Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Oct. 28, 2013 | |
Document and Entity Information [Abstract] | ' | ' |
Entity Registrant Name | 'ARQULE INC | ' |
Entity Central Index Key | '0001019695 | ' |
Trading Symbol | 'arql | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 62,703,306 |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-13 | ' |
Amendment Flag | 'false | ' |
Document Fiscal Year Focus | '2013 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
CONDENSED_BALANCE_SHEETS_Unaud
CONDENSED BALANCE SHEETS (Unaudited) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $17,049 | $14,327 |
Marketable securities-short term | 65,213 | 64,944 |
Prepaid expenses and other current assets | 383 | 344 |
Total current assets | 82,645 | 79,615 |
Marketable securities-long term | 20,792 | 51,328 |
Property and equipment, net | 1,334 | 1,992 |
Other assets | 1,077 | 1,258 |
Total assets | 105,848 | 134,193 |
Current liabilities: | ' | ' |
Accounts payable and accrued expenses | 8,090 | 10,163 |
Note payable | 1,700 | 1,700 |
Current portion of deferred revenue | 14,077 | 14,232 |
Current portion of deferred gain on sale leaseback | 552 | 552 |
Total current liabilities | 24,419 | 26,647 |
Deferred revenue, net of current portion | 15,279 | 25,733 |
Deferred gain on sale leaseback, net of current portion | 368 | 784 |
Total liabilities | 40,066 | 53,164 |
Commitments and contingencies | ' | ' |
Stockholders' equity: | ' | ' |
Preferred stock, $0.01 par value; 1,000,000 shares authorized; no shares issued or outstanding | ' | ' |
Common stock, $0.01 par value; 100,000,000 shares authorized; 62,703,306 and 62,399,827 shares issued and outstanding at September 30, 2013 and December 31, 2012, respectively | 627 | 624 |
Additional paid-in capital | 504,066 | 500,655 |
Accumulated other comprehensive income | 85 | 102 |
Accumulated deficit | -438,996 | -420,352 |
Total stockholders' equity | 65,782 | 81,029 |
Total liabilities and stockholders' equity | $105,848 | $134,193 |
CONDENSED_BALANCE_SHEETS_Unaud1
CONDENSED BALANCE SHEETS (Unaudited) (Parentheticals) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Statement Of Financial Position [Abstract] | ' | ' |
Preferred stock, par value (in dollars per shares) | $0.01 | $0.01 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | ' | ' |
Preferred stock, shares outstanding | ' | ' |
Common stock, par value (in dollars per shares) | $0.01 | $0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 62,703,306 | 62,399,827 |
Common stock, shares outstanding | 62,703,306 | 62,399,827 |
CONDENSED_STATEMENTS_OF_OPERAT
CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Revenue: | ' | ' | ' | ' |
Research and development revenue | $3,542 | $10,944 | $13,639 | $31,271 |
Costs and expenses: | ' | ' | ' | ' |
Research and development | 5,955 | 8,146 | 22,218 | 26,720 |
General and administrative | 3,113 | 3,387 | 9,711 | 10,500 |
Restructuring costs | 667 | ' | 667 | ' |
Total costs and expenses | 9,735 | 11,533 | 32,596 | 37,220 |
Loss from operations | -6,193 | -589 | -18,957 | -5,949 |
Interest income | 114 | 150 | 397 | 294 |
Interest expense | -8 | -7 | -18 | -19 |
Other income (expense) | 4 | 15 | -66 | 98 |
Net loss | -6,083 | -431 | -18,644 | -5,576 |
Unrealized gain (loss) on marketable securities | 41 | 273 | -17 | 166 |
Comprehensive loss | ($6,042) | ($158) | ($18,661) | ($5,410) |
Basic and diluted net loss per share: | ' | ' | ' | ' |
Net loss per share (in dollars per share) | ($0.10) | ($0.01) | ($0.30) | ($0.09) |
Weighted average basic and diluted common shares outstanding (in shares) | 62,512 | 62,224 | 62,457 | 58,987 |
CONDENSED_STATEMENTS_OF_CASH_F
CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Cash flows from operating activities: | ' | ' |
Net loss | ($18,644) | ($5,576) |
Adjustments to reconcile net loss to net cash used in operating activities: | ' | ' |
Depreciation and amortization | 658 | 818 |
Amortization of premium/discount on marketable securities | 1,682 | 1,232 |
Amortization of deferred gain on sale leaseback | -416 | -416 |
Non-cash stock compensation | 3,201 | 3,242 |
Loss (gain) on auction rate securities | 66 | -98 |
Changes in operating assets and liabilities: | ' | ' |
Prepaid expenses and other current assets | -39 | 3,080 |
Other long-term assets | 181 | 110 |
Accounts payable and accrued expenses | -2,073 | -591 |
Deferred revenue | -10,609 | -27,011 |
Net cash used in operating activities | -25,993 | -25,210 |
Cash flows from investing activities: | ' | ' |
Purchases of marketable securities | -29,275 | -116,437 |
Proceeds from sale or maturity of marketable securities | 57,777 | 93,802 |
Purchases of property and equipment | ' | -117 |
Net cash provided by (used in) investing activities | 28,502 | -22,752 |
Cash flows from financing activities: | ' | ' |
Proceeds from stock offering, net | ' | 56,256 |
Proceeds from stock option exercises and employee stock plan purchases | 213 | 1,554 |
Net cash provided by financing activities | 213 | 57,810 |
Net increase in cash and cash equivalents | 2,722 | 9,848 |
Cash and cash equivalents, beginning of period | 14,327 | 11,095 |
Cash and cash equivalents, end of period | $17,049 | $20,943 |
NATURE_OF_OPERATIONS_AND_BASIS
NATURE OF OPERATIONS AND BASIS OF PRESENTATION | 9 Months Ended | |
Sep. 30, 2013 | ||
Organization and Nature Of Operations [Abstract] | ' | |
NATURE OF OPERATIONS AND BASIS OF PRESENTATION | ' | |
1 | NATURE OF OPERATIONS AND BASIS OF PRESENTATION | |
We are a clinical-stage biotechnology company organized as a Delaware corporation in 1993 engaged in the research and development of innovative cancer therapeutics. Our mission is to produce novel drugs with differentiated mechanisms of action that will extend the lives of our patients. These drugs target biological pathways implicated in a wide range of cancers. We employ technologies such as our ArQule Kinase Inhibitor Platform (“AKIPTM”) to design and develop drugs that have the potential to fulfill this mission. | ||
Our lead product candidate is tivantinib (ARQ 197), an orally administered, small molecule inhibitor of the c-Met receptor tyrosine kinase (“c-MET”) and its biological pathway. C-MET is a promising target for cancer therapy, based on its multiple roles in cancerous cell proliferation, tumor spread, new blood vessel formation and resistance to certain drug therapies. We and our partners, Daiichi Sankyo Co., Ltd. (“Daiichi Sankyo”) and Kyowa Hakko Kirin Co., Ltd. (“Kyowa Hakko Kirin”), are implementing a clinical development program designed to realize the broad potential of tivantinib as a single agent and in combination with other anti-cancer therapies in a number of disease indications. Our strategy is to focus on the most promising indications within our clinical programs based upon continually generated and updated data. Our most advanced indication is liver cancer (“hepatocellular carcinoma” or “HCC”). We are also completing earlier-stage combination therapy trials with tivantinib and other anti-cancer agents that may provide data to support later-stage trials in additional indications. | ||
On September 3, 2013, we announced that we and Daiichi Sankyo had received a letter from the Data Monitoring Committee (“DMC”) of the ongoing pivotal Phase 3 METIV-HCC trial recommending that the dosage of tivantinib tested in this study be reduced from 240 mg twice daily (“BID”) to 120 mg BID and that certain enhanced patient monitoring procedures be instituted to confirm the safety profile of the lower dose. This recommendation resulted from the observation of a higher incidence of neutropenia in the METIV-HCC trial than was observed in our and Daiichi Sankyo’s Phase 2 trial in the same patient population. We and Daiichi Sankyo have accepted the recommendation of the DMC to implement the lower dose and have submitted protocol amendments with regulatory authorities and related parties. After a prescribed number of patients have been dosed at 120 mg BID, the DMC will review data from that patient cohort to determine the safety profile of the lower dose and whether to recommend any further action. | ||
We announced enrollment of the first patient in the METIV-HCC trial on January 31, 2013. This trial is a randomized, double-blind, controlled study of previously treated patients with MET-high inoperable HCC who have received one or two prior systemic anti-cancer therapies and who are receiving tivantinib as a single agent or placebo. The primary endpoint of this trial is overall survival (“OS”), and the secondary endpoint is progression-free survival (“PFS”). Approximately 300 patients are planned to be enrolled at approximately 120 clinical sites worldwide. This trial is being conducted under a Special Protocol Assessment (“SPA”) agreement with the U.S. Food and Drug Administration (“FDA”). The METIV trial builds upon the results of a randomized, double-blind, placebo controlled, Phase 2 trial in HCC announced in January 2012 demonstrating that treatment with tivantinib as single agent therapy produced a statistically significant improvement in the primary endpoint of time-to-progression (“TTP”) in previously treated patients. Patients with higher levels of MET who were treated with tivantinib in this Phase 2 trial experienced pronounced benefit in prolonged TTP. Additional data from this trial, presented at the Annual Meeting of the American Society of Clinical Oncology (“ASCO”) in June 2012, demonstrated significant improvements in median OS and PFS in these MET-high patients. | ||
On September 30, 2013 at the European Cancer Congress, we announced the presentation of final data from MARQUEE (a randomized, double-blind, controlled pivotal Phase 3 trial conducted under an SPA to evaluate tivantinib in combination with erlotinib, an approved anti-cancer agent, in previously treated patients with locally advanced or metastatic, non-squamous non-small cell lung cancer (“NSCLC”). These data demonstrated clinical benefits in patients with NSCLC whose tumors expressed high levels of MET protein. The overall safety profile among patients receiving tivantinib (360 milligrams BID) and erlotinib (150 milligrams daily) was manageable and consistent with findings at a previous planned interim analysis announced on October 2, 2012. At that time, the independent DMC of MARQUEE recommended that the study be discontinued early after concluding that the study would not meet its primary endpoint of improved OS. Although the interim analysis showed a statistically significant improvement in PFS in the intent-to-treat (“ITT”) population, this benefit did not carry over to OS. There were no safety concerns identified by the DMC during this analysis. We and Daiichi Sankyo previously provided information regarding the discontinuation of MARQUEE to health authorities and those clinical investigators participating in studies of tivantinib. Our analysis of data from the MARQUEE trial and other studies will inform our decisions regarding potential further development in NSCLC or in certain biomarker-defined sub-groups within this disease population. In NSCLC, we are also conducting a Phase 2, randomized trial of tivantinib and erlotinib in patients with a mutated form of the KRAS gene. | ||
On October 30, 2012, we reported that we had been informed by Kyowa Hakko Kirin that it would permanently suspend enrollment in its ongoing Phase 3 ATTENTION (Asian Trial of Tivantinib plus Erlotinib for NSCLC without EGFR Mutation) trial following the recommendation of an independent Safety Review Committee (“SRC”) in Japan after the reporting of cases of interstitial lung disease (“ILD”) in the study as a drug-related adverse event. It is our understanding that patients who were enrolled in the ATTENTION trial at the time of the safety finding could continue to receive treatment with the combination of tivantinib and erlotinib upon request from the patient and investigator and after providing new informed consent. Data from the trial are expected in early 2014. The ATTENTION trial is investigating the use of tivantinib and erlotinib versus erlotinib and placebo in second line non-squamous NSCLC patients with the wild-type form of the EGFR gene. This trial is being conducted by Kyowa Hakko Kirin in Japan, South Korea and Taiwan. | ||
On January 11, 2013, we announced the top-line results of a randomized Phase 2 signal generation trial of tivantinib used in combination with irinotecan and cetuximab in patients with refractory or relapsed colorectal cancer (“CRC”). The trial did not meet its primary endpoint of PFS. The PFS and objective response rate (“ORR”) results obtained in both the control arm and the treatment arm were longer than expected compared to previously published historical norms. Additional data and analyses from this trial were presented at the ASCO Annual Meeting in June 2013, showing that the median PFS in the treatment arm was 8.3 months, compared with 7.3 months in the control arm. Median OS in the treatment arm was 19.8 months, compared with 16.9 months in the control arm. ORR in the treatment arm was 45 percent versus 33 percent in the control arm. Adverse events were reported at similar rates in the treatment and control arms of the trial, except for increased neutropenia observed in the treatment arm, with no discontinuations of treatment for this reason. Tivantinib was generally well tolerated in combination with the approved doses of irinotecan and cetuximab studied in this trial. | ||
We have licensed commercial rights to tivantinib for human cancer indications to Daiichi Sankyo in the U.S., Europe, South America and the rest of the world, excluding Japan and certain other Asian countries, where we have licensed commercial rights to Kyowa Hakko Kirin. Our agreements with these partners provide for possible future milestone payments, royalties on product sales, and development funding, in addition to significant payments that we have already received. During 2011, we received milestone payments of $25 million from Daiichi Sankyo resulting from the dosing of the first patient in the MARQUEE trial and $10 million from Kyowa Hakko Kirin resulting from the dosing of the first patient in the ATTENTION trial. On January 31, 2013, we announced that the first patient had been enrolled in the pivotal Phase 3 METIV trial of tivantinib, entitling us to a $15 million milestone. That milestone was netted against our cumulative share of Phase 3 collaboration costs in the nine months ended September 30, 2013, and consequently we did not receive any cash proceeds from this milestone. The terms of our tivantinib licensing agreements with Daiichi Sankyo and Kyowa Hakko Kirin remain in effect following the recent developments in both of these trials. | ||
We have regained worldwide rights for the development and commercialization of ARQ 092, an AKT inhibitor, and all other compounds included under our AKT collaboration with Daiichi Sankyo pursuant to their formal notice to terminate our license and co-commercialization agreement received on March 26, 2013. Termination of this agreement was effective 90 days from our receipt of the formal notice from Daiichi Sankyo, following which we are responsible for funding the remainder of the ongoing Phase 1 trial with ARQ 092 beyond the contractual termination period, as well as any future clinical development and commercialization of this compound. The license agreement had provided exclusive rights to Daiichi Sankyo for the development, manufacturing and marketing of ARQ 092 on a worldwide basis. Under this agreement, we received a $10 million upfront fee from Daiichi Sankyo in November 2011. Following the termination of this agreement, ARQ 092 has become our proprietary asset, and Daiichi Sankyo has no further financial or other obligations related to this program. | ||
ARQ 092 is part of our proprietary pipeline of product candidates directed toward molecular targets and biological processes with demonstrated roles in the development of human cancers. In addition to ARQ 092, our priorities within this pipeline include ARQ 087, an inhibitor of fibroblast growth factor receptor. Following an analysis of Phase 1 data and the related therapeutic landscapes of our other pipeline candidates, which include ARQ 621, an inhibitor of the Eg5 kinesin motor protein, and ARQ 736, an inhibitor of the RAF kinases, we have decided to place the Investigational New Drug (“IND”) applications for these two candidates on inactive status. | ||
We have prepared the accompanying condensed financial statements pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to these rules and regulations. These condensed financial statements should be read in conjunction with our audited financial statements and footnotes related thereto for the year ended December 31, 2012 included in our annual report on Form 10-K filed with the SEC on March 14, 2013. | ||
The unaudited condensed financial statements include, in our opinion, all adjustments (consisting only of normal recurring adjustments) necessary for a fair statement of our financial position as of September 30, 2013, the results of our operations for the three and nine months ended September 30, 2013 and 2012, and cash flows for the nine months ended September 30, 2013 and 2012. The results of operations for such interim periods are not necessarily indicative of the results to be achieved for the full year. |
COLLABORATIONS_AND_ALLIANCES
COLLABORATIONS AND ALLIANCES | 9 Months Ended | |
Sep. 30, 2013 | ||
Organization, Consolidation and Presentation Of Financial Statements [Abstract] | ' | |
COLLABORATIONS AND ALLIANCES | ' | |
2 | COLLABORATIONS AND ALLIANCES | |
Daiichi Sankyo Kinase Inhibitor Discovery Agreement | ||
In November 2012, we completed our research collaboration with Daiichi Sankyo under a research collaboration, exclusive license and co-commercialization agreement entered into on November 7, 2008, that was focused on applications of our proprietary AKIPTM technology and know-how for the discovery of therapeutic compounds that selectively inhibit certain kinases in the field of oncology. The agreement provides for a $15 million upfront payment, which we received in November 2008, research support payments for the first two years of the collaboration (which was extended for an additional two years in 2010), licensing fees for compounds discovered as a result of this research, milestone payments related to clinical development, regulatory review and sales, and royalty payments on net sales of compounds from the collaboration. Daiichi Sankyo’s obligation to provide further research funding to ArQule under this agreement terminated in November 2012. | ||
Revenue for this agreement was recognized using the contingency-adjusted performance model with an estimated performance period through November 2012. The agreement was terminated in 2012 and accordingly no revenue was recognized in the three or nine months ended September 30, 2013. For the three and nine months ended September 30, 2012, revenues recognized were $4.5 million and $14.3 million, respectively. | ||
Daiichi Sankyo ARQ 092 Agreement | ||
We have regained worldwide rights for the development and commercialization of ARQ 092 and all other compounds included under our AKT collaboration with Daiichi Sankyo pursuant to their formal notice to terminate our license and commercialization received on March 26, 2013. Termination of this agreement was effective 90 days from our receipt of the formal notice from Daiichi Sankyo, following which we are responsible for funding the remainder of the ongoing Phase 1 trial with ARQ 092 beyond the contractual termination period, as well as any future clinical development and commercialization of this compound. The license agreement had provided exclusive rights to Daiichi Sankyo for the development, manufacturing and marketing of ARQ 092 on a worldwide basis. Under this agreement, we received a $10 million upfront fee from Daiichi Sankyo in November 2011. Following the termination of this agreement, ARQ 092 has become our proprietary asset, and Daiichi Sankyo has no further financial or other obligations related to this program. | ||
Revenue for this agreement was recognized using Financial Accounting Standards Board Accounting Standards Update No. 2009-13, Multiple-Deliverable Revenue Arrangements (“ASU 2009-13”). Under ASU 2009-13 all undelivered items under the agreement were divided into separate units of accounting based on whether the deliverable provides stand-alone value to the licensee. These units of accounting consist of (i) the license to develop and commercialize ARQ 092, (ii) committed future clinical trial services, (iii) committed future clinical trial costs and (ii) steering committee services. We determined the best estimate selling price (BESP) for each unit of accounting based upon management’s judgment and including factors such as discounted cash flows, estimated direct expenses and other costs and probability of successful outcome of clinical trials. | ||
As the license granted under the agreement was delivered, the license had standalone value, and there were no further obligations related to the license, revenue of $10 million related to this accounting unit was recognized in 2011 based on the best estimate of selling price of the license. Revenue related to clinical trial costs and steering committee services were recognized ratably over the clinical trial as services were provided and costs were incurred, up to the amount of cash received for these deliverables based on the best estimate of selling price of each deliverable. The development period for this agreement concluded in June 2013. We recognized revenue of zero and $1.3 million, and $0.6 million and $2.2 million related to this agreement for the three and nine months ended September 30, 2013 and 2012, respectively. At September 30, 2013, there was no balance remaining in deferred revenue. | ||
Daiichi Sankyo Tivantinib Agreement | ||
On December 18, 2008, we entered into a license, co-development and co-commercialization agreement with Daiichi Sankyo to conduct research, clinical trials and the commercialization of tivantinib in human cancer indications in the U.S., Europe, South America and the rest of the world, excluding Japan, China (including Hong Kong), South Korea and Taiwan, where Kyowa Hakko Kirin has exclusive rights for development and commercialization. | ||
The agreement provides for a $60 million cash upfront licensing payment from Daiichi Sankyo to us, which we received in December 2008, and an additional $560 million in potential development and sales milestone payments offset by our share of the Phase 3 costs. Upon commercialization, we will receive tiered, double-digit royalties from Daiichi Sankyo on net sales of tivantinib commensurate with the magnitude of the transaction. We retain the option to participate in the commercialization of tivantinib in the U.S. We and Daiichi Sankyo will share equally the costs of Phase 2 and Phase 3 clinical studies, with our share of Phase 3 costs payable solely from milestone and royalty payments by Daiichi Sankyo. | ||
Under the terms of our tivantinib collaboration agreement with Daiichi Sankyo we share development costs equally with our share of Phase 3 costs funded solely from milestones and royalties. In each quarter the tivantinib collaboration costs we incur are compared with those of Daiichi Sankyo. If our costs for the quarter exceed Daiichi Sankyo’s, we recognize revenue on the amounts due to us under the contingency adjusted performance model. Revenue is calculated on a pro-rata basis using the time elapsed from inception of the agreement over the estimated duration of the development period under the agreement. If our costs for the quarter are less than those of Daiichi Sankyo’s, we report the amount due to Daiichi Sankyo as contra-revenue in that quarter. To the extent that our share of Phase 3 collaboration costs exceeds the amount of milestones and royalties received, that excess is netted against future milestones and royalties if and when earned and is not reported as contra-revenue. | ||
Our cumulative share of the Daiichi Sankyo Phase 3 costs inception to date through September 30, 2013, totaled $76.9 million. We received a milestone of $25 million in February 2011 upon enrolling the first patient in the MARQUEE trial, the cash proceeds of which were subsequently applied to our share of Phase 3 collaboration costs. In January 31, 2013, we announced that the first patient had been enrolled in the pivotal Phase 3 METIV trial of tivantinib, entitling us to a $15 million milestone. That $15 million milestone was netted against our cumulative share of Phase 3 collaboration costs in the nine months ended September 30, 2013, and consequently we did not receive any cash proceeds from this milestone. Our cumulative share of Phase 3 collaboration costs has exceeded the amount of milestones earned through September 30, 2013 by $36.9 million which will be netted against future milestones and royalties, if any, when earned and has not been reported as contra-revenue. | ||
For the three months ended September 30, 2013, our non-Phase 3 tivantinib collaboration costs incurred exceeded those of Daiichi Sankyo’s and we recognized $23 as research and development revenue under the contingency adjusted performance model. Through the nine months ended September 30, 2013 we recognized a net of $0.1 million of research and development revenue related to our non-Phase 3 tivantinib collaboration costs which included contra-revenue of $0.2 million and $0.3 million of revenue. | ||
For the three months and nine months ended September 30, 2012 our non-Phase 3 tivantinib collaboration costs incurred were less than those of Daiichi Sankyo’s by $0.3 million and $1.2 million, respectively which were recognized as contra-revenue and netted against our tivantinib Daiichi Sankyo research and development revenue. Our non-refundable share of advance drug purchases is recognized as contra-revenue as the related drugs are administered to patients. For the three and nine months ended September 30, 2012, zero and $2.5 million of these advance drug purchases, respectively were also recognized as contra-revenue. There were no advance drug purchases in the nine months ended September 30, 2012. | ||
The duration and termination of the agreement are tied to future events. Unless earlier terminated due to breach, insolvency or upon 90 days notice if prior to phase 3 clinical trials or 180 days notice if on or after the beginning of phase 3 clinical trials by Daiichi Sankyo, the agreement shall continue until the later of (i) such time as Daiichi Sankyo is no longer developing at least one licensed product or (ii) if Daiichi Sankyo has commercialized a licensed product or products, such time as all royalty terms for all licensed products have ended. The royalty term, on a country-by-country basis for a product, ends as of the later of (i) the expiration of the last valid claim under a patent covering the manufacture, use, or sale of a licensed product or (ii) a certain number of years from the date of the commercial sale of the licensed product in such country. | ||
Revenue for this agreement is recognized using the contingency-adjusted performance model. Through September 30, 2012, revenue was recognized based upon an estimated development period through December 2013. As a result of the October 2012 decision to discontinue the MARQUEE trial, the development period as of October 1, 2012 was extended to June 2015. Therefore, since the fourth quarter of 2012, revenue has been recognized over this revised development period. For the three and nine months ended September 30, 2013 and 2012, $2.1 million and $6.3 million, and $4.4 million and $10.5 million, respectively were recognized as net revenue. At September 30, 2013, $14.7 million remains in deferred revenue. | ||
Kyowa Hakko Kirin Licensing Agreement | ||
On April 27, 2007, we entered into an exclusive license agreement with Kyowa Hakko Kirin to develop and commercialize tivantinib in Japan and parts of Asia. We received a $3 million portion of an upfront licensing fee under this agreement in the first quarter of 2007, and we received an additional $27 million in upfront licensing fees on May 7, 2007. The agreement includes $123 million in upfront and potential development milestone payments from Kyowa Hakko Kirin to ArQule, including the $30 million cash upfront licensing payments. In February 2008, we received a $3 million milestone payment from Kyowa Hakko Kirin. Upon commercialization, ArQule will receive tiered royalties in the mid-teen to low-twenty percent range from Kyowa Hakko Kirin on net sales of tivantinib. Kyowa Hakko Kirin will be responsible for all clinical development costs and commercialization of the compound in certain Asian countries, consisting of Japan, China (including Hong Kong), South Korea and Taiwan. In July 2010, we announced the initiation of a Phase 2 trial with tivantinib by Kyowa Hakko Kirin in gastric cancer, for which we received a $5 million milestone payment in September 2010. In August 2011, Kyowa Hakko Kirin announced the initiation of the Phase 3 ATTENTION trial in Asia of tivantinib and erlotinib in non-squamous NSCLC patients with wild type EGFR. Dosing of the first patient in this trial triggered a $10 million milestone payment, which we received in August 2011. The milestone payment was recorded as deferred revenue and is being recognized as revenue using the contingency-adjusted performance model with an estimated development period through April 2016. | ||
In addition to the upfront and possible regulatory milestone payments totaling $123 million, we will be eligible for future milestone payments based on the achievement of certain levels of net sales. We will recognize the payments, if any, as revenue in accordance with the contingency-adjusted performance model. As of September 30, 2013, we had not recognized any revenue from these sales milestone payments, and there can be no assurance that it will do so in the future. | ||
The duration and termination of the agreement are tied to future events. Unless earlier terminated due to breach, insolvency or upon 90 days notice by Kyowa Hakko Kirin, the agreement terminates on the date that the last royalty term expires in all countries in the territory. The royalty term ends as of the later of (i) the expiration of the last pending patent application or expiration of the patent in the country covering the manufacture, use, or sale of a licensed product or (ii) a certain number of years from the date of the commercial launch in such country of such license product. | ||
Revenue for this agreement is recognized using the contingency-adjusted performance model with an estimated development period through April 2016. For the three and nine months ended September 30, 2013 and 2012 $1.4 million and $4.3 million, and $1.4 million and $4.3 million, respectively were recognized as revenue. At September 30, 2013, $14.7 million remains in deferred revenue. | ||
Other Project Revenue | ||
During the nine months ended September 30, 2013 we completed a one-time research project. In connection with this project we received a payment of $1.75 million which we recognized as revenue in the nine months ended September 30, 2013. No such revenue was recognized in the three months ended September 30, 2013. |
MARKETABLE_SECURITIES_AND_FAIR
MARKETABLE SECURITIES AND FAIR VALUE MEASUREMENTS | 9 Months Ended | |||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||
Marketable Securities and Fair Value Measurements [Abstract] | ' | |||||||||||||||||
MARKETABLE SECURITIES AND FAIR VALUE MEASUREMENTS | ' | |||||||||||||||||
3 | MARKETABLE SECURITIES AND FAIR VALUE MEASUREMENTS | |||||||||||||||||
We generally classify our marketable securities as available-for-sale at the time of purchase and re-evaluate such designation as of each balance sheet date. Since we generally intend to convert them into cash as necessary to meet our liquidity requirements our marketable securities are classified as cash equivalents if the original maturity, from the date of purchase, is ninety days or less and as short-term investments if the original maturity, from the date of purchase, is in excess of ninety days but less than one year. Our marketable securities are classified as long-term investments if the maturity date is in excess of one year of the balance sheet date. | ||||||||||||||||||
We report available-for-sale investments at fair value as of each balance sheet date and include any unrealized gains and, to the extent deemed temporary, unrealized losses in stockholders’ equity. Realized gains and losses are determined using the specific identification method and are included in other income (expense) in the statement of operations and comprehensive loss. Our auction rate securities are classified as trading securities and any changes in the fair value of those securities are recorded as other income (expense) in the statement of operations and comprehensive loss. | ||||||||||||||||||
We conduct quarterly reviews to determine the fair value of our investment portfolio and to identify and evaluate each investment that has an unrealized loss, in accordance with the meaning of other-than-temporary impairment and its application to certain investments. An unrealized loss exists when the current fair value of an individual security is less than its amortized cost basis. In the event that the cost basis of a security exceeds its fair value, we evaluate, among other factors, the duration of the period that, and extent to which, the fair value is less than cost basis, the financial health of and business outlook for the issuer, including industry and sector performance, and operational and financing cash flow factors, overall market conditions and trends, our intent to sell the investment and if it is more likely than not that we would be required to sell the investment before its anticipated recovery. Unrealized losses on available-for-sale securities that are determined to be temporary, and not related to credit loss, are recorded in accumulated other comprehensive income (loss). | ||||||||||||||||||
For available-for-sale debt securities with unrealized losses, we perform an analysis to assess whether we intend to sell or whether we would more likely than not be required to sell the security before the expected recovery of the amortized cost basis. Where we intend to sell a security, or may be required to do so, the security’s decline in fair value is deemed to be other-than-temporary and the full amount of the unrealized loss is reflected in the statement of operations and comprehensive loss as an impairment loss. | ||||||||||||||||||
Regardless of our intent to sell a security, we perform additional analysis on all securities with unrealized losses to evaluate losses associated with the creditworthiness of the security. Credit losses are identified where we do not expect to receive cash flows sufficient to recover the amortized cost basis of a security. | ||||||||||||||||||
We invest our available cash primarily in U.S. Treasury bill funds, money market funds, commercial paper, and U.S. federal and state agency backed certificates, including auction rate securities that have investment grade ratings. Auction rate securities are structured with short-term interest reset dates of generally less than 90 days, but with contractual maturities that can be well in excess of ten years. At the end of each reset period, which occurs every seven to twenty-eight days, investors can sell or continue to hold the securities at par value. If auction rate securities fail an auction, due to sell orders exceeding buy orders, the funds associated with a failed auction would not be accessible until a successful auction occurred, a buyer was found outside the auction process, the underlying securities matured or a settlement with the underwriter is reached. | ||||||||||||||||||
The following is a summary of the fair value of available-for-sale marketable securities we held at September 30, 2013 and December 31, 2012: | ||||||||||||||||||
30-Sep-13 | Amortized | Gross | Gross | Fair | ||||||||||||||
Cost | Unrealized | Unrealized | Value | |||||||||||||||
Gains | Losses | |||||||||||||||||
Security type | ||||||||||||||||||
Corporate debt securities-short term | $ | 65,151 | $ | 72 | $ | (10 | ) | $ | 65,213 | |||||||||
Corporate debt securities-long term | 19,046 | 29 | (6 | ) | 19,069 | |||||||||||||
Total available-for-sale marketable securities | $ | 84,197 | $ | 101 | $ | (16 | ) | $ | 84,282 | |||||||||
31-Dec-12 | Amortized | Gross | Gross | Fair | ||||||||||||||
Cost | Unrealized | Unrealized | Value | |||||||||||||||
Gains | Losses | |||||||||||||||||
Security type | ||||||||||||||||||
Corporate debt securities-short term | $ | 64,921 | $ | 45 | $ | (22 | ) | $ | 64,944 | |||||||||
Corporate debt securities-long term | 49,460 | 93 | (14 | ) | 49,539 | |||||||||||||
Total available-for-sale marketable securities | $ | 114,381 | $ | 138 | $ | (36 | ) | $ | 114,483 | |||||||||
Our available-for-sale marketable securities in a loss position at September 30, 2013 and December 31, 2012, were in a continuous unrealized loss position for less than 12 months. | ||||||||||||||||||
The following is a summary of the fair value of trading securities we held at September 30, 2013 and December 31, 2012: | ||||||||||||||||||
30-Sep-13 | Amortized | Gross | Gross | Fair | ||||||||||||||
Cost | Unrealized | Unrealized | Value | |||||||||||||||
Gains | Losses | |||||||||||||||||
Security type | ||||||||||||||||||
Auction rate securities | $ | 2,100 | $ | — | $ | (377 | ) | $ | 1,723 | |||||||||
Total trading securities | $ | 2,100 | $ | — | $ | (377 | ) | $ | 1,723 | |||||||||
31-Dec-12 | Amortized | Gross | Gross | Fair | ||||||||||||||
Cost | Unrealized | Unrealized | Value | |||||||||||||||
Gains | Losses | |||||||||||||||||
Security type | ||||||||||||||||||
Auction rate securities | $ | 2,100 | $ | — | $ | (311 | ) | $ | 1,789 | |||||||||
Total trading securities | $ | 2,100 | $ | — | $ | (311 | ) | $ | 1,789 | |||||||||
The underlying collateral of our auction rate securities consists of student loans, supported by the federal government as part of the Federal Family Education Loan Program (FFELP). | ||||||||||||||||||
At September 30, 2013 and December 31, 2012, our auction rate securities are included in marketable securities-long term and total $1,723 and $1,789, respectively. The net increase in value of our auction rate securities of $4 in the three months ended September 30, 2013, was recorded as a gain in other income (expenses) in the statement of operations and comprehensive loss The net decrease in value of our auction rate securities of $66 in the nine months ended September 30, 2013, was recorded as a loss in other income (expenses) in the statement of operations and comprehensive loss. The net increase in value of our auction rate securities of $15 and $98 in the three and nine months ended September 30, 2012, respectively, was recorded as a gain in other income (expenses) in the statement of operations and comprehensive loss. | ||||||||||||||||||
The following tables present information about our assets that are measured at fair value on a recurring basis for the periods presented and indicates the fair value hierarchy of the valuation techniques we utilized to determine such fair value. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. Fair values determined by Level 2 inputs utilize data points that are observable such as quoted prices, interest rates and yield curves. We value our level 2 investments using quoted prices for identical assets in the markets where they are traded, although such trades may not occur daily. These quoted prices are based on observable inputs, primarily interest rates. Fair values determined by Level 3 inputs are unobservable data points for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. There were no transfers in or out of Level 1 or Level 2 measurements for the periods presented: | ||||||||||||||||||
September 30, | Quoted Prices in | Significant | Significant | |||||||||||||||
2013 | Active Markets | Other | Unobservable | |||||||||||||||
(Level 1) | Observable | Inputs | ||||||||||||||||
Inputs | (Level 3) | |||||||||||||||||
(Level 2) | ||||||||||||||||||
Cash equivalents | $ | 13,543 | $ | 13,543 | $ | — | $ | — | ||||||||||
Corporate debt securities-short term | 65,213 | — | 65,213 | — | ||||||||||||||
Corporate debt securities-long term | 19,069 | — | 19,069 | — | ||||||||||||||
Auction rate securities-long term | 1,723 | — | — | 1,723 | ||||||||||||||
Total | $ | 99,548 | $ | 13,543 | $ | 84,282 | $ | 1,723 | ||||||||||
December 31, | Quoted Prices in | Significant | Significant | |||||||||||||||
2012 | Active Markets | Other | Unobservable | |||||||||||||||
(Level 1) | Observable | Inputs | ||||||||||||||||
Inputs | (Level 3) | |||||||||||||||||
(Level 2) | ||||||||||||||||||
Cash equivalents | $ | 11,754 | $ | 11,754 | $ | — | $ | — | ||||||||||
Corporate debt securities-short term | 64,944 | — | 64,944 | — | ||||||||||||||
Corporate debt securities-long term | 49,539 | — | 49,539 | — | ||||||||||||||
Auction rate securities-long term | 1,789 | — | — | 1,789 | ||||||||||||||
Total | $ | 128,026 | $ | 11,754 | $ | 114,483 | $ | 1,789 | ||||||||||
Due to the lack of market quotes relating to our auction rate securities, the fair value measurements for our auction rate securities have been estimated using an income approach model (discounted cash flow analysis), which is exclusively based on Level 3 inputs. The model considers factors that reflect assumptions market participants would use in pricing including, among others, the collateralization underlying the investments, the creditworthiness of the counterparty, the expected future cash flows, liquidity premiums, the probability of successful auctions in the future, and interest rates. The assumptions used are subject to volatility and may change as the underlying sources of these assumptions and markets conditions change. | ||||||||||||||||||
The following table rolls forward the fair value of our auction rate securities and put option, whose fair values are determined by Level 3 inputs for 2013: | ||||||||||||||||||
Amount | ||||||||||||||||||
Balance at December 31, 2012 | $ | 1,789 | ||||||||||||||||
Loss on auction rate securities | (66 | ) | ||||||||||||||||
Balance at September 30, 2013 | $ | 1,723 | ||||||||||||||||
The following table rolls forward the fair value of our auction rate securities and put option, whose fair values are determined by Level 3 inputs for 2012: | ||||||||||||||||||
Amount | ||||||||||||||||||
Balance at December 31, 2011 | $ | 1,676 | ||||||||||||||||
Gain on auction rate securities | 98 | |||||||||||||||||
Balance at September 30, 2012 | $ | 1,774 | ||||||||||||||||
The following table provides quantitative information on the unobservable inputs of our fair value measurements for our Level 3 assets for the nine months ended September 30, 2013: | ||||||||||||||||||
Quantitative Information about Level 3 Fair Value Measurements | ||||||||||||||||||
Estimated Fair Value at | Valuation | Unobservable Inputs | Range | |||||||||||||||
30-Sep-13 | Technique | |||||||||||||||||
Auction rate securities | $ | 1,723 | Discounted | |||||||||||||||
cash | ||||||||||||||||||
flow | ||||||||||||||||||
Maximum rate | 1.8 | % | ||||||||||||||||
Liquidity risk premium | 3.5% - 4.5 | % | ||||||||||||||||
Probability of earning maximum rate until maturity | 0.05 | % | ||||||||||||||||
Probability of principal returned prior to maturity | 74.4% - 76.9 | % | ||||||||||||||||
Probability of default | 23.0% - 25.5 | % | ||||||||||||||||
A significant increase or decrease in the individual assumptions included above could result in a significantly lower or higher fair value measurement. |
ACCOUNTS_PAYABLE_AND_ACCRUED_E
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Payables and Accruals [Abstract] | ' | ||||||||
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | ' | ||||||||
4. ACCOUNTS PAYABLE AND ACCRUED EXPENSES | |||||||||
Accounts payable and accrued expenses include the following at September 30, 2013 and December 31, 2012: | |||||||||
2013 | 2012 | ||||||||
Accounts payable | $ | 478 | $ | 560 | |||||
Accrued payroll | 2,157 | 2,872 | |||||||
Accrued outsourced pre-clinical and clinical fees | 4,477 | 5,501 | |||||||
Accrued professional fees | 487 | 641 | |||||||
Accrued restructuring costs | 125 | — | |||||||
Other accrued expenses | 366 | 589 | |||||||
$ | 8,090 | $ | 10,163 |
NET_LOSS_PER_SHARE
NET LOSS PER SHARE | 9 Months Ended |
Sep. 30, 2013 | |
Earnings Per Share [Abstract] | ' |
NET LOSS PER SHARE | ' |
5. NET LOSS PER SHARE | |
Net loss per share is computed using the weighted average number of common shares outstanding. Basic and diluted net loss per share amounts are equivalent for the periods presented as the inclusion of potential common shares in the number of shares used for the diluted computation would be anti-dilutive to loss per share. Potential common shares, the shares that would be issued upon the exercise of outstanding stock options, were 7,988,732 and 7,474,258 for the three and nine months ended September 30, 2013 and 2012, respectively. |
STOCKBASED_COMPENSATION_AND_ST
STOCK-BASED COMPENSATION AND STOCK PLANS | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | ' | ||||||||||||||||
STOCK-BASED COMPENSATION AND STOCK PLANS | ' | ||||||||||||||||
6. STOCK-BASED COMPENSATION AND STOCK PLANS | |||||||||||||||||
Our stock-based compensation cost is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense over the employees’ requisite service period (generally the vesting period of the equity grant). We estimate the fair value of stock options using the Black-Scholes valuation model. Key input assumptions used to estimate the fair value of stock options include the exercise price of the award, expected option term, expected volatility of our stock over the option’s expected term, risk-free interest rate over the option’s expected term, and the expected annual dividend yield. We believe that the valuation technique and approach utilized to develop the underlying assumptions are appropriate in calculating the fair values of our stock options granted in the three and nine months ended September 30, 2013 and 2012. | |||||||||||||||||
The following table presents stock-based compensation expense included in our Condensed Statements of Operations and Comprehensive Loss: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Research and development | $ | 240 | $ | 413 | $ | 1,077 | $ | 1,287 | |||||||||
General and administrative | 511 | 617 | 1,986 | 1,955 | |||||||||||||
Restructuring | 138 | — | 138 | — | |||||||||||||
Total stock-based compensation expense | $ | 889 | $ | 1,030 | $ | 3,201 | $ | 3,242 | |||||||||
In the three months and nine months ended September 30, 2013 and 2012, no stock-based compensation expense was capitalized and there were no recognized tax benefits associated with the stock-based compensation expense. | |||||||||||||||||
Option activity under our stock plans for the nine months ended September 30, 2013 was as follows: | |||||||||||||||||
Stock Options | Number of | Weighted Average | |||||||||||||||
Shares | Exercise Price | ||||||||||||||||
Outstanding as of December 31, 2012 | 7,157,458 | $ | 5.7 | ||||||||||||||
Granted | 1,220,910 | 2.53 | |||||||||||||||
Exercised | (3,000 | ) | 2.35 | ||||||||||||||
Cancelled | (386,636 | ) | 4.78 | ||||||||||||||
Outstanding as of September 30, 2013 | 7,988,732 | $ | 5.26 | ||||||||||||||
Exercisable as of September 30, 2013 | 5,312,463 | $ | 5.35 | ||||||||||||||
The aggregate intrinsic value of options outstanding at September 30, 2013 was $0. The weighted average grant date fair value of options granted in the nine months ended September 30, 2013 and 2012 was $1.69 and $4.67 per share, respectively. The intrinsic value of options exercised in the nine months ended September 30, 2013 and 2012 was $1 and $603. In the nine months ended September 30, 2013, 3,000 options were exercised. | |||||||||||||||||
Shares vested, expected to vest and exercisable at September 30, 2013 are as follows: | |||||||||||||||||
Shares | Weighted-Average | Weighted-Average | Aggregate | ||||||||||||||
Exercise Price | Remaining | Intrinsic | |||||||||||||||
Contractual | Value | ||||||||||||||||
Term (in years) | |||||||||||||||||
Vested and unvested expected to vest at September 30, 2013 | 7,840,058 | $ | 5.26 | 5.76 | $ | — | |||||||||||
Exercisable at September 30, 2013 | 5,312,463 | $ | 5.35 | 4.44 | $ | — | |||||||||||
The total compensation cost not yet recognized as of September 30, 2013 related to non-vested option awards was $6.8 million, which will be recognized over a weighted-average period of 2.4 years. During the nine months ended September 30, 2013 281,734 shares were forfeited. The weighted average remaining contractual life for options exercisable at September 30, 2013 was 4.4 years. | |||||||||||||||||
In 2013, we granted 242,697 shares of restricted stock to employees, vesting annually over a four year period. No restricted stock was granted in 2012. The weighted average fair value of the restricted stock at the time of grant in 2013 was $2.51 per share, and is being expensed ratably over the vesting period. We recognized share-based compensation expense related to restricted stock of $166 and $204 for the nine months ended September 30, 2013 and 2012, respectively. | |||||||||||||||||
Restricted stock activity under the Plan for the nine months ended September 30, 2013 was as follows: | |||||||||||||||||
Restricted Stock | Number of Shares | Weighted Average | |||||||||||||||
Grant Date | |||||||||||||||||
Fair Value | |||||||||||||||||
Unvested as of December 31, 2012 | 79,795 | $ | 3.54 | ||||||||||||||
Granted | 242,697 | 2.51 | |||||||||||||||
Vested | (80,993 | ) | 3.49 | ||||||||||||||
Cancelled | (35,767 | ) | 2.51 | ||||||||||||||
Unvested as of September 30, 2013 | 205,732 | $ | 2.51 | ||||||||||||||
The fair value of restricted stock vested in the nine months ended September 30, 2013 and 2012 was $206 and $749, respectively. | |||||||||||||||||
Through September 30, 2013, 105,262 shares have been forfeited, and 572,219 shares have vested under the plan. | |||||||||||||||||
In July 2010, we amended our chief executive officer’s (the “CEO’s”) employment agreement to grant the CEO 100,000 stock options, of which 25% vested upon grant and 25% vest annually over the following three years, and a maximum of 390,000 performance-based stock units that vest upon the achievement of certain performance and market based targets. In February 2012, we amended our chief medical officer’s (the “CMO’s”) employment agreement to grant the CMO 50,000 performance-based stock units that vest upon the achievement of certain performance based targets. | |||||||||||||||||
In March 2013, we amended our chief operating officer’s (the “COO’s”) employment agreement to grant the COO 125,000 performance-based stock units that vest upon the achievement of certain performance based targets. In March 2013, we amended our CMO’s employment agreement to grant the CMO 120,000 performance-based stock units that vest upon the achievement of certain performance based targets. | |||||||||||||||||
Through September 30, 2013, no expense has been recorded for any of these performance-based stock units. |
RECENT_ACCOUNTING_PRONOUNCEMEN
RECENT ACCOUNTING PRONOUNCEMENTS | 9 Months Ended |
Sep. 30, 2013 | |
Accounting Changes and Error Corrections [Abstract] | ' |
RECENT ACCOUNTING PRONOUNCEMENTS | ' |
7. RECENT ACCOUNTING PRONOUNCEMENTS | |
From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies that are adopted by us as of the specified effective date. Unless otherwise discussed, we believe that the impact of recently issued standards that are not yet effective will not have a material impact on our financial position or results of operations upon adoption. | |
In February 2013, the Financial Accounting Standards Board (“FASB”) issued an amendment to the accounting guidance on reporting amounts reclassified out of accumulated other comprehensive income. The guidance requires an entity to report the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income if the amount being reclassified is required under United States Generally Accepted Accounting Principles (“GAAP”) to be reclassified in its entirety to net income. For other amounts that are not required under United States GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures required under United States GAAP that provide additional detail about those amounts. The guidance is effective prospectively for reporting periods beginning after December 15, 2012. The adoption of this standard on January 1, 2013 did not impact our financial position or results of operations. |
INCOME_TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2013 | |
Income Tax Disclosure [Abstract] | ' |
INCOME TAXES | ' |
8. INCOME TAXES | |
As of December 31, 2012, we had federal NOL, state NOL, and research and development credit carryforwards of approximately $265,004, $113,262 and $24,885 respectively, expiring from 2013 to 2032, which can be used to offset future income tax liabilities. Federal capital loss carryforwards of approximately $571, expiring in 2015, can be used to offset future federal capital gain income. Approximately $15,003 of our federal NOL and $907 of our state NOL were generated from excess tax deductions from share-based awards, the tax benefit of which will be credited to additional paid-in-capital when the deductions reduce current taxes payable. | |
At September 30, 2013 and December 31, 2012, we had no unrecognized tax benefits. We do not expect that the total amount of unrecognized tax benefits will significantly increase in the next twelve months. Our policy is to recognize interest and penalties related to uncertain tax positions in income tax expense. As of September 30, 2013 and December 31, 2012, we had no accrued interest or penalties related to uncertain tax positions. Our U.S. federal tax returns for the tax years 2010 through 2012 and our state tax returns for the tax years 2009 through 2012 remain open to examination. Prior tax years remain open to the extent of net operating loss and tax credit carryforwards. | |
Utilization of NOL and research and development credit carryforwards may be subject to a substantial annual limitation in the event of an ownership change that has occurred previously or could occur in the future pursuant to Section 382 and 383 of the Internal Revenue Code of 1986, as amended, as well as similar state provisions. An ownership change may limit the amount of NOL and research and development credit carryforwards that can be utilized annually to offset future taxable income, and may, in turn, result in the expiration of a portion of those carryforwards before utilization. In general, an ownership change, as defined by Section 382, results from transactions that increase the ownership of certain stockholders or public groups in the stock of a corporation by more than 50 percentage points over a three year period. We undertook a detailed study of our NOL and research and development credit carryforwards through January 31, 2013, to determine whether such amounts are likely to be limited by Section 382. As a result of this analysis, we currently do not believe any Sections 382 or 383 limitations will significantly impact our ability to offset income with available NOL and research and development credit carryforwards. However, future ownership changes under Section 382 may limit our ability to fully utilize these tax benefits. |
NOTES_PAYABLE
NOTES PAYABLE | 9 Months Ended |
Sep. 30, 2013 | |
Notes Payable [Abstract] | ' |
NOTES PAYABLE | ' |
9. NOTES PAYABLE | |
In October 2008, we entered into a margin loan agreement with a financial institution collateralized by $2.9 million of our auction rate securities and borrowed $1.7 million which is the maximum amount allowed under this facility. The amount outstanding under this facility is $1.7 million at September 30, 2013 and 2012, collateralized by $2.1 million of auction rate securities at cost. Interest expense was $8 and $18 and $7 and $19 for the three and nine months ended September 30, 2013 and 2012, respectively. | |
Management believes the carrying value of the note payable approximates its fair value for these borrowings and would be classified as a Level 2 measurement due to use of valuation inputs based on similar liabilities in the market. |
RESTRUCTURING
RESTRUCTURING | 9 Months Ended |
Sep. 30, 2013 | |
Restructuring and Related Activities [Abstract] | ' |
RESTRUCTURING | ' |
10. RESTRUCTURING | |
In July 2013, we implemented a focused reduction in our workforce of 26 positions, resulting in a remaining workforce of approximately 68 employees. This action was intended to align human and financial resources with our primary focus on clinical-stage development, while retaining our core discovery capabilities. The costs associated with this action were comprised of severance payments of $434 and benefits continuation costs of $94. In the quarter ended September 30, 2013, $403 of these costs was paid and the remaining amount is expected to be paid by December 31, 2013. In addition, in the three months ended September 30, 2013, we incurred non-cash charges of approximately $139 related to the modification of employee stock options. |
MARKETABLE_SECURITIES_AND_FAIR1
MARKETABLE SECURITIES AND FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended | |||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||
Marketable Securities and Fair Value Measurements [Abstract] | ' | |||||||||||||||||
Schedule of fair value of available-for-sale marketable securities | ' | |||||||||||||||||
30-Sep-13 | Amortized | Gross | Gross | Fair | ||||||||||||||
Cost | Unrealized | Unrealized | Value | |||||||||||||||
Gains | Losses | |||||||||||||||||
Security type | ||||||||||||||||||
Corporate debt securities-short term | $ | 65,151 | $ | 72 | $ | (10 | ) | $ | 65,213 | |||||||||
Corporate debt securities-long term | 19,046 | 29 | (6 | ) | 19,069 | |||||||||||||
Total available-for-sale marketable securities | $ | 84,197 | $ | 101 | $ | (16 | ) | $ | 84,282 | |||||||||
31-Dec-12 | Amortized | Gross | Gross | Fair | ||||||||||||||
Cost | Unrealized | Unrealized | Value | |||||||||||||||
Gains | Losses | |||||||||||||||||
Security type | ||||||||||||||||||
Corporate debt securities-short term | $ | 64,921 | $ | 45 | $ | (22 | ) | $ | 64,944 | |||||||||
Corporate debt securities-long term | 49,460 | 93 | (14 | ) | 49,539 | |||||||||||||
Total available-for-sale marketable securities | $ | 114,381 | $ | 138 | $ | (36 | ) | $ | 114,483 | |||||||||
Schedule of fair value of trading securities | ' | |||||||||||||||||
30-Sep-13 | Amortized | Gross | Gross | Fair | ||||||||||||||
Cost | Unrealized | Unrealized | Value | |||||||||||||||
Gains | Losses | |||||||||||||||||
Security type | ||||||||||||||||||
Auction rate securities | $ | 2,100 | $ | — | $ | (377 | ) | $ | 1,723 | |||||||||
Total trading securities | $ | 2,100 | $ | — | $ | (377 | ) | $ | 1,723 | |||||||||
31-Dec-12 | Amortized | Gross | Gross | Fair | ||||||||||||||
Cost | Unrealized | Unrealized | Value | |||||||||||||||
Gains | Losses | |||||||||||||||||
Security type | ||||||||||||||||||
Auction rate securities | $ | 2,100 | $ | — | $ | (311 | ) | $ | 1,789 | |||||||||
Total trading securities | $ | 2,100 | $ | — | $ | (311 | ) | $ | 1,789 | |||||||||
Schedule of assets measured at fair value on a recurring basis | ' | |||||||||||||||||
September 30, | Quoted Prices in | Significant | Significant | |||||||||||||||
2013 | Active Markets | Other | Unobservable | |||||||||||||||
(Level 1) | Observable | Inputs | ||||||||||||||||
Inputs | (Level 3) | |||||||||||||||||
(Level 2) | ||||||||||||||||||
Cash equivalents | $ | 13,543 | $ | 13,543 | $ | — | $ | — | ||||||||||
Corporate debt securities-short term | 65,213 | — | 65,213 | — | ||||||||||||||
Corporate debt securities-long term | 19,069 | — | 19,069 | — | ||||||||||||||
Auction rate securities-long term | 1,723 | — | — | 1,723 | ||||||||||||||
Total | $ | 99,548 | $ | 13,543 | $ | 84,282 | $ | 1,723 | ||||||||||
December 31, | Quoted Prices in | Significant | Significant | |||||||||||||||
2012 | Active Markets | Other | Unobservable | |||||||||||||||
(Level 1) | Observable | Inputs | ||||||||||||||||
Inputs | (Level 3) | |||||||||||||||||
(Level 2) | ||||||||||||||||||
Cash equivalents | $ | 11,754 | $ | 11,754 | $ | — | $ | — | ||||||||||
Corporate debt securities-short term | 64,944 | — | 64,944 | — | ||||||||||||||
Corporate debt securities-long term | 49,539 | — | 49,539 | — | ||||||||||||||
Auction rate securities-long term | 1,789 | — | — | 1,789 | ||||||||||||||
Total | $ | 128,026 | $ | 11,754 | $ | 114,483 | $ | 1,789 | ||||||||||
Schedule of fair value of auction rate securities | ' | |||||||||||||||||
The following table rolls forward the fair value of our auction rate securities and put option, whose fair values are determined by Level 3 inputs for 2013: | ||||||||||||||||||
Amount | ||||||||||||||||||
Balance at December 31, 2012 | $ | 1,789 | ||||||||||||||||
Loss on auction rate securities | (66 | ) | ||||||||||||||||
Balance at September 30, 2013 | $ | 1,723 | ||||||||||||||||
The following table rolls forward the fair value of our auction rate securities and put option, whose fair values are determined by Level 3 inputs for 2012: | ||||||||||||||||||
Amount | ||||||||||||||||||
Balance at December 31, 2011 | $ | 1,676 | ||||||||||||||||
Gain on auction rate securities | 98 | |||||||||||||||||
Balance at September 30, 2012 | $ | 1,774 | ||||||||||||||||
Schedule of quantitative information on the unobservable inputs of fair value measurements for Level 3 assets | ' | |||||||||||||||||
Quantitative Information about Level 3 Fair Value Measurements | ||||||||||||||||||
Estimated Fair Value at | Valuation | Unobservable Inputs | Range | |||||||||||||||
30-Sep-13 | Technique | |||||||||||||||||
Auction rate securities | $ | 1,723 | Discounted | |||||||||||||||
cash | ||||||||||||||||||
flow | ||||||||||||||||||
Maximum rate | 1.8 | % | ||||||||||||||||
Liquidity risk premium | 3.5% - 4.5 | % | ||||||||||||||||
Probability of earning maximum rate until maturity | 0.05 | % | ||||||||||||||||
Probability of principal returned prior to maturity | 74.4% - 76.9 | % | ||||||||||||||||
Probability of default | 23.0% - 25.5 | % |
ACCOUNTS_PAYABLE_AND_ACCRUED_E1
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Payables and Accruals [Abstract] | ' | ||||||||
Schedule of accounts payable and accrued expense | ' | ||||||||
2013 | 2012 | ||||||||
Accounts payable | $ | 478 | $ | 560 | |||||
Accrued payroll | 2,157 | 2,872 | |||||||
Accrued outsourced pre-clinical and clinical fees | 4,477 | 5,501 | |||||||
Accrued professional fees | 487 | 641 | |||||||
Accrued restructuring costs | 125 | — | |||||||
Other accrued expenses | 366 | 589 | |||||||
$ | 8,090 | $ | 10,163 |
STOCKBASED_COMPENSATION_AND_ST1
STOCK-BASED COMPENSATION AND STOCK PLANS (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | ' | ||||||||||||||||
Schedule of stock-based compensation expense | ' | ||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Research and development | $ | 240 | $ | 413 | $ | 1,077 | $ | 1,287 | |||||||||
General and administrative | 511 | 617 | 1,986 | 1,955 | |||||||||||||
Restructuring | 138 | — | 138 | — | |||||||||||||
Total stock-based compensation expense | $ | 889 | $ | 1,030 | $ | 3,201 | $ | 3,242 | |||||||||
Schedule of activity of options under stock plans | ' | ||||||||||||||||
Stock Options | Number of | Weighted Average | |||||||||||||||
Shares | Exercise Price | ||||||||||||||||
Outstanding as of December 31, 2012 | 7,157,458 | $ | 5.7 | ||||||||||||||
Granted | 1,220,910 | 2.53 | |||||||||||||||
Exercised | (3,000 | ) | 2.35 | ||||||||||||||
Cancelled | (386,636 | ) | 4.78 | ||||||||||||||
Outstanding as of September 30, 2013 | 7,988,732 | $ | 5.26 | ||||||||||||||
Exercisable as of September 30, 2013 | 5,312,463 | $ | 5.35 | ||||||||||||||
Schedule of details regarding shares vested, expected to vest and exercisable | ' | ||||||||||||||||
Shares | Weighted-Average | Weighted-Average | Aggregate | ||||||||||||||
Exercise Price | Remaining | Intrinsic | |||||||||||||||
Contractual | Value | ||||||||||||||||
Term (in years) | |||||||||||||||||
Vested and unvested expected to vest at September 30, 2013 | 7,840,058 | $ | 5.26 | 5.76 | $ | — | |||||||||||
Exercisable at September 30, 2013 | 5,312,463 | $ | 5.35 | 4.44 | $ | — | |||||||||||
Schedule of activity of restricted stock under the plan | ' | ||||||||||||||||
Restricted Stock | Number of Shares | Weighted Average | |||||||||||||||
Grant Date | |||||||||||||||||
Fair Value | |||||||||||||||||
Unvested as of December 31, 2012 | 79,795 | $ | 3.54 | ||||||||||||||
Granted | 242,697 | 2.51 | |||||||||||||||
Vested | (80,993 | ) | 3.49 | ||||||||||||||
Cancelled | (35,767 | ) | 2.51 | ||||||||||||||
Unvested as of September 30, 2013 | 205,732 | $ | 2.51 |
NATURE_OF_OPERATIONS_AND_BASIS1
NATURE OF OPERATIONS AND BASIS OF PRESENTATION (Detail Textuals) (USD $) | Jan. 31, 2013 | Sep. 03, 2013 | Sep. 30, 2013 | Jan. 11, 2013 | Jan. 11, 2013 | Nov. 30, 2011 | Sep. 30, 2013 | Jan. 31, 2013 | Feb. 28, 2011 | Dec. 31, 2008 | Sep. 30, 2013 | Dec. 31, 2011 | Dec. 31, 2011 |
In Millions, unless otherwise specified | Clinical_site | Tivantinib dosage | Erlotinib dosage | Treatment arm | Control arm | Daiichi Sankyo ARQ 092 Agreement | Daiichi Sankyo ARQ 092 Agreement | Daiichi Sankyo Tivantinib Agreement | Daiichi Sankyo Tivantinib Agreement | Daiichi Sankyo Tivantinib Agreement | Daiichi Sankyo Tivantinib Agreement | Daiichi Sankyo Co. Ltd | Kyowa Hakko Kirin Co. Ltd. |
Patient | Milligram | Milligram | License agreement | License agreement | License agreement | License agreement | |||||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of patient planned to be enrolled | 300 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of clinical sites | 120 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Progression free survival period | ' | ' | ' | '8 months 9 days | '7 months 9 days | ' | ' | ' | ' | ' | ' | ' | ' |
Overall survival period | ' | ' | ' | '19 months 24 days | '16 months 27 days | ' | ' | ' | ' | ' | ' | ' | ' |
Objective response rate | ' | ' | ' | 45.00% | 33.00% | ' | ' | ' | ' | ' | ' | ' | ' |
Upfront payment received | ' | ' | ' | ' | ' | $10 | ' | ' | ' | $60 | ' | ' | ' |
Milestone payment received | ' | ' | ' | ' | ' | ' | ' | $15 | $25 | ' | $15 | $25 | $10 |
Notice period for termination of agreement | ' | ' | ' | ' | ' | ' | '90 days | ' | ' | ' | ' | ' | ' |
Quantity of dosage twice daily | ' | 240 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Quantity of dosage twice daily after reduction | ' | 120 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Quantity of dosage | ' | 360 | 150 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
COLLABORATIONS_AND_ALLIANCES_D
COLLABORATIONS AND ALLIANCES (Detail Textuals) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 1 Months Ended | 12 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2012 | Sep. 30, 2012 | Nov. 30, 2008 | Dec. 31, 2010 | |
Daiichi Sankyo Kinase Inhibitor Discovery Agreement | Daiichi Sankyo Kinase Inhibitor Discovery Agreement | Daiichi Sankyo Kinase Inhibitor Discovery Agreement | Daiichi Sankyo Kinase Inhibitor Discovery Agreement | |||||
Kinases | Kinases | |||||||
Research collaboration, exclusive license and co-commercialization agreement | Research collaboration, exclusive license and co-commercialization agreement | |||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Upfront payment received | ' | ' | ' | ' | ' | ' | $15,000,000 | ' |
Term under agreement for research support payments | ' | ' | ' | ' | ' | ' | '2 years | ' |
Extended additional term under agreement for research support payment | ' | ' | ' | ' | ' | ' | ' | '2 years |
Research and development revenue | $3,542,000 | $10,944,000 | $13,639,000 | $31,271,000 | $4,500,000 | $14,300,000 | ' | ' |
COLLABORATIONS_AND_ALLIANCES_D1
COLLABORATIONS AND ALLIANCES (Detail Textuals 1) (USD $) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2011 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ' | ' | ' | ' | ' |
Research and development revenue | ' | $3,542,000 | $10,944,000 | $13,639,000 | $31,271,000 |
Daiichi Sankyo ARQ 092 Agreement | License Agreement | ' | ' | ' | ' | ' |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ' | ' | ' | ' | ' |
Notice period for termination of agreement | ' | ' | ' | '90 days | ' |
Upfront fee on ARQ 092 Agreement | 10,000,000 | ' | ' | ' | ' |
Research and development revenue | ' | $0 | $600,000 | $1,300,000 | $2,200,000 |
COLLABORATIONS_AND_ALLIANCES_D2
COLLABORATIONS AND ALLIANCES (Detail Textuals 2) (USD $) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Jan. 31, 2013 | Feb. 28, 2011 | Dec. 31, 2008 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Research and development revenue | ' | ' | ' | $3,542,000 | $10,944,000 | $13,639,000 | $31,271,000 |
Daiichi Sankyo Tivantinib Agreement | ' | ' | ' | ' | ' | ' | ' |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Upfront licensing payment | ' | ' | 60,000,000 | ' | ' | ' | ' |
Additional potential development and sales milestone payments | ' | ' | 560,000,000 | ' | ' | ' | ' |
Cumulative share of Phase 3 collaboration costs | ' | ' | ' | ' | ' | 76,900,000 | ' |
Milestone payment received | 15,000,000 | 25,000,000 | ' | ' | ' | 15,000,000 | ' |
Cumulative share of Phase 3 collaboration costs in excess of milestones amounts received | ' | ' | ' | ' | ' | 36,900,000 | ' |
Amount recognized as research and development revenue | ' | ' | ' | 23,000 | ' | 100,000 | ' |
Contra revenue included in collaboration cost | ' | ' | ' | ' | 300,000 | 200,000 | 1,200,000 |
Revenue included in collaboration cost | ' | ' | ' | ' | ' | 300,000 | ' |
Non-refundable share of advance drug purchases recognized as contra-revenue | ' | ' | ' | ' | 0 | ' | 2,500,000 |
Notice period for termination of contract prior to start of specified period | ' | ' | ' | ' | ' | ' | '90 days |
Notice period for termination of contract Post start of Phase 3 clinical trials | ' | ' | ' | ' | ' | ' | '180 days |
Research and development revenue | ' | ' | ' | 2,100,000 | 4,400,000 | 6,300,000 | 10,500,000 |
Deferred Revenue | ' | ' | ' | $14,700,000 | ' | $14,700,000 | ' |
COLLABORATIONS_AND_ALLIANCES_D3
COLLABORATIONS AND ALLIANCES (Detail Textuals 3) (USD $) | 3 Months Ended | 9 Months Ended | 0 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | 1 Months Ended | ||||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | 7-May-07 | Apr. 30, 2007 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Aug. 31, 2011 | Feb. 29, 2008 | Sep. 30, 2010 | |
Kyowa Hakko Kirin Licensing Agreement | Kyowa Hakko Kirin Licensing Agreement | Kyowa Hakko Kirin Licensing Agreement | Kyowa Hakko Kirin Licensing Agreement | Kyowa Hakko Kirin Licensing Agreement | Kyowa Hakko Kirin Licensing Agreement | Kyowa Hakko Kirin Licensing Agreement | Kyowa Hakko Kirin Licensing Agreement | Kyowa Hakko Kirin Licensing Agreement | |||||
Phase Three Attention Trial Asia | Kyowa Hakko Kirin | Kyowa Hakko Kirin | |||||||||||
Phase Two trial Kyowa Hakko Kirin | |||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Upfront payment received | ' | ' | ' | ' | $27,000,000 | $3,000,000 | ' | ' | ' | ' | ' | ' | ' |
Upfront and potential development milestone payments | ' | ' | ' | ' | ' | ' | ' | ' | 123,000,000 | ' | ' | ' | ' |
Cash upfront licensing payments | ' | ' | ' | ' | ' | 30,000,000 | ' | ' | ' | ' | ' | ' | ' |
Milestone payment received | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,000,000 | 3,000,000 | 5,000,000 |
Percentage of minimum royalties expected to be received | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'mid-teen percent | ' |
Percentage of maximum royalties expected to be received | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'low-twenty percent | ' |
Research and development revenue | 3,542,000 | 10,944,000 | 13,639,000 | 31,271,000 | ' | ' | 1,400,000 | 1,400,000 | 4,300,000 | 4,300,000 | ' | ' | ' |
Deferred Revenue | ' | ' | ' | ' | ' | ' | 14,700,000 | ' | 14,700,000 | ' | ' | ' | ' |
Payment received on completion of one time research project | ' | ' | $1,750,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
MARKETABLE_SECURITIES_AND_FAIR2
MARKETABLE SECURITIES AND FAIR VALUE MEASUREMENTS - Summary of fair value of available-for-sale securities (Details) (USD $) | 9 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Dec. 31, 2012 |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Amortized Cost | $84,197 | $114,381 |
Gross Unrealized Gains | 101 | 138 |
Gross Unrealized Losses | -16 | -36 |
Fair Value | 84,282 | 114,483 |
Corporate debt securities | Short term | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Amortized Cost | 65,151 | 64,921 |
Gross Unrealized Gains | 72 | 45 |
Gross Unrealized Losses | -10 | -22 |
Fair Value | 65,213 | 64,944 |
Corporate debt securities | Long term | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Amortized Cost | 19,046 | 49,460 |
Gross Unrealized Gains | 29 | 93 |
Gross Unrealized Losses | -6 | -14 |
Fair Value | $19,069 | $49,539 |
MARKETABLE_SECURITIES_AND_FAIR3
MARKETABLE SECURITIES AND FAIR VALUE MEASUREMENTS - Summary of fair value of trading securities (Details 1) (USD $) | 9 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Dec. 31, 2012 |
Schedule of Trading Securities and Other Trading Assets [Line Items] | ' | ' |
Amortized Cost | $2,100 | $2,100 |
Gross Unrealized Gains | ' | ' |
Gross Unrealized Losses | -377 | -311 |
Fair Value | 1,723 | 1,789 |
Auction rate securities | ' | ' |
Schedule of Trading Securities and Other Trading Assets [Line Items] | ' | ' |
Amortized Cost | 2,100 | 2,100 |
Gross Unrealized Gains | ' | ' |
Gross Unrealized Losses | -377 | -311 |
Fair Value | $1,723 | $1,789 |
MARKETABLE_SECURITIES_AND_FAIR4
MARKETABLE SECURITIES AND FAIR VALUE MEASUREMENTS - Assets measured at fair value on a recurring basis (Details 2) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' | ' |
Cash equivalents | $17,049 | $14,327 | $20,943 | $11,095 |
Auction rate securities | Significant Unobservable Inputs (Level 3) | ' | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' | ' |
Auction rate securities-long term | 1,723 | ' | ' | ' |
Fair Value, Measurements, Recurring | Estimate of Fair Value, Fair Value Disclosure | ' | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' | ' |
Cash equivalents | 13,543 | 11,754 | ' | ' |
Total | 99,548 | 128,026 | ' | ' |
Fair Value, Measurements, Recurring | Quoted Prices in Active Markets (Level 1) | ' | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' | ' |
Cash equivalents | 13,543 | 11,754 | ' | ' |
Total | 13,543 | 11,754 | ' | ' |
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | ' | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' | ' |
Cash equivalents | ' | ' | ' | ' |
Total | 84,282 | 114,483 | ' | ' |
Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3) | ' | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' | ' |
Cash equivalents | ' | ' | ' | ' |
Total | 1,723 | 1,789 | ' | ' |
Fair Value, Measurements, Recurring | Corporate debt securities | Estimate of Fair Value, Fair Value Disclosure | ' | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' | ' |
Debt securities-short term | 65,213 | 64,944 | ' | ' |
Debt securities-long term | 19,069 | 49,539 | ' | ' |
Fair Value, Measurements, Recurring | Corporate debt securities | Quoted Prices in Active Markets (Level 1) | ' | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' | ' |
Debt securities-short term | ' | ' | ' | ' |
Debt securities-long term | ' | ' | ' | ' |
Fair Value, Measurements, Recurring | Corporate debt securities | Significant Other Observable Inputs (Level 2) | ' | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' | ' |
Debt securities-short term | 65,213 | 64,944 | ' | ' |
Debt securities-long term | 19,069 | 49,539 | ' | ' |
Fair Value, Measurements, Recurring | Corporate debt securities | Significant Unobservable Inputs (Level 3) | ' | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' | ' |
Debt securities-short term | ' | ' | ' | ' |
Debt securities-long term | ' | ' | ' | ' |
Fair Value, Measurements, Recurring | Auction rate securities | Estimate of Fair Value, Fair Value Disclosure | ' | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' | ' |
Auction rate securities-long term | 1,723 | 1,789 | ' | ' |
Fair Value, Measurements, Recurring | Auction rate securities | Quoted Prices in Active Markets (Level 1) | ' | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' | ' |
Auction rate securities-long term | ' | ' | ' | ' |
Fair Value, Measurements, Recurring | Auction rate securities | Significant Other Observable Inputs (Level 2) | ' | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' | ' |
Auction rate securities-long term | ' | ' | ' | ' |
Fair Value, Measurements, Recurring | Auction rate securities | Significant Unobservable Inputs (Level 3) | ' | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' | ' |
Auction rate securities-long term | $1,723 | $1,789 | ' | ' |
MARKETABLE_SECURITIES_AND_FAIR5
MARKETABLE SECURITIES AND FAIR VALUE MEASUREMENTS - Roll forward auction rate securities (Details 3) (Auction rate securities, Fair Value, Inputs, Level 3, USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Auction rate securities | Fair Value, Inputs, Level 3 | ' | ' |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' |
Balance | $1,789 | $1,676 |
Gain (loss) on auction rate securities | -66 | 98 |
Balance | $1,723 | $1,774 |
MARKETABLE_SECURITIES_AND_FAIR6
MARKETABLE SECURITIES AND FAIR VALUE MEASUREMENTS - Quantitative information on the unobservable inputs (Details 4) (Fair Value, Inputs, Level 3, Auction rate securities, USD $) | 9 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2013 |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' |
Auction rate securities-long term | $1,723 |
Fair Value Measurements, Valuation Techniques | 'Discounted cash flow |
Discounted cash flow | ' |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' |
Maximum rate | 1.80% |
Probability of earning maximum rate until maturity | 0.05% |
Discounted cash flow | Range Minimum | ' |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' |
Liquidity risk premium | 3.50% |
Probability of principal returned prior to maturity | 74.40% |
Probability of default | 23.00% |
Discounted cash flow | Range Maximum | ' |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' |
Liquidity risk premium | 4.50% |
Probability of principal returned prior to maturity | 76.90% |
Probability of default | 25.50% |
MARKETABLE_SECURITIES_AND_FAIR7
MARKETABLE SECURITIES AND FAIR VALUE MEASUREMENTS (Detail Textuals) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 |
Marketable Securities and Fair Value Measurements [Abstract] | ' | ' | ' | ' | ' |
Maximum short term interest reset period for auction rate securities | ' | ' | '90 days | ' | ' |
Minimum period for contractual maturities | ' | ' | '10 years | ' | ' |
Reset period frequency | ' | ' | 'seven to twenty-eight days | ' | ' |
Auction rate securities included in marketable securities long term | $1,723 | ' | $1,723 | ' | $1,789 |
Net increase (decrease) in value of auction rate securities | $4 | $15 | $66 | $98 | ' |
ACCOUNTS_PAYABLE_AND_ACCRUED_E2
ACCOUNTS PAYABLE AND ACCRUED EXPENSES - Summary (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Payables and Accruals [Abstract] | ' | ' |
Accounts payable | $478 | $560 |
Accrued payroll | 2,157 | 2,872 |
Accrued outsourced pre-clinical and clinical fees | 4,477 | 5,501 |
Accrued professional fees | 487 | 641 |
Accrued restructuring costs | 125 | ' |
Other accrued expenses | 366 | 589 |
Accounts payable and accrued expenses, Total | $8,090 | $10,163 |
NET_LOSS_PER_SHARE_Detail_Text
NET LOSS PER SHARE (Detail Textuals) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Earnings Per Share [Abstract] | ' | ' | ' | ' |
Potential common shares issued upon exercise of outstanding stock options | 7,988,732 | 7,474,258 | 7,988,732 | 7,474,258 |
STOCKBASED_COMPENSATION_AND_ST2
STOCK-BASED COMPENSATION AND STOCK PLANS - Summary (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Total stock-based compensation expense | $889 | $1,030 | $3,201 | $3,242 |
Research and development | ' | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Total stock-based compensation expense | 240 | 413 | 1,077 | 1,287 |
General and administrative | ' | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Total stock-based compensation expense | 511 | 617 | 1,986 | 1,955 |
Restructuring | ' | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Total stock-based compensation expense | $138 | ' | $138 | ' |
STOCKBASED_COMPENSATION_AND_ST3
STOCK-BASED COMPENSATION AND STOCK PLANS - Option activity (Details 1) (Stock Options, USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Stock Options | ' |
Number of Shares | ' |
Outstanding as of December 31, 2012 | 7,157,458 |
Granted | 1,220,910 |
Exercised | -3,000 |
Cancelled | -386,636 |
Outstanding as of September 30, 2013 | 7,988,732 |
Exercisable as of September 30, 2013 | 5,312,463 |
Weighted Average Exercise Price | ' |
Outstanding as of December 31, 2012 | $5.70 |
Granted | $2.53 |
Exercised | $2.35 |
Cancelled | $4.78 |
Outstanding as of September 30, 2013 | $5.26 |
Exercisable as of September 30, 2013 | $5.35 |
STOCKBASED_COMPENSATION_AND_ST4
STOCK-BASED COMPENSATION AND STOCK PLANS - Vested, expected to vest and exercisable shares (Details 2) (Stock Options, USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Stock Options | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Vested and unvested expected to vest, shares | 7,840,058 |
Vested and unvested expected to vest, weighted-average exercise price | $5.26 |
Vested and unvested expected to vest, weighted-average remaining contractual term (in years) | '5 years 9 months 4 days |
Vested and unvested expected to vest, aggregate intrinsic value | ' |
Exercisable, shares | 5,312,463 |
Exercisable, weighted-average exercise price | $5.35 |
Exercisable, weighted-average remaining contractual term (in years) | '4 years 5 months 8 days |
Exercisable, aggregate intrinsic value | ' |
STOCKBASED_COMPENSATION_AND_ST5
STOCK-BASED COMPENSATION AND STOCK PLANS - Restricted stock (Details 3) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Number of Shares | ' |
Vested | -572,219 |
Cancelled | -105,262 |
Restricted Stock | ' |
Number of Shares | ' |
Unvested as of December 31, 2012 | 79,795 |
Granted | 242,697 |
Vested | -80,993 |
Cancelled | -35,767 |
Unvested as of September 30, 2013 | 205,732 |
Weighted Average Grant Date Fair Value | ' |
Unvested as of December 31, 2012 | 3.54 |
Granted | 2.51 |
Vested | 3.49 |
Cancelled | 2.51 |
Unvested as of September 30, 2013 | 2.51 |
STOCKBASED_COMPENSATION_AND_ST6
STOCK-BASED COMPENSATION AND STOCK PLANS (Detail Textuals) (Stock Options, USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Stock Options | ' | ' |
Share-Based Compensation Arrangement By Share-Based Payment Award [Line Items] | ' | ' |
Aggregate intrinsic value of options outstanding | $0 | ' |
Weighted average fair value of options granted | $1.69 | $4.67 |
Intrinsic value of options exercised | 1,000 | 603,000 |
Options exercised | 3,000 | ' |
Compensation cost not yet recognized related to non-vested option awards | $6,800,000 | ' |
Compensation cost related to non-vested option awards recognition period | '2 years 4 months 24 days | ' |
Forfeited shares | 281,734 | ' |
Weighted average remaining contractual life for options exercisable | '4 years 4 months 24 days | ' |
STOCKBASED_COMPENSATION_AND_ST7
STOCK-BASED COMPENSATION AND STOCK PLANS (Detail Textuals 1) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Share-based compensation expense | $889 | $1,030 | $3,201 | $3,242 |
Restricted Stock | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Number of Shares granted to employee | ' | ' | 242,697 | ' |
Annual vesting period for stock granted to employee | ' | ' | '4 years | ' |
Weighted average grant date fair value for the options granted during the period | ' | ' | $2.51 | ' |
Share-based compensation expense | ' | ' | $166 | $204 |
STOCKBASED_COMPENSATION_AND_ST8
STOCK-BASED COMPENSATION AND STOCK PLANS (Detail Textuals 2) (USD $) | 9 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Number of shares forfeited | 105,262 | ' |
Number of shares vested | 572,219 | ' |
Restricted Stock | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Fair value of restricted stock vested | $206 | $749 |
Number of shares forfeited | 35,767 | ' |
Number of shares vested | 80,993 | ' |
STOCKBASED_COMPENSATION_AND_ST9
STOCK-BASED COMPENSATION AND STOCK PLANS (Detail Textuals 3) (Chief executive officer's (CEO's), Employment Agreement) | 1 Months Ended |
Jul. 31, 2010 | |
Chief executive officer's (CEO's) | Employment Agreement | ' |
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ' |
Number of stock options granted under employment agreement | 100,000 |
Vesting percentage of stock options granted under employment agreement at the time of grant | 25.00% |
Vesting percentage of stock options granted under employment agreement over three years | 25.00% |
Employment agreement to grant performance based stock units vested upon | 390,000 |
Recovered_Sheet1
STOCK-BASED COMPENSATION AND STOCK PLANS (Detail Textuals 4) (Employment Agreement) | 1 Months Ended | |
Mar. 31, 2013 | Feb. 29, 2012 | |
Chief medical officer's (CMO's) | ' | ' |
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ' | ' |
Employment agreement to grant performance based stock units vested upon | 120,000 | 50,000 |
Chief operating officer's (COO's) | ' | ' |
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ' | ' |
Employment agreement to grant performance based stock units vested upon | 125,000 | ' |
INCOME_TAXES_Detail_Textuals
INCOME TAXES (Detail Textuals) (USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2012 |
Operating Loss Carryforwards [Line Items] | ' |
Increase in ownership percentage of certain stockholders or public groups | 'more than 50 percentage points |
Ownership change, increase in ownership percentage, term | '3 years |
Federal NOL | ' |
Operating Loss Carryforwards [Line Items] | ' |
Net operating loss | 265,004 |
Federal net capital loss carryforwards | 571 |
Net operating loss generated from excess tax deduction from share based awards | 15,003 |
State NOL | ' |
Operating Loss Carryforwards [Line Items] | ' |
Net operating loss | 113,262 |
Net operating loss generated from excess tax deduction from share based awards | 907 |
Research and development credit carryforwards | ' |
Operating Loss Carryforwards [Line Items] | ' |
Research and development credit carryforwards | 24,885 |
NOTES_PAYABLE_Detail_Textuals
NOTES PAYABLE (Detail Textuals) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Oct. 31, 2008 | |
Notes Payable [Abstract] | ' | ' | ' | ' | ' |
Margin loan agreement with financial institution | ' | ' | ' | ' | $2,900,000 |
Maximum amount borrowed under margin loan agreement facility | ' | ' | ' | ' | 1,700,000 |
Amount outstanding under margin loan agreement facility | 1,700,000 | 1,700,000 | 1,700,000 | 1,700,000 | ' |
Amount collateralized under auction rate securities | 2,100,000 | 2,100,000 | 2,100,000 | 2,100,000 | ' |
Interest expense | $8,000 | $7,000 | $18,000 | $19,000 | ' |
RESTRUCTURING_Detail_Textuals
RESTRUCTURING (Detail Textuals) (USD $) | 1 Months Ended | 3 Months Ended |
In Thousands, unless otherwise specified | Jul. 31, 2013 | Sep. 30, 2013 |
Employee | ||
Position | ||
Restructuring and Related Activities [Abstract] | ' | ' |
Number of position reduced | 26 | ' |
Number of employees remaining post reduction in workforce | 68 | ' |
Severance cost related to reduction in workforce | $434 | ' |
Related benefits continuation costs | 94 | ' |
Cash payments made for restructuring costs | ' | 403 |
Non-cash charges related to modification of employee stock option | ' | $139 |