Insmed (INSM) 10-Q 7 May 19 2019 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2019	May 02, 2019
Document and Entity Information
Entity Registrant Name	INSMED INC
Entity Central Index Key	0001104506
Document Type	10-Q
Document Period End Date	Mar. 31, 2019
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 (in shares)		77,666,309
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1
Entity Emerging Growth Company	false
Entity Small Business	false

Consolidated Balance Sheets (un

Consolidated Balance Sheets (unaudited) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 420,231	$ 495,072
Accounts receivable	9,347	5,515
Inventory	12,682	7,032
Prepaid expenses and other current assets	12,372	11,327
Total current assets	454,632	518,946
Intangibles, net	57,427	58,675
Fixed assets, net	27,933	22,636
Right-of-use assets	44,609
Other assets	11,314	4,299
Total assets	595,915	604,556
Current liabilities:
Accounts payable	30,223	17,741
Accrued expenses	38,317	38,254
Accrued compensation	16,271	22,208
Lease liabilities	9,359
Other current liabilities	82	1,529
Total current liabilities	94,252	79,732
Debt, long-term	321,313	316,558
Long-term lease liabilities	35,709
Other long-term liabilities	504	0
Total liabilities	451,778	396,290
Shareholders’ equity:
Common stock, $0.01 par value; 500,000,000 authorized shares, 77,596,384 and 77,307,521 issued and outstanding shares at March 31, 2019 and December 31, 2018, respectively	776	773
Additional paid-in capital	1,499,646	1,489,664
Accumulated deficit	(1,356,315)	(1,282,162)
Accumulated other comprehensive income (loss)	30	(9)
Total shareholders’ equity	144,137	208,266
Total liabilities and shareholders’ equity	$ 595,915	$ 604,556

Consolidated Balance Sheets (_2

Consolidated Balance Sheets (unaudited) (Parenthetical) - $ / shares	Mar. 31, 2019	Dec. 31, 2018
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)	77,596,384	77,307,251
Common stock, outstanding shares (in shares)	77,596,384	77,307,251

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Loss (unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Statement of Comprehensive Income [Abstract]
Revenues, net	$ 21,902	$ 0
Costs and expenses:
Cost of product revenues (excluding amortization of intangible assets)	4,150	0
Research and development	31,203	30,098
Selling, general and administrative	54,810	32,653
Amortization of intangible assets	1,248	0
Total costs and expenses	91,411	62,751
Operating loss	(69,509)	(62,751)
Investment income	2,416	2,040
Interest expense	(6,726)	(5,642)
Loss on extinguishment of debt	0	(2,209)
Other (expense) income, net	(119)	86
Loss before income taxes	(73,938)	(68,476)
Provision for income taxes	215	48
Net loss	$ (74,153)	$ (68,524)
Basic and diluted net loss per share (in dollars per share)	$ (0.96)	$ (0.89)
Weighted average basic and diluted common shares outstanding (in shares)	77,541	76,619
Net loss	$ (74,153)	$ (68,524)
Other comprehensive income:
Foreign currency translation gains	39	42
Total comprehensive loss	$ (74,114)	$ (68,482)

Consolidated Statements of Shar

Consolidated Statements of Shareholders' Equity (unaudited) - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Accumulated Other Comprehensive Income (Loss)
Balance at Dec. 31, 2017	$ 361,059	$ 766	$ 1,318,181	$ (957,885)	$ (3)
Balance (in shares) at Dec. 31, 2017		76,611
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]
Net loss	(68,524)			(68,524)
Other comprehensive income	42				42
Exercise of stock options and ESPP shares	142		142
Exercise of stock options and ESPP shares (in shares)		12
Equity component of convertible debt issuance	136,463		136,463
Stock compensation expense	5,674		5,674
Balance at Mar. 31, 2018	434,856	$ 766	1,460,460	(1,026,409)	39
Balance (in shares) at Mar. 31, 2018		76,623
Balance at Dec. 31, 2018	208,266	$ 773	1,489,664	(1,282,162)	(9)
Balance (in shares) at Dec. 31, 2018		77,308
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]
Net loss	(74,153)			(74,153)
Other comprehensive income	39				39
Exercise of stock options and ESPP shares	3,049	$ 3	3,046
Exercise of stock options and ESPP shares (in shares)		253
Issuance of common stock for vesting of RSUs	0
Issuance of common stock for vesting of RSUs (in shares)		35
Stock compensation expense	6,936		6,936
Balance at Mar. 31, 2019	$ 144,137	$ 776	$ 1,499,646	$ (1,356,315)	$ 30
Balance (in shares) at Mar. 31, 2019		77,596

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Operating activities
Net loss	$ (74,153)	$ (68,524)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	1,069	769
Amortization of intangible assets	1,248	0
Stock-based compensation expense	6,936	5,674
Loss on extinguishment of debt	0	2,209
Amortization of debt issuance costs	349	299
Accretion of debt discount	4,406	3,021
Accretion of back-end fee on debt	0	50
Changes in operating assets and liabilities:
Accounts receivable	(3,832)	0
Inventory	(5,650)	0
Prepaid expenses and other current assets	(1,061)	(2,217)
Other assets	(7,044)	0
Accounts payable	9,499	(828)
Accrued expenses and other	323	(165)
Accrued compensation	(5,937)	(7,701)
Net cash used in operating activities	(73,847)	(67,413)
Investing activities
Purchase of fixed assets	(4,028)	(5,365)
Net cash used in investing activities	(4,028)	(5,365)
Financing activities
Proceeds from exercise of stock options and ESPP	3,049	142
Payment on extinguishment of debt	0	(2,835)
Payment of debt	0	(55,000)
Proceeds from issuance of 1.75% convertible senior notes due 2025	0	450,000
Payment of debt issuance costs	0	(14,141)
Net cash provided by financing activities	3,049	378,166
Effect of exchange rates on cash and cash equivalents	(15)	28
Net increase in cash and cash equivalents	(74,841)	305,416
Cash and cash equivalents at beginning of period	495,072	381,165
Cash and cash equivalents at end of period	420,231	686,581
Supplemental disclosures of cash flow information:
Cash paid for interest	3,939	1,275
Cash paid for income taxes	$ 178	$ 54

Consolidated Statements of Ca_2

Consolidated Statements of Cash Flows (unaudited) (Parenthetical)	Mar. 31, 2019
Convertible Notes | 1.75 convertible senior notes due 2025
Proceeds from issuance of 1.75% convertible senior notes due 2025	1.75%

The Company and Basis of Presen

The Company and Basis of Presentation	3 Months Ended
	Mar. 31, 2019
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 on a mission to transform the lives of patients with serious and rare diseases. The Company's first commercial product, ARIKAYCE (amikacin liposome inhalation suspension), received accelerated approval in the United States (US) on September 28, 2018 for the treatment of Mycobacterium avium complex (MAC) lung disease as part of a combination antibacterial drug regimen for adult patients with limited or no alternative treatment options. MAC lung disease is a rare and often chronic infection that can cause irreversible lung damage and can be fatal. The Company's clinical-stage pipeline includes INS1007 and INS1009. INS1007 is a novel oral, reversible inhibitor of dipeptidyl peptidase 1 (DPP1) with therapeutic potential in non-cystic fibrosis (non-CF) bronchiectasis and other inflammatory diseases. INS1009 is an inhaled 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 US, Ireland, Germany, France, the United Kingdom (UK), the Netherlands, Bermuda and Japan. 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, 2018 . 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. The Company had $420.2 million in cash and cash equivalents as of March 31, 2019 and reported a net loss of $74.2 million for the three months ended March 31, 2019 . Historically, the Company has funded its operations through public offerings of equity securities and debt financings. The Company commenced commercial shipments of ARIKAYCE in October 2018. The Company expects to continue to incur operating losses both in our US and certain international entities while funding research and development (R&D) activities for ARIKAYCE and our other pipeline programs, continuing commercial launch activities for ARIKAYCE in the US, continuing to invest in pre-commercial and regulatory activities for ARIKAYCE in Europe and Japan, and funding other general and administrative activities. The Company expects its future cash requirements to be substantial, and the Company may need to raise additional capital to fund operations, including the commercialization of ARIKAYCE and additional clinical trials related to ARIKAYCE, to develop INS1007 and INS1009 and to develop, acquire, in-license or co-promote other products or product candidates that address orphan or rare diseases. The source, timing and availability of any future financing or other transaction will depend principally upon continued progress in the Company’s commercial, regulatory and development 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 development programs or commercialization efforts.

Summary of Significant Accounti

Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2019
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, 2018 : 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, 2019 and December 31, 2018 were Level 1 assets comprised of cash and cash equivalents. 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. The following table shows assets and liabilities that are measured at fair value on a recurring basis and their carrying value (in millions): As of March 31, 2019 Fair Value Carrying Value Level 1 Level 2 Level 3 Cash and cash equivalents $ 420.2 $ 420.2 $ — $ — 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, 2019 and 2018 , respectively. As of March 31, 2019 and December 31, 2018 , 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. The estimated fair value of the liability component of the 1.75% convertible senior notes due 2025 (the Convertible Notes) (categorized as a Level 2 liability for fair value measurement purposes) as of March 31, 2019 was $438 million , determined using current market factors and the ability of the Company to obtain debt on comparable terms to the Convertible Notes. The $321.3 million carrying value of the Convertibles Notes as of March 31, 2019 excludes the $120.6 million of the unamortized portion of the debt discount. 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 and from the assumed conversion of the Convertible Notes 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, 2019 and 2018 : Three Months Ended March 31, 2019 2018 (in thousands, except per share amounts) Numerator: Net loss $ (74,153 ) $ (68,524 ) Denominator: Weighted average common shares used in calculation of basic net loss per share: 77,541 76,619 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 77,541 76,619 Net loss per share: Basic and diluted $ (0.96 ) $ (0.89 ) The following potentially dilutive securities have been excluded from the computations of diluted weighted average common shares outstanding as of March 31, 2019 and 2018 as their effect would have been anti-dilutive (in thousands): As of March 31, 2019 2018 Stock options to purchase common stock 11,903 9,866 Unvested RSUs 170 234 Convertible debt securities 11,492 11,492 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 is exposed to risks associated with extending credit to customers related to the sale of products. The Company does not require collateral to secure amounts due from its customers. The following table presents the percentage of gross product revenue represented by the Company's three largest customers as of the quarter ended March 31, 2019 . Percentage of Total Gross Product Revenue Customer A 33% Customer B 31% Customer C 16% The Company did not have product revenue prior to US FDA approval of ARIKAYCE in September 2018. The Company relies on third-party manufacturers and suppliers for manufacturing and supply of its products. 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 accordance with Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers, the Company recognizes revenue when a customer obtains control of promised goods or services, in an amount that reflects the consideration the Company expects to receive in exchange for the goods or services provided. To determine revenue recognition for arrangements within the scope of ASC 606, the Company performs the following five steps: (1) identify the contracts with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when or as the entity satisfies a performance obligation. At contract inception, the Company assesses the goods or services promised within each contract and determines those that are performance obligations and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when or as the performance obligation is satisfied. For all contracts that fall into the scope of ASC 606, the Company has identified one performance obligation: the sale of ARIKAYCE to its customers. The Company has not incurred or capitalized any incremental costs associated with obtaining contracts with customers. Product revenues consist primarily of sales of ARIKAYCE in the US. Product revenues are recognized once the Company performs and satisfies all five steps mentioned above. In October 2018, the Company began shipping ARIKAYCE to its customers in the US, which include specialty pharmacies and specialty distributors. The Company recognizes revenues for product received by its customers, net of allowances for customer credits, including prompt pay discounts, service fees, estimated rebates, including government rebates such as Medicaid rebates and Medicare Part D coverage gap reimbursements in the US, chargebacks and returns. Customer credits: The Company’s customers are offered various forms of consideration, including service fees and prompt payment discounts. The Company anticipates that its customers will earn prompt payment discounts and, therefore, deducts the full amount of these discounts from total gross product revenues when revenues are recognized. Service fees are also deducted from total gross product revenues as they are earned. Rebates: The Company contracts with Medicaid, other government agencies and various private organizations, or collectively, third-party payors, so that ARIKAYCE will be eligible for purchase by, or partial or full reimbursement from, such third-party payors. The Company estimates the rebates it will provide to third-party payors and deducts these estimated amounts from total gross product revenues at the time the revenues are recognized. Chargebacks: Chargebacks are discounts that occur when certain contracted customers, currently public health service institutions and federal government entities purchasing via the Federal Supply Schedule, purchase directly from the Company's specialty distributor. Contracted customers generally purchase the product at a discounted price and the specialty distributor, in turn, charges back to the Company the difference between the price initially paid by the specialty distributor and the discounted price paid by the contracted customers. The Company estimates the chargebacks it provides to the specialty distributor and deducts these estimated amounts from total gross product revenues at the time the revenues are recognized. Co-payment assistance: Patients who have commercial insurance and meet certain eligibility requirements may receive co-payment assistance. The Company accrues a liability for co-payment assistance based on actual program participation and estimates of program redemption using data provided by a third-party administrator. If any, or all, of the Company’s actual experience vary from the estimates above, the Company may need to adjust prior period accruals, affecting revenue in the period of adjustment. The Company has initiated early access programs (EAPs) in Europe and other countries, 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. Cost of product revenues (excluding amortization of intangible assets) - Prior to FDA approval of ARIKAYCE, the Company expensed all inventory related costs in the period incurred. Inventory used for clinical development purposes is expensed to research and development (R&D) expense when consumed. Cost of product revenues (excluding amortization of intangible assets) consist primarily of direct and indirect costs related to the manufacturing of ARIKAYCE sold, including third-party manufacturing costs, packaging services, freight, allocation of overhead costs, and inventory adjustment charges, in addition to royalty expenses due to PARI Pharma GmbH (PARI). Recently Adopted Accounting Pronouncements - In August 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (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 became 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 operating activities section of its consolidated statement of cash flows. The Company had no material debt extinguishment costs prior to the first quarter of 2018. The impact of adopting this standard was not material to the Company. 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 generally accepted accounting principles. ASU 2016-02 requires a lessee to 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) and early adoption was permitted. In August 2018, the FASB issued ASU 2018-11, Targeted Improvements to ASC 842 , which provided a transition option in which an entity would initially apply ASU 2016-02 at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company used the new transition option and the package of practical expedients that allowed it to not reassess: (1) whether any expired or existing contracts are or contain leases; (2) lease classification for any expired or existing leases; and (3) initial direct costs for any expired or existing leases. The Company also used the practical expedient that allows it to treat the lease and non-lease components of its leases as a single component. The Company adopted ASU 2016-02 effective January 1, 2019. The impact of the adoption of ASU 2016-02 on the consolidated balance sheet was $47.4 million . Refer to Note 6 - Leases for additional details about the Company's lease portfolio, including Topic 842 required disclosures. New Accounting Pronouncements (Not Yet Adopted)

Inventory

Inventory	3 Months Ended
	Mar. 31, 2019
Inventory Disclosure [Abstract]
Inventory	Inventory As of March 31, 2019 and December 31, 2018 , the Company's inventory balance consists of the following (in thousands): March 31, 2019 December 31, 2018 Raw materials $ 4,454 $ 2,145 Work-in-process 7,059 4,567 Finished goods 1,169 320 $ 12,682 $ 7,032

Accrued Expenses

Accrued Expenses	3 Months Ended
	Mar. 31, 2019
Payables and Accruals [Abstract]
Accrued Expenses	Accrued Expenses As of March 31, 2019 and December 31, 2018 , the Company's accrued expenses balance consist of the following (in thousands): March 31, 2019 December 31, 2018 Accrued clinical trial expenses $ 7,632 $ 6,635 Accrued professional fees 11,380 13,398 Accrued technical operation expenses 9,536 9,371 Accrued royalty payable 1,000 409 Accrued interest payable 1,663 3,631 Accrued sales allowances and related costs 2,642 818 Accrued construction costs 2,475 2,946 Other accrued expenses 1,989 1,046 $ 38,317 $ 38,254

Intangible, net

Intangible, net	3 Months Ended
	Mar. 31, 2019
Goodwill and Intangible Assets Disclosure [Abstract]
Intangible, net	Intangible, net As of March 31, 2019 , the Company's identifiable intangible assets consisted of acquired ARIKAYCE R&D and a $1.7 million milestone paid to PARI for the license to use PARI's Lamira® Nebulizer System for the delivery of ARIKAYCE to patients as a result of the FDA approval of ARIKAYCE on September 28, 2018. Total intangible assets, net was $57.4 million as of March 31, 2019 and $58.7 million as of December 31, 2018 . Intangible assets are measured at their respective fair values on the date they were recorded and, with respect to the acquired ARIKAYCE milestone, at the date of subsequent adjustments of fair value. The Company began amortizing its intangible assets October 1, 2018, over ARIKAYCE's initial regulatory exclusivity period of 12 years . A rollforward of the Company's intangible assets for the three months ended March 31, 2019 follows (in thousands): 2019 Intangible Asset January 1, Additions Amortization March 31, Acquired ARIKAYCE R&D $ 56,988 $ — $ (1,212 ) $ 55,776 PARI milestone upon FDA approval 1,687 — (36 ) 1,651 Intangible assets $ 58,675 $ — $ (1,248 ) $ 57,427

Leases

Leases	3 Months Ended
	Mar. 31, 2019
Leases [Abstract]
Leases	Leases The Company's lease portfolio consists primarily of office space, manufacturing facilities and fleet vehicles. Currently, all of the Company's leases that have commenced are classified as operating leases. The terms of its lease agreements that have commenced range from less than one year to seven years . In its assessment of the term of each such lease, the Company has not included any options to extend or terminate the lease due to the absence of economic incentives in its lease agreements. As permitted by the practical expedient in ASU 2016-02, leases that qualify for treatment as a short-term lease are expensed as incurred. These short-term leases are not material to the Company's financial position. Furthermore, the Company has elected the practical expedient to not separate lease and non-lease components for all classes of underlying assets. The Company's leases do not contain residual value guarantees and it does not sublease any of its leased assets. The Company outsources its manufacturing operations to CMOs. Upon review of the agreements with its CMOs, the Company determined that these contracts contain embedded leases for dedicated manufacturing facilities. The Company obtains substantially all of the economic benefits from the use of the manufacturing facilities, has the right to direct how and for what purpose the facility is used throughout the period of use, and the supplier does not have the right to change the operating instructions of the facility. The right-of-use asset and corresponding lease liability associated with the manufacturing facilities is the sum of the minimum guarantees over the life of the production contracts. In order to determine the appropriate discount rate for each lease, the Company determined its public credit rating and constructed debt yield curves. The debt yield curves were adjusted to reflect a collateral borrowing and differences in foreign currencies, where applicable, as well as to match the term of each lease. The table below summarizes the Company's total lease costs included in its consolidated financial statements, as well as other required quantitative disclosures (in thousands). Three Months Ended March 31, 2019 Lease cost Operating lease cost $ 3,078 Total lease cost $ 3,078 Other information: Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 3,134 Right-of-use assets obtained in exchange for new operating lease liabilities $ 47,396 Weighted average remaining lease term - operating leases (years) 5.5 Weighted average discount rate - operating leases 7.3 % The table below presents the maturity of lease liabilities on an annual basis for the remaining years of the Company's commenced lease agreements (in thousands). Year ending December 31, 2019 (remaining) $ 9,344 2020 11,000 2021 10,287 2022 6,000 2023 6,000 Thereafter 12,000 Total $ 54,631 Less: present value discount 9,563 Present value of lease liabilities $ 45,068 In addition to the Company's lease agreements that have previously commenced and are reflected in the consolidated financial statements, the Company has entered into additional lease agreements that have not yet commenced. In September 2018, the Company entered into an agreement to lease its new corporate headquarters in Bridgewater, NJ for which the initial lease term expires in June 2030. Upon commencement of the lease, which is anticipated to occur in the second half of 2019, the lease will be accounted for as a finance lease. Additionally, in October 2017, the Company entered into certain agreements with Patheon UK Limited (Patheon) related to increasing its long-term production capacity for ARIKAYCE commercial inventory. Similar to the CMO arrangements previously described, the Company has determined that this agreement with Patheon contains an embedded lease for the manufacturing facility and the specialized equipment contained therein. Costs incurred by the Company related to the agreement of $7.1 million

Debt

Debt	3 Months Ended
	Mar. 31, 2019
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 $14.2 million , were approximately $435.8 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 the following circumstances, subject to the conditions set forth in 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): (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 as of the date of issuance was calculated by measuring the fair value of a similar liability that did 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 residual 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 and has a remaining period of approximately 5.79 years . The following table presents the carrying value of the Company’s debt balance (in thousands): March 31, 2019 December 31, 2018 1.75% convertible senior notes due 2025 $ 450,000 $ 450,000 Debt issuance costs, unamortized (8,091 ) (8,440 ) Discount on debt (120,596 ) (125,002 ) Long-term debt, net $ 321,313 $ 316,558 As of March 31, 2019 , future principal repayments of the debt for each of the fiscal years through maturity were as follows (in thousands): Year Ending December 31: 2019 $ — 2020 — 2021 — 2022 — 2023 — 2024 and thereafter 450,000 $ 450,000 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 For the three months ended March 31, 2019 and March 31, 2018 , interest expense related to the Convertible Notes was $6.7 million and $5.6 million , respectively, which includes the contractual interest coupon payable semi-annually in cash, the amortization of the issuance costs, and accretion of debt discount, as described in the table below (in thousands): Three Months Ended March 31, 2019 2018 Contractual interest expense $ 1,971 $ 2,272 Amortization of debt issuance costs 349 299 Accretion of back-end fee on debt — 50 Accretion of debt discount 4,406 3,021 Total interest expense $ 6,726 $ 5,642

Shareholders' Equity

Shareholders' Equity	3 Months Ended
	Mar. 31, 2019
Equity [Abstract]
Shareholders' Equity	Shareholders’ Equity Common Stock — As of March 31, 2019 , the Company had 500,000,000 shares of common stock authorized with a par value of $0.01 per share and 77,596,384 shares of common stock issued and outstanding. In addition, as of March 31, 2019 , the Company had reserved 11,892,800 shares of common stock for issuance upon the exercise of outstanding stock options and 169,343 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 7 Debt . Preferred Stock — As of March 31, 2019 , the Company had 200,000,000 shares of preferred stock authorized with a par value of $0.01 per share and no

Stock-Based Compensation

Stock-Based Compensation	3 Months Ended
	Mar. 31, 2019
Disclosure of Compensation Related Costs, Share-based Payments [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. As of March 31, 2019 , 909,303 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. The Company has submitted a proposal to its shareholders to approve a new equity compensation plan, the 2019 Incentive Plan, at the 2019 Annual Meeting of Shareholders. The 2019 Incentive Plan, if approved, will provide for the issuance of 3,500,000 shares, plus any shares that were subject to outstanding awards under the 2017 Incentive Plan, the 2015 Incentive Plan and the 2013 Incentive Plan, as of the effective date of the 2019 Incentive Plan, that are canceled, terminate unearned, expire, are forfeited, lapse for any reason or are settled in cash without the delivery of shares. If the 2019 Incentive Plan is approved, no additional awards will be granted under the 2017 Incentive Plan. In addition, from time to time, the Company makes inducement grants of stock options to new hires, which awards are made pursuant to the NASDAQ inducement grant exception. During the three months ended March 31, 2019 , the Company granted inducement stock options covering 51,870 shares of the Company's common stock to new employees. On May 15, 2018, the 2018 Employee Stock Purchase Plan (2018 ESPP) was approved by shareholders at the Company’s Annual Meeting of Shareholders. The Company has reserved the following for issuance under the 2018 ESPP: (i) 1,000,000 shares of common stock, plus (ii) commencing on January 1, 2019 and ending on December 31, 2023, an additional number of shares to be added on the first day of each calendar year equal to the lesser of (A) 1,200,000 shares of common stock, (B) 2% of the number of outstanding shares of common stock on such date and (C) an amount determined by the administrator. Stock Options - As of March 31, 2019 , there was $43.0 million of unrecognized compensation expense related to unvested stock options, which is expected to be recognized over a weighted average period of 3.0 years . During the quarter ended September 30, 2018, performance-condition options totaling $1.1 million , or 133,334 shares, met their recognition criteria as a result of the FDA approval of ARIKAYCE and vested in full. As of March 31, 2019 , there were no performance-condition options outstanding. Restricted Stock Units — As of March 31, 2019 , there was $2.8 million of unrecognized compensation expense related to unvested RSU awards which is expected to be recognized over a weighted average period of 2.1 years . 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, 2019 and 2018 , respectively (in millions): Three Months Ended March 31, 2019 2018 Research and development expenses $ 2.2 $ 1.9 Selling, general and administrative expenses 4.7 3.8 Total $ 6.9 $ 5.7

Income Taxes

Income Taxes	3 Months Ended
	Mar. 31, 2019
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes The Company’s provision for income taxes was $ 0.2 million and $ 0.0 million for the three months ended March 31, 2019 and March 31, 2018 , respectively. The provision for income taxes in both periods was a result of certain of the Company’s international subsidiaries, which had taxable income during the three months ended March 31, 2019 and 2018 . 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 is subject to US federal and state income taxes and the statute of limitations for tax audit is open for the Company's 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, 2019 and December 31, 2018 , the Company had recorded reserves for unrecognized income tax benefits against certain deferred tax assets in the United States. However, given the Company’s valuation allowance position these reserves do not have an impact on the balance sheet as of March 31, 2019 and December 31, 2018 or the income statement for the three months ended March 31, 2019 and March 31, 2018

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2019
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Rent expense charged to operations was $0.8 million and $0.4 million for the three months ended March 31, 2019 and 2018 , respectively. Legal Proceedings

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2019
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, 2019 and December 31, 2018 were Level 1 assets comprised of cash and cash equivalents. 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. The following table shows assets and liabilities that are measured at fair value on a recurring basis and their carrying value (in millions): As of March 31, 2019 Fair Value Carrying Value Level 1 Level 2 Level 3 Cash and cash equivalents $ 420.2 $ 420.2 $ — $ — 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, 2019 and 2018 , respectively. As of March 31, 2019 and December 31, 2018 , 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 and from the assumed conversion of the Convertible Notes 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, 2019 and 2018 : Three Months Ended March 31, 2019 2018 (in thousands, except per share amounts) Numerator: Net loss $ (74,153 ) $ (68,524 ) Denominator: Weighted average common shares used in calculation of basic net loss per share: 77,541 76,619 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 77,541 76,619 Net loss per share: Basic and diluted $ (0.96 ) $ (0.89 ) The following potentially dilutive securities have been excluded from the computations of diluted weighted average common shares outstanding as of March 31, 2019 and 2018 as their effect would have been anti-dilutive (in thousands): As of March 31, 2019 2018 Stock options to purchase common stock 11,903 9,866 Unvested RSUs 170 234 Convertible debt securities 11,492 11,492
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 is exposed to risks associated with extending credit to customers related to the sale of products. The Company does not require collateral to secure amounts due from its customers. The following table presents the percentage of gross product revenue represented by the Company's three largest customers as of the quarter ended March 31, 2019 . Percentage of Total Gross Product Revenue Customer A 33% Customer B 31% Customer C 16%
Revenue Recognition	Revenue Recognition —In accordance with Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers, the Company recognizes revenue when a customer obtains control of promised goods or services, in an amount that reflects the consideration the Company expects to receive in exchange for the goods or services provided. To determine revenue recognition for arrangements within the scope of ASC 606, the Company performs the following five steps: (1) identify the contracts with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when or as the entity satisfies a performance obligation. At contract inception, the Company assesses the goods or services promised within each contract and determines those that are performance obligations and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when or as the performance obligation is satisfied. For all contracts that fall into the scope of ASC 606, the Company has identified one performance obligation: the sale of ARIKAYCE to its customers. The Company has not incurred or capitalized any incremental costs associated with obtaining contracts with customers. Product revenues consist primarily of sales of ARIKAYCE in the US. Product revenues are recognized once the Company performs and satisfies all five steps mentioned above. In October 2018, the Company began shipping ARIKAYCE to its customers in the US, which include specialty pharmacies and specialty distributors. The Company recognizes revenues for product received by its customers, net of allowances for customer credits, including prompt pay discounts, service fees, estimated rebates, including government rebates such as Medicaid rebates and Medicare Part D coverage gap reimbursements in the US, chargebacks and returns. Customer credits: The Company’s customers are offered various forms of consideration, including service fees and prompt payment discounts. The Company anticipates that its customers will earn prompt payment discounts and, therefore, deducts the full amount of these discounts from total gross product revenues when revenues are recognized. Service fees are also deducted from total gross product revenues as they are earned. Rebates: The Company contracts with Medicaid, other government agencies and various private organizations, or collectively, third-party payors, so that ARIKAYCE will be eligible for purchase by, or partial or full reimbursement from, such third-party payors. The Company estimates the rebates it will provide to third-party payors and deducts these estimated amounts from total gross product revenues at the time the revenues are recognized. Chargebacks: Chargebacks are discounts that occur when certain contracted customers, currently public health service institutions and federal government entities purchasing via the Federal Supply Schedule, purchase directly from the Company's specialty distributor. Contracted customers generally purchase the product at a discounted price and the specialty distributor, in turn, charges back to the Company the difference between the price initially paid by the specialty distributor and the discounted price paid by the contracted customers. The Company estimates the chargebacks it provides to the specialty distributor and deducts these estimated amounts from total gross product revenues at the time the revenues are recognized. Co-payment assistance: Patients who have commercial insurance and meet certain eligibility requirements may receive co-payment assistance. The Company accrues a liability for co-payment assistance based on actual program participation and estimates of program redemption using data provided by a third-party administrator. If any, or all, of the Company’s actual experience vary from the estimates above, the Company may need to adjust prior period accruals, affecting revenue in the period of adjustment.
Cost of product revenues	Cost of product revenues (excluding amortization of intangible assets) - Prior to FDA approval of ARIKAYCE, the Company expensed all inventory related costs in the period incurred. Inventory used for clinical development purposes is expensed to research and development (R&D) expense when consumed. Cost of product revenues (excluding amortization of intangible assets) consist primarily of direct and indirect costs related to the manufacturing of ARIKAYCE sold, including third-party manufacturing costs, packaging services, freight, allocation of overhead costs, and inventory adjustment charges, in addition to royalty expenses due to PARI Pharma GmbH (PARI).
Recently Adopted Accounting Pronouncements	Recently Adopted Accounting Pronouncements - In August 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (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 became 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 operating activities section of its consolidated statement of cash flows. The Company had no material debt extinguishment costs prior to the first quarter of 2018. The impact of adopting this standard was not material to the Company. 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 generally accepted accounting principles. ASU 2016-02 requires a lessee to 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) and early adoption was permitted. In August 2018, the FASB issued ASU 2018-11, Targeted Improvements to ASC 842 , which provided a transition option in which an entity would initially apply ASU 2016-02 at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company used the new transition option and the package of practical expedients that allowed it to not reassess: (1) whether any expired or existing contracts are or contain leases; (2) lease classification for any expired or existing leases; and (3) initial direct costs for any expired or existing leases. The Company also used the practical expedient that allows it to treat the lease and non-lease components of its leases as a single component. The Company adopted ASU 2016-02 effective January 1, 2019. The impact of the adoption of ASU 2016-02 on the consolidated balance sheet was $47.4 million . Refer to Note 6 - Leases for additional details about the Company's lease portfolio, including Topic 842 required disclosures. New Accounting Pronouncements (Not Yet Adopted)

Summary of Significant Accoun_3

Summary of Significant Accounting Policies (Tables)	3 Months Ended
	Mar. 31, 2019
Accounting Policies [Abstract]
Schedule of Carrying Value and Fair Value of Assets and Liabilities	The following table shows assets and liabilities that are measured at fair value on a recurring basis and their carrying value (in millions): As of March 31, 2019 Fair Value Carrying Value Level 1 Level 2 Level 3 Cash and cash equivalents $ 420.2 $ 420.2 $ — $ —
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, 2019 and 2018 : Three Months Ended March 31, 2019 2018 (in thousands, except per share amounts) Numerator: Net loss $ (74,153 ) $ (68,524 ) Denominator: Weighted average common shares used in calculation of basic net loss per share: 77,541 76,619 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 77,541 76,619 Net loss per share: Basic and diluted $ (0.96 ) $ (0.89 )
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, 2019 and 2018 as their effect would have been anti-dilutive (in thousands): As of March 31, 2019 2018 Stock options to purchase common stock 11,903 9,866 Unvested RSUs 170 234 Convertible debt securities 11,492 11,492
Schedules of Concentration of Risk, by Risk Factor	The following table presents the percentage of gross product revenue represented by the Company's three largest customers as of the quarter ended March 31, 2019 . Percentage of Total Gross Product Revenue Customer A 33% Customer B 31% Customer C 16%

Inventory (Tables)

Inventory (Tables)	3 Months Ended
	Mar. 31, 2019
Inventory Disclosure [Abstract]
Schedule of Inventory, Current	As of March 31, 2019 and December 31, 2018 , the Company's inventory balance consists of the following (in thousands): March 31, 2019 December 31, 2018 Raw materials $ 4,454 $ 2,145 Work-in-process 7,059 4,567 Finished goods 1,169 320 $ 12,682 $ 7,032

Accrued Expenses (Tables)

Accrued Expenses (Tables)	3 Months Ended
	Mar. 31, 2019
Payables and Accruals [Abstract]
Schedule of Accrued Expenses	As of March 31, 2019 and December 31, 2018 , the Company's accrued expenses balance consist of the following (in thousands): March 31, 2019 December 31, 2018 Accrued clinical trial expenses $ 7,632 $ 6,635 Accrued professional fees 11,380 13,398 Accrued technical operation expenses 9,536 9,371 Accrued royalty payable 1,000 409 Accrued interest payable 1,663 3,631 Accrued sales allowances and related costs 2,642 818 Accrued construction costs 2,475 2,946 Other accrued expenses 1,989 1,046 $ 38,317 $ 38,254

Intangible, net (Tables)

Intangible, net (Tables)	3 Months Ended
	Mar. 31, 2019
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of Intangible Assets	A rollforward of the Company's intangible assets for the three months ended March 31, 2019 follows (in thousands): 2019 Intangible Asset January 1, Additions Amortization March 31, Acquired ARIKAYCE R&D $ 56,988 $ — $ (1,212 ) $ 55,776 PARI milestone upon FDA approval 1,687 — (36 ) 1,651 Intangible assets $ 58,675 $ — $ (1,248 ) $ 57,427

Leases (Tables)

Leases (Tables)	3 Months Ended
	Mar. 31, 2019
Leases [Abstract]
Lease, Costs	The table below summarizes the Company's total lease costs included in its consolidated financial statements, as well as other required quantitative disclosures (in thousands). Three Months Ended March 31, 2019 Lease cost Operating lease cost $ 3,078 Total lease cost $ 3,078 Other information: Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 3,134 Right-of-use assets obtained in exchange for new operating lease liabilities $ 47,396 Weighted average remaining lease term - operating leases (years) 5.5 Weighted average discount rate - operating leases 7.3 %
Maturity of Operating Lease Liabilities	The table below presents the maturity of lease liabilities on an annual basis for the remaining years of the Company's commenced lease agreements (in thousands). Year ending December 31, 2019 (remaining) $ 9,344 2020 11,000 2021 10,287 2022 6,000 2023 6,000 Thereafter 12,000 Total $ 54,631 Less: present value discount 9,563 Present value of lease liabilities $ 45,068

Debt (Tables)

Debt (Tables)	3 Months Ended
	Mar. 31, 2019
Debt Disclosure [Abstract]
Components of Debt Balance	The following table presents the carrying value of the Company’s debt balance (in thousands): March 31, 2019 December 31, 2018 1.75% convertible senior notes due 2025 $ 450,000 $ 450,000 Debt issuance costs, unamortized (8,091 ) (8,440 ) Discount on debt (120,596 ) (125,002 ) Long-term debt, net $ 321,313 $ 316,558
Schedule of Future Principal Repayments of Debt	As of March 31, 2019 , future principal repayments of the debt for each of the fiscal years through maturity were as follows (in thousands): Year Ending December 31: 2019 $ — 2020 — 2021 — 2022 — 2023 — 2024 and thereafter 450,000 $ 450,000
Summary of Interest Expense	For the three months ended March 31, 2019 and March 31, 2018 , interest expense related to the Convertible Notes was $6.7 million and $5.6 million , respectively, which includes the contractual interest coupon payable semi-annually in cash, the amortization of the issuance costs, and accretion of debt discount, as described in the table below (in thousands): Three Months Ended March 31, 2019 2018 Contractual interest expense $ 1,971 $ 2,272 Amortization of debt issuance costs 349 299 Accretion of back-end fee on debt — 50 Accretion of debt discount 4,406 3,021 Total interest expense $ 6,726 $ 5,642

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	3 Months Ended
	Mar. 31, 2019
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
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, 2019 and 2018 , respectively (in millions): Three Months Ended March 31, 2019 2018 Research and development expenses $ 2.2 $ 1.9 Selling, general and administrative expenses 4.7 3.8 Total $ 6.9 $ 5.7

The Company and Basis of Pres_2

The Company and Basis of Presentation (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Cash and cash equivalents	$ 420,231		$ 495,072
Net loss	$ 74,153	$ 68,524

Summary of Significant Accoun_4

Summary of Significant Accounting Policies - Fair Value Measurements (Details)	3 Months Ended
	Mar. 31, 2019USD ($)security	Mar. 31, 2018USD ($)	Dec. 31, 2018USD ($)security	Jan. 31, 2018USD ($)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
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
Unamortized portion of debt discount	$ 120,596,000		$ 125,002,000
Convertible Notes
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Unamortized portion of debt discount	120,600,000
Face amount	450,000,000
Recurring basis | Carrying Value | Level 1
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Cash and cash equivalents	420,200,000
Recurring basis | Carrying Value | Level 2
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Convertible Notes ($450.0 face value)	321,300,000
Recurring basis | Fair Value | Level 1
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Cash and cash equivalents	420,200,000
Recurring basis | Fair Value | Level 2
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Cash and cash equivalents	0
Convertible Notes ($450.0 face value)	438,000,000
Recurring basis | Fair Value | Level 3
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Cash and cash equivalents	$ 0
1.75 convertible senior notes due 2025 | Convertible Notes
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Proceeds from issuance of 1.75% convertible senior notes due 2025	1.75%
Convertible Notes ($450.0 face value)				$ 309,100,000
Face amount				$ 450,000,000

Summary of Significant Accoun_5

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, 2019	Mar. 31, 2018
Numerator:
Net loss	$ (74,153)	$ (68,524)
Denominator:
Weighted average common shares used in calculation of basic net loss per share (in shares)	77,541	76,619
Effect of dilutive securities:
Dilutive securities, convertible debt (in shares)	0	0
Weighted average common shares outstanding used in calculation of diluted net loss per share (in shares)	77,541	76,619
Net loss per share:
Basic and diluted (in dollars per share)	$ (0.96)	$ (0.89)
Common stock options
Effect of dilutive securities:
Dilutive securities, share-based payment (in shares)	0	0
RSUs
Effect of dilutive securities:
Dilutive securities, share-based payment (in shares)	0	0

Summary of Significant Accoun_6

Summary of Significant Accounting Policies - Anti-dilutive Securities (Details) - shares shares in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
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)	11,903	9,866
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 (in shares)	170	234
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 (in shares)	11,492	11,492

Summary of Significant Accoun_7

Summary of Significant Accounting Policies - Concentration Risk (Details) - Sales Revenue, Product Line - Customer Concentration Risk	3 Months Ended
	Mar. 31, 2019
Customer A
Concentration Risk [Line Items]
Concentration risk, percentage	33.00%
Customer B
Concentration Risk [Line Items]
Concentration risk, percentage	31.00%
Customer C
Concentration Risk [Line Items]
Concentration risk, percentage	16.00%

Summary of Significant Accoun_8

Summary of Significant Accounting Policies - Recently Adopted Accounting Pronouncements (Details) - USD ($) $ in Thousands	Jan. 01, 2019	Mar. 31, 2019	Mar. 31, 2018
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Loss on extinguishment of debt		$ 0	$ 2,209
Right-of-use assets obtained in exchange for new operating lease liabilities		$ 47,396
Accounting Standards Update 2016-02
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Right-of-use assets obtained in exchange for new operating lease liabilities	$ 47,400

Inventory - Schedule of Invento

Inventory - Schedule of Inventory, Current (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Inventory Disclosure [Abstract]
Raw materials	$ 4,454	$ 2,145
Work-in-process	7,059	4,567
Finished goods	1,169	320
Inventory, Net	$ 12,682	$ 7,032

Accrued Expenses (Details)

Accrued Expenses (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Payables and Accruals [Abstract]
Accrued clinical trial expenses	$ 7,632	$ 6,635
Accrued professional fees	11,380	13,398
Accrued technical operation expenses	9,536	9,371
Accrued royalty payable	1,000	409
Accrued interest payable	1,663	3,631
Accrued sales allowances and related costs	2,642	818
Accrued construction costs	2,475	2,946
Other accrued expenses	1,989	1,046
Total accrued expenses	$ 38,317	$ 38,254

Intangible, net (Details)

Intangible, net (Details) - USD ($) $ in Thousands	Sep. 28, 2018	Mar. 31, 2019	Dec. 31, 2018	Jan. 01, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
Accrued milestone payment	$ 1,700
Intangibles, net		$ 57,427	$ 58,675
Intangible assets estimated useful life		12 years
Amortization of intangible assets, 2019		$ 5,000
Amortization of intangible assets, 2020		5,000
Amortization of intangible assets, 2021		5,000
Amortization of intangible assets, 2022		5,000
Amortization of intangible assets, 2023		5,000
Finite-Lived Intangible Assets [Line Items]
Intangibles, gross				$ 58,675
Additions		0
Amortization		(1,248)
Intangibles, net		57,427	$ 58,675
Acquired ARIKAYCE R&D
Goodwill and Intangible Assets Disclosure [Abstract]
Intangibles, net		55,776
Finite-Lived Intangible Assets [Line Items]
Intangibles, gross				56,988
Additions		0
Amortization		(1,212)
Intangibles, net		55,776
PARI milestone upon FDA approval
Goodwill and Intangible Assets Disclosure [Abstract]
Intangibles, net		1,651
Finite-Lived Intangible Assets [Line Items]
Intangibles, gross				$ 1,687
Additions		0
Amortization		(36)
Intangibles, net		$ 1,651

Leases - Lease, costs (Details)

Leases - Lease, costs (Details) (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2019USD ($)
Leases [Abstract]
Operating lease cost	$ 3,078
Total lease cost	3,078
Operating cash flows for operating leases	3,134
Right-of-use assets obtained in exchange for new operating lease liabilities	$ 47,396
Weighted average remaining lease term - operating leases (years)	5 years 6 months
Weighted average discount rate - operating leases	7.30%

Leases - Maturities of Operatin

Leases - Maturities of Operating Lease Liabilities (Details) $ in Thousands	Mar. 31, 2019USD ($)
Leases [Abstract]
Remainder of 2019	$ 9,344
2020	11,000
2021	10,287
2022	6,000
2023	6,000
Thereafter	12,000
Total lease payments	54,631
Less: present value discount	9,563
Present value of lease liabilities	$ 45,068

Leases - Narrative (Details)

Leases - Narrative (Details) $ in Millions	3 Months Ended
	Mar. 31, 2019USD ($)
Lessee, Lease, Description [Line Items]
Lease cost, future right-of-use asset	$ 7.1
Minimum
Lessee, Lease, Description [Line Items]
Remaining lease term	1 year
Maximum
Lessee, Lease, Description [Line Items]
Remaining lease term	7 years

Debt - Narrative (Details)

Debt - Narrative (Details)	Feb. 28, 2018USD ($)	Feb. 28, 2018USD ($)	Jan. 31, 2018USD ($)day$ / shares	Mar. 31, 2019USD ($)	Mar. 31, 2018USD ($)	Dec. 31, 2018USD ($)
Debt Instrument [Line Items]
Underwriting discounts and commissions and other offering expenses				$ 8,091,000		$ 8,440,000
Net proceeds				0	$ 450,000,000
Repayment of debt				0	55,000,000
Loss on extinguishment of debt				0	2,209,000
Interest expense				6,726,000	5,642,000
1.75 convertible senior notes due 2025
Debt Instrument [Line Items]
Initial conversion rate			0.0255384
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
Convertible Notes
Debt Instrument [Line Items]
Aggregate principal amount				450,000,000
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			14,200,000
Net proceeds			$ 435,800,000
Initial conversion price (in dollars per share) | $ / shares			$ 39.16
Convertible Notes ($450.0 face value)			$ 309,100,000
Effective interest rate			7.60%
Equity component of convertible debt			$ 140,900,000
Remaining discount amortization period			5 years 9 months 14 days
Interest expense				$ 6,700,000	$ 5,600,000
Convertible Notes | Conversion Term (i) | 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%
Convertible Notes | Conversion Term (ii) | 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%
Convertible Notes | Conversion Term (iii) | 1.75 convertible senior notes due 2025
Debt Instrument [Line Items]
Threshold trading days following fundamental change | day			30
Convertible Notes | Conversion Term (iv) | 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, 2019	Dec. 31, 2018	Jan. 31, 2018
Debt Instrument [Line Items]
1.75% convertible senior notes due 2025	$ 450,000	$ 450,000
Debt issuance costs, unamortized	(8,091)	(8,440)
Discount on debt	(120,596)	(125,002)
Long-term debt, net	321,313	$ 316,558
Convertible Notes
Debt Instrument [Line Items]
Discount on debt	$ (120,600)
Convertible Notes | 1.75 convertible senior notes due 2025
Debt Instrument [Line Items]
Interest rate (as a percent)	1.75%
Debt issuance costs, unamortized			$ (14,200)

Debt - Future Principal Repayme

Debt - Future Principal Repayments of Debt (Details) $ in Thousands	Mar. 31, 2019USD ($)
Year Ending December 31:
2019	$ 0
2020	0
2021	0
2022	0
2023	0
2024 and thereafter	450,000
Total	$ 450,000

Debt - Interest Expense (Detail

Debt - Interest Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Debt Disclosure [Abstract]
Contractual interest expense	$ 1,971	$ 2,272
Amortization of debt issuance costs	349	299
Accretion of back-end fee on debt	0	50
Accretion of debt discount	4,406	3,021
Total interest expense	$ 6,726	$ 5,642

Shareholders' Equity - Narrativ

Shareholders' Equity - Narrative (Details) - USD ($)	Mar. 31, 2019	Dec. 31, 2018	Jan. 31, 2018
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)	77,596,384	77,307,251
Common stock, outstanding shares (in shares)	77,596,384	77,307,251
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
Aggregate principal amount	$ 450,000,000
Stock options to purchase common stock
Class of Stock [Line Items]
Common stock shares reserved for issuance (in shares)	11,892,800
Unvested RSUs
Class of Stock [Line Items]
Common stock shares reserved for issuance (in shares)	169,343
1.75 convertible senior notes due 2025 | Convertible debt securities
Class of Stock [Line Items]
Aggregate principal amount			$ 450,000,000
Convertible Notes ($450.0 face value)			309,100,000
Equity component of convertible debt			$ 140,900,000

Stock-Based Compensation - Narr

Stock-Based Compensation - Narrative (Details) - USD ($) $ in Millions	May 15, 2018	Mar. 31, 2019	Dec. 31, 2018
Stock-Based Compensation
Shares available for grant (in shares)		909,303
Inducement stock options granted to new employees (in shares)		51,870
Stock options to purchase common stock
Stock-Based Compensation
Unrecognized compensation expense related to unvested stock options		$ 43
Expected weighted average period for recognized and unrecognized compensation expense		3 years
Performance options
Stock-Based Compensation
Value of options vested		$ 1.1
Options vested (in shares)		133,334
Options outstanding (in shares)			0
2018 Employee Stock Purchase Plan
Stock-Based Compensation
Shares of common stock, maximum authorized for issuance (in shares)	1,000,000
Number of additional shares authorized (in shares)	1,200,000
Percentage of outstanding shares	2.00%
Pro Forma | 2019 Incentive Plan
Stock-Based Compensation
Shares of common stock, maximum authorized for issuance (in shares)		3,500,000
Pro Forma | 2017 Incentive Plan
Stock-Based Compensation
Shares of common stock, additional options granted (in shares)		0

Stock-Based Compensation - Rest

Stock-Based Compensation - Restricted Stock and Restricted Stock Units (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Stock options and RSUs
Stock-Based Compensation
Allocated share-based compensation expense	$ 6.9	$ 5.7
Stock options and RSUs | Research and development expenses
Stock-Based Compensation
Allocated share-based compensation expense	2.2	1.9
Stock options and RSUs | Selling, general and administrative expenses
Stock-Based Compensation
Allocated share-based compensation expense	4.7	$ 3.8
Unvested RSUs
Stock-Based Compensation
Unrecognized compensation expense	$ 2.8
Expected weighted average period for recognized and unrecognized compensation expense	2 years 1 month 6 days

Income Taxes (Details)

Income Taxes (Details) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Income Tax Disclosure [Abstract]
Provision for income taxes	$ 215,000	$ 48,000
Deferred tax benefit	$ 0

Commitments and Contingencies -

Commitments and Contingencies - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Commitments and Contingencies Disclosure [Abstract]
Rent expense charged to operations	$ 0.8	$ 0.4