Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Sep. 30, 2019 | Nov. 01, 2019 | Mar. 31, 2019 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Sep. 30, 2019 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | ENTA | ||
Entity Registrant Name | ENANTA PHARMACEUTICALS, INC | ||
Entity Central Index Key | 0001177648 | ||
Current Fiscal Year End Date | --09-30 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 19,725,505 | ||
Entity Public Float | $ 1,407,874,725 | ||
Title of 12(b) Security | Common Stock, par value $0.01 per share | ||
Security Exchange Name | NASDAQ | ||
Entity File Number | 001-35839 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 04-3205099 | ||
Entity Address, Address Line One | 500 Arsenal Street | ||
Entity Address, City or Town | Watertown | ||
Entity Address, State or Province | MA | ||
Entity Address, Postal Zip Code | 02472 | ||
City Area Code | 617 | ||
Local Phone Number | 607-0800 | ||
Document Annual Report | true | ||
Document Transition Report | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2019 | Sep. 30, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 51,230 | $ 63,902 |
Short-term marketable securities | 284,006 | 244,828 |
Accounts receivable | 51,313 | 67,205 |
Prepaid expenses and other current assets | 15,299 | 4,454 |
Total current assets | 401,848 | 380,389 |
Long-term marketable securities | 65,013 | 16,389 |
Property and equipment, net | 10,927 | 8,374 |
Deferred tax assets | 11,341 | 8,375 |
Restricted cash | 608 | 608 |
Other long-term assets | 92 | 92 |
Total assets | 489,829 | 414,227 |
Current liabilities: | ||
Accounts payable | 6,689 | 4,745 |
Accrued expenses and other current liabilities | 15,920 | 9,892 |
Income taxes payable | 1,388 | |
Total current liabilities | 22,609 | 16,025 |
Series 1 nonconvertible preferred stock | 1,628 | 1,628 |
Other long-term liabilities | 3,100 | 2,895 |
Total liabilities | 27,337 | 20,548 |
Commitments and contingencies (Note 12) | ||
Stockholders' equity: | ||
Common stock; $0.01 par value per share, 100,000 shares authorized; 19,703 and 19,395 shares issued and outstanding at September 30, 2019 and September 30, 2018, respectively | 197 | 194 |
Additional paid-in capital | 298,409 | 276,526 |
Accumulated other comprehensive income (loss) | 146 | (398) |
Retained earnings | 163,740 | 117,357 |
Total stockholders' equity | 462,492 | 393,679 |
Total liabilities and stockholders' equity | $ 489,829 | $ 414,227 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2019 | Sep. 30, 2018 |
Statement Of Financial Position [Abstract] | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 19,703,000 | 19,395,000 |
Common stock, shares outstanding | 19,703,000 | 19,395,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenue | |||
Total revenue | $ 205,197 | $ 206,625 | $ 102,814 |
Operating expenses: | |||
Research and development | 142,213 | 94,856 | 57,451 |
General and administrative | 26,246 | 23,441 | 20,749 |
Total operating expenses | 168,459 | 118,297 | 78,200 |
Income from operations | 36,738 | 88,328 | 24,614 |
Other income (expense), net: | |||
Interest income (expense), net | 8,819 | 4,852 | 2,492 |
Change in fair value of warrant liability and Series 1 nonconvertible preferred stock | (59) | (159) | |
Total other income (expense), net | 8,819 | 4,793 | 2,333 |
Income before income taxes | 45,557 | 93,121 | 26,947 |
Income tax benefit (expense) | 826 | (21,165) | (9,237) |
Net income | $ 46,383 | $ 71,956 | $ 17,710 |
Net income per share: | |||
Basic | $ 2.37 | $ 3.74 | $ 0.93 |
Diluted | $ 2.21 | $ 3.48 | $ 0.91 |
Weighted average shares outstanding: | |||
Basic | 19,584 | 19,255 | 19,066 |
Diluted | 20,968 | 20,650 | 19,407 |
Royalties [Member] | |||
Revenue | |||
Total revenue | $ 205,197 | $ 191,625 | $ 37,814 |
Milestone [Member] | |||
Revenue | |||
Total revenue | $ 15,000 | $ 65,000 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Statement Of Income And Comprehensive Income [Abstract] | |||
Net income | $ 46,383 | $ 71,956 | $ 17,710 |
Other comprehensive income (loss): | |||
Net unrealized gain (loss) on marketable securities, net of tax expense (benefit) of $173, ($109), and ($78) | 544 | (286) | (131) |
Total other comprehensive income (loss), net of tax | 544 | (286) | (131) |
Comprehensive income | $ 46,927 | $ 71,670 | $ 17,579 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Statement Of Income And Comprehensive Income [Abstract] | |||
Net unrealized gain (loss) on marketable securities, tax expense (benefit) | $ 173 | $ (109) | $ (78) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Retained Earnings [Member] |
Beginning Balance at Sep. 30, 2016 | $ 269,936 | $ 190 | $ 242,081 | $ 19 | $ 27,646 |
Beginning Balance, Shares at Sep. 30, 2016 | 19,036 | ||||
Exercise of stock options | 1,079 | $ 1 | 1,078 | ||
Exercise of stock options, Shares | 72 | ||||
Vesting of restricted stock units, net of withholding | (202) | (202) | |||
Vesting of restricted stock units, net of withholding, Shares | 12 | ||||
Stock-based compensation expense | 13,071 | 13,071 | |||
Income tax benefit from stock option exercises | 213 | 213 | |||
Other comprehensive loss, net of tax | (131) | (131) | |||
Net income | 17,710 | 17,710 | |||
Ending Balance at Sep. 30, 2017 | 301,676 | $ 191 | 256,241 | (112) | 45,356 |
Ending Balance, Shares at Sep. 30, 2017 | 19,120 | ||||
Exercise of stock options and warrants | 6,244 | $ 2 | 6,242 | ||
Exercise of stock options and warrants, Shares | 230 | ||||
Vesting of restricted stock units, net of withholding | (1,756) | $ 1 | (1,757) | ||
Vesting of restricted stock units, net of withholding, Shares | 45 | ||||
Stock-based compensation expense | 15,845 | 15,845 | |||
Other comprehensive loss, net of tax | (286) | (286) | |||
Net income | 71,956 | 71,956 | |||
Ending Balance at Sep. 30, 2018 | $ 393,679 | $ 194 | 276,526 | (398) | 117,357 |
Ending Balance, Shares at Sep. 30, 2018 | 19,395 | ||||
Cumulative effect adjustment for adoption of new accounting guidance (Note 2) | (45) | 45 | |||
Exercise of stock options, Shares | 231 | ||||
Exercise of stock options and warrants | $ 6,848 | $ 2 | 6,846 | ||
Exercise of stock options and warrants, Shares | 231 | ||||
Vesting of restricted stock units, net of withholding | (4,188) | $ 1 | (4,189) | ||
Vesting of restricted stock units, net of withholding, Shares | 77 | ||||
Stock-based compensation expense | 19,226 | 19,226 | |||
Other comprehensive loss, net of tax | 544 | 544 | |||
Net income | 46,383 | 46,383 | |||
Ending Balance at Sep. 30, 2019 | $ 462,492 | $ 197 | $ 298,409 | $ 146 | $ 163,740 |
Ending Balance, Shares at Sep. 30, 2019 | 19,703 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Cash flows from operating activities | |||
Net income | $ 46,383 | $ 71,956 | $ 17,710 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Stock-based compensation expense | 19,226 | 15,845 | 13,071 |
Depreciation and amortization expense | 3,258 | 2,518 | 2,137 |
Deferred income taxes | (3,138) | 1,858 | (1,654) |
Income tax benefit from stock awards | (213) | ||
Premium paid on marketable securities | (1,491) | (319) | (1,229) |
(Accretion) amortization of (discount) premium on marketable securities | (4,336) | (835) | 702 |
Change in fair value of warrant liability and Series 1 nonconvertible preferred stock | 59 | 159 | |
Other non-cash items | 25 | (75) | |
Change in operating assets and liabilities: | |||
Accounts receivable | 15,892 | (56,591) | 2,227 |
Prepaid expenses and other current assets | (10,845) | (918) | 5,678 |
Accounts payable | 1,791 | 1,317 | 633 |
Accrued expenses | 5,750 | 1,843 | 3,443 |
Income taxes payable | (1,388) | (7,910) | 9,511 |
Other long-term liabilities | 291 | 564 | 478 |
Other long-term assets | (92) | ||
Net cash provided by operating activities | 71,418 | 29,220 | 52,653 |
Cash flows from investing activities | |||
Purchase of marketable securities | (549,312) | (293,103) | (251,371) |
Proceeds from maturities and sale of marketable securities | 468,065 | 260,682 | 249,305 |
Purchase of property and equipment | (5,417) | (2,981) | (2,506) |
Net cash used in investing activities | (86,664) | (35,402) | (4,572) |
Cash flows from financing activities | |||
Proceeds from exercise of stock options and warrants | 6,848 | 6,244 | 1,079 |
Income tax benefit from exercise of stock options | 213 | ||
Payments for settlement of share-based awards | (4,188) | (1,756) | (202) |
Payments of capital lease obligations | (86) | (79) | (73) |
Net cash provided by financing activities | 2,574 | 4,409 | 1,017 |
Net (decrease) increase in cash and cash equivalents | (12,672) | (1,773) | 49,098 |
Cash, cash equivalents and restricted cash at beginning of period | 64,510 | 66,283 | 17,185 |
Cash, cash equivalents and restricted cash at end of period | 51,838 | 64,510 | 66,283 |
Supplemental disclosure of cash flow information: | |||
Cash paid for income taxes | 12,672 | 26,088 | 1,588 |
Non-cash items: | |||
Purchases of fixed assets included in accounts payable and accrued expenses | $ 320 | $ 111 | $ 318 |
Nature of the Business
Nature of the Business | 12 Months Ended |
Sep. 30, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Nature of the Business | 1. Nature of the Business Enanta Pharmaceuticals, Inc. (the “Company”), incorporated in Delaware in 1995, is a biotechnology company that uses its robust, chemistry-driven approach and drug discovery capabilities to create small molecule drugs primarily for the treatment of viral infections and liver diseases. The Company discovered glecaprevir, the second protease inhibitor discovered and developed through its collaboration with AbbVie for the treatment of chronic hepatitis C virus, or HCV. Glecaprevir is co-formulated as part of AbbVie’s leading direct-acting antiviral (DAA) combination treatment for HCV, which is marketed under the tradenames MAVYRET ® Royalties from the Company’s AbbVie collaboration and its existing financial resources provide funding to support the Company’s wholly-owned research and development programs , which are primarily focused on the following disease targets: The Company is subject to many of the risks common to companies in the biotechnology industry including, but not limited to, the uncertainties of research and development, competition from technological innovations of others, dependence on collaborative arrangements, protection of proprietary technology, dependence on key personnel and compliance with government regulation. Product candidates currently under development will require significant additional research and development efforts, including extensive preclinical and clinical testing and regulatory approvals, prior to commercialization. These efforts require significant amounts of capital, adequate personnel infrastructure, and extensive compliance reporting capabilities. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements include those of the Company and its subsidiary, Enanta Pharmaceuticals Security Corporation, after elimination of all intercompany accounts and transactions. The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, management’s judgments with respect to its revenue arrangements; valuation of Series 1 nonconvertible preferred stock and stock-based awards; the accrual of research and development expenses, and the accounting for income taxes, including uncertain tax positions and the valuation of net deferred tax assets. Cash Equivalents and Marketable Securities The Company considers all short-term, highly liquid investments with original maturities of ninety days or less at acquisition date to be cash equivalents. Marketable securities with original maturities of greater than ninety days and remaining maturities of less than one year from the balance sheet date are classified as short-term marketable securities. Marketable securities with remaining maturities of greater than one year from the balance sheet date are classified as long-term marketable securities. The Company classifies all of its marketable securities as available-for-sale. The Company continually evaluates the credit ratings of its investment portfolio and underlying securities. The Company invests in accordance with its investment policy and invests at the date of purchase in securities with a rating of A3/A- or higher according to Moody’s or S&P or A- by Fitch. The Company reports available-for-sale investments at fair value as of each balance sheet date and records any unrealized gains or losses as a component of stockholders’ equity. The cost of securities sold is determined on a specific identification basis, and realized gains and losses are included in other income (expense), net within the consolidated statements of operations. If any adjustment to fair value reflects a decline in the value of the investment, the Company considers available evidence to evaluate the extent to which the decline is “other than temporary” and reduces the investment to fair value through a charge to the consolidated statements of operations. There were no such adjustments necessary during the years ended September 30, 2019, 2018, and 2017. Restricted Cash As of September 30, 2019 and 2018 the Company had an outstanding letter of credit collateralized by a money market account of $608 to the benefit of the landlord of one of the Company’s existing building leases. This amount was classified as long-term restricted cash as of September 30, 2019 and 2018. Concentration of Credit Risk and of Significant Customers and Suppliers Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash, cash equivalents, marketable securities and accounts receivable. The Company has all cash and investment balances at one accredited financial institution, including cash in amounts that exceed federally insured limits. The Company does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships. The Company has historically generated the majority of its revenue from its collaborative research and license agreements. As of September 30, 2019 and 2018, accounts receivable consisted of amounts due from the Company’s principal collaborator (see Note 7). The Company is completely dependent on third-party manufacturers for product supply for preclinical and clinical research activities. The Company relies and expects to continue to rely exclusively on several manufacturers to supply the Company with its drug supply requirements related to these activities. These research programs would be adversely affected by a significant interruption in the supply from these third-party manufacturers. Fair Value Measurements Certain assets and liabilities are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. A fair value hierarchy is based on three levels of inputs which are used to measure fair value, of which the first two levels are considered observable and the last is considered unobservable: • Level 1—Quoted prices in active markets for identical assets or liabilities. • Level 2—Observable inputs (other than Level 1 quoted prices) such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. • Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. The Company’s instruments that are carried at fair value are cash equivalents, marketable securities and the Series 1 nonconvertible preferred stock. The carrying values of accounts receivable, accounts payable and accrued expenses approximate their fair value due to the short-term nature of these assets and liabilities. Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Depreciation expense is recognized using the straight-line method over the following estimated useful lives: Laboratory and office equipment 5 years Leasehold improvements Shorter of life of lease or estimated useful life Purchased software 3 years Computer equipment 3 years Furniture 7 years Expenditures for repairs and maintenance of assets are charged to expense as incurred. Costs of major additions and betterments are capitalized and depreciated on a straight-line basis over their useful lives. Upon retirement or sale, the cost and related accumulated depreciation of assets disposed are removed from the accounts and any resulting gain or loss is included in income from operations in the consolidated statements of operations. Impairment of Long-Lived Assets The Company reviews long-lived assets, primarily property and equipment, for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable. Factors that the Company considers in deciding when to perform an impairment review include significant underperformance of the business in relation to expectations, significant negative industry or economic trends, and significant changes or planned changes in the use of the assets. If an impairment review is performed to evaluate a long-lived asset for recoverability, the Company compares forecasts of undiscounted cash flows expected to result from the use and eventual disposition of the long-lived asset to its carrying value. An impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of an asset are less than its carrying amount. The impairment loss would be based on the excess of the carrying value of the impaired asset over its fair value, determined based on discounted cash flows. To date, the Company has not recorded any impairment losses on long-lived assets. Revenue Recognition The Company’s revenue has been generated primarily through collaborative research and license agreements. The terms of these agreements contain multiple deliverables, which may include (i) licenses, (ii) research and development activities, and (iii) participation in joint research and development steering committees. The terms of these agreements may include nonrefundable upfront license fees, payments for research and development activities, payments based upon the achievement of certain milestones, and royalty payments based on product sales derived from the collaboration. Prior to the adoption of ASU 2019-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”) on October 1, 2018 The consideration received under multiple-element arrangements that is fixed or determinable was allocated among the separate units of accounting based on the relative selling prices of the separate units of accounting. The selling price of a unit of accounting within each arrangement was derived using the hierarchy of evidence prescribed by ASC 605-25 validating BESP, the Company considered whether changes in key assumptions used to determine the BESP would have a significant effect on the allocation of the arrangement consideration between the multiple deliverables. Deliverables under a multiple-element arrangement we re separated into multiple units if (i) the delivered item ha d value to the customer on a standalone basis, and (ii) if the arrangement include d a general right of return relative to the delivered item, delivery or performance of the undelivered item wa s considered probable and substantially within the control of the Company. In determining the separate units of accounting, the Company evaluate d whether the license ha d standalone value to the collaborator based on consideration of the relevant facts and circumstances for each arrangement. Factors considered in this determination include d the research and development capabilities of the collaborator and the availability of relevant research expertise in the marketplace. In addition, the Company consider ed whether or not (i) the collaborator could use the license for its intended purpose without the receipt of the remaining deliverables, (ii) the value of the license wa s dependent on the undelivered items, and (iii) the collaborator or other vendors could provide the undelivered items. The arrangement consideration that was fixed or determinable at the inception of the arrangement was then allocated to the separate units of accounting based on their relative selling prices. The appropriate revenue recognition model was applied to each element and revenue was accordingly recognized as each element was delivered. The Company exercised significant judgment in determining whether a deliverable is a separate unit of accounting. Royalty revenue is recognized based on contractual terms when reported sales are reliably measurable and collectibility is reasonably assured, provided that there are no performance obligations remaining. Amounts received prior to satisfying all revenue recognition criteria are recorded as deferred revenue in the accompanying consolidated balance sheets. Amounts not expected to be recognized as revenue within the next twelve months of the consolidated balance sheet date are classified as long-term deferred revenue. In the event that a collaborative research and license agreement is terminated and the Company then has no further performance obligations, the Company recognizes as revenue any amounts that had not previously been recorded as revenue but were classified as deferred revenue at the date of such termination. Effective October 1, 2018, the Company adopted ASU 2014-09, which supersedes the revenue recognition requirements in ASC 605-25 and most industry-specific guidance. Under the new standard, the Company recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The adoption of this guidance did not have an impact on the Company’s revenue recognition over royalty payments as the Company receives sales-based royalties for which the license is deemed to be the predominant item to which the royalties relate. Research and Development Costs Included in research and development costs are wages, stock-based compensation and benefits of employees performing research and development, third-party license fees and other operational costs related to the Company’s research and development activities, including facility-related expenses and external costs of outside contractors engaged to conduct both preclinical and clinical studies and manufacture quantities of product for preclinical and clinical studies. The Company also includes in research and development expenses the costs to complete the Company’s obligations under research collaborations. The Company expenses the cost of each contract as the work is performed. Upfront payments and milestone payments made for the licensing of technology are expensed as research and development in the period in which they are incurred. Advance payments for goods or services to be received in the future for use in research and development activities are recorded as prepaid expenses. The prepaid amounts are expensed as the related goods are delivered or the services are performed. Research and Development and Clinical Manufacturing Accruals The Company has entered into various contracts with third parties to perform research and development and clinical manufacturing. This includes contracts with contract research organizations (“CROs”), clinical manufacturing organizations (“CMOs”), testing laboratories, research hospitals and not for profit organizations and other entities to support our research and development activities. When billing terms under these contracts do not coincide with the timing of when the work is performed, the Company is required to make estimates of outstanding obligations as of period end to those third parties. Any accrual estimates are based on a number of factors, including the Company’s knowledge of the research and development programs and clinical manufacturing activities associated with timelines, invoicing to date, and the provisions in the contract. Significant judgments and estimates are made in determining the accrued balances at the end of any reporting period. Actual results could differ from our estimates. Patent Costs All patent-related costs incurred in connection with filing and prosecuting patent applications are recorded as general and administrative expenses as incurred. Stock-Based Compensation The Company measures all stock options and other stock-based awards granted to employees at fair value on the date of grant. The Company uses the Black-Scholes option-pricing model in the valuation of its stock options. The fair value of performance-based awards and restricted stock units is based on the fair value of the stock on the date of grant. The Company uses the Monte-Carlo model in order to calculate the fair value of the market-based awards. The fair value of options is recognized as stock-based compensation expense over the requisite service period, which is generally the vesting period of the respective award. Commencing with the adoption of ASU No. 2016-09 on October 1, 2017, t Income Taxes The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the financial statements or in the Company’s tax returns. Deferred taxes are determined based on the difference between the financial reporting and tax basis of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. Changes in deferred tax assets and liabilities are recorded in income tax expense. The Company assesses the likelihood that its deferred tax assets will be recovered from future taxable income and, to the extent it believes based upon the weight of available evidence, that it is more likely than not that all or a portion of deferred tax assets will not be realized, a valuation allowance is established through a charge to income tax expense. Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected and considering prudent and feasible tax planning strategies. Uncertain tax positions represent tax positions for which reserves have been established. The Company accounts for uncertainty in income taxes recognized in the consolidated financial statements by applying a two-step process to determine the amount to be recognized. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination by the taxing authorities. If the tax position is deemed more likely than not to be sustained, the tax position is then assessed to determine the amount of benefit to be recognized in the financial statements. The amount that may be recognized is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement. Income tax expense includes the effects of any resulting tax reserves, or unrecognized tax benefits, that are considered appropriate as well as the related net interest and penalties. Net Income per Share Basic net income per common share is computed by dividing the net income by the weighted average number of shares of common stock outstanding for the period. Diluted net income per common share is computed by dividing net income by the weighted average number of common shares outstanding for the period, including potential dilutive common shares assuming the dilutive effect of outstanding stock options and unvested restricted stock units. Market-based awards are included in diluted net income per common share to the extent they would have vested if the period end date was the market criteria measurement date. Segment Data The Company manages its operations as a single segment for the purposes of assessing performance and making operating decisions. The Company is a biotechnology company focused on discovering and developing small molecule drugs for the treatment of viral infections and liver diseases. Revenue is generated exclusively from transactions occurring with partners located in the United States and all assets are held in the United States. Comprehensive Income Comprehensive income includes net income as well as other changes in stockholders’ equity that result from transactions and economic events other than those with stockholders. The Company’s only element of other comprehensive income is unrealized gains and losses on available-for-sale marketable securities. Going Concern In August 2014, the Financial Accounting Standards Board (the “ Presentation of Financial Statements - Going Concern (Subtopic 205-40) . Based on a detailed cash forecast incorporating current research and development activities and related spending plans, the Company believes that its current cash, cash equivalents and short-term and long-term marketable securities on hand at September 30, 2019 should be sufficient to fund operations for the foreseeable future, including at least the next twelve months beyond the date of issuance of these consolidated financial statements. The amount of capital available will depend on the Company’s management of its existing cash, cash equivalents and short-term and long-term marketable securities, as well as the level of future royalties the Company earns under its agreement with AbbVie. If the Company should require financing beyond these resources to fund its research and development efforts, it may not be able to obtain financing on acceptable terms, or at all. Recently Issued Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”) and has since issued several additional amendments thereto, collectively referred to herein as ASC 606. This guidance was effective for the Company in the fiscal year beginning October 1, 2018. The Company adopted ASC 606 as of October 1, 2018 using the modified retrospective transition method. The adoption did not have an impact on its consolidated financial statements as the Company satisfied its performance obligations under its one open revenue contract in fiscal 2011, prior to the adoption of ASC 606. The adoption of this guidance did not have an impact on the Company’s accounting for royalty payments as the Company receives sales-based royalties for which the license is deemed to be the predominant item to which the royalties relate. In June 2018, the FASB issued ASU No. 2018-07, Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”) which aligns the accounting treatment of stock awards granted to nonemployee consultants to those granted to employees. The Company early adopted the amendment as of April 1, 2019. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”) that changes the presentation of restricted cash and cash equivalents on the statement of cash flows. Restricted cash and restricted cash equivalents will be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This standard was effective for the Company in the fiscal year beginning October 1, 2018. The Company adopted ASU 2016-18 retrospectively as of October 1, 2018. Upon the adoption of ASU 2016-18, the amount of cash and cash equivalents previously presented in the consolidated statements of cash flows for the years ended September 30, 2018 and 2017 increased by $608 as of the beginning and end of the period to reflect the inclusion of restricted cash in the amount reported for changes in cash, cash equivalents and restricted cash. In May 2017, the FASB issued ASU No. 2017-09, Compensation—Stock Compensation (Topic 718) (“ASU 2017-09”) which In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which will replace the existing guidance in ASC 840, “Leases.” The FASB has also issued amendments to ASU 2016-02, including ASU No. 2018-11, Leases (Topic 842): Targeted Improvements (ASU 2018-11), which the Company collectively refers to as the new leasing standard. This standard is effective for the Company in the fiscal year beginning October 1, 2019. The Company’s outstanding leases primarily relate to its two facility leases located in Watertown, Massachusetts. In conjunction with these leases, the Company expects to recognize a lease liability and related right-of-use asset as of October 1, 2019 on the Company’s consolidated balance sheet of between $ and $ . In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326) (“ASU 2016-13”), which introduces a new methodology for accounting for credit losses on financial instruments, including available-for-sale debt securities. The guidance establishes a new “expected loss model” that requires entities to estimate current expected credit losses on financial instruments by using all practical and relevant information. Any expected credit losses are to be reflected as allowances rather than reductions in the amortized cost of available-for-sale debt securities. This standard is effective for the Company in the fiscal year beginning October 1, 2020. The Company is currently evaluating the potential impact that ASU 2016-13 may have on its financial position and results of operations. In March 2017, the FASB issued ASU No. 2017-08, Receivables—Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities (“ASU 2017-08”) which requires companies to amend the amortization period for premiums on debt securities with explicit call features to be the earliest call date rather than through the contractual life of the debt instrument. This standard aims to more closely align the recognition of interest income with the manner in which market participants price such instruments. This standard is effective for the Company in the fiscal year beginning October 1, 2019. The Company does not expect ASU 2017-08 to have a material impact on its financial position or results of operations. Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s consolidated financial statements upon adoption . |
Fair Value of Financial Assets
Fair Value of Financial Assets and Liabilities | 12 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Assets and Liabilities | 3. Fair Value of Financial Assets and Liabilities The following tables present information about the Company’s financial assets and liabilities that were subject to fair value measurement on a recurring basis as of September 30, 2019 and 2018 and indicate the fair value hierarchy of the valuation inputs utilized to determine such fair value: Fair Value Measurements at September 30, 2019 Using: Level 1 Level 2 Level 3 Total (in thousands) Assets: Cash equivalents: Money market funds $ 44,569 $ — $ — $ 44,569 Marketable securities: U.S. Treasury notes 170,515 — — 170,515 Corporate bonds — 111,837 — 111,837 Commercial paper — 66,667 — 66,667 $ 215,084 $ 178,504 $ — $ 393,588 Liabilities: Series 1 nonconvertible preferred stock — — 1,628 1,628 $ — $ — $ 1,628 $ 1,628 Fair Value Measurements at September 30, 2018 Using: Level 1 Level 2 Level 3 Total (in thousands) Assets: Cash equivalents: Money market funds $ 51,025 $ — $ — $ 51,025 Commercial paper — 6,987 — 6,987 Corporate bonds — 3,998 — 3,998 Marketable securities: U.S. Treasury notes 42,703 — — 42,703 Commercial paper — 113,885 — 113,885 Corporate bonds — 104,629 — 104,629 $ 93,728 $ 229,499 $ — $ 323,227 Liabilities: Series 1 nonconvertible preferred stock — — 1,628 1,628 $ — $ — $ 1,628 $ 1,628 Cash equivalents at September 30, 2019 and 2018 consist of money market funds, commercial paper and corporate bonds which are readily convertible to cash and with less than 90 days until maturity. During the years ended September 30, 2019, 2018, and 2017, there were no transfers between Level 1, Level 2 and Level 3. The outstanding shares of Series 1 nonconvertible preferred stock a s of September 30, 2019 and 2018 were measured at fair value. The fair value of the outstanding shares were based on significant inputs not observable in the market, which represented a Level 3 measurement within the fair value hierarchy. The Company utilized a probability-weighted valuation model which takes into consideration various outcomes that may require the Company to transfer assets upon liquidation. Changes in the fair values of the Series 1 nonconvertible preferred stock are recognized in other income (expense), net in the consolidated statements of operations. The recurring Level 3 fair value measurements of the Company’s warrant liability and Series 1 nonconvertible preferred stock using probability-weighted discounted cash flow include the following significant unobservable inputs: Range September 30, Unobservable Input 2019 2018 Probabilities of payout 0%-60% 0%-70% Discount rate 6.00% 6.25% The following table provides a rollforward of the aggregate fair values of the Company’s warrants for the purchase of Series 1 nonconvertible preferred stock and the outstanding Series 1 nonconvertible preferred stock for which fair value is determined by Level 3 inputs: Warrant Liability Series 1 Nonconvertible Preferred Stock (in thousands) Balance, September 30, 2016 $ 1,251 $ 159 Warrants exercised (549 ) 549 Increase in fair value 105 54 Balance, September 30, 2017 807 762 Warrants exercised (766 ) 766 Warrants expired (41 ) — Increase in fair value — 100 Balance, September 30, 2018 — 1,628 Increase in fair value — — Balance, September 30, 2019 $ — $ 1,628 |
Marketable Securities
Marketable Securities | 12 Months Ended |
Sep. 30, 2019 | |
Investments Debt And Equity Securities [Abstract] | |
Marketable Securities | 4. Marketable Securities As of September 30, 2019 and 2018, the fair value of available-for-sale marketable securities, by type of security, was as follows: September 30, 2019 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (in thousands) U.S. Treasury notes $ 170,519 $ 60 $ (64 ) $ 170,515 Corporate bonds 111,690 170 (23 ) 111,837 Commercial paper 66,667 — — 66,667 $ 348,876 $ 230 $ (87 ) $ 349,019 September 30, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (in thousands) Commercial paper $ 113,885 $ — $ — $ 113,885 Corporate bonds 105,105 1 (477 ) 104,629 U.S. Treasury notes 42,801 — (98 ) 42,703 $ 261,791 $ 1 $ (575 ) $ 261,217 As of September 30, 2019 and 2018, marketable securities consisted of investments that mature within one year, with the exception of certain corporate bonds and U.S. Treasury notes, which have maturities between one and three years and an aggregate fair value of $65,013 and $16,389, respectively. |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Sep. 30, 2019 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment, Net | 5. Property and Equipment, Net Property and equipment, net consisted of the following as of September 30, 2019 and 2018: September 30, 2019 2018 (in thousands) Laboratory and office equipment $ 13,403 $ 11,110 Leasehold improvements 6,623 3,739 Purchased software 1,299 1,039 Furniture 1,303 630 Computer equipment 480 331 Construction in progress — 617 23,108 17,466 Less: Accumulated depreciation and amortization (12,181 ) (9,092 ) $ 10,927 $ 8,374 Depreciation and amortization expense for property and equipment, including assets acquired under capital leases, was $3,258, $2,518 and $2,137 for the years ended September 30, 2019, 2018, and 2017, respectively. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities and Other Long-Term Liabilities | 12 Months Ended |
Sep. 30, 2019 | |
Payables And Accruals [Abstract] | |
Accrued Expenses and Other Current Liabilities and Other Long-Term Liabilities | 6. Accrued Expenses and Other Current Liabilities and Other Long-Term Liabilities Accrued expenses and other current liabilities and other long-term liabilities consisted of the following as of September 30, 2019 and 2018: September 30, 2019 2018 Accrued expenses and other current liabilities: (in thousands) Accrued research and development expenses $ 6,936 $ 3,617 Accrued payroll and related expenses 3,894 3,274 Accrued clinical manufacturing 3,447 1,901 Accrued professional fees 759 507 Accrued other 884 593 $ 15,920 $ 9,892 Other long-term liabilities: Uncertain tax positions $ 1,746 $ 1,792 Accrued rent expense 900 593 Capital lease obligation 200 293 Asset retirement obligation 254 217 $ 3,100 $ 2,895 |
Collaboration Agreements
Collaboration Agreements | 12 Months Ended |
Sep. 30, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Collaboration Agreements | 7. Collaboration Agreements AbbVie Collaboration On November 27, 2006, the Company entered into a Collaborative Development and License Agreement (the “AbbVie Agreement”) with Abbott Laboratories to identify, develop and commercialize HCV NS3 and NS3/4A protease inhibitor compounds, including paritaprevir and glecaprevir. The agreement was assigned by Abbott to AbbVie Inc. on January 1, 2013 in connection with Abbott’s transfer of its research-based pharmaceuticals business to AbbVie. Under the terms of the AbbVie Agreement, as amended, AbbVie paid the Company upfront license payments and full-time equivalent (“ FTE ”) reimbursements to fund research activities. The Company is also eligible to receive milestone payments for the successful development by AbbVie of one or more HCV compounds, as well as annually tiered, per-product royalties on the portion of AbbVie’s net sales of its HCV treatment regimens allocated to the protease inhibitor product. The Company determined that the deliverables under the AbbVie Agreement included (i) the non-exclusive, royalty-free, worldwide research license and the exclusive, royalty-bearing development and commercialization license, (ii) the research services, and (iii) a commitment to participate on a steering committee, all of which were to be delivered over a three-year period. The Company concluded that the license did not have standalone value as it was dependent, in part, upon the Company’s continuing involvement in the HCV protease inhibitor research and its involvement in the joint steering committee. Additionally, the undelivered items, including the Company’s participation in the joint steering committee, which was considered participatory due to its decision making responsibilities, and the research services, did not have vendor-specific objective evidence (“VSOE”) or vendor objective evidence (“VOE”) of fair value. Therefore, the license, the research services, and the joint steering committee participation were treated as a single unit of accounting. Accordingly, all amounts received were deferred, and revenue was recognized using the proportional performance model over the period during which the Company performed research services in connection with the AbbVie Agreement, as amended. Subsequent to the research and evaluation period, which ended in June 2011, all decisions related to the development, commercialization and marketing have been made by AbbVie. The Company has the right to continue to attend the joint steering committee meetings to monitor the development and marketing plans; however, the Company has no decision-making rights. As such, the joint steering committee commitment became protective in nature as of June 16, 2011. During the years ended September 30, 2018 and 2017, the Company recognized $15,000 and $65,000, respectively, in milestone payments under the AbbVie Agreement as a result of AbbVie’s commercialization regulatory approvals. From commencement of the collaboration through September 30, 2019 the Company has received an upfront license payment, research funding, milestone payments, and preferred stock financing totaling $396,000 under the AbbVie agreement The Company is also receiving annually tiered royalties per Company protease product ranging from ten percent up to twenty percent, or on a blended basis from the low double digits up to the high teens, on the portion of AbbVie’s calendar year net sales of each HCV regimen that is allocated to the protease inhibitor product in the regimen. Beginning with each January 1, the cumulative net sales of a given royalty-bearing protease inhibitor product start at zero for purposes of calculating the tiered royalties on a product-by-product basis. The following table details the royalty tiers associated with cumulative calendar year net sales allocated to each royalty-bearing product as provided in the AbbVie Agreement: Calendar Year Net Sales Royalty Tier (in thousands) (%) up to $500,000 10% from $500,000 up to $750,000 12% from $750,000 up to $1,000,000 14% from $1,000,000 up to $2,500,000 17% greater than or equal to $2,500,000 20% Royalties owed to the Company under the agreement can be reduced by AbbVie in certain circumstances, including (i) if AbbVie exercises its right to license or otherwise acquire rights to intellectual property controlled by a third party where a product could not be legally developed or commercialized in a country without the third-party intellectual property right, (ii) where a product developed under the collaboration agreement is sold in a country and not covered by a valid patent claim in such country, and (iii) where sales of a generic product are equal to at least a specified percentage of AbbVie’s market share of its product in a country. AbbVie’s obligation to pay royalties on a product developed under the agreement expires on a country-by-country basis upon the later of (i) the date of expiration of the last of the licensed patents with a valid claim covering the product in the applicable country, or (ii) ten years after the first commercial sale of the product in the applicable country. Subject to certain exceptions, a party’s rights and obligations under the agreement continue until (i) such time as AbbVie is no longer developing a product candidate or (ii) if, as of the time AbbVie is no longer developing any product candidates, AbbVie is commercializing any other protease inhibitor product, such time as all royalty terms for all covered products have ended. Accordingly, the final expiration date of the agreement is currently indeterminable. Either party may terminate the agreement for cause in the event of a material breach, subject to prior notice and the opportunity to cure, or in the event of the other party’s bankruptcy. Additionally, AbbVie may terminate the agreement for any reason upon specified prior notice. If the Company terminates the agreement for cause or AbbVie terminates without cause, any licenses and other rights granted to AbbVie will terminate and AbbVie will be deemed to have granted the Company (i) a non-exclusive, perpetual, fully-paid, worldwide, royalty-free license, with the right to sublicense, under AbbVie’s intellectual property used in any product candidate, and (ii) an exclusive (even as to AbbVie), perpetual, fully-paid, worldwide, royalty-free license, with the right to sublicense, under AbbVie’s interest in any joint intellectual property rights to develop product candidates resulting from covered compounds and to commercialize any products derived from such compounds. Upon the Company’s request, AbbVie will also transfer to the Company all right, title and interest in any related product trademarks, regulatory filings and clinical trials. If AbbVie terminates the agreement for the Company’s uncured breach, the milestone and royalty payments payable by AbbVie may be reduced, the licenses granted to AbbVie will remain in place, the Company will be deemed to have granted AbbVie an exclusive license under the Company’s interest in joint intellectual property, AbbVie will continue to have the right to commercialize any covered products, and all rights and licenses granted to the Company by AbbVie will terminate. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | 8. Stockholders’ Equity The Company is authorized to issue 100,000 shares of common stock at a par value of $0.01. Each share of common stock entitles the holder to one vote on all matters submitted to a vote of the Company’s stockholders. Common stockholders are entitled to receive such dividends as may be declared by the board of directors, if any. |
Series 1 Nonconvertible Preferr
Series 1 Nonconvertible Preferred Stock and Warrants | 12 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Series 1 Nonconvertible Preferred Stock and Warrants | 9. Series 1 Nonconvertible Preferred Stock and Warrants The Company’s Certificate of Incorporation authorizes the issuance of up to 2,000 shares of Series 1 nonconvertible preferred stock at a par value of $0.01 per share. Holders of Series 1 nonconvertible preferred stock are not entitled to receive dividends. In the event of any liquidation, deemed liquidation, dissolution or winding up of the Company, the Series 1 nonconvertible preferred stockholders are entitled to receive in preference to all other stockholders, an amount equal to $1.00 per share, adjusted for any stock dividends, stock splits or reclassifications. Series 1 nonconvertible preferred stockholders will not be entitled to vote unless required by the Company pursuant to the laws of the State of Delaware. The Company may redeem the Series 1 nonconvertible preferred stock with the approval of the holders of a majority of the outstanding shares of Series 1 nonconvertible preferred stock at a redemption price of $1.00 per share. The Company must redeem the stock within 60 days of such election. Shares that are redeemed will be retired or canceled and not reissued by the Company. As these shares qualify as a derivative, they are classified as a liability on the Company’s consolidated balance sheet. In October and November 2010, a total of 2,000 warrants to purchase Series 1 nonconvertible preferred stock were issued. The warrants had an expiration date of October 4, 2017 and any warrants exercised by that date were converted into Series 1 nonconvertible preferred stock. A total of 1,930 shares of Series 1 nonconvertible preferred stock were outstanding as of September 30, 2019 and 2018. For the years ended September 30, 2019, 2018, and 2017, the remeasurement of the then outstanding warrants and Series 1 nonconvertible preferred stock resulted in expense of $0, ($59), and $(159), which was recorded in other income (expense), net in the consolidated statements. The total fair value of the Series 1 nonconvertible preferred stock was $1,628 as of September 30, 2019 and 2018. |
Stock-Based Awards
Stock-Based Awards | 12 Months Ended |
Sep. 30, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Awards | 10. Stock-Based Awards The Company’s 2019 Equity Incentive Plan (the “2019 Plan”) permits the Company to sell or issue awards of common stock or restricted common stock or to grant awards of incentive stock options or nonqualified stock options for the purchase of common stock, restricted stock units, performance units, stock appreciation rights or other cash incentive awards, to employees, members of the board of directors and consultants of the Company. The number of shares of common stock that may be issued under the 2019 Plan is subject to increase by the number of shares forfeited under any options forfeited and not exercised under the 2019 Plan or any predecessor plans such as the 2012 Equity Incentive Plan or the 1995 Equity Incentive Plan. As of September 30, 2019, 1,879 shares remained available for future awards under the 2019 Plan. The 2019 Plan replaces and is the successor to the 2012 Equity Incentive Plan (the “2012 Plan”) and the 1995 Equity Incentive Plan (the “1995 Plan”). The 2012 and 1995 Plans provided for the Company to sell or issue awards of common stock or restricted common stock, or to grant awards of incentive stock options or nonqualified stock options for the purchase of common stock, to employees, members of the board of directors and consultants of the Company. Sales, issuances or grants of shares entitle the holder to purchase common stock from the Company, for a specified exercise price, during a period specified by the applicable equity award agreement. Upon the closing of the Company’s initial public offering, all remaining shares reserved for issuance under the 1995 Plan were transferred to the 2012 Plan and no further awards were made under the 1995 Plan. Upon the approval of the 2019 Plan by the Company’s shareholders in February 2019, all remaining shares reserved for issuance under the 2012 Plan were transferred to the 2019 Plan and no further awards have been made under the 2012 Plan. Under the Company’s Employee Stock Purchase Plan (“ESPP”) a total of 186 shares of common stock are reserved for issuance. As of September 30, 2019, the Company had not commenced any offering under the ESPP and no ESPP shares have been issued. The Company applies the fair value recognition provisions for all stock-based awards granted or modified. In the case of service-based awards, the compensation cost is recorded over the requisite service period of the award on the straight-line method based on the grant-date fair value. The requisite service period for service-based option awards is generally four years. Options granted under the 2019 Plan to employees generally vest over four years and to non-employee directors over one year, and expire after ten years. Stock Option Valuation The fair value of each stock option award is determined on the date of grant using the Black-Scholes option-pricing model. During the years ended September 30, 2018 and 2017, the Company estimated expected volatility based on a combination of the Company’s historical stock volatility since its March 2013 IPO and the historical volatility of publicly traded peer companies. During the year ended September 30, 2019, the Company began utilizing the volatility of the Company’s traded stock price following our March 2013 IPO to estimate expected volatility. The expected term of the Company’s options has been determined utilizing the “simplified” method for awards that qualify as “plain-vanilla” options. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. The expected dividend yield is zero on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future. As required under our equity plans, the exercise price for awards granted is not to be less than the fair value of common shares as estimated by the Company as of the date of grant. The relevant data used to determine the value of the stock option awards are as follows, presented on a weighted average basis: Years Ended September 30, 2019 2018 2017 Risk-free interest rate 2.76 % 2.29 % 1.97 % Expected term (in years) 6.05 6.05 6.05 Expected volatility 55 % 57 % 60 % Expected dividends 0 % 0 % 0 % The following table summarizes stock option activity, including aggregate intrinsic value for the year ended September 30, 2019: Shares Issuable Under Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term in years Aggregate Intrinsic Value (in thousands) (in thousands) Outstanding as of September 30, 2018 2,624 $ 36.65 7.1 $ 129,115 Granted 653 82.41 Exercised (231 ) 29.68 Forfeited (79 ) 63.68 Outstanding as of September 30, 2019 2,967 $ 46.54 6.7 $ 57,336 Options vested and expected to vest as of September 30, 2019 2,967 $ 46.54 6.7 $ 57,336 Options exercisable as of September 30, 2019 1,954 $ 37.09 5.7 $ 48,839 The aggregate intrinsic value of options is calculated as the difference between the exercise price of the options and the fair value of the Company’s common stock. The following tables summarize additional exercise and grant date information: Years Ended September 30, 2019 2018 2017 (in thousands) Aggregate intrinsic value of stock options exercised $ 13,855 $ 14,180 $ 1,503 Proceeds to Company from stock options exercised $ 6,848 $ 6,243 $ 1,079 Performance-Based Options In March 2013, the Company granted to certain executives options to purchase 167 shares that would vest upon the achievement of certain performance-based targets. The aggregate grant date fair value of these options was $2,479. During the year ended September 30, 2017, certain performance-based targets were achieved and the Company recorded stock-based compensation expense of $413 related to achievement of those targets. No stock-based compensation expense related to these options was recognized during the years ended September 30, 2019 and 2018 as the performance period for these options ended during the year ended September 30, 2017. Market and Performance-Based Stock Unit Awards The Company awards both performance share units, or PSUs, and relative total stockholder return units, or rTSRUs, to its executive officers. The PSUs vest and result in issuance, or settlement, of common shares for each recipient, based upon the recipient’s continued employment with the Company through the settlement date of the award and the Company’s achievement of specified research and development milestones. The requisite service period of the PSUs is generally 2 years. The rTSRUs vest and result in the issuance of common stock based upon the recipient’s continuing employment with the Company through the settlement date of the award and the relative ranking of the total stockholder return, or TSR, of the Company’s common stock in relation to the TSR of the component companies in the NASDAQ Biotech Index over two specified periods that are two years apart, based on a comparison of average closing stock prices in specified periods noted in the award agreement. The number of market-based rTSRUs awarded represents the target number of shares of common stock that may be earned; however, the actual number of shares that may be earned ranges from 0 % to 150 % or 200 % of the target number , depending on the award agreement and the year of the award . The Company used a Monte Carlo model to estimate the grant-date fair value of the rTSRUs. Assumptions and estimates utilized in the calculation of the fair value of the rTSRUs include the risk-free interest rate, dividend yield, expected volatility based on the historical volatility of publicly traded peer companies and the remaining performance period of the award . The table below sets forth the weighted average grant date fair value assumptions used to value the rTSRUs: Years Ended September 30, 2019 2018 2017 Risk-free interest rate 2.65 % 2.18 % 1.24 % Dividend yield 0 % 0 % 0 % Expected volatility 62 % 62 % 66 % Remaining performance period (years) 2.03 1.83 1.99 The following table summarizes PSU and rTSRU activity (at target) for the year ended September 30, 2019: PSUs rTSRUs Shares Weighted Average Grant Date Fair Value per Share Shares Weighted Average Grant Date Fair Value per Share (in thousands, except per share data) Unvested at September 30, 2018 70 $ 50.97 70 $ 59.96 Granted 21 67.13 21 47.42 Vested (36 ) 35.89 (45 ) 46.11 Cancelled (14 ) 49.20 (5 ) 68.13 Unvested at September 30, 2019 41 $ 73.02 41 $ 67.76 A total of 80% of target PSUs and 192.91% of target rTSRUs granted in December 2015 vested during the year ended September 30, 2018, resulting in the issuance of an aggregate of 68 common shares, net of share withholding for income taxes. A total of 80% of target PSUs and 200% of target rTSRUs granted in January 2017 vested during the year ended September 30, 2019, resulting in the issuance of an aggregate of 125 common shares, net of share withholding for income taxes. Restricted Stock Units In November 2016, the Company awarded restricted stock units to its employees, which vest as to 50% of the units on the third anniversary of the award and 50% on the fourth anniversary of the award, provided the employee remains employed with the Company at the time of vesting. The fair value of these awards was determined based on the fair value of the stock on the date of grant and is recognized as stock-based compensation expense over the requisite service period. The following table summarizes the restricted stock unit activity for the year to date period ending September 30, 2019: Restricted Stock Units Weighted Average Grant Date Fair Value per Share (in thousands, except per share data) Unvested at September 30, 2018 109 $ 30.00 Granted — — Vested — — Cancelled (14 ) 30.00 Unvested at September 30, 2019 95 $ 30.00 Stock-Based Compensation Expense The Company recorded the following stock-based compensation expense for the years ended September 30, 2019, 2018, and 2017: Years Ended September 30, 2019 2018 2017 (in thousands) Research and development $ 8,833 $ 6,160 $ 4,078 General and administrative 10,393 9,685 8,993 $ 19,226 $ 15,845 $ 13,071 Years Ended September 30, 2019 2018 2017 (in thousands) Stock options $ 15,854 $ 12,694 $ 10,442 rTSRUs 1,568 1,721 1,267 PSUs 1,278 641 668 Restricted stock units 526 789 694 $ 19,226 $ 15,845 $ 13,071 As of September 30, 2019, the Company had an aggregate of $38,298 of unrecognized stock-based compensation cost, which is expected to be recognized over a weighted average period of 2.5 years. |
Net Income Per Share
Net Income Per Share | 12 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | 11. Net Income Per Share Basic and diluted net income per common share was calculated as follows for the years ended September 30, 2019, 2018, and 2017: Years Ended September 30, 2019 2018 2017 (in thousands, except per share data) Basic net income per share: Numerator: Net income $ 46,383 $ 71,956 $ 17,710 Denominator: Weighted average common shares outstanding — basic 19,584 19,255 19,066 Net income per share common share — basic $ 2.37 $ 3.74 $ 0.93 Diluted net income per share: Numerator: Net income $ 46,383 $ 71,956 $ 17,710 Denominator: Weighted average common shares outstanding — basic 19,584 19,255 19,066 Dilutive effect of common stock equivalents 1,384 1,395 341 Weighted average common shares outstanding — diluted 20,968 20,650 19,407 Net income per share common share — diluted $ 2.21 $ 3.48 $ 0.91 Anti-dilutive common stock equivalents excluded from above 843 295 2,161 The impact of certain common stock equivalents were excluded from the computation of diluted net income per common share attributable to common stockholders for the years ended September 30, 2019, 2018, and 2017, because those options had an anti-dilutive impact due to the assumed proceeds per share using the treasury stock method being greater than the average fair value of the Company’s common shares for those periods. As of September 30, 2019, 2018, and 2017, the Company excluded unvested performance stock unit awards from the calculation of diluted net income per common share as these awards contain performance conditions that would not have been achieved as of the end of each reporting period had the measurement period ended as of that date. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Sep. 30, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 12. Commitments and Contingencies Leases The Company has two leases located in Watertown, Massachusetts. The first lease, for office and laboratory space at 500 Arsenal Street, was effective from fiscal 2011 to 2018. During the year ended September 30, 2015, the Company amended the lease to expand the rented space and extend the lease term through September 2022 In connection with the 500 Arsenal Street lease, the Company has an outstanding letter of credit in the amount of $608 as of September 30, 2019 and 2018, collateralized by a money market account. As of September 30, 2019 and 2018, the Company classified the money market account as long-term restricted cash. The second lease, for office space located at 400 Talcott Avenue, was effective September 2018 with a lease term that extends through August 2024. The lease includes a rent-free period and lease incentives as well as escalating rent payments over the course of the lease. The net amount of t hese escalations , incentives and rent-free period w ere accrued and recognized as rent expense on a straight-line basis over the term of occupancy. For the years ended September 30, 2019, 2018, and 2017, the Company recognized rent expense of $2,492, $2,033, and $2,025, respectively, in the consolidated statements of operations, related to these facility leases. Future minimum lease payments under both leases as of September 30, 2019 are as follows: Years Ended September 30, Operating Leases Capital Leases (in thousands) 2020 $ 2,728 $ 93 2021 2,803 101 2022 2,684 99 2023 608 — 2024 519 — Thereafter — — Total $ 9,342 $ 293 Intellectual Property Licenses In 2012 the Company entered into a non-exclusive intellectual property license agreement with a licensor of research technology under which the Company was required to pay the third party licensor an upfront license fee and additional fees up to the third anniversary of the agreement. In addition, the Company was required to pay annual maintenance fees for each year that the agreement remained in effect. During the year ended September 30, 2017 the Company paid $115 under the agreement. The license agreement was terminated during the year ended September 30, 2017. Litigation and Contingencies Related to Use of Intellectual Property From time to time, the Company may become subject to legal proceedings, claims and litigation arising in the ordinary course of business. The Company currently is not a party to any threatened or pending litigation. However, third parties might allege that the Company or its collaborators are infringing their patent rights or that the Company is otherwise violating their intellectual property rights. Such third parties may resort to litigation against the Company or its collaborators, which the Company has agreed to indemnify. With respect to some of these patents, the Company expects that it will be required to obtain licenses and could be required to pay license fees or royalties, or both. These licenses may not be available on acceptable terms, or at all. A costly license, or inability to obtain a necessary license, would have a material adverse effect on the Company’s financial condition, results of operations or cash flows. The Company accrues contingent liabilities when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. Indemnification Agreements In the ordinary course of business, the Company may provide indemnifications of varying scope and terms to customers, vendors, lessors, business partners, and other parties with respect to certain matters including, but not limited to, losses arising out of breach of such agreements or from services to be provided to the Company, or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with members of its board of directors and its executive officers that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is, in many cases, unlimited. To date, the Company has not incurred any material costs as a result of such indemnifications. In addition, the Company maintains officers and directors insurance coverage. The Company does not believe that the outcome of any claims under indemnification arrangements will have a material effect on its financial position, results of operations or cash flows, and has not accrued any liabilities related to such obligations in its financial statements as of September 30, 2019 and 2018. |
Income Taxes
Income Taxes | 12 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 13. Income Taxes Income before income taxes for all periods presented is from domestic operations, which are the Company’s only operations. During the years ended September 30, 2019, 2018, and 2017, the Company recorded income tax benefit (expense) as follows: Years Ended September 30, 2019 2018 2017 (in thousands) Current income tax benefit (expense): Federal $ (1,841 ) $ (16,449 ) $ (10,078 ) State (372 ) (2,858 ) (813 ) Deferred income tax benefit (expense): Federal 2,431 (2,245 ) 1,503 State 608 387 151 $ 826 $ (21,165 ) $ (9,237 ) A reconciliation of the U.S. federal statutory income tax rate to the Company’s effective tax rate is as follows: Years Ended September 30, 2019 2018 2017 Federal statutory income tax rate 21.0 % 24.5 % 35.0 % State taxes, net of federal benefit 1.8 2.6 2.7 Federal research and development tax credit (12.8 ) (5.2 ) (7.4 ) Remeasurement of net deferred tax assets — 4.2 — Share-based compensation (6.7 ) (2.8 ) 4.5 Foreign-derived intangible income (3.2 ) — — Other (1.9 ) (0.6 ) (0.5 ) Effective income tax rate (1.8 %) 22.7 % 34.3 % Net deferred tax assets as of September 30, 2019 and 2018 consisted of the following: September 30, 2019 2018 (in thousands) Deferred tax assets: Share-based compensation $ 9,901 $ 7,372 Other temporary differences 915 828 Accrued compensation 821 696 Tax credit carryforwards 763 — Accrued expenses 150 60 Capitalized research and development expenses — 223 Unrealized loss — 139 Total deferred tax assets 12,550 9,318 Valuation allowance — — Net deferred tax assets 12,550 9,318 Deferred tax liabilities: Depreciation (1,027 ) (798 ) Prepaid expenses (148 ) (145 ) Unrealized gain (34 ) — Total deferred tax liabilities (1,209 ) (943 ) Net deferred income tax assets (liabilities) $ 11,341 $ 8,375 The net deferred tax asset is presented as a long-term asset on the consolidated balance sheets. After consideration of all the evidence, both positive and negative, the Company determined that no valuation allowance was needed for all or a portion of its deferred tax assets as of September 30, 2019 because it is more likely than not that the deferred tax assets will be realized. In subsequent periods, the Company may determine that it is more likely than not that the deferred tax assets will not be realized, and thus a valuation allowance may be recorded against all or any portion of its deferred tax assets on the Company’s consolidated balance sheet with a corresponding non-cash charge to income tax expense in the consolidated statements of operations. As of September 30, 2019, the Company had a federal and state research and development tax credit carryforward of $635 and $310, respectively, for tax return purposes, a majority of which begin to expire in 2039. The Company files tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by federal and state jurisdictions, where applicable. The Company’s tax years in the U.S. are still open under statute from 2015 to the present. Earlier years may be examined to the extent that tax credit or net operating loss carryforwards are used in future periods. During 2018, the Company received notice of examination by the Internal Revenue Service (“IRS”) for the year ending September 30, 2016. The Company received and agreed to a notice of proposed adjustment from the IRS which was paid in September 2018, the amount of which was immaterial to the financial statements. The Company is in the process of finalizing the completion of the IRS audit. During October 2018, the Company received notice of examination by the Massachusetts Department of Revenue (“DOR”) for the years ending September 30, 2015 and September 30, 2016. No adjustments have been agreed to date. The Company has not received notice of examination by any other jurisdictions for any other tax year open under statute. Uncertain tax positions represent tax positions for which reserves have been established. The Company’s policy is to record interest and penalties related to uncertain tax positions as part of income tax expense. Total interest related to uncertain tax positions recorded as a liability on the Company’s consolidated balance sheets were $244 and $113 as of September 30, 2019 and 2018, respectively. A reconciliation of the beginning and ending amount of uncertain tax positions is summarized as follows: September 30, 2019 2018 (in thousands) Beginning Balance $ 1,679 $ 1,175 Additions based on tax positions for the current period 156 563 Reductions for tax positions due to lapse of statute of limitations (87 ) — Reductions for tax positions of prior periods (98 ) (59 ) Ending Balance $ 1,650 $ 1,679 The Company does not expect that its uncertain tax position will materially change within the next twelve months. |
401(k) Plan
401(k) Plan | 12 Months Ended |
Sep. 30, 2019 | |
Postemployment Benefits [Abstract] | |
401(k) Plan | 14. 401(k) Plan The Company has a 401(k) plan. This plan covers substantially all employees who meet minimum age and service requirements. During the years ended September 30, 2019, 2018, and 2017, the Company recognized $1,068, $852 and $712, respectively, of expense related to its contributions to this plan. |
Selected Quarterly Financial Da
Selected Quarterly Financial Data (unaudited) | 12 Months Ended |
Sep. 30, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Quarterly Financial Data (unaudited) | 15. Selected Quarterly Financial Data (unaudited) Quarterly financial information for fiscal 2019 and 2018 is presented in the following table: 2019 Quarter Ended December 31, 2018 March 31, 2019 June 30, 2019 September 30, 2019 (in thousands, except per share data) Revenue $ 69,886 $ 39,631 $ 44,367 $ 51,313 Operating expenses 42,030 40,935 40,612 44,882 Other income (expense), net 1,885 2,245 2,415 2,274 Income tax benefit (expense) (3,730 ) 3,204 866 486 Net income 26,011 4,145 7,036 9,191 Net income per common share — basic (2) $ 1.34 $ 0.21 $ 0.36 $ 0.47 Net income per common share — diluted (2) $ 1.25 $ 0.20 $ 0.33 $ 0.44 2018 Quarter Ended December 31, 2017 March 31, 2018 June 30, 2018 September 30, 2018 (in thousands, except per share data) Revenue (1) $ 38,109 $ 44,049 $ 57,262 $ 67,205 Operating expenses 23,732 27,190 34,622 32,753 Other income (expense), net 960 1,066 1,338 1,429 Income tax (expense) (3,644 ) (5,370 ) (3,690 ) (8,461 ) Net income 11,693 12,555 20,288 27,420 Net income per common share — basic (2) $ 0.61 $ 0.65 $ 1.05 $ 1.41 Net income per common share — diluted (2) $ 0.59 $ 0.61 $ 0.97 $ 1.30 (1) During the first quarter of 2018, the Company recognized $15,000 in milestone revenue from AbbVie upon achievement of commercialization regulatory approval of AbbVie’s glecaprevir-containing regimen in Japan. (2) T he earnings per share amounts for each quarter may not sum to the fiscal year amounts due to rounding and the effect of weighting. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements include those of the Company and its subsidiary, Enanta Pharmaceuticals Security Corporation, after elimination of all intercompany accounts and transactions. The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, management’s judgments with respect to its revenue arrangements; valuation of Series 1 nonconvertible preferred stock and stock-based awards; the accrual of research and development expenses, and the accounting for income taxes, including uncertain tax positions and the valuation of net deferred tax assets. |
Cash Equivalents and Marketable Securities | Cash Equivalents and Marketable Securities The Company considers all short-term, highly liquid investments with original maturities of ninety days or less at acquisition date to be cash equivalents. Marketable securities with original maturities of greater than ninety days and remaining maturities of less than one year from the balance sheet date are classified as short-term marketable securities. Marketable securities with remaining maturities of greater than one year from the balance sheet date are classified as long-term marketable securities. The Company classifies all of its marketable securities as available-for-sale. The Company continually evaluates the credit ratings of its investment portfolio and underlying securities. The Company invests in accordance with its investment policy and invests at the date of purchase in securities with a rating of A3/A- or higher according to Moody’s or S&P or A- by Fitch. The Company reports available-for-sale investments at fair value as of each balance sheet date and records any unrealized gains or losses as a component of stockholders’ equity. The cost of securities sold is determined on a specific identification basis, and realized gains and losses are included in other income (expense), net within the consolidated statements of operations. If any adjustment to fair value reflects a decline in the value of the investment, the Company considers available evidence to evaluate the extent to which the decline is “other than temporary” and reduces the investment to fair value through a charge to the consolidated statements of operations. There were no such adjustments necessary during the years ended September 30, 2019, 2018, and 2017. |
Restricted Cash | Restricted Cash As of September 30, 2019 and 2018 the Company had an outstanding letter of credit collateralized by a money market account of $608 to the benefit of the landlord of one of the Company’s existing building leases. This amount was classified as long-term restricted cash as of September 30, 2019 and 2018. |
Concentration of Credit Risk and of Significant Customers and Suppliers | Concentration of Credit Risk and of Significant Customers and Suppliers Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash, cash equivalents, marketable securities and accounts receivable. The Company has all cash and investment balances at one accredited financial institution, including cash in amounts that exceed federally insured limits. The Company does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships. The Company has historically generated the majority of its revenue from its collaborative research and license agreements. As of September 30, 2019 and 2018, accounts receivable consisted of amounts due from the Company’s principal collaborator (see Note 7). The Company is completely dependent on third-party manufacturers for product supply for preclinical and clinical research activities. The Company relies and expects to continue to rely exclusively on several manufacturers to supply the Company with its drug supply requirements related to these activities. These research programs would be adversely affected by a significant interruption in the supply from these third-party manufacturers. |
Fair Value Measurements | Fair Value Measurements Certain assets and liabilities are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. A fair value hierarchy is based on three levels of inputs which are used to measure fair value, of which the first two levels are considered observable and the last is considered unobservable: • Level 1—Quoted prices in active markets for identical assets or liabilities. • Level 2—Observable inputs (other than Level 1 quoted prices) such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. • Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. The Company’s instruments that are carried at fair value are cash equivalents, marketable securities and the Series 1 nonconvertible preferred stock. The carrying values of accounts receivable, accounts payable and accrued expenses approximate their fair value due to the short-term nature of these assets and liabilities. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Depreciation expense is recognized using the straight-line method over the following estimated useful lives: Laboratory and office equipment 5 years Leasehold improvements Shorter of life of lease or estimated useful life Purchased software 3 years Computer equipment 3 years Furniture 7 years Expenditures for repairs and maintenance of assets are charged to expense as incurred. Costs of major additions and betterments are capitalized and depreciated on a straight-line basis over their useful lives. Upon retirement or sale, the cost and related accumulated depreciation of assets disposed are removed from the accounts and any resulting gain or loss is included in income from operations in the consolidated statements of operations. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company reviews long-lived assets, primarily property and equipment, for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable. Factors that the Company considers in deciding when to perform an impairment review include significant underperformance of the business in relation to expectations, significant negative industry or economic trends, and significant changes or planned changes in the use of the assets. If an impairment review is performed to evaluate a long-lived asset for recoverability, the Company compares forecasts of undiscounted cash flows expected to result from the use and eventual disposition of the long-lived asset to its carrying value. An impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of an asset are less than its carrying amount. The impairment loss would be based on the excess of the carrying value of the impaired asset over its fair value, determined based on discounted cash flows. To date, the Company has not recorded any impairment losses on long-lived assets. |
Revenue Recognition | Revenue Recognition The Company’s revenue has been generated primarily through collaborative research and license agreements. The terms of these agreements contain multiple deliverables, which may include (i) licenses, (ii) research and development activities, and (iii) participation in joint research and development steering committees. The terms of these agreements may include nonrefundable upfront license fees, payments for research and development activities, payments based upon the achievement of certain milestones, and royalty payments based on product sales derived from the collaboration. Prior to the adoption of ASU 2019-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”) on October 1, 2018 The consideration received under multiple-element arrangements that is fixed or determinable was allocated among the separate units of accounting based on the relative selling prices of the separate units of accounting. The selling price of a unit of accounting within each arrangement was derived using the hierarchy of evidence prescribed by ASC 605-25 validating BESP, the Company considered whether changes in key assumptions used to determine the BESP would have a significant effect on the allocation of the arrangement consideration between the multiple deliverables. Deliverables under a multiple-element arrangement we re separated into multiple units if (i) the delivered item ha d value to the customer on a standalone basis, and (ii) if the arrangement include d a general right of return relative to the delivered item, delivery or performance of the undelivered item wa s considered probable and substantially within the control of the Company. In determining the separate units of accounting, the Company evaluate d whether the license ha d standalone value to the collaborator based on consideration of the relevant facts and circumstances for each arrangement. Factors considered in this determination include d the research and development capabilities of the collaborator and the availability of relevant research expertise in the marketplace. In addition, the Company consider ed whether or not (i) the collaborator could use the license for its intended purpose without the receipt of the remaining deliverables, (ii) the value of the license wa s dependent on the undelivered items, and (iii) the collaborator or other vendors could provide the undelivered items. The arrangement consideration that was fixed or determinable at the inception of the arrangement was then allocated to the separate units of accounting based on their relative selling prices. The appropriate revenue recognition model was applied to each element and revenue was accordingly recognized as each element was delivered. The Company exercised significant judgment in determining whether a deliverable is a separate unit of accounting. Royalty revenue is recognized based on contractual terms when reported sales are reliably measurable and collectibility is reasonably assured, provided that there are no performance obligations remaining. Amounts received prior to satisfying all revenue recognition criteria are recorded as deferred revenue in the accompanying consolidated balance sheets. Amounts not expected to be recognized as revenue within the next twelve months of the consolidated balance sheet date are classified as long-term deferred revenue. In the event that a collaborative research and license agreement is terminated and the Company then has no further performance obligations, the Company recognizes as revenue any amounts that had not previously been recorded as revenue but were classified as deferred revenue at the date of such termination. Effective October 1, 2018, the Company adopted ASU 2014-09, which supersedes the revenue recognition requirements in ASC 605-25 and most industry-specific guidance. Under the new standard, the Company recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The adoption of this guidance did not have an impact on the Company’s revenue recognition over royalty payments as the Company receives sales-based royalties for which the license is deemed to be the predominant item to which the royalties relate. |
Research and Development Costs | Research and Development Costs Included in research and development costs are wages, stock-based compensation and benefits of employees performing research and development, third-party license fees and other operational costs related to the Company’s research and development activities, including facility-related expenses and external costs of outside contractors engaged to conduct both preclinical and clinical studies and manufacture quantities of product for preclinical and clinical studies. The Company also includes in research and development expenses the costs to complete the Company’s obligations under research collaborations. The Company expenses the cost of each contract as the work is performed. Upfront payments and milestone payments made for the licensing of technology are expensed as research and development in the period in which they are incurred. Advance payments for goods or services to be received in the future for use in research and development activities are recorded as prepaid expenses. The prepaid amounts are expensed as the related goods are delivered or the services are performed. |
Research and Development and Clinical Manufacturing Accruals | Research and Development and Clinical Manufacturing Accruals The Company has entered into various contracts with third parties to perform research and development and clinical manufacturing. This includes contracts with contract research organizations (“CROs”), clinical manufacturing organizations (“CMOs”), testing laboratories, research hospitals and not for profit organizations and other entities to support our research and development activities. When billing terms under these contracts do not coincide with the timing of when the work is performed, the Company is required to make estimates of outstanding obligations as of period end to those third parties. Any accrual estimates are based on a number of factors, including the Company’s knowledge of the research and development programs and clinical manufacturing activities associated with timelines, invoicing to date, and the provisions in the contract. Significant judgments and estimates are made in determining the accrued balances at the end of any reporting period. Actual results could differ from our estimates. |
Patent Costs | Patent Costs All patent-related costs incurred in connection with filing and prosecuting patent applications are recorded as general and administrative expenses as incurred. |
Stock-Based Compensation | Stock-Based Compensation The Company measures all stock options and other stock-based awards granted to employees at fair value on the date of grant. The Company uses the Black-Scholes option-pricing model in the valuation of its stock options. The fair value of performance-based awards and restricted stock units is based on the fair value of the stock on the date of grant. The Company uses the Monte-Carlo model in order to calculate the fair value of the market-based awards. The fair value of options is recognized as stock-based compensation expense over the requisite service period, which is generally the vesting period of the respective award. Commencing with the adoption of ASU No. 2016-09 on October 1, 2017, t |
Income Taxes | Income Taxes The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the financial statements or in the Company’s tax returns. Deferred taxes are determined based on the difference between the financial reporting and tax basis of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. Changes in deferred tax assets and liabilities are recorded in income tax expense. The Company assesses the likelihood that its deferred tax assets will be recovered from future taxable income and, to the extent it believes based upon the weight of available evidence, that it is more likely than not that all or a portion of deferred tax assets will not be realized, a valuation allowance is established through a charge to income tax expense. Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected and considering prudent and feasible tax planning strategies. Uncertain tax positions represent tax positions for which reserves have been established. The Company accounts for uncertainty in income taxes recognized in the consolidated financial statements by applying a two-step process to determine the amount to be recognized. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination by the taxing authorities. If the tax position is deemed more likely than not to be sustained, the tax position is then assessed to determine the amount of benefit to be recognized in the financial statements. The amount that may be recognized is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement. Income tax expense includes the effects of any resulting tax reserves, or unrecognized tax benefits, that are considered appropriate as well as the related net interest and penalties. |
Net Income per Share | Net Income per Share Basic net income per common share is computed by dividing the net income by the weighted average number of shares of common stock outstanding for the period. Diluted net income per common share is computed by dividing net income by the weighted average number of common shares outstanding for the period, including potential dilutive common shares assuming the dilutive effect of outstanding stock options and unvested restricted stock units. Market-based awards are included in diluted net income per common share to the extent they would have vested if the period end date was the market criteria measurement date. |
Segment Data | Segment Data The Company manages its operations as a single segment for the purposes of assessing performance and making operating decisions. The Company is a biotechnology company focused on discovering and developing small molecule drugs for the treatment of viral infections and liver diseases. Revenue is generated exclusively from transactions occurring with partners located in the United States and all assets are held in the United States. |
Comprehensive Income | Comprehensive Income Comprehensive income includes net income as well as other changes in stockholders’ equity that result from transactions and economic events other than those with stockholders. The Company’s only element of other comprehensive income is unrealized gains and losses on available-for-sale marketable securities. |
Going Concern | Going Concern In August 2014, the Financial Accounting Standards Board (the “ Presentation of Financial Statements - Going Concern (Subtopic 205-40) . Based on a detailed cash forecast incorporating current research and development activities and related spending plans, the Company believes that its current cash, cash equivalents and short-term and long-term marketable securities on hand at September 30, 2019 should be sufficient to fund operations for the foreseeable future, including at least the next twelve months beyond the date of issuance of these consolidated financial statements. The amount of capital available will depend on the Company’s management of its existing cash, cash equivalents and short-term and long-term marketable securities, as well as the level of future royalties the Company earns under its agreement with AbbVie. If the Company should require financing beyond these resources to fund its research and development efforts, it may not be able to obtain financing on acceptable terms, or at all. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”) and has since issued several additional amendments thereto, collectively referred to herein as ASC 606. This guidance was effective for the Company in the fiscal year beginning October 1, 2018. The Company adopted ASC 606 as of October 1, 2018 using the modified retrospective transition method. The adoption did not have an impact on its consolidated financial statements as the Company satisfied its performance obligations under its one open revenue contract in fiscal 2011, prior to the adoption of ASC 606. The adoption of this guidance did not have an impact on the Company’s accounting for royalty payments as the Company receives sales-based royalties for which the license is deemed to be the predominant item to which the royalties relate. In June 2018, the FASB issued ASU No. 2018-07, Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”) which aligns the accounting treatment of stock awards granted to nonemployee consultants to those granted to employees. The Company early adopted the amendment as of April 1, 2019. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”) that changes the presentation of restricted cash and cash equivalents on the statement of cash flows. Restricted cash and restricted cash equivalents will be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This standard was effective for the Company in the fiscal year beginning October 1, 2018. The Company adopted ASU 2016-18 retrospectively as of October 1, 2018. Upon the adoption of ASU 2016-18, the amount of cash and cash equivalents previously presented in the consolidated statements of cash flows for the years ended September 30, 2018 and 2017 increased by $608 as of the beginning and end of the period to reflect the inclusion of restricted cash in the amount reported for changes in cash, cash equivalents and restricted cash. In May 2017, the FASB issued ASU No. 2017-09, Compensation—Stock Compensation (Topic 718) (“ASU 2017-09”) which In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which will replace the existing guidance in ASC 840, “Leases.” The FASB has also issued amendments to ASU 2016-02, including ASU No. 2018-11, Leases (Topic 842): Targeted Improvements (ASU 2018-11), which the Company collectively refers to as the new leasing standard. This standard is effective for the Company in the fiscal year beginning October 1, 2019. The Company’s outstanding leases primarily relate to its two facility leases located in Watertown, Massachusetts. In conjunction with these leases, the Company expects to recognize a lease liability and related right-of-use asset as of October 1, 2019 on the Company’s consolidated balance sheet of between $ and $ . In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326) (“ASU 2016-13”), which introduces a new methodology for accounting for credit losses on financial instruments, including available-for-sale debt securities. The guidance establishes a new “expected loss model” that requires entities to estimate current expected credit losses on financial instruments by using all practical and relevant information. Any expected credit losses are to be reflected as allowances rather than reductions in the amortized cost of available-for-sale debt securities. This standard is effective for the Company in the fiscal year beginning October 1, 2020. The Company is currently evaluating the potential impact that ASU 2016-13 may have on its financial position and results of operations. In March 2017, the FASB issued ASU No. 2017-08, Receivables—Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities (“ASU 2017-08”) which requires companies to amend the amortization period for premiums on debt securities with explicit call features to be the earliest call date rather than through the contractual life of the debt instrument. This standard aims to more closely align the recognition of interest income with the manner in which market participants price such instruments. This standard is effective for the Company in the fiscal year beginning October 1, 2019. The Company does not expect ASU 2017-08 to have a material impact on its financial position or results of operations. Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s consolidated financial statements upon adoption . |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Property and Equipment Estimated Useful Lives | Property and equipment are stated at cost less accumulated depreciation. Depreciation expense is recognized using the straight-line method over the following estimated useful lives: Laboratory and office equipment 5 years Leasehold improvements Shorter of life of lease or estimated useful life Purchased software 3 years Computer equipment 3 years Furniture 7 years |
Fair Value of Financial Asset_2
Fair Value of Financial Assets and Liabilities (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Financial Assets and Liabilities that were Subject to Fair Value Measurement on Recurring Basis | The following tables present information about the Company’s financial assets and liabilities that were subject to fair value measurement on a recurring basis as of September 30, 2019 and 2018 and indicate the fair value hierarchy of the valuation inputs utilized to determine such fair value: Fair Value Measurements at September 30, 2019 Using: Level 1 Level 2 Level 3 Total (in thousands) Assets: Cash equivalents: Money market funds $ 44,569 $ — $ — $ 44,569 Marketable securities: U.S. Treasury notes 170,515 — — 170,515 Corporate bonds — 111,837 — 111,837 Commercial paper — 66,667 — 66,667 $ 215,084 $ 178,504 $ — $ 393,588 Liabilities: Series 1 nonconvertible preferred stock — — 1,628 1,628 $ — $ — $ 1,628 $ 1,628 Fair Value Measurements at September 30, 2018 Using: Level 1 Level 2 Level 3 Total (in thousands) Assets: Cash equivalents: Money market funds $ 51,025 $ — $ — $ 51,025 Commercial paper — 6,987 — 6,987 Corporate bonds — 3,998 — 3,998 Marketable securities: U.S. Treasury notes 42,703 — — 42,703 Commercial paper — 113,885 — 113,885 Corporate bonds — 104,629 — 104,629 $ 93,728 $ 229,499 $ — $ 323,227 Liabilities: Series 1 nonconvertible preferred stock — — 1,628 1,628 $ — $ — $ 1,628 $ 1,628 |
Fair Value Measurements of the Company's Warrant Liability and Series 1 Nonconvertible Preferred Stock | The recurring Level 3 fair value measurements of the Company’s warrant liability and Series 1 nonconvertible preferred stock using probability-weighted discounted cash flow include the following significant unobservable inputs: Range September 30, Unobservable Input 2019 2018 Probabilities of payout 0%-60% 0%-70% Discount rate 6.00% 6.25% |
Rollforward of Aggregate Fair Values of Warrants and Outstanding Series 1 Nonconvertible Preferred Stock | The following table provides a rollforward of the aggregate fair values of the Company’s warrants for the purchase of Series 1 nonconvertible preferred stock and the outstanding Series 1 nonconvertible preferred stock for which fair value is determined by Level 3 inputs: Warrant Liability Series 1 Nonconvertible Preferred Stock (in thousands) Balance, September 30, 2016 $ 1,251 $ 159 Warrants exercised (549 ) 549 Increase in fair value 105 54 Balance, September 30, 2017 807 762 Warrants exercised (766 ) 766 Warrants expired (41 ) — Increase in fair value — 100 Balance, September 30, 2018 — 1,628 Increase in fair value — — Balance, September 30, 2019 $ — $ 1,628 |
Marketable Securities (Tables)
Marketable Securities (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Investments Debt And Equity Securities [Abstract] | |
Fair Value of Available-for-Sale Marketable Securities by Type of Security | As of September 30, 2019 and 2018, the fair value of available-for-sale marketable securities, by type of security, was as follows: September 30, 2019 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (in thousands) U.S. Treasury notes $ 170,519 $ 60 $ (64 ) $ 170,515 Corporate bonds 111,690 170 (23 ) 111,837 Commercial paper 66,667 — — 66,667 $ 348,876 $ 230 $ (87 ) $ 349,019 September 30, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (in thousands) Commercial paper $ 113,885 $ — $ — $ 113,885 Corporate bonds 105,105 1 (477 ) 104,629 U.S. Treasury notes 42,801 — (98 ) 42,703 $ 261,791 $ 1 $ (575 ) $ 261,217 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Property Plant And Equipment [Abstract] | |
Schedule of Property and Equipment, Net | Property and equipment, net consisted of the following as of September 30, 2019 and 2018: September 30, 2019 2018 (in thousands) Laboratory and office equipment $ 13,403 $ 11,110 Leasehold improvements 6,623 3,739 Purchased software 1,299 1,039 Furniture 1,303 630 Computer equipment 480 331 Construction in progress — 617 23,108 17,466 Less: Accumulated depreciation and amortization (12,181 ) (9,092 ) $ 10,927 $ 8,374 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities and Other Long-Term Liabilities (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Payables And Accruals [Abstract] | |
Accrued Expenses and Other Current Liabilities and Other Long-Term Liabilities | Accrued expenses and other current liabilities and other long-term liabilities consisted of the following as of September 30, 2019 and 2018: September 30, 2019 2018 Accrued expenses and other current liabilities: (in thousands) Accrued research and development expenses $ 6,936 $ 3,617 Accrued payroll and related expenses 3,894 3,274 Accrued clinical manufacturing 3,447 1,901 Accrued professional fees 759 507 Accrued other 884 593 $ 15,920 $ 9,892 Other long-term liabilities: Uncertain tax positions $ 1,746 $ 1,792 Accrued rent expense 900 593 Capital lease obligation 200 293 Asset retirement obligation 254 217 $ 3,100 $ 2,895 |
Collaboration Agreements (Table
Collaboration Agreements (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Summary of Royalty Tiers Associated with Cumulative Calendar Year Net Sales Allocated to Each Royalty-bearing Product | The following table details the royalty tiers associated with cumulative calendar year net sales allocated to each royalty-bearing product as provided in the AbbVie Agreement: Calendar Year Net Sales Royalty Tier (in thousands) (%) up to $500,000 10% from $500,000 up to $750,000 12% from $750,000 up to $1,000,000 14% from $1,000,000 up to $2,500,000 17% greater than or equal to $2,500,000 20% |
Stock-Based Awards (Tables)
Stock-Based Awards (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Data Used to Determine Value of Stock Option Grants, Presented on Weighted Average Basis | The relevant data used to determine the value of the stock option awards are as follows, presented on a weighted average basis: Years Ended September 30, 2019 2018 2017 Risk-free interest rate 2.76 % 2.29 % 1.97 % Expected term (in years) 6.05 6.05 6.05 Expected volatility 55 % 57 % 60 % Expected dividends 0 % 0 % 0 % |
Stock Option Activity | The following table summarizes stock option activity, including aggregate intrinsic value for the year ended September 30, 2019: Shares Issuable Under Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term in years Aggregate Intrinsic Value (in thousands) (in thousands) Outstanding as of September 30, 2018 2,624 $ 36.65 7.1 $ 129,115 Granted 653 82.41 Exercised (231 ) 29.68 Forfeited (79 ) 63.68 Outstanding as of September 30, 2019 2,967 $ 46.54 6.7 $ 57,336 Options vested and expected to vest as of September 30, 2019 2,967 $ 46.54 6.7 $ 57,336 Options exercisable as of September 30, 2019 1,954 $ 37.09 5.7 $ 48,839 |
Summary of Additional Exercise and Grant Date Information | The aggregate intrinsic value of options is calculated as the difference between the exercise price of the options and the fair value of the Company’s common stock. The following tables summarize additional exercise and grant date information: Years Ended September 30, 2019 2018 2017 (in thousands) Aggregate intrinsic value of stock options exercised $ 13,855 $ 14,180 $ 1,503 Proceeds to Company from stock options exercised $ 6,848 $ 6,243 $ 1,079 |
Summary of Restricted Stock Unit Activity | The following table summarizes the restricted stock unit activity for the year to date period ending September 30, 2019: Restricted Stock Units Weighted Average Grant Date Fair Value per Share (in thousands, except per share data) Unvested at September 30, 2018 109 $ 30.00 Granted — — Vested — — Cancelled (14 ) 30.00 Unvested at September 30, 2019 95 $ 30.00 |
Stock-Based Compensation Expense | The Company recorded the following stock-based compensation expense for the years ended September 30, 2019, 2018, and 2017: Years Ended September 30, 2019 2018 2017 (in thousands) Research and development $ 8,833 $ 6,160 $ 4,078 General and administrative 10,393 9,685 8,993 $ 19,226 $ 15,845 $ 13,071 Years Ended September 30, 2019 2018 2017 (in thousands) Stock options $ 15,854 $ 12,694 $ 10,442 rTSRUs 1,568 1,721 1,267 PSUs 1,278 641 668 Restricted stock units 526 789 694 $ 19,226 $ 15,845 $ 13,071 |
Relative Total Stockholder Return Units [Member] | |
Data Used to Determine Value of Stock Option Grants, Presented on Weighted Average Basis | . The table below sets forth the weighted average grant date fair value assumptions used to value the rTSRUs: Years Ended September 30, 2019 2018 2017 Risk-free interest rate 2.65 % 2.18 % 1.24 % Dividend yield 0 % 0 % 0 % Expected volatility 62 % 62 % 66 % Remaining performance period (years) 2.03 1.83 1.99 |
Performance Share Units and Relative Total Stockholder Return Units [Member] | |
Summary of PSUs and rTSRUs Activity | The following table summarizes PSU and rTSRU activity (at target) for the year ended September 30, 2019: PSUs rTSRUs Shares Weighted Average Grant Date Fair Value per Share Shares Weighted Average Grant Date Fair Value per Share (in thousands, except per share data) Unvested at September 30, 2018 70 $ 50.97 70 $ 59.96 Granted 21 67.13 21 47.42 Vested (36 ) 35.89 (45 ) 46.11 Cancelled (14 ) 49.20 (5 ) 68.13 Unvested at September 30, 2019 41 $ 73.02 41 $ 67.76 |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Net Income Per Common Share | Basic and diluted net income per common share was calculated as follows for the years ended September 30, 2019, 2018, and 2017: Years Ended September 30, 2019 2018 2017 (in thousands, except per share data) Basic net income per share: Numerator: Net income $ 46,383 $ 71,956 $ 17,710 Denominator: Weighted average common shares outstanding — basic 19,584 19,255 19,066 Net income per share common share — basic $ 2.37 $ 3.74 $ 0.93 Diluted net income per share: Numerator: Net income $ 46,383 $ 71,956 $ 17,710 Denominator: Weighted average common shares outstanding — basic 19,584 19,255 19,066 Dilutive effect of common stock equivalents 1,384 1,395 341 Weighted average common shares outstanding — diluted 20,968 20,650 19,407 Net income per share common share — diluted $ 2.21 $ 3.48 $ 0.91 Anti-dilutive common stock equivalents excluded from above 843 295 2,161 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Future Minimum Lease Payments | Future minimum lease payments under both leases as of September 30, 2019 are as follows: Years Ended September 30, Operating Leases Capital Leases (in thousands) 2020 $ 2,728 $ 93 2021 2,803 101 2022 2,684 99 2023 608 — 2024 519 — Thereafter — — Total $ 9,342 $ 293 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Summary of Income Tax Benefit (Expense) | During the years ended September 30, 2019, 2018, and 2017, the Company recorded income tax benefit (expense) as follows: Years Ended September 30, 2019 2018 2017 (in thousands) Current income tax benefit (expense): Federal $ (1,841 ) $ (16,449 ) $ (10,078 ) State (372 ) (2,858 ) (813 ) Deferred income tax benefit (expense): Federal 2,431 (2,245 ) 1,503 State 608 387 151 $ 826 $ (21,165 ) $ (9,237 ) |
Reconciliation of Income Tax Provision at Federal Statutory Income Tax Rate and Effective Tax Rate | A reconciliation of the U.S. federal statutory income tax rate to the Company’s effective tax rate is as follows: Years Ended September 30, 2019 2018 2017 Federal statutory income tax rate 21.0 % 24.5 % 35.0 % State taxes, net of federal benefit 1.8 2.6 2.7 Federal research and development tax credit (12.8 ) (5.2 ) (7.4 ) Remeasurement of net deferred tax assets — 4.2 — Share-based compensation (6.7 ) (2.8 ) 4.5 Foreign-derived intangible income (3.2 ) — — Other (1.9 ) (0.6 ) (0.5 ) Effective income tax rate (1.8 %) 22.7 % 34.3 % |
Net Deferred Tax Assets and Liabilities | Net deferred tax assets as of September 30, 2019 and 2018 consisted of the following: September 30, 2019 2018 (in thousands) Deferred tax assets: Share-based compensation $ 9,901 $ 7,372 Other temporary differences 915 828 Accrued compensation 821 696 Tax credit carryforwards 763 — Accrued expenses 150 60 Capitalized research and development expenses — 223 Unrealized loss — 139 Total deferred tax assets 12,550 9,318 Valuation allowance — — Net deferred tax assets 12,550 9,318 Deferred tax liabilities: Depreciation (1,027 ) (798 ) Prepaid expenses (148 ) (145 ) Unrealized gain (34 ) — Total deferred tax liabilities (1,209 ) (943 ) Net deferred income tax assets (liabilities) $ 11,341 $ 8,375 |
Schedule of Reconciliation of Uncertain Tax Positions | A reconciliation of the beginning and ending amount of uncertain tax positions is summarized as follows: September 30, 2019 2018 (in thousands) Beginning Balance $ 1,679 $ 1,175 Additions based on tax positions for the current period 156 563 Reductions for tax positions due to lapse of statute of limitations (87 ) — Reductions for tax positions of prior periods (98 ) (59 ) Ending Balance $ 1,650 $ 1,679 |
Selected Quarterly Financial _2
Selected Quarterly Financial Data (unaudited) (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information | Quarterly financial information for fiscal 2019 and 2018 is presented in the following table: 2019 Quarter Ended December 31, 2018 March 31, 2019 June 30, 2019 September 30, 2019 (in thousands, except per share data) Revenue $ 69,886 $ 39,631 $ 44,367 $ 51,313 Operating expenses 42,030 40,935 40,612 44,882 Other income (expense), net 1,885 2,245 2,415 2,274 Income tax benefit (expense) (3,730 ) 3,204 866 486 Net income 26,011 4,145 7,036 9,191 Net income per common share — basic (2) $ 1.34 $ 0.21 $ 0.36 $ 0.47 Net income per common share — diluted (2) $ 1.25 $ 0.20 $ 0.33 $ 0.44 2018 Quarter Ended December 31, 2017 March 31, 2018 June 30, 2018 September 30, 2018 (in thousands, except per share data) Revenue (1) $ 38,109 $ 44,049 $ 57,262 $ 67,205 Operating expenses 23,732 27,190 34,622 32,753 Other income (expense), net 960 1,066 1,338 1,429 Income tax (expense) (3,644 ) (5,370 ) (3,690 ) (8,461 ) Net income 11,693 12,555 20,288 27,420 Net income per common share — basic (2) $ 0.61 $ 0.65 $ 1.05 $ 1.41 Net income per common share — diluted (2) $ 0.59 $ 0.61 $ 0.97 $ 1.30 (1) During the first quarter of 2018, the Company recognized $15,000 in milestone revenue from AbbVie upon achievement of commercialization regulatory approval of AbbVie’s glecaprevir-containing regimen in Japan. (2) T he earnings per share amounts for each quarter may not sum to the fiscal year amounts due to rounding and the effect of weighting. |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) | 12 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | Oct. 01, 2019 | |
Summary of Accounting and Financial Policies [Line Items] | ||||
Adjustment to fair value | $ 0 | $ 0 | $ 0 | |
Cash and investment restricted as a collateral for outstanding letter of credit | 608,000 | 608,000 | ||
Subsequent Event [Member] | ||||
Summary of Accounting and Financial Policies [Line Items] | ||||
Right-of-use asset | $ 8,300,000 | |||
Lease liability | $ 6,800,000 | |||
ASU 2016-18 [Member] | ||||
Summary of Accounting and Financial Policies [Line Items] | ||||
Cash and investment restricted as a collateral for outstanding letter of credit | 608,000 | $ 608,000 | ||
Money Market Funds [Member] | ||||
Summary of Accounting and Financial Policies [Line Items] | ||||
Cash and investment restricted as a collateral for outstanding letter of credit | $ 608,000 | $ 608,000 | ||
Maximum [Member] | ||||
Summary of Accounting and Financial Policies [Line Items] | ||||
Short-term investments maturity period | 90 days | |||
Short-term marketable securities maturity period | 1 year | |||
Minimum [Member] | ||||
Summary of Accounting and Financial Policies [Line Items] | ||||
Short-term marketable securities maturity period | 90 days | |||
Long-term marketable securities maturity period | 1 year | |||
Income tax benefit recognition, percentage of likelihood of being realized upon settlement | 50.00% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Property and Equipment Estimated Useful Lives (Detail) | 12 Months Ended |
Sep. 30, 2019 | |
Laboratory and Office Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property plant and equipment useful life | 5 years |
Leasehold Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Leasehold improvements useful life | Shorter of life of lease or estimated useful life |
Purchased Software [Member] | |
Property, Plant and Equipment [Line Items] | |
Property plant and equipment useful life | 3 years |
Computer Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property plant and equipment useful life | 3 years |
Furniture [Member] | |
Property, Plant and Equipment [Line Items] | |
Property plant and equipment useful life | 7 years |
Fair Value of Financial Asset_3
Fair Value of Financial Assets and Liabilities - Financial Assets and Liabilities that were Subject to Fair Value Measurement on Recurring Basis (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 |
Assets: | ||||
Assets, Fair Value Disclosure, Total | $ 393,588 | $ 323,227 | ||
Liabilities: | ||||
Liabilities, Fair Value Disclosure, Total | 1,628 | 1,628 | ||
Series 1 Nonconvertible Preferred Stock [Member] | ||||
Liabilities: | ||||
Liabilities | 1,628 | 1,628 | $ 762 | $ 159 |
Level 1 [Member] | ||||
Assets: | ||||
Assets, Fair Value Disclosure, Total | 215,084 | 93,728 | ||
Level 2 [Member] | ||||
Assets: | ||||
Assets, Fair Value Disclosure, Total | 178,504 | 229,499 | ||
Level 3 [Member] | ||||
Liabilities: | ||||
Liabilities, Fair Value Disclosure, Total | 1,628 | 1,628 | ||
Level 3 [Member] | Series 1 Nonconvertible Preferred Stock [Member] | ||||
Liabilities: | ||||
Liabilities | 1,628 | 1,628 | ||
U.S. Treasury Notes [Member] | ||||
Assets: | ||||
Marketable securities | 170,515 | 42,703 | ||
U.S. Treasury Notes [Member] | Level 1 [Member] | ||||
Assets: | ||||
Marketable securities | 170,515 | 42,703 | ||
Money Market Funds [Member] | ||||
Assets: | ||||
Cash equivalents | 44,569 | 51,025 | ||
Money Market Funds [Member] | Level 1 [Member] | ||||
Assets: | ||||
Cash equivalents | 44,569 | 51,025 | ||
Commercial Paper [Member] | ||||
Assets: | ||||
Cash equivalents | 6,987 | |||
Marketable securities | 66,667 | 113,885 | ||
Commercial Paper [Member] | Level 2 [Member] | ||||
Assets: | ||||
Cash equivalents | 6,987 | |||
Marketable securities | 66,667 | 113,885 | ||
Corporate Bonds [Member] | ||||
Assets: | ||||
Cash equivalents | 3,998 | |||
Marketable securities | 111,837 | 104,629 | ||
Corporate Bonds [Member] | Level 2 [Member] | ||||
Assets: | ||||
Cash equivalents | 3,998 | |||
Marketable securities | $ 111,837 | $ 104,629 |
Fair Value of Financial Asset_4
Fair Value of Financial Assets and Liabilities - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |||
Transfers between Level 1, Level 2 and Level 3 | $ 0 | $ 0 | $ 0 |
Fair Value of Financial Asset_5
Fair Value of Financial Assets and Liabilities - Fair Value Measurements of the Company's Warrant Liability and Series 1 Nonconvertible Preferred Stock (Detail) - Level 3 [Member] - Warrant Liability [Member] - Series 1 Nonconvertible Preferred Stock [Member] | Sep. 30, 2019 | Sep. 30, 2018 |
Probabilities of Payout [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Alternative Investment, Valuation Technique [Extensible List] | us-gaap:ValuationTechniqueDiscountedCashFlowMember | us-gaap:ValuationTechniqueDiscountedCashFlowMember |
Discount Rate [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Range | 6 | 6.25 |
Alternative Investment, Valuation Technique [Extensible List] | us-gaap:ValuationTechniqueDiscountedCashFlowMember | us-gaap:ValuationTechniqueDiscountedCashFlowMember |
Minimum [Member] | Probabilities of Payout [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Range | 0 | 0 |
Maximum [Member] | Probabilities of Payout [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Range | 60 | 70 |
Fair Value of Financial Asset_6
Fair Value of Financial Assets and Liabilities - Rollforward of Aggregate Fair Values of Warrants (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Series 1 Nonconvertible Preferred Stock [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Beginning Balance | $ 762 | $ 159 |
Warrants exercised | 766 | 549 |
Increase (Decrease) in fair value | 100 | 54 |
Ending Balance | 1,628 | 762 |
Warrant Liability [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Beginning Balance | 807 | 1,251 |
Warrants exercised | (766) | (549) |
Warrants expired | $ (41) | |
Increase (Decrease) in fair value | 105 | |
Ending Balance | $ 807 |
Marketable Securities - Fair Va
Marketable Securities - Fair Value of Available-for-Sale Marketable Securities by Type of Security (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Sep. 30, 2018 |
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | $ 348,876 | $ 261,791 |
Gross Unrealized Gains | 230 | 1 |
Gross Unrealized Losses | (87) | (575) |
Fair Value | 349,019 | 261,217 |
Corporate Bonds [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 111,690 | 105,105 |
Gross Unrealized Gains | 170 | 1 |
Gross Unrealized Losses | (23) | (477) |
Fair Value | 111,837 | 104,629 |
U.S. Treasury Notes [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 170,519 | 42,801 |
Gross Unrealized Gains | 60 | |
Gross Unrealized Losses | (64) | (98) |
Fair Value | 170,515 | 42,703 |
Commercial Paper [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 66,667 | 113,885 |
Fair Value | $ 66,667 | $ 113,885 |
Marketable Securities - Additio
Marketable Securities - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Schedule of Available-for-sale Securities [Line Items] | ||
Long-term marketable securities | $ 65,013 | $ 16,389 |
Short Term Marketable Securities [Member] | Maximum [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Maturity period of the marketable securities | 1 year | |
Corporate Bonds and U.S. Treasury Notes [Member] | Long Term Marketable Securities [Member] | Maximum [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Maturity period of the marketable securities | 3 years | |
Corporate Bonds and U.S. Treasury Notes [Member] | Long Term Marketable Securities [Member] | Minimum [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Maturity period of the marketable securities | 1 year |
Property and Equipment, Net - S
Property and Equipment, Net - Schedule of Property and Equipment, Net (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Sep. 30, 2018 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 23,108 | $ 17,466 |
Less: Accumulated depreciation and amortization | (12,181) | (9,092) |
Property and equipment, net | 10,927 | 8,374 |
Laboratory and Office Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 13,403 | 11,110 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 6,623 | 3,739 |
Purchased Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 1,299 | 1,039 |
Furniture [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 1,303 | 630 |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 480 | 331 |
Construction in Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 617 |
Property and Equipment, Net - A
Property and Equipment, Net - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Property Plant And Equipment [Abstract] | |||
Depreciation and amortization expense | $ 3,258 | $ 2,518 | $ 2,137 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities and Other Long-Term Liabilities - Accrued Expenses and Other Current Liabilities and Other Long-term Liabilities (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Sep. 30, 2018 |
Accrued expenses and other current liabilities: | ||
Accrued research and development expenses | $ 6,936 | $ 3,617 |
Accrued payroll and related expenses | 3,894 | 3,274 |
Accrued clinical manufacturing | 3,447 | 1,901 |
Accrued professional fees | 759 | 507 |
Accrued other | 884 | 593 |
Accrued expenses | 15,920 | 9,892 |
Other long-term liabilities: | ||
Uncertain tax positions | 1,746 | 1,792 |
Accrued rent expense | 900 | 593 |
Capital lease obligation | 200 | 293 |
Asset retirement obligation | 254 | 217 |
Other long-term liabilities | $ 3,100 | $ 2,895 |
Collaboration Agreements - Addi
Collaboration Agreements - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | 154 Months Ended | |||||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2019 | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||
Milestone revenue payments received | $ 51,313 | $ 44,367 | $ 39,631 | $ 69,886 | $ 67,205 | $ 57,262 | $ 44,049 | $ 38,109 | $ 205,197 | $ 206,625 | $ 102,814 | |
AbbVie [Member] | ||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||
Collaboration agreement date | Nov. 27, 2006 | |||||||||||
Proceed received to fund research activities and preferred stock financing | $ 396,000 | |||||||||||
Collaboration agreement tiered royalty description | from ten percent up to twenty percent, or on a blended basis from the low double digits up to the high teens, on the portion of AbbVie’s calendar year net sales | |||||||||||
Agreement continuation period | 10 years | |||||||||||
AbbVie [Member] | Milestone Payments [Member] | ||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||
Milestone revenue payments received | $ 15,000 | $ 65,000 |
Collaboration Agreements - Summ
Collaboration Agreements - Summary of Royalty Tiers Associated with Cumulative Calendar Year Net Sales Allocated to Each Royalty-bearing Product (Detail) - AbbVie [Member] | 12 Months Ended |
Sep. 30, 2019USD ($) | |
Up to $500,000 [Member] | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |
Royalty Tier | 10.00% |
Up to $500,000 [Member] | Maximum [Member] | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |
Calendar Year Net Sales | $ 500,000,000 |
From $500,000 up to $750,000 | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |
Royalty Tier | 12.00% |
From $500,000 up to $750,000 | Minimum [Member] | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |
Calendar Year Net Sales | $ 500,000,000 |
From $500,000 up to $750,000 | Maximum [Member] | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |
Calendar Year Net Sales | $ 750,000,000 |
From $750,000 up to $1,000,000 | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |
Royalty Tier | 14.00% |
From $750,000 up to $1,000,000 | Minimum [Member] | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |
Calendar Year Net Sales | $ 750,000,000 |
From $750,000 up to $1,000,000 | Maximum [Member] | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |
Calendar Year Net Sales | $ 1,000,000,000 |
From $1,000,000 up to $2,500,000 | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |
Royalty Tier | 17.00% |
From $1,000,000 up to $2,500,000 | Minimum [Member] | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |
Calendar Year Net Sales | $ 1,000,000,000 |
From $1,000,000 up to $2,500,000 | Maximum [Member] | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |
Calendar Year Net Sales | 2,500,000,000 |
Greater than or equal to $2,500,000 [Member] | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |
Calendar Year Net Sales | $ 2,500,000,000 |
Royalty Tier | 20.00% |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) - $ / shares | Sep. 30, 2019 | Sep. 30, 2018 |
Equity [Abstract] | ||
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, par value | $ 0.01 | $ 0.01 |
Series 1 Nonconvertible Prefe_2
Series 1 Nonconvertible Preferred Stock and Warrants - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | Nov. 30, 2010 | |
Class of Stock [Line Items] | ||||
Fair value of the Series 1 nonconvertible preferred stock | $ 1,628 | $ 1,628 | ||
Series 1 Nonconvertible Preferred Stock [Member] | ||||
Class of Stock [Line Items] | ||||
Preferred Shares authorized | 2,000,000 | |||
Par value of outstanding convertible preferred stock | $ 0.01 | |||
Per share value adjusted for stock dividend | 1 | |||
Preferred stock redemption price per share | $ 1 | |||
Redemption period | 60 days | |||
Number of shares issuable upon exercise of the warrants | 2,000,000 | |||
Warrant expiration date | Oct. 4, 2017 | |||
Preferred stock, shares outstanding | 1,930,000 | 1,930,000 | ||
Change in fair value of warrants | $ 0 | $ (59) | $ (159) | |
Fair value of the Series 1 nonconvertible preferred stock | $ 1,628 | $ 1,628 |
Stock-Based Awards - Additional
Stock-Based Awards - Additional Information (Detail) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Nov. 30, 2016 | Mar. 31, 2013 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Expected dividend yield | 0.00% | 0.00% | 0.00% | ||
Compensation expenses | $ 19,226 | $ 15,845 | $ 13,071 | ||
Aggregate of unrecognized stock-based compensation cost | $ 38,298 | ||||
Weighted average recognition period | 2 years 6 months | ||||
Common Stock [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Aggregate of target share issued | 125,000 | 68,000 | |||
PSUs [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares awarded | 21,000 | ||||
Compensation expenses | $ 1,278 | $ 641 | 668 | ||
Percentage of target shares vested | 80.00% | 80.00% | |||
Relative Total Stockholder Return Units [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares awarded | 21,000 | ||||
Compensation expenses | $ 1,568 | $ 1,721 | 1,267 | ||
Percentage of target shares vested | 200.00% | 192.91% | |||
Restricted Stock Units [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Compensation expenses | $ 526 | $ 789 | 694 | ||
Restricted Stock Units [Member] | Tranche One [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 3 years | ||||
Vesting percentage | 50.00% | ||||
Restricted Stock Units [Member] | Tranche Two [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 4 years | ||||
Vesting percentage | 50.00% | ||||
Certain Executives [Member] | Performance-Based Options [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares awarded | 167,000 | ||||
Aggregate grant date fair value of award | $ 2,479 | ||||
Compensation expenses | $ 0 | $ 0 | $ 413 | ||
Certain Executives [Member] | PSUs [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Options granted, requisite service period | 2 years | ||||
Executive Officers [Member] | Relative Total Stockholder Return Units [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares range percentage, minimum | 0.00% | ||||
Executive Officers [Member] | Maximum [Member] | Relative Total Stockholder Return Units [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares range percentage, maximum | 200.00% | ||||
Executive Officers [Member] | Minimum [Member] | Relative Total Stockholder Return Units [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares range percentage, maximum | 150.00% | ||||
2019 Equity Incentive Plan [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares available for future grant | 1,879,000 | ||||
2019 Equity Incentive Plan [Member] | Employees [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Options granted, requisite service period | 4 years | ||||
Options granted, expiration period | 10 years | ||||
2019 Equity Incentive Plan [Member] | Employees [Member] | Maximum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 4 years | ||||
2019 Equity Incentive Plan [Member] | Non-Employee Directors [Member] | Maximum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 1 year | ||||
Employee Stock Purchase Plan [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares available for future grant | 186,000 | ||||
Shares issued | 0 |
Stock-Based Awards - Data Used
Stock-Based Awards - Data Used to Determine Value of Stock Option Grants, Presented on Weighted Average Basis (Detail) | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Share Based Payment Award Stock Options Valuation Assumptions [Line Items] | |||
Expected volatility | 55.00% | 57.00% | 60.00% |
Risk-free interest rate | 2.76% | 2.29% | 1.97% |
Expected term (in years) | 6 years 18 days | 6 years 18 days | 6 years 18 days |
Expected dividends | 0.00% | 0.00% | 0.00% |
Executive Officer [Member] | Relative Total Stockholder Return Units [Member] | |||
Share Based Payment Award Stock Options Valuation Assumptions [Line Items] | |||
Expected volatility | 62.00% | 62.00% | 66.00% |
Expected term (in years) | 2 years 10 days | 1 year 9 months 29 days | 1 year 11 months 26 days |
Risk-free interest rate | 2.65% | 2.18% | 1.24% |
Expected dividends | 0.00% | 0.00% | 0.00% |
Stock-Based Awards - Stock Opti
Stock-Based Awards - Stock Option Activity (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Options | |||
Outstanding as of beginning of period | 2,624 | ||
Granted | 653 | ||
Exercised | (231) | ||
Forfeited | (79) | ||
Outstanding as of end of period | 2,967 | 2,624 | |
Options vested and expected to vest as of end of period | 2,967 | ||
Options exercisable as of end of period | 1,954 | ||
Weighted Average Exercise Price | |||
Outstanding | $ 36.65 | ||
Granted | 82.41 | ||
Exercised | 29.68 | ||
Forfeited | 63.68 | ||
Outstanding | 46.54 | $ 36.65 | |
Options vested and expected to vest as of end of period | 46.54 | ||
Options exercisable as of end of period | $ 37.09 | ||
Weighted Average Remaining Contractual Term | |||
Outstanding as of end of period | 6 years 8 months 12 days | 7 years 1 month 6 days | |
Options vested and expected to vest as of end period | 6 years 8 months 12 days | ||
Options exercisable as of end of period | 5 years 8 months 12 days | ||
Aggregate Intrinsic Value | |||
Aggregate Intrinsic Value | $ 57,336 | $ 129,115 | |
Options vested and expected to vest as of end of period | 57,336 | ||
Options exercisable as of end of period | 48,839 | ||
Aggregate intrinsic value of stock options exercised | 13,855 | 14,180 | $ 1,503 |
Proceeds to Company from stock options exercised | $ 6,848 | $ 6,243 | $ 1,079 |
Stock-Based Awards - Summary of
Stock-Based Awards - Summary of PSUs and rTSRUs Activity (Detail) shares in Thousands | 12 Months Ended |
Sep. 30, 2019$ / sharesshares | |
PSUs [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unvested, beginning balance | shares | 70 |
Granted | shares | 21 |
Vested | shares | (36) |
Cancelled | shares | (14) |
Unvested, ending balance | shares | 41 |
Weighted Average Grant Date Fair Value Per Share, Unvested beginning balance | $ / shares | $ 50.97 |
Weighted Average Grant Date Fair Value Per Share, Granted | $ / shares | 67.13 |
Weighted Average Grant Date Fair Value Per Share, Vested | $ / shares | 35.89 |
Weighted Average Grant Date Fair Value Per Share, Cancelled | $ / shares | 49.20 |
Weighted Average Grant Date Fair Value Per Share, Unvested ending balance | $ / shares | $ 73.02 |
rTSRUs [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unvested, beginning balance | shares | 70 |
Granted | shares | 21 |
Vested | shares | (45) |
Cancelled | shares | (5) |
Unvested, ending balance | shares | 41 |
Weighted Average Grant Date Fair Value Per Share, Unvested beginning balance | $ / shares | $ 59.96 |
Weighted Average Grant Date Fair Value Per Share, Granted | $ / shares | 47.42 |
Weighted Average Grant Date Fair Value Per Share, Vested | $ / shares | 46.11 |
Weighted Average Grant Date Fair Value Per Share, Cancelled | $ / shares | 68.13 |
Weighted Average Grant Date Fair Value Per Share, Unvested ending balance | $ / shares | $ 67.76 |
Stock-Based Awards - Summary _2
Stock-Based Awards - Summary of Restricted Stock Unit Activity (Detail) - Restricted Stock Units [Member] shares in Thousands | 12 Months Ended |
Sep. 30, 2019$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unvested, beginning balance | shares | 109 |
Cancelled | shares | (14) |
Unvested, ending balance | shares | 95 |
Weighted Average Grant Date Fair Value Per Share, Unvested beginning balance | $ / shares | $ 30 |
Weighted Average Grant Date Fair Value Per Share, Cancelled | $ / shares | 30 |
Weighted Average Grant Date Fair Value Per Share, Unvested ending balance | $ / shares | $ 30 |
Stock-Based Awards - Stock-Base
Stock-Based Awards - Stock-Based Compensation Expense (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense | $ 19,226 | $ 15,845 | $ 13,071 |
Stock Options [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense | 15,854 | 12,694 | 10,442 |
PSUs [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense | 1,278 | 641 | 668 |
rTSRUs [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense | 1,568 | 1,721 | 1,267 |
Restricted Stock Units [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense | 526 | 789 | 694 |
Research and Development [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense | 8,833 | 6,160 | 4,078 |
General and Administrative [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense | $ 10,393 | $ 9,685 | $ 8,993 |
Net Income Per Share - Basic an
Net Income Per Share - Basic and Diluted Net Income Per Common Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Basic net income per share: | |||||||||||
Net income | $ 9,191 | $ 7,036 | $ 4,145 | $ 26,011 | $ 27,420 | $ 20,288 | $ 12,555 | $ 11,693 | $ 46,383 | $ 71,956 | $ 17,710 |
Weighted average common shares outstanding — basic | 19,584 | 19,255 | 19,066 | ||||||||
Net income per share common share — basic | $ 0.47 | $ 0.36 | $ 0.21 | $ 1.34 | $ 1.41 | $ 1.05 | $ 0.65 | $ 0.61 | $ 2.37 | $ 3.74 | $ 0.93 |
Diluted net income per share: | |||||||||||
Net income | $ 9,191 | $ 7,036 | $ 4,145 | $ 26,011 | $ 27,420 | $ 20,288 | $ 12,555 | $ 11,693 | $ 46,383 | $ 71,956 | $ 17,710 |
Weighted average common shares outstanding — basic | 19,584 | 19,255 | 19,066 | ||||||||
Dilutive effect of common stock equivalents | 1,384 | 1,395 | 341 | ||||||||
Weighted average common shares outstanding — diluted | 20,968 | 20,650 | 19,407 | ||||||||
Net income per share common share — diluted | $ 0.44 | $ 0.33 | $ 0.20 | $ 1.25 | $ 1.30 | $ 0.97 | $ 0.61 | $ 0.59 | $ 2.21 | $ 3.48 | $ 0.91 |
Anti-dilutive common stock equivalents excluded from above | 843 | 295 | 2,161 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2019USD ($)Lease | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | |
Commitments And Contingencies [Line Items] | |||
Number of leases | Lease | 2 | ||
Restricted cash | $ 608 | $ 608 | |
Rent expense | $ 2,492 | 2,033 | $ 2,025 |
License Agreement Terms [Member] | |||
Commitments And Contingencies [Line Items] | |||
License agreement, recorded liability paid | $ 115 | ||
First Lease [Member] | 500 Arsenal Street, Watertown, Massachusetts [Member] | |||
Commitments And Contingencies [Line Items] | |||
Office lease expiration period | Sep. 30, 2022 | ||
Tenant improvement allowance | $ 598 | ||
Outstanding letter of credit | 608 | 608 | |
Restricted cash | $ 608 | $ 608 | |
Second Lease [Member] | 400 Talcott Avenue, Watertown, Massachusetts [Member] | |||
Commitments And Contingencies [Line Items] | |||
Period of lease agreement | 2018-09 | ||
Office lease expiration period | 2024-08 |
Commitments and Contingencies_2
Commitments and Contingencies - Future Minimum Lease Payments (Detail) $ in Thousands | Sep. 30, 2019USD ($) |
Commitments And Contingencies Disclosure [Abstract] | |
2020 | $ 2,728 |
2021 | 2,803 |
2022 | 2,684 |
2023 | 608 |
2024 | 519 |
Total | 9,342 |
2020 | 93 |
2021 | 101 |
2022 | 99 |
Total | $ 293 |
Income Taxes - Summary of Incom
Income Taxes - Summary of Income Tax Benefit (Expense) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Current income tax benefit (expense): | |||||||||||
Federal | $ (1,841) | $ (16,449) | $ (10,078) | ||||||||
State | (372) | (2,858) | (813) | ||||||||
Deferred income tax benefit (expense): | |||||||||||
Federal | 2,431 | (2,245) | 1,503 | ||||||||
State | 608 | 387 | 151 | ||||||||
Total tax (expense) benefit | $ 486 | $ 866 | $ 3,204 | $ (3,730) | $ (8,461) | $ (3,690) | $ (5,370) | $ (3,644) | $ 826 | $ (21,165) | $ (9,237) |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Income Tax Provision at Federal Statutory Income Tax Rate and Effective Tax Rate (Detail) | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |||
Federal statutory income tax rate | 21.00% | 24.50% | 35.00% |
State taxes, net of federal benefit | 1.80% | 2.60% | 2.70% |
Federal research and development tax credit | (12.80%) | (5.20%) | (7.40%) |
Remeasurement of net deferred tax assets | 4.20% | ||
Share-based compensation | (6.70%) | (2.80%) | 4.50% |
Foreign-derived intangible income | (3.20%) | ||
Other | (1.90%) | (0.60%) | (0.50%) |
Effective income tax rate | (1.80%) | 22.70% | 34.30% |
Income Taxes - Net Deferred Tax
Income Taxes - Net Deferred Tax Assets and Liabilities (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Sep. 30, 2018 |
Deferred tax assets: | ||
Share-based compensation | $ 9,901 | $ 7,372 |
Other temporary differences | 915 | 828 |
Accrued compensation | 821 | 696 |
Tax credit carryforwards | 763 | |
Accrued expenses | 150 | 60 |
Capitalized research and development expenses | 223 | |
Unrealized loss | 139 | |
Total deferred tax assets | 12,550 | 9,318 |
Net deferred tax assets | 12,550 | 9,318 |
Deferred tax liabilities: | ||
Depreciation | (1,027) | (798) |
Prepaid expenses | (148) | (145) |
Unrealized gain | (34) | |
Total deferred tax liabilities | (1,209) | (943) |
Net deferred income tax assets (liabilities) | $ 11,341 | $ 8,375 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Tax Credit Carryforward [Line Items] | ||
Research and development tax credit carryforward expiration year | 2039 | |
Liability for uncertainty in income taxes, current | $ 244 | $ 113 |
Federal [Member] | ||
Tax Credit Carryforward [Line Items] | ||
Research and development tax credit carryforward | 635 | |
State [Member] | ||
Tax Credit Carryforward [Line Items] | ||
Research and development tax credit carryforward | $ 310 |
Income Taxes - Schedule of Reco
Income Taxes - Schedule of Reconciliation of Uncertain Tax Positions (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||
Beginning Balance | $ 1,679 | $ 1,175 |
Additions based on tax positions for the current period | 156 | 563 |
Reductions for tax positions due to lapse of statute of limitations | (87) | |
Reductions for tax positions of prior periods | (98) | (59) |
Ending Balance | $ 1,650 | $ 1,679 |
401(k) Plan - Additional Inform
401(k) Plan - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Compensation Related Costs [Abstract] | |||
Benefits charged to operating expenses | $ 1,068 | $ 852 | $ 712 |
Selected Quarterly Financial _3
Selected Quarterly Financial Data (unaudited) - Schedule of Quarterly Financial Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenue | $ 51,313 | $ 44,367 | $ 39,631 | $ 69,886 | $ 67,205 | $ 57,262 | $ 44,049 | $ 38,109 | $ 205,197 | $ 206,625 | $ 102,814 |
Operating expenses | 44,882 | 40,612 | 40,935 | 42,030 | 32,753 | 34,622 | 27,190 | 23,732 | 168,459 | 118,297 | 78,200 |
Other income (expense), net | 2,274 | 2,415 | 2,245 | 1,885 | 1,429 | 1,338 | 1,066 | 960 | 8,819 | 4,793 | 2,333 |
Income tax benefit (expense) | 486 | 866 | 3,204 | (3,730) | (8,461) | (3,690) | (5,370) | (3,644) | 826 | (21,165) | (9,237) |
Net income | $ 9,191 | $ 7,036 | $ 4,145 | $ 26,011 | $ 27,420 | $ 20,288 | $ 12,555 | $ 11,693 | $ 46,383 | $ 71,956 | $ 17,710 |
Net income per common share — basic | $ 0.47 | $ 0.36 | $ 0.21 | $ 1.34 | $ 1.41 | $ 1.05 | $ 0.65 | $ 0.61 | $ 2.37 | $ 3.74 | $ 0.93 |
Net income per common share — diluted | $ 0.44 | $ 0.33 | $ 0.20 | $ 1.25 | $ 1.30 | $ 0.97 | $ 0.61 | $ 0.59 | $ 2.21 | $ 3.48 | $ 0.91 |
Selected Quarterly Financial _4
Selected Quarterly Financial Data (unaudited) - Schedule of Quarterly Financial Information (Parenthetical) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Schedule Of Quarterly Financial Information [Line Items] | |||||||||||
Revenue | $ 51,313 | $ 44,367 | $ 39,631 | $ 69,886 | $ 67,205 | $ 57,262 | $ 44,049 | $ 38,109 | $ 205,197 | $ 206,625 | $ 102,814 |
Milestone [Member] | |||||||||||
Schedule Of Quarterly Financial Information [Line Items] | |||||||||||
Revenue | $ 15,000 | $ 65,000 | |||||||||
AbbVie [Member] | Japan [Member] | Milestone [Member] | |||||||||||
Schedule Of Quarterly Financial Information [Line Items] | |||||||||||
Revenue | $ 15,000 |