Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Jun. 29, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | INTERCEPT PHARMACEUTICALS, INC. | |
Entity Central Index Key | 1,270,073 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Trading Symbol | icpt | |
Entity Common Stock, Shares Outstanding | 29,693,876 | |
Document Type | 10-K | |
Amendment Flag | false | |
Document Period End Date | Dec. 31, 2018 | |
Document Fiscal Period Focus | FY | |
Document Fiscal Year Focus | 2,018 | |
Entity Well-Known Seasoned Issuer | Yes | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Public Float | $ 1,819.5 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 43,248 | $ 70,013 |
Investment debt securities, available-for-sale | 392,912 | 344,904 |
Accounts receivable, net | 25,694 | 16,501 |
Prepaid expenses and other current assets | 20,571 | 16,889 |
Total current assets | 482,425 | 448,307 |
Fixed assets, net | 10,411 | 16,184 |
Inventory, net | 7,108 | 3,480 |
Security deposits | 9,223 | 16,376 |
Total assets | 509,167 | 484,347 |
Current liabilities: | ||
Accounts payable, accrued expenses and other liabilities | 105,109 | 94,777 |
Short-term interest payable | 7,475 | 7,475 |
Short-term portion of deferred revenue | 1,621 | 1,782 |
Total current liabilities | 114,205 | 104,034 |
Long-term liabilities: | ||
Long-term debt | 371,250 | 355,677 |
Long-term other liabilities | 3,771 | 5,578 |
Long-term portion of deferred revenue | 811 | 2,672 |
Total liabilities | 490,037 | 467,961 |
Stockholders' equity: | ||
Common stock par value $0.001 per share; 45,000,000 shares authorized; 29,693,876 and 25,172,678 shares issued and outstanding as of December 31, 2018 and December 31, 2017, respectively | 30 | 25 |
Additional paid-in capital | 1,800,144 | 1,486,690 |
Accumulated other comprehensive loss, net | (2,259) | (786) |
Accumulated deficit | (1,778,785) | (1,469,543) |
Total stockholders' equity | 19,130 | 16,386 |
Total liabilities and stockholders' equity | $ 509,167 | $ 484,347 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Statement Of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized | 45,000,000 | 45,000,000 |
Common stock, issued | 29,693,876 | 25,172,678 |
Common stock, outstanding | 29,693,876 | 25,172,678 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenue | $ 179,804 | $ 130,956 | $ 24,951 |
Operating expenses: | |||
Cost of sales | 2,519 | 1,371 | |
Selling, general and administrative | 255,474 | 273,698 | 273,596 |
Research and development | 207,301 | 191,499 | 153,893 |
Total operating expenses | 465,294 | 466,568 | 427,489 |
Operating loss | (285,490) | (335,612) | (402,538) |
Other income (expense): | |||
Interest expense | (30,523) | (29,271) | (14,196) |
Other income, net | 6,771 | 4,516 | 3,904 |
Total other income (expense) | (23,752) | (24,755) | (10,292) |
Net loss | $ (309,242) | $ (360,367) | $ (412,830) |
Net loss per common and potential common share: | |||
Basic and diluted | $ (10.86) | $ (14.38) | $ (16.74) |
Weighted average common and potential common shares outstanding: | |||
Basic and diluted | 28,464 | 25,054 | 24,663 |
Product [Member] | |||
Revenue | $ 177,782 | $ 129,175 | $ 18,169 |
License [Member] | |||
Revenue | $ 2,022 | $ 1,781 | $ 6,782 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Comprehensive Loss: | |||
Net loss | $ (309,242) | $ (360,367) | $ (412,830) |
Net changes related to available-for-sale investment debt securities: | |||
Unrealized gains on investment debt securities | 88 | 791 | 378 |
Reclassification adjustment for realized losses on investment debt securities included in other income, net | (8) | (48) | |
Net unrealized gains on investment debt securities | 80 | 791 | 330 |
Foreign currency translation gains (losses) | (1,553) | 1,225 | (878) |
Comprehensive loss | $ (310,715) | $ (358,351) | $ (413,378) |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Common Stock [Member] | Additional Paid-In Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Total |
Balance at Dec. 31, 2015 | $ 24 | $ 1,300,008 | $ (695,630) | $ (2,253) | $ 602,149 |
Balance (in shares) at Dec. 31, 2015 | 24,392 | ||||
Stock-based compensation | 46,205 | 46,205 | |||
Recognition of debt discount on Convertible Notes | 113,145 | 113,145 | |||
Purchase of capped call transactions and associated costs | (38,364) | (38,364) | |||
Net proceeds from exercise of stock options | $ 1 | 5,174 | 5,175 | ||
Net proceeds from exercise of stock options (in shares) | 428 | ||||
Other comprehensive income (loss) | (548) | (548) | |||
Net loss | (412,830) | (412,830) | |||
Balance at Dec. 31, 2016 | $ 25 | 1,426,168 | (1,108,460) | (2,801) | 314,932 |
Balance (in shares) at Dec. 31, 2016 | 24,820 | ||||
Stock-based compensation | 56,968 | 56,968 | |||
Net proceeds from exercise of stock options | 2,838 | 2,838 | |||
Net proceeds from exercise of stock options (in shares) | 353 | ||||
Other comprehensive income (loss) | 716 | (716) | 2,015 | 2,015 | |
Net loss | (360,367) | (360,367) | |||
Balance at Dec. 31, 2017 | $ 25 | 1,486,690 | (1,469,543) | (786) | 16,386 |
Balance (in shares) at Dec. 31, 2017 | 25,173 | ||||
Stock-based compensation | 49,914 | 49,914 | |||
Issuance of common stock from public and private placement offerings, net of underwriting fees and issuance costs | $ 5 | 261,357 | 261,362 | ||
Issuance of common stock from public and private placement offerings, net of underwriting fees and issuance costs (in shares) | 4,258 | ||||
Net proceeds from exercise of stock options | 4,363 | $ 4,363 | |||
Net proceeds from exercise of stock options (in shares) | 263 | 188 | |||
Employee withholding taxes related to stock-based awards | (2,180) | $ (2,180) | |||
Other comprehensive income (loss) | (1,473) | (1,473) | |||
Net loss | (309,242) | (309,242) | |||
Balance at Dec. 31, 2018 | $ 30 | $ 1,800,144 | $ (1,778,785) | $ (2,259) | $ 19,130 |
Balance (in shares) at Dec. 31, 2018 | 29,694 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities: | |||
Net loss | $ (309,242) | $ (360,367) | $ (412,830) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Stock-based compensation | 49,914 | 56,968 | 46,205 |
(Accretion) amortization of (discount) premium on investment debt securities | (33) | 3,429 | 4,939 |
Amortization of deferred financing costs | 1,542 | 1,417 | 685 |
Realized loss on investments | 8 | 48 | |
Depreciation | 4,582 | 4,601 | 3,831 |
Loss on the disposal of fixed assets | 1,331 | 1,000 | |
Accretion of debt discount | 14,031 | 12,904 | 6,242 |
Changes in operating assets: | |||
Prepaid expenses and other current assets | (3,682) | (7,535) | 4,284 |
Security deposits | 7,153 | 1,438 | (13,796) |
Accounts receivable | (9,193) | (7,375) | (9,126) |
Inventory | (3,628) | (1,201) | (2,279) |
Changes in operating liabilities: | |||
Accounts payable, accrued expenses, and other current liabilities | 10,332 | 29,226 | 19,960 |
Interest payable | 208 | 7,267 | |
Long-term other liabilities | (1,807) | 5,578 | |
Deferred revenue | (2,022) | (5,693) | 2,129 |
Net cash used in operating activities | (240,714) | (265,402) | (342,441) |
Cash flows from investing activities: | |||
Purchases of investment debt securities | (436,071) | (231,107) | (511,521) |
Sales and maturities of investment debt securities | 388,168 | 529,274 | 456,465 |
Purchases of equipment, leasehold improvements, and furniture and fixtures | (167) | (10,392) | (5,079) |
Net cash (used in) provided by investing activities | (48,070) | 287,775 | (60,135) |
Cash flows from financing activities: | |||
Proceeds from issuance of common stock, net of issuance costs | 261,362 | ||
Payments for Capped Call Transactions and associated costs | (38,364) | ||
Proceeds from issuance of Convertible Notes, net of issuance costs | 447,573 | ||
Proceeds from exercise of options, net | 4,363 | 2,838 | 5,173 |
Payments of employee withholding taxes related to stock-based awards | (2,180) | ||
Net cash provided by financing activities | 263,545 | 2,838 | 414,382 |
Effect of exchange rate changes | (1,526) | 1,127 | (873) |
Net (decrease) increase in cash and cash equivalents | (26,765) | 26,338 | 10,933 |
Cash and cash equivalents - beginning of period | 70,013 | 43,675 | 32,742 |
Cash and cash equivalents - end of period | $ 43,248 | $ 70,013 | $ 43,675 |
Overview of Business
Overview of Business | 12 Months Ended |
Dec. 31, 2018 | |
Overview of Business [Abstract] | |
Overview of Business | 1. Overview of Business Intercept Pharmaceuticals, Inc. (the “Company”) is a biopharmaceutical company focused on the development and commercialization of novel therapeutics to treat progressive non-viral liver diseases, including prim ary biliary cholangitis (“PBC”) and nonalcoholic steatohepatitis (“NA SH”) . The Company currently has one marketed product, Ocaliva (obeticholic acid or “OCA”). Founded in 2002 in New York, the Company has operations in the United States, Europe and Canada. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2 . Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation The Company’s financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The consolidated financial statements in clude the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The Company has no unconsolidated subsidiaries or investments accounted for under the equity method. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management t o make estimates and judgments that affect the reported amounts of assets and liabilities, the disclosure of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Foreign Currency The Company’s functional and reporting currency is the U.S. dollar. Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction. The resulting monetary assets and liabilities are translated into U.S. dollars at exchange rates prevailing on the subsequent balance sheet date. Gains and losses as a result of translation adjustments are recorded within Other income, net in the accompanying consolidated statements of operations and within Foreign currency translation gains (losses) within the accompanying consolidated statements of comprehensive loss. Cash and Cash Equivalents The Company considers all highly liquid securities with an original or remaining maturity of three months or less at acquisition to be cash equivalents. Invest ment Debt Securities, Available-for- Sale Investment debt securities are considered to be available-for-sale and are carried at fair value. Unrealized gains and losses, if any, are reported in other comprehensive income (loss). The cost of investment debt securities classified as available-for-sale is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization and accretion is included in other income, net. Realized gains and losses, and declines in value judged to be other-than-temporary, if any, are also included in other income, net. The cost of securities sold is based on the specific identification method. The estima ted fair value of the available-for- sale debt securities is determined based on quoted market prices or rates for similar instruments. Fair Value of Financial Instruments Financial instruments, including cash and cash equivalents, receivables, accounts payable and accrued liabilities are carried at cost which management believes approximates fair value because of the short-term maturity of these instruments. Risks and Uncertainties The Company is subject to risks common to companies in the pharmaceutical industry including failing to secure additional funding and uncertainties related t o commercialization of products and regulatory approval. Concentration of Credit Risk Financial instruments, which potentially subject the Company to concentrations of credit risk, principally consist of cash, cash equivalents and investment debt securities. The Company currently invests its excess cash primarily in money market funds, U.S. Treasury notes, and high quality, marketable debt instruments of corporations, financial institutions and government sponsored enterprises. The Company has adopted an investment policy that includes guidelines relative to credit quality, diversification and maturities to preserve principal and liquidity. On a consolidated basis, for the year ended December 31, 2018, the Company’s three largest customers (as discussed in more detail below under “Revenue Recognition”) accounted for 38% , 28% and 16% , of the Company’s net product sales, respectively. On a consolidated basis, for the year ended December 31, 2017, the Company’s three largest customers (as discussed in more detail below under “Revenue Recognition”) accounted for 40% , 23% and 13% , of the Company’s net product sales, respectively. Accounts Receivable The Company extends credit to customers based on its evaluation of the customer’s financial condition. The Company records receivables for all billings when amounts are due under standard terms. Accounts receivable are stated at amounts due net of applicable prompt pay discounts and other contractual adjustments as well as an allowance for doubtful accounts. The Company assesses the need for an allowance for doubtful accounts by considering a number of factors, including the length of time trade accounts receivable are past due, the customer’s ability to pay its obligation and the condition of the general economy and the industry as a whole. The Company will write off accounts receivable when the Company determines that they are uncollectible. The Company has recorded $25.7 million and $16.5 million of accounts receivable as of December 31, 2018 and 2017, respectively, and has no t recorded an allowance for any doubtful accounts as of December 31, 2018 and 2017. On a consolidated basis, the Company’s three largest customers accounted for 22% , 29% and 6% of the December 31, 2018 accounts receivable balance, respectively. On a consolidated basis, the Company’s three largest customers accounted for 34% , 29% and 12% of the December 31, 2017 accounts receivable balance, respectively. Fixed Assets Fixed assets are stated at cost, and depreciated over the estimated useful life of the assets. Depreciation is recorded using the straight-line method over the estimated useful lives of the respective assets, generally three to seven years. Leasehold improvements are amortized over the shorter of the asset’s useful life or the life of the lease term . Expenditures for maintenance and repairs are charged to expense as incurred. Impairment of Long-Lived Assets Long-lived assets consist of fixed assets. The Company evaluates long-lived assets for impairment when events and circumstances indicate that the carrying amount of an asset or group of assets may not be fully recoverable. If indicators of impairment exist, the Company assesses the recoverability of the affected long-live d assets by d etermining whether the carrying value of such assets can be recovered through undiscounted future operating cash flows. If the carrying amount is not recoverable, the Company measures the amount of any impairment by comparing the carrying value of the asset to the present value of the expected future cash flows associated with the use of the asset. Inventory Inventories are stated at the lower of cost or estimated realizable value. The Company determines the cost of inventory using the first-in, first-o ut ( or FIFO ) method. The Company capitalizes inventory costs associated with the Company's product after regulatory approval when, based on management's judgment, future commercialization is considered probable and the future economic benefit is expected to be realized; otherwise, such costs are expensed as research and development. The Company periodically analyzes its inventory levels to identify inventory that may expire prior to expected sale or has a cost basis in excess of its estimated realizable value, and writes-down such inventories as appropriate. In addition, the Company's product is subject to strict quality control and monitoring which the Company performs throughout the manufacturing process. If certain batches or units of product no longer meet quality specifications or become obsolete due to expiration, the Company records a charge to cost of sales sold to write down such unmarketable inventory to zero. No such charges were recorded in the years ended December 31, 2018, 2017 or 2016. Convertible Senior Notes The Compa ny’s 3.25% Convertible Senior N otes due 2023 (the “Convertible Notes”) are accounted for in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Subtopic 470-20, Debt with Conversion and Other Options . ASC Subtopic 470-20 requires the issuer of convertible debt that may be settled in shares or cash upon conversion at the issuer's option, such as the Convertible N otes, to account for the liability (debt) and equity (conversion option) components separately. The value assigned to the debt component is the estimated fair value, as of the issuance date, of a similar debt instrument without the conversion option. The amount of the equity component (and resulting debt discount) is calculated by deducting the fair value of the liability component from the principal amount of the convertible debt instrument. The resulting debt discount is amortized as additional non-cash interest expense over the expected life of the notes utilizing the effective interest method. Although ASC 470 -20 has no impact on the Company’s actual past or future cash flows, it requires the Company to record non-cash interest expense as the debt discount is amortized. For additional information, see Note 8 – Long-Term Debt. Revenue Recognition Product Revenue, Net The Company commenced its commercial launch of Ocaliva for the treatment of PBC in the United States in June 2016. In December 2016, the European Commission granted conditional approval for Ocaliva for the treatment of PBC and the Company commenced its European commercial launch in January 2017. Since January 2017, Ocaliva has also received regulatory approval in several of the Company’s target markets outside the United States and E urope, including Canada, Israel and Australia. The Company sells Ocaliva to a limited number of specialty pharmacies which dispense the product directly to patients. The specialty pharmacies are referred to as the Company’s customers. The Company provides the right of return to its customers for unopened product for a limited time before and after its expiration date. Prior to July 2017, given the Company’s limited sales history for Ocaliva and the inherent uncertainties in estimating product returns, the Company determined that the shipments of Ocaliva made to its customers did not meet the criteria for revenue recognition at the time of shipment. Accordingly, the Company recognized revenue when the product was sold through by its customers, provided all other revenue recognition criteria were met. The Company invoiced its customers upon shipment of Ocaliva to them and recorded accounts receivable, with a corresponding liability for deferred revenue equal to the gross invoice price. The Company then recognized revenue when Ocaliva was sold through as specialty pharmacies dispensed product directly to the patients (sell-through basis). The Company re-evaluated its revenue recognition policy in the third quarter of 2017, which included the accumulation and review of customer-related transactions since the Company’s commercial launch in the second quarter of 2016. The Company concluded it had accumulated sufficient data to reasonably estimate product returns and, therefore, began to recognize revenue at the time of shipment to its customers (sell-in basis). During the third quarter of 2017, the Company recorded an adjustment related to this change in estimate to recognize previously deferred revenue. The net effect was an increase in net sales of Ocaliva of $4.1 million for the year ended December 31, 2017. The Company also established a new reserve of $0.7 million during 2017 related to future returns from its customers. Effective January 1, 2018, the Company bega n recognizing revenue under ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”) . The core principle of this revenue standard is that a company should recognize 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 following five steps are applied to achieve that core principle: Step 1: Identify the contract with the customer Step 2: Identify the performance obligations in the contract Step 3: Determine the transaction price Step 4: Allocate the transaction price to the performance obligations in the contract Step 5: Recognize revenue when the company satisfies a performance obligation In order to identify the performance obligations in a contract with a customer, a company must assess the promised goods or services in the contract and identify each promised good or service that is distinct. A performance obligation meets ASC 606’s definition of a “distinct” good or service (or bundle of goods or services) if both of the following criteria are met: The customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (i.e., the good or service is capable of being distinct). The entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e., the promise to transfer the good or service is distinct within the context of the contract). If a good or service is not distinct, the good or service is combined with other promised goods or services until a bundle of goods or services is identified that is distinct. The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties (for example, some sales taxes). The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The transaction price is allocated to each performance obligation on a relative standalone selling price basis. The transaction price allocated to each performance obligation is recognized when that performance obligation is satisfied, at a point in time or over time as appropriate. Under ASC 606, the Company has written contracts with each of its customers that have a single performance obligation - to deliver products upon receipt of a customer order - and these obligations are satisfied when delivery occurs and the customer receives Ocaliva. The Company evaluates the creditworthiness of each of its customers to determine whether collection is reasonably assured. The Company estimates variable revenue by calculating gross product revenues based on the wholesale acquisition cost that the Company charges its customers for Ocaliva, and then estimating its net product revenues by deducting (i) trade allowances, such as invoice discounts for prompt payment and customer fees, (ii) estimated government rebates and discounts related to Medicare, Medicaid and other government programs, and (iii) estimated costs of incentives offered to certain indirect customers including patients. Trade Allowances The Company provides invoice discounts on Ocaliva sales to certain of its customers for prompt payment and records these discounts as a reduction to gross product revenues. These discounts are based on contractual terms. Rebates and Discounts The Company contracts with the Centers for Medi care & Medicaid Services and other government agencies to make Ocaliva available to eligible patients. As a result, the Company estimates any rebates and discounts and deducts these estimated amounts from its gross product revenues at the time the revenues are recognized. The Company’s estimates of rebates and discounts are based on the government mandated discounts, which are statutorily-defined and applicable to these government funded programs. These estimates are recorded in acc ounts payable, accrued expenses and other liabilities on the consolidated balance sheet. Other Incentives Other incentives that the Company offers to indirect customers include co-pay assistance cards provided by the Company for PBC patients who reside in states that permit co-pay assistance programs. The Company’s co-pay assistance program is intended to reduce each participating patient’s portion of the financial responsibility for Ocaliva purchase price to a specified dollar amount. The Company estimates the amount of co-pay assistance provided to eligible patients based on the terms of the program when product is dispensed by the specialty pharmacies to the patients. These estimates are based on redemption information provided by third-party claims processing organizations and are recorded in accounts payable, accrued expenses and other liabilities on the consolidated balance sheet. Because the Company changed its revenue recognition polices to the sell-in basis during the year ended December 31, 2017, the adoption of ASU 2014-09 (as defined below), via a modified retrospective approach applied to all contracts not completed at January 1, 2018, did not result in an adjustment to amounts previously recognized as revenue under ASC Topic 605, Revenue Recognition (“ASC 605”), and there were no other significant changes impacting the timing or measurement of the Company’s revenue or the Company’s business processes and controls. Licensing Revenue Under ASC 606, the Company accounts for the development, regulatory and sales milestones within an arrangement as variable consideration that is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Because the achievement of the milestones triggering these payments is highly susceptible to factors outside the entity’s influence, and the uncertainty about the amount of consideration for some of the milestones is not expected to be resolved for a long period of time, the Company does not expect to record the associated revenue until achievement of each milestone is imminent or has already occurred. Adoption of ASC 606 did not result in any adjustment to licensing revenue previously recognized under ASC 605. Research and Development Expenses Research and development costs that do not have alternative future use are charged to expense as incurred. This includes the cost of conducting clinical trials, compensation and related overhead for employees and consultants involved in research and development and the cost of the Company’s manufacturing activities to supply ongoing and future clinical trials and preclinical studies as well as preparations f or commercialization of OCA . The cost of a compound that is acquired prior to regulatory approval, does not constitute a busines s and has no alternative future use is charged to expense as incurred. For periods prior to the commercial launch of Ocaliva for PBC in June 2016, all manufacturing costs f or OCA were expensed as research and development expenses . The Company will continue to incur manufacturin g costs for OCA for other indications such as NASH prior to their approval. Stock-based Compensation The Company accounts for stock-based compensation in accordance with ASC Topic 718, Compensation—Stock Compensation (“ASC 718”). The Company estimates the fair value of stock option awards using the Black-Scholes option pricing model on the date of the grant. Restricted stock unit awards (“RSUs”) and restricted stock awards (“RSAs”) without a market condition are valued based on the closing price of the Company’s common stock on the date of the grant. The fair value of time-based equity awards is recognized and amortized on a straight-line basis over the requisite service period of the award. Stock options granted to employees generally fully vest over four years and have a term of ten years. The Company recognizes stock-based compensation expense for options and other stock-based awards with performance conditions ratably over the performance period once the pre-defined performance-based criteria for vesting becomes probable. The fair value of awards with market conditions is estimated using the Monte Carlo simulation method and expense is recognized on a straight-line basis over the requisite service period of the award. The Company recognizes stock-based compensation for non-employees (other than non-employee directors) on a mark-to-market basis, which is updated on a quarterly basis. Net Income (Loss) Per Share Basic net income (loss) per share is computed by dividing net income (loss) attributable to common stockholders (numerator) by the weighted average number of common shares outstanding (denominator) during the period. Diluted net income (loss) per share gives effect to all dilutive potential common shares outstanding during the period , including the Convertible Notes, stock optio ns and RSUs, as applicable, using the treasury stock method. Income Taxes The Company utilizes the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement carrying amounts and tax bases of assets and liabilities using enacted tax rates in effect for years in which the temporary differences are expected to reverse. The Company establishes a valuation allowance when it believes it is more likely than not that deferred tax assets will not be realized. The Company determines the need for a valuation allowance by assessing the probability of realizing deferred tax assets, taking into consideration all available positive and negative evidence, including historical operating results, expectations of future taxable income, carryforward periods available, various income tax strategies and other relevant factors. Significant judgment is required in making this assessment and to the extent future expectations change, the Company would have to assess the recoverability of its deferred assets at that time. At December 31, 2018 and 2017, the Company maintained a full valuation allowance on its deferred tax assets. At any one time the Company’s tax returns for numerous tax years are subject to examination by U.S. Federal, state, and foreign taxing jurisdictions. The impact of an uncertain tax position taken or expected to be taken on an income tax return must be recognized in the financial statements at the largest amount that is more likely than not to be sustained. An uncertain income tax position will not be recognized in the financial statements unless it is more likely than not to be sustained. At December 31, 2018 and 2017, the Company had no reserves for unrecognized tax benefits. Segments The Company operates in one segment. The Company is a biopharmaceutical company focused on the development and c ommercialization of novel therapeutics to treat progressive non-viral liver diseases. Recent Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”), and subsequently issued modifications or clarifications in ASU No. 2015-14, “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date,” ASU No. 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net),” ASU No. 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing” and ASU No. 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients.” The revenue recognition principle in ASU 2014-09 and the related guidance is that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 prescribes a five-step process for evaluating contracts and determining revenue recognition. In addition, new and enhanced disclosures are required. Companies may adopt the new standard using either the full retrospective approach, a modified retrospective approach with practical expedients, or a cumulative effect upon adoption approach. The Company adopted the new standard on January 1, 2018, using the modified retrospective approach, applied only to contracts that were not completed as of January 1, 2018. The ad option did not have an impact on the Company’s consolidated financial statements and related disclosures. In January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities” (“ASU 2016-01”). ASU 2016-01 requires equity investments to be measured at fair value with changes in fair value recognized in net income; simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment; eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet; requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments; requires separate presentation of financial assets and financial liabilities by measurement category and form of financial assets on the balance sheet or the accompanying notes to the financial statements and clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. ASU 2016-01 is effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company adopted ASU 2016-01 on January 1, 2018 and its adoption did not have a material impact on the Company’s consolidated financial statements and related disclosures. In February 2016, the FASB established ASC Topic 842, Leases (“ASC 842”), by issui ng ASU No. 2016-02, which requires lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. ASC 842 was subsequently amended by ASU No. 2018-01, “ Land Easement Practical Expedient for Transition to Topic 842 ” ; ASU No. 2018-10, “ Codification Improvements to Topic 842, Leases ” ; and ASU No. 2018-11, “ Targeted Improvements ” . The new standard establishes a right-of-use model ( “ ROU ” ) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. A modified retrospective transition approach is required, applying the new standard to all leases existing at the date of initial application. An entity may choose to use either (1) its effective date or (2) the beginning of the earliest comparative period presented in the financial statements as its date of initial applic ation. The Company adopted the new standard on January 1, 2019 using the effective date as the date of initial application. Consequently, financial information will not be updated and the disclosures required under the new standard will not be provided for dates and p eriods before January 1, 2019. The new standard provides a number of optional practic al expedients in transition. The Company elected the “ package of practic al expedients”, which permits the Company to not rea ssess under the new standard the Company’s prior conclusions about lease identification, lease classification and initial direct costs. The new standard also provides practical expedients for an entity’s ongoing accounting. The Company elected the short-term lease recognition exemption for all leases that qualify. This means, fo r those leases that qualify, the Company will not recognize ROU assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition. The Company also elected the practical expedient to not separate lease and non -lease components for all of the Company’s leases. Upon adoption, the Company will recognize additional operating liabi lities of $25.4 million, with corresponding ROU assets of $19.6 million based on the present value of the remaining minimum rental payments under c urrent leasing standards for existing operating leases. In May 2017, the FASB issued ASU No. 2017-09, “Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting” (“ASU 2017-09”), which clarifies when to account for a change to the terms or conditions of a stock-based payment award as a modification. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award (as equity or liability) changes as a result of the change in terms or conditions. It is effective prospectively for the annual period ending December 31, 2018 and interim periods within that annual period. Early adoption is permitted. The Company adopted ASU 2017-09 on January 1, 2018 and its adoption did not have a material impact on the Company’s consolidated financial statements and related disclosures. In July 2017, the FASB issued ASU No. 2017-11, “Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features; II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception” (“ASU 2017-11”). Part I of this update addresses the complexity of accounting for certain financial instruments with down round features. Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity offerings. Current accounting guidance creates cost and complexity for entities that issue financial instruments (such as warrants and convertible instruments) with down round features that require fair value measurement of the entire instrument or conversion option. Part II of this update addresses the difficulty of navigating ASC Topic 480, Distinguishing Liabilities from Equity , because of the existence of extensive pending content in the FASB Accounting Standards Codification. This pending content is the result of the indefinite deferral of accounting requirements about mandatorily redeemable financial instruments of certain nonpublic entities and certain mandatorily redeemable noncontrolling interests. The amendments in Part II of this update do not have an accounting effect. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. The Company adopted ASU 2017-11 on January 1, 2019 and its adoption did not have any impact on the Company’s consolidated financial statements and related disclosures. In June 2018, the FASB issued ASU No. 2018-07, “Improvements to Nonemployee Share-Based Payment Accounting” (“ASU 2018-07”) , which simplifies the accounting for share-based payments granted to nonemployees for goods and services. Under this ASU, most of the guidance on such payments to nonemployees would be aligned with the requirements for share-based payments granted to employees. The changes take effect for public companies for fiscal years starting after December 15, 2018, including interim periods within that fiscal year. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fisca |
Significant Agreements
Significant Agreements | 12 Months Ended |
Dec. 31, 2018 | |
Significant Agreements [Abstract] | |
Significant Agreements | 3. Significant Agreements Sumitomo Dainippon Pharma Co., Ltd. In March 2011, the Company entered into an exclusive license agreement (the “Original Sumitomo Agreement”) with Sumitomo Dainippon Pharma Co., Ltd. (“Sumitomo Dainippon”), pursuant to which the Company granted to Sumitomo Dainippon an exclusive license to research, develop and commercialize OCA for the treatment of PBC and NASH in Japan and China (excluding Taiwan) and an option to research, develop and commercialize OCA in certain countries outside of such territories (the “Country Option”). The Company received an upfront payment from Sumitomo Dainippon of $15.0 million under the terms of the Original Sumitomo Agreement. In May 2014, Sumitomo Dainippon exercised the Country Option in part to add Korea as part of its licensed territories and paid the Company a $1.0 million upfront fee in connection therewith. In February 2018, the Company and Sumitomo Dainippon entered into Amendment No. 3 (the “Sumitomo Amendment”) to the Original Sumitomo Agreement (as amended, the “Sumitomo Agreement”). Pursuant to the Sumitomo Amendment, (i) Sumitomo Dainippon agreed to return the rights to develop and commercialize OCA in Japan and Korea and waived its rights to the Country Option, (ii) the Company agreed to forego any further milestone or royalty payments relating to the development and commercialization of OCA in Japan and Korea and (iii) certain milestone payment obligations with respect to the development and commercialization of OCA were adjusted. In addition, the Company and Sumitomo Dainippon agreed that if certain clinical development milestones in China are not met by December 31, 2020, Sumitomo Dainippon may choose either to make a milestone payment to the Company or terminate the Sumitomo Agreement. Sumitomo Dainippon may also terminate the Sumitomo Agreement in its entirety or on an indication-by-indication basis at any time upon 90 days’ written notice. As of December 31, 2018, the Company had achieved $6.0 million of development milestones under the Sumitomo Agreement. The Company may be eligible to receive additional milestone payments under the Sumitomo Agreement in an aggregate amount of up to approximately $23.0 million based on the occurrence of certain clinical trial and regulatory-related events and tiered royalty payments up to the mid-twenties in percentage terms based on net sales of OCA products in China (excluding Taiwan). Sumitomo Dainippon is responsible for the costs of developing and commercializing OCA i n its territory. The Company has concluded that Sumitomo Dainippon does not represent a customer of the Company, and therefore the Sumitomo Agreement is outside of the scope of ASC 606. The Company has accounted, and continues to account, for this agreement under the legacy accounting guidance. Under ASC 605, the Company evaluated this agreement and determined that it is a revenue arrangement with multiple deliverables, or performance obligations. The Company’s substantive performance obligations under this agreement include an exclusive license to its technology, technical and scientific support to the development plan and participation on a joint steering committee. The Company determined that these performance obligations represent a single unit of accounting, since, initially, the license does not have stand-alone value to Sumitomo Dainippon without the Company’s technical expertise and steering committee participation during the development of OCA. The development period is currently estimated as continuing through June 2020 and, as such, the $15.0 million upfront payment is being recognized ratably over this period. During the years ended December 31, 2018, 2017 and 2016, the Company recorded licensing revenue of approximately $2. 0 million, $1.8 million and $6.8 million, respectively, under this agreement. Included in licensing revenue for the year ended December 31, 2018 is $0.4 million related to the accelerated recognition, as a result of the Sumitomo Amendment, of the remaining portion of deferred revenue associated with the $1.0 million upfront payment that the Company received under the Original Sumitomo Agreement in connection with Sumitomo Dainippon’s exercise of the Country Option with respect to Korea. The Company recognizes milestone payments when the associated milestones are achieved. As of December 31, 2018 and 2017, the C ompany had recorded deferred rev enues of $2.4 million and $4.5 million, resp ectively, under this agreement. |
Cash, Cash Equivalents, and Inv
Cash, Cash Equivalents, and Investments | 12 Months Ended |
Dec. 31, 2018 | |
Cash, Cash Equivalents, and Investments [Abstract] | |
Cash, Cash Equivalents, and Investments | 4. Cash, Cash Equivalents and Investments The following table summarizes the Company’s cash, cash equivalents and investments as of December 31, 2018 and December 31, 201 7: As of December 31, 2018 Gross Gross Amortized Cost Unrealized Unrealized Fair Value Gains Losses (in thousands) Cash and cash equivalents: Cash and money market funds $ 43,248 $ - $ - $ 43,248 Investment debt securities: Commercial paper 34,353 - (26) 34,327 Corporate debt securities 349,854 27 (704) 349,177 U.S. government and agency securities 9,410 5 (7) 9,408 Total investments 393,617 32 (737) 392,912 Total cash, cash equivalents and investments $ 436,865 $ 32 $ (737) $ 436,160 As of December 31, 2017 Gross Gross Amortized Cost Unrealized Unrealized Fair Value Gains Losses (in thousands) Cash and cash equivalents: Cash and money market funds $ 70,013 $ - $ - $ 70,013 Investment debt securities: Commercial paper 2,986 - (3) 2,983 Corporate debt securities 333,958 - (752) 333,206 U.S. government and agency securities 8,743 - (28) 8,715 Total investments 345,687 - (783) 344,904 Total cash, cash equivalents and investments $ 415,700 $ - $ (783) $ 414,917 As of December 31, 201 8 , the Company held a total of twenty -four positions that were in a continuous unreali zed loss position for twelve months or longer . The Company has determined that the unrealized losses are deemed to be temporary impairments as of December 31, 201 8 . The Company believes that the unrealized losses generally are caused by increases in the risk premiums required by market participants rather than an adverse change in cash flows or a fundamental weakness in the credit quality of the issuer or underlying assets. Because the Company has the ability and intent to hold these investments until a recovery of fair value, which may be maturity, it does not consider the investments to be other-than-temporarily impaired at December 31, 201 8 . The fair value for the Company’s avail able-for-sale investment debt securities that have been in an unrealized loss position for less than twelve months or twelve months or longer is as follows: As of December 31, 2018 Less than 12 months 12 months or longer Total (in thousands) Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Commercial paper $ 34,327 $ (26) $ - $ - $ 34,327 $ (26) Corporate debt securities 260,547 (443) 56,626 (261) 317,173 (704) U.S. government and agency securities - - 1,991 (7) 1,991 (7) Total $ 294,874 $ (469) $ 58,617 $ (268) $ 353,491 $ (737) As of December 31, 2017 Less than 12 months 12 months or longer Total (in thousands) Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Commercial paper $ 2,983 $ (3) $ - $ - $ 2,983 $ (3) Corporate debt securities 272,453 (506) 60,753 (246) 333,206 (752) U.S. government and agency securities 6,723 (25) 1,992 (3) 8,715 (28) Total $ 282,159 $ (534) $ 62,745 $ (249) $ 344,904 $ (783) |
Fixed Assets, Net
Fixed Assets, Net | 12 Months Ended |
Dec. 31, 2018 | |
Fixed Assets, Net [Abstract] | |
Fixed Assets, Net | 5 . Fixed Assets, Net Fixed assets are stated at cost and depreciated or amortized using the straight-line method based on useful lives as follows: Useful lives December 31, (Years) 2018 2017 (in thousands) Office equipment and software 3 $ 3,986 $ 5,048 Leasehold improvements Over life of lease 14,464 14,665 Furniture and fixtures 7 3,907 5,257 Subtotal 22,357 24,970 Less: accumulated depreciation (11,946) (8,786) Fixed assets, net $ 10,411 $ 16,184 Depreciation expense for the years ended December 31, 201 8 , 201 7 and 201 6 was approximately $4.6 million, $ 4.6 million and $ 3.8 million , respectively. |
Inventory
Inventory | 12 Months Ended |
Dec. 31, 2018 | |
Inventory, Net [Abstract] | |
Inventory | 6. Inventory Inventories are stated at the lower of cost or market. Inventories consist ed of the following: December 31, 2018 2017 (in thousands) Work-in-process $ 7,019 $ 3,249 Finished goods 89 231 Inventory, net $ 7,108 $ 3,480 |
Accounts Payable, Accrued Expen
Accounts Payable, Accrued Expenses and Other Liabilities | 12 Months Ended |
Dec. 31, 2018 | |
Accounts Payable, Accrued Expenses and Other Liabilities [Abstract] | |
Accounts Payable, Accrued Expenses and Other Liabilities | 7 . Accounts Payable, Accrued Expenses and Other Liabilities Accounts payable, accrued expenses and other liabilities consisted of the following: December 31, 2018 2017 (in thousands) Accounts payable $ 11,765 $ 6,965 Accrued employee compensation 20,335 27,118 Accrued contracted services 54,681 51,154 Other liabilities 18,328 9,540 Accounts payable, accrued expenses and other liabilities $ 105,109 $ 94,777 |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2018 | |
Long-Term Debt [Abstract] | |
Long-Term Debt | 8 . Long-Term Debt Debt, net of discounts and deferred financing costs, consist ed of the following: December 31, 2018 2017 (in thousands) Long-term debt $ 371,250 $ 355,677 Less current portion - - Long-term debt outstanding $ 371,250 $ 355,677 On July 6, 2016, the Company issued and sold $460.0 million aggregate principal amount of the Convertible Notes. The Company received net proceeds from the sale of the Convertible Notes of $447.6 million , after deducting underwriting discounts and estimated offering expenses of approximately $12.4 million. The Company used approximately $38.4 million of such net proceeds to fund the cost of the Capped Call T ransactions (as defined below) that were entered into in connection with the issuance of the Convertible Notes. The Convertible Notes were issued pursuant to an indenture, as supplemented by a first supplemental indenture, each dated as of July 6, 2016 (collectively, the “Indenture”), by and between the Company and U.S. Bank National Association, as trustee. The Convertible Notes are senior unsecured obligations of the Company, bear interest at a fixed rate of 3.25% per year (payable semi-annually on January 1 and July 1 of each year, beginning on January 1, 2017) and will mature on July 1, 2023, unless earlier repurchased, redeemed or converted. Holders may convert their Convertible Notes at their option at any time prior to the close of business on the business day immediately preceding January 1, 2023 only under the following circumstances: (i) during any calendar quarter commencing after September 30, 2016, if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (ii) during the five business day period after any five consecutive trading day period in which the trading price (as defined in the Indenture) per $1,000 principal amount of Convertible Notes for each trading day of such five consecutive trading day period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day; (iii) if the Company calls any or all of the Convertible Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; or (iv) upon the occurrence of specified corporate events. On or after January 1, 2023 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their Convertible Notes at any time, regardless of the foregoing circumstances. Upon conversion of the Convertible Notes, the Company will pay or deliver, as the case may be, cash, shares of the Company’s common stock (and cash in lieu of any fractional shares) or a combination of cash and shares of the Company’s common stock, at the Company’s election. The initial conversion rate of the Convertible Notes is 5.0358 shares of the Company’s common stock per $1,000 principal amount of Convertible Notes, which is equivalent to an initial conversion price of approximately $198.58 per share of the Company’s common stock. The conversion rate is subject to adjustment upon the occurrence of certain events but will not be adjusted for any accrued and unpaid interest. If the Company undergoes a fundamental change (as defined in the Indenture), holders may require the Company to re purchase for cash all or any portion of their Convertible Notes at a fundamental change re purchase price equal to 100% of the principal amount of the Convertible Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change re purchase date. In addition, if certain make-whole fundamental changes occur, the Company will, in certain circumstances, increase the conversion rate for any Convertible Notes converted in connection with such make-whole fundamental change. The Company may not redeem the Convertible Notes prior to July 6, 2021. The Company may redeem for cash all or part of the Convertible Notes, at its option, on or after July 6, 2021, if the last reported sale price of the Company’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption at a redemption price equal to 100% of the principal amount of the Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. The Indenture provides for customary events of default. On June 30, 2016, in connection with the pricing of the Convertible Notes, the Company entered into privately-negotiated capped call transactions (the “Base Capped Call Transactions”) with each of Royal Bank of Canada, UBS AG, London Branch, and Credit Suisse Capital LLC (the “Option Counterparties”). On July 1, 2016, in connection with the underwriters’ exercise of their over-allotment option in full, the Company entered into additional capped call transactions (the “Additional Capped Call Transactions” and, together with the Base Capped Call Transactions, the “Capped Call Transactions”) with the Option Counterparties. The Capped Call Transactions are expected generally to reduce the potential dilution with respect to the Company’s common stock and/or offset the cash payments the Company would be required to make in excess of the principal amount of converted Convertible Notes, as the case may be, upon conversion of the Convertible Notes in the event that the market price per share of the Company’s common stock, as measured under the terms of the Capped Call Transactions , is greater than the strike price of the Capped Call Transactions , which initially corresponds to the conversion price of the Convertible Notes and is subject to anti -dilution adjustments substantially similar to those applicable to the conversion rate of the Convertible Notes. The cap price of the Capped Call Transactions is initially $262.2725 per share, and is subject to certain adjustments under the terms of the Capped Call Transactions . If, however, the market price per share of the Company’s common stock, as m easured under the terms of the Capped Call T ransactions, exceeds the cap price of the Capped Call Transactions , there would nevertheless be dilution and/or there would not be an offset of such potential cash payments, in each case, upon conversion of the Convertible Notes to the extent that such market price exceeds the cap price of the Capped Call Transactions . In accordance with ASC Subtopic 470-20, the Company used an effective interest rate of 8.4% to determine the liability component of the Convertible Notes. This resulted in the recognition of $334.4 million as the liability component of the Convertible Notes and the recognition of the residual $113.1 million as the debt discount with a corresponding increase to additional paid-in capital for the equity component of the Convertible Notes. Interest expense was $30.5 million, $29.3 million and $14.2 million for the year s ended December 31, 2018, 2017 and 2016, respectively, related to the Convertible Notes. Accrued interest on the Convertible Notes was approximately $7.5 million and $14.9 million as of December 31, 201 8 and 201 7, respectively . The Company recorded debt issuance costs of $12.4 million, which are being amortized using the effective interest method. As of December 31, 201 8 and 2017, $8.8 million and $10.3 million, respectively, of debt issuance costs are recorded on the cons olidated balance sheet in Long-term d ebt, in accordance with ASU No. 2015-03 , “Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs.” As of December 31, 201 8 and 201 7 , $460.0 million aggregate principal amount of the Convertible Notes was outstanding. |
Product Revenues, Net
Product Revenues, Net | 12 Months Ended |
Dec. 31, 2018 | |
Product Revenues, Net [Abstract] | |
Product Revenues, Net | 9. Product Revenue, Net The Company recognized net sales of Ocaliva of $177.8 million , $1 29.2 million and $18.2 million for the years ended December 3 1 , 201 8, 201 7 and 2016, respectively. The table below summarizes consolidated product revenue, net by region: Years Ended December 31, 2018 2017 2016 (in thousands) Product revenue, net: U.S. $ 140,822 $ 115,807 $ 18,169 ex-U.S. 36,960 13,368 - Total product revenue, net $ 177,782 $ 129,175 $ 18,169 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Measurements [Abstract] | |
Fair Value Measurements | 1 0 . Fair Value Measurements The carrying amounts of the Company’s receivables and payables approximate their fair value due to their short maturities. Accounting principles provide guidance for using fair value to measure assets and liabilities . The guidance includes a three- level hierarchy of valuation techniques used to measure fair value, defined as follows: · Unadjusted Quoted Prices — The fair value of an asset or liability is based on unadjusted quoted prices in active markets for identical assets or liabilities (Level 1). · Pricing Models with Significant Observable Inputs — The fair value of an asset or liability is based on information derived from either an active market quoted price, which may require further adjustment based on the attributes of the financial asset or liability being measured, or an inactive market transaction (Level 2). · Pricing Models with Significant Unobservable Inputs — The fair value of an asset or liability is primarily based on internally derived assumptions surrounding the timing and amount of expected cash flows for the financial instrument. Therefore, these assumptions are unobservable in either an active or inactive market (Level 3). The Company considers an active market as one in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. Conversely, the Company views an inactive market as one in which there are few transactions for the asset or liability, the prices are not current, or price quotations vary substantially either over time or among market makers. Where appropriate, non-performance risk, or that of a counterparty, is considered in determining the fair values of liabilities and assets, respectively. The Company’s cash deposits and money market funds are classified within Level 1 of the fair value hierarchy because they are valued using bank balances or quoted market prices. Investments are classified as Level 2 instruments based on market pricing and other observable inputs. Financial assets carried at fair value are classified in the tables below in one of the th ree categories described above: Fair Value Measurements Using Total Level 1 Level 2 Level 3 (in thousands) December 31, 2018 Assets: Money market funds (included in cash and cash equivalents) $ 11,647 $ 11,647 $ - $ - Available-for-sale debt securities: Commercial paper 34,327 - 34,327 - Corporate debt securities 349,177 - 349,177 - U.S. government and agency securities 9,408 - 9,408 - Total financial assets: $ 404,559 $ 11,647 $ 392,912 $ - December 31, 2017 Assets: Money market funds (included in cash and cash equivalents) $ 13,361 $ 13,361 $ - $ - Available-for-sale debt securities: Commercial paper 2,983 - 2,983 - Corporate debt securities 333,206 - 333,206 - U.S. government and agency securities 8,715 - 8,715 - Total financial assets: $ 358,265 $ 13,361 $ 344,904 $ - The gross realized gains and losses on sales of available-for-sale investment debt securities were immaterial for the fiscal years ended December 31, 2018, 2017, and 2016. The estimated fair value of marketable debt securities (commercial paper, corporate debt securities and U.S. government and agency securities) as of December 31, 2018 and 2017, respectively, by contractual maturity, are as follows: Fair Value as of December 31, 2018 2017 (in thousands) Due in one year or less $ 319,717 $ 282,159 Due after one year through two years 73,195 62,745 Total investments in debt securities $ 392,912 $ 344,904 Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations without call or prepayment penalties. |
Stockholders' Equity and Prefer
Stockholders' Equity and Preferred Stock | 12 Months Ended |
Dec. 31, 2018 | |
Stockholders' Equity and Preferred Stock [Abstract] | |
Stockholders' Equity and Preferred Stock | 1 1 . Stockholders’ Equity and Preferred Stock Common Stock On April 9, 2018, the Company issued and sold (i) 2,695,313 shares of common stock in a registered public offering (including 351,563 shares issued and sold upon the exercise in full of the underwriters’ option to purchase additional shares), at a price to the public of $64.00 per share (the “Public Offering”) and (ii) 1,562,500 shares of common stock (the “Private Placement Shares”) in a concurrent private placement (the “Concurrent Private Placement”) exempt from the registration requirements of the Securities Act of 1933, as amended, at a purchase price per share equivalent to the price to the public set in the Public Offering and pursuant to a securities purchase agreement (the “Securities Purchase Agreement”) that the Company entered into with the purchasers in the Concurrent Private Placement (the “Private Placement Purchasers”). Pursuant to the Securities Purchase Agreement, the Company granted to the Private Placement Purchasers certain registration rights requiring the Company, upon request of the Private Placement Purchasers (and/or certain affiliate transferees thereof) on or after June 5, 2018 and subject to certain terms and conditions, to register the resale by such Private Placement Purchasers (and/or such affiliates) of the Private Placement Shares held by them. As of the date of this Annual Report on Form 10- K , no Private Placement Purchaser has exercised any such registration rights. The net proceeds to the Company from the Public Offering and the Concurrent Private Placement were approximately $261.4 million, after deducting underwriting discounts, commissions and estimated offering expenses of approximately $11.1 million. As of December 31, 201 8 and 201 7 , the Company had 45,000,000 authorized shares of common stock, par value $0.001 per share . Dividends Subject to preferences that may be applicable to any outstanding shares of preferred stock, holders of common stock are entitled to receive ratably such dividends, if any, as may be declared from time to time by the Company’s board of directors out of funds legally available for dividend payments. The Company has never declared or paid any cash dividends on its common stock, and does not anticipate paying any cash dividends on its common stock in the foreseeable future. The Company intends to retain all available funds and any future earnings to fund the development and expansion of its business. Any future determination to pay dividends will be at the discretion of the board of directors and will depend upon a number of factors, including the results of operations, financial condition, future prospects, contractual restrictions, restrictions imposed by applicable law and other factors the board of directors deems relevant. Voting Holders of common stock are entitled to one vote for each share held with respect to all matters submitted to a vote of the stockholders and do not have cumulative voting rights. Preferred S to ck As of December 31, 2018 and 2017, the Company had 5,000,000 authorized shares of preferred stock, par value $0.001 per share, of which no ne are issued. |
Stock Compensation
Stock Compensation | 12 Months Ended |
Dec. 31, 2018 | |
Stock Compensation [Abstract] | |
Stock Compensation | 1 2 . Stock Compensation The Company’s 2012 Equity Incentive Plan ( “ 2012 Plan ” ) became effect ive upon the pricing of its initial public offering in October 2012 (the “IPO”) . At the same time, the Company’s 2003 Stock Incentive Plan ( “ 2003 Plan ” ) was terminated and 555,843 shares available under the 2003 Plan were added to the 2012 Plan. The estimated fair value of the options that have been granted under the 2003 Plan and the 2012 Plan was determined utilizing the Black-Scholes option-pricing model at the date of grant. The fair value of the RSUs and RSAs that have been granted under the 2012 Plan was determined utilizing the cl osing price of the Company’s common stock on the date of grant. There were approximat ely 2.2 million and 1.9 million shares available for grant remaining under the 2012 Plan at December 31, 201 8 and 201 7 , respectively. On January 1, 2018 and 2017 , the number of shares available for i ssuance under the 2012 Plan increased by 1,010,693 and 993,558 shares, respectively, as a result of the automatic increase provisions thereof. Stock Options and Performance-Based Stock Options The Company estimated the fair value of stock options granted in the periods presented using a Black-Scholes option-pricing model utilizing the following assumptions: Years Ended December 31, 2018 2017 2016 Volatility 62 - 73% 61 - 65% 60 - 66% Expected term (in years) 6.0 6.0 - 9.9 5.1 - 10.0 Risk-free rate 1.8 - 3.0% 1.8 - 2.4% 1.1 - 2.4% Expected dividend yield — % — % — % The stock price for options granted prior to the IPO was determined based on a valuation of the Company’s common stock. For options granted after the IPO, the stock price is the cl osing price of the Company’s common stock on the date of grant . The risk-free interest rate was based on the rate for U.S. Treasury securities at the date of grant with maturity dates approximately equal to the expected term of the award at the grant date. The expected term of options granted represents the period of time the options are expected to be outstanding and is based on the simplified method . The expected volatility was estimated based on historical volatility information of publicly-traded peer companies . The Company’s combined outstanding employee and non-employee option activity for the period from December 31, 2017 through December 31, 2018 is summarized as follows: Weighted Average Number Weighted Remaining Aggregate of Options Average Contractual Intrinsic Value (in thousands) Exercise Price Term (years) (in thousands) Outstanding at December 31, 2017 1,808 $ 114.70 7.4 $ 14,648 Granted 712 $ 64.98 - $ - Exercised (188) $ 25.52 - $ - Cancelled/forfeited (227) $ 107.07 - $ - Expired (231) $ 177.76 - $ - Outstanding at December 31, 2018 1,874 $ 97.64 7.5 $ 45,381 Expected to vest 1,000 $ 83.20 8.7 $ 25,703 Exercisable 874 $ 114.17 6.2 $ 19,678 The aggregate intrinsic value of options is calculated as the difference between the exercise price of the underlying options and the deemed fair value of the Company ’s common stock for those options that had exercise prices lower than the deemed fair value of the Company’s common stock. The weighted-average grant date fair value of options granted in the year s ended December 31, 2018, 2017 and 2016 was $41.18 , $63.65 and $64.80 per option , respectively . The aggregate intrinsic value of stock options exercised during the year s ended December 31, 2018, 2017 and 2016 was $14.1 million, $9.4 million and $22.0 million, respectively. As of December 31, 2018, the total compensation cost related to non-vested option awards not yet recognized is approximately $38.4 million with a weighted average remaining vesting period of 1.20 years. The Company has in the past, and may in the future, grant performance-based stock option awards with vesting terms based on the achievement of specified goals. To the extent such awards do not contain a market condition, the Company recognizes no expense until achievement of the performance requirement is deemed probable . In April 2014, the Company issued 57,063 performance-based options to certain emp loyees that will vest upon the achievement of certain regulatory milestones related to OCA at future dates. In November 2014, the Company issued an additional 10,839 performance-based options that will vest upon the achievement of the same r egulatory milestones . As of both December 31, 2018 and 20 17, the achievement of such milestones was not deemed to be probable and no stock-based compensation expense was recognized for these performance-based options. Restricted Stock Units and Awards & Performance-Based Restricted Stock Units and Awards The following table summarizes the aggr egate RSU, RSA, performance restricted stock unit award (“PRSU”) and performance restricted share award (“ PRSA ”) activity for the year ended December 31, 2018 : Number of Awards (in thousands) Weighted Average Grant Date Fair Value Non-vested awards at December 31, 2017 493 $ 113.60 Granted 612 $ 65.28 Vested (192) $ 124.69 Forfeited (140) $ 91.26 Non-vested awards at December 31, 2018 773 $ 76.10 For the years ended December 31, 2018, 2017 and 2016, the weighted-average grant date fair value of RSUs, RSAs, PRSUs and PRSAs granted was $65.28 , $102.35 and $117.63 , respectively . The total fair value of RSUs, RSAs, PRSUs and PRSAs that vested during the years ended December 31, 2018, 2017 and 2016 was $24.0 million, $16.7 million and $12.8 million, respectively. As of December 31, 201 8 , there was $44.5 million of unrecognized compensation expen se related to unvested RSUs, RSAs, PRSUs, and PRSAs, which is expected to be recognized over a weighted average period of 1.27 years . During the year ended December 31, 2018, the Company granted a total of 51,200 P R SUs and 4,300 P R SAs to certain of the Company’s executive officers. T he performance criterion for such P R SUs and P R SAs is based on the Total Shareholder Return (“TSR”) of the Company’s common stock relative to the TSR of the companies comprising the S& P Biotechnology Select Industry Index (the “TSR Peer Group”) over a 3 -year performance period and is accounted for as a market condition under ASC 718. The TSR for the Company or a member of the TSR Peer Group is calculated by dividing (a) the difference of the ending average stock price minus the beginning average stock price by (b) the beginning average stock price. The beginning average stock price equals the average closing stock price over the one calendar month period prior to the beginning of the performance period, after adjusting for dividends, as applicable. The ending average stock price equals the average closing price over the one calendar month period ending on the last day of the performance period, after adjusting for dividends, as applicable. The Company’s relative TSR is then used to calculate the payout percentage, which may range from zero percent ( 0% ) to one hundred and fifty percent ( 150% ) of the target award. The Company utilized a Monte Carlo Simulation to determine the grant date fair value of such PRSUs and PRSAs. The Company recorded approximately $1.3 million of stock-based compensation related to such PRSUs and PRSAs during the year ended December 31, 2018. No PRSUs or PRSAs were granted during the year ended December 31, 2017. The Company accounts for all forfeitures when they occur. Ultimately, the actual expense recognized over the vesting period will be for only those shares that vest and are not forfeited . The Company has in the past, and may in the future, grant performance-based awards with vesting terms based on the achievement of specified goals. To the extent such awards do not contain a market condition, the Company recognizes no expense until achievement of the performance requirement is deemed probable . Stock-based compensation expense has been reported in the Company’s statements of operations as follows: Years Ended December 31, 2018 2017 2016 (In thousands) Selling, general and administrative $ 38,361 $ 40,004 $ 32,073 Research and development 11,553 16,964 14,132 Total stock-based compensation $ 49,914 $ 56,968 $ 46,205 |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2018 | |
Employee Benefit Plans [Abstract] | |
Employee Benefit Plans | 13 . Employee Benefit Plans The Company maintains a defined contribution plan, which is qualified under section 401(k) of the Internal Revenue Code for U.S. employees. Employees may make contributions by withholding a percentage of their salary up to the Internal Revenue Service annual limit of $18,500 and $24,500 in 2018 for employees under 50 years old and employees 50 years old or over, respectively. The Company’s matching contribution vests over four years from the start of employment. The Company made approximately $1 .9 m illion, $2.7 million and $2.3 million in matching contributions for the years ended December 31, 2018, 2017 and 2016, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Taxes [Abstract] | |
Income Taxes | 1 4 . Income Taxes The components of loss before income taxes for the years ended December 31, 2018, 2017 and 2016 includes the following: Years Ended December 31, 2018 2017 2016 (in thousands) United States $ (72,655) $ (102,586) $ (154,812) Foreign (236,587) (257,781) (258,018) Total $ (309,242) $ (360,367) $ (412,830) Income tax expense (benefit) differed from the amounts computed by applying the statutory U.S. Federal income tax rate of 21% ( 34% for 2017 and 2016) to loss before income taxes as a result of the following: Years Ended December 31, 2018 2017 2016 (in thousands) Computed "expected" tax benefit $ (64,941) $ (122,525) $ (140,362) State taxes, net of U.S. Federal benefit - - - U.S. Federal rate reduction - 84,787 - U.S. Federal valuation allowance 9,352 282 40,377 Stock-based compensation 6,423 (49,391) 5,161 Officer compensation 22 26 50 Foreign valuation allowance 44,896 52,521 57,759 Foreign tax rate differences 4,787 35,125 37,142 Other (539) (825) (127) Total $ - $ - $ - The tax effects of temporary differences that give rise to the deferred tax assets and liabilities at December 31, 2018 and 2017 are presented below: December 31, 2018 2017 (in thousands) Deferred tax assets: Net operating loss and other carryforwards $ 329,088 $ 276,481 Stock compensation 13,228 14,651 Deferred revenue 620 1,149 Accrued compensation 3,431 3,994 Accrued expense 2,340 1,139 Intellectual property - 1,059 Interest limitation 2,913 - Other 1,021 492 Deferred tax assets before valuation allowance 352,641 298,965 Valuation allowance (338,852) (282,730) Total deferred tax assets 13,789 16,235 Deferred tax liabilities: Convertible Note (13,789) (16,235) Total deferred tax liabilities (13,789) (16,235) Net deferred tax asset (liability) $ - $ - Effects of the Tax Cuts and Jobs Act In late 2017 , the United States enacted the Tax Cuts and Jobs Act of 2017 (the “TCJA”) , which significantly changed U.S. tax law by implementing a reduction in the corporate tax rate to 21% , moving from a worldwide tax system to a territorial system and imposing new or additional limitations on the deductibility of interest expense and executive compe nsation . Given the significa nce of the legislation, the staff of the U.S. Securities and Exchange Commission (the “SEC”) issued Staff Accounting Bulletin No. 118 ( “ SAB 118 ” ), which allowed registrants to record provisional amounts during a one year “measurement period” similar to that used when accounting for business combinations. The Company applied the guidance in SAB 118 when accounting for the enact ment-date effects of the TCJA in 2017 and throughout 2018. For the year ended December 31, 2017, amounts recorded principally related to the reduction in the U.S. corporate income tax rate to 21%, which resulted in the Company reducing its net deferred tax asset and associated valuation allowance by $82.8 million. Additionally, the new law included a one-time mandatory repatriation transition tax on the net accumulated earnings and profits of a U.S. taxpayer’s foreign subsidiaries . As a result of accumulated losses since inception, there was no income tax effect. At December 31, 2018, the Company completed its accounting of SAB 118 for all of the enactment-date income tax effects of the TCJA. The Company has not made any measurement-period adjustments and there were no additional material adjustments related to the TCJA. Net Operating Losses As of December 31, 2018 and 2017, the Company had net operating loss carryforwards (“NOLs”) for U.S. Federal income tax purposes of $658.4 million and $628.0 million, respectively. The enactment of the TCJA in late 2017 modified the ability of companies to utilize NOLs arising in tax years beginning on or after January 1, 2018 by providing that such NOLs may be carried-forward indefinitely and used to offset up to 80 percent of taxable income in any given future year. Existing NOLs that arose in tax years beginning prior to January 1, 2018 were not affected by the TCJA and are generally eligible to be carried-forward for up to 20 years and used to fully offset taxable income in future years. The Company’s pre-2018 NOLs will expire for U.S. Federal income tax purposes between 2024 and 2037 . The Company also has certain state and foreign NOLs in varying amounts depending on the different state and foreign tax laws. In addition, the Company’s ability to utilize its NOLs may be limited under Section 382 of the Internal Revenue Code or similar rules. The Section 382 limitations apply if an “ownership change” occurs. Generally, an ownership change occurs when certain shareholders increase their aggregate ownership by more than 50 percentage points over their lowest ownership percentage in a testing period (typically three years). The Company has evaluated whether one or more ownership changes under Section 382 have occurred since its inception and has determined that there have been at least two such changes. Although the Company believes that these ownership changes have not resulted in material limitations on its ability to use these NOLs, its ability to utilize these NOLs may be limited due to future ownership changes or for other reasons. As a result, the Company may not be able to take full advantage of its carryforwards for U.S. Federal, state, and foreign tax purposes. Valuation Allowance At December 31, 2018 and 2017, the Company maintained a full valuation allowance on its deferred tax assets since it has not yet achieved sustained profitable operations. As a result, the Company has not recorded any income tax benefit sinc e its inception. In 2018, the valuation allowance for deferred tax assets increased by approximately $56.1 million. This includes an increase of $9.4 million, $1.9 million and $44.9 million for U.S. Federal, state and foreign tax, respectively, partially offset by a decrease of $0.1 million to equity. In 2017, the valuation allowance for deferred tax assets increased by approximately $59.3 million. This includes an increase of $0.3 million, $6.8 million and $52.5 million for U.S. Federal, state and foreign tax, respectively, partially offset by a decrease of $0.3 million to equity. Unrecognized Tax Benefits At December 31, 2018 and 2017, the Company had no reserves for unrecognized tax benefits. The Company and its subsidiaries are subject to taxation in the United States and various foreign jurisdictions. Of the major jurisdictions, the Company is subject to examination in: the United States for U.S. Federal purposes for 2015 and forward and generally for state purposes for 2014 and forward; and the United Kingdom for 2016 and forward. However, NOLs are subject to audit in any tax year in which those losses are utilized, notwithstanding the year of origin. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | 1 5 . Commitments and Contingencies Facility Leases In May 2014, the Company en tered into a lease agreement with respect to office space in San Diego, California. The Company leases approximately 47,000 square fe et . The lease covering this property is sch eduled to expire in July 2020 . In January 2016, Intercept Pharma Europe Ltd. ( “ IPEL ” ), a wholly owned subsidiary of the Company, e ntered into an underlease with respect to office sp ace in London, United Kingdom. The Company is the guarantor to the underlease . IPEL leases approximately 8,500 s quare feet. The lease covering this property is scheduled to expire in M ay 2024. I n December 2016, the Company entered into a lease agreemen t with respect to office space at 10 H udson Yards in New York, New York, where the Company’s corporate headquarters are located. The Company leases an aggregate of approximately 41,100 square feet of office space at this property. The lease covering this property is scheduled to expire at varying times through June 2021. The Company also leases office space in several other locations. Rent expense under o p erating leases for facilities for the years ended December 31, 201 8 , 201 7 and 2016 was approximately $6.3 million, $8.9 million and $5.5 million, respectively. As of December 31, 2018, minimum contractually-obligated operating lease cash payments under non-cancelable leases, as amended, are as follows: Year Ending December 31, Amount (in thousands) 2019 $ 9,506 2020 8,126 2021 4,841 2022 2,945 2023 2,982 Thereafter 1,531 Total future minimum operating lease payments $ 29,931 Purchase Commitments The Company enters into contracts in the normal course of business with contract research organizations fo r its clinical trials, contract manufacturing organizations for the manufacture and supply of its clinical and commercial product needs and other vendors for other research and development and commercial activities, as well as services and products for operating purposes . The Company’s agreements generally provide for ter mination with n otice. Such agreeme nts are cancelable contracts are not included as purchase commitments. The Company has included as p urchase obligations its commitments under agreements to the extent they are quantifiable and are no t cancelable. The Company had purchase obligations of approximately $29.8 million as of December 31, 201 8 . Legal Proceedings The Company is involved in various disputes, governmental inquiries and investigations, legal proceedings and litigation in the course of its business, including the matters described below and, from time to time, intellectual property, employment and other litigation. These matters, which could result in damages, fines or other administrative, civil or criminal remedies, liabilities or penalties, are often complex and the outcome of such matters is often uncertain. The Company may from time to time enter into settlements to resolve such matters. On September 27, 2017, a purported shareholder class action, initially styled DeSmet v. Intercept Pharmaceuticals, Inc., et al, was filed in the United States District Court for the Southern District of New York, naming the Company and certain of its officers as defendants. The Court appointed lead plaintiffs in the lawsuit on June 1, 2018, and the lead plaintiffs filed an amended complaint on July 31, 2018, captioned Hou Liu and Amy Fu v. Intercept Pharmaceuticals, Inc., et al., naming the Company and certain of its current and former officers as defendants. The lead plaintiffs claim to be suing on behalf of anyone who purchased or otherwise acquired the Company’s common stock between June 9, 2016 and September 20, 2017. This lawsuit alleges that material misrepresentations and/or omissions of material fact were made in the Company’s public disclosures during the period from June 9, 2016 to September 20, 2017, in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Rule 10b-5 promulgated thereunder. The alleged improper disclosures relate to statements regarding Ocaliva dosing, use and pharmacovigilance-related matters, as well as the Company’s operations, financial performance and prospects. The plaintiffs seek unspecified monetary damages on behalf of the putative class, an award of costs and expenses, including attorney’s fees, and rescissory damages. On September 14, 2018, the Company filed a motion to dismiss the amended complaint. Separately, on January 5, 2018, a follow-on derivative suit, styled Davis v. Pruzanski et al., was filed in New York state court by shareholder Gregg Davis based on substantially the same allegations as those set forth in the securities case. On December 1, 2017, a purported shareholder demand was made on the Company based on substantially the same allegations as those set forth in the securities case. While the Company believes that it has a number of valid defenses to the claims described above and intends to vigorously defend itself, the matters are in the early stages of litigation and no assessment can be made as to the likely outcome of the matters or whether they will be material to the Company. Accordingly, an estimate of the potential loss, or range of loss, if any, to the Company relating to the matters is not possible at this time. In May 2018, the Company received a subpoena from the SEC requesting information in connection with the Company’s patient assistance program and certain of the Company’s commercial activities. The SEC’s letter enclosing the subpoena states that the investigation and the subpoena do not mean that the Company or anyone else has broken the law, or that the SEC has a negative opinion of any person, entity or security. The Company is cooperating fully with the SEC in this matter. At this time, the Company is unable to predict whether any proceeding may be instituted in connection with the subpoena, or the outcome of any such proceeding, if instituted. In August 2018, the Company received an inquiry from the U.S. Department of Justice acting through the U.S. Attorney’s office for the District of Massachusetts (the “DOJ”) requesting the voluntary production of certain information regarding the Company’s activities and public statements concerning Ocaliva’s dosing, use, adverse events, marketing and reimbursement. The Company cooperated fully with the DOJ in connection with this inquiry and in early 2019 the DOJ informed the Company that it had reviewed the information produced by the Company and did not plan to request further information in connection therewith. Subsequently, a qui tam complaint alleging that the Company violated federal and state false claims acts was unsealed in January 2019. The qui tam complaint was voluntarily dismissed without prejudice by the relator with the consent of the United States of America and various named state government plaintiffs. |
Net Loss Per Share
Net Loss Per Share | 12 Months Ended |
Dec. 31, 2018 | |
Net Loss Per Common and Potential Common Share: [Abstract] | |
Net Loss Per Share | 1 6 . Net Loss Per Share Basic loss per share is computed by dividing net loss attributable to common stockholders (numerator) by the weighted average number of common shares outstanding (denominator) during the period . For the years ended December 31, 2018, 2 017 and 2016, as the Company was in a net loss position, the diluted loss per share computations for such periods did not assume the conversion of the Convertible Notes, exercise of stock options or vesting of RSUs as they would have had an anti-dilutive effect on loss per share. The following potentially dilutive securities have been excluded from the computations of diluted weighted average shares outstanding as of December 3 1, 2018, 2017 and 2016, as the inclusion thereof would have been anti-dilutive: December 31, 2018 2017 2016 (in thousands) Convertible Notes 2,316 Options 1,874 1,808 1,553 Restricted stock units 441 493 382 Total 4,631 2,301 1,935 |
Quarterly Financial Data (unaud
Quarterly Financial Data (unaudited) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Data [Abstract] | |
Quarterly Financial Data | 1 7 . Quarterly Financial Data (unaudited) The following table summarizes the unaudited quarterly financial data for the years ended December 31, 2018 and 2017: Quarters Ended March 31, June 30, September 30, December 31, Total 2018 (in thousands, except for per share amounts) Revenues $ 35,963 $ 43,575 $ 46,986 $ 53,280 $ 179,804 Operating loss (75,456) (69,777) (58,286) (81,971) (285,490) Net loss (81,590) (75,193) (64,454) (88,005) (309,242) Net loss per common share - basic and diluted $ (3.22) $ (2.58) $ (2.18) $ (2.97) 2017 Revenues $ 21,048 $ 30,887 $ 41,334 $ 37,687 $ 130,956 Operating loss (83,963) (80,509) (66,171) (104,969) (335,612) Net loss (89,930) (86,564) (72,601) (111,272) (360,367) Net loss per common share - basic and diluted $ (3.61) $ (3.46) $ (2.89) $ (4.43) |
Prior Settlement
Prior Settlement | 12 Months Ended |
Dec. 31, 2018 | |
Prior Settlement [Abstract] | |
Prior Settlement | 18. Prior Settlement In February 2014 , two purported shareholder class actions, styled Scot H. Atwood v. Intercept Pharmaceuticals, Inc. et al. and George Burton v. Intercept Pharmaceuticals, Inc. et al. , were filed in the United States District Court for the Southern District of New York , naming the Company and certain of its officers as defendants. These lawsuits were filed by stockholders who claim ed to be suing on behalf of anyone who purchased or otherwise acquired the Company’s securities between January 9, 2014 and January 10, 2014. The lawsuits alleged that the Company made material misrepresentations and/or omissions of material fact in its public disclosures during the period from January 9, 2014 to January 10, 2014, in violation of Sections 10(b) and 20(a) of the Ex change Act and Rule 10b-5 promulgated thereunder. The alleged improper disclosures relate d to the Company’s January 9, 2014 announcement that the FLINT trial had been stopped early based on a pre-defined interim efficacy analysis. Specifically, the lawsuits claimed that the January 9, 2014 announcement was misleading because it did not contain information regarding certain lipid abnormalities seen in the FLINT trial in OCA-treated patients compared to placebo. A lead plaintiff was subseque ntly appointed by the Court and in June 2014, the lead plaintiff filed an amended complaint on behalf of the putative class seeking unspecified monetary damages on behalf of the putative class and an award of costs and expenses, including attorneys’ fees. In August 2014, the defendants filed a motion to dismiss the complaint. In March 2015, the defendants’ motion to dismiss was denied by the Court. The defendants answered the amended complaint in April 2015. In July 2015, the plaintiff moved for class certification and appointment of class repr esentatives and class counsel. In September 2015, the defendants opposed the plaintiff’s class certification motion. The plaintiff filed its reply to the defen dants’ opposition in October 2015, to which th e defendants filed a sur-reply in November 2015. Oral arguments on the class certification motion were held in January 2016. In May 2016, the defendants reached an agreement with the lead plaintiff to seek Court approval of a proposed resolution , t he plaintiffs moved for preliminary appr oval of the proposed settlement and the Court entered an order preliminarily approving the settlement. The Court ordered that notice be provided to the class and preliminarily approved the proposed settlement, including the payment of $55.0 million, of which $10.0 million was agreed to be funded by the Company’s insurers. The one-time net expense of $45.0 million was recorded to selling, general, and administrative expenses in the statement of operations for the year ended December 31, 2016. The settlement was paid into escrow in June 2016, with distribution to the class to occur after the Court had finally approved the settlement and the plan of allocation of those proceeds. In September 2016, the Court granted final approval of the settlement. The final judgment and order of the Court included a dismissal of the action with prejudice against all defend ants. The defendants did not admit any liability as part of the settlement. |
Restructuring Charges
Restructuring Charges | 12 Months Ended |
Dec. 31, 2018 | |
Restructuring Charges [Abstract] | |
Restructuring Charges | 19 . Restructuring Charges In December 2017, the Company initiated a 15% red uction in the workforce and concurrently notified the affecte d employees . The reduction in force supports the Company’s strategy to fund its development organization with strategic collaborations and to focus the Company’s resources to progress its development and commercialization initiatives. The actions associated with the reductions were substantially completed during the fourth quarter of 2017 and, as a result of the reductions, the Company recorded a one-time restructuring charge of $5.2 million for termination benefits in the same period. Of this charge, $3.9 million was recorded in selling, general and administrative expense and $1.3 million was recorded in research and development expense. The restructuring charge associated with cash payments of $5.2 million were paid out in the first quarter of 2018. No restructuring charges were incurred for the year ended December 31, 2018. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Summary of Significant Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The Company’s financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The consolidated financial statements in clude the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The Company has no unconsolidated subsidiaries or investments accounted for under the equity method. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management t o make estimates and judgments that affect the reported amounts of assets and liabilities, the disclosure of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. |
Foreign Currency | Foreign Currency The Company’s functional and reporting currency is the U.S. dollar. Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction. The resulting monetary assets and liabilities are translated into U.S. dollars at exchange rates prevailing on the subsequent balance sheet date. Gains and losses as a result of translation adjustments are recorded within Other income, net in the accompanying consolidated statements of operations and within Foreign currency translation gains (losses) within the accompanying consolidated statements of comprehensive loss. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid securities with an original or remaining maturity of three months or less at acquisition to be cash equivalents. |
Investment Debt Securities, Available for Sale | Invest ment Debt Securities, Available-for- Sale Investment debt securities are considered to be available-for-sale and are carried at fair value. Unrealized gains and losses, if any, are reported in other comprehensive income (loss). The cost of investment debt securities classified as available-for-sale is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization and accretion is included in other income, net. Realized gains and losses, and declines in value judged to be other-than-temporary, if any, are also included in other income, net. The cost of securities sold is based on the specific identification method. The estima ted fair value of the available-for- sale debt securities is determined based on quoted market prices or rates for similar instruments. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Financial instruments, including cash and cash equivalents, receivables, accounts payable and accrued liabilities are carried at cost which management believes approximates fair value because of the short-term maturity of these instruments. |
Risks and Uncertainties | Risks and Uncertainties The Company is subject to risks common to companies in the pharmaceutical industry including failing to secure additional funding and uncertainties related t o commercialization of products and regulatory approval. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments, which potentially subject the Company to concentrations of credit risk, principally consist of cash, cash equivalents and investment debt securities. The Company currently invests its excess cash primarily in money market funds, U.S. Treasury notes, and high quality, marketable debt instruments of corporations, financial institutions and government sponsored enterprises. The Company has adopted an investment policy that includes guidelines relative to credit quality, diversification and maturities to preserve principal and liquidity. On a consolidated basis, for the year ended December 31, 2018, the Company’s three largest customers (as discussed in more detail below under “Revenue Recognition”) accounted for 38% , 28% and 16% , of the Company’s net product sales, respectively. On a consolidated basis, for the year ended December 31, 2017, the Company’s three largest customers (as discussed in more detail below under “Revenue Recognition”) accounted for 40% , 23% and 13% , of the Company’s net product sales, respectively. |
Accounts Receivable | Accounts Receivable The Company extends credit to customers based on its evaluation of the customer’s financial condition. The Company records receivables for all billings when amounts are due under standard terms. Accounts receivable are stated at amounts due net of applicable prompt pay discounts and other contractual adjustments as well as an allowance for doubtful accounts. The Company assesses the need for an allowance for doubtful accounts by considering a number of factors, including the length of time trade accounts receivable are past due, the customer’s ability to pay its obligation and the condition of the general economy and the industry as a whole. The Company will write off accounts receivable when the Company determines that they are uncollectible. The Company has recorded $25.7 million and $16.5 million of accounts receivable as of December 31, 2018 and 2017, respectively, and has no t recorded an allowance for any doubtful accounts as of December 31, 2018 and 2017. On a consolidated basis, the Company’s three largest customers accounted for 22% , 29% and 6% of the December 31, 2018 accounts receivable balance, respectively. On a consolidated basis, the Company’s three largest customers accounted for 34% , 29% and 12% of the December 31, 2017 accounts receivable balance, respectively. |
Fixed Assets | Fixed Assets Fixed assets are stated at cost, and depreciated over the estimated useful life of the assets. Depreciation is recorded using the straight-line method over the estimated useful lives of the respective assets, generally three to seven years. Leasehold improvements are amortized over the shorter of the asset’s useful life or the life of the lease term . Expenditures for maintenance and repairs are charged to expense as incurred. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Long-lived assets consist of fixed assets. The Company evaluates long-lived assets for impairment when events and circumstances indicate that the carrying amount of an asset or group of assets may not be fully recoverable. If indicators of impairment exist, the Company assesses the recoverability of the affected long-live d assets by d etermining whether the carrying value of such assets can be recovered through undiscounted future operating cash flows. If the carrying amount is not recoverable, the Company measures the amount of any impairment by comparing the carrying value of the asset to the present value of the expected future cash flows associated with the use of the asset. |
Inventory | Inventory Inventories are stated at the lower of cost or estimated realizable value. The Company determines the cost of inventory using the first-in, first-o ut ( or FIFO ) method. The Company capitalizes inventory costs associated with the Company's product after regulatory approval when, based on management's judgment, future commercialization is considered probable and the future economic benefit is expected to be realized; otherwise, such costs are expensed as research and development. The Company periodically analyzes its inventory levels to identify inventory that may expire prior to expected sale or has a cost basis in excess of its estimated realizable value, and writes-down such inventories as appropriate. In addition, the Company's product is subject to strict quality control and monitoring which the Company performs throughout the manufacturing process. If certain batches or units of product no longer meet quality specifications or become obsolete due to expiration, the Company records a charge to cost of sales sold to write down such unmarketable inventory to zero. No such charges were recorded in the years ended December 31, 2018, 2017 or 2016. |
Convertible Senior Notes | Convertible Senior Notes The Compa ny’s 3.25% Convertible Senior N otes due 2023 (the “Convertible Notes”) are accounted for in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Subtopic 470-20, Debt with Conversion and Other Options . ASC Subtopic 470-20 requires the issuer of convertible debt that may be settled in shares or cash upon conversion at the issuer's option, such as the Convertible N otes, to account for the liability (debt) and equity (conversion option) components separately. The value assigned to the debt component is the estimated fair value, as of the issuance date, of a similar debt instrument without the conversion option. The amount of the equity component (and resulting debt discount) is calculated by deducting the fair value of the liability component from the principal amount of the convertible debt instrument. The resulting debt discount is amortized as additional non-cash interest expense over the expected life of the notes utilizing the effective interest method. Although ASC 470 -20 has no impact on the Company’s actual past or future cash flows, it requires the Company to record non-cash interest expense as the debt discount is amortized. For additional information, see Note 8 – Long-Term Debt. |
Revenue Recognition | Revenue Recognition Product Revenue, Net The Company commenced its commercial launch of Ocaliva for the treatment of PBC in the United States in June 2016. In December 2016, the European Commission granted conditional approval for Ocaliva for the treatment of PBC and the Company commenced its European commercial launch in January 2017. Since January 2017, Ocaliva has also received regulatory approval in several of the Company’s target markets outside the United States and E urope, including Canada, Israel and Australia. The Company sells Ocaliva to a limited number of specialty pharmacies which dispense the product directly to patients. The specialty pharmacies are referred to as the Company’s customers. The Company provides the right of return to its customers for unopened product for a limited time before and after its expiration date. Prior to July 2017, given the Company’s limited sales history for Ocaliva and the inherent uncertainties in estimating product returns, the Company determined that the shipments of Ocaliva made to its customers did not meet the criteria for revenue recognition at the time of shipment. Accordingly, the Company recognized revenue when the product was sold through by its customers, provided all other revenue recognition criteria were met. The Company invoiced its customers upon shipment of Ocaliva to them and recorded accounts receivable, with a corresponding liability for deferred revenue equal to the gross invoice price. The Company then recognized revenue when Ocaliva was sold through as specialty pharmacies dispensed product directly to the patients (sell-through basis). The Company re-evaluated its revenue recognition policy in the third quarter of 2017, which included the accumulation and review of customer-related transactions since the Company’s commercial launch in the second quarter of 2016. The Company concluded it had accumulated sufficient data to reasonably estimate product returns and, therefore, began to recognize revenue at the time of shipment to its customers (sell-in basis). During the third quarter of 2017, the Company recorded an adjustment related to this change in estimate to recognize previously deferred revenue. The net effect was an increase in net sales of Ocaliva of $4.1 million for the year ended December 31, 2017. The Company also established a new reserve of $0.7 million during 2017 related to future returns from its customers. Effective January 1, 2018, the Company bega n recognizing revenue under ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”) . The core principle of this revenue standard is that a company should recognize 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 following five steps are applied to achieve that core principle: Step 1: Identify the contract with the customer Step 2: Identify the performance obligations in the contract Step 3: Determine the transaction price Step 4: Allocate the transaction price to the performance obligations in the contract Step 5: Recognize revenue when the company satisfies a performance obligation In order to identify the performance obligations in a contract with a customer, a company must assess the promised goods or services in the contract and identify each promised good or service that is distinct. A performance obligation meets ASC 606’s definition of a “distinct” good or service (or bundle of goods or services) if both of the following criteria are met: The customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (i.e., the good or service is capable of being distinct). The entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e., the promise to transfer the good or service is distinct within the context of the contract). If a good or service is not distinct, the good or service is combined with other promised goods or services until a bundle of goods or services is identified that is distinct. The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties (for example, some sales taxes). The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The transaction price is allocated to each performance obligation on a relative standalone selling price basis. The transaction price allocated to each performance obligation is recognized when that performance obligation is satisfied, at a point in time or over time as appropriate. Under ASC 606, the Company has written contracts with each of its customers that have a single performance obligation - to deliver products upon receipt of a customer order - and these obligations are satisfied when delivery occurs and the customer receives Ocaliva. The Company evaluates the creditworthiness of each of its customers to determine whether collection is reasonably assured. The Company estimates variable revenue by calculating gross product revenues based on the wholesale acquisition cost that the Company charges its customers for Ocaliva, and then estimating its net product revenues by deducting (i) trade allowances, such as invoice discounts for prompt payment and customer fees, (ii) estimated government rebates and discounts related to Medicare, Medicaid and other government programs, and (iii) estimated costs of incentives offered to certain indirect customers including patients. Trade Allowances The Company provides invoice discounts on Ocaliva sales to certain of its customers for prompt payment and records these discounts as a reduction to gross product revenues. These discounts are based on contractual terms. Rebates and Discounts The Company contracts with the Centers for Medi care & Medicaid Services and other government agencies to make Ocaliva available to eligible patients. As a result, the Company estimates any rebates and discounts and deducts these estimated amounts from its gross product revenues at the time the revenues are recognized. The Company’s estimates of rebates and discounts are based on the government mandated discounts, which are statutorily-defined and applicable to these government funded programs. These estimates are recorded in acc ounts payable, accrued expenses and other liabilities on the consolidated balance sheet. Other Incentives Other incentives that the Company offers to indirect customers include co-pay assistance cards provided by the Company for PBC patients who reside in states that permit co-pay assistance programs. The Company’s co-pay assistance program is intended to reduce each participating patient’s portion of the financial responsibility for Ocaliva purchase price to a specified dollar amount. The Company estimates the amount of co-pay assistance provided to eligible patients based on the terms of the program when product is dispensed by the specialty pharmacies to the patients. These estimates are based on redemption information provided by third-party claims processing organizations and are recorded in accounts payable, accrued expenses and other liabilities on the consolidated balance sheet. Because the Company changed its revenue recognition polices to the sell-in basis during the year ended December 31, 2017, the adoption of ASU 2014-09 (as defined below), via a modified retrospective approach applied to all contracts not completed at January 1, 2018, did not result in an adjustment to amounts previously recognized as revenue under ASC Topic 605, Revenue Recognition (“ASC 605”), and there were no other significant changes impacting the timing or measurement of the Company’s revenue or the Company’s business processes and controls. Licensing Revenue Under ASC 606, the Company accounts for the development, regulatory and sales milestones within an arrangement as variable consideration that is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Because the achievement of the milestones triggering these payments is highly susceptible to factors outside the entity’s influence, and the uncertainty about the amount of consideration for some of the milestones is not expected to be resolved for a long period of time, the Company does not expect to record the associated revenue until achievement of each milestone is imminent or has already occurred. Adoption of ASC 606 did not result in any adjustment to licensing revenue previously recognized under ASC 605. |
Research and Development Expenses | Research and Development Expenses Research and development costs that do not have alternative future use are charged to expense as incurred. This includes the cost of conducting clinical trials, compensation and related overhead for employees and consultants involved in research and development and the cost of the Company’s manufacturing activities to supply ongoing and future clinical trials and preclinical studies as well as preparations f or commercialization of OCA . The cost of a compound that is acquired prior to regulatory approval, does not constitute a busines s and has no alternative future use is charged to expense as incurred. For periods prior to the commercial launch of Ocaliva for PBC in June 2016, all manufacturing costs f or OCA were expensed as research and development expenses . The Company will continue to incur manufacturin g costs for OCA for other indications such as NASH prior to their approval. |
Stock-based Compensation | Stock-based Compensation The Company accounts for stock-based compensation in accordance with ASC Topic 718, Compensation—Stock Compensation (“ASC 718”). The Company estimates the fair value of stock option awards using the Black-Scholes option pricing model on the date of the grant. Restricted stock unit awards (“RSUs”) and restricted stock awards (“RSAs”) without a market condition are valued based on the closing price of the Company’s common stock on the date of the grant. The fair value of time-based equity awards is recognized and amortized on a straight-line basis over the requisite service period of the award. Stock options granted to employees generally fully vest over four years and have a term of ten years. The Company recognizes stock-based compensation expense for options and other stock-based awards with performance conditions ratably over the performance period once the pre-defined performance-based criteria for vesting becomes probable. The fair value of awards with market conditions is estimated using the Monte Carlo simulation method and expense is recognized on a straight-line basis over the requisite service period of the award. The Company recognizes stock-based compensation for non-employees (other than non-employee directors) on a mark-to-market basis, which is updated on a quarterly basis. |
Net Income (Loss) Per Share | Net Income (Loss) Per Share Basic net income (loss) per share is computed by dividing net income (loss) attributable to common stockholders (numerator) by the weighted average number of common shares outstanding (denominator) during the period. Diluted net income (loss) per share gives effect to all dilutive potential common shares outstanding during the period , including the Convertible Notes, stock optio ns and RSUs, as applicable, using the treasury stock method. |
Income Taxes | Income Taxes The Company utilizes the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement carrying amounts and tax bases of assets and liabilities using enacted tax rates in effect for years in which the temporary differences are expected to reverse. The Company establishes a valuation allowance when it believes it is more likely than not that deferred tax assets will not be realized. The Company determines the need for a valuation allowance by assessing the probability of realizing deferred tax assets, taking into consideration all available positive and negative evidence, including historical operating results, expectations of future taxable income, carryforward periods available, various income tax strategies and other relevant factors. Significant judgment is required in making this assessment and to the extent future expectations change, the Company would have to assess the recoverability of its deferred assets at that time. At December 31, 2018 and 2017, the Company maintained a full valuation allowance on its deferred tax assets. At any one time the Company’s tax returns for numerous tax years are subject to examination by U.S. Federal, state, and foreign taxing jurisdictions. The impact of an uncertain tax position taken or expected to be taken on an income tax return must be recognized in the financial statements at the largest amount that is more likely than not to be sustained. An uncertain income tax position will not be recognized in the financial statements unless it is more likely than not to be sustained. At December 31, 2018 and 2017, the Company had no reserves for unrecognized tax benefits. |
Segments | Segments The Company operates in one segment. The Company is a biopharmaceutical company focused on the development and c ommercialization of novel therapeutics to treat progressive non-viral liver diseases. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”), and subsequently issued modifications or clarifications in ASU No. 2015-14, “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date,” ASU No. 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net),” ASU No. 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing” and ASU No. 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients.” The revenue recognition principle in ASU 2014-09 and the related guidance is that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 prescribes a five-step process for evaluating contracts and determining revenue recognition. In addition, new and enhanced disclosures are required. Companies may adopt the new standard using either the full retrospective approach, a modified retrospective approach with practical expedients, or a cumulative effect upon adoption approach. The Company adopted the new standard on January 1, 2018, using the modified retrospective approach, applied only to contracts that were not completed as of January 1, 2018. The ad option did not have an impact on the Company’s consolidated financial statements and related disclosures. In January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities” (“ASU 2016-01”). ASU 2016-01 requires equity investments to be measured at fair value with changes in fair value recognized in net income; simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment; eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet; requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments; requires separate presentation of financial assets and financial liabilities by measurement category and form of financial assets on the balance sheet or the accompanying notes to the financial statements and clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. ASU 2016-01 is effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company adopted ASU 2016-01 on January 1, 2018 and its adoption did not have a material impact on the Company’s consolidated financial statements and related disclosures. In February 2016, the FASB established ASC Topic 842, Leases (“ASC 842”), by issui ng ASU No. 2016-02, which requires lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. ASC 842 was subsequently amended by ASU No. 2018-01, “ Land Easement Practical Expedient for Transition to Topic 842 ” ; ASU No. 2018-10, “ Codification Improvements to Topic 842, Leases ” ; and ASU No. 2018-11, “ Targeted Improvements ” . The new standard establishes a right-of-use model ( “ ROU ” ) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. A modified retrospective transition approach is required, applying the new standard to all leases existing at the date of initial application. An entity may choose to use either (1) its effective date or (2) the beginning of the earliest comparative period presented in the financial statements as its date of initial applic ation. The Company adopted the new standard on January 1, 2019 using the effective date as the date of initial application. Consequently, financial information will not be updated and the disclosures required under the new standard will not be provided for dates and p eriods before January 1, 2019. The new standard provides a number of optional practic al expedients in transition. The Company elected the “ package of practic al expedients”, which permits the Company to not rea ssess under the new standard the Company’s prior conclusions about lease identification, lease classification and initial direct costs. The new standard also provides practical expedients for an entity’s ongoing accounting. The Company elected the short-term lease recognition exemption for all leases that qualify. This means, fo r those leases that qualify, the Company will not recognize ROU assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition. The Company also elected the practical expedient to not separate lease and non -lease components for all of the Company’s leases. Upon adoption, the Company will recognize additional operating liabi lities of $25.4 million, with corresponding ROU assets of $19.6 million based on the present value of the remaining minimum rental payments under c urrent leasing standards for existing operating leases. In May 2017, the FASB issued ASU No. 2017-09, “Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting” (“ASU 2017-09”), which clarifies when to account for a change to the terms or conditions of a stock-based payment award as a modification. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award (as equity or liability) changes as a result of the change in terms or conditions. It is effective prospectively for the annual period ending December 31, 2018 and interim periods within that annual period. Early adoption is permitted. The Company adopted ASU 2017-09 on January 1, 2018 and its adoption did not have a material impact on the Company’s consolidated financial statements and related disclosures. In July 2017, the FASB issued ASU No. 2017-11, “Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features; II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception” (“ASU 2017-11”). Part I of this update addresses the complexity of accounting for certain financial instruments with down round features. Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity offerings. Current accounting guidance creates cost and complexity for entities that issue financial instruments (such as warrants and convertible instruments) with down round features that require fair value measurement of the entire instrument or conversion option. Part II of this update addresses the difficulty of navigating ASC Topic 480, Distinguishing Liabilities from Equity , because of the existence of extensive pending content in the FASB Accounting Standards Codification. This pending content is the result of the indefinite deferral of accounting requirements about mandatorily redeemable financial instruments of certain nonpublic entities and certain mandatorily redeemable noncontrolling interests. The amendments in Part II of this update do not have an accounting effect. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. The Company adopted ASU 2017-11 on January 1, 2019 and its adoption did not have any impact on the Company’s consolidated financial statements and related disclosures. In June 2018, the FASB issued ASU No. 2018-07, “Improvements to Nonemployee Share-Based Payment Accounting” (“ASU 2018-07”) , which simplifies the accounting for share-based payments granted to nonemployees for goods and services. Under this ASU, most of the guidance on such payments to nonemployees would be aligned with the requirements for share-based payments granted to employees. The changes take effect for public companies for fiscal years starting after December 15, 2018, including interim periods within that fiscal year. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted, but no earlier than an entity’s adoption date of ASC 606. The Company adopted ASU 2018-07 on January 1, 2019 and its adoption did not have a material impact on the Company’s consolidated financial statements and related disclosures. In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Top ic 820): Disclosure Framework – Changes to the Disclosure Requirem ents for Fair Value Measurement ” (“ASU 2018-13”), which makes a number of changes meant to add, modify or remove certain disclosure requirements associated with the movement amongst or hierarchy associated with Level 1, Level 2 and Level 3 fair value measurements. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted upon issuance of the update. The Company plans to adopt ASU 2018-13 effective January 1, 2020 and does not expect the adoption of this guidance t o have a material impact on the Company’s consolidated financial statements and related disclosures. |
Cash, Cash Equivalents, and I_2
Cash, Cash Equivalents, and Investments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Cash, Cash Equivalents, and Investments [Abstract] | |
Cash, Cash Equivalents and Investments | The following table summarizes the Company’s cash, cash equivalents and investments as of December 31, 2018 and December 31, 201 7: As of December 31, 2018 Gross Gross Amortized Cost Unrealized Unrealized Fair Value Gains Losses (in thousands) Cash and cash equivalents: Cash and money market funds $ 43,248 $ - $ - $ 43,248 Investment debt securities: Commercial paper 34,353 - (26) 34,327 Corporate debt securities 349,854 27 (704) 349,177 U.S. government and agency securities 9,410 5 (7) 9,408 Total investments 393,617 32 (737) 392,912 Total cash, cash equivalents and investments $ 436,865 $ 32 $ (737) $ 436,160 As of December 31, 2017 Gross Gross Amortized Cost Unrealized Unrealized Fair Value Gains Losses (in thousands) Cash and cash equivalents: Cash and money market funds $ 70,013 $ - $ - $ 70,013 Investment debt securities: Commercial paper 2,986 - (3) 2,983 Corporate debt securities 333,958 - (752) 333,206 U.S. government and agency securities 8,743 - (28) 8,715 Total investments 345,687 - (783) 344,904 Total cash, cash equivalents and investments $ 415,700 $ - $ (783) $ 414,917 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value | The fair value for the Company’s avail able-for-sale investment debt securities that have been in an unrealized loss position for less than twelve months or twelve months or longer is as follows: As of December 31, 2018 Less than 12 months 12 months or longer Total (in thousands) Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Commercial paper $ 34,327 $ (26) $ - $ - $ 34,327 $ (26) Corporate debt securities 260,547 (443) 56,626 (261) 317,173 (704) U.S. government and agency securities - - 1,991 (7) 1,991 (7) Total $ 294,874 $ (469) $ 58,617 $ (268) $ 353,491 $ (737) As of December 31, 2017 Less than 12 months 12 months or longer Total (in thousands) Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Commercial paper $ 2,983 $ (3) $ - $ - $ 2,983 $ (3) Corporate debt securities 272,453 (506) 60,753 (246) 333,206 (752) U.S. government and agency securities 6,723 (25) 1,992 (3) 8,715 (28) Total $ 282,159 $ (534) $ 62,745 $ (249) $ 344,904 $ (783) |
Fixed Assets, Net (Tables)
Fixed Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fixed Assets, Net [Abstract] | |
Property, Plant and Equipment | Fixed assets are stated at cost and depreciated or amortized using the straight-line method based on useful lives as follows: Useful lives December 31, (Years) 2018 2017 (in thousands) Office equipment and software 3 $ 3,986 $ 5,048 Leasehold improvements Over life of lease 14,464 14,665 Furniture and fixtures 7 3,907 5,257 Subtotal 22,357 24,970 Less: accumulated depreciation (11,946) (8,786) Fixed assets, net $ 10,411 $ 16,184 |
Inventory (Tables)
Inventory (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Inventory, Net [Abstract] | |
Schedule of Inventory | Inventories are stated at the lower of cost or market. Inventories consist ed of the following: December 31, 2018 2017 (in thousands) Work-in-process $ 7,019 $ 3,249 Finished goods 89 231 Inventory, net $ 7,108 $ 3,480 |
Accounts Payable, Accrued Exp_2
Accounts Payable, Accrued Expenses and Other Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounts Payable, Accrued Expenses and Other Liabilities [Abstract] | |
Schedule of Accounts Payable and Accrued Liabilities | Accounts payable, accrued expenses and other liabilities consisted of the following: December 31, 2018 2017 (in thousands) Accounts payable $ 11,765 $ 6,965 Accrued employee compensation 20,335 27,118 Accrued contracted services 54,681 51,154 Other liabilities 18,328 9,540 Accounts payable, accrued expenses and other liabilities $ 105,109 $ 94,777 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Long-Term Debt [Abstract] | |
Schedule of Long-term Debt Instruments | Debt, net of discounts and deferred financing costs, consist ed of the following: December 31, 2018 2017 (in thousands) Long-term debt $ 371,250 $ 355,677 Less current portion - - Long-term debt outstanding $ 371,250 $ 355,677 |
Product Revenue, Net (Tables)
Product Revenue, Net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Product Revenues, Net [Abstract] | |
Product Revenues | The table below summarizes consolidated product revenue, net by region: Years Ended December 31, 2018 2017 2016 (in thousands) Product revenue, net: U.S. $ 140,822 $ 115,807 $ 18,169 ex-U.S. 36,960 13,368 - Total product revenue, net $ 177,782 $ 129,175 $ 18,169 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Measurements [Abstract] | |
Fair Value, Assets Measured on Recurring and Nonrecurring Basis | Financial assets carried at fair value are classified in the tables below in one of the th ree categories described above: Fair Value Measurements Using Total Level 1 Level 2 Level 3 (in thousands) December 31, 2018 Assets: Money market funds (included in cash and cash equivalents) $ 11,647 $ 11,647 $ - $ - Available-for-sale debt securities: Commercial paper 34,327 - 34,327 - Corporate debt securities 349,177 - 349,177 - U.S. government and agency securities 9,408 - 9,408 - Total financial assets: $ 404,559 $ 11,647 $ 392,912 $ - December 31, 2017 Assets: Money market funds (included in cash and cash equivalents) $ 13,361 $ 13,361 $ - $ - Available-for-sale debt securities: Commercial paper 2,983 - 2,983 - Corporate debt securities 333,206 - 333,206 - U.S. government and agency securities 8,715 - 8,715 - Total financial assets: $ 358,265 $ 13,361 $ 344,904 $ - |
Schedule of Available for Sale Securities Debt Maturities | The estimated fair value of marketable debt securities (commercial paper, corporate debt securities and U.S. government and agency securities) as of December 31, 2018 and 2017, respectively, by contractual maturity, are as follows: Fair Value as of December 31, 2018 2017 (in thousands) Due in one year or less $ 319,717 $ 282,159 Due after one year through two years 73,195 62,745 Total investments in debt securities $ 392,912 $ 344,904 |
Stock Compensation (Tables)
Stock Compensation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Stock Compensation [Abstract] | |
Schedule of Share Based Compensation Arrangement By Share Based Payment Award Grants in Period Fair Value Assumptions | The Company estimated the fair value of stock options granted in the periods presented using a Black-Scholes option-pricing model utilizing the following assumptions: Years Ended December 31, 2018 2017 2016 Volatility 62 - 73% 61 - 65% 60 - 66% Expected term (in years) 6.0 6.0 - 9.9 5.1 - 10.0 Risk-free rate 1.8 - 3.0% 1.8 - 2.4% 1.1 - 2.4% Expected dividend yield — % — % — % |
Schedule of Share Based Compensation Stock Options Activities | The Company’s combined outstanding employee and non-employee option activity for the period from December 31, 2017 through December 31, 2018 is summarized as follows: Weighted Average Number Weighted Remaining Aggregate of Options Average Contractual Intrinsic Value (in thousands) Exercise Price Term (years) (in thousands) Outstanding at December 31, 2017 1,808 $ 114.70 7.4 $ 14,648 Granted 712 $ 64.98 - $ - Exercised (188) $ 25.52 - $ - Cancelled/forfeited (227) $ 107.07 - $ - Expired (231) $ 177.76 - $ - Outstanding at December 31, 2018 1,874 $ 97.64 7.5 $ 45,381 Expected to vest 1,000 $ 83.20 8.7 $ 25,703 Exercisable 874 $ 114.17 6.2 $ 19,678 |
Schedule of Share-based Compensation, Restricted Stock Units Award Activity | The following table summarizes the aggr egate RSU, RSA, performance restricted stock unit award (“PRSU”) and performance restricted share award (“ PRSA ”) activity for the year ended December 31, 2018 : Number of Awards (in thousands) Weighted Average Grant Date Fair Value Non-vested awards at December 31, 2017 493 $ 113.60 Granted 612 $ 65.28 Vested (192) $ 124.69 Forfeited (140) $ 91.26 Non-vested awards at December 31, 2018 773 $ 76.10 |
Schedule of Stock Based Compensation Expense | Stock-based compensation expense has been reported in the Company’s statements of operations as follows: Years Ended December 31, 2018 2017 2016 (In thousands) Selling, general and administrative $ 38,361 $ 40,004 $ 32,073 Research and development 11,553 16,964 14,132 Total stock-based compensation $ 49,914 $ 56,968 $ 46,205 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Taxes [Abstract] | |
Schedule of Income before Income Tax, Domestic and Foreign | The components of loss before income taxes for the years ended December 31, 2018, 2017 and 2016 includes the following: Years Ended December 31, 2018 2017 2016 (in thousands) United States $ (72,655) $ (102,586) $ (154,812) Foreign (236,587) (257,781) (258,018) Total $ (309,242) $ (360,367) $ (412,830) |
Schedule of Components of Income Tax Expense (Benefit) | Income tax expense (benefit) differed from the amounts computed by applying the statutory U.S. Federal income tax rate of 21% ( 34% for 2017 and 2016) to loss before income taxes as a result of the following: Years Ended December 31, 2018 2017 2016 (in thousands) Computed "expected" tax benefit $ (64,941) $ (122,525) $ (140,362) State taxes, net of U.S. Federal benefit - - - U.S. Federal rate reduction - 84,787 - U.S. Federal valuation allowance 9,352 282 40,377 Stock-based compensation 6,423 (49,391) 5,161 Officer compensation 22 26 50 Foreign valuation allowance 44,896 52,521 57,759 Foreign tax rate differences 4,787 35,125 37,142 Other (539) (825) (127) Total $ - $ - $ - |
Schedule of Deferred Tax Assets and Liabilities | The tax effects of temporary differences that give rise to the deferred tax assets and liabilities at December 31, 2018 and 2017 are presented below: December 31, 2018 2017 (in thousands) Deferred tax assets: Net operating loss and other carryforwards $ 329,088 $ 276,481 Stock compensation 13,228 14,651 Deferred revenue 620 1,149 Accrued compensation 3,431 3,994 Accrued expense 2,340 1,139 Intellectual property - 1,059 Interest limitation 2,913 - Other 1,021 492 Deferred tax assets before valuation allowance 352,641 298,965 Valuation allowance (338,852) (282,730) Total deferred tax assets 13,789 16,235 Deferred tax liabilities: Convertible Note (13,789) (16,235) Total deferred tax liabilities (13,789) (16,235) Net deferred tax asset (liability) $ - $ - |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases | As of December 31, 2018, minimum contractually-obligated operating lease cash payments under non-cancelable leases, as amended, are as follows: Year Ending December 31, Amount (in thousands) 2019 $ 9,506 2020 8,126 2021 4,841 2022 2,945 2023 2,982 Thereafter 1,531 Total future minimum operating lease payments $ 29,931 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Net Loss Per Common and Potential Common Share: [Abstract] | |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following potentially dilutive securities have been excluded from the computations of diluted weighted average shares outstanding as of December 3 1, 2018, 2017 and 2016, as the inclusion thereof would have been anti-dilutive: December 31, 2018 2017 2016 (in thousands) Convertible Notes 2,316 Options 1,874 1,808 1,553 Restricted stock units 441 493 382 Total 4,631 2,301 1,935 |
Quarterly Financial Data (una_2
Quarterly Financial Data (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Data [Abstract] | |
Schedule of Quarterly Financial Data | The following table summarizes the unaudited quarterly financial data for the years ended December 31, 2018 and 2017: Quarters Ended March 31, June 30, September 30, December 31, Total 2018 (in thousands, except for per share amounts) Revenues $ 35,963 $ 43,575 $ 46,986 $ 53,280 $ 179,804 Operating loss (75,456) (69,777) (58,286) (81,971) (285,490) Net loss (81,590) (75,193) (64,454) (88,005) (309,242) Net loss per common share - basic and diluted $ (3.22) $ (2.58) $ (2.18) $ (2.97) 2017 Revenues $ 21,048 $ 30,887 $ 41,334 $ 37,687 $ 130,956 Operating loss (83,963) (80,509) (66,171) (104,969) (335,612) Net loss (89,930) (86,564) (72,601) (111,272) (360,367) Net loss per common share - basic and diluted $ (3.61) $ (3.46) $ (2.89) $ (4.43) |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Narrative) (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2018USD ($)segment | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Jan. 01, 2019USD ($) | |
Product revenue, net | $ 53,280 | $ 46,986 | $ 43,575 | $ 35,963 | $ 37,687 | $ 41,334 | $ 30,887 | $ 21,048 | $ 179,804 | $ 130,956 | $ 24,951 | |
Accounts receivable, net | 25,694 | 16,501 | $ 25,694 | 16,501 | ||||||||
Allowance for doubtful accounts receivable, current | 0 | 0 | ||||||||||
Property, plant and equipment, depreciation methods | straight-line method | |||||||||||
Fair value assumption method used | Black-Scholes option-pricing | |||||||||||
Deferred revenue, current | 1,621 | 1,782 | $ 1,621 | 1,782 | ||||||||
Expected term (in years) | 6 years | |||||||||||
Number of operating segments | segment | 1 | |||||||||||
Deferred Tax Assets, Other | $ 1,021 | $ 492 | $ 1,021 | 492 | ||||||||
Accounting Standards Update 2016-02 [Member] | Scenario, Forecast [Member] | ||||||||||||
Operating lease liability | $ 25,400 | |||||||||||
Right of use asset | $ 19,600 | |||||||||||
Product [Member] | ||||||||||||
Product revenue, net | $ 177,782 | 129,175 | $ 18,169 | |||||||||
Ocaliva [Member] | ||||||||||||
Reserves related to future returns | 700 | |||||||||||
Ocaliva [Member] | Accounting Standards Update 2014-09 [Member] | Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | ||||||||||||
Product revenue, net | $ 4,100 | |||||||||||
Accounts Receivable [Member] | Customer Concentration Risk One [Member] | ||||||||||||
Concentration risk, percentage | 22.00% | 34.00% | ||||||||||
Accounts Receivable [Member] | Customer Concentration Risk Two [Member] | ||||||||||||
Concentration risk, percentage | 29.00% | 29.00% | ||||||||||
Accounts Receivable [Member] | Customer Concentration Risk Three [Member] | ||||||||||||
Concentration risk, percentage | 6.00% | 12.00% | ||||||||||
Sales Gross [Member] | Customer Concentration Risk One [Member] | ||||||||||||
Concentration risk, percentage | 38.00% | 40.00% | ||||||||||
Sales Gross [Member] | Customer Concentration Risk Two [Member] | ||||||||||||
Concentration risk, percentage | 28.00% | 23.00% | ||||||||||
Sales Gross [Member] | Customer Concentration Risk Three [Member] | ||||||||||||
Concentration risk, percentage | 16.00% | 13.00% | ||||||||||
Leasehold Improvements [Member] | ||||||||||||
Property, plant and equipment, depreciation methods | amortized over the shorter of the asset's useful life or the life of the lease term | |||||||||||
Minimum [Member] | ||||||||||||
Property, plant and equipment, useful life | 3 years | |||||||||||
Maximum [Member] | ||||||||||||
Property, plant and equipment, useful life | 7 years |
Significant Agreements (Narrati
Significant Agreements (Narrative) (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||||
May 31, 2014 | Mar. 31, 2011 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenue | $ 53,280 | $ 46,986 | $ 43,575 | $ 35,963 | $ 37,687 | $ 41,334 | $ 30,887 | $ 21,048 | $ 179,804 | $ 130,956 | $ 24,951 | ||
License [Member] | |||||||||||||
Revenue | 2,022 | 1,781 | 6,782 | ||||||||||
Product [Member] | |||||||||||||
Revenue | 177,782 | 129,175 | 18,169 | ||||||||||
Milestone Payment [Member] | Dainippon Sumitomo Pharma Co Ltd [Member] | |||||||||||||
License arrangement, deferred revenue, recognized | 2,400 | 4,500 | |||||||||||
Nonsoftware License Arrangement [Member] | Dainippon Sumitomo Pharma Co Ltd [Member] | |||||||||||||
Development milestone reached | 6,000 | ||||||||||||
Nonsoftware License Arrangement [Member] | Intellectual Property [Member] | License [Member] | |||||||||||||
Revenue | 2,000 | $ 1,800 | $ 6,800 | ||||||||||
Nonsoftware License Arrangement [Member] | Up-front Payment [Member] | Dainippon Sumitomo Pharma Co Ltd [Member] | |||||||||||||
License agreement payment | $ 15,000 | ||||||||||||
Nonsoftware License Arrangement [Member] | Additional Development Receivable [Member] | Dainippon Sumitomo Pharma Co Ltd [Member] | |||||||||||||
Contingent arrangement receivable amount | $ 23,000 | 23,000 | |||||||||||
Sumitomo Amendment [Member] | |||||||||||||
License arrangement, deferred revenue, recognized | $ 400 | ||||||||||||
Korea [Member] | Nonsoftware License Arrangement [Member] | Up-front Payment [Member] | Dainippon Sumitomo Pharma Co Ltd [Member] | |||||||||||||
License agreement payment | $ 1,000 |
Cash, Cash Equivalents, and I_3
Cash, Cash Equivalents, and Investments (Narrative) (Details) | Dec. 31, 2018security |
Cash, Cash Equivalents, and Investments [Abstract] | |
Number of positions that were in a continuous unrealized loss position for more than twelve months | 24 |
Cash, Cash Equivalents, and I_4
Cash, Cash Equivalents, and Investments (Cash, Cash Equivalents and Investments) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Investments: | ||
Total investments, Amortized Cost | $ 393,617 | $ 345,687 |
Total cash and cash equivalents and investments, Amortized Cost | 436,865 | 415,700 |
Total investments, Gross Unrealized Gains | 32 | |
Total cash and cash equivalents and investments, Gross Unrealized Gains | 32 | |
Total investments, Gross Unrealized Losses | (737) | (783) |
Total cash and cash equivalents and investments, Gross Unrealized Losses | (737) | (783) |
Total investments, Fair Value | 392,912 | 344,904 |
Total cash and cash equivalents and investments, Fair Value | 436,160 | 414,917 |
Commercial Paper [Member] | ||
Investments: | ||
Total investments, Amortized Cost | 34,353 | 2,986 |
Total investments, Gross Unrealized Losses | (26) | (3) |
Total investments, Fair Value | 34,327 | 2,983 |
Corporate Debt Securities [Member] | ||
Investments: | ||
Total investments, Amortized Cost | 349,854 | 333,958 |
Total investments, Gross Unrealized Gains | 27 | |
Total investments, Gross Unrealized Losses | (704) | (752) |
Total investments, Fair Value | 349,177 | 333,206 |
Us Government Agencies Debt Securities [Member] | ||
Investments: | ||
Total investments, Amortized Cost | 9,410 | 8,743 |
Total investments, Gross Unrealized Gains | 5 | |
Total investments, Gross Unrealized Losses | (7) | (28) |
Total investments, Fair Value | 9,408 | 8,715 |
Cash and Money Market Funds [Member] | ||
Cash and cash equivalents: | ||
Cash and Cash Equivalents, Amortized Cost | 43,248 | 70,013 |
Cash and cash equivalents, Fair Value | $ 43,248 | $ 70,013 |
Cash, Cash Equivalents, and I_5
Cash, Cash Equivalents, and Investments (Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Total available for sale securities, Less than 12 months, Fair Value | $ 294,874 | $ 282,159 |
Total available for sale securities Less than 12 months, Gross Unrealized Holding Losses | (469) | (534) |
Total available for sale securities, More than 12 months, Fair Value | 58,617 | 62,745 |
Total available for sale securities more than 12 months, Gross Unrealized Holding Losses | (268) | (249) |
Available-for-sale securities, Total Fair Value | 353,491 | 344,904 |
Available-for-sale securities, Total Gross Unrealized Losses | (737) | (783) |
Commercial Paper [Member] | ||
Total available for sale securities, Less than 12 months, Fair Value | 34,327 | 2,983 |
Total available for sale securities Less than 12 months, Gross Unrealized Holding Losses | (26) | (3) |
Available-for-sale securities, Total Fair Value | 34,327 | 2,983 |
Available-for-sale securities, Total Gross Unrealized Losses | (26) | (3) |
Corporate Debt Securities [Member] | ||
Total available for sale securities, Less than 12 months, Fair Value | 260,547 | 272,453 |
Total available for sale securities Less than 12 months, Gross Unrealized Holding Losses | (443) | (506) |
Total available for sale securities, More than 12 months, Fair Value | 56,626 | 60,753 |
Total available for sale securities more than 12 months, Gross Unrealized Holding Losses | (261) | (246) |
Available-for-sale securities, Total Fair Value | 317,173 | 333,206 |
Available-for-sale securities, Total Gross Unrealized Losses | (704) | (752) |
Us Government Agencies Debt Securities [Member] | ||
Total available for sale securities, Less than 12 months, Fair Value | 6,723 | |
Total available for sale securities Less than 12 months, Gross Unrealized Holding Losses | (25) | |
Total available for sale securities, More than 12 months, Fair Value | 1,991 | 1,992 |
Total available for sale securities more than 12 months, Gross Unrealized Holding Losses | (7) | (3) |
Available-for-sale securities, Total Fair Value | 1,991 | 8,715 |
Available-for-sale securities, Total Gross Unrealized Losses | $ (7) | $ (28) |
Fixed Assets, Net (Narrative) (
Fixed Assets, Net (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Fixed Assets, Net [Abstract] | |||
Depreciation | $ 4,582 | $ 4,601 | $ 3,831 |
Fixed Assets, Net (Fixed Assets
Fixed Assets, Net (Fixed Assets Stated at Cost) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Fixed assets | $ 22,357 | $ 24,970 |
Less: accumulated depreciation | (11,946) | (8,786) |
Fixed assets, net | 10,411 | 16,184 |
Office Equipment [Member] | ||
Fixed assets | $ 3,986 | $ 5,048 |
Property, Plant and Equipment, Useful Life | 3 years | 3 years |
Leasehold Improvements [Member] | ||
Fixed assets | $ 14,464 | $ 14,665 |
Property, Plant and Equipment, Estimated Useful Lives | Over life of lease | |
Furniture and Fixtures [Member] | ||
Fixed assets | $ 3,907 | $ 5,257 |
Property, Plant and Equipment, Useful Life | 7 years | 7 years |
Inventory (Schedule of Inventor
Inventory (Schedule of Inventory) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Inventory, Net [Abstract] | ||
Work-in-process | $ 7,019 | $ 3,249 |
Finished goods | 89 | 231 |
Inventory, net | $ 7,108 | $ 3,480 |
Accounts Payable, Accrued Exp_3
Accounts Payable, Accrued Expenses and Other Liabilities (Schedule of Accounts Payable and Accrued Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Accounts Payable, Accrued Expenses and Other Liabilities [Abstract] | ||
Accounts payable | $ 11,765 | $ 6,965 |
Accrued employee compensation | 20,335 | 27,118 |
Accrued contracted services | 54,681 | 51,154 |
Other liabilities | 18,328 | 9,540 |
Accounts payable, accrued expenses and other liabilities | $ 105,109 | $ 94,777 |
Long-Term Debt (Narrative) (Det
Long-Term Debt (Narrative) (Details) | Jul. 06, 2016USD ($)$ / shares | Dec. 31, 2018USD ($)item | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Jul. 12, 2016 | Jun. 30, 2016$ / shares |
Proceeds from convertible debt | $ 447,573,000 | |||||
Stock-based compensation, PSUs and PSAs | $ 1,000 | |||||
Payments for capped call transactions and associated costs | $ 38,400,000 | 38,364,000 | ||||
Cap price of capped call transaction | $ / shares | $ 262.2725 | |||||
Long-term debt | 371,250,000 | $ 355,677,000 | ||||
Interest expense | 30,523,000 | 29,271,000 | 14,196,000 | |||
Convertible Senior Notes 3.25% [Member] | Convertible Debt [Member] | ||||||
Debt instrument, face amount | 460,000,000 | |||||
Proceeds from convertible debt | 447,600,000 | |||||
Debt instrument, interest rate, stated percentage | 3.25% | |||||
Debt issuance costs | $ 12,400,000 | $ 8,800,000 | 10,300,000 | |||
Debt instrument convertible, percentage of conversion price | 130.00% | |||||
Average percentage of closing sale price of common stock | 98.00% | |||||
Debt instrument, convertible, conversion ratio | 5.0358 | |||||
Debt instrument, convertible, conversion price | $ / shares | $ 198.58 | |||||
Debt instrument, redemption price, percentage | 98.00% | |||||
Percentage of repurchase price is equal to principal amount of convertible notes | 100.00% | |||||
Debt instrument liability component effective interest rate | 8.40% | |||||
Long-term debt | $ 334,400,000 | |||||
Debt instrument, unamortized discount, noncurrent | 113,100,000 | |||||
Interest expense | 30,500,000 | 29,300,000 | $ 14,200,000 | |||
Interest payable, current | 7,500,000 | $ 14,900,000 | ||||
Convertible debt, outstanding | $ 460,000,000 | |||||
Convertible Senior Notes 3.25% [Member] | Convertible Debt [Member] | One Hundred Thirty Percent Applicable Conversion Price [Member] | Minimum [Member] | ||||||
Debt instrument convertible consecutive trading days | item | 20 | |||||
Convertible Senior Notes 3.25% [Member] | Convertible Debt [Member] | One Hundred Thirty Percent Applicable Conversion Price [Member] | Maximum [Member] | ||||||
Debt instrument convertible trading days | item | 30 | |||||
Convertible Senior Notes 3.25% [Member] | Convertible Debt [Member] | Ninety Eight Percent Applicable Conversion Price [Member] | ||||||
Debt instrument convertible consecutive trading days | item | 5 |
Long-Term Debt (Schedule of Lon
Long-Term Debt (Schedule of Long-term Debt Instruments) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Long-Term Debt [Abstract] | ||
Long-term Debt, Total | $ 371,250 | $ 355,677 |
Less current portion | ||
Long-term debt outstanding | $ 371,250 | $ 355,677 |
Product Revenue, Net (Narrative
Product Revenue, Net (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Product revenue, net | $ 53,280 | $ 46,986 | $ 43,575 | $ 35,963 | $ 37,687 | $ 41,334 | $ 30,887 | $ 21,048 | $ 179,804 | $ 130,956 | $ 24,951 |
Product [Member] | |||||||||||
Product revenue, net | $ 177,782 | $ 129,175 | $ 18,169 |
Product Revenue, Net (Schedule
Product Revenue, Net (Schedule of Product Revenue, Net) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | |||||||||||
Product revenue, net | $ 53,280 | $ 46,986 | $ 43,575 | $ 35,963 | $ 37,687 | $ 41,334 | $ 30,887 | $ 21,048 | $ 179,804 | $ 130,956 | $ 24,951 |
United States [Member] | |||||||||||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | |||||||||||
Product revenue, net | 140,822 | 115,807 | 18,169 | ||||||||
Non-US [Member] | |||||||||||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | |||||||||||
Product revenue, net | 36,960 | 13,368 | |||||||||
Product [Member] | |||||||||||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | |||||||||||
Product revenue, net | $ 177,782 | $ 129,175 | $ 18,169 |
Fair Value Measurements (Fair V
Fair Value Measurements (Fair Value, Marketable Securities Measured on Recurring and Nonrecurring Basis) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Available-For-Sale Securities, Fair Value Disclosure | $ 392,912 | $ 344,904 |
Total financial assets | 404,559 | 358,265 |
Money Market Funds [Member] | ||
Cash and cash equivalents, fair value disclosure | 11,647 | 13,361 |
Commercial Paper [Member] | ||
Available-For-Sale Securities, Fair Value Disclosure | 34,327 | 2,983 |
Corporate Debt Securities [Member] | ||
Available-For-Sale Securities, Fair Value Disclosure | 349,177 | 333,206 |
Us Government Agencies Debt Securities [Member] | ||
Available-For-Sale Securities, Fair Value Disclosure | 9,408 | 8,715 |
Fair Value, Inputs, Level 1 [Member] | ||
Total financial assets | 11,647 | 13,361 |
Fair Value, Inputs, Level 1 [Member] | Money Market Funds [Member] | ||
Cash and cash equivalents, fair value disclosure | 11,647 | 13,361 |
Fair Value, Inputs, Level 2 [Member] | ||
Total financial assets | 392,912 | 344,904 |
Fair Value, Inputs, Level 2 [Member] | Commercial Paper [Member] | ||
Available-For-Sale Securities, Fair Value Disclosure | 34,327 | 2,983 |
Fair Value, Inputs, Level 2 [Member] | Corporate Debt Securities [Member] | ||
Available-For-Sale Securities, Fair Value Disclosure | 349,177 | 333,206 |
Fair Value, Inputs, Level 2 [Member] | Us Government Agencies Debt Securities [Member] | ||
Available-For-Sale Securities, Fair Value Disclosure | $ 9,408 | $ 8,715 |
Fair Value Measurements (Schedu
Fair Value Measurements (Schedule of Available For Sale Securities and Debt Maturities) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Value Measurements [Abstract] | ||
Due in one year or less | $ 319,717 | $ 282,159 |
Due after one year through two years | 73,195 | 62,745 |
Total investments in debt securities | $ 392,912 | $ 344,904 |
Stockholders' Equity and Pref_2
Stockholders' Equity and Preferred Stock (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands | Apr. 09, 2018 | Dec. 31, 2018 | Dec. 31, 2017 |
Common stock, authorized | 45,000,000 | 45,000,000 | |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |
Stock issued during period, shares, new issues | 2,695,313 | ||
Shares issued, price per share | $ 64 | ||
Proceeds from issuance of common stock | $ 261,400 | $ 261,362 | |
Issuance cost | $ 11,100 | ||
Preferred stock, authorized | 5,000,000 | 5,000,000 | |
Preferred stock, shares issued | 0 | 0 | |
Private Placement [Member] | |||
Stock issued during period, shares, new issues | 1,562,500 | ||
Under Writers [Member] | |||
Stock issued during period, shares, new issues | 351,563 |
Stock Compensation (Narrative)
Stock Compensation (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Nov. 30, 2014 | Apr. 30, 2014 | Oct. 31, 2012 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Fair value assumption method used | Black-Scholes option-pricing | |||||
Granted - Number of Shares | 712,000 | |||||
Granted - Weighted Average Fair Value | $ 65.28 | |||||
Value of stock options exercised | $ 4,363 | $ 2,838 | $ 5,175 | |||
Share-based compensation not yet recognized, period | 1 year 3 months 7 days | |||||
Granted - Shares | 612,000 | |||||
2003 Stock Incentive Plan [Member] | ||||||
Fair value assumption method used | Black-Scholes option-pricing model | |||||
2012 Stock Plan [Member] | ||||||
Additional shares available | 555,843 | 1,010,693 | 993,558 | |||
Fair value assumption method used | Black-Scholes option-pricing model | |||||
Shares available for grant | 2,200,000 | 1,900,000 | ||||
Stock Options [Member] | ||||||
Weighted-average grant date fair value | $ 41.18 | $ 63.65 | $ 64.80 | |||
Value of stock options exercised | $ 14,100 | $ 9,400 | $ 22,000 | |||
Share-based compensation not yet recognized | $ 38,400 | |||||
Share-based compensation not yet recognized, period | 1 year 2 months 12 days | |||||
Performance Shares [Member] | Employees and Directors [Member] | ||||||
Stock issued during period, shares, share-based compensation, gross | 10,839 | 57,063 | ||||
Restricted Stock Units and Awards [Member] | ||||||
Granted - Weighted Average Fair Value | $ 65.28 | $ 102.35 | $ 117.63 | |||
Vested - aggregate fair value | $ 24,000 | $ 16,700 | $ 12,800 | |||
Performance Stock Units (PSUs) [Member] | ||||||
Granted - Shares | 51,200 | |||||
Performance Stock Awards (PSAs) [Member] | ||||||
Granted - Shares | 4,300 | |||||
Performance Stock Units and Awards [Member] | ||||||
Performance period | 3 years | |||||
Share based compensation expenses | $ 1,300 | |||||
Performance Stock Units and Awards [Member] | Minimum [Member] | ||||||
Payout percentage | 0.00% | |||||
Performance Stock Units and Awards [Member] | Maximum [Member] | ||||||
Payout percentage | 150.00% | |||||
Restricted and Performance Stock Units and Awards [Member] | ||||||
Share-based compensation not yet recognized, other than options | $ 44,500 |
Stock Compensation (Schedule of
Stock Compensation (Schedule of Share Based Compensation Arrangement By Share Based Payment Award Grants in Period Fair Value Assumptions) (Details) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Fair value assumption method used | Black-Scholes option-pricing | ||
Expected term (in years) | 6 years | ||
Stock Options [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Volatility, minimum | 62.00% | 61.00% | 60.00% |
Volatility, maximum | 73.00% | 65.00% | 66.00% |
Risk-free interest rate, minimum | 1.80% | 1.80% | 1.10% |
Risk-free interest rate, maximum | 3.00% | 2.40% | 2.40% |
Expected dividend yield | |||
Stock Options [Member] | Minimum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (in years) | 6 years | 5 years 1 month 6 days | |
Stock Options [Member] | Maximum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (in years) | 9 years 10 months 24 days | 10 years |
Stock Compensation (Schedule _2
Stock Compensation (Schedule of Share Based Compensation Stock Options Activities) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Stock Compensation [Abstract] | ||
Beginning Outstanding, Number of Shares | 1,808 | 1,553 |
Granted - Number of Shares | 712 | |
Exercised - Number of Shares | (188) | |
Forfeited - Number of Shares | (227) | |
Expired - Number of Shares | (231) | |
Ending Outstanding, Number of Shares | 1,874 | 1,808 |
Expected to vest - Number of shares | 1,000 | |
Exercisable - Number of Shares | 874 | |
Beginning Outstanding, Weighted Average Exercise Price | $ 114.70 | |
Granted - Weighted Average Exercise Price | 64.98 | |
Exercised - Weighted Average Exercise Price | 25.52 | |
Forfeited - Weighted Average Exercise Price | 107.07 | |
Expired - Weighted Average Exercise Price | 177.76 | |
Ending Outstanding, Weighted Average Exercise Price | 97.64 | $ 114.70 |
Expected to vest - Weighted Average Exercise Price | 83.20 | |
Exercisable - Weighted Average Exercise Price | $ 114.17 | |
Expected to vest - Weighted Average Remaining Term | 8 years 8 months 12 days | |
Exercisable - Weighted Average Remaining Term | 6 years 2 months 12 days | |
Options Outstanding - Aggregate Intrinsic Value | $ 45,381 | $ 14,648 |
Expected to vest - Aggregate Intrinsic Value | 25,703 | |
Exercisable - Aggregate Intrinsic Value | $ 19,678 | |
Options Outstanding - Weighted Average Remaining Life | 7 years 6 months | 7 years 4 months 24 days |
Stock Compensation (Schedule _3
Stock Compensation (Schedule of Share-based Compensation, Restricted Stock Units and Award Activity) (Details) shares in Thousands | 12 Months Ended |
Dec. 31, 2018$ / sharesshares | |
Stock Compensation [Abstract] | |
Outstanding, December 31, 2017 | shares | 493 |
Granted - Shares | shares | 612 |
Vested - Shares | shares | (192) |
Forfeited - Shares | shares | (140) |
Outstanding, December 31, 2018 | shares | 773 |
Outstanding - Weighted Average Fair Value, December 31, 2017 | $ / shares | $ 113.60 |
Granted - Weighted Average Fair Value | $ / shares | 65.28 |
Vested - Weighted Average Fair Value | $ / shares | 124.69 |
Forfeited - Weighted Average Fair Value | $ / shares | 91.26 |
Outstanding - Weighted Average Fair Value, December 31, 2018 | $ / shares | $ 76.10 |
Stock Compensation (Schedule _4
Stock Compensation (Schedule of Stock Based Compensation Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Allocated stock-based compensation | $ 49,914 | $ 56,968 | $ 46,205 |
Selling, General and Administrative Expenses [Member] | |||
Allocated stock-based compensation | 38,361 | 40,004 | 32,073 |
Research and Development Expense [Member] | |||
Allocated stock-based compensation | $ 11,553 | $ 16,964 | $ 14,132 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Vesting period | 4 years | ||
Employer matching contribution recognized | $ 1,900,000 | $ 2,700,000 | $ 2,300,000 |
Employees Under 50 Years [Member] | |||
Employee maximum contribution | 18,500 | ||
Employees 50 Years Old and Over [Member] | |||
Employee maximum contribution | $ 24,500 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Valuation Allowance [Line Items] | |||
Operating Loss Carryforwards | $ 658.4 | $ 628 | |
Valuation allowance, deferred tax asset, increase (decrease), amount | $ 56.1 | 59.3 | |
Income tax expense (benefit), TCJA | $ 0 | ||
Federal statutory income tax rate | 21.00% | 34.00% | 34.00% |
Net Deferred Tax Asset [Member] | |||
Valuation Allowance [Line Items] | |||
Valuation allowance, deferred tax asset, increase (decrease), amount | $ (82.8) | ||
Domestic Tax Authority [Member] | |||
Valuation Allowance [Line Items] | |||
Valuation allowance, deferred tax asset, increase (decrease), amount | $ 9.4 | 0.3 | |
State and Local Jurisdiction [Member] | |||
Valuation Allowance [Line Items] | |||
Valuation allowance, deferred tax asset, increase (decrease), amount | 1.9 | 6.8 | |
Foreign Tax Authority [Member] | |||
Valuation Allowance [Line Items] | |||
Valuation allowance, deferred tax asset, increase (decrease), amount | $ 44.9 | 52.5 | |
Minimum [Member] | |||
Valuation Allowance [Line Items] | |||
Operating Loss Carryforwards, Expiration Dates | Jan. 1, 2024 | ||
Maximum [Member] | |||
Valuation Allowance [Line Items] | |||
Operating Loss Carryforwards, Expiration Dates | Dec. 31, 2037 | ||
Convertible Debt [Member] | Convertible Senior Notes 3.25% [Member] | |||
Valuation Allowance [Line Items] | |||
Valuation allowance, deferred tax asset, increase (decrease), amount | $ (0.1) | $ 0.3 |
Income Taxes (Schedule of Incom
Income Taxes (Schedule of Income before Income Tax, Domestic and Foreign) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Taxes [Abstract] | |||
United States | $ (72,655) | $ (102,586) | $ (154,812) |
Foreign | (236,587) | (257,781) | (258,018) |
Components of loss before taxes | $ (309,242) | $ (360,367) | $ (412,830) |
Income Taxes (Schedule of Compo
Income Taxes (Schedule of Components of Income Tax Expense (Benefit)) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Taxes [Abstract] | |||
Computed "expected" tax benefit | $ (64,941) | $ (122,525) | $ (140,362) |
State taxes, net of U.S. Federal benefit | |||
U.S. Federal rate reduction | 84,787 | ||
U.S. Federal valuation allowance | 9,352 | 282 | 40,377 |
Stock-based compensation | 6,423 | (49,391) | 5,161 |
Officer compensation | 22 | 26 | 50 |
Foreign valuation allowance | 44,896 | 52,521 | 57,759 |
Foreign tax rate differences | 4,787 | 35,125 | 37,142 |
Other | (539) | (825) | (127) |
Income Tax Expense (Benefit), Total |
Income Taxes (Schedule of Defer
Income Taxes (Schedule of Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets: | ||
Net operating loss and other carryforwards | $ 329,088 | $ 276,481 |
Stock compensation | 13,228 | 14,651 |
Deferred revenue | 620 | 1,149 |
Accrued compensation | 3,431 | 3,994 |
Accrued expense | 2,340 | 1,139 |
Intellectual property | 1,059 | |
Interest limitation | 2,913 | |
Other | 1,021 | 492 |
Deferred tax assets before valuation allowance | 352,641 | 298,965 |
Valuation allowance | (338,852) | (282,730) |
Total deferred tax liabilities | 13,789 | 16,235 |
Deferred tax liabilities: | ||
Convertible Note | (13,789) | (16,235) |
Deferred tax liabilities | (13,789) | (16,235) |
Net deferred tax asset (liability) |
Commitments and Contingencies_2
Commitments and Contingencies (Narrative) (Details) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($)ft² | Dec. 31, 2015USD ($) | Jan. 31, 2016ft² | May 31, 2014ft² | |
Rent expense | $ | $ 9,506 | |||||
Operating leases, rent expense | $ | 6,300 | $ 8,900 | $ 5,500 | $ 5,500 | ||
Purchase obligation | $ | $ 29,800 | |||||
New York [Member] | 10 Building [Member] | ||||||
Area of real estate property | ft² | 41,100 | |||||
California [Member] | ||||||
Area of real estate property | ft² | 47,000 | |||||
United Kingdom [Member] | ||||||
Area of real estate property | ft² | 8,500 |
Commitments and Contingencies_3
Commitments and Contingencies (Schedule of Future Minimum Rental Payments for Operating Leases) (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Commitments and Contingencies [Abstract] | |
2,019 | $ 9,506 |
2,020 | 8,126 |
2,021 | 4,841 |
2,022 | 2,945 |
2,023 | 2,982 |
Thereafter | 1,531 |
Total future minimum operating lease payments | $ 29,931 |
Net Loss Per Share (Schedule of
Net Loss Per Share (Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share) (Details) - shares shares in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Net Loss Per Common and Potential Common Share: [Abstract] | |||
Convertible Notes | 2,316 | ||
Options | 1,874 | 1,808 | 1,553 |
Restricted stock units | 441 | 493 | 382 |
Total | 4,631 | 2,301 | 1,935 |
Quarterly Financial Data (Sched
Quarterly Financial Data (Schedule of Quarterly Financial Information) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Quarterly Financial Data [Abstract] | |||||||||||
Revenue | $ 53,280 | $ 46,986 | $ 43,575 | $ 35,963 | $ 37,687 | $ 41,334 | $ 30,887 | $ 21,048 | $ 179,804 | $ 130,956 | $ 24,951 |
Operating loss | (81,971) | (58,286) | (69,777) | (75,456) | (104,969) | (66,171) | (80,509) | (83,963) | (285,490) | (335,612) | (402,538) |
Net loss | $ (88,005) | $ (64,454) | $ (75,193) | $ (81,590) | $ (111,272) | $ (72,601) | $ (86,564) | $ (89,930) | $ (309,242) | $ (360,367) | $ (412,830) |
Net loss per common share-basic and diluted (in dollars per share) | $ (2.97) | $ (2.18) | $ (2.58) | $ (3.22) | $ (4.43) | $ (2.89) | $ (3.46) | $ (3.61) | $ (10.86) | $ (14.38) | $ (16.74) |
Prior Settlement (Narrative) (D
Prior Settlement (Narrative) (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | |
May 31, 2016 | Dec. 31, 2018 | Dec. 31, 2016 | |
Loss contingency, domicile of litigation | United States District Court for the Southern District of New York | ||
Litigation settlement, amount | $ 55 | ||
Litigation settlement amount via insurance | $ 10 | ||
Scot H. Atwood vs. Intercept Pharmaceuticals Incorporated [Member] | |||
Loss contingency, name of plaintiff | Scot H. Atwood | ||
Loss contingency, name of defendant | Intercept Pharmaceuticals, Inc. | ||
George Burton vs. Intercept Pharmaceuticals Incorporated [Member] | |||
Loss contingency, lawsuit filing date | In February 2014 | ||
Loss contingency, name of plaintiff | George Burton | ||
Loss contingency, name of defendant | Intercept Pharmaceuticals, Inc. | ||
Selling, General and Administrative Expenses [Member] | |||
Litigation settlement, amount | $ 45 |
Restructuring Charges (Narrativ
Restructuring Charges (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | |
Workforce reduction percent | 15.00% | ||
Restructuring charges | $ 5.2 | $ 0 | |
Restructuring charge associated with cash payments | $ 5.2 | ||
Research and Development Expense [Member] | |||
Restructuring charges | 1.3 | ||
Selling, General and Administrative Expenses [Member] | |||
Restructuring charges | $ 3.9 |