Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2013

Summary of Fair Value Measurement Financial Asset and Liabilities

Financial assets and liabilities subject to fair value measurements as of December 31, 2011, December 31, 2012 and September 30, 2013, were as follows:


	Fair Value Measurements at December 31, 2011
	Total			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Total			Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents	$	31,049,050		$	31,049,050	$	—	$	—
Money market funds		24,169,311			—		24,169,311		—
Restricted cash		582,171			582,171		—		—

Total assets	$	55,800,532		$	31,631,221	$	24,169,311	$	—

Liabilities:
Preferred stock warrant liability	$	(203,642	)	$	—	$	—	$	(203,642	)


	Fair Value Measurements at December 31, 2012
	Total			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Total			Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents	$	18,695,197		$	18,695,197	$	—	$	—
Money market funds		29,047,958			29,047,958		—		—
Restricted cash		404,850			404,850		—		—

Total assets	$	48,148,005		$	48,148,005	$	—	$	—

Liabilities:
Preferred stock warrant liability	$	(52,947	)	$	—	$	—	$	(52,947	)


	Fair Value Measurements at September 30, 2013
	Total			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Total			Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents	$	7,522,029		$	7,522,029	$	—	$	—
Money market funds		26,047,169			26,047,169		—		—
Restricted cash		404,850			404,850		—		—

Total assets	$	33,974,048		$	33,974,048	$	—	$	—

Liabilities:
Preferred stock warrant liability	$	(679,296	)	$	—	$	—	$	(679,296	)

Summary of Preferred Stock Warrant Liability

The following table presents information about the Company’s preferred stock warrant liability, which was the only financial instrument measured at fair value on a recurring basis using significant unobservable inputs (Level 3) as defined in ASC 820 as of December 31, 2011, December 31, 2012, and September 30, 2013:


	December 31,
	2011			2012			September 30, 2013
							(unaudited)
Balance beginning of period	$	(1,663,077	)	$	(203,642	)	$	(52,947	)
Total unrealized gains (losses) included in earnings		1,459,435			150,695			(626,349	)

Balance end of period	$	(203,642	)	$	(52,947	)	$	(679,296	)

Estimated Useful Lives

Depreciation and amortization are computed using the straight-line method over the following estimated useful lives:


Computer equipment		3 years
Software		3 years
Furniture		10 years
Laboratory and office equipment		5 years
Leasehold improvements		Shorter of lease term or useful life

Computation of Basic and Diluted Income (Loss) Per Common Share

The treasury stock method is used to determine the dilutive effect of the Company’s stock option grants and the if-converted method is used to determine the dilutive effect of the Company’s Series A-1, A-2, B, C, D, and D-2 convertible preferred stock.


	Year Ended December 31,						Nine Months Ended September 30,
	2011			2012			2012			2013
							(Unaudited)
Basic income (loss) per common share:
Net income (loss)	$	6,717,120		$	8,361,755		$	10,466,582		$	2,944,149
Less: Undistributed earnings allocated to participating securities		(6,717,120	)		(8,361,755	)		(10,466,582	)		(2,944,149	)

Net income (loss) allocable to common shares	$	—		$	—		$	—		$	—

Basic weighted average common shares outstanding		1,025,602			1,083,286			1,078,145			1,463,798
Basic earnings per common share	$	—		$	—		$	—		$	—

Diluted income (loss) per common share:
Net income (loss)	$	6,717,120		$	8,361,755		$	10,466,582		$	2,944,149
Less: Undistributed earnings allocated to participating securities		(6,717,120	)		(8,361,755	)		(10,466,582	)		(2,944,149	)

Net income (loss) allocable to common shares	$	—		$	—		$	—		$	—

Basic weighted average common shares outstanding		1,025,602			1,083,286			1,078,145			1,463,798
Effect of dilutive securities		—			—			20,334,703			20,445,061

Diluted weighted average common shares outstanding		1,025,602			1,083,286			21,412,848			21,908,859
Diluted income per common share	$	—		$	—		$	—		$	—

Common Stock Equivalents Excluded In Calculation of Diluted Net Income (Loss) Per Share

The following common stock equivalents were excluded in the calculation of diluted net income (loss) per share because their effect would be anti-dilutive:


	Year Ended December 31,
	2011		2012
Series A-1 Preferred Stock		2,156,114		2,156,114
Series A-2 Preferred Stock		392,274		392,274
Series B Preferred Stock		4,336,037		4,336,037
Series C Preferred Stock		5,909,906		5,909,906
Series D Preferred Stock		769,468		769,468
Series D-2 Preferred Stock		3,391,991		3,391,991
Warrants to Purchase Series D-2 Preferred Stock		180,784		180,784
Stock options		2,885,417		3,249,702

Schedule of Dilutive Securities Used In Calculation of Diluted Earnings Per Share

The following common stock equivalents were included in the calculation of diluted net income (loss) per share:


	Nine Months Ended September 30,
	2012		2013
	(unaudited)
Series A-1 Preferred Stock		2,156,114		2,156,114
Series A-2 Preferred Stock		392,274		392,274
Series B Preferred Stock		4,336,037		4,336,037
Series C Preferred Stock		5,909,906		5,909,906
Series D Preferred Stock		769,468		769,468
Series D-2 Preferred Stock		3,391,991		3,391,991
Warrants to Purchase Series D-2 Preferred Stock		180,784		180,784
Stock options		3,276,516		2,910,952

Pro forma net income (loss) per common share

The Company believes the unaudited pro forma net income (loss) per share provides material information to investors, as the conversion of the Company’s Series A-1, A-2, B, C, D, and D-2 convertible preferred stock and net exercise of the Series D-2 preferred stock warrants to common stock occurred upon the closing of the IPO, and the disclosure of pro forma net income (loss) per share thus provides an indication of net income (loss) per share that is comparable to what will be reported by the Company as a public company.


	Year Ended December 31, 2012		Nine Months Ended September 30, 2013
	(unaudited)
Pro forma net income (loss) per common share
Numerator:
Net income (loss) used to compute pro forma net income (loss) per common share:
Basic	$	8,361,755	$	2,944,145
Diluted	$	8,512,450	$	2,944,145
Denominator:
Weighted-average number of common shares, used to calculate net income (loss) per common share:
Basic		1,083,286		1,463,798
Diluted		4,517,833		3,373,001
Add: Pro forma adjustments to reflect assumed weighted-average effect of conversion of convertible preferred stock		16,955,740		16,955,740

Weighted-average number of common shares used in calculating pro forma net income (loss) per common share:
Basic		18,039,142		18,419,588
Diluted		21,473,689		20,328,791
Pro forma net income (loss) per common share:
Basic	$	0.38	$	0.16
Diluted	$	0.38	$	0.14

Summary of Significant Revenue [Member]

Summary of Percentage of Customer Concentration

The following table represents the percentage of all significant revenue earned in the periods indicated:


	Year Ended December 31,						Nine Months ended September 30,
	2011			2012			2013			2012
							(unaudited)
Servier		—	%		17.3	%		58.8	%		12.6	%
Boehringer		15.6			18.4			15.9			17.2
Gilead		—			—			13.7			0.0
Pfizer		10.8			8.7			7.3			7.4
Eli Lilly		54.0			48.9			1.6			55.7
Government Agencies		17.7			6.5			2.6			6.9

Summary of Significant Accounts Receivable[Member]

Summary of Percentage of Customer Concentration

The following table represents the percentage of all significant accounts receivable balances as of December 31, 2011, December 31, 2012 and September 30, 2013:


	Year Ended December 31,						Nine Months ended September 30, 2013
	2011			2012			Nine Months ended September 30, 2013
							(unaudited)
Gilead.		—	%		—	%		51.2	%
Pfizer		28.0			45.4			22.6
Boehringer		40.1			18.0			11.1
Eli Lilly		10.6			28.2			11.0
Government Agencies		21.3			8.4			4.0

- Definition

Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

+ References+ Details

- Definition

Tabular disclosure of the fair value measurement of liabilities using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets), and gains or losses recognized in other comprehensive income (loss) and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs) by class of liability.

+ References+ Details

- Definition

Tabular disclosure of the nature of a concentration, a benchmark to which it is compared, and the percentage that the risk is to the benchmark.

+ References+ Details