Insmed (INSM) 10-Q 2 May 18 2018 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2018	Apr. 30, 2018
Document and Entity Information
Entity Registrant Name	INSMED INC
Entity Central Index Key	1,104,506
Document Type	10-Q
Document Period End Date	Mar. 31, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		76,623,136
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q1

Consolidated Balance Sheets (un

Consolidated Balance Sheets (unaudited) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 686,581	$ 381,165
Prepaid expenses and other current assets	9,832	8,279
Total current assets	696,413	389,444
In-process research and development	58,200	58,200
Fixed assets, net	15,816	12,432
Other assets	2,724	1,971
Total assets	773,153	462,047
Current liabilities:
Accounts payable	13,176	14,671
Accrued expenses	21,074	29,339
Other current liabilities	556	646
Total current liabilities	34,806	44,656
Long-term debt, net	302,706	55,567
Other long-term liabilities	785	765
Total liabilities	338,297	100,988
Shareholders’ equity:
Common stock, $0.01 par value; 500,000,000 authorized shares, 76,623,136 and 76,610,508 issued and outstanding shares at March 31, 2018 and December 31, 2017, respectively	766	766
Additional paid-in capital	1,460,460	1,318,181
Accumulated deficit	(1,026,409)	(957,885)
Accumulated other comprehensive income (loss)	39	(3)
Total shareholders’ equity	434,856	361,059
Total liabilities and shareholders’ equity	$ 773,153	$ 462,047

Consolidated Balance Sheets (u3

Consolidated Balance Sheets (unaudited) (Parenthetical) - $ / shares	Mar. 31, 2018	Dec. 31, 2017
Statement of Financial Position [Abstract]
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, authorized shares (in shares)	500,000,000	500,000,000
Common stock, issued shares (in shares)	76,623,136	76,610,508
Common stock, outstanding shares (in shares)	76,623,136	76,610,508

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Loss (unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Statement of Comprehensive Income [Abstract]
Revenues	$ 0	$ 0
Operating expenses:
Research and development	30,098	22,254
General and administrative	32,653	13,715
Total operating expenses	62,751	35,969
Operating loss	(62,751)	(35,969)
Investment income	2,040	154
Interest expense	(5,642)	(1,474)
Loss on extinguishment of debt	(2,209)	0
Other income (expense), net	86	(95)
Loss before income taxes	(68,476)	(37,384)
Provision for income taxes	48	30
Net loss	$ (68,524)	$ (37,414)
Basic and diluted net loss per share	$ (0.89)	$ (0.60)
Weighted average basic and diluted common shares outstanding	76,619	62,041
Net loss	$ (68,524)	$ (37,414)
Other comprehensive income:
Foreign currency translation gains	42	18
Total comprehensive loss	$ (68,482)	$ (37,396)

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Operating activities
Net loss	$ (68,524)	$ (37,414)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	769	716
Stock-based compensation expense	5,674	4,032
Amortization of debt issuance costs	299	31
Accretion of debt discount	3,021	0
Accretion of back-end fee on debt	50	171
Changes in operating assets and liabilities:
Prepaid expenses and other assets	(2,217)	352
Accounts payable	(828)	(2,026)
Accrued expenses and other	(6,283)	(2,774)
Net cash used in operating activities	(68,039)	(36,912)
Investing activities
Purchase of fixed assets	(5,365)	(417)
Net cash used in investing activities	(5,365)	(417)
Financing activities
Proceeds from exercise of stock options	142	565
Loss on extinguishment of debt	(2,209)	0
Payment of debt	(55,000)	0
Proceeds from issuance of 1.75% convertible senior notes due 2025	450,000	0
Payment of debt issuance costs	(14,141)	0
Net cash provided by financing activities	378,792	565
Effect of exchange rates on cash and cash equivalents	28	12
Net increase (decrease) in cash and cash equivalents	305,416	(36,752)
Cash and cash equivalents at beginning of period	381,165	162,591
Cash and cash equivalents at end of period	686,581	125,839
Supplemental disclosures of cash flow information:
Cash paid for interest	1,275	1,273
Cash paid for income taxes	$ 54	$ 17

Consolidated Statements of Cas6

Consolidated Statements of Cash Flows (unaudited) (Parenthetical)	Jan. 31, 2018
Convertible Notes | 1.75 convertible senior notes due 2025
Interest rate (as a percent)	1.75%

The Company and Basis of Presen

The Company and Basis of Presentation	3 Months Ended
	Mar. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
The Company and Basis of Presentation	The Company and Basis of Presentation Insmed is a global biopharmaceutical company focused on the unmet needs of patients with rare diseases. The Company's lead product candidate is amikacin liposome inhalation suspension (ALIS), which is in late-stage development for adult patients with treatment refractory nontuberculous mycobacteria (NTM) lung disease caused by Mycobacterium avium complex (MAC), a rare and often chronic infection that can cause irreversible lung damage and can be fatal. Our earlier clinical-stage pipeline includes INS1007 and INS1009. INS1007 is a novel oral, reversible inhibitor of dipeptidyl peptidase 1 (DPP1), an enzyme responsible for activating neutrophil serine proteases, which are implicated in the pathology of chronic inflammatory lung diseases, such as non-cystic fibrosis (non-CF) bronchiectasis. INS1009 is an inhaled nanoparticle formulation of a treprostinil prodrug that may offer a differentiated product profile for rare pulmonary disorders, including pulmonary arterial hypertension (PAH). The Company was incorporated in the Commonwealth of Virginia on November 29, 1999 and its principal executive offices are in Bridgewater, New Jersey. The Company has legal entities in the United States (US), Ireland, Germany, France, the United Kingdom (UK), the Netherlands, and Japan. All intercompany transactions and balances have been eliminated in consolidation. The accompanying unaudited interim consolidated financial statements have been prepared pursuant to the rules and regulations for reporting on Form 10-Q. Accordingly, certain information and disclosures required by accounting principles generally accepted in the US for complete consolidated financial statements are not included herein. The unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 . The results of operations of any interim period are not necessarily indicative of the results of operations for the full year. The unaudited interim consolidated financial information presented herein reflects all normal adjustments that are, in the opinion of management, necessary for a fair statement of the financial position, results of operations and cash flows for the periods presented.

Summary of Significant Accounti

Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2018
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	Summary of Significant Accounting Policies The following are the required interim disclosure updates to the Company's significant accounting policies described in Note 2 of the notes to the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 : 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 judgment 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 financial assets and liabilities which were measured at fair value as of March 31, 2018 and December 31, 2017 were Level 1 and such assets were comprised of cash and cash equivalents of $686.6 million and $381.2 million , respectively. 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 an original maturity of three months or less from the date of purchase. As of March 31, 2018 , the Company's cash and cash equivalents balance included US treasury bills of $180.0 million . 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 the three months ended March 31, 2018 and 2017 , respectively. As of March 31, 2018 and December 31, 2017 , the Company held no securities that were in an unrealized gain or loss 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. Net Loss Per Share - Basic net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted net loss per 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, restricted stock units (RSUs) and convertible debt securities would be anti-dilutive as the Company incurred a net loss. 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 common shares used to compute basic and diluted net loss per share for the three months ended March 31, 2018 and 2017 : Three Months Ended March 31, 2018 2017 (in thousands, except per share amounts) Numerator: Net loss $ (68,524 ) $ (37,414 ) Denominator: Weighted average common shares used in calculation of basic net loss per share: 76,619 62,041 Effect of dilutive securities: Common stock options — — RSUs — — Convertible debt securities — — Weighted average common shares outstanding used in calculation of diluted net loss per share 76,619 62,041 Net loss per share: Basic and Diluted $ (0.89 ) $ (0.60 ) The following potentially dilutive securities have been excluded from the computations of diluted weighted average common shares outstanding as of March 31, 2018 and 2017 as their effect would have been anti-dilutive (in thousands): As of March 31, 2018 2017 Stock options to purchase common stock 9,866 7,719 Unvested RSUs 234 89 Convertible debt securities 11,492 — Recently Adopted Accounting Pronouncements - In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments , which addressed eight specific cash flow issues with the objective of reducing the existing diversity in practice. Among the updates, the standard requires debt extinguishment costs to be classified as cash outflows for financing activities. This standard update is effective as of the first quarter of 2018. As a result of the adoption of the standard, in the first quarter of 2018, the Company reported a $2.2 million loss on extinguishment of debt in the financing activities section of its consolidated statement of cash flows. The Company had no material debt extinguishment costs prior to the first quarter of 2018. There were no other significant impacts as a result of adopting this standard. In August 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern , which defines management’s responsibility to perform interim and annual assessments of an entity’s ability to continue as a going concern, and to provide related footnote disclosures if there is substantial doubt about its ability to continue as a going concern. The new standard was effective for the annual period ending after December 15, 2016, and for interim periods thereafter. The Company adopted ASU 2014-15 in the fourth quarter of 2016, which had no impact on the Company’s consolidated financial statements. The interim assessment during the first quarter of 2018 did not have an impact on the consolidated financial statements. The Company had $686.6 million in cash and cash equivalents as of March 31, 2018 and reported a net loss of $68.5 million for the three months ended March 31, 2018 . Historically, the Company has funded its operations through public offerings of equity securities and debt financings. To date, the Company has not generated material revenue from ALIS. The Company does not expect to generate material revenue unless or until marketing approval is received for ALIS. Accordingly, the Company expects to continue to incur losses while funding research and development (R&D) activities, regulatory submissions, potential commercial launch activities and general and administrative expenses. The Company expects its future cash requirements to be substantial, and the Company may need to raise additional capital to fund operations, to develop and commercialize ALIS, to develop INS1007 and INS1009 and to develop, acquire, in-license or co-promote other products that address orphan or rare diseases. ASU 2014-15 requires the Company to evaluate whether it has sufficient resources to fund operations for 12 months from the filing date of this Quarterly Report on Form 10-Q without regard to whether or not it can raise capital in the future. The Company believes it currently has sufficient funds to meet its financial needs for at least the next 12 months. In September 2017, the Company completed an underwritten offering of 14.1 million shares of its common stock for cash proceeds of $377.7 million , net of fees and expenses related to the offering. Further, in January 2018, the Company completed an underwritten public offering of 1.75% convertible senior notes due 2025 (the Convertible Notes) pursuant to an indenture, dated as of January 26, 2018, between the Company and Wells Fargo Bank, National Association (Wells Fargo), as trustee, as supplemented by the first supplemental indenture, dated January 26, 2018, between the Company and Wells Fargo (as supplemented, the Indenture). The Company sold $450.0 million aggregate principal amount of Convertible Notes, including the exercise in full of the underwriters' option to purchase additional Convertible Notes of $50.0 million . The Company's net proceeds from the offering, after deducting underwriting discounts and commissions and other offering expenses of $14.1 million , were approximately $435.9 million . The source, timing and availability of any future financing or other transaction will depend principally upon continued progress in the Company’s regulatory, development and pre-commercial activities. Any equity or debt financing will also be contingent upon equity and debt market conditions and interest rates at the time. If the Company is unable to obtain sufficient additional funds when required, the Company may be forced to delay, restrict or eliminate all or a portion of its R&D programs, pre-commercialization activities, or dispose of assets or technology. In May 2014, the FASB issued ASU 2014-9, Revenue from Contracts with Customers (Topic 606) which amended the existing accounting standards for revenue recognition. ASU 2014-9 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 adopted ASU 2014-9 in the first quarter of 2018 and the impact of adoption is not material to its consolidated financial statements. New Accounting Pronouncements (Not Yet Adopted) —In February 2016, the FASB issued ASU 2016-2, 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 2016-2 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 2016-2 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 2016-2 in the first quarter of 2019 and is in the process of evaluating the impact of adoption on its consolidated financial statements.

Identifiable Intangible Asset

Identifiable Intangible Asset	3 Months Ended
	Mar. 31, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
Identifiable Intangible Asset	Identifiable Intangible Asset The Company believes there are no indicators of impairment relating to its in-process R&D intangible asset as of March 31, 2018 . The Company will begin to amortize the intangible asset upon US Food and Drug Administration (FDA) approval of ALIS, if received, and include the expense in the Company's consolidated statement of comprehensive loss.

Accrued Expenses

Accrued Expenses	3 Months Ended
	Mar. 31, 2018
Payables and Accruals [Abstract]
Accrued Expenses	Accrued Expenses Accrued expenses consist of the following: As of March 31, As of December 31, (in thousands) Accrued clinical trial expenses $ 5,162 $ 7,837 Accrued compensation 4,496 12,197 Accrued professional fees 5,760 4,500 Accrued technical operation expenses 2,058 2,182 Accrued interest payable 1,422 423 Accrued construction costs 1,185 1,719 Other accrued expenses 991 481 $ 21,074 $ 29,339

Debt

Debt	3 Months Ended
	Mar. 31, 2018
Debt Disclosure [Abstract]
Debt	Debt In January 2018, the Company completed an underwritten public offering of the Convertible Notes, in which the Company sold $450.0 million aggregate principal amount of Convertible Notes, including the exercise in full of the underwriters' option to purchase additional Convertible Notes of $50.0 million . The Company's net proceeds from the offering, after deducting underwriting discounts and commissions and other offering expenses of $14.1 million , were approximately $435.9 million . The Convertible Notes bear interest payable semiannually in arrears on January 15 and July 15 of each year, beginning on July 15, 2018. The Convertible Notes mature on January 15, 2025, unless earlier converted, redeemed, or repurchased. On or after October 15, 2024, until the close of business on the second scheduled trading day immediately preceding January 15, 2025, holders may convert their Convertible Notes at any time. Upon conversion, holders may receive cash, shares of the Company's common stock or a combination of cash and shares of the Company's common stock, at the Company's option. The initial conversion rate is 25.5384 shares of common stock per $1,000 principal amount of Convertible Notes (equivalent to an initial conversion price of approximately $39.16 per share of common stock). The conversion rate will be subject to adjustment in some events but will not be adjusted for any accrued and unpaid interest. Holders may convert their Convertible Notes prior to October 15, 2024, only under certain circumstances, subject to the conditions set forth in the Indenture, including any one of the following: (i) during the five business day period immediately after any five consecutive trading day period (the measurement period) in which the trading price per $1,000 principal amount of convertible notes, as determined following a request by a holder of the convertible notes, for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the common stock and the conversion rate on such trading day, (ii) the Company elects to distribute to all or substantially all holders of the common stock (a) any rights, options or warrants (other than in connection with a stockholder rights plan for so long as the rights issued under such plan have not detached from the associated shares of common stock) entitling them, for a period of not more than 45 days from the declaration date for such distribution, to subscribe for or purchase shares of common stock at a price per share that is less than the average of the last reported sale prices of the common stock for the 10 consecutive trading day period ending on, and including, the trading day immediately preceding the declaration date for such distribution, or (b) the Company’s assets, debt securities or rights to purchase securities of the Company, which distribution has a per share value, as reasonably determined by the board of directors, exceeding 10% of the last reported sale price of the common stock on the trading day immediately preceding the declaration date for such distribution, (iii) if a transaction or event that constitutes a fundamental change or a make-whole fundamental change occurs, or if the Company is a party to (a) a consolidation, merger, combination, statutory or binding share exchange or similar transaction, pursuant to which the common stock would be converted into, or exchanged for, cash, securities or other property or assets, or (b) any sale, conveyance, lease or other transfer or similar transaction in one transaction or a series of transactions of all or substantially all of the consolidated assets of the Company and its subsidiaries, taken as a whole, all or any portion of the Convertible Notes may be surrendered by a holder for conversion at any time from or after the date that is 30 scheduled trading days prior to the anticipated effective date of the transaction, (iv) if during any calendar quarter commencing after the calendar quarter ending on March 31, 2018 (and only during such calendar quarter), the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day, or, (v) if the Company sends a notice of redemption, a holder may surrender all or any portion of its Convertible Notes, to which the notice of redemption relates, for conversion at any time on or after the date the applicable notice of redemption was sent until the close of business on (a) the second business day immediately preceding the related redemption date or (b) if the Company fails to pay the redemption price on the redemption date as specified in such notice of redemption, such later date on which the redemption price is paid. The Convertible Notes can be settled in cash, common stock, or a combination of cash and common stock at the Company's option, and thus, the Company determined the embedded conversion options in the convertible notes are not required to be separately accounted for as a derivative. However, since the Convertible Notes are within the scope of the accounting guidance for cash convertible instruments, the Company is required to separate the Convertible Notes into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated equity component. The fair value was based on data from readily available pricing sources which utilize market observable inputs and other characteristics for similar types of instruments. The carrying amount of the equity component representing the embedded conversion option was determined by deducting the fair value of the liability component from the gross proceeds of the Convertible Notes. The excess of the principal amount of the liability component over its carrying amount is amortized to interest expense over the expected life of a similar liability that does not have an associated equity component using the effective interest method. The equity component is not remeasured as long as it continues to meet the conditions for equity classification in the accounting guidance for contracts in an entity’s own equity. The fair value of the liability component of the Convertible Notes on the date of issuance was estimated at $309.1 million using an effective interest rate of 7.6% , and accordingly, the equity component on the date of issuance was $140.9 million . The discount is being amortized to interest expense over the term of the Convertible Notes, which results in a remaining period of approximately 6.8 years. For the quarter ended March 31, 2018, total interest expense related to the Convertible Notes was $4.7 million , which includes the contractual interest coupon, the amortization of the issuance costs, and accretion of debt discount, as described in the table below. The following table presents the components of the Company’s debt balance as of March 31, 2018 (in thousands): 1.75% convertible senior notes due 2025 $ 450,000 Debt issuance costs, unamortized (9,424 ) Discount on debt (137,870 ) Long-term debt, net $ 302,706 As of March 31, 2018 , future principal repayments of the debt for each of the fiscal years through maturity were as follows (in thousands): Year Ending December 31: 2018 $ — 2019 — 2020 — 2021 — 2022 — 2023 and thereafter 450,000 $ 450,000 The estimated fair value of the liability component of the Convertible Notes (categorized as a Level 2 liability for fair value measurement purposes) was determined using current market factors and the ability of the Company to obtain debt at comparable terms to those that are currently in place. The Company believes the estimated fair value at March 31, 2018 approximates the carrying amount. In February 2018, the Company used part of the net proceeds from the issuance of the Convertible Notes to pay off its outstanding debt to Hercules Capital (Hercules). The payments to Hercules consisted of $55.0 million for the principal amount and an additional $3.2 million in back-end fees, outstanding interest, and prepayment penalty fees, which resulted in a $2.2 million loss on extinguishment of debt in the quarter ended March 31, 2018. Interest Expense The following table sets forth the total interest expense recognized in the periods presented (in thousands): Three Months Ended March 31, 2018 2017 Contractual interest expense $ 2,272 $ 1,272 Amortization of debt issuance costs 299 31 Accretion of back-end fee on debt 50 171 Accretion of debt discount 3,021 — Total interest expense $ 5,642 $ 1,474

Shareholders' Equity

Shareholders' Equity	3 Months Ended
	Mar. 31, 2018
Stockholders' Equity Note [Abstract]
Shareholders' Equity	Shareholders’ Equity Common Stock — As of March 31, 2018 , the Company had 500,000,000 shares of common stock authorized with a par value of $0.01 and 76,623,136 shares of common stock issued and outstanding. In addition, as of March 31, 2018 , the Company had reserved 9,865,574 shares of common stock for issuance upon the exercise of outstanding stock options and 234,373 shares of common stock for issuance upon the vesting of RSUs. The Company has also reserved 11,492,280 shares of common stock for issuance upon conversion of the Convertible Notes, subject to adjustment in accordance with the Indenture. In January 2018, the Company completed an underwritten public offering of $450.0 million aggregate principal amount of Convertible Notes, including the exercise in full of the underwriter's option to purchase additional Convertible Notes. The fair value of the liability component of the Convertible Notes on the date of issuance was estimated at $309.1 million , and accordingly, the equity component (included in additional paid-in capital) on the date of issuance was calculated as $140.9 million using the residual method as further described in Note 5 Debt . In September 2017, the Company completed an underwritten public offering of 14,123,150 shares of the Company’s common stock, which included the underwriter’s exercise in full of its over-allotment option of 1,842,150 shares, at a price to the public of $28.50 per share. The Company’s net proceeds from the sale of the shares, after deducting the underwriter’s discount and offering expenses of $24.8 million , were $ 377.7 million . Preferred Stock — As of March 31, 2018 , 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	3 Months Ended
	Mar. 31, 2018
Share-based Compensation [Abstract]
Stock-Based Compensation	Stock-Based Compensation The Company’s current equity compensation plan, the 2017 Incentive Plan, was approved by shareholders at the Company’s Annual Meeting of Shareholders on May 18, 2017. The 2017 Incentive Plan is administered by the Compensation Committee and the Board of Directors of the Company. Under the terms of the 2017 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), RSUs, performance options/shares and other stock awards, as well as pay incentive bonuses to eligible employees and non-employee directors. On May 18, 2017, upon the approval of the 2017 Incentive Plan by shareholders, 5,000,000 shares were authorized for issuance thereunder, plus any shares subject to then-outstanding awards under the 2015 Incentive Plan and the 2013 Incentive Plan that subsequently were canceled, terminated unearned, expired, were forfeited, lapsed for any reason or were settled in cash without the delivery of shares. As of March 31, 2018 , 3,643,015 shares remained for future issuance under the 2017 Incentive Plan. The 2017 Incentive Plan will terminate on April 3, 2027 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 in connection with the Company’s equity grant program. During the three months ended March 31, 2018 , the Company granted inducement stock options covering 236,730 shares of the Company's common stock to new employees. Stock Options - The Company calculates the fair value of stock options granted using the Black-Scholes valuation model. The following table summarizes the Company’s grant date fair value and assumptions used in determining the fair value of all stock options granted during the periods presented: Three Months Ended March 31, 2018 2017 Volatility 67%-68% 73%-74% Risk-free interest rate 2.25%-2.65% 1.86%-1.99% Dividend yield 0.0% 0.0% Expected option term (in years) 5.08 6.25 Weighted average fair value of stock options granted $17.07 $9.18 For each period presented, the volatility factor was based on the Company’s historical volatility during the expected option term. Estimated forfeitures are based on the actual percentage of option forfeitures since the closing of the Company’s merger with Transave, Inc. in December 2010. The expected option term for these grants was determined using the Company’s historical exercise behavior. From time to time, the Company grants performance-condition options to certain of its employees. Vesting of these options is subject to the Company achieving certain performance criteria established at the date of grant and the grantees fulfilling a service condition (continued employment). As of March 31, 2018 , the Company had performance options totaling 133,334 shares outstanding which had not yet met the recognition criteria. The following table summarizes the Company’s aggregate stock option activity for the three months ended March 31, 2018 : Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life in Years Aggregate Intrinsic Value (in thousands) Options outstanding at December 31, 2017 8,608,921 $ 14.08 Granted 1,322,350 $ 29.51 Exercised (12,628 ) $ 11.23 Forfeited or expired (53,069 ) $ 15.70 Options outstanding at March 31, 2018 9,865,574 $ 16.14 7.49 $ 73,003 Vested and expected to vest at March 31, 2018 9,499,525 $ 15.97 7.44 $ 71,286 Exercisable at March 31, 2018 4,679,778 $ 12.97 6.17 $ 44,855 The total intrinsic value of stock options exercised during the three months ended March 31, 2018 and 2017 was $0.2 million and $0.5 million , respectively. As of March 31, 2018 , there was $44.7 million of unrecognized compensation expense related to unvested stock options which is expected to be recognized over a weighted average period of 2.73 years. Included in unrecognized compensation expense was $1.1 million related to outstanding performance-condition options. These performance-condition options will vest, and compensation expense will be recognized, in the period when FDA approval of ALIS is received in the US. The following table summarizes the range of exercise prices and the number of stock options outstanding and exercisable as of March 31, 2018: Outstanding as of March 31, 2018 Exercisable as of March 31, 2018 Range of Exercise Prices ($) Number of Options Weighted Average Remaining Contractual Term (in years) Weighted Average Exercise Price ($) Number of Options Weighted Average Exercise Price ($) $ 3.03 $ 6.90 1,107,302 4.48 $ 4.01 1,069,802 $ 3.91 $ 6.96 $ 10.85 1,068,246 8.01 $ 10.76 419,017 $ 10.62 $ 11.14 $ 12.58 1,085,440 6.12 $ 12.17 799,415 $ 12.17 $ 12.66 $ 13.67 1,031,771 8.46 $ 13.59 329,907 $ 13.53 $ 13.94 $ 16.07 1,191,255 7.24 $ 15.28 666,341 $ 15.12 $ 16.09 $ 17.16 1,489,378 8.47 $ 16.70 350,612 $ 16.18 $ 17.24 $ 22.76 1,436,957 6.77 $ 21.11 1,009,373 $ 21.07 $ 22.84 $ 30.46 1,279,095 9.66 $ 29.05 35,311 $ 23.80 $ 30.86 $ 31.78 155,960 9.74 $ 31.10 — $ — $ 32.46 $ 32.46 20,170 9.76 $ 32.46 — $ — Restricted Stock and Restricted Stock Units — The Company may grant restricted stock (RS) and RSUs to eligible employees, including its executives, and non-employee directors. Each share of RS vests, 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 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 RSU awards on a straight-line basis over the requisite service period of these awards. The following table summarizes the Company’s RSU award activity during the three months ended March 31, 2018 : Number of RSUs Weighted Average Grant Price ($) Outstanding at December 31, 2017 46,914 $ 17.16 Granted 187,549 30.46 Released — — Forfeited (90 ) 30.46 Outstanding at March 31, 2018 234,373 $ 27.80 The following table summarizes the aggregate stock-based compensation expense recorded in the Consolidated Statements of Comprehensive Loss related to stock options and RSUs during the three months ended March 31, 2018 and 2017 : Three Months Ended March 31, 2018 2017 (in millions) Research and development expenses $ 1.9 $ 1.5 General and administrative expenses 3.8 2.5 Total $ 5.7 $ 4.0

Income Taxes

Income Taxes	3 Months Ended
	Mar. 31, 2018
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes The Company’s provision for income taxes was $48,000 and $30,000 for the three months ended March 31, 2018 and 2017 , respectively. The provision for income taxes in all periods was a result of certain of the Company’s subsidiaries in Europe, which had taxable income during the three months ended March 31, 2018 and 2017 . In jurisdictions where the Company has net losses, there was a full valuation allowance recorded against the Company’s deferred tax assets and therefore no tax benefit was recorded. The Company remeasured certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21%. The Company recorded a provisional amount of $94.0 million as of December 31, 2017 related to the remeasurement of certain deferred tax balances, offset by the write-down of the full valuation allowance recorded. Upon further analyses of certain aspects of the Tax Cut and Jobs Act and refinement of the Company's calculations during the three months ended March 31, 2018, the Company determined that the provisional amount would not need to be adjusted. The Company is subject to US federal, US state and foreign income taxes. In regards to foreign income taxes, the Company was subject to a one-time transition tax based on its total earnings and profits, which are generally deferred from US income taxes under previous US law. Due to the aggregate loss position of our foreign subsidiaries, the Company did not record any provisional amount for the one-time transition tax liability at December 31, 2017. 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 2014 and later, and is generally open for certain states for the years 2013 and later. 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. As of March 31, 2018 and December 31, 2017 , the Company had recorded no reserves for unrecognized income tax benefits, nor had 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.

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2018
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies The Company has an operating lease for office and laboratory space located in Bridgewater, NJ, its corporate headquarters, for which the initial lease term expires in November 2019. Future minimum rental payments under this lease are $1.7 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 December 2021. Future minimum rental payments under this lease are $1.8 million . Rent expense charged to operations was $0.4 million and $0.4 million for the three months ended March 31, 2018 and 2017 , respectively. Future minimum rental payments required under the Company’s operating leases for the period from April 1, 2018 to December 31, 2018 and for each of the five years thereafter are as follows (in thousands): Year Ending December 31: 2018 (remaining) $ 1,145 2019 1,421 2020 477 2021 498 2022 — 2023 — $ 3,541 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 European Medicines Agency (EMA) approving the Company’s European marketing authorization application (MAA) for use of ALIS in the treatment of NTM lung disease and the likelihood of commercialization of ALIS 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, the lead plaintiff filed an amended complaint that shortened the putative class period for the Exchange Act claims to March 26, 2014 through June 8, 2016 and added claims under Sections 11, 12, and 15 of the Securities Act of 1933 (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 named 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 alleged 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 its Phase 2 study that made the secondary offering risky or speculative and sought damages in an unspecified amount. The Company moved to dismiss the amended complaint on March 1, 2017. On February 15, 2018, the Court issued a decision granting the motion and dismissing the amended complaint without prejudice as to all defendants. On March 22, 2018 after the lead plaintiffs failed to file an amended complaint, the Court entered final judgment in favor of the defendants, and dismissed the case with prejudice. The deadline for appeal has now passed and the Company considers the case closed. From time to time, the Company is a party to various 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.

Summary of Significant Accoun16

Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2018
Accounting Policies [Abstract]
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 judgment 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 financial assets and liabilities which were measured at fair value as of March 31, 2018 and December 31, 2017 were Level 1 and such assets were comprised of cash and cash equivalents of $686.6 million and $381.2 million , respectively. 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 an original maturity of three months or less from the date of purchase. As of March 31, 2018 , the Company's cash and cash equivalents balance included US treasury bills of $180.0 million . 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 the three months ended March 31, 2018 and 2017 , respectively. As of March 31, 2018 and December 31, 2017 , the Company held no securities that were in an unrealized gain or loss 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.
Net Loss Per Share	Net Loss Per Share - Basic net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted net loss per 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, restricted stock units (RSUs) and convertible debt securities would be anti-dilutive as the Company incurred a net loss. 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 common shares used to compute basic and diluted net loss per share for the three months ended March 31, 2018 and 2017 : Three Months Ended March 31, 2018 2017 (in thousands, except per share amounts) Numerator: Net loss $ (68,524 ) $ (37,414 ) Denominator: Weighted average common shares used in calculation of basic net loss per share: 76,619 62,041 Effect of dilutive securities: Common stock options — — RSUs — — Convertible debt securities — — Weighted average common shares outstanding used in calculation of diluted net loss per share 76,619 62,041 Net loss per share: Basic and Diluted $ (0.89 ) $ (0.60 ) The following potentially dilutive securities have been excluded from the computations of diluted weighted average common shares outstanding as of March 31, 2018 and 2017 as their effect would have been anti-dilutive (in thousands): As of March 31, 2018 2017 Stock options to purchase common stock 9,866 7,719 Unvested RSUs 234 89 Convertible debt securities 11,492 —
Recently Adopted Accounting Pronouncements	Recently Adopted Accounting Pronouncements - In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments , which addressed eight specific cash flow issues with the objective of reducing the existing diversity in practice. Among the updates, the standard requires debt extinguishment costs to be classified as cash outflows for financing activities. This standard update is effective as of the first quarter of 2018. As a result of the adoption of the standard, in the first quarter of 2018, the Company reported a $2.2 million loss on extinguishment of debt in the financing activities section of its consolidated statement of cash flows. The Company had no material debt extinguishment costs prior to the first quarter of 2018. There were no other significant impacts as a result of adopting this standard. In August 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern , which defines management’s responsibility to perform interim and annual assessments of an entity’s ability to continue as a going concern, and to provide related footnote disclosures if there is substantial doubt about its ability to continue as a going concern. The new standard was effective for the annual period ending after December 15, 2016, and for interim periods thereafter. The Company adopted ASU 2014-15 in the fourth quarter of 2016, which had no impact on the Company’s consolidated financial statements. The interim assessment during the first quarter of 2018 did not have an impact on the consolidated financial statements. The Company had $686.6 million in cash and cash equivalents as of March 31, 2018 and reported a net loss of $68.5 million for the three months ended March 31, 2018 . Historically, the Company has funded its operations through public offerings of equity securities and debt financings. To date, the Company has not generated material revenue from ALIS. The Company does not expect to generate material revenue unless or until marketing approval is received for ALIS. Accordingly, the Company expects to continue to incur losses while funding research and development (R&D) activities, regulatory submissions, potential commercial launch activities and general and administrative expenses. The Company expects its future cash requirements to be substantial, and the Company may need to raise additional capital to fund operations, to develop and commercialize ALIS, to develop INS1007 and INS1009 and to develop, acquire, in-license or co-promote other products that address orphan or rare diseases. ASU 2014-15 requires the Company to evaluate whether it has sufficient resources to fund operations for 12 months from the filing date of this Quarterly Report on Form 10-Q without regard to whether or not it can raise capital in the future. The Company believes it currently has sufficient funds to meet its financial needs for at least the next 12 months. In September 2017, the Company completed an underwritten offering of 14.1 million shares of its common stock for cash proceeds of $377.7 million , net of fees and expenses related to the offering. Further, in January 2018, the Company completed an underwritten public offering of 1.75% convertible senior notes due 2025 (the Convertible Notes) pursuant to an indenture, dated as of January 26, 2018, between the Company and Wells Fargo Bank, National Association (Wells Fargo), as trustee, as supplemented by the first supplemental indenture, dated January 26, 2018, between the Company and Wells Fargo (as supplemented, the Indenture). The Company sold $450.0 million aggregate principal amount of Convertible Notes, including the exercise in full of the underwriters' option to purchase additional Convertible Notes of $50.0 million . The Company's net proceeds from the offering, after deducting underwriting discounts and commissions and other offering expenses of $14.1 million , were approximately $435.9 million . The source, timing and availability of any future financing or other transaction will depend principally upon continued progress in the Company’s regulatory, development and pre-commercial activities. Any equity or debt financing will also be contingent upon equity and debt market conditions and interest rates at the time. If the Company is unable to obtain sufficient additional funds when required, the Company may be forced to delay, restrict or eliminate all or a portion of its R&D programs, pre-commercialization activities, or dispose of assets or technology. In May 2014, the FASB issued ASU 2014-9, Revenue from Contracts with Customers (Topic 606) which amended the existing accounting standards for revenue recognition. ASU 2014-9 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 adopted ASU 2014-9 in the first quarter of 2018 and the impact of adoption is not material to its consolidated financial statements. New Accounting Pronouncements (Not Yet Adopted) —In February 2016, the FASB issued ASU 2016-2, 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 2016-2 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 2016-2 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 2016-2 in the first quarter of 2019 and is in the process of evaluating the impact of adoption on its consolidated financial statements.

Summary of Significant Accoun17

Summary of Significant Accounting Policies (Tables)	3 Months Ended
	Mar. 31, 2018
Accounting Policies [Abstract]
Reconciliation of the Weighted Average Number of Shares Used to Compute Basic and Diluted Net Loss per Share	The following table sets forth the reconciliation of the weighted average number of common shares used to compute basic and diluted net loss per share for the three months ended March 31, 2018 and 2017 : Three Months Ended March 31, 2018 2017 (in thousands, except per share amounts) Numerator: Net loss $ (68,524 ) $ (37,414 ) Denominator: Weighted average common shares used in calculation of basic net loss per share: 76,619 62,041 Effect of dilutive securities: Common stock options — — RSUs — — Convertible debt securities — — Weighted average common shares outstanding used in calculation of diluted net loss per share 76,619 62,041 Net loss per share: Basic and Diluted $ (0.89 ) $ (0.60 )
Potentially Dilutive Securities Excluded from Computations of Diluted Weighted Average Common Shares Outstanding	The following potentially dilutive securities have been excluded from the computations of diluted weighted average common shares outstanding as of March 31, 2018 and 2017 as their effect would have been anti-dilutive (in thousands): As of March 31, 2018 2017 Stock options to purchase common stock 9,866 7,719 Unvested RSUs 234 89 Convertible debt securities 11,492 —

Accrued Expenses (Tables)

Accrued Expenses (Tables)	3 Months Ended
	Mar. 31, 2018
Payables and Accruals [Abstract]
Schedule of Accrued Expenses	Accrued expenses consist of the following: As of March 31, As of December 31, (in thousands) Accrued clinical trial expenses $ 5,162 $ 7,837 Accrued compensation 4,496 12,197 Accrued professional fees 5,760 4,500 Accrued technical operation expenses 2,058 2,182 Accrued interest payable 1,422 423 Accrued construction costs 1,185 1,719 Other accrued expenses 991 481 $ 21,074 $ 29,339

Debt (Tables)

Debt (Tables)	3 Months Ended
	Mar. 31, 2018
Debt Disclosure [Abstract]
Components of Debt Balance	The following table presents the components of the Company’s debt balance as of March 31, 2018 (in thousands): 1.75% convertible senior notes due 2025 $ 450,000 Debt issuance costs, unamortized (9,424 ) Discount on debt (137,870 ) Long-term debt, net $ 302,706
Schedule of Future Principal Repayments of Debt	As of March 31, 2018 , future principal repayments of the debt for each of the fiscal years through maturity were as follows (in thousands): Year Ending December 31: 2018 $ — 2019 — 2020 — 2021 — 2022 — 2023 and thereafter 450,000 $ 450,000
Summary of Interest Expense	The following table sets forth the total interest expense recognized in the periods presented (in thousands): Three Months Ended March 31, 2018 2017 Contractual interest expense $ 2,272 $ 1,272 Amortization of debt issuance costs 299 31 Accretion of back-end fee on debt 50 171 Accretion of debt discount 3,021 — Total interest expense $ 5,642 $ 1,474

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	3 Months Ended
	Mar. 31, 2018
Share-based Compensation [Abstract]
Summary of Fair Value Assumptions for Stock Options	The following table summarizes the Company’s grant date fair value and assumptions used in determining the fair value of all stock options granted during the periods presented: Three Months Ended March 31, 2018 2017 Volatility 67%-68% 73%-74% Risk-free interest rate 2.25%-2.65% 1.86%-1.99% Dividend yield 0.0% 0.0% Expected option term (in years) 5.08 6.25 Weighted average fair value of stock options granted $17.07 $9.18
Summary of Stock Option Activity	The following table summarizes the Company’s aggregate stock option activity for the three months ended March 31, 2018 : Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life in Years Aggregate Intrinsic Value (in thousands) Options outstanding at December 31, 2017 8,608,921 $ 14.08 Granted 1,322,350 $ 29.51 Exercised (12,628 ) $ 11.23 Forfeited or expired (53,069 ) $ 15.70 Options outstanding at March 31, 2018 9,865,574 $ 16.14 7.49 $ 73,003 Vested and expected to vest at March 31, 2018 9,499,525 $ 15.97 7.44 $ 71,286 Exercisable at March 31, 2018 4,679,778 $ 12.97 6.17 $ 44,855
Summary of Exercise Price and Number of Stock Options Exercisable	The following table summarizes the range of exercise prices and the number of stock options outstanding and exercisable as of March 31, 2018: Outstanding as of March 31, 2018 Exercisable as of March 31, 2018 Range of Exercise Prices ($) Number of Options Weighted Average Remaining Contractual Term (in years) Weighted Average Exercise Price ($) Number of Options Weighted Average Exercise Price ($) $ 3.03 $ 6.90 1,107,302 4.48 $ 4.01 1,069,802 $ 3.91 $ 6.96 $ 10.85 1,068,246 8.01 $ 10.76 419,017 $ 10.62 $ 11.14 $ 12.58 1,085,440 6.12 $ 12.17 799,415 $ 12.17 $ 12.66 $ 13.67 1,031,771 8.46 $ 13.59 329,907 $ 13.53 $ 13.94 $ 16.07 1,191,255 7.24 $ 15.28 666,341 $ 15.12 $ 16.09 $ 17.16 1,489,378 8.47 $ 16.70 350,612 $ 16.18 $ 17.24 $ 22.76 1,436,957 6.77 $ 21.11 1,009,373 $ 21.07 $ 22.84 $ 30.46 1,279,095 9.66 $ 29.05 35,311 $ 23.80 $ 30.86 $ 31.78 155,960 9.74 $ 31.10 — $ — $ 32.46 $ 32.46 20,170 9.76 $ 32.46 — $ —
Summary of RSU Activity	The following table summarizes the Company’s RSU award activity during the three months ended March 31, 2018 : Number of RSUs Weighted Average Grant Price ($) Outstanding at December 31, 2017 46,914 $ 17.16 Granted 187,549 30.46 Released — — Forfeited (90 ) 30.46 Outstanding at March 31, 2018 234,373 $ 27.80
Summary of Allocation of Employee Stock-Based Compensation	The following table summarizes the aggregate stock-based compensation expense recorded in the Consolidated Statements of Comprehensive Loss related to stock options and RSUs during the three months ended March 31, 2018 and 2017 : Three Months Ended March 31, 2018 2017 (in millions) Research and development expenses $ 1.9 $ 1.5 General and administrative expenses 3.8 2.5 Total $ 5.7 $ 4.0

Commitments and Contingencies (

Commitments and Contingencies (Tables)	3 Months Ended
	Mar. 31, 2018
Commitments and Contingencies Disclosure [Abstract]
Schedule of Future Minimum Rental Payments Required Under Operating Leases	Future minimum rental payments required under the Company’s operating leases for the period from April 1, 2018 to December 31, 2018 and for each of the five years thereafter are as follows (in thousands): Year Ending December 31: 2018 (remaining) $ 1,145 2019 1,421 2020 477 2021 498 2022 — 2023 — $ 3,541

Summary of Significant Accoun22

Summary of Significant Accounting Policies - Fair Value Measurements (Details)	3 Months Ended
	Mar. 31, 2018USD ($)security	Mar. 31, 2017USD ($)	Dec. 31, 2017USD ($)security
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Cash and cash equivalents	$ 686,600,000		$ 381,200,000
Fair value transfers in or out of Level 1, Level 2, or Level 3	$ 0	$ 0
Securities in an unrealized gain or loss position | security	0		0
US treasury bills
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Cash and cash equivalents	$ 180,000,000

Summary of Significant Accoun23

Summary of Significant Accounting Policies - Net Loss Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Numerator:
Net loss	$ (68,524)	$ (37,414)
Denominator:
Weighted average common shares used in calculation of basic net loss per share:	76,619	62,041
Effect of dilutive securities:
Dilutive securities, convertible debt	0	0
Weighted average common shares outstanding used in calculation of diluted net loss per share	76,619	62,041
Net loss per share:
Basic and Diluted	$ (0.89)	$ (0.60)
Common stock options
Effect of dilutive securities:
Dilutive securities, share-based payment	0	0
RSUs
Effect of dilutive securities:
Dilutive securities, share-based payment	0	0

Summary of Significant Accoun24

Summary of Significant Accounting Policies - Anti-dilutive Securities (Details) - shares shares in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
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	9,866	7,719
Unvested RSUs
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	234	89
Convertible debt securities
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	11,492	0

Summary of Significant Accoun25

Summary of Significant Accounting Policies - Recently Adopted Accounting Pronouncements (Details) - USD ($)	1 Months Ended		3 Months Ended
	Jan. 31, 2018	Sep. 30, 2017	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Debt Instrument [Line Items]
Loss on extinguishment of debt			$ 2,209,000	$ 0
Cash and cash equivalents			686,600,000		$ 381,200,000
Net loss			68,524,000	$ 37,414,000
Shares issued under underwritten public offering (in shares)		14,123,150
Proceeds from issuance of common stock, net		$ 377,700,000
Underwriting discounts and commissions and other offering expenses			$ 9,424,000
1.75 convertible senior notes due 2025
Debt Instrument [Line Items]
Net proceeds	$ 435,900,000
Convertible Notes | 1.75 convertible senior notes due 2025
Debt Instrument [Line Items]
Interest rate (as a percent)	1.75%
Aggregate principal amount	$ 450,000,000
Option to purchase additional debt	50,000,000
Underwriting discounts and commissions and other offering expenses	$ 14,100,000

Accrued Expenses (Details)

Accrued Expenses (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Payables and Accruals [Abstract]
Accrued clinical trial expenses	$ 5,162	$ 7,837
Accrued compensation	4,496	12,197
Accrued professional fees	5,760	4,500
Accrued technical operation expenses	2,058	2,182
Accrued interest payable	1,422	423
Accrued construction costs	1,185	1,719
Other accrued expenses	991	481
Total accrued expenses	$ 21,074	$ 29,339

Debt - Narrative (Details)

Debt - Narrative (Details)	Feb. 28, 2018USD ($)	Feb. 28, 2018USD ($)	Jan. 31, 2018USD ($)day$ / shares	Mar. 31, 2018USD ($)	Mar. 31, 2017USD ($)
Debt Instrument [Line Items]
Underwriting discounts and commissions and other offering expenses				$ 9,424,000
Interest expense				5,642,000	$ 1,474,000
Repayment of debt				55,000,000	0
Loss on extinguishment of debt				2,209,000	$ 0
A&R Loan Agreement with Hercules
Debt Instrument [Line Items]
Repayment of debt	$ 55,000,000
Repayment of debt, back end fees, outstanding interest, and prepayment penalty fees		$ 3,200,000
1.75 convertible senior notes due 2025
Debt Instrument [Line Items]
Net proceeds			$ 435,900,000
initial conversion rate			0.0255384
Convertible Notes | 1.75 convertible senior notes due 2025
Debt Instrument [Line Items]
Aggregate principal amount			$ 450,000,000
Option to purchase additional debt			50,000,000
Underwriting discounts and commissions and other offering expenses			$ 14,100,000
Initial conversion price (in dollars per share) | $ / shares			$ 39.16
Fair value of liability component of convertible debt			$ 309,100,000
Effective interest rate			7.60%
Equity component of convertible debt			$ 140,900,000
Remaining discount amortization period			6 years 9 months 18 days
Interest expense				$ 4,700,000
Conversion Term (i) | Convertible Notes | 1.75 convertible senior notes due 2025
Debt Instrument [Line Items]
Threshold trading days | day			5
Threshold consecutive trading days | day			5
Threshold percent of stock price trigger			98.00%
Conversion Term (ii) | Convertible Notes | 1.75 convertible senior notes due 2025
Debt Instrument [Line Items]
Threshold trading days | day			45
Threshold consecutive trading days | day			10
Threshold percent of stock price trigger			10.00%
Conversion Term (iii) | Convertible Notes | 1.75 convertible senior notes due 2025
Debt Instrument [Line Items]
Threshold trading days following fundamental change | day			30
Conversion Term (iv) | Convertible Notes | 1.75 convertible senior notes due 2025
Debt Instrument [Line Items]
Threshold trading days | day			20
Threshold consecutive trading days | day			30
Threshold percent of stock price trigger			130.00%

Debt - Components of Debt (Deta

Debt - Components of Debt (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Debt:
1.75% convertible senior notes due 2025	$ 450,000
Debt issuance costs, unamortized	(9,424)
Discount on debt	(137,870)
Long-term debt, net	$ 302,706	$ 55,567

Debt - Future Principal Repayme

Debt - Future Principal Repayments of Debt (Details) $ in Thousands	Mar. 31, 2018USD ($)
Debt Disclosure [Abstract]
2,018	$ 0
2,019	0
2,020	0
2,021	0
2,022	0
2023 and thereafter	450,000
Total	$ 450,000

Debt - Interest Expense (Detail

Debt - Interest Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Debt Disclosure [Abstract]
Contractual interest expense	$ 2,272	$ 1,272
Amortization of debt issuance costs	299	31
Accretion of back-end fee on debt	50	171
Accretion of debt discount	3,021	0
Total interest expense	$ 5,642	$ 1,474

Shareholders' Equity (Details)

Shareholders' Equity (Details) - USD ($)	1 Months Ended
	Sep. 30, 2017	Mar. 31, 2018	Jan. 31, 2018	Dec. 31, 2017
Class of Stock [Line Items]
Common stock, authorized shares (in shares)		500,000,000		500,000,000
Common stock, par value (in dollars per share)		$ 0.01		$ 0.01
Common stock, issued shares (in shares)		76,623,136		76,610,508
Common stock, outstanding shares (in shares)		76,623,136		76,610,508
Shares issued under underwritten public offering (in shares)	14,123,150
Shares exercised in full of over-allotment option by underwriter (in shares)	1,842,150
Share price (in dollars per share)	$ 28.50
Underwriter's discount and offering expenses	$ 24,800,000
Net proceeds from sale of shares	$ 377,700,000
Preferred stock, authorized (in shares)		200,000,000
Preferred stock, par value (in dollars per share)		$ 0.01
Preferred stock, shares issued (in shares)		0
Preferred stock, shares outstanding (in shares)		0
Convertible debt securities
Class of Stock [Line Items]
Common stock shares reserved for issuance (in shares)		11,492,280
Stock options to purchase common stock
Class of Stock [Line Items]
Common stock shares reserved for issuance (in shares)		9,865,574
Unvested RSUs
Class of Stock [Line Items]
Common stock shares reserved for issuance (in shares)		234,373
1.75 convertible senior notes due 2025 | Convertible debt securities
Class of Stock [Line Items]
Aggregate principal amount			$ 450,000,000
Fair value of liability component of convertible debt			309,100,000
Equity component of convertible debt			$ 140,900,000

Stock-Based Compensation - Narr

Stock-Based Compensation - Narrative (Details) - shares	3 Months Ended
	Mar. 31, 2018	May 18, 2017
Share-based Compensation [Abstract]
Shares of common stock, maximum authorized for issuance (in shares)		5,000,000
Shares available for grant (in shares)	3,643,015
Inducement stock options granted to new employees (in shares)	236,730

Stock-Based Compensation - Stoc

Stock-Based Compensation - Stock Options (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Number of Shares
Options outstanding beginning of the year (in shares)	8,608,921
Granted (in shares)	1,322,350
Exercised (in shares)	(12,628)
Forfeited or expired (in shares)	(53,069)
Options outstanding end of the year (in shares)	9,865,574
Vested and expected to vest (in shares)	9,499,525
Exercisable (in shares)	4,679,778
Weighted Average Exercise Price
Options outstanding beginning of the year (in dollars per share)	$ 14.08
Granted (in dollars per share)	29.51
Exercised (in dollars per share)	11.23
Forfeited or expired (in dollars per share)	15.70
Options outstanding end of the year (in dollars per share)	16.14
Vested and expected to vest (in dollars per share)	15.97
Exercisable (in dollars per share)	$ 12.97
Weighted Average Remaining Contractual Life in Years
Options outstanding	7 years 5 months 28 days
Vested and expected to vest	7 years 5 months 10 days
Exercisable	6 years 1 month 30 days
Aggregate Intrinsic Value
Options outstanding	$ 73,003
Vested and expected to vest	71,286
Exercisable	$ 44,855
Stock options to purchase common stock
Fair value and assumptions used in determining fair value of stock options
Dividend yield	0.00%	0.00%
Expected option term (in years)	5 years 1 month	6 years 3 months
Weighted average fair value of stock options granted (in dollars per share)	$ 17.07	$ 9.18
Stock options to purchase common stock | Minimum
Fair value and assumptions used in determining fair value of stock options
Volatility	67.00%	73.00%
Risk-free interest rate	2.25%	1.86%
Stock options to purchase common stock | Maximum
Fair value and assumptions used in determining fair value of stock options
Volatility	68.00%	74.00%
Risk-free interest rate	2.65%	1.99%
Performance-condition options
Number of Shares
Options outstanding end of the year (in shares)	133,334

Stock-Based Compensation - Rang

Stock-Based Compensation - Range of Exercise Prices (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
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	$ 0.2	$ 0.5
Unrecognized compensation expense related to unvested stock options	$ 44.7
Expected weighted average period for recognized and unrecognized compensation expense	2 years 8 months 23 days
Performance-condition options
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range
Unrecognized compensation expense related to unvested stock options	$ 1.1
$3.03 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)	$ 3.03
Range of Exercise Prices upper range limit (in dollars per share)	$ 6.90
Number of Options Outstanding (in shares)	1,107,302
Weighted Average Remaining Contractual Term (in years)	4 years 5 months 23 days
Outstanding Options, Weighted Average Exercise Price (in dollars per share)	$ 4.01
Number of Options Exercisable (in shares)	1,069,802
Exercisable Options, Weighted Average Exercise Price (in dollars per share)	$ 3.91
$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)	1,068,246
Weighted Average Remaining Contractual Term (in years)	8 years 2 days
Outstanding Options, Weighted Average Exercise Price (in dollars per share)	$ 10.76
Number of Options Exercisable (in shares)	419,017
Exercisable Options, Weighted Average Exercise Price (in dollars per share)	$ 10.62
$11.14 to $12.58
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)	$ 12.58
Number of Options Outstanding (in shares)	1,085,440
Weighted Average Remaining Contractual Term (in years)	6 years 1 month 12 days
Outstanding Options, Weighted Average Exercise Price (in dollars per share)	$ 12.17
Number of Options Exercisable (in shares)	799,415
Exercisable Options, Weighted Average Exercise Price (in dollars per share)	$ 12.17
$12.66 to $13.67
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range
Range of Exercise Prices lower range limit (in dollars per share)	12.66
Range of Exercise Prices upper range limit (in dollars per share)	$ 13.67
Number of Options Outstanding (in shares)	1,031,771
Weighted Average Remaining Contractual Term (in years)	8 years 5 months 16 days
Outstanding Options, Weighted Average Exercise Price (in dollars per share)	$ 13.59
Number of Options Exercisable (in shares)	329,907
Exercisable Options, Weighted Average Exercise Price (in dollars per share)	$ 13.53
$13.94 to $16.07
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range
Range of Exercise Prices lower range limit (in dollars per share)	13.94
Range of Exercise Prices upper range limit (in dollars per share)	$ 16.07
Number of Options Outstanding (in shares)	1,191,255
Weighted Average Remaining Contractual Term (in years)	7 years 2 months 25 days
Outstanding Options, Weighted Average Exercise Price (in dollars per share)	$ 15.28
Number of Options Exercisable (in shares)	666,341
Exercisable Options, Weighted Average Exercise Price (in dollars per share)	$ 15.12
$16.09 to $17.16
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range
Range of Exercise Prices lower range limit (in dollars per share)	16.09
Range of Exercise Prices upper range limit (in dollars per share)	$ 17.16
Number of Options Outstanding (in shares)	1,489,378
Weighted Average Remaining Contractual Term (in years)	8 years 5 months 19 days
Outstanding Options, Weighted Average Exercise Price (in dollars per share)	$ 16.70
Number of Options Exercisable (in shares)	350,612
Exercisable Options, Weighted Average Exercise Price (in dollars per share)	$ 16.18
$17.24 to $22.76
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range
Range of Exercise Prices lower range limit (in dollars per share)	17.24
Range of Exercise Prices upper range limit (in dollars per share)	$ 22.76
Number of Options Outstanding (in shares)	1,436,957
Weighted Average Remaining Contractual Term (in years)	6 years 9 months 8 days
Outstanding Options, Weighted Average Exercise Price (in dollars per share)	$ 21.11
Number of Options Exercisable (in shares)	1,009,373
Exercisable Options, Weighted Average Exercise Price (in dollars per share)	$ 21.07
$22.84 to $30.46
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range
Range of Exercise Prices lower range limit (in dollars per share)	22.84
Range of Exercise Prices upper range limit (in dollars per share)	$ 30.46
Number of Options Outstanding (in shares)	1,279,095
Weighted Average Remaining Contractual Term (in years)	9 years 7 months 28 days
Outstanding Options, Weighted Average Exercise Price (in dollars per share)	$ 29.05
Number of Options Exercisable (in shares)	35,311
Exercisable Options, Weighted Average Exercise Price (in dollars per share)	$ 23.80
$30.86 to $31.78
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range
Range of Exercise Prices lower range limit (in dollars per share)	30.86
Range of Exercise Prices upper range limit (in dollars per share)	$ 31.78
Number of Options Outstanding (in shares)	155,960
Weighted Average Remaining Contractual Term (in years)	9 years 8 months 25 days
Outstanding Options, Weighted Average Exercise Price (in dollars per share)	$ 31.10
Number of Options Exercisable (in shares)	0
Exercisable Options, Weighted Average Exercise Price (in dollars per share)	$ 0
$32.46 to $32.46
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range
Range of Exercise Prices lower range limit (in dollars per share)	32.46
Range of Exercise Prices upper range limit (in dollars per share)	$ 32.46
Number of Options Outstanding (in shares)	20,170
Weighted Average Remaining Contractual Term (in years)	9 years 9 months 2 days
Outstanding Options, Weighted Average Exercise Price (in dollars per share)	$ 32.46
Number of Options Exercisable (in shares)	0
Exercisable Options, Weighted Average Exercise Price (in dollars per share)	$ 0

Stock-Based Compensation - Rest

Stock-Based Compensation - Restricted Stock and Restricted Stock Units (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Stock options and RSUs
Weighted Average Grant Price
Allocated share-based compensation expense	$ 5.7	$ 4
Stock options and RSUs | Research and development expenses
Weighted Average Grant Price
Allocated share-based compensation expense	1.9	1.5
Stock options and RSUs | General and administrative expenses
Weighted Average Grant Price
Allocated share-based compensation expense	$ 3.8	$ 2.5
Unvested RSUs
Number of RSUs
Outstanding, beginning balance (in shares)	46,914
Granted (in shares)	187,549
Released (in shares)	0
Forfeited (in shares)	(90)
Outstanding, ending balance (in shares)	234,373
Weighted Average Grant Price
Outstanding Weighted Average Grant Price (in dollars per share)	$ 17.16
Granted (in dollars per share)	30.46
Released (in dollars per share)	0
Forfeited (in dollars per share)	30.46
Outstanding Weighted Average Grant Price (in dollars per share)	$ 27.80
RSUs
Stock-Based Compensation
Number of common shares each award holder is entitled to receive	1

Income Taxes (Details)

Income Taxes (Details) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Income Tax Disclosure [Abstract]
Provision for income taxes	$ 48,000	$ 30,000
Deferred tax benefit	0
Provisional deferred tax asset offset completely by valuation allowance			$ 94,000,000
Unrecognized income tax benefits, interest and penalties accrued	$ 0		$ 0

Commitments and Contingencies -

Commitments and Contingencies - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Commitments
Future minimum rental payments under lease	$ 3,541
Rent expense charged to operations	400	$ 400
Bridgewater, NJ Facility
Commitments
Future minimum rental payments under lease	1,700
Future minimum rental payments for additional laboratory space	$ 1,800

Commitments and Contingencies38

Commitments and Contingencies - Minimum Rental Payments (Details) $ in Thousands	Mar. 31, 2018USD ($)
Future minimum rental payments under operating leases
2018 (remaining)	$ 1,145
2,019	1,421
2,020	477
2,021	498
2,022	0
2,023	0
Total	$ 3,541