Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Nov. 02, 2018 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | ARENA PHARMACEUTICALS INC | |
Trading Symbol | ARNA | |
Entity Central Index Key | 1,080,709 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 49,406,452 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 508,663 | $ 158,837 |
Short-term investments, available-for-sale | 52,961 | 88,240 |
Accounts receivable | 1,329 | 2,357 |
Insurance recovery receivable | 12,025 | |
Prepaid expenses and other current assets | 9,524 | 2,681 |
Assets of disposal group held for sale | 17,140 | |
Total current assets | 572,477 | 281,280 |
Investments, available-for-sale | 24,242 | |
Land, property and equipment, net | 27,836 | 30,131 |
Other non-current assets | 9,721 | 3,622 |
Total assets | 610,034 | 339,275 |
Current liabilities: | ||
Accounts payable and other accrued liabilities | 7,975 | 7,916 |
Accrued clinical and preclinical study fees | 9,793 | 7,706 |
Accrued litigation settlement | 24,000 | |
Current portion of deferred revenues | 800 | 1,110 |
Current portion of lease financing obligations | 3,384 | 4,000 |
Liabilities of disposal group held for sale | 27,595 | |
Total current liabilities | 21,952 | 72,327 |
Other long-term liabilities | 1,019 | 989 |
Deferred revenues, less current portion | 415 | 1,067 |
Lease financing obligations, less current portion | 55,332 | 57,748 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Common stock | 5 | 4 |
Additional paid-in capital | 2,100,594 | 1,698,543 |
Accumulated other comprehensive loss | (20) | (1,216) |
Accumulated deficit | (1,569,263) | (1,490,187) |
Total stockholders' equity | 531,316 | 207,144 |
Total liabilities and stockholders' equity | $ 610,034 | $ 339,275 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenues: | ||||
Total revenues | $ 3,573 | $ 2,415 | $ 9,322 | $ 5,973 |
Operating Costs and Expenses: | ||||
Research and development | 28,811 | 17,233 | 77,139 | 50,277 |
General and administrative | 10,766 | 7,418 | 32,322 | 22,088 |
Litigation settlement expense, net | 11,975 | 11,975 | ||
Total operating costs and expenses | 39,577 | 36,626 | 109,461 | 84,340 |
Loss from operations | (36,004) | (34,211) | (100,139) | (78,367) |
Interest and Other Income (Expense): | ||||
Interest income | 2,524 | 13 | 5,800 | 63 |
Interest expense | (1,423) | (1,516) | (4,344) | (4,624) |
Other income | 589 | 444 | 1,403 | 1,344 |
Total interest and other income (expense), net | 1,690 | (1,059) | 2,859 | (3,217) |
Loss from continuing operations | (34,314) | (35,270) | (97,280) | (81,584) |
Income (loss) from discontinued operations | 2,606 | (830) | 2,807 | |
Net loss | (34,314) | (32,664) | (98,110) | (78,777) |
Less net loss attributable to noncontrolling interest in consolidated variable interest entity | 311 | 1,054 | ||
Net loss attributable to stockholders of Arena | (34,314) | (32,353) | (98,110) | (77,723) |
Amounts attributable to stockholders of Arena: | ||||
Loss from continuing operations | $ (34,314) | (34,959) | (97,280) | (80,530) |
Income (loss) from discontinued operations | $ 2,606 | $ (830) | $ 2,807 | |
Net income (loss) attributable to stockholders of Arena per share, basic and diluted: | ||||
Continuing operations | $ (0.70) | $ (0.93) | $ (2.10) | $ (2.32) |
Discontinued operations | 0.07 | (0.02) | 0.08 | |
Net income (loss) attributable to stockholders of Arena per share, basic and diluted | $ (0.70) | $ (0.86) | $ (2.12) | $ (2.24) |
Shares used in calculating net income (loss) attributable to stockholders of Arena per share, basic and diluted: | 49,368 | 37,766 | 46,243 | 34,692 |
Comprehensive Loss: | ||||
Net loss | $ (34,314) | $ (32,664) | $ (98,110) | $ (78,777) |
Foreign currency translation gain (loss) | 65 | (443) | 32 | 2,271 |
Unrealized gain on available-for-sale investments | 93 | 62 | ||
Comprehensive loss | (34,156) | (33,107) | (98,016) | (76,506) |
Less comprehensive loss attributable to noncontrolling interest in consolidated variable interest entity | 311 | 1,054 | ||
Comprehensive loss attributable to stockholders of Arena | (34,156) | (32,796) | (98,016) | (75,452) |
Collaboration and Other Revenue | ||||
Revenues: | ||||
Total revenues | 363 | 1,881 | 4,524 | 5,439 |
Royalty Revenue | ||||
Revenues: | ||||
Total revenues | $ 3,210 | $ 534 | $ 4,798 | $ 534 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Operating Activities: | ||
Net loss | $ (98,110) | $ (78,777) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
(Income) loss from discontinued operations | 830 | (2,807) |
Depreciation and amortization | 2,863 | 3,234 |
Non-cash collaboration consideration | (1,500) | |
Non-cash royalty revenue | (2,493) | |
Share-based compensation | 13,729 | 5,758 |
Litigation settlement expense, net | 11,975 | |
Amortization of prepaid financing costs | 83 | 102 |
Amortization of original issue discounts, net of premiums, on available-for-sale investments | 129 | |
Gain on disposal of property and equipment | (379) | |
Changes in operating assets and liabilities: | ||
Accounts receivable | 1,000 | 11,651 |
Prepaid expenses and other assets | (3,002) | (1,245) |
Payables and accrued liabilities | 2,015 | (2,567) |
Accrued litigation settlement | (11,975) | |
Deferred revenues | (846) | (3,207) |
Other long-term liabilities | (879) | (303) |
Net cash used in operating activities - continuing operations | (98,156) | (56,565) |
Net cash used in operating activities - discontinued operations | (370) | (3,929) |
Net cash used in operating activities | (98,526) | (60,494) |
Investing Activities: | ||
Purchases of available-for-sale investments | (25,579) | |
Proceeds from sale and maturity of available-for-sale investments | 85,033 | |
Purchases of property and equipment | (568) | (26) |
Proceeds from sale of property and equipment | 789 | |
Other non-current assets | 1 | (5) |
Net cash provided by investing activities - continuing operations | 58,887 | 758 |
Net cash provided by investing activities - discontinued operations | 3,405 | 31 |
Net cash provided by investing activities | 62,292 | 789 |
Financing Activities: | ||
Principal payments on lease financing obligations | (3,032) | (2,588) |
Proceeds from issuance of common stock, net | 388,479 | 248,329 |
Net cash provided by financing activities | 385,447 | 245,741 |
Effect of exchange rate changes on cash | 613 | 1,990 |
Net increase in cash, cash equivalents and restricted cash | 349,826 | 188,026 |
Cash, cash equivalents and restricted cash at beginning of period | 159,700 | 91,575 |
Cash, cash equivalents and restricted cash at end of period | $ 509,526 | $ 279,601 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | 1. Basis of Presentation The accompanying unaudited condensed consolidated financial statements of Arena Pharmaceuticals, Inc. should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2017, as filed with the Securities and Exchange Commission, or SEC, from which we derived our condensed consolidated balance sheet as of December 31, 2017. The accompanying condensed consolidated financial statements have been prepared in accordance with US generally accepted accounting principles, or GAAP, for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, since they are interim statements, the accompanying condensed consolidated financial statements do not include all of the information and notes required by GAAP for complete financial statements. The accompanying condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, that are, in the opinion of our management, necessary to a fair statement of the results for the interim periods presented. Interim results are not necessarily indicative of results for a full year. Beacon Discovery, Inc., or Beacon, is a variable interest entity in which we had a controlling financial interest until December 2017. The results of operations and comprehensive loss attributable to the noncontrolling interest in Beacon are presented as separate components from the results of operations and comprehensive loss attributable to the stockholders of Arena in the condensed consolidated statement of operations and comprehensive loss for the three and nine months ended September 30, 2017 . We Liquidity. As of September 30, 2018, we had cash, cash equivalents and available-for-sale investments of approximately $561.6 million. We believe our cash and cash equivalents and available-for-sale investments will be sufficient to fund our operations for at least the next 12 months. 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, programs or patent portfolios, or from other potential sources of liquidity, which may include the sale of equity, issuance of debt or other transactions. Changes in Accounting Policies - Revenue Recognition. Effective January 1, 2018, we adopted Accounting Standard Codification 606, Revenue from Contracts with Customers , or ASC 606, issued by the Accounting Standards Board, or FASB. As a result, we have changed our accounting policy for revenue recognition as detailed below. We implemented ASC 606 using the modified retrospective method by recognizing the cumulative effect of initially applying ASC 606 as an adjustment to the opening balance of our accumulated deficit at January 1, 2018. Therefore, the comparative period information has not been adjusted. We applied ASC 606 using a practical expedient for contracts that were modified before the implementation date, which allowed us to determine an aggregate effect of all modifications that occurred before January 1, 2018, when determining the satisfied and unsatisfied performance obligations, the transaction price, and allocating that transaction price to the performance obligations instead of retrospectively restating the contracts for such contract modifications. The cumulative impact to our accumulated deficit balance at January 1, 2018, as a result of the adoption of ASC 606 was a decrease of $19.0 million. The decrease arose primarily from a reduction of deferred revenue balances related to upfront payments received from customers and recognition of contract assets due to a combination of (i) the effects of applying the practical expedient for contract modifications and our conclusions related to satisfied and unsatisfied performance obligations, which resulted in a relatively higher portion of the total transaction price recognized as revenue in periods prior to our adoption of ASC 606, (ii) the effect of the bill-and-hold accounting guidance for inventory in ASC 606 and (iii) the inclusion of estimated future royalty payments related to our intellectual property in the total transaction price to the extent such intellectual property was legally sold to our customer rather than licensed. The cumulative effect adjustment is net of an impairment loss of $13.1 million which was a direct effect of the adoption of ASC 606 on the asset group of the Manufacturing Operations, which was classified as assets of disposal group held for sale since December 2017. The following table summarizes the impacts of adopting ASC 606 on our condensed consolidated financial statements, in thousands. Impact of Changes in Accounting Policies Three months ended September 30, 2018 As reported Adjustments Balances without adoption of ASC 606 Collaboration and other revenue $ 363 $ 5 $ 368 Royalty revenue 3,210 (2,142 ) 1,068 Total revenue 3,573 (2,137 ) 1,436 Loss from operations (36,004 ) (2,137 ) (38,141 ) Loss from continuing operations (34,314 ) (2,137 ) (36,451 ) Net loss (34,314 ) (2,137 ) (36,451 ) Net loss attributable to stockholders of Arena (34,314 ) (2,137 ) (36,451 ) Nine months ended September 30, 2018 Collaboration and other revenue $ 4,524 $ 49 $ 4,573 Royalty revenue 4,798 (1,454 ) 3,344 Total revenue 9,322 (1,405 ) 7,917 Loss from operations (100,139 ) (1,405 ) (101,544 ) Loss from continuing operations (97,280 ) (257 ) (97,537 ) Income (loss) from discontinued operations (830 ) 13,660 12,830 Net loss (98,110 ) 13,403 (84,707 ) Net loss attributable to stockholders of Arena (98,110 ) 13,403 (84,707 ) As of September 30, 2018 Prepaid expenses and other current assets $ 9,524 $ (1,310 ) $ 8,214 Total current assets 572,477 (1,310 ) 571,167 Other non-current assets 9,721 (4,252 ) 5,469 Total assets 610,034 (5,562 ) 604,472 Current portion of deferred revenues 800 15 815 Total current liabilities 21,952 15 21,967 Deferred revenues, less current portion 415 52 467 Accumulated deficit (1,569,263 ) (5,629 ) (1,574,892 ) Total stockholders' equity 531,316 (5,629 ) 525,687 Total liabilities and stockholders' equity 610,034 (5,562 ) 604,472 Our revenues to date have been generated primarily through collaboration agreements. Our collaboration agreements frequently contain multiple elements including (i) intellectual property licenses, (ii) product research, development and regulatory services and (iii) product manufacturing. 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. Our customers include Everest Medicines Limited, or Everest, Outpost Medicine, LLC, or Outpost, Eisai Inc. and Eisai Co., Ltd., or collectively, Eisai, Axovant Sciences GmbH, or Axovant, Boehringer Ingelheim International GmbH, or Boehringer Ingelheim, and Siegfried. Under ASC 606, revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration that we expect to be entitled to receive in exchange for these services and excludes sales incentives and amounts collected i) Identify the contract with a customer . We consider the terms and conditions of our collaboration agreements to identify contracts within the scope of ASC 606. We consider that we have a contract with a customer when the contract is approved, we can identify each party's rights regarding the goods and services to be transferred, we can identify the payment terms for the goods and services, we have determined the customer has the ability and intent to pay and the contract has commercial substance. We use judgment in determining the customer's ability and intent to pay, which is based upon factors including the customer's historical payment experience or, for new customers, credit and financial information pertaining to the customers. ii) Identify the performance obligations in the contract. Performance obligations in our collaboration agreements are identified based on the goods and services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the service either on its own or together with other resources that are readily available from third parties or from us, and are distinct in the context of the contract, whereby the transfer of the services is separately identifiable from other promises in the contract. Our performance obligations generally consist of intellectual property licenses, research, development and/or regulatory services and manufacturing and supply commitments. iii) Determine the transaction price. We determine the transaction price based on the consideration to which we expect to be entitled in exchange for transferring goods and services to the customer. In determining the transaction price, any variable consideration would be considered, to the extent applicable, if, in our judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. In accordance with the royalty exception under ASC 606 for licenses of intellectual property, the transaction price excludes future royalty payments to be received from our customers. None of our collaboration agreements contain consideration payable to our customer or a significant financing component. iv) Allocate the transaction price to performance obligations in the contract. v) Recognize revenue when or as we satisfy a performance obligation. Revenue is recognized at the time the related performance obligation is satisfied by transferring the promised goods or services to a customer. We recognize revenue when we transfer control of the goods or services to our customers for an amount that reflects the consideration that we expect to receive in exchange for those services. Performance Obligations. The following is a description of principal goods and services from which we generate revenue. Intellectual property licenses We generate revenue from licensing our intellectual property including know-how and development and commercialization rights. These licenses provide customers with a term-based license to further research, develop and commercialize our internally-discovered drug candidates. The consideration we receive in the form of nonrefundable upfront consideration related to the functional intellectual property licenses is recognized when we transfer such license to the customer unless the license is combined with other goods or services into one performance obligation, in which case the revenue is recognized over a period of time based on our estimated pattern in which we satisfy the combined performance obligation. Intellectual property sales We generate royalty revenue from sales of our intellectual property. We estimate the future royalty payments and recognize revenue with a corresponding contract asset at a point in time when we transfer the intellectual property to the customer. We periodically reassess our estimate of the future royalty payments and recognize any estimate adjustments as revenue in the current period. Research, development and regulatory services We generate revenue from research, development and regulatory services we provide to our customers in connection with the licensed intellectual property. The services we provide to our customers primarily include scientific research activities, preparation for and management of clinical trials, and assistance during the regulatory approval application process. Revenue associated with these services is recognized based on our estimate of total consideration to be received for such services and the pattern in which we perform the services. The pattern of performance is generally determined to be the amount of incurred expenses reimbursed by the customer as a percentage of total expected reimbursable expenses associated with the contract. Product manufacturing We generate revenue from manufacturing and clinical supply promises to our customers in connection with securing a supply of drug products for development and clinical trial purposes. The drug products are generally manufactured by our contract manufacturing organizations. We used our product manufacturing facility in Zofingen, Switzerland for a portion of the product manufacturing requirements until we sold the Manufacturing Operations on March 31, 2018 (see Note 2). Revenue associated with product manufacturing obligations is recognized at a point in time as control of the related product is transferred to the customer. Contracts with Multiple Performance Obligations. Most of our collaboration agreements with customers contain multiple promised goods or services. Based on the characteristics of the promised goods and services we analyze whether they are separate or combined performance obligations. The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. We determine standalone selling price based on our overall pricing and discounting objectives, taking into consideration the type of services, estimates of hourly market rates, and stage of the development and clinical trials. Variable Consideration. Our contracts with customers primarily include two types of variable consideration: (i) development and regulatory milestone payments, which are due to us upon achievement of specific development and regulatory milestones and (ii) one-time sales-based payments and sales-based royalties associated with sold or licensed intellectual property. Due to uncertainty associated with achievement of the development and Product sales-based royalties under licensed intellectual property and one-time payments are accounted for under the royalty exception. We recognize revenue for sales-based royalties under licensed intellectual property and one-time payments at the later of when the sales occur or the performance obligation is satisfied or partially satisfied. Disaggregation of Revenue. We operate in one reportable business segment. We provide goods and services to our customers in collaboration agreements pursuant to various geographical markets. In the following table, revenue is disaggregated by major customers, timing of revenue recognition and revenue classification, in thousands. Customers Three months ended September 30, 2018 Nine months ended September 30, 2018 Eisai $ 3,210 $ 6,300 Outpost — 2,750 Axovant 200 968 Siegfried — 942 Boehringer Ingelheim 163 785 Other — 84 Total $ 3,573 $ 11,829 Timing of revenue recognition Revenue recognized at a point in time $ 2,493 $ 7,770 Revenue recognized over time 1,080 4,059 Total $ 3,573 $ 11,829 Classification Revenue from continuing operations $ 3,573 $ 9,322 Revenue reported under discontinued operations — 2,507 Total $ 3,573 $ 11,829 Contract Assets and Contract Liabilities. We receive payments from customers based on contractual terms. Accounts receivable are recorded when the right to consideration becomes unconditional. For research and development services, we generally bill our customers monthly or quarterly as the services are performed. Product sales are generally billed as completed. Payment terms on invoiced amounts are typically 30 days. Contract assets include amounts related to our contractual right to consideration for both completed and partially completed performance obligations that have not been invoiced and for which we do not yet have the right to payment. The current portion of contract asset is included in prepaid expenses and other current assets in the condensed consolidated balance sheet. The non-current portion of contract assets is included in other non-current assets in the condensed consolidated balance sheet. As of January 1, 2018, we recorded a contract asset of $4.1 million, of which $1.4 million is classified as current and $2.7 million is classified as non-current, related to future royalties associated with intellectual property patents previously sold to a customer which do not qualify for the royalty exception in ASC 606. We estimated the amount of the contract asset by applying the expected value method to our estimate of future royalty payments we will receive from this customer. Any future changes to this estimate will be recorded as an adjustment to revenue in the period in which the change in estimate is made. Contract liabilities consist of deferred revenue and include payments received in advance of performance under the contract. The following table provides detail of changes in our contract assets and deferred revenues, in thousands. The deferred revenue balances as of December 31, 2017, presented in the following table include balances classified as liabilities of disposal group held for sale: Contract Assets - Current Contract Assets - Non-Current Current Portion of Deferred Revenues Deferred Revenues, Less Current Portion Balances at December 31, 2017 $ — $ — $ 26,560 $ 1,067 ASC 606 implementation adjustments 7,527 2,694 (25,526 ) (40 ) Reductions of contract assets (2,096 ) (659 ) — — Impact of the disposal of the Manufacturing Operations (see Note 2) (4,543 ) — — — Foreign currency translation adjustment 145 — — — Recognized as revenue during the period 277 2,217 (234 ) (612 ) Balances at September 30, 2018 $ 1,310 $ 4,252 $ 800 $ 415 Cost to Obtain and Fulfill a Contract. We generally do not incur costs to obtain new contracts. Costs to fulfill contracts are expensed as incurred. Remaining Performance Obligations. The following table provides detail of estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) pursuant to our existing collaboration agreements as of September 30, 2018, in thousands: As of September 30, 2018 Rest of 2018 $ 678 2019 2,080 2020 686 2021 and thereafter — Total $ 3,444 Under the royalty exception in ASC 606 for licensed intellectual property we do not recognize any revenue for the variable amounts related to sales-based royalties until the later of when the sales occur or the performance obligation is satisfied or partially satisfied. Accordingly, the revenue related to future royalties and sales-based milestones is not included in the table above. Recent Accounting Pronouncements . In February 2016, the FASB issued ASU No. 2016-02, Leases FASB has subsequently issued additional ASUs to clarify certain elements of the new lease accounting guidance. The new guidance requires a modified retrospective transition, with the cumulative effect of transition, including initial recognition by lessees of lease assets and liabilities for existing operating leases, as of either expired or existing contracts contain leases under the new definition of a lease; (b) lease classification for expired or existing leases; and (c) whether previously capitalized initial direct costs would qualify for capitalization under the new lease standard. We have continued to monitor FASB activity to assess certain interpretative issues and the associated implementation of the new standard. We are in the process of reviewing our lease arrangements, including our property leases and subleases, and are not yet able to estimate the anticipated impact to our consolidated financial statements from the implementation of the new standard as we continue to interpret the principles of the new standard. In November 2016, the FASB issued ASU No. 2016-18, Restricted Cash The following table provides a reconciliation of the components of cash, cash equivalents, and restricted cash reported in our condensed consolidated balance sheets to the total of the amount presented in the condensed consolidated statements of cash flows, in thousands: September 30, December 31, 2018 2017 Cash and cash equivalents $ 508,663 $ 158,837 Restricted cash included in other non-current assets 863 863 Total cash, cash equivalents and restricted cash presented in the condensed consolidated statement of cash flows $ 509,526 $ 159,700 The restricted cash relates to our property leases. The restriction will lapse when the related leases expire. Use of Estimates. The preparation of financial statements in accordance with GAAP requires our management to make estimates and assumptions that affect the reported amounts (including assets, liabilities, revenues and expenses) and related disclosures. The amounts reported could differ under different estimates and assumptions. Contingencies. We disclose information regarding each material claim where the likelihood of a loss contingency is probable or reasonably possible. If a loss contingency is probable and the amount of the loss can be reasonably estimated, we record an accrual for the loss. In such cases, there may be an exposure to potential loss in excess of the amount accrued. The insurance recoveries are recorded in the period when the insurance reimbursement is deemed probable. The ability to predict the ultimate outcome of such matters involves judgments, estimates and inherent uncertainties. The actual outcome of such matters could differ materially from management’s estimates. |
Sale of Manufacturing Operation
Sale of Manufacturing Operations | 9 Months Ended |
Sep. 30, 2018 | |
Discontinued Operations And Disposal Groups [Abstract] | |
Sale of Manufacturing Operations | 2. Sale of Manufacturing Operations 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, or collectively, the Manufacturing Operations. We refer to this transaction as the Siegfried Transaction. The Siegfried Transaction was completed on March 31, 2018. In connection with the Siegfried Transaction, all of Arena GmbH’s approximately 50 employees transferred to Siegfried. We have excluded from our continuing operations for all periods presented in this report revenues and expenses associated with the disposed Manufacturing Operations, which are reported as discontinued operations. The total sales price for the Manufacturing Operations was approximately CHF 4 million of which approximately CHF 3 million was received in cash in March 2018 with the remaining portion to be received in March 2019, net of any qualifying claims by Siegfried. In the event Siegfried agrees to sell or transfer some or all of the transferred assets to certain third parties on or prior to December 31, 2018, for a consideration in excess of a specified amount, Arena GmbH will be entitled to percentage of such excess amount. We have retrospectively revised the condensed consolidated statements of operations for the three and nine months ended September 30, 2017, and cash flows for the nine months ended September 30, 2017, to reflect the operations and cash flows of the disposed Manufacturing Operations as discontinued operations. The following table summarizes the results of discontinued operations for the periods presented in the condensed consolidated statements of operations, in thousands: Three months ended September 30, Nine months ended September 30, Revenues 2018 2017 2018 2017 Net product sales $ — $ 3,075 $ 1,129 $ 7,845 Other collaboration revenue — 1,689 372 5,005 Toll manufacturing — 769 1,006 2,241 Total revenues — 5,533 2,507 15,091 Costs and expenses Cost of product sales — 1,739 1,858 5,768 Cost of toll manufacturing — 1,222 1,411 3,215 Research and development — 74 — 463 General and administrative — 373 329 1,103 Other (income) expenses, net — (481 ) 464 1,735 Total costs and expenses — 2,927 4,062 12,284 Income (loss) from operations of discontinued operations — 2,606 (1,555 ) 2,807 Gain on sale of discontinued operations — — 725 — Income (loss) from discontinued operations $ — $ 2,606 $ (830 ) $ 2,807 |
Fair Value Disclosures
Fair Value Disclosures | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosures | 3. 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 September 30, 2018 Balance Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Money market funds(1) $ 454,270 $ 454,270 $ — $ — Corporate debt instruments(2) 52,961 — 52,961 — 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 — (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 condensed consolidated balance sheets. |
Investments, Available-for-Sale
Investments, Available-for-Sale | 9 Months Ended |
Sep. 30, 2018 | |
Investments Debt And Equity Securities [Abstract] | |
Investments, Available-for-Sale | 4. Investments, Available-for-Sale I nvestments, available-for-sale, consisted of the following September 30, 2018 Maturity in years Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Corporate debt securities < 1 $ 53,032 $ — $ (71 ) $ 52,961 Short-term investments, available-for-sale $ 53,032 $ — $ (71 ) $ 52,961 December 31, 2017 Maturity in years Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value US government and government agency notes < 1 $ 34,873 $ — $ (8 ) $ 34,865 Corporate debt securities < 1 53,438 — (63 ) 53,375 Short-term investments, available-for-sale $ 88,311 $ — $ (71 ) $ 88,240 Corporate debt securities 1 – 5 24,304 — (62 ) 24,242 Investments, available-for-sale $ 24,304 $ — $ (62 ) $ 24,242 |
Land, Property and Equipment
Land, Property and Equipment | 9 Months Ended |
Sep. 30, 2018 | |
Property Plant And Equipment [Abstract] | |
Land, Property and Equipment | 5. Land, Property and Equipment Land, property and equipment consisted of the following, in thousands: September 30, December 31, 2018 2017 Cost $ 88,793 $ 88,244 Less accumulated depreciation and amortization (60,957 ) (58,113 ) Land, property and equipment, net $ 27,836 $ 30,131 |
Accounts Payable and Other Accr
Accounts Payable and Other Accrued Liabilities | 9 Months Ended |
Sep. 30, 2018 | |
Payables And Accruals [Abstract] | |
Accounts Payable and Other Accrued Liabilities | 6. Accounts Payable and Other Accrued Liabilities Accounts payable and other accrued liabilities consisted of the following, in thousands: September 30, December 31, 2018 2017 Accounts payable $ 1,081 $ 1,599 Accrued compensation 5,732 5,255 Other accrued liabilities 1,162 1,062 Total accounts payable and other accrued liabilities $ 7,975 $ 7,916 |
Collaborations
Collaborations | 9 Months Ended |
Sep. 30, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Collaborations | 7. Collaborations Refer to our Annual Report on Form 10-K for the year ended December 31, 2017, for more information on our significant collaboration agreements. Outpost Medicine LLC. In the second quarter of 2018, we and Outpost entered into a license agreement, or Outpost Agreement, under which Outpost has an exclusive right to advance an undisclosed, preclinical compound with potential utility in treating genitourinary disorders Under the Outpost Agreement, we received an upfront payment of $3.0 million, of which $1.5 million was in the form of an equity interest in Outpost. milestone payments success of The promised goods and services under the Outpost Outpost A Eisai. In July 2010, we granted Eisai In December 2016, we and Eisai amended and restated the terms of the 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. Under the Supply Agreement, Eisai paid us $10.0 million in December 2016 to acquire our entire on-hand inventory of bulk lorcaserin and the precursor material for manufacturing lorcaserin. Eisai also paid us for finished drug product plus monthly manufacturing support payments through September 2018 totaling CHF 8.7 million. Until March 31, 2018, when we sold the Manufacturing Operations, including the assignment of the Supply Agreement, to Siegfried (see Note 2), we manufactured lorcaserin at our manufacturing facility in Zofingen, Switzerland. Revenues earned for (i) lorcaserin sold by us to Eisai under the manufacturing and supply commitment within the Supply Agreement and (ii) the manufacturing support payments are classified within discontinued operations as part of the Manufacturing Operations in the condensed consolidated statements of operations (see Note 2). All other revenues earned under the Transaction Agreement, such as royalties, are classified within continuing operations in the condensed 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 Upfront payments. Prior to the Transaction Agreement, we received from Eisai total upfront payments of $115.0 million under prior lorcaserin collaboration agreements and $7.5 million from the prior commercial lorcaserin distribution agreements with Ildong, CYB, and Teva. 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. Milestone payments. Prior to the Transaction Agreement, we received a total of $102.1 million in milestone payments from Eisai, Ildong, CYB, and Teva. These payments were recognized as revenue upon the achievement of the milestones. We are eligible to receive an additional sales-based milestone of $25.0 million upon the achievement of global net sales of lorcaserin for a calendar year first exceeding $250.0 million. Accounting for Eisai Agreement under ASC 606. Upon implementation of ASC 606 on January 1, 2018, we applied a practical expedient for contract modifications applicable to contracts that were modified before the implementation date. The promised goods and services under the Eisai Agreement were assessed in combination with promised goods and services under our previous agreements with Eisai and commercial lorcaserin distribution agreements with Ildong, CYB, and Teva. The total estimated transaction price of these contracts at the implementation date was $344.4 million, which included previously received upfront payments, milestone payments, proceeds from net products sales, reimbursement of development expenses, reimbursement of patent expenses, manufacturing support payments received and expected to be received under the Supply Agreement, proceeds from the sale of on-hand inventory of bulk lorcaserin and the precursor material, royalty payments received through December 31, 2017, and estimated future royalty payments related to intellectual property sold to Eisai. The estimated total transaction price In connection with the sale of the Manufacturing Operations on March 31, 2018, we derecognized the remaining portion of the contract asset associated with the Supply Agreement. During the third quarter of 2018, we adjusted our estimate of future royalty payments from Based on the bill-and-hold accounting guidance in ASC 606, effective January 1, 2018, we derecognized $3.6 million of inventory of bulk lorcaserin and the precursor material previously sold to Eisai for which the revenue recognition criteria were met on the implementation date under ASC 606. For the three and nine months ended September 30, 2018, we recorded royalty revenue of $3.2 million and $4.8 million related to the Transaction Agreement compared to royalty revenue of $0.5 million recorded for the three and nine months ended September 30, 2017. For the nine months ended September 30, 2018, we recognized as revenue $1.5 million related to the Supply Agreement (classified under discontinued operations), all of which was recorded during the first quarter of 2018 and primarily consisting of net product sales and other collaboration revenue. For the three and nine months ended September 30, 2017, we recognized as revenue $4.8 million and $12.9 million (classified under discontinued operations), respectively, related to the Supply Agreement and primarily consisting of net product sales and other collaboration revenue. In the condensed consolidated balance sheet at December 31, 2017, the deferred revenues of $25.5 million relating to the Eisai Agreement (primarily comprised of the deferred portion of the previously received upfront payments and the $10.0 million payment received from Eisai in December 2016) were classified as liabilities of disposal group held for sale. Axovant Sciences GmbH. We and Axovant have a development, marketing and supply agreement, or Axovant Agreement, under which Axovant has exclusive worldwide rights to develop and commercialize nelotanserin, subject to regulatory approval. Under the Axovant Agreement, we received an upfront payment of $4.0 million in May 2015. We will receive payments from potential sales of nelotanserin under the Axovant Agreement and are eligible to receive purchase price adjustment payments based on Axovant’s annual net product sales. We are eligible to receive up to an aggregate of $41.5 million in success milestone payments in case of full development and regulatory success of nelotanserin. The promised goods and services under the Axovant Agreement are accounted for as two separate performance obligations: (i) a combined performance obligation consisting of commercialization rights and development and regulatory services and (ii) a manufacturing and supply commitment. As of September 30, 2018, the estimated total transaction price was $9.9 million, of which $3.3 million is associated with performance obligations to be satisfied in the future. The future potential purchase price adjustment payments and milestone payments were excluded from the estimated total transaction price as they are considered constrained. We recognize revenue for the combined performance obligation consisting of commercialization rights and development and regulatory services based on the amount of incurred development expenses reimbursed by the customer as a percentage of total expected reimbursable expenses associated with the contract. For the three and nine months ended September 30, 2018, we recorded revenue of $0.2 million and $1.0 million, respectively, related to the Axovant Agreement. For the three and nine months ended September 30, 2017, we recorded revenue of $0.5 million and $1.6 million, respectively, related to the Axovant Agreement. Boehringer Ingelheim International GmbH. We and Boehringer Ingelheim have a collaboration and license agreement, or Boehringer Ingelheim Agreement, to conduct joint research to identify drug candidates targeting an undisclosed G protein-coupled receptor, or GPCR, that belongs to the group of orphan central nervous system, or CNS, receptors. The Boehringer Ingelheim Agreement was in effect through January 2018. We and Boehringer Ingelheim agreed to extend the original term of the Boehringer Ingelheim Agreement by twelve months through January 2019. In partial consideration of the exclusive rights to our intellectual property necessary or useful to conduct the joint research under the Boehringer Ingelheim Agreement, we received from Boehringer Ingelheim an upfront payment of $7.5 million in 2016. Under the Boehringer Ingelheim Agreement, we are eligible to receive up to an aggregate of $251.0 million in success milestone payments in case of full commercial success multiple drug products. The promised goods and services under the Boehringer Ingelheim Boehringer Ingelheim For the three and nine months ended September 30, 2018, we recorded revenue of $0.2 million and $0.8 million, respectively, related to the Boehringer Ingelheim Agreement. For the three and nine months ended September 30, 2017, we recorded revenue of $1.3 million and $3.8 million, respectively, related to the Boehringer Ingelheim Agreement. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2018 | |
Stockholders Equity Note [Abstract] | |
Stockholders' Equity | 8. Stockholders’ Equity In March 2018, we completed the sale of an aggregate of 9,775,000 shares of our common stock under an underwritten public offering. Net proceeds from the offering were approximately $383.1 million after deducting underwriting discounts and commissions and offering expenses payable by us. |
Share-based Compensation
Share-based Compensation | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Share-based Compensation | 9. Share-based Compensation We recognized share-based compensation expense as follows, in thousands: Three months ended Nine months ended September 30, September 30, 2018 2017 2018 2017 Research and development $ 2,269 $ 380 $ 5,836 $ 1,335 General and administrative 2,898 1,497 7,894 4,423 Discontinued operations — 13 11 100 Total share-based compensation expense $ 5,167 $ 1,890 $ 13,741 $ 5,858 The following table summarizes our stock option activity during the nine months ended September 30, 2018, in thousands (except per share data): Options Weighted- Average Exercise Price Outstanding at January 1, 2018 3,755 $ 20.00 Granted 3,075 37.64 Exercised (288 ) 18.54 Forfeited/cancelled/expired (326 ) 33.69 Outstanding at September 30, 2018 6,216 $ 28.08 During the nine months ended September 30, 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 of the Nasdaq Biotechnology Index over the three-year performance period that began on March 1, 2015 |
Concentrations of Credit Risk
Concentrations of Credit Risk | 9 Months Ended |
Sep. 30, 2018 | |
Risks And Uncertainties [Abstract] | |
Concentrations of Credit Risk | 10. Concentrations of Credit Risk Financial instruments, which potentially subject us to concentrations of credit risk, consist primarily of cash, 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. |
Income (Loss) Per Share
Income (Loss) Per Share | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Income (Loss) Per Share | 11. 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. Since we have a loss from continuing operations for the three and nine months ended September 30, 2018, and 2017, in addition to excluding potentially dilutive out-of-the money securities, we have excluded from our calculation of diluted income (loss) per share all potentially dilutive in-the-money (i) stock options, (ii) restricted stock unit awards, or RSUs, (iii) PRSUs and (iv) unvested restricted stock in our deferred compensation plan, and our diluted net income (loss) per share is the same as our basic net income (loss) per share. The following table presents the weighted-average number of potentially dilutive securities that were excluded from our calculation of diluted net income (loss) per share, in thousands: Three months ended Nine months ended September 30, September 30, 2018 2017 2018 2017 Stock options 5,918 3,862 5,669 3,667 RSUs and unvested restricted stock 24 3 18 3 Total 5,942 3,865 5,687 3,670 Because the market condition for the outstanding PRSUs was not satisfied at September 30, 2017, such securities are excluded from the table above. There are no outstanding PRSUs at September 30, 2018. |
Legal Proceedings
Legal Proceedings | 9 Months Ended |
Sep. 30, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Legal Proceedings | 12. Legal Proceedings Beginning in September 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. In August 2011, the District Court consolidated the actions and appointed a lead plaintiff and lead counsel. In November 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 that (i) our insurers would pay class members and their attorneys a total of approximately $12.025 million and (ii) Arena would pay class members and their attorneys approximately $11.975 million in either shares of our common stock or cash at our election. Accordingly, in the third quarter of 2017, we recognized $11.975 million of net expense for the portion of the settlement that we agreed to pay in either common stock or cash. On April 12, 2018, the District Court entered its final approval order approving the settlement and the plan of allocation and request for attorneys’ fees and expense. In the second quarter of 2018, we and our insurer made settlement payments in cash to the class members and their attorneys to settle our liability under the Stipulation. 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. 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. On March 23, 2018, we and Eisai Inc. filed a second amended complaint against Lupin and Teva, adding infringement of U.S. Patent Nos. 6,953,787, 7,514,422, 7,977,329, 8,207,158, 8,273,734, and 9,770,455 by Lupin’s generic equivalent of BELVIQ XR. This consolidated action against Lupin and Teva is currently in expert discovery. We cannot predict the ultimate outcome of any proceeding. |
Beacon Discovery, Inc.
Beacon Discovery, Inc. | 9 Months Ended |
Sep. 30, 2018 | |
Variable Interest Entity Disclosure [Abstract] | |
Beacon Discovery, Inc. | 13. Beacon Discovery, Inc. On September 1, 2016, we entered into a 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 agreements with Beacon. We do not own any equity interest in Beacon; however, as the agreements 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 condensed consolidated financial statements for the three and nine months ended September 30, 2017, include Beacon’s results of operations and cash flows. As of September 30, 2018, Beacon’s total assets of $6.7 million, total liabilities of $7.9 million and total stockholders’ deficit of $1.2 million are excluded from our consolidated balance sheet. For the three and nine months ended September 30, 2018, Beacon recognized revenues of $0.6 million and $4.7 million, respectively, of which none and $0.7 million, respectively was earned by Beacon from agreements with us. For the three and nine months ended September 30, 2018, Beacon reported net loss of $1.1 million and $0.5 million, respectively. For the three and nine months ended September 30, 2017, Beacon recognized revenues of $0.7 million and $2.0 million, substantially all of which was earned by Beacon from agreements with us. For the three and nine months ended September 30, 2017, Beacon incurred a net loss of $0.3 million and $1.1 million which is fully presented as net loss attributable to noncontrolling interest in consolidated variable interest entity in our condensed consolidated statements of operations and comprehensive loss. As of September 30, 2018, a note receivable from Beacon with a balance of $0.5 million is included in prepaid expenses and other current assets in our condensed consolidated balance sheet. We believe that our maximum exposure to loss as a result of our involvement with Beacon is limited to the note receivable due to us from Beacon. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | 14. Subsequent Events In October 2018, the China Food and Drug Administration, or CFDA, approved the Investigational New Drug application submitted by Everest Medicines Limited, or Everest, for an oral formulation of ralinepag. Everest will pay us a $1.0 million milestone payment earned from this achievement. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements of Arena Pharmaceuticals, Inc. should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2017, as filed with the Securities and Exchange Commission, or SEC, from which we derived our condensed consolidated balance sheet as of December 31, 2017. The accompanying condensed consolidated financial statements have been prepared in accordance with US generally accepted accounting principles, or GAAP, for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, since they are interim statements, the accompanying condensed consolidated financial statements do not include all of the information and notes required by GAAP for complete financial statements. The accompanying condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, that are, in the opinion of our management, necessary to a fair statement of the results for the interim periods presented. Interim results are not necessarily indicative of results for a full year. Beacon Discovery, Inc., or Beacon, is a variable interest entity in which we had a controlling financial interest until December 2017. The results of operations and comprehensive loss attributable to the noncontrolling interest in Beacon are presented as separate components from the results of operations and comprehensive loss attributable to the stockholders of Arena in the condensed consolidated statement of operations and comprehensive loss for the three and nine months ended September 30, 2017 . We |
Liquidity | Liquidity. As of September 30, 2018, we had cash, cash equivalents and available-for-sale investments of approximately $561.6 million. We believe our cash and cash equivalents and available-for-sale investments will be sufficient to fund our operations for at least the next 12 months. 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, 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 . In February 2016, the FASB issued ASU No. 2016-02, Leases FASB has subsequently issued additional ASUs to clarify certain elements of the new lease accounting guidance. The new guidance requires a modified retrospective transition, with the cumulative effect of transition, including initial recognition by lessees of lease assets and liabilities for existing operating leases, as of either expired or existing contracts contain leases under the new definition of a lease; (b) lease classification for expired or existing leases; and (c) whether previously capitalized initial direct costs would qualify for capitalization under the new lease standard. We have continued to monitor FASB activity to assess certain interpretative issues and the associated implementation of the new standard. We are in the process of reviewing our lease arrangements, including our property leases and subleases, and are not yet able to estimate the anticipated impact to our consolidated financial statements from the implementation of the new standard as we continue to interpret the principles of the new standard. In November 2016, the FASB issued ASU No. 2016-18, Restricted Cash The following table provides a reconciliation of the components of cash, cash equivalents, and restricted cash reported in our condensed consolidated balance sheets to the total of the amount presented in the condensed consolidated statements of cash flows, in thousands: September 30, December 31, 2018 2017 Cash and cash equivalents $ 508,663 $ 158,837 Restricted cash included in other non-current assets 863 863 Total cash, cash equivalents and restricted cash presented in the condensed consolidated statement of cash flows $ 509,526 $ 159,700 The restricted cash relates to our property leases. The restriction will lapse when the related leases expire. |
Use of Estimates | Use of Estimates. The preparation of financial statements in accordance with GAAP requires our management to make estimates and assumptions that affect the reported amounts (including assets, liabilities, revenues and expenses) and related disclosures. The amounts reported could differ under different estimates and assumptions. |
Contingencies | Contingencies. We disclose information regarding each material claim where the likelihood of a loss contingency is probable or reasonably possible. If a loss contingency is probable and the amount of the loss can be reasonably estimated, we record an accrual for the loss. In such cases, there may be an exposure to potential loss in excess of the amount accrued. The insurance recoveries are recorded in the period when the insurance reimbursement is deemed probable. The ability to predict the ultimate outcome of such matters involves judgments, estimates and inherent uncertainties. The actual outcome of such matters could differ materially from management’s estimates. |
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. |
Concentrations of Credit Risk | Financial instruments, which potentially subject us to concentrations of credit risk, consist primarily of cash, 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. |
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. Since we have a loss from continuing operations for the three and nine months ended September 30, 2018, and 2017, in addition to excluding potentially dilutive out-of-the money securities, we have excluded from our calculation of diluted income (loss) per share all potentially dilutive in-the-money (i) stock options, (ii) restricted stock unit awards, or RSUs, (iii) PRSUs and (iv) unvested restricted stock in our deferred compensation plan, and our diluted net income (loss) per share is the same as our basic net income (loss) per share. |
ASC 606 | |
Changes in Accounting Policies - Revenue Recognition | Changes in Accounting Policies - Revenue Recognition. Effective January 1, 2018, we adopted Accounting Standard Codification 606, Revenue from Contracts with Customers , or ASC 606, issued by the Accounting Standards Board, or FASB. As a result, we have changed our accounting policy for revenue recognition as detailed below. We implemented ASC 606 using the modified retrospective method by recognizing the cumulative effect of initially applying ASC 606 as an adjustment to the opening balance of our accumulated deficit at January 1, 2018. Therefore, the comparative period information has not been adjusted. We applied ASC 606 using a practical expedient for contracts that were modified before the implementation date, which allowed us to determine an aggregate effect of all modifications that occurred before January 1, 2018, when determining the satisfied and unsatisfied performance obligations, the transaction price, and allocating that transaction price to the performance obligations instead of retrospectively restating the contracts for such contract modifications. The cumulative impact to our accumulated deficit balance at January 1, 2018, as a result of the adoption of ASC 606 was a decrease of $19.0 million. The decrease arose primarily from a reduction of deferred revenue balances related to upfront payments received from customers and recognition of contract assets due to a combination of (i) the effects of applying the practical expedient for contract modifications and our conclusions related to satisfied and unsatisfied performance obligations, which resulted in a relatively higher portion of the total transaction price recognized as revenue in periods prior to our adoption of ASC 606, (ii) the effect of the bill-and-hold accounting guidance for inventory in ASC 606 and (iii) the inclusion of estimated future royalty payments related to our intellectual property in the total transaction price to the extent such intellectual property was legally sold to our customer rather than licensed. The cumulative effect adjustment is net of an impairment loss of $13.1 million which was a direct effect of the adoption of ASC 606 on the asset group of the Manufacturing Operations, which was classified as assets of disposal group held for sale since December 2017. The following table summarizes the impacts of adopting ASC 606 on our condensed consolidated financial statements, in thousands. Impact of Changes in Accounting Policies Three months ended September 30, 2018 As reported Adjustments Balances without adoption of ASC 606 Collaboration and other revenue $ 363 $ 5 $ 368 Royalty revenue 3,210 (2,142 ) 1,068 Total revenue 3,573 (2,137 ) 1,436 Loss from operations (36,004 ) (2,137 ) (38,141 ) Loss from continuing operations (34,314 ) (2,137 ) (36,451 ) Net loss (34,314 ) (2,137 ) (36,451 ) Net loss attributable to stockholders of Arena (34,314 ) (2,137 ) (36,451 ) Nine months ended September 30, 2018 Collaboration and other revenue $ 4,524 $ 49 $ 4,573 Royalty revenue 4,798 (1,454 ) 3,344 Total revenue 9,322 (1,405 ) 7,917 Loss from operations (100,139 ) (1,405 ) (101,544 ) Loss from continuing operations (97,280 ) (257 ) (97,537 ) Income (loss) from discontinued operations (830 ) 13,660 12,830 Net loss (98,110 ) 13,403 (84,707 ) Net loss attributable to stockholders of Arena (98,110 ) 13,403 (84,707 ) As of September 30, 2018 Prepaid expenses and other current assets $ 9,524 $ (1,310 ) $ 8,214 Total current assets 572,477 (1,310 ) 571,167 Other non-current assets 9,721 (4,252 ) 5,469 Total assets 610,034 (5,562 ) 604,472 Current portion of deferred revenues 800 15 815 Total current liabilities 21,952 15 21,967 Deferred revenues, less current portion 415 52 467 Accumulated deficit (1,569,263 ) (5,629 ) (1,574,892 ) Total stockholders' equity 531,316 (5,629 ) 525,687 Total liabilities and stockholders' equity 610,034 (5,562 ) 604,472 Our revenues to date have been generated primarily through collaboration agreements. Our collaboration agreements frequently contain multiple elements including (i) intellectual property licenses, (ii) product research, development and regulatory services and (iii) product manufacturing. 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. Our customers include Everest Medicines Limited, or Everest, Outpost Medicine, LLC, or Outpost, Eisai Inc. and Eisai Co., Ltd., or collectively, Eisai, Axovant Sciences GmbH, or Axovant, Boehringer Ingelheim International GmbH, or Boehringer Ingelheim, and Siegfried. Under ASC 606, revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration that we expect to be entitled to receive in exchange for these services and excludes sales incentives and amounts collected i) Identify the contract with a customer . We consider the terms and conditions of our collaboration agreements to identify contracts within the scope of ASC 606. We consider that we have a contract with a customer when the contract is approved, we can identify each party's rights regarding the goods and services to be transferred, we can identify the payment terms for the goods and services, we have determined the customer has the ability and intent to pay and the contract has commercial substance. We use judgment in determining the customer's ability and intent to pay, which is based upon factors including the customer's historical payment experience or, for new customers, credit and financial information pertaining to the customers. ii) Identify the performance obligations in the contract. Performance obligations in our collaboration agreements are identified based on the goods and services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the service either on its own or together with other resources that are readily available from third parties or from us, and are distinct in the context of the contract, whereby the transfer of the services is separately identifiable from other promises in the contract. Our performance obligations generally consist of intellectual property licenses, research, development and/or regulatory services and manufacturing and supply commitments. iii) Determine the transaction price. We determine the transaction price based on the consideration to which we expect to be entitled in exchange for transferring goods and services to the customer. In determining the transaction price, any variable consideration would be considered, to the extent applicable, if, in our judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. In accordance with the royalty exception under ASC 606 for licenses of intellectual property, the transaction price excludes future royalty payments to be received from our customers. None of our collaboration agreements contain consideration payable to our customer or a significant financing component. iv) Allocate the transaction price to performance obligations in the contract. v) Recognize revenue when or as we satisfy a performance obligation. Revenue is recognized at the time the related performance obligation is satisfied by transferring the promised goods or services to a customer. We recognize revenue when we transfer control of the goods or services to our customers for an amount that reflects the consideration that we expect to receive in exchange for those services. Performance Obligations. The following is a description of principal goods and services from which we generate revenue. Intellectual property licenses We generate revenue from licensing our intellectual property including know-how and development and commercialization rights. These licenses provide customers with a term-based license to further research, develop and commercialize our internally-discovered drug candidates. The consideration we receive in the form of nonrefundable upfront consideration related to the functional intellectual property licenses is recognized when we transfer such license to the customer unless the license is combined with other goods or services into one performance obligation, in which case the revenue is recognized over a period of time based on our estimated pattern in which we satisfy the combined performance obligation. Intellectual property sales We generate royalty revenue from sales of our intellectual property. We estimate the future royalty payments and recognize revenue with a corresponding contract asset at a point in time when we transfer the intellectual property to the customer. We periodically reassess our estimate of the future royalty payments and recognize any estimate adjustments as revenue in the current period. Research, development and regulatory services We generate revenue from research, development and regulatory services we provide to our customers in connection with the licensed intellectual property. The services we provide to our customers primarily include scientific research activities, preparation for and management of clinical trials, and assistance during the regulatory approval application process. Revenue associated with these services is recognized based on our estimate of total consideration to be received for such services and the pattern in which we perform the services. The pattern of performance is generally determined to be the amount of incurred expenses reimbursed by the customer as a percentage of total expected reimbursable expenses associated with the contract. Product manufacturing We generate revenue from manufacturing and clinical supply promises to our customers in connection with securing a supply of drug products for development and clinical trial purposes. The drug products are generally manufactured by our contract manufacturing organizations. We used our product manufacturing facility in Zofingen, Switzerland for a portion of the product manufacturing requirements until we sold the Manufacturing Operations on March 31, 2018 (see Note 2). Revenue associated with product manufacturing obligations is recognized at a point in time as control of the related product is transferred to the customer. Contracts with Multiple Performance Obligations. Most of our collaboration agreements with customers contain multiple promised goods or services. Based on the characteristics of the promised goods and services we analyze whether they are separate or combined performance obligations. The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. We determine standalone selling price based on our overall pricing and discounting objectives, taking into consideration the type of services, estimates of hourly market rates, and stage of the development and clinical trials. Variable Consideration. Our contracts with customers primarily include two types of variable consideration: (i) development and regulatory milestone payments, which are due to us upon achievement of specific development and regulatory milestones and (ii) one-time sales-based payments and sales-based royalties associated with sold or licensed intellectual property. Due to uncertainty associated with achievement of the development and Product sales-based royalties under licensed intellectual property and one-time payments are accounted for under the royalty exception. We recognize revenue for sales-based royalties under licensed intellectual property and one-time payments at the later of when the sales occur or the performance obligation is satisfied or partially satisfied. Disaggregation of Revenue. We operate in one reportable business segment. We provide goods and services to our customers in collaboration agreements pursuant to various geographical markets. In the following table, revenue is disaggregated by major customers, timing of revenue recognition and revenue classification, in thousands. Customers Three months ended September 30, 2018 Nine months ended September 30, 2018 Eisai $ 3,210 $ 6,300 Outpost — 2,750 Axovant 200 968 Siegfried — 942 Boehringer Ingelheim 163 785 Other — 84 Total $ 3,573 $ 11,829 Timing of revenue recognition Revenue recognized at a point in time $ 2,493 $ 7,770 Revenue recognized over time 1,080 4,059 Total $ 3,573 $ 11,829 Classification Revenue from continuing operations $ 3,573 $ 9,322 Revenue reported under discontinued operations — 2,507 Total $ 3,573 $ 11,829 Contract Assets and Contract Liabilities. We receive payments from customers based on contractual terms. Accounts receivable are recorded when the right to consideration becomes unconditional. For research and development services, we generally bill our customers monthly or quarterly as the services are performed. Product sales are generally billed as completed. Payment terms on invoiced amounts are typically 30 days. Contract assets include amounts related to our contractual right to consideration for both completed and partially completed performance obligations that have not been invoiced and for which we do not yet have the right to payment. The current portion of contract asset is included in prepaid expenses and other current assets in the condensed consolidated balance sheet. The non-current portion of contract assets is included in other non-current assets in the condensed consolidated balance sheet. As of January 1, 2018, we recorded a contract asset of $4.1 million, of which $1.4 million is classified as current and $2.7 million is classified as non-current, related to future royalties associated with intellectual property patents previously sold to a customer which do not qualify for the royalty exception in ASC 606. We estimated the amount of the contract asset by applying the expected value method to our estimate of future royalty payments we will receive from this customer. Any future changes to this estimate will be recorded as an adjustment to revenue in the period in which the change in estimate is made. Contract liabilities consist of deferred revenue and include payments received in advance of performance under the contract. The following table provides detail of changes in our contract assets and deferred revenues, in thousands. The deferred revenue balances as of December 31, 2017, presented in the following table include balances classified as liabilities of disposal group held for sale: Contract Assets - Current Contract Assets - Non-Current Current Portion of Deferred Revenues Deferred Revenues, Less Current Portion Balances at December 31, 2017 $ — $ — $ 26,560 $ 1,067 ASC 606 implementation adjustments 7,527 2,694 (25,526 ) (40 ) Reductions of contract assets (2,096 ) (659 ) — — Impact of the disposal of the Manufacturing Operations (see Note 2) (4,543 ) — — — Foreign currency translation adjustment 145 — — — Recognized as revenue during the period 277 2,217 (234 ) (612 ) Balances at September 30, 2018 $ 1,310 $ 4,252 $ 800 $ 415 Cost to Obtain and Fulfill a Contract. We generally do not incur costs to obtain new contracts. Costs to fulfill contracts are expensed as incurred. Remaining Performance Obligations. The following table provides detail of estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) pursuant to our existing collaboration agreements as of September 30, 2018, in thousands: As of September 30, 2018 Rest of 2018 $ 678 2019 2,080 2020 686 2021 and thereafter — Total $ 3,444 Under the royalty exception in ASC 606 for licensed intellectual property we do not recognize any revenue for the variable amounts related to sales-based royalties until the later of when the sales occur or the performance obligation is satisfied or partially satisfied. Accordingly, the revenue related to future royalties and sales-based milestones is not included in the table above. |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Reconciliation of Components of Cash, Cash Equivalents, and Restricted Cash | The following table provides a reconciliation of the components of cash, cash equivalents, and restricted cash reported in our condensed consolidated balance sheets to the total of the amount presented in the condensed consolidated statements of cash flows, in thousands: September 30, December 31, 2018 2017 Cash and cash equivalents $ 508,663 $ 158,837 Restricted cash included in other non-current assets 863 863 Total cash, cash equivalents and restricted cash presented in the condensed consolidated statement of cash flows $ 509,526 $ 159,700 |
ASC 606 | |
Summary of Impacts of Adopting ASC 606 on Condensed Consolidated Statements of Financial Statements | The following table summarizes the impacts of adopting ASC 606 on our condensed consolidated financial statements, in thousands. Impact of Changes in Accounting Policies Three months ended September 30, 2018 As reported Adjustments Balances without adoption of ASC 606 Collaboration and other revenue $ 363 $ 5 $ 368 Royalty revenue 3,210 (2,142 ) 1,068 Total revenue 3,573 (2,137 ) 1,436 Loss from operations (36,004 ) (2,137 ) (38,141 ) Loss from continuing operations (34,314 ) (2,137 ) (36,451 ) Net loss (34,314 ) (2,137 ) (36,451 ) Net loss attributable to stockholders of Arena (34,314 ) (2,137 ) (36,451 ) Nine months ended September 30, 2018 Collaboration and other revenue $ 4,524 $ 49 $ 4,573 Royalty revenue 4,798 (1,454 ) 3,344 Total revenue 9,322 (1,405 ) 7,917 Loss from operations (100,139 ) (1,405 ) (101,544 ) Loss from continuing operations (97,280 ) (257 ) (97,537 ) Income (loss) from discontinued operations (830 ) 13,660 12,830 Net loss (98,110 ) 13,403 (84,707 ) Net loss attributable to stockholders of Arena (98,110 ) 13,403 (84,707 ) As of September 30, 2018 Prepaid expenses and other current assets $ 9,524 $ (1,310 ) $ 8,214 Total current assets 572,477 (1,310 ) 571,167 Other non-current assets 9,721 (4,252 ) 5,469 Total assets 610,034 (5,562 ) 604,472 Current portion of deferred revenues 800 15 815 Total current liabilities 21,952 15 21,967 Deferred revenues, less current portion 415 52 467 Accumulated deficit (1,569,263 ) (5,629 ) (1,574,892 ) Total stockholders' equity 531,316 (5,629 ) 525,687 Total liabilities and stockholders' equity 610,034 (5,562 ) 604,472 |
Summary of Revenue Disaggregated by Major Customers, Timing of Revenue Recognition and Revenue Classification | In the following table, revenue is disaggregated by major customers, timing of revenue recognition and revenue classification, in thousands. Customers Three months ended September 30, 2018 Nine months ended September 30, 2018 Eisai $ 3,210 $ 6,300 Outpost — 2,750 Axovant 200 968 Siegfried — 942 Boehringer Ingelheim 163 785 Other — 84 Total $ 3,573 $ 11,829 Timing of revenue recognition Revenue recognized at a point in time $ 2,493 $ 7,770 Revenue recognized over time 1,080 4,059 Total $ 3,573 $ 11,829 Classification Revenue from continuing operations $ 3,573 $ 9,322 Revenue reported under discontinued operations — 2,507 Total $ 3,573 $ 11,829 |
Summary of Changes in Contract Assets and Deferred Revenues | The following table provides detail of changes in our contract assets and deferred revenues, in thousands. The deferred revenue balances as of December 31, 2017, presented in the following table include balances classified as liabilities of disposal group held for sale: Contract Assets - Current Contract Assets - Non-Current Current Portion of Deferred Revenues Deferred Revenues, Less Current Portion Balances at December 31, 2017 $ — $ — $ 26,560 $ 1,067 ASC 606 implementation adjustments 7,527 2,694 (25,526 ) (40 ) Reductions of contract assets (2,096 ) (659 ) — — Impact of the disposal of the Manufacturing Operations (see Note 2) (4,543 ) — — — Foreign currency translation adjustment 145 — — — Recognized as revenue during the period 277 2,217 (234 ) (612 ) Balances at September 30, 2018 $ 1,310 $ 4,252 $ 800 $ 415 |
Summary of Estimated Revenue Expected to be Recognized in Future Related to Performance Obligations | The following table provides detail of estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) pursuant to our existing collaboration agreements as of September 30, 2018 , in thousands: As of September 30, 2018 Rest of 2018 $ 678 2019 2,080 2020 686 2021 and thereafter — Total $ 3,444 |
Sale of Manufacturing Operati_2
Sale of Manufacturing Operations (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Discontinued Operations And Disposal Groups [Abstract] | |
Summary of Discontinued Operations for Periods Presented in the Condensed Consolidated Statements of Operations | The following table summarizes the results of discontinued operations for the periods presented in the condensed consolidated statements of operations, in thousands: Three months ended September 30, Nine months ended September 30, Revenues 2018 2017 2018 2017 Net product sales $ — $ 3,075 $ 1,129 $ 7,845 Other collaboration revenue — 1,689 372 5,005 Toll manufacturing — 769 1,006 2,241 Total revenues — 5,533 2,507 15,091 Costs and expenses Cost of product sales — 1,739 1,858 5,768 Cost of toll manufacturing — 1,222 1,411 3,215 Research and development — 74 — 463 General and administrative — 373 329 1,103 Other (income) expenses, net — (481 ) 464 1,735 Total costs and expenses — 2,927 4,062 12,284 Income (loss) from operations of discontinued operations — 2,606 (1,555 ) 2,807 Gain on sale of discontinued operations — — 725 — Income (loss) from discontinued operations $ — $ 2,606 $ (830 ) $ 2,807 |
Fair Value Disclosures (Tables)
Fair Value Disclosures (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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 September 30, 2018 Balance Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Money market funds(1) $ 454,270 $ 454,270 $ — $ — Corporate debt instruments(2) 52,961 — 52,961 — 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 — (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 condensed consolidated balance sheets. |
Investments, Available-for-Sa_2
Investments, Available-for-Sale (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Investments Debt And Equity Securities [Abstract] | |
Schedule of Investments, Available-for-Sale | I nvestments, available-for-sale, consisted of the following September 30, 2018 Maturity in years Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Corporate debt securities < 1 $ 53,032 $ — $ (71 ) $ 52,961 Short-term investments, available-for-sale $ 53,032 $ — $ (71 ) $ 52,961 December 31, 2017 Maturity in years Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value US government and government agency notes < 1 $ 34,873 $ — $ (8 ) $ 34,865 Corporate debt securities < 1 53,438 — (63 ) 53,375 Short-term investments, available-for-sale $ 88,311 $ — $ (71 ) $ 88,240 Corporate debt securities 1 – 5 24,304 — (62 ) 24,242 Investments, available-for-sale $ 24,304 $ — $ (62 ) $ 24,242 |
Land, Property and Equipment (T
Land, Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Property Plant And Equipment [Abstract] | |
Land, Property and Equipment | Land, property and equipment consisted of the following, in thousands: September 30, December 31, 2018 2017 Cost $ 88,793 $ 88,244 Less accumulated depreciation and amortization (60,957 ) (58,113 ) Land, property and equipment, net $ 27,836 $ 30,131 |
Accounts Payable and Other Ac_2
Accounts Payable and Other Accrued Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Payables And Accruals [Abstract] | |
Accounts Payable and Other Accrued Liabilities | Accounts payable and other accrued liabilities consisted of the following, in thousands: September 30, December 31, 2018 2017 Accounts payable $ 1,081 $ 1,599 Accrued compensation 5,732 5,255 Other accrued liabilities 1,162 1,062 Total accounts payable and other accrued liabilities $ 7,975 $ 7,916 |
Share-based Compensation (Table
Share-based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Share Based Compensation Expense | We recognized share-based compensation expense as follows, in thousands: Three months ended Nine months ended September 30, September 30, 2018 2017 2018 2017 Research and development $ 2,269 $ 380 $ 5,836 $ 1,335 General and administrative 2,898 1,497 7,894 4,423 Discontinued operations — 13 11 100 Total share-based compensation expense $ 5,167 $ 1,890 $ 13,741 $ 5,858 |
Summary of Stock Option Activity | The following table summarizes our stock option activity during the nine months ended September 30, 2018, in thousands (except per share data): Options Weighted- Average Exercise Price Outstanding at January 1, 2018 3,755 $ 20.00 Granted 3,075 37.64 Exercised (288 ) 18.54 Forfeited/cancelled/expired (326 ) 33.69 Outstanding at September 30, 2018 6,216 $ 28.08 |
Income (Loss) Per Share (Tables
Income (Loss) Per Share (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Potentially Dilutive Securities Excluded from Calculation of Diluted Income (Loss) Per Share | The following table presents the weighted-average number of potentially dilutive securities that were excluded from our calculation of diluted net income (loss) per share, in thousands: Three months ended Nine months ended September 30, September 30, 2018 2017 2018 2017 Stock options 5,918 3,862 5,669 3,667 RSUs and unvested restricted stock 24 3 18 3 Total 5,942 3,865 5,687 3,670 |
Basis of Presentation - Additio
Basis of Presentation - Additional Information (Detail) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2018USD ($)Segment | Dec. 31, 2017USD ($) | Jan. 01, 2018USD ($) | |
Subsidiary Sale Of Stock [Line Items] | |||
Cash and cash equivalents and available-for-sale investments | $ 561,600,000 | ||
Accumulated deficit | $ (1,569,263,000) | $ (1,490,187,000) | |
Number of reportable business segment | Segment | 1 | ||
Customers billing method, description | We receive payments from customers based on contractual terms. Accounts receivable are recorded when the right to consideration becomes unconditional. For research and development services, we generally bill our customers monthly or quarterly as the services are performed. | ||
Payment terms on invoiced amounts | 30 days | ||
Contract asstes | 4,100,000 | ||
Current contract assets with related to future royalties | $ 1,310,000 | 1,400,000 | |
Non-current contract assets with related to future royalties | 4,252,000 | 2,700,000 | |
Revenue remaining performance obligations | 3,444,000 | ||
ASC 606 | |||
Subsidiary Sale Of Stock [Line Items] | |||
Impairment loss | $ 13,100,000 | ||
Revenue remaining performance obligations | 0 | ||
ASC 606 | Difference between Revenue Guidance in Effect before and after Topic 606 | |||
Subsidiary Sale Of Stock [Line Items] | |||
Accumulated deficit | $ (5,629,000) | $ (19,000,000) |
Basis of Presentation - Summary
Basis of Presentation - Summary of Impacts of Adopting ASC 606 on Condensed Consolidated Statements of Financial Statements (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Jan. 01, 2018 | Dec. 31, 2017 | |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||||||
Total revenues | $ 3,573 | $ 2,415 | $ 9,322 | $ 5,973 | ||
Loss from operations | (36,004) | (34,211) | (100,139) | (78,367) | ||
Loss from continuing operations | (34,314) | (35,270) | (97,280) | (81,584) | ||
Income (loss) from discontinued operations | 2,606 | (830) | 2,807 | |||
Net loss | (34,314) | (32,664) | (98,110) | (78,777) | ||
Net loss attributable to stockholders of Arena | (34,314) | (32,353) | (98,110) | (77,723) | ||
Prepaid expenses and other current assets | 9,524 | 9,524 | $ 2,681 | |||
Total current assets | 572,477 | 572,477 | 281,280 | |||
Other non-current assets | 9,721 | 9,721 | 3,622 | |||
Total assets | 610,034 | 610,034 | 339,275 | |||
Current portion of deferred revenues | 800 | 800 | 1,110 | |||
Total current liabilities | 21,952 | 21,952 | 72,327 | |||
Deferred revenues, less current portion | 415 | 415 | 1,067 | |||
Accumulated deficit | (1,569,263) | (1,569,263) | (1,490,187) | |||
Total stockholders' equity | 531,316 | 531,316 | 207,144 | |||
Total liabilities and stockholders' equity | 610,034 | 610,034 | $ 339,275 | |||
Collaboration and Other Revenue | ||||||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||||||
Total revenues | 363 | 1,881 | 4,524 | 5,439 | ||
Royalty Revenue | ||||||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||||||
Total revenues | 3,210 | $ 534 | 4,798 | $ 534 | ||
ASC 606 | Adjustments | ||||||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||||||
Total revenues | (2,137) | (1,405) | ||||
Loss from operations | (2,137) | (1,405) | ||||
Loss from continuing operations | (2,137) | (257) | ||||
Income (loss) from discontinued operations | 13,660 | |||||
Net loss | (2,137) | 13,403 | ||||
Net loss attributable to stockholders of Arena | (2,137) | 13,403 | ||||
Prepaid expenses and other current assets | (1,310) | (1,310) | ||||
Total current assets | (1,310) | (1,310) | ||||
Other non-current assets | (4,252) | (4,252) | ||||
Total assets | (5,562) | (5,562) | ||||
Current portion of deferred revenues | 15 | 15 | ||||
Total current liabilities | 15 | 15 | ||||
Deferred revenues, less current portion | 52 | 52 | ||||
Accumulated deficit | (5,629) | (5,629) | $ (19,000) | |||
Total stockholders' equity | (5,629) | (5,629) | ||||
Total liabilities and stockholders' equity | (5,562) | (5,562) | ||||
ASC 606 | Adjustments | Collaboration and Other Revenue | ||||||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||||||
Total revenues | 5 | 49 | ||||
ASC 606 | Adjustments | Royalty Revenue | ||||||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||||||
Total revenues | (2,142) | (1,454) | ||||
ASC 606 | Balances without adoption of ASC 606 | ||||||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||||||
Total revenues | 1,436 | 7,917 | ||||
Loss from operations | (38,141) | (101,544) | ||||
Loss from continuing operations | (36,451) | (97,537) | ||||
Income (loss) from discontinued operations | 12,830 | |||||
Net loss | (36,451) | (84,707) | ||||
Net loss attributable to stockholders of Arena | (36,451) | (84,707) | ||||
Prepaid expenses and other current assets | 8,214 | 8,214 | ||||
Total current assets | 571,167 | 571,167 | ||||
Other non-current assets | 5,469 | 5,469 | ||||
Total assets | 604,472 | 604,472 | ||||
Current portion of deferred revenues | 815 | 815 | ||||
Total current liabilities | 21,967 | 21,967 | ||||
Deferred revenues, less current portion | 467 | 467 | ||||
Accumulated deficit | (1,574,892) | (1,574,892) | ||||
Total stockholders' equity | 525,687 | 525,687 | ||||
Total liabilities and stockholders' equity | 604,472 | 604,472 | ||||
ASC 606 | Balances without adoption of ASC 606 | Collaboration and Other Revenue | ||||||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||||||
Total revenues | 368 | 4,573 | ||||
ASC 606 | Balances without adoption of ASC 606 | Royalty Revenue | ||||||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||||||
Total revenues | $ 1,068 | $ 3,344 |
Basis of Presentation - Summa_2
Basis of Presentation - Summary of Revenue Disaggregated by Major Customers, Timing of Revenue Recognition and Revenue Classification (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Disaggregation Of Revenue [Line Items] | ||||
Revenue | $ 3,573 | $ 11,829 | ||
Revenue from continuing operations | 3,573 | $ 2,415 | 9,322 | $ 5,973 |
Revenue reported under discontinued operations | $ 5,533 | 2,507 | $ 15,091 | |
Revenue recognized at a point in time | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenue | 2,493 | 7,770 | ||
Revenue recognized over time | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenue | 1,080 | 4,059 | ||
Eisai | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenue | 3,210 | 6,300 | ||
Outpost | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenue | 2,750 | |||
Axovant | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenue | 200 | 968 | ||
Siegfried | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenue | 942 | |||
Boehringer Ingelheim | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenue | $ 163 | 785 | ||
Other | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenue | $ 84 |
Basis of Presentation - Summa_3
Basis of Presentation - Summary of Changes in Contract Assets and Deferred Revenues (Detail) $ in Thousands | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Change In Contract With Customer Asset Liability And Deferred Revenues [Line Items] | |
Contract Assets - Current, Beginning balance | $ 1,400 |
Contract Assets - Current, Reductions of contract assets | (2,096) |
Contract Assets - Current, Impact of the disposal of the Manufacturing Operations (see Note 2) | (4,543) |
Contract Asset - Current, Foreign currency translation adjustment | 145 |
Contract Assets - Current, Recognized as revenue during the period | 277 |
Contract Assets - Current, Ending balance | 1,310 |
Contract Assets - Non-Current, Beginning balance | 2,700 |
Contract Assets - Non-Current, Reductions of contract assets | (659) |
Contract Assets - Non-Current, Recognized as revenue during the period | 2,217 |
Contract Assets - Non-Current, Ending balance | 4,252 |
Current Portion of Deferred Revenues, Beginning balance | 26,560 |
Current Portion of Deferred Revenues, Recognized as revenue during the period | (234) |
Current Portion of Deferred Revenues, Ending balance | 800 |
Deferred Revenues less Current Portion, Beginning balance | 1,067 |
Deferred Revenues less Current Portion, Recognized as revenue during the period | (612) |
Deferred Revenues less Current Portion, Ending balance | 415 |
ASC 606 | Difference between Revenue Guidance in Effect before and after Topic 606 | |
Change In Contract With Customer Asset Liability And Deferred Revenues [Line Items] | |
Contract Assets - Current, Implementation adjustments | 7,527 |
Contract Assets - Non-Current, Implementation adjustments | 2,694 |
Current Portion of Deferred Revenues, Implementation adjustments | (25,526) |
Deferred Revenues less Current Portion, Implementation adjustments | (40) |
Deferred Revenues less Current Portion, Ending balance | $ 52 |
Basis of Presentation - Summa_4
Basis of Presentation - Summary of Estimated Revenue Expected to be Recognized in Future Related to Performance Obligations (Details) $ in Thousands | Sep. 30, 2018USD ($) |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue remaining performance obligations | $ 3,444 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2018-10-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue remaining performance obligations | $ 678 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 3 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2019-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue remaining performance obligations | $ 2,080 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2020-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue remaining performance obligations | $ 686 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year |
Basis of Presentation - Summa_5
Basis of Presentation - Summary of Estimated Revenue Expected to be Recognized in Future Related to Performance Obligations (Details 1) $ in Thousands | Sep. 30, 2018USD ($) |
Revenue Performance Obligation [Abstract] | |
Revenue remaining performance obligations | $ 3,444 |
Basis of Presentation - Reconci
Basis of Presentation - Reconciliation of Components of Cash, Cash Equivalents, and Restricted Cash (Detail) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Cash Cash Equivalents Restricted Cash And Restricted Cash Equivalents [Abstract] | ||
Cash and cash equivalents | $ 508,663 | $ 158,837 |
Restricted cash included in other non-current assets | $ 863 | $ 863 |
Restricted Cash, Asset, Statement of Financial Position [Extensible List] | us-gaap:OtherAssetsNoncurrent | us-gaap:OtherAssetsNoncurrent |
Total cash, cash equivalents and restricted cash presented in the condensed consolidated statement of cash flows | $ 509,526 | $ 159,700 |
Sale of Manufacturing Operati_3
Sale of Manufacturing Operations - Additional Information (Detail) SFr in Millions | 1 Months Ended | |
Mar. 31, 2018CHF (SFr) | Sep. 30, 2018employee | |
Siegfried | ||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | ||
Number of employees transferred | employee | 50 | |
Arena Gmb H | ||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | ||
Sales price of business | SFr 4 | |
Cash received from sale of business | SFr 3 |
Sale of Manufacturing Operati_4
Sale of Manufacturing Operations - Summary of Discontinued Operations for Periods Presented in the Condensed Consolidated Statements of Operations (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenues | |||
Net product sales | $ 3,075 | $ 1,129 | $ 7,845 |
Other collaboration revenue | 1,689 | 372 | 5,005 |
Toll manufacturing | 769 | 1,006 | 2,241 |
Total revenues | 5,533 | 2,507 | 15,091 |
Costs and expenses | |||
Cost of product sales | 1,739 | 1,858 | 5,768 |
Cost of toll manufacturing | 1,222 | 1,411 | 3,215 |
Research and development | 74 | 463 | |
General and administrative | 373 | 329 | 1,103 |
Other (income) expenses, net | (481) | 464 | 1,735 |
Total costs and expenses | 2,927 | 4,062 | 12,284 |
Income (loss) from operations of discontinued operations | 2,606 | (1,555) | 2,807 |
Gain on sale of discontinued operations | 725 | ||
Income (loss) from discontinued operations | $ 2,606 | $ (830) | $ 2,807 |
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 | Sep. 30, 2018 | Dec. 31, 2017 |
Assets: | ||
Money market funds | $ 454,270 | $ 48,750 |
Corporate debt instruments | 52,961 | 94,639 |
US government and government agency notes | 50,335 | |
Quoted Prices in Active Markets (Level 1) | ||
Assets: | ||
Money market funds | 454,270 | 48,750 |
US government and government agency notes | 50,335 | |
Significant Other Observable Inputs (Level 2) | ||
Assets: | ||
Corporate debt instruments | $ 52,961 | $ 94,639 |
Investments, Available-for-Sa_3
Investments, Available-for-Sale - Schedule of Investments, Available-for-Sale (Detail) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Short-term investments, available-for-sale | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | $ 53,032 | $ 88,311 |
Gross Unrealized Losses | (71) | (71) |
Estimated Fair Value | 52,961 | 88,240 |
Short-term investments, available-for-sale | Corporate debt securities | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 53,032 | 53,438 |
Gross Unrealized Losses | (71) | (63) |
Estimated Fair Value | $ 52,961 | $ 53,375 |
Short-term investments, available-for-sale | Corporate debt securities | Minimum | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Maturity in years | 1 year | 1 year |
Short-term investments, available-for-sale | US government and government agency notes | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | $ 34,873 | |
Gross Unrealized Losses | (8) | |
Estimated Fair Value | $ 34,865 | |
Short-term 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 | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | $ 24,304 | |
Gross Unrealized Losses | (62) | |
Estimated Fair Value | 24,242 | |
Investments, available-for-sale | Corporate debt securities | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 24,304 | |
Gross Unrealized Losses | (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 |
Land, Property and Equipment -
Land, Property and Equipment - Land, Property and Equipment (Detail) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Property Plant And Equipment [Abstract] | ||
Cost | $ 88,793 | $ 88,244 |
Less accumulated depreciation and amortization | (60,957) | (58,113) |
Land, property and equipment, net | $ 27,836 | $ 30,131 |
Accounts Payable and Other Ac_3
Accounts Payable and Other Accrued Liabilities - Accounts Payable and Other Accrued Liabilities (Detail) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Payables And Accruals [Abstract] | ||
Accounts payable | $ 1,081 | $ 1,599 |
Accrued compensation | 5,732 | 5,255 |
Other accrued liabilities | 1,162 | 1,062 |
Total accounts payable and other accrued liabilities | $ 7,975 | $ 7,916 |
Collaborations - Additional Inf
Collaborations - Additional Information (Detail) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 22 Months Ended | ||||||
Jan. 31, 2018USD ($) | Dec. 31, 2016USD ($) | May 31, 2015USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2018CHF (SFr) | Dec. 31, 2017USD ($) | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||
Revenues | $ 3,573,000 | $ 2,415,000 | $ 9,322,000 | $ 5,973,000 | |||||||
Contract asset associated with agreement | $ 4,100,000 | ||||||||||
Payment received from Eisai | $ 10,000,000 | $ 10,000,000 | |||||||||
Estimated total transaction price associated with performance obligations | 3,444,000 | 3,444,000 | |||||||||
Royalty Revenue | |||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||
Revenues | 3,210,000 | 534,000 | 4,798,000 | 534,000 | |||||||
Eisai | |||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||
Additional milestone payments on achievement | 25,000,000 | $ 25,000,000 | |||||||||
Eisai | 9.5% Royalty Rate | |||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||
Royalty rate on annual net sales | 9.50% | ||||||||||
Eisai | 13.5% Royalty Rate | |||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||
Royalty rate on annual net sales | 13.50% | ||||||||||
Eisai | 18.5% Royalty Rate | |||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||
Royalty rate on annual net sales | 18.50% | ||||||||||
Lorcaserin | Lorcaserin Product | |||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||
Revenues | $ 250,000,000 | ||||||||||
Axovant | |||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||
Collaborative agreement upfront payments | $ 4,000,000 | ||||||||||
Additional milestone payments on achievement | 41,500,000 | 41,500,000 | |||||||||
Estimated total transaction price | 9,900,000 | 9,900,000 | |||||||||
Estimated total transaction price associated with performance obligations | 3,300,000 | 3,300,000 | |||||||||
Recognized revenues | 200,000 | 500,000 | 1,000,000 | 1,600,000 | |||||||
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 | |||||||||
Revenues | 200,000 | 1,300,000 | 800,000 | 3,800,000 | |||||||
Estimated total transaction price | 700,000 | 700,000 | |||||||||
Estimated total transaction price associated with performance obligations | 200,000 | $ 200,000 | |||||||||
Collaboration and license agreement extension description | We and Boehringer Ingelheim agreed to extend the original term of the Boehringer Ingelheim Agreement by twelve months through January 2019 | ||||||||||
Collaboration and license agreement extension period | 12 months | ||||||||||
Estimated total transaction price under original term recognized as revenue | $ 10,500,000 | ||||||||||
Eisai First Amended Agreement | |||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||
Collaborative agreement initiation date | 2012-05 | ||||||||||
Eisai Second Amended Agreement | |||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||
Collaborative agreement initiation date | 2013-11 | ||||||||||
Eisai Agreement | |||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||
Proceeds from sale of inventory | $ 10,000,000 | ||||||||||
Additional manufacturing support payments received | SFr | SFr 8,700,000 | ||||||||||
Estimated transaction price | $ 344,400,000 | ||||||||||
Reduction in deferred revenue associated with agreement | 25,500,000 | ||||||||||
Contract asset associated with agreement | 6,100,000 | 6,100,000 | |||||||||
Estimated future royalty payments | 4,100,000 | ||||||||||
Reversal balance of hand on inventory | 3,600,000 | ||||||||||
Deferred revenues | $ 25,500,000 | ||||||||||
Eisai Agreement | Royalty Revenue | |||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||
Revenues | 3,200,000 | 500,000 | 4,800,000 | 500,000 | |||||||
Revenue resulting from adjustment to future estimated royalty payments | 2,500,000 | ||||||||||
Prior to Transaction Agreement | |||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||
Collaborative agreement upfront payments | 115,000,000 | ||||||||||
Prior to Transaction Agreement | Ildong | |||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||
Additional milestone payments on achievement | $ 102,100,000 | 102,100,000 | |||||||||
Prior to Commercial Distribution Agreement | |||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||
Collaborative agreement upfront payments | 7,500,000 | ||||||||||
Supply Agreement | Product Sales | |||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||
Revenues | $ 4,800,000 | 1,500,000 | $ 12,900,000 | ||||||||
Maximum | Eisai | 9.5% Royalty Rate | |||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||
Royalty portion of annual net sales amount | 175,000,000 | ||||||||||
Maximum | Eisai | 13.5% Royalty Rate | |||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||
Royalty portion of annual net sales amount | 500,000,000 | ||||||||||
Minimum | Eisai | 13.5% Royalty Rate | |||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||
Royalty portion of annual net sales amount | 175,000,000 | ||||||||||
Minimum | Eisai | 18.5% Royalty Rate | |||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||
Royalty portion of annual net sales amount | $ 500,000,000 | ||||||||||
Outpost Medicine, LLC | |||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||
Collaborative agreement upfront payments | $ 3,000,000 | ||||||||||
Collaborative agreement upfront payments in the form of equity interest | 1,500,000 | ||||||||||
Outpost Medicine, LLC | Maximum | |||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||
Additional milestone payments on achievement | $ 96,500,000 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | |
Mar. 31, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | |
Stockholders Equity [Line Items] | |||
Aggregate gross proceeds from sale of common stock | $ 388,479 | $ 248,329 | |
Underwritten Public Offering | Common Stock | |||
Stockholders Equity [Line Items] | |||
Sale of common stock shares | 9,775,000 | ||
Aggregate gross proceeds from sale of common stock | $ 383,100 |
Share-based Compensation - Shar
Share-based Compensation - Share Based Compensation Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 5,167 | $ 1,890 | $ 13,741 | $ 5,858 |
Research and development | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | 2,269 | 380 | 5,836 | 1,335 |
General and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 2,898 | 1,497 | 7,894 | 4,423 |
Discontinued operations | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 13 | $ 11 | $ 100 |
Share-based Compensation - Summ
Share-based Compensation - Summary of Stock Option Activity (Detail) - Stock options shares in Thousands | 9 Months Ended |
Sep. 30, 2018$ / sharesshares | |
Number of stock options | |
Outstanding at January 1, 2018 | shares | 3,755 |
Granted | shares | 3,075 |
Exercised | shares | (288) |
Forfeited/cancelled/expired | shares | (326) |
Outstanding at September 30, 2018 | shares | 6,216 |
Weighted- Average Exercise Price | |
Outstanding at January 1, 2018 | $ / shares | $ 20 |
Granted | $ / shares | 37.64 |
Exercised | $ / shares | 18.54 |
Forfeited/cancelled/expired | $ / shares | 33.69 |
Outstanding at September 30, 2018 | $ / shares | $ 28.08 |
Share-based Compensation - Addi
Share-based Compensation - Additional Information (Detail) - Performance restricted stock units - shares | 1 Months Ended | 9 Months Ended |
Mar. 31, 2015 | Sep. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 3 years | |
Shares issued | 32,322 |
Income (Loss) Per Share - Poten
Income (Loss) Per Share - Potentially Dilutive Securities Excluded from Calculation of Diluted Income (Loss) Per Share (Detail) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total antidilutive securities excluded from calculation of diluted net loss per share (shares) | 5,942 | 3,865 | 5,687 | 3,670 |
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) | 5,918 | 3,862 | 5,669 | 3,667 |
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) | 24 | 3 | 18 | 3 |
Income (Loss) Per Share - Addit
Income (Loss) Per Share - Additional Information (Detail) | Sep. 30, 2018shares |
Performance restricted stock units | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Number of shares outstanding PRSUs | 0 |
Legal Proceedings - Additional
Legal Proceedings - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2017 | Dec. 31, 2017 | Nov. 30, 2017 | |
Loss Contingencies [Line Items] | ||||
Accrued litigation settlement | $ 24,000 | |||
Litigation settlement expense, net | $ 11,975 | $ 11,975 | ||
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 |
Beacon Discovery, Inc. - Additi
Beacon Discovery, Inc. - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Variable Interest Entity [Line Items] | ||||
Revenues | $ 3,573,000 | $ 2,415,000 | $ 9,322,000 | $ 5,973,000 |
Net income | (34,314,000) | (32,353,000) | (98,110,000) | (77,723,000) |
Net loss attributable to noncontrolling interest in consolidated variable interest entity | (311,000) | (1,054,000) | ||
Prepaid Expenses and Other Current Assets | ||||
Variable Interest Entity [Line Items] | ||||
Note receivable from Beacon, balance | 500,000 | 500,000 | ||
Variable Interest Entity, Primary Beneficiary | Beacon Discovery, Inc. | ||||
Variable Interest Entity [Line Items] | ||||
Total assets Beacon's excluded from consolidated balance sheet | 6,700,000 | 6,700,000 | ||
Total liabilities Beacon's excluded from consolidated balance sheet | 7,900,000 | 7,900,000 | ||
Revenues | 600,000 | 700,000 | 4,700,000 | 2,000,000 |
Net income | 1,100,000 | 500,000 | ||
Revenues from third parties | 0 | 700,000 | ||
Net loss attributable to noncontrolling interest in consolidated variable interest entity | $ (300,000) | $ (1,100,000) | ||
Variable Interest Entity, Primary Beneficiary | Beacon Discovery, Inc. | Maximum | ||||
Variable Interest Entity [Line Items] | ||||
Total stockholders' deficit Beacon's excluded from consolidated balance sheet | $ 1,200,000 | $ 1,200,000 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) $ in Millions | Oct. 31, 2018USD ($) |
Subsequent Event | Everest Medicines Limited | |
Subsequent Event [Line Items] | |
Milestone payment earned | $ 1 |