0000891293-21-000008 | 10-K | XBRL Viewer

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Cover Page - USD ($) $ in Millions	12 Months Ended
Cover Page - USD ($) $ in Millions	Dec. 31, 2020	Mar. 10, 2021	Jun. 30, 2020
Cover [Abstract]
Document Type	10-K
Document Annual Report	true
Current Fiscal Year End Date	--12-31
Document Period End Date	Dec. 31, 2020
Document Transition Report	false
Entity File Number	000-28386
Entity Registrant Name	CTI BIOPHARMA CORP.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	91-1533912
Entity Address, Address Line One	3101 Western Avenue
Entity Address, Address Line Two	Suite 800
Entity Address, City or Town	Seattle
Entity Address, State or Province	WA
Entity Address, Postal Zip Code	98121
City Area Code	206
Local Phone Number	282-7100
Title of 12(b) Security	Common Stock, $0.001 par value per share
Trading Symbol	CTIC
Security Exchange Name	NASDAQ
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
ICFR Auditor Attestation Flag	false
Entity Shell Company	false
Entity Public Float			$ 77.3
Entity Common Stock, Shares Outstanding		76,687,332
Documents Incorporated by Reference	DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrant’s definitive proxy statement relating to its 2021 annual meeting of stockholders, or the 2021 Proxy Statement, are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated. We expect to file the 2021 Proxy Statement with the U.S. Securities and Exchange Commission within 120 days after the end of the fiscal year to which this report relates.
Amendment Flag	false
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	FY
Entity Central Index Key	0000891293

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 40,394	$ 31,144
Short-term investments	12,057	2,522
Prepaid expenses and other current assets	1,874	1,914
Total current assets	54,325	35,580
Property and equipment, net	719	1,235
Other assets	3,197	9,465
Total assets	58,241	46,280
Current liabilities:
Accounts payable	1,637	0
Accrued expenses	7,191	11,606
Current portion of long-term debt	4,455	4,812
Other current liabilities	3,755	2,070
Total current liabilities	17,038	18,488
Long-term debt, less current portion	0	4,455
Other liabilities	1,174	5,407
Total liabilities	18,212	28,350
Commitments and contingencies (Note 14)
Stockholders' equity:
Issued and outstanding shares - 75,896,884 and 57,979,725 as of December 31, 2020 and 2019, respectively	76	58
Additional paid-in capital	2,367,958	2,299,186
Accumulated other comprehensive income	2	0
Accumulated deficit	(2,328,007)	(2,275,556)
Total CTI stockholders' equity	40,029	23,688
Noncontrolling interest	0	(5,758)
Total stockholders' equity	40,029	17,930
Total liabilities and stockholders' equity	58,241	46,280
Series O Preferred Stock
Stockholders' equity:
Preferred stock, Series O and N, $0.001 par value per share	0	0
Series X Preferred Stock
Stockholders' equity:
Preferred stock, Series O and N, $0.001 par value per share	$ 0	$ 0

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Preferred stock par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock authorized (in shares)	33,333	33,333
Common stock par value (in USD per share)	$ 0.001	$ 0.001
Common stock authorized (in shares)	166,500,000	131,500,000
Common stock issued (in shares)	75,896,884	57,979,725
Common stock outstanding (in shares)	75,896,884	57,979,725
Series O Preferred Stock
Preferred stock issued (in shares)	12,575	12,575
Preferred stock outstanding (in shares)	12,575	12,575
Preferred stock liquidation preference	$ 25,150	$ 25,150
Series X Preferred Stock
Preferred stock issued (in shares)	4,429	0
Preferred stock outstanding (in shares)	4,429	0
Preferred stock liquidation preference	$ 44,290	$ 0

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Income Statement [Abstract]
License and contract revenues	$ 0	$ 3,345
Revenue from Contract with Customer, Product and Service [Extensible List]	srt:ProductsAndServicesDomain	srt:ProductsAndServicesDomain
Operating costs and expenses:
Research and development	$ 25,943	$ 24,107
General and administrative	17,626	19,155
Restructuring expenses	0	794
Other operating expenses	4,200	0
Total operating costs and expenses	47,769	44,056
Loss from operations	(47,769)	(40,711)
Non-operating income (expense):
Interest income	204	1,172
Interest expense	(511)	(1,002)
Amortization of debt discount and issuance costs	(521)	(521)
Foreign exchange loss	(80)	(281)
Loss (gain) on dissolution of subsidiary	(3,774)	1,320
Total non-operating (income) expense, net	(4,682)	688
Net loss before noncontrolling interest	(52,451)	(40,023)
Noncontrolling interest	0	3
Net loss	$ (52,451)	$ (40,020)
Basic and diluted net loss per common share (in USD per share)	$ (0.74)	$ (0.69)
Shares used in calculation of basic and diluted net loss per common share (in shares)	71,141	57,974

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Statement of Comprehensive Income [Abstract]
Net loss before noncontrolling interest	$ (52,451)	$ (40,023)
Other comprehensive income (loss):
Foreign currency translation adjustments	0	(2,323)
Unrealized foreign exchange gain on intercompany balance	0	957
Net unrealized gain on securities available-for-sale	2	16
Other comprehensive income (loss)	2	(1,350)
Comprehensive loss	(52,449)	(41,373)
Comprehensive loss attributable to noncontrolling interest	0	3
Comprehensive loss attributable to CTI	$ (52,449)	$ (41,370)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands	Total	Cumulative Effect, Period of Adoption, Adjustment	Preferred Stock	Common Stock	Additional Paid-in Capital	Additional Paid-in Capital Cumulative Effect, Period of Adoption, Adjustment	Accumulated Other Comprehensive Loss	Accumulated Deficit	Accumulated Deficit Cumulative Effect, Period of Adoption, Adjustment	Noncontrolling Interest
Beginning Balance (in shares) at Dec. 31, 2018			13	57,986
Beginning Balance at Dec. 31, 2018	$ 52,939	$ 1,196	$ 0	$ 58	$ 2,294,025	$ (7)	$ 1,350	$ (2,236,739)	$ 1,203	$ (5,755)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Equity-based compensation	5,166				5,166
Other (in shares)				(6)
Other	2				2
Noncontrolling interest	(3)									(3)
Net loss for the year	(40,020)							(40,020)
Other comprehensive loss	(1,350)						(1,350)
Ending Balance (in shares) at Dec. 31, 2019			13	57,980
Ending Balance at Dec. 31, 2019	17,930		$ 0	$ 58	2,299,186		0	(2,275,556)		(5,758)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Equity-based compensation	4,317				4,317
Other (in shares)				(144)
Other	157				157
Net loss for the year	(52,451)							(52,451)
Other comprehensive loss	2						2
Issuance of common stock, net of issuance costs (in shares)				17,770
Issuance of common stock, net of issuance costs	22,625			$ 18	22,607
Conversion of Series X preferred stock to common stock (in shares)				3
Conversion of Series X preferred stock to common stock	3				3
Reclassification of Series X preferred stock from mezzanine equity (in shares)			4
Reclassification of Series X preferred stock from mezzanine equity	43,637				43,637
Dissolution of majority-owned subsidiary	3,809				(1,949)					5,758
Ending Balance (in shares) at Dec. 31, 2020			17	75,897
Ending Balance at Dec. 31, 2020	$ 40,029		$ 0	$ 76	$ 2,367,958		$ 2	$ (2,328,007)		$ 0

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Operating activities
Net loss before noncontrolling interest	$ (52,451)	$ (40,023)
Adjustments to reconcile net loss to net cash used in operating activities:
Equity-based compensation expense	4,317	5,166
Depreciation and amortization	532	546
Provision for Italian VAT receivables and deposit	4,200	0
Loss (gain) on dissolution of subsidiary	3,774	(1,320)
Other	(155)	47
Changes in operating assets and liabilities:
Gain on dissolution of foreign entities	0	13,674
Prepaid expenses and other assets	2,274	1,120
Accounts payable, accrued expenses and other liabilities	(4,696)	(7,032)
Net cash used in operating activities	(42,205)	(27,822)
Investing activities
Purchases of property and equipment	(17)	0
Purchases of short-term investments	(12,100)	(11,018)
Proceeds from maturities of short-term investments	2,500	39,150
Net cash (used in) provided by investing activities	(9,617)	28,132
Financing activities
Cash paid for at-the-market equity offering costs	0	(275)
Repayment of debt	(5,333)	(5,333)
Proceeds from stock option exercises and ESPP stock issuance	140	1
Net cash provided by (used in) financing activities	61,072	(5,607)
Effect of exchange rate changes on cash and cash equivalents	0	2
Net increase (decrease) in cash and cash equivalents	9,250	(5,295)
Cash and cash equivalents at beginning of year	31,144	36,439
Cash and cash equivalents at end of year	40,394	31,144
Supplemental disclosure of cash flow information
Cash paid during the period for interest	547	1,044
Common And Preferred Stock
Financing activities
Proceeds from rights offering, net of issuance costs	59,108	0
At-The-Market Equity, Common Stock
Financing activities
Proceeds from rights offering, net of issuance costs	$ 7,157	$ 0

Description of Business and Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2020

Accounting Policies [Abstract]

Description of Business and Summary of Significant Accounting Policies

1. Description of Business and Summary of Significant Accounting Policies

CTI BioPharma Corp., together with its subsidiary, also referred to collectively in this Annual Report on Form 10-K as “we,” “us,” “our,” the “Company” and “CTI,” is a biopharmaceutical company focused on the acquisition, development and commercialization of novel targeted therapies for blood-related cancers that offer a unique benefit to patients and their healthcare providers. Our goal is to build a profitable company by generating income from products we develop and commercialize, either alone or with partners. We concentrate our efforts on treatments that target blood-related cancers where there is an unmet medical need. In particular, we are focused on evaluating pacritinib, our sole product candidate currently in active development, for the treatment of adult patients with myelofibrosis. In addition, we have recently started developing pacritinib for use in hospitalized patients with severe COVID-19, in response to the COVID-19 pandemic.

We operate in a highly regulated and competitive environment. The manufacturing and marketing of pharmaceutical products requires approval from, and is subject to, ongoing oversight by the Food and Drug Administration, or the FDA, in the United States, the European Medicines Agency, or the EMA, in the European Union, or the EU, and comparable agencies in other countries. Obtaining approval for a new therapeutic product is never certain, may take many years and may involve the expenditure of substantial resources.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of CTI, its wholly-owned subsidiary CTI Life Sciences Limited, or CTILS, until its dissolution in November 2019, and our majority-owned subsidiary, Aequus Biopharma, Inc., or Aequus, until its dissolution in June 2020, as discussed in Note 13. Related Party Transactions. We had an approximately 60% interest in Aequus; the remaining interest not held by CTI was reported as noncontrolling interest in the consolidated financial statements until its dissolution. All intercompany transactions and balances were eliminated in consolidation.

Liquidity

The accompanying consolidated financial statements have been prepared assuming that we will continue as a going concern, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business within one year after the date the consolidated financial statements are issued. Our management evaluates whether there are conditions or events, considered in aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date that the financial statements are issued.

Over the next year and in the normal course of business, we will need to continue to conduct research, development, testing and regulatory compliance activities with respect to pacritinib and prepare for potential commercialization, and in the course of such activities, we will incur general and administrative expenses. Additional business activities will include procuring manufacturing and drug supply services, the costs of which, together with our projected general and administrative expenses, are expected to result in operating losses for the foreseeable future. We have incurred a net operating loss every year since our formation. As of December 31, 2020, we had an accumulated deficit of $2.3 billion, and we expect to incur net losses for the foreseeable future. Our available cash, cash equivalents and short-term investments were $52.5 million as of December 31, 2020, and we expect that our present financial resources will only be sufficient to meet our obligations as they come due and to fund our operations into the second quarter of 2021. Based on our evaluation completed pursuant to Accounting Standards Update No. 2014-15, Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern, these factors raise substantial doubt about our ability to continue as a going concern.

Accordingly, we will need to acquire additional funds in order to develop our business and continue the development and prepare for the potential commercialization of pacritinib. The amount of funds that we will ultimately require will depend, in part, upon: regulatory approval developments and the extent to which we are required to conduct additional clinical trials; competitive market developments which require us to alter our business practices; and other unplanned expenses or business developments. We may seek to raise such capital through public or private equity financings, partnerships, collaborations, joint ventures, disposition of assets, debt financings or restructurings, bank borrowings or other sources of financing. However, we have a limited number of authorized shares of common stock available for issuance and additional funding obtained through the sale of such shares or otherwise may not be sufficient, available on favorable terms or available at all. If additional funds are raised by issuing equity securities, substantial dilution to existing stockholders may result. If we fail to obtain additional capital when needed, our ability to operate as a going concern will be harmed, and we may be required to delay, scale back or eliminate

some or all of our research and development programs, be required to reduce our general and administrative expenses, be unable to attract and retain highly-qualified personnel, be unable to obtain and maintain contracts necessary to continue our operations at affordable rates with competitive terms, have to refrain from making our contractually required payments when due (including debt payments) and/or may be forced to cease operations, liquidate our assets and possibly seek bankruptcy protection. The amount of financing we require is dependent upon many factors relating to drug approval status and our commercialization plans, as well as our clinical trials. These factors include the number of clinical trial sites in a given clinical trial, the number of patients treated in a given clinical trial, the pace of patient enrollment and other matters that may impact clinical development, including changes to a clinical trial that we may initiate or that may be requested by the FDA or other regulators. There can be no assurance as to the amount of funding necessary to fund the development of pacritinib to completion or that we will be able to obtain this funding. In addition, our ability to comply with covenants under the loan and security agreement with Silicon Valley Bank, or SVB, may be affected by events beyond our control, and we may not be able to meet those covenants. A breach of any of these covenants, including a material adverse change in our business, operations or condition (financial or otherwise) could result in an event of default under the loan and security agreement, which could cause all of the outstanding indebtedness under the facility to become immediately due and payable. The accompanying consolidated financial statements do not include adjustments, if any, that may result from the outcome of this uncertainty.

Use of Estimates

The preparation of financial statements in conformity with U.S. Generally Accepted Accounting Principles, or GAAP, requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of loss contingencies in the consolidated financial statements and accompanying notes. Estimates are used for, but not limited to, clinical accruals, income taxes, useful lives of property and equipment, commitments and contingencies, equity-based compensation forfeiture rates, collectability of receivables, and impairment of investments. Given the global economic climate and additional or unforeseen effects from the COVID-19 pandemic, these estimates are becoming more challenging, and actual results could differ materially from those estimates.

Certain Risks, Uncertainties and Concentrations

We source our drug products for clinical trials from a concentrated group of third-party contractors. If we are unable to obtain sufficient quantities of source materials, manufacture or distribute our products to customers from existing suppliers and service providers, or obtain the materials or services from other suppliers, manufacturers or distributors, certain research and development and sales activities may be delayed.

Fair Value of Financial Instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are based on a three-tier hierarchy that prioritizes the inputs used to measure fair value. There are three levels of inputs used to measure fair value with Level 1 having the highest priority and Level 3 having the lowest:

•Level 1—Valuations based on unadjusted quoted prices for identical assets and liabilities in active markets.

•Level 2—Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

•Level 3—Valuations based on unobservable inputs that are supported by little or no market activity, reflecting our own assumptions. These valuations require significant judgment or estimation.

Our cash equivalents and short-term investments are recorded at fair value. As of December 31, 2020 and 2019, our cash, cash equivalents and short-term investments consisted of cash, money market funds, U.S. government and agency securities and corporate debt securities.

We measure the fair value of money market funds based on the closing price reported by a fund sponsor from an actively traded exchange. We value all other securities using broker quotes that utilize observable market inputs. We did not hold cash, cash equivalents and short-term investments categorized as Level 3 assets as of December 31, 2020 and 2019. The following table summarizes, by major security type, our cash, cash equivalents and short-term investments that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy (in thousands):


	December 31, 2020								December 31, 2019
	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Total Estimated Fair Value		Total Estimated Fair Value
Cash	$	385	$	—	$	—	$	385	$	188
Level 1 securities:
Money market funds	40,009		—		—		40,009		28,957

Level 2 securities:
U.S. government and agency securities	—		—		—		—		2,522
Corporate debt securities	12,055		2		—		12,057		1,999
Total cash, cash equivalents and short-term investments	$	52,449	$	2	$	—	$	52,451	$	33,666

There were no other financial instruments requiring fair value measurement as of December 31, 2020 and 2019.

At December 31, 2020 and 2019, the carrying value of our receivables and payables approximated their fair values due to their short-term maturities. The carrying value of our long-term debt approximated its fair value at December 31, 2020 and 2019 based on borrowing rates for similar loans and maturities.

Cash and Cash Equivalents

We consider all highly liquid instruments with original maturities of three months or less at the time acquired to be cash equivalents.

Italian Value Added Tax Receivable

We historically carried out research and development activities in Italy and incurred value added tax, or VAT, from Italian suppliers on the acquisition of goods and services in Italy. This VAT should be considered as an Input VAT credit. We treated the majority of our sales made in Italy without output VAT (on the basis that the supplies should be considered outside the scope of Italian VAT). This resulted in the value of input VAT exceeding the value of output VAT, and accordingly we submitted a refund claim for the VAT. The Italian Tax Authority, or the ITA, has challenged the treatment of the sales transactions and claimed that the sales transactions made by us should have been subject to output VAT. Our Italian VAT receivable was approximately €3.9 million as of December 31, 2020 and 2019. While we believe that our refund claim is valid, we concluded that the ongoing COVID-19 global pandemic negatively impacted the collectability of our Italian VAT receivables and deposit. Accordingly, we recorded a full provision against our Italian VAT receivables and deposit in the amount of $4.2 million, which is included in Other operating expenses for the year ended December 31, 2020.

In addition, as disclosed in Note 14. Commitments and Contingencies, the ITA assessed us for additional VAT payments for services we provided in Italy, which we do not believe we owe. We have not recorded an amount in the financial statements for this contingent liability as we do not believe the potential payment of up to €4.3 million (or approximately $5.3 million converted using the currency exchange rate as of December 31, 2020), to the ITA is probable at this time.

Leases

Under ASC 842 - Leases, we determine if an arrangement is a lease at inception. We recognize a right-of-use asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases are classified as operating or finance at lease commencement, which will affect the pattern and classification of expense recognition in our consolidated statements of operations.

Right-of-use assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As our leases do not provide a readily determinable implicit rate of return, we derive the present value of lease payments using our incremental borrowing rate, which is the rate of interest that we would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.

An operating lease right-of-use asset is measured at the amount of the lease liability, adjusted for prepaid or accrued lease payments, lease incentives received, unamortized initial direct costs and the impairment of the right-of-use asset. A lease may include options to extend or terminate the lease. When it is reasonably certain that we will exercise such an option, it is considered in the lease term. Right-of-use assets are tested for impairment in the same manner as long-lived assets used in operations. Leasehold improvements are capitalized at cost and amortized over the lesser of their expected useful life or the lease term.

Lease expense for operating leases is recognized on a straight-line basis over the lease term as part of Research and development expenses and General and administrative expenses in our consolidated statements of operations. Right-of-use assets are included in Other assets, and the current portion of lease liabilities and the non-current portion of lease liabilities are included in Other current liabilities and Other liabilities, respectively, in our consolidated balance sheets.

Property and Equipment

Property and equipment are carried at cost, less accumulated depreciation and amortization. Depreciation commences at the time assets are placed in service. We calculate depreciation using the straight-line method over the estimated useful lives of the assets, ranging from three to five years for assets other than leasehold improvements. We amortize leasehold improvements over the lesser of their useful lives of 10 years or the term of the applicable lease.

Impairment of Long-lived Assets

We review our long-lived assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate. If an impairment is indicated, the asset is written down to its estimated fair value.

Contingencies

We record liabilities associated with loss contingencies to the extent that we conclude that the occurrence of the contingency is probable and that the amount of the related loss is reasonably estimable. We record income from gain contingencies only upon the realization of assets resulting from the favorable outcome of the contingent event. See Note 9. Collaboration, Licensing and Milestone Agreements and Note 14. Commitments and Contingencies for further information regarding our current contingencies.

Revenue Recognition

ASC 606 - Revenue from Contracts with Customers applies to all contracts with customers, except for contracts that are within the scope of other authoritative literature. Under ASC 606, we recognize revenue when a customer obtains control of promised goods or services, in an amount that reflects the consideration which we expect to be entitled in exchange for those goods or services.

To determine revenue recognition for arrangements that we determine are within the scope of ASC 606, we perform the following five steps: (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) we satisfy a performance obligation. We apply the five-step model to arrangements that meet the definition of a contract under ASC 606 including when it is probable that we will collect the consideration we are entitled to in exchange for goods or services we transfer to the customer. At contract inception, we assess the goods or services promised within each contract and determine those that are performance obligations, and assess whether each promised good or service is distinct. We recognize revenue for the amount of the transaction price that is allocated to the respective performance obligation as the performance obligation is satisfied.

License and Development Services Arrangements

We recognize license and contract revenue under license and development services arrangements that are within the scope of ASC 606. The terms of these agreements may contain multiple performance obligations, which may include licenses and research and development activities. We evaluate these agreements under ASC 606 to determine distinct performance obligations. Prior to recognizing revenue, we make estimates of the transaction price, including any variable consideration that is subject to a constraint. Amounts of variable consideration are included in the transaction price to the extent that it is probable that there will not be a significant reversal in the amount of cumulative revenue recognized and when the uncertainty associated with the variable consideration is subsequently resolved. Variable consideration may include nonrefundable upfront license

fees, payments for research and development activities, reimbursement of certain third-party costs, payments based upon the achievement of specified milestones, and royalty payments based on product sales derived from the collaboration. If there are multiple, distinct performance obligations, we allocate the transaction price to each distinct performance obligation based on its relative standalone selling price. Revenue is recognized by measuring the progress toward complete satisfaction of the performance obligations using an input measure in accordance with ASC-340-40, Other Assets and Deferred Costs: Contracts with Customers.

Research and Development Expenses

Research and development costs are expensed as incurred in accordance with ASC 730, Research and Development. Research and development expenses include related salaries and benefits, clinical trial and related manufacturing costs, contract and other outside service fees, and facilities and overhead costs related to our research and development efforts. Research and development expenses also consist of costs incurred for proprietary and collaboration research and development and include activities such as product registries and investigator-sponsored trials. In instances where we enter into agreements with third parties for research and development activities, we may prepay fees for services at the initiation of the contract. We record the prepayment as a prepaid asset and amortize the asset into research and development expense over the period of time the contracted research and development services are performed. Other types of arrangements with third parties may be fixed fee or fee for service, and may include monthly payments or payments upon completion of milestones or receipt of deliverables. We expense upfront license payments related to acquired technologies that have not yet reached technological feasibility and have no alternative future use.

Income Taxes

We record a tax provision for the anticipated tax consequences of our results of operations. The provision for income taxes is computed using the asset and liability method, under which deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities, and for operating losses and tax credit carryforwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates in effect for the years in which those tax assets and liabilities are expected to be realized or settled. We provide a valuation allowance to reduce deferred tax assets to the amount that is more likely than not to be realized.

Net Loss per Share

Basic net loss per common share is calculated based on net loss divided by the weighted average number of shares outstanding for the period. The calculation of diluted net loss per common share excludes the potential conversion of all dilutive convertible securities, such as convertible preferred stock, using the if-converted method, and the potential exercise or vesting of other dilutive securities, such as options, warrants and restricted stock, using the treasury stock method, as their inclusion would have an anti-dilutive effect.

Immaterial Correction of an Error in Prior Periods

During the quarter ended June 30, 2020, we identified errors related to an overstatement of accumulated other comprehensive loss that arose from foreign currency losses recorded in 2007 to accumulated other comprehensive loss instead of net loss. In accordance with Financial Accounting Standards Board, or FASB, Accounting Standards Codification 250, Accounting Changes and Error Corrections, we evaluated the materiality of the errors from quantitative and qualitative perspectives and concluded that the errors were immaterial to our financial statements. No amendments to previously filed interim or annual periodic reports were required. Consequently, we have adjusted for these errors by revising the historical financial statements presented herein. We recognized the cumulative effect of the error on periods prior to those that are presented herein by reducing unrealized loss of $12.0 million from accumulated other comprehensive loss and increasing accumulated deficit as of December 31, 2018. The correction did not have an impact on total assets, total stockholders’ equity, the consolidated statements of operations, comprehensive loss, or cash flows.

Recently Adopted Accounting Standards

In August 2018, the FASB issued new accounting guidance which eliminates certain disclosure requirements for fair value measurements for all entities, requires public entities to disclose certain new information and modifies some disclosure requirements. The guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. We adopted this guidance on January 1, 2020. The adoption of this accounting guidance did not have a material impact on our consolidated financial statements.

Recently Issued Accounting Standards

In June 2016, the FASB issued new accounting guidance which amends the impairment model for most financial assets and certain other instruments. For trade and other receivables, held-to-maturity debt securities, loans and other financial instruments, the standard requires the use of a new forward-looking "expected credit loss" model that generally will result in the earlier recognition of allowances for losses. For available-for-sale debt securities with unrealized losses, the standard now requires allowances to be recorded instead of reducing the amortized cost of the investment. For smaller reporting companies, the guidance is effective for fiscal years beginning after December 15, 2022, including interim periods therein. Early adoption is permitted. We do not expect the adoption of this accounting guidance to have a material impact on our consolidated financial statements.

In October 2020, the FASB issued a new accounting guidance to provide incremental improvements to its Accounting Standards Codification on various topics. Such improvements include conforming amendments, clarifications to guidance, simplifications to wording or structure of guidance, and other minor changes. For smaller reporting companies, the guidance is effective for fiscal years beginning after December 15, 2021, and interim periods within annual periods beginning after December 15, 2022. Early adoption is permitted for any annual or interim period for which financial statements have not been issued. The codification amendments do not change GAAP, therefore we do not expect the adoption of this accounting guidance to have a material impact on our consolidated financial statements.

Although there were several other new accounting pronouncements issued or proposed by the FASB, we do not believe any of these have had or will have a material impact on our consolidated financial statements.

Reclassifications

Certain prior year items have been reclassified to conform to current year presentation.

Property and Equipment

12 Months Ended

Dec. 31, 2020

Property, Plant and Equipment [Abstract]

Property and Equipment

2. Property and Equipment

Property and equipment consisted of the following as of December 31, 2020 and 2019 (in thousands):


	2020		2019
Furniture and office equipment	$	663	$	2,872
Leasehold improvements	5,140		5,140

	5,803		8,012
Less: accumulated depreciation and amortization	(5,084)		(6,777)
Property and equipment, net	$	719	$	1,235

Depreciation expense was $0.5 million for each of the years ended December 31, 2020 and 2019.

Other Assets

12 Months Ended

Dec. 31, 2020

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Other Assets

3. Other Assets

Other assets consisted of the following as of December 31, 2020 and 2019 (in thousands):


	2020		2019
Right-of-use assets	$	2,149	$	3,379
Italian VAT receivables, net (1)	—		4,390
Italian VAT deposit, net (1)	—		483
Refundable security deposit	194		194
Clinical trial deposits	770		720
Other	84		299
Other assets	$	3,197	$	9,465

(1) During the year ended December 31, 2020, we recorded full allowances against our Italian VAT receivables and deposit. See Note 1. Description of Business and Summary of Significant Accounting Policies for further details.

Accrued Expenses

12 Months Ended

Dec. 31, 2020

Payables and Accruals [Abstract]

Accrued Expenses

4. Accrued Expenses

Accrued expenses consisted of the following as of December 31, 2020 and 2019 (in thousands):


	2020		2019
Clinical trial expenses	$	3,512	$	7,920
Employee compensation and related expenses	2,792		2,851

Manufacturing expenses	238		228





Other	649		607
Total accrued expenses	$	7,191	$	11,606

Leases

12 Months Ended

Dec. 31, 2020

Leases [Abstract]

Leases

5. Leases

In January 2012, we entered into an agreement with Selig Holdings Company LLC, or Selig, to lease approximately 66,000 square feet of office space in Seattle, Washington for a term of 10 years, commencing May 2012. We have two five-year options to extend the term of the lease at a market rate determined according to the lease. We also had an option to early terminate the lease after the fifth anniversary from the commencement date. We were provided with a total of $3.9 million for certain tenant improvements and other lease incentives. The options to extend or terminate the lease were not considered in the determination of the right-of-use asset and the lease liability as we did not consider it reasonably certain that we would exercise such options. We also lease parking space and had certain office equipment leases until October 2020. We have elected not to separate a non-lease component from a lease component for these leases.

In December 2017, we entered into an agreement to sublease approximately 44,000 square feet of our office space. No payments were due through May 2018, after which monthly rent is due through the sublease termination date in April 2022.

The operating lease for our office space includes common area maintenance services provided by Selig, which are considered a non-lease component. Since the payments for these services are based on the actual costs incurred by Selig in providing the services, we consider these payments as variable lease expenses.

The components of lease expense, which were included in our consolidated statements of operations, were as follows (in thousands):


	Year Ended December 31,
	2020		2019
Operating lease expense	$	1,653	$	1,696
Variable lease expense	230		178
Sublease income	(1,247)		(1,247)
Total lease expense, net	$	636	$	627

The balance sheet classification of operating lease right-of-use assets and operating lease liabilities were as follows (in thousands):


	December 31, 2020

Right-of-use assets (included in Other Assets)	$	2,149


Lease liabilities, current (included in Other current liabilities)	$	2,193
Lease liabilities, non-current (included in Other liabilities)	800
Total lease liabilities	$	2,993

As of December 31, 2020, the maturities of operating lease liabilities were as follows (in thousands):


	Operating		Sublease
	Lease Payments		Rental Receipts		Net

2021	$	2,437	$	(1,454)	$	983
2022	820		(499)		321


Thereafter	—		—		—
Total payments	3,257		$	(1,953)	$	1,304
Less imputed interest	(264)
Total lease liabilities	$	2,993

Supplemental information relating to our operating leases is as follows (in thousands):


	December 31, 2020
Supplemental cash flow information
Cash paid for amounts included in the measurement of lease liabilities	$	2,443


Weighted-average remaining lease term of operating leases (years)	1.33
Weighted-average discount rate of operating leases	12.4		%

Other Liabilities

12 Months Ended

Dec. 31, 2020

Other Liabilities Disclosure [Abstract]

Other Liabilities

6. Other Liabilities

Other liabilities consisted of the following as of December 31, 2020 and 2019 (in thousands):


	2020		2019
Lease liabilities, non-current	$	800	$	2,993
End-of-facility lender fee (1)	—		1,440
Other long-term obligations	374		974
Total other liabilities	$	1,174	$	5,407

(1) End-of-facility lender fee as of December 31, 2019 represents an amount payable to SVB upon repayment of our secured term loan. This fee is classified in Other current liabilities as of December 31, 2020 due to the November 2021 loan maturity date. See Note 7. Long-term Debt for additional information.

Long-term Debt

12 Months Ended

Dec. 31, 2020

Debt Disclosure [Abstract]

Long-term Debt

7. Long-term Debt

In November 2017, we entered into a Loan and Security Agreement with Silicon Valley Bank, or SVB, for a secured term loan under which $16.0 million was funded in November 2017. The loan proceeds were used to repay in full all outstanding indebtedness under a prior loan and security agreement and to fund our general business requirements. The term loan is repayable over 36 months after an initial interest-only period of 12 months after closing. The interest rate on the term loan floats at a rate per annum equal to the greater of 2.5 percent above the prime rate and 6.75 percent. We may elect to prepay some or all of the loan balance at any time subject to a prepayment fee. A back-end fee in the amount of 9 percent of the total principal amount funded to us is payable to SVB on the date on which the term loan is paid or becomes due and payable in full. The loan obligations are secured by a first priority security interest on substantially all of our personal property except our intellectual property and subject to certain other exceptions.

We also issued warrants to SVB and Life Science Loans II, LLC in November 2017, pursuant to a participation arrangement among SVB, Loan Manager II, LLC and Life Science Loans II, LLC, to purchase up to 190,140 shares of our common stock. Warrants have an initial exercise price of $2.84 per share of our common stock and will expire on November 28, 2027.

The back-end fee in the amount of $1.4 million and the warrants, which had a fair value of $0.5 million on the date of grant, were together recorded as a $1.9 million debt discount. In connection with the Loan and Security Agreement, we also recorded debt issuance costs of $0.1 million. As of December 31, 2020, $0.4 million of the original debt discount and $27,000

of the debt issuance costs remained unamortized. The outstanding principal balance on the term loan was $4.9 million as of December 31, 2020.

As of December 31, 2020, the scheduled principal and interest payments (based on the interest rate of 6.75 percent as of December 31, 2020) as well as the back-end fee described above are as follows:


	Principal		Interest		Back-end fee		Total

2021	$	4,889	$	167	$	1,440	$	6,496



Thereafter	—		—		—		—
Total scheduled payments	$	4,889	$	167	$	1,440	$	6,496
Less: debt discount and issuance costs	$	(434)

Current portion of long-term debt	$	4,455

Equity Transactions

12 Months Ended

Dec. 31, 2020

Equity [Abstract]

Equity Transactions

8. Equity Transactions

At-The-Market Equity Offering

In November 2019, we entered into an Open Market Sale Agreement℠ with Jefferies LLC, or the Jefferies Sale Agreement, to sell shares of our common stock having aggregate sales proceeds of up to $15.0 million, from time to time, through an “at the market” equity offering program under which Jefferies acted as sales agent.

Under the terms of the Jefferies Sale Agreement, we set the parameters for the sale of shares, including the number of shares to be issued, the time period during which sales are requested to be made, limitation on the number of shares that may be sold in any one trading day and any minimum price below which sales may not be made. Subject to the terms and conditions of the Jefferies Sale Agreement, Jefferies may sell the shares by methods deemed to be an “at-the-market” offering as defined in Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended, including sales made directly on The Nasdaq Capital Market or on any other existing trading market for the common stock. Jefferies used commercially reasonable efforts in conducting such sales activities consistent with its normal trading and sales practices, applicable state and federal laws, rules and regulations and the rules of The Nasdaq Stock Market LLC.

We and Jefferies could each terminate the Jefferies Sale Agreement at any time upon one trading day’s prior notice. We could also sell shares to Jefferies acting as principal for Jefferies' own account. The compensation to Jefferies for sales of our common stock was an amount equal to 3% of the gross proceeds of any shares of our common stock sold under the Jefferies Sale Agreement. We had no obligation to sell any shares under the Jefferies Sale Agreement, and could at any time suspend solicitation and offers under the Jefferies Sale Agreement. In connection with the Jefferies Sales Agreement, we recorded financing costs of $0.2 million in General and administrative expenses for the year ended December 31, 2019. No shares of our common stock were sold under the Jefferies Sale Agreement during the year ended December 31, 2019. In November and December 2020, we sold 2.1 million shares of our common stock for net proceeds of approximately $7.2 million after compensation to Jefferies. Subsequent to the expiry of the Form S-3 Registration Statement (File No. 333-221382) in December 2020 pursuant to which shares of our common stock under the Jefferies Sale Agreement could be issued, no shares were sold under the Jefferies Sale Agreement.

In January 2021, we entered into a new Open Market Sale Agreement℠ with Jefferies LLC. See Note 16. Subsequent Events for additional information.

Rights Offering

In March 2020, we completed a rights offering through the distribution of subscription rights to holders of our common stock and Series O Preferred Stock, or the Rights Offering. Under the Rights Offering, we issued a total of 15.7 million shares of our common stock and 4,429 shares of our Series X Preferred Stock, which shares of Series X Preferred Stock are convertible into 44.3 million shares of our common stock, for aggregate gross proceeds of approximately $60.0 million. Total offering costs were approximately $0.9 million. There was no beneficial conversion feature on our Series X Preferred Stock. Due to the revocable nature of the Rights Offering prior to closing, there was no separate accounting for the subscription rights and purchase guarantees made by certain of our stockholders prior to the closing date.

At the time of issuance of our Series X Preferred Stock, the carrying amount of our Series X Preferred Stock was initially classified as mezzanine equity in the consolidated balance sheet since we did not have an adequate number of authorized shares of our common stock to satisfy the number of required shares under the conversion option of our Series X Preferred Stock. In

June 2020, our stockholders approved an increase in the number of authorized shares of our common stock, and as such, the settlement of the conversion option's exercise can now be controlled. Accordingly, the carrying amount of our Series X Preferred Stock was reclassified to permanent equity in June 2020.

During the first quarter of 2020, 0.2873 of a share of our Series X Preferred Stock was converted into 2,873 shares of our common stock. There were 4,429 shares of our Series X Preferred Stock outstanding as of December 31, 2020.

Each share of our Series X Preferred Stock has a stated value of $10,000 per share and is convertible into 10,000 shares of our common stock at the option of the holder at any time except as described above. The Series X Preferred Stock is subject to certain limitations, including that the holder will be prohibited from converting Series X Preferred Stock into common stock, if, as a result of such conversion, the holder, together with its affiliates, would beneficially own a number of shares of common stock above a conversion blocker, which is initially set at 9.99% of the total common stock then issued and outstanding immediately following the conversion of such shares of Series X Preferred Stock. In the event of our liquidation, dissolution or winding up, holders of Series X Preferred Stock will participate pari passu with any distribution of proceeds to holders of our common stock and holders of our Series O Preferred Stock. Holders of our Series X Preferred Stock are also entitled to receive dividends on shares of Series X Preferred Stock equal (on an as-if-converted-to common stock basis) to and in the same form as dividends actually paid on our common stock or other junior securities of the Company. Shares of Series X Preferred Stock will generally have no voting rights, except as required by law and except that the consent of a majority of the holders of the outstanding Series X Preferred Stock will be required to amend the terms of the Series X Preferred Stock.

Common Stock Authorized

In May 2019, the Company's certificate of incorporation was amended to increase the total number of authorized shares of common stock from 101.5 million to 131.5 million.

In June 2020, the Company's certificate of incorporation was amended to increase the total number of authorized shares of common stock from 131.5 million to 166.5 million.

Common Stock Reserved

As of December 31, 2020, we had 166.5 million authorized shares of common stock, of which 75.9 million shares were issued and outstanding, and 70.0 million shares were reserved for future issuances as follows (in thousands):


Equity incentive plans			15,878
Option agreement with Adam R. Craig per Nasdaq Listing Rule 5635(c)(4)			1,120

Employee stock purchase plan			138
Convertible preferred stock			52,673
Common stock purchase warrants			190
Total common stock reserved			69,999

Warrants

Warrants to purchase up to 190,140 shares of our common stock with an exercise price of $2.84 per share, issued in connection with the Loan and Security Agreement with SVB in 2017, were outstanding as of December 31, 2020. Of this amount, warrants to purchase up to 169,014 shares of our common stock were exercisable as of December 31, 2020.

Collaboration, Licensing and Milestone Agreements	12 Months Ended
Collaboration, Licensing and Milestone Agreements	Dec. 31, 2020
Collaborations [Abstract]
Collaboration, Licensing and Milestone Agreements	9. Collaboration, Licensing and Milestone Agreements Baxalta In November 2013, we entered into the Pacritinib License Agreement with Baxter for the development and commercialization of pacritinib for use in oncology and potentially additional therapeutic areas. Baxter assigned its rights and obligations under the Pacritinib License Agreement to Baxalta. Under the Pacritinib License Agreement, we granted to Baxter an exclusive, worldwide (subject to our certain co-promotion rights in the United States), royalty-bearing, non-transferable, and (under certain circumstances outside of the United States) sub-licensable license to our know-how and patents relating to pacritinib. In October 2016, we entered into the Asset Return and Termination Agreement, or the Baxalta Termination Agreement, with Baxalta, pursuant to which the Pacritinib License Agreement was terminated in its entirety (other than with respect to certain customary provisions that survive termination, including those pertaining to confidentiality and indemnification). The Pacritinib License Agreement has no further force or effect, and all rights and obligations of the Company and Baxalta under the Pacritinib License Agreement were terminated. In October 2016, we resumed primary responsibility for the development and commercialization of pacritinib as a result of the Baxalta Termination Agreement and are no longer eligible to receive cost sharing or milestone payments for pacritinib’s development from Baxalta. Pursuant to the Baxalta Termination Agreement, we are required to make a milestone payment to Takeda in the amount of approximately $10.3 million upon the first regulatory approval or any pricing and reimbursement approvals of a product containing pacritinib. Baxalta was acquired by Shire plc in 2016, and Shire plc was subsequently acquired by Takeda in 2019. SBIO Pte Ltd. We acquired the compounds SB1518 (which is referred to as “pacritinib”) and SB1578, which inhibit JAK2 and FLT3, from SBIO Pte Ltd., or SBIO, in May 2012. Under our agreement with SBIO, we are required to make milestone payments to SBIO up to an aggregate amount of $132.5 million if certain United States, EU and Japanese regulatory approvals are obtained or if certain worldwide net sales thresholds are met in connection with any pharmaceutical product containing or comprising any compound that we acquired from SBIO for use for specific diseases, infections or other conditions. At our election, we may pay up to 50% of any milestone payments to SBIO through the issuance of shares of our common stock or shares of our preferred stock convertible into our common stock. SBIO will also be entitled to receive royalty payments from us at incremental rates in the low single-digits based on certain worldwide net sales thresholds on a product-by-product and country-by-country basis. Teva Pursuant to an acquisition agreement entered into with Cephalon, Inc., or Cephalon, in June 2005, we have the right to receive up to $100.0 million in payments upon achievement of specified sales and development milestones related to TRISENOX. Cephalon was subsequently acquired by Teva Pharmaceutical Industries Ltd., or Teva. As of December 31, 2020, we had earned $60.0 million of such potential milestone payments as a result of having achieved certain milestones. We did not earn any milestone revenues during the years ended December 31, 2020 and 2019. The achievement of the remaining milestones is uncertain at this time. Other Agreements We have several agreements with contract research organizations, third-party manufacturers and distributors which have durations of greater than one year for the development and distribution of certain of our compounds.

Equity-Based Compensation

12 Months Ended

Dec. 31, 2020

Share-based Payment Arrangement [Abstract]

Equity-Based Compensation

10. Equity-Based Compensation

Equity-Based Compensation Expense

Equity-based compensation expense for all equity-based payment awards made to employees and directors is measured based on the grant-date fair value estimated in accordance with U.S. GAAP. We recognize equity-based compensation using the straight-line, single-award method based on the value of the portion of equity-based payment awards that is ultimately expected to vest during the period. Equity-based compensation is reduced for estimated forfeitures at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. For performance-based awards that do not include market-based conditions, we record equity-based compensation expense only when the performance-based milestone is deemed probable of achievement. We utilize both quantitative and qualitative criteria to judge whether milestones are probable of achievement. For awards with market-based performance conditions, we recognize the grant-date fair value of the award over the derived service period regardless of whether the underlying performance condition is met.

All of equity-based compensation expense recognized during the years ended December 31, 2020 and 2019 was related to stock options. The following table summarizes equity-based compensation expense for the years ended December 31, 2020 and 2019, which was allocated as follows (in thousands):


	2020		2019
Research and development	$	522	$	506
General and administrative	3,795		4,660
Total equity-based compensation expense	$	4,317	$	5,166

Equity-based compensation had a $4.3 million and $5.2 million effect on net loss for the years ended December 31, 2020 and 2019, respectively. It had no effect on cash flows from operating activities for the periods presented.

As of December 31, 2020, unrecognized compensation cost related to unvested stock options amounted to $4.0 million, which will be recognized over the remaining weighted-average requisite service period of 1.59 years.

For the years ended December 31, 2020 and 2019, no tax benefits were attributed to equity-based compensation expense because a valuation allowance was maintained for all net deferred tax assets.

Stock Plans

In May 2017, the Company's 2017 Equity Incentive Plan, or the 2017 Plan, was approved by the Company's shareholders, and no additional awards will be granted under the 2015 Equity Incentive Plan, or the 2015 Plan.

The Company's 2007 Employee Stock Purchase Plan, as amended and restated in August 2009 and September 2015, or the Purchase Plan, was amended in September 2015 to increase the maximum number of shares of the Company’s common stock authorized for issuance by 0.2 million shares. Refer to Employee Stock Purchase Plan below for further details.

Pursuant to the 2017 Plan, we may grant the following types of incentive awards: (1) stock options, including incentive stock options and non-qualified stock options, (2) stock appreciation rights, (3) restricted stock, (4) restricted stock units and (5) cash awards. The 2017 Plan is administered by the Compensation Committee of our Board, which has the discretion to determine the employees and consultants who shall be granted incentive awards. The Board retained sole authority under the 2017 Plan with respect to non-employee directors’ awards, although the Compensation Committee has authority under its charter to make recommendations to the Board concerning such awards. Options expire 10 years from the date of grant, subject to the recipients' continued service to the Company.

As of December 31, 2020, 18.3 million shares were authorized for issuance under equity incentive plans, of which 1.4 million shares of common stock were available for future grants under the 2017 Plan.

Stock Options

Fair value for stock options was estimated at the date of grant using the Black-Scholes pricing model, with the following weighted average assumptions:


	Year Ended December 31,
	2020		2019
Risk-free interest rate	0.5	%	2.3	%
Expected dividend yield	None		None
Expected life (in years)	4.6		4.4
Volatility	88	%	89	%

The risk-free interest rate used in the Black-Scholes valuation method is based on the implied yield currently available for U.S. Treasury securities at maturity with an equivalent term. We have not declared or paid dividends on our common stock and do not currently expect to do so in the future. The expected term of options represents the period that our options are expected to be outstanding and was determined based on historical weighted average holding periods and projected holding periods for the remaining unexercised options. Consideration was given to the contractual terms of our options, vesting schedules and expectations of future employee behavior. Expected volatility is based on both historical and implied volatilities of CTI BioPharma Corp. and our selected peer group of comparable companies within the industry.

Our stock price volatility and option lives, both of which impact the fair value of options calculated under the Black-Scholes methodology and, ultimately, the expense that will be recognized over the life of the option, involve management’s best estimates. As we recognize compensation expense for only the portion of options expected to vest, we apply estimated

forfeiture rates that we derive from historical employee termination behavior. If the actual number of forfeitures differs from our estimates, adjustments to compensation expense may be required in future periods.

The following table summarizes stock option activity for all of our stock option plans:


	Options	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value (Thousands)




















Outstanding at December 31, 2019 (4,047,000 exercisable)	10,954,000	$	2.56
Granted	5,264,000	$	1.04
Exercised	(107,000)	$	1.13		$	170
Forfeited	(459,000)	$	1.08
Cancelled and expired	(56,000)	$	6.30
Outstanding at December 31, 2020 (8,099,000 exercisable)	15,596,000	$	2.09	7.8	$	23,423
Vested or expected to vest at December 31, 2020	15,223,000	$	2.11	7.8	$	22,635
Exercisable at December 31, 2020	8,099,000	$	3.01	7.0	$	7,276

The weighted average exercise price of options exercisable at December 31, 2020 and 2019 was $3.01 and $4.39, respectively. The weighted average grant-date fair value of options granted during 2020 and 2019 was $0.76 and $0.60 per option, respectively.

In March 2017, Dr. Adam R. Craig, our President and CEO, was granted stock options to purchase 1.2 million shares of our common stock at an exercise price of $4.24 per share. The stock options have a maximum term of ten years and vest in six equal semi-annual installments over the three-year period beginning March 20, 2017, subject to his continued employment through the applicable vesting dates and acceleration under certain circumstances. The stock options were granted in connection with his entering into employment with the Company as President and CEO. A portion of the stock options covering 80,000 shares were granted under the 2015 Plan. The balance of such stock options was granted in accordance with Nasdaq Listing Rule 5635(c)(4).

Employee Stock Purchase Plan

Under the Purchase Plan, eligible employees may purchase a limited number of shares of our common stock at 85% of the lower of the subscription date fair market value and the purchase date fair market value. There are two six-month offerings per year. Under the Purchase Plan, we issued approximately 39,000 shares of our common stock to employees during the year ended December 31, 2020. There are 0.2 million shares of common stock authorized under the Purchase Plan and approximately 0.1 million shares are reserved for future purchases as of December 31, 2020.

Employee Benefit Plans	12 Months Ended
Employee Benefit Plans	Dec. 31, 2020
Retirement Benefits [Abstract]
Employee Benefit Plans	11. Employee Benefit PlansOur employees participate in the CTI BioPharma Corp. 401(k) Plan whereby eligible employees may defer up to 80% of their compensation, up to the annual maximum allowed by the Internal Revenue Service. We may make discretionary matching contributions based on certain plan provisions. We recorded $0.1 million related to discretionary matching contributions for each of the years ended December 31, 2020 and 2019.

- Definition

The entire disclosure for retirement benefits.

+ References

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-Subparagraph (l)
-URI http://asc.fasb.org/extlink&oid=118255775&loc=d3e1928-114920

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (r)(2)
-URI http://asc.fasb.org/extlink&oid=118255775&loc=d3e1928-114920

+ Details

Net Loss Per Share

12 Months Ended

Dec. 31, 2020

Earnings Per Share [Abstract]

Net Loss Per Share

12. Net Loss Per Share

Basic net loss per share is calculated based on net loss divided by the weighted average number of shares outstanding for the period. The calculation of diluted net loss per share excludes the potential conversion of all dilutive convertible securities, such as convertible debt and convertible preferred stock, and the potential exercise or vesting of other dilutive securities, such as options, warrants and restricted stock, as their inclusion would have an anti-dilutive effect. Accordingly, diluted net loss per share is the same as basic net loss per share.

The computation of net loss per share is as follows (in thousands, except per share amounts):


	Year Ended December 31,
	2020		2019
Net loss	$	(52,451)	$	(40,020)
Basic and diluted:
Weighted average shares outstanding	71,146		57,980
Less: weighted average restricted shares outstanding	(5)		(6)
Shares used in calculation of basic and diluted net loss per common share	71,141		57,974
Net loss per common share: Basic and diluted	$	(0.74)	$	(0.69)

Common shares underlying equity awards, warrants and convertible preferred stock aggregating 56.9 million shares and 18.9 million shares prior to the application of the treasury stock method for the years ended December 31, 2020 and 2019, respectively, have been excluded from the calculation of diluted net loss per share because they were anti-dilutive.

Related Party Transactions	12 Months Ended
Related Party Transactions	Dec. 31, 2020
Related Party Transactions [Abstract]
Related Party Transactions	13. Related Party Transactions Aequus In May 2007, we entered into a license agreement with Aequus whereby Aequus gained rights to our Genetic Polymer™ technology. We also entered into an agreement to fund Aequus in exchange for a convertible promissory note, pursuant to which we funded Aequus until 2017. In March 2017, we and Aequus entered into a License and Promissory Note Termination Agreement. We had the right to terminate the License and Promissory Note Termination Agreement and require Aequus to assign all ACTH Product related assets to us without further compensation to Aequus if Aequus did not file an Investigational New Drug Application, or IND, for an ACTH Product with the FDA by September 6, 2019. Aequus did not file an IND by September 6, 2019. In June 2020, we terminated the License and Promissory Note Termination Agreement; however, we did not request Aequus to assign all ACTH Product related assets to us. In connection with such termination, we were also deemed to have relinquished all of our ownership interest in Aequus as it had been administratively dissolved at the time of termination. As discussed in Note 1. Description of Business and Summary of Significant Accounting Policies - Principles of Consolidation, Aequus was our majority-owned subsidiary until its dissolution in June 2020. Upon deconsolidation of Aequus, we recognized a loss of $3.8 million, which was recorded in (Loss) gain on dissolution of subsidiary during the year ended December 31, 2020. BVF Partners L.P. In March 2020, in connection with our rights offering as discussed in Note 8. Equity Transactions, BVF purchased a total of 3,047 shares of our Series X Preferred Stock, which are convertible into 30.5 million shares of our common stock. During the year ended December 31, 2020, no shares of Series X Preferred Stock owned by BVF were converted into our common stock. As of December 31, 2020 and 2019, BVF beneficially owned approximately 9.1% and 12.0% of our outstanding common stock, respectively. Matthew D. Perry, a member of our Board, is the President of BVF and portfolio manager for the underlying funds managed by the firm.

Commitments and Contingencies	12 Months Ended
Commitments and Contingencies	Dec. 31, 2020
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	14. Commitments and Contingencies Commitments See Note 5. Leases and Note 7. Long-term Debt for scheduled lease and debt payments. In addition, certain of our licensing agreements obligate us to make payments upon achievement of milestones and pay a royalty on net sales of products utilizing licensed compounds. See Note 9. Collaboration, Licensing and Milestone Agreements for further details. Purchase commitments relating to clinical trial contracts, manufacturing supply, insurance and other obligations also arise in the ordinary course of business. We anticipate the timing of payments under these contracts to range from less than one year to more than three years. Contingencies In April 2009, December 2009 and June 2010, the Italian Tax Authority, or the ITA, issued notices of assessment to CTI - Sede Secondaria, or CTI (Europe), based on the ITA’s audit of CTI (Europe)’s value added tax, or VAT, returns for the years 2003, 2005, 2006 and 2007, or, collectively, the VAT Assessments. The ITA audits concluded that CTI (Europe) did not collect and remit VAT on certain invoices issued to non-Italian clients for services performed by CTI (Europe). The assessments, including interest and penalties, for the years 2003, 2006 and 2007 are €0.6 million, €2.8 million and €0.9 million, respectively. We believe that the services invoiced were non-VAT taxable consultancy services and that the VAT returns are correct as originally filed. We have appealed all the assessments and are defending ourselves against the assessments both on procedural grounds and on the merits of the cases, although we can make no assurances regarding the ultimate outcome of these cases. Following is a summary of the status of the legal proceedings surrounding each respective VAT year return at issue: 2003 VAT Assessment. In June 2013, the Regional Tax Court issued decision no. 119/50/13 in regards to the 2003 VAT Assessment, which accepted the October 2012 appeal of the ITA and reversed a previous decision of the Provincial Tax Court. In January 2014, we appealed such decision to the Italian Supreme Court both on procedural grounds and on the merits of the case. In March 2014, we paid a deposit in respect of the 2013 VAT matter of €0.4 million (or $0.6 million upon conversion from euros as of the date of payment), following the ITA's request for such payment. 2005 VAT Assessment. In January 2018, the Italian Supreme Court issued decision No. 02250/2018 which (i) rejected the April 2013 appeal of the ITA, (ii) confirmed the October 2012 decision of the Regional Tax Court (127/31/2012), which fully accepted the merits of our earlier appeal and confirmed that no penalties could be imposed against us, and (iii) due to the novelty of the arguments at stake, compensated the legal expenses incurred by the parties. The ITA may not use any ordinary means of appeal against the Italian Supreme Court decision, and we have applied for a refund based on the guidance from the ITA. 2006 and 2007 VAT Assessments. In November 2013, the ITA appealed to the Italian Supreme Court an April 2013 decision of the Regional Tax Court (57/35/13), that fully rejected the merits of an earlier ITA appeal, declared that no penalties could be imposed against us and found the ITA liable to pay us approximately €12,000, as a partial refund of legal expenses we incurred. No hearing dates have been fixed yet for either the 2003 VAT Assessment or consolidated 2006 and 2007 VAT Assessment cases. If the final decision of the Italian Supreme Court is unfavorable to us, or if, in the interim, the ITA were to make a demand for payment and we were to be unsuccessful in suspending collection efforts, we may be requested to pay the ITA an amount up to €4.3 million, or approximately $5.3 million converted using the currency exchange rate as of December 31, 2020, including interest and penalties for the period lapsed between the date in which the assessments were issued and the date of effective payment. We have not recorded this contingent liability in the financial statements as we do not believe the potential payment to the ITA is probable at this time.

Income Taxes

12 Months Ended

Dec. 31, 2020

Income Tax Disclosure [Abstract]

Income Taxes

15. Income Taxes

We file income tax returns in the United States and the United Kingdom. A substantial part of our operations takes place in the State of Washington, which does not impose an income tax as that term is defined in ASC 740, Accounting for Income Taxes. As such, our state income tax expense or benefit, if recognized, would be immaterial to our operations. We are not currently under examination by an income tax authority, nor have we been notified that an examination is contemplated.

Loss before income taxes is attributable to the following tax jurisdictions (in thousands):


	Year ended December 31,
	2020		2019
United States	$	(52,451)	$	(40,242)
Foreign	—		219
Net loss before noncontrolling interest and income taxes	$	(52,451)	$	(40,023)

The reconciliation between the income tax rate and our effective tax rate as of December 31 is as follows:


	2020		2019
Federal income tax rate	21	%	21	%
Research and development tax credits	4		14
Non-deductible compensation	(2)		(2)
Valuation allowance	20		(31)

Receivable impairment	(2)		—
Expired tax attribute carryforwards / Section 382 limitation	(29)		—
(Loss) gain on subsidiary liquidations	(14)		1

Foreign currency gains and losses	—		1
Unrecognized tax benefits	2		(3)
Other	—		(1)
Net effective tax rate	—	%	—	%

The principal components of our deferred tax assets and liabilities as of December 31 were as follows (in thousands):


	2020		2019
Deferred tax assets:
Net operating loss carryforwards	$	22,756	$	27,151

Capitalized research and development	33,280		32,907
Research and development tax credit carryforwards	1,779		7,317
Equity-based compensation	3,176		3,109
Intangible assets	7,251		7,519
Depreciation and amortization	699		618
Lease liability	629		1,039
Other deferred tax assets	312		918
Total deferred tax assets	69,882		80,578
Less: valuation allowance	(69,085)		(79,506)
	797		1,072
Deferred tax liabilities:

Right-of-use asset	(451)		(667)
Deductions for tax in excess of financial statements	(346)		(405)
Total deferred tax liabilities	(797)		(1,072)
Net deferred tax assets	$	—	$	—

As of December 31, 2020 and 2019, we had U.S. federal net operating loss carryforwards, or the NOL, of approximately $99.9 million and $92.0 million respectively, which are available to reduce future taxable income. The Tax Cuts and Jobs Act enacted in December 2017 altered the carryforward period for federal net operating losses and as a result, all net operating losses generated in 2018 and forward have an indefinite life. Of the net operating losses reported, we have accumulated $87.9 million with an indefinite life as of December 31, 2020. In June 2020, as discussed in Note 13. Related Party Transactions, we were deemed to have relinquished all of our ownership interest in Aequus. The associated net operating loss carryforward of $10.3 million was written off due to the termination of this investment in Aequus. We have accumulated state tax losses of approximately $12.3 million and $12.7 million as of December 31, 2020 and 2019, respectively. We also had U.S. federal tax credits of $1.8 million and $7.3 million as of December 31, 2020 and 2019, respectively, which may be used to offset future tax liabilities. The NOL and tax credit carryforwards, some of which expire in 2021, are subject to annual limitation in the event of certain cumulative changes in the ownership interest of significant stockholders over a three-year period in excess of 50%, as defined under Sections 382 and 383 of the Internal Revenue Code, or the IRC, of 1986, as amended. This limits the amount of tax attributes that can be utilized annually to offset future taxable income or future tax liabilities. We have undertaken a formal IRC Section 382 study and the attributes disclosed in this footnote reflect the conclusion of that study. However, subsequent ownership changes may further affect the limitation in future years.

In November 2019, CTILS, our wholly-owned subsidiary in the United Kingdom, was deemed dissolved. In June 2020, the liquidation of CTILS was complete. Accordingly, during the year ended December 31, 2020, the NOL carryforwards of approximately $40.9 million was written off as a result of the liquidation.

We maintain a full valuation allowance on our net deferred tax assets. The assessment regarding whether a valuation allowance is required considers both positive and negative evidence when determining whether it is more likely than not that deferred tax assets are recoverable. In making this assessment, significant weight is given to evidence that can be objectively verified. In our valuation, we considered our cumulative loss in recent years and forecasted losses in the near term as significant negative evidence. Based upon a review of the four sources of income identified within ASC 740, we determined that the negative evidence outweighed the positive evidence and that a full valuation allowance on our net deferred tax assets will be maintained. We will continue to assess the realizability of our deferred tax assets going forward and will adjust the valuation allowance as needed. Our valuation allowance decreased by $10.4 million during the year ended December 31, 2020 primarily due to the reductions in net operating loss carryforwards and tax credit carryforwards as a result of the 2020 Section 382 analysis. Additionally, the valuation allowance decreased due to the write-off of Aequus and CTILS net operating loss carryforwards.

We follow the provisions in ASC 740 and the guidance related to accounting for uncertainty in income taxes. We determine our uncertain tax positions based on a determination of whether and how much of a tax benefit taken by us in our tax filings or positions is more likely than not to be sustained upon examination by the relevant income tax authorities. We are subject to U.S. federal and state and U.K. income taxes with varying statutes of limitations. Tax years from 2001 forward remain open to examination due to the carryover of net operating losses or tax credits. Our policy is to recognize interest related to unrecognized tax benefits as interest expense and penalties as operating expenses.

The total balance of unrecognized tax benefits as of December 31 is as follows (in thousands):


	2020		2019
Balance at beginning of period	$	1,268	$	—
Gross increases to tax positions in prior periods	—		633
Gross decreases to tax positions in current periods	(1,268)		—
Gross increases to tax positions in current periods	390		635
Balance at end of period	$	390	$	1,268

As of December 31, 2020, the total amount of unrecognized tax benefits was $0.4 million, which was recorded as a reduction to the deferred tax asset. We do not anticipate that the amount of existing unrecognized tax benefits will significantly increase or decrease within the next 12 months. We had no accrued interest or penalties as of December 31, 2020.

- Definition

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

+ References + Details

Subsequent Events	12 Months Ended
Subsequent Events	Dec. 31, 2020
Subsequent Events [Abstract]
Subsequent Events	16. Subsequent Events At-The-Market Equity Offering In January 2021, we entered into an Open Market Sale Agreement℠ with Jefferies LLC, or the Sale Agreement, to sell shares of our common stock, having aggregate sales proceeds of up to $50.0 million, from time to time, through an “at the market” equity offering program under which Jefferies will act as sales agent. Under the Sale Agreement, we will set the parameters for the sale of shares, including the number of shares to be issued, the time period during which sales are requested to be made, limitation on the number of shares that may be sold in any one trading day and any minimum price below which sales may not be made. Subject to the terms and conditions of the Sale Agreement, Jefferies may sell the shares by methods deemed to be an “at the market offering” as defined in Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended, including sales made directly on The Nasdaq Capital Market or on any other existing trading market for the common stock. Jefferies will use commercially reasonable efforts in conducting such sales activities consistent with its normal trading and sales practices, applicable state and federal laws, rules and regulations and the rules of The Nasdaq Stock Market LLC. We and Jefferies may each terminate the Sale Agreement at any time upon ten trading days' prior notice. We may also sell shares to Jefferies acting as principal for Jefferies' own account. The compensation to Jefferies for sales of our common stock will be an amount equal to 3% of the gross proceeds of any shares of our common stock sold under the Sale Agreement. We have no obligation to sell any shares under the Sale Agreement, and may at any time suspend solicitation and offers under the Sale Agreement. As of the date of filing of this Annual Report on Form 10-K, we have sold 0.9 million shares of our common stock for net proceeds of approximately $3.0 million after compensation to Jefferies under the Sale Agreement.

Description of Business and Summary of Significant Accounting Policies (Policies)	12 Months Ended
	Dec. 31, 2020
Accounting Policies [Abstract]
Description of Business	CTI BioPharma Corp., together with its subsidiary, also referred to collectively in this Annual Report on Form 10-K as “we,” “us,” “our,” the “Company” and “CTI,” is a biopharmaceutical company focused on the acquisition, development and commercialization of novel targeted therapies for blood-related cancers that offer a unique benefit to patients and their healthcare providers. Our goal is to build a profitable company by generating income from products we develop and commercialize, either alone or with partners. We concentrate our efforts on treatments that target blood-related cancers where there is an unmet medical need. In particular, we are focused on evaluating pacritinib, our sole product candidate currently in active development, for the treatment of adult patients with myelofibrosis. In addition, we have recently started developing pacritinib for use in hospitalized patients with severe COVID-19, in response to the COVID-19 pandemic. We operate in a highly regulated and competitive environment. The manufacturing and marketing of pharmaceutical products requires approval from, and is subject to, ongoing oversight by the Food and Drug Administration, or the FDA, in the United States, the European Medicines Agency, or the EMA, in the European Union, or the EU, and comparable agencies in other countries. Obtaining approval for a new therapeutic product is never certain, may take many years and may involve the expenditure of substantial resources.
Principles of Consolidation	Principles of Consolidation The accompanying consolidated financial statements include the accounts of CTI, its wholly-owned subsidiary CTI Life Sciences Limited, or CTILS, until its dissolution in November 2019, and our majority-owned subsidiary, Aequus Biopharma, Inc., or Aequus, until its dissolution in June 2020, as discussed in Note 13. Related Party Transactions. We had an approximately 60% interest in Aequus; the remaining interest not held by CTI was reported as noncontrolling interest in the consolidated financial statements until its dissolution. All intercompany transactions and balances were eliminated in consolidation.
Liquidity	Liquidity The accompanying consolidated financial statements have been prepared assuming that we will continue as a going concern, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business within one year after the date the consolidated financial statements are issued. Our management evaluates whether there are conditions or events, considered in aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date that the financial statements are issued.
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with U.S. Generally Accepted Accounting Principles, or GAAP, requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of loss contingencies in the consolidated financial statements and accompanying notes. Estimates are used for, but not limited to, clinical accruals, income taxes, useful lives of property and equipment, commitments and contingencies, equity-based compensation forfeiture rates, collectability of receivables, and impairment of investments. Given the global economic climate and additional or unforeseen effects from the COVID-19 pandemic, these estimates are becoming more challenging, and actual results could differ materially from those estimates.
Certain Risks, Uncertainties and Concentrations	Certain Risks, Uncertainties and Concentrations We source our drug products for clinical trials from a concentrated group of third-party contractors. If we are unable to obtain sufficient quantities of source materials, manufacture or distribute our products to customers from existing suppliers and service providers, or obtain the materials or services from other suppliers, manufacturers or distributors, certain research and development and sales activities may be delayed.
Fair Value of Financial Instruments	Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are based on a three-tier hierarchy that prioritizes the inputs used to measure fair value. There are three levels of inputs used to measure fair value with Level 1 having the highest priority and Level 3 having the lowest: •Level 1—Valuations based on unadjusted quoted prices for identical assets and liabilities in active markets. •Level 2—Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. •Level 3—Valuations based on unobservable inputs that are supported by little or no market activity, reflecting our own assumptions. These valuations require significant judgment or estimation. Our cash equivalents and short-term investments are recorded at fair value. As of December 31, 2020 and 2019, our cash, cash equivalents and short-term investments consisted of cash, money market funds, U.S. government and agency securities and corporate debt securities. We measure the fair value of money market funds based on the closing price reported by a fund sponsor from an actively traded exchange. We value all other securities using broker quotes that utilize observable market inputs. We did not hold cash, cash equivalents and short-term investments categorized as Level 3 assets as of December 31, 2020 and 2019.
Cash and Cash Equivalents	Cash and Cash Equivalents We consider all highly liquid instruments with original maturities of three months or less at the time acquired to be cash equivalents.
Italian Value Added Tax Receivable	Italian Value Added Tax Receivable We historically carried out research and development activities in Italy and incurred value added tax, or VAT, from Italian suppliers on the acquisition of goods and services in Italy. This VAT should be considered as an Input VAT credit. We treated the majority of our sales made in Italy without output VAT (on the basis that the supplies should be considered outside the scope of Italian VAT). This resulted in the value of input VAT exceeding the value of output VAT, and accordingly we submitted a refund claim for the VAT. The Italian Tax Authority, or the ITA, has challenged the treatment of the sales transactions and claimed that the sales transactions made by us should have been subject to output VAT. Our Italian VAT receivable was approximately €3.9 million as of December 31, 2020 and 2019. While we believe that our refund claim is valid, we concluded that the ongoing COVID-19 global pandemic negatively impacted the collectability of our Italian VAT receivables and deposit. Accordingly, we recorded a full provision against our Italian VAT receivables and deposit in the amount of $4.2 million, which is included in Other operating expenses for the year ended December 31, 2020. In addition, as disclosed in Note 14. Commitments and Contingencies, the ITA assessed us for additional VAT payments for services we provided in Italy, which we do not believe we owe. We have not recorded an amount in the financial statements for this contingent liability as we do not believe the potential payment of up to €4.3 million (or approximately $5.3 million converted using the currency exchange rate as of December 31, 2020), to the ITA is probable at this time.
Leases	Leases Under ASC 842 - Leases, we determine if an arrangement is a lease at inception. We recognize a right-of-use asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases are classified as operating or finance at lease commencement, which will affect the pattern and classification of expense recognition in our consolidated statements of operations. Right-of-use assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As our leases do not provide a readily determinable implicit rate of return, we derive the present value of lease payments using our incremental borrowing rate, which is the rate of interest that we would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. An operating lease right-of-use asset is measured at the amount of the lease liability, adjusted for prepaid or accrued lease payments, lease incentives received, unamortized initial direct costs and the impairment of the right-of-use asset. A lease may include options to extend or terminate the lease. When it is reasonably certain that we will exercise such an option, it is considered in the lease term. Right-of-use assets are tested for impairment in the same manner as long-lived assets used in operations. Leasehold improvements are capitalized at cost and amortized over the lesser of their expected useful life or the lease term. Lease expense for operating leases is recognized on a straight-line basis over the lease term as part of Research and development expenses and General and administrative expenses in our consolidated statements of operations. Right-of-use assets are included in Other assets, and the current portion of lease liabilities and the non-current portion of lease liabilities are included in Other current liabilities and Other liabilities, respectively, in our consolidated balance sheets.
Property and Equipment	Property and Equipment Property and equipment are carried at cost, less accumulated depreciation and amortization. Depreciation commences at the time assets are placed in service. We calculate depreciation using the straight-line method over the estimated useful lives of the assets, ranging from three to five years for assets other than leasehold improvements. We amortize leasehold improvements over the lesser of their useful lives of 10 years or the term of the applicable lease.
Impairment of Long-lived Assets	Impairment of Long-lived Assets We review our long-lived assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate. If an impairment is indicated, the asset is written down to its estimated fair value.
Contingencies	Contingencies We record liabilities associated with loss contingencies to the extent that we conclude that the occurrence of the contingency is probable and that the amount of the related loss is reasonably estimable. We record income from gain contingencies only upon the realization of assets resulting from the favorable outcome of the contingent event. See Note 9. Collaboration, Licensing and Milestone Agreements and Note 14. Commitments and Contingencies for further information regarding our current contingencies.
Revenue Recognition	Revenue Recognition ASC 606 - Revenue from Contracts with Customers applies to all contracts with customers, except for contracts that are within the scope of other authoritative literature. Under ASC 606, we recognize revenue when a customer obtains control of promised goods or services, in an amount that reflects the consideration which we expect to be entitled in exchange for those goods or services. To determine revenue recognition for arrangements that we determine are within the scope of ASC 606, we perform the following five steps: (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) we satisfy a performance obligation. We apply the five-step model to arrangements that meet the definition of a contract under ASC 606 including when it is probable that we will collect the consideration we are entitled to in exchange for goods or services we transfer to the customer. At contract inception, we assess the goods or services promised within each contract and determine those that are performance obligations, and assess whether each promised good or service is distinct. We recognize revenue for the amount of the transaction price that is allocated to the respective performance obligation as the performance obligation is satisfied. License and Development Services Arrangements We recognize license and contract revenue under license and development services arrangements that are within the scope of ASC 606. The terms of these agreements may contain multiple performance obligations, which may include licenses and research and development activities. We evaluate these agreements under ASC 606 to determine distinct performance obligations. Prior to recognizing revenue, we make estimates of the transaction price, including any variable consideration that is subject to a constraint. Amounts of variable consideration are included in the transaction price to the extent that it is probable that there will not be a significant reversal in the amount of cumulative revenue recognized and when the uncertainty associated with the variable consideration is subsequently resolved. Variable consideration may include nonrefundable upfront license fees, payments for research and development activities, reimbursement of certain third-party costs, payments based upon the achievement of specified milestones, and royalty payments based on product sales derived from the collaboration. If there are multiple, distinct performance obligations, we allocate the transaction price to each distinct performance obligation based on its relative standalone selling price. Revenue is recognized by measuring the progress toward complete satisfaction of the performance obligations using an input measure in accordance with ASC-340-40, Other Assets and Deferred Costs: Contracts with Customers.
Research and Development Expenses	Research and Development Expenses Research and development costs are expensed as incurred in accordance with ASC 730, Research and Development. Research and development expenses include related salaries and benefits, clinical trial and related manufacturing costs, contract and other outside service fees, and facilities and overhead costs related to our research and development efforts. Research and development expenses also consist of costs incurred for proprietary and collaboration research and development and include activities such as product registries and investigator-sponsored trials. In instances where we enter into agreements with third parties for research and development activities, we may prepay fees for services at the initiation of the contract. We record the prepayment as a prepaid asset and amortize the asset into research and development expense over the period of time the contracted research and development services are performed. Other types of arrangements with third parties may be fixed fee or fee for service, and may include monthly payments or payments upon completion of milestones or receipt of deliverables. We expense upfront license payments related to acquired technologies that have not yet reached technological feasibility and have no alternative future use.
Income Taxes	Income Taxes We record a tax provision for the anticipated tax consequences of our results of operations. The provision for income taxes is computed using the asset and liability method, under which deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities, and for operating losses and tax credit carryforwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates in effect for the years in which those tax assets and liabilities are expected to be realized or settled. We provide a valuation allowance to reduce deferred tax assets to the amount that is more likely than not to be realized.
Net Loss per Share	Net Loss per Share Basic net loss per common share is calculated based on net loss divided by the weighted average number of shares outstanding for the period. The calculation of diluted net loss per common share excludes the potential conversion of all dilutive convertible securities, such as convertible preferred stock, using the if-converted method, and the potential exercise or vesting of other dilutive securities, such as options, warrants and restricted stock, using the treasury stock method, as their inclusion would have an anti-dilutive effect. Immaterial Correction of an Error in Prior Periods During the quarter ended June 30, 2020, we identified errors related to an overstatement of accumulated other comprehensive loss that arose from foreign currency losses recorded in 2007 to accumulated other comprehensive loss instead of net loss. In accordance with Financial Accounting Standards Board, or FASB, Accounting Standards Codification 250, Accounting Changes and Error Corrections, we evaluated the materiality of the errors from quantitative and qualitative perspectives and concluded that the errors were immaterial to our financial statements. No amendments to previously filed interim or annual periodic reports were required. Consequently, we have adjusted for these errors by revising the historical financial statements presented herein. We recognized the cumulative effect of the error on periods prior to those that are presented herein by reducing unrealized loss of $12.0 million from accumulated other comprehensive loss and increasing accumulated deficit as of December 31, 2018. The correction did not have an impact on total assets, total stockholders’ equity, the consolidated statements of operations, comprehensive loss, or cash flows.
Recent Accounting Standards	Recently Adopted Accounting Standards In August 2018, the FASB issued new accounting guidance which eliminates certain disclosure requirements for fair value measurements for all entities, requires public entities to disclose certain new information and modifies some disclosure requirements. The guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. We adopted this guidance on January 1, 2020. The adoption of this accounting guidance did not have a material impact on our consolidated financial statements. Recently Issued Accounting Standards In June 2016, the FASB issued new accounting guidance which amends the impairment model for most financial assets and certain other instruments. For trade and other receivables, held-to-maturity debt securities, loans and other financial instruments, the standard requires the use of a new forward-looking "expected credit loss" model that generally will result in the earlier recognition of allowances for losses. For available-for-sale debt securities with unrealized losses, the standard now requires allowances to be recorded instead of reducing the amortized cost of the investment. For smaller reporting companies, the guidance is effective for fiscal years beginning after December 15, 2022, including interim periods therein. Early adoption is permitted. We do not expect the adoption of this accounting guidance to have a material impact on our consolidated financial statements. In October 2020, the FASB issued a new accounting guidance to provide incremental improvements to its Accounting Standards Codification on various topics. Such improvements include conforming amendments, clarifications to guidance, simplifications to wording or structure of guidance, and other minor changes. For smaller reporting companies, the guidance is effective for fiscal years beginning after December 15, 2021, and interim periods within annual periods beginning after December 15, 2022. Early adoption is permitted for any annual or interim period for which financial statements have not been issued. The codification amendments do not change GAAP, therefore we do not expect the adoption of this accounting guidance to have a material impact on our consolidated financial statements. Although there were several other new accounting pronouncements issued or proposed by the FASB, we do not believe any of these have had or will have a material impact on our consolidated financial statements.
Reclassifications	Reclassifications Certain prior year items have been reclassified to conform to current year presentation.

Description of Business and Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2020

Accounting Policies [Abstract]

Summary of Cash and Cash Equivalents, Measured at Fair Value on a Recurring Basis

The following table summarizes, by major security type, our cash, cash equivalents and short-term investments that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy (in thousands):


	December 31, 2020								December 31, 2019
	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Total Estimated Fair Value		Total Estimated Fair Value
Cash	$	385	$	—	$	—	$	385	$	188
Level 1 securities:
Money market funds	40,009		—		—		40,009		28,957

Level 2 securities:
U.S. government and agency securities	—		—		—		—		2,522
Corporate debt securities	12,055		2		—		12,057		1,999
Total cash, cash equivalents and short-term investments	$	52,449	$	2	$	—	$	52,451	$	33,666

Property and Equipment (Tables)

12 Months Ended

Dec. 31, 2020

Property, Plant and Equipment [Abstract]

Property and Equipment

Property and equipment consisted of the following as of December 31, 2020 and 2019 (in thousands):


	2020		2019
Furniture and office equipment	$	663	$	2,872
Leasehold improvements	5,140		5,140

	5,803		8,012
Less: accumulated depreciation and amortization	(5,084)		(6,777)
Property and equipment, net	$	719	$	1,235

Other Assets (Tables)

12 Months Ended

Dec. 31, 2020

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Schedule of Other Assets

Other assets consisted of the following as of December 31, 2020 and 2019 (in thousands):


	2020		2019
Right-of-use assets	$	2,149	$	3,379
Italian VAT receivables, net (1)	—		4,390
Italian VAT deposit, net (1)	—		483
Refundable security deposit	194		194
Clinical trial deposits	770		720
Other	84		299
Other assets	$	3,197	$	9,465

Accrued Expenses (Tables)

12 Months Ended

Dec. 31, 2020

Payables and Accruals [Abstract]

Summary of Accrued Expenses

Accrued expenses consisted of the following as of December 31, 2020 and 2019 (in thousands):


	2020		2019
Clinical trial expenses	$	3,512	$	7,920
Employee compensation and related expenses	2,792		2,851

Manufacturing expenses	238		228





Other	649		607
Total accrued expenses	$	7,191	$	11,606

Leases (Tables)

12 Months Ended

Dec. 31, 2020

Leases [Abstract]

Components of Lease Expenses and Supplemental Information

The components of lease expense, which were included in our consolidated statements of operations, were as follows (in thousands):


	Year Ended December 31,
	2020		2019
Operating lease expense	$	1,653	$	1,696
Variable lease expense	230		178
Sublease income	(1,247)		(1,247)
Total lease expense, net	$	636	$	627

Supplemental information relating to our operating leases is as follows (in thousands):


	December 31, 2020
Supplemental cash flow information
Cash paid for amounts included in the measurement of lease liabilities	$	2,443


Weighted-average remaining lease term of operating leases (years)	1.33
Weighted-average discount rate of operating leases	12.4		%

Balance Sheet Classification of Operating Lease Components

The balance sheet classification of operating lease right-of-use assets and operating lease liabilities were as follows (in thousands):


	December 31, 2020

Right-of-use assets (included in Other Assets)	$	2,149


Lease liabilities, current (included in Other current liabilities)	$	2,193
Lease liabilities, non-current (included in Other liabilities)	800
Total lease liabilities	$	2,993

Schedule of Future Minimum Operating Lease Payments and Receivables

As of December 31, 2020, the maturities of operating lease liabilities were as follows (in thousands):


	Operating		Sublease
	Lease Payments		Rental Receipts		Net

2021	$	2,437	$	(1,454)	$	983
2022	820		(499)		321


Thereafter	—		—		—
Total payments	3,257		$	(1,953)	$	1,304
Less imputed interest	(264)
Total lease liabilities	$	2,993

Schedule of Future Minimum Operating Lease Payments and Receivables

As of December 31, 2020, the maturities of operating lease liabilities were as follows (in thousands):


	Operating		Sublease
	Lease Payments		Rental Receipts		Net

2021	$	2,437	$	(1,454)	$	983
2022	820		(499)		321


Thereafter	—		—		—
Total payments	3,257		$	(1,953)	$	1,304
Less imputed interest	(264)
Total lease liabilities	$	2,993

Other Liabilities (Tables)

12 Months Ended

Dec. 31, 2020

Other Liabilities Disclosure [Abstract]

Components of Other Liabilities

Other liabilities consisted of the following as of December 31, 2020 and 2019 (in thousands):


	2020		2019
Lease liabilities, non-current	$	800	$	2,993
End-of-facility lender fee (1)	—		1,440
Other long-term obligations	374		974
Total other liabilities	$	1,174	$	5,407

Long-term Debt (Tables)

12 Months Ended

Dec. 31, 2020

Debt Disclosure [Abstract]

Schedule of Principal and Interest Payments of Debt

As of December 31, 2020, the scheduled principal and interest payments (based on the interest rate of 6.75 percent as of December 31, 2020) as well as the back-end fee described above are as follows:


	Principal		Interest		Back-end fee		Total

2021	$	4,889	$	167	$	1,440	$	6,496



Thereafter	—		—		—		—
Total scheduled payments	$	4,889	$	167	$	1,440	$	6,496
Less: debt discount and issuance costs	$	(434)

Current portion of long-term debt	$	4,455

Equity Transactions (Tables)

12 Months Ended

Dec. 31, 2020

Equity [Abstract]

Summary of Common Stock Reserved for Issuance


Equity incentive plans			15,878
Option agreement with Adam R. Craig per Nasdaq Listing Rule 5635(c)(4)			1,120

Employee stock purchase plan			138
Convertible preferred stock			52,673
Common stock purchase warrants			190
Total common stock reserved			69,999

Equity-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2020

Share-based Payment Arrangement [Abstract]

Summary of Share-Based Compensation Expense

The following table summarizes equity-based compensation expense for the years ended December 31, 2020 and 2019, which was allocated as follows (in thousands):


	2020		2019
Research and development	$	522	$	506
General and administrative	3,795		4,660
Total equity-based compensation expense