Achillion Pharmaceuticals 10-Q 4 Aug 16 2016 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2016	Aug. 01, 2016
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2016
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q2
Trading Symbol	ACHN
Entity Registrant Name	ACHILLION PHARMACEUTICALS INC
Entity Central Index Key	1,070,336
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		136,680,888

Balance Sheets

Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 33,777	$ 81,725
Marketable securities	391,429	377,616
Accounts and other receivables	886	506
Prepaid expenses and other current assets	3,008	2,741
Total current assets	429,100	462,588
Fixed assets, net	3,019	1,735
Other assets	84	50
Restricted cash	152	152
Total assets	432,355	464,525
Current liabilities:
Accounts payable	5,811	4,133
Accrued expenses	6,795	10,302
Current portion of long-term debt	230	223
Total current liabilities	12,836	14,658
Long-term debt	114	231
Other long-term liabilities	150
Total liabilities	13,100	14,889
Commitments and contingencies (Note 13)
Stockholders' equity:
Common stock, $.001 par value; 200,000 shares authorized: 136,681 and 136,640 shares issued and outstanding at June 30, 2016 and December 31, 2015, respectively	137	137
Additional paid-in capital	911,066	905,256
Accumulated deficit	(492,259)	(455,712)
Accumulated other comprehensive income (loss)	311	(45)
Total stockholders' equity	419,255	449,636
Total liabilities and stockholders' equity	$ 432,355	$ 464,525

Balance Sheets (Parenthetical)

Balance Sheets (Parenthetical) - $ / shares shares in Thousands	Jun. 30, 2016	Dec. 31, 2015
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	200,000	200,000
Common stock, shares issued	136,681	136,640
Common stock, shares outstanding	136,681	136,640

Statements of Comprehensive Los

Statements of Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Revenue		$ 711		$ 711
Operating expenses
Research and development	$ 14,154	19,772	$ 27,433	34,928
General and administrative	5,155	10,127	10,595	14,370
Total operating expenses	19,309	29,899	38,028	49,298
Loss from operations	(19,309)	(29,188)	(38,028)	(48,587)
Other income (expense)
Interest income	828	225	1,507	377
Interest expense	(12)	(15)	(26)	(31)
Net loss	(18,493)	(28,978)	(36,547)	(48,241)
Total comprehensive loss (Note 11)	$ (18,447)	$ (29,058)	$ (36,191)	$ (48,261)
Basic and diluted net loss per share (Note 5)	$ (0.14)	$ (0.25)	$ (0.27)	$ (0.42)
Weighted average number of shares used in computing basic and diluted net loss per share	136,680	117,770	136,647	114,504

Statements of Cash Flows

Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Cash flows from operating activities
Net loss	$ (36,547)	$ (48,241)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	432	321
Non-cash stock-based compensation	5,613	5,311
(Gain)/loss on disposal of equipment	8
Premium on purchases of marketable securities	(600)	(1,359)
Amortization of premium on marketable securities	796	900
Changes in operating assets and liabilities:
Accounts and other receivables	(380)	(1,357)
Prepaid expenses and other assets	(301)	(401)
Accounts payable	1,349	4,984
Accrued expenses and other liabilities	(3,497)	5,607
Net cash used in operating activities	(33,127)	(34,235)
Cash flows from investing activities
Purchases of fixed assets	(1,255)	(321)
Purchases of marketable securities	(330,804)	(243,959)
Maturities of marketable securities	317,151	125,051
Net cash (used in) investing activities	(14,908)	(119,229)
Cash flows from financing activities
Proceeds from issuance of common stock in connection with public offerings, net of issuance costs		138,260
Proceeds from exercise of stock options	71	3,014
Proceeds from sale of common stock under Employee Stock Purchase Plan	126	137
Borrowings of debt		229
Repayments of debt	(110)	(142)
Net cash provided by financing activities	87	141,498
Net decrease in cash and cash equivalents	(47,948)	(11,966)
Cash and cash equivalents, beginning of period	81,725	73,664
Cash and cash equivalents, end of period	33,777	61,698
Supplemental disclosure of cash flow information
Cash paid for interest	25	28
Supplemental disclosure of non-cash financing activities
Cashless exercise of warrants		53
Purchases of equipment in accounts payable and accrued expenses	$ 469	$ 145

Nature of the Business

Nature of the Business	6 Months Ended
	Jun. 30, 2016
Nature of the Business	1. Nature of the Business Achillion Pharmaceuticals, Inc. (the “Company”) was incorporated on August 17, 1998 in Delaware. The Company is a science-driven, patient-focused biopharmaceutical company seeking to leverage its believed strengths across the continuum from discovery through commercialization by discovering and developing small molecule therapeutics to meet the needs of patients with infectious and complement-mediated diseases. The Company is devoting substantially all of its efforts towards product research and development. The Company incurred losses of $478,397 from inception through June 30, 2016 and had an accumulated deficit of $492,259 at June 30, 2016, which includes preferred stock dividends recognized until the Company’s initial public offering in 2006. The Company has funded its operations primarily through the sale of equity securities. Based on the Company’s current clinical plan, the Company believes that its existing cash, cash equivalents and marketable securities will be sufficient to meet its current projected operating requirements for at least the next 12 months. However, the Company’s future capital requirements may change and will depend upon numerous factors, including but not limited to: • the scope, progress, results and costs of drug discovery, preclinical development, laboratory testing and clinical trials for the Company’s drug candidates; • the Company’s ability to enter into and the terms and timing of any collaborations, licensing or other arrangements that it may establish; • the number of future drug candidates that the Company pursues and their development requirements; • the outcome, timing and costs of seeking regulatory approvals; • the costs of commercialization activities for any of the Company’s drug candidates that receive marketing approval to the extent such costs are not the responsibility of any current or future collaborators, including the costs and timing of establishing product sales, marketing, distribution and manufacturing capabilities; • subject to receipt of marketing approval, revenue, if any, received from commercial sales of the Company’s drug candidates; • the Company’s headcount growth and associated costs as it expands its research and development and establishes a commercial infrastructure; • the costs involved in preparing, filing, prosecuting, maintaining, enforcing and defending patent and other intellectual property claims; • the timing and amount of proceeds received from milestones achieved and royalties earned, if any, by the Company under its exclusive collaboration and license agreement with Janssen Pharmaceuticals, Inc., the pharmaceutical subsidiary of Johnson and Johnson, Inc. (“Janssen”); • the Company’s ability to raise debt or equity capital, including any changes in the credit or equity markets that may impact its ability to obtain capital in the future; • the costs associated with, and the outcome of, lawsuits against the Company, if any; • the Company’s acquisition and development of new technologies and drug candidates; and • competing technological and market developments, including those currently unknown to the Company.

Accounting Standards Updates

Accounting Standards Updates	6 Months Ended
	Jun. 30, 2016
Accounting Standards Updates	2. Accounting Standards Updates In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” which supersedes all existing revenue recognition requirements, including most industry-specific guidance. ASU No. 2014-09 requires a company to recognize revenue when it transfers goods or services to customers in an amount that reflects the consideration that the company expects to receive for those goods or services. In August 2015, the FASB issued ASU No. 2015-14, “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date,” which delays the effective date of ASU No. 2014-09 by one year. The new standard is effective for reporting periods beginning after December 15, 2017. The Company is currently evaluating the impact ASU No. 2014-09 will have on its financial position and results of operations. In August 2014, FASB issued ASU No. 2014-15, “Presentation of Financial Statements – Going Concern.” ASU No. 2014-15 provides guidance regarding management’s responsibility to evaluate whether there exists substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures in certain circumstances. ASU No. 2014-15 is effective for annual reporting periods beginning after December 15, 2016, and interim periods thereafter. The Company does not believe ASU No. 2014-15 will have a material effect on its financial position and results of operations or disclosures. In February 2016, FASB issued ASU No. 2016-02 “Leases - Topic 842”. ASU No. 2016-02 requires the recognition of lease assets and lease liabilities by lessees for all leases greater than one year in duration and classified as operating leases under previous GAAP. ASU No. 2016-02 is effective for fiscal years beginning after December 15, 2018, and for interim periods within that fiscal year. The Company is currently evaluating the impact ASU No. 2016-02 will have on its financial position and results of operations. In March 2016, FASB issued ASU No. 2016-09, “Compensation - Stock Compensation (Topic 718).” The new guidance simplifies certain aspects related to income taxes, statement of cash flows, and forfeitures when accounting for share-based payment transactions. ASU No. 2016-09 is effective for annual periods beginning after December 15, 2017, and interim periods within annual periods beginning after December 15, 2018. Early adoption is permitted. The Company is currently evaluating the impact ASU No 2016-09 will have on its financial position and results of operations. In March 2016, the FASB issued ASU No. 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations.” ASU No. 2016-08 clarifies the implementation guidance on principal versus agent considerations. The Company is currently evaluating the method of adoption and the potential impact that Topic 606 may have on its financial position and results of operations. In April 2016, the FASB issued ASU No. 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing.” ASU No. 2016-10 clarifies the implementation guidance on identifying performance obligations and licensing. The Company is currently evaluating the method of adoption and the potential impact that Topic 606 may have on its financial position and results of operations.

Basis of Presentation

Basis of Presentation	6 Months Ended
	Jun. 30, 2016
Basis of Presentation	3. Basis of Presentation The accompanying unaudited financial statements of the Company should be read in conjunction with the audited financial statements and notes as of and for the year ended December 31, 2015 included in the Company’s Annual Report on Form 10-K filed with the SEC on February 25, 2016. The accompanying financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) for interim financial information, in accordance with the instructions to Form 10-Q and the guidance in Article 10 of Regulation S-X. Accordingly, since they are interim financial statements, the accompanying financial statements do not include all of the information and disclosures required by U.S. GAAP for complete financial statements. In the opinion of the Company, the accompanying unaudited financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of its financial position as of June 30, 2016, and its results of operations for the three and six months ended June 30, 2016 and 2015, and cash flows for the six months ended June 30, 2016 and 2015. The balance sheet as of December 31, 2015, was derived from audited annual financial statements but does not contain all of the footnote disclosures from the annual financial statements. Interim results are not necessarily indicative of results for a full year. The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect amounts reported in the financial statements and notes thereto.

Financing Activities

Financing Activities	6 Months Ended
	Jun. 30, 2016
Financing Activities	4. Financing Activities Public Offering In February 2015, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Leerink Partners LLC and Deutsche Bank Securities Inc., as representatives of the several underwriters named therein (collectively, the “Underwriters”), relating to a public offering of shares of the Company’s common stock, par value $0.001 per share, at a price of $10.25 per share less underwriting discounts and commissions (the “Offering”). The Company issued and sold to the Underwriters an aggregate of 13,800 shares of common stock in connection with the Offering. The Offering resulted in net proceeds to the Company of $132,558.

Earnings (Loss) Per Share

Earnings (Loss) Per Share	6 Months Ended
	Jun. 30, 2016
Earnings (Loss) Per Share	5. Earnings (Loss) Per Share Basic earnings (loss) per share (“EPS”) is calculated in accordance with Accounting Standards Codification (“ASC”) 260, “Earnings Per Share,” by dividing net income or loss attributable to common stockholders by the weighted average common stock outstanding. Diluted EPS is calculated by adjusting weighted average common shares outstanding for the dilutive effect of common stock options and warrants. In periods in which a net loss is recorded, no effect is given to potentially dilutive securities, since the effect would be antidilutive. Securities that could potentially dilute basic EPS in the future were not included in the computation of diluted EPS because to do so would have been antidilutive. The calculations of basic and diluted net loss per share are as follows: Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Net loss (numerator) $ (18,493 ) $ (28,978 ) $ (36,547 ) $ (48,241 ) Weighted-average shares, in thousands (denominator) 136,680 117,770 136,647 114,504 Basic and diluted net loss per share $ (0.14 ) $ (0.25 ) $ (0.27 ) $ (0.42 ) Potentially dilutive securities outstanding as of June 30, 2016 and 2015 are as follows: June 30, 2016 June 30, 2015 Stock options 10,695 8,637 Warrants 2,833 2,833 Total potentially dilutive securities outstanding 13,528 11,470

Collaboration Arrangement

Collaboration Arrangement	6 Months Ended
	Jun. 30, 2016
Collaboration Arrangement	6. Collaboration Arrangement In May 2015, the Company entered into parallel transactions with Janssen and its affiliate, JJDC, Inc., consisting of (i) an exclusive collaboration and license agreement with Janssen (the “Janssen Agreement”) pursuant to which, upon the closing of the transactions contemplated by the Janssen Agreement on June 29, 2015, the Company granted Janssen exclusive worldwide rights to develop and commercialize products that contain one or more of the Company’s drug candidates for the treatment of chronic hepatitis C virus, (“HCV”), namely odalasvir, a second-generation NS5A inhibitor, ACH-3422, a NS5B HCV polymerase inhibitor, and sovaprevir, a NS3/4A HCV protease inhibitor, and (ii) a stock purchase agreement (the “Stock Purchase Agreement”) pursuant to which, upon the closing of the transactions contemplated by the Stock Purchase Agreement, JJDC purchased 18,367 shares of the Company’s common stock at a price of $12.25 per share, for an aggregate purchase price of $225,000. The Janssen Agreement became effective on June 29, 2015 upon the early termination of applicable waiting periods under the Hart-Scott-Rodino Act. The Stock Purchase Agreement became effective July 1, 2015. In connection with the closing of the transactions contemplated by the Stock Purchase Agreement, the Company and JJDC entered into an investor agreement on July 1, 2015 (the “Investor Agreement”), governing specified rights and obligations of JJDC with respect to its ownership of shares of the Company’s common stock. Under the terms of the Janssen Agreement, the Company is eligible to receive (1) up to $115,000 of milestone payments based upon achievement of clinical enrollment and dosing in specified studies, substantially all of which is related to dosing in one study, (2) up to an additional $290,000 of milestone payments based upon regulatory approvals and first commercial sale in specified territories, the majority of which relates to regulatory approval and the first commercial sale in the U.S., and (3) up to an additional $500,000 of milestone payments based upon achieving worldwide sales targets. The Company is also eligible to receive royalties on worldwide annual net sales of licensed products, if any, at tiered royalty rate percentages beginning in the mid-teens and rising to the low-twenties, subject to customary reductions. The royalty term is determined on a licensed-product-by-licensed-product and country-by-country basis and begins on the first commercial sale of a licensed product in a country and ends on the expiration of the last to expire of specified patents or regulatory exclusivity covering such licensed product in such country or, with a customary royalty reduction, ten years after such first commercial sale if there is no such exclusivity. Janssen will bear the future costs of worldwide development and commercialization of licensed products. The term of the Janssen Agreement will continue, unless earlier terminated, until expiration of the royalty term for licensed products or all payment obligations under the Janssen Agreement. Janssen may terminate the Janssen Agreement upon 60 days’ written notice to the Company at any time prior to submission of the first application for marketing approval for a licensed product in any of the specified major market countries. Janssen may also terminate the Janssen Agreement under specified circumstances relating to the safety or regulatory approvability of a licensed product. Either the Company or Janssen may terminate the Janssen Agreement if the other party is in material breach of the agreement and fails to cure such breach within specified cure periods. Either the Company or Janssen may terminate the Janssen Agreement in the event of specified insolvency events involving the other party. Upon any early termination, rights to the Company’s licensed drug candidates will revert to the Company. Pursuant to the terms of the Janssen Agreement, the Company was required to provide technology transfer services related to the chemistry, manufacturing and know-how to Janssen for up to 180 days after the effective date. In accordance with ASC 605-25, “Revenue Recognition - Multiple-element arrangements,” which provides guidance on accounting for multiple-element arrangements, including the determination of the units of accounting and allocation of total arrangement consideration, the Company identified all of the obligations at the inception of the Janssen Agreement. The significant obligations were determined to be the license and the technology transfer services. The Company has determined that license and technology transfer services represent a single unit of accounting because they were not viewed to have standalone value. The Janssen Agreement entered into by the Company and Janssen, the Stock Purchase Agreement, and the Investor Agreement were entered into by the Company and Janssen’s affiliate in contemplation of each other. The only upfront amount received by the Company in exchange for the license and technology transfer services and the issuance of the Company’s common stock was the $225,000. The Company determined that the amount received in excess of the fair value of the Company’s common stock upon issuance of $66,122 was attributed to the license and technology services. The Company also determined that there was no discernable pattern in which the technology services would be provided during the 180 day period after the effective date. In accordance with ASC 605-10, “Revenue Recognition – Overall,” the Company determined that straight-line attribution of the license and technology services revenues would be used to recognize revenue. As such, revenue of $66,122 was recorded during the year ended December 31, 2015 associated with this transaction. The development, regulatory and sales milestones represent non-refundable amounts that would be paid by Janssen to the Company if certain milestones are achieved in the future. The Company has elected to apply the guidance in ASC 605-28, “Revenue Recognition – Milestone Method,” to the milestones. These milestones, if achieved, are substantive as they relate solely to past performance and are commensurate with estimated enhancement of value associated with the achievement of each milestone as a result of the Company’s performance; however, there can be no assurance that Janssen will achieve the milestones or that the Company will receive the related revenue. Pursuant to the terms of the Janssen Agreement, a joint steering committee, or JSC, consisting of three members from each of Janssen and the Company has been formed. The JSC will provide strategic guidance for the joint HCV program. If the JSC fails to reach a unanimous decision on a matter within its authority, the matter shall be referred to the applicable executive officers of Janssen and the Company who shall attempt to reach a mutual decision. If the executive officers cannot reach a mutual decision, then Janssen has the deciding vote with regard to such matter. Pursuant to the terms of the Investor Agreement, the Shares were subject to a lock-up restriction, voting covenants and a standstill agreement, each of which expired on July 1, 2016. In addition, until July 1, 2023, JJDC has the right to require, under specified conditions, that the Company file a registration statement in order to register all or a portion of the Shares. The Company will not be required to effect more than two such demand registrations for JJDC in the aggregate and is not required to effect more than one such demand registration in any 12 month period. The Company has also agreed to provide JJDC with certain “piggyback” registration rights such that at any time prior to July 1, 2023, subject to specified conditions, whenever the Company proposes to register shares of its common stock for its account, JJDC will have the right to include some or all of its Shares in such registration. The Investor Agreement also contains other customary terms and conditions of the parties with respect to the registration of the Shares.

Marketable Securities

Marketable Securities	6 Months Ended
	Jun. 30, 2016
Marketable Securities	7. Marketable Securities The Company applies the provisions of ASC 820, “Fair Value Measurements and Disclosures,” for financial assets and liabilities measured on a recurring basis which requires disclosure that establishes a framework for measuring fair value and expands disclosures in the financial statements. The guidance requires that fair value measurements be classified and disclosed in one of the three categories: Level 1: Quoted prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date; Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; or Level 3: Unobservable inputs. The fair value of the Company’s marketable securities of $391,429 and $377,616 as of June 30, 2016 and December 31, 2015, respectively, is valued based on level 2 inputs. The Company’s investments consist mainly of U.S. government and agency securities, government-sponsored bond obligations and certain other corporate debt securities. Fair value is determined by taking into consideration valuations obtained from third-party pricing services. The third-party pricing services utilize industry standard valuation models, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include reported trades of and broker/dealer quotes on the same or similar securities; issuer credit spreads; benchmark securities; and other observable inputs. The Company has assessed these as level 2 within the fair value hierarchy of ASC 820. The Company classifies its entire investment portfolio as available for sale as defined in ASC 320, “Debt and Equity Securities.” Securities are carried at fair value with the unrealized gains (losses) reported as a separate component of stockholders’ equity within accumulated other comprehensive income. The unrealized gain (loss) from marketable securities was $311 and $(45) at June 30, 2016 and December 31, 2015, respectively. As of June 30, 2016 and December 31, 2015, none of the Company’s investments were determined to be other than temporarily impaired. The following table summarizes the Company’s investments: June 30, 2016 December 31, 2015 Amortized Cost Unrealized Gain Unrealized (Loss) Estimated Fair Value Amortized Cost Unrealized Gain Unrealized (Loss) Estimated Fair Value Commercial Paper $ 111,736 $ 256 $ — $ 111,992 $ 137,483 $ 158 $ (6 ) $ 137,635 Corporate Debt Securities 197,169 52 (43 ) 197,178 164,884 — (205 ) 164,679 Government and Agency Securities 82,213 46 — 82,259 75,294 16 (8 ) 75,302 Total $ 391,118 $ 354 $ (43 ) $ 391,429 $ 377,661 $ 174 $ (219 ) $ 377,616

Accrued Expenses

Accrued Expenses	6 Months Ended
	Jun. 30, 2016
Accrued Expenses	8. Accrued Expenses Accrued expenses consist of the following: June 30, 2016 December 31, 2015 Accrued compensation $ 2,764 $ 4,326 Accrued research and development expenses 2,891 4,743 Accrued professional expenses 786 846 Other accrued expenses 354 387 Total $ 6,795 $ 10,302 Accrued research and development expenses consist of amounts owed to third-party contract research organizations, (“CROs”), clinical investigators, laboratories and data managers for research and development work performed on behalf of the Company.

Debt

Debt	6 Months Ended
	Jun. 30, 2016
Debt	9. Debt Debt consists of the following: June 30, 2016 December 31, 2015 2014 Credit Facility, payable in equal monthly installments through October 2017, with fixed interest of 6.30% per annum $ 206 $ 279 2014 Credit Facility, payable in equal monthly installments through March 2018, with fixed interest of 6.20% per annum $ 138 $ 175 Total debt 344 454 Less: current portion (230 ) (223 ) Total long-term debt, net of current portion $ 114 $ 231 In October 2014, the Company entered into a Master Security Agreement for a $1,000 Capital Expenditure Line of Credit (the “2014 Credit Facility”) with Webster Bank (“Webster”). Under the 2014 Credit Facility, the Company could draw down equipment loan advances for the purchase of new laboratory equipment through October 2015. In connection with the Master Security Agreement, the Company granted Webster a security interest in equipment to be purchased under the Credit Facility. In October 2014 and March 2015, Webster advanced $440 and $229, respectively, to the Company under the 2014 Credit Facility. In May 2016, the Company entered into an amendment to the Master Security Agreement. The amendment provides for a line of credit for equipment loan advances of $1,400, of which approximately $400 reflected the outstanding balance as of the date of the amendment, under the Master Security Agreement, dated October 2014 (the “2016 Credit Facility”). The Company can utilize the 2016 Credit Facility in connection with the purchase of new laboratory equipment through May 26, 2017. The purchased equipment will serve as collateral for any advances. Each drawdown under the the 2016 Credit Facility will be payable over a three-year term and will bear interest at a fixed rate, determined at the time of each borrowing, equal to the Three Year Federal Home Loan Bank of Boston Classic Advance rate plus 4.75%. The fair value for this debt is classified as a level 2 measurement. Fair value is computed using a discounted cash flow model based on current interest rates. At this time, the carrying value approximates fair value.

Stock-Based Compensation

Stock-Based Compensation	6 Months Ended
	Jun. 30, 2016
Stock-Based Compensation	10. Stock-Based Compensation The Company’s 2015 Stock Incentive Plan, as amended, (the “2015 Plan”), is administered by the Company’s Board of Directors and provides for the grant of incentive stock options, nonstatutory stock options, restricted stock, restricted stock units, stock appreciation rights and other stock-based awards. The Company’s officers, employees, consultants, advisors and directors are eligible to receive awards under the 2015 Plan; however, incentive stock options may only be granted to employees. Stock option awards are exercisable for a period determined by the Company, but in no event longer than ten years from the date of the grant. Stock option awards generally vest as to 25% of the shares underlying the option on the first anniversary of the date of grant and as to 6.25% of the shares underlying the option quarterly thereafter for the following three years, subject to continued service. There were 6,554 shares available to be granted under the 2015 Plan as of June 30, 2016. A summary of the status of the Company’s stock option activity for the three months ended June 30, 2016 is presented in the table and narrative below: Options Weighted Average Exercise Price Outstanding at January 1, 2016 8,501 $ 7.08 Granted 2,302 7.85 Exercised (25 ) 2.83 Forfeited (83 ) 7.85 Cancelled — — Outstanding at June 30, 2016 10,695 $ 7.25 Options exercisable at June 30, 2016 6,380 $ 6.56 Weighted-average fair value of options granted during the period $ 5.55 The Company utilizes the Black-Scholes option pricing model for determining the estimated fair value for stock-based awards. The Black-Scholes model requires the use of assumptions which determine the fair value of the stock-based awards. The assumptions used to value options granted are as follows: For the Six Months Ended June 30, 2016 June 30, 2015 Expected term of option 6.25 years 6.25 years Expected volatility 82 % 88 - 91 % Risk free interest rate 1.15 - 1.38 % 1.54 - 1.85 % Expected dividend yield 0 % 0 % Total compensation expense recorded in the accompanying statements of operations associated with stock option grants made to employees was $2,623 and $2,346 for the three months ended June 30, 2016 and 2015, respectively, and $5,560 and $5,210 for the six months ended June 30, 2016 and 2015, respectively. The Company recorded no tax benefit related to these stock options since the Company currently maintains a full valuation allowance on its deferred tax assets. As of June 30, 2016, the intrinsic value of the stock options outstanding was $18,320, of which $14,346 related to vested stock options and $3,974 related to unvested stock options. The intrinsic value of stock options is calculated based on the difference between the exercise prices of the underlying common stock and the quoted stock price of the Company’s common stock as of the reporting date. As of June 30, 2016, the total compensation cost related to unvested stock options not yet recognized in the financial statements is approximately $21,325, net of estimated forfeitures, and the weighted average period over which this amount is expected to be recognized is 1.5 years.

Comprehensive Loss

Comprehensive Loss	6 Months Ended
	Jun. 30, 2016
Comprehensive Loss	11. Comprehensive Loss The Company reports and presents comprehensive income (loss) in accordance with ASC 220, Comprehensive Income

Stockholders' Equity

Stockholders' Equity	6 Months Ended
	Jun. 30, 2016
Stockholders' Equity	12. Stockholders’ Equity Changes in stockholders’ equity for the six months ended June 30, 2016 and 2015 were as follows: For the Six Months Ended June 30, 2016 2015 Balance at December 31, 2015 and 2014 $ 449,636 $ 143,469 Net loss (36,547 ) (48,241 ) Stock-based compensation 5,613 5,311 Exercise of stock options 71 3,014 Change in unrealized loss on marketable securities 356 (20 ) Issuance of common stock — 138,260 Issuance of common stock under the Employee Stock Purchase Plan 126 137 Balance at June 30, 2016 and 2015 $ 419,255 $ 241,930

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Jun. 30, 2016
Commitments and Contingencies	13. Commitments and Contingencies From time to time, in the ordinary course of business, the Company is subject to litigation and regulatory examinations as well as information gathering requests, inquiries and investigations. As of June 30, 2016, there were no active matters.

Earnings (Loss) Per Share (Tabl

Earnings (Loss) Per Share (Tables)	6 Months Ended
	Jun. 30, 2016
Calculations of Basic and Diluted Net Loss per Share	The calculations of basic and diluted net loss per share are as follows: Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Net loss (numerator) $ (18,493 ) $ (28,978 ) $ (36,547 ) $ (48,241 ) Weighted-average shares, in thousands (denominator) 136,680 117,770 136,647 114,504 Basic and diluted net loss per share $ (0.14 ) $ (0.25 ) $ (0.27 ) $ (0.42 )
Potentially Dilutive Securities Outstanding	Potentially dilutive securities outstanding as of June 30, 2016 and 2015 are as follows: June 30, 2016 June 30, 2015 Stock options 10,695 8,637 Warrants 2,833 2,833 Total potentially dilutive securities outstanding 13,528 11,470

Marketable Securities (Tables)

Marketable Securities (Tables)	6 Months Ended
	Jun. 30, 2016
Summary of the Investments	The following table summarizes the Company’s investments: June 30, 2016 December 31, 2015 Amortized Cost Unrealized Gain Unrealized (Loss) Estimated Fair Value Amortized Cost Unrealized Gain Unrealized (Loss) Estimated Fair Value Commercial Paper $ 111,736 $ 256 $ — $ 111,992 $ 137,483 $ 158 $ (6 ) $ 137,635 Corporate Debt Securities 197,169 52 (43 ) 197,178 164,884 — (205 ) 164,679 Government and Agency Securities 82,213 46 — 82,259 75,294 16 (8 ) 75,302 Total $ 391,118 $ 354 $ (43 ) $ 391,429 $ 377,661 $ 174 $ (219 ) $ 377,616

Accrued Expenses (Tables)

Accrued Expenses (Tables)	6 Months Ended
	Jun. 30, 2016
Summary of Accrued Expenses	Accrued expenses consist of the following: June 30, 2016 December 31, 2015 Accrued compensation $ 2,764 $ 4,326 Accrued research and development expenses 2,891 4,743 Accrued professional expenses 786 846 Other accrued expenses 354 387 Total $ 6,795 $ 10,302

Debt (Tables)

Debt (Tables)	6 Months Ended
	Jun. 30, 2016
Schedule of Debt	Debt consists of the following: June 30, 2016 December 31, 2015 2014 Credit Facility, payable in equal monthly installments through October 2017, with fixed interest of 6.30% per annum $ 206 $ 279 2014 Credit Facility, payable in equal monthly installments through March 2018, with fixed interest of 6.20% per annum $ 138 $ 175 Total debt 344 454 Less: current portion (230 ) (223 ) Total long-term debt, net of current portion $ 114 $ 231

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	6 Months Ended
	Jun. 30, 2016
Summary of Stock Option Activity	A summary of the status of the Company’s stock option activity for the three months ended June 30, 2016 is presented in the table and narrative below: Options Weighted Average Exercise Price Outstanding at January 1, 2016 8,501 $ 7.08 Granted 2,302 7.85 Exercised (25 ) 2.83 Forfeited (83 ) 7.85 Cancelled — — Outstanding at June 30, 2016 10,695 $ 7.25 Options exercisable at June 30, 2016 6,380 $ 6.56 Weighted-average fair value of options granted during the period $ 5.55
Assumptions Used to Value Options Granted	The assumptions used to value options granted are as follows: For the Six Months Ended June 30, 2016 June 30, 2015 Expected term of option 6.25 years 6.25 years Expected volatility 82 % 88 - 91 % Risk free interest rate 1.15 - 1.38 % 1.54 - 1.85 % Expected dividend yield 0 % 0 %

Stockholders' Equity (Tables)

Stockholders' Equity (Tables)	6 Months Ended
	Jun. 30, 2016
Changes in Stockholders' Equity	Changes in stockholders’ equity for the six months ended June 30, 2016 and 2015 were as follows: For the Six Months Ended June 30, 2016 2015 Balance at December 31, 2015 and 2014 $ 449,636 $ 143,469 Net loss (36,547 ) (48,241 ) Stock-based compensation 5,613 5,311 Exercise of stock options 71 3,014 Change in unrealized loss on marketable securities 356 (20 ) Issuance of common stock — 138,260 Issuance of common stock under the Employee Stock Purchase Plan 126 137 Balance at June 30, 2016 and 2015 $ 419,255 $ 241,930

Nature of Business - Additional

Nature of Business - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		214 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Dec. 31, 2015
Nature Of Business [Line Items]
Losses incurred from inception	$ (18,493)	$ (28,978)	$ (36,547)	$ (48,241)	$ (478,397)
Accumulated deficit	$ (492,259)		$ (492,259)		$ (492,259)	$ (455,712)

Financing Activities - Addition

Financing Activities - Additional Information (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	1 Months Ended	6 Months Ended
	Feb. 28, 2015	Jun. 30, 2015	Jun. 30, 2016	Dec. 31, 2015
Financing Activities [Line Items]
Common stock, par value			$ 0.001	$ 0.001
Proceeds from issuance of common stock		$ 138,260
Public Offering
Financing Activities [Line Items]
Common stock, par value	$ 0.001
Share price	$ 10.25
Number of common shares issued in public or private offering	13,800
Proceeds from issuance of common stock	$ 132,558

Calculations of Basic and Dilut

Calculations of Basic and Diluted Net Loss per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended		214 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016
Schedule Of Calculation Of Numerator And Denominator In Earnings Per Share [Line Items]
Net loss (numerator)	$ (18,493)	$ (28,978)	$ (36,547)	$ (48,241)	$ (478,397)
Weighted-average shares, in thousands (denominator)	136,680	117,770	136,647	114,504
Basic and diluted net loss per share	$ (0.14)	$ (0.25)	$ (0.27)	$ (0.42)

Potentially Dilutive Securities

Potentially Dilutive Securities Outstanding (Detail) - shares shares in Thousands	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive securities outstanding	13,528	11,470
Stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive securities outstanding	10,695	8,637
Warrants
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive securities outstanding	2,833	2,833

Collaboration Arrangement - Add

Collaboration Arrangement - Additional Information (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	Jul. 01, 2015	May 31, 2015	Jun. 30, 2015	Dec. 31, 2015
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Issuance of common stock			$ 138,260
Janssen Agreement
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Period of time after the first commercial sale before a customary royalty reduction if there is no exclusivity in place		10 years
Period of time written notice is required to terminate the agreement		60 days
End date of the option where the company at the request of the purchaser is required to file a registration statement to register all or a portion of the shares issued under a stock purchase agreement		Jul. 1, 2023
Janssen Agreement | License and technology transfer services
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Period of time pursuant to a collaboration agreement technology transfer services are required to be performed		180 days
The amount of cash received in excess of the fair value of the stock price for services to be performed and recognized as revenue in future periods	$ 66,122
Revenue recognized during the period				$ 66,122
Janssen Agreement | Clinical Milestone Events | Maximum
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Future milestone revenue		$ 115,000
Janssen Agreement | Regulatory Milestone Events | Maximum
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Future milestone revenue		290,000
Janssen Agreement | Sales Events Milestone | Maximum
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Future milestone revenue		$ 500,000
Janssen Agreement | Stock Purchase Agreement
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Issuance of common stock, shares	18,367
Number of stock purchased, price per share	$ 12.25
Issuance of common stock	$ 225,000

Marketable Securities - Additio

Marketable Securities - Additional Information (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Schedule of Available-for-sale Securities [Line Items]
Fair value of marketable securities	$ 391,429	$ 377,616
Unrealized (loss) gain on marketable securities	311	(45)
Fair Value, Inputs, Level 2
Schedule of Available-for-sale Securities [Line Items]
Fair value of marketable securities	$ 391,429	$ 377,616

Summary of Investments (Detail)

Summary of Investments (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	$ 391,118	$ 377,661
Unrealized Gain	354	174
Unrealized (Loss)	(43)	(219)
Estimated Fair Value	391,429	377,616
Corporate Debt Securities
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	197,169	164,884
Unrealized Gain	52
Unrealized (Loss)	(43)	(205)
Estimated Fair Value	197,178	164,679
Government and Agency Securities
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	82,213	75,294
Unrealized Gain	46	16
Unrealized (Loss)		(8)
Estimated Fair Value	82,259	75,302
Commercial Paper
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	111,736	137,483
Unrealized Gain	256	158
Unrealized (Loss)		(6)
Estimated Fair Value	$ 111,992	$ 137,635

Accrued Expenses (Detail)

Accrued Expenses (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Accrued Liabilities [Line Items]
Accrued compensation	$ 2,764	$ 4,326
Accrued research and development expenses	2,891	4,743
Accrued professional expenses	786	846
Other accrued expenses	354	387
Total	$ 6,795	$ 10,302

Debt (Detail)

Debt (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Line of Credit Facility [Line Items]
Total debt	$ 344	$ 454
Less: current portion	(230)	(223)
Total long-term debt, net of current portion	114	231
2014 Credit Facility | Credit Facility One
Line of Credit Facility [Line Items]
Total debt	206	279
2014 Credit Facility | Credit Facility Two
Line of Credit Facility [Line Items]
Total debt	$ 138	$ 175

Debt (Parenthetical) (Detail)

Debt (Parenthetical) (Detail) - 2014 Credit Facility	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Credit Facility One
Line of Credit Facility [Line Items]
Credit Facility, interest rate	6.30%	6.30%
Debt instrument, maturity year	Oct. 1, 2017	Oct. 1, 2017
Credit Facility Two
Line of Credit Facility [Line Items]
Credit Facility, interest rate	6.20%	6.20%
Debt instrument, maturity year	Mar. 1, 2018	Mar. 1, 2018

Debt - Additional Information (

Debt - Additional Information (Detail) - USD ($) $ in Thousands	1 Months Ended			6 Months Ended
	May 31, 2016	Mar. 31, 2015	Oct. 31, 2014	Jun. 30, 2016
2014 Credit Facility
Line of Credit Facility [Line Items]
Line of Credit Facility, maximum borrowing capacity			$ 1,000
Line of Credit Facility, expiration date			Oct. 31, 2015
Line of Credit Facility advance drawn		$ 229	$ 440
2016 Credit Facility
Line of Credit Facility [Line Items]
Line of Credit Facility, maximum borrowing capacity	$ 1,400
Line of Credit Facility, expiration date	May 26, 2017
Line of credit facility, outstanding amount at time of amendment	$ 400
Credit facility payable term	3 years
Line of credit facility, interest rate description				Three Year Federal Home Loan Bank of Boston Classic Advance rate plus 4.75%
Line of credit facility, percentage added to interest rate	4.75%

Stock-Based Compensation - Addi

Stock-Based Compensation - Additional Information (Detail) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Intrinsic value of stock options outstanding	$ 18,320		$ 18,320
Intrinsic value of stock options vested	14,346		14,346
Intrinsic value of stock options unvested	3,974		3,974
Total compensation cost related to unvested stock options not yet recognized	21,325		$ 21,325
Total compensation cost related to stock options not yet recognized, Weighted average period for recognition			1 year 6 months
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total compensation expense associated	$ 2,623	$ 2,346	$ 5,560	$ 5,210
2015 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares of common stock available for grant	6,554		6,554
2015 Plan | Quarterly thereafter for the following three years
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options vested period			3 years
Options awards, vesting percentage			6.25%
2015 Plan | On first anniversary of the date of grant
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options awards, vesting percentage			25.00%
2015 Plan | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options exercisable period			10 years

Company's Stock Option Activity

Company's Stock Option Activity (Detail) shares in Thousands	6 Months Ended
	Jun. 30, 2016$ / sharesshares
Options
Outstanding at January 1, 2016 | shares	8,501
Stock Options, Granted | shares	2,302
Stock Options, Exercised | shares	(25)
Stock Options, Forfeited | shares	(83)
Stock Options, Cancelled | shares	0
Outstanding at June 30, 2016 | shares	10,695
Options exercisable at June 30, 2016 | shares	6,380
Weighted Average Exercise Price
Weighted Average Exercise Price, Outstanding at January 1, 2016	$ 7.08
Weighted Average Exercise Price, Granted	7.85
Weighted Average Exercise Price, Exercised	2.83
Weighted Average Exercise Price, Forfeited	7.85
Weighted Average Exercise Price, Cancelled	0
Weighted Average Exercise Price, Outstanding at June 30, 2016	7.25
Weighted Average Exercise Price, Options exercisable at June 30, 2016	6.56
Weighted Average Exercise Price, weighted-average fair value of options granted during the period	$ 5.55

Assumptions Used to Value Optio

Assumptions Used to Value Options Granted (Detail)	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term of option	6 years 3 months	6 years 3 months
Expected volatility	82.00%
Expected dividend yield	0.00%	0.00%
Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected volatility		88.00%
Risk free interest rate	1.15%	1.54%
Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected volatility		91.00%
Risk free interest rate	1.38%	1.85%

Changes in Stockholders' Equity

Changes in Stockholders' Equity (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		214 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016
Stockholders Equity [Line Items]
Balance at December 31, 2015 and 2014			$ 449,636	$ 143,469
Net loss	$ (18,493)	$ (28,978)	(36,547)	(48,241)	$ (478,397)
Stock-based compensation			5,613	5,311
Exercise of stock options			71	3,014
Change in unrealized loss on marketable securities			356	(20)
Issuance of common stock				138,260
Issuance of common stock under the Employee Stock Purchase Plan			126	137
Balance at June 30, 2016 and 2015	$ 419,255	$ 241,930	$ 419,255	$ 241,930	$ 419,255