Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2021 | Oct. 25, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2021 | |
Document Transition Report | false | |
Entity File Number | 0-32405 | |
Entity Registrant Name | SEAGEN INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 91-1874389 | |
Entity Address | 21823 30th Drive SE | |
Entity Address, City or Town | Bothell | |
Entity Address, State or Province | WA | |
Postal Zip Code | 98021 | |
City Area Code | 425 | |
Local Phone Number | 527-4000 | |
Title of 12(b) Security | Common Stock, par value $0.001 | |
Trading Symbol | SGEN | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 182,855,795 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0001060736 | |
Current Fiscal Year End Date | --12-31 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 685,173 | $ 558,424 |
Short-term investments | 1,751,201 | 2,000,996 |
Accounts receivable, net | 387,169 | 324,988 |
Inventories | 181,375 | 116,136 |
Prepaid expenses and other current assets | 109,695 | 61,840 |
Total current assets | 3,114,613 | 3,062,384 |
Property and equipment, net | 209,469 | 196,700 |
Operating lease right-of-use assets | 59,653 | 61,480 |
Long-term investments | 0 | 100,830 |
Intangible assets, net | 266,409 | 283,680 |
Goodwill | 274,671 | 274,671 |
Other non-current assets | 53,063 | 21,161 |
Total assets | 3,977,878 | 4,000,906 |
Current liabilities: | ||
Accounts payable | 109,957 | 78,067 |
Accrued liabilities and other | 588,477 | 310,071 |
Total current liabilities | 698,434 | 388,138 |
Long-term liabilities: | ||
Operating lease liabilities, long-term | 58,878 | 61,884 |
Other long-term liabilities | 55,611 | 62,784 |
Total long-term liabilities | 114,489 | 124,668 |
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; 182,801 shares issued and outstanding at September 30, 2021 and 180,902 shares issued and outstanding at December 31, 2020 | 183 | 181 |
Additional paid-in capital | 4,533,360 | 4,356,922 |
Accumulated other comprehensive income | 823 | 565 |
Accumulated deficit | (1,369,411) | (869,568) |
Total stockholders’ equity | 3,164,955 | 3,488,100 |
Total liabilities and stockholders’ equity | $ 3,977,878 | $ 4,000,906 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2021 | Dec. 31, 2020 |
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) | 182,801,000 | 180,902,000 |
Common stock, shares outstanding (in shares) | 182,801,000 | 180,902,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Revenues: | ||||
Total revenues | $ 424,060 | $ 1,061,731 | $ 1,144,520 | $ 1,574,243 |
Costs and expenses: | ||||
Cost of sales | 82,650 | 78,296 | 224,875 | 155,962 |
Research and development | 459,092 | 217,670 | 924,378 | 610,945 |
Selling, general and administrative | 180,281 | 127,579 | 505,253 | 375,470 |
Total costs and expenses | 722,023 | 423,545 | 1,654,506 | 1,142,377 |
(Loss) income from operations | (297,963) | 638,186 | (509,986) | 431,866 |
Investment and other income, net | 5,228 | 1,223 | 11,255 | 17,951 |
(Loss) income before income taxes | (292,735) | 639,409 | (498,731) | 449,817 |
Provision for income taxes | 1,112 | 3,242 | 1,112 | 3,242 |
Net (loss) income | $ (293,847) | $ 636,167 | $ (499,843) | $ 446,575 |
Net (loss) income per share - basic (in dollars per share) | $ (1.61) | $ 3.65 | $ (2.75) | $ 2.58 |
Net (loss) income per share - diluted (in dollars per share) | $ (1.61) | $ 3.50 | $ (2.75) | $ 2.47 |
Shares used in computation of per share amounts - basic (in shares) | 182,303 | 174,460 | 181,696 | 173,409 |
Shares used in computation of per share amounts - diluted (in shares) | 182,303 | 181,877 | 181,696 | 180,939 |
Comprehensive (loss) income: | ||||
Net (loss) income | $ (293,847) | $ 636,167 | $ (499,843) | $ 446,575 |
Other comprehensive income (loss): | ||||
Unrealized gain (loss) on securities available-for-sale, net of tax | 37 | (790) | (10) | 441 |
Foreign currency translation (loss) gain | (6) | 172 | 268 | 180 |
Total other comprehensive income (loss) | 31 | (618) | 258 | 621 |
Comprehensive (loss) income | (293,816) | 635,549 | (499,585) | 447,196 |
Net product sales | ||||
Revenues: | ||||
Total revenues | 366,459 | 267,494 | 1,016,385 | 706,473 |
Royalty revenues | ||||
Revenues: | ||||
Total revenues | 41,028 | 35,924 | 104,542 | 87,520 |
Collaboration and license agreement revenues | ||||
Revenues: | ||||
Total revenues | $ 16,573 | $ 758,313 | $ 23,593 | $ 780,250 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Common stock | Additional paid-in capital | Accumulated other comprehensive income | Accumulated deficit |
Beginning (in shares) at Dec. 31, 2019 | 171,994,000 | ||||
Beginning at Dec. 31, 2019 | $ 1,876,287 | $ 172 | $ 3,359,124 | $ 229 | $ (1,483,238) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net (loss) income | (168,402) | (168,402) | |||
Other comprehensive income (loss) | 3,249 | 3,249 | |||
Issuance of common stock for stock option exercises and employee stock purchase plan (in shares) | 575,000 | ||||
Issuance of common stock for stock option exercises and employee stock purchase plan | 21,786 | $ 1 | 21,785 | ||
Restricted stock vested during the period, net (in shares) | 67,000 | ||||
Restricted stock vested during the period, net | 0 | $ 0 | |||
Share-based compensation | 32,698 | 32,698 | |||
Ending (in shares) at Mar. 31, 2020 | 172,636,000 | ||||
Ending at Mar. 31, 2020 | 1,765,618 | $ 173 | 3,413,607 | 3,478 | (1,651,640) |
Beginning (in shares) at Dec. 31, 2019 | 171,994,000 | ||||
Beginning at Dec. 31, 2019 | 1,876,287 | $ 172 | 3,359,124 | 229 | (1,483,238) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net (loss) income | 446,575 | ||||
Other comprehensive income (loss) | 621 | ||||
Ending (in shares) at Sep. 30, 2020 | 175,188,000 | ||||
Ending at Sep. 30, 2020 | 2,258,030 | $ 175 | 3,293,668 | 850 | (1,036,663) |
Beginning (in shares) at Mar. 31, 2020 | 172,636,000 | ||||
Beginning at Mar. 31, 2020 | 1,765,618 | $ 173 | 3,413,607 | 3,478 | (1,651,640) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net (loss) income | (21,190) | (21,190) | |||
Other comprehensive income (loss) | (2,010) | (2,010) | |||
Issuance of common stock for stock option exercises and employee stock purchase plan (in shares) | 858,000 | ||||
Issuance of common stock for stock option exercises and employee stock purchase plan | 31,485 | $ 1 | 31,484 | ||
Restricted stock vested during the period, net (in shares) | 371,000 | ||||
Restricted stock vested during the period, net | 0 | $ 0 | |||
Share-based compensation | 40,174 | 40,174 | |||
Ending (in shares) at Jun. 30, 2020 | 173,865,000 | ||||
Ending at Jun. 30, 2020 | 1,814,077 | $ 174 | 3,485,265 | 1,468 | (1,672,830) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net (loss) income | 636,167 | 636,167 | |||
Other comprehensive income (loss) | (618) | (618) | |||
Premium for commitment to sell common stock | (250,150) | (250,150) | |||
Issuance of common stock for stock option exercises and employee stock purchase plan (in shares) | 427,000 | ||||
Issuance of common stock for stock option exercises and employee stock purchase plan | 19,502 | $ 0 | 19,502 | ||
Restricted stock vested during the period, net (in shares) | 896,000 | ||||
Restricted stock vested during the period, net | 0 | $ 1 | (1) | ||
Share-based compensation | 39,052 | 39,052 | |||
Ending (in shares) at Sep. 30, 2020 | 175,188,000 | ||||
Ending at Sep. 30, 2020 | $ 2,258,030 | $ 175 | 3,293,668 | 850 | (1,036,663) |
Beginning (in shares) at Dec. 31, 2020 | 180,902,000 | 180,902,000 | |||
Beginning at Dec. 31, 2020 | $ 3,488,100 | $ 181 | 4,356,922 | 565 | (869,568) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net (loss) income | (121,420) | (121,420) | |||
Other comprehensive income (loss) | (71) | (71) | |||
Issuance of common stock for stock option exercises and employee stock purchase plan (in shares) | 341,000 | ||||
Issuance of common stock for stock option exercises and employee stock purchase plan | 19,791 | 19,791 | |||
Restricted stock vested during the period, net (in shares) | 80,000 | ||||
Restricted stock vested during the period, net | 0 | $ 0 | |||
Share-based compensation | 38,224 | 38,224 | |||
Ending (in shares) at Mar. 31, 2021 | 181,323,000 | ||||
Ending at Mar. 31, 2021 | $ 3,424,624 | $ 181 | 4,414,937 | 494 | (990,988) |
Beginning (in shares) at Dec. 31, 2020 | 180,902,000 | 180,902,000 | |||
Beginning at Dec. 31, 2020 | $ 3,488,100 | $ 181 | 4,356,922 | 565 | (869,568) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net (loss) income | (499,843) | ||||
Other comprehensive income (loss) | $ 258 | ||||
Ending (in shares) at Sep. 30, 2021 | 182,801,000 | 182,801,000 | |||
Ending at Sep. 30, 2021 | $ 3,164,955 | $ 183 | 4,533,360 | 823 | (1,369,411) |
Beginning (in shares) at Mar. 31, 2021 | 181,323,000 | ||||
Beginning at Mar. 31, 2021 | 3,424,624 | $ 181 | 4,414,937 | 494 | (990,988) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net (loss) income | (84,576) | (84,576) | |||
Other comprehensive income (loss) | 298 | 298 | |||
Issuance of common stock for stock option exercises and employee stock purchase plan (in shares) | 359,000 | ||||
Issuance of common stock for stock option exercises and employee stock purchase plan | 13,201 | $ 1 | 13,200 | ||
Restricted stock vested during the period, net (in shares) | 184,000 | ||||
Restricted stock vested during the period, net | 0 | $ 0 | |||
Share-based compensation | 37,727 | 37,727 | |||
Ending (in shares) at Jun. 30, 2021 | 181,866,000 | ||||
Ending at Jun. 30, 2021 | 3,391,274 | $ 182 | 4,465,864 | 792 | (1,075,564) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net (loss) income | (293,847) | (293,847) | |||
Other comprehensive income (loss) | 31 | 31 | |||
Issuance of common stock for stock option exercises and employee stock purchase plan (in shares) | 384,000 | ||||
Issuance of common stock for stock option exercises and employee stock purchase plan | 22,440 | $ 0 | 22,440 | ||
Restricted stock vested during the period, net (in shares) | 551,000 | ||||
Restricted stock vested during the period, net | 0 | $ 1 | (1) | ||
Share-based compensation | $ 45,057 | 45,057 | |||
Ending (in shares) at Sep. 30, 2021 | 182,801,000 | 182,801,000 | |||
Ending at Sep. 30, 2021 | $ 3,164,955 | $ 183 | $ 4,533,360 | $ 823 | $ (1,369,411) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Operating activities: | ||
Net (loss) income | $ (499,843) | $ 446,575 |
Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities | ||
Share-based compensation | 121,008 | 107,458 |
Depreciation | 30,404 | 26,219 |
Amortization of intangible assets | 17,271 | 10,541 |
Amortization of right-of-use assets | 9,530 | 7,945 |
Amortization of premiums, accretion of discounts, and (gains) losses on debt securities | 14,692 | (426) |
Gains on equity securities | (9,895) | (11,604) |
Changes in operating assets and liabilities | ||
Accounts receivable, net | (62,181) | (57,166) |
Inventories | (65,239) | (10,795) |
Prepaid expenses and other assets | (57,903) | (16,792) |
Lease liability | (10,906) | (8,223) |
Deferred revenue | 0 | 300 |
Other liabilities | 297,438 | 173,392 |
Net cash (used) provided by operating activities | (215,624) | 667,424 |
Investing activities: | ||
Purchases of securities | (2,388,843) | (811,274) |
Proceeds from maturities of securities | 2,715,500 | 587,000 |
Proceeds from sales of securities | 0 | 194,733 |
Purchases of property and equipment | (38,755) | (65,899) |
Net cash provided (used) by investing activities | 287,902 | (95,440) |
Financing activities: | ||
Proceeds from exercise of stock options and employee stock purchase plan | 55,432 | 72,773 |
Net cash provided by financing activities | 55,432 | 72,773 |
Effect of exchange rate changes on cash and cash equivalents | (961) | 135 |
Net increase in cash and cash equivalents | 126,749 | 644,892 |
Cash and cash equivalents at beginning of period | 558,424 | 274,562 |
Cash and cash equivalents at end of period | $ 685,173 | $ 919,454 |
Summary of significant accounti
Summary of significant accounting policies | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Summary of significant accounting policies | Summary of significant accounting policies Basis of presentation The accompanying unaudited condensed consolidated financial statements reflect the accounts of Seagen Inc. and its wholly-owned subsidiaries (collectively “Seagen,” “we,” “our,” or “us”). All 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 have multiple subsidiaries in foreign jurisdictions, including several subsidiaries in Europe. The condensed consolidated balance sheet data as of December 31, 2020 were derived from audited financial statements not included in this quarterly report on Form 10-Q. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission, or SEC, and generally accepted accounting principles in the United States of America, or GAAP, for unaudited condensed consolidated financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The accompanying unaudited condensed consolidated financial statements reflect all adjustments consisting of normal recurring adjustments that, in the opinion of management, are necessary for a fair statement of our financial position and results of our operations as of and for the periods presented. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2020, as filed with the SEC. The preparation of financial statements in accordance with GAAP requires us to make estimates, assumptions, and judgments that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates. The results of our operations for the three and nine month periods ended September 30, 2021 are not necessarily indicative of the results to be expected for the full year or any other interim period. Non-cash activities We had $10.4 million and $6.0 million of accrued capital expenditures as of September 30, 2021 and December 31, 2020, respectively. Accrued capital expenditures are treated as a non-cash investing activity and, accordingly, have not been included in the condensed consolidated statement of cash flows until such amounts have been paid in cash. During the nine months ended September 30, 2021 and 2020, we recorded $7.7 million and $7.0 million, respectively, of right-of-use assets in exchange for lease liabilities, which are treated as a non-cash operating activity. See Note 3 for additional information. Investments We hold certain equity securities which are reported at estimated fai r value based on quoted market prices. Cha nges in the fair value of equity securities are recorded in income or loss. The cost of equity securities for purposes of computing gains and losses is based on the specific identification method. 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 (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 . Accrued interest receivable as of September 30, 2021, was $2.0 million, and was included in prepaid expenses and other current assets. We c lassify 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. Intangible assets, net Our intangible assets are primarily comprised of acquired TUKYSA technology. The following table presents the balances of our finite-lived intangible assets for the periods presented: (dollars in thousands) September 30, 2021 December 31, 2020 Gross carrying value $ 305,650 $ 305,650 Less: accumulated amortization (39,241) (21,970) Total $ 266,409 $ 283,680 The following table presents our amortization expense related to acquired TUKYSA technology costs, included in cost of sales in our condensed consolidated statements of comprehensive income (loss), for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, (dollars in thousands) 2021 2020 2021 2020 Amortization expense $ 5,819 $ 5,805 $ 17,271 $ 10,541 The weighted average remaining useful life of our finite-lived intangible assets was 12 years as of September 30, 2021, and estimated future amortization expense related to acquired TUKYSA is $5.8 million for the three months ending December 31, 2021, and TUKYSA technology costs is $23.1 million for each of the years ending December 31, 2022 through December 31, 2026. Revenue recognition - Net product sales We sell our products primarily through a limited number of specialty distributors and specialty pharmaci es in the U.S. The delivery of our products represents a single performance obligation for these transactions and we record net product sales at the point in time when title and risk of loss pass. The transaction price for net 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. Outside of the U.S., the transaction price for net product sales represents the amount we expect to receive, which is net of estimated discounts, estimated government mandated rebates, distribution fees, estimated product returns, and other deductions. Accruals are established for these deductions, and actual amounts incurred are offset against applicable accruals. These estimates involve judgment in estimating net product sales. 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 our products. 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 payor mix and our experience to-date. We have a Federal Supply Schedule, or FSS, agreement under which certain U.S. government purchasers receive a discount on eligible purchases of our products. 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 our products. Under these agreements, distributors process a chargeback to us for the difference between wholesale acquisition cost and the applicable discounted price. We 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 a specified number of days of its expiration date or that is damaged. We estimate product returns based on our experience to-date using the expected value approach. We provide financial assistance to qualifying patients that are underinsured or cannot cover the cost of commercial coinsurance amounts through our patient support programs. 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. Revenue recognition - Royalty revenues Royalty revenues primarily reflect amounts earned under the ADCETRIS collaboration with Takeda Pharmaceutical Company Limited, or 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 annual net sales tiers. Takeda bears a portion of low single digit third-party royalty costs owed on its sales of ADCETRIS. This amount is included in royalty revenues. Amounts owed to our third-party licensors related to Takeda’s sales of ADCETRIS are recorded in cost of sales. These amounts are recognized in the period in which the related sales by Takeda occur. Royalty revenues also reflect amounts from Genentech, Inc., a member of the Roche Group, or Genentech, earned on net sales of Polivy, and amounts from GlaxoSmithKline earned on net sales of Blenrep. Revenue recognition - Collaboration and license agreement revenues We have collaboration and license agreements for our technology with a number of biotechnology and pharmaceutical companies. Under these agreements, we typically receive or are entitled to receive upfront cash payments and progress- and sales-dependent milestones for the achievement by our licensees 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 technology. Generally, our licensees 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. Since we may not take a substantive role or control the research, development or commercialization of any products generated by some of our licensees, we may not be able to reasonably estimate when, if at all, any potential future milestone payments or royalties may be payable to us by our licensees. As such, the potential future milestone payments associated with certain of our collaboration and license agreements involve a substantial degree of uncertainty. Collaboration and license agreements 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 future reversal of cumulative revenue and, therefore, should be included in the transaction price. 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 collaboration and license agreements, 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 certain collaboration and license agreements is not distinct from the perspective of our customers at the time of initial transfer, since we often 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 may 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 certain collaboration and license agreements as evaluated at contract inception were not distinct and represented a single performance obligation. For those agreements, 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. For agreements beyond the initial performance period, we have no remaining performance obligations. We may receive license maintenance fees and potential milestones and royalties based on collaborator development and regulatory progress, which are recorded in the period achieved in the case of milestones, and during the period of the related sales for royalties. When no performance obligations are required of us, or following the completion of the performance obligation period, such amounts are recognized 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. Recent accounting pronouncements adopted In December 2019, the Financial Accounting Standards Board, or FASB, issued “ASU 2019-12, Simplifying the Accounting for Income Taxes.” The objective of the standard is to improve areas of GAAP by removing certain exceptions permitted by ASC Topic 740-- Income Taxes and clarifying existing guidance to facilitate consistent application. We adopted the standard on January 1, 2021. The adoption of this ASU does not have a material impact on our financial condition, results of operations, cash flows, or financial statement disclosures. |
Revenue from contracts with cus
Revenue from contracts with customers | 9 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from contracts with customers | Revenue from contracts with customers Our primary market in which we record our product revenues is the U.S. Royalty revenues primarily reflect royalties earned under the ADCETRIS collaboration with Takeda. The following table presents our disaggregated revenue for the periods presented. In September 2021, we received FDA accelerated approval of TIVDAK for the treatment of adult patients with recurrent or metastatic cervical cancer with disease progression on or after chemotherapy. Three Months Ended September 30, Nine Months Ended September 30, (dollars in thousands) 2021 2020 2021 2020 ADCETRIS $ 184,791 $ 163,263 $ 529,275 $ 494,851 PADCEV 95,031 61,849 247,194 153,485 TUKYSA 86,571 42,382 239,850 58,137 TIVDAK 66 — 66 — Net product sales $ 366,459 $ 267,494 $ 1,016,385 $ 706,473 Royalty revenues $ 41,028 $ 35,924 $ 104,542 $ 87,520 Merck $ 541 $ 725,000 $ 541 $ 725,000 Takeda 1,037 7,013 2,888 22,925 Other 14,995 26,300 20,164 32,325 Collaboration and license agreement revenues $ 16,573 $ 758,313 $ 23,593 $ 780,250 Total revenues $ 424,060 $ 1,061,731 $ 1,144,520 $ 1,574,243 We estimate an allowance for doubtful accounts based on our assessment of the collectability of customer accounts. We regularly review the allowance by considering factors such as historical experience, credit quality, the age of the accounts receivable balances, and current economic conditions that may affect a customer’s ability to pay. We did not recognize any credit losses during any of the periods presented. Merck LV and TUKYSA license and collaboration agreements, and stock purchase agreement In September 2020, we entered into two license and collaboration agreements, and a stock purchase agreement, with subsidiaries of Merck. Under one of the license and collaboration agreements, referred to as the LV Agreement, we are pursuing a broad joint development program evaluating ladiratuzumab vedotin, or LV, as monotherapy and in combination with Merck’s anti-PD-1 therapy KEYTRUDA® (pembrolizumab) in triple-negative breast cancer, hormone receptor-positive breast cancer and other LIV-1-expressing solid tumors. Pursuant to the LV Agreement, we granted to Merck a co-exclusive worldwide development and commercialization license for LV, and agreed to jointly develop and commercialize LV on a worldwide basis. We received an upfront cash payment of $600.0 million, and we are eligible to receive up to $850.0 million in milestone payments upon the initiation of certain clinical trials and regulatory approval in certain major markets, and up to an additional $1.75 billion in milestone payments upon the achievement of specified annual global net sales thresholds of LV. Each company is responsible for 50% of global costs to develop and commercialize LV and will receive 50% of potential future profits. In connection with the LV Agreement, we entered into a stock purchase agreement with Merck, referred to as the Purchase Agreement, pursuant to which we agreed to issue and sell, and Merck agreed to purchase 5,000,000 newly-issued shares of our common stock, at a purchase price of $200 per share, for an aggregate purchase price of $1.0 billion. Under the other license and collaboration agreement, referred to as the TUKYSA Agreement, we granted Merck exclusive rights to commercialize TUKYSA in Asia, the Middle East and Latin America and other regions outside of the U.S., Canada and Europe. Pursuant to the TUKYSA Agreement, Merck is responsible for marketing applications for approval in its territory, supported by the positive results from the HER2CLIMB clinical trial. We retained commercial rights in the U.S., Canada and Europe, where we will record sales. Merck is also co-funding a portion of the TUKYSA global development plan, which encompasses several ongoing and planned trials across HER2-positive cancers. We will continue to lead ongoing TUKYSA global development operational execution. Merck will solely fund and conduct country-specific clinical trials necessary to support anticipated regulatory applications in its territories. We received an upfront cash payment from Merck of $125.0 million and also received $85.0 million in prepaid research and development funding to be applied to Merck’s global development cost sharing obligations. We are eligible to receive progress-dependent milestone payments of up to $65.0 million, and are entitled to receive tiered royalties on sales of TUKYSA by Merck that begin in the low twenty percent range and escalate based sales volume by Merck in its territory. We determined that these agreements are within the scope of ASC 808. Pursuant to ASC 808, we considered other authoritative guidance for distinct units of account related to these agreements, including ASC 606. Our performance obligations within the scope of ASC 606 consisted of the delivery of the LV license and transfer of regulatory information to enable the LV collaboration, the delivery of the TUKYSA license and transfer of regulatory materials for use by Merck in its territory, and supply of commercial TUKYSA inventory to Merck for use in its territory. The LV license and TUKYSA license are functional intellectual property and distinct from the other promises made under the contract. Since we also determined that Merck can benefit from the LV license and the TUKYSA licenses at the time of conveyance, the related performance obligations were satisfied at that point in time. Therefore, we recognized the license revenue under ASC 606 of $725.0 million in collaboration and license agreement revenues during the three and nine months ended September 30, 2020. Potential development, regulatory, and sales-based milestones, and royalties, will be accounted for as variable transaction price related to the LV or TUKYSA licenses under ASC 606. Given the uncertain nature of these payments, we determined they were fully constrained upon entering the agreements and not included in the transaction price. We will re-evaluate the transaction price at each reporting period and as uncertain events are resolved or other changes in circumstances occur. We and Merck will share equally in LV global development costs and profits, if any, and Merck is co-funding a portion of the TUKYSA global development plan. We consider the collaborative activities associated with the global development and commercialization of LV, and the global development of TUKYSA, to be units of account within the scope of ASC 808. We recognize development cost sharing proportionately with the performance of the underlying activities, and record Merck’s reimbursement of our expenses as a reduction of research and development expenses. Reimbursements from Merck for the LV Agreement and TUKYSA Agreement were not material during the three and nine months ended September 30, 2020. Merck’s prepayment of $85.0 million towards the TUKYSA global development plan was recorded as a co-development liability in other long-term liabilities on our condensed consolidated balance sheet as of September 30, 2020. As joint development expenses are incurred, we recognize the portion of Merck’s prepayment as a reduction of our research and development expenses on our condensed consolidated statements of comprehensive income (loss). As of September 30, 2021, $63.8 million was recorded as the remaining co-development liability. Sales of TUKYSA drug product supplied to Merck were included in collaboration and license agreement revenues. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2021 | |
Leases [Abstract] | |
Leases | Leases Our current operating leases for our office and laboratory facilities with terms that expire from 2022 through 2029. During the nine months ended September 30, 2021 and 2020, we recorded $7.7 million and $7.0 million of right-of-use assets in exchange for lease liabilities, respectively. All of our significan t leases include options for us to extend the lease term. None of our options to extend the rental term of any existing leases were considered reasonably certain as of September 30, 2021. In June 2021, we entered into a lease agreement for an approximately 258,000 square feet building complex to be constructed by the landlord on approximately 20.5 acres of land in Everett, Washington. We intend to use the building for future manufacturing, laboratory, and office space. Under the terms of the lease, base rent is payable at an initial rate of $4.0 million per year, subject to annual escalations of 3% during the initial term of 20 years. The lease commences on the date when construction and delivery of the building shell and related improvements by the landlord have been substantially completed. We will record a lease liability and right-of-use assets on our condensed consolidated balance sheet on the lease commencement date. We have an option to renew the lease for two additional terms of ten years each. In addition, we have an option to purchase the premises in the future. Supplemental information for lease amounts recognized in our condensed consolidated financial statements was as follows: Three Months Ended September 30, Nine Months Ended September 30, (dollars in thousands) 2021 2020 2021 2020 Operating lease cost $ 4,070 $ 3,832 $ 12,147 $ 10,967 Variable lease cost 1,052 998 3,190 2,972 Total lease cost $ 5,122 $ 4,830 $ 15,337 $ 13,939 Cash paid for amounts included in measurement of lease liabilities $ 4,372 $ 3,327 $ 12,429 $ 10,223 As of September 30, 2021 2020 Weighted average remaining lease term 6.1 years 6.3 years Weighted average discount rate 5.1 % 5.2 % Lease liabilities were recorded in the following captions of our condensed consolidated balance sheet as follows: (dollars in thousands) September 30, 2021 December 31, 2020 Accrued liabilities and other $ 13,760 $ 12,749 Operating lease liabilities, long-term 58,878 61,884 Total $ 72,638 $ 74,633 |
Net (loss) income per share
Net (loss) income per share | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Net (loss) income per share | Net (loss) income per shareBasic net income (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares and dilutive potential common shares outstanding during the period. Dilutive potential common shares include incremental common shares issuable upon the vesting of unvested restricted stock units and the exercise of outstanding stock options, calculated using the treasury stock method. Three Months Ended September 30, Nine Months Ended September 30, (dollars in thousands, except per share amounts) 2021 2020 2021 2020 Net (loss) income $ (293,847) $ 636,167 $ (499,843) $ 446,575 Shares used in computation of per share amounts - basic 182,303 174,460 181,696 173,409 Dilutive potential common shares — 7,417 — 7,530 Weighted average common shares outstanding - diluted 182,303 181,877 181,696 180,939 Net (loss) income per share - basic $ (1.61) $ 3.65 $ (2.75) $ 2.58 Net (loss) income per share - diluted $ (1.61) $ 3.50 $ (2.75) $ 2.47 We excluded the potential shares of common stock from the computation of diluted net income (loss) per share because their effect would have been antidilutive. The following table presents the weighted average number of shares that have been excluded for all periods presented: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2021 2020 2021 2020 Stock options and RSUs 10,361 437 10,271 310 |
Fair value
Fair value | 9 Months Ended |
Sep. 30, 2021 | |
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 assets carried at fair value and measured on a recurring basis was as follows: Fair value measurement using: (dollars in thousands) Quoted prices Other Significant Total September 30, 2021 Short-term investments—U.S. Treasury securities $ 1,751,201 $ — $ — $ 1,751,201 Other non-current assets—equity securities 19,161 — — 19,161 Total $ 1,770,362 $ — $ — $ 1,770,362 December 31, 2020 Short-term investments—U.S. Treasury securities $ 2,000,996 $ — $ — $ 2,000,996 Long-term investments—U.S. Treasury securities 100,830 — — 100,830 Total $ 2,101,826 $ — $ — $ 2,101,826 Our short- and long-term debt investments portfolio only contains investments in U.S. Treasury and other U.S. government-backed securities. We review our portfolio based on the underlying risk profile of the securities and have a zero loss expectation for these investments. We also regularly review the securities in an unrealized loss position and evaluate the current expected credit loss by considering factors such as historical experience, market data, issuer-specific factors, and current economic conditions. During the three and nine months ended September 30, 2021 and 2020, we recognized no year-to-date credit loss related to our short- and long-term investments, and had no allowance for credit loss recorded as of September 30, 2021 or December 31, 2020. Our debt securities consisted of the following: (dollars in thousands) Amortized Gross Gross Fair September 30, 2021 U.S. Treasury securities $ 1,751,186 $ 46 $ (31) $ 1,751,201 Contractual maturities (at date of purchase): Due in one year or less $ 1,550,559 $ 1,550,536 Due in one to two years 200,627 200,665 Total $ 1,751,186 $ 1,751,201 December 31, 2020 U.S. Treasury securities $ 2,101,801 $ 259 $ (234) $ 2,101,826 Contractual maturities (at date of purchase): Due in one year or less $ 1,791,399 $ 1,791,239 Due in one to two years 310,402 310,587 Total $ 2,101,801 $ 2,101,826 |
Investment and other income, ne
Investment and other income, net | 9 Months Ended |
Sep. 30, 2021 | |
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: Three Months Ended September 30, Nine Months Ended September 30, (dollars in thousands) 2021 2020 2021 2020 Gain on equity securities $ 4,966 $ — $ 9,895 $ 11,604 Investment and other income, net 262 1,223 1,360 6,347 Total investment and other income, net $ 5,228 $ 1,223 $ 11,255 $ 17,951 Gain on equity securities includes the realized and unrealized holding gains and losses on our equity securities. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consisted of the following: (dollars in thousands) September 30, 2021 December 31, 2020 Raw materials $ 139,822 $ 99,049 Finished goods 41,553 17,087 Total $ 181,375 $ 116,136 We capitalize our commercial inventory costs. Inventory that is deployed into clinical, research or development use is charged to research and development expense when it is no longer available for use in commercial sales. |
Accrued liabilities
Accrued liabilities | 9 Months Ended |
Sep. 30, 2021 | |
Payables and Accruals [Abstract] | |
Accrued liabilities | Accrued liabilities Accrued liabilities consisted of the following: (dollars in thousands) September 30, 2021 December 31, 2020 Employee compensation and benefits $ 104,178 $ 96,902 Clinical trial and related costs 107,408 69,756 Technology acquisition fee 200,000 — Gross-to-net deductions and third-party royalties 68,907 52,565 Other 107,984 90,848 Total $ 588,477 $ 310,071 |
Share-based compensation
Share-based compensation | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Share-based compensation | Share-based compensation The following table presents our total share-based compensation expense for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, (dollars in thousands) 2021 2020 2021 2020 Research and development $ 20,991 $ 20,112 $ 55,187 $ 54,263 Selling, general and administrative 24,066 18,940 65,821 53,195 Total share-based compensation expense $ 45,057 $ 39,052 $ 121,008 $ 107,458 As of September 30, 2021 , there was $267.2 million of unrecognized compensation cost related to unvested options and restricted stock unit awards, excluding our LTIPs and performance-based awards, net of forfeitures. T he estimated unrecognized compensation expense related to our performance-based LTIPs was approximately $78 million as of September 30, 2021 . In September 2021, an LTIP milestone was achieved related to FDA approval of TIVDAK, which triggered a cash payment and an RSU grant to eligible participants. |
RemeGen license agreement
RemeGen license agreement | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
RemeGen License Agreement | RemeGen license agreement Effective in September 2021, we and RemeGen Co., Ltd., or RemeGen, entered into an exclusive worldwide licensing agreement to develop and commercialize disitamab vedotin, a novel HER2-targeted ADC. Disitamab vedotin combines the drug-linker technology originally developed by us with RemeGen’s novel HER2 antibody. Disitamab vedotin received FDA Breakthrough Therapy designation in 2020 for use in second-line treatment of patients with HER2-expressing, locally advanced or metastatic urothelial cancer who have previously received platinum-containing chemotherapy. Also in 2020, RemeGen announced FDA’s clearance of an Investigational New Drug application for a phase II clinical trial in locally advanced or metastatic urothelial cancer. Disitamab vedotin is conditionally approved for treating locally advanced metastatic gastric cancer in China, and in July 2021 the National Medical Products Administration of China also accepted a New Drug Application for disitamab vedotin in locally advanced or metastatic urothelial cancer. Under the terms of the agreement, we obtained exclusive license rights to disitamab vedotin for global development and commercialization outside of RemeGen’s territory for an upfront payment of $200.0 million. RemeGen retains development and commercialization rights for Asia, excluding Japan and Singapore. We will lead global development and RemeGen will fund and operationalize the portion of global clinical trials attributable to its territory. RemeGen will also be responsible for all clinical development and regulatory submissions specific to its territory. We will pay RemeGen up to $195.0 million in potential milestone payments across multiple indications and products based upon the achievement of specified development goals, and up to $2.2 billion in potential milestone payments based on the achievement of specified regulatory and commercialization goals. RemeGen will be entitled to a tiered, high single digit to mid-teen percentage royalty based on net sales of disitamab vedotin in our territory. As of September 30, 2021, we recorded $200.0 million in accrued liabilities in our condensed consolidated balance sheet for the upfront payment owed to RemeGen pursuant to the license agreement. The license was accounted for as an asset acquisition and the upfront payment was included in research and development expenses for the three and nine months ended September 30, 2021. The amount was paid to RemeGen in October 2021. |
Income taxes
Income taxes | 9 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Income taxes | Income taxes For the three and nine months ended September 30, 2021, we recorded an income tax provision of $1.1 million, primarily related to the generation of taxable profits in foreign jurisdictions as a result of our global expansion. For the nine months ended September 30, 2021, our effective tax rate of approximately 0.2% differed from the federal statutory rate primarily because we have provided a valuation allowance against substantially all our deferred tax assets. For the three and nine months ended September 30, 2020, we recorded an income tax provision of $3.2 million. The income tax provision recorded was related to estimated state tax liabilities, for which there were limitations on the use of existing state carryforwards against estimated taxable income. We had existing federal tax carryforwards sufficient to offset estimated taxable income. Our effective tax rate of approximately 1% differed from the federal statutory rate primarily because we had provided a valuation allowance against substantially all our deferred tax assets for all periods presented. Included in the estimated effective tax rate for 2020, we had forecasted a valuation allowance release due to the expected utilization of tax attributes in 2020. It also reflected a discrete benefit of $52.1 million primarily offset by a valuation allowance release for stock-based compensation windfalls during the nine months ended September 30, 2020. We have provided a valuation allowance against substantially all our deferred tax assets because, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized in the future. |
Legal matters
Legal matters | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal matters | Legal matters We are engaged in multiple legal disputes with Daiichi Sankyo Co. Ltd., or Daiichi Sankyo. Dispute over ownership of intellectual property We are in a dispute with Daiichi Sankyo regarding the ownership of certain technology used by Daiichi Sankyo in its cancer drug ENHERTU and certain product candidates. We believe that the linker and other ADC technology used in ENHERTU and these drug candidates are improvements to our ADC technology, the ownership of which we contend was assigned to us under the terms of a 2008 collaboration agreement between us and Daiichi Sankyo. On November 12, 2019, we submitted an arbitration demand to the American Arbitration Association seeking, among other remedies, a declaration that we are the owner of the intellectual property rights under dispute, monetary damages, and a running royalty. On April 27, 2020, the arbitrator confirmed the dispute should be resolved in arbitration. The arbitration hearing was conducted in June 2021, and a decision is expected later this year. On November 4, 2019, Daiichi Sankyo filed a declaratory judgment action in the United States District Court for the District of Delaware, alleging that we are not entitled to the intellectual property rights under dispute, in an attempt to have the dispute adjudicated in federal court. The case has been stayed and administratively closed by court order. Patent infringement On October 19, 2020, we filed a complaint in the United States District Court for the Eastern District of Texas to commence an action for infringement of our U.S. Patent No. 10,808,039, or the '039 Patent, by Daiichi Sankyo’s importation into, offer for sale, sale, and use in the United States of the cancer drug ENHERTU. This action is seeking, among other remedies, a judgment that Daiichi Sankyo infringed one or more valid and enforceable claims of the '039 Patent, monetary damages and a running royalty. Daiichi Sankyo (as well as Daiichi Sankyo, Inc. and AstraZeneca Pharmaceuticals, LP, or AstraZeneca) subsequently filed an action on November 13, 2020 in the U.S. District Court for the District of Delaware seeking a declaratory judgment that ENHERTU does not infringe the ‘039 Patent. The Delaware action has been stayed by court order. Daiichi Sankyo, Inc. and AstraZeneca also filed two Petitions for Post-Grant Review on December 23, 2020 and January 22, 2021 with the U.S. Patent Office seeking to have claims of the ‘039 Patent cancelled as unpatentable. On June 24, 2021, the U.S. Patent Office issued a decision denying both Petitions for Post-Grant Review. The trial in the patent infringement case in Texas is scheduled to begin on April 4, 2022. As a result of these disputes, we have incurred and will continue to incur litigation expenses. In addition, from time to time, we may become involved in other 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 and our contractual rights. These proceedings are costly and time consuming, and they may subject us to claims which may result in liabilities or require us to take or refrain from certain actions. 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. |
Summary of significant accoun_2
Summary of significant accounting policies (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation The accompanying unaudited condensed consolidated financial statements reflect the accounts of Seagen Inc. and its wholly-owned subsidiaries (collectively “Seagen,” “we,” “our,” or “us”). All 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 have multiple subsidiaries in foreign jurisdictions, including several subsidiaries in Europe. The condensed consolidated balance sheet data as of December 31, 2020 were derived from audited financial statements not included in this quarterly report on Form 10-Q. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission, or SEC, and generally accepted accounting principles in the United States of America, or GAAP, for unaudited condensed consolidated financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The accompanying unaudited condensed consolidated financial statements reflect all adjustments consisting of normal recurring adjustments that, in the opinion of management, are necessary for a fair statement of our financial position and results of our operations as of and for the periods presented. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2020, as filed with the SEC. The preparation of financial statements in accordance with GAAP requires us to make estimates, assumptions, and judgments that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates. The results of our operations for the three and nine month periods ended September 30, 2021 are not necessarily indicative of the results to be expected for the full year or any other interim period. |
Non-cash activities | Non-cash activities We had $10.4 million and $6.0 million of accrued capital expenditures as of September 30, 2021 and December 31, 2020, respectively. Accrued capital expenditures are treated as a non-cash investing activity and, accordingly, have not been included in the condensed consolidated statement of cash flows until such amounts have been paid in cash. During the nine months ended September 30, 2021 and 2020, we recorded $7.7 million and $7.0 million, respectively, of right-of-use assets in exchange for lease liabilities, which are treated as a non-cash operating activity. See Note 3 for additional information. |
Investments | Investments We hold certain equity securities which are reported at estimated fai r value based on quoted market prices. Cha nges in the fair value of equity securities are recorded in income or loss. The cost of equity securities for purposes of computing gains and losses is based on the specific identification method. 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 (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 . Accrued interest receivable as of September 30, 2021, was $2.0 million, and was included in prepaid expenses and other current assets. We c lassify 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. |
Intangible assets, net | Intangible assets, netOur intangible assets are primarily comprised of acquired TUKYSA technology. |
Revenue recognition - Net product sales | Revenue recognition - Net product sales We sell our products primarily through a limited number of specialty distributors and specialty pharmaci es in the U.S. The delivery of our products represents a single performance obligation for these transactions and we record net product sales at the point in time when title and risk of loss pass. The transaction price for net 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. Outside of the U.S., the transaction price for net product sales represents the amount we expect to receive, which is net of estimated discounts, estimated government mandated rebates, distribution fees, estimated product returns, and other deductions. Accruals are established for these deductions, and actual amounts incurred are offset against applicable accruals. These estimates involve judgment in estimating net product sales. 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 our products. 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 payor mix and our experience to-date. We have a Federal Supply Schedule, or FSS, agreement under which certain U.S. government purchasers receive a discount on eligible purchases of our products. 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 our products. Under these agreements, distributors process a chargeback to us for the difference between wholesale acquisition cost and the applicable discounted price. We 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 a specified number of days of its expiration date or that is damaged. We estimate product returns based on our experience to-date using the expected value approach. We provide financial assistance to qualifying patients that are underinsured or cannot cover the cost of commercial coinsurance amounts through our patient support programs. 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. Revenue recognition - Royalty revenues Royalty revenues primarily reflect amounts earned under the ADCETRIS collaboration with Takeda Pharmaceutical Company Limited, or 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 annual net sales tiers. Takeda bears a portion of low single digit third-party royalty costs owed on its sales of ADCETRIS. This amount is included in royalty revenues. Amounts owed to our third-party licensors related to Takeda’s sales of ADCETRIS are recorded in cost of sales. These amounts are recognized in the period in which the related sales by Takeda occur. Royalty revenues also reflect amounts from Genentech, Inc., a member of the Roche Group, or Genentech, earned on net sales of Polivy, and amounts from GlaxoSmithKline earned on net sales of Blenrep. Revenue recognition - Collaboration and license agreement revenues We have collaboration and license agreements for our technology with a number of biotechnology and pharmaceutical companies. Under these agreements, we typically receive or are entitled to receive upfront cash payments and progress- and sales-dependent milestones for the achievement by our licensees 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 technology. Generally, our licensees 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. Since we may not take a substantive role or control the research, development or commercialization of any products generated by some of our licensees, we may not be able to reasonably estimate when, if at all, any potential future milestone payments or royalties may be payable to us by our licensees. As such, the potential future milestone payments associated with certain of our collaboration and license agreements involve a substantial degree of uncertainty. Collaboration and license agreements 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 future reversal of cumulative revenue and, therefore, should be included in the transaction price. 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 collaboration and license agreements, 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 certain collaboration and license agreements is not distinct from the perspective of our customers at the time of initial transfer, since we often 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 may 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 certain collaboration and license agreements as evaluated at contract inception were not distinct and represented a single performance obligation. For those agreements, 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. For agreements beyond the initial performance period, we have no remaining performance obligations. We may receive license maintenance fees and potential milestones and royalties based on collaborator development and regulatory progress, which are recorded in the period achieved in the case of milestones, and during the period of the related sales for royalties. When no performance obligations are required of us, or following the completion of the performance obligation period, such amounts are recognized 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. |
Recent accounting pronouncements adopted | Recent accounting pronouncements adopted In December 2019, the Financial Accounting Standards Board, or FASB, issued “ASU 2019-12, Simplifying the Accounting for Income Taxes.” The objective of the standard is to improve areas of GAAP by removing certain exceptions permitted by ASC Topic 740-- Income Taxes and clarifying existing guidance to facilitate consistent application. We adopted the standard on January 1, 2021. The adoption of this ASU does not have a material impact on our financial condition, results of operations, cash flows, or financial statement disclosures. |
Summary of significant accoun_3
Summary of significant accounting policies (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Schedule of finite-lived intangible assets | The following table presents the balances of our finite-lived intangible assets for the periods presented: (dollars in thousands) September 30, 2021 December 31, 2020 Gross carrying value $ 305,650 $ 305,650 Less: accumulated amortization (39,241) (21,970) Total $ 266,409 $ 283,680 |
Schedule of amortization expense | The following table presents our amortization expense related to acquired TUKYSA technology costs, included in cost of sales in our condensed consolidated statements of comprehensive income (loss), for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, (dollars in thousands) 2021 2020 2021 2020 Amortization expense $ 5,819 $ 5,805 $ 17,271 $ 10,541 |
Revenue from contracts with c_2
Revenue from contracts with customers (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Collaboration and License Agreement Revenues by Collaborator | The following table presents our disaggregated revenue for the periods presented. In September 2021, we received FDA accelerated approval of TIVDAK for the treatment of adult patients with recurrent or metastatic cervical cancer with disease progression on or after chemotherapy. Three Months Ended September 30, Nine Months Ended September 30, (dollars in thousands) 2021 2020 2021 2020 ADCETRIS $ 184,791 $ 163,263 $ 529,275 $ 494,851 PADCEV 95,031 61,849 247,194 153,485 TUKYSA 86,571 42,382 239,850 58,137 TIVDAK 66 — 66 — Net product sales $ 366,459 $ 267,494 $ 1,016,385 $ 706,473 Royalty revenues $ 41,028 $ 35,924 $ 104,542 $ 87,520 Merck $ 541 $ 725,000 $ 541 $ 725,000 Takeda 1,037 7,013 2,888 22,925 Other 14,995 26,300 20,164 32,325 Collaboration and license agreement revenues $ 16,573 $ 758,313 $ 23,593 $ 780,250 Total revenues $ 424,060 $ 1,061,731 $ 1,144,520 $ 1,574,243 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Leases [Abstract] | |
Components of Lease Cost and Cash Flows | Supplemental information for lease amounts recognized in our condensed consolidated financial statements was as follows: Three Months Ended September 30, Nine Months Ended September 30, (dollars in thousands) 2021 2020 2021 2020 Operating lease cost $ 4,070 $ 3,832 $ 12,147 $ 10,967 Variable lease cost 1,052 998 3,190 2,972 Total lease cost $ 5,122 $ 4,830 $ 15,337 $ 13,939 Cash paid for amounts included in measurement of lease liabilities $ 4,372 $ 3,327 $ 12,429 $ 10,223 As of September 30, 2021 2020 Weighted average remaining lease term 6.1 years 6.3 years Weighted average discount rate 5.1 % 5.2 % |
Summary of Balance Sheet Information | Lease liabilities were recorded in the following captions of our condensed consolidated balance sheet as follows: (dollars in thousands) September 30, 2021 December 31, 2020 Accrued liabilities and other $ 13,760 $ 12,749 Operating lease liabilities, long-term 58,878 61,884 Total $ 72,638 $ 74,633 |
Net (loss) income per share (Ta
Net (loss) income per share (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Net Income (Loss) Per Share | Dilutive potential common shares include incremental common shares issuable upon the vesting of unvested restricted stock units and the exercise of outstanding stock options, calculated using the treasury stock method. Three Months Ended September 30, Nine Months Ended September 30, (dollars in thousands, except per share amounts) 2021 2020 2021 2020 Net (loss) income $ (293,847) $ 636,167 $ (499,843) $ 446,575 Shares used in computation of per share amounts - basic 182,303 174,460 181,696 173,409 Dilutive potential common shares — 7,417 — 7,530 Weighted average common shares outstanding - diluted 182,303 181,877 181,696 180,939 Net (loss) income per share - basic $ (1.61) $ 3.65 $ (2.75) $ 2.58 Net (loss) income per share - diluted $ (1.61) $ 3.50 $ (2.75) $ 2.47 |
Schedule of Weighted Average Number of Shares | The following table presents the weighted average number of shares that have been excluded for all periods presented: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2021 2020 2021 2020 Stock options and RSUs 10,361 437 10,271 310 |
Fair value (Tables)
Fair value (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Summary of Fair Value Hierarchy of Assets Carried at Fair Value and Measured on a Recurring Basis | The fair value hierarchy of assets carried at fair value and measured on a recurring basis was as follows: Fair value measurement using: (dollars in thousands) Quoted prices Other Significant Total September 30, 2021 Short-term investments—U.S. Treasury securities $ 1,751,201 $ — $ — $ 1,751,201 Other non-current assets—equity securities 19,161 — — 19,161 Total $ 1,770,362 $ — $ — $ 1,770,362 December 31, 2020 Short-term investments—U.S. Treasury securities $ 2,000,996 $ — $ — $ 2,000,996 Long-term investments—U.S. Treasury securities 100,830 — — 100,830 Total $ 2,101,826 $ — $ — $ 2,101,826 |
Summary of Debt Securities | Our debt securities consisted of the following: (dollars in thousands) Amortized Gross Gross Fair September 30, 2021 U.S. Treasury securities $ 1,751,186 $ 46 $ (31) $ 1,751,201 Contractual maturities (at date of purchase): Due in one year or less $ 1,550,559 $ 1,550,536 Due in one to two years 200,627 200,665 Total $ 1,751,186 $ 1,751,201 December 31, 2020 U.S. Treasury securities $ 2,101,801 $ 259 $ (234) $ 2,101,826 Contractual maturities (at date of purchase): Due in one year or less $ 1,791,399 $ 1,791,239 Due in one to two years 310,402 310,587 Total $ 2,101,801 $ 2,101,826 |
Investment and other income, _2
Investment and other income, net (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of Investment and Other Income, Net | Investment and other income, net consisted of the following: Three Months Ended September 30, Nine Months Ended September 30, (dollars in thousands) 2021 2020 2021 2020 Gain on equity securities $ 4,966 $ — $ 9,895 $ 11,604 Investment and other income, net 262 1,223 1,360 6,347 Total investment and other income, net $ 5,228 $ 1,223 $ 11,255 $ 17,951 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories consisted of the following: (dollars in thousands) September 30, 2021 December 31, 2020 Raw materials $ 139,822 $ 99,049 Finished goods 41,553 17,087 Total $ 181,375 $ 116,136 |
Accrued liabilities (Tables)
Accrued liabilities (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | Accrued liabilities consisted of the following: (dollars in thousands) September 30, 2021 December 31, 2020 Employee compensation and benefits $ 104,178 $ 96,902 Clinical trial and related costs 107,408 69,756 Technology acquisition fee 200,000 — Gross-to-net deductions and third-party royalties 68,907 52,565 Other 107,984 90,848 Total $ 588,477 $ 310,071 |
Share-based compensation (Table
Share-based compensation (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Share-based Compensation | The following table presents our total share-based compensation expense for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, (dollars in thousands) 2021 2020 2021 2020 Research and development $ 20,991 $ 20,112 $ 55,187 $ 54,263 Selling, general and administrative 24,066 18,940 65,821 53,195 Total share-based compensation expense $ 45,057 $ 39,052 $ 121,008 $ 107,458 |
Summary of significant accoun_4
Summary of significant accounting policies (Details) $ in Millions | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2021USD ($)segment | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($) | |
Summary Of Significant Accounting Policies [Line Items] | |||
Number of reporting segments | segment | 1 | ||
Accrued capital expenditures | $ 10.4 | $ 6 | |
Right-of-use assets in exchange for lease liabilities | 7.7 | $ 7 | |
Accrued interest receivable | 2 | ||
Estimated future amortization expense, remainder of fiscal year | 5.8 | ||
Estimated future amortization expense, 2022 | 23.1 | ||
Estimated future amortization expense, 2023 | 23.1 | ||
Estimated future amortization expense, 2024 | 23.1 | ||
Estimated future amortization expense, 2025 | 23.1 | ||
Estimated future amortization expense, 2026 | $ 23.1 | ||
Weighted Average | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Intangible asset useful life | 12 years |
Summary of significant accoun_5
Summary of significant accounting policies - Finite-lived intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Accounting Policies [Abstract] | ||
Gross carrying value | $ 305,650 | $ 305,650 |
Less: accumulated amortization | (39,241) | (21,970) |
Total | $ 266,409 | $ 283,680 |
Summary of significant accoun_6
Summary of significant accounting policies - Amortization Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Accounting Policies [Abstract] | ||||
Amortization expense | $ 5,819 | $ 5,805 | $ 17,271 | $ 10,541 |
Revenue from contracts with c_3
Revenue from contracts with customers - Summary of Collaboration and License Agreement Revenues by Collaborator (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Collaboration and license agreement revenues | $ 424,060 | $ 1,061,731 | $ 1,144,520 | $ 1,574,243 |
Net product sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Collaboration and license agreement revenues | 366,459 | 267,494 | 1,016,385 | 706,473 |
Net product sales | ADCETRIS | ||||
Disaggregation of Revenue [Line Items] | ||||
Collaboration and license agreement revenues | 184,791 | 163,263 | 529,275 | 494,851 |
Net product sales | PADCEV | ||||
Disaggregation of Revenue [Line Items] | ||||
Collaboration and license agreement revenues | 95,031 | 61,849 | 247,194 | 153,485 |
Net product sales | TUKYSA | ||||
Disaggregation of Revenue [Line Items] | ||||
Collaboration and license agreement revenues | 86,571 | 42,382 | 239,850 | 58,137 |
Net product sales | TIVDAK | ||||
Disaggregation of Revenue [Line Items] | ||||
Collaboration and license agreement revenues | 66 | 0 | 66 | 0 |
Royalty revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Collaboration and license agreement revenues | 41,028 | 35,924 | 104,542 | 87,520 |
Collaboration and license agreement revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Collaboration and license agreement revenues | 16,573 | 758,313 | 23,593 | 780,250 |
Collaboration and license agreement revenues | Merck | ||||
Disaggregation of Revenue [Line Items] | ||||
Collaboration and license agreement revenues | 541 | 725,000 | 541 | 725,000 |
Collaboration and license agreement revenues | Takeda | ||||
Disaggregation of Revenue [Line Items] | ||||
Collaboration and license agreement revenues | 1,037 | 7,013 | 2,888 | 22,925 |
Collaboration and license agreement revenues | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Collaboration and license agreement revenues | $ 14,995 | $ 26,300 | $ 20,164 | $ 32,325 |
Revenue from contracts with c_4
Revenue from contracts with customers - Additional Information (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Oct. 31, 2020USD ($)$ / sharesshares | Sep. 30, 2020USD ($)agreement | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($)agreement | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($)agreement | |
Disaggregation of Revenue [Line Items] | ||||||
Bad debt expense | $ 0 | $ 0 | $ 0 | $ 0 | ||
Shares issued (in shares) | shares | 5,000,000 | |||||
Price per share (in dollars per share) | $ / shares | $ 200 | |||||
Proceeds from sale of stock | $ 1,000,000,000 | |||||
Collaboration and license agreement revenues | 424,060,000 | 1,061,731,000 | 1,144,520,000 | 1,574,243,000 | ||
Fair value of shares issued | $ 749,900,000 | |||||
Collaboration and license agreement revenues | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Collaboration and license agreement revenues | 16,573,000 | $ 758,313,000 | 23,593,000 | $ 780,250,000 | ||
Merck | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Number of collaborative agreements | agreement | 2 | 2 | 2 | |||
Merck | Collaboration and license agreement revenues | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Collaboration and license agreement revenues | 541,000 | $ 725,000,000 | 541,000 | $ 725,000,000 | ||
LV Agreement | Merck | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Number of collaborative agreements | agreement | 1 | 1 | 1 | |||
LV Agreement | Collaboration and License Agreement Revenues | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Upfront cash payment received | $ 600,000,000 | |||||
Milestone payment (up to) | 850,000,000 | |||||
Milestone payment upon achievement of annual sales threshold (up to) | $ 1,750,000,000 | |||||
Percentage of costs entity is responsible for | 50.00% | |||||
Percentage of profits to be received | 50.00% | |||||
TUKYSA Agreement | Collaboration and License Agreement Revenues | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Upfront cash payment received | $ 125,000,000 | |||||
Milestone payment (up to) | 65,000,000 | |||||
Prepaid research and development expense | 85,000,000 | |||||
Remaining co-development liability | $ 63,800,000 | $ 63,800,000 | ||||
Purchase Agreement | Collaboration and License Agreement Revenues | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Variable consideration | $ 250,100,000 | $ 250,100,000 | $ 250,100,000 |
Leases - Additional Information
Leases - Additional Information (Details) ft² in Thousands, $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2021USD ($)ft²aterm | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | |
Leases [Abstract] | |||||
Right-of-use assets in exchange for lease liabilities | $ 7,700 | $ 7,000 | |||
Lease agreement | ft² | 258 | ||||
Rentable building and complex constructed | a | 20.5 | ||||
Initial rate | $ 4,000 | $ 4,372 | $ 3,327 | $ 12,429 | $ 10,223 |
Annual escalations | 3.00% | ||||
Initial term | 20 years | ||||
Option to extend | term | 2 | ||||
Renewal term | 10 years |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Leases [Abstract] | |||||
Operating lease cost | $ 4,070 | $ 3,832 | $ 12,147 | $ 10,967 | |
Variable lease cost | 1,052 | 998 | 3,190 | 2,972 | |
Total lease cost | 5,122 | 4,830 | 15,337 | 13,939 | |
Cash paid for amounts included in measurement of lease liabilities | $ 4,000 | $ 4,372 | $ 3,327 | $ 12,429 | $ 10,223 |
Weighted average remaining lease term | 6 years 1 month 6 days | 6 years 3 months 18 days | 6 years 1 month 6 days | 6 years 3 months 18 days | |
Weighted average discount rate | 5.10% | 5.20% | 5.10% | 5.20% |
Leases - Summary of Balance She
Leases - Summary of Balance Sheet Information (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
Accrued liabilities and other | $ 13,760 | $ 12,749 |
Accrued liabilities and other extensible list | Accrued liabilities and other | Accrued liabilities and other |
Operating lease liabilities, long-term | $ 58,878 | $ 61,884 |
Total | $ 72,638 | $ 74,633 |
Net (loss) income per share- Sc
Net (loss) income per share- Schedule of Net Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Earnings Per Share [Abstract] | ||||||||
Net (loss) income | $ (293,847) | $ (84,576) | $ (121,420) | $ 636,167 | $ (21,190) | $ (168,402) | $ (499,843) | $ 446,575 |
Shares used in computation of per share amounts - basic (in shares) | 182,303 | 174,460 | 181,696 | 173,409 | ||||
Dilutive potential common shares (in shares) | 0 | 7,417 | 0 | 7,530 | ||||
Weighted average common shares outstanding - diluted (in shares) | 182,303 | 181,877 | 181,696 | 180,939 | ||||
Net (loss) income per share - basic (in dollars per share) | $ (1.61) | $ 3.65 | $ (2.75) | $ 2.58 | ||||
Net (loss) income per share - diluted (in dollars per share) | $ (1.61) | $ 3.50 | $ (2.75) | $ 2.47 |
Net (loss) income per share - A
Net (loss) income per share - Additional Information (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Earnings Per Share [Abstract] | ||||
Stock options and RSUs (in shares) | 10,361 | 437 | 10,271 | 310 |
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 (Details) - Fair Value Measurements Recurring - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | $ 1,770,362 | $ 2,101,826 |
US Treasury Securities | Short-term Investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 1,751,201 | 2,000,996 |
US Treasury Securities | Long-term Investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 100,830 | |
Equity Securities | Other Non-current Assets | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 19,161 | |
Quoted prices in active markets for identical assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 1,770,362 | 2,101,826 |
Quoted prices in active markets for identical assets (Level 1) | US Treasury Securities | Short-term Investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 1,751,201 | 2,000,996 |
Quoted prices in active markets for identical assets (Level 1) | US Treasury Securities | Long-term Investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 100,830 | |
Quoted prices in active markets for identical assets (Level 1) | Equity Securities | Other Non-current Assets | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 19,161 | |
Other observable inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Other observable inputs (Level 2) | US Treasury Securities | Short-term Investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Other observable inputs (Level 2) | US Treasury Securities | Long-term Investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | |
Other observable inputs (Level 2) | Equity Securities | Other Non-current Assets | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | |
Significant unobservable inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Significant unobservable inputs (Level 3) | US Treasury Securities | Short-term Investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Significant unobservable inputs (Level 3) | US Treasury Securities | Long-term Investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | $ 0 | |
Significant unobservable inputs (Level 3) | Equity Securities | Other Non-current Assets | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | $ 0 |
Fair value - Additional Informa
Fair value - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |||||
Credit loss | $ 0 | $ 0 | $ 0 | $ 0 | |
Allowance for credit loss | $ 0 | $ 0 | $ 0 |
Fair value - Summary of Debt Se
Fair value - Summary of Debt Securities (Details) - US Treasury Securities - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized cost | $ 1,751,186 | $ 2,101,801 |
Gross unrealized gains | 46 | 259 |
Gross unrealized losses | (31) | (234) |
Fair value | 1,751,201 | 2,101,826 |
Debt securities, due in one year or less, amortized cost | 1,550,559 | 1,791,399 |
Debt securities, due in one year or less, fair value | 1,550,536 | 1,791,239 |
Debt securities, due in one to two years, amortized cost | 200,627 | 310,402 |
Debt securities, due in one to two years, fair value | $ 200,665 | $ 310,587 |
Investment and other income, _3
Investment and other income, net (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Investments, Debt and Equity Securities [Abstract] | ||||
Gain on equity securities | $ 4,966 | $ 0 | $ 9,895 | $ 11,604 |
Investment and other income, net | 262 | 1,223 | 1,360 | 6,347 |
Total investment and other income, net | $ 5,228 | $ 1,223 | $ 11,255 | $ 17,951 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 139,822 | $ 99,049 |
Finished goods | 41,553 | 17,087 |
Total | $ 181,375 | $ 116,136 |
Accrued liabilities (Details)
Accrued liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Payables and Accruals [Abstract] | ||
Employee compensation and benefits | $ 104,178 | $ 96,902 |
Clinical trial and related costs | 107,408 | 69,756 |
Technology acquisition fee | 200,000 | 0 |
Gross-to-net deductions and third-party royalties | 68,907 | 52,565 |
Other | 107,984 | 90,848 |
Accrued liabilities and other | $ 588,477 | $ 310,071 |
Share-based compensation (Detai
Share-based compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 45,057 | $ 39,052 | $ 121,008 | $ 107,458 |
Unrecognized compensation cost | 267,200 | 267,200 | ||
Research and development | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | 20,991 | 20,112 | 55,187 | 54,263 |
Selling, general and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | 24,066 | $ 18,940 | 65,821 | $ 53,195 |
Long Term Incentive Plans | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized compensation costs, excluding options | $ 78,000 | $ 78,000 |
RemeGen license agreement (Deta
RemeGen license agreement (Details) - Collaborative Arrangement - RemGen Co $ in Millions | Sep. 30, 2021USD ($) |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |
Upfront payment to collaborator | $ 200 |
Development Goals | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |
Potential milestone payments to collaborator | 195 |
Regulatory and Commercialization Goals | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |
Potential milestone payments to collaborator | $ 2,200 |
Income taxes (Details)
Income taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | ||||
Provision for income taxes | $ 1,112 | $ 3,242 | $ 1,112 | $ 3,242 |
Effective income tax rate | 1.00% | 0.20% | 1.00% | |
Income tax discrete benefit | $ 52,100 |
Legal matters (Details)
Legal matters (Details) | 1 Months Ended |
Jan. 22, 2021petition | |
Commitments and Contingencies Disclosure [Abstract] | |
Number of petitions filed | 2 |