DURECT (DRRX) 10-Q 2 Aug 18 2018 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2018	Jul. 30, 2018
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2018
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q2
Trading Symbol	DRRX
Entity Registrant Name	DURECT CORP
Entity Central Index Key	1,082,038
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		162,001,652

Condensed Balance Sheets

Condensed Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 37,338	$ 29,375
Short-term investments	5,061	7,384
Accounts receivable (net of allowances of $57 at June 30, 2018 and $155 at December 31, 2017)	1,465	2,376
Inventories, net	3,263	3,163
Prepaid expenses and other current assets	2,691	3,060
Total current assets	49,818	45,358
Property and equipment, net	749	929
Goodwill	6,399	6,399
Long-term restricted investments	150	150
Other long-term assets	282	277
Total assets	57,398	53,113
Current liabilities:
Accounts payable	895	1,520
Accrued liabilities	4,520	5,511
Contract research liabilities	710	834
Deferred revenue, current portion	203	682
Term loan, current portion, net	7,520	7,281
Total current liabilities	13,848	15,828
Deferred revenue, non-current portion	623	1,093
Term loan, non-current portion, net	12,341	12,634
Other long-term liabilities	2,317	2,070
Commitments and contingencies
Stockholders’ equity:
Common stock	16	15
Additional paid-in capital	486,863	465,246
Accumulated other comprehensive loss		(1)
Accumulated deficit	(458,610)	(443,772)
Stockholders’ equity	28,269	21,488
Total liabilities and stockholders’ equity	$ 57,398	$ 53,113

Condensed Balance Sheets (Paren

Condensed Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Statement Of Financial Position [Abstract]
Allowances for accounts receivable	$ 57	$ 155

Condensed Statements of Compreh

Condensed Statements of Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Total revenues	$ 3,413	$ 4,319	$ 6,901	$ 8,886
Operating expenses:
Cost of product revenues	$ 1,084	$ 924	$ 2,258	$ 2,467
Type of cost, good or service [extensible list]	us-gaap:ProductMember	us-gaap:ProductMember	us-gaap:ProductMember	us-gaap:ProductMember
Research and development	$ 6,120	$ 9,079	$ 13,072	$ 16,627
Selling, general and administrative	2,816	3,681	6,010	6,724
Total operating expenses	10,020	13,684	21,340	25,818
Loss from operations	(6,607)	(9,365)	(14,439)	(16,932)
Other income (expense):
Interest and other income	240	39	398	75
Interest expense	(644)	(601)	(1,267)	(1,184)
Net other expense	(404)	(562)	(869)	(1,109)
Net loss	(7,011)	(9,927)	(15,308)	(18,041)
Net change in unrealized loss on available-for-sale securities, net of reclassification adjustments and taxes	1	2	1
Total comprehensive loss	$ (7,010)	$ (9,925)	$ (15,307)	$ (18,041)
Net loss per share
Basic	$ (0.04)	$ (0.07)	$ (0.10)	$ (0.13)
Diluted	$ (0.04)	$ (0.07)	$ (0.10)	$ (0.13)
Weighted-average shares used in computing net loss per share
Basic	161,621	142,532	157,612	142,176
Diluted	161,621	142,532	157,612	142,176
Collaborative Research and Development and Other Revenue [Member]
Total revenues	$ 645	$ 1,268	$ 1,741	$ 1,702
Product Revenue, Net [Member]
Total revenues	$ 2,768	$ 3,051	$ 5,160	$ 7,184

Condensed Statements of Cash Fl

Condensed Statements of Cash Flows - USD ($) $ in Thousands		6 Months Ended
		Jun. 30, 2018	Jun. 30, 2017
Cash flows from operating activities
Net loss		$ (15,308)	$ (18,041)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization		221	224
Stock-based compensation		1,300	1,228
Amortization of debt issuance cost		51	31
Net amortization (accretion) on investments		41	(65)
Changes in assets and liabilities:
Accounts receivable		911	(231)
Inventories		(98)	68
Prepaid expenses and other assets		364	(1,013)
Accounts payable		(625)	(303)
Accrued and other liabilities		1,122	1,154
Contract research liabilities		(124)	1,348
Deferred revenue		(479)	18,977
Total adjustments		2,684	21,418
Net cash (used in) provided by operating activities		(12,624)	3,377
Cash flows from investing activities
Purchases of property and equipment		(41)	(17)
Purchases of available-for-sale securities		(6,835)
Proceeds from maturities of available-for-sale securities		9,118	16,610
Net cash provided by investing activities		2,242	16,593
Cash flows from financing activities
Payments on equipment financing obligations		(6)	(6)
Payment of additional issuance cost for term loan		(105)
Net proceeds from issuances of common stock		18,456	5,037
Net cash provided by financing activities		18,345	5,031
Net increase in Cash, cash equivalents, and restricted cash		7,963	25,001
Cash, cash equivalents, and restricted cash, beginning of the period		29,525	5,554
Cash, cash equivalents, and restricted cash, end of the period	[1]	37,488	30,555
Supplementary disclosure of non-cash financing information
Fully vested options issued to settle accrued liabilities		$ 1,860	$ 1,600
[1]	Includes restricted cash of $150,000 (in long term restricted investments) included in the condensed balance sheets at both June 30, 2018 and June 30, 2017.

Condensed Statement of Cash Flo

Condensed Statement of Cash Flows (Parenthetical) - USD ($)	Jun. 30, 2018	Jun. 30, 2017
Long Term Restricted Investments [Member]
Restricted cash	$ 150,000	$ 150,000

Summary of Significant Accounti

Summary of Significant Accounting Policies	6 Months Ended
	Jun. 30, 2018
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	Note 1. Summary of Significant Accounting Policies Nature of Operations DURECT Corporation (the Company) was incorporated in the state of Delaware on February 6, 1998. The Company is a biopharmaceutical company with research and development programs broadly falling into two categories: (i) new chemical entities derived from our Epigenetics Regulator Program, in which we attempt to discover and develop molecules which have not previously been approved and marketed as therapeutics, and (ii) Drug Delivery Programs, in which we apply our formulation expertise and technologies largely to active pharmaceutical ingredients whose safety and efficacy have previously been established but which we aim to improve in some manner through a new formulation. The Company has several products under development by itself and with third party collaborators. The Company also manufactures and sells osmotic pumps used in laboratory research, and designs, develops and manufactures a wide range of standard and custom biodegradable polymers and excipients for pharmaceutical and medical device clients for use as raw materials in their products. In addition, the Company conducts research and development of pharmaceutical products in collaboration with third party pharmaceutical and biotechnology companies. Basis of Presentation The accompanying unaudited financial statements include the accounts of the Company. These financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (SEC), and therefore do not include all the information and footnotes necessary for a complete presentation of the Company’s results of operations, financial position and cash flows in conformity with U.S. generally accepted accounting principles (U.S. GAAP). The unaudited financial statements reflect all adjustments (consisting only of normal recurring adjustments) which are, in the opinion of management, necessary for a fair presentation of the financial position at June 30, 2018, the operating results and comprehensive loss for the three and six months ended June 30, 2018 and 2017, and cash flows for the six months ended June 30, 2018 and 2017. The balance sheet as of December 31, 2017 has been derived from audited financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. These financial statements and notes should be read in conjunction with the Company’s audited financial statements and notes thereto, included in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2017 filed with the SEC. The results of operations for the interim periods presented are not necessarily indicative of results that may be expected for any other interim period or for the full fiscal year. Liquidity and Need to Raise Additional Capital As of June 30, 2018, the Company had an accumulated deficit of $458.6 million as well as negative cash flows from operating activities for the six months ended June 30, 2018. The Company historically has had negative cash flows from operating activities and expects its negative cash flows to continue. The Company will continue to require substantial funds to continue research and development, including clinical trials of its product candidates. Management’s plans in order to meet its operating cash flow requirements include seeking additional collaborative agreements for certain of its programs and achieving milestone and other payments under its collaboration and licensing agreements as well as financing activities such as public offerings and private placements of its common stock, preferred stock offerings, issuances of debt and convertible debt instruments. There are no assurances that such additional funding will be obtained and that the Company will succeed in its future operations. If the Company cannot successfully raise additional capital and implement its strategic development plan, its liquidity, financial condition and business prospects will be materially and adversely affected. Inventories Inventories are stated at the lower of cost or net realizable value, with cost determined on a first-in, first-out basis. Inventories, in part, include certain excipients that are sold to a customer for a currently marketed animal health product and included in several products in development or awaiting regulatory approval. These inventories are capitalized based on management’s judgment of probable sale prior to their expiration dates. The valuation of inventory requires management to estimate the value of inventory that may become expired prior to use. The Company may be required to expense previously capitalized inventory costs upon a change in management’s judgment due to, among other potential factors, a denial or delay of approval of a customer’s product by the necessary regulatory bodies, or new information that suggests that the inventory will not be saleable. As of June 30, 2018, the remaining carrying value of the excipient in the Company’s inventory was $70,000. In the event that management determines that the Company will not utilize all of these materials, there could be a potential write-off related to this inventory. If the Company is able to subsequently sell products made with raw materials that were previously written down, the Company will report an unusually high gross profit as there will be no associated cost of goods for these materials. The Company’s inventories consist of the following (in thousands): June 30, 2018 December 31, 2017 (unaudited) Raw materials $ 247 $ 282 Work in process 1,401 1,182 Finished goods 1,615 1,699 Total inventories $ 3,263 $ 3,163 Revenue Recognition Effective January 1, 2018, the Company adopted FASB ASC Topic 606, Revenue from Contracts with Customers, or ASC 606. In accordance with ASC 606, the Company changed certain characteristics of its revenue recognition accounting policy as described below. ASC 606 was applied using the modified retrospective method, where the cumulative effect of the initial application was recognized as an adjustment to opening retained earnings at January 1, 2018. Therefore, comparative prior periods have not been adjusted and continue to be reported under FASB ASC Topic 605, Revenue Recognition, or ASC 605. The Company recorded a net increase to opening retained earnings of $470,000 with an offset entry to a contra liability account as of January 1, 2018 due to the cumulative impact of adopting Topic 606, with the impact relating to the Company’s deferred collaborative research and development revenues. There was no impact to reported total assets, revenues and operating expenses for the three and six months ended June 30, 2018 as a result of applying Topic 606. Product Revenue, Net The Company sells osmotic pumps used in laboratory research, and designs, develops and manufactures a wide range of standard and custom biodegradable polymers and excipients for pharmaceutical and medical device clients for use as raw materials in their products. Revenues from product sales are recognized when the customer obtains control of the Company’s product, which occurs at a point in time, typically upon shipment to the customer. The Company expenses incremental costs of obtaining a contract as and when incurred if the expected amortization period of the asset that the Company would have recognized is one year or less. Trade Discounts and Allowances: The Company provides certain customers with discounts that are explicitly stated in the Company’s contracts and are recorded as a reduction of revenue in the period the related product revenue is recognized. Product Returns: Consistent with industry practice, the Company generally offers customers a limited right of return for products that have been purchased from the Company. The Company estimates the amount of its product sales that may be returned by its customers and records this estimate as a reduction of revenue in the period the related product revenue is recognized. The Company currently estimates product return liabilities using its own historical sales information. The Company expects product returns to be minimal. Collaborative Research and Development Revenues The Company enters into license agreements which are within the scope of Topic 606, under which it licenses certain rights to its product candidates to third parties. The terms of these arrangements typically include payment to the Company of one or more of the following: non-refundable, up-front license fees; reimbursement of development costs incurred by the Company under approved work plans; development, regulatory and commercial milestone payments; payments for manufacturing supply services the Company provides through its contract manufacturers; and royalties on net sales of licensed products. Each of these payments results in collaborative research and development revenues, except for revenues from royalties on net sales of licensed products, which are classified as royalty revenues. In determining the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements, the Company performs the following steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. As part of the accounting for these arrangements, the Company must develop assumptions that require judgment to determine the stand-alone selling price for each performance obligation identified in the contract. The Company uses key assumptions to determine the stand-alone selling price, which may include forecasted revenues, development timelines, reimbursement rates for personnel costs, discount rates and probabilities of technical and regulatory success. The Company expects to recognize revenue for the variable consideration currently being constrained when it is probable that a significant revenue reversal will not occur. Licenses of intellectual property: If the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenues from non-refundable, up-front fees allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license. For licenses that are bundled with other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from non-refundable, up-front fees. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. Milestone Payments: At the inception of each arrangement that includes development milestone payments, the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the control of the Company or the licensee, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. The transaction price is then allocated to each performance obligation on a relative stand-alone selling price basis, for which the Company recognizes revenue as or when the performance obligations under the contract are satisfied. At the end of each subsequent reporting period, the Company re-evaluates the probability of achievement of such development milestones and any related constraint, and if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect collaborative research and development revenues and net income (loss) in the period of adjustment. Manufacturing Supply Services: Arrangements that include a promise for future supply of drug product for either clinical development or commercial supply at the customer’s discretion are generally considered as options. The Company assesses if these options provide a material right to the licensee and if so, they are accounted for as separate performance obligations. If the Company is entitled to additional payments when the customer exercises these options, any additional payments are recorded in collaborative research and development revenue when the customer obtains control of the goods, which is upon delivery. Royalties and Earn-outs: For arrangements that include sales-based royalties or earn-outs, including milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). To date, the Company has not recognized any significant royalty revenue resulting from our collaborative arrangements or any earn-out revenue from our patent purchase agreement with Indivior. The Company receives payments from its customers based on development cost schedules established in each contract. Up-front payments and fees are recorded as deferred revenue upon receipt or when due, and may require deferral of revenue recognition to a future period until the Company performs its obligations under these arrangements. Amounts are recorded as accounts receivable when the Company’s right to consideration is unconditional. The Company does not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the customer and the transfer of the promised goods or services to the customer will be one year or less. Total revenue by geographic region for the three and six months ended June 30, 2018 and 2017 are as follows (in thousands): Three months ended June 30, Six months ended June 30, 2018 2017 2018 2017 United States $ 2,124 $ 2,273 $ 4,198 $ 5,374 Europe 745 1,200 1,503 1,677 Japan 285 407 572 770 Other 259 439 628 1,065 Total $ 3,413 $ 4,319 $ 6,901 $ 8,886 The cumulative effect of the changes made to our January 1, 2018 balance sheet for the adoption of ASC 606 Revenue – Revenue from Contract with Customers Balance at December 31, 2017 Adjustments Due to ASC606 Balance at January 1, 2018 Condensed Balance Sheets Liabilities Deferred revenue, non-current portion $ 1,093 $ 470 $ 623 Equity Accumulated deficit $ (443,772 ) $ 470 $ (443,302 ) During the three and six months ended June 30, 2018, the Company did not recognize any revenue as a result of changes in the contract asset and the contract liability balances associated with the Company’s deferred research and development revenues for the Company’s collaboration agreements as a result of adoption of ASC 606. In accordance with the new revenue standard requirements, the disclosure of the impact of adoption on condensed balance sheets, condensed statements of comprehensive loss, and condensed statements of cash flows for the period ended June 30, 2018 was as follows (in thousands): As of June 30, 2018 As reported Balances without adoption of ASC 606 Effect of change Higher/(Lower) Condensed Balance Sheets Liabilities Deferred revenue, non-current portion $ 623 $ 1,093 $ (470 ) For the six months ended June 30, 2018 As reported Balances without adoption of ASC 606 Effect of change Higher/(Lower) Condensed Statements of Comprehensive Loss Collaborative research and development and other revenue $ 1,741 $ 1,741 $ - Product revenue, net 5,160 5,160 - Total revenues $ 6,901 $ 6,901 $ - For the six months ended June 30, 2018 As reported Balances without adoption of ASC 606 Effect of change Higher/(Lower) Condensed Statements of Cash Flow Cash flow from Operating Activities Deferred revenue, non-current portion $ (479 ) $ - $ (479 ) For the reporting periods before January 1, 2018, revenue was recognized under ASC 605, Revenue Recognition Comprehensive Income (Loss) Components of other comprehensive income (loss) are comprised entirely of unrealized gains and losses on the Company’s available-for-sale securities for all periods presented. Total comprehensive loss has been presented in the Company’s Statements of Comprehensive Loss. Net Income (Loss) Per Share Basic net loss per share is calculated by dividing the net loss by the weighted-average number of common shares outstanding. Diluted net loss per share is computed using the weighted-average number of common shares outstanding and common stock equivalents (i.e., options to purchase common stock) outstanding during the period, if dilutive, using the treasury stock method for options. The numerators and denominators in the calculation of basic and diluted net loss per share were as follows (in thousands except per share amounts): Three months ended June 30, Six months ended June 30, 2018 2017 2018 2017 Numerators: Net loss (7,011 ) (9,927 ) (15,308 ) (18,041 ) Denominator: Weighted average shares used to compute basic net loss per share 161,621 142,532 157,612 142,176 Dilutive common shares from stock options and ESPP - - - - Weighted average shares used to compute diluted net loss per share 161,621 142,532 157,612 142,176 Net loss per share: Basic $ (0.04 ) $ (0.07 ) $ (0.10 ) $ (0.13 ) Diluted $ (0.04 ) $ (0.07 ) $ (0.10 ) $ (0.13 ) Options to purchase approximately 13.4 million and 14.7 million shares of common stock were excluded from the denominator in the calculation of diluted net loss per share for the three and six months ended June 30, 2018, respectively, as the effect would be anti-dilutive. Options to purchase approximately 26.2 million shares of common stock were excluded from the denominator in the calculation of diluted net loss per share for each of the three and six months ended June 30, 2017, respectively, as the effect would be anti-dilutive. Recent Accounting Pronouncements Recently Adopted Accounting Standards In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash.” The FASB issued the update to clarify how restricted cash or restricted cash equivalents should be presented in the statement of cash flows. The standard will be effective for fiscal years beginning after December 15, 2017, including interim periods within those years, and the guidance will generally be applied retroactively. The Company has adopted the amendments provided in ASU 2016-18 in these condensed financial statements to provide financial statement users with more transparent disclosure about restricted cash and restricted cash equivalents. Upon adoption, the amendments provided in this update are applied using a retrospective transition method to each period presented. The cash, cash equivalents, restricted cash, and restricted cash equivalents balance included $150,000 of restricted cash and restricted cash equivalents as of both June 30, 2018 and June 30, 2017. Restricted cash and restricted cash equivalents are included in long-term restricted investments in the accompanying condensed balance sheets as of June 30, 2018 and December 31, 2017, respectively. In March 2018, the FASB issued ASU 2018-05, “Income Taxes (Topic 740), Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118.” The ASU adds various Securities and Exchange Commission (“SEC”) paragraphs pursuant to the issuance of the December 2017 SEC Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”), which was effective immediately. The SEC issued SAB 118 to address concerns about reporting entities’ ability to timely comply with the accounting requirements to recognize all of the effects of the Tax Cuts and Jobs Act in the period of enactment. SAB 118 allows disclosure that timely determination of some or all of the income tax effects from the Tax Cuts and Jobs Act are incomplete by the due date of the financial statements and if possible to provide a reasonable estimate. The Company has accounted for the tax effects of the Tax Cuts and Jobs Act under the guidance of SAB 118, on a provisional basis. The Company’s accounting for certain income tax effects is incomplete, but the Company has determined reasonable estimates for those effects and has recorded provisional amounts in its condensed financial statements as of June 30, 2018 and December 31, 2017. Recently Issued Accounting Standards In June 2018, the FASB issued Accounting Standards Update (“ASU”) Compensation – Stock Compensation (Topic 718) fiscal years its financial position, results of operations, and disclosures In February 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-02, “Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.” The FASB issued the update to provide amended guidance to “allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act.” Additionally, under the new guidance an entity will be required to provide certain disclosures regarding stranded tax effects. The guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those years, and the guidance may be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal income tax rate in the Tax Cuts and Jobs Act is recognized. Early adoption is permitted. The Company is currently assessing the effect that the ASU will have on its financial position, results of operations, and disclosures. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” The FASB issued the update to require the recognition of lease assets and lease liabilities on the balance sheet of lessees. The standard will be effective for fiscal years beginning after December 15, 2018, including interim periods within such fiscal years. The ASU requires a modified retrospective transition method with the option to elect a package of practical expedients. Early adoption is permitted. The Company expects adoption to increase the assets and liabilities recorded on its condensed balance sheet and increase the level of disclosures related to leases. The Company is currently assessing the effect that the ASU will have on its financial position, results of operations, and disclosures and anticipates recognition of additional assets and corresponding liabilities related to leases on the Company’s Condensed Balance Sheets upon adoption of the ASU.

Strategic Agreements

Strategic Agreements	6 Months Ended
	Jun. 30, 2018
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Strategic Agreements	Note 2. Strategic Agreements The collaborative research and development and other revenues associated with the Company’s major third-party collaborators are as follows (in thousands): Three months ended June 30, Six months ended June 30, 2018 2017 2018 2017 Collaborator Sandoz AG (Sandoz) (1) $ - $ 769 $ - $ 769 Santen Pharmaceutical Co. Ltd. (Santen) (2) - 54 1 148 Pain Therapeutics, Inc. (Pain Therapeutics) - 81 - 105 Zogenix, Inc. (Zogenix) (3) - 42 - 86 Others (4) 645 322 1,740 594 Total collaborative research and development and other revenue $ 645 $ 1,268 $ 1,741 $ 1,702 ( 1 ) Amounts related to ratable recognition of upfront fees were zero for each of the three and six months ended June 30, 2018, compared to $769,000 for the corresponding periods in 2017. (2) Amounts related to ratable recognition of upfront fees were zero for each of the three and six months ended June 30, 2018, compared to $48,000 and $105,000 for the corresponding periods in 2017. ( 3 ) Amounts related to ratable recognition of upfront fees were zero for each of the three and six months ended June 30, 2018, compared to $42,000 and $84,000 for the corresponding periods in 2017. In August 2017, the Company and Zogenix terminated the Development and License Agreement between us dated July 11, 2011 relating to the development and commercialization of Relday. (4) Includes revenue recognized associated with the Company’s feasibility agreements for each of the three and six months ended June 30 2018 and 2017. Agreement with Sandoz AG In May 2017, the Company and Sandoz AG (“Sandoz”) entered into a license agreement to develop and market POSIMIR ® ® The Company evaluated the agreement under the accounting guidance for multiple element arrangements and identified three deliverables: the license to develop and market POSIMIR, the research and development services and the manufacturing services. Given that the delivery of the manufacturing services by the Company is dependent upon approval of POSIMIR by the FDA, and that the fee to be received by the Company for these services, should they be delivered, is consistent with their estimated selling price, the Company considers the manufacturing services to be a contingent deliverable and has excluded them from the initial measurement and allocation of the arrangement consideration. The Company evaluated the license deliverable and concluded that it did not have stand alone value separate from the research and development services and accordingly combined these deliverables into a single unit of accounting. The Company allocated the arrangement consideration, which consists of the $20.0 million upfront payment, to this single unit of accounting. As of December 31, 2017, all of the $20.0 million upfront fee had been recognized as revenue as the Company’s contractual performance obligations had been fulfilled. Total collaborative research and development revenue recognized by the Company for Sandoz was zero for each of the three and six months ended June 30, 2018, compared with $769,000 for the corresponding periods in 2017. The cumulative aggregate payments received by the Company from Sandoz as of June 30, 2018 were $20.0 million under this agreement. Patent Purchase Agreement with Indivior On September 26, 2017, the Company entered into a Patent Purchase Agreement (the “Agreement”) with Indivior UK Limited (“Indivior”). Pursuant to the Agreement, the Company has assigned to Indivior certain patents that may provide further intellectual property protection for PERSERIS ™ On July 27, 2018, Indivior announced that the FDA had approved the NDA for PERSERIS thereby triggering the $5.0 million payment to DURECT. Agreement with Pain Therapeutics, Inc. In December 2002, the Company entered into an exclusive agreement with Pain Therapeutics, Inc. (Pain Therapeutics) to develop and commercialize on a worldwide basis REMOXY ER and other oral sustained release, abuse deterrent opioid products incorporating four specified opioid drugs, using the ORADUR technology. This agreement currently covers only REMOXY ER. Under the terms of this agreement, Pain Therapeutics paid the Company an upfront license fee of $1.0 million, with the potential for an additional $3.0 million in performance milestone payments based on the successful development and approval of REMOXY ER. Of these potential milestones, all $3.0 million are development-based milestones. There are no sales-based milestones under the agreement. As of June 30, 2018, the Company had received $1.5 million in cumulative milestone payments. In March 2016, Pain Therapeutics resubmitted a New Drug Application (NDA) to the U.S. Food and Drug Administration (FDA), and in September 2016, Pain Therapeutics received a Complete Response Letter from the FDA for REMOXY ER. Based on its review, the FDA has determined that the NDA cannot be approved in its present form and specifies additional actions and data that are needed for drug approval. In February 2018, Pain Therapeutics stated that they had resubmitted the REMOXY ER NDA. On June 26, 2018, a joint meeting of the Anesthetic and Analgesic Drug Products Advisory Committee and Drug Safety and Risk Management Advisory Committee of the FDA voted 14 to 3 against the approval of REMOXY ER. The PDUFA date for completion of the review is August 7, 2018. Total collaborative research and development revenue recognized for REMOXY-related work performed by the Company for Pain Therapeutics was zero for each of the three and six months ended June 30, 2018 respectively, compared with $81,000 and $105,000 for the corresponding periods in 2017. The cumulative aggregate payments received by the Company from Pain Therapeutics as of June 30, 2018 were $40.4 million under this agreement. Agreement with Zogenix, Inc. On July 11, 2011, the Company and Zogenix, Inc. (Zogenix) entered into a Development and License Agreement (the Zogenix Agreement). The Company and Zogenix had previously been working together under a feasibility agreement pursuant to which the Company’s research and development costs were reimbursed by Zogenix. Under the Zogenix Agreement, Zogenix was responsible for the clinical development and commercialization of a proprietary, long-acting injectable formulation of risperidone using the Company’s SABER controlled-release formulation technology potentially in combination with Zogenix’s DosePro® needle-free, subcutaneous drug delivery system. DURECT was responsible for non-clinical, formulation and CMC development activities. The Company was to be reimbursed by Zogenix for its research and development efforts on the product. Zogenix paid a non-refundable upfront fee to the Company of $2.25 million in July 2011. The Company’s research and development services were considered integral to utilizing the licensed intellectual property and, accordingly, the deliverable was accounted for as a single unit of accounting. The $2.25 million upfront fee had been recognized as collaborative research and development revenue ratably over the term of the Company’s research and development involvement with Zogenix with respect to this product candidate. The Company granted to Zogenix an exclusive worldwide license, with sub-license rights, to the Company’s intellectual property rights related to the Company’s proprietary polymeric and non-polymeric controlled-release formulation technology to make and have made, use, offer for sale, sell and import risperidone products, where risperidone is the sole active agent, for administration by injection in the treatment of schizophrenia, bipolar disorder or other psychiatric related disorders in humans. The Company retained the right to supply Zogenix’s Phase 3 clinical trial and commercial product requirements on the terms set forth in the Zogenix Agreement. Zogenix was permitted to terminate the Zogenix Agreement without cause at any time upon prior written notice, and either party was permitted to terminate the Zogenix Agreement upon certain circumstances including written notice of a material uncured breach. In August 2017, the Company and Zogenix terminated the Zogenix Agreement. Under the mutual termination agreement, Zogenix’s development and commercialization rights are returned to the Company, and Zogenix has transferred to the Company all regulatory filings and development information related to Relday. As a result of the termination of the Zogenix agreement, the Company recognized revenue during the third quarter of 2017 for the remaining $750,000 of deferred revenue related to the upfront fee as the Company had no remaining performance obligations under the agreement; this recognition of revenue did not result in additional cash proceeds to the Company. The following table provides a summary of collaborative research and development revenue recognized under the agreements with Zogenix (in thousands). The cumulative aggregate payments received by the Company as of June 30, 2018 were $20.1 million under these agreements. Three months ended June 30, Six months ended June 30, 2018 2017 2018 2017 Ratable recognition of upfront payment $ - $ 42 $ - $ 84 Research and development expenses reimbursable by Zogenix - - - 2 Total collaborative research and development revenue $ - $ 42 $ - $ 86 Agreement with Santen Pharmaceutical Co., Ltd. On December 11, 2014, the Company and Santen Pharmaceutical Co., Ltd. (Santen) entered into a definitive agreement (the Santen Agreement). Pursuant to the Santen Agreement, the Company granted Santen an exclusive worldwide license to the Company’s proprietary SABER formulation platform and other intellectual property to develop and commercialize a sustained release product utilizing the Company’s SABER technology to deliver an ophthalmology drug. Santen controls and funds the development and commercialization program, and the parties established a joint management committee to oversee, review and coordinate the development activities of the parties under the Santen Agreement. In connection with the Santen agreement, Santen agreed to pay the Company an upfront fee of $2.0 million in cash and to make contingent cash payments to the Company of up to $76.0 million upon the achievement of certain milestones, of which $13.0 million are development-based milestones and $63.0 million are commercialization-based milestones including milestones requiring the achievement of certain product sales targets (none of which has been achieved as of June 30, 2018). Santen will also pay for certain Company costs incurred in the development of the licensed product. If the product is commercialized, the Company would also receive a tiered royalty on annual net product sales ranging from single-digit to the low double digits, determined on a country-by-country basis. As of June 30, 2018, the cumulative aggregate payments received by the Company under this agreement were $3.3 million. The following table provides a summary of collaborative research and development revenue recognized under the Santen Agreement (in thousands). Three months ended June 30, Six months ended June 30, 2018 2017 2018 2017 Ratable recognition of upfront payment $ - $ 48 $ - $ 105 Research and development expenses reimbursable by Santen - 6 1 43 Total collaborative research and development revenue $ - $ 54 $ 1 $ 148

Financial Instruments

Financial Instruments	6 Months Ended
	Jun. 30, 2018
Fair Value Disclosures [Abstract]
Financial Instruments	Note 3. Financial Instruments Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company’s valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The Company follows a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value. These levels of inputs are the following: • Level 1—Quoted prices in active markets for identical assets or liabilities. • Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The Company’s financial instruments are valued using quoted prices in active markets or based upon other observable inputs. Money market funds are classified as Level 1 financial assets. Certificates of deposit, commercial paper, corporate debt securities, and U.S. Government agency securities are classified as Level 2 financial assets. The fair value of the Level 2 assets is estimated using pricing models using current observable market information for similar securities. The Company’s Level 2 investments include U.S. government-backed securities and corporate securities that are valued based upon observable inputs that may include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data including market research publications. The fair value of commercial paper is based upon the time to maturity and discounted using the three-month treasury bill rate. The average remaining maturity of the Company’s Level 2 investments as of June 30, 2018 is less than twelve months and these investments are rated by S&P and Moody’s at AAA or AA- for securities and A1 or P1 for commercial paper. The following is a summary of available-for-sale securities as of June 30, 2018 and December 31, 2017 (in thousands): June 30, 2018 Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value Money market funds $ 592 $ - $ - $ 592 Certificates of deposit 150 - - 150 Commercial paper 40,477 - - 40,477 $ 41,219 $ - $ - $ 41,219 Reported as: Cash and cash equivalents $ 36,008 $ - $ - $ 36,008 Short-term investments 5,061 - 5,061 Long-term restricted investments 150 - - 150 $ 41,219 $ - $ - $ 41,219 December 31, 2017 Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value Money market funds $ 568 $ - $ - $ 568 Certificates of deposit 150 - - 150 Commercial paper 33,307 - - 33,307 Corporate debt 1,298 - (1 ) 1,297 $ 35,323 $ - $ (1 ) $ 35,322 Reported as: Cash and cash equivalents $ 27,788 $ - $ - $ 27,788 Short-term investments 7,385 - (1 ) 7,384 Long-term restricted investments 150 - - 150 $ 35,323 $ - $ (1 ) $ 35,322 The following is a summary of the cost and estimated fair value of available-for-sale securities at June 30, 2018, by contractual maturity (in thousands): June 30, 2018 Amortized Cost Estimated Fair Value Mature in one year or less $ 40,627 $ 40,627 $ 40,627 $ 40,627 There were no securities that have had an unrealized loss for more than 12 months as of June 30, 2018. As of June 30, 2018, unrealized losses on available-for-sale investments are not attributed to credit risk and are considered to be temporary. The Company believes that it is more-likely-than-not that investments in an unrealized loss position will be held until maturity or the recovery of the cost basis of the investment. To date, the Company has not recorded any impairment charges on marketable securities related to other-than-temporary declines in market value.

Stock-Based Compensation

Stock-Based Compensation	6 Months Ended
	Jun. 30, 2018
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Stock-Based Compensation	Note 4. Stock-Based Compensation As of June 30, 2018, the Company has three stock-based compensation plans. The stock-based compensation cost that has been included in the statements of comprehensive loss is shown as below (in thousands): Three months ended June 30, Six months ended June 30, 2018 2017 2018 2017 Cost of product revenues $ 23 $ 28 $ 48 $ 56 Research and development 338 315 691 684 Selling, general and administrative 278 220 561 488 Total stock-based compensation $ 639 $ 563 $ 1,300 $ 1,228 As of June 30, 2018 and December 31, 2017, $14,000 of stock-based compensation cost was capitalized in inventory on the Company’s balance sheets. The Company uses the Black-Scholes option pricing model to value its stock options. The expected life computation is based on historical exercise patterns and post-vesting termination behavior. The Company considered its historical volatility in developing its estimate of expected volatility. The Company used the following assumptions to estimate the fair value of stock options granted and shares purchased under its employee stock purchase plan for the three and six months ended June 30, 2018 and 2017: Three months ended June 30, Six months ended June 30, 2018 2017 2018 2017 Stock Options Risk-free rate 2.8-3.0% 2.0-2.3% 2.7-3.0% 2.0-2.5% Expected dividend yield — — — — Expected life of option (in years) 7.5-10.0 6.8-10.0 7.0-10.0 6.8-10.0 Volatility 79-85% 75-81% 79-86% 75-82% Three months ended June 30, Six months ended June 30, 2018 2017 2018 2017 Employee Stock Purchase Plan Risk-free rate 2.1% 1.0% 1.3-2.1% 0.6-1.0% Expected dividend yield — — — — Expected life of option (in years) 0.5 0.5 0.5 0.5 Volatility 66% 44% 66-146% 44-81%

Term Loan

Term Loan	6 Months Ended
	Jun. 30, 2018
Debt Disclosure [Abstract]
Term Loan	Note 5. Term Loan In July 2016, the Company entered a $20.0 million secured single-draw term loan with Oxford Finance LLC (Oxford Finance). The 2016 Loan Agreement provides for interest only payments for the first 18 months, followed by consecutive monthly payments of principal and interest in arrears starting on March 1, 2018 and continuing through the maturity date of the term loan of August 1, 2020. The 2016 Loan Agreement also provides for a floating interest rate (7.95% initially and 9.40% as of June 30, 2018) based on an index rate plus a spread, a $150,000 facility fee that was paid at closing and an additional payment equal to 9.25% of the principal amount of the term loan, which is due when the term loan becomes due or upon the prepayment of the facility. If the Company elects to prepay the loan, there is also a prepayment fee between 1% and 3% of the principal amount of the term loan depending on the timing of prepayment. The facility fee and other debt offering/issuance costs have been recorded as debt discount on the Company’s balance sheet and together with the final $1.9 million payment are being amortized to interest expense during the life of the term loan using the effective interest rate method. The term loan is secured by substantially all of the assets of the Company, except that the collateral does not include any intellectual property (including licensing, collaboration and similar agreements relating thereto), and certain other excluded assets. The 2016 Loan Agreement contains customary representations, warranties and covenants by the Company, which covenants limit the Company’s ability to convey, sell, lease, transfer, assign or otherwise dispose of certain assets of the Company; engage in any business other than the businesses currently engaged in by the Company or reasonably related thereto; liquidate or dissolve; make certain management changes; undergo certain change of control events; create, incur, assume, or be liable with respect to certain indebtedness; grant certain liens; pay dividends and make certain other restricted payments; make certain investments; and make payments on any subordinated debt. The 2016 Loan Agreement also contains customary indemnification obligations and customary events of default, including, among other things, the Company’s failure to fulfill certain obligations of the Company under the 2016 Loan Agreement and the occurrence of a material adverse change which is defined as a material adverse change in the Company’s business, operations, or condition (financial or otherwise), a material impairment of the prospect of repayment of any portion of the loan, or a material impairment in the perfection or priority of lender’s lien in the collateral or in the value of such collateral. In the event of default by the Company under the 2016 Loan Agreement, the lender would be entitled to exercise its remedies thereunder, including the right to accelerate the debt, upon which the Company may be required to repay all amounts then outstanding under the 2016 Loan Agreement, which could harm the Company’s financial condition. The conditionally exercisable call option related to the event of default is considered to be an embedded derivative which is required to be bifurcated and accounted for as a separate financial instrument. In the periods presented, the value of the embedded derivative is not material, but could become material in future periods if an event of default became more probable than is currently estimated. In February 2018, the Company and Oxford Finance entered into a First Amendment of the Loan Agreement, which modified the terms of the Loan Agreement to change the first principal payment date from March 1, 2018 to December 1, 2018 and to increase the additional payment due when the term loan becomes due or upon the prepayment of the facility from 9.25% of the principal amount of the term loan to 10% of such amount. The interest rate and the maturity date remain unchanged, and the Company paid Oxford Finance a loan modification fee of $100,000. The fair value of the term loan approximates the carrying value. Future maturities and interest payments due under the term loan as of June 30, 2018, are as follows (in thousands): Six months ended December 31, 2018 $ 2,711 2019 12,463 2020 8,845 Total minimum payments 24,019 Less amount representing interest (4,019 ) Gross balance of term loan 20,000 Less unamortized debt discount (139 ) Carrying value of term loan 19,861 Less term loan, current portion, net (7,520 ) Term loan, non-current portion, net $ 12,341 As of June 30, 2018, the Company was in compliance with all material covenants under the Loan Agreement and there had been no material adverse change.

Stockholders' Equity

Stockholders' Equity	6 Months Ended
	Jun. 30, 2018
Equity [Abstract]
Stockholders' Equity	Note 6. Stockholders’ Equity During the three months ended June 30, 2018, the Company raised net proceeds (net of commissions) of approximately $3.1 million from the sale of 1,458,151 shares of the Company’s common stock in the open market at a weighted average price of $2.22 per share, through its Controlled Equity Offering sales agreement with Cantor Fitzgerald, entered into in November 2015 (Controlled Equity Offering). During the six months ended June 30, 2018, the Company raised net proceeds (net of commissions) of approximately $16.8 million from the sale of 9,629,426 shares of the Company’s common stock in the open market at a weighted average price of $1.80 per share, through its Controlled Equity Offering sales agreement with Cantor Fitzgerald, entered into in November 2015 (Controlled Equity Offering).

Subsequent Events

Subsequent Events	6 Months Ended
	Jun. 30, 2018
Subsequent Events [Abstract]
Subsequent Events	Note 7. Subsequent Events On July 27, 2018, Indivior announced that the FDA had approved the NDA for PERSERIS thereby triggering a $5 million milestone payment to DURECT.

Summary of Significant Accoun14

Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2018
Accounting Policies [Abstract]
Nature of Operations	Nature of Operations DURECT Corporation (the Company) was incorporated in the state of Delaware on February 6, 1998. The Company is a biopharmaceutical company with research and development programs broadly falling into two categories: (i) new chemical entities derived from our Epigenetics Regulator Program, in which we attempt to discover and develop molecules which have not previously been approved and marketed as therapeutics, and (ii) Drug Delivery Programs, in which we apply our formulation expertise and technologies largely to active pharmaceutical ingredients whose safety and efficacy have previously been established but which we aim to improve in some manner through a new formulation. The Company has several products under development by itself and with third party collaborators. The Company also manufactures and sells osmotic pumps used in laboratory research, and designs, develops and manufactures a wide range of standard and custom biodegradable polymers and excipients for pharmaceutical and medical device clients for use as raw materials in their products. In addition, the Company conducts research and development of pharmaceutical products in collaboration with third party pharmaceutical and biotechnology companies.
Basis of Presentation	Basis of Presentation The accompanying unaudited financial statements include the accounts of the Company. These financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (SEC), and therefore do not include all the information and footnotes necessary for a complete presentation of the Company’s results of operations, financial position and cash flows in conformity with U.S. generally accepted accounting principles (U.S. GAAP). The unaudited financial statements reflect all adjustments (consisting only of normal recurring adjustments) which are, in the opinion of management, necessary for a fair presentation of the financial position at June 30, 2018, the operating results and comprehensive loss for the three and six months ended June 30, 2018 and 2017, and cash flows for the six months ended June 30, 2018 and 2017. The balance sheet as of December 31, 2017 has been derived from audited financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. These financial statements and notes should be read in conjunction with the Company’s audited financial statements and notes thereto, included in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2017 filed with the SEC. The results of operations for the interim periods presented are not necessarily indicative of results that may be expected for any other interim period or for the full fiscal year.
Liquidity and Need to Raise Additional Capital	Liquidity and Need to Raise Additional Capital As of June 30, 2018, the Company had an accumulated deficit of $458.6 million as well as negative cash flows from operating activities for the six months ended June 30, 2018. The Company historically has had negative cash flows from operating activities and expects its negative cash flows to continue. The Company will continue to require substantial funds to continue research and development, including clinical trials of its product candidates. Management’s plans in order to meet its operating cash flow requirements include seeking additional collaborative agreements for certain of its programs and achieving milestone and other payments under its collaboration and licensing agreements as well as financing activities such as public offerings and private placements of its common stock, preferred stock offerings, issuances of debt and convertible debt instruments. There are no assurances that such additional funding will be obtained and that the Company will succeed in its future operations. If the Company cannot successfully raise additional capital and implement its strategic development plan, its liquidity, financial condition and business prospects will be materially and adversely affected.
Inventories	Inventories Inventories are stated at the lower of cost or net realizable value, with cost determined on a first-in, first-out basis. Inventories, in part, include certain excipients that are sold to a customer for a currently marketed animal health product and included in several products in development or awaiting regulatory approval. These inventories are capitalized based on management’s judgment of probable sale prior to their expiration dates. The valuation of inventory requires management to estimate the value of inventory that may become expired prior to use. The Company may be required to expense previously capitalized inventory costs upon a change in management’s judgment due to, among other potential factors, a denial or delay of approval of a customer’s product by the necessary regulatory bodies, or new information that suggests that the inventory will not be saleable. As of June 30, 2018, the remaining carrying value of the excipient in the Company’s inventory was $70,000. In the event that management determines that the Company will not utilize all of these materials, there could be a potential write-off related to this inventory. If the Company is able to subsequently sell products made with raw materials that were previously written down, the Company will report an unusually high gross profit as there will be no associated cost of goods for these materials. The Company’s inventories consist of the following (in thousands): June 30, 2018 December 31, 2017 (unaudited) Raw materials $ 247 $ 282 Work in process 1,401 1,182 Finished goods 1,615 1,699 Total inventories $ 3,263 $ 3,163
Revenue Recognition	Revenue Recognition Effective January 1, 2018, the Company adopted FASB ASC Topic 606, Revenue from Contracts with Customers, or ASC 606. In accordance with ASC 606, the Company changed certain characteristics of its revenue recognition accounting policy as described below. ASC 606 was applied using the modified retrospective method, where the cumulative effect of the initial application was recognized as an adjustment to opening retained earnings at January 1, 2018. Therefore, comparative prior periods have not been adjusted and continue to be reported under FASB ASC Topic 605, Revenue Recognition, or ASC 605. The Company recorded a net increase to opening retained earnings of $470,000 with an offset entry to a contra liability account as of January 1, 2018 due to the cumulative impact of adopting Topic 606, with the impact relating to the Company’s deferred collaborative research and development revenues. There was no impact to reported total assets, revenues and operating expenses for the three and six months ended June 30, 2018 as a result of applying Topic 606. Product Revenue, Net The Company sells osmotic pumps used in laboratory research, and designs, develops and manufactures a wide range of standard and custom biodegradable polymers and excipients for pharmaceutical and medical device clients for use as raw materials in their products. Revenues from product sales are recognized when the customer obtains control of the Company’s product, which occurs at a point in time, typically upon shipment to the customer. The Company expenses incremental costs of obtaining a contract as and when incurred if the expected amortization period of the asset that the Company would have recognized is one year or less. Trade Discounts and Allowances: The Company provides certain customers with discounts that are explicitly stated in the Company’s contracts and are recorded as a reduction of revenue in the period the related product revenue is recognized. Product Returns: Consistent with industry practice, the Company generally offers customers a limited right of return for products that have been purchased from the Company. The Company estimates the amount of its product sales that may be returned by its customers and records this estimate as a reduction of revenue in the period the related product revenue is recognized. The Company currently estimates product return liabilities using its own historical sales information. The Company expects product returns to be minimal. Collaborative Research and Development Revenues The Company enters into license agreements which are within the scope of Topic 606, under which it licenses certain rights to its product candidates to third parties. The terms of these arrangements typically include payment to the Company of one or more of the following: non-refundable, up-front license fees; reimbursement of development costs incurred by the Company under approved work plans; development, regulatory and commercial milestone payments; payments for manufacturing supply services the Company provides through its contract manufacturers; and royalties on net sales of licensed products. Each of these payments results in collaborative research and development revenues, except for revenues from royalties on net sales of licensed products, which are classified as royalty revenues. In determining the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements, the Company performs the following steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. As part of the accounting for these arrangements, the Company must develop assumptions that require judgment to determine the stand-alone selling price for each performance obligation identified in the contract. The Company uses key assumptions to determine the stand-alone selling price, which may include forecasted revenues, development timelines, reimbursement rates for personnel costs, discount rates and probabilities of technical and regulatory success. The Company expects to recognize revenue for the variable consideration currently being constrained when it is probable that a significant revenue reversal will not occur. Licenses of intellectual property: If the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenues from non-refundable, up-front fees allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license. For licenses that are bundled with other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from non-refundable, up-front fees. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. Milestone Payments: At the inception of each arrangement that includes development milestone payments, the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the control of the Company or the licensee, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. The transaction price is then allocated to each performance obligation on a relative stand-alone selling price basis, for which the Company recognizes revenue as or when the performance obligations under the contract are satisfied. At the end of each subsequent reporting period, the Company re-evaluates the probability of achievement of such development milestones and any related constraint, and if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect collaborative research and development revenues and net income (loss) in the period of adjustment. Manufacturing Supply Services: Arrangements that include a promise for future supply of drug product for either clinical development or commercial supply at the customer’s discretion are generally considered as options. The Company assesses if these options provide a material right to the licensee and if so, they are accounted for as separate performance obligations. If the Company is entitled to additional payments when the customer exercises these options, any additional payments are recorded in collaborative research and development revenue when the customer obtains control of the goods, which is upon delivery. Royalties and Earn-outs: For arrangements that include sales-based royalties or earn-outs, including milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). To date, the Company has not recognized any significant royalty revenue resulting from our collaborative arrangements or any earn-out revenue from our patent purchase agreement with Indivior. The Company receives payments from its customers based on development cost schedules established in each contract. Up-front payments and fees are recorded as deferred revenue upon receipt or when due, and may require deferral of revenue recognition to a future period until the Company performs its obligations under these arrangements. Amounts are recorded as accounts receivable when the Company’s right to consideration is unconditional. The Company does not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the customer and the transfer of the promised goods or services to the customer will be one year or less. Total revenue by geographic region for the three and six months ended June 30, 2018 and 2017 are as follows (in thousands): Three months ended June 30, Six months ended June 30, 2018 2017 2018 2017 United States $ 2,124 $ 2,273 $ 4,198 $ 5,374 Europe 745 1,200 1,503 1,677 Japan 285 407 572 770 Other 259 439 628 1,065 Total $ 3,413 $ 4,319 $ 6,901 $ 8,886 The cumulative effect of the changes made to our January 1, 2018 balance sheet for the adoption of ASC 606 Revenue – Revenue from Contract with Customers Balance at December 31, 2017 Adjustments Due to ASC606 Balance at January 1, 2018 Condensed Balance Sheets Liabilities Deferred revenue, non-current portion $ 1,093 $ 470 $ 623 Equity Accumulated deficit $ (443,772 ) $ 470 $ (443,302 ) During the three and six months ended June 30, 2018, the Company did not recognize any revenue as a result of changes in the contract asset and the contract liability balances associated with the Company’s deferred research and development revenues for the Company’s collaboration agreements as a result of adoption of ASC 606. In accordance with the new revenue standard requirements, the disclosure of the impact of adoption on condensed balance sheets, condensed statements of comprehensive loss, and condensed statements of cash flows for the period ended June 30, 2018 was as follows (in thousands): As of June 30, 2018 As reported Balances without adoption of ASC 606 Effect of change Higher/(Lower) Condensed Balance Sheets Liabilities Deferred revenue, non-current portion $ 623 $ 1,093 $ (470 ) For the six months ended June 30, 2018 As reported Balances without adoption of ASC 606 Effect of change Higher/(Lower) Condensed Statements of Comprehensive Loss Collaborative research and development and other revenue $ 1,741 $ 1,741 $ - Product revenue, net 5,160 5,160 - Total revenues $ 6,901 $ 6,901 $ - For the six months ended June 30, 2018 As reported Balances without adoption of ASC 606 Effect of change Higher/(Lower) Condensed Statements of Cash Flow Cash flow from Operating Activities Deferred revenue, non-current portion $ (479 ) $ - $ (479 ) For the reporting periods before January 1, 2018, revenue was recognized under ASC 605, Revenue Recognition
Comprehensive Income (Loss)	Comprehensive Income (Loss) Components of other comprehensive income (loss) are comprised entirely of unrealized gains and losses on the Company’s available-for-sale securities for all periods presented. Total comprehensive loss has been presented in the Company’s Statements of Comprehensive Loss.
Net Income (Loss) Per Share	Net Income (Loss) Per Share Basic net loss per share is calculated by dividing the net loss by the weighted-average number of common shares outstanding. Diluted net loss per share is computed using the weighted-average number of common shares outstanding and common stock equivalents (i.e., options to purchase common stock) outstanding during the period, if dilutive, using the treasury stock method for options. The numerators and denominators in the calculation of basic and diluted net loss per share were as follows (in thousands except per share amounts): Three months ended June 30, Six months ended June 30, 2018 2017 2018 2017 Numerators: Net loss (7,011 ) (9,927 ) (15,308 ) (18,041 ) Denominator: Weighted average shares used to compute basic net loss per share 161,621 142,532 157,612 142,176 Dilutive common shares from stock options and ESPP - - - - Weighted average shares used to compute diluted net loss per share 161,621 142,532 157,612 142,176 Net loss per share: Basic $ (0.04 ) $ (0.07 ) $ (0.10 ) $ (0.13 ) Diluted $ (0.04 ) $ (0.07 ) $ (0.10 ) $ (0.13 ) Options to purchase approximately 13.4 million and 14.7 million shares of common stock were excluded from the denominator in the calculation of diluted net loss per share for the three and six months ended June 30, 2018, respectively, as the effect would be anti-dilutive. Options to purchase approximately 26.2 million shares of common stock were excluded from the denominator in the calculation of diluted net loss per share for each of the three and six months ended June 30, 2017, respectively, as the effect would be anti-dilutive.
Recent Accounting Pronouncements	Recent Accounting Pronouncements Recently Adopted Accounting Standards In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash.” The FASB issued the update to clarify how restricted cash or restricted cash equivalents should be presented in the statement of cash flows. The standard will be effective for fiscal years beginning after December 15, 2017, including interim periods within those years, and the guidance will generally be applied retroactively. The Company has adopted the amendments provided in ASU 2016-18 in these condensed financial statements to provide financial statement users with more transparent disclosure about restricted cash and restricted cash equivalents. Upon adoption, the amendments provided in this update are applied using a retrospective transition method to each period presented. The cash, cash equivalents, restricted cash, and restricted cash equivalents balance included $150,000 of restricted cash and restricted cash equivalents as of both June 30, 2018 and June 30, 2017. Restricted cash and restricted cash equivalents are included in long-term restricted investments in the accompanying condensed balance sheets as of June 30, 2018 and December 31, 2017, respectively. In March 2018, the FASB issued ASU 2018-05, “Income Taxes (Topic 740), Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118.” The ASU adds various Securities and Exchange Commission (“SEC”) paragraphs pursuant to the issuance of the December 2017 SEC Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”), which was effective immediately. The SEC issued SAB 118 to address concerns about reporting entities’ ability to timely comply with the accounting requirements to recognize all of the effects of the Tax Cuts and Jobs Act in the period of enactment. SAB 118 allows disclosure that timely determination of some or all of the income tax effects from the Tax Cuts and Jobs Act are incomplete by the due date of the financial statements and if possible to provide a reasonable estimate. The Company has accounted for the tax effects of the Tax Cuts and Jobs Act under the guidance of SAB 118, on a provisional basis. The Company’s accounting for certain income tax effects is incomplete, but the Company has determined reasonable estimates for those effects and has recorded provisional amounts in its condensed financial statements as of June 30, 2018 and December 31, 2017. Recently Issued Accounting Standards In June 2018, the FASB issued Accounting Standards Update (“ASU”) Compensation – Stock Compensation (Topic 718) fiscal years its financial position, results of operations, and disclosures In February 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-02, “Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.” The FASB issued the update to provide amended guidance to “allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act.” Additionally, under the new guidance an entity will be required to provide certain disclosures regarding stranded tax effects. The guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those years, and the guidance may be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal income tax rate in the Tax Cuts and Jobs Act is recognized. Early adoption is permitted. The Company is currently assessing the effect that the ASU will have on its financial position, results of operations, and disclosures. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” The FASB issued the update to require the recognition of lease assets and lease liabilities on the balance sheet of lessees. The standard will be effective for fiscal years beginning after December 15, 2018, including interim periods within such fiscal years. The ASU requires a modified retrospective transition method with the option to elect a package of practical expedients. Early adoption is permitted. The Company expects adoption to increase the assets and liabilities recorded on its condensed balance sheet and increase the level of disclosures related to leases. The Company is currently assessing the effect that the ASU will have on its financial position, results of operations, and disclosures and anticipates recognition of additional assets and corresponding liabilities related to leases on the Company’s Condensed Balance Sheets upon adoption of the ASU.

Summary of Significant Accoun15

Summary of Significant Accounting Policies (Tables)	6 Months Ended
	Jun. 30, 2018
Summary of Components of Inventories	The Company’s inventories consist of the following (in thousands): June 30, 2018 December 31, 2017 (unaudited) Raw materials $ 247 $ 282 Work in process 1,401 1,182 Finished goods 1,615 1,699 Total inventories $ 3,263 $ 3,163
Summary of Total Revenue by Geographic Region	Total revenue by geographic region for the three and six months ended June 30, 2018 and 2017 are as follows (in thousands): Three months ended June 30, Six months ended June 30, 2018 2017 2018 2017 United States $ 2,124 $ 2,273 $ 4,198 $ 5,374 Europe 745 1,200 1,503 1,677 Japan 285 407 572 770 Other 259 439 628 1,065 Total $ 3,413 $ 4,319 $ 6,901 $ 8,886
Summary of Numerators and Denominators in Calculation of Basic and Diluted Net Income (Loss) per Share	The numerators and denominators in the calculation of basic and diluted net loss per share were as follows (in thousands except per share amounts): Three months ended June 30, Six months ended June 30, 2018 2017 2018 2017 Numerators: Net loss (7,011 ) (9,927 ) (15,308 ) (18,041 ) Denominator: Weighted average shares used to compute basic net loss per share 161,621 142,532 157,612 142,176 Dilutive common shares from stock options and ESPP - - - - Weighted average shares used to compute diluted net loss per share 161,621 142,532 157,612 142,176 Net loss per share: Basic $ (0.04 ) $ (0.07 ) $ (0.10 ) $ (0.13 ) Diluted $ (0.04 ) $ (0.07 ) $ (0.10 ) $ (0.13 )
Accounting Standards Update 2014-09
Schedule of Cumulative Effect of Changes made to Balance Sheet for Adoption of ASC 606	The cumulative effect of the changes made to our January 1, 2018 balance sheet for the adoption of ASC 606 Revenue – Revenue from Contract with Customers Balance at December 31, 2017 Adjustments Due to ASC606 Balance at January 1, 2018 Condensed Balance Sheets Liabilities Deferred revenue, non-current portion $ 1,093 $ 470 $ 623 Equity Accumulated deficit $ (443,772 ) $ 470 $ (443,302 )
Schedule of Impact of Adoption with New Revenue Standard Requirements on Financial Statements	In accordance with the new revenue standard requirements, the disclosure of the impact of adoption on condensed balance sheets, condensed statements of comprehensive loss, and condensed statements of cash flows for the period ended June 30, 2018 was as follows (in thousands): As of June 30, 2018 As reported Balances without adoption of ASC 606 Effect of change Higher/(Lower) Condensed Balance Sheets Liabilities Deferred revenue, non-current portion $ 623 $ 1,093 $ (470 ) For the six months ended June 30, 2018 As reported Balances without adoption of ASC 606 Effect of change Higher/(Lower) Condensed Statements of Comprehensive Loss Collaborative research and development and other revenue $ 1,741 $ 1,741 $ - Product revenue, net 5,160 5,160 - Total revenues $ 6,901 $ 6,901 $ - For the six months ended June 30, 2018 As reported Balances without adoption of ASC 606 Effect of change Higher/(Lower) Condensed Statements of Cash Flow Cash flow from Operating Activities Deferred revenue, non-current portion $ (479 ) $ - $ (479 )

Strategic Agreements (Tables)

Strategic Agreements (Tables)	6 Months Ended
	Jun. 30, 2018
Summary of Collaborative Research and Development and Other Revenues Associated with Company's Major Third-Party Collaborators	The collaborative research and development and other revenues associated with the Company’s major third-party collaborators are as follows (in thousands): Three months ended June 30, Six months ended June 30, 2018 2017 2018 2017 Collaborator Sandoz AG (Sandoz) (1) $ - $ 769 $ - $ 769 Santen Pharmaceutical Co. Ltd. (Santen) (2) - 54 1 148 Pain Therapeutics, Inc. (Pain Therapeutics) - 81 - 105 Zogenix, Inc. (Zogenix) (3) - 42 - 86 Others (4) 645 322 1,740 594 Total collaborative research and development and other revenue $ 645 $ 1,268 $ 1,741 $ 1,702 ( 1 ) Amounts related to ratable recognition of upfront fees were zero for each of the three and six months ended June 30, 2018, compared to $769,000 for the corresponding periods in 2017. (2) Amounts related to ratable recognition of upfront fees were zero for each of the three and six months ended June 30, 2018, compared to $48,000 and $105,000 for the corresponding periods in 2017. ( 3 ) Amounts related to ratable recognition of upfront fees were zero for each of the three and six months ended June 30, 2018, compared to $42,000 and $84,000 for the corresponding periods in 2017. In August 2017, the Company and Zogenix terminated the Development and License Agreement between us dated July 11, 2011 relating to the development and commercialization of Relday. (4) Includes revenue recognized associated with the Company’s feasibility agreements for each of the three and six months ended June 30 2018 and 2017.
Agreement with Zogenix, Inc. [Member]
Summary of Collaborative Research and Development Revenue Recognized	The following table provides a summary of collaborative research and development revenue recognized under the agreements with Zogenix (in thousands). The cumulative aggregate payments received by the Company as of June 30, 2018 were $20.1 million under these agreements. Three months ended June 30, Six months ended June 30, 2018 2017 2018 2017 Ratable recognition of upfront payment $ - $ 42 $ - $ 84 Research and development expenses reimbursable by Zogenix - - - 2 Total collaborative research and development revenue $ - $ 42 $ - $ 86
Agreement with Santen Pharmaceutical Co., Ltd. [Member]
Summary of Collaborative Research and Development Revenue Recognized	The following table provides a summary of collaborative research and development revenue recognized under the Santen Agreement (in thousands). Three months ended June 30, Six months ended June 30, 2018 2017 2018 2017 Ratable recognition of upfront payment $ - $ 48 $ - $ 105 Research and development expenses reimbursable by Santen - 6 1 43 Total collaborative research and development revenue $ - $ 54 $ 1 $ 148

Financial Instruments (Tables)

Financial Instruments (Tables)	6 Months Ended
	Jun. 30, 2018
Fair Value Disclosures [Abstract]
Summary of Money Market Funds and Available-for-Sale Securities	The following is a summary of available-for-sale securities as of June 30, 2018 and December 31, 2017 (in thousands): June 30, 2018 Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value Money market funds $ 592 $ - $ - $ 592 Certificates of deposit 150 - - 150 Commercial paper 40,477 - - 40,477 $ 41,219 $ - $ - $ 41,219 Reported as: Cash and cash equivalents $ 36,008 $ - $ - $ 36,008 Short-term investments 5,061 - 5,061 Long-term restricted investments 150 - - 150 $ 41,219 $ - $ - $ 41,219 December 31, 2017 Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value Money market funds $ 568 $ - $ - $ 568 Certificates of deposit 150 - - 150 Commercial paper 33,307 - - 33,307 Corporate debt 1,298 - (1 ) 1,297 $ 35,323 $ - $ (1 ) $ 35,322 Reported as: Cash and cash equivalents $ 27,788 $ - $ - $ 27,788 Short-term investments 7,385 - (1 ) 7,384 Long-term restricted investments 150 - - 150 $ 35,323 $ - $ (1 ) $ 35,322
Summary of Cost and Estimated Fair Value of Available-for-Sale Securities by Contractual Maturity	The following is a summary of the cost and estimated fair value of available-for-sale securities at June 30, 2018, by contractual maturity (in thousands): June 30, 2018 Amortized Cost Estimated Fair Value Mature in one year or less $ 40,627 $ 40,627 $ 40,627 $ 40,627

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	6 Months Ended
	Jun. 30, 2018
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Summary of Stock-Based Compensation Cost that has been Included in Statements of Comprehensive Loss	The stock-based compensation cost that has been included in the statements of comprehensive loss is shown as below (in thousands): Three months ended June 30, Six months ended June 30, 2018 2017 2018 2017 Cost of product revenues $ 23 $ 28 $ 48 $ 56 Research and development 338 315 691 684 Selling, general and administrative 278 220 561 488 Total stock-based compensation $ 639 $ 563 $ 1,300 $ 1,228
Summary of Assumptions Used to Estimate Fair Value of Options Granted and Shares Purchased	The Company used the following assumptions to estimate the fair value of stock options granted and shares purchased under its employee stock purchase plan for the three and six months ended June 30, 2018 and 2017: Three months ended June 30, Six months ended June 30, 2018 2017 2018 2017 Stock Options Risk-free rate 2.8-3.0% 2.0-2.3% 2.7-3.0% 2.0-2.5% Expected dividend yield — — — — Expected life of option (in years) 7.5-10.0 6.8-10.0 7.0-10.0 6.8-10.0 Volatility 79-85% 75-81% 79-86% 75-82% Three months ended June 30, Six months ended June 30, 2018 2017 2018 2017 Employee Stock Purchase Plan Risk-free rate 2.1% 1.0% 1.3-2.1% 0.6-1.0% Expected dividend yield — — — — Expected life of option (in years) 0.5 0.5 0.5 0.5 Volatility 66% 44% 66-146% 44-81%

Term Loan (Tables)

Term Loan (Tables)	6 Months Ended
	Jun. 30, 2018
Debt Disclosure [Abstract]
Schedule of Future Maturities and Interest Payments due under Term Loan	Future maturities and interest payments due under the term loan as of June 30, 2018, are as follows (in thousands): Six months ended December 31, 2018 $ 2,711 2019 12,463 2020 8,845 Total minimum payments 24,019 Less amount representing interest (4,019 ) Gross balance of term loan 20,000 Less unamortized debt discount (139 ) Carrying value of term loan 19,861 Less term loan, current portion, net (7,520 ) Term loan, non-current portion, net $ 12,341

Summary of Significant Accoun20

Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) shares in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Jan. 01, 2018	Dec. 31, 2017
Summary Of Significant Accounting Policies [Line Items]
State of incorporation			Delaware
Date of incorporation			Feb. 6, 1998
Accumulated deficit	$ 458,610,000		$ 458,610,000			$ 443,772,000
Inventories	3,263,000		3,263,000			$ 3,163,000
Revenue recognized as a result of changes in the contract asset and the contract liability balances	$ 3,413,000	$ 4,319,000	$ 6,901,000	$ 8,886,000
Options to purchase common stock excluded from computation of diluted net loss per share	13.4	26.2	14.7	26.2
Restricted cash and restricted cash equivalents	$ 150,000,000	$ 150,000,000	$ 150,000,000	$ 150,000,000
Accounting Standards Update 2014-09
Summary Of Significant Accounting Policies [Line Items]
Accumulated deficit					$ 443,302,000
Increase in retained earnings due to cumulative impact of adopting Topic 606					$ 470,000
Accounting Standards Update 2014-09 | Collaborative Research and Development Revenue [Member]
Summary Of Significant Accounting Policies [Line Items]
Revenue recognized as a result of changes in the contract asset and the contract liability balances	0		0
Agreement with Pain Therapeutics, Inc. [Member]
Summary Of Significant Accounting Policies [Line Items]
Inventories	70,000		70,000
Agreement with Pain Therapeutics, Inc. [Member] | Collaborative Research and Development Revenue [Member]
Summary Of Significant Accounting Policies [Line Items]
Revenue recognized as a result of changes in the contract asset and the contract liability balances	$ 0	$ 81,000	$ 0	$ 105,000

Summary of Significant Accoun21

Summary of Significant Accounting Policies - Summary of Components of Inventories (Detail) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Inventory Net [Abstract]
Raw materials	$ 247	$ 282
Work in process	1,401	1,182
Finished goods	1,615	1,699
Total inventories	$ 3,263	$ 3,163

Summary of Significant Accoun22

Summary of Significant Accounting Policies - Summary of Total Revenue by Geographic Region (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Revenues From External Customers And Long Lived Assets [Line Items]
Revenue	$ 3,413	$ 4,319	$ 6,901	$ 8,886
United States [Member]
Revenues From External Customers And Long Lived Assets [Line Items]
Revenue	2,124	2,273	4,198	5,374
Europe [Member]
Revenues From External Customers And Long Lived Assets [Line Items]
Revenue	745	1,200	1,503	1,677
Japan [Member]
Revenues From External Customers And Long Lived Assets [Line Items]
Revenue	285	407	572	770
Other [Member]
Revenues From External Customers And Long Lived Assets [Line Items]
Revenue	$ 259	$ 439	$ 628	$ 1,065

Summary of Significant Accoun23

Summary of Significant Accounting Policies - Schedule of Cumulative Effect of Changes made to Balance Sheet for Adoption of ASC 606 (Detail) - USD ($) $ in Thousands	Jun. 30, 2018	Jan. 01, 2018	Dec. 31, 2017
Liabilities
Deferred revenue, non-current portion	$ 623		$ 1,093
Stockholders’ equity:
Accumulated deficit	(458,610)		$ (443,772)
Accounting Standards Update 2014-09
Liabilities
Deferred revenue, non-current portion		$ 623
Stockholders’ equity:
Accumulated deficit		(443,302)
Adjustments Due to ASC 606 | Accounting Standards Update 2014-09
Liabilities
Deferred revenue, non-current portion	$ (470)	470
Stockholders’ equity:
Accumulated deficit		$ 470

Summary of Significant Accoun24

Summary of Significant Accounting Policies - Schedule of Impact of Adoption with New Revenue Standard Requirements on Financial Statements (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Jan. 01, 2018	Dec. 31, 2017
Liabilities
Deferred revenue, non-current portion	$ 623		$ 623			$ 1,093
Total revenues	3,413	$ 4,319	6,901	$ 8,886
Cash flows from operating activities
Deferred revenue			(479)	18,977
Collaborative Research and Development and Other Revenue [Member]
Liabilities
Total revenues	645	1,268	1,741	1,702
Product Revenue, Net [Member]
Liabilities
Total revenues	2,768	$ 3,051	5,160	$ 7,184
Accounting Standards Update 2014-09
Liabilities
Deferred revenue, non-current portion					$ 623
Balances without adoption of ASC 606 | Accounting Standards Update 2014-09
Liabilities
Deferred revenue, non-current portion	1,093		1,093
Total revenues			6,901
Balances without adoption of ASC 606 | Accounting Standards Update 2014-09 | Collaborative Research and Development and Other Revenue [Member]
Liabilities
Total revenues			1,741
Balances without adoption of ASC 606 | Accounting Standards Update 2014-09 | Product Revenue, Net [Member]
Liabilities
Total revenues			5,160
Effect of change Higher/(Lower) | Accounting Standards Update 2014-09
Liabilities
Deferred revenue, non-current portion	$ (470)		(470)		$ 470
Cash flows from operating activities
Deferred revenue			$ (479)

Summary of Significant Accoun25

Summary of Significant Accounting Policies - Summary of Numerators and Denominators in Calculation of Basic and Diluted Net Loss per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Numerators:
Net loss	$ (7,011)	$ (9,927)	$ (15,308)	$ (18,041)
Denominator:
Weighted average shares used to compute basic net loss per share	161,621	142,532	157,612	142,176
Dilutive common shares from stock options and ESPP	0	0	0	0
Weighted average shares used to compute diluted net loss per share	161,621	142,532	157,612	142,176
Net loss per share
Basic	$ (0.04)	$ (0.07)	$ (0.10)	$ (0.13)
Diluted	$ (0.04)	$ (0.07)	$ (0.10)	$ (0.13)

Strategic Agreements - Summary

Strategic Agreements - Summary of Collaborative Research and Development and Other Revenues Associated with Company's Major Third-Party Collaborators (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Revenue	$ 3,413	$ 4,319	$ 6,901	$ 8,886
Collaborative Research and Development and Other Revenue [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Revenue	645	1,268	1,741	1,702
Agreement with Sandoz AG [Member] | Collaborative Research and Development and Other Revenue [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Revenue		769		769
Agreement with Santen Pharmaceutical Co., Ltd. [Member] | Collaborative Research and Development and Other Revenue [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Revenue		54	1	148
Agreement with Pain Therapeutics, Inc. [Member] | Collaborative Research and Development and Other Revenue [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Revenue		81		105
Agreement with Zogenix, Inc. [Member] | Collaborative Research and Development and Other Revenue [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Revenue		42		86
Agreements With Other Third Party Collaborators [Member] | Collaborative Research and Development and Other Revenue [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Revenue	$ 645	$ 322	$ 1,740	$ 594

Strategic Agreements - Summar27

Strategic Agreements - Summary of Collaborative Research and Development and Other Revenues Associated with Company's Major Third-Party Collaborators (Parenthetical) (Detail) - USD ($) $ in Thousands	Aug. 31, 2017	Jun. 30, 2018	Sep. 30, 2017	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Agreement with Sandoz AG [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Amounts related to the ratable recognition of upfront fees		$ 0		$ 769	$ 0	$ 769
Agreement with Santen Pharmaceutical Co., Ltd. [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Amounts related to the ratable recognition of upfront fees		0		48	0	105
Agreement with Zogenix, Inc. [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Amounts related to the ratable recognition of upfront fees		$ 0	$ 750	$ 42	$ 0	$ 84
Agreement termination month and year	2017-08

Strategic Agreements - Agreemen

Strategic Agreements - Agreement with Sandoz AG - Additional Information (Detail) - USD ($)	1 Months Ended	3 Months Ended		6 Months Ended		12 Months Ended
	May 31, 2017	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017	May 04, 2018
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Total revenues		$ 3,413,000	$ 4,319,000	$ 6,901,000	$ 8,886,000
Agreement with Sandoz AG [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Notice period to terminate agreement, in days	30 days
Notice period to terminate rights, in months	6 months
Cumulative aggregate payments received by the Company				20,000,000
Agreement with Sandoz AG [Member] | Maximum [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Performance milestone payments based on successful development	$ 30,000,000
Performance milestone payments based on NDA approval							$ 30,000,000
Agreement with Sandoz AG [Member] | License Fees [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Total revenues	20,000,000					$ 20,000,000
Agreement with Sandoz AG [Member] | Collaborative Research and Development Revenue [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Total revenues		$ 0	$ 769,000	$ 0	$ 769,000
Agreement with Sandoz AG [Member] | Sales-Based Milestones [Member] | Maximum [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Performance milestone payments based on successful development	$ 230,000,000						$ 230,000,000

Strategic Agreements - Patent P

Strategic Agreements - Patent Purchase Agreement with Indivior - Additional Information (Detail) - USD ($) $ in Thousands	Sep. 26, 2017	Jun. 30, 2018	Sep. 30, 2017	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Jul. 27, 2018
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Total revenues		$ 3,413		$ 4,319	$ 6,901	$ 8,886
Patent Purchase Agreement with Indivior [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Upfront non-refundable payment received	$ 12,500
Granted patents extending year, minimum	2,026
Patent Purchase Agreement with Indivior [Member] | Intellectual Property Rights [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Total revenues			$ 12,500
Patent Purchase Agreement with Indivior [Member] | Regulatory Based Milestone [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Performance milestone payments based on successful development	$ 5,000
Patent Purchase Agreement with Indivior [Member] | Regulatory Based Milestone [Member] | Subsequent Event [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Performance milestone payments based on successful development							$ 5,000

Strategic Agreements - Agreem30

Strategic Agreements - Agreement with Pain Therapeutics, Inc. - Additional Information (Detail)	1 Months Ended	3 Months Ended		6 Months Ended
	Dec. 31, 2002Drug	Jun. 30, 2018USD ($)	Jun. 30, 2017USD ($)	Jun. 30, 2018USD ($)	Jun. 30, 2017USD ($)
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Total revenues		$ 3,413,000	$ 4,319,000	$ 6,901,000	$ 8,886,000
Agreement with Pain Therapeutics, Inc. [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Number of specified opioid drugs | Drug	4
Performance milestone payments based on successful development		3,000,000		3,000,000
Revenue recognition milestone achieved				1,500,000
Cumulative aggregate payments received by the Company				40,400,000
Agreement with Pain Therapeutics, Inc. [Member] | License Fees [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Total revenues				1,000,000
Agreement with Pain Therapeutics, Inc. [Member] | Collaborative Research and Development Revenue [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Total revenues		0	$ 81,000	0	$ 105,000
Agreement with Pain Therapeutics, Inc. [Member] | Development-Based Milestones [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Performance milestone payments based on successful development		3,000,000		3,000,000
Agreement with Pain Therapeutics, Inc. [Member] | Sales-Based Milestones [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Performance milestone payments based on successful development		$ 0		$ 0

Strategic Agreements - Agreem31

Strategic Agreements - Agreement with Zogenix, Inc. - Additional Information (Detail) - Agreement with Zogenix, Inc. [Member] - USD ($) $ in Thousands	Aug. 31, 2017	Jul. 31, 2011	Jun. 30, 2018	Sep. 30, 2017	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Agreement termination month and year	2017-08
Amounts related to the ratable recognition of upfront fees			$ 0	$ 750	$ 42	$ 0	$ 84
Cumulative aggregate payments received by the Company						20,100
Up-front Payment Arrangement [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Non-refundable upfront fee		$ 2,250				$ 2,250

Strategic Agreements - Summar32

Strategic Agreements - Summary of Collaborative Research and Development Revenue Recognized (Detail) - USD ($) $ in Thousands	3 Months Ended			6 Months Ended
	Jun. 30, 2018	Sep. 30, 2017	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Total collaborative research and development revenue	$ 3,413		$ 4,319	$ 6,901	$ 8,886
Agreement with Zogenix, Inc. [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Ratable recognition of upfront payment	0	$ 750	42	0	84
Research and development expenses reimbursable by the Company					2
Agreement with Zogenix, Inc. [Member] | Collaborative Research and Development Revenue [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Total collaborative research and development revenue			42		86
Agreement with Santen Pharmaceutical Co., Ltd. [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Ratable recognition of upfront payment	$ 0		48	0	105
Research and development expenses reimbursable by the Company			6	1	43
Agreement with Santen Pharmaceutical Co., Ltd. [Member] | Collaborative Research and Development Revenue [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Total collaborative research and development revenue			$ 54	$ 1	$ 148

Strategic Agreements - Agreem33

Strategic Agreements - Agreement with Santen Pharmaceutical Co., Ltd. - Additional Information (Detail) - USD ($)	Dec. 11, 2014	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Total revenues		$ 3,413,000	$ 4,319,000	$ 6,901,000	$ 8,886,000
Agreement with Santen Pharmaceutical Co., Ltd. [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Cumulative aggregate payments received by the Company				3,300,000
Agreement with Santen Pharmaceutical Co., Ltd. [Member] | License Fees [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Total revenues	$ 2,000,000
Agreement with Santen Pharmaceutical Co., Ltd. [Member] | Maximum [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Future milestone payments	76,000,000
Agreement with Santen Pharmaceutical Co., Ltd. [Member] | Development-Based Milestones [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Future milestone payments	13,000,000
Agreement with Santen Pharmaceutical Co., Ltd. [Member] | Commercialization-Based Milestones [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Future milestone payments	$ 63,000,000
Revenue recognition milestone achieved				$ 0

Financial Instruments - Summary

Financial Instruments - Summary of Money Market Funds and Available-for-Sale Securities (Detail) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	$ 41,219	$ 35,323
Unrealized Loss		(1)
Estimated Fair Value	41,219	35,322
Money market funds [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	592	568
Estimated Fair Value	592	568
Certificates of deposit [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	150	150
Estimated Fair Value	150	150
Commercial paper [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	40,477	33,307
Estimated Fair Value	40,477	33,307
Cash and cash equivalents [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	36,008	27,788
Estimated Fair Value	36,008	27,788
Short-term investments [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	5,061	7,385
Unrealized Loss		(1)
Estimated Fair Value	5,061	7,384
Long-term restricted investments [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	150	150
Estimated Fair Value	$ 150	150
Corporate Debt Securities
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost		1,298
Unrealized Loss		(1)
Estimated Fair Value		$ 1,297

Financial Instruments - Summa35

Financial Instruments - Summary of Cost and Estimated Fair Value of Available-for-Sale Securities by Contractual Maturity (Detail) $ in Thousands	Jun. 30, 2018USD ($)
Investments Debt And Equity Securities [Abstract]
Mature in one year or less, Amortized Cost	$ 40,627
Amortized Cost	40,627
Mature in one year or less, Estimated Fair Value	40,627
Estimated Fair Value	$ 40,627

Financial Instruments - Additio

Financial Instruments - Additional Information (Detail)	Jun. 30, 2018USD ($)
Investments Debt And Equity Securities [Abstract]
Unrealized loss of securities	$ 0

Stock-Based Compensation - Summ

Stock-Based Compensation - Summary of Stock-Based Compensation Cost that has been Included in Statements of Comprehensive Loss (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total stock-based compensation	$ 639	$ 563	$ 1,300	$ 1,228
Cost of product revenues [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total stock-based compensation	23	28	48	56
Research and development [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total stock-based compensation	338	315	691	684
Selling, general and administrative [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total stock-based compensation	$ 278	$ 220	$ 561	$ 488

Stock-Based Compensation - Addi

Stock-Based Compensation - Additional Information (Detail) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2018	Dec. 31, 2017
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Stock-based compensation cost capitalized in inventory	$ 14,000	$ 14,000

Stock-Based Compensation - Su39

Stock-Based Compensation - Summary of Assumptions Used to Estimate Fair Value of Options Granted and Shares Purchased (Detail)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Employees Stock Purchase Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free rate	2.10%	1.00%
Risk-free rate, minimum			1.30%	0.60%
Risk-free rate, maximum			2.10%	1.00%
Expected dividend yield	0.00%	0.00%	0.00%	0.00%
Expected life of option (in years)	6 months	6 months	6 months	6 months
Volatility	66.00%	44.00%
Volatility, minimum			66.00%	44.00%
Volatility, maximum			146.00%	81.00%
Stock Option Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free rate, minimum	2.80%	2.00%	2.70%	2.00%
Risk-free rate, maximum	3.00%	2.30%	3.00%	2.50%
Expected dividend yield	0.00%	0.00%	0.00%	0.00%
Volatility, minimum	79.00%	75.00%	79.00%	75.00%
Volatility, maximum	85.00%	81.00%	86.00%	82.00%
Stock Option Plan [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected life of option (in years)	7 years 6 months	6 years 9 months 18 days	7 years	6 years 9 months 18 days
Stock Option Plan [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected life of option (in years)	10 years	10 years	10 years	10 years

Term Loan - Additional Informat

Term Loan - Additional Information (Detail) - Oxford Finance 2016 Term Loan [Member] - USD ($)	1 Months Ended		6 Months Ended
	Feb. 28, 2018	Jul. 31, 2016	Jun. 30, 2018
Debt Instrument [Line Items]
Secured term loan		$ 20,000,000
Term loan repayment description			The 2016 Loan Agreement provides for interest only payments for the first 18 months, followed by consecutive monthly payments of principal and interest in arrears starting on March 1, 2018
First principal payment date	Dec. 1, 2018	Mar. 1, 2018
Term loan, maturity date		Aug. 1, 2020
Interest rate on term loan		7.95%	9.40%
Term loan, floating interest rate basis			index rate plus a spread
Facility fee paid at final payment		$ 150,000
Percentage of an additional payment equal to principal amount	10.00%	9.25%
Debt offering/issuance costs		$ 1,900,000
Loan modification fee	$ 100,000
Minimum [Member]
Debt Instrument [Line Items]
Percentage of prepayment fee		1.00%
Maximum [Member]
Debt Instrument [Line Items]
Percentage of prepayment fee		3.00%

Term Loan - Schedule of Future

Term Loan - Schedule of Future Maturities and Interest Payments due under Term Loan (Detail) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Future maturities and interest payments under the term loan:
Six months ended December 31, 2018	$ 2,711
2,019	12,463
2,020	8,845
Total minimum payments	24,019
Less amount representing interest	(4,019)
Gross balance of term loan	20,000
Less unamortized debt discount	(139)
Carrying value of term loan	19,861
Less term loan, current portion, net	(7,520)	$ (7,281)
Term loan, non-current portion, net	$ 12,341	$ 12,634

Stockholders' Equity - Addition

Stockholders' Equity - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2018	Jun. 30, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Proceeds from sale of common stock, net of commission		$ 18,456	$ 5,037
Controlled Equity Offering Program [Member] | Cantor Fitzgerald Co [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Proceeds from sale of common stock, net of commission	$ 3,100	$ 16,800
Sale of common stock during period	1,458,151	9,629,426
Common stock weighted average price	$ 2.22	$ 1.80

Subsequent Events - Additional

Subsequent Events - Additional Information (Detail) - Patent Purchase Agreement with Indivior [Member] - Regulatory Based Milestone [Member] - USD ($) $ in Millions	Jul. 27, 2018	Sep. 26, 2017
Subsequent Event [Line Items]
Milestone payment		$ 5
Subsequent Event [Member]
Subsequent Event [Line Items]
Milestone payment	$ 5