Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Mar. 09, 2018 | Jun. 30, 2017 | |
Document And Entity Information [Abstract] | |||
Entity Registrant Name | ARENA PHARMACEUTICALS INC | ||
Entity Central Index Key | 1,080,709 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Trading Symbol | ARNA | ||
Entity Common Stock, Shares Outstanding | 39,401,783 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 536 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | ||
Current assets: | ||||
Cash and cash equivalents | $ 158,837 | $ 90,712 | ||
Short-term investments, available-for-sale | 88,240 | |||
Accounts receivable | 2,357 | 573 | ||
Insurance recovery receivable | 12,025 | |||
Prepaid expenses and other current assets | 2,681 | 2,169 | ||
Assets of disposal group held for sale | 17,140 | 26,435 | [1] | |
Total current assets | 281,280 | 119,889 | ||
Investments, available-for-sale | 24,242 | |||
Land, property and equipment, net | 30,131 | 35,109 | ||
Assets of disposal group held for sale, non-current | [1] | 11,171 | ||
Other non-current assets | 3,622 | 2,841 | ||
Total assets | 339,275 | 169,010 | ||
Current liabilities: | ||||
Accounts payable and other accrued liabilities | 7,916 | 5,676 | ||
Accrued clinical and preclinical study fees | 7,706 | 3,883 | ||
Accrued litigation settlement | 24,000 | |||
Current portion of deferred revenues | 1,110 | 4,410 | ||
Current portion of lease financing obligations | 4,000 | 3,518 | ||
Liabilities of disposal group held for sale | 27,595 | 46,392 | ||
Total current liabilities | 72,327 | 63,879 | ||
Other long-term liabilities | 989 | 821 | ||
Deferred revenues, less current portion | 1,067 | 2,167 | ||
Lease financing obligations, less current portion | 57,748 | 61,748 | ||
Commitments and contingencies | ||||
Equity: | ||||
Preferred stock, $0.0001 par value, 7,500,000 shares authorized, no shares issued and outstanding at December 31, 2017, and 2016 | ||||
Common stock, $0.0001 par value, 73,500,000 shares authorized at December 31, 2017, and 367,500,000 shares authorized at December 31, 2016; 39,280,687 shares issued and outstanding at December 31, 2017; 24,340,080 shares issued and outstanding at December 31, 2016 | 4 | 2 | ||
Additional paid-in capital | 1,698,543 | 1,441,737 | ||
Accumulated other comprehensive loss | (1,216) | (3,099) | ||
Accumulated deficit | (1,490,187) | (1,398,736) | ||
Total equity attributable to stockholders of Arena | 207,144 | 39,904 | ||
Equity attributable to noncontrolling interest in consolidated variable interest entity | 491 | |||
Total equity | 207,144 | 40,395 | ||
Total liabilities and equity | $ 339,275 | $ 169,010 | ||
[1] | The assets and liabilities of the Manufacturing Operations classified as held for sale are classified as current in the consolidated balance sheet at December 31, 2017, because it is probable that the sale will occur and proceeds will be collected within one year. |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
Statement Of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 7,500,000 | 7,500,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 73,500,000 | 367,500,000 |
Common stock, shares issued | 39,280,687 | 24,340,080 |
Common stock, shares outstanding | 39,280,687 | 24,340,080 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenues | |||
Collaboration and other revenue | $ 19,632 | $ 92,163 | $ 13,398 |
Royalty revenue | 1,705 | ||
Total revenues | 21,337 | 92,163 | 13,398 |
Operating costs and expenses | |||
Research and development | 70,988 | 63,782 | 83,283 |
General and administrative | 30,341 | 27,529 | 30,281 |
Litigation settlement expense, net | 11,975 | ||
Restructuring charges | 6,115 | 3,346 | |
Total operating costs and expenses | 113,304 | 97,426 | 116,910 |
Loss from operations | (91,967) | (5,263) | (103,512) |
Interest and other income (expense) | |||
Interest income | 492 | 290 | 158 |
Interest expense | (6,119) | (6,512) | (6,828) |
Gain from valuation of derivative liabilities | 474 | ||
Other income (expense) | 1,740 | (815) | (999) |
Total interest and other expense, net | (3,887) | (7,037) | (7,195) |
Loss from continuing operations | (95,854) | (12,300) | (110,707) |
Income (loss) from discontinued operations | 3,122 | (10,596) | 2,728 |
Net loss | (92,732) | (22,896) | (107,979) |
Less net loss attributable to noncontrolling interest in consolidated variable interest entity | 1,325 | 380 | |
Net loss attributable to stockholders of Arena | (91,407) | (22,516) | (107,979) |
Amounts attributable to stockholders of Arena: | |||
Loss from continuing operations | (94,529) | (11,920) | (110,707) |
Income (loss) from discontinued operations | $ 3,122 | $ (10,596) | $ 2,728 |
Net income (loss) attributable to stockholders of Arena per share, basic and diluted: | |||
Continuing operations | $ (2.87) | $ (0.49) | $ (4.60) |
Discontinued operations | 0.10 | (0.44) | 0.11 |
Net income (loss) attributable to stockholders of Arena per share, basic and diluted | $ (2.77) | $ (0.93) | $ (4.49) |
Shares used in calculating net income (loss) attributable to stockholders of Arena per share, basic and diluted | 32,990 | 24,313 | 24,067 |
Comprehensive Loss: | |||
Net loss | $ (92,732) | $ (22,896) | $ (107,979) |
Foreign currency translation adjustment | 2,016 | (1,920) | (4,087) |
Unrealized loss on available-for-sale investments | (133) | ||
Comprehensive loss | (90,849) | (24,816) | (112,066) |
Less comprehensive loss attributable to noncontrolling interest in consolidated variable interest entity | 1,325 | 380 | |
Comprehensive loss attributable to stockholders of Arena | $ (89,524) | $ (24,436) | $ (112,066) |
Consolidated Statements of Equi
Consolidated Statements of Equity - USD ($) $ in Thousands | Total | Underwriters | ATM facility | Common Stock | Common StockUnderwriters | Common StockATM facility | Additional Paid-In Capital | Additional Paid-In CapitalUnderwriters | Additional Paid-In CapitalATM facility | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Total Equity Attributable to Stockholders of Arena | Total Equity Attributable to Stockholders of ArenaUnderwriters | Total Equity Attributable to Stockholders of ArenaATM facility | Equity Attributable to Noncontrolling Interest in Consolidated Variable Interest Entity |
Beginning Balance at Dec. 31, 2014 | $ 47,345 | $ 2 | $ 1,312,676 | $ 2,908 | $ (1,268,241) | $ 47,345 | |||||||||
Beginning Balance (in shares) at Dec. 31, 2014 | 22,032,165 | ||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Issuance of common stock | $ 100,658 | $ 100,658 | $ 100,658 | ||||||||||||
Issuance of common stock (in shares) | 2,100,000 | ||||||||||||||
Issuance of common stock upon exercise of options | 2,211 | 2,211 | 2,211 | ||||||||||||
Issuance of common stock upon exercise of options (in shares) | 115,408 | ||||||||||||||
Issuance of common stock under employee stock purchase plan | $ 758 | 758 | 758 | ||||||||||||
Issuance of common stock under employee stock purchase plan (in shares) | 32,795 | 32,795 | |||||||||||||
Issuance of common stock upon vesting of restricted stock unit awards (in shares) | 6,750 | ||||||||||||||
Share-based compensation expense | Expensed | $ 14,463 | 14,463 | 14,463 | ||||||||||||
Share-based compensation expense | Capitalized Cost | 173 | 173 | 173 | ||||||||||||
Translation gain (loss) | (4,087) | (4,087) | (4,087) | ||||||||||||
Net loss | (107,979) | (107,979) | (107,979) | ||||||||||||
Ending Balance at Dec. 31, 2015 | 53,542 | $ 2 | 1,430,939 | (1,179) | (1,376,220) | 53,542 | |||||||||
Ending Balance (in shares) at Dec. 31, 2015 | 24,287,118 | ||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Issuance of common stock upon exercise of options | 179 | 179 | 179 | ||||||||||||
Issuance of common stock upon exercise of options (in shares) | 11,556 | ||||||||||||||
Issuance of common stock under employee stock purchase plan | $ 203 | 203 | 203 | ||||||||||||
Issuance of common stock under employee stock purchase plan (in shares) | 14,140 | 14,140 | |||||||||||||
Issuance of common stock upon vesting of restricted stock unit awards (in shares) | 27,266 | ||||||||||||||
Share-based compensation expense | Expensed | $ 11,117 | 11,117 | 11,117 | ||||||||||||
Share-based compensation expense | Capitalized Cost | 170 | 170 | 170 | ||||||||||||
Contribution to variable interest entity | (871) | (871) | $ 871 | ||||||||||||
Translation gain (loss) | (1,920) | (1,920) | (1,920) | ||||||||||||
Net loss | (22,896) | (22,516) | (22,516) | (380) | |||||||||||
Ending Balance at Dec. 31, 2016 | $ 40,395 | $ 2 | 1,441,737 | (3,099) | (1,398,736) | 39,904 | 491 | ||||||||
Ending Balance (in shares) at Dec. 31, 2016 | 24,340,080 | 24,340,080 | |||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Adoption of ASU No. 2016-09 | ASU No. 2016-09 | 44 | (44) | |||||||||||||
Issuance of common stock | $ 236,388 | $ 6,987 | $ 2 | $ 236,386 | $ 6,987 | $ 236,388 | $ 6,987 | ||||||||
Issuance of common stock (in shares) | 14,087,500 | 489,023 | |||||||||||||
Issuance of common stock upon exercise of options | $ 5,404 | 5,404 | 5,404 | ||||||||||||
Issuance of common stock upon exercise of options (in shares) | 323,431 | ||||||||||||||
Issuance of common stock under employee stockpurchase plan and upon vesting of restrictedstock unit awards | $ 12 | 12 | 12 | ||||||||||||
Issuance of common stock under employee stock purchase plan and upon vesting of restricted stock unit awards (in shares) | 40,653 | ||||||||||||||
Issuance of common stock under employee stock purchase plan (in shares) | 2,236 | ||||||||||||||
Share-based compensation expense | $ 7,990 | 7,973 | 7,973 | 17 | |||||||||||
Unrealized loss on available-for-sale investments | (133) | (133) | (133) | ||||||||||||
Translation gain (loss) | 2,016 | 2,016 | 2,016 | ||||||||||||
Net loss | (92,732) | (91,407) | (91,407) | (1,325) | |||||||||||
Deconsolidation of variable interest entity | 817 | $ 817 | |||||||||||||
Ending Balance at Dec. 31, 2017 | $ 207,144 | $ 4 | $ 1,698,543 | $ (1,216) | $ (1,490,187) | $ 207,144 | |||||||||
Ending Balance (in shares) at Dec. 31, 2017 | 39,280,687 | 39,280,687 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating activities: | |||
Net loss | $ (92,732) | $ (22,896) | $ (107,979) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
(Income) loss from discontinued operations | (3,122) | 10,596 | (2,728) |
Depreciation and amortization | 4,278 | 4,994 | 5,430 |
Share-based compensation | 7,855 | 11,075 | 14,112 |
Gain from valuation of derivative liabilities | (474) | ||
Litigation settlement expense, net | 11,975 | ||
Amortization of prepaid financing costs | 136 | 136 | 136 |
Loss (gain) on disposal of equipment | (379) | 1,270 | 1,007 |
Changes in operating assets and liabilities: | |||
Accounts receivable | 10,787 | (12,246) | 781 |
Prepaid expenses and other assets | 585 | 1,753 | (641) |
Payables and accrued liabilities | 1,803 | 2,410 | (2,092) |
Deferred revenues | (4,401) | (69,078) | (4,647) |
Other long-term liabilities | (577) | 30 | 101 |
Net cash used in operating activities - continuing operations | (63,792) | (71,956) | (96,994) |
Net cash provided by (used in) operating activities - discontinued operations | (2,850) | 9,817 | (1,119) |
Net cash used in operating activities | (66,642) | (62,139) | (98,113) |
Investing activities: | |||
Purchases of available-for-sale securities, net | (112,615) | ||
Deconsolidation of variable interest entity | (406) | ||
Purchases of land, property and equipment | (113) | (814) | (1,119) |
Proceeds from sale of equipment | 789 | 954 | 2,232 |
Other non-current assets | (5) | (654) | 609 |
Net cash provided by (used in) investing activities - continuing operations | (112,350) | (514) | 1,722 |
Net cash used in investing activities - discontinued operations | (40) | (236) | (9,873) |
Net cash used in investing activities | (112,390) | (750) | (8,151) |
Financing activities: | |||
Principal payments on lease financing obligations | (3,518) | (2,979) | (2,492) |
Proceeds from issuance of common stock | 248,805 | 370 | 103,628 |
Other financing activities | 320 | ||
Net cash provided by (used in) financing activities | 245,287 | (2,289) | 101,136 |
Effect of exchange rate changes on cash | 1,870 | (294) | (1,897) |
Net decrease in cash and cash equivalents | 68,125 | (65,472) | (7,025) |
Cash and cash equivalents at beginning of year | 90,712 | 156,184 | 163,209 |
Cash and cash equivalents at end of year | 158,837 | 90,712 | 156,184 |
Supplemental disclosure of cash flow information: | |||
Interest paid | $ 5,967 | $ 6,303 | $ 6,562 |
The Company and Summary of Sign
The Company and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
The Company and Summary of Significant Accounting Policies | 1. The Company and Summary of Significant Accounting Policies The Company Arena Pharmaceuticals, Inc., or Arena, was incorporated on April 14, 1997, and commenced operations in July 1997. We are a biopharmaceutical company focused on developing novel, small molecule drugs with optimized receptor pharmacology designed to deliver broad clinical utility across multiple therapeutic areas. Our proprietary pipeline includes potentially first or best in class programs for which we own global commercial rights. Our three most advanced investigational clinical programs are ralinepag in preparation of Phase 3 program for pulmonary arterial hypertension, or PAH, etrasimod in late Phase 2 evaluation for multiple inflammatory indications, and APD371 in Phase 2 evaluation for the treatment of pain associated with Crohn's disease. Additionally, we have collaborations with the following pharmaceutical companies: Everest Medicines Limited, or Everest, (ralinepag and etrasimod in Greater China and select Asian countries), Axovant Sciences GmbH, or Axovant, (nelotanserin - Phase 2), Boehringer Ingelheim International GmbH, or Boehringer Ingelheim, (undisclosed target - preclinical) and Eisai Co., Ltd. and Eisai Inc. (collectively, Eisai) (BELVIQ® / BELVIQ XR® - marketed product). We operate in one business segment. Our primary clinical operations are conducted in San Diego, California and in Zug, Switzerland by Arena Pharmaceuticals Development GmbH, or APD GmbH, our wholly-owned subsidiary. Our commercial and development manufacturing operations are conducted by Arena GmbH, our wholly-owned subsidiary located in Zofingen, Switzerland. In order to further focus our efforts and resources on our strategic objectives of developing our pipeline drug candidates, on March 9, 2018, we entered into an Asset Purchase Agreement, or Sale Agreement, with Siegfried Pharma AG and Siegfried AG, (collectively and individually, Siegfried). Under the Sale Agreement, we agreed to sell and assign to Siegfried, and Siegfried agreed to purchase and assume from Arena GmbH, certain drug product finishing facility assets and know-how, including fixtures, equipment, other personal property and real estate assets located in Zofingen, Switzerland and related contracts and certain related liabilities after the closing, or collectively, Manufacturing Operations. We refer to this transaction as the Siegfried Transaction. In connection with the Siegfried Transaction, all of Arena GmbH’s approximately 50 current employees are expected to transfer to Siegfried. The Siegfried Transaction is expected to close on or about March 31, 2018, subject to satisfaction or waiver of certain customary closing conditions. We have excluded from our continuing operations for all periods presented in this report revenues and expenses associated with our Manufacturing Operations, which are reported as discontinued operations. See Note 5 for additional information on the Manufacturing Operations. Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with the US generally accepted accounting principles, or GAAP, and reflect all of our activities, including those of our wholly owned subsidiaries. All material intercompany accounts and transactions have been eliminated in consolidation. The accompanying consolidated financial statements also include the activity of Beacon, a variable interest entity in which we had a controlling financial interest until December 2017 at which point we deconsolidated Beacon (see Note 15). 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 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 split of our issued and outstanding common stock. The accompanying 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 consolidated financial statements have been retrospectively 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. As a result of the anticipated divestiture of our Manufacturing Operations, we have retrospectively revised the consolidated statements of operations and cash flows for the years ended December 31, 2016 and 2015 and the consolidated balance sheet as of December 31, 2016, to reflect the operations and cash flows of the Manufacturing Operations as discontinued operations and the related assets and liabilities as held for sale. Liquidity As of December 31, 2017, we had cash and cash equivalents and available-for-sale investments of approximately $271.3 million. We believe our cash and cash equivalents and investments will be sufficient to fund our operations for at least the next 12 months from the date these consolidated financial statements are issued. We will require substantial cash to achieve our objectives of discovering, developing and commercializing drugs, as 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 will adopt the new revenue standard effective January 1, 2018, using the modified retrospective method with the cumulative effect of the change reflected in retained earnings as of January 1, 2018. As of December 31, 2017, we have completed our assessment of the new revenue standard and its impact to our consolidated financial statements and related disclosures, except for the impact related to our contracts with Eisai. We have completed an analysis of existing contracts with our other customers and assessed the differences in accounting for such contracts under ASU No. 2014-09 compared with current revenue accounting standards. In the future, we may recognize revenue related to potential future milestones earlier than under the current standard. Currently, we defer recognition of milestones until the milestone is achieved. Under the new revenue standard, the receipt of such milestones will be accounted for as variable consideration, which may result in revenue being recognized earlier provided it is probable that a significant reversal in revenue will not occur when the uncertainty associated with the milestone is resolved. Adoption of the new revenue standard will also result in additional revenue-related disclosures in the footnotes to our consolidated financial statements. With the exception of our contracts with Eisai, we do not expect the adoption of ASU No. 2014-09 to have a material impact on our consolidated financial statements. Regarding our contracts with Eisai, we are in the process of analyzing previous contract modifications and their impact on the identification of satisfied and unsatisfied performance obligations, the determination of the transaction price, and the allocation of the transaction price to the satisfied and unsatisfied performance obligations. Accordingly, we are not yet able to estimate the impact the adoption of ASU No. 2014-09 will have on our consolidated financial statements. 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 modified In November 2016, the FASB issued ASU No. 2016-18, Restricted Cash In May 2017, the FASB issued ASU No. 2017-09, Scope of Modification Accounting No. 2017-09 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 expect the adoption of ASU 2017-09 to 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 conformity 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. Cash and Cash Equivalents Cash and cash equivalents consist of cash and highly liquid investments with remaining maturities of three months or less when purchased. Available-for-Sale Investments We define investments as income-yielding securities that can be readily converted to cash, and classify such investments as available-for-sale. We carry these securities at fair value, and report unrealized gains and losses as a separate component of accumulated other comprehensive income or loss. The cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization and accretion is included in interest income. Realized gains and losses and declines in securities judged to be other than temporary are included in other income or expense. The cost of securities sold is based on the specific identification method. Interest and dividends on available Concentrations of Risk Financial instruments, which potentially subject us to concentrations of credit risk, consist primarily of cash and cash equivalents and available-for-sale investments. 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 or 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. Our customers are typically other biopharmaceutical companies to which we license our intellectual property, or sell research and development services or other services under licensing or collaboration agreements. For the year ended December 31, 2017, Everest, Boehringer Ingelheim and Axovant accounted for 56.2%, 23.8%, and 10.5%, respectively, of our total revenues. For the years ended December 31, 2016, and 2015, more than 90% of our annual revenue was from Eisai and other BELVIQ distributors. As of December 31, 2017, Eisai, Axovant and Boehringer Ingelheim accounted for 61.1%, 17.6%, and 14.8%, respectively of our accounts receivable. As of December 31, 2016, Boehringer Ingelheim and Axovant accounted for 50.4% and 48.9%, respectively of our accounts receivable. We monitor our customers' financial credit worthiness in order to assess and respond to any changes in their credit profile. During the years ended December 31, 2017, 2016, and 2015, we did not record any write-offs or reserves against accounts receivable. Property and Equipment Property and equipment are stated at cost and depreciated over the estimated useful lives of the assets (generally 3 to 15 years) using the straight-line method. Buildings are stated at cost and depreciated over an estimated useful life of approximately 20 years using the straight-line method. Leasehold improvements are stated at cost and amortized over the shorter of the estimated useful lives of the assets or the lease term using the straight-line method. Capital improvements are stated at cost and amortized over the estimated useful lives of the underlying assets using the straight-line method . Long-lived Assets If indicators of impairment exist, we assess the recoverability of the affected long-lived assets by determining whether the carrying value of such assets can be recovered through undiscounted cash flows. If impairment is indicated, we measure the impairment loss by comparing the fair value to the carrying value of the asset. Deferred Rent For financial reporting purposes, rent expense and rental income are recognized on a straight-line basis over the term of the underlying lease or sublease. The difference between rent expense or rental income and amounts paid under lease agreements is recorded as an asset or a liability in our consolidated balance sheets. Foreign Currency The functional currency of our wholly owned subsidiaries in Switzerland, Arena GmbH and APD GmbH is the Swiss franc. Accordingly, all assets and liabilities of these subsidiaries are translated to US dollars based on the applicable exchange rate on the balance sheet date. Revenue and expense components are translated to US dollars at weighted-average exchange rates in effect during the period. Gains and losses resulting from foreign currency translation are reported as a separate component of accumulated other comprehensive income or loss in the equity section of our consolidated balance sheets. Foreign currency transaction gains and losses are primarily the result of remeasuring US dollar-denominated receivables and payables at Arena GmbH. Foreign currency transaction gains and losses recorded by Arena GmbH are included in net income (loss) from discontinued operations. Share-based Compensation Our share-based awards are measured at fair value and recognized over the requisite service or performance period. The fair value of each stock option is estimated on the date of grant using the Black-Scholes option pricing model, based on the market price of the underlying common stock, expected life, expected stock price volatility and expected risk-free interest rate. Expected volatility is computed using a combination of historical volatility for a period equal to the expected term and implied volatilities from traded options to buy our common stock, with historical volatility being weighted at 75%. The expected life of options is determined based on historical experience of similar awards, giving consideration to the contractual terms of the share-based awards, vesting schedules and post-vesting terminations. The risk-free interest rates are based on the US Treasury yield curve, with a remaining term approximately equal to the expected term used in the option pricing model. The fair value of each restricted stock unit award is estimated based on the market price of the underlying common stock on the date of the grant. The fair value of restricted stock unit awards that include market-based performance conditions is estimated on the date of grant using a Monte Carlo simulation model, based on the market price of the underlying common stock, expected performance measurement period, expected stock price volatility and expected risk-free interest rate. Prior to 2017, we estimated forfeitures at the time of grant and revised our estimate in subsequent periods if actual forfeitures differed from those estimates. Beginning January 1, 2017, in accordance with ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting . he adoption of ASU No. 2016-09 resulted in a $44,000 cumulative-effect adjustment to increase our accumulated deficit and additional paid-in capital as of January 1, 2017. Revenue Recognition Our revenues to date have been generated primarily through collaboration agreements. Our collaboration agreements may contain multiple elements including commercialization rights, services (joint steering committee and research and development services) and manufactured products. Consideration we receive under these arrangements may include upfront payments, research and development funding, cost reimbursements, milestone payments, payments for product sales and royalty payments. We recognize revenue when (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred and title has passed, (iii) the price is fixed or determinable and (iv) collectability is reasonably assured. Any advance payments we receive in excess of amounts earned are classified as deferred revenues. We evaluate deliverables in a multiple-element arrangement to determine whether each deliverable represents a separate unit of accounting. A deliverable constitutes a separate unit of accounting when it has standalone value to the customer. If the delivered element does not have standalone value without one of the undelivered elements in the arrangement, we combine such elements and account for them as a single unit of accounting. We allocate the consideration to each unit of accounting at the inception of the arrangement based on the relative selling price. To determine the selling price of a separate deliverable, we use the hierarchy as prescribed in Accounting Standards Codification Topic 605-25 based on vendor-specific objective evidence, or VSOE, third-party evidence, or TPE, or best estimate of selling price, or BESP. VSOE is based on the price charged when the element is sold separately and is the price actually charged for that deliverable. TPE is determined based on third-party evidence for a similar deliverable when sold separately. BESP is the estimated selling price at which we would transact a sale if the elements of collaboration and license arrangements were sold on a stand-alone basis to the buyer. Non-refundable upfront payments received under our collaboration agreements for commercialization rights are deferred if such rights are not deemed to have standalone value without ongoing services which may be required under the agreement. If deferred, such amounts are recognized as revenues on a straight-line basis over the period in which we expect to perform the services. Amounts we receive as reimbursement for our research and development expenditures are recognized as revenue as the services are performed. Under the milestone method, we recognize revenue that is contingent upon the achievement of a substantive milestone in its entirety in the period in which the milestone is achieved. A milestone is an event (i) that can be achieved in whole or in part on either our performance or on the occurrence of a specific outcome resulting from our performance, (ii) for which there is substantive uncertainty at the date the arrangement is entered into that the event will be achieved and (iii) that would result in additional payments being due us. A milestone payment is considered substantive when the consideration payable to us for each milestone (a) is consistent with our performance necessary to achieve the milestone or the increase in value to the collaboration resulting from our performance, (b) relates solely to our past performance and (c) is reasonable relative to all of the other deliverables and payments under the arrangement. In making this assessment, we consider all facts and circumstances relevant to the arrangement, including factors such as the scientific, regulatory, commercial and other risks that must be overcome to achieve the respective milestone, the level of effort and investment required to achieve the respective milestone and whether any portion of the milestone consideration is related to future performance or deliverables. Other contingent-based payments received are recognized when earned. Research and Development Expenses Research and development expenses, which consist primarily of salaries and other personnel costs, clinical trial costs and preclinical study fees, manufacturing costs for non-commercial products, and the development of earlier-stage programs and technologies, are expensed as incurred when these expenditures have no alternative future uses. We accrue clinical trial expenses based on work performed. In determining the amount to accrue, we rely on estimates of total costs incurred based on enrollment, the completion of trials and other events. We follow this method because we believe reasonably dependable estimates of the costs applicable to various stages of a clinical trial can be made. However, the actual costs and timing of clinical trials are uncertain, subject to risks and may change depending on a number of factors. Differences between the actual clinical trial costs and the estimated clinical trial costs that we have accrued in any prior period are recognized in the subsequent period in which the actual costs become known. Historically, these differences have not been material; however, material differences could occur in the future. Payments made to reimburse collaborators for our share of their research and development activities are recorded as research and development expenses, and are recognized as the work is performed. Comprehensive Loss Comprehensive loss is defined as the change in equity during a period from transactions and other events and circumstances from non-owner sources. We report components of comprehensive loss in the period in which they are recognized. For the year ended December 31, 2017, comprehensive loss consisted of net loss, foreign currency translation gains and losses, and unrealized gains and losses related to available-for-sale investments. For the years ended 2016, and 2015, comprehensive loss consisted of net loss and foreign currency translation gains and losses. Income (Loss) Per Share We calculate basic and diluted loss from continuing operations, income (loss) from discontinued operations and net loss per share using the weighted-average number of shares of common stock outstanding during the period. We have a loss from continuing operations for the years ended December 31, 2017, 2016, and 2015, in addition to excluding potentially dilutive out-of-the money securities, we have excluded from our calculation of income (loss) per share all potentially dilutive in-the-money (i) stock options, (ii) restricted stock unit awards, or RSUs, (iii) Total Stockholder Return, or TSR, performance restricted stock unit, or PRSU, awards, (iv) unvested restricted stock in our deferred compensation plan and (v) our previously outstanding warrants, and our diluted net loss per share is the same as our basic net loss per share. The table below presents the weighted-average number of potentially dilutive securities that were excluded from our calculation of diluted income (loss) per share for the years presented, in thousands. Years ended December 31, 2017 2016 2015 Stock options 3,664 2,495 1,703 Warrants — — 2 RSUs and unvested restricted stock 3 21 55 Total 3,667 2,516 1,760 Because the market condition for the PRSUs was not satisfied at December 31, 2017, 2016, and 2015, such securities are excluded from the table above. Income Taxes We use the asset and liability method of accounting for income taxes. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Our deferred tax assets and liabilities are determined using the enacted tax rates expected to be in effect for the years in which those tax assets are expected to be realized. The realization of our deferred tax assets is dependent upon our ability to generate sufficient future taxable income. We establish a valuation allowance when it is more-likely-than-not the future realization of all or some of the deferred tax assets will not be achieved. The evaluation of the need for a valuation allowance is performed on a jurisdiction-by-jurisdiction basis, and includes a review of all available evidence, both positive and negative. The impact of an uncertain income tax position is recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. |
Fair Value Disclosures
Fair Value Disclosures | 12 Months Ended |
Dec. 31, 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 December 31, 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) $ 48,750 $ 48,750 $ — $ — US government and government agency notes(2) 50,335 50,335 — — Corporate debt instruments(2) 94,639 — 94,639 — 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 the accompanying (2) Included in either cash and cash equivalents or available-for-sale investments in the accompanying consolidated balance sheet. |
Investments, Available-for-Sale
Investments, Available-for-Sale | 12 Months Ended |
Dec. 31, 2017 | |
Investments Debt And Equity Securities [Abstract] | |
Investments, Available-for-Sale | 3. Investments, Available-for-Sale Investments, available-for-sale, consisted of the following at December 31, 2017, in thousands: Maturity in years Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value US government and government agency notes Less than 1 $ 34,873 $ — $ (8 ) $ 34,865 Corporate debt securities Less than 1 53,438 — (63 ) 53,375 Short-term investments, available-for-sale $ 88,311 $ — $ (71 ) $ 88,240 US government and government agency notes 1 - 5 $ — $ — $ — $ — Corporate debt securities 1 - 5 24,304 — (62 ) 24,242 Investments, available-for-sale $ 24,304 $ — $ (62 ) $ 24,242 |
Balance Sheet Details
Balance Sheet Details | 12 Months Ended |
Dec. 31, 2017 | |
Balance Sheet Related Disclosures [Abstract] | |
Balance Sheet Details | 4. Balance Sheet Details Land, property and equipment, net consisted of the following, in thousands: December 31, 2017 2016 Land $ 7,650 $ 7,650 Building and capital improvements 54,584 54,584 Leasehold improvements 17,769 17,769 Machinery and equipment 1,737 13,181 Computers and software 4,890 4,890 Furniture and office equipment 1,614 1,563 88,244 99,637 Less accumulated depreciation and amortization (58,113 ) (64,528 ) Land, property and equipment, net $ 30,131 $ 35,109 Substantially all of our long-lived assets, other than those held for sale, are located in the United States. Accounts payable and other accrued liabilities consisted of the following, in thousands: December 31, 2017 2016 Accounts payable $ 1,599 $ 1,295 Accrued compensation 5,255 3,703 Other accrued liabilities 1,062 678 Total accounts payable and other accrued liabilities $ 7,916 $ 5,676 |
Manufacturing Operations Held f
Manufacturing Operations Held for Sale | 12 Months Ended |
Dec. 31, 2017 | |
Discontinued Operations And Disposal Groups [Abstract] | |
Manufacturing Operations Held for Sale | 5. Manufacturing Operations Held for Sale On March 9, 2018, Arena GmbH entered into the Sale Agreement with Siegfried to divest our Manufacturing Operations We have retrospectively revised the consolidated statements of operations and cash flows for the years ended December 31, 2016 and 2015 and the consolidated balance sheet as of December 31, 2016 to reflect the operations and cash flows of the Manufacturing Operations as discontinued operations and the related assets and liabilities as held for sale. The following table summarizes the results of discontinued operations for the periods presented in the consolidated statements of operations for the years ended December 31, 2017, 2016, and 2015, in thousands: Years ended December 31, Revenues 2017 2016 2015 Net product sales $ 9,189 $ 26,349 $ 19,726 Other collaboration revenue 6,671 1,334 952 Toll manufacturing 3,179 4,129 4,250 Total revenues 19,039 31,812 24,928 Operating costs and expenses Cost of product sales 7,472 9,297 8,590 Cost of toll manufacturing 4,756 6,044 4,585 Research and development 643 2,643 5,128 General and administrative 1,672 3,714 5,685 Impairment of long-lived assets — 21,766 — Restructuring charges — 231 626 Total operating costs and expenses 14,543 43,695 24,614 Income (loss) from operations 4,496 (11,883 ) 314 Other income (expense), net (1,374 ) 1,287 2,414 Income (loss) from discontinued operations $ 3,122 $ (10,596 ) $ 2,728 The following table summarizes the assets and liabilities of the Manufacturing Operations which are classified as held for sale as of December 31, 2017 and 2016, in thousands: December 31, 2017 2016 Assets Current assets: Accounts receivable $ 813 $ 19,589 Inventories 6,949 6,708 Prepaid expenses and other current assets 634 138 Total current assets(1) 26,435 Land, property and equipment, net 7,511 8,719 Intangible assets, net 1,233 2,357 Other assets — 95 Total non-current assets(1) 11,171 Total assets of disposal group held for sale $ 17,140 $ 37,606 Liabilities Current liabilities: Accounts payable and other accrued liabilities $ 2,145 $ 6,440 Payable to Eisai — 9,074 Deferred revenues 25,450 30,878 Total liabilities of disposal group held for sale (all current) $ 27,595 $ 46,392 (1) The assets and liabilities of the Manufacturing Operations classified as held for sale are classified as current in the consolidated balance sheet at December 31, 2017, because it is probable that the sale will occur and proceeds will be collected within one year. |
Derivative Liabilities
Derivative Liabilities | 12 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Derivative Liabilities | 6. Derivative Liabilities In August 2008, we issued seven-year warrants, which we refer to as the Series B Warrants, to purchase 110,634 shares of our common stock at an exercise price of $77.10 per share. As a result of the warrants’ anti-dilution provision and certain of our subsequent equity issuances, the number of shares issuable upon exercise of the warrants increased and the exercise price decreased. In August 2015, the August 2008 Series B Warrant, which was recorded as a current derivative liability of $0.5 million in our consolidated balance sheet at December 31, 2014, expired pursuant to its terms. Therefore, we recorded a gain in our consolidated statement of operations and comprehensive loss for the year ended December 31, 2015. The warrants were revalued on each balance sheet date, with changes in the fair value between reporting periods recorded in the interest and other income (expense) section of our consolidated statements of operations and comprehensive loss. |
Commitments
Commitments | 12 Months Ended |
Dec. 31, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments | 7. Commitments We have four properties in California under sale and leaseback agreements. The terms of these leases stipulate annual increases in monthly rental payments of 2.5%. We accounted for our sale and leaseback transactions using the financing method. Under the financing method, the book value of the properties and related accumulated depreciation remain on our balance sheet and no sale is recognized. The sales price of the properties is recorded as a financing obligation, and a portion of each lease payment is recorded as interest expense. We recorded interest expense of $6.1 million, $6.4 million, and $6.7 million for the years ended December 31, 2017, 2016, and 2015, respectively, related to these leases. We expect interest expense related to our facilities to total $31.6 million from December 31, 2017, through the remaining terms of the leases in fiscal year 2027. At December 31, 2017, the total financing obligation for these facilities was $61.7 million. The aggregate residual value of the facilities at the end of the lease terms is $10.0 million. We lease an additional property in California under an operating lease, which expires in May 2027, and contains a purchase option and stipulates annual increases in monthly rental payments of 2.5%. We also lease office space in Zug, Switzerland under an operating lease which expires in September 2020. Additionally, we also lease space in various facilities in Zofingen, Switzerland pertaining to the Manufacturing Operations. In accordance with the lease terms for certain of our properties, we are required to maintain deposits for the benefit of the landlord throughout the term of the leases. A total of $0.7 million and $0.7 million were recorded in other non-current assets in our consolidated balance sheets at December 31, 2017, and 2016, respectively, related to such leases. We recognize rent expense on a straight-line basis over the term of each lease. Rent expense of $1.5 million, $1.2 million and $1.1 million was recognized for the years ended December 31, 2017, 2016, and 2015, respectively. At December 31, 2017, the future minimum lease payments under our existing financing and operating lease obligations are as follows, in thousands: Year ending December 31, Financing Obligations Operating Leases 2018 $ 8,930 $ 1,299 2019 8,053 1,396 2020 8,254 1,280 2021 8,461 976 2022 8,672 1,000 Thereafter 40,939 4,724 Total minimum lease payments 83,309 $ 10,675 Less amounts representing interest (31,551 ) Add amounts representing residual value 9,990 Lease financing obligations 61,748 Less current portion (4,000 ) $ 57,748 In May 2016, we entered into an agreement to sublease one of our other California properties to a third party. This sublease commenced in August 2016 and expires in May 2027. The terms of the sublease stipulate annual increases in monthly rental payments of 3.19%. In September 2016, we entered into an agreement to sublease one of our California properties to Beacon, which commenced in September 2016 and expires in August 2021. The monthly rental payments are fixed for the terms of this sublease. In April 2017, we entered into an agreement to sublease another of our California properties, which commenced in July 2017 and expires in May 2027. The terms of the sublease stipulate annual increases in monthly rental payments of 3.00%. We recognize rent income on a straight-line basis over the term of the subleases. Expected minimum rental payments to be received under the sublease are as follows: Year ending December 31, 2018 $ 1,205 2019 1,526 2020 1,567 2021 1,551 2022 1,476 Thereafter 7,076 Total $ 14,401 |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stockholders' Equity | 8. Stockholders’ Equity In January 2017, we entered into an Equity Distribution Agreement, or 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 an underwritten public offering. Net proceeds from the offering were approximately $74.4 million after deducting underwriting discounts and commissions, and offering expenses payable by us. In July 2017, we completed the sale of an additional 7,187,500 shares of our common stock under an underwritten public offering. Net proceeds from the offering were $162.0 million after deducting underwriting discounts and commissions, and offering expenses payable by us. Equity Compensation Plans. On June 13, 2017, our stockholders approved our 2017 Long-Term Incentive Plan, or 2017 LTIP. Upon such approval, our 2013 Long-Term Incentive Plan, or 2013 LTIP, was terminated. However, notwithstanding such termination or the previous termination of our 2012 Long-Term Incentive Plan, 2009 Long-Term Incentive Plan, and 2006 Long-Term Incentive Plan, as amended, or, together with the 2013 LTIP, the Prior Plans, all outstanding awards under the Prior Plans will continue to be governed under the terms of the Prior Plans. The number of shares of common stock authorized for issuance under the 2017 LTIP may be increased by the number of shares subject to any stock awards under the Prior Plans that are forfeited, expire or otherwise terminate without the issuance of such shares and would otherwise be returned to the share reserve under the Prior Plans but for their termination and as otherwise provided in the 2017 LTIP. The 2017 LTIP provides for the grant of a total of 3.1 million shares of our common stock (subject to adjustment for certain corporate events), as (i) decreased for grants made under the 2013 LTIP between March 30, 2017, and the approval of the 2017 LTIP and (ii) increased by the number of shares subject to any stock awards under the Prior Plans that, between March 30, 2017, and the approval of the 2017 LTIP, were forfeited, expired or settled for cash and as otherwise provided in the 2017 LTIP. Shares under the 2017 LTIP may be granted as incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards and performance awards. Subject to certain limited exceptions, stock options and stock appreciation rights granted under the 2017 LTIP reduce the available number of shares by one share for every share issued while awards other than stock options and stock appreciation rights granted under the 2017 LTIP reduce the available number of shares by 1.6 shares for every share issued. In addition, shares that are released from awards granted under the Prior Plans or the 2017 LTIP because the awards expire, are forfeited or are settled for cash will increase the number of shares available under the 2017 LTIP by one share for each share released from a stock option or stock appreciation right and by 1.6 shares for each share released from a restricted stock award or restricted stock unit. Stock options granted under the 2017 LTIP generally vest over four years with 25% of the shares subject to each option vesting on the first anniversary of the grant date and the remainder of the shares vesting monthly over the following three years in equal installments and are exercisable for up to seven years from the date of grant. The recipient of a restricted stock award has all rights of a stockholder at the date of grant, subject to certain restrictions on transferability and a risk of forfeiture. Restricted stock unit awards generally vest over one or four years from the date of grant. The minimum performance period under a performance award is 12 months. Neither the exercise price of an option nor the grant price of a stock appreciation right may be less than 100% of the fair market value of the common stock on the date such equity award is granted, except in specified situations. The 2017 LTIP prohibits option and stock appreciation right repricings (other than to reflect stock splits, spin-offs or certain other corporate events) without stockholder approval. The following table summarizes our stock option activity under the Prior Plans and the 2017 LTIP, or collectively, our Equity Compensation Plans, for the year ended December 31, 2017, in thousands (except per share data): Options Weighted- Average Exercise Price Weighted-Average Remaining Contractual Term (in years) Aggregate Intrinsic Value Outstanding at December 31, 2016 2,520 $ 30.30 Granted 2,241 $ 16.53 Exercised (323 ) $ 16.71 Forfeited/cancelled/expired (683 ) $ 47.24 Outstanding at December 31, 2017 3,755 $ 20.00 5.46 $ 60,003 Vested and expected to vest at December 31, 2017 3,755 $ 20.00 5.46 $ 60,003 Vested and exercisable at December 31, 2017 1,094 $ 27.35 4.01 $ 14,385 The aggregate intrinsic value in the above table is calculated as the difference between the closing price of our common stock at December 31, 2017, of $33.97 per share and the exercise price of stock options that had strike prices below the closing price. The intrinsic value of all stock options exercised during the years ended December 31, 2017, 2016, and 2015, was $2.8 million, $0.1 million, and $2.2 million, respectively. During the year ended December 31, 2017, cash of $5.4 million was received from stock option exercises. There is no tax impact related to share-based compensation or stock option exercises because we are in a net operating loss position with a full valuation allowance on our deferred tax assets. Subsequent to December 31, 2017, we granted an additional 2,088,625 stock options to our employees and directors under the 2017 LTIP. In March 2015, March 2014 and March 2013, we granted our executive officers PRSU awards. The PRSUs may be earned and converted into outstanding shares of our common stock based on the TSR of our common stock relative to the TSR over a three-year performance period beginning March 1 of the year granted of the Nasdaq Biotechnology Index. In the aggregate, the target number of shares of common stock that could be earned under the PRSUs granted in March 2015, March 2014 and March 2013 were originally 74,500, 69,500 and 78,000, respectively; however, the actual number of shares that could be earned ranges from 0% to 200% of such amounts. In addition, there is a cap on the number of shares that could be earned under the PRSUs equal to six times the grant-date fair value of each award, and funding is capped at 100% if the absolute 3-year TSR is negative even if performance is above the median. As these awards contain a market condition, we used a Monte Carlo simulation model to estimate the grant-date fair value, which totaled $3.4 million, $5.0 million and $5.9 million for the March 2015, 2014 and March 2013 grants, respectively. The grant-date fair value is recognized as compensation expense over the performance period as service is provided; no compensation expense is recognized for service not provided in case of separation from the Company. There is no adjustment of compensation expense recognized for service performed regardless of the number of PRSUs, if any, that ultimately vest. In February 2016, the remaining PRSUs granted in March 2013 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, 2013. In February 2017, the remaining PRSUs granted in March 2014 were forfeited without any earnout based on the TSR of our common stock relative to the TSR Nasdaq Biotechnology Index over the three-year performance period that began on March 1, 2014. In March 2018, 32,322 shares were issued to the holders of the remaining PRSUs granted in March 2015 based on the TSR of our common stock relative to the TSR Nasdaq Biotechnology Index over the three-year performance period that began on March 1, 2015. Employee Stock Purchase Plan. In June 2015, our stockholders approved our 2009 Employee Stock Purchase Plan, as amended, or 2009 ESPP. Under the 2009 ESPP substantially all employees could choose to have up to 15% of their annual compensation withheld to purchase up to 625 shares of our common stock per purchase period, subject to certain limitations. The shares of our common stock could be purchased over an offering period with a maximum duration of 24 months and at a price of not less than 85% of the lesser of the fair market value of the common stock on (i) the first trading day of the applicable offering period or (ii) the last trading day of the applicable three-month purchase period. Under applicable accounting guidance, the 2009 ESPP was considered a compensatory plan. The 2009 ESPP was terminated in June 2017. During the years ended December 31, 2017, 2016, and 2015, a total of 2,236, 14,140, and 32,795 shares, respectively, were purchased by our employees under the 2009 ESPP. Share-based Compensation. We estimate the grant-date fair value of all of our share-based awards in determining our share-based compensation expense. Our share-based awards include stock options, options to purchase stock granted under our employee stock purchase plan, RSUs, and PRSU awards. The table below sets forth the weighted-average assumptions and estimated fair value of stock options we granted under our Equity Compensation Plans during the years presented: Years ended December 31, 2017 2016 2015 Risk-free interest rate 1.9 % 1.4 % 1.8 % Dividend yield 0 % 0 % 0 % Expected volatility 69 % 79 % 80 % Expected life (years) 4.58 4.81 6.08 Weighted-average estimated fair value per share of stock options granted $ 9.17 $ 10.17 $ 25.48 We recognized share-based compensation expense as follows for the years presented, in thousands, except per share data: Years ended December 31, 2017 2016 2015 Research and development $ 1,945 $ 5,596 $ 7,512 General and administrative 5,925 4,447 6,458 Restructuring charges — 1,032 142 Discontinued operations 120 42 351 Total share-based compensation expense $ 7,990 $ 11,117 $ 14,463 Impact on net loss per share, basic and diluted $ 0.24 $ 0.46 $ 0.60 The table below sets forth our total unrecognized estimated compensation expense at December 31, 2017, by type of award and the weighted-average remaining requisite service period over which such expense is expected to be recognized: Unrecognized Expense (in thousands) Remaining Weighted-Average Recognition Period (in years) Unvested stock options $ 20,311 2.89 PRSUs 55 0.16 RSUs 22 0.96 Common Stock Reserved for Future Issuance. A total of 6,813,713 shares of our common stock are reserved for future issuance at December 31, 2017, pursuant to our Equity Compensation Plans. |
Collaborations
Collaborations | 12 Months Ended |
Dec. 31, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Collaborations | 9. Collaborations Everest. In December 2017, we and Everest entered into an exclusive agreement to conduct joint development We received from Everest an upfront payment of $12.0 million in December 2017. Revenues from this upfront payment were recognized in December 2017 as we determined (i) that the license is a deliverable with standalone value to Everest and (ii) the upfront payment represents consideration to be allocated to the delivered license. We are also eligible to receive up to an aggregate of $212.0 million in success milestones in case of full commercial success of multiple drug products. Of these payments, six development milestones totaling $49.5 million are substantive, nine regulatory milestones totaling $22.5 million are substantive and six commercial milestones totaling $140.0 million are non-substantive. We are further eligible to receive tiered royalties on net sales of ralinepag and etrasimod products in the Territories Eisai. In July 2010, we granted Eisai exclusive commercialization rights for lorcaserin (marketed as BELVIQ® / BELVIQ XR®) 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. In December 2016, we and Eisai amended and restated the terms of marketing and supply agreement for lorcaserin with Eisai by entering into a Transaction Agreement and a Supply Agreement (collectively, the Eisai Agreement) with Eisai. Under the Transaction Agreement, Eisai acquired an exclusive royalty-bearing license or transfer of intellectual property to global commercialization and manufacturing rights to lorcaserin, including in the territories retained by us under the prior agreement, with control over global development and commercialization decisions. Eisai is responsible for all lorcaserin development expenses going forward. We also assigned to Eisai our rights under the commercial lorcaserin distribution agreements with Ildong Pharmaceutical Co., Ltd., or Ildong, for South Korea; CY Biotech Company Limited, or CYB, for Taiwan; and Teva Pharmaceuticals Ltd.’s Israeli subsidiary, Abic Marketing Limited, or Teva, for Israel. This is collectively referred to as License Deliverable. Under the Supply Agreement, Eisai paid us $10.0 million to acquire our entire on-hand inventory of bulk lorcaserin and the precursor material for manufacturing lorcaserin, which is referred to as Inventory Deliverable. Eisai is also paying us for finished drug product plus up to CHF 13.0 million in manufacturing support payments over an initial two-year supply period. We manufacture lorcaserin at our facility in Zofingen, Switzerland. Revenues earned for (i) lorcaserin sold by us to Eisai under the manufacturing and supply commitment within the Supply Agreement, or Manufacturing and Supply Commitment Deliverable, and formerly sold by us to Eisai, Ildong, CYB and Teva for commercial or development purposes under the prior lorcaserin collaboration agreements and (ii) the manufacturing support payments are classified within discontinued operations as part of the Manufacturing Operations on the consolidated statements of operations (see Note 5). All other revenues earned under the Transaction Agreement and the prior lorcaserin collaboration agreements, such as royalties, licenses, milestones and development expense reimbursements, are classified within continuing operations on the consolidated statements of operations. Royalty payments. Pursuant to the Transaction 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 We record revenues from the royalty payments in the period in which the net sales upon which the royalties are calculated occur as reported to us by Eisai. For the year ended December 31, 2017, we recognized royalty revenue of $1.7 million under the Eisai Agreement. Upfront payments. Prior to the Transaction Agreement, we received from Eisai total upfront payments of $115.0 million under prior lorcaserin collaboration agreements. Revenues from these upfront payments were previously deferred, as we determined that the exclusive rights did not have standalone value without our ongoing development and regulatory activities. Accordingly, these payments were recognized ratably as revenue over the periods in which we expected the services to be rendered. The Transaction Agreement effectively eliminated our obligation to continue performing the development and regulatory activities required in the original agreement, which resulted in acceleration of upfront payment revenue recognition in 2016. For the years ended December 31, 2016, and 2015, we recognized revenue of $66.0 million and $7.5 million, respectively, related to these upfront payments. Milestone payments. In July 2016, the US Food and Drug Administration, or FDA, approved the New Drug Application for BELVIQ XR. We earned from Eisai a $10.0 million substantive milestone payment from this achievement. In October 2016, Eisai announced the commercial launch of BELVIQ XR in the United States. In July 2016, the Federal Commission for the Protection Against Sanitary Risk approved the Marketing Authorization Application in Mexico for our twice-daily formulation of lorcaserin for chronic weight management. We earned from Eisai a $1.0 million substantive milestone payment from this achievement. In December 2016, the Brazilian Health Surveillance Agency provided regulatory approval in Brazil for BELVIQ. We earned from Eisai a $1.0 million substantive milestone payment from this achievement. We are eligible to receive an additional substantive commercial milestone of $25.0 million upon the achievement of global net sales of lorcaserin for a calendar year first exceeding $250.0 million. Product purchase price 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 Under the Second Amended Agreement, we sold lorcaserin to Eisai for Eisai’s commercialization in the United States for a purchase price of 31.5% of Eisai’s aggregate annual net product sales (which are the gross invoiced sales less certain deductions described in the Second Amended Agreement), or the Product Purchase Price. The amount that Eisai paid us for lorcaserin product supply was based on Eisai’s estimated price at the time the order was shipped, which was Eisai’s estimate of the Eisai Product Purchase Price, and was subject to change on April 1 and October 1 of each year. The Eisai Product Purchase Price for the product Eisai sold under the Second Amended Agreement was lower than the estimated price that Eisai paid us for such product, primarily due to an increase in deductions from savings cards and returns, partially offset by a decrease in vouchers. At the end of Eisai’s fiscal year (March 31), the estimated price paid to us for product that Eisai sold to its distributors was compared to the Eisai Product Purchase Price of such product, and the difference was refunded back to Eisai for the overpayments. The $9.1 million classified as Payable to Eisai within the total liabilities of disposal group held for sale at December 31, 2016, relates to product sold by Eisai to its distributors from April 1, 2015, through March 31, 2016. Under the Eisai Agreement, we were not required to refund to Eisai any net overpayment which would have been otherwise due to Eisai under the Second Amended Agreement for product we sold to Eisai under the Second Amended Agreement which Eisai did not sell to its distributors on or before March 31, 2016. For product which Eisai sold to its distributors from April 1, 2016, through December 28, 2016, we recognized the net overpayment which would have been otherwise due to Eisai under the Second Amended Agreement of $2.0 million as revenues and included this amount in net product sales for the year ended December 31, 2016, which is a component of discontinued operations in the consolidated statement of operations. Prior to December 2016, we deferred recognition of revenue and the related cost at the time we sold lorcaserin to Eisai because we did not have the ability to estimate the amount of product that could have been returned to us and thus recognized revenues and the related costs from net product sales when Eisai shipped BELVIQ to its distributors. Pursuant to a change in the terms of the Eisai Agreement, we determined that we achieved the ability to reasonably estimate the amount of product returns and recognize revenue and the related cost from product sales when we ship BELVIQ to Eisai. On December 28, 2016, we recognized revenues of $6.7 million and costs of $1.9 million on net product sales which had been previously deferred, which is a component of discontinued operations in the consolidated statement of operations. 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; (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 collaboration revenue of continuing operations for the year ended December 31, 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 on that date. There is no fixed schedule for delivery given a portion has been and will be delivered on a continuous basis as we perform under the manufacturing commitment, another portion has been and will be physically transferred to Eisai upon request by Eisai and the rest is expected to be physically transferred at the end of the manufacturing and supply commitment period. Also, the risks of ownership for this inventory did not pass to Eisai in 2016 as we have financial responsibility for loss, damage or destruction which occurs while in our possession. • $20.8 million was allocated to the Manufacturing and Supply Commitment Deliverable. This deliverable is being provided over 2017 and 2018 as product is shipped to Eisai The estimated selling price represents the price at which we would contract if the deliverable was sold regularly on a standalone basis. The estimated selling price for each unit of accounting was determined as follows: • The estimated selling price for the License Deliverable was determined using an income approach that estimates the net present value of royalties Eisai is expected to earn under the Eisai Agreement as compared to the Second Amended Agreement, net of the development costs we are no longer obligated to spend. This model includes several assumptions, including the potential market for lorcaserin in each relevant jurisdiction, probabilities of obtaining regulatory approval in additional jurisdictions, the impact of competition, the potential impact of Eisai’s ongoing development and regulatory activities related to lorcaserin, and the appropriate discount rate. • The estimated selling price for the Inventory Deliverable was determined by considering the historical cost of the precursor materials, adjusted for any changes in market condition and supplier relationships. We believe that the Eisai Agreement pricing represents pricing that would be charged if it were sold on a standalone basis. • The estimated selling price for the Manufacturing and Supply Commitment Deliverable was determined to be the aggregate product purchase payments we expect to receive from Eisai for the initial two-year manufacturing and supply commitment period. As noted above, we believe that the Eisai Agreement pricing represents pricing that would be charged if it were sold on a standalone basis. Development payments. As part of the US approval of BELVIQ, the FDA, is requiring the evaluation of the effect of long-term treatment with BELVIQ on the incidence of major adverse cardiovascular events, or MACE, in overweight and obese patients with cardiovascular disease or multiple cardiovascular risk factors (which is the FDA-required portion of the cardiovascular outcomes trial), as well as the conduct of postmarketing studies to assess the safety and efficacy of BELVIQ for weight management in obese pediatric and adolescent patients. Under the Second Amended Agreement, Eisai and we were responsible for 90% and 10%, respectively, of the cost for the FDA-required portion of the cardiovascular outcomes trial, or CVOT, 50% and 50%, respectively, of the non-FDA portion of the studies and we were also obligated to share the cost of FDA-required studies in obese pediatric patients and for additional clinical studies in other territories. Under the Eisai Agreement, Eisai is solely responsible for all costs and expenses in connection with further development of lorcaserin from and after July 1, 2016, and we were relieved of any obligations under the Second Amended Agreement to pay our share of future development costs of lorcaserin. Accordingly, on December 28, 2016, we recorded a reduction of research and development expenses which would have been otherwise due to Eisai under the Second Amended Agreement of $3.7 million for the period from July 1, 2016, through December 28, 2016. For the years ended December 31, 2016, and 2015, we recognized expenses of $4.2 million, and $10.8 million, respectively, for external clinical study fees related to lorcaserin, which are included in continuing operations. There were no such expenses in 2017. Additionally, for the years ended December 31, 2017, 2016, and 2015 we recognized expenses of $1.4 million, $3.1 million, and $5.4 million, respectively for internal non-commercial manufacturing costs primarily related to lorcaserin, which are included in discontinued operations. Ildong Pharmaceutical Co., Ltd. In November 2012, we and Ildong entered into the Marketing and Supply Agreement, or Ildong Agreement. Under this agreement, we granted Ildong exclusive rights to commercialize BELVIQ in South Korea for weight loss or weight management in obese and overweight patients. We also provided certain services and manufacture and sold BELVIQ to Ildong. As noted above, the Ildong Agreement was assigned to Eisai pursuant to the Eisai Agreement on December 28, 2016. In connection with entering into the Ildong Agreement, we received from Ildong an upfront payment of $5.0 million, less withholding taxes. Revenues from this upfront payment were deferred, as we determined that the exclusive rights did not have standalone value without our ongoing development and regulatory activities. Accordingly, this payment was recognized ratably as revenue over the period in which we expected the services to be rendered. The assignment of the Ildong Agreement pursuant to the Eisai Agreement effectively eliminated our obligation to continue performing the development and regulatory activities required in the Ildong Agreement. Therefore, on December 28, 2016, the $3.5 million of deferred revenues from this upfront payment was allocated to the value of the License provided to Eisai and recognized as revenue in 2016. In February 2015, we earned a substantive milestone payment of $3.0 million upon the approval of BELVIQ for marketing in South Korea for weight management. We received the payment, less withholding taxes, in March 2015. Under the Ildong Agreement, we manufactured BELVIQ at our facility in Zofingen, Switzerland, and sold BELVIQ to Ildong for a purchase price starting at the higher of the defined minimum amount or 35% of Ildong’s annual net product sales (which are the gross invoiced sales less certain deductions described in the Ildong Agreement), or the Ildong Product Purchase Price. The Ildong Product Purchase Price increased on a tiered basis up to the higher of the defined minimum amount or 45% on the portion of annual net product sales exceeding $15.0 million. Since the inception of commercial sales of BELVIQ in South Korea in 2015, the Ildong Product Purchase Price equaled the defined minimum amount (which exceeded the amounts calculated using the applicable percentages for the applicable tiers of Ildong’s annual net product sales). Prior to December 2016, we deferred recognition of revenue and the related cost at the time we sold BELVIQ to Ildong because we did not have the ability to estimate the amount of product that could have been returned to us and thus recognized revenues and the related costs from net product sales when Ildong shipped BELVIQ to its distributors. In December 2016, we determined that we achieved the ability to reasonably estimate product returns under the Ildong Agreement. Accordingly, we recognized revenues of $2.0 million and costs of $0.7 million in December 2016 on net product sales which had been previously deferred, of which is a component of discontinued operations in the consolidated statement of operations. For the years ended December 31, 2016 and 2015, we recognized revenues of $11.4 million and $8.9 million, respectively, under the Ildong agreement, of which $7.2 million and $5.5 million, respectively are included in discontinued operations. No revenues were recognized during the year ended December 31, 2017 under this agreement. CY Biotech Company Limited. In July 2013, we entered into the CYB Agreement. Under this agreement, we granted CYB exclusive rights to commercialize BELVIQ in Taiwan for weight loss or weight management in obese and overweight patients, subject to regulatory approval of BELVIQ by the Taiwan Food and Drug Administration, or TFDA. The CYB Agreement provided for us to perform certain services and to manufacture and sell BELVIQ to CYB. As noted above, the CYB Agreement was assigned to Eisai pursuant to the Eisai Agreement on December 28, 2016. In connection with entering into the CYB agreement, we received from CYB an upfront payment of $2.0 million, less withholding taxes. Revenues from this upfront payment were deferred, as we determined that the exclusive rights did not have standalone value without our ongoing development and regulatory activities. Accordingly, this payment was recognized ratably as revenue over the period in which we expected the services to be rendered. The assignment of the CYB Agreement pursuant to the Eisai Agreement effectively eliminated our obligation to continue performing the development and regulatory activities required in the CYB Agreement. Therefore, on December 28, 2016, the $1.7 million of deferred revenues from this upfront payment was allocated to the value of the License provided to Eisai and recognized as revenue in 2016. For the years ended December 31, 2016 and 2015, we recognized revenues of $1.8 million and $0.2 million, respectively, under this agreement. No revenues were recognized during the year ended December 31, 2017 under this agreement. Axovant Sciences GmbH. In May 2015, we entered into a Development, Marketing and Supply Agreement with Roivant Sciences Ltd., or Roivant. In October 2015, Roivant, assigned the exclusive rights to develop and commercialize nelotanserin to its subsidiary, Axovant. Under this agreement, 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. We received an upfront payment of $4.0 million, 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 are entitled to receive payments from sales of nelotanserin under the agreement and are eligible to receive purchase price adjustment payments based on Axovant’s annual net product sales. We are also 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 years ended December 31, 2017, 2016, and 2015, and we recognized revenues of $2.2 million, $2.1 million and $1.1 million, respectively, under this agreement. Boehringer Ingelheim International GmbH. In December 2015, we and Boehringer Ingelheim entered into an exclusive agreement, under which we and Boehringer Ingelheim 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. Under this agreement, we granted Boehringer Ingelheim exclusive rights to our internally discovered, novel compounds and intellectual property for an orphan CNS receptor. We jointly conduct research with Boehringer Ingelheim to identify additional drug candidates that are suitable for continued research and development as therapeutic compounds for various disease indications, with the initial focus expected to be psychiatric diseases such as schizophrenia. The agreement grants Boehringer Ingelheim exclusive worldwide rights to develop, manufacture and commercialize products resulting from the collaboration. In part consideration of the rights to our intellectual property necessary or useful to conduct the joint research under the 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. We are also eligible to receive up to an aggregate of $251.0 million (of which up to $12.0 million is payable to Beacon) 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 milestones totaling $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 years ended December 31, 2017, and 2016, we recognized revenues of $5.1 million and $5.1 million, respectively under this agreement. We did not recognize any revenues under this agreement during the year ended December 31, 2015. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2017 | |
Compensation And Retirement Disclosure [Abstract] | |
Employee Benefit Plans | 10. Employee Benefit Plans 401(k) Plan. All of our US employees are eligible to participate in our defined contribution retirement plan that complies with Section 401(k) of the Internal Revenue Code, or IRC. We match 100% of each participant’s voluntary contributions, subject to a maximum of 6% of the participant’s eligible compensation. Our matching portion, which totaled $0.5 million, $1.0 million, and $1.7 million for the years ended December 31, 2017, 2016, and 2015, respectively, vests over a five-year period from the date of hire. Pension Plan. Arena GmbH contributes to a multiemployer defined benefit pension plan, established under an affiliated group of employers, for the purpose of providing mandatory occupational pension benefits for its employees. The risks of participating in a multiemployer plan are different from a single-employer plan in that (i) assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of other participating employers, (ii) if a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers, (iii) if Arena GmbH elects to stop participating in the multiemployer plan, Arena GmbH may be required to pay the plan an amount based on the underfunded status of the plan, referred to as a withdrawal liability, and (iv) Arena GmbH has no involvement in the management of the multiemployer plan’s investments. We currently have no intention of withdrawing from the multiemployer plan. Our contributions to the multiemployer plan were $0.5 million, $0.8 million and $0.7 million for the years ended December 31, 2017, 2016, and 2015, respectively. APD GmbH contributes to a single employer defined contribution pension plan. Our contributions to the multiemployer plan were $0.2 million for the year ended December 31, 2017. There were no such contributions in 2016 and 2015. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 11. Income Taxes The following table summarizes our loss attributable to stockholders of Arena before benefit for income taxes by region for the years presented, in thousands: Years ended December 31, 2017 2016 2015 United States $ (62,109 ) $ (10,268 ) $ (64,109 ) Foreign (29,298 ) (12,248 ) (43,870 ) Total loss attributable to stockholders of Arena before income taxes $ (91,407 ) $ (22,516 ) $ (107,979 ) We have not recorded a benefit for income taxes for the years ended December 31, 2017, 2016, and 2015, because we have a full valuation allowance. Our effective income tax rate differs from the statutory federal rate of 34% for the years presented due to the following, in thousands: Years ended December 31, 2017 2016 2015 Benefit for income taxes at statutory federal rate $ (32,140 ) $ (4,053 ) $ (37,641 ) Change in valuation allowance due to tax reform 96,333 — — Change in federal and foreign valuation allowance (68,604 ) (3,867 ) 22,240 Permanent differences and other (782 ) 3,412 2,349 Share-based compensation expense 7,071 4,001 1,820 Foreign losses at lower effective rates 1,428 3,944 15,041 Research and development and Orphan Drug credits (3,306 ) (3,437 ) (3,647 ) Gain from valuation of derivative liabilities — — (162 ) Benefit for income taxes $ — $ — $ — The components of our net deferred tax assets are as follows, in thousands: December 31, 2017 2016 Deferred tax assets: Federal and California NOL carryforwards $ 179,323 $ 255,317 Federal and California research and development credit carryforwards 61,272 53,059 Foreign NOL carryforwards 15,425 4,238 Share-based compensation expense 4,884 10,395 Depreciation 3,896 5,441 Deferred revenues 3,554 9,357 Other, net 5,758 5,164 Total deferred tax assets 274,112 342,971 Deferred tax liabilities — — Net deferred tax assets 274,112 342,971 Valuation allowance (274,112 ) (342,971 ) Net deferred tax liabilities $ — $ — A valuation allowance is recorded against all of our deferred tax assets, as realization of such assets is not more-likely-than-not. The realization of our deferred tax assets is dependent upon future taxable income. Our ability to generate taxable income is analyzed regularly on a jurisdiction-by-jurisdiction basis. At such time as it is more-likely-than-not that we will generate taxable income in a jurisdiction, we will reduce or remove the valuation allowance. The valuation allowance decreased by $69.5 million from December 31, 2016, to December 31, 2017. On December 22, 2017, H.R. 1/Public Law No. 115-97 known as the Tax Cuts and Jobs Act, or the Tax Act, was signed into law. The effects of this new federal legislation are recognized upon enactment, which is the date a bill is signed into law. The Act includes numerous changes in existing tax law, including a permanent reduction in the federal corporate income tax rate from 35% to 21%. The rate reduction takes effect on January 1, 2018. As a result of the Tax Act, we have revalued our net deferred tax assets as of December 31, 2017 to reflect the rate reduction. Based on currently available information, we recorded a reduction in our net deferred tax assets of $96.3 million in the fourth quarter of 2017 related to the revaluation of our net deferred tax assets as a result of the Tax Act; however, the revaluation does not result in any additional net income tax expense as our net deferred tax assets are fully offset by the valuation allowance. At December 31, 2017, we had federal NOL carryforwards of $721.4 million that will begin to expire in 2023 unless previously utilized. At the same date, we had California NOL carryforwards of $398.6 million, which begin expiring in 2028 and foreign NOL carryforwards of $184.8 million, which begin expiring in 2018. At December 31, 2017, we also had federal and California research and development tax credit carryforwards, net of reserves, of $31.7 million and $23.8 million, respectively. At December 31, 2017, we had a Federal Orphan Drug Credit carryforward, net of reserves, of $10.1 million. Federal credit carryforwards will begin to expire after 2026 unless previously utilized. The California research and development credit carries forward indefinitely. Sections 382 and 383 of the IRC limit the utilization of tax attribute carryforwards that arise prior to certain cumulative changes in a corporation’s ownership. We have completed an IRC Section 382/383 analysis through 2015 and identified ownership changes that limit our utilization of tax attribute carryforwards. We reduced deferred tax assets associated with such tax attribute carryforwards to remove deferred tax assets that will expire prior to utilization. Pursuant to IRC Section 382 and 383, use of the Company’s net operating loss and research and development income tax credit carryforwards may be limited in the event of cumulative changes in ownership subsequent to 2015 of more than 50% within a three-year period. In accordance with authoritative guidance, the impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. The following table reconciles the beginning and ending amount of unrecognized tax benefits for the years presented, in thousands: Years ended December 31, 2017 2016 2015 Gross unrecognized tax benefits at the beginning of the year $ 5,906 $ 5,619 $ 5,214 Additions from tax positions taken in the current year 1,133 287 405 Additions from tax positions taken in prior years 723 — — Reductions from tax positions taken in prior years — — — Tax settlements — — — Gross unrecognized tax benefits at end of the year $ 7,762 $ 5,906 $ 5,619 Of our total unrecognized tax benefits at December 31, 2017, $6.2 million will impact our effective tax rate in the event the valuation allowance is removed. We do not anticipate that there will be a substantial change in unrecognized tax benefits within the next 12 months. Our practice is to recognize interest and/or penalties related to income tax matters in income tax expense. Because we have incurred net losses since our inception, we did not have any accrued interest or penalties included in our consolidated balance sheets at December 31, 2017, or 2016, and did not recognize any interest and/or penalties in our consolidated statements of operations and comprehensive loss for the years ended December 31, 2017, 2016, and 2015. We are subject to income taxation in the United States at the Federal and state levels. All tax years are subject to examination by US and California tax authorities due to the carryforward of unutilized NOLs and tax credits. We are also subject to foreign income taxes in the countries in which we operate. To our knowledge, we are not currently under examination by any taxing authorities. At December 31, 2017, no foreign subsidiaries have accumulated earnings and, as such, there are no unrepatriated earnings. Our Swiss subsidiary, Arena GmbH, has been granted a conditional incentive tax holiday by the Canton of Aargau for its operations in Switzerland. Without a tax holiday or other tax incentives, the standard effective tax rate of a company located in Aargau is approximately 19%. As a result of the tax holiday and other tax incentives, we expect the effective tax rate for Arena GmbH to be approximately half of such rate. The tax holiday came into effect on January 1, 2013, and will continue for a period of up to 10 years, not to extend beyond December 31, 2022. As a result of foreign losses and a full valuation allowance, no net tax benefit was derived for the years ended December 31, 2017, 2016, and 2015, as a result of the tax holiday. |
Legal Proceedings
Legal Proceedings | 12 Months Ended |
Dec. 31, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Legal Proceedings | 12. 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 November 3, 2017, we and the Lead Plaintiff signed a stipulation and agreement of settlement, or Stipulation, to resolve the consolidated class action. Under the terms of the Stipulation, and in exchange for a release of all claims by class members and a dismissal of the consolidated class action with prejudice, we have agreed (i) our insurers will pay class members and their attorneys a total of approximately $12.025 million and (ii) Arena will pay class members and their attorneys approximately $11.975 million in either shares of our common stock or cash at our election. On November 30, 2017, the District Court preliminary approved the settlement and the form of notice to potential class members of the proposed settlement and the procedure by which they can become class members. On March 8, 2018, the lead plaintiff filed motions for final approval of the settlement, the plan of allocation and award of attorney fees. The settlement and related matters remain subject to final approval by the District Court. We recognized $11.975 million of net expense for the portion of the settlement that we will pay in either common stock or cash in the consolidated statements of operations for the year ended December 31, 2017, and $24.0 million as a current liability in the consolidated balance sheet as of December 31, 2017 for the gross settlement liability, with a corresponding $12.025 million insurance recovery receivable. 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 (lorcaserin hydrochloride tablets, 10 mg). In its notification, Lupin alleged that no valid, enforceable claim of any of the patents that are listed in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations, or Orange Book, for BELVIQ will be infringed by Lupin’s manufacture, importation, use, sale or offer for sale of the product described in its ANDA for 10 mg lorcaserin hydrochloride tablets. Lupin is accused of infringing U.S. Patent Nos. 6,953,787; 7,514,422; 7,977,329; 8,207,158 and 8,273,734. In accordance with the Hatch-Waxman Act, as a result of filing a patent infringement lawsuit within 45 days of receipt of Lupin’s notification, the FDA cannot approve Lupin’s ANDA any earlier than 7.5 years from NDA approval unless a District Court finds that all of the asserted claims of the patents-in-suit are invalid, unenforceable or not infringed. On January 11, 2017, Lupin filed an answer, defenses and counterclaims to the September 30, 2016 complaint. We and Eisai Inc. filed an answer to Lupin’s counterclaims on February 1, 2017. We and Eisai Inc. are seeking a determination from the court that, among other things, Lupin has infringed our patents, Lupin’s ANDA for 10 mg lorcaserin hydrochloride tablets should not be approved until the expiration date of our patents, and Lupin should be enjoined from commercializing a product that infringes our patents. Trial is currently scheduled for April 15, 2019. The parties are currently in the fact discovery phase of the case. We cannot predict the ultimate outcome of any proceeding. 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 (lorcaserin hydrochloride extended-release tablets, 20 mg). In its notification, Teva alleged that no valid, enforceable claim of any of the patents that are listed in the Orange Book for BELVIQ XR will be infringed by Teva’s manufacture, importation, use, sale or offer for sale of the product described in its ANDA. Teva is accused of infringing U.S. Patent Nos. 6,953,787; 7,514,422; 7,977,329; 8,207,158 and 8,273,734. In accordance with the Hatch-Waxman Act, as a result of filing a patent infringement lawsuit within 45 days of receipt of Teva’s notification, the FDA cannot approve Teva’s ANDA any earlier than 7.5 years from NDA approval unless a District Court finds that all of the asserted claims of the patents-in-suit are invalid, unenforceable or not infringed. On April 18, 2017, Teva filed an amended answer, defenses and counterclaims to the March 6, 2017 complaint. We and Eisai Inc. are seeking a determination from the court that, among other things, Teva has infringed our patents, Teva’s ANDA should not be approved until the expiration date of our patents, and Teva should be enjoined from commercializing a product that infringes our patents. On May 1, 2017, the Teva and Lupin actions were consolidated for all purposes and will follow the case schedule that was previously entered in the Lupin action. We and Eisai Inc. filed an answer to Teva’s amended counterclaims on May 3, 2017. On or about October 16, 2017, we and Eisai Inc. received a “Paragraph IV certification” notification from Teva alleging that no valid, enforceable claim of U.S. Patent No. 9,770,455, which was listed in the Orange Book for BELVIQ and BELVIQ XR We and Eisai Inc. also received a “Paragraph IV certification” notification from Lupin alleging that no valid, enforceable claim of any of the patents that are listed in the Orange Book for BELVIQ and BELVIQ XR will be infringed by Lupin’s manufacture, importation, use, sale or offer for sale of the product described in its ANDA for 20 mg lorcaserin hydrochloride extended-release tablets. Because Lupin is not the first applicant to submit a substantially complete application containing a Paragraph IV certification for approval of a generic equivalent of BELVIQ XR, absent extenuating circumstances, Lupin would not be able to launch its 20 mg lorcaserin hydrochloride extended-release tablets before Teva was able to launch its respective product. |
Restructuring Activities
Restructuring Activities | 12 Months Ended |
Dec. 31, 2017 | |
Restructuring And Related Activities [Abstract] | |
Restructuring Activities | 13. Restructuring Activities In the fourth quarter of 2015, we committed to a reduction in our US workforce of approximately 35%, or approximately 80 employees, which we substantially completed by the end of 2015. As a result of this workforce reduction, we recorded a restructuring charge in the fourth quarter of 2015 for termination benefits, including severance and other benefits, of $3.3 million, which was paid by December 31, 2016. In the second quarter of 2016, we committed to a reduction in our US workforce of approximately 73%, or approximately 100 employees, which we substantially completed in the third quarter of 2016. As a result of this workforce reduction, we recorded a restructuring charge in the second quarter of 2016 of $6.1 million for termination benefits, including severance and other benefits. Included within this amount is non-cash, share-based compensation expense of $1.0 million related to the accelerated vesting of stock options and the extension of the exercise period of vested options for employees impacted by the workforce reduction. At December 31, 2016, substantially all of this charge had been paid. |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data (Unaudited) | 14. Quarterly Financial Data (Unaudited) The following tables present selected quarterly financial data for the years presented, in thousands, except per share data: 2017 Quarter ended December 31 Quarter ended September 30 Quarter ended June 30 Quarter ended March 31 Revenues $ 15,364 $ 2,415 $ 1,898 $ 1,660 Operating costs and expenses 28,964 36,626 24,850 22,864 Net income (loss): Loss from continuing operations $ (14,270 ) $ (35,270 ) $ (23,763 ) $ (22,551 ) Income from discontinued operations 315 2,606 147 54 $ (13,955 ) $ (32,664 ) $ (23,616 ) $ (22,497 ) Amounts attributable to stockholders of Arena: Loss from continuing operations $ (13,999 ) $ (34,959 ) $ (23,464 ) $ (22,107 ) Income from discontinued operations 315 2,606 147 54 $ (13,684 ) $ (32,353 ) $ (23,317 ) $ (22,053 ) Net income (loss) attributable to stockholders of Arena per share, basic and diluted: Continuing operations $ (0.36 ) $ (0.93 ) $ (0.77 ) $ (0.90 ) Discontinued operations 0.01 0.07 — — $ (0.35 ) $ (0.86 ) $ (0.77 ) $ (0.90 ) 2016 Quarter December 31 Quarter ended September 30 Quarter ended June 30 Quarter ended March 31 Revenues $ 69,224 $ 14,637 $ 4,219 $ 4,083 Operating costs and expenses 18,548 24,534 31,522 22,822 Net income (loss): Income (loss) from continuing operations $ 48,925 $ (12,257 ) $ (28,789 ) $ (20,179 ) Income (loss) from discontinued operations (10,611 ) (222 ) 1,606 (1,369 ) $ 38,314 $ (12,479 ) $ (27,183 ) $ (21,548 ) Amounts attributable to stockholders of Arena: Income (loss) from continuing operations $ 49,183 $ (12,135 ) $ (28,789 ) $ (20,179 ) Income (loss) from discontinued operations (10,611 ) (222 ) 1,606 (1,369 ) $ 38,572 $ (12,357 ) $ (27,183 ) $ (21,548 ) Net income (loss) attributable to stockholders of Arena per share, basic: Continuing operations $ 2.02 $ (0.50 ) $ (1.18 ) $ (0.83 ) Discontinued operations (0.43 ) (0.01 ) 0.06 (0.06 ) $ 1.59 $ (0.51 ) $ (1.12 ) $ (0.89 ) Net income (loss) attributable to stockholders of Arena per share, diluted: Continuing operations $ 2.02 $ (0.50 ) $ (1.18 ) $ (0.83 ) Discontinued operations (0.44 ) (0.01 ) 0.06 (0.06 ) $ 1.58 $ (0.51 ) $ (1.12 ) $ (0.89 ) |
Beacon Discovery, Inc.
Beacon Discovery, Inc. | 12 Months Ended |
Dec. 31, 2017 | |
Variable Interest Entity Disclosure [Abstract] | |
Beacon Discovery, Inc. | 15. Beacon Discovery, Inc. On September 1, 2016, we entered into a We entered into an agreement, or License and Collaboration Agreement, with Beacon, pursuant to which we transferred certain equipment to Beacon and granted Beacon a non-exclusive, non-assignable and non-sublicensable license to certain database information relating to compounds, receptors and pharmacology, and transferred certain equipment to Beacon. Beacon will seek to engage global partners to facilitate discovery and development. Beacon has agreed to assign to us any intellectual property relating to our existing research and development programs developed in the course of performing research for us, and grant us a non-exclusive license to any intellectual property developed outside the course of performing work for us that is reasonably necessary or useful for developing or commercializing the products under our research and development programs. We are also entitled to rights of negotiation and rights of first refusal to potentially obtain licenses to compounds discovered and developed by Beacon. In addition, we are entitled to receive (i) a percentage of any revenue received by Beacon on or after the second anniversary of the effective date of the agreement from any third party pursuant to a third-party license, including upfront payments, milestone payments and royalties; (ii) single-digit royalties on the aggregate net sales of any related products sold by Beacon and its affiliates; and (iii) in the event that Beacon is sold, a percentage of the consideration for such sale transaction. We entered a services agreement with Beacon, or Master Services Agreement, pursuant to which Beacon performs certain research services for us. We also entered into a separate services agreement with Beacon, or Beacon Services Agreement, pursuant to which Beacon now performs our research obligations under our December 2015 agreement with Boehringer Ingelheim. In consideration for performing these research obligations, Beacon is entitled to receive the applicable FTE payments that are paid to us by Boehringer Ingelheim for the research services and certain milestone payments. We also entered into a sublease agreement, or Sublease, with Beacon, pursuant to which we sublease approximately 15,000 square feet of laboratory, office and meeting room space to Beacon until August 2021. Beacon can defer payments due to us under the Sublease by increasing the outstanding principal amount under a secured promissory note, or Note, we issued to Beacon. The outstanding principal amount and all accrued or unpaid interest thereon (calculated at a simple interest rate of 7% per annum) shall be due and payable on the earlier of (i) August 31, 2022 or (ii) Beacon receiving cumulative cash proceeds of $10 million from the sale of equity, issuance of debt or third-party license revenue. As Beacon’s equity investment at risk is not sufficient to permit Beacon to finance its activities without subordinated financial support, Beacon is considered a variable interest entity in which we hold a significant variable interest pursuant to the License and Collaboration Agreement. We do not own any equity interest in Beacon; however, as the agreements described above provided us the controlling financial interest in Beacon until December 2017, we consolidated Beacon’s balances and activity within our consolidated financial statements until December 2017 as we were determined to be the primary beneficiary of Beacon. Pursuant to a contract Beacon entered into with a third party in December 2017 which provided Beacon with a certain amount of upfront funding, we determined we no longer held the controlling financial interest as of that date and, therefore, deconsolidated Beacon from our consolidated financial statements as we were no longer deemed to be the primary beneficiary. Our consolidated financial statements for the year ended December 31, 2017, includes Beacon’s results of operations and cash flows until the December 2017 deconsolidation. As of December 31, 2017, Beacon’s total assets of $1.0 million, total liabilities of $1.8 million and total stockholders’ deficit of $0.8 million are excluded from our consolidated balance sheet. For the year ended December 31, 2017, Beacon recognized revenues of $2.7 million of which less than $0.1 million was earned from third parties and is included on our consolidated statement of operations. For the year ended December 31, 2017, Beacon incurred a net and comprehensive loss of $1.3 million which is fully presented as net loss attributable to noncontrolling interest in consolidated variable interest entity in our consolidated statement of operations and comprehensive loss as we do not own any equity interest in Beacon. As of December 31, 2017, the following balances pertaining to our transactions with Beacon are included in our consolidated balance sheet, in thousands: Description Classification Prepaid costs under the Master Services Agreement Prepaid expenses and other current assets $ 368 Receivable under the Sublease and the Note Other non-current assets 477 Payable under the Beacon Services Agreement Accounts payable and other accrued liabilities 139 We believe that our maximum exposure to loss as a result of our involvement with Beacon is limited to the receivable due to us from Beacon under the Sublease and the Note. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | 16. Subsequent Events See Notes 1 and 5 regarding the Sale Agreement with Siegfried to divest our Manufacturing Operations and . |
The Company and Summary of Si23
The Company and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with the US generally accepted accounting principles, or GAAP, and reflect all of our activities, including those of our wholly owned subsidiaries. All material intercompany accounts and transactions have been eliminated in consolidation. The accompanying consolidated financial statements also include the activity of Beacon, a variable interest entity in which we had a controlling financial interest until December 2017 at which point we deconsolidated Beacon (see Note 15). 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 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 split of our issued and outstanding common stock. The accompanying 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 consolidated financial statements have been retrospectively 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. As a result of the anticipated divestiture of our Manufacturing Operations, we have retrospectively revised the consolidated statements of operations and cash flows for the years ended December 31, 2016 and 2015 and the consolidated balance sheet as of December 31, 2016, to reflect the operations and cash flows of the Manufacturing Operations as discontinued operations and the related assets and liabilities as held for sale. |
Liquidity | Liquidity As of December 31, 2017, we had cash and cash equivalents and available-for-sale investments of approximately $271.3 million. We believe our cash and cash equivalents and investments will be sufficient to fund our operations for at least the next 12 months from the date these consolidated financial statements are issued. We will require substantial cash to achieve our objectives of discovering, developing and commercializing drugs, as 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 will adopt the new revenue standard effective January 1, 2018, using the modified retrospective method with the cumulative effect of the change reflected in retained earnings as of January 1, 2018. As of December 31, 2017, we have completed our assessment of the new revenue standard and its impact to our consolidated financial statements and related disclosures, except for the impact related to our contracts with Eisai. We have completed an analysis of existing contracts with our other customers and assessed the differences in accounting for such contracts under ASU No. 2014-09 compared with current revenue accounting standards. In the future, we may recognize revenue related to potential future milestones earlier than under the current standard. Currently, we defer recognition of milestones until the milestone is achieved. Under the new revenue standard, the receipt of such milestones will be accounted for as variable consideration, which may result in revenue being recognized earlier provided it is probable that a significant reversal in revenue will not occur when the uncertainty associated with the milestone is resolved. Adoption of the new revenue standard will also result in additional revenue-related disclosures in the footnotes to our consolidated financial statements. With the exception of our contracts with Eisai, we do not expect the adoption of ASU No. 2014-09 to have a material impact on our consolidated financial statements. Regarding our contracts with Eisai, we are in the process of analyzing previous contract modifications and their impact on the identification of satisfied and unsatisfied performance obligations, the determination of the transaction price, and the allocation of the transaction price to the satisfied and unsatisfied performance obligations. Accordingly, we are not yet able to estimate the impact the adoption of ASU No. 2014-09 will have on our consolidated financial statements. 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 modified In November 2016, the FASB issued ASU No. 2016-18, Restricted Cash In May 2017, the FASB issued ASU No. 2017-09, Scope of Modification Accounting No. 2017-09 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 expect the adoption of ASU 2017-09 to 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 conformity 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. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of cash and highly liquid investments with remaining maturities of three months or less when purchased. |
Available-for-Sale Investments | Available-for-Sale Investments We define investments as income-yielding securities that can be readily converted to cash, and classify such investments as available-for-sale. We carry these securities at fair value, and report unrealized gains and losses as a separate component of accumulated other comprehensive income or loss. The cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization and accretion is included in interest income. Realized gains and losses and declines in securities judged to be other than temporary are included in other income or expense. The cost of securities sold is based on the specific identification method. Interest and dividends on available |
Concentrations of Risk | Concentrations of Risk Financial instruments, which potentially subject us to concentrations of credit risk, consist primarily of cash and cash equivalents and available-for-sale investments. 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 or 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. Our customers are typically other biopharmaceutical companies to which we license our intellectual property, or sell research and development services or other services under licensing or collaboration agreements. For the year ended December 31, 2017, Everest, Boehringer Ingelheim and Axovant accounted for 56.2%, 23.8%, and 10.5%, respectively, of our total revenues. For the years ended December 31, 2016, and 2015, more than 90% of our annual revenue was from Eisai and other BELVIQ distributors. As of December 31, 2017, Eisai, Axovant and Boehringer Ingelheim accounted for 61.1%, 17.6%, and 14.8%, respectively of our accounts receivable. As of December 31, 2016, Boehringer Ingelheim and Axovant accounted for 50.4% and 48.9%, respectively of our accounts receivable. We monitor our customers' financial credit worthiness in order to assess and respond to any changes in their credit profile. During the years ended December 31, 2017, 2016, and 2015, we did not record any write-offs or reserves against accounts receivable. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost and depreciated over the estimated useful lives of the assets (generally 3 to 15 years) using the straight-line method. Buildings are stated at cost and depreciated over an estimated useful life of approximately 20 years using the straight-line method. Leasehold improvements are stated at cost and amortized over the shorter of the estimated useful lives of the assets or the lease term using the straight-line method. Capital improvements are stated at cost and amortized over the estimated useful lives of the underlying assets using the straight-line method . |
Long-lived Assets | Long-lived Assets If indicators of impairment exist, we assess the recoverability of the affected long-lived assets by determining whether the carrying value of such assets can be recovered through undiscounted cash flows. If impairment is indicated, we measure the impairment loss by comparing the fair value to the carrying value of the asset. |
Deferred Rent | Deferred Rent For financial reporting purposes, rent expense and rental income are recognized on a straight-line basis over the term of the underlying lease or sublease. The difference between rent expense or rental income and amounts paid under lease agreements is recorded as an asset or a liability in our consolidated balance sheets. |
Foreign Currency | Foreign Currency The functional currency of our wholly owned subsidiaries in Switzerland, Arena GmbH and APD GmbH is the Swiss franc. Accordingly, all assets and liabilities of these subsidiaries are translated to US dollars based on the applicable exchange rate on the balance sheet date. Revenue and expense components are translated to US dollars at weighted-average exchange rates in effect during the period. Gains and losses resulting from foreign currency translation are reported as a separate component of accumulated other comprehensive income or loss in the equity section of our consolidated balance sheets. Foreign currency transaction gains and losses are primarily the result of remeasuring US dollar-denominated receivables and payables at Arena GmbH. Foreign currency transaction gains and losses recorded by Arena GmbH are included in net income (loss) from discontinued operations. |
Share-based Compensation | Share-based Compensation Our share-based awards are measured at fair value and recognized over the requisite service or performance period. The fair value of each stock option is estimated on the date of grant using the Black-Scholes option pricing model, based on the market price of the underlying common stock, expected life, expected stock price volatility and expected risk-free interest rate. Expected volatility is computed using a combination of historical volatility for a period equal to the expected term and implied volatilities from traded options to buy our common stock, with historical volatility being weighted at 75%. The expected life of options is determined based on historical experience of similar awards, giving consideration to the contractual terms of the share-based awards, vesting schedules and post-vesting terminations. The risk-free interest rates are based on the US Treasury yield curve, with a remaining term approximately equal to the expected term used in the option pricing model. The fair value of each restricted stock unit award is estimated based on the market price of the underlying common stock on the date of the grant. The fair value of restricted stock unit awards that include market-based performance conditions is estimated on the date of grant using a Monte Carlo simulation model, based on the market price of the underlying common stock, expected performance measurement period, expected stock price volatility and expected risk-free interest rate. Prior to 2017, we estimated forfeitures at the time of grant and revised our estimate in subsequent periods if actual forfeitures differed from those estimates. Beginning January 1, 2017, in accordance with ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting . he adoption of ASU No. 2016-09 resulted in a $44,000 cumulative-effect adjustment to increase our accumulated deficit and additional paid-in capital as of January 1, 2017. |
Revenue Recognition | Revenue Recognition Our revenues to date have been generated primarily through collaboration agreements. Our collaboration agreements may contain multiple elements including commercialization rights, services (joint steering committee and research and development services) and manufactured products. Consideration we receive under these arrangements may include upfront payments, research and development funding, cost reimbursements, milestone payments, payments for product sales and royalty payments. We recognize revenue when (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred and title has passed, (iii) the price is fixed or determinable and (iv) collectability is reasonably assured. Any advance payments we receive in excess of amounts earned are classified as deferred revenues. We evaluate deliverables in a multiple-element arrangement to determine whether each deliverable represents a separate unit of accounting. A deliverable constitutes a separate unit of accounting when it has standalone value to the customer. If the delivered element does not have standalone value without one of the undelivered elements in the arrangement, we combine such elements and account for them as a single unit of accounting. We allocate the consideration to each unit of accounting at the inception of the arrangement based on the relative selling price. To determine the selling price of a separate deliverable, we use the hierarchy as prescribed in Accounting Standards Codification Topic 605-25 based on vendor-specific objective evidence, or VSOE, third-party evidence, or TPE, or best estimate of selling price, or BESP. VSOE is based on the price charged when the element is sold separately and is the price actually charged for that deliverable. TPE is determined based on third-party evidence for a similar deliverable when sold separately. BESP is the estimated selling price at which we would transact a sale if the elements of collaboration and license arrangements were sold on a stand-alone basis to the buyer. Non-refundable upfront payments received under our collaboration agreements for commercialization rights are deferred if such rights are not deemed to have standalone value without ongoing services which may be required under the agreement. If deferred, such amounts are recognized as revenues on a straight-line basis over the period in which we expect to perform the services. Amounts we receive as reimbursement for our research and development expenditures are recognized as revenue as the services are performed. Under the milestone method, we recognize revenue that is contingent upon the achievement of a substantive milestone in its entirety in the period in which the milestone is achieved. A milestone is an event (i) that can be achieved in whole or in part on either our performance or on the occurrence of a specific outcome resulting from our performance, (ii) for which there is substantive uncertainty at the date the arrangement is entered into that the event will be achieved and (iii) that would result in additional payments being due us. A milestone payment is considered substantive when the consideration payable to us for each milestone (a) is consistent with our performance necessary to achieve the milestone or the increase in value to the collaboration resulting from our performance, (b) relates solely to our past performance and (c) is reasonable relative to all of the other deliverables and payments under the arrangement. In making this assessment, we consider all facts and circumstances relevant to the arrangement, including factors such as the scientific, regulatory, commercial and other risks that must be overcome to achieve the respective milestone, the level of effort and investment required to achieve the respective milestone and whether any portion of the milestone consideration is related to future performance or deliverables. Other contingent-based payments received are recognized when earned. |
Research and Development Expenses | Research and Development Expenses Research and development expenses, which consist primarily of salaries and other personnel costs, clinical trial costs and preclinical study fees, manufacturing costs for non-commercial products, and the development of earlier-stage programs and technologies, are expensed as incurred when these expenditures have no alternative future uses. We accrue clinical trial expenses based on work performed. In determining the amount to accrue, we rely on estimates of total costs incurred based on enrollment, the completion of trials and other events. We follow this method because we believe reasonably dependable estimates of the costs applicable to various stages of a clinical trial can be made. However, the actual costs and timing of clinical trials are uncertain, subject to risks and may change depending on a number of factors. Differences between the actual clinical trial costs and the estimated clinical trial costs that we have accrued in any prior period are recognized in the subsequent period in which the actual costs become known. Historically, these differences have not been material; however, material differences could occur in the future. Payments made to reimburse collaborators for our share of their research and development activities are recorded as research and development expenses, and are recognized as the work is performed. |
Comprehensive Loss | Comprehensive Loss Comprehensive loss is defined as the change in equity during a period from transactions and other events and circumstances from non-owner sources. We report components of comprehensive loss in the period in which they are recognized. For the year ended December 31, 2017, comprehensive loss consisted of net loss, foreign currency translation gains and losses, and unrealized gains and losses related to available-for-sale investments. For the years ended 2016, and 2015, comprehensive loss consisted of net loss and foreign currency translation gains and losses. |
Income (Loss) Per Share | Income (Loss) Per Share We calculate basic and diluted loss from continuing operations, income (loss) from discontinued operations and net loss per share using the weighted-average number of shares of common stock outstanding during the period. We have a loss from continuing operations for the years ended December 31, 2017, 2016, and 2015, in addition to excluding potentially dilutive out-of-the money securities, we have excluded from our calculation of income (loss) per share all potentially dilutive in-the-money (i) stock options, (ii) restricted stock unit awards, or RSUs, (iii) Total Stockholder Return, or TSR, performance restricted stock unit, or PRSU, awards, (iv) unvested restricted stock in our deferred compensation plan and (v) our previously outstanding warrants, and our diluted net loss per share is the same as our basic net loss per share. The table below presents the weighted-average number of potentially dilutive securities that were excluded from our calculation of diluted income (loss) per share for the years presented, in thousands. Years ended December 31, 2017 2016 2015 Stock options 3,664 2,495 1,703 Warrants — — 2 RSUs and unvested restricted stock 3 21 55 Total 3,667 2,516 1,760 Because the market condition for the PRSUs was not satisfied at December 31, 2017, 2016, and 2015, such securities are excluded from the table above. |
Income Taxes | Income Taxes We use the asset and liability method of accounting for income taxes. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Our deferred tax assets and liabilities are determined using the enacted tax rates expected to be in effect for the years in which those tax assets are expected to be realized. The realization of our deferred tax assets is dependent upon our ability to generate sufficient future taxable income. We establish a valuation allowance when it is more-likely-than-not the future realization of all or some of the deferred tax assets will not be achieved. The evaluation of the need for a valuation allowance is performed on a jurisdiction-by-jurisdiction basis, and includes a review of all available evidence, both positive and negative. The impact of an uncertain income tax position is recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. |
Fair Value Measurements | 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 Company and Summary of Si24
The Company and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Potentially Dilutive Securities Excluded from Calculation of Diluted Income (Loss) Per Share | The table below presents the weighted-average number of potentially dilutive securities that were excluded from our calculation of diluted income (loss) per share for the years presented, in thousands. Years ended December 31, 2017 2016 2015 Stock options 3,664 2,495 1,703 Warrants — — 2 RSUs and unvested restricted stock 3 21 55 Total 3,667 2,516 1,760 |
Fair Value Disclosures (Tables)
Fair Value Disclosures (Tables) | 12 Months Ended |
Dec. 31, 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 December 31, 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) $ 48,750 $ 48,750 $ — $ — US government and government agency notes(2) 50,335 50,335 — — Corporate debt instruments(2) 94,639 — 94,639 — 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 the accompanying (2) Included in either cash and cash equivalents or available-for-sale investments in the accompanying consolidated balance sheet. |
Investments, Available-for-Sa26
Investments, Available-for-Sale (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Investments Debt And Equity Securities [Abstract] | |
Schedule of Investments, Available-for-Sale | Investments, available-for-sale, consisted of the following at December 31, 2017, in thousands: Maturity in years Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value US government and government agency notes Less than 1 $ 34,873 $ — $ (8 ) $ 34,865 Corporate debt securities Less than 1 53,438 — (63 ) 53,375 Short-term investments, available-for-sale $ 88,311 $ — $ (71 ) $ 88,240 US government and government agency notes 1 - 5 $ — $ — $ — $ — Corporate debt securities 1 - 5 24,304 — (62 ) 24,242 Investments, available-for-sale $ 24,304 $ — $ (62 ) $ 24,242 |
Balance Sheet Details (Tables)
Balance Sheet Details (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Balance Sheet Related Disclosures [Abstract] | |
Land, Property and Equipment, Net | Land, property and equipment, net consisted of the following, in thousands: December 31, 2017 2016 Land $ 7,650 $ 7,650 Building and capital improvements 54,584 54,584 Leasehold improvements 17,769 17,769 Machinery and equipment 1,737 13,181 Computers and software 4,890 4,890 Furniture and office equipment 1,614 1,563 88,244 99,637 Less accumulated depreciation and amortization (58,113 ) (64,528 ) Land, property and equipment, net $ 30,131 $ 35,109 |
Accounts Payable and Other Accrued Liabilities | Accounts payable and other accrued liabilities consisted of the following, in thousands: December 31, 2017 2016 Accounts payable $ 1,599 $ 1,295 Accrued compensation 5,255 3,703 Other accrued liabilities 1,062 678 Total accounts payable and other accrued liabilities $ 7,916 $ 5,676 |
Manufacturing Operations Held28
Manufacturing Operations Held for Sale (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Discontinued Operations And Disposal Groups [Abstract] | |
Summary of Discontinued Operations for Periods Presented in Consolidated Statements of Operations and Assets and Liabilities Classified as Held for Sale | The following table summarizes the results of discontinued operations for the periods presented in the consolidated statements of operations for the years ended December 31, 2017, 2016, and 2015, in thousands: Years ended December 31, Revenues 2017 2016 2015 Net product sales $ 9,189 $ 26,349 $ 19,726 Other collaboration revenue 6,671 1,334 952 Toll manufacturing 3,179 4,129 4,250 Total revenues 19,039 31,812 24,928 Operating costs and expenses Cost of product sales 7,472 9,297 8,590 Cost of toll manufacturing 4,756 6,044 4,585 Research and development 643 2,643 5,128 General and administrative 1,672 3,714 5,685 Impairment of long-lived assets — 21,766 — Restructuring charges — 231 626 Total operating costs and expenses 14,543 43,695 24,614 Income (loss) from operations 4,496 (11,883 ) 314 Other income (expense), net (1,374 ) 1,287 2,414 Income (loss) from discontinued operations $ 3,122 $ (10,596 ) $ 2,728 The following table summarizes the assets and liabilities of the Manufacturing Operations which are classified as held for sale as of December 31, 2017 and 2016, in thousands: December 31, 2017 2016 Assets Current assets: Accounts receivable $ 813 $ 19,589 Inventories 6,949 6,708 Prepaid expenses and other current assets 634 138 Total current assets(1) 26,435 Land, property and equipment, net 7,511 8,719 Intangible assets, net 1,233 2,357 Other assets — 95 Total non-current assets(1) 11,171 Total assets of disposal group held for sale $ 17,140 $ 37,606 Liabilities Current liabilities: Accounts payable and other accrued liabilities $ 2,145 $ 6,440 Payable to Eisai — 9,074 Deferred revenues 25,450 30,878 Total liabilities of disposal group held for sale (all current) $ 27,595 $ 46,392 (1) The assets and liabilities of the Manufacturing Operations classified as held for sale are classified as current in the consolidated balance sheet at December 31, 2017, because it is probable that the sale will occur and proceeds will be collected within one year. |
Commitments (Tables)
Commitments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Operating Leased Assets [Line Items] | |
Future Minimum Lease Payments | At December 31, 2017, the future minimum lease payments under our existing financing and operating lease obligations are as follows, in thousands: Year ending December 31, Financing Obligations Operating Leases 2018 $ 8,930 $ 1,299 2019 8,053 1,396 2020 8,254 1,280 2021 8,461 976 2022 8,672 1,000 Thereafter 40,939 4,724 Total minimum lease payments 83,309 $ 10,675 Less amounts representing interest (31,551 ) Add amounts representing residual value 9,990 Lease financing obligations 61,748 Less current portion (4,000 ) $ 57,748 |
Sublease Agreement | |
Operating Leased Assets [Line Items] | |
Expected Minimum Rental Payments to be Received under Sublease | Expected minimum rental payments to be received under the sublease are as follows: Year ending December 31, 2018 $ 1,205 2019 1,526 2020 1,567 2021 1,551 2022 1,476 Thereafter 7,076 Total $ 14,401 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of Stock Option Activity | The following table summarizes our stock option activity under the Prior Plans and the 2017 LTIP, or collectively, our Equity Compensation Plans, for the year ended December 31, 2017, in thousands (except per share data): Options Weighted- Average Exercise Price Weighted-Average Remaining Contractual Term (in years) Aggregate Intrinsic Value Outstanding at December 31, 2016 2,520 $ 30.30 Granted 2,241 $ 16.53 Exercised (323 ) $ 16.71 Forfeited/cancelled/expired (683 ) $ 47.24 Outstanding at December 31, 2017 3,755 $ 20.00 5.46 $ 60,003 Vested and expected to vest at December 31, 2017 3,755 $ 20.00 5.46 $ 60,003 Vested and exercisable at December 31, 2017 1,094 $ 27.35 4.01 $ 14,385 |
Weighted-Average Assumptions and Estimated Fair Value of Stock Options | The table below sets forth the weighted-average assumptions and estimated fair value of stock options we granted under our Equity Compensation Plans during the years presented: Years ended December 31, 2017 2016 2015 Risk-free interest rate 1.9 % 1.4 % 1.8 % Dividend yield 0 % 0 % 0 % Expected volatility 69 % 79 % 80 % Expected life (years) 4.58 4.81 6.08 Weighted-average estimated fair value per share of stock options granted $ 9.17 $ 10.17 $ 25.48 |
Share Based Compensation Expense | We recognized share-based compensation expense as follows for the years presented, in thousands, except per share data: Years ended December 31, 2017 2016 2015 Research and development $ 1,945 $ 5,596 $ 7,512 General and administrative 5,925 4,447 6,458 Restructuring charges — 1,032 142 Discontinued operations 120 42 351 Total share-based compensation expense $ 7,990 $ 11,117 $ 14,463 Impact on net loss per share, basic and diluted $ 0.24 $ 0.46 $ 0.60 |
Total Unrecognized Estimated Compensation Expense | The table below sets forth our total unrecognized estimated compensation expense at December 31, 2017, by type of award and the weighted-average remaining requisite service period over which such expense is expected to be recognized: Unrecognized Expense (in thousands) Remaining Weighted-Average Recognition Period (in years) Unvested stock options $ 20,311 2.89 PRSUs 55 0.16 RSUs 22 0.96 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Summary of Loss Before Provision (Benefit) for Income Taxes by Region | The following table summarizes our loss attributable to stockholders of Arena before benefit for income taxes by region for the years presented, in thousands: Years ended December 31, 2017 2016 2015 United States $ (62,109 ) $ (10,268 ) $ (64,109 ) Foreign (29,298 ) (12,248 ) (43,870 ) Total loss attributable to stockholders of Arena before income taxes $ (91,407 ) $ (22,516 ) $ (107,979 ) |
Reconciliation of Provision (Benefit) for Income Taxes at Statutory Federal Rate to Provision (Benefit) for Income Taxes | Our effective income tax rate differs from the statutory federal rate of 34% for the years presented due to the following, in thousands: Years ended December 31, 2017 2016 2015 Benefit for income taxes at statutory federal rate $ (32,140 ) $ (4,053 ) $ (37,641 ) Change in valuation allowance due to tax reform 96,333 — — Change in federal and foreign valuation allowance (68,604 ) (3,867 ) 22,240 Permanent differences and other (782 ) 3,412 2,349 Share-based compensation expense 7,071 4,001 1,820 Foreign losses at lower effective rates 1,428 3,944 15,041 Research and development and Orphan Drug credits (3,306 ) (3,437 ) (3,647 ) Gain from valuation of derivative liabilities — — (162 ) Benefit for income taxes $ — $ — $ — |
Components of Net Deferred Tax Assets | The components of our net deferred tax assets are as follows, in thousands: December 31, 2017 2016 Deferred tax assets: Federal and California NOL carryforwards $ 179,323 $ 255,317 Federal and California research and development credit carryforwards 61,272 53,059 Foreign NOL carryforwards 15,425 4,238 Share-based compensation expense 4,884 10,395 Depreciation 3,896 5,441 Deferred revenues 3,554 9,357 Other, net 5,758 5,164 Total deferred tax assets 274,112 342,971 Deferred tax liabilities — — Net deferred tax assets 274,112 342,971 Valuation allowance (274,112 ) (342,971 ) Net deferred tax liabilities $ — $ — |
Reconciliation of Unrecognized Tax Benefits | The following table reconciles the beginning and ending amount of unrecognized tax benefits for the years presented, in thousands: Years ended December 31, 2017 2016 2015 Gross unrecognized tax benefits at the beginning of the year $ 5,906 $ 5,619 $ 5,214 Additions from tax positions taken in the current year 1,133 287 405 Additions from tax positions taken in prior years 723 — — Reductions from tax positions taken in prior years — — — Tax settlements — — — Gross unrecognized tax benefits at end of the year $ 7,762 $ 5,906 $ 5,619 |
Quarterly Financial Data (Una32
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Data | The following tables present selected quarterly financial data for the years presented, in thousands, except per share data: 2017 Quarter ended December 31 Quarter ended September 30 Quarter ended June 30 Quarter ended March 31 Revenues $ 15,364 $ 2,415 $ 1,898 $ 1,660 Operating costs and expenses 28,964 36,626 24,850 22,864 Net income (loss): Loss from continuing operations $ (14,270 ) $ (35,270 ) $ (23,763 ) $ (22,551 ) Income from discontinued operations 315 2,606 147 54 $ (13,955 ) $ (32,664 ) $ (23,616 ) $ (22,497 ) Amounts attributable to stockholders of Arena: Loss from continuing operations $ (13,999 ) $ (34,959 ) $ (23,464 ) $ (22,107 ) Income from discontinued operations 315 2,606 147 54 $ (13,684 ) $ (32,353 ) $ (23,317 ) $ (22,053 ) Net income (loss) attributable to stockholders of Arena per share, basic and diluted: Continuing operations $ (0.36 ) $ (0.93 ) $ (0.77 ) $ (0.90 ) Discontinued operations 0.01 0.07 — — $ (0.35 ) $ (0.86 ) $ (0.77 ) $ (0.90 ) 2016 Quarter December 31 Quarter ended September 30 Quarter ended June 30 Quarter ended March 31 Revenues $ 69,224 $ 14,637 $ 4,219 $ 4,083 Operating costs and expenses 18,548 24,534 31,522 22,822 Net income (loss): Income (loss) from continuing operations $ 48,925 $ (12,257 ) $ (28,789 ) $ (20,179 ) Income (loss) from discontinued operations (10,611 ) (222 ) 1,606 (1,369 ) $ 38,314 $ (12,479 ) $ (27,183 ) $ (21,548 ) Amounts attributable to stockholders of Arena: Income (loss) from continuing operations $ 49,183 $ (12,135 ) $ (28,789 ) $ (20,179 ) Income (loss) from discontinued operations (10,611 ) (222 ) 1,606 (1,369 ) $ 38,572 $ (12,357 ) $ (27,183 ) $ (21,548 ) Net income (loss) attributable to stockholders of Arena per share, basic: Continuing operations $ 2.02 $ (0.50 ) $ (1.18 ) $ (0.83 ) Discontinued operations (0.43 ) (0.01 ) 0.06 (0.06 ) $ 1.59 $ (0.51 ) $ (1.12 ) $ (0.89 ) Net income (loss) attributable to stockholders of Arena per share, diluted: Continuing operations $ 2.02 $ (0.50 ) $ (1.18 ) $ (0.83 ) Discontinued operations (0.44 ) (0.01 ) 0.06 (0.06 ) $ 1.58 $ (0.51 ) $ (1.12 ) $ (0.89 ) |
Beacon Discovery, Inc. (Tables)
Beacon Discovery, Inc. (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Beacon Discovery, Inc. | |
Variable Interest Entity [Line Items] | |
Summary of Balances Pertaining to Transactions Included in Consolidated Balance Sheet | As of December 31, 2017, the following balances pertaining to our transactions with Beacon are included in our consolidated balance sheet, in thousands: Description Classification Prepaid costs under the Master Services Agreement Prepaid expenses and other current assets $ 368 Receivable under the Sublease and the Note Other non-current assets 477 Payable under the Beacon Services Agreement Accounts payable and other accrued liabilities 139 |
The Company and Summary of Si34
The Company and Summary of Significant Accounting Policies - Additional Information (Detail) | 12 Months Ended | |||||
Dec. 31, 2017USD ($)Segmentshares | Dec. 31, 2016USD ($)shares | Dec. 31, 2015USD ($) | Mar. 31, 2018employee | Jun. 14, 2017shares | Jun. 13, 2017shares | |
Schedule Of Significant Accounting Policies [Line Items] | ||||||
Number of business segments | Segment | 1 | |||||
Reverse split of issued and outstanding common stock, description | one-for-ten | |||||
Reverse split of issued and outstanding common stock, ratio | 0.1 | |||||
Number of authorized shares of common stock | shares | 73,500,000 | 367,500,000 | 73,500,000 | 367,500,000 | ||
Cash and cash equivalents and available-for-sale investments | $ 271,300,000 | |||||
Write-offs or reserves against accounts receivable | $ 0 | $ 0 | $ 0 | |||
Weighted average volatility | 75.00% | |||||
ASU No. 2016-09 | ||||||
Schedule Of Significant Accounting Policies [Line Items] | ||||||
Cumulative-effect adjustment to increase our accumulated deficit and additional paid-in capital | $ 44,000 | |||||
Building | ||||||
Schedule Of Significant Accounting Policies [Line Items] | ||||||
Property and equipment, estimated useful life | 20 years | |||||
Minimum | ||||||
Schedule Of Significant Accounting Policies [Line Items] | ||||||
Property and equipment, estimated useful life | 3 years | |||||
Maximum | ||||||
Schedule Of Significant Accounting Policies [Line Items] | ||||||
Property and equipment, estimated useful life | 15 years | |||||
Sales Revenue, Net | Everest | ||||||
Schedule Of Significant Accounting Policies [Line Items] | ||||||
Concentrations of risk percentage | 56.20% | |||||
Sales Revenue, Net | Boehringer Ingelheim | ||||||
Schedule Of Significant Accounting Policies [Line Items] | ||||||
Concentrations of risk percentage | 23.80% | |||||
Sales Revenue, Net | Axovant | ||||||
Schedule Of Significant Accounting Policies [Line Items] | ||||||
Concentrations of risk percentage | 10.50% | |||||
Sales Revenue, Net | Eisai and other BELVIQ distributors | Minimum | ||||||
Schedule Of Significant Accounting Policies [Line Items] | ||||||
Concentrations of risk percentage | 90.00% | 90.00% | ||||
Accounts Receivable | Boehringer Ingelheim | ||||||
Schedule Of Significant Accounting Policies [Line Items] | ||||||
Concentrations of risk percentage | 14.80% | 50.40% | ||||
Accounts Receivable | Axovant | ||||||
Schedule Of Significant Accounting Policies [Line Items] | ||||||
Concentrations of risk percentage | 17.60% | 48.90% | ||||
Accounts Receivable | Eisai | ||||||
Schedule Of Significant Accounting Policies [Line Items] | ||||||
Concentrations of risk percentage | 61.10% | |||||
Siegfried | Scenario Forecast | ||||||
Schedule Of Significant Accounting Policies [Line Items] | ||||||
Number of employees expected to transfer | employee | 50 |
The Company and Summary of Si35
The Company and Summary of Significant Accounting Policies - Potentially Dilutive Securities Excluded From Calculation of Diluted Income (Loss) Per Share (Detail) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total antidilutive securities excluded from calculation of diluted net loss per share (shares) | 3,667 | 2,516 | 1,760 |
Stock options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total antidilutive securities excluded from calculation of diluted net loss per share (shares) | 3,664 | 2,495 | 1,703 |
Warrants | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total antidilutive securities excluded from calculation of diluted net loss per share (shares) | 2 | ||
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 per share (shares) | 3 | 21 | 55 |
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 | Dec. 31, 2017 | Dec. 31, 2016 |
Assets: | ||
Money market funds | $ 48,750 | $ 46,371 |
US government and government agency notes | 50,335 | |
Corporate debt instruments | 94,639 | |
Quoted Prices in Active Markets (Level 1) | ||
Assets: | ||
Money market funds | 48,750 | $ 46,371 |
US government and government agency notes | 50,335 | |
Significant Other Observable Inputs (Level 2) | ||
Assets: | ||
Corporate debt instruments | $ 94,639 |
Investments, Available-for-Sa37
Investments, Available-for-Sale - Schedule of Investments, Available-for-Sale (Detail) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Schedule Of Available For Sale Securities [Line Items] | |
Unrealized loss on available-for-sale investments | $ (133) |
Short-term investments, available-for-sale | |
Schedule Of Available For Sale Securities [Line Items] | |
Amortized Cost | 88,311 |
Unrealized loss on available-for-sale investments | (71) |
Estimated Fair Value | 88,240 |
Short-term investments, available-for-sale | US government and government agency notes | |
Schedule Of Available For Sale Securities [Line Items] | |
Amortized Cost | 34,873 |
Unrealized loss on available-for-sale investments | (8) |
Estimated Fair Value | 34,865 |
Short-term investments, available-for-sale | Corporate debt securities | |
Schedule Of Available For Sale Securities [Line Items] | |
Amortized Cost | 53,438 |
Unrealized loss on available-for-sale investments | (63) |
Estimated Fair Value | 53,375 |
Investments, available-for-sale | |
Schedule Of Available For Sale Securities [Line Items] | |
Amortized Cost | 24,304 |
Unrealized loss on available-for-sale investments | (62) |
Estimated Fair Value | $ 24,242 |
Investments, available-for-sale | US government and government agency notes | Minimum | |
Schedule Of Available For Sale Securities [Line Items] | |
Maturity in years | 1 year |
Investments, available-for-sale | US government and government agency notes | Maximum | |
Schedule Of Available For Sale Securities [Line Items] | |
Maturity in years | 5 years |
Investments, available-for-sale | Corporate debt securities | |
Schedule Of Available For Sale Securities [Line Items] | |
Amortized Cost | $ 24,304 |
Unrealized loss on available-for-sale investments | (62) |
Estimated Fair Value | $ 24,242 |
Investments, available-for-sale | Corporate debt securities | Minimum | |
Schedule Of Available For Sale Securities [Line Items] | |
Maturity in years | 1 year |
Investments, available-for-sale | Corporate debt securities | Maximum | |
Schedule Of Available For Sale Securities [Line Items] | |
Maturity in years | 5 years |
Balance Sheet Details - Land, P
Balance Sheet Details - Land, Property and Equipment, Net (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment [Line Items] | ||
Land, property and equipment, gross | $ 88,244 | $ 99,637 |
Less accumulated depreciation and amortization | (58,113) | (64,528) |
Land, property and equipment, net | 30,131 | 35,109 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Land, property and equipment, gross | 7,650 | 7,650 |
Building and capital improvements | ||
Property, Plant and Equipment [Line Items] | ||
Land, property and equipment, gross | 54,584 | 54,584 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Land, property and equipment, gross | 17,769 | 17,769 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Land, property and equipment, gross | 1,737 | 13,181 |
Computers and software | ||
Property, Plant and Equipment [Line Items] | ||
Land, property and equipment, gross | 4,890 | 4,890 |
Furniture and office equipment | ||
Property, Plant and Equipment [Line Items] | ||
Land, property and equipment, gross | $ 1,614 | $ 1,563 |
Balance Sheet Details - Account
Balance Sheet Details - Accounts Payable and Other Accrued Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Payables And Accruals [Abstract] | ||
Accounts payable | $ 1,599 | $ 1,295 |
Accrued compensation | 5,255 | 3,703 |
Other accrued liabilities | 1,062 | 678 |
Total accounts payable and other accrued liabilities | $ 7,916 | $ 5,676 |
Manufacturing Operations Held40
Manufacturing Operations Held for Sale - Additional Information (Detail) SFr in Millions | Mar. 09, 2018CHF (SFr) |
Arena Gmb H | Subsequent Event | |
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | |
Sale price of business in cash | SFr 4 |
Manufacturing Operations Held41
Manufacturing Operations Held for Sale - Summary of Discontinued Operations for Consolidated Statements of Operations (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenues | |||||||||||
Net product sales | $ 9,189 | $ 26,349 | $ 19,726 | ||||||||
Other collaboration revenue | 6,671 | 1,334 | 952 | ||||||||
Toll manufacturing | 3,179 | 4,129 | 4,250 | ||||||||
Total revenues | 19,039 | 31,812 | 24,928 | ||||||||
Operating costs and expenses | |||||||||||
Cost of product sales | 7,472 | 9,297 | 8,590 | ||||||||
Cost of toll manufacturing | 4,756 | 6,044 | 4,585 | ||||||||
Research and development | 643 | 2,643 | 5,128 | ||||||||
General and administrative | 1,672 | 3,714 | 5,685 | ||||||||
Impairment of long-lived assets | 21,766 | ||||||||||
Restructuring charges | 231 | 626 | |||||||||
Total operating costs and expenses | 14,543 | 43,695 | 24,614 | ||||||||
Income (loss) from operations | 4,496 | (11,883) | 314 | ||||||||
Other income (expense), net | (1,374) | 1,287 | 2,414 | ||||||||
Income (loss) from discontinued operations | $ 315 | $ 2,606 | $ 147 | $ 54 | $ (10,611) | $ (222) | $ 1,606 | $ (1,369) | $ 3,122 | $ (10,596) | $ 2,728 |
Manufacturing Operations Held42
Manufacturing Operations Held for Sale - Summary of Assets and Liabilities Classified as Held for Sale (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | ||
Current assets: | ||||
Accounts receivable | $ 813 | $ 19,589 | ||
Inventories | 6,949 | 6,708 | ||
Prepaid expenses and other current assets | 634 | 138 | ||
Total current assets | 17,140 | 26,435 | [1] | |
Land, property and equipment, net | 7,511 | 8,719 | ||
Intangible assets, net | 1,233 | 2,357 | ||
Other assets | 95 | |||
Total non-current assets | [1] | 11,171 | ||
Total assets of disposal group held for sale | 17,140 | 37,606 | ||
Current liabilities: | ||||
Accounts payable and other accrued liabilities | 2,145 | 6,440 | ||
Payable to Eisai | 9,074 | |||
Deferred revenues | 25,450 | 30,878 | ||
Total liabilities of disposal group held for sale (all current) | $ 27,595 | $ 46,392 | ||
[1] | The assets and liabilities of the Manufacturing Operations classified as held for sale are classified as current in the consolidated balance sheet at December 31, 2017, because it is probable that the sale will occur and proceeds will be collected within one year. |
Derivative Liabilities - Additi
Derivative Liabilities - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2014 | Aug. 31, 2008 | |
Derivative [Line Items] | |||
Issuance of warrant to purchase stock, number of shares | 110,634 | ||
Original exercise price of warrant ($ per share) | $ 77.10 | ||
Deerfield Acceleration Right | |||
Derivative [Line Items] | |||
Fair value of embedded liabilities | $ 0.5 | ||
Warrants | |||
Derivative [Line Items] | |||
Term of instrument | 7 years |
Commitments - Additional Inform
Commitments - Additional Information (Detail) $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Apr. 30, 2017 | Sep. 30, 2016Property | May 31, 2016Property | Dec. 31, 2017USD ($)Property | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Commitments [Line Items] | ||||||
Number of properties under sale and leaseback agreements | Property | 4 | |||||
Sale and leaseback transaction, interest expense | $ 6,100 | $ 6,400 | $ 6,700 | |||
Less amounts representing interest | $ 31,551 | |||||
Sale leaseback transaction, description | Through the remaining terms of the leases in fiscal year 2027 | |||||
Sale and leaseback transaction, total financing obligation | $ 61,748 | |||||
Add amounts representing residual value | 9,990 | |||||
Deposits related to leases | 700 | 700 | ||||
Rent expense | $ 1,500 | $ 1,200 | $ 1,100 | |||
Number of properties subleased | Property | 1 | |||||
Sublease commencement period | 2017-07 | 2016-08 | ||||
Sublease expiration period | 2027-05 | 2027-05 | ||||
Percentage of annual increase in monthly rental payment | 3.00% | 3.19% | ||||
Beacon Discovery, Inc. | ||||||
Commitments [Line Items] | ||||||
Number of properties subleased | Property | 1 | |||||
Sublease commencement period | 2016-09 | |||||
Sublease expiration period | 2021-08 | |||||
Properties under sale and leaseback agreements | ||||||
Commitments [Line Items] | ||||||
Percentage of annual increase in monthly rental payments | 2.50% | |||||
Properties under operating lease | CALIFORNIA | ||||||
Commitments [Line Items] | ||||||
Percentage of annual increase in monthly rental payments | 2.50% | |||||
Operating lease agreement expiration date | 2027-05 | |||||
Properties under operating lease | Zug, Switzerland | ||||||
Commitments [Line Items] | ||||||
Operating lease agreement expiration date | 2020-09 |
Commitments - Future Minimum Le
Commitments - Future Minimum Lease Payments (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Financing Obligations | ||
2,018 | $ 8,930 | |
2,019 | 8,053 | |
2,020 | 8,254 | |
2,021 | 8,461 | |
2,022 | 8,672 | |
Thereafter | 40,939 | |
Total minimum lease payments | 83,309 | |
Less amounts representing interest | (31,551) | |
Add amounts representing residual value | 9,990 | |
Lease financing obligations | 61,748 | |
Current portion of lease financing obligations | (4,000) | $ (3,518) |
Lease financing obligations, less current portion | 57,748 | $ 61,748 |
Operating Leases | ||
2,018 | 1,299 | |
2,019 | 1,396 | |
2,020 | 1,280 | |
2,021 | 976 | |
2,022 | 1,000 | |
Thereafter | 4,724 | |
Total minimum lease payments | $ 10,675 |
Commitments - Expected Minimum
Commitments - Expected Minimum Rental Payments to be Received under Sublease (Detail) - Sublease Agreement $ in Thousands | Dec. 31, 2017USD ($) |
Operating Leased Assets [Line Items] | |
2,018 | $ 1,205 |
2,019 | 1,526 |
2,020 | 1,567 |
2,021 | 1,551 |
2,022 | 1,476 |
Thereafter | 7,076 |
Total | $ 14,401 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) - USD ($) | Mar. 14, 2018 | Jul. 31, 2017 | Apr. 30, 2017 | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2013 | Apr. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Jun. 13, 2017 | Jan. 31, 2017 |
Stockholders Equity [Line Items] | ||||||||||||
Aggregate net proceeds from sale of common stock | $ 248,805,000 | $ 370,000 | $ 103,628,000 | |||||||||
Common stock closing price ($ per share) | $ 33.97 | |||||||||||
Intrinsic value of stock options exercised | $ 2,800,000 | $ 100,000 | $ 2,200,000 | |||||||||
Proceeds from stock option exercises | 5,400,000 | |||||||||||
Tax impact from exercise of stock options | $ 0 | |||||||||||
Total common stock issued under employee stock purchase plan (shares) | 2,236 | 14,140 | 32,795 | |||||||||
Performance restricted stock units | ||||||||||||
Stockholders Equity [Line Items] | ||||||||||||
Vesting period | 3 years | 3 years | 3 years | 3 years | ||||||||
Units granted (shares) | 74,500 | 69,500 | 78,000 | |||||||||
Multiplier of grant-date fair value for cap on number of PRSUs that may be granted | 600.00% | |||||||||||
Cap on percentage of funding if the absolute 3-year TSR is negative | 100.00% | |||||||||||
PRSU grant-date fair value | $ 3,400,000 | $ 5,000,000 | $ 5,900,000 | |||||||||
Performance restricted stock units | Subsequent Event | ||||||||||||
Stockholders Equity [Line Items] | ||||||||||||
Shares issued | 32,322 | |||||||||||
Equity Compensation Plans | ||||||||||||
Stockholders Equity [Line Items] | ||||||||||||
Common stock shares reserved for future issuance | 6,813,713 | |||||||||||
Long Term Incentive Plan Twenty Seventeen | ||||||||||||
Stockholders Equity [Line Items] | ||||||||||||
Number of shares authorized | 3,100,000 | |||||||||||
Stock options exercisable period | 7 years | |||||||||||
Long Term Incentive Plan Twenty Seventeen | Subsequent Event | ||||||||||||
Stockholders Equity [Line Items] | ||||||||||||
Additional stock options granted to our employees and directors | 2,088,625 | |||||||||||
Long Term Incentive Plan Twenty Seventeen | Other Than Stock Options And Stock Appreciation Rights | ||||||||||||
Stockholders Equity [Line Items] | ||||||||||||
Reduction in number of shares available for grant for every share issued, percentage | 160.00% | |||||||||||
Long Term Incentive Plan Twenty Seventeen | Restricted Stock Units (RSU) | ||||||||||||
Stockholders Equity [Line Items] | ||||||||||||
Increase in number of shares available for grant for every share released, percentage | 160.00% | |||||||||||
Long Term Incentive Plan Twenty Seventeen | Stock options | ||||||||||||
Stockholders Equity [Line Items] | ||||||||||||
Vesting percentage | 25.00% | |||||||||||
Vesting period | 4 years | |||||||||||
Remaining vesting period | 3 years | |||||||||||
Vesting description | Stock options granted under the 2017 LTIP generally vest over four years with 25% of the shares subject to each option vesting on the first anniversary of the grant date and the remainder of the shares vesting monthly over the following three years in equal installments | |||||||||||
2009 ESPP | ||||||||||||
Stockholders Equity [Line Items] | ||||||||||||
Maximum Percentage of Annual Compensation contributable to ESPP | 15.00% | |||||||||||
Maximum number of shares allowed to purchase per PURCHASE period | 625 | |||||||||||
Maximum ESPP offering period | 24 months | |||||||||||
ESPP terminated date | Jun. 30, 2017 | |||||||||||
Maximum | Performance restricted stock units | ||||||||||||
Stockholders Equity [Line Items] | ||||||||||||
Number of shares to be awarded as a percentage of target amounts | 200.00% | |||||||||||
Maximum | Long Term Incentive Plan Twenty Seventeen | Restricted Stock Units (RSU) | ||||||||||||
Stockholders Equity [Line Items] | ||||||||||||
Vesting period | 4 years | |||||||||||
Minimum | Performance restricted stock units | ||||||||||||
Stockholders Equity [Line Items] | ||||||||||||
Number of shares to be awarded as a percentage of target amounts | 0.00% | |||||||||||
Minimum | Long Term Incentive Plan Twenty Seventeen | Restricted Stock Units (RSU) | ||||||||||||
Stockholders Equity [Line Items] | ||||||||||||
Vesting period | 1 year | |||||||||||
Minimum | Long Term Incentive Plan Twenty Seventeen | Performance restricted stock units | ||||||||||||
Stockholders Equity [Line Items] | ||||||||||||
Vesting period | 12 months | |||||||||||
Minimum | Long Term Incentive Plan Twenty Seventeen | Stock Options and Stock Appreciation Rights (SARs) | ||||||||||||
Stockholders Equity [Line Items] | ||||||||||||
Purchase price of common shares as a percentage of fair market value | 100.00% | |||||||||||
Minimum | 2009 ESPP | ||||||||||||
Stockholders Equity [Line Items] | ||||||||||||
Purchase price of common shares as a percentage of fair market value | 85.00% | |||||||||||
Equity Distribution Agreement | Citigroup Global Markets Inc. | ATM Offering | ||||||||||||
Stockholders Equity [Line Items] | ||||||||||||
Aggregate net proceeds from sale of common stock | $ 7,000,000 | |||||||||||
Equity Distribution Agreement | Citigroup Global Markets Inc. | ATM Offering | Maximum | ||||||||||||
Stockholders Equity [Line Items] | ||||||||||||
Aggregate value of common stock available | $ 50,000,000 | |||||||||||
Common Stock | ||||||||||||
Stockholders Equity [Line Items] | ||||||||||||
Total common stock issued under employee stock purchase plan (shares) | 14,140 | 32,795 | ||||||||||
Common Stock | ATM Offering | ||||||||||||
Stockholders Equity [Line Items] | ||||||||||||
Sale of common stock shares | 489,023 | |||||||||||
Common Stock | Underwritten Public Offering | ||||||||||||
Stockholders Equity [Line Items] | ||||||||||||
Sale of common stock shares | 7,187,500 | 6,900,000 | ||||||||||
Aggregate net proceeds from sale of common stock | $ 162,000,000 | $ 74,400,000 | ||||||||||
Common Stock | Equity Distribution Agreement | Citigroup Global Markets Inc. | ATM Offering | ||||||||||||
Stockholders Equity [Line Items] | ||||||||||||
Sale of common stock shares | 489,023 | |||||||||||
Common Stock | Equity Distribution Agreement | Citigroup Global Markets Inc. | ATM Offering | Weighted Average | ||||||||||||
Stockholders Equity [Line Items] | ||||||||||||
Average market price per share | $ 15.05 | $ 15.05 |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Stock Option Activity (Detail) - Stock options $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($)$ / sharesshares | |
Number of stock options | |
Outstanding at December 31, 2016 | shares | 2,520 |
Granted | shares | 2,241 |
Exercised | shares | (323) |
Forfeited/cancelled/expired | shares | (683) |
Outstanding at December 31, 2017 | shares | 3,755 |
Vested and expected to vest at December 31, 2017 | shares | 3,755 |
Vested and exercisable at December 31, 2017 | shares | 1,094 |
Weighted Average Exercise Price ($ per share) | |
Outstanding at December 31, 2016 | $ / shares | $ 30.30 |
Granted | $ / shares | 16.53 |
Exercised | $ / shares | 16.71 |
Forfeited/cancelled/expired | $ / shares | 47.24 |
Outstanding at December 31, 2017 | $ / shares | 20 |
Vested and expected to vest at December 31, 2017 | $ / shares | 20 |
Vested and exercisable at December 31, 2017 | $ / shares | $ 27.35 |
Weighted-Average Remaining Contractual Term (in years) | |
Outstanding at December 31, 2017 | 5 years 5 months 15 days |
Vested and expected to vest at December 31, 2017 | 5 years 5 months 15 days |
Vested and exercisable at December 31, 2017 | 4 years 3 days |
Aggregate Intrinsic Value | |
Outstanding at December 31, 2017 | $ | $ 60,003 |
Vested and expected to vest at December 31, 2017 | $ | 60,003 |
Vested and exercisable at December 31, 2017 | $ | $ 14,385 |
Stockholders' Equity - Weighted
Stockholders' Equity - Weighted-Average Assumptions and Estimated Fair Value of Stock Options (Detail) - Stock options - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate | 1.90% | 1.40% | 1.80% |
Dividend yield | 0.00% | 0.00% | 0.00% |
Expected volatility | 69.00% | 79.00% | 80.00% |
Expected life (years) | 4 years 6 months 29 days | 4 years 9 months 21 days | 6 years 29 days |
Weighted-average estimated fair value per share of stock options granted | $ 9.17 | $ 10.17 | $ 25.48 |
Stockholders' Equity - Share Ba
Stockholders' Equity - Share Based Compensation Expense (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Jun. 30, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 7,990 | $ 11,117 | $ 14,463 | |
Impact on net loss per share, basic and diluted | $ 0.24 | $ 0.46 | $ 0.60 | |
Research and development | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 1,945 | $ 5,596 | $ 7,512 | |
General and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | 5,925 | 4,447 | 6,458 | |
Restructuring charges | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 1,000 | 1,032 | 142 | |
Discontinued operations | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 120 | $ 42 | $ 351 |
Stockholders' Equity - Total Un
Stockholders' Equity - Total Unrecognized Estimated Compensation Expense (Detail) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Unvested stock options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Expense (in thousands) | $ 20,311 |
Remaining Weighted-Average Recognition Period (in years) | 2 years 10 months 20 days |
RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Expense (in thousands) | $ 22 |
Remaining Weighted-Average Recognition Period (in years) | 11 months 15 days |
PRSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Expense (in thousands) | $ 55 |
Remaining Weighted-Average Recognition Period (in years) | 1 month 28 days |
Collaborations - Additional Inf
Collaborations - Additional Information (Detail) | Dec. 28, 2016USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2016CHF (SFr) | Oct. 31, 2016USD ($) | Jul. 31, 2016USD ($) | Jan. 31, 2016USD ($) | May 31, 2015USD ($) | Feb. 28, 2015USD ($) | Jul. 31, 2013USD ($) | Nov. 30, 2012USD ($) | Dec. 28, 2016USD ($) | Dec. 31, 2017USD ($)Milestone | Dec. 31, 2017CHF (SFr)Milestone | Dec. 31, 2016USD ($)Milestone | Dec. 31, 2015USD ($) |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Revenue from royalty payments | $ 1,705,000 | |||||||||||||||
Total arrangement consideration under Eisai Agreement | 115,600,000 | |||||||||||||||
Payment received from Eisai | $ 10,000,000 | $ 10,000,000 | ||||||||||||||
Recognized revenue of discontinued operations | 19,039,000 | $ 31,812,000 | $ 24,928,000 | |||||||||||||
Carrying value of inventory as cost of product sales of discontinued operations | 7,472,000 | 9,297,000 | 8,590,000 | |||||||||||||
Research and development | $ 70,988,000 | 63,782,000 | 83,283,000 | |||||||||||||
Discontinued operations | ||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Recognized revenues on net product sales | 6,700,000 | |||||||||||||||
Cost of product sales | 1,900,000 | |||||||||||||||
Upfront payments | ||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Recognized revenues | 66,000,000 | 7,500,000 | ||||||||||||||
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 | ||||||||||||||
Refund net overpayments | 0 | |||||||||||||||
Reduction of research and development expense | $ 3,700,000 | |||||||||||||||
Eisai Second Amended Agreement | Disposal Group Held for Sale | ||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Payable to Eisai | $ 9,100,000 | 9,100,000 | ||||||||||||||
Eisai Second Amended Agreement | Discontinued operations | ||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Net product sales | 2,000,000 | |||||||||||||||
Eisai Second Amended Agreement | United States | ||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Product purchase price | 31.50% | 31.50% | ||||||||||||||
Eisai Agreement | ||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Proceeds from sale of inventory | $ 10,000,000 | |||||||||||||||
Collaboration agreement initial term | 2 years | 2 years | 2 years | 2 years | ||||||||||||
Revenue from royalty payments | $ 1,700,000 | |||||||||||||||
Collaboration agreement extended initial term | 6 months | 6 months | ||||||||||||||
Collaboration agreement extension fee | SFr | SFr 2,000,000 | |||||||||||||||
Eisai Agreement | Maximum | ||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Additional manufacturing support payments | SFr | SFr 13,000,000 | 13,000,000 | ||||||||||||||
Manufacturing support payments to be received | SFr | SFr 6,000,000 | |||||||||||||||
Prior to Transaction Agreement | ||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Collaborative agreement upfront payments | $ 115,000,000 | |||||||||||||||
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 | |||||||||||||||
Carrying value of inventory recognized in cost of product sales | 0 | |||||||||||||||
Recognized revenue of discontinued operations | 6,400,000 | |||||||||||||||
Carrying value of inventory as cost of product sales of discontinued operations | 900,000 | |||||||||||||||
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 | 0 | |||||||||||||||
Recognized revenue of discontinued operations | 9,500,000 | |||||||||||||||
Everest | ||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Collaborative agreement upfront payments | $ 12,000,000 | |||||||||||||||
Additional milestone payments on achievement | 212,000,000 | $ 212,000,000 | ||||||||||||||
Number of development milestone payments | Milestone | 6 | 6 | ||||||||||||||
Number of regulatory milestone payments | Milestone | 9 | 9 | ||||||||||||||
Number of commercial milestone payments | Milestone | 6 | 6 | ||||||||||||||
Everest | Development Milestones | ||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Additional milestone payments on achievement | 49,500,000 | $ 49,500,000 | ||||||||||||||
Everest | Regulatory Milestones | ||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Additional milestone payments on achievement | 22,500,000 | 22,500,000 | ||||||||||||||
Everest | Commercial Milestones | Non-substantive | ||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Additional milestone payments on achievement | 140,000,000 | 140,000,000 | ||||||||||||||
Eisai | ||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Additional milestone payments on achievement | 25,000,000 | $ 25,000,000 | ||||||||||||||
Eisai | Federal Commission for the Protection Against Sanitary Risk Mexico Approval | ||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Recognized milestone revenue | $ 1,000,000 | |||||||||||||||
Eisai | Brazilian Health Surveillance Agency | ||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Recognized milestone revenue | $ 1,000,000 | |||||||||||||||
Eisai | US Food and Drug Administration New Drug Application Approval | ||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Recognized milestone revenue | $ 10,000,000 | |||||||||||||||
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 | 13.5% Royalty Rate | ||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Royalty rate on annual net sales | 13.50% | 13.50% | ||||||||||||||
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 | Maximum | 9.5% Royalty Rate | ||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Royalty portion of annual net sales amount | $ 175,000,000 | |||||||||||||||
Eisai | Maximum | 13.5% Royalty Rate | ||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Royalty portion of annual net sales amount | 500,000,000 | |||||||||||||||
Eisai | Minimum | 13.5% Royalty Rate | ||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Royalty portion of annual net sales amount | 175,000,000 | |||||||||||||||
Eisai | Minimum | 18.5% Royalty Rate | ||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Royalty portion of annual net sales amount | 500,000,000 | |||||||||||||||
Lorcaserin | ||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Net product sales | 250,000,000 | |||||||||||||||
Research and development | 0 | 4,200,000 | 10,800,000 | |||||||||||||
Lorcaserin | Discontinued operations | ||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Internal non-commercial manufacturing costs | $ 1,400,000 | 3,100,000 | 5,400,000 | |||||||||||||
Eisai | Eisai Second Amended Agreement | US Food and Drug Administration New Drug Application Approval | ||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Portion of expenses | 90.00% | 90.00% | ||||||||||||||
Eisai | Eisai Second Amended Agreement | Non-US Food and Drug Administration New Drug Application Approval | ||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Portion of expenses | 50.00% | 50.00% | ||||||||||||||
Arena Gmb H | Eisai Second Amended Agreement | US Food and Drug Administration New Drug Application Approval | ||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Portion of expenses | 10.00% | 10.00% | ||||||||||||||
Arena Gmb H | Eisai Second Amended Agreement | Non-US Food and Drug Administration New Drug Application Approval | ||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Portion of expenses | 50.00% | 50.00% | ||||||||||||||
Ildong | BELVIQ | ||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Collaborative agreement upfront payments | $ 5,000,000 | |||||||||||||||
Recognized revenues | $ 0 | 11,400,000 | 8,900,000 | |||||||||||||
Recognized milestone revenue | $ 3,000,000 | |||||||||||||||
Purchase price range minimum | 35.00% | |||||||||||||||
Purchase price range maximum | 45.00% | |||||||||||||||
Annual net product sales threshold for maximum purchase price | $ 15,000,000 | |||||||||||||||
Ildong | BELVIQ | Discontinued operations | ||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Recognized revenues | 7,200,000 | 5,500,000 | ||||||||||||||
Recognized revenues on net product sales | 2,000,000 | |||||||||||||||
Cost of product sales | $ 700,000 | |||||||||||||||
Ildong | Eisai Agreement | BELVIQ | Upfront payments | ||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Recognized revenues | 3,500,000 | |||||||||||||||
CY Biotech Company Limited | ||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Collaborative agreement upfront payments | $ 2,000,000 | |||||||||||||||
Recognized revenues | 0 | 1,800,000 | 200,000 | |||||||||||||
CY Biotech Company Limited | Eisai Agreement | Upfront payments | ||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Recognized revenues | $ 1,700,000 | |||||||||||||||
Roivant | ||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Collaborative agreement upfront payments | $ 4,000,000 | |||||||||||||||
Recognized revenues | 2,200,000 | 2,100,000 | 1,100,000 | |||||||||||||
Collaborative agreement revenue recognition period | 5 years | |||||||||||||||
Axovant | ||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||||
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 | ||||||||||||||
Axovant | Development Milestones | ||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Additional milestone payments on achievement | 4,000,000 | $ 4,000,000 | ||||||||||||||
Axovant | Regulatory Milestones | ||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Additional milestone payments on achievement | 37,500,000 | 37,500,000 | ||||||||||||||
Boehringer Ingelheim | ||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Collaborative agreement upfront payments | $ 7,500,000 | |||||||||||||||
Additional milestone payments on achievement | 251,000,000 | 251,000,000 | ||||||||||||||
Recognized revenues | 5,100,000 | $ 5,100,000 | $ 0 | |||||||||||||
Collaborative agreement revenue recognition period | 2 years | |||||||||||||||
Number of development milestone | Milestone | 3 | |||||||||||||||
Number of regulatory milestone | Milestone | 9 | |||||||||||||||
Refund of withholding taxes | $ 1,200,000 | |||||||||||||||
Number of commercial milestone | Milestone | 4 | |||||||||||||||
Boehringer Ingelheim | Maximum | Beacon Discovery, Inc. | ||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Payable on milestone achievements | 12,000,000 | 12,000,000 | ||||||||||||||
Boehringer Ingelheim | Development Milestones | ||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Additional milestone payments on achievement | 7,000,000 | 7,000,000 | ||||||||||||||
Boehringer Ingelheim | Development Milestones | Non-substantive | ||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Additional milestone payments on achievement | 30,000,000 | 30,000,000 | ||||||||||||||
Boehringer Ingelheim | Regulatory Milestones | Non-substantive | ||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Additional milestone payments on achievement | 84,000,000 | 84,000,000 | ||||||||||||||
Boehringer Ingelheim | Commercial Milestones | Non-substantive | ||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Additional milestone payments on achievement | $ 130,000,000 | $ 130,000,000 |
Employee Benefit Plans - Additi
Employee Benefit Plans - Additional Information - 401 (K) Plan (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Compensation And Retirement Disclosure [Abstract] | |||
Defined contribution plan, percentage employer matching contribution of first 6% contributed | 100.00% | ||
Maximum employer matching contribution percentage per employee | 6.00% | ||
Employer matching contributions | $ 0.5 | $ 1 | $ 1.7 |
Defined contribution plan, employer matching contribution vesting period in Years | 5 years |
Employee Benefit Plans - Addi54
Employee Benefit Plans - Additional Information - Pension Plans (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Multiemployer Plans [Line Items] | |||
Multi-employer plan, employer contributions | $ 500,000 | $ 800,000 | $ 700,000 |
Single employer defined contribution pension plan, employer contributions | 500,000 | 1,000,000 | 1,700,000 |
APD GmbH | |||
Multiemployer Plans [Line Items] | |||
Single employer defined contribution pension plan, employer contributions | $ 200,000 | $ 0 | $ 0 |
Income Taxes - Summary of Loss
Income Taxes - Summary of Loss Before Provision (Benefit) for Income Taxes by Region (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||||||||||
United States | $ (62,109) | $ (10,268) | $ (64,109) | ||||||||
Foreign | (29,298) | (12,248) | (43,870) | ||||||||
Net loss attributable to stockholders of Arena | $ (13,684) | $ (32,353) | $ (23,317) | $ (22,053) | $ 38,572 | $ (12,357) | $ (27,183) | $ (21,548) | $ (91,407) | $ (22,516) | $ (107,979) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Line Items] | |||||
Benefit for income taxes | $ 0 | $ 0 | $ 0 | ||
Statutory federal rate | 34.00% | 34.00% | 34.00% | ||
Decrease in valuation allowance | $ (69,500,000) | ||||
Reduction in net deferred tax assets due to Tax Act | $ 96,300,000 | ||||
Net operating loss and research and development tax credit limitation on use threshold percentage of ownership | 50.00% | 50.00% | |||
Period for net operating loss and research and development tax credit limitation on use threshold percentage of ownership | 3 years | ||||
Unrecognized tax benefits, that would impact the effective tax rate | $ 6,200,000 | $ 6,200,000 | |||
Accrued interest or penalties | 0 | 0 | $ 0 | ||
Recognize interest and/or penalties expense | 0 | $ 0 | $ 0 | ||
Foreign subsidiaries repatriated earnings | 0 | ||||
Foreign subsidiaries accumulated earnings | 0 | 0 | |||
California | |||||
Income Tax Disclosure [Line Items] | |||||
NOL carryforwards | 398,600,000 | 398,600,000 | |||
California | Research and Development Tax Credit | |||||
Income Tax Disclosure [Line Items] | |||||
Tax credit carryforwards amount | 23,800,000 | 23,800,000 | |||
Foreign | |||||
Income Tax Disclosure [Line Items] | |||||
NOL carryforwards | 184,800,000 | $ 184,800,000 | |||
SWITZERLAND | |||||
Income Tax Disclosure [Line Items] | |||||
Standard effective tax rate | 19.00% | ||||
Federal | |||||
Income Tax Disclosure [Line Items] | |||||
NOL carryforwards | 721,400,000 | $ 721,400,000 | |||
Federal | Research and Development Tax Credit | |||||
Income Tax Disclosure [Line Items] | |||||
Tax credit carryforwards amount | 31,700,000 | $ 31,700,000 | |||
Scenario Plan | |||||
Income Tax Disclosure [Line Items] | |||||
Statutory federal rate | 21.00% | ||||
Maximum | |||||
Income Tax Disclosure [Line Items] | |||||
Statutory federal rate | 35.00% | ||||
Income tax holiday expiration term | 10 years | ||||
Income tax holiday termination date | Dec. 31, 2022 | ||||
Minimum | California | |||||
Income Tax Disclosure [Line Items] | |||||
NOL carryforwards expiration date, year | 2,028 | ||||
Minimum | Foreign | |||||
Income Tax Disclosure [Line Items] | |||||
NOL carryforwards expiration date, year | 2,018 | ||||
Minimum | Federal | |||||
Income Tax Disclosure [Line Items] | |||||
NOL carryforwards expiration date, year | 2,023 | ||||
Tax credit carryforwards expiration year | 2,026 | ||||
Minimum | Federal | Orphan Drug Credit | |||||
Income Tax Disclosure [Line Items] | |||||
Tax credit carryforwards amount | $ 10,100,000 | $ 10,100,000 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Provision (Benefit) for Income Taxes at Statutory Federal Rate to Provision (Benefit) for Income Taxes (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Benefit for income taxes at statutory federal rate | $ (32,140,000) | $ (4,053,000) | $ (37,641,000) |
Change in valuation allowance due to tax reform | 96,333,000 | ||
Change in federal and foreign valuation allowance | (68,604,000) | (3,867,000) | 22,240,000 |
Permanent differences and other | (782,000) | 3,412,000 | 2,349,000 |
Share-based compensation expense | 7,071,000 | 4,001,000 | 1,820,000 |
Foreign losses at lower effective rates | 1,428,000 | 3,944,000 | 15,041,000 |
Research and development and Orphan Drug credits | (3,306,000) | (3,437,000) | (3,647,000) |
Gain from valuation of derivative liabilities | (162,000) | ||
Benefit for income taxes | $ 0 | $ 0 | $ 0 |
Income Taxes - Components of Ne
Income Taxes - Components of Net Deferred Tax Assets (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets: | ||
Federal and California NOL carryforwards | $ 179,323 | $ 255,317 |
Federal and California research and development credit carryforwards | 61,272 | 53,059 |
Foreign NOL carryforwards | 15,425 | 4,238 |
Share-based compensation expense | 4,884 | 10,395 |
Depreciation | 3,896 | 5,441 |
Deferred revenues | 3,554 | 9,357 |
Other, net | 5,758 | 5,164 |
Total deferred tax assets | 274,112 | 342,971 |
Net deferred tax assets | 274,112 | 342,971 |
Valuation allowance | $ (274,112) | $ (342,971) |
Income Taxes - Reconciliation59
Income Taxes - Reconciliation of Unrecognized Tax Benefits (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Gross unrecognized tax benefits at the beginning of the year | $ 5,906 | $ 5,619 | $ 5,214 |
Additions from tax positions taken in the current year | 1,133 | 287 | 405 |
Additions from tax positions taken in prior years | 723 | ||
Gross unrecognized tax benefits at end of the year | $ 7,762 | $ 5,906 | $ 5,619 |
Legal Proceedings - Additional
Legal Proceedings - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Nov. 03, 2017 | |
Loss Contingencies [Line Items] | ||
Accrued litigation settlement | $ 24,000 | |
Litigation settlement expense, net | 11,975 | |
Insurance recovery receivable | $ 12,025 | |
Litigation Amount Settlement By Insurer | ||
Loss Contingencies [Line Items] | ||
Accrued litigation settlement | $ 12,025 | |
Litigation Amount Settlement By Parent | ||
Loss Contingencies [Line Items] | ||
Accrued litigation settlement | $ 11,975 |
Restructuring Activities (Detai
Restructuring Activities (Detail) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Jun. 30, 2016USD ($)employee | Dec. 31, 2015USD ($)employee | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charge | $ 3,300 | $ 6,115 | $ 3,346 | ||
Non-cash share-based compensation expense | $ 7,990 | 11,117 | 14,463 | ||
Restructuring charges | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Non-cash share-based compensation expense | $ 1,000 | $ 1,032 | $ 142 | ||
United States | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Positions to be eliminated | 73.00% | 35.00% | |||
Number of positions to be eliminated | employee | 100 | 80 | |||
Restructuring charge | $ 6,100 |
Quarterly Financial Data (Una62
Quarterly Financial Data (Unaudited) (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenues | $ 15,364 | $ 2,415 | $ 1,898 | $ 1,660 | $ 69,224 | $ 14,637 | $ 4,219 | $ 4,083 | $ 21,337 | $ 92,163 | $ 13,398 |
Operating costs and expenses | 28,964 | 36,626 | 24,850 | 22,864 | 18,548 | 24,534 | 31,522 | 22,822 | 113,304 | 97,426 | 116,910 |
Net income (loss): | |||||||||||
Loss from continuing operations | (14,270) | (35,270) | (23,763) | (22,551) | 48,925 | (12,257) | (28,789) | (20,179) | (95,854) | (12,300) | (110,707) |
Income from discontinued operations | 315 | 2,606 | 147 | 54 | (10,611) | (222) | 1,606 | (1,369) | 3,122 | (10,596) | 2,728 |
Net loss | (13,955) | (32,664) | (23,616) | (22,497) | 38,314 | (12,479) | (27,183) | (21,548) | (92,732) | (22,896) | (107,979) |
Amounts attributable to stockholders of Arena: | |||||||||||
Loss from continuing operations | (13,999) | (34,959) | (23,464) | (22,107) | 49,183 | (12,135) | (28,789) | (20,179) | |||
Income from discontinued operations | 315 | 2,606 | 147 | 54 | (10,611) | (222) | 1,606 | (1,369) | 3,122 | (10,596) | 2,728 |
Net loss attributable to stockholders of Arena | $ (13,684) | $ (32,353) | $ (23,317) | $ (22,053) | $ 38,572 | $ (12,357) | $ (27,183) | $ (21,548) | $ (91,407) | $ (22,516) | $ (107,979) |
Net income (loss) attributable to stockholders of Arena per share, basic and diluted: | |||||||||||
Continuing operations | $ (0.36) | $ (0.93) | $ (0.77) | $ (0.90) | $ (2.87) | $ (0.49) | $ (4.60) | ||||
Discontinued operations | 0.01 | 0.07 | 0.10 | (0.44) | 0.11 | ||||||
Net income (loss) attributable to stockholders of Arena per share, basic and diluted | $ (0.35) | $ (0.86) | $ (0.77) | $ (0.90) | $ (2.77) | $ (0.93) | $ (4.49) | ||||
Net income (loss) attributable to stockholders of Arena per share, basic: | |||||||||||
Continuing operations | $ 2.02 | $ (0.50) | $ (1.18) | $ (0.83) | |||||||
Discontinued operations | (0.43) | (0.01) | 0.06 | (0.06) | |||||||
Net income (loss) attributable to stockholders of Arena per share, basic | 1.59 | (0.51) | (1.12) | (0.89) | |||||||
Net income (loss) attributable to stockholders of Arena per share, diluted: | |||||||||||
Continuing operations | 2.02 | (0.50) | (1.18) | (0.83) | |||||||
Discontinued operations | (0.44) | (0.01) | 0.06 | (0.06) | |||||||
Net income (loss) attributable to stockholders of Arena per share, diluted | $ 1.58 | $ (0.51) | $ (1.12) | $ (0.89) |
Beacon Discovery, Inc. - Additi
Beacon Discovery, Inc. - Additional Information (Detail) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||||
Apr. 30, 2017 | Sep. 30, 2016 | May 31, 2016 | Dec. 31, 2017USD ($)ft² | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2017USD ($)ft² | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Variable Interest Entity [Line Items] | ||||||||||||||
Sublease expiration period | 2027-05 | 2027-05 | ||||||||||||
Revenues | $ 15,364,000 | $ 2,415,000 | $ 1,898,000 | $ 1,660,000 | $ 69,224,000 | $ 14,637,000 | $ 4,219,000 | $ 4,083,000 | $ 21,337,000 | $ 92,163,000 | $ 13,398,000 | |||
Net loss attributable to noncontrolling interest in consolidated variable interest entity | $ (1,325,000) | $ (380,000) | ||||||||||||
Beacon Discovery, Inc. | ||||||||||||||
Variable Interest Entity [Line Items] | ||||||||||||||
Sublease expiration period | 2021-08 | |||||||||||||
Beacon Discovery, Inc. | Variable Interest Entity, Primary Beneficiary | ||||||||||||||
Variable Interest Entity [Line Items] | ||||||||||||||
Promissory note interest rate | 7.00% | 7.00% | ||||||||||||
Promissory note repayment due date | Aug. 31, 2022 | |||||||||||||
Sale of equity, issuance of debt or third party license revenue threshold amount for repayment of promissory note | $ 10,000,000 | $ 10,000,000 | ||||||||||||
Total assets Beacon's excluded from consolidated balance sheet | 1,000,000 | 1,000,000 | ||||||||||||
Total liabilities Beacon's excluded from consolidated balance sheet | 1,800,000 | 1,800,000 | ||||||||||||
Total stockholders' deficit Beacon's excluded from consolidated balance sheet | $ 800,000 | 800,000 | ||||||||||||
Revenues | 2,700,000 | |||||||||||||
Net loss attributable to noncontrolling interest in consolidated variable interest entity | 1,300,000 | |||||||||||||
Beacon Discovery, Inc. | Variable Interest Entity, Primary Beneficiary | Maximum | ||||||||||||||
Variable Interest Entity [Line Items] | ||||||||||||||
Revenues from third parties | $ 100,000 | |||||||||||||
Beacon Discovery, Inc. | Variable Interest Entity, Primary Beneficiary | Sublease Agreement | ||||||||||||||
Variable Interest Entity [Line Items] | ||||||||||||||
Area of space subleased | ft² | 15,000 | 15,000 | ||||||||||||
Sublease expiration period | 2021-08 |
Beacon Discovery, Inc. - Summar
Beacon Discovery, Inc. - Summary of Balances Pertaining to Transactions Included in Consolidated Balance Sheet (Detail) - Variable Interest Entity, Primary Beneficiary - Beacon Discovery, Inc. $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Prepaid Expense and Other Current Assets | |
Variable Interest Entity [Line Items] | |
Description | Prepaid costs under the Master Services Agreement |
Balances pertaining to our transactions with Beacon | $ 368 |
Other Non-current Assets | |
Variable Interest Entity [Line Items] | |
Description | Receivable under the Sublease and the Note |
Balances pertaining to our transactions with Beacon | $ 477 |
Accounts Payable and Other Accrued Liabilities | |
Variable Interest Entity [Line Items] | |
Description | Payable under the Beacon Services Agreement |
Balances pertaining to our transactions with Beacon | $ 139 |