Document and Entity Information (USD $)	12 Months Ended
Document and Entity Information (USD $)	Dec. 31, 2014	Feb. 10, 2015	Jun. 30, 2014
Document Information [Line Items]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	FY
Trading Symbol	ZIOP
Entity Registrant Name	ZIOPHARM ONCOLOGY INC
Entity Central Index Key	0001107421
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		114,694,324
Entity Public Float			$ 327,143,169

BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Current assets:
Cash and cash equivalents	$ 42,803	$ 68,204
Receivables	145	145
Prepaid expenses and other current assets	1,139	1,948
Total current assets	44,087	70,297
Property and equipment, net	531	801
Deposits	128	128
Other non current assets	491	528
Total assets	45,237	71,754
Current liabilities:
Accounts payable	2,004	422
Accrued expenses	7,182	6,357
Deferred revenue - current portion	1,360	800
Deferred rent - current portion	280	212
Total current liabilities	10,826	7,791
Deferred revenue		1,933
Deferred rent	570	851
Warrant liabilities		11,776
Other long term liabilities		20
Total liabilities	11,396	22,371
Commitments and contingencies (note 8)
Stockholders' equity:
Common stock, $0.001 par value; 250,000,000 shares authorized; 104,452,105 and 100,159,618 shares issued and outstanding at December 31, 2014 and 2013, respectively	104	100
Additional paid-in capital - common stock	406,349	386,511
Additional paid-in capital - warrants issued		3,603
Accumulated Deficit	(372,612)	(340,831)
Total stockholders' equity	33,841	49,383
Total liabilities and stockholders' equity	$ 45,237	$ 71,754

BALANCE SHEETS (Parenthetical) (USD $)	Dec. 31, 2014	Dec. 31, 2013	Jan. 12, 2011	Apr. 26, 2006
Common stock, par value	$ 0.001	$ 0.001	$ 0.001	$ 0.001
Common stock, shares authorized	250,000,000	250,000,000		250,000,000
Common stock, shares issued	104,452,105	100,159,618
Common stock, shares outstanding	104,452,105	100,159,618

STATEMENTS OF OPERATIONS (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Revenue	$ 1,373	$ 800	$ 800
Operating expenses:
Research and development	32,706	42,852	83,446
General and administrative	12,166	15,661	19,523
Total operating expenses	44,872	58,513	102,969
Loss from operations	(43,499)	(57,713)	(102,169)
Other income (expense), net	(5)	(579)	(13)
Change in fair value of warrants	11,723	1,185	6,050
Net loss	$ (31,781)	$ (57,107)	$ (96,132)
Basic and diluted net loss per share	$ (0.31)	$ (0.66)	$ (1.22)
Weighted average common shares outstanding used to compute basic and diluted net loss per share	101,130,710	85,943,175	78,546,112

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (USD $) In Thousands, except Share data	Total	Employee Stock Option	Common Stock	Common Stock Employee Stock Option	Additional Paid-in Capital Common Stock	Additional Paid-in Capital Common Stock Employee Stock Option	Additional Paid-in Capital Warrants	Deficit Accumulated During the Development Stage	Registered direct offering	Registered direct offering Common Stock	Registered direct offering Additional Paid-in Capital Common Stock	Collaboration Agreement	Collaboration Agreement Common Stock	Collaboration Agreement Additional Paid-in Capital Common Stock
Beginning Balance at Dec. 31, 2011	$ 71,607		$ 69		$ 246,519		$ 12,611	$ (187,592)
Beginning Balance (in shares) at Dec. 31, 2011			69,206,044
Stock-based compensation	4,880				4,880
Exercise of warrants to purchase common stock (in shares)	259,660		259,660
Issuance of common stock (in shares)										10,114,401			3,636,926
Issuance of common stock									49,170	11	49,159	18,694	3	18,691
Exercise of warrants to purchase common stock	742				1,011		(269)
Exercise of employee stock options (in shares)	8,300			8,300
Exercise of employee stock options		30				30
Issuance of restricted common stock			258,032
Repurchase of shares of restricted common stock (in shares)			(123,153)
Repurchase of shares of restricted common stock	(546)				(546)
Cancelled/ Forfeiture of unvested restricted common stock			(123,370)
Expired warrants					5,433		(5,433)
Net loss	(96,132)							(96,132)
Ending Balance at Dec. 31, 2012	48,445		83		325,177		6,909	(283,724)
Ending Balance (in shares) at Dec. 31, 2012			83,236,840
Stock-based compensation	3,507				3,507
Exercise of warrants to purchase common stock (in shares)	112,808		112,808
Issuance of common stock (in shares)										16,445,000
Issuance of common stock									53,880	16	53,864
Exercise of warrants to purchase common stock	200				396		(196)
Exercise of employee stock options (in shares)	570,168			570,168
Exercise of employee stock options		956		1		955
Issuance of restricted common stock			75,272
Repurchase of shares of restricted common stock (in shares)			(116,723)
Repurchase of shares of restricted common stock	(498)				(498)
Cancelled/ Forfeiture of unvested restricted common stock			(163,747)
Expired warrants					3,110		(3,110)
Net loss	(57,107)							(57,107)
Ending Balance at Dec. 31, 2013	49,383		100		386,511		3,603	(340,831)
Ending Balance (in shares) at Dec. 31, 2013			100,159,618
Stock-based compensation	4,743				4,743
Exercise of warrants to purchase common stock (in shares)	3,725,277		3,747,254
Exercise of warrants to purchase common stock	10,654		4		13,963		(3,313)
Exercise of employee stock options (in shares)	613,138			613,138
Exercise of employee stock options		1,386				1,386
Issuance of restricted common stock			66,828
Repurchase of shares of restricted common stock (in shares)			(112,333)
Repurchase of shares of restricted common stock	(544)				(544)
Cancelled/ Forfeiture of unvested restricted common stock			(22,400)
Expired warrants					290		(290)
Net loss	(31,781)							(31,781)
Ending Balance at Dec. 31, 2014	$ 33,841		$ 104		$ 406,349		$ 0	$ (372,612)
Ending Balance (in shares) at Dec. 31, 2014			104,452,105

STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Cash flows from operating activities:
Net loss	$ (31,781)	$ (57,107)	$ (96,132)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	462	738	658
Stock-based compensation	4,743	3,507	4,880
Change in fair value of warrants	(11,723)	(1,185)	(6,050)
Loss on disposal of fixed assets		585	48
Common stock issued in exchange for in-process research and development			18,694
(Increase) decrease in:
Receivables		(87)	21
Prepaid expenses and other current assets	809	4,964	(5,599)
Other noncurrent assets	37	473	(230)
Deposits		4	(43)
Increase (decrease) in:
Accounts payable	1,582	(1,087)	(218)
Accrued expenses	827	(10,159)	5,695
Deferred revenue	(1,373)	(800)	(800)
Deferred rent	(213)	625	244
Other noncurrent liabilities	(20)	20
Net cash used in operating activities	(36,650)	(59,509)	(78,832)
Cash flows from investing activities:
Purchases of property and equipment	(193)	(132)	(1,559)
Proceeds from sale of property and equipment		1
Net cash used in investing activities	(193)	(131)	(1,559)
Cash flows from financing activities:
Proceeds from exercise of stock options	1,386	956	30
Payments to employees for repurchase of restricted common stock	(544)	(498)	(546)
Proceeds from exercise of warrants	10,600	200	330
Proceeds from issuance of common stock and warrants, net		53,880	49,170
Net cash provided by financing activities	11,442	54,538	48,984
Net decrease in cash and cash equivalents	(25,401)	(5,102)	(31,407)
Cash and cash equivalents, beginning of period	68,204	73,306	104,713
Cash and cash equivalents, end of period	42,803	68,204	73,306
Supplementary disclosure of cash flow information:
Cash paid for interest	0	0	0
Cash paid for income taxes	0	0	0
Supplementary disclosure of noncash investing and financing activities:
Exercise of liability-classified warrants to common shares	54		412
Warrants
Supplementary disclosure of noncash investing and financing activities:
Exercise of equity-classified warrants to common shares	$ 692	$ 196	$ 269

Organization

12 Months Ended

Dec. 31, 2014

Organization

Organization

ZIOPHARM Oncology, Inc., which we refer to as “ZIOPHARM” or the “Company”, is a biopharmaceutical company that seeks to acquire, develop and commercialize, on its own or with commercial partners, a diverse portfolio of cancer therapies that can address unmet medical needs through synthetic biology.

The Company’s operations to date have consisted primarily of raising capital and conducting research and development. The Company’s fiscal year ends on December 31.

The Company has operated at a loss since its inception in 2003 and has minimal revenues. The Company anticipates that losses will continue for the foreseeable future. At December 31, 2014, the Company’s accumulated deficit was approximately $372.6 million. Taking into account the receipt of approximately $94.6 million in net proceeds from the February 2015 public offering of common stock, and given the development plans, the Company anticipates cash resources will be sufficient to fund operations into the first quarter of 2017. The Company’s ability to continue operations after its current cash resources are exhausted depends on its ability to obtain additional financing or to achieve profitable operations, as to which no assurances can be given. Cash requirements may vary materially from those now planned because of changes in the Company’s focus and direction of its research and development programs, competitive and technical advances, patent developments, regulatory changes or other developments. Additional financing will be required to continue operations after the Company exhausts its current cash resources and to continue its long-term plans for clinical trials and new product development. There can be no assurance that any such financing can be obtained by the Company, or if obtained, what the terms thereof may be, or that any amount that the Company is able to raise will be adequate to support the Company’s working capital requirements until it achieves profitable operations.

Financings

12 Months Ended

Dec. 31, 2014

Financings

Financings

On February 3, 2015, the Company entered into an underwriting agreement with J.P. Morgan Securities LLC, as representative of the several underwriters named therein, relating to the issuance and sale of 10,000,000 shares of our common stock. The price to the public in the offering was $8.75 per share, and the underwriters agreed to purchase the shares from the Company pursuant to the underwriting agreement at a purchase price of $8.225 per share. Under the terms of the underwriting agreement, the Company also granted the underwriters an option, exercisable for 30 days, to purchase up to an additional 1,500,000 shares of common stock at a purchase price of $8.225 per share. The offering was made pursuant to the Company’s effective registration statement on Form S-3 (Registration Statement No. 333-201826) previously filed with the SEC, and a prospectus supplement thereunder. The underwriters purchased the 10,000,000 shares and the additional 1,500,000 shares on February 9 and February 17, 2015, respectively. The net proceeds from the offering were approximately $94.2 million after deducting underwriting discounts and estimated offering expenses payable by the Company.

On October 23, 2013, the Company entered into an underwriting agreement with J. P. Morgan Securities LLC, as representative of the several underwriters named therein, relating to the issuance and sale of 14,300,000 shares of our common stock. The price to the public in the offering was $3.50 per share, and the underwriters agreed to purchase the shares from the Company pursuant to the underwriting agreement at a purchase price of $3.29 per share. Under the terms of the underwriting agreement, the Company also granted the underwriters an option, exercisable for 30 days, to purchase up to an additional 2,145,000 shares of common stock at a purchase price of $3.29 per share, and the underwriters elected to exercise such option in full. The offering was made pursuant to the Company’s effective registration statement on Form S-3 (Registration Statement No. 333-177793) previously filed with the SEC, and a prospectus supplement thereunder. The underwriters purchased the 14,300,000 shares and the additional 2,145,000 shares on October 29, 2013. The net proceeds from the offering were approximately $53.9 million after deducting underwriting discounts and estimated offering expenses payable by the Company.

On January 20, 2012, the Company entered into an underwriting agreement with J. P. Morgan Securities LLC, as representative of the several underwriters named therein, relating to the issuance and sale of 9,650,000 shares of our common stock. The price to the public in the offering was $5.20 per share, and the underwriters agreed to purchase the shares from the Company pursuant to the underwriting agreement at a purchase price of $4.888 per share. Under the terms of the underwriting agreement, the Company also granted the underwriters an option, exercisable for 30 days, to purchase up to an additional 1,447,500 shares of common stock at a purchase price of $4.888 per share. The offering was made pursuant to the Company’s effective registration statement on Form S-3 (Registration Statement No. 333-177793) previously filed with the SEC, and a prospectus supplement thereunder. The underwriters purchased the 9,650,000 shares on January 25, 2012 and purchased an additional 464,401 shares on January 31, 2012 pursuant to the partial exercise of their option to purchase additional shares, resulting in our issuing a total of 10,114,401 shares. The net proceeds from the offering were approximately $49.2 million after deducting underwriting discounts and estimated offering expenses payable by the Company.

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2014

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Basis of Presentation

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although the Company regularly assesses these estimates, actual results could differ from those estimates. Changes in estimates are recorded in the period in which they become known.

The Company’s most significant estimates and judgments used in the preparation of our financial statements are:

•

Clinical trial expenses;

•

Fair value measurements for stock based compensation and warrants; and

•

Income taxes.

Subsequent Events

On January 13, 2015, the Company, together with Intrexon, entered into a license agreement, or the License, with The University of Texas M.D. Anderson Cancer Center (“MD Anderson”). Pursuant to the License, the Company and Intrexon hold an exclusive, worldwide license to certain technologies owned and licensed by MD Anderson including technologies relating to novel chimeric antigen receptor (CAR) T-cell therapies arising from the laboratory of Laurence Cooper, M.D., Ph.D., professor of pediatrics at MD Anderson, as well as either co-exclusive or non-exclusive licenses under certain related technologies.

Pursuant to the terms of the License, MD Anderson will receive, within sixty days of the date of the License, consideration of $50 million in shares of our common stock (or 10,124,561 shares), and $50 million in shares of Intrexon’s common stock in each case based on a trailing 20 day volume weighted average of the closing price of the Company’s and Intrexon’s common stock ending on the date prior to the announcement of the entry into the License, collectively referred to as the License Shares, pursuant to the terms of the License Shares Securities Issuance Agreement described below. The Company and Intrexon also agreed to reimburse MD Anderson for out of pocket expenses for maintaining patents covering the licensed technologies.

In addition, pursuant to the License, MD Anderson has agreed to transfer to us certain existing research programs described in the License and to grant to Intrexon and us certain additional technology rights related thereto. In connection with such transfer, the terms of the License also require us and Intrexon to enter into a research and development agreement with MD Anderson pursuant to which the Company will provide funding for certain research and development activities of MD Anderson for a period of three years, in an amount between $15 and $20 million per year. The first quarterly payment of $3.75 million due under this arrangement is required to be made by us within 60 days of the date of the License.

The term of the License expires on the last to occur of (a) the expiration of all patents licensed thereunder, or (b) the twentieth anniversary of the date of the License; provided, however, that following the expiration of the term, the Company and Intrexon shall then have a fully-paid up, royalty free, perpetual, irrevocable and sublicensable license to use the licensed intellectual property thereunder. After ten years from the date of the License and subject to a 90 day cure period, MD Anderson will have the right to convert the License into a non-exclusive license if the Company and Intrexon are not using commercially reasonable efforts to commercialize the licensed intellectual property on a case-by-case basis. After five years from the date of the License and subject to a 180 day cure period, MD Anderson will have the right to terminate the License with respect to specific technology(ies) funded by the government or subject to a third party contract if the Company and Intrexon are not meeting the diligence requirements in such funding agreement or contract, as applicable. Subject to a 30 day cure period, MD Anderson has the right to terminate the License if the Company and Intrexon fail to timely deliver the shares due in consideration for the License. MD Anderson may also terminate the agreement with written notice upon material breach by us and Intrexon, if such breach has not been cured within 60 days of receiving such notice. In addition, the License will terminate upon the occurrence of certain insolvency events for both us and Intrexon and may be terminated by the mutual written agreement of us, Intrexon and MD Anderson.

On January 9, 2015, in order to induce MD Anderson to enter into the License on an accelerated schedule, the Company and Intrexon entered into a letter agreement, or the Letter Agreement, pursuant to which MD Anderson will receive consideration of $7.5 million in shares of the our common stock (or 1,597,602 shares), and $7.5 million in shares of Intrexon’s common stock in each case based on a trailing 20 day volume weighted average of the closing price of the our and Intrexon’s common stock ending on the date prior to the Letter Agreement, collectively referred to as the Incentive Shares, in the event that the License was entered into on or prior to 8:00 am pacific time on January 14, 2015, referred to as the Accelerated Closing Deadline. The Incentive Shares will be issued to MD Anderson within sixty days of the date of the License pursuant to the terms of the Incentive Shares Securities Issuance Agreement described below.

In connection with the entry into the License, on January 13, 2015, the Company entered into a Securities Issuance Agreement with MD Anderson, or the License Shares Securities Issuance Agreement, pursuant to which the Company agreed to issue and sell the License Shares to MD Anderson in consideration for the License. The closing of the issuance and sale of the License Shares under the License Shares Securities Issuance Agreement will occur within sixty days of the date of the License, subject to customary closing conditions.

In connection with the entry into the Letter Agreement, on January 13, 2015, the Company entered into a Securities Issuance Agreement with MD Anderson, or the Incentive Shares Securities Issuance Agreement, pursuant to which the Company agreed to issue and sell the Incentive Shares to MD Anderson in consideration for the execution and delivery of the License on or prior to the Accelerated Closing Deadline in connection with the Letter Agreement. The closing of the issuance and sale of the Incentive Shares under the Incentive Shares Securities Issuance Agreement will occur within sixty days of the date of the License, subject to customary closing conditions.

Also in connection with the License and the issuance of the License Shares and the Incentive Shares, on January 13, 2015, the Company and MD Anderson entered into a Registration Rights Agreement, or the Registration Rights Agreement, pursuant to which the Company agreed to file a “resale” registration statement, or the Registration Statement, registering the resale of the License Shares, the Incentive Shares and any other shares of our common stock held by MD Anderson on the date that the Registration Statement is filed, within 15 days of the closing under the License Shares Securities Issuance Agreement. Under the Registration Rights Agreement, the Company is obligated to use our reasonable best efforts to cause the Registration Statement to be declared effective as promptly as practicable after filing and in no event later than 120 days of the closing under the License Shares Securities Issuance Agreement and to maintain the effectiveness of the Registration Statement until all securities therein are sold or are otherwise can be sold pursuant to Rule 144, without any restrictions.

Our director, Randall J. Kirk, is the CEO, a director, and the largest stockholder of Intrexon, which is a party to the License. Mr. Kirk is also one of our principal stockholders.

On February 3, 2015, the Company entered into an underwriting agreement with J.P. Morgan Securities LLC (see Note 2 above).

The Company evaluated all other events and transactions that occurred after the balance sheet date through the date of this filing. Except as disclosed above, the Company did not have any other material subsequent events that impacted its financial statements or disclosures.

Cash and Cash Equivalents

Cash equivalents consist primarily of demand deposit accounts and deposits in short-term U.S. treasury money market mutual funds. Cash equivalents are stated at cost, which approximates fair market value.

Concentrations of Credit Risk

Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents. The Company maintains cash accounts in commercial banks, which may, at times, exceed federally insured limits. The Company has not experienced any losses in such accounts. The Company believes it is not exposed to any significant credit risk on cash and cash equivalents.

Property and Equipment

Property and equipment are recorded at cost. Expenditures for maintenance and repairs are charged to expense while the costs of significant improvements are capitalized. Depreciation is provided using the straight-line method over the following estimated useful lives of the related assets, which is between three and five years. Upon retirement or sale, the cost of the assets disposed of and the related accumulated depreciation are eliminated from the balance sheets and related gains or losses are reflected in the statements of operations.

Restricted Cash

Other assets include $388 thousand that is restricted as collateral for the Company’s facility leases and $103 thousand that is restricted as collateral for a line of credit.

Long-Lived Assets

The Company reviews the carrying values of its long-lived assets for possible impairment whenever events or changes in circumstances indicate that the carrying amounts of the assets may not be recoverable. Any long-lived assets held for disposal are reported at the lower of their carrying amounts or fair values less costs to sell.

Warrants

The Company applies the accounting standard which provides guidance in assessing whether an equity-based financial instrument is indexed to an entity’s own stock for purposes of determining whether a financial instrument should be treated as a derivative. In applying the methodology the Company concluded that certain warrants issued by the Company have terms that do not meet the criteria to be considered indexed to the Company’s own stock and therefore are classified as liabilities in the Company’s balance sheet. The liability classified warrants are subject to re-measurement at each balance sheet date and any change in fair value is recognized as a component of “Other income, net” in the accompanying Statement of Operations. Fair value is measured using the binomial valuation model. In December 2011, the Company switched from the Black-Scholes valuation model to the binomial valuation model as it provides a better evaluation of the fair market value of the Company’s liability-classified warrants.

Fair Value Measurements

The Company has certain financial assets and liabilities recorded at fair value which have been classified as Level 1, 2 or 3 within the fair value hierarchy as described in the accounting standards for fair value measurements.

•

Level 1—Quoted prices in active markets for identical assets or liabilities.

•

Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

•

Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Assets and liabilities measured at fair value on a recurring basis as of December 31, 2014 and 2013 are as follows:


($ in thousands)	Fair Value Measurements at Reporting Date Using
Description	Balance as of December 31, 2014		Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents	$	37,290	$	37,290	$	—	$	—

Warrant liability	$	—	$	—	$	—	$	—


($ in thousands)	Fair Value Measurements at Reporting Date Using
Description	Balance as of December 31, 2013		Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents	$	66,794	$	66,794	$	—	$	—

Warrant liability	$	11,776	$	—	$	11,776	$	—

The cash equivalents consist primarily of short term U.S. treasury money market mutual funds which are actively traded. The warrants were valued using a binomial valuation model. As of December 31, 2014, all liability classified warrants had expired. See Note 9 to the financial statements, Warrants, for additional disclosure on the valuation methodology and significant assumptions.

Revenue Recognition

The Company receives revenue from a collaboration agreement (see Note 8 to the financial statements, Commitments and Contingencies). Collaboration arrangements typically include payments for one or more of the following: non-refundable, upfront license fees, funding of research and development efforts, milestone payments if specified objectives are achieved and/or profit-sharing or royalties on product sales. Arrangements containing multiple elements are divided into separate units of accounting if certain criteria are met, including whether the delivered element has stand-alone value to the collaborative partner. The consideration received is then allocated among the separate units based on their respective fair values and the applicable revenue recognition criteria are applied to each of the separate units.

Revenue from non-refundable, upfront research and development fees is reported as research and development revenue and is recognized on a straight-line basis over the contracted or estimated period of performance, which is typically the development term. Research and development funding is earned over the period of effort.

Milestone payments are recognized as research and development revenue upon achievement of the milestone only if (1) the milestone payment is non-refundable, (2) substantive effort is involved in achieving the milestone and (3) the amount of the milestone is reasonable in relation to the effort expended or the risk associated with achievement of the milestone. If any of these conditions are not met, the milestone payment is deferred and recognized as revenue over the estimated remaining period of performance under the contract as the Company completes its performance obligations.

Research and Development Costs

Research and development expenditures are charged to the statement of operations as incurred. Such costs include proprietary research and development activities, purchased research and development, and expenses associated with research and development contracts, whether performed by the Company or contracted with independent third parties.

Income Taxes

Income taxes are accounted for under the liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences of temporary differences between the financial statement carrying amounts and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which the temporary differences are expected to be recovered or settled. The Company evaluates the realizability of its deferred tax assets and establishes a valuation allowance when it is more likely than not that all or a portion of deferred tax assets will not be realized.

The Company accounts for uncertain tax positions using a “more-likely-than-not” threshold for recognizing and resolving uncertain tax positions. The evaluation of uncertain tax positions is based on factors including, but not limited to, changes in tax law, the measurement of tax positions taken or expected to be taken in tax returns, the effective settlement of matters subject to audit, new audit activity and changes in facts or circumstances related to a tax position. The Company evaluates this tax position on an annual basis. The Company also accrues for potential interest and penalties, related to unrecognized tax benefits in income tax expense (see Note 10 to the financial statements, Income Taxes).

Accounting for Stock-Based Compensation

Stock-based compensation cost is measured at the grant date, based on the estimated fair value of the award, and is recognized as expense over the employee’s requisite service period. Stock-based compensation expense is based on the number of awards ultimately expected to vest and is therefore reduced for an estimate of the awards that are expected to be forfeited prior to vesting. Consistent with prior years, the Company uses the Black-Scholes option pricing model which requires estimates of the expected term option holders will retain their options before exercising them and the estimated volatility of the Company’s common stock price over the expected term.

The Company recognizes the full impact of its share-based employee payment plans in the statements of operations for each of the years ended December 31, 2014, 2013, and 2012 and did not capitalize any such costs on the balance sheets. The Company recognized $3.7 million, $2.3 million, and $3.1 million of compensation expense related to vesting of employee stock options during the years ended December 31, 2014, 2013, and 2012, respectively. In the years ended December 31, 2014, 2013, and 2012, the Company recognized $1.0 million, $1.2 million, and $1.7 million of compensation expense, respectively, related to vesting of restricted stock (see Note 12 to the financial statements, Stock Option Plan). In the years ended December 31, 2014, 2013, and 2012, the Company recognized $4.7 million, $3.5 million, and $4.9 million of compensation expense, respectively, related to vesting of all employee and director awards. The following table presents share-based compensation expense included in the Company’s Statements of Operations:


	Year ended December 31,
(in thousands)	2014		2013		2012
Research and development	$	1,416	$	792	$	1,917
General and administrative		3,327		2,715		2,963

Share based employee compensation expense before tax		4,743		3,507		4,880
Income tax benefit		—		—		—

Net share based employee compensation expense	$	4,743	$	3,507	$	4,880

The fair value of each stock option is estimated at the date of grant using the Black-Scholes option pricing model. The estimated weighted-average fair value of stock options granted to employees in 2014, 2013, and 2012 was approximately $3.58, $2.51, and $3.06 per share, respectively. Assumptions regarding volatility, expected term, dividend yield and risk-free interest rate are required for the Black-Scholes model. The volatility assumption is based on the Company’s historical experience. The risk-free interest rate is based on a U.S. treasury note with a maturity similar to the option award’s expected life. The expected life represents the average period of time that options granted are expected to be outstanding. The Company calculated expected term using the simplified method described in SEC Staff Accounting Bulletin, or SAB, No. 107 and No. 110 as it continues to meet the requirements promulgated in Staff Accounting Bulletin No. 110. The assumptions for volatility, expected life, dividend yield and risk-free interest rate are presented in the table below:


	2014	2013	2012
Weighted average risk-free interest rate	1.74 - 2.11%	1.00 - 2.10%	0.79 - 1.13%
Expected life in years	6	6	6
Expected volatility	85.22 - 94.55%	83.40 - 95.96%	83.36 - 83.53%
Expected dividend yield	0	0	0

Net Loss Per Share

Basic net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding for the period. The Company’s potential dilutive shares, which include outstanding common stock options, unvested restricted stock and warrants, have not been included in the computation of diluted net loss per share for any of the periods presented as the result would be antidilutive. Such potential common shares at December 31, 2014, 2013, and 2012 consist of the following:


	December 31,
	2014		2013		2012
Stock options		6,505,664		6,747,303		7,147,303
Unvested restricted stock		144,508		352,865		733,739
Warrants		—		10,539,767		11,197,454

		6,650,172		17,639,935		19,078,496

New Accounting Pronouncements

In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40) in which management should evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued (or within one year after the date that the financial statements are available to be issued when applicable). When management identifies conditions or events that raise substantial doubt about an entity’s ability to continue as a going concern, management should consider whether its plans that are intended to mitigate those relevant conditions or events will alleviate the substantial doubt. This update is effective for annual periods beginning after December 15, 2016, and early application is permitted for any annual or interim period thereafter.

On June 10, 2014, the FASB issued ASU 2014-10, Development Stage Entities (Topic 915), which simplifies financial reporting for development stage entities by eliminating requirements specific to development stage entities. As a result, entities in a development stage will no longer need to present inception-to-date information about income statement line items, cash flows, and equity transactions. Instead, the new guidance clarifies how these entities should tailor existing disclosures to explain the risks and uncertainties related to their activities. This update is effective for annual periods beginning after December 15, 2014, and early application is permitted for any annual or interim period for which the entity’s financial statements have not yet been issued. The Company adopted this guidance prior to issuing the financial statements in this Quarterly Report on Form 10-Q. The adoption of ASU 2014-10 impacted presentation and disclosure only and did not have any impact on financial position or results of operations.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which clarifies the principles for recognizing revenue and develops a common revenue standard for U.S. GAAP and IFRS. This standard removes inconsistencies and weaknesses between U.S. GAAP and IFRS in revenue requirements, provides a more robust framework for addressing revenue issues, improves comparability of revenue recognition practices across entities, industries, jurisdictions, and capital markets, provides more useful information to users of financial statements through improved disclosure requirements, and simplifies the preparation of financial statements by reducing the number of requirements to which an entity must refer. This update is effective for annual periods beginning after December 15, 2016, including interim periods within that reporting period and early application is not permitted. The company believes that the adoption of this standard will not have an impact on our financial position or results of operations.

- Definition

The entire disclosure for all significant accounting policies of the reporting entity.

+ References+ Details

Restructuring

12 Months Ended

Dec. 31, 2014

Restructuring

Restructuring

The Company underwent restructuring activities during the year ended December 31, 2013 which included a reduction in workforce and office space, resulting in sublease agreements in Boston and New York. As a result, the Company incurred restructuring charges of $1.7 million, $0.6 million was included in general and administrative expenses and $1.1 million was included in research and development expenses. The Company also incurred charges for exit and disposal activities from the Boston and New York sublease agreements which resulted in an aggregate loss of $0.8 million recorded in general and administrative expenses, and a loss on the disposal of fixed assets of $0.6 million, recorded in Other income in the Statement of Operations for the year ended December 31, 2013.

On October 17, 2013, the Company entered into a sublease agreement to lease 7,259 square feet in our New York office to a subtenant. The Company remains primarily liable to pay rent on the original lease. Accordingly, the Company recorded a loss on the sublease in the amount of $729 thousand for the year ended December 31, 2013, representing the remaining contractual obligation of $2.3 million, less $1.6 million in payments from our subtenant. The Company retired assets in this subleased area as a result of this sublease with a net book value of $392 thousand, and recorded a loss on disposal of fixed assets for the same amount for the year ended December 31, 2013.

On August 30, 2013, the Company entered into a sublease agreement to lease 5,249 square feet in our Boston office to a subtenant. The Company remains primarily liable to pay rent on the original lease. The Company recorded a loss on the sublease in the amount of $42 thousand for the year ended December 31, 2013, representing the remaining contractual obligation of $367 thousand, less $325 thousand in payments from our subtenant. The Company retired assets in this subleased area as a result of this sublease with a net book value of $194 thousand, and recorded a loss on disposal of fixed assets. The company previously held a security deposit of $20 thousand in accordance with the sublease, which was recorded in other non-current assets and other liabilities on the balance sheet for the year ended December 31, 2013. This sublease tenant vacated the lease in October 2014. As of December 31, 2014, the company applied the $20 thousand deposit against outstanding rent. The company is actively pursuing a subtenant to lease a portion of the space in the Boston Office that was vacated by a previous subtenant.

On July 16, 2012, the Company announced that it restructured its management team and closed its Germantown, MD office. As a result of this action, the Company recorded a restructuring charge, consisting primarily of severance, stock based compensation associated with stock option modifications (see Note 12 to the financial statements, Stock Option Plan) and health benefit continuation costs of approximately $1.3 million. These costs are included in general and administrative expense for the year ended December 31, 2012.

- Definition

The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled.

+ References+ Details

Property and Equipment, net

12 Months Ended

Dec. 31, 2014

Property and Equipment, net

Property and Equipment, net

Property and equipment, net, consists of the following:


	December 31,
(in thousands)	2014			2013
Office and computer equipment	$	1,094		$	1,076
Software		874			884
Leasehold improvements		927			841
Manufacturing equipment		251			153

		3,146			2,954
Less: accumulated depreciation		(2,615	)		(2,153	)

Property and equipment, net	$	531		$	801

Depreciation and amortization charged to the Statement of Operations for the years ended December 31, 2014, 2013, and 2012 was: $462 thousand, $738 thousand and, $658 thousand, respectively.

- Definition

The entire disclosure for long-lived, physical assets used in the normal conduct of business and not intended for resale. Includes, but is not limited to, accounting policies and methodology, roll forwards, depreciation, depletion and amortization expense, including composite depreciation, accumulated depreciation, depletion and amortization expense, useful lives and method used, income statement disclosures, assets held for sale and public utility disclosures.

+ References+ Details

Accrued Expenses

12 Months Ended

Dec. 31, 2014

Accrued Expenses

Accrued Expenses

Accrued expenses consist of the following:


	December 31,
(in thousands)	2014		2013
Clinical consulting services	$	2,802	$	3,751
Preclinical services		2,027		513
Employee compensation		768		252
Professional services		422		582
Payroll taxes and benefits		417		255
Manufacturing services		308		547
Other consulting services		226		230
Accrued vacation		212		227

Accrued expenses	$	7,182	$	6,357

Related Party Transactions

12 Months Ended

Dec. 31, 2014

Related Party Transactions

Related Party Transactions

On January 6, 2011, the Company entered into an Exclusive Channel Partner Agreement, or Channel Agreement, with Intrexon Corporation, or Intrexon (see Note 8 to the financial statements, Commitments and Contingencies, for additional disclosure relating to the Channel Agreement). Our director, Randall J. Kirk, is the CEO, a director, and the largest stockholder of Intrexon. During the year ended December 31, 2012, the Company paid Intrexon approximately $11.4 million, of which $6.6 million was for preclinical and clinical research services already incurred and the remaining $4.8 million was for services expected to be incurred within a year. This amount was included as part of prepaid expenses and other current assets on the balance sheet as of December 31, 2012. During the year ended December 31, 2013, the Company expensed $7.8 million for services performed by Intrexon, of which $4.8 million was applied to the prepaid balance in other current assets, $2.4 million was paid to Intrexon and $0.6 million was recorded in accrued expenses. As of December 31, 2013, the prepaid balance in other current assets on the accompanying balance sheet has been reduced to $0. During the year ended December 31, 2014, the Company expensed $12.0 million for services performed by Intrexon, of which $10.1 million was paid to Intrexon and $1.9 million was recorded in accounts payable and accrued expenses. As of December 31, 2014, the prepaid balance in other current assets on the accompanying balance sheet has been reduced to $0.

On January 25, 2012, Intrexon purchased 1,923,075 shares of common stock in the Company’s public offering (see Note 2 to the financial statements, Financings).

On November 7, 2012, the Company issued 3,636,926 shares of common stock to Intrexon (see Note 11 to the financial statements, Preferred Stock and Stockholders’ Equity).

On October 29, 2013, Intrexon purchased 2,857,143 shares of common stock in the Company’s public offering (see Note 2 to the financial statements, Financings).

On February 2, 2015, Intrexon purchased 1,440,000 shares of common stock in the Company’s public offering (see Note 2 to the financial statements, Financings).

Intrexon’s purchases were made on terms that were the same as others participating in the above financings.

- Definition

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References+ Details

Commitments and Contingencies

12 Months Ended

Dec. 31, 2014

Commitments and Contingencies

Commitments and Contingencies

Operating Leases

Prior to December 31, 2012, the Company entered into an operating lease in New York, NY, consisting of 6,251 square feet of office space. In accordance with this agreement, the Company entered into a letter of credit in the amount of $388 thousand, naming the Company’s landlord as beneficiary. In January 2012, the Company amended the lease agreement, adding 1,008 square feet of office space. As of December 31, 2012, the Company occupied 7,259 square feet of space in New York, NY, and maintained a $388 thousand letter of credit. The collateral for the letter of credit is recorded in other non-current assets on the balance sheet as of December 31, 2014. The lease for office space in New York, NY expires in October 2018.

On October 17, 2013, the Company entered into a sublease agreement to lease 7,259 square feet in our New York office to a subtenant. The Company remains primarily liable to pay rent on the original lease. The Company recorded a loss on the sublease in the amount of $729 thousand for the year ended December 31, 2013, representing the remaining contractual obligation of $2.3 million, less $1.6 million in payments from our subtenant. The Company retired assets in this subleased area as a result of this sublease with a net book value of $392 thousand, and recorded a loss on disposal of fixed assets for the same amount for the year ended December 31, 2013. The Company continues to maintain a $388 thousand letter of credit. The collateral for the letter of credit is recorded in other non-current assets on the balance sheet as of December 31, 2014. The lease for office space in New York, NY expires in October 2018.

Prior to December 31, 2012, the Company entered into separate operating lease agreements for various spaces in a building in Boston, MA. That space consisted of 5,249 square feet on the first floor, 8,538 square feet on the second floor, and 6,959 square feet on the third floor. In June 2012, the Company re-negotiated a master lease for the entire Boston office space, added 9,800 square feet of office space on the fourth floor, surrendered 4,113 square feet from the second floor, and incorporated all floors’ lease agreements under the same master agreement expiring in August 2016. The Company provided an additional $41 thousand security deposit for the additional space on the fourth floor. As of December 31, 2012, a total security deposit of $127 thousand was paid to its landlord for security deposits for these agreements.

As of December 31, 2014, the Company occupies 21,184 square feet of space in its Boston, MA office and has paid a total of $127 thousand for security deposits, which are recorded in other non-current assets on the balance sheet.

In April 2011, the Company entered into an operating lease for office space in Germantown, MD, consisting of 2,227 square feet. As of December 31, 2011, the Company recorded the $4 thousand security deposit in other non-current assets on the balance sheet. The lease would have expired in March 2014; however, on July 16, 2012, the Germantown, Maryland office was closed. In June 2013, the Company paid off the remainder of the Germantown, Maryland lease obligation.

Future net minimum lease payments under operating leases as of December 31, 2014 are as follows (in thousands):


2015	$	1,235
2016		997
2017		501
2018		424
2019		—

		3,157
Less: contractual sublease income		(1,224	)

Future minimum lease payments, net	$	1,933

Total rent expense was approximately $1.2 million, $1.0 million, and $1.1 million for the years ended December 31, 2014, 2013, and 2012. The Company records rent expense on a straight-line basis over the term of the lease. Accordingly, the Company has recorded a liability for deferred rent at December 31, 2014 and 2013 of $850 thousand ($280 thousand current and $570 long-term) and $1.1 million ($212 thousand current and $851 long-term) respectively, which is recorded in deferred rent on the balance sheet.

License Agreements

Exclusive Channel Partner Agreement with Intrexon Corporation

On January 6, 2011, the Company entered into an Exclusive Channel Partner Agreement, or the Channel Agreement, with Intrexon that governs a “channel partnering” arrangement in which the Company uses Intrexon’s technology directed towards in vivo expression of effectors in connection with the development of Ad-RTS-IL-12 + veledimex and DC-RTS-IL-12 + veledimex and generally to research, develop and commercialize products, in each case in which DNA is administered to humans for expression of anti-cancer effectors for the purpose of treatment or prophylaxis of cancer, which the Company collectively refer to as the Cancer Program. The Channel Agreement establishes committees comprised of representatives of us and Intrexon that govern activities related to the Cancer Program in the areas of project establishment, chemistry, manufacturing and controls, clinical and regulatory matters, commercialization efforts and intellectual property.

The Channel Agreement grants us a worldwide license to use patents and other intellectual property of Intrexon in connection with the research, development, use, importing, manufacture, sale, and offer for sale of products involving DNA administered to humans for expression of anti-cancer effectors for the purpose of treatment or prophylaxis of cancer, which we collectively refer to as the ZIOPHARM Products. Such license is exclusive with respect to any clinical development, selling, offering for sale or other commercialization of ZIOPHARM Products, and otherwise is non-exclusive. Subject to limited exceptions, the Company may not sublicense the rights described without Intrexon’s written consent.

Under the Channel Agreement, and subject to certain exceptions, the Company is responsible for, among other things, the performance of the Cancer Program, including development, commercialization and certain aspects of manufacturing of ZIOPHARM Products. Intrexon is responsible for the costs of establishing manufacturing capabilities and facilities for the bulk manufacture of products developed under the Cancer Program, certain other aspects of manufacturing and costs of discovery-stage research with respect to platform improvements and costs of filing, prosecution and maintenance of Intrexon’s patents.

Subject to certain expense allocations and other offsets provided in the Channel Agreement, the Company will pay Intrexon on a quarterly basis 50% of net profits derived in that quarter from the sale of ZIOPHARM Products, calculated on a ZIOPHARM Product-by- ZIOPHARM Product basis. The Company has likewise agreed to pay Intrexon on a quarterly basis 50% of revenue obtained in that quarter from a sublicensor in the event of a sublicensing arrangement. In addition, in partial consideration for each party’s execution and delivery of the Channel Agreement, the Company entered into a Stock Purchase Agreement with Intrexon.

Upon termination of the Channel Agreement, the Company may continue to develop and commercialize any ZIOPHARM Product that, at the time of termination:

•

Is being commercialized by us;

•

Has received regulatory approval;

•

Is a subject of an application for regulatory approval that is pending before the applicable regulatory authority; or

•

Is the subject of at least an ongoing Phase 2 clinical trial (in the case of a termination by Intrexon due to an uncured breach or a voluntary termination by us), or an ongoing Phase 1 clinical trial in the field (in the case of a termination by us due to an uncured breach or a termination by Intrexon following an unconsented assignment by us or our election not to pursue development of a Superior Therapy).

Our obligation to pay 50% of net profits or revenue described above with respect to these “retained” products will survive termination of the Channel Agreement.

License Agreement—The University of Texas M. D. Anderson Cancer Center

On January 13, 2015, the Company, together with Intrexon, entered into a license agreement, or the License, with MD Anderson. Pursuant to the License, the Company and Intrexon hold an exclusive, worldwide license to certain technologies owned and licensed by MD Anderson including technologies relating to novel chimeric antigen receptor (CAR) T-cell therapies arising from the laboratory of Laurence Cooper, M.D., Ph.D., professor of pediatrics at MD Anderson, as well as either co-exclusive or non-exclusive licenses under certain related technologies.

On January 9, 2015, in order to induce MD Anderson to enter into the License on an accelerated schedule, the Company and Intrexon entered into a letter agreement, or the Letter Agreement, pursuant to which MD Anderson will receive consideration of $7.5 million in shares of common stock (or 1,597,602 shares), and $7.5 million in shares of Intrexon’s common stock in each case based on a trailing 20 day volume weighted average of the closing price of the our and Intrexon’s common stock ending on the date prior to the Letter Agreement, collectively referred to as the Incentive Shares, in the event that the License was entered into on or prior to 8:00 am pacific time on January 14, 2015, referred to as the Accelerated Closing Deadline. The Incentive Shares will be issued to MD Anderson within sixty days of the date of the License pursuant to the terms of the Incentive Shares Securities Issuance Agreement described below.

License Agreement with DEKK-Tec, Inc.

On October 15, 2004, the Company entered into a license agreement with DEKK-Tec, Inc., pursuant to which it was granted an exclusive, worldwide license for palifosfamide.

In consideration for the license rights, DEKK-Tec is entitled to receive payments upon achieving certain milestones in varying amounts which on a cumulative basis may total $4.0 million. Of the aggregate milestone payments, most will be creditable against future royalty payments as referenced below. Additionally, the Company issued DEKK-Tec an option to purchase 27,616 shares of the Company’s common stock for $0.02 per share, of which 13,808 options are still outstanding. DEKK-Tec is entitled to receive single digit percentage royalty payments on the sales of palifosfamide should it be approved for commercial sale. The Company’s obligation to pay royalties will terminate on a country-by-country basis upon the expiration of all valid claims of patents in such country covering licensed product, subject to earlier termination in the event of defaults by the parties under the license agreement. No milestones under the license agreement have been reached or expensed since 2010.

License Agreement with Southern Research Institute

On December 22, 2004, the Company entered into an Option Agreement with the Southern Research Institute, or SRI, pursuant to which the Company was granted an exclusive option to obtain an exclusive license to SRI’s interest in certain intellectual property, including exclusive rights related to certain isophosphoramide mustard analogs. On February 5, 2007, the Company exercised its option and entered into the exclusive license agreement. Under the license agreement, the Company is required to remit minimum annual royalty payments of $25 thousand until the first commercial sale of a licensed product. These payments were made for the years ended December 31, 2014, 2013, and 2012. The Company may be required to make payments upon achievement of certain milestones in varying amounts which on a cumulative basis could total up to $775 thousand. In addition, SRI will be entitled to receive single digit percentage royalty payments on the sales of a licensed product in any country until all licensed patents rights in that country which are utilized in the product have expired. No milestones under the license agreement were reached or expensed since the agreement’s inception.

Patent and Technology License Agreement—The University of Texas M. D. Anderson Cancer Center and the Texas A&M University System.

On August 24, 2004, the Company entered into a patent and technology license agreement with The Board of Regents of the University of Texas System, acting on behalf of The University of Texas M. D. Anderson Cancer Center and the Texas A&M University System, which the Company refers to, collectively, as the Licensors. Under this agreement, the Company was granted an exclusive, worldwide license to rights (including rights to U.S. and foreign patent and patent applications and related improvements and know-how) for the manufacture and commercialization of two classes of organic arsenicals (water- and lipid-based) for human and animal use. The class of water-based organic arsenicals includes darinaparsin.

The Company issued options to purchase 50,222 shares outside the 2003 Stock Option Plan for $0.002 per share following the successful completion of certain clinical milestones, of which 37,666 have vested. The remaining 12,556 shares will vest upon enrollment of the first patient in a multi-center pivotal clinical trial i.e. a human clinical trial intended to provide the substantial evidence of efficacy necessary to support the filing of an approvable New Drug Application, or NDA. In addition, the Licensors are entitled to receive certain milestone payments. The Company may be required to make additional payments upon achievement of certain other milestones in varying amounts which on a cumulative basis could total up to an additional $4.5 million. In addition, the Licensors are entitled to receive single digit percentage royalty payments on sales from a licensed product and will also be entitled to receive a portion of any fees that the Company may receive from a possible sublicense under certain circumstances.

The license agreement also contains other provisions customary and common in similar agreements within the industry, such as the right to sublicense the Company rights under the agreement. On July 31, 2014, the Company amended and restated the License and Collaboration Agreement between the Company and Solasia Pharma K.K. or Solasia, granting to Solasia an exclusive worldwide license to develop and commercialize darinaparsin, and related organoarsenic molecules, in both intravenous and oral forms in all indications for human use. Solasia will be responsible for all costs related to the development, manufacturing and commercialization of darinaparsin. The Licensors will receive a portion of all milestone and royalty payments made by Solasia to the Company in accordance with the terms of the Company’s license agreement with the Licensors.

Collaboration Agreement with Solasia Pharma K.K.

On March 7, 2011, the Company entered into a License and Collaboration Agreement with Solasia Pharma K.K., or Solasia.

Pursuant to the License and Collaboration Agreement, the Company granted Solasia an exclusive license to develop and commercialize darinaparsin in both IV and oral forms and related organic arsenic molecules, in all indications for human use in a pan- Asian/Pacific territory comprised of Japan, China, Hong Kong, Macau, Republic of Korea, Taiwan, Singapore, Australia, New Zealand, Malaysia, Indonesia, Philippines and Thailand.

As consideration for the license, the Company received an upfront payment of $5.0 million to be used exclusively for further clinical development of darinaparsin outside of the pan-Asian/Pacific territory, and will be entitled to receive additional payments of up to $32.5 million in development-based milestones and up to $53.5 million in sales-based milestones. The Company will also be entitled to receive double digit royalty payments from Solasia based upon net sales of licensed products in the applicable territories, once commercialized, and a percentage of sublicense revenues generated by Solasia. Under the License and Collaboration Agreement, the Company provided Solasia with drug product to conduct clinical trials. These transfers were accounted for as a reduction of research and development costs and an increase in collaboration receivables. The agreement provides that Solasia will be responsible for the development and commercialization of darinaparsin in the pan-Asian/Pacific territory.

On July 31, 2014, the Company entered into an amendment and restatement of the License and Collaboration Agreement granting Solasia an exclusive worldwide license to develop and commercialize darinaparsin, and related organoarsenic molecules, in both intravenous and oral forms in all indications for human use. In exchange, the Company will be eligible to receive from Solasia development-and sales-based milestones, a royalty on net sales of darinaparsin, once commercialized, and a percentage of any sublicense revenues generated by Solasia. Solasia will be responsible for all costs related to the development, manufacturing and commercialization of darinaparsin. The Company’s Licensors will receive a portion of all milestone and royalty payments made by Solasia to the Company in accordance with the terms of the Company’s license agreement with the Licensors.

The $5.0 million upfront payment received in March 2011 is being amortized over the period of the Company’s research and development effort. The Company originally estimated this period to be 75 months. In accordance with the amended and restated License and Collaboration Agreement with Solasia, the Company is no longer obligated to continue their research and development efforts in connection with the upfront payment. However, there are certain deliverables that are included in the amended and restated License and Collaboration Agreement including transfer of intellectual property and prior research and development results, which were originally estimated by management to be completed by March 31, 2015 when the amended and restated License and Collaboration Agreement was signed in July 2014. Management reassessed the period of performance related to the remaining transitional services to be completed under the agreement and determined that the services are now expected to be completed by December 31, 2015. As a result, the Company has determined that the estimated remaining period for delivering the transitional services at September 30, 2014 was 15 months through December 31, 2015. Accordingly, the Company has recorded $1.4 million in revenue during the twelve months ended December 31, 2014 while the remaining deferred revenue balance of $1.4 million at December 31, 2014 has been classified as current.

License Agreement with Baxter Healthcare Corporation

On November 3, 2006, the Company entered into a definitive Asset Purchase Agreement for indibulin and a License Agreement to proprietary nanosuspension technology with affiliates of Baxter Healthcare S.A. The purchase included the entire indibulin intellectual property portfolio as well as existing drug substance and capsule inventories. The terms of the Asset Purchase Agreement included an upfront cash payment and an additional payment for existing inventory.

During each of the years ended December 31, 2014, 2013, and 2012, the installment payments of $250 thousand were met and expensed.

Collaboration Agreement with Harmon Hill, LLC

On April 8, 2008, the Company signed a collaboration agreement for Harmon Hill, LLC, or Harmon Hill, to provide consulting and other services for the development and commercialization of oncology therapeutics by ZIOPHARM.

The Company expensed $200 thousand during the year ended December 31, 2012 under this agreement. This agreement expired on November 8, 2012.

On June 27, 2013, the Company signed a new collaboration agreement with Harmon Hill to provide consulting and other services for the development and commercialization of oncology therapeutics by ZIOPHARM, effective April 1, 2013. Under the agreement the Company has agreed to pay Harmon Hill $15 thousand per month for the consulting services. Subject to renewal or extension by the parties, the term of the agreement is for a one year period. The Company expensed $135 thousand and $180 thousand for the years ended December 31, 2013 and 2014, respectively.

CRO Services Agreement with Novella Clinical, Inc.

On December 4, 2008, the Company entered into a Master Clinical Research Organization Services Agreement with Novella Clinical, Inc., or Novella, under which Novella provides CRO services in support of our clinical trials. The work order for the newest trial being conducted by Novella was signed on November 2, 2012. Novella was entitled to cumulative payments of up to $790 thousand under these arrangements, which is payable in varying amounts upon Novella achieving specified milestones. During the year ended December 31, 2012, the Company expensed $256 thousand upon the achievement of various milestones. During the year ended December 31, 2013, two database related milestones and one site activation related milestone were met and expensed totaling $136 thousand.

On August 18, 2014 and November 6, 2014, the Company signed two amendments of the Master Clinical Research Organization Services Agreement with Novella. The amendments reflect the removal of data management, statistical and clinical study report services, as well as a change in the timeline and scope of clinical trial support. During the year ended December 31, 2014, three clinical milestones were met and expensed totaling $236 thousand.

CRO Services Agreement with MS Clinical Services, LLC.

On July 24, 2014, the Company entered into a Master Clinical Research Organization Services Agreement with MS Clinical Services, LLC., or Medsource, under which Medsource provides CRO services in support of our clinical trials. There are no milestones associated with this agreement.

CRO Services Agreement with PPD Development, L. P.

The Company was party to a Master Clinical Research Organization Services Agreement with PPD Development, L. P., or PPD, dated January 29, 2010, a related work order dated June 25, 2010 and a related work order dated April 8, 2011 under which PPD provides clinical research organization, or CRO, services in support of the Company’s clinical trials. During the years ended December 31, 2012 and 2013, the Company expensed $3.8 million and $9.2 million respectively. There are no remaining milestones related to this agreement.

CRO Services Agreement with Pharmaceutical Research Associates, Inc.

On December 13, 2011, the Company entered into a Master Clinical Research Organization Services Agreement with Pharmaceutical Research Associates, Inc., or PRA, under which PRA provides CRO services in support of our clinical trials. During the years ended December 31, 2012 and 2013, the Company expensed $7.3 million and $2.2 million, respectively. There are no remaining milestones related to this agreement.

- Definition

The entire disclosure for commitments and contingencies.

+ References+ Details

Warrants

12 Months Ended

Dec. 31, 2014

Warrants

Warrants

The Company has issued both warrants that are accounted for as liabilities and warrants that are accounted for as equity instruments.

The Company follows accounting standards that provide guidance in assessing whether an equity-issued financial instrument is indexed to an entity’s own stock for purposes of determining whether a financial instrument should be treated as a derivative and classified as a liability. Accounting standards require that liability classified warrants be recorded at their fair value at each financial reporting period and the resulting gain or loss be recorded as other income (expense) in the Statements of Operations. Fair value is measured using the binomial valuation model.

In connection with the December 2009 public offering, the Company issued warrants to purchase an aggregate of 8,206,520 shares of common stock (including the investor warrants and 464,520 warrants issued to the Underwriters). The investor warrants were exercisable immediately and the underwriter warrants exercisable six months after the date of issuance. The warrants had an exercise price of $4.02 per share and a 5 year term. The fair value of the warrants was estimated at $22.9 million using a Black-Scholes model with the following assumptions: expected volatility of 105%, risk free interest rate of 2.14%, expected life of 5 years and no dividends.

Subject to certain exceptions, these warrants provide for anti-dilution protection should common stock or common stock equivalents be subsequently issued at a price less than the exercise price of the warrants then in effect, which was initially $4.02 per share. This provision was triggered in 2013 when stock was sold at $3.50 per share in our 2013 public offering. Accordingly, the outstanding warrants were increased by 184,367 warrants to 8,235,076 warrants.

The Company assessed whether the 2009 Warrants required accounting as derivatives. The Company determined that the warrants were not indexed to the Company’s own stock in accordance with accounting standards codification Topic 815, Derivatives and Hedging. As such, the Company concluded the warrants did not meet the scope exception for determining whether the instruments required accounting as derivatives and should be classified in liabilities.

On December 31, 2013, the liability-classified warrants were valued at $11.8 million using a Binomial/Monte Carlo valuation model. The decrease in the fair value of the warrant liabilities of $1.2 million for the year ended December 31, 2013 was recorded as Other income, net in the Statements of Operations.

On December 31, 2012, the liability-classified warrants were valued at $13.0 million using a Binomial/Monte Carlo valuation model. The decrease in the fair value of the warrant liabilities of $6.1 million for the year ended December 31, 2012 was recorded as Other income, net in the Statements of Operations.

The following pricing assumptions were used in the Binomial/Monte Carlo valuation model at December 31, 2013 and 2012:


	December 31, 2013			December 31, 2012
Risk-free interest rate		0.13	%		0.25	%
Expected life in years		0.94			1.94
Expected volatility		80	%		70	%
Expected dividend yield		0			0

Warrants accounted for as equity instruments include the following issuances:

In connection with its 2009 private placement, the Company issued warrants to purchase an aggregate of 2,910,954 shares of common stock (including 138,617 warrants issued to the placement agents) which were exercisable immediately. The warrants have an exercise price of $2.04 per share and have a 5 year term. The fair value of the warrants was estimated at $4.2 million using a Black-Scholes model with the following assumptions: expected volatility of 105%, risk free interest rate of 2.41%, expected life of 5 years and no dividends. The fair value of the warrants was recorded in the equity section of the balance sheet. In October 2009, 136,986 of these warrants were exercised.

During 2012, no new warrants were issued. However, 553,914 warrants were exercised for 259,660 shares of common stock. Of these warrants, 186,297 were equity-classified and 373,617 were liability-classified. Additionally, 1,359,317 equity-classified warrants and 579 liability-classified warrants expired without being exercised.

During 2013, no new warrants were issued. However 135,346 warrants were exercised for 112,808 shares of common stock. Of these warrants, all 135,346 were equity-classified; there were no liability-classified warrants exercised. Additionally, 706,708 equity-classified warrants expired without being exercised.

During 2014, no new warrants were issued. However 4,004,907 warrants were exercised for 3,725,277 shares of common stock. Of these warrants, 2,249,062 were equity-classified and 1,755,845 were liability-classified warrants. Additionally, 12,329 equity-classified warrants and 6,479,231 liability-classified warrants expired without being exercised.

All warrants have expired and none are outstanding as of December 31, 2014.

Income Taxes

12 Months Ended

Dec. 31, 2014

Income Taxes

10.

Income Taxes

There is no provision for income taxes because the Company has incurred operating losses since inception. The reported amount of income tax expense for the years differs from the amount that would result from applying domestic federal statutory tax rates to pretax losses primarily because of the changes in the valuation allowance. Significant components of the Company’s deferred tax assets at December 31, 2014 and 2013 are as follows:


	December 31,
(in thousands)	2014			2013
Net operating loss carryforwards	$	79,050		$	66,209
Start-up and organizational costs		38,562			41,529
Research and development credit carryforwards		26,112			25,058
Stock compensation		1,181			1,028
Capitalized acquisition costs		11,376			12,323
Deferred revenue		534			1,074
Depreciation		208			129
Other		1,547			1,254

		158,570			148,604
Less valuation allowance		(158,570	)		(148,604	)

Net deferred tax assets	$	—		$	—

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. At December 31, 2014, the Company has aggregate net operating loss carryforwards for federal tax purposes of approximately $206.9 million available to offset future federal taxable income to the extent permitted under the Internal Revenue Code of 1986, as amended, or IRC, expiring in varying amounts through 2033. Additionally, the Company has approximately $26.0 million of research and development credits at December 31, 2014, expiring in varying amounts through 2033, which may be available to reduce future taxes.

Under the IRC Section 382, certain substantial changes in the Company’s ownership may limit the amount of net operating loss carryforwards that can be utilized in any one year to offset future taxable income. The net operating loss carryforwards for the year ended December 31, 2014 includes approximately $4.4 million resulting from excess tax deductions from stock options. Pursuant to ASC 740, the deferred tax asset relating to excess tax benefits generated from exercises of stock options was not recognized for financial statement purposes.

Section 382 of the IRC provides limits to which a corporation that has undergone a change in ownership (as defined) can utilize any net operating loss, or NOL, and general business tax credit carryforwards it may have. The Company commissioned an analysis to determine whether Section 382 could limit the use of its carryforwards in this manner. After completing the analysis, it was determined an ownership change had occurred in February 2007. As a result of this change, the Company’s NOL’s and general business tax credits from February 23, 2007 and prior would be completely limited under IRC Section 382. The deferred tax assets related to NOL’s and general business credits have been reduced by $11.2 million and $636 thousand, respectively, as a result of the change. The Company updated the IRC Section 382 analysis through December 31, 2014. It was determined a change of ownership occurred on February 28, 2011. The Company’s NOL’s were not further limited as a result of the change.

The Company has provided a valuation allowance for the full amount of these net deferred tax assets, since it is more likely than not that these future benefits will not be realized. However, these deferred tax assets may be available to offset future income tax liabilities and expenses. The valuation allowance increased by $10.0 million primarily due to net operating loss carryforwards, start-up and organizational costs, and the increase in research and development credits.

A reconciliation of income tax expense (benefit) at the statutory federal income tax rate and income taxes as reflected in the financial statements is as follows:


	Year Ended December 31,
(in thousands)	2014			2013			2012
Federal income tax at statutory rates		34	%		34	%		34	%
State income tax, net of federal tax benefit		2	%		4	%		5	%
Research and development credits		3	%		9	%		10	%
Stock compensation		-4	%		-2	%		-1	%
Uncertain tax position adjustment		0	%		0	%		0	%
Federal R&D tax grant		0	%		0	%		0	%
Other		-4	%		1	%		2	%
Increase in valuation allowance		-31	%		-46	%		-49	%

Effective tax rate		0	%		0	%		0	%

The Company adopted ASC740, “Accounting for Uncertain Tax Positions” on January 1, 2007. ASC740 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with FASB Statement No. 109, “Accounting for Income Taxes.” ASC 740 prescribes a recognition threshold and measurement of a tax position taken or expected to be taken in a tax return. The Company did not establish any additional reserves for uncertain tax liabilities upon adoption of ASC 740. A summary of the company’s adjustments to its uncertain tax positions in the years ended December 31, 2014, 2013, and 2012 are as follows:


(in thousands)
Balance at December 31, 2011	$	275
Increase/Decrease for tax positions related to the current year		—
Increase/Decrease for tax positions related to prior years		—
Decreases for settlements with applicable taxing authorities		—
Decreases for lapses of statute of limitations		—

Balance at December 31, 2012	$	275
Increase/Decrease for tax positions related to the current year		—
Increase/Decrease for tax positions related to prior years		(37	)
Decreases for settlements with applicable taxing authorities		—
Decreases for lapses of statute of limitations		—

Balance at December 31, 2013	$	238
Increase/Decrease for tax positions related to the current year		—
Increase/Decrease for tax positions related to prior years		—
Decreases for settlements with applicable taxing authorities		—
Decreases for lapses of statute of limitations		—

Balance at December 31, 2014	$	238

The Company has not recognized any interest and penalties in the statement of operations because of the Company’s net operating losses and tax credits that are available to be carried forward. When necessary, the Company will account for interest and penalties related to uncertain tax positions as part of its provision for federal and state income taxes. The Company does not expect the amounts of unrecognized benefits will change significantly within the next twelve months.

The Company is currently open to audit under the statute of limitations by the Internal Revenue Service and state jurisdictions for the years ended December 31, 1999 through 2014.

- 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

Preferred Stock and Stockholders' Equity

12 Months Ended

Dec. 31, 2014

Preferred Stock and Stockholders' Equity

11.

Preferred Stock and Stockholders’ Equity

On April 26, 2006, the date of the Company’s annual stockholders meeting that year, the shareholders approved the adoption of an Amended and Restated Certificate of Incorporation pursuant to which the Company has 280,000,000 shares of authorized capital stock, of which 250,000,000 shares are designated as common stock (par value $.001 per share), and 30,000,000 shares are designated as preferred stock (par value $.001 per share), which the Company refers to as the Preferred Stock.

Common Stock

On January 6, 2011, and in conjunction with the Company’s execution and delivery of a Channel Agreement, the Company entered into a Stock Purchase Agreement and Registration Rights Agreement. On January 12, 2011, and pursuant to that Stock Purchase Agreement, the Company sold 2,426,235 shares of the Company’s common stock in a private placement for a total purchase price of $11.6 million, or $4.80 per share. The Company simultaneously issued an additional 3,636,926 shares of its common stock for a cash purchase price equal to the $0.001 par value of such shares, which price was deemed paid in partial consideration for the execution and delivery of the Channel Agreement.

On January 20, 2012, pursuant to an underwriting agreement between the Company and J. P. Morgan Securities LLC, as representative of the several underwriters named therein, the Company completed the sale of an aggregate 10,114,401 shares of the Company’s common stock at a price of $5.20 per share in a public offering. The total gross proceeds resulting from the 2012 public offering were approximately $52.6 million, before deducting selling commissions and expenses (see Note 2 to the financial statements, Financings).

On November 7, 2012, the Company issued 3,636,926 shares of our common stock, which we refer to as the Milestone Shares, to Intrexon under the terms of its Stock Purchase Agreement with Intrexon dated January 6, 2011. Under the terms of the Stock Purchase Agreement with Intrexon, the Company agreed to issue the Milestone Shares under certain conditions upon dosing of the first patient in a ZIOPHARM-conducted Phase 2 clinical trial in the Unites States, or similar study as the parties may agree in a country other than the United States, of a product candidate that is created, produced, developed or identified directly or indirectly by us during the term of the Channel Agreement and that, subject to certain exceptions, involves DNA administered to humans for expression of anti-cancer effectors for the purpose of treatment or prophylaxis of cancer. On October 24, 2012, the Company initiated dosing in a Phase 2 study of Ad-RTS-IL-12 + veledimex for unresectable Stage III or IV melanoma, triggering the issuance of the Milestone Shares.

On October 29, 2013, pursuant to an underwriting agreement between the Company and J. P. Morgan Securities LLC, as representative of the several underwriters named therein, the Company completed the sale of an aggregate 16,445,000 shares of the Company’s common stock at a price of $3.50 per share in a public offering. The total gross proceeds resulting from this public offering were approximately $57.6 million, before deducting selling commissions and expenses (see Note 2 to the financial statements, Financings).

As of December 31, 2014, the Company had 104,452,105 shares of common stock issued and outstanding and no shares of Preferred Stock issued and outstanding.

On February 3, 2015, the Company entered into an underwriting agreement with J.P. Morgan Securities LLC, as representative of the several underwriters named therein, relating to the issuance and sale of 10,000,000 shares of our common stock. The price to the public in the offering was $8.75 per share, and the underwriters agreed to purchase the shares from the Company pursuant to the underwriting agreement at a purchase price of $8.225 per share. Under the terms of the underwriting agreement, the Company also granted the underwriters an option, exercisable for 30 days, to purchase up to an additional 1,500,000 shares of common stock at a purchase price of $8.225 per share. The offering was made pursuant to the Company’s effective registration statement on Form S-3 (Registration Statement No. 333-201826) previously filed with the SEC, and a prospectus supplement thereunder. The underwriters purchased the 10,000,000 shares and the additional 1,500,000 shares on February 9 and 17, 2015, respectively. The net proceeds from the offering were approximately $94.2 million after deducting underwriting discounts and estimated offering expenses payable by the Company.

Preferred Stock

The Company’s Board of Directors are authorized to designate any series of Preferred Stock, to fix and determine the variations in relative rights, preferences, privileges and restrictions as between and among such series.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

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-Topic 210

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-Section 02

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-Article 5

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Reference 11: http://www.xbrl.org/2003/role/presentationRef

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+ Details

Stock Option Plan

12 Months Ended

Dec. 31, 2014

Stock Option Plan

12.

Stock Option Plan

The Company adopted the 2003 Stock Option Plan, or the 2003 Plan, in 2003, and it was approved by the Company’s stockholders on December 21, 2004. Upon approval of the 2012 Equity Incentive Plan, no additional stock awards may be granted under the 2003 Plan.

The Company adopted the 2012 Equity Incentive Plan, or the 2012 Plan, in May 2012, under which the Company initially reserved for the issuance of 4,000,000 shares of its common stock. The 2012 Plan was approved by the Company’s stockholders on June 20, 2012. On June 18, 2014, the date of the Company’s annual stockholders meeting, the Company’s stockholders approved an amendment to the 2012 Plan increasing the total shares reserved by 5,000,000 shares, for a total of 9,000,000 shares.

As of December 31, 2014, the Company had outstanding options issued to its employees to purchase up to 5,112,800 shares of the Company’s common stock, to its directors to purchase up to 902,529 shares of the Company’s common stock, as well as options to consultants in connection with services rendered to purchase up to 490,334 shares of the Company’s common stock.

Stock options to employees generally vest ratably over three years and have contractual terms of ten years. Stock options to directors generally vest ratably over two or three years and have contractual terms of ten years. Stock options are valued using the Black-Scholes option pricing model and compensation is recognized based on such fair value over the period of vesting on a straight-line basis. The Company has also reserved an aggregate of 26,364 additional shares for issuance under options granted outside of the 2003 Stock Option Plan. The options were granted to The University of Texas M. D. Anderson Cancer Center and DEKK-Tec, Inc. (see Note 8 to the financial statements, Commitments and Contingencies).

Proceeds from the option exercises during the years ended December 31, 2014, 2013, and 2012 amounted to $1.4 million, $956 thousand, and $30 thousand, respectively. The intrinsic value of these options amounted to $2.6 million, $1.4 million and $11 thousand for years ended December 31, 2014, 2013 and 2012, respectively.

Transactions under the Plan for the years ending December 31, 2014, 2013, and 2012 were as follows:


(in thousands, except share and per share data)	Number of Shares			Weighted- Average Exercise Price		Weighted- Average Contractual Term (Years)	Aggregate Intrinsic Value
Outstanding, December 31, 2011		5,138,486			4.08
Granted		2,309,650			4.36
Exercised		(8,300	)		3.61
Cancelled		(292,533	)		5.70

Outstanding, December 31, 2012		7,147,303			4.11
Granted		2,649,900			3.28
Exercised		(570,168	)		1.68
Cancelled		(2,479,732	)		4.58

Outstanding, December 31, 2013		6,747,303			3.81
Granted		1,099,300			4.95
Exercised		(613,138	)		2.26
Cancelled		(727,801	)		4.54

Outstanding, December 31, 2014		6,505,664		$	4.07	7.19	$9,084

Vested and unvested expected to vest at December 31, 2014		6,485,430		$	4.10	5.80	$9,056

Options exercisable, December 31, 2014		3,781,162		$	4.10	5.80	$4,130

Options exercisable, December 31, 2013		3,471,935		$	4.01	5.03	$2,654

Options available for future grant		4,585,769

At December 31, 2014, total unrecognized compensation costs related to non-vested stock options outstanding amounted to $7.9 million. The cost is expected to be recognized over a weighted-average period of 1.62 years.

Restricted Stock

In December 2014, the Company issued 66,828 shares of restricted stock to its non-employee directors, which vest in their entirety on the one year anniversary of the grant date. In December 2013, the Company issued 75,272 shares of restricted stock to its non-employee directors, which vested in their entirety on the one year anniversary of the grant date. In January, February and May 2012, the Company issued 101,500, 43,802 and 25,000 shares of restricted stock to employees, which vested ratably in annual installments over three years, respectively, commencing on the first anniversary of the grant date. In December 2012, the Company also issued 87,730 shares of restricted stock to its non-employee directors, which vested ratably in annual installments over three years, commencing on the first anniversary of the grant date.

In January, February and December 2014, the Company repurchased 16,031, 14,600 and 81,702 shares at average prices of $4.37, $4.40 and $5.04 per share, respectively, to cover payroll taxes. In January, March, May and December 2013, the Company repurchased 52,018, 5,400, 2,623, and 56,683 shares at average prices of $4.28, $4.50, $1.65 and $4.37 per share, respectively, to cover payroll taxes. In July and December 2012, the Company repurchased 15,740 and 107,413 shares at $6.06 and $4.19 per share, respectively, to cover payroll taxes. A summary of the status of non-vested restricted stock as of December 31, 2014, 2013 and 2012 is as follows:


	Number of Shares			Weighted-Average Grant Date Fair Value
Non-vested, December 31, 2011		950,906		$	4.34
Granted		258,032			4.39
Vested		(351,829	)		4.32
Cancelled		(123,370	)		4.34

Non-vested, December 31, 2012		733,739			4.37
Granted		75,272			4.34
Vested		(292,399	)		4.31
Cancelled		(163,747	)		4.42

Non-vested, December 31, 2013		352,865			4.38
Granted		66,828			5.07
Vested		(253,835	)		4.38
Cancelled		(21,350	)		4.41

Non-vested, December 31, 2014		144,508		$	4.70

As of December 31, 2014, there was $471 thousand of total unrecognized stock-based compensation expense related to non-vested restricted stock arrangements. The expense is expected to be recognized over a weighted-average period of 1.00 years.

Selected Quarterly Information (Unaudited)

12 Months Ended

Dec. 31, 2014

Selected Quarterly Information (Unaudited)

14.

Selected Quarterly Information (Unaudited)

(in thousands, except per share amount)


Year Ended December 31, 2014	First Quarter			Second Quarter			Third Quarter			Fourth Quarter
Revenue	$	200		$	200		$	633		$	340
Total operating expenses		9,984			11,377			12,575			10,936
Loss from operations		(9,784	)		(11,177	)		(11,942	)		(10,596	)
Change in fair value of warrants		82			5,600			5,847			194
Net (loss)		(9,711	)		(5,576	)		(6,093	)		(10,401	)
Loss per share, basic and diluted	$	(0.10	)	$	(0.06	)	$	(0.06	)	$	(0.09	)


Year Ended December 31, 2013	First Quarter			Second Quarter			Third Quarter			Fourth Quarter
Revenue	$	200		$	200		$	200		$	200
Total operating expenses		23,783			18,496			9,315			6,919
Loss from operations		(23,583	)		(18,296	)		(9,115	)		(6,719	)
Change in fair value of warrants		10,788			(403	)		(7,407	)		(1,793	)
Net (loss)		(12,799	)		(18,692	)		(16,713	)		(8,903	)
Loss per share, basic and diluted	$	(0.15	)	$	(0.22	)	$	(0.20	)	$	(0.09	)

- Definition

The entire disclosure for the quarterly financial data in the annual financial statements. The disclosure may include a tabular presentation of financial information for each fiscal quarter for the current and previous year, including revenues, gross profit, income or loss before extraordinary items and earnings per share data. It also includes an indication if the information in the note is unaudited, comments on the aggregate effect of year-end adjustments, and an explanation of matters or transactions that affect comparability or are pertinent to an understanding of the information furnished.

+ References+ Details

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2014

Basis of Presentation

Basis of Presentation

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

Use of Estimates

Use of Estimates

The Company’s most significant estimates and judgments used in the preparation of our financial statements are:

•

Clinical trial expenses;

•

Fair value measurements for stock based compensation and warrants; and

•

Income taxes.

Subsequent Events

Subsequent Events

Our director, Randall J. Kirk, is the CEO, a director, and the largest stockholder of Intrexon, which is a party to the License. Mr. Kirk is also one of our principal stockholders.

On February 3, 2015, the Company entered into an underwriting agreement with J.P. Morgan Securities LLC (see Note 2 above).

Cash and Cash Equivalents

Cash and Cash Equivalents

Concentrations of Credit Risk

Concentrations of Credit Risk

Property and Equipment

Property and Equipment

Restricted Cash

Restricted Cash

Other assets include $388 thousand that is restricted as collateral for the Company’s facility leases and $103 thousand that is restricted as collateral for a line of credit.

Long-Lived Assets

Long-Lived Assets

Warrants

Warrants

Fair Value Measurements

Fair Value Measurements

•

Level 1—Quoted prices in active markets for identical assets or liabilities.

•

Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Assets and liabilities measured at fair value on a recurring basis as of December 31, 2014 and 2013 are as follows:


($ in thousands)	Fair Value Measurements at Reporting Date Using
Description	Balance as of December 31, 2014		Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents	$	37,290	$	37,290	$	—	$	—

Warrant liability	$	—	$	—	$	—	$	—


($ in thousands)	Fair Value Measurements at Reporting Date Using
Description	Balance as of December 31, 2013		Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents	$	66,794	$	66,794	$	—	$	—

Warrant liability	$	11,776	$	—	$	11,776	$	—

Revenue Recognition

Revenue Recognition

Research and Development Costs

Research and Development Costs

Income Taxes

Income Taxes

Accounting for Stock-Based Compensation

Accounting for Stock-Based Compensation


	Year ended December 31,
(in thousands)	2014		2013		2012
Research and development	$	1,416	$	792	$	1,917
General and administrative		3,327		2,715		2,963

Share based employee compensation expense before tax		4,743		3,507		4,880
Income tax benefit		—		—		—

Net share based employee compensation expense	$	4,743	$	3,507	$	4,880


	2014	2013	2012
Weighted average risk-free interest rate	1.74 - 2.11%	1.00 - 2.10%	0.79 - 1.13%
Expected life in years	6	6	6
Expected volatility	85.22 - 94.55%	83.40 - 95.96%	83.36 - 83.53%
Expected dividend yield	0	0	0

Net Loss Per Share

Net Loss Per Share


	December 31,
	2014		2013		2012
Stock options		6,505,664		6,747,303		7,147,303
Unvested restricted stock		144,508		352,865		733,739
Warrants		—		10,539,767		11,197,454

		6,650,172		17,639,935		19,078,496

New Accounting Pronouncements

New Accounting Pronouncements

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2014

Assets and Liabilities Measured at Fair Value on Recurring Basis

Assets and liabilities measured at fair value on a recurring basis as of December 31, 2014 and 2013 are as follows:


($ in thousands)	Fair Value Measurements at Reporting Date Using
Description	Balance as of December 31, 2014		Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents	$	37,290	$	37,290	$	—	$	—

Warrant liability	$	—	$	—	$	—	$	—


($ in thousands)	Fair Value Measurements at Reporting Date Using
Description	Balance as of December 31, 2013		Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents	$	66,794	$	66,794	$	—	$	—

Warrant liability	$	11,776	$	—	$	11,776	$	—

Share-Based Compensation Expense Included in Statements of Operations

The following table presents share-based compensation expense included in the Company’s Statements of Operations:


	Year ended December 31,
(in thousands)	2014		2013		2012
Research and development	$	1,416	$	792	$	1,917
General and administrative		3,327		2,715		2,963

Share based employee compensation expense before tax		4,743		3,507		4,880
Income tax benefit		—		—		—

Net share based employee compensation expense	$	4,743	$	3,507	$	4,880

Assumptions for Volatility, Expected life, Dividend Yield and Risk-free Interest Rate

The assumptions for volatility, expected life, dividend yield and risk-free interest rate are presented in the table below:


	2014	2013	2012
Weighted average risk-free interest rate	1.74 - 2.11%	1.00 - 2.10%	0.79 - 1.13%
Expected life in years	6	6	6
Expected volatility	85.22 - 94.55%	83.40 - 95.96%	83.36 - 83.53%
Expected dividend yield	0	0	0

Potential Dilutive Shares Excluded from Computation of Diluted Net Loss Per Share

The Company’s potential dilutive shares, which include outstanding common stock options, unvested restricted stock and warrants, have not been included in the computation of diluted net loss per share for any of the periods presented as the result would be antidilutive. Such potential common shares at December 31, 2014, 2013, and 2012 consist of the following:


	December 31,
	2014		2013		2012
Stock options		6,505,664		6,747,303		7,147,303
Unvested restricted stock		144,508		352,865		733,739
Warrants		—		10,539,767		11,197,454

		6,650,172		17,639,935		19,078,496

Property and Equipment, net (Tables)

12 Months Ended

Dec. 31, 2014

Component of Property and Equipment, Net

Property and equipment, net, consists of the following:


	December 31,
(in thousands)	2014			2013
Office and computer equipment	$	1,094		$	1,076
Software		874			884
Leasehold improvements		927			841
Manufacturing equipment		251			153

		3,146			2,954
Less: accumulated depreciation		(2,615	)		(2,153	)

Property and equipment, net	$	531		$	801

Accrued Expenses (Tables)

12 Months Ended

Dec. 31, 2014

Component of Accrued Expenses

Accrued expenses consist of the following:


	December 31,
(in thousands)	2014		2013
Clinical consulting services	$	2,802	$	3,751
Preclinical services		2,027		513
Employee compensation		768		252
Professional services		422		582
Payroll taxes and benefits		417		255
Manufacturing services		308		547
Other consulting services		226		230
Accrued vacation		212		227

Accrued expenses	$	7,182	$	6,357

Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2014

Future Net Minimum Lease Payments under Operating Leases

Future net minimum lease payments under operating leases as of December 31, 2014 are as follows (in thousands):


2015	$	1,235
2016		997
2017		501
2018		424
2019		—

		3,157
Less: contractual sublease income		(1,224	)

Future minimum lease payments, net	$	1,933

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2014

Significant Component of Deferred Tax Assets

Significant components of the Company’s deferred tax assets at December 31, 2014 and 2013 are as follows:


	December 31,
(in thousands)	2014			2013
Net operating loss carryforwards	$	79,050		$	66,209
Start-up and organizational costs		38,562			41,529
Research and development credit carryforwards		26,112			25,058
Stock compensation		1,181			1,028
Capitalized acquisition costs		11,376			12,323
Deferred revenue		534			1,074
Depreciation		208			129
Other		1,547			1,254

		158,570			148,604
Less valuation allowance		(158,570	)		(148,604	)

Net deferred tax assets	$	—		$	—

Reconciliation of Income Tax Expense (Benefit)

A reconciliation of income tax expense (benefit) at the statutory federal income tax rate and income taxes as reflected in the financial statements is as follows:

Year Ended December 31,

(in thousands)

2014

2013