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Document and Entity Information - shares	3 Months Ended
Mar. 31, 2014	May 09, 2014
Document and Entity Information
Entity Registrant Name	Ophthotech Corp.
Entity Central Index Key	0001410939
Document Type	10-Q
Document Period End Date	Mar. 31, 2014
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	No
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		33,341,025
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q1

Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2014	Dec. 31, 2013
Current assets
Cash and cash equivalents	$ 66,562	$ 210,596
Available for sale securities	196,500
Prepaid expenses and other current assets	5,270	6,804
Total current assets	268,332	217,400
Available for sale securities	27,763
Property and equipment, net	743	27
Security deposits	255	255
Total assets	297,093	217,682
Current liabilities
Accrued clinical drug supplies and trial costs	2,802	2,485
Accounts payable and accrued expenses	3,753	3,810
Total current liabilities	6,555	6,295
Royalty purchase liability	83,333	41,667
Total liabilities	89,888	47,962
Stockholders' equity
Preferred stock - $0.001 par value, 5,000,000 shares authorized, no shares issued or outstanding
Common stock - $0.001 par value, 200,000,000 shares authorized, 33,324,766 and 31,413,208 shares issued and outstanding at March 31, 2014 and December 31, 2013, respectively	33	31
Additional paid-in capital	410,886	352,739
Deficit accumulated during development stage	(203,732)	(183,050)
Accumulated other comprehensive income	18
Total stockholders' equity	207,205	169,720
Total liabilities and stockholders' equity	$ 297,093	$ 217,682

Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2014	Dec. 31, 2013
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	33,324,766	31,413,208
Common stock, shares outstanding	33,324,766	31,413,208

Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		87 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014
Costs and expenses:
Research and development	$ 14,377	$ 2,389	$ 122,484
General and administrative	6,349	1,738	47,908
Total costs and expenses	20,726	4,127	170,392
Loss from operations	(20,726)	(4,127)	(170,392)
Interest income (expense)	44	(357)	(1,438)
Loss on extinguishment of debt			(1,091)
Other loss		(134)	(1,546)
Change in fair value related to investor rights liability			683
Net loss before income tax benefit	(20,682)	(4,618)	(173,784)
Income tax benefit			1,327
Net loss	(20,682)	(4,618)	(172,457)
Add: accretion of preferred stock dividends		(1,742)	(33,046)
Net loss attributable to common stockholders	$ (20,682)	$ (6,360)	$ (205,503)
Net loss attributable to common stockholders per share :
Basic and diluted (in dollars per share)	$ (0.64)	$ (4.33)
Weighted average common shares outstanding:
Basic and diluted (in shares)	32,282	1,470

Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended		87 Months Ended
Statements of Cash Flows - USD ($) $ in Thousands	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014
Operating Activities
Net loss	$ (20,682)	$ (4,618)	$ (172,457)
Adjustments to reconcile net loss to net cash used in operating activities :
Depreciation	12	7	186
Amortization of debt issuance costs		32	135
Accretion of debt discount		34	146
Non-cash change in fair value of warrant liability		134	1,563
Non-cash change in fair value of investor rights liability			(683)
Loss on extinguishment of debt			1,091
Share-based compensation	2,729	108	6,790
Series A-1, Series B-1 and Junior Preferred Stock issued for acquired technology and licenses			9,500
Accrued interest expense converted to Series A Preferred Stock			2
Changes in operating assets and liabilities :
Prepaid expense and other current assets	1,535	(8)	(5,282)
Security deposits			(255)
Accrued clinical drug supplies and trial costs	317	104	2,802
Accounts payable and accrued expenses	(57)	673	3,753
Net cash used in operating activities	(16,146)	(3,534)	(152,709)
Investing Activities
Purchase of marketable securities	(224,247)		(228,485)
Maturities of marketable securities			4,250
Purchase of property and equipment	(728)		(929)
Net cash used in investing activities	(224,975)		(225,164)
Financing Activities
Payment of debt issuance costs		(21)	(421)
Proceeds from issuance of common stock	11		229
Proceeds from initial public offering			175,555
Proceeds from follow-on public offering, net	55,409		55,409
Proceeds from issuance of notes payable, net		1,451	(302)
Proceeds from issuance of preferred stock, net			130,632
Proceeds from royalty purchase agreement	41,667		83,333
Net cash provided by financing activities	97,087	1,430	444,435
Net change in cash and cash equivalents	(144,034)	(2,104)	66,562
Cash and cash equivalents
Beginning of period	210,596	4,304
End of period	66,562	2,200	66,562
Supplemental disclosure of cash paid
Interest		326	1,964
Supplemental disclosures of non-cash information related to investing activities
Change in unrealized gains in marketable securities	$ 18		18
Supplemental disclosures of cash flow information
Conversion of preferred stock to common stock up completion of IPO			174,310
Accreted dividends on Series A, Series A-1, Series of B, B-1 and Series C Preferred Stock		$ 1,742	33,046
Notes payable and accrued interest converted to Series A Preferred Stock			$ 212

Business	3 Months Ended
Business	Mar. 31, 2014
Business
Business	1. Business Description of Business and Organization Ophthotech Corporation (the “Company” or “Ophthotech”) was incorporated on January 5, 2007, in Delaware. The Company is a biopharmaceutical company specializing in the development of novel therapeutics to treat diseases of the back of the eye, with a focus on developing therapeutics for age-related macular degeneration, or AMD. The Company’s operations since inception have been limited to organizing and staffing the Company, acquiring rights to product candidates, business planning, raising capital and developing its product candidates. Accordingly, the Company is considered to be in the development stage as defined by Financial Accounting Standards Board Accounting Standards Codification (“ASC”) 915, Development Stage Entities. The Company operates in one business segment. Liquidity Since the Company’s inception, it has experienced significant cash outflows in funding its operations. The Company reported a net loss of $20.7 million for the three months ended March 31, 2014 and $4.6 million for the three months ended March 31, 2013. As of March 31, 2014, the Company had a deficit accumulated during the development stage of $203.7 million. To date, the Company has not generated any revenues and has financed its operations primarily through private placements of its preferred stock, venture debt borrowings, its royalty purchase and sale agreement with Novo A/S, its initial public offering (“IPO”), which closed on September 30, 2013, and a follow-on public offering, which closed on February 18, 2014. The Company issued and sold an aggregate of 8,740,000 shares of common stock in its IPO at a public offering price of $22.00 per share, including 1,140,000 shares pursuant to the exercise by the underwriters of an over-allotment option. The Company received net proceeds from the IPO of $175.6 million, after deducting underwriting discounts and commissions and other offering expenses. On February 18, 2014, the Company closed a follow-on public offering of 2,628,571 shares of common stock at a public offering price of $31.50 per share of common stock. The Company sold 1,900,000 shares and 728,571 shares were sold by selling stockholders, 342,857 of which were sold by the selling stockholders upon the full exercise by the underwriters of their option to purchase additional shares in the follow-on public offering. Net proceeds to the Company were approximately $55.4 million, after deducting underwriting discounts and commissions and other offering expenses. The Company did not receive any proceeds from the sale of shares by the selling stockholders in the follow-on public offering. The Company has devoted substantially all of its financial resources and efforts to research and development and expects to continue to incur significant expenses and increasing operating losses over the next several years. The Company’s net losses may fluctuate significantly from quarter to quarter and year to year. To fully execute its business plan, the Company will need to complete certain research and development activities and clinical trials. Further, the Company’s product candidates will require regulatory approval prior to commercialization. These activities will span many years and require substantial expenditures to complete and may ultimately be unsuccessful. The Company expects to obtain initial, top-line data from its Phase 3 clinical program for Fovista in 2016. As of March 31, 2014, the Company had cash, cash equivalents, and marketable securities of $290.8 million. The Company believes its cash, cash equivalents and marketable securities, together with its potential future funding of $41.7 million under the Company’s royalty agreement with Novo A/S, will be sufficient to fund its operating expenses and capital expenditure requirements through at least the end of 2016. The current Phase 3 clinical program for Fovista is expected to continue through at least 2017, and substantial expenditures to complete the Phase 3 clinical program will be required after the receipt of initial, top-line data and to fund the Company’s other development programs. The Company expects to meet these capital requirements using its existing capital resources. Further, the Company expects to continue to experience significant cash outflows until such time, if ever, as it can generate substantial product revenues. These cash outflows may be in excess of the Company’s existing capital resources and the Company may need to finance its cash needs through a combination of equity and debt financings, collaborations, strategic alliances and marketing distribution or licensing arrangements. There can be no assurance that such funds will be available, or if available, on terms favorable to the Company. The Company faces the normal risks associated with a development stage company, including but not limited to the risk that the Company’s research and development activities will not be successfully completed, that adequate patent protection for the Company’s technology will not be obtained, that any products developed will not obtain necessary government regulatory approval and that any approved products will not be commercially viable. In addition, the Company operates in an environment of rapid change in technology, substantial competition from pharmaceutical and biotechnology companies and is dependent upon the services of its employees and its consultants. The Company’s capital requirements will depend on many factors, including the success of its development and commercialization of its product candidates and whether it pursues the development of additional product candidates. Even if the Company succeeds in developing and commercializing one or more of its product candidates, it may never achieve sufficient sales revenue to achieve or maintain profitability.

Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2014

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited financial information as of March 31, 2014, for the three months ended March 31, 2014 and 2013, and for the period from January 5, 2007 (Inception) to March 31, 2014 has been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. The December 31, 2013 balance sheet was derived from the Company’s audited financial statements. These interim financial statements should be read in conjunction with the notes to the financial statements contained in the Company’s Annual Report on Form 10-K (“Annual Report”) for 2013, as filed with the Securities and Exchange Commission on March 11, 2014.

In the opinion of management, the unaudited financial information as of March 31, 2014, for the three months ended March 31, 2014 and 2013, and for the period from January 5, 2007 (Inception) to March 31, 2014, reflects all adjustments, which are normal recurring adjustments, necessary to present a fair statement of financial position, results or operations and cash flows. The results of operations for the three months ended March 31, 2014 and 2013 are not necessarily indicative of the operating results for the full fiscal year or any future period.

Use of Estimates

The preparation of financial statements and related disclosures in conformity with GAAP requires management to make estimates and judgments that affect the amounts reported in the financial statements and accompanying notes. The Company bases its estimates and judgments on historical experience and on various other assumptions that it believes are reasonable under the circumstances. The amounts of assets and liabilities reported in the Company’s Balance Sheets and the amount of expenses reported for each of the periods presented are affected by estimates and assumptions, which are used for, but not limited to, accounting for share-based compensation and accounting for research and development costs. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. The carrying amounts reported in the Balance Sheets for cash and cash equivalents are valued at cost, which approximates their fair value.

Available for Sale Securities

The Company considers securities with original maturities of greater than three months to be available for sale securities. Securities under this classification are recorded at fair market value and unrealized gains and losses within accumulated other comprehensive income. The estimated fair value of the available for sale securities is determined based on quoted market prices or rates for similar instruments. In addition, the cost of debt securities in this category is adjusted for amortization of premium and accretion of discount to maturity. The Company evaluates securities with unrealized losses to determine whether such losses, if any, are other than temporary.

Concentration of Credit Risk

The Company’s financial instruments that are exposed to concentration of credit risk consist primarily of cash and cash equivalents and available for sale securities. The Company maintains its cash in bank accounts, which, at times exceed federally insured limits. The Company maintains its cash equivalents in money market funds that invest primarily in U.S. Treasury securities. The Company’s available for sale securities are also invested in U.S. Treasury securities. The Company has not recognized any losses from credit risks on such accounts during any of the periods presented. The Company believes it is not exposed to significant credit risk on its cash, cash equivalents and available for sale securities.

Foreign Currency Translation

The Company maintains a bank account in a foreign currency. The Company considers the U.S. dollar to be its functional currency. Expenses are translated at the exchange rate on the date the expense is incurred. The effect of exchange rate fluctuations on translating foreign currency assets and liabilities into U.S. dollars is included in the Statements of Operations. Foreign exchange transaction gains and losses are included in the results of operations and are not material in the Company’s financial statements.

Property and Equipment

Property and equipment, which consist mainly of computers and other equipment, are carried at cost less accumulated depreciation. Depreciation is computed over the estimated useful lives of the respective assets, generally five to ten years, using the straight-line method.

Research and Development

Research and development expenses consist of costs associated with the development and clinical testing of Fovista, an anti-Platelet Derived Growth Factor (“PDGF”) aptamer the Company is developing for use in combination with anti-VEGF drugs for treatment of wet age-related macular degeneration, or wet AMD, Zimura, an inhibitor of complement factor C5 the Company is developing with a focus on treatment of patients with geographic atrophy, a severe form of dry AMD, and the Company’s other product candidates. Research and development expenses consist of:

· external research and development expenses incurred under arrangements with third parties, such as contract research organizations, (“CROs”) and other vendors, contract manufacturing organizations and consultants; and

· employee-related expenses, including salaries, benefits, travel and share-based compensation expense.

Research and development costs also include costs of acquired product licenses and related technology rights where there is no alternative future use, prototypes used in research and development, consultant fees and amounts paid to collaborative partners.

All research and development costs are charged to operations as incurred in accordance with ASC Topic 730, Research and Development. The Company accounts for non-refundable advance payments for goods and services that will be used in future research and development activities as expenses when the service has been performed or when the goods have been received, rather than when the payment is made.

The Company anticipates that its research and development expenses will increase substantially as compared to prior periods in connection with conducting its pivotal Phase 3 clinical program for Fovista and if such trials are successful, seeking marketing approval for Fovista. The Company also anticipates that its research and development expenses will increase substantially as a result of its plan to initiate a Phase 2/3 clinical trial to evaluate the safety and efficacy of Zimura monotherapy in patients with geographic atrophy in late 2014 or early 2015.

Income Taxes

The Company utilizes the liability method of accounting for deferred income taxes, as set forth in ASC 740-10, Income Taxes-Overall. Under this method, deferred tax liabilities and assets are recognized for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of assets and liabilities. A valuation allowance is established against net deferred tax assets because, based on the weight of available evidence, it is more likely than not that some or all of the net deferred tax assets will not be realized. The Company maintains a full valuation allowance on its deferred tax assets. Accordingly, the Company has not recorded a benefit or provision for income taxes other than for the sale of a portion of its unused New Jersey State operating loss carryforwards through a program sponsored by the State of New Jersey and the New Jersey Economic Development Authority in 2011. The Company’s U.S. federal net operating losses have occurred since inception and as such, tax years subject to potential tax examination could apply from that date because carrying-back net operating loss opens the relevant year to audit.

Share-Based Compensation

The Company follows the provisions of the ASC 718, Compensation—Stock Compensation which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees and non-employee directors, including employee stock options. Share-based compensation expense is based on the grant date fair value estimated in accordance with the provisions of ASC 718 and is generally recognized as an expense over the requisite service period.

For stock options granted as consideration for services rendered by non-employees, the Company recognizes expense in accordance with the requirements of ASC 505-50, Equity Based Payments to Non-Employees. Non-employee option grants that do not vest immediately upon grant are recorded as an expense over the vesting period of the underlying stock options. At the end of each financial reporting period prior to vesting, the value of these options, as calculated using the Black-Scholes option-pricing model, will be re-measured using the fair value of the Company’s common stock and the non-cash expense recognized during the period will be adjusted accordingly. Since the fair value of options granted to non-employees is subject to change in the future, the amount of the future expense will include fair value re-measurements until the stock options are fully vested.

Prior to the Company’s initial public offering, the Company determined the estimated fair value of its common stock based on a number of objective and subjective factors, including external market conditions affecting the biotechnology industry sector and the prices at which the Company sold shares of its common and preferred stock.

Due to the lack of trading history, the Company’s computation of stock-price volatility was based on the volatility rates of comparable publicly held companies over a period equal to the expected term of the options granted by the Company. The Company’s computation of expected term was determined using the “simplified” method which is the midpoint between the vesting date and the end of the contractual term. The Company believes that it does not have sufficient reliable exercise data in order to justify the use of a method other than the “simplified” method of estimating the expected exercise term of employee stock option grants. The Company has paid no dividends to stockholders. The risk-free interest rate is based on the zero-coupon U.S. Treasury yield at the date of grant for a term equivalent to the expected term of the option.

Share-based compensation expense includes stock options granted to employees and non-employees and has been reported in the Company’s Statements of Operations as follows:

	Three months ended March 31,
	2014		2013
Research and development	$	1,662	$	68
General and administrative	1,067		40
Total	$	2,729	$	108

JOBS Act

As an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012, the Company can take advantage of an extended transition period for complying with new or revised accounting standards. This allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The Company has elected to delay the adoption of such new or revised accounting standards. As a result of this election, the Company’s financial statements may not be comparable to the financial statements of other public companies.

Recent Accounting Pronouncements

In February 2013, the FASB issued Accounting Standards Update (“ASU”) 2013-02, Comprehensive Income: Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (“ASU 2013-02”). ASU 2013-02 requires an entity to present the effect of certain significant reclassifications out of accumulated other comprehensive income on the respective line items in net income. The amendments in ASU 2013-02 do not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income. ASU 2013-02 is effective for public companies on a prospective basis for fiscal years beginning after December 15, 2012 and for new public companies and for non-public companies for reporting periods beginning after December 15, 2013. As an emerging growth company as defined by the JOBS Act, the Company delayed adoption of this pronouncement until this reporting period. The Company has not reclassified any components of comprehensive income into net income for the periods presented. ASU 2013-02 requires only additional presentation and as such, there was no impact to the Company’s results of operations or financial position upon adoption.

Net Loss Per Common Share

3 Months Ended

Mar. 31, 2014

Net Loss Per Common Share

Net Loss Per Common Share

4. Net Loss Per Common Share

Basic and diluted net loss per common share is determined by dividing net loss applicable to common stockholders by the weighted average common shares outstanding during the period. For the periods where there is a net loss attributable to common shareholders, the outstanding shares of preferred stock, stock options, and warrants have been excluded from the calculation of diluted loss per common share because their effect would be anti-dilutive. Therefore, the weighted average shares used to calculate both basic and diluted loss per share would be the same. The following table sets forth the computation of basic and diluted net loss per share for the periods indicated:

	Three months ended March 31,
	2014			2013
Basic and diluted net loss per common share calculation:
Net loss	$	(20,682	)	$	(4,618	)
Accretion of preferred stock dividends	—			(1,742		)
Net loss attributable to common shares	$	(20,682	)	$	(6,360	)
Weighted average common shares outstanding	32,282			1,470
Net loss per share of common stock - basic and diluted	$	(0.64	)	$	(4.33	)

The following potentially dilutive securities have been excluded from the computations of diluted weighted average shares outstanding for the periods presented, as they would be anti-dilutive:

	Three months ended March 31,
	2014	2013

Redeemable convertible preferred stock	—	16,811
Options outstanding	3,726	1,344
Warrants	88	101
Total	3,814	18,256

Fair Value Measurements

3 Months Ended

Mar. 31, 2014

Fair Value Measurements

Fair Value Measurements

7. Fair Value Measurements

ASC 820, Fair Value Measurements and Disclosures, defines fair value as the price that would be received to sell an asset, or paid to transfer a liability, in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. The fair value standard also establishes a three-level hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability on the measurement date. The three levels are defined as follows:

· Level 1—inputs to the valuation methodology are quoted prices (unadjusted) for an identical asset or liability in an active market. The Company’s Level 1 assets consist of investments in U.S. Treasury money market funds and U.S. Treasury securities.

· Level 2—inputs to the valuation methodology include quoted prices for a similar asset or liability in an active market or model-derived valuations in which all significant inputs are observable for substantially the full term of the asset or liability.

· Level 3—inputs to the valuation methodology are unobservable and significant to the fair value measurement of the asset or liability.

The following table presents, for each of the fair value hierarchy levels required under ASC 820, the Company’s assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2014:

	Fair Value Measurement Using
	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)

Assets
Investments in U.S. Treasury money market funds*	$	56,620	$	—	$	—
Investments in U.S. Treasury securities with maturities < 1 year	$	196,500	$	—	$	—
Investments in U.S. Treasury securities with maturities > 1 year	$	27,763	$	—	$	—

	Fair Value Measurement Using
	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)

Assets
Investments in U.S. Treasury money market funds*	$	203,828	$	—	$	—

* Investments in U.S. Treasury money market funds are reflected in cash and cash equivalents in the accompanying Balance Sheets.

Stock Option and Compensation Plans

3 Months Ended

Mar. 31, 2014

Stock Option and Compensation Plans

Stock Option and Compensation Plans

8. Stock Option and Compensation Plans

The Company adopted its 2007 Stock Incentive Plan (the “2007 Plan”) for employees, directors and consultants for the purpose of advancing the interests of the Company stockholders by enhancing its ability to attract, retain and motivate persons who are expected to make important contributions to the Company. The 2007 Plan provided for the granting of stock option awards, restricted stock awards, and other stock-based and cash-based awards. Following the effectiveness of the 2013 Stock Incentive Plan described below in connection with the closing of the Company’s initial public offering, the Company is no longer granting additional awards under the 2007 Plan.

In August 2013, the Company’s board of directors also adopted and the Company’s stockholders also approved the 2013 stock incentive plan (the “2013 Plan”), which became effective immediately prior to the closing of the Company’s initial public offering. The 2013 Plan provides for the grant of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, and other stock-based awards. Upon effectiveness of the 2013 Plan, the number of shares of the Company’s common stock that were reserved for issuance under the 2013 Plan was the sum of (1) such number of shares (up to approximately 3,359,641 shares) as is equal to the sum of 739,317 shares (the number of shares of the common stock then available for issuance under the 2007 Plan), and such number of shares of the Company’s common stock that are subject to outstanding awards under the 2007 Plan that expire, terminate or are otherwise surrendered, canceled, forfeited or repurchased by the Company at their original issuance price pursuant to a contractual repurchase right plus (2) an annual increase, to be added the first day of each fiscal year, beginning with the fiscal year ending December 31, 2014 and continuing until, and including, the fiscal year ending December 31, 2023, equal to the lowest of 2,542,372 shares of the Company’s common stock, 4% of the number of shares of the Company’s common stock outstanding on the first day of the fiscal year and an amount determined by our board of directors. The Company’s employees, officers, directors, consultants and advisors are eligible to receive awards under the 2013 Plan. However, incentive stock options may only be granted to employees of the Company.

In connection with the evergreen provisions of the 2013 Plan, the number of shares available for issuance under the 2013 Plan was increased by approximately 1,257,000 shares, effective as of January 1, 2014. As of March 31, 2014, the Company had approximately 3,726,000 stock options outstanding under the 2013 Plan and approximately 730,000 shares available for grant under the 2013 Plan.

Cash proceeds from, and the aggregate intrinsic value of, stock options exercised during the three months ended March 31, 2014 and 2013, respectively, were as follows:

	Three months ended March 31,
	2014		2013

Cash proceeds from options exercised	$	11	$	—
Aggregate intrinsic value of options exercised	$	369	$	—

A summary of the stock options outstanding and exercisable as of March 31, 2014 is as follows:

			As of March 31, 2014
			Options Outstanding			Options Exercisable
Range of Exercise Prices	Total Options Outstanding		Weighted Average Remaining Life (Years)	Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price

$0.12-$10.03	1,788		7.6	$	4.91	1,048		$	2.79
$10.04-$20.00	604		9.3	$	13.37	15		$	13.22
$20.01-$37.48	1,334		9.7	$	30.86	8		$	32.33
	3,726					1,071

Aggregate Intrinsic Value	$	74,953				$	34,806

In connection with stock option awards granted to employees, the Company recognized share-based compensation expense of approximately $2.5 million for the three months ended March 31, 2014 and approximately $0.1 million for the three months ended March 31, 2013. As of March 31, 2014, there was approximately $35.9 million of unrecognized compensation costs, net of estimated forfeitures, related to stock option awards to employees, which are expected to be recognized over a remaining weighted average period of 3.5 years.

In connection with stock options awards granted to consultants, the Company recognized approximately $0.2 million, in share-based compensation expense during the three months ended March 31, 2014. Share-based compensation expense incurred during the three months ended March 31, 2013 in connection with stock option awards to consultants was de minimis. As of March 31, 2014, there was approximately $1.9 million of unrecognized compensation costs, net of estimated forfeitures, related to stock option award granted to consultants which are expected to be recognized over a remaining weighted average period of 2.8 years.

Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2014

Summary of Significant Accounting Policies

Basis of Presentation

Basis of Presentation

Use of Estimates

Use of Estimates

Cash and Cash Equivalents

Cash and Cash Equivalents

Available for Sale Securities

Available for Sale Securities

Concentration of Credit Risk

Concentration of Credit Risk

Foreign Currency Translation

Foreign Currency Translation

Property and Equipment

Property and Equipment

Research and Development

Research and Development

· employee-related expenses, including salaries, benefits, travel and share-based compensation expense.

Income Taxes

Income Taxes

Share-Based Compensation

Share-Based Compensation

Share-based compensation expense includes stock options granted to employees and non-employees and has been reported in the Company’s Statements of Operations as follows:

	Three months ended March 31,
	2014		2013
Research and development	$	1,662	$	68
General and administrative	1,067		40
Total	$	2,729	$	108

JOBS Act

JOBS Act

Recent Accounting Pronouncements

Recent Accounting Pronouncements

Net Loss Per Common Share (Tables)

3 Months Ended

Mar. 31, 2014

Net Loss Per Common Share

Schedule of computation of basic and diluted net loss per share

	Three months ended March 31,
	2014			2013
Basic and diluted net loss per common share calculation:
Net loss	$	(20,682	)	$	(4,618	)
Accretion of preferred stock dividends	—			(1,742		)
Net loss attributable to common shares	$	(20,682	)	$	(6,360	)
Weighted average common shares outstanding	32,282			1,470
Net loss per share of common stock - basic and diluted	$	(0.64	)	$	(4.33	)

Schedule of potentially dilutive securities that have been excluded from the computations of diluted weighted average shares outstanding

	Three months ended March 31,
	2014	2013

Redeemable convertible preferred stock	—	16,811
Options outstanding	3,726	1,344
Warrants	88	101
Total	3,814	18,256

Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2014

Fair Value Measurements

Schedule of the Company's assets and liabilities that are measured at fair value on recurring basis

	Fair Value Measurement Using
	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)

Assets
Investments in U.S. Treasury money market funds*	$	56,620	$	—	$	—
Investments in U.S. Treasury securities with maturities < 1 year	$	196,500	$	—	$	—
Investments in U.S. Treasury securities with maturities > 1 year	$	27,763	$	—	$	—

	Fair Value Measurement Using
	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)

Assets
Investments in U.S. Treasury money market funds*	$	203,828	$	—	$	—

* Investments in U.S. Treasury money market funds are reflected in cash and cash equivalents in the accompanying Balance Sheets.

Stock Option and Compensation Plans (Tables)

3 Months Ended

Mar. 31, 2014

Stock Option and Compensation Plans

Schedule of cash proceeds from, and the aggregate intrinsic value of, stock options exercised

	Three months ended March 31,
	2014		2013

Cash proceeds from options exercised	$	11	$	—
Aggregate intrinsic value of options exercised	$	369	$	—

Summary of the stock options outstanding and exercisable

			As of March 31, 2014
			Options Outstanding			Options Exercisable
Range of Exercise Prices	Total Options Outstanding		Weighted Average Remaining Life (Years)	Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price

$0.12-$10.03	1,788		7.6	$	4.91	1,048		$	2.79
$10.04-$20.00	604		9.3	$	13.37	15		$	13.22
$20.01-$37.48	1,334		9.7	$	30.86	8		$	32.33
	3,726					1,071

Aggregate Intrinsic Value	$	74,953				$	34,806

Business (Details) $ / shares in Units, $ in Thousands			3 Months Ended		87 Months Ended
Business (Details) $ / shares in Units, $ in Thousands	Feb. 18, 2014 USD ($) $ / shares shares	Sep. 30, 2013 USD ($) $ / shares shares	Mar. 31, 2014 USD ($) item	Mar. 31, 2013 USD ($)	Mar. 31, 2014 USD ($)	Dec. 31, 2013 USD ($)
Business
Number of business segments \| item			1
Net loss			$ 20,682	$ 4,618	$ 172,457
Accumulated deficit during the development stage			203,732		203,732	$ 183,050
Common stock issued in IPO (in shares) \| shares	1,900,000	8,740,000
Public offering price (in dollars per share) \| $ / shares		$ 22.00
Shares issued on exercise of over-allotment option by underwriters \| shares		1,140,000
Net proceeds from IPO after deducting underwriting discounts and commissions and other offering expenses		$ 175,600			175,555
Shares of common stock offered in follow on offering \| shares	2,628,571
Offering price (in dollars per share) \| $ / shares	$ 31.50
Shares sold by selling stockholders in follow on offering \| shares	728,571
Shares sold by selling stockholders upon full exercise by underwriters of their option to purchase additional shares \| shares	342,857
Net proceeds, after deducting underwriters' discounts and commissions and other offering expense	$ 55,400		55,409		55,409
Cash, cash equivalents, and marketable securities			290,800		$ 290,800
Potential future funding under the royalty agreement with Novo A/S			$ 41,700

Capitalization (Details) $ / shares in Units, $ in Thousands				3 Months Ended	87 Months Ended
	Feb. 18, 2014 USD ($) $ / shares shares	Sep. 30, 2013 USD ($) $ / shares shares	Sep. 09, 2013	Mar. 31, 2014 USD ($)	Mar. 31, 2014 USD ($)
Capitalization
Reverse stock split conversion ratio			0.17
Capital structure
Net proceeds from issuance of shares of common stock after deducting underwriters' discount and commissions and other offering expenses (in dollars) \| $		$ 175,600			$ 175,555
Price of common stock issued in initial public offering (in dollars per share) \| $ / shares		$ 22.00
Shares of common stock offered in follow on offering	2,628,571
Offering price (in dollars per share) \| $ / shares	$ 31.50
New issuances of common stock (in shares)	1,900,000	8,740,000
Shares sold by selling stockholders in follow on offering	728,571
Shares sold by selling stockholders upon full exercise by underwriters of their option to purchase additional shares	342,857
Net proceeds, after deducting underwriters' discounts and commissions and other offering expense \| $	$ 55,400			$ 55,409	$ 55,409
Common stock
Capital structure
Net proceeds from issuance of shares of common stock after deducting underwriters' discount and commissions and other offering expenses (in dollars) \| $		$ 175,600
Price of common stock issued in initial public offering (in dollars per share) \| $ / shares		$ 22.00
Shares issued on automatic conversion of redeemable convertible preferred stock		21,038,477
Shares of common stock offered in follow on offering	2,628,571
Offering price (in dollars per share) \| $ / shares	$ 31.50
New issuances of common stock (in shares)	1,900,000	8,740,000
Shares sold by selling stockholders in follow on offering	728,571
Shares sold by selling stockholders upon full exercise by underwriters of their option to purchase additional shares	342,857
Net proceeds, after deducting underwriters' discounts and commissions and other offering expense \| $	$ 55,400

Net Loss Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		87 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014
Basic and diluted net loss per common share calculation:
Net loss	$ (20,682)	$ (4,618)	$ (172,457)
Accretion of preferred stock dividends		(1,742)	(33,046)
Net loss attributable to common stockholders	$ (20,682)	$ (6,360)	$ (205,503)
Weighted average common shares outstanding	32,282	1,470
Net loss per share of common stock - basic and diluted (in dollars per share)	$ (0.64)	$ (4.33)
Anti-dilutive securities
Total (in shares)	3,814	18,256
Redeemable convertible preferred stock
Anti-dilutive securities
Total (in shares)		16,811
Options outstanding
Anti-dilutive securities
Total (in shares)	3,726	1,344
Warrants
Anti-dilutive securities
Total (in shares)	88	101

Cash, Cash Equivalents and Available for Sale Securities (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2014	Dec. 31, 2013
Cash, Cash Equivalents and Available for Sale Securities
Cash	$ 10,000	$ 6,800
U.S. Treasury money market funds	56,600	$ 203,800
Available for sale securities, including carrying value and estimated fair values
Cost	223,898
Unrealized Gain	18
Other than temporary declines in fair values	0
Fair Value
Available for sale securities, including carrying value and estimated fair values
Value	224,263
Carrying Value
Available for sale securities, including carrying value and estimated fair values
Value	224,263
U.S. Treasury securities with maturities less than one year
Available for sale securities, including carrying value and estimated fair values
Cost	196,316
U.S. Treasury securities with maturities less than one year \| Fair Value
Available for sale securities, including carrying value and estimated fair values
Value	196,500
U.S. Treasury securities with maturities less than one year \| Carrying Value
Available for sale securities, including carrying value and estimated fair values
Value	196,500
Unrealized Gain	13
U.S. Treasury securities with maturities greater than one year
Available for sale securities, including carrying value and estimated fair values
Cost	27,582
U.S. Treasury securities with maturities greater than one year \| Fair Value
Available for sale securities, including carrying value and estimated fair values
Value	27,763
U.S. Treasury securities with maturities greater than one year \| Carrying Value
Available for sale securities, including carrying value and estimated fair values
Value	27,763
Unrealized Gain	$ 5

Stock Option and Compensation Plans (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended
	Aug. 31, 2013	Mar. 31, 2014
2007 Plan
Stock Option and Compensation Plans
Number of shares of common stock available for issuance under the Plan	739,317
2013 Plan
Stock Option and Compensation Plans
Number of shares of common stock available for issuance under the Plan		730,000
Annual increase in shares reserved for issuance under the Plan	2,542,372
Annual increase in shares reserved for issuance under the Plan (as a percent)	4.00%
Increase in number of shares authorized under the Plan		1,257,000
Awards outstanding (in shares)		3,726,000
2013 Plan \| Maximum
Stock Option and Compensation Plans
Number of shares reserved for issuance under the Plan	3,359,641
Stock option
Cash proceeds from, and the aggregate intrinsic value of, stock options exercised
Cash proceeds from options exercised		$ 11
Aggregate intrinsic value of options exercised		$ 369

Stock Option and Compensation Plans (Details 2) - Stock option $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2014 USD ($) $ / shares shares
Options Outstanding
Total Options Outstanding (in shares) \| shares	3,726
Aggregate Intrinsic Value \| $	$ 74,953
Options Exercisable
Number Exercisable (in shares) \| shares	1,071
Aggregate Intrinsic Value \| $	$ 34,806
$0.12-$10.03
Range of Exercise Prices
Exercise prices, low end of range (in dollars per share)	$ 0.12
Exercise prices, high end of range (in dollars per share)	$ 10.03
Options Outstanding
Total Options Outstanding (in shares) \| shares	1,788
Weighted Average Remaining Life	7 years 7 months 6 days
Weighted Average Exercise Price (in dollars per share)	$ 4.91
Options Exercisable
Number Exercisable (in shares) \| shares	1,048
Weighted Average Exercise Price (in dollars per share)	$ 2.79
$10.04-$20.00
Range of Exercise Prices
Exercise prices, low end of range (in dollars per share)	10.04
Exercise prices, high end of range (in dollars per share)	$ 20.00
Options Outstanding
Total Options Outstanding (in shares) \| shares	604
Weighted Average Remaining Life	9 years 3 months 18 days
Weighted Average Exercise Price (in dollars per share)	$ 13.37
Options Exercisable
Number Exercisable (in shares) \| shares	15
Weighted Average Exercise Price (in dollars per share)	$ 13.22
$20.01-$37.48
Range of Exercise Prices
Exercise prices, low end of range (in dollars per share)	20.01
Exercise prices, high end of range (in dollars per share)	$ 37.48
Options Outstanding
Total Options Outstanding (in shares) \| shares	1,334
Weighted Average Remaining Life	9 years 8 months 12 days
Weighted Average Exercise Price (in dollars per share)	$ 30.86
Options Exercisable
Number Exercisable (in shares) \| shares	8
Weighted Average Exercise Price (in dollars per share)	$ 32.33

Property and Equipment (Details) - USD ($) $ in Thousands	3 Months Ended		87 Months Ended
Property and Equipment (Details) - USD ($) $ in Thousands	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014	Dec. 31, 2013
Property, plant and equipment
Property, plant and equipment, gross	$ 930		$ 930	$ 202
Accumulated depreciation and amortization	(187)		(187)	(175)
Property and equipment, net	743		743	27
Depreciation	$ 12	$ 7	186
Minimum
Property, plant and equipment
Useful Life	5 years
Maximum
Property, plant and equipment
Useful Life	10 years
Manufacturing equipment
Property, plant and equipment
Property, plant and equipment, gross	$ 184		184
Manufacturing equipment \| Minimum
Property, plant and equipment
Useful Life	7 years
Manufacturing equipment \| Maximum
Property, plant and equipment
Useful Life	10 years
Computer and other equipment
Property, plant and equipment
Useful Life	5 years
Property, plant and equipment, gross	$ 292		292	85
Furniture and fixtures
Property, plant and equipment
Useful Life	7 years
Property, plant and equipment, gross	$ 366		366	$ 117
Leasehold improvements
Property, plant and equipment
Property, plant and equipment, gross	$ 88		$ 88
Leasehold improvements \| Minimum
Property, plant and equipment
Useful Life	3 years
Leasehold improvements \| Maximum
Property, plant and equipment
Useful Life	5 years

Royalty Agreement	3 Months Ended
Royalty Agreement	Mar. 31, 2014
Royalty Agreement
Royalty Agreement	6. Royalty Agreement In May 2013, the Company entered into a Purchase and Sale Agreement (the “Purchase and Sale Agreement”) with Novo A/S, providing for the Company to sell, and Novo A/S to purchase, the right, title, and interest in a portion of the revenues from the sale of (a) Fovista, (b) Fovista-Related Products, and (c) Other Products (as defined in the Purchase and Sale Agreement), calculated as low to mid-single digit percentages of net sales. The Purchase and Sale Agreement provides for up to three separate purchases for a purchase price of $41.7 million each, at a first, second and third closing, for an aggregate purchase price of $125.0 million. In each purchase, Novo A/S acquires rights to a low single digit percentage of net sales. If all royalty interests under the Purchase and Sale Agreement are purchased, Novo A/S will have a right to receive royalties on net sales at a mid-single digit percentage. In each of May 2013 and January 2014, the Company received cash payments of $41.7 million, $83.3 million in the aggregate, for the royalty entitlement related to each of the first and second closing on the date of the Purchase and Sale Agreement. Receipt of cash proceeds for the third purchase is contingent upon certain triggers and conditions detailed in the Purchase and Sale Agreement, none of which have occurred prior to the date of these financial statements. The royalty payment period covered by the Purchase and Sale Agreement begins on commercial launch and ends, on a product-by-product and country-by-country basis, on the latest to occur of (i) the 12th anniversary of the commercial launch, (ii) the expiration of certain patent rights and (iii) the expiration of the regulatory exclusivity for each product in each country. Under the terms of the Purchase and Sale Agreement, the Company is not required to reimburse or otherwise compensate Novo A/S through any means other than the agreed royalty entitlement. In addition, the Company does not, under the terms of the Purchase and Sale Agreement, have the right or obligation to prepay Novo A/S in connection with a change of control of the Company or otherwise. The proceeds from the first and second financing tranches under the Purchase and Sale Agreement were recorded as a liability on the Company’s Balance Sheet as of March 31, 2014, in accordance with ASC Topic 730, Research and Development. Because there is a significant related party relationship between the Company and Novo A/S, the Company is treating its obligation to make royalty payments under the Purchase and Sale Agreement as an implicit obligation to repay the funds advanced by Novo A/S. As the Company makes royalty payments in accordance with the Purchase and Sale Agreement, it will reduce the liability balance. At the time that such royalty payments become probable and estimable, and if such amounts exceed the liability balance, the Company will impute interest accordingly on a prospective basis based on such estimates, which would result in a corresponding increase in the liability balance. The Purchase and Sale Agreement requires the establishment of a Joint Oversight Committee in the event that Novo A/S does not continue to have a representative on the Company’s board of directors. The Joint Oversight Committee would have responsibilities that include “discussion and review” of all matters related to Fovista research, development, regulatory approval and commercialization, but there is no provision either implicit or explicit that gives the Joint Oversight Committee or its members decision-making authority. The proceeds received from Novo A/S under the Purchase and Sale Agreement will be reported as revenue for income tax purposes. Notwithstanding the Company’s inclusion in taxable income of the $41.7 million in proceeds under the Purchase and Sale Agreement in January 2014, based on the Company’s current projections, the Company has forecasted a tax loss for the 2014 tax year. The Company’s projections are based upon estimates, which could change in the future. To the extent these projections change and the Company generates taxable income for the 2014 tax year, the Company believes it would be able to utilize, in part or in whole, its net operating loss carryforwards to offset against such tax liability. Based upon the Company’s cumulative history of losses and expected future losses, the Company recorded a full valuation allowance against all net federal and state deferred tax assets.

Royalty Agreement (Details) $ in Thousands	1 Months Ended		3 Months Ended	9 Months Ended	87 Months Ended
Royalty Agreement (Details) $ in Thousands	Jan. 31, 2014 USD ($)	May 31, 2013 USD ($) item	Mar. 31, 2014 USD ($)	Jan. 31, 2014 USD ($)	Mar. 31, 2014 USD ($)	Dec. 31, 2013 USD ($)
Royalty agreement
Royalty rights purchase price			$ 83,333		$ 83,333	$ 41,667
Proceeds from royalty purchase agreement			$ 41,667		$ 83,333
Novo A/S \| Purchase and Sale Agreement \| Fovista, Fovista-Related Products, and Other Products
Royalty agreement
Royalty rights purchase price		$ 41,700
Aggregate royalty rights		125,000
Proceeds from royalty purchase agreement	$ 41,700	$ 41,700		$ 83,300
Novo A/S \| Purchase and Sale Agreement \| Fovista, Fovista-Related Products, and Other Products \| Maximum
Royalty agreement
Number of purchases \| item		3

Stock Option and Compensation Plans (Details 3) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Other information
Share-based compensation expense	$ 2,729	$ 108
Stock options
Other information
Share-based compensation expense	2,500	$ 100
Unrecognized share-based compensation costs, net of estimated forfeitures	$ 35,900
Expected weighted average period to recognize share-based compensation costs	3 years 6 months
Non-employee Options \| Consultants
Other information
Share-based compensation expense	$ 200
Unrecognized share-based compensation costs, net of estimated forfeitures	$ 1,900
Expected weighted average period to recognize share-based compensation costs	2 years 9 months 18 days

Statements Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended		87 Months Ended
Statements Comprehensive Loss - USD ($) $ in Thousands	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014
Statements Comprehensive Loss
Net loss	$ (20,682)	$ (4,618)	$ (172,457)
Other comprehensive income:
Unrealized gain on available for sale securities	18		18
Other comprehensive income	18		18
Comprehensive loss	$ (20,664)	$ (4,618)	$ (172,439)

Fair Value Measurements (Details) - Recurring basis - Quoted prices in active markets for identical assets (Level 1) - USD ($) $ in Thousands	Mar. 31, 2014	Dec. 31, 2013
U.S. Treasury money market funds
Fair Value Measurements
Investments in money market funds	$ 56,620	$ 203,828
U.S. Treasury securities with maturities less than one year
Fair Value Measurements
Investments in U.S. Treasury securities	196,500
U.S. Treasury securities with maturities greater than one year
Fair Value Measurements
Investments in U.S. Treasury securities	$ 27,763