Insmed (INSM) 10-Q 29 Oct 20 2020 Q3 Quarterly report Financial data

Cover Page

Cover Page - shares	9 Months Ended
	Sep. 30, 2020	Oct. 26, 2020
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2020
Document Transition Report	false
Entity File Number	000-30739
Entity Registrant Name	INSMED INC
Entity Incorporation, State or Country Code	VA
Entity Tax Identification Number	54-1972729
Entity Address, Address Line One	700 US Highway 202/206
Entity Address, City or Town	Bridgewater
Entity Address, State or Province	NJ
Entity Address, Postal Zip Code	08807
City Area Code	908
Local Phone Number	977-9900
Title of 12(b) Security	Common stock, par value $0.01 per share
Trading Symbol	INSM
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Emerging Growth Company	false
Entity Small Business	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding (in shares)		101,867,707
Entity Central Index Key	0001104506
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q3
Amendment Flag	false

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 588,753	$ 487,429
Accounts receivable	15,196	19,232
Inventory	43,483	28,313
Prepaid expenses and other current assets	19,717	20,220
Total current assets	667,149	555,194
Intangibles, net	49,937	53,682
Fixed assets, net	55,314	60,180
Finance lease right-of-use assets	10,603	15,256
Operating lease right-of-use assets	32,505	37,673
Other assets	25,207	20,314
Total assets	840,715	742,299
Current liabilities:
Accounts payable	22,147	13,184
Accrued expenses	35,149	40,375
Accrued compensation	16,283	19,140
Finance lease liabilities	582	1,221
Operating lease liabilities	9,741	11,040
Other current liabilities	0	280
Total current liabilities	83,902	85,240
Debt, long-term	351,127	335,940
Finance lease liabilities, long-term	15,003	19,529
Operating lease liabilities, long-term	23,198	29,308
Other long-term liabilities	10,424	10,608
Total liabilities	483,654	480,625
Shareholders’ equity:
Common stock, $0.01 par value; 500,000,000 authorized shares, 101,803,701 and 89,682,387 issued and outstanding shares at September 30, 2020 and December 31, 2019, respectively	1,018	897
Additional paid-in capital	2,084,305	1,797,286
Accumulated deficit	(1,728,376)	(1,536,499)
Accumulated other comprehensive income (loss)	114	(10)
Total shareholders’ equity	357,061	261,674
Total liabilities and shareholders’ equity	$ 840,715	$ 742,299

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2020	Dec. 31, 2019
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)	101,803,701	89,682,387
Common stock, outstanding shares (in shares)	101,803,701	89,682,387

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Loss (unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Statement of Comprehensive Income [Abstract]
Revenues, net	$ 43,643	$ 38,885	$ 122,998	$ 90,759
Cost of product revenues (excluding amortization of intangible assets)	10,622	6,437	29,010	15,506
Gross profit	33,021	32,448	93,988	75,253
Operating expenses:
Research and development	41,411	34,340	113,343	99,081
Selling, general and administrative	46,585	53,347	147,594	160,590
Amortization of intangible assets	1,248	1,249	3,745	3,745
Total operating expenses	89,244	88,936	264,682	263,416
Operating loss	(56,223)	(56,488)	(170,694)	(188,163)
Investment income	70	2,885	1,677	7,879
Interest expense	(7,185)	(6,846)	(22,065)	(20,357)
Other expense, net	(4)	(85)	(14)	(255)
Loss before income taxes	(63,342)	(60,534)	(191,096)	(200,896)
Provision for income taxes	317	148	781	453
Net loss	$ (63,659)	$ (60,682)	$ (191,877)	$ (201,349)
Basic and diluted net loss per share (in dollars per share)	$ (0.63)	$ (0.68)	$ (2)	$ (2.43)
Weighted average basic and diluted common shares outstanding (in shares)	101,615	89,245	96,029	82,907
Net loss	$ (63,659)	$ (60,682)	$ (191,877)	$ (201,349)
Other comprehensive income (loss):
Foreign currency translation gains (losses)	212	(1)	124	1
Total comprehensive loss	$ (63,447)	$ (60,683)	$ (191,753)	$ (201,348)

Consolidated Statements of Shar

Consolidated Statements of Shareholders' Equity (unaudited) - USD ($) shares in Thousands, $ in Thousands	Total	Stock Options and ESPP Shares	Common Stock	Common StockStock Options and ESPP Shares	Additional Paid-in Capital	Additional Paid-in CapitalStock Options and ESPP Shares	Accumulated Deficit	Accumulated Other Comprehensive Income (Loss)
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	(201,349)						(201,349)
Other comprehensive income (loss)	1							1
Exercise of stock options and ESPP shares (in shares)				1,266
Exercise of stock options and ESPP shares		$ 14,965		$ 12		$ 14,953
Net proceeds from issuance of common stock	261,074		$ 107		260,967
Net proceeds from issuance of common stock (in shares)			10,658
Issuance of common stock for vesting of RSUs	1		$ 1
Issuance of common stock for vesting of RSUs (in shares)			79
Stock compensation expense	21,083				21,083
Balance at Sep. 30, 2019	304,041		$ 893		1,786,667		(1,483,511)	(8)
Balance (in shares) at Sep. 30, 2019			89,311
Balance at Jun. 30, 2019	356,573		$ 892		1,778,517		(1,422,829)	(7)
Balance (in shares) at Jun. 30, 2019			89,207
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]
Net loss	(60,682)						(60,682)
Other comprehensive income (loss)	(1)							(1)
Exercise of stock options and ESPP shares (in shares)				103
Exercise of stock options and ESPP shares		1,461		$ 1		1,460
Net proceeds from issuance of common stock	(104)				(104)
Issuance of common stock for vesting of RSUs	0
Issuance of common stock for vesting of RSUs (in shares)			1
Stock compensation expense	6,794				6,794
Balance at Sep. 30, 2019	304,041		$ 893		1,786,667		(1,483,511)	(8)
Balance (in shares) at Sep. 30, 2019			89,311
Balance at Dec. 31, 2019	261,674		$ 897		1,797,286		(1,536,499)	(10)
Balance (in shares) at Dec. 31, 2019			89,682
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]
Net loss	(191,877)						(191,877)
Other comprehensive income (loss)	124							124
Exercise of stock options and ESPP shares (in shares)				841
Exercise of stock options and ESPP shares		13,895		$ 9		13,886
Net proceeds from issuance of common stock	245,865		$ 111		245,754
Net proceeds from issuance of common stock (in shares)			11,155
Issuance of common stock for vesting of RSUs	1		$ 1
Issuance of common stock for vesting of RSUs (in shares)			126
Stock compensation expense	27,379				27,379
Balance at Sep. 30, 2020	357,061		$ 1,018		2,084,305		(1,728,376)	114
Balance (in shares) at Sep. 30, 2020			101,804
Balance at Jun. 30, 2020	405,318		$ 1,014		2,069,119		(1,664,717)	(98)
Balance (in shares) at Jun. 30, 2020			101,434
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]
Net loss	(63,659)						(63,659)
Other comprehensive income (loss)	212							212
Exercise of stock options and ESPP shares (in shares)				369
Exercise of stock options and ESPP shares		$ 6,328		$ 4		$ 6,324
Net proceeds from issuance of common stock	(47)				(47)
Issuance of common stock for vesting of RSUs	0
Issuance of common stock for vesting of RSUs (in shares)			1
Stock compensation expense	8,909				8,909
Balance at Sep. 30, 2020	$ 357,061		$ 1,018		$ 2,084,305		$ (1,728,376)	$ 114
Balance (in shares) at Sep. 30, 2020			101,804

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Operating activities
Net loss	$ (191,877)	$ (201,349)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	6,829	3,249
Amortization of intangible assets	3,745	3,745
Stock-based compensation expense	27,379	21,083
Amortization of debt issuance costs	1,048	1,047
Accretion of debt discount	14,139	13,398
Finance lease amortization expense	809	0
Noncash operating lease expense	5,168	6,938
Changes in operating assets and liabilities:
Accounts receivable	4,036	(9,831)
Inventory	(15,116)	(16,281)
Prepaid expenses and other current assets	631	(10,156)
Other assets	(4,786)	(15,305)
Accounts payable	9,120	1,410
Accrued expenses and other	(10,613)	4,061
Accrued compensation	(3,068)	(8,254)
Net cash used in operating activities	(152,556)	(206,245)
Investing activities
Purchase of fixed assets	(5,307)	(29,230)
Net cash used in investing activities	(5,307)	(29,230)
Financing activities
Proceeds from exercise of stock options, ESPP, and RSU vesting	13,896	14,966
Proceeds from issuance of common stock, net	245,865	261,074
Payments of finance lease principal	(769)	0
Net cash provided by financing activities	258,992	276,040
Effect of exchange rates on cash and cash equivalents	195	(5)
Net increase in cash and cash equivalents	101,324	40,560
Cash and cash equivalents at beginning of period	487,429	495,072
Cash and cash equivalents at end of period	588,753	535,632
Supplemental disclosures of cash flow information:
Cash paid for interest	8,847	7,880
Cash paid for income taxes	$ 780	$ 320

The Company and Basis of Presen

The Company and Basis of Presentation	9 Months Ended
	Sep. 30, 2020
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, is approved in the United States as ARIKAYCE (amikacin liposome inhalation suspension) and in the EU as ARIKAYCE® Liposomal 590 mg Nebuliser Dispersion. ARIKAYCE received accelerated approval in the United States (US) in September 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 in a refractory setting. In October 2020, the European Commission (EC) approved ARIKAYCE for the treatment of nontuberculous mycobacterial (NTM) lung infections caused by MAC in adults with limited treatment options who do not have cystic fibrosis. NTM lung disease caused by MAC (which the Company refers to as 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 brensocat ib (formerly known as INS1007) and treprostinil palmitil inhalation powder (TPIP) (formerly known as INS1009). Brensocatib is a novel oral, reversible inhibitor of dipeptidyl peptidase 1 with therapeutic potential in bronchiectasis and other inflammatory diseases. TPIP is an inhaled formulation of the treprostinil prodrug treprostinil palmitil which may offer a differentiated product profile for pulmonary arterial hypertension and other rare pulmonary disorders. 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, France, Germany, Ireland, Italy, the Netherlands, the United Kingdom (UK), Switzerland, Japan and Bermuda. 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, 2019 . 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. All intercompany transactions and balances have been eliminated in consolidation and certain prior year amounts have been reclassified to conform to the current year presentation. The Company had $588.8 million in cash and cash equivalents as of September 30, 2020 and reported a net loss of $191.9 million for the nine months ended September 30, 2020. 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 at its US and certain international entities while funding research and development (R&D) activities for ARIKAYCE, brensocatib, TPIP and its other pipeline programs, continuing and commencing commercialization activities for ARIKAYCE in the US and Europe, respectively, continuing to invest in pre-commercial and regulatory activities for ARIKAYCE in 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 continued commercialization of ARIKAYCE and additional clinical trials related to ARIKAYCE, to develop brensocatib and TPIP and to develop, acquire, in-license or co-promote other products or product candidates, including those 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. The Company believes it currently has sufficient funds to meet its financial needs for at least the next 12 months. Risks and Uncertainties - There are many uncertainties regarding the novel coronavirus (COVID-19) pandemic, and the Company is closely monitoring the impact of the pandemic on all aspects of its business, including how the pandemic will impact its patients, employees, suppliers, vendors, business partners and distribution channels. While the pandemic did not materially affect the Company's financial results and business operations for the nine months ended September 30, 2020, the Company is unable to predict the impact that COVID-19 will have on its financial position and operating results in future

Summary of Significant Accounti

Summary of Significant Accounting Policies	9 Months Ended
	Sep. 30, 2020
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, 2019 : 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 September 30, 2020 and December 31, 2019 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 September 30, 2020 Fair Value Carrying Value Level 1 Level 2 Level 3 Cash and cash equivalents $ 588.8 $ 588.8 $ — $ — As of December 31, 2019 Fair Value Carrying Value Level 1 Level 2 Level 3 Cash and cash equivalents $ 487.4 $ 487.4 $ — $ — 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 nine months ended September 30, 2020 and 2019, respectively. As of September 30, 2020 and December 31, 2019, 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 Company's 1.75% convertible senior notes due 2025 (the Convertible Notes) (categorized as a Level 2 liability for fair value measurement purposes) as of September 30, 2020 was $505.5 million, determined using current market factors and the ability of the Company to obtain debt on comparable terms to the Convertible Notes. The $351.1 million carrying value of the Convertibles Notes as of September 30, 2020 excludes the $92.9 million and $6.0 million of the unamortized portion of the debt discount and issuance costs, respectively. 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, 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 and nine months ended September 30, 2020 and 2019: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (in thousands, except per share amounts) Numerator: Net loss $ (63,659) $ (60,682) $ (191,877) $ (201,349) Denominator: Weighted average common shares used in calculation of basic net loss per share: 101,615 89,245 96,029 82,907 Effect of dilutive securities: Common stock options — — — — Restricted stock and RSUs — — — — Convertible debt securities — — — — Weighted average common shares outstanding used in calculation of diluted net loss per share 101,615 89,245 96,029 82,907 Net loss per share: Basic and diluted $ (0.63) $ (0.68) $ (2.00) $ (2.43) The following potentially dilutive securities have been excluded from the computations of diluted weighted average common shares outstanding as of September 30, 2020 and 2019 as their effect would have been anti-dilutive (in thousands): As of September 30, 2020 2019 Common stock options 13,047 10,773 Unvested restricted stock and RSUs 853 460 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 Company uses an expected loss methodology to calculate allowances for trade receivables. The Company's measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. The Company does not currently have a material allowance for collectible trade receivables. The following table presents the percentage of total gross product revenue represented by the Company's three largest customers as of the nine months ended September 30, 2020 and September 30, 2019. September 30, 2020 September 30, 2019 Customer A 28% 31% Customer B 26% 21% Customer C 23% 28% 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 manufacturers, 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. The Company's customers in the US include specialty pharmacies and specialty distributors. Revenue is recorded at net selling price (transaction price), which includes estimates of variable consideration for which reserves are established for (a) customer credits, such as invoice discounts for prompt pay and specialty pharmacies fees, (b) estimated government rebates, such as Medicaid and Medicare Part D reimbursements, and estimated managed care rebates, (c) estimated chargebacks, and (d) estimated costs of co-payment assistance. These reserves are based on the amounts earned or to be claimed on the related sales and are classified as reductions of accounts receivable (prompt pay discounts and chargebacks), prepaid expenses (co-payment assistance), or as a current liability (rebates). Where appropriate, these estimates take into consideration a range of possible outcomes which are probability-weighted for relevant factors such as the Company's historical experience, current contractual and statutory requirements, and forecasted customer buying and payment patterns. Overall, these reserves reflect the Company's best estimates of the amount of consideration to which it is entitled based on the terms of the applicable contract. The amount of variable consideration included in the transaction price may be constrained and is included in the net sales price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. Actual amounts of consideration ultimately received may differ from the Company's estimates. If actual results in the future vary from estimates, the Company adjusts these estimates, which would affect net product revenue and earnings in the period such variances become known. Customer credits: The Company's customers are offered various forms of consideration, including fees for enhanced services and prompt payment discounts. The payment terms for sales to specialty pharmacies for prompt payment discounts and fees for services are based on contractual rates agreed with the respective specialty pharmacies. The Company anticipates that its customers will earn these discounts and fees and, therefore, deducts the full amount of these discounts and fees from total gross product revenues at the time such revenues are recognized. Rebates: The Company contracts with government agencies and managed care 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. These reserves are recorded in the same period in which the revenue is recognized, resulting in a reduction of product revenue and the establishment of a current liability. The current liability is included in accrued expenses on the consolidated balance sheets. The Company estimates the rebates that it will provide to third-party payors based upon (i) the Company's contracts with these third-party payors, (ii) the government mandated discounts applicable to government-funded programs, (iii) a range of possible outcomes that are probability-weighted for the estimated payor mix, and (iv) information obtained from the Company's specialty pharmacies. 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 the specialty distributor initially paid and the discounted price paid by the contracted customers. The Company estimates chargebacks provided to the specialty distributor and deducts these estimated amounts from gross product revenues, and from accounts receivable, at the time revenues are recognized. Co-payment assistance: Patients who have commercial insurance and meet certain eligibility requirements may receive co-payment assistance. Based upon the terms of the program and information regarding programs provided for similar specialty pharmaceutical products, the Company estimates the average co-pay mitigation amounts and the percentage of patients that it expects to participate in the program in order to establish accruals for co-payment assistance. These reserves are recorded in the same period in which the related revenue is recognized, resulting in a reduction of product revenue. The Company adjusts its accruals for co-pay assistance based on actual redemption activity and estimates of future redemptions related to sales in the current period. If any, or all, of the Company's actual experience varies from its estimates, the Company may need to adjust prior period accruals, affecting revenue in the period of adjustment. The Company also recognizes revenue related to certain early access programs (EAPs) in Europe, consisting of sales to the French National Agency for Medicines and Health Products Safety, which granted ARIKAYCE a Temporary Authorization for Use (Autorisation Temporaire d'Utilisation, or ATU) and from the named patient program in Germany and other countries. EAPs are intended to make products available on a named patient basis before they are commercially available in accordance with local regulations. Inventory and Cost of Product Revenues (excluding amortization of intangible assets) - Inventory is stated at the lower of cost and net realizable value. The Company began capitalizing inventory costs following FDA approval of ARIKAYCE in September 2018. Inventory is sold on a first-in, first-out (FIFO) basis. The Company periodically reviews inventory for expiry and obsolescence and, if necessary, writes down accordingly. If quality specifications are not met during the manufacturing process, such inventory is written off to cost of product revenues (excluding amortization of intangible assets) in the period identified. 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, and allocation of overhead costs, in addition to royalty expenses and revenue-based milestone payments. Cost is determined using a standard cost method, which approximates actual cost, and assumes a FIFO flow of goods. 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 R&D expense when consumed. Leases - 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 (ROU) asset representing its right to use the underlying asset for the lease term on the balance sheet. A lease is a contract, or part of a contract, that conveys the right to control the use of explicitly or implicitly identified property, plant or equipment in exchange for consideration. Control of an asset is conveyed to the Company if the Company obtains the right to obtain substantially all of the economic benefits of the asset or the right to direct the use of the asset. The Company recognizes ROU assets and lease liabilities at the lease commencement date based on the present value of future, fixed lease payments over the term of the arrangement. ROU assets are amortized on a straight-line basis over the term of the lease or are amortized based on consumption, if this approach is more representative of the pattern in which benefit is expected to be derived from the underlying asset. Lease liabilities accrete to yield and are reduced at the time when the lease payment is payable to the vendor. Variable lease payments are recognized at the time when the event giving rise to the payment occurs and are recognized in the statement of comprehensive income in the same line item as expenses arising from fixed lease payments. In accordance with Topic 842, leases are measured at present value using the rate implicit in the lease or, if the implicit rate is not determinable, the lessee's implicit borrowing rate. As the implicit rate is not typically available, the Company uses its implicit borrowing rate based on the information available at the lease commencement date to determine the present value of future lease payments. The implicit borrowing rate approximates the rate the Company would pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments. Refer to Note 7 - Leases for details about the Company's lease portfolio, including Topic 842 required disclosures. Recently Adopted Accounting Pronouncements - In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses, which requires financial assets measured at an amortized cost basis to be presented at the net amount expected to be collected. This ASU amends the impairment model to utilize an expected loss methodology in place of the incurred loss methodology for financial instruments, including trade receivables. The Company's measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. The Company adopted ASU 2016-13 effective January 1, 2020. Different aspects of the guidance required modified retrospective or prospective adoption. Adoption of the standard did not have a material impact on the Company's consolidated financial statements. New Accounting Pronouncements (Not Yet Adopted) - In August 2020, the FASB issued ASU 2020-06, Debt — Accounting for Convertible Instruments, to reduce the complexity associated with applying US generally accepted accounting principles (GAAP) to certain financial instruments with characteristics of liabilities and equity. For convertible instruments, the number of accounting models for convertible debt instruments is reduced, which results in fewer embedded conversion features being separately recognized from the host contract as compared with current GAAP. Only convertible instruments that meet the definition of a derivative or are issued with substantial premiums will continue to be subject to the separation models. ASU 2020-06 will be effective for fiscal years beginning after December 15, 2021. A modified retrospective and a fully retrospective transition method are both permitted. The Company is currently evaluating the impact of adoption of ASU 2020-06 on its consolidated financial statements.

Inventory

Inventory	9 Months Ended
	Sep. 30, 2020
Inventory Disclosure [Abstract]
Inventory	Inventory As of September 30, 2020 and December 31, 2019, the Company's inventory balance consists of the following (in thousands): September 30, 2020 December 31, 2019 Raw materials $ 18,937 $ 16,048 Work-in-process 14,546 6,420 Finished goods 10,000 5,845 $ 43,483 $ 28,313

Intangibles, Net

Intangibles, Net	9 Months Ended
	Sep. 30, 2020
Goodwill and Intangible Assets Disclosure [Abstract]
Intangibles, Net	Intangibles, Net As of September 30, 2020, the Company's identifiable intangible assets consisted of acquired ARIKAYCE R&D and a 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 in September 2018. Total intangible assets, net was $49.9 million and $53.7 million as of September 30, 2020 and December 31, 2019, respectively. The Company began amortizing its intangible assets in October 2018, over ARIKAYCE's initial regulatory exclusivity period of 12 years. Amortization of intangible assets during each of the next five years is estimated to be approximately $5.0 million per year. A rollforward of the Company's intangible assets for the nine months ended September 30, 2020 follows (in thousands): 2020 Intangible Asset January 1, Additions Amortization September 30, Acquired ARIKAYCE R&D $ 52,139 $ — $ (3,638) $ 48,501 PARI milestone upon FDA approval 1,543 — (107) 1,436 $ 53,682 $ — $ (3,745) $ 49,937

Fixed Assets, Net

Fixed Assets, Net	9 Months Ended
	Sep. 30, 2020
Property, Plant and Equipment [Abstract]
Fixed Assets, Net	Fixed Assets, Net Fixed assets are stated at cost and depreciated using the straight-line method, based on useful lives as follows (in thousands): Asset Description Estimated As of September 30, 2020 As of December 31, 2019 Lab equipment 7 $ 10,219 $ 9,634 Furniture and fixtures 7 5,917 5,908 Computer hardware and software 3-5 7,267 6,806 Office equipment 7 89 154 Manufacturing equipment 7 1,567 1,567 Leasehold improvements lease term 35,200 33,852 Construction in Progress (CIP) — 21,087 21,526 81,346 79,447 Less: accumulated depreciation (26,032) (19,267) Fixed assets, net $ 55,314 $ 60,180

Accrued Expenses

Accrued Expenses	9 Months Ended
	Sep. 30, 2020
Payables and Accruals [Abstract]
Accrued Expenses	Accrued Expenses As of September 30, 2020 and December 31, 2019, the Company's accrued expenses balance consists of the following (in thousands): September 30, 2020 December 31, 2019 Accrued clinical trial expenses $ 9,984 $ 5,598 Accrued professional fees 9,643 12,581 Accrued technical operation expenses 6,153 6,446 Accrued royalty and milestone payments 2,094 3,117 Accrued interest payable 1,663 3,631 Accrued sales allowances and related costs 4,993 5,267 Accrued construction costs 130 2,689 Other accrued expenses 489 1,046 $ 35,149 $ 40,375

Leases

Leases	9 Months Ended
	Sep. 30, 2020
Leases [Abstract]
Leases	LeasesThe Company's lease portfolio consists primarily of office space, manufacturing facilities and fleet vehicles. All of the Company's leases are classified as operating leases, except for the Company's corporate headquarters lease, which is classified as a finance lease. The terms of the Company's lease agreements that have commenced range from less than one year to ten years, ten months. 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. 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 does 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 operating lease ROU assets and corresponding lease liabilities associated with the manufacturing facilities is the sum of the minimum guarantees over the life of the production contracts. 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 Nine Months Ended September 30, 2020 September 30, 2020 Finance lease cost Amortization of right-of-use assets $ 88 $ 809 Interest on lease liabilities 91 962 Total finance lease cost $ 179 $ 1,771 Operating lease cost 1,393 8,279 Total lease cost $ 1,572 $ 10,050 Other information: Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for finance leases $ 91 $ 962 Operating cash flows for operating leases $ 1,458 $ 8,371 Financing cash flows from finance leases $ 179 $ 769 Weighted average remaining lease term - finance leases 9.8 years Weighted average remaining lease term - operating leases 4.5 years Weighted average discount rate - finance leases 8.6 % Weighted average discount rate - operating leases 7.4 % In addition to the operating lease costs disclosed above, the Company also records variable consideration for variable lease payments in excess of fixed fees or minimum guarantees. Variable consideration related to the Company's leasing arrangements was $6.0 million and $7.1 million for the three and nine months ended September 30, 2020, respectively. Variable costs related to CMO manufacturing agreements have been classified within inventory in the Company's consolidated balance sheet, while the variable costs related to other leasing arrangements have been classified within operating expenses in the Company's consolidated statements of comprehensive loss. The table below summarizes the supplemental noncash disclosures of the Company's leases included in its consolidated financial statements (in thousands). Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Finance right-of-use assets obtained in exchange for lease obligations $ — $ — $ — $ — Operating right-of-use assets obtained in exchange for lease $ 513 $ — $ 718 $ 47,389 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. The Company entered into certain agreements with Patheon related to increasing its long-term production capacity for ARIKAYCE commercial inventory. The Company has determined that these agreements with Patheon contain an embedded lease for the
Leases	LeasesThe Company's lease portfolio consists primarily of office space, manufacturing facilities and fleet vehicles. All of the Company's leases are classified as operating leases, except for the Company's corporate headquarters lease, which is classified as a finance lease. The terms of the Company's lease agreements that have commenced range from less than one year to ten years, ten months. 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. 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 does 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 operating lease ROU assets and corresponding lease liabilities associated with the manufacturing facilities is the sum of the minimum guarantees over the life of the production contracts. 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 Nine Months Ended September 30, 2020 September 30, 2020 Finance lease cost Amortization of right-of-use assets $ 88 $ 809 Interest on lease liabilities 91 962 Total finance lease cost $ 179 $ 1,771 Operating lease cost 1,393 8,279 Total lease cost $ 1,572 $ 10,050 Other information: Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for finance leases $ 91 $ 962 Operating cash flows for operating leases $ 1,458 $ 8,371 Financing cash flows from finance leases $ 179 $ 769 Weighted average remaining lease term - finance leases 9.8 years Weighted average remaining lease term - operating leases 4.5 years Weighted average discount rate - finance leases 8.6 % Weighted average discount rate - operating leases 7.4 % In addition to the operating lease costs disclosed above, the Company also records variable consideration for variable lease payments in excess of fixed fees or minimum guarantees. Variable consideration related to the Company's leasing arrangements was $6.0 million and $7.1 million for the three and nine months ended September 30, 2020, respectively. Variable costs related to CMO manufacturing agreements have been classified within inventory in the Company's consolidated balance sheet, while the variable costs related to other leasing arrangements have been classified within operating expenses in the Company's consolidated statements of comprehensive loss. The table below summarizes the supplemental noncash disclosures of the Company's leases included in its consolidated financial statements (in thousands). Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Finance right-of-use assets obtained in exchange for lease obligations $ — $ — $ — $ — Operating right-of-use assets obtained in exchange for lease $ 513 $ — $ 718 $ 47,389 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. The Company entered into certain agreements with Patheon related to increasing its long-term production capacity for ARIKAYCE commercial inventory. The Company has determined that these agreements with Patheon contain an embedded lease for the

Debt

Debt	9 Months Ended
	Sep. 30, 2020
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 4.29 years. The following table presents the carrying value of the Company's debt balance (in thousands): September 30, 2020 December 31, 2019 1.75% convertible senior notes due 2025 $ 450,000 $ 450,000 Debt issuance costs, unamortized (5,995) (7,043) Discount on debt (92,878) (107,017) Debt, long-term $ 351,127 $ 335,940 As of September 30, 2020, future principal repayments of the debt for each of the years through maturity were as follows (in thousands): Year Ending December 31: 2020 $ — 2021 — 2022 — 2023 — 2024 — 2025 450,000 $ 450,000 Interest Expense Interest expense related to the Convertible Notes for the three and nine months ended September 30, 2020 and September 30, 2019, which includes the contractual interest coupon payable semi-annually in cash, the amortization of the issuance costs, accretion of debt discount and finance lease interest expense is as follows (in thousands): Three Months Ended Nine Months Ended 2020 2019 2020 2019 Contractual interest expense $ 1,968 $ 1,971 $ 5,916 $ 5,912 Amortization of debt issuance costs 350 349 1,048 1,047 Accretion of debt discount 4,776 4,526 14,139 13,398 Total convertible debt interest expense 7,094 6,846 21,103 20,357 Finance lease interest expense 91 — 962 — Total interest expense $ 7,185 $ 6,846 $ 22,065 $ 20,357

Shareholders' Equity

Shareholders' Equity	9 Months Ended
	Sep. 30, 2020
Equity [Abstract]
Shareholders' Equity	Shareholders’ Equity Common Stock — As of September 30, 2020, the Company had 500,000,000 shares of common stock authorized with a par value of $0.01 per share and 101,803,701 shares of common stock issued and outstanding. In addition, as of September 30, 2020, the Company had reserved 13,047,241 shares of common stock for issuance upon the exercise of outstanding stock options and 853,434 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 the second quarter of 2020, the Company completed an underwritten public offering of 11,155,000 shares of the Company's common stock, including 1,455,000 shares issued pursuant to the exercise in full of the underwriters' option to purchase additional shares from the Company, a t a public offering price of $23.25 per share. The Company's net proceeds from the sale of the shares, after deducting the underwriting discounts and offering expenses of $13.5 million, were $245.9 million. In the second quarter of 2019, the Company completed an underwritten public offering of 10,657,692 shares of the Company's common stock, including 1,042,307 shares issued pursuant to the exercise in full of the underwriters' option to purchase additional shares a t a public offering price of $26.00 per share. The Company's net proceeds from the sale of the shares, after deducting the underwriting discounts and offering expenses of $16.0 million, were $261.1 million. The offering also included 400,000 shares sold by the Company's Chair and Chief Executive Officer, from which the Company received no proceeds . Preferred Stock — As of September 30, 2020, the Company had 200,000,000 shares of preferred stock authorized with a par value of $0.01 per share and no shares of preferred stock were issued and outstanding.

Stock-Based Compensation

Stock-Based Compensation	9 Months Ended
	Sep. 30, 2020
Share-based Payment Arrangement [Abstract]
Stock-Based Compensation	Stock-Based Compensation The Company's current equity compensation plan, the 2019 Incentive Plan, was approved by shareholders at the Company's Annual Meeting of Shareholders on May 16, 2019. The 2019 Incentive Plan is administered by the Compensation Committee of the Board of Directors of the Company. Under the terms of the 2019 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 to eligible employees and non-employee directors. On May 16, 2019, upon the approval of the 2019 Incentive Plan by shareholders, 3,500,000 shares were authorized for issuance thereunder, plus any shares subject to then-outstanding awards under the 2017 Incentive Plan, 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. On May 12, 2020, at the Company's 2020 Annual Meeting of Shareholders, the Company's shareholders approved an amendment of the 2019 Incentive Plan providing for the issuance of an additional 4,500,000 shares under the plan. As of September 30, 2020, 5,250,338 shares remained for future issuance under the 2019 Incentive Plan. The 2019 Incentive Plan will terminate on May 16, 2029 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 to new hires, which awards are made pursuant to the Nasdaq's inducement grant exception to the shareholder approval requirement for grants of equity compensation. During the nine months ended September 30, 2020, the Company granted inducement stock options covering 890,290 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 2018 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 September 30, 2020, there was $63.4 million of unrecognized compensation expense related to unvested stock options, which is expected to be recognized over a weighted average period o f 1.9 years. As of September 30, 2020, there were no performance-condition options outstanding. Restricted Stock Units — As of September 30, 2020, there was $16.8 million of unrecognized compensation expense related to unvested RSU awards, which is expected to be recognized over a weighted average period of 2.6 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 and nine months ended September 30, 2020 and 2019, respectively (in millions): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Research and development $ 3.0 $ 2.2 $ 8.8 $ 6.6 Selling, general and administrative 5.9 4.6 18.6 14.5 Total $ 8.9 $ 6.8 $ 27.4 $ 21.1

Income Taxes

Income Taxes	9 Months Ended
	Sep. 30, 2020
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes The Company's provision for income taxes was $0.3 million and $0.1 million for the three months ended September 30, 2020 and September 30, 2019, respectively, and $0.8 million and $0.5 million for the nine months ended September 30, 2020 and September 30, 2019, respectively. The provision for income taxes in all periods was primarily a result of certain of the Company's international subsidiaries, which had taxable income during the three and nine months ended September 30, 2020 and 2019. Additionally, the Company is impacted by certain state taxes which effectively impose income tax on modified gross revenues. 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 2016 and later, and is generally open for certain states for the years 2015 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 September 30, 2020 and December 31, 2019, 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 September 30, 2020 and December 31, 2019 or the income statement for the three and nine months ended September 30, 2020 and September 30, 2019. The Company has not 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. On March 27, 2020, the US government enacted the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) which includes numerous modifications to income tax provisions, including a limitation on business interest expense and net operating loss provisions and the acceleration of alternative minimum tax credits. Given the Company's history of losses, the CARES Act is not expected to have a material impact on its income tax positions.

Commitments and Contingencies

Commitments and Contingencies	9 Months Ended
	Sep. 30, 2020
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Rent expense charged to operations was $0.7 million and $0.4 million for the three months ended September 30, 2020 and 2019, respectively, and was $2.6 million and $2.0 million for the nine months ended September 30, 2020 and 2019, respectively. Legal Proceedings 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 Accoun_2

Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2020
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 September 30, 2020 and December 31, 2019 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 September 30, 2020 Fair Value Carrying Value Level 1 Level 2 Level 3 Cash and cash equivalents $ 588.8 $ 588.8 $ — $ — As of December 31, 2019 Fair Value Carrying Value Level 1 Level 2 Level 3 Cash and cash equivalents $ 487.4 $ 487.4 $ — $ — 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 nine months ended September 30, 2020 and 2019, respectively. As of September 30, 2020 and December 31, 2019, 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
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, 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 and nine months ended September 30, 2020 and 2019: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (in thousands, except per share amounts) Numerator: Net loss $ (63,659) $ (60,682) $ (191,877) $ (201,349) Denominator: Weighted average common shares used in calculation of basic net loss per share: 101,615 89,245 96,029 82,907 Effect of dilutive securities: Common stock options — — — — Restricted stock and RSUs — — — — Convertible debt securities — — — — Weighted average common shares outstanding used in calculation of diluted net loss per share 101,615 89,245 96,029 82,907 Net loss per share: Basic and diluted $ (0.63) $ (0.68) $ (2.00) $ (2.43) The following potentially dilutive securities have been excluded from the computations of diluted weighted average common shares outstanding as of September 30, 2020 and 2019 as their effect would have been anti-dilutive (in thousands): As of September 30, 2020 2019 Common stock options 13,047 10,773 Unvested restricted stock and RSUs 853 460 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 Company uses an expected loss methodology to calculate allowances for trade receivables. The Company's measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. The Company does not currently have a material allowance for collectible trade receivables. The following table presents the percentage of total gross product revenue represented by the Company's three largest customers as of the nine months ended September 30, 2020 and September 30, 2019. September 30, 2020 September 30, 2019 Customer A 28% 31% Customer B 26% 21% Customer C 23% 28% 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 manufacturers, or an adverse change in their business, could materially impact future operating results.
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. The Company's customers in the US include specialty pharmacies and specialty distributors. Revenue is recorded at net selling price (transaction price), which includes estimates of variable consideration for which reserves are established for (a) customer credits, such as invoice discounts for prompt pay and specialty pharmacies fees, (b) estimated government rebates, such as Medicaid and Medicare Part D reimbursements, and estimated managed care rebates, (c) estimated chargebacks, and (d) estimated costs of co-payment assistance. These reserves are based on the amounts earned or to be claimed on the related sales and are classified as reductions of accounts receivable (prompt pay discounts and chargebacks), prepaid expenses (co-payment assistance), or as a current liability (rebates). Where appropriate, these estimates take into consideration a range of possible outcomes which are probability-weighted for relevant factors such as the Company's historical experience, current contractual and statutory requirements, and forecasted customer buying and payment patterns. Overall, these reserves reflect the Company's best estimates of the amount of consideration to which it is entitled based on the terms of the applicable contract. The amount of variable consideration included in the transaction price may be constrained and is included in the net sales price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. Actual amounts of consideration ultimately received may differ from the Company's estimates. If actual results in the future vary from estimates, the Company adjusts these estimates, which would affect net product revenue and earnings in the period such variances become known. Customer credits: The Company's customers are offered various forms of consideration, including fees for enhanced services and prompt payment discounts. The payment terms for sales to specialty pharmacies for prompt payment discounts and fees for services are based on contractual rates agreed with the respective specialty pharmacies. The Company anticipates that its customers will earn these discounts and fees and, therefore, deducts the full amount of these discounts and fees from total gross product revenues at the time such revenues are recognized. Rebates: The Company contracts with government agencies and managed care 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. These reserves are recorded in the same period in which the revenue is recognized, resulting in a reduction of product revenue and the establishment of a current liability. The current liability is included in accrued expenses on the consolidated balance sheets. The Company estimates the rebates that it will provide to third-party payors based upon (i) the Company's contracts with these third-party payors, (ii) the government mandated discounts applicable to government-funded programs, (iii) a range of possible outcomes that are probability-weighted for the estimated payor mix, and (iv) information obtained from the Company's specialty pharmacies. 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 the specialty distributor initially paid and the discounted price paid by the contracted customers. The Company estimates chargebacks provided to the specialty distributor and deducts these estimated amounts from gross product revenues, and from accounts receivable, at the time revenues are recognized. Co-payment assistance: Patients who have commercial insurance and meet certain eligibility requirements may receive co-payment assistance. Based upon the terms of the program and information regarding programs provided for similar specialty pharmaceutical products, the Company estimates the average co-pay mitigation amounts and the percentage of patients that it expects to participate in the program in order to establish accruals for co-payment assistance. These reserves are recorded in the same period in which the related revenue is recognized, resulting in a reduction of product revenue. The Company adjusts its accruals for co-pay assistance based on actual redemption activity and estimates of future redemptions related to sales in the current period. If any, or all, of the Company's actual experience varies from its estimates, the Company may need to adjust prior period accruals, affecting revenue in the period of adjustment. The Company also recognizes revenue related to certain early access programs (EAPs) in Europe, consisting of sales to the French National Agency for Medicines and Health Products Safety, which granted ARIKAYCE a Temporary Authorization for Use (Autorisation Temporaire d'Utilisation, or ATU) and from the named patient program in Germany and other countries. EAPs are intended to make products available on a named patient basis before they are commercially available in accordance with local regulations.
Inventory and Cost of product revenues (excluding amortization of intangible assets)	Inventory and Cost of Product Revenues (excluding amortization of intangible assets) - Inventory is stated at the lower of cost and net realizable value. The Company began capitalizing inventory costs following FDA approval of ARIKAYCE in September 2018. Inventory is sold on a first-in, first-out (FIFO) basis. The Company periodically reviews inventory for expiry and obsolescence and, if necessary, writes down accordingly. If quality specifications are not met during the manufacturing process, such inventory is written off to cost of product revenues (excluding amortization of intangible assets) in the period identified. 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, and allocation of overhead costs, in addition to royalty expenses and revenue-based milestone payments. Cost is determined using a standard cost method, which approximates actual cost, and assumes a FIFO flow of goods. 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 R&D expense when consumed.
Leases	Leases - 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 (ROU) asset representing its right to use the underlying asset for the lease term on the balance sheet. A lease is a contract, or part of a contract, that conveys the right to control the use of explicitly or implicitly identified property, plant or equipment in exchange for consideration. Control of an asset is conveyed to the Company if the Company obtains the right to obtain substantially all of the economic benefits of the asset or the right to direct the use of the asset. The Company recognizes ROU assets and lease liabilities at the lease commencement date based on the present value of future, fixed lease payments over the term of the arrangement. ROU assets are amortized on a straight-line basis over the term of the lease or are amortized based on consumption, if this approach is more representative of the pattern in which benefit is expected to be derived from the underlying asset. Lease liabilities accrete to yield and are reduced at the time when the lease payment is payable to the vendor. Variable lease payments are recognized at the time when the event giving rise to the payment occurs and are recognized in the statement of comprehensive income in the same line item as expenses arising from fixed lease payments. In accordance with Topic 842, leases are measured at present value using the rate implicit in the lease or, if the implicit rate is not determinable, the lessee's implicit borrowing rate. As the implicit rate is not typically available, the Company uses its implicit borrowing rate based on the information available at the lease commencement date to determine the present value of future lease payments. The implicit borrowing rate approximates the rate the Company would pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments. Refer to Note 7 - Leases for details about the Company's lease portfolio, including Topic 842 required disclosures.
Recently Adopted Accounting Pronouncements And New Accounting Pronouncements (Not Yet Adopted)	Recently Adopted Accounting Pronouncements - In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses, which requires financial assets measured at an amortized cost basis to be presented at the net amount expected to be collected. This ASU amends the impairment model to utilize an expected loss methodology in place of the incurred loss methodology for financial instruments, including trade receivables. The Company's measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. The Company adopted ASU 2016-13 effective January 1, 2020. Different aspects of the guidance required modified retrospective or prospective adoption. Adoption of the standard did not have a material impact on the Company's consolidated financial statements. New Accounting Pronouncements (Not Yet Adopted) - In August 2020, the FASB issued ASU 2020-06, Debt — Accounting for Convertible Instruments, to reduce the complexity associated with applying US generally accepted accounting principles (GAAP) to certain financial instruments with characteristics of liabilities and equity. For convertible instruments, the number of accounting models for convertible debt instruments is reduced, which results in fewer embedded conversion features being separately recognized from the host contract as compared with current GAAP. Only convertible instruments that meet the definition of a derivative or are issued with substantial premiums will continue to be subject to the separation models. ASU 2020-06 will be effective for fiscal years beginning after December 15, 2021. A modified retrospective and a fully retrospective transition method are both permitted. The Company is currently evaluating the impact of adoption of ASU 2020-06 on its consolidated financial statements.

Summary of Significant Accoun_3

Summary of Significant Accounting Policies (Tables)	9 Months Ended
	Sep. 30, 2020
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 September 30, 2020 Fair Value Carrying Value Level 1 Level 2 Level 3 Cash and cash equivalents $ 588.8 $ 588.8 $ — $ — As of December 31, 2019 Fair Value Carrying Value Level 1 Level 2 Level 3 Cash and cash equivalents $ 487.4 $ 487.4 $ — $ —
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 and nine months ended September 30, 2020 and 2019: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (in thousands, except per share amounts) Numerator: Net loss $ (63,659) $ (60,682) $ (191,877) $ (201,349) Denominator: Weighted average common shares used in calculation of basic net loss per share: 101,615 89,245 96,029 82,907 Effect of dilutive securities: Common stock options — — — — Restricted stock and RSUs — — — — Convertible debt securities — — — — Weighted average common shares outstanding used in calculation of diluted net loss per share 101,615 89,245 96,029 82,907 Net loss per share: Basic and diluted $ (0.63) $ (0.68) $ (2.00) $ (2.43)
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 September 30, 2020 and 2019 as their effect would have been anti-dilutive (in thousands): As of September 30, 2020 2019 Common stock options 13,047 10,773 Unvested restricted stock and RSUs 853 460 Convertible debt securities 11,492 11,492
Schedules of Concentration of Risk, by Risk Factor	The following table presents the percentage of total gross product revenue represented by the Company's three largest customers as of the nine months ended September 30, 2020 and September 30, 2019. September 30, 2020 September 30, 2019 Customer A 28% 31% Customer B 26% 21% Customer C 23% 28%

Inventory (Tables)

Inventory (Tables)	9 Months Ended
	Sep. 30, 2020
Inventory Disclosure [Abstract]
Schedule of Inventory, Current	As of September 30, 2020 and December 31, 2019, the Company's inventory balance consists of the following (in thousands): September 30, 2020 December 31, 2019 Raw materials $ 18,937 $ 16,048 Work-in-process 14,546 6,420 Finished goods 10,000 5,845 $ 43,483 $ 28,313

Intangibles, Net (Tables)

Intangibles, Net (Tables)	9 Months Ended
	Sep. 30, 2020
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of Intangible Assets	A rollforward of the Company's intangible assets for the nine months ended September 30, 2020 follows (in thousands): 2020 Intangible Asset January 1, Additions Amortization September 30, Acquired ARIKAYCE R&D $ 52,139 $ — $ (3,638) $ 48,501 PARI milestone upon FDA approval 1,543 — (107) 1,436 $ 53,682 $ — $ (3,745) $ 49,937

Fixed Assets, Net (Tables)

Fixed Assets, Net (Tables)	9 Months Ended
	Sep. 30, 2020
Property, Plant and Equipment [Abstract]
Property, Plant and Equipment	Fixed assets are stated at cost and depreciated using the straight-line method, based on useful lives as follows (in thousands): Asset Description Estimated As of September 30, 2020 As of December 31, 2019 Lab equipment 7 $ 10,219 $ 9,634 Furniture and fixtures 7 5,917 5,908 Computer hardware and software 3-5 7,267 6,806 Office equipment 7 89 154 Manufacturing equipment 7 1,567 1,567 Leasehold improvements lease term 35,200 33,852 Construction in Progress (CIP) — 21,087 21,526 81,346 79,447 Less: accumulated depreciation (26,032) (19,267) Fixed assets, net $ 55,314 $ 60,180

Accrued Expenses (Tables)

Accrued Expenses (Tables)	9 Months Ended
	Sep. 30, 2020
Payables and Accruals [Abstract]
Schedule of Accrued Expenses	As of September 30, 2020 and December 31, 2019, the Company's accrued expenses balance consists of the following (in thousands): September 30, 2020 December 31, 2019 Accrued clinical trial expenses $ 9,984 $ 5,598 Accrued professional fees 9,643 12,581 Accrued technical operation expenses 6,153 6,446 Accrued royalty and milestone payments 2,094 3,117 Accrued interest payable 1,663 3,631 Accrued sales allowances and related costs 4,993 5,267 Accrued construction costs 130 2,689 Other accrued expenses 489 1,046 $ 35,149 $ 40,375

Leases (Tables)

Leases (Tables)	9 Months Ended
	Sep. 30, 2020
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 Nine Months Ended September 30, 2020 September 30, 2020 Finance lease cost Amortization of right-of-use assets $ 88 $ 809 Interest on lease liabilities 91 962 Total finance lease cost $ 179 $ 1,771 Operating lease cost 1,393 8,279 Total lease cost $ 1,572 $ 10,050 Other information: Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for finance leases $ 91 $ 962 Operating cash flows for operating leases $ 1,458 $ 8,371 Financing cash flows from finance leases $ 179 $ 769 Weighted average remaining lease term - finance leases 9.8 years Weighted average remaining lease term - operating leases 4.5 years Weighted average discount rate - finance leases 8.6 % Weighted average discount rate - operating leases 7.4 % The table below summarizes the supplemental noncash disclosures of the Company's leases included in its consolidated financial statements (in thousands). Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Finance right-of-use assets obtained in exchange for lease obligations $ — $ — $ — $ — Operating right-of-use assets obtained in exchange for lease $ 513 $ — $ 718 $ 47,389

Debt (Tables)

Debt (Tables)	9 Months Ended
	Sep. 30, 2020
Debt Disclosure [Abstract]
Components of Debt Balance	The following table presents the carrying value of the Company's debt balance (in thousands): September 30, 2020 December 31, 2019 1.75% convertible senior notes due 2025 $ 450,000 $ 450,000 Debt issuance costs, unamortized (5,995) (7,043) Discount on debt (92,878) (107,017) Debt, long-term $ 351,127 $ 335,940
Schedule of Future Principal Repayments of Debt	As of September 30, 2020, future principal repayments of the debt for each of the years through maturity were as follows (in thousands): Year Ending December 31: 2020 $ — 2021 — 2022 — 2023 — 2024 — 2025 450,000 $ 450,000
Summary of Interest Expense	Interest expense related to the Convertible Notes for the three and nine months ended September 30, 2020 and September 30, 2019, which includes the contractual interest coupon payable semi-annually in cash, the amortization of the issuance costs, accretion of debt discount and finance lease interest expense is as follows (in thousands): Three Months Ended Nine Months Ended 2020 2019 2020 2019 Contractual interest expense $ 1,968 $ 1,971 $ 5,916 $ 5,912 Amortization of debt issuance costs 350 349 1,048 1,047 Accretion of debt discount 4,776 4,526 14,139 13,398 Total convertible debt interest expense 7,094 6,846 21,103 20,357 Finance lease interest expense 91 — 962 — Total interest expense $ 7,185 $ 6,846 $ 22,065 $ 20,357

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	9 Months Ended
	Sep. 30, 2020
Share-based Payment Arrangement [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 and nine months ended September 30, 2020 and 2019, respectively (in millions): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Research and development $ 3.0 $ 2.2 $ 8.8 $ 6.6 Selling, general and administrative 5.9 4.6 18.6 14.5 Total $ 8.9 $ 6.8 $ 27.4 $ 21.1

The Company and Basis of Pres_2

The Company and Basis of Presentation (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Cash and cash equivalents	$ 588,753		$ 588,753		$ 487,429
Net loss	$ (63,659)	$ (60,682)	$ (191,877)	$ (201,349)

Summary of Significant Accoun_4

Summary of Significant Accounting Policies - Fair Value Measurements (Details)	9 Months Ended
	Sep. 30, 2020USD ($)security	Sep. 30, 2019USD ($)	Dec. 31, 2019USD ($)security	Jan. 31, 2018USD ($)
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	$ 92,878,000		$ 107,017,000
Unamortized debt issuance expense	5,995,000		7,043,000
Convertible Notes
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Unamortized portion of debt discount	92,900,000
Unamortized debt issuance expense	6,000,000
Recurring basis | Carrying Value
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Cash and cash equivalents	588,800,000		487,400,000
Recurring basis | Carrying Value | Level 2
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Convertible Notes ($450.0 face value)	351,100,000
Recurring basis | Fair Value | Level 1
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Cash and cash equivalents	588,800,000		487,400,000
Recurring basis | Fair Value | Level 2
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Cash and cash equivalents	0		0
Convertible Notes ($450.0 face value)	505,500,000
Recurring basis | Fair Value | Level 3
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Cash and cash equivalents	$ 0		$ 0
1.75 convertible senior notes due 2025 | Convertible Notes
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Interest rate (as a percent)	1.75%
Convertible Notes ($450.0 face value)				$ 309,100,000
Unamortized debt issuance expense				$ 14,200,000

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		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Numerator:
Net loss	$ (63,659)	$ (60,682)	$ (191,877)	$ (201,349)
Denominator:
Weighted average common shares used in calculation of basic net loss per share (in shares)	101,615	89,245	96,029	82,907
Effect of dilutive securities:
Dilutive securities, convertible debt (in shares)	0	0	0	0
Weighted average common shares outstanding used in calculation of diluted net loss per share (in shares)	101,615	89,245	96,029	82,907
Net loss per share:
Basic and diluted (in dollars per share)	$ (0.63)	$ (0.68)	$ (2)	$ (2.43)
Common stock options
Effect of dilutive securities:
Dilutive securities, share-based payment (in shares)	0	0	0	0
Restricted stock and RSUs
Effect of dilutive securities:
Dilutive securities, share-based payment (in shares)	0	0	0	0

Summary of Significant Accoun_6

Summary of Significant Accounting Policies - Anti-dilutive Securities (Details) - shares shares in Thousands	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Common stock options
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)	13,047	10,773
Unvested restricted stock and 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)	853	460
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	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Customer A
Concentration Risk [Line Items]
Concentration risk, percentage	28.00%	31.00%
Customer B
Concentration Risk [Line Items]
Concentration risk, percentage	26.00%	21.00%
Customer C
Concentration Risk [Line Items]
Concentration risk, percentage	23.00%	28.00%

Inventory - Schedule of Invento

Inventory - Schedule of Inventory, Current (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Inventory Disclosure [Abstract]
Raw materials	$ 18,937	$ 16,048
Work-in-process	14,546	6,420
Finished goods	10,000	5,845
Inventory, Net	$ 43,483	$ 28,313

Intangibles, Net (Details)

Intangibles, Net (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Jan. 01, 2020	Dec. 31, 2019
Goodwill and Intangible Assets Disclosure [Abstract]
Intangibles, net	$ 49,937		$ 49,937			$ 53,682
Intangible assets estimated useful life			12 years
Amortization of intangible assets, 2020	5,000		$ 5,000
Amortization of intangible assets, 2021	5,000		5,000
Amortization of intangible assets, 2022	5,000		5,000
Amortization of intangible assets, 2023	5,000		5,000
Amortization of intangible assets, 2024	5,000		5,000
Finite-lived Intangible Assets [Roll Forward]
Intangibles, gross					$ 53,682
Additions			0
Amortization of intangible assets	(1,248)	$ (1,249)	(3,745)	$ (3,745)
Intangibles, net	49,937		49,937			$ 53,682
Acquired ARIKAYCE R&D
Goodwill and Intangible Assets Disclosure [Abstract]
Intangibles, net	48,501		48,501
Finite-lived Intangible Assets [Roll Forward]
Intangibles, gross					52,139
Additions			0
Amortization of intangible assets			(3,638)
Intangibles, net	48,501		48,501
PARI milestone upon FDA approval
Goodwill and Intangible Assets Disclosure [Abstract]
Intangibles, net	1,436		1,436
Finite-lived Intangible Assets [Roll Forward]
Intangibles, gross					$ 1,543
Additions			0
Amortization of intangible assets			(107)
Intangibles, net	$ 1,436		$ 1,436

Fixed Assets, Net (Details)

Fixed Assets, Net (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2020	Dec. 31, 2019
Property, Plant and Equipment [Line Items]
Fixed assets, gross	$ 81,346	$ 79,447
Less: accumulated depreciation	(26,032)	(19,267)
Property, Plant and Equipment, Net, Total	55,314	60,180
Lab equipment
Property, Plant and Equipment [Line Items]
Fixed assets, gross	$ 10,219	9,634
Estimated Useful Life (years)	7 years
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Fixed assets, gross	$ 5,917	5,908
Estimated Useful Life (years)	7 years
Computer hardware and software
Property, Plant and Equipment [Line Items]
Fixed assets, gross	$ 7,267	6,806
Computer hardware and software | Minimum
Property, Plant and Equipment [Line Items]
Estimated Useful Life (years)	3 years
Computer hardware and software | Maximum
Property, Plant and Equipment [Line Items]
Estimated Useful Life (years)	5 years
Office equipment
Property, Plant and Equipment [Line Items]
Fixed assets, gross	$ 89	154
Estimated Useful Life (years)	7 years
Manufacturing equipment
Property, Plant and Equipment [Line Items]
Fixed assets, gross	$ 1,567	1,567
Estimated Useful Life (years)	7 years
Leasehold improvements
Property, Plant and Equipment [Line Items]
Fixed assets, gross	$ 35,200	33,852
Construction in Progress (CIP)
Property, Plant and Equipment [Line Items]
Fixed assets, gross	$ 21,087	$ 21,526

Accrued Expenses (Details)

Accrued Expenses (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Payables and Accruals [Abstract]
Accrued clinical trial expenses	$ 9,984	$ 5,598
Accrued professional fees	9,643	12,581
Accrued technical operation expenses	6,153	6,446
Accrued royalty and milestone payments	2,094	3,117
Accrued interest payable	1,663	3,631
Accrued sales allowances and related costs	4,993	5,267
Accrued construction costs	130	2,689
Other accrued expenses	489	1,046
Total accrued expenses	$ 35,149	$ 40,375

Leases - Narrative (Details)

Leases - Narrative (Details) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2020
Lessee, Lease, Description [Line Items]
Variable lease, cost	$ 6	$ 7.1
Lease cost, future right-of-use asset		$ 23.6
Minimum
Lessee, Lease, Description [Line Items]
Remaining lease term		1 year
Maximum
Lessee, Lease, Description [Line Items]
Remaining lease term		10 years 10 months

Leases - Lease, costs (Details)

Leases - Lease, costs (Details) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Lease, Cost [Abstract]
Finance lease amortization expense	$ 88		$ 809	$ 0
Finance lease interest expense	91	$ 0	962	0
Total finance lease cost	179		1,771
Operating lease cost	1,393		8,279
Total lease cost	1,572		10,050
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for finance leases	91		962
Operating cash flows for operating leases	1,458		8,371
Financing cash flows from finance leases	$ 179		$ 769	0
Weighted average remaining lease term - finance leases	9 years 9 months 18 days		9 years 9 months 18 days
Weighted average remaining lease term - operating leases	4 years 6 months		4 years 6 months
Weighted average discount rate - finance leases	8.60%		8.60%
Weighted average discount rate - operating leases	7.40%		7.40%
Finance right-of-use assets obtained in exchange for lease obligations	$ 0	0	$ 0	0
Operating right-of-use assets obtained in exchange for lease	$ 513	$ 0	$ 718	$ 47,389

Debt - Narrative (Details)

Debt - Narrative (Details)	1 Months Ended
	Jan. 31, 2018USD ($)day$ / shares	Sep. 30, 2020USD ($)	Dec. 31, 2019USD ($)
Debt Instrument [Line Items]
Underwriting discounts and commissions and other offering expenses		$ 5,995,000	$ 7,043,000
1.75 convertible senior notes due 2025
Debt Instrument [Line Items]
Initial conversion rate	0.0255384
Convertible Notes
Debt Instrument [Line Items]
Underwriting discounts and commissions and other offering expenses		$ 6,000,000
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	4 years 3 months 14 days
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	Sep. 30, 2020	Dec. 31, 2019	Jan. 31, 2018
Debt Instrument [Line Items]
1.75% convertible senior notes due 2025	$ 450,000	$ 450,000
Debt issuance costs, unamortized	(5,995)	(7,043)
Discount on debt	(92,878)	(107,017)
Debt, long-term	351,127	$ 335,940
Convertible Notes
Debt Instrument [Line Items]
Debt issuance costs, unamortized	(6,000)
Discount on debt	$ (92,900)
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	Sep. 30, 2020USD ($)
Year Ending December 31:
2020	$ 0
2021	0
2022	0
2023	0
2024	0
2025	450,000
Total	$ 450,000

Debt - Interest Expense (Detail

Debt - Interest Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Debt Disclosure [Abstract]
Contractual interest expense	$ 1,968	$ 1,971	$ 5,916	$ 5,912
Amortization of debt issuance costs	350	349	1,048	1,047
Accretion of debt discount	4,776	4,526	14,139	13,398
Total convertible debt interest expense	7,094	6,846	21,103	20,357
Finance lease interest expense	91	0	962	0
Total interest expense	$ 7,185	$ 6,846	$ 22,065	$ 20,357

Shareholders' Equity - Narrativ

Shareholders' Equity - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions	May 24, 2019	Jun. 30, 2020	Sep. 30, 2020	Dec. 31, 2019
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)			101,803,701	89,682,387
Common stock, outstanding shares (in shares)			101,803,701	89,682,387
Offering price per share (in dollars per share)	$ 26	$ 23.25
Payments of stock issuance costs	$ 16	$ 13.5
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
Common stock options
Class of Stock [Line Items]
Common stock shares reserved for issuance (in shares)			13,047,241
Unvested restricted stock and RSUs
Class of Stock [Line Items]
Common stock shares reserved for issuance (in shares)			853,434
Public Stock Offering
Class of Stock [Line Items]
Shares sold in offering (in shares)	10,657,692	11,155,000
Aggregate net proceeds from stock offering	$ 261.1	$ 245.9
Over-Allotment Option
Class of Stock [Line Items]
Shares sold in offering (in shares)	1,042,307	1,455,000
Public Stock Offering - Shares From Company's Chairman and Chief Executive Officer
Class of Stock [Line Items]
Shares sold in offering (in shares)	400,000

Stock-Based Compensation - Narr

Stock-Based Compensation - Narrative (Details) - USD ($) $ in Millions	May 12, 2020	May 15, 2018	Sep. 30, 2020	May 16, 2019
Stock-Based Compensation
Inducement stock options granted to new employees (in shares)			890,290
Common stock options
Stock-Based Compensation
Unrecognized compensation expense related to unvested stock options			$ 63.4
Expected weighted average period for recognized and unrecognized compensation expense			1 year 10 months 24 days
Performance options
Stock-Based Compensation
Options outstanding (in shares)			0
Unvested restricted stock and RSUs
Stock-Based Compensation
Expected weighted average period for recognized and unrecognized compensation expense			2 years 7 months 6 days
Unrecognized compensation expense related to unvested RSU awards			$ 16.8
2019 Incentive Plan
Stock-Based Compensation
Shares of common stock, maximum authorized for issuance (in shares)				3,500,000
Number of additional shares authorized (in shares)	4,500,000
Shares available for grant (in shares)			5,250,338
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%

Stock-Based Compensation - Rest

Stock-Based Compensation - Restricted Stock and Restricted Stock Units (Details) - Stock options and RSUs - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Stock-Based Compensation
Allocated share-based compensation expense	$ 8.9	$ 6.8	$ 27.4	$ 21.1
Research and development
Stock-Based Compensation
Allocated share-based compensation expense	3	2.2	8.8	6.6
Selling, general and administrative
Stock-Based Compensation
Allocated share-based compensation expense	$ 5.9	$ 4.6	$ 18.6	$ 14.5

Income Taxes (Details)

Income Taxes (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Income Tax Disclosure [Abstract]
Provision for income taxes	$ 317,000	$ 148,000	$ 781,000	$ 453,000
Deferred tax benefit			0
Unrecognized tax benefits, interest and penalties accrued	$ 0	$ 0	$ 0	$ 0

Commitments and Contingencies -

Commitments and Contingencies - Narrative (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Commitments and Contingencies Disclosure [Abstract]
Rent expense charged to operations	$ 0.7	$ 0.4	$ 2.6	$ 2