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Note 5 - Realignment of Goals and Objectives and New Development Focus
9 Months Ended
Sep. 30, 2017
Notes to Financial Statements  
Restructuring and Related Activities Disclosure [Text Block]
5.
Realignment of Goals and Objectives and New Development Focus
 
Following the approval of SUSTOL and consistent with our transition into a commercial
-stage biotechnology company, we realigned our goals and objectives and refocused our development efforts to the area of postoperative pain management. On
October 18, 2016,
we entered into a lease agreement for new office and laboratory space in San Diego, California, which became our corporate headquarters in
December 2016.
On
September 30, 2016,
the board of directors accepted the resignations of
three
executive officers, and these executive officers and other employees directly affected by the realignment and refocusing were or will be provided with
one
-time severance payments upon termination, continued benefits for a specified period of time and outplacement assistance.
 
We expect to incur total expenses of
$9.9
million in connection with these activities,
$6.0
million of which is primarily for severance, and
$3.9
million of which is for non-cash, stock-based compensation expense. From
September 30, 2016
through
September 30, 2017
we have recognized a total expense of
$9.7
million. The remaining
$0.2
million relates to employees who are being retained until the
fourth
quarter of
2017
and is being expensed on a straight-line basis over the retention period.
 
We expect
to make the final payment resulting from the realignment of our goals and objectives and new development focus in the
second
quarter of
2018.
As of
September 30, 2017,
we have paid
$4.5
million of the total
$6.0
million cash charges.
 
For the
three
months ended
September 30, 2017,
total expenses related to the realignment were
$0.2
million, which were included in research and development expense. For the
nine
months ended
September 30, 2017,
total expenses related to the realignment were
$1.9
million, with
$1.6
million included in research and development expense and
$0.3
million in general and administrative expense.
 
The expenses we expect to incur are subject to a number of assumptions, and actual results
may
materially differ.
We
may
also incur other material expenses
not
currently contemplated due to events that
may
be associated with, or result from, the realignment of our goals and objectives and new development focus. We have accounted for these expenses in accordance with Accounting Standard Codification
No.
420,
Exit or Disposal Cost Obligations
.