Annual report pursuant to Section 13 and 15(d)

Restructuring Charges

Restructuring Charges
12 Months Ended
Dec. 31, 2018
Restructuring And Related Activities [Abstract]  
Restructuring Charges

8. Restructuring Charges

On December 19, 2016, the Board of Directors approved a restructuring of its business based on its decision to focus the Company’s efforts on clinical development, with an initial focus on the X358 clinical programs. The restructuring included a reduction-in-force in which the Company terminated 57 employees (the “2016 Restructuring”). In early 2017, the Company further revised its strategy to prioritize out-licensing activities and further curtail research and development spending and terminated five additional employees (the “2017 Restructuring”). Charges related to these initiatives were complete by the end of fiscal 2017.

During the year ended December 31, 2017, the Company recorded charges of $3.4 million related to severance, other termination benefits and outplacement services in connection with the workforce reduction resulting from the 2017 Restructuring and 2016 Restructuring activities.

During the year ended December 31, 2018, the Company completely vacated both of its leased facilities in Berkeley, California and subleased the leased space to three subtenants. In connection with vacating this space, the Company recorded a discounted lease-related restructuring liability, which was calculated as the present value of the estimated future facility costs for which the Company would obtain no future economic benefit over the term of the lease, net of estimated future sublease income, and adjusted for the remaining balance of deferred rent of $0.7 million. The Company remeasured the restructuring liability based on changes to the timing and amount of actual and estimated future sublease income, which resulted in a lease-related restructuring liability of $1.4 million as of December 31, 2018. During the year ended December 31, 2018, the Company recorded lease-related restructuring charges of $1.3 million in its consolidated statements of operations and comprehensive loss.

In addition, in connection with the sublease agreement executed in April 2018, the Company recognized a loss on the sublease of $0.6 million, which was recorded in the restructuring charges line item of the consolidated statements of operations and comprehensive loss (see Note 14).

The Company classified the current portion of the combined lease-related liabilities of $1.4 million within accrued and other liabilities and the non-current portion of $0.3 million within other liabilities- non-current in its consolidated balance sheet as of December 31, 2018.