Biodelivery Sciences International (BDSI) 10-Q 9 Nov 15 2015 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2015	Nov. 06, 2015
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2015
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	Q3
Trading Symbol	BDSI
Entity Registrant Name	BIODELIVERY SCIENCES INTERNATIONAL INC
Entity Central Index Key	1,103,021
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		52,665,308

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents	$ 54,429	$ 70,472
Accounts receivable, net	1,406	3,141
Inventory	1,887	1,828
Prepaid expenses and other current assets	3,609	2,882
Total current assets	61,331	78,323
Property and equipment, net	4,261	3,890
Goodwill	2,715	2,715
Other intangible assets, net	3,498	4,226
Other assets	610	157
Total assets	72,415	89,311
Current liabilities:
Accounts payable and accrued liabilities	14,973	14,429
Notes payable, current maturities	4,000	8,000
Deferred revenue, current	7,236	6,772
Total current liabilities	26,209	29,201
Notes payable, less current maturities, net	25,679	4,173
Deferred revenue, long-term		841
Other long-term liabilities	825	700
Total liabilities	$ 52,713	$ 34,915
Commitments and contingencies (Notes 6, 7 and 10)
Stockholders' equity:
Preferred Stock, $.001 par value; 5,000,000 shares authorized; 2,093,155 and 2,139,000 shares of Series A Non-Voting Convertible Preferred Stock outstanding at September 30, 2015 and December 31, 2014, respectively	$ 2	$ 2
Common Stock, $.001 par value; 75,000,000 shares authorized; 52,655,369 and 51,603,070 shares issued; 52,639,878 and 51,587,579 shares outstanding at September 30, 2015 and December 31, 2014, respectively	53	52
Additional paid-in capital	273,069	259,920
Treasury stock, at cost, 15,491 shares	(47)	(47)
Accumulated deficit	(253,375)	(205,531)
Total stockholders' equity	19,702	54,396
Total liabilities and stockholders' equity	$ 72,415	$ 89,311

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2015	Dec. 31, 2014
Preferred Stock, par value	$ 0.001	$ 0.001
Preferred Stock, shares authorized	5,000,000	5,000,000
Common Stock, par value	$ 0.001	$ 0.001
Common Stock, shares authorized	75,000,000	75,000,000
Common Stock, shares issued	52,655,369	51,603,070
Common Stock, shares outstanding	52,639,878	51,587,579
Treasury stock, shares	15,491	15,491
Series A Non-Voting Convertible Preferred Stock [Member]
Preferred Stock, shares outstanding	2,093,155	2,139,000

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Revenues:
Product sales	$ 1,155		$ 2,665
Product royalty revenues	25	$ 12	689	$ 1,858
Research and development reimbursements	55	1,298	909	12,067
Contract revenues		513	11,759	22,472
Total Revenues:	1,235	1,823	16,022	36,397
Cost of sales	1,699	463	5,443	1,875
Expenses:
Research and development	4,473	6,770	15,527	29,376
General and administrative	14,715	13,648	41,185	25,533
Total Expenses:	19,188	20,418	56,712	54,909
Loss from operations	(19,652)	(19,058)	(46,133)	(20,387)
Interest expense, net	(785)	(515)	(1,732)	(1,589)
Derivative loss		(5,685)		(14,631)
Other (expense) income, net	(2)	2	21	35
Net loss	$ (20,439)	$ (25,256)	$ (47,844)	$ (36,572)
Basic and diluted loss per share:	$ (0.39)	$ (0.51)	$ (0.92)	$ (0.77)
Weighted average common stock shares outstanding:	52,542,715	49,555,815	52,286,757	47,391,040

Condensed Consolidated Stateme5

Condensed Consolidated Statement of Stockholders' Equity (Unaudited) - 9 months ended Sep. 30, 2015 - USD ($) $ in Thousands	Total	Common Stock [Member]	Additional Paid-In Capital [Member]	Treasury Stock [Member]	Accumulated Deficit [Member]	Series A Preferred Stock [Member]
Beginning Balance at Dec. 31, 2014	$ 54,396	$ 52	$ 259,920	$ (47)	$ (205,531)	$ 2
Beginning Balance, shares at Dec. 31, 2014		51,603,070				2,139,000
Stock-based compensation	12,703		12,703
Restricted stock awards		$ 1	(1)
Restricted stock awards, shares		857,677
Exercise of stock options	$ 480		480
Exercise of stock options, shares	160,050	148,493
Exercise of warrants	$ 1		1
Exercise of warrants, shares		284
Short swing profit return	6		6
Conversion of preferred shares to common shares	0	$ 0	0	0	0	$ 0
Conversion of preferred shares to common shares, shares		45,845				(45,845)
Equity financing costs	(40)		(40)
Net loss	(47,844)				(47,844)
Ending Balance at Sep. 30, 2015	$ 19,702	$ 53	$ 273,069	$ (47)	$ (253,375)	$ 2
Ending Balance, shares at Sep. 30, 2015		52,655,369				2,093,155

Condensed Consolidated Stateme6

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Operating activities:
Net loss	$ (47,844)	$ (36,572)
Depreciation	248	55
Accretion of debt discount	400	482
Amortization of intangible assets	728	728
Derivative loss		14,631
Stock-based compensation expense	12,703	4,857
Changes in assets and liabilities:
Accounts receivable	1,734	2,589
Inventories	(59)	(2,024)
Prepaid expenses and other assets	(727)	(805)
Accounts payable and accrued expenses	477	2,978
Deferred revenue	(377)	2,282
Net cash flows from operating activities	(32,717)	(10,799)
Investing activities:
Purchase of equipment	(619)	(1,554)
Net cash flows from investing activities	(619)	(1,554)
Financing activities:
Proceeds from sales of securities		70,718
Equity financing costs	(40)
Proceeds from exercise of stock options	480	4,573
Proceeds from exercise of common stock warrants	1	4,931
Payment on note payable	(3,335)	(5,333)
Proceeds from notes payable	20,667
Payment of deferred financing fees	(486)
Return of short swing profits	6	82
Net cash flows from financing activities	17,293	74,971
Net change in cash and cash equivalents	(16,043)	62,618
Cash and cash equivalents at beginning of year	70,472	23,176
Cash and cash equivalents at end of period	54,429	85,794
Cash paid for interest	$ 1,201	$ 1,065

Organization, Basis of Presenta

Organization, Basis of Presentation and Summary of Significant Policies	9 Months Ended
	Sep. 30, 2015
Accounting Policies [Abstract]
Organization, Basis of Presentation and Summary of Significant Policies	1. Organization, basis of presentation and summary of significant policies: Overview BioDelivery Sciences International Inc., together with its subsidiaries (collectively, the “Company” or “BDSI”) is a specialty pharmaceutical company that is leveraging its novel and proprietary patented drug delivery technologies to develop and commercialize, either on its own or in partnerships with third parties, new applications of proven therapeutics. The Company is focusing on developing products to meet unmet patient needs in the areas of pain management and addiction. The accompanying unaudited condensed consolidated financial statements include all adjustments (consisting of normal and recurring adjustments) necessary for a fair presentation of these financial statements. The condensed consolidated balance sheet at December 31, 2014 has been derived from the Company’s audited consolidated financial statements included in its annual report on Form 10-K for the year ended December 31, 2014. Certain footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted pursuant to the Securities and Exchange Commission (“SEC”) rules and regulations. It is suggested that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2014. Operating results for the three and nine month period ended September 30, 2015 are not necessarily indicative of results for the full year or any other future periods. As used herein, the Company’s common stock, par value $.001 per share, is referred to as the “Common Stock.” Use of estimates in financial statements The preparation of the accompanying condensed consolidated financial statements requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and assumptions. Inventory Inventories are stated at the lower of cost or market value with costs determined on the first-in, first-out method. Inventory consists of raw materials, work in process and finished goods. Raw materials include active pharmaceutical ingredient for a product to be manufactured, work in process includes the bulk inventory of laminate prior to being packaged for sale, and finished goods include pharmaceutical products ready for commercial sale. On a quarterly basis, the Company analyzes its inventory levels and records allowances for inventory that has become obsolete, inventory that has a cost basis in excess of the expected net realizable value and inventory that is in excess of expected demand based upon projected product sales. There were no allowances recorded at September 30, 2015. Deferred revenue Consistent with the Company’s revenue recognition policy, deferred revenue represents cash received in advance for licensing fees, consulting, research and development services, related supply agreements and product sales. Such payments are reflected as deferred revenue until recognized under the Company’s revenue recognition policy. Deferred revenue is classified as current if management believes the Company will be able to recognize the deferred amount as revenue within twelve months of the balance sheet date. Revenue recognition Product Sales ® As of September 30, 2015 and December 31, 2014, the Company had $1.2 million and $0.8 million of deferred revenue related to sales of BUNAVAIL ® to wholesalers for which future returns could not be reasonably estimated at the time of sale. Deferred revenue is recognized when the product is sold to the end user, based upon prescriptions filled. To estimate product sold to end users, the Company relies on third-party information, including prescription data and information obtained from significant distributors with respect to their inventory levels and sales to customers. Deferred revenue is recorded net of estimated allowances for rebates, price adjustments, chargebacks, prompt payment and other discounts. Estimated allowances are included in accounts payable and accrued liabilities in the accompanying balance sheets as of September 30, 2015 and December 31, 2014 (Note 4). Product Returns ® to estimate its returns at time of ex-factory sales. When the Company cannot reasonably estimate the amount of future product returns, it records revenues when the risk of product return has been substantially eliminated which is at the time the product is sold to the end user. Rebates- Price Adjustments and Chargebacks The Company, from time to time, offers certain promotional product-related incentives to its customers. These programs include certain product incentives to pharmacy customers and other sales stocking allowances. The Company has voucher programs for BUNAVAIL ® whereby the Company offers a point-of-sale subsidy to retail consumers. The Company estimates its liabilities for these voucher programs based on the historical redemption rates for similar completed programs used by other pharmaceutical companies as reported to the Company by a third-party claims processing organization and actual redemption rates for the Company’s completed programs. The Company accounts for the costs of these special promotional programs as price adjustments, which are a reduction of gross revenue. Prompt Payment Discounts Deferred Cost of Sales The Company defers its cost of sales in connection with BUNAVAIL ® sales at time of ex-factory sales. These costs are recognized when the product is sold to the end user. The Company had $1.1 million and $0.7 million of deferred costs of sales at September 30, 2015 and December 31, 2014, respectively, which are included in prepaid expenses and other current assets in the accompanying condensed consolidated balance sheets. Cost of Sales The cost of sales attributable to the production of BUNAVAIL ® includes raw materials, production costs at our two contract manufacturing sites, quality testing directly related to the product, and depreciation on equipment that we have purchased to produce BUNAVAIL ® . It also includes any batches not meeting specifications and raw material yield loss. Yield losses and batches not meeting specifications are expensed as incurred. Cost of sales is recognized as actual product is sold through to the end user. During the three and nine months ended September 30, 2015, the Company wrote down $0.3 million and $0.8 million, respectively, of inventory to lower of cost or market, which is recorded as cost of sales in the accompanying condensed consolidated statement of operations. No such adjustments were made during the comparable periods in 2014. The cost of sales attributable to the production of ONSOLIS ® and BREAKYL™ includes all costs related to creating the product at the Company’s contract manufacturing locations in the U.S. and Germany. The Company’s contract manufacturers bill the Company for the final product, which includes materials, direct labor costs, and certain overhead costs as outlined in applicable supply agreements. Cost of sales also includes royalty expenses that the Company owes to third parties. Recent accounting pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2014-09, “Revenue from Contracts with Customers,” which supersedes the revenue recognition requirements of Accounting Standards Codification (“ASC”) Topic 605, “Revenue Recognition” and most industry-specific guidance on revenue recognition throughout the ASC. The new standard is principles-based and provides a five step model to determine when and how revenue is recognized. The core principle of the new standard is that revenue should be recognized when a company transfers promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The new standard also requires disclosure of qualitative and quantitative information surrounding the amount, nature, timing and uncertainty of revenues and cash flows arising from contracts with customers. In July 2015, the FASB agreed to defer the effective date of the standard from January 1, 2017 to January 1, 2018, with an option that permits companies to adopt the standard as early as the original effective date. Early application prior to the original effective date is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting.

Liquidity and Management's Plan

Liquidity and Management's Plans	9 Months Ended
	Sep. 30, 2015
Text Block [Abstract]
Liquidity and Management's Plans	2. Liquidity and management’s plans: At September 30, 2015, the Company had cash and cash equivalents of approximately $54.4 million. The Company used $32.7 million of cash from operations during the nine months ended September 30, 2015 and had stockholders’ equity of $19.7 million at September 30, 2015, versus $54.4 million at December 31, 2014. The Company expects that it has sufficient cash to manage the business into approximately the middle of 2017, although this estimation assumes that the Company does not accelerate the development of existing, or acquire other, drug development opportunities or otherwise face unexpected events, costs or contingencies, any of which could affect the Company’s cash requirements. This estimation also includes the anticipated receipt by the Company of a $50 million milestone payment, less approximately $6 million of cumulative pre-payments received and recorded in deferred revenue current in the accompanying condensed consolidated balance sheet from Endo Pharmaceuticals Inc., a subsidiary of Endo International plc (“Endo”), the Company’s commercial partner for BELBUCA ™ (CIII) (buprenorphine HCl) which was approved by the U.S. Food and Drug Administration (“FDA”) on October 23, 2015 (see notes 6 and 11). Additional capital may be required to support the Company’s ongoing commercialization activities for BUNAVAIL ® , the anticipated commercial relaunch of ONSOLIS ® , the continued development of Clonidine Topical Gel and Buprenorphine Depot Injection or other products which may be acquired or licensed by the Company, and for general working capital requirements. Based on product development timelines and agreements with the Company’s development partners, the ability to scale up or reduce personnel and associated costs are factors considered throughout the product development life cycle. Available resources may be consumed more rapidly than currently anticipated, potentially resulting in the need for additional funding. Readers are cautioned that additional funding, capital or loans (including, without limitation, milestone or other payments from commercialization agreements) may be unavailable on favorable terms, if at all.

Inventory

Inventory	9 Months Ended
	Sep. 30, 2015
Inventory Disclosure [Abstract]
Inventory	3. Inventory: The following table represents the components of inventory as of: September 30, December 31, Raw materials & supplies $ 489 $ 544 Work-in-process 1,239 523 Finished goods 159 761 Total inventories $ 1,887 $ 1,828

Accounts Payable and Accrued Li

Accounts Payable and Accrued Liabilities	9 Months Ended
	Sep. 30, 2015
Payables and Accruals [Abstract]
Accounts Payable and Accrued Liabilities	4. Accounts payable and accrued liabilities: The following table represents the components of accounts payable and accrued liabilities as of: September 30, December 31, Accounts payable $ 8,247 $ 9,072 Accrued price adjustments 1,662 1,094 Accrued rebates 838 231 Accrued chargebacks 47 14 Accrued compensation and benefits 1,691 945 Accrued royalties 414 770 Accrued other 2,074 2,303 Total accounts payable and accrued expenses $ 14,973 $ 14,429

Property and Equipment

Property and Equipment	9 Months Ended
	Sep. 30, 2015
Property, Plant and Equipment [Abstract]
Property and Equipment	5. Property and Equipment: Property and equipment, summarized by major category, consist of the following as of: September 30, December 31, Idle equipment $ 4,971 $ 4,432 Machinery & equipment 580 680 Computer equipment & software 395 344 Office furniture & equipment 194 110 Leasehold improvements 53 9 Total 6,193 5,575 Less accumulated depreciation (1,932) (1,685 ) Total property, plant & equipment, net $ 4,261 $ 3,890 Depreciation expense for the nine month periods ended September 30, 2015 and September 30, 2014, was approximately $0.2 million and $0.06 million, respectively. Depreciation expense for the three month periods ended September 30, 2015 and September 30, 2014, was approximately $0.08 million and $0.03 million, respectively.

License and Development Agreeme

License and Development Agreements	9 Months Ended
	Sep. 30, 2015
Business Combinations [Abstract]
License and Development Agreements	6. License and Development Agreements: The Company has periodically entered into license and development agreements to develop and commercialize its products. The arrangements typically are multi-deliverable arrangements that are funded through upfront payments, milestone payments, royalties and other forms of payment to the Company. The Company’s most significant license and development agreements are as follows: Meda License, Development and Supply Agreements In August 2006 and September 2007, the Company entered into certain agreements with Meda AB (“Meda”), a Swedish company to develop and commercialize the Company’s ONSOLIS ® product, a drug treatment for breakthrough cancer pain delivered utilizing the Company’s BEMA ® technology. The agreements relate to the United States, Mexico and Canada (“Meda U.S. Agreements”) and to certain countries in Europe (“Meda EU Agreements”). They carry license terms that commenced on the date of first commercial sale in each respective territory and end on the earlier of the entrance of a generic product to the market or upon expiration of the patents, which begin to expire in 2020. On March 12, 2012, the Company announced the postponement of the U.S. re-launch of ONSOLIS ® following the initiation of the class-wide Risk Evaluation and Mitigation Strategy (“REMS”) until the product formulation could be modified to address two appearance-related issues. Such appearance-related issues involved the formation of microscopic crystals and a fading of the color in the mucoadhesive layer, raised by the FDA during an inspection of the Company’s North American manufacturing partner for ONSOLIS ® , Aveva Drug Delivery Systems, Inc. (“Aveva”). While the appearance issues do not affect the product’s underlying integrity, safety or performance, the FDA believes that the fading of the color in particular may potentially confuse patients, necessitating a modification of the product and its specification before it can be manufactured and distributed. The source of microcrystal formation and the potential for fading of the color in the mucoadhesive layer of ONSOLIS ® was found to be specific to a buffer used in its formulation. The Company modified the formulation and as of the date of this report has more than 12 months of stability data on the reformulated product that shows no signs of microcrystal formation or color changes. The Company determined that, upon inception of both the U.S. and EU Meda arrangements, all deliverables were considered one combined unit of accounting. As such, all cash payments from Meda that were related to these deliverables were initially recorded as deferred revenue. Upon commencement of the license term (date of first commercial sale in each territory), the license and certain deliverables associated with research and development services were delivered to Meda. The first commercial sale in the U.S. occurred in October 2009. As a result, $59.7 million of the aggregate milestones and services revenue was recognized as revenue in fiscal year 2009. On January 27, 2015, the Company announced that it had entered into an assignment and revenue sharing agreement with Meda to return to the Company the marketing authorization for ONSOLIS ® for the U.S. and the right to seek marketing authorizations for ONSOLIS ® in Canada and Mexico. Following return of the US marketing authorization from Meda, the Company submitted a prior approval supplement for the new formulation to the FDA in March 2015 that was approved in July 2015. Efforts to extend the Company’s supply agreement with the manufacturer, Aveva, who is now a subsidiary of Apotex, Inc. (“Apotex”), have been unsuccessful up to this point and the agreement expired on October 15, 2015. However, the Company is still in discussion with Aveva/Apotex regarding the manufacture of ONSOLIS ® . In addition, the Company has identified an alternate supplier and requested guidance from the FDA on the specifics required for obtaining approval to supply product from this new vendor. This will in part help the Company to better determine when ONSOLIS ® may be available to the marketplace and to allow the Company to move closer to a commercial partnership arrangement. U.S. related deferred revenue of $0.2 million and $0.5 million was recorded as contract revenue during the three and nine months ended September 30, 2014, respectively. Also, in connection with the return of the U.S. marketing authorization by Meda to the Company in January 2015, the remaining U.S.-related deferred revenue of $1.0 million was recorded as contract revenue during the nine months ended September 30, 2015. No such revenue was recorded for the three months ended September 30, 2015. Endo License and Development Agreement In January 2012, the Company entered into a License and Development Agreement with Endo pursuant to which the Company granted Endo an exclusive commercial world-wide license to develop, manufacture, market and sell the Company’s BELBUCA™ product and to complete U.S. development of such product candidate for purposes of seeking FDA approval (the “Endo Agreement”). BELBUCA™ is for the management of pain severe enough to require daily, around-the-clock, long-term opioid treatment and for which alternative treatment options are inadequate. Pursuant to the Endo Agreement, Endo has obtained all rights necessary to complete the clinical and commercial development of BELBUCA™ and to sell the product worldwide. Although Endo has obtained all such necessary rights, the Company has agreed under the Endo Agreement to be responsible for the completion of certain clinical trials regarding BELBUCA™ (and providing clinical trial materials for such trials) necessary to submit a New Drug Application (“NDA”) to the FDA in order to obtain approval of BELBUCA™ in the U.S.). The Company is responsible for development activities through the filing of the NDA in the U.S., while Endo is responsible for the development following the NDA submission as well as the manufacturing, distribution, marketing and sales of BELBUCA™ on a worldwide basis. In addition, Endo is responsible for all filings required in order to obtain regulatory approval of BELBUCA™. Pursuant to the Endo Agreement, the Company has received (or is expected to receive upon satisfaction of applicable conditions) the following payments (some portion(s) of which will be utilized by the Company to support its development obligations under the Endo Agreement with respect to BELBUCA™): • $30 million non-refundable upfront license fee (earned in January 2012); • $15 million for enhancement of intellectual property rights (earned in May 2012); • $20 million for full enrollment in two clinical trials ($10 million earned in January 2014 and $10 million earned in June 2014); • $10 million upon FDA acceptance of filing NDA (earned in February 2015); • $50 million upon regulatory approval (earned in October 2015); • up to an aggregate of $55 million based on the achievement of four separate post-approval sales thresholds; and • sales-based royalties in a particular percentage range on U.S. sales of BELBUCA™, and royalties in a lesser range on sales outside the United States, subject to certain restrictions and adjustments. The Company has assessed its arrangement with Endo and the Company’s deliverables thereunder at inception to determine: (i) the separate units of accounting for revenue recognition purposes, (ii) which payments should be allocated to which of those units of accounting and (iii) the appropriate revenue recognition pattern or trigger for each of those payments. The assessment requires subjective analysis and requires management to make judgments, estimates and assumptions about whether deliverables within multiple-element arrangements are separable and, if so, to determine the amount of arrangement consideration to be allocated to each unit of accounting. At the inception of the Endo arrangement, the Company determined that the Endo Agreement was a multi-deliverable arrangement with three deliverables: (1) the license rights related to BELBUCA™, (2) services related to obtaining enhanced intellectual property rights through the issuance of a particular patent and (3) clinical development services. The Company concluded that the license delivered to Endo at the inception of the Endo Agreement has stand-alone value. It was also determined that there was a fourth deliverable, the provision of clinical trial material (“CTM”). The amounts involved are, however, immaterial and delivered in essentially the same time frame as the clinical development services. Accordingly, the Company did not separately account for the CTM deliverable, but considers it part of the clinical development services deliverable. The initial non-refundable $30 million license fee was allocated to each of the three deliverables based upon their relative selling prices using best estimates. The analysis of the best estimate of the selling price of the deliverables was based on the income approach, the Company’s negotiations with Endo and other factors, and was further based on management’s estimates and assumptions which included consideration of how a market participant would use the license, estimated market opportunity and market share, the Company’s estimates of what contract research organizations would charge for clinical development services, the costs of clinical trial materials and other factors. Also considered were entity specific assumptions regarding the results of clinical trials, the likelihood of FDA approval of the subject product and the likelihood of commercialization based in part on the Company’s prior agreements with the BEMA ® Based on this analysis, $15.6 million of the up-front license fee was allocated to the license (which was estimated to have a value significantly in excess of $30 million), and $14.4 million to clinical development services (which is inclusive of the cost of CTM). Although the intellectual property component was considered a separate deliverable, no distinct amount of the up-front payment was assigned to this deliverable because the Company determined the deliverable to be perfunctory. The amount allocated to the license was recognized as revenue in fiscal year 2012. The portion of the upfront license fee allocated to the clinical development services deliverable of $14.4 million is being recognized as those services are performed. The Company estimated that such clinical development services would extend into the first half of 2015. Such services were completed by March 2015 and resulted in the recognition of $0.4 million during the nine months ended September, 30, 2015 in the accompanying condensed consolidated statements of operations. There was no contact revenue recognized during the three months ended September 30, 2015. There was $0.5 million and $2.3 million recognized as contract revenue during the three and nine months ended September 30, 2014, respectively. The term of the Endo Agreement shall last, on a country-by-country basis, until the later of: (i) 10 years from the date of the first commercial sale of BELBUCA™ in a particular country or (ii) the date on which the last valid claim of the Company’s patents covering BELBUCA™ in a particular country has expired or been invalidated. The Endo Agreement shall be subject to termination by Endo, at any time, upon a specific timeframe of prior written notice to the Company and under certain other conditions by either party as specified in the Endo Agreement. The remaining milestone payments are expected to be recognized as revenue as they are achieved, except that one milestone is contingently refundable for a period of time. Revenue related to such contingently refundable milestone is expected to be recognized as refund provisions, as described in the Endo Agreement, expire. Sale threshold payments and sales-based royalties will be recognized as they accrue under the terms of the Endo Agreement. The Company is reimbursed by Endo for certain contractor costs when these costs go beyond set thresholds as outlined in the Endo Agreement. Endo reimburses the Company for this spending at cost and the Company receives no mark-up or profit. The gross amount of these reimbursed research and development costs are reported as research and development reimbursement revenue in the accompanying consolidated statements of operations. The Company acts as a principal, has discretion to choose suppliers, bears credit risk and may perform part of the services required in the transactions. Therefore, these reimbursements are treated as revenue to the Company. The actual expenses creating the reimbursements are reflected as research and development expense. Beginning in March 2014, total reimbursable contractor costs exceeded a set threshold, at which point all such expenses are to be borne at a rate of 50% by Endo and 50% by the Company. Endo has continued to reimburse the Company for 100% of such costs, with 50% thereof to be taken by Endo as a credit against potential future milestones associated with achievement of certain regulatory events. As of September 30, 2015, the Company has recorded approximately $6 million of such cumulative payment in deferred revenue current in the accompanying condensed consolidated balance sheet. It is anticipated that such credit amount will be deducted from the $50 million regulatory approval milestone earned by the Company in October 2015 (see below and note 11). During the nine months ended September 30, 2015 and September 30, 2014, the Company recognized $0.9 million and $12.1 million, respectively, of reimbursable expenses related to the Endo Agreement, which is recorded as research and development reimbursement revenue on the accompanying condensed consolidated statement of operations. During the three months ended September 30, 2015 and September 30, 2014, the Company recognized $0.06 million and $1.3 million, respectively, of reimbursable expenses related to its Endo agreement, which is recorded as research and development reimbursement revenue on the accompanying condensed consolidated statement of operations. On December 23, 2014, the Company and Endo announced the submission of a NDA for BELBUCA ™ ™ ™

License Obligations

License Obligations	9 Months Ended
	Sep. 30, 2015
Text Block [Abstract]
License Obligations	7. License Obligations: Arcion License Agreement On March 26, 2013, the Company entered into a license agreement with Arcion Therapeutics, Inc. (the “Arcion Agreement”) pursuant to which Arcion granted to the Company an exclusive commercial world-wide license, with rights of sublicense, under certain patent and other intellectual property rights related to in-process research and development to develop, manufacture, market, and sell gel products containing clonidine (or a derivative thereof) for the treatment of painful diabetic neuropathy (“PDN”) and other indications (the “Arcion Products”). Pursuant to the Arcion Agreement, the Company is responsible for using commercially reasonable efforts to develop and commercialize Arcion Products, including the use of such efforts to conduct certain clinical trials within certain time frames. The Company is required to make the following payments to Arcion: • $2.5 million upon filing and acceptance by the FDA of an NDA with respect to an Arcion Product, which will be payable, at the Company’s option, in cash or unregistered shares of Common Stock (with such shares being subject to a nine month lock-up and certain limitations on sale thereafter); and • up to a potential $60 million in cash payments upon achieving certain pre-determined sales thresholds in the U.S., none of which occur prior to achieving at least $200 million in U.S. net sales. In addition, the Company shall pay Arcion $35 million in cash on initial FDA approval of an Arcion Product, unless: (i) the Company does not receive at least $70 million in FDA approval-related milestone payments from its US sublicensees (if any sublicenses are involved) with respect to the Arcion Product, in which case the Company shall pay Arcion a prorated amount between $17.5 million and $35 million based on the total amount of such milestone payments received by the Company and its affiliates from its sublicenses (if any sublicenses are involved); or (ii) the FDA requires or recommends the performance of a capsaicin challenge test (to see if C-fiber function is present in the skin by determining if subjects experience pain, and to determine pain intensity if present) as a precondition or precursor to the prescribing of the Arcion Product (as a condition of approval, a labeling requirement, or otherwise), in which case such milestone shall be reduced to $17.5 million, but the first and second sales threshold payments (as part of the $60 million in cash payments ) described above shall each be increased by $8 million. All milestone payments due to Arcion under the Arcion Agreement are payable only once each. In addition to the milestones set forth above, the Company will pay royalties to Arcion based upon sales of Arcion Products by the Company, its affiliate and sub-licensees (if any), all as defined in the Arcion Agreement. In addition, in the event the amount due upon FDA approval of the Arcion Product in the U.S. is less than $35 million for any reason other than an FDA requirement or recommendation of a capsaicin challenge test, as described above, the Company shall pay Arcion a portion of any milestone payments received by the Company and its affiliates from their sublicensees on the basis of any events occurring in the U.S. following FDA approval but prior to (and including) first commercial sale of an Arcion Product in the U.S., and certain of the payments to Arcion referred to above shall also be subject to upward adjustment (with such upward adjustments payable in the form of cash or unregistered shares of the Company’s Common Stock, as elected solely by the Company), until such time as the sum of all such additional payments and upward adjustments (including the value of any issuances of stock, if elected by the Company) and the initial amount paid on the initial FDA approval totals $35 million. The term of the Arcion Agreement continues, on a country-by-country and product-by-product basis, until the earlier of (i) the expiration of the royalty term for a particular Arcion Product in a particular country or (ii) the effective date of termination by either party pursuant to customary termination provisions. The royalty term for any given country is the later of (i) the first date there are no valid claims against any Arcion patent, (ii) expiration of patent exclusivity or (iii) tenth anniversary of the first commercial sale. On March 30, 2015, the Company announced that the primary efficacy endpoint in its initial Phase 3 clinical study of Clonidine Topical Gel compared to placebo for the treatment of PDN did not meet statistical significance. Analyses of the trial results indicated significant differences in patient response between centers and among patient subpopulations. Based on review of these analyses with statistical and clinical consultants, the Company has elected to initiate an additional placebo-controlled study with entry criteria and design features that attempt to control for the challenges of assay sensitivity and accuracy of pain assessment in diabetic patients with neuropathic pain. The additional study is planned to start in fourth quarter of 2015. During the first half of 2016, the Company will be discussing the design of this study with the European Medicines Agency to assess its adequacy as the single study required for EU submission. Evonik Development and Exclusive License Option Agreement: On October 27, 2014, the Company entered into a definitive Development and Exclusive License Option Agreement (the “Development Agreement”) with Evonik Corporation, (“Evonik”) to develop and commercialize an injectable, extended release, microparticle formulation of buprenorphine for the treatment of opioid dependence (the “Evonik Product”). Under the Development Agreement, the Company also has the right to pursue development of the Evonik Product for pain management. Under the Development Agreement, Evonik has also granted to the Company two exclusive options to acquire exclusive worldwide licenses, with rights of sublicense, to certain patents and other intellectual property rights of Evonik to develop and commercialize certain products containing buprenorphine. If such options are exercised, such licenses would be memorialized in the Evonik License Agreement (as defined below). Pursuant to the Development Agreement, Evonik is responsible for using commercially reasonable efforts to develop a formulation for the Evonik Product in accordance with a work plan mutually agreed upon by the parties (the “Evonik Project”). Should the Evonik Project proceed past the formulation stage, Evonik also has the right to manufacture clinical and commercial supplies of Evonik Product, such manufacturing arrangement to be negotiated by the parties in good faith in a formal License and Supply Agreement(s) (the “Evonik License Agreement”), with such Evonik License Agreement covering Evonik’s intellectual property rights to be entered into between the parties if certain conditions are met and terms are mutually agreed upon. Should Evonik and the Company enter into the License Agreement following the attainment of a Phase 1 ready formulation of the Evonik Product for one or both of the opioid dependence or pain management indications, the Company would pay Evonik a non-refundable, non-creditable one-time payment in conjunction with certain future regulatory filings and approvals and royalties on net sales of the Evonik Product. The Development Agreement contains customary termination provisions, and the Company may additionally terminate the Development Agreement at any time after the completion of certain enumerated tasks as provided in the Development Agreement, for any reason or no reason, by providing written notice of termination to Evonik. Upon termination of the Development Agreement, Evonik will be paid any amounts owed to Evonik in accordance with the estimated budget for work performed under the Development Agreement through the effective date of termination, including any reasonable, documented, non-cancelable third party costs and any reasonable, documented wind-down costs reasonably incurred by Evonik in connection with the Evonik Project. Should the Company terminate for reasons other than for a material, uncured breach by Evonik or Evonik’s bankruptcy, Evonik shall have the right to use any and all data and intellectual property generated under the Evonik Project for any purpose.

Note Payable

Note Payable	9 Months Ended
	Sep. 30, 2015
Debt Disclosure [Abstract]
Note Payable	8. Note Payable: On May 29, 2015, the Company entered into a $30 million secured loan facility (the “Loan”) with MidCap Financial Trust, as agent and lender (“MidCap”), pursuant to the terms and conditions of that certain Amended and Restated Credit and Security Agreement, dated as of May 29, 2015 (the “Credit Agreement”), between the Company and MidCap. The Credit Agreement is a restatement, amendment and modification of a prior Credit and Security Agreement, dated as of July 5, 2013 (the “Prior Agreement”) between the Company, MidCap Financial SBIC, LLP, a predecessor to MidCap, and certain lenders thereto. The Credit Agreement restructures, renews, extends and modifies the obligations under the Prior Agreement and the other financing documents executed in connection with the Prior Agreement (the “Prior Loan”). The Company received net Loan proceeds in the aggregate amount of approximately $20.1 million and will use the Loan proceeds for general corporate purposes or other activities of the Company permitted under the Credit Agreement. The Loan has a term of 42 months, with interest only payments for the first 12 months. The interest rate is 8.45% plus a LIBOR floor of 0.5% (total of 8.95% at September 30, 2015), with straight line amortization of principal payments commencing on June 1, 2016, in an amount equal to $1 million per month. Upon execution of the Credit Agreement, the Company paid to MidCap a closing fee from the prior loan of approximately $0.4 million. Upon repayment in full of the Loan, the Company is obligated to make a final payment fee equal to 2.75% of the aggregate Loan amount. The 2.75% exit fee has been recorded as deferred loan costs, the current portion of which is included in prepaid expenses and other current assets and the long-term portion in other assets and is being amortized over the life of the loan. The amounts payable are recorded as other long-term liabilities. In addition, the Company may prepay all or any portion of the Loan at any time subject to a prepayment premium of: (i) 5% of the Loan amount prepaid in the first year following the execution of the Credit Agreement and (ii) 3% of the Loan amount prepaid in each year thereafter. The obligations of the Company under the Credit Agreement are secured by a first priority lien in favor of MidCap on substantially all of the Company’s existing and after-acquired assets, but excluding certain intellectual property and general intangible assets of the Company (but not any proceeds thereof). The obligations of the Company under the Credit Agreement are also secured by a first priority lien on the equity interests held by the Company. The Company entered into and reaffirmed, as applicable, customary pledge and intellectual property security agreements to evidence the security interest in favor of MidCap. Under the Credit Agreement, the Company is subject to affirmative covenants which are customary for financings of this type, including, but not limited to, the obligations of the Company to: (i) maintain good standing and governmental authorizations, (ii) provide certain information and notices to MidCap, (iii) deliver quarterly and annual financial statements to MidCap, (iv) maintain insurance, property and books and records, (v) discharge all taxes, (vi) protect their intellectual property and (vii) generally protect the collateral granted to MidCap. The Company is also subject to negative covenants customary for financings of this type, including, but not limited to, that they may not: (i) enter into a merger or consolidation or certain change of control events without complying with the terms of the Credit Agreement, (ii) incur liens on the collateral, (iii) incur additional indebtedness, (iv) dispose of any property, (v) amend material agreements or organizational documents, (vi) change their business, jurisdictions of organization or their organizational structures or types, (vii) declare or pay dividends (other than dividends payable solely in Common Stock), (viii) make certain investments or acquisitions except under certain circumstances as set forth in the Credit Agreement, or (ix) enter into certain transactions with affiliates, in each case subject to certain exceptions provided for in the Credit Agreement. Notwithstanding the foregoing, the Credit Agreement amends certain negative covenants contained in the Prior Agreement such that (i) licensing and acquisitions are added as permitted business activities of the Company and (ii) the Company is no longer required to obtain the prior written consent of MidCap for any in-licensing, product or entity acquisitions by the Company by way of merger or consolidation, so long as no event of default has occurred and certain financial metrics are adhered to. The Credit Agreement provides for several events of default under the Loan. Upon the occurrence of any event of default, the Company’s obligations under the Credit Agreement will bear interest at a rate equal to the lesser of: (i) 4% above the rate of interest applicable to such obligations immediately prior to the occurrence of the event of default and (ii) the maximum rate allowable under law. The balance of the Loan as of September 30, 2015 is $29.7 million, and is recorded in the accompanying condensed consolidated balance sheet, net of unamortized discount of $0.3 million.

Stockholders' Equity

Stockholders' Equity	9 Months Ended
	Sep. 30, 2015
Equity [Abstract]
Stockholders' Equity	9. Stockholders’ Equity: Stock-based compensation During the nine months ended September 30, 2015, a total of 480,818 options to purchase Common Stock, with an aggregate fair market value of approximately $2.8 million, were granted to Company employees and contractors. The options granted have a term of 10 years from the grant date and vest ratably over a three year period. The fair value of each option is amortized as compensation expense evenly through the vesting period. The Company’s stock-based compensation expense is allocated between research and development and selling, general and administrative as follows: Three months ended, Nine months ended, Stock-based compensation expense September 30, September 30, September 30, September 30, 2014 Research and Development $1.1 $ - $3.1 $ - Selling, General and Administrative $3.9 $2.4 $9.6 $4.9 The fair value of each option award is estimated on the grant date using the Black-Scholes valuation model that uses assumptions for expected volatility, expected dividends, expected term, and the risk-free interest rate. Expected volatilities are based on implied volatilities from historical volatility of the Common Stock, and other factors estimated over the expected term of the options. The expected term of options granted is derived using the “simplified method” which computes expected term as the average of the sum of the vesting term plus contract term. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for the period of the expected term. The weighted average for key assumptions used in determining the fair value of options granted during the nine months ended September 30, 2015 follows: Expected price volatility 72.81% -73.32% Risk-free interest rate 1.43% Weighted average expected life in years 6 years Dividend yield — Option activity during the nine months ended September 30, 2015 was as follows: Number of Weighted Aggregate Outstanding at January 1, 2015 3,196,100 $ 4.32 Granted 480,818 9.28 Exercised (160,050 ) 3.46 Forfeitures (194,490 ) 12.94 Outstanding at September 30, 2015 3,322,378 $ 5.47 $ 4,628 As of September 30, 2015, options exercisable totaled 2,537,534. There was approximately $34 million of unrecognized compensation cost related to non-vested share-based compensation awards, including options and restricted stock units (“RSUs”) granted. These costs will be expensed through 2018. Warrants The Company has granted warrants to purchase shares of Common Stock. Warrants may be granted to affiliates in connection with certain agreements. During the nine months ended September 30, 2015, the remaining 284 outstanding warrants were exercised at a price of $3.12 per share. Earnings Per Share During the nine months ended September 30, 2015 and 2014, outstanding stock options, RSUs, warrants and convertible preferred stock of 9,743,687 and 8,896,955, respectively, were not included in the computation of diluted earnings per share, because to do so would have had an antidilutive effect. Recovery of Stockholder Short Swing Profit In February 2015, an executive officer of the Company paid a total of approximately $0.006 million to the Company, representing the disgorgement of short swing profits under Section 16(b) under the Exchange Act. The amount was recorded as additional paid-in capital. Restricted Stock Units During the three and nine months ended September 30, 2015, 319,296 and 2,421,911 RSUs, respectively, were granted to members of the Company’s executive officers, board of directors and employees, with a fair market value of approximately $2.8 million and $32.8 million, respectively. The fair value of restricted units is determined using quoted market prices of the Common Stock and the number of shares expected to vest. These RSUs were issued under the Company’s 2011 Equity Incentive Plan, as amended, and vest in equal installments over three years for executive officers and employees, and vest half now and half in the following year for the board of directors. Restricted stock activity during the nine months ended September 30, 2015 was as follows: Number of Weighted Outstanding at January 1, 2015 2,849,076 $ 6.08 Granted: Executive officers 2,102,615 14.63 Directors 150,000 9.31 Employees 169,296 8.03 Vested (857,677) 13.06 Forfeitures (85,156) 12.29 Outstanding at September 30, 2015 4,328,154 $ 10.09

Commitments and Contingencies

Commitments and Contingencies	9 Months Ended
	Sep. 30, 2015
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	10. Commitments and contingencies: Litigation Related To ONSOLIS ® In March 2012, the Company announced that the New Jersey Federal Court granted a stay of further litigation in the patent infringement lawsuit previously filed by MonoSol Rx, LLC (“MonoSol”) against the Company and its ONSOLIS ® ® Based on the Company’s original assertion that its proprietary manufacturing process for ONSOLIS ® Given the outcomes of the ‘292, ‘891 and ‘588 reexamination proceedings, at a January 22, 2015 status meeting, the Court decided to lift the stay and grant the Company’s request for the case to proceed on an expedited basis with a Motion for Summary Judgment to dismiss the action. On September 25, 2015, the Honorable Freda L. Wolfson granted the Company’s motion for summary judgment and ordered the case closed. The Company was found to be entitled to absolute intervening rights as to both patents in suit, the ‘292 and ‘891 patents and the Company’s ONSOLIS ® ® ® ® ™ Litigation Related To BUNAVAIL ® On October 29, 2013, Reckitt Benckiser, Inc. RB Pharmaceuticals Limited, and MonoSol RX, LLC (collectively, the “RB Plaintiffs”) filed an action against the Company relating to the Company’s BUNAVAIL ® ® ® On September 20, 2014, based upon the Company’s position and belief that its BUNAVAIL ® ® On September 22, 2014, the RB Plaintiffs filed an action against the Company (and the Company’s commercial partner) relating to its BUNAVAIL ® product in the United States District Court for the District of New Jersey for alleged patent infringement. The RB Plaintiffs claim that BUNAVAIL ® , whose formulation and manufacturing processes have never been disclosed publicly, infringes its patent U.S. Patent No. 8,765,167 (‘167 Patent). As with prior actions by the RB Plaintiffs, the Company believes this is another anticompetitive attempt by the RB Plaintiffs to distract the Company’s efforts from commercializing BUNAVAIL ® . The Company strongly refutes as without merit the RB Plaintiffs’ assertion of patent infringement and will vigorously defend the lawsuit. On December 12, 2014, the Company filed motions to transfer the case from New Jersey to North Carolina and to dismiss the case against the Company’s commercial partner. The Court issued an opinion on July 21, 2015 granting the Company’s motion to transfer the venue to the Eastern District of North Carolina (EDNC), but denying the Company’s motion to dismiss in its entirety as moot. The Company will continue to vigorously defend this case in the EDNC. In a related matter, on October 28, 2014, the Company filed multiple IPR requests on the ’167 Patent demonstrating that certain claims of such patent were anticipated by or obvious in light of prior art references, including prior art references not previously considered by the USPTO, and thus, invalid. The USPTO instituted three of the four IPR requests and the Company filed a request for rehearing for the non-instituted IPR. A final decision on the instituted ‘167 IPRs is expected in May 2016. On January 22, 2014, MonoSol filed a Petition for IPR on US Patent No. 7,579,019 (the ‘019 Patent). The Petition asserted that the claims of the ‘019 Patent are alleged to be unpatentable over certain prior art references. The IPR was instituted on August 6, 2014. An oral hearing was held in April 2015 and a decision upholding all seven claims was issued August 5, 2015. In September 2015, MonoSol requested that the USPTO rehear the IPR. The Company will continue to vigorously defend its ‘019 patent. The Company expects the USPTO to issue a decision in the fourth quarter of 2015.

Subsequent Events

Subsequent Events	9 Months Ended
	Sep. 30, 2015
Subsequent Events [Abstract]
Subsequent Events	11. Subsequent events: On October 26, 2015, the Company and Endo announced that the FDA approved BELBUCA ™ ™

Organization, Basis of Presen18

Organization, Basis of Presentation and Summary of Significant Policies (Policies)	9 Months Ended
	Sep. 30, 2015
Accounting Policies [Abstract]
Overview	Overview BioDelivery Sciences International Inc., together with its subsidiaries (collectively, the “Company” or “BDSI”) is a specialty pharmaceutical company that is leveraging its novel and proprietary patented drug delivery technologies to develop and commercialize, either on its own or in partnerships with third parties, new applications of proven therapeutics. The Company is focusing on developing products to meet unmet patient needs in the areas of pain management and addiction. The accompanying unaudited condensed consolidated financial statements include all adjustments (consisting of normal and recurring adjustments) necessary for a fair presentation of these financial statements. The condensed consolidated balance sheet at December 31, 2014 has been derived from the Company’s audited consolidated financial statements included in its annual report on Form 10-K for the year ended December 31, 2014. Certain footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted pursuant to the Securities and Exchange Commission (“SEC”) rules and regulations. It is suggested that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2014. Operating results for the three and nine month period ended September 30, 2015 are not necessarily indicative of results for the full year or any other future periods. As used herein, the Company’s common stock, par value $.001 per share, is referred to as the “Common Stock.”
Use of estimates in financial statements	Use of estimates in financial statements The preparation of the accompanying condensed consolidated financial statements requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and assumptions.
Inventory	Inventory Inventories are stated at the lower of cost or market value with costs determined on the first-in, first-out method. Inventory consists of raw materials, work in process and finished goods. Raw materials include active pharmaceutical ingredient for a product to be manufactured, work in process includes the bulk inventory of laminate prior to being packaged for sale, and finished goods include pharmaceutical products ready for commercial sale. On a quarterly basis, the Company analyzes its inventory levels and records allowances for inventory that has become obsolete, inventory that has a cost basis in excess of the expected net realizable value and inventory that is in excess of expected demand based upon projected product sales. There were no allowances recorded at September 30, 2015.
Deferred revenue	Deferred revenue Consistent with the Company’s revenue recognition policy, deferred revenue represents cash received in advance for licensing fees, consulting, research and development services, related supply agreements and product sales. Such payments are reflected as deferred revenue until recognized under the Company’s revenue recognition policy. Deferred revenue is classified as current if management believes the Company will be able to recognize the deferred amount as revenue within twelve months of the balance sheet date.
Revenue recognition	Revenue recognition Product Sales ® As of September 30, 2015 and December 31, 2014, the Company had $1.2 million and $0.8 million of deferred revenue related to sales of BUNAVAIL ® to wholesalers for which future returns could not be reasonably estimated at the time of sale. Deferred revenue is recognized when the product is sold to the end user, based upon prescriptions filled. To estimate product sold to end users, the Company relies on third-party information, including prescription data and information obtained from significant distributors with respect to their inventory levels and sales to customers. Deferred revenue is recorded net of estimated allowances for rebates, price adjustments, chargebacks, prompt payment and other discounts. Estimated allowances are included in accounts payable and accrued liabilities in the accompanying balance sheets as of September 30, 2015 and December 31, 2014 (Note 4). Product Returns ® to estimate its returns at time of ex-factory sales. When the Company cannot reasonably estimate the amount of future product returns, it records revenues when the risk of product return has been substantially eliminated which is at the time the product is sold to the end user. Rebates- Price Adjustments and Chargebacks The Company, from time to time, offers certain promotional product-related incentives to its customers. These programs include certain product incentives to pharmacy customers and other sales stocking allowances. The Company has voucher programs for BUNAVAIL ® whereby the Company offers a point-of-sale subsidy to retail consumers. The Company estimates its liabilities for these voucher programs based on the historical redemption rates for similar completed programs used by other pharmaceutical companies as reported to the Company by a third-party claims processing organization and actual redemption rates for the Company’s completed programs. The Company accounts for the costs of these special promotional programs as price adjustments, which are a reduction of gross revenue. Prompt Payment Discounts
Deferred Cost of Sales	Deferred Cost of Sales The Company defers its cost of sales in connection with BUNAVAIL ® sales at time of ex-factory sales. These costs are recognized when the product is sold to the end user. The Company had $1.1 million and $0.7 million of deferred costs of sales at September 30, 2015 and December 31, 2014, respectively, which are included in prepaid expenses and other current assets in the accompanying condensed consolidated balance sheets.
Cost of Sales	Cost of Sales The cost of sales attributable to the production of BUNAVAIL ® includes raw materials, production costs at our two contract manufacturing sites, quality testing directly related to the product, and depreciation on equipment that we have purchased to produce BUNAVAIL ® . It also includes any batches not meeting specifications and raw material yield loss. Yield losses and batches not meeting specifications are expensed as incurred. Cost of sales is recognized as actual product is sold through to the end user. During the three and nine months ended September 30, 2015, the Company wrote down $0.3 million and $0.8 million, respectively, of inventory to lower of cost or market, which is recorded as cost of sales in the accompanying condensed consolidated statement of operations. No such adjustments were made during the comparable periods in 2014. The cost of sales attributable to the production of ONSOLIS ® and BREAKYL™ includes all costs related to creating the product at the Company’s contract manufacturing locations in the U.S. and Germany. The Company’s contract manufacturers bill the Company for the final product, which includes materials, direct labor costs, and certain overhead costs as outlined in applicable supply agreements. Cost of sales also includes royalty expenses that the Company owes to third parties.
Recent accounting pronouncements	Recent accounting pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2014-09, “Revenue from Contracts with Customers,” which supersedes the revenue recognition requirements of Accounting Standards Codification (“ASC”) Topic 605, “Revenue Recognition” and most industry-specific guidance on revenue recognition throughout the ASC. The new standard is principles-based and provides a five step model to determine when and how revenue is recognized. The core principle of the new standard is that revenue should be recognized when a company transfers promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The new standard also requires disclosure of qualitative and quantitative information surrounding the amount, nature, timing and uncertainty of revenues and cash flows arising from contracts with customers. In July 2015, the FASB agreed to defer the effective date of the standard from January 1, 2017 to January 1, 2018, with an option that permits companies to adopt the standard as early as the original effective date. Early application prior to the original effective date is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting.

Inventory (Tables)

Inventory (Tables)	9 Months Ended
	Sep. 30, 2015
Inventory Disclosure [Abstract]
Summary of Inventories	The following table represents the components of inventory as of: September 30, December 31, Raw materials & supplies $ 489 $ 544 Work-in-process 1,239 523 Finished goods 159 761 Total inventories $ 1,887 $ 1,828

Accounts Payable and Accrued 20

Accounts Payable and Accrued Liabilities (Tables)	9 Months Ended
	Sep. 30, 2015
Payables and Accruals [Abstract]
Summary of Components of Accounts Payable and Accrued Liabilities	The following table represents the components of accounts payable and accrued liabilities as of: September 30, December 31, Accounts payable $ 8,247 $ 9,072 Accrued price adjustments 1,662 1,094 Accrued rebates 838 231 Accrued chargebacks 47 14 Accrued compensation and benefits 1,691 945 Accrued royalties 414 770 Accrued other 2,074 2,303 Total accounts payable and accrued expenses $ 14,973 $ 14,429

Property and Equipment (Tables)

Property and Equipment (Tables)	9 Months Ended
	Sep. 30, 2015
Property, Plant and Equipment [Abstract]
Summarized Category of Fixed Assets	Property and equipment, summarized by major category, consist of the following as of: September 30, December 31, Idle equipment $ 4,971 $ 4,432 Machinery & equipment 580 680 Computer equipment & software 395 344 Office furniture & equipment 194 110 Leasehold improvements 53 9 Total 6,193 5,575 Less accumulated depreciation (1,932) (1,685 ) Total property, plant & equipment, net $ 4,261 $ 3,890

Stockholders' Equity (Tables)

Stockholders' Equity (Tables)	9 Months Ended
	Sep. 30, 2015
Equity [Abstract]
Summary of Allocated Stock-based Compensation Expense	The Company’s stock-based compensation expense is allocated between research and development and selling, general and administrative as follows: Three months ended, Nine months ended, Stock-based compensation expense September 30, September 30, September 30, September 30, 2014 Research and Development $1.1 $ - $3.1 $ - Selling, General and Administrative $3.9 $2.4 $9.6 $4.9
Weighted Average for Key Assumptions Used in Determining Fair Value of Options Granted	The weighted average for key assumptions used in determining the fair value of options granted during the nine months ended September 30, 2015 follows: Expected price volatility 72.81% -73.32% Risk-free interest rate 1.43% Weighted average expected life in years 6 years Dividend yield —
Summary of Option Activity	Option activity during the nine months ended September 30, 2015 was as follows: Number of Weighted Aggregate Outstanding at January 1, 2015 3,196,100 $ 4.32 Granted 480,818 9.28 Exercised (160,050 ) 3.46 Forfeitures (194,490 ) 12.94 Outstanding at September 30, 2015 3,322,378 $ 5.47 $ 4,628
Summary of Restricted Stock Activity	Restricted stock activity during the nine months ended September 30, 2015 was as follows: Number of Weighted Outstanding at January 1, 2015 2,849,076 $ 6.08 Granted: Executive officers 2,102,615 14.63 Directors 150,000 9.31 Employees 169,296 8.03 Vested (857,677) 13.06 Forfeitures (85,156) 12.29 Outstanding at September 30, 2015 4,328,154 $ 10.09

Organization and Basis of Prese

Organization and Basis of Presentation - Additional Information (Detail)	3 Months Ended	9 Months Ended
	Sep. 30, 2015USD ($)$ / shares	Sep. 30, 2015USD ($)Productsite$ / shares	Dec. 31, 2014USD ($)$ / shares	Sep. 30, 2014USD ($)
Basis Of Presentation [Line Items]
Common Stock, par value | $ / shares	$ 0.001	$ 0.001	$ 0.001
Inventory allowances recorded	$ 0	$ 0
Number of products | Product		1
Sales return maximum duration		18 months
Offered period for sales return prior to expiration		6 months
Offered period for sales return subsequent to expiration		12 months
Discount for prompt payment	2.00%	2.00%
Inventory write down	$ 300,000	$ 800,000
Number of contract manufacturing sites | site		2
Inventory valuation adjustments				$ 0
Bunavail [Member]
Basis Of Presentation [Line Items]
Deferred revenue related to sales	1,200,000	$ 1,200,000	$ 800,000
Deferred cost of sales	$ 1,100,000	$ 1,100,000	$ 700,000
Minimum [Member]
Basis Of Presentation [Line Items]
Period of payments from customers		30 days
Maximum [Member]
Basis Of Presentation [Line Items]
Period of payments from customers		37 days

Liquidity and Management's Pl24

Liquidity and Management's Plans - Additional Information (Detail) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014	Dec. 31, 2013
Liquidity And Managements Plans [Abstract]
Cash and cash equivalents	$ 54,429	$ 85,794	$ 70,472	$ 23,176
Cash from operations	(32,717)	$ (10,799)
Stockholders' equity	19,702		$ 54,396
Potential milestone payment receivable upon regulatory approval	50,000
Deferred revenue recognized during the period	$ 6,000

Inventory - Summary of Inventor

Inventory - Summary of Inventories (Detail) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Inventory Disclosure [Abstract]
Raw materials & supplies	$ 489	$ 544
Work-in-process	1,239	523
Finished goods	159	761
Total inventories	$ 1,887	$ 1,828

Accounts Payable and Accrued 26

Accounts Payable and Accrued Liabilities - Summary of Components of Accounts Payable and Accrued Liabilities (Detail) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Payables and Accruals [Abstract]
Accounts payable	$ 8,247	$ 9,072
Accrued price adjustments	1,662	1,094
Accrued rebates	838	231
Accrued chargebacks	47	14
Accrued compensation and benefits	1,691	945
Accrued royalties	414	770
Accrued other	2,074	2,303
Total accounts payable and accrued expenses	$ 14,973	$ 14,429

Property and Equipment - Summar

Property and Equipment - Summarized Category of Fixed Assets (Detail) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Property, Plant and Equipment [Line Items]
Property, plant & equipment, gross	$ 6,193	$ 5,575
Less accumulated depreciation	(1,932)	(1,685)
Total property, plant & equipment, net	4,261	3,890
Idle Equipment [Member]
Property, Plant and Equipment [Line Items]
Property, plant & equipment, gross	4,971	4,432
Machinery and Equipment [Member]
Property, Plant and Equipment [Line Items]
Property, plant & equipment, gross	580	680
Computer Equipment and Software [Member]
Property, Plant and Equipment [Line Items]
Property, plant & equipment, gross	395	344
Office Furniture and Equipment [Member]
Property, Plant and Equipment [Line Items]
Property, plant & equipment, gross	194	110
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Property, plant & equipment, gross	$ 53	$ 9

Property and Equipment - Additi

Property and Equipment - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Property, Plant and Equipment [Abstract]
Depreciation	$ 80	$ 30	$ 248	$ 55

License and Development Agree29

License and Development Agreements - Meda License, Development and Supply Agreements - Additional Information (Detail) - USD ($)	1 Months Ended	3 Months Ended		9 Months Ended
	Oct. 31, 2009	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Revenue Recognition, Milestone Method [Line Items]
Patent expiration year				2,020
Contract revenues			$ 513,000	$ 11,759,000	$ 22,472,000
U.S. [Member]
Revenue Recognition, Milestone Method [Line Items]
Aggregate milestones and services revenue recognized	$ 59,700,000
Contract revenues			$ 200,000		$ 50,000
U.S. [Member] | Milestones [Member]
Revenue Recognition, Milestone Method [Line Items]
Contract revenues		$ 0		$ 1,000,000

License and Development Agree30

License and Development Agreements - Endo License and Development Agreement - Additional Information (Detail)	Oct. 26, 2015USD ($)	Feb. 28, 2015USD ($)	May. 31, 2012USD ($)	Sep. 30, 2015USD ($)	Sep. 30, 2014USD ($)	Sep. 30, 2015USD ($)MilestoneClinical_Trials	Sep. 30, 2014USD ($)	Jun. 30, 2014USD ($)	Jan. 31, 2014USD ($)	Jan. 31, 2012USD ($)
Revenue Recognition, Milestone Method [Line Items]
Non-refundable payment received										$ 30,000,000
Potential milestone payments on intellectual property rights			$ 15,000,000
Potential payments upon filing and acceptance		$ 10,000,000
Potential milestone payment receivable upon regulatory approval						$ 50,000,000
Payment receivable on achievement of potential sales milestones				$ 55,000,000		$ 55,000,000
Number of potential sales milestones | Milestone						4
Recognized up-front payment allocated to the license						$ 15,600,000
Recognized up-front payment to clinical trial material and development services						14,400,000
Upfront payment						30,000,000
Contract revenues					$ 513,000	$ 11,759,000	$ 22,472,000
Term of Endo Agreement						10 years
Total rate of reimbursable contractor costs borne						50.00%
Deferred revenue recognized during the period				6,000,000		$ 6,000,000
Deferred revenue from research and development activities				55,000	1,298,000	909,000	12,067,000
Subsequent Event [Member]
Revenue Recognition, Milestone Method [Line Items]
Potential milestone payment receivable upon regulatory approval	$ 50,000,000
Endo Agreement [Member]
Revenue Recognition, Milestone Method [Line Items]
Contract revenues				0	500,000	$ 400,000	2,300,000
Total rate of reimbursable contractor costs borne						50.00%
Reimbursement rate of costs by Endo to the company as per agreement						100.00%
Percentage of credit against potential future milestones						50.00%
Deferred revenue from research and development activities				60,000	$ 1,300,000	$ 900,000	$ 12,100,000
Clinical Trials Full Enrollment [Member]
Revenue Recognition, Milestone Method [Line Items]
Potential milestone payment received, clinical development				$ 20,000,000		$ 20,000,000
Number of clinical trials | Clinical_Trials						2
Clinical Trials One [Member]
Revenue Recognition, Milestone Method [Line Items]
Potential milestone payment received, clinical development									$ 10,000,000
Clinical Trials Two [Member]
Revenue Recognition, Milestone Method [Line Items]
Potential milestone payment received, clinical development								$ 10,000,000

License Obligations - Arcion Li

License Obligations - Arcion License Agreement - Additional Information (Detail) - USD ($)	1 Months Ended	9 Months Ended
	Feb. 28, 2015	Sep. 30, 2015
Research and Development Arrangement, Contract to Perform for Others [Line Items]
Potential payments upon filing and acceptance	$ 10,000,000
Increase in milestone payments		$ 8,000,000
U.S. [Member]
Research and Development Arrangement, Contract to Perform for Others [Line Items]
Potential Payments upon achieving certain pre-determined sales thresholds in the U.S		60,000,000
U.S. [Member] | Minimum [Member]
Research and Development Arrangement, Contract to Perform for Others [Line Items]
Milestone Sales		200,000,000
Milestone payments receivable from sublicenses		70,000,000
Arcion Agreement [Member]
Research and Development Arrangement, Contract to Perform for Others [Line Items]
Potential payments upon filing and acceptance		$ 2,500,000
Royalty term description		The royalty term for any given country is the later of (i) the first date there are no valid claims against any Arcion patent, (ii) expiration of patent exclusivity or (iii) tenth anniversary of the first commercial sale.
Arcion Agreement [Member] | Minimum [Member]
Research and Development Arrangement, Contract to Perform for Others [Line Items]
Potential milestone payments upon FDA approval		$ 17,500,000
Arcion Agreement [Member] | Maximum [Member]
Research and Development Arrangement, Contract to Perform for Others [Line Items]
Potential milestone payments upon FDA approval		$ 35,000,000

License Obligations - Evonik De

License Obligations - Evonik Development and Exclusive License Option Agreement - Additional Information (Detail)	9 Months Ended
	Sep. 30, 2015Agreement
Definitive Development and Exclusive License Option Agreement[Member]
Research and Development Arrangement, Contract to Perform for Others [Line Items]
Number of license agreements granted	2

Note Payable - Additional Infor

Note Payable - Additional Information (Detail) - Secured Loan Facility [Member] - USD ($) $ in Millions	May. 29, 2015	Sep. 30, 2015
Debt Instrument [Line Items]
Term of loan		42 months
Interest rate		8.45%
LIBOR floor rate		0.50%
Principal payment per month		$ 1
Closing fee from the prior loan	$ 0.4
Final payment fee rate		2.75%
Loan amount prepaid in the first year following execution of credit agreement		5.00%
Loan amount prepaid in each year thereafter		3.00%
Interest rate at period end		8.95%
Exit fee percentage recorded as deferred loan costs		2.75%
Mid Cap [Member]
Debt Instrument [Line Items]
Secured loan facility	30
Net proceeds in aggregate amount	$ 20.1
Rate of interest applicable to obligations		4.00%
Secured loan facility due to Midcap		$ 29.7
Unamortized discount net		$ (0.3)

Stockholders' Equity - Addition

Stockholders' Equity - Additional information (Detail) $ / shares in Units, $ in Thousands	1 Months Ended	3 Months Ended	9 Months Ended
	Feb. 28, 2015USD ($)Executives	Sep. 30, 2015USD ($)$ / sharesshares	Sep. 30, 2015USD ($)$ / sharesshares	Sep. 30, 2014shares	Dec. 31, 2014shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Term of options granted period			10 years
Vesting period of shares			3 years
Unrecognized compensation cost related to non-vested share-based compensation awards granted | $		$ 34,000	$ 34,000
Unrecognized compensation cost related to non-vested share-based compensation awards granted year			2,018
Stock option exercisable		2,537,534	2,537,534
Options outstanding		3,322,378	3,322,378		3,196,100
Weighted average exercise price | $ / shares		$ 3.12	$ 3.12
Securities excluded from computation of diluted earnings per share			9,743,687	8,896,955
Number of executive officers from whom swing profits were recovered | Executives	1
Short swing profits recovered | $	$ 6
Fair market value of RSUs granted | $		$ 2,800	$ 32,800
Vesting period of options			3 years
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of equity instruments awarded in period		319,296	2,421,911
Warrant [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options outstanding		284	284
Directors and Employees [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of equity instruments awarded in period			480,818
Fair market value of shares granted | $			$ 2,800

Stockholders' Equity - Summary

Stockholders' Equity - Summary of Allocated Stock-based Compensation Expense (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Research and Development [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	$ 1.1		$ 3.1
Selling, General and Administrative [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	$ 3.9	$ 2.4	$ 9.6	$ 4.9

Stockholders' Equity - Weighted

Stockholders' Equity - Weighted Average for Key Assumptions Used in Determining Fair Value of Options Granted (Detail)	9 Months Ended
	Sep. 30, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free interest rate	1.43%
Weighted average expected life in years	6 years
Dividend yield	0.00%
Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected price volatility	72.81%
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected price volatility	73.32%

Stockholders' Equity - Summar37

Stockholders' Equity - Summary of Option Activity (Detail) $ / shares in Units, $ in Thousands	9 Months Ended
	Sep. 30, 2015USD ($)$ / sharesshares
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Number of Shares, Outstanding at beginning of period | shares	3,196,100
Number of Shares, Granted | shares	480,818
Number of Shares, Exercised | shares	(160,050)
Number of Shares, Forfeitures | shares	(194,490)
Number of Shares, Outstanding at end of period | shares	3,322,378
Weighted Average Exercise Price Per Share, Outstanding at beginning of period	$ 4.32
Weighted Average Exercise Price Per Share, Granted	9.28
Weighted average Exercise Price Per Share, Exercised	3.46
Weighted Average Exercise Price Per Share, Forfeitures	12.94
Weighted Average Exercise Price Per Share, Outstanding at end of period	$ 5.47
Aggregate Intrinsic Value, Outstanding at end of period | $	$ 4,628

Stockholders' Equity - Summar38

Stockholders' Equity - Summary of Restricted Stock Activity (Detail) - Restricted Stock Units (RSUs) [Member] - $ / shares	3 Months Ended	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Restricted Shares, Outstanding at beginning of period		2,849,076
Number of Shares, Granted	319,296	2,421,911
Number of Restricted Shares, Vested		(857,677)
Number of Restricted Shares, Forfeitures		(85,156)
Number of Restricted Shares, Outstanding at end of period	4,328,154	4,328,154
Weighted Average Fair Market Value Per RSU, Outstanding at beginning of period		$ 6.08
Weighted Average Fair Market Value Per RSU, Vested		13.06
Weighted Average Fair Market Value Per RSU, Forfeitures		12.29
Weighted Average Fair Market Value Per RSU, Outstanding at end of period	$ 10.09	$ 10.09
Executive Officer [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Shares, Granted		2,102,615
Weighted Average Fair Market Value Per RSU, Granted		$ 14.63
Director [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Shares, Granted		150,000
Weighted Average Fair Market Value Per RSU, Granted		$ 9.31
Employees [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Shares, Granted		169,296
Weighted Average Fair Market Value Per RSU, Granted		$ 8.03

Commitments and Contingencies -

Commitments and Contingencies - Additional Information (Detail)	1 Months Ended
	Mar. 31, 2012Patents
Commitments and Contingencies Disclosure [Abstract]
Number of Patents under infringement Lawsuit, against the entity rejected by USPTO	3

Subsequent Events - Additional

Subsequent Events - Additional Information (Detail) - USD ($) $ in Millions	Oct. 26, 2015	Sep. 30, 2015
Subsequent Event [Line Items]
Potential milestone payment receivable upon regulatory approval		$ 50
Deferred revenue recognized during the period		$ 6
Subsequent Event [Member]
Subsequent Event [Line Items]
Potential milestone payment receivable upon regulatory approval	$ 50