|
|
1 - 3 months
|
|
$
|
57,952
|
|
|
$
|
992
|
|
|
$
|
58,944
|
|
As of December 31, 2018, the Company held the following investments in marketable securities classified as available-for-sale (in thousands):
|
|
Maturity
|
|
Amortized
cost
|
|
|
Gross
Unrealized
Holding Gains
(Losses)
|
|
|
Aggregate
Estimated Fair
Value
|
U.S. Treasury securities
(1)
|
|
3 - 9 months
|
|
$
|
133,899
|
|
|
$
|
2,486
|
|
|
$
|
136,385
|
|
(1)
|
Gross unrealized holding gains (losses) includes $0.9 million and $2.5 million impact of foreign currency exchange rate fluctuations as of March 31, 2019 and December 31, 2018, respectively.
|
All of the Company’s investments are classified as available-for-sale and are carried at fair value with unrealized gains and losses recorded as a component of accumulated other comprehensive income (loss), net of related income taxes.
The Company did not have any investments in marketable securities at March 31, 2018.
No securities have been in an unrealized loss position for more than one year. Gross unrealized holding gains of $0.8 million are reported in accumulated other comprehensive income at March 31, 2019, net of tax.
During the three months ended March 31, 2019, the Company realized $1.3 million in foreign currency gains on the settlement of maturing marketable securities as a result of favorable foreign currency exchange rate fluctuations. Realized gains and losses are determined using the specific identification method, reclassified from accumulated other comprehensive income and included in other income, net on the statement of comprehensive income.
6. Share-Based Compensation
Under its equity incentive plans, the Company granted 1,160,355 options to acquire shares at the weighted average price of $14.17, the closing selling prices on the dates of the grants, in the three months ended March 31, 2019. In the three months ended March 31,
7
2018, the
Company
granted 676,576 opt
ions to acquire shares at the weighted average price of $13.82, the closing selling prices on the dates of the grants. In the
three months
ended March 31, 2019 and 2018, there were no restricted shares awarded.
The following share-based compensation expense was recognized for the periods indicated (in thousands):
|
|
Three months ended March 31,
|
|
|
|
2019
|
|
|
2018
|
|
Research and development
|
|
$
|
629
|
|
|
$
|
301
|
|
General and administrative
|
|
|
1,105
|
|
|
|
535
|
|
Total share-based compensation
|
|
$
|
1,734
|
|
|
$
|
836
|
|
The Company grants equity awards under its share-based compensation programs, which awards may include share options, restricted share awards (“RSAs”), restricted share units (“RSUs”) and other share-based awards. To date, the share-based awards granted to employees and directors have been in the form of RSAs, RSUs and share options.
The Company recognizes compensation expense for equity awards based on the grant date fair value of the award on a straight-line basis over the requisite service period. The Company uses the fair value of its ordinary shares to determine the fair value of RSAs and RSUs. The fair value of options is determined using the Black-Scholes option pricing model. The Company accounts for forfeitures as they occur.
7. Earnings per Share
Basic and diluted net loss per ordinary share are determined by dividing the net loss by the weighted average number of ordinary shares outstanding during the period. For the periods presented, the weighted average shares outstanding used to calculate both basic and diluted net loss per ordinary share are the same because the inclusion of the Company’s outstanding common share equivalents would be anti-dilutive. The securities excluded from the earnings per share calculation for the three months periods were:
|
|
March 31,
|
|
|
|
2019
|
|
|
2018
|
|
Unvested RSAs and RSUs
|
|
|
549,743
|
|
|
|
1,093,751
|
|
Unvested and vested share options
|
|
|
2,253,121
|
|
|
|
867,851
|
|
8. Research and Development Tax Credit
As a company that carries out extensive research and development activities, the Company seeks to benefit from U.K. research and development tax credit cash rebate regimes. Based on criteria established by Her Majesty’s Revenue and Customs (“HMRC”), the Company expects a proportion of its expenditures in relation to its pipeline research, clinical trials management and manufacturing development activities to be eligible for inclusion within tax credit cash rebate regimes.
The Company recorded U.K. research and development tax credits as an offset to research and development expense in the condensed consolidated statements of operations and comprehensive loss of $1.9 million and
$1.4 million for the three months ended March 31, 2019 and 2018, respectively.
9. Income Taxes
The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the condensed consolidated financial statements or in its tax returns. Deferred tax assets and liabilities are determined on the basis of the differences between the condensed consolidated financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Changes in deferred tax assets and liabilities are recorded in the provision for income taxes. The Company assesses the likelihood that deferred tax assets will be recovered in the future and, to the extent management believes, based upon the weight of available evidence, that it is more likely than not that all or a portion of the deferred tax assets will not be realized, a valuation allowance is established through a charge to income tax expense. Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected and considering prudent and feasible tax planning strategies.
For the three months ended March 31, 2019, the Company recognized income tax expense of $39,000 and net tax impact to other comprehensive loss of $0.2 million. There was no income tax provision for the three months ended March 31, 2018. The Company has not recorded any amounts for unrecognized tax benefits as of March 31, 2019 and December 31, 2018.
8
The Company files income tax returns in the United Kingdom, United States and certain state and local jurisdictions. The income tax returns are generally subject to
tax examinations for the tax years ended December 31, 2013 through December 31, 2018. There are currently no pending income tax return examinations.
Research and development tax credits received from HMRC are recognized as offsets to research and development expenses.
10. Related Party Transactions
As more fully described in Note 15 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, in the normal course of business, the Company has entered into agreements with entities that are considered to be related parties. In the three months ended March 31, 2019, the Company reported no significant business with entities affiliated with Syncona Partner LLP, Syncona Limited. In the three months ended March 31, 2019, activities with University of Oxford and its subsidiaries incurred $0.1 million of research expenses, and reported a remaining unpaid obligation of $0.2 million. In the three months ended March 31, 2019, the Company incurred $82,000 of research expenses, and reported remaining unpaid obligations of $0.1 million with Prof. Robert MacLaren, a former member of the Company’s board of directors.
11. Commitments and Contingencies
Implementation Agreement costs
Pursuant to the terms of the Implementation Agreement with Biogen Switzerland Holdings GmbH (together with its affiliates, “Biogen”) and Tungsten Bidco Limited (“Bidco”), Bidco agreed to acquire the entire issued and to be issued share capital of the Company for $25.50 in cash per ordinary share, par value £0.01 per share (the “Company Shares”). Under the terms of the Implementation Agreement, the acquisition will be implemented by means of a scheme of arrangement to be undertaken by the Company under Part 26 of the UK Companies Act 2006.
In the three months ended March 31, 2019, the Company recognized $5.8 million in cost in the performance of its due diligence review and other costs related to the Implementation Agreement. For the three months ended March 31, 2019 these costs are reported in general and administrative expense. If the Implementation Agreement is terminated by the Company under certain circumstances, including termination by the Company following receipt of an unsolicited bona fide written acquisition proposal that the Company’s Board of Directors determines constitutes a superior proposal, the Company will be required to pay to Biogen a compensatory fee of $8.8 million. The Company expects additional expenses will be incurred in connection with the closing of the transaction with Biogen.
Legal Proceedings
Three shareholder complaints have been filed in connection with the pending acquisition of the Company by Biogen (the “Acquisition”). On April 23, 2019, Stephen Bushansky, a purported holder of American Depositary Shares (“ADSs”) of the Company, filed a complaint in the United States District Court for the District of Massachusetts, captioned
Stephen Bushansky v. Nightstar Therapeutics plc et al.
, Civil Action No. 1:19-cv-10903, against the Company and each member of its board of directors (the “Board”). On April 26, 2019, Earl Wheby, a purported Company shareholder, filed a putative federal securities class action complaint in the United States District Court for the District of Delaware, captioned
Earl M. Wheby, Jr. v. Nightstar Therapeutics plc et al.
, Case No. 1:19-cv-00761-UNA,against the Company, each member of the Board and Biogen Inc. Also on April 26, 2019, Brennan Evans, a purported Company shareholder, filed a complaint in the United States District Court for the Southern District of New York, captioned
Brennan Evans v. Nightstar Therapeutics plc et al.
, Case No. 1:19-cv-03743, against the Company and each member of the Board. On May 1, 2019, the plaintiff in
Wheby
voluntarily dismissed his complaint without prejudice.
The complaints generally allege, among other things, that the defendants violated federal securities laws and regulations by disseminating or allowing to be disseminated a proxy statement in connection with the Acquisition that purportedly omits or misrepresents material information. The complaints seek, among other things, relief enjoining the defendants from proceeding with the Acquisition and any vote on the Acquisition; or, in the event the Acquisition is completed, rescinding the Acquisition and setting it aside or awarding rescissory damages. The Company believes that the plaintiffs’ allegations are without merit and intends to vigorously defend against them. It is possible that additional lawsuits related to the Acquisition may be filed in the future.
From time to time, the Company may be a party to litigation or subject to claims incident to the ordinary course of business. Although the results of litigation and claims cannot be predicted with certainty, the Company currently believes that the final outcome of these ordinary course matters will not have a material adverse effect on its business. Regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources and other factors. The Company did not have contingency reserves established for any liabilities as of March 31, 2019 and December 31, 2018.
9
Indemnification
In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and provide for general indemnification. The Company’s exposure under these agreements is unknown because it involves claims that may be made against the Company in the future. To date, the Company has not paid any claims or been required to defend any action related to its indemnification obligations. However, the Company may record charges in the future as a result of these indemnification obligations.
In accordance with its Articles of Association and individual indemnification agreements, the Company has indemnification obligations to its officers and directors for certain events or occurrences, subject to certain limits, while they are serving at the Company’s request in such capacity. There have been no claims to date, and the Company has director and officer insurance that may enable it to recover a portion of any amounts paid for future potential claims.
12. Recently issued accounting pronouncements
Recently issued accounting pronouncements not yet adopted
In August 2018, the Financial Accounting Standard Board (“FASB”) issued Accounting Standards Updates (“ASU”
) 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”)
, reducing certain disclosures concerning the fair value hierarchy. The guidance is effective for the Company in annual periods beginning after December 15, 2019, and interim periods within those annual periods. The Company does not expect the adoption of this guidance to have a material impact on the Company’s condensed consolidated financial statements.
In June 2016, the FASB issued
ASU 2016-13, Financial Instruments Credit Losses (Topic 326) (“ASU 2016-13”)
, which requires consideration of a broader range of reasonable and supportable information to developing credit loss estimates. The guidance is effective for the fiscal year beginning January 1, 2020, including interim periods within that fiscal year. The Company does not expect the adoption of this guidance to have a material impact on the Company’s condensed consolidated financial statements.
The Company has considered other recent accounting pronouncements and concluded that they are either not applicable to the business, or that the effect is not expected to be material to the condensed consolidated consolidated financial statements as a result of future adoption.
Recently adopted accounting pronouncements
In June 2018, the FASB issued
ASU 2018-07, Compensation—Stock Compensation (Topic 718) - Improvements to Nonemployee Share-Based Payment Accounting
that largely aligns the accounting for share-based payment awards issued to employees and nonemployees, with certain exceptions. The standard became effective for the Company beginning January 1, 2019. Adoption of this standard did not have a material impact on the Company’s condensed consolidated financial statements.
In July 2018, the FASB issued
ASU 2018-09 (“ASU 2018-09”), Codification Improvements.
The ASU 2018-09 provides updates and clarifications to a number of previously issued accountings standards and such updates and clarifications are effective concurrently with the related standards. As of January 1, 2019, the Company adopted these clarifications consistent with the guidance in the ASU; the various updates and clarifications to previously issued accounting standards become effective for the Company concurrently with the adoption of the related standards. Adoption of this standard did not have a material impact on the Company’s condensed consolidated financial statements.
In February 2016, the FASB issued
ASU 2016-02 (“ASU 2016-02”), Leases,
that requires a lessee to recognize a lease liability and a right-of-use (“ROU”) asset for all leases with lease terms of more than 12 months and requires disclosure of key information about leasing arrangements. Leases are classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The classification criteria for distinguishing between operating and finance (previously capital) leases are substantially similar to the previous lease guidance.
ASU 2016-02 became effective for the Company as of January 1, 2019. The Company elected the modified retrospective approach with transition methods that allowed it to prospectively apply the standard as of the adoption date. The Company also elected the package of practical expedients permitted under the transition guidance that allowed the Company to carryforward the historical operating lease classifications of its existing agreements. The new guidance also provided practical expedients for the entity’s accounting. The Company made an accounting policy election to keep leases with an initial term of 12 months or less off of the balance sheet and recognize those lease payments in the consolidated statements of operations on a straight-line basis over the lease term. The Company also elected the practical expedient to not separate lease and non-lease components for all of its leases as the non-lease components are not significant to the overall lease costs.
10
The adoption of this guidance on January 1, 2019 did not materially affect the Company’s
condensed consolidated
balance sheet
s, results of operations, cash flow or liquidity. The adoption resulted in recognition as of January 1, 2019 of a
n
ROU
asset
and lease liabilit
ies o
f
$
1.0
million on its consolidated balance sheets, and no impact
on
its condensed consolidated results of operations
or condensed consolidated statements of equity.
ROU assets are included in Other assets and the corresponding lease obligations are included in Accrued expenses and other liabilities and Long-term lease ob
ligations on
the
condensed consolidated
consolidated balance sheet.
The impact of adopting ASU 2016-
02
on the
Consolidated
Balance Sheet is as follows (in thousands):
|
|
January 1, 2019
Prior to ASU
2016-02
Adoption
|
|
|
ASU 2016-02
Adjustment
|
|
|
January 1, 2019
As Adjusted
|
|
Prepaid expense and other current assets
|
|
$
|
6,605
|
|
|
$
|
(65
|
)
|
(1)
|
$
|
6,540
|
|
Other assets
|
|
$
|
409
|
|
|
$
|
984
|
|
(2)
|
$
|
1,393
|
|
Accrued expenses and other liabilities
|
|
$
|
11,360
|
|
|
$
|
(122
|
)
|
(3)
|
|
|
|
Accrued expenses and other liabilities
|
|
|
|
|
|
$
|
548
|
|
(4)
|
$
|
11,786
|
|
Long term lease obligations
|
|
$
|
—
|
|
|
$
|
495
|
|
(4)
|
$
|
495
|
|
|
(1)
|
Represents reclassification of prepaid rent to ROU assets, previously reported in Prepaid expense and other current assets.
|
|
(2)
|
Represents capitalization of ROU assets and reclassification of prepaid rent and deferred rent to operating lease assets, reported in Other assets.
|
|
(3)
|
Represents reclassification of deferred rent to ROU assets, previously reported in Accrued expenses and other liabilities.
|
|
(4)
|
Represents recognition of operating lease liabilities, reported in Accrued expenses and other liabilities.
|
13. Leases
On May 24, 2018, NightstaRx Limited (“NSL”), a subsidiary of Nightstar Therapeutics plc, entered into an agreement to receive the assignment of the lease for its new office on Midford Place in London, United Kingdom. This office also serves as the corporate headquarters of the Company. The assignment of the lease to NSL became effective on June 8, 2018 and the operating lease will expire on October 30, 2020. The rent is approximately £198,000 ($261,000) per annum, payable quarterly. NSL provided the landlord with an upfront security deposit of approximately £119,000 ($157,000), including value added tax. As part of this agreement, NSL also received a one-time rent concession payment from the landlord in the amount of £75,000 ($99,000) plus value added taxes. NSL’s performance under the lease is guaranteed by Nightstar Therapeutics plc. With the adoption of ASU 2016-02, the Company recorded a ROU asset and corresponding lease liability.
On April 6, 2018, Nightstar, Inc. (“NSI”), a subsidiary of Nightstar Therapeutics plc, entered into a sublease for its new corporate headquarters in Waltham, Massachusetts. The sublease provides NSI with approximately 12,000 rentable square feet for general office use. The sublease became effective on April 26, 2018 and the operating lease will expire in March 2021. The initial rent for the office space is approximately $209,000 per annum, increasing every year by approximately 6%. As part of the agreement, NSI arranged for a letter of credit for $58,000 as security for the sublease. With the adoption of ASU 2016-02, the Company recorded a ROU asset and corresponding lease liability.
On January 10, 2017, NSL entered into a noncancelable sublease for a facility in Lexington, Massachusetts for its U.S. operations. The lease related to the facility commenced on February 1, 2017 and is scheduled to terminate in June 2020. The lease is classified as an operating lease. The Company is committed to making aggregate lease payments of $86,000 in 2018, $89,000 in 2019 and $46,000 in 2020. This Lexington office space is currently considered excess and has been sublet to recover costs. With the adoption of ASU 2016-02, the Company recorded a ROU asset and corresponding lease liability.
The Company entered into noncancelable operating leases for certain equipment to be used in its clinical research in its U.S. operations. These lease arrangements are not significant in comparison to the Company’s total operating lease assets and liabilities. The Company has identified no embedded lease arrangements in its other contracts.
The Company identified and assessed the following estimates in recognizing the ROU asset and corresponding liability:
Expected lease term: The expected lease term for those leases commencing prior to January 1, 2019 did not change with the adoption of ASU 2016-02. The expected lease term for leases commencing after the adoption of ASU 2016-02 includes noncancelable lease periods and, when applicable, periods covered by an option to extend the lease if the Company is reasonably certain to exercise that option, as well as periods covered by an option to terminate the lease if the Company is reasonably certain not to exercise that option. Some leases include an option to renew for a period of time, and the exercise of lease renewal options is at the Company’s sole discretion. None of these options to renew are recognized as part of the Company’s ROU asset or lease liability as of March 31, 2019, as renewal was determined to not be reasonably assured.
11
Incremental borrowing r
ate: As the discount rates in the Company’s lease are not implicit, the Company estimated the incremental borrowing rate based on the rate of interest the Company would have to pay to borrow a similar amount on a collateralized basis over a similar term.
The following table summarizes the lease assets and liabilities at the date shown (in thousands):
|
|
March 31, 2019
|
|
ROU assets, included in Other assets
|
|
$
|
863
|
|
Total ROU assets
|
|
$
|
863
|
|
Current operating lease labilities, included in Accrued expenses and
other current liabilities
|
|
$
|
624
|
|
Long term lease obligations
|
|
$
|
351
|
|
Total lease liabilities
|
|
$
|
975
|
|
The aggregate operating lease expense of $0.1 million for the three months ended March 31, 2019 are included in research and development and general and administrative expenses. These operating lease costs include short-term leases, which is immaterial.
The following table summarizes the maturity of undiscounted payments due under lease liabilities and the present value of those liabilities at the date shown: (in thousands):
|
|
March 31, 2019
|
|
2019
|
|
$
|
508
|
|
2020
|
|
|
450
|
|
2021
|
|
|
58
|
|
Total
|
|
|
1,016
|
|
Present value adjustment
|
|
|
(41
|
)
|
Present value of lease liabilities
|
|
$
|
975
|
|
The following table summarizes the lease term and discount rate at the date shown:
|
|
March 31, 2019
|
|
Weighted average remaining lease term (years)
|
|
1.7
|
|
Weighted average discount rate
|
|
|
5.0
|
%
|
The following table summarized the cash paid for amounts included in the measurement of lease liabilities for the period shown (in thousands):
|
|
Three months ended
March 31, 2019
|
|
Cash paid for amounts included in the measurement of lease liabilities
|
|
$
|
81
|
|
Operating cash flows from operating leases
|
|
$
|
81
|
|
14. Subsequent events
On May 8, 2019, the requisite number of the Company’s shareholders voted to approve the Implementation Agreement with Biogen Switzerland Holdings GmbH and Tungsten Bidco Limited. Pursuant to the terms of the Implementation Agreement, the acquisition will be implemented by means of a scheme of arrangement to be undertaken by the Company under Part 26 of the UK Companies Act 2006. The acquisition remains subject to a sanction at a court hearing by the High Court of Justice in England and Wales, which is anticipated to take place on or about June 5, 2019, and the delivery of a copy of the court order to the Registrar of Companies. The acquisition is expected to be consummated on or about June 7, 2019, subject to timely receipt of all required approvals and satisfaction of the requirements of the Implementation Agreement.
12