DOCUMENT AND ENTITY INFORMATION
DOCUMENT AND ENTITY INFORMATION - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Feb. 28, 2023 | Jun. 30, 2022 | |
DOCUMENT AND ENTITY INFORMATION | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | --12-31 | ||
Document Period End Date | Dec. 31, 2022 | ||
Document Transition Report | false | ||
Entity File Number | 000-29889 | ||
Entity Registrant Name | RIGEL PHARMACEUTICALS INC | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 94-3248524 | ||
Entity Address, Address Line One | 611 Gateway Boulevard, Suite 900, | ||
Entity Address, City or Town | South San Francisco | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 94080 | ||
City Area Code | 650 | ||
Local Phone Number | 624-1100 | ||
Title of 12(b) Security | Common Stock, par value $.001 per share | ||
Trading Symbol | RIGL | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Central Index Key | 0001034842 | ||
Amendment Flag | false | ||
Entity Public Float | $ 193.7 | ||
Entity Common Stock, Shares Outstanding | 173,653,353 | ||
Document Fiscal Year Focus | 2022 | ||
Auditor Name | Ernst & Young LLP | ||
Auditor Firm ID | 42 | ||
Auditor Location | San Francisco, California |
BALANCE SHEETS
BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 24,459 | $ 18,890 |
Short-term investments | 33,747 | 106,077 |
Accounts receivable, net | 40,320 | 15,472 |
Inventories | 9,118 | 6,616 |
Prepaid and other current assets | 8,259 | 7,412 |
Total current assets | 115,903 | 154,467 |
Property and equipment, net | 857 | 2,184 |
Intangible asset, net | 14,949 | |
Operating lease right-of-use asset | 1,930 | 9,703 |
Other assets | 640 | 974 |
Total assets | 134,279 | 167,328 |
Current liabilities: | ||
Accounts payable | 22,508 | 3,795 |
Accrued compensation | 8,866 | 10,690 |
Accrued research and development | 7,708 | 10,384 |
Revenue reserves and refund liability | 12,145 | 7,915 |
Other accrued liabilities | 6,485 | 4,776 |
Lease liabilities, current portion | 1,133 | 9,892 |
Deferred revenue | 1,369 | 2,596 |
Other long-term liabilities, current portion | 4,997 | 13,506 |
Total current liabilities | 65,211 | 63,554 |
Long-term portion of lease liabilities | 972 | 759 |
Loans payable, net of discount | 39,448 | 19,914 |
Other long-term liabilities | 42,264 | 52,727 |
Total liabilities | 147,895 | 136,954 |
Commitments | ||
Stockholders' equity (deficit): | ||
Preferred stock, $0.001 par value; 10,000,000 shares authorized; none issued and outstanding as of December 31, 2022 and 2021 | ||
Common stock, $0.001 par value; 400,000,000 shares authorized; 173,398,645 and 171,602,226 shares issued and outstanding as of December 31, 2022 and 2021, respectively | 174 | 172 |
Additional paid-in capital | 1,368,822 | 1,354,190 |
Accumulated other comprehensive loss | (153) | (102) |
Accumulated deficit | (1,382,459) | (1,323,886) |
Total stockholders' (deficit) equity | (13,616) | 30,374 |
Total liabilities and stockholders' (deficit) equity | $ 134,279 | $ 167,328 |
BALANCE SHEETS (Parenthetical)
BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
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 | 400,000,000 | 400,000,000 |
Common stock, shares issued | 173,398,645 | 171,602,226 |
Common stock, shares outstanding | 173,398,645 | 171,602,226 |
STATEMENTS OF OPERATIONS
STATEMENTS OF OPERATIONS - USD ($) shares in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Total revenues | $ 120,242,000 | $ 149,236,000 | $ 108,621,000 |
Costs and expenses: | |||
Cost of product sales | 1,749,000 | 1,083,000 | 895,000 |
Research and development | 60,272,000 | 65,237,000 | 60,101,000 |
Selling, general and administrative | 112,451,000 | 91,891,000 | 76,598,000 |
Restructuring charges | 1,320,000 | 3,521,000 | |
Total costs and expenses | 175,792,000 | 161,732,000 | 137,594,000 |
Loss from operations | (55,550,000) | (12,496,000) | (28,973,000) |
Interest income | 684,000 | 47,000 | 582,000 |
Interest expense | (3,707,000) | (4,860,000) | (1,353,000) |
Loss before income taxes | (58,573,000) | (17,309,000) | (29,744,000) |
Provision for income taxes | 605,000 | ||
Net loss | $ (58,573,000) | $ (17,914,000) | $ (29,744,000) |
Net loss per share, basic (in dollars per share) | $ (0.34) | $ (0.11) | $ (0.18) |
Net loss per share, diluted (in dollars per share) | $ (0.34) | $ (0.11) | $ (0.18) |
Weighted average shares used in computing net loss per share, basic (in shares) | 172,406 | 170,492 | 168,754 |
Weighted average shares used in computing net loss per share, diluted (in shares) | 172,406 | 170,492 | 168,754 |
Product sales, net | |||
Total revenues | $ 76,718,000 | $ 63,010,000 | $ 61,696,000 |
Contract revenues from collaborations | |||
Total revenues | 39,024,000 | 75,726,000 | $ 46,925,000 |
Government contract | |||
Total revenues | $ 4,500,000 | $ 10,500,000 |
STATEMENTS OF COMPREHENSIVE LOS
STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
STATEMENTS OF COMPREHENSIVE LOSS | |||
Net loss | $ (58,573) | $ (17,914) | $ (29,744) |
Other comprehensive loss: | |||
Net unrealized loss on short-term investments | (51) | (98) | (27) |
Comprehensive loss | $ (58,624) | $ (18,012) | $ (29,771) |
STATEMENTS OF STOCKHOLDERS' EQU
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total |
Balance at Dec. 31, 2019 | $ 168 | $ 1,329,852 | $ 23 | $ (1,276,228) | $ 53,815 |
Balance (in shares) at Dec. 31, 2019 | 167,987,850 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net loss | (29,744) | (29,744) | |||
Net unrealized loss on short-term investments | (27) | (27) | |||
Issuance of common stock upon exercise of options and participation in Purchase Plan | $ 1 | 2,595 | 2,596 | ||
Issuance of common stock upon exercise of options and participation in Purchase Plan (in shares) | 1,328,932 | ||||
Stock-based compensation expense | 7,386 | 7,386 | |||
Balance at Dec. 31, 2020 | $ 169 | 1,339,833 | (4) | (1,305,972) | 34,026 |
Balance (in shares) at Dec. 31, 2020 | 169,316,782 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net loss | (17,914) | (17,914) | |||
Net unrealized loss on short-term investments | (98) | (98) | |||
Issuance of common stock upon exercise of options and participation in Purchase Plan | $ 3 | 4,772 | 4,775 | ||
Issuance of common stock upon exercise of options and participation in Purchase Plan (in shares) | 2,285,444 | ||||
Stock-based compensation expense | 9,585 | 9,585 | |||
Balance at Dec. 31, 2021 | $ 172 | 1,354,190 | (102) | (1,323,886) | 30,374 |
Balance (in shares) at Dec. 31, 2021 | 171,602,226 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net loss | (58,573) | (58,573) | |||
Net unrealized loss on short-term investments | (51) | (51) | |||
Issuance of common stock upon exercise of options and participation in Purchase Plan | $ 2 | 2,122 | 2,124 | ||
Issuance of common stock upon exercise of options and participation in Purchase Plan (in shares) | 1,580,169 | ||||
Issuance of common stock upon vesting of restricted stock units (RSUs) (in shares) | 216,250 | ||||
Stock-based compensation expense | 12,510 | 12,510 | |||
Balance at Dec. 31, 2022 | $ 174 | $ 1,368,822 | $ (153) | $ (1,382,459) | $ (13,616) |
Balance (in shares) at Dec. 31, 2022 | 173,398,645 |
STATEMENTS OF CASH FLOWS
STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Operating activities | |||
Net loss | $ (58,573) | $ (17,914) | $ (29,744) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | |||
Stock-based compensation expense | 12,385 | 9,486 | 7,297 |
Net gain on sale and write-down of property and equipment | (138) | ||
Depreciation and amortization | 998 | 1,162 | 706 |
Noncash interest expense | 682 | 3,139 | |
Net amortization and accretion of discount on short-term investments and term loan | (63) | 287 | (122) |
Changes in assets and liabilities: | |||
Accounts receivable, net | (24,848) | 501 | (5,862) |
Inventories | (2,377) | (4,875) | (126) |
Prepaid and other current assets | (847) | 6,633 | (4,583) |
Other assets | 334 | (150) | (128) |
Right-of-use assets | 7,773 | 8,192 | 7,814 |
Accounts payable | 3,788 | 41 | (331) |
Accrued compensation | (1,824) | 1,098 | 773 |
Accrued research and development | (2,676) | 5,495 | (1,071) |
Revenue reserves and refund liability | 4,230 | 1,850 | 2,733 |
Other accrued liabilities | 1,709 | (24) | 1,318 |
Lease liability | (8,546) | (8,621) | (7,230) |
Deferred revenue | (1,227) | (422) | (23,629) |
Other current and long-term liabilities | (4,538) | ||
Net cash (used in) provided by operating activities | (73,758) | 5,878 | (52,185) |
Investing activities | |||
Purchases of short-term investments | (28,894) | (141,459) | (81,706) |
Maturities of short-term investments | 101,228 | 62,050 | 130,434 |
Proceeds from sale of property and equipment | 893 | ||
Purchases of property and equipment | (450) | (627) | (1,262) |
Net cash provided by (used in) investing activities | 72,777 | (80,036) | 47,466 |
Financing activities | |||
Cost share advance from a collaboration partner | 57,900 | ||
Cost share payments to a collaboration partner | (15,116) | ||
Net proceeds from issuances of common stock upon exercise of options and participation in Purchase Plan | 2,124 | 4,775 | 2,596 |
Net proceeds from term loan financing | 19,542 | 9,975 | |
Net cash provided by financing activities | 6,550 | 62,675 | 12,571 |
Net increase (decrease) in cash and cash equivalents | 5,569 | (11,483) | 7,852 |
Cash and cash equivalents at beginning of period | 18,890 | 30,373 | 22,521 |
Cash and cash equivalents at end of period | 24,459 | 18,890 | 30,373 |
Supplemental disclosure of cash flow information | |||
Interest paid | 2,495 | $ 1,500 | $ 1,180 |
Purchases of intangible asset included within accounts payable | $ 15,000 |
DESCRIPTION OF BUSINESS AND SUM
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2022 | |
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of Business We are a biotechnology company dedicated to discovering, developing and providing novel theraphies that significantly improve the lives of patients with hematologic disorders and cancer. Our pioneering research focuses on signaling pathways that are critical to disease mechanisms. Our first product approved by the FDA is TAVALISSE (fostamatinib disodium hexahydrate) tablets, the only approved oral SYK inhibitor, for the treatment of adult patients with chronic ITP who have had an insufficient response to a previous treatment. The product is also commercially available in Europe and UK (as TAVLESSE), and in Canada and Israel (as TAVALISSE) for the treatment of chronic ITP in adult patients. Our second FDA approved product is REZLIDHIA (olutasidenib) capsules for the treatment of adult patients with R/R AML with a susceptible IDH1 mutation as detected by an FDA-approved test. We began our commercialization of REZLIDHIA (olutasidenib) in December 2022. W olutasidenib We conducted a Phase 3 clinical trial evaluating fostamatinib for the treatment of wAIHA and announced that we did not file an sNDA for this indication considering the top-line data results and guidance received from the FDA. We announced the completion of the FOCUS Phase 3 clinical trial of fostamatinib for the treatment of hospitalized high-risk patients with COVID-19. Fostamatinib is currently being studied in an NIH/NHLBI sponsored Phase 2/3 trial (ACTIV-4 Host Tissue Trial) for the treatment of COVID-19 in hospitalized patients. Basis of Presentation The accompanying financial statements have been prepared in accordance with United States generally accepted accounting principles (US GAAP). Any reference in these notes to applicable accounting guidance is meant to refer to the authoritative US GAAP included in the Accounting Standards Codification (ASC), and Accounting Standards Update (ASU) issued by the Financial Accounting Standards Board (FASB). We manage our operations as one business segment for purposes of assessing performance, making operating decisions, and allocating resources. Liquidity As of December 31, 2022, we had approximately $58.2 million in cash, cash equivalents and short-term investments. Since inception, we have financed our operations primarily through sales of equity securities, debt financing arrangement, contract payments under our collaboration agreements and from product sales. Based on our current operating plan, we believe that our existing cash, cash equivalents, and short-term investments will be sufficient to fund our expenses and capital expenditure requirements through at least the next 12 months from the date of issuance of this Annual Report on Form 10-K. Use of Estimates The preparation of financial statements in conformity with US 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 revenue recognition on product sales and collaboration agreements, recoverability of our assets, including accounts receivables and inventories, stock-based compensation and the probability of achievement of corporate performance-based milestones for our performance-based stock option awards, impairment issues, the weighted average incremental borrowing rate for our lease, estimated interest rate for our financing liability, the estimated useful life of assets, and estimated accruals, particularly research and development accruals, on an ongoing basis. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. To the extent there are material differences between these estimates and actual results, our financial statements will be affected. Reclassifications Revenue Recognition We recognize revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers Product Sales Revenues from product sales are recognized when the specialty distributors, who are our customers, obtain control of our product, which occurs at a point in time, upon delivery to such specialty distributors. These specialty distributors subsequently resell our products to specialty pharmacy providers, health care providers, hospitals and clinics. In addition to distribution agreements with our specialty distributors, we also have arrangements with certain specialty pharmacy providers, in-office dispensing providers, group purchasing organizations, and government entities that provide for government-mandated and/or privately-negotiated rebates, chargebacks and discounts with respect to the purchase of our products. Under ASC 606, we are required to estimate the transaction price, including variable consideration that is subject to a constraint, in our contracts with our customers. Variable consideration is included in the transaction price to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur. Revenue from product sales is recorded net of certain variable consideration which includes estimated government-mandated rebates and chargebacks, distribution fees, estimated product returns and other deductions. Provisions for returns and other adjustments are provided for in the period the related revenue is recorded. Actual amounts of consideration ultimately received may differ from our estimates. If actual results in the future vary from our estimates, we will adjust these estimates, which would affect net product revenue and earnings in the period such variances become known. The following are our significant categories of sales discounts and allowances: Sales Discounts . We provide certain customer a prompt payment discount that is explicitly stated in our contract. The sales discount is recorded as a reduction of revenue in the period the related product revenue is recognized. Product Returns. Government and Private Payor Rebates: Chargebacks and Discounts: Chargebacks for fees and discounts represent the estimated obligations resulting from contractual commitments to sell products to certain specialty pharmacy providers, in-office dispensing providers, group purchasing organizations, and government entities at prices lower than the list prices charged to our specialty distributors who directly purchase the product from us. These specialty distributors charge us for the difference between what they pay for the product and our contracted selling price to these specialty pharmacy providers, in-office dispensing providers, group purchasing organizations, and government entities. These reserves are established in the same period that the related revenue is recognized, resulting in a reduction of product revenue. Actual chargeback amounts are generally determined at the time of resale to the specialty pharmacy providers, in-office dispensing providers, group purchasing organizations, and government entities by our specialty distributors. The estimated obligations arising from these chargebacks and discounts are recorded as revenue reserves within other accrued liabilities in the balance sheet. Co-Payment Assistance: Contract Revenues from Collaborations In the normal course of business, we conduct research and development programs independently and in connection with our corporate collaborators, pursuant to which we license certain rights to our intellectual property to third parties. The terms of these arrangements typically include payment to us for a combination of one or more of the following: upfront license fees; development, regulatory and commercial milestone payments; product supply services; and royalties on net sales of licensed products. Upfront License Fees: For arrangements that require us to share in the development costs but to which we do not participate in the co-development work, the portion of the upfront fee attributed to our share in the future development costs is excluded from the transaction price. If such share in the development costs is payable beyond 12 months from the delivery of the corresponding license, a significant financing component is deemed to exist. If a significant financing component is identified, we adjust the transaction price by reducing the upfront fee by the net present value of our share in future development costs over the expected commitment period. Such discounted amount will be reported as a liability in the balance sheet, with a corresponding interest expense being accreted based on a discount rate applied over the expected commitment period. Development, Regulatory or Commercial Milestone Payments: Product Supply Services: Sales-based Milestone Payments and Royalties: Government Contract In January 2021, we were awarded up to $16.5 million by the US Department of Defense’s Joint Program Executive Office for Chemical, Biological, Radiological and Nuclear Defense (referred to here as the US Department of Defense) to support our ongoing Phase 3 clinical trial to evaluate the safety and efficacy of fostamatinib for the treatment of hospitalized high-risk patients with COVID-19. We determined that the government award should be accounted for under IAS 20, Accounting for Government Grants and Disclosure of Government Assistance, Stock-based Compensation Share-based awards are valued at fair value on the date of grant and that fair value is recognized over the requisite service period, which is generally the vesting period of the respective award. We use the straight-line attribution method over the requisite employee service period for the entire award in recognizing stock-based compensation expense. We account for forfeitures as they occur. The fair value of each option award is estimated on the date of grant using the Black-Scholes option pricing model. The model requires management to make a number of assumptions including expected volatility, expected term, risk-free interest rate and expected dividends. A number of these assumptions are subjective, and their determination generally require judgment. We segregate 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 determine the weighted-average valuation assumptions separately for each of these groups as follows: ● Volatility – We estimate 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 consider 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 – We analyze various historical data to determine the applicable expected term for each of the other option groups. This data includes: (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 non-vested 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 gives us reasonable estimates of the expected term for each employee group. We also consider 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 consider the optionee type (i.e., officers and directors or all other employees) and other factors that may affect the expected term of the option. For options granted to consultants, we use the contractual term of the option, which is generally 10 years, for the initial valuation of the option and the remaining contractual term of the option for the succeeding periods. ● Risk-free interest rate – The risk-free interest rate is based on US 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. We grant performance-based stock options to purchase shares of our common stock which will vest upon the achievement of certain corporate performance-based milestones. We determine 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 grant date fair values 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 re-evaluation at each reporting date, 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. The fair value of the RSU grant is based on the market price of our common stock on the date of grant. Accounts Receivable Accounts receivable are recorded net of customer allowances for prompt payment discounts and any allowance for doubtful accounts. We monitor the financial performance and creditworthiness of our customers so that we can properly assess and respond to changes in their credit profile. We will reserve against our accounts receivable for estimated losses that may arise from a customer’s inability to pay. We have historically not experienced significant credit losses and no amounts were reserved for estimated losses as of the balance sheet dates presented. The following table summarizes the activity of our customer allowances for prompt payment discounts for the periods presented (in thousands): Year Ended December 31, 2022 2021 2020 Balance at the beginning of the year $ 106 $ 171 $ 109 Provision for prompt payment discount 557 609 807 Reduction in prompt payment discount (527) (674) (745) Balance at end of the year $ 136 $ 106 $ 171 Concentration of Credit Risk Financial instruments that potentially subject us to a concentration of credit risk are primarily cash, investment in debt securities and accounts receivable. All of our cash and investment in debt securities are maintained with financial institutions that management believes are creditworthy. By policy, we limit the concentration of credit risk by diversifying our investments among a variety of high credit-quality issuers. 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. We have not historically experienced any significant credit losses related to these financial instruments and do not believe that we are exposed to any significant credit risk related to these instruments. Concentration of credit risk with respect to our accounts receivable is limited due to our small number of customers. Our accounts receivable consists mostly of outstanding invoices from our sale of our product to our specialty distributors. Accounts receivable may also include outstanding invoice or invoices from our collaboration partners with respect to the related sponsored research and license agreements, as well as outstanding invoice or invoices from the US Government with respect to the related government contract. Our outstanding receivable as of December 31, 2022 includes $20.0 million of regulatory milestone due from Kissei which was collected in January 2023. As of December 31, 2022, 49% of our accounts receivable are outstanding invoices from our specialty distributors, and the remaining 51% are outstanding invoices from other collaboration partners, mainly Kissei and Grifols. As of December 31, 2021, 85% of our accounts receivable consisted of outstanding invoices from our specialty distributors, and the remaining 15% are outstanding invoices from the US Government and from other collaboration partners, mainly Grifols and Kissei. See “Note 3 - Revenues” for summary of revenues from each of our customers who individually accounted for 10% or more of the total net product sales and revenues from collaborations. Cash, Cash Equivalents and Short-Term Investments Our investment in debt securities consists of money market funds, US treasury bills, government- sponsored enterprise securities, and corporate bonds and commercial paper. All of our investment in debt securities are available-for-sale and are classified based on their maturities. We consider all highly liquid investments in debt securities with maturity of 90 days or less from the date of purchase to be cash equivalents. All other investments with maturity greater than 90 days from the date of purchase are classified as short-term investments. Unrealized gains (losses) are reported within the statements of stockholders’ equity (deficit) and comprehensive income (loss). The cost of securities sold is based on the specific identification method. We periodically evaluate our available-for-sale marketable debt securities for impairment. When the fair value of a marketable debt security is below its amortized cost, the amortized cost is reduced to its fair value if it is more likely than not that we are required to sell the impaired security before recovery of our amortized cost basis, or we have the intention to sell the security. If neither of these conditions are met, we determine whether the impairment is due to credit losses by comparing the present value of the expected cash flows of the security with its amortized cost basis. The amount of impairment recognized is limited to the excess of the amortized cost over the fair value of the security. An allowance for credit losses for the excess of amortized cost over the expected cash flows is recorded in other income (expense), net on the statements of operations. Impairment losses that are not credit-related are included in accumulated other comprehensive income (loss) in stockholders’ equity (deficit). Fair Value of Financial Instruments The carrying amounts of our financial instruments, including cash, accounts receivable, accounts payable and accrued liabilities, approximate fair value due to their relatively short maturities. The carrying value of our loans payable and other long-term debt approximates fair value based on management’s estimation that a current interest rate would not differ materially from the stated rate, or the discount rate applied. The fair value of our cash equivalents and short-term investments measured at fair value on a recurring basis and are categorized based upon the lowest level of significant input to the valuations. 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. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. ● 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 – 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, US 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. ● 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. Inventories and Cost of Product Sales Inventories are stated at the lower-of-cost or estimated net realizable value. We determine the cost of inventories using the standard cost method, which approximates actual cost, and is valued using the first-in, first-out method. Inventory costs primarily consist of active pharmaceutical ingredients, third-party manufacturing costs and allocated internal overhead costs. We capitalize inventory costs when the product is approved by the FDA, or when based on management’s judgment, future commercialization was considered probable, and the future economic benefits are expected to be realized. Prior to FDA approval of a product, costs to purchase active pharmaceutical ingredients including costs to manufacture a product are charged to research and development expense when incurred. Our physical inventories as of balance sheet dates include inventory quantities where costs have been previously charged to research and development expenses since such costs were incurred prior to FDA approval of the product. We provide reserves for potential excess, dated or obsolete inventories based upon assumptions about future demand and market conditions, as well as product shelf life. Cost of product sales primarily includes cost of inventories sold, and product shipping and handling costs. Further, following the approval of REZLIDHIA, we recognize the amortization expense of capitalized intangible asset and royalty expense incurred pursuant to our license agreement with Forma, within cost of sales. 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 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 expenses as incurred and at the time raw materials are purchased. We have various contracts with third parties related to our research and development activities. Costs that are incurred but not billed to us as of the end of the period are 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. Clinical trial contract expenses are accrued based on units of activity. 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 not related to our approved drug are charged to research and development expenses at the time of purchase. Research and development expenses also include milestone payment obligations incurred prior to r egulatory approval of the product, which are accrued when the event requiring payment of the milestone occurs. See related discussions below. Advertising Expense Advertising costs are expensed as incurred and are included within selling general and administrative expenses in the statements of operations. Advertising costs for the years ended December 31, 2022, 2021 and 2020 amounted to $2.7 million, $2.3 million, and $1.7 million, respectively. IPR&D/Intangible Asset In July 2022, we entered into a license and transition services agreement with Forma. The transaction was accounted for as an acquisition of asset under ASC 730, Research and Development account for m ilestone payment obligations incurred at development stage and prior to a regulatory approval of an indication associated with the acquired licensed asset as research and development expenses when the event requiring payment of the milestone occurs. Milestone payment obligations incurred upon and after a regulatory approval of an indication associated with the acquired licensed asset, and at the commercial stage, will be recorded as intangible asset when the event requiring payment of the milestones occurs. The amount recorded as an intangible asset is amortized over the estimated useful life of the acquired licensed asset. See “Note 4 – Sponsored Research and License Agreements and Government Contract” for further discussion. Leases We account for leases in accordance with ASU No. 2016-02 , Leases (Topic 842) . Topic 842 requires a lessee to determine if an arrangement is a lease or contains a lease at contract inception. For our sublease agreement wherein we were the lessor, we recognized sublease income on a straight-line basis over the term of the related sublease agreement. Restructuring Restructuring costs comprised severance, other termination benefit costs, stock-based compensation expense for stock award and stock option modifications related to workforce reductions and accelerated depreciation. We recognize restructuring charges when the liability is probable, and the amount is estimable. Employee termination benefits are accrued at the date management has committed to a plan of termination and affected employees have been notified of their termination date and expected severance benefits. 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. Recent Accounting Pronouncements Recently issued accounting guidance is either not applicable or did not have, or is not expected to have, a material impact on us. |
NET LOSS PER SHARE
NET LOSS PER SHARE | 12 Months Ended |
Dec. 31, 2022 | |
NET LOSS PER SHARE | |
NET LOSS PER SHARE | 2. 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 stock options, RSUs and shares issuable under our Purchase Plan. The dilutive effect of these potentially dilutive securities is reflected in diluted earnings per share using 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 potential shares of common stock that were excluded from the computation of diluted net loss per share for the periods presented because including them would have been antidilutive are as follows (in thousands): Year Ended December 31, 2022 2021 2020 Outstanding stock options 34,696 30,009 27,260 RSUs 1,104 226 — Total 35,800 30,235 27,260 |
REVENUES
REVENUES | 12 Months Ended |
Dec. 31, 2022 | |
REVENUES | |
REVENUES | 3 REVENUES Revenues disaggregated by category were as follows (in thousands): Year Ended December 31, 2022 2021 2020 Product sales: Gross product sales $ 108,523 $ 81,186 $ 76,470 Discounts and allowances (31,805) (18,176) (14,774) Total product sales, net 76,718 63,010 61,696 Revenues from collaborations: License revenues 7,932 70,553 40,358 Development milestones 25,000 1,875 2,100 Research and development services and others 6,092 3,298 4,467 Total revenues from collaborations 39,024 75,726 46,925 Government contract 4,500 10,500 — Total revenues $ 120,242 $ 149,236 $ 108,621 Revenue from product sales is primarily related to sales of our first commercial product, TAVALISSE. In December 2022, following the FDA approval of our second commercial product, REZLIDHIA, we delivered product quantities to our customers and recognized $0.9 million of net revenue included within net product sales for the year ended December 31, 2022. Our net product sales include sale of products to our specialty distributors, net of chargebacks, discounts and fees, government and other rebates and returns. The following tables summarize the activities in chargebacks, discounts and fees, government and other rebates and returns that were accounted for within other accrued liabilities, for each of the periods presented (in thousands): Chargebacks, Government Discounts and and Other Fees Rebates Returns Total Balance as of January 1, 2022 $ 3,404 $ 2,494 $ 2,017 $ 7,915 Provision related to current period sales 23,488 5,901 1,514 30,903 Credit or payments made during the period (20,679) (5,759) (235) (26,673) Balance as of December 31, 2022 $ 6,213 $ 2,636 $ 3,296 $ 12,145 Chargebacks, Government Discounts and and Other Fees Rebates Returns Total Balance as of January 1, 2021 $ 2,461 $ 2,115 $ 1,489 $ 6,065 Provision related to current period sales 10,731 5,036 1,021 16,788 Credit or payments made during the period (9,788) (4,657) (493) (14,938) Balance as of December 31, 2021 $ 3,404 $ 2,494 $ 2,017 $ 7,915 Of the $31.8 million discounts and allowances from gross product sales for the year ended December 31, 2022, $30.9 million was accounted for as additions to revenue reserves and refund liability and $0.9 million as reductions in accounts receivable (as it relates to allowance for prompt pay discount) and prepaid and other current assets (as it relates to certain chargebacks and other fees that were prepaid) in the balance sheet. Of the $18.2 million discounts and allowances from gross product sales for the year ended December 31, 2021, $16.8 million was accounted for as additions to revenue reserves and refund liability and $1.4 million as reductions in accounts receivable (as it relates to allowance for prompt pay discount) and prepaid and other current assets (as it relates to certain chargebacks and other fees that were prepaid) in the balance sheet. For detailed discussions of our revenues from collaboration and government contract, see “Note 4 – Sponsored Research and License Agreements and Government Contract” below. The following table summarizes revenues from each of our customers who individually accounted for 10% or more (wherein * denotes less than 10%) of the total net product sales and revenues from collaborations: Year Ended December 31, 2022 2021 2020 McKesson Specialty Care Distribution Corporation 31% 20% 23% Kissei 24% * — Cardinal Healthcare 19% * * ASD Healthcare and Oncology Supply 17% 17% 30% Lilly * 48% — Grifols * * 41% |
SPONSORED RESEARCH AND LICENSE
SPONSORED RESEARCH AND LICENSE AGREEMENTS AND GOVERNMENT CONTRACT | 12 Months Ended |
Dec. 31, 2022 | |
SPONSORED RESEARCH AND LICENSE AGREEMENTS AND GOVERNMENT CONTRACT | |
SPONSORED RESEARCH AND LICENSE AGREEMENTS AND GOVERNMENT CONTRACT | 4. SPONSORED RESEARCH AND LICENSE AGREEMENTS AND GOVERNMENT CONTRACT Sponsored Research and License Agreements We conduct research and development programs independently and in connection with our corporate collaborators. As of December 31, 2022, we are a party to collaboration agreements with Lilly to develop and commercialize R552, a RIPK1 inhibitor, for the treatment of non-CNS diseases and collaboration aimed at developing additional RIPK1 inhibitors for the treatment of CNS diseases; with Grifols to commercialize fostamatinib for human diseases in all indications, including chronic ITP and AIHA, in Grifols territory which includes Europe, the UK, Turkey, the Middle East, North Africa and Russia (including Commonwealth of Independent States); with Kissei to develop and commercialize fostamatinib in Kissei territory which includes Japan, China, Taiwan and the Republic of Korea; with Medison to commercialize fostamatinib in all indications, including chronic ITP and AIHA, in Medison territory which includes Canada and Israel; and with Knight to commercialize fostamatinib in all indications, including chronic ITP and AIHA, in Knight territory which includes Latin America, consisting of Mexico, Central and South America, and the Caribbean. Further, we are also a party to collaboration agreements, but do not have ongoing performance obligations with BerGenBio for the development and commercialization of AXL inhibitors in oncology, and with Daiichi to pursue research related to MDM2 inhibitors, a novel class of drug targets called ligases. Global Exclusive License Agreement with Lilly On February 18, 2021, we entered into a global exclusive license and collaboration agreement with Lilly (Lilly Agreement), which became effective on March 27, 2021, upon clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, to develop and commercialize R552 for the treatment of non-CNS diseases. In addition, the collaboration is aimed at developing additional RIPK1 inhibitors for the treatment of CNS diseases. Pursuant to the terms of the license agreement, we granted to Lilly exclusive rights to develop and commercialize R552 and related RIPK1 inhibitors in all indications worldwide. The parties’ collaboration is governed through a joint governance committee and appropriate subcommittees. We are responsible for 20% of development costs for R552 in the US, Europe, and Japan, up to a specified cap. Lilly is responsible for funding the remainder of all development activities for R552 and other non-CNS disease development candidates. We have the right to opt- out of co-funding the R552 development activities in the US, Europe and Japan at two different specified times. If we exercise our first opt-out right (no later than September 30, 2023), under the Lilly Agreement, we are required to fund our share of the R552 development activities in the US, Europe, and Japan up to a maximum funding commitment of $65.0 million through April 1, 2024. If we decide not to exercise our opt-out rights, we will be required to share in global development costs of up to certain amounts at a specified cap, as provided for in the Lilly Agreement. We are responsible for performing and funding initial discovery and identification of CNS disease development candidates. Following candidate selection, Lilly will be responsible for performing and funding all future development and commercialization of the CNS disease development candidates. Under the terms of the license agreement, we were entitled to receive a non-refundable and non-creditable upfront cash payment amounting to $125.0 million, which we received in April 2021. We are also entitled to additional milestone payments for non-CNS disease products consisting of up to $330.0 million milestone payments upon the achievement of specified development and regulatory milestones, and up to $100.0 million in sales milestone payments on a product-by-product basis. In addition, depending on the extent of our co-funding of R552 development activities, we would be entitled to receive tiered royalty payments on net sales of non-CNS disease products at percentages ranging from the mid-single digits to high-teens, subject to certain standard reductions and offsets. We are also eligible to receive milestone payments for CNS disease products consisting of up to $255.0 million in milestone payments upon the achievement of specified development, regulatory and commercial milestones, and up to $150.0 million in sales milestone payments on a product-by-product basis. We would be entitled to receive tiered royalty payments on net sales of CNS disease products up to low-double digits, subject to certain standard reductions and offsets. We accounted for this agreement under ASC 606 and identified the following distinct performance obligations at inception of the agreement: (a) granting of the license rights over the non-CNS penetrant intellectual property (IP), and (b) granting of the license rights over the CNS penetrant IP which will be delivered to Lilly upon completion of the additional research and development efforts specified in the agreement. We concluded each of these performance obligations is distinct. We based our assessment on the assumption that Lilly can benefit from each of the licenses on its own by developing and commercializing the underlying product using its own resources. Under the Lilly Agreement, we are required to share 20% of the development costs for R552 in the US, Europe and Japan up to a specified cap. Given our rights to opt- out from the development of R552, we believe at the minimum, we have a commitment to fund the development costs up to $65.0 million as discussed above. We considered this commitment to fund the development costs as a significant financing component of the contract, which we accounted for as a reduction of the upfront fee to derive the transaction price. This financing component was recorded as a liability at its net present value of approximately $57.9 million using a 6.4% discount rate. Interest expense is being accreted on such liability over the expected commitment period and adjusted for timing of expected cost share payments. Interest expense accreted during the year ended December 31, 2022 and 2021 was $0.7 million and $2.8 million, respectively. Through December 31, 2022, Lilly billed us $15.1 million for our share of development costs under this agreement, the amount was fully paid as of December 31, 2022. As of December 31, 2022 and 2021, the outstanding financing liability to Lilly was $46.2 million and $60.7 million, respectively, and included within other long-term liabilities, current portion, and other long-term liabilities in the balance sheet. We allocated the net transaction price of $67.1 million to each performance obligation based on our best estimate of its relative standalone selling price using the adjusted market assessment approach. We concluded that the license rights over the non-CNS penetrant IP represents functional IP that is not expected to change over time, and we have no ongoing or undelivered obligations relative to such IP that Lilly will benefit from the use of such IP on the delivery date. As such, the transaction price allocated to the non-CNS penetrant IP of $60.4 million was recognized as revenue in the year ended December 31, 2021 upon delivery of the non-CNS penetrant IP to Lilly in March 2021. For the delivery of license rights over the CNS penetrant IP, we are obligated to perform additional research and development efforts before Lilly can accept the license. The allocated transaction price to the CNS penetrant IP of $6.7 million is being recognized as revenue from the effective date of the Lilly Agreement through the eventual acceptance by Lilly using the input method. In June 2022, Lilly provided notice of continuance pursuant to the terms of the Lilly Agreement, whereby Lilly elected its option to lead the identification and selection of CNS penetrant lead candidate, and as such, we recognized the remaining outstanding deferred revenue related to delivery of the CNS penetrant IP. For the year ended December 31, 2022 and 2021, we recognized revenue of $0.5 million and $6.2 million, respectively, relative to the delivery of CNS penetrant IP. Further, we recognized $0.2 million of revenue related to the delivery of CNS compound to Lilly during the year ended December 31, 2022. The remaining future variable consideration related to future milestone payments as discussed above were fully constrained because we cannot conclude that it is probable that a significant reversal of the amount of cumulative revenue recognized will not occur, given the inherent uncertainty of success with these future milestones. For sales-based milestones and royalties, we determined that the license is the predominant item to which the royalties or sales-based milestones relate. Accordingly, we will recognize revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). We will re-evaluate the transaction price in each reporting period and as uncertain events are resolved or other changes in circumstances occur. Grifols License Agreement In January 2019, we entered into a commercialization license agreement with Grifols with exclusive rights to commercialize fostamatinib for human diseases, including chronic ITP and AIHA, and non-exclusive rights to develop, fostamatinib in Grifols territory. Under the agreement, we received an upfront payment of $30.0 million, with the potential for $297.5 million in total regulatory and commercial milestones. We are also entitled to receive stepped double-digit royalty payments based on tiered net sales which may reach 30% of net sales. The agreement also required us to continue to conduct our long-term open-label extension study on patients with ITP through EMA approval of ITP in Europe or until the study ends as well as conduct the Phase 3 trial of fostamatinib in AIHA. In January 2020, the EC granted a centralized Marketing Authorization for fostamatinib valid throughout the EU and in the UK after the departure of the UK from the EU for the treatment of chronic ITP in adult patients who are refractory to other treatments. With this approval, in February 2020, we received $20.0 million non-refundable payment, consisted of a $17.5 million payment due upon MAA approval by the EMA of fostamatinib for the first indication and a $2.5 million creditable advance royalty payment, based on the terms of our collaboration agreement with Grifols. The above milestone payment was allocated to the distinct performance obligations in the collaboration agreement with Grifols. We accounted for this agreement under ASC 606 and identified the following distinct performance obligations at inception of the agreement: (a) granting of the license, (b) performance of research and regulatory services related to our ongoing long-term open-label extension study on patients with ITP, and (c) performance of research services related to our Phase 3 trial in AIHA. In October 2020, we entered into a commercial supply agreement for the licensed territories. We concluded each of these performance obligations is distinct. We based our assessment on the following: (i) our assessment that Grifols can benefit from the license on its own by developing and commercializing the underlying product using its own resources, and (ii) the fact that the manufacturing services are not highly specialized in nature and can be performed by other vendors. Upon execution of our agreement with Grifols, we determined that the upfront fee of $5.0 million, which is the non-refundable portion of the $30.0 million upfront fee, represented the transaction price. In the first quarter of 2020, we revised the transaction price to include the $25.0 million of the upfront payment that is no longer refundable under our agreement and the $20.0 million payment received that is no longer constrained. We allocated the updated transaction price to the distinct performance obligations in our collaboration agreement based on our best estimate of the relative standalone selling price as follows: (a) for the license, we estimated the standalone selling price using the adjusted market assessment approach to estimate its standalone selling price in the licensed territories; and (b) for the research and regulatory services, we estimated the standalone selling price using the cost plus expected margin approach. As a result of the adjusted transaction price, adjustments are recorded on a cumulative catch-up basis, and recorded as part of contract revenues from collaborations in 2020. For the years ended December 31, 2022, 2021 and 2020, we recognized revenue associated with the research and development services of $0.7 million, $0.9 million and $3.8 million, respectively. For the year ended December 31, 2020, we also recognized revenue of $ 39.9 million related to licensed rights and $0.5 million related to the exercise of options to include additional territories. For the year ended December 31, 2022, we recognized $ million of royalty revenue from Grifols, and such amount was included within contract revenues from collaboration. such revenue was recognized for the years ended December 31, 2021 and 2020. The remaining future variable consideration of $277.5 million related to future regulatory and commercial milestones were fully constrained due to the fact that it was probable that a significant reversal of cumulative revenue would occur, given the inherent uncertainty of success with these future milestones. We are recognizing revenues related the research and regulatory services throughout the term of the respective clinical programs using the input method. For sales-based milestones and royalties, we determined that the license is the predominant item to which the royalties or sales-based milestones relate. Accordingly, we will recognize revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). We will re-evaluate the transaction price in each reporting period and as uncertain events are resolved or other changes in circumstances occur. We entered into a Commercial Supply Agreement with Grifols in October 2020 to supply and sell our drug product priced at a certain markup specified in the agreement, in quantities Grifols shall order from us pursuant to and in accordance with the agreement. Prior to the Commercial Supply Agreement, we had a Drug Product Purchase Agreement with Grifols entered in December 2019. For the years ended December 31, 2022, 2021, and 2020, we recognized revenue of $1.6 million, $2.0 million and $0.7 million, respectively, related to delivery of drug supply to Grifols for its commercialization. Kissei License Agreement In October 2018, we entered into an exclusive license and supply agreement with Kissei to develop and commercialize fostamatinib in all current and potential indications in Kissei territory. Kissei is responsible for performing and funding all development activities for fostamatinib in the above-mentioned territories. We received an upfront cash payment of $33.0 million, with the potential for up to an additional $147.0 million in development, regulatory and commercial milestone payments, and will receive mid- to upper twenty percent, tiered, escalated net sales-based payments for the supply of fostamatinib. Under the agreement, we granted Kissei the license rights to fostamatinib in Kissei territory and are obligated to supply Kissei with drug product for use in clinical trials and pre-commercialization activities. We are also responsible for the manufacture and supply of fostamatinib for all future development and commercialization activities under the agreement. We accounted for this agreement under ASC 606 and identified the following distinct performance obligations at inception of the agreement: (a) granting of the license, (b) supply of fostamatinib for clinical use and (c) material right associated with discounted fostamatinib that are supplied for use other than clinical or commercial. In addition, we will provide commercial product supply if the product is approved in the licensed territory. We concluded that each of these performance obligations is distinct. We based our assessment on the following: (i) our assessment that Kissei can benefit from the license on its own by developing and commercializing the underlying product using its own resources and (ii) the fact that the manufacturing services are not highly specialized in nature and can be performed by other vendors. Moreover, we determined that the upfront fee of $33.0 million represented the transaction price and was allocated to the performance obligations based on our best estimate of the relative standalone selling price as follows: (a) for the license, we estimated the standalone selling price using the adjusted market assessment approach to estimate its standalone selling price in the licensed territories; (b) for the supply of fostamatinib and the material right associated with discounted fostamatinib, we estimated the standalone selling price using the cost plus expected margin approach. Variable consideration of $147.0 million related to future development and regulatory milestones was fully constrained because we cannot conclude that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur, given the inherent uncertainty of success with these future milestones. We recognize revenues related to the supply of fostamatinib and material right upon delivery of fostamatinib to Kissei. For sales-based milestones and royalties, we determined that the license is the predominant item to which the royalties or sales-based milestones relate to. Accordingly, we recognize revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). We re-evaluate the transaction price in each reporting period and as uncertain events are resolved or other changes in circumstances occur. In April 2022, Kissei announced that an NDA was submitted to Japan’s PMDA for fostamatinib in chronic ITP. With this milestone event, we received $5.0 December 31, 2022 2023 . As of December 31, 2022 and 2021, the remaining deferred revenue was $1.4 million related to the material right associated with discounted fostamatinib supply. For the years ended December 31, 2022, 2021 and 2020, there were no material revenues recognized associated with such outstanding deferred revenue. For the years ended December 31, 2022, 2021, and 2020, we recognized revenue of $2.6 million, $0.3 million and no revenue, respectively, related to delivery of drug products to Kissei. Medison Commercial and License Agreements In October 2019, we entered into two exclusive commercial and license agreements with Medison for the commercialization of fostamatinib for chronic ITP in Medison territory, pursuant to which we received a $5.0 million upfront payment with respect to the agreement in Canada. We accounted for the agreement made with an upfront payment under ASC 606 and identified the following combined performance obligations at inception of the agreement: (a) granting of the license and (b) obtaining regulatory approval in Canada of fostamatinib in ITP. We determined that the non-refundable upfront fee of $5.0 million represented the transaction price. However, under the agreement, we have the option to buy back all rights to the product in Canada within six months from obtaining regulatory approval for the treatment of AIHA in Canada. The buyback option precludes us from transferring control of the license to Medison under ASC 606. We believe that the buyback provision, if exercised, will require us to repurchase the license at an amount equal to or more than the upfront $5.0 million. As such this arrangement is accounted for as a financing arrangement. Interest expense was accreted on such liability over the expected buyback period. No interest was accreted during the year ended December 31, 2022 and 2020. During the year ended December 31, 2021, we accreted $0.4 million of interest related to this financing arrangement. We also billed Medison for the delivery of fostamatinib supplies for clinical use which we deferred and included within the outstanding financing liability considering the buy-back provision. The decision to exercise the buyback option is dependent of many factors including management’s cost and benefit assessments and the success of obtaining regulatory approval for the treatment of AIHA in Canada. In June 2022, we reported the top-line results from our Phase 3 trial of fostamatinib in wAIHA which showed that the trial did not demonstrate statistical significance in the primary efficacy endpoint in the overall study population. We also announced in early October 2022 that we do not expect to file an sNDA for wAIHA indication considering the top-line data results and the guidance received from the FDA. With these recent developments, we assessed our options path forward, including our buyback option right with regards to the Medison license agreement. Based on management’s assessment, it is highly remote that we will exercise our buyback option right. As such, we relieved the outstanding financing liability to Medison amounting to $5.7 million in the fourth quarter of 2022 and recognized such amount as collaboration revenue in accordance with ASC 606 in the year ended December 31, 2022. As of December 31, 2022, no outstanding financing liability to Medison. T In August 2021, Medison Israel received the licenses for registrational approval from the Ministry of Health. Pursuant to the exclusive commercial and license agreement, this event triggered the first milestone that is the regulatory approval of the product in Israel for the first indication, for a non-refundable payment of $0.1 million. We recognized this amount as revenue during the year ended December 31, 2021. Knight Commercial License and Supply Agreement In May 2022, we entered into commercial license and supply agreements with Knight for the commercialization of fostamatinib for approved indications in Knight territory. Pursuant to such commercial license agreement, we received a $2.0 million one-time, non-refundable, and non-creditable upfront payment, with potential for up to an additional $20.0 million in regulatory and sales-based commercial milestone payments, and will receive twenty- to mid-thirty percent, tiered, escalated net-sales based royalty payments for products sold in the Knight territory. We accounted for this agreement under ASC 606 and identified that the upfront payment was a consideration for granting Knight the license to commercialize fostamatinib for approved indication in the Knight territory, and no further material deliverables associated to such upfront payment. As such, we recognized the upfront payment as revenue during the second quarter of 2022. Variable consideration related to future regulatory milestones was fully constrained because we cannot conclude that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur, given the inherent uncertainty of success with these future milestones. For sales-based milestones and royalties, we determined that the license is the predominant item to which the royalties or sales-based milestones relate to. Accordingly, we will recognize revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all the royalty has been allocated has been satisfied (or partially satisfied). We will re-evaluate the transaction price in each reporting period and as uncertain events are resolved or other changes in circumstances occur. We are also responsible for the exclusive manufacture and supply of fostamatinib for all future development and commercialization activities under agreement. Daiichi Collaboration Agreement Pursuant to the Amended Collaboration Agreement dated April 20, 2005 with Daiichi, during the years ended December 31, 2021 and 2020, we recognized $1.8 million and $2.1 million, respectively, of revenue related to the achievement of certain milestones. All deliverables under the agreement had been previously delivered, and as such the above had been recognized as revenue in the corresponding periods such milestones were achieved. Other license agreements In February 2021, we entered into a non-exclusive license agreement with an unrelated third party whereby we granted such unrelated third-party rights to a certain patent. In consideration for the license rights granted, we received a one-time fee of $4.0 million. All the deliverables under the agreement had been delivered and the one-time fee was recognized as revenue Government Contract - US Department of Defense’s JPEO-CBRND In January 2021, we were awarded up to $16.5 million by the US Department of Defense to support our ongoing Phase 3 clinical trial to evaluate the safety and efficacy of fostamatinib for the treatment of hospitalized high-risk patients with COVID-19. The amount of award we will receive from the US Department of Defense is subject to submission of proper documentation as evidence of completion of certain clinical trial events or milestones as specified in the agreement, and approval by the US Department of Defense that such events or milestones have been met. We determined that this government award should be accounted for under IAS 2, Accounting for Government Grants and Disclosure of Government Assistance, License and Transition Services Agreement with Forma On July 27, 2022, we entered into a license and transition services agreement with Forma for an exclusive license to develop, manufacture and commercialize olutasidenib, Forma’s proprietary inhibitor of mIDH1, for any uses worldwide, including for the treatment of AML and other malignancies. Pursuant to the terms of the license and transition services agreement, we paid Forma an upfront fee of $2.0 million, with the potential to pay up to $67.5 million of additional payments upon achievement of specified development and regulatory milestones and up to $165.5 million of additional payments upon achievement of certain commercial milestones. The potential development and regulatory milestone payments of $67.5 million include a $2.5 million payment upon achievement of a certain near-term regulatory milestone, a $5.0 million payment upon the first regulatory approval of the licensed product, and $10.0 million payment upon the licensed product’s first commercial sale subject to certain other conditions. In addition, subject to the terms and conditions of the license and transition services agreement, Forma would be entitled to tiered royalty payments on net sales of licensed products at percentages ranging from low-teens to mid-thirties, as well as certain portion of our sublicensing revenue, subject to certain standard reductions and offsets. The transaction was accounted for as an acquisition of asset under ASC 730, Research and Development At the acquisition date, the acquired license asset was accounted for as IPR&D, and we do not anticipate any economic benefit to be derived from such acquired licensed asset other than the primary indications. As such, we accounted for the upfront fee of $2.0 million paid to Forma Under the accounting guidance, contingent cash payments will be accrued when it is probable that a liability has been incurred and the amount can be reasonably estimated. We will account for m million was recorded within accounts payable in our balance sheet. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2022 | |
STOCK-BASED COMPENSATION | |
STOCK-BASED COMPENSATION | 5. 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, 2022 2021 2020 Selling, general and administrative $ 10,217 $ 7,337 $ 5,223 Research and development 2,168 1,700 2,072 Restructuring charges — 449 — Total stock-based compensation expense $ 12,385 $ 9,486 $ 7,295 Stock-based compensation expense for the years ended December 31, 2022 and 2021 include incremental charges of $1.4 million and $0.4 million, respectively, related to stock option modifications. In November 2021, we announced a reduction of workforce, primarily in the research organization and entered in severance agreements with certain affected employees, which provided, among others, extension of the date through which certain affected employees can exercise their vested options. In March 2022, our Board of Directors approved to extend the exercise period of stock option grants made to our two former Board of Directors whose terms expired in May 2022. In October 2022, our Board of Directors approved to accelerate the vesting and extend the exercise period of certain stock option grants made to a former officer who retired in October 2022. The incremental compensation expenses were computed based on the fair values of the modified awards on the modification date. As a result of these stock option modifications, we recorded the incremental stock-based compensation expense for each of the respective periods. The incremental stock-based compensation expense related to the modification of stock options of our two former Board of Directors and former officer were recorded within sales, general and administrative expense, and the modification of stock options of certain affected employees due to workforce reduction were recorded within restructuring charges. Equity Incentive Plans granted stock options and RSUs under our Equity Incentive Plans. to the number of shares of common stock authorized for issuance under our 2018 Plan, and such shares were registered in the Registration Statement filed in August 2022 Stock Options and RSUs The following table summarizes stock options and RSUs activity, and shares available for grant under our Equity Incentive Plans for the periods presented: Stock Options RSUs Weighted Weighted Weighted Average Shares Available Number of Average Intrinsic Value Number of Grant Date For Grant Shares Exercise Price (in thousands) Shares Fair Value Outstanding as of December 31, 2021 10,715,312 30,008,665 $ 3.13 $ 6,812 226,250 $ 3.67 Authorized for grant 7,080,000 Granted (9,880,277) 8,179,113 $ 1.96 1,181,362 $ 2.36 Exercised/Released — (433,318) $ 2.23 (216,250) $ 3.59 Cancelled and forfeited 2,697,583 (3,058,187) $ 4.54 (87,709) $ 2.42 Outstanding as of December 31, 2022 10,612,618 34,696,273 $ 2.74 $ 1,605 1,103,653 $ 2.39 Vested and Expected to Vest as of December 31, 2022 32,473,773 $ 2.73 $ 1,493 Exercisable as of December 31, 2022 22,669,120 $ 2.91 $ 2 Of the total stock options outstanding as of December 31, 2022, 2,222,500 shares outstanding are performance-based stock options wherein the achievements of the corresponding corporate-based milestones were not probable. Accordingly, the related grant date fair value for these performance-based stock options of $4.3 million has not been recognized as stock-based compensation expense as of December 31, 2022. For the years ended December 31, 2022, 2021 and 2020, stock options vested were 5,280,235 shares, 4,765,814 shares and 4,386,910 shares, respectively, with weighted-average exercise price of $2.60 per share, $2.67 per share, and $2.41 per share, respectively. The aggregate intrinsic values of stock options outstanding, vested and expected to vest, and exercisable For the years ended December 31, 2022, 2021 and 2020, we granted options to purchase 8,179,113 shares, 6,997,981 shares and 8,462,090 shares, respectively, of common stock, with The following table summarizes the weighted-average assumptions relating to stock options granted during the periods presented: Year Ended December 31, 2022 2021 2020 Risk-free interest rate 2.6 % 1.0 % 1.2 % Expected term (in years) 6.3 6.4 6.5 Dividend yield 0.0 % 0.0 % 0.0 % Expected volatility 74.8 % 70.5 % 66.1 % As of December 31, 2022, there was approximately $14.1 million of unrecognized stock-based compensation cost which is expected to be recognized over the remaining weighted-average period of 2.55 Details of our stock options by exercise price are as follows as of December 31, 2022: Options Outstanding Options Exercisable Weighted-Average Number of Remaining Contractual Weighted-Average Number of Weighted-Average Exercise Price Shares Life (in years) Exercise Price Shares Exercise Price $0.90 - $2.00 7,143,200 7.54 $ 1.55 4,222,496 $ 1.95 $2.01 - $2.34 5,979,493 4.78 $ 2.20 5,143,388 $ 2.18 $2.37 - $2.40 495,000 4.90 $ 2.39 457,500 $ 2.39 $2.42 - $2.42 6,189,723 8.14 $ 2.42 2,502,752 $ 2.42 $2.44 - $3.52 4,982,149 5.56 $ 2.94 3,339,194 $ 2.92 $3.54 - $3.68 5,864,451 6.28 $ 3.60 3,108,284 $ 3.62 $3.71 - $6.51 4,042,257 4.09 $ 4.69 3,895,506 $ 4.70 $0.90 - $6.51 34,696,273 6.24 $ 2.74 22,669,120 $ 2.91 Employee Stock Purchase Plan Our Purchase Plan permits eligible employees to purchase common stock at a discount through payroll deductions during defined offering periods. Our Purchase Plan provides for a 24-month offering period comprised 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. Our previous 24-month offering period under our Purchase Plan ended on June 30, 2022, and a new 24-month offering period started on July 1, 2022. The fair value of awards under our Purchase Plan is estimated on the date of our new offering period using the Black-Scholes option pricing model, which is being amortized over the requisite service periods. The table below summarizes the weighted-average assumptions related to our Purchase Plan for periods presented. 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 US Treasury constant maturity rates. Year Ended December 31, 2022 2021 2020 Risk-free interest rate 3.1 % * 1.0 % Expected term (in years) 1.3 * 1.6 Dividend yield 0.0 % * 0.0 % Expected volatility 121.0 % * 62.3 % * Not a measurement period since the last two-year offering period started on January 1, 2020, and there was no reset in 2021. The weighted average fair value of awards under our Purchase Plan at the measurement period during the year ended December 31, 2022 and 2020 was $0.78 per share and $0.87 per share, respectively. As of December 31, 2022, unrecognized stock-based compensation cost related to our Purchase Plan amounted to $0.9 million, which is expected to be recognized over the remaining weighted average period of 0.99 For the years ended December 31, 2022, 2021 and 2020, there were 1,146,851 shares, 932,018 shares and 567,391 shares, respectively, of common stock purchased under the Purchase Plan, at an average price of $1.01 per share, $1.51 per share and $1.54 per share, respectively. As of December 31, 2022, there were 3,437,633 shares reserved for future issuance under the Purchase Plan. |
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 31, 2022 | |
INVENTORIES | |
INVENTORIES | 6 INVENTORIES The following table summarizes inventories, net (in thousands): As of December 31, 2022 2021 Raw materials $ 4,555 $ 5,142 Work in process 2,659 162 Finished goods 1,904 1,312 Total $ 9,118 $ 6,616 As of December 31, 2022, finished goods inventories include inventory quantities acquired from Forma, pursuant to the terms of the license and transition agreement. As of December 31, 2022, we have $0.8 million in advance payments to the manufacturer of our raw materials, which was included within prepaid and other current assets in the balance sheet. |
CASH, CASH EQUIVALENTS AND SHOR
CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS | 12 Months Ended |
Dec. 31, 2022 | |
CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS | |
CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS | 7. CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS Cash, cash equivalents and short-term investments consisted of the following (in thousands): As of December 31, 2022 2021 Cash $ 6,264 $ 6,249 Money market funds 4,155 6,842 US treasury bills 5,225 35,366 Government-sponsored enterprise securities 15,796 14,678 Corporate bonds and commercial paper 26,766 61,832 $ 58,206 $ 124,967 Reported as: Cash and cash equivalents $ 24,459 $ 18,890 Short-term investments 33,747 106,077 $ 58,206 $ 124,967 Cash equivalents and short-term investments include the following securities with gross unrealized gains and losses (in thousands): Gross Gross Amortized Unrealized Unrealized As of December 31, 2022 Cost Gains Losses Fair Value US treasury bills $ 5,251 $ — $ (26) $ 5,225 Government-sponsored enterprise securities 15,882 1 (87) 15,796 Corporate bonds and commercial paper 26,807 — (41) 26,766 Total $ 47,940 $ 1 $ (154) $ 47,787 Gross Gross Amortized Unrealized Unrealized As of December 31, 2021 Cost Gains Losses Fair Value US treasury bills $ 35,416 $ — $ (50) $ 35,366 Government-sponsored enterprise securities 14,705 — (27) 14,678 Corporate bonds and commercial paper 61,857 2 (27) 61,832 Total $ 111,978 $ 2 $ (104) $ 111,876 As of December 31, 2022 and 2021, our cash equivalents and short-term investments had a weighted-average time to maturity of approximately 89 days and 96 days, respectively. Our short-term investments are classified as available-for-sale securities. Accordingly, we have classified certain securities as short-term investments on our balance sheets as they are available for use in the current operations. 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): As of December 31, 2022 Fair Value Unrealized Losses US treasury bills $ 5,225 $ (26) Government-sponsored enterprise securities 14,322 (87) Corporate bonds and commercial paper 26,766 (41) Total $ 46,313 $ (154) |
FAIR VALUE
FAIR VALUE | 12 Months Ended |
Dec. 31, 2022 | |
FAIR VALUE | |
FAIR VALUE | 8. FAIR VALUE Assets at Fair Value as of December 31, 2022 Level 1 Level 2 Level 3 Total Money market funds $ 4,155 $ — $ — $ 4,155 US treasury bills — 5,225 — 5,225 Government-sponsored enterprise securities — 15,796 — 15,796 Corporate bonds and commercial paper — 26,766 — 26,766 Total $ 4,155 $ 47,787 $ — $ 51,942 Assets at Fair Value as of December 31, 2021 Level 1 Level 2 Level 3 Total Money market funds $ 6,842 $ — $ — $ 6,842 US treasury bills — 35,366 — 35,366 Government-sponsored enterprise securities — 14,678 — 14,678 Corporate bonds and commercial paper — 61,832 — 61,832 Total $ 6,842 $ 111,876 $ — $ 118,718 |
OTHER BALANCE SHEET COMPONENTS
OTHER BALANCE SHEET COMPONENTS | 12 Months Ended |
Dec. 31, 2022 | |
OTHER BALANCE SHEET COMPONENTS | |
OTHER BALANCE SHEET COMPONENTS | 9. OTHER BALANCE SHEET COMPONENTS Property and equipment Property and equipment consist of the following (in thousands): As of December 31, 2022 2021 Laboratory equipment $ 7,435 $ 12,154 Computer and software 2,048 1,783 Furniture and equipment 2,107 2,107 Fixed assets in progress 74 691 Total property and equipment 11,664 16,735 Less accumulated depreciation and amortization (10,807) (14,551) Property and equipment, net $ 857 $ 2,184 Total depreciation and amortization expense was $0.9 million, $1.2 million and $0.7 million for the years ended December 31, 2022, 2021 and 2020, respectively. During the year ended December 31, 2022, we wrote down certain property and equipment amounting to $0.7 million associated with our leased facility which expired in January 2023, and recognized such amount within selling, general and administrative expense. Intangible asset Intangible asset pertain to amortized cost of capitalized milestone payment obligations to Forma, incurred upon and after regulatory approval of an acquired product. See “Note 4 - Sponsored Research and License Agreements and Government Contract” for related discussions. Such costs are being amortized on a straight-line basis over the estimated useful life of approximately 14 years. For the year ended December 31, 2022, we recorded amortization expense of approximately $0.1 million, which was included within cost of sales in the statements of operations. The following table presents the estimated future amortization expense of intangible asset (in thousands): For the year ending December 31, 2023 $ 1,071 2024 1,071 2025 1,071 2026 1,071 2027 1,071 Thereafter 9,594 $ 14,949 Other accrued liabilities Other accrued liabilities consist of the following (in thousands): As of December 31, 2022 2021 Accrued commercial expenses $ 3,144 $ 1,949 Accrued other expenses 3,341 2,827 Total other accrued liabilities $ 6,485 $ 4,776 |
DEBT
DEBT | 12 Months Ended |
Dec. 31, 2022 | |
DEBT | |
DEBT | 10. DEBT We have a Credit Agreement with MidCap entered on September 27, 2019 (Closing Date) and amended on March 29, 2021 (First Amendment), February 11, 2022 (Second Amendment) and July 27, 2022 (Third Amendment). The Credit Agreement provides for a $60.0 million term loan credit facility. At the Closing Date, $10.0 million was funded (Tranche 1), in May 2020, an additional $10.0 million term funded (Tranche 2), at the Second Amendment, an additional $10.0 million was funded (Tranche 3), and at the Third Amendment, an additional $10.0 million was funded (Tranche 4). As of December 31, 2022, the outstanding principal balance of the loan was $40.0 million, and the facility gives us the ability to access an additional $20.0 million aggregate principal amount of term loan at our option through March 31, 2023 (Tranche 5). The First Amendment to the Credit Agreement entered in March 2021 extended the period through which Tranche 3 was available to us. The Second Amendment to the Credit Agreement entered in February 2022, among other things, amended the applicable funding conditions, applicable commitments and certain other terms relating to available credit facilities (Tranches 3 and 4), added additional term loan credit facility (Tranche 5), and revised certain terms related to the financial covenants. Prior to the Third Amendment, the outstanding principal balance of the loan bore interest at an annual rate of one-month LIBOR, or a comparable applicable index rate determined pursuant to the Credit Agreement if the LIBOR is no longer available, (second interest-only extension) upon the satisfaction of certain conditions set forth in the Credit Agreement. In June 2021 and June 2022, we satisfied the first and second interest-only extension conditions, respectively, which effectively extended the interest-only period through October 1, 2023. All unpaid principal and accrued interest are due and payable no later than September 1, 2024. A final payment fee of Following the Third Amendment, the maturity date for the term loans was extended to September 1, 2026, and the interest-only period was extended to October 1, 2024. Further, the interest rate benchmark was changed from LIBOR to SOFR. The interest rate applicable to the term loans under the amended Credit Agreement is the sum of one-month SOFR, plus an adjustment of 0.11448% , subject to 1.50% applicable floor, plus applicable margin of 5.65% . A U nder the amended Credit Agreement, the prepayment fee applicable to the term loans was reset at the Third Amendment date. We The amendment to the Credit Agreement was accounted for as debt modification. As such, fees paid to Midcap of $0.4 million were recorded as additional debt discount and added to the unamortized debt discount that are being amortized as interest expense through maturity using the effective interest rate method. Debt issuance costs are recorded as a direct deduction from the outstanding principal balance of the term loan. As December 31, 2022 and 2021, the unamortized issuance costs and debt discounts amounted to $0.6 million and $0.1 million, respectively. As of December 31, 2022 and 2021, the outstanding balance of the loan, net of unamortized debt discount was classified as long-term liability in the accompanying balance sheet. Interest expense, including amortization of the debt discount and accretion of the final fees related to the Credit Agreement for the years ended December 31, 2022, 2021 and 2020 were $3.0 million, $1.7 million and $1.4 million, respectively. Accrued interest of $0.8 million was included within other accrued liabilities in the balance sheet as of December 31, 2022. The following table presents the future minimum principal payments of the outstanding loan as of December 31, 2022 (in thousands): For the year ending December 31, 2023 $ — 2024 5,000 2025 20,000 2026 15,000 Principal amount (Tranches 1, 2, 3 and 4) $ 40,000 The amended Credit Agreement contains certain covenants which, among others, require us to deliver financial reports at designated times of the year and maintain minimum unrestricted cash and trailing net revenues. As of December 31, 2022, we were not in violation of any covenants. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2022 | |
LEASES | |
LEASES | 11. LEASES We had a lease agreement with a landlord, Healthpeak Properties, Inc. (formerly known as HCP BTC, LLC), to occupy approximately 147,000 square feet of research and office space located in South San Francisco, California, wherein the lease expired in January 2023. We also had a sublease agreement with an unrelated third-party to sublet a portion of the leased facility of approximately 66,000 square feet, wherein the sublease expired in January 2023. On October 28, 2022, we entered into a sublease agreement with Atara to sublease approximately 13,670 rentable square feet of office space located in South San Francisco, California. Subject to the terms of the sublease agreement, the lease term commenced in November 2022 and shall expire in May 2025. This new leased facility is currently held as our new Headquarters following the expiration of our previous leased facility. In accordance with ASC 842, Leases , at lease measurement date, we recognized the operating lease right-of-use asset and lease liability of approximately $1.3 million. The amount recognized as operating right-of-use lease asset and lease liability represents the present value of the future minimum lease payments over the term of the lease, measured using our incremental borrowing rate. As of December 31, 2022, we recorded $0.7 million of lease incentives from our previous leased facility and $0.2 million from our sublease with Atara, which we recorded as reductions to the operating lease right-of-use assets. The weighted average remaining term of our leases as of December 31, 2022 was 2.50 The components of our operating lease expense were as follows (in thousands): Year Ended December 31, 2022 2021 2020 Fixed operating lease expense $ 5,470 $ 5,360 $ 5,360 Variable operating lease expense 818 910 926 Total operating lease expense $ 6,288 $ 6,270 $ 6,286 Supplemental information related to our operating lease expense was as follows (in thousands): Year Ended December 31, 2022 2021 2020 Cash payments included in the measurement of operating lease liabilities $ 10,485 $ 10,082 $ 9,694 Supplemental information related to our operating sublease was as follows (in thousands): Year Ended December 31, 2022 2021 2020 Fixed sublease expense $ 4,381 $ 4,381 $ 4,381 Variable sublease expense 911 917 962 Sublease income (5,292) (5,298) (5,343) Net $ — $ — $ — The following table presents the future minimum lease payments of our operating lease liabilities as of December 31, 2022 (in thousands): Operating Lease Sublease Receipts Net For year ending December 31, 2023 $ 1,534 $ (394) $ 1,140 2024 739 — 739 2025 301 — 301 Total minimum payments required $ 2,574 $ (394) $ 2,180 |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2022 | |
STOCKHOLDERS' EQUITY | |
STOCKHOLDERS' EQUITY | 12. STOCKHOLDERS’ EQUITY Preferred Stock We are authorized to issue 10,000,000 shares of preferred stock. As of December 31, 2022 and 2021, 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. Common Stock Our Certificate of Incorporation as amended and restate in May 2018, authorizes us to issue 400,000,000 shares of common stock. Open Market Sale Agreement In August 2020, we entered into an Open Market Sale Agreement with Jefferies, as our sole sales agent pursuant to which we may sell from time to time, through Jefferies, shares of our common stock in sales deemed to be “at-the-market offerings” as defined in Rule 415 under the Securities Act, subject to conditions specified in the Open Market Sale Agreement, including maintaining an effective registration statement covering the sale of shares under the Open Market Sale Agreement. In April 2021, the registration statement registering the sale of shares under the Open Market Sale Agreement expired. From the time of implementation of the Open Market Sale Agreement through expiration of the registration statement, no sales of shares occurred. On August 3, 2021, we filed a new automatic shelf registration statement as a qualified WKSI, such term as defined in Rule 405 of the Securities Act. The automatic shelf registration statement was filed to register, among other securities, the sale of up to a maximum aggregate offering price of $100.0 million of shares of our common stock that may be issued and sold from time to time under the Open Market Sale Agreement; and a base prospectus which covers the offering, issuance, and sale by us of the securities identified from time to time in one or more offerings . On March 1, 2022, we filed a post-effective amendment to the automatic shelf registration statement immediately after filing our Annual Report on Form 10-K for the year ended December 31, 2021, because we no longer qualified as a WKSI upon filing of such Annual Report. The post-effective amendment was declared effective on May 3, 2022. The post-effective amendment registers, among other securities, |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2022 | |
INCOME TAXES | |
INCOME TAXES | 13. INCOME TAXES For the years ended December 31, 2022 and 2020, we did not recognize provision for income taxes due to our pre-tax book losses and a full valuation allowance was recorded against our deferred tax assets. For the year ended December 31, 2021, we recorded provision for income tax of $0.6 million. This provision for income tax was related to the state tax liability primarily due to revenue recognized for the Lilly Agreement. We did not have federal income taxes due to the sufficient NOL carryforwards that were generated prior to the enactment of the Tax Act, as well as significant research and development credit carryforwards. We continue to record a full valuation allowance on our deferred tax assets considering our cumulative losses in prior years and forecasted losses in the future. 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): As of December 31, 2022 2021 Deferred tax assets Net operating loss carryforwards $ 230,373 $ 229,364 Orphan drug and research and development credits 68,646 66,616 Capitalized research and development credits 15,680 150 Deferred revenue 11,234 16,297 Deferred compensation 9,620 8,819 Other, net 2,494 1,523 Lease liabilities 504 2,564 Deferred tax liabilities Operating lease right-of-use asset (461) (2,335) Others (439) (607) Total net deferred tax assets 337,651 322,391 Less: valuation allowance (337,651) (322,391) Deferred tax assets, net of allowance $ — $ — The reconciliation of the statutory federal income tax rate to the effective tax rate was as follows: Year Ended December 31, 2022 2021 2020 Federal statutory tax rate (21.0) % (21.0) % (21.0) % State, net of federal benefit 0.0 % 2.8 % 0.1 % Valuation allowance 20.2 % 27.5 % 24.4 % Stock compensation 2.5 % 5.6 % 4.7 % Orphan drug and research and development credits (2.6) % (14.0) % (12.7) % Other, net 1.0 % 2.7 % 4.6 % Effective tax rate 0.1 % 3.6 % 0.1 % 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 NOL carryovers and tax credits to offset future taxable income. Our existing NOL 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 NOL carryforwards to reflect the results of the Section 382 owner shift analysis as of December 31, 2022. We did not experience any significant changes in ownership in the periods presented. 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, 2022, we had NOL carryforwards for federal income tax purposes of approximately $976.4 million. Of the federal NOL carryforward, $837.9 million, which expire beginning in the year 2025 and the remaining NOL carryforwards can be carried forward indefinitely, subject to annual limitation of 80% of taxable income. We also had state NOL carryforwards of approximately $379.4 million, which expire beginning in the year 2028. We have general business credits of approximately $52.4 million, which will expire beginning in 2023, if not utilized, and is consisted of research and development credits and orphan drug credits. We also have state research and development tax credits of approximately $31.3 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, our deferred tax assets have been fully offset by valuation allowance considering our cumulative losses in prior years and forecasted losses in the future. The following table summarizes the activity related to our gross unrecognized tax benefits (in thousands): Year Ended December 31, 2022 2021 2020 Balance at the beginning of the year $ 9,186 $ 8,901 $ 8,358 Increase related to current year tax positions 240 285 543 Balance at the end of the year $ 9,426 $ 9,186 $ 8,901 During the years ended December 2022, 2021 and 2020, the amount of unrecognized tax benefits increased due to additional research and development and orphan drug credits generated during those years. The reversal of the uncertain tax benefits would not affect our effective tax rate to the extent that we continue to maintain a full valuation allowance against our deferred tax assets. We are subject to federal income tax and various state taxes. Because of NOL and research credit carryovers, substantially all of our tax years remain open to examination. Our policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. We currently have no |
RESTRUCTURING CHARGES
RESTRUCTURING CHARGES | 12 Months Ended |
Dec. 31, 2022 | |
RESTRUCTURING CHARGES. | |
RESTRUCTURING CHARGES | 14. RESTRUCTURING CHARGES In October 2022, we announced a reduction in our workforce primarily in our development and administration groups. In November 2021, we announced a reduction in our workforce primarily in the research organization. We recorded restructuring charges of $3.5 million in the statements of operations for the year ended December 31, 2021, comprised $2.9 million cash severance, bonus and related employee benefits and taxes of affected employees, $0.4 million of stock-based compensation expense related to option modification and $0.1 million impairment of certain property and equipment which was recorded within depreciation expense As of December 31, 2021, we had approximately $2.2 million outstanding unpaid cash severance, bonus and related employee benefits and taxes included within accrued compensation in the balance sheet, which were paid in the first quarter of 2022. |
DESCRIPTION OF BUSINESS AND S_2
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation | Basis of Presentation The accompanying financial statements have been prepared in accordance with United States generally accepted accounting principles (US GAAP). Any reference in these notes to applicable accounting guidance is meant to refer to the authoritative US GAAP included in the Accounting Standards Codification (ASC), and Accounting Standards Update (ASU) issued by the Financial Accounting Standards Board (FASB). We manage our operations as one business segment for purposes of assessing performance, making operating decisions, and allocating resources. |
Liquidity | Liquidity As of December 31, 2022, we had approximately $58.2 million in cash, cash equivalents and short-term investments. Since inception, we have financed our operations primarily through sales of equity securities, debt financing arrangement, contract payments under our collaboration agreements and from product sales. Based on our current operating plan, we believe that our existing cash, cash equivalents, and short-term investments will be sufficient to fund our expenses and capital expenditure requirements through at least the next 12 months from the date of issuance of this Annual Report on Form 10-K. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with US 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 revenue recognition on product sales and collaboration agreements, recoverability of our assets, including accounts receivables and inventories, stock-based compensation and the probability of achievement of corporate performance-based milestones for our performance-based stock option awards, impairment issues, the weighted average incremental borrowing rate for our lease, estimated interest rate for our financing liability, the estimated useful life of assets, and estimated accruals, particularly research and development accruals, on an ongoing basis. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. To the extent there are material differences between these estimates and actual results, our financial statements will be affected. |
Reclassifications | Reclassifications |
Revenue Recognition | Revenue Recognition We recognize revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers Product Sales Revenues from product sales are recognized when the specialty distributors, who are our customers, obtain control of our product, which occurs at a point in time, upon delivery to such specialty distributors. These specialty distributors subsequently resell our products to specialty pharmacy providers, health care providers, hospitals and clinics. In addition to distribution agreements with our specialty distributors, we also have arrangements with certain specialty pharmacy providers, in-office dispensing providers, group purchasing organizations, and government entities that provide for government-mandated and/or privately-negotiated rebates, chargebacks and discounts with respect to the purchase of our products. Under ASC 606, we are required to estimate the transaction price, including variable consideration that is subject to a constraint, in our contracts with our customers. Variable consideration is included in the transaction price to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur. Revenue from product sales is recorded net of certain variable consideration which includes estimated government-mandated rebates and chargebacks, distribution fees, estimated product returns and other deductions. Provisions for returns and other adjustments are provided for in the period the related revenue is recorded. Actual amounts of consideration ultimately received may differ from our estimates. If actual results in the future vary from our estimates, we will adjust these estimates, which would affect net product revenue and earnings in the period such variances become known. The following are our significant categories of sales discounts and allowances: Sales Discounts . We provide certain customer a prompt payment discount that is explicitly stated in our contract. The sales discount is recorded as a reduction of revenue in the period the related product revenue is recognized. Product Returns. Government and Private Payor Rebates: Chargebacks and Discounts: Chargebacks for fees and discounts represent the estimated obligations resulting from contractual commitments to sell products to certain specialty pharmacy providers, in-office dispensing providers, group purchasing organizations, and government entities at prices lower than the list prices charged to our specialty distributors who directly purchase the product from us. These specialty distributors charge us for the difference between what they pay for the product and our contracted selling price to these specialty pharmacy providers, in-office dispensing providers, group purchasing organizations, and government entities. These reserves are established in the same period that the related revenue is recognized, resulting in a reduction of product revenue. Actual chargeback amounts are generally determined at the time of resale to the specialty pharmacy providers, in-office dispensing providers, group purchasing organizations, and government entities by our specialty distributors. The estimated obligations arising from these chargebacks and discounts are recorded as revenue reserves within other accrued liabilities in the balance sheet. Co-Payment Assistance: Contract Revenues from Collaborations In the normal course of business, we conduct research and development programs independently and in connection with our corporate collaborators, pursuant to which we license certain rights to our intellectual property to third parties. The terms of these arrangements typically include payment to us for a combination of one or more of the following: upfront license fees; development, regulatory and commercial milestone payments; product supply services; and royalties on net sales of licensed products. Upfront License Fees: For arrangements that require us to share in the development costs but to which we do not participate in the co-development work, the portion of the upfront fee attributed to our share in the future development costs is excluded from the transaction price. If such share in the development costs is payable beyond 12 months from the delivery of the corresponding license, a significant financing component is deemed to exist. If a significant financing component is identified, we adjust the transaction price by reducing the upfront fee by the net present value of our share in future development costs over the expected commitment period. Such discounted amount will be reported as a liability in the balance sheet, with a corresponding interest expense being accreted based on a discount rate applied over the expected commitment period. Development, Regulatory or Commercial Milestone Payments: Product Supply Services: Sales-based Milestone Payments and Royalties: |
Government Contract | Government Contract In January 2021, we were awarded up to $16.5 million by the US Department of Defense’s Joint Program Executive Office for Chemical, Biological, Radiological and Nuclear Defense (referred to here as the US Department of Defense) to support our ongoing Phase 3 clinical trial to evaluate the safety and efficacy of fostamatinib for the treatment of hospitalized high-risk patients with COVID-19. We determined that the government award should be accounted for under IAS 20, Accounting for Government Grants and Disclosure of Government Assistance, |
Stock-based Compensation | Stock-based Compensation Share-based awards are valued at fair value on the date of grant and that fair value is recognized over the requisite service period, which is generally the vesting period of the respective award. We use the straight-line attribution method over the requisite employee service period for the entire award in recognizing stock-based compensation expense. We account for forfeitures as they occur. The fair value of each option award is estimated on the date of grant using the Black-Scholes option pricing model. The model requires management to make a number of assumptions including expected volatility, expected term, risk-free interest rate and expected dividends. A number of these assumptions are subjective, and their determination generally require judgment. We segregate 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 determine the weighted-average valuation assumptions separately for each of these groups as follows: ● Volatility – We estimate 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 consider 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 – We analyze various historical data to determine the applicable expected term for each of the other option groups. This data includes: (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 non-vested 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 gives us reasonable estimates of the expected term for each employee group. We also consider 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 consider the optionee type (i.e., officers and directors or all other employees) and other factors that may affect the expected term of the option. For options granted to consultants, we use the contractual term of the option, which is generally 10 years, for the initial valuation of the option and the remaining contractual term of the option for the succeeding periods. ● Risk-free interest rate – The risk-free interest rate is based on US 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. We grant performance-based stock options to purchase shares of our common stock which will vest upon the achievement of certain corporate performance-based milestones. We determine 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 grant date fair values 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 re-evaluation at each reporting date, 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. The fair value of the RSU grant is based on the market price of our common stock on the date of grant. |
Accounts Receivable | Accounts Receivable Accounts receivable are recorded net of customer allowances for prompt payment discounts and any allowance for doubtful accounts. We monitor the financial performance and creditworthiness of our customers so that we can properly assess and respond to changes in their credit profile. We will reserve against our accounts receivable for estimated losses that may arise from a customer’s inability to pay. We have historically not experienced significant credit losses and no amounts were reserved for estimated losses as of the balance sheet dates presented. The following table summarizes the activity of our customer allowances for prompt payment discounts for the periods presented (in thousands): Year Ended December 31, 2022 2021 2020 Balance at the beginning of the year $ 106 $ 171 $ 109 Provision for prompt payment discount 557 609 807 Reduction in prompt payment discount (527) (674) (745) Balance at end of the year $ 136 $ 106 $ 171 |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject us to a concentration of credit risk are primarily cash, investment in debt securities and accounts receivable. All of our cash and investment in debt securities are maintained with financial institutions that management believes are creditworthy. By policy, we limit the concentration of credit risk by diversifying our investments among a variety of high credit-quality issuers. 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. We have not historically experienced any significant credit losses related to these financial instruments and do not believe that we are exposed to any significant credit risk related to these instruments. Concentration of credit risk with respect to our accounts receivable is limited due to our small number of customers. Our accounts receivable consists mostly of outstanding invoices from our sale of our product to our specialty distributors. Accounts receivable may also include outstanding invoice or invoices from our collaboration partners with respect to the related sponsored research and license agreements, as well as outstanding invoice or invoices from the US Government with respect to the related government contract. Our outstanding receivable as of December 31, 2022 includes $20.0 million of regulatory milestone due from Kissei which was collected in January 2023. As of December 31, 2022, 49% of our accounts receivable are outstanding invoices from our specialty distributors, and the remaining 51% are outstanding invoices from other collaboration partners, mainly Kissei and Grifols. As of December 31, 2021, 85% of our accounts receivable consisted of outstanding invoices from our specialty distributors, and the remaining 15% are outstanding invoices from the US Government and from other collaboration partners, mainly Grifols and Kissei. See “Note 3 - Revenues” for summary of revenues from each of our customers who individually accounted for 10% or more of the total net product sales and revenues from collaborations. |
Cash, Cash Equivalents and Short-Term Investments | Cash, Cash Equivalents and Short-Term Investments Our investment in debt securities consists of money market funds, US treasury bills, government- sponsored enterprise securities, and corporate bonds and commercial paper. All of our investment in debt securities are available-for-sale and are classified based on their maturities. We consider all highly liquid investments in debt securities with maturity of 90 days or less from the date of purchase to be cash equivalents. All other investments with maturity greater than 90 days from the date of purchase are classified as short-term investments. Unrealized gains (losses) are reported within the statements of stockholders’ equity (deficit) and comprehensive income (loss). The cost of securities sold is based on the specific identification method. We periodically evaluate our available-for-sale marketable debt securities for impairment. When the fair value of a marketable debt security is below its amortized cost, the amortized cost is reduced to its fair value if it is more likely than not that we are required to sell the impaired security before recovery of our amortized cost basis, or we have the intention to sell the security. If neither of these conditions are met, we determine whether the impairment is due to credit losses by comparing the present value of the expected cash flows of the security with its amortized cost basis. The amount of impairment recognized is limited to the excess of the amortized cost over the fair value of the security. An allowance for credit losses for the excess of amortized cost over the expected cash flows is recorded in other income (expense), net on the statements of operations. Impairment losses that are not credit-related are included in accumulated other comprehensive income (loss) in stockholders’ equity (deficit). |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amounts of our financial instruments, including cash, accounts receivable, accounts payable and accrued liabilities, approximate fair value due to their relatively short maturities. The carrying value of our loans payable and other long-term debt approximates fair value based on management’s estimation that a current interest rate would not differ materially from the stated rate, or the discount rate applied. The fair value of our cash equivalents and short-term investments measured at fair value on a recurring basis and are categorized based upon the lowest level of significant input to the valuations. 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. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. ● 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 – 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, US 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. ● 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. |
Inventories and Cost of Product Sales | Inventories and Cost of Product Sales Inventories are stated at the lower-of-cost or estimated net realizable value. We determine the cost of inventories using the standard cost method, which approximates actual cost, and is valued using the first-in, first-out method. Inventory costs primarily consist of active pharmaceutical ingredients, third-party manufacturing costs and allocated internal overhead costs. We capitalize inventory costs when the product is approved by the FDA, or when based on management’s judgment, future commercialization was considered probable, and the future economic benefits are expected to be realized. Prior to FDA approval of a product, costs to purchase active pharmaceutical ingredients including costs to manufacture a product are charged to research and development expense when incurred. Our physical inventories as of balance sheet dates include inventory quantities where costs have been previously charged to research and development expenses since such costs were incurred prior to FDA approval of the product. We provide reserves for potential excess, dated or obsolete inventories based upon assumptions about future demand and market conditions, as well as product shelf life. Cost of product sales primarily includes cost of inventories sold, and product shipping and handling costs. Further, following the approval of REZLIDHIA, we recognize the amortization expense of capitalized intangible asset and royalty expense incurred pursuant to our license agreement with Forma, within cost of sales. |
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 |
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 expenses as incurred and at the time raw materials are purchased. We have various contracts with third parties related to our research and development activities. Costs that are incurred but not billed to us as of the end of the period are 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. Clinical trial contract expenses are accrued based on units of activity. 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 not related to our approved drug are charged to research and development expenses at the time of purchase. Research and development expenses also include milestone payment obligations incurred prior to r egulatory approval of the product, which are accrued when the event requiring payment of the milestone occurs. See related discussions below. |
Advertising Expense | Advertising costs are expensed as incurred and are included within selling general and administrative expenses in the statements of operations. Advertising costs for the years ended December 31, 2022, 2021 and 2020 amounted to $2.7 million, $2.3 million, and $1.7 million, respectively. |
IPR&D/Intangible Asset | IPR&D/Intangible Asset In July 2022, we entered into a license and transition services agreement with Forma. The transaction was accounted for as an acquisition of asset under ASC 730, Research and Development account for m ilestone payment obligations incurred at development stage and prior to a regulatory approval of an indication associated with the acquired licensed asset as research and development expenses when the event requiring payment of the milestone occurs. Milestone payment obligations incurred upon and after a regulatory approval of an indication associated with the acquired licensed asset, and at the commercial stage, will be recorded as intangible asset when the event requiring payment of the milestones occurs. The amount recorded as an intangible asset is amortized over the estimated useful life of the acquired licensed asset. See “Note 4 – Sponsored Research and License Agreements and Government Contract” for further discussion. |
Leases | Leases We account for leases in accordance with ASU No. 2016-02 , Leases (Topic 842) . Topic 842 requires a lessee to determine if an arrangement is a lease or contains a lease at contract inception. For our sublease agreement wherein we were the lessor, we recognized sublease income on a straight-line basis over the term of the related sublease agreement. |
Restructuring | Restructuring Restructuring costs comprised severance, other termination benefit costs, stock-based compensation expense for stock award and stock option modifications related to workforce reductions and accelerated depreciation. We recognize restructuring charges when the liability is probable, and the amount is estimable. Employee termination benefits are accrued at the date management has committed to a plan of termination and affected employees have been notified of their termination date and expected severance benefits. |
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. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently issued accounting guidance is either not applicable or did not have, or is not expected to have, a material impact on us. |
DESCRIPTION OF BUSINESS AND S_3
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Summary of customer allowances for prompt payment discounts | The following table summarizes the activity of our customer allowances for prompt payment discounts for the periods presented (in thousands): Year Ended December 31, 2022 2021 2020 Balance at the beginning of the year $ 106 $ 171 $ 109 Provision for prompt payment discount 557 609 807 Reduction in prompt payment discount (527) (674) (745) Balance at end of the year $ 136 $ 106 $ 171 |
NET LOSS PER SHARE (Tables)
NET LOSS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
NET LOSS PER SHARE | |
Schedule of antidilutive securities | The potential shares of common stock that were excluded from the computation of diluted net loss per share for the periods presented because including them would have been antidilutive are as follows (in thousands): Year Ended December 31, 2022 2021 2020 Outstanding stock options 34,696 30,009 27,260 RSUs 1,104 226 — Total 35,800 30,235 27,260 |
REVENUES (Tables)
REVENUES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
REVENUES | |
Schedule of revenues disaggregated by category | Revenues disaggregated by category were as follows (in thousands): Year Ended December 31, 2022 2021 2020 Product sales: Gross product sales $ 108,523 $ 81,186 $ 76,470 Discounts and allowances (31,805) (18,176) (14,774) Total product sales, net 76,718 63,010 61,696 Revenues from collaborations: License revenues 7,932 70,553 40,358 Development milestones 25,000 1,875 2,100 Research and development services and others 6,092 3,298 4,467 Total revenues from collaborations 39,024 75,726 46,925 Government contract 4,500 10,500 — Total revenues $ 120,242 $ 149,236 $ 108,621 |
Schedule of product revenue allowance and reserve categories | Chargebacks, Government Discounts and and Other Fees Rebates Returns Total Balance as of January 1, 2022 $ 3,404 $ 2,494 $ 2,017 $ 7,915 Provision related to current period sales 23,488 5,901 1,514 30,903 Credit or payments made during the period (20,679) (5,759) (235) (26,673) Balance as of December 31, 2022 $ 6,213 $ 2,636 $ 3,296 $ 12,145 Chargebacks, Government Discounts and and Other Fees Rebates Returns Total Balance as of January 1, 2021 $ 2,461 $ 2,115 $ 1,489 $ 6,065 Provision related to current period sales 10,731 5,036 1,021 16,788 Credit or payments made during the period (9,788) (4,657) (493) (14,938) Balance as of December 31, 2021 $ 3,404 $ 2,494 $ 2,017 $ 7,915 |
Schedule of revenues from product sales disaggregated by customers | The following table summarizes revenues from each of our customers who individually accounted for 10% or more (wherein * denotes less than 10%) of the total net product sales and revenues from collaborations: Year Ended December 31, 2022 2021 2020 McKesson Specialty Care Distribution Corporation 31% 20% 23% Kissei 24% * — Cardinal Healthcare 19% * * ASD Healthcare and Oncology Supply 17% 17% 30% Lilly * 48% — Grifols * * 41% |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
STOCK-BASED COMPENSATION | |
Schedule of 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, 2022 2021 2020 Selling, general and administrative $ 10,217 $ 7,337 $ 5,223 Research and development 2,168 1,700 2,072 Restructuring charges — 449 — Total stock-based compensation expense $ 12,385 $ 9,486 $ 7,295 |
Summary of weighted-average assumptions relating to options granted pursuant to equity incentive plans | Year Ended December 31, 2022 2021 2020 Risk-free interest rate 2.6 % 1.0 % 1.2 % Expected term (in years) 6.3 6.4 6.5 Dividend yield 0.0 % 0.0 % 0.0 % Expected volatility 74.8 % 70.5 % 66.1 % |
Schedule of option activity under equity incentive plans | Stock Options RSUs Weighted Weighted Weighted Average Shares Available Number of Average Intrinsic Value Number of Grant Date For Grant Shares Exercise Price (in thousands) Shares Fair Value Outstanding as of December 31, 2021 10,715,312 30,008,665 $ 3.13 $ 6,812 226,250 $ 3.67 Authorized for grant 7,080,000 Granted (9,880,277) 8,179,113 $ 1.96 1,181,362 $ 2.36 Exercised/Released — (433,318) $ 2.23 (216,250) $ 3.59 Cancelled and forfeited 2,697,583 (3,058,187) $ 4.54 (87,709) $ 2.42 Outstanding as of December 31, 2022 10,612,618 34,696,273 $ 2.74 $ 1,605 1,103,653 $ 2.39 Vested and Expected to Vest as of December 31, 2022 32,473,773 $ 2.73 $ 1,493 Exercisable as of December 31, 2022 22,669,120 $ 2.91 $ 2 |
Schedule of stock options by exercise price | Options Outstanding Options Exercisable Weighted-Average Number of Remaining Contractual Weighted-Average Number of Weighted-Average Exercise Price Shares Life (in years) Exercise Price Shares Exercise Price $0.90 - $2.00 7,143,200 7.54 $ 1.55 4,222,496 $ 1.95 $2.01 - $2.34 5,979,493 4.78 $ 2.20 5,143,388 $ 2.18 $2.37 - $2.40 495,000 4.90 $ 2.39 457,500 $ 2.39 $2.42 - $2.42 6,189,723 8.14 $ 2.42 2,502,752 $ 2.42 $2.44 - $3.52 4,982,149 5.56 $ 2.94 3,339,194 $ 2.92 $3.54 - $3.68 5,864,451 6.28 $ 3.60 3,108,284 $ 3.62 $3.71 - $6.51 4,042,257 4.09 $ 4.69 3,895,506 $ 4.70 $0.90 - $6.51 34,696,273 6.24 $ 2.74 22,669,120 $ 2.91 |
Summary of weighted-average assumptions used to calculate fair value of purchase rights granted under Employee Stock Purchase Plan | Year Ended December 31, 2022 2021 2020 Risk-free interest rate 3.1 % * 1.0 % Expected term (in years) 1.3 * 1.6 Dividend yield 0.0 % * 0.0 % Expected volatility 121.0 % * 62.3 % |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
INVENTORIES | |
Schedule of Inventories | The following table summarizes inventories, net (in thousands): As of December 31, 2022 2021 Raw materials $ 4,555 $ 5,142 Work in process 2,659 162 Finished goods 1,904 1,312 Total $ 9,118 $ 6,616 |
CASH, CASH EQUIVALENTS AND SH_2
CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS | |
Schedule of cash, cash equivalents and short-term investments | Cash, cash equivalents and short-term investments consisted of the following (in thousands): As of December 31, 2022 2021 Cash $ 6,264 $ 6,249 Money market funds 4,155 6,842 US treasury bills 5,225 35,366 Government-sponsored enterprise securities 15,796 14,678 Corporate bonds and commercial paper 26,766 61,832 $ 58,206 $ 124,967 Reported as: Cash and cash equivalents $ 24,459 $ 18,890 Short-term investments 33,747 106,077 $ 58,206 $ 124,967 |
Schedule of cash equivalents and short-term investments including securities with unrealized gains and losses | As of December 31, 2022 2021 Cash $ 6,264 $ 6,249 Money market funds 4,155 6,842 US treasury bills 5,225 35,366 Government-sponsored enterprise securities 15,796 14,678 Corporate bonds and commercial paper 26,766 61,832 $ 58,206 $ 124,967 Reported as: Cash and cash equivalents $ 24,459 $ 18,890 Short-term investments 33,747 106,077 $ 58,206 $ 124,967 |
Schedule of fair value and gross unrealized losses of 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): As of December 31, 2022 Fair Value Unrealized Losses US treasury bills $ 5,225 $ (26) Government-sponsored enterprise securities 14,322 (87) Corporate bonds and commercial paper 26,766 (41) Total $ 46,313 $ (154) |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
FAIR VALUE | |
Schedule of financial assets measured at fair value on a recurring basis | Assets at Fair Value as of December 31, 2022 Level 1 Level 2 Level 3 Total Money market funds $ 4,155 $ — $ — $ 4,155 US treasury bills — 5,225 — 5,225 Government-sponsored enterprise securities — 15,796 — 15,796 Corporate bonds and commercial paper — 26,766 — 26,766 Total $ 4,155 $ 47,787 $ — $ 51,942 Assets at Fair Value as of December 31, 2021 Level 1 Level 2 Level 3 Total Money market funds $ 6,842 $ — $ — $ 6,842 US treasury bills — 35,366 — 35,366 Government-sponsored enterprise securities — 14,678 — 14,678 Corporate bonds and commercial paper — 61,832 — 61,832 Total $ 6,842 $ 111,876 $ — $ 118,718 |
OTHER BALANCE SHEET COMPONENTS
OTHER BALANCE SHEET COMPONENTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
OTHER BALANCE SHEET COMPONENTS | |
Schedule of property and equipment | Property and equipment Property and equipment consist of the following (in thousands): As of December 31, 2022 2021 Laboratory equipment $ 7,435 $ 12,154 Computer and software 2,048 1,783 Furniture and equipment 2,107 2,107 Fixed assets in progress 74 691 Total property and equipment 11,664 16,735 Less accumulated depreciation and amortization (10,807) (14,551) Property and equipment, net $ 857 $ 2,184 |
Schedule of estimated future amortization expense of intangible asset | The following table presents the estimated future amortization expense of intangible asset (in thousands): For the year ending December 31, 2023 $ 1,071 2024 1,071 2025 1,071 2026 1,071 2027 1,071 Thereafter 9,594 $ 14,949 |
Schedule of other accrued liabilities | Other accrued liabilities consist of the following (in thousands): As of December 31, 2022 2021 Accrued commercial expenses $ 3,144 $ 1,949 Accrued other expenses 3,341 2,827 Total other accrued liabilities $ 6,485 $ 4,776 |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
DEBT | |
Schedule of future minimum payments | The following table presents the future minimum principal payments of the outstanding loan as of December 31, 2022 (in thousands): For the year ending December 31, 2023 $ — 2024 5,000 2025 20,000 2026 15,000 Principal amount (Tranches 1, 2, 3 and 4) $ 40,000 |
LEASE AGREEMENTS (Tables)
LEASE AGREEMENTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
LEASES | |
Schedule of components of operating lease expense | The components of our operating lease expense were as follows (in thousands): Year Ended December 31, 2022 2021 2020 Fixed operating lease expense $ 5,470 $ 5,360 $ 5,360 Variable operating lease expense 818 910 926 Total operating lease expense $ 6,288 $ 6,270 $ 6,286 |
Schedule of supplemental information related to operating lease | Year Ended December 31, 2022 2021 2020 Fixed operating lease expense $ 5,470 $ 5,360 $ 5,360 Variable operating lease expense 818 910 926 Total operating lease expense $ 6,288 $ 6,270 $ 6,286 |
Schedule of operating sublease information | Supplemental information related to our operating sublease was as follows (in thousands): Year Ended December 31, 2022 2021 2020 Fixed sublease expense $ 4,381 $ 4,381 $ 4,381 Variable sublease expense 911 917 962 Sublease income (5,292) (5,298) (5,343) Net $ — $ — $ — |
Schedule of future minimum lease payments | Year Ended December 31, 2022 2021 2020 Fixed sublease expense $ 4,381 $ 4,381 $ 4,381 Variable sublease expense 911 917 962 Sublease income (5,292) (5,298) (5,343) Net $ — $ — $ — |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
INCOME TAXES | |
Schedule of components of the entity's deferred tax assets | As of December 31, 2022 2021 Deferred tax assets Net operating loss carryforwards $ 230,373 $ 229,364 Orphan drug and research and development credits 68,646 66,616 Capitalized research and development credits 15,680 150 Deferred revenue 11,234 16,297 Deferred compensation 9,620 8,819 Other, net 2,494 1,523 Lease liabilities 504 2,564 Deferred tax liabilities Operating lease right-of-use asset (461) (2,335) Others (439) (607) Total net deferred tax assets 337,651 322,391 Less: valuation allowance (337,651) (322,391) Deferred tax assets, net of allowance $ — $ — |
Schedule of reconciliation of the statutory federal income tax rate to the effective tax rate | Year Ended December 31, 2022 2021 2020 Federal statutory tax rate (21.0) % (21.0) % (21.0) % State, net of federal benefit 0.0 % 2.8 % 0.1 % Valuation allowance 20.2 % 27.5 % 24.4 % Stock compensation 2.5 % 5.6 % 4.7 % Orphan drug and research and development credits (2.6) % (14.0) % (12.7) % Other, net 1.0 % 2.7 % 4.6 % Effective tax rate 0.1 % 3.6 % 0.1 % |
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, 2022 2021 2020 Balance at the beginning of the year $ 9,186 $ 8,901 $ 8,358 Increase related to current year tax positions 240 285 543 Balance at the end of the year $ 9,426 $ 9,186 $ 8,901 |
DESCRIPTION OF BUSINESS AND S_4
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Basis of Presentation and Liquidity (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 USD ($) segment | Dec. 31, 2021 USD ($) | |
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Number of business segments | segment | 1 | |
Cash, cash equivalents and short-term investments | $ | $ 58,206 | $ 124,967 |
DESCRIPTION OF BUSINESS AND S_5
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Government Contract (Details) $ in Millions | 1 Months Ended |
Jan. 31, 2021 USD ($) | |
fostamatinib | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |
Government contract | $ 16.5 |
DESCRIPTION OF BUSINESS AND S_6
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Stock-based Compensation (Details) | 12 Months Ended |
Dec. 31, 2022 item | |
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Number of homogenous groups for purposes of determining fair values of options | 3 |
Dividend yield (as a percent) | 0% |
DESCRIPTION OF BUSINESS AND S_7
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Accounts Receivable (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Balance at the beginning of the year | $ 106 | $ 171 | $ 109 |
Provision for prompt payment discount | 557 | 609 | 807 |
Reduction in prompt payment discount | (527) | (674) | (745) |
Balance at end of year | $ 136 | $ 106 | $ 171 |
DESCRIPTION OF BUSINESS AND S_8
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Concentration of Credit Risk (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Accounts receivable | $ 40,320 | $ 15,472 |
Kissei | ||
Accounts receivable | $ 20,000 | |
Accounts Receivable | Customer Concentration Risk | Three specialty distributors | ||
Percentage | 49% | 85% |
Accounts Receivable | Customer Concentration Risk | US Government and from other collaboration partners | ||
Percentage | 51% | 15% |
DESCRIPTION OF BUSINESS AND S_9
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property and Equipment (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Minimum | |
Property and equipment | |
Estimated useful life | 3 years |
Maximum | |
Property and equipment | |
Estimated useful life | 7 years |
DESCRIPTION OF BUSINESS AND _10
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Advertising Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Advertising expense | $ 2.7 | $ 2.3 | $ 1.7 |
NET LOSS PER SHARE (Details)
NET LOSS PER SHARE (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Antidilutive securities excluded from the computation of diluted net loss per share | |||
Total | 35,800 | 30,235 | 27,260 |
Employee stock options | |||
Antidilutive securities excluded from the computation of diluted net loss per share | |||
Total | 34,696 | 30,009 | 27,260 |
RSUs | |||
Antidilutive securities excluded from the computation of diluted net loss per share | |||
Total | 1,104 | 226 |
REVENUES - Disaggregated (Detai
REVENUES - Disaggregated (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | |||
Total revenues | $ 120,242,000 | $ 149,236,000 | $ 108,621,000 |
Gross product sales | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 108,523,000 | 81,186,000 | 76,470,000 |
Discounts and allowances | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | (31,805,000) | (18,176,000) | (14,774,000) |
Product sales, net | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 76,718,000 | 63,010,000 | 61,696,000 |
License revenues | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 7,932,000 | 70,553,000 | 40,358,000 |
Development milestones | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 25,000,000 | 1,875,000 | 2,100,000 |
Research and development services and others | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 6,092,000 | 3,298,000 | 4,467,000 |
Contract revenues from collaborations | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 39,024,000 | 75,726,000 | $ 46,925,000 |
Government contract | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 4,500,000 | $ 10,500,000 | |
REZLIDHIA | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | $ 900,000 |
REVENUES - Activity (Details)
REVENUES - Activity (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Balance | $ 7,915 | $ 6,065 |
Provision related to current period sales | 30,903 | 16,788 |
Credit or payments made during the period | (26,673) | (14,938) |
Balance | 12,145 | 7,915 |
Discounts and allowances | 31,800 | 18,200 |
Other accrued liabilities | 6,485 | 4,776 |
Accounts receivable and prepaid and other current assets | ||
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Provision related to current period sales | 900 | 1,400 |
Chargebacks, Discounts and Fees | ||
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Balance | 3,404 | 2,461 |
Provision related to current period sales | 23,488 | 10,731 |
Credit or payments made during the period | (20,679) | (9,788) |
Balance | 6,213 | 3,404 |
Government and Other Rebates | ||
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Balance | 2,494 | 2,115 |
Provision related to current period sales | 5,901 | 5,036 |
Credit or payments made during the period | (5,759) | (4,657) |
Balance | 2,636 | 2,494 |
Returns | ||
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Balance | 2,017 | 1,489 |
Provision related to current period sales | 1,514 | 1,021 |
Credit or payments made during the period | (235) | (493) |
Balance | $ 3,296 | $ 2,017 |
REVENUES - Percentage by Custom
REVENUES - Percentage by Customer (Details) - Sales - Customer Concentration Risk | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
McKesson Specialty Care Distribution Corporation | |||
Disaggregation of Revenue [Line Items] | |||
Percentage | 31% | 20% | 23% |
Kissei | |||
Disaggregation of Revenue [Line Items] | |||
Percentage | 24% | ||
Cardinal Healthcare | |||
Disaggregation of Revenue [Line Items] | |||
Percentage | 19% | ||
ASD Healthcare and Oncology Supply | |||
Disaggregation of Revenue [Line Items] | |||
Percentage | 17% | 17% | 30% |
Lilly | |||
Disaggregation of Revenue [Line Items] | |||
Percentage | 48% | ||
Grifols | |||
Disaggregation of Revenue [Line Items] | |||
Percentage | 41% |
SPONSORED RESEARCH AND LICENS_2
SPONSORED RESEARCH AND LICENSE AGREEMENTS AND GOVERNMENT CONTRACT (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | 24 Months Ended | |||||||||
Jan. 31, 2023 | Feb. 28, 2021 | Jan. 31, 2021 | Oct. 31, 2020 | Feb. 29, 2020 | Oct. 31, 2019 | Jan. 31, 2019 | Oct. 31, 2018 | Mar. 31, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2022 | |
Collaborations | |||||||||||||
Upfront payment received | $ 125,000 | ||||||||||||
Financing liability with accreted interest expense | 60,700 | ||||||||||||
Accretion expense | $ 700 | 2,800 | |||||||||||
Payment of cost share to collaboration partner | 15,116 | ||||||||||||
Accounts receivable | 40,320 | 15,472 | $ 40,320 | ||||||||||
Research and development | 60,272 | 65,237 | $ 60,101 | ||||||||||
Intangible asset | 14,949 | 14,949 | |||||||||||
Accounts payable | 22,508 | 3,795 | 22,508 | ||||||||||
Collaborative Arrangement [Member] | |||||||||||||
Collaborations | |||||||||||||
Contingent payments | 1,300,000 | ||||||||||||
License agreement with unrelated third party | |||||||||||||
Collaborations | |||||||||||||
Revenue recognized | 4,000 | ||||||||||||
Proceeds from License Fees Received | $ 4,000 | ||||||||||||
One-time fee received from license rights granted | $ 4,000 | ||||||||||||
Specified Development Events [Member] | Collaborative Arrangement [Member] | |||||||||||||
Collaborations | |||||||||||||
Contingent payments | 279,500 | ||||||||||||
Specified Regulatory Events [Member] | Collaborative Arrangement [Member] | |||||||||||||
Collaborations | |||||||||||||
Contingent payments | 263,100 | ||||||||||||
Specified Product Launch Events [Member] | Collaborative Arrangement [Member] | |||||||||||||
Collaborations | |||||||||||||
Contingent payments | 796,000 | ||||||||||||
Development and regulatory milestones by non-CNS disease products | |||||||||||||
Collaborations | |||||||||||||
Contingent payments | 330,000 | ||||||||||||
Development and regulatory milestones by non-CNS disease products | Milestone payments on a product-by-product basis | |||||||||||||
Collaborations | |||||||||||||
Contingent payments | 100,000 | ||||||||||||
Development and regulatory milestones by CNS disease products | |||||||||||||
Collaborations | |||||||||||||
Contingent payments | 255,000 | ||||||||||||
Development and regulatory milestones by CNS disease products | Milestone payments on a product-by-product basis | |||||||||||||
Collaborations | |||||||||||||
Contingent payments | 150,000 | ||||||||||||
Delivery of drug supply for commercialization | |||||||||||||
Collaborations | |||||||||||||
Revenue recognized | 200 | ||||||||||||
Grifols | |||||||||||||
Collaborations | |||||||||||||
Contingent payments | 277,500 | ||||||||||||
Upfront payment received | $ 30,000 | $ 30,000 | |||||||||||
Revenue recognized | $ 20,000 | ||||||||||||
Nonrefundable upfront payment | $ 5,000 | ||||||||||||
Revenue, cumulative catch-up | $ 25,000 | ||||||||||||
Grifols | Licensed Rights | |||||||||||||
Collaborations | |||||||||||||
Revenue recognized | 39,900 | ||||||||||||
Grifols | Delivery of drug supply for commercialization | |||||||||||||
Collaborations | |||||||||||||
Revenue recognized | 1,600 | 2,000 | 700 | ||||||||||
Grifols | Exercise of option to include additional territories | |||||||||||||
Collaborations | |||||||||||||
Revenue recognized | 500 | ||||||||||||
Grifols | Commercial milestones | |||||||||||||
Collaborations | |||||||||||||
Contingent payments | $ 297,500 | ||||||||||||
Kissei | |||||||||||||
Collaborations | |||||||||||||
Contingent payments | $ 147,000 | ||||||||||||
Upfront payment received | 33,000 | ||||||||||||
Revenue, remaining performance obligation | $ 33,000 | ||||||||||||
Revenue recognized | 2,600 | 300 | 0 | ||||||||||
Deferred revenue | 1,400 | 1,400 | 1,400 | ||||||||||
Knight | Commercial and license agreements | |||||||||||||
Collaborations | |||||||||||||
Upfront payment received | $ 2,000 | ||||||||||||
Knight | Minimum | Commercial and license agreements | |||||||||||||
Collaborations | |||||||||||||
Royalty payment as a percentage of net sales | 20% | ||||||||||||
Knight | Maximum | Commercial and license agreements | |||||||||||||
Collaborations | |||||||||||||
Contingent payments | $ 20,000 | ||||||||||||
Royalty payment as a percentage of net sales | 30% | ||||||||||||
Daiichi Sankyo [Member] | Collaborative Arrangement [Member] | |||||||||||||
Collaborations | |||||||||||||
Revenue recognized | 1,800 | 2,100 | |||||||||||
Forma | |||||||||||||
Collaborations | |||||||||||||
Upfront fee | $ 2,000 | ||||||||||||
Research and development | 2,000 | ||||||||||||
Forma | Commercial milestones | |||||||||||||
Collaborations | |||||||||||||
Potential payments | 165,500 | ||||||||||||
Forma | Development and regulatory milestones | |||||||||||||
Collaborations | |||||||||||||
Potential payments | 67,500 | ||||||||||||
Forma | Achievement of certain near-term regulatory milestone. | |||||||||||||
Collaborations | |||||||||||||
Potential payments | 2,500 | ||||||||||||
Research and development | 2,500 | ||||||||||||
Forma | First regulatory approval of licensed product | |||||||||||||
Collaborations | |||||||||||||
Potential payments | 5,000 | ||||||||||||
Forma | Licensed product's first commercial sale subject to certain other conditions | |||||||||||||
Collaborations | |||||||||||||
Potential payments | 10,000 | ||||||||||||
fostamatinib | |||||||||||||
Collaborations | |||||||||||||
Revenue recognized | 4,500 | 10,500 | 15,000 | ||||||||||
Government contract | $ 16,500 | ||||||||||||
Remaining amount of government award expected to be received in succeeding periods | $ 1,500 | ||||||||||||
fostamatinib | Maximum | |||||||||||||
Collaborations | |||||||||||||
Government contract | $ 16,500 | ||||||||||||
fostamatinib | Grifols | |||||||||||||
Collaborations | |||||||||||||
Collaborative payment received | $ 20,000 | ||||||||||||
fostamatinib | Grifols | Upon EMA approval of fostamatinib for treatment of chronic ITP | |||||||||||||
Collaborations | |||||||||||||
Collaborative payment received | 17,500 | ||||||||||||
fostamatinib | Grifols | Creditable advance royalty payment | |||||||||||||
Collaborations | |||||||||||||
Collaborative payment received | $ 2,500 | ||||||||||||
fostamatinib | Grifols | Maximum | |||||||||||||
Collaborations | |||||||||||||
Royalty payment as a percentage of net sales | 30% | ||||||||||||
fostamatinib | Kissei | |||||||||||||
Collaborations | |||||||||||||
Revenue recognized | $ 5,000 | ||||||||||||
Collaborative payment received | 5,000 | ||||||||||||
Accounts receivable | 20,000 | 20,000 | |||||||||||
fostamatinib | Medison | Financing arrangement | |||||||||||||
Collaborations | |||||||||||||
Upfront payment received | $ 5,000 | ||||||||||||
Financing liability with accreted interest expense | 0 | 5,600 | 0 | ||||||||||
Accretion expense | 0 | 400 | 0 | ||||||||||
Revenue recognized | $ 5,700 | ||||||||||||
fostamatinib | Medison | Commercial and license agreements | |||||||||||||
Collaborations | |||||||||||||
Revenue recognized | 100 | ||||||||||||
R552 | |||||||||||||
Collaborations | |||||||||||||
Company's percentage of development costs | 20% | ||||||||||||
Financing component liability | $ 57,900 | 57,900 | |||||||||||
Financing liability interest accretion discount rate | 6.40% | ||||||||||||
Financing liability with accreted interest expense | $ 46,200 | 46,200 | |||||||||||
Payment of cost share to collaboration partner | 15,100 | ||||||||||||
Revenue, remaining performance obligation | 67,100 | ||||||||||||
R552 | Maximum | |||||||||||||
Collaborations | |||||||||||||
Funding commitment | 65,000 | 65,000 | |||||||||||
Non-CNS penetrant IP | |||||||||||||
Collaborations | |||||||||||||
Revenue recognized | 60,400 | ||||||||||||
Non-CNS penetrant IP | Licensed Rights | |||||||||||||
Collaborations | |||||||||||||
Revenue, remaining performance obligation | 6,700 | ||||||||||||
CNS penetrant IP | |||||||||||||
Collaborations | |||||||||||||
Revenue recognized | 500 | 6,200 | |||||||||||
Research and development services | Grifols | |||||||||||||
Collaborations | |||||||||||||
Revenue recognized | 700 | 900 | 3,800 | ||||||||||
Royalty | Grifols | |||||||||||||
Collaborations | |||||||||||||
Revenue recognized | 700 | $ 0 | $ 0 | ||||||||||
REZLIDHIA | FDA approval and first commercial sale of product | |||||||||||||
Collaborations | |||||||||||||
Intangible asset | 15,000 | 15,000 | |||||||||||
Accounts payable | $ 15,000 | $ 15,000 | |||||||||||
Subsequent event | fostamatinib | Kissei | |||||||||||||
Collaborations | |||||||||||||
Revenue recognized | $ 20,000 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Stock-based compensation expense related to stock-based awards | |||
Total stock-based compensation expense | $ 12,385 | $ 9,486 | $ 7,295 |
Incremental stock-based compensation expense | 1,400 | 400 | |
Selling, general and administrative | |||
Stock-based compensation expense related to stock-based awards | |||
Total stock-based compensation expense | 10,217 | 7,337 | 5,223 |
Research and development expense | |||
Stock-based compensation expense related to stock-based awards | |||
Total stock-based compensation expense | $ 2,168 | 1,700 | $ 2,072 |
Restructuring charges | |||
Stock-based compensation expense related to stock-based awards | |||
Total stock-based compensation expense | $ 449 |
STOCK-BASED COMPENSATION - Plan
STOCK-BASED COMPENSATION - Plans (Details) | 1 Months Ended | 12 Months Ended | |||
Dec. 31, 2022 shares | Aug. 31, 2022 shares | May 31, 2022 shares | Mar. 31, 2022 shares | Dec. 31, 2022 plan shares | |
STOCK-BASED COMPENSATION | |||||
Number of active equity plans | plan | 2 | ||||
Employee stock options | |||||
STOCK-BASED COMPENSATION | |||||
Options exercised during the period (in shares) | 433,318 | ||||
2018 Equity Incentive Plan | |||||
STOCK-BASED COMPENSATION | |||||
Additional shares approved | 5,000,000 | ||||
2018 Equity Incentive Plan | Maximum | |||||
STOCK-BASED COMPENSATION | |||||
Expiration period | 10 years | ||||
Inducement Plan | |||||
STOCK-BASED COMPENSATION | |||||
Additional shares approved | 375,000 | 626,000 | 1,709,000 |
STOCK-BASED COMPENSATION - Assu
STOCK-BASED COMPENSATION - Assumptions (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Weighted-average assumptions relating to options granted | |||
Dividend yield (as a percent) | 0% | ||
Additional disclosures | |||
Total unrecognized compensation costs | $ 14.1 | ||
Weighted-average recognition period of unrecognized compensation cost | 2 years 6 months 18 days | ||
Purchase Plan | |||
Weighted-average assumptions relating to options granted | |||
Risk-free interest rate (as a percent) | 3.10% | 1% | |
Expected term (in years) | 1 year 3 months 18 days | 1 year 7 months 6 days | |
Dividend yield (as a percent) | 0% | 0% | |
Expected volatility (as a percent) | 121% | 62.30% | |
Additional disclosures | |||
Weighted-average recognition period of unrecognized compensation cost | 11 months 30 days | ||
Employee stock options | |||
Weighted-average assumptions relating to options granted | |||
Risk-free interest rate (as a percent) | 2.60% | 1% | 1.20% |
Expected term (in years) | 6 years 3 months 18 days | 6 years 4 months 24 days | 6 years 6 months |
Dividend yield (as a percent) | 0% | 0% | 0% |
Expected volatility (as a percent) | 74.80% | 70.50% | 66.10% |
Additional disclosures | |||
Grant-date weighted-average fair value (in dollars per share) | $ 1.29 | $ 2.34 | $ 1.42 |
STOCK-BASED COMPENSATION - Opti
STOCK-BASED COMPENSATION - Options and RSUs (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Additional disclosures | |||
Total unrecognized compensation costs | $ 14,100 | ||
Weighted-average recognition period of unrecognized compensation cost | 2 years 6 months 18 days | ||
Employee stock options and Restricted Stock Units | |||
Shares Available For Grant | |||
Outstanding, beginning of period (in shares) | 10,715,312 | ||
Authorized for grant (in shares) | 7,080,000 | ||
Granted (in shares) | (9,880,277) | ||
Cancelled and forfeited (in shares) | 2,697,583 | ||
Outstanding, end of period (in shares) | 10,612,618 | 10,715,312 | |
Employee stock options | |||
Number of Shares | |||
Outstanding, beginning of period (in shares) | 30,008,665 | ||
Granted (in shares) | 8,179,113 | ||
Exercised/Released (in shares) | 433,318 | ||
Cancelled and forfeited (in shares) | (3,058,187) | ||
Outstanding, end of period (in shares) | 34,696,273 | 30,008,665 | |
Vested and expected to vest (in shares) | 32,473,773 | ||
Exercisable (in shares) | 22,669,120 | ||
Weighted-Average Exercise Price | |||
Outstanding, beginning of period (in dollars per share) | $ 3.13 | ||
Granted (in dollars per share) | 1.96 | ||
Exercised/Released (in dollars per share) | 2.23 | ||
Cancelled and forfeited (in dollars per share) | 4.54 | ||
Outstanding, end of period (in dollars per share) | 2.74 | $ 3.13 | |
Vested and expected to vest (in dollars per share) | 2.73 | ||
Exercisable (in dollars per share) | $ 2.91 | ||
Weighted Intrinsic Value (in thousands) | |||
Outstanding (in thousands) | $ 1,605 | $ 6,812 | |
Vested and Expected to Vest (in thousands) | 1,493 | ||
Exercisable (in thousands) | $ 2 | ||
Number of Shares | |||
Granted (in shares) | 8,179,113 | 6,997,981 | 8,462,090 |
Additional disclosures | |||
Number of shares vested | 5,280,235 | 4,765,814 | 4,386,910 |
Shares vested, weighted average exercise price | $ 2.60 | $ 2.67 | $ 2.41 |
Aggregate intrinsic value of options exercised | $ 200 | $ 2,100 | $ 500 |
RSUs | |||
Number of Shares | |||
Outstanding, beginning of period (in shares) | 226,250 | ||
Granted (in shares) | 1,181,362 | ||
Exercised/Released (in shares) | (216,250) | ||
Cancelled and forfeited (in shares) | (87,709) | ||
Outstanding, end of period (in shares) | 1,103,653 | 226,250 | |
Weighted-Average Grant Date Fair Value | |||
Outstanding, beginning of period (in dollars per share) | $ 3.67 | ||
Granted (in dollars per share) | 2.36 | ||
Exercised/Released (in dollars per share) | 3.59 | ||
Cancelled and forfeited (in dollars per share) | 2.42 | ||
Outstanding, end of period (in dollars per share) | $ 2.39 | $ 3.67 | |
Performance shares | |||
Number of Shares | |||
Outstanding, end of period (in shares) | 2,222,500 | ||
Additional disclosures | |||
Total unrecognized compensation costs | $ 4,300 |
STOCK-BASED COMPENSATION - Stoc
STOCK-BASED COMPENSATION - Stock Options by Exercise Price (Details) - Employee stock options - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Stock options by exercise price | |||
Range of exercise prices, low end of the range (in dollars per share) | $ 0.90 | ||
Range of exercise prices, high end of the range (in dollars per share) | $ 6.51 | ||
Options Outstanding | |||
Number of Outstanding Options (in shares) | 34,696,273 | ||
Weighted-Average Remaining Contractual Life (in years) | 6 years 2 months 26 days | ||
Weighted-Average Exercise Price (in dollars per share) | $ 2.74 | ||
Options Exercisable | |||
Number of Options (in shares) | 22,669,120 | ||
Weighted Average Exercise Price (in dollars per share) | $ 2.91 | ||
Additional disclosures | |||
Aggregate intrinsic value of stock options vested and expected to vest | $ 1,493 | ||
Aggregate intrinsic value of options exercised | $ 200 | $ 2,100 | $ 500 |
$0.90 - $2.00 | |||
Stock options by exercise price | |||
Range of exercise prices, low end of the range (in dollars per share) | $ 0.90 | ||
Range of exercise prices, high end of the range (in dollars per share) | $ 2 | ||
Options Outstanding | |||
Number of Outstanding Options (in shares) | 7,143,200 | ||
Weighted-Average Remaining Contractual Life (in years) | 7 years 6 months 14 days | ||
Weighted-Average Exercise Price (in dollars per share) | $ 1.55 | ||
Options Exercisable | |||
Number of Options (in shares) | 4,222,496 | ||
Weighted Average Exercise Price (in dollars per share) | $ 1.95 | ||
$2.01 - $2.34 | |||
Stock options by exercise price | |||
Range of exercise prices, low end of the range (in dollars per share) | 2.01 | ||
Range of exercise prices, high end of the range (in dollars per share) | $ 2.34 | ||
Options Outstanding | |||
Number of Outstanding Options (in shares) | 5,979,493 | ||
Weighted-Average Remaining Contractual Life (in years) | 4 years 9 months 10 days | ||
Weighted-Average Exercise Price (in dollars per share) | $ 2.20 | ||
Options Exercisable | |||
Number of Options (in shares) | 5,143,388 | ||
Weighted Average Exercise Price (in dollars per share) | $ 2.18 | ||
$2.37 - $2.40 | |||
Stock options by exercise price | |||
Range of exercise prices, low end of the range (in dollars per share) | 2.37 | ||
Range of exercise prices, high end of the range (in dollars per share) | $ 2.40 | ||
Options Outstanding | |||
Number of Outstanding Options (in shares) | 495,000 | ||
Weighted-Average Remaining Contractual Life (in years) | 4 years 10 months 24 days | ||
Weighted-Average Exercise Price (in dollars per share) | $ 2.39 | ||
Options Exercisable | |||
Number of Options (in shares) | 457,500 | ||
Weighted Average Exercise Price (in dollars per share) | $ 2.39 | ||
$2.42 - $2.42 | |||
Stock options by exercise price | |||
Range of exercise prices, low end of the range (in dollars per share) | 2.42 | ||
Range of exercise prices, high end of the range (in dollars per share) | $ 2.42 | ||
Options Outstanding | |||
Number of Outstanding Options (in shares) | 6,189,723 | ||
Weighted-Average Remaining Contractual Life (in years) | 8 years 1 month 20 days | ||
Weighted-Average Exercise Price (in dollars per share) | $ 2.42 | ||
Options Exercisable | |||
Number of Options (in shares) | 2,502,752 | ||
Weighted Average Exercise Price (in dollars per share) | $ 2.42 | ||
$2.44 - $3.52 | |||
Stock options by exercise price | |||
Range of exercise prices, low end of the range (in dollars per share) | 2.44 | ||
Range of exercise prices, high end of the range (in dollars per share) | $ 3.52 | ||
Options Outstanding | |||
Number of Outstanding Options (in shares) | 4,982,149 | ||
Weighted-Average Remaining Contractual Life (in years) | 5 years 6 months 21 days | ||
Weighted-Average Exercise Price (in dollars per share) | $ 2.94 | ||
Options Exercisable | |||
Number of Options (in shares) | 3,339,194 | ||
Weighted Average Exercise Price (in dollars per share) | $ 2.92 | ||
$3.54 - $3.68 | |||
Stock options by exercise price | |||
Range of exercise prices, low end of the range (in dollars per share) | 3.54 | ||
Range of exercise prices, high end of the range (in dollars per share) | $ 3.68 | ||
Options Outstanding | |||
Number of Outstanding Options (in shares) | 5,864,451 | ||
Weighted-Average Remaining Contractual Life (in years) | 6 years 3 months 10 days | ||
Weighted-Average Exercise Price (in dollars per share) | $ 3.60 | ||
Options Exercisable | |||
Number of Options (in shares) | 3,108,284 | ||
Weighted Average Exercise Price (in dollars per share) | $ 3.62 | ||
$3.71 - $6.51 | |||
Stock options by exercise price | |||
Range of exercise prices, low end of the range (in dollars per share) | 3.71 | ||
Range of exercise prices, high end of the range (in dollars per share) | $ 6.51 | ||
Options Outstanding | |||
Number of Outstanding Options (in shares) | 4,042,257 | ||
Weighted-Average Remaining Contractual Life (in years) | 4 years 1 month 2 days | ||
Weighted-Average Exercise Price (in dollars per share) | $ 4.69 | ||
Options Exercisable | |||
Number of Options (in shares) | 3,895,506 | ||
Weighted Average Exercise Price (in dollars per share) | $ 4.70 |
STOCK-BASED COMPENSATION - Empl
STOCK-BASED COMPENSATION - Employee Stock Purchase Plan (Details) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 $ / shares shares | Dec. 31, 2020 $ / shares shares | |
Stock Based Compensation | |||
Weighted-average recognition period of unrecognized compensation cost | 2 years 6 months 18 days | ||
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% | ||
Purchase price expressed as a percentage of fair market value of common stock on the purchase date | 85% | ||
Number of shares of common stock issued | shares | 1,146,851 | 932,018 | 567,391 |
Average price of shares issued (in dollars per share) | $ / shares | 1.01 | 1.51 | 1.54 |
Weighted average fair value of stock purchased (in dollars per share) | $ / shares | $ 0.78 | $ 0.87 | |
Number of shares of common stock available for future issuance | shares | 3,437,633 | ||
Award offering period | 24 months | ||
Unrecognized compensation cost related to purchase plan | $ | $ 0.9 | ||
Weighted-average recognition period of unrecognized compensation cost | 11 months 30 days |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
INVENTORIES | ||
Raw Materials | $ 4,555 | $ 5,142 |
Work in process | 2,659 | 162 |
Finished goods | 1,904 | 1,312 |
Total | 9,118 | $ 6,616 |
Advance payments for raw materials | $ 800 |
CASH, CASH EQUIVALENTS AND SH_3
CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 USD ($) security | Dec. 31, 2021 USD ($) | |
Cash, cash equivalent and short term investments | ||
Cash and cash equivalents | $ 24,459 | $ 18,890 |
Short-term Investments | 33,747 | 106,077 |
Cash, cash equivalents and short-term investments | 58,206 | 124,967 |
Available-For-Sale Securities Reconciliation | ||
Amortized Cost | 47,940 | 111,978 |
Fair Value | $ 47,787 | $ 111,876 |
Weighted-average time to maturity of cash equivalents and available-for-sale securities | 89 days | 96 days |
Number of investments in continuous unrealized loss position for more than 12 months | security | 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 12 months or less | security | 36 | |
Fair Value | $ 46,313 | |
Unrealized Losses | (154) | |
Money market funds | ||
Cash, cash equivalent and short term investments | ||
Cash, cash equivalents and short-term investments | 4,155 | $ 6,842 |
US treasury bills | ||
Cash, cash equivalent and short term investments | ||
Cash, cash equivalents and short-term investments | 5,225 | 35,366 |
Available-For-Sale Securities Reconciliation | ||
Amortized Cost | 5,251 | 35,416 |
Fair Value | 5,225 | 35,366 |
Fair value and gross unrealized losses of investments in individual securities in unrealized loss position | ||
Fair Value | 5,225 | |
Unrealized Losses | (26) | |
Government-sponsored enterprise securities | ||
Cash, cash equivalent and short term investments | ||
Cash, cash equivalents and short-term investments | 15,796 | 14,678 |
Available-For-Sale Securities Reconciliation | ||
Amortized Cost | 15,882 | 14,705 |
Fair Value | 15,796 | 14,678 |
Fair value and gross unrealized losses of investments in individual securities in unrealized loss position | ||
Fair Value | 14,322 | |
Unrealized Losses | (87) | |
Corporate bonds and commercial paper | ||
Cash, cash equivalent and short term investments | ||
Cash, cash equivalents and short-term investments | 26,766 | 61,832 |
Available-For-Sale Securities Reconciliation | ||
Amortized Cost | 26,807 | 61,857 |
Fair Value | 26,766 | 61,832 |
Fair value and gross unrealized losses of investments in individual securities in unrealized loss position | ||
Fair Value | 26,766 | |
Unrealized Losses | (41) | |
Gross Unrealized Gains | ||
Available-For-Sale Securities Reconciliation | ||
Gross Unrealized Gains (Losses) | 1 | 2 |
Gross Unrealized Gains | Government-sponsored enterprise securities | ||
Available-For-Sale Securities Reconciliation | ||
Gross Unrealized Gains (Losses) | 1 | |
Gross Unrealized Gains | Corporate bonds and commercial paper | ||
Available-For-Sale Securities Reconciliation | ||
Gross Unrealized Gains (Losses) | 2 | |
Gross Unrealized Losses | ||
Available-For-Sale Securities Reconciliation | ||
Gross Unrealized Gains (Losses) | (154) | (104) |
Gross Unrealized Losses | US treasury bills | ||
Available-For-Sale Securities Reconciliation | ||
Gross Unrealized Gains (Losses) | (26) | (50) |
Gross Unrealized Losses | Government-sponsored enterprise securities | ||
Available-For-Sale Securities Reconciliation | ||
Gross Unrealized Gains (Losses) | (87) | (27) |
Gross Unrealized Losses | Corporate bonds and commercial paper | ||
Available-For-Sale Securities Reconciliation | ||
Gross Unrealized Gains (Losses) | (41) | (27) |
Cash | ||
Cash, cash equivalent and short term investments | ||
Cash, cash equivalents and short-term investments | 6,264 | 6,249 |
Fair Value Measurements Recurring | ||
Available-For-Sale Securities Reconciliation | ||
Fair Value | $ 51,942 | $ 118,718 |
FAIR VALUE (Details)
FAIR VALUE (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Fair Value | ||
Investments at fair value | $ 47,787 | $ 111,876 |
Fair Value Measurements Recurring | ||
Fair Value | ||
Investments at fair value | 51,942 | 118,718 |
Fair Value Measurements Recurring | Money market funds | ||
Fair Value | ||
Investments at fair value | 4,155 | 6,842 |
Fair Value Measurements Recurring | US treasury bills | ||
Fair Value | ||
Investments at fair value | 5,225 | 35,366 |
Fair Value Measurements Recurring | Government-sponsored enterprise securities | ||
Fair Value | ||
Investments at fair value | 15,796 | 14,678 |
Fair Value Measurements Recurring | Corporate bonds and commercial paper | ||
Fair Value | ||
Investments at fair value | 26,766 | 61,832 |
Fair Value Measurements Recurring | Level 1 | ||
Fair Value | ||
Investments at fair value | 4,155 | 6,842 |
Fair Value Measurements Recurring | Level 1 | Money market funds | ||
Fair Value | ||
Investments at fair value | 4,155 | 6,842 |
Fair Value Measurements Recurring | Level 2 | ||
Fair Value | ||
Investments at fair value | 47,787 | 111,876 |
Fair Value Measurements Recurring | Level 2 | US treasury bills | ||
Fair Value | ||
Investments at fair value | 5,225 | 35,366 |
Fair Value Measurements Recurring | Level 2 | Government-sponsored enterprise securities | ||
Fair Value | ||
Investments at fair value | 15,796 | 14,678 |
Fair Value Measurements Recurring | Level 2 | Corporate bonds and commercial paper | ||
Fair Value | ||
Investments at fair value | $ 26,766 | $ 61,832 |
OTHER BALANCE SHEET COMPONENT_2
OTHER BALANCE SHEET COMPONENTS - Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
PROPERTY AND EQUIPMENT | |||
Total property and equipment | $ 11,664 | $ 16,735 | |
Less accumulated depreciation and amortization | (10,807) | (14,551) | |
Property and equipment, net | 857 | 2,184 | |
Fixed asset write down | 700 | ||
Depreciation and amortization expense | 900 | 1,200 | $ 700 |
Laboratory equipment | |||
PROPERTY AND EQUIPMENT | |||
Total property and equipment | 7,435 | 12,154 | |
Computer and software | |||
PROPERTY AND EQUIPMENT | |||
Total property and equipment | 2,048 | 1,783 | |
Furniture and equipment | |||
PROPERTY AND EQUIPMENT | |||
Total property and equipment | 2,107 | 2,107 | |
Fixed assets in progress | |||
PROPERTY AND EQUIPMENT | |||
Total property and equipment | $ 74 | $ 691 |
OTHER BALANCE SHEET COMPONENT_3
OTHER BALANCE SHEET COMPONENTS - Intangible Asset (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
OTHER BALANCE SHEET COMPONENTS | |
Estimated useful life | 14 years |
Amortization expense | $ 100 |
2023 | 1,071 |
2024 | 1,071 |
2025 | 1,071 |
2026 | 1,071 |
2027 | 1,071 |
Thereafter | 9,594 |
Total | $ 14,949 |
OTHER BALANCE SHEET COMPONENT_4
OTHER BALANCE SHEET COMPONENTS - Other Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
OTHER BALANCE SHEET COMPONENTS | ||
Accrued commercial expenses | $ 3,144 | $ 1,949 |
Accrued other expenses | 3,341 | 2,827 |
Total other accrued liabilities | $ 6,485 | $ 4,776 |
DEBT (Details)
DEBT (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Debt Instrument [Line Items] | |||
Interest expense | $ 3,707 | $ 4,860 | $ 1,353 |
Credit Facility with MidCap | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 60,000 | ||
Final payment fee, percentage of principal | 2.50% | ||
Outstanding balance | $ 40,000 | ||
Debt issuance costs being amortized ratably | 400 | ||
Unamortized issuance costs and debt discounts | 600 | 100 | |
Interest expense | 3,000 | $ 1,700 | $ 1,400 |
Accrued interest | $ 800 | ||
Credit Facility with MidCap | LIBOR | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 5.65% | ||
Floor rate | 1.50% | ||
Credit Facility with MidCap | SOFR | |||
Debt Instrument [Line Items] | |||
Rate adjustment | 0.11448% | ||
Basis spread on variable rate | 5.65% | ||
Floor rate | 1.50% | ||
Credit Facility with MidCap | Tranche 1 | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 10,000 | ||
Credit Facility with MidCap | Tranche 2 | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | 10,000 | ||
Credit Facility with MidCap | Tranche 3 | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | 10,000 | ||
Credit Facility with MidCap | Tranche 4 | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | 10,000 | ||
Credit Facility with MidCap | Tranche 5 | |||
Debt Instrument [Line Items] | |||
Remaining borrowing capacity | $ 20,000 | ||
Credit Facility with MidCap | Initial interest-only payment period | |||
Debt Instrument [Line Items] | |||
Interest-only payments period | 24 months | ||
Credit Facility with MidCap | First conditional interest-only payment period | |||
Debt Instrument [Line Items] | |||
Interest-only payments period | 36 months | ||
Credit Facility with MidCap | Second conditional interest-only payment period | |||
Debt Instrument [Line Items] | |||
Interest-only payments period | 48 months |
DEBT - Future Minimum Payments
DEBT - Future Minimum Payments (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Future minimum payments | |
2024 | $ 5,000 |
2025 | 20,000 |
2026 | 15,000 |
Principal amount (Tranches 1, 2, 3 and 4) | $ 40,000 |
LEASES (Details)
LEASES (Details) $ in Thousands | Dec. 31, 2022 USD ($) ft² | Oct. 28, 2022 USD ($) | Dec. 31, 2021 USD ($) |
Sublease Agreement | |||
Right-of-use assets | $ 1,930 | $ 9,703 | |
Weighted average remaining lease term | 2 years 6 months | ||
Research and office space lease, South San Francisco, California | |||
Sublease Agreement | |||
Area of real estate property (square feet) | ft² | 147,000 | ||
Leasehold improvement incentives from landlord | $ 700 | ||
Research and office space sublease, South San Francisco, California | |||
Sublease Agreement | |||
Area of real estate property (square feet) | ft² | 66,000 | ||
Headquarters office space sublease, South San Francisco, California | |||
Sublease Agreement | |||
Area of real estate property (square feet) | ft² | 13,670 | ||
Right-of-use assets | $ 1,300 | ||
Lease liability | $ 1,300 | ||
Leasehold improvement incentives from landlord | $ 200 |
LEASES - Lease Expense (Details
LEASES - Lease Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
LEASES | |||
Fixed operating lease expense | $ 5,470 | $ 5,360 | $ 5,360 |
Variable operating lease expense | 818 | 910 | 926 |
Total operating lease expense | $ 6,288 | $ 6,270 | $ 6,286 |
LEASES - Cash Flow Information
LEASES - Cash Flow Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
LEASES | |||
Cash payments included in the measurement of operating lease liabilities | $ 10,485 | $ 10,082 | $ 9,694 |
LEASES - Sublease Information (
LEASES - Sublease Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Operating sublease information | |||
Fixed sublease expense | $ 4,381 | $ 4,381 | $ 4,381 |
Variable sublease expense | 911 | 917 | 962 |
Sublease income | (5,292) | (5,298) | (5,343) |
Net |
LEASES - Future Minimum Lease P
LEASES - Future Minimum Lease Payments (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Operating Lease | |
2023 | $ 1,534 |
2024 | 739 |
2025 | 301 |
Total minimum payments required | 2,574 |
Sublease Receipts | |
2023 | (394) |
Total minimum payments required | (394) |
Net | |
2023 | 1,140 |
2024 | 739 |
2025 | 301 |
Total minimum payments required | $ 2,180 |
STOCKHOLDERS' EQUITY - Preferre
STOCKHOLDERS' EQUITY - Preferred Stock (Details) - shares | Dec. 31, 2022 | Dec. 31, 2021 |
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 - Common S
STOCKHOLDERS' EQUITY - Common Stock and Sale Agreement (Details) - USD ($) $ in Millions | 12 Months Ended | ||||
May 03, 2022 | Aug. 03, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | May 18, 2018 | |
Controlled Equity Offering | |||||
Authorized number of shares of common stock | 400,000,000 | 400,000,000 | |||
Common stock, shares issued | 173,398,645 | 171,602,226 | |||
Common stock, shares outstanding | 173,398,645 | 171,602,226 | |||
Common Stock | |||||
Controlled Equity Offering | |||||
Authorized number of shares of common stock | 400,000,000 | ||||
Common Stock | Open Market Sales Agreement | |||||
Controlled Equity Offering | |||||
Maximum value of shares available under Controlled Equity Offering | $ 100 | ||||
Number of shares of common stock sold (in shares) | 0 | ||||
Common Stock | Amended Sales Agreement | |||||
Controlled Equity Offering | |||||
Maximum value of shares available under Controlled Equity Offering | $ 250 |
INCOME TAXES - Provision (Detai
INCOME TAXES - Provision (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2021 USD ($) | |
INCOME TAXES | |
Provision for income taxes | $ 605 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Deferred tax assets | |||
Net operating loss carryforwards | $ 230,373 | $ 229,364 | |
Orphan drug and research and development credits | 68,646 | 66,616 | |
Capitalized research and development credits | 15,680 | 150 | |
Deferred revenue | 11,234 | 16,297 | |
Deferred compensation | 9,620 | 8,819 | |
Other, net | 2,494 | 1,523 | |
Lease liabilities | 504 | 2,564 | |
Deferred tax liabilities | |||
Operating lease right-of-use asset | (461) | (2,335) | |
Others | (439) | (607) | |
Total net deferred tax assets | 337,651 | 322,391 | |
Less: valuation allowance | (337,651) | (322,391) | |
Deferred tax assets, net of allowance | |||
Reconciliation of the statutory federal income tax rate to the effective tax rate | |||
Federal statutory tax rate (as a percent) | (21.00%) | (21.00%) | (21.00%) |
State, net of federal benefit (as a percent) | 0% | 2.80% | 0.10% |
Valuation allowance (as a percent) | 20.20% | 27.50% | 24.40% |
Stock compensation (as a percent) | 2.50% | 5.60% | 4.70% |
Orphan drug and research and development credits (as a percent) | (2.60%) | (14.00%) | (12.70%) |
Other, net (as a percent) | 1% | 2.70% | 4.60% |
Effective tax rate (as a percent) | 0.10% | 3.60% | 0.10% |
INCOME TAXES - Operating Loss C
INCOME TAXES - Operating Loss Carryforwards (Details) $ in Millions | Dec. 31, 2022 USD ($) |
Federal | |
Operating loss carryforwards | |
Net operating loss carryforwards | $ 976.4 |
Federal | Expire beginning in the year 2025 | |
Operating loss carryforwards | |
Net operating loss carryforwards | 837.9 |
State | |
Operating loss carryforwards | |
Net operating loss carryforwards | $ 379.4 |
INCOME TAXES - Tax Credits (Det
INCOME TAXES - Tax Credits (Details) - Research [Member] $ in Millions | Dec. 31, 2022 USD ($) |
Federal | |
Tax credit carryforward | |
Amount of tax credit carryforward | $ 52.4 |
State | |
Tax credit carryforward | |
Amount of tax credit carryforward | $ 31.3 |
INCOME TAXES - Valuation Allowa
INCOME TAXES - Valuation Allowance (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
INCOME TAXES | |||
Increase in valuation allowance | $ 15.3 | $ 6.6 | $ 4.1 |
INCOME TAXES - Unrecognized Tax
INCOME TAXES - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Gross unrecognized tax benefits | |||
Balance at the beginning of the year | $ 9,186 | $ 8,901 | $ 8,358 |
Increase related to current year tax positions | 240 | 285 | 543 |
Balance at the end of the year | 9,426 | $ 9,186 | $ 8,901 |
Tax positions subject to interest or penalties | $ 0 |
RESTRUCTURING CHARGES (Details)
RESTRUCTURING CHARGES (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Restructuring Charges | ||
Restructuring charges | $ 1,320 | $ 3,521 |
Severance, bonus and related employee benefits and taxes | ||
Restructuring Charges | ||
Restructuring charges | 2,900 | |
Accrued restructuring liability | $ 500 | 2,200 |
Stock-based compensation expense related to option modification | ||
Restructuring Charges | ||
Restructuring charges | 400 | |
Property and equipment impairment | ||
Restructuring Charges | ||
Restructuring charges | $ 100 |