Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Feb. 15, 2017 | Jun. 30, 2016 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2016 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | MACK | ||
Entity Registrant Name | MERRIMACK PHARMACEUTICALS INC | ||
Entity Central Index Key | 1,274,792 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 130,570,161 | ||
Entity Public Float | $ 657,498,088 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 21,524 | $ 185,606 |
Restricted cash | 102 | 101 |
Accounts receivable, net | 17,469 | 6,483 |
Inventory | 14,554 | 3,717 |
Prepaid expenses and other current assets | 3,786 | 5,487 |
Total current assets | 57,435 | 201,394 |
Restricted cash | 674 | 584 |
Property and equipment, net | 15,765 | 21,915 |
Other assets | 27 | 27 |
Intangible assets, net | 3,977 | 7,355 |
Goodwill | 3,605 | 3,605 |
Total assets | 81,483 | 234,880 |
Current liabilities: | ||
Accounts payable, accrued expenses and other | 49,982 | 52,082 |
Deferred revenues | 36,226 | 50,137 |
Deferred rent | 2,014 | 1,527 |
Total current liabilities | 88,222 | 103,746 |
Deferred revenues, net of current portion | 25,673 | 51,197 |
Deferred rent, net of current portion | 3,386 | 4,926 |
Deferred tax incentives, net of current portion | 1,045 | |
Long-term debt, net of current portion | 216,861 | 257,655 |
Total liabilities | 334,142 | 418,569 |
Commitments and contingencies | ||
Non-controlling interest | (1,539) | 239 |
Stockholders’ deficit: | ||
Preferred stock, $0.01 par value: 10,000 shares authorized at December 31, 2016 and 2015; no shares issued or outstanding at December 31, 2016 or 2015 | ||
Common stock, $0.01 par value: 200,000 shares authorized at December 31, 2016 and 2015, 130,197 and 115,871 issued and outstanding at December 31, 2016 and 2015, respectively | 1,302 | 1,159 |
Additional paid-in capital | 702,377 | 617,145 |
Accumulated deficit | (954,799) | (802,232) |
Total stockholders’ deficit | (251,120) | (183,928) |
Total liabilities, non-controlling interest and stockholders’ deficit | $ 81,483 | $ 234,880 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
Statement Of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 130,197,000 | 115,871,000 |
Common stock, shares outstanding | 130,197,000 | 115,871,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenues: | |||
Product revenues, net | $ 53,064 | $ 4,328 | |
License and collaboration revenues | 87,119 | 84,930 | $ 102,756 |
Other revenues | 4,090 | ||
Total revenues | 144,273 | 89,258 | 102,756 |
Costs and expenses: | |||
Cost of revenues | 6,912 | 46 | |
Research and development expenses | 160,917 | 160,988 | 138,495 |
Selling, general and administrative expenses | 80,729 | 57,795 | 30,517 |
Restructuring expenses | 5,856 | ||
Total costs and expenses | 254,414 | 218,829 | 169,012 |
Loss from operations | (110,141) | (129,571) | (66,256) |
Other income and expenses: | |||
Interest income | 276 | 99 | 114 |
Interest expense | (43,645) | (19,232) | (18,230) |
Other (expense) income, net | (8) | 917 | 813 |
Net loss | (153,518) | (147,787) | (83,559) |
Net (loss) income attributable to non-controlling interest | (1,778) | 170 | (268) |
Net loss attributable to Merrimack Pharmaceuticals, Inc. | (151,740) | (147,957) | (83,291) |
Other comprehensive income (loss): | |||
Unrealized gain (loss) on available-for-sale securities | 74 | (50) | |
Other comprehensive income (loss) | 74 | (50) | |
Comprehensive loss | $ (151,740) | $ (147,883) | $ (83,341) |
Net loss per share available to common stockholders—basic and diluted | $ (1.21) | $ (1.33) | $ (0.80) |
Weighted-average common shares used in computing net loss per share available to common stockholders—basic and diluted | 125,334 | 111,356 | 104,410 |
Consolidated Statements of Non-
Consolidated Statements of Non-Controlling Interest and Stockholders' Deficit - USD ($) shares in Thousands, $ in Thousands | Total | Silver Creek Series B Preferred Stock [Member] | Silver Creek Series C Preferred Stock [Member] | Convertible Notes [Member] | Silver Creek [Member] | Silver Creek [Member]Silver Creek Series B Preferred Stock [Member] | Silver Creek [Member]Silver Creek Series C Preferred Stock [Member] | Non-Controlling Interest [Member] | Non-Controlling Interest [Member]Silver Creek Series B Preferred Stock [Member] | Non-Controlling Interest [Member]Silver Creek Series C Preferred Stock [Member] | Non-Controlling Interest [Member]Silver Creek [Member] | Common Stock [Member] | Common Stock [Member]Convertible Notes [Member] | Additional Paid-In Capital [Member] | Additional Paid-In Capital [Member]Silver Creek Series B Preferred Stock [Member] | Additional Paid-In Capital [Member]Silver Creek Series C Preferred Stock [Member] | Additional Paid-In Capital [Member]Convertible Notes [Member] | Additional Paid-In Capital [Member]Silver Creek [Member] | Accumulated Other Comprehensive Loss [Member] | Accumulated Deficit [Member] |
Balance at Dec. 31, 2013 | $ (43,465) | $ 337 | $ 1,025 | $ 527,779 | $ (24) | $ (572,245) | ||||||||||||||
Balance (in shares) at Dec. 31, 2013 | 102,523 | |||||||||||||||||||
Exercise of stock options and common stock warrants | 10,425 | $ 42 | 10,383 | |||||||||||||||||
Exercise of stock options and common stock warrants (shares) | 4,174 | |||||||||||||||||||
Issuance of stock due to conversion of convertible notes | $ 678 | $ 366 | $ 678 | |||||||||||||||||
Issuance of preferred stock by Silver Creek Pharmaceuticals, Inc. | $ 400 | |||||||||||||||||||
Stock-based compensation | 13,197 | 13,197 | ||||||||||||||||||
Other comprehensive income (loss) | (50) | (50) | ||||||||||||||||||
Loss attributable to non-controlling interest | 634 | (634) | 634 | |||||||||||||||||
Net loss | (83,559) | (83,559) | ||||||||||||||||||
Balance at Dec. 31, 2014 | (102,140) | 69 | $ 1,067 | 552,037 | (74) | (655,170) | ||||||||||||||
Balance (in shares) at Dec. 31, 2014 | 106,697 | |||||||||||||||||||
Exercise of stock options and common stock warrants | 10,101 | $ 54 | 10,047 | |||||||||||||||||
Exercise of stock options and common stock warrants (shares) | 5,360 | |||||||||||||||||||
Issuance of common stock in at the market offering, net of issuance costs | 38,560 | $ 38 | 38,522 | |||||||||||||||||
Issuance of common stock in at the market offering, net of issuance costs (shares) | 3,814 | |||||||||||||||||||
Issuance of preferred stock by Silver Creek Pharmaceuticals, Inc. | $ 1,188 | $ 900 | $ 895 | $ 1,188 | ||||||||||||||||
Stock-based compensation | 15,351 | 15,351 | ||||||||||||||||||
Other comprehensive income (loss) | 74 | $ 74 | ||||||||||||||||||
Loss attributable to non-controlling interest | 725 | (725) | 725 | |||||||||||||||||
Net loss | (147,787) | (147,787) | ||||||||||||||||||
Balance at Dec. 31, 2015 | (183,928) | 239 | $ 1,159 | 617,145 | (802,232) | |||||||||||||||
Balance (in shares) at Dec. 31, 2015 | 115,871 | |||||||||||||||||||
Exercise of stock options | $ 6,442 | $ 20 | 6,422 | |||||||||||||||||
Exercise of stock options (shares) | 1,958 | 1,958 | ||||||||||||||||||
Issuance of stock due to conversion of convertible notes | $ 100,961 | $ 123 | $ 100,838 | |||||||||||||||||
Issuance of stock due to conversion of convertible notes (shares) | 12,368 | |||||||||||||||||||
Consideration allocated to reacquisition of conversion feature of convertible notes due 2020 | $ (39,923) | (39,923) | ||||||||||||||||||
Issuance of preferred stock by Silver Creek Pharmaceuticals, Inc. | $ 2,689 | $ (800) | $ (827) | $ 2,689 | ||||||||||||||||
Stock-based compensation | 15,206 | 15,206 | ||||||||||||||||||
Loss attributable to non-controlling interest | 951 | (951) | 951 | |||||||||||||||||
Net loss | (153,518) | (153,518) | ||||||||||||||||||
Balance at Dec. 31, 2016 | $ (251,120) | $ (1,539) | $ 1,302 | $ 702,377 | $ (954,799) | |||||||||||||||
Balance (in shares) at Dec. 31, 2016 | 130,197 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cash flows from operating activities | |||
Net loss | $ (153,518) | $ (147,787) | $ (83,559) |
Adjustments to reconcile net loss to net cash used in operating activities | |||
Non-cash interest expense | 6,004 | 8,217 | 8,511 |
Non-cash loss on extinguishment of convertible notes due 2020 | 14,566 | ||
Loss on disposal of property and equipment | 493 | 4 | |
Gain on sale of property and equipment | (40) | ||
Impairment of in-process research and development intangible asset | 2,800 | ||
Depreciation and amortization expense | 6,249 | 4,288 | 3,223 |
Stock-based compensation expense | 14,865 | 15,351 | 13,197 |
Purchased premiums and interest on marketable securities | 858 | ||
Changes in operating assets and liabilities: | |||
Accounts receivable | (10,986) | (3,170) | 2,587 |
Prepaid expenses and other current assets | 1,910 | (850) | 827 |
Inventory | (9,688) | (3,717) | |
Accounts payable, accrued expenses and other | (3,869) | 13,557 | (646) |
Deferred revenues | (39,435) | 6,377 | 19,482 |
Deferred rent and tax incentives | 408 | 2,374 | 712 |
Net cash used in operating activities | (170,241) | (105,356) | (34,808) |
Cash flows from investing activities | |||
Purchase of marketable securities | (84,262) | (111,832) | |
Proceeds from sales and maturities of marketable securities | 84,160 | 87,899 | 111,858 |
Purchase of property and equipment | (3,155) | (12,789) | (6,035) |
Other investing activities, net | (2) | ||
Net cash (used in) provided by investing activities | (3,257) | 75,110 | (6,011) |
Cash flows from financing activities | |||
Proceeds from exercise of options and warrants to purchase common stock | 6,224 | 10,087 | 10,384 |
Proceeds from issuance of convertible promissory notes by Silver Creek Pharmaceuticals, Inc. | 1,044 | ||
Proceeds from at the market offering, net of issuance costs | 38,560 | ||
Proceeds from issuance of senior secured notes due 2022, net of issuance costs | 169,434 | ||
Proceeds from issuance of preferred stock by Silver Creek Pharmaceuticals, Inc. | 3,361 | 2,083 | |
Repayment of loans payable to Hercules Technology Growth Capital, Inc. | (40,000) | ||
Other financing activities, net | (169) | (7) | |
Net cash provided by financing activities | 9,416 | 180,164 | 11,421 |
Net (decrease) increase in cash and cash equivalents | (164,082) | 149,918 | (29,398) |
Cash and cash equivalents, beginning of period | 185,606 | 35,688 | 65,086 |
Cash and cash equivalents, end of period | 21,524 | 185,606 | 35,688 |
Non-cash investing and financing activities | |||
Purchases of property and equipment in accounts payable, accrued expenses and other | 130 | 816 | 704 |
Receivables related to stock option exercises in prepaid expenses and other current assets | 232 | 14 | |
Receivables related to the sale of property and equipment in prepaid expenses and other current assets | 40 | ||
Principal amount of convertible notes | 64,209 | ||
Supplemental disclosure of cash flows | |||
Cash paid for interest | 23,914 | 10,087 | 9,510 |
Silver Creek [Member] | |||
Cash flows from financing activities | |||
Cash and cash equivalents, beginning of period | 700 | ||
Cash and cash equivalents, end of period | $ 1,900 | $ 700 | |
Silver Creek [Member] | Series A Preferred Stock [Member] | |||
Non-cash investing and financing activities | |||
Principal amount of convertible notes | $ 1,044 |
Nature of the Business and Summ
Nature of the Business and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Nature of the Business and Summary of Significant Accounting Policies | 1. Nature of the Business and Summary of Significant Accounting Policies Nature of the Business Merrimack Pharmaceuticals, Inc. (the “Company”) is a biopharmaceutical company discovering, developing and commercializing innovative medicines consisting of novel therapeutics paired with diagnostics for the treatment of cancer. The Company has one marketed therapeutic oncology product and multiple targeted therapeutic oncology candidates in clinical development. The Company’s most advanced program is its therapeutic ONIVYDE ® The Company is subject to risks and uncertainties common to companies in the biopharmaceutical industry, including, among other things, its ability to secure additional capital to fund operations, success of clinical trials, development by competitors of new technological innovations, dependence on collaborative arrangements, protection of proprietary technology, compliance with government regulations and dependence on key personnel. Product candidates currently under development will require significant additional research and development efforts, including extensive preclinical and clinical testing and regulatory approval prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel, infrastructure and extensive compliance reporting capabilities. The Company has incurred significant expenses and operating losses to date, and it expects to continue to incur significant expenses and operating losses for at least the next several years. The accompanying consolidated financial statements have been prepared on a basis which assumes that the Company will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and commitments in the normal course of business. The Company performed an evaluation of its ability to continue as a going concern within one year after the date that the consolidated financial statements are issued, as described more fully in Note 22, “Going Concern.” The Company may seek additional funding through public or private debt or equity financings, through existing or new collaboration arrangements, or through divestitures of its assets. The Company may not be able to obtain financing on acceptable terms, or at all, and the Company may not be able to enter into additional collaborative arrangements or divest its assets. The terms of any financing may adversely affect the holdings or the rights of the Company’s stockholders. Arrangements with collaborators or others may require the Company to relinquish rights to certain of its technologies or product candidates. If the Company is unable to obtain funding, the Company could be forced to delay, reduce or eliminate its research and development programs or commercialization efforts, which could adversely affect its business prospects. On January 7, 2017, the Company entered into an Asset Purchase and Sale Agreement (the “Asset Sale Agreement”) with Ipsen S.A. (“Ipsen”). Pursuant to the Asset Sale Agreement, Ipsen will acquire the Company’s right, title and interest in the non-cash assets, equipment, inventory, contracts and intellectual property primarily related to or used in the Company’s business operations and activities involving or relating to developing, manufacturing and commercializing ONIVYDE and MM-436 (the “Commercial Business”). This transaction is described more fully in Note 23, “Subsequent Events.” Summary of Significant Accounting Policies Segment Information Operating segments are defined as components of an enterprise engaging in business activities for which discrete financial information is available and regularly reviewed by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business as one operating segment and the Company operates in only one geographic region. Basis of Presentation and Consolidation The accompanying consolidated financial statements have been prepared under U.S. generally accepted accounting principles (“GAAP”) and include the accounts of the Company and its wholly owned subsidiary, Merrimack Pharmaceuticals (Bermuda) Ltd., which was merged with and into the Company during the third quarter of 2014. The Company also consolidates its majority owned subsidiary, Silver Creek Pharmaceuticals, Inc. (“Silver Creek”). All intercompany transactions and balances have been eliminated in consolidation. Use of Estimates GAAP requires the Company’s management to make estimates and judgments that may affect the reported amounts of assets, liabilities, revenues, expenses and related disclosures. The Company bases estimates and judgments on historical experience and on various other factors that it believes to be reasonable under the circumstances. The most significant estimates in these consolidated financial statements include, but may not be limited to, revenue recognition, including the estimated percentage of billable expenses in any particular budget period, periods of meaningful use of licensed products, estimated service periods and services to be completed under a collaboration, estimates used in accounting for revenue separability and recognition, estimates of discounts and allowances related to commercial sales of ONIVYDE, estimates utilized in the valuation of inventory, useful lives with respect to long-lived assets and intangible assets, accounting for stock-based compensation, contingencies, intangible assets, goodwill, in-process research and development (“IPR&D”), tax valuation reserves and accrued expenses. The Company’s actual results may differ from these estimates under different assumptions or conditions. The Company evaluates its estimates on an ongoing basis. Changes in estimates are reflected in reported results in the period in which they become known by the Company’s management. Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents are short-term, highly liquid investments with original maturities of three months or less at the date of purchase. Investments qualifying as cash equivalents primarily consist of money market funds, commercial paper, corporate notes and bonds and certificates of deposit. Cash accounts with any type of restriction are classified as restricted cash. If restrictions are expected to be lifted in the next twelve months, the restricted cash account is classified as current. As of December 31, 2016 and 2015, the Company recorded restricted cash of $0.8 million and $0.7 million, respectively, which was primarily related to the Company’s facility lease. Marketable Securities The Company classifies marketable securities with a remaining maturity when purchased of greater than three months as available-for-sale. Available-for-sale securities may consist of U.S. government agencies securities, commercial paper, corporate notes and bonds and certificates of deposit, which are maintained by an investment manager. Available-for-sale securities are carried at fair value, with the unrealized gains and losses included in other comprehensive income (loss) as a component of stockholders’ deficit until realized. To determine whether an other-than-temporary impairment exists, the Company performs an analysis to assess whether it intends to sell, or whether it would more likely than not be required to sell, the security before the expected recovery of the amortized cost basis. Where the Company intends to sell a security, or may be required to do so, the security’s decline in fair value is deemed to be other-than-temporary and the full amount of the unrealized loss is recognized on the statement of operations and comprehensive loss as an other-than-temporary impairment charge. When this is not the case, the Company performs additional analysis on all securities with unrealized losses to evaluate losses associated with the creditworthiness of the security. Credit losses are identified where the Company does not expect to receive cash flows, based on using a single best estimate, sufficient to recover the amortized cost basis of a security and amount of the loss recognized in other income (expense). Realized gains and losses are recognized in interest income. Any premium or discount arising at purchase is amortized and/or accreted to interest income. Inventory The Company values its inventories at the lower of cost or net realizable value. The Company determines the cost of its inventories, which includes amounts related to materials and manufacturing overhead, on a first-in, first-out basis. The Company performs an assessment of the recoverability of capitalized inventory during each reporting period, and it writes down any excess and obsolete inventories to their realizable value in the period in which the impairment is first identified. Such impairment charges, should they occur, are recorded as a component of “Cost of revenues.” The Company capitalizes inventory costs associated with the Company’s products after regulatory approval when, based on management’s judgment, future commercialization is considered probable and the future economic benefit is expected to be realized. Inventory acquired prior to receipt of marketing approval of a product candidate is expensed as research and development expense as incurred. Inventory that can be used in either the production of clinical or commercial product is expensed as research and development expense when selected for use in a clinical manufacturing campaign. Shipping and handling costs for product shipments are recorded as incurred as a component of “Cost of revenues” along with amortization expense related to definite-lived intangible assets, costs associated with manufacturing the product and any inventory reserves or write-downs. Property and Equipment Property and equipment, including leasehold improvements, are recorded at cost and depreciated when placed into service using the straight-line method, based on their estimated useful lives as follows: Asset Classification Estimated Useful Life (in years) Lab equipment 3 - 7 IT equipment 3 - 7 Leaseholds improvements Lesser of useful life or lease term Furniture and fixtures 3 - 7 Costs for capital assets not yet placed into service have been capitalized as construction-in-progress and will be depreciated in accordance with the above guidelines once placed into service. Costs for repairs and maintenance are expensed as incurred, while major betterments are capitalized. The Company capitalizes interest cost incurred on funds used to construct property and equipment. The capitalized interest is recorded as part of the asset to which it relates and is depreciated over the asset’s estimated useful life. Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in earnings. The Company reviews its long-lived assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate. Each impairment test is based on a comparison of the undiscounted cash flow to the recorded value of the asset. If impairment is indicated, the asset will be written down to its estimated fair value on a discounted cash flow basis. Goodwill and Intangible Assets Goodwill and indefinite-lived intangible assets, including IPR&D assets, are evaluated for impairment on an annual basis or more frequently if an indicator of impairment is present. The Company performs its annual goodwill and IPR&D impairment evaluations on August 31 st When performing an evaluation of goodwill impairment, the Company has the option to first assess qualitative factors to determine whether it is necessary to perform the quantitative two-step impairment test. If the Company elects this option and finds, as a result of the qualitative assessment, that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, the quantitative two-step impairment test is required; otherwise, further testing is not required. This requires the Company to assess the impact of significant events, milestones and changes to expectations and activities that may have occurred since the last impairment evaluation. Significant changes to these estimates, judgments and assumptions could materially change the outcome of the impairment assessment. Alternatively, the Company may elect to not first assess qualitative factors and immediately perform the quantitative two-step impairment test. If such an election occurs, in the first step, the fair value of the Company’s reporting unit is compared to the carrying value. If the carrying value of the net assets assigned to the reporting unit exceeds the fair value of the reporting unit, then the second step of the impairment test is performed in order to determine the implied fair value of the reporting unit’s goodwill. If the carrying value of the reporting unit’s goodwill exceeds the implied fair value, then the Company would record an impairment loss equal to the difference. As described above, the Company operates in one operating segment, which is considered the only reporting unit. The Company commences amortization of indefinite-lived intangible assets, such as IPR&D, once the associated research and development efforts have been completed. The Company amortizes these product-related intangible assets over their estimated useful lives, and amortization expense is recorded as a component of “Cost of revenues.” The Company amortizes other definite-lived assets, such as core technology, over their estimated useful lives as a component of “Research and development expenses.” Definite-lived intangible assets are evaluated for impairment whenever events or circumstances indicate that the carrying value may not be fully recoverable. Accrued Expenses As part of the process of preparing financial statements, the Company is required to estimate accrued expenses. This process involves identifying services that have been performed on the Company’s behalf and estimating the level of services performed and the associated costs incurred for such services where the Company has not yet been invoiced or otherwise notified of actual cost. The Company records these estimates in its consolidated financial statements as of each balance sheet date. Examples of estimated accrued expenses include: • fees due to contract research organizations in connection with preclinical and toxicology studies and clinical trials; • fees paid to investigative sites in connection with clinical trials; and • professional service fees. In accruing service fees, the Company estimates the time period over which services will be provided and the level of effort in each period. If the actual timing of the provision of services or the level of effort varies from the estimate, the Company adjusts the accrual accordingly. In the event that the Company does not identify costs that have been incurred or it under or overestimates the level of services performed or the costs of such services, its actual expenses could differ from such estimates. The date on which some services commence, the level of services performed on or before a given date and the cost of such services are often subjective determinations. The Company prepares its estimates based on the facts and circumstances known to it at the time and in accordance with GAAP. There have been no material changes in estimates for the periods presented. Non-Controlling Interest Non-controlling interest represents the non-controlling stockholders’ proportionate share of preferred stock and net loss of the Company’s majority owned consolidated subsidiary, Silver Creek. The non-controlling stockholders’ proportionate share of the preferred stock in Silver Creek is reflected as non-controlling interest in the Company’s consolidated balance sheets as a component of mezzanine equity. Revenue Recognition The Company recognizes revenue when all of the following criteria are met: persuasive evidence of an arrangement exists; delivery has occurred or services have been rendered; the price to the customer is fixed or determinable; and collectability is reasonably assured. Product Revenues, Net The Company sells ONIVYDE to a limited number of specialty pharmaceutical distributors in the United States (collectively, its “Distributors”). The Company’s Distributors subsequently resell the products to healthcare providers. The Company recognizes revenue on product sales when title and risk of loss have passed to the Distributor, which is typically upon delivery. Product revenues are recorded net of applicable reserves for discounts and allowances. In order to conclude that the price is fixed or determinable, the Company must be able to reasonably estimate its net product revenues upon delivery to its Distributors. As such, the Company estimates its net product revenues by deducting from its gross product revenues trade allowances, estimated contractual discounts, estimated Medicaid rebates, estimated reserves for product returns and estimated costs of other incentives offered to patients. These discounts and allowances are based on estimates of the amounts earned or to be claimed on the related sales. The Company’s estimates take into consideration its historical experience, current contractual and statutory requirements, specific known market events and trends, industry data and forecasted Distributor buying and payment patterns. Actual amounts may ultimately differ from the Company’s estimates. If actual results vary, the Company will adjust these estimates, which could have an effect on earnings in the period of adjustment. Product revenue reserves and allowances that reduce gross revenue are categorized as follows: Trade Allowances: The Company pays fees to its Distributors for providing certain data to the Company as well as for maintaining contractual inventory and service levels. These trade allowances are recorded as a reduction to accounts receivable on the consolidated balance sheet at the time revenue is recognized. Rebates and Chargeback Discounts: The Company is subject to discount obligations under state Medicaid programs and the Public Health Service 340B Drug Pricing Program, contracts with Federal government entities purchasing via the Federal Supply Schedule and various private organizations, such as group purchasing organizations (collectively, its “Third-party Payors”). The Company estimates the rebates and chargeback discounts it will provide to Third-party Payors, based upon its estimated payor mix, and deducts these estimated amounts from its gross product revenues at the time revenue is recognized. Chargeback discounts are processed when the Third-party Payor purchases the product at a discount from the Distributor, who then in turn charges back to the Company the difference between the price initially paid by the Distributor and the discounted price paid by the Third-party Payor. These chargeback discounts are recorded as a reduction to accounts receivable on the consolidated balance sheet at the time revenue is recognized. Rebates that are invoiced directly to the Company are recorded as accrued liabilities on the consolidated balance sheet at the time revenue is recognized. Product Returns: An allowance for product returns is established for returns expected to be made by Distributors and is recorded at the time revenue is recognized, resulting in a reduction to product sales. In accordance with contractual terms, Distributors have the right to return unopened and undamaged product that is within a permissible number of months before and after the product’s expiration date, subject to contractual limitations. The Company has the ability to monitor inventory levels and the shelf life of product at Distributors and can contractually control the amount of inventory that is sold to Distributors. Based on inventory levels held by Distributors and the structure of the Company’s distribution model, the Company has concluded that it has the ability to reasonably estimate product returns at the time revenue is recognized. The Company’s estimated rate of return is based on historical rates of return for comparable oncology products. Other Incentives: The Company offers co-pay mitigation support to commercially insured patients. The Company’s co-pay mitigation program is intended to reduce each participating patient’s portion of the financial responsibility for a product’s purchase price to a specified dollar amount. Based upon the terms of the Company’s co-pay mitigation program, the Company estimates average co-pay mitigation amounts in order to establish a reserve for co-pay mitigation claims and deducts these estimated amounts from its gross product revenues at the later of the date that (i) the revenues are recognized or (ii) the incentive is offered. Claims under the Company’s co-pay mitigation program are subject to expiration. License and Collaboration Revenues The Company enters into biopharmaceutical product development agreements with collaborative partners for the research and development of therapeutic and diagnostic products. The terms of the agreements may include nonrefundable signing and licensing fees, funding for research, development and manufacturing, milestone payments and royalties or profit-sharing on any product sales derived from collaborations. These multiple-element arrangements are analyzed to determine whether the deliverables can be separated or whether they must be accounted for as a single unit of accounting. The revenue recognition guidance related to multiple-element arrangements requires entities to separate and allocate consideration in a multiple-element arrangement according to the relative selling price of each deliverable. The fair value of deliverables under the arrangement may be derived using a best estimate of selling price if vendor specific objective evidence and third-party evidence are not available. Deliverables under the arrangement will be separate units of accounting provided that a delivered item has value to the customer on a stand-alone basis and if the arrangement does not include a general right of return relative to the delivered item and delivery or performance of the undelivered item is considered probable and substantially in the control of the vendor. In September 2014, the Company entered into a license and collaboration agreement (the “Baxalta Agreement”) with Baxter International Inc., Baxter Healthcare Corporation and Baxter Healthcare SA (collectively, “Baxter”) for the development and commercialization of ONIVYDE outside of the United States and Taiwan (the “Licensed Territory”). In connection with Baxter International Inc.’s separation of the Baxalta business, the Baxalta Agreement was assigned to Baxalta Incorporated, Baxalta US Inc. and Baxalta GmbH (collectively, “Baxalta”) during the second quarter of 2015. The Baxalta Agreement was evaluated under the accounting guidance on revenue recognition for multiple-element arrangements. The Company determined that the obligations under this agreement represent a single unit of accounting and that the agreement represents a services agreement. As a result, the Company has estimated the level of effort expected to be completed as a result of providing the identified deliverables and will recognize revenue related to the agreement based on proportional performance as effort is completed over the expected services period. The Company also entered into a collaboration agreement with Watson Laboratories, Inc. (“Actavis”) in November 2013, which was evaluated under the accounting guidance on revenue recognition for multiple-element arrangements. See Note 4, “License and Collaboration Agreements,” for additional information. Whenever the Company determines that an arrangement should be accounted for as a single unit of accounting, it determines the period over which the performance obligations would be performed and revenue would be recognized. If the Company cannot reasonably estimate the timing and the level of effort to complete its performance obligations under the arrangement, then revenue under the arrangement is recognized on a straight-line basis over the period the Company expects to complete its performance obligations. The Company’s collaboration agreements may include additional payments upon the achievement of performance-based milestones. As milestones are achieved, a portion of the milestone payment, equal to the percentage of the total time that the Company has performed the performance obligations to date divided by the total estimated time to complete the performance obligations, multiplied by the amount of the milestone payment, will be recognized as revenue upon achievement of such milestone. The remaining portion of the milestone will be recognized over the remaining performance period. Milestones that are tied to regulatory approvals are not considered probable of being achieved until such approval is received. Milestones tied to counterparty performance are not included in the Company’s revenue model until the performance conditions are met. Other Revenues The Company is a party to separate commercial supply agreements with Baxalta and PharmaEngine, Inc. (“PharmaEngine”) pursuant to which the Company supplies ONIVYDE to these entities. Revenue is recognized under these commercial supply arrangements when the counterparty takes delivery of the commercial supply product and when the other general revenue recognition criteria outlined above are met. The Company is also eligible to receive royalty revenues on Baxalta’s net sales of ONIVYDE in the Licensed Territory. The Company recognizes royalty revenues in the period that the related sales occur. Research and Development Expenses Research and development expenses are charged to expense as incurred. Research and development expenses are comprised of costs incurred in performing research and development activities, including personnel-related costs, stock-based compensation, facilities, research-related overhead, clinical trial costs, contracted services, research-related manufacturing, license fees and other external costs. The Company accounts for nonrefundable advance payments for goods and services that will be used in future research and development activities as expenses when the services have been performed or when the goods have been received rather than when the payment is made. Selling, General and Administrative Expenses Selling, general and administrative expenses are comprised of salaries and other related costs for personnel, including stock-based compensation expenses and benefits, in the Company’s commercial, legal, intellectual property, business development, finance, information technology, corporate communications, investor relations and human resources departments. Other selling, general and administrative expenses include costs to support commercial sales, employee training and development, board of directors costs, depreciation, insurance expenses, facility-related costs not otherwise included in research and development expenses, professional fees for legal services, including patent-related expenses, and accounting and information technology services. In connection with the commercial launch of ONIVYDE on October 26, 2015, the Company began incurring advertising expenses. Advertising expenses are expensed as incurred as a component of selling, general and administrative expenses. For the years ended December 31, 2016 and 2015, advertising expenses totaled $4.5 million and $1.0 million, respectively. Stock-Based Compensation Expense The Company accounts for its stock-based compensation awards in accordance with Accounting Standards Codification (“ASC”) 718, Compensation – Stock Compensation The Company records stock options issued to non-employees at fair value, remeasures to reflect the current fair value at each reporting period and recognizes expense over the related service period. When applicable, these equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. Comprehensive Loss Comprehensive loss consists of net loss and unrealized gains and losses on available-for-sale marketable securities. Other (Expense) Income, Net The Company records income related to tax incentive awards, foreign currency gains and losses and other income or expense-related items as components of “Other (expense) income, net” within the consolidated statements of operations and comprehensive loss. The Company has been awarded tax incentives by the Massachusetts Life Sciences Center (“MLSC”), an independent agency of the Commonwealth of Massachusetts. These tax incentives require that the Company achieve certain hiring targets. Failure to maintain the additional headcount in subsequent periods could require the Company to repay some or all of the incentives. The Company recognizes the benefit of these incentives on a straight-line basis over the five-year performance period of each award, beginning when the Company achieves the hiring goal target, with a cumulative catch-up recognized in the period that the hiring goal target is achieved. The Company received MLSC tax incentives in 2011, 2013, 2014 and 2015 totaling $3.8 million in the aggregate, allowing the Company to monetize approximately $3.4 million of state research and development tax credits. As a result of the October 2016 corporate restructuring described more fully in Note 13, “Restructuring Activities,” the Company determined that it would be required to repay a portion of the 2014 and 2015 tax incentives received from the MLSC in the aggregate amount of $1.3 million. Such amounts have been classified as current liabilities as of December 31, 2016. The Company recognized $0.1 million, $0.7 million and $0.4 million in income related to these MLSC tax incentives during the years ended December 31, 2016, 2015 and 2014, respectively. Income Taxes The Company accounts for income taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted rates in effect for the year in which these temporary differences are expected to be recovered or settled. Valuation allowances are provided if based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company provides reserves for potential payments of tax to various tax authorities related to uncertain tax positions and other issues. Reserves are based on a determination of whether and how much of a tax benefit taken by the Company in its tax filing is more likely than not to be realized following resolution of any potential contingencies present related to the tax benefit. Potential interest and penalties associated with such uncertain tax positions are recorded as components of income tax expense. To date, the Company has not taken any uncertain tax positions or recorded any reserves, interest or penalties. Concentration of Credit Risk Financial instruments that subject the Company to credit risk consist primarily of cash, cash equivalents and marketable securities. The Company places its cash deposits in accredited financial institutions and, therefore, the Company’s management believes these funds are subject to minimal credit risk. The Company invests cash equivalents and marketable securities in money market funds, U.S. government agencies securities and various corporate debt securities. Credit risk in these securities is reduced as a result of the Company’s investment policy to limit the amount invested in any one issue or any single issuer and to only invest in high credit quality securities. The Company has no significant off-balance sheet concentrations of credit risk such as foreign currency exchange contracts, option contracts or other hedging arrangements. The Company also is subject to credit risk from its accounts receivable related to its product sales and collaborators. The Company evaluates the creditworthiness of each of its customers and has determined that all of its customers are creditworthy. To date, the Company has not experienced sig |
Consolidated Subsidiaries
Consolidated Subsidiaries | 12 Months Ended |
Dec. 31, 2016 | |
Text Block [Abstract] | |
Consolidated Subsidiaries | 2. Consolidated Subsidiaries Silver Creek Pharmaceuticals, Inc. On August 20, 2010, the Company acquired a controlling interest in Silver Creek. The Company has concluded that Silver Creek is a variable interest entity and that the Company is the primary beneficiary. The Company has the ability to direct the activities of Silver Creek through its ownership percentage and through the board of director seats controlled by the Company and its de facto agents. As such, Silver Creek is consolidated by the Company. During the year ended December 31, 2014, Silver Creek issued convertible notes to various lenders in the aggregate principal amount of $1.0 million. As of December 31, 2014, these outstanding borrowings and related accrued interest converted into shares of Silver Creek Series A preferred stock at the Series A preferred stock value of $1.00 per share. As a result of changes to the ownership composition of Silver Creek as of December 31, 2014, the non-controlling interest in Silver Creek increased by approximately $0.4 million. During the year ended December 31, 2015, Silver Creek issued and sold a total of 1.6 million shares of Silver Creek Series B preferred stock at a price of $1.35 per share to investors and received net cash proceeds of $2.1 million, after deducting issuance costs. As a result of changes to the ownership composition of Silver Creek as of December 31, 2015, the non-controlling interest in Silver Creek increased by approximately $0.9 million. As described more fully in Note 12, “Borrowings,” Silver Creek issued $1.0 million of convertible promissory notes (the “Silver Creek Notes”) in May 2016. In August 2016, Silver Creek issued $0.2 million of additional Silver Creek Notes under the same terms as the May 2016 issuance. In December 2016, these outstanding borrowings and related accrued interest were converted into shares of Silver Creek Series C preferred stock at the Series C preferred stock value of $1.50 per share. In addition, Silver Creek sold 1.5 million additional shares of its Series C preferred stock to new investors at a price of $1.50 per share and received net cash proceeds of $2.1 million, after deducting issuance costs. In conjunction with this sale, Silver Creek also issued warrants to purchase 1.9 million shares of Silver Creek Series C preferred stock to the same new investors. As a result of changes to the ownership composition of Silver Creek as of December 31, 2016, the non-controlling interest in Silver Creek decreased by approximately $0.8 million. As of December 31, 2016 and 2015, the Company owned approximately 50% and 56% of the outstanding voting stock of Silver Creek, respectively, and recorded a non-controlling interest of approximately $(1.5) million and $0.2 million, respectively, as a component of mezzanine equity on the Company’s consolidated balance sheets based on the terms of the Silver Creek Series A, Series B and Series C preferred stock. As of December 31, 2016, the Company consolidated Silver Creek’s total assets and total liabilities of $2.0 million and $2.0 million, respectively. As of December 31, 2015, the Company consolidated Silver Creek’s total assets and total liabilities of $0.8 million and $0.2 million, respectively. As of December 31, 2016 and 2015, the Company’s unrestricted cash and cash equivalents balance included $1.9 million and $0.7 million, respectively, of cash and cash equivalents held by Silver Creek that is designated for the operations of Silver Creek. Merrimack Pharmaceuticals (Bermuda) Ltd. Merrimack Pharmaceuticals (Bermuda) Ltd. was incorporated in Bermuda during 2011 and merged with and into the Company during the third quarter of 2014. |
Net Loss Per Common Share
Net Loss Per Common Share | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Net Loss Per Common Share | 3. Net Loss Per Common Share Basic net loss per share is calculated by dividing the net loss available to common stockholders by the weighted-average number of common shares outstanding during the period, without consideration for common stock equivalents. Diluted net loss per share is computed by dividing the net loss available to common stockholders by the weighted-average number of common share equivalents outstanding for the period determined using the treasury-stock method. For purposes of this calculation, convertible preferred stock, stock options and warrants are considered to be common stock equivalents and are only included in the calculation of diluted net loss per share when their effect is dilutive. As discussed in Note 12, “Borrowings,” in July 2013, the Company issued $125.0 million aggregate principal amount of 4.50% convertible notes due 2020 (the “Convertible Notes”) in an underwritten public offering. Following the repayment and satisfaction in full of the Company’s obligations to Hercules Technology Growth Capital, Inc. (“Hercules”) under its Loan and Security Agreement with Hercules (the “Loan Agreement”), which occurred in December 2015, upon any conversion of the Convertible Notes, the Convertible Notes may be settled, at the Company’s election, in cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock. For purposes of calculating the maximum dilutive impact, it is presumed that the conversion premium will be settled in common stock, inclusive of a contractual make-whole provision resulting from a fundamental change, and the resulting potential common shares included in diluted earnings per share if the effect is more dilutive. As of December 31, 2016, $60.8 million aggregate principal amount of the Convertible Notes remain outstanding. The stock options, warrants and conversion premium on the Convertible Notes are excluded from the calculation of diluted loss per share because the net loss for the years ended December 31, 2016, 2015 and 2014 causes such securities to be anti-dilutive. Securities excluded from the calculation of diluted loss per share are shown in the chart below: Years Ended December 31, (in thousands) 2016 2015 2014 Common stock warrants — — 2,381 Outstanding options to purchase common stock 19,025 19,211 19,567 Conversion of the Convertible Notes 12,158 25,000 25,000 |
License and Collaboration Agree
License and Collaboration Agreements | 12 Months Ended |
Dec. 31, 2016 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
License and Collaboration Agreements | 4. License and Collaboration Agreements Baxalta On September 23, 2014, the Company and Baxter entered into the Baxalta Agreement for the development and commercialization of ONIVYDE in the Licensed Territory. In connection with Baxter’s separation of the Baxalta business, the Baxalta Agreement was assigned to Baxalta during the second quarter of 2015. As part of the Baxalta Agreement, the Company granted Baxalta an exclusive, royalty-bearing right and license under the Company’s patent rights and know-how to develop and commercialize ONIVYDE in the Licensed Territory. Baxalta is responsible for using commercially reasonable efforts to develop, obtain regulatory approvals for and, following regulatory approval, commercialize ONIVYDE in the Licensed Territory. A joint steering committee comprised of an equal number of representatives from each of Baxalta and the Company is responsible for approving changes to the global development plan for ONIVYDE, including all budgets, and overseeing the parties’ development and commercialization activities with respect to ONIVYDE. Unless otherwise agreed, the Company will be responsible for conducting all clinical trials contemplated by the global development plan for ONIVYDE and manufacturing all clinical material needed for such trials. Baxalta also has the option to manufacture ONIVYDE, in which case the Company will perform a technology transfer of its manufacturing process to Baxalta. Under the terms of the Baxalta Agreement, the Company received a $100.0 million nonrefundable upfront cash payment in September 2014. In addition, the Company is eligible to receive from Baxalta (i) up to an aggregate of $100.0 million upon the achievement of specified research and development milestones, of which the Company has received $62.5 million from Baxalta through December 31, 2016, (ii) up to an aggregate of $520.0 million upon the achievement of specified regulatory milestones, of which the Company has received $60.0 million from Baxalta through December 31, 2016, and (iii) up to an aggregate of $250.0 million upon the achievement of specified sales milestones. Under the terms of the Baxalta Agreement, the Company will bear up to the first $98.8 million of costs related to the development of ONIVYDE for pancreatic cancer patients who have not previously received gemcitabine-based therapy; however, the Company expects most of these costs to be offset by payments received upon the achievement of clinical trial-related milestones. The Company and Baxalta will share equally all other clinical trial costs contemplated by the global development plan. The Company is also entitled to tiered, escalating royalties ranging from sub-teen double digits to low twenties percentages of net sales of ONIVYDE in the Licensed Territory. If not terminated earlier by either party, the Baxalta Agreement will expire upon expiration of all royalty and other payment obligations of Baxalta under the Baxalta Agreement. Either party may terminate the Baxalta Agreement in the event of an uncured material breach by the other party. Baxalta may also terminate the Baxalta Agreement on a product-by-product, country-by-country or sub-territory-by-sub-territory basis or in its entirety, for its convenience, upon 180 days’ prior written notice. In addition, the Company may terminate the Baxalta Agreement if Baxalta challenges or supports any challenge of the Company’s licensed patent rights. At the inception of the collaboration, the Company identified the following deliverables as part of the Baxalta Agreement: (i) license to develop and commercialize ONIVYDE in Baxalta’s territories, (ii) discovery, research, development and manufacturing services required to complete ongoing clinical trials related to ONIVYDE, (iii) discovery, research, development and manufacturing services needed to complete future clinical trials in further indications related to ONIVYDE, (iv) the option to perform a technology transfer of the Company’s manufacturing process related to the production of ONIVYDE to Baxalta and (v) participation on the joint steering committee. The Company concluded that none of the deliverables identified at the inception of the collaboration has standalone value from the other undelivered elements. As such, all deliverables represent a single unit of accounting. The Company has determined that the collaboration represents a services agreement and as such has estimated the level of effort expected to be completed as a result of providing the identified deliverables. The Company will recognize revenue from the nonrefundable upfront payment, forecasted non-substantive milestone payments and estimated payments related to discovery, research, development and technology transfer services based on proportional performance as effort is completed over the expected services period, which is estimated to be substantially complete by June 30, 2022. The Company will periodically review and, if necessary, revise the estimated service period related to its collaboration with Baxalta. As of December 31, 2016, the Company has achieved $62.5 million of the $90.0 million of forecasted non-substantive milestones that are included in the Company’s proportional performance revenue recognition model and $60.0 million of the $530.0 million of substantive milestones that are included in the Baxalta Agreement. Research, development and regulatory milestones that are considered substantive on the basis of the contingent nature of the milestone will be recognized as revenue in full in the period in which the associated milestone is achieved, assuming all other revenue recognition criteria are met. All sales milestones will be accounted for in the same manner as royalties and recorded as revenue upon achievement of the milestone, assuming all other revenue recognition criteria are met. From the inception of the Baxalta Agreement through December 31, 2016, the Company has achieved the following substantive and non-substantive milestones: • In July 2015, the European Medicines Agency (“EMA”) accepted for review a Marketing Authorization Application (“MAA”) filed by Baxalta for ONIVYDE. As a result of this acceptance, the Company recognized $20.0 million of license and collaboration revenue related to a substantive milestone payment owed from Baxalta. • In August 2015, the Company achieved a $15.0 million milestone related to the submission of the protocol for the Company’s Phase 2 clinical trial of ONIVYDE in front-line metastatic pancreatic cancer. This milestone is a non-substantive milestone, and revenue related to the achievement of this milestone will be recognized through the proportional performance revenue recognition model. • In October 2015, the Company achieved a $47.5 million milestone related to the enrollment of the first patient in a Phase 2 clinical trial of ONIVYDE in front-line pancreatic cancer. This milestone is a non-substantive milestone, and revenue related to the achievement of this milestone will be recognized through the proportional performance revenue recognition model. • In June 2016, the South Korean Ministry of Food and Drug Safety (the “MFDS”) accepted for review a new drug application filed by Baxalta for ONIVYDE. As a result of this acceptance, the Company recognized $10.0 million of license and collaboration revenue related to a substantive milestone payment owed from Baxalta. • In October 2016, the European Commission granted marketing authorization to Baxalta for ONIVYDE in combination with 5-FU and leucovorin for the treatment of adult patients with metastatic adenocarcinoma of the pancreas who have progressed following gemcitabine-based therapy. As a result of this approval and the first commercial sale of ONIVYDE made by Baxalta during the fourth quarter of 2016, the Company recognized $30.0 million of license and collaboration revenue related to a substantive milestone payment owed from Baxalta. During the years ended December 31, 2016, 2015 and 2014, the Company recognized license and collaboration revenues based on the following components of the Baxalta Agreement: Years Ended December 31, (in thousands) 2016 2015 2014 Proportional performance revenue recognition model $ 47,119 $ 64,930 $ 10,460 Substantive milestones 40,000 20,000 — Total $ 87,119 $ 84,930 $ 10,460 During the year ended December 31, 2016, the Company also recognized royalty revenues of $0.2 million related to the Baxalta Agreement. As of December 31, 2016 and 2015, the Company maintained the following assets and liabilities related to the Baxalta Agreement: December 31, (in thousands) 2016 2015 Accounts receivable, billed $ 860 $ 1,336 Accounts receivable, unbilled 581 626 Deferred revenues 56,779 97,365 Of the $56.8 million of deferred revenue related to the Baxalta Agreement as of December 31, 2016, $36.2 million is classified as current in the consolidated balance sheets based upon the Company’s estimate of revenue that will be recognized under the proportional performance revenue recognition model as a result of effort expected to be completed within the next twelve months. In February 2016, the Company and Baxalta entered into a commercial supply agreement (the “Baxalta Supply Agreement”) pursuant to which the Company supplies ONIVYDE to Baxalta and, at Baxalta’s option, manages fill and finish activities conducted by a third-party contract manufacturer for Baxalta. The Company began supplying ONIVYDE under the Baxalta Supply Agreement during the second quarter of 2016 and recognized $3.6 million of revenue during the year ended December 31, 2016. Sanofi On September 30, 2009, the Company and Sanofi entered into a license and collaboration agreement (the “Sanofi Agreement”) for the development and commercialization of MM-121. The Sanofi Agreement became effective on November 10, 2009, and Sanofi paid the Company a nonrefundable, noncreditable upfront license fee of $60.0 million. On June 17, 2014, the Company and Sanofi agreed to terminate the Sanofi Agreement effective December 17, 2014. In connection with the agreement to terminate the Sanofi Agreement, among other things, Sanofi transferred ownership of the investigational new drug application for MM-121 back to the Company in July 2014, and the Company waived Sanofi’s obligation to reimburse the Company for MM-121 development costs incurred after the effective termination date. Following the termination of the Sanofi Agreement, the Company is not entitled to receive any additional fees, milestone payments or reimbursements from the collaboration. The Company received total milestone payments of $25.0 million pursuant to the Sanofi Agreement. Under the Sanofi Agreement, Sanofi was responsible for all MM-121 development and manufacturing costs. Sanofi reimbursed the Company for direct costs incurred in both development and manufacturing and compensated the Company for its internal development efforts based on a full time equivalent rate. The Company recognized cost reimbursements for MM-121 development services within the period they were incurred and billable. Billable expenses were identified during each specified budget period. In the event that total development services expense incurred and expected to be incurred during the same period exceeded the total contractually allowed billable amount for development services during that period, the Company recognized only a percentage of the development services incurred as revenue during that period. At the inception of the collaboration, the Company determined that the license, the right to future technology, back-up compounds, participation on steering committees and manufacturing services performance obligations comprising the Sanofi Agreement represented a single unit of accounting. As the Company could not reasonably estimate its level of effort over the collaboration, the Company recognized revenue from the upfront payment, milestone payments and manufacturing services payments using the contingency-adjusted performance model over the expected development period, which was initially estimated at 12 years from the effective date of the Sanofi Agreement. As a result of the Company and Sanofi agreeing to terminate the Sanofi Agreement, the development period was revised to end as of December 17, 2014. Accordingly, the balance of the deferred revenue remaining on April 1, 2014 was recognized prospectively on a straight-line basis over the remaining development period, ending on December 17, 2014, in accordance with current generally accepted principles on revenue recognition. The Company recognized no revenue under the Sanofi agreement during the years ended December 31, 2016 or 2015. During the year ended December 31, 2014, the Company recognized revenue based on the following components of the Sanofi agreement: (in thousands) Year Ended December 31, 2014 Upfront payment $ 39,306 Milestone payment 16,377 Development services 18,904 Manufacturing services and other 17,709 Total $ 92,296 The Company performed development services for which revenue was recognized under the Sanofi Agreement in accordance with the specified budget period. During the year and specified budget periods ended December 31, 2013, the Company performed $10.1 million of development services in excess of recognized revenue. Of this amount, approximately $5.8 million was recognized as increased revenue in the year ended December 31, 2014 related to expenses incurred prior to December 31, 2013 upon the Company receiving budget approval for these overruns. The Company maintained no assets or liabilities related to the Sanofi Agreement as of either December 31, 2016 or 2015. PharmaEngine On May 5, 2011, the Company and PharmaEngine entered into an assignment, sublicense and collaboration agreement (the “PharmaEngine Agreement”) under which the Company reacquired rights in Europe and certain countries in Asia to ONIVYDE. In exchange, the Company agreed to pay PharmaEngine a nonrefundable, noncreditable upfront payment of $10.0 million and up to an additional $80.0 million in aggregate development and regulatory milestones and $130.0 million in aggregate sales milestones. PharmaEngine is also entitled to tiered royalties on net sales of ONIVYDE in Europe and certain countries in Asia. PharmaEngine is not responsible for any future development costs of ONIVYDE except those required specifically for regulatory approval in Taiwan. On September 22, 2014, the Company amended the PharmaEngine Agreement to redefine sublicense revenue and reduce the portion of sublicense revenue that the Company is required to pay to PharmaEngine. As a result of this amendment, the Company made a $7.0 million milestone payment to PharmaEngine in September 2014. Additionally, as a result of this amendment, a previously contingent $5.0 million milestone payment was paid to PharmaEngine in the second quarter of 2015. Prior to the amendment of the PharmaEngine Agreement, this milestone payment was contingent upon the award of certain specified regulatory designations. These milestone payments were recognized as research and development expense during the year ended December 31, 2014. In July 2015, the Company made an $11.0 million milestone payment to PharmaEngine in connection with the EMA’s acceptance for review of an MAA for ONIVYDE, which occurred, and was recognized as research and development expense, in the second quarter of 2015. In June 2016, the Company made a $10.0 million milestone payment to PharmaEngine in connection with the MFDS’s acceptance for review of a new drug application for ONIVYDE, which occurred, and was recognized as research and development expense, in the second quarter of 2016. In December 2016, the Company made a $25.5 million milestone payment to PharmaEngine in connection with Baxalta’s receipt of m arketing authorization from the European Commission for ONIVYDE in combination with 5-FU and leucovorin for the treatment of adult patients with metastatic adenocarcinoma of the pancreas who have progressed following gemcitabine-based therapy, which occurred, and was recognized as research and development expense, in the fourth quarter of 2016. During the years ended December 31, 2016, 2015 and 2014, the Company recognized research and development expenses of $35.6 million, $11.4 million and $12.6 million, respectively, related to the PharmaEngine Agreement. Under the PharmaEngine Agreement, the Company is also obligated to pay PharmaEngine royalties on Baxalta’s net sales of ONIVYDE in the Licensed Territory. The Company records these royalty expenses in the period that the related sales occur, and such royalty expenses are recorded as a component of “Cost of revenues” within the consolidated statements of operations and comprehensive loss. During the year ended December 31, 2016, the Company recorded $0.1 million of royalty expenses related to PharmaEngine. In August 2015, the Company and PharmaEngine also entered into a commercial supply agreement (the “PharmaEngine Supply Agreement”) pursuant to which the Company supplies ONIVYDE to PharmaEngine. The Company began supplying ONIVYDE under the PharmaEngine Supply Agreement in the second quarter of 2016 and recognized $0.3 million of revenue during the year ended December 31, 2016. No revenue related to the PharmaEngine Supply Agreement was recognized during the year ended December 31, 2015. Actavis In November 2013, the Company and Watson Laboratories, Inc. (“Actavis”) entered into a development, license and supply agreement (the “Actavis Agreement”) pursuant to which the Company will develop, manufacture and exclusively supply the bulk form of doxorubicin hydrochloride (HCl) liposome injection (the “Initial Product”) to Actavis. The Actavis Agreement was subsequently amended in January 2015 to transfer certain responsibilities from the Company to Actavis in exchange for reducing the aggregate milestone payments that the Company is eligible to receive by $0.4 million. The Company will manufacture and supply the Initial Product to Actavis in bulk form at an agreed upon unit price, and Actavis is responsible for all costs related to finished product processing and global commercialization. Pursuant to the agreement, additional products may be developed for Actavis in the future, the identities of which will be mutually agreed upon. The Company is eligible to receive up to $15.1 million in milestone and development payments, as well as additional reimbursement for specific activities performed by the Company at the request of Actavis. The Company will also receive a mid-twenties percentage of net profits on global sales of the Initial Product and any additional products. In October 2016, the U.S. Food and Drug Administration (the “FDA”) accepted for review an Abbreviated New Drug Application filed by Actavis for the Initial Product, which triggered the payment obligation of $1.1 million of milestones from Actavis to the Company. As of December 31, 2016, the Company had received $4.9 million in total milestone and development payments and reimbursement for specific activities from Actavis. The Actavis Agreement will expire with respect to the Initial Product and any additional products developed in the future ten years after Actavis’ first sale of the applicable product, unless terminated earlier, and will automatically renew for additional two year periods thereafter unless either party provides notice of non-renewal. Either party may terminate the Actavis Agreement in the event of an uncured material breach or bankruptcy filing by the other party. Actavis may also terminate the Actavis Agreement for convenience in specified circumstances upon 90 days’ prior written notice. The Company applied revenue recognition guidance to determine whether the performance obligations under the Actavis Agreement, including the license, participation on steering committees, development services, and manufacturing and supply services could be accounted for separately or as a single unit of accounting. The Company determined that these obligations represent a single unit of accounting and will recognize revenue as product is supplied to Actavis. Therefore, the Company has recorded $5.1 million and $4.0 million of billed and billable milestones and development expenses related to the Actavis Agreement as deferred revenue as of December 31, 2016 and 2015, respectively. This revenue is expected to be recognized by the Company over the ten year period that begins after Actavis’ first sale of the applicable product under the Actavis Agreement. |
Product Revenue Reserves and Al
Product Revenue Reserves and Allowances | 12 Months Ended |
Dec. 31, 2016 | |
Product Revenue Reserves And Allowances [Abstract] | |
Product Revenue Reserves and Allowances | 5. Product Revenue Reserves and Allowances The following table summarizes activity in each of the product revenue reserve and allowance categories for the year ended December 31, 2016: (in thousands) Trade Allowances Rebates and Chargeback Discounts Product Returns Other Incentives Total Balance at December 31, 2015 $ 138 $ 362 $ 32 $ 8 $ 540 Provisions related to sales in the current year 1,900 5,928 397 5 8,230 Adjustments related to sales in the prior year — (213 ) — — (213 ) Credits and payments made (1,507 ) (5,077 ) (26 ) (7 ) (6,617 ) Balance at December 31, 2016 $ 531 $ 1,000 $ 403 $ 6 $ 1,940 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | 6. Fair Value of Financial Instruments Fair value is an exit price, representing the amount that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants. Fair value is determined based on observable and unobservable inputs. Observable inputs reflect readily obtainable data from independent sources, while unobservable inputs reflect certain market assumptions. As a basis for considering such assumptions, GAAP establishes a three-tier value hierarchy, which prioritizes the inputs used to develop the assumptions and for measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets for identical assets; (Level 2) inputs other than the quoted prices in active markets that are observable either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which requires the Company to develop its own assumptions. This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. Recurring Fair Value Measurements The carrying values of cash, restricted cash, prepaid expenses, accounts receivable, accounts payable and accrued expenses, and other short-term assets and liabilities approximate their respective fair values due to the short-term maturities of these assets and liabilities. The following tables summarize assets and liabilities measured at fair value on a recurring basis as of December 31, 2016 and 2015 and the input categories associated with those assets and liabilities: December 31, 2016 (in thousands) Level 1 Level 2 Level 3 Assets: Money market funds $ 12,373 $ — $ — Totals $ 12,373 $ — $ — Liabilities: Silver Creek warrant liability $ — $ — $ 1,499 Totals $ — $ — $ 1,499 December 31, 2015 (in thousands) Level 1 Level 2 Level 3 Assets: Money market funds $ 704 $ — $ — Totals $ 704 $ — $ — In December 2016, Silver Creek issued warrants to purchase an aggregate of 1.9 million shares of Silver Creek Series C preferred stock (the “Silver Creek warrants”). The issuance of the Silver Creek warrants is described more fully in Note 12, “Borrowings.” The Silver Creek warrants were valued at $1.5 million as of December 31, 2016 using a Black-Scholes option pricing model, probability-weighted for different exercise scenarios. The key assumptions utilized in the Black-Scholes option pricing model as of December 31, 2016 were a risk-free interest rate of 2.3%, expected dividend yield of 0.0%, expected volatility of 61.7% and expected term of 6.9 years. Changes in the fair value of the Silver Creek warrants in subsequent periods will be recognized as a component of “Other income, net” in the consolidated statements of operations and comprehensive loss. There were no changes in valuation techniques or transfers between the fair value measurement levels during the years ended December 31, 2016 or 2015. There were no liabilities measured at fair value on a recurring basis as of December 31, 2015. Non-Recurring Fair Value Measurements Certain assets, including IPR&D intangible assets, may be measured at fair value on a non-recurring basis in periods subsequent to initial recognition. As described more fully in Note 9, “Goodwill and Intangible Assets, Net,” the Company performed an interim impairment assessment during the fourth quarter of 2016 on the Company’s IPR&D asset related to the antibody-targeted nanotherapeutic that contains a chemotherapy drug. The Company utilized a probability-weighted discounted cash flow analysis under the income approach in performing this assessment. As a result of this interim impairment assessment, the fair value of this IPR&D asset was determined to be zero as of December 31, 2016. No non-recurring fair value measurements were required during the year ended December 31, 2015. Other Fair Value Measurements The estimated fair value of the Convertible Notes was $57.5 million as of December 31, 2016. The Company estimated the fair value of the Convertible Notes by using a quoted market rate in an inactive market, which is classified as a Level 2 input. The carrying value of the Convertible Notes was $47.0 million as of December 31, 2016 due to the bifurcation of the conversion feature of the Convertible Notes as described more fully in Note 12, “Borrowings.” As discussed in Note 12, “Borrowings,” in December 2015, the Company closed a private placement of $175.0 million aggregate principal amount of 11.50% senior secured notes due 2022 (the “2022 Notes”). The Company estimated the fair value of the 2022 Notes by using publicly-available information related to one of the 2022 Notes borrower’s portfolio of debt investments based on unobservable inputs, which is classified as a Level 3 input. The estimated fair value of the 2022 Notes was $167.0 million as of December 31, 2016. The carrying value of the 2022 Notes was $169.9 million as of December 31, 2016. |
Marketable Securities
Marketable Securities | 12 Months Ended |
Dec. 31, 2016 | |
Investments Debt And Equity Securities [Abstract] | |
Marketable Securities | 7. Marketable Securities As of both December 31, 2016 and 2015, the Company maintained only cash equivalents comprised of money market funds. As of December 31, 2016, the Company did not hold any securities that were in an unrealized loss position. There were no realized gains or losses on available-for-sale securities during the years ended December 31, 2016, 2015 or 2014. |
Inventory
Inventory | 12 Months Ended |
Dec. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Inventory | 8. Inventory Inventory as of December 31, 2016 and 2015 consisted of the following: December 31, (in thousands) 2016 2015 Raw materials $ 4,483 $ 900 Work in process 8,651 2,743 Finished goods 1,420 74 Total inventory $ 14,554 $ 3,717 Inventory acquired prior to receipt of marketing approval of ONIVYDE was expensed as research and development expense as incurred. The Company began to capitalize the costs associated with the production of ONIVYDE upon receipt of FDA approval on October 22, 2015. During the year ended December 31, 2016, the Company incurred aggregate charges of $3.6 million related to excess and scrap inventory and excess manufacturing capacity. These expenses were recorded as a component of “Cost of revenues.” |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Net | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, Net | 9. Goodwill and Intangible Assets, Net As part of the acquisition of Hermes BioSciences, Inc. (“Hermes”) on October 6, 2009, the Company recognized goodwill of $3.6 million and acquired IPR&D assets of $7.0 million related to several development programs: an antibody-targeted nanotherapeutic that contains a chemotherapy drug, a nanotherapeutic that contains a chemotherapy drug and other early-stage preclinical programs in the amounts of $2.8 million, $3.4 million and $0.8 million, respectively. The Company also acquired intangible assets of $3.2 million related to core nano-carrier technology. These values were determined at the time of acquisition by estimating the costs to develop the acquired IPR&D assets into commercially viable products, estimating the net cash flows from such projects and discounting the net cash flows back to their present values. The probability of success factors and discount rates used for each project considered the uncertainty surrounding the successful development of the acquired IPR&D assets. The deprioritization and delay of the other early-stage preclinical programs during the year ended December 31, 2013 resulted in an impairment charge of $0.8 million recognized during the third quarter of 2013. During the fourth quarter of 2015, upon the approval of ONIVYDE by the FDA, the Company reclassified the acquired IPR&D asset related to the nanotherapeutic that contains a chemotherapy drug to definite-lived intangible assets and commenced amortization. This definite-lived ONIVYDE intangible asset is amortized on a straight-line basis through 2028. In December 2016, the Company determined that it would be stopping the ongoing Phase 2 clinical trial of MM-302, which utilized the antibody-targeted nanotheraputic that contains a chemotherapy drug. The decision to stop the trial was made following an independent Data and Safety Monitoring Board (the “DSMB”) opinion that continuing the clinical trial would be unlikely to demonstrate benefit over the comparator treatments. Subsequent to this recommendation, a futility assessment was performed that confirmed the DSMB’s opinion. Both the treatment and control arms were found to have shorter than expected median progression free survival. While patients currently enrolled in the clinical trial may choose to continue on their assigned treatment based upon discussion with their study physician, no further development of MM-302 is being contemplated by the Company at this time. As a result of this determination, the Company recorded an impairment charge of $2.8 million during the fourth quarter of 2016. This impairment charge was recorded as a component of “Research and development expenses” within the consolidated statements of operations and comprehensive loss. The core nano-carrier technology intangible asset is being amortized on a straight-line basis over a period of ten years, which is the Company’s best estimate of the useful life of this technology. The Company has not recorded any impairment charges related to either goodwill or definite-lived intangible assets during the years ended December 31, 2016, 2015 and 2014. Goodwill and intangible assets as of December 31, 2016 and 2015 consisted of the following: December 31, 2016 (in thousands) Gross C Accumulated Amortization Net Carrying Value Nano-carrier technology intangible asset $ 3,200 $ (2,315 ) $ 885 ONIVYDE intangible asset 3,400 (308 ) 3,092 Goodwill 3,605 — 3,605 Totals $ 10,205 $ (2,623 ) $ 7,582 December 31, 2015 (in thousands) Gross C Accumulated Amortization Net Carrying Value Nano-carrier technology intangible asset $ 3,200 $ (1,995 ) $ 1,205 ONIVYDE intangible asset 3,400 (50 ) 3,350 IPR&D 2,800 — 2,800 Goodwill 3,605 — 3,605 Totals $ 13,005 $ (2,045 ) $ 10,960 Amortization expense was $0.6 million, $0.4 million and $0.3 million for the years ended December 31, 2016, 2015 and 2014, respectively. The weighted-average remaining amortization period for the Company’s intangible assets subject to amortization is approximately 10.0 years as of December 31, 2016. Future amortization expense for the next five-year period is expected to be as follows: Years Ended December 31, (in thousands) 2017 $ 578 2018 578 2019 503 2020 258 2021 258 |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2016 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment, Net | 10. Property and Equipment, Net Property and equipment, net as of December 31, 2016 and 2015 consisted of the following: December 31, (in thousands) 2016 2015 Lab equipment $ 20,752 $ 19,305 IT equipment 8,601 7,742 Leasehold improvements 21,153 21,026 Furniture and fixtures 959 910 Construction in process 515 2,243 Total property and equipment, gross 51,980 51,226 Less: Accumulated depreciation (36,215 ) (29,311 ) Total property and equipment, net $ 15,765 $ 21,915 Depreciation expense was $7.3 million, $5.5 million and $4.2 million for the years ended December 31, 2016, 2015 and 2014, respectively. Capitalized interest costs were insignificant for the years ended December 31, 2016, 2015 and 2014. During the year ended December 31, 2016, the Company recognized a $0.5 million charge related to the disposal of property and equipment. There were no significant losses recognized related to the disposal of property and equipment during the years ended December 31, 2015 or 2014. |
Accounts Payable, Accrued Expen
Accounts Payable, Accrued Expenses and Other | 12 Months Ended |
Dec. 31, 2016 | |
Payables And Accruals [Abstract] | |
Accounts Payable, Accrued Expenses and Other | 11. Accounts Payable, Accrued Expenses and Other Accounts payable, accrued expenses and other as of December 31, 2016 and 2015 consisted of the following: December 31, (in thousands) 2016 2015 Accounts payable $ 3,384 $ 5,049 Accrued goods and services 15,760 14,295 Accrued clinical trial costs 11,260 12,764 Accrued drug purchase costs 910 7,460 Accrued payroll and related benefits 9,150 9,009 Accrued restructuring expenses 774 — Accrued asset sale transaction costs 3,724 — Accrued interest 2,100 3,041 Accrued dividends payable 19 19 Silver Creek warrant liability 1,499 — Deferred tax incentives 1,402 445 Total accounts payable, accrued expenses and other $ 49,982 $ 52,082 |
Borrowings
Borrowings | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Borrowings | 12. Borrowings 2022 Notes On December 22, 2015, the Company closed a private placement of $175.0 million aggregate principal amount of 11.50% 2022 Notes and entered into an indenture (the “U.S. Bank Indenture”) with U.S. Bank National Association as trustee and collateral agent (the “2020 Notes Trustee”). As a result of this placement, the Company received net proceeds of approximately $168.5 million, after deducting private placement and offering expenses payable by the Company. The private placement and offering expenses included $0.9 million of transaction costs that were expensed in accordance with the debt modification guidance per ASC 470, Debt The Company may redeem the 2022 Notes at its option, in whole or in part from time to time at a price equal to the principal amount plus accrued interest and a specified make-whole premium. If the Company experiences certain change of control events as defined in the U.S. Bank Indenture, the holders of the 2022 Notes will have the right to require the Company to purchase all or a portion of the 2022 Notes at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest to the date of purchase. In addition, upon certain asset sale events as defined in the U.S. Bank Indenture, the Company may be required to offer to use the net proceeds thereof to purchase all or a portion of the 2022 Notes at 100% of the principal amount thereof, plus accrued and unpaid interest to the date of purchase. The 2022 Notes are senior secured obligations of the Company and will be equal in right of payment to all existing and future pari passu indebtedness of the Company (including the Company’s outstanding Convertible Notes), will be senior in right of payment to all existing and future subordinated indebtedness of the Company, will have the benefit of a security interest in the 2022 Notes collateral and will be junior in lien priority in respect of any asset-based lending collateral that secures any first priority lien obligations from time to time. The 2022 Notes contain customary covenants, including covenants that limit or restrict the Company’s ability to incur liens, incur indebtedness, and make certain restricted payments, but do not contain covenants related to future financial performance. The 2022 Notes are secured by a first priority lien on substantially all of the Company’s assets. The 2022 Notes contain customary events of default. Upon certain events of default occurring, the 2022 Notes Trustee may declare 100% of the principal of and accrued and unpaid interest, if any, on all the 2022 Notes to be due and payable. In the case of certain events of bankruptcy, insolvency or reorganization involving the Company or a restricted subsidiary, 100% of the principal of, and accrued and unpaid interest on, the 2022 Notes will automatically become due and payable. There have been no events of default as of or during the year ended December 31, 2016. The Company assessed the 2022 Notes pursuant to ASC 815, Derivatives and Hedging Debt issuance costs incurred by the Company, excluding costs allocated to the debt modification as discussed below, are accounted for as a direct deduction to the carrying value of the 2022 Notes and are amortized to interest expense using the effective interest method over the life of the 2022 Notes. The effective interest rate associated with the 2022 Notes is 12.32%. For the years ended December 31, 2016 and 2015, interest expense related to the 2022 Notes was approximately $20.9 million and $0.5 million, respectively. Convertible Notes In July 2013, the Company issued $125.0 million aggregate principal amount of Convertible Notes in an underwritten public offering. The Company issued the Convertible Notes under an indenture, dated as of July 17, 2013 (the “Base Indenture”) between the Company and Wells Fargo Bank, National Association, as trustee (the “Convertible Notes Trustee”), as supplemented by a supplemental indenture, dated as of July 17, 2013, between the Company and the Convertible Notes Trustee (together with the Base Indenture, the “Wells Fargo Indenture”). As a result of the Convertible Notes offering, the Company received net proceeds of approximately $120.6 million, after deducting underwriting discounts and commissions and offering expenses payable by the Company. The Convertible Notes bear interest at a rate of 4.50% per year, payable semiannually in arrears on January 15 and July 15 of each year, beginning on January 15, 2014. The Convertible Notes are general unsecured senior obligations of the Company and rank (i) pari passu in seniority with respect to the 2022 Notes, (ii) senior in right of payment to any of the Company’s indebtedness that is expressly subordinated in right of payment to the Convertible Notes, (iii) equal in right of payment to any of the Company’s unsecured indebtedness that is not so subordinated, (iv) effectively junior in right of payment to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness and (v) structurally junior to all indebtedness and other liabilities (including trade payables) of the Company’s subsidiaries. The Company separately accounted for the liability and equity components of the Convertible Notes by bifurcating gross proceeds between the indebtedness, or liability component, and the embedded conversion option, or equity component. This bifurcation was done by estimating an effective interest rate as of the date of issuance for similar notes which do not contain an embedded conversion option. The gross proceeds received from the issuance of the Convertible Notes less the initial amount allocated to the indebtedness resulted in a $53.8 million allocation to the embedded conversion option. The embedded conversion option was recorded in stockholders’ deficit and as debt discount, to be subsequently amortized as interest expense over the term of the Convertible Notes. Underwriting discounts and commissions and offering expenses totaled $4.4 million and were allocated to the indebtedness and the embedded conversion option based on their relative values. On April 13, 2016, the Company entered into separate, privately-negotiated conversion agreements (the “Conversion Agreements”) with certain holders of the Convertible Notes. Under the Conversion Agreements, such holders agreed to convert an aggregate principal amount of $64.2 million of Convertible Notes held by them. The Company initially settled each $1,000 principal amount of Convertible Notes surrendered for conversion by delivering 136 shares of the Company’s common stock on April 18, 2016. In total, the Company issued an aggregate of 8,732,152 shares of its common stock on this initial closing date. In addition, pursuant to the Conversion Agreements, at the additional closings (as defined in the Conversion Agreements), the Company issued an aggregate of 3,635,511 shares of the Company’s common stock representing an aggregate of $27.7 million as additional payments in respect of the conversion of the Convertible Notes. The number of additional shares was determined based on the daily VWAP (as defined in the Conversion Agreements) of the Company’s common stock for each of the trading days in the 10-day trading period following the date of the Conversion Agreements. The issuance of 12,367,663 total shares of the Company’s common stock pursuant to the Conversion Agreements resulted in an increase to common stock and additional paid-in capital of $101.0 million. As a result of the conversion, the Company recognized an overall loss on extinguishment of $14.6 million representing the difference between the total settlement consideration transferred to the holders that was attributed to the liability component of the Convertible Notes, based on the fair value of that component at the time of conversion, and the net carrying value of the liability. The loss on extinguishment was recorded as interest expense during the second quarter of 2016. The remaining settlement consideration transferred was allocated to the reacquisition of the embedded conversion option and recognized as a $39.8 million reduction of additional paid-in capital. Transaction costs incurred with third parties related to the conversion were allocated to the liability and equity components and resulted in an additional $0.2 million of interest expense and a $0.2 million reduction of additional paid-in capital. The outstanding Convertible Notes will mature on July 15, 2020 (the “Maturity Date”), unless earlier repurchased by the Company or converted at the option of holders. Holders may convert their Convertible Notes at their option at any time prior to the close of business on the business day immediately preceding April 15, 2020 only under the following circumstances: • during any calendar quarter commencing after September 30, 2013 (and only during such calendar quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a 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; • during the five business day period after any five consecutive trading day period (the “measurement period”) in which the trading price (as defined in the Convertible Notes) per $1,000 principal amount of Convertible Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day; or • upon the occurrence of specified corporate events set forth in the Wells Fargo Indenture. On or after April 15, 2020 until the close of business on the business day immediately preceding the Maturity Date, holders may convert their Convertible Notes at any time, regardless of the foregoing circumstances. Following the repayment and satisfaction in full of the Company’s obligations to Hercules under the Loan Agreement, which occurred in December 2015, upon any conversion of the Convertible Notes, the Convertible Notes may be settled, at the Company’s election, in cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock. The initial conversion rate of the Convertible Notes is 160 shares of the Company’s common stock per $1,000 principal amount of Convertible Notes, which is equivalent to an initial conversion price of $6.25 per share of common stock. The conversion rate will be subject to adjustment in some events, but will not be adjusted for any accrued and unpaid interest. In addition, following certain corporate events that occur prior to the Maturity Date, the Company will increase the conversion rate for a holder who elects to convert its Convertible Notes in connection with such a corporate event in certain circumstances. Upon the occurrence of a fundamental change (as defined in the Wells Fargo Indenture) involving the Company, holders of the Convertible Notes may require the Company to repurchase all or a portion of their Convertible Notes for cash at a price equal to 100% of the principal amount of the Convertible Notes to be purchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. The Wells Fargo Indenture contains customary terms and covenants and events of default with respect to the Convertible Notes. If an event of default (as defined in the Wells Fargo Indenture) occurs and is continuing, the Convertible Notes Trustee by written notice to the Company, or the holders of at least 25% in aggregate principal amount of the Convertible Notes then outstanding by written notice to the Company and the Convertible Notes Trustee, may, and the Convertible Notes Trustee at the request of such holders will, declare 100% of the principal of and accrued and unpaid interest on the Convertible Notes to be due and payable. In the case of an event of default arising out of certain events of bankruptcy, insolvency or reorganization involving the Company or a significant subsidiary (as set forth in the Indenture), 100% of the principal of and accrued and unpaid interest on the Convertible Notes will automatically become due and payable. There have been no events of default as of or during the year ended December 31, 2016. For the years ended December 31, 2016, 2015 and 2014, interest expense related to the Convertible Notes was $22.7 million, $13.7 million and $13.7 million, respectively. As discussed above, interest expense for the year ended December 31, 2016 includes the loss on extinguishment of $14.6 million associated with the April 2016 conversion of the Convertible Notes as well as $0.2 million of related transaction costs. Loan Agreement In November 2012, the Company entered into the Loan Agreement with Hercules pursuant to which the Company received loans in the aggregate principal amount of $40.0 million. The Company, as permitted under the Loan Agreement, had previously extended the interest-only payment period with the aggregate principal balance of the loans to be repaid in monthly installments starting on June 1, 2014 and continuing through November 1, 2016. On June 25, 2014, the Company entered into an amendment to the Loan Agreement, whereby the Company and Hercules agreed to extend until October 1, 2014 the period during which the Company makes interest-only payments. On November 6, 2014, the Company entered into a further amendment to the Loan Agreement, whereby the Company and Hercules agreed to extend by four additional months the period during which the Company makes interest-only payments. On February 25, 2015, the Company entered into a fourth amendment to the Loan Agreement pursuant to which the Company and Hercules agreed to extend the maturity date and the period during which the Company makes interest-only payments on its current loans in the aggregate principal amount of $40.0 million. As a result of this amendment, the Company was required to repay the outstanding aggregate principal balance of the loan beginning on June 1, 2016 and continuing through November 1, 2018. As a result of the FDA’s approval of the Company’s NDA for ONIVYDE, which occurred on October 22, 2015, the Company elected to extend the interest-only period by an additional six months such that the Company would repay the outstanding aggregate principal balance of the loans beginning on December 1, 2016 and continuing through November 1, 2018. This amendment was treated as a debt modification for accounting purposes. Upon the earlier of full repayment of the loans or November 1, 2016, the Company was required to pay Hercules a fee of $1.2 million, which had been recorded as a discount to the loans and as a long-term liability on the Company’s consolidated balance sheets. Additionally, the Company reimbursed Hercules for costs incurred related to the loans, which was reflected as a discount to the carrying value of the loans. The Company amortized these loan discounts totaling $1.6 million to interest expense over the term of the loans using the effective interest method. In connection with the Loan Agreement, the Company granted Hercules a security interest in all of the Company’s personal property now owned or hereafter acquired, excluding intellectual property but including the proceeds from the sale, if any, of intellectual property, and a negative pledge on intellectual property. The Loan Agreement also contained certain representations, warranties and non-financial covenants of the Company. During the fourth quarter of 2015, the Company repaid the loans in full in conjunction with the issuance of the 2022 Notes. The total repayment amount included the $40.0 million in outstanding principal, the $1.2 million fee discussed above and interest accrued up through the repayment date. The Company assessed the repayment of the Loan Agreement with Hercules in conjunction with the issuance of the 2022 Notes, of which Hercules holds a portion, in accordance with the debt extinguishment and modification guidance per ASC 470, Debt For the years ended December 31, 2015 and 2014, interest expense related to the Hercules loans was $5.4 million and $4.7 million, respectively. No interest expense related to the Hercules loans was recognized during the year ended December 31, 2016. Credit Facility On November 8, 2016, the Company entered into a Loan and Security Agreement (the “Credit Agreement”) with BioPharma Credit Investments IV Sub, LP (“Pharmakon”) pursuant to which a credit facility of an aggregate principal amount of at least $15.0 million and up to $25.0 million is available. The credit facility was originally available at any time through March 15, 2017 upon the Company’s request and upon compliance with certain funding conditions. As described more fully in Note 23, “Subsequent Events,” the availability of the credit facility was subsequently extended through April 27, 2017. If the Company borrows under the Credit Agreement, the credit facility will bear interest at an annual rate of 11.50%. In connection with any borrowings that occur under the Credit Agreement, the Company will grant Pharmakon a security interest in all inventory and accounts receivable. The Credit Agreement also contains certain representations, warranties and non-financial covenants. In addition, the Credit Agreement grants Pharmakon an option during the two years following funding of the credit facility to participate in a future financing at an amount up to the lesser of 25% of the total amount financed or $50.0 million. The Company had not borrowed any amounts under the Credit Agreement as of December 31, 2016. Silver Creek Convertible Notes In December 2012, the Company’s majority owned subsidiary, Silver Creek, entered into a Note Purchase Agreement pursuant to which it issued convertible notes to various lenders in aggregate principal amounts of $1.6 million in December 2012, $0.9 million during the year ended December 31, 2013 and $1.0 million during the year ended December 31, 2014. The notes issued pursuant to the Note Purchase Agreement bore interest at 6% per annum. Upon issuance, these convertible notes contained a feature wherein if at any time prior to maturity Silver Creek enters into a qualifying equity financing, defined as a sale or series of related sales of equity securities prior to the maturity date and resulting in at least $4.0 million of gross proceeds, the notes would automatically convert into the next qualifying equity financing at a 25% discount. The Company determined that this convertible feature met the definition of a derivative and required separate accounting treatment. The derivative was estimated to be valued at $0.2 million using a probability-weighted model and was recorded as derivative liability on the consolidated balance sheets. For the year ended December 31, 2014, the derivative was remeasured upon conversion of the notes with the gain in remeasurement recognized in other income. The specific notes that were outstanding as of December 31, 2014 matured and converted, along with an immaterial amount of accrued interest into shares of Silver Creek Series A preferred stock on December 31, 2014. In May 2016, Silver Creek issued an aggregate of $1.0 million of Silver Creek Notes. In August 2016, Silver Creek issued $0.2 million of additional Silver Creek Notes under the same terms as the May 2016 issuance. The Silver Creek Notes were automatically convertible into shares of Silver Creek equity under a variety of conversion scenarios. The Silver Creek Notes bore interest at 6% per annum and were set to mature and convert, along with accrued interest, into Silver Creek Series B preferred stock at a conversion price of $1.35 per share on December 31, 2016. If, prior to maturity, Silver Creek entered into a sale or series of related sales of equity securities resulting in at least $4.0 million of gross proceeds, the Silver Creek Notes would convert into the equity securities sold at the lesser of the price paid per share for the equity securities or $1.60 per share. Principal and accrued interest related to the Silver Creek Notes were not permitted to be paid in cash by Silver Creek without the consent of a majority of the noteholders. In December 2016, Silver Creek executed a Series C Preferred Stock and Warrant Purchase Agreement (the “Silver Creek Series C Agreement”) whereby it agreed to sell 1.5 million shares of Silver Creek Series C preferred stock to new investors at a purchase price of $1.50 per share. In connection with this financing, holders of the Silver Creek Notes agreed to convert all principal and accrued interest associated with the Silver Creek Notes into 0.8 million shares of Silver Creek Series C preferred stock at a conversion price of $1.50 per share. New purchasers of the Silver Creek Series C preferred stock also received warrants to purchase an aggregate of 1.9 million shares of Silver Creek Series C preferred stock at a future date. The exercise price of the warrants varies based upon the achievement of certain milestone events defined in the related warrant agreements. Milestone Event 1 is defined as the date that is seven business days following the acceptance by the FDA of Silver Creek’s filing of an Investigational New Drug application (“IND”), or 30 business days after the IND is filed without FDA rejection of the application. Milestone Event 2 is defined as the date that is seven business days following the date when Silver Creek completes a Phase 1 clinical trial provided, that if Silver Creek receives proceeds of less than $4.0 million pursuant to the sale of Series C preferred stock, Milestone Event 2 shall mean the date that is seven business days following the first dose in humans in a clinical trial. Of the warrants to purchase 1.9 million shares of Silver Creek Series C preferred stock that were issued, warrants to purchase 1.2 million shares of Silver Creek Series C preferred stock are exercisable at an exercise price of $1.75 per share if the warrant is exercised prior to the date that is 30 business days after the date that the holder receives notice from Silver Creek of the achievement of Milestone Event 1, or $2.25 per share if the warrant is exercised on or after the date that is 30 business days after the holder receives notice from Silver Creek of the achievement of Milestone Event 1. The remaining warrants to purchase 0.7 million shares of Silver Creek Series C preferred stock are exercisable at an exercise price of $2.25 per share if the warrant is exercised prior to the date that is 30 business days after the date that the holder receives notice from Silver Creek of the achievement of Milestone Event 2, or $2.75 per share if the warrant is exercised on or after the date that is 30 business days after Milestone Event 2. All warrants to purchase Silver Creek Series C preferred stock are exercisable until the earliest of (i) the consummation of a Silver Creek liquidation event, (ii) the consummation of an initial public offering of Silver Creek common stock, (iii) four months after the achievement of Milestone Event 2 or (iv) seven years from the date of issuance. The warrants to purchase Silver Creek Series C preferred stock were classified as a current liability in accordance with ASC 480, Distinguishing Liabilities from Equity Future Minimum Payments under Outstanding Borrowings Future minimum payments under outstanding borrowings as of December 31, 2016 are as follows: (in thousands) Convertible Notes 2022 Notes 2017 $ 2,736 $ 20,125 2018 2,736 20,125 2019 2,736 62,617 2020 63,527 57,586 2021 and thereafter — 100,078 Total 71,735 260,531 Less interest (10,943 ) (85,531 ) Less unamortized discount (13,842 ) (5,089 ) Less current portion — — Long-term debt $ 46,950 $ 169,911 |
Restructuring Activities
Restructuring Activities | 12 Months Ended |
Dec. 31, 2016 | |
Restructuring And Related Activities [Abstract] | |
Restructuring Activities | 13. Restructuring Activities On October 3, 2016, the Company announced a 22% reduction in headcount as part of a major corporate restructuring with the objective of prioritizing its research and development on a focused set of systems biology-derived oncology products and strengthening its financial runway. On this same date, the Company also announced the resignation of Robert Mulroy, the Company’s former President and Chief Executive Officer (“CEO”). Under this corporate restructuring, the Company recognized total restructuring expenses of $5.9 million during the year ended December 31, 2016 related to stock-based compensation expense for certain terminated employees, contractual termination benefits for employees with pre-existing severance arrangements and one-time employee termination benefits. These one-time employee termination benefits were comprised of severance, benefits and related costs, all of which resulted in cash expenditures during the third and fourth quarters of 2016. The following table summarizes the charges related to the restructuring activities as of December 31, 2016: (in thousands) Expenses Less: Payments Less: Non-Cash Expenses Accrued Restructuring Expenses at December 31, 2016 Severance, benefits and related costs due to workforce reduction $ 5,856 $ (3,711 ) $ (1,371 ) $ 774 Totals $ 5,856 $ (3,711 ) $ (1,371 ) $ 774 |
Common Stock Warrants
Common Stock Warrants | 12 Months Ended |
Dec. 31, 2016 | |
Text Block [Abstract] | |
Common Stock Warrants | 14. Common Stock Warrants The following is a description of the common stock warrant activity of the Company: (in thousands, except per share amounts) Warrants for the Purchase of Common Weighted Average Exercise Price Balance at December 31, 2013 2,777 $ 3.05 Exercised (396 ) $ 3.38 Balance at December 31, 2014 2,381 $ 3.00 Exercised (2,355 ) $ 3.00 Cancelled (26 ) $ 3.00 Balance at December 31, 2015 — $ — During the year ended December 31, 2014, warrants to purchase approximately 75,000 shares of common stock were cashless exercised and 38,000 shares of common stock were issued. During the year ended December 31, 2015, warrants to purchase approximately 2,295,000 shares of common stock were cashless exercised and 1,695,000 shares of common stock were issued. As of December 31, 2015, all remaining unexercised warrants for the purchase of common stock had expired and were cancelled. |
Common Stock
Common Stock | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Common Stock | 15. Common Stock In July 2015, the Company entered into a Sales Agreement with Cowen and Company, LLC (“Cowen”) to sell shares of the Company’s common stock having an aggregate sales price of up to $40.0 million through an “at the market offering” program under which Cowen acted as the sales agent. The Company concluded sales under this program in September 2015, having sold approximately 3.8 million shares of common stock and generating approximately $38.6 million in net proceeds, after deducting commissions and offering expenses. As of December 31, 2016 and 2015, the Company had 200.0 million shares of $0.01 par value common stock authorized. There were approximately 130.2 million and 115.9 million shares of common stock issued and outstanding as of December 31, 2016 and 2015, respectively. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation | 16. Stock-Based Compensation In 2008, the Company adopted the 2008 Stock Incentive Plan (as amended, the “2008 Plan”) for employees, officers, directors, consultants and advisors. The 2011 Stock Incentive Plan (the “2011 Plan”) became effective upon closing of the Company’s initial public offering in April 2012. Upon effectiveness of the 2011 Plan, no further awards were available to be issued under the 2008 Plan. The 2011 Plan is administered by the Board of Directors of the Company and permits the Company to grant incentive and non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units and other stock-based awards. Additional shares also become available for grant by reason of the forfeiture, cancellation, expiration or termination of existing awards. The Company registered 4.1 million, 3.7 million and 3.6 million of additional shares of common stock related to the 2011 Plan in February 2016, February 2015 and March 2014, respectively. As of December 31, 2016, there were 4.7 million shares remaining available for grant under the 2011 Plan. During the years ended December 31, 2016, 2015 and 2014, the Company issued options to purchase 4.3 million, 3.7 million and 3.9 million shares of common stock, respectively. These options generally vest over a three-year period for employees. Options granted to directors vest immediately. The fair value of stock options granted to employees during the years ended December 31, 2016, 2015 and 2014 was estimated at the date of grant using the following assumptions: Years Ended December 31, 2016 2015 2014 Risk-free interest rate 1.1 – 2.0% 1.5 – 1.8% 1.6 – 2.0% Expected dividend yield 0% 0% 0% Expected term 5.0 – 5.8 years 5.0 – 5.9 years 5.0 – 5.9 years Expected volatility 67 – 69% 66 – 67% 64 – 72% The Company uses the simplified method to calculate the expected term as it does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term of its stock options. Under this approach, the expected term is calculated to be the average of the ten-year contractual term of the option and the weighted-average vesting term of the option, taking into consideration multiple vesting tranches. The computation of expected volatility is based on the historical volatility of comparable companies from a representative peer group selected based on industry and market capitalization. The risk-free interest rate is based on a treasury instrument whose term is consistent with the expected life of the stock options. Management estimates expected forfeitures based on historical experience and recognizes compensation costs only for those equity awards expected to vest. The Company recognized stock-based compensation expense during the years ended December 31, 2016, 2015 and 2014 as follows: Years Ended December 31, (in thousands) 2016 2015 2014 Employee awards: Research and development expense $ 6,503 $ 8,271 $ 6,864 Selling, general and administrative expense 7,331 7,022 6,065 Restructuring expense 1,371 — — Stock-based compensation expense for employee awards 15,205 15,293 12,929 Stock-based compensation expense for non-employee awards 1 58 268 Less: stock-based compensation expense capitalized to inventory (341 ) — — Total stock-based compensation expense $ 14,865 $ 15,351 $ 13,197 The following table summarizes stock option activity during the year ended December 31, 2016: (in thousands, except per share amounts) Options Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term (in years) Aggregate Intrinsic Value Outstanding at December 31, 2015 19,211 $ 5.72 6.24 $ 47,963 Granted 4,258 $ 5.57 Exercised (1,958 ) $ 3.29 Forfeited (2,487 ) $ 7.04 Outstanding at December 31, 2016 19,024 $ 5.77 5.97 $ 7,564 Vested and expected to vest at December 31, 2016 18,794 $ 5.76 5.93 $ 7,564 Exercisable at December 31, 2016 14,968 $ 5.49 5.24 $ 7,564 The weighted-average grant date fair value of stock options granted during the years ended December 31, 2016, 2015 and 2014 was $3.32, $5.80 and $3.41, respectively. The aggregate intrinsic value was calculated as the difference between the exercise price of the stock options and the fair value of the underlying common stock. The aggregate intrinsic value of options exercised during the years ended December 31, 2016, 2015 and 2014 was $5.6 million, $30.9 million and $19.8 million, respectively. As of December 31, 2016, there was $12.7 million of total unrecognized stock-based compensation expense related to unvested employee stock options. The Company expects to recognize this expense over a weighted-average period of approximately 1.7 years. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 17. Income Taxes As a result of losses incurred, the Company did not provide for any income taxes in the years ended December 31, 2016, 2015 or 2014. A reconciliation of the Company’s effective tax rate to the statutory federal income tax rate is as follows: Years Ended December 31, 2016 2015 2014 Federal income tax at statutory federal rate 35.0 % 35.0 % 35.0 % State taxes 0.7 1.0 3.1 Permanent differences (11.6 ) (6.4 ) (9.1 ) Stock-based compensation (2.2 ) (1.3 ) (1.7 ) Tax credits 28.0 21.3 30.5 Foreign rate differential — — (2.3 ) Change in deferred state tax rate (0.3 ) (2.3 ) — Other 4.5 (0.5 ) 4.5 Change in valuation allowance (54.1 ) (46.8 ) (60.0 ) Total — % — % — % During the year ended December 31, 2014, the Company recorded a deferred tax liability related to the embedded conversion option of the Convertible Notes though equity. This deferred tax liability is reflected in the deferred tax table below, but is appropriately excluded from the effective tax rate. Temporary differences that give rise to significant net deferred tax assets as of December 31, 2016 and 2015 are as follows: December 31, (in thousands) 2016 2015 Deferred tax assets Net operating losses $ 194,027 $ 182,992 Capitalized research and development expenses 15,854 21,444 Credit carryforwards 144,823 93,113 Depreciation 2,557 2,128 Deferred compensation 12,463 11,664 Accrued expenses 3,601 1,807 Deferred revenue 21,935 10,999 Other temporary differences 25,276 17,235 Total gross deferred tax assets 420,536 341,382 Valuation allowance (414,558 ) (326,577 ) Net deferred tax assets 5,978 14,805 Deferred tax liabilities Intangible assets (1,428 ) (2,667 ) Debt discount (4,550 ) (12,138 ) Net deferred taxes $ — $ — The Company concluded that there are no significant uncertain tax positions requiring recognition in the consolidated financial statements. The Company’s evaluation was performed for the tax years ended December 31, 2013 through 2016, the tax years which remain subject to examination by major tax jurisdictions as of December 31, 2016. However, to the extent the Company utilizes net operating losses from years prior to 2012, the statute remains open to the extent of the net operating losses utilized. The Company’s policy is to recognize interest and penalties for uncertain tax positions as a component of income tax expense. The Company has not recognized any interest and penalties historically through December 31, 2016. At December 31, 2016, the Company had net operating loss carryforwards for federal and state income tax purposes of $542.7 million and $367.4 million, respectively. Included in the federal and state net operating loss carryforwards is approximately $39.2 million and $25.2 million, respectively, of deduction related to the exercise of stock options. This amount represents an excess tax benefit, which will be realized when it results in reduction of cash taxes in accordance with ASC 718, Compensation – Stock Compensation Utilization of the net operating loss and research and development credit carryforwards may be subject to a substantial annual limitation under Section 382 of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), due to ownership change limitations that have occurred previously or that could occur in the future. These ownership changes may limit the amount of net operating loss and research and development credit carryforwards that can be utilized annually to offset future taxable income and tax. The Company completed an evaluation of ownership changes through September 30, 2016 to assess whether utilization of the Company’s net operating loss or research and development credit carryforwards would be subject to an annual limitation under Section 382 of the Internal Revenue Code. The Company believes that it may be able to utilize all of its tax attributes as a result of the analysis. To the extent an ownership change occurs in the future, the net operating loss and credit carryforwards may be subject to limitation. The Company has not yet conducted a study of its domestic research and development credit carryforwards and orphan drug credits. This study may result in an increase or decrease to the Company’s credit carryforwards; however, until a study is completed and any adjustment is known, no amounts are being presented as an uncertain tax position. A full valuation allowance has been provided against the Company’s credits, and if an adjustment is required, this adjustment would be offset by an adjustment to the valuation allowance. As a result, there would be no impact to the consolidated statements of operations and comprehensive loss or consolidated statements of cash flows if an adjustment were required. The change in the valuation allowance against the deferred tax assets in the years ended December 31, 2016, 2015 and 2014 was as follows: (in thousands) Balance at Beginning of Period Additions Deductions Balance at End of Period December 31, 2014 $ 207,304 $ 50,185 $ — $ 257,489 December 31, 2015 257,489 69,088 — 326,577 December 31, 2016 326,577 87,981 — 414,558 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 18. Commitments and Contingencies Operating Leases The Company leases its office, laboratory and manufacturing space under non-cancelable operating leases. During August 2012, the Company entered into an Indenture of Lease (the “Amended Lease”), which amended and restated its facility lease. The Amended Lease will terminate on June 30, 2019, but the Company retains an option to renew the Amended Lease with respect to all of the leased space for an additional period of five years. In March 2013, September 2013, February 2015 and July 2015, the Company entered into further facility lease amendments for additional space that are co-terminus with the Amended Lease. In total, the Company leases approximately 167,000 square feet at its corporate headquarters in Cambridge, Massachusetts. As part of the Amended Lease and subsequent amendments, the landlord agreed to reimburse the Company for a portion of tenant improvements made to the facility. As of December 31, 2016, the Company had received $9.5 million of tenant improvement reimbursements. Tenant improvement reimbursements are recorded within deferred rent and are amortized over the term of the lease as reductions to rent expense. In May 2016, the Company entered into a sublease agreement (the “Sublease”) whereby a subtenant agreed to lease 8,143 square feet of office and lab space from the Company. The Sublease terminates on December 31, 2017, but may be extended through June 30, 2019 if mutually agreed upon by the Company and the subtenant. Rental income received from the subtenant has been classified by the Company as reduction of rent expense. Total future minimum rental payments to be received by the Company from the subtenant as of December 31, 2016 are $0.6 million. Total rent expense was $8.6 million, $7.4 million and $5.9 million for the years ended December 31, 2016, 2015 and 2014, respectively. Future minimum lease payments to be made by the Company under non-cancelable operating leases as of December 31, 2016 are as follows: Years ended December 31, (in 2017 $ 8,108 2018 8,102 2019 4,082 Total future minimum lease payments $ 20,292 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 19. Related Party Transactions Related parties of the Company held approximately 7% of the outstanding shares of Silver Creek Series A and Series B preferred stock as of both December 31, 2016 and 2015. No shares of Silver Creek Series C preferred stock issued during December 2016 were held by related parties of the Company as of December 31, 2016. |
Retirement Plan
Retirement Plan | 12 Months Ended |
Dec. 31, 2016 | |
Postemployment Benefits [Abstract] | |
Retirement Plan | 20. Retirement Plan On May 31, 2002, the Company established a 401(k) defined contribution savings plan (the “401(k) Plan”) for its employees who meet certain service period and age requirements. Contributions are permitted up to the maximum allowed under the Internal Revenue Code of each covered employee’s salary. The 401(k) Plan permits the Company to contribute at its discretion. For the years ended December 31, 2016, 2015 and 2014, the Company made contributions of $1.3 million, $1.1 million and $0.8 million, respectively, to the 401(k) Plan. |
Selected Quarterly Financial Da
Selected Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Quarterly Financial Data (Unaudited) | 21. Selected Quarterly Financial Data (Unaudited) The following table contains quarterly financial information for 2016 and 2015. The Company believes that the following information reflects all normal recurring adjustments necessary for a fair statement of the information for the periods presented. The operating results for any quarter are not necessarily indicative of results for any future period. First Quarter Second Quarter Third Quarter Fourth Quarter (in thousands, except per share data) 2016 Product revenues, net $ 9,968 $ 12,851 $ 14,493 $ 15,752 License and collaboration revenues 11,313 19,332 12,417 44,057 Other revenues — 1,498 1,161 1,431 Cost of revenues 711 1,872 1,010 3,319 Research and development expenses 32,882 40,996 32,078 54,961 Selling, general and administrative expenses 17,795 20,680 18,048 24,206 Restructuring expenses — — 809 5,047 Net loss (38,658 ) (50,958 ) (30,275 ) (33,627 ) Net loss attributable to Merrimack Pharmaceuticals, Inc. (38,473 ) (50,750 ) (30,068 ) (32,449 ) Net loss per share available to common stockholders—basic and diluted (0.33 ) (0.40 ) (0.23 ) (0.25 ) First Quarter Second Quarter Third Quarter Fourth Quarter (in thousands, except per share data) 2015 Product revenues, net $ — $ — $ — $ 4,328 License and collaboration revenues 14,842 36,558 16,440 17,090 Cost of revenues — — — 46 Research and development expenses 35,679 42,806 37,763 44,740 Selling, general and administrative expenses 9,189 12,315 16,956 19,335 Net loss (34,432 ) (22,901 ) (42,386 ) (48,068 ) Net loss attributable to Merrimack Pharmaceuticals, Inc. (34,759 ) (22,778 ) (42,594 ) (47,826 ) Net loss per share available to common stockholders—basic and diluted (0.32 ) (0.21 ) (0.38 ) (0.41 ) |
Going Concern
Going Concern | 12 Months Ended |
Dec. 31, 2016 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Going Concern | 22. Going Concern In accordance with ASC 205-40, Going Concern As of December 31, 2016, the Company had unrestricted cash and cash equivalents of $21.5 million. Upon stockholder approval and the closing of the asset sale with Ipsen outlined more fully in Note 23, “Subsequent Events,” the Company will receive a $575.0 million upfront cash payment from Ipsen (subject to a working capital adjustment as provided in the Asset Sale Agreement). The Company expects to use these proceeds to declare and pay a special cash dividend of at least $200.0 million to stockholders and redeem the $175.0 million outstanding aggregate principal amount of 2022 Notes, which will require an additional make-whole premium payment of approximately $20.1 million. Additionally, if the asset sale is consummated and certain milestones under the Baxalta Agreement are met, the Company currently expects to receive up to an aggregate of $33.0 million in net milestone payments in 2017. The Company believes these potential net cash inflows, along with the completion of the headcount reduction and refocused research and development efforts that were announced in January 2017, will provide financial resources sufficient to fund operations into the second half of 2019. The consummation of the asset sale with Ipsen is contingent upon approval by the Company’s stockholders as well as other customary closing conditions. If the asset sale is not consummated, the Company will not receive the $575.0 million upfront cash payment from Ipsen, and the Company will need to obtain additional funding Based upon the above evaluation, the Company has concluded that there is substantial doubt as to its ability to continue as a going concern within one year after the date that the consolidated financial statements are issued. |
Subsequent Event
Subsequent Event | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | 23. Subsequent Events Asset Sale On January 7, 2017, the Company entered into the Asset Sale Agreement with Ipsen. Pursuant to the Asset Sale Agreement, Ipsen will acquire the Company’s right, title and interest in the non-cash assets, equipment, inventory, contracts and intellectual property primarily related to or used in the Commercial Business. Ipsen will not acquire the Company’s rights to $33.0 million in net milestone payments that may become payable pursuant to the Baxalta Agreement, among other excluded assets. Pursuant to the Asset Sale Agreement, Ipsen will pay the Company $575.0 million in cash (subject to a working capital adjustment as provided in the Asset Sale Agreement) and will assume certain related liabilities. Following the closing of the asset sale, the Company may be entitled to up to $450.0 million of additional payments based on achievement by or on behalf of Ipsen of certain milestone events related to FDA approval of ONIVYDE for certain indications. The consummation of the transaction is subject to customary closing conditions, including, among others: (i) the receipt of the approval of the Company’s stockholders; (ii) the expiration or termination of the required waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, which waiting periods expired on February 22, 2017; (iii) the absence of a breach of the Company’s representations and warranties that would cause a material adverse effect on the Commercial Business; (iv) the absence of a business material adverse effect; and (v) the performance of certain covenants in all material respects. The Asset Sale Agreement contains certain termination rights for the Company and Ipsen. Upon termination of the Asset Sale Agreement under specified circumstances, the Company would be required to pay Ipsen a termination fee of $25.0 million, including if the Asset Sale Agreement is terminated in connection with the Company accepting a superior proposal or because the Company’s Board of Directors has changed its recommendation of the sale to its stockholders. The termination fee will also be payable if the Asset Sale Agreement is terminated because the Company’s stockholders did not vote to adopt the Asset Sale Agreement and, prior to such termination, a proposal to acquire at least 50% of the consolidated assets of the Company with respect to the Commercial Business or at least 50% of the Company’s voting securities has been publicly disclosed and the Company enters into a definitive agreement with respect to such proposal within 12 months after such termination, which is subsequently consummated. In addition, the Company would be required to reimburse Ipsen for up to $3.0 million of its out-of-pocket expenses incurred in connection with the transaction and the Asset Sale Agreement if the Asset Sale Agreement is terminated because the Company’s stockholders do not vote to approve it. In addition to the foregoing termination rights, and subject to certain limitations, the Company or Ipsen may terminate the Asset Sale Agreement if the asset sale is not consummated by June 30, 2017. Ipsen has also agreed to sublease 68,409 square feet of the Company’s manufacturing facility at the closing of the asset sale. In addition, at the closing of the asset sale, the Company and Ipsen will enter into an intellectual property license agreement pursuant to which Ipsen will grant the Company an exclusive license with respect to the portion of the transferred patents relating to certain liposomal technology and a non-exclusive license to the remainder of the transferred patents, in both cases for use outside of the field in which the Commercial Business will operate. In turn, the Company will grant Ipsen a non-exclusive license with respect to the remaining patents owned by the Company at the closing for use in the field in which the Commercial Business will operate. January 2017 Corporate Restructuring On January 9, 2017, the Company announced that it will further reduce headcount in connection with the asset sale and the completion of its strategic pipeline review. Upon the closing of the asset sale, the Company will focus its development efforts on its MM-121, MM-141 and MM-310 programs. After the headcount reduction, the Company expects to have approximately 80 employees. The Company’s Board of Directors committed to this course of action on January 6, 2017, subject to the closing of the asset sale, which is contingent upon the closing conditions described above. The reduction in personnel is expected to be complete upon the later of the closing of the asset sale and March 10, 2017. The Company estimates that, if the asset sale closes, it will incur approximately $7.5 million to $8.5 million of restructuring expenses related to one-time employee termination benefits. These one-time employee termination benefits are comprised of severance, benefits and related costs, all of which are expected to result in cash expenditures. The specific timing of the incurrence and payment of these restructuring expenses is dependent upon the timing of the closing of the asset sale. Hiring of Chief Executive Officer On January 16, 2017, the Company announced the hiring of Richard Peters, M.D., Ph.D., as the Company’s new CEO, effective as of February 6, 2017. Dr. Peters was also elected as a member of the Company’s Board of Directors. The Company and Dr. Peters entered into an employment agreement commencing on February 6, 2017 whereby Dr. Peters will receive an annual base salary of $700,000 and is eligible for an annual bonus of up to 65% of his base salary. Dr. Peters also received a one-time signing bonus of $900,000. Subject to the further approval of the Company’s Board of Directors, the Company will also grant Dr. Peters an option to purchase a number of shares of the Company’s common stock equal to the lesser of (i) such number of shares that has a target grant date fair value of $3.5 million and (ii) 2.0 million shares, with an exercise price per share equal to the fair market value of the Company’s common stock on the date of grant. The option will vest over four years at the rate of 25% on February 6, 2018 and the remainder in equal quarterly installments over the following three years. Extension of Credit Facility Availability On February 23, 2017, the Company entered into an amendment to the Credit Agreement with Pharmakon whereby the availability of the credit facility was extended through April 27, 2017. The Company had not borrowed any amounts under the Credit Agreement as of March 1, 2017. |
Nature of the Business and Su30
Nature of the Business and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Segment Information | Segment Information Operating segments are defined as components of an enterprise engaging in business activities for which discrete financial information is available and regularly reviewed by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business as one operating segment and the Company operates in only one geographic region. |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The accompanying consolidated financial statements have been prepared under U.S. generally accepted accounting principles (“GAAP”) and include the accounts of the Company and its wholly owned subsidiary, Merrimack Pharmaceuticals (Bermuda) Ltd., which was merged with and into the Company during the third quarter of 2014. The Company also consolidates its majority owned subsidiary, Silver Creek Pharmaceuticals, Inc. (“Silver Creek”). All intercompany transactions and balances have been eliminated in consolidation. |
Use of Estimates | Use of Estimates GAAP requires the Company’s management to make estimates and judgments that may affect the reported amounts of assets, liabilities, revenues, expenses and related disclosures. The Company bases estimates and judgments on historical experience and on various other factors that it believes to be reasonable under the circumstances. The most significant estimates in these consolidated financial statements include, but may not be limited to, revenue recognition, including the estimated percentage of billable expenses in any particular budget period, periods of meaningful use of licensed products, estimated service periods and services to be completed under a collaboration, estimates used in accounting for revenue separability and recognition, estimates of discounts and allowances related to commercial sales of ONIVYDE, estimates utilized in the valuation of inventory, useful lives with respect to long-lived assets and intangible assets, accounting for stock-based compensation, contingencies, intangible assets, goodwill, in-process research and development (“IPR&D”), tax valuation reserves and accrued expenses. The Company’s actual results may differ from these estimates under different assumptions or conditions. The Company evaluates its estimates on an ongoing basis. Changes in estimates are reflected in reported results in the period in which they become known by the Company’s management. |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents are short-term, highly liquid investments with original maturities of three months or less at the date of purchase. Investments qualifying as cash equivalents primarily consist of money market funds, commercial paper, corporate notes and bonds and certificates of deposit. Cash accounts with any type of restriction are classified as restricted cash. If restrictions are expected to be lifted in the next twelve months, the restricted cash account is classified as current. As of December 31, 2016 and 2015, the Company recorded restricted cash of $0.8 million and $0.7 million, respectively, which was primarily related to the Company’s facility lease. |
Marketable Securities | Marketable Securities The Company classifies marketable securities with a remaining maturity when purchased of greater than three months as available-for-sale. Available-for-sale securities may consist of U.S. government agencies securities, commercial paper, corporate notes and bonds and certificates of deposit, which are maintained by an investment manager. Available-for-sale securities are carried at fair value, with the unrealized gains and losses included in other comprehensive income (loss) as a component of stockholders’ deficit until realized. To determine whether an other-than-temporary impairment exists, the Company performs an analysis to assess whether it intends to sell, or whether it would more likely than not be required to sell, the security before the expected recovery of the amortized cost basis. Where the Company intends to sell a security, or may be required to do so, the security’s decline in fair value is deemed to be other-than-temporary and the full amount of the unrealized loss is recognized on the statement of operations and comprehensive loss as an other-than-temporary impairment charge. When this is not the case, the Company performs additional analysis on all securities with unrealized losses to evaluate losses associated with the creditworthiness of the security. Credit losses are identified where the Company does not expect to receive cash flows, based on using a single best estimate, sufficient to recover the amortized cost basis of a security and amount of the loss recognized in other income (expense). Realized gains and losses are recognized in interest income. Any premium or discount arising at purchase is amortized and/or accreted to interest income. |
Inventory | Inventory The Company values its inventories at the lower of cost or net realizable value. The Company determines the cost of its inventories, which includes amounts related to materials and manufacturing overhead, on a first-in, first-out basis. The Company performs an assessment of the recoverability of capitalized inventory during each reporting period, and it writes down any excess and obsolete inventories to their realizable value in the period in which the impairment is first identified. Such impairment charges, should they occur, are recorded as a component of “Cost of revenues.” The Company capitalizes inventory costs associated with the Company’s products after regulatory approval when, based on management’s judgment, future commercialization is considered probable and the future economic benefit is expected to be realized. Inventory acquired prior to receipt of marketing approval of a product candidate is expensed as research and development expense as incurred. Inventory that can be used in either the production of clinical or commercial product is expensed as research and development expense when selected for use in a clinical manufacturing campaign. Shipping and handling costs for product shipments are recorded as incurred as a component of “Cost of revenues” along with amortization expense related to definite-lived intangible assets, costs associated with manufacturing the product and any inventory reserves or write-downs. |
Property and Equipment | Property and Equipment Property and equipment, including leasehold improvements, are recorded at cost and depreciated when placed into service using the straight-line method, based on their estimated useful lives as follows: Asset Classification Estimated Useful Life (in years) Lab equipment 3 - 7 IT equipment 3 - 7 Leaseholds improvements Lesser of useful life or lease term Furniture and fixtures 3 - 7 Costs for capital assets not yet placed into service have been capitalized as construction-in-progress and will be depreciated in accordance with the above guidelines once placed into service. Costs for repairs and maintenance are expensed as incurred, while major betterments are capitalized. The Company capitalizes interest cost incurred on funds used to construct property and equipment. The capitalized interest is recorded as part of the asset to which it relates and is depreciated over the asset’s estimated useful life. Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in earnings. The Company reviews its long-lived assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate. Each impairment test is based on a comparison of the undiscounted cash flow to the recorded value of the asset. If impairment is indicated, the asset will be written down to its estimated fair value on a discounted cash flow basis. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill and indefinite-lived intangible assets, including IPR&D assets, are evaluated for impairment on an annual basis or more frequently if an indicator of impairment is present. The Company performs its annual goodwill and IPR&D impairment evaluations on August 31 st When performing an evaluation of goodwill impairment, the Company has the option to first assess qualitative factors to determine whether it is necessary to perform the quantitative two-step impairment test. If the Company elects this option and finds, as a result of the qualitative assessment, that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, the quantitative two-step impairment test is required; otherwise, further testing is not required. This requires the Company to assess the impact of significant events, milestones and changes to expectations and activities that may have occurred since the last impairment evaluation. Significant changes to these estimates, judgments and assumptions could materially change the outcome of the impairment assessment. Alternatively, the Company may elect to not first assess qualitative factors and immediately perform the quantitative two-step impairment test. If such an election occurs, in the first step, the fair value of the Company’s reporting unit is compared to the carrying value. If the carrying value of the net assets assigned to the reporting unit exceeds the fair value of the reporting unit, then the second step of the impairment test is performed in order to determine the implied fair value of the reporting unit’s goodwill. If the carrying value of the reporting unit’s goodwill exceeds the implied fair value, then the Company would record an impairment loss equal to the difference. As described above, the Company operates in one operating segment, which is considered the only reporting unit. The Company commences amortization of indefinite-lived intangible assets, such as IPR&D, once the associated research and development efforts have been completed. The Company amortizes these product-related intangible assets over their estimated useful lives, and amortization expense is recorded as a component of “Cost of revenues.” The Company amortizes other definite-lived assets, such as core technology, over their estimated useful lives as a component of “Research and development expenses.” Definite-lived intangible assets are evaluated for impairment whenever events or circumstances indicate that the carrying value may not be fully recoverable. |
Accrued Expenses | Accrued Expenses As part of the process of preparing financial statements, the Company is required to estimate accrued expenses. This process involves identifying services that have been performed on the Company’s behalf and estimating the level of services performed and the associated costs incurred for such services where the Company has not yet been invoiced or otherwise notified of actual cost. The Company records these estimates in its consolidated financial statements as of each balance sheet date. Examples of estimated accrued expenses include: • fees due to contract research organizations in connection with preclinical and toxicology studies and clinical trials; • fees paid to investigative sites in connection with clinical trials; and • professional service fees. In accruing service fees, the Company estimates the time period over which services will be provided and the level of effort in each period. If the actual timing of the provision of services or the level of effort varies from the estimate, the Company adjusts the accrual accordingly. In the event that the Company does not identify costs that have been incurred or it under or overestimates the level of services performed or the costs of such services, its actual expenses could differ from such estimates. The date on which some services commence, the level of services performed on or before a given date and the cost of such services are often subjective determinations. The Company prepares its estimates based on the facts and circumstances known to it at the time and in accordance with GAAP. There have been no material changes in estimates for the periods presented. |
Non-Controlling Interest | Non-Controlling Interest Non-controlling interest represents the non-controlling stockholders’ proportionate share of preferred stock and net loss of the Company’s majority owned consolidated subsidiary, Silver Creek. The non-controlling stockholders’ proportionate share of the preferred stock in Silver Creek is reflected as non-controlling interest in the Company’s consolidated balance sheets as a component of mezzanine equity. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue when all of the following criteria are met: persuasive evidence of an arrangement exists; delivery has occurred or services have been rendered; the price to the customer is fixed or determinable; and collectability is reasonably assured. Product Revenues, Net The Company sells ONIVYDE to a limited number of specialty pharmaceutical distributors in the United States (collectively, its “Distributors”). The Company’s Distributors subsequently resell the products to healthcare providers. The Company recognizes revenue on product sales when title and risk of loss have passed to the Distributor, which is typically upon delivery. Product revenues are recorded net of applicable reserves for discounts and allowances. In order to conclude that the price is fixed or determinable, the Company must be able to reasonably estimate its net product revenues upon delivery to its Distributors. As such, the Company estimates its net product revenues by deducting from its gross product revenues trade allowances, estimated contractual discounts, estimated Medicaid rebates, estimated reserves for product returns and estimated costs of other incentives offered to patients. These discounts and allowances are based on estimates of the amounts earned or to be claimed on the related sales. The Company’s estimates take into consideration its historical experience, current contractual and statutory requirements, specific known market events and trends, industry data and forecasted Distributor buying and payment patterns. Actual amounts may ultimately differ from the Company’s estimates. If actual results vary, the Company will adjust these estimates, which could have an effect on earnings in the period of adjustment. Product revenue reserves and allowances that reduce gross revenue are categorized as follows: Trade Allowances: The Company pays fees to its Distributors for providing certain data to the Company as well as for maintaining contractual inventory and service levels. These trade allowances are recorded as a reduction to accounts receivable on the consolidated balance sheet at the time revenue is recognized. Rebates and Chargeback Discounts: The Company is subject to discount obligations under state Medicaid programs and the Public Health Service 340B Drug Pricing Program, contracts with Federal government entities purchasing via the Federal Supply Schedule and various private organizations, such as group purchasing organizations (collectively, its “Third-party Payors”). The Company estimates the rebates and chargeback discounts it will provide to Third-party Payors, based upon its estimated payor mix, and deducts these estimated amounts from its gross product revenues at the time revenue is recognized. Chargeback discounts are processed when the Third-party Payor purchases the product at a discount from the Distributor, who then in turn charges back to the Company the difference between the price initially paid by the Distributor and the discounted price paid by the Third-party Payor. These chargeback discounts are recorded as a reduction to accounts receivable on the consolidated balance sheet at the time revenue is recognized. Rebates that are invoiced directly to the Company are recorded as accrued liabilities on the consolidated balance sheet at the time revenue is recognized. Product Returns: An allowance for product returns is established for returns expected to be made by Distributors and is recorded at the time revenue is recognized, resulting in a reduction to product sales. In accordance with contractual terms, Distributors have the right to return unopened and undamaged product that is within a permissible number of months before and after the product’s expiration date, subject to contractual limitations. The Company has the ability to monitor inventory levels and the shelf life of product at Distributors and can contractually control the amount of inventory that is sold to Distributors. Based on inventory levels held by Distributors and the structure of the Company’s distribution model, the Company has concluded that it has the ability to reasonably estimate product returns at the time revenue is recognized. The Company’s estimated rate of return is based on historical rates of return for comparable oncology products. Other Incentives: The Company offers co-pay mitigation support to commercially insured patients. The Company’s co-pay mitigation program is intended to reduce each participating patient’s portion of the financial responsibility for a product’s purchase price to a specified dollar amount. Based upon the terms of the Company’s co-pay mitigation program, the Company estimates average co-pay mitigation amounts in order to establish a reserve for co-pay mitigation claims and deducts these estimated amounts from its gross product revenues at the later of the date that (i) the revenues are recognized or (ii) the incentive is offered. Claims under the Company’s co-pay mitigation program are subject to expiration. License and Collaboration Revenues The Company enters into biopharmaceutical product development agreements with collaborative partners for the research and development of therapeutic and diagnostic products. The terms of the agreements may include nonrefundable signing and licensing fees, funding for research, development and manufacturing, milestone payments and royalties or profit-sharing on any product sales derived from collaborations. These multiple-element arrangements are analyzed to determine whether the deliverables can be separated or whether they must be accounted for as a single unit of accounting. The revenue recognition guidance related to multiple-element arrangements requires entities to separate and allocate consideration in a multiple-element arrangement according to the relative selling price of each deliverable. The fair value of deliverables under the arrangement may be derived using a best estimate of selling price if vendor specific objective evidence and third-party evidence are not available. Deliverables under the arrangement will be separate units of accounting provided that a delivered item has value to the customer on a stand-alone basis and if the arrangement does not include a general right of return relative to the delivered item and delivery or performance of the undelivered item is considered probable and substantially in the control of the vendor. In September 2014, the Company entered into a license and collaboration agreement (the “Baxalta Agreement”) with Baxter International Inc., Baxter Healthcare Corporation and Baxter Healthcare SA (collectively, “Baxter”) for the development and commercialization of ONIVYDE outside of the United States and Taiwan (the “Licensed Territory”). In connection with Baxter International Inc.’s separation of the Baxalta business, the Baxalta Agreement was assigned to Baxalta Incorporated, Baxalta US Inc. and Baxalta GmbH (collectively, “Baxalta”) during the second quarter of 2015. The Baxalta Agreement was evaluated under the accounting guidance on revenue recognition for multiple-element arrangements. The Company determined that the obligations under this agreement represent a single unit of accounting and that the agreement represents a services agreement. As a result, the Company has estimated the level of effort expected to be completed as a result of providing the identified deliverables and will recognize revenue related to the agreement based on proportional performance as effort is completed over the expected services period. The Company also entered into a collaboration agreement with Watson Laboratories, Inc. (“Actavis”) in November 2013, which was evaluated under the accounting guidance on revenue recognition for multiple-element arrangements. See Note 4, “License and Collaboration Agreements,” for additional information. Whenever the Company determines that an arrangement should be accounted for as a single unit of accounting, it determines the period over which the performance obligations would be performed and revenue would be recognized. If the Company cannot reasonably estimate the timing and the level of effort to complete its performance obligations under the arrangement, then revenue under the arrangement is recognized on a straight-line basis over the period the Company expects to complete its performance obligations. The Company’s collaboration agreements may include additional payments upon the achievement of performance-based milestones. As milestones are achieved, a portion of the milestone payment, equal to the percentage of the total time that the Company has performed the performance obligations to date divided by the total estimated time to complete the performance obligations, multiplied by the amount of the milestone payment, will be recognized as revenue upon achievement of such milestone. The remaining portion of the milestone will be recognized over the remaining performance period. Milestones that are tied to regulatory approvals are not considered probable of being achieved until such approval is received. Milestones tied to counterparty performance are not included in the Company’s revenue model until the performance conditions are met. Other Revenues The Company is a party to separate commercial supply agreements with Baxalta and PharmaEngine, Inc. (“PharmaEngine”) pursuant to which the Company supplies ONIVYDE to these entities. Revenue is recognized under these commercial supply arrangements when the counterparty takes delivery of the commercial supply product and when the other general revenue recognition criteria outlined above are met. The Company is also eligible to receive royalty revenues on Baxalta’s net sales of ONIVYDE in the Licensed Territory. The Company recognizes royalty revenues in the period that the related sales occur. |
Research and Development Expenses | Research and Development Expenses Research and development expenses are charged to expense as incurred. Research and development expenses are comprised of costs incurred in performing research and development activities, including personnel-related costs, stock-based compensation, facilities, research-related overhead, clinical trial costs, contracted services, research-related manufacturing, license fees and other external costs. The Company accounts for nonrefundable advance payments for goods and services that will be used in future research and development activities as expenses when the services have been performed or when the goods have been received rather than when the payment is made. |
Selling, General and Administrative Expenses | Selling, General and Administrative Expenses Selling, general and administrative expenses are comprised of salaries and other related costs for personnel, including stock-based compensation expenses and benefits, in the Company’s commercial, legal, intellectual property, business development, finance, information technology, corporate communications, investor relations and human resources departments. Other selling, general and administrative expenses include costs to support commercial sales, employee training and development, board of directors costs, depreciation, insurance expenses, facility-related costs not otherwise included in research and development expenses, professional fees for legal services, including patent-related expenses, and accounting and information technology services. In connection with the commercial launch of ONIVYDE on October 26, 2015, the Company began incurring advertising expenses. Advertising expenses are expensed as incurred as a component of selling, general and administrative expenses. For the years ended December 31, 2016 and 2015, advertising expenses totaled $4.5 million and $1.0 million, respectively. |
Stock-Based Compensation Expense | Stock-Based Compensation Expense The Company accounts for its stock-based compensation awards in accordance with Accounting Standards Codification (“ASC”) 718, Compensation – Stock Compensation The Company records stock options issued to non-employees at fair value, remeasures to reflect the current fair value at each reporting period and recognizes expense over the related service period. When applicable, these equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. |
Comprehensive Loss | Comprehensive Loss Comprehensive loss consists of net loss and unrealized gains and losses on available-for-sale marketable securities. |
Other (Expense) Income, Net | Other (Expense) Income, Net The Company records income related to tax incentive awards, foreign currency gains and losses and other income or expense-related items as components of “Other (expense) income, net” within the consolidated statements of operations and comprehensive loss. The Company has been awarded tax incentives by the Massachusetts Life Sciences Center (“MLSC”), an independent agency of the Commonwealth of Massachusetts. These tax incentives require that the Company achieve certain hiring targets. Failure to maintain the additional headcount in subsequent periods could require the Company to repay some or all of the incentives. The Company recognizes the benefit of these incentives on a straight-line basis over the five-year performance period of each award, beginning when the Company achieves the hiring goal target, with a cumulative catch-up recognized in the period that the hiring goal target is achieved. The Company received MLSC tax incentives in 2011, 2013, 2014 and 2015 totaling $3.8 million in the aggregate, allowing the Company to monetize approximately $3.4 million of state research and development tax credits. As a result of the October 2016 corporate restructuring described more fully in Note 13, “Restructuring Activities,” the Company determined that it would be required to repay a portion of the 2014 and 2015 tax incentives received from the MLSC in the aggregate amount of $1.3 million. Such amounts have been classified as current liabilities as of December 31, 2016. The Company recognized $0.1 million, $0.7 million and $0.4 million in income related to these MLSC tax incentives during the years ended December 31, 2016, 2015 and 2014, respectively. |
Income Taxes | Income Taxes The Company accounts for income taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted rates in effect for the year in which these temporary differences are expected to be recovered or settled. Valuation allowances are provided if based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company provides reserves for potential payments of tax to various tax authorities related to uncertain tax positions and other issues. Reserves are based on a determination of whether and how much of a tax benefit taken by the Company in its tax filing is more likely than not to be realized following resolution of any potential contingencies present related to the tax benefit. Potential interest and penalties associated with such uncertain tax positions are recorded as components of income tax expense. To date, the Company has not taken any uncertain tax positions or recorded any reserves, interest or penalties. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that subject the Company to credit risk consist primarily of cash, cash equivalents and marketable securities. The Company places its cash deposits in accredited financial institutions and, therefore, the Company’s management believes these funds are subject to minimal credit risk. The Company invests cash equivalents and marketable securities in money market funds, U.S. government agencies securities and various corporate debt securities. Credit risk in these securities is reduced as a result of the Company’s investment policy to limit the amount invested in any one issue or any single issuer and to only invest in high credit quality securities. The Company has no significant off-balance sheet concentrations of credit risk such as foreign currency exchange contracts, option contracts or other hedging arrangements. The Company also is subject to credit risk from its accounts receivable related to its product sales and collaborators. The Company evaluates the creditworthiness of each of its customers and has determined that all of its customers are creditworthy. To date, the Company has not experienced significant losses with respect to the collection of its accounts receivable. Gross revenues from each of the Company’s customers who individually accounted for 10% or more of total gross revenues for the years ended December 31, 2016, 2015 and 2014 consisted of the following: Years Ended December 31, 2016 2015 2014 Baxalta 60% 93% 10% Sanofi — — 90% AmerisourceBergen Corporation 15% <10% — McKesson Corporation 16% <10% — Gross accounts receivable related to each of the Company’s customers who individually accounted for 10% or more of total gross accounts receivable as of December 31, 2016 and 2015 consisted of the following: December 31, 2016 2015 Baxalta 20% 29% AmerisourceBergen Corporation 25% 29% McKesson Corporation 32% 25% Cardinal Health, Inc. 21% 16% |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606),” which supersedes all existing revenue recognition requirements, including most industry-specific guidance. The new standard requires a company to recognize revenue when it transfers goods or services to customers in an amount that reflects the consideration that the company expects to receive for those goods or services. This guidance was originally effective for interim and annual periods beginning after December 15, 2016 and allows for adoption using a full retrospective method, or a modified retrospective method. Early adoption was originally not permitted. Subsequent to the issuance of ASU 2014-09, the FASB also issued the following updates related to ASC 606, Revenue from Contracts with Customers: • In August 2015, the FASB issued ASU 2015-14, “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date,” whereby the effective date for the new revenue standard was deferred by one year. As a result of ASU 2015-14, the new revenue standard is now effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017, and early adoption is now permitted for annual periods beginning after December 15, 2016, including interim periods within that annual period. • In March 2016, the FASB issued ASU 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net),” to clarify the implementation guidance on principal versus agent considerations. • In April 2016, the FASB issued ASU 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing,” to clarify the principle for determining whether a good or service is “separately identifiable” from other promises in the contract and to clarify the categorization of licenses of intellectual property. • In May 2016, the FASB issued ASU 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Technical Expedients,” to clarify guidance on transition, determining collectibility, non-cash consideration and the presentation of sales and other similar taxes. • In December 2016, the FASB issued ASU 2016-20, “Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers,” that allows entities not to make qualitative disclosures about remaining performance obligations in certain cases, adds disclosure requirements for entities that elect certain optional exemptions and adds twelve additional technical corrections and improvements to the new revenue standard. The Company is currently evaluating the potential impact that the adoption of this guidance and the related transition guidance may have on the consolidated financial statements, including the adoption method to be utilized. In August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements – Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” outlining management’s responsibility to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date the financial statements are issued and providing guidance on determining when and how to disclose going concern uncertainties in the financial statements. This guidance is effective for annual and interim reporting periods ending after December 15, 2016, and the Company adopted this guidance for the year ended December 31, 2016, as described more fully in Note 22, “Going Concern.” In January 2016, the FASB issued ASU 2016-01, “Financial Statements – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Liabilities,” which contains a number of provisions related to the measurement, presentation and disclosure of financial instruments. This guidance will be effective for annual reporting periods beginning after December 15, 2017, including interim periods within those annual periods. Early adoption of this guidance is not permitted with the exception of certain specific presentation requirements that are not currently applicable to the Company. The Company does not anticipate a material impact to the consolidated financial statements as a result of the adoption of this guidance. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842),” which supersedes all existing lease accounting guidance within ASC 840, Leases In March 2016, the FASB issued ASU 2016-06, “Derivatives and Hedging (Topic 815): Contingent Put and Call Options in Debt Instruments,” which clarifies the requirements for assessing whether contingent call or put options that can accelerate the repayment of principal on debt instruments are clearly and closely related to their debt hosts. This guidance will be effective for annual reporting periods beginning after December 15, 2016, including interim periods within those annual reporting periods, and early adoption is permitted. The Company does not anticipate a material impact to the consolidated financial statements as a result of the adoption of this guidance. In March 2016, the FASB issued ASU 2016-09, “Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting,” which simplifies several areas of accounting for share-based payment transactions, including the income tax consequences, classification of awards as either liabilities or equity and classification of excess tax benefits on the statement of cash flows. This guidance also permits a new entity-wide accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures when they occur. This guidance will be effective for annual reporting periods beginning after December 15, 2016, including interim periods within those annual reporting periods, and early adoption is permitted. An entity that elects early adoption must adopt all of the amendments in the same period. The Company is currently evaluating the potential impact that the adoption of this guidance may have on the consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which represents a new credit loss standard that will change the impairment model for most financial assets and certain other financial instruments. Specifically, this guidance will require entities to utilize a new “expected loss” model as it relates to trade and other receivables. In addition, entities will be required to recognize an allowance for estimated credit losses on available-for-sale debt securities, regardless of the length of time that a security has been in an unrealized loss position. This guidance will be effective for annual reporting periods beginning after December 15, 2019, including interim periods within those annual reporting periods, and early adoption is permitted. The Company is currently evaluating the potential impact that the adoption of this guidance may have on the consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments,” which is intended to reduce diversity in practice in how entities present certain types of cash transactions in the statement of cash flows. This guidance also clarifies how the predominance principle should be applied when classifying cash receipts and cash payments that have attributes of more than one class of cash flows. This guidance will be effective for annual reporting periods beginning after December 15, 2017, including interim periods within those annual reporting periods, and early adoption is permitted. An entity that elects early adoption must adopt all of the amendments in the same period. The Company does not anticipate a material impact to the consolidated financial statements as a result of the adoption of this guidance. In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash,” which will require entities to show the change in the total of cash, cash equivalents, restricted cash and restricted cash equivalents within the statement of cash flows. As a result, entities will no longer separately present transfers between unrestricted cash and restricted cash. This guidance will be effective for annual reporting periods beginning after December 15, 2017, including interim periods within those annual reporting periods, and early adoption is permitted. The Company does not anticipate a material impact to the consolidated financial statements as a result of the adoption of this guidance. In January 2017, the FASB issued ASU 2017-04, “Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment,” which will eliminate the requirement to calculate the implied fair value of goodwill, commonly referred to as “Step 2” in the current goodwill impairment test. An entity will still have the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. This guidance will be effective for annual and interim impairment tests performed in annual reporting periods beginning after December 15, 2020, and early adoption is permitted for annual or interim impairment tests performed after January 1, 2017. The Company is currently evaluating the potential impact that the adoption of this guidance may have on the consolidated financial statements. Other accounting standards that have been issued by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s consolidated financial statements upon adoption. |
Nature of the Business and Su31
Nature of the Business and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Schedule of Estimated Useful Lives of Property and Equipment Including Leasehold Improvements | Property and equipment, including leasehold improvements, are recorded at cost and depreciated when placed into service using the straight-line method, based on their estimated useful lives as follows: Asset Classification Estimated Useful Life (in years) Lab equipment 3 - 7 IT equipment 3 - 7 Leaseholds improvements Lesser of useful life or lease term Furniture and fixtures 3 - 7 |
Schedules of Concentration of Risk by Risk Factor | Gross revenues from each of the Company’s customers who individually accounted for 10% or more of total gross revenues for the years ended December 31, 2016, 2015 and 2014 consisted of the following: Years Ended December 31, 2016 2015 2014 Baxalta 60% 93% 10% Sanofi — — 90% AmerisourceBergen Corporation 15% <10% — McKesson Corporation 16% <10% — Gross accounts receivable related to each of the Company’s customers who individually accounted for 10% or more of total gross accounts receivable as of December 31, 2016 and 2015 consisted of the following: December 31, 2016 2015 Baxalta 20% 29% AmerisourceBergen Corporation 25% 29% McKesson Corporation 32% 25% Cardinal Health, Inc. 21% 16% |
Net Loss Per Common Share (Tabl
Net Loss Per Common Share (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of Securities Excluded from Computation of Diluted Loss Per Share | Securities excluded from the calculation of diluted loss per share are shown in the chart below: Years Ended December 31, (in thousands) 2016 2015 2014 Common stock warrants — — 2,381 Outstanding options to purchase common stock 19,025 19,211 19,567 Conversion of the Convertible Notes 12,158 25,000 25,000 |
License and Collaboration Agr33
License and Collaboration Agreements (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Baxalta [Member] | |
Schedule of Revenue Recognized and Assets and Liabilities under Collaborative Arrangements | During the years ended December 31, 2016, 2015 and 2014, the Company recognized license and collaboration revenues based on the following components of the Baxalta Agreement: Years Ended December 31, (in thousands) 2016 2015 2014 Proportional performance revenue recognition model $ 47,119 $ 64,930 $ 10,460 Substantive milestones 40,000 20,000 — Total $ 87,119 $ 84,930 $ 10,460 During the year ended December 31, 2016, the Company also recognized royalty revenues of $0.2 million related to the Baxalta Agreement. As of December 31, 2016 and 2015, the Company maintained the following assets and liabilities related to the Baxalta Agreement: December 31, (in thousands) 2016 2015 Accounts receivable, billed $ 860 $ 1,336 Accounts receivable, unbilled 581 626 Deferred revenues 56,779 97,365 |
Sanofi [Member] | |
Schedule of Revenue Recognized and Assets and Liabilities under Collaborative Arrangements | The Company recognized no revenue under the Sanofi agreement during the years ended December 31, 2016 or 2015. During the year ended December 31, 2014, the Company recognized revenue based on the following components of the Sanofi agreement: (in thousands) Year Ended December 31, 2014 Upfront payment $ 39,306 Milestone payment 16,377 Development services 18,904 Manufacturing services and other 17,709 Total $ 92,296 |
Product Revenue Reserves and 34
Product Revenue Reserves and Allowances (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Product Revenue Reserves And Allowances [Abstract] | |
Summary of Product Revenue Reserve and Allowance Categories | The following table summarizes activity in each of the product revenue reserve and allowance categories for the year ended December 31, 2016: (in thousands) Trade Allowances Rebates and Chargeback Discounts Product Returns Other Incentives Total Balance at December 31, 2015 $ 138 $ 362 $ 32 $ 8 $ 540 Provisions related to sales in the current year 1,900 5,928 397 5 8,230 Adjustments related to sales in the prior year — (213 ) — — (213 ) Credits and payments made (1,507 ) (5,077 ) (26 ) (7 ) (6,617 ) Balance at December 31, 2016 $ 531 $ 1,000 $ 403 $ 6 $ 1,940 |
Fair Value of Financial Instr35
Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Summary of Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following tables summarize assets and liabilities measured at fair value on a recurring basis as of December 31, 2016 and 2015 and the input categories associated with those assets and liabilities: December 31, 2016 (in thousands) Level 1 Level 2 Level 3 Assets: Money market funds $ 12,373 $ — $ — Totals $ 12,373 $ — $ — Liabilities: Silver Creek warrant liability $ — $ — $ 1,499 Totals $ — $ — $ 1,499 December 31, 2015 (in thousands) Level 1 Level 2 Level 3 Assets: Money market funds $ 704 $ — $ — Totals $ 704 $ — $ — |
Inventory (Tables)
Inventory (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventory as of December 31, 2016 and 2015 consisted of the following: December 31, (in thousands) 2016 2015 Raw materials $ 4,483 $ 900 Work in process 8,651 2,743 Finished goods 1,420 74 Total inventory $ 14,554 $ 3,717 |
Goodwill and Intangible Asset37
Goodwill and Intangible Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill and Intangible Assets | Goodwill and intangible assets as of December 31, 2016 and 2015 consisted of the following: December 31, 2016 (in thousands) Gross C Accumulated Amortization Net Carrying Value Nano-carrier technology intangible asset $ 3,200 $ (2,315 ) $ 885 ONIVYDE intangible asset 3,400 (308 ) 3,092 Goodwill 3,605 — 3,605 Totals $ 10,205 $ (2,623 ) $ 7,582 December 31, 2015 (in thousands) Gross C Accumulated Amortization Net Carrying Value Nano-carrier technology intangible asset $ 3,200 $ (1,995 ) $ 1,205 ONIVYDE intangible asset 3,400 (50 ) 3,350 IPR&D 2,800 — 2,800 Goodwill 3,605 — 3,605 Totals $ 13,005 $ (2,045 ) $ 10,960 |
Schedule of Expected Future Amortization Expense for Intangible Assets for the Next Five-Year Period | Future amortization expense for the next five-year period is expected to be as follows: Years Ended December 31, (in thousands) 2017 $ 578 2018 578 2019 503 2020 258 2021 258 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property Plant And Equipment [Abstract] | |
Schedule of Property and Equipment, Net | Property and equipment, net as of December 31, 2016 and 2015 consisted of the following: December 31, (in thousands) 2016 2015 Lab equipment $ 20,752 $ 19,305 IT equipment 8,601 7,742 Leasehold improvements 21,153 21,026 Furniture and fixtures 959 910 Construction in process 515 2,243 Total property and equipment, gross 51,980 51,226 Less: Accumulated depreciation (36,215 ) (29,311 ) Total property and equipment, net $ 15,765 $ 21,915 |
Accounts Payable, Accrued Exp39
Accounts Payable, Accrued Expenses and Other (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Payables And Accruals [Abstract] | |
Schedule of Accounts Payable, Accrued Expenses and Other | Accounts payable, accrued expenses and other as of December 31, 2016 and 2015 consisted of the following: December 31, (in thousands) 2016 2015 Accounts payable $ 3,384 $ 5,049 Accrued goods and services 15,760 14,295 Accrued clinical trial costs 11,260 12,764 Accrued drug purchase costs 910 7,460 Accrued payroll and related benefits 9,150 9,009 Accrued restructuring expenses 774 — Accrued asset sale transaction costs 3,724 — Accrued interest 2,100 3,041 Accrued dividends payable 19 19 Silver Creek warrant liability 1,499 — Deferred tax incentives 1,402 445 Total accounts payable, accrued expenses and other $ 49,982 $ 52,082 |
Borrowings (Tables)
Borrowings (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Future Minimum Payments under the Loans Payable | Future minimum payments under outstanding borrowings as of December 31, 2016 are as follows: (in thousands) Convertible Notes 2022 Notes 2017 $ 2,736 $ 20,125 2018 2,736 20,125 2019 2,736 62,617 2020 63,527 57,586 2021 and thereafter — 100,078 Total 71,735 260,531 Less interest (10,943 ) (85,531 ) Less unamortized discount (13,842 ) (5,089 ) Less current portion — — Long-term debt $ 46,950 $ 169,911 |
Restructuring Activities (Table
Restructuring Activities (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Restructuring And Related Activities [Abstract] | |
Summary of Charges Related to Restructuring Activities | The following table summarizes the charges related to the restructuring activities as of December 31, 2016: (in thousands) Expenses Less: Payments Less: Non-Cash Expenses Accrued Restructuring Expenses at December 31, 2016 Severance, benefits and related costs due to workforce reduction $ 5,856 $ (3,711 ) $ (1,371 ) $ 774 Totals $ 5,856 $ (3,711 ) $ (1,371 ) $ 774 |
Common Stock Warrants (Tables)
Common Stock Warrants (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Text Block [Abstract] | |
Schedule of Common Stock Warrant Activity of the Company | The following is a description of the common stock warrant activity of the Company: (in thousands, except per share amounts) Warrants for the Purchase of Common Weighted Average Exercise Price Balance at December 31, 2013 2,777 $ 3.05 Exercised (396 ) $ 3.38 Balance at December 31, 2014 2,381 $ 3.00 Exercised (2,355 ) $ 3.00 Cancelled (26 ) $ 3.00 Balance at December 31, 2015 — $ — |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Schedule of Assumptions Used to Calculate Fair Value of Options Granted to Employees | The fair value of stock options granted to employees during the years ended December 31, 2016, 2015 and 2014 was estimated at the date of grant using the following assumptions: Years Ended December 31, 2016 2015 2014 Risk-free interest rate 1.1 – 2.0% 1.5 – 1.8% 1.6 – 2.0% Expected dividend yield 0% 0% 0% Expected term 5.0 – 5.8 years 5.0 – 5.9 years 5.0 – 5.9 years Expected volatility 67 – 69% 66 – 67% 64 – 72% |
Schedule of Recognized Stock-Based Compensation Expense | The Company recognized stock-based compensation expense during the years ended December 31, 2016, 2015 and 2014 as follows: Years Ended December 31, (in thousands) 2016 2015 2014 Employee awards: Research and development expense $ 6,503 $ 8,271 $ 6,864 Selling, general and administrative expense 7,331 7,022 6,065 Restructuring expense 1,371 — — Stock-based compensation expense for employee awards 15,205 15,293 12,929 Stock-based compensation expense for non-employee awards 1 58 268 Less: stock-based compensation expense capitalized to inventory (341 ) — — Total stock-based compensation expense $ 14,865 $ 15,351 $ 13,197 |
Summary of Stock Option Activity | The following table summarizes stock option activity during the year ended December 31, 2016: (in thousands, except per share amounts) Options Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term (in years) Aggregate Intrinsic Value Outstanding at December 31, 2015 19,211 $ 5.72 6.24 $ 47,963 Granted 4,258 $ 5.57 Exercised (1,958 ) $ 3.29 Forfeited (2,487 ) $ 7.04 Outstanding at December 31, 2016 19,024 $ 5.77 5.97 $ 7,564 Vested and expected to vest at December 31, 2016 18,794 $ 5.76 5.93 $ 7,564 Exercisable at December 31, 2016 14,968 $ 5.49 5.24 $ 7,564 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of Reconciliation of the Company's Effective Tax Rate to the Statutory Federal Income Tax Rate | A reconciliation of the Company’s effective tax rate to the statutory federal income tax rate is as follows: Years Ended December 31, 2016 2015 2014 Federal income tax at statutory federal rate 35.0 % 35.0 % 35.0 % State taxes 0.7 1.0 3.1 Permanent differences (11.6 ) (6.4 ) (9.1 ) Stock-based compensation (2.2 ) (1.3 ) (1.7 ) Tax credits 28.0 21.3 30.5 Foreign rate differential — — (2.3 ) Change in deferred state tax rate (0.3 ) (2.3 ) — Other 4.5 (0.5 ) 4.5 Change in valuation allowance (54.1 ) (46.8 ) (60.0 ) Total — % — % — % |
Schedule of Temporary Differences That Give Rise to Significant Net Deferred Tax Assets | Temporary differences that give rise to significant net deferred tax assets as of December 31, 2016 and 2015 are as follows: December 31, (in thousands) 2016 2015 Deferred tax assets Net operating losses $ 194,027 $ 182,992 Capitalized research and development expenses 15,854 21,444 Credit carryforwards 144,823 93,113 Depreciation 2,557 2,128 Deferred compensation 12,463 11,664 Accrued expenses 3,601 1,807 Deferred revenue 21,935 10,999 Other temporary differences 25,276 17,235 Total gross deferred tax assets 420,536 341,382 Valuation allowance (414,558 ) (326,577 ) Net deferred tax assets 5,978 14,805 Deferred tax liabilities Intangible assets (1,428 ) (2,667 ) Debt discount (4,550 ) (12,138 ) Net deferred taxes $ — $ — |
Schedule of Changes in the Valuation Allowance | The change in the valuation allowance against the deferred tax assets in the years ended December 31, 2016, 2015 and 2014 was as follows: (in thousands) Balance at Beginning of Period Additions Deductions Balance at End of Period December 31, 2014 $ 207,304 $ 50,185 $ — $ 257,489 December 31, 2015 257,489 69,088 — 326,577 December 31, 2016 326,577 87,981 — 414,558 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Lease Payments Under Non-cancelable Operating Leases | Future minimum lease payments to be made by the Company under non-cancelable operating leases as of December 31, 2016 are as follows: Years ended December 31, (in 2017 $ 8,108 2018 8,102 2019 4,082 Total future minimum lease payments $ 20,292 |
Selected Quarterly Financial 46
Selected Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information | The following table contains quarterly financial information for 2016 and 2015. The Company believes that the following information reflects all normal recurring adjustments necessary for a fair statement of the information for the periods presented. The operating results for any quarter are not necessarily indicative of results for any future period. First Quarter Second Quarter Third Quarter Fourth Quarter (in thousands, except per share data) 2016 Product revenues, net $ 9,968 $ 12,851 $ 14,493 $ 15,752 License and collaboration revenues 11,313 19,332 12,417 44,057 Other revenues — 1,498 1,161 1,431 Cost of revenues 711 1,872 1,010 3,319 Research and development expenses 32,882 40,996 32,078 54,961 Selling, general and administrative expenses 17,795 20,680 18,048 24,206 Restructuring expenses — — 809 5,047 Net loss (38,658 ) (50,958 ) (30,275 ) (33,627 ) Net loss attributable to Merrimack Pharmaceuticals, Inc. (38,473 ) (50,750 ) (30,068 ) (32,449 ) Net loss per share available to common stockholders—basic and diluted (0.33 ) (0.40 ) (0.23 ) (0.25 ) First Quarter Second Quarter Third Quarter Fourth Quarter (in thousands, except per share data) 2015 Product revenues, net $ — $ — $ — $ 4,328 License and collaboration revenues 14,842 36,558 16,440 17,090 Cost of revenues — — — 46 Research and development expenses 35,679 42,806 37,763 44,740 Selling, general and administrative expenses 9,189 12,315 16,956 19,335 Net loss (34,432 ) (22,901 ) (42,386 ) (48,068 ) Net loss attributable to Merrimack Pharmaceuticals, Inc. (34,759 ) (22,778 ) (42,594 ) (47,826 ) Net loss per share available to common stockholders—basic and diluted (0.32 ) (0.21 ) (0.38 ) (0.41 ) |
Nature of the Business and Su47
Nature of the Business and Summary of Significant Accounting Policies - Additional Information (Detail) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016USD ($)SegmentRegion | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Summary Of Significant Accounting Policies [Line Items] | |||
Number of operating segments | Segment | 1 | ||
Number of geographic regions | Region | 1 | ||
Original maturities | Three months or less | ||
Restricted cash | $ 0.8 | $ 0.7 | |
Advertising expenses | $ 4.5 | 1 | |
Performance period | 5 years | ||
Tax incentive awarded | $ 3.8 | ||
State research and development tax credits monetized | 3.4 | ||
Amount of tax incentives required to repay | 1.3 | ||
Amount of benefit recognized | $ 0.1 | $ 0.7 | $ 0.4 |
Minimum [Member] | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Expected remaining maturities period of marketable securities classified as available-for-sale | 3 months |
Nature of the Business and Su48
Nature of the Business and Summary of Significant Accounting Policies - Schedule of Estimated Useful Lives of Property and Equipment Including Leasehold Improvements (Detail) | 12 Months Ended |
Dec. 31, 2016 | |
Leasehold Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | Lesser of useful life or lease term |
Minimum [Member] | Lab Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 3 years |
Minimum [Member] | IT Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 3 years |
Minimum [Member] | Furniture and Fixtures [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 3 years |
Maximum [Member] | Lab Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 7 years |
Maximum [Member] | IT Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 7 years |
Maximum [Member] | Furniture and Fixtures [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 7 years |
Nature of the Business and Su49
Nature of the Business and Summary of Significant Accounting Policies - Schedules of Concentration of Risk by Risk Factor - Gross Sales Revenue (Detail) - Sales Revenue, Net [Member] - Customer Concentration Risk [Member] | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Baxalta [Member] | |||
Concentration Risk [Line Items] | |||
Customer's accounted for more than 10% percent gross revenue | 60.00% | 93.00% | 10.00% |
Sanofi [Member] | |||
Concentration Risk [Line Items] | |||
Customer's accounted for more than 10% percent gross revenue | 90.00% | ||
Amerisource Bergen Corporation [Member] | |||
Concentration Risk [Line Items] | |||
Customer's accounted for more than 10% percent gross revenue | 15.00% | ||
Amerisource Bergen Corporation [Member] | Maximum [Member] | |||
Concentration Risk [Line Items] | |||
Customer's accounted for more than 10% percent gross revenue | 10.00% | ||
McKesson Corporation [Member] | |||
Concentration Risk [Line Items] | |||
Customer's accounted for more than 10% percent gross revenue | 16.00% | ||
McKesson Corporation [Member] | Maximum [Member] | |||
Concentration Risk [Line Items] | |||
Customer's accounted for more than 10% percent gross revenue | 10.00% |
Nature of the Business and Su50
Nature of the Business and Summary of Significant Accounting Policies - Schedules of Concentration of Risk by Risk Factor - Gross Accounts Receivable (Detail) - Accounts Receivable [Member] - Credit Concentration Risk [Member] | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Baxalta [Member] | ||
Concentration Risk [Line Items] | ||
Customer's accounted for more than 10% percent gross accounts receivable | 20.00% | 29.00% |
Amerisource Bergen Corporation [Member] | ||
Concentration Risk [Line Items] | ||
Customer's accounted for more than 10% percent gross accounts receivable | 25.00% | 29.00% |
McKesson Corporation [Member] | ||
Concentration Risk [Line Items] | ||
Customer's accounted for more than 10% percent gross accounts receivable | 32.00% | 25.00% |
Cardinal Health Inc [Member] | ||
Concentration Risk [Line Items] | ||
Customer's accounted for more than 10% percent gross accounts receivable | 21.00% | 16.00% |
Consolidated Subsidiaries - Add
Consolidated Subsidiaries - Additional Information (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | |||||
Dec. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Aug. 31, 2016 | May 31, 2016 | Dec. 31, 2013 | |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||||||
Preferred stock value, per share | $ 0.01 | $ 0.01 | $ 0.01 | ||||
Preferred stock issued | 0 | 0 | 0 | ||||
Net cash proceeds from stock issuance | $ 3,361 | $ 2,083 | |||||
Total assets of consolidated subsidiaries | $ 81,483 | 81,483 | 234,880 | ||||
Total liabilities of consolidated subsidiaries | 334,142 | 334,142 | 418,569 | ||||
Cash and cash equivalents | 21,524 | 21,524 | 185,606 | $ 35,688 | $ 65,086 | ||
Series B Preferred Stock [Member] | |||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||||||
Increase (decrease) in non-controlling interest | 1,188 | ||||||
Series C Preferred Stock [Member] | |||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||||||
Increase (decrease) in non-controlling interest | $ 2,689 | ||||||
Silver Creek [Member] | |||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||||||
Acquisition date | Aug. 20, 2010 | ||||||
Increase (decrease) in non-controlling interest | 400 | ||||||
Total assets of consolidated subsidiaries | 2,000 | $ 2,000 | 800 | ||||
Total liabilities of consolidated subsidiaries | 2,000 | 2,000 | 200 | ||||
Cash and cash equivalents | $ 1,900 | $ 1,900 | 700 | ||||
Silver Creek [Member] | Convertible Promissory Notes [Member] | |||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||||||
Aggregate principal amount | $ 200 | $ 1,000 | |||||
Silver Creek [Member] | Silver Creek Convertible Note [Member] | |||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||||||
Aggregate principal amount | $ 1,000 | ||||||
Silver Creek [Member] | Series A Preferred Stock [Member] | |||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||||||
Preferred stock value, per share | $ 1 | ||||||
Silver Creek [Member] | Series B Preferred Stock [Member] | |||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||||||
Increase (decrease) in non-controlling interest | $ 900 | ||||||
Preferred stock issued | 1,600 | ||||||
Preferred stock price per share | $ 1.35 | ||||||
Net cash proceeds from stock issuance | $ 2,100 | ||||||
Silver Creek [Member] | Series C Preferred Stock [Member] | |||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||||||
Preferred stock value, per share | $ 1.50 | $ 1.50 | |||||
Increase (decrease) in non-controlling interest | $ (800) | ||||||
Preferred stock issued | 1,500 | 1,500 | |||||
Preferred stock price per share | $ 1.50 | $ 1.50 | |||||
Net cash proceeds from stock issuance | $ 2,100 | ||||||
Warrants issued to purchase preferred stock, shares | 1,900 | 1,900 | |||||
Silver Creek [Member] | Series A, Series B and Series C Preferred Stock [Member] | |||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||||||
Ownership interest (as a percent) | 50.00% | 50.00% | 56.00% | ||||
Non-controlling interest | $ (1,500) | $ (1,500) | $ 200 |
Net Loss Per Common Share - Add
Net Loss Per Common Share - Additional Information (Detail) - Convertible Notes [Member] - USD ($) $ in Millions | Dec. 31, 2016 | Jul. 31, 2013 |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Aggregate principal amount | $ 125 | |
Interest rate (as a percent) | 4.50% | |
Aggregate principal amount of outstanding debt | $ 60.8 |
Net Loss Per Common Share - Sch
Net Loss Per Common Share - Schedule of Securities Excluded from Computation of Diluted Loss Per Share (Detail) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Common Stock Warrants [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Securities excluded from calculation of diluted loss per share | 2,381 | ||
Outstanding Options to Purchase Common Stock [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Securities excluded from calculation of diluted loss per share | 19,025 | 19,211 | 19,567 |
Conversion of the Convertible Notes [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Securities excluded from calculation of diluted loss per share | 12,158 | 25,000 | 25,000 |
License and Collaboration Agr54
License and Collaboration Agreements - Additional Information (Detail) - USD ($) | Sep. 23, 2014 | Nov. 25, 2013 | May 05, 2011 | Nov. 10, 2009 | Dec. 31, 2016 | Oct. 31, 2016 | Jun. 30, 2016 | Oct. 31, 2015 | Aug. 31, 2015 | Jul. 31, 2015 | Jan. 31, 2015 | Sep. 30, 2014 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2016 |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||||||||
Deferred revenues, current | $ 36,226,000 | $ 36,226,000 | $ 50,137,000 | $ 36,226,000 | $ 50,137,000 | $ 36,226,000 | |||||||||||||||||||
Other revenues | 1,431,000 | $ 1,161,000 | $ 1,498,000 | $ 4,090,000 | |||||||||||||||||||||
Agreement termination scheduled date | Dec. 17, 2014 | ||||||||||||||||||||||||
License and collaboration revenues | 44,057,000 | 12,417,000 | 19,332,000 | $ 11,313,000 | 17,090,000 | $ 16,440,000 | $ 36,558,000 | $ 14,842,000 | $ 87,119,000 | 84,930,000 | $ 102,756,000 | ||||||||||||||
Assets maintained related to Sanofi Agreement | 81,483,000 | 81,483,000 | 234,880,000 | 81,483,000 | 234,880,000 | 81,483,000 | |||||||||||||||||||
Liabilities maintained related to Sanofi Agreement | 334,142,000 | 334,142,000 | 418,569,000 | 334,142,000 | 418,569,000 | 334,142,000 | |||||||||||||||||||
Research and development expenses | 54,961,000 | $ 32,078,000 | $ 40,996,000 | $ 32,882,000 | 44,740,000 | $ 37,763,000 | 42,806,000 | $ 35,679,000 | 160,917,000 | 160,988,000 | 138,495,000 | ||||||||||||||
Deferred Revenue, Noncurrent | 25,673,000 | 25,673,000 | 51,197,000 | $ 25,673,000 | 51,197,000 | 25,673,000 | |||||||||||||||||||
Baxalta [Member] | |||||||||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||||||||
Upfront license fee received | $ 100,000,000 | ||||||||||||||||||||||||
Baxalta [Member] | Regulatory Milestones [Member] | |||||||||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||||||||
Milestone license fee received | 60,000,000 | ||||||||||||||||||||||||
Maximum amount of milestone payments that can be received | $ 520,000,000 | ||||||||||||||||||||||||
Baxalta [Member] | Research and Development Milestones [Member] | |||||||||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||||||||
Milestone license fee received | 62,500,000 | ||||||||||||||||||||||||
Maximum amount of milestone payments that can be received | 100,000,000 | ||||||||||||||||||||||||
Baxalta [Member] | Sales Milestone [Member] | |||||||||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||||||||
Maximum amount of milestone payments that can be received | 250,000,000 | ||||||||||||||||||||||||
Baxalta [Member] | Clinical Trials in Pancreatic Cancer [Member] | |||||||||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||||||||
Collaboration agreement costs | 98,800,000 | ||||||||||||||||||||||||
Baxalta [Member] | License and Collaboration Agreements [Member] | |||||||||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||||||||
Royalty for improved products | The Company is also entitled to tiered, escalating royalties ranging from sub-teen double digits to low twenties percentages of net sales of ONIVYDE in the Licensed Territory. | ||||||||||||||||||||||||
Notice period of termination | 180 days | ||||||||||||||||||||||||
Revenue recognized related to a substantive milestone payment | $ 30,000,000 | $ 10,000,000 | $ 47,500,000 | $ 15,000,000 | $ 20,000,000 | ||||||||||||||||||||
Royalty revenue | $ 200,000 | ||||||||||||||||||||||||
Deferred revenues | 56,779,000 | 56,779,000 | 97,365,000 | 56,779,000 | 97,365,000 | 56,779,000 | |||||||||||||||||||
Deferred revenues, current | 36,200,000 | 36,200,000 | 36,200,000 | 36,200,000 | |||||||||||||||||||||
License and collaboration revenues | 87,119,000 | 84,930,000 | 10,460,000 | ||||||||||||||||||||||
Baxalta [Member] | Non-Substantive Collaborative Arrangement [Member] | |||||||||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||||||||
Milestone license fee received | 62,500,000 | ||||||||||||||||||||||||
Milestone license fee | 90,000,000 | ||||||||||||||||||||||||
Baxalta [Member] | Substantive Collaborative Arrangement [Member] | |||||||||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||||||||
Milestone license fee received | 60,000,000 | ||||||||||||||||||||||||
Milestone license fee | $ 530,000,000 | ||||||||||||||||||||||||
Baxalta [Member] | Commercial Supply Agreement [Member] | |||||||||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||||||||
Other revenues | 3,600,000 | ||||||||||||||||||||||||
Sanofi [Member] | |||||||||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||||||||
Upfront license fee received | $ 60,000,000 | ||||||||||||||||||||||||
Milestone license fee received | 25,000,000 | ||||||||||||||||||||||||
Expected development period from the effective date of agreement | 12 years | ||||||||||||||||||||||||
License and collaboration revenues | 0 | 0 | |||||||||||||||||||||||
Assets maintained related to Sanofi Agreement | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||
Liabilities maintained related to Sanofi Agreement | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||
Sanofi [Member] | License and Collaboration Agreements [Member] | |||||||||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||||||||
License and collaboration revenues | 92,296,000 | ||||||||||||||||||||||||
Recognized revenue related to excess spending | 5,800,000 | ||||||||||||||||||||||||
Spending in excess of budget | $ 10,100,000 | ||||||||||||||||||||||||
PharmaEngine [Member] | |||||||||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||||||||
Upfront license fees paid | $ 10,000,000 | ||||||||||||||||||||||||
Milestone payment | 25,500,000 | $ 10,000,000 | $ 11,000,000 | $ 7,000,000 | $ 5,000,000 | ||||||||||||||||||||
Royalty expense | 100,000 | ||||||||||||||||||||||||
PharmaEngine [Member] | Sales Milestone [Member] | |||||||||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||||||||
Maximum milestone payment obligation | 130,000,000 | ||||||||||||||||||||||||
PharmaEngine [Member] | Development and Regulatory Milestone [Member] | |||||||||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||||||||
Maximum milestone payment obligation | $ 80,000,000 | ||||||||||||||||||||||||
PharmaEngine [Member] | License and Collaboration Agreements [Member] | |||||||||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||||||||
Research and development expenses | 35,600,000 | 11,400,000 | $ 12,600,000 | ||||||||||||||||||||||
PharmaEngine [Member] | Commercial Supply Agreement [Member] | |||||||||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||||||||
Other revenues | $ 300,000 | 0 | |||||||||||||||||||||||
Actavis [Member] | |||||||||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||||||||
Notice period of termination | 90 days | ||||||||||||||||||||||||
Maximum amount of milestone and development payments that can be received | $ 15,100,000 | ||||||||||||||||||||||||
Collaborative arrangement gross payments received | $ 4,900,000 | ||||||||||||||||||||||||
Aggregate milestone payments eligible to receive, decrease | $ 400,000 | ||||||||||||||||||||||||
Percentage of net profits on global sales of product | The Company will also receive a mid-twenties percentage of net profits on global sales of the Initial Product and any additional products. | ||||||||||||||||||||||||
Milestones achieved | $ 1,100,000 | ||||||||||||||||||||||||
Agreement expiration term respect to each product | 10 years | ||||||||||||||||||||||||
Additional renewal term | 2 years | ||||||||||||||||||||||||
Deferred Revenue, Noncurrent | $ 5,100,000 | $ 5,100,000 | $ 4,000,000 | $ 5,100,000 | $ 4,000,000 | $ 5,100,000 | |||||||||||||||||||
Expected revenue recognition period begins after first sale of applicable product | 10 years |
License and Collaboration Agr55
License and Collaboration Agreements - Schedule of Revenue Recognized and Assets and Liabilities under Collaborative Arrangements (Detail) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||
Total | $ 44,057,000 | $ 12,417,000 | $ 19,332,000 | $ 11,313,000 | $ 17,090,000 | $ 16,440,000 | $ 36,558,000 | $ 14,842,000 | $ 87,119,000 | $ 84,930,000 | $ 102,756,000 |
Sanofi [Member] | |||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||
Total | 0 | 0 | |||||||||
License and Collaboration Agreements [Member] | Baxalta [Member] | |||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||
Proportional performance revenue recognition model | 47,119,000 | 64,930,000 | 10,460,000 | ||||||||
Substantive milestones | 40,000,000 | 20,000,000 | |||||||||
Total | 87,119,000 | 84,930,000 | 10,460,000 | ||||||||
Accounts receivable, billed | 860,000 | 1,336,000 | 860,000 | 1,336,000 | |||||||
Accounts receivable, unbilled | 581,000 | 626,000 | 581,000 | 626,000 | |||||||
Deferred revenues | $ 56,779,000 | $ 97,365,000 | $ 56,779,000 | $ 97,365,000 | |||||||
License and Collaboration Agreements [Member] | Sanofi [Member] | |||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||
Total | 92,296,000 | ||||||||||
Upfront payment | 39,306,000 | ||||||||||
Milestone payment | 16,377,000 | ||||||||||
Development services | 18,904,000 | ||||||||||
Manufacturing services and other | $ 17,709,000 |
Product Revenue Reserves and 56
Product Revenue Reserves and Allowances - Summary of Product Revenue Reserve and Allowance Categories (Detail) $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Valuation and Qualifying Accounts Disclosure [Line Items] | |
Beginning balance | $ 540 |
Provisions related to sales in the current year | 8,230 |
Adjustments related to sales in the prior year | (213) |
Credits and payments made | (6,617) |
Ending balance | 1,940 |
Trade Allowances [Member] | |
Valuation and Qualifying Accounts Disclosure [Line Items] | |
Beginning balance | 138 |
Provisions related to sales in the current year | 1,900 |
Credits and payments made | (1,507) |
Ending balance | 531 |
Rebates and Chargeback Discounts [Member] | |
Valuation and Qualifying Accounts Disclosure [Line Items] | |
Beginning balance | 362 |
Provisions related to sales in the current year | 5,928 |
Adjustments related to sales in the prior year | (213) |
Credits and payments made | (5,077) |
Ending balance | 1,000 |
Product Returns [Member] | |
Valuation and Qualifying Accounts Disclosure [Line Items] | |
Beginning balance | 32 |
Provisions related to sales in the current year | 397 |
Credits and payments made | (26) |
Ending balance | 403 |
Other Incentives [Member] | |
Valuation and Qualifying Accounts Disclosure [Line Items] | |
Beginning balance | 8 |
Provisions related to sales in the current year | 5 |
Credits and payments made | (7) |
Ending balance | $ 6 |
Fair Value of Financial Instr57
Fair Value of Financial Instruments - Summary of Assets and Liabilities Measured at Fair Value on a Recurring Basis (Detail) - Recurring Basis [Member] - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Liabilities | $ 0 | |
Level 1 [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets | $ 12,373,000 | 704,000 |
Level 1 [Member] | Money Market Funds [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets | 12,373,000 | $ 704,000 |
Level 3 [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Liabilities | 1,499,000 | |
Level 3 [Member] | Silver Creek [Member] | Warrant Liability [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Liabilities | $ 1,499,000 |
Fair Value of Financial Instr58
Fair Value of Financial Instruments - Additional Information (Detail) - USD ($) shares in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 22, 2015 | |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Transfers between fair value measurement levels | $ 0 | $ 0 | |
Non-recurring fair value measurements | 0 | ||
Senior Convertible Notes [Member] | |||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Aggregate principal amount of outstanding debt | 47,000,000 | ||
Senior Convertible Notes [Member] | Level 2 [Member] | |||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Fair value of debt | 57,500,000 | ||
2022 Notes [Member] | |||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Fair value of debt | 167,000,000 | ||
Aggregate principal amount of outstanding debt | 169,900,000 | ||
Aggregate principal amount of loan | $ 175,000,000 | ||
Interest rate (as a percent) | 11.50% | ||
IPR&D [Member] | |||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Fair value of assets | $ 0 | ||
Recurring Basis [Member] | |||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Liabilities measured at fair value | $ 0 | ||
Silver Creek [Member] | |||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Risk-free interest rate | 2.30% | ||
Expected dividend yield | 0.00% | ||
Expected volatility | 61.70% | ||
Expected term | 6 years 10 months 24 days | ||
Silver Creek [Member] | Series C Preferred Stock [Member] | |||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Warrants issued to purchase preferred stock, shares | 1.9 | ||
Warrants to purchase preferred stock, value | $ 1,500,000 |
Marketable Securities - Additio
Marketable Securities - Additional Information (Detail) | 12 Months Ended | ||
Dec. 31, 2016USD ($)Security | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Amortized Cost And Fair Value Debt Securities [Abstract] | |||
Number of securities held in unrealized loss position | 0 | ||
Number of securities with other-than-temporary impairment | 0 | ||
Realized gains (losses) on sale of available-for-sale securities | $ | $ 0 | $ 0 | $ 0 |
Inventory - Schedule of Invento
Inventory - Schedule of Inventory (Detail) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 4,483 | $ 900 |
Work in process | 8,651 | 2,743 |
Finished goods | 1,420 | 74 |
Total inventory | $ 14,554 | $ 3,717 |
Inventory - Additional Informat
Inventory - Additional Information (Detail) $ in Millions | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Cost of Revenues [Member] | |
Inventory [Line Items] | |
Aggregate charges related to excess and scrap inventory and excess manufacturing capacity | $ 3.6 |
Goodwill and Intangible Asset62
Goodwill and Intangible Assets, Net - Additional Information (Detail) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2016 | Sep. 30, 2013 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Business Acquisition [Line Items] | |||||
Impairment charge | $ 2,800,000 | ||||
Impairment charges related to goodwill | 0 | $ 0 | $ 0 | ||
Impairment charges related to definite-lived intangible assets | 0 | 0 | 0 | ||
Amortization expenses of intangible assets | $ 600,000 | $ 400,000 | $ 300,000 | ||
Weighted-average remaining amortization period of intangible assets | 10 years | ||||
Core Nano Carrier Technology [Member] | |||||
Business Acquisition [Line Items] | |||||
Amortization period of intangible assets | 10 years | ||||
IPR&D [Member] | |||||
Business Acquisition [Line Items] | |||||
Impairment charge | $ 2,800,000 | ||||
Other In-process Research and Development Program [Member] | |||||
Business Acquisition [Line Items] | |||||
Impairment charge | $ 800,000 | ||||
Hermes BioSciences, Inc. [Member] | |||||
Business Acquisition [Line Items] | |||||
Acquired IPR&D assets recognized in a business combination | $ 7,000,000 | ||||
Acquisition date | Oct. 6, 2009 | ||||
Acquired goodwill recognized in a business combination | $ 3,600,000 | ||||
Hermes BioSciences, Inc. [Member] | Core Nano Carrier Technology [Member] | |||||
Business Acquisition [Line Items] | |||||
Acquired intangible assets | 3,200,000 | ||||
Hermes BioSciences, Inc. [Member] | Antibody Targeted Nanotherapeutic Program with Chemotherapy Drug [Member] | |||||
Business Acquisition [Line Items] | |||||
Acquired IPR&D assets recognized in a business combination | 2,800,000 | ||||
Hermes BioSciences, Inc. [Member] | Nanotherapeutic Program with Chemotherapy Drug [Member] | |||||
Business Acquisition [Line Items] | |||||
Acquired IPR&D assets recognized in a business combination | 3,400,000 | ||||
Hermes BioSciences, Inc. [Member] | Other In-process Research and Development Program [Member] | |||||
Business Acquisition [Line Items] | |||||
Acquired IPR&D assets recognized in a business combination | $ 800,000 |
Goodwill and Intangible Asset63
Goodwill and Intangible Assets, Net - Schedule of Goodwill and Intangible Assets (Detail) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Intangible Assets By Major Class [Line Items] | ||
Intangible assets, Accumulated Amortization | $ (2,623) | $ (2,045) |
Goodwill | 3,605 | 3,605 |
Goodwill and Intangible assets, Gross Carrying Value | 10,205 | 13,005 |
Goodwill and Intangible assets, Net Carrying Value | 7,582 | 10,960 |
IPR&D [Member] | ||
Intangible Assets By Major Class [Line Items] | ||
Indefinite-lived intangible asset | 2,800 | |
Nano Carrier Technology [Member] | ||
Intangible Assets By Major Class [Line Items] | ||
Intangible assets, Gross Carrying Value | 3,200 | 3,200 |
Intangible assets, Accumulated Amortization | (2,315) | (1,995) |
Intangible assets, Net Carrying Value | 885 | 1,205 |
ONIVYDE [Member] | ||
Intangible Assets By Major Class [Line Items] | ||
Intangible assets, Gross Carrying Value | 3,400 | 3,400 |
Intangible assets, Accumulated Amortization | (308) | (50) |
Intangible assets, Net Carrying Value | $ 3,092 | $ 3,350 |
Goodwill and Intangible Asset64
Goodwill and Intangible Assets, Net - Schedule of Expected Future Amortization Expense for Intangible Assets for the Next Five-Year Period (Detail) $ in Thousands | Dec. 31, 2016USD ($) |
Goodwill And Intangible Assets Disclosure [Abstract] | |
2,017 | $ 578 |
2,018 | 578 |
2,019 | 503 |
2,020 | 258 |
2,021 | $ 258 |
Property and Equipment, Net - S
Property and Equipment, Net - Schedule of Property and Equipment, Net (Detail) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | $ 51,980 | $ 51,226 |
Less: Accumulated depreciation | (36,215) | (29,311) |
Total property and equipment, net | 15,765 | 21,915 |
Lab Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 20,752 | 19,305 |
IT Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 8,601 | 7,742 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 21,153 | 21,026 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 959 | 910 |
Construction in Process [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | $ 515 | $ 2,243 |
Property and Equipment, Net - A
Property and Equipment, Net - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Property Plant and Equipment Useful Life and Values [Abstract] | |||
Depreciation expense | $ 7,300 | $ 5,500 | $ 4,200 |
Charge related to disposal of property and equipment | $ 493 | $ 4 |
Accounts Payable, Accrued Exp67
Accounts Payable, Accrued Expenses and Other - Schedule of Accounts Payable, Accrued Expenses and Other (Detail) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Accounts Payable And Accrued Liabilities [Line Items] | ||
Accounts payable | $ 3,384 | $ 5,049 |
Accrued goods and services | 15,760 | 14,295 |
Accrued clinical trial costs | 11,260 | 12,764 |
Accrued drug purchase costs | 910 | 7,460 |
Accrued payroll and related benefits | 9,150 | 9,009 |
Accrued restructuring expenses | 774 | |
Accrued asset sale transaction costs | 3,724 | |
Accrued interest | 2,100 | 3,041 |
Accrued dividends payable | 19 | 19 |
Deferred tax incentives | 1,402 | 445 |
Total accounts payable, accrued expenses and other | 49,982 | $ 52,082 |
Silver Creek [Member] | ||
Accounts Payable And Accrued Liabilities [Line Items] | ||
Warrant liability | $ 1,499 |
Borrowings - 2022 Notes - Addit
Borrowings - 2022 Notes - Additional Information (Detail) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Dec. 22, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Debt Instrument [Line Items] | ||||
Debt maturity date | Jul. 15, 2020 | |||
Interest expense | $ 43,645,000 | $ 19,232,000 | $ 18,230,000 | |
Change of Control Event [Member] | ||||
Debt Instrument [Line Items] | ||||
Redemption price as percentage of principal amount of notes plus accrued and unpaid interest | 101.00% | |||
Asset Sale Event [Member] | ||||
Debt Instrument [Line Items] | ||||
Redemption price as percentage of principal amount of notes plus accrued and unpaid interest | 100.00% | |||
2022 Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Aggregate principal amount | $ 175,000,000 | |||
Interest rate (as a percent) | 11.50% | |||
Net proceeds from the debt issuance | $ 168,500,000 | |||
Debt issuance costs | 900,000 | |||
Semi-annual installments of principal | $ 21,875,000 | |||
Debt maturity date | Dec. 15, 2022 | |||
Effective interest rate | 12.32% | |||
Interest expense | $ 20,900,000 | $ 500,000 | ||
2022 Notes [Member] | Conversion Terms, Fundamental Changes [Member] | ||||
Debt Instrument [Line Items] | ||||
Redemption price as percentage of principal amount of notes plus accrued and unpaid interest | 100.00% |
Borrowings - Convertible Notes
Borrowings - Convertible Notes - Additional Information (Detail) | Apr. 18, 2016shares | Apr. 13, 2016USD ($)shares | Jul. 31, 2013USD ($)$ / shares | Jul. 31, 2013USD ($)$ / shares | Jun. 30, 2016USD ($)shares | Dec. 31, 2016USD ($)shares | Dec. 31, 2015USD ($)shares | Dec. 31, 2014USD ($) |
Debt Instrument [Line Items] | ||||||||
Principal amount of convertible notes due 2020 converted into shares of common stock | $ 64,209,000 | |||||||
Common stock, shares issued | shares | 130,197,000 | 115,871,000 | ||||||
Loss on extinguishment of debt | $ 14,566,000 | |||||||
Debt maturity date | Jul. 15, 2020 | |||||||
Interest expense | $ 43,645,000 | $ 19,232,000 | $ 18,230,000 | |||||
Convertible Notes [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Aggregate principal amount | $ 125,000,000 | $ 125,000,000 | ||||||
Net proceeds from the debt issuance | $ 120,600,000 | |||||||
Interest rate (as a percent) | 4.50% | 4.50% | ||||||
Embedded conversion option | $ 53,800,000 | $ 53,800,000 | ||||||
Underwriting discounts and commissions and offering expenses | 4,400,000 | |||||||
Principal amount of convertible notes due 2020 converted into shares of common stock | $ 64,200,000 | |||||||
Conversion ratio, principal amount | $ 1,000 | $ 1,000 | $ 1,000 | |||||
Conversion rate of common stock shares per $1,000 principal amount | 136 | 160 | ||||||
Common stock, shares issued | shares | 8,732,152 | 3,635,511 | 12,367,663 | |||||
Value of additional shares issued for conversion | $ 27,700,000 | |||||||
Trading period | 10 days | |||||||
Increase to additional paid in capital pursuant to conversion | $ 101,000,000 | |||||||
Loss on extinguishment of debt | 14,600,000 | |||||||
Reduction in additional paid-in capital attributable to embedded conversion option | $ 39,800,000 | |||||||
Number of consecutive trading days during which the closing price of the entity's common stock must exceed the conversion price for at least 20 days in order for the notes to be convertible | 30 days | |||||||
Convertibility of debt, closing price of stock test, percentage of stock price to conversion price for the notes that must be exceeded | 130.00% | |||||||
Number of consecutive business days immediately after any five consecutive trading day period during the note measurement period | 5 days | |||||||
Number of consecutive trading days before five consecutive business days during the note measurement period | 5 days | |||||||
Initial conversion price of shares (in dollars per share) | $ / shares | $ 6.25 | $ 6.25 | ||||||
Minimum percentage of aggregate principal amount held by bondholders to declare notes due and payable | 25.00% | |||||||
Percentage of principal amount due and payable upon event of default | 100.00% | |||||||
Interest expense | 22,700,000 | $ 13,700,000 | $ 13,700,000 | |||||
Convertible Notes [Member] | Conversion Terms, Fundamental Changes [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Redemption price as percentage of principal amount of notes plus accrued and unpaid interest | 100.00% | |||||||
Convertible Notes [Member] | Conversion Terms, Event of Default [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Percentage of principal amount due and payable upon event of default arising out of certain bankruptcy events | 100.00% | |||||||
Convertible Notes [Member] | Minimum [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Number of days within 30 consecutive trading days in which the closing price of the entity's common stock must exceed the conversion price for the notes to be convertible | 20 days | |||||||
Convertible Notes [Member] | Maximum [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Convertibility of debt, trading price of debt test, percentage of closing price of stock used in calculation | 98.00% | |||||||
Convertible Notes [Member] | Transaction Costs Incurred With Third Parties [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Reduction in additional paid-in capital | 200,000 | |||||||
Convertible Notes [Member] | Interest Expense [Member] | Transaction Costs Incurred With Third Parties [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Transaction costs related to conversion of convertible notes due 2020 incurred and paid | $ 200,000 |
Borrowings - Loan Agreement - A
Borrowings - Loan Agreement - Additional Information (Detail) - USD ($) | Feb. 25, 2015 | Nov. 06, 2014 | Dec. 22, 2015 | Dec. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Nov. 30, 2012 |
Schedule Of Debt Instruments [Line Items] | ||||||||
Extension period for interest-only payment | 4 months | |||||||
Repayment of notes | $ 40,000,000 | |||||||
Interest expense | $ 43,645,000 | $ 19,232,000 | $ 18,230,000 | |||||
2022 Notes [Member] | ||||||||
Schedule Of Debt Instruments [Line Items] | ||||||||
Aggregate principal amount | $ 175,000,000 | |||||||
Unamortized debt issuance costs | 5,089,000 | |||||||
Debt issuance costs | $ 900,000 | |||||||
Interest expense | 20,900,000 | 500,000 | ||||||
2022 Notes [Member] | Modified Loan Agreement [Member] | ||||||||
Schedule Of Debt Instruments [Line Items] | ||||||||
Unamortized debt issuance costs | $ 300,000 | 300,000 | ||||||
Loan Agreement [Member] | ||||||||
Schedule Of Debt Instruments [Line Items] | ||||||||
Discount on loan recorded as a non-current liability to be paid upon full repayment or maturity of the loans | 1,200,000 | |||||||
Hercules [Member] | ||||||||
Schedule Of Debt Instruments [Line Items] | ||||||||
Initial debt discount | 1,600,000 | |||||||
Interest expense | $ 0 | 5,400,000 | $ 4,700,000 | |||||
Hercules [Member] | 2022 Notes [Member] | Modified Loan Agreement [Member] | ||||||||
Schedule Of Debt Instruments [Line Items] | ||||||||
Debt issuance costs | $ 900,000 | |||||||
Hercules [Member] | Loan Agreement [Member] | ||||||||
Schedule Of Debt Instruments [Line Items] | ||||||||
Aggregate principal amount | $ 40,000,000 | $ 40,000,000 | ||||||
Outstanding principal balance repayment start date | Jun. 1, 2016 | |||||||
Outstanding principal balance repayment end date | Nov. 1, 2018 | |||||||
Extended maturity period on principal payment | 6 months |
Borrowings - Credit Facility -
Borrowings - Credit Facility - Additional Information (Detail) - BioPharma Credit Investments IV Sub, LP (“Pharmakon”) [Member] - Credit Agreement [Member] - USD ($) | Feb. 23, 2017 | Nov. 08, 2016 | Dec. 31, 2016 |
Debt Instrument [Line Items] | |||
Credit facility principal amount, minimum amount | $ 15,000,000 | ||
Credit facility principal amount, maximum amount | $ 25,000,000 | ||
Credit facility, expiration date | Mar. 15, 2017 | ||
Credit facility, annual interest rate | 11.50% | ||
Credit facility, optional future financing, description | In addition, the Credit Agreement grants Pharmakon an option during the two years following funding of the credit facility to participate in a future financing at an amount up to the lesser of 25% of the total amount financed or $50.0 million. | ||
Credit facility, future financing, expiration period | 2 years | ||
Maximum percentage of participation in future financing | 25.00% | ||
Maximum dollar amount of participation in future financing | $ 50,000,000 | ||
Credit facility, amounts borrowed | $ 0 | ||
Subsequent Event [Member] | |||
Debt Instrument [Line Items] | |||
Credit facility, expiration date | Apr. 27, 2017 |
Borrowings - Silver Creek Conve
Borrowings - Silver Creek Convertible Notes - Additional Information (Detail) - USD ($) $ / shares in Units, shares in Thousands | 1 Months Ended | 12 Months Ended | ||||||
Dec. 31, 2016 | May 31, 2016 | Dec. 31, 2012 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Aug. 31, 2016 | |
Debt Instrument [Line Items] | ||||||||
Preferred stock issued | 0 | 0 | 0 | |||||
Proceeds from sale of preferred stock | $ 3,361,000 | $ 2,083,000 | ||||||
Silver Creek [Member] | Convertible Notes [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate (as a percent) | 6.00% | |||||||
Aggregate principal amount | $ 1,000,000 | $ 200,000 | ||||||
Debt instrument conversion price per share | $ 1.60 | |||||||
Minimum gross proceeds for next equity financing conversion | $ 4,000,000 | |||||||
Silver Creek [Member] | Series B Preferred Stock [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Preferred stock issued | 1,600 | |||||||
Preferred stock price per share | $ 1.35 | |||||||
Proceeds from sale of preferred stock | $ 2,100,000 | |||||||
Silver Creek [Member] | Series B Preferred Stock [Member] | Convertible Notes [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument conversion price per share | $ 1.35 | $ 1.35 | ||||||
Silver Creek [Member] | Silver Creek Series C Preferred Stock [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Preferred stock issued | 1,500 | 1,500 | ||||||
Preferred stock price per share | $ 1.50 | $ 1.50 | ||||||
Warrants to purchase | 1,900 | 1,900 | ||||||
Proceeds from sale of preferred stock | $ 2,100,000 | |||||||
Silver Creek [Member] | Silver Creek Series C Preferred Stock [Member] | Milestone Event 1 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Number of warrants exercisable | 1,200 | 1,200 | ||||||
Description of milestone event achievement | Milestone Event 1 is defined as the date that is seven business days following the acceptance by the FDA of Silver Creek’s filing of an Investigational New Drug application (“IND”), or 30 business days after the IND is filed without FDA rejection of the application. | |||||||
Silver Creek [Member] | Silver Creek Series C Preferred Stock [Member] | Prior to the Achievement of Milestone Event 1 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Warrants exercise price per share | $ 1.75 | $ 1.75 | ||||||
Silver Creek [Member] | Silver Creek Series C Preferred Stock [Member] | On or After the Achievement of Milestone Event 1 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Warrants exercise price per share | $ 2.25 | $ 2.25 | ||||||
Silver Creek [Member] | Silver Creek Series C Preferred Stock [Member] | Milestone Event 2 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Number of warrants exercisable | 700 | 700 | ||||||
Description of milestone event achievement | Milestone Event 2 is defined as the date that is seven business days following the date when Silver Creek completes a Phase 1 clinical trial provided, that if Silver Creek receives proceeds of less than $4.0 million pursuant to the sale of Series C preferred stock, Milestone Event 2 shall mean the date that is seven business days following the first dose in humans in a clinical trial. | |||||||
Silver Creek [Member] | Silver Creek Series C Preferred Stock [Member] | Prior to the Achievement of Milestone Event 2 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Warrants exercise price per share | $ 2.25 | $ 2.25 | ||||||
Silver Creek [Member] | Silver Creek Series C Preferred Stock [Member] | On or After the Achievement of Milestone Event 2 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Warrants exercise price per share | 2.75 | 2.75 | ||||||
Silver Creek [Member] | Silver Creek Series C Preferred Stock [Member] | Convertible Notes [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument conversion price per share | $ 1.50 | $ 1.50 | ||||||
Preferred stock issued | 1,500 | 1,500 | ||||||
Preferred stock price per share | $ 1.50 | $ 1.50 | ||||||
Debt conversion, shares issued | 800 | |||||||
Silver Creek [Member] | Maximum [Member] | Silver Creek Series C Preferred Stock [Member] | Milestone Event 2 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Proceeds from sale of preferred stock | $ 4,000,000 | |||||||
Silver Creek Convertible Note [Member] | Silver Creek [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Gross proceeds from the debt issuance | $ 1,600,000 | $ 1,000,000 | $ 900,000 | |||||
Interest rate (as a percent) | 6.00% | 6.00% | ||||||
Discount on automatic conversion into the next qualifying equity financing (as a percent) | 25.00% | |||||||
Derivative liability | $ 200,000 | |||||||
Aggregate principal amount | $ 1,000,000 | |||||||
Silver Creek Convertible Note [Member] | Silver Creek [Member] | Minimum [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Amount of gross proceeds from qualifying equity financing in which holders would automatically convert into the next qualifying equity financing at a 25% discount | $ 4,000,000 |
Borrowings - Schedule of Future
Borrowings - Schedule of Future Minimum Payments under the Loans Payable (Detail) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | ||
Long-term debt | $ 216,861 | $ 257,655 |
Convertible Notes [Member] | ||
Debt Instrument [Line Items] | ||
2,017 | 2,736 | |
2,018 | 2,736 | |
2,019 | 2,736 | |
2,020 | 63,527 | |
Loans payable, gross including contractual interest | 71,735 | |
Less interest | (10,943) | |
Less unamortized discount | (13,842) | |
Long-term debt | 46,950 | |
2022 Notes [Member] | ||
Debt Instrument [Line Items] | ||
2,017 | 20,125 | |
2,018 | 20,125 | |
2,019 | 62,617 | |
2,020 | 57,586 | |
2021 and thereafter | 100,078 | |
Loans payable, gross including contractual interest | 260,531 | |
Less interest | (85,531) | |
Less unamortized discount | (5,089) | |
Long-term debt | $ 169,911 |
Restructuring Activities - Addi
Restructuring Activities - Additional Information (Detail) - USD ($) $ in Thousands | Oct. 03, 2016 | Dec. 31, 2016 | Sep. 30, 2016 | Dec. 31, 2016 |
Restructuring Cost And Reserve [Line Items] | ||||
Reduction in headcount, percent | 22.00% | |||
Restructuring activity, announcement date | Oct. 3, 2016 | |||
Restructuring expenses | $ 5,047 | $ 809 | $ 5,856 | |
Restructuring activities, description | One-time employee termination benefits were comprised of severance, benefits and related costs, all of which resulted in cash expenditures during the third and fourth quarters of 2016. | |||
Stock-based Compensation Expense, Contractual Termination Benefits and One-time Employee Termination Benefits [Member] | ||||
Restructuring Cost And Reserve [Line Items] | ||||
Restructuring expenses | $ 5,900 |
Restructuring Activities - Summ
Restructuring Activities - Summary of Charges Related to Restructuring Activities (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2016 | Sep. 30, 2016 | Dec. 31, 2016 | |
Restructuring Cost And Reserve [Line Items] | |||
Expenses | $ 5,047 | $ 809 | $ 5,856 |
Less: Payments | (3,711) | ||
Less: Non-Cash Expenses | (1,371) | ||
Accrued Restructuring Expenses | 774 | 774 | |
Severance Benefits and Related Costs Due to Workforce Reduction [Member] | |||
Restructuring Cost And Reserve [Line Items] | |||
Expenses | 5,856 | ||
Less: Payments | (3,711) | ||
Less: Non-Cash Expenses | (1,371) | ||
Accrued Restructuring Expenses | $ 774 | $ 774 |
Common Stock Warrants - Schedul
Common Stock Warrants - Schedule of Common Stock Warrant Activity of the Company (Detail) - Common Stock Warrant [Member] - $ / shares shares in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Class of Warrant or Right [Line Items] | ||
Beginning Balance | 2,381 | 2,777 |
Exercised (in shares) | (2,355) | (396) |
Cancelled (in shares) | (26) | |
Ending Balance | 2,381 | |
Beginning Balance | $ 3 | $ 3.05 |
Exercised (per share) | 3 | 3.38 |
Cancelled (per share) | $ 3 | |
Ending Balance | $ 3 |
Common Stock Warrants - Additio
Common Stock Warrants - Additional Information (Detail) - Common Stock Warrant [Member] - shares | Dec. 31, 2015 | Dec. 31, 2014 |
Class of Warrant or Right [Line Items] | ||
Number of warrants cashless exercised | 2,295,000 | 75,000 |
Number of common stock issued as a result of cashless exercise of warrants | 1,695,000 | 38,000 |
Common Stock - Additional Infor
Common Stock - Additional Information (Detail) - USD ($) | Jul. 13, 2015 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2016 |
Class of Stock [Line Items] | ||||
Net proceeds from issuance of common stock after deducting commissions and offering expenses | $ 38,560,000 | |||
Common stock, shares issued | 115,871,000 | 130,197,000 | ||
Common stock, shares authorized | 200,000,000 | 200,000,000 | ||
Common stock, par value | $ 0.01 | $ 0.01 | ||
Common stock, shares outstanding | 115,871,000 | 130,197,000 | ||
Cowen and Company LLC [Member] | At the Market Offering [Member] | ||||
Class of Stock [Line Items] | ||||
Net proceeds from issuance of common stock after deducting commissions and offering expenses | $ 38,600,000 | |||
Common stock, shares issued | 3,800,000 | |||
Maximum [Member] | Cowen and Company LLC [Member] | At the Market Offering [Member] | ||||
Class of Stock [Line Items] | ||||
Aggregate sales price of offering | $ 40,000,000 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 12 Months Ended | ||||
Feb. 29, 2016 | Feb. 28, 2015 | Mar. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of Options, Granted | 4,258,000 | |||||
Weighted-average grant date fair value per share of stock options | $ 3.32 | $ 5.80 | $ 3.41 | |||
Aggregate intrinsic value of options exercised | $ 5.6 | $ 30.9 | $ 19.8 | |||
Unrecognized stock-based compensation expense related to nonvested stock options | $ 12.7 | |||||
Weighted average period over which unrecognized stock-based compensation expense is expected to be recognized | 1 year 8 months 12 days | |||||
Stock Options [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Contractual term | 10 years | |||||
Stock Incentive Plan 2011 [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Additional common stock available for issuance (in shares) | 4,100,000 | 3,700,000 | 3,600,000 | |||
Shares of common stock available for grant (in shares) | 4,700,000 | |||||
Number of Options, Granted | 4,300,000 | 3,700,000 | 3,900,000 | |||
Stock Incentive Plan 2011 [Member] | Employee [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Options vesting period | 3 years |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Assumptions Used to Calculate Fair Value of Options Granted to Employees (Detail) - Options to Purchase Common Stock [Member] | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Minimum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate | 1.10% | 1.50% | 1.60% |
Expected volatility | 67.00% | 66.00% | 64.00% |
Expected term | 5 years | 5 years | 5 years |
Maximum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate | 2.00% | 1.80% | 2.00% |
Expected volatility | 69.00% | 67.00% | 72.00% |
Expected term | 5 years 9 months 18 days | 5 years 10 months 24 days | 5 years 10 months 24 days |
Stock-Based Compensation - Sc81
Stock-Based Compensation - Schedule of Recognized Stock-Based Compensation Expense (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense for employee awards | $ 15,205 | $ 15,293 | $ 12,929 |
Stock-based compensation expense for non-employee awards | 1 | 58 | 268 |
Less: stock-based compensation expense capitalized to inventory | (341) | ||
Total stock-based compensation expense | 14,865 | 15,351 | 13,197 |
Research and Development Expense [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense for employee awards | 6,503 | 8,271 | 6,864 |
Selling, General and Administrative Expense [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense for employee awards | 7,331 | $ 7,022 | $ 6,065 |
Restructuring Expense [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense for employee awards | $ 1,371 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock Option Activity (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Share Based Compensation Arrangement By Share Based Payment Award Options Outstanding Roll Forward | ||
Number of Options, Outstanding, Beginning balance | 19,211 | |
Number of Options, Granted | 4,258 | |
Number of Options, Exercised | (1,958) | |
Number of Options, Forfeited | (2,487) | |
Number of Options, Outstanding, Ending balance | 19,024 | 19,211 |
Number of Options, Vested and expected to vest | 18,794 | |
Number of Options, Exercisable | 14,968 | |
Weighted-Average Exercise Price, Outstanding, Beginning balance | $ 5.72 | |
Weighted-Average Exercise Price, Granted | 5.57 | |
Weighted-Average Exercise Price, Exercised | 3.29 | |
Weighted-Average Exercise Price, Forfeited | 7.04 | |
Weighted-Average Exercise Price, Outstanding, Ending balance | 5.77 | $ 5.72 |
Weighted-Average Exercise Price, Vested and expected to vest | 5.76 | |
Weighted-Average Exercise Price, Exercisable | $ 5.49 | |
Weighted-Average Remaining Contractual Term | 5 years 11 months 19 days | 6 years 2 months 27 days |
Weighted-Average Remaining Contractual Term, Vested and expected to vest | 5 years 11 months 5 days | |
Weighted-Average Remaining Contractual Term, Exercisable | 5 years 2 months 27 days | |
Aggregate Intrinsic Value, Outstanding | $ 7,564 | $ 47,963 |
Aggregate Intrinsic Value, Vested and expected to vest | 7,564 | |
Aggregate Intrinsic Value, Exercisable | $ 7,564 |
Income Taxes - Schedule of Reco
Income Taxes - Schedule of Reconciliation of the Company's Effective Tax Rate to the Statutory Federal Income Tax Rate (Detail) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Federal income tax at statutory federal rate | 35.00% | 35.00% | 35.00% |
State taxes | 0.70% | 1.00% | 3.10% |
Permanent differences | (11.60%) | (6.40%) | (9.10%) |
Stock-based compensation | (2.20%) | (1.30%) | (1.70%) |
Tax credits | 28.00% | 21.30% | 30.50% |
Foreign rate differential | (2.30%) | ||
Change in deferred state tax rate | (0.30%) | (2.30%) | |
Other | 4.50% | (0.50%) | 4.50% |
Change in valuation allowance | (54.10%) | (46.80%) | (60.00%) |
Income Taxes - Schedule of Temp
Income Taxes - Schedule of Temporary Differences That Give Rise to Significant Net Deferred Tax Assets (Detail) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Deferred tax assets | ||||
Net operating losses | $ 194,027 | $ 182,992 | ||
Capitalized research and development expenses | 15,854 | 21,444 | ||
Credit carryforwards | 144,823 | 93,113 | ||
Depreciation | 2,557 | 2,128 | ||
Deferred compensation | 12,463 | 11,664 | ||
Accrued expenses | 3,601 | 1,807 | ||
Deferred revenue | 21,935 | 10,999 | ||
Other temporary differences | 25,276 | 17,235 | ||
Total gross deferred tax assets | 420,536 | 341,382 | ||
Valuation allowance | (414,558) | (326,577) | $ (257,489) | $ (207,304) |
Net deferred tax assets | 5,978 | 14,805 | ||
Deferred tax liabilities | ||||
Intangible assets | (1,428) | (2,667) | ||
Debt discount | $ (4,550) | $ (12,138) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) $ in Millions | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Operating Loss Carryforwards [Line Items] | |
Federal and state net operating loss carryforwards relate to deductions for stock option compensation | $ 39.2 |
Federal Orphan Drug Credits | 106.4 |
Federal [Member] | |
Operating Loss Carryforwards [Line Items] | |
NOL | 542.7 |
Federal [Member] | Research and Development [Member] | |
Operating Loss Carryforwards [Line Items] | |
Amount of tax credit carryforward | 27.3 |
State [Member] | |
Operating Loss Carryforwards [Line Items] | |
NOL | 367.4 |
Federal and state net operating loss carryforwards relate to deductions for stock option compensation | 25.2 |
State [Member] | Research and Development [Member] | |
Operating Loss Carryforwards [Line Items] | |
Amount of tax credit carryforward | 16.3 |
State [Member] | Investment [Member] | |
Operating Loss Carryforwards [Line Items] | |
Amount of tax credit carryforward | $ 0.8 |
Income Taxes - Schedule of Chan
Income Taxes - Schedule of Changes in the Valuation Allowance (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Balance at beginning of period | $ 326,577 | $ 257,489 | $ 207,304 |
Additions | 87,981 | 69,088 | 50,185 |
Balance at end of period | $ 414,558 | $ 326,577 | $ 257,489 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) $ in Millions | May 31, 2016ft² | Dec. 31, 2016USD ($)ft² | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) |
Operating Leased Assets [Line Items] | ||||
Description of operating lease amendment | The Amended Lease will terminate on June 30, 2019, but the Company retains an option to renew the Amended Lease with respect to all of the leased space for an additional period of five years. | |||
Aggregate space that the entity will lease under the amended lease agreement | ft² | 167,000 | |||
Sublease Agreement [Member] | ||||
Operating Leased Assets [Line Items] | ||||
Description of operating lease amendment | The Sublease terminates on December 31, 2017, but may be extended through June 30, 2019 if mutually agreed upon by the Company and the subtenant. | |||
Area of office and lab | ft² | 8,143 | |||
Lease expiration date | Dec. 31, 2017 | |||
Lease extended date | Jun. 30, 2019 | |||
Operating leases, future minimum rental payments receivable | $ 0.6 | |||
Total rent expense | 8.6 | $ 7.4 | $ 5.9 | |
July 31, 2015 Amendment [Member] | ||||
Operating Leased Assets [Line Items] | ||||
Aggregate landlord reimbursable tenant improvements received under the existing lease and the lease amendment | $ 9.5 |
Commitments and Contingencies88
Commitments and Contingencies - Schedule of Future Minimum Lease Payments Under Non-cancelable Operating Leases (Detail) $ in Thousands | Dec. 31, 2016USD ($) |
Commitments And Contingencies Disclosure [Abstract] | |
2,017 | $ 8,108 |
2,018 | 8,102 |
2,019 | 4,082 |
Total future minimum lease payments | $ 20,292 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) - shares | Dec. 31, 2016 | Dec. 31, 2015 |
Related Party Transaction [Line Items] | ||
Preferred stock issued | 0 | 0 |
Silver Creek [Member] | Series A and B Preferred Stock [Member] | ||
Related Party Transaction [Line Items] | ||
Shares owned by employees and directors of the parent company (as a percent) | 7.00% | 7.00% |
Silver Creek [Member] | Series C Preferred Stock [Member] | ||
Related Party Transaction [Line Items] | ||
Preferred stock issued | 0 |
Retirement Plan - Additional In
Retirement Plan - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Compensation And Retirement Disclosure [Abstract] | |||
Company's contributions to 401(k) defined contribution savings plan | $ 1.3 | $ 1.1 | $ 0.8 |
Selected Quarterly Financial 91
Selected Quarterly Financial Data (Unaudited) - Schedule of Quarterly Financial Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Product revenues, net | $ 15,752 | $ 14,493 | $ 12,851 | $ 9,968 | $ 4,328 | $ 53,064 | $ 4,328 | ||||
License and collaboration revenues | 44,057 | 12,417 | 19,332 | 11,313 | 17,090 | $ 16,440 | $ 36,558 | $ 14,842 | 87,119 | 84,930 | $ 102,756 |
Other revenues | 1,431 | 1,161 | 1,498 | 4,090 | |||||||
Cost of revenues | 3,319 | 1,010 | 1,872 | 711 | 46 | 6,912 | 46 | ||||
Research and development expenses | 54,961 | 32,078 | 40,996 | 32,882 | 44,740 | 37,763 | 42,806 | 35,679 | 160,917 | 160,988 | 138,495 |
Selling, general and administrative expenses | 24,206 | 18,048 | 20,680 | 17,795 | 19,335 | 16,956 | 12,315 | 9,189 | 80,729 | 57,795 | 30,517 |
Restructuring expenses | 5,047 | 809 | 5,856 | ||||||||
Net loss | (33,627) | (30,275) | (50,958) | (38,658) | (48,068) | (42,386) | (22,901) | (34,432) | (153,518) | (147,787) | (83,559) |
Net loss attributable to Merrimack Pharmaceuticals, Inc. | $ (32,449) | $ (30,068) | $ (50,750) | $ (38,473) | $ (47,826) | $ (42,594) | $ (22,778) | $ (34,759) | $ (151,740) | $ (147,957) | $ (83,291) |
Net loss per share available to common stockholders—basic and diluted | $ (0.25) | $ (0.23) | $ (0.40) | $ (0.33) | $ (0.41) | $ (0.38) | $ (0.21) | $ (0.32) | $ (1.21) | $ (1.33) | $ (0.80) |
Going Concern - Additional Info
Going Concern - Additional Information (Detail) - USD ($) | Jan. 07, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Unrestricted cash and cash equivalents | $ 21,524,000 | $ 185,606,000 | $ 35,688,000 | $ 65,086,000 | |
Aggregate principal amount outstanding to be redeemed | $ 40,000,000 | ||||
Substantial doubt about going concern, conditions and events | The consummation of the asset sale with Ipsen is contingent upon approval by the Company’s stockholders as well as other customary closing conditions. If the asset sale is not consummated, the Company will not receive the $575.0 million upfront cash payment from Ipsen, and the Company will need to obtain additional funding through public or private debt or equity financings, through existing or new collaboration arrangements, or through divestitures of its assets. | ||||
Substantial doubt about going concern, within one year | true | ||||
Subsequent Event [Member] | Asset Sale Agreement [Member] | Minimum [Member] | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Special cash dividend to be paid | $ 200,000,000 | ||||
Subsequent Event [Member] | Asset Sale Agreement [Member] | 2022 Notes [Member] | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Aggregate principal amount outstanding to be redeemed | 175,000,000 | ||||
Additional premium payment | 20,100,000 | ||||
Subsequent Event [Member] | Ipsen [Member] | Asset Sale Agreement [Member] | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Upfront cash payment to be received | 575,000,000 | ||||
Subsequent Event [Member] | Baxalta [Member] | License and Collaboration Agreements [Member] | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Net milestone payments expected to be received | $ 33,000,000 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) shares in Thousands | Feb. 23, 2017 | Feb. 06, 2017USD ($)shares | Jan. 09, 2017USD ($)Employee | Jan. 07, 2017USD ($)ft² | Nov. 08, 2016 | Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($)shares |
Subsequent Event [Line Items] | ||||||||
Restructuring activity, announcement date | Oct. 3, 2016 | |||||||
Restructuring expenses | $ 5,047,000 | $ 809,000 | $ 5,856,000 | |||||
Restructuring activities, description | One-time employee termination benefits were comprised of severance, benefits and related costs, all of which resulted in cash expenditures during the third and fourth quarters of 2016. | |||||||
Option grant to purchase common stock | shares | 4,258 | |||||||
BioPharma Credit Investments IV Sub, LP (“Pharmakon”) [Member] | Credit Agreement [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Credit facility, expiration date | Mar. 15, 2017 | |||||||
January 2017 Corporate Restructuring [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Restructuring activity, announcement date | Jan. 9, 2017 | |||||||
Restructuring and related activities, completion date | Mar. 10, 2017 | |||||||
January 2017 Corporate Restructuring [Member] | One-time Employee Termination Benefits [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Restructuring activities, description | One-time employee termination benefits are comprised of severance, benefits and related costs, all of which are expected to result in cash expenditures. The specific timing of the incurrence and payment of these restructuring expenses is dependent upon the timing of the closing of the asset sale. | |||||||
Asset Sale Agreement [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Assets sales termination fee description | The termination fee will also be payable if the Asset Sale Agreement is terminated because the Company’s stockholders did not vote to adopt the Asset Sale Agreement and, prior to such termination, a proposal to acquire at least 50% of the consolidated assets of the Company with respect to the Commercial Business or at least 50% of the Company’s voting securities has been publicly disclosed and the Company enters into a definitive agreement with respect to such proposal within 12 months after such termination, which is subsequently consummated. | |||||||
Subsequent Event [Member] | BioPharma Credit Investments IV Sub, LP (“Pharmakon”) [Member] | Credit Agreement [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Credit facility, expiration date | Apr. 27, 2017 | |||||||
Subsequent Event [Member] | Chief Executive Officer [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Annual base salary | $ 700,000 | |||||||
Employment agreement description | Dr. Peters will receive an annual base salary of $700,000 and is eligible for an annual bonus of up to 65% of his base salary. Dr. Peters also received a one-time signing bonus of $900,000. Subject to the further approval of the Company’s Board of Directors, the Company will also grant Dr. Peters an option to purchase a number of shares of the Company’s common stock equal to the lesser of (i) such number of shares that has a target grant date fair value of $3.5 million and (ii) 2.0 million shares, with an exercise price per share equal to the fair market value of the Company’s common stock on the date of grant. | |||||||
One-time signing bonus | $ 900,000 | |||||||
Target grant date fair value | $ 3,500,000 | |||||||
Option grant to purchase common stock | shares | 2,000 | |||||||
Option vesting description | The option will vest over four years at the rate of 25% on February 6, 2018 and the remainder in equal quarterly installments over the following three years. | |||||||
Subsequent Event [Member] | Chief Executive Officer [Member] | Tranche 1 [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Options vesting period | 4 years | |||||||
Option vesting percentage | 25.00% | |||||||
Option vesting date | Feb. 6, 2018 | |||||||
Subsequent Event [Member] | Chief Executive Officer [Member] | Tranche 2 [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Remainder period for vesting option | 3 years | |||||||
Subsequent Event [Member] | January 2017 Corporate Restructuring [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Restructuring and related cost, number of expected employees after headcount reduction | Employee | 80 | |||||||
Subsequent Event [Member] | Maximum [Member] | Chief Executive Officer [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Percentage of eligible annual bonus on base salary | 65.00% | |||||||
Subsequent Event [Member] | Maximum [Member] | January 2017 Corporate Restructuring [Member] | One-time Employee Termination Benefits [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Restructuring expenses | $ 8,500,000 | |||||||
Subsequent Event [Member] | Minimum [Member] | January 2017 Corporate Restructuring [Member] | One-time Employee Termination Benefits [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Restructuring expenses | $ 7,500,000 | |||||||
Subsequent Event [Member] | Asset Sale Agreement [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Payment of termination fee | $ 25,000,000 | |||||||
Minimum percentage of consolidated assets in commercial business | 50.00% | |||||||
Minimum percentage of voting securities | 50.00% | |||||||
Subsequent Event [Member] | Baxalta [Member] | License and Collaboration Agreements [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Net milestone payments entitled to receive | $ 33,000,000 | |||||||
Subsequent Event [Member] | Ipsen [Member] | Asset Sale Agreement [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Upfront cash payment to be received | $ 575,000,000 | |||||||
Subsequent Event [Member] | Ipsen [Member] | Asset Sale Agreement [Member] | Manufacturing Facility [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Area of sublease property | ft² | 68,409 | |||||||
Subsequent Event [Member] | Ipsen [Member] | Asset Sale Agreement [Member] | Maximum [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Additional payments receivable on achievement of certain milestone events | $ 450,000,000 | |||||||
Out-of-pocket expenses to be paid | $ 3,000,000 |