Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 01, 2017 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | SGEN | |
Entity Registrant Name | SEATTLE GENETICS INC /WA | |
Entity Central Index Key | 1,060,736 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 143,928,341 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Assets | ||
Cash and cash equivalents | $ 128,140 | $ 108,673 |
Short-term investments | 322,258 | 480,313 |
Accounts receivable, net | 90,432 | 61,928 |
Inventories | 60,837 | 68,124 |
Prepaid expenses and other current assets | 18,905 | 15,610 |
Total current assets | 620,572 | 734,648 |
Property and equipment, net | 82,769 | 62,870 |
Long-term investments | 19,967 | 29,988 |
Other non-current assets | 129,775 | 10,890 |
Total assets | 853,083 | 838,396 |
Liabilities and Stockholders' Equity | ||
Accounts payable and accrued liabilities | 119,978 | 120,669 |
Current portion of deferred revenue | 32,811 | 27,847 |
Total current liabilities | 152,789 | 148,516 |
Long-term liabilities | ||
Deferred revenue, less current portion | 37,901 | 53,006 |
Deferred rent and other long-term liabilities | 2,685 | 2,787 |
Total long-term liabilities | 40,586 | 55,793 |
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; 143,803 shares issued and outstanding at September 30, 2017 and 142,193 shares issued and outstanding at December 31, 2016 | 144 | 142 |
Additional paid-in capital | 1,774,936 | 1,701,048 |
Accumulated other comprehensive income (loss) | 17,997 | (63) |
Accumulated deficit | (1,133,369) | (1,067,040) |
Total stockholders' equity | 659,708 | 634,087 |
Total liabilities and stockholders' equity | $ 853,083 | $ 838,396 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 143,803,000 | 142,193,000 |
Common stock, shares outstanding | 143,803,000 | 142,193,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenues | ||||
Net product sales | $ 79,177 | $ 70,117 | $ 223,841 | $ 194,981 |
Collaboration and license agreement revenues | 39,444 | 23,974 | 82,779 | 64,148 |
Royalty revenues | 16,670 | 12,224 | 46,025 | 53,743 |
Total revenues | 135,291 | 106,315 | 352,645 | 312,872 |
Costs and expenses | ||||
Cost of sales | 9,019 | 7,427 | 24,555 | 20,272 |
Cost of royalty revenues | 5,196 | 3,748 | 13,900 | 10,470 |
Research and development | 113,606 | 92,711 | 346,196 | 271,136 |
Selling, general and administrative | 39,667 | 34,841 | 118,783 | 97,870 |
Total costs and expenses | 167,488 | 138,727 | 503,434 | 399,748 |
Loss from operations | (32,197) | (32,412) | (150,789) | (86,876) |
Investment and other income, net | 82,218 | 660 | 84,460 | 1,903 |
Net income (loss) | $ 50,021 | $ (31,752) | $ (66,329) | $ (84,973) |
Net income (loss) per share-basic | $ 0.35 | $ (0.23) | $ (0.46) | $ (0.61) |
Net income (loss) per share-diluted | $ 0.34 | $ (0.23) | $ (0.46) | $ (0.61) |
Shares used in computation of net income (loss) per share-basic | 143,357 | 140,928 | 142,876 | 140,369 |
Shares used in computation of net income (loss) per share-diluted | 148,068 | 140,928 | 142,876 | 140,369 |
Comprehensive income (loss): | ||||
Net income (loss) | $ 50,021 | $ (31,752) | $ (66,329) | $ (84,973) |
Other comprehensive income: | ||||
Unrealized gain (loss) on securities available-for-sale, net of tax of $5,915, $0, 11,087, and $0, respectively | 9,627 | (146) | 18,044 | 891 |
Foreign currency translation gain (loss) | 14 | (7) | 16 | 7 |
Comprehensive income (loss) | $ 59,662 | $ (31,905) | $ (48,269) | $ (84,075) |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Loss (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Statement [Abstract] | ||||
Unrealized gain (loss) on securities available-for-sale, tax | $ 5,915 | $ 0 | $ 11,087 | $ 0 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Operating activities | ||
Net loss | $ (66,329) | $ (84,973) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Share-based compensation | 47,899 | 37,045 |
Depreciation and amortization | 16,393 | 13,270 |
Amortization of premiums, accretion of discounts and loss on investments | 653 | 4,318 |
Gain on Immunomedics warrant derivative | (76,699) | 0 |
Income tax benefit on unrealized gain on available-for-sale securities | (5,415) | 0 |
Deferred income taxes | (5,672) | 0 |
Deferred rent and other long-term liabilities | (102) | (855) |
Changes in operating assets and liabilities | ||
Accounts receivable, net | (28,504) | (12,191) |
Inventories | 7,287 | (14,682) |
Prepaid expenses and other assets | (2,084) | (4,219) |
Accounts payable and accrued liabilities | 6,208 | 8,367 |
Deferred revenue | (10,141) | (27,997) |
Net cash used in operating activities | (116,506) | (81,917) |
Investing activities | ||
Purchases of securities available-for-sale | (445,659) | (443,333) |
Proceeds from maturities of securities available-for-sale | 538,200 | 549,500 |
Proceeds from sales of securities available-for-sale | 60,056 | 0 |
Purchases of property and equipment | (42,615) | (18,885) |
Net cash provided by investing activities | 109,982 | 87,282 |
Financing activities | ||
Proceeds from exercise of stock options and employee stock purchase plan | 25,991 | 23,409 |
Net cash provided by financing activities | 25,991 | 23,409 |
Net increase in cash and cash equivalents | 19,467 | 28,774 |
Cash and cash equivalents at beginning of period | 108,673 | 102,255 |
Cash and cash equivalents at end of period | $ 128,140 | $ 131,029 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 1. Summary of significant accounting policies Basis of presentation The accompanying unaudited condensed consolidated financial statements reflect the accounts of Seattle Genetics, Inc. and its wholly-owned subsidiaries (collectively “Seattle Genetics” or the “Company”). All intercompany transactions and balances have been eliminated. Management has determined that the Company operates in one segment: the development and sale of pharmaceutical products on its own behalf or in collaboration with others. Substantially all of the Company’s assets and revenues are related to operations in the United States; however, the Company also has subsidiaries in Canada, Switzerland and the United Kingdom. The condensed consolidated balance sheet data as of December 31, 2016 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 which, in the opinion of management, are necessary for a fair statement of the Company’s financial position and results of its operations, as of and for the periods presented. Unless indicated otherwise, all amounts presented in financial tables are presented in thousands, except for per share and par value amounts. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, as filed with the SEC. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates. The results of the Company’s operations for the three and nine month periods ended September 30, 2017 are not necessarily indicative of the results to be expected for the full year. Non-cash investing activities The Company had $1.2 million and $8.1 million of accrued capital expenditures as of September 30, 2017 and December 31, 2016, respectively. Accrued capital expenditures have been treated as a non-cash investing activity and, accordingly, have not been included in the statement of cash flows until such amounts have been paid in cash. Investments The Company invests cash resources primarily in debt securities. In addition, as of September 30, 2017, the Company held an equity investment in the common stock of Immunomedics, Inc., or Immunomedics, as further described in Note 7. These debt and equity 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 securities judged to be other-than-temporary, are included in investment and other income, net. The cost of investments 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 on all securities are included in investment and other income, net. The Company classifies 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. The Company classifies its equity investment in Immunomedics in other non-current assets. If the estimated fair value of a security is below its carrying value, the Company evaluates whether it is more likely than not that it 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. The Company also evaluates whether or not it intends 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, the Company considers 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 charged against investment and other income, net. Derivative financial instruments The Company holds a warrant to purchase 8.7 million shares of Immunomedics common stock, which is accounted for as a derivative. The Company does not hold derivative instruments for trading or speculative purposes. The Company accounts for financial instruments as derivatives when the instrument includes an underlying and notional amount or payment provision, an initial net investment, and a net settlement. Derivative financial instruments are measured at fair value on the issuance date and are revalued on each subsequent balance sheet date. The Company uses the Black-Scholes model using observable market inputs to estimate the fair value of derivatives. The changes in estimated fair value are recognized as current period income or loss. Other non-current assets Other non-current assets included a $5.0 million non-controlling investment in a privately-held company that is accounted for under the cost method of accounting. The Company periodically evaluates the carrying value of the investment if significant adverse events or circumstances indicate an impairment in value. As of September 30, 2017, no impairment in value had been observed. Long-term incentive plans The Company has established Long-Term Incentive Plans, or LTIPs. The LTIPs provide eligible employees with the opportunity to receive performance-based incentives, which may be comprised of a cash payment, stock options, and/or restricted stock units. As of September 30, 2017, the estimated unrecognized compensation expense related to the LTIPs was $36.0 million. The total estimate of unrecognized compensation expense is expected to change in the future for several reasons, including the addition of more eligible employees, or the addition, termination, or modification of an LTIP. Revenue recognition The Company’s revenues are comprised of ADCETRIS ® Net product sales The Company sells ADCETRIS through a limited number of pharmaceutical distributors in the U.S. and Canada. Customers order ADCETRIS through these distributors and the Company typically ships product directly to the customer. The Company records product sales when title and risk of loss pass, which generally occurs upon delivery of the product to the customer. Product sales are recorded 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. The Company reflects 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 payer mix in target markets and experience to date. These estimates involve a substantial degree of judgment. Government-mandated rebates and chargebacks Distribution fees, product returns and other deductions Collaboration and license agreement revenues The Company has developed a proprietary technology for linking cytotoxic agents to monoclonal antibodies called antibody-drug conjugates, or ADCs. This proprietary technology is the basis of ADC collaborations that the Company has entered into in the ordinary course of its business with a number of biotechnology and pharmaceutical companies. Under these ADC collaboration agreements, the Company grants its collaborators research and commercial licenses to the Company’s technology and provides technology transfer services, technical advice, supplies and services for a period of time. If there are continuing performance obligations, the Company uses a time-based proportional performance model to recognize revenue over the Company’s performance period for the related agreement. Collaboration and license agreements are evaluated to determine whether the multiple elements and associated deliverables can be considered separate units of accounting. To date, the pre-commercial deliverables under the Company’s collaboration and license agreements have not qualified as separate units of accounting. The assessment of multiple element arrangements requires judgment in order to determine the appropriate point in time, or period of time, that revenue should be recognized. The Company believes that the development period in each agreement is a reasonable estimate of the performance obligation period of such agreement. Accordingly, all amounts received or due, including any upfront payments, maintenance fees, development and regulatory milestone payments and reimbursement payments, are recognized as revenue over the performance obligation periods of each agreement. These performance obligation periods typically range from one to three years. The agreements with Takeda Pharmaceutical Company Limited, or Takeda, and Genentech, Inc., a member of the Roche Group, or Genentech, have performance obligation periods of ten and seventeen years, respectively. All of the remaining performance obligation periods for active collaborations are currently expected to be completed in three years or less. When no performance obligations are required of the Company, or following the completion of the performance obligation period, such amounts are recognized as revenue when collectibility is reasonably assured. Generally, all amounts received or due other than sales-based milestones and royalties are classified as collaboration and license agreement revenues as they are earned. Sales-based milestones and royalties are recognized as royalty revenue as they are reported to the Company. The Company’s collaboration and license agreements include contractual milestones. Generally, the milestone events contained in the Company’s collaboration and license agreements coincide with the progression of the collaborators’ product candidates from development, to regulatory approval and then to commercialization and fall into the following categories. Development milestones in the Company’s collaborations may include the following types of events: • Designation of a product candidate or initiation of preclinical studies. The Company’s collaborators must undertake significant preclinical research and studies to make a determination of the suitability of a product candidate and the time from those studies or designation to initiation of a clinical trial may take several years. • Initiation of a phase 1 clinical trial. Generally, phase 1 clinical trials may take one to two years to complete. • Initiation of a phase 2 clinical trial. Generally, phase 2 clinical trials may take one to three years to complete. • Initiation of a phase 3 clinical trial. Generally, phase 3 clinical trials may take two to six years to complete. Regulatory milestones in the Company’s collaborations may include the following types of events: • Filing of regulatory applications for marketing approval such as a Biologics License Application in the United States or a Marketing Authorization Application in Europe. Generally, it may take up to twelve months to prepare and submit regulatory filings. • Receiving marketing approval in a major market, such as in the United States, Europe, Japan or other significant countries. Generally, it may take up to three years after a marketing application is submitted to obtain approval for marketing and pricing from the applicable regulatory agency. Commercialization milestones in the Company’s collaborations may include the following types of events: • First commercial sale in a particular market, such as in the United States, Europe, Japan or other significant countries. • Product sales in excess of a pre-specified threshold. The amount of time to achieve this type of milestone depends on several factors, including, but not limited to, the dollar amount of the threshold, the pricing of the product, market penetration of the product and the rate at which customers begin using the product. The Company’s ADC collaborators are solely responsible for the development of their product candidates and the achievement of milestones in any of the categories identified above is based solely on the collaborators’ efforts. In the case of the Company’s ADCETRIS collaboration with Takeda, the Company may be involved in certain development activities; however, the achievement of milestone events under the agreement is primarily based on activities undertaken by Takeda. The process of successfully developing a product candidate, obtaining regulatory approval and ultimately commercializing a product candidate is highly uncertain and the attainment of any milestones is therefore uncertain and difficult to predict. In addition, since the Company does not take a substantive role or control the research, development or commercialization of any products generated by its ADC collaborators, the Company is not able to reasonably estimate when, if at all, any milestone payments or royalties may be payable to the Company by its ADC collaborators. As such, the milestone payments associated with its ADC collaborations involve a substantial degree of uncertainty and risk that they may never be received. Similarly, even in those collaborations where the Company may have an active role in the development of the product candidate, such as the Company’s ADCETRIS collaboration with Takeda, the attainment of a milestone is based on the collaborator’s activities and is generally outside the direction and control of the Company. The Company generally invoices its 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 when the applicable revenue recognition criteria have been met. Deferred revenue expected to be recognized within the next twelve months is classified as a current liability. Royalty revenues and cost of royalty revenues Royalty revenues primarily reflect amounts earned under the ADCETRIS collaboration with Takeda. These royalties include sales royalties, which are based on a percentage of Takeda’s net sales at rates that range from the mid-teens to the mid-twenties based on sales volume, and commercial sales-based milestones. Takeda bears a portion of third-party royalty costs owed on its sales of ADCETRIS. This amount is included in royalty revenue in the Company’s consolidated financial statements. Cost of royalty revenues reflects amounts owed to the Company’s third-party licensors related to Takeda’s sales of ADCETRIS. These amounts are recognized in the quarter in which Takeda reports its sales activity to the Company, which is the quarter following the related sales. Royalty revenues also include amounts earned in connection with the Company’s ADC collaborations. Recent accounting pronouncements In May 2014, the Financial Accounting Standards Board, or FASB, issued an Accounting Standards Update entitled “ASU 2014-09, Revenue from Contracts with Customers.” The standard requires entities to recognize revenue through an evaluation that includes identification of the contract, identification of the performance obligations, determination of the transaction price, allocation of the transaction price to the performance obligations, and recognition of revenue as the entity satisfies the performance obligations. In August 2015, FASB issued an Accounting Standards Update entitled “ASU 2015-14, Revenue from Contracts with Customers: Deferral of the Effective Date”, which defers the effective date of ASU 2014-09 to the Company’s fiscal year beginning January 1, 2018. The FASB has continued to issue accounting standards updates to clarify and provide implementation guidance related to Revenue from Contracts with Customers, including “ASU 2016-08, Revenue from Contract with Customers: Principal versus Agent Considerations”, “ASU 2016-10, Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing”, “ASU 2016-12, Revenue from Contracts with Customers: Narrow-Scope Improvements and Practical Expedients” and “ASU 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers.” The Company’s preliminary assessment of this new standard is that it will generally not change the way in which the Company recognizes product revenue from sales of ADCETRIS. However, the Company expects that sales-based royalties and commercial sales-based milestones will be recorded in the period of the related sale based on estimates, rather than recording them as reported by the customer. In addition, the Company expects that the achievement of development milestones under the Company’s collaborations will be recorded in the period their achievement becomes probable, which may result in their recognition earlier than under current accounting principles. The new standard also requires more extensive disclosures related to revenue recognition, particularly in quarterly financial statements. The Company will adopt the standard on January 1, 2018 and intends to use the modified retrospective method of adoption. The Company is continuing to evaluate the impact of the standard on all of its revenues, including those mentioned above, and its assessments may change in the future based on its ongoing evaluation. In January 2016, FASB issued an Accounting Standards Update entitled “ASU 2016-01, Financial Instruments: Overall.” The standard addresses certain aspects of recognition, measurement, presentation and disclosure of financial instruments. The Company will adopt the standard on January 1, 2018 using a modified retrospective approach. The standard will require that the Company record changes in the fair value of equity securities in net income or loss. The implementation of this standard is expected to increase the volatility of net income or loss to the extent that the Company continues to hold equity securities. In February 2016, FASB issued an Accounting Standards Update entitled “ASU 2016-02, Leases.” The standard requires entities to recognize in the consolidated balance sheet a liability to make lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term. The standard will become effective for the Company beginning January 1, 2019, with early adoption permitted. The Company is currently evaluating the guidance to determine the potential impact on its financial condition, results of operations and cash flows, and financial statement disclosures, and expects that the adoption of the standard will increase assets and liabilities related to the Company’s operating leases in the consolidated balance sheets. In March 2016, FASB issued an Accounting Standard Update entitled “ASU 2016-09, Compensation – Stock Compensation.” The standard is intended to simplify certain elements of accounting for share-based payment transactions, including the income tax impact, classification of awards as either equity or liabilities, and classification on the statement of cash flows. In addition, the standard allows an entity-wide accounting policy election to either estimate the number of awards that are expected to vest, as currently required, or account for forfeitures when they occur. The Company has elected to continue estimating the number of awards that are expected to vest. The Company adopted the standard as of January 1, 2017. Since the Company has incurred annual net losses since its inception and maintains a full valuation allowance on its net deferred tax assets, the adoption did not have a material impact on the Company’s financial condition, results of operations and cash flows. In October 2016, FASB issued an Accounting Standard Update entitled “ASU 2016-16, Accounting for Income Taxes: Intra-Entity Asset Transfers of Assets Other than Inventory.” The standard is intended to simplify the accounting for intercompany sales of assets other than inventory. Under current GAAP, the tax effects of intra-entity asset transfers are deferred until the transferred asset is sold to a third party or otherwise recovered through use. Under the new guidance, a reporting entity would recognize the tax expense from the sale of the asset in the seller’s jurisdiction when the transfer occurs, even though the pre-tax effects of that transaction are eliminated in consolidation. Any deferred tax asset that arises in the buyer’s jurisdiction would also be recognized at the time of the transfer. The standard will become effective for the Company beginning on January 1, 2018. The Company is currently evaluating the new standard; however, since the Company has incurred annual net losses since its inception and maintains a full valuation allowance on its net deferred tax assets, the adoption is not expected to have a material impact on the Company’s financial condition, results of operations and cash flows, or financial statement disclosures. In June 2016, FASB issued an Accounting Standard Update entitled “ASU 2016-13, Financial Instruments: Credit Losses.” The objective of the standard is to provide information about expected credit losses on financial instruments at each reporting date, and to change how other than temporary impairments on investments securities are recorded. The standard will become effective for the Company beginning on January 1, 2020 with early adoption permitted. The Company is currently evaluating the guidance to determine the potential impact on its financial condition, results of operations and cash flows, and financial statement disclosures. In January 2017, FASB issued an Accounting Standard Update entitled, “ASU 2017-01, Business Combinations: Clarifying the Definition of a Business.” The objective of the standard is to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions of assets or businesses. The Company adopted this standard on a prospective basis as of January 1, 2017. The adoption of this standard did not have a material impact on the Company’s financial condition, results of operations and cash flows, or financial statement disclosures. In May 2017, FASB issued an Accounting Standard Update entitled, “ASU 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting.” The objective of the standard is to provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. The standard is applied prospectively to awards modified on or after the adoption date. The Company early adopted this standard on April 1, 2017. The adoption did not have a material impact on the Company’s financial condition, results of operations and cash flows. |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share | 2. Net income (loss) per share Basic 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 shares of our common stock outstanding and other dilutive securities outstanding during the period. The potential dilutive shares resulting from the assumed exercise of outstanding stock options and the assumed vesting of restricted stock units were determined using the treasury stock method. The Company excluded certain restricted stock units and options to purchase common stock from the calculation of diluted net income per share that would have resulted in an anti-dilutive effect for the three months ended September 30, 2017. The Company excluded all restricted stock units and options to purchase common stock from the calculation of basic and diluted net loss per share as such securities were anti-dilutive for the three months ended September 30, 2016, and for the nine months ended September 30, 2017, and 2016. The weighted-average number of restricted stock units and options to purchase common stock that have been excluded from the number of shares used to calculate diluted net income (loss) per share totaled 3,460,000 and 13,272,000 for the three months ended September 30, 2017 and 2016, respectively, and 13,367,000 and 12,714,000 for the nine months ended September 30, 2017 and 2016, respectively. The following table summarizes the computation of basic and diluted net income (loss) per share ($ in thousands, other than per share amounts): Three months ended Nine months ended 2017 2016 2017 2016 Net income (loss) – basic and diluted $ 50,021 $ (31,752 ) $ (66,329 ) $ (84,973 ) Weighted average shares outstanding – basic 143,357 140,928 142,876 140,369 Effect of dilutive securities: Dilutive effect of common shares from stock options 3,575 0 0 0 Dilutive effect of common shares from restricted stock units 1,136 0 0 0 Weighted average shares outstanding – diluted 148,068 140,928 142,876 140,369 Basic net income (loss) per share $ 0.35 $ (0.23 ) $ (0.46 ) $ (0.61 ) Diluted net income (loss) per share $ 0.34 $ (0.23 ) $ (0.46 ) $ (0.61 ) |
Investments
Investments | 9 Months Ended |
Sep. 30, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | 3. Investments Investments consisted of available-for-sale securities as follows (in thousands): Amortized Gross Gross Fair September 30, 2017 U.S. Treasury securities $ 342,412 $ 1 $ (188 ) $ 342,225 Common stock investment in Immunomedics 12,677 29,263 0 41,940 Total $ 355,089 $ 29,264 $ (188 ) $ 384,165 Contractual Maturities (at date of purchase) Due in one year or less $ 201,836 $ 201,782 Due in one to two years 140,576 140,443 Total $ 342,412 $ 342,225 Amortized Gross Gross Fair December 31, 2016 U.S. Treasury securities $ 510,356 $ 68 $ (123 ) $ 510,301 Contractual Maturities (at date of purchase) Due in one year or less $ 229,856 $ 229,864 Due in one to two years 280,500 280,437 Total $ 510,356 $ 510,301 Investments classified as available-for-sale securities are presented in the accompanying consolidated balance sheets as follows (in thousands): September 30, December 31, Short-term investments $ 322,258 $ 480,313 Long-term investments 19,967 29,988 Other non-current assets—Common stock investment in Immunomedics 41,940 0 Total $ 384,165 $ 510,301 The aggregate estimated fair value of the Company’s investments with unrealized losses was as follows (in thousands): Period of continuous unrealized loss 12 Months or less Greater than 12 months Fair Gross Fair Gross September 30, 2017 U.S. Treasury securities $ 282,236 $ (174 ) $ 19,993 $ (14 ) December 31, 2016 U.S. Treasury securities $ 200,327 $ (123 ) $ NA $ NA |
Fair Value
Fair Value | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value | 4. Fair value The Company holds short-term and long-term available-for-sale securities, and the Immunomedics common stock warrant that are measured at fair value, which is determined on a recurring basis according to a fair value hierarchy that prioritizes the inputs and assumptions used, and the valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described as follows: 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. The Company considers 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. Level 1 investments are valued based on quoted market prices in active markets. The Company estimates the fair value of Level 2 instruments utilizing the Black-Scholes valuation model, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. The Company did not hold any Level 3 investments as of September 30, 2017 or December 31, 2016 and did not transfer any investments between Levels 1, 2 and 3 during the nine months ended September 30, 2017. The following table presents the Company’s debt and equity securities by level within the fair value hierarchy for the periods presented (in thousands): Fair value measurement using: Quoted prices Other Significant Total As of September 30, 2017 Short-term investments—U.S. Treasury securities $ 322,258 $ 0 $ 0 $ 322,258 Long-term investments—U.S. Treasury securities 19,967 0 0 19,967 Other non-current assets – Common stock warrant in Immunomedics 0 78,714 0 78,714 Other non-current assets—Common stock investment in Immunomedics 41,940 0 0 41,940 Total $ 384,165 $ 78,714 $ 0 $ 462,879 Fair value measurement using: Quoted prices Other Significant Total As of December 31, 2016 Short-term investments—U.S. Treasury securities $ 480,313 $ 0 $ 0 $ 480,313 Long-term investments—U.S. Treasury securities 29,988 0 0 29,988 Total $ 510,301 $ 0 $ 0 $ 510,301 |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Inventories | 5. Inventories The following table presents the Company’s inventories of ADCETRIS (in thousands): September 30, December 31, Raw materials $ 51,656 $ 62,516 Work in process 0 8 Finished goods 9,181 5,600 Total $ 60,837 $ 68,124 The Company capitalizes ADCETRIS inventory costs. ADCETRIS 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. The Company does not capitalize manufacturing costs for any of its product candidates. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 6. Income taxes The Company has recorded income tax benefits in investment and other income, net, of $2.7 million and $5.4 million for the three and nine months ended September 30, 2017, respectively, in connection with unrealized gains on available-for-sale securities. The Company has not recorded a provision for income tax expense for the quarter ended September 30, 2017 as the Company expects to report a net loss for the full year ending December 31, 2017, and continues to maintain a full valuation allowance on the net deferred tax assets. |
Immunomedics Stock Purchase Agr
Immunomedics Stock Purchase Agreement | 9 Months Ended |
Sep. 30, 2017 | |
Text Block [Abstract] | |
Immunomedics Stock Purchase Agreement | 7. Immunomedics stock purchase agreement In February 2017, the Company paid Immunomedics $14.7 million for 3.0 million shares of Immunomedics common stock and a warrant to purchase an additional 8.7 million shares of Immunomedics common stock at an exercise price of $4.90 per share, pursuant to a stock purchase agreement. The consideration was allocated between the common stock and the warrant based on the relative fair values as of the purchase date, or $12.7 million and $2.0 million, respectively. The shares of common stock were classified as available-for-sale securities and carried at estimated fair value with unrealized gains and losses included in accumulated other comprehensive income (loss) in stockholders’ equity. The common stock investment was included in other non-current assets as of September 30, 2017. Based on management’s assessment, the $2.0 million value allocated to the warrant was determined to be substantially impaired as of March 31, 2017, and therefore was charged to investment and other income, net, for the nine months ended September 30, 2017. In September 2017, Immunomedics registered the resale of the shares of Immunomedics common stock underlying the warrant under the Securities Act of 1933, as amended, and as a result, the warrant met the definition of a derivative under ASC 815 as of September 30, 2017. Consequently, the Company recorded a gain of $78.7 million and $76.7 million in investment and other income, net, resulting from the change in the fair value of the warrant derivative for the three and nine months ended September 30, 2017, respectively. The warrant was recorded at its fair value of $78.7 million in other non-current assets as of September 30, 2017, and is exercisable by the Company until December 31, 2017. |
Legal Matters
Legal Matters | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Matters | 8. Legal matters On January 10, 2017, the Company became a named defendant in a securities class action complaint filed in the United States District Court for the Western District of Washington, or the Court, seeking compensatory damages of an undisclosed amount. On October 18, 2017, the Court granted the Company’s motion to dismiss with leave for plaintiff to file a second consolidated amended complaint. On March 29, 2017, a stockholder derivative lawsuit was filed in Washington Superior Court for the County of Snohomish, or the Snohomish County Superior Court, naming as defendants certain of the Company’s current and former executive officers and members of its board of directors. The Company is named as a nominal defendant. On October 18, 2017, in light of the granting of the Company’s motion to dismiss in the securities class action complaint, the parties in the stockholder derivative lawsuit filed a joint status report with the Snohomish County Superior Court stipulating to continue to stay the derivative lawsuit pending further developments in the securities class action. The Company does not believe it is feasible to predict or determine the ultimate outcome or resolution of these proceedings, or to estimate the amount of, or potential range of, loss with respect to these proceedings. In addition, the timing of the final resolution of these proceedings is uncertain. As a result of these lawsuits, the Company will incur litigation expenses and may incur indemnification expenses, and potential resolutions of the lawsuits could include settlements requiring payments. Those expenses could have a material impact on the Company’s financial position, results of operations, and cash flows. On February 13, 2017, the Company was named a co-defendant in a lawsuit filed by venBio Select Advisors LLC, or venBio, in the Delaware Chancery Court against the members of the board of directors of Immunomedics. On May 4, 2017, the Company and Immunomedics agreed to terminate the license agreement between the parties and to amend the term of the Immunomedics common stock warrant to be exercisable by the Company only until December 31, 2017, and in connection therewith, Immunomedics and venBio agreed to fully settle, resolve and release the Company, and the Company agreed to fully settle, resolve and release Immunomedics and venBio, from all disputes, claims and liabilities arising from the license agreement and the transactions contemplated thereby, subject to the terms of the related termination agreement and settlement agreement. The termination agreement between Immunomedics and the Company and the settlement of the venBio lawsuit were effective August 25, 2017. |
Subsequent Event
Subsequent Event | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Event | 9. Subsequent event Closing of Manufacturing Facility Acquisition On July 30 and July 31, 2017, the Company entered into certain agreements to acquire a biologics manufacturing facility located in Bothell, Washington. As part of the transaction, the Company and Bristol Myers Squibb Company, or BMS, through BMS or its wholly-owned subsidiary, entered into an assignment and assumption agreement, or the Assignment Agreement, an asset purchase agreement, or the Asset Purchase Agreement, and agreed to enter into certain ancillary transitional service agreements effective upon the closing of the transactions contemplated by the Asset Purchase Agreement. Under the Assignment Agreement, on July 30, 2017, BMS assigned to the Company all of its rights and obligations under a purchase agreement, or the Purchase Agreement, pursuant to which BMS agreed to purchase the manufacturing facility site location, which includes the underlying real estate and the manufacturing building, from BMR-3450 Monte Villa Parkway LLC, or BMR. The purchase price was $17.8 million, which the Company recorded in property and equipment, net as of September 30, 2017. Under the terms of the Purchase Agreement, the Company assumed BMR’s obligations under a lease between BMS and BMR, or the Lease, under which BMS occupied the manufacturing facility site location until October 1, 2017. The Lease terminated upon the closing of the transactions contemplated by the Asset Purchase Agreement on October 1, 2017. On October 1, 2017, the Company completed the acquisition of certain equipment and improvements from BMS in exchange for a payment of approximately $25.5 million. In addition, the Company hired the employees who were employed by BMS at the manufacturing facility site location. The acquisition of the manufacturing facility and the related assets and liabilities will be accounted for as a business combination using the acquisition method. The purchase price will be allocated to the assets acquired and liabilities assumed, and the Company expects to include a preliminary determination in its consolidated financial statements for the year ending December 31, 2017. The Company also entered into a clinical manufacturing services agreement on October 1, 2017, under which the Company agreed to manufacture certain BMS clinical product candidates in accordance with prescribed production schedules and quantities through the later of December 31, 2018 or when certain technical transfer activities have been completed, and to maintain personnel, equipment and expertise sufficient to perform the agreed upon services. BMS will compensate the Company for services rendered under the clinical manufacturing services agreement, based on an agreed upon rate for use of the facility and employees. |
Summary of Significant Accoun16
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation The accompanying unaudited condensed consolidated financial statements reflect the accounts of Seattle Genetics, Inc. and its wholly-owned subsidiaries (collectively “Seattle Genetics” or the “Company”). All intercompany transactions and balances have been eliminated. Management has determined that the Company operates in one segment: the development and sale of pharmaceutical products on its own behalf or in collaboration with others. Substantially all of the Company’s assets and revenues are related to operations in the United States; however, the Company also has subsidiaries in Canada, Switzerland and the United Kingdom. The condensed consolidated balance sheet data as of December 31, 2016 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 which, in the opinion of management, are necessary for a fair statement of the Company’s financial position and results of its operations, as of and for the periods presented. Unless indicated otherwise, all amounts presented in financial tables are presented in thousands, except for per share and par value amounts. |
Non-cash investing activities | Non-cash investing activities The Company had $1.2 million and $8.1 million of accrued capital expenditures as of September 30, 2017 and December 31, 2016, respectively. Accrued capital expenditures have been treated as a non-cash investing activity and, accordingly, have not been included in the statement of cash flows until such amounts have been paid in cash. |
Investments | Investments The Company invests cash resources primarily in debt securities. In addition, as of September 30, 2017, the Company held an equity investment in the common stock of Immunomedics, Inc., or Immunomedics, as further described in Note 7. These debt and equity 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 securities judged to be other-than-temporary, are included in investment and other income, net. The cost of investments 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 on all securities are included in investment and other income, net. The Company classifies 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. The Company classifies its equity investment in Immunomedics in other non-current assets. If the estimated fair value of a security is below its carrying value, the Company evaluates whether it is more likely than not that it 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. The Company also evaluates whether or not it intends 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, the Company considers 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 charged against investment and other income, net. |
Derivative financial instruments | Derivative financial instruments The Company holds a warrant to purchase 8.7 million shares of Immunomedics common stock, which is accounted for as a derivative. The Company does not hold derivative instruments for trading or speculative purposes. The Company accounts for financial instruments as derivatives when the instrument includes an underlying and notional amount or payment provision, an initial net investment, and a net settlement. Derivative financial instruments are measured at fair value on the issuance date and are revalued on each subsequent balance sheet date. The Company uses the Black-Scholes model using observable market inputs to estimate the fair value of derivatives. The changes in estimated fair value are recognized as current period income or loss. |
Other non-current assets | Other non-current assets Other non-current assets included a $5.0 million non-controlling investment in a privately-held company that is accounted for under the cost method of accounting. The Company periodically evaluates the carrying value of the investment if significant adverse events or circumstances indicate an impairment in value. As of September 30, 2017, no impairment in value had been observed. |
Long-term incentive plans | Long-term incentive plans The Company has established Long-Term Incentive Plans, or LTIPs. The LTIPs provide eligible employees with the opportunity to receive performance-based incentives, which may be comprised of a cash payment, stock options, and/or restricted stock units. As of September 30, 2017, the estimated unrecognized compensation expense related to the LTIPs was $36.0 million. The total estimate of unrecognized compensation expense is expected to change in the future for several reasons, including the addition of more eligible employees, or the addition, termination, or modification of an LTIP. |
Revenue recognition | Revenue recognition The Company’s revenues are comprised of ADCETRIS ® Net product sales The Company sells ADCETRIS through a limited number of pharmaceutical distributors in the U.S. and Canada. Customers order ADCETRIS through these distributors and the Company typically ships product directly to the customer. The Company records product sales when title and risk of loss pass, which generally occurs upon delivery of the product to the customer. Product sales are recorded 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. The Company reflects 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 payer mix in target markets and experience to date. These estimates involve a substantial degree of judgment. Government-mandated rebates and chargebacks Distribution fees, product returns and other deductions Collaboration and license agreement revenues The Company has developed a proprietary technology for linking cytotoxic agents to monoclonal antibodies called antibody-drug conjugates, or ADCs. This proprietary technology is the basis of ADC collaborations that the Company has entered into in the ordinary course of its business with a number of biotechnology and pharmaceutical companies. Under these ADC collaboration agreements, the Company grants its collaborators research and commercial licenses to the Company’s technology and provides technology transfer services, technical advice, supplies and services for a period of time. If there are continuing performance obligations, the Company uses a time-based proportional performance model to recognize revenue over the Company’s performance period for the related agreement. Collaboration and license agreements are evaluated to determine whether the multiple elements and associated deliverables can be considered separate units of accounting. To date, the pre-commercial deliverables under the Company’s collaboration and license agreements have not qualified as separate units of accounting. The assessment of multiple element arrangements requires judgment in order to determine the appropriate point in time, or period of time, that revenue should be recognized. The Company believes that the development period in each agreement is a reasonable estimate of the performance obligation period of such agreement. Accordingly, all amounts received or due, including any upfront payments, maintenance fees, development and regulatory milestone payments and reimbursement payments, are recognized as revenue over the performance obligation periods of each agreement. These performance obligation periods typically range from one to three years. The agreements with Takeda Pharmaceutical Company Limited, or Takeda, and Genentech, Inc., a member of the Roche Group, or Genentech, have performance obligation periods of ten and seventeen years, respectively. All of the remaining performance obligation periods for active collaborations are currently expected to be completed in three years or less. When no performance obligations are required of the Company, or following the completion of the performance obligation period, such amounts are recognized as revenue when collectibility is reasonably assured. Generally, all amounts received or due other than sales-based milestones and royalties are classified as collaboration and license agreement revenues as they are earned. Sales-based milestones and royalties are recognized as royalty revenue as they are reported to the Company. The Company’s collaboration and license agreements include contractual milestones. Generally, the milestone events contained in the Company’s collaboration and license agreements coincide with the progression of the collaborators’ product candidates from development, to regulatory approval and then to commercialization and fall into the following categories. Development milestones in the Company’s collaborations may include the following types of events: • Designation of a product candidate or initiation of preclinical studies. The Company’s collaborators must undertake significant preclinical research and studies to make a determination of the suitability of a product candidate and the time from those studies or designation to initiation of a clinical trial may take several years. • Initiation of a phase 1 clinical trial. Generally, phase 1 clinical trials may take one to two years to complete. • Initiation of a phase 2 clinical trial. Generally, phase 2 clinical trials may take one to three years to complete. • Initiation of a phase 3 clinical trial. Generally, phase 3 clinical trials may take two to six years to complete. Regulatory milestones in the Company’s collaborations may include the following types of events: • Filing of regulatory applications for marketing approval such as a Biologics License Application in the United States or a Marketing Authorization Application in Europe. Generally, it may take up to twelve months to prepare and submit regulatory filings. • Receiving marketing approval in a major market, such as in the United States, Europe, Japan or other significant countries. Generally, it may take up to three years after a marketing application is submitted to obtain approval for marketing and pricing from the applicable regulatory agency. Commercialization milestones in the Company’s collaborations may include the following types of events: • First commercial sale in a particular market, such as in the United States, Europe, Japan or other significant countries. • Product sales in excess of a pre-specified threshold. The amount of time to achieve this type of milestone depends on several factors, including, but not limited to, the dollar amount of the threshold, the pricing of the product, market penetration of the product and the rate at which customers begin using the product. The Company’s ADC collaborators are solely responsible for the development of their product candidates and the achievement of milestones in any of the categories identified above is based solely on the collaborators’ efforts. In the case of the Company’s ADCETRIS collaboration with Takeda, the Company may be involved in certain development activities; however, the achievement of milestone events under the agreement is primarily based on activities undertaken by Takeda. The process of successfully developing a product candidate, obtaining regulatory approval and ultimately commercializing a product candidate is highly uncertain and the attainment of any milestones is therefore uncertain and difficult to predict. In addition, since the Company does not take a substantive role or control the research, development or commercialization of any products generated by its ADC collaborators, the Company is not able to reasonably estimate when, if at all, any milestone payments or royalties may be payable to the Company by its ADC collaborators. As such, the milestone payments associated with its ADC collaborations involve a substantial degree of uncertainty and risk that they may never be received. Similarly, even in those collaborations where the Company may have an active role in the development of the product candidate, such as the Company’s ADCETRIS collaboration with Takeda, the attainment of a milestone is based on the collaborator’s activities and is generally outside the direction and control of the Company. The Company generally invoices its 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 when the applicable revenue recognition criteria have been met. Deferred revenue expected to be recognized within the next twelve months is classified as a current liability. Royalty revenues and cost of royalty revenues Royalty revenues primarily reflect amounts earned under the ADCETRIS collaboration with Takeda. These royalties include sales royalties, which are based on a percentage of Takeda’s net sales at rates that range from the mid-teens to the mid-twenties based on sales volume, and commercial sales-based milestones. Takeda bears a portion of third-party royalty costs owed on its sales of ADCETRIS. This amount is included in royalty revenue in the Company’s consolidated financial statements. Cost of royalty revenues reflects amounts owed to the Company’s third-party licensors related to Takeda’s sales of ADCETRIS. These amounts are recognized in the quarter in which Takeda reports its sales activity to the Company, which is the quarter following the related sales. Royalty revenues also include amounts earned in connection with the Company’s ADC collaborations. |
Recent accounting pronouncements | Recent accounting pronouncements In May 2014, the Financial Accounting Standards Board, or FASB, issued an Accounting Standards Update entitled “ASU 2014-09, Revenue from Contracts with Customers.” The standard requires entities to recognize revenue through an evaluation that includes identification of the contract, identification of the performance obligations, determination of the transaction price, allocation of the transaction price to the performance obligations, and recognition of revenue as the entity satisfies the performance obligations. In August 2015, FASB issued an Accounting Standards Update entitled “ASU 2015-14, Revenue from Contracts with Customers: Deferral of the Effective Date”, which defers the effective date of ASU 2014-09 to the Company’s fiscal year beginning January 1, 2018. The FASB has continued to issue accounting standards updates to clarify and provide implementation guidance related to Revenue from Contracts with Customers, including “ASU 2016-08, Revenue from Contract with Customers: Principal versus Agent Considerations”, “ASU 2016-10, Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing”, “ASU 2016-12, Revenue from Contracts with Customers: Narrow-Scope Improvements and Practical Expedients” and “ASU 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers.” The Company’s preliminary assessment of this new standard is that it will generally not change the way in which the Company recognizes product revenue from sales of ADCETRIS. However, the Company expects that sales-based royalties and commercial sales-based milestones will be recorded in the period of the related sale based on estimates, rather than recording them as reported by the customer. In addition, the Company expects that the achievement of development milestones under the Company’s collaborations will be recorded in the period their achievement becomes probable, which may result in their recognition earlier than under current accounting principles. The new standard also requires more extensive disclosures related to revenue recognition, particularly in quarterly financial statements. The Company will adopt the standard on January 1, 2018 and intends to use the modified retrospective method of adoption. The Company is continuing to evaluate the impact of the standard on all of its revenues, including those mentioned above, and its assessments may change in the future based on its ongoing evaluation. In January 2016, FASB issued an Accounting Standards Update entitled “ASU 2016-01, Financial Instruments: Overall.” The standard addresses certain aspects of recognition, measurement, presentation and disclosure of financial instruments. The Company will adopt the standard on January 1, 2018 using a modified retrospective approach. The standard will require that the Company record changes in the fair value of equity securities in net income or loss. The implementation of this standard is expected to increase the volatility of net income or loss to the extent that the Company continues to hold equity securities. In February 2016, FASB issued an Accounting Standards Update entitled “ASU 2016-02, Leases.” The standard requires entities to recognize in the consolidated balance sheet a liability to make lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term. The standard will become effective for the Company beginning January 1, 2019, with early adoption permitted. The Company is currently evaluating the guidance to determine the potential impact on its financial condition, results of operations and cash flows, and financial statement disclosures, and expects that the adoption of the standard will increase assets and liabilities related to the Company’s operating leases in the consolidated balance sheets. In March 2016, FASB issued an Accounting Standard Update entitled “ASU 2016-09, Compensation – Stock Compensation.” The standard is intended to simplify certain elements of accounting for share-based payment transactions, including the income tax impact, classification of awards as either equity or liabilities, and classification on the statement of cash flows. In addition, the standard allows an entity-wide accounting policy election to either estimate the number of awards that are expected to vest, as currently required, or account for forfeitures when they occur. The Company has elected to continue estimating the number of awards that are expected to vest. The Company adopted the standard as of January 1, 2017. Since the Company has incurred annual net losses since its inception and maintains a full valuation allowance on its net deferred tax assets, the adoption did not have a material impact on the Company’s financial condition, results of operations and cash flows. In October 2016, FASB issued an Accounting Standard Update entitled “ASU 2016-16, Accounting for Income Taxes: Intra-Entity Asset Transfers of Assets Other than Inventory.” The standard is intended to simplify the accounting for intercompany sales of assets other than inventory. Under current GAAP, the tax effects of intra-entity asset transfers are deferred until the transferred asset is sold to a third party or otherwise recovered through use. Under the new guidance, a reporting entity would recognize the tax expense from the sale of the asset in the seller’s jurisdiction when the transfer occurs, even though the pre-tax effects of that transaction are eliminated in consolidation. Any deferred tax asset that arises in the buyer’s jurisdiction would also be recognized at the time of the transfer. The standard will become effective for the Company beginning on January 1, 2018. The Company is currently evaluating the new standard; however, since the Company has incurred annual net losses since its inception and maintains a full valuation allowance on its net deferred tax assets, the adoption is not expected to have a material impact on the Company’s financial condition, results of operations and cash flows, or financial statement disclosures. In June 2016, FASB issued an Accounting Standard Update entitled “ASU 2016-13, Financial Instruments: Credit Losses.” The objective of the standard is to provide information about expected credit losses on financial instruments at each reporting date, and to change how other than temporary impairments on investments securities are recorded. The standard will become effective for the Company beginning on January 1, 2020 with early adoption permitted. The Company is currently evaluating the guidance to determine the potential impact on its financial condition, results of operations and cash flows, and financial statement disclosures. In January 2017, FASB issued an Accounting Standard Update entitled, “ASU 2017-01, Business Combinations: Clarifying the Definition of a Business.” The objective of the standard is to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions of assets or businesses. The Company adopted this standard on a prospective basis as of January 1, 2017. The adoption of this standard did not have a material impact on the Company’s financial condition, results of operations and cash flows, or financial statement disclosures. In May 2017, FASB issued an Accounting Standard Update entitled, “ASU 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting.” The objective of the standard is to provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. The standard is applied prospectively to awards modified on or after the adoption date. The Company early adopted this standard on April 1, 2017. The adoption did not have a material impact on the Company’s financial condition, results of operations and cash flows. |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Summary of Basic and Diluted Net Income (Loss) Per Share | The following table summarizes the computation of basic and diluted net income (loss) per share ($ in thousands, other than per share amounts): Three months ended Nine months ended 2017 2016 2017 2016 Net income (loss) – basic and diluted $ 50,021 $ (31,752 ) $ (66,329 ) $ (84,973 ) Weighted average shares outstanding – basic 143,357 140,928 142,876 140,369 Effect of dilutive securities: Dilutive effect of common shares from stock options 3,575 0 0 0 Dilutive effect of common shares from restricted stock units 1,136 0 0 0 Weighted average shares outstanding – diluted 148,068 140,928 142,876 140,369 Basic net income (loss) per share $ 0.35 $ (0.23 ) $ (0.46 ) $ (0.61 ) Diluted net income (loss) per share $ 0.34 $ (0.23 ) $ (0.46 ) $ (0.61 ) |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Available-for-Sale Securities | Investments consisted of available-for-sale securities as follows (in thousands): Amortized Gross Gross Fair September 30, 2017 U.S. Treasury securities $ 342,412 $ 1 $ (188 ) $ 342,225 Common stock investment in Immunomedics 12,677 29,263 0 41,940 Total $ 355,089 $ 29,264 $ (188 ) $ 384,165 Contractual Maturities (at date of purchase) Due in one year or less $ 201,836 $ 201,782 Due in one to two years 140,576 140,443 Total $ 342,412 $ 342,225 Amortized Gross Gross Fair December 31, 2016 U.S. Treasury securities $ 510,356 $ 68 $ (123 ) $ 510,301 Contractual Maturities (at date of purchase) Due in one year or less $ 229,856 $ 229,864 Due in one to two years 280,500 280,437 Total $ 510,356 $ 510,301 |
Summary of Investments Classified as Available-for-Sale Securities | Investments classified as available-for-sale securities are presented in the accompanying consolidated balance sheets as follows (in thousands): September 30, December 31, Short-term investments $ 322,258 $ 480,313 Long-term investments 19,967 29,988 Other non-current assets—Common stock investment in Immunomedics 41,940 0 Total $ 384,165 $ 510,301 |
Estimated Fair Value of Investments with Unrealized Losses | The aggregate estimated fair value of the Company’s investments with unrealized losses was as follows (in thousands): Period of continuous unrealized loss 12 Months or less Greater than 12 months Fair Gross Fair Gross September 30, 2017 U.S. Treasury securities $ 282,236 $ (174 ) $ 19,993 $ (14 ) December 31, 2016 U.S. Treasury securities $ 200,327 $ (123 ) $ NA $ NA |
Fair Value (Tables)
Fair Value (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of Debt and Equity Securities by Level within Fair Value Hierarchy | The following table presents the Company’s debt and equity securities by level within the fair value hierarchy for the periods presented (in thousands): Fair value measurement using: Quoted prices Other Significant Total As of September 30, 2017 Short-term investments—U.S. Treasury securities $ 322,258 $ 0 $ 0 $ 322,258 Long-term investments—U.S. Treasury securities 19,967 0 0 19,967 Other non-current assets – Common stock warrant in Immunomedics 0 78,714 0 78,714 Other non-current assets—Common stock investment in Immunomedics 41,940 0 0 41,940 Total $ 384,165 $ 78,714 $ 0 $ 462,879 Fair value measurement using: Quoted prices Other Significant Total As of December 31, 2016 Short-term investments—U.S. Treasury securities $ 480,313 $ 0 $ 0 $ 480,313 Long-term investments—U.S. Treasury securities 29,988 0 0 29,988 Total $ 510,301 $ 0 $ 0 $ 510,301 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | The following table presents the Company’s inventories of ADCETRIS (in thousands): September 30, December 31, Raw materials $ 51,656 $ 62,516 Work in process 0 8 Finished goods 9,181 5,600 Total $ 60,837 $ 68,124 |
Summary of Significant Accoun21
Summary of Significant Accounting Policies - Additional Information (Detail) | Sep. 30, 2017USD ($)shares | Sep. 30, 2017USD ($)Segmentshares | Dec. 31, 2016USD ($) | Feb. 28, 2017shares |
Summary Of Significant Accounting Policies [Line Items] | ||||
Number of reporting segment operated | Segment | 1 | |||
Accrued capital expenditures | $ 1,200,000 | $ 8,100,000 | ||
Cost method investment, carrying value | $ 5,000,000 | 5,000,000 | ||
Impairment of investments | $ 0 | |||
LTIP estimated unrecognized compensation expense | $ 36,000,000 | |||
Number of days allowed to the customer to return product for expiration or damage | 30 days | |||
Immunomedics [Member] | Common Stock Warrant in Immunomedics [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Warrant to purchase additional shares of Immunomedics common stock | shares | 8,700,000 | 8,700,000 | 8,700,000 | |
Collaboration and License Agreement Revenues [Member] | Takeda [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Performance obligation period, years | 10 years | |||
Collaboration and License Agreement Revenues [Member] | Genentech [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Performance obligation period, years | 17 years | |||
Minimum [Member] | Collaboration and License Agreement Revenues [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Performance obligation periods of each agreement, years | 1 year | |||
Maximum [Member] | Collaboration and License Agreement Revenues [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Performance obligation periods of each agreement, years | 3 years | |||
Remaining performance obligation period, years | 3 years |
Net Income (Loss) Per Share - A
Net Income (Loss) Per Share - Additional Information (Detail) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Stock Options and RSUs [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Weighted-average shares that have been excluded from the number of shares used to calculate diluted net income(loss) per share | 3,460,000 | 13,272,000 | 13,367,000 | 12,714,000 |
Net Income (Loss) Per Share - S
Net Income (Loss) Per Share - Summary of Basic and Diluted Net Income (Loss) Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Net income (loss) - basic and diluted | $ 50,021 | $ (31,752) | $ (66,329) | $ (84,973) |
Weighted average shares outstanding - basic | 143,357 | 140,928 | 142,876 | 140,369 |
Effect of dilutive securities: | ||||
Weighted average shares outstanding - diluted | 148,068 | 140,928 | 142,876 | 140,369 |
Basic net income (loss) per share | $ 0.35 | $ (0.23) | $ (0.46) | $ (0.61) |
Diluted net income (loss) per share | $ 0.34 | $ (0.23) | $ (0.46) | $ (0.61) |
Stock Options [Member] | ||||
Effect of dilutive securities: | ||||
Dilutive effect of common shares | 3,575 | 0 | 0 | 0 |
Restricted Stock Units [Member] | ||||
Effect of dilutive securities: | ||||
Dilutive effect of common shares | 1,136 | 0 | 0 | 0 |
Investments - Available-for-Sal
Investments - Available-for-Sale Securities (Detail) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, Amortized cost | $ 355,089 | |
Available-for-sale securities, Gross unrealized gains | 29,264 | |
Available-for-sale securities, Gross unrealized losses | (188) | |
Available-for-sale securities, Fair value | 384,165 | $ 510,301 |
Common Stock Investment in Immunomedics [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, Amortized cost | 12,677 | |
Available-for-sale securities, Gross unrealized gains | 29,263 | |
Available-for-sale securities, Gross unrealized losses | 0 | |
Available-for-sale securities, Fair value | 41,940 | |
Debt Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, Amortized cost | 342,412 | 510,356 |
Available-for-sale securities, Fair value | 342,225 | 510,301 |
Debt Securities [Member] | U.S. Treasury Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, Amortized cost | 342,412 | 510,356 |
Available-for-sale securities, Gross unrealized gains | 1 | 68 |
Available-for-sale securities, Gross unrealized losses | (188) | (123) |
Available-for-sale securities, Fair value | 342,225 | 510,301 |
Debt Securities [Member] | Contractual Maturities Due in One Year or Less [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, Amortized cost | 201,836 | 229,856 |
Available-for-sale securities, Fair value | 201,782 | 229,864 |
Debt Securities [Member] | Contractual Maturities Due in One to Two Years [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, Amortized cost | 140,576 | 280,500 |
Available-for-sale securities, Fair value | $ 140,443 | $ 280,437 |
Investments - Summary of Invest
Investments - Summary of Investments Classified as Available-for-Sale Securities (Detail) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Investments, Debt and Equity Securities [Abstract] | ||
Short-term investments | $ 322,258 | $ 480,313 |
Long-term investments | 19,967 | 29,988 |
Other non-current assets-Common stock investment in Immunomedics | 41,940 | 0 |
Total | $ 384,165 | $ 510,301 |
Investments - Estimated Fair Va
Investments - Estimated Fair Value of Investments with Unrealized Losses (Detail) - U.S. Treasury Securities [Member] - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, Period of continuous unrealized loss, 12 Months or less, Fair value | $ 282,236 | $ 200,327 |
Available-for-sale securities, Period of continuous unrealized loss, 12 Months or less, Gross unrealized losses | (174) | $ (123) |
Available-for-sale securities, Period of continuous unrealized loss, Greater than 12 months, Fair value | 19,993 | |
Available-for-sale securities, Period of continuous unrealized loss, Greater than 12 months, Gross unrealized losses | $ (14) |
Fair Value - Additional Informa
Fair Value - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Fair Value Disclosures [Abstract] | |
Transfer of investments between Levels 1, 2 and 3 | $ 0 |
Fair Value - Schedule of Debt a
Fair Value - Schedule of Debt and Equity Securities by Level within Fair Value Hierarchy (Detail) - Fair Value Measurements Recurring [Member] - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | $ 462,879 | $ 510,301 |
Common Stock Warrant in Immunomedics [Member] | Other Non-current Assets [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 78,714 | |
U.S. Treasury Securities [Member] | Short-term Investments [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 322,258 | 480,313 |
U.S. Treasury Securities [Member] | Long-term Investments [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 19,967 | 29,988 |
Common Stock Investment in Immunomedics [Member] | Common Stock [Member] | Other Non-current Assets [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 41,940 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 384,165 | 510,301 |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Common Stock Warrant in Immunomedics [Member] | Other Non-current Assets [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | U.S. Treasury Securities [Member] | Short-term Investments [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 322,258 | 480,313 |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | U.S. Treasury Securities [Member] | Long-term Investments [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 19,967 | 29,988 |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Common Stock Investment in Immunomedics [Member] | Common Stock [Member] | Other Non-current Assets [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 41,940 | |
Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 78,714 | 0 |
Other Observable Inputs (Level 2) [Member] | Common Stock Warrant in Immunomedics [Member] | Other Non-current Assets [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 78,714 | |
Other Observable Inputs (Level 2) [Member] | U.S. Treasury Securities [Member] | Short-term Investments [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Other Observable Inputs (Level 2) [Member] | U.S. Treasury Securities [Member] | Long-term Investments [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Other Observable Inputs (Level 2) [Member] | Common Stock Investment in Immunomedics [Member] | Common Stock [Member] | Other Non-current Assets [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | |
Significant Unobservable Inputs (Level 3) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Significant Unobservable Inputs (Level 3) [Member] | Common Stock Warrant in Immunomedics [Member] | Other Non-current Assets [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | |
Significant Unobservable Inputs (Level 3) [Member] | U.S. Treasury Securities [Member] | Short-term Investments [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Significant Unobservable Inputs (Level 3) [Member] | U.S. Treasury Securities [Member] | Long-term Investments [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | $ 0 |
Significant Unobservable Inputs (Level 3) [Member] | Common Stock Investment in Immunomedics [Member] | Common Stock [Member] | Other Non-current Assets [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | $ 0 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories (Detail) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 51,656 | $ 62,516 |
Work in process | 0 | 8 |
Finished goods | 9,181 | 5,600 |
Total | $ 60,837 | $ 68,124 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2017 | Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | ||
Income tax benefits in investment and other income, net | $ 2,700 | $ 5,415 |
Immunomedics Stock Purchase A31
Immunomedics Stock Purchase Agreement - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Feb. 28, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Investment Holdings [Line Items] | |||||
Investment and other income, net | $ 82,218 | $ 660 | $ 84,460 | $ 1,903 | |
Immunomedics [Member] | |||||
Investment Holdings [Line Items] | |||||
Total consideration paid under stock purchase agreement | $ 14,700 | ||||
Share of Immunomedics common stock purchased | 3,000,000 | ||||
Warrant exercise price | $ 4.90 | ||||
Relative fair value, common stock | $ 12,700 | ||||
Relative fair value, warrant | $ 2,000 | ||||
Immunomedics [Member] | Common Stock Warrant in Immunomedics [Member] | |||||
Investment Holdings [Line Items] | |||||
Warrant to purchase additional shares of Immunomedics common stock | 8,700,000 | 8,700,000 | 8,700,000 | ||
Warrants fair value | $ 78,700 | $ 78,700 | |||
Immunomedics [Member] | Changes in Fair Value of Warrant Derivative [Member] | Common Stock Warrant in Immunomedics [Member] | |||||
Investment Holdings [Line Items] | |||||
Investment and other income, net | $ 78,700 | 76,700 | |||
Investment and Other Income (Loss), Net [Member] | Immunomedics [Member] | |||||
Investment Holdings [Line Items] | |||||
Impairment of warrant | $ 2,000 |
Legal Matters - Additional Info
Legal Matters - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2017 | |
Loss Contingencies [Line Items] | |
Lawsuit filing date description | On February 13, 2017, the Company was named a co-defendant in a lawsuit filed by venBio Select Advisors LLC, or venBio, in the Delaware Chancery Court against the members of the board of directors of Immunomedics. |
Name of Plaintiff | VenBio |
Name of Defendant | Members of the board of directors of Immunomedics |
Shareholder Class Action [Member] | |
Loss Contingencies [Line Items] | |
Lawsuit filing date description | On January 10, 2017, the Company became a named defendant in a securities class action complaint filed in the United States District Court for the Western District of Washington, or the Court, seeking compensatory damages of an undisclosed amount. |
Shareholder Derivative Action [Member] | |
Loss Contingencies [Line Items] | |
Lawsuit filing date description | On March 29, 2017, a stockholder derivative lawsuit was filed in Washington Superior Court for the County of Snohomish, or the Snohomish County Superior Court, naming as defendants certain of the Company’s current and former executive officers and members of its board of directors. The Company is named as a nominal defendant. |
Subsequent Event - Additional I
Subsequent Event - Additional Information (Detail) - USD ($) $ in Thousands | Oct. 01, 2017 | Sep. 30, 2017 | Sep. 30, 2016 |
Subsequent Event [Line Items] | |||
Purchases of property and equipment | $ 42,615 | $ 18,885 | |
Assignment Agreement [Member] | |||
Subsequent Event [Line Items] | |||
Purchases of property and equipment | $ 17,800 | ||
Asset Purchase Agreement [Member] | |||
Subsequent Event [Line Items] | |||
Asset purchase agreement closing day | Oct. 1, 2017 | ||
Asset Purchase Agreement [Member] | Subsequent Event [Member] | |||
Subsequent Event [Line Items] | |||
Asset purchase agreement payment | $ 25,500 | ||
Date of acquisition | Oct. 1, 2017 | ||
Clinical Manufacturing Services Agreement [Member] | Subsequent Event [Member] | |||
Subsequent Event [Line Items] | |||
Agreement expiration date | Dec. 31, 2018 |