Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 02, 2018 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
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 | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding (in shares) | 39,496,520 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets | ||
Cash and cash equivalents | $ 249,501 | $ 197,569 |
Short-term investments | 84,476 | 52,086 |
Inventory | 1,062 | 0 |
Prepaid expenses and other current assets | 6,115 | 4,487 |
Total current assets | 341,154 | 254,142 |
Property, plant and equipment, net | 47,810 | 31,932 |
Other assets | 2,079 | 4,202 |
Total assets | 391,043 | 290,276 |
Current liabilities | ||
Accounts payable | 6,066 | 6,245 |
Accrued expenses and other current liabilities | 19,070 | 18,939 |
Total current liabilities | 25,136 | 25,184 |
Convertible notes, net | 123,922 | 123,845 |
Other non-current liabilities | 5,714 | 5,648 |
Total liabilities | 154,772 | 154,677 |
Commitments and contingencies (Note 10) | ||
Stockholders’ equity | ||
Preferred stock, $0.001 par value; 15,000,000 shares authorized as of March 31, 2018 and December 31, 2017; None issued and outstanding | 0 | 0 |
Common stock, $0.001 par value; 150,000,000 shares authorized as of March 31, 2018 and December 31, 2017; 39,503,110 and 36,947,637 shares issued and outstanding as of March 31, 2018 and December 31, 2017, respectively | 40 | 37 |
Additional paid-in capital | 740,952 | 597,318 |
Accumulated other comprehensive loss | (157) | (28) |
Accumulated deficit | (504,564) | (461,728) |
Total stockholders’ equity | 236,271 | 135,599 |
Total liabilities and stockholders’ equity | $ 391,043 | $ 290,276 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2018 | Dec. 31, 2017 |
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) | 39,503,110 | 36,947,637 |
Common stock, shares outstanding (in shares) | 39,503,110 | 36,947,637 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Operating expenses | ||
Selling, general and administrative | $ 27,823 | $ 14,475 |
Research and development | 12,972 | 10,954 |
Total operating expenses | 40,795 | 25,429 |
Loss from operations | (40,795) | (25,429) |
Other income (expense), net | 96 | (312) |
Net loss before income taxes | (40,699) | (25,741) |
Income tax expense | 0 | 46 |
Net loss | $ (40,699) | $ (25,787) |
Net loss per common share—basic and diluted (in dollars per share) | $ (1.05) | $ (0.76) |
Weighted average number of common shares outstanding—basic and diluted (in shares) | 38,598,827 | 33,777,395 |
Net loss | $ (40,699) | $ (25,787) |
Unrealized loss on available-for-sale investments | (129) | (37) |
Comprehensive loss | $ (40,828) | $ (25,824) |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash flows from operating activities | ||
Net loss | $ (40,699) | $ (25,787) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Depreciation | 487 | 291 |
Amortization of debt discounts | 77 | 76 |
Amortization and accretion of premium or discount on investments, net | (99) | 52 |
Stock-based compensation | 8,719 | 4,850 |
Unrealized foreign exchange loss | 150 | 0 |
Changes in operating assets and liabilities | ||
Inventory | (969) | 0 |
Prepaid, current and other assets | (1,628) | 1,427 |
Accounts payable, accrued expenses and other current liabilities | (6,873) | (5,763) |
Net cash used in operating activities | (40,835) | (24,854) |
Cash flows from investing activities | ||
Purchase of available-for-sale investments | (56,195) | (45,561) |
Proceeds from sales and maturities of investments | 23,775 | 12,860 |
Purchase of property, plant and equipment | (9,126) | (904) |
Net cash used in investing activities | (41,546) | (33,605) |
Cash flows from financing activities | ||
Proceeds from sale of common stock, net | 135,972 | 0 |
(Payments) proceeds related to issuance of stock for stock-based compensation arrangements, net | (1,420) | 48 |
Other | (239) | 0 |
Net cash provided by financing activities | 134,313 | 48 |
Net change in cash and cash equivalents | 51,932 | (58,411) |
Cash and cash equivalents, at beginning of period | 197,569 | 197,945 |
Cash and cash equivalents, at end of period | $ 249,501 | $ 139,534 |
The Company
The Company | 3 Months Ended |
Mar. 31, 2018 | |
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 an ophthalmic pharmaceutical company focused on the discovery, development and commercialization of first-in-class therapies for the treatment of patients with open-angle glaucoma and other diseases of the eye. The Company has its principal executive offices in Durham, North Carolina, and operates as one business segment. The Company has a U.S. Food and Drug Administration (“FDA”) approved product, Rhopressa ® (netarsudil ophthalmic solution) 0.02% (“Rhopressa ® ”), and an advanced-stage product candidate, Roclatan TM (netarsudil/latanoprost ophthalmic solution) 0.02% / 0.005% (“Roclatan TM ”), both designed to reduce elevated intraocular pressure (“IOP”) in patients with open-angle glaucoma or ocular hypertension. The Company intends to commercialize Rhopressa ® and Roclatan TM , if approved, on its own in North American markets. The Company’s strategy also includes pursuing regulatory approval for Rhopressa ® and Roclatan TM in Europe and Japan on its own. Rhopressa ® is a once-daily eye drop designed to reduce elevated IOP in patients with open-angle glaucoma or ocular hypertension that received FDA approval on December 18, 2017. The Company launched Rhopressa ® in the United States at the end of April 2018. The Company also intends to file a marketing authorization application with the European Medicines Agency for Rhopressa ® in the second half of 2018. Additionally, the Company completed a Phase 1 clinical trial and commenced a Phase 2 clinical trial in the United States, which are designed to meet the requirements of Japan’s Pharmaceuticals and Medical Devices Agency for potential regulatory submission of Rhopressa ® in Japan. These clinical trials include Japanese and Japanese-American subjects to support subsequent Phase 3 registration trials that are expected to be conducted in Japan. The Company’s advanced-stage product candidate, Roclatan TM , is a once-daily fixed-dose combination of Rhopressa ® and latanoprost for which the Company plans to submit a New Drug Application to the FDA in the second quarter of 2018. The Company is currently conducting a Phase 3 trial, named Mercury 3, in Europe comparing Roclatan TM to Ganfort ® , which if successful, is expected to improve its commercialization prospects in that region. Mercury 3 is not necessary for approval in the United States. On July 31, 2017, the Company entered into a collaborative research, development and licensing agreement with DSM, a global science-based company headquartered in the Netherlands. The research collaboration agreement includes an option to license DSM’s bio-erodible polymer implant technology for evaluating its application to the delivery of certain Aerie compounds to treat ophthalmic diseases. This technology uses polyesteramide polymers to produce an injectable, thin fiber that is minute in size. Preclinical experiments have demonstrated early success in conjunction with Aerie’s preclinical molecule, AR-13503, including demonstration of linear, sustained elution rates over several months and achievement of target retinal drug concentrations. On October 4, 2017, the Company entered into an Asset Purchase Agreement (the “Agreement”) with Envisia Therapeutics Inc. (“Envisia”) to acquire the rights to use PRINT ® technology in ophthalmology, as well as rights relating to Envisia’s preclinical dexamethasone steroid implant for the potential treatment of diabetic macular edema that utilizes the PRINT ® technology, referred to as AR-1105. The Company will also focus on using PRINT ® to manufacture injectable implants containing AR-13503, potentially in conjunction with the bio-erodible polymer from DSM. The Company had not yet commenced commercial operations as of March 31, 2018 and therefore had not generated product revenue. The Company launched Rhopressa ® in the United States in late April 2018. As a result, Aerie commenced generating product revenues related to sales of Rhopressa ® in the second quarter of 2018. The Company’s activities since inception have primarily consisted of developing product candidates, raising capital and performing research and development activities. 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 (Note 8) and issuance of convertible notes (Note 7). If the Company does not successfully commercialize Rhopressa ® , Roclatan TM or any future product candidates, it may be unable to generate product revenue or achieve profitability. Accordingly, the Company may be required to obtain further funding through public or private offerings, debt financings, 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 and manufacturing efforts. |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Basis of Presentation The Company’s interim condensed 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 condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes for the year ended December 31, 2017 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 1, 2018 (“2017 Form 10-K”). The results for the three months ended March 31, 2018 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 condensed 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. Cash Equivalents The Company’s cash and cash equivalents, which include short-term highly liquid investments with original maturities of three months or less, are held at several financial institutions and at times may exceed insured limits. The Company has placed these funds in high quality institutions in order to minimize risk relating to exceeding insured limits. Inventories Prior to the date the Company obtains regulatory approval for any of its product candidates, manufacturing costs related to commercial production for such product candidate are expensed as selling, general and administrative expense. Once regulatory approval is obtained, the Company capitalizes such costs as inventory. Rhopressa ® obtained FDA approval on December 18, 2017, but no inventory was produced from the FDA approval date through the end of 2017; therefore, no inventory was capitalized on the consolidated balance sheet as of December 31, 2017 . The Company capitalized inventory manufactured and received during the three months ended March 31, 2018. All inventory on the condensed consolidated balance sheet as of March 31, 2018 was classified as finished goods. Inventories are stated at the lower of cost or estimated realizable value. The Company determines the cost of inventory using the first-in, first-out (“FIFO”) method. Property, Plant and Equipment, Net Property, plant and equipment is recorded at historical cost. Depreciation is calculated using the straight-line method over the estimated useful lives of the related assets. Construction-in-progress reflects amounts incurred for property, plant or equipment construction or improvements that have not been yet placed in service, which primarily relates to the build-out of the Company’s manufacturing plant in Ireland (Note 5). Repairs and maintenance are expensed when incurred. Upon retirement or sale, the cost of the assets disposed of and the related accumulated depreciation are removed from the accounts, and any resulting gain or loss is included in the determination of net loss. Estimated useful lives by major asset category are as follows: Manufacturing equipment 10 years Laboratory equipment 7 years Furniture and fixtures 5 years Software and computer equipment 3 years Leasehold improvements Lower of estimated useful life or term of lease 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 commercial paper and corporate bonds that are classified as available-for-sale in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 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 condensed consolidated statements of operations and comprehensive loss and in accumulated other comprehensive loss on the condensed consolidated balance sheets. Realized gains and losses, interest earned on the Company’s cash, cash equivalents and investments, and amortization or accretion of discounts and premiums on investments are included as interest income within other income (expense), net. Interest income was $0.8 million and $0.3 million for the three months ended March 31, 2018 and 2017 , respectively. There were no realized gains or losses recognized for the three months ended March 31, 2018 or 2017 . Fair Value Measurements The Company records certain financial assets and liabilities at fair value in accordance with the provisions of ASC Topic 820, Fair Value Measurements and Disclosures . 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. There were no transfers between the different levels of the fair value hierarchy during the three months ended March 31, 2018 . Stock-Based Compensation The estimated fair value of options to purchase common stock 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 restricted stock awards (“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. Upon issuance and at each reporting period, the fair value of each stock appreciation rights (“SARs”) award is estimated using the Black-Scholes option pricing model and is marked to market through stock-based compensation expense. SARs are liability-based awards as they may only be settled in cash. Adoption of New Accounting Standards In March 2018, the FASB issued Accounting Standards Update (“ASU”) 2018-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 (“SAB 118”), which adds guidance to clarify the treatment of income taxes based on changes enacted on December 22, 2017 in H.R. 1 (commonly referred to as the “Tax Act”). ASU 2018-05 incorporates references in ASC Topic 740 to SAB 118, which was issued on December 22, 2017, to address the application of U.S. GAAP in situations when a registrant may not have the necessary information available in reasonable detail to complete the accounting for certain income tax effects. The guidance became effective immediately upon the enactment of the Tax Act in accordance with U.S. GAAP which requires deferred tax assets and liabilities to be revalued during the period in which new tax legislation is enacted. The Company’s final impact assessment on the consolidated financial statements will be completed as additional information becomes available, but no later than one year from the enactment of the Tax Act. In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting , which clarifies when changes to the terms or conditions of share-based payment awards must be accounted for as modifications. Under ASU 2017-09, an entity will not apply modification accounting to a share-based payment award if the award’s fair value, vesting conditions and classification as an equity or liability instrument are the same immediately before and after the change. ASU 2017-09 will be applied prospectively to awards modified on or after the adoption date. The guidance became effective for the Company beginning on January 1, 2018. The impact of the adoption of this guidance on its consolidated financial statements would be dependent on future modifications to share-based payment awards, if any. In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory , which eliminates the exception to the principle in ASC Topic 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. This ASU became effective for the Company on January 1, 2018, and was required to be applied on a modified retrospective basis through a cumulative-effect adjustment directly to accumulated deficit as of the beginning of the period of adoption. At December 31, 2017, the Company had $2.1 million of income tax effects deferred from past intercompany transactions that were recorded as prepaid assets within other assets, net, at December 31, 2017 that were adjusted through accumulated deficit as of January 1, 2018. In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities , 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 became effective for the Company beginning on January 1, 2018 and prescribes different transition methods for the various provisions. The adoption of ASU 2016-01 did not have a material impact on its consolidated financial statements and disclosures. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) . The standard states that an entity should recognize revenue based on the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The FASB has subsequently issued amendments to ASU 2014-09 that have the same effective date of January 1, 2018. Revenue from sales of Rhopressa ® following the commercial launch in April 2018, as well as any other future revenue arrangements, will be recognized under the provisions of ASC Topic 606. Recent Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , 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 ASU, 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 of the security. This ASU is effective for the Company beginning on January 1, 2020, with early adoption permitted beginning on January 1, 2019. The new guidance prescribes different transition methods for the various provisions. The Company does not expect the adoption of ASU 2016-13 to have a material impact on its consolidated financial statements and disclosures. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) , 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 the Company beginning on January 1, 2019, 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 ASU 2016-02 on its consolidated financial statements and disclosures. Net Loss per Common Share Basic net loss per common share (“Basic EPS”) is calculated by dividing the net loss 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 (“Diluted EPS”) gives effect to all dilutive potential shares of common stock outstanding during this period. For Diluted EPS, net loss 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 had an anti-dilutive effect. The potential common stock equivalents that have been excluded from the computation of Diluted EPS consist of the following: THREE MONTHS ENDED 2018 2017 2014 Convertible Notes 5,040,323 5,040,323 Outstanding stock options 7,125,947 5,708,215 Stock purchase warrants 157,500 157,500 Nonvested restricted stock awards 605,163 348,660 Total 12,928,933 11,254,698 |
Investments
Investments | 3 Months Ended |
Mar. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Investments Cash, cash equivalents and investments as of March 31, 2018 included the following: (in thousands) AMORTIZED COST GROSS UNREALIZED GAINS GROSS UNREALIZED LOSSES FAIR VALUE Cash and cash equivalents: Cash and money market funds $ 237,514 $ — $ — $ 237,514 Commercial paper 11,987 — — 11,987 Total cash and cash equivalents $ 249,501 $ — $ — $ 249,501 Investments: Commercial paper (due within 1 year) $ 44,209 $ — $ — $ 44,209 Corporate bonds (due within 1 year) 40,424 — (157 ) 40,267 Total investments $ 84,633 $ — $ (157 ) $ 84,476 Total cash, cash equivalents and investments $ 334,134 $ — $ (157 ) $ 333,977 Cash, cash equivalents and investments as of December 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 funds $ 197,569 $ — $ — $ 197,569 Total cash and cash equivalents $ 197,569 $ — $ — $ 197,569 Investments: Commercial paper (due within 1 year) $ 30,883 $ — $ — $ 30,883 Corporate bonds (due within 1 year) 21,231 — (28 ) 21,203 Total investments $ 52,114 $ — $ (28 ) $ 52,086 Total cash, cash equivalents and investments $ 249,683 $ — $ (28 ) $ 249,655 |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 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, 2018 (in thousands) Level 1 Level 2 Level 3 Total Cash and cash equivalents: Cash and money market funds $ 237,514 $ — $ — $ 237,514 Commercial paper — 11,987 — 11,987 Total cash and cash equivalents $ 237,514 $ 11,987 $ — $ 249,501 Investments: Commercial paper $ — $ 44,209 $ — $ 44,209 Corporate bonds — 40,267 — 40,267 Total investments $ — $ 84,476 $ — $ 84,476 Total cash, cash equivalents and investments $ 237,514 $ 96,463 $ — $ 333,977 FAIR VALUE MEASUREMENTS AS OF DECEMBER 31, 2017 (in thousands) Level 1 Level 2 Level 3 Total Cash and cash equivalents: Cash and money market funds $ 197,569 $ — $ — $ 197,569 Total cash and cash equivalents $ 197,569 $ — $ — $ 197,569 Investments: Commercial paper $ — $ 30,883 $ — $ 30,883 Corporate bonds — 21,203 — 21,203 Total investments $ — $ 52,086 $ — $ 52,086 Total cash, cash equivalents and investments $ 197,569 $ 52,086 $ — $ 249,655 Convertible Notes As of March 31, 2018 and December 31, 2017 , the estimated fair value of the $125.0 million aggregate principal amount of senior secured convertible notes (the “2014 Convertible Notes”) was $299.0 million and $327.6 million , respectively. The estimated fair value of the 2014 Convertible Notes require the use of Level 3 unobservable inputs and subjective assumptions. 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. |
Property, Plant and Equipment,
Property, Plant and Equipment, Net | 3 Months Ended |
Mar. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment, Net | Property, Plant and Equipment, Net Property, plant and equipment, net consists of the following: (in thousands) MARCH 31, 2018 DECEMBER 31, 2017 Manufacturing equipment $ 2,102 $ 2,082 Laboratory equipment 4,278 3,602 Furniture and fixtures 1,273 1,209 Software and computer equipment 2,168 1,932 Leasehold improvements 2,012 1,887 Construction-in-progress 39,499 24,228 51,332 34,940 Less: Accumulated depreciation (3,522 ) (3,008 ) Total property, plant and equipment, net $ 47,810 $ 31,932 Manufacturing Plant Build-Out In January 2017, the Company entered into a Euro-denominated 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. The Company is not the legal owner of the leased space. However, in accordance with ASC Topic 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 as a liability on its condensed consolidated balance sheets equal to the estimated replacement cost of the building at the inception of the lease. Additionally, equipment and construction costs incurred as part of the build-out are also capitalized within property, plant and equipment, net, as construction-in-progress. 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 $5.0 million as of March 31, 2018 , of which $0.3 million was classified as other current liabilities as of March 31, 2018 . The lease obligation is denominated in Euros and is remeasured to U.S. dollars at the balance sheet date with any foreign exchange gain or loss recognized within other income (expense), net on the condensed consolidated statements of operations and comprehensive loss. Unrealized foreign currency loss related to the remeasurement of the lease obligation was $0.1 million for the three months ended March 31, 2018 and was de minimis for the three months ended March 31, 2017 . |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 3 Months Ended |
Mar. 31, 2018 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Current Liabilities | Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consist of the following: (in thousands) MARCH 31, 2018 DECEMBER 31, 2017 Accrued compensation and benefits (1) $ 4,246 $ 7,886 Accrued consulting and professional fees 2,788 3,841 Accrued research and development expenses (2) 1,361 1,855 Accrued other (3) 10,675 5,357 Total accrued expenses and other current liabilities $ 19,070 $ 18,939 (1) The decrease in accrued compensation and benefits primarily relates to the payment of 2017 annual incentives during the three months ended March 31, 2018. (2) 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. (3) Comprised of accruals related to commercial manufacturing activities, interest payable and other business-related expenses. The increase at March 31, 2018 as compared to December 31, 2017 is due to a $5.8 million increase in accrued property, plant and equipment purchases as of March 31, 2018, primarily related to the Company’s manufacturing plant build-out in Ireland. |
Convertible Notes
Convertible Notes | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Convertible Notes | Convertible Notes In September 2014, Aerie issued $125.0 million aggregate principal amount of 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., collectively with their transferees, “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 TM , 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. Also, in connection with the assignment by Aerie of beneficial rights to its non-U.S. and non-Canadian intellectual property for Rhopressa ® and Roclatan TM to Aerie Limited (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. 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 with the current maximum increase to the initial conversion rate being 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, 2018 , 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 $2.1 million in debt discount and issuance costs incurred at the time of the transaction, which are being amortized to interest expense using the effective interest method through the maturity of the 2014 Convertible Notes. The table below summarizes the carrying value of the 2014 Convertible Notes as of March 31, 2018 and December 31, 2017 : (in thousands) MARCH 31, 2018 DECEMBER 31, 2017 Gross proceeds $ 125,000 $ 125,000 Unamortized debt discount and issuance costs (1,078 ) (1,155 ) Carrying value $ 123,922 $ 123,845 Interest expense related to the 2014 Convertible Notes, including amortization of debt discount and issuance costs, was $0.5 million and $0.6 million for the three months ended March 31, 2018 and 2017 , respectively. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity During the three months ended March 31, 2018 , Aerie issued and sold approximately 1.0 million shares of Aerie’s common stock and received net proceeds of approximately $62.3 million , after deducting $0.5 million of fees and expenses, under the “at-the-market” sales agreement (“ATM”) that commenced in December 2017. There are no remaining shares available for issuance under the ATM that commenced in December 2017. In addition, the Company entered into an underwriting agreement, dated January 23, 2018, related to the registered public offering of approximately 1.3 million shares of Aerie’s common stock and received net proceeds of approximately $74.1 million , after deducting $0.9 million of underwriting discounts, fees and expenses. The transactions were made pursuant to an automatic shelf registration on Form S-3, filed with the SEC on September 15, 2016, that permits the offering, issuance and sale of an unlimited number of shares of common stock from time to time by Aerie. Warrants As of March 31, 2018 , the following equity-classified warrants to purchase common stock were outstanding: NUMBER OF UNDERLYING SHARES EXERCISE PRICE PER SHARE WARRANT EXPIRATION DATE 75,000 $5.00 February 2019 75,000 $5.00 November 2019 7,500 $5.00 August 2020 223,482 $0.05 December 2019 The warrants outstanding as of March 31, 2018 are all currently exercisable. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation expense for options granted, RSAs, performance stock awards (“PSAs”), SARs and stock purchase rights is reflected in the condensed consolidated statements of operations and comprehensive loss as follows: THREE MONTHS ENDED (in thousands) 2018 2017 Selling, general and administrative $ 6,684 $ 3,786 Research and development 2,035 1,064 Total $ 8,719 $ 4,850 As of March 31, 2018 , the Company had $77.8 million of unrecognized compensation expense related to options granted under its equity plans. This expense is expected to be recognized over a weighted average period of 3.2 years as of March 31, 2018 . As of March 31, 2018 , the Company had $23.1 million of unrecognized compensation expense related to unvested RSAs, including PSAs. This expense is expected to be recognized over the weighted average period of 3.3 years as of March 31, 2018 . As of March 31, 2018 , the Company had $1.6 million of unrecognized compensation expense related to unvested SARs granted under its equity plans. This expense is expected to be recognized over the weighted average period of 3.9 years as of March 31, 2018 . 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. 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. Additionally, the Amended and Restated Equity Plan provides for the granting of SARs awards, which the Company began granting to employees during the three months ended March 31, 2018 . 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 and was subsequently amended during the year ended December 31, 2017 to increase the equity awards that may be issued by an additional 874,500 shares. 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, 2017 6,457,343 $ 22.15 Granted 793,236 55.47 Exercised (41,857 ) 19.61 Canceled (82,775 ) 46.18 Options outstanding at March 31, 2018 7,125,947 $ 25.57 7.2 $ 207,230 Options exercisable at March 31, 2018 4,427,796 $ 14.58 6.1 $ 175,649 The following table summarizes the RSAs, including PSAs, activity under the Plans: NUMBER OF SHARES WEIGHTED AVERAGE FAIR VALUE PER SHARE Nonvested RSAs at December 31, 2017 447,049 $ 41.08 Granted 242,201 55.45 Vested (83,571 ) 32.13 Canceled (516 ) 56.25 Nonvested RSAs at March 31, 2018 605,163 $ 48.05 The vesting of the RSAs is time and service based with terms of one to four years. During the year ended December 31, 2017 , the Company granted 98,817 RSAs with non-market performance conditions that vest upon the satisfaction of certain performance conditions and service conditions. During the three months ended March 31, 2018 , the Company granted 53,000 SARs awards at a weighted average exercise price of $55.15 and had a weighted average remaining contractual life of 4.9 years . All of these awards were outstanding at March 31, 2018 . Holders of these SARs are entitled under the terms of the Plans to receive cash payments calculated based on the excess of the Company’s common stock price over the target price in their award; consequently, these awards are accounted for as liability-classified awards and the Company measures compensation cost based on their estimated fair value at each reporting date, net of actual forfeitures, if any. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
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. Except as previously disclosed for matters which have now concluded, 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. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On April 30, 2018, the Company announced the commercial launch of Rhopressa ® in the United States. The Company hired a commercial team that includes approximately 100 sales representatives to target approximately 14,000 high prescribing eye care professionals throughout the United States. Rhopressa ® is now in national and regional U.S. pharmaceutical distributors, and patients have access to Rhopressa ® through pharmacies across the United States. As a result, Aerie commenced generating product revenues related to sales of Rhopressa ® in the second quarter of 2018. Rhopressa ® is a once-daily eye drop designed to reduce elevated IOP in patients with open-angle glaucoma or ocular hypertension that received FDA approval on December 18, 2017. |
Significant Accounting Polici17
Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The Company’s interim condensed 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 condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes for the year ended December 31, 2017 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 1, 2018 (“2017 Form 10-K”). The results for the three months ended March 31, 2018 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 condensed 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. |
Cash Equivalents | Cash Equivalents The Company’s cash and cash equivalents, which include short-term highly liquid investments with original maturities of three months or less, are held at several financial institutions and at times may exceed insured limits. The Company has placed these funds in high quality institutions in order to minimize risk relating to exceeding insured limits. |
Inventories | Inventories Prior to the date the Company obtains regulatory approval for any of its product candidates, manufacturing costs related to commercial production for such product candidate are expensed as selling, general and administrative expense. Once regulatory approval is obtained, the Company capitalizes such costs as inventory. Rhopressa ® obtained FDA approval on December 18, 2017, but no inventory was produced from the FDA approval date through the end of 2017; therefore, no inventory was capitalized on the consolidated balance sheet as of December 31, 2017 . The Company capitalized inventory manufactured and received during the three months ended March 31, 2018. All inventory on the condensed consolidated balance sheet as of March 31, 2018 was classified as finished goods. Inventories are stated at the lower of cost or estimated realizable value. The Company determines the cost of inventory using the first-in, first-out (“FIFO”) method. |
Property, Plant and Equipment, Net | Property, Plant and Equipment, Net Property, plant and equipment is recorded at historical cost. Depreciation is calculated using the straight-line method over the estimated useful lives of the related assets. Construction-in-progress reflects amounts incurred for property, plant or equipment construction or improvements that have not been yet placed in service, which primarily relates to the build-out of the Company’s manufacturing plant in Ireland (Note 5). Repairs and maintenance are expensed when incurred. Upon retirement or sale, the cost of the assets disposed of and the related accumulated depreciation are removed from the accounts, and any resulting gain or loss is included in the determination of net loss. |
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 commercial paper and corporate bonds that are classified as available-for-sale in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 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 condensed consolidated statements of operations and comprehensive loss and in accumulated other comprehensive loss on the condensed consolidated balance sheets. Realized gains and losses, interest earned on the Company’s cash, cash equivalents and investments, and amortization or accretion of discounts and premiums on investments are included as interest income within other income (expense), net. Interest income was $0.8 million and $0.3 million for the three months ended March 31, 2018 and 2017 , respectively. There were no realized gains or losses recognized for the three months ended March 31, 2018 or 2017 . |
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, Fair Value Measurements and Disclosures . 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. |
Stock-Based Compensation | Stock-Based Compensation The estimated fair value of options to purchase common stock 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 restricted stock awards (“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. Upon issuance and at each reporting period, the fair value of each stock appreciation rights (“SARs”) award is estimated using the Black-Scholes option pricing model and is marked to market through stock-based compensation expense. SARs are liability-based awards as they may only be settled in cash. |
Adoption of New Accounting Standards and Recent Accounting Pronouncements | Adoption of New Accounting Standards In March 2018, the FASB issued Accounting Standards Update (“ASU”) 2018-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 (“SAB 118”), which adds guidance to clarify the treatment of income taxes based on changes enacted on December 22, 2017 in H.R. 1 (commonly referred to as the “Tax Act”). ASU 2018-05 incorporates references in ASC Topic 740 to SAB 118, which was issued on December 22, 2017, to address the application of U.S. GAAP in situations when a registrant may not have the necessary information available in reasonable detail to complete the accounting for certain income tax effects. The guidance became effective immediately upon the enactment of the Tax Act in accordance with U.S. GAAP which requires deferred tax assets and liabilities to be revalued during the period in which new tax legislation is enacted. The Company’s final impact assessment on the consolidated financial statements will be completed as additional information becomes available, but no later than one year from the enactment of the Tax Act. In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting , which clarifies when changes to the terms or conditions of share-based payment awards must be accounted for as modifications. Under ASU 2017-09, an entity will not apply modification accounting to a share-based payment award if the award’s fair value, vesting conditions and classification as an equity or liability instrument are the same immediately before and after the change. ASU 2017-09 will be applied prospectively to awards modified on or after the adoption date. The guidance became effective for the Company beginning on January 1, 2018. The impact of the adoption of this guidance on its consolidated financial statements would be dependent on future modifications to share-based payment awards, if any. In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory , which eliminates the exception to the principle in ASC Topic 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. This ASU became effective for the Company on January 1, 2018, and was required to be applied on a modified retrospective basis through a cumulative-effect adjustment directly to accumulated deficit as of the beginning of the period of adoption. At December 31, 2017, the Company had $2.1 million of income tax effects deferred from past intercompany transactions that were recorded as prepaid assets within other assets, net, at December 31, 2017 that were adjusted through accumulated deficit as of January 1, 2018. In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities , 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 became effective for the Company beginning on January 1, 2018 and prescribes different transition methods for the various provisions. The adoption of ASU 2016-01 did not have a material impact on its consolidated financial statements and disclosures. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) . The standard states that an entity should recognize revenue based on the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The FASB has subsequently issued amendments to ASU 2014-09 that have the same effective date of January 1, 2018. Revenue from sales of Rhopressa ® following the commercial launch in April 2018, as well as any other future revenue arrangements, will be recognized under the provisions of ASC Topic 606. Recent Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , 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 ASU, 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 of the security. This ASU is effective for the Company beginning on January 1, 2020, with early adoption permitted beginning on January 1, 2019. The new guidance prescribes different transition methods for the various provisions. The Company does not expect the adoption of ASU 2016-13 to have a material impact on its consolidated financial statements and disclosures. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) , 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 the Company beginning on January 1, 2019, 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 ASU 2016-02 on its consolidated financial statements and disclosures. |
Net Loss per Common Share | Net Loss per Common Share Basic net loss per common share (“Basic EPS”) is calculated by dividing the net loss 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 (“Diluted EPS”) gives effect to all dilutive potential shares of common stock outstanding during this period. For Diluted EPS, net loss 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 had an anti-dilutive effect. |
Significant Accounting Polici18
Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Estimated Useful Lives | Estimated useful lives by major asset category are as follows: Manufacturing equipment 10 years Laboratory equipment 7 years Furniture and fixtures 5 years Software and computer equipment 3 years Leasehold improvements Lower of estimated useful life or term of lease Property, plant and equipment, net consists of the following: (in thousands) MARCH 31, 2018 DECEMBER 31, 2017 Manufacturing equipment $ 2,102 $ 2,082 Laboratory equipment 4,278 3,602 Furniture and fixtures 1,273 1,209 Software and computer equipment 2,168 1,932 Leasehold improvements 2,012 1,887 Construction-in-progress 39,499 24,228 51,332 34,940 Less: Accumulated depreciation (3,522 ) (3,008 ) Total property, plant and equipment, net $ 47,810 $ 31,932 |
Schedule of Computation of Diluted EPS | The potential common stock equivalents that have been excluded from the computation of Diluted EPS consist of the following: THREE MONTHS ENDED 2018 2017 2014 Convertible Notes 5,040,323 5,040,323 Outstanding stock options 7,125,947 5,708,215 Stock purchase warrants 157,500 157,500 Nonvested restricted stock awards 605,163 348,660 Total 12,928,933 11,254,698 |
Investments (Tables)
Investments (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of Cash, Cash Equivalents and Investments | Cash, cash equivalents and investments as of March 31, 2018 included the following: (in thousands) AMORTIZED COST GROSS UNREALIZED GAINS GROSS UNREALIZED LOSSES FAIR VALUE Cash and cash equivalents: Cash and money market funds $ 237,514 $ — $ — $ 237,514 Commercial paper 11,987 — — 11,987 Total cash and cash equivalents $ 249,501 $ — $ — $ 249,501 Investments: Commercial paper (due within 1 year) $ 44,209 $ — $ — $ 44,209 Corporate bonds (due within 1 year) 40,424 — (157 ) 40,267 Total investments $ 84,633 $ — $ (157 ) $ 84,476 Total cash, cash equivalents and investments $ 334,134 $ — $ (157 ) $ 333,977 Cash, cash equivalents and investments as of December 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 funds $ 197,569 $ — $ — $ 197,569 Total cash and cash equivalents $ 197,569 $ — $ — $ 197,569 Investments: Commercial paper (due within 1 year) $ 30,883 $ — $ — $ 30,883 Corporate bonds (due within 1 year) 21,231 — (28 ) 21,203 Total investments $ 52,114 $ — $ (28 ) $ 52,086 Total cash, cash equivalents and investments $ 249,683 $ — $ (28 ) $ 249,655 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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, 2018 (in thousands) Level 1 Level 2 Level 3 Total Cash and cash equivalents: Cash and money market funds $ 237,514 $ — $ — $ 237,514 Commercial paper — 11,987 — 11,987 Total cash and cash equivalents $ 237,514 $ 11,987 $ — $ 249,501 Investments: Commercial paper $ — $ 44,209 $ — $ 44,209 Corporate bonds — 40,267 — 40,267 Total investments $ — $ 84,476 $ — $ 84,476 Total cash, cash equivalents and investments $ 237,514 $ 96,463 $ — $ 333,977 FAIR VALUE MEASUREMENTS AS OF DECEMBER 31, 2017 (in thousands) Level 1 Level 2 Level 3 Total Cash and cash equivalents: Cash and money market funds $ 197,569 $ — $ — $ 197,569 Total cash and cash equivalents $ 197,569 $ — $ — $ 197,569 Investments: Commercial paper $ — $ 30,883 $ — $ 30,883 Corporate bonds — 21,203 — 21,203 Total investments $ — $ 52,086 $ — $ 52,086 Total cash, cash equivalents and investments $ 197,569 $ 52,086 $ — $ 249,655 |
Property, Plant and Equipment21
Property, Plant and Equipment, Net (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | Estimated useful lives by major asset category are as follows: Manufacturing equipment 10 years Laboratory equipment 7 years Furniture and fixtures 5 years Software and computer equipment 3 years Leasehold improvements Lower of estimated useful life or term of lease Property, plant and equipment, net consists of the following: (in thousands) MARCH 31, 2018 DECEMBER 31, 2017 Manufacturing equipment $ 2,102 $ 2,082 Laboratory equipment 4,278 3,602 Furniture and fixtures 1,273 1,209 Software and computer equipment 2,168 1,932 Leasehold improvements 2,012 1,887 Construction-in-progress 39,499 24,228 51,332 34,940 Less: Accumulated depreciation (3,522 ) (3,008 ) Total property, plant and equipment, net $ 47,810 $ 31,932 |
Accrued Expenses and Other Cu22
Accrued Expenses and Other Current Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Payables and Accruals [Abstract] | |
Summary of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consist of the following: (in thousands) MARCH 31, 2018 DECEMBER 31, 2017 Accrued compensation and benefits (1) $ 4,246 $ 7,886 Accrued consulting and professional fees 2,788 3,841 Accrued research and development expenses (2) 1,361 1,855 Accrued other (3) 10,675 5,357 Total accrued expenses and other current liabilities $ 19,070 $ 18,939 (1) The decrease in accrued compensation and benefits primarily relates to the payment of 2017 annual incentives during the three months ended March 31, 2018. (2) 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. (3) Comprised of accruals related to commercial manufacturing activities, interest payable and other business-related expenses. The increase at March 31, 2018 as compared to December 31, 2017 is due to a $5.8 million increase in accrued property, plant and equipment purchases as of March 31, 2018, primarily related to the Company’s manufacturing plant build-out in Ireland. |
Convertible Notes (Tables)
Convertible Notes (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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, 2018 and December 31, 2017 : (in thousands) MARCH 31, 2018 DECEMBER 31, 2017 Gross proceeds $ 125,000 $ 125,000 Unamortized debt discount and issuance costs (1,078 ) (1,155 ) Carrying value $ 123,922 $ 123,845 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Schedule of Equity Classified Warrants Outstanding | As of March 31, 2018 , the following equity-classified warrants to purchase common stock were outstanding: NUMBER OF UNDERLYING SHARES EXERCISE PRICE PER SHARE WARRANT EXPIRATION DATE 75,000 $5.00 February 2019 75,000 $5.00 November 2019 7,500 $5.00 August 2020 223,482 $0.05 December 2019 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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, RSAs, performance stock awards (“PSAs”), SARs and stock purchase rights is reflected in the condensed consolidated statements of operations and comprehensive loss as follows: THREE MONTHS ENDED (in thousands) 2018 2017 Selling, general and administrative $ 6,684 $ 3,786 Research and development 2,035 1,064 Total $ 8,719 $ 4,850 |
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, 2017 6,457,343 $ 22.15 Granted 793,236 55.47 Exercised (41,857 ) 19.61 Canceled (82,775 ) 46.18 Options outstanding at March 31, 2018 7,125,947 $ 25.57 7.2 $ 207,230 Options exercisable at March 31, 2018 4,427,796 $ 14.58 6.1 $ 175,649 |
Restricted Stock and Restricted Stock Units Activity | The following table summarizes the RSAs, including PSAs, activity under the Plans: NUMBER OF SHARES WEIGHTED AVERAGE FAIR VALUE PER SHARE Nonvested RSAs at December 31, 2017 447,049 $ 41.08 Granted 242,201 55.45 Vested (83,571 ) 32.13 Canceled (516 ) 56.25 Nonvested RSAs at March 31, 2018 605,163 $ 48.05 |
The Company - Additional Inform
The Company - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2018Segment | |
Organization, Consolidation and Presentation of Financial Statements [Line Items] | |
Number of operating segments | 1 |
Rhopressa | |
Organization, Consolidation and Presentation of Financial Statements [Line Items] | |
Percentage of dosage designed to lower intraocular pressure | 0.02% |
Latanoprost | |
Organization, Consolidation and Presentation of Financial Statements [Line Items] | |
Percentage of dosage designed to lower intraocular pressure | 0.005% |
Significant Accounting Polici27
Significant Accounting Policies - Additional Information (Detail) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Interest income | $ 809,559 | $ 296,007 | |
Gross realized gain (loss) | 0 | 0 | |
Long-term debt, fair value | 299,000,000 | $ 327,600,000 | |
Income tax effects deferred from past intercompany transactions | $ 0 | $ 46,000 | |
Warrants exercise price (in dollars per share) | $ 0.05 | ||
Long-term Receivable | Accounting Standards Update 2016-16, Income Tax Effect Deferred From Past Intercompany Transactions [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Income tax effects deferred from past intercompany transactions | $ 2,100,000 |
Significant Accounting Polici28
Significant Accounting Policies - Schedule of Estimated Useful Lives (Details) | 3 Months Ended |
Mar. 31, 2018 | |
Manufacturing equipment | |
Property, Plant and Equipment [Line Items] | |
Useful lives | 10 years |
Laboratory equipment | |
Property, Plant and Equipment [Line Items] | |
Useful lives | 7 years |
Furniture and fixtures | |
Property, Plant and Equipment [Line Items] | |
Useful lives | 5 years |
Software and computer equipment | |
Property, Plant and Equipment [Line Items] | |
Useful lives | 3 years |
Significant Accounting Polici29
Significant Accounting Policies - Schedule of Computation of Diluted EPS (Detail) - shares | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
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) | 12,928,933 | 11,254,698 |
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) | 7,125,947 | 5,708,215 |
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 |
Nonvested restricted 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) | 605,163 | 348,660 |
2014 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 |
Investments - Summary of Cash,
Investments - Summary of Cash, Cash Equivalents and Investments (Detail) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 |
Cash and cash equivalents: | ||||
AMORTIZED COST | $ 249,501 | $ 197,569 | $ 139,534 | $ 197,945 |
FAIR VALUE | 249,501 | 197,569 | ||
Investments: | ||||
AMORTIZED COST | 334,134 | 249,683 | ||
GROSS UNREALIZED GAINS | 0 | 0 | ||
GROSS UNREALIZED LOSSES | (157) | (28) | ||
FAIR VALUE | 333,977 | 249,655 | ||
Cash and money market funds | ||||
Cash and cash equivalents: | ||||
AMORTIZED COST | 237,514 | 197,569 | ||
FAIR VALUE | 237,514 | 197,569 | ||
Commercial paper | ||||
Cash and cash equivalents: | ||||
AMORTIZED COST | 11,987 | |||
FAIR VALUE | 11,987 | |||
Total investments | ||||
Investments: | ||||
AMORTIZED COST | 84,633 | 52,114 | ||
GROSS UNREALIZED GAINS | 0 | 0 | ||
GROSS UNREALIZED LOSSES | (157) | (28) | ||
FAIR VALUE | 84,476 | 52,086 | ||
Commercial paper | ||||
Investments: | ||||
AMORTIZED COST | 44,209 | 30,883 | ||
GROSS UNREALIZED GAINS | 0 | 0 | ||
GROSS UNREALIZED LOSSES | 0 | 0 | ||
FAIR VALUE | 44,209 | 30,883 | ||
Corporate bonds (due within 1 year) | ||||
Investments: | ||||
AMORTIZED COST | 40,424 | 21,231 | ||
GROSS UNREALIZED GAINS | 0 | 0 | ||
GROSS UNREALIZED LOSSES | (157) | (28) | ||
FAIR VALUE | $ 40,267 | $ 21,203 |
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, 2018 | Dec. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total cash and cash equivalents | $ 249,501 | $ 197,569 |
Total investments | 84,476 | 52,086 |
Total cash, cash equivalents and investments | 333,977 | 249,655 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total cash and cash equivalents | 237,514 | 197,569 |
Total investments | 0 | 0 |
Total cash, cash equivalents and investments | 237,514 | 197,569 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total cash and cash equivalents | 11,987 | 0 |
Total investments | 84,476 | 52,086 |
Total cash, cash equivalents and investments | 96,463 | 52,086 |
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 | 44,209 | 30,883 |
Commercial paper | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 44,209 | 30,883 |
Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 40,267 | 21,203 |
Corporate bonds | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 40,267 | 21,203 |
Cash and money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total cash and cash equivalents | 237,514 | 197,569 |
Cash and money market funds | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total cash and cash equivalents | 237,514 | $ 197,569 |
Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total cash and cash equivalents | 11,987 | |
Commercial paper | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total cash and cash equivalents | $ 11,987 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2014 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Aggregate amount of senior notes issued | $ 125,000,000 | $ 125,000,000 | |
Long-term debt, fair value | $ 299,000,000 | 327,600,000 | |
2014 Notes | 2014 Convertible Notes | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Aggregate amount of senior notes issued | $ 125,000,000 | $ 125,000,000 |
Property, Plant and Equipment33
Property, Plant and Equipment, Net - Schedule of Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 51,332 | $ 34,940 |
Less: Accumulated depreciation | (3,522) | (3,008) |
Total property, plant and equipment, net | 47,810 | 31,932 |
Manufacturing equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 2,102 | 2,082 |
Laboratory equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 4,278 | 3,602 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 1,273 | 1,209 |
Software and computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 2,168 | 1,932 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 2,012 | 1,887 |
Construction-in-progress | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 39,499 | $ 24,228 |
Property, Plant and Equipment34
Property, Plant and Equipment, Net - Narrative (Details) $ in Millions | 1 Months Ended | 3 Months Ended |
Jan. 31, 2017USD ($)ft² | Mar. 31, 2018USD ($) | |
Property, Plant and Equipment [Line Items] | ||
Area of interior floor space (in sqft) | ft² | 30,000 | |
Build-to-suit facility lease obligation | $ 5 | |
Foreign exchange loss | 0.1 | |
Property, Plant and Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Capitalized amount of build-to-suit asset | $ 4.2 | |
Other Current Liabilities | ||
Property, Plant and Equipment [Line Items] | ||
Build-to-suit facility lease obligation | $ 0.3 |
Accrued Expenses and Other Cu35
Accrued Expenses and Other Current Liabilities - Summary of Accrued Expense and Other Current Liabilities (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Accrued expenses and other liabilities: | ||
Accrued compensation and benefits | $ 4,246 | $ 7,886 |
Accrued consulting and professional fees | 2,788 | 3,841 |
Accrued research and development | 1,361 | 1,855 |
Accrued other | 10,675 | 5,357 |
Total accrued expenses and other current liabilities | 19,070 | $ 18,939 |
Accrued property, plant and equipment purchases | $ 5,800 |
Convertible Notes - Additional
Convertible Notes - Additional Information (Detail) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2018USD ($)$ / sharesshares | Mar. 31, 2017USD ($) | Sep. 30, 2014USD ($)d$ / shares | Dec. 31, 2017USD ($) | |
Debt Instrument [Line Items] | ||||
Aggregate amount of senior notes issued | $ 125,000,000 | $ 125,000,000 | ||
Debt instrument, anniversary term | 7 years | |||
Unamortized discount, gross | $ (1,078,000) | (1,155,000) | ||
Convertible notes | ||||
Debt Instrument [Line Items] | ||||
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 | d | 30 | |||
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 | |||
Default provisions, qualifying percentage of ownership (more than) | 50.00% | |||
Interest expense related to convertible notes | $ 500,000 | $ 600,000 | ||
2014 Notes | Convertible notes | ||||
Debt Instrument [Line Items] | ||||
Aggregate amount of senior notes issued | $ 125,000,000 | $ 125,000,000 | ||
Percentage of voting rights pledged as collateraltion, percentage of voting interests acquired | 65.00% | |||
Unamortized discount, gross | $ (2,100,000) |
Convertible Notes - Summary of
Convertible Notes - Summary of Carrying Value of Convertible Notes (Detail) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Debt Disclosure [Abstract] | ||
Gross proceeds | $ 125,000,000 | $ 125,000,000 |
Unamortized debt discount and issuance costs | (1,078,000) | (1,155,000) |
Carrying value | $ 123,922,000 | $ 123,845,000 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) - USD ($) $ in Thousands, shares in Millions | Jan. 23, 2018 | Mar. 31, 2018 | Mar. 31, 2017 |
Class of Stock [Line Items] | |||
Proceeds from sale of common stock, net | $ 135,972 | $ 0 | |
Common stock | |||
Class of Stock [Line Items] | |||
Common stock issued and sold under sales agreement (in shares) | 1 | ||
Proceeds from sale of common stock, net | $ 62,300 | ||
Underwriting discounts, fees and expenses | $ 900 | $ 500 | |
Stock issued during period (in shares) | 1.3 | ||
Proceeds from issuance of common stock, net of underwriting discounts, fees and expenses | $ 74,100 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Equity Classified Warrants Outstanding (Detail) | Mar. 31, 2018$ / 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-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, 2018 | Mar. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 8,719 | $ 4,850 |
Selling, general and administrative | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | 6,684 | 3,786 |
Research and development | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | 2,035 | $ 1,064 |
Restricted stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized compensation expense, other than options | 23,100 | |
Stock Appreciation Rights (SARs) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Liability-based awards unrecognized compensation expense | $ 1,600 | |
Liability-based awards unrecognized compensation expense (in years) | 3 years 11 months 9 days |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) $ / shares in Units, $ in Thousands | Apr. 10, 2015shares | Oct. 30, 2013shares | Mar. 31, 2018USD ($)plan$ / sharesshares | Dec. 31, 2017shares | Dec. 07, 2016shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Additional awards granted (in shares) | 793,236 | ||||
Weighted-average exercise price (in dollars per share) | $ / shares | $ 19.61 | ||||
Options outstanding, weighted average remaining contractual life (in years) | 7 years 2 months 5 days | ||||
Aggregate intrinsic value | $ | $ 207,230 | ||||
Options exercisable, Weighted average remaining contractual life | 6 years 1 month 4 days | ||||
2005 Aerie Pharmaceutical Stock Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of equity compensation plans | plan | 3 | ||||
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) | 874,500 | 418,000 | |||
Employee Stock Option [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unrecognized compensation expense not yet recognized, options | $ | $ 77,800 | ||||
Options, weighted average remaining recognition period (in years) | 3 years 2 months 1 day | ||||
Restricted stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unrecognized compensation expense, other than options | $ | $ 23,100 | ||||
Other than options, weighted average remaining recognition period (in years) | 3 years 3 months 28 days | ||||
Granted (in shares) | 242,201 | ||||
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 | ||||
Restricted Stock With Non-Market Performance Conditions | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted (in shares) | 98,817 | ||||
Stock Appreciation Rights (SARs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted (in shares) | 53,000 | ||||
Weighted-average exercise price (in dollars per share) | $ / shares | $ 55.15 | ||||
Options exercisable, Weighted average remaining contractual life | 4 years 11 months 11 days |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Stock Options Activity (Detail) $ / shares in Units, $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($)$ / sharesshares | |
NUMBER OF SHARES | |
Beginning balance (in shares) | shares | 6,457,343 |
Granted (in shares) | shares | 793,236 |
Exercised (in shares) | shares | (41,857) |
Canceled (in shares) | shares | (82,775) |
Ending balance (in shares) | shares | 7,125,947 |
Options exercisable (in shares) | shares | 4,427,796 |
WEIGHTED AVERAGE EXERCISE PRICE | |
Beginning balance (in dollars per share) | $ / shares | $ 22.15 |
Granted (in dollars per share) | $ / shares | 55.47 |
Exercised (in dollars per share) | $ / shares | 19.61 |
Cancelled (in dollars per share) | $ / shares | 46.18 |
Ending balance (in dollars per share) | $ / shares | 25.57 |
Options exercisable (in dollars per share) | $ / shares | $ 14.58 |
WEIGHTED AVERAGE REMAINING CONTRACTUAL LIFE (YEARS) | |
Options outstanding, weighted average remaining contractual life (in years) | 7 years 2 months 5 days |
Options exercisable (in years) | 6 years 1 month 4 days |
AGGREGATE INTRINSIC VALUE | |
Options outstanding | $ | $ 207,230 |
Options exercisable | $ | $ 175,649 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock and Restricted Stock Units Activity (Details) - Restricted stock | 3 Months Ended |
Mar. 31, 2018$ / sharesshares | |
NUMBER OF SHARES | |
Beginning balance (in shares) | shares | 447,049 |
Granted (in shares) | shares | 242,201 |
Vested (in shares) | shares | (83,571) |
Canceled (in shares) | shares | (516) |
Ending balance (in shares) | shares | 605,163 |
WEIGHTED AVERAGE FAIR VALUE PER SHARE | |
Beginning balance (in dollars per share) | $ / shares | $ 41.08 |
Granted (in dollars per share) | $ / shares | 55.45 |
Vested (in dollars per share) | $ / shares | 32.13 |
Canceled (in dollars per share) | $ / shares | 56.25 |
Ending balance (in dollars per share) | $ / shares | $ 48.05 |
Subsequent Events - Narrative (
Subsequent Events - Narrative (Details) - Subsequent Event professional in Thousands | Apr. 30, 2018representativeprofessional |
Subsequent Event [Line Items] | |
Number of sales representatives | representative | 100 |
Number of prescribing eye-care professionals | professional | 14 |