Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Mar. 12, 2019 | Jun. 30, 2018 | |
Document and Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Year Focus | 2018 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | NOVAVAX INC | ||
Entity Central Index Key | 0001000694 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 505,900,000 | ||
Trading Symbol | NVAX | ||
Entity Common Stock, Shares Outstanding | 441,344,182 | ||
Entity Shell Company | false | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | true |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 70,154 | $ 106,307 |
Marketable securities | 21,980 | 50,996 |
Restricted cash | 10,847 | 28,234 |
Prepaid expenses and other current assets | 16,295 | 17,774 |
Total current assets | 119,276 | 203,311 |
Restricted cash | 958 | 890 |
Property and equipment, net | 28,426 | 35,987 |
Intangible assets, net | 6,541 | 7,873 |
Goodwill | 51,967 | 53,563 |
Other non-current assets | 810 | 869 |
Total assets | 207,978 | 302,493 |
Current liabilities: | ||
Accounts payable | 9,301 | 5,613 |
Accrued expenses | 19,550 | 29,610 |
Accrued interest | 5,078 | 5,078 |
Deferred revenue | 10,010 | 25,625 |
Other current liabilities | 1,600 | 7,749 |
Total current liabilities | 45,539 | 73,675 |
Deferred revenue | 2,500 | 2,500 |
Convertible notes payable | 319,187 | 317,763 |
Other non-current liabilities | 8,687 | 10,287 |
Total liabilities | 375,913 | 404,225 |
Commitments and contingencies | ||
Stockholders' deficit: | ||
Preferred stock, $0.01 par value, 2,000,000 shares authorized; no shares issued and outstanding at December 31, 2018 and 2017 | 0 | 0 |
Common stock, $0.01 par value, 600,000,000 shares authorized at December 31, 2018 and 2017; and 384,906,037 shares issued and 384,450,607 shares outstanding at December 31, 2018 and 323,684,820 shares issued and 323,229,390 shares outstanding at December 31, 2017 | 3,849 | 3,237 |
Additional paid-in capital | 1,140,964 | 1,020,457 |
Accumulated deficit | (1,299,107) | (1,114,359) |
Treasury stock, 455,430 shares, cost basis at both December 31, 2018 and 2017 | (2,450) | (2,450) |
Accumulated other comprehensive loss | (11,191) | (8,617) |
Total stockholders' deficit | (167,935) | (101,732) |
Total liabilities and stockholders' deficit | $ 207,978 | $ 302,493 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Preferred stock, par or stated value per share | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value per share | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 600,000,000 | 600,000,000 |
Common stock, shares issued | 384,906,037 | 323,684,820 |
Common stock, shares outstanding | 384,450,607 | 323,229,390 |
Treasury stock, shares | 455,430 | 455,430 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenue: | |||
Revenue | $ 34,288 | $ 31,176 | $ 15,353 |
Expenses: | |||
Research and development | 173,797 | 168,435 | 237,939 |
General and administrative | 34,409 | 34,451 | 46,527 |
Total expenses | 208,206 | 202,886 | 284,466 |
Loss from operations | (173,918) | (171,710) | (269,113) |
Other income (expense): | |||
Investment income | 2,674 | 1,946 | 2,143 |
Interest expense | (13,612) | (14,072) | (12,965) |
Other income (expense) | 108 | 67 | (31) |
Net loss | $ (184,748) | $ (183,769) | $ (279,966) |
Basic and diluted net loss per share | $ (0.50) | $ (0.63) | $ (1.03) |
Basic and diluted weighted average number of common shares outstanding | 369,757 | 292,669 | 270,802 |
Government contract [member] | |||
Revenue: | |||
Revenue | $ 0 | $ 0 | $ 2,184 |
Grant and other [Member] | |||
Revenue: | |||
Revenue | $ 34,288 | $ 31,176 | $ 13,169 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Net loss | $ (184,748) | $ (183,769) | $ (279,966) |
Other comprehensive income (loss): | |||
Net unrealized gains (losses) on marketable securities available-for-sale | 12 | (50) | 54 |
Foreign currency translation adjustment | (2,586) | 3,247 | (2,744) |
Other comprehensive income (loss) | (2,574) | 3,197 | (2,690) |
Comprehensive loss | $ (187,322) | $ (180,572) | $ (282,656) |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Treasury Stock [Member] | Accumulated Other Comprehensive Income (Loss) [Member] |
Balance beginning at Dec. 31, 2015 | $ 292,669 | $ 2,704 | $ 951,569 | $ (650,030) | $ (2,450) | $ (9,124) |
Balance beginning (in shares) at Dec. 31, 2015 | 270,426,662 | |||||
Non-cash compensation cost for stock options, ESPP and restricted stock | 19,160 | $ 0 | 19,160 | 0 | 0 | 0 |
Exercise of stock options/Purchases under ESPP | 3,802 | $ 13 | 3,789 | 0 | 0 | 0 |
Exercise of stock options/Purchases under ESPP, shares | 1,254,735 | |||||
Restricted stock issued as compensation | 0 | $ 0 | 0 | 0 | 0 | 0 |
Restricted stock issued as compensation, shares | 20,000 | |||||
Payment of capped call transactions and costs | (38,521) | $ 0 | (38,521) | 0 | 0 | 0 |
Unrealized gain on marketable securities | 54 | 0 | 0 | 0 | 0 | 54 |
Foreign currency translation adjustment | (2,744) | 0 | 0 | 0 | 0 | (2,744) |
Net loss | (279,966) | 0 | 0 | (279,966) | 0 | 0 |
Balance ending at Dec. 31, 2016 | (5,546) | $ 2,717 | 935,997 | (929,996) | (2,450) | (11,814) |
Balance ending (in shares) at Dec. 31, 2016 | 271,701,397 | |||||
Non-cash compensation cost for stock options, ESPP and restricted stock | 19,809 | $ 0 | 19,809 | 0 | 0 | 0 |
Exercise of stock options/Purchases under ESPP | 1,152 | $ 11 | 1,141 | 0 | 0 | 0 |
Exercise of stock options/Purchases under ESPP, shares | 1,093,513 | |||||
Issuance of common stock, net of issuance costs | 63,425 | $ 509 | 62,916 | 0 | 0 | 0 |
Issuance of common stock, net of issuance costs, shares | 50,889,910 | |||||
Unrealized gain on marketable securities | (50) | $ 0 | 0 | 0 | 0 | (50) |
Foreign currency translation adjustment | 3,247 | 0 | 0 | 0 | 0 | 3,247 |
Net loss | (183,769) | 0 | 0 | (183,769) | 0 | 0 |
Balance ending at Dec. 31, 2017 | (101,732) | $ 3,237 | 1,020,457 | (1,114,359) | (2,450) | (8,617) |
Balance ending (in shares) at Dec. 31, 2017 | 323,684,820 | |||||
Cumulative effect of adoption of ASU 2016-09 | 0 | $ 0 | 594 | (594) | 0 | 0 |
Non-cash compensation cost for stock options, ESPP and restricted stock | 18,314 | 0 | 18,314 | 0 | 0 | 0 |
Exercise of stock options/Purchases under ESPP | 2,745 | $ 24 | 2,721 | 0 | 0 | 0 |
Exercise of stock options/Purchases under ESPP, shares | 2,411,212 | |||||
Restricted stock cancelled | 0 | $ 0 | 0 | 0 | 0 | 0 |
Restricted stock cancelled, shares | (18,750) | |||||
Issuance of common stock, net of issuance costs | 100,060 | $ 588 | 99,472 | 0 | 0 | 0 |
Issuance of common stock, net of issuance costs, shares | 58,828,755 | |||||
Unrealized gain on marketable securities | 12 | $ 0 | 0 | 0 | 0 | 12 |
Foreign currency translation adjustment | (2,586) | 0 | 0 | 0 | 0 | (2,586) |
Net loss | (184,748) | 0 | 0 | (184,748) | 0 | 0 |
Balance ending at Dec. 31, 2018 | $ (167,935) | $ 3,849 | $ 1,140,964 | $ (1,299,107) | $ (2,450) | $ (11,191) |
Balance ending (in shares) at Dec. 31, 2018 | 384,906,037 |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Issuance of common stock, issuance costs | $ 4,265 | $ 1,065 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Operating Activities: | |||
Net loss | $ (184,748) | $ (183,769) | $ (279,966) |
Reconciliation of net loss to net cash used in operating activities: | |||
Depreciation and amortization | 8,159 | 9,817 | 8,505 |
(Gain) Loss on disposal of property and equipment | (55) | 269 | 374 |
Non-cash impact of lease termination | (4,381) | 0 | 0 |
Amortization of debt issuance costs | 1,424 | 1,424 | 1,305 |
Lease incentives received | 0 | 1,933 | 1,963 |
Non-cash stock-based compensation | 18,314 | 19,809 | 19,160 |
Other | (2,396) | 2,715 | 663 |
Changes in operating assets and liabilities: | |||
Prepaid expenses and other assets | 1,212 | 2,590 | (1,119) |
Accounts payable and accrued expenses | (6,744) | 5,192 | (4,808) |
Deferred revenue | (15,610) | (4,456) | (6,057) |
Other liabilities | 0 | 0 | 1,212 |
Net cash used in operating activities | (184,825) | (144,476) | (258,768) |
Investing Activities: | |||
Capital expenditures | (1,372) | (4,189) | (18,202) |
Purchases of marketable securities | (120,150) | (218,045) | (356,556) |
Proceeds from maturities of marketable securities | 150,118 | 258,202 | 402,775 |
Net cash provided by investing activities | 28,596 | 35,968 | 28,017 |
Financing Activities: | |||
Principal payments of capital leases | 0 | (37) | (71) |
Principal payments of notes payable | 0 | 0 | (395) |
Proceeds from issuance of convertible notes | 0 | 0 | 325,000 |
Payments of costs related to issuance of convertible notes | 0 | 0 | (9,966) |
Payments for capped call transactions and costs | 0 | 0 | (38,521) |
Net proceeds from sales of common stock | 100,060 | 63,425 | 0 |
Proceeds from the exercise of stock options and employee stock purchases | 2,745 | 1,152 | 3,802 |
Net cash provided by financing activities | 102,805 | 64,540 | 279,849 |
Effect of exchange rate on cash, cash equivalents and restricted cash | (48) | 142 | (335) |
Net (decrease) increase in cash, cash equivalents and restricted cash | (53,472) | (43,826) | 48,763 |
Cash, cash equivalents and restricted cash at beginning of year | 135,431 | 179,257 | 130,494 |
Cash, cash equivalents and restricted cash at end of year | 81,959 | 135,431 | 179,257 |
Supplemental disclosure of non-cash activities: | |||
Capital expenditures included in accounts payable and accrued expenses | 519 | 15 | 697 |
Supplemental disclosure of cash flow information: | |||
Cash interest payments | $ 12,188 | $ 12,188 | $ 6,189 |
Organization
Organization | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Note 1 – Organization Novavax, Inc. (“Novavax,” and together with its wholly owned subsidiary, Novavax AB, the “Company”) is a late-stage biotechnology company focused on the discovery, development and commercialization of innovative vaccines to prevent serious infectious diseases. The Company’s vaccine candidates, including ResVax™ and NanoFlu™, are genetically engineered, three-dimensional nanostructures of recombinant proteins critical to disease pathogenesis and may elicit differentiated immune responses, which may be more efficacious than naturally occurring immunity or traditional vaccines. The Company’s product pipeline targets a variety of infectious diseases. |
Going Concern
Going Concern | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern | Note 2 – Going Concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern within one year after the date that the financial statements are issued. During 2018, the Company incurred a net loss of $184.7 million and had net cash flows used in operating activities of $184.8 million. At December 31, 2018, the Company had $103.9 million in cash and cash equivalents, marketable securities and restricted cash and had no committed source of additional funding from either debt or equity financings. Management believes that given the Company’s current cash position and forecasted negative cash flows from operating activities over the next twelve months as it continues its product development activities, including its planned ResVax submission of a Biologics License Application (“BLA”) with the U.S. Food and Drug Administration (“FDA”) and/or a Marketing Authorization Application (“MAA”) with the European Medicines Agency in 2020, and its planned Phase 3 clinical trial of NanoFlu following discussions with the FDA in the first half of 2019, there is substantial doubt about its ability to continue as a going concern through one year from the date that these financial statements are issued, without obtaining additional financing or entering into another form of non-equity or debt arrangement. The Company’s ability to fund its operations is dependent upon management’s plans, which include raising additional capital in the near term primarily through a combination of equity and debt financings, collaborations, strategic alliances and marketing, distribution or licensing arrangements and in the longer term, from revenue related to product sales, to the extent its product candidates receive marketing approval and can be commercialized. New financings may not be available to the Company on commercially acceptable terms, or at all. Also, any collaborations, strategic alliances and marketing, distribution or licensing arrangements may require the Company to give up some or all of its rights to a product or technology, which in some cases may be at less than the full potential value of such rights. If the Company is unable to obtain additional capital, the Company will assess its capital resources and may be required to delay, reduce the scope of or eliminate one or more of its research and development programs, and/or downsize its organization. The consolidated financial statements do not include any adjustments that might be necessary if the Company is not able to continue as a going concern. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 3 – Summary of Significant Accounting Policies Basis of Presentation The consolidated financial statements include the accounts of Novavax, Inc. and its wholly owned subsidiary, Novavax AB. All intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates The preparation of the consolidated financial statements in conformity with generally accepted accounting principles in the United States (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from those estimates. Cash and Cash Equivalents Cash and cash equivalents consist of highly liquid investments with maturities of three months or less from the date of purchase. Cash and cash equivalents consist of the following at December 31 (in thousands): 2018 2017 Cash $ 6,750 $ 10,482 Money market funds 39,168 36,762 Asset-backed securities 15,000 16,007 Corporate debt securities 9,236 43,056 Cash and cash equivalents $ 70,154 $ 106,307 Cash equivalents are recorded at cost, which approximate fair value due to their short-term nature. Marketable Securities Marketable securities consist of debt securities with maturities greater than three months from the date of purchase that include commercial paper, asset-backed securities and corporate notes. Classification of marketable securities between current and non-current is dependent upon the maturity date at the balance sheet date taking into consideration the Company’s ability and intent to hold the investment to maturity. Interest and dividend income is recorded when earned and included in investment income in the consolidated statements of operations. Premiums and discounts, if any, on marketable securities are amortized or accreted to maturity and included in investment income in the consolidated statements of operations. The specific identification method is used in computing realized gains and losses on the sale of the Company’s securities. The Company classifies its marketable securities with readily determinable fair values as “available-for-sale.” Investments in securities that are classified as available-for-sale are measured at fair market value in the consolidated balance sheets, and unrealized gains and losses on marketable securities are reported as a separate component of stockholders’ deficit until realized. Marketable securities are evaluated periodically to determine whether a decline in value is “other-than-temporary.” The term “other-than-temporary” is not intended to indicate a permanent decline in value. Rather, it means that the prospects for a near term recovery of value are not necessarily favorable, or that there is a lack of evidence to support fair values equal to, or greater than, the carrying value of the security. Management reviews criteria, such as the magnitude and duration of the decline, as well as the Company’s ability to hold the securities until market recovery, to predict whether the loss in value is other-than-temporary. If a decline in value is determined to be other-than-temporary, the value of the security is reduced and the impairment is recorded as other income (expense) in the consolidated statements of operations. Concentration of Credit Risk Financial instruments, which possibly expose the Company to concentration of credit risk, consist primarily of cash and cash equivalents and marketable securities. The Company’s investment policy limits investments to certain types of instruments, including asset-backed securities, high-grade corporate debt securities and money market funds, places restrictions on maturities and concentrations in certain industries and requires the Company to maintain a certain level of liquidity. At times, the Company maintains cash balances in financial institutions, which may exceed federally insured limits. The Company has not experienced any losses relating to such accounts and believes it is not exposed to a significant credit risk on its cash and cash equivalents. Fair Value Measurements The Company applies Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures (“ASC 820”), for financial and non-financial assets and liabilities. ASC 820 discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow) and the cost approach (cost to replace the service capacity of an asset or replacement cost). The statement utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels: Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions. Restricted Cash The Company’s current and non-current restricted cash includes payments received under the Grant Agreement (as defined in Note 7) with the Bill & Melinda Gates Foundation (“BMGF”) under which the Company was awarded a grant of up to $89.1 million and cash collateral accounts under letters of credit that serve as security deposits for certain facility leases. The Company has and will utilize the Grant Agreement funds as it incurs expenses for services performed under the agreement. At December 31, 2018 and 2017, the restricted cash balances (both current and non-current) consist of payments received under the Grant Agreement of $10.8 million and $27.4 million, respectively, and security deposits of $1.0 million and $1.7 million, respectively. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the statement of cash flows at December 31 (in thousands): 2018 2017 Cash and cash equivalents $ 70,154 $ 106,307 Restricted cash current 10,847 28,234 Restricted cash non-current 958 890 Cash, cash equivalents and restricted cash $ 81,959 $ 135,431 Property and Equipment Property and equipment are stated at cost and are depreciated using the straight-line method over the estimated useful lives of the assets, generally three to seven years. Amortization of leasehold improvements is computed using the straight-line method over the shorter of the estimated useful lives of the improvements or the remaining term of the lease. Repairs and maintenance costs are expensed as incurred. Other Intangible Assets The Company’s intangible assets include proprietary adjuvant technology and collaboration agreements, which were measured at their estimated fair values as of their acquisition dates. Amortization expense for intangible assets is recorded on a straight-line basis over the expected useful lives of the assets, ranging from seven to 20 years. Impairment of Long-Lived Assets Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable based on the criteria for accounting for the impairment or disposal of long-lived assets under ASC Topic 360, Property, Plant and Equipment. Goodwill Goodwill is subject to impairment tests annually or more frequently should indicators of impairment arise. The Company has determined that, because its only business is the development of recombinant vaccines, it operates as a single operating segment and has one reporting unit. The Company utilizes primarily the market approach and, if considered necessary, the income approach to determine if it has an impairment of its goodwill. The market approach is based on market value of invested capital. To ensure that the Company’s capital stock is the appropriate measurement of fair value, the Company considers factors such as its trading volume, diversity of investors and analyst coverage. If considered necessary, the income approach is used to corroborate the results of the market approach. Goodwill impairment may exist if the carrying value of the reporting unit exceeds its estimated fair value. If the carrying value of the reporting unit exceeds its fair value, step two of the impairment analysis is performed. In step two of the analysis, an impairment loss is recorded equal to the excess of the carrying value of the reporting unit’s goodwill over its implied fair value, should such a circumstance arise. At December 31, 2018 and 2017, the Company used the market approach to determine if the Company had an impairment of its goodwill. The fair value of the Company’s single reporting unit was substantially higher than its carrying value, resulting in no impairment to goodwill at December 31, 2018 and 2017. Equity Method Investment The Company has an equity investment in CPL Biologicals Private Limited (“CPLB”). The Company accounts for this investment using the equity method (see Note 7). Under the equity method of accounting, investments are stated at initial cost and are adjusted for subsequent additional investments and the Company’s proportionate share of earnings or losses and distributions up to the amount initially invested or advanced. Revenue Recognition In May 2014, the Financial Accounting Standards Board (“FASB”), issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09” or “Topic 606”), and subsequently issued amendments to ASU 2014-09, to supersede nearly all existing revenue recognition guidance under U.S. GAAP. The new revenue standard became effective for the Company on January 1, 2018, and was adopted using the modified retrospective method. The adoption of the new revenue standard as of January 1, 2018 did not materially change the Company’s timing of revenue recognition as the majority of its revenue continues to be recognized under its Grant Agreement with BMGF (see discussion below). Since the Company did not identify any accounting changes that impact its revenue recognition timing, no adjustment to accumulated deficit was required upon adoption. Under the new revenue standard for arrangements that are determined within the scope of Topic 606, the Company recognizes revenue following the five-step model: (i) identify the contract(s) with a customer; (ii) identify the performance obligation(s) 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) the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of Topic 606, the Company assesses the goods or services promised within each contract and determines the performance obligations, and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. The Company performs research and development under grant, license and clinical development agreements. Payments received in advance of work performed are recorded as deferred revenue. The Company’s current revenue primarily consists of revenue under its Grant Agreement with BMGF (see Note 7). The Company is reimbursed for certain costs that support development activities, including the Company’s global Phase 3 clinical trial in pregnant women in their third trimester, product licensing efforts and efforts to obtain World Health Organization (“WHO”) prequalification of its RSV F Vaccine for infants via maternal immunization (“ResVax™”). The Company’s Grant Agreement does not provide a direct economic benefit to BMGF. Rather, the Company entered into an agreement with BMGF to make a certain amount of ResVax available and accessible at affordable pricing to people in certain low and middle income countries. Based on these circumstances, the Company does not consider BMGF to be a customer and concluded the Grant Agreement is outside the scope of Topic 606. Payments received under the Grant Agreement are considered conditional contributions under the scope of ASC 958-605, Not-for-Profit Entities – Revenue Recognition , and are recorded as deferred revenue until the period in which such research and development activities are performed and revenue can be recognized. The Company analyzed the Grant Agreement with BMGF to determine whether the payments received should be recorded as revenue or as a reduction to research and development expenses. In reaching the determination that such payments should be recorded as revenue, management considered a number of factors, including whether the Company is principal under the arrangement, and whether the arrangement is significant to, and part of, the Company’s core operations. Further, management has consistently applied its policy of presenting such amounts as revenue. Stock-Based Compensation The Company accounts for stock-based compensation related to grants of stock options, restricted stock awards and purchases under the Company’s Employee Stock Purchase Plan, as amended and restated (the “ESPP”) at fair value. The Company recognizes compensation expense related to such awards on a straight-line basis over the requisite service period (generally the vesting period) of the equity awards, which typically occurs ratably over periods ranging from six months to four years. Effective January 1, 2017, the Company accounts for forfeitures when they occur (see discussion below). The expected term of stock options granted is based on the Company’s historical option exercise experience and post-vesting forfeiture experience using the historical expected term from the vesting date, whereas the expected term for purchases under the ESPP is based on the purchase periods included in the offering. The expected volatility is determined using historical volatilities based on stock prices over a look-back period corresponding to the expected term. The risk-free interest rate is determined using the yield available for zero-coupon U.S. Government issues with a remaining term equal to the expected term. The Company has never paid a dividend, and as such, the dividend yield is zero, and the Company does not intend to pay dividends in the foreseeable future. The Company adopted ASU 2016-09, Compensation – Stock Compensation (Topic 718) on the effective date, January 1, 2017, and, as part of the adoption, elected to account for forfeitures when they occur. The impact from adoption of the provisions related to forfeitures was reflected in the Company’s consolidated financial statements on a modified retrospective basis, resulting in an adjustment to accumulated deficit of $0.6 million on January 1, 2017. Restricted stock awards are recorded as compensation expense over the expected vesting period based on the fair value at the award date using the straight-line method of amortization. See Note 11 for a further discussion on stock-based compensation. Research and Development Expenses Research and development expenses include salaries, stock-based compensation, laboratory supplies, consultants and subcontractors, including external contract research organizations (“CROs”), and other expenses associated with the Company’s process development, manufacturing, clinical, regulatory and quality assurance activities for its programs. In addition, related indirect costs such as, fringe benefits and overhead expenses, are also included in research and development expenses. Research and development activities are expensed as incurred. Accrued Research and Development Expenses The Company accrues research and development expenses, including clinical trial-related expenses, as the services are performed, which may include estimates of those expenses incurred, but not invoiced. The Company uses information provided by third-party service providers and CROs, invoices and internal estimates to determine the progress of work performed on the Company’s behalf. Assumptions based on clinical trial protocols, contracts and participant enrollment data are also developed to determine and analyze these estimates and accruals. Income Taxes The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes . Under the liability method, deferred income taxes are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and operating loss carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which those temporary differences are expected to be recovered or settled. The effect of changes in tax rates on deferred tax assets and liabilities is recognized in income in the period such changes are enacted. A valuation allowance is established when necessary to reduce net deferred tax assets to the amount expected to be realized. Tax benefits associated with uncertain tax positions are recognized in the period in which one of the following conditions is satisfied: (1) the more likely than not recognition threshold is satisfied; (2) the position is ultimately settled through negotiation or litigation; or (3) the statute of limitations for the taxing authority to examine and challenge the position has expired. Tax benefits associated with an uncertain tax position are reversed in the period in which the more likely than not recognition threshold is no longer satisfied. Interest and penalties related to income tax matters are recorded as income tax expense. At December 31, 2018 and 2017, the Company had no accruals for interest or penalties related to income tax matters. Net Loss per Share Net loss per share is computed using the weighted average number of shares of common stock outstanding. At December 31, 2018, 2017 and 2016, the Company had outstanding stock options and unvested restricted stock awards totaling 59,509,610, 46,513,399 and 39,277,732 underlying shares of the Company’s common stock, respectively. At December 31, 2018 and 2017, the Company’s Notes (as defined in Note 9) would have been convertible into approximately 47,716,900 shares of the Company’s common stock assuming a common stock price of $6.81 or higher. These and any shares due to the Company upon settlement of its capped call transactions are excluded from the computation, as their effect is antidilutive. Foreign Currency The accompanying consolidated financial statements are presented in U.S. dollars. The functional currency of Novavax AB, which is located in Sweden, is the local currency (Swedish Krona). The translation of assets and liabilities of Novavax AB to U.S. dollars is made at the exchange rate in effect at the consolidated balance sheet date, while equity accounts are translated at historical rates. The translation of the statement of operations data is made at the average exchange rate in effect for the period. The translation of operating cash flow data is made at the average exchange rate in effect for the period, and investing and financing cash flow data is translated at the exchange rate in effect at the date of the underlying transaction. Translation gains and losses are recognized as a component of accumulated other comprehensive loss in the accompanying consolidated balance sheets. The foreign currency translation adjustment balance included in accumulated other comprehensive loss was $11.2 million and $8.6 million at December 31, 2018 and 2017, respectively. Segment Information The Company manages its business as one operating segment: the development of recombinant vaccines. The Company does not operate separate lines of business with respect to its vaccine candidates. Accordingly, the Company does not have separately reportable segments as defined by ASC Topic 280, Segment Reporting . Recent Accounting Pronouncements Recently Adopted In May 2014, the FASB issued ASU 2014-09, which supersedes nearly all existing revenue recognition guidance under Topic 605, Revenue Recognition . The new standard requires a company to recognize revenue when it transfers goods and services to customers in an amount that reflects the consideration that the company expects to receive for those goods or services. ASU 2014-09 defines a five-step process that includes identifying the contract with the customer, identifying the performance obligations in the contract, determining the transaction price, allocating the transaction price to the performance obligations in the contract and recognizing revenue when (or as) the entity satisfies the performance obligations. The Company completed its assessment of the potential changes from adopting ASU 2014-09, primarily by reviewing its current revenue streams and deferred revenue balances. Based on the Company’s assessment, there were no material changes to the timing of recognition of its revenue as the majority of its revenue continues to be recognized under the Grant Agreement with BMGF. The Company applied ASU 2014-09 on a modified retrospective basis as of January 1, 2018, having no impact to the Company’s consolidated financial position or results of operations. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows – Restricted Cash (“ASU 2016-18”), which requires that the change in total cash and cash equivalents at the beginning of period and end of period on the statement of cash flows include restricted cash and restricted cash equivalents. ASU 2016-18 also requires companies who report cash and cash equivalents and restricted cash separately on the balance sheet to reconcile those amounts to the statement of cash flows. The standard was adopted on its effective date of January 1, 2018, and was applied using a retrospective transition method to each period presented. Although the Company’s restricted cash is now included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statements of cash flows, the adoption did not have a material impact on the other aspects of the Company’s statements of cash flows, or its consolidated financial statements as a whole, including related disclosures. Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), Topic 842 became effective on January 1, 2019. The Company will adopt the standard under the optional transition method, which will not require restatement of prior periods. The Company will elect the package of practical expedients permitted under the transition guidance, which allows the Company to carryforward its historical lease classification, its assessment on whether a contract is or contains a lease and its initial direct costs for any leases that exist prior to adoption of the standard. The Company will also elect to combine lease and non-lease components and to keep leases with an initial term of 12 months or less off its consolidated balance sheet and recognize the associated lease payments in its consolidated statements of operations on a straight-line basis over the lease term. The Company expects to record approximately $12 million as total right-of-use assets, net of the deferred rent liability, and $22 million in total lease liabilities on its consolidated balance sheet as of January 1, 2019. The Company does not expect the adoption to have a material impact on its consolidated statements of cash flows or results of operations. In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350) (“ASU 2017-04”), which will simplify the goodwill impairment calculation by eliminating Step 2 from the current goodwill impairment test. The new standard does not change how a goodwill impairment is identified. The Company will continue to perform its quantitative goodwill impairment test by comparing the fair value of its reporting unit to its carrying amount, but if the Company is required to recognize a goodwill impairment charge, under the new standard, the amount of the charge will be calculated by subtracting the reporting unit’s fair value from its carrying amount. Under the current standard, if the Company is required to recognize a goodwill impairment charge, Step 2 requires it to calculate the implied value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination and the amount of the charge is calculated by subtracting the reporting unit’s implied fair value of goodwill from the goodwill carrying amount. The standard will be effective January 1, 2020 for the Company, with early adoption permitted, and should be applied prospectively from the date of adoption. The Company is currently evaluating when it will adopt ASU 2017-04 and its expected impact to related disclosures, but the adoption will not have an impact on the historical financial statements. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 4 – Fair Value Measurements The following table represents the Company’s fair value hierarchy for its financial assets and liabilities measured at fair value on a recurring basis (in thousands): Fair Value at December 31, 2018 Fair Value at December 31, 2017 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Assets Money market funds(1) $ 39,168 $ ― $ ― $ 36,762 $ ― $ ― Asset-backed securities(2) ― 19,997 ― ― 29,750 ― Corporate debt securities(3) ― 26,219 ― ― 80,309 ― Total cash equivalents and marketable securities $ 39,168 $ 46,216 $ ― $ 36,762 $ 110,059 $ ― Liabilities Convertible notes payable $ ― $ 197,935 $ ― $ ― $ 152,396 $ ― (1) Classified as cash and cash equivalents as of December 31, 2018 and 2017, respectively (see Note 3). (2) Includes $15,000 and $16,007 classified as cash and cash equivalents as of December 31, 2018 and 2017, respectively, on the consolidated balance sheets. (3) Includes $9,236 and $43,056 classified as cash and cash equivalents as of December 31, 2018 and 2017, respectively, on the consolidated balance sheets. Fixed-income investments categorized as Level 2 are valued at the custodian bank by a third-party pricing vendor’s valuation models that use verifiable observable market data, e.g., interest rates and yield curves observable at commonly quoted intervals and credit spreads, bids provided by brokers or dealers or quoted prices of securities with similar characteristics. Pricing of the Company’s Notes (as defined in Note 9) has been estimated using other observable inputs, including the price of the Company’s common stock, implied volatility, interest rates and credit spreads among others. Over time, the Company expects a market for the Notes to develop when there is sufficient volume of trading. At that time, the Company intends to use trade data as the principal basis for measuring fair value. During the years ended December 31, 2018 and 2017, the Company did not have any transfers between Levels. The amount in the Company’s consolidated balance sheets for accounts payable and accrued expenses approximates its fair value due to its short-term nature. |
Marketable Securities
Marketable Securities | 12 Months Ended |
Dec. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Marketable Securities | Note 5 – Marketable Securities Marketable securities classified as available-for-sale as of December 31, 2018 and 2017 were comprised of (in thousands): December 31, 2018 December 31, 2017 Gross Gross Gross Gross Amortized Unrealized Unrealized Amortized Unrealized Unrealized Cost Gains Losses Fair Value Cost Gains Losses Fair Value Asset-backed securities $ 4,999 $ ― $ (2 ) $ 4,997 $ 13,748 $ ― $ (5 ) $ 13,743 Corporate debt securities 16,986 ― (3 ) 16,983 37,265 ― (12 ) 37,253 Total $ 21,985 $ ― $ (5 ) $ 21,980 $ 51,013 $ ― $ (17 ) $ 50,996 Marketable Securities – Unrealized Losses The Company owned 7 available-for-sale securities as of December 31, 2018. Of these 7 securities, 7 had combined unrealized losses of less than $0.1 million as of December 31, 2018. The Company did not have any investments in a loss position for greater than 12 months as of December 31, 2018. The Company has evaluated its marketable securities and has determined that none of these investments had an other-than-temporary impairment, as it has no intent to sell securities with unrealized losses and it is not likely that the Company will be required to sell any securities with material unrealized losses, given the Company’s current and anticipated financial position. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Note 6 – Goodwill and Other Intangible Assets Goodwill The changes in the carrying amounts of goodwill for the years ended December 31, 2018 and 2017 were as follows (in thousands): Year Ended December 31, 2018 2017 Beginning balance $ 53,563 $ 51,673 Currency translation adjustments (1,596 ) 1,890 Ending balance $ 51,967 $ 53,563 Identifiable Intangible Assets Purchased intangible assets consisted of the following as of December 31, 2018 and 2017 (in thousands): December 31, 2018 December 31, 2017 Gross Carrying Amount Accumulated Amortization Intangible Assets, Net Gross Carrying Amount Accumulated Amortization Intangible Assets, Net Finite-lived intangible assets: Proprietary adjuvant technology $ 8,357 $ (2,263 ) $ 6,094 $ 9,086 $ (2,006 ) $ 7,080 Collaboration agreements 3,773 (3,326 ) 447 4,103 (3,310 ) 793 Total identifiable intangible assets $ 12,130 $ (5,589 ) $ 6,541 $ 13,189 $ (5,316 ) $ 7,873 Amortization expense for the years ended December 2018, 2017 and 2016 was $0.7 million, $2.2 million and $0.8 million, Year Amount 2019 $ 700 2020 583 2021 418 2022 418 2023 418 |
Grant, U.S. Government Contract
Grant, U.S. Government Contract and Joint Venture | 12 Months Ended |
Dec. 31, 2018 | |
Collaboration Us Government Agreement And Joint Venture [Abstract] | |
Grant, U.S. Government Contract and Joint Venture | Note 7 – Grant, U.S. Government Contract and Joint Venture Bill & Melinda Gates Foundation Grant Agreement In support of the Company’s development of ResVax, in September 2015, the Company entered into the grant agreement with BMGF (the “Grant Agreement”), under which it was awarded a grant totaling up to $89.1 million (the “Grant”). The Grant supports development activities, including the Company’s global Phase 3 clinical trial in pregnant women in their third trimester, product licensing efforts and efforts to obtain WHO prequalification of ResVax. Unless terminated earlier by BMGF, the Grant Agreement will continue in effect until the end of 2021. The Company concurrently entered into a Global Access Commitments Agreement (“GACA”) with BMGF as a part of the Grant Agreement. Under the terms of the GACA, among other things, the Company agreed to make a certain amount of ResVax available and accessible at affordable pricing to people in certain low and middle income countries. Unless terminated earlier by BMGF, the GACA will continue in effect until the latter of 15 years from its effective date, or 10 years after the first sale of a product under defined circumstances. The term of the GACA may be extended in certain circumstances, by a period of up to five additional years. Payments received in advance that are related to future performance are deferred and recognized as revenue when the research and development activities are performed. Cash payments received under the Grant Agreement are restricted as to their use until expenditures contemplated in the Grant Agreement are incurred. In 2018, the Company recognized revenue from the Grant of $30.8 million, and has recognized approximately $73 million in revenue since the inception of the agreement. At December 31, 2018, the Company’s current restricted cash and deferred revenue balances on the consolidated balance sheet represent its estimate of costs to be reimbursed and revenue to be recognized, respectively, in the next twelve months under the Grant Agreement. HHS BARDA Contract for Recombinant Influenza Vaccines The Department of Health and Human Services, Biomedical Advanced Research and Development Authority (“HHS BARDA”) awarded the Company a contract in 2011, which funded the development of both the Company’s quadrivalent seasonal and pandemic influenza virus-like particle (“VLP”) vaccine candidates. The contract with HHS BARDA was a cost-plus-fixed-fee contract, which reimbursed the Company for allowable direct contract costs incurred plus allowable indirect costs and a fixed-fee. The HHS BARDA contract expired in accordance with its terms in September 2016 . Billings under the contract were provisional billings, subject to adjustment upon audit by the government, and were based on approved provisional indirect billing rates, which permit recovery of fringe benefits, overhead and general and administrative expenses. These indirect rates are subject to audit by HHS BARDA on an annual basis. An audit of indirect rates for fiscal years 2013 and 2014 was completed in the first quarter of 2017 and an audit of indirect rates for fiscal year 2015 has been initiated, but has not been completed as of the date of this filing. When the final determination of the reimbursable costs for such fiscal years has been made, and such amount is known and collection of the amount is reasonably assured, revenue and billings will be adjusted accordingly. The Company has recognized approximately $114 million in revenue under the HHS BARDA contract since the inception of the contract. CPLB Joint Venture In 2009, the Company formed a joint venture with Cadila Pharmaceuticals Limited (“Cadila”), CPLB, to develop and manufacture vaccines, biological therapeutics and diagnostics in India. CPLB is owned 20% by the Company and 80% by Cadila. Because CPLB’s activities and operations are controlled and funded by Cadila, the Company accounts for its investment using the equity method. Since the carrying value of the Company’s initial investment was nominal, and the Company has provided no guarantee or commitment to provide future funding, the Company has not recorded losses related to this investment. In July 2018, the Company amended and restated its joint venture and license agreements with respect to CPLB to align them with its current and planned interactions with CPLB. CPLB continues to be owned 20% by the Company and 80% by Cadila. |
Other Financial Information
Other Financial Information | 12 Months Ended |
Dec. 31, 2018 | |
Other Financial Information | Note 8 – Other Financial Information Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist of the following at December 31 (in thousands): 2018 2017 Laboratory supplies $ 11,974 $ 13,085 Other prepaid expenses and other current assets 4,321 4,689 Prepaid expenses and other current assets $ 16,295 $ 17,774 Property and Equipment, net Property and equipment is comprised of the following at December 31 (in thousands): 2018 2017 Machinery and equipment $ 35,723 $ 35,409 Leasehold improvements 22,276 23,664 Computer hardware 4,763 5,091 Construction in progress 1,347 1,129 64,109 65,293 Less ― accumulated depreciation (35,683 ) (29,306 ) Property and equipment, net $ 28,426 $ 35,987 Depreciation expense was approximately $7.4 million, $7.6 million and $7.7 million for the years ended December 31, 2018, 2017 and 2016, respectively. Accrued Expenses Accrued expenses consist of the following at December 31 (in thousands): 2018 2017 Employee benefits and compensation $ 9,632 $ 11,186 Research and development accruals 8,476 17,542 Other accrued expenses 1,442 882 Accrued expenses $ 19,550 $ 29,610 |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Note 9 – Long-Term Debt Convertible Notes In the first quarter of 2016, the Company issued $325 million aggregate principal amount of convertible senior unsecured notes that will mature on February 1, 2023 (the “Notes”). The Notes are senior unsecured debt obligations and were issued at par. The Notes were issued pursuant to an indenture dated January 29, 2016 (the “Indenture”), between the Company and the trustee. The Company received $315.0 million in net proceeds from the offering after deducting underwriting fees and offering expenses. The Notes bear cash interest at a rate of 3.75%, payable on February 1 and August 1 of each year, beginning on August 1, 2016. The Notes are not redeemable prior to maturity and are convertible into shares of the Company’s common stock. The Notes are initially convertible into approximately 47,716,900 shares of the Company’s common stock based on the initial conversion rate of 146.8213 shares of the Company’s common stock per $1,000 principal amount of the Notes. This represents an initial conversion price of approximately $6.81 per share of the Company’s common stock, representing an approximate 22.5% conversion premium based on the last reported sale price of the Company’s common stock of $5.56 per share on January 25, 2016. In addition, the holders of the Notes may require the Company to repurchase the Notes at par value plus accrued and unpaid interest following the occurrence of a Fundamental Change (as described in the Indenture). If a holder of the Notes converts upon a Make-Whole Adjustment Event (as described in the Indenture), they may be eligible to receive a make-whole premium through an increase to the conversion rate up to a maximum of 179.8561 shares per $1,000 principal amount of Notes (subject to other adjustments as described in the Indenture). The Notes are accounted for in accordance with ASC 470-20, Debt with Conversion and Other Options (“ASC 470-20”) and ASC 815-40, Contracts in Entity’s Own Equity (“ASC 815-40”). Under ASC 815-40, to qualify for equity classification (or nonbifurcation, if embedded) the instrument (or embedded feature) must be both (1) indexed to the issuer’s stock and (2) meet the requirements of the equity classification guidance. Based upon the Company’s analysis, it was determined the Notes do contain embedded features indexed to its own stock, but do not meet the requirements for bifurcation, and therefore do not need to be separately accounted for as an equity component. Since the embedded conversion feature meets the equity scope exception from derivative accounting, and also since the embedded conversion option does not need to be separately accounted for as an equity component under ASC 470-20, the proceeds received from the issuance of the convertible debt were recorded as a liability on the consolidated balance sheets. In connection with the issuance of the Notes, the Company also paid $38.5 million, including expenses, to enter into privately negotiated capped call transactions with certain financial institutions (the “capped call transactions”). The capped call transactions are generally expected to reduce the potential dilution upon conversion of the Notes in the event that the market price per share of the Company’s common stock, as measured under the terms of the capped call transactions, is greater than the strike price of the capped call transactions, which initially corresponds to the conversion price of the Notes, and is subject to anti-dilution adjustments generally similar to those applicable to the conversion rate of the Notes. The cap price of the capped call transactions will initially be $9.73 per share, which represented a premium of approximately 75% based on the last reported sale price of the Company’s common stock of $5.56 per share on January 25, 2016, and is subject to certain adjustments under the terms of the capped call transactions. If, however, the market price per share of the Company’s common stock, as measured under the terms of the capped call transactions, exceeds the cap price, there would nevertheless be dilution upon conversion of the Notes to the extent that such market price exceeds the cap price. The Company evaluated the capped call transactions under ASC 815-10, Derivatives and Hedging – Overall and determined that it should be accounted for as a separate transaction and that the capped call transactions will be classified as an equity instrument. The Company incurred approximately $10.0 million of debt issuance costs during the first quarter of 2016 relating to the issuance of the Notes, which were recorded as a reduction to the Notes on the consolidated balance sheet. The $10.0 million of debt issuance costs is being amortized and recognized as additional interest expense over the seven-year contractual term of the Notes on a straight-line basis, which approximates the effective interest rate method. The Company also incurred $0.9 million of expenses related to the capped call transactions, which were recorded as a reduction to additional paid-in-capital. Total convertible notes payable consisted of the following at (in thousands): December 31, 2018 December 31, 2017 Principal amount of Notes $ 325,000 $ 325,000 Unamortized debt issuance costs (5,813 ) (7,237 ) Total convertible notes payable $ 319,187 $ 317,763 Interest expense incurred in connection with the Notes consisted of the following for the years ended December 31 (in thousands): 2018 2017 2016 Coupon interest at 3.75% $ 12,188 $ 12,188 $ 11,240 Amortization of debt issuance costs 1,424 1,424 1,305 Total interest expense on Notes $ 13,612 $ 13,612 $ 12,545 |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Note 10 – Stockholders’ Equity In December 2018, the Company entered into an At Market Sales Agreement (“December 2018 Sales Agreement”), which allows it to issue and sell up to $100 In April 2018, the Company completed a public offering of 34,848,507 shares of its common stock, including 4,545,457 shares of common stock that were issued upon the exercise in full of the option to purchase additional shares granted to the underwriters, at a price of $1.65 per share resulting in net proceeds 3.6 of approximately $54 million. In December 2017, the Company entered into an At Market Issuance Sales Agreement (“December 2017 Sales Agreement”), which allows it to issue and sell up to $75 million in gross proceeds of its common stock. During 2018, the Company sold 17.2 million shares of common stock under the December 2017 Sales Agreement resulting in $35.9 million in net proceeds at a weighted average sales price of $2.11 50.3 million shares of common stock under the December 2017 Sales Agreement resulting in $37.9 In January 2017, the Company entered into an At Market Issuance Sales Agreement (“January 2017 Sales Agreement”), which allowed it to issue and sell up to $75 million in gross proceeds of its common stock. During 2017, the Company sold 50.9 million shares of common stock under the January 2017 Sales Agreement resulting in $63.4 million in net proceeds at a weighted average sales price of $1.27 per share. In January 2018, the Company sold 6.8 million shares of common stock resulting in $10.3 million in net proceeds 1.54 The January 2017 Sales Agreement was fully utilized at that time. During the first quarter of 2016, in connection with the Company’s issuance of the Notes, the Company also entered into privately negotiated capped call transactions as discussed in Note 9. The cost of the capped call transactions and associated expenses totaling $38.5 million were recorded as a reduction to additional paid-in-capital. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Note 11 – Stock-Based Compensation Stock Options The 2015 Stock Incentive Plan, as amended (“2015 Plan”), was approved at the Company’s annual meeting of stockholders in June 2015. Under the 2015 Plan, equity awards may be granted to officers, directors, employees and consultants of and advisors to the Company and any present or future subsidiary. The 2015 Plan authorizes the issuance of up to 56,000,000 shares of the Company’s common stock under equity awards granted under the plan, including an increase of 20,000,000 shares approved at the Company’s 2018 annual meeting of stockholders. All such shares authorized for issuance under the 2015 Plan have been reserved. The 2015 Plan will expire on March 4, 2025. The Amended and Restated 2005 Stock Incentive Plan (“2005 Plan”) expired in February 2015 and no new awards may be made under such plan, although awards will continue to be outstanding in accordance with their terms. The 2015 Plan permits and the 2005 Plan permitted the grant of stock options (including incentive stock options), restricted stock, stock appreciation rights and restricted stock units. In addition, under the 2015 Plan, unrestricted stock, stock units and performance awards may be granted. Stock options and stock appreciation rights generally have a maximum term of 10 years and may be or were granted with an exercise price that is no less than 100% of the fair market value of the Company’s common stock at the time of grant. Grants of stock options are generally subject to vesting over periods ranging from one to four years. Stock Options Awards The following is a summary of option activity under the 2015 Plan and the 2005 Plan for the year ended December 31, 2018: 2015 Plan 2005 Plan Stock Options Weighted- Average Exercise Price Stock Options Weighted- Average Exercise Price Outstanding at January 1, 2018 33,675,720 $ 3.61 12,818,929 $ 3.26 Granted 16,613,409 $ 2.24 — $ — Exercised (252,728 ) $ 1.35 (563,125 ) $ 1.73 Canceled (2,180,163 ) $ 4.18 (602,432 ) $ 4.15 Outstanding at December 31, 2018 47,856,238 $ 3.12 11,653,372 $ 3.29 Shares exercisable at December 31, 2018 15,815,855 $ 4.65 11,653,372 $ 3.29 Shares available for grant at December 31, 2018 7,821,034 The fair value of stock options granted under the 2015 Plan was estimated at the date of grant using the Black-Scholes option-pricing model with the following assumptions: 2018 2017 2016 Weighted average fair value of options granted $1.74 $1.06 $1.88 Risk-free interest rate 2.26%-3.10% 1.61%-2.34% 0.97%-1.78% Dividend yield 0% 0% 0% Volatility 93.31%-115.61% 88.91%-114.10% 57.86%-108.88% Expected term (in years) 4.07-7.50 4.14-7.46 4.22-7.28 Expected forfeiture rate(1) N/A N/A 0%-16.33% (1) See Note 3 regarding the Company’s adoption of ASU 2016-09 in 2017. The Company used the Monte Carlo simulation model to determine the fair value of its 1.7 million stock options containing a market condition that were granted in 2016 (the “Performance Options”). The fair value of the Performance Options was estimated with the following assumptions: 99.11% volatility, a 1.74% risk-free interest rate, 5.62% forfeiture rate and 0% dividend yield, which resulted in fair values of $0.74 to $0.92 per share, and expected terms of 1.35 years to 3.50 years. The total aggregate intrinsic value and weighted-average remaining contractual term of stock options outstanding under the 2015 Plan and 2005 Plan as of December 31, 2018 was $10.2 million and 7.5 years, respectively. The total aggregate intrinsic value and weighted-average remaining contractual term of stock options exercisable under the 2015 Plan and 2005 Plan as of December 31, 2018 was $4.3 million and 5.7 years, respectively. The aggregate intrinsic value represents the total intrinsic value (the difference between the Company’s closing stock price on the last trading day of the period and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on December 31, 2018. This amount is subject to change based on changes to the closing price of the Company’s common stock. The aggregate intrinsic value of options exercised and vesting of restricted stock awards for 2018, 2017 and 2016 was $0.4 million, $0.1 million and $2.4 million, respectively. Employee Stock Purchase Plan The ESPP was approved at the Company annual meeting of stockholders in June 2013. The ESPP currently authorizes an aggregate of 7,600,000 shares of the Company’s common stock to be purchased, and the aggregate amount of shares will continue to increase 5% on each anniversary of its adoption up to a maximum of 8,000,000 shares. The number of authorized shares and the maximum number of shares both include an increase of 4,000,000 shares approved at the Company’s 2018 annual meeting of stockholders. The ESPP allows employees to purchase shares of common stock of the Company at each purchase date through payroll deductions of up to a maximum of 15% of their compensation, at 85% of the lesser of the market price of the shares at the time of purchase or the market price on the beginning date of an option period (or, if later, the date during the option period when the employee was first eligible to participate). At December 31, 2018, there were 3,363,066 shares available for issuance under the ESPP. The ESPP is considered compensatory for financial reporting purposes. As such, the fair value of ESPP shares was estimated at the date of grant using the Black-Scholes option-pricing model with the following assumptions: 2018 2017 2016 Range of Black-Scholes fair values of ESPP shares granted $0.36-$3.53 $0.45-$5.47 $1.86-$4.76 Risk-free interest rate 0.66%-2.24% 0.45%-1.13% 0.22%-0.61% Dividend yield 0% 0% 0% Volatility 52.19%-203.83% 45.98%-267.85% 43.03%-86.75% Expected term (in years) 0.5-2.0 0.5-2.0 0.5-2.0 Expected forfeiture rate(1) N/A N/A 5% (1) See Note 3 regarding the Company’s adoption of ASU 2016-09 in 2017. Restricted Stock Awards The following is a summary of restricted stock awards activity for the year ended December 31, 2018: Number of Shares Per Share Weighted- Average Grant-Date Fair Value Outstanding and Unvested at January 1, 2018 18,750 $ 4.99 Restricted stock granted ― $ ― Restricted stock vested ― $ ― Restricted stock forfeited (18,750 ) $ 4.99 Outstanding and Unvested at December 31, 2018 ― $ ― The Company recorded stock-based compensation expense for awards issued under the above mentioned plans in the consolidated statements of operations as follows (in thousands): Year Ended December 31, 2018 2017 2016 Research and development $ 10,575 $ 11,750 $ 11,168 General and administrative 7,739 8,059 7,992 Total stock-based compensation expense $ 18,314 $ 19,809 $ 19,160 As of December 31, 2018, there was approximately $45 million of total unrecognized compensation expense related to unvested stock options and the ESPP. This unrecognized non-cash compensation expense is expected to be recognized over a weighted-average period of 1.6 years, and will be allocated between research and development and general and administrative expenses accordingly. This estimate does not include the impact of other possible stock-based awards that may be made during future periods. |
Employee Benefits
Employee Benefits | 12 Months Ended |
Dec. 31, 2018 | |
Employee Benefits | Note 12 – Employee Benefits The Company maintains a defined contribution 401(k) retirement plan, pursuant to which employees may elect to contribute up to 100% of their compensation on a tax deferred basis up to the maximum amount permitted by the Internal Revenue Code of 1986, as amended. The Company matches 100% of the first 3% of the participants’ deferral, and 50% on the next 2% of the participants’ deferral, up to a potential 4% Company match. The Company’s matching contributions to the 401(k) plan vest immediately. Under its 401(k) plan, the Company has recorded expense of $1.2 million, $1.5 million and $1.5 million in 2018, 2017 and 2016, respectively. The Company’s foreign subsidiary has a pension plan under local tax and labor laws and is obligated to make contributions to this plan. Contributions and other expenses related to this plan were $0.8 million in 2018 and $0.5 million in 2017 and 2016. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Taxes | Note 13 – Income Taxes The Company’s loss from operations before income tax expense by jurisdiction for the years ended December 31 are as follows (in thousands): 2018 2017 2016 Domestic $ (176,290 ) $ (173,749 ) $ (273,134 ) Foreign (8,458 ) (10,020 ) (6,832 ) Total net loss $ (184,748 ) $ (183,769 ) $ (279,966 ) As a result of current and historical losses, there is no income tax provision for the years ended December 31, 2018, 2017 and 2016. Deferred tax assets (liabilities) consist of the following at December 31 (in thousands): 2018 2017 Deferred tax assets: Federal and State net operating loss carryforward $ 270,177 $ 240,550 Foreign net operating loss carryforward 12,321 11,577 Research tax credits 33,633 27,571 Non-cash stock-based compensation 10,888 8,048 Original discount interest 5,687 7,167 Other 7,987 9,116 Total deferred tax assets 340,693 304,029 Valuation allowance (337,515 ) (299,862 ) Net deferred tax assets $ 3,178 $ 4,167 Deferred tax liabilities: Intangibles (1,492 ) (1,789 ) Other (1,686 ) (2,378 ) Total deferred tax liabilities (3,178 ) (4,167 ) Net deferred tax assets $ — $ — The valuation allowance increased by $37.7 million for the year ended December 31, 2018 due to increases in deferred tax assets. The valuation allowance decreased $54.7 million during the year ended December 31, 2017 primarily due to the impact of the enactment of the Tax Cuts and Jobs Act of 2017 (the “Act”) and was partially offset by the generation of net operating losses in 2017. At December 31, 2017, the Company had provided provisional accounting for the tax effects of enactment of the Act. The Company re-measured certain of its U.S. deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future. As a result, the Company’s U.S. deferred tax balances at December 31, 2017 were revalued at the newly enacted tax rate of 21%, decreasing the net deferred tax asset (before valuation allowance) by approximately $132 million, offset by a decrease in the valuation allowance by the same amount. The Company completed its analysis of the Act in 2018, which resulted in no adjustment to income tax expenses on the Company’s consolidated statements of operations. The differences between the U.S. federal statutory tax rate and the Company’s effective tax rate are as follows: 2018 2017 2016 Statutory federal tax rate (21 )% (34 )% (34 )% State income taxes, net of federal benefit (3 )% (3 )% (3 )% Research and development and other tax credits (3 )% (2 )% (2 )% Other 1 % (1 )% 2 % Change in tax rate 5 % 70 % 0 % Change in valuation allowance 21 % (30 )% 37 % Income tax provision 0 % 0 % 0 % The change in the tax rate in 2018 is primarily related to changes in applicable state apportionment factors; whereas the change in the tax rate in 2017 resulted from the Act as discussed above. Realization of net deferred tax assets is dependent on the Company’s ability to generate future taxable income, which is uncertain. Accordingly, a full valuation allowance was recorded against these assets as of December 31, 2018 and 2017 as management believes it is more likely than not that the assets will not be realizable. As of December 31, 2018, the Company had net operating losses and research tax credits available as follows (in thousands): Amount Federal and State net operating losses expiring through the year 2037 $ 969,452 Federal and State net operating losses (no expiration) 164,443 Foreign net operating losses (no expiration) 56,003 Research tax credits expiring through the year 2038 33,539 Utilization of the net operating loss carryforwards and credits may be subject to an annual limitation due to prior ownership change of the Company. The Company does not expect such limitation, if any, to impact the use of the net operating losses and business tax credits. At December 31, 2018 and 2017, the Company did not have any unrecognized tax benefits. To the extent unrecognized tax benefits are ultimately recognized, it would affect the annual effective income tax rate unless otherwise offset by a corresponding change in the valuation allowance. The Company does not expect that the amounts of unrecognized tax benefits will change significantly within the next twelve months. The Company files income tax returns in the U.S. federal jurisdiction and in various states, as well as in Sweden. The Company had U.S. tax net operating losses and credit carryforwards that are subject to examination from 1999 through 2018. The statute extends for a number of years beyond the year in which the losses were generated for tax purposes. Since a portion of these carryforwards may be utilized in the future, many of these attribute carryforwards remain subject to examination. The returns in Sweden are subject to examination from 2013 through 2018. The Company’s policy is to recognize interest and penalties related to income tax matters in income tax expense. As of December 31, 2018 and 2017, the Company had no accruals for interest or penalties related to income tax matters. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 14 – Commitments and Contingencies Operating Leases The Company conducts its operations from leased facilities. The operating leases for these facilities have terms expiring through 2026, unless earlier terminated by the Company in 2023. The leases contain provisions for future rent increases. Also, the leases obligate the Company to pay building operating costs. The Company has recorded a deferred rent liability to account for the funding under improvement allowances and to record rent expense on a straight-line basis for these operating leases. Future minimum rental commitments under non-cancelable leases as of December 31, 2018 are as follows (in thousands): Year Operating Leases 2019 $ 6,682 2020 5,372 2021 5,350 2022 6,910 2023 5,283 Total minimum lease payments $ 29,597 Total facility rent expense was approximately $5.0 million, $8.4 million and $7.0 million for the years ended December 31, 2018, 2017 and 2016, respectively. In January 2018, the Company’s 1201 Clopper Road lease was terminated, and the Company paid a termination fee to the landlord of $5.3 million, which the Company believes was less than the potential total lease and operating expense cash obligations that could have been incurred over one year. The Company recorded total expense, which includes the termination fee and write-down of the related leasehold improvements, and is partially offset by deferred rent expense previously recorded, of $0.9 million in the first quarter of 2018 in connection with the termination of the 1201 Clopper Road lease. Contingencies In July 2018, the Company terminated a 2007 agreement to license certain rights from Wyeth Holdings LLC (formerly Wyeth Holdings Corporation), a subsidiary of Pfizer Inc. (“Wyeth”). The Wyeth license offered a non-exclusive, worldwide license to a family of patents and patent applications covering VLP technology for use in human vaccines in certain fields, with expected patent expiration in early 2022. At present, the Company has no programs to which the Wyeth license applies, and CPLB’s recombinant trivalent seasonal VLP influenza vaccine (“CadiFlu”) is only licensed in India. In September 2015, due to CPLB’s initiation of a Phase 3 clinical trial of CadiFlu in 2014, the Company entered into an amendment to the Wyeth license that, among other things, increased the milestone payment (“Milestone”) from $3 million to as much as $4 million if not paid before December 31, 2017. The Milestone 4 was paid in the first quarter of 2018. The Milestone was recorded as a research and development expense in 2014. Payments under the Wyeth license as of December 31, 2018 aggregated to $11.6 million. |
Related Party Transaction
Related Party Transaction | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transaction | Note 15 – Related Party Transaction In July 2017, the Company entered into a consulting agreement with Dr. Sarah Frech, the spouse of Mr. Stanley C. Erck, the Company’s President and Chief Executive Officer. Dr. Frech is a seasoned biotechnology executive with significant experience managing multiple clinical programs. Under the agreement, Dr. Frech provides clinical development and operations services related to the Company’s Phase 3 clinical trial of ResVax and other professional services. The agreement has been extended to terminate in July 2019. In 2018 and 2017, the Company incurred $0.3 million and $0.2 million, respectively, in consulting expenses under the agreement. The amount due and unpaid for services performed under the agreement at December 31, 2018 and 2017 was less than $0.1 million. |
Quarterly Financial Information
Quarterly Financial Information | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information | Note 16 – Quarterly Financial Information (Unaudited) The Company’s unaudited quarterly information for the years ended December 31, 2018 and 2017 is as follows: Quarter Ended March 31 June 30 September 30 December 31 (in thousands, except per share data) 2018: Revenue $ 9,653 $ 10,773 $ 7,735 $ 6,127 Net loss $ (46,352 ) $ (44,492 ) $ (44,570 ) $ (49,334 ) Net loss per share $ (0.14 ) $ (0.12 ) $ (0.12 ) $ (0.13 ) Quarter Ended March 31 June 30 September 30 December 31 (in thousands, except per share data) 2017: Revenue $ 5,680 $ 6,732 $ 8,352 $ 10,412 Net loss $ (43,854 ) $ (44,465 ) $ (44,607 ) $ (50,843 ) Net loss per share $ (0.16 ) $ (0.16 ) $ (0.15 ) $ (0.16 ) The net loss per share was calculated for each three-month period on a stand-alone basis. As a result, the sum of the net loss per share for the four quarters may not equal the net loss per share for the respective twelve-month period. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The consolidated financial statements include the accounts of Novavax, Inc. and its wholly owned subsidiary, Novavax AB. All intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in conformity with generally accepted accounting principles in the United States (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of highly liquid investments with maturities of three months or less from the date of purchase. Cash and cash equivalents consist of the following at December 31 (in thousands): 2018 2017 Cash $ 6,750 $ 10,482 Money market funds 39,168 36,762 Asset-backed securities 15,000 16,007 Corporate debt securities 9,236 43,056 Cash and cash equivalents $ 70,154 $ 106,307 Cash equivalents are recorded at cost, which approximate fair value due to their short-term nature. |
Marketable Securities | Marketable Securities Marketable securities consist of debt securities with maturities greater than three months from the date of purchase that include commercial paper, asset-backed securities and corporate notes. Classification of marketable securities between current and non-current is dependent upon the maturity date at the balance sheet date taking into consideration the Company’s ability and intent to hold the investment to maturity. Interest and dividend income is recorded when earned and included in investment income in the consolidated statements of operations. Premiums and discounts, if any, on marketable securities are amortized or accreted to maturity and included in investment income in the consolidated statements of operations. The specific identification method is used in computing realized gains and losses on the sale of the Company’s securities. The Company classifies its marketable securities with readily determinable fair values as “available-for-sale.” Investments in securities that are classified as available-for-sale are measured at fair market value in the consolidated balance sheets, and unrealized gains and losses on marketable securities are reported as a separate component of stockholders’ deficit until realized. Marketable securities are evaluated periodically to determine whether a decline in value is “other-than-temporary.” The term “other-than-temporary” is not intended to indicate a permanent decline in value. Rather, it means that the prospects for a near term recovery of value are not necessarily favorable, or that there is a lack of evidence to support fair values equal to, or greater than, the carrying value of the security. Management reviews criteria, such as the magnitude and duration of the decline, as well as the Company’s ability to hold the securities until market recovery, to predict whether the loss in value is other-than-temporary. If a decline in value is determined to be other-than-temporary, the value of the security is reduced and the impairment is recorded as other income (expense) in the consolidated statements of operations. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments, which possibly expose the Company to concentration of credit risk, consist primarily of cash and cash equivalents and marketable securities. The Company’s investment policy limits investments to certain types of instruments, including asset-backed securities, high-grade corporate debt securities and money market funds, places restrictions on maturities and concentrations in certain industries and requires the Company to maintain a certain level of liquidity. At times, the Company maintains cash balances in financial institutions, which may exceed federally insured limits. The Company has not experienced any losses relating to such accounts and believes it is not exposed to a significant credit risk on its cash and cash equivalents. |
Fair Value Measurements | Fair Value Measurements The Company applies Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures (“ASC 820”), for financial and non-financial assets and liabilities. ASC 820 discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow) and the cost approach (cost to replace the service capacity of an asset or replacement cost). The statement utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels: Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions. |
Restricted Cash | Restricted Cash The Company’s current and non-current restricted cash includes payments received under the Grant Agreement (as defined in Note 7) with the Bill & Melinda Gates Foundation (“BMGF”) under which the Company was awarded a grant of up to $89.1 million and cash collateral accounts under letters of credit that serve as security deposits for certain facility leases. The Company has and will utilize the Grant Agreement funds as it incurs expenses for services performed under the agreement. At December 31, 2018 and 2017, the restricted cash balances (both current and non-current) consist of payments received under the Grant Agreement of $10.8 million and $27.4 million, respectively, and security deposits of $1.0 million and $1.7 million, respectively. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the statement of cash flows at December 31 (in thousands): 2018 2017 Cash and cash equivalents $ 70,154 $ 106,307 Restricted cash current 10,847 28,234 Restricted cash non-current 958 890 Cash, cash equivalents and restricted cash $ 81,959 $ 135,431 |
Property and Equipment | Property and Equipment Property and equipment are stated at cost and are depreciated using the straight-line method over the estimated useful lives of the assets, generally three to seven years. Amortization of leasehold improvements is computed using the straight-line method over the shorter of the estimated useful lives of the improvements or the remaining term of the lease. Repairs and maintenance costs are expensed as incurred. |
Other Intangible Assets | Other Intangible Assets The Company’s intangible assets include proprietary adjuvant technology and collaboration agreements, which were measured at their estimated fair values as of their acquisition dates. Amortization expense for intangible assets is recorded on a straight-line basis over the expected useful lives of the assets, ranging from seven to 20 years. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable based on the criteria for accounting for the impairment or disposal of long-lived assets under ASC Topic 360, Property, Plant and Equipment. |
Goodwill | Goodwill Goodwill is subject to impairment tests annually or more frequently should indicators of impairment arise. The Company has determined that, because its only business is the development of recombinant vaccines, it operates as a single operating segment and has one reporting unit. The Company utilizes primarily the market approach and, if considered necessary, the income approach to determine if it has an impairment of its goodwill. The market approach is based on market value of invested capital. To ensure that the Company’s capital stock is the appropriate measurement of fair value, the Company considers factors such as its trading volume, diversity of investors and analyst coverage. If considered necessary, the income approach is used to corroborate the results of the market approach. Goodwill impairment may exist if the carrying value of the reporting unit exceeds its estimated fair value. If the carrying value of the reporting unit exceeds its fair value, step two of the impairment analysis is performed. In step two of the analysis, an impairment loss is recorded equal to the excess of the carrying value of the reporting unit’s goodwill over its implied fair value, should such a circumstance arise. At December 31, 2018 and 2017, the Company used the market approach to determine if the Company had an impairment of its goodwill. The fair value of the Company’s single reporting unit was substantially higher than its carrying value, resulting in no impairment to goodwill at December 31, 2018 and 2017. |
Equity Method Investment | Equity Method Investment The Company has an equity investment in CPL Biologicals Private Limited (“CPLB”). The Company accounts for this investment using the equity method (see Note 7). Under the equity method of accounting, investments are stated at initial cost and are adjusted for subsequent additional investments and the Company’s proportionate share of earnings or losses and distributions up to the amount initially invested or advanced. |
Revenue Recognition | Revenue Recognition In May 2014, the Financial Accounting Standards Board (“FASB”), issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09” or “Topic 606”), and subsequently issued amendments to ASU 2014-09, to supersede nearly all existing revenue recognition guidance under U.S. GAAP. The new revenue standard became effective for the Company on January 1, 2018, and was adopted using the modified retrospective method. The adoption of the new revenue standard as of January 1, 2018 did not materially change the Company’s timing of revenue recognition as the majority of its revenue continues to be recognized under its Grant Agreement with BMGF (see discussion below). Since the Company did not identify any accounting changes that impact its revenue recognition timing, no adjustment to accumulated deficit was required upon adoption. Under the new revenue standard for arrangements that are determined within the scope of Topic 606, the Company recognizes revenue following the five-step model: (i) identify the contract(s) with a customer; (ii) identify the performance obligation(s) 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) the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of Topic 606, the Company assesses the goods or services promised within each contract and determines the performance obligations, and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. The Company performs research and development under grant, license and clinical development agreements. Payments received in advance of work performed are recorded as deferred revenue. The Company’s current revenue primarily consists of revenue under its Grant Agreement with BMGF (see Note 7). The Company is reimbursed for certain costs that support development activities, including the Company’s global Phase 3 clinical trial in pregnant women in their third trimester, product licensing efforts and efforts to obtain World Health Organization (“WHO”) prequalification of its RSV F Vaccine for infants via maternal immunization (“ResVax™”). The Company’s Grant Agreement does not provide a direct economic benefit to BMGF. Rather, the Company entered into an agreement with BMGF to make a certain amount of ResVax available and accessible at affordable pricing to people in certain low and middle income countries. Based on these circumstances, the Company does not consider BMGF to be a customer and concluded the Grant Agreement is outside the scope of Topic 606. Payments received under the Grant Agreement are considered conditional contributions under the scope of ASC 958-605, Not-for-Profit Entities – Revenue Recognition , and are recorded as deferred revenue until the period in which such research and development activities are performed and revenue can be recognized. The Company analyzed the Grant Agreement with BMGF to determine whether the payments received should be recorded as revenue or as a reduction to research and development expenses. In reaching the determination that such payments should be recorded as revenue, management considered a number of factors, including whether the Company is principal under the arrangement, and whether the arrangement is significant to, and part of, the Company’s core operations. Further, management has consistently applied its policy of presenting such amounts as revenue. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for stock-based compensation related to grants of stock options, restricted stock awards and purchases under the Company’s Employee Stock Purchase Plan, as amended and restated (the “ESPP”) at fair value. The Company recognizes compensation expense related to such awards on a straight-line basis over the requisite service period (generally the vesting period) of the equity awards, which typically occurs ratably over periods ranging from six months to four years. Effective January 1, 2017, the Company accounts for forfeitures when they occur (see discussion below). The expected term of stock options granted is based on the Company’s historical option exercise experience and post-vesting forfeiture experience using the historical expected term from the vesting date, whereas the expected term for purchases under the ESPP is based on the purchase periods included in the offering. The expected volatility is determined using historical volatilities based on stock prices over a look-back period corresponding to the expected term. The risk-free interest rate is determined using the yield available for zero-coupon U.S. Government issues with a remaining term equal to the expected term. The Company has never paid a dividend, and as such, the dividend yield is zero, and the Company does not intend to pay dividends in the foreseeable future. The Company adopted ASU 2016-09, Compensation – Stock Compensation (Topic 718) on the effective date, January 1, 2017, and, as part of the adoption, elected to account for forfeitures when they occur. The impact from adoption of the provisions related to forfeitures was reflected in the Company’s consolidated financial statements on a modified retrospective basis, resulting in an adjustment to accumulated deficit of $0.6 million on January 1, 2017. Restricted stock awards are recorded as compensation expense over the expected vesting period based on the fair value at the award date using the straight-line method of amortization. See Note 11 for a further discussion on stock-based compensation. |
Research and Development Expenses | Research and Development Expenses Research and development expenses include salaries, stock-based compensation, laboratory supplies, consultants and subcontractors, including external contract research organizations (“CROs”), and other expenses associated with the Company’s process development, manufacturing, clinical, regulatory and quality assurance activities for its programs. In addition, related indirect costs such as, fringe benefits and overhead expenses, are also included in research and development expenses. Research and development activities are expensed as incurred. Accrued Research and Development Expenses The Company accrues research and development expenses, including clinical trial-related expenses, as the services are performed, which may include estimates of those expenses incurred, but not invoiced. The Company uses information provided by third-party service providers and CROs, invoices and internal estimates to determine the progress of work performed on the Company’s behalf. Assumptions based on clinical trial protocols, contracts and participant enrollment data are also developed to determine and analyze these estimates and accruals. |
Income Taxes | Income Taxes The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes . Under the liability method, deferred income taxes are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and operating loss carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which those temporary differences are expected to be recovered or settled. The effect of changes in tax rates on deferred tax assets and liabilities is recognized in income in the period such changes are enacted. A valuation allowance is established when necessary to reduce net deferred tax assets to the amount expected to be realized. Tax benefits associated with uncertain tax positions are recognized in the period in which one of the following conditions is satisfied: (1) the more likely than not recognition threshold is satisfied; (2) the position is ultimately settled through negotiation or litigation; or (3) the statute of limitations for the taxing authority to examine and challenge the position has expired. Tax benefits associated with an uncertain tax position are reversed in the period in which the more likely than not recognition threshold is no longer satisfied. Interest and penalties related to income tax matters are recorded as income tax expense. At December 31, 2018 and 2017, the Company had no accruals for interest or penalties related to income tax matters. |
Net Loss per Share | Net Loss per Share Net loss per share is computed using the weighted average number of shares of common stock outstanding. At December 31, 2018, 2017 and 2016, the Company had outstanding stock options and unvested restricted stock awards totaling 59,509,610, 46,513,399 and 39,277,732 underlying shares of the Company’s common stock, respectively. At December 31, 2018 and 2017, the Company’s Notes (as defined in Note 9) would have been convertible into approximately 47,716,900 shares of the Company’s common stock assuming a common stock price of $6.81 or higher. These and any shares due to the Company upon settlement of its capped call transactions are excluded from the computation, as their effect is antidilutive. |
Foreign Currency | Foreign Currency The accompanying consolidated financial statements are presented in U.S. dollars. The functional currency of Novavax AB, which is located in Sweden, is the local currency (Swedish Krona). The translation of assets and liabilities of Novavax AB to U.S. dollars is made at the exchange rate in effect at the consolidated balance sheet date, while equity accounts are translated at historical rates. The translation of the statement of operations data is made at the average exchange rate in effect for the period. The translation of operating cash flow data is made at the average exchange rate in effect for the period, and investing and financing cash flow data is translated at the exchange rate in effect at the date of the underlying transaction. Translation gains and losses are recognized as a component of accumulated other comprehensive loss in the accompanying consolidated balance sheets. The foreign currency translation adjustment balance included in accumulated other comprehensive loss was $11.2 million and $8.6 million at December 31, 2018 and 2017, respectively. |
Segment Information | Segment Information The Company manages its business as one operating segment: the development of recombinant vaccines. The Company does not operate separate lines of business with respect to its vaccine candidates. Accordingly, the Company does not have separately reportable segments as defined by ASC Topic 280, Segment Reporting . |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted In May 2014, the FASB issued ASU 2014-09, which supersedes nearly all existing revenue recognition guidance under Topic 605, Revenue Recognition . The new standard requires a company to recognize revenue when it transfers goods and services to customers in an amount that reflects the consideration that the company expects to receive for those goods or services. ASU 2014-09 defines a five-step process that includes identifying the contract with the customer, identifying the performance obligations in the contract, determining the transaction price, allocating the transaction price to the performance obligations in the contract and recognizing revenue when (or as) the entity satisfies the performance obligations. The Company completed its assessment of the potential changes from adopting ASU 2014-09, primarily by reviewing its current revenue streams and deferred revenue balances. Based on the Company’s assessment, there were no material changes to the timing of recognition of its revenue as the majority of its revenue continues to be recognized under the Grant Agreement with BMGF. The Company applied ASU 2014-09 on a modified retrospective basis as of January 1, 2018, having no impact to the Company’s consolidated financial position or results of operations. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows – Restricted Cash (“ASU 2016-18”), which requires that the change in total cash and cash equivalents at the beginning of period and end of period on the statement of cash flows include restricted cash and restricted cash equivalents. ASU 2016-18 also requires companies who report cash and cash equivalents and restricted cash separately on the balance sheet to reconcile those amounts to the statement of cash flows. The standard was adopted on its effective date of January 1, 2018, and was applied using a retrospective transition method to each period presented. Although the Company’s restricted cash is now included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statements of cash flows, the adoption did not have a material impact on the other aspects of the Company’s statements of cash flows, or its consolidated financial statements as a whole, including related disclosures. Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), Topic 842 became effective on January 1, 2019. The Company will adopt the standard under the optional transition method, which will not require restatement of prior periods. The Company will elect the package of practical expedients permitted under the transition guidance, which allows the Company to carryforward its historical lease classification, its assessment on whether a contract is or contains a lease and its initial direct costs for any leases that exist prior to adoption of the standard. The Company will also elect to combine lease and non-lease components and to keep leases with an initial term of 12 months or less off its consolidated balance sheet and recognize the associated lease payments in its consolidated statements of operations on a straight-line basis over the lease term. The Company expects to record approximately $12 million as total right-of-use assets, net of the deferred rent liability, and $22 million in total lease liabilities on its consolidated balance sheet as of January 1, 2019. The Company does not expect the adoption to have a material impact on its consolidated statements of cash flows or results of operations. In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350) (“ASU 2017-04”), which will simplify the goodwill impairment calculation by eliminating Step 2 from the current goodwill impairment test. The new standard does not change how a goodwill impairment is identified. The Company will continue to perform its quantitative goodwill impairment test by comparing the fair value of its reporting unit to its carrying amount, but if the Company is required to recognize a goodwill impairment charge, under the new standard, the amount of the charge will be calculated by subtracting the reporting unit’s fair value from its carrying amount. Under the current standard, if the Company is required to recognize a goodwill impairment charge, Step 2 requires it to calculate the implied value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination and the amount of the charge is calculated by subtracting the reporting unit’s implied fair value of goodwill from the goodwill carrying amount. The standard will be effective January 1, 2020 for the Company, with early adoption permitted, and should be applied prospectively from the date of adoption. The Company is currently evaluating when it will adopt ASU 2017-04 and its expected impact to related disclosures, but the adoption will not have an impact on the historical financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Cash and Equivalents | Cash and cash equivalents consist of highly liquid investments with maturities of three months or less from the date of purchase. Cash and cash equivalents consist of the following at December 31 (in thousands): 2018 2017 Cash $ 6,750 $ 10,482 Money market funds 39,168 36,762 Asset-backed securities 15,000 16,007 Corporate debt securities 9,236 43,056 Cash and cash equivalents $ 70,154 $ 106,307 |
Reconciliation of Cash, Cash Equivalents and Restricted Cash | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the statement of cash flows at December 31 (in thousands): 2018 2017 Cash and cash equivalents $ 70,154 $ 106,307 Restricted cash current 10,847 28,234 Restricted cash non-current 958 890 Cash, cash equivalents and restricted cash $ 81,959 $ 135,431 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Hierarchy | The following table represents the Company’s fair value hierarchy for its financial assets and liabilities measured at fair value on a recurring basis (in thousands): Fair Value at December 31, 2018 Fair Value at December 31, 2017 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Assets Money market funds(1) $ 39,168 $ ― $ ― $ 36,762 $ ― $ ― Asset-backed securities(2) ― 19,997 ― ― 29,750 ― Corporate debt securities(3) ― 26,219 ― ― 80,309 ― Total cash equivalents and marketable securities $ 39,168 $ 46,216 $ ― $ 36,762 $ 110,059 $ ― Liabilities Convertible notes payable $ ― $ 197,935 $ ― $ ― $ 152,396 $ ― (1) Classified as cash and cash equivalents as of December 31, 2018 and 2017, respectively (see Note 3). (2) Includes $15,000 and $16,007 classified as cash and cash equivalents as of December 31, 2018 and 2017, respectively, on the consolidated balance sheets. (3) Includes $9,236 and $43,056 classified as cash and cash equivalents as of December 31, 2018 and 2017, respectively, on the consolidated balance sheets. |
Marketable Securities (Tables)
Marketable Securities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments Classified as Available-For-Sale | Marketable securities classified as available-for-sale as of December 31, 2018 and 2017 were comprised of (in thousands): December 31, 2018 December 31, 2017 Gross Gross Gross Gross Amortized Unrealized Unrealized Amortized Unrealized Unrealized Cost Gains Losses Fair Value Cost Gains Losses Fair Value Asset-backed securities $ 4,999 $ ― $ (2 ) $ 4,997 $ 13,748 $ ― $ (5 ) $ 13,743 Corporate debt securities 16,986 ― (3 ) 16,983 37,265 ― (12 ) 37,253 Total $ 21,985 $ ― $ (5 ) $ 21,980 $ 51,013 $ ― $ (17 ) $ 50,996 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The changes in the carrying amounts of goodwill for the years ended December 31, 2018 and 2017 were as follows (in thousands): Year Ended December 31, 2018 2017 Beginning balance $ 53,563 $ 51,673 Currency translation adjustments (1,596 ) 1,890 Ending balance $ 51,967 $ 53,563 |
Schedule of Identifiable Intangible Assets | Purchased intangible assets consisted of the following as of December 31, 2018 and 2017 (in thousands): December 31, 2018 December 31, 2017 Gross Carrying Amount Accumulated Amortization Intangible Assets, Net Gross Carrying Amount Accumulated Amortization Intangible Assets, Net Finite-lived intangible assets: Proprietary adjuvant technology $ 8,357 $ (2,263 ) $ 6,094 $ 9,086 $ (2,006 ) $ 7,080 Collaboration agreements 3,773 (3,326 ) 447 4,103 (3,310 ) 793 Total identifiable intangible assets $ 12,130 $ (5,589 ) $ 6,541 $ 13,189 $ (5,316 ) $ 7,873 |
Schedule of Estimated Amortization Expense | Estimated amortization expense for existing intangible assets for each of the five succeeding years ending December 31, is as follows (in thousands): Year Amount 2019 $ 700 2020 583 2021 418 2022 418 2023 418 |
Other Financial Information (Ta
Other Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consist of the following at December 31 (in thousands): 2018 2017 Laboratory supplies $ 11,974 $ 13,085 Other prepaid expenses and other current assets 4,321 4,689 Prepaid expenses and other current assets $ 16,295 $ 17,774 |
Property and Equipment, Net | Property and equipment is comprised of the following at December 31 (in thousands): 2018 2017 Machinery and equipment $ 35,723 $ 35,409 Leasehold improvements 22,276 23,664 Computer hardware 4,763 5,091 Construction in progress 1,347 1,129 64,109 65,293 Less ― accumulated depreciation (35,683 ) (29,306 ) Property and equipment, net $ 28,426 $ 35,987 |
Accrued Expenses | Accrued expenses consist of the following at December 31 (in thousands): 2018 2017 Employee benefits and compensation $ 9,632 $ 11,186 Research and development accruals 8,476 17,542 Other accrued expenses 1,442 882 Accrued expenses $ 19,550 $ 29,610 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Notes Payable | Total convertible notes payable consisted of the following at (in thousands): December 31, 2018 December 31, 2017 Principal amount of Notes $ 325,000 $ 325,000 Unamortized debt issuance costs (5,813 ) (7,237 ) Total convertible notes payable $ 319,187 $ 317,763 |
Interest Expense | Interest expense incurred in connection with the Notes consisted of the following for the years ended December 31 (in thousands): 2018 2017 2016 Coupon interest at 3.75% $ 12,188 $ 12,188 $ 11,240 Amortization of debt issuance costs 1,424 1,424 1,305 Total interest expense on Notes $ 13,612 $ 13,612 $ 12,545 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | |
Summary of Option Activity | The following is a summary of option activity under the 2015 Plan and the 2005 Plan for the year ended December 31, 2018: 2015 Plan 2005 Plan Stock Options Weighted- Average Exercise Price Stock Options Weighted- Average Exercise Price Outstanding at January 1, 2018 33,675,720 $ 3.61 12,818,929 $ 3.26 Granted 16,613,409 $ 2.24 — $ — Exercised (252,728 ) $ 1.35 (563,125 ) $ 1.73 Canceled (2,180,163 ) $ 4.18 (602,432 ) $ 4.15 Outstanding at December 31, 2018 47,856,238 $ 3.12 11,653,372 $ 3.29 Shares exercisable at December 31, 2018 15,815,855 $ 4.65 11,653,372 $ 3.29 Shares available for grant at December 31, 2018 7,821,034 |
Assumptions used to Estimate Grant Date Fair Value of Stock Options granted using Black-Scholes Option-Pricing Model | The fair value of stock options granted under the 2015 Plan was estimated at the date of grant using the Black-Scholes option-pricing model with the following assumptions: 2018 2017 2016 Weighted average fair value of options granted $1.74 $1.06 $1.88 Risk-free interest rate 2.26%-3.10% 1.61%-2.34% 0.97%-1.78% Dividend yield 0% 0% 0% Volatility 93.31%-115.61% 88.91%-114.10% 57.86%-108.88% Expected term (in years) 4.07-7.50 4.14-7.46 4.22-7.28 Expected forfeiture rate(1) N/A N/A 0%-16.33% (1) See Note 3 regarding the Company’s adoption of ASU 2016-09 in 2017. |
Summary of Restricted Stock Awards Activity | The following is a summary of restricted stock awards activity for the year ended December 31, 2018: Number of Shares Per Share Weighted- Average Grant-Date Fair Value Outstanding and Unvested at January 1, 2018 18,750 $ 4.99 Restricted stock granted ― $ ― Restricted stock vested ― $ ― Restricted stock forfeited (18,750 ) $ 4.99 Outstanding and Unvested at December 31, 2018 ― $ ― |
Stock-Based Compensation Expense | The Company recorded stock-based compensation expense for awards issued under the above mentioned plans in the consolidated statements of operations as follows (in thousands): Year Ended December 31, 2018 2017 2016 Research and development $ 10,575 $ 11,750 $ 11,168 General and administrative 7,739 8,059 7,992 Total stock-based compensation expense $ 18,314 $ 19,809 $ 19,160 |
Employee Stock Purchase Plan [Member] | |
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | |
Assumptions used to Estimate Grant Date Fair Value of Stock Options granted using Black-Scholes Option-Pricing Model | The ESPP is considered compensatory for financial reporting purposes. As such, the fair value of ESPP shares was estimated at the date of grant using the Black-Scholes option-pricing model with the following assumptions: 2018 2017 2016 Range of Black-Scholes fair values of ESPP shares granted $0.36-$3.53 $0.45-$5.47 $1.86-$4.76 Risk-free interest rate 0.66%-2.24% 0.45%-1.13% 0.22%-0.61% Dividend yield 0% 0% 0% Volatility 52.19%-203.83% 45.98%-267.85% 43.03%-86.75% Expected term (in years) 0.5-2.0 0.5-2.0 0.5-2.0 Expected forfeiture rate(1) N/A N/A 5% (1) See Note 3 regarding the Company’s adoption of ASU 2016-09 in 2017. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Company's loss from operations before income tax expense by jurisdiction | The Company’s loss from operations before income tax expense by jurisdiction for the years ended December 31 are as follows (in thousands): 2018 2017 2016 Domestic $ (176,290 ) $ (173,749 ) $ (273,134 ) Foreign (8,458 ) (10,020 ) (6,832 ) Total net loss $ (184,748 ) $ (183,769 ) $ (279,966 ) |
Deferred Tax Assets (Liabilities) | Deferred tax assets (liabilities) consist of the following at December 31 (in thousands): 2018 2017 Deferred tax assets: Federal and State net operating loss carryforward $ 270,177 $ 240,550 Foreign net operating loss carryforward 12,321 11,577 Research tax credits 33,633 27,571 Non-cash stock-based compensation 10,888 8,048 Original discount interest 5,687 7,167 Other 7,987 9,116 Total deferred tax assets 340,693 304,029 Valuation allowance (337,515 ) (299,862 ) Net deferred tax assets $ 3,178 $ 4,167 Deferred tax liabilities: Intangibles (1,492 ) (1,789 ) Other (1,686 ) (2,378 ) Total deferred tax liabilities (3,178 ) (4,167 ) Net deferred tax assets $ — $ — |
Tax Rate Differences | The differences between the U.S. federal statutory tax rate and the Company’s effective tax rate are as follows: 2018 2017 2016 Statutory federal tax rate (21 )% (34 )% (34 )% State income taxes, net of federal benefit (3 )% (3 )% (3 )% Research and development and other tax credits (3 )% (2 )% (2 )% Other 1 % (1 )% 2 % Change in tax rate 5 % 70 % 0 % Change in valuation allowance 21 % (30 )% 37 % Income tax provision 0 % 0 % 0 % |
Tax Return Reported Federal Net Operating Losses and Tax Credits Available | As of December 31, 2018, the Company had net operating losses and research tax credits available as follows (in thousands): Amount Federal and State net operating losses expiring through the year 2037 $ 969,452 Federal and State net operating losses (no expiration) 164,443 Foreign net operating losses (no expiration) 56,003 Research tax credits expiring through the year 2038 33,539 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future Minimum Rental Commitments Under Operating Leases | Future minimum rental commitments under non-cancelable leases as of December 31, 2018 are as follows (in thousands): Year Operating Leases 2019 $ 6,682 2020 5,372 2021 5,350 2022 6,910 2023 5,283 Total minimum lease payments $ 29,597 |
Quarterly Financial Informati_2
Quarterly Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Information | The Company’s unaudited quarterly information for the years ended December 31, 2018 and 2017 is as follows: Quarter Ended March 31 June 30 September 30 December 31 (in thousands, except per share data) 2018: Revenue $ 9,653 $ 10,773 $ 7,735 $ 6,127 Net loss $ (46,352 ) $ (44,492 ) $ (44,570 ) $ (49,334 ) Net loss per share $ (0.14 ) $ (0.12 ) $ (0.12 ) $ (0.13 ) Quarter Ended March 31 June 30 September 30 December 31 (in thousands, except per share data) 2017: Revenue $ 5,680 $ 6,732 $ 8,352 $ 10,412 Net loss $ (43,854 ) $ (44,465 ) $ (44,607 ) $ (50,843 ) Net loss per share $ (0.16 ) $ (0.16 ) $ (0.15 ) $ (0.16 ) |
Going Concern (Narrative) (Det
Going Concern (Narrative) (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 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Net loss | $ (49,334) | $ (44,570) | $ (44,492) | $ (46,352) | $ (50,843) | $ (44,607) | $ (44,465) | $ (43,854) | $ (184,748) | $ (183,769) | $ (279,966) |
Net Cash Used In Operating Activities | (184,825) | $ (144,476) | $ (258,768) | ||||||||
Cash Cash EquivalentsMarketable Securities Restricted Cash and Restricted Cash Equivalents | $ 103,900 | $ 103,900 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Sep. 30, 2015 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jan. 01, 2019 | Jan. 02, 2017 | |
Summary of Significant Accounting Policies [Line Items] | ||||||
Number of shares excluded from the computation of net loss per share | 59,509,610 | 46,513,399 | 39,277,732 | |||
Restricted Cash and Cash Equivalents | $ 10,847 | $ 28,234 | ||||
Convertible Notes Initial Conversion Price Per Share | $ 6.81 | |||||
Foreign currency translation adjustment | $ 11,200 | 8,600 | ||||
Adoption of new accounting standard, net of tax | 0 | $ 600 | ||||
Subsequent Event [Member] | ||||||
Summary of Significant Accounting Policies [Line Items] | ||||||
Lessor, Operating Lease, Term of Contract | 12 months | |||||
Minimum [Member] | ||||||
Summary of Significant Accounting Policies [Line Items] | ||||||
Finite-Lived Intangible Asset, Useful Life | 7 years | |||||
Maximum [Member] | ||||||
Summary of Significant Accounting Policies [Line Items] | ||||||
Finite-Lived Intangible Asset, Useful Life | 20 years | |||||
Bill Melinda Gates Foundation [Member] | ||||||
Summary of Significant Accounting Policies [Line Items] | ||||||
Grant Agreement | $ 89,100 | $ 89,100 | ||||
Accounting Standards Update 2016-02 [Member] | Subsequent Event [Member] | ||||||
Summary of Significant Accounting Policies [Line Items] | ||||||
Operating Lease, Right-of-Use Asset | $ 12,000 | |||||
Operating Lease, Liability | $ 22,000 | |||||
Security Deposit [Member] | ||||||
Summary of Significant Accounting Policies [Line Items] | ||||||
Restricted Cash and Cash Equivalents | 1,000 | 1,700 | ||||
Grant Agreement [Member] | ||||||
Summary of Significant Accounting Policies [Line Items] | ||||||
Restricted Cash and Cash Equivalents | $ 10,800 | $ 27,400 | ||||
Convertible Debt Securities [Member] | ||||||
Summary of Significant Accounting Policies [Line Items] | ||||||
Number of shares excluded from the computation of net loss per share | 47,716,900 | 47,716,900 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Cash and Equivalents) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Cash and Cash Equivalents [Line Items] | ||
Cash and cash equivalents | $ 70,154 | $ 106,307 |
Cash [Member] | ||
Cash and Cash Equivalents [Line Items] | ||
Cash and cash equivalents | 6,750 | 10,482 |
Money Market Funds [Member] | ||
Cash and Cash Equivalents [Line Items] | ||
Cash and cash equivalents | 39,168 | 36,762 |
Asset-backed Securities [Member] | ||
Cash and Cash Equivalents [Line Items] | ||
Cash and cash equivalents | 15,000 | 16,007 |
Corporate debt securities [Member] | ||
Cash and Cash Equivalents [Line Items] | ||
Cash and cash equivalents | $ 9,236 | $ 43,056 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (cash, cash equivalents and restricted cash) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Cash and cash equivalents | $ 70,154 | $ 106,307 | ||
Restricted cash current | 10,847 | 28,234 | ||
Restricted cash non-current | 958 | 890 | ||
Cash, cash equivalents and restricted cash | $ 81,959 | $ 135,431 | $ 179,257 | $ 130,494 |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and Cash Equivalents, at Carrying Value | $ 70,154 | $ 106,307 |
Asset-backed Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and Cash Equivalents, at Carrying Value | 15,000 | 16,007 |
Corporate Debt Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and Cash Equivalents, at Carrying Value | $ 9,236 | $ 43,056 |
Fair Value Measurements (Fair v
Fair Value Measurements (Fair value hierarchy for its financial assets and liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | |
Level 1 [Member] | |||
Assets | |||
Total assets | $ 39,168 | $ 36,762 | |
Liabilities | |||
Convertible notes payable | 0 | 0 | |
Level 1 [Member] | Money Market Funds [Member] | |||
Assets | |||
Total assets | [1] | 39,168 | 36,762 |
Level 1 [Member] | Asset-backed securities [Member] | |||
Assets | |||
Total assets | [2] | 0 | 0 |
Level 1 [Member] | Corporate Debt Securities [Member] | |||
Assets | |||
Total assets | [3] | 0 | 0 |
Level 2 [Member] | |||
Assets | |||
Total assets | 46,216 | 110,059 | |
Liabilities | |||
Convertible notes payable | 197,935 | 152,396 | |
Level 2 [Member] | Money Market Funds [Member] | |||
Assets | |||
Total assets | [1] | 0 | 0 |
Level 2 [Member] | Asset-backed securities [Member] | |||
Assets | |||
Total assets | [2] | 19,997 | 29,750 |
Level 2 [Member] | Corporate Debt Securities [Member] | |||
Assets | |||
Total assets | [3] | 26,219 | 80,309 |
Level 3 [Member] | |||
Assets | |||
Total assets | 0 | 0 | |
Liabilities | |||
Convertible notes payable | 0 | 0 | |
Level 3 [Member] | Money Market Funds [Member] | |||
Assets | |||
Total assets | [1] | 0 | 0 |
Level 3 [Member] | Asset-backed securities [Member] | |||
Assets | |||
Total assets | [2] | 0 | 0 |
Level 3 [Member] | Corporate Debt Securities [Member] | |||
Assets | |||
Total assets | [3] | $ 0 | $ 0 |
[1] | Classified as cash and cash equivalents as of December 31, 2018 and 2017, respectively (see Note 3). | ||
[2] | Includes $15,000 and $16,007 classified as cash and cash equivalents as of December 31, 2018 and 2017, respectively, on the consolidated balance sheets. | ||
[3] | Includes $9,236 and $43,056 classified as cash and cash equivalents as of December 31, 2018 and 2017, respectively, on the consolidated balance sheets. |
Marketable Securities (Narrativ
Marketable Securities (Narrative) (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018USD ($)Number | Dec. 31, 2017USD ($) | |
Schedule of Available-for-sale Securities [Line Items] | ||
Available-For-Sale Securities Number of Securities Owned | Number | 7 | |
Available-For-Sale Securities Number Of Securities Owned Unrealized Losses | Number | 7 | |
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax | $ | $ 5 | $ 17 |
Available-for-sale Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax | $ | $ 100 |
Marketable Securities (Marketab
Marketable Securities (Marketable securities classified as available-for-sale) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | $ 21,985 | $ 51,013 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (5) | (17) |
Fair Value | 21,980 | 50,996 |
Asset-backed securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 4,999 | 13,748 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (2) | (5) |
Fair Value | 4,997 | 13,743 |
Corporate Debt Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 16,986 | 37,265 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (3) | (12) |
Fair Value | $ 16,983 | $ 37,253 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Finite-Lived Intangible Assets [Line Items] | |||
Amortization of Intangible Assets | $ 0.7 | $ 2.2 | $ 0.8 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets (Schedule of Goodwill) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Goodwill [Line Items] | ||
Beginning balance | $ 53,563 | $ 51,673 |
Currency translation adjustments | (1,596) | 1,890 |
Ending balance | $ 51,967 | $ 53,563 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets (Schedule of Identifiable Intangible Assets) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 12,130 | $ 13,189 |
Accumulated Amortization | (5,589) | (5,316) |
Intangible Assets, Net | 6,541 | 7,873 |
Collaboration agreements [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 3,773 | 4,103 |
Accumulated Amortization | (3,326) | (3,310) |
Intangible Assets, Net | 447 | 793 |
Proprietary adjuvant technology [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 8,357 | 9,086 |
Accumulated Amortization | (2,263) | (2,006) |
Intangible Assets, Net | $ 6,094 | $ 7,080 |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets (Schedule of Estimated Amortization Expense) (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Finite-Lived Intangible Assets [Line Items] | |
2019 | $ 700 |
2020 | 583 |
2021 | 418 |
2022 | 418 |
2023 | $ 418 |
Grant, U.S. Government Contra_2
Grant, U.S. Government Contract and Joint Venture (Narrative) (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | 40 Months Ended | 95 Months Ended | |||||||||
Sep. 30, 2015 | 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 | Dec. 31, 2018 | Dec. 31, 2018 | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||
Contracts Revenue | $ 6,127 | $ 7,735 | $ 10,773 | $ 9,653 | $ 10,412 | $ 8,352 | $ 6,732 | $ 5,680 | $ 34,288 | $ 31,176 | $ 15,353 | |||
CPL Biologicals Private Limited [Member] | ||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 20.00% | 20.00% | 20.00% | 20.00% | ||||||||||
Cadila [Member] | ||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||
Joint Venture Percentage Owned By Others | 80.00% | 80.00% | 80.00% | 80.00% | ||||||||||
Bill Melinda Gates Foundation [Member] | ||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||
Contracts Revenue | $ 30,800 | $ 73,000 | ||||||||||||
Grant agreement | $ 89,100 | $ 89,100 | ||||||||||||
Hhs Barda Contract Award [Member] | Maximum [Member] | ||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||
Contracts Revenue | $ 114,000 |
Other Financial Information (Na
Other Financial Information (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Depreciation, Depletion and Amortization | $ 7.4 | $ 7.6 | $ 7.7 |
Other Financial Information (Pr
Other Financial Information (Prepaid Expenses and Other Current Assets) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Laboratory supplies | $ 11,974 | $ 13,085 |
Other prepaid expenses and other current assets | 4,321 | 4,689 |
Prepaid expenses and other current assets | $ 16,295 | $ 17,774 |
Other Financial Information (_2
Other Financial Information (Property and Equipment, Net) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Property and equipment | $ 64,109 | $ 65,293 |
Less ― accumulated depreciation | (35,683) | (29,306) |
Property, Plant and Equipment, Net | 28,426 | 35,987 |
Machinery and Equipment [Member] | ||
Property and equipment | 35,723 | 35,409 |
Leasehold Improvements [Member] | ||
Property and equipment | 22,276 | 23,664 |
Computer hardware [Member] | ||
Property and equipment | 4,763 | 5,091 |
Construction in Progress [Member] | ||
Property and equipment | $ 1,347 | $ 1,129 |
Other Financial Information (Ac
Other Financial Information (Accrued Expenses) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Employee benefits and compensation | $ 9,632 | $ 11,186 |
Research and development accruals | 8,476 | 17,542 |
Other accrued expenses | 1,442 | 882 |
Accrued expenses | $ 19,550 | $ 29,610 |
Long-Term Debt (Narrative) (Det
Long-Term Debt (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jan. 25, 2016 | |
Debt Instrument [Line Items] | |||||
Aggregate principal amount of notes issued | $ 325,000 | $ 325,000 | $ 325,000 | ||
Debt Issuance Costs | 10,000 | ||||
Net Proceeds Received | 315,000 | ||||
Coupon Interest Rate | 3.75% | ||||
Sale of Stock, Price Per Share | $ 5.56 | ||||
Payments for Capped Call Transactions | 38,500 | ||||
Debt Cap Price | 9.73 | ||||
Capped Call Transactions Expenses | $ 900 | ||||
Coupon Interest Expense | $ 12,188 | $ 12,188 | $ 11,240 | ||
Capped Call Transactions [Member] | |||||
Debt Instrument [Line Items] | |||||
Conversion Premium Percentage | 75.00% | ||||
Minimum [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Convertible, Terms of Conversion Feature | The Notes are not redeemable prior to maturity and are convertible into shares of the Company’s common stock. The Notes are initially convertible into approximately 47,716,900 shares of the Company’s common stock based on the initial conversion rate of 146.8213 shares of the Company’s common stock per $1,000 principal amount of the Notes. | ||||
Maximum [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Convertible, Terms of Conversion Feature | In addition, the holders of the Notes may require the Company to repurchase the Notes at par value plus accrued and unpaid interest following the occurrence of a Fundamental Change (as described in the Indenture). If a holder of the Notes converts upon a Make-Whole Adjustment Event (as described in the Indenture), they may be eligible to receive a make-whole premium through an increase to the conversion rate up to a maximum of 179.8561 shares per $1,000 principal amount of Notes (subject to other adjustments as described in the Indenture). | ||||
Unsecured Debt [Member] | |||||
Debt Instrument [Line Items] | |||||
Coupon Interest Rate | 3.75% | ||||
Debt Instrument, Convertible, Conversion Price | $ 6.81 | ||||
Conversion Premium Percentage | 22.50% |
Long-Term Debt (Notes Payable)
Long-Term Debt (Notes Payable) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2016 |
Principal amount of the Notes | $ 325,000 | $ 325,000 | $ 325,000 |
Unamortized debt issuance costs | (5,813) | (7,237) | |
Total convertible notes payable | $ 319,187 | $ 317,763 |
Long-Term Debt (Interest Expens
Long-Term Debt (Interest Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Coupon interest at 3.75% | $ 12,188 | $ 12,188 | $ 11,240 |
Amortization of debt issuance costs | 1,424 | 1,424 | 1,305 |
Total interest expense on the Notes | $ 13,612 | $ 13,612 | $ 12,545 |
Stockholders' Equity (Narrative
Stockholders' Equity (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands | Mar. 12, 2019 | Apr. 30, 2018 | Jan. 31, 2018 | Mar. 12, 2019 | Mar. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 31, 2017 | Jan. 25, 2016 |
Subsidiary, Sale of Stock [Line Items] | |||||||||
Sales per share price range | $ 5.56 | ||||||||
Proceeds from shares sold | $ 100,060 | $ 63,425 | |||||||
Convertible Debt [Member] | |||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||
Payments for Capped Call Transactions | $ 38,500 | ||||||||
Public Offering [Member] | |||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||
Sales per share price range | $ 1.65 | ||||||||
Shares sold | 34,848,507 | ||||||||
Common stock issued upon exercise in full over-allotment granted | 4,545,457 | ||||||||
Proceeds from shares sold | $ 54,000 | ||||||||
Payments of Stock Issuance Costs | $ 3,600 | ||||||||
January 2017 Sales Agreement [Member] | |||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||
Sales per share price range | $ 1.54 | $ 1.27 | |||||||
Shares sold | 6,800,000 | 50,900,000 | |||||||
Proceeds from shares sold | $ 10,300 | $ 63,400 | |||||||
Shelf Registration Statement, Remaining Authorized Common Stock Issuance, Value | $ 75,000 | ||||||||
December 2017 Sales Agreement [Member] | |||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||
Sales per share price range | $ 2.11 | ||||||||
Shares sold | 17,200,000 | ||||||||
Proceeds from shares sold | $ 35,900 | ||||||||
Shelf Registration Statement, Authorized Common Stock Issuance, Value | $ 75,000 | ||||||||
December 2017 Sales Agreement [Member] | Subsequent Event [Member] | |||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||
Shares sold | 50,300,000 | ||||||||
Proceeds from shares sold | $ 37,900 | ||||||||
December 2018 Sales Agreement [Member] | |||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||
Shelf Registration Statement, Authorized Common Stock Issuance, Value | $ 100,000 | ||||||||
December 2018 Sales Agreement [Member] | Subsequent Event [Member] | |||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||
Shares sold | 5,500,000 | ||||||||
Proceeds from shares sold | $ 2,900 | ||||||||
Shelf Registration Statement, Remaining Authorized Common Stock Issuance, Value | $ 97,100 | $ 97,100 |
Stock-Based Compensation (Narra
Stock-Based Compensation (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Aggregate intrinsic value of stock options exercised | $ 0.4 | $ 0.1 | $ 2.4 | |
Unrecognized compensation expense | $ 45 | |||
Unrecognized compensation expense, recognition period | 1 year 7 months 6 days | |||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate | 0.00% | 0.00% | 0.00% | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 1.74 | $ 1.06 | $ 1.88 | |
Performance Based Stock Options [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 1,700,000 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 99.11% | |||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 1.74% | |||
Sharebased Compensation Arrangement By Sharebased Payment Award Fair Value Assumptions Expected Forfeiture Rate | 5.62% | |||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate | 0.00% | |||
Maximum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Sharebased Compensation Arrangement By Sharebased Payment Award Fair Value Assumptions Expected Forfeiture Rate | [1] | 16.33% | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | 7 years 6 months | 7 years 5 months 16 days | 7 years 3 months 11 days | |
Maximum [Member] | Performance Based Stock Options [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 0.92 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | 3 years 6 months | |||
Minimum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Sharebased Compensation Arrangement By Sharebased Payment Award Fair Value Assumptions Expected Forfeiture Rate | [1] | 0.00% | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | 4 years 25 days | 4 years 1 month 20 days | 4 years 2 months 19 days | |
Minimum [Member] | Performance Based Stock Options [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 0.74 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | 1 year 4 months 6 days | |||
2005 Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Maximum term of options | 10 years | |||
Minimum grant price, percent of common stock fair value | 100.00% | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 0 | |||
Employee Stock Purchase Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common stock reserved for issuance | 3,363,066 | |||
Proposal to increase authorized shares | 4,000,000 | |||
Employee Stock Purchase Plan (ESPP), Plan Description | The ESPP was approved at the Company annual meeting of stockholders in June 2013. The ESPP currently authorizes an aggregate of 7,600,000 shares of the Company's common stock to be purchased, and the aggregate amount of shares will continue to increase 5% on each anniversary of its adoption up to a maximum of 8,000,000 shares. The number of authorized shares and the maximum number of shares both include an increase of 4,000,000 shares approved at the Company's 2018 annual meeting of stockholders. The ESPP allows employees to purchase shares of common stock of the Company at each purchase date through payroll deductions of up to a maximum of 15% of their compensation, at 85% of the lesser of the market price of the shares at the time of purchase or the market price on the beginning date of an option period (or, if later, the date during the option period when the employee was first eligible to participate). | |||
Employee Stock Purchase Plan [Member] | Maximum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common stock reserved for issuance | 8,000,000 | |||
2015 Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common stock reserved for issuance | 56,000,000 | |||
Aggregate intrinsic value of stock options outstanding | $ 10.2 | |||
Weighted-average remaining contractual term of stock options outstanding | 7 years 6 months | |||
Aggregate intrinsic value of stock options exercisable | $ 4.3 | |||
Weighted-average remaining contractual term of stock options exercisable | 5 years 8 months 12 days | |||
Proposal to increase authorized shares | 20,000,000 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 16,613,409 | |||
[1] | See Note 3 regarding the Company’s adoption of ASU 2016-09 in 2017. |
Stock-Based Compensation (Summa
Stock-Based Compensation (Summary of Option Activity) (Details) | 12 Months Ended |
Dec. 31, 2018$ / sharesshares | |
2005 Plan [Member] | |
Stock Options | |
Outstanding at January 1, 2018 | 12,818,929 |
Granted | 0 |
Exercised | (563,125) |
Canceled | (602,432) |
Outstanding at December 31, 2018 | 11,653,372 |
Shares exercisable at December 31, 2018 | 11,653,372 |
Weighted-Average Exercise Price | |
Outstanding at January 1, 2018 | $ / shares | $ 3.26 |
Granted | $ / shares | 0 |
Exercised | $ / shares | 1.73 |
Canceled | $ / shares | 4.15 |
Outstanding at December 31, 2018 | $ / shares | 3.29 |
Shares exercisable at December 31, 2018 | $ / shares | $ 3.29 |
2015 Plan [Member] | |
Stock Options | |
Outstanding at January 1, 2018 | 33,675,720 |
Granted | 16,613,409 |
Exercised | (252,728) |
Canceled | (2,180,163) |
Outstanding at December 31, 2018 | 47,856,238 |
Shares exercisable at December 31, 2018 | 15,815,855 |
Shares available for grant at December 31, 2018 | 7,821,034 |
Weighted-Average Exercise Price | |
Outstanding at January 1, 2018 | $ / shares | $ 3.61 |
Granted | $ / shares | 2.24 |
Exercised | $ / shares | 1.35 |
Canceled | $ / shares | 4.18 |
Outstanding at December 31, 2018 | $ / shares | 3.12 |
Shares exercisable at December 31, 2018 | $ / shares | $ 4.65 |
Stock-Based Compensation (Assum
Stock-Based Compensation (Assumptions Used in Estimation of Fair Value of Stock) (Details) - $ / shares | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted-average Black-Scholes fair value of stock options granted | $ 1.74 | $ 1.06 | $ 1.88 | |
Risk-free interest rate, minimum | 2.26% | 1.61% | 0.97% | |
Risk-free interest rate, maximum | 3.10% | 2.34% | 1.78% | |
Dividend yield | 0.00% | 0.00% | 0.00% | |
Volatility, minimum | 93.31% | 88.91% | 57.86% | |
Volatility, maximum | 115.61% | 114.10% | 108.88% | |
Employee Stock Purchase Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Risk-free interest rate, minimum | 0.66% | 0.45% | 0.22% | |
Risk-free interest rate, maximum | 2.24% | 1.13% | 0.61% | |
Dividend yield | 0.00% | 0.00% | 0.00% | |
Volatility, minimum | 52.19% | 45.98% | 43.03% | |
Volatility, maximum | 203.83% | 267.85% | 86.75% | |
Expected forfeiture rate | [1] | 5.00% | ||
Minimum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected term (in years) | 4 years 25 days | 4 years 1 month 20 days | 4 years 2 months 19 days | |
Expected forfeiture rate | [1] | 0.00% | ||
Minimum [Member] | Employee Stock Purchase Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted-average Black-Scholes fair value of stock options granted | $ 0.36 | $ 0.45 | $ 1.86 | |
Expected term (in years) | 6 months | 6 months | 6 months | |
Maximum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected term (in years) | 7 years 6 months | 7 years 5 months 16 days | 7 years 3 months 11 days | |
Expected forfeiture rate | [1] | 16.33% | ||
Maximum [Member] | Employee Stock Purchase Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted-average Black-Scholes fair value of stock options granted | $ 3.53 | $ 5.47 | $ 4.76 | |
Expected term (in years) | 2 years | 2 years | 2 years | |
[1] | See Note 3 regarding the Company’s adoption of ASU 2016-09 in 2017. |
Stock-Based Compensation (Sum_2
Stock-Based Compensation (Summary of Restricted Stock Awards Activity) (Details) - Restricted Stock [Member] shares in Thousands | 12 Months Ended |
Dec. 31, 2018$ / sharesshares | |
Number of shares | |
Outstanding and Unvested at January 1, 2018 | shares | 18,750 |
Restricted stock granted | shares | 0 |
Restricted stock vested | shares | 0 |
Restricted stock forfeited | shares | (18,750) |
Outstanding and Unvested at December 31, 2018 | shares | 0 |
Per Share Weighted-Average Grant-Date Fair Value | |
Outstanding and Unvested at January 1, 2018 | $ / shares | $ 4.99 |
Restricted stock granted | $ / shares | 0 |
Restricted stock vested | $ / shares | 0 |
Restricted stock forfeited | $ / shares | 4.99 |
Outstanding and Unvested at December 31, 2018 | $ / shares | $ 0 |
Stock-Based Compensation (Stock
Stock-Based Compensation (Stock-Based Compensation Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation expense | $ 18,314 | $ 19,809 | $ 19,160 |
Research and development [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation expense | 10,575 | 11,750 | 11,168 |
General and administrative [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation expense | $ 7,739 | $ 8,059 | $ 7,992 |
Employee Benefits (Narrative) (
Employee Benefits (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Maximum Contribution Percentage of Compensation | 100.00% | ||
Defined Contribution Plan, Employer Matching Contribution, Percent of Match | 4.00% | ||
Defined Contribution Plan, Cost | $ 1.2 | $ 1.5 | $ 1.5 |
Foreign Subsidiary Contributions and Other Expenses | $ 0.8 | $ 0.5 | $ 0.5 |
Next Two Percent Of Participants Deferral Member [Member] | |||
Defined Contribution Plan, Employer Matching Contribution, Percent of Employees' Gross Pay | 50.00% | ||
Defined Contribution Plan, Percent of Employee Deferral Eligible for Employer Matching | 2.00% | ||
First Three Percent Of Participants Deferral Member [Member] | |||
Defined Contribution Plan, Employer Matching Contribution, Percent of Employees' Gross Pay | 100.00% | ||
Defined Contribution Plan, Percent of Employee Deferral Eligible for Employer Matching | 3.00% |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | $ 37.7 | $ (54.7) |
Effective Income Tax Rate Reconciliation, Change in Deferred Tax Assets Valuation Allowance, Amount | $ 132 |
Income Taxes (Loss from Operati
Income Taxes (Loss from Operations before Income Tax Expense by Jurisdiction) (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 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Net loss | $ (49,334) | $ (44,570) | $ (44,492) | $ (46,352) | $ (50,843) | $ (44,607) | $ (44,465) | $ (43,854) | $ (184,748) | $ (183,769) | $ (279,966) |
Domestic Tax Authority [Member] | |||||||||||
Net loss | (176,290) | (173,749) | (273,134) | ||||||||
Foreign Tax Authority [Member] | |||||||||||
Net loss | $ (8,458) | $ (10,020) | $ (6,832) |
Income Taxes (Tax Rates) (Detai
Income Taxes (Tax Rates) (Details) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statutory federal tax rate | (21.00%) | (34.00%) | (34.00%) |
State income taxes, net of federal benefit | (3.00%) | (3.00%) | (3.00%) |
Research and development and other tax credits | (3.00%) | (2.00%) | (2.00%) |
Other | 1.00% | (1.00%) | 2.00% |
Change in tax rate | 5.00% | 70.00% | 0.00% |
Change in valuation allowance | 21.00% | (30.00%) | 37.00% |
Income tax provision | 0.00% | 0.00% | 0.00% |
Income Taxes (Tax Return Report
Income Taxes (Tax Return Reported Federal Net Operating Losses and Tax Credits) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Research Tax Credit Carryforward [Member] | |
Research tax credits expiring through the year 2038 | $ 33,539 |
Net operating losses carried forward, expiration date | Dec. 31, 2038 |
Federal [Member] | |
Federal and State net operating losses expiring through the year 2037 | $ 969,452 |
Federal and State net operating losses (no expiration) | 164,443 |
Foreign [Member] | |
Foreign net operating losses (no expiration) | $ 56,003 |
Income Taxes (Deferred Tax Asse
Income Taxes (Deferred Tax Assets (Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Federal and State net operating loss carryforward | $ 270,177 | $ 240,550 |
Foreign net operating loss carryforward | 12,321 | 11,577 |
Research tax credits | 33,633 | 27,571 |
Non-cash stock-based compensation | 10,888 | 8,048 |
Original discount interest | 5,687 | 7,167 |
Other | 7,987 | 9,116 |
Total deferred tax assets | 340,693 | 304,029 |
Valuation allowance | (337,515) | (299,862) |
Net deferred tax assets | 3,178 | 4,167 |
Intangibles | (1,492) | (1,789) |
Other | (1,686) | (2,378) |
Total deferred tax liabilities | (3,178) | (4,167) |
Net deferred tax assets | $ 0 | $ 0 |
Commitments and Contingencies_2
Commitments and Contingencies (Narrative) (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Jan. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Total facility rent expense | $ 5 | $ 8.4 | $ 7 | ||
Aggregate Payments Made Per License Agreement | 11.6 | ||||
Payment for Milestones | $ 4 | ||||
Maximum [Member] | |||||
Accrued Milestone Payment | 4 | ||||
Minimum [Member] | |||||
Accrued Milestone Payment | $ 3 | ||||
Gaithersburg, Maryland [Member] | |||||
Termination Fee | $ 5.3 | ||||
Total Termination Expenses | $ 0.9 |
Commitments and Contingencies_3
Commitments and Contingencies (Details) - Operating Leases [Member] $ in Thousands | Dec. 31, 2018USD ($) |
Operating Leased Assets [Line Items] | |
2019 | $ 6,682 |
2020 | 5,372 |
2021 | 5,350 |
2022 | 6,910 |
2023 | 5,283 |
Total minimum lease payments | $ 29,597 |
Related Party Transaction (Narr
Related Party Transaction (Narrative) (Details) - Dr. Sarah Frech [Member] - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Related Party Transaction [Line Items] | ||
Consulting Expenses | $ 0.3 | $ 0.2 |
DueTo Related Parties Unpaid For Services | $ 0.1 | $ 0.1 |
Quarterly Financial Informati_3
Quarterly Financial Information (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 | |
Schedule Of Quarterly Financial Information [Line Items] | |||||||||||
Revenue | $ 6,127 | $ 7,735 | $ 10,773 | $ 9,653 | $ 10,412 | $ 8,352 | $ 6,732 | $ 5,680 | $ 34,288 | $ 31,176 | $ 15,353 |
Net loss | $ (49,334) | $ (44,570) | $ (44,492) | $ (46,352) | $ (50,843) | $ (44,607) | $ (44,465) | $ (43,854) | $ (184,748) | $ (183,769) | $ (279,966) |
Net loss per share | $ (0.13) | $ (0.12) | $ (0.12) | $ (0.14) | $ (0.16) | $ (0.15) | $ (0.16) | $ (0.16) | $ (0.50) | $ (0.63) | $ (1.03) |