Aerie Pharmaceuticals (AERI) 10-Q 3 May 17 2017 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2017	Apr. 26, 2017
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2017
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q1
Trading Symbol	AERI
Entity Registrant Name	AERIE PHARMACEUTICALS INC
Entity CIK	1,337,553
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding (in shares)		33,634,941

Consolidated Balance Sheets (Un

Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Current assets
Cash and cash equivalents	$ 139,534	$ 197,945
Short-term investments	68,330	35,717
Prepaid expenses and other current assets	2,351	4,028
Total current assets	210,215	237,690
Property, plant and equipment, net	12,532	7,857
Other assets, net	2,661	2,707
Total assets	225,408	248,254
Current liabilities
Accounts payable and other current liabilities	13,023	18,820
Interest payable	539	551
Total current liabilities	13,562	19,371
Convertible notes, net of discounts	123,615	123,539
Other non-current liabilities	4,115	0
Total liabilities	141,292	142,910
Commitments and contingencies (Note 11)
Stockholders’ equity
Preferred stock, $0.001 par value; 15,000,000 shares authorized as of March 31, 2017 and December 31, 2016; None issued and outstanding	0	0
Common stock, $0.001 par value; 150,000,000 shares authorized as of March 31, 2017 and December 31, 2016; 33,634,673 and 33,458,607 shares issued and outstanding as of March 31, 2017 and December 31, 2016, respectively	34	33
Additional paid-in capital	426,597	422,002
Accumulated other comprehensive loss	(105)	(68)
Accumulated deficit	(342,410)	(316,623)
Total stockholders’ equity	84,116	105,344
Total liabilities and stockholders’ equity	$ 225,408	$ 248,254

Consolidated Balance Sheets (U3

Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Mar. 31, 2017	Dec. 31, 2016
Statement of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	15,000,000	15,000,000
Preferred stock, issued (in shares)	0	0
Preferred stock, outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	150,000,000	150,000,000
Common stock, shares issued (in shares)	33,634,673	33,458,607
Common stock, shares outstanding (in shares)	33,634,673	33,458,607

Consolidated Statements of Oper

Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Operating expenses
Selling, general and administrative	$ (14,475)	$ (9,801)
Research and development	(10,954)	(12,309)
Loss from operations	(25,429)	(22,110)
Other income (expense), net	(312)	(548)
Net loss before income taxes	(25,741)	(22,658)
Income tax expense	(46)	(46)
Net loss	(25,787)	(22,704)
Net loss attributable to common stockholders—basic and diluted	$ (25,787)	$ (22,704)
Net loss per share attributable to common stockholders—basic and diluted (in dollars per share)	$ (0.76)	$ (0.85)
Weighted average number of common shares outstanding—basic and diluted (in shares)	33,777,395	26,723,266
Net loss	$ (25,787)	$ (22,704)
Unrealized gain (loss) on available-for-sale investments	(37)	111
Comprehensive loss	$ (25,824)	$ (22,593)

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Cash flows from operating activities
Net loss	$ (25,787)	$ (22,704)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation	291	223
Amortization of deferred financing costs and debt discount	76	75
Amortization and accretion of premium or discount on available-for-sale investments, net	52	147
Stock-based compensation	4,850	3,534
Changes in operating assets and liabilities
Prepaid, current and other assets	1,427	503
Accounts payable and other current liabilities	(5,733)	(1,130)
Interest payable	(30)	(6)
Net cash used in operating activities	(24,854)	(19,358)
Cash flows from investing activities
Purchase of available-for-sale investments	(45,561)	(13,265)
Maturity of available-for-sale investments	12,860	16,036
Purchase of property, plant and equipment	(904)	(335)
Net cash (used in) provided by investing activities	(33,605)	2,436
Cash flows from financing activities
Proceeds from exercise of stock options	551	4
Proceeds from exercise of stock purchase rights	148	252
Tax withholdings related to restricted stock awards	(651)	(128)
Net cash provided by financing activities	48	128
Net change in cash and cash equivalents	(58,411)	(16,794)
Beginning of period	197,945	91,060
End of period	139,534	74,266
Supplemental disclosures
Income taxes paid	0	1,789
Interest paid	551	551
Amounts capitalized under build-to-suit lease transaction	4,204	0
Interest capitalized during construction period for build-to-suit lease transaction	$ 46	$ 0

The Company

The Company	3 Months Ended
	Mar. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
The Company	The Company Aerie Pharmaceuticals, Inc. (“Aerie”), with its wholly-owned subsidiaries Aerie Distribution, Inc., Aerie Pharmaceuticals Limited and Aerie Pharmaceuticals Ireland Limited (“Aerie Distribution,” “Aerie Limited” and “Aerie Ireland Limited,” respectively, together with Aerie, the “Company”), is a clinical-stage pharmaceutical company focused on the discovery, development and commercialization of small molecule products to treat patients with glaucoma and other diseases of the eye. In 2015, the Company revised its corporate structure to align with its business strategy outside of North America by establishing Aerie Limited and Aerie Ireland Limited. Aerie assigned the beneficial rights to its non-U.S. and non-Canadian intellectual property for its lead product candidates to Aerie Limited (the “IP Assignment”). As part of the IP Assignment, Aerie and Aerie Limited entered into a research and development cost sharing agreement pursuant to which Aerie and Aerie Limited will share the costs of the development of intellectual property and Aerie Limited and Aerie Ireland Limited entered into a license arrangement pursuant to which Aerie Ireland Limited will develop and commercialize the beneficial rights of the intellectual property assigned as part of the IP Assignment. In 2016, Aerie assigned the beneficial rights to certain of Aerie’s intellectual property in the U.S. and Canada to Aerie Distribution, and amended and restated the research and development cost sharing agreement to transfer Aerie’s rights and obligations under the agreement to Aerie Distribution. The Company has its principal executive offices in Irvine, California and operates as one business segment. The Company has not yet commenced commercial operations and therefore has not generated product revenue. The Company’s activities since inception have primarily consisted of developing product candidates, raising capital and performing research and development activities. The Company does not expect to generate revenue until and unless it receives regulatory approval of and successfully commercializes its current product candidates. The Company has incurred losses and experienced negative operating cash flows since inception. The Company has funded its operations primarily through the sale of equity securities and issuance of convertible notes (Note 7). If the Company does not successfully commercialize any of its current product candidates, it may be unable to generate product revenue or achieve profitability. Accordingly, the Company may be required to obtain further funding through other public or private offerings, debt financing, collaboration and licensing arrangements or other sources. Adequate additional funding may not be available to the Company on acceptable terms, or at all. If the Company is unable to raise capital when needed or on attractive terms, it may be forced to delay, reduce or eliminate its research and development programs or commercialization efforts.

Significant Accounting Policies

Significant Accounting Policies	3 Months Ended
	Mar. 31, 2017
Accounting Policies [Abstract]
Significant Accounting Policies	Significant Accounting Policies Basis of Presentation The Company’s interim consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). In the opinion of management, the Company has made all necessary adjustments, which include normal recurring adjustments necessary for a fair statement of the Company’s consolidated financial position and results of operations for the interim periods presented. Certain information and disclosures normally included in the annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes for the year ended December 31, 2016 included in the Company’s Annual Report on Form 10-K. The results for the three months ended March 31, 2017 are not necessarily indicative of the results to be expected for a full year, any other interim periods or any future year or period. Principles of Consolidation The interim consolidated financial statements include the accounts of Aerie and its wholly-owned subsidiaries. All intercompany accounts, transactions and profits have been eliminated in consolidation. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of income and expenses during the reporting periods. Significant items subject to such estimates and assumptions include the valuation of stock options and operating expense accruals. Actual results could differ from the Company’s estimates. Investments The Company determines the appropriate classification of its investments in debt and equity securities at the time of purchase. The Company’s investments are comprised of certificates of deposit, commercial paper, corporate bonds and government agency securities that are classified as available-for-sale in accordance with ASC 320, Investments—Debt and Equity Securities. The Company classifies investments available to fund current operations as current assets on its consolidated balance sheets. Investments are classified as long-term assets on the consolidated balance sheets if (i) the Company has the intent and ability to hold the investments for a period of at least one year and (ii) the contractual maturity date of the investments is greater than one year. Available-for-sale investments are recorded at fair value, with unrealized gains or losses included in Comprehensive loss on the consolidated statements of operations and comprehensive loss and in Accumulated other comprehensive loss on the consolidated balance sheets. For the three months ended March 31, 2017 and 2016 , the Company recorded unrealized losses of $37,000 and unrealized gains of $111,000 , respectively. Realized gains and losses are determined using the specific identification method and are included as a component of Other income (expense), net (Note 3). There were no realized gains or losses recognized for the three months ended March 31, 2017 or 2016 . The Company reviews investments for other-than-temporary impairment whenever the fair value of an investment is less than the amortized cost and evidence indicates that an investment’s carrying amount is not recoverable within a reasonable period of time. To determine whether an impairment is other-than-temporary, the Company considers its intent to sell, or whether it is more likely than not that the Company will be required to sell the investment before recovery of the investment’s amortized cost basis. Evidence considered in this assessment includes reasons for the impairment, the severity and the duration of the impairment and changes in value subsequent to period end. As of March 31, 2017 , there were no investments with a fair value that was significantly lower than the amortized cost basis or any investments that had been in an unrealized loss position for a significant period. Fair Value Measurements The Company records certain financial assets and liabilities at fair value based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. The fair value of the Company’s financial instruments, including cash and cash equivalents, short-term investments and other current assets, approximate their respective carrying values due to the short-term nature of these instruments. The estimated fair value of the 2014 Convertible Notes (as defined in Note 7) was $255.4 million and $209.6 million as of March 31, 2017 and December 31, 2016 , respectively. The increase in the estimated fair value of the 2014 Convertible Notes was primarily attributable to the change in the closing price of Aerie’s common stock on March 31, 2017 as compared to December 31, 2016 . As of March 31, 2017 and December 31, 2016 , all outstanding warrants are classified as equity and are recorded within additional paid-in capital on the consolidated balance sheets. Recent Accounting Pronouncements In January 2017, the Financial Accounting Standards Board (the “FASB”) issued ASU 2017-03, which amends the FASB’s Accounting Standard Codification for SEC Staff announcements made at recent Emerging Issues Task Force (EITF) meetings. Registrants are required to disclose the effect that recently issued accounting standards will have on their financial statements when adopted in a future period. In cases where a registrant cannot reasonably estimate the impact of the adoption, additional qualitative disclosures should be considered. The Company adopted this accounting standard update as of March 31, 2017 . The adoption of this accounting standard update did not have a material effect on the Company’s consolidated financial statements and disclosures. In March 2016, the FASB issued ASU 2016-09, which provides guidance related to how companies account for certain aspects of share-based payment awards to employees, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The Company adopted this accounting standard update as of March 31, 2017 . The provisions of this accounting standard update did not have a material effect on the Company’s consolidated financial statements and disclosures. In October 2016, the FASB issued ASU 2016-16, which eliminates the exception to the principle in ASC 740, Income Taxes, that generally requires comprehensive recognition of current and deferred income taxes for all intra-entity sales of assets other than inventory. As a result, a reporting entity would recognize the tax expense from the sale of the asset in the seller’s tax jurisdiction when the transfer occurs, even though the pre-tax effects of that transaction are eliminated in consolidation. The new standard is effective for the Company for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, with early adoption permitted, and must be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The Company is currently evaluating the impact of this accounting standard update on the Company’s consolidated financial statements and disclosures. In June 2016, the FASB issued ASU 2016-13, which requires that financial assets measured at amortized cost be presented at the net amount expected to be collected. Currently, U.S. GAAP delays recognition of the full amount of credit losses until the loss is probable of occurring. Under this new standard, the income statement will reflect an entity’s current estimate of all expected credit losses. The measurement of expected credit losses will be based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. Credit losses relating to available-for-sale debt securities will be recorded through an allowance for credit losses rather than as a direct write-down to the security. The new standard is effective for the Company for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted as of fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The new guidance prescribes different transition methods for the various provisions. The Company is currently evaluating the impact of this accounting standard update on the Company’s consolidated financial statements and disclosures. In February 2016, the FASB issued ASU 2016-02, which requires lessees to recognize a right of use asset and related lease liability for those leases classified as operating leases at the commencement date and for those leases that have lease terms of more than 12 months. The guidance is effective for annual periods beginning after December 15, 2018, and all annual and interim periods thereafter, with early adoption permitted, and must be adopted using a modified retrospective transition approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements, and provides for certain practical expedients. The Company is currently evaluating the impact of this accounting standard update on the Company’s consolidated financial statements and disclosures. In January 2016, the FASB issued ASU 2016-01, which provides guidance related to the accounting for equity investments, financial liabilities under the fair value option and the presentation and disclosure requirements for financial instruments. The guidance is effective for annual periods beginning after December 15, 2017, and all annual and interim periods thereafter, with early adoption permitted. The new guidance prescribes different transition methods for the various provisions. The Company is currently evaluating the impact of this accounting standard update on the Company’s consolidated financial statements and disclosures. Net Loss per Share Attributable to Common Stock Basic net loss per share attributable to common stock (“Basic EPS”) is calculated by dividing the net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding for the period, without consideration for potentially dilutive securities with the exception of warrants for common stock with a $0.05 exercise price, which are exercisable for nominal consideration and are therefore included in the calculation of the weighted-average number of shares of common stock as common stock equivalents. Diluted net loss per share attributable to common stock (“Diluted EPS”) gives effect to all dilutive potential shares of common stock outstanding during this period. For Diluted EPS, net loss attributable to common stockholders used in calculating Basic EPS is adjusted for certain items related to the dilutive securities. For all periods presented, Aerie’s potential common stock equivalents have been excluded from the computation of Diluted EPS as their inclusion would have the effect of reducing the net loss per share of common stock. Therefore, the denominator used to calculate Basic EPS and Diluted EPS is the same in all periods presented. Aerie’s potential common stock equivalents that have been excluded from the computation of Diluted EPS for all periods presented consist of the following: THREE MONTHS ENDED 2017 2016 2014 Convertible Notes (1) 5,040,323 5,040,323 Outstanding stock options 5,708,215 5,201,419 Stock purchase warrants 157,500 157,500 Unvested restricted common stock awards 348,660 190,670 (1) Conversion is limited to a 9.985% ownership cap in shares of common stock by the holder. In addition to the common stock equivalents presented above, the 2014 Convertible Notes provide for an increase in the conversion rate if conversion is elected in connection with a significant corporate transaction. Refer to Note 7 for further information regarding the 2014 Convertible Notes.

Other Income (Expense), Net

Other Income (Expense), Net	3 Months Ended
	Mar. 31, 2017
Other Income and Expenses [Abstract]
Other Income (Expense), Net	Other Income (Expense), Net Other income (expense), net consists of the following: THREE MONTHS ENDED (in thousands) 2017 2016 Interest and amortization expense $ (597 ) $ (688 ) Investment and other income, net 285 140 $ (312 ) $ (548 )

Investments

Investments	3 Months Ended
	Mar. 31, 2017
Investments, Debt and Equity Securities [Abstract]
Investments	Investments Cash, cash equivalents and investments as of March 31, 2017 included the following: (in thousands) AMORTIZED COST GROSS UNREALIZED GAINS GROSS UNREALIZED LOSSES FAIR VALUE Cash and cash equivalents: Cash and money market accounts $ 133,535 $ — $ — $ 133,535 Commercial paper 5,999 — — 5,999 Total cash and cash equivalents $ 139,534 $ — $ — $ 139,534 Investments: Certificates of deposit (due within 1 year) $ 3,800 $ 1 $ (1 ) $ 3,800 Commercial paper (due within 1 year) 27,285 — — 27,285 Corporate bonds (due within 1 year) 37,350 1 (106 ) 37,245 Total investments $ 68,435 $ 2 $ (107 ) $ 68,330 Total cash, cash equivalents, and investments $ 207,969 $ 2 $ (107 ) $ 207,864 Cash, cash equivalents and investments as of December 31, 2016 included the following: (in thousands) AMORTIZED COST GROSS UNREALIZED GAINS GROSS UNREALIZED LOSSES FAIR VALUE Cash and cash equivalents: Cash and money market accounts $ 196,445 $ — $ — $ 196,445 Commercial paper 1,500 — — 1,500 Total cash and cash equivalents $ 197,945 $ — $ — $ 197,945 Investments: Certificates of deposit (due within 1 year) $ 6,920 $ 4 $ (1 ) $ 6,923 Corporate bonds (due within 1 year) 27,615 4 (75 ) 27,544 Government agencies (due within 1 year) 1,250 — — 1,250 Total investments $ 35,785 $ 8 $ (76 ) $ 35,717 Total cash, cash equivalents, and investments $ 233,730 $ 8 $ (76 ) $ 233,662

Fair Value Measurements

Fair Value Measurements	3 Months Ended
	Mar. 31, 2017
Fair Value Disclosures [Abstract]
Fair Value Measurements	Fair Value Measurements The Company records certain financial assets and liabilities at fair value in accordance with the provisions of ASC Topic 820 on fair value measurements. As defined in the guidance, fair value, defined as an exit price, represents the amount that would be received to sell an asset or pay to transfer a liability in an orderly transaction between market participants. As a result, fair value is a market-based approach that should be determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering these assumptions, the guidance defines a three-tier value hierarchy that prioritizes the inputs used in the valuation methodologies in measuring fair value. • Level 1—Unadjusted quoted prices in active, accessible markets for identical assets or liabilities. • Level 2—Other inputs that are directly or indirectly observable in the marketplace. • Level 3—Unobservable inputs that are supported by little or no market activity. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The following tables summarize the fair value of financial assets and liabilities that are measured at fair value and the classification by level of input within the fair value hierarchy: FAIR VALUE MEASUREMENTS AS OF MARCH 31, 2017 (in thousands) Level 1 Level 2 Level 3 Total Cash and cash equivalents: Cash and money market accounts $ 133,535 $ — $ — $ 133,535 Commercial paper — 5,999 — 5,999 Total cash and cash equivalents $ 133,535 $ 5,999 $ — $ 139,534 Investments: Certificates of deposit $ — $ 3,800 $ — $ 3,800 Commercial paper — 27,285 — 27,285 Corporate bonds — 37,245 — 37,245 Total investments $ — $ 68,330 $ — $ 68,330 Total cash, cash equivalents, and investments $ 133,535 $ 74,329 $ — $ 207,864 FAIR VALUE MEASUREMENTS AS OF DECEMBER 31, 2016 (in thousands) Level 1 Level 2 Level 3 Total Cash and cash equivalents: Cash and money market accounts $ 196,445 $ — $ — $ 196,445 Commercial paper — 1,500 — 1,500 Total cash and cash equivalents $ 196,445 $ 1,500 $ — $ 197,945 Investments: Certificates of deposit $ — $ 6,923 $ — $ 6,923 Corporate bonds — 27,544 — 27,544 Government agencies — 1,250 — 1,250 Total investments $ — $ 35,717 $ — $ 35,717 Total cash, cash equivalents, and investments $ 196,445 $ 37,217 $ — $ 233,662 As of March 31, 2017 and December 31, 2016 , the estimated fair value of the 2014 Convertible Notes was $255.4 million and $209.6 million , respectively. The estimated fair value of the 2014 Convertible Notes was determined using a scenario analysis and Monte Carlo simulation model to capture the various features of the 2014 Convertible Notes. The scenario analysis and Monte Carlo simulation require the use of Level 3 unobservable inputs and subjective assumptions, including but not limited to the probability of conversion, stock price volatility, the risk free interest rate and credit spread. The increase in the estimated fair value of the 2014 Convertible Notes was primarily attributable to the change in the closing price of Aerie’s common stock on March 31, 2017 as compared to December 31, 2016 . The estimates presented are not necessarily indicative of amounts that could be realized in a current market exchange. The use of alternative market assumptions and estimation methodologies could have a material effect on these estimates of fair value.

Accounts Payable & Other Curren

Accounts Payable & Other Current Liabilities	3 Months Ended
	Mar. 31, 2017
Payables and Accruals [Abstract]
Accounts Payable & Other Current Liabilities	Accounts Payable & Other Current Liabilities Accounts payable and other current liabilities consist of the following: (in thousands) MARCH 31, 2017 DECEMBER 31, 2016 Accounts payable $ 1,957 $ 5,610 Accrued expenses and other liabilities: Employee benefits and compensation related accruals (1) 2,031 4,111 Selling, general and administrative related accruals (2) 4,126 2,908 Research and development related accruals (3) 4,909 6,191 $ 13,023 $ 18,820 (1) Comprised of accrued bonus, accrued vacation and other employee related expenses, and liabilities under the Company’s employee stock purchase plan. (2) Comprised of accruals such as outside professional fees and other business related expenses. (3) Comprised of accruals such as fees for investigative sites, contract research organizations, contract manufacturing organizations and other service providers that assist in conducting preclinical research studies and clinical trials.

Convertible Notes

Convertible Notes	3 Months Ended
	Mar. 31, 2017
Debt Disclosure [Abstract]
Convertible Notes	Convertible Notes On September 30, 2014, Aerie issued $125.0 million aggregate principle amount of senior secured convertible notes (“the 2014 Convertible Notes”) to Deerfield Partners, L.P., Deerfield International Master Fund, L.P., Deerfield Private Design Fund III, L.P., Deerfield Special Situations Fund, L.P. and Deerfield Special Situations International Master Fund, L.P. On January 1, 2015, Deerfield Special Situations International Master Fund, L.P. transferred all of its rights under the 2014 Convertible Notes to Deerfield Special Situations Fund, L.P. (together with the other Deerfield entities listed above, “Deerfield”). The 2014 Convertible Notes were issued pursuant to a note purchase agreement (as amended and supplemented from time to time, the “Note Purchase Agreement”), dated as of September 8, 2014, among Aerie and the Deerfield entities party thereto. The 2014 Convertible Notes bear interest at a rate of 1.75% per annum payable quarterly in arrears on the first business day of each January, April, July and October. The 2014 Convertible Notes mature on the seventh anniversary from the date of issuance , unless earlier converted. The 2014 Convertible Notes are guaranteed on a senior secured basis by Aerie Distribution. The 2014 Convertible Notes constitute the senior secured obligations of Aerie and Aerie Distribution, collateralized by a first priority security interest in substantially all of the assets of Aerie and Aerie Distribution. The Note Purchase Agreement provides that, upon the request of Aerie, Deerfield will release all of the liens on the collateral and the security agreement will terminate if both of the following occur: (i) beginning one month after FDA approval of either Rhopressa ™ or Roclatan ™ , shares of Aerie’s common stock have traded at a price above $30 per share (subject to adjustment for any subdivision or combination of outstanding common stock) for 30 consecutive trading days, and (ii) Aerie is prepared to close a financing that will be secured by a lien on Aerie’s assets, subject only to the release of the lien on Aerie’s assets held by Deerfield. At closing, Aerie paid Deerfield a one-time transaction fee of $625,000 . In addition, Aerie reimbursed Deerfield in the amount of $250,000 for certain expenses incurred by Deerfield in connection with the transaction. Aerie also incurred $1.3 million of legal and advisory fees in connection with the transaction. The 2014 Convertible Notes are convertible at any time at the option of Deerfield, in whole or in part, into shares of common stock, including upon the repayment of the 2014 Convertible Notes at maturity (the “Conversion Option”). However, upon conversion, Deerfield (together with their affiliates) is limited to a 9.985% ownership cap in shares of common stock (the “ 9.985% Cap”). The 9.985% Cap would remain in place upon any assignment of the 2014 Convertible Notes by Deerfield. The initial conversion price is $24.80 per share of common stock (equivalent to an initial conversion rate of 40.32 shares of common stock per $1,000 principal amount of 2014 Convertible Notes), representing a 30% premium over the closing price of the common stock on September 8, 2014. The conversion rate and the corresponding conversion price are subject to adjustment for stock dividends (other than a dividend for which Deerfield would be entitled to participate on an as-converted basis), stock splits, reverse stock splits and reclassifications. In addition, in connection with certain significant corporate transactions, Deerfield, at its option, may (i) require Aerie to prepay all or a portion of the principal amount of the 2014 Convertible Notes, plus accrued and unpaid interest, or (ii) convert all or a portion of the principal amount of the 2014 Convertible Notes into shares of common stock or receive the consideration Deerfield would have received had Deerfield converted the 2014 Convertible Notes immediately prior to the consummation of the transaction. The 2014 Convertible Notes provide for an increase in the conversion rate if Deerfield elects to convert their 2014 Convertible Notes in connection with a significant corporate transaction. The current maximum increase to the initial conversion rate, in connection with a significant corporate transaction, is 12.07 shares of common stock per $1,000 principal amount of 2014 Conversion Notes, which decreases over time and is determined by reference to the price of the common stock prior to the consummation of the significant corporate transaction or the value of the significant corporate transaction. The Note Purchase Agreement contains various representations and warranties, and affirmative and negative covenants, customary for financings of this type, including restrictions on the incurrence of additional debt and liens on Aerie’s and its subsidiaries’ assets. As of March 31, 2017 , Aerie was in compliance with the covenants. The Note Purchase Agreement also provides for certain events of default, including the failure to pay principal and interest when due; inaccuracies in Aerie’s or Aerie Distribution’s representations and warranties to Deerfield; failure to comply with any of the covenants; Aerie’s or Aerie Distribution’s insolvency or the occurrence of certain bankruptcy-related events; certain judgments against Aerie and its subsidiaries; the suspension, cancellation or revocation of governmental authorizations that are reasonably expected to have a material adverse effect on Aerie’s business; the acceleration of a specified amount of indebtedness; and the failure to deliver shares of common stock upon conversion of the 2014 Convertible Notes. If any event of default were to occur, and continue beyond any applicable cure period, the holders of more than 50% of the aggregate principal amount of the then outstanding 2014 Convertible Notes would be permitted to declare the principal and accrued and unpaid interest to be immediately due and payable. The Company recorded the 2014 Convertible Notes as long-term debt at face value less debt discounts relating to fees and certain expenses paid to Deerfield in connection with the transaction. The Conversion Option is a derivative that qualifies for an exemption from bifurcation and liability accounting as provided for in ASC Topic 815, Derivatives and Hedging – Contracts in Entity’s Own Equity (“ASC 815”). Since the Conversion Option is not bifurcated as a derivative pursuant to ASC 815, the Company further evaluated the Conversion Option to determine whether it is considered a beneficial conversion feature (“BCF”). The Company determined that the initial accounting conversion price was greater than the fair value of the common stock at the close of trading on the date of issuance, therefore no BCF existed at inception. However, if Deerfield elects to convert their 2014 Convertible Notes in connection with a significant corporate transaction, the increase to the initial conversion rate may cause a contingent BCF to exist at the time of conversion. The contingent BCF, if any, will be recognized in earnings when the contingency is resolved and will be measured using the fair value of the common stock at the close of trading on the date of issuance and the accounting conversion price as adjusted for such an increase to the initial conversion rate. In connection with the IP Assignment, Aerie granted Deerfield a security interest in certain intercompany promissory notes and pledged 65% of the voting stock of Aerie Limited. Upon the request of Aerie, Deerfield will release the lien on the intercompany promissory notes under certain circumstances. Unamortized debt discounts were $1.4 million as of March 31, 2017 . Debt discounts are amortized using the effective interest method through the earlier of maturity or the conversion of the 2014 Convertible Notes. The table below summarizes the carrying value of the 2014 Convertible Notes as of March 31, 2017 : (in thousands) MARCH 31, 2017 Gross proceeds $ 125,000 Initial value of issuance costs recorded as debt discount (2,146 ) Amortization of debt discount and issuance costs 761 Carrying value $ 123,615 For the three months ended March 31, 2017 and 2016 interest expense related to the 2014 Convertible Notes was $521,000 and $545,000 , respectively.

Built-to-Suit Lease

Built-to-Suit Lease	3 Months Ended
	Mar. 31, 2017
Leases [Abstract]
Built-to-Suit Lease	Build-to-Suit Lease In January 2017, the Company entered into a lease agreement, expiring in September 2037, for a new manufacturing plant in Athlone, Ireland under which the Company is leasing approximately 30,000 square feet of interior floor space for build-out. The Company is permitted to terminate the lease beginning in September 2027. Total expected rental payments through September 2027 are approximately $2.5 million . Total expected rental payments through the expiration of the lease are approximately $ 5.7 million . The Company is not the legal owner of the leased space. However, in accordance with ASC 840, Leases, the Company is deemed to be the owner of the leased space, including the building shell, during the construction period because of the Company’s expected level of direct financial and operational involvement in the substantial tenant improvements required. As a result, the Company capitalized approximately $4.2 million as a build-to-suit asset within property, plant and equipment, net and recognized a corresponding build-to-suit facility lease obligation within other non-current liabilities on its consolidated balance sheets equal to the estimated replacement cost of the building at the inception of the lease. Additionally, construction costs incurred as part of the build-out and tenant improvements will also be capitalized within property, plant and equipment, net. Rental payments made under the lease will be allocated to interest expense and the build-to-suit facility lease obligation, based on the implicit rate of the build-to-suit facility lease obligation. The build-to-suit facility lease obligation was approximately $4.2 million as of March 31, 2017 .

Stock Purchase Warrants

Stock Purchase Warrants	3 Months Ended
	Mar. 31, 2017
Equity [Abstract]
Stock Purchase Warrants	Stock Purchase Warrants As of March 31, 2017 , the following equity classified warrants were outstanding: NUMBER OF UNDERLYING SHARES EXERCISE PRICE PER SHARE WARRANT EXPIRATION DATE TYPE OF EQUITY SECURITY 75,000 $ 5.00 February 2019 Common Stock 75,000 $ 5.00 November 2019 Common Stock 7,500 $ 5.00 August 2020 Common Stock 223,482 $ 0.05 December 2019 Common Stock The warrants outstanding as of March 31, 2017 are all currently exercisable with weighted-average remaining lives of 2.5 years .

Stock-based Compensation

Stock-based Compensation	3 Months Ended
	Mar. 31, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Stock-based Compensation	Stock-based Compensation Stock-based compensation expense for options granted and restricted stock awards (“RSAs”) is reflected in the consolidated statements of operations and comprehensive loss as follows: THREE MONTHS ENDED (in thousands) 2017 2016 Research and development $ 1,064 $ 712 Selling, general and administrative 3,786 2,822 Total $ 4,850 $ 3,534 The estimated fair value of options granted is determined on the date of grant using the Black-Scholes option pricing model. Options granted to non-employees are revalued at each financial reporting period until the required service is performed. The fair value of RSAs granted is based on the market value of Aerie’s common stock on the date of grant. Compensation expense related to time-based RSAs is expensed on a straight-line basis over the vesting period. For RSAs with non-market performance conditions, the Company evaluates the criteria for each grant to determine the probability that the performance condition will be achieved. Compensation expense for RSAs with non-market performance conditions is recognized over the respective service period when it is deemed probable that the performance condition will be satisfied. As of March 31, 2017 , the Company had $43.4 million of unrecognized compensation expense related to options granted under its equity plans. This cost is expected to be recognized over a weighted average period of 3.0 years as of March 31, 2017 . The weighted average remaining contractual life on all outstanding options as of March 31, 2017 was 7.5 years . As of March 31, 2017 , the Company had $11.9 million of unrecognized compensation expense, related to unvested RSAs. This cost is expected to be recognized over the weighted average contractual term period of 3.4 years as of March 31, 2017 . Equity Plans The Company maintains three equity compensation plans, the 2005 Aerie Pharmaceutical Stock Plan (the “2005 Plan”), the 2013 Omnibus Incentive Plan (the “2013 Equity Plan”), which was amended and restated as the Aerie Pharmaceuticals, Inc. Amended and Restated Omnibus Incentive Plan (the “Amended and Restated Equity Plan”), as described below, and the Aerie Pharmaceuticals, Inc. Inducement Award Plan (the “Inducement Award Plan”), as described below. The 2005 Plan, the Amended and Restated Equity Plan and the Inducement Award Plan are referred to collectively as the “Plans.” On October 30, 2013, the effective date of the 2013 Equity Plan, the 2005 Plan was frozen and no additional awards have been or will be made under the 2005 Plan. Any remaining shares available for future grant under the 2005 Plan were allocated to the 2013 Equity Plan. At the 2015 Annual Meeting of Stockholders held on April 10, 2015, Aerie’s stockholders approved the adoption of the Amended and Restated Equity Plan and no additional awards have been or will be made under the 2013 Equity Plan. Any remaining shares available under the 2013 Equity Plan were allocated to the Amended and Restated Equity Plan. The Amended and Restated Equity Plan provides for the granting of up to 5,729,068 equity awards in respect of common stock of Aerie, including equity awards that were available for issuance under the 2013 Equity Plan. On December 7, 2016, Aerie’s Board of Directors approved the Inducement Award Plan which provides for the granting of up to 418,000 equity awards in respect of common stock of Aerie, which was increased by 250,000 shares on March 30, 2017. Awards granted under the Inducement Award Plan are intended to qualify as employment inducement awards under NASDAQ Listing Rule 5635(c)(4). The following table summarizes the stock option activity under the Plans: NUMBER OF WEIGHTED AVERAGE WEIGHTED AGGREGATE Options outstanding at December 31, 2016 5,255,930 $ 14.34 Granted 643,059 43.71 Exercised (173,203 ) 9.75 Canceled (17,571 ) 34.34 Options outstanding at March 31, 2017 5,708,215 $ 17.73 7.5 $ 157,690 Options exercisable at March 31, 2017 3,406,018 $ 11.32 6.7 $ 115,894 The following table summarizes the RSA activity under the Plans: NUMBER OF SHARES WEIGHTED AVERAGE FAIR VALUE PER SHARE RSAs outstanding at December 31, 2016 164,194 $ 19.87 Granted 229,493 44.38 Vested (42,691 ) 20.75 Canceled (2,336 ) 43.90 RSAs outstanding at March 31, 2017 348,660 $ 35.74 The vesting of time-based RSAs is service based with terms of one to four years. RSAs with non-market performance conditions vest upon the satisfaction of certain performance conditions and/or service conditions.

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2017
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies The Company may periodically become subject to legal proceedings and claims arising in connection with its business. The Company is not a party to any known litigation, is not aware of any unasserted claims and does not have contingency reserves established for any litigation liabilities.

Significant Accounting Polici17

Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2017
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation The Company’s interim consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). In the opinion of management, the Company has made all necessary adjustments, which include normal recurring adjustments necessary for a fair statement of the Company’s consolidated financial position and results of operations for the interim periods presented. Certain information and disclosures normally included in the annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes for the year ended December 31, 2016 included in the Company’s Annual Report on Form 10-K. The results for the three months ended March 31, 2017 are not necessarily indicative of the results to be expected for a full year, any other interim periods or any future year or period.
Principles of Consolidation	Principles of Consolidation The interim consolidated financial statements include the accounts of Aerie and its wholly-owned subsidiaries. All intercompany accounts, transactions and profits have been eliminated in consolidation.
Use of Estimates	Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of income and expenses during the reporting periods. Significant items subject to such estimates and assumptions include the valuation of stock options and operating expense accruals. Actual results could differ from the Company’s estimates.
Investments	Investments The Company determines the appropriate classification of its investments in debt and equity securities at the time of purchase. The Company’s investments are comprised of certificates of deposit, commercial paper, corporate bonds and government agency securities that are classified as available-for-sale in accordance with ASC 320, Investments—Debt and Equity Securities. The Company classifies investments available to fund current operations as current assets on its consolidated balance sheets. Investments are classified as long-term assets on the consolidated balance sheets if (i) the Company has the intent and ability to hold the investments for a period of at least one year and (ii) the contractual maturity date of the investments is greater than one year. Available-for-sale investments are recorded at fair value, with unrealized gains or losses included in Comprehensive loss on the consolidated statements of operations and comprehensive loss and in Accumulated other comprehensive loss on the consolidated balance sheets. For the three months ended March 31, 2017 and 2016 , the Company recorded unrealized losses of $37,000 and unrealized gains of $111,000 , respectively. Realized gains and losses are determined using the specific identification method and are included as a component of Other income (expense), net (Note 3). There were no realized gains or losses recognized for the three months ended March 31, 2017 or 2016 . The Company reviews investments for other-than-temporary impairment whenever the fair value of an investment is less than the amortized cost and evidence indicates that an investment’s carrying amount is not recoverable within a reasonable period of time. To determine whether an impairment is other-than-temporary, the Company considers its intent to sell, or whether it is more likely than not that the Company will be required to sell the investment before recovery of the investment’s amortized cost basis. Evidence considered in this assessment includes reasons for the impairment, the severity and the duration of the impairment and changes in value subsequent to period end.
Fair Value Measurements	Fair Value Measurements The Company records certain financial assets and liabilities at fair value based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. The fair value of the Company’s financial instruments, including cash and cash equivalents, short-term investments and other current assets, approximate their respective carrying values due to the short-term nature of these instruments.
Recent Accounting Pronouncements	Recent Accounting Pronouncements In January 2017, the Financial Accounting Standards Board (the “FASB”) issued ASU 2017-03, which amends the FASB’s Accounting Standard Codification for SEC Staff announcements made at recent Emerging Issues Task Force (EITF) meetings. Registrants are required to disclose the effect that recently issued accounting standards will have on their financial statements when adopted in a future period. In cases where a registrant cannot reasonably estimate the impact of the adoption, additional qualitative disclosures should be considered. The Company adopted this accounting standard update as of March 31, 2017 . The adoption of this accounting standard update did not have a material effect on the Company’s consolidated financial statements and disclosures. In March 2016, the FASB issued ASU 2016-09, which provides guidance related to how companies account for certain aspects of share-based payment awards to employees, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The Company adopted this accounting standard update as of March 31, 2017 . The provisions of this accounting standard update did not have a material effect on the Company’s consolidated financial statements and disclosures. In October 2016, the FASB issued ASU 2016-16, which eliminates the exception to the principle in ASC 740, Income Taxes, that generally requires comprehensive recognition of current and deferred income taxes for all intra-entity sales of assets other than inventory. As a result, a reporting entity would recognize the tax expense from the sale of the asset in the seller’s tax jurisdiction when the transfer occurs, even though the pre-tax effects of that transaction are eliminated in consolidation. The new standard is effective for the Company for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, with early adoption permitted, and must be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The Company is currently evaluating the impact of this accounting standard update on the Company’s consolidated financial statements and disclosures. In June 2016, the FASB issued ASU 2016-13, which requires that financial assets measured at amortized cost be presented at the net amount expected to be collected. Currently, U.S. GAAP delays recognition of the full amount of credit losses until the loss is probable of occurring. Under this new standard, the income statement will reflect an entity’s current estimate of all expected credit losses. The measurement of expected credit losses will be based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. Credit losses relating to available-for-sale debt securities will be recorded through an allowance for credit losses rather than as a direct write-down to the security. The new standard is effective for the Company for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted as of fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The new guidance prescribes different transition methods for the various provisions. The Company is currently evaluating the impact of this accounting standard update on the Company’s consolidated financial statements and disclosures. In February 2016, the FASB issued ASU 2016-02, which requires lessees to recognize a right of use asset and related lease liability for those leases classified as operating leases at the commencement date and for those leases that have lease terms of more than 12 months. The guidance is effective for annual periods beginning after December 15, 2018, and all annual and interim periods thereafter, with early adoption permitted, and must be adopted using a modified retrospective transition approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements, and provides for certain practical expedients. The Company is currently evaluating the impact of this accounting standard update on the Company’s consolidated financial statements and disclosures. In January 2016, the FASB issued ASU 2016-01, which provides guidance related to the accounting for equity investments, financial liabilities under the fair value option and the presentation and disclosure requirements for financial instruments. The guidance is effective for annual periods beginning after December 15, 2017, and all annual and interim periods thereafter, with early adoption permitted. The new guidance prescribes different transition methods for the various provisions. The Company is currently evaluating the impact of this accounting standard update on the Company’s consolidated financial statements and disclosures.
Net Loss per Share Attributable to Common Stock	Net Loss per Share Attributable to Common Stock Basic net loss per share attributable to common stock (“Basic EPS”) is calculated by dividing the net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding for the period, without consideration for potentially dilutive securities with the exception of warrants for common stock with a $0.05 exercise price, which are exercisable for nominal consideration and are therefore included in the calculation of the weighted-average number of shares of common stock as common stock equivalents. Diluted net loss per share attributable to common stock (“Diluted EPS”) gives effect to all dilutive potential shares of common stock outstanding during this period. For Diluted EPS, net loss attributable to common stockholders used in calculating Basic EPS is adjusted for certain items related to the dilutive securities. For all periods presented, Aerie’s potential common stock equivalents have been excluded from the computation of Diluted EPS as their inclusion would have the effect of reducing the net loss per share of common stock. Therefore, the denominator used to calculate Basic EPS and Diluted EPS is the same in all periods presented.

Significant Accounting Polici18

Significant Accounting Policies (Tables)	3 Months Ended
	Mar. 31, 2017
Accounting Policies [Abstract]
Schedule of Computation of Diluted EPS	’s potential common stock equivalents that have been excluded from the computation of Diluted EPS for all periods presented consist of the following: THREE MONTHS ENDED 2017 2016 2014 Convertible Notes (1) 5,040,323 5,040,323 Outstanding stock options 5,708,215 5,201,419 Stock purchase warrants 157,500 157,500 Unvested restricted common stock awards 348,660 190,670 (1) Conversion is limited to a 9.985% ownership cap in shares of common stock by the holder. In addition to the common stock equivalents presented above, the 2014 Convertible Notes provide for an increase in the conversion rate if conversion is elected in connection with a significant corporate transaction. Refer to Note 7 for further information regarding the 2014 Convertible Notes.

Other Income (Expense), Net (Ta

Other Income (Expense), Net (Tables)	3 Months Ended
	Mar. 31, 2017
Other Income and Expenses [Abstract]
Schedule of Other Income (Expense), Net	Other income (expense), net consists of the following: THREE MONTHS ENDED (in thousands) 2017 2016 Interest and amortization expense $ (597 ) $ (688 ) Investment and other income, net 285 140 $ (312 ) $ (548 )

Investments (Tables)

Investments (Tables)	3 Months Ended
	Mar. 31, 2017
Investments, Debt and Equity Securities [Abstract]
Summary of Cash, Cash Equivalents and Investments	Cash, cash equivalents and investments as of March 31, 2017 included the following: (in thousands) AMORTIZED COST GROSS UNREALIZED GAINS GROSS UNREALIZED LOSSES FAIR VALUE Cash and cash equivalents: Cash and money market accounts $ 133,535 $ — $ — $ 133,535 Commercial paper 5,999 — — 5,999 Total cash and cash equivalents $ 139,534 $ — $ — $ 139,534 Investments: Certificates of deposit (due within 1 year) $ 3,800 $ 1 $ (1 ) $ 3,800 Commercial paper (due within 1 year) 27,285 — — 27,285 Corporate bonds (due within 1 year) 37,350 1 (106 ) 37,245 Total investments $ 68,435 $ 2 $ (107 ) $ 68,330 Total cash, cash equivalents, and investments $ 207,969 $ 2 $ (107 ) $ 207,864 Cash, cash equivalents and investments as of December 31, 2016 included the following: (in thousands) AMORTIZED COST GROSS UNREALIZED GAINS GROSS UNREALIZED LOSSES FAIR VALUE Cash and cash equivalents: Cash and money market accounts $ 196,445 $ — $ — $ 196,445 Commercial paper 1,500 — — 1,500 Total cash and cash equivalents $ 197,945 $ — $ — $ 197,945 Investments: Certificates of deposit (due within 1 year) $ 6,920 $ 4 $ (1 ) $ 6,923 Corporate bonds (due within 1 year) 27,615 4 (75 ) 27,544 Government agencies (due within 1 year) 1,250 — — 1,250 Total investments $ 35,785 $ 8 $ (76 ) $ 35,717 Total cash, cash equivalents, and investments $ 233,730 $ 8 $ (76 ) $ 233,662

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	3 Months Ended
	Mar. 31, 2017
Fair Value Disclosures [Abstract]
Fair Value Measurements	The following tables summarize the fair value of financial assets and liabilities that are measured at fair value and the classification by level of input within the fair value hierarchy: FAIR VALUE MEASUREMENTS AS OF MARCH 31, 2017 (in thousands) Level 1 Level 2 Level 3 Total Cash and cash equivalents: Cash and money market accounts $ 133,535 $ — $ — $ 133,535 Commercial paper — 5,999 — 5,999 Total cash and cash equivalents $ 133,535 $ 5,999 $ — $ 139,534 Investments: Certificates of deposit $ — $ 3,800 $ — $ 3,800 Commercial paper — 27,285 — 27,285 Corporate bonds — 37,245 — 37,245 Total investments $ — $ 68,330 $ — $ 68,330 Total cash, cash equivalents, and investments $ 133,535 $ 74,329 $ — $ 207,864 FAIR VALUE MEASUREMENTS AS OF DECEMBER 31, 2016 (in thousands) Level 1 Level 2 Level 3 Total Cash and cash equivalents: Cash and money market accounts $ 196,445 $ — $ — $ 196,445 Commercial paper — 1,500 — 1,500 Total cash and cash equivalents $ 196,445 $ 1,500 $ — $ 197,945 Investments: Certificates of deposit $ — $ 6,923 $ — $ 6,923 Corporate bonds — 27,544 — 27,544 Government agencies — 1,250 — 1,250 Total investments $ — $ 35,717 $ — $ 35,717 Total cash, cash equivalents, and investments $ 196,445 $ 37,217 $ — $ 233,662

Accounts Payable & Other Curr22

Accounts Payable & Other Current Liabilities (Tables)	3 Months Ended
	Mar. 31, 2017
Payables and Accruals [Abstract]
Summary of Accounts Payable and Other Current Liabilities	Accounts payable and other current liabilities consist of the following: (in thousands) MARCH 31, 2017 DECEMBER 31, 2016 Accounts payable $ 1,957 $ 5,610 Accrued expenses and other liabilities: Employee benefits and compensation related accruals (1) 2,031 4,111 Selling, general and administrative related accruals (2) 4,126 2,908 Research and development related accruals (3) 4,909 6,191 $ 13,023 $ 18,820 (1) Comprised of accrued bonus, accrued vacation and other employee related expenses, and liabilities under the Company’s employee stock purchase plan. (2) Comprised of accruals such as outside professional fees and other business related expenses. (3) Comprised of accruals such as fees for investigative sites, contract research organizations, contract manufacturing organizations and other service providers that assist in conducting preclinical research studies and clinical trials.

Convertible Notes (Tables)

Convertible Notes (Tables)	3 Months Ended
	Mar. 31, 2017
Debt Disclosure [Abstract]
Summary of Carrying Value of Convertible Notes	The table below summarizes the carrying value of the 2014 Convertible Notes as of March 31, 2017 : (in thousands) MARCH 31, 2017 Gross proceeds $ 125,000 Initial value of issuance costs recorded as debt discount (2,146 ) Amortization of debt discount and issuance costs 761 Carrying value $ 123,615

Stock Purchase Warrants (Tables

Stock Purchase Warrants (Tables)	3 Months Ended
	Mar. 31, 2017
Equity [Abstract]
Schedule of Equity Classified Warrants Outstanding	As of March 31, 2017 , the following equity classified warrants were outstanding: NUMBER OF UNDERLYING SHARES EXERCISE PRICE PER SHARE WARRANT EXPIRATION DATE TYPE OF EQUITY SECURITY 75,000 $ 5.00 February 2019 Common Stock 75,000 $ 5.00 November 2019 Common Stock 7,500 $ 5.00 August 2020 Common Stock 223,482 $ 0.05 December 2019 Common Stock

Stock-based Compensation (Table

Stock-based Compensation (Tables)	3 Months Ended
	Mar. 31, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Stock-Based Compensation Expense for Options Granted, Restricted Stock and Stock Purchase Rights as Reflected in Statement of Operations	Stock-based compensation expense for options granted and restricted stock awards (“RSAs”) is reflected in the consolidated statements of operations and comprehensive loss as follows: THREE MONTHS ENDED (in thousands) 2017 2016 Research and development $ 1,064 $ 712 Selling, general and administrative 3,786 2,822 Total $ 4,850 $ 3,534
Schedule of Stock Options Activity	The following table summarizes the stock option activity under the Plans: NUMBER OF WEIGHTED AVERAGE WEIGHTED AGGREGATE Options outstanding at December 31, 2016 5,255,930 $ 14.34 Granted 643,059 43.71 Exercised (173,203 ) 9.75 Canceled (17,571 ) 34.34 Options outstanding at March 31, 2017 5,708,215 $ 17.73 7.5 $ 157,690 Options exercisable at March 31, 2017 3,406,018 $ 11.32 6.7 $ 115,894
Restricted Stock and Restricted Stock Units Activity	The following table summarizes the RSA activity under the Plans: NUMBER OF SHARES WEIGHTED AVERAGE FAIR VALUE PER SHARE RSAs outstanding at December 31, 2016 164,194 $ 19.87 Granted 229,493 44.38 Vested (42,691 ) 20.75 Canceled (2,336 ) 43.90 RSAs outstanding at March 31, 2017 348,660 $ 35.74

The Company - Additional Inform

The Company - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2017Segment
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of operating segments	1

Significant Accounting Polici27

Significant Accounting Policies - Additional Information (Detail) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Accounting Policies [Abstract]
Unrealized gain (loss) on available-for-sale investments	$ (37,000)	$ 111,000
Realized investment gains or losses	0	$ 0
Investments owned, at fair value	0
Long-term debt, fair value	$ 255,400,000		$ 209,600,000
Warrants exercise price (in dollars per share)	$ 0.05

Significant Accounting Polici28

Significant Accounting Policies - Schedule of Computation of Diluted EPS (Detail) - shares	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Ownership cap in shares of common stock (as a percentage)	9.985%
Outstanding stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potential common stock equivalents excluded from the computation of diluted net loss per share (in shares)	5,708,215	5,201,419
Stock purchase warrants
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potential common stock equivalents excluded from the computation of diluted net loss per share (in shares)	157,500	157,500
Unvested restricted common stock awards
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potential common stock equivalents excluded from the computation of diluted net loss per share (in shares)	348,660	190,670
Convertible notes
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potential common stock equivalents excluded from the computation of diluted net loss per share (in shares)	5,040,323	5,040,323
Ownership cap in shares of common stock (as a percentage)	9.985%

Other Income (Expense), Net - S

Other Income (Expense), Net - Schedule of Other Income (Expense), Net (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Other Income and Expenses [Abstract]
Interest and amortization expense	$ (597)	$ (688)
Investment and other income, net	285	140
Other income (expense), net	$ (312)	$ (548)

Investments - Summary of Cash,

Investments - Summary of Cash, Cash Equivalents and Investments (Detail) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016	Mar. 31, 2016	Dec. 31, 2015
Cash and Cash Equivalents [Abstract]
Amortized Cost	$ 139,534	$ 197,945	$ 74,266	$ 91,060
Fair Value	139,534	197,945
Investments [Abstract]
Amortized Cost	207,969	233,730
Gross Unrealized Gains	2	8
Gross Unrealized Losses	(107)	(76)
Fair Value	207,864	233,662
Cash and money market accounts
Cash and Cash Equivalents [Abstract]
Amortized Cost	133,535	196,445
Fair Value	133,535	196,445
Commercial paper
Cash and Cash Equivalents [Abstract]
Amortized Cost	5,999	1,500
Fair Value	5,999	1,500
Commercial paper
Investments [Abstract]
Amortized Cost	27,285
Gross Unrealized Gains	0
Gross Unrealized Losses	0
Fair Value	27,285
Certificates of deposit (due within 1 year)
Investments [Abstract]
Amortized Cost	3,800	6,920
Gross Unrealized Gains	1	4
Gross Unrealized Losses	(1)	(1)
Fair Value	3,800	6,923
Corporate bonds (due within 1 year)
Investments [Abstract]
Amortized Cost	37,350	27,615
Gross Unrealized Gains	1	4
Gross Unrealized Losses	(106)	(75)
Fair Value	37,245	27,544
Government agencies
Investments [Abstract]
Amortized Cost		1,250
Gross Unrealized Gains		0
Gross Unrealized Losses		0
Fair Value		1,250
Total investments
Investments [Abstract]
Amortized Cost	68,435	35,785
Gross Unrealized Gains	2	8
Gross Unrealized Losses	(107)	(76)
Fair Value	$ 68,330	$ 35,717

Fair Value Measurements - Summa

Fair Value Measurements - Summary of Fair Value of Financial Assets and Liabilities that are Measured at Fair Value and the Classification by Level of Input within Fair Value Hierarchy (Detail) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total cash and cash equivalents	$ 139,534	$ 197,945
Total investments	68,330	35,717
Total cash, cash equivalents, and investments	207,864	233,662
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total cash and cash equivalents	133,535	196,445
Total investments	0	0
Total cash, cash equivalents, and investments	133,535	196,445
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total cash and cash equivalents	5,999	1,500
Total investments	68,330	35,717
Total cash, cash equivalents, and investments	74,329	37,217
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total investments	0	0
Total cash, cash equivalents, and investments	0	0
Commercial paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total investments	27,285
Commercial paper | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total investments	27,285
Certificates of deposit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total investments	3,800	6,923
Certificates of deposit | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total investments	3,800	6,923
Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total investments	37,245	27,544
Corporate bonds | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total investments	37,245	27,544
Government agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total investments		1,250
Government agencies | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total investments		1,250
Cash and money market accounts
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total cash and cash equivalents	133,535	196,445
Cash and money market accounts | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total cash and cash equivalents	133,535	196,445
Commercial paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total cash and cash equivalents	5,999	1,500
Commercial paper | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total cash and cash equivalents		0
Commercial paper | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total cash and cash equivalents	$ 5,999	$ 1,500

Fair Value Measurements - Addit

Fair Value Measurements - Additional Information (Detail) - USD ($) $ in Millions	Mar. 31, 2017	Dec. 31, 2016
Fair Value Disclosures [Abstract]
Long-term debt, fair value	$ 255.4	$ 209.6

Accounts Payable & Other Curr33

Accounts Payable & Other Current Liabilities - Summary of Accounts Payable and Other Current Liabilities (Detail) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Payables and Accruals [Abstract]
Accounts payable	$ 1,957	$ 5,610
Accrued expenses and other liabilities:
Employee benefits and compensation related accruals	2,031	4,111
Selling, general and administrative related accruals	4,126	2,908
Research and development related accruals	4,909	6,191
Accounts payable and other accrued liabilities	$ 13,023	$ 18,820

Convertible Notes - Additional

Convertible Notes - Additional Information (Detail)	1 Months Ended	3 Months Ended		9 Months Ended
	Mar. 31, 2015	Mar. 31, 2017USD ($)$ / sharesshares	Mar. 31, 2016USD ($)	Sep. 30, 2014USD ($)$ / shares
Debt Instrument [Line Items]
Aggregate amount of senior notes issued		$ 125,000,000
Debt instrument, anniversary term		7 years
Debt instrument, convertible, ownership cap in shares of common stock (as a percentage)		9.985%
Convertible notes
Debt Instrument [Line Items]
Aggregate amount of senior notes issued		$ 125,000,000
Debt instrument, interest rate percentage				1.75%
Debt instrument, convertible, stock price trigger (in dollars per share) | $ / shares				$ 30
Debt instrument, convertible, threshold trading days				30 days
Debt instrument, transaction fee				$ 625,000
Reimbursed expenses incurred by Deerfield in connection with transaction				250,000
Legal and advisory fees				$ 1,300,000
Debt instrument, convertible, ownership cap in shares of common stock (as a percentage)		9.985%
Debt instrument, convertible, initial conversion price per share (in dollars per share) | $ / shares		$ 24.80
Debt instrument, convertible, common stock conversion rate per $1,000 principal amount		0.04032
Debt instrument, convertible, conversion premium percentage		30.00%
Debt instrument, convertible, maximum increase to the initial conversion rate per $1,000 principal amount (in shares) | shares		0.01207
Debt instrument, convertible, ownership percentage threshold necessary to declare principal and accrued interest payable (more than)		50.00%
Unamortized debt discounts and debt issuance cost		$ (1,400,000)
Interest expense related to convertible notes		$ 521,000	$ 545,000
Subsidiaries | Convertible notes
Debt Instrument [Line Items]
Business acquisition, percentage of voting interests acquired	65.00%

Convertible Notes - Summary of

Convertible Notes - Summary of Carrying Value of Convertible Notes (Detail) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Debt Disclosure [Abstract]
Gross proceeds	$ 125,000
Initial value of issuance costs recorded as debt discount	(2,146)
Amortization of debt discount and issuance costs	761
Carrying value	$ 123,615	$ 123,539

Built-to-Suit Lease - Narrative

Built-to-Suit Lease - Narrative (Details) ft² in Thousands, $ in Millions	1 Months Ended	129 Months Ended	249 Months Ended
	Jan. 31, 2017USD ($)ft²	Sep. 30, 2027USD ($)	Sep. 30, 2037USD ($)	Mar. 31, 2017USD ($)
Operating Leased Assets [Line Items]
Area of interior floor space (in sqft) | ft²	30
Built-to-suit facility lease obligation				$ 4.2
Scenario, Forecast
Operating Leased Assets [Line Items]
Total rent expense		$ 2.5	$ 5.7
Property, Plant and Equipment
Operating Leased Assets [Line Items]
Capitalized amount of built-to-suit asset	$ 4.2

Stock Purchase Warrants - Sched

Stock Purchase Warrants - Schedule of Equity Classified Warrants Outstanding (Detail)	Mar. 31, 2017$ / sharesshares
Class of Warrant or Right [Line Items]
EXERCISE PRICE PER SHARE (in dollars per share)	$ 0.05
February 2019 | Common stock
Class of Warrant or Right [Line Items]
NUMBER OF UNDERLYING SHARES (in shares) | shares	75,000
EXERCISE PRICE PER SHARE (in dollars per share)	$ 5
November 2019 | Common stock
Class of Warrant or Right [Line Items]
NUMBER OF UNDERLYING SHARES (in shares) | shares	75,000
EXERCISE PRICE PER SHARE (in dollars per share)	$ 5
August 2020 | Common stock
Class of Warrant or Right [Line Items]
NUMBER OF UNDERLYING SHARES (in shares) | shares	7,500
EXERCISE PRICE PER SHARE (in dollars per share)	$ 5
December 2019 | Common stock
Class of Warrant or Right [Line Items]
NUMBER OF UNDERLYING SHARES (in shares) | shares	223,482
EXERCISE PRICE PER SHARE (in dollars per share)	$ 0.05

Stock Purchase Warrants - Addit

Stock Purchase Warrants - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2017
Equity [Abstract]
Weighted-average remaining lives	2 years 6 months

Stock-based Compensation - Stoc

Stock-based Compensation - Stock-Based Compensation Expense for Options Granted, Restricted Stock and Stock Purchase Rights as Reflected in Statement of Operations (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 4,850	$ 3,534
Research and development
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	1,064	712
Selling, general and administrative
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 3,786	$ 2,822

Stock-based Compensation - Addi

Stock-based Compensation - Additional Information (Detail) $ in Millions	Apr. 10, 2015shares	Oct. 30, 2013shares	Mar. 31, 2017USD ($)planshares	Mar. 30, 2017shares	Dec. 07, 2016shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options outstanding, weighted average remaining contractual life (in years)			7 years 6 months 6 days
Number of equity compensation plans | plan			3
Additional awards granted (in shares)			643,059
2005 Aerie Pharmaceutical stock plan and 2013 omnibus incentive plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expense | $			$ 43.4
Compensation cost, weighted average recognition period (in years)			2 years 11 months 16 days
Options outstanding, weighted average remaining contractual life (in years)			7 years 6 months 6 days
2005 Aerie Pharmaceutical Stock Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Additional awards granted (in shares)		0
2013 Omnibus incentive plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Additional awards granted (in shares)	0
Equity awards (up to) (in shares)			5,729,068
Inducement Award Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity awards (up to) (in shares)				250,000	418,000
Restricted stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized Compensation expense other than options | $			$ 11.9
Restricted stock awards, weighted average remaining contractual term (in years)			3 years 4 months 17 days
Restricted stock | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based awards, vesting period (in years)			1 year
Restricted stock | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based awards, vesting period (in years)			4 years

Stock-based Compensation - Sche

Stock-based Compensation - Schedule of Stock Options Activity (Detail) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2017USD ($)$ / sharesshares
NUMBER OF SHARES
Beginning balance (in shares) | shares	5,255,930
Granted (in shares) | shares	643,059
Exercised (in shares) | shares	(173,203)
Canceled (in shares) | shares	(17,571)
Ending balance (in shares) | shares	5,708,215
Options exercisable (in shares) | shares	3,406,018
WEIGHTED AVERAGE EXERCISE PRICE
Beginning balance (in dollars per share) | $ / shares	$ 14.34
Granted (in dollars per share) | $ / shares	43.71
Exercised (in dollars per share) | $ / shares	9.75
Cancelled (in dollars per share) | $ / shares	34.34
Ending balance (in dollars per share) | $ / shares	17.73
Options exercisable (in dollars per share) | $ / shares	$ 11.32
WEIGHTED AVERAGE REMAINING CONTRACTUAL LIFE (YEARS)
Options outstanding, weighted average remaining contractual life (in years)	7 years 6 months 6 days
Options exercisable (in years)	6 years 8 months 17 days
AGGREGATE INTRINSIC VALUE
Options outstanding | $	$ 157,690
Options exercisable | $	$ 115,894

Stock-based Compensation - Rest

Stock-based Compensation - Restricted Stock and Restricted Stock Units Activity (Details) - Restricted stock	3 Months Ended
	Mar. 31, 2017$ / sharesshares
NUMBER OF SHARES
Beginning balance (in shares) | shares	164,194
Granted (in shares) | shares	229,493
Vested (in shares) | shares	(42,691)
Canceled (in shares) | shares	(2,336)
Ending balance (in shares) | shares	348,660
WEIGHTED AVERAGE FAIR VALUE PER SHARE
Beginning balance (in dollars per share) | $ / shares	$ 19.87
Granted (in dollars per share) | $ / shares	44.38
Vested (in dollars per share) | $ / shares	20.75
Canceled (in dollars per share) | $ / shares	43.90
Ending balance (in dollars per share) | $ / shares	$ 35.74