Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2021 | Aug. 02, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2021 | |
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 $0.01 per share | |
Trading Symbol | INSM | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 115,246,666 | |
Entity Central Index Key | 0001104506 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q2 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 928,327 | $ 532,756 |
Accounts receivable | 18,417 | 16,562 |
Inventory | 60,385 | 49,592 |
Prepaid expenses and other current assets | 31,066 | 23,982 |
Total current assets | 1,038,195 | 622,892 |
Intangibles, net | 46,735 | 49,261 |
Fixed assets, net | 53,784 | 53,953 |
Finance lease right-of-use assets | 9,795 | 10,334 |
Operating lease right-of-use assets | 32,037 | 32,946 |
Other assets | 49,237 | 26,769 |
Total assets | 1,229,783 | 796,155 |
Current liabilities: | ||
Accounts payable | 31,081 | 42,853 |
Accrued expenses | 45,553 | 37,807 |
Accrued compensation | 15,939 | 25,591 |
Finance lease liabilities | 1,158 | 1,081 |
Operating lease liabilities | 5,925 | 11,475 |
Total current liabilities | 99,656 | 118,807 |
Debt, long-term | 548,745 | 356,318 |
Finance lease liabilities, long-term | 14,114 | 14,713 |
Operating lease liabilities, long-term | 23,409 | 21,255 |
Other long-term liabilities | 12,806 | 9,178 |
Total liabilities | 698,730 | 520,271 |
Shareholders’ equity: | ||
Common stock, $0.01 par value; 500,000,000 authorized shares, 115,239,269 and 102,763,060 issued and outstanding shares at June 30, 2021 and December 31, 2020, respectively | 1,152 | 1,028 |
Additional paid-in capital | 2,569,028 | 2,105,252 |
Accumulated deficit | (2,039,551) | (1,830,589) |
Accumulated other comprehensive income | 424 | 193 |
Total shareholders’ equity | 531,053 | 275,884 |
Total liabilities and shareholders’ equity | $ 1,229,783 | $ 796,155 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2021 | Dec. 31, 2020 |
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) | 115,239,269 | 102,763,060 |
Common stock, outstanding shares (in shares) | 115,239,269 | 102,763,060 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss (unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Statement of Comprehensive Income [Abstract] | ||||
Product revenues, net | $ 45,366 | $ 42,495 | $ 85,580 | $ 79,355 |
Operating expenses: | ||||
Cost of product revenues (excluding amortization of intangible assets) | $ 10,837 | $ 9,950 | $ 20,681 | $ 18,388 |
Cost, Product and Service [Extensible List] | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember |
Research and development | $ 64,655 | $ 35,748 | $ 126,045 | $ 71,932 |
Selling, general and administrative | 57,177 | 49,663 | 108,727 | 101,009 |
Amortization of intangible assets | 1,263 | 1,248 | 2,526 | 2,497 |
Total operating expenses | 133,932 | 96,609 | 257,979 | 193,826 |
Operating loss | (88,566) | (54,114) | (172,399) | (114,471) |
Investment income | 34 | 203 | 67 | 1,607 |
Interest expense | (10,319) | (7,469) | (17,878) | (14,880) |
Loss on extinguishment of debt | (17,689) | 0 | (17,689) | 0 |
Other expense, net | (159) | (46) | (202) | (10) |
Loss before income taxes | (116,699) | (61,426) | (208,101) | (127,754) |
Provision for income taxes | 622 | 428 | 861 | 464 |
Net loss | $ (117,321) | $ (61,854) | $ (208,962) | $ (128,218) |
Basic net loss per share (in dollars per share) | $ (1.07) | $ (0.64) | $ (1.97) | $ (1.38) |
Diluted net loss per share (in dollars per share) | $ (1.07) | $ (0.64) | $ (1.97) | $ (1.38) |
Weighted average basic common shares outstanding (in shares) | 109,580 | 96,633 | 106,328 | 93,206 |
Weighted average diluted common shares outstanding (in shares) | 109,580 | 96,633 | 106,328 | 93,206 |
Net loss | $ (117,321) | $ (61,854) | $ (208,962) | $ (128,218) |
Other comprehensive income (loss): | ||||
Foreign currency translation income (loss) | 334 | (51) | 231 | (88) |
Total comprehensive loss | $ (116,987) | $ (61,905) | $ (208,731) | $ (128,306) |
Revenue from Contract with Customer, Product and Service [Extensible List] | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity (unaudited) - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) |
Balance (in shares) at Dec. 31, 2019 | 89,682 | ||||
Balance at Dec. 31, 2019 | $ 261,674 | $ 897 | $ 1,797,286 | $ (1,536,499) | $ (10) |
Comprehensive loss: | |||||
Net loss | (128,218) | (128,218) | |||
Other comprehensive income (loss) | (88) | (88) | |||
Exercise of stock options and ESPP shares issuance (in shares) | 472 | ||||
Exercise of stock options and ESPP shares issuance | 7,567 | $ 5 | 7,562 | ||
Net proceeds from issuance of common stock (in shares) | 11,155 | ||||
Net proceeds from issuance of common stock | 245,912 | $ 111 | 245,801 | ||
Issuance of common stock for vesting of RSUs (in shares) | 125 | ||||
Issuance of common stock for vesting of RSUs | 1 | $ 1 | |||
Stock-based compensation expense | 18,470 | 18,470 | |||
Balance (in shares) at Jun. 30, 2020 | 101,434 | ||||
Balance at Jun. 30, 2020 | 405,318 | $ 1,014 | 2,069,119 | (1,664,717) | (98) |
Balance (in shares) at Mar. 31, 2020 | 89,860 | ||||
Balance at Mar. 31, 2020 | 206,701 | $ 899 | 1,808,712 | (1,602,863) | (47) |
Comprehensive loss: | |||||
Net loss | (61,854) | (61,854) | |||
Other comprehensive income (loss) | (51) | (51) | |||
Exercise of stock options and ESPP shares issuance (in shares) | 321 | ||||
Exercise of stock options and ESPP shares issuance | 5,141 | $ 3 | 5,138 | ||
Net proceeds from issuance of common stock (in shares) | 11,155 | ||||
Net proceeds from issuance of common stock | 245,912 | $ 111 | 245,801 | ||
Issuance of common stock for vesting of RSUs (in shares) | 98 | ||||
Issuance of common stock for vesting of RSUs | 1 | $ 1 | |||
Stock-based compensation expense | 9,468 | 9,468 | |||
Balance (in shares) at Jun. 30, 2020 | 101,434 | ||||
Balance at Jun. 30, 2020 | 405,318 | $ 1,014 | 2,069,119 | (1,664,717) | (98) |
Balance (in shares) at Dec. 31, 2020 | 102,763 | ||||
Balance at Dec. 31, 2020 | 275,884 | $ 1,028 | 2,105,252 | (1,830,589) | 193 |
Comprehensive loss: | |||||
Net loss | (208,962) | (208,962) | |||
Other comprehensive income (loss) | 231 | 231 | |||
Exercise of stock options and ESPP shares issuance (in shares) | 760 | ||||
Exercise of stock options and ESPP shares issuance | 13,525 | $ 7 | 13,518 | ||
Net proceeds from issuance of common stock (in shares) | 11,500 | ||||
Net proceeds from issuance of common stock | 269,886 | $ 115 | 269,771 | ||
Equity component of convertible debt issuance | 196,063 | 196,063 | |||
Equity component of convertible debt redemption | (37,846) | (37,846) | |||
Issuance of common stock for vesting of RSUs (in shares) | 216 | ||||
Issuance of common stock for vesting of RSUs | 2 | $ 2 | |||
Stock-based compensation expense | 22,270 | 22,270 | |||
Balance (in shares) at Jun. 30, 2021 | 115,239 | ||||
Balance at Jun. 30, 2021 | 531,053 | $ 1,152 | 2,569,028 | (2,039,551) | 424 |
Balance (in shares) at Mar. 31, 2021 | 103,279 | ||||
Balance at Mar. 31, 2021 | 201,636 | $ 1,033 | 2,122,743 | (1,922,230) | 90 |
Comprehensive loss: | |||||
Net loss | (117,321) | (117,321) | |||
Other comprehensive income (loss) | 334 | 334 | |||
Exercise of stock options and ESPP shares issuance (in shares) | 344 | ||||
Exercise of stock options and ESPP shares issuance | 6,565 | $ 3 | 6,562 | ||
Net proceeds from issuance of common stock (in shares) | 11,500 | ||||
Net proceeds from issuance of common stock | $ 115 | 269,771 | |||
Equity component of convertible debt issuance | 196,063 | 196,063 | |||
Equity component of convertible debt redemption | (37,846) | (37,846) | |||
Issuance of common stock for vesting of RSUs (in shares) | 116 | ||||
Issuance of common stock for vesting of RSUs | 1 | $ 1 | |||
Stock-based compensation expense | 11,735 | 11,735 | |||
Balance (in shares) at Jun. 30, 2021 | 115,239 | ||||
Balance at Jun. 30, 2021 | $ 531,053 | $ 1,152 | $ 2,569,028 | $ (2,039,551) | $ 424 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Operating activities | ||
Net loss | $ (208,962) | $ (128,218) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 4,773 | 4,534 |
Amortization of intangible assets | 2,526 | 2,497 |
Stock-based compensation expense | 22,270 | 18,470 |
Loss on extinguishment of debt | 17,689 | 0 |
Amortization of debt issuance costs | 807 | 698 |
Accretion of debt discount | 12,389 | 9,363 |
Finance lease amortization expense | 539 | 720 |
Noncash operating lease expense | 9,550 | 5,772 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (1,855) | 4,059 |
Inventory | (11,557) | (7,160) |
Prepaid expenses and other current assets | (7,484) | 5,424 |
Other assets | (22,623) | (3,251) |
Accounts payable | (11,158) | 12,175 |
Accrued expenses and other | (1,302) | (12,852) |
Accrued compensation | (9,327) | (6,119) |
Net cash used in operating activities | (203,725) | (93,888) |
Investing activities | ||
Purchase of fixed assets | (4,666) | (4,560) |
Net cash used in investing activities | (4,666) | (4,560) |
Financing activities | ||
Proceeds from exercise of stock options, ESPP, and RSU vesting | 13,527 | 7,568 |
Proceeds from issuance of common stock, net | 269,886 | 245,912 |
Payment on extinguishment of 1.75% convertible senior notes due 2025 | (12,578) | 0 |
Payment of principal on 1.75% convertible senior notes due 2025 | (225,000) | 0 |
Proceeds from issuance of 0.75% convertible senior notes due 2028 | 575,000 | 0 |
Payment of debt issuance costs | (16,013) | 0 |
Payments of finance lease principal | (522) | (590) |
Net cash provided by financing activities | 604,300 | 252,890 |
Effect of exchange rates on cash and cash equivalents | (338) | 40 |
Net increase in cash and cash equivalents | 395,571 | 154,482 |
Cash and cash equivalents at beginning of period | 532,756 | 487,429 |
Cash and cash equivalents at end of period | 928,327 | 641,911 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | 5,911 | 4,819 |
Cash paid for income taxes | $ 997 | $ 472 |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (unaudited) (Parenthetical) - Convertible Notes | Jun. 30, 2021 |
1.75 convertible senior notes due 2025 | |
Interest rate (as a percent) | 1.75% |
0.75 convertible senior notes due 2028 | |
Interest rate (as a percent) | 0.75% |
The Company and Basis of Presen
The Company and Basis of Presentation | 6 Months Ended |
Jun. 30, 2021 | |
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), in Europe as ARIKAYCE ® Liposomal 590 mg Nebuliser Dispersion and in Japan as ARIKAYCE inhalation 590mg (amikacin sulfate inhalation drug product). 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 fi brosis (CF). In March 2021, Japan's Ministry of Health, Labour and Welfare (MHLW) approved ARIKAYCE for the treatment of patients with NTM lung disease caused by MAC who did not sufficiently respond to prior treatment with a multidrug regimen. 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 brensocatib and treprostinil palmitil inhalation powder (TPIP). Brensocatib is a small molecule, oral, reversible inhibitor of dipeptidyl peptidase 1 (DPP1), which the Company is developing for the treatment of patients with bronchiectasis and other neutrophil-mediated diseases. TPIP is an inhaled formulation of the treprostinil prodrug treprostinil palmitil which may offer a differentiated product profile for pulmonary arterial hypertension (PAH) and other rare pulmonary disorders. The Company was incorporated in the Commonwealth of Virginia on November 29, 1999 and its principal executive offices are located in Bridgewater, New Jersey. The Company has legal entities in the US, France, Germany, Ireland, Italy, the Netherlands, Switzerland, the United Kingdom (UK), and Japan. The accompanying unaudited interim consolidated financial statements have been prepared pursuant to the rules and regulations for reporting on Form 10-Q. Accordingly, certain information and disclosures required by accounting principles generally accepted in the US for complete consolidated financial statements are not included herein. The unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 20 . 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. The Company had $928.3 million in cash and cash equivalents as of June 30, 2021 and reported a net loss of $209.0 million for the six months ended June 30, 2021. 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 consolidated operating losses, including losses in its US and certain international entities, while funding research and development (R&D) activities for ARIKAYCE, brensocatib, TPIP and its other pipeline programs, and continuing and commencing pre-commercial, commercialization and regulatory activities for ARIKAYCE, 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 a broad range of 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 six months ended June 30, 2021, the Company |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2021 | |
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, 2020 : 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 June 30, 2021 and December 31, 2020, 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): June 30, 2021 Fair Value Carrying Value Level 1 Level 2 Level 3 Cash and cash equivalents $ 928.3 $ 928.3 $ — $ — December 31, 2020 Fair Value Carrying Value Level 1 Level 2 Level 3 Cash and cash equivalents $ 532.8 $ 532.8 $ — $ — 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 six months ended June 30, 2021 and 2020, respectively. As of June 30, 2021 and December 31, 2020, 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. The Company has determined that there were no other-than-temporary impairments during the quarter ended June 30, 2021. 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 0.75% convertible senior notes due 2028 (the 2028 Convertible Notes) (categorized as a Level 2 liability for fair value measurement purposes) as of June 30, 2021 was $641.1 million , determined using current market factors and the ability of the Company to obtain debt on comparable terms to the 2028 Convertible Notes. The $365.4 million carrying value of the 2028 Convertible Notes as of June 30, 2021 excludes the $199.5 million and $10.1 million of the unamortized portion of the debt discount and issuance costs, respectively. The estimated fair value of the liability component of the Company's 1.75% convertible senior notes due 2025 (the 2025 Convertible Notes) (categorized as a Level 2 liability for fair value measurement purposes) as of June 30, 2021 was $236.3 million, determined using current market factors and the ability of the Company to obtain debt on comparable terms to the 2025 Convertible Notes. The $183.4 million carrying value of the 2025 Convertible Notes as of June 30, 2021 excludes the $39.1 million and $2.5 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 six months ended June 30, 2021 and 2020: Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 (in thousands, except per share amounts) Numerator: Net loss $ (117,321) $ (61,854) $ (208,962) $ (128,218) Denominator: Weighted average common shares used in calculation of basic net loss per share: 109,580 96,633 106,328 93,206 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 109,580 96,633 106,328 93,206 Net loss per share: Basic and diluted $ (1.07) $ (0.64) $ (1.97) $ (1.38) The following potentially dilutive securities have been excluded from the computations of diluted weighted average common shares outstanding as of June 30, 2021 and 2020 as their effect would have been anti-dilutive (in thousands): June 30, 2021 2020 Common stock options 14,449 13,272 Unvested restricted stock and RSUs 1,125 868 Convertible debt securities 23,438 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 for the six months ended June 30, 2021 and 2020. June 30, 2021 2020 Customer A 30% 26% Customer B 25% 27% Customer C 23% 25% 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, net consist primarily of net sales of ARIKAYCE in the US. The Company's customers in the US include specialty pharmacies and specialty distributors. Globally, product revenues are recognized once the Company performs and satisfies all five steps mentioned above. 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 pharmacy 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 prompt payment discounts. The payment terms for sales to specialty pharmacies for prompt payment discounts are based on contractual rates agreed with the respective specialty pharmacies. The Company anticipates that its customers will earn these discounts and, therefore, deducts the full amount of these discounts 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. In December 2020, the Company began recognizing product revenue from commercial sales of ARIKAYCE to Germany subsequent to receiving approval from the EC. 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 Financial Accounting Standards Board (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 consolidated statements of comprehensive loss 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 | 6 Months Ended |
Jun. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Inventory | Inventory As of June 30, 2021 and December 31, 2020, the Company's inventory balance consists of the following (in thousands): June 30, 2021 December 31, 2020 Raw materials $ 27,071 $ 21,601 Work-in-process 17,468 18,754 Finished goods 15,846 9,237 $ 60,385 $ 49,592 Inventory is stated at the lower of cost and net realizable value and consists of raw materials, work-in-process and finished goods. The Company began capitalizing inventory costs following FDA approval of ARIKAYCE in September 2018. The Company has not recorded any significant inventory write-downs since that time. The Company currently uses a limited number of third-party contract manufacturing organizations (CMOs) to produce its inventory. |
Intangibles, Net
Intangibles, Net | 6 Months Ended |
Jun. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangibles, Net | Intangibles, Net As of June 30, 2021, the Company's identifiable intangible assets consisted of acquired ARIKAYCE R&D and milestones 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 and EC approvals of ARIKAYCE in September 2018 and October 2020, respectively. Total intangible assets, net was $46.7 million and $49.3 million as of June 30, 2021 and December 31, 2020, 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 $5.1 million per year. A rollforward of the Company's intangible assets for the six months ended June 30, 2021 follows (in thousands): Intangible Asset December 31, 2020 Additions Amortization June 30, 2021 Acquired ARIKAYCE R&D $ 47,289 $ — $ (2,425) $ 44,864 PARI milestones 1,972 — (101) 1,871 $ 49,261 $ — $ (2,526) $ 46,735 |
Fixed Assets, Net
Fixed Assets, Net | 6 Months Ended |
Jun. 30, 2021 | |
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 June 30, 2021 December 31, 2020 Lab equipment 7 $ 11,031 $ 10,352 Furniture and fixtures 7 5,917 5,917 Computer hardware and software 3-5 7,366 7,267 Office equipment 7 89 88 Manufacturing equipment 7 1,567 1,567 Leasehold improvements lease term 35,759 35,289 Construction in progress (CIP) — 25,178 21,823 86,907 82,303 Less: accumulated depreciation (33,123) (28,350) $ 53,784 $ 53,953 |
Accrued Expenses
Accrued Expenses | 6 Months Ended |
Jun. 30, 2021 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Accrued Expenses As of June 30, 2021 and December 31, 2020, the Company's accrued expenses balance consists of the following (in thousands): June 30, 2021 December 31, 2020 Accrued clinical trial expenses $ 13,136 $ 6,733 Accrued professional fees 12,182 8,594 Accrued technical operation expenses 6,896 9,164 Accrued royalty payable 3,654 3,423 Accrued interest payable 2,403 3,631 Accrued sales allowances and related costs 6,314 5,051 Accrued construction costs 141 364 Other accrued expenses 827 847 $ 45,553 $ 37,807 |
Leases
Leases | 6 Months Ended |
Jun. 30, 2021 | |
Leases [Abstract] | |
Leases | LeasesThe Company's lease portfolio consists primarily of office space, manufacturing facilities, research equipment 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 right-of-use 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 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 $0.2 million and $1.0 million for the three months ended June 30, 2021 and 2020, respectively, and $0.3 million and $1.1 million for the six months ended June 30, 2021 and 2020, respectively. Variable costs related to CMO manufacturing agreements are direct costs related to the manufacturing of ARIKAYCE and are capitalized within inventory in the Company's consolidated balance sheet, while the variable costs related to other leasing arrangements, not related to the manufacturing of ARIKAYCE, 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 June 30, Six Months Ended June 30, 2021 2020 2021 2020 Finance right-of-use assets obtained in exchange for lease obligations $ — $ — $ — $ — Operating right-of-use assets obtained in exchange for lease obligations $ 2,100 $ 183 $ 8,641 $ 205 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 manufacturing facility and the specialized equipment contained therein. Costs of $28.1 million incurred by the Company under these additional agreements have been classified within |
Leases | LeasesThe Company's lease portfolio consists primarily of office space, manufacturing facilities, research equipment 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 right-of-use 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 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 $0.2 million and $1.0 million for the three months ended June 30, 2021 and 2020, respectively, and $0.3 million and $1.1 million for the six months ended June 30, 2021 and 2020, respectively. Variable costs related to CMO manufacturing agreements are direct costs related to the manufacturing of ARIKAYCE and are capitalized within inventory in the Company's consolidated balance sheet, while the variable costs related to other leasing arrangements, not related to the manufacturing of ARIKAYCE, 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 June 30, Six Months Ended June 30, 2021 2020 2021 2020 Finance right-of-use assets obtained in exchange for lease obligations $ — $ — $ — $ — Operating right-of-use assets obtained in exchange for lease obligations $ 2,100 $ 183 $ 8,641 $ 205 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 manufacturing facility and the specialized equipment contained therein. Costs of $28.1 million incurred by the Company under these additional agreements have been classified within |
Debt
Debt | 6 Months Ended |
Jun. 30, 2021 | |
Debt Disclosure [Abstract] | |
Debt | Debt In May 2021, the Company completed an underwritten public offering of the 2028 Convertible Notes, in which the Company sold $575.0 million aggregate principal amount of the 2028 Convertible Notes, including the exercise in full of the underwriters' option to purchase an additional $75.0 million in aggregate principal amount of 2028 Convertible Notes. The Company's net proceeds from the offering, after deducting underwriting discounts and commissions and other offering expenses of $16.0 million, were approximately $559.0 million. The 2028 Convertible Notes bear interest payable semiannually in arrears on June 1 and December 1 of each year, beginning on December 1, 2021. The 2028 Convertible Notes mature on June 1, 2028, unless earlier converted, redeemed, or repurchased. In January 2018, the Company completed an underwritten public offering of the 2025 Convertible Notes, in which the Company sold $450.0 million aggregate principal amount of the 2025 Convertible Notes, including the exercise in full of the underwriters' option to purchase an additional $50.0 million in aggregate principal amount of 2025 Convertible Notes. 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 2025 Convertible Notes bear interest payable semiannually in arrears on January 15 and July 15 of each year, beginning on July 15, 2018. The 2025 Convertible Notes mature on January 15, 2025, unless earlier converted, redeemed, or repurchased. A portion of the net proceeds from the 2028 Convertible Notes was used to repurchase $225.0 million of the Company's outstanding 2025 Convertible Notes. The Company recorded a loss on early extinguishment of debt of $17.7 million, primarily related to the premium paid on extinguishment of a portion the 2025 Convertible Notes. 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 2025 Convertible Notes at any time. The initial conversion rate for the 2025 Convertible Notes is 25.5384 shares of common stock per $1,000 principal amount of 2025 Convertible Notes (equivalent to an initial conversion price of approximately $39.16 per share of common stock). On or after March 1, 2028, until the close of business on the second scheduled trading day immediately preceding June 1, 2028, holders may convert their 2028 Convertible Notes at any time. The initial conversion rate for the 2028 Convertible Notes is 30.7692 shares of common stock per $1,000 principal amount of 2028 Convertible Notes (equivalent to an initial conversion price of approximately $32.50 per share of common stock). Upon conversion of either the 2025 Convertible Notes or the 2028 Convertible Notes, 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 conversion rates will be subject to adjustment in some events but will not be adjusted for any accrued and unpaid interest. Holders may convert their 2025 Convertible Notes prior to October 15, 2024 or their 2028 Convertible Notes prior to March 1, 2028, only under the following circumstances, subject to the conditions set forth in the applicable 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 the applicable series of convertible notes, as determined following a request by a holder of such 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 applicable series of 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 or June 30, 2021 for the 2025 Convertible Notes and 2028 Convertible Notes, respectively, (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. Each series of 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 both series of 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 each series of convertible notes into liability and equity components. The carrying amount of the liability component of each series of convertible notes 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 for each series of convertible notes was determined by deducting the fair value of the liability component from the gross proceeds of the applicable 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 2025 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 fair value of the liability component of the 2028 Convertible Notes on the date of issuance was estimated at $371.6 million using an effective interest rate of 7.1% and, accordingly, the residual equity component on the date of issuance was $203.4 million. The respective discounts are being amortized to interest expense over the term of the applicable series of convertible notes and have remaining periods of approximately 3.54 years, with respect to the 2025 Convertible Notes, and 6.92 years, with respect to the 2028 Convertible Notes. The following table presents the carrying value of the Company's debt balance (in thousands): June 30, 2021 December 31, 2020 Face value of outstanding convertible debt $ 800,000 $ 450,000 Debt issuance costs, unamortized (12,621) (5,646) Discount on debt (238,634) (88,036) Debt, long-term $ 548,745 $ 356,318 As of June 30, 2021, future principal repayments of the debt for each of the years through maturity were as follows (in thousands): Year Ending December 31: 2021 $ — 2022 — 2023 — 2024 — 2025 225,000 2026 and thereafter 575,000 $ 800,000 Interest Expense Interest expense related to the 2025 Convertible Notes and 2028 Convertible Notes for the three and six months ended June 30, 2021 and 2020, 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 June 30, Six Months Ended June 30, 2021 2020 2021 2020 Contractual interest expense $ 2,052 $ 1,975 $ 4,021 $ 3,948 Amortization of debt issuance costs 457 349 807 698 Accretion of debt discount 7,482 4,713 12,389 9,363 Total convertible debt interest expense 9,991 7,037 17,217 14,009 Finance lease interest expense 328 432 661 871 Interest expense $ 10,319 $ 7,469 $ 17,878 $ 14,880 |
Shareholders' Equity
Shareholders' Equity | 6 Months Ended |
Jun. 30, 2021 | |
Equity [Abstract] | |
Shareholders' Equity | Shareholders’ Equity Common Stock — As of June 30, 2021, the Company had 500,000,000 shares of common stock authorized with a par value of $0.01 per share and 115,239,269 shares of common stock issued and outstanding. In addition, as of June 30, 2021, the Company had reserved 14,448,585 shares of common stock for issuance upon the exercise of outstanding stock options and 1,124,648 shares of common stock for issuance upon the vesting of RSUs. The Company has also reserved 23,438,430 shares of common stock for issuance upon conversion of the 2025 Convertible Notes and 2028 Convertible Notes, in the aggregate, subject to adjustment in accordance with the applicable indentures. In the second quarter of 2021, the Company completed an underwritten public offering of 11,500,000 shares of the Company's common stock, including 1,500,000 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 $25.00 per share. The Company's net proceeds from the sale of the shares, after deducting the underwriting discounts and offering expenses of $17.5 million, were $270.1 million. In the first quarter of 2021, the Company entered into a sales agreement with SVB Leerink LLC (SVB Leerink), to sell shares of the Company's common stock, with aggregate gross sales proceeds of up to $250.0 million, from time to time, through an “at the market” equity offering program (the ATM program), under which SVB Leerink acts as sales agent. As of June 30, 2021, the Company had not sold or issued any shares under the ATM program. 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. Preferred Stock — As of June 30, 2021, 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 | 6 Months Ended |
Jun. 30, 2021 | |
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. On May 12, 2021, at the Company's 2021 Annual Meeting of Shareholders, the Company's shareholders approved the second amendment to the 2019 Incentive Plan providing for the issuance of an additional 2,750,000 shares under the plan. As of June 30, 2021, 4,679,956 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 six months ended June 30, 2021, the Company granted inducement stock options covering 444,070 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 June 30, 2021, there was $98.9 million of unrecognized compensation expense related to unvested stock options. From time to time, the Company has granted performance-conditioned options to certain of its employees. Vesting of these options is subject to the Company achieving certain performance criteria established at the date of grant and the grantees fulfilling a service condition (continued employment). As of June 30, 2021, the Company had performance-conditioned options totaling 114,780 shares outstanding which had not yet met the recognition criteria. Restricted Stock Units — As of June 30, 2021, there was $26.9 million of unrecognized compensation expense related to unvested RSU awards. 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 six months ended June 30, 2021 and 2020, respectively (in millions): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Research and development $ 4.4 $ 3.0 $ 8.1 $ 5.8 Selling, general and administrative 7.4 6.5 14.2 12.7 Total $ 11.8 $ 9.5 $ 22.3 $ 18.5 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company's provision for income taxes was $0.6 million and $0.4 million for the three months ended June 30, 2021 and 2020, respectively, and $0.9 million and $0.5 million for the six months ended June 30, 2021 and 2020, 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 six months ended June 30, 2021 and 2020. 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 2017 and later, and is generally open for certain states for the years 2016 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 June 30, 2021 and December 31, 2020, the Company had recorded reserves for unrecognized income tax benefits against certain deferred tax assets in the US. However, given the Company’s valuation allowance position, these reserves do not have an impact on the balance sheet as of June 30, 2021 and December 31, 2020 or the consolidated statements of comprehensive loss for the three and six months ended June 30, 2021 and 2020. 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 did not impact its income tax positions. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Rent expense charged to operations was $1.1 million for both the three months ended June 30, 2021 and 2020, and $2.3 million and $1.9 million for the six months ended June 30, 2021 and 2020, 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. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Event In August 2021, the Company acquired Motus Biosciences, Inc. (Motus) and AlgaeneX, Inc. (AlgaeneX), each a privately held, preclinical stage company. In connection with the closing of the Company’s acquisition of Motus, the Company will issue an aggregate of 3,135,374 shares of the Company’s common stock to Motus’s former stockholders and option holders and certain individuals who are entitled to receive a portion of the acquisition consideration (collectively, Motus equityholders), subject to certain reductions. The Company is obligated to issue to Motus equityholders an aggregate of 184,433 shares of the Company’s common stock on each of the first, second and third anniversaries of the closing date and up to 5,348,572 shares in the aggregate upon the achievement of certain development and regulatory milestone events, and to pay to the Motus equityholders an aggregate of $35 million upon the achievement of certain net sales-based milestone events and a portion of the value of a priority review voucher (to the extent issued to the Company), in each case, subject to certain reductions. At the closing of the Company’s acquisition of AlgaeneX, the Company paid $1.5 million in cash to AlgaeneX’s former stockholders and certain individuals who are entitled to receive a portion of the acquisition consideration (collectively, the AlgaeneX equityholders). The Company is obligated to issue to AlgaeneX’s equityholders an aggregate of 368,867 shares of the Company’s common stock upon the achievement of a development milestone event and pay to AlgaeneX equityholders a mid-single digits licensing fee on certain future payments received by the Company in licensing transactions for AlgaeneX’s manufacturing technology, in each case, subject to certain reductions. The shares of the Company’s common stock issuable to the Motus equityholders and the AlgaeneX equityholders are being issued pursuant to Section 4(a)(2) of the Securities Act of 1933, and the number of such issuable shares was calculated based on a per share value of $27.11. The Company will not receive any proceeds from the issuance of common stock to the Motus equityholders or the AlgaeneX equityholders. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2021 | |
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 June 30, 2021 and December 31, 2020, 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): June 30, 2021 Fair Value Carrying Value Level 1 Level 2 Level 3 Cash and cash equivalents $ 928.3 $ 928.3 $ — $ — December 31, 2020 Fair Value Carrying Value Level 1 Level 2 Level 3 Cash and cash equivalents $ 532.8 $ 532.8 $ — $ — 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 six months ended June 30, 2021 and 2020, respectively. As of June 30, 2021 and December 31, 2020, 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. The Company has determined that there were no other-than-temporary impairments during the quarter ended |
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. |
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 for the six months ended June 30, 2021 and 2020. June 30, 2021 2020 Customer A 30% 26% Customer B 25% 27% Customer C 23% 25% 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, net consist primarily of net sales of ARIKAYCE in the US. The Company's customers in the US include specialty pharmacies and specialty distributors. Globally, product revenues are recognized once the Company performs and satisfies all five steps mentioned above. 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 pharmacy 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 prompt payment discounts. The payment terms for sales to specialty pharmacies for prompt payment discounts are based on contractual rates agreed with the respective specialty pharmacies. The Company anticipates that its customers will earn these discounts and, therefore, deducts the full amount of these discounts 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. In December 2020, the Company began recognizing product revenue from commercial sales of ARIKAYCE to Germany subsequent to receiving approval from the EC. |
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 Financial Accounting Standards Board (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 consolidated statements of comprehensive loss 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) | 6 Months Ended |
Jun. 30, 2021 | |
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): June 30, 2021 Fair Value Carrying Value Level 1 Level 2 Level 3 Cash and cash equivalents $ 928.3 $ 928.3 $ — $ — December 31, 2020 Fair Value Carrying Value Level 1 Level 2 Level 3 Cash and cash equivalents $ 532.8 $ 532.8 $ — $ — |
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 six months ended June 30, 2021 and 2020: Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 (in thousands, except per share amounts) Numerator: Net loss $ (117,321) $ (61,854) $ (208,962) $ (128,218) Denominator: Weighted average common shares used in calculation of basic net loss per share: 109,580 96,633 106,328 93,206 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 109,580 96,633 106,328 93,206 Net loss per share: Basic and diluted $ (1.07) $ (0.64) $ (1.97) $ (1.38) |
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 June 30, 2021 and 2020 as their effect would have been anti-dilutive (in thousands): June 30, 2021 2020 Common stock options 14,449 13,272 Unvested restricted stock and RSUs 1,125 868 Convertible debt securities 23,438 11,492 |
Schedule of Percentage of Total Gross Product Revenue Represented by the Three Largest Customers | The following table presents the percentage of total gross product revenue represented by the Company's three largest customers for the six months ended June 30, 2021 and 2020. June 30, 2021 2020 Customer A 30% 26% Customer B 25% 27% Customer C 23% 25% |
Inventory (Tables)
Inventory (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current | As of June 30, 2021 and December 31, 2020, the Company's inventory balance consists of the following (in thousands): June 30, 2021 December 31, 2020 Raw materials $ 27,071 $ 21,601 Work-in-process 17,468 18,754 Finished goods 15,846 9,237 $ 60,385 $ 49,592 |
Intangibles, Net (Tables)
Intangibles, Net (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Rollforward of Intangible Assets | A rollforward of the Company's intangible assets for the six months ended June 30, 2021 follows (in thousands): Intangible Asset December 31, 2020 Additions Amortization June 30, 2021 Acquired ARIKAYCE R&D $ 47,289 $ — $ (2,425) $ 44,864 PARI milestones 1,972 — (101) 1,871 $ 49,261 $ — $ (2,526) $ 46,735 |
Fixed Assets, Net (Tables)
Fixed Assets, Net (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
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 June 30, 2021 December 31, 2020 Lab equipment 7 $ 11,031 $ 10,352 Furniture and fixtures 7 5,917 5,917 Computer hardware and software 3-5 7,366 7,267 Office equipment 7 89 88 Manufacturing equipment 7 1,567 1,567 Leasehold improvements lease term 35,759 35,289 Construction in progress (CIP) — 25,178 21,823 86,907 82,303 Less: accumulated depreciation (33,123) (28,350) $ 53,784 $ 53,953 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | As of June 30, 2021 and December 31, 2020, the Company's accrued expenses balance consists of the following (in thousands): June 30, 2021 December 31, 2020 Accrued clinical trial expenses $ 13,136 $ 6,733 Accrued professional fees 12,182 8,594 Accrued technical operation expenses 6,896 9,164 Accrued royalty payable 3,654 3,423 Accrued interest payable 2,403 3,631 Accrued sales allowances and related costs 6,314 5,051 Accrued construction costs 141 364 Other accrued expenses 827 847 $ 45,553 $ 37,807 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Leases [Abstract] | |
Summary of Supplemental Noncash Disclosures included in Consolidated Financial Statements | The table below summarizes the supplemental noncash disclosures of the Company's leases included in its consolidated financial statements (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Finance right-of-use assets obtained in exchange for lease obligations $ — $ — $ — $ — Operating right-of-use assets obtained in exchange for lease obligations $ 2,100 $ 183 $ 8,641 $ 205 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Debt Disclosure [Abstract] | |
Components of Debt Balance | The following table presents the carrying value of the Company's debt balance (in thousands): June 30, 2021 December 31, 2020 Face value of outstanding convertible debt $ 800,000 $ 450,000 Debt issuance costs, unamortized (12,621) (5,646) Discount on debt (238,634) (88,036) Debt, long-term $ 548,745 $ 356,318 |
Schedule of Future Principal Repayments of Debt | As of June 30, 2021, future principal repayments of the debt for each of the years through maturity were as follows (in thousands): Year Ending December 31: 2021 $ — 2022 — 2023 — 2024 — 2025 225,000 2026 and thereafter 575,000 $ 800,000 |
Summary of Interest Expense | Interest expense related to the 2025 Convertible Notes and 2028 Convertible Notes for the three and six months ended June 30, 2021 and 2020, 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 June 30, Six Months Ended June 30, 2021 2020 2021 2020 Contractual interest expense $ 2,052 $ 1,975 $ 4,021 $ 3,948 Amortization of debt issuance costs 457 349 807 698 Accretion of debt discount 7,482 4,713 12,389 9,363 Total convertible debt interest expense 9,991 7,037 17,217 14,009 Finance lease interest expense 328 432 661 871 Interest expense $ 10,319 $ 7,469 $ 17,878 $ 14,880 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
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 six months ended June 30, 2021 and 2020, respectively (in millions): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Research and development $ 4.4 $ 3.0 $ 8.1 $ 5.8 Selling, general and administrative 7.4 6.5 14.2 12.7 Total $ 11.8 $ 9.5 $ 22.3 $ 18.5 |
The Company and Basis of Pres_2
The Company and Basis of Presentation (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
Cash and cash equivalents | $ 928,327 | $ 928,327 | $ 532,756 | ||
Net loss | $ (117,321) | $ (61,854) | $ (208,962) | $ (128,218) |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Fair Value Measurements (Details) | 6 Months Ended | ||||
Jun. 30, 2021USD ($)security | Jun. 30, 2020USD ($) | May 31, 2021USD ($) | Dec. 31, 2020USD ($)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 | $ 238,634,000 | $ 88,036,000 | |||
Unamortized debt issuance expense | $ 12,621,000 | 5,646,000 | |||
0.75 convertible senior notes due 2028 | Convertible Notes | |||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||
Interest rate (as a percent) | 0.75% | ||||
Convertible senior notes | $ 371,600,000 | ||||
Unamortized portion of debt discount | $ 199,500,000 | ||||
Unamortized debt issuance expense | $ 10,100,000 | $ 16,000,000 | |||
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 senior notes | $ 309,100,000 | ||||
Unamortized portion of debt discount | $ 39,100,000 | ||||
Unamortized debt issuance expense | 2,500,000 | $ 14,200,000 | |||
Recurring basis | Carrying Value | |||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||
Cash and cash equivalents | 928,300,000 | 532,800,000 | |||
Recurring basis | Carrying Value | Level 2 | 0.75 convertible senior notes due 2028 | |||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||
Convertible senior notes | 365,400,000 | ||||
Recurring basis | Carrying Value | Level 2 | 1.75 convertible senior notes due 2025 | |||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||
Convertible senior notes | 183,400,000 | ||||
Recurring basis | Fair Value | Level 1 | |||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||
Cash and cash equivalents | 928,300,000 | 532,800,000 | |||
Recurring basis | Fair Value | Level 2 | |||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||
Cash and cash equivalents | 0 | 0 | |||
Recurring basis | Fair Value | Level 2 | 0.75 convertible senior notes due 2028 | |||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||
Convertible senior notes | 641,100,000 | ||||
Recurring basis | Fair Value | Level 2 | 1.75 convertible senior notes due 2025 | |||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||
Convertible senior notes | 236,300,000 | ||||
Recurring basis | Fair Value | Level 3 | |||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||
Cash and cash equivalents | $ 0 | $ 0 |
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 | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Numerator: | ||||
Net loss | $ (117,321) | $ (61,854) | $ (208,962) | $ (128,218) |
Denominator: | ||||
Weighted average common shares used in calculation of basic net loss per share (in shares) | 109,580 | 96,633 | 106,328 | 93,206 |
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) | 109,580 | 96,633 | 106,328 | 93,206 |
Net loss per share: | ||||
Basic (in dollars per share) | $ (1.07) | $ (0.64) | $ (1.97) | $ (1.38) |
Diluted (in dollars per share) | $ (1.07) | $ (0.64) | $ (1.97) | $ (1.38) |
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 | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
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) | 14,449 | 13,272 |
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) | 1,125 | 868 |
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) | 23,438 | 11,492 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Concentration Risk (Details) - Sales Revenue, Product Line - Customer Concentration Risk | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Customer A | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 30.00% | 26.00% |
Customer B | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 25.00% | 27.00% |
Customer C | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 23.00% | 25.00% |
Inventory - Schedule of Invento
Inventory - Schedule of Inventory, Current (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 27,071 | $ 21,601 |
Work-in-process | 17,468 | 18,754 |
Finished goods | 15,846 | 9,237 |
Inventory, Net | $ 60,385 | $ 49,592 |
Intangibles, Net (Details)
Intangibles, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||||
Intangibles, net | $ 46,735 | $ 46,735 | $ 49,261 | ||
Intangible assets estimated useful life | 12 years | ||||
Amortization of intangible assets, 2021 | 5,100 | $ 5,100 | |||
Amortization of intangible assets, 2022 | 5,100 | 5,100 | |||
Amortization of intangible assets, 2023 | 5,100 | 5,100 | |||
Amortization of intangible assets, 2024 | 5,100 | 5,100 | |||
Amortization of intangible assets, 2025 | 5,100 | 5,100 | |||
Finite-lived Intangible Assets [Roll Forward] | |||||
Intangibles, gross | 49,261 | ||||
Additions | 0 | ||||
Amortization | (1,263) | $ (1,248) | (2,526) | $ (2,497) | |
Intangibles, net | 46,735 | 46,735 | 49,261 | ||
Acquired ARIKAYCE R&D | |||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||
Intangibles, net | 44,864 | 44,864 | |||
Finite-lived Intangible Assets [Roll Forward] | |||||
Intangibles, gross | 47,289 | ||||
Additions | 0 | ||||
Amortization | (2,425) | ||||
Intangibles, net | 44,864 | 44,864 | |||
PARI milestones | |||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||
Intangibles, net | 1,871 | 1,871 | |||
Finite-lived Intangible Assets [Roll Forward] | |||||
Intangibles, gross | $ 1,972 | ||||
Additions | 0 | ||||
Amortization | (101) | ||||
Intangibles, net | $ 1,871 | $ 1,871 |
Fixed Assets, Net (Details)
Fixed Assets, Net (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | ||
Fixed assets, gross | $ 86,907 | $ 82,303 |
Less: accumulated depreciation | (33,123) | (28,350) |
Property, Plant and Equipment, Net, Total | 53,784 | 53,953 |
Lab equipment | ||
Property, Plant and Equipment [Line Items] | ||
Fixed assets, gross | $ 11,031 | 10,352 |
Estimated Useful Life (years) | 7 years | |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Fixed assets, gross | $ 5,917 | 5,917 |
Estimated Useful Life (years) | 7 years | |
Computer hardware and software | ||
Property, Plant and Equipment [Line Items] | ||
Fixed assets, gross | $ 7,366 | 7,267 |
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 | 88 |
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 | $ 35,759 | 35,289 |
Construction in progress (CIP) | ||
Property, Plant and Equipment [Line Items] | ||
Fixed assets, gross | $ 25,178 | $ 21,823 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Payables and Accruals [Abstract] | ||
Accrued clinical trial expenses | $ 13,136 | $ 6,733 |
Accrued professional fees | 12,182 | 8,594 |
Accrued technical operation expenses | 6,896 | 9,164 |
Accrued royalty payable | 3,654 | 3,423 |
Accrued interest payable | 2,403 | 3,631 |
Accrued sales allowances and related costs | 6,314 | 5,051 |
Accrued construction costs | 141 | 364 |
Other accrued expenses | 827 | 847 |
Total accrued expenses | $ 45,553 | $ 37,807 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Lessee, Lease, Description [Line Items] | ||||
Variable lease, cost | $ 0.2 | $ 1 | $ 0.3 | $ 1.1 |
Lease cost, future right-of-use asset | $ 28.1 | |||
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 | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Lease, Cost [Abstract] | ||||
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 obligations | $ 2,100 | $ 183 | $ 8,641 | $ 205 |
Debt - Narrative (Details)
Debt - Narrative (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||
May 31, 2021USD ($)day$ / shares | Jan. 31, 2018USD ($)day$ / shares | Jun. 30, 2021USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2021USD ($) | Jun. 30, 2020USD ($) | Dec. 31, 2020USD ($) | |
Debt Instrument [Line Items] | |||||||
Underwriting discounts and commissions and other offering expenses | $ 12,621,000 | $ 12,621,000 | $ 5,646,000 | ||||
Net proceeds | 575,000,000 | $ 0 | |||||
Loss on extinguishment of debt | 17,689,000 | $ 0 | 17,689,000 | $ 0 | |||
0.75 convertible senior notes due 2028 | |||||||
Debt Instrument [Line Items] | |||||||
Initial conversion rate | 0.0307692 | ||||||
1.75 convertible senior notes due 2025 | |||||||
Debt Instrument [Line Items] | |||||||
Initial conversion rate | 0.0255384 | ||||||
Convertible Notes | 0.75 convertible senior notes due 2028 | |||||||
Debt Instrument [Line Items] | |||||||
Aggregate principal amount | $ 575,000,000 | ||||||
Option to purchase additional debt | 75,000,000 | ||||||
Underwriting discounts and commissions and other offering expenses | 16,000,000 | 10,100,000 | $ 10,100,000 | ||||
Net proceeds | $ 559,000,000 | ||||||
Initial conversion price (in dollars per share) | $ / shares | $ 32.50 | ||||||
Convertible senior notes | $ 371,600,000 | ||||||
Effective interest rate | 7.10% | ||||||
Equity component of convertible debt | $ 203,400,000 | ||||||
Remaining discount amortization period | 6 years 11 months 1 day | ||||||
Convertible Notes | 0.75 convertible senior notes due 2028 | Conversion Term (i) | |||||||
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 | 0.75 convertible senior notes due 2028 | Conversion Term (ii) | |||||||
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 | 0.75 convertible senior notes due 2028 | Conversion Term (iii) | |||||||
Debt Instrument [Line Items] | |||||||
Threshold trading days following fundamental change | day | 30 | ||||||
Convertible Notes | 0.75 convertible senior notes due 2028 | Conversion Term (iv) | |||||||
Debt Instrument [Line Items] | |||||||
Threshold trading days | day | 20 | ||||||
Threshold consecutive trading days | day | 30 | ||||||
Threshold percent of stock price trigger | 130.00% | ||||||
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 | $ 2,500,000 | $ 2,500,000 | ||||
Net proceeds | $ 435,800,000 | ||||||
Repurchased amount | $ 225,000,000 | ||||||
Loss on extinguishment of debt | $ 17,700,000 | ||||||
Initial conversion price (in dollars per share) | $ / shares | $ 39.16 | ||||||
Convertible senior notes | $ 309,100,000 | ||||||
Effective interest rate | 7.60% | ||||||
Equity component of convertible debt | $ 140,900,000 | ||||||
Remaining discount amortization period | 3 years 6 months 14 days | ||||||
Convertible Notes | 1.75 convertible senior notes due 2025 | Conversion Term (i) | |||||||
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 | 1.75 convertible senior notes due 2025 | Conversion Term (ii) | |||||||
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 | 1.75 convertible senior notes due 2025 | Conversion Term (iii) | |||||||
Debt Instrument [Line Items] | |||||||
Threshold trading days following fundamental change | day | 30 | ||||||
Convertible Notes | 1.75 convertible senior notes due 2025 | Conversion Term (iv) | |||||||
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 | Jun. 30, 2021 | Dec. 31, 2020 |
Debt Disclosure [Abstract] | ||
Face value of outstanding convertible debt | $ 800,000 | $ 450,000 |
Debt issuance costs, unamortized | (12,621) | (5,646) |
Discount on debt | (238,634) | (88,036) |
Debt, long-term | $ 548,745 | $ 356,318 |
Debt - Future Principal Repayme
Debt - Future Principal Repayments of Debt (Details) $ in Thousands | Jun. 30, 2021USD ($) |
Year Ending December 31: | |
2021 | $ 0 |
2022 | 0 |
2023 | 0 |
2024 | 0 |
2025 | 225,000 |
2026 and thereafter | 575,000 |
Total | $ 800,000 |
Debt - Interest Expense (Detail
Debt - Interest Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Debt Disclosure [Abstract] | ||||
Contractual interest expense | $ 2,052 | $ 1,975 | $ 4,021 | $ 3,948 |
Amortization of debt issuance costs | 457 | 349 | 807 | 698 |
Accretion of debt discount | 7,482 | 4,713 | 12,389 | 9,363 |
Total convertible debt interest expense | 9,991 | 7,037 | 17,217 | 14,009 |
Finance lease interest expense | 328 | 432 | 661 | 871 |
Interest expense | $ 10,319 | $ 7,469 | $ 17,878 | $ 14,880 |
Shareholders' Equity - Narrativ
Shareholders' Equity - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |||
Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
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) | 115,239,269 | 102,763,060 | ||
Common stock, outstanding shares (in shares) | 115,239,269 | 102,763,060 | ||
Offering price per share (in dollars per share) | $ 25 | $ 23.25 | ||
Payments of stock issuance costs | $ 17.5 | $ 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 | |||
Public Stock Offering | ||||
Class of Stock [Line Items] | ||||
Shares sold in offering (in shares) | 11,500,000 | 11,155,000 | ||
Aggregate net proceeds from stock offering | $ 270.1 | $ 245.9 | ||
Over-Allotment Option | ||||
Class of Stock [Line Items] | ||||
Shares sold in offering (in shares) | 1,500,000 | 1,455,000 | ||
ATM Program | ||||
Class of Stock [Line Items] | ||||
Common stock authorized, aggregate gross sales proceeds (up to) | $ 250 | |||
Convertible debt securities | ||||
Class of Stock [Line Items] | ||||
Common stock shares reserved for issuance (in shares) | 23,438,430 | |||
Common stock options | ||||
Class of Stock [Line Items] | ||||
Common stock shares reserved for issuance (in shares) | 14,448,585 | |||
Unvested restricted stock and RSUs | ||||
Class of Stock [Line Items] | ||||
Common stock shares reserved for issuance (in shares) | 1,124,648 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) $ in Millions | May 12, 2021 | May 12, 2020 | May 15, 2018 | Jun. 30, 2021 | May 16, 2019 |
Stock-Based Compensation | |||||
Inducement stock options granted to new employees (in shares) | 444,070 | ||||
Common stock options | |||||
Stock-Based Compensation | |||||
Unrecognized compensation expense related to unvested stock options | $ 98.9 | ||||
Performance options | |||||
Stock-Based Compensation | |||||
Options outstanding (in shares) | 114,780 | ||||
Unvested restricted stock and RSUs | |||||
Stock-Based Compensation | |||||
Unrecognized compensation expense related to unvested RSU awards | $ 26.9 | ||||
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) | 2,750,000 | 4,500,000 | |||
Shares available for grant (in shares) | 4,679,956 | ||||
2018 ESPP | |||||
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 | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Stock-Based Compensation | ||||
Allocated share-based compensation expense | $ 11.8 | $ 9.5 | $ 22.3 | $ 18.5 |
Research and development | ||||
Stock-Based Compensation | ||||
Allocated share-based compensation expense | 4.4 | 3 | 8.1 | 5.8 |
Selling, general and administrative | ||||
Stock-Based Compensation | ||||
Allocated share-based compensation expense | $ 7.4 | $ 6.5 | $ 14.2 | $ 12.7 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||||
Provision for income taxes | $ 622,000 | $ 428,000 | $ 861,000 | $ 464,000 | |
Deferred tax benefit | 0 | $ 0 | 0 | $ 0 | |
Unrecognized tax benefits, interest and penalties accrued | $ 0 | $ 0 | $ 0 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Rent expense charged to operations | $ 1.1 | $ 1.1 | $ 2.3 | $ 1.9 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event $ / shares in Units, $ in Millions | Aug. 05, 2021USD ($)$ / sharesshares |
Motus | |
Subsequent Event [Line Items] | |
Shares issued in acquisition (in shares) | 3,135,374 |
Shares issued upon milestone achievements (in shares) | 5,348,572 |
Cash to be paid upon achievement of milestones | $ | $ 35 |
Share price used to calculate issuable shares (in dollars per share) | $ / shares | $ 27.11 |
Motus | First anniversary of closing date | |
Subsequent Event [Line Items] | |
Shares issued in acquisition (in shares) | 184,433 |
Motus | Second anniversary of closing date | |
Subsequent Event [Line Items] | |
Shares issued in acquisition (in shares) | 184,433 |
Motus | Third anniversary of closing date | |
Subsequent Event [Line Items] | |
Shares issued in acquisition (in shares) | 184,433 |
AlgaeneX | |
Subsequent Event [Line Items] | |
Shares issued upon milestone achievements (in shares) | 368,867 |
Cash paid in acquisition | $ | $ 1.5 |
Share price used to calculate issuable shares (in dollars per share) | $ / shares | $ 27.11 |