Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Nov. 04, 2015 | |
Document and Entity Information | ||
Entity Registrant Name | PTC THERAPEUTICS, INC. | |
Entity Central Index Key | 1,070,081 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2015 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 34,271,694 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 140,712 | $ 49,748 |
Marketable securities | 230,809 | 265,493 |
Prepaid expenses and other current assets | 4,627 | 3,885 |
Receivables, net | 8,016 | 4,445 |
Total current assets | 384,164 | 323,571 |
Fixed assets, net | 8,799 | 9,159 |
Deposits and other assets | 3,137 | 489 |
Total assets | 396,100 | 333,219 |
Current liabilities: | ||
Accounts payable and accrued expenses | 31,695 | 29,121 |
Deferred revenue | 3,354 | |
Total current liabilities | 31,695 | 32,475 |
Long-term debt | 93,198 | |
Other long-term liabilities | 2,056 | 2,277 |
Total liabilities | 126,949 | 34,752 |
Stockholders' equity: | ||
Common stock, $0.001 par value. Authorized 125,000,000 shares; issued and outstanding 33,915,059 shares at September 30, 2015. Authorized 125,000,000 shares; issued and outstanding 32,898,392 shares at December 31, 2014 | 34 | 33 |
Additional paid-in capital | 812,294 | 721,722 |
Accumulated other comprehensive loss | (1,127) | (737) |
Accumulated deficit | (542,050) | (422,551) |
Total stockholders' equity | 269,151 | 298,467 |
Total liabilities and stockholders' equity | $ 396,100 | $ 333,219 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2015 | Dec. 31, 2014 |
Consolidated Balance Sheets | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized shares | 125,000,000 | 125,000,000 |
Common stock, issued shares | 33,915,059 | 32,898,392 |
Common stock, outstanding shares | 33,915,059 | 32,898,392 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Revenues: | ||||
Net product revenue | $ 9,772 | $ 81 | $ 21,002 | $ 81 |
Collaboration revenue | 2 | 716 | 547 | 11,280 |
Grant revenue | 2 | 897 | 2,483 | 1,226 |
Total revenues | 9,776 | 1,694 | 24,032 | 12,587 |
Operating expenses: | ||||
Research and development | 30,640 | 18,765 | 86,768 | 52,967 |
Selling, general and administrative | 21,368 | 10,530 | 56,193 | 26,803 |
Total operating expenses | 52,008 | 29,295 | 142,961 | 79,770 |
Loss from operations | (42,232) | (27,601) | (118,929) | (67,183) |
Interest (expense)/income, net | (852) | 354 | 170 | 774 |
Other expense, net | (51) | (35) | (507) | (75) |
Loss before income tax expense | (43,135) | (27,282) | (119,266) | (66,484) |
Income tax expense | (88) | (233) | ||
Net loss | $ (43,223) | $ (27,282) | $ (119,499) | $ (66,484) |
Weighted-average shares outstanding: | ||||
Basic and diluted (in shares) | 33,908,853 | 29,351,693 | 33,528,833 | 28,441,827 |
Net loss per share - basic and diluted (in dollars per share) | $ (1.27) | $ (0.93) | $ (3.56) | $ (2.34) |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Consolidated Statements of Comprehensive Loss | ||||
Net loss | $ (43,223) | $ (27,282) | $ (119,499) | $ (66,484) |
Other comprehensive loss: | ||||
Unrealized loss on marketable securities | (483) | (159) | (582) | (139) |
Foreign currency translation (loss)/ gain | (149) | 192 | ||
Comprehensive loss | $ (43,855) | $ (27,441) | $ (119,889) | $ (66,623) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Cash flows from operating activities | ||
Net loss | $ (119,499) | $ (66,484) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 2,079 | 1,693 |
Change in valuation of warrant liability | (152) | 78 |
Non-cash interest expense | 736 | |
Amortization of debt issuance costs | 37 | |
Amortization of premiums on investments | 1,319 | 1,225 |
Share-based compensation expense | 26,130 | 12,605 |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other current assets | (748) | (1,232) |
Receivables | (3,582) | (338) |
Deposits and other assets | 183 | (937) |
Accounts payable and accrued expenses | 2,871 | 4,286 |
Other long-term liabilities | (69) | (68) |
Deferred revenue | (3,310) | (109) |
Net cash used in operating activities | (94,005) | (49,281) |
Cash flows from investing activities | ||
Purchases of fixed assets | (1,764) | (1,156) |
Purchases of marketable securities | (134,299) | (132,602) |
Sale & redemptions of marketable securities | 167,082 | 101,775 |
Net cash provided by/(used in) investing activities | 31,019 | (31,983) |
Cash flows from financing activities | ||
Payments on long-term debt | (49) | |
Proceeds from exercise of options | 8,689 | 389 |
Net proceeds from public offerings | 118,383 | |
Debt issuance costs related to convertible notes | (4,650) | |
Proceeds from issuance of convertible notes | 150,000 | |
Net cash provided by financing activities | 154,039 | 118,723 |
Effect of exchange rate changes on cash | (89) | |
Net increase in cash and cash equivalents | 90,964 | 37,459 |
Cash and cash equivalents, beginning of period | 49,748 | 15,414 |
Cash and cash equivalents, end of period | 140,712 | 52,873 |
Supplemental disclosure of cash information | ||
Cash paid for interest | 1 | |
Supplemental disclosures of non-cash information related to investing and financing activities | ||
Change in unrealized loss on marketable securities | $ (582) | $ (139) |
The Company
The Company | 9 Months Ended |
Sep. 30, 2015 | |
The Company | |
The Company | 1. The Company PTC Therapeutics, Inc. (the Company or PTC) was incorporated as a Delaware corporation on March 31, 1998. PTC is a global biopharmaceutical company focused on the discovery, development and commercialization of orally administered, small molecule therapeutics targeting an area of RNA biology referred to as post-transcriptional control. The letters “PTC” in the corporate name are an acronym for post-transcriptional control processes, which are the regulatory events that occur in cells during and after a messenger RNA is copied from DNA through the transcription process. The Company has discovered all of its compounds currently under development using its proprietary technologies. The Company plans to continue to develop these compounds both on its own and through selective collaboration arrangements with leading pharmaceutical and biotechnology companies. The Company believes that systematically targeting post-transcriptional control processes represents an unexploited approach to drug discovery and development. The Company’s internally discovered pipeline addresses multiple therapeutic areas, including rare disorders, oncology and infectious diseases. The Company’s lead product, Translarna™ (ataluren) received marketing authorization from the European Commission, or EC, in August 2014 for the treatment of nonsense mutation Duchenne muscular dystrophy, or nmDMD, in ambulatory patients age five years and over in the 31 member states of the European Economic Area, or EEA. This marketing authorization is subject to annual review and renewal by the European Medicines Agency, or EMA, following its reassessment of the risk-benefit balance of the authorization and is further conditioned on the Company’s submission of the final report, including additional safety and efficacy data, from its global, confirmatory Phase 3 clinical trial in nmDMD, which it refers to as ACT DMD, during 2015. See “Risk Factors - Risks Related to Regulatory Approval of our Product and our Product Candidates” on page 61 for further detail regarding the annual EMA reassessment process, including a description of the risk-benefit balance. In October 2015, the Company announced results from ACT DMD, including that the trial did not meet the primary efficacy endpoint of change from baseline at week 48 in distance walked in the 6-minute walk test, or 6MWT, which we also refer to as six-minute walk distance, or 6MWD, in the overall intent-to-treat, or ITT, study population, as it showed a 15 meter benefit (p=0.213) in favor of Translarna compared to placebo, which was not statistically significant. Analyses of data from pre-specified subgroups, including patients with baseline 6MWD of 300 - 400 meters, was also conducted. A pre-specified meta-analysis was also performed of combined data from the ACT DMD and ambulatory decline phase patients from the Company’s randomized, double-blind, placebo controlled, Phase 2b clinical trial evaluating the long-term safety and efficacy of Translarna in patients with nmDMD, or the Phase 2b trial. For further discussion of ACT DMD, see “Recent Developments” in Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.” See “Risk Factors - Risks Related to the Development and Commercialization of our Product and Product Candidates” on page 40 for further detail regarding how ACT DMD results could impact our ability to commercialize Translarna. The Company launched Translarna on a commercial basis in Germany in December 2014 and in Austria, Denmark, Norway, and Sweden in 2015. The Company expects to expand its launch activities across the EEA in the fourth quarter of 2015 and in future years, subject to successful completion of pricing and reimbursement negotiations. The market access process, including pricing and reimbursement negotiations, varies from country to country and can take over 18 months in certain circumstances. Concurrently, the Company has been making Translarna available under reimbursed early access programs in selected countries where those mechanisms exist, both within Europe and in those countries outside of Europe that will reference the marketing authorization described above. During 2015, the Company’s revenues have been and are expected to be primarily generated from sales of Translarna in counties in the EEA where pricing and reimbursement approval is obtained at acceptable levels and in other territories where permitted to distribute Translarna under early access programs, or EAPs. The Company is subject to a number of risks similar to those of other early stage companies, including dependence on key individuals, the difficulties inherent in the development of commercially usable products, the potential need to obtain additional capital necessary to fund the development of its products, and competition from other companies. As of September 30, 2015, the Company had an accumulated deficit of approximately $542.1 million. The Company has financed its operations to date primarily through the private offering in August 2015 of 3.00% convertible senior notes due 2022 (see Note 9), public offerings of common stock in February 2014 and October 2014, its initial public offering of common stock in June 2013, private placements of its convertible preferred stock, collaborations, bank debt, convertible debt financings, grant funding and clinical trial support from governmental and philanthropic organizations and patient advocacy groups in the disease area addressed by the Company’s product candidates. |
Summary of significant accounti
Summary of significant accounting policies | 9 Months Ended |
Sep. 30, 2015 | |
Summary of significant accounting policies | |
Summary of significant accounting policies | 2. Summary of significant accounting policies The Company’s complete listing of significant accounting policies are described in Note 2 of the notes to the Company’s audited financial statements as of December 31, 2014 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on March 2, 2015 (2014 Form 10-K). Basis of Presentation The accompanying financial information as of September 30, 2015 and for the three and nine months ended September 30, 2015 and 2014 has been prepared by the Company, without audit, pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States (GAAP) have been condensed or omitted pursuant to such rules and regulations. These interim financial statements should be read in conjunction with the Company’s audited financial statements as of December 31, 2014 and notes thereto included in the 2014 Form 10-K. In the opinion of management, the unaudited financial information as of September 30, 2015 and for the three and nine months ended September 30, 2015 and 2014 reflects all adjustments, which are normal recurring adjustments, necessary to present a fair statement of financial position, results of operations and cash flows. The results of operations for the three and nine month periods ended September 30, 2015 are not necessarily indicative of the results to be expected for the year ended December 31, 2015 or for any other interim period or for any other future year. Use of estimates The preparation of financial statements in conformity with 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 reporting period. Actual results could differ from those estimates. Inventories and cost of product revenue On August 4, 2014, the Company was notified that the European Commission, or EC, granted marketing authorization for Translarna for the treatment of nmDMD in ambulatory patients aged five years and older. The marketing authorization allows the Company to market Translarna in the EEA. The launch in these countries is on a country by country basis. This marketing authorization is subject to annual review and renewal by the European Medicines Agency, or EMA following its reassessment of the risk-benefit balance of the authorization and is further conditioned on the Company’s submission of the final report, including additional efficacy and safety data, from ACT DMD during 2015. In the third quarter of 2015, the EMA approved the annual renewal of the marketing authorization for Translarna. If we fail to satisfy renewal requirements, or if it is determined that the balance of risks and benefits of using Translarna changes materially, the European Commission could, at the EMA’s recommendation, vary, suspend, withdraw or refuse to renew the marketing authorization for Translarna or require additional clinical trials. The Company does not have sufficient history or experience from which to accurately forecast product sales or demand generation. As such, the Company has not capitalized inventory and will not capitalize inventory until the completion of ACT DMD and satisfaction of the EMA conditions or until the Company can reasonably predict future product sales. The costs incurred related to the manufacturing of Translarna have been recorded as research and development expense in the consolidated statements of operations. The Company’s cost of product sales includes royalties and other miscellaneous selling costs, which were not material and therefore were included as a component of research and development costs in the current period presentation. The time period over which this inventory is consumed will depend on a number of factors, including the amount of future Translarna sales, and the ability to utilize inventory prior to its expiration date. Recently issued accounting standards In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, “Revenue from Contracts with Customers”. ASU 2014-09 will eliminate transaction- and industry-specific revenue recognition guidance under current GAAP and replace it with a principle-based approach for determining revenue recognition. ASU 2014-09 will require that companies recognize revenue based on the value of transferred goods or services as they occur in the contract. The ASU also will require additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In July 2015, the Financial Accounting Standards Board voted to delay the effective date of this standard until the first quarter of 2018. Companies are permitted to early adopt the standard in the first quarter of 2017. Presently, the Company is assessing what effect the adoption of ASU 2014-09 will have on its financial statements and accompanying notes. In August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements—Going Concern—Disclosures of Uncertainties about an entity’s Ability to Continue as a Going Concern.” ASU 2014-15 provides new guidance related to management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards and to provide related footnote disclosures. This new guidance is effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. The requirements of ASU 2014-15 are not expected to have a significant impact on its financial statements and accompanying notes. In April 2015, the FASB issued an amendment to U.S. GAAP to simplify the balance sheet presentation of the costs for issuing debt. The changes were adopted in ASU No. 2015-03, “Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issue Costs”. Public companies will have to apply the amendments for reporting periods that begin after December 15, 2015. This amendment requires adoption by revising the balance sheets for periods prior to the effective date. The Company is currently evaluating the impact of this ASU and does not believe the adoption of this ASU will have a material impact on its financial statements and accompanying notes. Revenue Recognition The Company recognizes revenue when amounts are realized or realizable and earned. Revenue is considered realizable and earned when the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been rendered; (3) the price is fixed or determinable; and (4) collection of the amounts due are reasonably assured. Net Product Sales PTC’s net product sales have consisted solely of sales of Translarna for the treatment of nmDMD in territories outside of the U.S. The Company applies the revenue recognition guidance in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Subtopic 605-15, Revenue Recognition—Products. The Company recognizes revenue from product sales when there is persuasive evidence that an arrangement exists, title to product and associated risk of loss has passed to the customer, the price is fixed or determinable, collectability is reasonably assured and the Company has no further performance obligations. The Company records revenue on sales where Translarna is available either on a commercial basis or through a reimbursed early access program and typically paid for by a government authority or institution. Prior to January 1, 2015, the Company recognized revenue for commercial and reimbursed early access program sales on a cash basis once the product was shipped on behalf of the government authority or institution and payment had been received, if all other revenue recognition criteria were met. Beginning in the first quarter of 2015, the Company is recognizing revenue for Translarna as product is shipped, as the Company has established a pattern of collectability. The Company records revenue net of estimated discounts and rebates. Allowances are recorded as a reduction of revenue at the time revenues from product sales are recognized. Allowances for government rebates and discounts are established at the time of delivery. These allowances are adjusted to reflect known changes in factors that may impact such allowances in the quarter those changes are known. Collaboration and Grant Revenue The terms of these agreements typically include payments to the Company of one or more of the following: nonrefundable, upfront license fees; milestone payments; research funding and royalties on future product sales. In addition, the Company generates service revenue through agreements that generally provide for fees for research and development services and may include additional payments upon achievement of specified events. The Company evaluates all contingent consideration earned, such as a milestone payment, using the criteria as provided by the Financial Accounting Standards Board (FASB), guidance on the milestone method of revenue recognition. At the inception of a collaboration arrangement, the Company evaluates if a milestone payment is substantive. The criteria requires that (1) the Company determines if the milestone is commensurate with either its performance to achieve the milestone or the enhancement of value resulting from our activities to achieve the milestone; (2) the milestone be related to past performance; and (3) the milestone be reasonable relative to all deliverable and payment terms of the collaboration arrangement. If these criteria are met then the contingent milestones can be considered a substantive milestone and will be recognized as revenue in the period that the milestone is achieved. The Company recognizes royalties as earned in accordance with the terms of various research and collaboration agreements. If not substantive, the contingent consideration is allocated to the existing units of accounting based on relative selling price and recognized following the same basis previously established for the associated unit of accounting. The Company recognizes revenue for reimbursements of research and development costs under collaboration agreements as the services are performed. The Company records these reimbursements as revenue and not as a reduction of research and development expenses as the Company has the risks and rewards as the principal in the research and development activities. |
Fair value of financial instrum
Fair value of financial instruments and marketable securities | 9 Months Ended |
Sep. 30, 2015 | |
Fair value of financial instruments and marketable securities | |
Fair value of financial instruments and marketable securities | 3. Fair value of financial instruments and marketable securities The Company follows the fair value measurement rules, which provides guidance on the use of fair value in accounting and disclosure for assets and liabilities when such accounting and disclosure is called for by other accounting literature. These rules establish a fair value hierarchy for inputs to be used to measure fair value of financial assets and liabilities. This hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three levels: Level 1 (highest priority), Level 2, and Level 3 (lowest priority). · Level 1—Unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the balance sheet date. · Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs). · Level 3—Inputs are unobservable and reflect the Company’s assumptions as to what market participants would use in pricing the asset or liability. The Company develops these inputs based on the best information available. Cash equivalents are reflected in the accompanying financial statements at fair value. The carrying amount of grant and collaboration receivables, accounts payable and accrued expenses, and debt approximates fair value due to the short-term nature of those instruments. Fair value of certain marketable securities is based upon market prices using quoted prices in active markets for identical assets quoted on the last day of the period. In establishing the estimated fair value of the remaining investments, the Company used the fair value as determined by its investment advisors using observable inputs other than quoted prices. The Company reviews its investments on a periodic basis for other-than-temporary impairments. This review is subjective, as it requires management to evaluate whether an event or change in circumstances has occurred in that period that may have a significant adverse effect on the fair value of the investment. The following represents the fair value using the hierarchy described in this Note 3 for the Company’s financial assets and liabilities that are required to be measured at fair value on a recurring basis as of September 30, 2015 and December 31, 2014: September 30, 2015 Total Quoted prices in active markets for identical assets (level 1) Significant other observable inputs (level 2) Significant unobservable inputs (level 3) Marketable securities $ $ — $ $ — Warrant liability — — December 31, 2014 Total Quoted prices in active markets for identical assets (level 1) Significant other observable inputs (level 2) Significant unobservable inputs (level 3) Marketable securities $ $ — $ $ — Warrant Liability — — The following is a summary of marketable securities accounted for as available-for-sale securities at September 30, 2015 and December 31, 2014: September 30, 2015 Amortized Gross Unrealized Fair Cost Gains Losses Value Corporate debt securities $ $ $ ) $ Government obligations ) $ $ $ ) $ December 31, 2014 Amortized Gross Unrealized Fair Cost Gains Losses Value Corporate debt securities $ $ $ ) $ Government obligations ) $ $ $ ) $ At September 30, 2015 and December 31, 2014, the Company held securities with an unrealized loss position that were not considered to be other-than-temporarily impaired as the Company has the ability to hold such investments until recovery of their fair value. Marketable securities on the balance sheet at September 30, 2015 and December 31, 2014 mature as follows: September 30, 2015 Less Than 12 Months More Than 12 Months Corporate debt securities $ $ Government obligations Total Marketable securities $ $ December 31, 2014 Less Than 12 Months More Than 12 Months Corporate debt securities $ $ Government obligations Total Marketable securities $ $ Level 3 valuation The warrant liability is classified in Other long-term liabilities on the Company’s consolidated balance sheet. The warrant liability is marked-to-market each reporting period with the change in fair value recorded as a gain or loss within Other expense, net on the Company’s consolidated statement of operations until the warrants are exercised, expire or other facts and circumstances lead the warrant liability to be reclassified as an equity instrument. The fair value of the warrant liability is determined at each reporting period by utilizing the Black-Scholes option pricing model. The table presented below is a summary of changes in the fair value of the Company’s Level 3 valuation for warrant liability for the period ended September 30, 2015: Level 3 assets Beginning balance as of December 31, 2014 $ Change in fair value of warrant liability ) Ending balance as of September 30, 2015 $ Fair value of the warrant liability is estimated using an option-pricing model, which includes variables such as the expected volatility based on guideline public companies, the stock fair value, and the estimated time to a liquidity event. The significant assumptions used in preparing the option pricing model for valuing the Company’s warrants as of September 30, 2015 include (i) volatility (62%—70%), (ii) risk free interest rate (0.49%—1.15%), (iii) strike price ($128.00-$2,520.00), (iv) fair value of common stock ($26.70), and (v) expected life (1.71—3.98 years). The significant assumptions used in preparing the option pricing model for valuing the Company’s warrants as of December 31, 2014 include (i) volatility (68%-70%), (ii) risk free interest rate (0.89%—1.65%), (iii) strike price ($128.00—$2,520.00), (iv) fair value of common stock ($51.77), and (v) expected life (2.50—4.70 years). See Note 6 for a description of the warrants issued in connection with the convertible notes. |
Other comprehensive loss and ac
Other comprehensive loss and accumulated other comprehensive items | 9 Months Ended |
Sep. 30, 2015 | |
Other comprehensive loss and accumulated other comprehensive items | |
Other comprehensive loss and accumulated other comprehensive items | 4. Other comprehensive loss and accumulated other comprehensive items Other comprehensive income (loss) includes changes in equity that are excluded from net income (loss), such as unrealized gains and losses on marketable securities. The following tables summarize other comprehensive income (loss) and the changes in accumulated other comprehensive items for the three and nine months ended September 30, 2015: Unrealized Gains/(Losses) On Marketable Securities Foreign Currency Translation Total Accumulated Other Comprehensive Items Balance at June 30, 2015 $ ) $ ) $ ) Other comprehensive loss before reclassifications ) ) ) Amounts reclassified from other comprehensive items — — — Other comprehensive loss ) ) ) Balance at September 30, 2015 $ ) $ ) $ ) Unrealized Gains/(Losses) On Marketable Securities Foreign Currency Translation Total Accumulated Other Comprehensive Items Balance at December 31, 2014 $ ) $ ) $ ) Other comprehensive income/(loss) before reclassifications ) ) Amounts reclassified from other comprehensive items — — — Other comprehensive income/(loss) ) ) Balance at September 30, 2015 $ ) $ ) $ ) |
Accounts payable and accrued ex
Accounts payable and accrued expenses | 9 Months Ended |
Sep. 30, 2015 | |
Accounts payable and accrued expenses | |
Accounts payable and accrued expenses | 5. Accounts payable and accrued expenses Accounts payable and accrued expenses at September 30, 2015 and December 31, 2014 consist of the following: September 30, 2015 December 31, 2014 Employee compensation, benefits, and related accruals $ $ Consulting and contracted research Professional fees Accounts payable Other $ $ |
Warrants
Warrants | 9 Months Ended |
Sep. 30, 2015 | |
Warrants. | |
Warrants | 6. Warrants All of the Company’s outstanding warrants were classified as liabilities as of September 30, 2015 and December 31, 2014 because they contained non-standard antidilution provisions. The following is a summary of the Company’s outstanding warrants as of September 30, 2015 and December 31, 2014: Warrant shares Exercise price Expiration Common stock $ Common stock $ 2019 and 2020 Common stock $ |
Net loss per share
Net loss per share | 9 Months Ended |
Sep. 30, 2015 | |
Net loss per share | |
Net loss per share | 7. Net loss per share Basic earnings per share is computed by dividing net loss by the weighted-average number of common shares outstanding. Diluted earnings per share is computed by dividing net loss by the weighted-average number of common shares plus the effect of dilutive potential common shares outstanding during the period. The following tables set forth the computation of basic and diluted net loss per share: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Numerator Net loss $ ) $ ) $ ) $ ) Denominator Denominator for basic and diluted net loss per share Net loss per share: Basic and diluted $ )* $ )* $ )* $ )* *In the three and nine months ended September 30, 2015 and 2014, the Company experienced a net loss and therefore did not report any dilutive share impact. The following table shows historical dilutive common share equivalents outstanding, which are not included in the above historical calculation, as the effect of their inclusion is anti-dilutive during each period. As of September 30, 2015 2014 Stock Options Unvested restricted stock Total In August 2015, the Company issued, at par value, $150.0 million aggregate principal amount of 3.0% convertible senior notes due 2022 (the Convertible Notes) (see Note 9, Convertible Senior Notes). The conversion rate for the Convertible Notes was initially, and remains 17.7487 shares of the Company’s common stock per $1,000 principal amount of the Convertible Notes, which is equivalent to an initial conversion price of approximately $56.34 per share of the Company’s common stock. For the three and nine months ended September 30, 2015, there was no dilutive effect of the Convertible Notes as the stock price did not exceed the conversion price and the Company reported a loss. |
Stock award plan
Stock award plan | 9 Months Ended |
Sep. 30, 2015 | |
Stock award plan | |
Stock award plan | 8. Stock award plan On March 5, 2013, the Company’s Board of Directors approved the 2013 Stock Incentive Plan, which provides for the granting of stock option awards, stock appreciation rights, restricted stock, restricted stock units and other stock-based awards in the aggregate of 739,937 shares of common stock. On March 5, 2013, the Board approved a grant of 735,324 shares of restricted stock and 4,613 stock options. There are no additional shares available for issuance under this plan. In May 2013, the Company’s Board of Directors and stockholders increased by 2,500,000 the number of shares authorized under the 2009 Equity and Long Term Incentive Plan, which provides for the granting of stock option awards, restricted stock awards, and other stock-based and cash-based awards. In May 2013, the Company’s Board of Directors and stockholders approved the 2013 Long Term Incentive Plan, which became effective upon the closing of the Company’s IPO. The 2013 Long Term Incentive Plan provides for the grant of incentive stock options, nonstatutory stock options, restricted stock awards and other stock-based awards. The number of shares of common stock reserved for issuance under the 2013 Long Term Incentive Plan is the sum of (1) 238,427 shares of common stock available for issuance under the Company’s 2009 Equity and Long Term Incentive Plan and 2013 Stock Incentive Plan, (2) the number of shares (up to 3,040,444 shares) equal to the sum of the number of shares of common stock subject to outstanding awards under the Company’s 1998 Employee, Director and Consultant Stock Option Plan, 2009 Equity and Long Term Incentive Plan and 2013 Stock Incentive Plan that expire, terminate or are otherwise surrendered, cancelled, forfeited or repurchased by the Company at their original issuance price pursuant to a contractual repurchase right plus (3) an annual increase, to be added on the first day of each fiscal year until the expiration of the 2013 Long Term Incentive Plan, equal to the lowest of 2,500,000 shares of common stock, 4% of the number of shares of common stock outstanding on the first day of the fiscal year and an amount determined by the Company’s Board of Directors. From January 1, 2015 through September 30, 2015, the Company issued a total of 2,086,300 stock options to various employees. Of those, 691,100 were inducement grants for non-statutory stock options. The inducement grant awards were made pursuant to the NASDAQ inducement grant exception as a material component of our new hires’ employment compensation. A summary of stock option activity is as follows: Number of options Weighted- average exercise price Weighted- average remaining contractual term Aggregate intrinsic value (in thousands) Outstanding at December 31, 2014 $ Granted $ Exercised ) $ Forfeited ) $ Expired ) $ Outstanding at September 30, 2015 $ 8.58 years $ Vested or Expected to vest at September 30, 2015 $ 8.56 years $ Exercisable at September 30, 2015 $ 7.89 years $ The fair value of grants made in the nine months ended September 30, 2015 was contemporaneously estimated on the date of grant using the following assumptions: Nine months ended September 30, 2015 Risk-free interest rate 1.49% — 2.01% Expected volatility 67%-69% Expected term 5.50 — 6.11 years The Company assumed no expected dividends for all grants. The weighted average grant date fair value of options granted during the nine month period ended September 30, 2015 was $32.32 per share. The Company uses the “simplified method” to determine the expected term of options. Under this method, the expected term represents the average of the vesting period and the contractual term. The expected volatility of share options was estimated based on a historical volatility analysis of peers that were similar to the Company with respect to industry, stage of life cycle, size, and financial leverage. The risk-free rate of the option is based on U.S. Government Securities Treasury Constant Maturities yields at the date of grant for a term similar to the expected term of the option. Restricted Stock Awards —Restricted stock awards are granted subject to certain restrictions, including in some cases service or time conditions (restricted stock). The grant-date fair value of restricted stock awards, which has been determined based upon the market value of the Company’s shares on the grant date, is expensed over the vesting period. The following table summarizes information on the Company’s restricted stock: Restricted Stock Number of Shares Weighted Average Grant Date Fair Value January 1, 2015 $ Granted — $ — Vested ) $ Forfeited ) $ Unvested at September 30, 2015 $ The Company recorded share-based compensation expense in the statement of operations as follows: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Research and development $ $ $ $ General and administrative Total $ $ $ $ As of September 30, 2015, there was approximately $75.2 million of total unrecognized compensation cost related to unvested share-based compensation arrangements granted under the 2009 Equity and Long Term Incentive Plan, 2013 Long Term Incentive Plan and equity awards made pursuant to the NASDAQ inducement grant exception for new hires. This cost is expected to be recognized as share-based compensation expense over the weighted average remaining service period of approximately 2.9 years. |
Convertible Senior Notes
Convertible Senior Notes | 9 Months Ended |
Sep. 30, 2015 | |
Convertible Senior Notes. | |
Convertible Senior Notes | 9. Convertible Senior Notes In August 2015, the Company issued, at par value, $150.0 million aggregate principal amount of 3.0% convertible senior notes due 2022. The Convertible Notes bear cash interest at a rate of 3.0% per year, payable semi-annually on February 15 and August 15 of each year, beginning on February 15, 2016. The Convertible Notes will mature on August 15, 2022, unless earlier repurchased or converted. The net proceeds to the Company from the offering were $145.4 million after deducting the initial purchasers’ discounts and commissions and the offering expenses payable by the Company. The Convertible Notes are governed by an indenture (the Convertible Notes Indenture) with U.S Bank National Association as trustee (the Convertible Notes Trustee). Holders may convert their Convertible Notes at their option at any time prior to the close of business on the business day immediately preceding February 15, 2022 only under the following circumstances: · during any calendar quarter commencing on or after September 30, 2015 (and only during such calendar quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; · during the five business day period after any five consecutive trading day period (the “measurement period”) in which the trading price (as defined in the Convertible Notes Indenture) per $1,000 principal amount of Convertible Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day; · during any period after the Company has issued notice of redemption until the close of business on the scheduled trading day immediately preceding the relevant redemption date; or · upon the occurrence of specified corporate events. On or after February 15, 2022, until the close of business on the business day immediately preceding the maturity date, holders may convert their Convertible Notes at any time, regardless of the foregoing circumstances. Upon conversion, the Company will pay cash up to the aggregate principal amount of the Convertible Notes to be converted and deliver shares of its common stock in respect of the remainder, if any, of its conversion obligation in excess of the aggregate principal amount of Convertible Notes being converted. The conversion rate for the Convertible Notes was initially, and remains, 17.7487 shares of the Company’s common stock per $1,000 principal amount of the Convertible Notes, which is equivalent to an initial conversion price of approximately $56.34 per share of the Company’s common stock. The Company may not redeem the Convertible Notes prior to August 20, 2018. The Company may redeem for cash all or any portion of the Convertible Notes, at its option, on or after August 20, 2018 if the last reported sale price of its common stock has been at least 130% of the conversion price then in effect on the last trading day of, and for at least 19 other trading days (whether or not consecutive) during, any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption, at a redemption price equal to 100% of the principal amount of the Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. No sinking fund is provided for the Convertible Notes, which means that the Company is not required to redeem or retire the Convertible Notes periodically. If the Company undergoes a “fundamental change” (as defined in the Indenture governing the Convertible Notes Indenture), subject to certain conditions, holders of the Convertible Notes may require the Company to repurchase for cash all or part of their Convertible Notes at a 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. The Convertible Notes Indenture contains customary events of default with respect to the Convertible Notes, including that upon certain events of default (including the Company’s failure to make any payment of principal or interest on the Convertible Notes when due and payable) occurring and continuing, the Convertible Notes Trustee by notice to the Company, or the holders of at least 25% in principal amount of the outstanding Convertible Notes by notice to the Company and the Convertible Notes Trustee, may, and the Convertible Notes Trustee at the request of such holders (subject to the provisions of the Convertible Notes Indenture) shall, declare 100% of the principal of and accrued and unpaid interest, if any, on all the Convertible Notes to be due and payable. In case of certain events of bankruptcy, insolvency or reorganization, involving the Company or a significant subsidiary, 100% of the principal of and accrued and unpaid interest on the Convertible Notes will automatically become due and payable. Upon such a declaration of acceleration, such principal and accrued and unpaid interest, if any, will be due and payable immediately. The Company accounts for the Convertible Notes as a liability and equity component where the carrying value of the liability component will be valued based on a similar instrument. In accounting for the issuance of the Convertible Notes, the Company separated the Convertible Notes into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated convertible feature. The carrying amount of the equity component representing the conversion option was determined by deducting the fair value of the liability component from the par value of the Convertible Notes as a whole. The excess of the principal amount of the liability component over its carrying amount, referred to as the debt discount, is amortized to interest expense over the seven-year term of the Convertible Notes. The equity component is not re-measured as long as it continues to meet the conditions for equity classification. In accounting for the transaction costs related to the issuance of the Convertible Notes, the Company allocated the total costs incurred to the liability and equity components of the Convertible Notes based on their relative values. Transaction costs attributable to the liability component are amortized to interest expense over the seven-year term of the Convertible Notes, and transaction costs attributable to the equity component are netted with the equity components in stockholders’ equity. Additionally, the Company initially recorded a net deferred tax liability of $22.3 million in connection with the Notes. The Convertible Notes consist of the following: Liability component September 30, 2015 December 31, 2014 (in thousands) Principal $ $ — Less: Debt discount, net(1) ) — Net carrying amount $ $ — (1) Included in the consolidated balance sheets within convertible senior notes (due 2022) and amortized to interest expense over the remaining life of the Convertible Notes using the effective interest rate method. The fair value of the Convertible Notes was approximately $93.2 million as of September 30, 2015. The Company estimates the fair value of its Convertible Notes utilizing market quotations for debt that have quoted prices in active markets. Since the Convertible Notes do not trade on a daily basis in an active market, the fair value estimates are based on market observable inputs based on borrowing rates currently available for debt with similar terms and average maturities (Level 2). As of September 30, 2015, the remaining contractual life of the Convertible Notes is approximately 6.9 years. The following table sets forth total interest expense recognized related to the Convertible Notes: Three Months Ended September 30, 2015 2014 (in thousands) Contractual interest expense $ $ — Amortization of debt issuance costs — Amortization of debt discount — Total $ $ — Effective interest rate of the liability component % — |
Subsequent events
Subsequent events | 9 Months Ended |
Sep. 30, 2015 | |
Subsequent events | |
Subsequent events | 10. Subsequent events The Company has evaluated all subsequent events and transactions through the filing date. There were no material events that impacted the unaudited consolidated financial statements or disclosures. |
Summary of significant accoun17
Summary of significant accounting policies (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Summary of significant accounting policies | |
Basis of presentation | Basis of Presentation The accompanying financial information as of September 30, 2015 and for the three and nine months ended September 30, 2015 and 2014 has been prepared by the Company, without audit, pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States (GAAP) have been condensed or omitted pursuant to such rules and regulations. These interim financial statements should be read in conjunction with the Company’s audited financial statements as of December 31, 2014 and notes thereto included in the 2014 Form 10-K. In the opinion of management, the unaudited financial information as of September 30, 2015 and for the three and nine months ended September 30, 2015 and 2014 reflects all adjustments, which are normal recurring adjustments, necessary to present a fair statement of financial position, results of operations and cash flows. The results of operations for the three and nine month periods ended September 30, 2015 are not necessarily indicative of the results to be expected for the year ended December 31, 2015 or for any other interim period or for any other future year. |
Use of estimates | Use of estimates The preparation of financial statements in conformity with 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 reporting period. Actual results could differ from those estimates. |
Inventories and cost of product revenue | Inventories and cost of product revenue On August 4, 2014, the Company was notified that the European Commission, or EC, granted marketing authorization for Translarna for the treatment of nmDMD in ambulatory patients aged five years and older. The marketing authorization allows the Company to market Translarna in the EEA. The launch in these countries is on a country by country basis. This marketing authorization is subject to annual review and renewal by the European Medicines Agency, or EMA following its reassessment of the risk-benefit balance of the authorization and is further conditioned on the Company’s submission of the final report, including additional efficacy and safety data, from ACT DMD during 2015. In the third quarter of 2015, the EMA approved the annual renewal of the marketing authorization for Translarna. If we fail to satisfy renewal requirements, or if it is determined that the balance of risks and benefits of using Translarna changes materially, the European Commission could, at the EMA’s recommendation, vary, suspend, withdraw or refuse to renew the marketing authorization for Translarna or require additional clinical trials. The Company does not have sufficient history or experience from which to accurately forecast product sales or demand generation. As such, the Company has not capitalized inventory and will not capitalize inventory until the completion of ACT DMD and satisfaction of the EMA conditions or until the Company can reasonably predict future product sales. The costs incurred related to the manufacturing of Translarna have been recorded as research and development expense in the consolidated statements of operations. The Company’s cost of product sales includes royalties and other miscellaneous selling costs, which were not material and therefore were included as a component of research and development costs in the current period presentation. The time period over which this inventory is consumed will depend on a number of factors, including the amount of future Translarna sales, and the ability to utilize inventory prior to its expiration date. |
Recently issued accounting standards | Recently issued accounting standards In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, “Revenue from Contracts with Customers”. ASU 2014-09 will eliminate transaction- and industry-specific revenue recognition guidance under current GAAP and replace it with a principle-based approach for determining revenue recognition. ASU 2014-09 will require that companies recognize revenue based on the value of transferred goods or services as they occur in the contract. The ASU also will require additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In July 2015, the Financial Accounting Standards Board voted to delay the effective date of this standard until the first quarter of 2018. Companies are permitted to early adopt the standard in the first quarter of 2017. Presently, the Company is assessing what effect the adoption of ASU 2014-09 will have on its financial statements and accompanying notes. In August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements—Going Concern—Disclosures of Uncertainties about an entity’s Ability to Continue as a Going Concern.” ASU 2014-15 provides new guidance related to management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards and to provide related footnote disclosures. This new guidance is effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. The requirements of ASU 2014-15 are not expected to have a significant impact on its financial statements and accompanying notes. In April 2015, the FASB issued an amendment to U.S. GAAP to simplify the balance sheet presentation of the costs for issuing debt. The changes were adopted in ASU No. 2015-03, “Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issue Costs”. Public companies will have to apply the amendments for reporting periods that begin after December 15, 2015. This amendment requires adoption by revising the balance sheets for periods prior to the effective date. The Company is currently evaluating the impact of this ASU and does not believe the adoption of this ASU will have a material impact on its financial statements and accompanying notes. |
Revenue recognition | Revenue Recognition The Company recognizes revenue when amounts are realized or realizable and earned. Revenue is considered realizable and earned when the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been rendered; (3) the price is fixed or determinable; and (4) collection of the amounts due are reasonably assured. Net Product Sales PTC’s net product sales have consisted solely of sales of Translarna for the treatment of nmDMD in territories outside of the U.S. The Company applies the revenue recognition guidance in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Subtopic 605-15, Revenue Recognition—Products. The Company recognizes revenue from product sales when there is persuasive evidence that an arrangement exists, title to product and associated risk of loss has passed to the customer, the price is fixed or determinable, collectability is reasonably assured and the Company has no further performance obligations. The Company records revenue on sales where Translarna is available either on a commercial basis or through a reimbursed early access program and typically paid for by a government authority or institution. Prior to January 1, 2015, the Company recognized revenue for commercial and reimbursed early access program sales on a cash basis once the product was shipped on behalf of the government authority or institution and payment had been received, if all other revenue recognition criteria were met. Beginning in the first quarter of 2015, the Company is recognizing revenue for Translarna as product is shipped, as the Company has established a pattern of collectability. The Company records revenue net of estimated discounts and rebates. Allowances are recorded as a reduction of revenue at the time revenues from product sales are recognized. Allowances for government rebates and discounts are established at the time of delivery. These allowances are adjusted to reflect known changes in factors that may impact such allowances in the quarter those changes are known. Collaboration and Grant Revenue The terms of these agreements typically include payments to the Company of one or more of the following: nonrefundable, upfront license fees; milestone payments; research funding and royalties on future product sales. In addition, the Company generates service revenue through agreements that generally provide for fees for research and development services and may include additional payments upon achievement of specified events. The Company evaluates all contingent consideration earned, such as a milestone payment, using the criteria as provided by the Financial Accounting Standards Board (FASB), guidance on the milestone method of revenue recognition. At the inception of a collaboration arrangement, the Company evaluates if a milestone payment is substantive. The criteria requires that (1) the Company determines if the milestone is commensurate with either its performance to achieve the milestone or the enhancement of value resulting from our activities to achieve the milestone; (2) the milestone be related to past performance; and (3) the milestone be reasonable relative to all deliverable and payment terms of the collaboration arrangement. If these criteria are met then the contingent milestones can be considered a substantive milestone and will be recognized as revenue in the period that the milestone is achieved. The Company recognizes royalties as earned in accordance with the terms of various research and collaboration agreements. If not substantive, the contingent consideration is allocated to the existing units of accounting based on relative selling price and recognized following the same basis previously established for the associated unit of accounting. The Company recognizes revenue for reimbursements of research and development costs under collaboration agreements as the services are performed. The Company records these reimbursements as revenue and not as a reduction of research and development expenses as the Company has the risks and rewards as the principal in the research and development activities. |
Fair value of financial instr18
Fair value of financial instruments and marketable securities (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Fair value of financial instruments and marketable securities | |
Schedule of financial assets and liabilities that are required to be measured at fair value on a recurring basis | September 30, 2015 Total Quoted prices in active markets for identical assets (level 1) Significant other observable inputs (level 2) Significant unobservable inputs (level 3) Marketable securities $ $ — $ $ — Warrant liability — — December 31, 2014 Total Quoted prices in active markets for identical assets (level 1) Significant other observable inputs (level 2) Significant unobservable inputs (level 3) Marketable securities $ $ — $ $ — Warrant Liability — — |
Summary of marketable securities accounted for as available-for-sale securities | September 30, 2015 Amortized Gross Unrealized Fair Cost Gains Losses Value Corporate debt securities $ $ $ ) $ Government obligations ) $ $ $ ) $ December 31, 2014 Amortized Gross Unrealized Fair Cost Gains Losses Value Corporate debt securities $ $ $ ) $ Government obligations ) $ $ $ ) $ |
Schedule of marketable securities on the balance sheet | September 30, 2015 Less Than 12 Months More Than 12 Months Corporate debt securities $ $ Government obligations Total Marketable securities $ $ December 31, 2014 Less Than 12 Months More Than 12 Months Corporate debt securities $ $ Government obligations Total Marketable securities $ $ |
Summary of changes in the fair value of the Company's Level 3 valuation for warrant liability | Level 3 assets Beginning balance as of December 31, 2014 $ Change in fair value of warrant liability ) Ending balance as of September 30, 2015 $ |
Other comprehensive loss and 19
Other comprehensive loss and accumulated other comprehensive items (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Other comprehensive loss and accumulated other comprehensive items | |
Summary of other comprehensive income (loss) and the changes in accumulated other comprehensive items | Unrealized Gains/(Losses) On Marketable Securities Foreign Currency Translation Total Accumulated Other Comprehensive Items Balance at June 30, 2015 $ ) $ ) $ ) Other comprehensive loss before reclassifications ) ) ) Amounts reclassified from other comprehensive items — — — Other comprehensive loss ) ) ) Balance at September 30, 2015 $ ) $ ) $ ) Unrealized Gains/(Losses) On Marketable Securities Foreign Currency Translation Total Accumulated Other Comprehensive Items Balance at December 31, 2014 $ ) $ ) $ ) Other comprehensive income/(loss) before reclassifications ) ) Amounts reclassified from other comprehensive items — — — Other comprehensive income/(loss) ) ) Balance at September 30, 2015 $ ) $ ) $ ) |
Accounts payable and accrued 20
Accounts payable and accrued expenses (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Accounts payable and accrued expenses | |
Schedule of components of accounts payable and accrued expenses | September 30, 2015 December 31, 2014 Employee compensation, benefits, and related accruals $ $ Consulting and contracted research Professional fees Accounts payable Other $ $ |
Warrants (Tables)
Warrants (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Warrants. | |
Summary of the Company's outstanding warrants | The following is a summary of the Company’s outstanding warrants as of September 30, 2015 and December 31, 2014: Warrant shares Exercise price Expiration Common stock $ Common stock $ 2019 and 2020 Common stock $ |
Net loss per share (Tables)
Net loss per share (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Net loss per share | |
Schedule of computation of basic and diluted net loss per share for common stockholders | Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Numerator Net loss $ ) $ ) $ ) $ ) Denominator Denominator for basic and diluted net loss per share Net loss per share: Basic and diluted $ )* $ )* $ )* $ )* * In the three and nine months ended September 30, 2015 and 2014, the Company experienced a net loss and therefore did not report any dilutive share impact. |
Schedule of historical dilutive common share equivalents outstanding | As of September 30, 2015 2014 Stock Options Unvested restricted stock Total |
Stock award plan (Tables)
Stock award plan (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Stock award plan | |
Summary of stock option activity | Number of options Weighted- average exercise price Weighted- average remaining contractual term Aggregate intrinsic value (in thousands) Outstanding at December 31, 2014 $ Granted $ Exercised ) $ Forfeited ) $ Expired ) $ Outstanding at September 30, 2015 $ 8.58 years $ Vested or Expected to vest at September 30, 2015 $ 8.56 years $ Exercisable at September 30, 2015 $ 7.89 years $ |
Schedule of assumptions used to estimate fair value of grants made on the date of grant | Nine months ended September 30, 2015 Risk-free interest rate 1.49% — 2.01% Expected volatility 67%-69% Expected term 5.50 — 6.11 years |
Summary of information on the Company's restricted stock | Restricted Stock Number of Shares Weighted Average Grant Date Fair Value January 1, 2015 $ Granted — $ — Vested ) $ Forfeited ) $ Unvested at September 30, 2015 $ |
Schedule of share-based compensation expense recorded in the statement of operations | Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Research and development $ $ $ $ General and administrative Total $ $ $ $ |
Convertible Senior Notes (Table
Convertible Senior Notes (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Convertible Senior Notes. | |
Summary of convertible notes | Liability component September 30, 2015 December 31, 2014 (in thousands) Principal $ $ — Less: Debt discount, net(1) ) — Net carrying amount $ $ — (1) Included in the consolidated balance sheets within convertible senior notes (due 2022) and amortized to interest expense over the remaining life of the Convertible Notes using the effective interest rate method. |
Summary of interest expense recognized related to the Convertible Notes | Three Months Ended September 30, 2015 2014 (in thousands) Contractual interest expense $ $ — Amortization of debt issuance costs — Amortization of debt discount — Total $ $ — Effective interest rate of the liability component % — |
The Company (Details)
The Company (Details) $ in Thousands | Aug. 04, 2014 | Aug. 31, 2014state | Sep. 30, 2015USD ($) | Aug. 31, 2015 | Dec. 31, 2014USD ($) |
Minimum age of ambulatory patient | 5 years | 5 years | |||
Number of member states of the European Economic Area | 31 | ||||
Period of market access for launching new product | 18 months | ||||
Accumulated deficit | $ | $ (542,050) | $ (422,551) | |||
Convertible debt | 3.0% Convertible senior notes due 2022 | |||||
Interest rate | 3.00% |
Summary of significant accoun26
Summary of significant accounting policies (Details) | Aug. 04, 2014 | Aug. 31, 2014 |
Summary of significant accounting policies | ||
Minimum age of ambulatory patient | 5 years | 5 years |
Fair value of financial instr27
Fair value of financial instruments and marketable securities (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Financial assets and liabilities measured at fair value on recurring basis | ||
Marketable securities | $ 230,809 | $ 265,493 |
Recurring basis | Total | ||
Financial assets and liabilities measured at fair value on recurring basis | ||
Marketable securities | 230,809 | 265,493 |
Warrant liability | 36 | 188 |
Recurring basis | Significant other observable inputs (level 2) | ||
Financial assets and liabilities measured at fair value on recurring basis | ||
Marketable securities | 230,809 | 265,493 |
Recurring basis | Significant unobservable inputs (level 3) | ||
Financial assets and liabilities measured at fair value on recurring basis | ||
Warrant liability | $ 36 | $ 188 |
Fair value of financial instr28
Fair value of financial instruments and marketable securities (Details 2) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Marketable securities accounted for as available-for-sale securities | ||
Amortized Cost | $ 231,777 | $ 265,880 |
Gross Unrealized Gains | 69 | 87 |
Gross Unrealized Losses | (1,037) | (474) |
Fair Value | 230,809 | 265,493 |
Corporate debt securities | ||
Marketable securities accounted for as available-for-sale securities | ||
Amortized Cost | 198,102 | 230,379 |
Gross Unrealized Gains | 52 | 80 |
Gross Unrealized Losses | (987) | (428) |
Fair Value | 197,167 | 230,031 |
Government obligations | ||
Marketable securities accounted for as available-for-sale securities | ||
Amortized Cost | 33,675 | 35,501 |
Gross Unrealized Gains | 17 | 7 |
Gross Unrealized Losses | (50) | (46) |
Fair Value | $ 33,642 | $ 35,462 |
Fair value of financial instr29
Fair value of financial instruments and marketable securities (Details 3) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Marketable securities on the balance sheet | ||
Total Marketable securities, Less Than 12 Months | $ 164,120 | $ 163,761 |
Total Marketable securities, More Than 12 Months | 66,689 | 101,732 |
Corporate debt securities | ||
Marketable securities on the balance sheet | ||
Total Marketable securities, Less Than 12 Months | 144,846 | 157,758 |
Total Marketable securities, More Than 12 Months | 52,321 | 72,273 |
Government obligations | ||
Marketable securities on the balance sheet | ||
Total Marketable securities, Less Than 12 Months | 19,274 | 6,003 |
Total Marketable securities, More Than 12 Months | $ 14,368 | $ 29,459 |
Fair value of financial instr30
Fair value of financial instruments and marketable securities (Details 4) - Warrants - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | |
Changes in the fair value of warrant liability | ||
Beginning balance | $ 188 | |
Change in fair value of warrant liability | (152) | |
Ending balance | $ 36 | $ 188 |
Minimum | ||
Assumption used to estimate the fair value of warrant liability by utilizing the Black-Scholes option-pricing model | ||
Volatility (as a percent) | 62.00% | 68.00% |
Risk-free interest rate (as a percent) | 0.49% | 0.89% |
Strike price (in dollars per share) | $ 128 | $ 128 |
Expected life | 1 year 8 months 16 days | 2 years 6 months |
Maximum | ||
Assumption used to estimate the fair value of warrant liability by utilizing the Black-Scholes option-pricing model | ||
Volatility (as a percent) | 70.00% | 70.00% |
Risk-free interest rate (as a percent) | 1.15% | 1.65% |
Strike price (in dollars per share) | $ 2,520 | $ 2,520 |
Expected life | 3 years 11 months 23 days | 4 years 8 months 12 days |
Common stock | ||
Assumption used to estimate the fair value of warrant liability by utilizing the Black-Scholes option-pricing model | ||
Fair value of shares (in dollars per share) | $ 26.70 | $ 51.77 |
Other comprehensive loss and 31
Other comprehensive loss and accumulated other comprehensive items (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2015 | Sep. 30, 2015 | |
Other comprehensive income (loss) and accumulated other comprehensive items | ||
Balance at the beginning of the period | $ (495) | $ (737) |
Other comprehensive income/(loss) before reclassifications | (632) | (390) |
Other comprehensive income/(loss) | (632) | (390) |
Balance at the end of the period | (1,127) | (1,127) |
Unrealized Gains/(Losses) On Marketable Securities | ||
Other comprehensive income (loss) and accumulated other comprehensive items | ||
Balance at the beginning of the period | (486) | (387) |
Other comprehensive income/(loss) before reclassifications | (483) | (582) |
Other comprehensive income/(loss) | (483) | (582) |
Balance at the end of the period | (969) | (969) |
Foreign Currency Translation | ||
Other comprehensive income (loss) and accumulated other comprehensive items | ||
Balance at the beginning of the period | (9) | (350) |
Other comprehensive income/(loss) before reclassifications | (149) | 192 |
Other comprehensive income/(loss) | (149) | 192 |
Balance at the end of the period | $ (158) | $ (158) |
Accounts payable and accrued 32
Accounts payable and accrued expenses (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Accounts payable and accrued expenses | ||
Employee compensation, benefits, and related accruals | $ 7,744 | $ 9,312 |
Consulting and contracted research | 9,089 | 9,349 |
Professional fees | 2,975 | 3,334 |
Accounts payable | 8,715 | 4,128 |
Other | 3,172 | 2,998 |
Accounts payable and accrued expenses | $ 31,695 | $ 29,121 |
Warrants (Details)
Warrants (Details) - Warrants - Common stock - $ / shares | Sep. 30, 2015 | Dec. 31, 2014 |
2,017 | ||
Warrants | ||
Warrant shares | 6,250 | 6,250 |
Exercise price (in dollars per share) | $ 128 | $ 128 |
2019 and 2020 | ||
Warrants | ||
Warrant shares | 7,030 | 7,030 |
Exercise price (in dollars per share) | $ 128 | $ 128 |
2,019 | ||
Warrants | ||
Warrant shares | 130 | 130 |
Exercise price (in dollars per share) | $ 2,520 | $ 2,520 |
Net loss per share (Details)
Net loss per share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Numerator | ||||
Net loss | $ (43,223) | $ (27,282) | $ (119,499) | $ (66,484) |
Denominator | ||||
Denominator for basic and diluted net loss per share (in shares) | 33,908,853 | 29,351,693 | 33,528,833 | 28,441,827 |
Net loss per share: | ||||
Basic and diluted (in dollars per share) | $ (1.27) | $ (0.93) | $ (3.56) | $ (2.34) |
Net loss per share (Details 2)
Net loss per share (Details 2) | 1 Months Ended | 9 Months Ended | |
Aug. 31, 2015USD ($)$ / shares | Sep. 30, 2015USD ($)shares | Sep. 30, 2014shares | |
Net loss per share | |||
Total shares excluded from calculation | 5,141,399 | 4,173,098 | |
Stock options | |||
Net loss per share | |||
Total shares excluded from calculation | 4,788,264 | 3,443,778 | |
Unvested restricted stock | |||
Net loss per share | |||
Total shares excluded from calculation | 353,135 | 729,320 | |
Convertible debt | 3.0% Convertible senior notes due 2022 | |||
Convertible Senior Notes. | |||
Principal amount of Notes | $ | $ 150,000,000 | $ 150,000,000 | |
Interest rate | 3.00% | ||
Conversion ratio | 17.7487 | ||
Common stock per principal amount | $ | $ 1,000 | ||
Conversion price per share | $ / shares | $ 56.34 |
Stock award plan (Details)
Stock award plan (Details) - USD ($) $ / shares in Units, $ in Thousands | Mar. 05, 2013 | May. 31, 2013 | Sep. 30, 2015 |
Stock option | |||
Number of options | |||
Outstanding at the beginning of the period (in shares) | 3,432,972 | ||
Granted (in shares) | 2,086,300 | ||
Exercised (in shares) | (654,748) | ||
Forfeited (in shares) | (74,366) | ||
Expired (in shares) | (1,894) | ||
Outstanding at the end of the period (in shares) | 4,788,264 | ||
Vested or expected to vest at the end of the period (in shares) | 4,497,155 | ||
Exercisable at the end of the period (in shares) | 1,132,683 | ||
Weighted-average exercise price | |||
Outstanding at the beginning of the period (in dollars per share) | $ 25 | ||
Granted (in dollars per share) | 52.04 | ||
Exercised (in dollars per share) | 13.27 | ||
Forfeited (in dollars per share) | 42.46 | ||
Expired (in dollars per share) | 285.48 | ||
Outstanding at the end of the period (in dollars per share) | 37.64 | ||
Vested or expected to vest at the end of the period (in dollars per share) | 37 | ||
Exercisable at the end of the period (in dollars per share) | $ 32.21 | ||
Weighted-average remaining contractual term | |||
Outstanding at the end of the period | 8 years 6 months 29 days | ||
Vested or expected to vest at the end of the period | 8 years 6 months 22 days | ||
Exercisable at the end of the period | 7 years 10 months 21 days | ||
Aggregate intrinsic value | |||
Outstanding at the end of the period (in dollars) | $ 20,137 | ||
Vested or expected to vest at the end of the period (in dollars) | 19,018 | ||
Exercisable at the end of the period (in dollars) | $ 10,312 | ||
Valuation assumptions | |||
Inducement grants for non-statutory stock options | 691,100 | ||
Expected dividend yield (as a percent) | 0.00% | ||
Weighted average grant date fair value (in dollars per share) | $ 32.32 | ||
Stock option | Minimum | |||
Valuation assumptions | |||
Risk-free interest rate (as a percent) | 1.49% | ||
Expected volatility (as a percent) | 67.00% | ||
Expected term | 5 years 6 months | ||
Stock option | Maximum | |||
Valuation assumptions | |||
Risk-free interest rate (as a percent) | 2.01% | ||
Expected volatility (as a percent) | 69.00% | ||
Expected term | 6 years 1 month 10 days | ||
2013 Stock Incentive Plan | |||
Stock option plan | |||
Number of shares available for issuance | 0 | ||
2013 Stock Incentive Plan | Unvested restricted stock | |||
Stock option plan | |||
Number of shares of restricted stock granted | 735,324 | ||
2013 Stock Incentive Plan | Stock option | |||
Stock option plan | |||
Number of shares of restricted stock granted | 4,613 | ||
2013 Stock Incentive Plan | Common stock | |||
Stock option plan | |||
Number of shares authorized | 739,937 | ||
2009 Equity and Long Term Incentive Plan | |||
Stock option plan | |||
Number of additional shares authorized | 2,500,000 | ||
2009 Equity and Long Term Incentive Plan and 2013 Stock Incentive Plan | Common stock | |||
Stock option plan | |||
Number of shares available for issuance | 238,427 | ||
2009 Equity and Long Term Incentive Plan and 2013 Stock Incentive Plan | Common stock | Maximum | |||
Stock option plan | |||
Number of shares subject to outstanding awards | 3,040,444 | ||
2013 Long Term Incentive Plan | Minimum | |||
Stock option plan | |||
Annual increase in the number of shares on the first day of the fiscal year | 2,500,000 | ||
Annual increase in the number of shares outstanding on the first day of the fiscal year (as a percent) | 4.00% |
Stock award plan (Details 2)
Stock award plan (Details 2) - Unvested restricted stock | 9 Months Ended |
Sep. 30, 2015$ / sharesshares | |
Number of Shares | |
Balance at the beginning of the period (in shares) | shares | 718,400 |
Vested (in shares) | shares | (361,919) |
Forfeited (in shares) | shares | (3,346) |
Balance at the end of the period (in shares) | shares | 353,135 |
Weighted Average Grant Date Fair Value | |
Balance at the beginning of the period (in dollars per share) | $ 10.72 |
Vested (in dollars per share) | 10.60 |
Forfeited (in dollars per share) | 10.82 |
Balance at the end of the period (in dollars per share) | $ 10.85 |
Stock award plan (Details 3)
Stock award plan (Details 3) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Share-based compensation expense recorded in the statement of operations | ||||
Share-based compensation expense | $ 8,054 | $ 4,621 | $ 26,130 | $ 12,605 |
Unrecognized compensation cost | 75,200 | $ 75,200 | ||
Weighted average remaining service period for recognition of unrecognized compensation cost | 2 years 10 months 24 days | |||
Research and development | ||||
Share-based compensation expense recorded in the statement of operations | ||||
Share-based compensation expense | 3,828 | 2,363 | $ 12,452 | 6,517 |
General and administrative | ||||
Share-based compensation expense recorded in the statement of operations | ||||
Share-based compensation expense | $ 4,226 | $ 2,258 | $ 13,678 | $ 6,088 |
Convertible Senior Notes (Detai
Convertible Senior Notes (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended |
Aug. 31, 2015USD ($)item$ / shares | Sep. 30, 2015USD ($) | Sep. 30, 2015USD ($) | |
Net carrying amount | $ 93,198,000 | $ 93,198,000 | |
Amortization of debt issuance costs | 37,000 | ||
3.0% Convertible senior notes due 2022 | Convertible debt | |||
Principal amount of Notes | $ 150,000,000 | 150,000,000 | 150,000,000 |
Less: Debt discount, net | (56,802,000) | (56,802,000) | |
Net carrying amount | 93,198,000 | 93,198,000 | |
Interest rate | 3.00% | ||
Net proceeds from issuance of convertible notes | $ 145,400,000 | ||
Trading days, number | item | 20 | ||
Consecutive trading days, period | 30 days | ||
Stock price trigger (as a percent) | 130.00% | ||
Business days, period | 5 days | ||
Consecutive trading-day period | 5 days | ||
Common stock per principal amount | $ 1,000 | ||
Maximum product of the closing sale price of shares of the Company's common stock and the applicable conversion rate for such trading day (as a percent) | 98.00% | ||
Conversion ratio | 17.7487 | ||
Conversion price per share | $ / shares | $ 56.34 | ||
Convertible debt instrument holders required to issue notice for declaration of principal and unpaid interest payable upon events of default (as a percent of principal amount by instrument holders) | 25 | ||
Convertible Instruments Principal And Unpaid Interest Payable Upon Events Of Default | 100.00% | ||
Term of the convertible notes | 7 years | ||
Net deferred tax liability in connection with convertible notes | $ 22,300,000 | ||
Fair value of convertible notes | 93,200,000 | $ 93,200,000 | |
Remaining contractual life of the convertible notes | 6 years 10 months 24 days | ||
Contractual interest expense | 584,000 | ||
Amortization of debt issuance costs | 37,000 | ||
Amortization of debt discount | 736,000 | ||
Total | $ 1,357,000 | ||
Effective interest rate of the liability component (as a percent) | 11.00% | 11.00% | |
3.0% Convertible senior notes due 2022 | Convertible debt | Redemption on or after August 20, 2018 | |||
Trading days, number | item | 19 | ||
Consecutive trading days, period | 30 days | ||
Stock price trigger (as a percent) | 130.00% | ||
Redemption price (as a percent) | 100.00% |