Document and Entity Information - USD ($) $ in Millions	12 Months Ended
Document and Entity Information - USD ($) $ in Millions	Dec. 31, 2018	Mar. 15, 2019	Jun. 30, 2018
Document and Entity Information
Entity Registrant Name	Aclaris Therapeutics, Inc.
Entity Central Index Key	0001557746
Document Type	10-K
Document Period End Date	Dec. 31, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	FY
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Shell Company	false
Entity Ex Transition Period	true
Entity Common Stock, Shares Outstanding		41,269,643
Entity Public Float			$ 528.2

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 57,019	$ 20,202
Marketable securities	110,953	173,655
Accounts receivable, net	4,861	481
Inventory	791
Prepaid expenses and other current assets	5,875	5,883
Total current assets	179,499	200,221
Marketable securities		14,997
Property and equipment, net	4,280	2,159
Intangible assets	72,951	7,349
Goodwill	18,504	18,504
Other assets	332	279
Total assets	275,566	243,509
Current liabilities:
Accounts payable	14,755	7,822
Accrued expenses	12,587	4,940
Total current liabilities	27,342	12,762
Other liabilities	1,703	558
Long-term debt	29,914
Contingent consideration	934	4,378
Deferred tax liability	549	549
Total liabilities	60,442	18,247
Stockholders' Equity:
Preferred stock, $0.00001 par value; 10,000,000 shares authorized and no shares issued or outstanding at December 31, 2018 and December 31, 2017
Common stock, $0.00001 par value; 100,000,000 shares authorized at December 31, 2018 and December 31, 2017; 41,210,725 and 30,856,505 shares issued and outstanding at December 31, 2018 and December 31, 2017, respectively
Additional paid-in capital	507,366	384,943
Accumulated other comprehensive loss	(69)	(246)
Accumulated deficit	(292,173)	(159,435)
Total stockholders’ equity	215,124	225,262
Total liabilities and stockholders’ equity	$ 275,566	$ 243,509

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Dec. 31, 2018	Dec. 31, 2017
Consolidated Balance Sheets
Preferred stock, par value (in dollars per share)	$ 0.00001	$ 0.00001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.00001	$ 0.00001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	41,210,725	30,856,505
Common stock, shares outstanding	41,210,725	30,856,505

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Revenue, net	$ 10,091	$ 1,683
Cost of revenue	6,850	1,207
Gross profit	3,241	476
Operating expenses:
Research and development	63,009	39,790	$ 33,476
Sales and marketing	47,997	13,769	3,295
General and administrative	27,649	19,340	11,796
Total operating expenses	138,655	72,899	48,567
Loss from operations	(135,414)	(72,423)	(48,567)
Other income, net	2,676	2,070	488
Loss before income taxes	(132,738)	(70,353)	(48,079)
Provision for (benefit from) income taxes		(1,830)
Net loss	$ (132,738)	$ (68,523)	$ (48,079)
Net loss per share, basic and diluted	$ (4.03)	$ (2.44)	$ (2.25)
Weighted average common shares outstanding, basic and diluted (in shares)	32,909,762	28,102,386	21,415,733
Other comprehensive income (loss):
Unrealized gain (loss) on marketable securities, net of tax of $0	$ 145	$ (121)	$ 105
Foreign currency translation adjustments	32	144	(225)
Total other comprehensive income (loss)	177	23	(120)
Comprehensive loss	(132,561)	(68,500)	(48,199)
Product sales
Revenue, net	3,940
Contract research
Revenue, net	4,651	$ 1,683
Other revenue
Revenue, net	$ 1,500

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Common Stock Private Placement	Common Stock Follow On Public Offering	Common Stock At The Market Offering	Common Stock	Additional Paid-in Capital Private Placement	Additional Paid-in Capital Follow On Public Offering	Additional Paid-in Capital	Accumulated Other Comprehensive Loss	Accumulated Deficit	Private Placement	Follow On Public Offering	At The Market Offering	Total
Balance at beginning of period at Dec. 31, 2015							$ 135,503	$ (149)	$ (42,833)				$ 92,521
Balance at beginning of period (in shares) at Dec. 31, 2015				20,157,503
Increase (Decrease) in Stockholders' Equity
Issuance of common stock in connection with acquisition							2,355						2,355
Issuance of common stock in connection with acquisition, shares				159,420
Issuance of common stock					$ 18,547	$ 98,158				$ 18,547	$ 98,158
Number of shares issued	1,081,082	4,600,000
Exercise of stock options and vesting of RSUs							4						4
Exercise of stock options and vesting of RSUs, shares				61,176
Unrealized gain on marketable securities								105					105
Foreign currency translation adjustment								(225)					(225)
Stock-based compensation expense							6,104						6,104
Net loss									(48,079)				(48,079)
Balance at end of period at Dec. 31, 2016							260,671	(269)	(90,912)				169,490
Balance at end of period (in shares) at Dec. 31, 2016				26,059,181
Increase (Decrease) in Stockholders' Equity
Issuance of common stock in connection with acquisition							9,675						9,675
Issuance of common stock in connection with acquisition, shares				349,527
Issuance of common stock						80,918	19,311				80,918		19,311
Number of shares issued		3,747,602	635,000
Exercise of stock options and vesting of RSUs							(62)						(62)
Exercise of stock options and vesting of RSUs, shares				65,195
Unrealized gain on marketable securities								(121)					(121)
Foreign currency translation adjustment								144					144
Stock-based compensation expense							14,430						14,430
Net loss									(68,523)				(68,523)
Balance at end of period at Dec. 31, 2017							384,943	(246)	(159,435)				$ 225,262
Balance at end of period (in shares) at Dec. 31, 2017				30,856,505									30,856,505
Increase (Decrease) in Stockholders' Equity
Issuance of common stock in connection with acquisition							2,215						$ 2,215
Issuance of common stock in connection with acquisition, shares				253,181
Issuance of common stock						$ 100,205					$ 100,205
Number of shares issued		9,941,750										635,000
Exercise of stock options and vesting of RSUs							(52)						(52)
Exercise of stock options and vesting of RSUs, shares				159,289
Unrealized gain on marketable securities								145					145
Foreign currency translation adjustment								32					32
Stock-based compensation expense							20,055						20,055
Net loss									(132,738)				(132,738)
Balance at end of period at Dec. 31, 2018							$ 507,366	$ (69)	$ (292,173)				$ 215,124
Balance at end of period (in shares) at Dec. 31, 2018				41,210,725									41,210,725

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Cash flows from operating activities:
Net loss	$ (132,738)	$ (68,523)	$ (48,079)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	1,879	402	120
Stock-based compensation expense	20,055	14,430	6,104
Change in fair value of contingent consideration	1,272
Payment of Confluence development milestone	(717)
Deferred taxes		(1,837)
Write-down of equipment held for sale			216
Non-cash charges related to Vixen acquisition			2,784
Changes in operating assets and liabilities:
Accounts receivable	(4,380)
Inventory	102
Prepaid expenses and other assets	(40)	(4,306)	(8)
Accounts payable	6,964	4,564	1,810
Accrued expenses	6,792	607	2,450
Net cash used in operating activities	(100,811)	(54,663)	(34,603)
Cash flows from investing activities:
Purchases of property and equipment	(1,356)	(1,235)	(232)
Acquisition of RHOFADE	(67,122)
Acquisition of Confluence, net of cash acquired		(9,647)
Purchases of marketable securities	(161,598)	(197,337)	(148,764)
Proceeds from sales and maturities of marketable securities	239,443	152,527	87,093
Net cash provided by (used in) investing activities	9,367	(55,692)	(61,903)
Cash flows from financing activities:
Proceeds from debt financing, net of issuance costs	29,910
Capital lease payments	(648)	(78)
Proceeds from the exercise of employee stock options	577	235	121
Payment of Confluence development milestone	(1,783)
Net cash provided by financing activities	128,261	100,386	116,826
Net increase (decrease) in cash and cash equivalents	36,817	(9,969)	20,320
Cash and cash equivalents at beginning of period	20,202	30,171	9,851
Cash and cash equivalents at end of period	57,019	20,202	30,171
Supplemental disclosures of non-cash investing and financing activities:
Additions to property and equipment included in accounts payable	161	274	11
Fair value of stock issued in connection with Confluence acquisition		9,675
Fair value of stock issued in settlement of Confluence development milestone	2,215
Property and equipment obtained pursuant to capital lease financing arrangements	2,131		2,355
Offering costs included in accounts payable	210	20	250
At The Market Offering
Cash flows from financing activities:
Proceeds from issuance of common stock, net of issuance costs		19,311
Follow On Public Offering
Cash flows from financing activities:
Proceeds from issuance of common stock, net of issuance costs	$ 100,205	$ 80,918	98,158
Private Placement
Cash flows from financing activities:
Proceeds from issuance of common stock, net of issuance costs			$ 18,547

Organization and Nature of Business	12 Months Ended
Organization and Nature of Business	Dec. 31, 2018
Organization and Nature of Business
Organization and Nature of Business	1. Organization and Nature of Business Overview Aclaris Therapeutics, Inc. was incorporated under the laws of the State of Delaware in 2012. In July 2015, Aclaris Therapeutics International Limited (“ATIL”) was established under the laws of the United Kingdom as a wholly-owned subsidiary of Aclaris Therapeutics, Inc. In March 2016, Vixen Pharmaceuticals, Inc. (“Vixen”) became a wholly-owned subsidiary of Aclaris Therapeutics, Inc., and in September 2018, Vixen was dissolved. In August 2017, Confluence Life Sciences, Inc., now known as Aclaris Life Sciences, Inc. (“Confluence”) was acquired by Aclaris Therapeutics, Inc. and became a wholly-owned subsidiary thereof (see Note 3). Aclaris Therapeutics, Inc., ATIL, Vixen and Confluence are referred to collectively as the “Company”. The Company is a physician-led biopharmaceutical company focused on dermatological and immuno-inflammatory diseases. The Company has two commercial products and a diverse pipeline of drug candidates. The Company’s first commercial product, ESKATA (hydrogen peroxide) Topical Solution, 40% (w/w) (“ESKATA”), is a proprietary high‑concentration formulation of hydrogen peroxide that the Company is commercializing as an office-based prescription treatment for raised seborrheic keratosis (“SK”), a common non‑malignant skin tumor. The Company submitted a New Drug Application (“NDA”) for ESKATA to the U.S. Food and Drug Administration (“FDA”) in February 2017, and it was approved in December 2017. The Company launched ESKATA in the United States in May 2018. In November 2018, the Company acquired the worldwide rights to a second commercial product, RHOFADE (oxymetazoline hydrochloride) cream, 1% (“RHOFADE”) (see Note 3). Liquidity The Company’s consolidated financial statements have been prepared on the basis of continuity of operations, realization of assets and the satisfaction of liabilities in the ordinary course of business. At December 31, 2018, the Company had cash, cash equivalents and marketable securities of $167,972 and an accumulated deficit of $292,173. Since inception, the Company has incurred net losses and negative cash flows from its operations. Prior to the acquisition of Confluence in August 2017, the Company had never generated any revenue. There can be no assurance that profitable operations will ever be achieved, and, if achieved, will be sustained on a continuing basis. In addition, development activities, clinical and preclinical testing of the Company’s drug candidates, and commercialization of ESKATA and RHOFADE will require significant additional financing. The future viability of the Company is dependent on its ability to generate cash from operating activities or to raise additional capital to finance its operations. The Company’s failure to raise capital as and when needed could have a negative impact on its financial condition and ability to pursue its business strategies.

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2018

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“GAAP”). The consolidated financial statements of the Company include the accounts of the operating parent company, Aclaris Therapeutics, Inc., and its wholly-owned subsidiaries, Confluence, ATIL and Vixen. All significant intercompany transactions have been eliminated.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting periods. Significant estimates and assumptions reflected in these financial statements include, but are not limited to, research and development expenses, contingent consideration and the valuation of stock-based awards. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Actual results could differ from the Company’s estimates.

Revenue Recognition

The Company accounts for revenue in accordance with Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers. Under ASC Topic 606, revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services.

To determine revenue recognition in accordance with ASC Topic 606, the Company performs the following five steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) performance obligations are satisfied. At contract inception, the Company assesses the goods or services promised within a contract with a customer to identify the performance obligations, and to determine if they are distinct. The Company recognizes the revenue that is allocated to each distinct performance obligation when (or as) that performance obligation is satisfied. The Company only recognizes revenue when collection of the consideration it is entitled to under a contract with a customer is probable. The Company expenses incremental costs of contracts with direct and indirect customers, which generally include sales commissions, in the period they are incurred.

Product Sales, net

The Company sells ESKATA and RHOFADE to a limited number of wholesalers in the United States (collectively, its “Customers”). These Customers subsequently resell the Company’s products to pharmacies and health care providers. In addition to distribution agreements with Customers, the Company may enter into arrangements with health care providers, third-party payors, pharmacy benefit managers, and group purchasing organizations (“GPOs”) which provide for government mandated and/or privately negotiated rebates, chargebacks, and discounts, with respect to the purchase of the Company’s products.

The Company recognizes revenue from product sales at the point the Customer obtains control of the product, which generally occurs upon delivery, and includes estimates of variable consideration in the same period revenue is recognized. Components of variable consideration include trade discounts and allowances, product returns, government rebates, discounts and rebates, other incentives such as patient co-pay assistance, and other fee for service amounts. Variable consideration is recorded on the consolidated balance sheet as either a reduction of accounts receivable, if payable to a customer, or as a current liability, if payable to a third-party other than a customer. The Company considers all relevant information when estimating variable consideration such as current contractual and statutory requirements, specific known market events and trends, industry data and forecasted customer buying and payment patterns. The amount of net revenue the Company can recognize is constrained by estimates of variable consideration which are included in the transaction price. Payment terms with Customers do not exceed one year and, therefore, the Company does not account for a financing component in its arrangements. The Company expenses incremental costs of obtaining a contract with a Customer, including sales commissions, when incurred as the period of benefit is less than one year. Shipping and handling costs for product shipments to Customers are recorded as sales and marketing expenses in the consolidated statement of operations.

Trade Discounts and Allowances - The Company may provide Customers with trade discounts, rebates, allowances or other incentives. The Company records an estimate for these items as a reduction of revenue in the same period the revenue is recognized.

Government and Payor Rebates - The Company may contract with certain third-party payors, primarily health insurance companies, pharmacy benefit managers and government programs, for the payment of rebates with respect to utilization of its products. The Company also has agreements with GPOs that provide for administrative fees and discounted pricing in the form of volume-based rebates. The Company is also subject to discount obligations under state Medicaid programs and Medicare. The Company records an estimate for these rebates as a reduction of revenue in the same period the revenue is recognized.

Other Incentives - Other incentives includes the Company’s co-pay assistance program which is intended to provide financial assistance to qualified commercially-insured patients with prescription drug co-payments required by payors. The Company estimates and records an accrual for these incentives as a reduction of revenue in the period the revenue is recognized. The Company estimates amounts for co-pay assistance based upon the number of claims and the cost per claim that the Company expects to receive associated with product that has been sold to Customers but remains in the distribution channel at the end of each reporting period.

Product Returns - Consistent with industry practice, the Company has a product returns policy that provides Customers a right of return for product purchased within a specified period prior to and subsequent to the product’s expiration date. The right of return lapses upon shipment of the goods to a patient. The Company records an estimate for the amount of its products which may be returned as a reduction of revenue in the period the related revenue is recognized. The Company’s estimates for product returns are based upon available industry data and its own sales information, including its visibility into the inventory remaining in the distribution channel. There is no returns liability associated with sales of ESKATA as the Company has a no returns policy for this product.

Product sales, net included the following for the years ended December 31, 2018, 2017 and 2016:


	Year Ended
	December 31,
	2018		2017		2016
ESKATA	$	2,804	$	—	$	—
RHOFADE		1,136		—		—
Total product revenue, net	$	3,940	$	—	$	—

Contract Research

The Company earns contract research revenue from the provision of laboratory services to clients through Confluence, its wholly-owned subsidiary. Contract research revenue is generally evidenced by contracts with clients which are on an agreed upon fixed-price, fee-for-service basis and are generally billed on a monthly basis in arrears for services rendered. Revenue related to these contracts is generally recognized as the laboratory services are performed, based upon the rates specified in the contracts. Under ASC Topic 606, the Company elected to apply the “right to invoice” practical expedient when recognizing contract research revenue. The Company recognizes contract research revenue in the amount to which it has the right to invoice.

The Company has also received revenue from grants under the Small Business Innovation Research program of the National Institutes of Health (“NIH”). During the year ended December 31, 2018, the Company had two active grants from NIH which were related to early-stage research. As of December 31, 2018, there were no remaining funds available to the Company under the grants. The Company recognizes revenue related to grants as amounts become reimbursable under each grant, which is generally when research is performed, and the related costs are incurred.

Other Revenue

Licenses of Intellectual Property – The Company recognizes revenue received from non-refundable, upfront fees related to the licensing of intellectual property when the intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the license has been transferred to the customer, and the customer is able to use and benefit from the license.

Milestone Payments - At the inception of each arrangement that includes milestone payments, the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the amount allocated to the license of intellectual property. Milestone payments that are not within the control of the Company or the customer, such as regulatory approvals, are not considered probable of being achieved until those approvals are received.

Cash Equivalents

The Company considers all short term, highly liquid investments with original maturities of 90 days or less at acquisition date to be cash equivalents. Cash equivalents, which have consisted of money market accounts, commercial paper and corporate debt securities with original maturities of less than three months, are stated at fair value.

Marketable Securities

Marketable securities with original maturities of greater than three months and remaining maturities of less than one year from the balance sheet date are classified as short term. Marketable securities with remaining maturities of greater than one year from the balance sheet date are classified as long term.

The Company classifies all of its marketable securities as available-for-sale securities. The Company’s marketable securities are measured and reported at fair value using quoted prices in markets that are not active for identical or similar securities. Unrealized gains and losses are reported as a separate component of stockholders’ equity. The cost of securities sold is determined on a specific identification basis, and realized gains and losses, if any, are included in other income, net within the consolidated statement of operations and comprehensive loss. If any adjustment to fair value reflects a decline in the value of the investment, the Company considers available evidence to evaluate the extent to which the decline is “other than temporary” and reduces the investment to fair value through a charge to the statement of operations and comprehensive loss.

Other Assets

In February 2017, the Company paid a $2,000 PDUFA fee to the FDA in conjunction with the filing of its NDA for ESKATA. The Company requested a waiver and refund of this PDUFA fee, which was approved by the FDA in December 2017, and was refunded to the Company in January 2018.

Inventory

Inventory includes the third-party cost of manufacturing and assembly of finished product, quality control and other overhead costs. Inventory is stated at the lower of cost or net realizable value. Inventory is adjusted for short-dated, unmarketable inventory equal to the difference between the cost of inventory and the estimated value based upon assumptions about future demand and market conditions. The Company had $791 and $0 of inventory as of December 31, 2018 and 2017, respectively, which was comprised primarily of finished goods.

Deferred Offering Costs

The Company recorded legal, accounting and other third-party fees associated directly with the filing of its registration statement on Form S-3 in November 2016, in other assets on its consolidated balance sheet. These deferred offering costs are recorded in stockholders’ equity as a reduction of the proceeds generated from offerings consummated under the Form S-3 on a pro rata basis. The Company may also record legal, accounting and other third-party fees directly associated with in-process equity financings as deferred offering costs (non-current) until such financings are completed. The deferred costs related to an in-process equity financing are recorded in stockholders’ equity as a reduction of the proceeds generated from the related offering when it is completed. Deferred offering costs were $0 and $62 as of December 31, 2018 and 2017, respectively.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation. Depreciation expense is recognized using the straight-line method over the useful life of the asset. Computer equipment is depreciated over three years. Manufacturing and laboratory equipment is depreciated over five years. Furniture and fixtures are depreciated over five years. Leasehold improvements are depreciated over the shorter of the lease term or their useful life. Expenditures for repairs and maintenance of assets are charged to expense as incurred. Upon retirement or sale, the cost and related accumulated depreciation of assets disposed of are removed from the accounts and any resulting gain or loss is included in loss from operations.

Assets Held for Sale

In order for an asset to be classified as held for sale, several criteria must be achieved. These criteria include, among others, an active program to market an asset and locate a buyer, as well as the probable disposition of the asset within one year. Upon being classified as held for sale, the recoverability of the carrying value of an asset must be assessed and evaluated. After the valuation process is completed, the held for sale asset is reported at the lower of its carrying value or fair value less cost to sell, and no additional depreciation expense is recognized related to the asset. Once an asset is classified as held for sale, all of its historical balance sheet information is included in prepaid expenses and other current assets in the accompanying consolidated balance sheets. The Company recorded an impairment charge of $216 in the year ended December 31, 2016 for equipment that was previously classified as held for sale. The impairment charge was included in research and development expense on the Company’s consolidated statement of operations. The Company had no assets classified as held for sale as of December 31, 2018 and 2017.

Impairment of Long Lived Assets

Long-lived assets consist of property and equipment. Long-lived assets to be held and used are tested for recoverability whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable. Factors that the Company considers in deciding when to perform an impairment review include significant underperformance of the business in relation to expectations, significant negative industry or economic trends and significant changes or planned changes in the use of the assets. If an impairment review is performed to evaluate a long lived asset for recoverability, the Company compares forecasts of undiscounted cash flows expected to result from the use and eventual disposition of the long lived asset to its carrying value. An impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of an asset are less than its carrying amount. The impairment loss would be based on the excess of the carrying value of the impaired asset over its fair value, determined based on discounted cash flows.

Intangible Assets

Intangible assets include both finite-lived and indefinite-lived assets. Finite-lived intangible assets are amortized over their estimated useful life based on the pattern over which the intangible assets are consumed or otherwise used up. If that pattern cannot be reliably determined, the straight-line method of amortization is used. Finite-lived intangible assets consist of a research technology platform the Company acquired through the acquisition of Confluence and the intellectual property rights related to RHOFADE. Indefinite-lived intangible assets consist of an in-process research and development (“IPR&D”) drug candidate acquired through the acquisition of Confluence. IPR&D assets are considered indefinite-lived until the completion or abandonment of the associated research and development efforts. The cost of IPR&D assets is either amortized over their estimated useful life beginning when the underlying drug candidate is approved and launched commercially, or expensed immediately if development of the drug candidate is abandoned.

Finite-lived intangible assets are tested for impairment when events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. Indefinite-lived intangible assets are tested for impairment at least annually, which the Company performs during the fourth quarter, or when indicators of an impairment are present. The Company recognizes impairment losses when and to the extent that the estimated fair value of an indefinite-lived intangible asset is less than its carrying value.

Goodwill

Goodwill is not amortized, but rather is subject to testing for impairment at least annually, which the Company performs during the fourth quarter, or when indicators of an impairment are present. The Company considers each of its operating segments, dermatology therapeutics and contract research, to be a reporting unit since this is the lowest level for which discrete financial information is available. The Company has attributed the full amount of the goodwill acquired with Confluence, or $18,504, to the dermatology therapeutics segment. The annual impairment test performed by the Company is a qualitative assessment based upon current facts and circumstances related to operations of the dermatology therapeutics segment. If the qualitative assessment indicates an impairment may be present, the Company would perform the required quantitative analysis and an impairment charge would be recognized to the extent that the estimated fair value of the reporting unit is less than its carrying amount. However, any loss recognized would not exceed the total amount of goodwill allocated to that reporting unit. The Company concluded goodwill was not impaired as of December 31, 2018 and 2017.

Contingent Consideration

The Company initially recorded the contingent consideration related to future potential payments based upon the achievement of certain development, regulatory and commercial milestones, resulting from the acquisition of Confluence, at its estimated fair value on the date of acquisition. Changes in fair value reflect new information about the likelihood of the payment of the contingent consideration and the passage of time. Future changes in the fair value of the contingent consideration, if any, will be recorded as income or expense in the Company’s consolidated statement of operations.

Research and Development Costs

Research and development costs are expensed as incurred. Research and development expenses include salaries, stock-based compensation and benefits of employees, fees paid under licensing agreements, fees paid under a third party assignment agreement and other operational costs related to the Company’s research and development activities, including depreciation expenses and the cost of research and development contracts which the Company has entered into with outside vendors to conduct both preclinical studies and clinical trials. Significant judgment and estimates are made in determining the amount of research and development costs recognized in each reporting period. The Company analyzes the progress of its preclinical studies and clinical trials, completion of milestone events, invoices received and contracted costs when estimating research and development costs. Actual results could differ from the Company’s estimates. The Company’s historical estimates for research and development costs have not been materially different from the actual costs.

Stock-Based Compensation

The Company measures the compensation expense of stock-based awards granted to employees and directors using the grant date fair value of the award. The Company has issued stock options and restricted stock unit (“RSU”) awards with service-based vesting conditions, as well as with performance-based vesting conditions. The Company has not issued awards that include market-based conditions. For service-based awards the Company recognizes stock-based compensation expense on a straight-line basis over the requisite service period. For performance-based awards the Company recognizes stock-based compensation expense on a straight-line basis over the requisite service period beginning in the period that it becomes probable the performance conditions will occur. At each balance sheet date, the Company evaluates whether any performance conditions related to a performance-based award have changed. The effect of any change in performance conditions would be recognized as a cumulative catch-up adjustment in the period such change occurs, and any remaining unrecognized compensation expense would be recognized on a straight-line basis over the remaining requisite service period. The impact of forfeitures is recognized in the period in which they occur.

The Company initially measures the compensation expense of stock-based awards granted to consultants using the grant date fair value of the award. Compensation expense is recognized over the period during which services are rendered by such consultants. At the end of each financial reporting period prior to completion of services being rendered, the compensation expense related to these awards is remeasured using the then current fair value of the Company’s common stock for RSUs, or based upon updated assumptions in the Black-Scholes option pricing model for stock option awards.

The Company classifies stock-based compensation expense in its statement of operations and comprehensive loss in the same manner in which the award recipient’s payroll costs are classified or in which the award recipients’ service payments are classified.

The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model. The Company estimates its expected stock volatility based on the historical volatility of a set of peer companies, which are publicly traded, and expects to continue to do so until it has adequate historical data regarding the volatility of its own publicly-traded stock price. The expected term of the Company’s stock options has been determined using the “simplified” method for awards that qualify as “plain vanilla” options. The expected term of stock options granted to non-employees is equal to the contractual term of the option award. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. The Company uses an expected dividend yield of zero based on the fact that the Company has never paid cash dividends and does not expect to pay cash dividends in the future. Prior to the Company’s initial public offering in October 2015 (“IPO”), the Company valued its common stock using a hybrid method to estimate its enterprise value. The hybrid method used was a probability-weighted expected return method which was a scenario-based methodology that estimated the fair value of the Company’s common stock based upon an analysis of future values for the Company assuming various outcomes. The hybrid method used calculated equity values using an option pricing model in one or more of scenarios, and also considered the rights of each class of stock.

The fair value of each RSU is measured using the closing price of the Company’s common stock on the date of grant.

Patent Costs

All patent related costs incurred in connection with filing and prosecuting patent applications are expensed as incurred due to the uncertainty about the recovery of the expenditure. Amounts incurred are classified as general and administrative expenses.

Foreign Currency Translation

The reporting currency of the Company is the U.S. Dollar. The functional currency of ATIL, the Company’s wholly-owned subsidiary, is the British Pound. Assets and liabilities of ATIL are translated into U.S. Dollars based on exchange rates at the end of each reporting period. Revenues and expenses are translated at average exchange rates during the reporting period. Gains and losses arising from the translation of assets and liabilities are included as a component of accumulated other comprehensive loss within the Company’s consolidated balance sheet. Gains and losses resulting from foreign currency transactions are reflected within the Company’s consolidated statement of operations. The Company has not utilized foreign currency hedging strategies to mitigate the effect of its foreign currency exposure.

Income Taxes

The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the financial statements or in the Company’s tax returns. Deferred taxes are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. Changes in deferred tax assets and liabilities are recorded in the provision for income taxes. The Company assesses the likelihood that its deferred tax assets will be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely than not that all or a portion of the deferred tax assets will not be realized, a valuation allowance is established through a charge to income tax expense. Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected and considering prudent and feasible tax planning strategies.

The Company accounts for uncertainty in income taxes recognized in the consolidated financial statements by applying a two-step process to determine the amount of tax benefit to be recognized. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination by the taxing authorities. If the tax position is deemed more likely than not to be sustained, the tax position is then assessed to determine the amount of benefit to recognize in the consolidated financial statements. The amount of the benefit that may be recognized is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement. The provision for income taxes includes the effects of any resulting tax reserves, or unrecognized tax benefits, that are considered appropriate as well as the related net interest and penalties.

Comprehensive Loss

Comprehensive loss includes net loss as well as other changes in stockholders’ equity (deficit) that result from transactions and economic events other than those with stockholders. Comprehensive loss is comprised of net loss, foreign currency translation adjustments and unrealized gains (losses) on marketable securities.

Net Loss per Share

Basic net loss per share is computed using the weighted average number of common shares outstanding during the period. Diluted net loss per share is computed using the sum of the weighted average number of common shares outstanding during the period, plus the weighted average number of potential shares of common stock from the assumed exercise of stock options, and the assumed vesting of RSUs and restricted stock granted by the Company upon its formation, if dilutive. Since the Company was in a net loss position basic and diluted net loss per share was the same for each of the periods presented.

Fair Value Measurements

Certain assets and liabilities are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:

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

Level 2 — Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data.

Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.

The Company’s cash equivalents, marketable securities and contingent consideration are carried at fair value, determined according to the fair value hierarchy described above. The carrying value of the Company’s accounts payable and accrued expenses approximate fair value due to the short-term nature of these liabilities. The carrying value of the Company’s debt approximates fair value because interest is a floating rate based on the 30-day U.S. LIBOR rate, and is therefore reflective of market rates.

Concentration of Credit Risk and of Significant Customers and Suppliers

Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash, cash equivalents and marketable securities. The Company holds all cash, cash equivalents and marketable securities balances at one accredited financial institution, in amounts that exceed federally insured limits. The Company does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships.

The Company’s top five customers represented 83% of aggregate gross revenue from product sales and contract research revenue for the year ended December 31, 2018. The Company’s top five customers represented 70% of total contract research revenue earned from August 3, 2017, the date of acquisition of Confluence, through December 31, 2017. The Company did not have product sales during the year ended December 31, 2017.

The Company is dependent on third party manufacturers to supply products for commercial distribution, as well as for research and development activities, including preclinical and clinical testing. These activities could be adversely affected by a significant interruption in the supply of active pharmaceutical ingredients and other components.

Segment Reporting

Operating segments are components of a company for which separate financial information is available and evaluated regularly by the chief operating decision maker in assessing performance and deciding how to allocate resources. The Company reports two segments, dermatology therapeutics and contract research, which are primarily based on its operating segments and operating results used to assess performance. The dermatology therapeutics segment is focused on dermatological and immuno-inflammatory diseases. The contract research segment is focused on providing laboratory services to pharmaceutical and biotech companies looking to supplement their research and development efforts with difficult-to-execute specialty skills and programs. The Company does not allocate assets by segment.

Recently Issued and Adopted Accounting Pronouncements

In November 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction Between Topic 808 and Topic 606, which, among other things, provides guidance on how to assess whether certain collaborative arrangement transactions should be accounted for under Topic 606. The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. The Company is evaluating the impact of ASU 2018-18 on its consolidated financial statements.

In August 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40). ASU 2018-15 requires a customer in a cloud computing arrangement that is a service contract to follow the internal-use software guidance in ASC 350-40 to determine which implementation costs to capitalize as assets or expense as incurred. The standard will be effective for fiscal years beginning after December 15, 2019, including interim periods within such fiscal years, with early adoption permitted. The Company is evaluating the impact of ASU 2018-15 on its consolidated financial statements.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820). The FASB developed the amendments to ASC 820 as part of its broader disclosure framework project, which aims to improve the effectiveness of disclosures in the notes to financial statements by focusing on requirements that clearly communicate the most important information to users of the financial statements. This update eliminates certain disclosure requirements for fair value measurements for all entities, requires public entities to disclose certain new information and modifies some of the existing disclosure requirements. The standard will be effective for fiscal years beginning after December 15, 2019, including interim periods within such fiscal years, with early adoption permitted. The Company is evaluating the impact of ASU 2018-13 on its consolidated financial statements.

In June 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation (Topic 718). The amendments in this ASU expand the scope of Topic 718 to include stock-based compensation arrangements with nonemployees except for specific guidance on option pricing model inputs and cost attribution. ASU 2018-07 is effective for annual reporting periods beginning after December 31, 2018, including interim periods within that year, and early adoption is permitted. The Company adopted the provisions of this standard on January 1, 2019, the impact of which on its consolidated financial statements was not significant.

In January 2017, the FASB issued ASU 2017-01, Business Combinations—Clarifying the Definition of a Business (Topic 805). The amendments in this ASU provide a screen to determine when a set of acquired assets and/or activities is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired, or disposed of, is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. The amendments in this ASU will reduce the number of transactions that meet the definition of a business. ASU 2017-01 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within those years, and early adoption is permitted. The Company adopted the provisions of this standard on January 1, 2018, the impact of which on its consolidated financial statements was not significant.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326). This ASU introduces a new model for recognizing credit losses on financial instruments based upon estimated expected credit losses. ASU 2016-13 will apply to loans, accounts receivable, financial assets measured at amortized cost and at fair value through other comprehensive income, loan commitments and certain off-balance sheet credit exposures. ASU 2016-13 is effective for annual reporting periods beginning after December 15, 2019, including interim periods within those years, and early adoption is permitted. The Company is assessing the potential impact of ASU 2016-13 on its consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). In July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases, and 2018-11, Targeted Improvements, which included a number of technical corrections and improvements, including additional options for transition. The new standard establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. ASU 2016-02 is effective for annual periods beginning after December 15, 2018, including interim periods within those annual periods, with early adoption permitted. The amendments in ASU 2016-02 must be applied to all leases existing at the date a company initially applies the standard. A company may choose to use either the effective date of ASU 2016-02, or the beginning of the earliest comparative period presented in the financial statements, as its date of initial application. The Company adopted the new standard on January 1, 2019 and used the effective date as its date of initial application. The Company’s financial statements will not be updated, and the disclosures under the new standard will not be provided, for periods before January 1, 2019.

ASU 2016-02 provides optional practical expedients companies can elect to use in transition. The Company expects to elect practical expedients which allow it not to reassess prior conclusions about lease identification, lease classification and initial direct costs made under previous accounting standards. The Company continues to evaluate the effect of adoption of ASU 2016-02, and estimates both assets and liabilities will increase by $2,000 to $2,500 upon adoption, before considering deferred taxes. The Company does not expect the adoption of ASU 2016-02 will have a material impact on its consolidated statement of operations or cash flows.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). Under this ASU, entities should recognize revenue in an amount that reflects the consideration to which they expect to be entitled to in exchange for goods and services provided. ASU 2014-09 was effective for annual reporting periods beginning after December 15, 2017. The Company did not recognize any transition adjustments as a result of adopting ASU 2014-09 and, accordingly, comparative information has not been restated for the periods reported.

Acquisitions

12 Months Ended

Dec. 31, 2018

Acquisitions

Acquisitions

3. Acquisitions

RHOFADE

In November 2018, the Company completed the acquisition of RHOFADE from Allergan Sales, LLC (“Allergan”) pursuant to the Asset Purchase Agreement dated as of October 15, 2018 (the “APA”). Pursuant to the APA, the Company acquired the worldwide rights to RHOFADE, which includes an exclusive license to certain intellectual property for RHOFADE, as well as additional intellectual property.

The following table summarizes the aggregate amount paid for the assets acquired by the Company in connection with the acquisition of RHOFADE:


Cash paid to Allergan at closing	$	59,574
Cash deposited in escrow at closing		6,500
Transaction costs		1,048
Total purchase price of assets acquired	$	67,122

The Company has also agreed to pay Allergan a one-time payment of $5,000 upon the achievement of a specified development milestone related to the potential development of an additional dermatology product. In addition, the Company has agreed to pay Allergan specified royalties, ranging from a mid-single digit percentage to a mid-teen percentage of net sales, subject to specified reductions, limitations and other adjustments, on a country-by-country basis until the date that the patent rights related RHOFADE have expired or, if later, November 30, 2028. In addition, the Company has agreed to assume the obligation to pay specified royalties and milestone payments under agreements with Aspect Pharmaceuticals, LLC and Vicept Therapeutics, Inc. Members of the Company’s management team, including Neal Walker, Frank Ruffo, Christopher Powala and Stuart Shanler, as well as Stephen Tullman, the chairman of the Company’s board of directors, are former stockholders of Vicept Therapeutics, Inc., and Dr. Shanler is also a current member of Aspect Pharmaceuticals, LLC. In their capacities as current or former holders of equity interests in these entities, these individuals may be entitled to receive a portion of the potential future payments payable by the Company. The Company incurred an aggregate expense of $165 and $0 related to royalty payments under these agreements during the years ended December 31, 2018 and 2017, respectively.

The acquisition of RHOFADE has been accounted for as an asset acquisition in accordance with FASB ASC 805-50, rather than as a business combination. As an asset acquisition, the cost to acquire the group of assets is allocated to the individual assets acquired or liabilities assumed based on their relative fair values. The relative fair values of identifiable tangible and intangible assets assumed from the acquisition of RHOFADE are based on estimates of fair value using assumptions that the Company believes is reasonable. The Company accounted for the acquisition of RHOFADE as an asset acquisition because substantially all of the fair value of the assets acquired is concentrated in a single asset, the RHOFADE product rights. ASC 805-10-55-5A, which sets forth a screen test, provides that if substantially all of the fair value of the assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets, the assets acquired are not considered to be a business.

The following table summarizes the fair value of assets acquired in the acquisition of RHOFADE:


Inventory	$	893
Intangible assets, net		66,229
Total assets acquired	$	67,122

The fair value of finished goods inventory acquired was estimated using net selling price less the costs of disposal and a reasonable profit for the disposal efforts. Raw material was valued at current replacement cost, which approximated the seller’s carrying value. The intangible asset for the RHOFADE product rights will be amortized on a straight-line basis over a period of 10 years. The Company believes this pattern of amortization reflects the expected benefits to be realized from commercializing RHOFADE. In addition, the 10-year useful life is based upon expiration dates of key patents underlying the RHOFADE intellectual property.

Confluence

In August 2017, the Company acquired Confluence, at which time, Confluence became a wholly-owned subsidiary of the Company. The Company gave aggregate consideration with a fair value of $24,322 to the equity holders of Confluence. The following table summarizes the fair value of total consideration given to the Confluence equity holders in connection with the acquisition:


Cash consideration paid	$	10,269
Aclaris common stock issued		9,675
Contingent consideration		4,378
Total fair value of consideration to Confluence equity holders	$	24,322

The Company accounted for the acquisition of Confluence as a business combination using the acquisition method of accounting. Under the acquisition method of accounting, the assets acquired and liabilities assumed in this transaction were recorded at their respective fair values. The following table summarizes the fair value of assets acquired and liabilities assumed in the acquisition of Confluence:


Cash and cash equivalents	$	622
Accounts receivable, net		574
Other current assets		89
Property and equipment		268
Other intangible assets		751
IPR&D		6,629
Goodwill		18,504
Total assets acquired		27,437

Accounts payable and accrued expenses		656
Deferred tax liability		2,386
Other liabilities		73
Total liabilities assumed		3,115

Total net assets acquired	$	24,322

The fair value of the IPR&D and the other intangible assets acquired was determined using a replacement cost method, which estimated the cost that would be required to rebuild the intangible assets identified in the acquisition of Confluence. The acquisition of Confluence resulted in the recognition of goodwill in the amount of $18,504 which represents the value of new products and technologies to be developed in the future as well as the value of the employee workforce acquired.

In November 2018, the Company achieved a development milestone specified in the merger agreement with Confluence equity holders. The milestone payment to the Confluence equity holders was comprised of $2,500 in cash and 253,208 shares of the Company’s common stock with a fair value of $2,216. The Company also agreed to pay the Confluence equity holders aggregate additional milestone payments of up to $75,000, based upon the achievement of specified regulatory and commercial milestones. In addition, the Company has agreed to pay the Confluence equity holders royalty payments calculated as a low single-digit percentage of annual net sales, subject to specified reductions, limitations and other adjustments, until the date that all of the patent rights for that product have expired, as determined on a country-by-country and product-by-product basis or, in specified circumstances, ten years from the first commercial sale of such product. In addition, if the Company sells, licenses or transfers any of the intellectual property acquired from Confluence, the Company will be obligated to pay the Confluence equity holders a portion of any incremental consideration (in excess of the development and milestone payments described above) that the Company receives from such sales, licenses or transfers in specified circumstances.

The following supplemental unaudited pro forma information presents the Company’s financial results, for the periods presented, as if the acquisition of Confluence had occurred on January 1, 2016. This supplemental unaudited pro forma financial information has been prepared for comparative purposes only, and is not necessarily indicative of what actual results would have been had the acquisition of Confluence occurred on January 1, 2016, nor is this information indicative of future results.


	Year Ended
	December 31,
	2018		2017		2016
Revenue	$	10,091	$	4,365	$	3,693
Gross profit		3,241		1,347		1,652
Total operating expenses		138,655		73,810		51,277
Net loss		(132,738)		(70,391)		(49,148)

The supplemental unaudited pro forma financial results for the year ended December 31, 2017 includes adjustments to exclude $1,351 of acquisition-related expenses, and $888 to exclude revenue billed to the Company by Confluence. The supplemental unaudited pro forma financial results for the year ended December 31, 2017 also includes an adjustment for amortization expense related to the other intangible asset acquired.

There were no acquisition-related expenses incurred, or revenue billed to the Company by Confluence for the year ended December 31, 2016, and accordingly, no adjustment is necessary for these items in the supplemental pro forma financial results for that year. The supplemental unaudited pro forma financial results for the year ended December 31, 2016 includes an adjustment for amortization expense related to the other intangible assets acquired.

Fair Value of Financial Assets and Liabilities

12 Months Ended

Dec. 31, 2018

Fair Value of Financial Assets and Liabilities

Fair Value of Financial Assets and Liabilities

4. Fair Value of Financial Assets and Liabilities

The following tables present information about the fair value measurements of the Company’s financial assets and liabilities which are measured at fair value on a recurring basis, and indicate the level of the fair value hierarchy utilized to determine such fair values:


	December 31, 2018
	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents	$	49,766	$	4,992	$	—	$	54,758
Marketable securities		—		110,953		—		110,953
Total Assets	$	49,766	$	115,945	$	—	$	165,711


Liabilities:
Acquisition-related contingent consideration	$	—	$	—	$	934	$	934
Total liabilities	$	—	$	—	$	934	$	934


	December 31, 2017
	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents	$	19,339	$	—	$	—	$	19,339
Marketable securities		—		188,652		—		188,652
Total Assets	$	19,339	$	188,652	$	—	$	207,991


Liabilities:
Acquisition-related contingent consideration	$	—	$	—	$	4,378	$	4,378
Total liabilities	$	—	$	—	$	4,378	$	4,378

As of December 31, 2018 and 2017, the Company’s cash equivalents consisted of investments with maturities of less than three months and included a money market fund and commercial paper which were valued based upon Level 1 inputs, and commercial paper, government obligations and corporate debt securities which were valued based upon Level 2 inputs. In determining the fair value of its Level 2 investments the Company relied on quoted prices for identical securities in markets that are not active. These quoted prices were obtained by the Company with the assistance of a third‑party pricing service based on available trade, bid and other observable market data for identical securities. Quarterly, the Company compares the quoted prices obtained from the third‑party pricing service to other available independent pricing information to validate the reasonableness of the quoted prices provided. The Company evaluates whether adjustments to third-party pricing is necessary and, historically, the Company has not made adjustments to quoted prices obtained from the third-party pricing service. During the years ended December 31, 2018 and 2017, there were no transfers between Level 1, Level 2 and Level 3. The reduction in acquisition-related contingent consideration of $3,444 during the year ended December 31, 2018 was primarily due to the achievement of a specified development milestone in November 2018 which resulted in the Company paying cash of $2,500 and issuing common stock with a fair value of $2,216 to the former Confluence equity holders. This reduction was partially offset by an adjustment of $1,272 to increase the value of the liability related to the achievement of the specified development milestone.

As of December 31, 2018 and 2017, the fair value of the Company’s available-for-sale marketable securities by type of security was as follows:


	December 31, 2018
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gain		Loss		Value
Marketable securities:
Corporate debt securities	$	5,030	$	—	$	(14)	$	5,016
Commercial paper		67,159		—		—		67,159
Asset-backed securities		21,745		—		(8)		21,737
U.S. government agency debt securities		17,044		—		(3)		17,041
Total marketable securities	$	110,978	$	—	$	(25)	$	110,953


	December 31, 2017
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gain		Loss		Value
Marketable securities:
Corporate debt securities	$	37,401	$	—	$	(68)	$	37,333
Commercial paper		85,202		—		—		85,202
Asset-backed securities		16,708		—		(13)		16,695
U.S. government agency debt securities		49,511		—		(89)		49,422
Total marketable securities	$	188,822	$	—	$	(170)	$	188,652

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Property and Equipment, Net

12 Months Ended

Dec. 31, 2018

Property and Equipment, Net

Property and Equipment, Net

5. Property and Equipment, Net

Property and equipment, net consisted of the following:


	December 31,
	2018		2017
Computer equipment	$	1,292	$	650
Fleet vehicles		2,131		—
Manufacturing equipment		604		511
Lab equipment		1,068		721
Furniture and fixtures		524		327
Leasehold improvements		332		430
Property and equipment, gross		5,951		2,639
Accumulated depreciation		(1,671)		(480)
Property and equipment, net	$	4,280	$	2,159

Depreciation expense was $1,248, $370 and $120 for the years ended December 31, 2018, 2017 and 2016, respectively.

Intangible Assets

12 Months Ended

Dec. 31, 2018

Intangible Assets

Intangible Assets

6. Intangible Assets

Intangible assets consisted of the following:


		Gross Cost				Accumulated Amortization
	Remaining	December 31,				December 31,
	Life	2018		2017		2018		2017
RHOFADE product rights	9.9	$	66,229	$	—	$	552	$	—
Other intangible assets	8.6		751		751		106		31
Total definite-lived intangible assets			66,980		751		658		31
IPR&D	na		6,629		6,629		—		—
Total intangible assets, net		$	73,609	$	7,380	$	658	$	31

Amortization expense was $627, $31 and $0 for the years ended December 31, 2018, 2017 and 2016, respectively

As of December 31, 2018, estimated future amortization expenses is as follows:


Year Ending December 31,
2019	$	6,698
2020		6,698
2021		6,698
2022		6,698
2023		6,698
Thereafter		32,832
Total	$	66,322

Accrued Expenses

12 Months Ended

Dec. 31, 2018

Accrued Expenses

Accrued Expenses

7. Accrued Expenses

Accrued expenses consisted of the following:


	December 31,
	2018		2017
Employee compensation expenses	$	5,293	$	3,010
Sales incentives and rebates		2,650		—
Marketing expenses		453		39
Research and development expenses		1,437		627
Capital leases, current portion		601		142
Professional fees		1,123		108
Payable to NST		—		590
Other		1,030		424
Total accrued expenses	$	12,587	$	4,940

Debt	12 Months Ended
Debt	Dec. 31, 2018
Debt
Debt	8. Debt Loan and Security Agreement – Oxford Finance LLC In October 2018, the Company entered into a Loan and Security Agreement (“Loan Agreement”) with Oxford Finance LLC, a Delaware limited liability company (“Oxford”). The Loan Agreement provides for up to $65,000 in term loans (the “Term Loan Facility”). Of the $65,000, the Company borrowed $30,000 in October 2018. The remaining $35,000 is available to be borrowed until the earlier of March 31, 2019 or an event of default. Should the Company not draw all of the Term Loan Facility, or repay the entirety of the amount drawn during the applicable draw timeframe, the Company will be required to pay a non-utilization fee equal to 1.0% of the undrawn portion of the Term Loan Facility. The Loan Agreement provides for interest only payments through November 2021, followed by 24 consecutive equal monthly payments of principal and interest in arrears starting on November 2021 and continuing through the maturity date of October 2023. All unpaid principal and accrued and unpaid interest will be due and payable on the maturity date. The Loan Agreement provides for an annual interest rate equal to the greater of (i) 8.35% and (ii) the 30-day U.S. LIBOR rate plus 6.25%. The Loan Agreement also provides for a final payment fee equal to 5.75% of the original principal amount of the term loans drawn under the Term Loan Facility, which final payment is due on October 1, 2023 or upon the prepayment of the facility or the acceleration of amounts due under the facility as a result of an event of default. The Company has the option to prepay the outstanding balance of the term loans in full, subject to a prepayment fee of (i) 3% of the original principal amount of the aggregate term loans drawn for any prepayment prior to the first anniversary of the date such term loan was funded, (ii) 2% of the original principal amount of the aggregate term loans drawn for any prepayment between the first and second anniversaries of the date such term loan was funded or (iii) 1% of the original principal amount of the aggregate term loans drawn for any prepayment after the second anniversary of the funding date but before October 1, 2023. The Company also has the option to prepay the term loans in part, once in a three-month period, of an amount of $2,000 or greater, subject to the same prepayment fees and other specified limitations. The Term Loan Facility is secured by substantially all of the Company’s assets, except that the collateral does not include the Company’s intellectual property, and the Company has agreed not to encumber any of its intellectual property. The Loan Agreement contains customary representations, warranties and covenants by the Company. The Loan Agreement also contains specified financial covenants related to minimum consolidated future revenues of the Company.

Stockholders' Equity	12 Months Ended
Stockholders' Equity	Dec. 31, 2018
Stockholders' Equity
Stockholders' Equity	9. Stockholders’ Equity Preferred Stock As of December 31, 2018 and 2017, the Company’s amended and restated certificate of incorporation authorized the Company to issue 10,000,000 shares of undesignated preferred stock. There were no shares of preferred stock outstanding as of December 31, 2018 and 2017. Common Stock As of December 31, 2018 and 2017, the Company’s amended and restated certificate of incorporation authorized the Company to issue 100,000,000 shares of $0.00001 par value common stock. Each share of common stock entitles the holder to one vote on all matters submitted to a vote of the Company’s stockholders. Common stockholders are entitled to receive dividends, as may be declared by the board of directors, if any, subject to any preferential dividend rights of any series of preferred stock that may be outstanding. No dividends have been declared through December 31, 2018. Private Placement In June 2016, pursuant to a securities purchase agreement with certain accredited investors dated May 27, 2016, the Company closed a private placement in which it sold an aggregate of 1,081,082 shares of common stock at a price of $18.50 per share, for gross proceeds of $20,000. The Company incurred placement agent fees of $1,300 and expenses of $153 in connection with the private placement. The net offering proceeds received by the Company, after deducting placement agent fees and transaction expenses, were $18,547. November 2016 Public Offering In November 2016, the Company’s registration statement on Form S-3 was declared effective by the Securities and Exchange Commission. On November 23, 2016, the Company closed a follow-on public offering in which 4,000,000 shares of common stock were sold to the public at a price of $22.75 per share, for gross proceeds of $91,000. On November 17, 2016, the underwriters exercised in full their option to purchase 600,000 additional shares of common stock at a price to the public of $22.75 per share, for gross proceeds of $13,650. The Company paid underwriting discounts and commissions of $6,279 to the underwriters in connection with the offering, including the underwriters’ exercise of their option to purchase additional shares. In addition, the Company incurred expenses of $188 in connection with the offering. The net offering proceeds received by the Company, after deducting underwriting discounts, commissions and offering expenses, were $98,158. At-The-Market Equity Offering In November 2016, the Company entered into an at-the-market sales agreement with Cowen and Company, LLC (“Cowen”) to sell the Company’s securities under the Company’s registration statement on Form S-3. In October 2018, the Company terminated the at-the-market sales agreement with Cowen. During the year ended December 31, 2018, the Company did not issue any shares of common stock under the at-the-market sales agreement. As of December 31, 2018, the Company had issued and sold an aggregate of 635,000 shares of common stock under the at-the-market sales agreement at a weighted average price per share of $31.50, for aggregate gross proceeds of $20,003. The Company incurred expenses of $691 in connection with the shares issued under the at-the-market sales agreement. August 2017 Public Offering In August 2017, the Company entered into an underwriting agreement pursuant to which the Company issued and sold 3,747,602 shares of common stock under the Company’s registration statement on Form S-3, including the underwriters’ partial exercise of their option to purchase additional shares. The shares of common stock were sold to the public at a price of $23.02 per share, for gross proceeds of $86,270. The Company paid underwriting discounts and commissions of $5,176 to the underwriters in connection with the offering. In addition, the Company incurred expenses of $176 in connection with the offering. The net offering proceeds received by the Company, after deducting underwriting discounts and commissions and offering expenses, were $80,918. October 2018 Public Offering In October 2018, the Company entered into an underwriting agreement pursuant to which the Company issued and sold 9,941,750 shares of common stock under registration statements on Form S-3, including the underwriters’ full exercise of their option to purchase additional shares. The shares of common stock were sold to the public at a price of $10.75 per share, for gross proceeds of $106,874. The Company paid underwriting discounts and commissions of $6,412 to the underwriters in connection with the offering. In addition, the Company incurred expenses of $257 in connection with the offering. The net offering proceeds received by the Company, after deducting underwriting discounts and commissions and offering expenses, were $100,205.

Stock-Based Awards

12 Months Ended

Dec. 31, 2018

Stock-Based Awards

Stock-Based Awards

10. Stock‑Based Awards

2017 Inducement Plan

In July 2017, the Company’s board of directors adopted the 2017 Inducement Plan (the “2017 Inducement Plan”). The 2017 Inducement Plan is a non-shareholder approved stock plan adopted pursuant to the “inducement exception” provided under Nasdaq listing rules. The only employees eligible to receive grants of awards under the 2017 Inducement Plan are individuals who satisfy the standards for inducement grants under Nasdaq rules, generally including individuals who were not previously an employee or director of the Company. Under the terms of the 2017 Inducement Plan the Company may grant up to 1,000,000 shares of common stock pursuant to nonqualified stock options, stock appreciation rights, restricted stock awards, RSUs, and other stock awards. All shares of common stock that were eligible for issuance under the 2017 Inducement Plan after October 1, 2018, including any shares underlying any awards that expire or are otherwise terminated, reacquired to satisfy tax withholding obligations, settled in cash or repurchased by the Company in the future that would have been eligible for re-issuance under the 2017 Inducement Plan, were retired.

2015 Equity Incentive Plan

In September 2015, the Company’s board of directors adopted the 2015 Equity Incentive Plan (the “2015 Plan”), and the Company’s stockholders approved the 2015 Plan. The 2015 Plan became effective in connection with the Company’s IPO. Beginning at the time the 2015 Plan became effective, no further grants may be made under the Company’s 2012 Equity Compensation Plan, as amended and restated (the “2012 Plan”). The 2015 Plan provides for the grant of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock awards, RSU awards, performance stock awards, cash-based awards and other stock-based awards. The number of shares initially reserved for issuance under the 2015 Plan was 1,643,872 shares of common stock. The number of shares of common stock that may be issued under the 2015 Plan will automatically increase on January 1 of each year ending on January 1, 2025, in an amount equal to the lesser of (i) 4.0% of the shares of the Company’s common stock outstanding on December 31 of the preceding calendar year or (ii) an amount determined by the Company’s board of directors. The shares of common stock underlying any awards that expire, are otherwise terminated, settled in cash or repurchased by the Company under the 2015 Plan and the 2012 Plan will be added back to the shares of common stock available for issuance under the 2015 Plan. As of December 31, 2018, 1,616,362 shares remained available for grant under the 2015 Plan. As of January 1, 2019, the number of shares of common stock that may be issued under the 2015 Plan was automatically increased by 1,648,429 shares.

2012 Equity Compensation Plan

Upon the 2015 Plan becoming effective, no further grants can be made under the 2012 Plan. The Company granted a total of 1,140,524 stock options under the 2012 Plan, of which 948,761 and 984,720 were outstanding as of December 31, 2018 and 2017, respectively. Stock options granted under the 2012 Plan vest over four years and expire after ten years. As required, the exercise price for the stock options granted under the 2012 Plan was not less than the fair value of common shares as determined by the Company as of the date of grant.

Stock Option Valuation

The weighted average assumptions the Company used to estimate the fair value of stock options granted during the years ended December 31, 2018, 2017 and 2016 were as follows:


	Year Ended
	December 31,
	2018		2017		2016
Risk-free interest rate	2.66	%	1.93	%	2.06	%
Expected term (in years)	6.3		6.2		6.5
Expected volatility	96.78	%	94.19	%	94.86	%
Expected dividend yield	0	%	0	%	0	%

The Company recognizes compensation expense for awards over their vesting period. Compensation expense for awards includes the impact of forfeiture in the period when they occur.

Stock Options

The following table summarizes stock option activity for the years ended December 31, 2018, 2017 and 2016:


					Weighted
			Weighted		Average
			Average		Remaining	Aggregate
	Number		Exercise		Contractual	Intrinsic
	of Shares		Price		Term	Value
					(in years)
Outstanding as of December 31, 2015	1,738,524		$	13.23	9.51	$	24,722
Granted	1,083,919			27.12
Exercised	(51,980)			—
Forfeited and cancelled	(68,113)			—
Outstanding as of December 31, 2016	2,702,350		$	18.94	9.05		24,434
Granted	790,100			26.21
Exercised	(36,738)			6.40
Forfeited and cancelled	(126,955)			22.05
Outstanding as of December 31, 2017	3,328,757		$	20.69	8.28	$	19,812
Granted	1,459,800			20.97
Exercised	(59,450)			9.70
Forfeited and cancelled	(447,026)			24.62
Outstanding as of December 31, 2018	4,282,081		$	20.53	7.91	$	2,404
Options vested and expected to vest as of December 31, 2018	4,282,081		$	20.53	7.91	$	2,404
Options exercisable as of December 31, 2018	1,908,561	(1)	$	17.53	7.02	$	2,404

(1)

All options granted under the 2012 Plan are exercisable immediately, subject to a repurchase right in the Company’s favor that lapses as the option vests. This amount reflects the number of shares under options that were vested, as opposed to exercisable, as of December 31, 2018.

The weighted average grant date fair value of stock options granted during the years ended December 31, 2018, 2017 and 2016 was $16.55, $20.28 and $21.16 per share, respectively.

The intrinsic value of a stock option is calculated as the difference between the exercise price of the stock option and the fair value of the underlying common stock, and cannot be less than zero.

Restricted Stock Units

The following table summarizes RSU activity for the years ended December 31, 2018, 2017 and 2016.


		Weighted
		Average
		Grant Date
	Number	Fair Value
	of Shares	Per Share

Outstanding as of December 31, 2015	53,800	$	28.68
Granted	180,764		27.16
Vested	(12,950)		28.68
Forfeited and cancelled	(2,000)		28.68
Outstanding as of December 31, 2016	219,614	$	27.43
Granted	117,883		26.27
Vested	(40,705)		26.89
Forfeited and cancelled	(13,239)		27.53
Outstanding as of December 31, 2017	283,553	$	27.02
Granted	552,060		19.03
Vested	(140,497)		27.22
Forfeited and cancelled	(68,709)		23.65
Outstanding as of December 31, 2018	626,407	$	20.30

Stock‑Based Compensation

The following table summarizes stock-based compensation expense recorded by the Company for the years ended December 31, 2018, 2017 and 2016:


	Year Ended
	December 31,
	2018		2017		2016
Cost of revenue	$	766	$	211	$	—
Research and development		6,480		5,471		2,291
Sales and marketing		3,492		1,851		—
General and administrative		9,317		6,897		3,813
Total stock-based compensation expense	$	20,055	$	14,430	$	6,104

As of December 31, 2018, the Company had unrecognized stock‑based compensation expense for stock options and RSUs of $35,909 and $9,409, respectively, which is expected to be recognized over weighted average periods of 2.54 years and 2.90 years, respectively.

Net Loss per Share

12 Months Ended

Dec. 31, 2018

Net Loss per Share

Net Loss per Share

11. Net Loss per Share

Basic and diluted net loss per share is summarized in the following table:


	Year Ended
	December 31,
	2018		2017		2016
Numerator:
Net loss	$	(132,738)	$	(68,523)	$	(48,079)
Denominator:
Weighted average shares of common stock outstanding		32,909,762		28,102,386		21,415,733
Net loss per share, basic and diluted	$	(4.03)	$	(2.44)	$	(2.25)

The Company’s potentially dilutive securities, which included stock options and RSUs, have been excluded from the computation of diluted net loss per share since the effect would be to reduce the net loss per share. Therefore, the weighted average number of common shares outstanding used to calculate both basic and diluted net loss per share attributable to common stockholders is the same. The following table presents potential shares of common stock excluded from the calculation of diluted net loss per share attributable to common stockholders for the years ended December 31, 2018, 2017 and 2016. All share amounts presented in the table below represent the total number outstanding as of December 31.


	December 31,
	2018	2017	2016
Options to purchase common stock	4,282,081	3,328,757	1,738,524
Restricted stock unit awards	626,407	283,553	53,800
Total potential shares of common stock	4,908,488	3,612,310	1,792,324

Commitments and Contingencies

12 Months Ended

Dec. 31, 2018

Commitments and Contingencies

Commitments and Contingencies

12. Commitments and Contingencies

Agreements for Office Space

In November 2017, the Company entered into a sublease agreement with Auxilium Pharmaceuticals, LLC (the “Sublandlord”) pursuant to which it subleases 33,019 square feet of office space for its headquarters in Wayne, Pennsylvania. Subject to the consent of Chesterbrook Partners, LP (“Landlord”) as set forth in the lease by and between them and Sublandlord, the sublease has a term that runs through October 2023. If for any reason the lease between the Landlord and Sublandlord is terminated or expires prior to October 2023, the Company’s sublease will automatically terminate.

In November 2016, the Company entered into a lease agreement with a third party for additional office space in Malvern, Pennsylvania with a term beginning in February 2017, and ending in November 2019. The Company also occupies office and laboratory space in St. Louis, Missouri under the terms of an agreement which expires in May 2019.

Rent expense was $886, $946 and $254 for the years ended December 31, 2018, 2017 and 2016, respectively. The Company recognizes rent expense on a straight-line basis over the term of the agreement and has accrued for rent expense incurred but not yet paid.

Capital Leases

Laboratory Equipment

The Company leases laboratory equipment which is used in its laboratory space in St. Louis, Missouri under two capital lease financing arrangements which the Company entered into in August 2017 and October 2017. The capital leases have terms which end in October 2020 and December 2020, respectively.

Fleet Vehicles

The Company leases automobiles for its sales force and other field-based employees under the terms of a master lease agreement with a third party. The lease term for each automobile begins on the date the Company takes delivery and continues for a period of four years. The Company has accounted for the automobile leases as capital leases in its consolidated financial statements.

As of December 31, 2018, future minimum lease payments under operating and capital lease agreements were as follows:


Year Ending December 31,
2019	$	1,242
2020		1,156
2021		1,054
2022		791
2023		531
Total	$	4,774

Stock Purchase Agreement with Vixen Pharmaceuticals, Inc

Pursuant to the stock purchase agreement with Vixen the Company is obligated to make annual payments of $100 through March 2022, with such amounts being creditable against specified future payments.

Indemnification Agreements

In the ordinary course of business, the Company may provide indemnification of varying scope and terms to vendors, lessors, business partners and other parties with respect to certain matters including, but not limited to, losses arising out of breach of such agreements or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with members of its board of directors that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is, in many cases, unlimited. To date, the Company has not incurred any material costs as a result of such indemnifications. The Company does not believe that the outcome of any claims under indemnification arrangements will have a material effect on its financial position, results of operations or cash flows, and it has not accrued any liabilities related to such obligations in its consolidated financial statements as of December 31, 2018 or 2017.

Income Taxes

12 Months Ended

Dec. 31, 2018

Income Taxes

Income Taxes

13. Income Taxes

The Tax Cuts and Jobs Act of 2017 (the "TCJA") was enacted on December 22, 2017 and became effective January 1, 2018. The TCJA made significant changes to U.S. tax law, including lowering U.S. corporate income tax rates, implementing a territorial tax system, imposing a one-time transition tax on deemed repatriated earnings of foreign subsidiaries and modifying the taxation of other income and expense items.

The TCJA reduced the U.S. corporate income tax rate from 35% to 21%, effective January 1, 2018. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to reverse. As a result of the reduction in the U.S. corporate income tax rate from 35% to 21% under the TCJA, the Company revalued its deferred tax liabilities, net as of December 31, 2017. The impact of revaluation of the deferred tax liabilities, net was $18,507 of income tax expense, which was more than offset by a reduction in the valuation allowance of $20,344 resulting in a net impact of a $1,837 tax benefit. The net tax benefit recorded was primarily the result of tax law changes which impacted the deferred tax liability the Company recorded for IPR&D related to the acquisition of Confluence. Under GAAP, IPR&D is an indefinite lived intangible that is capitalized on the balance sheet, but which does not have a cost basis under U.S. tax law.

The TCJA provided for a one-time transition tax on the deemed repatriation of post-1986 undistributed foreign subsidiary earnings and profits. The Company did not have consolidated accumulated earnings and profits attributable to its foreign subsidiary; accordingly, the Company did not record any income tax expense related to the transition tax.

Due to the timing of the enactment of the TCJA, the Staff of the SEC issued SAB 118 which provided a measurement period to report the impact of the TCJA. During the measurement period, provisional amounts for the effects of the law were able to be recorded to the extent a reasonable estimate can be made. To the extent that all information necessary is not available, prepared or analyzed, companies were able to recognize provisional estimated amounts for a period of up to one year following enactment of the TCJA. The Company completed its analysis during the year ended December 31, 2018, and made no adjustments as a result of TCJA under SAB 118.

During the years ended December 31, 2018, 2017 and 2016, the Company did not record an income tax benefit for net operating losses incurred in each year due to the uncertainty of realizing a benefit from those items.

Loss before income taxes is allocated as follows:


	Year Ended December 31,
	2018		2017		2016
U.S. operations	$	(132,473)	$	(63,665)	$	(40,597)
Foreign operations		(265)		(6,688)		(7,482)
Loss before income taxes	$	(132,738)	$	(70,353)	$	(48,079)

A reconciliation of the U.S. federal statutory income tax rate to the Company’s effective income tax rate is as follows:


	Year Ended December 31,
	2018		2017		2016
Federal statutory income tax rate	(21.0)	%	(34.0)	%	(34.0)	%
State taxes, net of federal benefit	(3.5)		(9.7)		(5.2)
Research and development tax credits	(2.1)		(1.1)		(2.0)
Permanent differences	0.8		0.4		1.8
Foreign rate differential	—		1.7		3.2
Change in deferred tax asset valuation allowance	25.7		17.4		36.2
Impact of U.S. tax reform	—		22.7		—
Effective income tax rate	(0.1)	%	(2.6)	%	—	%

Deferred tax liabilities, net as of December 31, 2018 and 2017 consisted of the following:


		December 31,
	2018		2017
Deferred tax assets:
Net operating loss carryforwards	$	57,426	$	26,566
Capitalized start-up costs		6,954		9,940
Research and development tax credit carryforwards		5,038		2,296
Capitalized research and development expenses		2,843		3,595
Stock‑based compensation expenses		9,037		6,220
Accrued compensation		923		—
Inventory		271		—
Property and equipment		—		86
Other		683		280
Total deferred tax assets		83,175		48,983
Deferred tax liabilities:
Property and equipment		(674)		—
Intangible asset		(1,735)		(1,843)
Section 481(a) adjustment		—		(498)
Other		(330)		(313)
Total deferred tax liabilities		(2,739)		(2,654)
Valuation allowance		(80,985)		(46,878)
Deferred tax liabilities, net	$	(549)	$	(549)

As of December 31, 2018, the Company had federal and state net operating loss (“NOL”) carryforwards of $199,507 and $212,430, respectively, which begin to expire in 2032. As of December 31, 2018, the Company also had federal research and development tax credit carryforwards of $4,944 which begin to expire in 2032, and state research and development tax credit carryforwards of $118 which begin to expire in 2022. The Company also has $1,513 of loss carry forwards in the United Kingdom which can be carried forward indefinitely. Utilization of the net operating loss carryforwards and research and development tax credit carryforwards in the United States may be subject to a substantial annual limitation under Section 382 of the Internal Revenue Code of 1986 due to ownership changes that may have occurred previously or that could occur in the future. These ownership changes may limit the amount of carryforwards that can be utilized annually to offset future taxable income. In general, an ownership change, as defined by Section 382, results from transactions increasing the ownership of certain stockholders or public groups in the stock of a corporation by more than 50% over a three-year period. The Company has completed an analysis under Section 382 for NOLs generated from July 13, 2012 through December 31, 2016. Although the Company has experienced Section 382 ownership changes since 2012, the Company has concluded that it should have sufficient ability to utilize NOLs accumulated during the periods tested. The Company has not yet determined if a Section 382 ownership change has occurred during the years ended December 31, 2017 or 2018, or for Confluence prior to the acquisition. In addition, the Company may experience ownership changes in the future as a result of subsequent shifts in its stock ownership, some of which may be outside of the Company’s control.

The Company has evaluated the positive and negative evidence bearing upon its ability to realize the deferred tax assets. The Company considered its history of cumulative net losses incurred since inception, its lack of substantial revenue generated to date, and its forecasted future operating losses and concluded that it is more likely than not that the Company will not realize the benefits of its deferred tax assets. Accordingly, a full valuation allowance has been established against the deferred tax assets as of December 31, 2018 and 2017. The Company evaluates positive and negative evidence of its’ ability to realize deferred tax assets at each reporting period.

Changes in the valuation allowance for deferred tax assets during the years ended December 31, 2018, 2017, and 2016 related primarily to the increases in net operating loss carryforwards, capitalized start-up costs, and research and development tax credit carryforwards and were as follows:


		Year Ended December 31,
		2018		2017		2016
Valuation allowance at beginning of year	$	(46,878)	$	(30,726)	$	(13,286)
Decreases recorded as benefit to income tax provision		—		—		—
Increases resulting from the acquisition of Confluence		—		(4,176)		—
Increases recorded to income tax provision		(34,107)		(11,976)		(17,440)
Valuation allowance as of end of year	$	(80,985)	$	(46,878)	$	(30,726)

During the year ended December 31, 2015, the Company recorded unrecognized tax benefits in the amount of $4,400 related to start-up costs that were previously deducted beginning in the initial return filing period ended December 31, 2012. During the year ended December 31, 2016, the Company filed a method of accounting change with the IRS related to the start-up costs, and reversed the related unrecognized tax position. During the year ended December 31, 2017, the Company recorded uncertain tax benefits related to tax positions from the acquired Confluence business, which were settled during the year ended December 31, 2018. The following table summarizes the changes in the Company’s unrecognized tax benefits:


	Year ended December 31,
	2018		2017		2016
Unrecognized tax benefits at beginning of year	$	43	$	—	$	(4,400)
Increases related to prior year tax provisions		—		43		—
Decreases related to prior year tax provisions		(43)		—		4,400
Increases related to current year tax provisions		—		—		—
Unrecognized tax benefits as of end of year	$	—	$	43	$	—

The total amount of unrecognized tax benefits that, if recognized, would impact the Company’s effective tax rate were $0 and $36 as of December 31, 2018 and 2017, respectively. The Company accrues interest and penalties related to unrecognized tax benefits in income tax expense (benefit) in the consolidated statement of operations and comprehensive loss. During each of the years ended December 31, 2018, 2017 and 2016, the Company recognized expense (benefit) of $0, $3 and $0, respectively, related to interest and penalties.

The Company files tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by federal and state jurisdictions, where applicable. There are currently no pending income tax examinations. The Company’s tax years are still open under statute from 2012 to the present. All open years may be examined to the extent that tax credit or net operating loss carryforwards are used in future periods. The Company’s policy is to record interest and penalties related to income taxes as part of its income tax provision.

Related Party Transactions

12 Months Ended

Dec. 31, 2018

Related Party Transactions

Related Party Transactions

14. Related Party Transactions

In August 2013, the Company entered into a sublease agreement with NeXeption, Inc. ("NeXeption"), which was subsequently assigned to NST Consulting, LLC, a wholly-owned subsidiary of NST, LLC. In November 2017, the Company terminated the sublease with NST Consulting, LLC effective March 31, 2018. The Company paid $590 to NST Consulting, LLC, which amount represented accelerated rent payments. The Company recorded a one-time charge of $506 in the year ended December 31, 2017 which is included in general and administrative expenses in the consolidated statement of operations. Total payments made under the sublease during the years ended December 31, 2018, 2017 and 2016, were $570, $318 and $253, respectively.

In February 2014, the Company entered into a services agreement with NST, LLC (the “NST Services Agreement”), pursuant to which NST, LLC provided certain pharmaceutical development, management and other administrative services to the Company. The NST Services agreement was subsequently assigned by NST, LLC to NST Consulting, LLC. Under the same agreement the Company also provided services to another company under common control with the Company and NST Consulting, LLC and was reimbursed by NST, LLC for those services. In November 2017, the Company terminated the NST Services Agreement effective December 31, 2017.

Mr. Stephen Tullman, the chairman of the Company’s board of directors, was an executive officer of NeXeption and is also the manager of NST Consulting, LLC and NST, LLC, and three of the Company’s executive officers are and have been members of entities affiliated with NST, LLC.

During the years ended December 31, 2018, 2017 and 2016 amounts included in the consolidated statement of operations for the NST Services Agreement are summarized in the following table:


	Year Ended
	December 31,
	2018		2017		2016
Services provided by NST Consulting, LLC	$	—	$	225	$	323
Services provided to NST Consulting, LLC		—		(17)		(56)
General and administrative expense, net	$	—	$	208	$	267

Services provided by NST Consulting, LLC	$	—	$	—	$	246
Services provided to NST Consulting, LLC		—		—		(97)
Research and development expense, net	$	—	$	—	$	149

Services provided by NST Consulting, LLC	$	—	$	225	$	569
Services provided to NST Consulting, LLC		—		(17)		(153)
Total, net	$	—	$	208	$	416


Net payments made to NST Consulting, LLC	$	—	$	300	$	325

The Company had a net amount payable of $0 and $570 due to NST Consulting, LLC under the NST Services Agreement as of December 31, 2018, and December 31, 2017, respectively.

Agreements Related to Intellectual Property	12 Months Ended
Agreements Related to Intellectual Property	Dec. 31, 2018
Agreements Related to Intellectual Property
Agreements Related to Intellectual Property	15. Agreements Related to Intellectual Property License, Development and Commercialization Agreement with Cipher Pharmaceuticals Inc. In April 2018, the Company entered into an exclusive license agreement with Cipher Pharmaceuticals Inc. (“Cipher”) for the rights to obtain regulatory approval of and commercialize A-101 40% Topical Solution, which the Company markets under the brand name ESKATA in the United States, in Canada for the treatment of SK. Under the agreement, Cipher is responsible for obtaining marketing approval in Canada for A-101 40% Topical Solution. The Company will supply Cipher with finished product, and, if regulatory approval is obtained, Cipher will be responsible for distribution and commercialization of A-101 40% Topical Solution in Canada. Additionally, Cipher is responsible for all expenses related to regulatory and commercial activities for A-101 40% Topical Solution in Canada. The Company received an upfront payment of $1,000 upon signing of the agreement with Cipher and $500 upon the achievement of a specified regulatory milestone, both of which are included in other revenue in the Company’s consolidated statement of operations for the year ended December 31, 2018. The Company can earn a remaining payment of $500 upon the achievement of a specified regulatory milestone, and aggregate payments of $1,750 upon the achievement of specified commercial milestones under the terms of the agreement with Cipher. Cipher will also be required to pay the Company a low double-digit percentage royalty on net sales of A-101 40% Topical Solution in Canada. The term of the agreement expires on the later of the expiration of applicable patents in Canada or the 15th anniversary of the first commercial sale of licensed product in Canada. Cipher submitted a New Drug Submission for A-101 40% Topical Solution for the treatment of raised SKs, which was accepted for review by Health Canada in December 2018. Assignment Agreement with Estate of Mickey Miller and Finder’s Services Agreement with KPT Consulting, LLC In August 2012, the Company entered into an assignment agreement with the Estate of Mickey Miller (the “Miller Estate”) under which the Company acquired some of the intellectual property rights covering ESKATA and A-101 45% Topical Solution. In connection with obtaining the assignment of the intellectual property from the Miller Estate, the Company also entered into a separate finder’s services agreement with KPT Consulting, LLC. Under the terms of the finder’s services agreement, the Company made one-time milestone payments of $300 in the year ended December 31, 2016 upon the dosing of the first human subject with ESKATA in the Company’s Phase 3 clinical trial, $1,000 in the year ended December 31, 2017 upon the achievement of a specified regulatory milestone and $1,500 in the year ended December 31, 2018 upon the achievement of a specified commercial milestone. The payments were recorded as general and administrative expenses in the Company’s consolidated statement of operations. Under the finder’s services agreement the Company is obligated to make an additional milestone payment of $3,000 upon the achievement of a specified commercial milestone. Under each of the assignment agreement and the finder’s services agreement, the Company is obligated to pay royalties on sales of ESKATA and any related products, at low single-digit percentages of net sales, subject to reduction in specified circumstances. The Company incurred an aggregate expense of $112 and $0 related to royalty payments under these agreements during the years ended December 31, 2018 and 2017, respectively. Both agreements will terminate upon the expiration of the last pending, viable patent claim of the patents acquired under the assignment agreement, but no sooner than 15 years from the effective date of the agreements. License Agreement with Rigel Pharmaceuticals, Inc. In August 2015, the Company entered into an exclusive, worldwide license and collaboration agreement with Rigel Pharmaceuticals, Inc. (“Rigel”) for the development and commercialization of products containing specified JAK inhibitors developed by Rigel. Under this agreement, the Company intends to develop these JAK inhibitors for the treatment of alopecia areata and other dermatological conditions. During the year ended December 31, 2015, the Company made an upfront non-refundable payment of $8,000 to Rigel. In addition, the Company has agreed to make aggregate payments of up to $80,000 upon the achievement of specified pre‑commercialization milestones, such as clinical trials and regulatory approvals. Further, the Company has agreed to pay up to an additional $10,000 to Rigel upon the achievement of a second set of development milestones. With respect to any products the Company commercializes under the agreement, the Company will pay Rigel quarterly tiered royalties on its annual net sales of each product at a high single‑digit percentage of annual net sales, subject to specified reductions, until the date that all of the patent rights for that product have expired, as determined on a country‑by‑country and product‑by‑product basis or, in specified countries under specified circumstances, ten years from the first commercial sale of such product. The agreement terminates on the date of expiration of all royalty obligations unless earlier terminated by either party for a material breach. The Company may also terminate the agreement without cause at any time upon advance written notice to Rigel. Rigel, after consultation with the Company, will be responsible for maintaining and prosecuting the patent rights, and the Company will have final decision making authority regarding such patent rights for a product in the United States and the European Union. To the extent that the Company and Rigel jointly develop intellectual property, the parties will confer and decide which party will be responsible for filing, prosecuting and maintaining those patent rights. The agreement also establishes a joint steering committee composed of an equal number of representatives for each party which will monitor progress in the development of products. The Company accounted for the transaction as an asset acquisition as the licensing arrangement did not meet the definition of a business pursuant to the guidance prescribed in ASC Topic 805, Business Combinations. Accordingly, the Company recorded the $8,000 upfront payment as research and development expense in the year ended December 31, 2015. The Company will record as expense any contingent milestone payments or royalties in the period in which such liabilities are incurred. The Company concluded that licensing arrangement with Rigel did not meet the definition of a business because the transaction principally resulted in its acquisition of intellectual property. As part of the transaction, the Company did not acquire any employees or tangible assets, or any processes, protocols or operating systems. In addition, at the time of the acquisition, there were no activities being conducted related to the licensed patents. The Company expensed the cost of the acquired intellectual property as of the acquisition date on the basis that the cost of intellectual property that is purchased for use in research and development activities, and that has no alternative future uses, is expensed when acquired. Stock Purchase Agreement with Vixen Pharmaceuticals, Inc. and License Agreement with Columbia University In March 2016, the Company entered into a stock purchase agreement (the “Vixen Agreement”) with Vixen, JAK1, LLC, JAK2, LLC and JAK3, LLC (together, the “Selling Stockholders”) and Shareholder Representative Services LLC, solely in its capacity as the representative of the Selling Stockholders. Pursuant to the Vixen Agreement, the Company acquired all shares of Vixen’s capital stock from the Selling Stockholders. Following the acquisition of Vixen, Vixen became a wholly-owned subsidiary of the Company. Pursuant to the Vixen Agreement, the Company paid $600 upfront and issued an aggregate of 159,420 shares of the Company’s common stock to the Selling Stockholders. The Company is obligated to make annual payments of $100 each year through March 2022, with such amounts being creditable against specified future payments that may be paid under the Vixen Agreement. The Company is obligated to make aggregate payments of up to $18,000 to the Selling Stockholders upon the achievement of specified pre-commercialization milestones for three products in the United States, the European Union and Japan, and aggregate payments of up to $22,500 upon the achievement of specified commercial milestones. With respect to any commercialized products covered by the Vixen Agreement, the Company is obligated to pay low single-digit royalties on net sales, subject to specified reductions, limitations and other adjustments, until the date that all of the patent rights for that product have expired, as determined on a country-by-country and product-by-product basis or, in specified circumstances, ten years from the first commercial sale of such product. If the Company sublicenses any of Vixen’s patent rights and know-how acquired pursuant to the Vixen Agreement, the Company will be obligated to pay a portion of any consideration the Company receives from such sublicenses in specified circumstances. As a result of the transaction with Vixen, the Company became party to the Exclusive License Agreement, by and between Vixen and the Trustees of Columbia University in the City of New York (“Columbia”), dated as of December 31, 2015 (as amended, the “License Agreement”). Under the License Agreement, the Company is obligated to pay Columbia an annual license fee of $10, subject to specified adjustments for patent expenses incurred by Columbia and creditable against any royalties that may be paid under the License Agreement. The Company is also obligated to pay up to an aggregate of $11,600 upon the achievement of specified commercial milestones, including specified levels of net sales of products covered by Columbia patent rights and/or know-how, and royalties at a sub-single-digit percentage of annual net sales of products covered by Columbia patent rights and/or know-how, subject to specified adjustments. If the Company sublicenses any of Columbia’s patent rights and know-how acquired pursuant to the License Agreement, it will be obligated to pay Columbia a portion of any consideration received from such sublicenses in specified circumstances. The royalties, as determined on a country-by-country and product-by-product basis, are payable until the date that all of the patent rights for that product have expired, the expiration of any market exclusivity period granted by a regulatory body or, in specified circumstances, ten years from the first commercial sale of such product. The License Agreement terminates on the date of expiration of all royalty obligations thereunder unless earlier terminated by either party for a material breach, subject to a specified cure period. The Company may also terminate the License Agreement without cause at any time upon advance written notice to Columbia. The Company accounted for the transaction with Vixen as an asset acquisition as the arrangement did not meet the definition of a business pursuant to the guidance prescribed in ASC Topic 805, Business Combinations. The Company concluded the transaction with Vixen did not meet the definition of a business because the transaction principally resulted in the acquisition of the License Agreement. The Company did not acquire tangible assets, processes, protocols or operating systems. In addition, at the time of the transaction, there were no activities being conducted related to the licensed patents. The Company expensed the acquired intellectual property as of the acquisition date on the basis that the cost of intellectual property purchased for use in research and development activities, and that has no alternative future uses, is expensed when acquired. Accordingly, the Company recorded the $600 upfront payment, the fair value of the shares of common stock issued of $2,355, and the present value of the six non-contingent annual payments as research and development expense in the year ended December 31, 2016. Additionally, the Company will record as expense any contingent milestone payments or royalties in the period in which such liabilities are incurred.

Retirement Savings Plan	12 Months Ended
Retirement Savings Plan	Dec. 31, 2018
Retirement Savings Plan
Retirement Savings Plan	16. Retirement Savings Plan The Company has a defined contribution savings plan under Section 401(k) of the Internal Revenue Code. This plan covers substantially all employees who meet minimum age and service requirements and allows participants to defer a portion of their annual compensation on a pre-tax basis. Company contributions to the plan may be made at the discretion of the Company’s board of directors. The Company has elected to match 100% of employee contributions to the 401(k) Plan up to 4% of the employee’s earnings, subject to certain limitations. Company contributions under the 401(k) Plan were $662, $270, and $176 for the years ended December 31, 2018, 2017 and 2016, respectively.

Segment Information

12 Months Ended

Dec. 31, 2018

Segment Information

Segment Information

17. Segment Information

The Company has two reportable segments, dermatology therapeutics and contract research. The dermatology therapeutics segment is focused on identifying, developing and commercializing innovative therapies to address significant unmet needs for dermatological and immuno-inflammatory diseases. The Company currently markets and sells two drugs, ESKATA and RHOFADE. ESKATA is a proprietary formulation of high-concentration hydrogen peroxide topical solution that the Company is commercializing as an office-based prescription treatment for raised SKs, a common non-malignant skin tumor. RHOFADE is approved for the topical treatment of persistent facial erythema, or redness, associated with rosacea in adults. The Company sells ESKATA and RHOFADE to a limited number of wholesalers in the U.S. These wholesalers subsequently resell the Company’s products to pharmacies and health care providers. The contract research segment earns revenue from the provision of laboratory services to clients through Confluence, the Company’s wholly-owned subsidiary. Contract research revenue is generally evidenced by contracts with clients which are on an agreed upon fixed-price, fee-for-service basis. Corporate and other includes general and administrative expenses as well as eliminations of intercompany transactions. The Company does not report balance sheet information by segment since it is not reviewed by the chief operating decision maker, and all of the Company’s tangible assets are held in the United States.

The Company’s results of operations by segment for the years ended December 31, 2018, 2017 and 2016 are summarized in the tables below:



	Dermatology		Contract		Corporate		Total
Year Ended December 31, 2018	Therapeutics		Research		and Other		Company
Revenue, net	$	5,441	$	13,134	$	(8,484)	$	10,091
Cost of revenue		2,522		11,398		(7,070)		6,850
Research and development		64,423		—		(1,414)		63,009
Sales and marketing		47,957		40		—		47,997
General and administrative		30		2,141		25,478		27,649
Loss from operations	$	(109,491)	$	(445)	$	(25,478)	$	(135,414)


	Dermatology		Contract		Corporate		Total
Year Ended December 31, 2017	Therapeutics		Research		and Other		Company
Revenue, net	$	—	$	3,202	$	(1,519)	$	1,683
Cost of revenue		—		2,726		(1,519)		1,207
Research and development		39,790		—		—		39,790
Sales and marketing		13,769		—		—		13,769
General and administrative		222		673		18,445		19,340
Loss from operations	$	(53,781)	$	(197)	$	(18,445)	$	(72,423)


	Dermatology		Contract		Corporate		Total
Year Ended December 31, 2016	Therapeutics		Research		and Other		Company
Revenue, net	$	—	$	—	$	—	$	—
Cost of revenue		—		—		—		—
Research and development		33,476		—		—		33,476
Sales and marketing		3,295		—		—		3,295
General and administrative		155		—		11,641		11,796
Loss from operations	$	(36,926)	$	—	$	(11,641)	$	(48,567)

Intersegment Revenue

Revenue for the contract research segment included $8,484 and $1,519 for services performed on behalf of the dermatology therapeutics segment for the years ended December 31, 2018 and 2017, respectively. All intersegment revenue has been eliminated in the Company’s consolidated statement of operations.

Quarterly Financial Information (unaudited)

12 Months Ended

Dec. 31, 2018

Quarterly Financial Information (unaudited)

Quarterly Financial Information (unaudited)

18. Quarterly Financial Information (unaudited)

The following table summarizes the unaudited consolidated financial results of operations for the quarters indicated:


	2018 Quarter Ended
	March 31,		June 30,		September 30,		December 31,
Revenue, net	$	1,118	$	3,676	$	1,628	$	3,669
Gross profit		151		2,495		435		160
Operating expenses		31,099		34,473		33,885		39,198
Other income, net		719		760		710		487
Net loss		(30,229)		(31,218)		(32,740)		(38,551)
Net loss per share, basic and diluted	$	(0.98)	$	(1.01)	$	(1.06)	$	(0.99)

	2017 Quarter Ended
	March 31,		June 30,		September 30,		December 31,
Revenue, net	$	—	$	—	$	684	$	999
Gross profit		—		—		231		245
Operating expenses		12,930		15,295		18,987		25,687
Other income, net		371		457		564		678
Net loss		(12,559)		(14,838)		(18,192)		(22,934)
Net loss per share, basic and diluted	$	(0.48)	$	(0.56)	$	(0.63)	$	(0.74)

Net loss per share is computed independently for each quarter and, therefore, the sum of the quarterly per share amounts may not equal the year-to-date per share amount.

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2018

Summary of Significant Accounting Policies

Basis of Presentation

Use of Estimates

Revenue Recognition

Product Sales, net

Product sales, net included the following for the years ended December 31, 2018, 2017 and 2016:


	Year Ended
	December 31,
	2018		2017		2016
ESKATA	$	2,804	$	—	$	—
RHOFADE		1,136		—		—
Total product revenue, net	$	3,940	$	—	$	—

Contract Research

Other Revenue

Cash Equivalents

Marketable Securities

Other Assets

Inventory

Deferred Offering Costs

Property and Equipment

Assets Held for Sale

Impairment of Long Lived Assets

Intangible Assets

Goodwill

Contingent Consideration

Research and Development Costs

Stock-Based Compensation

The fair value of each RSU is measured using the closing price of the Company’s common stock on the date of grant.

Patent Costs

Foreign Currency Translation

Income Taxes

Comprehensive Loss

Net Loss per Share

Fair Value Measurements

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

Concentration of Credit Risk and of Significant Suppliers

Concentration of Credit Risk and of Significant Customers and Suppliers

Segment Reporting

Recently Issued Accounting Pronouncements

Recently Issued and Adopted Accounting Pronouncements

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2018

Summary of Significant Accounting Policies

Schedule of product sales, net


	Year Ended
	December 31,
	2018		2017		2016
ESKATA	$	2,804	$	—	$	—
RHOFADE		1,136		—		—
Total product revenue, net	$	3,940	$	—	$	—

Acquisitions (Tables)

12 Months Ended

Dec. 31, 2018

Business Acquisition [Line Items]

Schedule of pro forma information


	Year Ended
	December 31,
	2018		2017		2016
Revenue	$	10,091	$	4,365	$	3,693
Gross profit		3,241		1,347		1,652
Total operating expenses		138,655		73,810		51,277
Net loss		(132,738)		(70,391)		(49,148)

Confluence

Business Acquisition [Line Items]

Schedule of fair value of assets acquired and liabilities assumed


Cash and cash equivalents	$	622
Accounts receivable, net		574
Other current assets		89
Property and equipment		268
Other intangible assets		751
IPR&D		6,629
Goodwill		18,504
Total assets acquired		27,437

Accounts payable and accrued expenses		656
Deferred tax liability		2,386
Other liabilities		73
Total liabilities assumed		3,115

Total net assets acquired	$	24,322

Schedule of consideration transferred


Cash consideration paid	$	10,269
Aclaris common stock issued		9,675
Contingent consideration		4,378
Total fair value of consideration to Confluence equity holders	$	24,322

RHOFADE

Business Acquisition [Line Items]

Schedule of assets acquired


Cash paid to Allergan at closing	$	59,574
Cash deposited in escrow at closing		6,500
Transaction costs		1,048
Total purchase price of assets acquired	$	67,122

Schedule of fair value of assets acquired


Inventory	$	893
Intangible assets, net		66,229
Total assets acquired	$	67,122

Fair Value of Financial Assets and Liabilities (Tables)

12 Months Ended

Dec. 31, 2018

Fair Value of Financial Assets and Liabilities

Schedule of assets and liabilities measured at fair value on a recurring basis


	December 31, 2018
	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents	$	49,766	$	4,992	$	—	$	54,758
Marketable securities		—		110,953		—		110,953
Total Assets	$	49,766	$	115,945	$	—	$	165,711


Liabilities:
Acquisition-related contingent consideration	$	—	$	—	$	934	$	934
Total liabilities	$	—	$	—	$	934	$	934


	December 31, 2017
	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents	$	19,339	$	—	$	—	$	19,339
Marketable securities		—		188,652		—		188,652
Total Assets	$	19,339	$	188,652	$	—	$	207,991


Liabilities:
Acquisition-related contingent consideration	$	—	$	—	$	4,378	$	4,378
Total liabilities	$	—	$	—	$	4,378	$	4,378

Schedule of the fair value of available for sale marketable securities


	December 31, 2018
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gain		Loss		Value
Marketable securities:
Corporate debt securities	$	5,030	$	—	$	(14)	$	5,016
Commercial paper		67,159		—		—		67,159
Asset-backed securities		21,745		—		(8)		21,737
U.S. government agency debt securities		17,044		—		(3)		17,041
Total marketable securities	$	110,978	$	—	$	(25)	$	110,953


	December 31, 2017
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gain		Loss		Value
Marketable securities:
Corporate debt securities	$	37,401	$	—	$	(68)	$	37,333
Commercial paper		85,202		—		—		85,202
Asset-backed securities		16,708		—		(13)		16,695
U.S. government agency debt securities		49,511		—		(89)		49,422
Total marketable securities	$	188,822	$	—	$	(170)	$	188,652

Property and Equipment, Net (Tables)

12 Months Ended

Dec. 31, 2018

Property and Equipment, Net

Schedule of property and equipment, net


	December 31,
	2018		2017
Computer equipment	$	1,292	$	650
Fleet vehicles		2,131		—
Manufacturing equipment		604		511
Lab equipment		1,068		721
Furniture and fixtures		524		327
Leasehold improvements		332		430
Property and equipment, gross		5,951		2,639
Accumulated depreciation		(1,671)		(480)
Property and equipment, net	$	4,280	$	2,159

Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2018

Intangible Assets

Schedule of intangible assets


		Gross Cost				Accumulated Amortization
	Remaining	December 31,				December 31,
	Life	2018		2017		2018		2017
RHOFADE product rights	9.9	$	66,229	$	—	$	552	$	—
Other intangible assets	8.6		751		751		106		31
Total definite-lived intangible assets			66,980		751		658		31
IPR&D	na		6,629		6,629		—		—
Total intangible assets, net		$	73,609	$	7,380	$	658	$	31

Schedule of estimated future amortization expenses


Year Ending December 31,
2019	$	6,698
2020		6,698
2021		6,698
2022		6,698
2023		6,698
Thereafter		32,832
Total	$	66,322

Accrued Expenses (Tables)

12 Months Ended

Dec. 31, 2018

Accrued Expenses

Schedule of accrued expenses


	December 31,
	2018		2017
Employee compensation expenses	$	5,293	$	3,010
Sales incentives and rebates		2,650		—
Marketing expenses		453		39
Research and development expenses		1,437		627
Capital leases, current portion		601		142
Professional fees		1,123		108
Payable to NST		—		590
Other		1,030		424
Total accrued expenses	$	12,587	$	4,940

Stock-Based Awards (Tables)

12 Months Ended

Dec. 31, 2018

Stock-Based Awards

Assumptions used to determine fair value of stock options granted


	Year Ended
	December 31,
	2018		2017		2016
Risk-free interest rate	2.66	%	1.93	%	2.06	%
Expected term (in years)	6.3		6.2		6.5
Expected volatility	96.78	%	94.19	%	94.86	%
Expected dividend yield	0	%	0	%	0	%

Summary of stock option activity


					Weighted
			Weighted		Average
			Average		Remaining	Aggregate
	Number		Exercise		Contractual	Intrinsic
	of Shares		Price		Term	Value
					(in years)
Outstanding as of December 31, 2015	1,738,524		$	13.23	9.51	$	24,722
Granted	1,083,919			27.12
Exercised	(51,980)			—
Forfeited and cancelled	(68,113)			—
Outstanding as of December 31, 2016	2,702,350		$	18.94	9.05		24,434
Granted	790,100			26.21
Exercised	(36,738)			6.40
Forfeited and cancelled	(126,955)			22.05
Outstanding as of December 31, 2017	3,328,757		$	20.69	8.28	$	19,812
Granted	1,459,800			20.97
Exercised	(59,450)			9.70
Forfeited and cancelled	(447,026)			24.62
Outstanding as of December 31, 2018	4,282,081		$	20.53	7.91	$	2,404
Options vested and expected to vest as of December 31, 2018	4,282,081		$	20.53	7.91	$	2,404
Options exercisable as of December 31, 2018	1,908,561	(1)	$	17.53	7.02	$	2,404

(1)

Summary of restricted stock units activity


		Weighted
		Average
		Grant Date
	Number	Fair Value
	of Shares	Per Share

Outstanding as of December 31, 2015	53,800	$	28.68
Granted	180,764		27.16
Vested	(12,950)		28.68
Forfeited and cancelled	(2,000)		28.68
Outstanding as of December 31, 2016	219,614	$	27.43
Granted	117,883		26.27
Vested	(40,705)		26.89
Forfeited and cancelled	(13,239)		27.53
Outstanding as of December 31, 2017	283,553	$	27.02
Granted	552,060		19.03
Vested	(140,497)		27.22
Forfeited and cancelled	(68,709)		23.65
Outstanding as of December 31, 2018	626,407	$	20.30

Stock-based compensation expense


	Year Ended
	December 31,
	2018		2017		2016
Cost of revenue	$	766	$	211	$	—
Research and development		6,480		5,471		2,291
Sales and marketing		3,492		1,851		—
General and administrative		9,317		6,897		3,813
Total stock-based compensation expense	$	20,055	$	14,430	$	6,104

Net Loss per Share (Tables)

12 Months Ended

Dec. 31, 2018

Net Loss per Share

Basic and diluted net loss per share


	Year Ended
	December 31,
	2018		2017		2016
Numerator:
Net loss	$	(132,738)	$	(68,523)	$	(48,079)
Denominator:
Weighted average shares of common stock outstanding		32,909,762		28,102,386		21,415,733
Net loss per share, basic and diluted	$	(4.03)	$	(2.44)	$	(2.25)

Potential common shares excluded from the calculation of diluted net loss per share attributable to common stockholders


	December 31,
	2018	2017	2016
Options to purchase common stock	4,282,081	3,328,757	1,738,524
Restricted stock unit awards	626,407	283,553	53,800
Total potential shares of common stock	4,908,488	3,612,310	1,792,324

Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2018

Commitments and Contingencies

Schedule of future minimum lease payments


Year Ending December 31,
2019	$	1,242
2020		1,156
2021		1,054
2022		791
2023		531
Total	$	4,774

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2018

Income Taxes

Schedule of loss before income taxes by jurisdiction


	Year Ended December 31,
	2018		2017		2016
U.S. operations	$	(132,473)	$	(63,665)	$	(40,597)
Foreign operations		(265)		(6,688)		(7,482)
Loss before income taxes	$	(132,738)	$	(70,353)	$	(48,079)

Reconciliation of statutory to effective rate


	Year Ended December 31,
	2018		2017		2016
Federal statutory income tax rate	(21.0)	%	(34.0)	%	(34.0)	%
State taxes, net of federal benefit	(3.5)		(9.7)		(5.2)
Research and development tax credits	(2.1)		(1.1)		(2.0)
Permanent differences	0.8		0.4		1.8
Foreign rate differential	—		1.7		3.2
Change in deferred tax asset valuation allowance	25.7		17.4		36.2
Impact of U.S. tax reform	—		22.7		—
Effective income tax rate	(0.1)	%	(2.6)	%	—	%

Schedule of deferred tax assets and liabilities


		December 31,
	2018		2017
Deferred tax assets:
Net operating loss carryforwards	$	57,426	$	26,566
Capitalized start-up costs		6,954		9,940
Research and development tax credit carryforwards		5,038		2,296
Capitalized research and development expenses		2,843		3,595
Stock‑based compensation expenses		9,037		6,220
Accrued compensation		923		—
Inventory		271		—
Property and equipment		—		86
Other		683		280
Total deferred tax assets		83,175		48,983
Deferred tax liabilities:
Property and equipment		(674)		—
Intangible asset		(1,735)		(1,843)
Section 481(a) adjustment		—		(498)
Other		(330)		(313)
Total deferred tax liabilities		(2,739)		(2,654)
Valuation allowance		(80,985)		(46,878)
Deferred tax liabilities, net	$	(549)	$	(549)

Changes in deferred tax asset valuation allowance


		Year Ended December 31,
		2018		2017		2016
Valuation allowance at beginning of year	$	(46,878)	$	(30,726)	$	(13,286)
Decreases recorded as benefit to income tax provision		—		—		—
Increases resulting from the acquisition of Confluence		—		(4,176)		—
Increases recorded to income tax provision		(34,107)		(11,976)		(17,440)
Valuation allowance as of end of year	$	(80,985)	$	(46,878)	$	(30,726)

Schedule of changes in unrecognized tax benefits


	Year ended December 31,
	2018		2017		2016
Unrecognized tax benefits at beginning of year	$	43	$	—	$	(4,400)
Increases related to prior year tax provisions		—		43		—
Decreases related to prior year tax provisions		(43)		—		4,400
Increases related to current year tax provisions		—		—		—
Unrecognized tax benefits as of end of year	$	—	$	43	$	—

Related Party Transactions (Tables)

12 Months Ended

Dec. 31, 2018

Related Party Transactions


	Year Ended
	December 31,
	2018		2017		2016
Services provided by NST Consulting, LLC	$	—	$	225	$	323
Services provided to NST Consulting, LLC		—		(17)		(56)
General and administrative expense, net	$	—	$	208	$	267

Services provided by NST Consulting, LLC	$	—	$	—	$	246
Services provided to NST Consulting, LLC		—		—		(97)
Research and development expense, net	$	—	$	—	$	149

Services provided by NST Consulting, LLC	$	—	$	225	$	569
Services provided to NST Consulting, LLC		—		(17)		(153)
Total, net	$	—	$	208	$	416


Net payments made to NST Consulting, LLC	$	—	$	300	$	325

Segment Information (Tables)

12 Months Ended

Dec. 31, 2018

Segment Information

Summary of results of operations by segment



	Dermatology		Contract		Corporate		Total
Year Ended December 31, 2018	Therapeutics		Research		and Other		Company
Revenue, net	$	5,441	$	13,134	$	(8,484)	$	10,091
Cost of revenue		2,522		11,398		(7,070)		6,850
Research and development		64,423		—		(1,414)		63,009
Sales and marketing		47,957		40		—		47,997
General and administrative		30		2,141		25,478		27,649
Loss from operations	$	(109,491)	$	(445)	$	(25,478)	$	(135,414)


	Dermatology		Contract		Corporate		Total
Year Ended December 31, 2017	Therapeutics		Research		and Other		Company
Revenue, net	$	—	$	3,202	$	(1,519)	$	1,683
Cost of revenue		—		2,726		(1,519)		1,207
Research and development		39,790		—		—		39,790
Sales and marketing		13,769		—		—		13,769
General and administrative		222		673		18,445		19,340
Loss from operations	$	(53,781)	$	(197)	$	(18,445)	$	(72,423)


	Dermatology		Contract		Corporate		Total
Year Ended December 31, 2016	Therapeutics		Research		and Other		Company
Revenue, net	$	—	$	—	$	—	$	—
Cost of revenue		—		—		—		—
Research and development		33,476		—		—		33,476
Sales and marketing		3,295		—		—		3,295
General and administrative		155		—		11,641		11,796
Loss from operations	$	(36,926)	$	—	$	(11,641)	$	(48,567)

Quarterly Financial Information (unaudited) (Tables)

12 Months Ended

Dec. 31, 2018

Quarterly Financial Information (unaudited)

Quarterly financial information (unaudited)


	2018 Quarter Ended
	March 31,		June 30,		September 30,		December 31,
Revenue, net	$	1,118	$	3,676	$	1,628	$	3,669
Gross profit		151		2,495		435		160
Operating expenses		31,099		34,473		33,885		39,198
Other income, net		719		760		710		487
Net loss		(30,229)		(31,218)		(32,740)		(38,551)
Net loss per share, basic and diluted	$	(0.98)	$	(1.01)	$	(1.06)	$	(0.99)

	2017 Quarter Ended
	March 31,		June 30,		September 30,		December 31,
Revenue, net	$	—	$	—	$	684	$	999
Gross profit		—		—		231		245
Operating expenses		12,930		15,295		18,987		25,687
Other income, net		371		457		564		678
Net loss		(12,559)		(14,838)		(18,192)		(22,934)
Net loss per share, basic and diluted	$	(0.48)	$	(0.56)	$	(0.63)	$	(0.74)

Organization and Nature of Business (Details) $ in Thousands	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Aug. 31, 2017 product
Organization and Nature of Business
Number of commercial products \| product			2
Cash, cash equivalents and marketable securities	$ 167,972
Accumulated deficit	$ 292,173	$ 159,435

Summary of Significant Accounting Policies (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2018 USD ($) item	Feb. 28, 2017 USD ($)
Summary of Significant Accounting Policies
PDUFA fee paid, later refunded		$ 2,000
Revenue Recognition
Revenue, Remaining Performance Obligation, Optional Exemption, Performance Obligation [true false]	true
Revenue, Practical Expedient, Financing Component [true false]	true
Number of active research grants \| item	2
Remaining funds available to the Company under grants	$ 0
Inventory
Inventory	$ 791

Summary of Significant Accounting Policies - Product Sales (Details) - USD ($) $ in Thousands	3 Months Ended						12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Disaggregation of Revenue [Line Items]
Revenue, net	$ 3,669	$ 1,628	$ 3,676	$ 1,118	$ 999	$ 684	$ 10,091	$ 1,683
Product sales
Disaggregation of Revenue [Line Items]
Revenue, net							3,940
ESKATA
Disaggregation of Revenue [Line Items]
Revenue, net							2,804
RHOFADE
Disaggregation of Revenue [Line Items]
Revenue, net							$ 1,136

Summary of Significant Accounting Policies - Deferred Costs (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Aug. 31, 2017
Summary Of Accounting Policies [Line Items]
Deferred offering costs	$ 0	$ 62
Write-down of equipment held for sale			$ 216
Assets held for sale	0	0
Goodwill	$ 18,504	$ 18,504
Expected dividend yield (as a percent)	0.00%	0.00%	0.00%
Confluence
Summary Of Accounting Policies [Line Items]
Goodwill				$ 18,504
Computer equipment
Summary Of Accounting Policies [Line Items]
Depreciation period (in years)	3 years
Manufacturing equipment
Summary Of Accounting Policies [Line Items]
Depreciation period (in years)	5 years
Furniture and fixtures
Summary Of Accounting Policies [Line Items]
Depreciation period (in years)	5 years

Summary of Significant Accounting Policies - Risk (Details)	5 Months Ended	12 Months Ended
	Dec. 31, 2017 customer	Dec. 31, 2018 customer item
Concentration Risk [Line Items]
Number of financial institutions holding entity funds \| item		1
Laboratory Servicer Revenues [Member] \| Customer Concentration Risk [Member]
Concentration Risk [Line Items]
Number of customers comprising risk percentage \| customer	5	5
Concentration of risk (as a percent)	70.00%	83.00%

Summary of Significant Accounting Policies - Recent Pronouncements (Details) - USD ($) $ in Thousands	Jan. 01, 2019	Dec. 31, 2018	Jan. 01, 2018	Dec. 31, 2017
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Cumulative effect recognized on initial adoption of the new guidance		$ (292,173)		$ (159,435)
Adjustment \| Minimum \| ASU 2016-02
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
ROU assets	$ 2,000
Lease liability	2,000
Adjustment \| Maximum \| ASU 2016-02
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
ROU assets	2,500
Lease liability	$ 2,500
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] \| Accounting Standards Update 2014-09 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Cumulative effect recognized on initial adoption of the new guidance			$ 0

Acquisitions - Amount Paid for Assets Acquired (Details) - APA - USD ($) $ in Thousands	1 Months Ended	12 Months Ended
	Nov. 30, 2018	Dec. 31, 2018	Dec. 31, 2017
Business Acquisition [Line Items]
Cash paid to Allergan at closing	$ 59,574
Cash deposited in escrow at closing	6,500
Transaction costs	1,048
Total purchase price of assets acquired	67,122
Potential milestones payable	$ 5,000
Royalty payment expenses		$ 165	$ 0

Acquisitions - Summary of Fair Value Assets Acquired (Details) - APA $ in Thousands	1 Months Ended
	Nov. 30, 2018 USD ($)
Business Acquisition [Line Items]
Amortization on straight-line basis	10 years
Nonrecurring
Business Acquisition [Line Items]
Inventory	$ 893
Intangible assets, net	66,229
Total assets acquired	$ 67,122

Acquisitions - Summary of Fair Value Consideration (Details) - USD ($) $ in Thousands	1 Months Ended		12 Months Ended
	Nov. 30, 2018	Aug. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Fair value of consideration
Cash consideration paid				$ 9,647
Confluence
Business Acquisition [Line Items]
Additional contingent consideration based on milestones, maximum, per Agreement			$ 75,000
Royalty term			10 years
Payment in cash	$ 2,500
Number of shares	253,208
Fair value of common stock	$ 2,216
Fair value of consideration
Cash consideration paid		$ 10,269
Aclaris common stock issued		9,675
Contingent consideration		4,378
Total fair value of consideration to Confluence equity holders		$ 24,322

Acquisitions - Fair Value of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017	Aug. 31, 2017
Business Acquisition [Line Items]
Goodwill	$ 18,504	$ 18,504
Confluence
Business Acquisition [Line Items]
Cash and cash equivalents			$ 622
Accounts receivable, net			574
Other current assets			89
Property and equipment			268
Other intangible assets			751
IPR&D			6,629
Goodwill			18,504
Total assets acquired			27,437
Accounts payable and accrued expenses			656
Deferred tax liability			2,386
Other liabilities			73
Total liabilities assumed			3,115
Total net assets acquired			$ 24,322

Acquisitions - Supplemental Pro Forma Financial Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Acquisition-related expenses
Business Acquisition [Line Items]
Net loss		$ 1,351	$ 0
Confluence
Business Acquisition [Line Items]
Revenue	$ 10,091	4,365	3,693
Gross profit	3,241	1,347	1,652
Total operating expenses	138,655	73,810	51,277
Net loss	$ (132,738)	(70,391)	(49,148)
Confluence \| Billed revenues
Business Acquisition [Line Items]
Net loss		$ 888	$ 0

Fair Value of Financial Assets and Liabilities (Details) - USD ($) $ in Thousands	1 Months Ended	12 Months Ended
	Nov. 30, 2018	Dec. 31, 2018	Dec. 31, 2017
Assets:
Marketable securities		$ 110,953	$ 188,652
Liabilities:
Transfers from Level 1 to Level 2		0	0
Transfers from Level 2 to Level 1		0	0
Transfers into or out of Level 3		0	0
Change in fair value of contingent consideration		1,272
Adjustments to liability		1,272
Confluence
Liabilities:
Payment in cash	$ 2,500
Fair value of common stock	$ 2,216
Recurring
Assets:
Cash equivalents		54,758	19,339
Marketable securities		110,953	188,652
Total assets measured at fair value		165,711	207,991
Liabilities:
Acquisition-related contingent consideration		934	4,378
Total liabilities measured at fair value		934	4,378
Recurring \| Level 1
Assets:
Cash equivalents		49,766	19,339
Total assets measured at fair value		49,766	19,339
Recurring \| Level 2
Assets:
Cash equivalents		4,992
Marketable securities		110,953	188,652
Total assets measured at fair value		115,945	188,652
Recurring \| Level 3
Liabilities:
Acquisition-related contingent consideration		934	4,378
Total liabilities measured at fair value		934	$ 4,378
Achievement Of Development Milestones
Liabilities:
Change in fair value of contingent consideration		$ 3,444

Fair Value of Financial Assets and Liabilities - By type (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Marketable securities:
Amortized Cost	$ 110,978	$ 188,822
Gross Unrealized Loss	(25)	(170)
Fair Value	110,953	188,652
Corporate debt securities
Marketable securities:
Amortized Cost	5,030	37,401
Gross Unrealized Loss	(14)	(68)
Fair Value	5,016	37,333
Commercial paper
Marketable securities:
Amortized Cost	67,159	85,202
Fair Value	67,159	85,202
Asset-backed securities
Marketable securities:
Amortized Cost	21,745	16,708
Gross Unrealized Loss	(8)	(13)
Fair Value	21,737	16,695
U.S. government agency debt securities
Marketable securities:
Amortized Cost	17,044	49,511
Gross Unrealized Loss	(3)	(89)
Fair Value	$ 17,041	$ 49,422

Property and Equipment, Net (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Property and Equipment, Net
Property and equipment, gross	$ 5,951	$ 2,639
Accumulated depreciation	(1,671)	(480)
Property and equipment, net	4,280	2,159
Depreciation	1,248	370	$ 120
Computer equipment
Property and Equipment, Net
Property and equipment, gross	1,292	650
Fleet vehicles
Property and Equipment, Net
Property and equipment, gross	2,131
Manufacturing equipment
Property and Equipment, Net
Property and equipment, gross	604	511
Lab equipment
Property and Equipment, Net
Property and equipment, gross	1,068	721
Furniture and fixtures
Property and Equipment, Net
Property and equipment, gross	524	327
Leasehold improvements
Property and Equipment, Net
Property and equipment, gross	$ 332	$ 430

Intangible Assets (Details) - USD ($) $ in Thousands	12 Months Ended
Intangible Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Definite-lived intangible assets
Gross Cost	$ 66,980	$ 751
Accumulated Amortization	658	31
Intangible assets, net
Gross cost	73,609	7,380
IPR&D
Indefinite-lived intangible assets
Gross cost	$ 6,629	6,629
RHOFADE product rights
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items]
Remaining life	9 years 10 months 24 days
Definite-lived intangible assets
Gross Cost	$ 66,229
Accumulated Amortization	$ 552
Other intangible assets
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items]
Remaining life	8 years 7 months 6 days
Definite-lived intangible assets
Gross Cost	$ 751	751
Accumulated Amortization	$ 106	$ 31

Intangible Assets - Future Amortization Expenses (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense	$ 627	$ 31	$ 0
Future amortization expenses
2019	6,698
2020	6,698
2021	6,698
2022	6,698
2023	6,698
Thereafter	32,832
Total	$ 66,322

Accrued Expenses (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Accrued Expenses
Employee compensation expenses	$ 5,293	$ 3,010
Sales incentives and rebates	2,650
Marketing expenses	453	39
Research and development expenses	1,437	627
Capital leases, current portion	601	142
Professional fees	1,123	108
Payable to NST		590
Other	1,030	424
Total accrued expenses	$ 12,587	$ 4,940

Debt (Details) - Secured Debt - USD ($) $ in Thousands		1 Months Ended
Debt (Details) - Secured Debt - USD ($) $ in Thousands	Oct. 15, 2018	Oct. 31, 2018
Debt Instrument [Line Items]
Loan, maximum borrowing capacity	$ 65,000
Proceeds from secured debt		$ 30,000
Loan, capacity not available due to restrictions	$ 35,000
Loan, unused capacity fee percentage	1.00%
Number of consecutive monthly payments	24 months
Final payment fee percentage	5.75%
Part prepayment period	3 months
Minimum
Debt Instrument [Line Items]
Annual interest rate	8.35%
Part prepayment amount	$ 2,000
Prepayment prior to the first anniversary of the Funding Date
Debt Instrument [Line Items]
Prepayment fee percentage	3.00%
Prepayment between the first and second anniversaries of the Funding Date
Debt Instrument [Line Items]
Prepayment fee percentage	2.00%
Prepayment after the second anniversary of the Funding Date but before October 1, 2023
Debt Instrument [Line Items]
Prepayment fee percentage	1.00%
London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Basis spread over LIBOR	6.25%

Stockholders' Equity (Details) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2018 USD ($) Vote $ / shares shares	Dec. 31, 2017 USD ($) $ / shares shares	Dec. 31, 2016 USD ($)
Stockholders' Equity
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares outstanding	0	0
Common stock, shares authorized	100,000,000	100,000,000
Common stock, par value (in dollars per share) \| $ / shares	$ 0.00001	$ 0.00001
Number of votes per share \| Vote	1
Dividends declared \| $	$ 0	$ 0	$ 0

Stockholders' Equity - Other Offerings (Details) - USD ($) $ / shares in Units, $ in Thousands			1 Months Ended			12 Months Ended
	Nov. 23, 2016	Nov. 17, 2016	Oct. 31, 2018	Aug. 31, 2017	Jun. 30, 2016	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Subsidiary, Sale of Stock [Line Items]
Number of shares issued				3,747,602
Common stock, shares outstanding						41,210,725	30,856,505
Issuance price (in dollars per share)				$ 23.02
Aggregate gross proceeds				$ 86,270
Underwriters' discounts and commissions				5,176
Expenses related to stock issuance				176
Offering proceeds, net of discounts, commissions and expenses				$ 80,918
Exercise of Over-Allotment Option
Subsidiary, Sale of Stock [Line Items]
Number of shares issued		600,000
Issuance price (in dollars per share)		$ 22.75
Aggregate gross proceeds		$ 13,650
Private Placement
Subsidiary, Sale of Stock [Line Items]
Number of shares issued					1,081,082
Issuance price (in dollars per share)					$ 18.50
Aggregate gross proceeds					$ 20,000
Expenses related to stock issuance					153
Placement fees					1,300
Offering proceeds, net of discounts, commissions and expenses					$ 18,547
Net offering proceeds								$ 18,547
Private Placement \| Common Stock
Subsidiary, Sale of Stock [Line Items]
Number of shares issued								1,081,082
Follow On Public Offering
Subsidiary, Sale of Stock [Line Items]
Number of shares issued	4,000,000
Issuance price (in dollars per share)	$ 22.75
Aggregate gross proceeds	$ 91,000
Underwriters' discounts and commissions	6,279
Expenses related to stock issuance	188
Offering proceeds, net of discounts, commissions and expenses	$ 98,158
Net offering proceeds						$ 100,205	$ 80,918	$ 98,158
Follow On Public Offering \| Common Stock
Subsidiary, Sale of Stock [Line Items]
Number of shares issued						9,941,750	3,747,602	4,600,000
At The Market Offering
Subsidiary, Sale of Stock [Line Items]
Number of shares issued						635,000
Issuance price (in dollars per share)						$ 31.50
Aggregate gross proceeds						$ 20,003
Expenses related to stock issuance						$ 691
Net offering proceeds							$ 19,311
At The Market Offering \| Common Stock
Subsidiary, Sale of Stock [Line Items]
Number of shares issued							635,000
Public Offering October 2018
Subsidiary, Sale of Stock [Line Items]
Number of shares issued			9,941,750
Issuance price (in dollars per share)			$ 10.75
Aggregate gross proceeds			$ 106,874
Underwriters' discounts and commissions			6,412
Expenses related to stock issuance			257
Net offering proceeds			$ 100,205

Stock-Based Awards (Details) - shares		12 Months Ended			44 Months Ended
Stock-Based Awards (Details) - shares	Jan. 01, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Sep. 14, 2015	Jul. 31, 2017	Dec. 31, 2015	Sep. 30, 2015
Stock-based awards
Options granted (in shares)		1,459,800	790,100	1,083,919
Options outstanding		4,282,081	3,328,757	2,702,350			1,738,524
Stock Option Valuation
Risk-free interest rate (as a percent)		2.66%	1.93%	2.06%
Expected term (in years)		6 years 3 months 18 days	6 years 2 months 12 days	6 years 6 months
Expected volatility (as a percent)		96.78%	94.19%	94.86%
Expected dividend yield (as a percent)		0.00%	0.00%	0.00%
2017 Inducement Plan
Stock-based awards
Number of shares authorized						1,000,000
2015 Equity Incentive Plan
Stock-based awards
Number of shares authorized								1,643,872
Number of shares available for grant		1,616,362
Percentage increase to shares available for grant from common outstanding as of preceding December 31 (as a percent)		4.00%
Additional shares available	1,648,429
2012 Equity Compensation Plan
Stock-based awards
Number of shares available for grant		0
Options granted (in shares)					1,140,524
Options outstanding		948,761	984,720
Vesting period (in years)		4 years
Term of award (in years)		10 years

Stock-Based Awards - Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Options, Number of Shares
Number of Shares, beginning balance	3,328,757	2,702,350	1,738,524
Number of Shares, Granted	1,459,800	790,100	1,083,919
Number of Shares, Exercised	(59,450)	(36,738)	(51,980)
Number of Shares, Forfeited and cancelled	(447,026)	(126,955)	(68,113)
Number of Shares, ending balance	4,282,081	3,328,757	2,702,350	1,738,524
Number of Shares, Options vested and expected to vest	4,282,081
Number of Shares, Options exercisable	1,908,561
Options, Weighted Average Exercise Price
Weighted Average Exercise Price, beginning balance (in dollars per share)	$ 20.69	$ 18.94	$ 13.23
Weighted Average Exercise Price, Granted (in dollars per share)	20.97	26.21	27.12
Weighted Average Exercise Price, Exercised (in dollars per share)	9.70	6.40
Weighted Average Exercise Price, Forfeited and cancelled (in dollars per share)	24.62	22.05
Weighted Average Exercise Price, ending balance (in dollars per share)	20.53	$ 20.69	$ 18.94	$ 13.23
Weighted Average Exercise Price, Options vested and expected to vest (in dollars per share)	20.53
Weighted Average Exercise Price, Options exercisable (in dollars per share)	$ 17.53
Options, Weighted Average Remaining Contractual Term
Weighted Average Remaining Contractual Term (in years)	7 years 10 months 28 days	8 years 3 months 11 days	9 years 18 days	9 years 6 months 4 days
Weighted Average Remaining Contractual Term, Options vested and expected to vest (in years)	7 years 10 months 28 days
Weighted Average Remaining Contractual Term, Options exercisable (in years)	7 years 7 days
Aggregate Intrinsic Value
Aggregate Intrinsic Value	$ 2,404	$ 19,812	$ 24,434	$ 24,722
Aggregate Intrinsic Value, Options vested and expected to vest	2,404
Aggregate Intrinsic Value, Options exercisable	$ 2,404
Weighted average grant-date fair value of stock options granted (in dollars per share)	$ 16.55	$ 20.28	$ 21.16

Stock-Based Awards - RSUs (Details) - Restricted Stock Unit Awards - $ / shares	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
RSU, Number of Units
Units outstanding, beginning of period	283,553	219,614	53,800
Granted	552,060	117,883	180,764
Vested	(140,497)	(40,705)	(12,950)
Forfeited and cancelled	(68,709)	(13,239)	(2,000)
Units outstanding, end of period	626,407	283,553	219,614
RSU, Weighted Average Grant Date Fair Value Per Unit
Weighted average grant date fair value, beginning balance (in dollars per share)	$ 27.02	$ 27.43	$ 28.68
Granted, estimated grant-date fair value (in dollars per share)	19.03	26.27	27.16
Weighted average grant date fair value, vested (in dollars per share)	27.22	26.89	28.68
Forfeited and cancelled, estimated grant date fair value (in dollars per share)	23.65	27.53	28.68
Weighted average grant date fair value, ending balance (in dollars per share)	$ 20.30	$ 27.02	$ 27.43

Stock-Based Awards - Compensation (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Stock-based compensation expense
Stock-based compensation expense	$ 20,055	$ 14,430	$ 6,104
Unrecognized stock-based compensation cost, options	35,909
Unrecognized compensation, RSUs	9,409
Cost of revenue.
Stock-based compensation expense
Stock-based compensation expense	766	211
Research and development
Stock-based compensation expense
Stock-based compensation expense	6,480	5,471	2,291
Sales and marketing
Stock-based compensation expense
Stock-based compensation expense	3,492	1,851
General and administrative
Stock-based compensation expense
Stock-based compensation expense	$ 9,317	$ 6,897	$ 3,813
Options to Purchase Common Stock
Stock-based compensation expense
Weighted average recognition period unrecognized stock-based compensation cost (in years)	2 years 6 months 15 days
Restricted Stock Unit Awards
Stock-based compensation expense
Weighted average recognition period unrecognized stock-based compensation cost (in years)	2 years 10 months 24 days

Net Loss per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Numerator:
Net loss	$ (38,551)	$ (32,740)	$ (31,218)	$ (30,229)	$ (22,934)	$ (18,192)	$ (14,838)	$ (12,559)	$ (132,738)	$ (68,523)	$ (48,079)
Denominator:
Weighted average shares of common stock outstanding (in shares)									32,909,762	28,102,386	21,415,733
Net loss per share attributable to common stockholders, basic and diluted (in dollars per share)	$ (0.99)	$ (1.06)	$ (1.01)	$ (0.98)	$ (0.74)	$ (0.63)	$ (0.56)	$ (0.48)	$ (4.03)	$ (2.44)	$ (2.25)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References + Details

Net Loss per Share - Anti-dilution (Details) - shares	12 Months Ended
Net Loss per Share - Anti-dilution (Details) - shares	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potential common shares excluded from the calculation of diluted net loss per share attributable to common stockholders	4,908,488	3,612,310	1,792,324
Options to Purchase Common Stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potential common shares excluded from the calculation of diluted net loss per share attributable to common stockholders	4,282,081	3,328,757	1,738,524
Restricted Stock Unit Awards
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potential common shares excluded from the calculation of diluted net loss per share attributable to common stockholders	626,407	283,553	53,800

Commitments and Contingencies (Details) $ in Thousands	12 Months Ended
Commitments and Contingencies (Details) $ in Thousands	Dec. 31, 2018 USD ($) ft² item	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)
Agreements for Office Space
Area leased from third party \| ft²	33,019
Rent expense under operating leases	$ 886	$ 946	$ 254
Number of capital lease arrangements \| item	2
Capital lease term	4 years
Future minimum lease payments
2019	$ 1,242
2020	1,156
2021	1,054
2022	791
2023	531
Total	4,774
Stock Purchase Agreement
Supply Agreement
Amount of required annual payment under the contract	$ 100

Income Taxes - Tax Cuts and Jobs Act (Details) - USD ($) $ in Thousands		12 Months Ended
	Dec. 22, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Effect Of Tax Cuts And Jobs Act Of 2017 [Abstract]
Date accounting was completed			Dec. 31, 2017
Federal statutory income tax rate	35.00%	21.00%	34.00%	34.00%
Tax expense attributable to revaluation of deferred tax liabilities, net			$ 18,507
Reduction in valuation allowance			20,344
Tax benefit attributable to revaluation of deferred tax liabilities, net, after effect on valuation allowance			1,837
Tax impact of one-time transition tax			$ 0

Income Taxes - Rate Reconciliation (Details) - USD ($) $ in Thousands		12 Months Ended
	Dec. 22, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Income Taxes
Federal income tax benefit		$ 0	$ 0	$ 0
State income tax benefit		0	0	0
Loss before income taxes
U.S. operations		(132,473)	(63,665)	(40,597)
Foreign operations		(265)	(6,688)	(7,482)
Loss before income taxes		$ (132,738)	$ (70,353)	$ (48,079)
Effective Income Tax Rate Reconciliation, Percent [Abstract]
Federal statutory income tax rate	(35.00%)	(21.00%)	(34.00%)	(34.00%)
State taxes, net of federal benefit		(3.50%)	(9.70%)	(5.20%)
Research and development tax credits		(2.10%)	(1.10%)	(2.00%)
Permanent differences		0.80%	0.40%	1.80%
Foreign rate differential			1.70%	3.20%
Change in deferred tax asset valuation allowance		25.70%	17.40%	36.20%
Impact of U.S. tax reform			(22.70%)
Effective income tax rate		(0.10%)	(2.60%)

Income Taxes - Deferred Assets and Liabilities, CFDs (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Components of net deferred tax assets
Net operating loss carryforwards	$ 57,426	$ 26,566
Capitalized start-up costs	6,954	9,940
Research and development tax credit carryforwards	5,038	2,296
Capitalized research and development expenses	2,843	3,595
Stock-based compensation expenses	9,037	6,220
Accrued compensation	923
Inventory	271
Property and equipment		86
Other	683	280
Total deferred tax assets	83,175	48,983
Property and equipment	(674)
Intangible asset	(1,735)	(1,843)
Section 481(a) adjustment		(498)
Other	(330)	(313)
Total deferred tax liabilities	(2,739)	(2,654)
Valuation allowance	(80,985)	(46,878)	$ (30,726)	$ (13,286)
Deferred tax liabilities, net	(549)	$ (549)
United Kingdom Tax Authority
Components of net deferred tax assets
Operating loss carryforwards	1,513
Federal
Components of net deferred tax assets
Operating loss carryforwards	199,507
Federal \| Research Tax Credit Carryforward [Member]
Components of net deferred tax assets
Tax credit carryforward	4,944
State
Components of net deferred tax assets
Operating loss carryforwards	212,430
State \| Research Tax Credit Carryforward [Member]
Components of net deferred tax assets
Tax credit carryforward	$ 118

Income Taxes - Valuation Allowance and Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Changes in valuation allowance for deferred tax assets
Valuation allowance at beginning of year	$ (46,878)	$ (30,726)	$ (13,286)
Increases resulting from the acquisition of Confluence		(4,176)
Increases recorded to income tax provision	(34,107)	(11,976)	(17,440)
Valuation allowance as of end of year	(80,985)	(46,878)	(30,726)	$ (13,286)
Unrecognized Tax Benefits
Unrecognized tax benefits at of beginning of year			(4,400)
Unrecognized tax benefits at beginning of year	43
Increases related to prior year tax provisions		43
Decreases related to prior year tax provisions	(43)
Decreases related to prior year tax provisions, adjustment			4,400
Unrecognized tax benefits recorded, prior period				$ (4,400)
Unrecognized tax benefits as of end of year		43
Unrecognized tax benefits that would impact effective tax rate	0	36
Unrecognized tax benefits, recognized expense (benefit) related to interest and penalties	$ 0	$ 3	$ 0

Related Party Transactions (Details) $ in Thousands	1 Months Ended	12 Months Ended
Related Party Transactions (Details) $ in Thousands	Nov. 30, 2017 USD ($)	Dec. 31, 2018 USD ($) item	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)
NST, LLC
Related Party Transactions
Number of executive officers affiliated with counterparty \| item		3
Board of Directors Chairman [Member] \| Direct sublease agreement
Related Party Transactions
Lease termination charge	$ (590)		$ 506
Expenses incurred under related party transactions		$ 570	318	$ 253
Board of Directors Chairman [Member] \| Services agreement
Related Party Transactions
Expenses incurred under related party transactions			225	569
Other revenue earned from related party transactions			(17)	(153)
Net expenses (revenues) from related party transactions			208	416
Payments to related party			300	325
Amount due to related party		$ 0	570
Board of Directors Chairman [Member] \| Services agreement \| General and administrative
Related Party Transactions
Expenses incurred under related party transactions			225	323
Other revenue earned from related party transactions			(17)	(56)
Net expenses (revenues) from related party transactions			$ 208	267
Board of Directors Chairman [Member] \| Services agreement \| Research and development
Related Party Transactions
Expenses incurred under related party transactions				246
Other revenue earned from related party transactions				(97)
Net expenses (revenues) from related party transactions				$ 149

Agreements Related to Intellectual Property (Details) $ in Thousands	1 Months Ended		12 Months Ended
	Mar. 31, 2016 USD ($) item shares	Aug. 31, 2012	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($) item	Dec. 31, 2015 USD ($)
Assignment Agreement and Finder's Services Agreement \| A-101 45% Topical Solution
Agreements Related to Intellectual Property
Term of agreement, minimum		15 years
Finder's Services Agreement \| Achievement Of Dosing Of First Subject With A101 \| A-101 45% Topical Solution
Agreements Related to Intellectual Property
Milestone payment					$ 300
Finder's Services Agreement \| Achievement Of Specified Commercial Milestones
Agreements Related to Intellectual Property
Aggregate royalty payments			$ 112	$ 0
Finder's Services Agreement \| Achievement Of Specified Commercial Milestones \| A-101 45% Topical Solution
Agreements Related to Intellectual Property
Milestone payment			1,500
Potential future milestone payments			3,000
Finder's Services Agreement \| Achievement Of Specified Regulatory Milestones \| A-101 45% Topical Solution
Agreements Related to Intellectual Property
Milestone payment				$ 1,000
License and Collaboration Agreement
Agreements Related to Intellectual Property
Upfront payment revenue			$ 1,000
License and Collaboration Agreement \| JAK inhibitors
Agreements Related to Intellectual Property
Upfront payment made						$ 8,000
Period from first commercial product sale that royalties are owed (in years)			10 years
License and Collaboration Agreement \| Achievement Of Specified Commercial Milestones
Agreements Related to Intellectual Property
Potential milestones receivable			$ 1,750
License and Collaboration Agreement \| Achievement Of Pre Commercialization Milestones \| JAK inhibitors
Agreements Related to Intellectual Property
Potential future milestone payments			80,000
License and Collaboration Agreement \| Achievement Of Development Milestones
Agreements Related to Intellectual Property
Milestone payment revenue			500
Potential milestones receivable			500
License and Collaboration Agreement \| Achievement Of Development Milestones \| JAK inhibitors
Agreements Related to Intellectual Property
Potential future milestone payments			$ 10,000
Stock Purchase Agreement
Agreements Related to Intellectual Property
Term of agreement, minimum			10 years
Upfront payment made	$ 600
Entity stock issued in stock purchase \| shares	159,420
Amount of required annual payment under the contract			$ 100
Fair value of common stock issued					$ 2,355
Number of annual payments \| item					6
Stock Purchase Agreement \| Achievement Of Specified Commercial Milestones
Agreements Related to Intellectual Property
Potential future milestone payments	$ 22,500
Stock Purchase Agreement \| Achievement Of Pre Commercialization Milestones
Agreements Related to Intellectual Property
Number of products \| item	3
Potential future milestone payments	$ 18,000
License Agreement
Agreements Related to Intellectual Property
Term of agreement, minimum			10 years
Annual maintenance fee			$ 10
License Agreement \| Achievement Of Specified Commercial Milestones
Agreements Related to Intellectual Property
Potential future milestone payments			$ 11,600

Segment Information (Details) $ in Thousands	3 Months Ended						12 Months Ended
Segment Information (Details) $ in Thousands	Dec. 31, 2018 USD ($)	Sep. 30, 2018 USD ($)	Jun. 30, 2018 USD ($)	Mar. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Sep. 30, 2017 USD ($)	Dec. 31, 2018 USD ($) item	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)
Segment Reporting Information [Line Items]
Number of reportable segments \| item							2
Revenue, net	$ 3,669	$ 1,628	$ 3,676	$ 1,118	$ 999	$ 684	$ 10,091	$ 1,683
Cost of revenue							6,850	1,207
Research and development							63,009	39,790	$ 33,476
Sales and marketing							47,997	13,769	3,295
General and administrative							27,649	19,340	11,796
Loss from operations							(135,414)	(72,423)	(48,567)
Dermatology Therapeutics Segment
Segment Reporting Information [Line Items]
Revenue, net							5,441
Cost of revenue							2,522
Research and development							64,423	39,790	33,476
Sales and marketing							47,957	13,769	3,295
General and administrative							30	222	155
Loss from operations							(109,491)	(53,781)	(36,926)
Contract Research Segment
Segment Reporting Information [Line Items]
Revenue, net							13,134	3,202
Cost of revenue							11,398	2,726
Sales and marketing							40
General and administrative							2,141	673
Loss from operations							(445)	(197)
Corporate and Other
Segment Reporting Information [Line Items]
Revenue, net							(8,484)	(1,519)
Cost of revenue							(7,070)	(1,519)
Research and development							(1,414)
General and administrative							25,478	18,445	11,641
Loss from operations							(25,478)	(18,445)	$ (11,641)
Intersegment Eliminations \| Contract Research Segment
Segment Reporting Information [Line Items]
Revenue, net							$ (8,484)	$ (1,519)

Quarterly Financial Information (unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Quarterly Financial Information (unaudited)
Revenue, net	$ 3,669	$ 1,628	$ 3,676	$ 1,118	$ 999	$ 684			$ 10,091	$ 1,683
Gross profit	160	435	2,495	151	245	231			3,241	476
Operating expenses	39,198	33,885	34,473	31,099	25,687	18,987	$ 15,295	$ 12,930	138,655	72,899	$ 48,567
Other income, net	487	710	760	719	678	564	457	371
Net loss	$ (38,551)	$ (32,740)	$ (31,218)	$ (30,229)	$ (22,934)	$ (18,192)	$ (14,838)	$ (12,559)	$ (132,738)	$ (68,523)	$ (48,079)
Net loss per share, basic and diluted	$ (0.99)	$ (1.06)	$ (1.01)	$ (0.98)	$ (0.74)	$ (0.63)	$ (0.56)	$ (0.48)	$ (4.03)	$ (2.44)	$ (2.25)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References + Details

Summary of Significant Accounting Policies - Segments (Details)	12 Months Ended
	Dec. 31, 2018 item
Summary of Significant Accounting Policies
Number of operating segments	2

Retirement Savings Plan (Details) - USD ($) $ in Thousands	12 Months Ended
Retirement Savings Plan (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Retirement Savings Plan
Employer match of employee contributions (as a percent)	100.00%
Employee earnings subject to employer match (as a percent)	4.00%
Company contributions	$ 662	$ 270	$ 176