DOCUMENT AND ENTITY INFORMATION
DOCUMENT AND ENTITY INFORMATION - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 27, 2018 | Jun. 30, 2017 | |
DOCUMENT AND ENTITY INFORMATION | |||
Entity Registrant Name | RIGEL PHARMACEUTICALS INC | ||
Entity Central Index Key | 1,034,842 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 337,811,691 | ||
Entity Common Stock, Shares Outstanding | 147,107,882 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY |
BALANCE SHEETS
BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 38,290 | $ 17,632 |
Short-term investments | 77,461 | 57,134 |
Prepaid and other current assets | 1,682 | 1,448 |
Total current assets | 117,433 | 76,214 |
Property and equipment, net | 875 | 1,156 |
Other assets | 803 | 764 |
Total assets | 119,111 | 78,134 |
Current liabilities: | ||
Accounts payable | 2,636 | 5,563 |
Accrued compensation | 7,059 | 4,085 |
Accrued research and development | 5,028 | 5,881 |
Other accrued liabilities | 3,330 | 1,033 |
Deferred liability - sublease, current portion | 284 | 3,222 |
Deferred rent, current portion | 2,804 | |
Total current liabilities | 18,337 | 22,588 |
Long-term portion of deferred liability - sublease | 238 | |
Long-term portion of deferred rent | 90 | 279 |
Other long-term liabilities | 38 | 2 |
Commitments | ||
Stockholders' equity: | ||
Preferred stock, $0.001 par value; 10,000,000 shares authorized; none issued and outstanding as of December 31, 2017 and 2016 | ||
Common stock, $0.001 par value; 200,000,000 shares authorized; 146,814,906 and 99,269,418 shares issued and outstanding as of December 31, 2017 and 2016, respectively | 147 | 100 |
Additional paid-in capital | 1,239,435 | 1,115,807 |
Accumulated other comprehensive loss | (82) | (18) |
Accumulated deficit | (1,138,854) | (1,060,862) |
Total stockholders' equity | 100,646 | 55,027 |
Total liabilities and stockholders' equity | $ 119,111 | $ 78,134 |
BALANCE SHEETS (Parenthetical)
BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
BALANCE SHEETS | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 146,814,906 | 99,269,418 |
Common stock, shares outstanding | 146,814,906 | 99,269,418 |
STATEMENTS OF OPERATIONS
STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
STATEMENTS OF OPERATIONS | |||
Contract revenues from collaborations | $ 4,484 | $ 20,383 | $ 28,895 |
Costs and expenses: | |||
Research and development | 46,269 | 63,446 | 62,825 |
General and administrative | 37,831 | 20,908 | 17,813 |
Restructuring charges | 5,770 | ||
Total costs and expenses | 84,100 | 90,124 | 80,638 |
Loss from operations | (79,616) | (69,741) | (51,743) |
Interest income | 892 | 437 | 222 |
Gain on disposal of assets | 732 | 88 | 57 |
Net loss | $ (77,992) | $ (69,216) | $ (51,464) |
Net loss per share, basic and diluted (in dollars per share) | $ (0.62) | $ (0.73) | $ (0.58) |
Weighted average shares used in computing net loss per share, basic and diluted (in shares) | 126,324 | 94,387 | 88,434 |
STATEMENTS OF COMPREHENSIVE LOS
STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
STATEMENTS OF COMPREHENSIVE LOSS | |||
Net loss | $ (77,992) | $ (69,216) | $ (51,464) |
Other comprehensive income (loss): | |||
Net unrealized gain (loss) on short-term investments | (64) | 26 | (37) |
Comprehensive loss | $ (78,056) | $ (69,190) | $ (51,501) |
STATEMENTS OF STOCKHOLDERS' EQU
STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Total |
Balance at Dec. 31, 2014 | $ 88 | $ 1,068,347 | $ (7) | $ (940,182) | $ 128,246 |
Balance (in shares) at Dec. 31, 2014 | 88,041,445 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net loss | (51,464) | (51,464) | |||
Net change in unrealized loss on short-term investments | (37) | (37) | |||
Issuance of common stock upon exercise of options and participation in Purchase Plan | $ 1 | 1,760 | 1,761 | ||
Issuance of common stock upon exercise of options and participation in Purchase Plan (in shares) | 790,832 | ||||
Issuance of common stock, net of offering costs | $ 2 | 5,470 | 5,472 | ||
Issuance of common stock, net of offering costs (in shares) | 1,722,312 | ||||
Stock compensation expense | 7,403 | 7,403 | |||
Balance at Dec. 31, 2015 | $ 91 | 1,082,980 | (44) | (991,646) | 91,381 |
Balance (in shares) at Dec. 31, 2015 | 90,554,589 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net loss | (69,216) | (69,216) | |||
Net change in unrealized loss on short-term investments | 26 | 26 | |||
Issuance of common stock upon exercise of options and participation in Purchase Plan | $ 1 | 1,597 | 1,598 | ||
Issuance of common stock upon exercise of options and participation in Purchase Plan (in shares) | 819,266 | ||||
Issuance of common stock, net of offering costs | $ 8 | 23,398 | 23,406 | ||
Issuance of common stock, net of offering costs (in shares) | 7,895,563 | ||||
Stock compensation expense | 7,832 | 7,832 | |||
Balance at Dec. 31, 2016 | $ 100 | 1,115,807 | (18) | (1,060,862) | 55,027 |
Balance (in shares) at Dec. 31, 2016 | 99,269,418 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net loss | (77,992) | (77,992) | |||
Net change in unrealized loss on short-term investments | (64) | (64) | |||
Issuance of common stock upon exercise of options and participation in Purchase Plan | $ 1 | 3,507 | 3,508 | ||
Issuance of common stock upon exercise of options and participation in Purchase Plan (in shares) | 1,564,395 | ||||
Issuance of common stock, net of offering costs | $ 46 | 114,134 | 114,180 | ||
Issuance of common stock, net of offering costs (in shares) | 45,981,093 | ||||
Stock compensation expense | 5,987 | 5,987 | |||
Balance at Dec. 31, 2017 | $ 147 | $ 1,239,435 | $ (82) | $ (1,138,854) | $ 100,646 |
Balance (in shares) at Dec. 31, 2017 | 146,814,906 |
STATEMENTS OF CASH FLOWS
STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating activities | |||
Net loss | $ (77,992) | $ (69,216) | $ (51,464) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Stock-based compensation expense | 5,987 | 7,333 | 7,403 |
Gain on disposal of assets | (732) | (88) | (57) |
Loss on sublease | 495 | ||
Depreciation and amortization | 465 | 941 | 1,439 |
Non-cash restructuring charges | 818 | ||
Net amortization of premium on short-term investment | (350) | 115 | |
Changes in assets and liabilities: | |||
Accounts receivable | 203 | 5,547 | |
Prepaid and other current assets | (197) | 1,097 | (917) |
Other assets | 130 | 167 | 159 |
Accounts payable | (2,947) | 2,800 | 1,150 |
Accrued compensation | 2,974 | (2,166) | 3,419 |
Accrued research and development | (853) | 928 | 960 |
Other accrued liabilities | 2,236 | (100) | 599 |
Deferred revenue | (13,427) | 13,427 | |
Deferred rent and other long term liabilities | (6,773) | (5,294) | (5,078) |
Net cash used in operating activities | (77,557) | (75,889) | (23,413) |
Investing activities | |||
Purchases of short-term investments | (116,861) | (103,053) | (151,763) |
Maturities of short-term investments | 96,820 | 128,650 | 196,862 |
Proceeds from disposal of assets | 732 | 88 | 60 |
Capital expenditures | (164) | (804) | (546) |
Net cash provided by (used in ) investing activities | (19,473) | 24,881 | 44,613 |
Financing activities | |||
Net proceeds from issuances of common stock upon exercise of options and participation in employee stock purchase plan | 3,508 | 1,598 | 1,761 |
Proceeds from sale and issuance of common stock, net of offering costs | 114,180 | 23,586 | 5,292 |
Net cash provided by financing activities | 117,688 | 25,184 | 7,053 |
Net increase (decrease) in cash and cash equivalents | 20,658 | (25,824) | 28,253 |
Cash and cash equivalents at beginning of period | 17,632 | 43,456 | 15,203 |
Cash and cash equivalents at end of period | $ 38,290 | $ 17,632 | $ 43,456 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2017 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of operations and basis of presentation We were incorporated in the state of Delaware on June 14, 1996. We are engaged in the discovery and development of novel small molecule drugs that significantly improve the lives of patients with immune and hematological disorders, cancer and rare diseases. Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant estimates and assumptions made by management include those relating to our stock based compensation and the probability of achievement of corporate performance-based milestone for our performance-based stock option awards, impairment issues, the estimated useful life of assets, and estimated accruals, particularly research and development accruals. We believe that the estimates and judgments upon which we rely are reasonable based upon information available to us at the time that these estimates and judgments are made, however actual results could differ from these estimates. To the extent there are material differences between these estimates and actual results, our financial statements will be affected. Stock award plans We have four stock option plans, our 2011 Equity Incentive Plan (2011 Plan), 2000 Equity Incentive Plan (2000 Plan), 2000 Non‑Employee Directors Stock Option Plan (Directors’ Plan) and Inducement Plan. The 2011 Plan, 2000 Plan and Directors’ Plan provide for granting to our officers, directors and all other employees and consultants options to purchase shares of our common stock. The Inducement Plan is intended mainly to provide an inducement material for certain individuals to enter into employment with the Company. We also have our Employee Stock Purchase Plan (Purchase Plan), where eligible employees can purchase shares of our common stock at a price per share equal to the lesser of 85% of the fair market value on the first day of the offering period or 85% of the fair market value on the purchase date. The fair value of each option award is estimated on the date of grant using the Black‑Scholes option pricing model which considered our stock price, as well as assumptions regarding a number of complex and subjective variables. These variables include, but are not limited to, volatility, expected term, risk‑free interest rate and dividends. We estimate volatility over the expected term of the option using historical share price performance. For expected term, we take into consideration our historical data of options exercised, cancelled and expired. The risk‑free rate is based on the U.S. Treasury constant maturity rate. We have not paid and do not expect to pay dividends in the foreseeable future. We use the straight‑line attribution method over the requisite employee service period for the entire award in recognizing stock‑based compensation expense. In connection with the adoption of ASU No. 2016-09 on January 1, 2017, we have elected to account for forfeitures as they occur. We granted performance-based stock options to purchase shares of our common stock which will vest upon the achievement of certain corporate performance-based milestones. We determined the fair values of these performance-based stock options using the Black-Scholes option pricing model at the date of grant. For the portion of the performance-based stock options of which the performance condition is considered probable of achievement, we recognize stock-based compensation expense on the related estimated fair value of such options on a straight-line basis from the date of grant up to the date when we expect the performance condition will be achieved. For the performance conditions that are not considered probable of achievement at the grant date or upon quarterly re-evaluation, prior to the event actually occurring, we recognize the related stock-based compensation expense when the event occurs or when we can determine that the performance condition is probable of achievement. In those cases, we recognize the change in estimate at the time we determine the condition is probable of achievement (by recognizing stock-based compensation expense as cumulative catch-up adjustment as if we had estimated at the grant date that the performance condition would have been achieved) and recognize the remaining compensation cost up to the date when we expect the performance condition will be achieved, if any. Cash, cash equivalents and short-term investments We consider all highly liquid investments in debt securities with maturity from the date of purchase of 90 days or less to be cash equivalents. Cash equivalents consist of money market funds, U.S. treasury bills, corporate bonds and commercial paper and investments in government‑sponsored enterprises. Our short-term investments include U.S. treasury bills, obligations of government‑ sponsored enterprises and corporate bonds and commercial paper. By policy, we limit the concentration of credit risk by diversifying our investments among a variety of high credit‑quality issuers. We view our short-term investments portfolio as available for use in current operations. Accordingly, we have classified certain securities as short-term investments on our balance sheet even though the stated maturity date of these securities may be more than one year from the current balance sheet date. All cash equivalents and short‑term investments are classified as available‑for‑sale securities. Available‑for‑sale securities are carried at fair value at December 31, 2017 and 2016. Unrealized gains (losses) are reported in the statements of stockholders’ equity and comprehensive loss. Fair value is estimated based on available market information or valuation methodologies. The cost of securities sold is based on the specific identification method. See Note 5 for a summary of available-for-sale securities at December 31, 2017 and 2016. Fair value of financial instruments The carrying values of cash, prepaid and other current assets, accounts payable and accrued liabilities approximate fair value due to the short-term maturity of those instruments. Cash equivalents and short-term investments are carried at fair value at December 31, 2017 and 2016. Concentration of credit risk Financial instruments that potentially subject us to concentrations of credit risk are primarily cash and cash equivalents, short-term investments and accounts receivable. Cash equivalents and short-term investments primarily consist of money market funds, U.S. treasury bills, government-sponsored enterprise securities, and corporate bonds and commercial paper. Due to the short-term nature of these investments, we believe we do not have a material exposure to credit risk arising from our investments. All cash and cash equivalents and short-term investments are maintained with financial institutions that management believes are creditworthy. Property and equipment Property and equipment are stated at cost. Depreciation is calculated using the straight‑line method over the estimated useful lives of the assets, which range from three to seven years. Revenue recognition We present revenue from our collaboration arrangements under the FASB ASC 808, Collaboration Arrangements . The terms of these agreements generally contain multiple elements, or deliverables, which may include (i) granting of license rights to our program, (ii) participation in a joint research committee, (iii) performance of research activities, and (iv) clinical supply and materials. The payments we receive under these arrangements typically include one or more of the following: non-refundable, up-front fees; funding of research and/or development efforts; contingent fees due upon the achievement of specified triggering events; and/or royalties on future product sales. We recognize revenue for the performance of services or the delivery of products when each of the following four criteria is met: (i) persuasive evidence of an arrangement exists; (ii) products are delivered or as services are rendered; (iii) the sales price is fixed or determinable; and (iv) collectability is reasonably assured. Our revenue arrangements with multiple elements are evaluated under FASB ASC 605‑25, Multiple Element Arrangements , and are divided into separate units of accounting if certain criteria are met, including whether the deliverables have stand-alone value, based on the relevant facts and circumstances for each arrangement. The consideration we receive under collaboration arrangements is allocated among the separate units of accounting based on the selling price hierarchy, and the applicable revenue recognition criteria is applied to each of the separate units. We make significant judgments and estimates in the allocation of the consideration among the deliverables under the agreement, as well as the determination of the periods the units will be delivered to our collaborators. If there are deliverables in an arrangement that are not separable from other aspects of the contractual relationship, they are treated as a combined unit of accounting, with the allocated revenue for the combined unit recognized in a manner consistent with the revenue recognition applicable to the final deliverable in the combined unit. Payments received prior to satisfying the relevant revenue recognition criteria are recorded as deferred revenue in the accompanying balance sheets and recognized as revenue when the revenue recognition criteria are met. We typically receive non-refundable, up-front payments when licensing our intellectual property, which often occurs in conjunction with a research and development agreement. If we believe that the license to our intellectual property has stand-alone value, we generally recognize revenue attributed to the license upon delivery provided that there are no future performance requirements for use of the license. When we believe that the license to our intellectual property does not have stand-alone value, we would recognize revenue attributed to the license ratably from the effective date of the agreement or the delivery of the license up to the estimated completion date of the undelivered performance obligation. Revenues related to the research services with our corporate collaborators are recognized as research services are performed over the related research period. Under these agreements, we are required to perform research activities as specified in the agreement. The payments received are not refundable and are based on a contractual cost per full-time equivalent employee working on the project. Our research and development expenses under the collaborative research agreements approximate the revenue recognized under such agreements over the research period. Revenues associated with substantive, at-risk milestones pursuant to collaborative agreements are recognized upon achievement of the milestones. We consider a milestone to be substantive at the inception of the arrangement if it is commensurate with either our performance to achieve the milestone or the enhancement of the value of the delivered item as a result of a specific outcome resulting from our performance to achieve the milestone, it relates solely to past performance and it is reasonable relative to all of the deliverables and payment terms within the arrangement. Non-refundable contingent future amounts receivable in connection with future events specified in collaboration agreements that are not considered milestones such as payments contingent solely upon the passage of time or the result of our collaborator's performance will be recognized as revenue when the recognition criteria discussed above are met. Research and development expenses Research and development expenses include costs for scientific personnel, supplies, equipment, consultants, research sponsored by us, allocated facility costs, costs related to pre‑clinical and clinical trials, including raw materials, and stock‑based compensation expense. All such costs are charged to research and development expense as incurred and at the time raw materials are purchased. Research and development accruals We have various contracts with third parties related to our research and development activities. Costs that are incurred for services rendered, but not billed to us, as of the end of the period are estimated and accrued. We make estimates of the amounts incurred in each period based on the information available to us and our knowledge of the nature of the contractual activities generating such costs. Expenses related to other research and development contracts, such as research contracts, toxicology study contracts and manufacturing contracts are estimated to be incurred generally on a straight‑line basis over the duration of the contracts. Raw materials and study materials purchased for us by third parties are expensed at the time of purchase. Contingencies In the first quarter of 2017, we entered into a consulting agreement with a third party, pursuant to which we may be required to pay amounts ranging from $1.5 million to $4.0 million if certain future milestone events occur. As of December 31, 2017, we concluded that one of the future milestone events is probable of achievement and recognized $1.5 million in contingent fee which we recorded as part of General and administrative expenses in the Statements of Operations.. We do not consider the other Leases We currently lease our research and office space under a noncancelable lease agreement with our landlord through 2023. In December 2014, we entered into a sublease agreement with an unrelated third party to occupy a portion of our research and office space through 2023. We record rent expense on a straight‑line basis for our lease, net of sublease income, wherein such arrangements contain scheduled rent increases over the term of the lease and sublease, respectively. For our sublease arrangement which we classified as an operating lease, our loss on the sublease is comprised of the present value of our future payments to our landlord less the present value of our future rent payments expected from our subtenant over the term of the sublease. The present value factor, which also affects the level of accreted interest expense that we will recognize as additional charges over the term of the lease, was based on our estimate of our credit‑risk adjusted borrowing rate at the time the initial sublease liability was calculated. Our estimate of our credit‑risk adjusted borrowing rate was based on our comparison of the rates used by other companies of our size, our financial condition at the time we entered into such sublease agreement, as well as other factors that would affect our credit worthiness. Income taxes We use the asset and liability method to account for income taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities from a change in tax rates is recognized in income in the period the change is enacted. A valuation allowance is established to reduce deferred tax assets to an amount whose realization is more likely than not. Net loss per share Basic net loss per share is computed by dividing net loss by the weighted‑average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted‑average number of shares of common stock outstanding during the period and the number of additional shares of common stock that would have been outstanding if potentially dilutive securities had been issued. Potentially dilutive securities include warrant and stock options and shares issuable under our Purchase Plan. The dilutive effect of these potentially dilutive securities is reflected in diluted earnings per share by application of the treasury stock method. Under the treasury stock method, an increase in the fair market value of our common stock can result in a greater dilutive effect from potentially dilutive securities. The following table sets forth the computation of basic and diluted net loss per share (in thousands, except per share amounts): Year Ended December 31, 2017 2016 2015 EPS Numerator: Net loss $ $ $ EPS Denominator—Basic and Diluted: Weighted-average common shares outstanding 126,324 94,387 88,434 Net loss per common share: Basic and diluted $ (0.62) $ (0.73) $ (0.58) During the periods presented, we had securities which could potentially dilute basic loss per share, but were excluded from the computation of diluted net loss per share for all periods presented, as their effect would have been antidilutive. These securities consist of the following (in thousands except per share data): December 31, 2017 2016 2015 Outstanding stock options Warrant to purchase common stock — Weighted average exercise price of options $ $ $ Weighted average exercise price of warrant $ — $ $ Recent accounting pronouncements In May 2014, the FASB issued ASU No. 2014-09— Revenue from Contracts with Customers , which supersedes the revenue recognition requirements under ASC Topic 605, Revenue Recognition , and most industry-specific guidance under the ASC. The core principle of ASU No. 2014-09 is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU No. 2014-09 defines a five-step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than required under existing U.S. GAAP including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. ASU No. 2014-09 also requires additional disclosures to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. ASU No. 2014-09 allows for either full retrospective or modified retrospective adoption. In July 2015, the FASB deferred by one year the effective date of ASU No. 2014-09 with the new effective date beginning after December 15, 2017, and the interim periods within that year and allowed for early adoption for all entities as of the original effective date for public business entities, which was annual reporting periods beginning after December 15, 2016. We adopted this new standard on January 1, 2018 using the modified retrospective approach. To date, our revenues have been derived from license and collaboration agreements. The consideration we are eligible to receive under these agreements includes upfront payments, progress dependent contingent payments on events achieved by our collaboration partners, and royalties on net sales of products sold by such partners under the agreements. Each license and collaboration agreement is unique and will need to be assessed separately under the five-step process of the new standard. ASU No. 2014-09 differs from the current accounting standard in many respects, such as in the accounting for variable consideration, including milestone payments or contingent payments. Under our current accounting policy, we recognize contingent payments as revenue in the period that the payment-triggering event occurred or is achieved. However, under the new accounting standard, it is possible to start to recognize contingent payments before the payment-triggering event is completely achieved, subject to management’s assessment of whether it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. We assessed the impact of the new standard on our active license and collaboration agreements and have identified the revenue streams. The adoption of this standard will not have a material impact on our financial statements as we do not have any unrecognized transaction price, other than future potential contingent payments, that are not currently considered probable of occurring, or any remaining performance obligations under our collaboration agreements as of the initial adoption date. In connection with our adoption of ASU No. 2014-09, we do not expect to have an adjustment on the opening balance of Accumulated Deficit balance as of January 1, 2018. In February 2016, the FASB issued ASU No. 2016-02— Leases , which is aimed at making leasing activities more transparent, and requires substantially all leases be recognized by lessees on their balance sheet as a right-of-use asset and corresponding lease liability, including leases currently accounted for as operating leases. The guidance is effective for all interim and annual reporting periods beginning after December 15, 2018. Early adoption is permitted. We plan to adopt this new standard on January 1, 2019. We are currently evaluating the potential impact of the adoption of ASU No. 2016-02 on our financial statements and cannot estimate the impact of adoption at this time. In March 2016, the FASB issued ASU No. 2016-09— Improvements to Employee Share-Based Payment Accounting , which is intended to simplify several aspects of the accounting for share-based payment award transactions, including the income tax consequences, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, as well as certain classifications on the statement of cash flows. We adopted ASU No. 2016-09 on January 1, 2017. Under this guidance, on a prospective basis, companies will no longer record excess tax benefits and certain tax deficiencies in additional paid-in capital. Instead, companies will record all excess tax benefits and tax deficiencies as income tax expense or benefit in the income statement. In addition, the guidance eliminates the requirement that excess tax benefits be realized before companies can recognize them. The ASU requires a cumulative-effect adjustment for previously unrecognized excess tax benefits in opening retained earnings in the annual period of adoption. Upon adoption, we recognized additional excess tax benefit of $4.1 million (federal) and $1.4 million (state) as a deferred tax asset with a corresponding increase to our deferred tax asset valuation allowance, which did not result in a net impact to accumulated deficit. Additionally, as provided for under this new guidance, we elected to account for forfeitures as they occur. The adoption of this aspect of the guidance did not have a material impact on our financial statements. |
SPONSORED RESEARCH AND LICENSE
SPONSORED RESEARCH AND LICENSE AGREEMENTS | 12 Months Ended |
Dec. 31, 2017 | |
SPONSORED RESEARCH AND LICENSE AGREEMENTS | |
SPONSORED RESEARCH AND LICENSE AGREEMENTS | 2. SPONSORED RESEARCH AND LICENSE AGREEMENTS We conduct research and development programs independently and in connection with our corporate collaborators. Currently, we are a party to collaboration agreements, but do not have ongoing participation, with BMS for the discovery, development and commercialization of cancer immunotherapies based on our small molecule TGF beta receptor kinase inhibitors, Aclaris for the development and commercialization of JAK inhibitors for the treatment of alopecia areata and other dermatological conditions, AZ for the development and commercialization of R256, an inhaled JAK inhibitor, BerGenBio for the development and commercialization of AXL inhibitors in oncology, and Daiichi to pursue research related to MDM2 inhibitors, a novel class of drug targets called ligases. Under these agreements, which we entered into in the ordinary course of business, we received or may be entitled to receive upfront cash payments, payments contingent upon specified events achieved by such partners and royalties on any net sales of products sold by such partners under the agreements. Total future contingent payments to us under all of these current agreements could exceed $532.4 million if all potential product candidates achieved all of the payment triggering events under all of our current agreements (based on a single product candidate under each agreement). Of this amount, up to $145.5 million relates to the achievement of development events, up to $345.6 million relates to the achievement of regulatory events and up to $41.3 million relates to the achievement of certain commercial or launch events. This estimated future contingent amount does not include any estimated royalties that could be due to us if the partners successfully commercialize any of the licensed products. Future events that may trigger payments to us under the agreements are based solely on our partners’ future efforts and achievements of specified development, regulatory and/or commercial events. In October 2015, we entered into a non-exclusive license agreement with a third party, pursuant to which we received a payment in the single-digit millions in exchange for granting a non-exclusive license to certain limited intellectual property rights. We concluded that the granting of the license, which was fully delivered to such third party in the fourth quarter of 2015, represents the sole deliverable under this agreement. Accordingly, we recognized the payment as revenue during the year ended December 31, 2015. In August 2015, we entered into a license agreement with Aclaris, pursuant to which Aclaris will have exclusive rights and will assume responsibility for the continued development of certain JAK inhibitor compounds for the treatment of alopecia areata and other dermatological conditions. Under the license agreement, we received a noncreditable and non-refundable upfront payment of $8.0 million in September 2015. We are also entitled to receive development and regulatory contingent fees that could exceed $80.0 million for a successful compound approved in certain indications. In addition, we are also eligible to receive tiered royalties on the net sales of any products under the agreement. We concluded that the granting of the license, which has been fully delivered to Aclaris in the third quarter of 2015, represents the sole deliverable under this agreement. Accordingly, we recognized the $8.0 million payment as revenue during the year ended December 2015. In February 2015, we entered into a collaboration agreement with BMS for the discovery, development and commercialization of cancer immunotherapies based on our extensive portfolio of small molecule TGF beta receptor kinase inhibitors. Under the collaboration agreement, BMS will have exclusive rights and will be solely responsible for the clinical development and commercialization of any products. Pursuant to the collaboration agreement with BMS, we received a noncreditable and non-refundable upfront payment of $30.0 million in March 2015. We are also entitled to receive development and regulatory contingent fees that could exceed $309.0 million for a successful compound approved in certain indications. In addition, we are also eligible to receive tiered royalties on the net sales of any products from the collaboration. BMS shall also reimburse us for agreed upon costs based on a contractual cost per full-time equivalent employee in connection with the performance of research activities during the research term. Under the collaboration agreement, we were obligated to provide the following deliverables: (i) granting of license rights to our program, (ii) participation in the Joint Research Committee, and (iii) performance of research activities. We concluded that these deliverables were a single unit of accounting as the license did not have stand-alone value apart from the other deliverables. Accordingly, the $30.0 million upfront payment was recognized ratably as revenue from the effective date of the agreement and was fully amortized in September 2016, the end of the research term. We believed that straight-line recognition of this revenue was appropriate as the research was performed ratably over the research period. During the years ended December 31, 2016 and 2015, we recognized revenue of $13.4 million and $16.6 million, respectively, relating to the upfront payment, and $290,000 and $822,000, respectively, relating to the research activities we performed. At the end of the initial research term, we were not notified by BMS of its intention to extend the initial research term under which we would perform research activities. As of September 30, 2016, all deliverables under the agreement had been delivered. In November 2016, we were notified by BMS that it has designated one compound as an early drug candidate and received $3.0 million in December 2016, triggered by this development event. In June 2011, we entered into an exclusive license agreement with BerGenBio for the development and commercialization of an oncology program. BerGenBio is responsible for all activities it wishes to perform under the license we granted to it. In February 2017, we received $3.3 million from BerGenBio as a result of BerGenBio advancing BGB324, an AXL kinase inhibitor licensed under the agreement, to a Phase 2 clinical study. In June 2016, we received contingent payments of $1.7 million relating to a time-based non-refundable fee and $2.0 million relating to BerGenBio’s exercise of certain option rights before the prescription period to exercise the rights expired. All deliverables under the agreement had been previously delivered, as such, the above payments of $3.3 million in 2017 and $3.7 million in 2016, triggered by the above time-based and contingent events were recognized as revenue in the first quarter of 2017 and second quarter of 2016, respectively. |
SIGNIFICANT CONCENTRATIONS
SIGNIFICANT CONCENTRATIONS | 12 Months Ended |
Dec. 31, 2017 | |
SIGNIFICANT CONCENTRATIONS | |
SIGNIFICANT CONCENTRATIONS | 3. SIGNIFICANT CONCENTRATIONS For the year ended December 31, 2017, BerGenBio and another unrelated third party accounted for 74% and 26% of our revenues, respectively. For the year ended December 31, 2016, BMS and BerGenBio accounted for 82% and 18% of our revenues, respectively. For the year ended December 31, 2015, BMS, Aclaris and another third party accounted for 60%, 28% and 12% of our revenues, respectively. As of December 31, 2017 and 2016, we had no accounts receivable. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2017 | |
STOCK-BASED COMPENSATION | |
STOCK-BASED COMPENSATION | 4. STOCK‑BASED COMPENSATION Total stock‑based compensation expense related to all of our stock‑based awards was as follows (in thousands): Year Ended December 31, 2017 2016 2015 General and administrative $ 4,490 $ 4,230 $ 3,303 Research and development 1,497 3,103 4,100 Restructuring charges — 499 — Total stock-based compensation expense $ 5,987 $ 7,832 $ 7,403 In 2017 and 2016, we entered into severance agreements. As part of the severance arrangements we offered, we extended the date through which certain employee(s) had the right to exercise their vested options. In addition, we also accelerated the vesting period of certain unvested stock options. As a result of these modifications, we recorded an incremental stock-based compensation expense of approximately $1.4 million and $1.1 million during the years ended December 31, 2017and 2016, respectively. The incremental compensation expenses were computed based on the fair values of the modified awards on the respective modification dates. These amounts are included as part of “General and administrative expense” in the accompanying 2017 Statement of Operations and “General and administrative expense” and “Restructuring charges” in the accompanying 2016 Statement of Operations. Employee Stock Option Plans We have four stock option plans, our 2011 Equity Incentive Plan (2011 Plan), 2000 Equity Incentive Plan (2000 Plan), 2000 Non‑Employee Directors Stock Option Plan (Directors’ Plan) and Inducement Plan. The 2011 Plan, 2000 Plan and Directors’ Plan provide for granting to our officers, directors and all other employees and consultants options to purchase shares of our common stock. The Inducement Plan is intended mainly to provide an inducement material for certain individuals to enter into employment with the Company. Options granted under our 2011 Plan expire no later than ten years from the date of grant. Options may be granted with different vesting terms from time to time, ranging from zero to five years. As of December 31, 2017, a total of 16,174,599 shares of common stock were authorized for issuance under the 2011 Plan. Options under the 2000 Plan may be granted with different vesting terms from time to time, ranging from zero to five years. As of December 31, 2017, a total of 12,142,055 shares of common stock were authorized for issuance under the 2000 Plan. Options under the Directors’ Plan may be granted for a maximum term of 10 years. As of December 31, 2017, a total of 1,988,182 shares of common stock were authorized for issuance under the Directors’ Plan. Options granted under our Inducement Grant expire no later than ten years from the date of grant and may be granted with different vesting terms from time to time. As of December 31, 2017, a total of 1,800,000 shares of common stock were authorized for issuance under the Inducement Plan. The fair value of each option award is estimated on the date of grant using the Black‑Scholes option pricing model. We have segregated option awards into the following three homogenous groups for the purposes of determining fair values of options: officers and directors, all other employees, and consultants. We determined weighted‑average valuation assumptions separately for each of these groups as follows: · Volatility—We estimated volatility using the historical share price performance over the expected life of the option up to the point where we have historical market data. We also considered other factors, such as implied volatility, our current clinical trials and other company activities that may affect the volatility of our stock in the future. We determined that at this time historical volatility is more indicative of our expected future stock performance than implied volatility. · Expected term—For options granted to consultants, we use the contractual term of the option, which is generally ten years, for the initial valuation of the option and the remaining contractual term of the option for the succeeding periods. We worked with various historical data to determine the applicable expected term for each of the other option groups. This data included: (1) for exercised options, the term of the options from option grant date to exercise date; (2) for cancelled options, the term of the options from option grant date to cancellation date, excluding nonvested option forfeitures; and (3) for options that remained outstanding at the balance sheet date, the term of the options from option grant date to the end of the reporting period and the estimated remaining term of the options. The consideration and calculation of the above data gave us reasonable estimates of the expected term for each employee group. We also considered the vesting schedules of the options granted and factors surrounding exercise behavior of the option groups, our current market price and company activity that may affect our market price. In addition, we considered the optionee type (i.e., officers and directors or all other employees) and other factors that may affect the expected term of the option. · Risk‑free interest rate—The risk‑free interest rate is based on U.S. Treasury constant maturity rates with similar terms to the expected term of the options for each option group. · Dividend yield—The expected dividend yield is 0% as we have not paid and do not expect to pay dividends in the future. In connection with the adoption of ASU No. 2016-09 on January 1, 2017, we have elected to account for forfeitures as they occur and its adoption did not have a material impact on our financial statements. The following table summarizes the weighted‑average assumptions relating to options granted pursuant to our equity incentive plans for the years ended December 31, 2017, 2016 and 2015: Year Ended December 31, 2017 2016 2015 Risk-free interest rate % % % Expected term (in years) Dividend yield % % % Expected volatility % % % The exercise price of stock options is determined to be the market price of our common stock on the date immediately preceding the date of grant. These stock options become exercisable at varying dates and generally expire ten years from the date of grant. At December 31, 2017, options to purchase 11,696,696 shares of common stock were available for grant and 32,104,836 reserved shares of common stock were available for future issuance under our stock option plans. Stock‑Based Compensation Award Activity Option activity under our equity incentive plans was as follows: Weighted- Average Remaining Shares Available Number of Shares Weighted-Average Contractual Term Aggregate For Grant Underlying Options Exercise Price (in years) Intrinsic Value Outstanding at January 1, 2017 6,548,696 20,257,233 $ 6.24 Authorized for grant 6,460,000 — Granted (4,048,675) 4,048,675 $ 2.42 Exercised — (1,161,093) $ 2.30 Cancelled 2,736,675 (2,736,675) $ 8.18 Outstanding at December 31, 2017 11,696,696 20,408,140 $ 5.45 5.23 $ 13,736,285 Vested and expected to vest at December 31, 2017 20,408,140 $ 5.45 Exercisable at December 31, 2017 15,742,515 $ 6.25 4.16 $ 8,298,096 We granted options to purchase 4,048,675, 5,251,185 and 3,875,170 shares of common stock during the years ended December 31, 2017, 2016 and 2015, respectively. The weighted‑average grant date fair value of options granted during 2017, 2016 and 2015 was $1.48, $1.72 and $1.40, respectively. In 2016, we had 700,000 options related to performance-based stock option awards with a grant date fair value of $1.1 million which will vest upon the achievement of a corporate performance-based milestone. We considered the achievement of the corresponding corporate-based milestone as probable as of December 31, 2016. Accordingly, we recognized the $1.1 million as stock-based compensation expense during 2016. As of December 31, 2017, we have 1,460,000 shares related to outstanding performance-based stock option awards with a grant date fair value of $2.2 million and will vest upon achievement of certain corporate performance-based milestones. Of this amount, 1,160,000 shares related to performance-based stock option awards wherein the achievement of the corresponding corporate-based milestones was probable as of December 31, 2017. Accordingly, we recognized $1.1 million as stock-based compensation expense during 2017. As of December 31, 2017, there were approximately $993,000 unrecognized compensation cost related to these outstanding performance stock options. The aggregate intrinsic value of the stock options in the table above is calculated as the difference between the exercise price of the underlying awards and the quoted price of our common stock for the options that were in‑the‑money at December 31, 2017. At December 31, 2017 and 2016, we had 4,665,624 and 3,668,891, respectively, of nonvested stock options, with approximately $5.4 million and $31,000 intrinsic value at December 31, 2017 and 2016, respectively. During the years ended December 31, 2017 and 2016, aggregate intrinsic value of options exercised under our stock option plans was approximately $1.2 million and $253,000, respectively, determined as of the date of the stock option exercise. As of December 31, 2017, there was approximately $6.2 million of total unrecognized compensation cost related to nonvested stock‑based compensation arrangements granted under our stock option plans and approximately $91,000 of total unamortized compensation cost related to our Purchase Plan. The unamortized compensation cost related to our stock option plans and our Purchase Plan is expected to be recognized over a weighted‑ average period of approximately 2.3 years and 0.5 years, respectively. For the years ended December 31, 2017 and 2016, there were 2,844,690 and 4,215,058 shares vested, respectively, with weighted‑average exercise price of $2.86 and $2.70, respectively. Details of our stock options by exercise price are as follows as of December 31, 2017: Options Outstanding Options Exercisable Number of Weighted-Average Outstanding Remaining Weighted-Average Number of Weighted-Average Exercise Price Options Contractual Life (in years) Exercise Price Options Exercise Price $1.68 - $2.14 4,351,726 7.25 $ 2.12 2,389,173 $ 2.14 $2.27 - $2.74 3,682,677 7.83 2.60 2,439,679 2.68 $2.89 - $3.67 3,449,971 5.57 3.49 2,859,448 3.46 $3.79 - $6.51 3,831,410 4.63 5.62 2,961,860 6.13 $6.55 - $9.62 4,068,512 2.29 7.90 4,068,512 7.90 $9.80 - $26.45 1,023,844 0.13 26.02 1,023,844 26.02 $1.68 - $26.45 20,408,140 5.23 5.45 15,742,516 6.25 Employee Stock Purchase Plan Our Purchase Plan permits eligible employees to purchase common stock at a discount through payroll deductions during defined offering periods. The price at which the stock is purchased is equal to the lesser of 85% of the fair market value of the common stock on the first day of the offering or 85% of the fair market value of our common stock on the purchase date. The initial offering period commenced on the effective date of our initial public offering. We issued 403,302, 482,746 and 576,537 shares of common stock during 2017, 2016 and 2015, respectively, pursuant to the Purchase Plan at an average price of $1.87, $1.89 and $2.03, respectively. For 2017, 2016 and 2015, the weighted average fair value of awards granted under our Purchase Plan was $0.99, $0.98 and $1.05, respectively. As of December 31, 2017, we had 2,115,568 reserved shares of common stock available for future issuance under the Purchase Plan. The fair value of awards granted under our Purchase Plan is estimated on the date of grant using the Black‑Scholes option pricing model, which uses weighted‑ average assumptions. Our Purchase Plan provides for a 24- month offering period comprised of four six‑month purchase periods with a look‑back option. A look‑back option is a provision in our Purchase Plan under which eligible employees can purchase shares of our common stock at a price per share equal to the lesser of 85% of the fair market value on the first day of the offering period or 85% of the fair market value on the purchase date. Our Purchase Plan also includes a feature that provides for a new offering period to begin when the fair market value of our common stock on any purchase date during an offering period falls below the fair market value of our common stock on the first day of such offering period. This feature is called a “reset.” Participants are automatically enrolled in the new offering period. We had a “reset” on January 2, 2015 because the fair market value of our stock on December 31, 2014 was lower than the fair market value of our stock on July 1, 2014, the first day of another offering period. We applied modification accounting in accordance with ASC Topic No. 718, Stock Compensation , to determine the incremental fair value associated with this Purchase Plan “reset” and recognized the related stock‑based compensation expense according to FASB ASC Subtopic No. 718‑50, Employee Share Purchase Plans . The total incremental fair value associated with this Purchase Plan “reset” was approximately $792,000 which was recognized as expense during the period from January 2, 2015 to December 31, 2016. We had another “reset” on July 1, 2016 because the fair market value of our stock on June 30, 2016 was lower than the fair market value of our stock on January 5, 2015, the first day of the offering period. We applied modification accounting in accordance with the relevant accounting guidance. The total incremental fair value associated with this Purchase Plan “reset” was approximately $1.0 million and will be recognized as expense from the period from July 1, 2016 to June 30, 2018. The following table summarizes the weighted‑average assumptions related to our Purchase Plan for the years ended December 31, 2017, 2016 and 2015. Expected volatilities for our Purchase Plan are based on the two‑year historical volatility of our stock. Expected term represents the weighted‑ average of the purchase periods within the offering period. The risk‑free interest rate for periods within the expected term is based on U.S. Treasury constant maturity rates. Year Ended December 31, 2017 2016 2015 Risk-free interest rate 0.5 % 0.5 % 0.6 % Expected term (in years) 1.5 1.5 1.5 Dividend yield % % % Expected volatility 63.1 % 62.9 % 61.2 % |
CASH, CASH EQUIVALENTS AND SHOR
CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS | 12 Months Ended |
Dec. 31, 2017 | |
CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS | |
CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS | 5. CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS Cash, cash equivalents and short-term investments consist of the following (in thousands): December 31, 2017 2016 Cash $ 582 $ 240 Money market funds 2,795 9,496 U.S. treasury bills 6,726 4,300 Government-sponsored enterprise securities 7,826 16,459 Corporate bonds and commercial paper 97,822 44,271 $ 115,751 $ 74,766 Reported as: Cash and cash equivalents $ 38,290 $ 17,632 Short-term investments 77,461 57,134 $ 115,751 $ 74,766 Cash equivalents and short-term investments included the following securities with gross unrealized gains and losses (in thousands): Gross Gross Amortized Unrealized Unrealized December 31, 2017 Cost Gains Losses Fair Value U.S. treasury bills $ 6,733 $ — $ (7) $ 6,726 Government-sponsored enterprise securities 7,835 — (9) 7,826 Corporate bonds and commercial paper 97,888 1 (67) 97,822 Total $ 112,456 $ 1 $ (83) $ 112,374 Gross Gross Amortized Unrealized Unrealized December 31, 2016 Cost Gains Losses Fair Value U.S. treasury bills $ 4,300 $ — $ — $ 4,300 Government-sponsored enterprise securities 16,457 3 (1) 16,459 Corporate bonds and commercial paper 44,291 2 (22) 44,271 Total $ 65,048 $ 5 $ (23) $ 65,030 As of December 31, 2017, our cash equivalents and short-term investments, which have contractual maturities within one year, had a weighted‑average time to maturity of approximately 110 days. We view our short-term investments portfolio as available for use in current operations. We have the ability to hold all investments as of December 31, 2017 through their respective maturity dates. At December 31, 2017, we had no investments that had been in a continuous unrealized loss position for more than 12 months. As of December 31, 2017, a total of 38 individual securities had been in an unrealized loss position for 12 months or less and the losses were deemed to be temporary. The gross unrealized losses above were caused by interest rate increases. No significant facts or circumstances have arisen to indicate that there has been any deterioration in the creditworthiness of the issuers of the securities held by us. Based on our review of these securities, including the assessment of the duration and severity of the unrealized losses and our ability and intent to hold the investments until maturity, there were no other-than-temporary impairments for these securities at December 31, 2017. The following table shows the fair value and gross unrealized losses of our investments in individual securities that are in an unrealized loss position, aggregated by investment category (in thousands): December 31, 2017 Fair Value Unrealized Losses U. S. treasury bills $ 6,726 $ (7) Government-sponsored enterprise securities 7,826 (9) Corporate bonds and commercial paper 46,191 (67) Total $ 60,743 $ (83) |
FAIR VALUE
FAIR VALUE | 12 Months Ended |
Dec. 31, 2017 | |
FAIR VALUE | |
FAIR VALUE | 6. FAIR VALUE Under FASB ASC 820, Fair Value Measurements and Disclosures , fair value is defined as the price at which an asset could be exchanged or a liability transferred in a transaction between knowledgeable, willing parties in the principal or most advantageous market for the asset or liability. Where available, fair value is based on observable market prices or parameters or derived from such prices or parameters. Where observable prices or parameters are not available, valuation models are applied. Assets and liabilities recorded at fair value in our financial statements are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Hierarchical levels directly related to the amount of subjectivity associated with the inputs to fair valuation of these assets and liabilities, are as follows: Level 1—Inputs are unadjusted, quoted prices in active markets for identical assets at the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. The fair valued assets we hold that are generally included under this Level 1 are money market securities where fair value is based on publicly quoted prices. Level 2—Are inputs, other than quoted prices included in Level 1, that are either directly or indirectly observable for the asset or liability through correlation with market data at the reporting date and for the duration of the instrument’s anticipated life. The fair valued assets we hold that are generally assessed under Level 2 included government‑sponsored enterprise securities, U.S. treasury bills and corporate bonds and commercial paper. We utilize third party pricing services in developing fair value measurements where fair value is based on valuation methodologies such as models using observable market inputs, including benchmark yields, reported trades, broker/dealer quotes, bids, offers and other reference data. We use quotes from external pricing service providers and other on‑line quotation systems to verify the fair value of investments provided by our third-party pricing service providers. We review independent auditor’s reports from our third-party pricing service providers particularly regarding the controls over pricing and valuation of financial instruments and ensure that our internal controls address certain control deficiencies, if any, and complementary user entity controls are in place. Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities and which reflect management’s best estimate of what market participants would use in pricing the asset or liability at the reporting date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. We do not have fair valued assets classified under Level 3. Fair Value on a Recurring Basis Financial assets measured at fair value on a recurring basis are categorized in the tables below based upon the lowest level of significant input to the valuations (in thousands): Assets at Fair Value as of December 31, 2017 Level 1 Level 2 Level 3 Total Money market funds $ 2,795 $ — $ — $ 2,795 U.S. treasury bills — 6,726 — 6,726 Government-sponsored enterprise securities — 7,826 — 7,826 Corporate bonds and commercial paper — 97,822 — 97,822 Total $ 2,795 $ 112,374 $ — $ 115,169 Assets at Fair Value as of December 31, 2016 Level 1 Level 2 Level 3 Total Money market funds $ 9,496 $ — $ — $ 9,496 U.S. treasury bills — 4,300 — 4,300 Government-sponsored enterprise securities — 16,459 — 16,459 Corporate bonds and commercial paper — 44,271 — 44,271 Total $ 9,496 $ 65,030 $ — $ 74,526 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2017 | |
PROPERTY AND EQUIPMENT | |
PROPERTY AND EQUIPMENT | 7. PROPERTY AND EQUIPMENT Property and equipment consists of the following (in thousands): December 31, 2017 2016 Laboratory equipment $ $ Computer and software Furniture and equipment Total property and equipment $ $ Less accumulated depreciation and amortization Property and equipment, net $ $ During 2017 and 2016, we disposed of approximately $7.0 million and $618,000, respectively, of fully depreciated assets. Total depreciation and amortization expense was $465,000, $941,000 and $1.4 million for the years ended December 31, 2017, 2016 and 2015, respectively. During the year ended December 31, 2016, we recognized an impairment loss on certain property and equipment of $319,000 (see Note 11) and recorded this as part of Restructuring Charges in the Statements of Operations. |
LEASE AGREEMENTS
LEASE AGREEMENTS | 12 Months Ended |
Dec. 31, 2017 | |
LEASE AGREEMENTS | |
LEASE AGREEMENTS | 8. LEASE AGREEMENTS We currently lease our research and office space under a noncancelable lease agreement with our landlord, HCP BTC, LLC (formerly known as Slough BTC, LLC) which was set to expire in 2018. The lease term provides for renewal option for up to two additional periods of five years each. In July 2017, we exercised our option to extend the term of our lease for another five years through January 2023 and modified the amount of monthly base rent during such renewal period. We reevaluated our lease classification and continue to classify our lease as operating lease during the renewal period. In December 2014, we entered into a sublease agreement, which was amended in 2017, with an unrelated third party to occupy approximately 57,000 square feet of our research and office space. In February 2017, we entered into an amendment to the sublease agreement to increase the subleased research and office space for an additional 9,328 square feet under the same term of the sublease. Effective July 2017, the sublease agreement was amended primarily to extend the term of the sublease through January 2023 and modified the monthly base rent to equal the amount we will pay our landlord. Because the future sublease income under the extended sublease agreement is the same as the amount we will pay our landlord, we did not recognize any loss on sublease relative to this amendment. We expect to receive approximately $22.1 million in future sublease income (excluding our subtenant’s share of facilities operating expenses) through January 2023. We record rent expense on a straight-line basis for our lease, net of sublease income. For our sublease arrangement which we classified as an operating lease, our loss on the sublease was comprised of the present value of our future payments to our landlord less the present value of our future rent payments expected from our subtenant over the term of the sublease. Further, in conjunction with our facilities lease, we have previously issued to our landlord warrants to purchase our common stock. We have previously capitalized the fair value of these warrants at issuance as part of our other long-term assets and they are being amortized up to January 31, 2018. The liability arising from this sublease agreement was determined using a credit-adjusted risk-free rate to discount the estimated future net cash flows. The changes in the liability related to the sublease agreement during the years ended December 31, 2017, 2016 and 2015 were as follows (in thousands): Balance at January 1, 2015 $ 9,269 Accretion of deferred liability 559 Amortization of deferred liability (3,363) Balance at December 31, 2015 6,465 Accretion of deferred liability 357 Amortization of deferred liability (3,362) Balance at December 31, 2016 3,460 Increase in deferred liability 495 Accretion of deferred liability 157 Amortization of deferred liability (3,828) Balance at December 31, 2017 $ 284 At December 31, 2017, future minimum lease payments and obligations under our noncancelable operating lease, net of expected sublease receipts, were as follows (in thousands): Operating Sublease For years ending December 31, Lease Receipts Net 2018 $ 9,593 $ (3,942) $ 5,651 2019 9,321 (4,192) 5,129 2020 9,694 (4,360) 5,334 2021 10,082 (4,534) 5,548 2022 and thereafter 11,362 (5,110) 6,252 Total minimum payments required $ 50,052 $ (22,138) $ 27,914 Rent expense under our operating lease amounted to approximately $6.9 million, $8.3 million and $8.9 million for the years ended December 31, 2017, 2016 and 2015, respectively. The rent expense during the years ended December 31, 2017, 2016 and 2015 were net of sublease income, subtenant’s share of certain facilities operating expense and amortization of deferred liability in the aggregate total of $8.0 million, $6.5 million and $6.3 million, respectively. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2017 | |
Equity Offerings | |
STOCKHOLDERS' EQUITY | 9. STOCKHOLDERS’ EQUITY Preferred Stock We are authorized to issue 10,000,000 shares of preferred stock. As of December 31, 2017 and 2016, there were no issued and outstanding shares of preferred stock. Our board of directors is authorized to fix or alter the designation, powers, preferences and rights of the shares of each series of preferred shares, and the qualifications, limitations or restrictions of any wholly unissued shares, to establish from time to time the number of shares constituting any such series, and to increase or decrease the number of shares, if any. Controlled Equity Offering In August 2015, we entered into a Controlled Equity Offering SM Sales Agreement (Original Sales Agreement) with Cantor Fitzgerald & Co. (Cantor), as sales agent, pursuant to which we may sell, through Cantor, up to an aggregate of $30.0 million in shares of our common stock. As of December 31, 2016, 9,617,875 shares of our common stock had been issued under the Original Sales Agreement with aggregate gross proceeds of $30.0 million. As of December 31, 2016, there are no amounts remaining for future sales under the Original Sales Agreement. In May 2017, we entered into an Amendment No. 1 (Amended Sales Agreement) to the Controlled Equity Offering SM Sales Agreement pursuant to which we may offer and sell, through Cantor, additional shares of our common stock, up to an aggregate offering price of $40.0 million. These shares are in addition to the shares of common stock sold under the Original Sales Agreement. During the year ended December 31, 2017, 2,166,093 shares of common stock were sold under the Amended Sales Agreement, with an aggregate net proceeds of $5.7 million. In October 2017, we terminated the Amended Sales Agreement with Cantor. All sales of our common stock were made pursuant to a shelf registration statement filed by us in May 2015 and declared effective by the Securities and Exchange Commission (SEC) in July 2015. Cantor acted as our sole sales agent for all sales made under the Amended Sales Agreement for a low single-digit commission on gross proceeds. The common stock was sold at prevailing market prices at the time of the sale. Underwritten Public Offerings In February 2017, we completed an underwritten public offering in which we sold 23,000,000 shares of our common stock pursuant to an effective registration statement at a price to the public of $2.00 per share. We received proceeds of approximately $43.0 million, net of underwriting discounts and commissions and offering expenses payable by us. In October 2017, we completed another underwritten public offering in which we sold 20,815,000 shares of our common stock pursuant to an effective registration statement at a price to the public of $3.35 per share. We received proceeds of approximately $65.3 million, net of underwriting discounts and commissions and offering expenses payable by us. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2017 | |
INCOME TAXES | |
INCOME TAXES | 10. INCOME TAXES For the years ended December 31, 2017, 2016 and 2015, our loss before income taxes was from domestic operations. For the years ended December 31, 2017, 2016 and 2015, we did not record a provision for income taxes due to our net loss. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax assets are as follows (in thousands): December 31, 2017 2016 Deferred tax assets Net operating loss carryforwards $ 212,153 $ 297,445 Orphan drug and research and development credits 51,744 44,348 Deferred compensation 12,261 21,618 Capitalized research and development expenses 4,690 1,877 Other, net 815 3,069 Total deferred tax assets 281,663 368,357 Valuation allowance Net deferred tax assets $ — $ — The reconciliation of the statutory federal income tax rate to the effective tax rate was as follows: Year Ended December 31, 2017 2016 2015 Federal statutory tax rate (34.0) % (34.0) % (34.0) % Federal statutory rate reduction 160.2 % — — Valuation allowance (126.5) % 35.0 % 31.3 % Stock compensation 5.7 % 5.0 % 8.3 % Orphan drug and research and development credits (3.6) % (7.3) % (5.6) % Other, net (1.8) % 1.3 % — % Effective tax rate % % % On December 22, 2017, the Tax Act was signed into law making significant changes to the Internal Revenue Code. Changes include, but are not limited to, a corporate tax rate decrease from 34% to 21% effective for tax years beginning after December 31, 2017, the transition of U.S international taxation from a worldwide tax system to a territorial system, and a one-time transition tax on the mandatory deemed repatriation of cumulative foreign earnings as of December 31, 2017. In December 2017, the Staff Accounting Bulletin No. 118 (SAB 118) was issued to address the application of US GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Act. In accordance with SAB 118, we have determined that $117.3 million of the deferred tax expense offset by a full valuation allowance) recorded in connection with the remeasurement of certain deferred tax assets and liabilities was a provisional amount and a reasonable estimate at December 31, 2017. This amount is subject to revisions as we complete our analysis of the Tax Act and interpret any additional guidance issued by the U.S. Treasury Department, IRS, FASB, and other standard-setting and regulatory bodies. Our accounting for the tax effects of the Tax Act will be completed during the measurement period. We do not expect any impact on recorded deferred tax balances as the remeasurement of net deferred tax assets will be fully offset by a change in valuation allowance. In general, under Section 382 of the Internal Revenue Code (Section 382), a corporation that undergoes an ownership change is subject to limitations on its ability to utilize its pre‑change net operating loss carryovers and tax credits to offset future taxable income. Our existing net operating loss carryforwards and tax credits are subject to limitations arising from ownership changes which occurred in previous periods. We finalized our analysis of potential ownership changes and concluded our Section 382 owner shift analysis during the year ended December 31, 2012. We have updated our net operating loss carryforwards to reflect the results of the Section 382 owner shift analysis as of December 31, 2017. We did not experience any significant changes in ownership in 2017 and 2016. Future changes in our stock ownership, some of which are outside of our control, could result in an ownership change under Section 382 and result in additional limitations. As of December 31, 2017, we had net operating loss carryforwards for federal income tax purposes of approximately $902.1 million, which expire beginning in the year 2019 and state net operating loss carryforwards of approximately $321.4 million, which expire beginning in the year 2028. We have general business credits of approximately $37.1 million, which will expire beginning in 2023, if not utilized, and is comprised of research and development credits and orphan drug credits. We also have state research and development tax credits of approximately$26.9 million, which have no expiration date. Realization of deferred tax assets is dependent upon future earnings, if any, the timing and amount of which are uncertain. Accordingly, the net deferred tax assets have been fully offset by a valuation allowance. The valuation allowance decreased by approximately $86.7 million and increased by approximately $25.9 million for the years ended December 31, 2017 and 2016, respectively. The following table summarizes the activity related to our gross unrecognized tax benefits (in thousands): Year Ended December 31, 2017 2016 Balance at the beginning of the year $ 6,903 $ 17,278 Increase related to prior year tax positions — (11,332) Increase related to current year tax positions 527 957 Balance at the end of the year $ 7,430 $ 6,903 Included in the balance of unrecognized tax benefits at December 31, 2017 and 2016, respectively, are $5.8 million and $5.4 million of tax benefits that, if recognized, would result in adjustments to other tax accounts, primarily deferred taxes. No income tax benefit would be realized due to our valuation allowance position. We do not anticipate a significant change to the unrecognized tax benefits over the next twelve months. We are subject to taxation in the United States and in California. Because of net operating loss and research credit carryovers, substantially all of our tax years remain open to examination. Our policy is that we recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. We currently have no tax positions that would be subject to interest or penalties. |
RESTRUCTURING CHARGES
RESTRUCTURING CHARGES | 12 Months Ended |
Dec. 31, 2017 | |
RESTRUCTURING CHARGES. | |
RESTRUCTURING CHARGES | 11. RESTRUCTURING CHARGES In September 2016, we announced that we had reduced our workforce by 46 positions, mostly in the research area. We also announced that effective September 15, 2016, Donald G. Payan, M.D, has retired from the board of directors and from his position as Executive Vice President and President of Discovery and Research. We recorded restructuring charges during the three months ended September 30, 2016 of approximately $5.8 million within Restructuring Charges in the accompanying Statement of Operations, which included $5.0 million of severance costs paid in cash, $319,000 impairment of certain property and equipment, and $499,000 of non-cash stock-based compensation expense as a result of the modification of our former executive’s stock options (see Note 4). At December 31, 2017, we have no accrued restructuring liability. |
SELECTED QUARTERLY FINANCIAL DA
SELECTED QUARTERLY FINANCIAL DATA | 12 Months Ended |
Dec. 31, 2017 | |
SELECTED QUARTERLY FINANCIAL DATA | |
SELECTED QUARTERLY FINANCIAL DATA | 12. SELECTED QUARTERLY FINANCIAL DATA Year Ended December 31, 2017 Year Ended December 31, 2016 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 (unaudited, in thousands, except per share amounts) Revenue $ 3,584 $ — $ 900 $ — $ 5,029 $ 8,594 $ 3,760 $ 3,000 Net loss $ (15,314) $ (19,147) $ (17,660) $ (25,871) $ (17,464) $ (13,533) $ (22,629) $ (15,590) Net loss per share, basic and diluted $ (0.13) $ (0.16) $ (0.14) $ (0.18) $ (0.19) $ (0.15) $ (0.24) $ (0.16) Weighted average shares used in computing net loss per share, basic and diluted 113,598 122,500 124,628 144,252 90,555 92,495 95,454 98,981 |
SUMMARY OF SIGNIFICANT ACCOUN20
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Nature of operations and basis of presentation | Nature of operations and basis of presentation We were incorporated in the state of Delaware on June 14, 1996. We are engaged in the discovery and development of novel small molecule drugs that significantly improve the lives of patients with immune and hematological disorders, cancer and rare diseases. |
Use of estimates | Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant estimates and assumptions made by management include those relating to our stock based compensation and the probability of achievement of corporate performance-based milestone for our performance-based stock option awards, impairment issues, the estimated useful life of assets, and estimated accruals, particularly research and development accruals. We believe that the estimates and judgments upon which we rely are reasonable based upon information available to us at the time that these estimates and judgments are made, however actual results could differ from these estimates. To the extent there are material differences between these estimates and actual results, our financial statements will be affected. |
Stock award plans | Stock award plans We have four stock option plans, our 2011 Equity Incentive Plan (2011 Plan), 2000 Equity Incentive Plan (2000 Plan), 2000 Non‑Employee Directors Stock Option Plan (Directors’ Plan) and Inducement Plan. The 2011 Plan, 2000 Plan and Directors’ Plan provide for granting to our officers, directors and all other employees and consultants options to purchase shares of our common stock. The Inducement Plan is intended mainly to provide an inducement material for certain individuals to enter into employment with the Company. We also have our Employee Stock Purchase Plan (Purchase Plan), where eligible employees can purchase shares of our common stock at a price per share equal to the lesser of 85% of the fair market value on the first day of the offering period or 85% of the fair market value on the purchase date. The fair value of each option award is estimated on the date of grant using the Black‑Scholes option pricing model which considered our stock price, as well as assumptions regarding a number of complex and subjective variables. These variables include, but are not limited to, volatility, expected term, risk‑free interest rate and dividends. We estimate volatility over the expected term of the option using historical share price performance. For expected term, we take into consideration our historical data of options exercised, cancelled and expired. The risk‑free rate is based on the U.S. Treasury constant maturity rate. We have not paid and do not expect to pay dividends in the foreseeable future. We use the straight‑line attribution method over the requisite employee service period for the entire award in recognizing stock‑based compensation expense. In connection with the adoption of ASU No. 2016-09 on January 1, 2017, we have elected to account for forfeitures as they occur. We granted performance-based stock options to purchase shares of our common stock which will vest upon the achievement of certain corporate performance-based milestones. We determined the fair values of these performance-based stock options using the Black-Scholes option pricing model at the date of grant. For the portion of the performance-based stock options of which the performance condition is considered probable of achievement, we recognize stock-based compensation expense on the related estimated fair value of such options on a straight-line basis from the date of grant up to the date when we expect the performance condition will be achieved. For the performance conditions that are not considered probable of achievement at the grant date or upon quarterly re-evaluation, prior to the event actually occurring, we recognize the related stock-based compensation expense when the event occurs or when we can determine that the performance condition is probable of achievement. In those cases, we recognize the change in estimate at the time we determine the condition is probable of achievement (by recognizing stock-based compensation expense as cumulative catch-up adjustment as if we had estimated at the grant date that the performance condition would have been achieved) and recognize the remaining compensation cost up to the date when we expect the performance condition will be achieved, if any. |
Cash, cash equivalents and short-term investments | Cash, cash equivalents and short-term investments We consider all highly liquid investments in debt securities with maturity from the date of purchase of 90 days or less to be cash equivalents. Cash equivalents consist of money market funds, U.S. treasury bills, corporate bonds and commercial paper and investments in government‑sponsored enterprises. Our short-term investments include U.S. treasury bills, obligations of government‑ sponsored enterprises and corporate bonds and commercial paper. By policy, we limit the concentration of credit risk by diversifying our investments among a variety of high credit‑quality issuers. We view our short-term investments portfolio as available for use in current operations. Accordingly, we have classified certain securities as short-term investments on our balance sheet even though the stated maturity date of these securities may be more than one year from the current balance sheet date. All cash equivalents and short‑term investments are classified as available‑for‑sale securities. Available‑for‑sale securities are carried at fair value at December 31, 2017 and 2016. Unrealized gains (losses) are reported in the statements of stockholders’ equity and comprehensive loss. Fair value is estimated based on available market information or valuation methodologies. The cost of securities sold is based on the specific identification method. See Note 5 for a summary of available-for-sale securities at December 31, 2017 and 2016. |
Fair value of financial instruments | Fair value of financial instruments The carrying values of cash, prepaid and other current assets, accounts payable and accrued liabilities approximate fair value due to the short-term maturity of those instruments. Cash equivalents and short-term investments are carried at fair value at December 31, 2017 and 2016. |
Concentration of credit risk | Concentration of credit risk Financial instruments that potentially subject us to concentrations of credit risk are primarily cash and cash equivalents, short-term investments and accounts receivable. Cash equivalents and short-term investments primarily consist of money market funds, U.S. treasury bills, government-sponsored enterprise securities, and corporate bonds and commercial paper. Due to the short-term nature of these investments, we believe we do not have a material exposure to credit risk arising from our investments. All cash and cash equivalents and short-term investments are maintained with financial institutions that management believes are creditworthy. |
Property and equipment | Property and equipment Property and equipment are stated at cost. Depreciation is calculated using the straight‑line method over the estimated useful lives of the assets, which range from three to seven years. |
Revenue recognition | Revenue recognition We present revenue from our collaboration arrangements under the FASB ASC 808, Collaboration Arrangements . The terms of these agreements generally contain multiple elements, or deliverables, which may include (i) granting of license rights to our program, (ii) participation in a joint research committee, (iii) performance of research activities, and (iv) clinical supply and materials. The payments we receive under these arrangements typically include one or more of the following: non-refundable, up-front fees; funding of research and/or development efforts; contingent fees due upon the achievement of specified triggering events; and/or royalties on future product sales. We recognize revenue for the performance of services or the delivery of products when each of the following four criteria is met: (i) persuasive evidence of an arrangement exists; (ii) products are delivered or as services are rendered; (iii) the sales price is fixed or determinable; and (iv) collectability is reasonably assured. Our revenue arrangements with multiple elements are evaluated under FASB ASC 605‑25, Multiple Element Arrangements , and are divided into separate units of accounting if certain criteria are met, including whether the deliverables have stand-alone value, based on the relevant facts and circumstances for each arrangement. The consideration we receive under collaboration arrangements is allocated among the separate units of accounting based on the selling price hierarchy, and the applicable revenue recognition criteria is applied to each of the separate units. We make significant judgments and estimates in the allocation of the consideration among the deliverables under the agreement, as well as the determination of the periods the units will be delivered to our collaborators. If there are deliverables in an arrangement that are not separable from other aspects of the contractual relationship, they are treated as a combined unit of accounting, with the allocated revenue for the combined unit recognized in a manner consistent with the revenue recognition applicable to the final deliverable in the combined unit. Payments received prior to satisfying the relevant revenue recognition criteria are recorded as deferred revenue in the accompanying balance sheets and recognized as revenue when the revenue recognition criteria are met. We typically receive non-refundable, up-front payments when licensing our intellectual property, which often occurs in conjunction with a research and development agreement. If we believe that the license to our intellectual property has stand-alone value, we generally recognize revenue attributed to the license upon delivery provided that there are no future performance requirements for use of the license. When we believe that the license to our intellectual property does not have stand-alone value, we would recognize revenue attributed to the license ratably from the effective date of the agreement or the delivery of the license up to the estimated completion date of the undelivered performance obligation. Revenues related to the research services with our corporate collaborators are recognized as research services are performed over the related research period. Under these agreements, we are required to perform research activities as specified in the agreement. The payments received are not refundable and are based on a contractual cost per full-time equivalent employee working on the project. Our research and development expenses under the collaborative research agreements approximate the revenue recognized under such agreements over the research period. Revenues associated with substantive, at-risk milestones pursuant to collaborative agreements are recognized upon achievement of the milestones. We consider a milestone to be substantive at the inception of the arrangement if it is commensurate with either our performance to achieve the milestone or the enhancement of the value of the delivered item as a result of a specific outcome resulting from our performance to achieve the milestone, it relates solely to past performance and it is reasonable relative to all of the deliverables and payment terms within the arrangement. Non-refundable contingent future amounts receivable in connection with future events specified in collaboration agreements that are not considered milestones such as payments contingent solely upon the passage of time or the result of our collaborator's performance will be recognized as revenue when the recognition criteria discussed above are met. |
Research and development expenses | Research and development expenses Research and development expenses include costs for scientific personnel, supplies, equipment, consultants, research sponsored by us, allocated facility costs, costs related to pre‑clinical and clinical trials, including raw materials, and stock‑based compensation expense. All such costs are charged to research and development expense as incurred and at the time raw materials are purchased. |
Research and development accruals | Research and development accruals We have various contracts with third parties related to our research and development activities. Costs that are incurred for services rendered, but not billed to us, as of the end of the period are estimated and accrued. We make estimates of the amounts incurred in each period based on the information available to us and our knowledge of the nature of the contractual activities generating such costs. Expenses related to other research and development contracts, such as research contracts, toxicology study contracts and manufacturing contracts are estimated to be incurred generally on a straight‑line basis over the duration of the contracts. Raw materials and study materials purchased for us by third parties are expensed at the time of purchase. |
Contingencies | Contingencies In the first quarter of 2017, we entered into a consulting agreement with a third party, pursuant to which we may be required to pay amounts ranging from $1.5 million to $4.0 million if certain future milestone events occur. As of December 31, 2017, we concluded that one of the future milestone events is probable of achievement and recognized $1.5 million in contingent fee which we recorded as part of General and administrative expenses in the Statements of Operations.. We do not consider the other |
Leases | Leases We currently lease our research and office space under a noncancelable lease agreement with our landlord through 2023. In December 2014, we entered into a sublease agreement with an unrelated third party to occupy a portion of our research and office space through 2023. We record rent expense on a straight‑line basis for our lease, net of sublease income, wherein such arrangements contain scheduled rent increases over the term of the lease and sublease, respectively. For our sublease arrangement which we classified as an operating lease, our loss on the sublease is comprised of the present value of our future payments to our landlord less the present value of our future rent payments expected from our subtenant over the term of the sublease. The present value factor, which also affects the level of accreted interest expense that we will recognize as additional charges over the term of the lease, was based on our estimate of our credit‑risk adjusted borrowing rate at the time the initial sublease liability was calculated. Our estimate of our credit‑risk adjusted borrowing rate was based on our comparison of the rates used by other companies of our size, our financial condition at the time we entered into such sublease agreement, as well as other factors that would affect our credit worthiness. |
Income taxes | Income taxes We use the asset and liability method to account for income taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities from a change in tax rates is recognized in income in the period the change is enacted. A valuation allowance is established to reduce deferred tax assets to an amount whose realization is more likely than not. |
Net loss per share | Net loss per share Basic net loss per share is computed by dividing net loss by the weighted‑average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted‑average number of shares of common stock outstanding during the period and the number of additional shares of common stock that would have been outstanding if potentially dilutive securities had been issued. Potentially dilutive securities include warrant and stock options and shares issuable under our Purchase Plan. The dilutive effect of these potentially dilutive securities is reflected in diluted earnings per share by application of the treasury stock method. Under the treasury stock method, an increase in the fair market value of our common stock can result in a greater dilutive effect from potentially dilutive securities. The following table sets forth the computation of basic and diluted net loss per share (in thousands, except per share amounts): Year Ended December 31, 2017 2016 2015 EPS Numerator: Net loss $ $ $ EPS Denominator—Basic and Diluted: Weighted-average common shares outstanding 126,324 94,387 88,434 Net loss per common share: Basic and diluted $ (0.62) $ (0.73) $ (0.58) During the periods presented, we had securities which could potentially dilute basic loss per share, but were excluded from the computation of diluted net loss per share for all periods presented, as their effect would have been antidilutive. These securities consist of the following (in thousands except per share data): December 31, 2017 2016 2015 Outstanding stock options Warrant to purchase common stock — Weighted average exercise price of options $ $ $ Weighted average exercise price of warrant $ — $ $ |
Recent accounting pronouncements | Recent accounting pronouncements In May 2014, the FASB issued ASU No. 2014-09— Revenue from Contracts with Customers , which supersedes the revenue recognition requirements under ASC Topic 605, Revenue Recognition , and most industry-specific guidance under the ASC. The core principle of ASU No. 2014-09 is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU No. 2014-09 defines a five-step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than required under existing U.S. GAAP including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. ASU No. 2014-09 also requires additional disclosures to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. ASU No. 2014-09 allows for either full retrospective or modified retrospective adoption. In July 2015, the FASB deferred by one year the effective date of ASU No. 2014-09 with the new effective date beginning after December 15, 2017, and the interim periods within that year and allowed for early adoption for all entities as of the original effective date for public business entities, which was annual reporting periods beginning after December 15, 2016. We adopted this new standard on January 1, 2018 using the modified retrospective approach. To date, our revenues have been derived from license and collaboration agreements. The consideration we are eligible to receive under these agreements includes upfront payments, progress dependent contingent payments on events achieved by our collaboration partners, and royalties on net sales of products sold by such partners under the agreements. Each license and collaboration agreement is unique and will need to be assessed separately under the five-step process of the new standard. ASU No. 2014-09 differs from the current accounting standard in many respects, such as in the accounting for variable consideration, including milestone payments or contingent payments. Under our current accounting policy, we recognize contingent payments as revenue in the period that the payment-triggering event occurred or is achieved. However, under the new accounting standard, it is possible to start to recognize contingent payments before the payment-triggering event is completely achieved, subject to management’s assessment of whether it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. We assessed the impact of the new standard on our active license and collaboration agreements and have identified the revenue streams. The adoption of this standard will not have a material impact on our financial statements as we do not have any unrecognized transaction price, other than future potential contingent payments, that are not currently considered probable of occurring, or any remaining performance obligations under our collaboration agreements as of the initial adoption date. In connection with our adoption of ASU No. 2014-09, we do not expect to have an adjustment on the opening balance of Accumulated Deficit balance as of January 1, 2018. In February 2016, the FASB issued ASU No. 2016-02— Leases , which is aimed at making leasing activities more transparent, and requires substantially all leases be recognized by lessees on their balance sheet as a right-of-use asset and corresponding lease liability, including leases currently accounted for as operating leases. The guidance is effective for all interim and annual reporting periods beginning after December 15, 2018. Early adoption is permitted. We plan to adopt this new standard on January 1, 2019. We are currently evaluating the potential impact of the adoption of ASU No. 2016-02 on our financial statements and cannot estimate the impact of adoption at this time. In March 2016, the FASB issued ASU No. 2016-09— Improvements to Employee Share-Based Payment Accounting , which is intended to simplify several aspects of the accounting for share-based payment award transactions, including the income tax consequences, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, as well as certain classifications on the statement of cash flows. We adopted ASU No. 2016-09 on January 1, 2017. Under this guidance, on a prospective basis, companies will no longer record excess tax benefits and certain tax deficiencies in additional paid-in capital. Instead, companies will record all excess tax benefits and tax deficiencies as income tax expense or benefit in the income statement. In addition, the guidance eliminates the requirement that excess tax benefits be realized before companies can recognize them. The ASU requires a cumulative-effect adjustment for previously unrecognized excess tax benefits in opening retained earnings in the annual period of adoption. Upon adoption, we recognized additional excess tax benefit of $4.1 million (federal) and $1.4 million (state) as a deferred tax asset with a corresponding increase to our deferred tax asset valuation allowance, which did not result in a net impact to accumulated deficit. Additionally, as provided for under this new guidance, we elected to account for forfeitures as they occur. The adoption of this aspect of the guidance did not have a material impact on our financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN21
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of computation of basic and diluted net loss per share | The following table sets forth the computation of basic and diluted net loss per share (in thousands, except per share amounts): Year Ended December 31, 2017 2016 2015 EPS Numerator: Net loss $ $ $ EPS Denominator—Basic and Diluted: Weighted-average common shares outstanding 126,324 94,387 88,434 Net loss per common share: Basic and diluted $ (0.62) $ (0.73) $ (0.58) |
Schedule of antidilutive securities | These securities consist of the following (in thousands except per share data): December 31, 2017 2016 2015 Outstanding stock options Warrant to purchase common stock — Weighted average exercise price of options $ $ $ Weighted average exercise price of warrant $ — $ $ |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
STOCK-BASED COMPENSATION | |
Schedule of stock-based compensation expense related to all of the entity's share-based awards | Total stock‑based compensation expense related to all of our stock‑based awards was as follows (in thousands): Year Ended December 31, 2017 2016 2015 General and administrative $ 4,490 $ 4,230 $ 3,303 Research and development 1,497 3,103 4,100 Restructuring charges — 499 — Total stock-based compensation expense $ 5,987 $ 7,832 $ 7,403 |
Summary of weighted-average assumptions relating to options granted pursuant to equity incentive plans | Year Ended December 31, 2017 2016 2015 Risk-free interest rate % % % Expected term (in years) Dividend yield % % % Expected volatility % % % |
Schedule of option activity under equity incentive plans | Weighted- Average Remaining Shares Available Number of Shares Weighted-Average Contractual Term Aggregate For Grant Underlying Options Exercise Price (in years) Intrinsic Value Outstanding at January 1, 2017 6,548,696 20,257,233 $ 6.24 Authorized for grant 6,460,000 — Granted (4,048,675) 4,048,675 $ 2.42 Exercised — (1,161,093) $ 2.30 Cancelled 2,736,675 (2,736,675) $ 8.18 Outstanding at December 31, 2017 11,696,696 20,408,140 $ 5.45 5.23 $ 13,736,285 Vested and expected to vest at December 31, 2017 20,408,140 $ 5.45 Exercisable at December 31, 2017 15,742,515 $ 6.25 4.16 $ 8,298,096 |
Schedule of stock options by exercise price | Details of our stock options by exercise price are as follows as of December 31, 2017: Options Outstanding Options Exercisable Number of Weighted-Average Outstanding Remaining Weighted-Average Number of Weighted-Average Exercise Price Options Contractual Life (in years) Exercise Price Options Exercise Price $1.68 - $2.14 4,351,726 7.25 $ 2.12 2,389,173 $ 2.14 $2.27 - $2.74 3,682,677 7.83 2.60 2,439,679 2.68 $2.89 - $3.67 3,449,971 5.57 3.49 2,859,448 3.46 $3.79 - $6.51 3,831,410 4.63 5.62 2,961,860 6.13 $6.55 - $9.62 4,068,512 2.29 7.90 4,068,512 7.90 $9.80 - $26.45 1,023,844 0.13 26.02 1,023,844 26.02 $1.68 - $26.45 20,408,140 5.23 5.45 15,742,516 6.25 |
Summary of weighted-average assumptions used to calculate fair value of purchase rights granted under Employee Stock Purchase Plan | Year Ended December 31, 2017 2016 2015 Risk-free interest rate 0.5 % 0.5 % 0.6 % Expected term (in years) 1.5 1.5 1.5 Dividend yield % % % Expected volatility 63.1 % 62.9 % 61.2 % |
CASH, CASH EQUIVALENTS AND SH23
CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS | |
Schedule of cash, cash equivalents and short-term investments | Cash, cash equivalents and short-term investments consist of the following (in thousands): December 31, 2017 2016 Cash $ 582 $ 240 Money market funds 2,795 9,496 U.S. treasury bills 6,726 4,300 Government-sponsored enterprise securities 7,826 16,459 Corporate bonds and commercial paper 97,822 44,271 $ 115,751 $ 74,766 Reported as: Cash and cash equivalents $ 38,290 $ 17,632 Short-term investments 77,461 57,134 $ 115,751 $ 74,766 |
Schedule of cash equivalents and short-term investments including the securities with unrealized gains and losses | Cash equivalents and short-term investments included the following securities with gross unrealized gains and losses (in thousands): Gross Gross Amortized Unrealized Unrealized December 31, 2017 Cost Gains Losses Fair Value U.S. treasury bills $ 6,733 $ — $ (7) $ 6,726 Government-sponsored enterprise securities 7,835 — (9) 7,826 Corporate bonds and commercial paper 97,888 1 (67) 97,822 Total $ 112,456 $ 1 $ (83) $ 112,374 |
Schedule of contractual maturities of cash equivalents and short-term investments | Gross Gross Amortized Unrealized Unrealized December 31, 2016 Cost Gains Losses Fair Value U.S. treasury bills $ 4,300 $ — $ — $ 4,300 Government-sponsored enterprise securities 16,457 3 (1) 16,459 Corporate bonds and commercial paper 44,291 2 (22) 44,271 Total $ 65,048 $ 5 $ (23) $ 65,030 |
Schedule of fair value and gross unrealized losses of the entity's investments in unrealized loss position | The following table shows the fair value and gross unrealized losses of our investments in individual securities that are in an unrealized loss position, aggregated by investment category (in thousands): December 31, 2017 Fair Value Unrealized Losses U. S. treasury bills $ 6,726 $ (7) Government-sponsored enterprise securities 7,826 (9) Corporate bonds and commercial paper 46,191 (67) Total $ 60,743 $ (83) |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
FAIR VALUE | |
Schedule of financial assets measured at fair value on a recurring basis | Financial assets measured at fair value on a recurring basis are categorized in the tables below based upon the lowest level of significant input to the valuations (in thousands): Assets at Fair Value as of December 31, 2017 Level 1 Level 2 Level 3 Total Money market funds $ 2,795 $ — $ — $ 2,795 U.S. treasury bills — 6,726 — 6,726 Government-sponsored enterprise securities — 7,826 — 7,826 Corporate bonds and commercial paper — 97,822 — 97,822 Total $ 2,795 $ 112,374 $ — $ 115,169 Assets at Fair Value as of December 31, 2016 Level 1 Level 2 Level 3 Total Money market funds $ 9,496 $ — $ — $ 9,496 U.S. treasury bills — 4,300 — 4,300 Government-sponsored enterprise securities — 16,459 — 16,459 Corporate bonds and commercial paper — 44,271 — 44,271 Total $ 9,496 $ 65,030 $ — $ 74,526 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
PROPERTY AND EQUIPMENT | |
Schedule of property and equipment | Property and equipment consists of the following (in thousands): December 31, 2017 2016 Laboratory equipment $ $ Computer and software Furniture and equipment Total property and equipment $ $ Less accumulated depreciation and amortization Property and equipment, net $ $ |
LEASE AGREEMENTS (Tables)
LEASE AGREEMENTS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
LEASE AGREEMENTS | |
Schedule of changes in liability related to sublease agreement | The changes in the liability related to the sublease agreement during the years ended December 31, 2017, 2016 and 2015 were as follows (in thousands): Balance at January 1, 2015 $ 9,269 Accretion of deferred liability 559 Amortization of deferred liability (3,363) Balance at December 31, 2015 6,465 Accretion of deferred liability 357 Amortization of deferred liability (3,362) Balance at December 31, 2016 3,460 Increase in deferred liability 495 Accretion of deferred liability 157 Amortization of deferred liability (3,828) Balance at December 31, 2017 $ 284 |
Schedule of future minimum lease payments and obligations under noncancelable operating lease, net of sublease receipts | At December 31, 2017, future minimum lease payments and obligations under our noncancelable operating lease, net of expected sublease receipts, were as follows (in thousands): Operating Sublease For years ending December 31, Lease Receipts Net 2018 $ 9,593 $ (3,942) $ 5,651 2019 9,321 (4,192) 5,129 2020 9,694 (4,360) 5,334 2021 10,082 (4,534) 5,548 2022 and thereafter 11,362 (5,110) 6,252 Total minimum payments required $ 50,052 $ (22,138) $ 27,914 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
INCOME TAXES | |
Schedule of components of the entity's deferred tax assets | Significant components of our deferred tax assets are as follows (in thousands): December 31, 2017 2016 Deferred tax assets Net operating loss carryforwards $ 212,153 $ 297,445 Orphan drug and research and development credits 51,744 44,348 Deferred compensation 12,261 21,618 Capitalized research and development expenses 4,690 1,877 Other, net 815 3,069 Total deferred tax assets 281,663 368,357 Valuation allowance Net deferred tax assets $ — $ — |
Schedule of reconciliation of the statutory federal income tax rate to the effective tax rate | Year Ended December 31, 2017 2016 2015 Federal statutory tax rate (34.0) % (34.0) % (34.0) % Federal statutory rate reduction 160.2 % — — Valuation allowance (126.5) % 35.0 % 31.3 % Stock compensation 5.7 % 5.0 % 8.3 % Orphan drug and research and development credits (3.6) % (7.3) % (5.6) % Other, net (1.8) % 1.3 % — % Effective tax rate % % % |
Schedule of activity related to the entity's gross unrecognized tax benefits | The following table summarizes the activity related to our gross unrecognized tax benefits (in thousands): Year Ended December 31, 2017 2016 Balance at the beginning of the year $ 6,903 $ 17,278 Increase related to prior year tax positions — (11,332) Increase related to current year tax positions 527 957 Balance at the end of the year $ 7,430 $ 6,903 |
SELECTED QUARTERLY FINANCIAL 28
SELECTED QUARTERLY FINANCIAL DATA (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
SELECTED QUARTERLY FINANCIAL DATA | |
Schedule of selected quarterly financial data | Year Ended December 31, 2017 Year Ended December 31, 2016 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 (unaudited, in thousands, except per share amounts) Revenue $ 3,584 $ — $ 900 $ — $ 5,029 $ 8,594 $ 3,760 $ 3,000 Net loss $ (15,314) $ (19,147) $ (17,660) $ (25,871) $ (17,464) $ (13,533) $ (22,629) $ (15,590) Net loss per share, basic and diluted $ (0.13) $ (0.16) $ (0.14) $ (0.18) $ (0.19) $ (0.15) $ (0.24) $ (0.16) Weighted average shares used in computing net loss per share, basic and diluted 113,598 122,500 124,628 144,252 90,555 92,495 95,454 98,981 |
SUMMARY OF SIGNIFICANT ACCOUN29
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Stock Award Plans (Details) | 12 Months Ended |
Dec. 31, 2017plan | |
Stock Based Compensation | |
Number of stock option plans | 4 |
Purchase plan | |
Stock Based Compensation | |
Purchase price of common shares as a percentage of the fair market value on the first day of the offering period | 85.00% |
Purchase price of common shares as a percentage of the fair market value on the purchase date | 85.00% |
SUMMARY OF SIGNIFICANT ACCOUN30
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property and Equipment (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Minimum | |
Property and equipment | |
Estimated useful life | 3 years |
Maximum | |
Property and equipment | |
Estimated useful life | 7 years |
SUMMARY OF SIGNIFICANT ACCOUN31
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Contingencies (Details) $ in Millions | Dec. 31, 2017USD ($) | Dec. 31, 2017USD ($)Milestone |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||
Number of future milestone events probable of achievement | Milestone | 1 | |
Consulting agreement, expense recognized | $ 1.5 | |
Minimum | ||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||
Consulting agreement, contingent liability | $ 1.5 | |
Maximum | ||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||
Consulting agreement, contingent liability | $ 4 |
SUMMARY OF SIGNIFICANT ACCOUN32
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Net Loss per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
EPS Numerator: | |||||||||||
Net loss | $ (25,871) | $ (17,660) | $ (19,147) | $ (15,314) | $ (15,590) | $ (22,629) | $ (13,533) | $ (17,464) | $ (77,992) | $ (69,216) | $ (51,464) |
EPS Denominator - Basic and Diluted: | |||||||||||
Weighted average common shares outstanding | 144,252 | 124,628 | 122,500 | 113,598 | 98,981 | 95,454 | 92,495 | 90,555 | 126,324 | 94,387 | 88,434 |
Net loss per common share: | |||||||||||
Basic and diluted (in dollars per share) | $ (0.18) | $ (0.14) | $ (0.16) | $ (0.13) | $ (0.16) | $ (0.24) | $ (0.15) | $ (0.19) | $ (0.62) | $ (0.73) | $ (0.58) |
Weighted Average | |||||||||||
Net loss per common share: | |||||||||||
Weighted average exercise price of options (in dollars per share) | $ 5.45 | 6.25 | $ 5.45 | 6.25 | 7.08 | ||||||
Weighted average exercise price of warrant (in dollars per share) | $ 6.61 | $ 6.61 | $ 6.61 | ||||||||
Employee stock option | |||||||||||
Net loss per common share: | |||||||||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 20,408 | 20,257 | 19,106 | ||||||||
Warrant to purchase common stock | |||||||||||
Net loss per common share: | |||||||||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 32 | 200 |
SUMMARY OF SIGNIFICANT ACCOUN33
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Recent Accounting Pronouncements (Details) - Accounting Standards Update 2016-09 - Adjustment $ in Millions | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Federal jurisdiction | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Effective income tax rate reconciliation, share-baseed compensation, excess tax benefit amount | $ 4.1 |
State jurisdiction | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Effective income tax rate reconciliation, share-baseed compensation, excess tax benefit amount | $ 1.4 |
SPONSORED RESEARCH AND LICENS34
SPONSORED RESEARCH AND LICENSE AGREEMENTS (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||
Feb. 28, 2017 | Dec. 31, 2016 | Jun. 30, 2016 | Sep. 30, 2015 | Mar. 31, 2015 | Mar. 31, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2017 | Sep. 30, 2016 | |
Collaborative arrangement | |||||||||||
Collaborations | |||||||||||
Maximum amount of contingent payments receivable | $ 532,400,000 | ||||||||||
BerGenBio A S Worldwide License Agreement | |||||||||||
Collaborations | |||||||||||
Revenue recognized | $ 3,700,000 | ||||||||||
Specified Development Events | Collaborative arrangement | |||||||||||
Collaborations | |||||||||||
Maximum amount of contingent payments receivable | 145,500,000 | ||||||||||
Specified Regulatory Events | Collaborative arrangement | |||||||||||
Collaborations | |||||||||||
Maximum amount of contingent payments receivable | 345,600,000 | ||||||||||
Specified Product Launch Events | Collaborative arrangement | |||||||||||
Collaborations | |||||||||||
Maximum amount of contingent payments receivable | $ 41,300,000 | ||||||||||
Bristol-Myers Squibb Company | |||||||||||
Collaborations | |||||||||||
Upfront fee received | $ 30,000,000 | ||||||||||
Contingent payments | $ 309,000,000 | ||||||||||
Deferred revenue related to upfront payment | $ 30,000,000 | ||||||||||
Revenue recognized | $ 3,000,000 | $ 13,400,000 | 16,600,000 | ||||||||
Bristol-Myers Squibb Company | Research Activities | |||||||||||
Collaborations | |||||||||||
Revenue recognized | $ 290,000 | 822,000 | |||||||||
Aclaris | |||||||||||
Collaborations | |||||||||||
Upfront fee received | $ 8,000,000 | ||||||||||
Contingent payments | 80,000,000 | ||||||||||
Revenue recognized | $ 8,000,000 | ||||||||||
BerGenBio | |||||||||||
Collaborations | |||||||||||
Upfront fee received | $ 1,700,000 | ||||||||||
Collaborative payment received | $ 3,300,000 | ||||||||||
Revenue recognized | $ 3,300,000 | ||||||||||
Payment received from exercise of option rights | $ 2,000,000 |
SIGNIFICANT CONCENTRATIONS (Det
SIGNIFICANT CONCENTRATIONS (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
SIGNIFICANT CONCENTRATIONS | |||
Accounts receivable | $ 0 | $ 0 | |
Sales | Customer concentration risk | BerGenBio | |||
SIGNIFICANT CONCENTRATIONS | |||
Concentration risk as a percentage of revenue | 74.00% | 18.00% | |
Sales | Customer concentration risk | Third Party | |||
SIGNIFICANT CONCENTRATIONS | |||
Concentration risk as a percentage of revenue | 26.00% | 12.00% | |
Sales | Customer concentration risk | Bristol-Myers Squibb Company | |||
SIGNIFICANT CONCENTRATIONS | |||
Concentration risk as a percentage of revenue | 82.00% | 60.00% | |
Sales | Customer concentration risk | Aclaris | |||
SIGNIFICANT CONCENTRATIONS | |||
Concentration risk as a percentage of revenue | 28.00% |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Stock-based compensation expense related to stock-based awards | |||
Total stock-based compensation expense | $ 5,987,000 | $ 7,832,000 | $ 7,403,000 |
Incremental stock-based compensation expense | 1,400,000 | 1,100,000 | |
General and administrative | |||
Stock-based compensation expense related to stock-based awards | |||
Total stock-based compensation expense | 4,490,000 | 4,230,000 | 3,303,000 |
Research and development | |||
Stock-based compensation expense related to stock-based awards | |||
Total stock-based compensation expense | 1,497,000 | 3,103,000 | $ 4,100,000 |
Restructuring charges | |||
Stock-based compensation expense related to stock-based awards | |||
Total stock-based compensation expense | $ 499,000 | $ 499,000 |
STOCK-BASED COMPENSATION - Empl
STOCK-BASED COMPENSATION - Employee Stock Option Plans (Details) | 12 Months Ended |
Dec. 31, 2017planshares | |
STOCK-BASED COMPENSATION | |
Number of stock option plans | plan | 4 |
Number of shares of common stock authorized (in shares) | 32,104,836 |
Employee stock option | |
STOCK-BASED COMPENSATION | |
Expiration period | 10 years |
Options exercised during the period (in shares) | 1,161,093 |
Equity incentive plan 2011 | Employee stock option | |
STOCK-BASED COMPENSATION | |
Number of shares of common stock authorized (in shares) | 16,174,599 |
Equity incentive plan 2011 | Employee stock option | Minimum | |
STOCK-BASED COMPENSATION | |
Vesting period | 0 years |
Equity incentive plan 2011 | Employee stock option | Maximum | |
STOCK-BASED COMPENSATION | |
Vesting period | 5 years |
Equity incentive plan 2000 | Employee stock option | |
STOCK-BASED COMPENSATION | |
Number of shares of common stock authorized (in shares) | 12,142,055 |
Equity incentive plan 2000 | Employee stock option | Minimum | |
STOCK-BASED COMPENSATION | |
Vesting period | 0 years |
Equity incentive plan 2000 | Employee stock option | Maximum | |
STOCK-BASED COMPENSATION | |
Vesting period | 5 years |
Non-employee directors stock option plan 2000 | Employee stock option | |
STOCK-BASED COMPENSATION | |
Number of shares of common stock authorized (in shares) | 1,988,182 |
Non-employee directors stock option plan 2000 | Employee stock option | Maximum | |
STOCK-BASED COMPENSATION | |
Expiration period | 10 years |
Inducement Plan | |
STOCK-BASED COMPENSATION | |
Number of shares of common stock authorized (in shares) | 1,800,000 |
STOCK-BASED COMPENSATION - Assu
STOCK-BASED COMPENSATION - Assumptions (Details) | 12 Months Ended | ||||
Dec. 31, 2017USD ($)item$ / sharesshares | Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2016USD ($)shares | |
Stock Based Compensation | |||||
Number of homogenous groups for purposes of determining fair values of options | item | 3 | ||||
Share-based compensation | $ | $ 5,987,000 | $ 7,832,000 | $ 7,403,000 | ||
Shares Available For Grant | |||||
Outstanding at the end of the period (in shares) | 11,696,696 | ||||
Additional disclosures | |||||
Shares of common stock available for grant | 11,696,696 | 11,696,696 | |||
Shares reserved for future issuance | 32,104,836 | ||||
Purchase plan | |||||
Weighted-average assumptions relating to options granted | |||||
Risk-free interest rate (as a percent) | 0.50% | 0.50% | 0.60% | ||
Expected term (in years) | 1 year 6 months | 1 year 6 months | 1 year 6 months | ||
Dividend yield (as a percent) | 0.00% | 0.00% | 0.00% | ||
Expected volatility (as a percent) | 63.10% | 62.90% | 61.20% | ||
Employee stock option | |||||
Stock Based Compensation | |||||
Contractual term of the option | 10 years | ||||
Weighted-average assumptions relating to options granted | |||||
Risk-free interest rate (as a percent) | 2.20% | 1.80% | 1.80% | ||
Expected term (in years) | 6 years 7 months 6 days | 6 years 2 months 12 days | 6 years 6 months | ||
Dividend yield (as a percent) | 0.00% | 0.00% | 0.00% | ||
Expected volatility (as a percent) | 63.50% | 61.10% | 65.00% | ||
Shares Available For Grant | |||||
Outstanding at the beginning of the period (in shares) | 6,548,696 | ||||
Authorized for grant (in shares) | 6,460,000 | ||||
Granted (in shares) | (4,048,675) | (5,251,185) | (3,875,170) | ||
Cancelled (in shares) | 2,736,675 | ||||
Outstanding at the end of the period (in shares) | 11,696,696 | 6,548,696 | |||
Number of Shares Underlying Options | |||||
Outstanding at the beginning of the period (in shares) | 20,257,233 | ||||
Granted (in shares) | 4,048,675 | 5,251,185 | 3,875,170 | ||
Exercised (in shares) | (1,161,093) | ||||
Cancelled (in shares) | (2,736,675) | ||||
Outstanding at the end of the period (in shares) | 20,408,140 | 20,257,233 | |||
Vested and expected to vest (in shares) | 20,408,140 | ||||
Exercisable (in shares) | 15,742,515 | ||||
Weighted Average Exercise Price | |||||
Outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 6.24 | ||||
Granted (in dollars per share) | $ / shares | 2.42 | ||||
Exercised (in dollars per share) | $ / shares | 2.30 | ||||
Cancelled (in dollars per share) | $ / shares | 8.18 | ||||
Outstanding at the end of the period (in dollars per share) | $ / shares | $ 5.45 | $ 6.24 | |||
Vested and expected to vest (in dollars per share) | $ / shares | $ 5.45 | ||||
Exercisable (in dollars per share) | $ / shares | $ 6.25 | ||||
Weighted Average Remaining Contractual Term (in years) | |||||
Outstanding at the end of the period | 5 years 2 months 23 days | ||||
Exercisable | 4 years 1 month 28 days | ||||
Aggregate Intrinsic Value | |||||
Outstanding at the end of the period (in dollars) | $ | $ 13,736,285 | ||||
Exercisable | $ | $ 8,298,096 | ||||
Number of nonvested stock options (in shares) | 4,665,624 | 3,668,891 | |||
Intrinsic value of nonvested stock options | $ | $ 5,400,000 | $ 31,000 | |||
Aggregate intrinsic value of options exercised | $ | $ 1,200,000 | $ 253,000 | |||
Unrecognized compensation cost related to purchase plan | $ | $ 91,000 | ||||
Weighted-average recognition period of unamortized compensation cost | 2 years 3 months 18 days | 6 months | |||
Number of shares vested | 2,844,690 | 4,215,058 | |||
Weighted-average exercise price for shares vested during the period (in dollars per share) | $ / shares | $ 2.86 | $ 2.70 | |||
Additional disclosures | |||||
Options cancelled (in shares) | 2,736,675 | ||||
Options outstanding at the end of the period (in shares) | 20,257,233 | 20,257,233 | 20,408,140 | 20,257,233 | |
Grant-date weighted-average fair value (in dollars per share) | $ / shares | $ 1.48 | $ 1.72 | $ 1.40 | ||
Total unrecognized compensation costs | $ | $ 6,200,000 | ||||
Shares of common stock available for grant | 6,548,696 | 6,548,696 | 11,696,696 | 6,548,696 | |
Options exercised during the period (in shares) | 1,161,093 | ||||
Employee stock option | Consultant | |||||
Stock Based Compensation | |||||
Contractual term of the option | 10 years | ||||
Performance shares | |||||
Stock Based Compensation | |||||
Share-based compensation | $ | $ 1,100,000 | $ 1,100,000 | |||
Shares Available For Grant | |||||
Granted (in shares) | (1,460,000) | ||||
Number of Shares Underlying Options | |||||
Granted (in shares) | 1,460,000 | ||||
Additional disclosures | |||||
Grant date fair value of performance stock options awards | $ | $ 2,200,000 | $ 1,100,000 | |||
Total unrecognized compensation costs | $ | $ 993,000 | ||||
Performance shares | Probable achievement of corresponding corporate-based milestones | |||||
Shares Available For Grant | |||||
Granted (in shares) | (1,160,000) | (700,000) | |||
Number of Shares Underlying Options | |||||
Granted (in shares) | 1,160,000 | 700,000 |
STOCK-BASED COMPENSATION - Stoc
STOCK-BASED COMPENSATION - Stock Options by Exercise Price (Details) - Employee stock option | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
$1.68 - $2.14 | |
Stock options by exercise price | |
Range of exercise prices, low end of the range (in dollars per share) | $ 1.68 |
Range of exercise prices, high end of the range (in dollars per share) | $ 2.14 |
Options Outstanding | |
Number of Shares Underlying Options (in shares) | shares | 4,351,726 |
Weighted-Average Remaining Contractual Life | 7 years 3 months |
Weighted-Average Exercise Price (in dollars per share) | $ 2.12 |
Options Exercisable | |
Number of Shares Underlying Options (in shares) | shares | 2,389,173 |
Weighted Average Exercise Price (in dollars per share) | $ 2.14 |
$2.27 - $2.74 | |
Stock options by exercise price | |
Range of exercise prices, low end of the range (in dollars per share) | 2.27 |
Range of exercise prices, high end of the range (in dollars per share) | $ 2.74 |
Options Outstanding | |
Number of Shares Underlying Options (in shares) | shares | 3,682,677 |
Weighted-Average Remaining Contractual Life | 7 years 9 months 29 days |
Weighted-Average Exercise Price (in dollars per share) | $ 2.60 |
Options Exercisable | |
Number of Shares Underlying Options (in shares) | shares | 2,439,679 |
Weighted Average Exercise Price (in dollars per share) | $ 2.68 |
$2.89 - $3.67 | |
Stock options by exercise price | |
Range of exercise prices, low end of the range (in dollars per share) | 2.89 |
Range of exercise prices, high end of the range (in dollars per share) | $ 3.67 |
Options Outstanding | |
Number of Shares Underlying Options (in shares) | shares | 3,449,971 |
Weighted-Average Remaining Contractual Life | 5 years 6 months 26 days |
Weighted-Average Exercise Price (in dollars per share) | $ 3.49 |
Options Exercisable | |
Number of Shares Underlying Options (in shares) | shares | 2,859,448 |
Weighted Average Exercise Price (in dollars per share) | $ 3.46 |
$3.79 - $6.51 | |
Stock options by exercise price | |
Range of exercise prices, low end of the range (in dollars per share) | 3.79 |
Range of exercise prices, high end of the range (in dollars per share) | $ 6.51 |
Options Outstanding | |
Number of Shares Underlying Options (in shares) | shares | 3,831,410 |
Weighted-Average Remaining Contractual Life | 4 years 7 months 17 days |
Weighted-Average Exercise Price (in dollars per share) | $ 5.62 |
Options Exercisable | |
Number of Shares Underlying Options (in shares) | shares | 2,961,860 |
Weighted Average Exercise Price (in dollars per share) | $ 6.13 |
$6.55 - $9.62 | |
Stock options by exercise price | |
Range of exercise prices, low end of the range (in dollars per share) | 6.55 |
Range of exercise prices, high end of the range (in dollars per share) | $ 9.62 |
Options Outstanding | |
Number of Shares Underlying Options (in shares) | shares | 4,068,512 |
Weighted-Average Remaining Contractual Life | 2 years 3 months 15 days |
Weighted-Average Exercise Price (in dollars per share) | $ 7.90 |
Options Exercisable | |
Number of Shares Underlying Options (in shares) | shares | 4,068,512 |
Weighted Average Exercise Price (in dollars per share) | $ 7.90 |
$9.80 - $26.45 | |
Stock options by exercise price | |
Range of exercise prices, low end of the range (in dollars per share) | 9.80 |
Range of exercise prices, high end of the range (in dollars per share) | $ 26.45 |
Options Outstanding | |
Number of Shares Underlying Options (in shares) | shares | 1,023,844 |
Weighted-Average Remaining Contractual Life | 1 month 17 days |
Weighted-Average Exercise Price (in dollars per share) | $ 26.02 |
Options Exercisable | |
Number of Shares Underlying Options (in shares) | shares | 1,023,844 |
Weighted Average Exercise Price (in dollars per share) | $ 26.02 |
$1.68 - $26.45 | |
Stock options by exercise price | |
Range of exercise prices, low end of the range (in dollars per share) | 1.68 |
Range of exercise prices, high end of the range (in dollars per share) | $ 26.45 |
Options Outstanding | |
Number of Shares Underlying Options (in shares) | shares | 20,408,140 |
Weighted-Average Remaining Contractual Life | 5 years 2 months 23 days |
Weighted-Average Exercise Price (in dollars per share) | $ 5.45 |
Options Exercisable | |
Number of Shares Underlying Options (in shares) | shares | 15,742,516 |
Weighted Average Exercise Price (in dollars per share) | $ 6.25 |
STOCK-BASED COMPENSATION - Em40
STOCK-BASED COMPENSATION - Employee Stock Purchase Plan (Details) | 12 Months Ended | ||||
Dec. 31, 2017$ / sharesitemshares | Dec. 31, 2016$ / sharesshares | Dec. 31, 2015$ / sharesshares | Jul. 01, 2016USD ($) | Jan. 02, 2015USD ($) | |
Stock Based Compensation | |||||
Total incremental fair value for the Purchase Plan reset | $ | $ 1,000,000 | $ 792,000 | |||
Purchase plan | |||||
Stock Based Compensation | |||||
Purchase price expressed as a percentage of fair market value of common stock on the first day of the offering period | 85.00% | ||||
Purchase price expressed as a percentage of fair market value of common stock on the purchase date | 85.00% | ||||
Number of shares of common stock issued | shares | 403,302 | 482,746 | 576,537 | ||
Average price of shares issued (in dollars per share) | $ / shares | 1.87 | 1.89 | 2.03 | ||
Weighted average fair value of stock purchased (in dollars per share) | $ / shares | $ 0.99 | $ 0.98 | $ 1.05 | ||
Number of shares of common stock available for future issuance | shares | 2,115,568 | ||||
Award offering period | 24 months | ||||
Number of purchase periods per award offering period | item | 4 | ||||
Award purchase period | 6 months |
CASH, CASH EQUIVALENTS AND SH41
CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017USD ($)item | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Cash, cash equivalent and short term investments | ||||
Cash and cash equivalents | $ 38,290 | $ 17,632 | $ 43,456 | $ 15,203 |
Short-term Investments | 77,461 | 57,134 | ||
Cash, cash equivalents and short-term investments | 115,751 | 74,766 | ||
Available-For-Sale Securities Reconciliation | ||||
Amortized Cost | 112,456 | 65,048 | ||
Gross Unrealized Gains | 1 | 5 | ||
Gross Unrealized Losses | (83) | (23) | ||
Fair Value | $ 112,374 | 65,030 | ||
Weighted-average time to maturity of cash equivalents and available-for-sale securities | 110 days | |||
Number of investments in continuous unrealized loss position for more than twelve months | item | 0 | |||
Fair value and gross unrealized losses of investments in individual securities in unrealized loss position | ||||
Number of individual securities in unrealized loss position for twelve months or less | item | 38 | |||
Fair Value | $ 60,743 | |||
Unrealized Losses | (83) | |||
Money market funds | ||||
Cash, cash equivalent and short term investments | ||||
Cash, cash equivalents and short-term investments | 2,795 | 9,496 | ||
U.S. treasury bills | ||||
Cash, cash equivalent and short term investments | ||||
Cash, cash equivalents and short-term investments | 6,726 | 4,300 | ||
Available-For-Sale Securities Reconciliation | ||||
Amortized Cost | 6,733 | 4,300 | ||
Gross Unrealized Losses | (7) | |||
Fair Value | 6,726 | 4,300 | ||
Fair value and gross unrealized losses of investments in individual securities in unrealized loss position | ||||
Fair Value | 6,726 | |||
Unrealized Losses | (7) | |||
Government-sponsored enterprises securities | ||||
Cash, cash equivalent and short term investments | ||||
Cash, cash equivalents and short-term investments | 7,826 | 16,459 | ||
Available-For-Sale Securities Reconciliation | ||||
Amortized Cost | 7,835 | 16,457 | ||
Gross Unrealized Gains | 3 | |||
Gross Unrealized Losses | (9) | (1) | ||
Fair Value | 7,826 | 16,459 | ||
Fair value and gross unrealized losses of investments in individual securities in unrealized loss position | ||||
Fair Value | 7,826 | |||
Unrealized Losses | (9) | |||
Corporate bonds and commercial paper | ||||
Cash, cash equivalent and short term investments | ||||
Cash, cash equivalents and short-term investments | 97,822 | 44,271 | ||
Available-For-Sale Securities Reconciliation | ||||
Amortized Cost | 97,888 | 44,291 | ||
Gross Unrealized Gains | 1 | 2 | ||
Gross Unrealized Losses | (67) | (22) | ||
Fair Value | 97,822 | 44,271 | ||
Fair value and gross unrealized losses of investments in individual securities in unrealized loss position | ||||
Fair Value | 46,191 | |||
Unrealized Losses | (67) | |||
Cash | ||||
Cash, cash equivalent and short term investments | ||||
Cash, cash equivalents and short-term investments | $ 582 | $ 240 |
FAIR VALUE (Details)
FAIR VALUE (Details) - Fair value measurements recurring - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Estimate Of Fair Value Fair Value Disclosure | ||
Fair Value | ||
Investments at fair value | $ 115,169 | $ 74,526 |
Money market funds | Estimate Of Fair Value Fair Value Disclosure | ||
Fair Value | ||
Investments at fair value | 2,795 | 9,496 |
U.S. treasury bills | Estimate Of Fair Value Fair Value Disclosure | ||
Fair Value | ||
Investments at fair value | 6,726 | 4,300 |
Government-sponsored enterprises securities | Estimate Of Fair Value Fair Value Disclosure | ||
Fair Value | ||
Investments at fair value | 7,826 | 16,459 |
Corporate bonds and commercial paper | Estimate Of Fair Value Fair Value Disclosure | ||
Fair Value | ||
Investments at fair value | 97,822 | 44,271 |
Fair value inputs Level 1 | ||
Fair Value | ||
Investments at fair value | 2,795 | 9,496 |
Fair value inputs Level 1 | Money market funds | ||
Fair Value | ||
Investments at fair value | 2,795 | 9,496 |
Fair value inputs Level 2 | ||
Fair Value | ||
Investments at fair value | 112,374 | 65,030 |
Fair value inputs Level 2 | U.S. treasury bills | ||
Fair Value | ||
Investments at fair value | 6,726 | 4,300 |
Fair value inputs Level 2 | Government-sponsored enterprises securities | ||
Fair Value | ||
Investments at fair value | 7,826 | 16,459 |
Fair value inputs Level 2 | Corporate bonds and commercial paper | ||
Fair Value | ||
Investments at fair value | $ 97,822 | $ 44,271 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
PROPERTY AND EQUIPMENT | |||
Total property and equipment | $ 13,153,000 | $ 19,948,000 | |
Less accumulated depreciation and amortization | (12,278,000) | (18,792,000) | |
Property and equipment, net | 875,000 | 1,156,000 | |
Assets disposed | 7,000,000 | 618,000 | |
Depreciation and amortization | 465,000 | 941,000 | $ 1,439,000 |
Restructuring, asset impairment charges | 319,000 | 319,000 | |
Laboratory equipment | |||
PROPERTY AND EQUIPMENT | |||
Total property and equipment | 11,122,000 | 17,986,000 | |
Computer and software | |||
PROPERTY AND EQUIPMENT | |||
Total property and equipment | 1,320,000 | 1,280,000 | |
Furniture and equipment | |||
PROPERTY AND EQUIPMENT | |||
Total property and equipment | $ 711,000 | $ 682,000 |
LEASE AGREEMENTS (Details)
LEASE AGREEMENTS (Details) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2017USD ($)item | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Feb. 28, 2017ft² | Dec. 31, 2014ft² | |
LEASE AGREEMENTS | |||||
Number of lease renewal periods | item | 2 | ||||
Lease renewal term (in years) | 5 years | ||||
Area of real estate property (square feet) | ft² | 9,328 | 57,000 | |||
Expected income from sublease | $ 22,100 | ||||
Loss on sublease | 495 | ||||
Income from sublease | 8,000 | $ 6,500 | $ 6,300 | ||
Changes in liability | |||||
Beginning Balance | 3,460 | 6,465 | 9,269 | ||
Increase in deferred liability | 495 | ||||
Accretion of deferred liability | 157 | 357 | 559 | ||
Amortization of deferred liability | (3,828) | (3,362) | (3,363) | ||
Ending Balance | 284 | $ 3,460 | $ 6,465 | ||
Operating Lease: | |||||
2,018 | 9,593 | ||||
2,019 | 9,321 | ||||
2,020 | 9,694 | ||||
2,021 | 10,082 | ||||
2022 and thereafter | 11,362 | ||||
Total minimum operating lease | 50,052 | ||||
Sublease Receipts: | |||||
2,018 | (3,942) | ||||
2,019 | (4,192) | ||||
2,020 | (4,360) | ||||
2,021 | (4,534) | ||||
2022 and thereafter | (5,110) | ||||
Total minimum sublease receipts | (22,138) | ||||
Net: | |||||
2,018 | 5,651 | ||||
2,019 | 5,129 | ||||
2,020 | 5,334 | ||||
2,021 | 5,548 | ||||
2022 and Thereafter | 6,252 | ||||
Total minimum net | $ 27,914 |
LEASE AGREEMENTS - Rent Expense
LEASE AGREEMENTS - Rent Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
LEASE AGREEMENTS | |||
Rent expense under operating lease | $ 6.9 | $ 8.3 | $ 8.9 |
STOCKHOLDERS' EQUITY - Preferre
STOCKHOLDERS' EQUITY - Preferred Stock (Details) - shares | Dec. 31, 2017 | Dec. 31, 2016 |
Preferred Stock | ||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
STOCKHOLDERS' EQUITY - Equity O
STOCKHOLDERS' EQUITY - Equity Offerings (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 8 Months Ended | 12 Months Ended | 17 Months Ended | |||||
Oct. 31, 2017 | May 31, 2017 | Feb. 28, 2017 | Aug. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2016 | |
Controlled Equity Offering | |||||||||
Aggregate proceeds | $ 114,180 | $ 23,586 | $ 5,292 | ||||||
Common stock | |||||||||
Controlled Equity Offering | |||||||||
Number of shares of common stock sold (in shares) | 20,815,000 | 23,000,000 | 2,166,093 | 45,981,093 | 7,895,563 | 1,722,312 | 9,617,875 | ||
Share price (in dollars per share) | $ 3.35 | $ 2 | |||||||
Aggregate proceeds | $ 65,300 | $ 43,000 | $ 5,700 | $ 30,000 | |||||
Value of common stock shares registered for sale | $ 0 | $ 0 | |||||||
Cantor | Common stock | |||||||||
Controlled Equity Offering | |||||||||
Maximum value of shares available under Controlled Equity Offering | $ 40,000 | $ 30,000 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Deferred tax assets | |||
Net operating loss carryforwards | $ 212,153 | $ 297,445 | |
Orphan drug and research and development credits | 51,744 | 44,348 | |
Deferred compensation | 12,261 | 21,618 | |
Capitalized research and development expenses | 4,690 | 1,877 | |
Other, net | 815 | 3,069 | |
Total deferred tax assets | 281,663 | 368,357 | |
Valuation allowance | $ (281,663) | $ (368,357) | |
Reconciliation of the statutory federal income tax rate to the effective tax rate | |||
Federal statutory tax rate (as a percent) | (34.00%) | (34.00%) | (34.00%) |
Federal statutory rate reduction | 160.20% | ||
Valuation allowance (as a percent) | (126.50%) | 35.00% | 31.30% |
Stock compensation (as a percent) | 5.70% | 5.00% | 8.30% |
Orphan drug and research and development credits | (3.60%) | (7.30%) | (5.60%) |
Other, net (as a percent) | (1.80%) | 1.30% | |
Effective tax rate (as a percent) | 0.00% | 0.00% | 0.00% |
INCOME TAXES - Operating Loss C
INCOME TAXES - Operating Loss Carryforwards (Details) $ in Millions | Dec. 31, 2017USD ($) |
Federal jurisdiction | |
Operating loss carryforwards | |
Net operating loss carryforwards | $ 902.1 |
State jurisdiction | |
Operating loss carryforwards | |
Net operating loss carryforwards | $ 321.4 |
INCOME TAXES - Tax Credits (Det
INCOME TAXES - Tax Credits (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Tax credit carryforward | ||
Orphan drug and research and development credits | $ 51,744 | $ 44,348 |
Federal jurisdiction | Research | ||
Tax credit carryforward | ||
Amount of tax credit carryforward | 37,100 | |
State jurisdiction | Research | ||
Tax credit carryforward | ||
Amount of tax credit carryforward | $ 26,900 |
INCOME TAXES - Valuation Allowa
INCOME TAXES - Valuation Allowance (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
INCOME TAXES | ||
Increase (decrease) in valuation allowance | $ (86.7) | $ 25.9 |
Unrecognized tax benefits, if recognized, would result in adjustments to other tax accounts, primarily deferred taxes | 5.8 | $ 5.4 |
Income tax benefit | 0 | |
Tax positions subject to interest or penalties | $ 0 |
INCOME TAXES - Unrecognized Tax
INCOME TAXES - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Gross unrecognized tax benefits | ||||
Balance at the beginning of the year | $ 7,430 | $ 6,903 | $ 17,278 | |
(Decrease) related to prior year tax positions | (11,332) | |||
Increase related to current year tax positions | 527 | 957 | ||
Balance at the end of the year | 7,430 | 6,903 | $ 17,278 | |
Unrecognized tax benefits, if recognized, would result in adjustments to other tax accounts, primarily deferred taxes | 5,800 | $ 5,400 | ||
Income tax benefit | 0 | |||
Tax positions subject to interest or penalties | $ 0 | |||
Federal statutory tax rate (as a percent) | 34.00% | 34.00% | 34.00% | |
Provisional deferred tax expense | $ 117,300 | |||
Scenario, Forecast | ||||
Gross unrecognized tax benefits | ||||
Federal statutory tax rate (as a percent) | 21.00% |
RESTRUCTURING CHARGES (Details)
RESTRUCTURING CHARGES (Details) | 1 Months Ended | 12 Months Ended | ||
Sep. 30, 2016employee | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Restructuring Charges | ||||
Number of positions eliminated | employee | 46 | |||
Restructuring charges | $ 5,770,000 | |||
Restructuring charges paid or to be paid in cash | $ 5,000,000 | |||
Restructuring, asset impairment charges | 319,000 | 319,000 | ||
Total stock-based compensation expense | 5,987,000 | 7,832,000 | $ 7,403,000 | |
Restructuring charges | ||||
Restructuring Charges | ||||
Total stock-based compensation expense | 499,000 | $ 499,000 | ||
Accrued restructuring liability | $ 0 |
SELECTED QUARTERLY FINANCIAL 54
SELECTED QUARTERLY FINANCIAL DATA (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
SELECTED QUARTERLY FINANCIAL DATA | |||||||||||
Revenue | $ 900 | $ 3,584 | $ 3,000 | $ 3,760 | $ 8,594 | $ 5,029 | $ 4,484 | $ 20,383 | $ 28,895 | ||
Net loss | $ (25,871) | $ (17,660) | $ (19,147) | $ (15,314) | $ (15,590) | $ (22,629) | $ (13,533) | $ (17,464) | $ (77,992) | $ (69,216) | $ (51,464) |
Net loss per share, basic and diluted (in dollars per share) | $ (0.18) | $ (0.14) | $ (0.16) | $ (0.13) | $ (0.16) | $ (0.24) | $ (0.15) | $ (0.19) | $ (0.62) | $ (0.73) | $ (0.58) |
Weighted average shares used in computing net loss per share, basic and diluted (in shares) | 144,252 | 124,628 | 122,500 | 113,598 | 98,981 | 95,454 | 92,495 | 90,555 | 126,324 | 94,387 | 88,434 |