Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Oct. 24, 2013 | |
Document and Entity Information [Abstract] | ' | ' |
Entity Registrant Name | 'POZEN INC /NC | ' |
Entity Central Index Key | '0001059790 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Well-known Seasoned Issuer | 'No | ' |
Entity Voluntary Filers | 'No | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 30,507,451 |
Document Fiscal Year Focus | '2013 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Sep-13 | ' |
BALANCE_SHEETS_Unaudited
BALANCE SHEETS (Unaudited) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Current assets: | ' | ' |
Cash and cash equivalents | $89,695,509 | $68,416,308 |
Short-term investments | 0 | 18,898,136 |
Accounts receivable | 1,583,000 | 1,352,000 |
Prepaid expenses and other current assets | 105,565 | 858,423 |
Total current assets | 91,384,074 | 89,524,867 |
Property and equipment, net of accumulated depreciation | 47,813 | 71,945 |
Total assets | 91,431,887 | 89,596,812 |
Current liabilities: | ' | ' |
Accounts payable | 984,539 | 1,231,761 |
Accrued compensation | 1,924,833 | 2,574,334 |
Accrued expenses | 1,693,335 | 1,456,055 |
Deferred revenue | 12,257,300 | 257,300 |
Total current liabilities | 16,860,007 | 5,519,450 |
Long-term Liabilities: | ' | ' |
Deferred Revenue | 2,000,000 | 0 |
Total Liabilities | 18,860,007 | 5,519,450 |
Preferred stock, $0.001 par value; 10,000,000 shares authorized, issuable in series, of which 90,000 shares are designated Series A Junior Participating Preferred Stock, none outstanding | 0 | 0 |
Common stock, $0.001 par value, 90,000,000 shares authorized; 30,507,451 and 30,321,861 shares issued and outstanding at September 30, 2013 and December 31, 2012, respectively | 30,507 | 30,322 |
Additional paid-in capital | 186,945,360 | 183,921,159 |
Accumulated other comprehensive loss | 0 | -3,253 |
Accumulated deficit | -114,403,987 | -99,870,866 |
Total stockholders' equity | 72,571,880 | 84,077,362 |
Total liabilities and stockholders' equity | $91,431,887 | $89,596,812 |
BALANCE_SHEETS_Unaudited_Paren
BALANCE SHEETS (Unaudited) (Parenthetical) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Preferred stock, par value (in dollars per share) | $0.00 | $0.00 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized (in shares) | 90,000,000 | 90,000,000 |
Common stock, shares issued (in shares) | 30,507,451 | 30,507,451 |
Common stock, shares outstanding (in shares) | 30,321,861 | 30,321,861 |
Series A Junior Participating Preferred Stock [Member] | ' | ' |
Preferred stock, par value (in dollars per share) | $0.00 | $0.00 |
Preferred stock, shares authorized (in shares) | 90,000 | 90,000 |
STATEMENTS_OF_COMPREHENSIVE_LO
STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Revenue: | ' | ' | ' | ' |
Licensing revenue | $2,583,000 | $940,000 | $5,649,000 | $3,997,000 |
Operating expenses: | ' | ' | ' | ' |
Selling, general and administrative | 5,182,501 | 4,444,194 | 12,529,577 | 14,162,824 |
Research and development | 2,181,689 | 2,256,450 | 7,706,975 | 9,234,964 |
Total operating expenses | 7,364,190 | 6,700,644 | 20,236,552 | 23,397,788 |
Interest and other income | 13,997 | 65,300 | 54,431 | 206,600 |
Net loss income attributable to common stockholders | -4,767,193 | -5,695,344 | -14,533,121 | -19,194,188 |
Basic and diluted net loss per common share (in dollars per share) | ($0.16) | ($0.19) | ($0.48) | ($0.64) |
Shares used in computing basic and diluted net loss per common share (in shares) | 30,476,562 | 30,084,315 | 30,405,543 | 30,019,165 |
Comprehensive Loss | ($4,767,193) | ($5,659,929) | ($14,529,868) | ($19,176,892) |
STATEMENTS_OF_CASH_FLOWS_Unaud
STATEMENTS OF CASH FLOWS (Unaudited) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Operating activities | ' | ' |
Net loss | ($14,533,121) | ($19,194,188) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ' | ' |
Depreciation | 22,628 | 33,721 |
Loss on sale of fixed assets | 3,155 | 1,535 |
Bond amortization income | 63,389 | 1,213,375 |
Noncash compensation expense | 3,205,416 | 1,987,922 |
Deferred revenue | 14,000,000 | 0 |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | -231,000 | 190,000 |
Prepaid expenses and other current assets | 752,858 | -36,809 |
Accounts payable and other accrued expenses | -659,442 | -5,810,602 |
Net cash provided by (used in) operating activities | 2,623,883 | -21,615,046 |
Investing activities | ' | ' |
Purchase of equipment | -1,652 | -15,821 |
Purchase of investments | 0 | -35,922,138 |
Sales and maturities of investments | 18,838,000 | 0 |
Net cash provided by (used in) investing activities | 18,836,348 | -35,937,959 |
Financing activities | ' | ' |
Proceeds from issuance of common stock | 155,047 | 1,236,678 |
Payments related to net settlement of stock-based awards | -336,077 | 0 |
Net cash (used in) provided by financing activities | -181,030 | 1,236,678 |
Net increase (decrease) in cash and cash equivalents | 21,279,201 | -56,316,327 |
Cash and cash equivalents at beginning of period | 68,416,308 | 104,990,723 |
Cash and cash equivalents at end of period | $89,695,509 | $48,674,396 |
Significant_Accounting_Policie
Significant Accounting Policies | 9 Months Ended | |
Sep. 30, 2013 | ||
Significant Accounting Policies [Abstract] | ' | |
Significant Accounting Policies | ' | |
1 | Significant Accounting Policies | |
General | ||
POZEN Inc. (“we” or “POZEN” or the “Company”) was incorporated in the State of Delaware on September 25, 1996 and is operating in a single reportable segment. The Company is a pharmaceutical company committed to transforming medicine that transforms lives. Since inception, the Company has focused its efforts on developing products which can provide improved efficacy, safety or patient convenience in the treatment of acute and chronic pain and pain related conditions and is now developing a portfolio of integrated aspirin therapies. Historically, the Company has entered into collaboration agreements to commercialize its product candidates and may continue to enter into such collaborations. The Company’s licensing revenues include upfront payments, additional payments if and when certain milestones in the product’s development or commercialization are reached, and the eventual royalty payments based on product sales. | ||
We decided to retain ownership of our PA product candidates for cardiovascular indications which contain a combination of a proton pump inhibitor and enteric coated aspirin in a single tablet through the clinical development and pre-commercialization stage and our chief commercial officer was responsible for developing the commercialization strategy for these products and conducting all the required pre-commercialization activities. On September 3, 2013 we entered into a an exclusive license agreement with sanofi-aventis U.S. LLC (“Sanofi US”) for the commercialization of POZEN’s proprietary, investigational, coordinated-delivery tablets combining immediate-release omeprazole, a proton pump inhibitor ("PPI"), and enteric-coated ("EC") aspirin in a single tablet (“PA”), PA8140 and PA32540. Under the terms of the agreement, Sanofi US will have exclusive rights to commercialize all PA combinations that contain 325 mg or less of enteric-coated aspirin in the United States. Outside the United States, we intend to secure relationships with one or more strong commercial partners with relevant expertise to commercialize our future products globally. We retained Keelin Reeds LLC to assist us in the strategic partner search for PA32540 and PA8140 for both the U.S. and globally. Keelin Reeds is a global expert in assisting life sciences companies value pipeline assets, develop business development strategies and execute partnership transactions. With respect to future products we may develop, we intend to return to our historical business model in which the Company funds development activities for pipeline products through proof of concept and then licenses the product prior to initiating Phase 3 clinical trials. Consistent with this model, we have reduced our R&D staff and other costs and expenses as our PA development program activities wind down and intend to continue to reduce staff that is no longer required to support our current business activities. Our board of directors and management team continue to explore potential ways to return value to our stockholders, which may include one or more cash distributions. | ||
Basis of Presentation | ||
The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial reporting and the instructions to Form 10-Q and do not include all of the information and footnotes required for complete financial statements. In the opinion of the Company’s management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the results for the interim periods have been included. Operating results for the three and nine months ended September 30, 2013 are not necessarily indicative of the results for the year ending December 31, 2013 or future periods. The accompanying financial statements should be read in conjunction with the Company’s audited financial statements and related notes included in the Company’s Annual Report on Form 10-K filed on March 7, 2013 and available on the website of the United States Securities and Exchange Commission (www.sec.gov). The accompanying balance sheet as of December 31, 2012 has been derived from the audited balance sheet as of that date included in the Form 10-K. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Summary of Significant Accounting Policies [Abstract] | ' | ||||||||||||||||
Summary of Significant Accounting Policies | ' | ||||||||||||||||
2 | Summary of Significant Accounting Policies | ||||||||||||||||
Use of Estimates— The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Actual results could differ from the estimates and assumptions used. | |||||||||||||||||
Accrued expenses, including contracted costs— Significant management judgments and estimates must be made and used in connection with accrued expenses, including those related to contract costs, such as costs associated with clinical trials. Specifically, the Company must make estimates of costs incurred to date but not yet paid for or not yet invoiced in relation to contracted, external costs. The Company analyzes the progress of product development, clinical trial and related activities, invoices received, amounts paid, and budgeted costs when evaluating the adequacy of the accrued liability for these related costs. Certain accrued contract costs, estimated to be payable after more than twelve months, are classified as long-term liabilities rather than as accrued expenses. | |||||||||||||||||
The Company believes that its current assumptions and other considerations used to estimate accrued expenses for the period are appropriate. However, determining the date on which certain contract services commence, the extent of services performed on or before a given date and the cost of such, paid and unpaid, involves subjective judgments and estimates and often must be based upon information provided by third parties. In the event that management does not identify certain contract costs which have begun to be incurred or under- or over-estimates the extent of services performed or the costs of such services, management adjusts costs during the period in which the information becomes available. | |||||||||||||||||
Accrued costs related to product development and operating activities, including clinical trials, based upon the progress of these activities covered by the related contracts, invoices received and estimated costs totaled $1.7 million at September 30, 2013 and $2.0 million at September 30, 2012. The variance, at each of these ending periods, between the actual expenses incurred and the estimated expenses accrued was not material or significant. | |||||||||||||||||
Revenue Recognition— The Company records revenue under the following categories: sale of royalty rights, licensing revenues consisting of royalty revenues and other licensing revenues, and development revenues. | |||||||||||||||||
Sale of royalty rights last occurred in the year ended December 31, 2011 and reflected the U.S. sales of MT 400, including Treximet® (sumatriptan / naproxen sodium), for which the Company received a purchase price of $71.9 million (net of costs). The Company will receive a twenty percent (20%) interest in any royalties received by the purchaser relating to the period commencing on April 1, 2018. No sale of royalty rights occurred in the quarters ended September 30, 2013. | |||||||||||||||||
Licensing revenue for the three and nine months ended September 30, 2013 was $2.6 million and $5.6 million, respectively. Licensing revenue for the three months ended September 30, 2013 consisted of $1.6 million royalties from sales of VIMOVO® (naproxen / esomeprazole magnesium) delayed release tablets and amortization of the upfront payment for PA8140/PA32540 of $1.0 million. Licensing revenue for the nine months ended September 30, 2013 consisted of $4.6 million of royalties from sales of VIMOVO and $1.0 million of amortization of the upfront payment for PA8140/PA32540. Licensing revenue for the three months ended September 30, 2012 was $0.9 million of royalties from the sales of VIMOVO. Licensing revenue for the nine months ended September 30, 2012 was $4.0 million and was comprised of $3.5 million of VIMOVO royalties and $0.5 million of licensing revenue for MT400. | |||||||||||||||||
With regard to licensing revenues, the Company’s licensing agreements have terms that include royalty payments based on the manufacture, sale or use of the Company’s products or technology. Treximet and VIMOVO royalty revenue has been recognized when earned, as will any other future royalty revenues. For VIMOVO or those future arrangements where royalties are reasonably estimable, the Company recognizes revenue based on estimates of royalties earned during the applicable period and reflects in future revenue any differences between the estimated and actual royalties. These estimates are based upon information reported to the Company by its collaboration partners. | |||||||||||||||||
Also, with regard to the licensing revenues, the Company’s licensing agreements have terms that include upfront payments upon contract signing and additional payments if and when certain milestones in the product’s development or commercialization are reached. | |||||||||||||||||
The Company recognizes revenues from license and collaboration agreements when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the fee is fixed or determinable, and there is reasonable assurance that the related amounts are collectible in accordance with ASC Topic 605, Revenue Recognition (“ASC 605”). Our license and collaboration agreements may contain multiple elements, including grants of licenses to intellectual property rights and agreement to provide research and development services. The deliverables under such arrangements are evaluated under ASC Subtopic 605-25, Multiple-Element Arrangements. Each required deliverable is evaluated to determine whether it qualifies as a separate unit of accounting based on whether the deliverable has “stand-alone value” to the customer. The arrangement’s consideration that is fixed or determinable is then allocated to each separate unit of accounting based on the relative selling price of each deliverable. In general, the consideration allocated to each unit of accounting is recognized as the related goods or services are delivered, limited to the consideration that is not contingent upon future deliverables. When evaluating multiple element arrangements, we consider whether the components of the arrangement represent separate units of accounting. This evaluation requires subjective determinations and requires management to make judgments about the selling price of the individual elements and whether such elements are separable from the other aspects of the contractual relationship. | |||||||||||||||||
Upfront payments for licensing the Company's intellectual property are evaluated to determine if the licensee can obtain stand-alone value from the license separate from the value of the research and development services and other deliverables in the arrangement to be provided by the Company. If the Company determines that the license does not have stand-alone value separate from the research and development services, the license and the services are combined as one unit of account and upfront payments are recorded as deferred revenue in the balance sheet and are recognized as revenue over the estimated performance period that is consistent with the term of the research and development obligations contained in the collaboration agreement. When stand-alone value is identified, the related consideration is recorded as revenue in the period in which the license or other intellectual property rights are delivered. | |||||||||||||||||
In those circumstances where research and development services are combined with the license, and multiple services are being performed such that a common output measure to determine a pattern of performance cannot be discerned, the Company recognizes amounts received on a straight line basis over the performance period. Such amounts are recorded as collaboration revenue. | |||||||||||||||||
Milestone payments along with the refundable portions of up-front payments are recognized as licensing revenue upon the achievement of specified milestones if (i) the milestone is substantive in nature and the achievement of the milestone was not reasonably assured at the inception of the agreement; and (ii) the fees are non-refundable. Any milestone payments received prior to satisfying these revenue recognition criteria are recorded as deferred revenue. | |||||||||||||||||
On March 21, 2011, the Company entered into a license agreement with Cilag GmbH International (“Cilag”) a division of Johnson & Johnson, for the exclusive development and commercialization of MT 400 in Brazil, Colombia, Ecuador and Peru. Cilag’s upfront payment of $257,300, which is refundable under certain conditions, has been deferred until those conditions have been satisfied, which may occur later this year. | |||||||||||||||||
With regard to royalty revenues, royalty revenue from Treximet and VIMOVO is recognized when earned, as will any other future royalty revenues with respect to the manufacture, sale or use of the Company’s products or technology. For Treximet and VIMOVO or those future arrangements where royalties are reasonably estimable, the Company recognizes revenue based on estimates of royalties earned during the applicable period and reflects in future revenue any differences between the estimated and actual royalties. These estimates are based upon information reported to the Company by its collaboration partners. | |||||||||||||||||
On November 23, 2011, the Company entered into a Purchase and Sale Agreement, or the Purchase Agreement, with CPPIB Credit Investments Inc., or CII, pursuant to which the Company sold, and CII purchased, its right to receive future royalty payments arising from U.S. sales of MT 400, including Treximet. Under the Purchase Agreement, the Company received a purchase price of $75 million and will receive a twenty percent (20%) interest in any royalties received by CII relating to the period commencing on April 1, 2018. | |||||||||||||||||
On September 3, 2013, we entered into a license and collaboration agreement with Sanofi US. Under the license agreement, we will have the responsibility for obtaining regulatory approval and Sanofi US will have responsibility for the commercialization of products containing a combination of immediate release omeprazole and 325 mg or less of delayed release aspirin, including PA32540 and PA8140, which are expected to be indicated for use for the secondary prevention of cardiovascular disease in patients at risk for aspirin-associated gastric ulcers. In the event the products are not approved for the expected indications, Sanofi US shall have the right, but not the obligation, to terminate the licensing agreement. Under the license agreement, Sanofi US has the exclusive right to commercialize licensed products in the United States, with the Company retaining the right to commercialize licensed products outside the United States. Sanofi US will have responsibility for all sales, marketing and future development for the licensed products. In consideration for the rights granted to Sanofi US under the License Agreement, Sanofi US paid us an upfront payment of $15 million. The Company is also eligible to receive pre-commercial milestone payments of $20 million and additional payments upon the achievement of specified sales milestones. The Company will also receive tiered royalties ranging from 12.5% to 22.5% on sales of licensed products by Sanofi US, its affiliates and its sublicensees in the United States, subject to certain adjustments specified in the license agreement. | |||||||||||||||||
With regard to development revenue, the Company’s licensing agreements may include payment for development services provided by the Company on an hourly rate and direct expense basis. The Company records such payments as revenue in accordance with the agreements because the Company acts as principal in the transaction. Under the collaboration agreements with AstraZeneca AB ("AstraZeneca") and GlaxoSmithKline ("GSK"), the Company recognizes as development revenue the billings for the direct costs and certain personnel-related time incurred in performing additional development activities described within the related agreements. The collaboration agreements establish the rates for billing personnel-related time incurred and consequently, the associated costs incurred to perform the additional development activities are not separately captured from ongoing personnel costs. | |||||||||||||||||
Cash, Cash Equivalents, Investments and Concentration of Credit Risk —Cash is invested in open-ended money market mutual funds and interest-bearing investment-grade debt securities. Cash is maintained to the extent of a $42,000 letter of credit in compliance with the terms of the Company’s office lease. The Company considers all highly liquid investments with maturities of 90 days or less when purchased to be cash equivalents. | |||||||||||||||||
The Company invests in high-credit quality investments in accordance with its investment policy, which minimizes the possibility of loss; however, given the recent disruption in the credit markets and the downgrades of previous high-credit companies, the possibility of a loss is increased. Investments, other than investments considered to be cash equivalents, that have maturities of greater than 90 days and less than one year are classified as short-term are considered to be available-for-sale and carried at fair value with unrealized gains and losses recognized in other comprehensive income (loss). Investment purchases and sales are recorded on their trade dates. Realized gains and losses are determined using the specific identification method. Marketable and non-marketable investments are evaluated on an on-going basis for market impairment. If the Company determines that a decline of any investment is other-than-temporary, the investment is written down to fair value. For the three months ended September 30, 2013 and 2012, the Company had $14,000 and $65,300, respectively, of interest, bond amortization and other income. For the nine months ended September 30, 2013 and 2012, the Company had $54,400 and $206,600, respectively, of interest, bond amortization and other income. As of September 30, 2013 and 2012, there were no investments in a significant unrealized loss position. | |||||||||||||||||
The money market mutual funds generally seek a high a level of current income that is consistent with the preservation of capital and the maintenance of liquidity. The funds generally are subject to maturity, quality, liquidity and diversification requirements which are designed to help money market funds maintain a stable share price of $1.00. As a result, the funds normally invest in a diversified portfolio of high quality, short-term, dollar-denominated debt securities, including: securities issued or guaranteed as to principal and interest by the U.S. government or its agencies or instrumentalities; certificates of deposit, time deposits, bankers' acceptances and other short-term securities issued by domestic or foreign banks or thrifts or their subsidiaries or branches; repurchase agreements, including tri-party repurchase agreements; asset-backed securities; domestic and dollar-denominated foreign commercial paper and other short-term corporate obligations, including those with floating or variable rates of interest; and dollar-denominated obligations issued or guaranteed by one or more foreign governments or any of their political subdivisions or agencies. | |||||||||||||||||
Cash and cash equivalents include financial instruments that potentially subject the Company to a concentration of credit risk. Cash and cash equivalents are of a highly liquid nature and are held with high credit quality financial institutions and money market mutual fund managers. Cash held directly with financial institutions is insured up to $250,000 per account and any excess amounts are uninsured. The counterparties to the Company’s investment-in interest-bearing corporate debt securities are various major corporations with high credit standings. There were no investments as of September 30, 2013. | |||||||||||||||||
Investments consisted of the following as of December 31, 2012: | |||||||||||||||||
Amortized Cost | Unrealized Gain | Unrealized Loss | Fair Value | ||||||||||||||
Short-term investments - Corporate debt securities | $ | 18,901,389 | $ | 58 | $ | (3,311 | ) | $ | 18,898,136 | ||||||||
Fair Value of Financial Instruments | |||||||||||||||||
Financial instruments consist of cash and cash equivalents, short-term investments, accounts receivable and accounts payable. The carrying values of these amounts approximate the fair value due to their short-term nature. | |||||||||||||||||
Fair Value Measurement | |||||||||||||||||
The Company defines fair value (“FV”) as the price that would be received to sell an asset or paid to transfer a liability ("the exit price") in an orderly transaction between market participants at the measurement date. The FV hierarchy for inputs maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. The Company uses the following hierarchy of inputs to measure FV: | |||||||||||||||||
o | Level 1 - quoted prices in active markets for identical assets and liabilities. | ||||||||||||||||
o | Level 2 - observable inputs other than quoted prices in active markets for identical assets and liabilities, including quoted prices in active markets for instruments that are similar or quoted prices in markets that are not active for identical or similar instruments and model-derived valuations in which all significant inputs and value drivers are observable in active markets. | ||||||||||||||||
o | Level 3 - unobservable inputs that are significant to the overall valuation, for which there is little or no market data available and which require the Company to develop its own assumptions. | ||||||||||||||||
The Company values investments using the most observable inputs available that are current as of the measurement date and classifies them according to the lowest level of inputs used. Observable inputs are inputs that market participants would use in pricing the asset or liability developed from market data obtained from independent sources. Unobservable inputs are inputs that reflect the Company’s judgment concerning the assumptions that market participants would use in pricing the asset or liability developed from the best information available under the circumstances. | |||||||||||||||||
The Company targets investment principally in Level 1 and Level 2 cash equivalents and financial instruments and records them at FV. The Company did not rely on Level 3 input for valuation of investments at September 30, 2013 and December 31, 2012. The Company expects that the carrying values of cash equivalents will approximate FV because of their short maturities. | |||||||||||||||||
The Company values its investments in money market mutual funds at the FV of the ownership interests in the funds. The Net Asset Value ("NAV") per unit which is provided by the fund administrator is the primary input into the valuation of the ownership interest. The NAV is based on the FV of the underlying assets owned by the fund, minus its liabilities, divided by the number of shares outstanding. The fund administrator produces a daily NAV that is validated with sufficient observable purchase and sale activity at NAV to support classification of the FV measurement as Level 1. The Company believes that NAV represents the exit value of fund at the measurement date. The underlying fixed income assets owned by the funds are valued principally using a market approach based on quoted prices obtained from the primary or secondary exchanges on which they are traded. When market prices are not available, FV is based on indicative quotes from brokers and proprietary pricing models combined with observable market inputs, including unadjusted quotes in active markets or quoted prices for similar assets or other observable inputs including, but not limited to, transactions activity, interest rates, yield curves, spot prices, prepayment speeds and default rates. These funds generally have daily liquidity. | |||||||||||||||||
In addition to the NAV, consideration is given to any specific rights or obligations that pertain to investments in the funds, which if deemed significant, may adjust the FV of the ownership interest and result in a lower, less observable FV hierarchy level. These factors include, but are not limited to, any restrictions or illiquidity on the disposition of the interest. The Company invests in money market funds that have daily liquidity and do not, absent unusual market disruption, impose restrictions on the Company’s ability to make redemptions. The Company has concluded that there are no significant specific rights or obligations pertaining to these funds that require an adjustment to the FV. | |||||||||||||||||
The Company classifies as Level 2 investments in corporate debt securities and values them using the market approach based on significant other observable inputs including quoted prices in active markets for instruments that are similar or quoted prices in markets that are not traded on a daily basis for identical or similar instruments. | |||||||||||||||||
The following table sets forth our financial instruments carried at FV within the ASC 820 hierarchy and using the lowest level of input as of September 30, 2013: | |||||||||||||||||
Financial Instruments | |||||||||||||||||
Carried at Fair Value | |||||||||||||||||
Quoted prices | Significant other | Significant | |||||||||||||||
in active markets | observable | other unobservable | |||||||||||||||
for identical items | inputs | inputs | |||||||||||||||
(Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||||
Cash and cash equivalents | $ | 89,695,509 | $ | — | $ | — | $ | 89,695,509 | |||||||||
The following table sets forth our financial instruments carried at fair value within the ASC 820 hierarchy and using the lowest level of input as of December 31, 2012: | |||||||||||||||||
Financial Instruments | |||||||||||||||||
Carried at Fair Value | |||||||||||||||||
Quoted prices | Significant other | Significant | |||||||||||||||
in active Markets | Observable | unobservable | |||||||||||||||
for identical items | Inputs | inputs | |||||||||||||||
(Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||||
Assets: | |||||||||||||||||
Cash and cash equivalents | $ | 68,416,308 | $ | — | $ | — | $ | 68,416,308 | |||||||||
Short-term investments | — | 18,898,136 | — | 18,898,136 | |||||||||||||
Total cash and investments | $ | 68,416,308 | $ | 18,898,136 | $ | — | $ | 87,314,444 | |||||||||
There were no transfers into and out of each level of the fair value hierarchy for assets measured at fair value for the nine months ended September 30, 2013 and the year ended December 31, 2012. | |||||||||||||||||
Realized gains and losses from sales of the Company’s investments are included in “Interest and other income” during the period when realized. Unrealized gains and losses are determined using the specific identification method and are recognized as a separate component of equity in other comprehensive income (loss) at the balance sheet date unless the loss is determined to be “other-than-temporary.” | |||||||||||||||||
In determining whether a decline in FV below original cost is other-than-temporary, the Company uses a systematic methodology that considers all available evidence, including the credit rating of the relevant trust, the parity score (a measure of the trust’s ability to meet its obligations as they come due), general market conditions, and industry and sector performance, among other factors. The Company considers the duration and extent to which the FV is less than cost, as well as the Company’s intent and ability to hold the investment until recovery or, if necessary, to the instrument’s maturity. When determining whether an impairment is other-than-temporary the Company also considers the following information: (i) if the market value of the investment is below its current carrying value for an extended period, which the Company generally defines as nine to twelve months; (ii) if the issuer has experienced significant financial declines; or (iii) if the issuer has experienced significant changes in its credit quality, among other factors | |||||||||||||||||
Accumulated Other Comprehensive (Loss) — Accumulated other comprehensive (loss) is comprised of unrealized gains and losses on marketable securities and is disclosed as a component of stockholders’ equity. The Company had ($3,253) of net unrealized losses on its investments at December 31, 2012. | |||||||||||||||||
Comprehensive (loss) consists of the following components for the three and nine months ended September 30, 2013 and 2012: | |||||||||||||||||
Three months ended | Nine months ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Net loss | $ | (4,767,193 | ) | $ | (5,695,344 | ) | $ | (14,533,121 | ) | $ | (19,194,188 | ) | |||||
Change in unrealized gain (loss) on marketable securities | ― | 35,415 | 3,253 | 17,296 | |||||||||||||
Total comprehensive loss | $ | (4,767,193 | ) | $ | (5,659,929 | ) | $ | (14,529,868 | ) | $ | (19,176,892 | ) | |||||
Stock-based Compensation— Stock-based compensation cost is estimated at the grant date based on the fair value of the award and is recognized as expense over the requisite service period of the award. The fair value of restricted stock awards is determined by reference to the fair market value of our common stock on the date of grant. We use the Black-Scholes model to value service condition and performance condition option awards. For awards with only service conditions and graded-vesting features, we recognize compensation cost on a straight-line basis over the requisite service period. For awards with performance conditions granted we recognize compensation cost over the expected period to achieve the performance conditions, provided achievement of the performance conditions are deemed probable. | |||||||||||||||||
A summary of all stock awards as of September 30, 2013, and changes during the nine months ended September 30, 2013, is as follows: | |||||||||||||||||
Stock Awards (000s) | Time-Based | Performance-Based Awards | Restricted Stock and Restricted Stock Units | Total Stock Awards | |||||||||||||
Stock Awards | |||||||||||||||||
Awards outstanding at 12/31/2012 | 3,926 | 647 | 604 | 5,177 | |||||||||||||
2013 grants | 25 | — | 231 | 256 | |||||||||||||
2013 exercises | (31 | ) | (158 | ) | (62 | ) | (251 | ) | |||||||||
2013 forfeitures | (186 | ) | (14 | ) | (12 | ) | (212 | ) | |||||||||
Awards outstanding at 9/30/2013 | 3,734 | 475 | 761 | 4,970 | |||||||||||||
Our statements of comprehensive loss include the following stock-based compensation expense: | |||||||||||||||||
Three months ended September 30, | Nine months Ended September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Research and development | $ | 382,000 | $ | 36,603 | $ | 653,517 | $ | 326,458 | |||||||||
General and administrative | 1,182,561 | 457,841 | 2,551,899 | 1,661,464 | |||||||||||||
Operating expense | 1,564,561 | 494,444 | 3,205,416 | 1,987,922 | |||||||||||||
Tax benefit | — | — | — | — | |||||||||||||
Net expense | $ | 1,564,561 | $ | 494,444 | $ | 3,205,416 | $ | 1,987,922 | |||||||||
Unrecognized stock-based compensation expense, including time-based options, performance-based options and restricted stock awards, expected to be recognized over an estimated weighted-average amortization period of 1.5 years, was $2.8 million at September 30, 2013. | |||||||||||||||||
Stock Plans | |||||||||||||||||
On November 20, 1996, the Company established a Stock Option Plan (the “Option Plan”) and authorized the issuance of options for up to 1,605,310 shares of common stock to attract and retain quality employees and to allow such employees to participate in the growth of the Company. In June 2000, the stockholders approved the POZEN Inc. 2000 Equity Compensation Plan (the “2000 Plan”). The 2000 Plan became effective upon the completion of the Company’s initial public offering in October 2000, after which time no further grants were made under the Option Plan. At adoption, the 2000 Plan authorized up to 3,000,000 shares of common stock for issuance under the terms of the 2000 Plan. In May 2004, the stockholders approved an amendment to and restatement of the 2000 Plan. The amendment to the 2000 Plan provided for an increase in the number of shares of common stock authorized for issuance under the 2000 Plan, from 3,000,000 to 5,500,000, or an increase of 2,500,000 shares. In addition, the amendment to the 2000 Plan limited the number of shares that may be issued pursuant to grants other than options under the 2000 Plan to 2,000,000 shares and made certain other clarifying changes. In June 2007, the stockholders approved the amendment and restatement of the 2000 Plan to, among other things, increase the number of shares authorized for issuance under the 2000 Plan from 5,500,000 to 6,500,000 shares and continue the various performance criteria for use in establishing specific vesting targets for certain awards under the 2000 Plan so as to qualify the compensation attributable to any such awards as performance-based compensation under Section 162(m) of the Internal Revenue Code of 1986, as amended and the promulgated thereunder, the Code. | |||||||||||||||||
In June 2010, our stockholders approved the POZEN Inc. 2010 Equity Compensation Plan, or the 2010 Plan. The 2010 Plan is a successor incentive compensation plan to the 2000 Plan and provides the Company with an omnibus plan to design and structure grants of stock options, stock units, stock awards, stock appreciation rights and other stock-based awards for selected individuals in our employ or service. The 2000 Plan was merged with and into the 2010 Plan and all grants outstanding under the 2000 Plan were issued or transferred under the 2010 Plan. No further grants will be made under the 2000 Plan. | |||||||||||||||||
The 2010 Plan provides for grants of incentive stock options, nonqualified stock options, stock awards, and other stock-based awards, such as restricted stock units and stock appreciation rights (“SARs”), to employees, non-employee directors, and consultants and advisors who perform services for us and our subsidiaries. The 2010 Plan authorizes up to 7,452,327 shares of common stock for issuance, which includes 2,000,000 shares of our common stock which are in excess of the number of shares previously reserved under the 2000 Plan. The maximum number of shares for which any individual may receive grants in any calendar year is 1,000,000 shares. The Compensation Committee of the Board of Directors, which administers the 2010 Plan, will determine the terms and conditions of options, including when they become exercisable. Neither our Board nor the Committee can amend the 2010 Plan or options previously granted under the Plan to permit a repricing of options or SARs, without prior stockholder approval. If options granted under the 2010 Plan expire or are terminated for any reason without being exercised, or if stock awards, performance units, or other stock-based awards are forfeited or otherwise terminate, the shares of common stock underlying the grants will again be available for awards granted under the 2010 Plan. | |||||||||||||||||
Time-Based Stock Awards | |||||||||||||||||
Historically, the fair value of each time-based award has been estimated on the date of grant using the Black-Scholes option valuation model, which uses the assumptions described below. Our weighted-average assumptions used in the Black-Scholes valuation model for equity awards with time-based vesting provisions granted for the three and nine months ended September 30, 2013 and 2012 are shown in the following table: | |||||||||||||||||
Three months ended | Nine months ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Expected volatility | * | * | 63.7 | % | 68.0 –72.3 | % | |||||||||||
Expected dividends | * | * | 0 | % | 0 | % | |||||||||||
Expected terms | * | * | 6.0 Years | 6.0 Years | |||||||||||||
Risk-free interest rate | * | * | 1.25 | % | 0.91–1.33 | % | |||||||||||
* No time-based stock awards were issued during the three month periods ended September 30, 2013 and September 30, 2012. | |||||||||||||||||
For the nine months ended September 30, 2013 and 2012, the expected volatility rate was estimated based on an equal weighting of the historical volatility of POZEN common stock over approximately a six-year period. For the nine months ended September 30, 2013 and 2012, the expected term was based upon average historical terms to exercise. The risk-free interest rate is based on six-year U.S. Treasury securities. The pre-vesting forfeiture rates used of the nine months ended September 30, 2013 and 2012 were based on historical rates. We adjust the estimated forfeiture rate based upon actual experience. | |||||||||||||||||
A summary of the time-based stock awards as of September 30, 2013, and changes during the nine months ended September 30, 2013, are as follows: | |||||||||||||||||
Time-Based Stock Awards | Underlying | Weighted- | Average Remaining Contractual | Aggregate Intrinsic | |||||||||||||
Shares | Average | Term | Value | ||||||||||||||
(000s) | Exercise | (years) | (000s) | ||||||||||||||
Price | |||||||||||||||||
Outstanding at December 31, 2012 | 3,926 | $ | 8.11 | 5.3 | $ | 443 | |||||||||||
Granted | — | — | |||||||||||||||
Exercised | (25 | ) | 4.34 | ||||||||||||||
Forfeited or expired | (81 | ) | 5.25 | ||||||||||||||
Outstanding at March 31, 2013 | 3,820 | 8.2 | 5.1 | $ | 659 | ||||||||||||
Exercisable at March 31, 2013 | 2,878 | $ | 9.28 | 4.1 | $ | 104 | |||||||||||
Vested or expected to vest at March 31, 2013 | 3,679 | $ | 8.2 | 5.1 | $ | 635 | |||||||||||
Granted | 25 | 5.42 | |||||||||||||||
Exercised | — | — | |||||||||||||||
Forfeited or expired | (86 | ) | 10.39 | ||||||||||||||
Outstanding at June 30, 2013 | 3,759 | 8.13 | 4.9 | $ | 415 | ||||||||||||
Exercisable at June 30, 2013 | 2,819 | $ | 9.22 | 3.9 | $ | 62 | |||||||||||
Vested or expected to vest at June 30, 2013 | 3,642 | $ | 8.13 | 4.9 | $ | 400 | |||||||||||
Granted | — | — | |||||||||||||||
Exercised | (6 | ) | 4.6 | ||||||||||||||
Forfeited or expired | (19 | ) | 4.76 | ||||||||||||||
Outstanding at September 30, 2013 | 3,734 | 8.15 | 4.7 | $ | 1,097 | ||||||||||||
Exercisable at September 30, 2013 | 2,978 | $ | 8.97 | 3.9 | $ | 395 | |||||||||||
Vested or expected to vest at September 30, 2013 | 3,174 | $ | 8.15 | 4.7 | $ | 933 | |||||||||||
The aggregate intrinsic value of options outstanding represents the pretax value (the period’s closing market price, less the exercise price, times the number of in-the-money options) that would have been received by all option holders had they exercised their options at the end of the period. The exercise price of stock options granted during the nine months ended September 30, 2013 and 2012 was equal to the market price of the underlying common stock on the grant date. A total of 39,000 options were exercised during the nine months ended September 30, 2013, while a total of 239,000 stock options were exercised during the nine months ended September 30, 2012. | |||||||||||||||||
Restricted Stock and Restricted Stock Units | |||||||||||||||||
For the three and nine months ended September 30, 2013, the Company recognized $0.3 million and $0.9 million, respectively, in compensation expense related to restricted stock units. | |||||||||||||||||
A summary of the restricted stock awards as of September 30, 2013, and changes during the three and nine months ended September 30, 2013, are as follows: | |||||||||||||||||
Underlying | Weighted-Average Exercise Price | ||||||||||||||||
Shares | |||||||||||||||||
(000s) | |||||||||||||||||
Restricted stock outstanding at December 31, 2012 | 604 | $ | 5.68 | ||||||||||||||
Granted | 206 | 5.91 | |||||||||||||||
Vested and released | (33 | ) | 4.72 | ||||||||||||||
Forfeited or expired | (5 | ) | 5.36 | ||||||||||||||
Restricted stock outstanding at March 31, 2013 | 772 | $ | 5.78 | ||||||||||||||
Granted | 25 | 5.42 | |||||||||||||||
Vested and released | 30 | 6.59 | |||||||||||||||
Forfeited or expired | — | — | |||||||||||||||
Restricted stock outstanding at June 30, 2013 | 767 | $ | 5.74 | ||||||||||||||
Granted | — | — | |||||||||||||||
Vested and released | — | — | |||||||||||||||
Forfeited or expired | (6 | ) | 5.99 | ||||||||||||||
Restricted stock outstanding at September 30, 2013 | 761 | $ | 5.74 | ||||||||||||||
As of September 30, 2013 there was an aggregate $1.5 million of unrecognized compensation expense related to unvested restricted stock units. Of the aggregate amount, $65,000 unrecognized compensation expense related to unvested restricted stock units under the March 15, 2010 award of 87,180 restricted stock units with a grant-date per-share fair value of $6.50, $186,000 unrecognized compensation expense related to unvested restricted stock units under the 2011 award of 110,870 restricted stock units with a grant-date per-share fair value of $4.60, $187,000 unrecognized compensation expense related to unvested restricted stock units under the March 2012 award of 191,060 restricted stock units with a grant-date per-share fair value of $4.72, $1.0 million unrecognized compensation expense related to unvested restricted stock units under the March 2013 award of 206,049 restricted stock units with a grant-date per-share fair value of $5.91, and $94,000 unrecognized compensation expense related to unvested restricted stock units under the June 2013 award of 25,000 restricted stock units with a grant-date per-share fair value of $5.42. | |||||||||||||||||
There were 587,000 unvested restricted stock units outstanding at September 30, 2013. There were 523,962 unvested restricted stock units outstanding at September 30, 2012. The total fair value of restricted stock that vested during the nine months ended September 30, 2013 was $347,000. | |||||||||||||||||
Performance-Based Awards | |||||||||||||||||
On May 6, 2008, pursuant to an incentive program (the “PN incentive program”) approved by the Compensation Committee of the Board of Directors of the Company, stock options were granted to all of the Company’s employees, including its executive officers, to purchase an aggregate of 281,433 shares of common stock. On September 10, 2008, additional stock options were granted under the PN incentive program, to purchase 11,700 shares of common stock. Twenty-five percent (25%) of the PN incentive program options granted vested during September 2009, upon the acceptance by the FDA of the NDA for VIMOVO (naproxen and esomeprazole magnesium) delayed release tablets, formerly referred to as PN 400). The remaining seventy-five percent (75%) of the options granted vested on April 30, 2010 upon the Company’s receipt of an action letter from the FDA indicating approval of the NDA for VIMOVO. The options have a ten-year term. The May 6, 2008 and September 10, 2008 option grants have exercise prices of $14.45 per share and $10.82 per share, respectively, which was equal to the NASDAQ reported market closing price of the Company’s common stock on the date of grant. The weighted average grant-date fair value of these performance-based options was $9.66 per share and $7.08 per share for the May 6, 2008 and September 10, 2008 option grants, respectively. The fair value of the performance-based options granted under the PN incentive program was estimated as of the grant date using the Black-Scholes option valuation model without consideration of the performance measures. The options also include provisions that require satisfactory employee performance prior to vesting. Additionally, 20,000 options were granted to an executive officer on May 6, 2008 under the PN incentive plan, with identical grant and exercise terms except that 100% of the options granted vested during September 2009, upon acceptance by the FDA of the NDA for VIMOVO. The Company recognized all compensation costs for these awards over the expected service period. | |||||||||||||||||
On October 1, 2011, pursuant to an incentive program (the “PA32540 incentive program”) approved by the Compensation Committee of the Board of Directors of the Company, stock options were granted to all of the Company’s employees, including its executive officers, to purchase an aggregate of 453,960 shares of common stock. The underlying stock options and RSUs are performance-based and focus on the successful completion of certain value-enhancing events for the Company’s PA32540 product candidate. Each of the grants described above were granted on October 1, 2011 pursuant to, and subject to, the terms of the Company’s 2010 Omnibus Equity Compensation Plan (the “Equity Plan”). The stock options have a ten-year term and have an exercise price equal to the closing sale price of the Company’s common stock, as reported on the NASDAQ Global Market, on the date immediately preceding the date of grant, October 1, 2011. The underlying stock options and RSUs vest in accordance with the following schedule: (a) one-third (1/3) upon the acceptance of the filing of a new drug application (the “NDA”) for PA32540, assuming the NDA filing is made prior to December 31, 2012, (b) one-third (1/3) upon first cycle NDA approval of PA32540 (otherwise 16.5% upon NDA approval after first cycle), and (c) one-third (1/3) upon execution of a significant partnering transaction for PA32540 in a major territory as determined by the Compensation Committee of the Company, in its sole discretion, at the time of such transaction, subject in each case to continued employment or service to the Company. At December 31, 2012, 132,883 options were forfeited in acknowledgement that the NDA filing was not made prior to December 31, 2012. | |||||||||||||||||
On October 25, 2012, the Compensation Committee of the Board as part of the Company’s initiative to retain, award and incentive its employees, approved the performance-based incentive awards for all employees of the Company, including the executive officers. During a pre-submission meeting with respect to its NDA for PA32540 in April 2012, the FDA suggested that the Company also seek approval for a lower dose formulation of the product containing 81 mg of enteric coated aspirin as part of its NDA for PA32540. The Company included data and information relating to a lower dose formulation, PA8140, in its NDA. Generation of additional information with respect to PA8140 and incorporation of data into the NDA for PA32540 delayed the submission of the NDA from the original planned submission date in the third quarter of 2012 until the first quarter of 2013. | |||||||||||||||||
The Company believes that seeking approval for lower dose formulation in addition to PA32540 will add significant value to the products in the market place. However, the addition of PA8140 to the NDA had an impact on the Company’s ability to achieve one or more of the performance conditions of the PA Incentive Program, including the Company’s ability to submit the NDA by December 31, 2012. Therefore, the Compensation Committee granted the performance-based incentive awards both to compensate the employees for the expected loss of value under the PA Incentive Program, as well as to provide additional incentive to employees to complete the value-added activities required for submission and approval of the lower dose product. The Compensation Committee granted an aggregate of 208,740 restricted stock units to various employees of the Company, including 105,000 restricted stock units granted to the Company’s named executive officers. The restricted stock units are performance-based and focus on the successful completion of certain value-enhancing events for the Company’s lower dose PA product candidate, PA8140. Each of the restricted stock units described about were granted on October 25, 2011 pursuant to, and subject to, the terms of the Company’s 2010 Omnibus Equity Compensation Plan. Such restricted stock units shall vest in accordance with the following schedule: (a) one-half (1/2) upon the acceptance by the FDA of the filing of an NDA for a lower dose PA product, PA8140, and (b) one-half (1/2) upon approval by the FDA of an NDA for a lower dose PA product, PA8140. | |||||||||||||||||
A summary of the performance-based stock awards as of September 30, 2013, and changes during the nine months ended September 30, 2013, are as follows: | |||||||||||||||||
Underlying | Weighted-Average Exercise Price | ||||||||||||||||
Shares | |||||||||||||||||
(000s) | |||||||||||||||||
Performance-based outstanding at December 31, 2012 | 647 | $ | 6.96 | ||||||||||||||
Granted | — | — | |||||||||||||||
Exercised | — | — | |||||||||||||||
Forfeited or expired | (12 | ) | 8.55 | ||||||||||||||
Performance-based outstanding at March 31, 2013 | 635 | $ | 6.93 | ||||||||||||||
Granted | — | — | |||||||||||||||
Exercised | (105 | ) | 6.29 | ||||||||||||||
Forfeited or expired | — | — | |||||||||||||||
Performance-based outstanding at June 30, 2013 | 530 | $ | 7.06 | ||||||||||||||
Granted | — | — | |||||||||||||||
Exercised | (53 | ) | 2.28 | ||||||||||||||
Forfeited or expired | (2 | ) | 3.81 | ||||||||||||||
Performance-based outstanding at September 30, 2013 | 475 | $ | 7.61 | ||||||||||||||
During the nine months ended September 30, 2013, there was $1,354,262 expense recorded related to the achievement of vesting criteria for performance-based awards under the PA32540 and PA8140 incentive programs. As of September 30, 2013, there was $621,000 in unrecognized compensation expense related to performance-based awards granted under the PA32540 and PA8140 incentive programs and there was no unrecognized compensation expense related to performance-based awards granted under the PN incentive program. The September 30, 2013 amount is expected to be recognized at the time of the grant vesting over the period ending March 31, 2014. Under the PA32540 and PA8140 incentive programs, there were 228,400 unvested performance-based options outstanding at September 30, 2013. A total of 230,207 performance-based awards vested during the nine months ended September 30, 2013 and no performance-based awards vested during the nine months ended September 30, 2012. There were 249,900 vested performance-based options outstanding at September 30, 2013. There were 2,253 awards forfeited during the nine months ended September 30, 2013, and 27,300 awards forfeited during the nine months ended September 30, 2012. A total of 157,685 performance-based awards were exercised during the nine months ended September 30, 2013 and no performance-based awards were exercised during the nine months ended September 30, 2012. At September 30, 2013, the performance-based options had an intrinsic value of $1.4 million and a remaining weighted contractual life of 5.3 years. | |||||||||||||||||
Net Loss Per Share— Basic and diluted net income or loss per common share amounts have been computed using the weighted-average number of shares of common stock outstanding for the nine months ended September 30, 2013 and 2012. During the nine months ended September 30, 2013 and 2012, the Company had potential common stock equivalents related to its outstanding stock options. These potential common stock equivalents were not included in diluted loss per share, if the effect would have been antidilutive. The Company has excluded the impact of any shares which might be issued under the Rights Plan, detailed below, from the earnings per share calculation because the Rights are not exercisable since the specified contingent future event has not occurred. | |||||||||||||||||
Reconciliation of denominators for basic and diluted earnings per share computations: | |||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Basic weighted average shares outstanding | 30,476,562 | 30,084,315 | 30,405,543 | 30,019,165 | |||||||||||||
Effect of dilutive employee and director awards | — | — | — | — | |||||||||||||
Diluted weighted-average shares outstanding and assumed conversions | 30,476,562 | 30,084,315 | 30,405,543 | 30,019,165 | |||||||||||||
Rights Plan/Series A Junior Participating Preferred Stock— In January 2005, the Company approved a stockholder rights plan (the “Rights Plan”), pursuant to which the Company entered into a Rights Agreement dated January 12, 2005 with StockTrans, Inc., as Rights Agent, and the Company declared a dividend of a right to acquire one preferred share purchase right (a “Right”) for each outstanding share of the Company’s Common Stock, $0.001 par value per share, to stockholders of record at the close of business on January 28, 2005. Generally, the Rights only are triggered and become exercisable if a person or group acquires beneficial ownership of 15 percent or more of the Company’s common stock or announces a tender offer for 15 percent or more of the Company’s common stock. The Rights Plan is similar to plans adopted by many other publicly-traded companies. The effect of the Rights Plan is to discourage any potential acquirer from triggering the Rights without first convincing POZEN’s Board of Directors that the proposed acquisition is fair to, and in the best interest of, the shareholders and the Company. The provisions of the Plan will substantially dilute the equity and voting interest of any potential acquirer unless the Board of Directors determines that the proposed acquisition is in the best interest of the shareholders. In connection with the Plan, the Company designated 90,000 shares of its authorized Preferred Stock as Series A Junior Participating Preferred Stock. Each Right, if and when exercisable, will entitle the registered holder to purchase from the Company one one-thousandth of a share of Series A Junior Participating Preferred Stock, $0.001 par value per share, at a purchase price of $80.00 for each one one-thousandth of a share, subject to adjustment. Each holder of a Right (except for the Acquiring Person (as defined in the Rights Plan), whose Rights will be null and void upon such event) shall thereafter have the right to receive, upon exercise, that number of shares of Common Stock of the Company (or, in certain circumstances, cash, property or other securities of the Company) which equals the exercise price of the Right divided by 50% of the current market price (as defined in the Rights Agreement) per share of Common Stock at the date of the occurrence of such event. The Rights can be terminated by POZEN’s Board of Directors and are subject to optional redemption by the Company at $0.001 per Right. The Rights Plan has a 10-year term and contains provisions requiring a periodic review and evaluation by the Board of Directors. | |||||||||||||||||
At September 30, 2013, shares of our common stock reserved for future issuance are as follows: | |||||||||||||||||
Common shares available for grant under stock option plans | 1,729,571 | ||||||||||||||||
Common shares issuable pursuant to options and restricted stock units granted under equity compensations plans | 4,970,129 | ||||||||||||||||
Rights Plan shares issuable as Series A Junior Participating Preferred Stock | 90,000 | ||||||||||||||||
Total Reserved | 6,789,700 | ||||||||||||||||
Leases— On February 16, 2009, the Company modified certain terms to our existing lease agreement, dated November 21, 2001, relating to approximately 17,009 square feet of office space located at Exchange Office Building, Chapel Hill, North Carolina. Under the terms of the modification, the lease term was extended for an additional 5 years and 7 months, terminating on September 30, 2015. The modification also provides the Company with a reduced notice period of 7 months for renewals of the lease. The Company is also entitled to a 3-year lease extension option available at the end of the term and a first offer right on available space located within the Exchange Office Building property. As a result of entering into the modification, the Company’s noncancellable future minimum lease payments for operating leases increased by approximately $2.7 million over the lease term. The Company is recognizing rent expense on a straight-line basis over the term of the lease which resulted in a deferred rent balance of $153,464 at September 30, 2013. | |||||||||||||||||
New Accounting Pronouncements—In February 2013, the FASB issued a final rule, ASU 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, related to the reporting of amounts reclassified out of accumulated other comprehensive income that requires entities to report, either on their income statement or in a footnote to their financial statements, the effects on earnings from items that are reclassified out of other comprehensive income. The new accounting rules were effective for the Company in the first quarter of 2013. The adoption of the new accounting rule in the first quarter of 2013 did not have a material effect on the Company’s financial condition, results of operations or cash flows. | |||||||||||||||||
Contingencies— We and GSK - received Paragraph IV Notice Letters from Par Pharmaceuticals, Inc. ("Par"), Alphapharm Pty Ltd. ("Alphapharm"), Teva Pharmaceuticals, USA, Inc. (“Teva”), and Dr. Reddy's Laboratories, Inc. (“Dr. Reddy’s”) informing us that each company (or in the case of Alphapharm, its designated agent in the United States, Mylan Inc. (“Mylan”), had filed an Abbreviated New Drug Application, or ANDA, with the FDA seeking approval to market sumatriptan 85 mg/naproxen sodium 500 mg tablets. Par, Alphapharm, Teva, and Dr. Reddy’s each indicated in their respective Notice Letters that they intended to market a generic version of Treximet tablets before the expiration of U.S. Patent Nos. 6,060,499, or the ‘499 patent, 6,586,458, or the ‘458 patent and 7,332,183, or the '183 patent, listed with respect to Treximet in the FDA’s Approved Drug Products with Therapeutic Equivalents Evaluation publication (commonly referred to as the “Orange Book”). GSK advised us that it elected not to exercise its first right to bring infringement suits against Par, Alphapharm, Teva, and Dr. Reddy’s. Accordingly, we filed suit against Par on November 14, 2008, Alphapharm and Mylan on January 2, 2009, Teva, on April 14, 2009, and Dr. Reddy’s on August 21, 2009, all in the United States District Court for the Eastern District of Texas. On April 14, 2010, we announced that we had entered into a Settlement Agreement with Teva. Under the terms of the Settlement Agreement, Teva was dismissed without prejudice from the consolidated litigation currently pending, but agreed to be bound by the outcome of such litigation or any resulting settlements with third parties. On August 8, 2011, we announced that on August 5, 2011, the District Court ruled the ʼ499 patent and the ʼ458 patent to be valid, enforceable and infringed by Par, Alphapharm and Dr. Reddy’s. A third patent, the ʼ183 patent, covering the Treximet formulation was held to be valid, enforceable and infringed by Par and Dr. Reddy’s. The ʼ183 patent was not asserted against Alphapharm. The District Court also ordered that defendants’ ANDAs not be approved by the FDA until, with respect to Par and Dr. Reddy’s, at least the expiration of the ʼ183 on October 2, 2025, and with respect to Alphapharm the expiration of the ʼ499 and ʼ458 patents on August 14, 2017. On September 6, 2011, we announced that Par, Alphapharm, and Dr. Reddy’s had each appealed the decision of the District Court to the United States Court of Appeals for the Federal Circuit. (Appeal Nos. 2011-1584, -1585, and -1586) Alphapharm also separately appealed the District Court’s judgment denying its request for attorneys’ fees (Appeal No. 2012-1023). On May 10, 2012, the Federal Circuit heard arguments on each of the appeals. On June 5, 2012, the Federal Circuit issued an order affirming the District Court’s denial of Alphapharm’s request for attorneys’ fees. On September 28, 2012, the Federal Circuit affirmed the lower court ruling which held that ‘499 and ʼ458 patents were valid, enforceable and infringed by Par, Alphapharm, and Dr. Reddy’s. The ʼ183 patent covering the Treximet formulation was also valid, enforceable and infringed by Par and Dr. Reddy's. The ʼ183 patent was not asserted against Alphapharm. Par and Dr. Reddy's petitioned the Federal Circuit for a rehearing en banc in connection with the portion of the decision holding that the ‘183 patent was infringed by their respective ANDA products. The Federal Circuit denied the petition for rehearing on July 26, 2013. | |||||||||||||||||
On April 15, 2011, the Company and GSK received a Paragraph IV Notice Letter from Sun Pharma Global FZE (“Sun”) informing us that Sun had filed an ANDA, with the FDA seeking approval to market a generic version of Treximet tablets before the expiration of ’499, ’458 and ’183 patents. Sun’s Paragraph IV Notice Letter asserts that its generic product will not infringe the listed patents or that the listed patents are invalid or unenforceable. On May 26, 2011, the Company filed suit against Sun for patent infringement in the United States District Court for the Eastern District of Texas. The Company amended its complaint on November 11, 2011 to include U.S. Patent No. 8,022,095, or the ‘095 patent, which was listed in the Orange Book subsequent to the filing of the suit. The parties agreed that the claim construction entered by the District Court in the prior Treximet litigation will control this litigation. On July 16, 2013, we entered into a Settlement Agreement with Sun. Under the terms of the Settlement Agreement, which are confidential, Sun was dismissed without prejudice from the currently pending litigation. In compliance with U.S. law, the Settlement Agreement was submitted to the U.S. Federal Trade Commission and the Department of Justice for review. On September 17, 2013, the District Court entered an order dismissing the case with prejudice. | |||||||||||||||||
On November 23, 2011, the Company entered into the Purchase Agreement, with CII, pursuant to which we sold, and CII purchased, our right to receive future royalty payments arising from U.S. sales of MT 400, including Treximet. Under the Purchase Agreement, CII assumed financial responsibility for and would receive the proceeds, if any, from our patent litigation concerning Treximet against Par, Alphapharm, Dr. Reddy’s, and Sun. | |||||||||||||||||
The Company has no continuing involvement in the selling or marketing of Treximet, nor does it have any impact on the future royalty stream. The upfront payment of $75 million received is non-refundable, is fixed in amount and is not dependent on the future royalty stream of Treximet. | |||||||||||||||||
On March 14, 2011, we and AstraZeneca received a Paragraph IV Notice Letter from Dr. Reddy’s informing us that it had filed an ANDA with the FDA seeking regulatory approval to market a generic version of VIMOVO before the expiration of U.S. Patent No. 6,926,907, or the '907 patent in 2023. The patent is assigned to us and listed with respect to VIMOVO in the Orange Book. On September 19, 2011, Dr. Reddy’s amended its ANDA to include a Paragraph IV certification against U.S. Patent Nos. 5,714,504, or the '504 patent, 6,369,085, or the '085 patent, 6,875,872, or the '872 patent, 7,411,070 or the '070 patent, and 7,745,466, or the '466 patent, which are assigned to AstraZeneca or its affiliates and listed in the Orange Book with respect to VIMOVO. The patents listed in the Orange Book which are owned by AstraZeneca or its affiliates expire at various times between 2014 and 2018. AstraZeneca has advised us that it has elected to exercise its first right to prosecute the infringement suit against Dr. Reddy’s. Accordingly, we and AstraZeneca filed suit against Dr. Reddy’s on April 21, 2011 in the United States District Court for the District of New Jersey, asserting only the ‘907 patent against Dr. Reddy’s. An amended complaint was filed on October 28, 2011 to include the AstraZeneca patents. The case has been consolidated with the case against Lupin, Ltd. (“Lupin”) and Anchen Pharmaceuticals, Inc. (“Anchen”) (described below). On December 19, 2012, the District Court conducted a pre-trial “Markman” hearing to determine claim construction. On April 15, 2013 a Stipulation of Partial Dismissal was filed which sought dismissal of all infringement claims relating to the '504 patent, the '085 patent, the '872 patent, the '070 patent, and the '466 patent (which are each assigned to AstraZeneca), as well as Dr. Reddy's defenses and counterclaims relating to those patents. On April 15, 2013 a Stipulation of Partial Dismissal was filed which sought dismissal of all infringement claims relating to the '504 patent, the '085 patent, the '872 patent, the '070 patent, and the '466 patent (which are each assigned to AstraZeneca), as well as Dr. Reddy's defenses and counterclaims relating to those patents. On April 18, 2013, the District Court issued a Stipulation and Order dismissing with prejudice those claims and defenses. On May 1, 2012, the Court issued a Markman Order construing the claim terms disputed by the parties. | |||||||||||||||||
On June 13, 2011, we and AstraZeneca received a Paragraph IV Notice Letter from Lupin informing us that Lupin had filed an ANDA with the FDA seeking regulatory approval to market a generic version of VIMOVO before the expiration of the ‘907 patent, which is assigned to the Company, the 504 patent, the '085 patent, the '872 patent, the '070 patent, the '466 patent, each of which assigned to AstraZeneca or its affiliates. The patents are listed with respect to VIMOVO in the Orange Book and expire at various times between 2014 and 2023. Lupin’s Paragraph IV Notice Letter asserts that its generic product will not infringe the listed patents or that the listed patents are invalid or unenforceable. AstraZeneca has advised us that it has elected to exercise its first right to prosecute the infringement suit against Lupin and, accordingly, we and AstraZeneca filed suit against Lupin on July 25, 2011 in the United States District Court for the District of New Jersey. The case has been consolidated with the case against Dr. Reddy’s and is currently in the discovery phase. On December 19, 2012, the District Court conducted a pre-trial “Markman” hearing to determine claim construction. On May 1, 2012, the Court issued a Markman Order construing the claim terms disputed by the parties. | |||||||||||||||||
On September 19, 2011, we and AstraZeneca received a Paragraph IV Notice Letter from Anchen informing us, that Anchen had filed an ANDA with the FDA seeking regulatory approval to market a generic version of VIMOVO before the expiration of the ‘907 patent, the '085 patent, the '070 patent, and the '466 patent. The patents are among those listed with respect to VIMOVO in the Orange Book and expire at various times between 2018 and 2023. Anchen’s Paragraph IV Notice Letter asserts that its generic product will not infringe those five listed patents or that those five listed patents are invalid or unenforceable. AstraZeneca has advised us that it has elected to exercise its first right to prosecute the infringement suit against Anchen and, accordingly, we and AstraZeneca filed suit against Anchen on October 28, 2011, in the United States District Court for the District of New Jersey. The case has been consolidated with the case against Dr. Reddy’s. On December 19, 2012, the District Court conducted a pre-trial “Markman” hearing to determine claim construction. On May 1, 2012, the Court issued a Markman Order construing the claim terms disputed by the parties. On October 4, 2013, Anchen filed an amendment to its ANDA seeking to change its Paragraph IV certification to a Paragraph III. It is unclear when or if the FDA will enter Anchen’s amendment. On October 25, 2013, Anchen filed a Motion to Dismiss the case against it, based on its proposed re-certification. Pozen and AZ have yet to file a response to Anchen’s Motion to Dismiss. | |||||||||||||||||
On November 20, 2012 the Company received a Paragraph IV Notice Letter from Dr. Reddy’s, indicating that Dr. Reddy’s had filed a second ANDA with the FDA seeking regulatory approval to market a generic version of VIMOVO. In that Paragraph IV Notice Letter, Dr. Reddy asserts, among other things, that the ‘907 patent is invalid and/or not infringed. AstraZeneca has advised us that it has elected to exercise its first right to prosecute the infringement suit against Dr. Reddy’s on its second ANDA filing and, accordingly, we and AstraZeneca filed suit against Dr. Reddy’s on January 4, 2013, in the United States District Court for the District of New Jersey. On April 15, 2013 a Stipulation of Partial Dismissal was filed which sought dismissal of all infringement claims relating to the '504 patent, the '085 patent, the '872 patent, the '070 patent, and the '466 patent (which are each assigned to AstraZeneca), as well as Dr. Reddy's defenses and counterclaims relating to those patents. On April 15, 2013 a Stipulation of Partial Dismissal was filed which sought dismissal of all infringement claims relating to the '504 patent, the '085 patent, the '872 patent, the '070 patent, and the '466 patent (which are each assigned to AstraZeneca), as well as Dr. Reddy's defenses and counterclaims relating to those patents. On April 18, 2013, the District Court issued a Stipulation and Order dismissing with prejudice those claims and defenses. On May 5, 2013, this case was consolidated with the originally filed Dr. Reddy's case. On June 28, 2013 we and AstraZeneca filed a Motion for Summary Judgment relating to the second ANDA filing that U.S. Patent No. 6,926,907 is not invalid. On August 12, 2013, Dr. Reddy's filed its opposition to the Motion for Summary Judgment. The District Court has yet to rule on the Motion. On October 11, 2013, Dr. Reddy's filed a Motion for Summary Judgment that the product which is the subject matter of its second ANDA does not infringe the ‘907 patent. On November 4, 2013, the Company filed and AstraZeneca filed a response to DRL's Motion for Summary Judgement. The District Court has yet to rule on the Motion. | |||||||||||||||||
On March 29, 2013, we and AstraZeneca received a Paragraph IV Notice Letter from Watson Laboratories, Inc. (“Watson”) informing the companies that it had filed an ANDA with the FDA seeking regulatory approval to market a generic version of VIMOVO before the expiration of the ‘907 patent, which is assigned to the Company and the ‘504 patent, the '085 patent, the ‘424 patent, the '872 patent, the '070 patent, and the '466 patent, each of which assigned to AstraZeneca or its affiliates. The patents are listed with respect to VIMOVO in the Orange Book and expire at various times between 2014 and 2023. Watson’s Paragraph IV Notice Letter asserts that its generic product will not infringe the listed patents or that the listed patents are invalid or unenforceable. On May 10, 2013, we and AstraZeneca filed a patent infringement lawsuit against Watson in the U.S. District Court of New Jersey. A schedule has yet to be set in the case. | |||||||||||||||||
On May 16, 2013, POZEN and AstraZeneca AB received a Paragraph IV Notice Letter from Mylan Pharmaceuticals, Inc. (“Mylan”) informing the companies that it had filed an ANDA with the FDA seeking regulatory approval to market a generic version of VIMOVO™ before the expiration of the ‘907 patent, which is assigned to the Company and the ‘504 patent, the '085 patent, the ‘424 patent, the '872 patent, the '070 patent, and the '466 patent, each of which assigned to AstraZeneca or its affiliates. The patents are listed with respect to VIMOVO™ in the Orange Book and expire at various times between 2014 and 2023. Mylan’s Paragraph IV Notice Letter asserts that its generic product will not infringe the listed patents or that the listed patents are invalid or unenforceable. On June 28, 2013, we and AstraZeneca filed a patent infringement lawsuit against Mylan in the U.S. District Court of New Jersey. A schedule has yet to be set in the case. | |||||||||||||||||
On October 15, 2013, the United States Patent Office issued U.S. Patent No. 8,557,285 (the “’285 patent”). The ‘285 patent, entitled “Pharmaceutical compositions for the coordinated delivery of NSAIDs” and assigned to POZEN, is related to the ‘907 patent. On October 23, 2013, we, and AstraZenenca filed patent infringement lawsuits against Dr. Reddy's, Lupin, Watson and Mylan in the U.S. District Court of New Jersey alleging that their ANDA products infringe the ‘285 patent. Dr. Reddy's, Lupin, Watson and Mylan have yet to answer in those cases. | |||||||||||||||||
As with any litigation proceeding, we cannot predict with certainty the eventual outcome of the patent infringement suit against Dr. Reddy’s, Lupin, Anchen, Watson and Mylan relating to a generic version of VIMOVO. We will have to incur additional expenses in connection with the lawsuits relating to VIMOVO. In the event of an adverse outcome or outcomes, our business could be materially harmed. Moreover, responding to and defending pending litigation will result in a significant diversion of management’s attention and resources and an increase in professional fees. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Summary of Significant Accounting Policies [Abstract] | ' | ||||||||||||||||
Use of Estimates | ' | ||||||||||||||||
Use of Estimates— The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Actual results could differ from the estimates and assumptions used. | |||||||||||||||||
Accrued expenses, including contracted costs | ' | ||||||||||||||||
Accrued expenses, including contracted costs— Significant management judgments and estimates must be made and used in connection with accrued expenses, including those related to contract costs, such as costs associated with clinical trials. Specifically, the Company must make estimates of costs incurred to date but not yet paid for or not yet invoiced in relation to contracted, external costs. The Company analyzes the progress of product development, clinical trial and related activities, invoices received, amounts paid, and budgeted costs when evaluating the adequacy of the accrued liability for these related costs. Certain accrued contract costs, estimated to be payable after more than twelve months, are classified as long-term liabilities rather than as accrued expenses. | |||||||||||||||||
The Company believes that its current assumptions and other considerations used to estimate accrued expenses for the period are appropriate. However, determining the date on which certain contract services commence, the extent of services performed on or before a given date and the cost of such, paid and unpaid, involves subjective judgments and estimates and often must be based upon information provided by third parties. In the event that management does not identify certain contract costs which have begun to be incurred or under- or over-estimates the extent of services performed or the costs of such services, management adjusts costs during the period in which the information becomes available. | |||||||||||||||||
Accrued costs related to product development and operating activities, including clinical trials, based upon the progress of these activities covered by the related contracts, invoices received and estimated costs totaled $1.7 million at September 30, 2013 and $2.0 million at September 30, 2012. The variance, at each of these ending periods, between the actual expenses incurred and the estimated expenses accrued was not material or significant. | |||||||||||||||||
Revenue Recognition | ' | ||||||||||||||||
Revenue Recognition— The Company records revenue under the following categories: sale of royalty rights, licensing revenues consisting of royalty revenues and other licensing revenues, and development revenues. | |||||||||||||||||
Sale of royalty rights last occurred in the year ended December 31, 2011 and reflected the U.S. sales of MT 400, including Treximet® (sumatriptan / naproxen sodium), for which the Company received a purchase price of $71.9 million (net of costs). The Company will receive a twenty percent (20%) interest in any royalties received by the purchaser relating to the period commencing on April 1, 2018. No sale of royalty rights occurred in the quarters ended September 30, 2013. | |||||||||||||||||
Licensing revenue for the three and nine months ended September 30, 2013 was $2.6 million and $5.6 million, respectively. Licensing revenue for the three months ended September 30, 2013 consisted of $1.6 million royalties from sales of VIMOVO® (naproxen / esomeprazole magnesium) delayed release tablets and amortization of the upfront payment for PA8140/PA32540 of $1.0 million. Licensing revenue for the nine months ended September 30, 2013 consisted of $4.6 million of royalties from sales of VIMOVO and $1.0 million of amortization of the upfront payment for PA8140/PA32540. Licensing revenue for the three months ended September 30, 2012 was $0.9 million of royalties from the sales of VIMOVO. Licensing revenue for the nine months ended September 30, 2012 was $4.0 million and was comprised of $3.5 million of VIMOVO royalties and $0.5 million of licensing revenue for MT400. | |||||||||||||||||
With regard to licensing revenues, the Company’s licensing agreements have terms that include royalty payments based on the manufacture, sale or use of the Company’s products or technology. Treximet and VIMOVO royalty revenue has been recognized when earned, as will any other future royalty revenues. For VIMOVO or those future arrangements where royalties are reasonably estimable, the Company recognizes revenue based on estimates of royalties earned during the applicable period and reflects in future revenue any differences between the estimated and actual royalties. These estimates are based upon information reported to the Company by its collaboration partners. | |||||||||||||||||
Also, with regard to the licensing revenues, the Company’s licensing agreements have terms that include upfront payments upon contract signing and additional payments if and when certain milestones in the product’s development or commercialization are reached. | |||||||||||||||||
The Company recognizes revenues from license and collaboration agreements when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the fee is fixed or determinable, and there is reasonable assurance that the related amounts are collectible in accordance with ASC Topic 605, Revenue Recognition (“ASC 605”). Our license and collaboration agreements may contain multiple elements, including grants of licenses to intellectual property rights and agreement to provide research and development services. The deliverables under such arrangements are evaluated under ASC Subtopic 605-25, Multiple-Element Arrangements. Each required deliverable is evaluated to determine whether it qualifies as a separate unit of accounting based on whether the deliverable has “stand-alone value” to the customer. The arrangement’s consideration that is fixed or determinable is then allocated to each separate unit of accounting based on the relative selling price of each deliverable. In general, the consideration allocated to each unit of accounting is recognized as the related goods or services are delivered, limited to the consideration that is not contingent upon future deliverables. When evaluating multiple element arrangements, we consider whether the components of the arrangement represent separate units of accounting. This evaluation requires subjective determinations and requires management to make judgments about the selling price of the individual elements and whether such elements are separable from the other aspects of the contractual relationship. | |||||||||||||||||
Upfront payments for licensing the Company's intellectual property are evaluated to determine if the licensee can obtain stand-alone value from the license separate from the value of the research and development services and other deliverables in the arrangement to be provided by the Company. If the Company determines that the license does not have stand-alone value separate from the research and development services, the license and the services are combined as one unit of account and upfront payments are recorded as deferred revenue in the balance sheet and are recognized as revenue over the estimated performance period that is consistent with the term of the research and development obligations contained in the collaboration agreement. When stand-alone value is identified, the related consideration is recorded as revenue in the period in which the license or other intellectual property rights are delivered. | |||||||||||||||||
In those circumstances where research and development services are combined with the license, and multiple services are being performed such that a common output measure to determine a pattern of performance cannot be discerned, the Company recognizes amounts received on a straight line basis over the performance period. Such amounts are recorded as collaboration revenue. | |||||||||||||||||
Milestone payments along with the refundable portions of up-front payments are recognized as licensing revenue upon the achievement of specified milestones if (i) the milestone is substantive in nature and the achievement of the milestone was not reasonably assured at the inception of the agreement; and (ii) the fees are non-refundable. Any milestone payments received prior to satisfying these revenue recognition criteria are recorded as deferred revenue. | |||||||||||||||||
On March 21, 2011, the Company entered into a license agreement with Cilag GmbH International (“Cilag”) a division of Johnson & Johnson, for the exclusive development and commercialization of MT 400 in Brazil, Colombia, Ecuador and Peru. Cilag’s upfront payment of $257,300, which is refundable under certain conditions, has been deferred until those conditions have been satisfied, which may occur later this year. | |||||||||||||||||
With regard to royalty revenues, royalty revenue from Treximet and VIMOVO is recognized when earned, as will any other future royalty revenues with respect to the manufacture, sale or use of the Company’s products or technology. For Treximet and VIMOVO or those future arrangements where royalties are reasonably estimable, the Company recognizes revenue based on estimates of royalties earned during the applicable period and reflects in future revenue any differences between the estimated and actual royalties. These estimates are based upon information reported to the Company by its collaboration partners. | |||||||||||||||||
On November 23, 2011, the Company entered into a Purchase and Sale Agreement, or the Purchase Agreement, with CPPIB Credit Investments Inc., or CII, pursuant to which the Company sold, and CII purchased, its right to receive future royalty payments arising from U.S. sales of MT 400, including Treximet. Under the Purchase Agreement, the Company received a purchase price of $75 million and will receive a twenty percent (20%) interest in any royalties received by CII relating to the period commencing on April 1, 2018. | |||||||||||||||||
On September 3, 2013, we entered into a license and collaboration agreement with Sanofi US. Under the license agreement, we will have the responsibility for obtaining regulatory approval and Sanofi US will have responsibility for the commercialization of products containing a combination of immediate release omeprazole and 325 mg or less of delayed release aspirin, including PA32540 and PA8140, which are expected to be indicated for use for the secondary prevention of cardiovascular disease in patients at risk for aspirin-associated gastric ulcers. In the event the products are not approved for the expected indications, Sanofi US shall have the right, but not the obligation, to terminate the licensing agreement. Under the license agreement, Sanofi US has the exclusive right to commercialize licensed products in the United States, with the Company retaining the right to commercialize licensed products outside the United States. Sanofi US will have responsibility for all sales, marketing and future development for the licensed products. In consideration for the rights granted to Sanofi US under the License Agreement, Sanofi US paid us an upfront payment of $15 million. The Company is also eligible to receive pre-commercial milestone payments of $20 million and additional payments upon the achievement of specified sales milestones. The Company will also receive tiered royalties ranging from 12.5% to 22.5% on sales of licensed products by Sanofi US, its affiliates and its sublicensees in the United States, subject to certain adjustments specified in the license agreement. | |||||||||||||||||
With regard to development revenue, the Company’s licensing agreements may include payment for development services provided by the Company on an hourly rate and direct expense basis. The Company records such payments as revenue in accordance with the agreements because the Company acts as principal in the transaction. Under the collaboration agreements with AstraZeneca AB ("AstraZeneca") and GlaxoSmithKline ("GSK"), the Company recognizes as development revenue the billings for the direct costs and certain personnel-related time incurred in performing additional development activities described within the related agreements. The collaboration agreements establish the rates for billing personnel-related time incurred and consequently, the associated costs incurred to perform the additional development activities are not separately captured from ongoing personnel costs. | |||||||||||||||||
Cash, Cash Equivalents, Investments and Concentration of Credit Risk | ' | ||||||||||||||||
Cash, Cash Equivalents, Investments and Concentration of Credit Risk —Cash is invested in open-ended money market mutual funds and interest-bearing investment-grade debt securities. Cash is maintained to the extent of a $42,000 letter of credit in compliance with the terms of the Company’s office lease. The Company considers all highly liquid investments with maturities of 90 days or less when purchased to be cash equivalents. | |||||||||||||||||
The Company invests in high-credit quality investments in accordance with its investment policy, which minimizes the possibility of loss; however, given the recent disruption in the credit markets and the downgrades of previous high-credit companies, the possibility of a loss is increased. Investments, other than investments considered to be cash equivalents, that have maturities of greater than 90 days and less than one year are classified as short-term are considered to be available-for-sale and carried at fair value with unrealized gains and losses recognized in other comprehensive income (loss). Investment purchases and sales are recorded on their trade dates. Realized gains and losses are determined using the specific identification method. Marketable and non-marketable investments are evaluated on an on-going basis for market impairment. If the Company determines that a decline of any investment is other-than-temporary, the investment is written down to fair value. For the three months ended September 30, 2013 and 2012, the Company had $14,000 and $65,300, respectively, of interest, bond amortization and other income. For the nine months ended September 30, 2013 and 2012, the Company had $54,400 and $206,600, respectively, of interest, bond amortization and other income. As of September 30, 2013 and 2012, there were no investments in a significant unrealized loss position. | |||||||||||||||||
The money market mutual funds generally seek a high a level of current income that is consistent with the preservation of capital and the maintenance of liquidity. The funds generally are subject to maturity, quality, liquidity and diversification requirements which are designed to help money market funds maintain a stable share price of $1.00. As a result, the funds normally invest in a diversified portfolio of high quality, short-term, dollar-denominated debt securities, including: securities issued or guaranteed as to principal and interest by the U.S. government or its agencies or instrumentalities; certificates of deposit, time deposits, bankers' acceptances and other short-term securities issued by domestic or foreign banks or thrifts or their subsidiaries or branches; repurchase agreements, including tri-party repurchase agreements; asset-backed securities; domestic and dollar-denominated foreign commercial paper and other short-term corporate obligations, including those with floating or variable rates of interest; and dollar-denominated obligations issued or guaranteed by one or more foreign governments or any of their political subdivisions or agencies. | |||||||||||||||||
Cash and cash equivalents include financial instruments that potentially subject the Company to a concentration of credit risk. Cash and cash equivalents are of a highly liquid nature and are held with high credit quality financial institutions and money market mutual fund managers. Cash held directly with financial institutions is insured up to $250,000 per account and any excess amounts are uninsured. The counterparties to the Company’s investment-in interest-bearing corporate debt securities are various major corporations with high credit standings. There were no investments as of September 30, 2013. | |||||||||||||||||
Investments consisted of the following as of December 31, 2012: | |||||||||||||||||
Amortized Cost | Unrealized Gain | Unrealized Loss | Fair Value | ||||||||||||||
Short-term investments - Corporate debt securities | $ | 18,901,389 | $ | 58 | $ | (3,311 | ) | $ | 18,898,136 | ||||||||
Fair Value of Financial Instruments | ' | ||||||||||||||||
Fair Value of Financial Instruments | |||||||||||||||||
Financial instruments consist of cash and cash equivalents, short-term investments, accounts receivable and accounts payable. The carrying values of these amounts approximate the fair value due to their short-term nature. | |||||||||||||||||
Fair Value Measurement | ' | ||||||||||||||||
Fair Value Measurement | |||||||||||||||||
The Company defines fair value (“FV”) as the price that would be received to sell an asset or paid to transfer a liability ("the exit price") in an orderly transaction between market participants at the measurement date. The FV hierarchy for inputs maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. The Company uses the following hierarchy of inputs to measure FV: | |||||||||||||||||
o | Level 1 - quoted prices in active markets for identical assets and liabilities. | ||||||||||||||||
o | Level 2 - observable inputs other than quoted prices in active markets for identical assets and liabilities, including quoted prices in active markets for instruments that are similar or quoted prices in markets that are not active for identical or similar instruments and model-derived valuations in which all significant inputs and value drivers are observable in active markets. | ||||||||||||||||
o | Level 3 - unobservable inputs that are significant to the overall valuation, for which there is little or no market data available and which require the Company to develop its own assumptions. | ||||||||||||||||
The Company values investments using the most observable inputs available that are current as of the measurement date and classifies them according to the lowest level of inputs used. Observable inputs are inputs that market participants would use in pricing the asset or liability developed from market data obtained from independent sources. Unobservable inputs are inputs that reflect the Company’s judgment concerning the assumptions that market participants would use in pricing the asset or liability developed from the best information available under the circumstances. | |||||||||||||||||
The Company targets investment principally in Level 1 and Level 2 cash equivalents and financial instruments and records them at FV. The Company did not rely on Level 3 input for valuation of investments at September 30, 2013 and December 31, 2012. The Company expects that the carrying values of cash equivalents will approximate FV because of their short maturities. | |||||||||||||||||
The Company values its investments in money market mutual funds at the FV of the ownership interests in the funds. The Net Asset Value ("NAV") per unit which is provided by the fund administrator is the primary input into the valuation of the ownership interest. The NAV is based on the FV of the underlying assets owned by the fund, minus its liabilities, divided by the number of shares outstanding. The fund administrator produces a daily NAV that is validated with sufficient observable purchase and sale activity at NAV to support classification of the FV measurement as Level 1. The Company believes that NAV represents the exit value of fund at the measurement date. The underlying fixed income assets owned by the funds are valued principally using a market approach based on quoted prices obtained from the primary or secondary exchanges on which they are traded. When market prices are not available, FV is based on indicative quotes from brokers and proprietary pricing models combined with observable market inputs, including unadjusted quotes in active markets or quoted prices for similar assets or other observable inputs including, but not limited to, transactions activity, interest rates, yield curves, spot prices, prepayment speeds and default rates. These funds generally have daily liquidity. | |||||||||||||||||
In addition to the NAV, consideration is given to any specific rights or obligations that pertain to investments in the funds, which if deemed significant, may adjust the FV of the ownership interest and result in a lower, less observable FV hierarchy level. These factors include, but are not limited to, any restrictions or illiquidity on the disposition of the interest. The Company invests in money market funds that have daily liquidity and do not, absent unusual market disruption, impose restrictions on the Company’s ability to make redemptions. The Company has concluded that there are no significant specific rights or obligations pertaining to these funds that require an adjustment to the FV. | |||||||||||||||||
The Company classifies as Level 2 investments in corporate debt securities and values them using the market approach based on significant other observable inputs including quoted prices in active markets for instruments that are similar or quoted prices in markets that are not traded on a daily basis for identical or similar instruments. | |||||||||||||||||
The following table sets forth our financial instruments carried at FV within the ASC 820 hierarchy and using the lowest level of input as of September 30, 2013: | |||||||||||||||||
Financial Instruments | |||||||||||||||||
Carried at Fair Value | |||||||||||||||||
Quoted prices | Significant other | Significant | |||||||||||||||
in active markets | observable | other unobservable | |||||||||||||||
for identical items | inputs | inputs | |||||||||||||||
(Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||||
Cash and cash equivalents | $ | 89,695,509 | $ | — | $ | — | $ | 89,695,509 | |||||||||
The following table sets forth our financial instruments carried at fair value within the ASC 820 hierarchy and using the lowest level of input as of December 31, 2012: | |||||||||||||||||
Financial Instruments | |||||||||||||||||
Carried at Fair Value | |||||||||||||||||
Quoted prices | Significant other | Significant | |||||||||||||||
in active Markets | Observable | unobservable | |||||||||||||||
for identical items | Inputs | inputs | |||||||||||||||
(Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||||
Assets: | |||||||||||||||||
Cash and cash equivalents | $ | 68,416,308 | $ | — | $ | — | $ | 68,416,308 | |||||||||
Short-term investments | — | 18,898,136 | — | 18,898,136 | |||||||||||||
Total cash and investments | $ | 68,416,308 | $ | 18,898,136 | $ | — | $ | 87,314,444 | |||||||||
There were no transfers into and out of each level of the fair value hierarchy for assets measured at fair value for the nine months ended September 30, 2013 and the year ended December 31, 2012. | |||||||||||||||||
Realized gains and losses from sales of the Company’s investments are included in “Interest and other income” during the period when realized. Unrealized gains and losses are determined using the specific identification method and are recognized as a separate component of equity in other comprehensive income (loss) at the balance sheet date unless the loss is determined to be “other-than-temporary.” | |||||||||||||||||
In determining whether a decline in FV below original cost is other-than-temporary, the Company uses a systematic methodology that considers all available evidence, including the credit rating of the relevant trust, the parity score (a measure of the trust’s ability to meet its obligations as they come due), general market conditions, and industry and sector performance, among other factors. The Company considers the duration and extent to which the FV is less than cost, as well as the Company’s intent and ability to hold the investment until recovery or, if necessary, to the instrument’s maturity. When determining whether an impairment is other-than-temporary the Company also considers the following information: (i) if the market value of the investment is below its current carrying value for an extended period, which the Company generally defines as nine to twelve months; (ii) if the issuer has experienced significant financial declines; or (iii) if the issuer has experienced significant changes in its credit quality, among other factors | |||||||||||||||||
Accumulated Other Comprehensive (Loss) | ' | ||||||||||||||||
Accumulated Other Comprehensive (Loss) — Accumulated other comprehensive (loss) is comprised of unrealized gains and losses on marketable securities and is disclosed as a component of stockholders’ equity. The Company had ($3,253) of net unrealized losses on its investments at December 31, 2012. | |||||||||||||||||
Comprehensive (loss) consists of the following components for the three and nine months ended September 30, 2013 and 2012: | |||||||||||||||||
Three months ended | Nine months ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Net loss | $ | (4,767,193 | ) | $ | (5,695,344 | ) | $ | (14,533,121 | ) | $ | (19,194,188 | ) | |||||
Change in unrealized gain (loss) on marketable securities | ― | 35,415 | 3,253 | 17,296 | |||||||||||||
Total comprehensive loss | $ | (4,767,193 | ) | $ | (5,659,929 | ) | $ | (14,529,868 | ) | $ | (19,176,892 | ) | |||||
Stock-based Compensation | ' | ||||||||||||||||
Stock-based Compensation— Stock-based compensation cost is estimated at the grant date based on the fair value of the award and is recognized as expense over the requisite service period of the award. The fair value of restricted stock awards is determined by reference to the fair market value of our common stock on the date of grant. We use the Black-Scholes model to value service condition and performance condition option awards. For awards with only service conditions and graded-vesting features, we recognize compensation cost on a straight-line basis over the requisite service period. For awards with performance conditions granted we recognize compensation cost over the expected period to achieve the performance conditions, provided achievement of the performance conditions are deemed probable. | |||||||||||||||||
A summary of all stock awards as of September 30, 2013, and changes during the nine months ended September 30, 2013, is as follows: | |||||||||||||||||
Stock Awards (000s) | Time-Based | Performance-Based Awards | Restricted Stock and Restricted Stock Units | Total Stock Awards | |||||||||||||
Stock Awards | |||||||||||||||||
Awards outstanding at 12/31/2012 | 3,926 | 647 | 604 | 5,177 | |||||||||||||
2013 grants | 25 | — | 231 | 256 | |||||||||||||
2013 exercises | (31 | ) | (158 | ) | (62 | ) | (251 | ) | |||||||||
2013 forfeitures | (186 | ) | (14 | ) | (12 | ) | (212 | ) | |||||||||
Awards outstanding at 9/30/2013 | 3,734 | 475 | 761 | 4,970 | |||||||||||||
Our statements of comprehensive loss include the following stock-based compensation expense: | |||||||||||||||||
Three months ended September 30, | Nine months Ended September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Research and development | $ | 382,000 | $ | 36,603 | $ | 653,517 | $ | 326,458 | |||||||||
General and administrative | 1,182,561 | 457,841 | 2,551,899 | 1,661,464 | |||||||||||||
Operating expense | 1,564,561 | 494,444 | 3,205,416 | 1,987,922 | |||||||||||||
Tax benefit | — | — | — | — | |||||||||||||
Net expense | $ | 1,564,561 | $ | 494,444 | $ | 3,205,416 | $ | 1,987,922 | |||||||||
Unrecognized stock-based compensation expense, including time-based options, performance-based options and restricted stock awards, expected to be recognized over an estimated weighted-average amortization period of 1.5 years, was $2.8 million at September 30, 2013. | |||||||||||||||||
Stock Plans | |||||||||||||||||
On November 20, 1996, the Company established a Stock Option Plan (the “Option Plan”) and authorized the issuance of options for up to 1,605,310 shares of common stock to attract and retain quality employees and to allow such employees to participate in the growth of the Company. In June 2000, the stockholders approved the POZEN Inc. 2000 Equity Compensation Plan (the “2000 Plan”). The 2000 Plan became effective upon the completion of the Company’s initial public offering in October 2000, after which time no further grants were made under the Option Plan. At adoption, the 2000 Plan authorized up to 3,000,000 shares of common stock for issuance under the terms of the 2000 Plan. In May 2004, the stockholders approved an amendment to and restatement of the 2000 Plan. The amendment to the 2000 Plan provided for an increase in the number of shares of common stock authorized for issuance under the 2000 Plan, from 3,000,000 to 5,500,000, or an increase of 2,500,000 shares. In addition, the amendment to the 2000 Plan limited the number of shares that may be issued pursuant to grants other than options under the 2000 Plan to 2,000,000 shares and made certain other clarifying changes. In June 2007, the stockholders approved the amendment and restatement of the 2000 Plan to, among other things, increase the number of shares authorized for issuance under the 2000 Plan from 5,500,000 to 6,500,000 shares and continue the various performance criteria for use in establishing specific vesting targets for certain awards under the 2000 Plan so as to qualify the compensation attributable to any such awards as performance-based compensation under Section 162(m) of the Internal Revenue Code of 1986, as amended and the promulgated thereunder, the Code. | |||||||||||||||||
In June 2010, our stockholders approved the POZEN Inc. 2010 Equity Compensation Plan, or the 2010 Plan. The 2010 Plan is a successor incentive compensation plan to the 2000 Plan and provides the Company with an omnibus plan to design and structure grants of stock options, stock units, stock awards, stock appreciation rights and other stock-based awards for selected individuals in our employ or service. The 2000 Plan was merged with and into the 2010 Plan and all grants outstanding under the 2000 Plan were issued or transferred under the 2010 Plan. No further grants will be made under the 2000 Plan. | |||||||||||||||||
The 2010 Plan provides for grants of incentive stock options, nonqualified stock options, stock awards, and other stock-based awards, such as restricted stock units and stock appreciation rights (“SARs”), to employees, non-employee directors, and consultants and advisors who perform services for us and our subsidiaries. The 2010 Plan authorizes up to 7,452,327 shares of common stock for issuance, which includes 2,000,000 shares of our common stock which are in excess of the number of shares previously reserved under the 2000 Plan. The maximum number of shares for which any individual may receive grants in any calendar year is 1,000,000 shares. The Compensation Committee of the Board of Directors, which administers the 2010 Plan, will determine the terms and conditions of options, including when they become exercisable. Neither our Board nor the Committee can amend the 2010 Plan or options previously granted under the Plan to permit a repricing of options or SARs, without prior stockholder approval. If options granted under the 2010 Plan expire or are terminated for any reason without being exercised, or if stock awards, performance units, or other stock-based awards are forfeited or otherwise terminate, the shares of common stock underlying the grants will again be available for awards granted under the 2010 Plan. | |||||||||||||||||
Time-Based Stock Awards | |||||||||||||||||
Historically, the fair value of each time-based award has been estimated on the date of grant using the Black-Scholes option valuation model, which uses the assumptions described below. Our weighted-average assumptions used in the Black-Scholes valuation model for equity awards with time-based vesting provisions granted for the three and nine months ended September 30, 2013 and 2012 are shown in the following table: | |||||||||||||||||
Three months ended | Nine months ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Expected volatility | * | * | 63.7 | % | 68.0 –72.3 | % | |||||||||||
Expected dividends | * | * | 0 | % | 0 | % | |||||||||||
Expected terms | * | * | 6.0 Years | 6.0 Years | |||||||||||||
Risk-free interest rate | * | * | 1.25 | % | 0.91–1.33 | % | |||||||||||
* No time-based stock awards were issued during the three month periods ended September 30, 2013 and September 30, 2012. | |||||||||||||||||
For the nine months ended September 30, 2013 and 2012, the expected volatility rate was estimated based on an equal weighting of the historical volatility of POZEN common stock over approximately a six-year period. For the nine months ended September 30, 2013 and 2012, the expected term was based upon average historical terms to exercise. The risk-free interest rate is based on six-year U.S. Treasury securities. The pre-vesting forfeiture rates used of the nine months ended September 30, 2013 and 2012 were based on historical rates. We adjust the estimated forfeiture rate based upon actual experience. | |||||||||||||||||
A summary of the time-based stock awards as of September 30, 2013, and changes during the nine months ended September 30, 2013, are as follows: | |||||||||||||||||
Time-Based Stock Awards | Underlying | Weighted- | Average Remaining Contractual | Aggregate Intrinsic | |||||||||||||
Shares | Average | Term | Value | ||||||||||||||
(000s) | Exercise | (years) | (000s) | ||||||||||||||
Price | |||||||||||||||||
Outstanding at December 31, 2012 | 3,926 | $ | 8.11 | 5.3 | $ | 443 | |||||||||||
Granted | — | — | |||||||||||||||
Exercised | (25 | ) | 4.34 | ||||||||||||||
Forfeited or expired | (81 | ) | 5.25 | ||||||||||||||
Outstanding at March 31, 2013 | 3,820 | 8.2 | 5.1 | $ | 659 | ||||||||||||
Exercisable at March 31, 2013 | 2,878 | $ | 9.28 | 4.1 | $ | 104 | |||||||||||
Vested or expected to vest at March 31, 2013 | 3,679 | $ | 8.2 | 5.1 | $ | 635 | |||||||||||
Granted | 25 | 5.42 | |||||||||||||||
Exercised | — | — | |||||||||||||||
Forfeited or expired | (86 | ) | 10.39 | ||||||||||||||
Outstanding at June 30, 2013 | 3,759 | 8.13 | 4.9 | $ | 415 | ||||||||||||
Exercisable at June 30, 2013 | 2,819 | $ | 9.22 | 3.9 | $ | 62 | |||||||||||
Vested or expected to vest at June 30, 2013 | 3,642 | $ | 8.13 | 4.9 | $ | 400 | |||||||||||
Granted | — | — | |||||||||||||||
Exercised | (6 | ) | 4.6 | ||||||||||||||
Forfeited or expired | (19 | ) | 4.76 | ||||||||||||||
Outstanding at September 30, 2013 | 3,734 | 8.15 | 4.7 | $ | 1,097 | ||||||||||||
Exercisable at September 30, 2013 | 2,978 | $ | 8.97 | 3.9 | $ | 395 | |||||||||||
Vested or expected to vest at September 30, 2013 | 3,174 | $ | 8.15 | 4.7 | $ | 933 | |||||||||||
The aggregate intrinsic value of options outstanding represents the pretax value (the period’s closing market price, less the exercise price, times the number of in-the-money options) that would have been received by all option holders had they exercised their options at the end of the period. The exercise price of stock options granted during the nine months ended September 30, 2013 and 2012 was equal to the market price of the underlying common stock on the grant date. A total of 39,000 options were exercised during the nine months ended September 30, 2013, while a total of 239,000 stock options were exercised during the nine months ended September 30, 2012. | |||||||||||||||||
Restricted Stock and Restricted Stock Units | |||||||||||||||||
For the three and nine months ended September 30, 2013, the Company recognized $0.3 million and $0.9 million, respectively, in compensation expense related to restricted stock units. | |||||||||||||||||
A summary of the restricted stock awards as of September 30, 2013, and changes during the three and nine months ended September 30, 2013, are as follows: | |||||||||||||||||
Underlying | Weighted-Average Exercise Price | ||||||||||||||||
Shares | |||||||||||||||||
(000s) | |||||||||||||||||
Restricted stock outstanding at December 31, 2012 | 604 | $ | 5.68 | ||||||||||||||
Granted | 206 | 5.91 | |||||||||||||||
Vested and released | (33 | ) | 4.72 | ||||||||||||||
Forfeited or expired | (5 | ) | 5.36 | ||||||||||||||
Restricted stock outstanding at March 31, 2013 | 772 | $ | 5.78 | ||||||||||||||
Granted | 25 | 5.42 | |||||||||||||||
Vested and released | 30 | 6.59 | |||||||||||||||
Forfeited or expired | — | — | |||||||||||||||
Restricted stock outstanding at June 30, 2013 | 767 | $ | 5.74 | ||||||||||||||
Granted | — | — | |||||||||||||||
Vested and released | — | — | |||||||||||||||
Forfeited or expired | (6 | ) | 5.99 | ||||||||||||||
Restricted stock outstanding at September 30, 2013 | 761 | $ | 5.74 | ||||||||||||||
As of September 30, 2013 there was an aggregate $1.5 million of unrecognized compensation expense related to unvested restricted stock units. Of the aggregate amount, $65,000 unrecognized compensation expense related to unvested restricted stock units under the March 15, 2010 award of 87,180 restricted stock units with a grant-date per-share fair value of $6.50, $186,000 unrecognized compensation expense related to unvested restricted stock units under the 2011 award of 110,870 restricted stock units with a grant-date per-share fair value of $4.60, $187,000 unrecognized compensation expense related to unvested restricted stock units under the March 2012 award of 191,060 restricted stock units with a grant-date per-share fair value of $4.72, $1.0 million unrecognized compensation expense related to unvested restricted stock units under the March 2013 award of 206,049 restricted stock units with a grant-date per-share fair value of $5.91, and $94,000 unrecognized compensation expense related to unvested restricted stock units under the June 2013 award of 25,000 restricted stock units with a grant-date per-share fair value of $5.42. | |||||||||||||||||
There were 587,000 unvested restricted stock units outstanding at September 30, 2013. There were 523,962 unvested restricted stock units outstanding at September 30, 2012. The total fair value of restricted stock that vested during the nine months ended September 30, 2013 was $347,000. | |||||||||||||||||
Performance-Based Awards | |||||||||||||||||
On May 6, 2008, pursuant to an incentive program (the “PN incentive program”) approved by the Compensation Committee of the Board of Directors of the Company, stock options were granted to all of the Company’s employees, including its executive officers, to purchase an aggregate of 281,433 shares of common stock. On September 10, 2008, additional stock options were granted under the PN incentive program, to purchase 11,700 shares of common stock. Twenty-five percent (25%) of the PN incentive program options granted vested during September 2009, upon the acceptance by the FDA of the NDA for VIMOVO (naproxen and esomeprazole magnesium) delayed release tablets, formerly referred to as PN 400). The remaining seventy-five percent (75%) of the options granted vested on April 30, 2010 upon the Company’s receipt of an action letter from the FDA indicating approval of the NDA for VIMOVO. The options have a ten-year term. The May 6, 2008 and September 10, 2008 option grants have exercise prices of $14.45 per share and $10.82 per share, respectively, which was equal to the NASDAQ reported market closing price of the Company’s common stock on the date of grant. The weighted average grant-date fair value of these performance-based options was $9.66 per share and $7.08 per share for the May 6, 2008 and September 10, 2008 option grants, respectively. The fair value of the performance-based options granted under the PN incentive program was estimated as of the grant date using the Black-Scholes option valuation model without consideration of the performance measures. The options also include provisions that require satisfactory employee performance prior to vesting. Additionally, 20,000 options were granted to an executive officer on May 6, 2008 under the PN incentive plan, with identical grant and exercise terms except that 100% of the options granted vested during September 2009, upon acceptance by the FDA of the NDA for VIMOVO. The Company recognized all compensation costs for these awards over the expected service period. | |||||||||||||||||
On October 1, 2011, pursuant to an incentive program (the “PA32540 incentive program”) approved by the Compensation Committee of the Board of Directors of the Company, stock options were granted to all of the Company’s employees, including its executive officers, to purchase an aggregate of 453,960 shares of common stock. The underlying stock options and RSUs are performance-based and focus on the successful completion of certain value-enhancing events for the Company’s PA32540 product candidate. Each of the grants described above were granted on October 1, 2011 pursuant to, and subject to, the terms of the Company’s 2010 Omnibus Equity Compensation Plan (the “Equity Plan”). The stock options have a ten-year term and have an exercise price equal to the closing sale price of the Company’s common stock, as reported on the NASDAQ Global Market, on the date immediately preceding the date of grant, October 1, 2011. The underlying stock options and RSUs vest in accordance with the following schedule: (a) one-third (1/3) upon the acceptance of the filing of a new drug application (the “NDA”) for PA32540, assuming the NDA filing is made prior to December 31, 2012, (b) one-third (1/3) upon first cycle NDA approval of PA32540 (otherwise 16.5% upon NDA approval after first cycle), and (c) one-third (1/3) upon execution of a significant partnering transaction for PA32540 in a major territory as determined by the Compensation Committee of the Company, in its sole discretion, at the time of such transaction, subject in each case to continued employment or service to the Company. At December 31, 2012, 132,883 options were forfeited in acknowledgement that the NDA filing was not made prior to December 31, 2012. | |||||||||||||||||
On October 25, 2012, the Compensation Committee of the Board as part of the Company’s initiative to retain, award and incentive its employees, approved the performance-based incentive awards for all employees of the Company, including the executive officers. During a pre-submission meeting with respect to its NDA for PA32540 in April 2012, the FDA suggested that the Company also seek approval for a lower dose formulation of the product containing 81 mg of enteric coated aspirin as part of its NDA for PA32540. The Company included data and information relating to a lower dose formulation, PA8140, in its NDA. Generation of additional information with respect to PA8140 and incorporation of data into the NDA for PA32540 delayed the submission of the NDA from the original planned submission date in the third quarter of 2012 until the first quarter of 2013. | |||||||||||||||||
The Company believes that seeking approval for lower dose formulation in addition to PA32540 will add significant value to the products in the market place. However, the addition of PA8140 to the NDA had an impact on the Company’s ability to achieve one or more of the performance conditions of the PA Incentive Program, including the Company’s ability to submit the NDA by December 31, 2012. Therefore, the Compensation Committee granted the performance-based incentive awards both to compensate the employees for the expected loss of value under the PA Incentive Program, as well as to provide additional incentive to employees to complete the value-added activities required for submission and approval of the lower dose product. The Compensation Committee granted an aggregate of 208,740 restricted stock units to various employees of the Company, including 105,000 restricted stock units granted to the Company’s named executive officers. The restricted stock units are performance-based and focus on the successful completion of certain value-enhancing events for the Company’s lower dose PA product candidate, PA8140. Each of the restricted stock units described about were granted on October 25, 2011 pursuant to, and subject to, the terms of the Company’s 2010 Omnibus Equity Compensation Plan. Such restricted stock units shall vest in accordance with the following schedule: (a) one-half (1/2) upon the acceptance by the FDA of the filing of an NDA for a lower dose PA product, PA8140, and (b) one-half (1/2) upon approval by the FDA of an NDA for a lower dose PA product, PA8140. | |||||||||||||||||
A summary of the performance-based stock awards as of September 30, 2013, and changes during the nine months ended September 30, 2013, are as follows: | |||||||||||||||||
Underlying | Weighted-Average Exercise Price | ||||||||||||||||
Shares | |||||||||||||||||
(000s) | |||||||||||||||||
Performance-based outstanding at December 31, 2012 | 647 | $ | 6.96 | ||||||||||||||
Granted | — | — | |||||||||||||||
Exercised | — | — | |||||||||||||||
Forfeited or expired | (12 | ) | 8.55 | ||||||||||||||
Performance-based outstanding at March 31, 2013 | 635 | $ | 6.93 | ||||||||||||||
Granted | — | — | |||||||||||||||
Exercised | (105 | ) | 6.29 | ||||||||||||||
Forfeited or expired | — | — | |||||||||||||||
Performance-based outstanding at June 30, 2013 | 530 | $ | 7.06 | ||||||||||||||
Granted | — | — | |||||||||||||||
Exercised | (53 | ) | 2.28 | ||||||||||||||
Forfeited or expired | (2 | ) | 3.81 | ||||||||||||||
Performance-based outstanding at September 30, 2013 | 475 | $ | 7.61 | ||||||||||||||
During the nine months ended September 30, 2013, there was $1,354,262 expense recorded related to the achievement of vesting criteria for performance-based awards under the PA32540 and PA8140 incentive programs. As of September 30, 2013, there was $621,000 in unrecognized compensation expense related to performance-based awards granted under the PA32540 and PA8140 incentive programs and there was no unrecognized compensation expense related to performance-based awards granted under the PN incentive program. The September 30, 2013 amount is expected to be recognized at the time of the grant vesting over the period ending March 31, 2014. Under the PA32540 and PA8140 incentive programs, there were 228,400 unvested performance-based options outstanding at September 30, 2013. A total of 230,207 performance-based awards vested during the nine months ended September 30, 2013 and no performance-based awards vested during the nine months ended September 30, 2012. There were 249,900 vested performance-based options outstanding at September 30, 2013. There were 2,253 awards forfeited during the nine months ended September 30, 2013, and 27,300 awards forfeited during the nine months ended September 30, 2012. A total of 157,685 performance-based awards were exercised during the nine months ended September 30, 2013 and no performance-based awards were exercised during the nine months ended September 30, 2012. At September 30, 2013, the performance-based options had an intrinsic value of $1.4 million and a remaining weighted contractual life of 5.3 years. | |||||||||||||||||
Net Loss Per Share | ' | ||||||||||||||||
Net Loss Per Share— Basic and diluted net income or loss per common share amounts have been computed using the weighted-average number of shares of common stock outstanding for the nine months ended September 30, 2013 and 2012. During the nine months ended September 30, 2013 and 2012, the Company had potential common stock equivalents related to its outstanding stock options. These potential common stock equivalents were not included in diluted loss per share, if the effect would have been antidilutive. The Company has excluded the impact of any shares which might be issued under the Rights Plan, detailed below, from the earnings per share calculation because the Rights are not exercisable since the specified contingent future event has not occurred. | |||||||||||||||||
Reconciliation of denominators for basic and diluted earnings per share computations: | |||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Basic weighted average shares outstanding | 30,476,562 | 30,084,315 | 30,405,543 | 30,019,165 | |||||||||||||
Effect of dilutive employee and director awards | — | — | — | — | |||||||||||||
Diluted weighted-average shares outstanding and assumed conversions | 30,476,562 | 30,084,315 | 30,405,543 | 30,019,165 | |||||||||||||
Rights Plan/Series A Junior Participating Preferred Stock | ' | ||||||||||||||||
Rights Plan/Series A Junior Participating Preferred Stock— In January 2005, the Company approved a stockholder rights plan (the “Rights Plan”), pursuant to which the Company entered into a Rights Agreement dated January 12, 2005 with StockTrans, Inc., as Rights Agent, and the Company declared a dividend of a right to acquire one preferred share purchase right (a “Right”) for each outstanding share of the Company’s Common Stock, $0.001 par value per share, to stockholders of record at the close of business on January 28, 2005. Generally, the Rights only are triggered and become exercisable if a person or group acquires beneficial ownership of 15 percent or more of the Company’s common stock or announces a tender offer for 15 percent or more of the Company’s common stock. The Rights Plan is similar to plans adopted by many other publicly-traded companies. The effect of the Rights Plan is to discourage any potential acquirer from triggering the Rights without first convincing POZEN’s Board of Directors that the proposed acquisition is fair to, and in the best interest of, the shareholders and the Company. The provisions of the Plan will substantially dilute the equity and voting interest of any potential acquirer unless the Board of Directors determines that the proposed acquisition is in the best interest of the shareholders. In connection with the Plan, the Company designated 90,000 shares of its authorized Preferred Stock as Series A Junior Participating Preferred Stock. Each Right, if and when exercisable, will entitle the registered holder to purchase from the Company one one-thousandth of a share of Series A Junior Participating Preferred Stock, $0.001 par value per share, at a purchase price of $80.00 for each one one-thousandth of a share, subject to adjustment. Each holder of a Right (except for the Acquiring Person (as defined in the Rights Plan), whose Rights will be null and void upon such event) shall thereafter have the right to receive, upon exercise, that number of shares of Common Stock of the Company (or, in certain circumstances, cash, property or other securities of the Company) which equals the exercise price of the Right divided by 50% of the current market price (as defined in the Rights Agreement) per share of Common Stock at the date of the occurrence of such event. The Rights can be terminated by POZEN’s Board of Directors and are subject to optional redemption by the Company at $0.001 per Right. The Rights Plan has a 10-year term and contains provisions requiring a periodic review and evaluation by the Board of Directors. | |||||||||||||||||
At September 30, 2013, shares of our common stock reserved for future issuance are as follows: | |||||||||||||||||
Common shares available for grant under stock option plans | 1,729,571 | ||||||||||||||||
Common shares issuable pursuant to options and restricted stock units granted under equity compensations plans | 4,970,128 | ||||||||||||||||
Rights Plan shares issuable as Series A Junior Participating Preferred Stock | 90,000 | ||||||||||||||||
Total Reserved | 6,789,700 | ||||||||||||||||
Leases | ' | ||||||||||||||||
Leases— On February 16, 2009, the Company modified certain terms to our existing lease agreement, dated November 21, 2001, relating to approximately 17,009 square feet of office space located at Exchange Office Building, Chapel Hill, North Carolina. Under the terms of the modification, the lease term was extended for an additional 5 years and 7 months, terminating on September 30, 2015. The modification also provides the Company with a reduced notice period of 7 months for renewals of the lease. The Company is also entitled to a 3-year lease extension option available at the end of the term and a first offer right on available space located within the Exchange Office Building property. As a result of entering into the modification, the Company’s noncancellable future minimum lease payments for operating leases increased by approximately $2.7 million over the lease term. The Company is recognizing rent expense on a straight-line basis over the term of the lease which resulted in a deferred rent balance of $153,464 at September 30, 2013. | |||||||||||||||||
New Accounting Pronouncements | ' | ||||||||||||||||
New Accounting Pronouncements—In February 2013, the FASB issued a final rule, ASU 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, related to the reporting of amounts reclassified out of accumulated other comprehensive income that requires entities to report, either on their income statement or in a footnote to their financial statements, the effects on earnings from items that are reclassified out of other comprehensive income. The new accounting rules were effective for the Company in the first quarter of 2013. The adoption of the new accounting rule in the first quarter of 2013 did not have a material effect on the Company’s financial condition, results of operations or cash flows. | |||||||||||||||||
Contingencies | ' | ||||||||||||||||
Contingencies— We and GSK - received Paragraph IV Notice Letters from Par Pharmaceuticals, Inc. ("Par"), Alphapharm Pty Ltd. ("Alphapharm"), Teva Pharmaceuticals, USA, Inc. (“Teva”), and Dr. Reddy's Laboratories, Inc. (“Dr. Reddy’s”) informing us that each company (or in the case of Alphapharm, its designated agent in the United States, Mylan Inc. (“Mylan”), had filed an Abbreviated New Drug Application, or ANDA, with the FDA seeking approval to market sumatriptan 85 mg/naproxen sodium 500 mg tablets. Par, Alphapharm, Teva, and Dr. Reddy’s each indicated in their respective Notice Letters that they intended to market a generic version of Treximet tablets before the expiration of U.S. Patent Nos. 6,060,499, or the ‘499 patent, 6,586,458, or the ‘458 patent and 7,332,183, or the '183 patent, listed with respect to Treximet in the FDA’s Approved Drug Products with Therapeutic Equivalents Evaluation publication (commonly referred to as the “Orange Book”). GSK advised us that it elected not to exercise its first right to bring infringement suits against Par, Alphapharm, Teva, and Dr. Reddy’s. Accordingly, we filed suit against Par on November 14, 2008, Alphapharm and Mylan on January 2, 2009, Teva, on April 14, 2009, and Dr. Reddy’s on August 21, 2009, all in the United States District Court for the Eastern District of Texas. On April 14, 2010, we announced that we had entered into a Settlement Agreement with Teva. Under the terms of the Settlement Agreement, Teva was dismissed without prejudice from the consolidated litigation currently pending, but agreed to be bound by the outcome of such litigation or any resulting settlements with third parties. On August 8, 2011, we announced that on August 5, 2011, the District Court ruled the ʼ499 patent and the ʼ458 patent to be valid, enforceable and infringed by Par, Alphapharm and Dr. Reddy’s. A third patent, the ʼ183 patent, covering the Treximet formulation was held to be valid, enforceable and infringed by Par and Dr. Reddy’s. The ʼ183 patent was not asserted against Alphapharm. The District Court also ordered that defendants’ ANDAs not be approved by the FDA until, with respect to Par and Dr. Reddy’s, at least the expiration of the ʼ183 on October 2, 2025, and with respect to Alphapharm the expiration of the ʼ499 and ʼ458 patents on August 14, 2017. On September 6, 2011, we announced that Par, Alphapharm, and Dr. Reddy’s had each appealed the decision of the District Court to the United States Court of Appeals for the Federal Circuit. (Appeal Nos. 2011-1584, -1585, and -1586) Alphapharm also separately appealed the District Court’s judgment denying its request for attorneys’ fees (Appeal No. 2012-1023). On May 10, 2012, the Federal Circuit heard arguments on each of the appeals. On June 5, 2012, the Federal Circuit issued an order affirming the District Court’s denial of Alphapharm’s request for attorneys’ fees. On September 28, 2012, the Federal Circuit affirmed the lower court ruling which held that ‘499 and ʼ458 patents were valid, enforceable and infringed by Par, Alphapharm, and Dr. Reddy’s. The ʼ183 patent covering the Treximet formulation was also valid, enforceable and infringed by Par and Dr. Reddy's. The ʼ183 patent was not asserted against Alphapharm. Par and Dr. Reddy's petitioned the Federal Circuit for a rehearing en banc in connection with the portion of the decision holding that the ‘183 patent was infringed by their respective ANDA products. The Federal Circuit denied the petition for rehearing on July 26, 2013. | |||||||||||||||||
On April 15, 2011, the Company and GSK received a Paragraph IV Notice Letter from Sun Pharma Global FZE (“Sun”) informing us that Sun had filed an ANDA, with the FDA seeking approval to market a generic version of Treximet tablets before the expiration of ’499, ’458 and ’183 patents. Sun’s Paragraph IV Notice Letter asserts that its generic product will not infringe the listed patents or that the listed patents are invalid or unenforceable. On May 26, 2011, the Company filed suit against Sun for patent infringement in the United States District Court for the Eastern District of Texas. The Company amended its complaint on November 11, 2011 to include U.S. Patent No. 8,022,095, or the ‘095 patent, which was listed in the Orange Book subsequent to the filing of the suit. The parties agreed that the claim construction entered by the District Court in the prior Treximet litigation will control this litigation. On July 16, 2013, we entered into a Settlement Agreement with Sun. Under the terms of the Settlement Agreement, which are confidential, Sun was dismissed without prejudice from the currently pending litigation. In compliance with U.S. law, the Settlement Agreement was submitted to the U.S. Federal Trade Commission and the Department of Justice for review. On September 17, 2013, the District Court entered an order dismissing the case with prejudice. | |||||||||||||||||
On November 23, 2011, the Company entered into the Purchase Agreement, with CII, pursuant to which we sold, and CII purchased, our right to receive future royalty payments arising from U.S. sales of MT 400, including Treximet. Under the Purchase Agreement, CII assumed financial responsibility for and would receive the proceeds, if any, from our patent litigation concerning Treximet against Par, Alphapharm, Dr. Reddy’s, and Sun. | |||||||||||||||||
The Company has no continuing involvement in the selling or marketing of Treximet, nor does it have any impact on the future royalty stream. The upfront payment of $75 million received is non-refundable, is fixed in amount and is not dependent on the future royalty stream of Treximet. | |||||||||||||||||
On March 14, 2011, we and AstraZeneca received a Paragraph IV Notice Letter from Dr. Reddy’s informing us that it had filed an ANDA with the FDA seeking regulatory approval to market a generic version of VIMOVO before the expiration of U.S. Patent No. 6,926,907, or the '907 patent in 2023. The patent is assigned to us and listed with respect to VIMOVO in the Orange Book. On September 19, 2011, Dr. Reddy’s amended its ANDA to include a Paragraph IV certification against U.S. Patent Nos. 5,714,504, or the '504 patent, 6,369,085, or the '085 patent, 6,875,872, or the '872 patent, 7,411,070 or the '070 patent, and 7,745,466, or the '466 patent, which are assigned to AstraZeneca or its affiliates and listed in the Orange Book with respect to VIMOVO. The patents listed in the Orange Book which are owned by AstraZeneca or its affiliates expire at various times between 2014 and 2018. AstraZeneca has advised us that it has elected to exercise its first right to prosecute the infringement suit against Dr. Reddy’s. Accordingly, we and AstraZeneca filed suit against Dr. Reddy’s on April 21, 2011 in the United States District Court for the District of New Jersey, asserting only the ‘907 patent against Dr. Reddy’s. An amended complaint was filed on October 28, 2011 to include the AstraZeneca patents. The case has been consolidated with the case against Lupin, Ltd. (“Lupin”) and Anchen Pharmaceuticals, Inc. (“Anchen”) (described below). On December 19, 2012, the District Court conducted a pre-trial “Markman” hearing to determine claim construction. On April 15, 2013 a Stipulation of Partial Dismissal was filed which sought dismissal of all infringement claims relating to the '504 patent, the '085 patent, the '872 patent, the '070 patent, and the '466 patent (which are each assigned to AstraZeneca), as well as Dr. Reddy's defenses and counterclaims relating to those patents. On April 15, 2013 a Stipulation of Partial Dismissal was filed which sought dismissal of all infringement claims relating to the '504 patent, the '085 patent, the '872 patent, the '070 patent, and the '466 patent (which are each assigned to AstraZeneca), as well as Dr. Reddy's defenses and counterclaims relating to those patents. On April 18, 2013, the District Court issued a Stipulation and Order dismissing with prejudice those claims and defenses. On May 1, 2012, the Court issued a Markman Order construing the claim terms disputed by the parties. | |||||||||||||||||
On June 13, 2011, we and AstraZeneca received a Paragraph IV Notice Letter from Lupin informing us that Lupin had filed an ANDA with the FDA seeking regulatory approval to market a generic version of VIMOVO before the expiration of the ‘907 patent, which is assigned to the Company, the 504 patent, the '085 patent, the '872 patent, the '070 patent, the '466 patent, each of which assigned to AstraZeneca or its affiliates. The patents are listed with respect to VIMOVO in the Orange Book and expire at various times between 2014 and 2023. Lupin’s Paragraph IV Notice Letter asserts that its generic product will not infringe the listed patents or that the listed patents are invalid or unenforceable. AstraZeneca has advised us that it has elected to exercise its first right to prosecute the infringement suit against Lupin and, accordingly, we and AstraZeneca filed suit against Lupin on July 25, 2011 in the United States District Court for the District of New Jersey. The case has been consolidated with the case against Dr. Reddy’s and is currently in the discovery phase. On December 19, 2012, the District Court conducted a pre-trial “Markman” hearing to determine claim construction. On May 1, 2012, the Court issued a Markman Order construing the claim terms disputed by the parties. | |||||||||||||||||
On September 19, 2011, we and AstraZeneca received a Paragraph IV Notice Letter from Anchen informing us, that Anchen had filed an ANDA with the FDA seeking regulatory approval to market a generic version of VIMOVO before the expiration of the ‘907 patent, the '085 patent, the '070 patent, and the '466 patent. The patents are among those listed with respect to VIMOVO in the Orange Book and expire at various times between 2018 and 2023. Anchen’s Paragraph IV Notice Letter asserts that its generic product will not infringe those five listed patents or that those five listed patents are invalid or unenforceable. AstraZeneca has advised us that it has elected to exercise its first right to prosecute the infringement suit against Anchen and, accordingly, we and AstraZeneca filed suit against Anchen on October 28, 2011, in the United States District Court for the District of New Jersey. The case has been consolidated with the case against Dr. Reddy’s. On December 19, 2012, the District Court conducted a pre-trial “Markman” hearing to determine claim construction. On May 1, 2012, the Court issued a Markman Order construing the claim terms disputed by the parties. On October 4, 2013, Anchen filed an amendment to its ANDA seeking to change its Paragraph IV certification to a Paragraph III. It is unclear when or if the FDA will enter Anchen’s amendment. On October 25, 2013, Anchen filed a Motion to Dismiss the case against it, based on its proposed re-certification. Pozen and AZ have yet to file a response to Anchen’s Motion to Dismiss. | |||||||||||||||||
On November 20, 2012 the Company received a Paragraph IV Notice Letter from Dr. Reddy’s, indicating that Dr. Reddy’s had filed a second ANDA with the FDA seeking regulatory approval to market a generic version of VIMOVO. In that Paragraph IV Notice Letter, Dr. Reddy asserts, among other things, that the ‘907 patent is invalid and/or not infringed. AstraZeneca has advised us that it has elected to exercise its first right to prosecute the infringement suit against Dr. Reddy’s on its second ANDA filing and, accordingly, we and AstraZeneca filed suit against Dr. Reddy’s on January 4, 2013, in the United States District Court for the District of New Jersey. On April 15, 2013 a Stipulation of Partial Dismissal was filed which sought dismissal of all infringement claims relating to the '504 patent, the '085 patent, the '872 patent, the '070 patent, and the '466 patent (which are each assigned to AstraZeneca), as well as Dr. Reddy's defenses and counterclaims relating to those patents. On April 15, 2013 a Stipulation of Partial Dismissal was filed which sought dismissal of all infringement claims relating to the '504 patent, the '085 patent, the '872 patent, the '070 patent, and the '466 patent (which are each assigned to AstraZeneca), as well as Dr. Reddy's defenses and counterclaims relating to those patents. On April 18, 2013, the District Court issued a Stipulation and Order dismissing with prejudice those claims and defenses. On May 5, 2013, this case was consolidated with the originally filed Dr. Reddy's case. On June 28, 2013 we and AstraZeneca filed a Motion for Summary Judgment relating to the second ANDA filing that U.S. Patent No. 6,926,907 is not invalid. On August 12, 2013, Dr. Reddy's filed its opposition to the Motion for Summary Judgment. The District Court has yet to rule on the Motion. On October 11, 2013, Dr. Reddy's filed a Motion for Summary Judgment that the product which is the subject matter of its second ANDA does not infringe the ‘907 patent. On November 4, 2013, the Company filed and AstraZeneca filed a response to DRL's Motion for Summary Judgement. The District Court has yet to rule on the Motion. | |||||||||||||||||
On March 29, 2013, we and AstraZeneca received a Paragraph IV Notice Letter from Watson Laboratories, Inc. (“Watson”) informing the companies that it had filed an ANDA with the FDA seeking regulatory approval to market a generic version of VIMOVO before the expiration of the ‘907 patent, which is assigned to the Company and the ‘504 patent, the '085 patent, the ‘424 patent, the '872 patent, the '070 patent, and the '466 patent, each of which assigned to AstraZeneca or its affiliates. The patents are listed with respect to VIMOVO in the Orange Book and expire at various times between 2014 and 2023. Watson’s Paragraph IV Notice Letter asserts that its generic product will not infringe the listed patents or that the listed patents are invalid or unenforceable. On May 10, 2013, we and AstraZeneca filed a patent infringement lawsuit against Watson in the U.S. District Court of New Jersey. A schedule has yet to be set in the case. | |||||||||||||||||
On May 16, 2013, POZEN and AstraZeneca AB received a Paragraph IV Notice Letter from Mylan Pharmaceuticals, Inc. (“Mylan”) informing the companies that it had filed an ANDA with the FDA seeking regulatory approval to market a generic version of VIMOVO™ before the expiration of the ‘907 patent, which is assigned to the Company and the ‘504 patent, the '085 patent, the ‘424 patent, the '872 patent, the '070 patent, and the '466 patent, each of which assigned to AstraZeneca or its affiliates. The patents are listed with respect to VIMOVO™ in the Orange Book and expire at various times between 2014 and 2023. Mylan’s Paragraph IV Notice Letter asserts that its generic product will not infringe the listed patents or that the listed patents are invalid or unenforceable. On June 28, 2013, we and AstraZeneca filed a patent infringement lawsuit against Mylan in the U.S. District Court of New Jersey. A schedule has yet to be set in the case. | |||||||||||||||||
On October 15, 2013, the United States Patent Office issued U.S. Patent No. 8,557,285 (the “’285 patent”). The ‘285 patent, entitled “Pharmaceutical compositions for the coordinated delivery of NSAIDs” and assigned to POZEN, is related to the ‘907 patent. On October 23, 2013, we, and AstraZenenca filed patent infringement lawsuits against Dr. Reddy's, Lupin, Watson and Mylan in the U.S. District Court of New Jersey alleging that their ANDA products infringe the ‘285 patent. Dr. Reddy's, Lupin, Watson and Mylan have yet to answer in those cases. | |||||||||||||||||
As with any litigation proceeding, we cannot predict with certainty the eventual outcome of the patent infringement suit against Dr. Reddy’s, Lupin, Anchen, Watson and Mylan relating to a generic version of VIMOVO. We will have to incur additional expenses in connection with the lawsuits relating to VIMOVO. In the event of an adverse outcome or outcomes, our business could be materially harmed. Moreover, responding to and defending pending litigation will result in a significant diversion of management’s attention and resources and an increase in professional fees. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Summary of Significant Accounting Policies [Abstract] | ' | ||||||||||||||||
Short term investments | ' | ||||||||||||||||
Investments consisted of the following as of December 31, 2012: | |||||||||||||||||
Amortized Cost | Unrealized Gain | Unrealized Loss | Fair Value | ||||||||||||||
Short-term investments - Corporate debt securities | $ | 18,901,389 | $ | 58 | $ | (3,311 | ) | $ | 18,898,136 | ||||||||
Fair value of financial instruments carried at fair value | ' | ||||||||||||||||
The following table sets forth our financial instruments carried at FV within the ASC 820 hierarchy and using the lowest level of input as of September 30, 2013: | |||||||||||||||||
Financial Instruments | |||||||||||||||||
Carried at Fair Value | |||||||||||||||||
Quoted prices | Significant other | Significant | |||||||||||||||
in active markets | observable | other unobservable | |||||||||||||||
for identical items | inputs | inputs | |||||||||||||||
(Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||||
Cash and cash equivalents | $ | 89,695,509 | $ | — | $ | — | $ | 89,695,509 | |||||||||
The following table sets forth our financial instruments carried at fair value within the ASC 820 hierarchy and using the lowest level of input as of December 31, 2012: | |||||||||||||||||
Financial Instruments | |||||||||||||||||
Carried at Fair Value | |||||||||||||||||
Quoted prices | Significant other | Significant | |||||||||||||||
in active Markets | Observable | unobservable | |||||||||||||||
for identical items | Inputs | inputs | |||||||||||||||
(Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||||
Assets: | |||||||||||||||||
Cash and cash equivalents | $ | 68,416,308 | $ | — | $ | — | $ | 68,416,308 | |||||||||
Short-term investments | — | 18,898,136 | — | 18,898,136 | |||||||||||||
Total cash and investments | $ | 68,416,308 | $ | 18,898,136 | $ | — | $ | 87,314,444 | |||||||||
Components of comprehensive (loss) | ' | ||||||||||||||||
Comprehensive (loss) consists of the following components for the three and nine months ended September 30, 2013 and 2012: | |||||||||||||||||
Three months ended | Nine months ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Net loss | $ | (4,767,193 | ) | $ | (5,695,344 | ) | $ | (14,533,121 | ) | $ | (19,194,188 | ) | |||||
Change in unrealized gain (loss) on marketable securities | ― | 35,415 | 3,253 | 17,296 | |||||||||||||
Total comprehensive loss | $ | (4,767,193 | ) | $ | (5,659,929 | ) | $ | (14,529,868 | ) | $ | (19,176,892 | ) | |||||
Summary of equity awards | ' | ||||||||||||||||
A summary of all stock awards as of September 30, 2013, and changes during the nine months ended September 30, 2013, is as follows: | |||||||||||||||||
Stock Awards (000s) | Time-Based | Performance-Based Awards | Restricted Stock and Restricted Stock Units | Total Stock Awards | |||||||||||||
Stock Awards | |||||||||||||||||
Awards outstanding at 12/31/2012 | 3,926 | 647 | 604 | 5,177 | |||||||||||||
2013 grants | 25 | — | 231 | 256 | |||||||||||||
2013 exercises | (31 | ) | (158 | ) | (62 | ) | (251 | ) | |||||||||
2013 forfeitures | (186 | ) | (14 | ) | (12 | ) | (212 | ) | |||||||||
Awards outstanding at 9/30/2013 | 3,734 | 475 | 761 | 4,970 | |||||||||||||
Stock-based compensation expense | ' | ||||||||||||||||
Our statements of comprehensive loss include the following stock-based compensation expense: | |||||||||||||||||
Three months ended September 30, | Nine months Ended September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Research and development | $ | 382,000 | $ | 36,603 | $ | 653,517 | $ | 326,458 | |||||||||
General and administrative | 1,182,561 | 457,841 | 2,551,899 | 1,661,464 | |||||||||||||
Operating expense | 1,564,561 | 494,444 | 3,205,416 | 1,987,922 | |||||||||||||
Tax benefit | — | — | — | — | |||||||||||||
Net expense | $ | 1,564,561 | $ | 494,444 | $ | 3,205,416 | $ | 1,987,922 | |||||||||
Fair value assumptions used in the valuation of equity awards | ' | ||||||||||||||||
Our weighted-average assumptions used in the Black-Scholes valuation model for equity awards with time-based vesting provisions granted for the three and nine months ended September 30, 2013 and 2012 are shown in the following table: | |||||||||||||||||
Three months ended | Nine months ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Expected volatility | * | * | 63.7 | % | 68.0 –72.3 | % | |||||||||||
Expected dividends | * | * | 0 | % | 0 | % | |||||||||||
Expected terms | * | * | 6.0 Years | 6.0 Years | |||||||||||||
Risk-free interest rate | * | * | 1.25 | % | 0.91–1.33 | % | |||||||||||
Summary of time-based stock awards | ' | ||||||||||||||||
A summary of the time-based stock awards as of September 30, 2013, and changes during the nine months ended September 30, 2013, are as follows: | |||||||||||||||||
Time-Based Stock Awards | Underlying | Weighted- | Average Remaining Contractual | Aggregate Intrinsic | |||||||||||||
Shares | Average | Term | Value | ||||||||||||||
(000s) | Exercise | (years) | (000s) | ||||||||||||||
Price | |||||||||||||||||
Outstanding at December 31, 2012 | 3,926 | $ | 8.11 | 5.3 | $ | 443 | |||||||||||
Granted | — | — | |||||||||||||||
Exercised | (25 | ) | 4.34 | ||||||||||||||
Forfeited or expired | (81 | ) | 5.25 | ||||||||||||||
Outstanding at March 31, 2013 | 3,820 | 8.2 | 5.1 | $ | 659 | ||||||||||||
Exercisable at March 31, 2013 | 2,878 | $ | 9.28 | 4.1 | $ | 104 | |||||||||||
Vested or expected to vest at March 31, 2013 | 3,679 | $ | 8.2 | 5.1 | $ | 635 | |||||||||||
Granted | 25 | 5.42 | |||||||||||||||
Exercised | — | — | |||||||||||||||
Forfeited or expired | (86 | ) | 10.39 | ||||||||||||||
Outstanding at June 30, 2013 | 3,759 | 8.13 | 4.9 | $ | 415 | ||||||||||||
Exercisable at June 30, 2013 | 2,819 | $ | 9.22 | 3.9 | $ | 62 | |||||||||||
Vested or expected to vest at June 30, 2013 | 3,642 | $ | 8.13 | 4.9 | $ | 400 | |||||||||||
Granted | — | — | |||||||||||||||
Exercised | (6 | ) | 4.6 | ||||||||||||||
Forfeited or expired | (19 | ) | 4.76 | ||||||||||||||
Outstanding at September 30, 2013 | 3,734 | 8.15 | 4.7 | $ | 1,097 | ||||||||||||
Exercisable at September 30, 2013 | 2,978 | $ | 8.97 | 3.9 | $ | 395 | |||||||||||
Vested or expected to vest at September 30, 2013 | 3,174 | $ | 8.15 | 4.7 | $ | 933 | |||||||||||
Summary of restricted stock awards | ' | ||||||||||||||||
A summary of the restricted stock awards as of September 30, 2013, and changes during the three and nine months ended September 30, 2013, are as follows: | |||||||||||||||||
Underlying | Weighted-Average Exercise Price | ||||||||||||||||
Shares | |||||||||||||||||
(000s) | |||||||||||||||||
Restricted stock outstanding at December 31, 2012 | 604 | $ | 5.68 | ||||||||||||||
Granted | 206 | 5.91 | |||||||||||||||
Vested and released | (33 | ) | 4.72 | ||||||||||||||
Forfeited or expired | (5 | ) | 5.36 | ||||||||||||||
Restricted stock outstanding at March 31, 2013 | 772 | $ | 5.78 | ||||||||||||||
Granted | 25 | 5.42 | |||||||||||||||
Vested and released | 30 | 6.59 | |||||||||||||||
Forfeited or expired | — | — | |||||||||||||||
Restricted stock outstanding at June 30, 2013 | 767 | $ | 5.74 | ||||||||||||||
Granted | — | — | |||||||||||||||
Vested and released | — | — | |||||||||||||||
Forfeited or expired | (6 | ) | 5.99 | ||||||||||||||
Restricted stock outstanding at September 30, 2013 | 761 | $ | 5.74 | ||||||||||||||
Summary of performance-based stock awards | ' | ||||||||||||||||
A summary of the performance-based stock awards as of September 30, 2013, and changes during the nine months ended September 30, 2013, are as follows: | |||||||||||||||||
Underlying | Weighted-Average Exercise Price | ||||||||||||||||
Shares | |||||||||||||||||
(000s) | |||||||||||||||||
Performance-based outstanding at December 31, 2012 | 647 | $ | 6.96 | ||||||||||||||
Granted | — | — | |||||||||||||||
Exercised | — | — | |||||||||||||||
Forfeited or expired | (12 | ) | 8.55 | ||||||||||||||
Performance-based outstanding at March 31, 2013 | 635 | $ | 6.93 | ||||||||||||||
Granted | — | — | |||||||||||||||
Exercised | (105 | ) | 6.29 | ||||||||||||||
Forfeited or expired | — | — | |||||||||||||||
Performance-based outstanding at June 30, 2013 | 530 | $ | 7.06 | ||||||||||||||
Granted | — | — | |||||||||||||||
Exercised | (53 | ) | 2.28 | ||||||||||||||
Forfeited or expired | (2 | ) | 3.81 | ||||||||||||||
Performance-based outstanding at September 30, 2013 | 475 | $ | 7.61 | ||||||||||||||
Reconciliation of denominators for basic and diluted earnings per share computations | ' | ||||||||||||||||
Reconciliation of denominators for basic and diluted earnings per share computations: | |||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Basic weighted average shares outstanding | 30,476,562 | 30,084,315 | 30,405,543 | 30,019,165 | |||||||||||||
Effect of dilutive employee and director awards | — | — | — | — | |||||||||||||
Diluted weighted-average shares outstanding and assumed conversions | 30,476,562 | 30,084,315 | 30,405,543 | 30,019,165 | |||||||||||||
Common shares reserved for future issuance | ' | ||||||||||||||||
At September 30, 2013, shares of our common stock reserved for future issuance are as follows: | |||||||||||||||||
Common shares available for grant under stock option plans | 1,729,571 | ||||||||||||||||
Common shares issuable pursuant to options and restricted stock units granted under equity compensations plans | 4,970,129 | ||||||||||||||||
Rights Plan shares issuable as Series A Junior Participating Preferred Stock | 90,000 | ||||||||||||||||
Total Reserved | 6,789,700 |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details) (USD $) | Sep. 30, 2013 | Sep. 30, 2012 |
In Millions, unless otherwise specified | ||
Accrued expenses, including contracted costs [Abstract] | ' | ' |
Accrued costs related to product development and operating activities | $1.70 | $2 |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies, Revenue Recognition (Details) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | Mar. 31, 2011 | |
Deferred Revenue Arrangement [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Sales of royalty rights, net of costs | ' | ' | ' | ' | $71,900,000 | ' | ' |
Interest on future royalties receivable (in hundredths) | 20.00% | ' | 20.00% | ' | ' | ' | ' |
Licensing Revenue [Abstract] | ' | ' | ' | ' | ' | ' | ' |
Royalty Revenue | 1,600,000 | ' | 4,600,000 | 3,500,000 | ' | ' | ' |
Other licensing revenue | 1,000,000 | ' | 1,000,000 | 500,000 | ' | ' | ' |
Total licensing revenue | 2,583,000 | 940,000 | 5,649,000 | 3,997,000 | ' | ' | ' |
Deferred revenue | 12,257,300 | ' | 12,257,300 | ' | ' | 257,300 | 257,300 |
Proceeds from royalties received | ' | ' | 75,000,000 | ' | ' | ' | ' |
License agreement upfront payment | ' | ' | 15,000,000 | ' | ' | ' | ' |
Receivables of pre commercial milestone | $20,000,000 | ' | $20,000,000 | ' | ' | ' | ' |
CPPIB Credit Investments Inc. Purchase and Sale Agreement [Member] | Minimum [Member] | ' | ' | ' | ' | ' | ' | ' |
Licensing Revenue [Abstract] | ' | ' | ' | ' | ' | ' | ' |
Royalties receivable on sales of licensed products (in hundredths) | ' | ' | 12.50% | ' | ' | ' | ' |
CPPIB Credit Investments Inc. Purchase and Sale Agreement [Member] | Maximum [Member] | ' | ' | ' | ' | ' | ' | ' |
Licensing Revenue [Abstract] | ' | ' | ' | ' | ' | ' | ' |
Royalties receivable on sales of licensed products (in hundredths) | ' | ' | 22.50% | ' | ' | ' | ' |
Summary_of_Significant_Account5
Summary of Significant Accounting Policies, Cash, Cash Equivalents, Investments and Concentrations of Credit Risk (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |
Cash and Cash Equivalents and Concentration of Credit Risk [Abstract] | ' | ' | ' | ' | ' |
Restricted cash and cash equivalents | $42,000 | ' | $42,000 | ' | ' |
Cash, FDIC insured amount | 250,000 | ' | 250,000 | ' | ' |
Long-term Purchase Commitment [Line Items] | ' | ' | ' | ' | ' |
Stable share price for money market funds (in dollars per share) | ' | ' | $1 | ' | ' |
Interest and other income | 14,000 | 65,300 | 54,400 | 206,600 | ' |
Schedule of Available-for-Sale Securities [Line Items] | ' | ' | ' | ' | ' |
Fair value of short-term investments | 0 | ' | 0 | ' | 18,898,136 |
Corporate Debt Securities [Member] | ' | ' | ' | ' | ' |
Schedule of Available-for-Sale Securities [Line Items] | ' | ' | ' | ' | ' |
Amortized cost on short-term investments | ' | ' | ' | ' | 18,901,389 |
Unrealized gain on short-term investments | ' | ' | ' | ' | 58 |
Unrealized loss on short-term investment | ' | ' | ' | ' | -3,311 |
Fair value of short-term investments | ' | ' | ' | ' | $18,898,136 |
Summary_of_Significant_Account6
Summary of Significant Accounting Policies, Fair Value (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Dec. 31, 2011 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' | ' | ' |
Cash and cash equivalents | $89,695,509 | $68,416,308 | $48,674,396 | $104,990,723 |
Short-term investments | 0 | 18,898,136 | ' | ' |
Fair value, assets, Level 1 to Level 2 transfers, amount | 0 | 0 | ' | ' |
Fair value, assets, Level 2 to Level 1 transfers, amount | 0 | 0 | ' | ' |
Fair Value [Member] | ' | ' | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' | ' | ' |
Cash and cash equivalents | 89,695,509 | 68,416,308 | ' | ' |
Short-term investments | ' | 18,898,136 | ' | ' |
Total cash and investments | ' | 87,314,444 | ' | ' |
Fair Value [Member] | Quoted prices in active markets for identical items (Level 1) [Member] | ' | ' | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' | ' | ' |
Cash and cash equivalents | 89,695,509 | 68,416,308 | ' | ' |
Short-term investments | ' | 0 | ' | ' |
Total cash and investments | ' | 68,416,308 | ' | ' |
Fair Value [Member] | Significant other observable inputs (Level 2) [Member] | ' | ' | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' | ' | ' |
Cash and cash equivalents | 0 | 0 | ' | ' |
Short-term investments | ' | 18,898,136 | ' | ' |
Total cash and investments | ' | 18,898,136 | ' | ' |
Fair Value [Member] | Significant other unobservable inputs (Level 3) [Member] | ' | ' | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' | ' | ' |
Cash and cash equivalents | 0 | 0 | ' | ' |
Short-term investments | ' | 0 | ' | ' |
Total cash and investments | ' | $0 | ' | ' |
Summary_of_Significant_Account7
Summary of Significant Accounting Policies, Accumulated Other Comprehensive (Loss) (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |
Accumulated Other Comprehensive (Loss) [Abstract] | ' | ' | ' | ' | ' |
Unrealized loss on investments | $0 | ' | $0 | ' | ($3,253) |
Comprehensive (Loss) [Abstract] | ' | ' | ' | ' | ' |
Net loss | -4,767,193 | -5,695,344 | -14,533,121 | -19,194,188 | ' |
Change in unrealized gain (loss) on marketable securities | 0 | 35,415 | 3,253 | 17,296 | ' |
Total comprehensive loss | ($4,767,193) | ($5,659,929) | ($14,529,868) | ($19,176,892) | ' |
Summary_of_Significant_Account8
Summary of Significant Accounting Policies, Stock-based Compensation (Details) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 0 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | 1 Months Ended | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Sep. 30, 2012 | Sep. 30, 2012 | Dec. 31, 2012 | Oct. 31, 2011 | Sep. 30, 2008 | 31-May-08 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Sep. 30, 2013 | 31-May-08 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Mar. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Jun. 30, 2012 | Sep. 30, 2013 | Dec. 31, 2004 | Jun. 30, 2007 | 31-May-04 | 30-May-04 | Jun. 30, 2000 | Nov. 20, 1996 | Dec. 31, 2010 | Sep. 30, 2013 | Oct. 31, 2011 | Apr. 30, 2010 | Sep. 30, 2008 | Dec. 31, 2008 | Sep. 30, 2009 | Sep. 30, 2013 | Sep. 30, 2008 | 31-May-08 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 10, 2008 | 6-May-08 | |||
Research and Development [Member] | Research and Development [Member] | Research and Development [Member] | Research and Development [Member] | General and Administrative [Member] | General and Administrative [Member] | General and Administrative [Member] | General and Administrative [Member] | Time-Based Stock Awards [Member] | Time-Based Stock Awards [Member] | Time-Based Stock Awards [Member] | Time-Based Stock Awards [Member] | Time-Based Stock Awards [Member] | Time-Based Stock Awards [Member] | Time-Based Stock Awards [Member] | Time-Based Stock Awards [Member] | Time-Based Stock Awards [Member] | Performance-Based Awards [Member] | Performance-Based Awards [Member] | Performance-Based Awards [Member] | Performance-Based Awards [Member] | Performance-Based Awards [Member] | Performance-Based Awards [Member] | Performance-Based Awards [Member] | Performance-Based Awards [Member] | Performance-Based Awards [Member] | Restricted Stock and Restricted Stock Units [Member] | Restricted Stock and Restricted Stock Units [Member] | Restricted Stock and Restricted Stock Units [Member] | Restricted Stock and Restricted Stock Units [Member] | Restricted Stock Units Awards 2011 Tier II [Member] | Restricted Stock Units Awards 2012 [Member] | Restricted Stock Units Awards 2013 [Member] | Restricted Stock Units [Member] | Restricted Stock Units [Member] | Restricted Stock Units [Member] | Restricted Stock Units [Member] | Restricted Stock Units [Member] | Restricted Stock Units [Member] | Restricted Stock Units [Member] | Pozen, Inc. 2000 Equity Compensation Plan [Member] | Pozen, Inc. 2000 Equity Compensation Plan [Member] | Pozen, Inc. 2000 Equity Compensation Plan [Member] | Pozen, Inc. 2000 Equity Compensation Plan [Member] | Pozen, Inc. 2000 Equity Compensation Plan [Member] | Pozen, Inc. 2000 Equity Compensation Plan [Member] | Pozen, Inc. 2010 Equity Compensation Plan [Member] | Pozen, Inc. 2010 Equity Compensation Plan [Member] | PN Incentive Program [Member] | PN Incentive Program [Member] | PN Incentive Program [Member] | PN Incentive Program [Member] | PN Incentive Program [Member] | PA Incentive Program [Member] | PA Incentive Program [Member] | PA Incentive Program [Member] | PA Incentive Program [Member] | PA Incentive Program [Member] | PA Incentive Program [Member] | PA Incentive Program [Member] | |||||||
Minimum [Member] | Maximum [Member] | Executive Officer [Member] | Executive Officer [Member] | Performance-Based Awards [Member] | Performance-Based Awards [Member] | Performance-Based Awards [Member] | Performance-Based Awards [Member] | Performance-Based Awards [Member] | Performance-Based Awards [Member] | Performance-Based Awards [Member] | Performance-Based Awards [Member] | Performance-Based Awards [Member] | Performance-Based Awards [Member] | Performance-Based Awards [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Executive Officer [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Underlying Shares [Roll Forward] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Awards outstanding at beginning of period (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,759,000 | 3,820,000 | 3,926,000 | ' | 3,926,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 647,000 | 647,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Grants (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 25,000 | 0 | ' | 25,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Exercises (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -6,000 | 0 | -25,000 | ' | -39,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -158,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Vested and released (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 30,000 | -33,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Forfeitures (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -19,000 | -86,000 | -81,000 | ' | -186,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -14,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Awards outstanding at end of period (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,734,000 | 3,759,000 | 3,820,000 | ' | 3,734,000 | ' | 3,926,000 | ' | ' | 647,000 | ' | ' | ' | 475,000 | ' | ' | 475,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Exercisable at end of period (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,978,000 | 2,819,000 | 2,878,000 | ' | 2,978,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Vested and expected to vest at end of period (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,174,000 | 3,642,000 | 3,679,000 | ' | 3,174,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Weighted Average Exercise Price [Roll Forward] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Outstanding at beginning of period (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $8.13 | $8.20 | $8.11 | ' | $8.11 | ' | ' | ' | ' | ' | ' | ' | ' | $7.06 | $6.93 | $6.96 | $6.96 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $7.08 | $9.66 | ||
Granted (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0 | $5.42 | $0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0 | $0 | $0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Exercised (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $4.60 | $0 | $4.34 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $2.28 | $6.29 | $0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Forfeited or expired (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $4.76 | $10.39 | $5.25 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $3.81 | $0 | $8.55 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Outstanding at end of period (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $8.15 | $8.13 | $8.20 | ' | $8.15 | ' | $8.11 | ' | ' | $6.96 | ' | ' | ' | $7.61 | $7.06 | $6.93 | $7.61 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $7.08 | $9.66 | ||
Exercisable at end of period (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $8.97 | $9.22 | $9.28 | ' | $8.97 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Vested or expected to vest, exercisable (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $8.15 | $8.13 | $8.20 | ' | $8.15 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Average Remaining Contractual Term [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Outstanding, average remaining contractual term | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '4 years 8 months 12 days | '4 years 10 months 24 days | '5 years 1 month 6 days | ' | ' | ' | '5 years 3 months 18 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Outstanding, average remaining contractual term | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '4 years 8 months 12 days | '4 years 10 months 24 days | '5 years 1 month 6 days | ' | ' | ' | '5 years 3 months 18 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Exercisable, average remaining contractual term | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '3 years 10 months 24 days | '3 years 10 months 24 days | '4 years 1 month 6 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Vested or expected to vest, exercisable, average remaining contractual term | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '4 years 8 months 12 days | '4 years 10 months 24 days | '5 years 1 month 6 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Aggregate Intrinsic Value [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Outstanding , aggregate intrinsic value at beginning of period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $415,000 | $659,000 | $443,000 | ' | $443,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Outstanding, aggregate intrinsic value at end of period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,097,000 | 415,000 | 659,000 | ' | 1,097,000 | ' | 443,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Exercisable, aggregate intrinsic value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 395,000 | 62,000 | 104,000 | ' | 395,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Vested and expected to vest, exercisable, aggregate intrinsic value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 933,000 | 400,000 | 635,000 | ' | 933,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Restricted stock and performance-based awards, Weighted-Average Exercise Price [Roll Forward] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Outstanding at beginning of period (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $5.74 | $5.78 | $5.68 | $5.68 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Granted (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0 | $5.42 | $5.91 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Vested and released (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0 | $6.59 | $4.72 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Forfeited or expired (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $5.99 | $0 | $5.36 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Outstanding at end of period (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $5.74 | $5.74 | $5.78 | $5.74 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Grant-date fair value (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $4.60 | $6.50 | $5.42 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Total fair value of restricted stock that vested | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 347,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Performance-Based Awards, Restricted Stock and Stock Units [Roll Forward] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Awards outstanding at beginning of period (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 530,000 | 635,000 | 647,000 | 647,000 | ' | 767,000 | 772,000 | 604,000 | 604,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Granted (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 453,960 | 11,700 | 281,433 | 0 | 0 | 0 | ' | 20,000 | 0 | 25,000 | 206,000 | 231,000 | ' | ' | ' | 191,060 | 208,740 | ' | 110,870 | 87,180 | ' | 105,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Exercised (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -53,000 | -105,000 | 0 | ' | ' | ' | ' | ' | -62,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -157,685 | 0 | ' | ' | ||
Vested and released (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 30,000 | -33,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Forfeited or expired (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -132,883 | ' | ' | ' | -2,000 | 0 | -12,000 | ' | ' | -6,000 | 0 | -5,000 | -12,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -2,253 | -27,300 | ' | ' | ||
Awards outstanding at end of period (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 647,000 | ' | ' | ' | 475,000 | 530,000 | 635,000 | 475,000 | ' | 761,000 | 767,000 | 772,000 | 761,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Stock Awards [Roll Forward] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Awards outstanding at beginning of period (in shares) | ' | ' | 5,177,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
2013 grants (in shares) | ' | ' | 256,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
2013 exercises | ' | ' | -251,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
2012 forfeitures (in shares) | ' | ' | -212,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Awards outstanding at end of period (in shares) | 4,970,000 | ' | 4,970,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Estimated weighted-average amortization period | ' | ' | '1 year 6 months | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Unrecognized stock-based compensation expense | 2,800,000 | ' | 2,800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 186,000 | 187,000 | 1,000,000 | ' | 1,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 621,000 | ' | ' | ' | ' | ' | 965,000 | ' | ' | ' | ' | ' | ' | ||
Weighted average grant date grant-date fair value (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $14.45 | $10.82 | ' | ' | ' | ' | ||
Stock Plans [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Number of shares authorized for issuance (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6,500,000 | 5,500,000 | 2,000,000 | 3,000,000 | 1,605,310 | ' | 7,452,327 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Number of additional shares authorized for issuance (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,000,000 | ' | ' | ' | ' | ' | 2,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Number of share grants an individual may receive (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Number of shares of common stock authorized for issuance, Increase (Decrease) (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Share-based compensation expense | ' | ' | 3,205,416 | 1,987,922 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,354,262 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 300,000 | 900,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Time-Based Stock Awards Fair Value Assumptions [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Expected volatility (in hundredths) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | [1] | ' | ' | ' | [1] | 63.70% | ' | ' | 68.00% | 72.30% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Expected dividends (in hundredths) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | [1] | ' | ' | ' | [1] | 0.00% | 0.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Expected terms | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | [1] | ' | ' | ' | [1] | '6 years | '6 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Risk free interest rate (in hundredths) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | [1] | ' | ' | ' | [1] | 1.25% | ' | ' | 0.91% | 1.33% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Performance Based Awards [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Percentage of the options granted and vested (in hundredths) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 75.00% | 25.00% | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ||
Term of awards | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '10 years | ' | ' | ' | ' | ' | ' | ' | ' | ||
Award vesting rights | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'The underlying stock options and RSUs are performance-based and focus on the successful completion of certain value-enhancing events for the Companybs PA32540 product candidate. Each of the grants described above were granted on October 1, 2011 pursuant to, and subject to, the terms of the Companybs 2010 Omnibus Equity Compensation Plan (the bEquity Planb). The stock options have a ten-year term and have an exercise price equal to the closing sale price of the Companybs common stock, as reported on the NASDAQ Global Market, on the date immediately preceding the date of grant, October 1, 2011. The underlying stock options and RSUs vest in accordance with the following schedule: (a) one-third (1/3) upon the acceptance of the filing of a new drug application (the bNDAb) for PA32540, assuming the NDA filing is made prior to December 31, 2012, (b) one-third (1/3) upon first cycle NDA approval of PA32540 (otherwise 16.5% upon NDA approval after first cycle), and (c) one-third (1/3) upon execution of a significant partnering transaction for PA32540 in a major territory as determined by the Compensation Committee of the Company, in its sole discretion, at the time of such transaction, subject in each case to continued employment or service to the Company. | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Intrinsic value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,400,000 | ' | ' | 1,400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Remaining contractual life | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '5 years 3 months 18 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Outstanding, vested as of end of period (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 249,900 | ' | ' | 249,900 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 230,207 | 0 | ' | ' | ||
Outstanding, unvested as of end of period (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 587,000 | 523,962 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 228,400 | ' | ' | ' | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Operating expense | 1,564,561 | 494,444 | 3,205,416 | 1,987,922 | 382,000 | 36,603 | 653,517 | 326,458 | 1,182,561 | 457,841 | 2,551,899 | 1,661,464 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Tax benefit | 0 | 0 | 0 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Net expense | $1,564,561 | $494,444 | $3,205,416 | $1,987,922 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
[1] | No time-based stock awards were issued during the three month periods ended September 30, 2013 and September 30, 2012. |
Summary_of_Significant_Account9
Summary of Significant Accounting Policies, Net Loss Per Share (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Net Income (Loss) Per Share [Abstract] | ' | ' | ' | ' |
Basic weighted average shares outstanding (in shares) | 30,476,562 | 30,084,315 | 30,405,543 | 30,019,165 |
Effect of dilutive employee and director awards (in shares) | 0 | 0 | 0 | 0 |
Diluted weighted-average shares outstanding and assumed conversions (in shares) | 30,476,562 | 30,084,315 | 30,405,543 | 30,019,165 |
Recovered_Sheet1
Summary of Significant Accounting Policies, Rights Plan/Series A Junior Participating Preferred Stock (Details) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Dec. 31, 2012 | |
Rights Plan/Series A Junior Participating Preferred Stock [Abstract] | ' | ' |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Preference share right trigger and right to exercise | 'Generally, the Rights only are triggered and become exercisable if a person or group acquires beneficial ownership of 15 percent or more of the Companybs common stock or announces a tender offer for 15 percent or more of the Companybs common stock. | ' |
Minimum beneficial ownership to trigger rights as exercisable (in hundredths) | 15.00% | ' |
Minimum tender offer to trigger rights as exercisable (in hundredths) | 15.00% | ' |
Exercise price of right to current market price of right (in hundredths) | 50.00% | ' |
Statement [Line Items] | ' | ' |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, par value (in dollars per share) | $0.00 | $0.00 |
Rights plan description | 'Each holder of a Right (except for the Acquiring Person (as defined in the Rights Plan), whose Rights will be null and void upon such event) shall thereafter have the right to receive, upon exercise, that number of shares of Common Stock of the Company (or, in certain circumstances, cash, property or other securities of the Company) which equals the exercise price of the Right divided by 50% of the current market price (as defined in the Rights Agreement) per share of Common Stock at the date of the occurrence of such event. The Rights can be terminated by POZENbs Board of Directors and are subject to optional redemption by the Company at $0.001 per Right. The Rights Plan has a 10-year term and contains provisions requiring a periodic review and evaluation by the Board of Directors. | ' |
Redemption value of the right (in dollars per right) | $0.00 | ' |
Term of rights plan | '10 years | ' |
Common stock reserved for future issuance [Abstract] | ' | ' |
Common shares available for grant under stock option plans (in shares) | 1,729,571 | ' |
Common shares issuable pursuant to options and restricted stock units granted under equity compensations plans (in shares) | 4,970,129 | ' |
Rights Plan shares issuable as Series A Junior Participating Preferred Stock (in shares) | 90,000 | ' |
Total reserved | 6,789,700 | ' |
Series A Junior Participating Preferred Stock [Member] | ' | ' |
Statement [Line Items] | ' | ' |
Preferred stock, shares authorized (in shares) | 90,000 | 90,000 |
Preferred stock, par value (in dollars per share) | $0.00 | $0.00 |
Purchase price (in dollars per one-one-thousandth of a share) | $80 | ' |
Recovered_Sheet2
Summary of Significant Accounting Policies, Leases (Details) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
sqft | |
Leases [Abstract] | ' |
Office space (in square feet) | 17,009 |
Additional lease term extension | '5 years 7 months |
Lease extension notice period | '7 months |
Lease extension option available option | '3 years |
Increase in operating leases future minimum payments due | $2,700,000 |
Deferred rent payables | $153,464 |