Arena Pharmaceuticals (ARNA) 10-Q 5 Aug 20 2020 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2020	Jul. 31, 2020
Cover [Abstract]
Entity Registrant Name	ARENA PHARMACEUTICALS, INC.
Trading Symbol	ARNA
Entity Central Index Key	0001080709
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Document Type	10-Q
Document Period End Date	Jun. 30, 2020
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q2
Amendment Flag	false
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Shell Company	false
Entity File Number	000-31161
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	23-2908305
Entity Address, Address Line One	6154 Nancy Ridge Drive
Entity Address, City or Town	San Diego
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	92121
City Area Code	858
Local Phone Number	453.7200
Entity Common Stock, Shares Outstanding		57,646,937
Document Quarterly Report	true
Document Transition Report	false
Title of 12(b) Security	Common Stock, par value $0.0001 per share
Security Exchange Name	NASDAQ

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 550,176	$ 243,274
Short-term investments, available-for-sale	620,458	496,291
Prepaid expenses and other current assets	33,296	20,369
Total current assets	1,203,930	759,934
Investments, available-for-sale	94,838	370,938
Land, property and equipment, net	23,769	25,128
Other non-current assets	17,213	18,123
Total assets	1,339,750	1,174,123
Current liabilities:
Accounts payable and other accrued liabilities	18,339	25,499
Accrued clinical and preclinical study fees	19,432	15,654
Current portion of lease financing obligations	4,100	3,814
Total current liabilities	41,871	44,967
Other long-term liabilities	11,744	12,078
Lease financing obligations, less current portion	43,498	45,613
Commitments and contingencies
Stockholders' equity:
Common stock	6	5
Additional paid-in capital	2,528,112	2,173,154
Accumulated other comprehensive income	2,651	1,303
Accumulated deficit	(1,288,132)	(1,102,997)
Total stockholders' equity	1,242,637	1,071,465
Total liabilities and stockholders' equity	$ 1,339,750	$ 1,174,123

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Revenues:
Total revenues		$ 1,022	$ 262	$ 802,079
Operating Costs and Expenses:
Research and development	$ 64,946	51,211	143,479	96,607
General and administrative	22,877	18,367	49,319	34,945
Transaction costs				14,573
Total operating costs and expenses	87,823	69,578	192,798	146,125
Income (loss) from operations	(87,823)	(68,556)	(192,536)	655,954
Interest and Other Income (Expense):
Interest income	3,065	7,595	8,011	14,082
Interest expense	(1,144)	(1,222)	(2,307)	(2,463)
Other income	974	780	1,697	1,491
Total interest and other income (expense), net	2,895	7,153	7,401	13,110
Income (loss) before income taxes	(84,928)	(61,403)	(185,135)	669,064
Income tax provision				(110,333)
Net income (loss)	$ (84,928)	$ (61,403)	$ (185,135)	$ 558,731
Net income (loss) per share, basic:	$ (1.61)	$ (1.24)	$ (3.59)	$ 11.27
Net income (loss) per share, diluted:	$ (1.61)	$ (1.24)	$ (3.59)	$ 10.86
Shares used in calculating net income (loss) per share, basic:	52,771	49,653	51,500	49,566
Shares used in calculating net income (loss) per share, diluted:	52,771	49,653	51,500	51,459
Comprehensive Income (Loss):
Net income (loss)	$ (84,928)	$ (61,403)	$ (185,135)	$ 558,731
Foreign currency translation gain (loss)	31	7	17	(12)
Unrealized gain on available-for-sale investments	2,495	798	1,331	1,474
Comprehensive income (loss)	$ (82,402)	(60,598)	(183,787)	560,193
Royalty Revenue
Revenues:
Total revenues		941	$ 262	1,914
Collaboration and Other Revenue
Revenues:
Total revenues		$ 81		165
United Therapeutics | Collaboration and License Revenue
Revenues:
Total revenues				$ 800,000

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Total	Underwriters	Common Stock	Common StockUnderwriters	Additional Paid-In Capital	Additional Paid-In CapitalUnderwriters	Accumulated Other Comprehensive Income (Loss)	Accumulated Deficit
Beginning Balance at Dec. 31, 2018	$ 606,258		$ 5		$ 2,106,960		$ (155)	$ (1,500,552)
Beginning Balance (in shares) at Dec. 31, 2018			49,422,991
Issuance of common stock upon exercise of options	3,364				3,364
Issuance of common stock upon exercise of options (in shares)			125,655
Share-based compensation expense	13,024				13,024
Unrealized gain (loss) on available-for-sale investments	676						676
Translation gain (loss)	(19)						(19)
Net income (loss)	620,134							620,134
Ending Balance at Mar. 31, 2019	1,243,437		$ 5		2,123,348		502	(880,418)
Ending Balance (in shares) at Mar. 31, 2019			49,548,646
Beginning Balance at Dec. 31, 2018	606,258		$ 5		2,106,960		(155)	(1,500,552)
Beginning Balance (in shares) at Dec. 31, 2018			49,422,991
Translation gain (loss)	(12)
Net income (loss)	558,731
Ending Balance at Jun. 30, 2019	1,200,989		$ 5		2,141,498		1,307	(941,821)
Ending Balance (in shares) at Jun. 30, 2019			49,802,573
Beginning Balance at Mar. 31, 2019	1,243,437		$ 5		2,123,348		502	(880,418)
Beginning Balance (in shares) at Mar. 31, 2019			49,548,646
Issuance of common stock upon exercise of options	4,722				4,722
Issuance of common stock upon exercise of options (in shares)			229,565
Issuance of common stock upon vesting of restricted stock unit awards (in shares)			24,362
Share-based compensation expense	13,428				13,428
Unrealized gain (loss) on available-for-sale investments	798						798
Translation gain (loss)	7						7
Net income (loss)	(61,403)							(61,403)
Ending Balance at Jun. 30, 2019	1,200,989		$ 5		2,141,498		1,307	(941,821)
Ending Balance (in shares) at Jun. 30, 2019			49,802,573
Beginning Balance at Dec. 31, 2019	1,071,465		$ 5		2,173,154		1,303	(1,102,997)
Beginning Balance (in shares) at Dec. 31, 2019			50,170,953
Issuance of common stock upon exercise of options	3,191				3,191
Issuance of common stock upon exercise of options (in shares)			125,761
Share-based compensation expense	15,214				15,214
Unrealized gain (loss) on available-for-sale investments	(1,164)						(1,164)
Translation gain (loss)	(14)						(14)
Net income (loss)	(100,207)							(100,207)
Ending Balance at Mar. 31, 2020	988,485		$ 5		2,191,559		125	(1,203,204)
Ending Balance (in shares) at Mar. 31, 2020			50,296,714
Beginning Balance at Dec. 31, 2019	1,071,465		$ 5		2,173,154		1,303	(1,102,997)
Beginning Balance (in shares) at Dec. 31, 2019			50,170,953
Translation gain (loss)	17
Net income (loss)	(185,135)
Ending Balance at Jun. 30, 2020	1,242,637		$ 6		2,528,112		2,651	(1,288,132)
Ending Balance (in shares) at Jun. 30, 2020			57,574,878
Beginning Balance at Mar. 31, 2020	988,485		$ 5		2,191,559		125	(1,203,204)
Beginning Balance (in shares) at Mar. 31, 2020			50,296,714
Issuance of common stock		$ 301,754		$ 1		$ 301,753
Issuance of common stock (in shares)				6,325,000
Issuance of common stock upon exercise of options	21,089				21,089
Issuance of common stock upon exercise of options (in shares)			903,641
Issuance of common stock under employee stock purchase plan and upon vesting of restricted stock unit awards	1,475				1,475
Issuance of common stock under employee stock purchase plan and upon vesting of restricted stock unit awards (in shares)			49,523
Share-based compensation expense	12,236				12,236
Unrealized gain (loss) on available-for-sale investments	2,495						2,495
Translation gain (loss)	31						31
Net income (loss)	(84,928)							(84,928)
Ending Balance at Jun. 30, 2020	$ 1,242,637		$ 6		$ 2,528,112		$ 2,651	$ (1,288,132)
Ending Balance (in shares) at Jun. 30, 2020			57,574,878

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Operating Activities:
Net income (loss)	$ (185,135)	$ 558,731
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	1,921	1,555
Deferred income taxes		110,333
Share-based compensation	27,450	26,452
Amortization of prepaid financing costs	45	45
Amortization of original issue discounts, net of premiums, on available-for-sale investments	(301)	(3,428)
Changes in operating assets and liabilities:
Accounts receivable	1,759	3,262
Prepaid expenses and other assets	(12,660)	(12,441)
Payables and accrued liabilities	(4,230)	(1,182)
Deferred rent	(647)	(789)
Net cash provided by (used in) operating activities	(171,798)	682,538
Investing Activities:
Purchases of available-for-sale investments	(462,724)	(909,731)
Proceeds from sale and maturity of available-for-sale investments	616,289	259,784
Purchases of property and equipment	(562)	(1,934)
Net cash provided by (used in) investing activities - continuing operations	153,003	(651,881)
Net cash provided by investing activities - discontinued operations		997
Net cash provided by (used in) investing activities	153,003	(650,884)
Financing Activities:
Principal payments on lease financing obligations	(1,829)	(1,570)
Proceeds from issuance of common stock, net	327,509	8,086
Net cash provided by financing activities	325,680	6,516
Effect of exchange rate changes on cash	17	(11)
Net increase in cash, cash equivalents and restricted cash	306,902	38,159
Cash, cash equivalents and restricted cash at beginning of period	243,500	161,900
Cash, cash equivalents and restricted cash at end of period	$ 550,402	$ 200,059

Basis of Presentation

Basis of Presentation	6 Months Ended
	Jun. 30, 2020
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, 2019, as filed with the Securities and Exchange Commission, or SEC, from which we derived our condensed consolidated balance sheet as of December 31, 2019. 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, particularly in light of the pandemic of coronavirus disease 2019, or COVID-19, and its impact on domestic and global economies. To limit the spread of COVID-19, governments have taken various actions including the issuance of stay-at-home orders and social distancing guidelines, causing some businesses to suspend operations and or experience a reduction in demand for many products from direct or ultimate customers. Accordingly, businesses have adjusted, reduced or suspended operating activities. Beginning the week of March 16, 2020, substantially all of our workforce began working from home, either all or substantially all of the time. Liquidity. As of June 30, 2020, we had cash, cash equivalents and available-for-sale investments of approximately $1.3 billion. We believe our cash, 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 collaborations, 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. Our ability to raise additional funds may be adversely impacted by potential worsening global economic conditions and the recent disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting from the ongoing COVID-19 pandemic. If we are not able to secure adequate additional funding, we may be forced to make reductions in spending, extend payment terms with our clinical research organizations and 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. Reclassifications. Certain prior period amounts have been reclassified to conform to the current period presentation. Contingencies. We disclose information regarding each material claim where the likelihood of a loss contingency is probable or reasonably possible. 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. New Accounting Pronouncements. In June 2016, the Financial Accounting Standards Board, or FASB, issued new accounting guidance codified in Accounting Standard Codification 326, Financial Instruments - Credit Losses Concentrations of Credit Risk. Our 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 losses by holding our cash primarily in US dollars or placing our cash and investments in US government, agency or government-sponsored enterprise obligations and in corporate debt instruments that are rated investment grade.

Cash, Cash Equivalents and Rest

Cash, Cash Equivalents and Restricted Cash	6 Months Ended
	Jun. 30, 2020
Cash Cash Equivalents Restricted Cash And Restricted Cash Equivalents [Abstract]
Cash, Cash Equivalents and Restricted Cash	2. Cash, cash equivalents and restricted cash The following table provides a reconciliation of the components of cash, cash equivalents and restricted cash reported in the accompanying condensed consolidated balance sheets to the total of the amount presented in the condensed consolidated statements of cash flows, in thousands: June 30, December 31, 2020 2019 Cash and cash equivalents $ 550,176 $ 243,274 Restricted cash included in other non-current assets 226 226 Total cash, cash equivalents and restricted cash presented in the condensed consolidated statements of cash flows $ 550,402 $ 243,500 The restricted cash relates to our property leases. The restriction will lapse when the related leases expire.

Fair Value Disclosures

Fair Value Disclosures	6 Months Ended
	Jun. 30, 2020
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 Using Balance Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) June 30, 2020: Assets: Money market funds(1) $ 474,015 $ 474,015 $ — $ — US government and government agency notes(2) 432,723 432,723 — — Corporate debt instruments(2) 282,574 — 282,574 — . December 31, 2019: Assets: Money market funds(1) $ 147,752 $ 147,752 $ — $ — US government and government agency notes(3) 398,419 398,419 — — Corporate debt instruments(3) 483,788 — 483,788 — (1) Included in cash and cash equivalents in the accompanying (2) Included in available-for-sale investments in the accompanying consolidated balance sheets. (3) Included in either cash and cash equivalents or available-for-sale investments in the accompanying consolidated balance sheets.

Investments, Available-for-Sale

Investments, Available-for-Sale	6 Months Ended
	Jun. 30, 2020
Investments Debt And Equity Securities [Abstract]
Investments, Available-for-Sale	4. Investments, Available-for-Sale I nvestments, available-for-sale, consisted of the following June 30, 2020: Maturity in years Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value US government and government agency notes < 1 $ 360,053 $ 762 $ (35 ) $ 360,780 Corporate debt securities < 1 258,121 1,573 (16 ) 259,678 Short-term investments, available-for-sale $ 618,174 $ 2,335 $ (51 ) $ 620,458 US government and government agency notes 1 – 5 $ 71,863 $ 79 $ — $ 71,942 Corporate debt securities 1 – 5 22,705 191 — 22,896 Investments, available-for-sale $ 94,568 $ 270 $ — $ 94,838 December 31, 2019: Maturity in years Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value US government and government agency notes < 1 $ 201,046 $ 292 $ (5 ) $ 201,333 Corporate debt securities < 1 294,481 495 (18 ) 294,958 Short-term investments, available-for-sale $ 495,527 $ 787 $ (23 ) $ 496,291 US government and government agency notes 1 – 5 $ 197,157 $ 85 $ (155 ) $ 197,087 Corporate debt securities 1 – 5 173,322 603 (74 ) 173,851 Investments, available-for-sale $ 370,479 $ 688 $ (229 ) $ 370,938

Land, Property and Equipment

Land, Property and Equipment	6 Months Ended
	Jun. 30, 2020
Property Plant And Equipment [Abstract]
Land, Property and Equipment	5. Land, Property and Equipment Land, property and equipment consisted of the following, in thousands: June 30, December 31, 2020 2019 Cost $ 74,483 $ 73,922 Less accumulated depreciation and amortization (50,714 ) (48,794 ) Land, property and equipment, net $ 23,769 $ 25,128

Accounts Payable and Other Accr

Accounts Payable and Other Accrued Liabilities	6 Months Ended
	Jun. 30, 2020
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: June 30, December 31, 2020 2019 Accounts payable $ 2,155 $ 6,043 Accrued compensation 11,249 14,329 Other accrued liabilities 4,935 5,127 Total accounts payable and other accrued liabilities $ 18,339 $ 25,499

Collaborations and License Agre

Collaborations and License Agreements	6 Months Ended
	Jun. 30, 2020
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Collaborations and License Agreements	7. Collaborations and License Agreements Refer to our Annual Report on Form 10-K for the year ended December 31, 2019, for more information on our significant collaboration and license agreements. In the first quarter of 2019, we received an upfront payment of $800.0 million under an exclusive license agreement with United Therapeutics. Under this agreement, we granted United Therapeutics an exclusive, worldwide, royalty-bearing license to develop, manufacture and commercialize ralinepag in any formulation. United Therapeutics is responsible for all development, manufacturing and commercialization of the licensed products globally.

Stockholders' Equity

Stockholders' Equity	6 Months Ended
	Jun. 30, 2020
Stockholders Equity Note [Abstract]
Stockholders' Equity	8. Stockholders’ Equity In June 2020, we completed the sale of an aggregate of 6,325,000 shares of our common stock in an underwritten public offering. Net proceeds from the offering were approximately $301.8 million after deducting underwriting discounts and commissions and offering expenses payable by us.

Share-based Compensation

Share-based Compensation	6 Months Ended
	Jun. 30, 2020
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 Six months ended June 30, June 30, 2020 2019 2020 2019 Research and development $ 6,262 $ 7,000 $ 12,853 $ 13,707 General and administrative 5,974 6,428 14,597 12,745 Total share-based compensation expense $ 12,236 $ 13,428 $ 27,450 $ 26,452 The following table summarizes our stock option activity during the six months ended June 30, 2020, in thousands (except per share data): Options Weighted- Average Exercise Price Outstanding at January 1, 2020 8,535 $ 34.31 Granted 2,411 46.22 Exercised (1,030 ) 23.59 Forfeited/cancelled/expired (492 ) 42.86 Outstanding at June 30, 2020 9,424 $ 38.08 In March 2020, a total of 138,104 Restricted Stock Units, or RSUs, were granted to employees in a company-wide grant. The RSUs vest over four years from the grant date. The grant-date fair value of $6.4 million is recognized as compensation expense over the vesting period.

Income (Loss) Per Share

Income (Loss) Per Share	6 Months Ended
	Jun. 30, 2020
Earnings Per Share [Abstract]
Income (Loss) Per Share	10. Income (Loss) Per Share We calculate basic and diluted income (loss) per share using the weighted-average number of shares of common stock outstanding during the period. Since we have a net loss for the three and six months ended June 30, 2020, 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) RSUs, and (iii) Performance-Based Restricted Stock Unit awards, or PRSUs, and our diluted net loss per share is the same as our basic net loss per share for those periods. 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 because they were anti-dilutive, in thousands: Three months ended Six months ended June 30, June 30, 2020 2019 2020 2019 Stock options 7,279 5,698 7,119 3,833 RSUs and PRSUs 256 203 232 2 Total 7,535 5,901 7,351 3,835

Basis of Presentation (Policies

Basis of Presentation (Policies)	6 Months Ended
	Jun. 30, 2020
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation The accompanying unaudited condensed consolidated financial statements of Arena Pharmaceuticals, Inc. should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2019, as filed with the Securities and Exchange Commission, or SEC, from which we derived our condensed consolidated balance sheet as of December 31, 2019. 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, particularly in light of the pandemic of coronavirus disease 2019, or COVID-19, and its impact on domestic and global economies. To limit the spread of COVID-19, governments have taken various actions including the issuance of stay-at-home orders and social distancing guidelines, causing some businesses to suspend operations and or experience a reduction in demand for many products from direct or ultimate customers. Accordingly, businesses have adjusted, reduced or suspended operating activities. Beginning the week of March 16, 2020, substantially all of our workforce began working from home, either all or substantially all of the time.
Liquidity	Liquidity. As of June 30, 2020, we had cash, cash equivalents and available-for-sale investments of approximately $1.3 billion. We believe our cash, 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 collaborations, 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. Our ability to raise additional funds may be adversely impacted by potential worsening global economic conditions and the recent disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting from the ongoing COVID-19 pandemic. If we are not able to secure adequate additional funding, we may be forced to make reductions in spending, extend payment terms with our clinical research organizations and
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.
Reclassification	Reclassifications. Certain prior period amounts have been reclassified to conform to the current period presentation.
Contingencies	Contingencies. We disclose information regarding each material claim where the likelihood of a loss contingency is probable or reasonably possible. 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.
New Accounting Pronouncements	New Accounting Pronouncements. In June 2016, the Financial Accounting Standards Board, or FASB, issued new accounting guidance codified in Accounting Standard Codification 326, Financial Instruments - Credit Losses
Concentrations of Credit Risk	Concentrations of Credit Risk. Our 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 losses by holding our cash primarily in US dollars or placing our cash and investments in US government, agency or government-sponsored enterprise obligations and in corporate debt instruments that are rated investment grade.
Fair Value Measurements	We measure our financial assets and liabilities at fair value, which is defined as the exit price, or the amount that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. We use the following three-level valuation hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs to value our financial assets and liabilities: Level 1 - Observable inputs such as unadjusted quoted prices in active markets for identical instruments. Level 2 - Quoted prices for similar instruments in active markets or inputs that are observable for the asset or liability, either directly or indirectly. Level 3 - Significant unobservable inputs based on our assumptions.
Income (Loss) Per Share	We calculate basic and diluted income (loss) per share using the weighted-average number of shares of common stock outstanding during the period. Since we have a net loss for the three and six months ended June 30, 2020, 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) RSUs, and (iii) Performance-Based Restricted Stock Unit awards, or PRSUs, and our diluted net loss per share is the same as our basic net loss per share for those periods.

Cash, Cash Equivalents and Re_2

Cash, Cash Equivalents and Restricted Cash (Tables)	6 Months Ended
	Jun. 30, 2020
Cash Cash Equivalents Restricted Cash And Restricted Cash Equivalents [Abstract]
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 the accompanying condensed consolidated balance sheets to the total of the amount presented in the condensed consolidated statements of cash flows, in thousands: June 30, December 31, 2020 2019 Cash and cash equivalents $ 550,176 $ 243,274 Restricted cash included in other non-current assets 226 226 Total cash, cash equivalents and restricted cash presented in the condensed consolidated statements of cash flows $ 550,402 $ 243,500

Fair Value Disclosures (Tables)

Fair Value Disclosures (Tables)	6 Months Ended
	Jun. 30, 2020
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 Using Balance Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) June 30, 2020: Assets: Money market funds(1) $ 474,015 $ 474,015 $ — $ — US government and government agency notes(2) 432,723 432,723 — — Corporate debt instruments(2) 282,574 — 282,574 — . December 31, 2019: Assets: Money market funds(1) $ 147,752 $ 147,752 $ — $ — US government and government agency notes(3) 398,419 398,419 — — Corporate debt instruments(3) 483,788 — 483,788 — (1) Included in cash and cash equivalents in the accompanying (2) Included in available-for-sale investments in the accompanying consolidated balance sheets. (3) Included in either cash and cash equivalents or available-for-sale investments in the accompanying consolidated balance sheets.

Investments, Available-for-Sa_2

Investments, Available-for-Sale (Tables)	6 Months Ended
	Jun. 30, 2020
Investments Debt And Equity Securities [Abstract]
Schedule of Investments, Available-for-Sale	I nvestments, available-for-sale, consisted of the following June 30, 2020: Maturity in years Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value US government and government agency notes < 1 $ 360,053 $ 762 $ (35 ) $ 360,780 Corporate debt securities < 1 258,121 1,573 (16 ) 259,678 Short-term investments, available-for-sale $ 618,174 $ 2,335 $ (51 ) $ 620,458 US government and government agency notes 1 – 5 $ 71,863 $ 79 $ — $ 71,942 Corporate debt securities 1 – 5 22,705 191 — 22,896 Investments, available-for-sale $ 94,568 $ 270 $ — $ 94,838 December 31, 2019: Maturity in years Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value US government and government agency notes < 1 $ 201,046 $ 292 $ (5 ) $ 201,333 Corporate debt securities < 1 294,481 495 (18 ) 294,958 Short-term investments, available-for-sale $ 495,527 $ 787 $ (23 ) $ 496,291 US government and government agency notes 1 – 5 $ 197,157 $ 85 $ (155 ) $ 197,087 Corporate debt securities 1 – 5 173,322 603 (74 ) 173,851 Investments, available-for-sale $ 370,479 $ 688 $ (229 ) $ 370,938

Land, Property and Equipment (T

Land, Property and Equipment (Tables)	6 Months Ended
	Jun. 30, 2020
Property Plant And Equipment [Abstract]
Land, Property and Equipment	Land, property and equipment consisted of the following, in thousands: June 30, December 31, 2020 2019 Cost $ 74,483 $ 73,922 Less accumulated depreciation and amortization (50,714 ) (48,794 ) Land, property and equipment, net $ 23,769 $ 25,128

Accounts Payable and Other Ac_2

Accounts Payable and Other Accrued Liabilities (Tables)	6 Months Ended
	Jun. 30, 2020
Payables And Accruals [Abstract]
Accounts Payable and Other Accrued Liabilities	Accounts payable and other accrued liabilities consisted of the following, in thousands: June 30, December 31, 2020 2019 Accounts payable $ 2,155 $ 6,043 Accrued compensation 11,249 14,329 Other accrued liabilities 4,935 5,127 Total accounts payable and other accrued liabilities $ 18,339 $ 25,499

Share-based Compensation (Table

Share-based Compensation (Tables)	6 Months Ended
	Jun. 30, 2020
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Share Based Compensation Expense	We recognized share-based compensation expense as follows, in thousands: Three months ended Six months ended June 30, June 30, 2020 2019 2020 2019 Research and development $ 6,262 $ 7,000 $ 12,853 $ 13,707 General and administrative 5,974 6,428 14,597 12,745 Total share-based compensation expense $ 12,236 $ 13,428 $ 27,450 $ 26,452
Summary of Stock Option Activity	The following table summarizes our stock option activity during the six months ended June 30, 2020, in thousands (except per share data): Options Weighted- Average Exercise Price Outstanding at January 1, 2020 8,535 $ 34.31 Granted 2,411 46.22 Exercised (1,030 ) 23.59 Forfeited/cancelled/expired (492 ) 42.86 Outstanding at June 30, 2020 9,424 $ 38.08

Income (Loss) Per Share (Tables

Income (Loss) Per Share (Tables)	6 Months Ended
	Jun. 30, 2020
Earnings Per Share [Abstract]
Potentially Dilutive Securities Excluded from Calculation of Diluted 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 because they were anti-dilutive, in thousands: Three months ended Six months ended June 30, June 30, 2020 2019 2020 2019 Stock options 7,279 5,698 7,119 3,833 RSUs and PRSUs 256 203 232 2 Total 7,535 5,901 7,351 3,835

Basis of Presentation - Additio

Basis of Presentation - Additional Information (Detail) $ in Billions	Jun. 30, 2020USD ($)
Accounting Policies [Abstract]
Cash and cash equivalents and available-for-sale investments	$ 1.3

Cash, Cash Equivalents and Re_3

Cash, Cash Equivalents and Restricted Cash - Reconciliation of Components of Cash, Cash Equivalents and Restricted Cash (Detail) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Cash Cash Equivalents Restricted Cash And Restricted Cash Equivalents [Abstract]
Cash and cash equivalents	$ 550,176	$ 243,274
Restricted cash included in other non-current assets	$ 226	$ 226
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 statements of cash flows	$ 550,402	$ 243,500

Fair Value Disclosures - Financ

Fair Value Disclosures - Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - Fair Value Measurements, Recurring - USD ($) $ in Thousands		Jun. 30, 2020		Dec. 31, 2019
Assets:
Money market funds	[1]	$ 474,015		$ 147,752
US government and government agency notes		432,723	[2]	398,419	[3]
Corporate debt instruments		282,574	[2]	483,788	[3]
Quoted Prices in Active Markets (Level 1)
Assets:
Money market funds	[1]	474,015		147,752
US government and government agency notes		432,723	[2]	398,419	[3]
Significant Other Observable Inputs (Level 2)
Assets:
Corporate debt instruments		$ 282,574	[2]	$ 483,788	[3]
[1]	Included in cash and cash equivalents in the accompanying
[2]	Included in available-for-sale investments in the accompanying consolidated balance sheets.
[3]	(3) Included in either cash and cash equivalents or available-for-sale investments in the accompanying consolidated balance sheets.

Investments, Available-for-Sa_3

Investments, Available-for-Sale - Schedule of Investments, Available-for-Sale (Detail) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2020	Dec. 31, 2019
Short-term investments, available-for-sale
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	$ 618,174	$ 495,527
Gross Unrealized Gains	2,335	787
Gross Unrealized Losses	(51)	(23)
Estimated Fair Value	620,458	496,291
Short-term investments, available-for-sale | US government and government agency notes
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	360,053	201,046
Gross Unrealized Gains	762	292
Gross Unrealized Losses	(35)	(5)
Estimated Fair Value	360,780	201,333
Short-term investments, available-for-sale | Corporate debt securities
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	258,121	294,481
Gross Unrealized Gains	1,573	495
Gross Unrealized Losses	(16)	(18)
Estimated Fair Value	259,678	294,958
Investments, available-for-sale
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	94,568	370,479
Gross Unrealized Gains	270	688
Gross Unrealized Losses		(229)
Estimated Fair Value	94,838	370,938
Investments, available-for-sale | US government and government agency notes
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	71,863	197,157
Gross Unrealized Gains	79	85
Gross Unrealized Losses		(155)
Estimated Fair Value	$ 71,942	$ 197,087
Investments, available-for-sale | US government and government agency notes | Minimum
Schedule Of Available For Sale Securities [Line Items]
Maturity in years	1 year	1 year
Investments, available-for-sale | US government and government agency notes | Maximum
Schedule Of Available For Sale Securities [Line Items]
Maturity in years	5 years	5 years
Investments, available-for-sale | Corporate debt securities
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	$ 22,705	$ 173,322
Gross Unrealized Gains	191	603
Gross Unrealized Losses		(74)
Estimated Fair Value	$ 22,896	$ 173,851
Investments, available-for-sale | Corporate debt securities | Minimum
Schedule Of Available For Sale Securities [Line Items]
Maturity in years	1 year	1 year
Investments, available-for-sale | Corporate debt securities | Maximum
Schedule Of Available For Sale Securities [Line Items]
Maturity in years	5 years	5 years

Land, Property and Equipment -

Land, Property and Equipment - Land, Property and Equipment (Detail) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Property Plant And Equipment [Abstract]
Cost	$ 74,483	$ 73,922
Less accumulated depreciation and amortization	(50,714)	(48,794)
Land, property and equipment, net	$ 23,769	$ 25,128

Accounts Payable and Other Ac_3

Accounts Payable and Other Accrued Liabilities - Accounts Payable and Other Accrued Liabilities (Detail) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Payables And Accruals [Abstract]
Accounts payable	$ 2,155	$ 6,043
Accrued compensation	11,249	14,329
Other accrued liabilities	4,935	5,127
Total accounts payable and other accrued liabilities	$ 18,339	$ 25,499

Collaborations and License Ag_2

Collaborations and License Agreements - Additional Information (Detail) - United Therapeutics - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Mar. 31, 2019	Jun. 30, 2020
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Collaborative agreement upfront payments	$ 800
Collaborative arrangement right description		Under this agreement, we granted United Therapeutics an exclusive, worldwide, royalty-bearing license to develop, manufacture and commercialize ralinepag in any formulation.

Stockholders' Equity - Addition

Stockholders' Equity - Additional Information (Detail) - USD ($) $ in Thousands	1 Months Ended	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2020	Jun. 30, 2019
Stockholders Equity [Line Items]
Net proceeds from sale of aggregate shares of common stock		$ 327,509	$ 8,086
Underwritten Public Offering
Stockholders Equity [Line Items]
Sale of aggregate shares of common stock	6,325,000
Net proceeds from sale of aggregate shares of common stock	$ 301,800

Share-based Compensation - Shar

Share-based Compensation - Share Based Compensation Expense (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	$ 12,236	$ 13,428	$ 27,450	$ 26,452
Research and development
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	6,262	7,000	12,853	13,707
General and administrative
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	$ 5,974	$ 6,428	$ 14,597	$ 12,745

Share-based Compensation - Summ

Share-based Compensation - Summary of Stock Option Activity (Detail) - Stock options shares in Thousands	6 Months Ended
	Jun. 30, 2020$ / sharesshares
Number of stock options
Outstanding at January 1, 2020 | shares	8,535
Granted | shares	2,411
Exercised | shares	(1,030)
Forfeited/cancelled/expired | shares	(492)
Outstanding at June 30, 2020 | shares	9,424
Weighted Average Exercise Price ($ per share)
Outstanding at January 1, 2020 | $ / shares	$ 34.31
Granted | $ / shares	46.22
Exercised | $ / shares	23.59
Forfeited/cancelled/expired | $ / shares	42.86
Outstanding at June 30, 2020 | $ / shares	$ 38.08

Share-based Compensation - Addi

Share-based Compensation - Additional Information (Detail) - Restricted Stock Units (RSUs) [Member] $ in Millions	1 Months Ended
	Mar. 31, 2020USD ($)shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Units granted | shares	138,104
Vesting period	4 years
RSU grant-date fair value | $	$ 6.4

Income (Loss) Per Share - Poten

Income (Loss) Per Share - Potentially Dilutive Securities Excluded from Calculation of Diluted Net Income (Loss) Per Share (Detail) - shares shares in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total antidilutive securities excluded from calculation of diluted net loss per share (shares)	7,535	5,901	7,351	3,835
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)	7,279	5,698	7,119	3,833
RSUs and PRSUs
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total antidilutive securities excluded from calculation of diluted net loss per share (shares)	256	203	232	2