AKAO 2017 Annual Report

92 in the external expenses related to our plazomicin program, mainly attributable to the completion of the Phase 3 studies. We record research and development expenses by program where directly identifiable. In the table below, we have allocated indirect research and development costs based on time charged directly to programs by research and development employees. Indirect research and development costs include employee benefit expenses, employee time not charged directly to a program, laboratory supplies and expenses, and allocated facility expenses. The following table illustrates the components of our research and development expenses during the periods indicated: Year Ended December 31, 2017 2016 Change (in thousands) Research and development expenses by program: Plazomicin program..................................................................... $ 58,898 $ 57,818 $ 1,080 C-Scape program ......................................................................... 16,866 1,755 15,111 Other research programs.............................................................. 19,834 14,426 5,408 Total research and development expenses ........................................ $ 95,598 $ 73,999 $ 21,599 General and Administrative Expenses General and administrative expenses increased $24.8 million to $41.9 million for the year ended December 31, 2017 from $17.1 million for the comparable period in 2016. The increase in general and administrative expenses was primarily due to an increase of $15.9 million in personnel and facility related costs, including $4.8 million for stock compensation expense, as net headcount increased by 36 employees, an increase of $4.6 million in costs to prepare for commercialization of plazomicin and $4.3 million in consulting and professional fees. Interest Expense Interest expense increased $0.5 million to $2.9 million for the year ended December 31, 2017 from $2.3 million for the year ended December 31, 2016. The increase was a result of the full year effect of borrowing and the additional $10.0 million of borrowings under our former loan and security agreement with Solar Capital in June 2016. Change in Warrant and Derivative Liabilities Change in warrant and derivative liabilities increased $21.8 million to a $1.9 million gain for the year ended December 31, 2017 from $19.9 million in expense for the year ended December 31, 2016. The increase is primarily due to the change in the estimated fair value of the warrant liability, which decreased mainly due to the change in our stock price. Comparison of Years Ended December 31, 2016 and 2015 Year Ended December 31, 2016 2015 Change (in thousands) Contract revenue............................................................................... $ 41,773 $ 26,061 $ 15,712 Operating expenses: Research and development.......................................................... 73,999 40,228 33,771 General and administrative.......................................................... 17,122 12,406 4,716 Loss from operations ........................................................................ (49,348) (26,573) (22,775) Interest expense ................................................................................ (2,320) (699) (1,621) Change in warrant and derivative liabilities ..................................... (19,859) (19) (19,840) Other income, net.............................................................................. 300 198 102 Net loss ............................................................................................. $ (71,227) $ (27,093) $ (44,134)