Document and Entity Information
Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2018 | Feb. 04, 2019 | Jun. 30, 2018 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | SGEN | ||
Entity Registrant Name | SEATTLE GENETICS INC /WA | ||
Entity Central Index Key | 1,060,736 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 160,561,234 | ||
Entity Public Float | $ 7 | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | false | ||
Entity Shell Company | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 78,186 | $ 160,945 |
Short-term investments | 332,486 | |
Short-term investments | 252,226 | |
Accounts receivable, net | 146,281 | 84,774 |
Inventories | 53,239 | 59,978 |
Prepaid expenses and other current assets | 43,403 | 19,138 |
Total current assets | 653,595 | 577,061 |
Property and equipment, net | 103,820 | 103,756 |
Long-term investments | 49,194 | 0 |
In-process research and development | 300,000 | 0 |
Goodwill | 274,671 | 0 |
Other non-current assets | 122,049 | 197,132 |
Total assets | 1,503,329 | 877,949 |
Current liabilities: | ||
Accounts payable | 44,179 | 27,373 |
Accrued liabilities | 147,293 | 105,299 |
Current portion of deferred revenue | 33,600 | 34,457 |
Total current liabilities | 225,072 | 167,129 |
Long-term liabilities: | ||
Deferred revenue, less current portion | 0 | 30,618 |
Other long-term liabilities | 4,314 | 2,633 |
Total long-term liabilities | 4,314 | 33,251 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Preferred stock, $0.001 par value, 5,000 shares authorized; none issued | 0 | 0 |
Common stock, $0.001 par value, 250,000 shares authorized; 160,262 shares issued and outstanding at December 31, 2018 and 144,395 shares issued and outstanding at December 31, 2017 | 160 | 144 |
Additional paid-in capital | 2,598,411 | 1,806,159 |
Accumulated other comprehensive income (loss) | (40) | 63,836 |
Accumulated deficit | (1,324,588) | (1,192,570) |
Total stockholders’ equity | 1,273,943 | 677,569 |
Total liabilities and stockholders’ equity | $ 1,503,329 | $ 877,949 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 250,000,000 | 250,000,000 |
Common stock, shares issued (in shares) | 160,262,000 | 144,395,000 |
Common stock, shares outstanding (in shares) | 160,262,000 | 144,395,000 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues: | |||
Total revenues | $ 654,700 | $ 482,250 | $ 418,147 |
Costs and expenses: | |||
Research and development | 565,309 | 456,700 | 379,308 |
Selling, general and administrative | 261,096 | 167,233 | 139,247 |
Total costs and expenses | 914,698 | 678,051 | 560,872 |
Loss from operations | (259,998) | (195,801) | (142,725) |
Investment and other income, net | 13,652 | 36,914 | 2,614 |
Loss before income taxes | (246,346) | (158,887) | (140,111) |
Income tax benefit | 23,653 | 33,357 | 0 |
Net loss | $ (222,693) | $ (125,530) | $ (140,111) |
Net loss per share-basic and diluted (in dollars per share) | $ (1.41) | $ (0.88) | $ (1) |
Shares used in computation of per share amount-basic and diluted (in shares) | 157,655 | 143,174 | 140,746 |
Comprehensive loss: | |||
Net loss | $ (222,693) | $ (125,530) | $ (140,111) |
Other comprehensive income: | |||
Unrealized gain on securities available-for-sale net of tax provision of $0, $33,357, and $0, respectively | 293 | 63,888 | 616 |
Foreign currency translation gain (loss) | (50) | 11 | 4 |
Total other comprehensive income | 243 | 63,899 | 620 |
Comprehensive loss | (222,450) | (61,631) | (139,491) |
Product [Member] | |||
Revenues: | |||
Total revenues | 476,903 | 307,562 | 265,766 |
Costs and expenses: | |||
Cost of sales | 66,085 | 34,768 | 28,168 |
License and Service [Member] | |||
Revenues: | |||
Total revenues | 94,357 | 108,632 | 84,926 |
Royalty [Member] | |||
Revenues: | |||
Total revenues | 83,440 | 66,056 | 67,455 |
Costs and expenses: | |||
Cost of sales | $ 22,208 | $ 19,350 | $ 14,149 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Loss (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Statement [Abstract] | |||
Unrealized gain (loss) on securities available-for-sale, tax | $ 0 | $ 33,357 | $ 0 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Accumulated Deficit [Member] |
Balances, shares (in shares) at Dec. 31, 2015 | 139,674,000 | ||||
Balances, value at Dec. 31, 2015 | $ 685,911 | $ 140 | $ 1,613,383 | $ (683) | $ (926,929) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (140,111) | (140,111) | |||
Other comprehensive income | 620 | 620 | |||
Issuance of common stock for employee stock purchase plan (in shares) | 203,000 | ||||
Issuance of common stock for employee stock purchase plan | 5,686 | 5,686 | |||
Stock option exercises (in shares) | 1,778,000 | ||||
Stock option exercises | 29,510 | $ 1 | 29,509 | ||
Restricted stock vested during the period, net (in shares) | 538,000 | ||||
Restricted stock vested during the period, net | 0 | $ 1 | (1) | ||
Share-based compensation | 52,471 | 52,471 | |||
Balances, value at Dec. 31, 2016 | 634,087 | $ 142 | 1,701,048 | (63) | (1,067,040) |
Balances, shares (in shares) at Dec. 31, 2016 | 142,193,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (125,530) | (125,530) | |||
Other comprehensive income | 63,899 | 63,899 | |||
Issuance of common stock for employee stock purchase plan (in shares) | 172,000 | ||||
Issuance of common stock for employee stock purchase plan | 7,303 | 7,303 | |||
Stock option exercises (in shares) | 1,494,000 | ||||
Stock option exercises | 34,008 | $ 1 | 34,007 | ||
Restricted stock vested during the period, net (in shares) | 536,000 | ||||
Restricted stock vested during the period, net | 0 | $ 1 | (1) | ||
Share-based compensation | 63,802 | 63,802 | |||
Balances, value at Dec. 31, 2017 | $ 677,569 | $ 144 | 1,806,159 | 63,836 | (1,192,570) |
Balances, shares (in shares) at Dec. 31, 2017 | 144,395,000 | 144,395,000 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | $ (222,693) | (222,693) | |||
Other comprehensive income | 243 | 243 | |||
Issuance of common stock for employee stock purchase plan (in shares) | 206,000 | ||||
Issuance of common stock for employee stock purchase plan | 9,190 | 9,190 | |||
Stock option exercises (in shares) | 1,800,000 | ||||
Stock option exercises | 45,975 | $ 2 | 45,973 | ||
Restricted stock vested during the period, net (in shares) | 592,000 | ||||
Restricted stock vested during the period, net | $ 0 | $ 1 | (1) | ||
Issuance of common stock (in shares) | 13,269,000 | ||||
Issuance of common stock | $ 658,242 | 13 | 658,229 | ||
Share-based compensation | 78,861 | 78,861 | |||
Balances, value at Dec. 31, 2018 | $ 1,273,943 | $ 160 | $ 2,598,411 | $ (40) | $ (1,324,588) |
Balances, shares (in shares) at Dec. 31, 2018 | 160,262,000 | 160,262,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Operating activities: | |||
Net loss | $ (222,693) | $ (125,530) | $ (140,111) |
Adjustments to reconcile net loss to net cash used by operating activities | |||
Share-based compensation | 78,861 | 63,802 | 52,471 |
Depreciation and amortization | 26,032 | 24,269 | 18,034 |
Amortization of premiums, accretion of discounts and (gains) losses on debt securities | (2,530) | 497 | 4,746 |
Gain on equity securities | (7,336) | (33,777) | 0 |
Income tax benefit on unrealized loss on available-for-sale securities | 0 | (33,357) | 0 |
Deferred income taxes | (23,653) | 0 | 0 |
Other long-term liabilities | 1,681 | (154) | (882) |
Changes in operating assets and liabilities: | |||
Accounts receivable, net | (45,233) | (22,846) | (8,998) |
Inventories | 6,739 | 8,146 | (11,161) |
Prepaid expenses and other assets | (14,567) | (2,170) | (4,378) |
Accounts payable and accrued liabilities | 33,076 | 19,098 | 29,939 |
Deferred revenue | (33,913) | (16,878) | (36,631) |
Net cash used by operating activities | (203,536) | (118,900) | (96,971) |
Investing activities: | |||
Purchases of securities | (512,334) | (513,016) | (603,772) |
Proceeds from maturities of securities | 398,722 | 653,200 | 699,800 |
Proceeds from sales of securities | 140,352 | 60,056 | 0 |
Purchases of property and equipment | (21,219) | (28,722) | (27,835) |
Acquisition of manufacturing facility | 0 | (41,657) | 0 |
Acquisition of Cascadian Therapeutics, Inc., net of cash acquired | (598,151) | 0 | 0 |
Net cash provided (used) by investing activities | (592,630) | 129,861 | 68,193 |
Financing activities: | |||
Net proceeds from issuance of common stock | 658,242 | 0 | 0 |
Proceeds from exercise of stock options and employee stock purchase plan | 55,165 | 41,311 | 35,196 |
Net cash provided by financing activities | 713,407 | 41,311 | 35,196 |
Net increase (decrease) in cash and cash equivalents | (82,759) | 52,272 | 6,418 |
Cash and cash equivalents at beginning of year | 160,945 | 108,673 | 102,255 |
Cash and cash equivalents at end of year | $ 78,186 | $ 160,945 | $ 108,673 |
Organization and Business
Organization and Business | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Business | Organization and Business Organization We are a biotechnology company that develops and commercializes therapies targeting cancer. Our antibody-drug conjugate, or ADC, technology utilizes the targeting ability of monoclonal antibodies to deliver cell-killing agents directly to cancer cells. We are commercializing ADCETRIS ® , or brentuximab vedotin, for the treatment of several types of lymphoma. We are also advancing a pipeline of novel therapies for solid tumors and blood-related cancers designed to address unmet medical needs and improve treatment outcomes for patients. Capital requirements To execute our growth plans, we may need to seek additional funding through public or private financings, including debt or equity financings, and through other means, including collaborations and license agreements. If we cannot maintain adequate funds, we may be required to borrow funds, delay, reduce the scope of or eliminate one or more of our development programs. Additional financing may not be available when needed, or if available, we may not be able to obtain financing on favorable terms. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of presentation The accompanying consolidated financial statements reflect the accounts of Seattle Genetics, Inc. and its wholly-owned subsidiaries (collectively “Seattle Genetics,” “we,” “our,” “us,” or the “Company”). The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles, or GAAP. All significant intercompany transactions and balances have been eliminated. Management has determined that we operate in one segment: the development and sale of pharmaceutical products on our own behalf or in collaboration with others. Substantially all of our assets and revenues are related to operations in the U.S.; however, we also have subsidiaries in Australia, Canada, Ireland, Luxembourg, Switzerland, and the United Kingdom. Use of estimates The preparation of financial statements requires us to make estimates, assumptions, and judgments that affect the reported amounts in the financial statements and accompanying notes. Actual results could differ from those estimates. Estimates include those used for revenue recognition, valuation of investments, inventory valuation, business combinations, accrued liabilities (including those related to the long-term incentive plans, clinical trials and contingencies), stock option valuation, and valuation allowance for deferred tax assets. Reclassifications We reclassified certain prior year balances between accounts payable and accrued liabilities on our consolidated balance sheet to conform to current year presentation. These reclassifications had no effect on our total current liabilities or our consolidated statements of comprehensive loss . Cash and cash equivalents We consider all highly liquid investments with maturities of three months or less at the date of acquisition to be cash equivalents. Non-cash investing activities We had $4.6 million and $1.0 million of accrued capital expenditures as of December 31, 2018 and 2017 , respectively. Accrued capital expenditures have been treated as a non-cash investing activity and, accordingly, have not been included in the consolidated statement of cash flows until such amounts have been paid in cash. As further described in Note 5, we exercised a warrant to purchase additional shares of common stock in Immunomedics, Inc., or Immunomedics, in 2017. The fair value of the warrant derivative on the exercise date represented a non-cash investing activity and, accordingly, has not been included in the consolidated statement of cash flows. Investments We hold certain equity securities that we acquired in connection with strategic agreements, which are reported at estimated fair value. We adopted Accounting Standards Update, or ASU, “ASU 2016-01, Financial Instruments: Overall” as of January 1, 2018, which addressed certain aspects of recognition, measurement, presentation and disclosure of financial instruments, including that changes in the fair value of equity securities be recorded in income or loss rather than accumulated other comprehensive income or loss in stockholders’ equity. The cost of equity securities for purposes of computing gains and losses is based on the specific identification method. We used the modified retrospective method and recognized a $64.1 million cumulative effect of initially applying this ASU as an adjustment to decrease the opening accumulated deficit at January 1, 2018. Accordingly, comparative information has not been adjusted and continues to be reported under previous accounting standards. The implementation of this standard increases the volatility of net income or loss to the extent that we continue to hold equity securities. We invest our available cash primarily in debt securities. These debt securities are classified as available-for-sale, which are reported at estimated fair value with unrealized gains and losses included in accumulated other comprehensive income and loss in stockholders’ equity. Realized gains, realized losses and declines in the value of debt securities judged to be other-than-temporary are included in investment and other income, net . The cost of debt securities for purposes of computing realized and unrealized gains and losses is based on the specific identification method. Amortization of premiums and accretion of discounts on debt securities are included in investment and other income, net . Interest and dividends earned are included in investment and other income, net . We classify investments in debt securities maturing within one year of the reporting date, or where management’s intent is to use the investments to fund current operations or to make them available for current operations, as short-term investments. If the estimated fair value of a debt security is below its carrying value, we evaluate whether it is more likely than not that we will sell the security before its anticipated recovery in market value and whether evidence indicating that the cost of the investment is recoverable within a reasonable period of time outweighs evidence to the contrary. We also evaluate whether or not we intend to sell the investment. If the impairment is considered to be other-than-temporary, the security is written down to its estimated fair value. In addition, we consider whether credit losses exist for any securities. A credit loss exists if the present value of cash flows expected to be collected is less than the amortized cost basis of the security. Other-than-temporary declines in estimated fair value and credit losses are included in investment and other income, net . Derivative financial instruments We account for financial instruments as derivatives when the instrument includes an underlying and notional amount or payment provision, an initial net investment, and a net settlement. Derivative financial instruments are measured at fair value on the issuance date and are revalued on each subsequent balance sheet date. We use the Black-Scholes model using observable market inputs to estimate the fair value of derivatives. The changes in estimated fair value are recognized as current period income or loss. We do not hold derivative instruments for trading or speculative purposes and had no derivative instruments outstanding as of December 31, 2018 or 2017 . Fair value of financial instruments The recorded amounts of certain financial instruments, including cash and cash equivalents, interest receivable, accounts receivable, accounts payable and accrued liabilities approximate fair value due to their relatively short maturities. Investments that are classified as available-for-sale are recorded at estimated fair value. The estimated fair value for securities held is determined using quoted market prices, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency. Inventories We consider regulatory approval of product candidates to be uncertain. Accordingly, we charge manufacturing costs to research and development expense until such time as a product has received regulatory approval for commercial sale. Production costs for our marketed product, ADCETRIS, are capitalized into inventory. ADCETRIS inventory that is deployed for clinical, research or development use is charged to research and development expense when it is no longer available for commercial sales. Production costs for our other product candidates continue to be charged to research and development expense. We value our inventories at the lower of cost or market value. Cost is determined on a specific identification basis. Inventory includes the cost of materials, third-party contract manufacturing and overhead associated with the production of ADCETRIS. In the event that we identify excess, obsolete or unsalable inventory, its value is written down to net realizable value. Property and equipment Property and equipment are stated at cost. Land is not depreciated, while all other property and equipment are depreciated using the straight-line method over the estimated useful lives of the assets, which are generally as follows: Years Building 30 Laboratory and manufacturing equipment 5-15 Furniture and fixtures 5 Computers, software and office equipment 3 Leasehold improvements are amortized over the shorter of the remaining term of the applicable lease or the useful life of the asset. Gains and losses from the disposal of property and equipment are reflected in income or loss at the time of disposition and have not been significant. Expenditures for additions and improvements to our facilities are capitalized and expenditures for maintenance and repairs are charged to expense as incurred. Concessions received by us in connection with leases, including tenant improvement allowances and prorated rent, are included in deferred rent and other long-term liabilities and recognized as a reduction in rent expense over the term of the applicable lease. Business combinations, including acquired in-process research and development, and goodwill We account for business combinations using the acquisition method, recording the acquisition-date fair value of total consideration over the acquisition-date fair value of net assets acquired as goodwill. Fair value is typically estimated using an income approach based on the present value of future discounted cash flows. The significant estimates in the discounted cash flow model primarily include the discount rate, and rates of future revenue and expense growth and/or profitability of the acquired business. The discount rate considers the relevant risk associated with business-specific characteristics and the uncertainty related to the ability to achieve the projected cash flows. We may record adjustments to the fair values of assets acquired and liabilities assumed within the measurement period (up to one year from the acquisition date). In-process research and development assets are accounted for as indefinite-lived intangible assets and maintained on the balance sheet until either the underlying project is completed or the asset becomes impaired. If the project is completed, the carrying value of the related intangible asset is amortized to cost of sales over the remaining estimated life of the asset beginning in the period in which the project is completed. If the asset becomes impaired or is abandoned, the carrying value of the related intangible asset is written down to its fair value and an impairment charge is recorded in the period in which the impairment occurs. We evaluate indefinite-lived intangible assets and goodwill for impairment annually, as of October 1, or more frequently when events or circumstances indicate that impairment may have occurred. As part of the impairment evaluation, we may elect to perform an assessment of qualitative factors. If this qualitative assessment indicates that it is more likely than not that the fair value of the indefinite-lived intangible asset or the reporting unit (for goodwill) is less than its carrying value, we then would proceed with the quantitative impairment test to compare the fair value to the carrying value and record an impairment charge if the carrying value exceeds the fair value. Acquisition-related costs, including banking, legal, accounting, valuation, and other similar costs, are expensed in the periods in which the costs are incurred and included in loss from operations in the consolidated financial statements. The results of operations of the acquired business are included in the consolidated financial statements from the acquisition date. Other non-current assets Other non-current assets included: • Equity securities of $113.8 million and $188.4 million as of December 31, 2018 and 2017 , respectively. See Note 5 for additional information. As of December 31, 2017 , we also held a cost method investment for our $5.0 million non-controlling investment in Unum Therapeutics, Inc., or Unum, which was a privately-held company. We purchased this investment in connection with a strategic collaboration as disclosed in Note 12. In 2018, Unum concluded an initial public offering, at which point our investment became a marketable equity security recorded at fair value, and is disclosed as such in Note 5 as of December 31, 2018 . • Intangible assets resulting from milestone payments that became due upon the approval of ADCETRIS related to certain in-licensed technology. Intangible assets are amortized to cost of sales over the estimated life of the related licenses, which range from six to ten years. The components of net intangible assets are summarized as follows (in thousands): December 31, 2018 2017 Intangible assets $ 5,650 $ 5,650 Less: accumulated amortization (5,610 ) (4,886 ) Total $ 40 $ 764 Amortization expense on intangible assets resulting from milestone payments was $0.7 million for the year ended December 31, 2018 , and $0.8 million for each of the years ended December 31, 2017 and 2016 , respectively. Intangible assets will be fully amortized in 2019. Impairment of long-lived assets (other than acquired in-process research and development and goodwill) We assess the impairment of long-lived assets, primarily property and equipment, whenever events or changes in business circumstances indicate that the carrying amounts of the assets may not be fully recoverable. When such events occur, we determine whether there has been an impairment in value by comparing the asset’s carrying value with its fair value, as measured by the anticipated undiscounted net cash flows of the asset. If an impairment in value exists, the asset is written down to its estimated fair value. We have no t recognized any impairment losses through December 31, 2018 as there have been no events warranting an impairment analysis. Our long-lived assets are primarily located in the U.S. Revenue recognition We adopted Accounting Standards Codification Topic 606—Revenue from Contracts with Customers, or Topic 606, on January 1, 2018, resulting in a change to our accounting policy for revenue recognition. We used the modified retrospective method and recognized the cumulative effect of initially applying Topic 606 as an adjustment to decrease the opening accumulated deficit at January 1, 2018. Accordingly, comparative information has not been adjusted and continues to be reported under previous accounting standards. See Note 3 for additional information. Our revenues are comprised of ADCETRIS net product sales, amounts earned under our collaboration and licensing agreements, and royalties. Revenue recognition occurs when a customer obtains control of promised goods or services in an amount that reflects the consideration we expect to receive in exchange for those goods or services. The period between when we transfer control of promised goods or services and when we receive payment is expected to be one year or less, and that expectation is consistent with our historical experience. As such, we do not adjust our revenues for the effects of a significant financing component. Net product sales We sell ADCETRIS through a limited number of pharmaceutical distributors in the U.S. and Canada. Customers order ADCETRIS through these distributors, and we typically ship product directly to the customer. The delivery of ADCETRIS to the end-user site represents a single performance obligation for these transactions. We record product sales at the point in time when title and risk of loss pass, which generally occurs upon delivery of the product to the customer. The transaction price for product sales represents the amount we expect to receive, which is net of estimated government-mandated rebates and chargebacks, distribution fees, estimated product returns and other deductions. Accruals are established for these deductions, and actual amounts incurred are offset against applicable accruals. We reflect these accruals as either a reduction in the related account receivable from the distributor or as an accrued liability, depending on the nature of the sales deduction. Sales deductions are based on management’s estimates that consider payor mix in target markets and experience to-date. These estimates involve a substantial degree of judgment. We have applied a portfolio approach as a practical expedient for estimating net product sales from ADCETRIS. Government-mandated rebates and chargebacks : We have entered into a Medicaid Drug Rebate Agreement, or MDRA, with the Centers for Medicare & Medicaid Services. This agreement provides for a rebate based on covered purchases of ADCETRIS. Medicaid rebates are invoiced to us by the various state Medicaid programs. We estimate Medicaid rebates using the expected value approach, based on a variety of factors, including our experience to-date. We have also completed a Federal Supply Schedule, or FSS, agreement under which certain U.S. government purchasers receive a discount on eligible purchases of ADCETRIS. In addition, we have entered into a Pharmaceutical Pricing Agreement with the Secretary of Health and Human Services, which enables certain entities that qualify for government pricing under the Public Health Services Act, or PHS, to receive discounts on their qualified purchases of ADCETRIS. Under these agreements, distributors process a chargeback to us for the difference between wholesale acquisition cost and the applicable discounted price. As a result of our direct-ship distribution model, we can identify the entities purchasing ADCETRIS and this information enables us to estimate expected chargebacks for FSS and PHS purchases based on the expected value of each entity’s eligibility for the FSS and PHS programs. We also review historical rebate and chargeback information to further refine these estimates. Distribution fees, product returns and other deductions : Our distributors charge a volume-based fee for distribution services that they perform for us. We allow for the return of product that is within 30 days of its expiration date or that is damaged, or within 90 days past expiration date. We estimate product returns based on our experience to-date using the expected value approach. In addition, we consider our direct-ship distribution model, our belief that product is not typically held in the distribution channel, and the expected rapid use of the product by healthcare providers. We provide financial assistance to qualifying patients that are underinsured or cannot cover the cost of commercial coinsurance amounts through SeaGen Secure. SeaGen Secure is available to patients in the U.S. and its territories who meet various financial and treatment need criteria. Estimated contributions for commercial coinsurance under SeaGen Secure are deducted from gross sales and are based on an analysis of expected plan utilization. These estimates are adjusted as necessary to reflect our actual experience. Collaboration and license agreement revenues We have collaboration and license agreements with pharmaceutical and biotechnology and companies. Our proprietary ADC technology for linking cytotoxic agents to monoclonal antibodies is the basis for many of these collaboration and license agreements, including the ADC collaborations that we have entered into in the ordinary course of business, under which we granted our collaborators research and commercial licenses to our technology and typically provide technology transfer services, technical advice, supplies and services for a period of time. Our collaboration and license agreements include contractual milestones. Generally, the milestone events coincide with the progression of the collaborators’ product candidates. These consist of development milestones (such as designation of a product candidate or initiation of preclinical studies and the initiation of phase 1, phase 2, or phase 3 clinical trials), regulatory milestones (such as the filing of regulatory applications for marketing approval), and commercialization milestones (such as first commercial sale in a particular market and product sales in excess of a pre-specified threshold). Our ADC collaborators are solely responsible for the development of their product candidates, and the achievement of milestones in any of the categories identified above is based solely on the collaborators’ efforts. Since we do not take a substantive role or control the research, development or commercialization of any products generated by our ADC collaborators, we are not able to reasonably estimate when, if at all, any milestone payments or royalties may be payable to us by our ADC collaborators. As such, the milestone payments associated with our ADC collaborations involve a substantial degree of uncertainty and risk that they may never be received. In the case of our ADCETRIS collaboration with Takeda Pharmaceutical Company Limited, or Takeda, we may be involved in certain development activities; however, the achievement of milestone events under the agreement is primarily based on activities undertaken by Takeda. ADC collaborations are initially evaluated as to whether the intellectual property licenses granted by us represent distinct performance obligations. If they are determined to be distinct, the value of the intellectual property licenses would be recognized up-front while the research and development service fees would be recognized as the performance obligations are satisfied. Variable consideration is assessed at each reporting period as to whether it is not subject to significant future reversal and, therefore, should be included in the transaction price at the inception of the contract. Assessing the recognition of variable consideration requires significant judgment. If a contract includes a fixed or minimum amount of research and development support, this also would be included in the transaction price. Changes to ADC collaborations, such as the extensions of the research term or increasing the number of targets or technology covered under an existing agreement, are assessed for whether they represent a modification or should be accounted for as a new contract. We have concluded that the license of intellectual property in our current ADC collaborations is not distinct from the perspective of our collaborators at the time of initial transfer, since we do not license intellectual property without related technology transfer and research and development support services. Such evaluation requires significant judgment since it is made from the customer's perspective. Our performance obligations under our collaborations include such things as providing intellectual property licenses, performing technology transfer, performing research and development consulting services, providing reagents, ADCs, and other materials, and notifying the customer of any enhancements to licensed technology or new technology that we discover, among others. We determined our performance obligations under our current ADC collaborations as evaluated at contract inception were not distinct and represented a single performance obligation. Revenue is recognized using a proportional performance model, representing the transfer of goods or services as activities are performed over the term of the agreement. Upfront payments are also amortized to revenue over the performance period. Upfront payment contract liabilities resulting from our collaborations do not represent a financing component as the payment is not financing the transfer of goods or services, and the technology underlying the licenses granted reflects research and development expenses already incurred by us. When no performance obligations are required of us, or following the completion of the performance obligation period, such amounts are recognized as revenue upon transfer of control of the goods or services to the customer. Generally, all amounts received or due other than sales-based milestones and royalties are classified as collaboration and license agreement revenues. Sales-based milestones and royalties are recognized as royalty revenue in the period the related sale occurred. We generally invoice our collaborators and licensees on a monthly or quarterly basis, or upon the completion of the effort or achievement of a milestone, based on the terms of each agreement. Deferred revenue arises from amounts received in advance of the culmination of the earnings process and is recognized as revenue in future periods as performance obligations are satisfied. Deferred revenue expected to be recognized within the next twelve months is classified as a current liability. Royalty revenues and cost of royalty revenues Royalty revenues primarily reflect amounts earned under the ADCETRIS collaboration with Takeda. These royalties include commercial sales-based milestones and sales royalties that relate predominantly to the license of intellectual property. Sales royalties are based on a percentage of Takeda’s net sales of ADCETRIS, with rates that range from the mid-teens to the mid-twenties based on sales volume. Takeda bears a portion of third-party royalty costs owed on its sales of ADCETRIS. This amount is included in royalty revenues. Cost of royalty revenues reflects amounts owed to our third-party licensors related to Takeda’s sales of ADCETRIS. Both of these amounts are recognized in the period in which the related sales by Takeda occur. Research and development expenses Research and development, or R&D, expenses consist of salaries, benefits and other headcount-related costs of our R&D staff, preclinical activities, clinical trials and related manufacturing costs, lab supplies, contract and outside service fees and facilities and overhead expenses for research, development and preclinical studies focused on drug discovery, development and testing. R&D activities are expensed as incurred. Clinical trial expenses are a significant component of research and development expenses, and we outsource a significant portion of these costs to third parties. Third-party clinical trial expenses include investigator fees, site costs, clinical research organization costs, and costs for central laboratory testing and data management. Costs associated with activities performed under co-development collaborations are reflected in R&D expense. In-licensing fees, milestones, maintenance fees and other costs to acquire technologies utilized in R&D for product candidates that have not yet received regulatory approval and that are not expected to have alternative future use are expensed when incurred. Non-refundable advance payments for goods or services that will be used or rendered for future R&D activities are capitalized and recognized as expense as the related goods are delivered or the related services are performed. This results in the temporary deferral of recording expense for amounts incurred for research and development activities from the time payments are made until the time goods or services are provided. Advertising Advertising costs are expensed as incurred. We incurred $26.6 million , $13.8 million , and $12.9 million in advertising expenses during 2018 , 2017 , and 2016 , respectively. Concentration of credit risk Cash, cash equivalents and investments are invested in accordance with our investment policy. The policy includes guidelines for the investment of cash reserves and is reviewed periodically to minimize credit risk. Most of our investments are in U.S. Treasury securities, are not federally insured. We have accounts receivable from the sale of ADCETRIS from a small number of distributors, and from our collaborators. We do not require collateral on amounts due from our distributors or our collaborators and are therefore subject to credit risk. We have not experienced any significant credit losses to date as a result of credit risk concentration and do not consider an allowance for doubtful accounts to be necessary. Major customers We sell ADCETRIS through a limited number of distributors. Certain of these distributors, together with entities under their common control, each individually accounted for greater than 10% of total revenues and greater than 10% of accounts receivable as noted below. In addition, one of our collaborators accounted for greater than 10% of total revenues as noted below. Revenues generated outside the U.S., as determined by customer location, were less than 10% of total revenues for all years presented. The following table presents each major distributor or collaborator that comprised more than 10% of total revenue: Years ended December 31, 2018 2017 2016 Distributor A 28 % 23 % 22 % Distributor B 22 % 19 % 19 % Distributor C 20 % 18 % 17 % Takeda 21 % 29 % 27 % The following table presents each major distributor or collaborator that accounted for more than 10% of accounts receivable: December 31, 2018 2017 Distributor A 32 % 32 % Distributor B 21 % 26 % Distributor C 23 % 29 % Takeda 20 % <10% Major suppliers The use of a relatively small number of contract manufacturers to supply drug necessary for our commercial operations and clinical trials creates a concentration of risk for us. While primarily one source of supply is utilized for certain components of ADCETRIS and each of our product candidates, other sources are available should we need to change suppliers. We also endeavor to maintain reasonable levels of drug supply for our use. A change in suppliers, however, could cause a delay in delivery of drug which could result in the interruption of commercial operations or clinical trials. Such an event would adversely affect our business. Income taxes We recognize deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Deferred tax assets and liabilities are determined based on the differences between the financial statement and tax bases of assets and liabilities using tax rates in effect for the year in which the differences are expected to reverse. We have provided a full valuation allowance against our deferred tax assets for all periods presented. A valuation allowance is recorded when it is more likely than not that the net deferred tax asset will not be realized. We follow the guidance related to accounting for uncertainty in income taxes, which requires the recognition of an uncertain tax position when it is more likely than not to be sustainable upon audit by the applicable taxing authority. Share-based compensation We use the graded-vesting attribution method for recognizing compensation expense for our stock options and restricted stock units (“RSUs”). Compensation expense is recognized over the requisite service periods on awards ultimately expected to vest and reduced for forfeitures that are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. For performance-based stock options and RSUs, we record compensation expense over the estimated service period once the achievement of the performance-based milestone is considered probable. At each reporting date, we assess whether achievement of a milestone is considered probable, and if so, record compensation expense based on the portion of the service period elapsed to date with respect to that milestone, with a cumulative catch-up, net of estimated forfeitures. We will recognize remaining compensation expense with respect to a milestone, if any, over the remaining estimated service period. Long-term incentive plans We have established Long-Term Incentive Plans, or LTIPs. The LTIPs provide eligible employees with the opportunity to receive performance-based incentive compensation, which may be comprised of cash, stock options, and/or RSUs. The payment of cash and the grant and/or vesting of equity are contingent upon the achievement of pre-determined regulatory milestones. We record compensation expense over the estimated service period for each milestone subject to the achievement of the milestone being considered probable in accordance with the provisions of Accounting Standards Codification Topic 450, Contingencies. At each reporting date, we assess whether achievement of a milestone is considered probable and, if so, record compensation expense based on the portion of the service period elapsed to date with respect to that milestone, with a cumulative catch-up, net of estimated forfeitures. We recognize compensation expense with respect to a milestone over the remaining estimated service period. The total estimate of unrecognized compensation expense could change in the future for several reasons, including the addition or termination of employees, the recognition of LTIP compensation expense, o |
Revenue from contracts with cus
Revenue from contracts with customers | 12 Months Ended |
Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from contracts with customers | Revenue from contracts with customers On January 1, 2018, we adopted Topic 606 applying the modified retrospective method to all contracts that were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 were presented under Topic 606, while prior period amounts were not adjusted and reported under the accounting standards in effect for the prior periods. We recorded the following cumulative effect as of January 1, 2018, itemized here (in thousands) and further described below: Collaboration and license agreement revenues $ 10,281 Royalty revenues 22,230 Cost of royalty revenues (5,955 ) Accumulated deficit – (debit) credit $ 26,556 The cumulative effect adjustment recorded above resulted in an increase to accounts receivable, net for $16.3 million , an increase to prepaid expenses and other current assets for $12.7 million , and an increase to current portion of deferred revenue for $2.4 million as of January 1, 2018. Impact to net product sales Topic 606 does not generally change the practice under which we recognize revenue from net product sales of ADCETRIS. Impact to collaboration and license agreement revenues The achievement of development milestones under our collaborations will be recorded during the period their achievement becomes most likely, which may result in earlier recognition as compared to previous accounting principles. Each of our current ADC collaborations contain a single performance obligation under Topic 606. The Takeda ADCETRIS collaboration is the only ongoing collaboration that was significantly impacted by the adoption of Topic 606. The Takeda ADCETRIS collaboration provides for the global co-development of ADCETRIS and the commercialization of ADCETRIS by Takeda in its territory. Under this collaboration, we have commercial rights for ADCETRIS in the U.S. and its territories and in Canada, and Takeda has commercial rights in the rest of the world and pays us a royalty. Our performance obligations under the collaboration include providing intellectual property licenses, performing technology transfer, providing research and development services for co-funded activities, allowing access to data, submitting regulatory filings and other information for co-funded activities, and providing manufacturing support including supply of ADCETRIS drug components, finished ADCETRIS product, and know-how. We determined that our performance obligations under the collaboration as evaluated at contract inception were not distinct and represented a single performance obligation, and that the obligations for goods and services provided would be completed over the performance period of the agreement. Any payments received from Takeda, including the upfront payment, progress-dependent development and regulatory milestone payments, reimbursement for drug supplied, and net development cost reimbursement payments, are recognized as revenue upon transfer of control of the goods or services over the ten-year development period (December 2009 through November 2019) of the collaboration, within collaboration and license agreement revenues. Updates to the Takeda ADCETRIS collaboration transaction price for variable consideration, such as approval of the co-development annual budget and binding production forecast, are considered at each reporting period as to whether they are not subject to significant future reversal. Shipments of drug supply that occurred after the expiration of the drug supply agreement in September 2018 were recorded as a separate performance obligation. Impact to royalty revenues Commercial sales-based milestones and sales royalties, primarily earned under the Takeda ADCETRIS collaboration, are recorded in the period of the related sales by Takeda, based on estimates if actual information is not yet available, rather than recording them as reported by the customer one quarter in arrears under previous accounting guidance. Takeda also bears a portion of third-party royalty costs owed on its sales of ADCETRIS which is included in royalty revenues. Disaggregation of total revenues We have one marketed product, ADCETRIS. Substantially all of our product revenues are recorded in the U.S. Substantially all of our royalty revenues are from our collaboration with Takeda. Collaboration and license agreement revenues by collaborator are summarized as follows (in thousands): Years ended December 31, 2018 2017 2016 Takeda $ 58,605 $ 74,872 $ 44,384 AbbVie 13,000 23,260 25,676 Genmab 7,000 — — GSK 6,000 — — Other 9,752 10,500 14,866 Collaboration and license agreement revenues $ 94,357 $ 108,632 $ 84,926 Contract balances and performance obligations Contract assets consist of unbilled receivables related to the Takeda ADCETRIS collaboration and were $12.7 million and zero as of January 1, 2018 and December 31, 2018 , respectively. These were recorded in prepaid expenses and other current assets on the consolidated balance sheet. The decrease from January 1, 2018 to December 31, 2018 was primarily due to reimbursement for drug supplied against the 2018 production forecast during the year ended December 31, 2018 . Contract liabilities consist of deferred revenue primarily related to our remaining performance obligations under the Takeda ADCETRIS collaboration and are presented as line items on the consolidated balance sheet. Deferred revenue will be recognized as the remaining performance obligations are satisfied through November 2019. We recognized collaboration and license agreement revenues of $34.5 million during the year ended December 31, 2018 that were included in the deferred revenue balance as of January 1, 2018. For the year ended December 31, 2018 , collaboration and license agreement revenues from Takeda also included substantially all of a $10.0 million regulatory milestone. Impacts to December 31, 2018 consolidated financial statements (in thousands) As reported Adjustments Balances without the adoption of Topic 606 Consolidated Balance Sheet data: Accounts receivable, net $ 146,281 $ (18,501 ) $ 127,780 Prepaid expenses and other current assets 43,403 — 43,403 Current portion of deferred revenue 33,600 — 33,600 Accumulated deficit (1,324,588 ) (18,501 ) (1,343,089 ) Consolidated Statements of Comprehensive Loss data: Collaboration and license agreement revenues $ 94,357 $ 10,282 $ 104,639 Royalty revenues 83,440 (1,634 ) 81,806 Total revenues 654,700 8,648 663,348 Cost of royalty revenues 22,208 592 22,800 Net loss (222,693 ) 8,056 (214,637 ) |
Acquisition of Cascadian
Acquisition of Cascadian | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Acquisition of Cascadian | Acquisition of Cascadian In March 2018, we acquired all issued and outstanding shares of Cascadian Therapeutics Inc., or Cascadian, a clinical-stage biopharmaceutical company based in Seattle, Washington, for $10.00 per share in cash, or approximately $614.1 million , which was funded by an underwritten public offering as further described in Note 15. The acquisition of Cascadian, or the Cascadian Acquisition, expanded our late-stage pipeline, providing global rights to tucatinib, an investigational oral tyrosine kinase inhibitor, or TKI, that is currently being evaluated in a pivotal phase 2 trial called HER2CLIMB for patients with HER2 positive metastatic breast cancer who have been previously treated with HER2-targeted agents, including patients with or without brain metastases. The acquisition of Cascadian was accounted for as a business combination. During the year ended December 31, 2018 , we incurred $8.5 million in acquisition-related costs, which were recorded in selling, general and administrative expenses. The purchase price allocation of the assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date was as follows (in thousands): Cash and cash equivalents $ 15,919 Short-term and long-term investments 66,491 Prepaid expenses and other assets 2,215 Property and equipment 566 In-process research and development 300,000 Goodwill 274,671 Accounts payable and accrued liabilities (22,139 ) Deferred tax liability (23,653 ) Total purchase price $ 614,070 The amount allocated to in-process research and development was based on the present value of future discounted cash flows, which was based on significant estimates. These estimates included the number of potential patients and market price of a future tucatinib-based regimen, costs required to conduct clinical trials and potentially commercialize tucatinib, as well as estimates for probability of success and the discount rate. Goodwill primarily was attributed to tucatinib’s potential application in other treatment settings, intangible assets that do not qualify for separate recognition, and synergies with our existing pipeline and capabilities. Goodwill is not expected to be deductible for tax purposes. The initial amount allocated to goodwill presented in the previous quarterly unaudited condensed consolidated financial statements in 2018 was preliminary, since the acquisition accounting was not yet finalized as it related to income taxes. In the fourth quarter of 2018, we recorded a $23.7 million increase to goodwill and a corresponding deferred tax liability related to the intangible assets acquired upon finalization of various analyses for pre-acquisition tax periods. See Note 11 for additional information on the impact of this adjustment to incomes taxes. The financial information in the table below summarizes the combined results of operations of Seattle Genetics and Cascadian on a pro forma basis, for the period in which the acquisition occurred and the comparative period as though the companies had been combined as of January 1, 2017. Pro forma adjustments have been made primarily related to acquisition-related transaction costs and employee costs. The following unaudited pro forma financial information is presented for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved had the acquisition occurred as of January 1, 2017 or indicative of future results (in thousands, except for per share information): Years Ended December 31, 2018 2017 Revenues $ 654,700 $ 482,250 Net loss (251,626 ) (212,364 ) Net loss per share - basic and diluted (1.58 ) (1.36 ) Manufacturing facility acquisition Under a series of agreements among Bristol Myers Squibb Company, or BMS, and its landlord, we completed the acquisition of a biologics manufacturing facility and certain related equipment and improvements located in Bothell, Washington in October 2017. The purchase price was paid for in cash. The acquisition of the manufacturing facility and the related assets were accounted for as a business combination using the acquisition method. The results of operations of the manufacturing facility and the estimated fair values of the assets acquired and liability assumed have been included in our consolidated financial statements as of the closing date of the acquisition. Acquisition-related costs were not significant. We also entered into a clinical manufacturing services agreement in October 2017 with BMS, under which we agreed to manufacture certain BMS clinical product candidates in accordance with prescribed production schedules and quantities. These activities concluded as of March 31, 2018. We recorded revenue under the clinical manufacturing services agreement within collaboration and license agreement revenues. This revenue was not significant during the years ended December 31, 2018 and 2017. The purchase price was allocated to the assets acquired and liability assumed based on their estimated fair values as follows (in thousands): Building $ 23,448 Land 4,771 Other property and equipment 14,538 Current portion of deferred revenue (1,100 ) Total purchase price $ 41,657 Pro forma results of operations have not been presented because the effects of this acquisition were not significant to our consolidated results of operations. |
Fair Value
Fair Value | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Fair Value We have certain assets that are measured at fair value on a recurring basis according to a fair value hierarchy that prioritizes the inputs, assumptions and valuation techniques used to measure fair value. The three levels of the fair value hierarchy are: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Level 2: Quoted prices in markets that are not active or financial instruments for which all significant inputs are observable, either directly or indirectly. Level 3: Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. The determination of a financial instrument’s level within the fair value hierarchy is based on an assessment of the lowest level of any input that is significant to the fair value measurement. We consider observable data to be market data which is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market. The fair value hierarchy of the Company’s assets carried at fair value and measured on a recurring basis was as follows (in thousands): Fair value measurement using: Quoted prices in active markets for identical assets (Level 1) Other observable inputs (Level 2) Significant unobservable inputs (Level 3) Total December 31, 2018 Short-term investments—debt securities $ 332,486 $ — $ — $ 332,486 Long-term investments—debt securities 49,194 — — 49,194 Other non-current assets—equity securities 113,812 — — 113,812 Total $ 495,492 $ — $ — $ 495,492 December 31, 2017 Short-term investments—debt securities $ 252,226 $ — $ — $ 252,226 Other non-current assets—equity securities 188,358 — — 188,358 Total $ 440,584 $ — $ — $ 440,584 Our debt securities consisted of the following (in thousands): Amortized cost Gross unrealized gains Gross unrealized losses Fair value December 31, 2018 U.S. Treasury securities $ 381,673 $ 133 $ (126 ) $ 381,680 Contractual maturities (at date of purchase): Due in one year or less $ 246,440 $ 246,402 Due in one to two years 135,233 135,278 Total $ 381,673 $ 381,680 December 31, 2017 U.S. Treasury securities $ 252,511 $ — $ (285 ) $ 252,226 Contractual maturities (at date of purchase): Due in one year or less $ 151,903 $ 151,842 Due in one to two years 100,608 100,384 Total $ 252,511 $ 252,226 Our equity securities consisted of holdings in common stock of Immunomedics and Unum, each holding purchased in connection with strategic collaborations with the respective company. The collaboration agreement with Immunomedics was terminated in 2017. Immunomedics stock purchase agreement: In February 2017, we paid Immunomedics $14.7 million for 3.0 million shares of Immunomedics common stock and a warrant to purchase an additional 8.7 million shares of Immunomedics common stock at an exercise price of $4.90 per share. The consideration was primarily allocated to the common stock based on the relative fair values as of the purchase date. The shares of common stock were classified as available-for-sale securities and carried at estimated fair value. In September 2017, Immunomedics registered the resale of the shares of its common stock underlying the warrant under the Securities Act of 1933, as amended, and as a result, the warrant met the definition of a derivative as of that date and was recorded at fair value. We recorded a non-cash net gain of $33.8 million in investment and other income, net , primarily resulting from the change in the fair value of the warrant derivative, during 2017. This amount approximated the fair value of the warrant derivative upon exercise in December 2017, when we exercised the warrant in its entirety for cash of $42.4 million and received 8.7 million shares of Immunomedics common stock upon exercise. The shares of common stock that are held by us as a result of the warrant exercise, similar to the shares purchased in February 2017, were classified as available-for-sale securities and carried at estimated fair value. |
Investment and Other Income, Ne
Investment and Other Income, Net | 12 Months Ended |
Dec. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Investment and Other Income, Net | Investment and Other Income, Net Investment and other income, net consisted of the following (in thousands): Years ended December 31, 2018 2017 2016 Gain on equity securities $ 7,336 $ 33,777 $ — Investment income, net 6,316 3,137 2,614 Total investment and other income, net $ 13,652 $ 36,914 $ 2,614 Gain on equity securities includes the realized and unrealized holding gains and losses on our equity securities. Our equity securities are described in more detail in Note 5. As disclosed in Note 2, we adopted “ASU 2016-01, Financial Instruments: Overall” on January 1, 2018, which required that changes in the fair value of equity securities be recorded in income or loss rather than accumulated other comprehensive income or loss in stockholders' equity. Comparative information has not been adjusted and continues to be reported under previous accounting standards. During 2018 , the gain on equity securities was driven by the realized gain from selling a portion of our Immunomedics common stock holding for $91.9 million , offset in part by net unrealized losses on equity securities still held at December 31, 2018 of $20.9 million . During 2017, the gain on equity securities related to changes in the fair value of an Immunomedics warrant derivative prior to the warrant's exercise by us in December 2017. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories were comprised of ADCETRIS and consisted of the following (in thousands): December 31, 2018 2017 Raw materials $ 43,986 $ 52,398 Finished goods 9,253 7,580 Total $ 53,239 $ 59,978 In 2018, we recorded a charge to cost of sales for $18.1 million related to in-process inventory that did not meet our manufacturing specifications. This inventory adjustment did not impact availability of product supply required to meet demand for ADCETRIS. |
Property and equipment
Property and equipment | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment | Property and equipment Property and equipment consisted of the following (in thousands): December 31, 2018 2017 Leasehold improvements $ 101,743 $ 86,778 Laboratory and manufacturing equipment 62,947 57,800 Building 23,341 23,448 Computers, software and office equipment 25,159 20,928 Furniture and fixtures 7,043 6,627 Land 4,771 4,771 225,004 200,352 Less: accumulated depreciation and amortization (121,184 ) (96,596 ) Total $ 103,820 $ 103,756 Depreciation and amortization expenses on property and equipment totaled $25.3 million , $23.5 million , and $17.3 million for the years ended December 31, 2018 , 2017 , and 2016 , respectively. Leasehold improvements included $18.5 million and $3.5 million of construction in process at December 31, 2018 and 2017 , respectively. |
Manufacturing facility acquisit
Manufacturing facility acquisition | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Manufacturing facility acquisition | Acquisition of Cascadian In March 2018, we acquired all issued and outstanding shares of Cascadian Therapeutics Inc., or Cascadian, a clinical-stage biopharmaceutical company based in Seattle, Washington, for $10.00 per share in cash, or approximately $614.1 million , which was funded by an underwritten public offering as further described in Note 15. The acquisition of Cascadian, or the Cascadian Acquisition, expanded our late-stage pipeline, providing global rights to tucatinib, an investigational oral tyrosine kinase inhibitor, or TKI, that is currently being evaluated in a pivotal phase 2 trial called HER2CLIMB for patients with HER2 positive metastatic breast cancer who have been previously treated with HER2-targeted agents, including patients with or without brain metastases. The acquisition of Cascadian was accounted for as a business combination. During the year ended December 31, 2018 , we incurred $8.5 million in acquisition-related costs, which were recorded in selling, general and administrative expenses. The purchase price allocation of the assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date was as follows (in thousands): Cash and cash equivalents $ 15,919 Short-term and long-term investments 66,491 Prepaid expenses and other assets 2,215 Property and equipment 566 In-process research and development 300,000 Goodwill 274,671 Accounts payable and accrued liabilities (22,139 ) Deferred tax liability (23,653 ) Total purchase price $ 614,070 The amount allocated to in-process research and development was based on the present value of future discounted cash flows, which was based on significant estimates. These estimates included the number of potential patients and market price of a future tucatinib-based regimen, costs required to conduct clinical trials and potentially commercialize tucatinib, as well as estimates for probability of success and the discount rate. Goodwill primarily was attributed to tucatinib’s potential application in other treatment settings, intangible assets that do not qualify for separate recognition, and synergies with our existing pipeline and capabilities. Goodwill is not expected to be deductible for tax purposes. The initial amount allocated to goodwill presented in the previous quarterly unaudited condensed consolidated financial statements in 2018 was preliminary, since the acquisition accounting was not yet finalized as it related to income taxes. In the fourth quarter of 2018, we recorded a $23.7 million increase to goodwill and a corresponding deferred tax liability related to the intangible assets acquired upon finalization of various analyses for pre-acquisition tax periods. See Note 11 for additional information on the impact of this adjustment to incomes taxes. The financial information in the table below summarizes the combined results of operations of Seattle Genetics and Cascadian on a pro forma basis, for the period in which the acquisition occurred and the comparative period as though the companies had been combined as of January 1, 2017. Pro forma adjustments have been made primarily related to acquisition-related transaction costs and employee costs. The following unaudited pro forma financial information is presented for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved had the acquisition occurred as of January 1, 2017 or indicative of future results (in thousands, except for per share information): Years Ended December 31, 2018 2017 Revenues $ 654,700 $ 482,250 Net loss (251,626 ) (212,364 ) Net loss per share - basic and diluted (1.58 ) (1.36 ) Manufacturing facility acquisition Under a series of agreements among Bristol Myers Squibb Company, or BMS, and its landlord, we completed the acquisition of a biologics manufacturing facility and certain related equipment and improvements located in Bothell, Washington in October 2017. The purchase price was paid for in cash. The acquisition of the manufacturing facility and the related assets were accounted for as a business combination using the acquisition method. The results of operations of the manufacturing facility and the estimated fair values of the assets acquired and liability assumed have been included in our consolidated financial statements as of the closing date of the acquisition. Acquisition-related costs were not significant. We also entered into a clinical manufacturing services agreement in October 2017 with BMS, under which we agreed to manufacture certain BMS clinical product candidates in accordance with prescribed production schedules and quantities. These activities concluded as of March 31, 2018. We recorded revenue under the clinical manufacturing services agreement within collaboration and license agreement revenues. This revenue was not significant during the years ended December 31, 2018 and 2017. The purchase price was allocated to the assets acquired and liability assumed based on their estimated fair values as follows (in thousands): Building $ 23,448 Land 4,771 Other property and equipment 14,538 Current portion of deferred revenue (1,100 ) Total purchase price $ 41,657 Pro forma results of operations have not been presented because the effects of this acquisition were not significant to our consolidated results of operations. |
Accrued liabilities
Accrued liabilities | 12 Months Ended |
Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |
Accrued liabilities | Accrued liabilities Accrued liabilities consisted of the following (in thousands) : December 31, 2018 2017 Employee compensation and benefits $ 49,788 $ 38,469 Clinical trial and related costs 38,692 26,514 Contract manufacturing 9,215 8,910 Gross-to-net deductions and third-party royalties 32,908 20,980 Professional services and other 16,690 10,426 Total $ 147,293 $ 105,299 |
Income taxes
Income taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income taxes | Income taxes Our pre-tax loss by jurisdiction consisted of the following (in thousands): December 31, 2018 2017 2016 U.S. $ (226,626 ) $ (71,698 ) $ (66,215 ) Foreign (19,720 ) (87,189 ) (73,896 ) Total $ (246,346 ) $ (158,887 ) $ (140,111 ) A reconciliation of the federal statutory income tax rate to the effective income tax rate is as follows: Years ended December 31, 2018 2017 2016 Statutory federal income tax rate (21.0 )% (35.0 )% (35.0 )% Tax credits (6.0 ) (11.0 ) (25.0 ) Foreign rate differential (8.0 ) 14.0 16.0 State income taxes and other (3.0 ) (1.0 ) 1.0 Valuation allowance 44.0 (55.0 ) 40.0 Stock compensation (4.0 ) (5.0 ) 3.0 Worthless stock deduction (12.0 ) — — Impact of the Act — 72.0 — Effective tax rate, before impact in other comprehensive income (10.0 ) (21.0 ) 0.0 Impact in other comprehensive income — 21.0 — Effective tax rate, after impact in other comprehensive income (10.0 )% 0.0 % 0.0 % In connection with the 2018 Cascadian Acquisition, we recognized a deferred tax liability of $23.7 million on acquired intangible assets. As a result, we recorded an income tax benefit of $23.7 million for the release of valuation allowance on our existing U.S. deferred tax assets as a result of the offset of deferred tax liabilities established for intangible assets from the acquisition. In 2017, we recorded a deferred income tax benefit of $33.4 million due to unrealized gain s on our common stock investment in Immunomedics, which was offset by an income tax provision for the same amount in other comprehensive income. The Tax Cuts and Jobs Act, or the Act, was enacted on December 22, 2017, which reduced the U.S. federal corporate tax rate from 35% to 21% , among other changes. This resulted in a $114.8 million reduction in our net deferred tax assets as of December 31, 2017 to reflect the new statutory rate. The rate adjustment also resulted in a decrease in the valuation allowance. The foreign rate differential in the table above reflects the effect of operations in jurisdictions with tax rates that differ from the rate in the U.S. The change in foreign rate differential impact on the effective tax rate is primarily due to the decrease in the US tax rate of 35% in 2017 to 21% in 2018, and an increase in pre-tax earnings from our operations in Switzerland. At December 31, 2018 , unremitted earnings of our foreign subsidiaries, which were insignificant, will be retained indefinitely by the foreign subsidiaries for continuing investment. If foreign earnings were to be repatriated to the U.S., we could be subject to additional state income and withholding taxes. Our net deferred tax assets consisted of the following (in thousands): December 31, 2018 2017 Deferred tax assets: Net operating loss carryforwards $ 283,888 $ 158,951 Foreign net operating loss carryforwards 12,766 2,651 Tax credit carryforwards 175,702 148,027 Deferred revenue 2,553 13,779 Share-based compensation 29,354 26,454 Capitalized research and development 1,362 17,150 Depreciation and amortization 8,456 7,606 Other 20,627 15,178 Total deferred tax assets 534,708 389,796 Less: valuation allowance (477,834 ) (364,538 ) Total deferred tax assets, net of valuation allowance 56,874 25,258 Deferred tax liability: Intangibles and amortization (48,819 ) — Realized and unrealized gain on available-for-sale securities (8,055 ) (25,258 ) Net deferred tax assets (liability) $ — $ — Our deferred tax assets primarily consist of net operating loss, or NOL, carryforwards, tax credit carryforwards, share-based compensation, capitalized research and development expense and deferred revenue. Realization of deferred tax assets is dependent upon a number of factors, including future earnings, the timing and amount of which is uncertain. Accordingly, the deferred tax assets have been fully offset by a valuation allowance. At December 31, 2018 , we had gross federal NOL carryforwards of $1.2 billion , of which $184.8 million may be carried forward indefinitely and $1.0 billion of which expire from 2019 to 2038 if not utilized, gross state NOL carryforwards of $450.8 million , gross foreign NOL carryforwards of $143.2 million and tax credit carryforwards of $196.4 million expiring from 2019 to 2038 . Utilization of the NOL and tax credit carryforwards may be subject to a substantial annual limitation in the event of a change in ownership as set forth in Section 382 of the Internal Revenue Code of 1986, as amended. We have evaluated ownership changes through the year ended December 31, 2017 and believe that it is likely that utilization of its NOLs would not be limited under Section 382 as of December 31, 2017. It is possible that there has been or may be a change in ownership after this date, which would limit our ability to utilize our NOLs. Any limitation may result in the expiration of the NOLs and tax credit carryforwards before utilization. The valuation allowance increase d by $113.3 million in 2018 , decrease d by $16.8 million in 2017 , and increase d by $59.2 million in 2016 , which was mostly related to the changes in our deferred tax asset balances. The 2018 increase in the valuation allowance of $143.3 million related to the current year loss, tax credits and other activity, offset by $23.7 million decrease for release of valuation allowance related to the deferred tax assets and liabilities acquired in the Cascadian acquisition, and a $6.3 million decrease due to the adoption of ASC Topic 606. The decrease in the valuation allowance in 2017 included the $114.8 million decrease to reflect the new statutory rate and the $33.4 million decrease related to the unrealized gain on the Immunomedics common stock investment recorded through other comprehensive income, offset by the $70.9 million increase in connection with the adoption of ASU 2016-09 and a $60.5 million increase for the current year loss, tax credits and other activity. The financial statement recognition of the benefit for a tax position is dependent upon the benefit being more likely than not to be sustainable upon audit by the applicable taxing authority. If this threshold is met, the tax benefit is then measured and recognized at the largest amount that is greater than 50% likely of being realized upon ultimate settlement. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands): Years ended December 31, 2018 2017 2016 Balance at January 1 $ 18,172 $ 16,023 $ — Increase (decrease) related to prior year tax positions 108 (1,292 ) 12,631 Increase related to current year tax positions 2,426 3,441 3,392 Balance at December 31 $ 20,706 $ 18,172 $ 16,023 We do not anticipate any significant changes to our unrecognized tax positions or benefits during the next twelve months. Interest and penalties related to the settlement of uncertain tax positions, if any, will be reflected in income tax expense. Tax years 2001 to 2018 remain subject to future examination for federal income taxes. |
Collaboration and license agree
Collaboration and license agreements | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Collaboration and license agreements | Collaboration and license agreements We have entered into various collaboration and license agreements with pharmaceutical and biotechnology companies. Revenues recognized under these agreements are disclosed in Note 3 under the “Disaggregation of total revenues” heading. These agreements generally may be terminated due to material and uncured breaches, insolvency of either party, mutual written consent, unilateral decision of one or either party upon prior written notice, expiration of payment obligations, and/or challenges to patents which are subject to the related agreement. Each agreement is discussed in more detail in the following sections. Takeda The Takeda ADCETRIS collaboration provides for the global co-development of ADCETRIS and the commercialization of ADCETRIS by Takeda in its territory. We retained commercial rights for ADCETRIS in the U.S. and its territories and in Canada, and Takeda has commercial rights in the rest of the world. Additionally, the companies equally co-fund the cost of selected development activities conducted under the collaboration, with the exception of Japan where Takeda is solely responsible for development costs. Costs associated with co-development activities are included in research and development expense. As disclosed in Note 3 under the heading, “Impact to collaboration and license agreement revenues,” payments received from Takeda, including the upfront payment, progress-dependent development and regulatory milestone payments, reimbursement for drug supplied, and net development cost reimbursement payments, are recognized as collaboration and license agreement revenues upon transfer of control of the goods or services over the development period. When the performance of development activities under the collaboration results in us making a reimbursement payment to Takeda, that payment reduces collaboration and license agreement revenues. We also recognize royalty revenues, where royalties are based on a percentage of Takeda’s net sales of ADCETRIS in its licensed territories ranging from the mid-teens to the mid-twenties based on sales volume, as well as sales-based milestones. Takeda bears a portion of third-party royalty costs owed on its sales of ADCETRIS which is included in royalty revenues. Astellas We have an agreement with Agensys, which subsequently became an affiliate of Astellas, to research, develop and commercialize ADCs for the treatment of several types of cancer. The collaboration encompasses combinations of our ADC technology with antibodies developed by Astellas. We and Astellas are co-funding all development costs for enfortumab vedotin. Costs associated with co-development activities are included in research and development expense and amounted to $54.9 million , $36.3 million , and $15.0 million for the years ended December 31, 2018 , 2017 , and 2016 , respectively. In October 2018, we and Astellas entered into a joint commercialization agreement to govern the global commercialization of enfortumab vedotin, if approved for commercial sale: • In the U.S., we and Astellas will jointly promote enfortumab vedotin. We will record sales of enfortumab vedotin in the U.S. and be responsible for all U.S. distribution activities. The companies will share equal ly in costs incurred, and any profits realized, in the U.S. • Outside the U.S., we will commercialize and record product revenues of enfortumab vedotin in all countries in North and South America, and Astellas will commercialize in rest of the world, including Europe, Asia, Australia and Africa. The agreement is intended to provide that we and Astellas will effectively share equal ly in costs incurred and any profits realized in all of these markets. Cost and profit sharing in Canada, the United Kingdom, Germany, France, Spain and Italy will be based on product sales and costs of commercialization. In the remaining markets, the commercializing party will bear costs and will pay the other party a royalty rate applied to net sales of the product based on a rate intended to approximate an equal cost and profit share for both parties. Either party may opt out of co-development and profit-sharing in return for receiving milestones and royalties from the continuing party. Genmab We have an agreement with Genmab to develop and commercialize ADCs for the treatment of several types of cancer, under which we exercised a co-development option for tisotumab vedotin in August 2017. We and Genmab will share all costs and potential future profits for development and commercialization of tisotumab vedotin on an equal basis. Costs associated with co-development activities are included in research and development expense and amounted $33.8 million and $6.8 million for the years ended December 31, 2018 and 2017 , respectively. We will be responsible for tisotumab vedotin commercialization activities in the U.S., Canada, and Mexico, while Genmab will be responsible for commercialization activities in all other territories. We are currently in discussions with Genmab regarding the detailed terms on which we will work together to commercialize tisotumab vedotin under this agreement. . Either party may opt out of co-development and profit-sharing in return for receiving milestones and royalties from the continuing party. Unum We have an agreement with Unum to develop and commercialize novel antibody-coupled T-cell receptor, or ACTR, therapies for cancer. We and Unum are developing two ACTR product candidates combining Unum’s ACTR technology with our antibodies. Unum is conducting research and clinical development activities through phase 1 clinical trials, and we are providing funding for these activities. The agreement calls for us and Unum to co-develop and jointly fund programs after phase 1 clinical trials unless either company opts out. Costs associated with these co-development activities are included in research and development expense and amounted to $6.2 million , $8.5 million , and $5.3 million for the years ended December 31, 2018 , 2017 , and 2016 , respectively. We and Unum would co-commercialize any co-developed product candidates and share any profits equal ly in the U.S. We have exclusive commercial rights outside of the U.S., potentially owing Unum a royalty that is a high single digit to mid-teens percentage of ex-U.S. sales. The potential future licensing and progress-dependent milestone payments to Unum under the collaboration may total up to $400.0 million for the ACTR programs, payment of which is triggered by the achievement of development, regulatory and commercial milestones. In addition and as disclosed in Note 5, we made an equity investment in Unum under the terms of this agreement at the time of its execution. Other collaboration agreements We have other active ADC collaborations with a number of companies to allow them to use our proprietary ADC technology. Under these collaborations, which we have entered into in the ordinary course of business, we have granted research and commercial licenses to use our technology in conjunction with the collaborator’s technology. We also have agreed to conduct limited development activities and to provide other materials, supplies and services to our ADC collaborators during the performance obligation period of the collaboration. We receive upfront cash payments, progress- and sales-dependent milestones for the achievement by our collaborators of certain events, and annual maintenance fees and support fees for research and development services and materials provided under the agreements. We also are entitled to receive royalties on net sales of any resulting products incorporating our ADC technology. Our ADC collaborators are solely responsible for research, product development, manufacturing and commercialization of any product candidates under these collaborations, which includes the achievement of the potential milestones. In February 2018, we executed an agreement with Pieris to develop novel potential treatments of cancer based on bispecifics incorporating our proprietary antibodies and Pieris’ proprietary technology designed to stimulate an antibody-directed immune response against solid tumors and blood cancers. Pieris is conducting preclinical research, and we are providing funding for these activities. Following this research phase, we will have the option to select up to three product candidates for further development. We would develop the product candidates independently, subject to a limited opt in right by Pieris. Under that opt in right, we and Pieris would co-develop and co-commercialize one of the product candidates and share equally in costs and profits associated with that co-developed product candidate. Pieris would be responsible for commercialization in the U.S., and we would be responsible for commercialization in all other territories. For any commercialized product candidates that we developed independently, we would owe Pieris royalties in the mid-single to low-double digits. Under the terms of the agreement, we paid Pieris a $30.0 million upfront fee in 2018, which was recorded in research and development expenses. The potential future licensing and progress-dependent milestone payments to Pieris under the collaboration for the three product candidates total up to $1.2 billion based on the achievement of development, regulatory and commercial milestones. |
In-license agreements
In-license agreements | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
In-license agreements | In-license agreements We have in-licensed antibodies, targets and enabling technologies from pharmaceutical and biotechnology companies and academic institutions for use in ADCETRIS, its pipeline programs and ADC technology. Under the terms of two exclusive license agreements, we are required to pay royalties in the low single digits on net sales of ADCETRIS. In addition, we owed royalties in the low single digits on net sales of ADCETRIS under the terms of other non-exclusive licenses, which expired in 2018. Under the terms of in-license agreements related to our pipeline programs, we would potentially owe development, regulatory, and sales-based milestones, and royalties on net sales, as defined, of certain approved products. |
Commitments and contingencies
Commitments and contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | Commitments and contingencies Commitments. We are obligated to make future minimum payments under operating leases for building space used for general office and research and development purposes. The leases expire between 2019 through 2029 and include options to renew at the then fair market rental for the facilities. The lease agreements typically contain scheduled rent increases and provide for tenant improvement allowances. Assuming we do not exercise any extensions, future minimum lease payments under all non-cancelable operating leases are set forth below. In addition, we have certain non-cancelable obligations under other agreements, including supply agreements relating to the manufacture of ADCETRIS and our product candidates which contain annual minimum purchase commitments and other firm commitments when a binding forecast is provided. As of December 31, 2018 , our future obligations related to building leases and supply and other agreements are as follows (in thousands): Building Leases Supply and Other Agreements Years ending December 31, 2019 $10,332 $92,105 2020 11,863 30,689 2021 12,770 31,091 2022 12,288 24,033 2023 12,142 21,720 Thereafter 30,517 43,440 Total $89,912 $243,078 Rent expense attributable to non-cancelable operating leases totaled approximately $8.7 million , $6.6 million , and $5.6 million for the years ended December 31, 2018 , 2017 , and 2016 , respectively. We entered into various operating leases for building space in 2018, with lease commencement dates in 2019. Future obligations related to those leases are included in the table above but no rent expense has been recognized in 2018. Non-cancelable obligations under other agreements do not include payments that are contingent upon achievement of certain progress-dependent milestones, as well as the payment of royalties based on net sales of commercial products. These amounts have been excluded from the table because the events triggering the obligations have not yet occurred. Contingencies. On March 29, 2017, a stockholder derivative lawsuit, or the Stockholder Derivative Action, was filed in Washington Superior Court for the County of Snohomish, or the Snohomish County Superior Court. The complaint named as defendants certain of our current and former executives and members of our board of directors. We were named as a nominal defendant. The Stockholder Derivative Action was largely based on a January 2017 securities class action suit, or the CD33A Class Action, that was filed in the United States District Court for the Western District of Washington and which alleged material misrepresentations and omissions in public statements regarding our business, operational and compliance policies, as well as violations of Sections 10(b) and 20(b) of the Securities Exchange Act. Following the dismissal with prejudice of the CD33A Class Action, on August 30, 2018, the plaintiffs in the Stockholder Derivative Action filed an amended complaint. This complaint alleged that the defendants breached their fiduciary duties by making or failing to correct certain allegedly improper public statements regarding our former SGN-CD33A program and by wasting our assets by allowing certain SGN-CD33A trials to continue. On October 4, 2018, we filed a motion to dismiss the amended complaint for failure to plead demand futility. On November 15, 2018, the plaintiffs voluntarily dismissed their complaint with prejudice as to plaintiffs. On March 8, 2018, three purported stockholders of Cascadian filed a Verified Complaint to Compel Inspection of Books and Records under 8 Del. C. §220 in the Delaware Court of Chancery against Cascadian, seeking to inspect books and records in order to determine whether wrongdoing or mismanagement has taken place such that it would be appropriate to file claims for breach of fiduciary duty, and to investigate the independence and disinterestedness of the former Cascadian directors with respect to the Cascadian Acquisition. We filed our answer to this complaint on March 28, 2018. As a result of this lawsuit, we may incur litigation and indemnification expenses. In addition, from time to time in the ordinary course of business we become involved in various lawsuits, claims and proceedings relating to the conduct of our business, including those pertaining to the defense and enforcement of our patent or other intellectual property rights. These proceedings are costly and time consuming. Additionally, successful challenges to our patent or other intellectual property rights through these proceedings could result in a loss of rights in the relevant jurisdiction and may allow third parties to use our proprietary technologies without a license from us or our collaborators. |
Stockholders' equity
Stockholders' equity | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Stockholders' equity | Stockholders’ equity In February 2018, we completed an underwritten public offering of 13,269,230 shares of our common stock at a public offering price of $52.00 per share. The offering resulted in net proceeds to us of $658.2 million , after deducting underwriting discounts, commissions, and other offering expenses. The primary use of the net proceeds was to fund the acquisition of Cascadian. At December 31, 2018 , shares of common stock reserved for future issuance are as follows (in thousands): Stock options and RSUs outstanding 13,795 Shares available for future grant under the 2007 Equity Incentive Plan 6,776 Employee stock purchase plan shares available for future issuance 383 Total 20,954 |
Share-based compensation
Share-based compensation | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-based compensation | Share-based compensation 2007 Equity Incentive Plan Our 2007 Equity Incentive Plan, or the 2007 Plan, provides for the issuance of our common stock to employees, including our officers, directors and consultants and affiliates. The 2007 Plan was amended and restated in May 2018 to reserve an additional 6,000,000 shares thereunder, such that an aggregate of 33,000,000 shares of our common stock were authorized for issuance as of December 31, 2018 , and to extend the term of the 2007 Plan through May 2028 unless it is terminated earlier pursuant to its terms. Under the 2007 Plan, we may issue stock options (including incentive stock options and nonstatutory stock options), restricted stock, RSUs, stock appreciation rights and other similar types of awards. We have only issued options to purchase shares of common stock and RSUs under the 2007 Plan, including options and RSUs granted with time-based vesting requirements or, in connection with our LTIPs, vesting upon achievement of pre-determined regulatory milestones. Incentive stock options under the 2007 Plan may be granted only to our employees. The exercise price of an incentive stock option or a nonstatutory stock option may not be less than 100% of the fair market value of the common stock on the date the option is granted and the options generally have a maximum term of ten years from the date of grant. Generally, options granted to employees under the 2007 Plan vest 25% one year after the beginning of the vesting period and thereafter ratably each month over the following thirty-six months . Generally, RSUs granted to employees prior to August 2018 vest 100% on the third anniversary of the beginning of the vesting period, and subsequent grants vest 25% each year beginning one year after the grant date. Option and RSU grants to non-employee members of our board of directors vest over one year. The vesting of options and RSUs granted in connection with our LTIPs varies by plan but generally includes a portion that vests upon achievement of pre-determined regulatory milestones and a portion that vests based upon the passage of time. The 2007 Plan provides for (i) the full acceleration of vesting of equity awards upon a change in control if the successor company does not assume, substitute or otherwise replace the equity awards upon the change in control; and (ii) the full acceleration of vesting of any equity awards if at the time of, immediately prior to or within twelve months after a change in control of the Company, the holder of such equity awards is involuntarily terminated without cause or is constructively terminated by the successor company that assumed, substituted or otherwise replaced such stock awards in connection with the change in control. Share-based compensation expense We recorded total share-based compensation expense of $78.9 million , $63.8 million , and $52.5 million for the years ended December 31, 2018 , 2017 , and 2016 , respectively, including share-based compensation expense associated with our LTIPs. No tax benefit was recognized related to share-based compensation expense since we have not reported taxable income to date and have established a full valuation allowance to offset all of the potential tax benefits associated with its deferred tax assets. During 2018 , 2017 , and 2016 , $1.0 million , $1.3 million , and $1.0 million of share-based compensation expense was included in production overhead used in the determination of inventory cost, respectively. Valuation assumptions We calculate the fair value of each option award on the date of grant using the Black-Scholes option pricing model. The following weighted-average assumptions were used for the periods indicated: 2007 Plan Employee Stock Purchase Plan Years ended December 31, Years ended December 31, 2018 2017 2016 2018 2017 2016 Risk-free interest rate 2.8 % 1.8 % 1.3 % 1.67 % 0.76 % 0.35 % Expected lives in years 5.6 5.7 6.5 0.5 0.5 0.5 Expected dividends 0 % 0 % 0 % 0 % 0 % 0 % Expected volatility 42 % 42 % 44 % 36 % 46 % 46 % The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for the expected life of the award. Our computation of expected life was determined based on our historical experience with similar awards, giving consideration to the contractual terms of the share-based awards, vesting schedules and expectations of future employee behavior. A forfeiture rate is estimated at the time of grant to reflect the amount of awards that are granted but are expected to be forfeited by the award holder prior to vesting. The estimated forfeiture rate applied to these amounts is derived from historical stock award forfeiture behavior. We have never paid cash dividends and do not currently intend to pay cash dividends. Our computation of expected volatility is based on the historical volatility of our stock price. The fair value of RSUs is determined based on the closing price of our common stock on the date of grant. Stock option activity A summary of stock option activity is as follows : Shares Weighted- average exercise price per share Weighted-average remaining contractual term (in years) Aggregate intrinsic value (in thousands) Balance at December 31, 2017 11,510,161 $ 34.32 Granted 1,645,938 $ 71.83 Exercised (1,799,791 ) $ 25.54 Forfeited/expired (481,196 ) $ 43.77 Balance at December 31, 2018 10,875,112 $ 41.03 6.11 $ 196,916 Expected to vest 10,490,591 $ 40.44 6.01 $ 194,027 Options exercisable 6,729,510 $ 32.55 4.59 $ 163,278 The weighted average grant-date fair values of options granted with exercise prices equal to market were $30.77 , $20.34 , and $18.20 for the years ended December 31, 2018 , 2017 , and 2016 , respectively. The aggregate intrinsic value in the table above is calculated as the difference between the exercise price of the underlying options and the quoted price of our common stock for all options that were in-the-money at December 31, 2018 . The aggregate intrinsic value of options exercised was $73.3 million during 2018 , $52.9 million during 2017 , and $61.4 million during 2016 , determined as of the date of option exercise. As of December 31, 2018 , there was approximately $49.5 million of total unrecognized compensation cost related to unvested options, as adjusted for expected forfeitures. That cost is expected to be recognized over a weighted-average period of 1.42 years. We utilize newly issued shares to satisfy option exercises. RSU activity A summary of RSU activity, excluding performance-based RSUs, is as follows: Share equivalent Weighted- average grant date fair value Non-vested at December 31, 2017 2,191,350 $ 45.46 Granted 1,339,322 $ 70.78 Vested (591,872 ) $ 40.52 Forfeited (258,559 ) $ 46.45 Non-vested at December 31, 2018 2,680,241 $ 59.11 The weighted average grant-date fair values of RSUs granted were $70.78 , $50.12 , and $44.72 for the years ended December 31, 2018 , 2017 , and 2016 , respectively. The total fair value of RSUs that vested during 2018 , 2017 , and 2016 (measured on the date of vesting) was $42.4 million , $27.5 million , and $23.3 million , respectively. As of December 31, 2018 , there was approximately $86.3 million of total unrecognized compensation cost related to non-vested RSU awards that will be recognized as expense over a weighted-average period of 1.61 years. We utilize newly issued shares for RSUs that vest. LTIP equity activity We have various LTIPs related to certain development goals of our product candidates, which contain performance-based equity compensation. During 2018, an LTIP milestone was achieved related to the U.S. FDA approval of an ADCETRIS indication, which triggered a cash payment to eligible participants and commenced vesting of stock options related to that LTIP. The vesting for that LTIP is now time-based and is included in the “Stock option activity” table above. Pursuant to one of the other LTIPs, RSUs were granted to eligible participants in November 2018. If the pre-determined regulatory milestone is achieved, the underlying shares will vest, and a second tranche of RSUs will be granted subject to a time-based vesting requirement. A summary of RSU activity related to the LTIPs is as follows: Share equivalent Weighted- average grant date fair value Non-vested at December 31, 2017 — $ — Granted 242,328 $ 58.14 Vested — $ — Forfeited (2,511 ) $ 58.14 Non-vested at December 31, 2018 239,817 $ 58.14 As of December 31, 2018 , the estimated unrecognized compensation cost related to all LTIPs was $63.5 million . Employee Stock Purchase Plan Under the current terms of the Amended and Restated 2000 Employee Stock Purchase Plan, or the Employee Stock Purchase Plan, employees can purchase shares of our common stock based on a percentage of their compensation subject to certain limits. Shares are purchased at the lower of 85 percent of the fair market value of our common stock on either the first day or the last day of each six-month offering period. Share issuance activity under the Employee Stock Purchase Plan is disclosed in our consolidated statements of stockholders’ equity. |
Employee benefit plan
Employee benefit plan | 12 Months Ended |
Dec. 31, 2018 | |
Retirement Benefits [Abstract] | |
Employee benefit plan | Employee benefit plan We have a 401(k) Plan for all of our U.S. employees. Eligible employees may contribute through payroll deductions, and we may match the employees’ 401(k) contributions, at our discretion and not to exceed a prescribed annual limit. Under this matching program, we contributed $7.7 million in 2018 , $5.7 million in 2017 , and $4.7 million in 2016 . |
Quarterly financial data (unaud
Quarterly financial data (unaudited) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly financial data (unaudited) | Quarterly financial data (unaudited) The unaudited quarterly financial information should be read in conjunction with the our financial statements and related notes included elsewhere in this report. We believe that the following unaudited information reflects all normal recurring adjustments necessary for a fair presentation of the information for the periods presented. The operating results for any quarter are not necessarily indicative of results for any future period. The following table contains selected unaudited financial data for each of the indicated periods (in thousands, except per share data): Three months ended March 31, June 30, September 30, December 31, 2018 Total revenues $ 140,590 $ 170,173 $ 169,424 $ 174,513 Net income (loss) $ (111,715 ) $ 76,273 $ (67,446 ) $ (119,805 ) Net income (loss) per share - basic $ (0.73 ) $ 0.48 $ (0.42 ) $ (0.75 ) Net income (loss) per share - diluted $ (0.73 ) $ 0.47 $ (0.42 ) $ (0.75 ) 2017 Total revenues $ 109,131 $ 108,223 $ 135,291 $ 129,605 Net income (loss) $ (59,990 ) $ (56,360 ) $ 50,021 $ (59,201 ) Net income (loss) per share - basic $ (0.42 ) $ (0.39 ) $ 0.35 $ (0.41 ) Net income (loss) per share - diluted $ (0.42 ) $ (0.39 ) $ 0.34 $ (0.41 ) |
Organization and Business (Poli
Organization and Business (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Capital requirements | Capital requirements To execute our growth plans, we may need to seek additional funding through public or private financings, including debt or equity financings, and through other means, including collaborations and license agreements. If we cannot maintain adequate funds, we may be required to borrow funds, delay, reduce the scope of or eliminate one or more of our development programs. Additional financing may not be available when needed, or if available, we may not be able to obtain financing on favorable terms. |
Basis of presentation | Basis of presentation The accompanying consolidated financial statements reflect the accounts of Seattle Genetics, Inc. and its wholly-owned subsidiaries (collectively “Seattle Genetics,” “we,” “our,” “us,” or the “Company”). The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles, or GAAP. All significant intercompany transactions and balances have been eliminated. Management has determined that we operate in one segment: the development and sale of pharmaceutical products on our own behalf or in collaboration with others. Substantially all of our assets and revenues are related to operations in the U.S.; however, we also have subsidiaries in Australia, Canada, Ireland, Luxembourg, Switzerland, and the United Kingdom. |
Use of estimates | Use of estimates The preparation of financial statements requires us to make estimates, assumptions, and judgments that affect the reported amounts in the financial statements and accompanying notes. Actual results could differ from those estimates. Estimates include those used for revenue recognition, valuation of investments, inventory valuation, business combinations, accrued liabilities (including those related to the long-term incentive plans, clinical trials and contingencies), stock option valuation, and valuation allowance for deferred tax assets. |
Reclassifications | Reclassifications We reclassified certain prior year balances between accounts payable and accrued liabilities on our consolidated balance sheet to conform to current year presentation. These reclassifications had no effect on our total current liabilities or our consolidated statements of comprehensive loss . |
Cash and cash equivalents | Cash and cash equivalents We consider all highly liquid investments with maturities of three months or less at the date of acquisition to be cash equivalents. |
Non-cash investing activities | Non-cash investing activities We had $4.6 million and $1.0 million of accrued capital expenditures as of December 31, 2018 and 2017 , respectively. Accrued capital expenditures have been treated as a non-cash investing activity and, accordingly, have not been included in the consolidated statement of cash flows until such amounts have been paid in cash. As further described in Note 5, we exercised a warrant to purchase additional shares of common stock in Immunomedics, Inc., or Immunomedics, in 2017. The fair value of the warrant derivative on the exercise date represented a non-cash investing activity and, accordingly, has not been included in the consolidated statement of cash flows. |
Investments | Investments We hold certain equity securities that we acquired in connection with strategic agreements, which are reported at estimated fair value. We adopted Accounting Standards Update, or ASU, “ASU 2016-01, Financial Instruments: Overall” as of January 1, 2018, which addressed certain aspects of recognition, measurement, presentation and disclosure of financial instruments, including that changes in the fair value of equity securities be recorded in income or loss rather than accumulated other comprehensive income or loss in stockholders’ equity. The cost of equity securities for purposes of computing gains and losses is based on the specific identification method. We used the modified retrospective method and recognized a $64.1 million cumulative effect of initially applying this ASU as an adjustment to decrease the opening accumulated deficit at January 1, 2018. Accordingly, comparative information has not been adjusted and continues to be reported under previous accounting standards. The implementation of this standard increases the volatility of net income or loss to the extent that we continue to hold equity securities. We invest our available cash primarily in debt securities. These debt securities are classified as available-for-sale, which are reported at estimated fair value with unrealized gains and losses included in accumulated other comprehensive income and loss in stockholders’ equity. Realized gains, realized losses and declines in the value of debt securities judged to be other-than-temporary are included in investment and other income, net . The cost of debt securities for purposes of computing realized and unrealized gains and losses is based on the specific identification method. Amortization of premiums and accretion of discounts on debt securities are included in investment and other income, net . Interest and dividends earned are included in investment and other income, net . We classify investments in debt securities maturing within one year of the reporting date, or where management’s intent is to use the investments to fund current operations or to make them available for current operations, as short-term investments. If the estimated fair value of a debt security is below its carrying value, we evaluate whether it is more likely than not that we will sell the security before its anticipated recovery in market value and whether evidence indicating that the cost of the investment is recoverable within a reasonable period of time outweighs evidence to the contrary. We also evaluate whether or not we intend to sell the investment. If the impairment is considered to be other-than-temporary, the security is written down to its estimated fair value. In addition, we consider whether credit losses exist for any securities. A credit loss exists if the present value of cash flows expected to be collected is less than the amortized cost basis of the security. Other-than-temporary declines in estimated fair value and credit losses are included in investment and other income, net . |
Derivative financial instruments | Derivative financial instruments We account for financial instruments as derivatives when the instrument includes an underlying and notional amount or payment provision, an initial net investment, and a net settlement. Derivative financial instruments are measured at fair value on the issuance date and are revalued on each subsequent balance sheet date. We use the Black-Scholes model using observable market inputs to estimate the fair value of derivatives. The changes in estimated fair value are recognized as current period income or loss. We do not hold derivative instruments for trading or speculative purposes and had no derivative instruments outstanding as of December 31, 2018 or 2017 . |
Fair value of financial instruments | Fair value of financial instruments The recorded amounts of certain financial instruments, including cash and cash equivalents, interest receivable, accounts receivable, accounts payable and accrued liabilities approximate fair value due to their relatively short maturities. Investments that are classified as available-for-sale are recorded at estimated fair value. The estimated fair value for securities held is determined using quoted market prices, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency. |
Inventories | Inventories We consider regulatory approval of product candidates to be uncertain. Accordingly, we charge manufacturing costs to research and development expense until such time as a product has received regulatory approval for commercial sale. Production costs for our marketed product, ADCETRIS, are capitalized into inventory. ADCETRIS inventory that is deployed for clinical, research or development use is charged to research and development expense when it is no longer available for commercial sales. Production costs for our other product candidates continue to be charged to research and development expense. We value our inventories at the lower of cost or market value. Cost is determined on a specific identification basis. Inventory includes the cost of materials, third-party contract manufacturing and overhead associated with the production of ADCETRIS. In the event that we identify excess, obsolete or unsalable inventory, its value is written down to net realizable value. |
Property and equipment | Property and equipment Property and equipment are stated at cost. Land is not depreciated, while all other property and equipment are depreciated using the straight-line method over the estimated useful lives of the assets, which are generally as follows: Years Building 30 Laboratory and manufacturing equipment 5-15 Furniture and fixtures 5 Computers, software and office equipment 3 Leasehold improvements are amortized over the shorter of the remaining term of the applicable lease or the useful life of the asset. Gains and losses from the disposal of property and equipment are reflected in income or loss at the time of disposition and have not been significant. Expenditures for additions and improvements to our facilities are capitalized and expenditures for maintenance and repairs are charged to expense as incurred. Concessions received by us in connection with leases, including tenant improvement allowances and prorated rent, are included in deferred rent and other long-term liabilities and recognized as a reduction in rent expense over the term of the applicable lease. |
Business combinations, including acquired in-process research and development, and goodwill | Business combinations, including acquired in-process research and development, and goodwill We account for business combinations using the acquisition method, recording the acquisition-date fair value of total consideration over the acquisition-date fair value of net assets acquired as goodwill. Fair value is typically estimated using an income approach based on the present value of future discounted cash flows. The significant estimates in the discounted cash flow model primarily include the discount rate, and rates of future revenue and expense growth and/or profitability of the acquired business. The discount rate considers the relevant risk associated with business-specific characteristics and the uncertainty related to the ability to achieve the projected cash flows. We may record adjustments to the fair values of assets acquired and liabilities assumed within the measurement period (up to one year from the acquisition date). In-process research and development assets are accounted for as indefinite-lived intangible assets and maintained on the balance sheet until either the underlying project is completed or the asset becomes impaired. If the project is completed, the carrying value of the related intangible asset is amortized to cost of sales over the remaining estimated life of the asset beginning in the period in which the project is completed. If the asset becomes impaired or is abandoned, the carrying value of the related intangible asset is written down to its fair value and an impairment charge is recorded in the period in which the impairment occurs. We evaluate indefinite-lived intangible assets and goodwill for impairment annually, as of October 1, or more frequently when events or circumstances indicate that impairment may have occurred. As part of the impairment evaluation, we may elect to perform an assessment of qualitative factors. If this qualitative assessment indicates that it is more likely than not that the fair value of the indefinite-lived intangible asset or the reporting unit (for goodwill) is less than its carrying value, we then would proceed with the quantitative impairment test to compare the fair value to the carrying value and record an impairment charge if the carrying value exceeds the fair value. Acquisition-related costs, including banking, legal, accounting, valuation, and other similar costs, are expensed in the periods in which the costs are incurred and included in loss from operations in the consolidated financial statements. The results of operations of the acquired business are included in the consolidated financial statements from the acquisition date. |
Other non-current assets | Other non-current assets Other non-current assets included: • Equity securities of $113.8 million and $188.4 million as of December 31, 2018 and 2017 , respectively. See Note 5 for additional information. As of December 31, 2017 , we also held a cost method investment for our $5.0 million non-controlling investment in Unum Therapeutics, Inc., or Unum, which was a privately-held company. We purchased this investment in connection with a strategic collaboration as disclosed in Note 12. In 2018, Unum concluded an initial public offering, at which point our investment became a marketable equity security recorded at fair value, and is disclosed as such in Note 5 as of December 31, 2018 . • Intangible assets resulting from milestone payments that became due upon the approval of ADCETRIS related to certain in-licensed technology. Intangible assets are amortized to cost of sales over the estimated life of the related licenses, which range from six to ten years. |
Impairment of long-lived assets | Impairment of long-lived assets (other than acquired in-process research and development and goodwill) We assess the impairment of long-lived assets, primarily property and equipment, whenever events or changes in business circumstances indicate that the carrying amounts of the assets may not be fully recoverable. When such events occur, we determine whether there has been an impairment in value by comparing the asset’s carrying value with its fair value, as measured by the anticipated undiscounted net cash flows of the asset. If an impairment in value exists, the asset is written down to its estimated fair value. |
Revenue recognition | Revenue recognition We adopted Accounting Standards Codification Topic 606—Revenue from Contracts with Customers, or Topic 606, on January 1, 2018, resulting in a change to our accounting policy for revenue recognition. We used the modified retrospective method and recognized the cumulative effect of initially applying Topic 606 as an adjustment to decrease the opening accumulated deficit at January 1, 2018. Accordingly, comparative information has not been adjusted and continues to be reported under previous accounting standards. See Note 3 for additional information. Our revenues are comprised of ADCETRIS net product sales, amounts earned under our collaboration and licensing agreements, and royalties. Revenue recognition occurs when a customer obtains control of promised goods or services in an amount that reflects the consideration we expect to receive in exchange for those goods or services. The period between when we transfer control of promised goods or services and when we receive payment is expected to be one year or less, and that expectation is consistent with our historical experience. As such, we do not adjust our revenues for the effects of a significant financing component. Net product sales We sell ADCETRIS through a limited number of pharmaceutical distributors in the U.S. and Canada. Customers order ADCETRIS through these distributors, and we typically ship product directly to the customer. The delivery of ADCETRIS to the end-user site represents a single performance obligation for these transactions. We record product sales at the point in time when title and risk of loss pass, which generally occurs upon delivery of the product to the customer. The transaction price for product sales represents the amount we expect to receive, which is net of estimated government-mandated rebates and chargebacks, distribution fees, estimated product returns and other deductions. Accruals are established for these deductions, and actual amounts incurred are offset against applicable accruals. We reflect these accruals as either a reduction in the related account receivable from the distributor or as an accrued liability, depending on the nature of the sales deduction. Sales deductions are based on management’s estimates that consider payor mix in target markets and experience to-date. These estimates involve a substantial degree of judgment. We have applied a portfolio approach as a practical expedient for estimating net product sales from ADCETRIS. Government-mandated rebates and chargebacks : We have entered into a Medicaid Drug Rebate Agreement, or MDRA, with the Centers for Medicare & Medicaid Services. This agreement provides for a rebate based on covered purchases of ADCETRIS. Medicaid rebates are invoiced to us by the various state Medicaid programs. We estimate Medicaid rebates using the expected value approach, based on a variety of factors, including our experience to-date. We have also completed a Federal Supply Schedule, or FSS, agreement under which certain U.S. government purchasers receive a discount on eligible purchases of ADCETRIS. In addition, we have entered into a Pharmaceutical Pricing Agreement with the Secretary of Health and Human Services, which enables certain entities that qualify for government pricing under the Public Health Services Act, or PHS, to receive discounts on their qualified purchases of ADCETRIS. Under these agreements, distributors process a chargeback to us for the difference between wholesale acquisition cost and the applicable discounted price. As a result of our direct-ship distribution model, we can identify the entities purchasing ADCETRIS and this information enables us to estimate expected chargebacks for FSS and PHS purchases based on the expected value of each entity’s eligibility for the FSS and PHS programs. We also review historical rebate and chargeback information to further refine these estimates. Distribution fees, product returns and other deductions : Our distributors charge a volume-based fee for distribution services that they perform for us. We allow for the return of product that is within 30 days of its expiration date or that is damaged, or within 90 days past expiration date. We estimate product returns based on our experience to-date using the expected value approach. In addition, we consider our direct-ship distribution model, our belief that product is not typically held in the distribution channel, and the expected rapid use of the product by healthcare providers. We provide financial assistance to qualifying patients that are underinsured or cannot cover the cost of commercial coinsurance amounts through SeaGen Secure. SeaGen Secure is available to patients in the U.S. and its territories who meet various financial and treatment need criteria. Estimated contributions for commercial coinsurance under SeaGen Secure are deducted from gross sales and are based on an analysis of expected plan utilization. These estimates are adjusted as necessary to reflect our actual experience. Collaboration and license agreement revenues We have collaboration and license agreements with pharmaceutical and biotechnology and companies. Our proprietary ADC technology for linking cytotoxic agents to monoclonal antibodies is the basis for many of these collaboration and license agreements, including the ADC collaborations that we have entered into in the ordinary course of business, under which we granted our collaborators research and commercial licenses to our technology and typically provide technology transfer services, technical advice, supplies and services for a period of time. Our collaboration and license agreements include contractual milestones. Generally, the milestone events coincide with the progression of the collaborators’ product candidates. These consist of development milestones (such as designation of a product candidate or initiation of preclinical studies and the initiation of phase 1, phase 2, or phase 3 clinical trials), regulatory milestones (such as the filing of regulatory applications for marketing approval), and commercialization milestones (such as first commercial sale in a particular market and product sales in excess of a pre-specified threshold). Our ADC collaborators are solely responsible for the development of their product candidates, and the achievement of milestones in any of the categories identified above is based solely on the collaborators’ efforts. Since we do not take a substantive role or control the research, development or commercialization of any products generated by our ADC collaborators, we are not able to reasonably estimate when, if at all, any milestone payments or royalties may be payable to us by our ADC collaborators. As such, the milestone payments associated with our ADC collaborations involve a substantial degree of uncertainty and risk that they may never be received. In the case of our ADCETRIS collaboration with Takeda Pharmaceutical Company Limited, or Takeda, we may be involved in certain development activities; however, the achievement of milestone events under the agreement is primarily based on activities undertaken by Takeda. ADC collaborations are initially evaluated as to whether the intellectual property licenses granted by us represent distinct performance obligations. If they are determined to be distinct, the value of the intellectual property licenses would be recognized up-front while the research and development service fees would be recognized as the performance obligations are satisfied. Variable consideration is assessed at each reporting period as to whether it is not subject to significant future reversal and, therefore, should be included in the transaction price at the inception of the contract. Assessing the recognition of variable consideration requires significant judgment. If a contract includes a fixed or minimum amount of research and development support, this also would be included in the transaction price. Changes to ADC collaborations, such as the extensions of the research term or increasing the number of targets or technology covered under an existing agreement, are assessed for whether they represent a modification or should be accounted for as a new contract. We have concluded that the license of intellectual property in our current ADC collaborations is not distinct from the perspective of our collaborators at the time of initial transfer, since we do not license intellectual property without related technology transfer and research and development support services. Such evaluation requires significant judgment since it is made from the customer's perspective. Our performance obligations under our collaborations include such things as providing intellectual property licenses, performing technology transfer, performing research and development consulting services, providing reagents, ADCs, and other materials, and notifying the customer of any enhancements to licensed technology or new technology that we discover, among others. We determined our performance obligations under our current ADC collaborations as evaluated at contract inception were not distinct and represented a single performance obligation. Revenue is recognized using a proportional performance model, representing the transfer of goods or services as activities are performed over the term of the agreement. Upfront payments are also amortized to revenue over the performance period. Upfront payment contract liabilities resulting from our collaborations do not represent a financing component as the payment is not financing the transfer of goods or services, and the technology underlying the licenses granted reflects research and development expenses already incurred by us. When no performance obligations are required of us, or following the completion of the performance obligation period, such amounts are recognized as revenue upon transfer of control of the goods or services to the customer. Generally, all amounts received or due other than sales-based milestones and royalties are classified as collaboration and license agreement revenues. Sales-based milestones and royalties are recognized as royalty revenue in the period the related sale occurred. We generally invoice our collaborators and licensees on a monthly or quarterly basis, or upon the completion of the effort or achievement of a milestone, based on the terms of each agreement. Deferred revenue arises from amounts received in advance of the culmination of the earnings process and is recognized as revenue in future periods as performance obligations are satisfied. Deferred revenue expected to be recognized within the next twelve months is classified as a current liability. Royalty revenues and cost of royalty revenues Royalty revenues primarily reflect amounts earned under the ADCETRIS collaboration with Takeda. These royalties include commercial sales-based milestones and sales royalties that relate predominantly to the license of intellectual property. Sales royalties are based on a percentage of Takeda’s net sales of ADCETRIS, with rates that range from the mid-teens to the mid-twenties based on sales volume. Takeda bears a portion of third-party royalty costs owed on its sales of ADCETRIS. This amount is included in royalty revenues. Cost of royalty revenues reflects amounts owed to our third-party licensors related to Takeda’s sales of ADCETRIS. Both of these amounts are recognized in the period in which the related sales by Takeda occur |
Research and development expenses | Research and development expenses Research and development, or R&D, expenses consist of salaries, benefits and other headcount-related costs of our R&D staff, preclinical activities, clinical trials and related manufacturing costs, lab supplies, contract and outside service fees and facilities and overhead expenses for research, development and preclinical studies focused on drug discovery, development and testing. R&D activities are expensed as incurred. Clinical trial expenses are a significant component of research and development expenses, and we outsource a significant portion of these costs to third parties. Third-party clinical trial expenses include investigator fees, site costs, clinical research organization costs, and costs for central laboratory testing and data management. Costs associated with activities performed under co-development collaborations are reflected in R&D expense. In-licensing fees, milestones, maintenance fees and other costs to acquire technologies utilized in R&D for product candidates that have not yet received regulatory approval and that are not expected to have alternative future use are expensed when incurred. Non-refundable advance payments for goods or services that will be used or rendered for future R&D activities are capitalized and recognized as expense as the related goods are delivered or the related services are performed. This results in the temporary deferral of recording expense for amounts incurred for research and development activities from the time payments are made until the time goods or services are provided. |
Advertising | Advertising Advertising costs are expensed as incurred. |
Concentration of credit risk | Concentration of credit risk Cash, cash equivalents and investments are invested in accordance with our investment policy. The policy includes guidelines for the investment of cash reserves and is reviewed periodically to minimize credit risk. Most of our investments are in U.S. Treasury securities, are not federally insured. We have accounts receivable from the sale of ADCETRIS from a small number of distributors, and from our collaborators. We do not require collateral on amounts due from our distributors or our collaborators and are therefore subject to credit risk. We have not experienced any significant credit losses to date as a result of credit risk concentration and do not consider an allowance for doubtful accounts to be necessary. |
Major customers | Major customers We sell ADCETRIS through a limited number of distributors. Certain of these distributors, together with entities under their common control, each individually accounted for greater than 10% of total revenues and greater than 10% of accounts receivable as noted below. In addition, one of our collaborators accounted for greater than 10% of total revenues as noted below. |
Major suppliers | Major suppliers The use of a relatively small number of contract manufacturers to supply drug necessary for our commercial operations and clinical trials creates a concentration of risk for us. While primarily one source of supply is utilized for certain components of ADCETRIS and each of our product candidates, other sources are available should we need to change suppliers. We also endeavor to maintain reasonable levels of drug supply for our use. A change in suppliers, however, could cause a delay in delivery of drug which could result in the interruption of commercial operations or clinical trials. Such an event would adversely affect our business. |
Income taxes | Income taxes We recognize deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Deferred tax assets and liabilities are determined based on the differences between the financial statement and tax bases of assets and liabilities using tax rates in effect for the year in which the differences are expected to reverse. We have provided a full valuation allowance against our deferred tax assets for all periods presented. A valuation allowance is recorded when it is more likely than not that the net deferred tax asset will not be realized. We follow the guidance related to accounting for uncertainty in income taxes, which requires the recognition of an uncertain tax position when it is more likely than not to be sustainable upon audit by the applicable taxing authority. |
Share-based compensation | Share-based compensation We use the graded-vesting attribution method for recognizing compensation expense for our stock options and restricted stock units (“RSUs”). Compensation expense is recognized over the requisite service periods on awards ultimately expected to vest and reduced for forfeitures that are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. For performance-based stock options and RSUs, we record compensation expense over the estimated service period once the achievement of the performance-based milestone is considered probable. At each reporting date, we assess whether achievement of a milestone is considered probable, and if so, record compensation expense based on the portion of the service period elapsed to date with respect to that milestone, with a cumulative catch-up, net of estimated forfeitures. We will recognize remaining compensation expense with respect to a milestone, if any, over the remaining estimated service period. |
Long-term incentive plans | Long-term incentive plans We have established Long-Term Incentive Plans, or LTIPs. The LTIPs provide eligible employees with the opportunity to receive performance-based incentive compensation, which may be comprised of cash, stock options, and/or RSUs. The payment of cash and the grant and/or vesting of equity are contingent upon the achievement of pre-determined regulatory milestones. We record compensation expense over the estimated service period for each milestone subject to the achievement of the milestone being considered probable in accordance with the provisions of Accounting Standards Codification Topic 450, Contingencies. At each reporting date, we assess whether achievement of a milestone is considered probable and, if so, record compensation expense based on the portion of the service period elapsed to date with respect to that milestone, with a cumulative catch-up, net of estimated forfeitures. We recognize compensation expense with respect to a milestone over the remaining estimated service period. The total estimate of unrecognized compensation expense could change in the future for several reasons, including the addition or termination of employees, the recognition of LTIP compensation expense, or the addition, termination, or modification of an LTIP. |
Comprehensive loss | Comprehensive loss Comprehensive loss is the change in stockholders’ equity from transactions and other events and circumstances other than those resulting from investments by stockholders and distributions to stockholders. Our comprehensive loss is comprised of net loss , unrealized gains and losses on available-for-sale investments prior to the adoption of ASU 2016-01 in 2018, and foreign currency translation adjustments, net of any applicable income taxes. |
Loss contingencies | Loss contingencies We are involved in various legal proceedings in the normal course of business. A loss contingency is recorded if it is probable that an asset has been impaired or a liability has been incurred and the amount of the loss can be reasonably estimated. We evaluate, among other factors, the probability of an unfavorable outcome and our ability to make a reasonable estimate and the amount of the ultimate loss. Loss contingencies that are determined to be reasonably possible, but not probable, are disclosed but not recorded. Legal fees incurred as a result of our involvement in legal procedures are expensed as incurred. |
Certain risks and uncertainties | Certain risks and uncertainties Our revenues are derived from ADCETRIS sales and royalties and from collaboration and license agreements. ADCETRIS is our only product available for sale and is subject to regulation by the FDA in the U.S. and other regulatory agencies outside the U.S. as well as competition by other pharmaceutical companies. Our collaboration and license agreement revenues are derived from a relatively small number of agreements. Each of these agreements can be terminated by our collaborators at their discretion. We are also subject to risks common to companies in the pharmaceutical industry, including risks and uncertainties related to commercial success and acceptance of ADCETRIS and our potential future products by patients, physicians and payers, competition from other products, regulatory approvals, regulatory requirements, business combinations and product or product candidate acquisition and in-licensing transactions, and protection of intellectual property. Also, drug development is a lengthy process characterized by a relatively low rate of success. We may commit substantial resources toward developing product candidates that never result in further development, achieve regulatory approvals or achieve commercial success. Likewise, we have committed and expect to continue to commit substantial resources towards additional clinical development of ADCETRIS in an effort to continue to expand ADCETRIS’ labeled indications of use, and there can be no assurance that we and/or Takeda will obtain and maintain the necessary regulatory approvals to market ADCETRIS for any additional indications. |
Guarantees | Guarantees In the normal course of business, we indemnify our directors, certain employees and other parties, including distributors, collaboration partners, lessors and other parties that perform certain work on behalf of, or for us to take licenses to our technologies. We have agreed to hold these parties harmless against losses arising from our breach of representations or covenants, intellectual property infringement or other claims made against these parties in performance of their work with us. These agreements typically limit the time within which the party may seek indemnification by us and the amount of the claim. It is not possible to prospectively determine the maximum potential amount of liability under these indemnification agreements. Further, each potential claim would be based on the unique facts and circumstances of the claim and the particular provisions of each agreement. |
Net loss per share | Net loss per share Basic and diluted net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding during the period. We excluded all RSUs and options from the per share calculations as such securities were anti-dilutive for all periods presented. |
Recent accounting pronouncements not yet adopted | Recent accounting pronouncements not yet adopted In February 2016, the Financial Accounting Standards Board, or FASB, issued “ASU 2016-02, Leases.” The standard requires entities to recognize in the consolidated balance sheet a liability to make lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term. We will adopt the standard on January 1, 2019 using the modified retrospective method in the year of adoption, and electing certain transition practical expedients. We are in the process of evaluating the impact of this standard and expect it to primarily relate to our operating leases for office and laboratory space noted in " Part I. Item 2. Properties " of this Annual Report on Form 10-K, for which we will record a lease liability and corresponding right-of-use asset upon adoption. We do not expect the adoption of this standard to impact retained earnings on January 1, 2019. We have also entered into additional facility leases that will commence in 2019 that will be accounted for under ASU 2016-02. Future undiscounted obligations related to our facility leases in effect as of December 31, 2018, as well as those facility leases entered into prior to December 31, 2018, but contain lease commencement dates after January 1, 2019, are included in the table of future obligations disclosed Note 14. In June 2016, FASB issued “ASU 2016-13, Financial Instruments: Credit Losses.” The objective of the standard is to provide information about expected credit losses on financial instruments at each reporting date and to change how other-than-temporary impairments on investment securities are recorded. The standard will become effective for us beginning on January 1, 2020, with early adoption permitted. We are currently evaluating the guidance to determine the potential impact on our financial condition, results of operations, cash flows, and financial statement disclosures. In August 2018, FASB issued “ASU 2018-15, Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.” The objective of the standard is to align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The standard will become effective for us beginning on January 1, 2020, with early adoption permitted. We are currently evaluating the guidance to determine the potential impact on our financial condition, results of operations, cash flows, and financial statement disclosures. In November 2018, FASB issued “ASU 2018-18, Clarifying the Interaction between Topic 808 and Topic 606.” The objective of the standard is to clarify the interaction between Topic 808, Collaborative Arrangements, and Topic 606, Revenue from Contracts with Customers. Currently, Topic 808 does not provide comprehensive recognition or measurement guidance for collaborative arrangements, and the accounting for those arrangements is often based on an analogy to other accounting literature or an accounting policy election. Similarly, aspects of Topic 606 have resulted in uncertainty in practice about the effect of the revenue standard on the accounting for collaborative arrangements. The standard will become effective for us beginning on January 1, 2020, with early adoption permitted. We are currently evaluating the guidance to determine the potential impact on our financial condition, results of operations, cash flows, and financial statement disclosures. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Property and Equipment, Estimated Useful Lives | Property and equipment are stated at cost. Land is not depreciated, while all other property and equipment are depreciated using the straight-line method over the estimated useful lives of the assets, which are generally as follows: Years Building 30 Laboratory and manufacturing equipment 5-15 Furniture and fixtures 5 Computers, software and office equipment 3 Property and equipment consisted of the following (in thousands): December 31, 2018 2017 Leasehold improvements $ 101,743 $ 86,778 Laboratory and manufacturing equipment 62,947 57,800 Building 23,341 23,448 Computers, software and office equipment 25,159 20,928 Furniture and fixtures 7,043 6,627 Land 4,771 4,771 225,004 200,352 Less: accumulated depreciation and amortization (121,184 ) (96,596 ) Total $ 103,820 $ 103,756 |
Schedule of Intangible Assets | Intangible assets resulting from milestone payments that became due upon the approval of ADCETRIS related to certain in-licensed technology. Intangible assets are amortized to cost of sales over the estimated life of the related licenses, which range from six to ten years. The components of net intangible assets are summarized as follows (in thousands): December 31, 2018 2017 Intangible assets $ 5,650 $ 5,650 Less: accumulated amortization (5,610 ) (4,886 ) Total $ 40 $ 764 |
Schedule of Percent of Revenue Associated with Each Major Distributor or Collaborator | The following table presents each major distributor or collaborator that comprised more than 10% of total revenue: Years ended December 31, 2018 2017 2016 Distributor A 28 % 23 % 22 % Distributor B 22 % 19 % 19 % Distributor C 20 % 18 % 17 % Takeda 21 % 29 % 27 % |
Schedule of Concentration of Accounts Receivable Attributable to Certain Major Distributors | The following table presents each major distributor or collaborator that accounted for more than 10% of accounts receivable: December 31, 2018 2017 Distributor A 32 % 32 % Distributor B 21 % 26 % Distributor C 23 % 29 % Takeda 20 % <10% |
Schedule of Weighted-Average Shares Excluded from Number of Shares Used to Calculate Basic and Diluted Net Loss Per Share | The following table presents the weighted average number of shares that have been excluded (in thousands): Years ended December 31, 2018 2017 2016 Stock options and RSUs 13,439 13,592 12,987 |
Revenue from contracts with c_2
Revenue from contracts with customers (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Revenue from Contracts with Customers Cumulative Effect | We recorded the following cumulative effect as of January 1, 2018, itemized here (in thousands) and further described below: Collaboration and license agreement revenues $ 10,281 Royalty revenues 22,230 Cost of royalty revenues (5,955 ) Accumulated deficit – (debit) credit $ 26,556 |
Summary of Collaboration and License Agreement Revenues by Collaborator | Collaboration and license agreement revenues by collaborator are summarized as follows (in thousands): Years ended December 31, 2018 2017 2016 Takeda $ 58,605 $ 74,872 $ 44,384 AbbVie 13,000 23,260 25,676 Genmab 7,000 — — GSK 6,000 — — Other 9,752 10,500 14,866 Collaboration and license agreement revenues $ 94,357 $ 108,632 $ 84,926 |
Schedule of Revenue from Contracts with Customers Impacts | Impacts to December 31, 2018 consolidated financial statements (in thousands) As reported Adjustments Balances without the adoption of Topic 606 Consolidated Balance Sheet data: Accounts receivable, net $ 146,281 $ (18,501 ) $ 127,780 Prepaid expenses and other current assets 43,403 — 43,403 Current portion of deferred revenue 33,600 — 33,600 Accumulated deficit (1,324,588 ) (18,501 ) (1,343,089 ) Consolidated Statements of Comprehensive Loss data: Collaboration and license agreement revenues $ 94,357 $ 10,282 $ 104,639 Royalty revenues 83,440 (1,634 ) 81,806 Total revenues 654,700 8,648 663,348 Cost of royalty revenues 22,208 592 22,800 Net loss (222,693 ) 8,056 (214,637 ) |
Acquisition of Cascadian (Table
Acquisition of Cascadian (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Schedule of Purchase Price Allocation of Assets Acquired and Liabilities Assumed | The purchase price allocation of the assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date was as follows (in thousands): Cash and cash equivalents $ 15,919 Short-term and long-term investments 66,491 Prepaid expenses and other assets 2,215 Property and equipment 566 In-process research and development 300,000 Goodwill 274,671 Accounts payable and accrued liabilities (22,139 ) Deferred tax liability (23,653 ) Total purchase price $ 614,070 |
Schedule of Business Acquisition, Unaudited Pro Forma Information | The following unaudited pro forma financial information is presented for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved had the acquisition occurred as of January 1, 2017 or indicative of future results (in thousands, except for per share information): Years Ended December 31, 2018 2017 Revenues $ 654,700 $ 482,250 Net loss (251,626 ) (212,364 ) Net loss per share - basic and diluted (1.58 ) (1.36 ) |
Fair Value (Tables)
Fair Value (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Hierarchy | The three levels of the fair value hierarchy are: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Level 2: Quoted prices in markets that are not active or financial instruments for which all significant inputs are observable, either directly or indirectly. Level 3: Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. |
Summary of Fair Value Hierarchy of Assets Carried at Fair Value and Measured on a Recurring Basis | The fair value hierarchy of the Company’s assets carried at fair value and measured on a recurring basis was as follows (in thousands): Fair value measurement using: Quoted prices in active markets for identical assets (Level 1) Other observable inputs (Level 2) Significant unobservable inputs (Level 3) Total December 31, 2018 Short-term investments—debt securities $ 332,486 $ — $ — $ 332,486 Long-term investments—debt securities 49,194 — — 49,194 Other non-current assets—equity securities 113,812 — — 113,812 Total $ 495,492 $ — $ — $ 495,492 December 31, 2017 Short-term investments—debt securities $ 252,226 $ — $ — $ 252,226 Other non-current assets—equity securities 188,358 — — 188,358 Total $ 440,584 $ — $ — $ 440,584 |
Available-for-Sale Securities | Our debt securities consisted of the following (in thousands): Amortized cost Gross unrealized gains Gross unrealized losses Fair value December 31, 2018 U.S. Treasury securities $ 381,673 $ 133 $ (126 ) $ 381,680 Contractual maturities (at date of purchase): Due in one year or less $ 246,440 $ 246,402 Due in one to two years 135,233 135,278 Total $ 381,673 $ 381,680 December 31, 2017 U.S. Treasury securities $ 252,511 $ — $ (285 ) $ 252,226 Contractual maturities (at date of purchase): Due in one year or less $ 151,903 $ 151,842 Due in one to two years 100,608 100,384 Total $ 252,511 $ 252,226 |
Investment and Other Income, _2
Investment and Other Income, Net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Investment and Other Income, Net | Investment and other income, net consisted of the following (in thousands): Years ended December 31, 2018 2017 2016 Gain on equity securities $ 7,336 $ 33,777 $ — Investment income, net 6,316 3,137 2,614 Total investment and other income, net $ 13,652 $ 36,914 $ 2,614 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories were comprised of ADCETRIS and consisted of the following (in thousands): December 31, 2018 2017 Raw materials $ 43,986 $ 52,398 Finished goods 9,253 7,580 Total $ 53,239 $ 59,978 |
Property and equipment (Tables)
Property and equipment (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment are stated at cost. Land is not depreciated, while all other property and equipment are depreciated using the straight-line method over the estimated useful lives of the assets, which are generally as follows: Years Building 30 Laboratory and manufacturing equipment 5-15 Furniture and fixtures 5 Computers, software and office equipment 3 Property and equipment consisted of the following (in thousands): December 31, 2018 2017 Leasehold improvements $ 101,743 $ 86,778 Laboratory and manufacturing equipment 62,947 57,800 Building 23,341 23,448 Computers, software and office equipment 25,159 20,928 Furniture and fixtures 7,043 6,627 Land 4,771 4,771 225,004 200,352 Less: accumulated depreciation and amortization (121,184 ) (96,596 ) Total $ 103,820 $ 103,756 |
Manufacturing facility acquis_2
Manufacturing facility acquisition (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Summary of Purchase Price Allocated to Assets Acquired and Liability Assumed Based on Estimated Fair Values | The purchase price was allocated to the assets acquired and liability assumed based on their estimated fair values as follows (in thousands): Building $ 23,448 Land 4,771 Other property and equipment 14,538 Current portion of deferred revenue (1,100 ) Total purchase price $ 41,657 |
Accrued liabilities (Tables)
Accrued liabilities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued liabilities | Accrued liabilities consisted of the following (in thousands) : December 31, 2018 2017 Employee compensation and benefits $ 49,788 $ 38,469 Clinical trial and related costs 38,692 26,514 Contract manufacturing 9,215 8,910 Gross-to-net deductions and third-party royalties 32,908 20,980 Professional services and other 16,690 10,426 Total $ 147,293 $ 105,299 |
Income taxes (Tables)
Income taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Company's Pre-tax Loss by Jurisdiction | Our pre-tax loss by jurisdiction consisted of the following (in thousands): December 31, 2018 2017 2016 U.S. $ (226,626 ) $ (71,698 ) $ (66,215 ) Foreign (19,720 ) (87,189 ) (73,896 ) Total $ (246,346 ) $ (158,887 ) $ (140,111 ) |
Schedule of Effective Income Tax Rate | A reconciliation of the federal statutory income tax rate to the effective income tax rate is as follows: Years ended December 31, 2018 2017 2016 Statutory federal income tax rate (21.0 )% (35.0 )% (35.0 )% Tax credits (6.0 ) (11.0 ) (25.0 ) Foreign rate differential (8.0 ) 14.0 16.0 State income taxes and other (3.0 ) (1.0 ) 1.0 Valuation allowance 44.0 (55.0 ) 40.0 Stock compensation (4.0 ) (5.0 ) 3.0 Worthless stock deduction (12.0 ) — — Impact of the Act — 72.0 — Effective tax rate, before impact in other comprehensive income (10.0 ) (21.0 ) 0.0 Impact in other comprehensive income — 21.0 — Effective tax rate, after impact in other comprehensive income (10.0 )% 0.0 % 0.0 % |
Schedule of Deferred Tax Assets | Our net deferred tax assets consisted of the following (in thousands): December 31, 2018 2017 Deferred tax assets: Net operating loss carryforwards $ 283,888 $ 158,951 Foreign net operating loss carryforwards 12,766 2,651 Tax credit carryforwards 175,702 148,027 Deferred revenue 2,553 13,779 Share-based compensation 29,354 26,454 Capitalized research and development 1,362 17,150 Depreciation and amortization 8,456 7,606 Other 20,627 15,178 Total deferred tax assets 534,708 389,796 Less: valuation allowance (477,834 ) (364,538 ) Total deferred tax assets, net of valuation allowance 56,874 25,258 Deferred tax liability: Intangibles and amortization (48,819 ) — Realized and unrealized gain on available-for-sale securities (8,055 ) (25,258 ) Net deferred tax assets (liability) $ — $ — |
Schedule of Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands): Years ended December 31, 2018 2017 2016 Balance at January 1 $ 18,172 $ 16,023 $ — Increase (decrease) related to prior year tax positions 108 (1,292 ) 12,631 Increase related to current year tax positions 2,426 3,441 3,392 Balance at December 31 $ 20,706 $ 18,172 $ 16,023 |
Commitments and contingencies (
Commitments and contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Noncancelable Obligations | As of December 31, 2018 , our future obligations related to building leases and supply and other agreements are as follows (in thousands): Building Leases Supply and Other Agreements Years ending December 31, 2019 $10,332 $92,105 2020 11,863 30,689 2021 12,770 31,091 2022 12,288 24,033 2023 12,142 21,720 Thereafter 30,517 43,440 Total $89,912 $243,078 |
Stockholders' equity (Tables)
Stockholders' equity (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Schedule of Common Stock Reserved for Future Issuance | At December 31, 2018 , shares of common stock reserved for future issuance are as follows (in thousands): Stock options and RSUs outstanding 13,795 Shares available for future grant under the 2007 Equity Incentive Plan 6,776 Employee stock purchase plan shares available for future issuance 383 Total 20,954 |
Share-based compensation (Table
Share-based compensation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Stock Options Valuation Assumptions | We calculate the fair value of each option award on the date of grant using the Black-Scholes option pricing model. The following weighted-average assumptions were used for the periods indicated: 2007 Plan Employee Stock Purchase Plan Years ended December 31, Years ended December 31, 2018 2017 2016 2018 2017 2016 Risk-free interest rate 2.8 % 1.8 % 1.3 % 1.67 % 0.76 % 0.35 % Expected lives in years 5.6 5.7 6.5 0.5 0.5 0.5 Expected dividends 0 % 0 % 0 % 0 % 0 % 0 % Expected volatility 42 % 42 % 44 % 36 % 46 % 46 % |
Schedule of Stock Option Activity Excluding Performance-Based Stock Options | A summary of stock option activity is as follows : Shares Weighted- average exercise price per share Weighted-average remaining contractual term (in years) Aggregate intrinsic value (in thousands) Balance at December 31, 2017 11,510,161 $ 34.32 Granted 1,645,938 $ 71.83 Exercised (1,799,791 ) $ 25.54 Forfeited/expired (481,196 ) $ 43.77 Balance at December 31, 2018 10,875,112 $ 41.03 6.11 $ 196,916 Expected to vest 10,490,591 $ 40.44 6.01 $ 194,027 Options exercisable 6,729,510 $ 32.55 4.59 $ 163,278 |
Schedule of Non-Vested Restricted Stock Units | A summary of RSU activity, excluding performance-based RSUs, is as follows: Share equivalent Weighted- average grant date fair value Non-vested at December 31, 2017 2,191,350 $ 45.46 Granted 1,339,322 $ 70.78 Vested (591,872 ) $ 40.52 Forfeited (258,559 ) $ 46.45 Non-vested at December 31, 2018 2,680,241 $ 59.11 |
Long Term Incentive Plan [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Non-Vested Restricted Stock Units | A summary of RSU activity related to the LTIPs is as follows: Share equivalent Weighted- average grant date fair value Non-vested at December 31, 2017 — $ — Granted 242,328 $ 58.14 Vested — $ — Forfeited (2,511 ) $ 58.14 Non-vested at December 31, 2018 239,817 $ 58.14 |
Quarterly financial data (una_2
Quarterly financial data (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Data | The following table contains selected unaudited financial data for each of the indicated periods (in thousands, except per share data): Three months ended March 31, June 30, September 30, December 31, 2018 Total revenues $ 140,590 $ 170,173 $ 169,424 $ 174,513 Net income (loss) $ (111,715 ) $ 76,273 $ (67,446 ) $ (119,805 ) Net income (loss) per share - basic $ (0.73 ) $ 0.48 $ (0.42 ) $ (0.75 ) Net income (loss) per share - diluted $ (0.73 ) $ 0.47 $ (0.42 ) $ (0.75 ) 2017 Total revenues $ 109,131 $ 108,223 $ 135,291 $ 129,605 Net income (loss) $ (59,990 ) $ (56,360 ) $ 50,021 $ (59,201 ) Net income (loss) per share - basic $ (0.42 ) $ (0.39 ) $ 0.35 $ (0.41 ) Net income (loss) per share - diluted $ (0.42 ) $ (0.39 ) $ 0.34 $ (0.41 ) |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Additional Information (Detail) | 12 Months Ended | |||
Dec. 31, 2018USD ($)Segment | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Jan. 01, 2018USD ($) | |
Summary Of Significant Accounting Policies [Line Items] | ||||
Number of reporting segment operated | Segment | 1 | |||
Accrued capital expenditures | $ 4,600,000 | $ 1,000,000 | ||
Decrease in retained earnings | $ (26,556,000) | |||
Amortization expenses | 700,000 | 800,000 | ||
Impairment losses recognized | $ 0 | |||
Number of days allowed to the customer to return product for expiration or damage | 30 years | |||
Advertising expenses | $ 26,600,000 | 13,800,000 | $ 12,900,000 | |
Accounting Standards Update 2016-01 [Member] | Retained Earnings [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Decrease in retained earnings | $ 64,100,000 | |||
Unum Therapeutics Collaboration and License Agreement [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Equity securities | 5,000,000 | |||
Minimum [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Estimated life of certain in-licensed technology, in years | 6 years | |||
Maximum [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Estimated life of certain in-licensed technology, in years | 10 years | |||
Equity Securities [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Equity securities | $ 113,800,000 | |||
Available-for-sale Securities, Equity Securities | $ 188,400,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Schedule of Property and Equipment, Estimated Useful Lives (Detail) | 12 Months Ended |
Dec. 31, 2018 | |
Building [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful life | 30 years |
Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful life | 5 years |
Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful life | 15 years |
Furniture and Fixtures [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful life | 5 years |
Computers, Software and Office Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful life | 3 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Intangible Assets (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Intangible assets | $ 5,650 | $ 5,650 |
Less: accumulated amortization | (5,610) | (4,886) |
Total | $ 40 | $ 764 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Percent of Revenue Associated with Each Major Distributor or Collaborator (Detail) - Customer Concentration Risk [Member] - Sales Revenue [Member] | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Distributor A [Member] | |||
Concentration Risk [Line Items] | |||
Percent of total revenues | 28.00% | 23.00% | 22.00% |
Distributor B [Member] | |||
Concentration Risk [Line Items] | |||
Percent of total revenues | 22.00% | 19.00% | 19.00% |
Distributor C [Member] | |||
Concentration Risk [Line Items] | |||
Percent of total revenues | 20.00% | 18.00% | 17.00% |
Takeda [Member] | |||
Concentration Risk [Line Items] | |||
Percent of total revenues | 21.00% | 29.00% | 27.00% |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Schedule of Concentration of Accounts Receivable Attributable to Certain Major Distributors (Detail) - Credit Concentration Risk [Member] - Accounts Receivable, Net [Member] | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | ||
Distributor A [Member] | |||
Concentration Risk [Line Items] | |||
Percent of total accounts receivable | 32.00% | 32.00% | |
Distributor B [Member] | |||
Concentration Risk [Line Items] | |||
Percent of total accounts receivable | 21.00% | 26.00% | |
Distributor C [Member] | |||
Concentration Risk [Line Items] | |||
Percent of total accounts receivable | 23.00% | 29.00% | |
Takeda [Member] | |||
Concentration Risk [Line Items] | |||
Percent of total accounts receivable | [1] | ||
[1] | Less than 10% |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Schedule of Weighted-Average Shares Excluded from Number of Shares Used to Calculate Basic and Diluted Net Loss Per Share (Detail) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Stock Options and RSUs [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Weighted-average shares that have been excluded from the number of shares used to calculate basic and diluted net loss per share (in shares) | 13,439 | 13,592 | 12,987 |
Revenue from contracts with c_3
Revenue from contracts with customers - Summary of Revenue from Contracts with Customers Cumulative Effect (Details) - USD ($) $ in Thousands | Jan. 01, 2018 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||||||||
Total revenues | $ 174,513 | $ 169,424 | $ 170,173 | $ 140,590 | $ 129,605 | $ 135,291 | $ 108,223 | $ 109,131 | $ 654,700 | $ 482,250 | $ 418,147 | |
Accumulated deficit | (1,324,588) | $ (1,192,570) | (1,324,588) | (1,192,570) | ||||||||
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Accounting Standards Update 2014-09 [Member] | ||||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||||||||
Total revenues | 8,648 | |||||||||||
Cost of royalty revenues | $ (5,955) | |||||||||||
Accumulated deficit | 26,556 | $ (18,501) | (18,501) | |||||||||
License and Service [Member] | ||||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||||||||
Total revenues | 94,357 | 108,632 | 84,926 | |||||||||
License and Service [Member] | Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Accounting Standards Update 2014-09 [Member] | ||||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||||||||
Total revenues | 10,281 | 10,282 | ||||||||||
Royalty [Member] | ||||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||||||||
Total revenues | 83,440 | $ 66,056 | $ 67,455 | |||||||||
Royalty [Member] | Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Accounting Standards Update 2014-09 [Member] | ||||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||||||||
Total revenues | $ 22,230 | $ (1,634) |
Revenue from contracts with c_4
Revenue from contracts with customers - Additional Information (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018USD ($)Product | Jan. 01, 2018USD ($) | Dec. 31, 2017USD ($) | |
Revenue from Contracts with Customers [Line Items] | |||
Accounts receivable, net | $ 146,281 | $ 84,774 | |
Prepaid expenses and other current assets | 43,403 | 19,138 | |
Current portion of deferred revenue | 33,600 | $ 34,457 | |
Collaboration and License Agreement [Member] | |||
Revenue from Contracts with Customers [Line Items] | |||
Deferred revenue recognized | 34,500 | ||
Collaboration and License Agreement [Member] | Takeda Collaboration and License Agreement [Member] | |||
Revenue from Contracts with Customers [Line Items] | |||
Milestone payment revenue | $ 10,000 | ||
ADCETRIS [Member] | |||
Revenue from Contracts with Customers [Line Items] | |||
Number of marketed product | Product | 1 | ||
ADCETRIS [Member] | Accounting Standards Update 2014-09 [Member] | |||
Revenue from Contracts with Customers [Line Items] | |||
Contract asset | $ 0 | $ 12,700 | |
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Accounting Standards Update 2014-09 [Member] | |||
Revenue from Contracts with Customers [Line Items] | |||
Accounts receivable, net | (18,501) | 16,300 | |
Prepaid expenses and other current assets | 0 | 12,700 | |
Current portion of deferred revenue | $ 0 | $ 2,400 |
Revenue from contracts with c_5
Revenue from contracts with customers - Summary of Collaboration and License Agreement Revenues by Collaborator (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenues | $ 174,513 | $ 169,424 | $ 170,173 | $ 140,590 | $ 129,605 | $ 135,291 | $ 108,223 | $ 109,131 | $ 654,700 | $ 482,250 | $ 418,147 |
License and Service [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenues | 94,357 | 108,632 | 84,926 | ||||||||
License and Service [Member] | Takeda Collaboration and License Agreement [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenues | 58,605 | 74,872 | 44,384 | ||||||||
License and Service [Member] | AbbVie Collaboration and License Agreement [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenues | 13,000 | 23,260 | 25,676 | ||||||||
License and Service [Member] | Genmab Collaboration And License Agreement [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenues | 7,000 | 0 | 0 | ||||||||
License and Service [Member] | GSK Collaboration And License Agreement [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenues | 6,000 | 0 | 0 | ||||||||
License and Service [Member] | Other Collaboration and License Agreement [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenues | $ 9,752 | $ 10,500 | $ 14,866 |
Revenue from contracts with c_6
Revenue from contracts with customers - Schedule of Revenue from Contracts with Customers Impacts (Details) - USD ($) $ in Thousands | Jan. 01, 2018 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||||||||
Accounts receivable, net | $ 146,281 | $ 84,774 | $ 146,281 | $ 84,774 | ||||||||
Prepaid expenses and other current assets | 43,403 | 19,138 | 43,403 | 19,138 | ||||||||
Current portion of deferred revenue | 33,600 | 34,457 | 33,600 | 34,457 | ||||||||
Accumulated deficit | (1,324,588) | (1,192,570) | (1,324,588) | (1,192,570) | ||||||||
Total revenues | 174,513 | $ 169,424 | $ 170,173 | $ 140,590 | 129,605 | $ 135,291 | $ 108,223 | $ 109,131 | 654,700 | 482,250 | $ 418,147 | |
Net loss | (119,805) | $ (67,446) | $ 76,273 | $ (111,715) | $ (59,201) | $ 50,021 | $ (56,360) | $ (59,990) | (222,693) | (125,530) | (140,111) | |
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Accounting Standards Update 2014-09 [Member] | ||||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||||||||
Accounts receivable, net | $ 16,300 | (18,501) | (18,501) | |||||||||
Prepaid expenses and other current assets | 12,700 | 0 | 0 | |||||||||
Current portion of deferred revenue | 2,400 | 0 | 0 | |||||||||
Accumulated deficit | 26,556 | (18,501) | (18,501) | |||||||||
Total revenues | 8,648 | |||||||||||
Net loss | 8,056 | |||||||||||
Calculated under Revenue Guidance in Effect before Topic 606 [Member] | Accounting Standards Update 2014-09 [Member] | ||||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||||||||
Accounts receivable, net | 127,780 | 127,780 | ||||||||||
Prepaid expenses and other current assets | 43,403 | 43,403 | ||||||||||
Current portion of deferred revenue | 33,600 | 33,600 | ||||||||||
Accumulated deficit | $ (1,343,089) | (1,343,089) | ||||||||||
Total revenues | 663,348 | |||||||||||
Net loss | (214,637) | |||||||||||
License and Service [Member] | ||||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||||||||
Total revenues | 94,357 | 108,632 | 84,926 | |||||||||
License and Service [Member] | Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Accounting Standards Update 2014-09 [Member] | ||||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||||||||
Total revenues | 10,281 | 10,282 | ||||||||||
License and Service [Member] | Calculated under Revenue Guidance in Effect before Topic 606 [Member] | Accounting Standards Update 2014-09 [Member] | ||||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||||||||
Total revenues | 104,639 | |||||||||||
Royalty [Member] | ||||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||||||||
Total revenues | 83,440 | 66,056 | 67,455 | |||||||||
Cost of sales | 22,208 | $ 19,350 | $ 14,149 | |||||||||
Royalty [Member] | Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Accounting Standards Update 2014-09 [Member] | ||||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||||||||
Total revenues | $ 22,230 | (1,634) | ||||||||||
Cost of sales | 592 | |||||||||||
Royalty [Member] | Calculated under Revenue Guidance in Effect before Topic 606 [Member] | Accounting Standards Update 2014-09 [Member] | ||||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||||||||
Total revenues | 81,806 | |||||||||||
Cost of sales | $ 22,800 |
Acquisition of Cascadian - Addi
Acquisition of Cascadian - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2018 | |
Cascadian Therapeutics [Member] | |||
Business Acquisition [Line Items] | |||
Share price (in dollars per share) | $ 10 | ||
Payments to acquire business | $ 614,100 | ||
Acquisition-related costs | $ 8,500 | ||
Increase to goodwill | $ 27,600 | ||
Deferred tax liability | $ 23,653 | $ 23,700 | 23,700 |
Collaboration and License Agreement [Member] | |||
Business Acquisition [Line Items] | |||
Deferred revenue recognized | $ 34,500 |
Acquisition of Cascadian - Sche
Acquisition of Cascadian - Schedule of Purchase Price Allocation of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Business Acquisition [Line Items] | |||
Goodwill | $ 274,671 | $ 0 | |
Cascadian Therapeutics [Member] | |||
Business Acquisition [Line Items] | |||
Cash and cash equivalents | $ 15,919 | ||
Short-term and long-term investments | 66,491 | ||
Prepaid expenses and other assets | 2,215 | ||
Property and equipment | 566 | ||
In-process research and development | 300,000 | ||
Goodwill | 274,671 | ||
Accounts payable and accrued liabilities | (22,139) | ||
Deferred tax liability | $ (23,700) | (23,653) | |
Total purchase price | $ 614,070 |
Acquisition of Cascadian - Sc_2
Acquisition of Cascadian - Schedule of Business Acquisition, Unaudited Pro Forma Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Business Acquisition [Line Items] | |||
Net loss per share-basic and diluted (in dollars per share) | $ (1.41) | $ (0.88) | $ (1) |
Cascadian Therapeutics [Member] | |||
Business Acquisition [Line Items] | |||
Revenues | $ 654,700 | $ 482,250 | |
Net loss | $ (251,626) | $ (212,364) | |
Net loss per share-basic and diluted (in dollars per share) | $ (1.58) | $ (1.36) |
Fair Value - Summary of Fair Va
Fair Value - Summary of Fair Value Hierarchy of Assets Carried at Fair Value and Measured on a Recurring Basis (Detail) - Fair Value Measurements Recurring [Member] - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | $ 495,492 | $ 440,584 |
Short-term Investments [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 332,486 | 252,226 |
Long-term investments - debt securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 49,194 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 495,492 | 440,584 |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Short-term Investments [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 332,486 | 252,226 |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Long-term investments - debt securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 49,194 | |
Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Other Observable Inputs (Level 2) [Member] | Short-term Investments [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Other Observable Inputs (Level 2) [Member] | Long-term investments - debt securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | |
Significant Unobservable Inputs (Level 3) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Significant Unobservable Inputs (Level 3) [Member] | Short-term Investments [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Significant Unobservable Inputs (Level 3) [Member] | Long-term investments - debt securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | |
Common Stock Investment in Immunomedics (Equity Securities) [Member] | Other Non-current Assets [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 113,812 | 188,358 |
Common Stock Investment in Immunomedics (Equity Securities) [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Other Non-current Assets [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 113,812 | 188,358 |
Common Stock Investment in Immunomedics (Equity Securities) [Member] | Other Observable Inputs (Level 2) [Member] | Other Non-current Assets [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Common Stock Investment in Immunomedics (Equity Securities) [Member] | Significant Unobservable Inputs (Level 3) [Member] | Other Non-current Assets [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | $ 0 | $ 0 |
Fair Value - Summary of Debt Se
Fair Value - Summary of Debt Securities (Details) - U.S. Treasury Securities (Debt Securities) [Member] - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Securities, Available-for-sale [Line Items] | ||
Available-for-sale securities, Amortized cost | $ 381,673 | $ 252,511 |
Available-for-sale securities, Gross unrealized gains | 133 | 0 |
Available-for-sale securities, Gross unrealized losses | (126) | (285) |
Available-for-sale securities, Fair value | 381,680 | 252,226 |
Debt securities, due in one year or less, amortized cost | 246,440 | 151,903 |
Debt securities, due in one year or less, fair value | 246,402 | 151,842 |
Debt securities, due in one to two years, amortized cost | 135,233 | 100,608 |
Debt securities, due in one to two years, fair value | $ 135,278 | $ 100,384 |
Fair Value - Additional Informa
Fair Value - Additional Information (Details) - Immunomedics [Member] - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 1 Months Ended | 12 Months Ended |
Feb. 28, 2017 | Dec. 31, 2017 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total consideration paid under stock purchase agreement | $ 14.7 | $ 42.4 |
Share of Immunomedics common stock purchased (in shares) | 3 | |
Warrant exercise price (in dollars per share) | $ 4.90 | |
Common Stock Warrant in Immunomedics [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Share of Immunomedics common stock purchased (in shares) | 8.7 | |
Warrant to purchase additional shares of Immunomedics common stock (in shares) | 8.7 | |
Common Stock Warrant in Immunomedics [Member] | Changes Measurement [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Non-cash net gain in investment | $ 33.8 |
Investment and Other Income, _3
Investment and Other Income, Net - Schedule of Investment and Other Income, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |||
Gain on equity securities | $ 7,336 | $ 33,777 | $ 0 |
Investment income, net | 6,316 | 3,137 | 2,614 |
Total investment and other income, net | $ 13,652 | $ 36,914 | $ 2,614 |
Investment and Other Income, _4
Investment and Other Income, Net - Additional Information (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Debt and Equity Securities, FV-NI [Line Items] | |
Sale of stock | $ 91.9 |
Equity Securities, Investment Summary [Member] | |
Debt and Equity Securities, FV-NI [Line Items] | |
Unrealized loss | $ (20.9) |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 43,986 | $ 52,398 |
Finished goods | 9,253 | 7,580 |
Total | 53,239 | $ 59,978 |
Inventory write-off | $ 18,100 |
Property and equipment - Schedu
Property and equipment - Schedule of Property and Equipment (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Abstract] | ||
Leasehold improvements | $ 101,743 | $ 86,778 |
Laboratory and manufacturing equipment | 62,947 | 57,800 |
Building | 23,341 | 23,448 |
Computers, software and office equipment | 25,159 | 20,928 |
Furniture and fixtures | 7,043 | 6,627 |
Land | 4,771 | 4,771 |
Property and equipment, gross | 225,004 | 200,352 |
Less: accumulated depreciation and amortization | (121,184) | (96,596) |
Total | $ 103,820 | $ 103,756 |
Property and quipment - Additio
Property and quipment - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation and amortization expenses | $ 25.3 | $ 23.5 | $ 17.3 |
Construction in process included in Leasehold improvements | $ 18.5 | $ 3.5 |
Manufacturing facility acquis_3
Manufacturing facility acquisition - Summary of Purchase Price Allocated to Assets Acquired and Liability Assumed Based on Estimated Fair Values (Detail) - Bristol Myers Squibb Company [Member] $ in Thousands | Oct. 31, 2017USD ($) |
Business Acquisition [Line Items] | |
Building | $ 23,448 |
Land | 4,771 |
Other property and equipment | 14,538 |
Current portion of deferred revenue | (1,100) |
Total purchase price | $ 41,657 |
Accounts Payable and Accrued Li
Accounts Payable and Accrued Liabilities - Schedule of Accounts Payable and Accrued Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Payables and Accruals [Abstract] | ||
Employee compensation and benefits | $ 49,788 | $ 38,469 |
Clinical trial and related costs | 38,692 | 26,514 |
Contract manufacturing | 9,215 | 8,910 |
Gross-to-net deductions and third-party royalties | 32,908 | 20,980 |
Professional services and other | 16,690 | 10,426 |
Total | $ 147,293 | $ 105,299 |
Income taxes - Schedule of Comp
Income taxes - Schedule of Company's Pre-tax Loss by Jurisdiction (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Noncontrolling Interest [Abstract] | |||
U.S. | $ (226,626) | $ (71,698) | $ (66,215) |
Foreign | (19,720) | (87,189) | (73,896) |
Total | $ (246,346) | $ (158,887) | $ (140,111) |
Income taxes - Additional Infor
Income taxes - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2018 | |
Income Taxes [Line Items] | ||||
Reduction in net deferred tax assets to reflect new statutory rate | $ 114,800 | |||
Income tax benefit | $ 23,653 | 33,357 | $ 0 | |
Tax credit carryforward | 196,400 | |||
Increase in net deferred tax asset | 60,500 | |||
Increase (decrease) in the valuation allowance | 113,300 | (16,800) | $ 59,200 | |
ASU 2016-09 [Member] | ||||
Income Taxes [Line Items] | ||||
Increase in net deferred tax asset | 70,900 | |||
Federal [Member] | ||||
Income Taxes [Line Items] | ||||
Gross net operating loss carryforwards | 1,200,000 | |||
Indefinite operating loss carryforwards | 184,800 | |||
Operating loss carryforwards, subject to expiration | 1,000,000 | |||
State [Member] | ||||
Income Taxes [Line Items] | ||||
Gross net operating loss carryforwards | 450,800 | |||
Foreign [Member] | ||||
Income Taxes [Line Items] | ||||
Gross net operating loss carryforwards | $ 143,200 | |||
Earliest Tax Year [Member] | ||||
Income Taxes [Line Items] | ||||
Tax years subject to future examination for federal income taxes | 2,001 | |||
Latest Tax Year [Member] | ||||
Income Taxes [Line Items] | ||||
Tax years subject to future examination for federal income taxes | 2,018 | |||
Minimum [Member] | Federal [Member] | ||||
Income Taxes [Line Items] | ||||
Net operating loss expiration dates | 2,019 | |||
Maximum [Member] | Federal [Member] | ||||
Income Taxes [Line Items] | ||||
Net operating loss expiration dates | 2,038 | |||
Equity Securities, Investment Summary [Member] | ||||
Income Taxes [Line Items] | ||||
Income tax benefit | $ 33,357 | |||
Cascadian Therapeutics [Member] | ||||
Income Taxes [Line Items] | ||||
Deferred tax liability | $ 23,700 | $ 23,653 | ||
Operating Loss, Tax Credits, And Other Activity [Member] | ||||
Income Taxes [Line Items] | ||||
Increase (decrease) in the valuation allowance | 143,300 | |||
Accounting Standards Update 2014-09 [Member] | ||||
Income Taxes [Line Items] | ||||
Increase (decrease) in the valuation allowance | $ (6,300) |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate (Detail) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Effective Income Tax Rate Reconciliation, Other Reconciling Items, Percent [Abstract] | |||
Statutory federal income tax rate | (21.00%) | (35.00%) | (35.00%) |
Tax credits | (6.00%) | (11.00%) | (25.00%) |
Foreign rate differential | (8.00%) | 14.00% | 16.00% |
State income taxes and other | (3.00%) | (1.00%) | 1.00% |
Valuation allowance | 44.00% | (55.00%) | 40.00% |
Stock compensation | (4.00%) | (5.00%) | 3.00% |
Worthless stock deduction | (12.00%) | (0.00%) | (0.00%) |
Impact of the Act | (0.00%) | 72.00% | (0.00%) |
Effective tax rate, before impact in other comprehensive income | (10.00%) | (21.00%) | (0.00%) |
Impact in other comprehensive income | (0.00%) | 21.00% | (0.00%) |
Effective tax rate, after impact in other comprehensive income | (10.00%) | (0.00%) | (0.00%) |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 283,888 | $ 158,951 |
Foreign net operating loss carryforwards | 12,766 | 2,651 |
Tax credit carryforwards | 175,702 | 148,027 |
Deferred revenue | 2,553 | 13,779 |
Share-based compensation | 29,354 | 26,454 |
Capitalized research and development | 1,362 | 17,150 |
Depreciation and amortization | 8,456 | 7,606 |
Other | 20,627 | 15,178 |
Total deferred tax assets | 534,708 | 389,796 |
Less: valuation allowance | (477,834) | (364,538) |
Total deferred tax assets, net of valuation allowance | 56,874 | 25,258 |
Deferred tax liability: | ||
Intangibles and amortization | (48,819) | 0 |
Realized and unrealized gain on available-for-sale securities | (8,055) | (25,258) |
Net deferred tax assets (liability) | $ 0 | $ 0 |
Income Taxes - Schedule of Reco
Income Taxes - Schedule of Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Reconciliation of the Beginning and Ending Amount of Unrecognized Tax Benefits | |||
Balance at January 1 | $ 18,172 | $ 16,023 | $ 0 |
Increase (decrease) related to prior year tax positions | 108 | (1,292) | 12,631 |
Increase related to current year tax positions | 2,426 | 3,441 | 3,392 |
Balance at December 31 | $ 20,706 | $ 18,172 | $ 16,023 |
Collaboration and license agr_2
Collaboration and license agreements - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Astellas Collaboration and License Agreements [Member] | |||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Third Party Research And Development Expenses Incurred | $ 54.9 | $ 36.3 | $ 15 |
Genmab Collaboration and License Agreements [Member] | |||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Third Party Research And Development Expenses Incurred | 33.8 | 6.8 | |
Unum Therapeutics Collaboration and License Agreement [Member] | |||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Research and development expense | 6.2 | $ 8.5 | $ 5.3 |
Pieris Collaboration and License Agreement [Member] | |||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Upfront payment | 30 | ||
Maximum [Member] | Unum Therapeutics Collaboration and License Agreement [Member] | |||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Potential future licensing and progress dependent milestone payments | 400 | ||
Maximum [Member] | Pieris Collaboration and License Agreement [Member] | |||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Potential future licensing and progress dependent milestone payments | $ 1,200 |
In-license agreements (Details)
In-license agreements (Details) | 12 Months Ended |
Dec. 31, 2018agreement | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Number of licensing agreements | 2 |
Commitments and contingencies -
Commitments and contingencies - Additional Information (Detail) $ in Millions | Mar. 08, 2018stockholder | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Other Commitments [Line Items] | ||||
Rent expense | $ | $ 8.7 | $ 6.6 | $ 5.6 | |
Number of stockholders | stockholder | 3 | |||
Minimum [Member] | ||||
Other Commitments [Line Items] | ||||
Lease expiration date | 2,019 | |||
Maximum [Member] | ||||
Other Commitments [Line Items] | ||||
Lease expiration date | 2,029 |
Commitments and Contingencies_2
Commitments and Contingencies - Schedule of Noncancelable Obligations (Detail) $ in Thousands | Dec. 31, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2019, Leases | $ 10,332 |
2020, Leases | 11,863 |
2021, Leases | 12,770 |
2022, Leases | 12,288 |
2023, Leases | 12,142 |
Thereafter, Leases | 30,517 |
Total, Leases | 89,912 |
2019, Supply and Other Agreements | 92,105 |
2020, Supply and Other Agreements | 30,689 |
2021, Supply and Other Agreements | 31,091 |
2022, Supply and Other Agreements | 24,033 |
2023, Supply and Other Agreements | 21,720 |
Thereafter, Supply and Other Agreements | 43,440 |
Total, Supply and Other Agreements | $ 243,078 |
Stockholders' equity - Addition
Stockholders' equity - Additional information (Detail) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 12 Months Ended |
Feb. 28, 2018 | Dec. 31, 2018 | |
Subsidiary, Sale of Stock [Line Items] | ||
Issuance of common stock (in shares) | 13,269,000 | |
Underwritten Public Offering [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Issuance of common stock (in shares) | 13,269,230 | |
Common stock, issue price (in dollars per share) | $ 52 | |
Net proceeds from issuance of common stock | $ 658.2 |
Stockholders' equity - Schedule
Stockholders' equity - Schedule of Common Stock Reserved for Future Issuance (Detail) shares in Thousands | Dec. 31, 2018shares |
Common Stock, Number of Shares, Par Value and Other Disclosures [Abstract] | |
Stock options and RSUs outstanding (in shares) | 13,795 |
Shares available for future grant under the 2007 Equity Incentive Plan (in shares) | 6,776 |
Employee stock purchase plan shares available for future issuance (in shares) | 383 |
Total common stock reserved for future issuance (in shares) | 20,954 |
Share-based compensation - 2007
Share-based compensation - 2007 Equity Incentive Plan - Additional Information (Detail) - 2007 Equity Incentive Plan [Member] - shares | 1 Months Ended | 12 Months Ended |
May 31, 2018 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Additional shares reserved for issuance by plan amendment (in shares) | 6,000,000 | |
Common stock reserved for issuance (in shares) | 33,000,000 | |
Minimum percentage of exercise price stock at grant date fair market value | 100.00% | |
Maximum term from date of grant, years | 10 years | |
Employee Stock Option [Member] | Employee [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Initial vesting period, percentage | 25.00% | |
Initial vesting period, years | 1 year | |
Subsequent vesting period, years | 36 months | |
Restricted Stock Units (RSUs) [Member] | Employee [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Initial vesting period, percentage | 25.00% | |
Restricted Stock Units (RSUs) [Member] | Employee [Member] | Three Year Anniversary Vesting Period, Percentage [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting rights, percentage | 100.00% | |
Restricted Stock Units (RSUs) [Member] | Board Of Directors [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Initial vesting period, years | 1 year |
Share-based compensation - Shar
Share-based compensation - Share-based compensation expense - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Share based compensation cost | $ 78,861 | $ 63,802 | $ 52,471 |
Share based compensation costs capitalized | $ 1,000 | $ 1,300 | $ 1,000 |
Share-based compensation - Sche
Share-based compensation - Schedule of Stock Options Valuation Assumptions (Detail) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
2007 Equity Incentive Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate | 2.80% | 1.80% | 1.30% |
Expected lives in years | 5 years 7 months 13 days | 5 years 8 months 12 days | 6 years 6 months |
Expected dividends | 0.00% | 0.00% | 0.00% |
Expected volatility | 42.00% | 42.00% | 44.00% |
Employee Stock Purchase Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate | 1.67% | 0.76% | 0.35% |
Expected lives in years | 6 months | 6 months | 6 months |
Expected dividends | 0.00% | 0.00% | 0.00% |
Expected volatility | 36.00% | 46.00% | 46.00% |
Share-based compensation - Sc_2
Share-based compensation - Schedule of Stock Option Activity (Detail) - 2007 Equity Incentive Plan [Member] - Option Plan [Member] $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($)$ / sharesshares | |
Shares | |
Beginning balance, shares (in shares) | shares | 11,510,161 |
Granted, shares (in shares) | shares | 1,645,938 |
Exercised, shares (in shares) | shares | (1,799,791) |
Forfeited/expired, shares (in shares) | shares | (481,196) |
Ending balance, shares (in shares) | shares | 10,875,112 |
Expected to vest, shares (in shares) | shares | 10,490,591 |
Options exercisable, shares (in shares) | shares | 6,729,510 |
Weighted- average exercise price per share | |
Beginning balance, weighted-average exercise price per share (in dollars per share) | $ / shares | $ 34.32 |
Granted, weighted-average exercise price per share (in dollars per share) | $ / shares | 71.83 |
Exercised, weighted-average exercise price per share (in dollars per share) | $ / shares | 25.54 |
Forfeited/expired, weighted-average exercise price per share (in dollars per share) | $ / shares | 43.77 |
Expected to vest, weighted-average exercise price per share (in dollars per share) | $ / shares | 40.44 |
Options exercisable, weighted-average exercise price per share (in dollars per share) | $ / shares | 32.55 |
Ending balance, weighted-average exercise price per share (in dollars per share) | $ / shares | $ 41.03 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |
Outstanding, weighted-average remaining contractual term (in years), Options outstanding | 6 years 1 month 9 days |
Expected to vest, weighted-average remaining contractual term (in years), Expected to vest | 6 years 4 days |
Options exercisable, weighted-average remaining contractual term (in years), Options exercisable | 4 years 7 months 2 days |
Options outstanding, aggregate intrinsic value | $ | $ 196,916 |
Expected to vest, aggregate intrinsic value | $ | 194,027 |
Options exercisable, aggregate intrinsic value | $ | $ 163,278 |
Share-based compensation - Stoc
Share-based compensation - Stock Option Activity - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized compensation cost related to unvested share-based compensation | $ 63.5 | ||
2007 Equity Incentive Plan [Member] | Option Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average grant-date fair values of options granted (in dollars per share) | $ 30.77 | $ 20.34 | $ 18.20 |
Aggregate intrinsic value of options exercised | $ 73.3 | $ 52.9 | $ 61.4 |
Unrecognized compensation cost related to unvested share-based compensation | $ 49.5 | ||
Unrecognized compensation of weighted-average period, years | 1 year 5 months 3 days |
Share-based compensation - Sc_3
Share-based compensation - Schedule of Non-Vested Restricted Stock Units (Detail) - 2007 Equity Incentive Plan [Member] - Restricted Stock Units (RSUs) [Member] - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share equivalent | |||
Non-vested beginning balance, share equivalent (in shares) | 2,191,350 | ||
Granted, share equivalent (in shares) | 1,339,322 | ||
Vested, share equivalent (in shares) | (591,872) | ||
Forfeited, share equivalent (in shares) | (258,559) | ||
Non-vested, ending balance, share equivalent (in shares) | 2,680,241 | 2,191,350 | |
Weighted- average grant date fair value | |||
Non-vested, weighted-average grant date fair value (in dollars per share) | $ 59.11 | $ 45.46 | |
Granted, weighted-average grant date fair value (in dollars per share) | 70.78 | $ 50.12 | $ 44.72 |
Vested, weighted-average grant date fair value (in dollars per share) | 40.52 | ||
Forfeited, weighted-average grant date fair value (in dollars per share) | $ 46.45 |
Share-based compensation - RSU
Share-based compensation - RSU Activity - Additional Information (Detail) - 2007 Equity Incentive Plan [Member] - Restricted Stock Units (RSUs) [Member] - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Granted, weighted-average grant date fair value (in dollars per share) | $ 70.78 | $ 50.12 | $ 44.72 |
Value of stock awards vested during the period | $ 42.4 | $ 27.5 | $ 23.3 |
Unrecognized compensation cost related to unvested share-based compensation | $ 86.3 | ||
Unrecognized compensation of weighted-average period, years | 1 year 7 months 10 days |
Share-based compensation - Sc_4
Share-based compensation - Schedule of LTIP equity activity (Details) - Restricted Stock Units (RSUs) [Member] - Long Term Incentive Plan [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Share equivalent | ||
Non-vested beginning balance, share equivalent (in shares) | 0 | |
Granted, share equivalent (in shares) | 242,328 | |
Vested, share equivalent (in shares) | 0 | |
Forfeited, share equivalent (in shares) | (2,511) | |
Non-vested, ending balance, share equivalent (in shares) | 239,817 | 0 |
Weighted- average grant date fair value | ||
Non-vested, weighted-average grant date fair value (in dollars per share) | $ 58.14 | $ 0 |
Granted, weighted-average grant date fair value (in dollars per share) | 58.14 | |
Vested, weighted-average grant date fair value (in dollars per share) | 0 | |
Forfeited, weighted-average grant date fair value (in dollars per share) | $ 58.14 |
Share-based compensation - LTIP
Share-based compensation - LTIP Activity - Additional Information (Details) $ in Millions | Dec. 31, 2018USD ($) |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Unrecognized compensation cost related to unvested share-based compensation | $ 63.5 |
Share-based compensation - Empl
Share-based compensation - Employee Stock Purchase Plan - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2018 | |
Employee Stock Purchase Plan [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Discounted stock purchase price, percent of market value | 85.00% |
Employee benefit plan - Additio
Employee benefit plan - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Defined Contribution Plan [Abstract] | |||
Total contribution made by employer under matching program | $ 7.7 | $ 5.7 | $ 4.7 |
Quarterly financial data (una_3
Quarterly financial data (unaudited) - Schedule of Quarterly Financial Data (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Quarterly Financial Data [Abstract] | |||||||||||
Total revenues | $ 174,513 | $ 169,424 | $ 170,173 | $ 140,590 | $ 129,605 | $ 135,291 | $ 108,223 | $ 109,131 | $ 654,700 | $ 482,250 | $ 418,147 |
Net income (loss) | $ (119,805) | $ (67,446) | $ 76,273 | $ (111,715) | $ (59,201) | $ 50,021 | $ (56,360) | $ (59,990) | $ (222,693) | $ (125,530) | $ (140,111) |
Net income (loss) per share-basic (in dollars per share) | $ (0.75) | $ (0.42) | $ 0.48 | $ (0.73) | $ (0.41) | $ 0.35 | $ (0.39) | $ (0.42) | |||
Net income (loss) per share-diluted (in dollars per share) | $ (0.75) | $ (0.42) | $ 0.47 | $ (0.73) | $ (0.41) | $ 0.34 | $ (0.39) | $ (0.42) |
Uncategorized Items - sgen-2018
Label | Element | Value |
AOCI Attributable to Parent [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (64,119,000) |
Retained Earnings Accumulated Deficit [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 90,675,000 |