Document and Entity Information
Document and Entity Information Document - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 26, 2018 | Jun. 30, 2017 | |
Document Information | |||
Entity Registrant Name | LEXICON PHARMACEUTICALS, INC./DE | ||
Entity Central Index Key | 1,062,822 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 105,591,828 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 715,300,000 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 61,661 | $ 46,600 |
Short-term investments | 249,127 | 299,904 |
Accounts receivable, net of allowances of $4 | 4,825 | 7,492 |
Inventory | 1,948 | 0 |
Prepaid expenses and other current assets | 4,434 | 3,878 |
Total current assets | 321,995 | 357,874 |
Property and equipment, net of accumulated depreciation and amortization of $58,623 and $59,875, respectively | 17,687 | 19,390 |
Goodwill | 44,543 | 44,543 |
Other intangible assets | 51,885 | 53,357 |
Other assets | 429 | 461 |
Total assets | 436,539 | 475,625 |
Current liabilities: | ||
Accounts payable | 57,652 | 52,877 |
Accrued liabilities | 12,282 | 32,114 |
Current portion of deferred revenue | 40,099 | 63,372 |
Current portion of long-term debt, net of deferred issuance costs | 14,094 | 16,280 |
Total current liabilities | 124,127 | 164,643 |
Deferred revenue, net of current portion | 22,428 | 48,934 |
Long-term debt, net of deferred issuance costs | 231,576 | 85,167 |
Deferred tax liabilities | 6,014 | 18,675 |
Other long-term liabilities | 292 | 805 |
Total liabilities | 384,437 | 318,224 |
Commitments and contingencies | ||
Equity: | ||
Preferred stock, $.01 par value; 5,000 shares authorized; no shares issued and outstanding | 0 | 0 |
Common stock, $.001 par value; 225,000 shares authorized; 105,711 and 104,582 shares issued, respectively | 106 | 105 |
Additional paid-in capital | 1,435,526 | 1,411,222 |
Accumulated deficit | (1,381,404) | (1,250,363) |
Accumulated other comprehensive loss | (222) | (195) |
Treasury stock, at cost, 122 and 306 shares, respectively | (1,904) | (3,368) |
Total equity | 52,102 | 157,401 |
Total liabilities and equity | $ 436,539 | $ 475,625 |
Balance Sheet Parentheticals
Balance Sheet Parentheticals - USD ($) shares in Thousands, $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Allowance for doubtful accounts receivable | $ 4 | $ 4 |
Accumulated depreciation and amortization, property and equipment | $ 58,623 | $ 59,875 |
Preferred stock, par value per share | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 5,000 | 5,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value per share | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 225,000 | 225,000 |
Treasury stock, shares | 122 | 306 |
Common Stock | ||
Common stock, shares issued | 105,711 | 104,582 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) shares in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenues: | |||
Net product revenue | $ 15,890,000 | $ 0 | $ 0 |
Collaborative agreements | 74,267,000 | 83,182,000 | 129,728,000 |
Royalties and other revenue | 178,000 | 155,000 | 286,000 |
Total revenues | 90,335,000 | 83,337,000 | 130,014,000 |
Operating expenses: | |||
Cost of Goods Sold | 1,899,000 | 0 | 0 |
Research and development, including stock-based compensation of $4,905, $3,938 and $3,693, respectively | 156,813,000 | 178,151,000 | 95,187,000 |
Increase (decrease) in fair value of Symphony Icon, Inc. purchase liability | 2,101,000 | (703,000) | 5,927,000 |
General and administrative, including stock-based compensation of $4,567, $3,514 and $3,150, respectively | 66,203,000 | 43,044,000 | 23,835,000 |
Impairment loss on buildings | 0 | 0 | 3,597,000 |
Total operating expenses | 227,016,000 | 220,492,000 | 128,546,000 |
Income (loss) from operations | (136,681,000) | (137,155,000) | 1,468,000 |
Interest expense | (6,984,000) | (6,567,000) | (6,722,000) |
Interest and other income, net | 1,954,000 | 2,293,000 | 572,000 |
Consolidated net loss before taxes | (141,711,000) | (141,429,000) | (4,682,000) |
Deferred Income Tax Expense (Benefit) | (12,661,000) | 0 | 0 |
Income tax benefit | 0 | 0 | |
Consolidated net loss | $ (129,050,000) | $ (141,429,000) | $ (4,682,000) |
Consolidated net loss per common share, basic and diluted | $ (1.23) | $ (1.36) | $ (0.05) |
Shares used in computing consolidated net loss per common share, basic and diluted | 105,237 | 103,863 | 103,591 |
Other comprehensive loss: | |||
Unrealized gain (loss) on investments | $ (27,000) | $ 24,000 | $ (156,000) |
Comprehensive loss | $ (129,077,000) | $ (141,405,000) | $ (4,838,000) |
Statements of Comprehensive Los
Statements of Comprehensive Loss Parentheticals (Parentheticals) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Stock-based compensation expense associated with research and development expense | $ 4,905 | $ 3,938 | $ 3,693 |
Stock-based compensation expense associated with general and administrative expense | $ 4,567 | $ 3,514 | $ 3,150 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Gain (Loss) | Treasury Stock |
Balance, shares at Dec. 31, 2014 | 103,663 | |||||
Balance, value at Dec. 31, 2014 | $ 284,018 | $ 104 | $ 1,390,619 | $ (1,104,252) | $ (63) | $ (2,390) |
Stock-based compensation | 6,843 | $ 0 | 6,843 | 0 | 0 | 0 |
Issuance of common stock to designees of Symphony Icon Holdings LLC, value | 0 | |||||
Issuance of common stock under Equity Incentive Plans, shares | 197 | |||||
Issuance of common stock under Equity Incentive Plans, value | 114 | $ 0 | 114 | 0 | 0 | 0 |
Repurchase of common stock | (357) | 0 | 0 | 0 | 0 | 357 |
Consolidated net loss | (4,682) | 0 | 0 | (4,682) | 0 | 0 |
Unrealized gain (loss) on investments | (156) | $ 0 | 0 | 0 | (156) | 0 |
Balance, shares at Dec. 31, 2015 | 103,860 | |||||
Other | 70 | |||||
Balance, value at Dec. 31, 2015 | 285,850 | $ 104 | 1,397,646 | (1,108,934) | (219) | (2,747) |
Stock-based compensation | 7,452 | $ 0 | 7,452 | 0 | 0 | 0 |
Issuance of common stock to designees of Symphony Icon Holdings LLC, value | 0 | |||||
Issuance of common stock under Equity Incentive Plans, shares | 722 | |||||
Issuance of common stock under Equity Incentive Plans, value | 6,125 | $ 1 | 6,124 | 0 | 0 | 0 |
Repurchase of common stock | (621) | 0 | 0 | 0 | 0 | 621 |
Consolidated net loss | (141,429) | 0 | 0 | (141,429) | 0 | 0 |
Unrealized gain (loss) on investments | 24 | $ 0 | 0 | 0 | 24 | 0 |
Balance, shares at Dec. 31, 2016 | 104,582 | |||||
Balance, value at Dec. 31, 2016 | 157,401 | $ 105 | 1,411,222 | (1,250,363) | (195) | (3,368) |
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification | 0 | 1,991 | (1,991) | 0 | 0 | |
Stock-based compensation | 9,472 | $ 0 | 9,472 | 0 | 0 | 0 |
Issuance of common stock to designees of Symphony Icon Holdings LLC, shares | 660 | |||||
Issuance of common stock to designees of Symphony Icon Holdings LLC, value | 10,499 | 10,499 | 0 | 0 | 0 | |
Issuance of common stock under Equity Incentive Plans, shares | 469 | |||||
Issuance of common stock under Equity Incentive Plans, value | 5,486 | $ 1 | 5,485 | 0 | 0 | 0 |
Issuance of Treasury Stock | 0 | (3,143) | 0 | 0 | (3,143) | |
Repurchase of common stock | (1,679) | 0 | 0 | 0 | 0 | (1,679) |
Consolidated net loss | (129,050) | 0 | 0 | (129,050) | 0 | 0 |
Unrealized gain (loss) on investments | (27) | $ 0 | 0 | 0 | (27) | 0 |
Balance, shares at Dec. 31, 2017 | 105,711 | |||||
Balance, value at Dec. 31, 2017 | $ 52,102 | $ 106 | $ 1,435,526 | $ (1,381,404) | $ (222) | $ (1,904) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities: | |||
Consolidated net loss | $ (129,050) | $ (141,429) | $ (4,682) |
Adjustments to reconcile consolidated net loss to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 3,399 | 2,056 | 727 |
Impairment of assets | 0 | 0 | 3,597 |
Increase (decrease) in fair value of Symphony Icon, Inc. purchase liability | 2,101 | (703) | 5,927 |
Stock-based compensation | 9,472 | 7,452 | 6,843 |
(Gain) loss on disposal of property and equipment | 3 | 16 | (47) |
Amortization of debt issuance costs | 599 | 527 | 520 |
Deferred tax benefit | (12,661) | 0 | 0 |
Changes in operating assets and liabilities: | |||
(Increase) decrease in accounts receivable | 166 | (4,080) | 124 |
Increase in inventories | (1,948) | 0 | 0 |
(Increase) decrease in prepaid expenses and other current assets | (557) | 6,259 | (5,373) |
(Increase) decrease in other assets | 33 | (32) | (416) |
Increase (decrease) in accounts payable and other liabilities | (7,172) | 27,650 | 6,203 |
Increase (decrease) in deferred revenue | (49,779) | (73,344) | 171,353 |
Net cash provided by (used in) operating activities | (185,394) | (175,628) | 184,776 |
Cash flows from investing activities: | |||
Purchases of property and equipment | (228) | (231) | (910) |
Proceeds from disposal of property and equipment | 0 | 0 | 335 |
Purchases of investments | (267,873) | (425,673) | (326,446) |
Maturities of investments | 318,623 | 444,156 | 210,000 |
Net cash provided by (used in) investing activities | 50,522 | 18,252 | (117,021) |
Cash flows from financing activities: | |||
Proceeds from issuance of common stock, net of fees | 7,987 | 3,624 | 114 |
Repurchase of common stock | (1,679) | (621) | (357) |
Proceeds from debt borrowings, net of fees | 145,905 | 0 | 0 |
Repayment of debt borrowings | (2,280) | (2,016) | (1,859) |
Other financing activities | 0 | 0 | 70 |
Net cash provided by (used in) financing activities | 149,933 | 987 | (2,032) |
Net increase (decrease) in cash and cash equivalents | 15,061 | (156,389) | 65,723 |
Cash and cash equivalents at beginning of year | 46,600 | 202,989 | 137,266 |
Cash and cash equivalents at end of year | 61,661 | 46,600 | 202,989 |
Supplemental disclosure of cash flow information: | |||
Cash paid for interest | 5,870 | 6,050 | 6,270 |
Supplemental disclosure of noncash investing and financing activities: | |||
Unrealized gain (loss) on investments | (27) | 24 | (156) |
Common stock issued in satisfaction of Symphony Icon base payment obligation | $ 10,499 | $ 0 | $ 0 |
Organization and Operations
Organization and Operations | 12 Months Ended |
Dec. 31, 2017 | |
Organization and Operations [Abstract] | |
Organization and Operations | Organization and Operations Lexicon Pharmaceuticals, Inc. (“Lexicon” or the “Company”) is a Delaware corporation incorporated on July 7, 1995. Lexicon was organized to discover the functions and pharmaceutical utility of genes and use those gene function discoveries in the discovery and development of pharmaceutical products for the treatment of human disease. Lexicon has financed its operations from inception primarily through sales of common and preferred stock, contract and milestone payments to it under strategic collaborations and other research and development collaborations, target validation, database subscription and technology license agreements, product sales, government grants and contracts and financing under debt and lease arrangements. The Company’s future success is dependent upon many factors, including, but not limited to, its ability to successfully commercialize XERMELO (telotristat ethyl) and any other products which gain regulatory approval, develop and obtain regulatory approval for its other drug candidates, achieve milestones under its collaboration agreements, establish new collaboration and license agreements, obtain and enforce patents and other proprietary rights in its discoveries, comply with federal and state regulations, and maintain sufficient capital to fund its activities. As a result of the aforementioned factors and the related uncertainties, there can be no assurance of the Company’s future success. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation: The accompanying consolidated financial statements include the accounts of Lexicon and its wholly-owned subsidiaries. Intercompany transactions and balances are eliminated in consolidation. Use of Estimates: The preparation of financial statements in conformity with U. S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. Cash, Cash Equivalents and Short-Term Investments: Lexicon considers all highly-liquid investments with original maturities of three months or less to be cash equivalents. As of December 31, 2017 and December 31, 2016 , short-term investments consist of U.S. treasury bills and corporate debt securities. The Company’s short-term investments are classified as available-for-sale securities and are carried at fair value, based on quoted market prices of the securities. The Company views its available-for-sale securities as available for use in current operations regardless of the stated maturity date of the security. Unrealized gains and losses on such securities are reported as a separate component of stockholders’ equity. Net realized gains and losses, interest and dividends are included in interest income. The cost of securities sold is based on the specific identification method. Accounts Receivable: Lexicon records trade accounts receivable in the normal course of business related to the sale of products or services. The allowance for doubtful accounts takes into consideration such factors as historical write-offs, the economic climate and other factors that could affect collectibility. Write-offs are evaluated on a case by case basis. Inventory: Inventories are determined at the lower of cost or market value with cost determined under the specific identification method and may consist of raw materials, work in process and finished goods. The Company began capitalizing inventory during 2017 after the approval of XERMELO by the FDA, as the related costs were expected to be recoverable through the commercialization of the product. Costs incurred prior to approval of XERMELO were recorded as research and development expense in the consolidated statements of comprehensive loss. As a result, cost of sales for approximately the next two years will reflect a lower average per unit cost of materials. Inventory consisted of the following as of December 31, 2017 (in thousands): Raw materials $ 616 Work-in-process 149 Finished goods 1,183 Total inventory $ 1,948 Concentration of Credit Risk: Lexicon’s cash equivalents, investments and accounts receivable represent potential concentrations of credit risk. The Company attempts to minimize potential concentrations of risk in cash equivalents and investments by placing investments in high-quality financial instruments. The Company’s accounts receivable are unsecured and are concentrated in pharmaceutical and biotechnology companies located in Europe and the United States. The Company has not experienced any significant credit losses to date. In 2017, customers in France and the United States represented 82% and 18% of revenue, respectively. In 2016, customers in France and the United States represented 99% and 1% , respectively. In 2015, customers in France and the United States represented 99% and 1% of revenue, respectively. At December 31, 2017 , management believes that the Company has no significant concentrations of credit risk. Segment Information and Significant Customers: Lexicon operates in one business segment, which primarily focuses on the discovery, development and commercialization of pharmaceutical products for the treatment of human disease. Substantially all of the Company’s revenues have been derived from drug discovery alliances, target validation collaborations for the development and, in some cases, analysis of the physiological effects of genes altered in knockout mice, technology licenses, subscriptions to its databases, product sales, government grants and contracts and compound library sales. In 2017, Sanofi and Ipsen Pharma SAS (“Ipsen”) represented 64% and 18% of revenues, respectively. In 2016 , Sanofi and Ipsen represented 90% and 9% of revenues, respectively. In 2015 , Sanofi represented 98% of revenues. Other Intangible Assets: Other intangible assets, net consist of in-process research and development acquired in business combinations, which are reported at fair value, less accumulated amortization. Intangible assets with finite lives are amortized using the straight-line method over their estimated useful lives. During 2017 , intangible assets relating to XERMELO of $24.7 million were reclassified from indefinite-lived to finite-lived assets following the approval of XERMELO by the FDA. The Company recorded $1.5 million in amortization expense related to this asset, which is recorded as cost of sales in the accompanying consolidated statements of comprehensive loss for the year ended December 31, 2017 . Estimated future amortization expense for intangible assets as of December 31, 2017 is as follows: For the Year Ending December 31 (in thousands) 2018 $ 1,766 2019 1,766 2020 1,766 2021 1,766 2022 1,766 Thereafter 14,417 $ 23,247 Property and Equipment: Property and equipment that is held and used is carried at cost and depreciated using the straight-line method over the estimated useful life of the assets which ranges from three to 40 years. Maintenance, repairs and minor replacements are charged to expense as incurred. Leasehold improvements are amortized over the shorter of the estimated useful life or the remaining lease term. Significant renewals and betterments are capitalized. Impairment of Long-Lived Assets: Long-lived assets and certain identifiable intangible assets to be held and used are reviewed for impairment when events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of assets to be held and used is measured by comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount that the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. During 2015, the Company determined that its buildings were impaired and therefore recorded an impairment loss of $3.6 million , which was recorded in impairment loss on buildings in the accompanying consolidated statements of comprehensive loss. There were no impairments of long-lived assets, including finite-lived intangible assets, in 2017 or 2016 . Indefinite lived intangible assets are also tested annually for impairment and whenever indicators of impairment are present. When performing the impairment assessment, the Company first assesses qualitative factors to determine whether it is necessary to recalculate the fair value of its intangible assets. If management believes, as a result of the qualitative assessment, that it is more likely than not that the fair value of the intangible assets is less than its carrying amount, the Company calculates the asset’s fair value. If the carrying value of the asset exceeds its fair value, then the intangible asset is written down to its fair value. There were no impairments of indefinite lived intangible assets in 2017 , 2016 or 2015 . Goodwill Impairment: Goodwill is not amortized, but is tested at least annually for impairment at the reporting unit level. The Company has determined that the reporting unit is the single operating segment disclosed in its current financial statements. Impairment is the condition that exists when the carrying amount of goodwill exceeds its implied fair value. The first step in the impairment process is to determine the fair value of the reporting unit and then compare it to the carrying value, including goodwill. If the fair value exceeds the carrying value, no further action is required and no impairment loss is recognized. Additional impairment assessments may be performed on an interim basis if the Company encounters events or changes in circumstances that would indicate that, more likely than not, the carrying value of goodwill has been impaired. There was no impairment of goodwill in 2017 , 2016 or 2015 . Revenue Recognition: Revenues are recognized when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price is fixed or determinable and collectibility is reasonably assured. Product Revenues Product revenues consist of commercial sales of XERMELO in the United States and sales of bulk tablets of XERMELO to Ipsen. Product revenues are recognized once the Company meets all four revenue recognition criteria described above. In March 2017, Lexicon began shipping XERMELO to its customers in the United States. The Company recognizes revenue for product sales of XERMELO at the time the product is received by its specialty pharmacy customers, net of allowances for customer credits, including estimated rebates, chargebacks, discounts, returns, distribution service fees, and government rebates, such as Medicare Part D coverage gap reimbursements in the United States. Product shipping and handling costs are included in cost of sales. Customer Credits: The Company’s specialty pharmacy customers are offered various forms of consideration, including allowances, service fees and prompt payment discounts. The Company expects the specialty pharmacies will earn prompt payment discounts and, therefore, the Company deducts the full amount of these discounts from total product sales when revenues are recognized. Service fees are also deducted from product sales as they are earned. Rebates: Allowances for rebates include mandated discounts under the Medicaid Drug Rebate Program. Rebate amounts are based upon contractual agreements or legal requirements with public sector (e.g. Medicaid) benefit providers. Rebates are amounts owed after the final dispensing of the product to a benefit plan participant and are based upon contractual agreements or legal requirements with public sector benefit providers. The allowance for rebates is based on statutory discount rates and expected utilization. The Company’s estimates for expected utilization of rebates are based in part on third party market research data, and data received from the specialty pharmacies. Rebates are generally invoiced and paid in arrears so that the accrual balance consists of an estimate of the amount expected to be incurred for the current quarter’s activity, plus an accrual balance for known prior quarter’s unpaid rebates. If actual future rebates vary from estimates, the Company may need to adjust prior period accruals, which would affect revenue in the period of adjustment. Chargebacks: Chargebacks are discounts that occur when contracted customers purchase directly from a specialty pharmacy. Contracted customers, which currently consist primarily of Public Health Service institutions, non-profit clinics, and Federal government entities purchasing via the Federal Supply Schedule, generally purchase the product at a discounted price. The specialty pharmacy, in turn, charges back to Lexicon the difference between the price initially paid by the specialty pharmacy and the discounted price paid to the specialty pharmacy by the customer. The allowance for chargebacks is based on known sales to contracted customers. Medicare Part D Coverage Gap: Medicare Part D prescription drug benefit mandates manufacturers to fund 50% of the Medicare Part D insurance coverage gap for prescription drugs sold to eligible patients. The Company’s estimates for the expected Medicare Part D coverage gap are based on data received from the specialty pharmacies. Funding of the coverage gap is generally invoiced and paid in arrears so that the accrual balance consists of an estimate of the amount expected to be incurred for the current quarter’s activity, plus an accrual balance for known prior quarters. If actual future funding varies from estimates, the Company may need to adjust prior period accruals, which would affect revenue in the period of adjustment. Co-payment assistance: Patients who have commercial insurance and meet certain eligibility requirements may receive co-payment assistance. The Company accrues a liability for co-payment assistance based on actual program participation and estimates of program redemption using data provided by third-party administrators. Collaborative Agreements Revenues under collaborative agreements include both license revenue and contract research revenue. Activities under collaborative agreements are evaluated to determine if they represent a multiple element revenue agreement. The Company identifies the deliverables included within the agreement and evaluates which deliverables represent separate units of accounting. The Company accounts for those components as separate units of accounting if the following two criteria are met: • The delivered item or items have value to the customer on a stand-alone basis; and • If there is a general right of return relative to the delivered items, delivery or performance of the undelivered items is considered probable and within the Company’s control. Factors considered in this determination include, among other things, whether any other vendors sell the items separately and if the licensee could use the delivered item for its intended purpose without the receipt of the remaining deliverables. If multiple deliverables included in an arrangement are separable into different units of accounting, the Company allocates the arrangement consideration to those units of accounting. The amount of allocable arrangement consideration is limited to amounts that are fixed or determinable. Arrangement consideration is allocated at the inception of the arrangement to the identified units of accounting based on their relative estimated selling price. Revenue is recognized for each unit of accounting when the appropriate revenue recognition criteria are met. Future milestone payments that are contingent upon the achievement of a substantive milestone are recognized in their entirety in the period in which the milestone is achieved. A milestone is substantive if: • The consideration payable to the Company is commensurate with the Company’s performance necessary to achieve the milestone or the increase in value to the collaboration resulting from the Company’s performance; • The milestone relates solely to the Company’s past performance; and • The milestone is reasonable relative to all of the other deliverables and payments within the arrangement. Commercial milestones will be accounted for as royalties and recorded as revenue upon achievement of the milestone, assuming all other revenue recognition criteria are met. Subscription and license fees are recognized as other revenue upon the grant of the technology license when performance is complete and there is no continuing involvement. Royalty revenues are recognized as earned in accordance with the contract terms at the time the royalty amount is fixed and determinable based on information received from the sublicensees and at the time collectibility is reasonably assured. Cost of Sales: Cost of sales consists of third-party manufacturing costs, freight and indirect overhead costs associated with sales of XERMELO. The Company began capitalizing inventory during 2017 following approval of XERMELO by the FDA, as the related costs were expected to be recoverable through the commercialization of the product. Costs incurred prior to approval of XERMELO have been recorded as research and development expense in the consolidated statements of comprehensive loss. As a result, cost of sales for approximately the next two years will reflect a lower average per unit cost of materials. Product shipping and handling costs are included in cost of sales. Cost of sales also includes the amortization of the in-process research and development intangible asset for XERMELO using the straight-line method over the estimated useful life of 14 years. Research and Development Expenses: Research and development expenses consist of costs incurred for company-sponsored as well as collaborative research and development activities. These costs include direct and research-related overhead expenses and are expensed as incurred. Technology license fees for technologies that are utilized in research and development and have no alternative future use are expensed when incurred. Substantial portions of the Company’s preclinical and clinical trials are performed by third-party laboratories, medical centers, contract research organizations and other vendors. For preclinical studies, the Company accrues expenses based upon estimated percentage of work completed and the contract milestones remaining. For clinical studies, expenses are accrued based upon the number of patients enrolled and the duration of the study. The Company monitors patient enrollment, the progress of clinical studies and related activities to the extent possible through internal reviews of data reported to the Company by the vendors and clinical site visits. The Company’s estimates depend on the timeliness and accuracy of the data provided by the vendors regarding the status of each program and total program spending. The Company periodically evaluates the estimates to determine if adjustments are necessary or appropriate based on information it receives. Stock-Based Compensation: The Company recognizes compensation expense in its statements of comprehensive loss for share-based payments, including stock options and restricted stock units issued to employees, based on their fair values on the date of the grant, with the compensation expense recognized over the period in which an employee is required to provide service in exchange for the stock award. Stock-based compensation expense for awards without performance conditions is recognized on a straight-line basis. Stock-based compensation expense for awards with performance conditions is recognized over the period from the date the performance condition is determined to be probable of occurring through the time the applicable condition is met. As of December 31, 2017 , stock-based compensation cost for all outstanding unvested options and restricted stock units was $18.6 million , which is expected to be recognized over a weighted-average period of 1.3 years. The fair value of stock options is estimated at the date of grant using the Black-Scholes method. The Black-Scholes option-pricing model requires the input of subjective assumptions. Because the Company’s employee stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management’s opinion, the existing models do not necessarily provide a reliable single measure of the fair value of its employee stock options. For purposes of determining the fair value of stock options, the Company segregates its options into two homogeneous groups, based on exercise and post-vesting employment termination behaviors, resulting in a change in the assumptions used for expected option lives and forfeitures. Expected volatility is based on the historical volatility in the Company’s stock price. The following weighted-average assumptions were used for options granted in the years ended December 31, 2017 , 2016 and 2015 , respectively: Expected Volatility Risk-free Interest Rate Expected Term Dividend Rate December 31, 2017: Employees 61% 1.7% 4 0 % Officers and non-employee directors 70% 2.2% 8 0 % December 31, 2016: Employees 63% 1.1% 4 0 % Officers and non-employee directors 83% 1.6% 8 0 % December 31, 2015: Employees 64% 1.2% 4 0 % Officers and non-employee directors 81% 1.8% 8 0 % Net Loss per Common Share: Net loss per common share is computed using the weighted average number of shares of common stock outstanding. Shares associated with convertible debt, stock options and restricted stock units are not included because they are antidilutive. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 12 Months Ended |
Dec. 31, 2017 | |
Recent Accounting Pronouncements [Abstract] | |
New Accounting Pronouncements and Changes in Accounting Principles [Text Block] | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers”, which amends FASB ASC Topic 606. ASU 2014-09 provides a single, comprehensive revenue recognition model for all contracts with customers. This standard contains principles for the determination of the measurement of revenue and the timing of when such revenue is recognized. Revenue recognition will reflect the transfer of goods or services to customers at an amount that is expected to be earned in exchange for those goods or services. In August 2015, the FASB issued ASU No. 2015-14, “Revenue from Contracts with Customers: Deferral of Effective Date”, which defers the effective date of ASU 2014-09 by one year. ASU 2014-09 is now effective for annual periods after December 15, 2017 including interim periods within that reporting period. Early application is permitted only for annual periods beginning after December 15, 2016, including interim periods within that reporting period. In 2016, the FASB issued four additional ASUs related to Topic 606: ASU Nos. 2016-08, 2016-10, 2016-12 and 2016-20. These ASUs clarify various aspects of the new revenue guidance, including principal versus agent considerations, identifying performance obligations and licensing, and they include other improvements and practical expedients. Two adoption methods are permitted; retrospectively to all prior reporting periods presented, with certain practical expedients; or the modified retrospective method with the cumulative effect of initially adopting the ASU recognized at the date of initial application. The Company has elected to adopt this new standard effective January 1, 2018, using the modified retrospective transition method. To date, the Company has assessed that ASU 2014-09 will not have a material impact on revenue recognition from product revenue. The Company’s only source of product revenue has been sales of XERMELO, which the Company received FDA approval for in February 2017, and subsequently, entered into a limited number of arrangements with specialty pharmacies (“SPs”) in the U.S. (collectively, the “customers”), under which the Company began shipping to its customers in March 2017. Under current GAAP, the Company recognizes revenue on its product sales when the customer obtains control of the product, which occurs upon delivery. Product revenue is recorded net of applicable reserves for variable consideration, including discounts and allowances. These estimates are based on the most likely amount method for relevant factors such as current contractual and statutory requirements, industry data and forecasted customer buying and payment patterns. The Company’s net product revenues reflect the Company’s best estimates of the amount of consideration to which it is entitled based on the terms of the respective underlying contracts. Under ASU 2014-09, the Company expects to be able to utilize a process and controls approach consistent with its historical process and based on the nature of its current contracts with customers, does not anticipate a significant amount of variable consideration subject to constraint. As a result, the Company does not believe that the adoption of this ASU will have a material impact on the timing or amount of revenues recognized related to its contracts with customers for the sale of product. The Company expects the accounting for contingent milestone payments to be the most significant change in the accounting for its license and collaboration agreements. Topic 605 provides guidance specific to the accounting for milestone payments, including the ability to defer the recognition of any milestones until received and, if certain criteria are met, the ability to recognize milestone payments as revenue when received. Under the Company’s current accounting policy, Lexicon recognizes contingent or milestone payments as revenue in the period that the payment-triggering event occurs or is achieved. However, under the new revenue standard, it is possible to recognize contingent or milestone payments before the payment-triggering event is completely achieved, subject to management’s assessment of the probability of achievement of the milestone and the likelihood of a significant reversal of such milestone revenue at each reporting date. This assessment may result in recognizing milestone revenue before the milestone event has been achieved. The Company expects to evaluate estimates and timing of milestone achievement and related variable consideration based on the most likely amount method in its application of this ASU to collaborative agreements. Estimating variable consideration and the related constraint will require the use of significant management judgment. To date, the Company’s primary sources of collaboration revenue have been license and collaboration agreements with three separate third-party licensees: Texas Institute for Genomic Medicine (“TIGM”), Sanofi and Ipsen. The Company has performed an evaluation of the expected effect of adoption in its accounting for license and collaboration agreements as discussed further below. With respect to its contract with TIGM, the Company evaluated the variable consideration related to the remaining milestone in the adoption of this ASU and determined based on the most likely amount method that it was not probable that a significant reversal would occur and therefore, no constraint was required. As a result, under the modified retrospective method, the Company will record a $14.2 million cumulative-effect adjustment to its accumulated deficit on the date of adoption. With respect to its collaboration agreements with Sanofi and Ipsen, the Company evaluated the variable consideration relating to future milestone payments and determined, based on the most likely amount method, that the estimated amounts could be considered as part of the transaction price. The Company then evaluated the variable constraint and determined that the variable consideration amounts are constrained, primarily by future events that are not within the control of the Company. The future events primarily related to receipt of positive results from studies, approval from regulatory agencies, and upon achieving sales in certain locations. As a result, the Company has determined that there is no cumulative adjustment necessary for these agreements on the date of adoption. The adoption of the ASU will have no significant impact to the provision for income taxes and will have no impact to the net cash provided by or used in operating, investing or financing activities on the Company’s consolidated statements of cash flows. Estimated impacts from adoption of this ASU may differ upon the final adoption and implementation in the first quarter of 2018. As the Company completes its analysis of the accounting for the collaboration agreements under the new revenue standard, management is assessing the required changes to its accounting policies, systems and internal control over financial reporting. In January 2016, the FASB issued ASU No. 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities.” ASU 2016-01 requires that most equity investments be measured at fair value, with subsequent changes in fair value recognized in net income. The pronouncement also impacts financial liabilities under the fair value option and the presentation and disclosure requirements for financial instruments. This pronouncement is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, and early adoption is not permitted. The adoption of this ASU on January 1, 2018 is not expected to have a material impact on Lexicon’s consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, “Leases.” ASU 2016-02 requires companies that lease assets to recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, in its balance sheet. The pronouncement will also require additional disclosures about the amount, timing and uncertainty of cash flows arising from leases. This pronouncement is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, and early adoption is permitted. This ASU is required to be adopted using a modified retrospective approach. Management plans to adopt ASU 2016-02 on January 1, 2019, and anticipates that most of its operating leases will result in the recognition of additional assets and corresponding liabilities on the consolidated balance sheet. The Company does not expect that the implementation of the ASU will have a material impact on its financial position. The actual impact will depend on the Company’s lease portfolio at the time of adoption. The Company continues to assess all implications of the standard and related financial disclosures. In March 2016, the FASB issued ASU No. 2016-09, “Stock Compensation,” which is intended to simplify several aspects of the accounting for share-based payment award transactions. The Company adopted this pronouncement effective January 1, 2017. Upon adoption, the Company recognized approximately $6.1 million of accumulated excess tax benefits as deferred tax assets that under the previous guidance could not be recognized until the benefits were realized through a reduction in cash taxes paid. This part of the guidance is applied using a modified retrospective method with a cumulative-effect adjustment to the accumulated deficit for the excess tax benefits not previously recognized. However, given the full valuation allowance placed on the additional $6.1 million of deferred tax assets, the recognition of this provision of ASU 2016-09 had no impact to the Company’s accumulated deficit as of January 1, 2017. Additionally, the Company recorded an adjustment to accumulated deficit of $2.0 million as a result of making an entity-wide accounting policy election to account for forfeitures of share-based payment awards as they occur instead of estimating the number of awards that are expected to vest. |
Cash and Cash Equivalents and I
Cash and Cash Equivalents and Investments | 12 Months Ended |
Dec. 31, 2017 | |
Cash and Cash Equivalents and Investments [Abstract] | |
Cash and Cash Equivalents and Investments | Cash and Cash Equivalents and Investments The fair value of cash and cash equivalents and investments held at December 31, 2017 and 2016 are as follows: As of December 31, 2017 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (in thousands) Cash and cash equivalents $ 61,661 $ — $ — $ 61,661 Securities maturing within one year: U.S. treasury securities 222,316 — (168 ) 222,148 Corporate debt securities 27,033 — (54 ) 26,979 Total short-term investments $ 249,349 $ — $ (222 ) $ 249,127 Total cash and cash equivalents and investments $ 311,010 $ — $ (222 ) $ 310,788 As of December 31, 2016 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (in thousands) Cash and cash equivalents $ 46,600 $ — $ — $ 46,600 Securities maturing within one year: U.S. treasury securities 227,911 1 (107 ) 227,805 Corporate debt securities 72,188 1 (90 ) 72,099 Total short-term investments $ 300,099 $ 2 $ (197 ) $ 299,904 Total cash and cash equivalents and investments $ 346,699 $ 2 $ (197 ) $ 346,504 There were $7,000 in realized losses for the year ended December 31, 2017 . There were no realized gains or losses for the years ended December 31, 2016 and 2015 . |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Measurements [Abstract] | |
Fair Value Measurements | Fair Value Measurements The Company uses various inputs in determining the fair value of its investments and measures these assets on a recurring basis. Assets and liabilities recorded at fair value in the consolidated balance sheets are categorized by the level of objectivity associated with the inputs used to measure their fair value. The following levels are directly related to the amount of subjectivity associated with the inputs to fair valuation of these assets and liabilities: • Level 1 – quoted prices in active markets for identical assets, which include U.S. treasury securities • Level 2 – other significant observable inputs (including quoted prices for similar investments, market corroborated inputs, etc.), which include corporate debt securities • Level 3 – significant unobservable inputs (including the Company’s own assumptions in determining the fair value of the Symphony Icon purchase consideration liability) The inputs or methodology used for valuing securities are not necessarily an indication of the credit risk associated with investing in those securities. The following tables provide the fair value measurements of applicable Company assets and liabilities that are measured at fair value on a recurring basis according to the fair value levels defined above as of December 31, 2017 and 2016 . Assets and Liabilities at Fair Value As of December 31, 2017 Level 1 Level 2 Level 3 Total (in thousands) Assets Cash and cash equivalents $ 61,661 $ — $ — $ 61,661 Short-term investments 222,148 26,979 — 249,127 Total cash and cash equivalents and investments $ 283,809 $ 26,979 $ — $ 310,788 Assets and Liabilities at Fair Value As of December 31, 2016 Level 1 Level 2 Level 3 Total (in thousands) Assets Cash and cash equivalents $ 45,093 $ 1,507 $ — $ 46,600 Short-term investments 227,805 72,099 — 299,904 Total cash and cash equivalents and investments $ 272,898 $ 73,606 $ — $ 346,504 Liabilities Accrued liabilities $ — $ — $ 18,912 $ 18,912 Total liabilities $ — $ — $ 18,912 $ 18,912 The Company did not have any Level 3 assets during the years ended December 31, 2017 , 2016 and 2015 . Transfers between levels are recognized at the actual date of circumstance that caused the transfer. In 2016 , the Company’s Level 3 liabilities represented the contingent purchase consideration payable to Symphony Icon, and was estimated using a probability-based income approach utilizing an appropriate discount rate. Subsequent changes in the fair value of the Symphony Icon (“Symphony Icon”) purchase consideration liability are recorded as an increase or decrease in Symphony Icon purchase liability in the accompanying consolidated statements of comprehensive loss. The fair value of the Symphony Icon purchase consideration liability increased by $2.1 million during the year ended December 31, 2017 , decreased by $0.7 million during the year ended December 31, 2016 , and increased by $5.9 million during the year ended December 31, 2015 . The following table summarizes the change in consolidated balance sheet carrying value associated with Level 3 liabilities for the years ended December 31, 2015 , 2016 and 2017 . Other Long-term Liabilities (in thousands) Balance at January 1, 2015 $ 17,638 Change in valuation of purchase consideration payable to former Symphony Icon stockholders 5,927 Payment of base payment obligation with common stock and cash (750 ) Balance at December 31, 2015 22,815 Change in valuation of purchase consideration payable to former Symphony Icon stockholders (703 ) Payment of contingent payment obligation with cash (3,200 ) Balance at December 31, 2016 18,912 Change in valuation of purchase consideration payable to former Symphony Icon stockholders 2,101 Payment of contingent payment obligation with common stock and cash (21,013 ) Balance at December 31, 2017 $ — The Company also has assets that under certain conditions are subject to measurement at fair value on a non-recurring basis. These assets include goodwill associated with the acquisitions of Coelacanth Corporation in 2001 and Symphony Icon in 2010 and intangible assets associated with the acquisition of Symphony Icon in 2010. For these assets, measurement at fair value in periods subsequent to their initial recognition is applicable if one or more is determined to be impaired. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2017 | |
Property and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment at December 31, 2017 and 2016 are as follows: Estimated Useful Lives As of December 31, In Years 2017 2016 (in thousands) Computers and software 3-5 $ 4,605 $ 7,667 Furniture and fixtures 5-7 6,006 6,003 Laboratory equipment 3-7 3,423 3,423 Leasehold improvements 7-10 400 296 Buildings 15-40 59,212 59,212 Land — 2,664 2,664 Total property and equipment 76,310 79,265 Less: Accumulated depreciation and amortization (58,623 ) (59,875 ) Net property and equipment $ 17,687 $ 19,390 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Taxes [Abstract] | |
Income Taxes | Income Taxes The Tax Cuts and Jobs Act (the “2017 Tax Act”) was enacted on December 22, 2017. The 2017 Tax Act significantly changes U.S. corporate income tax laws, including reducing the U.S. corporate income tax rate from 35 percent to 21 percent beginning in 2018. At December 31, 2017 , Lexicon has not completed the accounting for the tax effects of the 2017 Tax Act; however, an estimate of the effects on the existing deferred tax balances has been made, as further discussed below. Lexicon recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been recognized differently in the financial statements and tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statement carrying amounts and tax bases of liabilities and assets using enacted tax rates and laws in effect in the years in which the differences are expected to reverse. Accordingly, Lexicon remeasured certain deferred tax assets and liabilities based on the newly enacted U.S. corporate income tax rate, which resulted in a decrease of $171.4 million . Lexicon will continue to make and refine calculations and estimates, which could potentially affect the measurement of the deferred tax balances or give rise to new deferred tax amounts. Where the Company has not yet been able to make reasonable estimates of the impact of certain elements, the Company has not recorded any amounts related to those elements and has continued accounting for them in accordance with ASC 740 on the basis of the tax laws in effect immediately prior to the enactment of the 2017 Tax Act. Deferred tax assets are evaluated for realization based on a more-likely-than-not criteria in determining if a valuation allowance should be provided. The components of Lexicon’s deferred tax assets (liabilities) at December 31, 2017 and 2016 are as follows: As of December 31, 2017 2016 (in thousands) Deferred tax assets: Net operating loss carryforwards $ 186,967 $ 258,405 Research and development tax credits 46,682 44,111 Orphan drug credits 26,524 24,233 Capitalized research and development 69,561 86,845 Stock-based compensation 3,923 7,060 Deferred revenue 12,950 39,307 Other 5,579 8,432 Total deferred tax assets 352,186 468,393 Deferred tax liabilities: Deferred tax liability related to acquisition of Symphony Icon (10,896 ) (18,675 ) Other (1 ) — Total deferred tax liabilities (10,897 ) (18,675 ) Less: valuation allowance (347,303 ) (468,393 ) Net deferred tax liabilities $ (6,014 ) $ (18,675 ) The $10.9 million deferred tax liability relates to the tax impact of future amortization or possible impairments associated with intangible assets acquired with Symphony Icon, which are not deductible for tax purposes. During 2017, after XERMELO was approved by the FDA, the intangible asset related to XERMELO became finite-lived and as a result $8.7 million of the related deferred tax liability could be considered as a source of taxable income. Lexicon does not believe it can estimate the reversal of the temporary difference related to the remaining assets acquired with sufficient certainty such that $6.0 million of the deferred tax liability is not considered as a source of taxable income in assessing the Company’s need for a valuation allowance in accordance with ASC 740 on the basis of the tax laws in effect immediately prior to the enactment of the 2017 Tax Act. At December 31, 2017 , Lexicon had both federal and state NOL carryforwards of approximately $851.4 million and $382.0 million , respectively. The federal and state NOL carryforwards will begin to expire in 2018. The Company’s R&D tax credit carryforwards of approximately $46.7 million began to expire in 2018. The orphan drug credit relates to a credit that is calculated as a percentage of expenditures for development of XERMELO, which has received Orphan Drug designation from the FDA. Utilization of the NOL, R&D credit and orphan drug credit carryforwards may be subject to a significant annual limitation due to ownership changes that have occurred previously or could occur in the future provided by Section 382 of the Internal Revenue Code. Based on the federal tax law limits and the Company’s cumulative loss position, Lexicon concluded it was appropriate to establish a full valuation allowance for its net deferred tax assets, excluding the deferred tax liability relating to the XERMELO finite-lived asset, until an appropriate level of profitability is sustained. During the year ended December 31, 2017 , the valuation allowance decreased $121.1 million , primarily due to the effect of the new U.S. federal corporate tax rate. Lexicon recorded income tax benefits of $12.7 million in the year ended December 31, 2017 . Of the $12.7 million tax benefits, $8.7 million is the release of a valuation allowance as a result of the ability to estimate the reversal of the deferred tax liability related to the intangible associated with XERMELO, as discussed above. The remaining $4.0 million was recorded to remeasure the deferred tax liability associated with the remaining indefinite-lived intangible asset associated with Symphony Icon at the newly enacted U.S. corporate income tax rate. There were no income tax benefits in the years ended December 31, 2016 and 2015 , respectively. As of December 31, 2017 and 2016 , the Company did not have any unrecognized tax benefits. The Company is primarily subject to U.S. federal and New Jersey and Texas state income taxes. The tax years 1995 to current remain open to examination by U.S. federal authorities and 2004 to current remain open to examination by state authorities. The Company’s policy is to recognize interest and penalties related to income tax matters in income tax expense. As of December 31, 2017 and 2016 , the Company had no accruals for interest or penalties related to income tax matters. |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill [Abstract] | |
Goodwill | Goodwill On July 12, 2001, Lexicon completed the acquisition of Coelacanth Corporation in a merger. Coelacanth, now Lexicon Pharmaceuticals (New Jersey), Inc., formed the core of the Company’s division responsible for small molecule compound discovery. The results of Lexicon Pharmaceuticals (New Jersey), Inc. are included in the Company’s results of operations for the period subsequent to the acquisition. Goodwill associated with the acquisition of $25.8 million , which represents the excess of the $36.0 million purchase price over the fair value of the underlying net identifiable assets, was assigned to the consolidated entity, Lexicon. On July 30, 2010, Lexicon exercised its Purchase Option (as defined in Note 10) and completed the acquisition of Symphony Icon, Inc. Goodwill associated with the acquisition of $18.7 million , which represents the assets recognized in connection with the deferred tax liability acquired and did not result from excess purchase price, was assigned to the consolidated entity, Lexicon. Goodwill is not subject to amortization, but is tested at least annually for impairment at the reporting unit level, which is the Company’s single operating segment. The Company performed an impairment test of goodwill on its annual impairment assessment date. This test did not result in an impairment of goodwill. |
Debt Obligations
Debt Obligations | 12 Months Ended |
Dec. 31, 2017 | |
Debt Obligations [Abstract] | |
Debt Obligations | Debt Obligations Convertible Notes. In November 2014, Lexicon completed an offering of $87.5 million in aggregate principal amount of its 5.25% Convertible Senior Notes due 2021 (the “Convertible Notes”). The conversion feature did not meet the criteria for bifurcation as required by generally accepted accounting principles and the entire principal amount was recorded as long-term debt on the Company’s consolidated balance sheets. The Convertible Notes are governed by an indenture (the “Indenture”), dated as of November 26, 2014, between the Company and Wells Fargo Bank, N.A., as trustee. The Convertible Notes bear interest at a rate of 5.25% per year, payable semiannually in arrears on June 1 and December 1 of each year, beginning on June 1, 2015. The Convertible Notes mature on December 1, 2021. The Company may not redeem the Convertible Notes prior to the maturity date, and no sinking fund is provided for the Convertible Notes. Holders of the Convertible Notes may convert their Convertible Notes at their option at any time prior to the close of business on the business day immediately preceding the maturity date. Upon conversion, the Company will deliver for each $1,000 principal amount of converted Convertible Notes a number of shares of its common stock equal to the conversion rate, as described in the Indenture. The conversion rate is initially 118.4553 shares of common stock per $1,000 principal amount of Convertible Notes (equivalent to an initial conversion price of $8.442 per share of common stock). The conversion rate is subject to adjustment in some events but will not be adjusted for any accrued and unpaid interest. In addition, following certain corporate events that occur prior to the maturity date, the Company will increase the conversion rate for a holder who elects to convert its Convertible Notes in connection with such a corporate event in certain circumstances. If the Company undergoes a fundamental change, holders may require the Company to repurchase for cash all or any portion of their Convertible Notes at a fundamental change repurchase price equal to 100% of the principal amount of the Convertible Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. In connection with the issuance of the Convertible Notes, the Company incurred $3.4 million of debt issuance costs, which offsets long-term debt on the consolidated balance sheets. The debt issuance costs are amortized as interest expense over the expected life of the Convertible Notes using the effective interest method. The Company determined the expected life of the debt was equal to the seven-year term of the Convertible Notes. As of December 31, 2017 , the balance of unamortized debt issuance costs was $1.9 million , which offsets long-term debt on the consolidated balance sheets. The fair value of the Convertible Notes was $127.3 million as of December 31, 2017 and was determined using Level 2 inputs based on the indicative pricing published by certain investment banks or trading levels of the Convertible Notes, which are not listed on any securities exchange or quoted on an inter-dealer automated quotation system. Mortgage Loan. In April 2004, Lexicon purchased its existing laboratory and office buildings and animal facilities in The Woodlands, Texas with proceeds from a $34.0 million third-party mortgage financing and $20.8 million in cash. The mortgage loan originally had a ten-year term with a 20-year amortization and a fixed interest rate of 8.23% . The mortgage was amended in September 2013 to extend the maturity date from April 2014 to April 2017, with the mortgage loan’s monthly payment amount and fixed interest rate each remaining unchanged. In April 2017, the mortgage was amended to extend the maturity date to April 2018, with the mortgage loan’s monthly payment amount and fixed interest rate each remaining unchanged. The mortgage had a principal balance of $14.1 million as of December 31, 2017 . This entire balance is recorded as current portion of long-term debt in the accompanying consolidated balance sheet as of December 31, 2017 as there is a balloon payment due in April 2018. Lexicon intends to refinance this debt prior to paying the balloon payment. The buildings and land that serve as collateral for the mortgage loan are included in property and equipment at $59.2 million and $2.7 million , respectively, before accumulated depreciation, as of December 31, 2017 . The fair value of Lexicon’s mortgage loan approximates its carrying value. The fair value of Lexicon’s mortgage loan was determined using Level 2 inputs using discounted cash flow analysis, based on the Company’s estimated current incremental borrowing rate. BioPharma Term Loan. In December 2017, Lexicon entered into a loan agreement with BioPharma Credit PLC and BioPharma Credit Investments IV Sub LP that provides up to $200 million borrowing capacity (the “BioPharma Term Loan”) available in two tranches, each maturing in December 2022. The BioPharma Term Loan bears interest at 9% per year, subject to additional interest if an event of default occurs and is continuing, and is payable quarterly. The first $150 million tranche was funded in December 2017. The second $50 million tranche is available for draw by March 2019 at Lexicon’s option if net XERMELO sales are greater than $25 million in the preceding quarter. The BioPharma Term Loan is subject to mandatory prepayment provisions that require prepayment upon a change of control or receipt of proceeds from certain non-ordinary course transfers of assets. The Company may prepay the BioPharma Term Loan in whole at its option at any time. Any prepayment of the BioPharma Term Loan is subject to customary make-whole premiums and prepayment premiums. The Company’s obligations under the BioPharma Term Loan are secured by a first lien security interest in substantially all of the assets of the Company and certain of its subsidiaries. The loan agreement contains certain customary representations and warranties, affirmative and negative covenants and events of default applicable to the Company and certain of its subsidiaries, including among other things, covenants restricting dispositions, fundamental changes in our business, mergers or acquisitions, indebtedness, encumbrances, distributions, investments, transactions with affiliates and subordinated debt. If an event of default occurs and is continuing, all amounts outstanding under the BioPharma Term Loan may be declared immediately due and payable. In connection with the BioPharma Term Loan, the Company incurred $4.1 million of debt issuance costs, which offsets long-term debt on the consolidated balance sheets. The debt issuance costs are amortized as interest expense over the expected life of the BioPharma Term Loan using the effective interest method. The Company determined the expected life of the debt was equal to the five-year term of the BioPharma Term Loan. The fair value of the BioPharma Term Loan approximates its carrying value. The fair value of the BioPharma Term Loan was determined using Level 2 inputs using discounted cash flow analysis, based on the Company’s estimated current incremental borrowing rate. The following table includes the aggregate scheduled future principal payments of the Company’s long-term debt as of December 31, 2017 : For the Year Ending December 31 (in thousands) 2018 $ 14,094 2019 — 2020 — 2021 87,500 2022 150,000 Thereafter — Total debt 251,594 Less deferred financing costs (5,924 ) Less current portion (14,094 ) Total long-term debt $ 231,576 |
Arrangements with Symphony Icon
Arrangements with Symphony Icon, Inc. | 12 Months Ended |
Dec. 31, 2017 | |
Arrangements with Symphony Icon Inc [Abstract] | |
Arrangements with Symphony Icon, Inc. | Arrangements with Symphony Icon, Inc. On June 15, 2007, Lexicon entered into a series of related agreements providing for the financing of the clinical development of certain of its drug candidates, including XERMELO, along with any other pharmaceutical compositions modulating the same targets as those drug candidates (the “Programs”). The agreements included a Novated and Restated Technology License Agreement pursuant to which the Company licensed to Symphony Icon, a then wholly-owned subsidiary of Symphony Icon Holdings LLC (“Holdings”), the Company’s intellectual property rights related to the Programs. Holdings contributed $45 million to Symphony Icon in order to fund the clinical development of the Programs. Under a Share Purchase Agreement, dated June 15, 2007, between the Company and Holdings, the Company issued and sold to Holdings 1,092,946 shares of its common stock on June 15, 2007 in exchange for $15 million and an exclusive purchase option (the “Purchase Option”) that gave the Company the right to acquire all of the equity of Symphony Icon, thereby allowing the Company to reacquire all of the Programs. On July 30, 2010, Lexicon entered into an Amended and Restated Purchase Option Agreement with Symphony Icon and Holdings and simultaneously exercised the Purchase Option, thereby reacquiring the Programs. Pursuant to the amended terms of the Purchase Option, Lexicon paid Holdings $10 million on July 30, 2010 and issued 1,891,074 shares of common stock to designees of Holdings on July 30, 2012 in satisfaction of an additional $35 million base payment obligation. Lexicon also agreed to make up to $45 million in additional contingent payments, which would consist of 50% of any consideration Lexicon received pursuant to any licensing transaction (a “Licensing Transaction”) under which Lexicon grants a third party rights to commercialize XERMELO or other pharmaceutical compositions modulating the same target as XERMELO (the “LG103 Programs”), subject to certain exceptions. The contingent payments would be due if and when Lexicon received such consideration from a Licensing Transaction. In the event Lexicon received regulatory approval in the United States for the marketing and sale of any product resulting from the LG103 Programs prior to entering into a Licensing Transaction for the commercialization of such product in the United States, in lieu of any contingent payment from such a Licensing Transaction, Lexicon would pay Holdings the sum of $15 million and the amount of certain expenses Lexicon incurred after its exercise of the Purchase Option which were attributable to the development of such product, reduced by up to 50% of such sum on account of any contingent payments paid prior to such United States regulatory approval attributable to any such Licensing Transaction outside of the United States with respect to such product. In the event Lexicon made any such payment upon United States regulatory approval, Lexicon would have no obligation to make subsequent contingent payments attributable to any such Licensing Transactions for the commercialization of such product outside the United States until the proceeds of such Licensing Transactions exceed 50% of the payment made as a result of such United States regulatory approval. The contingent payments were payable in cash or a combination of cash and common stock, in Lexicon’s discretion, provided that no more than 50% of any contingent payment would be paid in common stock. In December 2014, Lexicon paid $5.8 million in cash and issued 666,111 shares of common stock to designees of Holdings in satisfaction of a $11.5 million contingent payment obligation as a result of receiving an upfront payment pursuant to Lexicon’s license and collaboration agreement with Ipsen. In April 2015, Lexicon paid $0.75 million in cash to Holdings in satisfaction of its contingent payment obligation as a result of receiving an additional upfront payment from Ipsen in March 2015. In September 2016, Lexicon paid $3.2 million in cash to Holdings in satisfaction of its contingent payment obligation as a result of receiving a milestone payment from Ipsen in August 2016 (see Note 15, Collaboration and License Agreements). In September 2016, Lexicon entered into an amendment (the “Amendment”) to the Purchase Option Agreement with Holdings and Symphony Icon pursuant to which Lexicon agreed to pay Holdings $21.0 million upon Lexicon’s receipt of regulatory approval in the United States for the marketing and sale of XERMELO, such buyout amount to be in lieu of any remaining payments which may be or become payable to Holdings under the Purchase Option Agreement. In March 2017, Lexicon paid $10.5 million in cash and issued 659,905 shares of common stock to designees of Holdings in satisfaction of its remaining contingent payment obligation as a result of receiving regulatory approval in the United states for the marketing and sale of XERMELO. Lexicon accounted for the exercise of the Purchase Option and acquisition of Symphony Icon as a business combination. In connection with its acquisition of Symphony Icon, Lexicon paid $10.0 million in cash, and has also agreed to pay Holdings additional base and contingent payments as discussed above. The fair value of the base and contingent consideration payments was $45.6 million and was estimated by applying a probability-based income approach utilizing an appropriate discount rate. This estimation was based on significant inputs that are not observable in the market, referred to as Level 3 inputs. Key assumptions include: (1) a discount rate of 14% for the base payments; (2) a discount rate of 18% for the contingent payments; and (3) a probability adjusted contingency. No discount rate was used in the valuation of the contingent consideration liability as of December 31, 2016 as the expected buyout was short-term in nature. Subsequent changes in the fair value of the Symphony Icon purchase consideration liability were recorded as increase or decrease in fair value of Symphony Icon purchase liability expense in the accompanying consolidated statements of comprehensive loss. The fair value of the Symphony Icon purchase consideration liability increased by $2.1 million during the year ended December 31, 2017 , decreased by $0.7 million during the year ended December 31, 2016 , and increased by $5.9 million during the year ended December 31, 2015 . |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Operating Lease Obligations : A Lexicon subsidiary leases office space in Basking Ridge, New Jersey under a lease agreement, the term of which began in June 2015 and terminates in December 2022. Rent expense is recognized on a straight-line basis over the lease term. Additionally, Lexicon leases certain equipment under operating leases. Rent expense for all operating leases was approximately $0.6 million , $0.5 million and $0.1 million for the years ended December 31, 2017 , 2016 and 2015 , respectively. The following table includes non-cancelable, escalating future lease payments for the facility in New Jersey: For the Year Ending December 31 (in thousands) 2018 $ 625 2019 614 2020 626 2021 639 2022 651 Thereafter — Total $ 3,155 Employment Arrangements: Lexicon has entered into employment arrangements with certain of its corporate officers. Under the arrangements, each officer receives a base salary, subject to adjustment, with an annual discretionary bonus based upon specific objectives to be determined by the compensation committee. The employment arrangements are at-will and some contain non-competition agreements. Some of the arrangements also provide for certain severance payments for either six or 12 months and, in some cases, payment of a specified portion of the officer’s bonus target for such year, in the event of a specified termination of the officer’s employment. Legal Proceedings: Lexicon is from time to time party to claims and legal proceedings that arise in the normal course of its business and that it believes will not have, individually or in the aggregate, a material adverse effect on its results of operations, financial condition or liquidity. |
Other Capital Stock Agreements
Other Capital Stock Agreements | 12 Months Ended |
Dec. 31, 2017 | |
Other Capital Stock Agreements [Abstract] | |
Other Capital Stock Agreements | Other Capital Stock Agreements Reverse Stock Split : Effective May 20, 2015, Lexicon completed a one-for-seven reverse split of its common stock. All references to shares of common stock and per-share data for all periods presented in this report have been adjusted to give effect to this reverse stock split. Proportional adjustments were also made to all shares of common stock issuable under Lexicon’s equity incentive plans and upon conversion of Lexicon’s Notes. Concurrent with the reverse stock split, the authorized shares of common stock were reduced from 900 million (prior to the reverse stock split) to 225 million . As no change was made to the par value of the common shares, common stock and additional paid-in capital were adjusted on a retroactive basis to give effect to the reverse stock split. No fractional shares were issued in connection with the reverse stock split. Any fractional share of common stock that would otherwise have resulted from the reverse stock split were converted into cash payments equal to such fraction multiplied by the closing sales price of the common stock as last reported on the last trading day immediately preceding the effective date of the reverse stock split. |
Equity Incentive Awards
Equity Incentive Awards | 12 Months Ended |
Dec. 31, 2017 | |
Equity Incentive Awards [Abstract] | |
Equity Incentive Awards | Equity Incentive Awards Equity Incentive Plans 2017 Equity Incentive Plan: In September 1995, Lexicon adopted the 1995 Stock Option Plan, which was subsequently amended and restated in February 2000, April 2009, April 2012, April 2015 and April 2017 and renamed the 2017 Equity Incentive Plan (the “Equity Incentive Plan”). The Equity Incentive Plan provides for the grant of incentive stock options to employees and nonstatutory stock options to employees, directors and consultants of the Company. The plan also permits the grant of stock bonus awards, restricted stock awards, restricted stock unit awards, stock appreciation rights and performance stock awards. Incentive and nonstatutory stock options have an exercise price of 100% or more of the fair market value of the Company’s common stock on the date of grant. Most stock options granted under the Equity Incentive Plan become vested and exercisable over a period of four years; however some have been granted with different vesting schedules. Stock options granted under the Equity Incentive Plan have a term of ten years from the date of grant. The total number of shares of common stock that may be issued pursuant to stock awards under the Equity Incentive Plan shall not exceed in the aggregate 15,000,000 shares. As of December 31, 2017 , an aggregate of 15,000,000 shares of common stock had been reserved for issuance, options to purchase 4,773,915 shares and 945,723 restricted stock units were outstanding, 1,812,584 shares had been issued upon the exercise of stock options, 1,118,151 shares had been issued pursuant to restricted stock units and 113,940 shares had been issued pursuant to stock bonus awards or restricted stock awards granted under the Equity Incentive Plan. 2017 Non-Employee Directors’ Equity Incentive Plan: In February 2000, Lexicon adopted the 2000 Non-Employee Directors’ Stock Option Plan, which was subsequently amended and restated in April 2009, April 2012, April 2015 and April 2017 and renamed the 2017 Non-Employee Directors’ Equity Incentive Plan (the “Directors’ Plan”). Under the Directors’ Plan, non-employee directors may be granted awards under the plan with an aggregate grant date fair value of more than $500,000 during any calender year, taken together with any cash fees paid to such non-employee director in compensation for service on Lexicon’s board of directors during such calender year. Stock options granted under the Directors’ Plan have an exercise price equal to the fair market value of the Company’s common stock on the date of grant and a term of ten years from the date of grant. The total number of shares of common stock that may be issued pursuant to stock awards under the Directors’ Plan shall not exceed in the aggregate 600,000 shares. As of December 31, 2017 , an aggregate of 600,000 shares of common stock had been reserved for issuance, stock options to purchase 187,119 shares were outstanding, none had been issued upon the exercise of stock options and 82,696 shares had been issued pursuant to restricted stock awards granted under the Directors’ Plan. Stock Option Activity: The following is a summary of stock option activity under Lexicon’s equity incentive plans: 2017 2016 2015 (in thousands, except exercise price data) Options Weighted Average Exercise Price Options Weighted Average Exercise Price Options Weighted Average Exercise Price Outstanding at beginning of year 4,834 $ 11.24 4,217 $ 12.35 3,371 $ 14.98 Granted 892 14.31 1,370 10.40 1,207 6.83 Exercised (458 ) 11.97 (495 ) 12.17 (19 ) 11.14 Expired (157 ) 26.42 (195 ) 27.33 (187 ) 27.29 Forfeited (150 ) 13.84 (63 ) 10.45 (155 ) 8.51 Outstanding at end of year 4,961 11.17 4,834 11.24 4,217 12.35 Exercisable at end of year 3,077 $ 10.95 2,727 $ 12.55 2,686 $ 14.53 The weighted average estimated grant date fair value of stock options granted during the years ended December 31, 2017 , 2016 and 2015 were $8.59 , $6.43 and $4.58 , respectively. The total intrinsic value of stock options exercised during the years ended December 31, 2017 , 2016 and 2015 were $2.0 million , $1.7 million and $35,000 , respectively. The weighted average remaining contractual term of stock options outstanding and exercisable was 6.4 and 5.2 years, respectively, as of December 31, 2017 . At December 31, 2017 , the aggregate intrinsic value of the outstanding stock options and the exercisable stock options was $4.6 million and $2.8 million , respectively. Stock Bonus and Restricted Stock Unit Activity: During the years ended December 31, 2017 , 2016 and 2015 , Lexicon granted its non-employee directors 10,248 , 11,456 and 21,360 shares, respectively, of restricted stock awards. The restricted stock awards had weighted average grant date fair values of $15.61 , $13.96 and $7.49 per share, respectively, and vested immediately. During the years ended December 31, 2017 , 2016 and 2015 , Lexicon granted its employees restricted stock units in lieu of or in addition to annual stock option awards. These restricted stock units vest in four annual installments. The following is a summary of restricted stock units activity under Lexicon’s stock-based compensation plans for the year ended December 31, 2017 : Shares Weighted Average Grant Date Fair Value (in thousands) Outstanding at December 31, 2016 875 $ 8.13 Granted 418 14.44 Vested (286 ) 8.78 Forfeited (61 ) 11.57 Outstanding at December 31, 2017 946 $ 10.50 Aggregate Shares Reserved for Issuance As of December 31, 2017 , an aggregate of 5,906,757 shares of common stock were reserved for issuance upon exercise of outstanding stock options and vesting of outstanding restricted stock units and 6,565,872 additional shares were available for future grants under Lexicon’s equity incentive plans. The Company has a policy of using either authorized and unissued shares or treasury shares, including shares acquired by purchase in the open market or in private transactions, to satisfy equity award exercises. |
Benefit Plan
Benefit Plan | 12 Months Ended |
Dec. 31, 2017 | |
Benefit Plan [Abstract] | |
Benefit Plan | Benefit Plan Lexicon maintains a defined-contribution savings plan under Section 401(k) of the Internal Revenue Code. The plan covers substantially all full-time employees. Participating employees may defer a portion of their pretax earnings, up to the Internal Revenue Service annual contribution limit. Beginning in 2000, the Company was required to match employee contributions according to a specified formula. The matching contributions totaled $1,033,000 , $733,000 and $332,000 in the years ended December 31, 2017 , 2016 and 2015 , respectively. Company contributions are vested based on the employee’s years of service, with full vesting after four years of service. |
Collaboration and License Agree
Collaboration and License Agreements | 12 Months Ended |
Dec. 31, 2017 | |
Collaboration and License Agreements [Abstract] | |
Collaboration and License Agreements | Collaboration and License Agreements Lexicon has derived substantially all of its revenues from drug discovery and development alliances, target validation collaborations for the development and, in some cases, analysis of the physiological effects of genes altered in knockout mice, product sales, government grants and contracts, technology licenses, subscriptions to its databases and compound library sales. Sanofi. In November 2015, Lexicon entered into a Collaboration and License Agreement, which was subsequently amended in July 2017 (collectively, the “Sanofi Agreement”), with Sanofi for the worldwide development of Lexicon’s diabetes drug candidate sotagliflozin. In December 2016, Sanofi terminated its rights under the Sanofi Agreement with respect to Japan. Under the Sanofi Agreement, Lexicon has granted Sanofi an exclusive, worldwide (excluding Japan), royalty-bearing right and license under its patent rights and know-how to develop, manufacture and commercialize sotagliflozin. Subject to specified exceptions, neither party may (a) perform clinical development activities relating to any other compound which inhibits sodium-glucose cotransporters type 1 or type 2 or (b) commercialize any such compounds in the United States, countries of the European Union and certain other specified countries, in each case during the royalty terms applicable in such countries. Among the specified exceptions is a right Lexicon retained to pursue the development of its LX2761 drug candidate, with respect to which Lexicon granted Sanofi certain rights of first negotiation specified in the Sanofi Agreement. Under the Sanofi Agreement, Sanofi paid Lexicon an upfront payment of $300 million . In addition, Lexicon is eligible to receive from Sanofi (a) up to an aggregate of $110 million upon the achievement of four development milestones relating to the results of certain Phase 3 clinical trials of sotagliflozin in type 2 diabetes patients, (b) up to an aggregate of $220 million upon the achievement of four regulatory milestones relating to the first commercial sale following regulatory approval of sotagliflozin for type 1 and type 2 diabetes, respectively, in each of the United States and Europe, of which two milestones representing the substantial majority of such aggregate amount relate to type 2 diabetes and the remaining two milestones relate to type 1 diabetes, (c) $100 million upon the achievement of a milestone based on the results of either of two outcomes studies in type 2 diabetes patients, the completion of which would likely occur after initial regulatory approval of sotagliflozin in type 2 diabetes, and (d) up to an aggregate of $990 million upon the achievement of six commercial milestones that will be achieved upon reaching specified levels of sales. The Company believes that each of the development and regulatory milestones under the Sanofi Agreement is substantive. Due to the uncertainty surrounding the achievement of the future development and regulatory milestones, these payments will not be recognized as revenue unless and until they are earned, as the Company is not able to reasonably predict if and when the milestones will be achieved. Commercial milestones, which are not encompassed within the definition of milestones under generally accepted accounting principles, will be accounted for as royalties and recorded as revenue upon achievement of the milestone, assuming all other revenue recognition criteria were met. Lexicon is also entitled to tiered, escalating royalties ranging from low double digit percentages to forty percent of net sales of sotagliflozin, based on indication and territory, with royalties for the higher band of such range attributable to net sales for type 1 diabetes in the United States, and subject in each case to customary royalty reduction provisions. Lexicon will continue to be responsible for all clinical development activities relating to type 1 diabetes and has exercised an exclusive option to co-promote and have a significant role, in collaboration with Sanofi, in the commercialization of sotagliflozin for the treatment of type 1 diabetes in the United States. Under the terms of its co-promotion option, Lexicon will fund forty percent of the commercialization costs relating to such co-promotion activities. Sanofi will be responsible for all clinical development and commercialization of sotagliflozin for the treatment of type 2 diabetes worldwide and will be solely responsible for the commercialization of sotagliflozin for the treatment of type 1 diabetes outside the United States. Lexicon will share in the funding of a portion of the planned type 2 diabetes development costs over the first three years of the collaboration, up to an aggregate of $100 million . Sanofi will book sales worldwide in all indications. The parties are responsible for using commercially reasonable efforts to perform their development and commercialization obligations pursuant to mutually approved development and commercialization plans. The parties’ activities under the Sanofi Agreement are governed by a joint steering committee and certain other governance committees which reflect equal or other appropriate representation from both parties. If the applicable governance committee is not able to make a decision by consensus and the parties are not able to resolve the issue through escalation to specified senior executive officers of the parties, then Sanofi will have final decision-making authority, subject to limitations specified in the Sanofi Agreement. The Sanofi Agreement will expire upon the expiration of all applicable royalty terms for all licensed products in all countries. The royalty term for each licensed product in each country is the period commencing on the effective date of the Sanofi Agreement and ending on the latest of expiration of specified patent coverage, expiration of specified regulatory exclusivity and 10 years following the first commercial sale in the applicable country. Either party may terminate the Sanofi Agreement in the event of an uncured material breach by the other party. Prior to completion of the core development activities for type 2 diabetes specified in the development plan, Sanofi may terminate the Sanofi Agreement on a country-by-country and licensed product-by-licensed product basis, in the event of (a) notification of a material safety issue relating to the licensed product or the class of sodium-glucose cotransporters type 1 or type 2 inhibitors resulting in a recommendation or requirement that Lexicon or Sanofi cease development, (b) failure to achieve positive results with respect to certain clinical trial results, (c) the occurrence of specified fundamental adverse events or (d) the exploitation of the licensed product infringing third party intellectual property rights in specified major markets and Sanofi is unable to obtain a license to such third party intellectual property rights. The Company considered the following deliverables with respect to the revenue recognition of the $300 million upfront payment: • The exclusive worldwide license granted to Sanofi to develop and commercialize sotagliflozin; • The development services Lexicon is performing for sotagliflozin relating to type 1 diabetes; and • The funding Lexicon will provide for development relating to type 2 diabetes. The Company determined that the license had stand-alone value because it is an exclusive license that gives Sanofi the right to develop and commercialize sotagliflozin or to sublicense its rights. In addition, sotagliflozin is currently in development and it is possible that Sanofi or another third party could conduct clinical trials without assistance from Lexicon. As a result, the Company considers the license and the development services under the Sanofi Agreement to be separate units of accounting. The Company recognized the portion of the consideration allocated to the license immediately because Lexicon delivered the license and earned the revenue at the inception of the arrangement. The Company is recognizing as revenue the amount allocated to the development services for type 1 diabetes and the obligation to provide funding for development services for type 2 diabetes over the period of time Lexicon performs services or provides funding, currently expected to be through 2020. The Company determined that the initial allocable arrangement consideration was the $300 million upfront payment because it was the only payment that was fixed and determinable at the inception of the arrangement. There was considerable uncertainty at the date of the agreement as to whether Lexicon would earn milestone payments or royalty payments. As such, the Company did not include those payments in the allocable consideration. The Company allocated the allocable consideration based on the relative best estimate of selling price of each unit of accounting. The Company estimated the selling price of the license deliverable by applying a probability-based income approach utilizing an appropriate discount rate. The significant inputs the Company used to determine the projected income of the license included: exercising the option to co-promote, estimated future product sales, estimated cost of goods sold, estimated operating expenses, income taxes, and an appropriate discount rate. The Company estimated the selling price of the development services for type 1 diabetes by using internal estimates of the cost to hire third parties to perform the services over the expected period to perform the development. The Company estimated the obligation to provide funding for type 2 diabetes by using internal estimates of the expected cash flows and timing for $100 million in funding. As a result of the allocation, the Company recognized $126.8 million of the $300 million upfront payment for the license in 2015. The Company is recognizing the $113.8 million allocated to the development services deliverable and the $59.4 million allocated to the funding deliverable over the estimated period of performance as the development and funding occurs. Revenue recognized under the Sanofi Agreement was $56.3 million , $75.4 million and $126.8 million for the years ended December 31, 2017 , 2016 and 2015 , respectively. Revenue for the years ended December 31, 2017 and 2016 includes $1.9 million and $6.3 million , respectively, of sales of clinical trial materials to Sanofi. Ipsen. In October 2014, Lexicon entered into a License and Collaboration Agreement, which was subsequently amended in March 2015 (collectively, the “Ipsen Agreement”), with Ipsen for the development and commercialization of XERMELO outside of the United States and Japan (the “Licensed Territory”). Under the Ipsen Agreement, Lexicon granted Ipsen an exclusive, royalty-bearing right and license under its patent rights and know-how to commercialize XERMELO in the Licensed Territory. Ipsen is responsible for using diligent efforts to commercialize XERMELO in the Licensed Territory pursuant to a mutually approved commercialization plan. Subject to certain exceptions, Lexicon was responsible for conducting clinical trials required to obtain regulatory approval for XERMELO for carcinoid syndrome in the European Union, including those contemplated by a mutually approved initial development plan, and has the first right to conduct most other clinical trials of XERMELO. Lexicon was responsible for the costs of all clinical trials contemplated by the initial development plan. The costs of additional clinical trials will be allocated between the parties based on the nature of such clinical trials. Under the Ipsen Agreement, Ipsen has paid Lexicon an aggregate of $43.7 million through December 31, 2017 , consisting of $24.5 million in upfront payments, a $6.4 million milestone upon the acceptance of the filing submitted by Ipsen to the European Medicines Agency for XERMELO as an adjunct to somatostatin analog therapy for the long-term treatment of carcinoid syndrome, a $5.1 million milestone upon Ipsen’s receipt of approval from the European Commission for the marketing of XERMELO in all member states of the European Union, Norway and Iceland, a $3.84 million milestone upon Ipsen’s first commercial sale in Germany, and a $3.84 million milestone upon Ipsen’s first commercial sale in the United Kingdom. In addition, Lexicon is eligible to receive from Ipsen (a) up to an aggregate of approximately $13.1 million upon the achievement of specified regulatory and commercial launch milestones and (b) up to an aggregate of €72 million upon the achievement of specified sales milestones. Due to the uncertainty surrounding the achievement of the future regulatory and sales milestones, these payments will not be recognized as revenue unless and until they are earned as the Company is not able to reasonably predict if and when the milestones will be achieved. Lexicon is also entitled to tiered, escalating royalties ranging from low twenties to mid-thirties percentages of net sales of XERMELO in the Licensed Territory, subject to a credit for amounts previously paid to Lexicon by Ipsen for the manufacture and supply of such units of XERMELO. Lexicon and Ipsen have entered into a commercial supply agreement pursuant to which Lexicon supplies Ipsen’s commercial requirements of XERMELO, and Ipsen pays an agreed upon transfer price for such commercial supply. The Company considered the following deliverables with respect to the revenue recognition of the $24.5 million upfront payment: • The exclusive license granted to Ipsen to develop and commercialize XERMELO in the Licensed Territory; • The development services Lexicon is performing for XERMELO; • The obligation to participate in committees which govern the development of XERMELO until commercialization; and • The obligation to supply commercial supply of XERMELO, under a commercial supply agreement. The Company determined that the license had stand-alone value because it is an exclusive license that grants Ipsen the right to develop and commercialize XERMELO or to sublicense its rights. In addition, at the time of the agreement, it would have been possible for Ipsen or another third party to conduct clinical trials without assistance from Lexicon. As a result, the Company considers the license and the development services under the Agreement to be separate units of accounting. The Company recognized the portion of the consideration allocated to the license immediately because Lexicon delivered the license and earned the revenue at the inception of the arrangement. The Company is recognizing as revenue the amount allocated to the development services and the obligation to participate in committees over the period of time Lexicon performs services, currently expected to be through mid-2018. The Company determined that the commercial supply agreement is a contingent deliverable at the onset of the Agreement. There was inherent uncertainty in obtaining regulatory approval at the time of the agreement, thus, making the applicability of the commercial supply agreement outside the control of Lexicon and Ipsen. As a result, the Company has determined the commercial supply agreement does not meet the definition of a deliverable that needs to be accounted for at the inception of the arrangement. The Company has also determined that there is no significant and incremental discount related to the commercial supply agreement that should be accounted for at the inception of the arrangement. The Company determined that the initial allocable arrangement consideration was the $24.5 million upfront payments because they were the only payments that were fixed and determinable at the inception of the arrangement. There was considerable uncertainty at the date of the agreement as to whether Lexicon would earn milestone payments, royalty payments or payments for finished drug product. As such, the Company did not include those payments in the allocable consideration. The Company allocated the allocable consideration based on the relative best estimate of selling price of each unit of accounting. The Company estimated the selling price of the license deliverable by applying a probability-based income approach utilizing an appropriate discount rate. The significant inputs the Company used to determine the projected income of the license included: estimated future product sales, estimated cost of goods sold, estimated operating expenses, income taxes, and an appropriate discount rate. The Company estimated the selling price of the development services by using internal estimates of the cost to hire third parties to perform the services over the expected period to perform the development. The Company estimated the selling price of the obligation to participate in committees by using internal estimates of the number of internal hours and salary and benefits costs to perform these services. As a result of the allocation, the Company recognized $21.2 million of the $24.5 million upfront payment for the license in 2014, and an additional $1.4 million in 2015 upon entering into the amendment. The Company is recognizing the $1.7 million allocated to the development services deliverable over the estimated period of performance as development occurs, and is recognizing the $0.1 million allocated to the committee participation deliverable ratably over the estimated period of performance. Milestone payments that are contingent upon the achievement of a substantive milestone are recognized in their entirety in the period in which the milestone is achieved. Revenue recognized under the Agreement was $16.1 million , $7.2 million and $2.3 million for the years ended December 31, 2017 , 2016 and 2015 , respectively. Revenue for the year ended December 31, 2017 includes $0.8 million from sales of bulk tablets of XERMELO to Ipsen. Texas Institute for Genomic Medicine . In July 2005, Lexicon received a $35.0 million award from the Texas Enterprise Fund for the creation of a knockout mouse embryonic stem cell library containing 350,000 cell lines for the Texas Institute for Genomic Medicine (“TIGM”) using Lexicon’s proprietary gene trapping technology, which Lexicon completed in 2007. Lexicon also equipped TIGM with the bioinformatics software required for the management and analysis of data relating to the library. The Texas Enterprise Fund made an additional award of $15.0 million to the Texas A&M University System for the creation of facilities and infrastructure to house the library. Under the terms of the award, Lexicon is responsible for the creation of a specified number of jobs beginning in 2012, reaching an aggregate of 1,616 new jobs in Texas by December 31, 2016. Lexicon will receive credits against those job obligations based on funding received by TIGM and certain related parties from sources other than the State of Texas. Lexicon will also receive credits against those job obligations for any surplus jobs that Lexicon created. Subject to these credits, the state may require Lexicon to repay $2,415 for each job Lexicon falls short beginning in 2013. Lexicon’s maximum aggregate exposure for such payments, if Lexicon fails to create any new jobs, is approximately $14.2 million , without giving effect to any credits to which Lexicon may be entitled. Lexicon has recorded this obligation as deferred revenue in the accompanying consolidated balance sheets. |
Selected Quarterly Financial Da
Selected Quarterly Financial Data | 12 Months Ended |
Dec. 31, 2017 | |
Selected Quarterly Financial Data [Abstract] | |
Selected Quarterly Financial Data | The table below sets forth certain unaudited statements of comprehensive loss data, and net loss per common share data, for each quarter of 2017 and 2016 : (in thousands, except per share data) Quarter Ended March 31 June 30 September 30 December 31 (Unaudited) 2017 Revenues $ 18,293 $ 12,053 $ 26,942 $ 33,047 Loss from operations $ (42,485 ) $ (33,893 ) $ (29,518 ) $ (30,785 ) Consolidated net loss $ (34,891 ) $ (35,059 ) $ (30,722 ) $ (28,378 ) Consolidated net loss per common share, basic and diluted $ (0.33 ) $ (0.33 ) $ (0.29 ) $ (0.27 ) Shares used in computing consolidated net loss per common share, basic and diluted 104,461 105,300 105,582 105,588 2016 Revenues $ 12,494 $ 20,089 $ 27,717 $ 23,037 Loss from operations $ (33,871 ) $ (37,021 ) $ (34,933 ) $ (31,330 ) Consolidated net loss $ (34,883 ) $ (38,112 ) $ (36,015 ) $ (32,419 ) Consolidated net loss per common share, basic and diluted $ (0.34 ) $ (0.37 ) $ (0.35 ) $ (0.31 ) Shares used in computing consolidated net loss per common share, basic and diluted 103,682 103,830 103,885 104,052 Selected Quarterly Financial Data (Unaudited) The table below sets forth certain unaudited statements of comprehensive loss data, and net loss per common share data, for each quarter of 2017 and 2016 : (in thousands, except per share data) Quarter Ended March 31 June 30 September 30 December 31 (Unaudited) 2017 Revenues $ 18,293 $ 12,053 $ 26,942 $ 33,047 Loss from operations $ (42,485 ) $ (33,893 ) $ (29,518 ) $ (30,785 ) Consolidated net loss $ (34,891 ) $ (35,059 ) $ (30,722 ) $ (28,378 ) Consolidated net loss per common share, basic and diluted $ (0.33 ) $ (0.33 ) $ (0.29 ) $ (0.27 ) Shares used in computing consolidated net loss per common share, basic and diluted 104,461 105,300 105,582 105,588 2016 Revenues $ 12,494 $ 20,089 $ 27,717 $ 23,037 Loss from operations $ (33,871 ) $ (37,021 ) $ (34,933 ) $ (31,330 ) Consolidated net loss $ (34,883 ) $ (38,112 ) $ (36,015 ) $ (32,419 ) Consolidated net loss per common share, basic and diluted $ (0.34 ) $ (0.37 ) $ (0.35 ) $ (0.31 ) Shares used in computing consolidated net loss per common share, basic and diluted 103,682 103,830 103,885 104,052 For all periods presented, the weighted average number of shares outstanding are the same for both basic and diluted consolidated net loss per common share. For these periods, shares associated with convertible debt, stock options and restricted stock units are not included in the weighted average number of shares of common stock outstanding because they are antidilutive. |
Summary of Significant Accoun24
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Basis of Presentation [Abstract] | |
Consolidation, Policy | Basis of Presentation: The accompanying consolidated financial statements include the accounts of Lexicon and its wholly-owned subsidiaries. Intercompany transactions and balances are eliminated in consolidation. |
Use of Estimates, Policy | Use of Estimates: The preparation of financial statements in conformity with U. S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. |
Cash and Cash Equivalents, Policy | Cash, Cash Equivalents and Short-Term Investments: Lexicon considers all highly-liquid investments with original maturities of three months or less to be cash equivalents. As of December 31, 2017 and December 31, 2016 , short-term investments consist of U.S. treasury bills and corporate debt securities. The Company’s short-term investments are classified as available-for-sale securities and are carried at fair value, based on quoted market prices of the securities. The Company views its available-for-sale securities as available for use in current operations regardless of the stated maturity date of the security. Unrealized gains and losses on such securities are reported as a separate component of stockholders’ equity. Net realized gains and losses, interest and dividends are included in interest income. The cost of securities sold is based on the specific identification method. |
Trade and Other Accounts Receivable, Policy | Accounts Receivable: Lexicon records trade accounts receivable in the normal course of business related to the sale of products or services. The allowance for doubtful accounts takes into consideration such factors as historical write-offs, the economic climate and other factors that could affect collectibility. Write-offs are evaluated on a case by case basis. |
Inventory, Policy [Policy Text Block] | Inventory: Inventories are determined at the lower of cost or market value with cost determined under the specific identification method and may consist of raw materials, work in process and finished goods. The Company began capitalizing inventory during 2017 after the approval of XERMELO by the FDA, as the related costs were expected to be recoverable through the commercialization of the product. Costs incurred prior to approval of XERMELO were recorded as research and development expense in the consolidated statements of comprehensive loss. As a result, cost of sales for approximately the next two years will reflect a lower average per unit cost of materials. |
Concentration Risk Disclosure | Concentration of Credit Risk: Lexicon’s cash equivalents, investments and accounts receivable represent potential concentrations of credit risk. The Company attempts to minimize potential concentrations of risk in cash equivalents and investments by placing investments in high-quality financial instruments. The Company’s accounts receivable are unsecured and are concentrated in pharmaceutical and biotechnology companies located in Europe and the United States. The Company has not experienced any significant credit losses to date. |
Segment Reporting Disclosure | Segment Information and Significant Customers: Lexicon operates in one business segment, which primarily focuses on the discovery, development and commercialization of pharmaceutical products for the treatment of human disease. Substantially all of the Company’s revenues have been derived from drug discovery alliances, target validation collaborations for the development and, in some cases, analysis of the physiological effects of genes altered in knockout mice, technology licenses, subscriptions to its databases, product sales, government grants and contracts and compound library sales. |
Intangible Assets, Finite-Lived, Policy [Policy Text Block] | Other Intangible Assets: Other intangible assets, net consist of in-process research and development acquired in business combinations, which are reported at fair value, less accumulated amortization. Intangible assets with finite lives are amortized using the straight-line method over their estimated useful lives. |
Property, Plant and Equipment, Policy | Property and Equipment: Property and equipment that is held and used is carried at cost and depreciated using the straight-line method over the estimated useful life of the assets which ranges from three to 40 years. Maintenance, repairs and minor replacements are charged to expense as incurred. Leasehold improvements are amortized over the shorter of the estimated useful life or the remaining lease term. Significant renewals and betterments are capitalized. |
Impairment or Disposal of Long-Lived Assets, Policy | Impairment of Long-Lived Assets: Long-lived assets and certain identifiable intangible assets to be held and used are reviewed for impairment when events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of assets to be held and used is measured by comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount that the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. |
Goodwill and Intangible Assets, Policy | Indefinite lived intangible assets are also tested annually for impairment and whenever indicators of impairment are present. When performing the impairment assessment, the Company first assesses qualitative factors to determine whether it is necessary to recalculate the fair value of its intangible assets. If management believes, as a result of the qualitative assessment, that it is more likely than not that the fair value of the intangible assets is less than its carrying amount, the Company calculates the asset’s fair value. If the carrying value of the asset exceeds its fair value, then the intangible asset is written down to its fair value. Goodwill Impairment: Goodwill is not amortized, but is tested at least annually for impairment at the reporting unit level. The Company has determined that the reporting unit is the single operating segment disclosed in its current financial statements. Impairment is the condition that exists when the carrying amount of goodwill exceeds its implied fair value. The first step in the impairment process is to determine the fair value of the reporting unit and then compare it to the carrying value, including goodwill. If the fair value exceeds the carrying value, no further action is required and no impairment loss is recognized. Additional impairment assessments may be performed on an interim basis if the Company encounters events or changes in circumstances that would indicate that, more likely than not, the carrying value of goodwill has been impaired. |
Revenue Recognition, Policy | Revenue Recognition: Revenues are recognized when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price is fixed or determinable and collectibility is reasonably assured. Product Revenues Product revenues consist of commercial sales of XERMELO in the United States and sales of bulk tablets of XERMELO to Ipsen. Product revenues are recognized once the Company meets all four revenue recognition criteria described above. In March 2017, Lexicon began shipping XERMELO to its customers in the United States. The Company recognizes revenue for product sales of XERMELO at the time the product is received by its specialty pharmacy customers, net of allowances for customer credits, including estimated rebates, chargebacks, discounts, returns, distribution service fees, and government rebates, such as Medicare Part D coverage gap reimbursements in the United States. Product shipping and handling costs are included in cost of sales. Customer Credits: The Company’s specialty pharmacy customers are offered various forms of consideration, including allowances, service fees and prompt payment discounts. The Company expects the specialty pharmacies will earn prompt payment discounts and, therefore, the Company deducts the full amount of these discounts from total product sales when revenues are recognized. Service fees are also deducted from product sales as they are earned. Rebates: Allowances for rebates include mandated discounts under the Medicaid Drug Rebate Program. Rebate amounts are based upon contractual agreements or legal requirements with public sector (e.g. Medicaid) benefit providers. Rebates are amounts owed after the final dispensing of the product to a benefit plan participant and are based upon contractual agreements or legal requirements with public sector benefit providers. The allowance for rebates is based on statutory discount rates and expected utilization. The Company’s estimates for expected utilization of rebates are based in part on third party market research data, and data received from the specialty pharmacies. Rebates are generally invoiced and paid in arrears so that the accrual balance consists of an estimate of the amount expected to be incurred for the current quarter’s activity, plus an accrual balance for known prior quarter’s unpaid rebates. If actual future rebates vary from estimates, the Company may need to adjust prior period accruals, which would affect revenue in the period of adjustment. Chargebacks: Chargebacks are discounts that occur when contracted customers purchase directly from a specialty pharmacy. Contracted customers, which currently consist primarily of Public Health Service institutions, non-profit clinics, and Federal government entities purchasing via the Federal Supply Schedule, generally purchase the product at a discounted price. The specialty pharmacy, in turn, charges back to Lexicon the difference between the price initially paid by the specialty pharmacy and the discounted price paid to the specialty pharmacy by the customer. The allowance for chargebacks is based on known sales to contracted customers. Medicare Part D Coverage Gap: Medicare Part D prescription drug benefit mandates manufacturers to fund 50% of the Medicare Part D insurance coverage gap for prescription drugs sold to eligible patients. The Company’s estimates for the expected Medicare Part D coverage gap are based on data received from the specialty pharmacies. Funding of the coverage gap is generally invoiced and paid in arrears so that the accrual balance consists of an estimate of the amount expected to be incurred for the current quarter’s activity, plus an accrual balance for known prior quarters. If actual future funding varies from estimates, the Company may need to adjust prior period accruals, which would affect revenue in the period of adjustment. Co-payment assistance: Patients who have commercial insurance and meet certain eligibility requirements may receive co-payment assistance. The Company accrues a liability for co-payment assistance based on actual program participation and estimates of program redemption using data provided by third-party administrators. Collaborative Agreements Revenues under collaborative agreements include both license revenue and contract research revenue. Activities under collaborative agreements are evaluated to determine if they represent a multiple element revenue agreement. The Company identifies the deliverables included within the agreement and evaluates which deliverables represent separate units of accounting. The Company accounts for those components as separate units of accounting if the following two criteria are met: • The delivered item or items have value to the customer on a stand-alone basis; and • If there is a general right of return relative to the delivered items, delivery or performance of the undelivered items is considered probable and within the Company’s control. Factors considered in this determination include, among other things, whether any other vendors sell the items separately and if the licensee could use the delivered item for its intended purpose without the receipt of the remaining deliverables. If multiple deliverables included in an arrangement are separable into different units of accounting, the Company allocates the arrangement consideration to those units of accounting. The amount of allocable arrangement consideration is limited to amounts that are fixed or determinable. Arrangement consideration is allocated at the inception of the arrangement to the identified units of accounting based on their relative estimated selling price. Revenue is recognized for each unit of accounting when the appropriate revenue recognition criteria are met. Future milestone payments that are contingent upon the achievement of a substantive milestone are recognized in their entirety in the period in which the milestone is achieved. A milestone is substantive if: • The consideration payable to the Company is commensurate with the Company’s performance necessary to achieve the milestone or the increase in value to the collaboration resulting from the Company’s performance; • The milestone relates solely to the Company’s past performance; and • The milestone is reasonable relative to all of the other deliverables and payments within the arrangement. Commercial milestones will be accounted for as royalties and recorded as revenue upon achievement of the milestone, assuming all other revenue recognition criteria are met. Subscription and license fees are recognized as other revenue upon the grant of the technology license when performance is complete and there is no continuing involvement. Royalty revenues are recognized as earned in accordance with the contract terms at the time the royalty amount is fixed and determinable based on information received from the sublicensees and at the time collectibility is reasonably assured. |
Cost of Sales, Policy [Policy Text Block] | Cost of Sales: Cost of sales consists of third-party manufacturing costs, freight and indirect overhead costs associated with sales of XERMELO. The Company began capitalizing inventory during 2017 following approval of XERMELO by the FDA, as the related costs were expected to be recoverable through the commercialization of the product. Costs incurred prior to approval of XERMELO have been recorded as research and development expense in the consolidated statements of comprehensive loss. As a result, cost of sales for approximately the next two years will reflect a lower average per unit cost of materials. Product shipping and handling costs are included in cost of sales. Cost of sales also includes the amortization of the in-process research and development intangible asset for XERMELO using the straight-line method over the estimated useful life of 14 years. |
Research and Development Expense, Policy | Research and Development Expenses: Research and development expenses consist of costs incurred for company-sponsored as well as collaborative research and development activities. These costs include direct and research-related overhead expenses and are expensed as incurred. Technology license fees for technologies that are utilized in research and development and have no alternative future use are expensed when incurred. Substantial portions of the Company’s preclinical and clinical trials are performed by third-party laboratories, medical centers, contract research organizations and other vendors. For preclinical studies, the Company accrues expenses based upon estimated percentage of work completed and the contract milestones remaining. For clinical studies, expenses are accrued based upon the number of patients enrolled and the duration of the study. The Company monitors patient enrollment, the progress of clinical studies and related activities to the extent possible through internal reviews of data reported to the Company by the vendors and clinical site visits. The Company’s estimates depend on the timeliness and accuracy of the data provided by the vendors regarding the status of each program and total program spending. The Company periodically evaluates the estimates to determine if adjustments are necessary or appropriate based on information it receives. |
Share-based Compensation, Option and Incentive Plans Policy | Stock-Based Compensation: The Company recognizes compensation expense in its statements of comprehensive loss for share-based payments, including stock options and restricted stock units issued to employees, based on their fair values on the date of the grant, with the compensation expense recognized over the period in which an employee is required to provide service in exchange for the stock award. Stock-based compensation expense for awards without performance conditions is recognized on a straight-line basis. Stock-based compensation expense for awards with performance conditions is recognized over the period from the date the performance condition is determined to be probable of occurring through the time the applicable condition is met. As of December 31, 2017 , stock-based compensation cost for all outstanding unvested options and restricted stock units was $18.6 million , which is expected to be recognized over a weighted-average period of 1.3 years. The fair value of stock options is estimated at the date of grant using the Black-Scholes method. The Black-Scholes option-pricing model requires the input of subjective assumptions. Because the Company’s employee stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management’s opinion, the existing models do not necessarily provide a reliable single measure of the fair value of its employee stock options. For purposes of determining the fair value of stock options, the Company segregates its options into two homogeneous groups, based on exercise and post-vesting employment termination behaviors, resulting in a change in the assumptions used for expected option lives and forfeitures. Expected volatility is based on the historical volatility in the Company’s stock price. |
Earnings Per Share, Policy | Net Loss per Common Share: Net loss per common share is computed using the weighted average number of shares of common stock outstanding. Shares associated with convertible debt, stock options and restricted stock units are not included because they are antidilutive. |
Summary of Significant Accoun25
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Share-based Compensation [Abstract] | |
Finite-lived Intangible Assets Amortization Expense [Table Text Block] | Estimated future amortization expense for intangible assets as of December 31, 2017 is as follows: For the Year Ending December 31 (in thousands) 2018 $ 1,766 2019 1,766 2020 1,766 2021 1,766 2022 1,766 Thereafter 14,417 $ 23,247 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | Expected Volatility Risk-free Interest Rate Expected Term Dividend Rate December 31, 2017: Employees 61% 1.7% 4 0 % Officers and non-employee directors 70% 2.2% 8 0 % December 31, 2016: Employees 63% 1.1% 4 0 % Officers and non-employee directors 83% 1.6% 8 0 % December 31, 2015: Employees 64% 1.2% 4 0 % Officers and non-employee directors 81% 1.8% 8 0 % |
Cash and Cash Equivalents and26
Cash and Cash Equivalents and Investments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Cash and Cash Equivalents and Investments [Abstract] | |
Schedule of Cash, Cash Equivalents and Short-term Investments | As of December 31, 2017 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (in thousands) Cash and cash equivalents $ 61,661 $ — $ — $ 61,661 Securities maturing within one year: U.S. treasury securities 222,316 — (168 ) 222,148 Corporate debt securities 27,033 — (54 ) 26,979 Total short-term investments $ 249,349 $ — $ (222 ) $ 249,127 Total cash and cash equivalents and investments $ 311,010 $ — $ (222 ) $ 310,788 As of December 31, 2016 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (in thousands) Cash and cash equivalents $ 46,600 $ — $ — $ 46,600 Securities maturing within one year: U.S. treasury securities 227,911 1 (107 ) 227,805 Corporate debt securities 72,188 1 (90 ) 72,099 Total short-term investments $ 300,099 $ 2 $ (197 ) $ 299,904 Total cash and cash equivalents and investments $ 346,699 $ 2 $ (197 ) $ 346,504 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Measurements [Abstract] | |
Fair Value, by Balance Sheet Grouping | Assets and Liabilities at Fair Value As of December 31, 2017 Level 1 Level 2 Level 3 Total (in thousands) Assets Cash and cash equivalents $ 61,661 $ — $ — $ 61,661 Short-term investments 222,148 26,979 — 249,127 Total cash and cash equivalents and investments $ 283,809 $ 26,979 $ — $ 310,788 Assets and Liabilities at Fair Value As of December 31, 2016 Level 1 Level 2 Level 3 Total (in thousands) Assets Cash and cash equivalents $ 45,093 $ 1,507 $ — $ 46,600 Short-term investments 227,805 72,099 — 299,904 Total cash and cash equivalents and investments $ 272,898 $ 73,606 $ — $ 346,504 Liabilities Accrued liabilities $ — $ — $ 18,912 $ 18,912 Total liabilities $ — $ — $ 18,912 $ 18,912 |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | Other Long-term Liabilities (in thousands) Balance at January 1, 2015 $ 17,638 Change in valuation of purchase consideration payable to former Symphony Icon stockholders 5,927 Payment of base payment obligation with common stock and cash (750 ) Balance at December 31, 2015 22,815 Change in valuation of purchase consideration payable to former Symphony Icon stockholders (703 ) Payment of contingent payment obligation with cash (3,200 ) Balance at December 31, 2016 18,912 Change in valuation of purchase consideration payable to former Symphony Icon stockholders 2,101 Payment of contingent payment obligation with common stock and cash (21,013 ) Balance at December 31, 2017 $ — |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property and Equipment [Abstract] | |
Property, Plant and Equipment | Estimated Useful Lives As of December 31, In Years 2017 2016 (in thousands) Computers and software 3-5 $ 4,605 $ 7,667 Furniture and fixtures 5-7 6,006 6,003 Laboratory equipment 3-7 3,423 3,423 Leasehold improvements 7-10 400 296 Buildings 15-40 59,212 59,212 Land — 2,664 2,664 Total property and equipment 76,310 79,265 Less: Accumulated depreciation and amortization (58,623 ) (59,875 ) Net property and equipment $ 17,687 $ 19,390 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Taxes [Abstract] | |
Schedule of Deferred Tax Assets and Liabilities | As of December 31, 2017 2016 (in thousands) Deferred tax assets: Net operating loss carryforwards $ 186,967 $ 258,405 Research and development tax credits 46,682 44,111 Orphan drug credits 26,524 24,233 Capitalized research and development 69,561 86,845 Stock-based compensation 3,923 7,060 Deferred revenue 12,950 39,307 Other 5,579 8,432 Total deferred tax assets 352,186 468,393 Deferred tax liabilities: Deferred tax liability related to acquisition of Symphony Icon (10,896 ) (18,675 ) Other (1 ) — Total deferred tax liabilities (10,897 ) (18,675 ) Less: valuation allowance (347,303 ) (468,393 ) Net deferred tax liabilities $ (6,014 ) $ (18,675 ) |
Debt Obligations Debt Obligatio
Debt Obligations Debt Obligations (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt Obligations [Abstract] | |
Schedule of Maturities of Long-term Debt [Table Text Block] | The following table includes the aggregate scheduled future principal payments of the Company’s long-term debt as of December 31, 2017 : For the Year Ending December 31 (in thousands) 2018 $ 14,094 2019 — 2020 — 2021 87,500 2022 150,000 Thereafter — Total debt 251,594 Less deferred financing costs (5,924 ) Less current portion (14,094 ) Total long-term debt $ 231,576 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases | For the Year Ending December 31 (in thousands) 2018 $ 625 2019 614 2020 626 2021 639 2022 651 Thereafter — Total $ 3,155 |
Equity Incentive Awards (Tables
Equity Incentive Awards (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Equity Incentive Awards [Abstract] | |
Schedule of Share-based Compensation, Stock Options, Activity | 2017 2016 2015 (in thousands, except exercise price data) Options Weighted Average Exercise Price Options Weighted Average Exercise Price Options Weighted Average Exercise Price Outstanding at beginning of year 4,834 $ 11.24 4,217 $ 12.35 3,371 $ 14.98 Granted 892 14.31 1,370 10.40 1,207 6.83 Exercised (458 ) 11.97 (495 ) 12.17 (19 ) 11.14 Expired (157 ) 26.42 (195 ) 27.33 (187 ) 27.29 Forfeited (150 ) 13.84 (63 ) 10.45 (155 ) 8.51 Outstanding at end of year 4,961 11.17 4,834 11.24 4,217 12.35 Exercisable at end of year 3,077 $ 10.95 2,727 $ 12.55 2,686 $ 14.53 |
Schedule of Nonvested Restricted Stock Units Activity | Shares Weighted Average Grant Date Fair Value (in thousands) Outstanding at December 31, 2016 875 $ 8.13 Granted 418 14.44 Vested (286 ) 8.78 Forfeited (61 ) 11.57 Outstanding at December 31, 2017 946 $ 10.50 |
Selected Quarterly Financial 33
Selected Quarterly Financial Data (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Selected Quarterly Financial Data [Abstract] | |
Selected Quarterly Financial Data | The table below sets forth certain unaudited statements of comprehensive loss data, and net loss per common share data, for each quarter of 2017 and 2016 : (in thousands, except per share data) Quarter Ended March 31 June 30 September 30 December 31 (Unaudited) 2017 Revenues $ 18,293 $ 12,053 $ 26,942 $ 33,047 Loss from operations $ (42,485 ) $ (33,893 ) $ (29,518 ) $ (30,785 ) Consolidated net loss $ (34,891 ) $ (35,059 ) $ (30,722 ) $ (28,378 ) Consolidated net loss per common share, basic and diluted $ (0.33 ) $ (0.33 ) $ (0.29 ) $ (0.27 ) Shares used in computing consolidated net loss per common share, basic and diluted 104,461 105,300 105,582 105,588 2016 Revenues $ 12,494 $ 20,089 $ 27,717 $ 23,037 Loss from operations $ (33,871 ) $ (37,021 ) $ (34,933 ) $ (31,330 ) Consolidated net loss $ (34,883 ) $ (38,112 ) $ (36,015 ) $ (32,419 ) Consolidated net loss per common share, basic and diluted $ (0.34 ) $ (0.37 ) $ (0.35 ) $ (0.31 ) Shares used in computing consolidated net loss per common share, basic and diluted 103,682 103,830 103,885 104,052 Selected Quarterly Financial Data (Unaudited) The table below sets forth certain unaudited statements of comprehensive loss data, and net loss per common share data, for each quarter of 2017 and 2016 : (in thousands, except per share data) Quarter Ended March 31 June 30 September 30 December 31 (Unaudited) 2017 Revenues $ 18,293 $ 12,053 $ 26,942 $ 33,047 Loss from operations $ (42,485 ) $ (33,893 ) $ (29,518 ) $ (30,785 ) Consolidated net loss $ (34,891 ) $ (35,059 ) $ (30,722 ) $ (28,378 ) Consolidated net loss per common share, basic and diluted $ (0.33 ) $ (0.33 ) $ (0.29 ) $ (0.27 ) Shares used in computing consolidated net loss per common share, basic and diluted 104,461 105,300 105,582 105,588 2016 Revenues $ 12,494 $ 20,089 $ 27,717 $ 23,037 Loss from operations $ (33,871 ) $ (37,021 ) $ (34,933 ) $ (31,330 ) Consolidated net loss $ (34,883 ) $ (38,112 ) $ (36,015 ) $ (32,419 ) Consolidated net loss per common share, basic and diluted $ (0.34 ) $ (0.37 ) $ (0.35 ) $ (0.31 ) Shares used in computing consolidated net loss per common share, basic and diluted 103,682 103,830 103,885 104,052 For all periods presented, the weighted average number of shares outstanding are the same for both basic and diluted consolidated net loss per common share. For these periods, shares associated with convertible debt, stock options and restricted stock units are not included in the weighted average number of shares of common stock outstanding because they are antidilutive. |
Summary of Significant Accoun34
Summary of Significant Accounting Policies Inventory (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Inventory [Abstract] | |
Inventory, Raw Materials, Gross | $ 616 |
Inventory, Work in Process, Gross | 149 |
Inventory, Finished Goods, Gross | 1,183 |
Inventory, Gross | $ 1,948 |
Summary of Significant Accoun35
Summary of Significant Accounting Policies Concentration of Credit Risk (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Concentration of Credit Risk [Abstract] | |||
Disclosure On Geographic Areas Revenue From External Customers Attributed to France | 82.00% | 99.00% | 99.00% |
Disclosure on Geographic Areas, Revenue from External Customers Attributed to Entity's Country of Domicile, Percent | 18.00% | 1.00% | 1.00% |
Summary of Significant Accoun36
Summary of Significant Accounting Policies Segment Information and Signficant Customers (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Segment Information and Significant Customers [Abstract] | |||
Entity Wide Revenue Sanofi Percentage | 64.00% | 90.00% | 98.00% |
Entity Wide Revenue Ipsen Percentage | 18.00% | 9.00% |
Summary of Significant Accoun37
Summary of Significant Accounting Policies Intangible asset (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible Assets, Gross (Excluding Goodwill) | $ (1,500) | |
Finite-Lived Intangible Assets, Amortization Expense, Year Two | 1,766 | |
Finite-Lived Intangible Assets, Amortization Expense, Year Three | 1,766 | |
Finite-Lived Intangible Assets, Amortization Expense, Year Four | 1,766 | |
Finite-Lived Intangible Assets, Amortization Expense, Year Four | 1,766 | |
Finite-Lived Intangible Assets, Amortization Expense, Year Five | 1,766 | |
Finite-Lived Intangible Assets, Amortization Expense, after Year Five | 14,417 | |
Finite-Lived Intangible Assets, Net | $ 23,247 | |
XERMELO Intangible Assets Finite Lived | $ 24,700 |
Summary of Significant Accoun38
Summary of Significant Accounting Policies Impairment of Long-Lived Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Accounting Policies [Abstract] | |||
Impairment of Intangible Assets (Excluding Goodwill) | $ 0 | $ 0 | $ 0 |
Asset Impairment Charges | $ 0 | $ 0 | $ 3,597 |
Summary of Significant Accoun39
Summary of Significant Accounting Policies Goodwill (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Goodwill, Impairment Loss | $ 0 | $ 0 | $ 0 |
Summary of Significant Accoun40
Summary of Significant Accounting Policies Stock-Based Compensation (Details 1) - Equity Option [Member] | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term, Employees | 4 years | 4 years | 4 years |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate, Employee | 1.70% | 1.10% | 1.20% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected VolatilityRate, Employees | 61.00% | 63.00% | 64.00% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate, Employees | 0.00% | 0.00% | 0.00% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate, Officers and Non-employee Directors | 2.20% | 1.60% | 1.80% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate, Officers and Non-employee Directors | 70.00% | 83.00% | 81.00% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate, Officers and Non-employee Directors | 0.00% | 0.00% | 0.00% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term, Officers and Non-employee Directors | 8 years | 8 years | 8 years |
Summary of Significant Accoun41
Summary of Significant Accounting Policies Stock-based Compensation (Details 2) $ in Millions | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Stock-Based Compensation [Abstract] | |
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized | $ 18.6 |
Employee Service Share-based Compensation, Outstanding, Weighted Average Remaining Vesting Period | 1 year 4 months |
Recent Accounting Pronounceme42
Recent Accounting Pronouncements (Details) - USD ($) $ in Millions | Jan. 01, 2018 | Jan. 01, 2017 |
Recent Accounting Pronouncements [Abstract] | ||
Adjustment to Accumulated Deficit to ASC606 | $ 14.2 | |
Accumulated Excess Tax Benefits Recognized as Deferred Tax Assets | $ 6.1 | |
Adjustment to Accumulated Deficit | $ 2 |
Cash and Cash Equivalents and43
Cash and Cash Equivalents and Investments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash and Cash Equivalents | |||
Realized Investment Gains (Losses) | $ 7 | $ 0 | $ 0 |
Cash | |||
Cash and Cash Equivalents | |||
Available-for-sale Securities, Amortized Cost Basis | 61,661 | 46,600 | |
Available-for-sale Securities, Gross Unrealized Gain Accumulated in Investments | 0 | 0 | |
Available-for-sale Securities, Gross Unrealized Losses | 0 | 0 | |
Available-for-sale Securities, Current | 61,661 | 46,600 | |
US Treasury Securities | |||
Cash and Cash Equivalents | |||
Available-for-sale Securities, Amortized Cost Basis | 222,316 | 227,911 | |
Available-for-sale Securities, Gross Unrealized Gain Accumulated in Investments | 0 | 1 | |
Available-for-sale Securities, Gross Unrealized Losses | (168) | (107) | |
Available-for-sale Securities, Current | 222,148 | 227,805 | |
Corporate Debt Securities [Member] | |||
Cash and Cash Equivalents | |||
Available-for-sale Securities, Amortized Cost Basis | 27,033 | 72,188 | |
Available-for-sale Securities, Gross Unrealized Gain Accumulated in Investments | 0 | 1 | |
Available-for-sale Securities, Gross Unrealized Losses | (54) | (90) | |
Available-for-sale Securities, Current | 26,979 | 72,099 | |
Short-term Investments | |||
Cash and Cash Equivalents | |||
Available-for-sale Securities, Amortized Cost Basis | 249,349 | 300,099 | |
Available-for-sale Securities, Gross Unrealized Gain Accumulated in Investments | 0 | 2 | |
Available-for-sale Securities, Gross Unrealized Losses | (222) | (197) | |
Available-for-sale Securities, Current | 249,127 | 299,904 | |
Cash and Cash Equivalents and Investments | |||
Cash and Cash Equivalents | |||
Available-for-sale Securities, Amortized Cost Basis | 311,010 | 346,699 | |
Available-for-sale Securities, Gross Unrealized Gain Accumulated in Investments | 0 | 2 | |
Available-for-sale Securities, Gross Unrealized Losses | (222) | (197) | |
Available-for-sale Securities, Current | $ 310,788 | $ 346,504 |
Fair Value Measurements (Detail
Fair Value Measurements (Details 1) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Cash and Cash Equivalents, Fair Value Disclosure | $ 61,661 | $ 46,600 |
Available-for-sale Securities, Fair Value Disclosure | 249,127 | 299,904 |
Investments, Fair Value Disclosure | 310,788 | 346,504 |
Accrued Liabilities, Fair Value Disclosure | 18,912 | |
Liabilities, Fair Value Disclosure | 18,912 | |
Fair Value, Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Cash and Cash Equivalents, Fair Value Disclosure | 61,661 | 45,093 |
Available-for-sale Securities, Fair Value Disclosure | 222,148 | 227,805 |
Investments, Fair Value Disclosure | 283,809 | 272,898 |
Accrued Liabilities, Fair Value Disclosure | 0 | |
Liabilities, Fair Value Disclosure | 0 | |
Fair Value, Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Cash and Cash Equivalents, Fair Value Disclosure | 0 | 1,507 |
Available-for-sale Securities, Fair Value Disclosure | 26,979 | 72,099 |
Investments, Fair Value Disclosure | 26,979 | 73,606 |
Accrued Liabilities, Fair Value Disclosure | 0 | |
Liabilities, Fair Value Disclosure | 0 | |
Fair Value, Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Cash and Cash Equivalents, Fair Value Disclosure | 0 | 0 |
Available-for-sale Securities, Fair Value Disclosure | 0 | 0 |
Investments, Fair Value Disclosure | $ 0 | 0 |
Accrued Liabilities, Fair Value Disclosure | 18,912 | |
Liabilities, Fair Value Disclosure | $ 18,912 |
Fair Value Measurements (Deta45
Fair Value Measurements (Details 2) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Jan. 01, 2015 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | ||||
Increase (decrease) in fair value of Symphony Icon, Inc. purchase liability | $ 2,101 | $ (703) | $ 5,927 | |
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Gain (Loss) Included in Earnings | 2,101 | (703) | 5,927 | |
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Settlements | (21,013) | (3,200) | (750) | |
Fair Value, Measurement with Unobservable Inputs Reconciliations, Recurring Basis, Liability Value | $ 0 | $ 18,912 | $ 22,815 | $ 17,638 |
Property and Equipment (Details
Property and Equipment (Details 1) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment | ||
Property, Plant and Equipment, Gross | $ 76,310 | $ 79,265 |
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | (58,623) | (59,875) |
Property, Plant and Equipment, Net | 17,687 | 19,390 |
Computers and Software | ||
Property, Plant and Equipment | ||
Property, Plant and Equipment, Gross | 4,605 | 7,667 |
Furniture and Fixtures | ||
Property, Plant and Equipment | ||
Property, Plant and Equipment, Gross | 6,006 | 6,003 |
Laboratory Equipment | ||
Property, Plant and Equipment | ||
Property, Plant and Equipment, Gross | 3,423 | 3,423 |
Leasehold Improvements | ||
Property, Plant and Equipment | ||
Property, Plant and Equipment, Gross | 400 | 296 |
Buildings | ||
Property, Plant and Equipment | ||
Property, Plant and Equipment, Gross | 59,212 | 59,212 |
Land | ||
Property, Plant and Equipment | ||
Property, Plant and Equipment, Gross | $ 2,664 | $ 2,664 |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred Tax Assets and Liabilities | ||
Deferred Tax Assets, Operating Loss Carryforwards | $ 186,967 | $ 258,405 |
Deferred Tax Assets, Tax Credit Carryforwards, Research | 46,682 | 44,111 |
Deferred Tax Assets, Tax Credit Carryforwards, Orphan Drug | 26,524 | 24,233 |
Deferred Tax Assets, In Process Research and Development | 69,561 | 86,845 |
Deferred Tax Assets, Tax Deferred Expense, Compensation and Benefits, Share-based Compensation Cost | 3,923 | 7,060 |
Deferred Tax Assets, Deferred Income | 12,950 | 39,307 |
Deferred Tax Assets, Other | 5,579 | 8,432 |
Deferred Tax Assets, Gross | 352,186 | 468,393 |
Deferred Tax Liability Related to Acquisition of Symphony Icon | (10,896) | (18,675) |
Deferred Tax Liabilities, Other | (1) | 0 |
Deferred Tax Liabilities, Gross | (10,897) | (18,675) |
Deferred Tax Assets, Valuation Allowance | (347,303) | (468,393) |
Deferred Tax Liabilities, Net | $ (6,014) | $ (18,675) |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Feb. 27, 2017 | |
Income Taxes [Abstract] | ||||
Deferred Tax Liability from Reclassified Intangible Asset | $ 8,700,000 | |||
Deferred Tax Liability from Reclassified Indefinite-lived Intangible | $ 4,000,000 | |||
Deferred Tax Asset, remeasured | 171,400,000 | |||
Deferred Income Tax Expense (Benefit) | (12,661,000) | $ 0 | $ 0 | |
Valuation Allowance, Deferred Tax Asset, Change in Amount | 121,100,000 | |||
Operating Loss Carryforwards, Federal | 851,400,000 | |||
Operating Loss Carryforwards, State | $ 382,000,000 | |||
Income Tax Expense (Benefit) | $ 0 | $ 0 |
Goodwill (Details)
Goodwill (Details) - USD ($) $ in Millions | Jul. 30, 2010 | Jul. 12, 2001 |
Goodwill [Abstract] | ||
Coelacanth Goodwill | $ 25.8 | |
Coelacanth Purchase Price | $ 36 | |
Symphony Icon Goodwill | $ 18.7 |
Debt Obligations (Details 1)
Debt Obligations (Details 1) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Debt Obligations [Abstract] | ||
Long-term Debt, Maturities, Repayments of Principal in Next Twelve Months | $ 14,094 | |
Long-term Debt, Maturities, Repayments of Principal in Year Two | 0 | |
Long-term Debt, Maturities, Repayments of Principal in Year Three | 0 | |
Long-term Debt, Maturities, Repayments of Principal in Year Four | 87,500 | |
Long-term Debt, Maturities, Repayments of Principal in Year Five | 150,000 | |
Long-term Debt, Maturities, Repayments of Principal after Year Five | 0 | |
Long-term Debt, Gross | 251,594 | |
Unamortized Debt Issuance Expense | (5,924) | |
Long-term Debt, Current Maturities | (14,094) | $ (16,280) |
Long-term Debt, Excluding Current Maturities | $ 231,576 | $ 85,167 |
Debt Obligations (Details 2)
Debt Obligations (Details 2) $ / shares in Units, $ in Millions | 1 Months Ended | |||
Dec. 31, 2017USD ($)$ / shares | Nov. 30, 2014USD ($) | Apr. 30, 2004USD ($) | Dec. 18, 2017USD ($) | |
Debt Instrument | ||||
Proceeds from Convertible Debt | $ 87.5 | |||
Convertible Debt Instrument Interest Rate Stated Percentage | 5.25% | |||
Debt Instrument, Convertible, Conversion Ratio | 118.4553 | |||
Debt Instrument, Convertible, Conversion Price | $ / shares | $ 8.442 | |||
Debt Issuance Cost | $ 3.4 | |||
Unamortized Debt Issuance Expense | $ 1.9 | |||
Debt Instrument, Fair Value Disclosure | $ 127.3 | |||
Woodlands Mortgage | $ 34 | |||
Woodlands Cash Paid | $ 20.8 | |||
WoodlandsMortgageInterestRate | 8.23% | |||
Debt Instrument, Interest Rate, Stated Percentage | 9.00% | |||
Mortgage Loans on Real Estate, Carrying Amount of Mortgages | $ 14.1 | |||
Buildings Collateral | 59.2 | |||
Land Collateral | $ 2.7 | |||
Debt Instrument, Description | 200,000 | |||
Debt Instrument, Face Amount | $ 150 | |||
Tranche B debt | $ 50 | |||
Minimum XERMELO sales to draw Tranche B | $ 25 | |||
Debt Issuance Costs, Gross | $ 4.1 |
Arrangements with Symphony Ic52
Arrangements with Symphony Icon, Inc. (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||||||||
Mar. 31, 2017 | Sep. 30, 2016 | Apr. 30, 2015 | Dec. 31, 2014 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Jul. 30, 2012 | Jul. 30, 2010 | Jun. 15, 2007 | |
Arrangements with Symphony Icon Inc [Abstract] | ||||||||||
Holdings Contribution To Icon | $ 45,000 | |||||||||
Lexicon Sold Shares To Holdings | 1,092,946 | |||||||||
Lexicon Received Cash From Holdings | $ 15,000 | |||||||||
Lexicon Paid Holdings Cash | $ 10,000 | |||||||||
Symphony Fair Value Of Base And Contingent Payments | $ 45,600 | |||||||||
Symphony Base Payment Discount Rate | 14.00% | |||||||||
Symphony Contingent Payment Discount Rate | 18.00% | |||||||||
Symphony Base Payment In Shares | 1,891,074 | |||||||||
Symphony Base Payment Obligation | $ 35,000 | |||||||||
Symphony Contingent Payment Maximum | $ 45,000 | |||||||||
Symphony Contingent Payment Percentage | 50.00% | |||||||||
Symphony Regulatory Approval Payment | $ 15,000 | |||||||||
Symphony Regulatory Approval Reduction Percentage | 50.00% | |||||||||
Symphony Regulatory Approval Percentage Limit | 50.00% | |||||||||
Symphony Payment In Stock Limitation | 50.00% | |||||||||
Symphony Contingent Payment In Cash | $ 10,500 | $ 3,200 | $ 750 | $ 5,800 | ||||||
Symphony Amendment Buyout | $ 21,000 | |||||||||
Symphony Contingent Payment in Shares | 659,905 | 666,111 | ||||||||
Symphony Contingent Payment Total | $ 11,500 | |||||||||
Increase (decrease) in fair value of Symphony Icon, Inc. purchase liability | $ 2,101 | $ (703) | $ 5,927 |
Commitments and Contingencies53
Commitments and Contingencies (Details 1) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Commitments and Contingencies [Abstract] | |||
Operating Leases, Rent Expense | $ 0.6 | $ 0.5 | $ 0.1 |
Commitments and Contingencies54
Commitments and Contingencies (Details 2) $ in Thousands | Dec. 31, 2017USD ($) |
Commitments and Contingencies [Abstract] | |
Operating Leases, Future Minimum Payments Due, Next Twelve Months | $ 625 |
Operating Leases, Future Minimum Payments, Due in Two Years | 614 |
Operating Leases, Future Minimum Payments, Due in Three Years | 626 |
Operating Leases, Future Minimum Payments, Due in Four Years | 639 |
Operating Leases, Future Minimum Payments, Due in Five Years | 651 |
Operating Leases, Future Minimum Payments, Due Thereafter | 0 |
Operating Leases, Future Minimum Payments Due | $ 3,155 |
Other Capital Stock Agreements
Other Capital Stock Agreements (Details) shares in Millions | May 20, 2015shares |
Other Capital Stock Agreements [Abstract] | |
Common Stock, Shares Authorized Before Reverse Stock Split | 900 |
Common Stock, Shares Authorized After Reverse Stock Split | 225 |
Equity Incentive Awards (Detail
Equity Incentive Awards (Details 1) | 12 Months Ended |
Dec. 31, 2017USD ($)shares | |
Equity Incentive Awards [Abstract] | |
Stock Option Exercise Price as Percent of Value of Common Stock | 100.00% |
Total Shares That May be Issued, Equity Incentive Plan | 15,000,000 |
Options Outstanding, Equity Incentive Plan | 4,773,915 |
Restricted Stock Units Outstanding, Equity Incentive Plan | 945,723 |
Stock Options Exercised, Equity Incentive Plan | 1,812,584 |
Shares Issued Pursuant to Restricted Stock Units, Equity Incentive Plan | 1,118,151 |
Shares Issued Pursuant to Stock Bonus Awards, Equity Incentive Plan | 113,940 |
Total value of shares by nonemployee in a year | $ | $ 500,000 |
Total Shares That May Be Issued, Non-Employee Directors Equity Incentive Plan | 600,000 |
Options Outstanding, Non-Employee Directors Equity Incentive Plan | 187,119 |
Stock Options Exercised, Non-Employee Directors Equity Incentive Plan | 0 |
Shares Issued Pursuant to Restricted Stock Awards, Non-Employee Directors Equity Incentive Plan | 82,696 |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 5,906,757 |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 6,565,872 |
Equity Incentive Awards (Deta57
Equity Incentive Awards (Details 2) - USD ($) $ / shares in Units, shares in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Jan. 01, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 8.59 | $ 6.43 | $ 4.58 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Total Intrinsic Value | $ 2,000,000 | $ 1,700,000 | $ 35,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 6 years 5 months | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term | 5 years 2 months | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value | $ 4,600,000 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value | $ 2,800,000 | |||
Employee Stock Option [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 4,961 | 4,834 | 4,217 | 3,371 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | $ 11.17 | $ 11.24 | $ 12.35 | $ 14.98 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 892 | 1,370 | 1,207 | |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ 14.31 | $ 10.40 | $ 6.83 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | (458) | (495) | (19) | |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price | $ 11.97 | $ 12.17 | $ 11.14 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Expirations in Period | (157) | (195) | (187) | |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Expirations in Period, Weighted Average Exercise Price | $ 26.42 | $ 27.33 | $ 27.29 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period | (150) | (63) | (155) | |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Forfeitures in Period, Weighted Average Exercise Price | $ 13.84 | $ 10.45 | $ 8.51 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number | 3,077 | 2,727 | 2,686 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price | $ 10.95 | $ 12.55 | $ 14.53 |
Equity Incentive Awards (Deta58
Equity Incentive Awards (Details 3) - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award | |||
Share-based Compensation Arrangement by Share-based Payment Award, Stock Bonus and Restricted Stock, Grants in Period | 10,248 | 11,456 | 21,360 |
Share-based Compensation Arrangement by Share-based Payment Award, Stock Bonus and Restricted Stock to Consultants, Grants in Period, Weighted Average Grant Date Fair Value | $ 15.61 | $ 13.96 | $ 7.49 |
Equity Incentive Awards (Deta59
Equity Incentive Awards (Details 4) - Restricted Stock Units (RSUs) - $ / shares shares in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 946 | 875 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | $ 10.50 | $ 8.13 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 418 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 14.44 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | (286) | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Weighted Average Grant Date Fair Value | $ 8.78 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period | (61) | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period, Weighted Average Fair Value | $ 11.57 |
Benefit Plan (Details)
Benefit Plan (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Benefit Plan [Abstract] | |||
Defined Contribution Plan, Cost | $ 1,033,000 | $ 733,000 | $ 332,000 |
Collaboration and License Agr61
Collaboration and License Agreements (Details) € in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||
Nov. 30, 2017USD ($) | Oct. 31, 2017USD ($) | Aug. 31, 2016USD ($) | Nov. 30, 2015USD ($) | Oct. 31, 2014USD ($) | Oct. 31, 2014EUR (€) | Jul. 31, 2005USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Collaboration and License Agreements [Abstract] | |||||||||||
Sanofi Upfront Payment | $ 300,000,000 | ||||||||||
Sanofi Development Milestones | 110,000,000 | ||||||||||
Sanofi Regulatory Milestones | 220,000,000 | ||||||||||
Sanofi Outcomes Study Milestone | 100,000,000 | ||||||||||
Sanofi Sales Milestone Payments | 990,000,000 | ||||||||||
Sanofi Development Costs Funded by Lexicon Maximum Amount | 100,000,000 | ||||||||||
Sanofi Revenue Allocated to Development Deliverable | 113,800,000 | ||||||||||
Sanofi Revenue Allocated to License Deliverable | 126,800,000 | ||||||||||
Sanofi Revenue Recognized | $ 56,300,000 | $ 75,400,000 | $ 126,800,000 | ||||||||
Sanofi Sales of Clinical Trial Materials | 1,900,000 | 6,300,000 | |||||||||
Sanofi Revenue Allocated to Funding Deliverable | $ 59,400,000 | ||||||||||
Ipsen Total Payments To Date | 43,700,000 | ||||||||||
Ipsen Total Upfront Payments | $ 24,500,000 | ||||||||||
Ipsen Milestone Payment Received | $ 3,840,000 | $ 3,840,000 | $ 6,400,000 | $ 5,100,000 | |||||||
Ipsen Revenue Allocated to License Deliverable | 21,200,000 | 1,400,000 | |||||||||
Ipsen Maximum Regulatory And Commercial Milestones | 13,100,000 | ||||||||||
Ipsen Revenue Allocated to Development Deliverable | 1,700,000 | ||||||||||
Ipsen Revenue Allocated to Committee Deliverable | $ 100,000 | ||||||||||
Ipsen Revenue Recognized | 16,100,000 | $ 7,200,000 | $ 2,300,000 | ||||||||
Ipsen product sales | 800,000 | ||||||||||
Ipsen Maximum Sales Milestones | € | € 72 | ||||||||||
TIGM Maximum Exposure | 14,200,000 | ||||||||||
TX Enterprise Fund Award | $ 35,000,000 | ||||||||||
TX Enterprise Fund Award to Texas AM University System | $ 15,000,000 | ||||||||||
TIGM Per Job Payment Amount | $ 2,415 |
Selected Quarterly Financial 62
Selected Quarterly Financial Data (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Condensed Financial Statements, Captions | |||||||||||
Revenue, Net | $ 33,047 | $ 26,942 | $ 12,053 | $ 18,293 | $ 23,037 | $ 27,717 | $ 20,089 | $ 12,494 | |||
Income (Loss) From Operations | (30,785) | (29,518) | (33,893) | (42,485) | (31,330) | (34,933) | (37,021) | (33,871) | $ (136,681) | $ (137,155) | $ 1,468 |
Net Income (Loss) Attributable to Parent | $ (28,378) | $ (30,722) | $ (35,059) | $ (34,891) | $ (32,419) | $ (36,015) | $ (38,112) | $ (34,883) | $ (129,050) | $ (141,429) | $ (4,682) |
Earnings Per Share, Basic and Diluted | $ (0.27) | $ (0.29) | $ (0.33) | $ (0.33) | $ (0.31) | $ (0.35) | $ (0.37) | $ (0.34) | $ (1.23) | $ (1.36) | $ (0.05) |
Weighted Average Number of Shares Outstanding, Basic and Diluted | 105,588 | 105,582 | 105,300 | 104,461 | 104,052 | 103,885 | 103,830 | 103,682 | 105,237 | 103,863 | 103,591 |