Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2017 | Aug. 04, 2017 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | ARENA PHARMACEUTICALS INC | |
Trading Symbol | ARNA | |
Entity Central Index Key | 1,080,709 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 39,220,245 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 130,763 | $ 90,712 |
Accounts receivable | 2,404 | 20,162 |
Inventory | 7,058 | 6,708 |
Prepaid expenses and other current assets | 3,373 | 2,307 |
Total current assets | 143,598 | 119,889 |
Land, property and equipment, net | 40,997 | 43,828 |
Intangibles, net | 1,880 | 2,357 |
Other non-current assets | 2,890 | 2,936 |
Total assets | 189,365 | 169,010 |
Current liabilities: | ||
Accounts payable and other accrued liabilities | 5,816 | 12,116 |
Accrued clinical and preclinical study fees | 4,097 | 3,883 |
Payable to Eisai | 9,074 | |
Current portion of deferred revenues | 30,975 | 35,288 |
Current portion of lease financing obligations | 3,810 | 3,518 |
Total current liabilities | 44,698 | 63,879 |
Other long-term liabilities | 904 | 821 |
Deferred revenues, less current portion | 1,467 | 2,167 |
Lease financing obligations, less current portion | 59,773 | 61,748 |
Commitments and contingencies | ||
Equity: | ||
Common stock | 3 | 2 |
Additional paid-in capital | 1,527,306 | 1,441,737 |
Accumulated other comprehensive loss | (385) | (3,099) |
Accumulated deficit | (1,444,149) | (1,398,736) |
Total equity attributable to stockholders of Arena | 82,775 | 39,904 |
Equity attributable to noncontrolling interest in consolidated variable interest entity | (252) | 491 |
Total equity | 82,523 | 40,395 |
Total liabilities and equity | $ 189,365 | $ 169,010 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Revenues: | ||||
Net product sales | $ 2,059 | $ 4,263 | $ 4,770 | $ 7,781 |
Toll manufacturing | 754 | 1,025 | 1,472 | 2,048 |
Total revenues | 6,492 | 9,512 | 13,116 | 19,359 |
Operating Costs and Expenses: | ||||
Cost of product sales | 1,497 | 851 | 4,029 | 3,279 |
Cost of toll manufacturing | 1,074 | 1,758 | 1,993 | 2,946 |
Research and development | 17,922 | 18,546 | 33,433 | 37,048 |
General and administrative | 7,236 | 8,465 | 15,400 | 15,389 |
Restructuring charges | 6,115 | 6,115 | ||
Total operating costs and expenses | 27,729 | 35,735 | 54,855 | 64,777 |
Loss from operations | (21,237) | (26,223) | (41,739) | (45,418) |
Interest and Other Income (Expense): | ||||
Interest income | 16 | 105 | 50 | 193 |
Interest expense | (1,538) | (1,619) | (3,108) | (3,298) |
Other | (857) | 554 | (1,316) | (208) |
Total interest and other expense, net | (2,379) | (960) | (4,374) | (3,313) |
Net loss | (23,616) | (27,183) | (46,113) | (48,731) |
Less net loss attributable to noncontrolling interest in consolidated variable interest entity | 299 | 743 | ||
Net loss attributable to stockholders of Arena | $ (23,317) | $ (27,183) | $ (45,370) | $ (48,731) |
Net loss attributable to stockholders of Arena per share: | ||||
Basic | $ (0.77) | $ (1.12) | $ (1.66) | $ (2.01) |
Diluted | $ (0.77) | $ (1.12) | $ (1.66) | $ (2.01) |
Shares used in calculating net loss attributable to stockholders of Arena per share: | ||||
Basic | 30,229 | 24,308 | 27,371 | 24,298 |
Diluted | 30,229 | 24,308 | 27,371 | 24,298 |
Comprehensive Loss: | ||||
Net loss | $ (23,616) | $ (27,183) | $ (46,113) | $ (48,731) |
Foreign currency translation gain (loss) | 1,910 | (1,239) | 2,714 | 1,352 |
Comprehensive loss | (21,706) | (28,422) | (43,399) | (47,379) |
Less comprehensive loss attributable to noncontrolling interest in consolidated variable interest entity | 299 | 743 | ||
Comprehensive loss attributable to stockholders of Arena | (21,407) | (28,422) | (42,656) | (47,379) |
Eisai | ||||
Revenues: | ||||
Other collaboration revenue | 1,781 | 1,975 | 3,316 | 5,201 |
Other | ||||
Revenues: | ||||
Other collaboration revenue | $ 1,898 | $ 2,249 | $ 3,558 | $ 4,329 |
Condensed Consolidated Stateme4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Operating Activities: | ||
Net loss | $ (46,113) | $ (48,731) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 3,033 | 4,709 |
Amortization of intangibles | 607 | 104 |
Share-based compensation | 3,968 | 7,080 |
Amortization of prepaid financing costs | 68 | 68 |
Gain on disposal of property and equipment | (393) | (161) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 18,954 | 1,665 |
Inventory | 76 | 545 |
Prepaid expenses and other assets | (990) | (720) |
Payables and accrued liabilities | (15,709) | 5,516 |
Deferred revenues | (5,658) | (4,206) |
Other long-term liabilities | (28) | 365 |
Net cash used in operating activities | (42,185) | (33,766) |
Investing Activities: | ||
Purchases of property and equipment | (90) | (377) |
Proceeds from sale of property and equipment | 161 | |
Other non-current assets | 90 | |
Net cash used in investing activities | (216) | |
Financing Activities: | ||
Principal payments on lease financing obligations | (1,684) | (1,421) |
Proceeds from issuance of common stock, net | 81,496 | 230 |
Net cash provided by (used in) financing activities | 79,812 | (1,191) |
Effect of exchange rate changes on cash | 2,424 | 975 |
Net increase (decrease) in cash and cash equivalents | 40,051 | (34,198) |
Cash and cash equivalents at beginning of period | 90,712 | 156,184 |
Cash and cash equivalents at end of period | $ 130,763 | $ 121,986 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | 1. Basis of Presentation The accompanying unaudited condensed consolidated financial statements of Arena Pharmaceuticals, Inc. should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2016, as filed with the Securities and Exchange Commission, or SEC, from which we derived our condensed consolidated balance sheet as of December 31, 2016. The accompanying condensed consolidated financial statements have been prepared in accordance with US generally accepted accounting principles, or GAAP, for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, since they are interim statements, the accompanying condensed consolidated financial statements do not include all of the information and notes required by GAAP for complete financial statements. The accompanying condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, that are, in the opinion of our management, necessary to a fair statement of the results for the interim periods presented. Interim results are not necessarily indicative of results for a full year. The accompanying consolidated financial statements include the balances and activity of our wholly owned subsidiaries and Beacon Discovery, Inc., or Beacon, a variable interest entity in which we have the controlling financial interest (see Note 12). The equity attributable to the noncontrolling interest in Beacon is presented as a separate component from the equity attributable to stockholders of Arena in the equity section of the condensed consolidated balance sheets. The results of operations and comprehensive loss attributable to the noncontrolling interest in Beacon are presented as separate components from the results of operations and comprehensive loss attributable to the stockholders of Arena in the condensed consolidated statements of operations and comprehensive loss. On June 14, 2017, we filed a certificate of amendment to our certificate of incorporation with the Secretary of State of the state of Delaware to effect a one-for-ten reverse stock split of our issued and outstanding common stock. The accompanying condensed consolidated financial statements and notes thereto give retrospective effect to the reverse stock split for all periods presented. All issued and outstanding common stock, options exercisable for common stock, restricted stock units, performance restricted stock units, and per share amounts contained in the condensed consolidated financial statements have been retroactively adjusted to reflect this reverse stock split for all periods presented. Concurrent with the reverse stock split we effected a reduction in the number of authorized shares of common stock from 367,500,000 shares to 73,500,000 shares. Liquidity. As of June 30, 2017, we had cash and cash equivalents of approximately $130.8 million. In July 2017, we raised approximately $162.0 million of proceeds from sales of our common stock (see Note 7). We believe our cash and cash equivalents will be sufficient to fund our operations for at least the next 12 months. It will require substantial cash to achieve our objectives of discovering, developing and commercializing drugs, and this process typically takes many years and potentially hundreds of millions of dollars for an individual drug. We may not have adequate available cash, or assets that could be readily turned into cash, to meet these objectives in the long term. We will need to obtain significant funds under our existing collaborations, under new collaboration, licensing or other commercial agreements for one or more of our drug candidates and programs or patent portfolios, or from other potential sources of liquidity, which may include the sale of equity, issuance of debt or other transactions. Recent Accounting Pronouncements Revenue Recognition. In May 2014, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, No. 2014-09, Revenue from Contracts with Customers The new guidance allows for two methods of adoption: (a) “full retrospective” adoption, meaning the standard is applied to all periods presented, or (b) “modified retrospective” adoption, meaning the cumulative effect of applying the new guidance is recognized as an adjustment to the opening retained earnings balance for the year of implementation. We plan to adopt the new revenue standard effective January 1, 2018, on a modified retrospective method with the cumulative effect of the change reflected in retained earnings as of January 1, 2018. We have continued to monitor FASB activity to assess certain interpretative issues and the associated implementation of the new standard. We are in the process of reviewing our revenue arrangements, which we expect to include product sales, manufacturing support payments, royalty payments, other collaboration payments and toll manufacturing, and are not yet able to estimate the anticipated impact to our consolidated financial statements from the implementation of the new standard as we continue to interpret the principles of the new standard. Other. In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities In February 2016, the FASB issued ASU No. 2016-02, Leases In May 2017, the FASB issued ASU No. 2017-09, Scope of Modification Accounting No. 2016-02 clarifies which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. This guidance is to be applied prospectively to awards modified on or after the adoption date and is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, with early adoption permitted. We do not anticipate that the adoption of ASU 2017-09 will have a material impact on our consolidated financial statements unless there are significant changes to our outstanding share based payment awards at which time we would assess the impact of the standard . Use of Estimates. The preparation of financial statements in accordance with GAAP requires our management to make estimates and assumptions that affect the reported amounts (including assets, liabilities, revenues and expenses) and related disclosures. The amounts reported could differ under different estimates and assumptions. |
Fair Value Disclosures
Fair Value Disclosures | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosures | 2. Fair Value Disclosures We measure our financial assets and liabilities at fair value, which is defined as the exit price, or the amount that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. We use the following three-level valuation hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs to value our financial assets and liabilities: Level 1 - Observable inputs such as unadjusted quoted prices in active markets for identical instruments. Level 2 - Quoted prices for similar instruments in active markets or inputs that are observable for the asset or liability, either directly or indirectly. Level 3 - Significant unobservable inputs based on our assumptions. The following tables present our valuation hierarchy for our financial assets and liabilities that are measured at fair value on a recurring basis, in thousands: Fair Value Measurements at June 30, 2017 Balance Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Money market funds 1 $ 6,419 $ 6,419 $ — $ — Fair Value Measurements at December 31, 2016 Balance Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Money market funds 1 $ 46,371 $ 46,371 $ — $ — (1) Included in cash and cash equivalents in our condensed consolidated balance sheets. |
Inventory
Inventory | 6 Months Ended |
Jun. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Inventory | 3. Inventory Inventory consisted of the following, in thousands: June 30, December 31, 2017 2016 Raw materials $ 2,913 $ 2,553 Work in process 3,361 3,943 Finished goods 784 212 Total inventory $ 7,058 $ 6,708 |
Land, Property and Equipment
Land, Property and Equipment | 6 Months Ended |
Jun. 30, 2017 | |
Property Plant And Equipment [Abstract] | |
Land, Property and Equipment | 4. Land, Property and Equipment Land, property and equipment consisted of the following, in thousands: June 30, December 31, 2017 2016 Cost $ 103,892 $ 108,356 Less accumulated depreciation and amortization (62,895 ) (64,528 ) Land, property and equipment, net $ 40,997 $ 43,828 |
Accounts Payable and Other Accr
Accounts Payable and Other Accrued Liabilities | 6 Months Ended |
Jun. 30, 2017 | |
Payables And Accruals [Abstract] | |
Accounts Payable and Other Accrued Liabilities | 5. Accounts Payable and Other Accrued Liabilities Accounts payable and other accrued liabilities consisted of the following, in thousands: June 30, December 31, 2017 2016 Accounts payable $ 1,475 $ 5,977 Accrued compensation 3,424 4,820 Other accrued liabilities 917 1,319 Total accounts payable and other accrued liabilities $ 5,816 $ 12,116 |
Collaborations
Collaborations | 6 Months Ended |
Jun. 30, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Collaborations | 6. Collaborations Please refer to our Annual Report on Form 10-K for the year ended December 31, 2016, for additional information regarding the collaborations described below. Eisai. In July 2010, we granted Eisai exclusive commercialization rights for lorcaserin solely in the United States and its territories and possessions. In May 2012, we and Eisai entered into the first amended and restated agreement, which expanded Eisai’s exclusive commercialization rights to include most of North and South America. In November 2013, we and Eisai entered into the second amended and restated agreement, or Second Amended Agreement, which expanded Eisai’s exclusive commercialization rights for lorcaserin to all of the countries in the world, except for South Korea, Taiwan, Australia, New Zealand and Israel. On December 28, 2016, we and Eisai amended and restated the terms of the Second Amended Agreement by entering into the Eisai Agreement, which was determined to be a material modification of the Second Amended Agreement. Under the Eisai Agreement, we identified the following significant deliverables to Eisai which each qualify as a separate unit of accounting: • An exclusive royalty-bearing license or transfer of intellectual property, or License, to commercialize lorcaserin world-wide relating to certain patents, regulatory approvals, samples, records, know-how related to lorcaserin, trademarks and domain names related to the lorcaserin brand names. We also assigned to Eisai our rights under the commercial lorcaserin distribution agreements with Ildong for South Korea, CYB for Taiwan and Teva for Israel. This is collectively referred to as the License Deliverable. • A manufacturing and supply commitment for two years commencing December 28, 2016, or Manufacturing and Supply Commitment Deliverable. • Bulk inventory and precursor material for manufacturing lorcaserin, or Inventory Deliverable. Royalty payments. Pursuant to the Eisai Agreement, we are eligible to receive royalty payments from Eisai based on the global net sales of lorcaserin. The royalty rates are as follows: • 9.5% on annual net sales less than or equal to $175.0 million • 13.5% on annual net sales greater than $175.0 million but less than or equal to $500.0 million • 18.5% of annual net sales greater than $500.0 million Manufacturing and supply commitment and inventory purchase. We manufacture lorcaserin at our facility in Zofingen, Switzerland. Under the Eisai Agreement, we have agreed to manufacture and supply, and Eisai has agreed to purchase from us, all of Eisai’s requirements (or specified minimum quantities if such quantities are greater than Eisai’s requirements), subject to certain exceptions, for lorcaserin for development and commercial use for an initial two-year period. The initial period may be extended by Eisai for an additional six months upon payment of an extension fee of CHF 2.0 million. Eisai will pay us agreed upon prices to deliver finished drug product during this time. Additionally, Eisai has agreed to pay up to CHF 13.0 million in manufacturing support payments during the initial two-year period supply period, and pay up to CHF 6.0 million in manufacturing support payments during the six-month extension period, if the extension option is exercised by Eisai. On December 28, 2016, Eisai paid us $10.0 million to acquire our entire inventory of bulk lorcaserin and the precursor materials for manufacturing lorcaserin. This payment was included in the arrangement consideration allocated to the units of accounting under the Eisai Agreement. We expect this inventory will remain at our Zofingen, Switzerland facility for us to use to manufacture finished drug product in order to meet Eisai’s requirements during the initial two-year period and, if applicable, the six-month extension period. The inventory that is not expected to be used to manufacture finished drug product will be physically transferred to Eisai upon the earlier of Eisai’s request to transfer or the end of the manufacturing and supply commitment period. Allocation of Eisai Agreement arrangement consideration to the units of accounting. The total arrangement consideration of $115.6 million primarily consists of (i) the December 28, 2016, balances of deferred revenues from the upfront payments received under the prior Eisai agreements and the distribution agreements with Ildong, CYB and Teva, which were assigned to Eisai; (ii) the $10.0 million payment received from Eisai on December 28, 2016; and (iii) the product purchase payments and manufacturing support payments we expect to receive from Eisai for the initial two-year manufacturing and supply commitment period. All of the deliverables were determined to have standalone value and to meet the criteria to be accounted for as separate units of accounting. Factors considered in the determination included, among other things, for the license, the manufacturing experience and capabilities of Eisai and their sublicense rights, and for the remaining deliverables the fact that they are not proprietary and can be provided by other vendors. The total arrangement consideration was allocated to the units of accounting on the basis of their relative estimated selling prices as follows: • $64.0 million was allocated to the License Deliverable. As the License Deliverable was delivered on December 28, 2016, this amount was recognized as revenue in 2016. • $30.8 million was allocated to the Inventory Deliverable. Title to this entire inventory passed to Eisai on December 28, 2016. However, none of this inventory was physically transferred from the manufacturing facility, and there is no fixed schedule for delivery given some will be delivered on a continuous basis as we perform under the manufacturing commitment while the rest will be physically transferred to Eisai upon request by Eisai or upon the end of the manufacturing and supply commitment period. Also, the risks of ownership for this inventory have not been fully passed to Eisai as we will continue to have financial responsibility for loss, damage or destruction which occurs while in our possession. Therefore, none of the arrangement consideration allocated to this deliverable was recognized as revenue and none of the carrying value of this inventory was recognized as cost of product sales for the year ended December 31, 2016. For the three months ended June 30, 2017, we recognized revenue from net product sales related to the Inventory Deliverable of $1.8 million and cost of product sales of $0.4 million related to this inventory. For the six months ended June 30, 2017, we recognized revenue from net product sales related to the Inventory Deliverable of $4.0 million and cost of product sales of $1.0 million related to this inventory. • $20.8 million was allocated to the Manufacturing and Supply Commitment Deliverable. This deliverable will be provided over 2017 and 2018 as product is shipped to Eisai. For the three months ended June 30, 2017, we recognized $2.0 million as revenue for the arrangement consideration allocated to this deliverable, of which $0.3 million is classified as net product sales and $1.7 million of manufacturing support payments is classified as other Eisai collaboration revenue. For the six months ended June 30, 2017, we recognized $4.1 million as revenue for the arrangement consideration allocated to this deliverable, of which $0.8 million is classified as net product sales and $3.4 million of manufacturing support payments is classified as other Eisai collaboration revenue The condensed consolidated balance sheet at June 30, 2017, includes deferred revenues of $28.1 million relating to the Eisai Agreement (primarily comprised of the deferred portion of the previously received upfront payments and the $10.0 million payment received from Eisai on December 28, 2016). Included in our ending inventory balance at June 30, 2017 of $7.1 million is $4.0 million related to the carrying value of the remaining product on-hand under the Inventory Deliverable. These balances are expected to be recognized in subsequent periods as this inventory is used in the manufacture and supply of lorcaserin to Eisai over the commitment period. Axovant Sciences Ltd. We and Axovant Sciences, Ltd., or Axovant, have an exclusive agreement, or Axovant Agreement, under which Axovant has exclusive worldwide rights to develop and commercialize nelotanserin, subject to regulatory approval. We also provide certain services and will manufacture and sell nelotanserin to Axovant. Under the Axovant Agreement, we received an upfront payment of $4.0 million in May 2015, which was recorded as deferred revenues and is being recognized as revenue ratably over approximately five years, which is the period in which we expect to provide services under the arrangement. We will receive payments from sales of nelotanserin under the Axovant Agreement and are eligible to receive purchase price adjustment payments based on Axovant’s annual net product sales. We are eligible to receive up to an aggregate of $41.5 million in success milestones in case of full development and regulatory success of nelotanserin. Of these payments, two development milestones totaling $4.0 million are substantive and four regulatory milestones totaling $37.5 million are substantive. For the three and six months ended June 30, 2017, we recorded revenue of $0.5 million and $1.0 million, respectively related to the Axovant Agreement. For the three and six months ended June 30, 2016, we recorded revenue of $0.6 million and $1.2 million, respectively related to the Axovant Agreement. Boehringer Ingelheim International GmbH. We and Boehringer Ingelheim GmbH, or Boehringer Ingelheim, have an exclusive agreement, or Boehringer Ingelheim Agreement, to conduct joint research to identify drug candidates targeting an undisclosed G protein-coupled receptor, or GPCR, that belongs to the group of orphan central nervous system, or CNS, receptors. In part consideration of the rights to our intellectual property necessary or useful to conduct the joint research under the Boehringer Ingelheim Agreement, we received from Boehringer Ingelheim an upfront payment of $7.5 million in January 2016, less $1.2 million of withholding taxes which was refunded to us in October 2016. Revenues from this upfront payment were deferred, as we determined that the exclusive rights did not have standalone value without our ongoing participation in the joint research, and are being recognized ratably as revenues over the period in which we expect the services to be rendered, which is approximately two years. Under the Boehringer Ingelheim Agreement, we are eligible to receive up to an aggregate of $251.0 million in success milestones in case of full commercial success of multiple drug products. Of these payments, three development milestones totaling $7.0 million are substantive, three development $30.0 million are non-substantive, nine regulatory milestones totaling $84.0 million are non-substantive and four commercial milestones totaling $130.0 million are non-substantive. For the three and six months ended June 30, 2017, we recorded revenue of $1.3 million and $2.5 million, respectively related to the Boehringer Ingelheim Agreement. For the three and six months ended June 30, 2016, we recorded revenue of $1.5 million and $2.8 million, respectively related to the Boehringer Ingelheim Agreement. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2017 | |
Stockholders Equity Note [Abstract] | |
Stockholders' Equity | 7. Stockholders’ Equity In January 2017, we entered into an Equity Distribution Agreement, or the ATM, with Citigroup Global Markets, Inc., or the Sales Agent, under which we may offer and sell common stock having an aggregate offering price of up to $50.0 million from time to time though our Sales Agent. Sales of the shares under the ATM were made in transactions that are deemed to be “at-the-market” offerings as defined in Rule 415 under the Securities Act of 1933, as amended, including sales made by means of ordinary brokers’ transactions, including on the NASDAQ Stock Market. sold 489,023 shares of million . In April 2017, we completed the sale of an aggregate of 6,900,000 shares of our common stock under the underwritten public offering. Net proceeds from the offering were approximately $74.5 million after deducting underwriting discounts and commissions, and offering expenses payable by us. In July 2017, we completed the sale of additional 7,187,500 shares of our common stock under the underwritten public offering. Net proceeds from the offering were $162.0 million after deducting underwriting discounts and commissions, and offering expenses payable by us. |
Share-based Compensation
Share-based Compensation | 6 Months Ended |
Jun. 30, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Share-based Compensation | 8. Share-based Compensation We recognized share-based compensation expense as follows, in thousands: Three months ended Six months ended June 30, June 30, 2017 2016 2017 2016 Cost of product sales $ 6 $ — $ 57 $ 20 Research and development 576 1,977 955 3,740 General and administrative 1,548 1,262 2,956 2,288 Restructuring charges — 1,032 — 1,032 Total share-based compensation expense $ 2,130 $ 4,271 $ 3,968 $ 7,080 Total share-based compensation expense capitalized into inventory $ — $ 48 $ — $ 85 The following table summarizes our stock option activity during the six months ended June 30, 2017, in thousands (except per share data): Options Weighted- Average Exercise Price Outstanding at January 1, 2017 2,520 $ 29.77 Granted 1,871 14.59 Exercised (6 ) 14.80 Forfeited/cancelled/expired (191 ) 72.89 Outstanding at June 30, 2017 4,194 $ 21.46 The following table summarizes activity with respect to our time-based restricted stock unit awards, or RSUs, during the six months ended June 30, 2017, in thousands (except per share data): RSUs Weighted- Average Grant-Date Fair Value Unvested at January 1, 2017 3 $ 42.56 Granted — Vested — Forfeited/cancelled — Unvested at June 30, 2017 3 $ 42.56 During the six months ended June 30, 2017, the remaining Total Stockholder Return, or TSR, performance restricted stock unit, or PRSU, awards that we granted to our executive officers in March 2014 were forfeited without any earnout based on the TSR of our common stock relative to the TSR of the NASDAQ Biotechnology Index over the three-year performance period that began on March 1, 2014. In the aggregate, the target number of shares of common stock that could have been earned under the PRSUs granted in March 2014 was 69,498. Of the target number of shares of 74,498 for PRSUs granted in March 2015, 35,554 have been cancelled due to management changes. All other PRSUs granted in March 2015 were outstanding and unvested at June 30, 2017. |
Concentrations of Credit Risk a
Concentrations of Credit Risk and Major Customers | 6 Months Ended |
Jun. 30, 2017 | |
Risks And Uncertainties [Abstract] | |
Concentrations of Credit Risk and Major Customers | 9. Concentrations of Credit Risk and Major Customers Financial instruments, which potentially subject us to concentrations of credit risk, consist primarily of cash and cash equivalents. We limit our exposure to credit loss by holding our cash primarily in US dollars or, from time to time, placing our cash and investments in US government, agency and government-sponsored enterprise obligations and in corporate debt instruments that are rated investment grade, in accordance with an investment policy approved by our Board of Directors. The United States and South Korea are the only jurisdictions for which BELVIQ has been commercially sold. We also produce drug products for Siegfried AG, or Siegfried, and, to a lesser extent, another third party under toll manufacturing agreements. Percentages of our total revenues are as follows: Three months ended Six months ended June 30, June 30, 2017 2016 2017 2016 Eisai Agreement (See Note 6) 59.2 % 50.7 % 61.7 % 54.3 % Boehringer Ingelheim Agreement (See Note 6) 20.2 % 15.3 % 19.2 % 14.4 % Toll manufacturing agreements 11.6 % 10.8 % 11.2 % 10.6 % Axovant Agreement (See Note 6) 8.9 % 6.5 % 7.7 % 6.3 % Other collaboration agreements 0.1 % 16.7 % 0.2 % 14.4 % Total percentage of revenues 100.0 % 100.0 % 100.0 % 100.0 % |
Net Loss Per Share
Net Loss Per Share | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | 10. Net Loss Per Share We calculate basic and diluted net loss attributable to stockholders of Arena per share using the weighted-average number of shares of common stock outstanding during the period. Since we are in a net loss position, in addition to excluding potentially dilutive out-of-the money securities, we exclude from our calculation of diluted net loss attributable to stockholders of Arena per share all potentially dilutive in-the-money (i) stock options, (ii) RSUs, (iii) PRSUs and (iv) unvested restricted stock in our deferred compensation plan, and our diluted net loss per share is the same as our basic net loss per share. The following table presents the weighted-average number of potentially dilutive securities that were excluded from our calculation of diluted net loss attributable to stockholders of Arena per share, in thousands: Three months ended Six months ended June 30, June 30, 2017 2016 2017 2016 Stock options 4,002 2,668 3,567 2,289 RSUs and unvested restricted stock 3 24 3 28 Total 4,005 2,692 3,570 2,317 Because the market conditions for the PRSUs were not satisfied at June 30, 2017, or June 30, 2016, such securities are excluded from the table above. |
Legal Proceedings
Legal Proceedings | 6 Months Ended |
Jun. 30, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Legal Proceedings | 11. Legal Proceedings Beginning on September 20, 2010, a number of complaints were filed in the US District Court for the Southern District of California, or District Court, against us and certain of our current and former employees and directors on behalf of certain purchasers of our common stock. The complaints were brought as purported stockholder class actions, and, in general, include allegations that we and certain of our current and former employees and directors violated federal securities laws by making materially false and misleading statements regarding our BELVIQ program, thereby artificially inflating the price of our common stock. The plaintiffs sought unspecified monetary damages and other relief. On August 8, 2011, the District Court consolidated the actions and appointed a lead plaintiff and lead counsel. On November 1, 2011, the lead plaintiff filed a consolidated amended complaint. On March 28, 2013, the District Court dismissed the consolidated amended complaint without prejudice. On May 13, 2013, the lead plaintiff filed a second consolidated amended complaint. On November 5, 2013, the District Court dismissed the second consolidated amended complaint without prejudice as to all parties except for Robert E. Hoffman, who was dismissed from the action with prejudice. On November 27, 2013, the lead plaintiff filed a motion for leave to amend the second consolidated amended complaint. On March 20, 2014, the District Court denied plaintiff’s motion and dismissed the second consolidated amended complaint with prejudice. On April 18, 2014, the lead plaintiff filed a notice of appeal, and on August 27, 2014, the lead plaintiff filed his appellate brief in the US Court of Appeals for the Ninth Circuit, or Ninth Circuit. On October 24, 2014, we filed our answering brief in response to the lead plaintiff’s appeal. On December 5, 2014, the lead plaintiff filed his reply brief. A panel of the Ninth Circuit heard oral argument on the appeal on May 4, 2016. On October 26, 2016, the Ninth Circuit panel reversed the District Court’s dismissal of the second consolidated amended complaint and remanded the case back to the District Court for further proceedings. On January 25, 2017, the District Court permitted us to submit a renewed motion to dismiss the second consolidated amended complaint. On February 2, 2017, we filed the renewed motion to dismiss. On February 23, 2017, the lead plaintiff filed his opposition, and on March 2, 2017, we filed our reply. On April 28, 2017, the District Court denied our renewed motion to dismiss. On September 30, 2016, we and Eisai Inc. filed a patent infringement lawsuit against Lupin Limited and Lupin Pharmaceuticals, Inc. (collectively, Lupin) in the U.S. District Court for the District of Delaware. The lawsuit relates to a “Paragraph IV certification” notification that we and Eisai Inc. received regarding an abbreviated new drug application, or ANDA, submitted to the FDA by Lupin requesting approval to engage in the commercial manufacture, use, importation, offer for sale or sale of a generic version of BELVIQ ® ® Waxman On March 6, 2017, we and Eisai Inc. filed a patent infringement lawsuit against Teva Pharmaceuticals USA, Inc. and Teva Pharmaceutical Industries Ltd. (collectively, Teva) in the U.S. District Court for the District of Delaware. The lawsuit also relates to a “Paragraph IV certification” notification that we and Eisai Inc. received regarding an ANDA submitted to the FDA by Teva requesting approval to engage in the commercial manufacture, use, importation, offer for sale or sale of a generic version of BELVIQ XR ® release ® |
Beacon Discovery, Inc.
Beacon Discovery, Inc. | 6 Months Ended |
Jun. 30, 2017 | |
Variable Interest Entity Disclosure [Abstract] | |
Beacon Discovery, Inc. | 12. Beacon Discovery, Inc. In September 2016, we entered into a As Beacon would not be able to finance its activities without the financial support we are providing pursuant to agreements it has with us, Beacon is a variable interest entity. Arena does not own any equity in Beacon; however, as these agreements provide us the controlling financial interest in Beacon, we consolidate Beacon’s balances and activity within our condensed consolidated financial statements. The noncontrolling interest attributable to Beacon presented on our condensed consolidated financial statements is comprised of Beacon’s equity ownership interests as we do not own any voting interest in Beacon. The following table presents a reconciliation of the equity attributable to the stockholders of Arena and the equity attributable to Beacon, in thousands: Equity Attributable to Stockholders of Arena Equity Attributable to Noncontrolling Interest in Consolidated Variable Interest Entity Total Equity Balance at January 1, 2017 $ 39,904 $ 491 $ 40,395 Net loss (45,370 ) (743 ) (46,113 ) Translation gain 2,714 — 2,714 Other 85,527 — 85,527 Balance at June 30, 2017 $ 82,775 $ (252 ) $ 82,523 The following table presents the assets and liabilities of Beacon which are included in our condensed consolidated balance sheet at June 30, 2017, in thousands. The assets include only those assets that can be used to settle obligations of Beacon. The liabilities include third party liabilities of Beacon. As of June 30, 2017, Beacon had no creditors with recourse to the general credit of Arena. The assets and liabilities exclude intercompany balances that eliminate in consolidation: Assets of Beacon that can only be used to settle obligations of Beacon Cash and cash equivalents $ 211 Accounts receivable 4 Prepaid expense and other current assets 56 Land, property and equipment, net 528 Total assets of Beacon that can only be used to settle obligations of Beacon $ 799 Liabilities of Beacon for which creditors do not have recourse to the general credit of Arena Accounts payable and other accrued liabilities $ 176 Total liabilities of Beacon for which creditors do not have recourse to the general credit of Arena $ 176 |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | 13. Subsequent Events See Note 7 regarding the sale of shares of our common stock and |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements of Arena Pharmaceuticals, Inc. should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2016, as filed with the Securities and Exchange Commission, or SEC, from which we derived our condensed consolidated balance sheet as of December 31, 2016. The accompanying condensed consolidated financial statements have been prepared in accordance with US generally accepted accounting principles, or GAAP, for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, since they are interim statements, the accompanying condensed consolidated financial statements do not include all of the information and notes required by GAAP for complete financial statements. The accompanying condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, that are, in the opinion of our management, necessary to a fair statement of the results for the interim periods presented. Interim results are not necessarily indicative of results for a full year. The accompanying consolidated financial statements include the balances and activity of our wholly owned subsidiaries and Beacon Discovery, Inc., or Beacon, a variable interest entity in which we have the controlling financial interest (see Note 12). The equity attributable to the noncontrolling interest in Beacon is presented as a separate component from the equity attributable to stockholders of Arena in the equity section of the condensed consolidated balance sheets. The results of operations and comprehensive loss attributable to the noncontrolling interest in Beacon are presented as separate components from the results of operations and comprehensive loss attributable to the stockholders of Arena in the condensed consolidated statements of operations and comprehensive loss. On June 14, 2017, we filed a certificate of amendment to our certificate of incorporation with the Secretary of State of the state of Delaware to effect a one-for-ten reverse stock split of our issued and outstanding common stock. The accompanying condensed consolidated financial statements and notes thereto give retrospective effect to the reverse stock split for all periods presented. All issued and outstanding common stock, options exercisable for common stock, restricted stock units, performance restricted stock units, and per share amounts contained in the condensed consolidated financial statements have been retroactively adjusted to reflect this reverse stock split for all periods presented. Concurrent with the reverse stock split we effected a reduction in the number of authorized shares of common stock from 367,500,000 shares to 73,500,000 shares. |
Liquidity | Liquidity. As of June 30, 2017, we had cash and cash equivalents of approximately $130.8 million. In July 2017, we raised approximately $162.0 million of proceeds from sales of our common stock (see Note 7). We believe our cash and cash equivalents will be sufficient to fund our operations for at least the next 12 months. It will require substantial cash to achieve our objectives of discovering, developing and commercializing drugs, and this process typically takes many years and potentially hundreds of millions of dollars for an individual drug. We may not have adequate available cash, or assets that could be readily turned into cash, to meet these objectives in the long term. We will need to obtain significant funds under our existing collaborations, under new collaboration, licensing or other commercial agreements for one or more of our drug candidates and programs or patent portfolios, or from other potential sources of liquidity, which may include the sale of equity, issuance of debt or other transactions. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Revenue Recognition. In May 2014, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, No. 2014-09, Revenue from Contracts with Customers The new guidance allows for two methods of adoption: (a) “full retrospective” adoption, meaning the standard is applied to all periods presented, or (b) “modified retrospective” adoption, meaning the cumulative effect of applying the new guidance is recognized as an adjustment to the opening retained earnings balance for the year of implementation. We plan to adopt the new revenue standard effective January 1, 2018, on a modified retrospective method with the cumulative effect of the change reflected in retained earnings as of January 1, 2018. We have continued to monitor FASB activity to assess certain interpretative issues and the associated implementation of the new standard. We are in the process of reviewing our revenue arrangements, which we expect to include product sales, manufacturing support payments, royalty payments, other collaboration payments and toll manufacturing, and are not yet able to estimate the anticipated impact to our consolidated financial statements from the implementation of the new standard as we continue to interpret the principles of the new standard. Other. In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities In February 2016, the FASB issued ASU No. 2016-02, Leases In May 2017, the FASB issued ASU No. 2017-09, Scope of Modification Accounting No. 2016-02 clarifies which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. This guidance is to be applied prospectively to awards modified on or after the adoption date and is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, with early adoption permitted. We do not anticipate that the adoption of ASU 2017-09 will have a material impact on our consolidated financial statements unless there are significant changes to our outstanding share based payment awards at which time we would assess the impact of the standard . |
Use of Estimates | Use of Estimates. The preparation of financial statements in accordance with GAAP requires our management to make estimates and assumptions that affect the reported amounts (including assets, liabilities, revenues and expenses) and related disclosures. The amounts reported could differ under different estimates and assumptions. |
Fair Value Disclosures | We measure our financial assets and liabilities at fair value, which is defined as the exit price, or the amount that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. We use the following three-level valuation hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs to value our financial assets and liabilities: Level 1 - Observable inputs such as unadjusted quoted prices in active markets for identical instruments. Level 2 - Quoted prices for similar instruments in active markets or inputs that are observable for the asset or liability, either directly or indirectly. Level 3 - Significant unobservable inputs based on our assumptions. |
Concentration of Credit Risk and Major Customers | Financial instruments, which potentially subject us to concentrations of credit risk, consist primarily of cash and cash equivalents. We limit our exposure to credit loss by holding our cash primarily in US dollars or, from time to time, placing our cash and investments in US government, agency and government-sponsored enterprise obligations and in corporate debt instruments that are rated investment grade, in accordance with an investment policy approved by our Board of Directors. The United States and South Korea are the only jurisdictions for which BELVIQ has been commercially sold. We also produce drug products for Siegfried AG, or Siegfried, and, to a lesser extent, another third party under toll manufacturing agreements. Percentages of our total revenues are as follows: Three months ended Six months ended June 30, June 30, 2017 2016 2017 2016 Eisai Agreement (See Note 6) 59.2 % 50.7 % 61.7 % 54.3 % Boehringer Ingelheim Agreement (See Note 6) 20.2 % 15.3 % 19.2 % 14.4 % Toll manufacturing agreements 11.6 % 10.8 % 11.2 % 10.6 % Axovant Agreement (See Note 6) 8.9 % 6.5 % 7.7 % 6.3 % Other collaboration agreements 0.1 % 16.7 % 0.2 % 14.4 % Total percentage of revenues 100.0 % 100.0 % 100.0 % 100.0 % |
Net Loss Per Share | We calculate basic and diluted net loss attributable to stockholders of Arena per share using the weighted-average number of shares of common stock outstanding during the period. Since we are in a net loss position, in addition to excluding potentially dilutive out-of-the money securities, we exclude from our calculation of diluted net loss attributable to stockholders of Arena per share all potentially dilutive in-the-money (i) stock options, (ii) RSUs, (iii) PRSUs and (iv) unvested restricted stock in our deferred compensation plan, and our diluted net loss per share is the same as our basic net loss per share. |
Fair Value Disclosures (Tables)
Fair Value Disclosures (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Financial Assets and Liabilities Measured at Fair Value on Recurring Basis | The following tables present our valuation hierarchy for our financial assets and liabilities that are measured at fair value on a recurring basis, in thousands: Fair Value Measurements at June 30, 2017 Balance Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Money market funds 1 $ 6,419 $ 6,419 $ — $ — Fair Value Measurements at December 31, 2016 Balance Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Money market funds 1 $ 46,371 $ 46,371 $ — $ — (1) Included in cash and cash equivalents in our condensed consolidated balance sheets. |
Inventory (Tables)
Inventory (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Components of Inventory | Inventory consisted of the following, in thousands: June 30, December 31, 2017 2016 Raw materials $ 2,913 $ 2,553 Work in process 3,361 3,943 Finished goods 784 212 Total inventory $ 7,058 $ 6,708 |
Land, Property and Equipment (T
Land, Property and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Property Plant And Equipment [Abstract] | |
Land, Property and Equipment | Land, property and equipment consisted of the following, in thousands: June 30, December 31, 2017 2016 Cost $ 103,892 $ 108,356 Less accumulated depreciation and amortization (62,895 ) (64,528 ) Land, property and equipment, net $ 40,997 $ 43,828 |
Accounts Payable and Other Ac22
Accounts Payable and Other Accrued Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Payables And Accruals [Abstract] | |
Accounts Payable and Other Accrued Liabilities | Accounts payable and other accrued liabilities consisted of the following, in thousands: June 30, December 31, 2017 2016 Accounts payable $ 1,475 $ 5,977 Accrued compensation 3,424 4,820 Other accrued liabilities 917 1,319 Total accounts payable and other accrued liabilities $ 5,816 $ 12,116 |
Share-based Compensation (Table
Share-based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Share Based Compensation Expense | We recognized share-based compensation expense as follows, in thousands: Three months ended Six months ended June 30, June 30, 2017 2016 2017 2016 Cost of product sales $ 6 $ — $ 57 $ 20 Research and development 576 1,977 955 3,740 General and administrative 1,548 1,262 2,956 2,288 Restructuring charges — 1,032 — 1,032 Total share-based compensation expense $ 2,130 $ 4,271 $ 3,968 $ 7,080 Total share-based compensation expense capitalized into inventory $ — $ 48 $ — $ 85 |
Summary of Stock Option Activity | The following table summarizes our stock option activity during the six months ended June 30, 2017, in thousands (except per share data): Options Weighted- Average Exercise Price Outstanding at January 1, 2017 2,520 $ 29.77 Granted 1,871 14.59 Exercised (6 ) 14.80 Forfeited/cancelled/expired (191 ) 72.89 Outstanding at June 30, 2017 4,194 $ 21.46 |
Summary of Restricted Stock Unit Awards Activity | The following table summarizes activity with respect to our time-based restricted stock unit awards, or RSUs, during the six months ended June 30, 2017, in thousands (except per share data): RSUs Weighted- Average Grant-Date Fair Value Unvested at January 1, 2017 3 $ 42.56 Granted — Vested — Forfeited/cancelled — Unvested at June 30, 2017 3 $ 42.56 |
Concentrations of Credit Risk24
Concentrations of Credit Risk and Major Customers (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Sales Revenue, Net | |
Concentration Risk [Line Items] | |
Percentages of Total Revenues | Percentages of our total revenues are as follows: Three months ended Six months ended June 30, June 30, 2017 2016 2017 2016 Eisai Agreement (See Note 6) 59.2 % 50.7 % 61.7 % 54.3 % Boehringer Ingelheim Agreement (See Note 6) 20.2 % 15.3 % 19.2 % 14.4 % Toll manufacturing agreements 11.6 % 10.8 % 11.2 % 10.6 % Axovant Agreement (See Note 6) 8.9 % 6.5 % 7.7 % 6.3 % Other collaboration agreements 0.1 % 16.7 % 0.2 % 14.4 % Total percentage of revenues 100.0 % 100.0 % 100.0 % 100.0 % |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
Potentially Dilutive Securities Excluded from Calculation of Diluted Net Loss Attributable to Stockholders of Arena Per Share | The following table presents the weighted-average number of potentially dilutive securities that were excluded from our calculation of diluted net loss attributable to stockholders of Arena per share, in thousands: Three months ended Six months ended June 30, June 30, 2017 2016 2017 2016 Stock options 4,002 2,668 3,567 2,289 RSUs and unvested restricted stock 3 24 3 28 Total 4,005 2,692 3,570 2,317 |
Beacon Discovery, Inc. (Tables)
Beacon Discovery, Inc. (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Variable Interest Entity [Line Items] | |
Reconciliation of Equity Attributable to Stockholders of Arena and Equity Attributable to Beacon | The following table presents a reconciliation of the equity attributable to the stockholders of Arena and the equity attributable to Beacon, in thousands: Equity Attributable to Stockholders of Arena Equity Attributable to Noncontrolling Interest in Consolidated Variable Interest Entity Total Equity Balance at January 1, 2017 $ 39,904 $ 491 $ 40,395 Net loss (45,370 ) (743 ) (46,113 ) Translation gain 2,714 — 2,714 Other 85,527 — 85,527 Balance at June 30, 2017 $ 82,775 $ (252 ) $ 82,523 |
Beacon Discovery, Inc. | |
Variable Interest Entity [Line Items] | |
Summary of Assets and Liabilities Included in Condensed Consolidated Balance Sheet | The following table presents the assets and liabilities of Beacon which are included in our condensed consolidated balance sheet at June 30, 2017, in thousands. The assets include only those assets that can be used to settle obligations of Beacon. The liabilities include third party liabilities of Beacon. As of June 30, 2017, Beacon had no creditors with recourse to the general credit of Arena. The assets and liabilities exclude intercompany balances that eliminate in consolidation: Assets of Beacon that can only be used to settle obligations of Beacon Cash and cash equivalents $ 211 Accounts receivable 4 Prepaid expense and other current assets 56 Land, property and equipment, net 528 Total assets of Beacon that can only be used to settle obligations of Beacon $ 799 Liabilities of Beacon for which creditors do not have recourse to the general credit of Arena Accounts payable and other accrued liabilities $ 176 Total liabilities of Beacon for which creditors do not have recourse to the general credit of Arena $ 176 |
Basis of Presentation - Additio
Basis of Presentation - Additional Information (Detail) $ in Thousands | Jun. 14, 2017shares | Jul. 31, 2017USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | Jun. 13, 2017shares | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) |
Subsidiary Sale Of Stock [Line Items] | |||||||
Reverse stock split of issued and outstanding common stock, description | one-for-ten | ||||||
Reverse stock split of issued and outstanding common stock, ratio | 0.1 | ||||||
Number of authorized shares of common stock | shares | 73,500,000 | 367,500,000 | |||||
Cash and cash equivalents | $ 130,763 | $ 121,986 | $ 90,712 | $ 156,184 | |||
Proceeds from sales of common stock | $ 81,496 | $ 230 | |||||
Subsequent Event | |||||||
Subsidiary Sale Of Stock [Line Items] | |||||||
Proceeds from sales of common stock | $ 162,000 |
Fair Value Disclosures - Financ
Fair Value Disclosures - Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - Fair Value Measurements, Recurring - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Assets: | ||
Money market funds | $ 6,419 | $ 46,371 |
Quoted Prices in Active Markets (Level 1) | ||
Assets: | ||
Money market funds | $ 6,419 | $ 46,371 |
Inventory - Components of Inven
Inventory - Components of Inventory (Detail) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 2,913 | $ 2,553 |
Work in process | 3,361 | 3,943 |
Finished goods | 784 | 212 |
Total inventory | $ 7,058 | $ 6,708 |
Land, Property and Equipment -
Land, Property and Equipment - Land, Property and Equipment (Detail) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Property Plant And Equipment [Abstract] | ||
Cost | $ 103,892 | $ 108,356 |
Less accumulated depreciation and amortization | (62,895) | (64,528) |
Land, property and equipment, net | $ 40,997 | $ 43,828 |
Accounts Payable and Other Ac31
Accounts Payable and Other Accrued Liabilities - Accounts Payable and Other Accrued Liabilities (Detail) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Payables And Accruals [Abstract] | ||
Accounts payable | $ 1,475 | $ 5,977 |
Accrued compensation | 3,424 | 4,820 |
Other accrued liabilities | 917 | 1,319 |
Total accounts payable and other accrued liabilities | $ 5,816 | $ 12,116 |
Collaborations - Additional Inf
Collaborations - Additional Information (Detail) | Dec. 28, 2016USD ($) | Oct. 31, 2016USD ($) | Jan. 31, 2016USD ($) | May 31, 2015USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2017USD ($)Milestone | Jun. 30, 2017CHF (SFr)Milestone | Jun. 30, 2016USD ($) | Dec. 31, 2016USD ($) |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||
Total arrangement consideration | $ 115,600,000 | |||||||||
Payment received from Eisai | $ 10,000,000 | |||||||||
Cost of product sales | $ 1,497,000 | $ 851,000 | 4,029,000 | $ 3,279,000 | ||||||
Net product sales | 2,059,000 | 4,263,000 | 4,770,000 | 7,781,000 | ||||||
Inventory | 7,058,000 | $ 7,058,000 | $ 6,708,000 | |||||||
Eisai | 9.5% Royalty Rate | ||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||
Royalty rate on annual net sales | 9.50% | 9.50% | ||||||||
Eisai | 9.5% Royalty Rate | Maximum | ||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||
Royalty portion of annual net sales amount | $ 175,000,000 | |||||||||
Eisai | 13.5% Royalty Rate | ||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||
Royalty rate on annual net sales | 13.50% | 13.50% | ||||||||
Eisai | 13.5% Royalty Rate | Maximum | ||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||
Royalty portion of annual net sales amount | $ 500,000,000 | |||||||||
Eisai | 13.5% Royalty Rate | Minimum | ||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||
Royalty portion of annual net sales amount | $ 175,000,000 | |||||||||
Eisai | 18.5% Royalty Rate | ||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||
Royalty rate on annual net sales | 18.50% | 18.50% | ||||||||
Eisai | 18.5% Royalty Rate | Minimum | ||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||
Royalty portion of annual net sales amount | $ 500,000,000 | |||||||||
Axovant | ||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||
Collaborative agreement upfront payments | $ 4,000,000 | |||||||||
Collaborative agreement revenue recognition period | 5 years | |||||||||
Additional milestone payments on achievement | 41,500,000 | $ 41,500,000 | ||||||||
Number of development milestone | Milestone | 2 | 2 | ||||||||
Number of regulatory milestone | Milestone | 4 | 4 | ||||||||
Revenue recorded | 500,000 | 600,000 | $ 1,000,000 | 1,200,000 | ||||||
Boehringer Ingelheim | ||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||
Collaborative agreement upfront payments | $ 7,500,000 | |||||||||
Collaborative agreement revenue recognition period | 2 years | |||||||||
Additional milestone payments on achievement | 251,000,000 | $ 251,000,000 | ||||||||
Number of development milestone | Milestone | 3 | 3 | ||||||||
Number of regulatory milestone | Milestone | 9 | 9 | ||||||||
Revenue recorded | 1,300,000 | $ 1,500,000 | $ 2,500,000 | $ 2,800,000 | ||||||
Refund of withholding taxes | $ 1,200,000 | |||||||||
Number of commercial milestone | Milestone | 4 | 4 | ||||||||
Eisai First Amended Agreement | ||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||
Collaborative agreement initiation date | 2012-05 | 2012-05 | ||||||||
Eisai Second Amended Agreement | ||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||
Collaborative agreement initiation date | 2013-11 | 2013-11 | ||||||||
Manufacturing and supply commitment period | 2 years | 2 years | ||||||||
Eisai Agreement | ||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||
Collaboration agreement initial term | 2 years | 2 years | ||||||||
Collaboration agreement extended initial term | 6 months | 6 months | ||||||||
Collaboration agreement extension fee | SFr | SFr 2,000,000 | |||||||||
Proceeds from sale of inventory | $ 10,000,000 | |||||||||
Eisai Agreement | Maximum | ||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||
Additional manufacturing support payments | SFr | 13,000,000 | |||||||||
Manufacturing support payments to be received | SFr | SFr 6,000,000 | |||||||||
License Deliverable | ||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||
Estimated selling price of the deliverables for revenue recognition | 64,000,000 | |||||||||
Inventory Deliverable | ||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||
Estimated selling price of the deliverables for revenue recognition | $ 30,800,000 | |||||||||
Consideration allocated to deliverable revenue | 0 | 0 | ||||||||
Carrying value of inventory recognized in cost of product sales | 0 | $ 0 | ||||||||
Recognized revenues on net product sales | 1,800,000 | 4,000,000 | ||||||||
Cost of product sales | 400,000 | 1,000,000 | ||||||||
Deferred revenues | 28,100,000 | 28,100,000 | ||||||||
Inventory | 4,000,000 | 4,000,000 | ||||||||
Manufacturing and Supply Commitment Deliverable | ||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||
Estimated selling price of the deliverables for revenue recognition | 20,800,000 | |||||||||
Consideration allocated to deliverable revenue | 2,000,000 | 4,100,000 | ||||||||
Net product sales | 300,000 | 800,000 | ||||||||
Manufacturing and Supply Commitment Deliverable | Other Eisai Collaboration Revenue | ||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||
Management support payment recognized | 1,700,000 | 3,400,000 | ||||||||
Development Milestones | Axovant | ||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||
Additional milestone payments on achievement | 4,000,000 | 4,000,000 | ||||||||
Development Milestones | Boehringer Ingelheim | ||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||
Additional milestone payments on achievement | 7,000,000 | 7,000,000 | ||||||||
Development Milestones | Boehringer Ingelheim | Non-substantive | ||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||
Additional milestone payments on achievement | 30,000,000 | 30,000,000 | ||||||||
Regulatory Milestones | Axovant | ||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||
Additional milestone payments on achievement | 37,500,000 | 37,500,000 | ||||||||
Regulatory Milestones | Boehringer Ingelheim | Non-substantive | ||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||
Additional milestone payments on achievement | 84,000,000 | 84,000,000 | ||||||||
Commercial Milestones | Boehringer Ingelheim | Non-substantive | ||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||
Additional milestone payments on achievement | $ 130,000,000 | $ 130,000,000 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 6 Months Ended | |||
Jul. 31, 2017 | Apr. 30, 2017 | Jun. 30, 2017 | Jun. 30, 2016 | Jan. 31, 2017 | |
Stockholders Equity [Line Items] | |||||
Aggregate gross proceeds from sale of common stock | $ 81,496 | $ 230 | |||
Subsequent Event | |||||
Stockholders Equity [Line Items] | |||||
Aggregate gross proceeds from sale of common stock | $ 162,000 | ||||
Equity Distribution Agreement | Citigroup Global Markets Inc. | ATM Offering | |||||
Stockholders Equity [Line Items] | |||||
Aggregate gross proceeds from sale of common stock | $ 7,400 | ||||
Common Stock | Underwritten Public Offering | |||||
Stockholders Equity [Line Items] | |||||
Sale of common stock shares | 6,900,000 | ||||
Aggregate gross proceeds from sale of common stock | $ 74,500 | ||||
Common Stock | Underwritten Public Offering | Subsequent Event | |||||
Stockholders Equity [Line Items] | |||||
Sale of common stock shares | 7,187,500 | ||||
Aggregate gross proceeds from sale of common stock | $ 162,000 | ||||
Common Stock | Equity Distribution Agreement | Citigroup Global Markets Inc. | ATM Offering | |||||
Stockholders Equity [Line Items] | |||||
Sale of common stock shares | 489,023 | ||||
Maximum | Equity Distribution Agreement | Citigroup Global Markets Inc. | ATM Offering | |||||
Stockholders Equity [Line Items] | |||||
Aggregate value of common stock available | $ 50,000 | ||||
Weighted Average | Common Stock | Equity Distribution Agreement | Citigroup Global Markets Inc. | ATM Offering | |||||
Stockholders Equity [Line Items] | |||||
Average market price per share | $ 15.05 |
Share-based Compensation - Shar
Share-based Compensation - Share Based Compensation Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 2,130 | $ 4,271 | $ 3,968 | $ 7,080 |
Total share-based compensation expense capitalized into inventory | 48 | 85 | ||
Cost of product sales | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | 6 | 57 | 20 | |
Research and development | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | 576 | 1,977 | 955 | 3,740 |
General and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 1,548 | 1,262 | $ 2,956 | 2,288 |
Restructuring charges | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 1,032 | $ 1,032 |
Share-based Compensation - Summ
Share-based Compensation - Summary of Stock Option Activity (Detail) - Stock options shares in Thousands | 6 Months Ended |
Jun. 30, 2017$ / sharesshares | |
Number of stock options | |
Outstanding at January 1, 2017 | shares | 2,520 |
Granted | shares | 1,871 |
Exercised | shares | (6) |
Forfeited/cancelled/expired | shares | (191) |
Outstanding at June 30, 2017 | shares | 4,194 |
Weighted- Average Exercise Price | |
Outstanding at January 1, 2017 | $ / shares | $ 29.77 |
Granted | $ / shares | 14.59 |
Exercised | $ / shares | 14.80 |
Forfeited/cancelled/expired | $ / shares | 72.89 |
Outstanding at June 30, 2017 | $ / shares | $ 21.46 |
Share-based Compensation - Su36
Share-based Compensation - Summary of Restricted Stock Unit Awards Activity (Detail) - Restricted Stock Units (RSU) shares in Thousands | 6 Months Ended |
Jun. 30, 2017$ / sharesshares | |
Number of Restricted Stock Units | |
Unvested at January 1, 2017 | shares | 3 |
Unvested at June 30, 2017 | shares | 3 |
Weighted- Average Grant-Date Fair Value | |
Unvested at January 1, 2017 | $ / shares | $ 42.56 |
Unvested at June 30, 2017 | $ / shares | $ 42.56 |
Share-based Compensation - Addi
Share-based Compensation - Additional Information (Detail) - Performance restricted stock units - shares | 1 Months Ended | 6 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | Jun. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Performance period | 3 years | ||
Units granted (shares) | 74,498 | 69,498 | |
Shares cancelled due to management changes | 35,554 |
Concentrations of Credit Risk38
Concentrations of Credit Risk and Major Customers - Percentages of Total Revenues (Detail) - Sales Revenue, Net | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Concentration Risk [Line Items] | ||||
Percentage of revenues | 100.00% | 100.00% | 100.00% | 100.00% |
Eisai Agreement | ||||
Concentration Risk [Line Items] | ||||
Percentage of revenues | 59.20% | 50.70% | 61.70% | 54.30% |
Boehringer Ingelheim Agreement | ||||
Concentration Risk [Line Items] | ||||
Percentage of revenues | 20.20% | 15.30% | 19.20% | 14.40% |
Toll manufacturing agreements | ||||
Concentration Risk [Line Items] | ||||
Percentage of revenues | 11.60% | 10.80% | 11.20% | 10.60% |
Axovant Agreement | ||||
Concentration Risk [Line Items] | ||||
Percentage of revenues | 8.90% | 6.50% | 7.70% | 6.30% |
Other collaboration agreements | ||||
Concentration Risk [Line Items] | ||||
Percentage of revenues | 0.10% | 16.70% | 0.20% | 14.40% |
Net Loss Per Share - Potentiall
Net Loss Per Share - Potentially Dilutive Securities Excluded from Calculation of Diluted Net Loss Attributable to Stockholders of Arena Per Share (Detail) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total antidilutive securities excluded from calculation of diluted net loss attributable to stockholders of Arena per share (shares) | 4,005 | 2,692 | 3,570 | 2,317 |
Stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total antidilutive securities excluded from calculation of diluted net loss attributable to stockholders of Arena per share (shares) | 4,002 | 2,668 | 3,567 | 2,289 |
RSUs and unvested restricted stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total antidilutive securities excluded from calculation of diluted net loss attributable to stockholders of Arena per share (shares) | 3 | 24 | 3 | 28 |
Beacon Discovery, Inc. - Reconc
Beacon Discovery, Inc. - Reconciliation of Equity Attributable to Stockholders of Arena and Equity Attributable to Beacon (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Reconciliation Of Stockholders Equity [Line Items] | ||||
Balance at January 1, 2017 | $ 40,395 | |||
Net loss | $ (23,616) | $ (27,183) | (46,113) | $ (48,731) |
Translation gain | 1,910 | $ (1,239) | 2,714 | $ 1,352 |
Other | 85,527 | |||
Balance at June 30, 2017 | 82,523 | 82,523 | ||
Equity Attributable to Stockholders of Arena | ||||
Reconciliation Of Stockholders Equity [Line Items] | ||||
Balance at January 1, 2017 | 39,904 | |||
Net loss | (45,370) | |||
Translation gain | 2,714 | |||
Other | 85,527 | |||
Balance at June 30, 2017 | 82,775 | 82,775 | ||
Equity Attributable to Noncontrolling Interest in Consolidated Variable Interest Entity | Variable Interest Entity, Primary Beneficiary | ||||
Reconciliation Of Stockholders Equity [Line Items] | ||||
Balance at January 1, 2017 | 491 | |||
Net loss | (743) | |||
Balance at June 30, 2017 | $ (252) | $ (252) |
Beacon Discovery, Inc. - Summar
Beacon Discovery, Inc. - Summary of Assets and Liabilities Included in Condensed Consolidated Balance Sheet (Detail) - Variable Interest Entity, Primary Beneficiary - Beacon Discovery, Inc. $ in Thousands | Jun. 30, 2017USD ($) |
Variable Interest Entity [Line Items] | |
Total assets of Beacon that can only be used to settle obligation of Beacon | $ 799 |
Total liabilities of Beacon for which creditors do not have recourse to the general credit of Arena | 176 |
Cash and Cash Equivalents | |
Variable Interest Entity [Line Items] | |
Total assets of Beacon that can only be used to settle obligation of Beacon | 211 |
Accounts Receivable | |
Variable Interest Entity [Line Items] | |
Total assets of Beacon that can only be used to settle obligation of Beacon | 4 |
Prepaid Expense and Other Current Assets | |
Variable Interest Entity [Line Items] | |
Total assets of Beacon that can only be used to settle obligation of Beacon | 56 |
Land, Property and Equipment, Net | |
Variable Interest Entity [Line Items] | |
Total assets of Beacon that can only be used to settle obligation of Beacon | 528 |
Accounts Payable and Other Accrued Liabilities | |
Variable Interest Entity [Line Items] | |
Total liabilities of Beacon for which creditors do not have recourse to the general credit of Arena | $ 176 |