Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Feb. 01, 2017 | Jun. 30, 2016 | |
Document and Entity Information | |||
Entity Registrant Name | INSMED INC | ||
Entity Central Index Key | 1,104,506 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 603.2 | ||
Entity Common Stock, Shares Outstanding | 62,023,451 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 162,591 | $ 282,876 |
Prepaid expenses and other current assets | 5,816 | 5,242 |
Total current assets | 168,407 | 288,118 |
In-process research and development | 58,200 | 58,200 |
Fixed assets, net | 10,020 | 8,092 |
Other assets | 1,329 | 2,146 |
Total assets | 237,956 | 356,556 |
Current liabilities: | ||
Accounts payable | 10,439 | 7,468 |
Accrued expenses | 16,822 | 10,995 |
Other current liabilities | 728 | 683 |
Current portion of long-term debt | 3,113 | |
Total current liabilities | 27,989 | 22,259 |
Long-term liabilities: | ||
Other long-term liabilities | 693 | 572 |
Debt, long-term | 54,791 | 22,027 |
Total liabilities | 83,473 | 44,858 |
Shareholders' equity: | ||
Common stock, $0.01 par value; 500,000,000 authorized shares, 62,019,889 and 61,813,995 issued and outstanding shares at December 31, 2016 and December 31, 2015, respectively | 620 | 618 |
Additional paid-in capital | 919,164 | 900,043 |
Accumulated deficit | (765,236) | (588,963) |
Accumulated other comprehensive loss | (65) | |
Total shareholders' equity | 154,483 | 311,698 |
Total liabilities and shareholders' equity | $ 237,956 | $ 356,556 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
Consolidated Balance Sheets | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized shares | 500,000,000 | 500,000,000 |
Common stock, issued shares | 62,019,889 | 61,813,995 |
Common stock, outstanding shares | 62,019,889 | 61,813,995 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Operating expenses: | |||
Research and development | $ 122,721 | $ 74,277 | $ 56,292 |
General and administrative | 50,679 | 43,216 | 31,073 |
Total operating expenses | 173,400 | 117,493 | 87,365 |
Operating loss | (173,400) | (117,493) | (87,365) |
Investment income | 604 | 261 | 58 |
Interest expense | (3,498) | (2,889) | (2,415) |
Other income (expense), net | 119 | (33) | 141 |
Loss before income taxes | (176,175) | (120,154) | (89,581) |
Income tax provision (benefit) | 98 | (1,971) | (10,422) |
Net loss | $ (176,273) | $ (118,183) | $ (79,159) |
Basic and diluted net loss per share (in dollars per share) | $ (2.85) | $ (2.02) | $ (1.84) |
Weighted average basic and diluted common shares outstanding (in shares) | 61,892 | 58,633 | 43,095 |
Net loss | $ (176,273) | $ (118,183) | $ (79,159) |
Other comprehensive loss: | |||
Foreign currency translation loss | (65) | ||
Total comprehensive loss | $ (176,338) | $ (118,183) | $ (79,159) |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total |
Balance at Dec. 31, 2013 | $ 391 | $ 534,554 | $ (391,621) | $ 143,324 | |
Balance (in shares) at Dec. 31, 2013 | 39,137,000 | ||||
Comprehensive loss: | |||||
Net loss | (79,159) | (79,159) | |||
Exercise of stock options | $ 3 | 1,728 | $ 1,731 | ||
Exercise of stock options (in shares) | 283,000 | 283,057 | |||
Net proceeds from issuance of common stock | $ 103 | 108,910 | $ 109,013 | ||
Net proceeds from issuance of common stock (in shares) | 10,306,000 | ||||
Issuance of common stock for vesting of RSUs | $ 1 | (1) | |||
Issuance of common stock for vesting of RSUs (in shares) | 80,000 | ||||
Stock compensation expense | 11,328 | 11,328 | |||
Balance at Dec. 31, 2014 | $ 498 | 656,519 | (470,780) | 186,237 | |
Balance (in shares) at Dec. 31, 2014 | 49,806,000 | ||||
Comprehensive loss: | |||||
Net loss | (118,183) | (118,183) | |||
Exercise of stock options | $ 5 | 5,107 | $ 5,112 | ||
Exercise of stock options (in shares) | 481,000 | 481,140 | |||
Net proceeds from issuance of common stock | $ 115 | 222,827 | $ 222,942 | ||
Net proceeds from issuance of common stock (in shares) | 11,500,000 | ||||
Issuance of common stock for vesting of RSUs (in shares) | 27,000 | ||||
Stock compensation expense | 15,590 | 15,590 | |||
Balance at Dec. 31, 2015 | $ 618 | 900,043 | (588,963) | 311,698 | |
Balance (in shares) at Dec. 31, 2015 | 61,814,000 | ||||
Comprehensive loss: | |||||
Net loss | (176,273) | (176,273) | |||
Other comprehensive loss | $ (65) | (65) | |||
Exercise of stock options | $ 2 | 1,082 | $ 1,084 | ||
Exercise of stock options (in shares) | 162,000 | 162,340 | |||
Issuance of common stock for vesting of RSUs (in shares) | 44,000 | ||||
Stock compensation expense | 18,039 | $ 18,039 | |||
Balance at Dec. 31, 2016 | $ 620 | $ 919,164 | $ (765,236) | $ (65) | $ 154,483 |
Balance (in shares) at Dec. 31, 2016 | 62,020,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Operating activities | |||
Net loss | $ (176,273) | $ (118,183) | $ (79,159) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Depreciation and amortization | 2,438 | 1,982 | 1,073 |
Stock based compensation expense | 18,039 | 15,590 | 11,328 |
Loss on sale of asset, net | 9 | ||
Amortization of debt issuance costs | 281 | 458 | 390 |
Accrual of the end of term charge on the debt | 171 | 76 | 110 |
Changes in operating assets and liabilities: | |||
Prepaid expenses and other assets | 191 | (1,484) | (2,972) |
Accounts payable | 2,767 | (1,781) | 3,312 |
Accrued expenses and other | 5,678 | 2,642 | 1,493 |
Net cash used in operating activities | (146,708) | (100,700) | (64,416) |
Investing activities | |||
Purchase of fixed assets | (4,200) | (3,454) | (5,351) |
Proceeds from sale of asset | 10 | ||
Net cash used in investing activities | (4,200) | (3,454) | (5,341) |
Financing activities | |||
Payments on capital lease obligations | (64) | ||
Proceeds from issuance of debt | 30,000 | 5,000 | |
Proceeds from issuance of common stock | 222,942 | 109,013 | |
Proceeds from exercise of stock options | 1,084 | 5,112 | 1,390 |
Payment of debt issuance costs | (411) | (250) | (250) |
Net cash provided by financing activities | 30,673 | 227,804 | 115,089 |
Effect of exchange rates on cash and cash equivalents | (50) | ||
Net (decrease) increase in cash and cash equivalents | (120,285) | 123,650 | 45,332 |
Cash and cash equivalents at beginning of period | 282,876 | 159,226 | 113,894 |
Cash and cash equivalents at end of period | 162,591 | 282,876 | 159,226 |
Supplemental disclosures of cash flow information: | |||
Cash paid for interest | 3,608 | 2,948 | 1,803 |
Cash (paid) received for taxes, net | $ (85) | $ 3,008 | $ 9,429 |
Description of Business and Bas
Description of Business and Basis of Presentation | 12 Months Ended |
Dec. 31, 2016 | |
Description of Business and Basis of Presentation | |
Description of Business and Basis of Presentation | 1. Description of Business and Basis of Presentation Description of Business —Insmed is a global biopharmaceutical company focused on the unmet needs of patients with rare diseases. The Company's lead product candidate is ARIKAYCE, or liposomal amikacin for inhalation (LAI), which is in late-stage development for adult patients with treatment refractory nontuberculous mycobacteria (NTM) lung disease, a rare and often chronic infection that is capable of causing irreversible lung damage and which can be fatal. The Company's earlier clinical-stage pipeline includes INS1007, a novel oral reversible inhibitor of dipeptidyl peptidase 1, and INS1009, an inhaled treprostinil prodrug nanoparticle formulation. The Company has funded its operations, in recent years, through public offerings of equity securities and debt financings. The Company expects to continue to incur losses in order to fund research and development activities for its clinical programs and commercial launch activities for ARIKAYCE. The Company will need to raise additional capital to fund operations, to develop and commercialize ARIKAYCE, to develop INS1007 and INS1009, and to develop, acquire, in-license or co-promote other products that address orphan or rare diseases. The Company believes it currently has sufficient funds to meet its financial needs for at least the next 12 months. The Company was incorporated in the Commonwealth of Virginia on November 29, 1999 and its principal executive offices are located in Bridgewater, New Jersey. The Company has legal entities in the United States (US), Ireland, Germany, France, the United Kingdom (UK) and the Netherlands. Basis of Presentation —The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Insmed Limited, Celtrix Pharmaceuticals, Inc., Insmed Holdings Limited, Insmed Ireland Limited, Insmed France SAS, Insmed Germany GmbH and Insmed Netherlands B.V. All intercompany transactions and balances have been eliminated in consolidation. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Use of Estimates —The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States (GAAP) requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The Company bases its estimates and judgments on historical experience and on various other assumptions. The amounts of assets and liabilities reported in the Company's balance sheets and the amounts of expenses reported for each period presented are affected by estimates and assumptions, which are used for, but not limited to, the accounting for stock-based compensation, income taxes, loss contingencies, and accounting for research and development costs. Actual results could differ from those estimates. Investment Income and Interest Expense —Investment income consists of interest and dividend income earned on the Company's cash and cash equivalents. Interest expense consists primarily of interest costs related to the Company's debt. Cash and Cash Equivalents —The Company considers cash equivalents to be highly liquid investments with maturities of three months or less from the date of purchase. Fixed Assets, Net —Fixed assets are recorded at cost and are depreciated on a straight-line basis over the estimated useful lives of the assets. Estimated useful lives of three to five years are used for computer equipment. Estimated useful lives of seven years are used for laboratory equipment, office equipment, manufacturing equipment and furniture and fixtures. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the asset. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, then an impairment charge is recognized for the amount by which the carrying value of the asset exceeds the fair value of the asset. Identifiable Intangible Assets —Identifiable intangible assets are measured at their respective fair values and are not amortized until commercialization. Once commercialization occurs, these intangible assets will be amortized over their estimated useful lives. The fair values assigned to the Company's intangible assets are based on reasonable estimates and assumptions given available facts and circumstances. Unanticipated events or circumstances may occur that may require the Company to review the assets for impairment. Events or circumstances that may require an impairment assessment include negative clinical trial results, the non-approval of a new drug application by a regulatory agency, material delays in the Company's development program or a sustained decline in market capitalization. Indefinite-lived intangible assets are not subject to periodic amortization. Rather, indefinite-lived intangibles are reviewed for impairment by applying a fair value based test on an annual basis or more frequently if events or circumstances indicate impairment may have occurred. Events or circumstances that may require an interim impairment assessment are consistent with those described above. The Company performs its annual impairment test as of October 1 of each year. The Company uses the income approach to derive the fair value of in-process research and development assets. This approach calculates fair value by estimating future cash flows attributable to the assets and then discounting these cash flows to a present value using a risk-adjusted discount rate. This approach requires significant management judgment with respect to unobservable inputs such as future volume, revenue and expense growth rates, changes in working capital use, appropriate discount rates and other assumptions and estimates. The estimates and assumptions used are consistent with the Company's business plans. A market based valuation approach was not considered given a lack of revenues and profits for the Company. Debt Issuance Costs —Debt issuance costs are amortized to interest expense using the effective interest rate method over the term of the debt. Debt issuance costs paid to the lender and third parties are reflected as a discount to the debt in the consolidated balance sheets. Unamortized debt issuance costs associated with extinguished debt are expensed in the period of the extinguishment. Fair Value Measurements —The Company categorizes its financial assets and liabilities measured and reported at fair value in the financial statements on a recurring basis based upon the level of judgments associated with the inputs used to measure their fair value. Hierarchical levels, which are directly related to the amount of subjectivity associated with the inputs used to determine the fair value of financial assets and liabilities, are as follows: Level 1—Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. Level 2—Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable for the assets or liability through correlation with market data at the measurement date and for the duration of the instrument's anticipated life. Level 3—Inputs reflect management's best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. Each major category of financial assets and liabilities measured at fair value on a recurring basis is categorized based upon the lowest level of significant input to the valuations. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Financial instruments in Level 1 generally include US treasuries and mutual funds listed in active markets. The Company's only assets and liabilities which were measured at fair value as of December 31, 2016 and December 31, 2015 were its cash and cash equivalents of $162.6 million and $282.9 million, respectively. These amounts were measured at Level 1 using quoted prices in active markets for identical assets at the measurement date. The Company's cash and cash equivalents permit daily redemption and the fair values of these investments are based upon the quoted prices in active markets provided by the holding financial institutions. Cash equivalents consist of liquid investments with a maturity of three months or less from the date of purchase and the short-term investments consist of instruments with maturities greater than three months. The Company recognizes transfers between levels within the fair value hierarchy, if any, at the end of each quarter. There were no transfers in or out of Level 1, Level 2 or Level 3 during 2016 and 2015. As of December 31, 2016 and 2015, the Company held no securities that were in an unrealized loss or gain position. The Company reviews the status of each security quarterly to determine whether an other-than-temporary impairment has occurred. In making its determination, the Company considers a number of factors, including: (1) the significance of the decline; (2) whether the securities were rated below investment grade; (3) how long the securities have been in an unrealized loss position; and (4) the Company's ability and intent to retain the investment for a sufficient period of time for it to recover. Foreign Currency —The Company has operations in the US, Ireland, Germany, France, the UK and the Netherlands. The results of its non-US dollar based functional currency operations are translated to US dollars at the average exchange rates during the period. Assets and liabilities are translated at the exchange rate prevailing at the balance sheet date. Equity is translated at the prevailing exchange rate at the date of the equity transaction. Translation adjustments are included in shareholders' equity, as a component of other comprehensive loss. The Company realizes foreign currency transaction gains (losses) in the normal course of business based on movements in the applicable exchange rates. These gains (losses) are included as a component of other income (expense), net. Concentration of Credit Risk —Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents. The Company places its cash equivalents with high credit-quality financial institutions and may invest its short-term investments in US treasury securities, mutual funds and government agency bonds. The Company has established guidelines relative to credit ratings and maturities that seek to maintain safety and liquidity. The Company sources its raw materials from single suppliers. The inability of the suppliers or manufacturers to fulfill supply requirements of the Company could materially impact future operating results. A change in the relationship with the suppliers or manufacturer, or an adverse change in their business, could materially impact future operating results. Revenue Recognition —In 2015, the French National Agency for Medicines and Health Products Safety (ANSM) granted LAI a Temporary Authorizations for Use (Autorisation Temporaire d'Utilisation or ATU). Pursuant to this program, the Company shipped product to pharmacies after receiving requests from physicians for patients in France. For the years ended December 31, 2016 and 2015, the revenue recorded was immaterial and is included as a component of other income (expense), net. The Company is initiating expanded access programs (EAPs) in other select territories in Europe, some of which may be fully reimbursed. EAPs are intended to make products available on a named patient basis before they are commercially available in accordance with local regulations. The Company did not recognize any revenue in 2014. The Company recognizes revenues when all of the following four criteria are present: persuasive evidence of an arrangement exists; delivery has occurred or services have been rendered; the fee is fixed or determinable; and collectability is reasonably assured. Research and Development —Research and development expenses consist primarily of salaries, benefits and other related costs, including stock based compensation, for personnel serving in the Company's research and development functions, and other internal operating expenses, the cost of manufacturing a drug candidate, including the medical devices for drug delivery, for clinical study, the cost of conducting clinical studies, and the cost of conducting preclinical and research activities. In addition, research and development expenses include payments to third parties for the license rights to products in development (prior to marketing approval). The Company's expenses related to manufacturing its drug candidate and medical devices for clinical study are primarily related to activities at contract manufacturing organizations that manufacture ARIKAYCE, INS1007, and INS1009 and the medical devices for the Company's use. The Company's expenses related to clinical trials are primarily related to activities at contract research organizations that conduct and manage clinical trials on the Company's behalf. These contracts set forth the scope of work to be completed at a fixed fee or amount per patient enrolled. Payments under these contracts primarily depend on performance criteria such as the successful enrollment of patients or the completion of clinical trial milestones as well as time-based fees. Expenses are accrued based on contracted amounts applied to the level of patient enrollment and to activity according to the clinical trial protocol. Nonrefundable advance payments for goods or services that will be used or rendered for future research and development activities are deferred and capitalized. Such amounts are then recognized as an expense as the related goods are delivered or the services are performed, or when the goods or services are no longer expected to be provided. Stock-Based Compensation —The Company recognizes stock-based compensation expense for awards of equity instruments to employees and directors based on the grant-date fair value of those awards. The grant-date fair value of the award is recognized as compensation expense ratably over the requisite service period, which generally equals the vesting period of the award, and if applicable, is adjusted for expected forfeitures. The Company also grants performance-based stock options to employees. The grant-date fair value of the performance-based stock options is recognized as compensation expense over the implicit service period using the accelerated attribution method once it is probable that the performance condition will be achieved. Stock-based compensation expense is included in both research and development expenses and general and administrative expenses in the Consolidated Statements of Comprehensive Loss. Income Taxes —The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recorded to reduce the deferred tax assets to the amount that is expected to be realized. In evaluating the need for a valuation allowance, the Company takes into account various factors, including the expected level of future taxable income and available tax planning strategies. If actual results differ from the assumptions made in the evaluation of a valuation allowance, the Company records a change in valuation allowance through income tax expense in the period such determination is made. The Company uses a comprehensive model for how it measures, presents and discloses an uncertain tax position taken or expected to be taken in a tax return. The Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based solely on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood to be sustained upon ultimate settlement. The Company had no uncertain tax positions as of December 31, 2016 and 2015 that qualified for either recognition or disclosure in the consolidated financial statements. The Company's policy for interest and penalties related to income tax exposures is to recognize interest and penalties as a component of the income tax provision (benefit) in the Consolidated Statements of Comprehensive Loss. Net Loss Per Common Share —Basic net loss per common share is computed by dividing net loss attributable to common shareholders by the weighted average number of common shares outstanding during the period. Diluted net loss per common share is computed by dividing net loss by the weighted average number of common shares and other dilutive securities outstanding during the period. Potentially dilutive securities from stock options and restricted stock units would be antidilutive as the Company incurred a net loss in all periods presented. Potentially dilutive common shares resulting from the assumed exercise of outstanding stock options are determined based on the treasury stock method. The following table sets forth the reconciliation of the weighted average number of shares used to compute basic and diluted net loss per share for the years ended December 31, 2016, 2015 and 2014. Years Ended December 31, 2016 2015 2014 (in thousands, except per share amounts) Numerator: Net loss $ ) $ ) $ ) Denominator: Weighted average common shares used in calculation of basic net loss per share: Effect of dilutive securities: Common stock options - - - Restricted stock and restricted stock units - - - Weighted average common shares outstanding used in calculation of diluted net loss per share Net loss per share: Basic and Diluted $ ) $ ) $ ) The following potentially dilutive securities have been excluded from the computations of diluted weighted-average common shares outstanding as of December 31, 2016, 2015 and 2014 as their effect would have been anti-dilutive (in thousands). 2016 2015 2014 Stock options to purchase common stock Restricted stock and restricted stock units Segment Information —The Company currently operates in one business segment, which is the development and commercialization of therapies for patients with rare diseases. A single management team that reports to the Chief Executive Officer comprehensively manages the entire business. The Company does not operate separate lines of business with respect to its products or product candidates. Accordingly, the Company does not have separate reportable segments. New Accounting Pronouncements (Adopted) —In August 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-15, Presentation of Financial Statements—Going Concern: Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern, which requires management to evaluate whether there is substantial doubt about the entity's ability to continue as a going concern and, if so, provide certain footnote disclosures. This ASU was effective for the annual period ended December 31, 2016, and interim reporting periods thereafter. The adoption of this standard did not have an impact on the Company's consolidated financial statements and related footnote disclosures. In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes, which updated and simplified the presentation of deferred income taxes. Current generally accepted accounting principles require an entity to separate deferred income tax liabilities and assets into current and noncurrent amounts in a classified statement of financial position. To simplify the presentation of deferred income taxes, the amendments in this update require that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The amendments in this update are effective for financial statements issued for annual periods beginning after December 15, 2016 and interim periods within those annual periods. Earlier application was permitted and the Company adopted the update effective with its annual reporting period ended December 31, 2015. The adoption of this update did not have a significant impact on the Company's consolidated financial statements. New Accounting Pronouncements (Not Yet Adopted) —In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) which amended the existing accounting standards for revenue recognition. ASU 2014-09 establishes principles for recognizing revenue upon the transfer of promised goods or services to customers, in an amount that reflects the expected consideration received in exchange for those goods or services. In July 2015, the FASB deferred the effective date for annual reporting periods beginning after December 15, 2017. The Company expects to adopt ASU 2014-09 in the first quarter of 2018 and the impact of adoption will not be material to its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) in order to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet for those leases classified as operating leases under previous GAAP. ASU 2016-02 requires that a lessee should recognize a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term on the balance sheet. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 (including interim periods within those periods) using a modified retrospective approach and early adoption is permitted. The Company expects to adopt ASU 2016-02 in the first quarter of 2019 and is in the process of evaluating the impact of adoption on its consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting, which amends ASC Topic 718, Compensation—Stock Compensation . ASU 2016-09 simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. The Company will adopt ASU 2016-09 in the first quarter of 2017 and is in the process of evaluating the impact of adoption on its consolidated financial statements. |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2016 | |
Accrued Expenses | |
Accrued Expenses | 3. Accrued Expenses Accrued expenses consist of the following: As of December 31, 2016 2015 (in thousands) Accrued clinical trial expenses $ $ Accrued compensation Accrued professional fees Accrued technical operation expenses Accrued interest payable Other accrued expenses $ $ |
Identifiable Intangible Assets
Identifiable Intangible Assets | 12 Months Ended |
Dec. 31, 2016 | |
Identifiable Intangible Assets | |
Identifiable Intangible Assets | 4. Identifiable Intangible Assets The Company's only identifiable intangible asset was in-process research and development (IPRD) related to ARIKAYCE as of December 31, 2016 and 2015. The total intangible IPRD asset was $58.2 million as of December 31, 2016 and 2015, which resulted from the initial amount recorded at the time of the Company's merger with Transave in 2010 and subsequent adjustments in the value. The Company uses the income approach to derive the fair value of in-process research and development assets. This approach calculates fair value by estimating future cash flows attributable to the assets and then discounting these cash flows to a present value using a risk-adjusted discount rate. Identifiable intangible assets are measured at their respective fair values and will not be amortized until commercialization. If commercialization occurs, intangible assets will be amortized over their estimated useful lives. As of December 31, 2016, the Company did not identify any indicators of impairment of its in-process research and development intangible assets and the implied value of the intangible assets was more than 100% greater than the book value. |
Fixed Assets, net
Fixed Assets, net | 12 Months Ended |
Dec. 31, 2016 | |
Fixed Assets, net | |
Fixed Assets, net | 5. Fixed Assets, net Fixed assets are stated at cost and depreciated using the straight-line method, based on useful lives as follows: As of December 31, Estimated Asset Description 2016 2015 (in thousands) Lab equipment 7 $ $ Furniture and fixtures 7 Computer hardware and software 3 - 5 Office equipment 7 Manufacturing equipment 7 Leasehold improvements lease term Less accumulated depreciation ) ) Fixed assets, net $ $ Depreciation expense was $2.4 million, $2.0 million and $1.1 million for the years ended December 31, 2016, 2015 and 2014, respectively. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2016 | |
Debt | |
Debt | 6. Debt On June 29, 2012, the Company and its domestic subsidiaries, as co-borrowers, entered into a Loan and Security Agreement with Hercules Technology Growth Capital, Inc. (as subsequently amended, the Prior Loan Agreement) under which the Company borrowed an aggregate of $25.0 million at an interest rate of 9.25%. The Company was required to pay an "end of term" charge of $390,000 in January of 2016, which was charged to interest expense (and accreted to the debt) using the effective interest method over the life of the Prior Loan Agreement. On September 30, 2016, the Company and its domestic subsidiaries, as co-borrowers, entered into an Amended and Restated Loan and Security Agreement (the A&R Loan Agreement) with Hercules Capital, Inc. (Hercules). The A&R Loan Agreement included a total commitment from Hercules of up to $55.0 million, of which $25.0 million was previously outstanding. The amount of borrowings was increased by $10.0 million to an aggregate total of $35.0 million on September 30, 2016. An additional $20.0 million was available at the Company's option through June 30, 2017 subject to certain conditions, including the payment of a facility fee of 0.375%. The Company exercised this option in early October 2016 and borrowed an additional $20.0 million in connection with its upfront payment obligation under the License Agreement with AstraZeneca (see Note 10). The interest rate for the term is floating and is defined as the greater of (i) 9.25% or (ii) 9.25% plus the sum of the US prime rate minus 4.50%, along with a backend fee of 4.15% of the aggregate principal amount outstanding and an aggregate facility fee of $337,500. The interest-only period extends through November 1, 2018, but can be extended up to six months under certain conditions. The maturity date of the loan facility was also extended to October 1, 2020. Pursuant to the A&R Loan Agreement, the Company is required to have consolidated minimum cash liquidity in an amount no less than $25.0 million. Such requirement terminates upon the earlier of the date by which the Company completes an equity financing with at least $75.0 million in proceeds or the date the Company generates and announces data from the CONVERT study in a manner that could support an NDA filing. In addition, pursuant to the A&R Loan Agreement, Hercules has the right to participate, in an aggregate amount of up to $2.0 million, in a subsequent private financing that involves the issuance of our equity securities. In connection with the A&R Loan Agreement, the Company granted Hercules a first position lien on all of the Company's assets, excluding intellectual property. Prepayment of the loans made pursuant to the A&R Loan Agreement is subject to penalty. The backend fee of 4.15% on the aggregate outstanding principal balance will be charged to interest expense (and accreted to the debt) using the effective interest method over the original life of the A&R Loan Agreement. Debt issuance fees paid to Hercules were recorded as a discount on the debt and are being amortized to interest expense using the effective interest method over the life of the A&R Loan Agreement. The A&R Loan Agreement also contains representations and warranties by the Company and the lender and indemnification provisions in favor of the lender and customary covenants (including limitations on other indebtedness, liens, acquisitions, investments and dividends, and a minimum liquidity covenant), and events of default (including payment defaults, breaches of covenants following any applicable cure period, a material impairment in the perfection or priority of the lender's security interest or in the collateral, and events relating to bankruptcy or insolvency). Upon the occurrence of an event of default, a default interest rate of an additional 5% may be applied to the outstanding loan balances, and the lender may terminate its lending commitment, declare all outstanding obligations immediately due and payable, and take such other actions as set forth in the A&R Loan Agreement. The following table presents the components of the Company's debt balance as of December 31, 2016 (in thousands): Debt: Note payable under A&R Loan Agreement $ Accretion of end of term charge Issuance fees paid to lender ) Current portion of long-term debt - Long-term debt $ Future principal repayments of the Company's long-term debt are as follows (in thousands): Year Ending in December 31: 2017 $ - 2018 2019 2020 $ The estimated fair value of the debt (categorized as a Level 2 liability for fair value measurement purposes) is determined using current market factors and the ability of the Company to obtain debt at comparable terms to those that are currently in place. As of December 31, 2016 and 2015, the fair value of the Company's debt approximates the carrying amount. |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2016 | |
Shareholders' Equity | |
Shareholders' Equity | 7. Shareholders' Equity Common Stock —As of December 31, 2016, the Company had 500,000,000 shares of common stock authorized with a par value of $0.01 and 62,019,889 shares of common stock issued and outstanding. In addition, as of December 31, 2016, the Company had reserved 7,116,706 shares of common stock for issuance upon the exercise of outstanding common stock options and 89,194 shares of common stock for issuance upon the vesting of restricted stock units. In April 2015, the Company completed an underwritten public offering of 11,500,000 shares of the Company's common stock, which included the underwriter's exercise in full of its over-allotment option of 1,500,000 shares, at a price to the public of $20.65 per share. The Company's net proceeds from the sale of the shares, after deducting the underwriter's discount and offering expenses of $14.5 million, were $222.9 million. In August 2014, the Company completed an underwritten public offering of 10,235,000 shares of the Company's common stock, which included the underwriter's exercise in full of its over-allotment option of 1,335,000 shares, at a price to the public of $11.25 per share. The Company's net proceeds from the sale of the shares, after deducting the underwriter's discount and offering expenses of $7.1 million, were $108.0 million. In December 2014, in connection with the Third Amendment to the Prior Loan Agreement, the Company entered into a stock purchase agreement with Hercules pursuant to which the Company issued 70,771 shares of its common stock, at a price of $14.13 per share (the closing price of the Company's common stock as reported by the NASDAQ Stock Market on December 12, 2014), for an aggregate purchase price of approximately $1.0 million. The securities sold in this private placement have not been registered under the Securities Act of 1933, as amended (the Securities Act) and may not be offered or sold in the US in the absence of an effective registration statement or exemption from the registration requirements under the Securities Act. The issuance of the securities in this transaction were exempt from registration under Section 4(2) of the Securities Act. Preferred Stock —As of December 31, 2016 and 2015, the Company had 200,000,000 shares of preferred stock authorized with a par value of $0.01 and no shares of preferred stock were issued and outstanding. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2016 | |
Stock-Based Compensation | |
Stock-Based Compensation | 8. Stock-Based Compensation The Company's current equity compensation plan, the 2015 Incentive Plan, was approved by shareholders at the Company's 2015 Annual Meeting of Shareholders. The 2015 Incentive Plan is administered by the Compensation Committee and the Board of Directors of the Company. Under the terms of the 2015 Incentive Plan, the Company is authorized to grant a variety of incentive awards based on its common stock, including stock options (both incentive stock options and non-qualified stock options), performance options/shares and other stock awards, as well as the payment of incentive bonuses to all employees and non-employee directors. The Company has 5,000,000 shares of common stock authorized for issuance under the 2015 Incentive Plan and, as of December 31, 2016, there were 2,266,465 shares remaining for future grants (or issuances) of stock options, stock appreciation rights, restricted stock, restricted stock units and incentive bonuses thereunder. The 2015 Incentive Plan will terminate on April 9, 2025 unless it is extended or terminated earlier pursuant to its terms. In addition, from time to time, the Company makes inducement grants of stock options. These awards are made pursuant to the NASDAQ inducement grant exception as a component of new hires' employment compensation. Inducement stock options granted to new employees during the years ended December 31, 2016 and 2015 were 88,060 and 227,000, respectively. Stock Options —The Company calculates the fair value of stock options granted using the Black-Scholes valuation model. The following table summarizes the grant date fair value and assumptions used in determining the fair value of all stock options granted, including grants of inducement options, during the years ended December 31, 2016, 2015 and 2014. 2016 2015 2014 Volatility 74% - 77% 78% - 82% 83% - 86% Risk-free interest rate 1.00% - 1.90% 1.31% - 1.75% 1.46% - 1.83% Dividend yield 0.0% 0.0% 0.0% Expected option term (in years) 6.25 6.25 6.25 Weighted-average fair value of stock options granted $8.77 $14.20 $11.74 For the years ended December 31, 2016, 2015 and 2014, the volatility factor was based on the Company's historical volatility since the closing of the merger with Transave in December 2010. The expected option term was determined using the simplified method as described in ASC Topic 718, Accounting for Stock Compensation, which is the midpoint between the vesting date and the end of the contractual term. The risk-free interest rate was based on the US Treasury yield in effect at the date of grant. Forfeitures are based on actual percentage of option forfeitures since the closing of the merger, and this is the basis for future forfeiture expectations. From time to time, the Company grants performance-condition options to certain employees. Vesting of these options is subject to the Company achieving certain performance criteria established at the date of grant and the individuals fulfilling a service condition (continued employment). As a result of the Marketing Authorization Application (MAA) acceptance for ARIKAYCE, which was received from the European Medicines Agency (EMA) in February 2015, the vesting of performance options totaling $1.5 million were recorded as non-cash compensation expense in the first quarter of 2015. As of December 31, 2016, the Company had performance options totaling 158,334 shares outstanding. The following table summarizes stock option activity for stock options granted for the years ended December 31, 2016, 2015 and 2014 as follows: Number of Weighted Weighted Aggregate Options outstanding at January 1, 2014 $ Granted Exercised ) Forfeited and expired ) Options outstanding at December 31, 2014 $ Vested and expected to vest at December 31, 2014 Exercisable at December 31, 2014 Options outstanding at December 31, 2014 $ Granted Exercised ) Forfeited and expired ) Options outstanding at December 31, 2015 $ Vested and expected to vest at December 31, 2015 Exercisable at December 31, 2015 Options outstanding at December 31, 2015 $ Granted Exercised ) Forfeited and expired ) Options outstanding at December 31, 2016 $ $ Vested and expected to vest at December 31, 2016 $ $ Exercisable at December 31, 2016 $ $ The total intrinsic value of stock options exercised during the years ended December 31, 2016, 2015 and 2014 was $1.0 million, $4.7 million and $2.5 million, respectively. As of December 31, 2016, there was $26.8 million of unrecognized compensation expense related to unvested stock options, which is expected to be recognized over a weighted average period of 2.7 years. Included above in unrecognized compensation expense was $1.2 million related to outstanding performance-based options. The following table summarizes the range of exercise prices and the number of stock options outstanding and exercisable as of December 31, 2016: Outstanding as of December 31, 2016 Exercisable as of Range of Number of Weighted Weighted Number of Weighted $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ - - $ $ $ $ $ $ $ $ Restricted Stock and Restricted Stock Units —The Company may grant Restricted Stock (RS) and Restricted Stock Units (RSUs) to employees and non-employee directors. Each share of RS vests upon and each RSU represents a right to receive one share of the Company's common stock upon the completion of a specific period of continued service or achievement of a certain milestone. RS and RSU awards granted are valued at the market price of the Company's common stock on the date of grant. The Company recognizes noncash compensation expense for the fair values of these RS and RSUs on a straight-line basis over the requisite service period of these awards. The following table summarizes RSU awards granted during the years ended December 31, 2016, 2015 and 2014: Number of Weighted Outstanding at January 1, 2014 $ Granted Released ) Forfeited - - Outstanding at December 31, 2014 $ Granted Released ) Forfeited - - Outstanding at December 31, 2015 $ Granted Released ) Forfeited - - Outstanding at December 31, 2016 $ The following table summarizes the stock-based compensation recorded in the Consolidated Statements of Comprehensive Loss related to stock options and RSUs during the years ended December 31, 2016, 2015 and 2014: 2016 2015 2014 (in millions) Research and development expenses $ $ $ General and administrative expenses Total(1) $ $ $ (1) Includes $1.7 million, $2.3 million and $2.4 million for the years ended December 31, 2016, 2015 and 2014, respectively, for the remeasurement of certain stock options and RSUs that occurred during May 2013. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Taxes | |
Income Taxes | 9. Income Taxes The income tax provision (benefit) was $0.1 million, $(2.0) million and $(10.4) million and the effective rates were approximately 0%, 2% and 12% for the years ended December 31, 2016, 2015 and 2014, respectively. The income tax provision for the year ended December 31, 2016 reflected current income tax expense recorded as a result of the taxable income in certain of the Company's subsidiaries in Europe. The income tax benefit recorded and the effective tax rates for the years ended December 31, 2015 and 2014 primarily reflected the reversal of valuation allowances previously recorded against the Company's New Jersey State net operating losses (NOLs) that resulted from the Company's sale of $24.3 million and $110.5 million of its New Jersey State NOLs under the State of New Jersey's Technology Business Tax Certificate Transfer Program (the Program) for cash of $2.0 million and $10.4 million, respectively, net of commissions. The Program allows qualified technology and biotechnology businesses in New Jersey to sell unused amounts of NOLs and defined research and development tax credits for cash. In 2015, the Company reached the lifetime maximum cap of NOLs that can be sold to the State of New Jersey. Therefore, the Company did not receive any cash proceeds from the Program in 2016 and will no longer receive cash proceeds from the Program in the future. The Company is subject to US federal and state income taxes and the statute of limitations for tax audit is open for the federal tax returns for the years ended 2013 and later, and is generally open for certain states for the years 2012 and later. The Company's US federal tax return for the year ended December 31, 2013 is currently under audit by the Internal Revenue Service. The Company has incurred net operating losses since inception, except for the year ended December 31, 2009. Such loss carryforwards would be subject to audit in any tax year in which those losses are utilized, notwithstanding the year of origin. The Company's policy is to recognize interest accrued related to unrecognized tax benefits and penalties in income tax expense. The Company has recorded no such expense. As of December 31, 2016 and 2015, the Company has recorded no reserves for unrecognized income tax benefits, nor has it recorded any accrued interest or penalties related to uncertain tax positions. The Company does not anticipate any material changes in the amount of unrecognized tax positions over the next 12 months. For the years ended December 31, 2016 and 2015, the Company was also subject to foreign income taxes as a result of legal entities established for activities in Europe. The Company's loss before income taxes in the US and globally was as follows (in thousands): Years ended December 31, 2016 2015 2014 US $ ) $ ) $ ) Foreign ) ) - Total $ ) $ ) $ ) The Company's income tax provision (benefit) consisted of the following (in thousands): Years ended December 31, 2016 2015 2014 Current: Federal $ - $ - $ - State ) ) Foreign - ) ) Deferred: Federal - - - State - - - Foreign - - - - - - Total $ $ ) $ ) The reconciliation between the federal statutory tax rate of 34% and the Company's effective tax rate is as follows: Years Ended 2016 2015 2014 Statutory federal tax rate % % % Permanent items )% )% )% State income taxes, net of federal benefit % % )% R&D and other tax credits % % % Foreign income taxes )% )% % Change in state tax rate % % % Change in valuation allowance )% )% )% Other % % % Effective tax rate % % % Deferred tax assets and liabilities are determined based on the difference between financial statement and tax bases using enacted tax rates in effect for the year in which the differences are expected to reverse. The components of the deferred tax assets and liabilities consist of the following: As of December 31, 2016 2015 (in thousands) Deferred tax assets: Net operating loss carryforwards $ $ General business credits Product license - Alternative minimum tax (AMT) credit Other Gross deferred tax assets $ $ Deferred tax liabilities: In-process research and development $ ) $ ) Deferred tax liabilities $ ) $ ) Net deferred tax assets $ $ Valuation allowance ) ) Net deferred tax assets $ - $ - The net deferred tax assets (prior to applying the valuation allowance) of $284.6 million and $216.2 million at December 31, 2016 and 2015, respectively, primarily consist of net operating loss carryforwards for income tax purposes. Due to the Company's history of operating losses, the Company recorded a full valuation allowance on its net deferred tax assets by increasing the valuation allowance by $68.4 million and $52.3 million in 2016 and 2015, respectively, as it was more likely than not that such tax benefits will not be realized. At December 31, 2016, the Company had federal net operating loss carryforwards for income tax purposes of approximately $619.0 million. Due to the limitation on NOLs as more fully discussed below, $440.7 million of the NOLs are available to offset future taxable income, if any. The NOL carryovers and general business tax credits expire in various years beginning in 2018. For state tax purposes, the Company has approximately $193.1 million of New Jersey NOLs available to offset against future taxable income. The Company also has California and Virginia NOLs that are entirely limited due to Section 382 (as discussed below), in addition to changing state apportionment allocations, as the Company is now 100% resident in New Jersey. During 2014, the Company completed an Internal Revenue Code Section 382 (Section 382) analysis in order to determine the amount of losses that are currently available for potential offset against future taxable income, if any. It was determined that the utilization of the Company's NOL and general business tax credit carryforwards generated in tax periods up to and including December 2010 were subject to substantial limitations under Section 382 due to ownership changes that occurred at various points from the Company's original organization through December 2010. In general, an ownership change, as defined by Section 382, results from transactions increasing the ownership of shareholders that own, directly or indirectly, 5% or more of a corporation's stock, in the stock of a corporation by more than 50 percentage points over a three-year period. Since the Company's formation, it has raised capital through the issuance of common stock on several occasions which, combined with the purchasing shareholders' subsequent disposition of those shares, resulted in multiple changes in ownership, as defined by Section 382 since the Company's formation in 1999. These ownership changes resulted in substantial limitations on the use of the Company's NOLs and general business tax credit carryforwards up to and including December 2010. The Company continues to track all of its NOLs and tax credit carryforwards but has provided a full valuation allowance to offset those amounts. |
License and Other Agreements
License and Other Agreements | 12 Months Ended |
Dec. 31, 2016 | |
License and Other Agreements | |
License and Other Agreements | 10. License and Other Agreements In-License Agreements PARI Pharma GmbH —In April 2008, the Company entered into a licensing agreement with PARI Pharma GmbH (PARI) for use of the optimized eFlow Nebulizer System for delivery of ARIKAYCE in treating patients with NTM infections, CF and bronchiectasis. The Company has rights to several US and foreign issued patents and patent applications involving improvements to the optimized eFlow Nebulizer System, to exploit such system with ARIKAYCE for the treatment of such indications, but the Company cannot manufacture such nebulizers except as permitted under the Commercialization Agreement with PARI. Under the licensing agreement, the Company paid PARI an upfront license fee and PARI is entitled to receive payments up to an aggregate of €4.3 million either in cash, qualified stock or a combination of both, at PARI's discretion, based on achievement of certain future milestone events including first acceptance of MAA submission (or equivalent) in the US of ARIKAYCE and the device, first receipt of marketing approval in the US for ARIKAYCE and the device, and first receipt of marketing approval in a major EU country for ARIKAYCE and the device. In addition, PARI is entitled to receive royalty payments in the mid-single digits on commercial net sales of ARIKAYCE, subject to certain specified annual minimum royalties. See below for information related to the commercialization agreement with PARI. Respironics —In November 2015, the Company entered into an agreement with Respironics Inc., a division of Philips (Respironics), for the clinical supply of devices to be used in the development of INS1009 for PAH. The agreement calls for payments to Respironics upon the achievement of certain clinical milestones relating to the development of INS1009 aggregating $7.6 million. In addition, the Company will be required to pay a royalty on net sales of the product, if any. Other Agreements Cystic Fibrosis Foundation Therapeutics, Inc. —In 2004 and 2009, the Company entered into research funding agreements with Cystic Fibrosis Foundation Therapeutics, Inc. (CFFT) whereby it received $1.7 million and $2.2 million for each respective agreement in research funding for the development of ARIKAYCE. If ARIKAYCE becomes an approved product for CF in the US, the Company will owe payments totaling up to $13.4 million to CFFT that would be payable over a three-year period after approval as a commercialized drug in the US. Furthermore, if certain global sales milestones are met within five years of the drug commercialization, the Company would owe an additional payment of $3.9 million. Since there is significant development and regulatory risk associated with ARIKAYCE, including with respect to the CF indication, the Company has not accrued these obligations. Therapure Biopharma Inc. —In February 2014, the Company entered into a Contract Manufacturing Agreement with Therapure Biopharma Inc. (Therapure) for the manufacture of ARIKAYCE. Pursuant to the agreement, the Company and Therapure collaborated to construct a production area for the manufacture of ARIKAYCE in Therapure's existing manufacturing facility in Mississauga, Ontario, Canada. Therapure manufactures ARIKAYCE for the Company on a non-exclusive basis. The agreement has an initial term of five years from the first date on which Therapure delivers ARIKAYCE to Insmed after Insmed obtains permits related to the manufacture of ARIKAYCE, and will renew automatically for successive periods of two years each, unless terminated by either party by providing the required two years' prior written notice to the other party. Notwithstanding the foregoing, the parties have rights and obligations under the agreement prior to the commencement of the initial term. Under the agreement, the Company is obligated to pay certain minimum amounts for the batches of ARIKAYCE produced each calendar year. The agreement allows for termination by either party upon the occurrence of certain events, including (i) the material breach by the other party of any provision of the agreement or the quality agreement expected to be entered into between the parties, or (ii) the default or bankruptcy of the other party. In addition, the Company may terminate the agreement for any reason upon no fewer than one hundred eighty days' advance notice. Costs incurred under this agreement will be recorded as a component of research and development expense until such time as the Company receives regulatory approvals for ARIKAYCE. PARI Pharma GmbH —In July 2014, the Company entered into a Commercialization Agreement with PARI for the manufacture and supply of eFlow nebulizer device as optimized for use with the Company's proprietary LAI. The Commercialization Agreement envisages that PARI will undertake the manufacturing of the Device except in the case of certain defined supply failures, when the Company will have the right to make the Device and have it made by third parties (but not certain third parties deemed under the Commercialization Agreement to compete with PARI). The agreement has an initial term of fifteen years from the first commercial sale of ARIKAYCE pursuant to the licensing agreement (the Initial Term). The term of the agreement may be extended by the Company for an additional five years by providing written notice to PARI at the least one year prior to the expiration of the Initial Term. Notwithstanding the foregoing, the parties have certain rights and obligations under the agreement prior to the commencement of the Initial Term. The agreement allows for termination by either party upon the occurrence of certain events, including (i) the material breach by the other party of any provision of the agreement, (ii) the default or bankruptcy of the other party, or (iii) in limited circumstances, upon termination by the Company of the License Agreement between the parties. SynteractHCR, Inc. —In December 2014, the Company entered into a services agreement with SynteractHCR, Inc. (Synteract) pursuant to which the Company retained Synteract to perform implementation and management services in connection with the 212 study. In April 2015, the Company entered into a work order with Synteract to perform implementation and management services for the 312 study. Ajinomoto Althea, Inc. —In September 2015, the Company entered into a Commercial Fill/Finish Services Agreement (the Fill/Finish Agreement) with Ajinomoto Althea, Inc., a Delaware corporation (Althea), for Althea to produce, on a non-exclusive basis, ARIKAYCE in finished dosage form. Under the Fill/Finish Agreement, the Company is obligated to pay a minimum of $2.7 million for the batches of ARIKAYCE produced by Althea each calendar year during the term of the Fill/Finish Agreement. The Fill/Finish Agreement became effective as of January 1, 2015, with an initial term that was to end on December 31, 2017. In 2016, the term was extended for an additional two years through December 31, 2019, and may be extended for additional two-year periods upon mutual written agreement of the Company and Althea at least one year prior to the expiration of its then-current term. The Company has spent more than the required minimum for batches of ARIKAYCE in each year of the contract. AstraZeneca —In October 2016, the Company entered into a license agreement (License Agreement) with AstraZeneca AB, a Swedish corporation (AstraZeneca). Pursuant to the terms of the License Agreement, AstraZeneca granted the Company exclusive global rights for the purpose of developing and commercializing AZD7986 (renamed INS 1007). In consideration of the licenses and other rights granted by AstraZeneca, the Company made an upfront payment of $30.0 million, which was included as research and development expense in the fourth quarter of 2016. The Company is also obligated to make a series of contingent milestone payments totaling up to an additional $85.0 million upon the achievement of clinical development and regulatory filing milestones. If the Company elects to develop INS1007 for a second indication, the Company will be obligated to make an additional series of contingent milestone payments totaling up to $42.5 million. No additional milestone payments are due for any indications beyond the first and second indications. In addition, the Company will pay AstraZeneca tiered royalties ranging from a high single-digit to mid-teen on net sales of any approved product based on INS1007 and one additional payment of $35.0 million upon the first achievement of $1 billion in annual net sales. The License Agreement provides AstraZeneca with the option to negotiate a future agreement with the Company for commercialization of INS1007 in chronic obstructive pulmonary disease or asthma. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies | |
Commitments and Contingencies | 11. Commitments and Contingencies Commitments The Company has an operating lease for office and laboratory space located in Bridgewater, NJ for which the initial lease term expires in November 2019. Future minimum rental payments under this lease are $3.0 million. In July 2016, the Company signed an operating lease for additional laboratory space located in Bridgewater, NJ for which the initial lease term expires in September 2021. Future minimum rental payments under this lease are $2.1 million. Rent expense charged to operations was $1.2 million, $0.8 million, and $1.3 million for the years ended December 31, 2016, 2015 and 2014, respectively. Rent expense is recorded on a straight-line basis over the term of the applicable leases. Future minimum rental cash payments required under the Company's operating leases as of December 31, 2016 are as follows (in thousands): Year Ending in December 31: 2017 $ 2018 2019 2020 2021 $ Legal Proceedings On July 15, 2016, a lawsuit captioned Hoey v. Insmed Incorporated, et al, No. 3:16-cv-04323-FLW-TJB (D.N.J. July 15, 2016) was filed in the US District Court for the District of New Jersey on behalf of a putative class of investors who purchased the Company's common stock from March 18, 2013 through June 8, 2016. The complaint alleged that the Company and certain of its executives violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (Exchange Act) by misrepresenting and/or omitting the likelihood of the EMA approving the Company's European MAA for use of ARIKAYCE in the treatment of NTM lung disease and the likelihood of commercialization of ARIKAYCE in Europe. On October 25, 2016, the Court issued an order appointing Bucks County Employees Retirement Fund as lead plaintiff for the putative class. On December 15, 2016, lead plaintiff filed an amended complaint that shortens the putative class period for the Exchange Act claims to March 26, 2014 through June 8, 2016 and adds claims under Sections 11, 12, and 15 of the Securities Act on behalf of a putative class of investors who purchased common stock in or traceable to the Company's March 31, 2015 public offering. The amended complaint names as defendants in the Securities Act claims the Company, certain directors and officers, and the investment banks who served as underwriters in connection with the secondary offering. The amended complaint alleges defendants violated the Securities Act by using a purportedly misleading definition of "culture conversion" and supposedly failing to disclose in the offering materials purported flaws in the Phase 2 study that made the secondary offering risky or speculative. The amended complaint seeks damages in an unspecified amount. The Company's response to the amended complaint, which it intends to move to dismiss, is due by March 1, 2017. The Company believes that the allegations in the complaints are without merit and intends to defend the lawsuit vigorously; however, there can be no assurance regarding the ultimate outcome of the lawsuit. From time to time, the Company is a party to various other lawsuits, claims and other legal proceedings that arise in the ordinary course of business. While the outcomes of these matters are uncertain, management does not expect that the ultimate costs to resolve these matters will have a material adverse effect on the Company's consolidated financial position, results of operations or cash flows. |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Data (Unaudited) | |
Quarterly Financial Data (Unaudited) | 12. Quarterly Financial Data (Unaudited) The following table summarizes unaudited quarterly financial data for the years ended December 31, 2016 and 2015 (in thousands, except per share data). 2016 First Second Third Fourth Total* Revenues $ - $ - $ - $ - $ - Operating loss $ ) $ ) $ ) $ ) $ ) Net loss $ ) $ ) $ ) $ ) $ ) Basic and diluted net loss per share $ ) $ ) $ ) $ ) $ ) 2015 First Second Third Fourth Total Revenues $ - $ - $ - $ - $ - Operating loss $ ) $ ) $ ) $ ) $ ) Net loss $ ) $ ) $ ) $ ) $ ) Basic and diluted net loss per share $ ) $ ) $ ) $ ) $ ) * Includes a $30.0 million upfront payment to AstraZeneca under the AZ License Agreement related to INS1007, which was included as a component of research and development expense. Basic and diluted net loss per share amounts included in the above table were computed independently for each of the quarters presented. Accordingly, the sum of the quarterly basic and diluted net loss per share amounts may not agree to the total for the year. |
Retirement Plan
Retirement Plan | 12 Months Ended |
Dec. 31, 2016 | |
Retirement Plan | |
Retirement Plan | 13. Retirement Plan The Company has a 401(k) defined contribution plan for the benefit for all US employees and permits voluntary contributions by employees subject to IRS-imposed limitations. Beginning in April 2015, the Company matched 100% of eligible employee contributions on the first 3% of employee salary (up to the IRS maximum). Employer contributions for the year ended December 31, 2016 and 2015 were $0.6 and $0.4 million, respectively. |
Summary of Significant Accoun20
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Summary of Significant Accounting Policies | |
Use of Estimates | Use of Estimates —The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States (GAAP) requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The Company bases its estimates and judgments on historical experience and on various other assumptions. The amounts of assets and liabilities reported in the Company's balance sheets and the amounts of expenses reported for each period presented are affected by estimates and assumptions, which are used for, but not limited to, the accounting for stock-based compensation, income taxes, loss contingencies, and accounting for research and development costs. Actual results could differ from those estimates. |
Investment Income and Interest Expense | Investment Income and Interest Expense —Investment income consists of interest and dividend income earned on the Company's cash and cash equivalents. Interest expense consists primarily of interest costs related to the Company's debt. |
Cash and Cash Equivalents | Cash and Cash Equivalents —The Company considers cash equivalents to be highly liquid investments with maturities of three months or less from the date of purchase. |
Fixed Assets, Net | Fixed Assets, Net —Fixed assets are recorded at cost and are depreciated on a straight-line basis over the estimated useful lives of the assets. Estimated useful lives of three to five years are used for computer equipment. Estimated useful lives of seven years are used for laboratory equipment, office equipment, manufacturing equipment and furniture and fixtures. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the asset. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, then an impairment charge is recognized for the amount by which the carrying value of the asset exceeds the fair value of the asset. |
Identifiable Intangible Assets | Identifiable Intangible Assets —Identifiable intangible assets are measured at their respective fair values and are not amortized until commercialization. Once commercialization occurs, these intangible assets will be amortized over their estimated useful lives. The fair values assigned to the Company's intangible assets are based on reasonable estimates and assumptions given available facts and circumstances. Unanticipated events or circumstances may occur that may require the Company to review the assets for impairment. Events or circumstances that may require an impairment assessment include negative clinical trial results, the non-approval of a new drug application by a regulatory agency, material delays in the Company's development program or a sustained decline in market capitalization. Indefinite-lived intangible assets are not subject to periodic amortization. Rather, indefinite-lived intangibles are reviewed for impairment by applying a fair value based test on an annual basis or more frequently if events or circumstances indicate impairment may have occurred. Events or circumstances that may require an interim impairment assessment are consistent with those described above. The Company performs its annual impairment test as of October 1 of each year. The Company uses the income approach to derive the fair value of in-process research and development assets. This approach calculates fair value by estimating future cash flows attributable to the assets and then discounting these cash flows to a present value using a risk-adjusted discount rate. This approach requires significant management judgment with respect to unobservable inputs such as future volume, revenue and expense growth rates, changes in working capital use, appropriate discount rates and other assumptions and estimates. The estimates and assumptions used are consistent with the Company's business plans. A market based valuation approach was not considered given a lack of revenues and profits for the Company. |
Debt Issuance Costs | Debt Issuance Costs —Debt issuance costs are amortized to interest expense using the effective interest rate method over the term of the debt. Debt issuance costs paid to the lender and third parties are reflected as a discount to the debt in the consolidated balance sheets. Unamortized debt issuance costs associated with extinguished debt are expensed in the period of the extinguishment. |
Fair Value Measurements | Fair Value Measurements —The Company categorizes its financial assets and liabilities measured and reported at fair value in the financial statements on a recurring basis based upon the level of judgments associated with the inputs used to measure their fair value. Hierarchical levels, which are directly related to the amount of subjectivity associated with the inputs used to determine the fair value of financial assets and liabilities, are as follows: Level 1—Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. Level 2—Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable for the assets or liability through correlation with market data at the measurement date and for the duration of the instrument's anticipated life. Level 3—Inputs reflect management's best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. Each major category of financial assets and liabilities measured at fair value on a recurring basis is categorized based upon the lowest level of significant input to the valuations. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Financial instruments in Level 1 generally include US treasuries and mutual funds listed in active markets. The Company's only assets and liabilities which were measured at fair value as of December 31, 2016 and December 31, 2015 were its cash and cash equivalents of $162.6 million and $282.9 million, respectively. These amounts were measured at Level 1 using quoted prices in active markets for identical assets at the measurement date. The Company's cash and cash equivalents permit daily redemption and the fair values of these investments are based upon the quoted prices in active markets provided by the holding financial institutions. Cash equivalents consist of liquid investments with a maturity of three months or less from the date of purchase and the short-term investments consist of instruments with maturities greater than three months. The Company recognizes transfers between levels within the fair value hierarchy, if any, at the end of each quarter. There were no transfers in or out of Level 1, Level 2 or Level 3 during 2016 and 2015. As of December 31, 2016 and 2015, the Company held no securities that were in an unrealized loss or gain position. The Company reviews the status of each security quarterly to determine whether an other-than-temporary impairment has occurred. In making its determination, the Company considers a number of factors, including: (1) the significance of the decline; (2) whether the securities were rated below investment grade; (3) how long the securities have been in an unrealized loss position; and (4) the Company's ability and intent to retain the investment for a sufficient period of time for it to recover. |
Foreign currency | Foreign Currency —The Company has operations in the US, Ireland, Germany, France, the UK and the Netherlands. The results of its non-US dollar based functional currency operations are translated to US dollars at the average exchange rates during the period. Assets and liabilities are translated at the exchange rate prevailing at the balance sheet date. Equity is translated at the prevailing exchange rate at the date of the equity transaction. Translation adjustments are included in shareholders' equity, as a component of other comprehensive loss. The Company realizes foreign currency transaction gains (losses) in the normal course of business based on movements in the applicable exchange rates. These gains (losses) are included as a component of other income (expense), net. |
Concentration of Credit Risk | Concentration of Credit Risk —Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents. The Company places its cash equivalents with high credit-quality financial institutions and may invest its short-term investments in US treasury securities, mutual funds and government agency bonds. The Company has established guidelines relative to credit ratings and maturities that seek to maintain safety and liquidity. The Company sources its raw materials from single suppliers. The inability of the suppliers or manufacturers to fulfill supply requirements of the Company could materially impact future operating results. A change in the relationship with the suppliers or manufacturer, or an adverse change in their business, could materially impact future operating results. |
Revenue Recognition | Revenue Recognition —In 2015, the French National Agency for Medicines and Health Products Safety (ANSM) granted LAI a Temporary Authorizations for Use (Autorisation Temporaire d'Utilisation or ATU). Pursuant to this program, the Company shipped product to pharmacies after receiving requests from physicians for patients in France. For the years ended December 31, 2016 and 2015, the revenue recorded was immaterial and is included as a component of other income (expense), net. The Company is initiating expanded access programs (EAPs) in other select territories in Europe, some of which may be fully reimbursed. EAPs are intended to make products available on a named patient basis before they are commercially available in accordance with local regulations. The Company did not recognize any revenue in 2014. The Company recognizes revenues when all of the following four criteria are present: persuasive evidence of an arrangement exists; delivery has occurred or services have been rendered; the fee is fixed or determinable; and collectability is reasonably assured. |
Research and Development | Research and Development —Research and development expenses consist primarily of salaries, benefits and other related costs, including stock based compensation, for personnel serving in the Company's research and development functions, and other internal operating expenses, the cost of manufacturing a drug candidate, including the medical devices for drug delivery, for clinical study, the cost of conducting clinical studies, and the cost of conducting preclinical and research activities. In addition, research and development expenses include payments to third parties for the license rights to products in development (prior to marketing approval). The Company's expenses related to manufacturing its drug candidate and medical devices for clinical study are primarily related to activities at contract manufacturing organizations that manufacture ARIKAYCE, INS1007, and INS1009 and the medical devices for the Company's use. The Company's expenses related to clinical trials are primarily related to activities at contract research organizations that conduct and manage clinical trials on the Company's behalf. These contracts set forth the scope of work to be completed at a fixed fee or amount per patient enrolled. Payments under these contracts primarily depend on performance criteria such as the successful enrollment of patients or the completion of clinical trial milestones as well as time-based fees. Expenses are accrued based on contracted amounts applied to the level of patient enrollment and to activity according to the clinical trial protocol. Nonrefundable advance payments for goods or services that will be used or rendered for future research and development activities are deferred and capitalized. Such amounts are then recognized as an expense as the related goods are delivered or the services are performed, or when the goods or services are no longer expected to be provided. |
Stock-Based Compensation | Stock-Based Compensation —The Company recognizes stock-based compensation expense for awards of equity instruments to employees and directors based on the grant-date fair value of those awards. The grant-date fair value of the award is recognized as compensation expense ratably over the requisite service period, which generally equals the vesting period of the award, and if applicable, is adjusted for expected forfeitures. The Company also grants performance-based stock options to employees. The grant-date fair value of the performance-based stock options is recognized as compensation expense over the implicit service period using the accelerated attribution method once it is probable that the performance condition will be achieved. Stock-based compensation expense is included in both research and development expenses and general and administrative expenses in the Consolidated Statements of Comprehensive Loss. |
Income Taxes | Income Taxes —The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recorded to reduce the deferred tax assets to the amount that is expected to be realized. In evaluating the need for a valuation allowance, the Company takes into account various factors, including the expected level of future taxable income and available tax planning strategies. If actual results differ from the assumptions made in the evaluation of a valuation allowance, the Company records a change in valuation allowance through income tax expense in the period such determination is made. The Company uses a comprehensive model for how it measures, presents and discloses an uncertain tax position taken or expected to be taken in a tax return. The Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based solely on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood to be sustained upon ultimate settlement. The Company had no uncertain tax positions as of December 31, 2016 and 2015 that qualified for either recognition or disclosure in the consolidated financial statements. The Company's policy for interest and penalties related to income tax exposures is to recognize interest and penalties as a component of the income tax provision (benefit) in the Consolidated Statements of Comprehensive Loss. |
Net Loss Per Common Share | Net Loss Per Common Share —Basic net loss per common share is computed by dividing net loss attributable to common shareholders by the weighted average number of common shares outstanding during the period. Diluted net loss per common share is computed by dividing net loss by the weighted average number of common shares and other dilutive securities outstanding during the period. Potentially dilutive securities from stock options and restricted stock units would be antidilutive as the Company incurred a net loss in all periods presented. Potentially dilutive common shares resulting from the assumed exercise of outstanding stock options are determined based on the treasury stock method. The following table sets forth the reconciliation of the weighted average number of shares used to compute basic and diluted net loss per share for the years ended December 31, 2016, 2015 and 2014. Years Ended December 31, 2016 2015 2014 (in thousands, except per share amounts) Numerator: Net loss $ ) $ ) $ ) Denominator: Weighted average common shares used in calculation of basic net loss per share: Effect of dilutive securities: Common stock options - - - Restricted stock and restricted stock units - - - Weighted average common shares outstanding used in calculation of diluted net loss per share Net loss per share: Basic and Diluted $ ) $ ) $ ) The following potentially dilutive securities have been excluded from the computations of diluted weighted-average common shares outstanding as of December 31, 2016, 2015 and 2014 as their effect would have been anti-dilutive (in thousands). 2016 2015 2014 Stock options to purchase common stock Restricted stock and restricted stock units |
Segment Information | Segment Information —The Company currently operates in one business segment, which is the development and commercialization of therapies for patients with rare diseases. A single management team that reports to the Chief Executive Officer comprehensively manages the entire business. The Company does not operate separate lines of business with respect to its products or product candidates. Accordingly, the Company does not have separate reportable segments. |
New Accounting Pronouncements (Adopted) | New Accounting Pronouncements (Adopted) —In August 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-15, Presentation of Financial Statements—Going Concern: Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern, which requires management to evaluate whether there is substantial doubt about the entity's ability to continue as a going concern and, if so, provide certain footnote disclosures. This ASU was effective for the annual period ended December 31, 2016, and interim reporting periods thereafter. The adoption of this standard did not have an impact on the Company's consolidated financial statements and related footnote disclosures. In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes, which updated and simplified the presentation of deferred income taxes. Current generally accepted accounting principles require an entity to separate deferred income tax liabilities and assets into current and noncurrent amounts in a classified statement of financial position. To simplify the presentation of deferred income taxes, the amendments in this update require that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The amendments in this update are effective for financial statements issued for annual periods beginning after December 15, 2016 and interim periods within those annual periods. Earlier application was permitted and the Company adopted the update effective with its annual reporting period ended December 31, 2015. The adoption of this update did not have a significant impact on the Company's consolidated financial statements. |
New Accounting Pronouncements (Not Yet Adopted) | New Accounting Pronouncements (Not Yet Adopted) —In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) which amended the existing accounting standards for revenue recognition. ASU 2014-09 establishes principles for recognizing revenue upon the transfer of promised goods or services to customers, in an amount that reflects the expected consideration received in exchange for those goods or services. In July 2015, the FASB deferred the effective date for annual reporting periods beginning after December 15, 2017. The Company expects to adopt ASU 2014-09 in the first quarter of 2018 and the impact of adoption will not be material to its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) in order to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet for those leases classified as operating leases under previous GAAP. ASU 2016-02 requires that a lessee should recognize a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term on the balance sheet. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 (including interim periods within those periods) using a modified retrospective approach and early adoption is permitted. The Company expects to adopt ASU 2016-02 in the first quarter of 2019 and is in the process of evaluating the impact of adoption on its consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting, which amends ASC Topic 718, Compensation—Stock Compensation . ASU 2016-09 simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. The Company will adopt ASU 2016-09 in the first quarter of 2017 and is in the process of evaluating the impact of adoption on its consolidated financial statements. |
Summary of Significant Accoun21
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Summary of Significant Accounting Policies | |
Reconciliation of the weighted average number of shares used to compute basic and diluted net loss per share | Years Ended December 31, 2016 2015 2014 (in thousands, except per share amounts) Numerator: Net loss $ ) $ ) $ ) Denominator: Weighted average common shares used in calculation of basic net loss per share: Effect of dilutive securities: Common stock options - - - Restricted stock and restricted stock units - - - Weighted average common shares outstanding used in calculation of diluted net loss per share Net loss per share: Basic and Diluted $ ) $ ) $ ) |
Potentially dilutive securities excluded from computations of diluted weighted average shares outstanding | The following potentially dilutive securities have been excluded from the computations of diluted weighted-average common shares outstanding as of December 31, 2016, 2015 and 2014 as their effect would have been anti-dilutive (in thousands). 2016 2015 2014 Stock options to purchase common stock Restricted stock and restricted stock units |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accrued Expenses | |
Accrued Expenses | As of December 31, 2016 2015 (in thousands) Accrued clinical trial expenses $ $ Accrued compensation Accrued professional fees Accrued technical operation expenses Accrued interest payable Other accrued expenses $ $ |
Fixed Assets, net (Tables)
Fixed Assets, net (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fixed Assets, net | |
Schedule of fixed assets | As of December 31, Estimated Asset Description 2016 2015 (in thousands) Lab equipment 7 $ $ Furniture and fixtures 7 Computer hardware and software 3 - 5 Office equipment 7 Manufacturing equipment 7 Leasehold improvements lease term Less accumulated depreciation ) ) Fixed assets, net $ $ |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt | |
Components of the Company's debt balance | The following table presents the components of the Company's debt balance as of December 31, 2016 (in thousands): Debt: Note payable under A&R Loan Agreement $ Accretion of end of term charge Issuance fees paid to lender ) Current portion of long-term debt - Long-term debt $ |
Future principal repayments of the Company's long-term debt | Future principal repayments of the Company's long-term debt are as follows (in thousands): Year Ending in December 31: 2017 $ - 2018 2019 2020 $ |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Stock-Based Compensation | |
Summary of Company's grant date fair value and assumptions used in determining fair value of stock options | 2016 2015 2014 Volatility 74% - 77% 78% - 82% 83% - 86% Risk-free interest rate 1.00% - 1.90% 1.31% - 1.75% 1.46% - 1.83% Dividend yield 0.0% 0.0% 0.0% Expected option term (in years) 6.25 6.25 6.25 Weighted-average fair value of stock options granted $8.77 $14.20 $11.74 |
Summary of Company's stock option activity | Number of Weighted Weighted Aggregate Options outstanding at January 1, 2014 $ Granted Exercised ) Forfeited and expired ) Options outstanding at December 31, 2014 $ Vested and expected to vest at December 31, 2014 Exercisable at December 31, 2014 Options outstanding at December 31, 2014 $ Granted Exercised ) Forfeited and expired ) Options outstanding at December 31, 2015 $ Vested and expected to vest at December 31, 2015 Exercisable at December 31, 2015 Options outstanding at December 31, 2015 $ Granted Exercised ) Forfeited and expired ) Options outstanding at December 31, 2016 $ $ Vested and expected to vest at December 31, 2016 $ $ Exercisable at December 31, 2016 $ $ |
Summary of range of exercise prices and the number of stock options outstanding and exercisable | Outstanding as of December 31, 2016 Exercisable as of Range of Number of Weighted Weighted Number of Weighted $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ - - $ $ $ $ $ $ $ $ |
Summary of Company's RSU activity | Number of Weighted Outstanding at January 1, 2014 $ Granted Released ) Forfeited - - Outstanding at December 31, 2014 $ Granted Released ) Forfeited - - Outstanding at December 31, 2015 $ Granted Released ) Forfeited - - Outstanding at December 31, 2016 $ |
Summary of aggregate stock-based compensation recorded in the Consolidated Statements of Comprehensive Loss | 2016 2015 2014 (in millions) Research and development expenses $ $ $ General and administrative expenses Total(1) $ $ $ (1) Includes $1.7 million, $2.3 million and $2.4 million for the years ended December 31, 2016, 2015 and 2014, respectively, for the remeasurement of certain stock options and RSUs that occurred during May 2013. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Taxes | |
Schedule of Company's loss before income taxes in the US and globally | The Company's loss before income taxes in the US and globally was as follows (in thousands): Years ended December 31, 2016 2015 2014 US $ ) $ ) $ ) Foreign ) ) - Total $ ) $ ) $ ) |
Schedule of components income tax provision / (benefit) | The Company's income tax provision (benefit) consisted of the following (in thousands): Years ended December 31, 2016 2015 2014 Current: Federal $ - $ - $ - State ) ) Foreign - ) ) Deferred: Federal - - - State - - - Foreign - - - - - - Total $ $ ) $ ) |
Reconciliation between federal statutory tax rate and effective tax rate | Years Ended 2016 2015 2014 Statutory federal tax rate % % % Permanent items )% )% )% State income taxes, net of federal benefit % % )% R&D and other tax credits % % % Foreign income taxes )% )% % Change in state tax rate % % % Change in valuation allowance )% )% )% Other % % % Effective tax rate % % % |
Components of the deferred tax assets and liabilities | As of December 31, 2016 2015 (in thousands) Deferred tax assets: Net operating loss carryforwards $ $ General business credits Product license - Alternative minimum tax (AMT) credit Other Gross deferred tax assets $ $ Deferred tax liabilities: In-process research and development $ ) $ ) Deferred tax liabilities $ ) $ ) Net deferred tax assets $ $ Valuation allowance ) ) Net deferred tax assets $ - $ - |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies | |
Future minimum rental payments required under operating leases | Future minimum rental cash payments required under the Company's operating leases as of December 31, 2016 are as follows (in thousands): Year Ending in December 31: 2017 $ 2018 2019 2020 2021 $ |
Quarterly Financial Data (Una28
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Data (Unaudited) | |
Quarterly financial data (Unaudited) | The following table summarizes unaudited quarterly financial data for the years ended December 31, 2016 and 2015 (in thousands, except per share data). 2016 First Second Third Fourth Total* Revenues $ - $ - $ - $ - $ - Operating loss $ ) $ ) $ ) $ ) $ ) Net loss $ ) $ ) $ ) $ ) $ ) Basic and diluted net loss per share $ ) $ ) $ ) $ ) $ ) 2015 First Second Third Fourth Total Revenues $ - $ - $ - $ - $ - Operating loss $ ) $ ) $ ) $ ) $ ) Net loss $ ) $ ) $ ) $ ) $ ) Basic and diluted net loss per share $ ) $ ) $ ) $ ) $ ) * Includes a $30.0 million upfront payment to AstraZeneca under the AZ License Agreement related to INS1007, which was included as a component of research and development expense. |
Summary of Significant Accoun29
Summary of Significant Accounting Policies - Fixed Assets, Net (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Computer hardware and software | Minimum | |
Fixed Assets, Net | |
Estimated useful live of fixed assets | 3 years |
Computer hardware and software | Maximum | |
Fixed Assets, Net | |
Estimated useful live of fixed assets | 5 years |
Laboratory equipment, office equipment, manufacturing equipment and furniture and fixtures | |
Fixed Assets, Net | |
Estimated useful live of fixed assets | 7 years |
Summary of Significant Accoun30
Summary of Significant Accounting Policies - Fair Value Measurements (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Summary of Significant Accounting Policies | ||
Cash and cash equivalents | $ 162.6 | $ 282.9 |
Securities that were in an unrealized loss or gain position | $ 0 | $ 0 |
Summary of Significant Accoun31
Summary of Significant Accounting Policies - Income Taxes (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Income Taxes | ||
Uncertain tax positions | $ 0 | $ 0 |
Summary of Significant Accoun32
Summary of Significant Accounting Policies - Net Loss Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Numerator: | |||||||||||
Net loss | $ (176,273) | $ (118,183) | $ (79,159) | ||||||||
Denominator: | |||||||||||
Weighted average common shares used in calculation of basic net loss per share: | 61,892 | 58,633 | 43,095 | ||||||||
Effect of dilutive securities: | |||||||||||
Weighted average common shares outstanding used in calculation of diluted net loss per share | 61,892 | 58,633 | 43,095 | ||||||||
Net loss per share: | |||||||||||
Basic and diluted (in dollars per share) | $ (1.10) | $ (0.61) | $ (0.59) | $ (0.54) | $ (0.51) | $ (0.50) | $ (0.47) | $ (0.55) | $ (2.85) | $ (2.02) | $ (1.84) |
Summary of Significant Accoun33
Summary of Significant Accounting Policies - Anti-dilutive Securities (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Stock options to purchase common stock | |||
Anti-dilutive securities excluded from computations of diluted weighted-average common shares outstanding | |||
Potentially dilutive securities excluded from computations of diluted weighted-average shares outstanding (in shares) | 7,117 | 5,274 | 4,400 |
Restricted stock and restricted stock units | |||
Anti-dilutive securities excluded from computations of diluted weighted-average common shares outstanding | |||
Potentially dilutive securities excluded from computations of diluted weighted-average shares outstanding (in shares) | 89 | 44 | 21 |
Summary of Significant Accoun34
Summary of Significant Accounting Policies - Segment Information (Details) | 12 Months Ended |
Dec. 31, 2016item | |
Segment Information | |
Number of reportable segments | 1 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Accrued Expenses | ||
Accrued clinical trial expenses | $ 7,071 | $ 4,331 |
Accrued compensation | 6,937 | 4,302 |
Accrued professional fees | 1,604 | 1,202 |
Accrued technical operation expenses | 591 | 702 |
Accrued interest payable | 438 | 199 |
Other accrued expenses | 181 | 259 |
Total accrued expenses | $ 16,822 | $ 10,995 |
Identifiable Intangible Assets
Identifiable Intangible Assets (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
IPRD | ||
Identifiable Intangible Assets | ||
Total intangible asset | $ 58.2 | $ 58.2 |
Fixed Assets, net (Details)
Fixed Assets, net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Property, Plant and Equipment | |||
Fixed assets, gross | $ 17,764 | $ 13,398 | |
Less accumulated depreciation | (7,744) | (5,306) | |
Fixed assets, net | 10,020 | 8,092 | |
Depreciation and amortization | 2,438 | 1,982 | $ 1,073 |
Lab equipment | |||
Property, Plant and Equipment | |||
Fixed assets, gross | $ 5,662 | 3,957 | |
Estimated Useful Life(years) | 7 years | ||
Furniture and fixtures | |||
Property, Plant and Equipment | |||
Fixed assets, gross | $ 1,903 | 1,127 | |
Estimated Useful Life(years) | 7 years | ||
Computer hardware and software | |||
Property, Plant and Equipment | |||
Fixed assets, gross | $ 2,251 | 1,969 | |
Computer hardware and software | Minimum | |||
Property, Plant and Equipment | |||
Estimated Useful Life(years) | 3 years | ||
Computer hardware and software | Maximum | |||
Property, Plant and Equipment | |||
Estimated Useful Life(years) | 5 years | ||
Office equipment | |||
Property, Plant and Equipment | |||
Fixed assets, gross | $ 65 | 65 | |
Estimated Useful Life(years) | 7 years | ||
Manufacturing equipment | |||
Property, Plant and Equipment | |||
Fixed assets, gross | $ 1,148 | 980 | |
Estimated Useful Life(years) | 7 years | ||
Leasehold improvements | |||
Property, Plant and Equipment | |||
Fixed assets, gross | $ 6,735 | $ 5,300 |
Debt - A&R Loan Agreement (Deta
Debt - A&R Loan Agreement (Details) - USD ($) | Sep. 30, 2016 | Jan. 31, 2016 | Dec. 31, 2016 | Oct. 31, 2016 | Sep. 29, 2016 | Jun. 29, 2012 |
Debt | ||||||
Accretion of end of term charge | $ 171,000 | |||||
Payment of the end of term charge | $ 390,000 | |||||
Hercules | ||||||
Debt | ||||||
Maximum borrowing capacity of term loan | $ 25,000,000 | |||||
Interest rate (as a percent) | 9.25% | |||||
A&R Loan Agreement | ||||||
Debt | ||||||
Maximum borrowing capacity of term loan | $ 55,000,000 | |||||
Amount outstanding | 35,000,000 | $ 25,000,000 | ||||
Amount of borrowings during the period | $ 10,000,000 | $ 20,000,000 | ||||
Facility fee paid (as a percent) | 0.375% | |||||
Interest rate (as a percent) | 9.25% | |||||
Backend fee (as a percent) | 4.15% | |||||
Facility fee | $ 337,500 | |||||
Maximum interest-only extension period (in months) | 6 months | |||||
Limit on lender's participation rights in certain future private equity financings | $ 2,000,000 | |||||
Additional interest rate in event of default (as a percent) | 5.00% | |||||
A&R Loan Agreement | License Agreement with AstraZeneca | ||||||
Debt | ||||||
Amount outstanding | $ 20,000,000 | |||||
A&R Loan Agreement | Prime Rate | ||||||
Debt | ||||||
Variable interest rate | prime rate | |||||
Basis spread (as a percent) | (4.50%) | |||||
A&R Loan Agreement | Minimum | ||||||
Debt | ||||||
Minimum cash liquidity requirement to be consolidated | $ 25,000,000 | |||||
Amount of cash proceeds required to extend maturity date of loan | $ 75,000,000 |
Debt - Components and Principal
Debt - Components and Principal Payments (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Debt | ||
Note payable under A&R Loan Agreement | $ 55,000 | |
Accretion of end of term charge | 171 | |
Issuance fees paid to lender | (380) | |
Long-term debt | 54,791 | $ 22,027 |
Future principal repayments of the long term debt | ||
2,018 | 3,271 | |
2,019 | 20,753 | |
2,020 | 30,976 | |
Total | $ 55,000 |
Shareholders' Equity - Common a
Shareholders' Equity - Common and Preferred Stock (Details) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
Shareholders' Equity | ||
Common stock, authorized shares | 500,000,000 | 500,000,000 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, issued shares | 62,019,889 | 61,813,995 |
Common stock, outstanding shares | 62,019,889 | 61,813,995 |
Preferred stock | ||
Preferred stock, authorized | 200,000,000 | 200,000,000 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Shareholders' Equity - Stock Di
Shareholders' Equity - Stock Disclosures and Warrants (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Apr. 30, 2015 | Dec. 31, 2014 | Aug. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2016 | |
Common Stock | ||||||
Number of shares issued under underwritten public offering | 11,500,000 | 10,235,000 | ||||
Number of share's exercise in full of over-allotment option by underwriter | 1,500,000 | 1,335,000 | ||||
Shares price (in dollars per share) | $ 20.65 | $ 11.25 | ||||
Underwriter's discount and offering expenses | $ 14,500 | $ 7,100 | ||||
Net proceeds from the sale of shares | $ 222,900 | $ 108,000 | $ 222,942 | $ 109,013 | ||
Stock options to purchase common stock | ||||||
Common Stock | ||||||
Common stock shares reserved for issuance | 7,116,706 | |||||
Unvested restricted stock units | ||||||
Common Stock | ||||||
Common stock shares reserved for issuance | 89,194 | |||||
Hercules | ||||||
Common Stock | ||||||
Number of shares issued under underwritten public offering | 70,771 | |||||
Shares price (in dollars per share) | $ 14.13 | $ 14.13 | ||||
Net proceeds from the sale of shares | $ 1,000 |
Stock-Based Compensation - Disc
Stock-Based Compensation - Disclosures (Details) - shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Stock-Based Compensation | ||
Shares of common stock, maximum authorized for issuance | 5,000,000 | |
Shares available for grant | 2,266,465 | |
Inducement stock option granted to new employees | 88,060 | 227,000 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Options (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Number of Shares | ||||
Options outstanding (in shares) | 4,400,106 | 5,273,722 | 4,400,106 | 3,632,996 |
Granted (in shares) | 2,532,675 | 1,902,850 | 1,600,452 | |
Exercised (in shares) | (162,340) | (481,140) | (283,057) | |
Forfeited and expired (in shares) | (527,351) | (548,094) | (550,285) | |
Options outstanding (in shares) | 7,116,706 | 5,273,722 | 4,400,106 | |
Vested and expected to vest (in shares) | 6,850,658 | 5,059,645 | 3,891,511 | |
Exercisable (in shares) | 3,113,998 | 1,991,141 | 1,235,710 | |
Weighted Average Exercise Price | ||||
Options outstanding (in dollars per share) | $ 10.59 | $ 13.64 | $ 10.59 | $ 7.94 |
Granted (in dollars per share) | 12.96 | 20.45 | 16.10 | |
Exercised (in dollars per share) | 6.68 | 10.62 | 6.11 | |
Forfeited and expired (in dollars per share) | 17.08 | 15.43 | 11.42 | |
Options outstanding (in dollars per share) | 13.30 | 13.64 | 10.59 | |
Vested and expected to vest (in dollars per share) | 13.25 | 13.46 | 10.32 | |
Exercisable (in dollars per share) | $ 11.28 | $ 8.70 | $ 6.90 | |
Weighted Average Remaining Contractual Life in Years | ||||
Options outstanding | 7 years 8 months 16 days | |||
Vested and expected to vest | 7 years 8 months 1 day | |||
Exercisable | 6 years 6 months 29 days | |||
Aggregate Intrinsic Value | ||||
Options outstanding (in dollars) | $ 16,293 | |||
Vested and expected to vest (in dollars) | 16,009 | |||
Exercisable (in dollars) | $ 12,368 | |||
Stock options to purchase common stock | ||||
Fair value and assumptions used in determining fair value of stock options | ||||
Dividend yield (as a percent) | 0.00% | 0.00% | 0.00% | |
Expected option term | 6 years 3 months | 6 years 3 months | 6 years 3 months | |
Weighted-average fair value of stock options granted (in dollars per share) | $ 8.77 | $ 14.20 | $ 11.74 | |
Stock options to purchase common stock | Minimum | ||||
Fair value and assumptions used in determining fair value of stock options | ||||
Volatility (as a percent) | 74.00% | 78.00% | 83.00% | |
Risk-free interest rate (as a percent) | 1.00% | 1.31% | 1.46% | |
Stock options to purchase common stock | Maximum | ||||
Fair value and assumptions used in determining fair value of stock options | ||||
Volatility (as a percent) | 77.00% | 82.00% | 86.00% | |
Risk-free interest rate (as a percent) | 1.90% | 1.75% | 1.83% | |
Performance-based options | ||||
Number of Shares | ||||
Options outstanding (in shares) | 158,334 | |||
Aggregate Intrinsic Value | ||||
Non-cash compensation expense | $ 1,500 |
Stock-Based Compensation - Rang
Stock-Based Compensation - Range of Exercise Prices (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Stock options to purchase common stock | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range | |||
Total intrinsic value of stock options exercised during the period | $ 1 | $ 4.7 | $ 2.5 |
Unrecognized compensation expense related to unvested stock options | $ 26.8 | ||
Expected weighted average period for recognizing unrecognized compensation expense | 2 years 8 months 12 days | ||
Performance-based options | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range | |||
Unrecognized compensation expense related to unvested stock options | $ 1.2 | ||
$3.03 to $3.03 | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range | |||
Range of Exercise Prices lower range limit (in dollars per share) | $ 3.03 | ||
Range of Exercise Prices upper range limit (in dollars per share) | $ 3.03 | ||
Number of Options outstanding (in shares) | 124,482 | ||
Weighted Average Remaining Contractual Term | 4 years 11 months 9 days | ||
Outstanding Options, Weighted Average Exercise Price (in dollars per share) | $ 3.03 | ||
Number of Options exercisable (in shares) | 124,482 | ||
Exercisable Options, Weighted Average Exercise Price (in dollars per share) | $ 3.03 | ||
$3.29 to $3.40 | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range | |||
Range of Exercise Prices lower range limit (in dollars per share) | 3.29 | ||
Range of Exercise Prices upper range limit (in dollars per share) | $ 3.40 | ||
Number of Options outstanding (in shares) | 718,214 | ||
Weighted Average Remaining Contractual Term | 5 years 8 months 5 days | ||
Outstanding Options, Weighted Average Exercise Price (in dollars per share) | $ 3.40 | ||
Number of Options exercisable (in shares) | 718,214 | ||
Exercisable Options, Weighted Average Exercise Price (in dollars per share) | $ 3.40 | ||
$3.60 to $6.90 | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range | |||
Range of Exercise Prices lower range limit (in dollars per share) | 3.60 | ||
Range of Exercise Prices upper range limit (in dollars per share) | $ 6.90 | ||
Number of Options outstanding (in shares) | 519,003 | ||
Weighted Average Remaining Contractual Term | 5 years 10 months 28 days | ||
Outstanding Options, Weighted Average Exercise Price (in dollars per share) | $ 5.94 | ||
Number of Options exercisable (in shares) | 444,282 | ||
Exercisable Options, Weighted Average Exercise Price (in dollars per share) | $ 5.78 | ||
$6.96 to $10.85 | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range | |||
Range of Exercise Prices lower range limit (in dollars per share) | 6.96 | ||
Range of Exercise Prices upper range limit (in dollars per share) | $ 10.85 | ||
Number of Options outstanding (in shares) | 1,193,996 | ||
Weighted Average Remaining Contractual Term | 9 years 3 months 7 days | ||
Outstanding Options, Weighted Average Exercise Price (in dollars per share) | $ 10.75 | ||
Number of Options exercisable (in shares) | 16,863 | ||
Exercisable Options, Weighted Average Exercise Price (in dollars per share) | $ 7.44 | ||
$11.14 to $12.44 | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range | |||
Range of Exercise Prices lower range limit (in dollars per share) | 11.14 | ||
Range of Exercise Prices upper range limit (in dollars per share) | $ 12.44 | ||
Number of Options outstanding (in shares) | 779,695 | ||
Weighted Average Remaining Contractual Term | 7 years 2 months 9 days | ||
Outstanding Options, Weighted Average Exercise Price (in dollars per share) | $ 12.01 | ||
Number of Options exercisable (in shares) | 413,477 | ||
Exercisable Options, Weighted Average Exercise Price (in dollars per share) | $ 12.08 | ||
$12.45 to $14.24 | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range | |||
Range of Exercise Prices lower range limit (in dollars per share) | 12.45 | ||
Range of Exercise Prices upper range limit (in dollars per share) | $ 14.24 | ||
Number of Options outstanding (in shares) | 842,127 | ||
Weighted Average Remaining Contractual Term | 7 years 5 months 19 days | ||
Outstanding Options, Weighted Average Exercise Price (in dollars per share) | $ 13.27 | ||
Number of Options exercisable (in shares) | 481,611 | ||
Exercisable Options, Weighted Average Exercise Price (in dollars per share) | $ 13.35 | ||
$14.32 to $16.09 | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range | |||
Range of Exercise Prices lower range limit (in dollars per share) | 14.32 | ||
Range of Exercise Prices upper range limit (in dollars per share) | $ 16.09 | ||
Number of Options outstanding (in shares) | 598,364 | ||
Weighted Average Remaining Contractual Term | 8 years 22 days | ||
Outstanding Options, Weighted Average Exercise Price (in dollars per share) | $ 15.68 | ||
Number of Options exercisable (in shares) | 214,516 | ||
Exercisable Options, Weighted Average Exercise Price (in dollars per share) | $ 15.82 | ||
$16.16 to $16.16 | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range | |||
Range of Exercise Prices lower range limit (in dollars per share) | 16.16 | ||
Range of Exercise Prices upper range limit (in dollars per share) | $ 16.16 | ||
Number of Options outstanding (in shares) | 739,150 | ||
Weighted Average Remaining Contractual Term | 8 years 11 months 23 days | ||
Outstanding Options, Weighted Average Exercise Price (in dollars per share) | $ 16.16 | ||
$16.19 to $20.92 | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range | |||
Range of Exercise Prices lower range limit (in dollars per share) | 16.19 | ||
Range of Exercise Prices upper range limit (in dollars per share) | $ 20.92 | ||
Number of Options outstanding (in shares) | 727,250 | ||
Weighted Average Remaining Contractual Term | 7 years 6 months 22 days | ||
Outstanding Options, Weighted Average Exercise Price (in dollars per share) | $ 19.42 | ||
Number of Options exercisable (in shares) | 368,638 | ||
Exercisable Options, Weighted Average Exercise Price (in dollars per share) | $ 19.56 | ||
$21.20 to $27.38 | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range | |||
Range of Exercise Prices lower range limit (in dollars per share) | 21.20 | ||
Range of Exercise Prices upper range limit (in dollars per share) | $ 27.38 | ||
Number of Options outstanding (in shares) | 874,425 | ||
Weighted Average Remaining Contractual Term | 8 years 2 months 27 days | ||
Outstanding Options, Weighted Average Exercise Price (in dollars per share) | $ 22.82 | ||
Number of Options exercisable (in shares) | 331,915 | ||
Exercisable Options, Weighted Average Exercise Price (in dollars per share) | $ 22.83 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock and Restricted Stock Units (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Stock options and RSUs | |||
Weighted Average Grant Price | |||
Allocated share-based compensation expense | $ 18 | $ 15.6 | $ 11.3 |
Stock-based compensation expense that resulted from the remeasurement of awards | 1.7 | 2.3 | 2.4 |
Stock options and RSUs | Research and development expenses | |||
Weighted Average Grant Price | |||
Allocated share-based compensation expense | 6.2 | 4 | 4.5 |
Stock options and RSUs | General and administrative expenses | |||
Weighted Average Grant Price | |||
Allocated share-based compensation expense | $ 11.8 | $ 11.6 | $ 6.8 |
Unvested restricted stock units | |||
Number of RSUs | |||
Outstanding, beginning balance (in shares) | 43,554 | 20,502 | 92,641 |
Granted (in shares) | 89,194 | 49,776 | 20,502 |
Released (in shares) | (43,554) | (26,724) | (92,641) |
Outstanding, ending balance (in shares) | 89,194 | 43,554 | 20,502 |
Weighted Average Grant Price | |||
Outstanding weighted average grant price (in dollars per share) | $ 16.07 | $ 19.47 | $ 6.27 |
Granted (in dollars per share) | 10.85 | 16.07 | 19.47 |
Released (in dollars per share) | 16.07 | 18.68 | 6.27 |
Outstanding weighted average grant price (in dollars per share) | $ 10.85 | $ 16.07 | $ 19.47 |
Restricted stock and restricted stock units | |||
Stock Based Compensation disclosures | |||
Number of common shares each award holder is entitled to receive | 1 |
Income Taxes (Details)
Income Taxes (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
NOL carryforwards | |||
Increase in valuation allowance | $ 68,400 | $ 52,300 | |
Unrecognized tax benefits disclosures | |||
Unrecognized tax benefits, interest and penalties accrued | 0 | 0 | |
Schedule of components of loss before income taxes | |||
US | (140,354) | (100,278) | $ (89,581) |
Foreign | (35,821) | (19,876) | |
Loss before income taxes | (176,175) | (120,154) | (89,581) |
Current: | |||
State | 3 | (2,015) | (10,422) |
Foreign | 95 | 44 | |
Total current | 98 | (1,971) | (10,422) |
Deferred: | |||
Total | $ 98 | $ (1,971) | $ (10,422) |
Differences between the U.S. federal statutory tax rate and effective tax rate | |||
Statutory federal tax rate (as a percent) | 34.00% | 34.00% | 34.00% |
Permanent items (as a percent) | (3.00%) | (4.00%) | (3.00%) |
State income taxes, net of federal benefit (as a percent) | 4.00% | 4.00% | (7.00%) |
R&D and other tax credits (as a percent) | 8.00% | 12.00% | 5.00% |
Foreign income taxes (as a percent) | (4.00%) | (1.00%) | 0.00% |
Change in state tax rate (as a percent) | 0.00% | 0.00% | 0.00% |
Change in valuation allowance (as a percent) | (39.00%) | (43.00%) | (17.00%) |
Other (as a percent) | 0.00% | 0.00% | 0.00% |
Effective tax rate (as a percent) | 0.00% | 2.00% | 12.00% |
Deferred tax assets: | |||
Net operating loss carryforwards | $ 228,729 | $ 195,052 | |
General business credits | 50,648 | 33,360 | |
Product license | 11,783 | ||
Alternative minimum tax (AMT) credit | 418 | 418 | |
Other | 16,265 | 10,569 | |
Gross deferred tax assets | 307,843 | 239,399 | |
Deferred tax liabilities: | |||
In-process research and development | (23,245) | (23,245) | |
Deferred tax liabilities | (23,245) | (23,245) | |
Net deferred tax assets | 284,598 | 216,154 | |
Valuation allowance | (284,598) | (216,154) | |
New Jersey | |||
NOL carryforwards | |||
State NOLs sold under the State of New Jersey's Technology Business Tax Certificate Transfer Program | 24,300 | $ 110,500 | |
Cash proceeds from sale of NOLs, net of commissions | $ 2,000 | $ 10,400 | |
Net operating loss carryforwards available to offset future taxable income | $ 193,100 | ||
Percentage Company is resident of NJ | 100 | ||
Federal | |||
NOL carryforwards | |||
Net operating loss carryforwards for income tax purposes | $ 619,000 | ||
Net operating loss carryforwards available to offset future taxable income | $ 440,700 | ||
Period of time for measuring ownership changes under Section 382 | 3 years |
License and Other Agreements (D
License and Other Agreements (Details) € in Millions, $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||
Oct. 31, 2016USD ($) | Sep. 30, 2015USD ($) | Jul. 31, 2014 | Feb. 28, 2014 | Apr. 30, 2008EUR (€) | Dec. 31, 2016USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2009USD ($) | Dec. 31, 2004USD ($) | Nov. 30, 2015USD ($) | |
Respironics Agreement | ||||||||||
Collaboration Agreements | ||||||||||
Aggregate payment upon the achievement of certain clinical milestones | $ 7.6 | |||||||||
CFFT | ||||||||||
Collaboration Agreements | ||||||||||
Compensation earned under research funding agreements with CFFT | $ 2.2 | $ 1.7 | ||||||||
Royalty payable on approval of ARIKAYCE as commercialized drug | $ 13.4 | $ 13.4 | ||||||||
Royalty payment period | 3 years | |||||||||
Period for meeting sales milestones for additional royalty payments | 5 years | |||||||||
Royalty payable on meeting certain sales milestones | 3.9 | $ 3.9 | ||||||||
Therapure | ||||||||||
Collaboration Agreements | ||||||||||
Initial term of contract manufacturing agreement | 5 years | |||||||||
Period of each automatic renewal of contract manufacturing agreement | 2 years | |||||||||
Written notice period required for termination of contract manufacturing agreement | 2 years | |||||||||
Therapure | Minimum | ||||||||||
Collaboration Agreements | ||||||||||
Advance notice period for termination of contract manufacturing agreement by the entity | 180 days | |||||||||
PARI Agreement | ||||||||||
Collaboration Agreements | ||||||||||
Initial term of contract manufacturing agreement | 15 years | |||||||||
Additional term of contract manufacturing agreement | 5 years | |||||||||
PARI Agreement | Minimum | ||||||||||
Collaboration Agreements | ||||||||||
Written notice period required for termination of contract manufacturing agreement | 1 year | |||||||||
PARI Agreement | Maximum | ||||||||||
Collaboration Agreements | ||||||||||
Upfront payment | € | € 4.3 | |||||||||
Fill/Finish Agreement | ||||||||||
Collaboration Agreements | ||||||||||
Minimum obligation | $ 2.7 | |||||||||
Extension period | 2 years | |||||||||
Period prior to expiration for extension | 1 year | |||||||||
License Agreement with AstraZeneca | ||||||||||
Collaboration Agreements | ||||||||||
Royalty payment | $ 35 | |||||||||
Annual net sales | 1,000 | |||||||||
License Agreement with AstraZeneca | Research and development expenses | ||||||||||
Collaboration Agreements | ||||||||||
Upfront payment | $ 30 | $ 30 | ||||||||
License Agreement with AstraZeneca | Maximum | ||||||||||
Collaboration Agreements | ||||||||||
Aggregate payment upon the achievement of certain clinical milestones | 85 | |||||||||
Additional contingent payments upon second indication to develop INS1007 | $ 42.5 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Commitments | |
Future minimum rental payments under leases | $ 5,219 |
Bridgewater, NJ | |
Commitments | |
Future minimum rental payments under leases | 3,000 |
Future minimum rental payments for additional laboratory space | $ 2,100 |
Commitments and Contingencies49
Commitments and Contingencies - Minimum Rental Payments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Commitments and Contingencies | |||
Rent expense charged to operations | $ 1,200 | $ 800 | $ 1,300 |
Future minimum rental payments under operating leases | |||
2,017 | 1,445 | ||
2,018 | 1,482 | ||
2,019 | 1,388 | ||
2,020 | 443 | ||
2,021 | 461 | ||
Total | $ 5,219 |
Quarterly Financial Data (Una50
Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Operating loss | $ (67,051) | $ (37,149) | $ (36,133) | $ (33,067) | $ (32,590) | $ (30,245) | $ (27,952) | $ (26,706) | $ (173,400) | $ (117,493) | $ (87,365) |
Net loss | $ (68,402) | $ (37,760) | $ (36,579) | $ (33,532) | $ (31,245) | $ (30,962) | $ (28,607) | $ (27,369) | $ (176,273) | $ (118,183) | $ (79,159) |
Basic and diluted net loss per share (in dollars per share) | $ (1.10) | $ (0.61) | $ (0.59) | $ (0.54) | $ (0.51) | $ (0.50) | $ (0.47) | $ (0.55) | $ (2.85) | $ (2.02) | $ (1.84) |
Research and development expenses | License Agreement with AstraZeneca | |||||||||||
Upfront payment | $ 30,000 | $ 30,000 |
Retirement Plan (Details)
Retirement Plan (Details) - USD ($) $ in Millions | 12 Months Ended | 21 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2016 | |
Retirement Plan | |||
Percentage of employer match | 100.00% | ||
Employer contribution to retirement plan | $ 0.6 | $ 0.4 | |
Maximum | |||
Retirement Plan | |||
Percentage of employees' gross pay which employer contributes a matching contribution | 3.00% |