Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | May 06, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Title of 12(b) Security | Common Stock $0.0001 par value per share Preferred Share Purchase Rights | |
Security Exchange Name | NASDAQ | |
Entity Interactive Data Current | Yes | |
Trading Symbol | DRRX | |
Entity Registrant Name | DURECT CORP | |
Entity Central Index Key | 0001082038 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 196,024,597 | |
Entity Shell Company | false | |
Entity Incorporation, State or Country Code | DE | |
Entity File Number | 000-31615 | |
Entity Tax Identification Number | 94-3297098 | |
Entity Address, Address Line One | 10260 Bubb Road | |
Entity Address, City or Town | Cupertino | |
Entity Address, State or Province | CA | |
Entity Current Reporting Status | Yes | |
Entity Address, Postal Zip Code | 95014 | |
City Area Code | 408 | |
Local Phone Number | 777-1417 | |
Document Quarterly Report | true | |
Document Transition Report | false |
Condensed Balance Sheets
Condensed Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 32,577 | $ 34,924 |
Short-term investments | 19,803 | 29,750 |
Accounts receivable (net of allowances of $49 at March 31, 2020 and $34 at December 31, 2019) | 1,707 | 2,313 |
Inventories, net | 3,310 | 3,383 |
Prepaid expenses and other current assets | 3,626 | 1,459 |
Total current assets | 61,023 | 71,829 |
Property and equipment, net | 543 | 469 |
Operating lease right-of-use assets | 5,725 | 6,066 |
Goodwill | 6,399 | 6,399 |
Long-term restricted investments | 150 | 150 |
Other long-term assets | 283 | 1,107 |
Total assets | 74,123 | 86,020 |
Current liabilities: | ||
Accounts payable | 2,080 | 2,109 |
Accrued liabilities | 3,457 | 6,284 |
Contract research liabilities | 3,116 | 3,653 |
Deferred revenue, current portion | 13,041 | 22,679 |
Operating lease liabilities, current portion | 2,058 | 2,043 |
Total current liabilities | 23,752 | 36,768 |
Deferred revenue, non-current portion | 10,915 | 812 |
Operating lease liabilities, non-current portion | 4,182 | 4,517 |
Term loan, non-current portion, net | 20,400 | 20,262 |
Other long-term liabilities | 800 | 801 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Common stock | 19 | 19 |
Additional paid-in capital | 513,223 | 512,046 |
Accumulated other comprehensive loss | (18) | (3) |
Accumulated deficit | (499,150) | (489,202) |
Stockholders’ equity | 14,074 | 22,860 |
Total liabilities and stockholders’ equity | $ 74,123 | $ 86,020 |
Condensed Balance Sheets (Paren
Condensed Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Statement Of Financial Position [Abstract] | ||
Allowances for accounts receivable | $ 49 | $ 34 |
Condensed Statements of Compreh
Condensed Statements of Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Total revenues | $ 2,775 | $ 4,131 |
Operating expenses: | ||
Cost of product revenues | $ 1,232 | $ 1,136 |
Type of cost, good or service [extensible list] | us-gaap:ProductMember | us-gaap:ProductMember |
Research and development | $ 7,717 | $ 6,251 |
Selling, general and administrative | 3,440 | 3,454 |
Total operating expenses | 12,389 | 10,841 |
Loss from operations | (9,614) | (6,710) |
Other income (expense): | ||
Interest and other income | 258 | 209 |
Interest expense | (592) | (629) |
Net other expense | (334) | (420) |
Net loss | (9,948) | (7,130) |
Net change in unrealized loss on available-for-sale securities, net of reclassification adjustments and taxes | (15) | (4) |
Total comprehensive loss | $ (9,963) | $ (7,134) |
Net loss per share | ||
Basic | $ (0.05) | $ (0.04) |
Diluted | $ (0.05) | $ (0.04) |
Weighted-average shares used in computing net loss per share | ||
Basic | 195,745 | 162,091 |
Diluted | 195,745 | 162,091 |
Collaborative Research and Development and Other Revenue [Member] | ||
Total revenues | $ (30) | $ 1,500 |
Product Revenue, Net [Member] | ||
Total revenues | $ 2,805 | $ 2,631 |
Condensed Statements of Stockho
Condensed Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional paid-in capital [Member] | Accumulated other comprehensive income (loss) [Member] | Accumulated deficit [Member] |
Beginning balance at Dec. 31, 2018 | $ 20,000 | $ 16 | $ 488,608 | $ (468,624) | |
Beginning balance, shares at Dec. 31, 2018 | 162,060,000 | ||||
Issuance of common stock upon equity financings, net of issuance costs | 61 | 61 | |||
Issuance of common stock upon equity financings, net of issuance cost, shares | 243,000 | ||||
Stock-based compensation expense from stock options and ESPP shares | 437 | 437 | |||
Fully vested options issued to settle accrued liabilities | 994 | 994 | |||
Net loss | (7,130) | (7,130) | |||
Change in unrealized loss on available-for-sale securities, net of tax | (4) | $ (4) | |||
Ending balance at Mar. 31, 2019 | 14,358 | $ 16 | 490,100 | (4) | (475,754) |
Ending balance, shares at Mar. 31, 2019 | 162,303,000 | ||||
Beginning balance at Dec. 31, 2019 | 22,860 | $ 19 | 512,046 | (3) | (489,202) |
Beginning balance, shares at Dec. 31, 2019 | 195,257,000 | ||||
Issuance of common stock upon exercise of stock options | 761 | 761 | |||
Issuance of common stock upon exercise of stock options, Shares | 577,000 | ||||
Stock-based compensation expense from stock options and ESPP shares | 416 | 416 | |||
Net loss | (9,948) | (9,948) | |||
Change in unrealized loss on available-for-sale securities, net of tax | (15) | (15) | |||
Ending balance at Mar. 31, 2020 | $ 14,074 | $ 19 | $ 513,223 | $ (18) | $ (499,150) |
Ending balance, shares at Mar. 31, 2020 | 195,834,000 |
Condensed Statements of Stock_2
Condensed Statements of Stockholders' Equity (Parenthetical) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Statement Of Stockholders Equity [Abstract] | |
Stock issuance costs | $ 129 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | ||
Cash flows from operating activities | |||
Net loss | $ (9,948) | $ (7,130) | |
Adjustments to reconcile net loss to net cash used in by operating activities: | |||
Depreciation and amortization | 62 | 82 | |
Stock-based compensation | 414 | 437 | |
Amortization of debt issuance cost | 112 | 89 | |
Net amortization on investments | 42 | 16 | |
Changes in operating lease liabilities | 21 | 50 | |
Changes in assets and liabilities: | |||
Accounts receivable | 606 | (464) | |
Inventories | 75 | 11 | |
Prepaid expenses and other assets | (1,343) | 33 | |
Accounts payable | (29) | 344 | |
Accrued and other liabilities | (2,800) | 792 | |
Contract research liabilities | (537) | 84 | |
Deferred revenue | 465 | ||
Total adjustments | (2,912) | 1,474 | |
Net cash used in operating activities | (12,860) | (5,656) | |
Cash flows from investing activities | |||
Purchases of property and equipment | (137) | (66) | |
Purchases of available-for-sale securities | (4,545) | (34) | |
Proceeds from maturities of available-for-sale securities | 14,435 | 1,696 | |
Net cash provided by investing activities | 9,753 | 1,596 | |
Cash flows from financing activities | |||
Payments on equipment financing obligations | (1) | (4) | |
Net proceeds from issuances of common stock | 761 | 61 | |
Net cash provided by financing activities | 760 | 57 | |
Net decrease in Cash, cash equivalents, and restricted cash | (2,347) | (4,003) | |
Cash, cash equivalents, and restricted cash, beginning of the period | 35,074 | 31,794 | |
Cash, cash equivalents, and restricted cash, end of the period | [1] | $ 32,727 | 27,791 |
Supplementary disclosure of non-cash financing information | |||
Fully vested options issued to settle accrued liabilities | 994 | ||
Operating lease right-of-use assets obtained in exchange for operating lease obligations | [2] | $ 7,329 | |
[1] | Includes restricted cash of $150,000 (in long term restricted investments) included in the condensed balance sheet at March 31, 2020. | ||
[2] | Amounts for the three months ended March 31, 2019 include the transition adjustment for the adoption of Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842). |
Condensed Statement of Cash Flo
Condensed Statement of Cash Flows (Parenthetical) | Mar. 31, 2020USD ($) |
Long Term Restricted Investments [Member] | |
Restricted cash | $ 150,000 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
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 the Company’s Epigenetics Regulator Program, in which the Company attempts to discover and develop molecules which have not previously been approved and marketed as therapeutics, and (ii) proprietary pharmaceutical programs, in which the Company applies its formulation expertise and technologies largely to active pharmaceutical ingredients whose safety and efficacy have previously been established but which the Company aims to improve 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 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 March 31, 2020, the operating results and comprehensive loss, stockholders’ equity and cash flows for the three months ended March 31, 2020 and 2019. The balance sheet as of December 31, 2019 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, 2019 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 March 31, 2020, the Company had an accumulated deficit of $499.2 million as well as negative cash flows from operating activities for the three months ended March 31, 2020. 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. 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. 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): March 31, 2020 December 31, 2019 (unaudited) Raw materials $ 328 $ 282 Work in process 1,660 1,537 Finished goods 1,322 1,564 Total inventories $ 3,310 $ 3,383 Revenue Recognition The Company enters into license and collaboration agreements under which the Company may receive upfront license fees, research funding and contingent milestone payments and royalties. 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 historical sales information. The Company expects product returns to be minimal. Collaborative Research and Development and Other Revenue The Company enters into license agreements, 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 standalone 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. 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. 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 customer 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 material royalty revenue resulting from the Company’s collaborative arrangements or material earn-out revenue from the Company’s patent purchase agreement with Indivior. The Company receives payments from its customers based on development cost schedules established in each contract. Up-front payments 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 months ended March 31, 2020 and 2019 are as follows (in thousands): Three months ended March 31, 2020 2019 United States $ 1,111 $ 2,523 Europe 1,085 827 Japan 274 422 Other 305 359 Total $ 2,775 $ 4,131 Comprehensive Loss Components of other comprehensive 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 disclosed in the Company’s Statements of Comprehensive Loss. Net 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 March 31, 2020 2019 Numerators: Net loss $ (9,948 ) $ (7,130 ) Denominator: Weighted average shares used to compute basic net loss per share 195,745 162,091 Dilutive common shares from stock options and ESPP — — Weighted average shares used to compute diluted net loss per share 195,745 162,091 Net loss per share: Basic $ (0.05 ) $ (0.04 ) Diluted $ (0.05 ) $ (0.04 ) Options to purchase approximately 7.3 million and 30.2 million shares of common stock were excluded from the denominator in the calculation of diluted net loss per share for the three months ended March 31, 2020 and 2019, respectively, as the effect would be anti-dilutive. Recent Accounting Pronouncements In November 2018, the Financial Accounting Standards Board (the FASB) issued ASU No. 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606 (ASU 2018-18) The adoption of this standard did not have a material effect on the Company’s financial statements. In August 2018, the FASB issued Accounting Standards Update (“ASU”) 2018-13 , Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement which eliminates certain disclosure requirements for fair value measurements for all entities, requires public entities to disclose certain new information and modifies some disclosure requirements. fiscal years The adoption of this standard did not have a material effect on the Company’s financial statements. In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, (ASU 2017-04) The adoption of this standard did not have a material effect on the Company’s financial statements. In June 2016, the FASB issued Accounting Standards Update No. 2016-13 (ASU 2016-13) “Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 requires measurement and recognition of expected credit losses for financial assets. This standard is effective for fiscal years beginning after December 15, 2022, including interim reporting periods within those years and must be adopted using a modified retrospective approach, with certain exceptions. Early adoption is permitted. The Company is in the process of assessing the impact of adopting of this standard on its financial statements. |
Strategic Agreements
Strategic Agreements | 3 Months Ended |
Mar. 31, 2020 | |
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 collaborators or counterparties are as follows (in thousands): Three months ended March 31, 2020 2019 Collaborator/Counterparty Gilead (1) $ (268 ) $ 1,252 Others (2) 238 248 Total collaborative research and development and other revenue $ (30 ) $ 1,500 (1) The Company signed a license agreement with Gilead on July 19, 2019 and received a nonrefundable upfront license fee and a milestone payment aggregating $35.0 million in 2019 which is being recognized as revenue as the Company’s obligation is being satisfied using the cost-to-cost input method (see Agreement with Gilead Sciences, Inc. (2) Includes: (a) amounts related to earn-out revenue from Indivior UK Limited (Indivior) with respect to PERSERIS net sales; (b) other feasibility program(s); and (c) research and development activities funded by Santen pharmaceutical Co. Ltd. (Santen). Note that in January 2018, the Company was notified by Santen that due to a shift in near term priorities, Santen has elected to reallocate research and development resources and put the Company’s program on pause until further notice. While the main program is on pause, the parties are working together on a limited set of research and development activities funded by Santen. Agreement with Gilead Sciences, Inc. On July 19, 2019, the Company entered into a license agreement (the “Gilead Agreement”) with Gilead Sciences, Inc. (“Gilead”). Pursuant to the Gilead Agreement, the Company granted Gilead the exclusive worldwide rights to develop and commercialize a long-acting injectable HIV product utilizing DURECT’s SABER ® Under the terms of the Gilead Agreement, Gilead made an upfront payment to DURECT of $25 million, with the potential for up to an additional $75 million in development and regulatory milestones, up to an additional $70 million in sales-based milestones, as well as tiered single-digit royalties on product sales for a defined period. In October 2019, the Company also received a $10 million milestone payment from Gilead for further development of the product candidate. Gilead has the exclusive option to license additional SABER-based products directed to HIV and HBV for up to an additional $150 million per product in upfront, development, regulatory and sales-based milestones as well as tiered single-digit royalties on sales. The Company performs specified development activities with Gilead funding certain portions of the development programs. The lead product candidate in this program is currently being re-formulated and will undergo additional pre-clinical development work. The Gilead Agreement contains customary representations, warranties and indemnification provision. The term of the Gilead Agreement is for the duration of Gilead’s obligation to pay royalties for product sales under the agreement. Each party has specified termination rights, including the right of Gilead to terminate at will with advance notice to DURECT and the right of each party to terminate the agreement upon material breach by the other party. The Company assessed the Gilead Agreement and concluded that Gilead is a customer. The Company evaluated the promised goods and services in the contract and concluded that it had two performance obligations. The Company and Gilead re-evaluated and revised the work plan and the associated budget during the quarter ended March 31, 2020, and the first performance obligation, expected to be completed and delivered by March 31, 2023, consists of a bundle of the exclusive licenses to the HIV product candidate and exclusive access to the SABER platform for use in the fields of HIV and HBV, the research, development and manufacturing services through completion of technology transfer (“the Primary Services”), participation in the joint development committee and initial supply of the related materials. The Company obtains additional consideration related to the ongoing research, development and manufacturing services associated with the Primary Services, which approximates the estimated fair value of these services, based upon an estimated workplan between the two parties, which can be subject to change depending on a variety of factors. None of these goods and services were distinct as they are highly interdependent and each represents an input into the process through which Gilead will be able to derive the full benefits from the licensed intellectual property. The additional research and development services after technology transfer will be accounted for as the second performance obligation as these services are distinct and not essential for Gilead. The Company will also obtain additional consideration related to these research and development services, if and when they are performed, which will approximate the estimated fair value of these services. The Company also evaluated Gilead’s rights to license additional SABER-based products and concluded that these are option rights, are at market rates, and do not constitute a material right performance obligation. As such, these options have been excluded from the initial allocation of transaction price and the Company will account for them as separate contracts when and if Gilead elects to exercise each option right. During the twelve months ended December 31, 2019, the upfront and milestone consideration of $35 million received in 2019 associated with the Primary Services was being recognized as revenue when the first performance obligation was being satisfied using the cost-to-cost input method, which the Company believes best depicts the transfer of control to the customer. Under the cost-to-cost input method, the extent of progress towards completion is measured based on the ratio of actual costs incurred to the total estimated costs. Revenue is recorded as a percentage of the transaction price based on the extent of progress towards completion. The estimate of the Company’s measure of progress, which can include additional Primary Services, if any, and the estimate of any additional consideration for those additional Primary Services, are included in the transaction price which is updated at each reporting date, and revenue is recognized on a cumulative catchup basis. As such, management applies a certain amount of judgment in estimating both the Primary Services and the corresponding timeline to through completion of the first performance obligation, which are key inputs when using the cost-to-cost input method. During the twelve months ended December 31, 2019, the Company recognized $12.3 million of the deferred revenue within collaborative research and development and other revenues. The Company also recognized $4.8 million from Gilead during the twelve months ended December 31, 2019 from feasibility related collaborative research and development services. As of December 31, 2019, the Company intended to recognize the remaining $22.7 million in deferred revenue associated with the upfront and milestone consideration within the next 12 months, which was when the Primary Services were estimated to be completed. During the three months ended March 31, 2020, the Company recognized a net revenue reversal of $465,000 related to the upfront license fee and milestone consideration as a result of a change in the remaining estimated costs to complete the Primary Services. As of March 31, 2020, the Company expects to recognize the remaining $23.1 million in deferred revenue associated with the upfront and milestone consideration within the next 36 months, which is when the Primary Services are now estimated to be completed. Consistent with the expected timeline, the Company recorded $13.0 million as short term deferred revenue and $10.1 million as long term deferred revenue as of March 31, 2020. Given that the estimate of the Company’s measure of progress is updated at each reporting date, and revenue is recognized on a cumulative catch up basis, a significant change in the remaining estimated costs to complete the Primary Services could have a material impact on revenues recognized (including reversal of previously recognized revenue) at each reporting date, as well as the classification between the current and non-current portions of the associated deferred revenue should the development timeline for technology transfer also be significantly extended. The following table provides a summary of collaborative research and development revenue recognized under the Gilead Agreement (in thousands). Three months ended March 31, 2020 2019 Recognition of upfront and milestone consideration $ (465 ) $ - Research and development expenses reimbursable by Gilead 197 1,252 Total collaborative research and development revenue $ (268 ) $ 1,252 Patent Purchase Agreement with Indivior On September 26, 2017, the Company entered into a Patent Purchase Agreement (the “Indivior Agreement”) with Indivior. Pursuant to the Indivior Agreement, the Company assigned to Indivior certain patent rights including granted patents extending through at least 2026. The Indivior Agreement contains customary representations, warranties and indemnities of the parties. Amounts recognized in the quarters ended March 31, 2020 and 2019 related to earn-out revenues from PERSERIS have been immaterial and are included in collaborative research and development and other revenue. 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 March 31, 2020). 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. In January 2018, the Company was notified by Santen that due to a shift in near term priorities, Santen elected to reallocate research and development resources and put the Company’s program on pause until further notice. While the main program is on pause, the parties are working together on a limited set of research and development activities funded by Santen. As of March 31, 2020, the cumulative aggregate payments received by the Company under this agreement were $3.3 million. |
Financial Instruments
Financial Instruments | 3 Months Ended |
Mar. 31, 2020 | |
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 March 31, 2020 is less than twelve months and these investments are rated by S&P and Moody’s at AAA or AA- for securities and A1, A2, P1 or P2 for commercial paper. The following is a summary of available-for-sale securities as of March 31, 2020 and December 31, 2019 (in thousands): March 31, 2020 Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value Money market funds $ 13,080 $ — $ — $ 13,080 Certificates of deposit 150 — — 150 Commercial paper 24,155 1 (14 ) 24,142 Municipal Bonds 2,217 3 2,220 Corporate debt 11,366 4 (12 ) 11,358 $ 50,968 $ 8 $ (26 ) $ 50,950 Reported as: Cash and cash equivalents $ 31,009 $ — $ (12 ) $ 30,997 Short-term investments 19,809 8 (14 ) 19,803 Long-term restricted investments 150 — — 150 $ 50,968 $ 8 $ (26 ) $ 50,950 December 31, 2019 Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value Money market funds $ 524 $ — $ — $ 524 Certificates of deposit 150 — — 150 Commercial paper 47,221 1 (4 ) 47,218 U.S. Government agencies 4,500 1 — 4,501 Corporate debt 9,869 1 (2 ) 9,868 $ 62,264 $ 3 $ (6 ) $ 62,261 Reported as: Cash and cash equivalents $ 32,364 $ — $ (3 ) $ 32,361 Short-term investments 29,750 3 (3 ) 29,750 Long-term restricted investments 150 — — 150 $ 62,264 $ 3 $ (6 ) $ 62,261 The following is a summary of the cost and estimated fair value of available-for-sale securities at March 31, 2020, by contractual maturity (in thousands): March 31, 2020 Amortized Cost Estimated Fair Value Mature in one year or less $ 37,888 $ 37,870 $ 37,888 $ 37,870 There were no securities that have had an unrealized loss for more than 12 months as of March 31, 2020. As of March 31, 2020, 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 | 3 Months Ended |
Mar. 31, 2020 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation | Note 4. Stock-Based Compensation As of March 31, 2020, 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 March 31, 2020 2019 Cost of product revenues $ 25 $ 21 Research and development 211 174 Selling, general and administrative 178 242 Total stock-based compensation $ 414 $ 437 As of March 31, 2020 and 2019, $12,000 and $12,000 of stock-based compensation cost was capitalized in inventory on the Company’s balance sheets, respectively. 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 months ended March 31, 2020 and 2019: Three months ended March 31, 2020 2019 Stock Options Risk-free rate 0.6-1.4% 2.3-2.7% Expected dividend yield — — Expected life of option (in years) 7.3 7.5-10.0 Volatility 84-86% 79-83% Three months ended March 31, 2020 2019 Employee Stock Purchase Plan Risk-free rate 1.6% 2.5% Expected dividend yield — — Expected life of option (in years) 0.5 0.5 Volatility 103% 60% |
Term Loan
Term Loan | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Term Loan | Note 5. Term Loan In July 2016, the Company entered into a $20.0 million secured single-draw term loan with Oxford Finance LLC (Oxford Finance). The Company and Oxford Finance entered into three subsequent amendments to the Loan Agreement in February 2018, November of 2018 and December 2019, for which the Company paid Oxford Finance loan modification fees of $100,000, $900,000 and $825,000 respectively. As amended, the 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 December 1, 2021 and continuing through the maturity date of the term loan of May 1, 2024. The Loan Agreement provides for a floating interest rate (7.95% initially and 7.43% as of March 31, 2020) based on an index rate plus a spread. In addition, a payment equal to 10% of the principal amount of the term loan 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 of between 0.75% and 2.5% of the principal amount of the term loan depending on the timing of prepayment. The $150,000 facility fee that was paid at the original closing, the loan modification fees and other debt offering/issuance costs have been recorded as debt discount on the Company’s balance sheet and together with the final $2.0 million payment are being amortized to interest expense using the effective interest method over the revised term of the loan. 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 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 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 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 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. The fair value of the term loan approximates the carrying value. Future maturities and interest payments due under the term loan as of March 31, 2020, are as follows (in thousands): Nine months ended December 31, 2020 $ 1,389 2020 3,172 2021 9,381 2022 8,644 2023 4,717 Total minimum payments 27,303 Less amount representing interest (5,605 ) Gross balance of term loan 21,698 Less unamortized debt discount (1,298 ) Carrying value of term loan, net 20,400 Less term loan, current portion, net - Term loan, non-current portion, net $ 20,400 As of March 31, 2020, the Company was in compliance with all material covenants under the Loan Agreement and there had been no material adverse change. |
Commitments
Commitments | 3 Months Ended |
Mar. 31, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments | Note 6. Commitments Operating Leases The Company has lease arrangements for its facilities in California and Alabama as follows. Location Approximate Square Feet Operation Expiration Cupertino, CA 30,149 sq. ft. Office, Laboratory and Manufacturing Lease expires 2024 (with an option to renew for an additional five years) Cupertino, CA 20,100 sq. ft. Office and Laboratory Lease expires 2024 (with an option to renew for an additional five years) Vacaville, CA 24,634 sq. ft. Manufacturing Lease expires 2023 Birmingham, AL 21,540 sq. ft. Office, Laboratory and Manufacturing Lease expires 2021 (with two options to renew the lease term for an additional five years each after the current lease expires) Under these leases, the Company is required to pay certain maintenance expenses in addition to monthly rent. Rent expense is recognized on a straight-line basis over the lease term for leases that have scheduled rental payment increases. Rent expense under all operating leases was $566,000 and $537,000 for the three months ended March 31, 2020 and 2019, respectively. Future minimum payments under these noncancelable leases are as follows (in thousands): Operating Leases Nine months ended December 31, 2020 $ 1,657 2021 2,126 2022 1,991 2023 1,970 Thereafter 275 $ 8,019 |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Stockholders' Equity | Note 7. Stockholders’ Equity In August 2018, the Company filed a shelf registration statement on Form S-3 with the SEC (the “2018 Registration Statement”) (File No. 333-226518), which upon being declared effective in October 2018, terminated the Company’s registration statement filed in November 2015 (File No. 333-207776) and allowed the Company to offer up to $175.0 million of securities from time to time in one or more public offerings, inclusive of up to $75.0 million of shares of the Company’s common stock which the Company may sell, subject to certain limitations, pursuant to a sales agreement dated November 3, 2015 with Cantor Fitzgerald & Co. (the “2015 Sales Agreement”). During the three months ended March 31, 2020, the Company did not issue any shares through its the 2015 Sales Agreement. During the three months ended March 31, 2019, the Company raised net proceeds (net of commissions) of approximately $184,000 from the sale of 242,750 shares of the Company’s common stock in the open market at a weighted average price of $0.78 per share, pursuant to the 2015 Sales Agreement. As of May 6, 2020, the Company had up to approximately $156.2 million of the Company’s securities available for sale under the 2018 Registration Statement, of which approximately $71.3 million of the Company’s common stock are available pursuant to the 2015 Sales Agreement. |
Subsequent Event
Subsequent Event | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Event | Note 8. Subsequent Event On May 5, 2020, in connection with new guidance issued by the United States Treasury Department and the U.S. Small Business Administration on April 23, 2020 (the “New Guidance”), DURECT Corporation (the “Company”), disclosed that it has returned all funds it previously received under the Paycheck Protection Program (the “PPP”) established under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The funds were received on April 20, 2020, as described in a Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on April 23, 2020. The Company applied for and received the PPP loan prior to the New Guidance. In light of the New Guidance which includes a presumption that essentially no publicly traded companies are eligible for a PPP loan, DURECT voluntarily returned the entire amount of the PPP loan, none of which had been utilized by the Company, to Silicon Valley Bank, the lender, on May 4, 2020. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
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 the Company’s Epigenetics Regulator Program, in which the Company attempts to discover and develop molecules which have not previously been approved and marketed as therapeutics, and (ii) proprietary pharmaceutical programs, in which the Company applies its formulation expertise and technologies largely to active pharmaceutical ingredients whose safety and efficacy have previously been established but which the Company aims to improve 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 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 March 31, 2020, the operating results and comprehensive loss, stockholders’ equity and cash flows for the three months ended March 31, 2020 and 2019. The balance sheet as of December 31, 2019 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, 2019 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 March 31, 2020, the Company had an accumulated deficit of $499.2 million as well as negative cash flows from operating activities for the three months ended March 31, 2020. 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. 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. 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): March 31, 2020 December 31, 2019 (unaudited) Raw materials $ 328 $ 282 Work in process 1,660 1,537 Finished goods 1,322 1,564 Total inventories $ 3,310 $ 3,383 |
Revenue Recognition | Revenue Recognition The Company enters into license and collaboration agreements under which the Company may receive upfront license fees, research funding and contingent milestone payments and royalties. 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 historical sales information. The Company expects product returns to be minimal. Collaborative Research and Development and Other Revenue The Company enters into license agreements, 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 standalone 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. 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. 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 customer 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 material royalty revenue resulting from the Company’s collaborative arrangements or material earn-out revenue from the Company’s patent purchase agreement with Indivior. The Company receives payments from its customers based on development cost schedules established in each contract. Up-front payments 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 months ended March 31, 2020 and 2019 are as follows (in thousands): Three months ended March 31, 2020 2019 United States $ 1,111 $ 2,523 Europe 1,085 827 Japan 274 422 Other 305 359 Total $ 2,775 $ 4,131 |
Comprehensive Loss | Comprehensive Loss Components of other comprehensive 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 disclosed in the Company’s Statements of Comprehensive Loss. |
Net Loss Per Share | Net 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 March 31, 2020 2019 Numerators: Net loss $ (9,948 ) $ (7,130 ) Denominator: Weighted average shares used to compute basic net loss per share 195,745 162,091 Dilutive common shares from stock options and ESPP — — Weighted average shares used to compute diluted net loss per share 195,745 162,091 Net loss per share: Basic $ (0.05 ) $ (0.04 ) Diluted $ (0.05 ) $ (0.04 ) Options to purchase approximately 7.3 million and 30.2 million shares of common stock were excluded from the denominator in the calculation of diluted net loss per share for the three months ended March 31, 2020 and 2019, respectively, as the effect would be anti-dilutive. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In November 2018, the Financial Accounting Standards Board (the FASB) issued ASU No. 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606 (ASU 2018-18) The adoption of this standard did not have a material effect on the Company’s financial statements. In August 2018, the FASB issued Accounting Standards Update (“ASU”) 2018-13 , Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement which eliminates certain disclosure requirements for fair value measurements for all entities, requires public entities to disclose certain new information and modifies some disclosure requirements. fiscal years The adoption of this standard did not have a material effect on the Company’s financial statements. In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, (ASU 2017-04) The adoption of this standard did not have a material effect on the Company’s financial statements. In June 2016, the FASB issued Accounting Standards Update No. 2016-13 (ASU 2016-13) “Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 requires measurement and recognition of expected credit losses for financial assets. This standard is effective for fiscal years beginning after December 15, 2022, including interim reporting periods within those years and must be adopted using a modified retrospective approach, with certain exceptions. Early adoption is permitted. The Company is in the process of assessing the impact of adopting of this standard on its financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Components of Inventories | The Company’s inventories consist of the following (in thousands): March 31, 2020 December 31, 2019 (unaudited) Raw materials $ 328 $ 282 Work in process 1,660 1,537 Finished goods 1,322 1,564 Total inventories $ 3,310 $ 3,383 |
Summary of Total Revenue by Geographic Region | Total revenue by geographic region for the three months ended March 31, 2020 and 2019 are as follows (in thousands): Three months ended March 31, 2020 2019 United States $ 1,111 $ 2,523 Europe 1,085 827 Japan 274 422 Other 305 359 Total $ 2,775 $ 4,131 |
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 March 31, 2020 2019 Numerators: Net loss $ (9,948 ) $ (7,130 ) Denominator: Weighted average shares used to compute basic net loss per share 195,745 162,091 Dilutive common shares from stock options and ESPP — — Weighted average shares used to compute diluted net loss per share 195,745 162,091 Net loss per share: Basic $ (0.05 ) $ (0.04 ) Diluted $ (0.05 ) $ (0.04 ) |
Strategic Agreements (Tables)
Strategic Agreements (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Summary of Collaborative Research and Development and Other Revenues Associated with Company's Collaborators or Counterparties | The collaborative research and development and other revenues associated with the Company’s collaborators or counterparties are as follows (in thousands): Three months ended March 31, 2020 2019 Collaborator/Counterparty Gilead (1) $ (268 ) $ 1,252 Others (2) 238 248 Total collaborative research and development and other revenue $ (30 ) $ 1,500 (1) The Company signed a license agreement with Gilead on July 19, 2019 and received a nonrefundable upfront license fee and a milestone payment aggregating $35.0 million in 2019 which is being recognized as revenue as the Company’s obligation is being satisfied using the cost-to-cost input method (see Agreement with Gilead Sciences, Inc. (2) Includes: (a) amounts related to earn-out revenue from Indivior UK Limited (Indivior) with respect to PERSERIS net sales; (b) other feasibility program(s); and (c) research and development activities funded by Santen pharmaceutical Co. Ltd. (Santen). Note that in January 2018, the Company was notified by Santen that due to a shift in near term priorities, Santen has elected to reallocate research and development resources and put the Company’s program on pause until further notice. While the main program is on pause, the parties are working together on a limited set of research and development activities funded by Santen. |
Agreement With Gilead Sciences, 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 Gilead Agreement (in thousands). Three months ended March 31, 2020 2019 Recognition of upfront and milestone consideration $ (465 ) $ - Research and development expenses reimbursable by Gilead 197 1,252 Total collaborative research and development revenue $ (268 ) $ 1,252 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
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 March 31, 2020 and December 31, 2019 (in thousands): March 31, 2020 Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value Money market funds $ 13,080 $ — $ — $ 13,080 Certificates of deposit 150 — — 150 Commercial paper 24,155 1 (14 ) 24,142 Municipal Bonds 2,217 3 2,220 Corporate debt 11,366 4 (12 ) 11,358 $ 50,968 $ 8 $ (26 ) $ 50,950 Reported as: Cash and cash equivalents $ 31,009 $ — $ (12 ) $ 30,997 Short-term investments 19,809 8 (14 ) 19,803 Long-term restricted investments 150 — — 150 $ 50,968 $ 8 $ (26 ) $ 50,950 December 31, 2019 Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value Money market funds $ 524 $ — $ — $ 524 Certificates of deposit 150 — — 150 Commercial paper 47,221 1 (4 ) 47,218 U.S. Government agencies 4,500 1 — 4,501 Corporate debt 9,869 1 (2 ) 9,868 $ 62,264 $ 3 $ (6 ) $ 62,261 Reported as: Cash and cash equivalents $ 32,364 $ — $ (3 ) $ 32,361 Short-term investments 29,750 3 (3 ) 29,750 Long-term restricted investments 150 — — 150 $ 62,264 $ 3 $ (6 ) $ 62,261 |
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 March 31, 2020, by contractual maturity (in thousands): March 31, 2020 Amortized Cost Estimated Fair Value Mature in one year or less $ 37,888 $ 37,870 $ 37,888 $ 37,870 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
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 March 31, 2020 2019 Cost of product revenues $ 25 $ 21 Research and development 211 174 Selling, general and administrative 178 242 Total stock-based compensation $ 414 $ 437 |
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 months ended March 31, 2020 and 2019: Three months ended March 31, 2020 2019 Stock Options Risk-free rate 0.6-1.4% 2.3-2.7% Expected dividend yield — — Expected life of option (in years) 7.3 7.5-10.0 Volatility 84-86% 79-83% Three months ended March 31, 2020 2019 Employee Stock Purchase Plan Risk-free rate 1.6% 2.5% Expected dividend yield — — Expected life of option (in years) 0.5 0.5 Volatility 103% 60% |
Term Loan (Tables)
Term Loan (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Future Maturities and Interest Payments due under Term Loan | The fair value of the term loan approximates the carrying value. Future maturities and interest payments due under the term loan as of March 31, 2020, are as follows (in thousands): Nine months ended December 31, 2020 $ 1,389 2020 3,172 2021 9,381 2022 8,644 2023 4,717 Total minimum payments 27,303 Less amount representing interest (5,605 ) Gross balance of term loan 21,698 Less unamortized debt discount (1,298 ) Carrying value of term loan, net 20,400 Less term loan, current portion, net - Term loan, non-current portion, net $ 20,400 |
Commitments (Tables)
Commitments (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Summary of Lease Arrangements of Company Facilities | The Company has lease arrangements for its facilities in California and Alabama as follows. Location Approximate Square Feet Operation Expiration Cupertino, CA 30,149 sq. ft. Office, Laboratory and Manufacturing Lease expires 2024 (with an option to renew for an additional five years) Cupertino, CA 20,100 sq. ft. Office and Laboratory Lease expires 2024 (with an option to renew for an additional five years) Vacaville, CA 24,634 sq. ft. Manufacturing Lease expires 2023 Birmingham, AL 21,540 sq. ft. Office, Laboratory and Manufacturing Lease expires 2021 (with two options to renew the lease term for an additional five years each after the current lease expires) |
Schedule of Future Operating Lease Minimum Payments | Future minimum payments under these noncancelable leases are as follows (in thousands): Operating Leases Nine months ended December 31, 2020 $ 1,657 2021 2,126 2022 1,991 2023 1,970 Thereafter 275 $ 8,019 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) $ in Thousands, shares in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Accounting Policies [Abstract] | |||
Date of incorporation | Feb. 6, 1998 | ||
Accumulated deficit | $ 499,150 | $ 489,202 | |
Options to purchase common stock excluded from computation of diluted net loss per share | 7.3 | 30.2 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Summary of Components of Inventories (Detail) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Inventory Net [Abstract] | ||
Raw materials | $ 328 | $ 282 |
Work in process | 1,660 | 1,537 |
Finished goods | 1,322 | 1,564 |
Total inventories | $ 3,310 | $ 3,383 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Summary of Total Revenue by Geographic Region (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenue | $ 2,775 | $ 4,131 |
United States [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenue | 1,111 | 2,523 |
Europe [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenue | 1,085 | 827 |
Japan [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenue | 274 | 422 |
Other [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenue | $ 305 | $ 359 |
Summary of Significant Accoun_7
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 | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Numerators: | ||
Net loss | $ (9,948) | $ (7,130) |
Denominator: | ||
Weighted average shares used to compute basic net loss per share | 195,745 | 162,091 |
Dilutive common shares from stock options and ESPP | 0 | 0 |
Weighted average shares used to compute diluted net loss per share | 195,745 | 162,091 |
Net loss per share: | ||
Basic | $ (0.05) | $ (0.04) |
Diluted | $ (0.05) | $ (0.04) |
Strategic Agreements - Summary
Strategic Agreements - Summary of Collaborative Research and Development and Other Revenues Associated with Company's Collaborators or Counterparties (Detail) - USD ($) $ in Thousands | Jul. 19, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Revenue | $ 2,775 | $ 4,131 | |||
Collaborative Research and Development and Other Revenue [Member] | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Revenue | (30) | 1,500 | |||
Agreement with Gilead [Member] | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Revenue | $ 25,000 | $ 35,000 | |||
Agreement with Gilead [Member] | Collaborative Research and Development and Other Revenue [Member] | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Revenue | [1] | (268) | 1,252 | ||
Agreements With Other Collaborators or Counterparties [Member] | Collaborative Research and Development and Other Revenue [Member] | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Revenue | [2] | $ 238 | $ 248 | ||
[1] | The Company signed a license agreement with Gilead on July 19, 2019 and received a nonrefundable upfront license fee and a milestone payment aggregating $35.0 million in 2019 which is being recognized as revenue as the Company’s obligation is being satisfied using the cost-to-cost input method (see Agreement with Gilead Sciences, Inc.). The lead product candidate is currently being re-formulated and will undergo additional pre-clinical development work. During the three months ended March 31, 2020, the Company recorded a net revenue reversal of $465,000 related to the upfront license fee and milestone payment in the three months ended March 31, 2020 due to a change in the Company’s estimated costs to complete its obligations under the license agreement, which was partially offset by $197,000 of reimbursable collaborative research and development services with Gilead earned during the quarter. Amounts recognized as revenue during the three months ended March 31, 2019, related entirely to the Company’s reimbursable collaborative research and development services with Gilead. | ||||
[2] | Includes: (a) amounts related to earn-out revenue from Indivior UK Limited (Indivior) with respect to PERSERIS net sales; (b) other feasibility program(s); and (c) research and development activities funded by Santen pharmaceutical Co. Ltd. (Santen). |
Strategic Agreements - Summar_2
Strategic Agreements - Summary of Collaborative Research and Development and Other Revenues Associated with Company's Collaborators or Counterparties (Parenthetical) (Detail) - USD ($) | Jul. 19, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
Revenue | $ 2,775,000 | $ 4,131,000 | ||
Agreement with Gilead [Member] | ||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
Amount related to the milestone payment earned | (465,000) | |||
Revenue | $ 25,000,000 | $ 35,000,000 | ||
Deferred revenue recognized | $ 12,300,000 | |||
Agreement with Gilead [Member] | License Fees [Member] | ||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
Revenue | 465,000 | |||
Collaborative Research and Development Services [Member] | Agreement with Gilead [Member] | License Fees [Member] | ||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
Deferred revenue recognized | $ 197,000 |
Strategic Agreements - Agreemen
Strategic Agreements - Agreement with Gilead Sciences, Inc - Additional Information (Detail) - USD ($) | Jul. 19, 2019 | Oct. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Total revenues | $ 2,775,000 | $ 4,131,000 | |||
Agreement with Gilead [Member] | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Total revenues | $ 25,000,000 | $ 35,000,000 | |||
Amount related to the milestone payment earned | $ 10,000,000 | ||||
Deferred revenue recognized | 12,300,000 | ||||
Deferred revenue | 23,100,000 | 22,700,000 | |||
Short Term Deferred Revenue | 13,000,000 | ||||
Long Term Deferred Revenue | 10,100,000 | ||||
Agreement with Gilead [Member] | License Fees [Member] | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Total revenues | $ 465,000 | ||||
Agreement with Gilead [Member] | Maximum [Member] | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Performance milestone payments based on successful development | 75,000,000 | ||||
Agreement with Gilead [Member] | Sales-Based Milestones [Member] | Maximum [Member] | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Performance milestone payments based on successful development | 70,000,000 | ||||
Agreement with Gilead [Member] | Upfront, Development, Regulatory and Sales-Based Milestones [Member] | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Performance milestone payments based on successful development | 35,000,000 | ||||
Agreement with Gilead [Member] | Upfront, Development, Regulatory and Sales-Based Milestones [Member] | Maximum [Member] | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Performance milestone payments based on successful development | $ 150,000,000 | ||||
Agreement with Gilead [Member] | Collaborative Research and Development and Other Revenue [Member] | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Deferred revenue recognized | $ 4,800,000 |
Strategic Agreements - Summar_3
Strategic Agreements - Summary of Collaborative Research and Development Revenue Recognized (Detail) - USD ($) | Jul. 19, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
Total collaborative research and development revenue | $ 2,775,000 | $ 4,131,000 | ||
Agreement with Gilead [Member] | ||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
Recognition of upfront and milestone consideration | (465,000) | |||
Research and development expenses reimbursable by Gilead | 197,000 | 1,252,000 | ||
Total collaborative research and development revenue | $ 25,000,000 | $ 35,000,000 | ||
Agreement with Gilead [Member] | Collaborative Research and Devlopment Revenue [Member] | ||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
Total collaborative research and development revenue | $ (268,000) | $ 1,252,000 |
Strategic Agreements - Patent P
Strategic Agreements - Patent Purchase Agreement with Indivior - Additional Information (Detail) | Sep. 26, 2017 |
Patent Purchase Agreement with Indivior [Member] | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |
Granted patents extending year, minimum | 2026 |
Strategic Agreements - Agreem_2
Strategic Agreements - Agreement with Santen Pharmaceutical Co., Ltd. - Additional Information (Detail) - USD ($) | Dec. 11, 2014 | Mar. 31, 2020 | Mar. 31, 2019 |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Total revenues | $ 2,775,000 | $ 4,131,000 | |
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 | Mar. 31, 2020 | Dec. 31, 2019 |
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | $ 50,968 | $ 62,264 |
Unrealized Gain | 8 | 3 |
Unrealized Loss | (26) | (6) |
Estimated Fair Value | 50,950 | 62,261 |
Money market funds [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 13,080 | 524 |
Estimated Fair Value | 13,080 | 524 |
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 | 24,155 | 47,221 |
Unrealized Gain | 1 | 1 |
Unrealized Loss | (14) | (4) |
Estimated Fair Value | 24,142 | 47,218 |
Municipal Bonds [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 2,217 | |
Unrealized Gain | 3 | |
Estimated Fair Value | 2,220 | |
U.S. Government agencies [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 4,500 | |
Unrealized Gain | 1 | |
Estimated Fair Value | 4,501 | |
Corporate debt [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 11,366 | 9,869 |
Unrealized Gain | 4 | 1 |
Unrealized Loss | (12) | (2) |
Estimated Fair Value | 11,358 | 9,868 |
Cash and cash equivalents [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 31,009 | 32,364 |
Unrealized Loss | (12) | (3) |
Estimated Fair Value | 30,997 | 32,361 |
Short-term investments [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 19,809 | 29,750 |
Unrealized Gain | 8 | 3 |
Unrealized Loss | (14) | (3) |
Estimated Fair Value | 19,803 | 29,750 |
Long-term restricted investments [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 150 | 150 |
Estimated Fair Value | $ 150 | $ 150 |
Financial Instruments - Summa_2
Financial Instruments - Summary of Cost and Estimated Fair Value of Available-for-Sale Securities by Contractual Maturity (Detail) $ in Thousands | Mar. 31, 2020USD ($) |
Investments Debt And Equity Securities [Abstract] | |
Mature in one year or less, Amortized Cost | $ 37,888 |
Amortized Cost | 37,888 |
Mature in one year or less, Estimated Fair Value | 37,870 |
Estimated Fair Value | $ 37,870 |
Financial Instruments - Additio
Financial Instruments - Additional Information (Detail) | Mar. 31, 2020USD ($) |
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 | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total stock-based compensation | $ 414 | $ 437 |
Cost of product revenues [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total stock-based compensation | 25 | 21 |
Research and development [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total stock-based compensation | 211 | 174 |
Selling, general and administrative [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total stock-based compensation | $ 178 | $ 242 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||
Stock-based compensation cost capitalized in inventory | $ 12,000 | $ 12,000 |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary of Assumptions Used to Estimate Fair Value of Options Granted and Shares Purchased (Detail) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Employees Stock Purchase Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free rate | 1.60% | 2.50% |
Expected dividend yield | 0.00% | 0.00% |
Expected life of option (in years) | 6 months | 6 months |
Volatility | 103.00% | 60.00% |
Stock Option Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free rate, minimum | 0.60% | 2.30% |
Risk-free rate, maximum | 1.40% | 2.70% |
Expected dividend yield | 0.00% | 0.00% |
Volatility, minimum | 84.00% | 79.00% |
Volatility, maximum | 86.00% | 83.00% |
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 3 months 18 days | 7 years 6 months |
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 |
Term Loan - Additional Informat
Term Loan - Additional Information (Detail) - USD ($) | 1 Months Ended | ||||
Dec. 31, 2019 | Nov. 30, 2018 | Feb. 28, 2018 | Jul. 31, 2016 | Mar. 31, 2020 | |
Debt Instrument [Line Items] | |||||
Loan modification fee | $ 825,000,000 | ||||
Oxford Finance LLC Term Loan [Member] | |||||
Debt Instrument [Line Items] | |||||
Secured term loan | $ 20,000,000 | ||||
Term loan repayment description | As amended, the 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 December 1, 2021 and continuing through the maturity date of the term loan of May 1, 2024 | ||||
First principal payment date | Dec. 1, 2021 | ||||
Term loan, maturity date | May 1, 2024 | ||||
Interest rate on term loan | 7.95% | 7.43% | |||
Term loan, floating interest rate basis | an index rate plus a spread | ||||
Facility fee paid at final payment | $ 150,000 | ||||
Percentage of an additional payment equal to principal amount | 10.00% | ||||
Debt offering/issuance costs | $ 2,000,000 | ||||
Loan modification fee | $ 900,000 | $ 100,000 | |||
Oxford Finance LLC Term Loan [Member] | Minimum [Member] | |||||
Debt Instrument [Line Items] | |||||
Percentage of prepayment fee | 0.75% | ||||
Oxford Finance LLC Term Loan [Member] | Maximum [Member] | |||||
Debt Instrument [Line Items] | |||||
Percentage of prepayment fee | 2.50% |
Term Loan - Schedule of Future
Term Loan - Schedule of Future Maturities and Interest Payments due under Term Loan (Detail) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Future maturities and interest payments under the term loan: | ||
Nine months ended December 31, 2020 | $ 1,389 | |
2020 | 3,172 | |
2021 | 9,381 | |
2022 | 8,644 | |
2023 | 4,717 | |
Total minimum payments | 27,303 | |
Less amount representing interest | (5,605) | |
Gross balance of term loan | 21,698 | |
Less unamortized debt discount | (1,298) | |
Carrying value of term loan, net | 20,400 | |
Term loan, non-current portion, net | $ 20,400 | $ 20,262 |
Commitments - Summary of Lease
Commitments - Summary of Lease Arrangements of Company Facilities (Detail) | 3 Months Ended |
Mar. 31, 2020ft²Option | |
Vacaville, CA [Member] | Manufacturing [Member] | |
Property Subject To Or Available For Operating Lease [Line Items] | |
Approximate Square Feet | 24,634 |
Expiration | Lease expires 2023 |
Lease expiration year | 2023 |
Birmingham, AL [Member] | Office, Laboratory and Manufacturing [Member] | |
Property Subject To Or Available For Operating Lease [Line Items] | |
Approximate Square Feet | 21,540 |
Expiration | Lease expires 2021 (with two options to renew the lease term for an additional five years each after the current lease expires) |
Lease expiration year | 2021 |
Lease renewal term | 5 years |
Number of renewal option for lease | Option | 2 |
Cupertino, CA [Member] | Office, Laboratory and Manufacturing [Member] | |
Property Subject To Or Available For Operating Lease [Line Items] | |
Lease expiration year | 2024 |
Lease renewal term | 5 years |
Cupertino, CA [Member] | Office, Laboratory and Manufacturing [Member] | Lease Amendment [Member] | |
Property Subject To Or Available For Operating Lease [Line Items] | |
Approximate Square Feet | 30,149 |
Expiration | Lease expires 2024 (with an option to renew for an additional five years) |
Cupertino, CA [Member] | Office and Laboratory [Member] | |
Property Subject To Or Available For Operating Lease [Line Items] | |
Lease expiration year | 2024 |
Lease renewal term | 5 years |
Cupertino, CA [Member] | Office and Laboratory [Member] | Lease Amendment [Member] | |
Property Subject To Or Available For Operating Lease [Line Items] | |
Approximate Square Feet | 20,100 |
Expiration | Lease expires 2024 (with an option to renew for an additional five years) |
Commitments - Additional Inform
Commitments - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | ||
Rent expenses of operating leases | $ 566,000 | $ 537,000 |
Commitments - Schedule of Futur
Commitments - Schedule of Future Operating Lease Minimum Payments (Detail) $ in Thousands | Mar. 31, 2020USD ($) |
Leases [Abstract] | |
Nine months ended December 31, 2020 | $ 1,657 |
2021 | 2,126 |
2022 | 1,991 |
2023 | 1,970 |
Thereafter | 275 |
Total operating leases future minimum payments | $ 8,019 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) - USD ($) $ / shares in Units, shares in Thousands | 3 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | May 06, 2020 | Oct. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Proceeds from sale of common stock, net of commission | $ 761,000 | $ 61,000 | ||
Maximum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Securities offered | $ 175,000,000 | |||
2015 Sales Agreement [Member] | IPO [Member] | Subsequent Event [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common stock available for sale | $ 71,300,000 | |||
2015 Sales Agreement [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 | $ 184,000,000 | |||
Sale of common stock during period | 242,750 | |||
Common stock weighted average price | $ 0.78 | |||
2015 Sales Agreement [Member] | Cantor Fitzgerald Co [Member] | Maximum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Securities offered | $ 75,000,000 | |||
2018 Registration Statement [Member] | Maximum [Member] | Subsequent Event [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common stock available for sale | $ 156,200,000 |