Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | Apr. 30, 2016 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | VNDA | |
Entity Registrant Name | Vanda Pharmaceuticals Inc. | |
Entity Central Index Key | 1,347,178 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 43,153,007 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 38,740 | $ 50,843 |
Marketable securities | 99,590 | 92,337 |
Accounts receivable, net | 16,679 | 16,331 |
Inventory | 938 | 1,294 |
Prepaid expenses and other current assets | 6,502 | 5,742 |
Total current assets | 162,449 | 166,547 |
Property and equipment, net | 4,351 | 4,570 |
Intangible assets, net | 35,809 | 38,752 |
Non-current inventory and other | 4,131 | 3,181 |
Total assets | 206,740 | 213,050 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 22,664 | 15,767 |
Accrued government and other rebates | 32,376 | 35,550 |
Total current liabilities | 55,040 | 51,317 |
Milestone obligation under license agreement | 25,000 | 25,000 |
Other non-current liabilities | 3,688 | 3,706 |
Total liabilities | $ 83,728 | $ 80,023 |
Commitments and contingencies (Notes 10 and 11) | ||
Stockholders' equity: | ||
Preferred stock, $0.001 par value; 20,000,000 shares authorized, and no shares issued or outstanding | ||
Common stock, $0.001 par value; 150,000,000 shares authorized; 43,109,206 and 42,815,291 shares issued and outstanding at March 31, 2016 and December 31, 2015, respectively | $ 43 | $ 43 |
Additional paid-in capital | 463,084 | 460,794 |
Accumulated other comprehensive income | 92 | 39 |
Accumulated deficit | (340,207) | (327,849) |
Total stockholders' equity | 123,012 | 133,027 |
Total liabilities and stockholders' equity | $ 206,740 | $ 213,050 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2016 | Dec. 31, 2015 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 43,109,206 | 42,815,291 |
Common stock, shares outstanding | 43,109,206 | 42,815,291 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Revenues: | ||
Net product sales | $ 33,262 | $ 22,150 |
Total revenues | 33,262 | 22,150 |
Operating expenses: | ||
Cost of goods sold | 5,956 | 5,015 |
Research and development | 7,548 | 4,478 |
Selling, general and administrative | 29,290 | 18,806 |
Intangible asset amortization | 2,943 | 4,144 |
Total operating expenses | 45,737 | 32,443 |
Loss from operations | (12,475) | (10,293) |
Other income | 117 | 72 |
Net loss | $ (12,358) | $ (10,221) |
Basic and diluted net loss per share | $ (0.29) | $ (0.24) |
Weighted average shares outstanding, basic and diluted | 43,104,462 | 41,744,948 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Net loss | $ (12,358) | $ (10,221) |
Other comprehensive income: | ||
Change in net unrealized gain on marketable securities | 53 | 11 |
Tax provision on other comprehensive income | 0 | 0 |
Other comprehensive income , net of tax | 53 | 11 |
Comprehensive loss | $ (12,305) | $ (10,210) |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - 3 months ended Mar. 31, 2016 - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Other Comprehensive Income | Accumulated Deficit |
Beginning balance (in shares) at Dec. 31, 2015 | 42,815,291 | 42,815,291 | |||
Beginning balance at Dec. 31, 2015 | $ 133,027 | $ 43 | $ 460,794 | $ 39 | $ (327,849) |
Issuance of common stock from the exercise of stock options and settlement of restricted stock units | 24 | 24 | |||
Issuance of common stock form the exercise of stock options and settlement of restricted stock awards | 293,915 | ||||
Stock-based compensation expense | 2,266 | 2,266 | |||
Net loss | (12,358) | (12,358) | |||
Other comprehensive income, net of tax | $ 53 | 53 | |||
Ending balance (in shares) at Mar. 31, 2016 | 43,109,206 | 43,109,206 | |||
Ending balance at Mar. 31, 2016 | $ 123,012 | $ 43 | $ 463,084 | $ 92 | $ (340,207) |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Cash flows from operating activities | ||
Net loss | $ (12,358) | $ (10,221) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation of property and equipment | 219 | 140 |
Stock-based compensation | 2,266 | 1,945 |
Amortization of discounts and premiums on marketable securities | 28 | 197 |
Intangible asset amortization | 2,943 | 4,144 |
Other non-cash adjustments | 239 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (348) | (16,466) |
Prepaid expenses and other assets | (1,484) | 581 |
Inventory | 130 | (45) |
Accounts payable and accrued liabilities | 6,879 | 10,853 |
Accrued government and other rebates | (3,174) | 14,188 |
Net cash provided by (used in) operating activities | (4,899) | 5,555 |
Cash flows from investing activities | ||
Purchases of property and equipment | (783) | |
Purchases of marketable securities | (47,311) | (59,890) |
Maturities of marketable securities | 40,083 | 27,105 |
Net cash used in investing activities | (7,228) | (33,568) |
Cash flows from financing activities | ||
Obligations paid in connection with settlement of equity awards | (282) | |
Proceeds from exercise of employee stock options | 24 | 203 |
Net cash provided by (used in) financing activities | 24 | (79) |
Net decrease in cash and cash equivalents | (12,103) | (28,092) |
Cash and cash equivalents | ||
Beginning of period | 50,843 | 60,901 |
End of period | $ 38,740 | $ 32,809 |
Business Organization and Prese
Business Organization and Presentation | 3 Months Ended |
Mar. 31, 2016 | |
Business Organization and Presentation | 1. Business Organization and Presentation Business Organization Vanda Pharmaceuticals Inc. (the Company) is a specialty pharmaceutical company focused on the development and commercialization of novel therapies to address high unmet medical needs and improve the lives of patients. The Company commenced its operations in 2003 and operates in one reporting segment The Company’s portfolio includes the following products: • HETLIOZ ® ® ® • Fanapt ® ® ® • Tradipitant (VLY-686), a small molecule neurokinin-1 receptor (NK-1R) antagonist, which is presently in clinical development for the treatment of chronic pruritus in atopic dermatitis. • Trichostatin A, a small molecule histone deacetylase (HDAC) inhibitor. • AQW051, a Phase II alpha-7 nicotinic acetylcholine receptor partial agonist. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the Company’s consolidated financial statements for the fiscal year ended December 31, 2015 included in the Company’s annual report on Form 10-K. The financial information as of March 31, 2016 and for the three months ended March 31, 2016 and 2015 is unaudited, but in the opinion of management, all adjustments, consisting only of normal recurring accruals, considered necessary for a fair statement of the results for these interim periods have been included. The condensed consolidated balance sheet data as of December 31, 2015 was derived from audited financial statements but does not include all disclosures required by GAAP. The results of the Company’s operations for any interim period are not necessarily indicative of the results that may be expected for any other interim period or for a full fiscal year. The financial information included herein should be read in conjunction with the consolidated financial statements and notes in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2015. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2016 | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates that affect the reported amounts of assets and liabilities at the date of the financial statements, disclosure of contingent assets and liabilities, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Inventory Inventory, which is recorded at the lower of cost or market, includes the cost of third-party manufacturing and other direct and indirect costs and is valued using the first-in, first-out method. The Company capitalizes inventory costs associated with its products upon regulatory approval when, based on management’s judgment, future commercialization is considered probable and the future economic benefit is expected to be realized; otherwise, such costs are expensed as research and development. Inventory is evaluated for impairment by consideration of factors such as lower of cost or market, net realizable value, obsolescence or expiry. Inventory not expected to be consumed within 12 months following the balance sheet date are classified as non-current. Revenue from Net Product Sales The Company’s revenues consist of net product sales of HETLIOZ ® ® Three Months Ended (in thousands) March 31, March 31, Revenues: HETLIOZ ® $ 16,201 $ 7,460 Fanapt ® 17,061 14,690 Total revenues $ 33,262 $ 22,150 The Company applies the revenue recognition guidance in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Subtopic 605-15, Revenue Recognition—Products Major Customers HETLIOZ ® ® Product Sales Discounts and Allowances The Company’s product sales are recorded net of applicable discounts, rebates, chargebacks, service fees, co-pay assistance and product returns that are applicable for various government and commercial payors. Reserves established for discounts and returns are classified as reductions of accounts receivable if the amount is payable to direct customers, with the exception of service fees. Service fees are classified as a liability. Reserves established for rebates, chargebacks or co-pay assistance are classified as a liability if the amount is payable to a party other than customers. The Company currently records sales allowances for the following: Prompt-pay: Rebates: Chargebacks: Medicare Part D Coverage Gap: Service Fees: Co-payment Assistance: Product Returns: Stock-Based Compensation Compensation costs for all stock-based awards to employees and directors are measured based on the grant date fair value of those awards and recognized over the period during which the employee or director is required to perform service in exchange for the award. The Company recognizes the expense over the award’s vesting period. The fair value of stock options granted and restricted stock units (RSUs) awarded are amortized using the straight-line method. As stock-based compensation expense recognized in the consolidated statements of operations is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures. Forfeitures are required to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates The fair value of each option award is estimated on the date of grant using the Black-Scholes-Merton option pricing model that uses the assumptions noted in the following table. Expected volatility rates are based on the historical volatility of the Company’s publicly traded common stock and other factors. The risk-free interest rates are based on the U.S. Treasury yield for a period consistent with the expected term of the option in effect at the time of the grant. The Company has not paid dividends to its stockholders since its inception (other than a dividend of preferred share purchase rights, which was declared in September 2008) and does not plan to pay dividends in the foreseeable future. Assumptions used in the Black-Scholes-Merton option pricing model for employee and director stock options granted during the three months ended March 31, 2016 and 2015 were as follows: Three Months Ended March 31, March 31, Expected dividend yield 0 % 0 % Weighted average expected volatility 57 % 61 % Weighted average expected term (years) 6.08 5.97 Weighted average risk-free rate 1.38 % 1.59 % Weighted average fair value per share $ 4.27 $ 6.14 Stock-based compensation expense recognized for the three months ended March 31, 2016 and 2015 was comprised of the following: Three Months Ended (in thousands) March 31, March 31, Research and development $ 524 $ 624 Selling, general and administrative 1,742 1,321 $ 2,266 $ 1,945 Advertising Expense The Company expenses the costs of advertising, including branded promotional expenses, as incurred. Branded advertising expenses, recorded in selling, general and administrative expenses, were $0.6 million and $1.0 million for the three months ended March 31, 2016 and 2015, respectively. Non-Cash Investing and Financing Activities For the three months ended March 31, 2015, the Company recorded an intangible asset of $25.0 million relating to HETLIOZ ® ® Recent accounting pronouncements In March 2016, the FASB issued Accounting Standards Update (ASU) 2016-09, Improvements to Employee Share-Based Payment Accounting, In February 2016, the FASB issued ASU 2016-02, Leases In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory, In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements – Going Concern In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers Revenue from Contracts with Customers Revenue from Contracts with Customers, Principal versus Agent Considerations (Reporting Revenue versus Net) Revenue from Contracts with Customers, identifying Performance Obligations and Licensing |
Earnings per Share
Earnings per Share | 3 Months Ended |
Mar. 31, 2016 | |
Earnings per Share | 3. Earnings per Share Basic earnings per share (EPS) is calculated by dividing the net loss by the weighted average number of shares of common stock outstanding. Diluted EPS is computed by dividing the net loss by the weighted average number of shares of common stock outstanding, plus potential outstanding common stock for the period. Potential outstanding common stock includes stock options and shares underlying RSUs, but only to the extent that their inclusion is dilutive. The following table presents the calculation of basic and diluted net loss per share of common stock for the three months ended March 31, 2016 and 2015: Three Months Ended (in thousands, except for share and per share amounts) March 31, March 31, Numerator: Net loss $ (12,358 ) $ (10,221 ) Denominator: Weighted average shares outstanding, basic and diluted 43,104,462 41,744,948 Net loss per share, basic and diluted: $ (0.29 ) $ (0.24 ) Antidilutive securities excluded from calculations of diluted net loss per share 6,245,280 5,656,662 The Company incurred net losses for the three months ended March 31, 2016 and 2015 causing inclusion of any potentially dilutive securities to have an anti-dilutive effect, resulting in dilutive loss per share and basic loss per share attributable to common stockholders being equivalent. |
Marketable Securities
Marketable Securities | 3 Months Ended |
Mar. 31, 2016 | |
Marketable Securities | 4. Marketable Securities The following is a summary of the Company’s available-for-sale marketable securities as of March 31, 2016, which all have contract maturities of less than one year: March 31, 2016 (in thousands) Amortized Gross Gross Fair U.S. Treasury and government agencies $ 54,166 $ 26 $ (1 ) $ 54,191 Corporate debt 45,332 68 (1 ) 45,399 $ 99,498 $ 94 $ (2 ) $ 99,590 The following is a summary of the Company’s available-for-sale marketable securities as of December 31, 2015: December 31, 2015 (in thousands) Amortized Gross Gross Fair U.S. Treasury and government agencies $ 44,059 $ 6 $ (8 ) $ 44,057 Corporate debt 48,239 46 (5 ) 48,280 $ 92,298 $ 52 $ (13 ) $ 92,337 |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Measurements | 5. Fair Value Measurements Authoritative guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: • Level 1 — defined as observable inputs such as quoted prices in active markets • Level 2 — defined as inputs other than quoted prices in active markets that are either directly or indirectly observable • Level 3 — defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions Marketable securities classified in Level 1 and Level 2 as of March 31, 2016 and December 31, 2015 consist of available-for-sale marketable securities. The valuation of Level 1 instruments is determined using a market approach, and is based upon unadjusted quoted prices for identical assets in active markets. The valuation of investments classified in Level 2 also is determined using a market approach based upon quoted prices for similar assets in active markets, or other inputs that are observable for substantially the full term of the financial instrument. Level 2 securities include certificates of deposit, commercial paper and corporate notes that use as their basis readily observable market parameters. The Company did not transfer any assets between Level 2 and Level 1 during the three months ended March 31, 2016 and 2015. As of March 31, 2016, the Company held certain assets that are required to be measured at fair value on a recurring basis, as follows: Fair Value Measurement as of March 31, 2016 Using (in thousands) March 31, Quoted Prices in Significant Other Significant (Level 3) Available-for-sale securities: U.S. Treasury and government agencies $ 54,191 $ 54,191 $ — $ — Corporate debt 45,399 — 45,399 $ 99,590 $ 54,191 $ 45,399 $ — As of December 31, 2015, the Company held certain assets that are required to be measured at fair value on a recurring basis, as follows: Fair Value Measurement as of December 31, 2015 Using (in thousands) December 31, Quoted Prices in Significant Other Significant (Level 3) Available-for-sale securities: U.S. Treasury and government agencies $ 44,057 $ 44,057 $ — $ — Corporate debt 48,280 — 48,280 $ 92,337 $ 44,057 $ 48,280 $ — The Company also has financial assets and liabilities, not required to be measured at fair value on a recurring basis, which primarily consist of cash and cash equivalents, accounts receivable, restricted cash, accounts payable and accrued liabilities, and milestone obligations under license agreements, the carrying value of which materially approximate their fair values. |
Inventory
Inventory | 3 Months Ended |
Mar. 31, 2016 | |
Inventory | 6. Inventory The Company evaluates expiry risk by evaluating current and future product demand relative to product shelf life. The Company builds demand forecasts by considering factors such as, but not limited to, overall market potential, market share, market acceptance and patient usage. Inventory levels are evaluated for the amount of inventory that would be sold within one year. At certain times, the level of inventory can exceed the forecasted level of cost of goods sold for the next twelve months. The Company classifies the estimate of such inventory as non-current. Inventory consisted of the following as of March 31, 2016 and December 31, 2015: (in thousands) March 31, December 31, Current assets Finished goods $ 938 $ 1,294 $ 938 $ 1,294 Non-Current assets Raw materials $ 127 $ 127 Work-in-process 2,249 2,369 Finished goods 346 — $ 2,722 $ 2,496 |
Accounts Payable and Accrued Li
Accounts Payable and Accrued Liabilities | 3 Months Ended |
Mar. 31, 2016 | |
Accounts Payable and Accrued Liabilities | 7. Accounts Payable and Accrued Liabilities The following is a summary of the Company’s accounts payable and accrued liabilities as of March 31, 2016 and December 31, 2015: (in thousands) March 31, December 31, Research and development expenses $ 3,890 $ 3,199 Consulting and other professional fees 10,540 5,088 Compensation and employee benefits 1,465 468 Royalties payable 5,533 5,328 Other 1,236 1,684 $ 22,664 $ 15,767 |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 31, 2016 | |
Intangible Assets | 8. Intangible Assets The following is a summary of the Company’s intangible assets as of March 31, 2016: March 31, 2016 (in thousands) Estimated Useful Life Gross Accumulated Net HETLIOZ ® January 2033 $ 33,000 $ 3,891 $ 29,109 Fanapt ® November 2016 27,941 21,241 6,700 $ 60,941 $ 25,132 $ 35,809 The following is a summary of the Company’s intangible assets as of December 31, 2015: December 31, 2015 (in thousands) Estimated Useful Life (Years) Gross Accumulated Net HETLIOZ ® January 2033 $ 33,000 $ 3,460 $ 29,540 Fanapt ® November 2016 27,941 18,729 9,212 $ 60,941 $ 22,189 $ 38,752 In January 2014, the Company announced that the FDA had approved the NDA for HETLIOZ ® ® ® ® ® ® ® ® ® In 2009, the Company announced that the FDA had approved the NDA for Fanapt ® ® ® ® ® Business Combinations ® The intangible assets are being amortized over their estimated useful economic life using the straight-line method. Amortization expense was $2.9 million and $4.1 million for the three months ended March 31, 2016 and 2015, respectively. The following is a summary of the future intangible asset amortization schedule as of March 31, 2016: (in thousands) Total Remainder 2017 2018 2019 2020 Thereafter HETLIOZ ® $ 29,109 $ 1,290 $ 1,721 $ 1,721 $ 1,721 $ 1,721 $ 20,935 Fanapt ® 6,700 6,700 — — — — — $ 35,809 $ 7,990 $ 1,721 $ 1,721 $ 1,721 $ 1,721 $ 20,935 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2016 | |
Income Taxes | 9. Income Taxes Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The fact that the Company has historically generated net operating losses (NOLs) serves as strong evidence that it is more likely than not that deferred tax assets will not be realized in the future. Therefore, the Company has a full valuation allowance against all deferred tax assets as of March 31, 2016 and December 31, 2015. As a result of the tax valuation allowance against deferred tax assets, there was no provision for income taxes for the three months ended March 31, 2016 and 2015. Certain tax attributes of the Company, including NOLs and credits, are subject to limitation as a result of any ownership change as defined under Internal Revenue Code of 1986, as amended (IRC), Section 382. A change in ownership could affect the Company’s ability to use NOLs and credit carryforward (tax attributes). Ownership changes did occur as of December 31, 2014 and December 31, 2008. However, the Company believes that it had sufficient Built-In-Gain to offset the IRC Section 382 limitation generated by the ownership changes. Any future ownership changes may cause the Company’s existing tax attributes to have additional limitations. Additionally, the Company maintains a valuation allowance on its tax attributes and therefore, any IRC Section 382 limitation would not have a material impact on the Company’s provision for income taxes as of March 31, 2016. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2016 | |
Commitments and Contingencies | 10. Commitments and Contingencies Operating leases The following is a summary of the minimum annual future payments under operating leases as of March 31, 2016: Cash payments due by year (in thousands) Total Remainder 2017 2018 2019 2020 Thereafter Operating leases $ 12,944 $ 1,129 $ 1,538 $ 1,576 $ 1,616 $ 1,656 $ 5,429 The minimum annual future payments for operating leases consists of the lease for office space for the Company’s headquarters located in Washington, D.C., which expires in 2023. In 2011, the Company entered into an office lease, which was subsequently amended in 2014, with Square 54 Office Owner LLC (Landlord) for its headquarters, consisting of a total of 30,260 square feet of office space at 2200 Pennsylvania Avenue, N.W. in Washington, D.C. (Lease). Subject to the prior rights of other tenants in the building, the Company has the right to renew the Lease for five years following its expiration. The Company has the right to sublease or assign all or a portion of the premises, subject to standard conditions. The Lease may be terminated early by the Company or the Landlord upon certain conditions. Rent expense under operating leases was $0.5 million and $0.4 million for the three months ended March 31, 2016 and 2015, respectively. Guarantees and Indemnifications The Company has entered into a number of standard intellectual property indemnification agreements in the ordinary course of its business. Pursuant to these agreements, the Company indemnifies, holds harmless, and agrees to reimburse the indemnified party for losses suffered or incurred by the indemnified party, generally the Company’s business partners or customers, in connection with any U.S. patent or any copyright or other intellectual property infringement claim by any third party with respect to the Company’s products. The term of these indemnification agreements is generally perpetual from the date of execution of the agreement. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited. Since inception, the Company has not incurred costs to defend lawsuits or settle claims related to these indemnification agreements. The Company also indemnifies its officers and directors for certain events or occurrences, subject to certain conditions. License Agreements The Company’s rights to develop and commercialize its products are subject to the terms and conditions of licenses granted to the Company by other pharmaceutical companies. HETLIOZ ® . ® ® ® ® ® ® ® ® ® ® ® ® The license agreement was amended in April 2013 to add a process that would allow BMS to waive the right to develop and commercialize HETLIOZ ® ® Either party may terminate the HETLIOZ ® Fanapt ® . ® A predecessor company of Sanofi, Hoechst Marion Roussel, Inc. (HMRI) discovered Fanapt ® ® ® ® ® ® ® ® ® ® Pursuant to the terms of a settlement agreement with Novartis, Novartis transferred all U.S. and Canadian rights in the Fanapt ® ® ® ® The Company has entered into distribution agreements with Probiomed S.A. de C.V. for the commercialization of Fanapt ® ® Tradipitant. Pursuant to the license agreement, the Company paid Lilly an initial license fee of $1.0 million and will be responsible for all development costs. The initial license fee was recognized as research and development expense in the consolidated statement of operations for the year ended December 31, 2012. Lilly is also eligible to receive additional payments based upon achievement of specified development and commercialization milestones as well as tiered-royalties on net sales at percentage rates up to the low double digits. These milestones include $4.0 million for pre-NDA approval milestones and up to $95.0 million for future regulatory approval and sales milestones. The Company is obligated to use its commercially reasonable efforts to develop and commercialize tradipitant. Either party may terminate the license agreement under certain circumstances, including a material breach of the license agreement by the other. In the event that the Company terminates the license agreement, or if Lilly terminates due to the Company’s breach or for certain other reasons set forth in the license agreement, all rights licensed and developed by the Company under the license agreement will revert or otherwise be licensed back to Lilly on an exclusive basis, subject to payment by Lilly to the Company of a royalty on net sales of products that contain tradipitant. AQW051. ® Pursuant to the license agreement, the Company is obligated to use its commercially reasonable efforts to develop and commercialize AQW051 and is responsible for all development costs under the AQW051 license agreement. The Company has no milestone obligations; however, Novartis is eligible to receive tiered-royalties on net sales at percentage rates up to the mid-teens. Research and Development and Marketing Agreements In the course of its business, the Company regularly enters into agreements with clinical organizations to provide services relating to clinical development and clinical manufacturing activities under fee service arrangements. The Company’s current agreements for clinical services may be terminated on generally 60 days’ notice without incurring additional charges, other than charges for work completed but not paid for through the effective date of termination and other costs incurred by the Company’s contractors in closing out work in progress as of the effective date of termination. |
Legal Matters
Legal Matters | 3 Months Ended |
Mar. 31, 2016 | |
Legal Matters | 11. Legal Matters In June 2014, the Company filed suit against Roxane Laboratories, Inc. (Roxane) in the U.S. District Court for the District of Delaware (the Delaware District Court). The suit seeks an adjudication that Roxane has infringed one or more claims of the Company’s U.S. Patent No. 8,586,610 (the ‘610 Patent) by submitting to the FDA an Abbreviated New Drug Application (ANDA) for a generic version of Fanapt ® ® In 2015, the Company filed six separate patent infringement lawsuits in the Delaware District Court against Roxane, Inventia Healthcare Pvt. Ltd., Lupin Ltd. and Lupin Pharmaceuticals, Inc. (Lupin), Taro Pharmaceuticals USA, Inc. and Taro Pharmaceutical Industries, Ltd., and Apotex Inc. and Apotex Corp., (collectively, the Defendants). The lawsuits each seek an adjudication that the respective Defendants infringed one or more claims of the ‘610 Patent and/or the Company’s U.S. Patent No. 9,138,432 (the ‘432 Patent) by submitting to the FDA and ANDA for a generic version of Fanapt ® Approved Drug Products with Therapeutic Equivalence Evaluations ® On February 26, 2016, Roxane filed suit against the Company in the U.S. District Court for the Southern District of Ohio. The suit seeks a declaratory judgment of invalidity and noninfringement of the Method of Treatment Patents. The Company has not sued Roxane for infringing the Method of Treatment Patents. The Company filed a motion to dismiss this lawsuit for lack of personal jurisdiction or, in the alternative, to transfer the lawsuit to the Delaware District Court. The Company intends to vigorously defend the Method of Treatment Patents. On February 26, 2016, Roxane filed a Petition for Inter Partes |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2016 | |
Stock-Based Compensation | 12. Stock-Based Compensation As of March 31, 2016, the Company had one equity incentive plan, the 2006 Equity Incentive Plan (the 2006 Plan) that was adopted in April 2006. On January 1 of each year, the number of shares reserved under the 2006 Plan is automatically increased by the lesser of 4% of the total number of shares of common stock that are outstanding at that time or 1,500,000 shares (or such lesser number as may be approved by the Company’s board of directors). As of January 1, 2016, the number of shares of common stock that may be issued under the 2006 Plan was automatically increased by 1,500,000 shares, increasing the number of shares of common stock available for issuance under the Plan to 13,329,472 shares. As of March 31, 2016, there were 8,056,668 shares that were subject to outstanding options and RSUs and 2,157,668 shares remained available for future grant. The 2006 Plan expired by its terms on April 12, 2016. Outstanding options and RSUs under the 2006 Plan will remain in effect and the terms of the 2006 Plan will continue to apply, but no additional awards will be made under the 2006 Plan. The Company has granted option awards with service conditions (service option awards) that are subject to terms and conditions established by the compensation committee of the board of directors. Service option awards have 10-year contractual terms and all service option awards granted prior to December 31, 2006, service option awards granted to new employees, and certain service option awards granted to existing employees vest and become exercisable on the first anniversary of the grant date with respect to the 25% of the shares subject to service option awards. The remaining 75% of the shares subject to the service option awards vest and become exercisable monthly in equal installments thereafter over three years. Certain service option awards granted to existing employees after December 31, 2006 vest and become exercisable monthly in equal installments over four years. The initial service option awards granted to directors upon their election vest and become exercisable in equal monthly installments over a period of four years, while the subsequent annual service option awards granted to directors vest and become exercisable in equal monthly installments over a period of one year. Certain service option awards to executives and directors provide for accelerated vesting if there is a change in control of the Company. Certain service option awards to employees and executives provide for accelerated vesting if the respective employee’s or executive’s service is terminated by the Company for any reason other than cause or permanent disability. As of March 31, 2016, $13.4 million of unrecognized compensation costs related to unvested service option awards are expected to be recognized over a weighted average period of 1.5 years. No option awards are classified as a liability as of March 31, 2016. A summary of option activity for the three months ended March 31, 2016 follows: Stock Options (in thousands, except for share and per share amounts) Number of Weighted Average Weighted Average Aggregate Outstanding at December 31, 2015 6,252,448 $ 11.87 6.16 $ 7,498 Granted 749,511 7.94 Forfeited (172,735 ) 11.16 Expired — — Exercised (6,249 ) 3.82 24 Outstanding at March 31, 2016 6,822,975 11.46 6.28 5,872 Exercisable at March 31, 2016 4,439,627 12.02 4.85 5,074 Vested and expected to vest at March 31, 2016 6,586,275 11.52 6.17 5,818 Proceeds from the exercise of stock options amounted to less than $0.1 million for the three months ended March 31, 2016 and $0.2 million for the three months ended March 31, 2015. An RSU is a stock award that entitles the holder to receive shares of the Company’s common stock as the award vests. The fair value of each RSU is based on the closing price of the Company’s stock on the date of grant. The Company has granted RSUs with service conditions (service RSUs) that vest in four equal annual installments provided that the employee remains employed with the Company. As of March 31, 2016, $11.4 million of unrecognized compensation costs related to unvested service RSUs are expected to be recognized over a weighted average period of 2.0 years. No service RSUs are classified as a liability as of March 31, 2016. A summary of RSU activity for the 2006 Plan for the three months ended March 31, 2016 follows: RSUs Number of Weighted Unvested at December 31, 2015 1,022,681 $ 10.90 Granted 569,242 7.96 Forfeited (70,564 ) 11.03 Vested (287,666 ) 9.65 Unvested at March 31, 2016 1,233,693 9.83 The grant date fair value for the 287,666 shares underlying RSUs that vested during the three months ended March 31, 2016 was $2.8 million. |
Summary of Significant Accoun20
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Business organization | Business Organization Vanda Pharmaceuticals Inc. (the Company) is a specialty pharmaceutical company focused on the development and commercialization of novel therapies to address high unmet medical needs and improve the lives of patients. The Company commenced its operations in 2003 and operates in one reporting segment The Company’s portfolio includes the following products: • HETLIOZ ® ® ® • Fanapt ® ® ® • Tradipitant (VLY-686), a small molecule neurokinin-1 receptor (NK-1R) antagonist, which is presently in clinical development for the treatment of chronic pruritus in atopic dermatitis. • Trichostatin A, a small molecule histone deacetylase (HDAC) inhibitor. • AQW051, a Phase II alpha-7 nicotinic acetylcholine receptor partial agonist. |
Basis of presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the Company’s consolidated financial statements for the fiscal year ended December 31, 2015 included in the Company’s annual report on Form 10-K. The financial information as of March 31, 2016 and for the three months ended March 31, 2016 and 2015 is unaudited, but in the opinion of management, all adjustments, consisting only of normal recurring accruals, considered necessary for a fair statement of the results for these interim periods have been included. The condensed consolidated balance sheet data as of December 31, 2015 was derived from audited financial statements but does not include all disclosures required by GAAP. The results of the Company’s operations for any interim period are not necessarily indicative of the results that may be expected for any other interim period or for a full fiscal year. The financial information included herein should be read in conjunction with the consolidated financial statements and notes in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2015. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates that affect the reported amounts of assets and liabilities at the date of the financial statements, disclosure of contingent assets and liabilities, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. |
Inventory | Inventory Inventory, which is recorded at the lower of cost or market, includes the cost of third-party manufacturing and other direct and indirect costs and is valued using the first-in, first-out method. The Company capitalizes inventory costs associated with its products upon regulatory approval when, based on management’s judgment, future commercialization is considered probable and the future economic benefit is expected to be realized; otherwise, such costs are expensed as research and development. Inventory is evaluated for impairment by consideration of factors such as lower of cost or market, net realizable value, obsolescence or expiry. Inventory not expected to be consumed within 12 months following the balance sheet date are classified as non-current. |
Net Product Sales | Revenue from Net Product Sales The Company’s revenues consist of net product sales of HETLIOZ ® ® Three Months Ended (in thousands) March 31, March 31, Revenues: HETLIOZ ® $ 16,201 $ 7,460 Fanapt ® 17,061 14,690 Total revenues $ 33,262 $ 22,150 The Company applies the revenue recognition guidance in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Subtopic 605-15, Revenue Recognition—Products Product Sales Discounts and Allowances The Company’s product sales are recorded net of applicable discounts, rebates, chargebacks, service fees, co-pay assistance and product returns that are applicable for various government and commercial payors. Reserves established for discounts and returns are classified as reductions of accounts receivable if the amount is payable to direct customers, with the exception of service fees. Service fees are classified as a liability. Reserves established for rebates, chargebacks or co-pay assistance are classified as a liability if the amount is payable to a party other than customers. The Company currently records sales allowances for the following: Prompt-pay: Rebates: Chargebacks: Medicare Part D Coverage Gap: Service Fees: Co-payment Assistance: Product Returns: |
Major Customers | Major Customers HETLIOZ ® ® |
Stock-Based Compensation | Stock-Based Compensation Compensation costs for all stock-based awards to employees and directors are measured based on the grant date fair value of those awards and recognized over the period during which the employee or director is required to perform service in exchange for the award. The Company recognizes the expense over the award’s vesting period. The fair value of stock options granted and restricted stock units (RSUs) awarded are amortized using the straight-line method. As stock-based compensation expense recognized in the consolidated statements of operations is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures. Forfeitures are required to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates The fair value of each option award is estimated on the date of grant using the Black-Scholes-Merton option pricing model that uses the assumptions noted in the following table. Expected volatility rates are based on the historical volatility of the Company’s publicly traded common stock and other factors. The risk-free interest rates are based on the U.S. Treasury yield for a period consistent with the expected term of the option in effect at the time of the grant. The Company has not paid dividends to its stockholders since its inception (other than a dividend of preferred share purchase rights, which was declared in September 2008) and does not plan to pay dividends in the foreseeable future. Assumptions used in the Black-Scholes-Merton option pricing model for employee and director stock options granted during the three months ended March 31, 2016 and 2015 were as follows: Three Months Ended March 31, March 31, Expected dividend yield 0 % 0 % Weighted average expected volatility 57 % 61 % Weighted average expected term (years) 6.08 5.97 Weighted average risk-free rate 1.38 % 1.59 % Weighted average fair value per share $ 4.27 $ 6.14 Stock-based compensation expense recognized for the three months ended March 31, 2016 and 2015 was comprised of the following: Three Months Ended (in thousands) March 31, March 31, Research and development $ 524 $ 624 Selling, general and administrative 1,742 1,321 $ 2,266 $ 1,945 |
Advertising Expense | Advertising Expense The Company expenses the costs of advertising, including branded promotional expenses, as incurred. Branded advertising expenses, recorded in selling, general and administrative expenses, were $0.6 million and $1.0 million for the three months ended March 31, 2016 and 2015, respectively. |
Non-Cash Investing and Financing Activities | Non-Cash Investing and Financing Activities For the three months ended March 31, 2015, the Company recorded an intangible asset of $25.0 million relating to HETLIOZ ® ® |
Recent accounting pronouncements | Recent accounting pronouncements In March 2016, the FASB issued Accounting Standards Update (ASU) 2016-09, Improvements to Employee Share-Based Payment Accounting, In February 2016, the FASB issued ASU 2016-02, Leases In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory, In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements – Going Concern In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers Revenue from Contracts with Customers Revenue from Contracts with Customers, Principal versus Agent Considerations (Reporting Revenue versus Net) Revenue from Contracts with Customers, identifying Performance Obligations and Licensing |
Summary of Significant Accoun21
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Revenue From Net Sales by Product | The Company’s revenues consist of net product sales of HETLIOZ ® ® Three Months Ended (in thousands) March 31, March 31, Revenues: HETLIOZ ® $ 16,201 $ 7,460 Fanapt ® 17,061 14,690 Total revenues $ 33,262 $ 22,150 |
Black-Scholes-Merton Option Pricing Model for Employee and Director Stock Options Granted | Assumptions used in the Black-Scholes-Merton option pricing model for employee and director stock options granted during the three months ended March 31, 2016 and 2015 were as follows: Three Months Ended March 31, March 31, Expected dividend yield 0 % 0 % Weighted average expected volatility 57 % 61 % Weighted average expected term (years) 6.08 5.97 Weighted average risk-free rate 1.38 % 1.59 % Weighted average fair value per share $ 4.27 $ 6.14 |
Stock-Based Compensation Expense | Stock-based compensation expense recognized for the three months ended March 31, 2016 and 2015 was comprised of the following: Three Months Ended (in thousands) March 31, March 31, Research and development $ 524 $ 624 Selling, general and administrative 1,742 1,321 $ 2,266 $ 1,945 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Basic and Diluted Net Loss Per Share of Common Stock | The following table presents the calculation of basic and diluted net loss per share of common stock for the three months ended March 31, 2016 and 2015: Three Months Ended (in thousands, except for share and per share amounts) March 31, March 31, Numerator: Net loss $ (12,358 ) $ (10,221 ) Denominator: Weighted average shares outstanding, basic and diluted 43,104,462 41,744,948 Net loss per share, basic and diluted: $ (0.29 ) $ (0.24 ) Antidilutive securities excluded from calculations of diluted net loss per share 6,245,280 5,656,662 |
Marketable Securities (Tables)
Marketable Securities (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Summary of Available-for-Sale Marketable Securities | The following is a summary of the Company’s available-for-sale marketable securities as of March 31, 2016, which all have contract maturities of less than one year: March 31, 2016 (in thousands) Amortized Gross Gross Fair U.S. Treasury and government agencies $ 54,166 $ 26 $ (1 ) $ 54,191 Corporate debt 45,332 68 (1 ) 45,399 $ 99,498 $ 94 $ (2 ) $ 99,590 The following is a summary of the Company’s available-for-sale marketable securities as of December 31, 2015: December 31, 2015 (in thousands) Amortized Gross Gross Fair U.S. Treasury and government agencies $ 44,059 $ 6 $ (8 ) $ 44,057 Corporate debt 48,239 46 (5 ) 48,280 $ 92,298 $ 52 $ (13 ) $ 92,337 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Assets Measured at Fair Value on Recurring Basis | As of March 31, 2016, the Company held certain assets that are required to be measured at fair value on a recurring basis, as follows: Fair Value Measurement as of March 31, 2016 Using (in thousands) March 31, Quoted Prices in Significant Other Significant (Level 3) Available-for-sale securities: U.S. Treasury and government agencies $ 54,191 $ 54,191 $ — $ — Corporate debt 45,399 — 45,399 $ 99,590 $ 54,191 $ 45,399 $ — As of December 31, 2015, the Company held certain assets that are required to be measured at fair value on a recurring basis, as follows: Fair Value Measurement as of December 31, 2015 Using (in thousands) December 31, Quoted Prices in Significant Other Significant (Level 3) Available-for-sale securities: U.S. Treasury and government agencies $ 44,057 $ 44,057 $ — $ — Corporate debt 48,280 — 48,280 $ 92,337 $ 44,057 $ 48,280 $ — |
Inventory (Tables)
Inventory (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Inventory | Inventory consisted of the following as of March 31, 2016 and December 31, 2015: (in thousands) March 31, December 31, Current assets Finished goods $ 938 $ 1,294 $ 938 $ 1,294 Non-Current assets Raw materials $ 127 $ 127 Work-in-process 2,249 2,369 Finished goods 346 — $ 2,722 $ 2,496 |
Accounts Payable and Accrued 26
Accounts Payable and Accrued Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Summary of Accounts Payable and Accrued Liabilities | The following is a summary of the Company’s accounts payable and accrued liabilities as of March 31, 2016 and December 31, 2015: (in thousands) March 31, December 31, Research and development expenses $ 3,890 $ 3,199 Consulting and other professional fees 10,540 5,088 Compensation and employee benefits 1,465 468 Royalties payable 5,533 5,328 Other 1,236 1,684 $ 22,664 $ 15,767 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Summary of Intangible Assets | The following is a summary of the Company’s intangible assets as of March 31, 2016: March 31, 2016 (in thousands) Estimated Useful Life Gross Accumulated Net HETLIOZ ® January 2033 $ 33,000 $ 3,891 $ 29,109 Fanapt ® November 2016 27,941 21,241 6,700 $ 60,941 $ 25,132 $ 35,809 The following is a summary of the Company’s intangible assets as of December 31, 2015: December 31, 2015 (in thousands) Estimated Useful Life (Years) Gross Accumulated Net HETLIOZ ® January 2033 $ 33,000 $ 3,460 $ 29,540 Fanapt ® November 2016 27,941 18,729 9,212 $ 60,941 $ 22,189 $ 38,752 |
Summary of Future Intangible Asset Amortization | The following is a summary of the future intangible asset amortization schedule as of March 31, 2016: (in thousands) Total Remainder 2017 2018 2019 2020 Thereafter HETLIOZ ® $ 29,109 $ 1,290 $ 1,721 $ 1,721 $ 1,721 $ 1,721 $ 20,935 Fanapt ® 6,700 6,700 — — — — — $ 35,809 $ 7,990 $ 1,721 $ 1,721 $ 1,721 $ 1,721 $ 20,935 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Summary of Minimum Annual Future Payments under Operating Leases | The following is a summary of the minimum annual future payments under operating leases as of March 31, 2016: Cash payments due by year (in thousands) Total Remainder 2017 2018 2019 2020 Thereafter Operating leases $ 12,944 $ 1,129 $ 1,538 $ 1,576 $ 1,616 $ 1,656 $ 5,429 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Summary of Option Activity Plan | A summary of option activity for the three months ended March 31, 2016 follows: Stock Options (in thousands, except for share and per share amounts) Number of Weighted Average Weighted Average Aggregate Outstanding at December 31, 2015 6,252,448 $ 11.87 6.16 $ 7,498 Granted 749,511 7.94 Forfeited (172,735 ) 11.16 Expired — — Exercised (6,249 ) 3.82 24 Outstanding at March 31, 2016 6,822,975 11.46 6.28 5,872 Exercisable at March 31, 2016 4,439,627 12.02 4.85 5,074 Vested and expected to vest at March 31, 2016 6,586,275 11.52 6.17 5,818 |
Summary of RSU Activity for 2006 Plan | A summary of RSU activity for the 2006 Plan for the three months ended March 31, 2016 follows: RSUs Number of Weighted Unvested at December 31, 2015 1,022,681 $ 10.90 Granted 569,242 7.96 Forfeited (70,564 ) 11.03 Vested (287,666 ) 9.65 Unvested at March 31, 2016 1,233,693 9.83 The grant date fair value for the 287,666 shares underlying RSUs that vested during the three months ended March 31, 2016 was $2.8 million. |
Business Organization and Pre30
Business Organization and Presentation - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2016Segment | |
Organization and Summary of Significant Accounting Policies Disclosure [Line Items] | |
Number of operating segments | 1 |
Net Sales by Product (Detail)
Net Sales by Product (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Revenues: | ||
Net product sales | $ 33,262 | $ 22,150 |
HETLIOZ | ||
Revenues: | ||
Net product sales | 16,201 | 7,460 |
Fanapt | ||
Revenues: | ||
Net product sales | $ 17,061 | $ 14,690 |
Summary of Significant Accoun32
Summary of Significant Accounting Policies - Additional Information (Detail) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016USD ($)Customer | Mar. 31, 2015USD ($) | Dec. 31, 2015USD ($) | |
Summary Of Significant Accounting Policies [Line Items] | |||
Percentage of insurance coverage gap allocated for prescription drugs under Medicare Part D | 50.00% | ||
Advertising expenses | $ 600 | $ 1,000 | |
Milestone obligation under license agreement | $ 25,000 | $ 25,000 | |
HETLIOZ | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Intangible asset acquired | 25,000 | ||
Milestone obligation under license agreement | 25,000 | ||
Cumulative worldwide sales milestone | $ 250,000 | ||
Customer Concentration Risk | Sales Revenue, Net | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Concentration Risk, Percentage | 96.00% | ||
Number of major customers for sales revenues | Customer | 6 | ||
Credit Concentration Risk | Accounts Receivable | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Concentration Risk, Percentage | 86.00% | ||
Number of major customers for accounts receivable | Customer | 5 |
Black-Scholes-Merton Option Pri
Black-Scholes-Merton Option Pricing Model for Stock Options Granted (Detail) - $ / shares | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Share Based Payment Award Stock Options Valuation Assumptions [Line Items] | ||
Expected dividend yield | 0.00% | 0.00% |
Weighted average expected volatility | 57.00% | 61.00% |
Weighted average expected term (years) | 6 years 29 days | 5 years 11 months 19 days |
Weighted average risk-free rate | 1.38% | 1.59% |
Weighted average fair value per share | $ 4.27 | $ 6.14 |
Total Stock-Based Compensation
Total Stock-Based Compensation Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | $ 2,266 | $ 1,945 |
Research and development | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | 524 | 624 |
Selling, general and administrative | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | $ 1,742 | $ 1,321 |
Basic and Diluted Net Loss Per
Basic and Diluted Net Loss Per Share of Common Stock (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Numerator: | ||
Net loss | $ (12,358) | $ (10,221) |
Denominator: | ||
Weighted average shares outstanding, basic and diluted | 43,104,462 | 41,744,948 |
Net loss per share, basic and diluted: | $ (0.29) | $ (0.24) |
Antidilutive securities excluded from calculations of diluted net loss per share | 6,245,280 | 5,656,662 |
Summary of Available-For-Sale M
Summary of Available-For-Sale Marketable Securities (Detail) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Schedule of Available-for-sale Securities [Line Items] | ||
Fair Market Value | $ 99,590 | $ 92,337 |
U.S. Treasury and government agencies | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair Market Value | 54,191 | 44,057 |
Corporate debt | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair Market Value | 45,399 | 48,280 |
Current Investment | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 99,498 | 92,298 |
Gross Unrealized Gains | 94 | 52 |
Gross Unrealized Losses | (2) | (13) |
Fair Market Value | 99,590 | 92,337 |
Current Investment | U.S. Treasury and government agencies | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 54,166 | 44,059 |
Gross Unrealized Gains | 26 | 6 |
Gross Unrealized Losses | (1) | (8) |
Fair Market Value | 54,191 | 44,057 |
Current Investment | Corporate debt | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 45,332 | 48,239 |
Gross Unrealized Gains | 68 | 46 |
Gross Unrealized Losses | (1) | (5) |
Fair Market Value | $ 45,399 | $ 48,280 |
Assets Measured at Fair Value o
Assets Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | $ 99,590 | $ 92,337 |
U.S. Treasury and government agencies | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 54,191 | 44,057 |
Corporate debt | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 45,399 | 48,280 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 54,191 | 44,057 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | U.S. Treasury and government agencies | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 54,191 | 44,057 |
Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 45,399 | 48,280 |
Significant Other Observable Inputs (Level 2) | Corporate debt | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | $ 45,399 | $ 48,280 |
Inventory (Detail)
Inventory (Detail) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Inventory [Line Items] | ||
Finished goods | $ 938 | $ 1,294 |
Total | 938 | 1,294 |
Raw materials | 127 | 127 |
Work-in-process | 2,249 | 2,369 |
Finished goods | 346 | |
Total | $ 2,722 | $ 2,496 |
Summary of Accounts Payable and
Summary of Accounts Payable and Accrued Liabilities (Detail) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Accounts Payable and Accrued Liabilities [Line Items] | ||
Research and development expenses | $ 3,890 | $ 3,199 |
Consulting and other professional fees | 10,540 | 5,088 |
Compensation and employee benefits | 1,465 | 468 |
Royalties payable | 5,533 | 5,328 |
Other | 1,236 | 1,684 |
Accounts payable and accrued liabilities | $ 22,664 | $ 15,767 |
Summary of Intangible Assets (D
Summary of Intangible Assets (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2015 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Gross Carrying Amount | $ 60,941 | $ 60,941 | ||
Accumulated Amortization | 25,132 | 22,189 | ||
Net Carrying Amount | $ 35,809 | $ 38,752 | ||
HETLIOZ | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Intangible assets, estimated useful life | 2033-01 | 2033-01 | 2022-12 | 2033-01 |
Gross Carrying Amount | $ 33,000 | $ 33,000 | ||
Accumulated Amortization | 3,891 | 3,460 | ||
Net Carrying Amount | $ 29,109 | $ 29,540 | ||
Fanapt | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Intangible assets, estimated useful life | 2016-11 | 2016-11 | ||
Gross Carrying Amount | $ 27,941 | $ 27,941 | ||
Accumulated Amortization | 21,241 | 18,729 | ||
Net Carrying Amount | $ 6,700 | $ 9,212 |
Intangible Assets (Textual 2 -
Intangible Assets (Textual 2 - HETLIOZ) - Additional Information (Detail) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||
Jul. 31, 2013 | Feb. 29, 2004 | Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2006 | |
Finite-Lived Intangible Assets [Line Items] | |||||||
Milestone obligation under license agreement | $ 25,000 | $ 25,000 | |||||
HETLIOZ | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Acquisition of intangible assets | $ 3,000 | $ 500 | $ 8,000 | $ 1,000 | |||
Intangible assets, estimated useful life | 2033-01 | 2033-01 | 2022-12 | 2033-01 | |||
Cumulative worldwide sales milestone | $ 250,000 | ||||||
Intangible assets capitalized | 25,000 | ||||||
Milestone obligation under license agreement | $ 25,000 |
Intangible Assets (Textual 3 -
Intangible Assets (Textual 3 - Fanapt) - Additional Information (Detail) - Fanapt - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2009 | Dec. 31, 2014 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Acquisition of intangible assets | $ 12 | |||
Estimated Patent life end date | 2016-11 | 2016-11 | ||
Assets acquired and recorded at fair value, Intangible re-acquired right | $ 15.9 |
Intangible Assets - Additional
Intangible Assets - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible asset amortization | $ 2,943 | $ 4,144 |
Summary of Future Intangible As
Summary of Future Intangible Asset Amortization (Detail) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Finite-Lived Intangible Assets [Line Items] | ||
Net Carrying Amount | $ 35,809 | $ 38,752 |
Remainder of 2016 | 7,990 | |
2,017 | 1,721 | |
2,018 | 1,721 | |
2,019 | 1,721 | |
2,020 | 1,721 | |
Thereafter | 20,935 | |
HETLIOZ | ||
Finite-Lived Intangible Assets [Line Items] | ||
Net Carrying Amount | 29,109 | 29,540 |
Remainder of 2016 | 1,290 | |
2,017 | 1,721 | |
2,018 | 1,721 | |
2,019 | 1,721 | |
2,020 | 1,721 | |
Thereafter | 20,935 | |
Fanapt | ||
Finite-Lived Intangible Assets [Line Items] | ||
Net Carrying Amount | 6,700 | $ 9,212 |
Remainder of 2016 | $ 6,700 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Income Taxes [Line Items] | ||
Provision for income taxes | $ 0 | $ 0 |
Summary of Minimum Annual Futur
Summary of Minimum Annual Future Payments Under Operating Leases (Detail) $ in Thousands | Mar. 31, 2016USD ($) |
Operating Leased Assets [Line Items] | |
Operating leases, Total | $ 12,944 |
Operating leases,Remainder of 2016 | 1,129 |
Operating leases, 2017 | 1,538 |
Operating leases, 2018 | 1,576 |
Operating leases, 2019 | 1,616 |
Operating leases, 2020 | 1,656 |
Operating leases, Thereafter | $ 5,429 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) $ in Millions | 3 Months Ended | |
Mar. 31, 2016USD ($)ft² | Mar. 31, 2015USD ($) | |
Commitments and Contingencies Disclosure [Line Items] | ||
Rent expense | $ | $ 0.5 | $ 0.4 |
Washington DC Lease | ||
Commitments and Contingencies Disclosure [Line Items] | ||
Renewal term of Lease agreement | 5 years | |
Square feet leased | ft² | 30,260 |
Commitments and Contingencies48
Commitments and Contingencies (Textual 2 - HETLIOZ) - Additional Information (Detail) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||
Jul. 31, 2013 | Feb. 29, 2004 | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2006 | Mar. 31, 2016 | Dec. 31, 2015 | |
HETLIOZ | |||||||
Milestone obligation under license agreement | $ 25,000 | $ 25,000 | |||||
Percentage of future sublicense fees payable to third-party | Mid-twenties | ||||||
HETLIOZ | |||||||
HETLIOZ | |||||||
Acquisition of intangible assets | $ 3,000 | $ 500 | $ 8,000 | $ 1,000 | |||
Milestone obligation under license agreement | $ 25,000 | ||||||
Royalty payable percentage on net sales | 10.00% | ||||||
Cumulative worldwide sales milestone | $ 250,000 | ||||||
Intangible assets capitalized | $ 25,000 |
Commitments and Contingencies49
Commitments and Contingencies (Textual 3 - Fanapt) - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Fanapt | |
Royalty received percentage on net sales | 10.00% |
Prepaid royalty Payment | $ 2,000,000 |
Royalty payment period | 10 years |
Royalty Rate for Annual Sales in up to $200 million through November 2016 | |
Fanapt | |
Royalty percentage payable on net sales below annual threshold | 23.00% |
Royalty Rate for Annual Sales in Excess of $200 million through November 2016 | |
Fanapt | |
Royalty percentage payable on net sales above annual threshold | Mid-twenties |
November 16,2016 through December 31,2019 | |
Fanapt | |
Royalty payable percentage on net sales | 3.00% |
Maximum | |
Fanapt | |
Agreed upon sales threshold level for royalty rate | $ 200,000,000 |
Fanapt | |
Fanapt | |
Royalty payable percentage on net sales | 6.00% |
Commitments and Contingencies50
Commitments and Contingencies (Textual 4 - Tradipitant) - Additional Information (Detail) - Tradipitant $ in Millions | 12 Months Ended |
Dec. 31, 2012USD ($) | |
Tradipitant | |
Future percentage of royalty payments based net sales | Low double digits |
Possible future milestone payments | $ 4 |
Milestone payment under license agreement | 1 |
Future Regulatory Approval and Sales Milestones | |
Tradipitant | |
Possible future milestone payments | $ 95 |
Legal Matters - Additional Info
Legal Matters - Additional Information (Detail) | Mar. 04, 2016Case |
Roxane Laboratories Inc. | |
Legal Proceedings [Line Items] | |
Number of cases that were consolidated | 2 |
Stock-Based Compensation (Textu
Stock-Based Compensation (Textual 1 - Stock-Based Compensation) - Additional Information (Detail) | Jan. 01, 2016shares | Mar. 31, 2016EquityPlanshares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of equity incentive plan | EquityPlan | 1 | |
2006 Plan | Outstanding options and RSUs granted (RSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares subject to outstanding options and RSUs | 8,056,668 | |
Shares available for future grant | 2,157,668 | |
2006 Plan | January 1, 2014 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Increase each January 1 in the number of shares reserved under 2006 Plan as a percentage of common stock outstanding | 4.00% | |
Maximum increase each January 1 in the number of shares reserved | 1,500,000 | |
Increase in number of shares reserved and available for future grant | 1,500,000 | |
Number of common stock available for issuance | 13,329,472 | |
Equity incentive plan, expiration date | Apr. 12, 2016 | |
Number of additional shares awarded | 0 |
Stock-Based Compensation (Tex53
Stock-Based Compensation (Textual 2 Stock Option) - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share based compensation option awards contractual term | 10 years | |
Portion of initial stock options granted to employees that vests on employee's first anniversary | 25.00% | |
Portion of initial stock options granted to employees that vests ratably over three years after completion of first year of service | 75.00% | |
Option awards vesting period, after completion of one year of service | 3 years | |
Vesting period | 4 years | |
Vesting period for initial stock options granted to directors | 4 years | |
Vesting period for subsequent stock options granted to directors | 1 year | |
Proceeds from exercise of employee stock options | $ 24 | $ 203 |
Service option awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized compensation expenses | $ 13,400 | |
Unrecognized compensation expenses, weighted average period | 1 year 6 months |
Summary of Option Activity (Det
Summary of Option Activity (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2016 | Dec. 31, 2014 | |
Number of Shares | ||
Beginning balance | 6,252,448 | |
Granted | 749,511 | |
Forfeited | (172,735) | |
Expired | 0 | |
Exercised | (6,249) | |
Ending balance | 6,822,975 | |
Exercisable | 4,439,627 | |
Vested and expected to vest at March 31, 2016 | 6,586,275 | |
Weighted Average Exercise Price at Grant Date | ||
Beginning balance | $ 11.87 | |
Granted | 7.94 | |
Forfeited | 11.16 | |
Expired | 0 | |
Exercised | 3.82 | |
Ending balance | 11.46 | |
Exercisable | 12.02 | |
Vested and expected to vest at March 31, 2016 | $ 11.52 | |
Weighted Average Remaining Term (Years) | ||
Weighted Average Remaining Term | 6 years 3 months 11 days | 6 years 1 month 28 days |
Exercisable | 4 years 10 months 6 days | |
Vested and expected to vest at March 31, 2016 | 6 years 2 months 1 day | |
Aggregate Intrinsic Value | ||
Beginning balance | $ 7,498 | |
Exercised | 24 | |
Ending balance | 5,872 | |
Exercisable | 5,074 | |
Vested and expected to vest at March 31, 2016 | $ 5,818 |
Stock-Based Compensation (Tex55
Stock-Based Compensation (Textual 3 RSU) - Additional Information (Detail) - Restricted Stock Units (RSU) $ in Millions | 3 Months Ended |
Mar. 31, 2016USD ($)shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting period of RSU awards in equal installments | 4 years |
Unrecognized compensation expenses, weighted average period | 2 years |
Unrecognized compensation expenses related to unvested RSUs | $ 11.4 |
2006 Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Fair value of common stock vested, shares | shares | 287,666 |
Fair value of common stock vested | $ 2.8 |
Summary of RSU Activity for 200
Summary of RSU Activity for 2006 Plan (Detail) - 2006 Plan - Restricted Stock Units (RSU) | 3 Months Ended |
Mar. 31, 2016$ / sharesshares | |
Number of Shares Unvested | |
Beginning balance | shares | 1,022,681 |
Granted | shares | 569,242 |
Forfeited | shares | (70,564) |
Vested | shares | (287,666) |
Ending balance | shares | 1,233,693 |
Weighted Average Price/Share Unvested | |
Beginning balance | $ / shares | $ 10.90 |
Granted | $ / shares | 7.96 |
Forfeited | $ / shares | 11.03 |
Vested | $ / shares | 9.65 |
Ending balance | $ / shares | $ 9.83 |