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Document and Entity Information - shares	9 Months Ended
Sep. 30, 2013	Nov. 08, 2013
Document and Entity Information
Entity Registrant Name	Ophthotech Corp.
Entity Central Index Key	0001410939
Document Type	10-Q
Document Period End Date	Sep. 30, 2013
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	No
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		31,373,489
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q3

Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2013	Dec. 31, 2012
Current assets
Cash and cash equivalents	$ 236,079	$ 4,304
Prepaid expenses and other current assets	2,096	44
Other Assets		331
Security deposits	158	158
Total current assets	238,333	4,837
Property, plant and equipment, net	32	42
Other long term assets	11
Total assets	238,376	4,879
Current liabilities
Accrued clinical drug supplies and trial costs	3,477	1,013
Accounts payable and accrued expenses	4,431	1,391
Notes payable		11,040
Warrant liability		966
Total current liabilities	7,908	14,410
Royalty purchase liability	41,667
Total liabilities	49,575	14,410
Stockholders' equity (deficit)
Common stock - $0.001 par value, 200,000,000 shares authorized, 31,250,817 shares issued and outstanding at September 30, 2013; 155,864,851 shares authorized, 1,469,798 shares issued and outstanding at December 31, 2012	31	1
Additional paid-in capital	351,431
Deficit accumulated during development stage	(162,661)	(126,471)
Total stockholders' equity (deficit)	188,801	(123,470)
Total liabilities and stockholders' equity (deficit)	238,376	4,879
Convertible and redeemable preferred stock
Preferred Stock, Convertible and Redeemable:
Total Preferred Stock, Convertible and Redeemable		113,939
Series A
Preferred Stock, Convertible and Redeemable:
Total Preferred Stock, Convertible and Redeemable		69,471
Series A-1
Preferred Stock, Convertible and Redeemable:
Total Preferred Stock, Convertible and Redeemable		8,460
Series B
Preferred Stock, Convertible and Redeemable:
Total Preferred Stock, Convertible and Redeemable		35,456
Series B-1
Preferred Stock, Convertible and Redeemable:
Total Preferred Stock, Convertible and Redeemable		552
Junior Series A Convertible Preferred Stock
Stockholders' equity (deficit)
Preferred Stock		$ 3,000
Preferred stock
Stockholders' equity (deficit)
Preferred Stock

Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2013	Dec. 31, 2012
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	200,000,000	155,864,851
Common stock, shares issued	31,250,817	1,469,798
Common stock, shares outstanding	31,250,817	1,469,798
Series A
Preferred Stock, Convertible and Redeemable, par value (in dollars per share)		$ 0.001
Preferred Stock, Convertible and Redeemable, shares authorized		73,094,000
Preferred Stock, Convertible and Redeemable, shares issued		51,790,000
Preferred Stock, Convertible and Redeemable, shares outstanding		51,790,000
Series A-1
Preferred Stock, Convertible and Redeemable, par value (in dollars per share)		$ 0.001
Preferred Stock, Convertible and Redeemable, shares authorized		18,480,000
Preferred Stock, Convertible and Redeemable, shares issued		6,000,000
Preferred Stock, Convertible and Redeemable, shares outstanding		6,000,000
Series B
Preferred Stock, Convertible and Redeemable, par value (in dollars per share)		$ 0.001
Preferred Stock, Convertible and Redeemable, shares authorized		42,320,200
Preferred Stock, Convertible and Redeemable, shares issued		30,000,000
Preferred Stock, Convertible and Redeemable, shares outstanding		30,000,000
Series B-1
Preferred Stock, Convertible and Redeemable, par value (in dollars per share)		$ 0.001
Preferred Stock, Convertible and Redeemable, shares authorized		700,000
Preferred Stock, Convertible and Redeemable, shares issued		500,000
Preferred Stock, Convertible and Redeemable, shares outstanding		500,000
Junior Series A Convertible Preferred Stock
Preferred stock, par value (in dollars per share)		$ 0.001
Preferred stock, shares authorized		3,000,000
Preferred stock, shares issued		3,000,000
Preferred stock, shares outstanding		3,000,000
Preferred Stock
Preferred stock, par value (in dollars per share)	$ 0.001
Preferred stock, shares authorized	5,000,000
Preferred stock, shares issued	0
Preferred stock, shares outstanding	0

Statements of Operations - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		81 Months Ended
Statements of Operations - USD ($) $ in Thousands	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013
Costs and expenses:
Research and development	$ 11,101	$ 1,595	$ 17,836	$ 4,794	$ 92,727
General and administrative	4,166	2,259	9,145	5,341	36,494
Total costs and expenses	15,267	3,854	26,981	10,135	129,221
Loss from operations	(15,267)	(3,854)	(26,981)	(10,135)	(129,221)
Interest expense		(230)	(1,454)	(256)	(1,964)
Interest and other income					481
Gain (loss) on extinguishment of debt	105		(1,091)		(1,091)
Other loss	(970)	(69)	(1,231)	(340)	(1,602)
Change in fair value related to investor rights liability					683
Net loss before income tax benefit	(16,132)	(4,153)	(30,757)	(10,731)	(132,714)
Income tax benefit					1,327
Net loss	(16,132)	(4,153)	(30,757)	(10,731)	(131,387)
Add: accretion of preferred stock dividends	(2,292)	(1,775)	(5,891)	(5,288)	(33,046)
Net loss attributable to common stockholders	$ (18,424)	$ (5,928)	$ (36,648)	$ (16,019)	$ (164,433)
Net loss attributable to common stockholders per share -basic and diluted (in dollars per share)	$ (10.26)	$ (4.07)	$ (23.21)	$ (11.07)
Weighted average common shares outstanding:
Basic and diluted (in shares)	1,795	1,455	1,579	1,447

Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended		81 Months Ended
Statements of Cash Flows - USD ($) $ in Thousands	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013
Operating Activities
Net loss	$ (30,757)	$ (10,731)	$ (131,387)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	14	24	169
Amortization of debt issuance costs	88	24	135
Accretion of debt discount	87	30	146
Non-cash change in fair value of warrant liability	1,231	332	1,612
Non-cash change in fair value of investor rights liability			(683)
Loss on extinguishment of debt	1,091		1,091
Share-based compensation	1,607	283	2,797
Accrued interest expense converted to Series A Preferred Stock			2
Changes in operating assets and liabilities:
Prepaid expense and other current assets	(2,052)	27	(2,107)
Other receivables		1,036
Security deposits	(11)		(170)
Accrued clinical drug supplies and trial costs	2,464	(1,039)	3,477
Accounts payable and accrued expenses	3,040	787	4,431
Deferred rent		(22)
Net cash used in operating activities	(23,198)	(9,249)	(110,987)
Investing Activities
Purchase of marketable securities			(4,238)
Maturities of marketable securities			4,250
Purchase of property, equipment	(5)		(201)
Net cash used in investing activities	(5)		(189)
Financing Activities
Payment of debt issuance costs	(43)	(263)	(421)
Proceeds from issuance of common stock		2	124
Proceeds from initial public offering, net	175,555		175,555
Proceeds from issuance of notes payable, net			210
(Repayment of) proceeds from issuance of venture debt facility, net	(11,900)	7,460	(512)
Proceeds from issuance of preferred stock, net	49,699		130,632
Proceeds from royalty purchase agreement	41,667		41,667
Net cash provided by financing activities	254,978	7,199	347,255
Net change in cash and cash equivalents	231,775	(2,050)	236,079
Cash and cash equivalents
Beginning of period	4,304	6,396
End of period	236,079	4,346	236,079
Supplemental disclosures of cash flow information
Conversion of preferred stock to common stock upon completion of IPO	174,310		174,310
Accreted dividends on Series A, Series A-1, Series of B, B-1 and Series C Preferred Stock	$ 5,891	$ 5,288	33,046
Notes payable and accrued interest converted to Series A Preferred Stock			212
Series A-1, Series B-1 and Junior Preferred Stock
Adjustments to reconcile net loss to net cash used in operating activities:
Preferred Stock issued for acquired technology and licenses			$ 9,500

Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2013

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited financial information as of September 30, 2013, for the three and nine months ended September 30, 2013 and 2012, and for the period from January 5, 2007 (Inception) to September 30, 2013 has been prepared by the Company, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. The December 31, 2012 balance sheet was derived from the Company’s audited financial statements. These interim financial statements should be read in conjunction with the 2012 audited annual financial statements and notes thereto in the final prospectus dated September 25, 2013 related to the Company’s initial public offering.

In the opinion of management, the unaudited financial information as of September 30, 2013, for the three and nine months ended September 30, 2013 and 2012, and for the period from January 5, 2007 (Inception) to September 30, 2013, reflects all adjustments, which are normal recurring adjustments, necessary to present a fair statement of financial position, results or operations and cash flows. The results of operations for the three and nine months ended September 30, 2013 and 2012, are not necessarily indicative of the operating results for the full fiscal year or any future period.

Use of Estimates

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

Cash and Cash Equivalents

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

Concentration of Credit Risk

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

Foreign Currency Translation

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

Financial Instruments

The carrying amounts of the Company’s financial instruments, which include cash and cash equivalents, accounts payable and accrued expenses approximate their respective fair value due to their short maturities.

Property and Equipment

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

Research and Development

Research and development expenses consist of costs associated with the development and clinical testing of Fovista, an anti-PDGF aptamer the Company is developing for use in combination with anti-VEGF drugs for treatment of wet age-related macular degeneration, or wet AMD, and the Company’s other product candidates. Research and development expenses consist of:

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

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

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

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

The Company anticipates that its research and development expenses will increase substantially as compared to prior periods in connection with initiating and conducting its pivotal Phase 3 clinical program for Fovista and if such trials are successful, seeking marketing approval for Fovista.

The Company does not currently utilize a formal time allocation system to capture expenses on a project-by-project basis because it records expenses by functional department. Accordingly, the Company does not allocate expenses to individual projects or product candidates, although it does allocate some portion of its research and development expenses by functional area and by compound.

Income Taxes

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

Share-Based Compensation

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

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

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

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

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

	Three months ended September 30,				Nine months ended September 30,
	2013		2012		2013		2012

Research and development	$	752	$	96	$	1,052	$	182
General and administrative	395		54		555		101
Total	$	1,147	$	150	$	1,607	$	283

The Company had no shares of unvested restricted common stock granted to employees at September 30, 2013 or at December 31, 2012, respectively.

Reclassification

Certain amounts in prior periods have been reclassified to conform to the current year presentation. Such reclassifications did not have a material effect on the Company’s financial condition or results of operations as previously reported.

JOBS Act

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

Net Loss Per Common Share

9 Months Ended

Sep. 30, 2013

Net Loss Per Common Share

Net Loss Per Common Share

4. Net Loss Per Common Share

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

	Three months ended September 30,						Nine months ended September 30,
	2013			2012			2013			2012
Basic and diluted net loss per common share calculation:
Net loss	$	(16,132	)	$	(4,153	)	$	(30,757	)	$	(10,731	)
Accretion of preferred stock dividends	(2,292		)	(1,775		)	(5,891		)	(5,288		)
Net loss attributable to common shareholders	$	(18,424	)	$	(5,928	)	$	(36,648	)	$	(16,019	)
Weighted average common shares outstanding	1,795			1,455			1,579			1,447
Net loss per share of common stock - basic and diluted	$	(10.26	)	$	(4.07	)	$	(23.21	)	$	(11.07	)

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

	Three months ended September 30,		Nine months ended September 30,
	2013	2012	2013	2012

Redeemable convertible preferred stock	—	16,513	—	16,513
Stock options outstanding	2,620	1,301	2,620	1,301
Warrants	101	78	101	78
Total	2,721	17,892	2,721	17,892

Fair Value Measurements

9 Months Ended

Sep. 30, 2013

Fair Value Measurements

Fair Value Measurements

5. Fair Value Measurements

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

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

· Level 1—inputs to the valuation methodology are quoted prices (unadjusted) for an identical asset or liability in an active market.

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

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

The following table presents, for each of the fair value hierarchy levels required under ASC 820, the Company’s assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2013:

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

Assets
Investments in U.S. Treasury money market funds*	$	234,843	$	—	$	—
Liabilities
Series A Warrant Liability	$	—	$	—	$	—
Series B Warrant Liabilty	$	—	$	—	$	—

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

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

Assets
Investments in money market funds*	$	524	$	—	$	—
Liabilities
Series A Warrant Liability	$	—	$	—	$	523
Series B Warrant Liabilty	$	—	$	—	$	443

* Investments in money markets funds are reflected in cash and cash equivalents in the accompanying Balance Sheets.

Level 3 Valuation

The warrant liability was recorded in its own line item on the Company’s Balance Sheets. The warrant liability was marked-to-market each reporting period with the change in fair value recorded to other loss in the Statement of Operations. The fair value of the warrant liability was estimated using a hybrid method between a probability-weighted expected return method, or PWERM, model and an option pricing model, which includes variables such as the expected volatility based on guideline public companies, the preferred stock value, and the estimated time to a liquidity event.

The significant assumptions used in preparing the option pricing model for valuing the Company’s warrants for the Series A preferred shares as of December 31, 2012, include (i) volatility (47.2% – 85.3%), (ii) risk free interest rate (0.05% – 0.62%), (iii) strike price ($0.01), (iv) fair value of Series A preferred shares ($1.22 – $4.34), (v) expected life (0.25 years to 4.5 years) and (vi) expected outcome probability weighting of three outcome scenarios: merger (65%); dissolution (20%) and an initial public offering (15%).

The significant assumptions used in preparing the option pricing model for valuing the Company’s warrants for the Series B preferred shares as of December 31, 2012, include (i) volatility (47.2% – 80.1%), (ii) risk free interest rate (0.05% – 1.68%), (iii) strike prices ($1.00 – $2.50), (iv) fair value of Series B preferred shares ($1.18 – $4.22), (v) expected life (0.25 years to 9.5 years) and (vi) expected outcome probability weighting of three outcome scenarios: merger (65%); dissolution (20%) and an initial public offering (15%).

The table presented below is a summary of changes in the fair value of the Company’s Level 3 valuation for the Series A and Series B warrant liabilities for the period ended September 30, 2013:

	Level 3
	Series A Warrant Liability			Series B Warrant Liability

Balance at December 31, 2012	523			443
Warrants issued in connection with venture debt facility	—			32
Change in fair value of warrant liability	379			852
Conversion of warrant liability to equity	(902		)	(1,327		)
Balance at September 30, 2013	$	—		$	—

Upon completion of the Company’s IPO on September 30, 2013, the underlying preferred stock was converted to common stock and the preferred stock warrants became exercisable for common stock. The fair value of the warrant liability was re-measured immediately prior to the completion of the Company’s IPO, and the fair value of the warrant liability at that time was reclassified to additional paid-in capital. Based on the initial public offering price of $22.00 per share, the fair value of the warrant liability that was reclassified to additional paid-in capital was $2.2 million. The Company recorded a related charge of approximately $1.0 million and $1.2 million as other loss in its results of operations for the three and nine months ended September 30, 2013, respectively.

Royalty Agreement and Series C Agreement	9 Months Ended
Royalty Agreement and Series C Agreement	Sep. 30, 2013
Royalty Agreement and Series C Agreement
Royalty Agreement and Series C Agreement	8. Royalty Agreement and Series C Agreement In May 2013, the Company entered into a Purchase and Sale Agreement (the “Purchase and Sale Agreement”) with Novo A/S, providing for the Company to sell, and Novo A/S to purchase, the right, title, and interest in a portion of the revenues from the sale of (a) Fovista, (b) Fovista-Related Products, and (c) Other Products (as defined in the Purchase and Sale Agreement), calculated as low to mid-single digit percentages of net sales. The Purchase and Sale Agreement provides for up to three separate purchases for a purchase price of $41.7 million each, at a first, second and third closing, for an aggregate purchase price of $125.0 million. In each purchase, Novo A/S acquires rights to a low single digit percentage of net sales. If all royalty interests under the Purchase and Sale Agreement are purchased, Novo A/S will have a right to receive royalties on net sales at a mid-single digit percentage. In May 2013, the Company received cash proceeds of $41.7 million for the royalty entitlement related to the first closing on the date of the Purchase and Sale Agreement. Receipt of cash proceeds for the second and third purchases is contingent upon certain triggers and conditions detailed in the Purchase and Sale Agreement, none of which have occurred prior to this filing. The royalty payment period covered by the Purchase and Sale Agreement begins on commercial launch and ends, on a product-by-product and country-by-country basis, on the latest to occur of (i) the 12th anniversary of the commercial launch, (ii) the expiration of certain patent rights and (iii) the expiration of the regulatory exclusivity for each product in each country. Under the terms of the Purchase and Sale Agreement, the Company is not required to reimburse or otherwise compensate Novo A/S through any means other than the agreed royalty entitlement. In addition, the Company does not, under the terms of the Purchase and Sale Agreement, have the right or obligation to prepay Novo A/S in connection with a change of control of the Company or otherwise. The proceeds from the first financing tranche under the Purchase and Sale Agreement were recorded as a liability on the Company’s Balance Sheet as of September 30, 2013, in accordance with ASC 730. Because there is a significant related party relationship between the Company and Novo A/S, the Company is treating its obligation to make royalty payments under the Purchase and Sale Agreement as an implicit obligation to repay the funds advanced by Novo A/S. As the Company makes royalty payments in accordance with the Purchase and Sale Agreement, it will reduce the liability balance. At the time that such royalty payments become probable and estimable, and if such amounts exceed the liability balance, the Company will impute interest accordingly on a prospective basis based on such estimates, which would result in a corresponding increase in the liability balance. The Purchase and Sale Agreement requires the establishment of a Joint Oversight Committee in the event that Novo A/S does not continue to have a representative on the Company’s board of directors. The Joint Oversight Committee would have responsibilities that include “discussion and review” of all matters related to Fovista research, development, regulatory approval and commercialization, but there is no provision either implicit or explicit that gives the Joint Oversight Committee or its members decision-making authority. Also in May 2013, the Company entered into a Series C Preferred Stock Purchase Agreement (the “Series C Agreement”) with certain of its existing investors for the sale and issuance, upon the satisfaction of certain conditions, of an aggregate of 20,000,000 shares of the Company’s Series C Preferred Stock at a price of $2.50 ($14.75 on a post-reverse stock split basis) per share. The Company issued 6,666,667 shares of Series C Preferred Stock at $2.50 ($14.75 on a post-reverse stock split basis) per share in a closing that occurred in May 2013, simultaneous with entry into the Series C Agreement. In August 2013, the Company amended the Series C Agreement to provide for the acceleration of the sale and issuance of the remaining 13,333,333 shares issuable thereunder, the purchase and sale of which closed on August 7, 2013 at $2.50 ($14.75 on a post-reverse stock split basis) per share for aggregate proceeds of $33.3 million. There are no further rights or obligations for the issuance of Series C Preferred Stock under the Series C Agreement. As the Series C Agreement was entered into in conjunction with the Purchase and Sale Agreement, the Company’s management considered whether the consideration received for the issuance of Series C Preferred Stock or the consideration received for the sale of the royalty entitlement at the first closing under the Purchase and Sale Agreement should be allocated in the Company’s financial statements in a manner different than the prices stated in the respective agreements. The Company’s management, with the assistance of an outside valuation specialist, determined that the $2.50 ($14.75 on a post-reverse stock split basis) per share price approximated the fair value of a share of Series C Preferred Stock, and therefore concluded that the consideration received under the agreements should be allocated in accordance with the terms of the respective agreements. In connection with entering into the Series C Agreement, the minimum public offering price per share in an underwritten public offering of common stock required for the automatic conversion of outstanding shares of Series A Preferred Stock, Series A-1 Preferred Stock, Series B Preferred Stock, Series B-1 Preferred Stock, Series C Preferred Stock and Junior Series A Preferred Stock pursuant to the Company’s certificate of incorporation was adjusted to $14.75 per share (subject to further adjustment as a result of any stock dividend, stock split, combination or similar recapitalization of the common stock). The Company has determined that in accordance with ASC 470-20-20, at the time of the initial closing under the Series C Agreement on May 23, 2013, there was a firm commitment from the Series C Preferred Stock investors with respect to the significant terms of the financing, including the quantity of shares to be issued, the fixed price of the shares and the timing of the transaction. In addition, the Company has concluded that the Series C Agreement and the Company’s certificate of incorporation includes a disincentive feature for non-performance that was sufficiently large enough to make investor performance at subsequent closings probable. As such, the Company’s measurement of any beneficial conversion feature occurred at the time of the initial closing. Based on a $10.03 per share valuation of the Company’s common stock as of the date of the initial closing of the sale of the Series C Preferred Stock, as well as the fact that the Series C Preferred Stock featured a common stock conversion price of $14.75 per share (implying a one-to-one conversion into shares of common stock), the Company determined that there was no beneficial conversion feature associated with the issuance of its Series C Preferred Stock. The proceeds received from Novo A/S under the Purchase and Sale Agreement will be reported as revenue for income tax purposes. Notwithstanding the Company’s receipt of $41.7 million in proceeds under the Purchase and Sale Agreement in May 2013, the Company has forecasted a tax loss for the 2013 tax year. Based upon the Company’s cumulative history of losses and expected future losses, the Company recorded a full valuation allowance against all net federal and state deferred tax assets.

Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2013

Summary of Significant Accounting Policies

Basis of Presentation

Basis of Presentation

Use of Estimates

Use of Estimates

Cash and Cash Equivalents

Cash and Cash Equivalents

Concentration of Credit Risk

Concentration of Credit Risk

Foreign Currency Translation

Foreign Currency Translation

Financial Instruments

Financial Instruments

Property and Equipment

Property and Equipment

Research and Development

Research and Development

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

Income Taxes

Income Taxes

Share-Based Compensation

Share-Based Compensation

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

	Three months ended September 30,				Nine months ended September 30,
	2013		2012		2013		2012

Research and development	$	752	$	96	$	1,052	$	182
General and administrative	395		54		555		101
Total	$	1,147	$	150	$	1,607	$	283

The Company had no shares of unvested restricted common stock granted to employees at September 30, 2013 or at December 31, 2012, respectively.

Reclassification

Reclassification

JOBS Act

JOBS Act

Net Loss Per Common Share (Tables)

9 Months Ended

Sep. 30, 2013

Net Loss Per Common Share

Schedule of computation of basic and diluted net loss per share

	Three months ended September 30,						Nine months ended September 30,
	2013			2012			2013			2012
Basic and diluted net loss per common share calculation:
Net loss	$	(16,132	)	$	(4,153	)	$	(30,757	)	$	(10,731	)
Accretion of preferred stock dividends	(2,292		)	(1,775		)	(5,891		)	(5,288		)
Net loss attributable to common shareholders	$	(18,424	)	$	(5,928	)	$	(36,648	)	$	(16,019	)
Weighted average common shares outstanding	1,795			1,455			1,579			1,447
Net loss per share of common stock - basic and diluted	$	(10.26	)	$	(4.07	)	$	(23.21	)	$	(11.07	)

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

	Three months ended September 30,		Nine months ended September 30,
	2013	2012	2013	2012

Redeemable convertible preferred stock	—	16,513	—	16,513
Stock options outstanding	2,620	1,301	2,620	1,301
Warrants	101	78	101	78
Total	2,721	17,892	2,721	17,892

Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2013

Fair Value Measurements

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

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

Assets
Investments in U.S. Treasury money market funds*	$	234,843	$	—	$	—
Liabilities
Series A Warrant Liability	$	—	$	—	$	—
Series B Warrant Liabilty	$	—	$	—	$	—

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

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

Assets
Investments in money market funds*	$	524	$	—	$	—
Liabilities
Series A Warrant Liability	$	—	$	—	$	523
Series B Warrant Liabilty	$	—	$	—	$	443

* Investments in money markets funds are reflected in cash and cash equivalents in the accompanying Balance Sheets.

Summary of changes in fair value of the Company's Level 3 valuation for the Series A and Series B warrant liabilities

	Level 3
	Series A Warrant Liability			Series B Warrant Liability

Balance at December 31, 2012	523			443
Warrants issued in connection with venture debt facility	—			32
Change in fair value of warrant liability	379			852
Conversion of warrant liability to equity	(902		)	(1,327		)
Balance at September 30, 2013	$	—		$	—

Business (Details) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended		81 Months Ended
Business (Details) $ / shares in Units, $ in Thousands	Sep. 30, 2013 USD ($)	Sep. 30, 2012 USD ($)	Sep. 30, 2013 USD ($) item $ / shares shares	Sep. 30, 2012 USD ($)	Sep. 30, 2013 USD ($)	Dec. 31, 2012 USD ($)
Business
Number of business segments \| item			1
Net loss	$ 16,132	$ 4,153	$ 30,757	$ 10,731	$ 131,387
Accumulated deficit during the development stage	$ 162,661		$ 162,661		162,661	$ 126,471
Common stock issued and sold in IPO (in shares) \| shares			8,740,000
Public offering price (in dollars per share) \| $ / shares			$ 22.00
Shares issued on exercise of over-allotment option by underwriters \| shares			1,140,000
Net proceeds from IPO after deducting underwriting discounts and commissions and other offering expenses			$ 175,555		$ 175,555

- Definition

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

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Net Income
-URI http://asc.fasb.org/extlink&oid=6518256

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 230
-SubTopic 10
-Section 45
-Paragraph 28
-URI http://asc.fasb.org/extlink&oid=31042434&loc=d3e3602-108585

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 944
-SubTopic 225
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-04.19)
-URI http://asc.fasb.org/extlink&oid=6879464&loc=d3e573970-122913

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6371337&loc=d3e3550-109257

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 225
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SX 210.5-03.18)
-URI http://asc.fasb.org/extlink&oid=26872669&loc=d3e20235-122688

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 944
-SubTopic 225
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-04.22)
-URI http://asc.fasb.org/extlink&oid=6879464&loc=d3e573970-122913

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Other Comprehensive Income
-URI http://asc.fasb.org/extlink&oid=6519514

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=28358780&loc=d3e565-108580

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 03
-Paragraph 19
-Article 5

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 04
-Paragraph 20
-Article 9

+ Details

Capitalization (Details) $ / shares in Units, $ in Thousands			9 Months Ended	81 Months Ended
	Sep. 30, 2013 USD ($) $ / shares shares	Sep. 09, 2013	Sep. 30, 2013 USD ($) $ / shares shares	Sep. 30, 2013 USD ($) shares	Aug. 31, 2013 shares	Dec. 31, 2012 shares
Capitalization
Reverse stock split conversion ratio		5.9
Capitalization
Price of common stock issued in initial public offering (in dollars per share) \| $ / shares			$ 22.00
Net proceeds from issuance of shares of common stock after deducting underwriters' commissions and other offering expenses (in dollars) \| $			$ 175,555	$ 175,555
Authorized shares of common stock	200,000,000		200,000,000	200,000,000	200,000,000	155,864,851
Authorized shares of preferred stock					5,000,000
Common stock
Capitalization
Number of shares registered in initial public offering	8,740,000
Price of common stock issued in initial public offering (in dollars per share) \| $ / shares	$ 22.00
Net proceeds from issuance of shares of common stock after deducting underwriters' commissions and other offering expenses (in dollars) \| $	$ 175,600
Shares issued on automatic conversion of redeemable convertible preferred stock	21,038,477

Net Loss Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended		81 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013
Basic and diluted net loss per common share calculation:
Net loss	$ (16,132)	$ (4,153)	$ (30,757)	$ (10,731)	$ (131,387)
Accretion of preferred stock dividends	(2,292)	(1,775)	(5,891)	(5,288)	(33,046)
Net loss attributable to common stockholders	$ (18,424)	$ (5,928)	$ (36,648)	$ (16,019)	$ (164,433)
Weighted average common shares outstanding	1,795	1,455	1,579	1,447
Net loss per share of common stock - basic and diluted (in dollars per share)	$ (10.26)	$ (4.07)	$ (23.21)	$ (11.07)
Anti-dilutive securities
Total (in shares)	2,721	17,892	2,721	17,892
Redeemable convertible preferred stock
Anti-dilutive securities
Total (in shares)		16,513		16,513
Stock options
Anti-dilutive securities
Total (in shares)	2,620	1,301	2,620	1,301
Warrants
Anti-dilutive securities
Total (in shares)	101	78	101	78

Fair Value Measurements (Details 2) - Level 3	12 Months Ended
Fair Value Measurements (Details 2) - Level 3	Dec. 31, 2012 item $ / shares
Series A Warrant
Level 3 Valuation
Strike price (in dollars per share)	$ 0.01
Number of scenarios for expected outcome probability weight \| item	3
Expected outcome probability rate of merger (as a percent)	65.00%
Expected outcome probability rate of dissolution (as a percent)	20.00%
Expected outcome probability rate of initial public offering (as a percent)	15.00%
Series A Warrant \| Minimum
Level 3 Valuation
Volatility (as a percent)	47.20%
Risk free interest rate (as a percent)	0.05%
Expected life	3 months
Series A Warrant \| Maximum
Level 3 Valuation
Volatility (as a percent)	85.30%
Risk free interest rate (as a percent)	0.62%
Expected life	4 years 6 months
Series A Warrant \| Series A preferred shares \| Minimum
Level 3 Valuation
Fair value of shares (in dollars per share)	$ 1.22
Series A Warrant \| Series A preferred shares \| Maximum
Level 3 Valuation
Fair value of shares (in dollars per share)	$ 4.34
Series B Warrant
Level 3 Valuation
Number of scenarios for expected outcome probability weight \| item	3
Expected outcome probability rate of merger (as a percent)	65.00%
Expected outcome probability rate of dissolution (as a percent)	20.00%
Expected outcome probability rate of initial public offering (as a percent)	15.00%
Series B Warrant \| Minimum
Level 3 Valuation
Volatility (as a percent)	47.20%
Risk free interest rate (as a percent)	0.05%
Strike price (in dollars per share)	$ 1.00
Expected life	3 months
Series B Warrant \| Maximum
Level 3 Valuation
Volatility (as a percent)	80.10%
Risk free interest rate (as a percent)	1.68%
Strike price (in dollars per share)	$ 2.50
Expected life	9 years 6 months
Series B Warrant \| Series B preferred shares \| Minimum
Level 3 Valuation
Fair value of shares (in dollars per share)	$ 1.18
Series B Warrant \| Series B preferred shares \| Maximum
Level 3 Valuation
Fair value of shares (in dollars per share)	$ 4.22

Stock Option and Compensation Plans (Details) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2013 USD ($) $ / shares shares	Sep. 30, 2012 USD ($)	Sep. 30, 2013 USD ($) item $ / shares shares	Sep. 30, 2012 USD ($)
Stock Option and Compensation Plans
Number of option plans \| item			2
Share-based compensation expense \| $	$ 1,147	$ 150	$ 1,607	$ 283
2007 Plan
Stock Option and Compensation Plans
Increase in number of shares authorized under the Plan			1,878,343
Number of shares of common stock available for issuance under the Plan	739,317		739,317
Awards outstanding (in shares)	2,620,000		2,620,000
2013 Plan
Stock Option and Compensation Plans
Number of shares of common stock available for issuance under the Plan	739,000		739,000
Annual increase in shares reserved for issuance under the Plan			2,542,372
Annual increase in shares reserved for issuance under the Plan (as a percent)			4.00%
2013 Plan \| Maximum
Stock Option and Compensation Plans
Number of shares reserved for issuance under the Plan	3,359,641		3,359,641
Stock option
Stock Option and Compensation Plans
Share-based compensation expense \| $	$ 1,100	$ 200	$ 1,600	$ 300
Unrecognized share-based compensation costs \| $	$ 11,600		$ 11,600
Expected weighted average period to recognize share-based compensation costs			3 years 4 months 24 days
Additional disclosure of vested and non-vested options
Outstanding vested options (in shares)	1,091,000		1,091,000
Intrinsic value of outstanding vested options \| $	$ 30,800		$ 30,800
Closing price of the Company's stock (in dollars per share) \| $ / shares	$ 29.71		$ 29.71
Weighted average exercise price of vested stock options (in dollars per share) \| $ / shares	$ 1.36		$ 1.36
Outstanding unvested options (in shares)	1,529,000		1,529,000
Intrinsic value of outstanding unvested options \| $	$ 30,500		$ 30,500
Weighted average exercise price of unvested stock options (in dollars per share) \| $ / shares	$ 9.76		$ 9.76

Royalty Agreement and Series C Agreement (Details 2) - USD ($)		1 Months Ended	9 Months Ended	81 Months Ended
	May 23, 2013	Aug. 31, 2013	Sep. 30, 2013	Sep. 30, 2013	Aug. 07, 2013	May 31, 2013
Series C Preferred Stock Purchase Agreement
Aggregate proceeds			$ 49,699,000	$ 130,632,000
Series C Agreement \| Series C Preferred Stock
Series C Preferred Stock Purchase Agreement
Shares available for sale and issuance under agreement						20,000,000
Share price (in dollars per share)					$ 2.50	$ 2.50
Share price on a post-reverse stock split basis (in dollars per share)					$ 14.75	$ 14.75
Shares issued					13,333,333	6,666,667
Share price at fair value (in dollars per share)	$ 2.50
Common stock conversion price (in dollars per share)	$ 14.75
Beneficial conversion feature	$ 0
Aggregate proceeds		$ 33,300,000
Series C Agreement \| Common stock
Series C Preferred Stock Purchase Agreement
Share price at fair value (in dollars per share)	$ 10.03
Conversion ratio (per share of common stock)	1
Initial Public Offering \| Common stock \| Conversion Terms \| Minimum
Series C Preferred Stock Purchase Agreement
Share price (in dollars per share)	$ 14.75

Notes Payable	9 Months Ended
Notes Payable	Sep. 30, 2013
Notes Payable
Notes Payable	6. Notes Payable In June 2012, December 2012 and March 2013, the Company issued secured promissory notes (the “Notes”) in the amount of $7.5 million and $4.0 million and $1.5 million, respectively, to the same lender. The Notes bore interest on the outstanding principal amount thereof from the Closing Date until paid in full at a rate per annum equal to the sum of (i) the greater of (A) the LIBOR Rate in effect for the applicable Interest Period and (B) 3.0%, plus (ii) the LIBOR Rate Margin adjusted on the first day of each Interest Period and fixed for the duration of each such Interest Period. As of December 31, 2012, the Company classified the debt with the lender as a current liability since the Company intended to pay down the balance in its entirety within twelve months. The Company repaid in full the outstanding principal, interest and related prepayment fees in May 2013. The repayment of the Notes resulted in a loss on extinguishment of debt in the amount of $1.1 million for the nine months ended September 30, 2013. In addition, the Company made payments of $0.8 million which, in accordance with the Notes, were required upon the earlier of the maturity date or the prepayment date of the Notes. These payments were recorded as interest expense for the nine months ended September 30, 2013.

Summary of Significant Accounting Policies (Details)	9 Months Ended
Summary of Significant Accounting Policies (Details)	Sep. 30, 2013
Minimum
Property and equipment
Estimated useful lives	5 years
Maximum
Property and equipment
Estimated useful lives	7 years

Notes Payable (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended	81 Months Ended
Notes Payable (Details) - USD ($) $ in Thousands	Sep. 30, 2013	Sep. 30, 2013	Sep. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Jun. 30, 2012
Notes payable
Loss on extinguishment of debt	$ (105)	$ 1,091	$ 1,091
Notes
Notes payable
Secured promissory notes issued				$ 1,500	$ 4,000	$ 7,500
Fixed interest rate (as a percent)	3.00%	3.00%	3.00%
Basis of interest rate		LIBOR
Period to pay debt		12 months
Loss on extinguishment of debt		$ 1,100
Payment of debt recorded as interest expense		$ 800

Royalty Agreement and Series C Agreement (Details) $ in Thousands	1 Months Ended	9 Months Ended	81 Months Ended
	May 31, 2013 USD ($) item	Sep. 30, 2013 USD ($)	Sep. 30, 2013 USD ($)
Royalty agreement
Royalty entitlement purchase price		$ 41,667	$ 41,667
Proceeds from royalty purchase agreement		$ 41,667	$ 41,667
Novo A/S \| Purchase and Sale Agreement \| Fovista, Fovista-Related Products, and Other Products
Royalty agreement
Royalty entitlement purchase price	$ 41,700
Aggregate royalty entitlements	125,000
Proceeds from royalty purchase agreement	$ 41,700
Novo A/S \| Purchase and Sale Agreement \| Fovista, Fovista-Related Products, and Other Products \| Maximum
Royalty agreement
Number of purchases \| item	3

Summary of Significant Accounting Policies (Details 3) - shares	9 Months Ended	12 Months Ended
	Sep. 30, 2013	Dec. 31, 2012
Restricted common stock \| Unvested
Other information
Shares of unvested restricted common stock granted to employees	0	0

Fair Value Measurements (Details) - USD ($) $ in Thousands	Sep. 30, 2013	Dec. 31, 2012
Fair Value Measurements
Warrant Liability		$ 966
Recurring basis \| Quoted prices in active markets for identical assets (Level 1) \| Money Market Funds
Fair Value Measurements
Investments in money market funds		524
Recurring basis \| Quoted prices in active markets for identical assets (Level 1) \| U.S. Treasury money market funds
Fair Value Measurements
Investments in money market funds	$ 234,843
Recurring basis \| Significant unobservable inputs (Level 3) \| Series A Warrant
Fair Value Measurements
Warrant Liability		523
Recurring basis \| Significant unobservable inputs (Level 3) \| Series B Warrant
Fair Value Measurements
Warrant Liability		$ 443