Vanda Pharmaceuticals (VNDA) 10-K 15 Feb 18 2017 FY Annual report Financial data

Document and Entity Information

Document and Entity Information - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2017	Feb. 01, 2018	Jun. 30, 2017
Document Information [Line Items]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2017
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	FY
Trading Symbol	VNDA
Entity Registrant Name	Vanda Pharmaceuticals Inc.
Entity Central Index Key	1,347,178
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		45,437,938
Entity Public Float			$ 715.2

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Current assets:
Cash and cash equivalents	$ 33,627	$ 40,426
Marketable securities	109,786	100,914
Accounts receivable, net	17,601	20,268
Inventory	840	779
Prepaid expenses and other current assets	8,003	11,788
Total current assets	169,857	174,175
Property and equipment, net	5,306	5,015
Intangible assets, net	26,069	27,819
Non-current inventory and other	4,193	3,365
Total assets	205,425	210,374
Current liabilities:
Accounts payable and accrued liabilities	20,335	16,196
Accrued government and other rebates	23,028	34,124
Milestone obligations under license agreements	27,000
Total current liabilities	70,363	50,320
Milestone obligations under license agreements		25,000
Other non-current liabilities	3,675	3,724
Total liabilities	74,038	79,044
Commitments and contingencies (Notes 11 and 16)
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; 44,938,133 and 44,000,614 shares issued and outstanding at December 31, 2017 and 2016, respectively	45	44
Additional paid-in capital	492,802	477,087
Accumulated other comprehensive income (loss)	(34)	58
Accumulated deficit	(361,426)	(345,859)
Total stockholders' equity	131,387	131,330
Total liabilities and stockholders' equity	$ 205,425	$ 210,374

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Dec. 31, 2017	Dec. 31, 2016
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	44,938,133	44,000,614
Common stock, shares outstanding	44,938,133	44,000,614

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Revenues:
Net product sales	$ 165,083	$ 146,017	$ 109,925
Total revenues	165,083	146,017	109,925
Operating expenses:
Cost of goods sold, excluding amortization	17,848	24,712	23,462
Research and development	38,547	29,156	29,145
Selling, general and administrative	123,841	99,787	84,531
Intangible asset amortization	1,750	10,933	12,972
Total operating expenses	181,986	164,588	150,110
Loss from operations	(16,903)	(18,571)	(40,185)
Other income	1,472	665	320
Loss before income taxes	(15,431)	(17,906)	(39,865)
Provision for income taxes	136	104
Net loss	$ (15,567)	$ (18,010)	$ (39,865)
Net loss per share:
Basic	$ (0.35)	$ (0.41)	$ (0.94)
Diluted	$ (0.35)	$ (0.41)	$ (0.94)
Weighted average shares outstanding:
Basic	44,735,146	43,449,441	42,250,254
Diluted	44,735,146	43,449,441	42,250,254

CONSOLIDATED STATEMENTS OF COMP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Net loss	$ (15,567)	$ (18,010)	$ (39,865)
Other comprehensive income:
Net foreign currency translation gain (loss)	30	(1)
Change in net unrealized gain (loss) on marketable securities	(122)	20	23
Tax provision on other comprehensive income	0	0	0
Other comprehensive income (loss), net of tax	(92)	19	23
Comprehensive loss	$ (15,659)	$ (17,991)	$ (39,842)

CONSOLIDATED STATEMENTS OF CHAN

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Other Comprehensive Income (Loss)	Accumulated Deficit
Beginning balance (in shares) at Dec. 31, 2014		41,486,361
Beginning balance at Dec. 31, 2014	$ 160,817	$ 41	$ 448,744	$ 16	$ (287,984)
Issuance of common stock from the exercise of stock options and settlement of restricted stock units	4,374	$ 2	4,372
Issuance of common stock form the exercise of stock options and settlement of restricted stock awards (in shares)		1,353,877
Shares withheld upon settlement of equity awards	(283)		(283)
Shares withheld upon settlement of equity awards(in shares)		(24,947)
Stock-based compensation expense	7,961		7,961
Net loss	(39,865)				(39,865)
Other comprehensive income (loss), net of tax	23			23
Ending balance (in shares) at Dec. 31, 2015		42,815,291
Ending 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	7,751	$ 1	7,750
Issuance of common stock form the exercise of stock options and settlement of restricted stock awards (in shares)		1,185,323
Stock-based compensation expense	8,543		8,543
Net loss	(18,010)				(18,010)
Other comprehensive income (loss), net of tax	$ 19			19
Ending balance (in shares) at Dec. 31, 2016	44,000,614	44,000,614
Ending balance at Dec. 31, 2016	$ 131,330	$ 44	477,087	58	(345,859)
Issuance of common stock from the exercise of stock options and settlement of restricted stock units	5,251	$ 1	5,250
Issuance of common stock form the exercise of stock options and settlement of restricted stock awards (in shares)		937,519
Stock-based compensation expense	10,465		10,465
Net loss	(15,567)				(15,567)
Other comprehensive income (loss), net of tax	$ (92)			(92)
Ending balance (in shares) at Dec. 31, 2017	44,938,133	44,938,133
Ending balance at Dec. 31, 2017	$ 131,387	$ 45	$ 492,802	$ (34)	$ (361,426)

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Cash flows from operating activities
Net loss	$ (15,567)	$ (18,010)	$ (39,865)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation of property and equipment	1,234	935	582
Stock-based compensation	10,465	8,543	7,961
Amortization of (discounts) premiums on marketable securities	(426)	62	677
Intangible asset amortization	1,750	10,933	12,972
Other non-cash adjustments, net	587	542	483
Changes in operating assets and liabilities:
Accounts receivable	2,525	(4,298)	(12,677)
Prepaid expenses and other assets	3,652	(6,159)	(2,558)
Inventory	(1,060)	200	387
Accounts payable and other liabilities	5,953	575	9,432
Accrued government and other rebates	(11,096)	(1,426)	35,055
Net cash provided by (used in) operating activities	(1,983)	(8,103)	12,449
Cash flows from investing activities
Purchases of property and equipment	(1,664)	(1,407)	(2,527)
Purchases of marketable securities	(148,135)	(165,405)	(193,111)
Proceeds from sale of marketable securities			999
Maturities of marketable securities	139,568	156,787	168,041
Other investing activities	124	(46)
Net cash used in investing activities	(10,107)	(10,071)	(26,598)
Cash flows from financing activities
Proceeds from exercise of employee stock options	5,251	7,751	4,374
Tax obligations paid in connection with settlement of restricted stock units			(283)
Net cash provided by financing activities	5,251	7,751	4,091
Effect of exchange rate changes on cash and cash equivalents	40	6
Net decrease in cash and cash equivalents	(6,799)	(10,417)	(10,058)
Cash and cash equivalents
Beginning of year	40,426	50,843	60,901
End of year	$ 33,627	$ 40,426	$ 50,843

Business Organization and Prese

Business Organization and Presentation	12 Months Ended
	Dec. 31, 2017
Business Organization and Presentation	1. Business Organization and Presentation Business organization Vanda Pharmaceuticals Inc. (the Company) is a global biopharmaceutical company focused on the development and commercialization of innovative 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 ® Non-24-Hour (Non-24), ® Non-24 ® ® Non-24, • Fanapt ® ® ® ® ® • Tradipitant (VLY-686), neurokinin-1 (NK-1R) • VTR-297 • VQW-765 AQW-051), alpha-7 • Portfolio of Cystic Fibrosis Transmembrane Conductance Regulator (CFTR) activators and inhibitors. Basis of presentation The accompanying consolidated financial statements includes the accounts of Vanda Pharmaceuticals Inc. and its wholly-owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S.). All intercompany accounts and transactions have been eliminated in consolidation.

Summary of Significant Accounti

Summary of Significant Accounting Policies	12 Months Ended
	Dec. 31, 2017
Summary of Significant Accounting Policies	2. Summary of Significant Accounting Policies Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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. Management continually re-evaluates Cash and Cash Equivalents For purposes of the consolidated balance sheets and consolidated statements of cash flows, cash equivalents represent highly-liquid investments with a maturity date of three months or less at the date of purchase. Cash and cash equivalents includes investments in money market funds with commercial banks and financial institutions, and commercial paper of high-quality corporate issuers. Restricted cash of $0.7 million and $0.8 million relating primarily to leases for office space is included in other current and other non-current Marketable Securities The Company classifies all of its marketable securities as available-for-sale Available-for-sale available-for-sale available-for-sale non-current. Inventory Inventory, which is recorded at the lower of cost or net realizable value, includes the cost of third-party manufacturing and other direct and indirect costs and is valued using the first-in, first-out non-current. Intangible Assets Costs incurred for products not yet approved by the FDA and for which no alternative future use exists are recorded as expense. Obligations for milestone payments to other pharmaceutical companies that may result in a capitalized intangible asset are recognized when it is deemed probable that the milestone event will occur. In the event a product has been approved by the FDA or an alternative future use exists for a product, patent and license costs are capitalized and amortized on a straight-line basis over the estimated useful economic life of the of the related product patents. For intangible assets related to HETLIOZ ® ® ® ® Property and Equipment Property and equipment are stated at cost less accumulated depreciation. The costs of leasehold improvements funded by or reimbursed by the lessor are capitalized and amortized as leasehold improvements along with a corresponding deferred rent liability. Depreciation of most property and equipment is provided on a straight-line basis over the estimated useful lives of the assets. Leasehold improvements are amortized using a straight-line basis over the lesser of the estimated useful lives of the assets or the terms of the related leases. The costs of additions and improvements are capitalized, and repairs and maintenance costs are charged to operations in the period incurred. Upon retirement or disposition of property and equipment, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in the statement of operations for that period. Accounts Payable and Accrued Liabilities The Company’s management is required to estimate accrued liabilities as part of the process of preparing financial statements. The estimation of accrued liabilities involves identifying services that have been performed on the Company’s behalf, and then estimating the level of service performed and the associated cost incurred for such services as of each balance sheet date in the financial statements. Accrued liabilities include research and development expenses, such as accrued costs under contracts with clinical monitors, data management organizations and investigators in conjunction with clinical trials, fees to contract manufacturers in conjunction with the production of clinical materials, consulting and professional fees, such as lawyers and fees for marketing and other commercialization activities, accrued compensation and employee benefits, such as accrued bonus, royalties payable under licensing agreements, and other accrued fees. Pursuant to management’s assessment of the services that have been performed on clinical trials and other contracts, the Company recognizes these expenses as the services are provided. Such management assessments include, but are not limited to: (i) an evaluation by the project manager of the work that has been completed during the period, (ii) measurement of progress prepared internally and/or provided by the third-party service provider, (iii) analyses of data that justify the progress, and (iv) management’s judgment. In the event that the Company does not identify certain costs that have begun to be incurred or the Company under- or over-estimates the level of services performed or the costs of such services, the Company’s reported expenses for such period would be too low or too high. Net Product Sales The Company’s net product sales consist of sales of HETLIOZ ® ® Year Ended December 31, ( in thousands ) 2017 2016 2015 HETLIOZ ® $ 89,978 $ 71,671 $ 44,302 Fanapt ® 75,105 74,346 65,623 $ 165,083 $ 146,017 $ 109,925 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 ® ® Year Ended December 31, Percent of Net Product Sales 2017 2016 2015 Distributor A 32 % 23 % 14 % Distributor B 15 % 16 % 18 % Distributor C 15 % 16 % 19 % Distributor D 12 % 15 % 17 % Distributor E 11 % 16 % 14 % Distributor F 10 % 1 % 0 % Distributor G — 9 % 12 % The following table presents each major customer that represented more than 10% of accounts receivable, net, as of December 31, 2017 and 2016: December 31, Percent of Accounts Receivable, Net 2017 2016 Distributor A 28 % 22 % Distributor B 18 % 19 % Distributor C 10 % 15 % Distributor D 21 % 25 % Distributor E 8 % 11 % Product Sales Discounts and Allowances The Company’s product sales are recorded net of applicable discounts, rebates, chargebacks, service fees, co-pay co-pay Prompt-pay: Rebates: Chargebacks: non-profit Medicare Part D Coverage Gap: Service Fees: Co-payment co-payment Co-pay co-pay Product Returns: (in thousands) Balance at December 31, 2014 $ 85 Additions 986 Credits/payments (12 ) Balance at December 31, 2015 1,059 Additions 2,507 Credits/payments (486 ) Balance at December 31, 2016 3,080 Additions 5,978 Credits/payments (4,939 ) Balance at December 31, 2017 $ 4,119 Cost of Goods Sold Cost of goods sold includes royalties payable, the cost of inventory sold, manufacturing and supply chain costs and product shipping and handling costs related to sales of HETLIOZ ® ® Research and Development Expenses Research and development expenses consist primarily of fees for services provided by third parties in connection with the clinical trials, costs of contract manufacturing services, milestone payments, costs of materials used in clinical trials and research and development, costs for regulatory consultants and filings, depreciation of capital resources used to develop products, related facilities costs, and salaries, other employee-related costs and stock-based compensation for research and development personnel. The Company expenses research and development costs as they are incurred for products in the development stage, including manufacturing costs and milestone payments made under license agreements prior to FDA approval. Upon and subsequent to FDA approval, manufacturing and milestone payments related to license agreements are capitalized. Milestone payments are accrued when it is deemed probable that the milestone event will be achieved. Costs related to the acquisition of intellectual property are expensed as incurred if the underlying technology is developed in connection with the Company’s research and development efforts and has no alternative future use. Selling, General and Administrative Expenses Selling, general and administrative expenses consist of salaries, stock-based compensation, facilities and third party expenses. Selling, general and administrative expenses are associated with the activities of the executive, finance, accounting, information technology, business development, commercial support, trade and distribution, sales, marketing, legal, medical affairs and human resource functions. Additionally, selling, general and administrative expenses included an estimate for the annual Patient Protection and Affordable Care fee. 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 estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. 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 $1.3 million, $1.4 million and $3.4 million for the years ended December 31, 2017, 2016 and 2015, respectively. Foreign Currency The reporting currency of the Company is the U.S. dollar. The functional currency of the Company’s international subsidiaries is the local currency. Assets and liabilities, including inter-company balances for which settlement is anticipated in the foreseeable future, denominated in foreign currencies are translated at exchange rates in effect at the balance sheet date. Foreign currency equity balances are translated at historical rates. Revenues and expenses denominated in foreign currencies are translated at average exchange rates for the respective periods. Foreign currency translation adjustments are recorded in accumulated other comprehensive income. Transactions denominated in currencies other than subsidiaries’ functional currencies are recorded based on exchange rates at the time such transactions arise. Changes in exchange rates with respect to amounts recorded in the consolidated balance sheets related to these items will result in unrealized foreign currency transaction gains and losses based upon period-end Income Taxes The Company accounts for income taxes using the asset and liability method. Under the asset and liability method, current income tax expense or benefit is the amount of income taxes expected to be payable or refundable for the current year. A deferred income tax asset or liability is recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credits and loss carryforwards. 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. Tax rate changes are reflected in income during the period such changes are enacted. Changes in ownership may limit the amount of NOL carryforwards that can be utilized in the future to offset taxable income. Non-Cash Purchases of property and equipment accrued in current liabilities amounted to zero, $0.2 million and $0.2 million for each of the years ended December 31, 2017, 2016 and 2015, respectively. The acquisition of an intangible asset relating to HETLIOZ ® non-current Certain Risks and Uncertainties The Company’s products under development require approval from the FDA or other international regulatory agencies prior to commercial sales. There can be no assurance the products will receive the necessary clearance. If the Company is denied clearance or clearance is delayed, it may have a material adverse impact on the Company. The Company’s products are concentrated in rapidly-changing, highly-competitive markets, which are characterized by rapid technological advances, changes in customer requirements and evolving regulatory requirements and industry standards. Any failure by the Company to anticipate or to respond adequately to technological developments in its industry, changes in customer requirements or changes in regulatory requirements or industry standards or any significant delays in the development or introduction of products or services could have a material adverse effect on the Company’s business, operating results and future cash flows. The Company depends on single source suppliers for critical raw materials for manufacturing, as well as other components required for the administration of its products. The loss of these suppliers could delay the clinical trials or prevent or delay commercialization of the products. Concentrations of Credit Risk Financial instruments, which potentially subject the Company to significant concentrations of credit risk, consist primarily of cash, cash equivalents and marketable securities. The Company places its cash, cash equivalents and marketable securities with highly-rated financial institutions. At December 31, 2017, the Company maintained all of its cash, cash equivalents and marketable securities in three financial institutions. Deposits held with these institutions may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed upon demand, and the Company believes there is minimal risk of losses on such balances. Segment and Geographic Information The Company operates in one reporting segment and, accordingly, no segment disclosures are presented herein. Foreign sales were not material for each of the years ended December 31, 2017, 2016 and 2015. Recent Accounting Pronouncements In November 2016, the FASB issued Accounting Standards Update (ASU) 2016-18, Restricted Cash beginning-of-period end-of-period In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows – Classification of Certain Cash Receipts and Cash Payments In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting paid-in In February 2016, the FASB issued ASU 2016-02, Leases right-of-use In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers 2015-14, Revenue from Contracts with Customers 2016-08 Revenue from Contracts with Customers, Principal versus Agent Considerations (Reporting Revenue versus Net) 2016-10, Revenue from Contracts with Customers, identifying Performance Obligations and Licensing 2016-12, Revenue from Contracts with Customers, Narrow-Scope Improvements and Practical Expedients 2014-09. 2016-08, 2016-10, 2016-12 2014-09 2015-14.

Earnings per Share

Earnings per Share	12 Months Ended
	Dec. 31, 2017
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 income (loss) per share of common stock for the years ended December 31, 2017, 2016, and 2015: Year Ended December 31, (in thousands, except for share and per share amounts) 2017 2016 2015 Numerator: Net loss $ (15,567 ) $ (18,010 ) $ (39,865 ) Denominator: Weighted average shares outstanding, basic and diluted 44,735,146 43,449,441 42,250,254 Net loss per share, basic and diluted: Basic $ (0.35 ) $ (0.41 ) $ (0.94 ) Diluted $ (0.35 ) $ (0.41 ) $ (0.94 ) Antidilutive securities excluded from calculations of diluted net income (loss) per share 3,136,515 4,943,797 5,660,199 The Company incurred a net loss for each of the years ended December 31, 2017, 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	12 Months Ended
	Dec. 31, 2017
Marketable Securities	4. Marketable Securities The following is a summary of the Company’s available-for-sale Gross Gross Fair December 31, 2017 Amortized Unrealized Unrealized Market (in thousands) Cost Gains Losses Value U.S. Treasury and government agencies $ 60,681 $ — $ (63 ) $ 60,618 Corporate debt 49,168 12 (12 ) 49,168 $ 109,849 $ 12 $ (75 ) $ 109,786 The following is a summary of the Company’s available-for-sale Gross Gross Fair December 31, 2016 Amortized Unrealized Unrealized Market (in thousands) Cost Gains Losses Value U.S. Treasury and government agencies $ 50,661 $ 3 $ (17 ) $ 50,647 Corporate debt 50,194 89 (16 ) 50,267 $ 100,855 $ 92 $ (33 ) $ 100,914

Fair Value Measurements

Fair Value Measurements	12 Months Ended
	Dec. 31, 2017
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 December 31, 2017 and 2016 consist of cash equivalents and available-for-sale The Company held certain assets that are required to be measured at fair value on a recurring basis as of December 31, 2017, as follows: Fair Value Measurement as of December 31, 2017 Using Quoted Prices in Significant Active Markets for Significant Other Unobservable December 31, Identical Assets Observable Inputs Inputs (in thousands) 2017 (Level 1) (Level 2) (Level 3) U.S. Treasury and government agencies 60,618 60,618 — — Corporate debt 53,164 — 53,164 — $ 113,782 $ 60,618 $ 53,164 $ — Total assets measured at fair value as of December 31, 2017 include $4.0 million of cash equivalents. The Company held certain assets that are required to be measured at fair value on a recurring basis as of December 31, 2016, as follows: Fair Value Measurement as of December 31, 2016 Using Quoted Prices in Significant Active Markets for Significant Other Unobservable December 31, Identical Assets Observable Inputs Inputs (in thousands) 2016 (Level 1) (Level 2) (Level 3) U.S. Treasury and government agencies $ 50,647 $ 50,647 $ — $ — Corporate debt 50,267 — 50,267 — $ 100,914 $ 50,647 $ 50,267 $ — 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, the carrying value of which materially approximate their fair values.

Inventory

Inventory	12 Months Ended
	Dec. 31, 2017
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. December 31, December 31, (in thousands) 2017 2016 Current assets Work-in-process $ 80 $ 17 Finished goods 760 762 $ 840 $ 779 Non-Current Raw materials $ 87 $ 127 Work-in-process 2,821 2,225 Finished goods 408 83 $ 3,316 $ 2,435

Prepaid Expenses and Other Curr

Prepaid Expenses and Other Current Assets	12 Months Ended
	Dec. 31, 2017
Prepaid Expenses and Other Current Assets	7. Prepaid Expenses and Other Current Assets The following is a summary of the Company’s prepaid expenses and other current assets as of December 31, 2017 and 2016: December 31, December 31, (in thousands) 2017 2016 Research and development expenses $ 2,415 $ 2,397 Consulting and other professional fees 2,876 6,051 Prepaid royalties — 1,761 Other 2,712 1,579 $ 8,003 $ 11,788

Property and Equipment

Property and Equipment	12 Months Ended
	Dec. 31, 2017
Property and Equipment	8. Property and Equipment The following is a summary of the Company’s property and equipment, at cost, as of December 31, 2017 and 2016: Estimated Useful Life December 31, (in thousands) (Years) 2017 2016 Computer and other equipment 3 $ 3,342 $ 2,426 Furniture and fixtures 5 - 7 1,929 1,412 Leasehold improvements 5 - 11 4,515 4,408 9,786 8,246 Accumulated depreciation and amortization (4,480 ) (3,231 ) $ 5,306 $ 5,015 Depreciation expense was $1.2 million, $0.9 million and $0.6 million for the years ended December 31, 2017, 2016 and 2015, respectively.

Intangible Assets

Intangible Assets	12 Months Ended
	Dec. 31, 2017
Intangible Assets	9. Intangible Assets HETLIOZ ® . ® ® The Company is obligated to make a future milestone payment to BMS of $25.0 million when cumulative worldwide sales of HETLIOZ ® non-current ® ® Fanapt ® ® ® Pursuant to a settlement agreement in December 2014, Novartis transferred all U.S. and Canadian rights in the Fanapt ® ® ® ® The following is a summary of the Company’s intangible assets as of December 31, 2017: December 31, 2017 Estimated Gross Net Useful Life Carrying Accumulated Carrying (in thousands) (Years) Amount Amortization Amount HETLIOZ ® May 2034 $ 33,000 $ 6,931 $ 26,069 Fanapt ® November 2016 27,941 27,941 — $ 60,941 $ 34,872 $ 26,069 The following is a summary of the Company’s intangible assets as of December 31, 2016: December 31, 2016 Estimated Gross Net Useful Life Carrying Accumulated Carrying (in thousands) (Years) Amount Amortization Amount HETLIOZ ® January 2033 $ 33,000 $ 5,181 $ 27,819 Fanapt ® November 2016 27,941 27,941 — $ 60,941 $ 33,122 $ 27,819 Intangible assets are amortized over their estimated useful economic life using the straight-line method. Amortization expense for the years ended December 31, 2017, 2016 and 2015 was as follows: Year Ended December 31, (in thousands) 2017 2016 2015 HETLIOZ ® $ 1,750 $ 1,721 $ 2,922 Fanapt ® — 9,212 10,050 $ 1,750 $ 10,933 $ 12,972 The following is a summary of the future intangible asset amortization schedule as of December 31, 2017: (in thousands) Total 2018 2019 2020 2021 2022 Thereafter HETLIOZ ® $ 26,069 $ 1,545 $ 1,591 $ 1,591 $ 1,591 $ 1,591 $ 18,160

Accounts Payable and Accrued Li

Accounts Payable and Accrued Liabilities	12 Months Ended
	Dec. 31, 2017
Accounts Payable and Accrued Liabilities	10. Accounts Payable and Accrued Liabilities The following is a summary of the Company’s accounts payable and accrued liabilities as of December 31, 2017 and 2016: December 31, December 31, (in thousands) 2017 2016 Research and development expenses $ 4,663 $ 3,024 Consulting and other professional fees 3,961 3,192 Compensation and employee benefits 5,323 4,291 Royalties payable 4,394 4,555 Other 1,994 1,134 $ 20,335 $ 16,196

Commitments and Contingencies

Commitments and Contingencies	12 Months Ended
	Dec. 31, 2017
Commitments and Contingencies	11. Commitments and Contingencies Operating Leases Commitments relating to operating leases represent the minimum annual future payments under operating leases and subleases for a total of 40,188 square feet of office space for the Company’s headquarters at 2200 Pennsylvania Avenue, N.W. in Washington, D.C. that expire in 2026, the operating lease for 2,880 square feet of office space for the Company’s European headquarters in London that has a noncancellable lease term ending in 2021, and 1,249 square feet of office space in Berlin under a short-term operating lease. The following is a summary of the minimum annual future payments under operating leases and subleases for office space as of December 31, 2017: Cash payments due by year (in thousands) Total 2018 2019 2020 2021 2022 Thereafter Operating leases $ 19,789 $ 2,311 $ 2,295 $ 2,351 $ 2,174 $ 2,187 $ 8,471 In 2011, the Company entered into an operating lease for its headquarters at 2200 Pennsylvania Avenue, N.W. in Washington, D.C. for 21,400 square feet of office space. A lease amendment in 2014 increased the office space under lease to 30,260 square feet, and a lease amendment in June 2016 extended the lease term from April 2023 to September 2026. Subject to the prior rights of other tenants, 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 under certain circumstances. In June 2016, the Company entered into a sublease under which the Company leases 9,928 square feet of office space for its headquarters at 2200 Pennsylvania Avenue, N.W. in Washington, D.C. The sublease term began in January 2017 and ends in July 2026, but may be terminated earlier by either party under certain circumstances. The Company has the right to sublease or assign all or a portion of the premises, subject to standard conditions. Rent expense under operating leases and subleases, was $3.2 million, $2.5 million and $1.9 million for the years ended December 31, 2017, 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 ® . ® ® ® ® ® ® ® mid-twenties. ® ® Fanapt ® . ® ® mid-twenties ® know-how. know-how know-how ® know-how Tradipitant. NK-1R pre-NDA pre-NDA VQW-765 AQW-051). ® VQW-765, alpha-7 VQW-765 mid-teens. Portfolio of CFTR activators and inhibitors pre-investigational 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.

Income Taxes

Income Taxes	12 Months Ended
	Dec. 31, 2017
Income Taxes	12. Income Taxes The Company recorded total tax expense of $0.1 million on consolidated pretax loss of $15.4 million, consisting of $15.7 million of pretax loss in the U.S. and $0.3 million of pretax income from foreign subsidiaries for the year ended December 31, 2017. The Company recorded total tax expense of $0.1 million on consolidated pretax loss of $17.9 million, consisting of $18.1 million of pretax loss in the U.S. and $0.2 million of pretax income from foreign subsidiaries for the year ended December 31, 2016. The following is a summary of the provision (benefit) for income taxes for the years ended December 31, 2017, 2016 and 2015: Year Ended December 31, (in thousands) 2017 2016 2015 Current: Federal $ — $ — $ — State 65 66 — Foreign (66 ) 142 Deferred: Federal — — — State — — Foreign 137 (104 ) — Provision for income taxes $ 136 $ 104 $ — Deferred tax assets are reduce by a tax 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 pretax losses in the U.S. serves as strong evidence that it is more likely than not that deferred tax assets in the U.S. will not be realized in the future. Therefore, the Company had a full tax valuation allowance against all deferred tax assets in the U.S. as of December 31, 2017 and 2016. As a result of the tax valuation allowance against deferred tax assets in the U.S., there was no benefit for income taxes associated with the loss before income taxes for each of the years ended December 31, 2017, 2016 and 2015. The following is reconciliation between the federal statutory tax rate and the Company’s effective tax rate for the years ended December 31, 2017, 2016 and 2015: Year Ended December 31, 2017 2016 2015 Federal tax at statutory rate 35.0 % 35.0 % 35.0 % State taxes 1.7 % 0.8 % -0.1 % The U.S. Tax Cuts and Job Act (1) -262.6 % 0.0 % 0.0 % Change in valuation allowance - U.S. Tax Cuts and Jobs Act 262.6 % 0.0 % 0.0 % Other change in valuation allowance -47.8 % -38.4 % -25.4 % Research and development credit 9.0 % 3.8 % 1.5 % Orphan drug credit 6.3 % 7.6 % 1.6 % Section 162(m) limitation 8.1 % 0.0 % -5.7 % Other tax rate changes -2.6 % 3.9 % -0.3 % Change in state NOLs 5.1 % 0.0 % -1.4 % Stock-based compensation -13.0 % -12.5 % -5.1 % Other items -2.7 % -0.8 % -0.1 % Effective tax rate -0.9 % -0.6 % 0.0 % (1) The effective tax rate for the year ended December 31, 2017 includes the estimate of the effect of the U.S. Tax Cuts and Jobs Act, which primarily relates to the remeasurement of existing deferred taxes as a result of the change to the U.S. federal tax rate. The following is a summary of the components of the Company’s deferred tax assets, net, and the related tax valuation allowance as of December 31, 2017 and 2016: December 31, (in thousands) 2017 2016 Deferred tax assets: Net operating loss carryforwards $ 59,222 $ 84,177 Stock-based compensation 5,383 12,443 Accrued and deferred expenses 1,967 2,558 Research and development and orphan drug credit carryforwards 43,976 41,104 Intangible assets 3,745 5,477 Other 2,174 1,019 Total deferred tax assets 116,467 146,778 Deferred tax liabilities: Other (386 ) (666 ) Total deferred tax liabilities (386 ) (666 ) Deferred tax assets, net 116,081 146,112 Valuation allowance 116,110 146,012 Net deferred tax assets (liabilities) $ (29 ) $ 100 The Company’s net deferred tax liability of less than $0.1 million as of December 31, 2017 is included as a component of other non-current non-current The following is a summary of changes in the Company’s tax valuation allowance for the years ended December 31, 2017, 2016 and 2015: Balance at Balance at Beginning End of (in thousands) of Year Additions Reductions Year Year Ended: December 31, 2017 $ 146,012 $ 12,403 $ (42,305 ) $ 116,110 December 31, 2016 139,037 11,031 (4,056 ) 146,012 December 31, 2015 128,890 17,002 (6,855 ) 139,037 The Company has net operating loss (NOL) and other tax credit carryforwards in several jurisdictions. As of December 31, 2017, the Company has $49 million of deferred tax assets relating to U.S. federal NOL carryforwards, along with deferred tax assets of $9 million and $35 million related to U.S. federal research and development credits and orphan drug credits, respectively. These tax attributes will begin to expire in 2028, 2024 and 2030, respectively. In addition, the Company has $10 million of deferred tax assets relating to U.S. state NOL carryforwards, which primarily relate to the District of Columbia. State NOLs for the District of Columbia will begin to expire in 2031 and other state NOLs will begin to expire in 2018. A valuation allowance is recorded against these U.S. federal and U.S. state deferred tax assets. Because the Company has generated NOLs from inception through December, 31, 2017, all income tax returns filed by the Company are open to examination by tax jurisdictions. As of December 31, 2017, the Company’s income tax returns had not been under examination by any federal or state tax jurisdictions. As of December 31, 2017 and 2016, the Company had no uncertain tax positions. Certain tax attributes of the Company, including NOLs and credits, would be subject to a limitation should an ownership change as defined under the Internal Revenue Code of 1986, as amended (IRC), Section 382, occur. The limitations resulting from a change in ownership could affect the Company’s ability to utilize its NOLs and credit carryforward (tax attributes). Ownership changes occurred in the years ending December 31, 2014 and December 31, 2008. The Company believes that the ownership changes in 2014 and 2008 will not impact its ability to utilize NOL and credit carryforwards; however, future ownership changes may cause the Company’s existing tax attributes to have additional limitations. Because the Company maintains a valuation allowance on its U.S. tax attributes, any limitation as a result of application of IRC Section 382 limitation would not have a material impact on the Company’s provision for income taxes for the year ended December 31, 2017. The Tax Cuts and Jobs Act (TCJA) was enacted in December 2017. The TCJA reduces the U.S. federal corporate tax rate from 35% to 21%, requires companies to pay a one-time

Accumulated Other Comprehensive

Accumulated Other Comprehensive Income (Loss)	12 Months Ended
	Dec. 31, 2017
Accumulated Other Comprehensive Income (Loss)	13. Accumulated Other Comprehensive Income (Loss) The accumulated balances related to each component of other comprehensive income (loss) were as follows for the years ended December 31, 2017 and 2016: December 31, December 31, (in thousands) 2017 2016 Foreign currency translation $ 29 $ (1 ) Available-for-sale (63 ) 59 $ (34 ) $ 58 There were no reclassifications out of accumulated other comprehensive income (loss) for the years ended December 31, 2017, 2016 and 2015.

Equity Incentive Plans

Equity Incentive Plans	12 Months Ended
	Dec. 31, 2017
Equity Incentive Plans	14. Equity Incentive Plans As of December 31, 2017, there were 6,077,622 shares that were subject to outstanding options and RSUs under the 2006 Equity Incentive Plan (2006 Plan) and the 2016 Equity Incentive Plan (2016 Plan, and together with the 2006 Plan, Plans). The 2006 Plan expired by its terms on April 12, 2016, and the Company adopted the 2016 Plan. Outstanding options and RSUs under the 2006 Plan remain in effect and the terms of the 2006 Plan continue to apply, but no additional awards can be granted under the 2006 Plan. In June 2016, the Company’s stockholders approved the 2016 Plan under which 2,000,000 shares of common stock were reserved for issuance. In June 2017, the Company’s stockholders approved the amendment and restatement of the 2016 Plan pursuant to which an additional 2,700,000 shares were reserved for issuance, among other administrative changes. As a result, there are a total of 4,700,000 shares of common stock reserved for issuance under the 2016 Plan, 3,168,565 shares of which remained available for future grant as of December 31, 2017. Stock Options The Company has granted option awards under the Plans 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 The Company’s equity incentive plan, the Second Amended and Restated Management Equity Plan (2004 Plan), expired by its terms in 2014 and no additional options will be granted under the 2004 Plan. There were no shares subject to outstanding options granted under the 2004 Plan as of December 31, 2017 and 2016. The following is a summary of option activity for the 2004 Plan for the year ended December 31, 2015: Weighted Average Weighted Average Aggregate 2004 Plan Number of Exercise Price at Remaining Term Intrinsic (in thousands, except for share and per share amounts) Shares Grant Date (Years) Value Outstanding at December 31, 2014 652,810 $ 1.74 0.78 $ 8,212 Exercised (652,810 ) 1.74 6,129 Outstanding at December 31, 2015 — The following is a summary of option activity for the 2006 Plan and the 2016 Plan for the years ended December 31, 2017, 2016, and 2015: Weighted Average Weighted Average Aggregate 2006 and 2016 Plans Number of Exercise Price at Remaining Term Intrinsic (in thousands, except for share and per share amounts) Shares Grant Date (Years) Value Outstanding at December 31, 2014 6,227,112 $ 11.58 6.71 $ 28,523 Granted 1,056,500 11.74 Forfeited (496,854 ) 10.75 Expired (64,336 ) 25.69 Exercised (469,974 ) 7.02 2,594 Outstanding at December 31, 2015 6,252,448 11.87 6.16 7,498 Granted 866,011 8.43 Forfeited (392,700 ) 11.23 Expired (279,766 ) 17.38 Exercised (897,657 ) 8.63 4,264 Outstanding at December 31, 2016 5,548,336 11.62 5.58 32,453 Granted 643,000 14.44 Forfeited (290,729 ) 10.73 Expired (605,617 ) 29.87 Exercised (575,206 ) 9.13 3,140 Outstanding at December 31, 2017 4,719,784 10.03 5.63 24,421 Exercisable at December 31, 2017 3,540,804 9.35 4.73 20,715 Vested and expected to vest at December 31, 2017 4,589,591 9.94 5.56 24,129 The weighted average grant-date fair value of options granted was $7.81, $4.53 and $6.59 per share for the years ended December 31, 2017, 2016 and 2015, respectively. Proceeds from the exercise of stock options amounted to $5.3 million, $7.8 million and $4.4 million for the years ended December 31, 2017, 2016 and 2015, respectively. Restricted Stock Units 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 under the Plans with service conditions (service RSUs) that vest in four equal annual installments provided that the employee remains employed with the Company. As of December 31, 2017, $12.1 million of unrecognized compensation costs related to unvested service RSUs are expected to be recognized over a weighted average period of 1.7 years. No RSUs are classified as a liability as of December 31, 2017. The following is a summary of RSU activity for the 2006 Plan and the 2016 Plan for the years ended December 31, 2017, 2016, and 2015: Number of Weighted Shares Average Underlying Grant Date RSUs RSUs Fair Value Unvested at December 31, 2014 1,025,961 $ 9.94 Granted 417,000 11.51 Forfeited (189,187 ) 10.60 Vested (231,093 ) 7.96 Unvested at December 31, 2015 1,022,681 10.90 Granted 657,742 8.71 Forfeited (254,329 ) 10.38 Vested (287,666 ) 9.65 Unvested at December 31, 2016 1,138,428 10.07 Granted 857,336 14.57 Forfeited (275,613 ) 11.41 Vested (362,313 ) 9.78 Unvested at December 31, 2017 1,357,838 12.72 The grant date fair value for the 362,313 shares underlying RSUs that vested during the year ended December 31, 2017 was $3.5 million. Stock-Based Compensation Expense Stock-based compensation expense recognized for the years ended December 31, 2017, 2016 and 2015 was allocated as follows: Year Ended December 31, (in thousands) 2017 2016 2015 Research and development $ 1,152 $ 2,087 $ 2,269 Selling, general and administrative 9,313 6,456 5,692 $ 10,465 $ 8,543 $ 7,961 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 years ended December 31, 2017, 2016 and 2015 were as follows: Year Ended December 31, 2017 2016 2015 Expected dividend yield 0 % 0 % 0 % Weighted average expected volatility 57 % 57 % 60 % Weighted average expected term (years) 5.89 6.08 6.00 Weighted average risk-free rate 1.97 % 1.37 % 1.67 %

Employee Benefit Plan

Employee Benefit Plan	12 Months Ended
	Dec. 31, 2017
Employee Benefit Plan	15. Employee Benefit Plan The Company has a defined contribution plan under IRC Section 401(k). This plan covers substantially all employees who meet minimum age and service requirements and allows participants to defer a portion of their annual compensation on a pre-tax

Legal Matters

Legal Matters	12 Months Ended
	Dec. 31, 2017
Legal Matters	16. 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 (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 (‘610 Patent) by submitting to the FDA an Abbreviated New Drug Application (ANDA) for a generic version of Fanapt ® ® five-day In 2015, the Company filed six separate patent infringement lawsuits in the Delaware District Court against Roxane, Inventia Healthcare Pvt. Ltd. (Inventia), Lupin Ltd. and Lupin Pharmaceuticals, Inc. (Lupin), Taro Pharmaceuticals USA, Inc. and Taro Pharmaceutical Industries, Ltd. (Taro), 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 (‘432 Patent) by submitting to the FDA an ANDA for a generic version of Fanapt ® Lupin filed counter claims for declaratory judgment of invalidity and noninfringement of seven of the Company’s method of treatment patents that are listed in the Approved Drug Products with Therapeutic Equivalence Evaluations ® On October 24, 2016, the Company entered into a License Agreement with Taro to resolve the Company’s patent litigation against Taro regarding Taro’s ANDA seeking approval of its generic version of Fanapt ® non-exclusive ® ® On December 7, 2016, the Company entered into a License Agreement with Apotex to resolve the Company’s patent litigation against Apotex regarding Apotex’s ANDA seeking approval of its generic version of Fanapt ® non-exclusive ® ® On February 26, 2016, Roxane filed suit against the Company in the U.S. District Court for the Southern District of Ohio (Ohio District Court). The suit sought 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 to transfer the lawsuit to the Delaware District Court. On December 20, 2016, the Ohio District Court ruled in the Company’s favor, dismissing Roxane’s suit without prejudice for lack of personal jurisdiction. On February 26, 2016, Roxane filed a Petition for Inter Partes

Quarterly Financial Data (Unaud

Quarterly Financial Data (Unaudited)	12 Months Ended
	Dec. 31, 2017
Quarterly Financial Data (Unaudited)	17. Quarterly Financial Data (Unaudited) The following is a summary of quarterly financial data for the years ended December 31, 2017 and 2016: First Second Third Fourth (in thousands, except for per share amounts) Quarter Quarter Quarter Quarter Year Ended December 31, 2017 Revenues $ 37,415 $ 42,056 $ 41,336 $ 44,276 Gross profit (1) 32,958 37,095 36,379 39,053 Loss from operations (7,906 ) (1,924 ) (4,923 ) (2,150 ) Net loss (7,645 ) (1,534 ) (4,550 ) (1,838 ) Net loss per share, basic and diluted $ (0.17 ) $ (0.03 ) $ (0.10 ) $ (0.04 ) Year Ended December 31, 2016 Revenues $ 33,262 $ 36,029 $ 38,482 $ 38,244 Gross profit (1) 24,363 26,593 28,549 30,867 Loss from operations (12,475 ) (4,789 ) (653 ) (654 ) Net loss (12,358 ) (4,618 ) (430 ) (604 ) Net loss per share, basic and diluted $ (0.29 ) $ (0.11 ) $ (0.01 ) $ (0.01 ) (1) Gross profit includes revenues less cost of goods sold, excluding amortization, and less intangible asset amortization.

Business Organization and Pre25

Business Organization and Presentation (Policies)	12 Months Ended
	Dec. 31, 2017
Business organization	Business organization Vanda Pharmaceuticals Inc. (the Company) is a global biopharmaceutical company focused on the development and commercialization of innovative 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 ® Non-24-Hour (Non-24), ® Non-24 ® ® Non-24, • Fanapt ® ® ® ® ® • Tradipitant (VLY-686), neurokinin-1 (NK-1R) • VTR-297 • VQW-765 AQW-051), alpha-7 • Portfolio of Cystic Fibrosis Transmembrane Conductance Regulator (CFTR) activators and inhibitors.
Basis of Presentation	Basis of presentation The accompanying consolidated financial statements includes the accounts of Vanda Pharmaceuticals Inc. and its wholly-owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S.). All intercompany accounts and transactions have been eliminated in consolidation.
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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. Management continually re-evaluates
Cash and Cash Equivalents	Cash and Cash Equivalents For purposes of the consolidated balance sheets and consolidated statements of cash flows, cash equivalents represent highly-liquid investments with a maturity date of three months or less at the date of purchase. Cash and cash equivalents includes investments in money market funds with commercial banks and financial institutions, and commercial paper of high-quality corporate issuers. Restricted cash of $0.7 million and $0.8 million relating primarily to leases for office space is included in other current and other non-current
Marketable Securities	Marketable Securities The Company classifies all of its marketable securities as available-for-sale Available-for-sale available-for-sale available-for-sale non-current.
Inventory	Inventory Inventory, which is recorded at the lower of cost or net realizable value, includes the cost of third-party manufacturing and other direct and indirect costs and is valued using the first-in, first-out non-current.
Intangible Assets	Intangible Assets Costs incurred for products not yet approved by the FDA and for which no alternative future use exists are recorded as expense. Obligations for milestone payments to other pharmaceutical companies that may result in a capitalized intangible asset are recognized when it is deemed probable that the milestone event will occur. In the event a product has been approved by the FDA or an alternative future use exists for a product, patent and license costs are capitalized and amortized on a straight-line basis over the estimated useful economic life of the of the related product patents. For intangible assets related to HETLIOZ ® ® ® ®
Property and Equipment	Property and Equipment Property and equipment are stated at cost less accumulated depreciation. The costs of leasehold improvements funded by or reimbursed by the lessor are capitalized and amortized as leasehold improvements along with a corresponding deferred rent liability. Depreciation of most property and equipment is provided on a straight-line basis over the estimated useful lives of the assets. Leasehold improvements are amortized using a straight-line basis over the lesser of the estimated useful lives of the assets or the terms of the related leases. The costs of additions and improvements are capitalized, and repairs and maintenance costs are charged to operations in the period incurred. Upon retirement or disposition of property and equipment, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in the statement of operations for that period.
Accounts Payable and Accrued Liabilities	Accounts Payable and Accrued Liabilities The Company’s management is required to estimate accrued liabilities as part of the process of preparing financial statements. The estimation of accrued liabilities involves identifying services that have been performed on the Company’s behalf, and then estimating the level of service performed and the associated cost incurred for such services as of each balance sheet date in the financial statements. Accrued liabilities include research and development expenses, such as accrued costs under contracts with clinical monitors, data management organizations and investigators in conjunction with clinical trials, fees to contract manufacturers in conjunction with the production of clinical materials, consulting and professional fees, such as lawyers and fees for marketing and other commercialization activities, accrued compensation and employee benefits, such as accrued bonus, royalties payable under licensing agreements, and other accrued fees. Pursuant to management’s assessment of the services that have been performed on clinical trials and other contracts, the Company recognizes these expenses as the services are provided. Such management assessments include, but are not limited to: (i) an evaluation by the project manager of the work that has been completed during the period, (ii) measurement of progress prepared internally and/or provided by the third-party service provider, (iii) analyses of data that justify the progress, and (iv) management’s judgment. In the event that the Company does not identify certain costs that have begun to be incurred or the Company under- or over-estimates the level of services performed or the costs of such services, the Company’s reported expenses for such period would be too low or too high.
Net Product Sales	Net Product Sales The Company’s net product sales consist of sales of HETLIOZ ® ® Year Ended December 31, ( in thousands ) 2017 2016 2015 HETLIOZ ® $ 89,978 $ 71,671 $ 44,302 Fanapt ® 75,105 74,346 65,623 $ 165,083 $ 146,017 $ 109,925 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	Major Customers HETLIOZ ® ® Year Ended December 31, Percent of Net Product Sales 2017 2016 2015 Distributor A 32 % 23 % 14 % Distributor B 15 % 16 % 18 % Distributor C 15 % 16 % 19 % Distributor D 12 % 15 % 17 % Distributor E 11 % 16 % 14 % Distributor F 10 % 1 % 0 % Distributor G — 9 % 12 % The following table presents each major customer that represented more than 10% of accounts receivable, net, as of December 31, 2017 and 2016: December 31, Percent of Accounts Receivable, Net 2017 2016 Distributor A 28 % 22 % Distributor B 18 % 19 % Distributor C 10 % 15 % Distributor D 21 % 25 % Distributor E 8 % 11 %
Product Sales Discounts and Allowances	Product Sales Discounts and Allowances The Company’s product sales are recorded net of applicable discounts, rebates, chargebacks, service fees, co-pay co-pay Prompt-pay: Rebates: Chargebacks: non-profit Medicare Part D Coverage Gap: Service Fees: Co-payment co-payment Co-pay co-pay Product Returns: (in thousands) Balance at December 31, 2014 $ 85 Additions 986 Credits/payments (12 ) Balance at December 31, 2015 1,059 Additions 2,507 Credits/payments (486 ) Balance at December 31, 2016 3,080 Additions 5,978 Credits/payments (4,939 ) Balance at December 31, 2017 $ 4,119
Cost of Goods Sold	Cost of Goods Sold Cost of goods sold includes royalties payable, the cost of inventory sold, manufacturing and supply chain costs and product shipping and handling costs related to sales of HETLIOZ ® ®
Research and Development Expenses	Research and Development Expenses Research and development expenses consist primarily of fees for services provided by third parties in connection with the clinical trials, costs of contract manufacturing services, milestone payments, costs of materials used in clinical trials and research and development, costs for regulatory consultants and filings, depreciation of capital resources used to develop products, related facilities costs, and salaries, other employee-related costs and stock-based compensation for research and development personnel. The Company expenses research and development costs as they are incurred for products in the development stage, including manufacturing costs and milestone payments made under license agreements prior to FDA approval. Upon and subsequent to FDA approval, manufacturing and milestone payments related to license agreements are capitalized. Milestone payments are accrued when it is deemed probable that the milestone event will be achieved. Costs related to the acquisition of intellectual property are expensed as incurred if the underlying technology is developed in connection with the Company’s research and development efforts and has no alternative future use.
Selling, General and Administrative Expenses	Selling, General and Administrative Expenses Selling, general and administrative expenses consist of salaries, stock-based compensation, facilities and third party expenses. Selling, general and administrative expenses are associated with the activities of the executive, finance, accounting, information technology, business development, commercial support, trade and distribution, sales, marketing, legal, medical affairs and human resource functions. Additionally, selling, general and administrative expenses included an estimate for the annual Patient Protection and Affordable Care fee.
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 estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.
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 $1.3 million, $1.4 million and $3.4 million for the years ended December 31, 2017, 2016 and 2015, respectively.
Foreign Currency	Foreign Currency The reporting currency of the Company is the U.S. dollar. The functional currency of the Company’s international subsidiaries is the local currency. Assets and liabilities, including inter-company balances for which settlement is anticipated in the foreseeable future, denominated in foreign currencies are translated at exchange rates in effect at the balance sheet date. Foreign currency equity balances are translated at historical rates. Revenues and expenses denominated in foreign currencies are translated at average exchange rates for the respective periods. Foreign currency translation adjustments are recorded in accumulated other comprehensive income. Transactions denominated in currencies other than subsidiaries’ functional currencies are recorded based on exchange rates at the time such transactions arise. Changes in exchange rates with respect to amounts recorded in the consolidated balance sheets related to these items will result in unrealized foreign currency transaction gains and losses based upon period-end
Income Taxes	Income Taxes The Company accounts for income taxes using the asset and liability method. Under the asset and liability method, current income tax expense or benefit is the amount of income taxes expected to be payable or refundable for the current year. A deferred income tax asset or liability is recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credits and loss carryforwards. 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. Tax rate changes are reflected in income during the period such changes are enacted. Changes in ownership may limit the amount of NOL carryforwards that can be utilized in the future to offset taxable income.
Non-Cash Investing and Financing Activities	Non-Cash Purchases of property and equipment accrued in current liabilities amounted to zero, $0.2 million and $0.2 million for each of the years ended December 31, 2017, 2016 and 2015, respectively. The acquisition of an intangible asset relating to HETLIOZ ® non-current
Certain Risks and Uncertainties	Certain Risks and Uncertainties The Company’s products under development require approval from the FDA or other international regulatory agencies prior to commercial sales. There can be no assurance the products will receive the necessary clearance. If the Company is denied clearance or clearance is delayed, it may have a material adverse impact on the Company. The Company’s products are concentrated in rapidly-changing, highly-competitive markets, which are characterized by rapid technological advances, changes in customer requirements and evolving regulatory requirements and industry standards. Any failure by the Company to anticipate or to respond adequately to technological developments in its industry, changes in customer requirements or changes in regulatory requirements or industry standards or any significant delays in the development or introduction of products or services could have a material adverse effect on the Company’s business, operating results and future cash flows. The Company depends on single source suppliers for critical raw materials for manufacturing, as well as other components required for the administration of its products. The loss of these suppliers could delay the clinical trials or prevent or delay commercialization of the products.
Concentrations of Credit Risk	Concentrations of Credit Risk Financial instruments, which potentially subject the Company to significant concentrations of credit risk, consist primarily of cash, cash equivalents and marketable securities. The Company places its cash, cash equivalents and marketable securities with highly-rated financial institutions. At December 31, 2017, the Company maintained all of its cash, cash equivalents and marketable securities in three financial institutions. Deposits held with these institutions may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed upon demand, and the Company believes there is minimal risk of losses on such balances.
Segment and Geographic Information	Segment and Geographic Information The Company operates in one reporting segment and, accordingly, no segment disclosures are presented herein. Foreign sales were not material for each of the years ended December 31, 2017, 2016 and 2015.
Recent Accounting Pronouncements	Recent Accounting Pronouncements In November 2016, the FASB issued Accounting Standards Update (ASU) 2016-18, Restricted Cash beginning-of-period end-of-period In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows – Classification of Certain Cash Receipts and Cash Payments In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting paid-in In February 2016, the FASB issued ASU 2016-02, Leases right-of-use In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers 2015-14, Revenue from Contracts with Customers 2016-08 Revenue from Contracts with Customers, Principal versus Agent Considerations (Reporting Revenue versus Net) 2016-10, Revenue from Contracts with Customers, identifying Performance Obligations and Licensing 2016-12, Revenue from Contracts with Customers, Narrow-Scope Improvements and Practical Expedients 2014-09. 2016-08, 2016-10, 2016-12 2014-09 2015-14.

Summary of Significant Accoun26

Summary of Significant Accounting Policies (Tables)	12 Months Ended
	Dec. 31, 2017
Net Sales by Product	The Company’s net product sales consist of sales of HETLIOZ ® ® Year Ended December 31, ( in thousands ) 2017 2016 2015 HETLIOZ ® $ 89,978 $ 71,671 $ 44,302 Fanapt ® 75,105 74,346 65,623 $ 165,083 $ 146,017 $ 109,925
Schedule of Major Customers that Represented More Than 10% of Total Revenues	The following table presents each major customer that represented more than 10% of total revenues for the years ended December 31, 2017, 2016 and 2015: Year Ended December 31, Percent of Net Product Sales 2017 2016 2015 Distributor A 32 % 23 % 14 % Distributor B 15 % 16 % 18 % Distributor C 15 % 16 % 19 % Distributor D 12 % 15 % 17 % Distributor E 11 % 16 % 14 % Distributor F 10 % 1 % 0 % Distributor G — 9 % 12 %
Schedule of Major Customers that Represented More Than 10% of Accounts Receivable, Net	The following table presents each major customer that represented more than 10% of accounts receivable, net, as of December 31, 2017 and 2016: December 31, Percent of Accounts Receivable, Net 2017 2016 Distributor A 28 % 22 % Distributor B 18 % 19 % Distributor C 10 % 15 % Distributor D 21 % 25 % Distributor E 8 % 11 %
Summary of Product Return Allowance	The following table summarizes activity for product returns as of and for the years ended December 31, 2017, 2016 and 2015: (in thousands) Balance at December 31, 2014 $ 85 Additions 986 Credits/payments (12 ) Balance at December 31, 2015 1,059 Additions 2,507 Credits/payments (486 ) Balance at December 31, 2016 3,080 Additions 5,978 Credits/payments (4,939 ) Balance at December 31, 2017 $ 4,119

Earnings per Share (Tables)

Earnings per Share (Tables)	12 Months Ended
	Dec. 31, 2017
Basic and Diluted Net Income (Loss) Per Share of Common Stock	The following table presents the calculation of basic and diluted net income (loss) per share of common stock for the years ended December 31, 2017, 2016, and 2015: Year Ended December 31, (in thousands, except for share and per share amounts) 2017 2016 2015 Numerator: Net loss $ (15,567 ) $ (18,010 ) $ (39,865 ) Denominator: Weighted average shares outstanding, basic and diluted 44,735,146 43,449,441 42,250,254 Net loss per share, basic and diluted: Basic $ (0.35 ) $ (0.41 ) $ (0.94 ) Diluted $ (0.35 ) $ (0.41 ) $ (0.94 ) Antidilutive securities excluded from calculations of diluted net income (loss) per share 3,136,515 4,943,797 5,660,199

Marketable Securities (Tables)

Marketable Securities (Tables)	12 Months Ended
	Dec. 31, 2017
Summary of Available-for-Sale Marketable Securities	The following is a summary of the Company’s available-for-sale Gross Gross Fair December 31, 2017 Amortized Unrealized Unrealized Market (in thousands) Cost Gains Losses Value U.S. Treasury and government agencies $ 60,681 $ — $ (63 ) $ 60,618 Corporate debt 49,168 12 (12 ) 49,168 $ 109,849 $ 12 $ (75 ) $ 109,786 The following is a summary of the Company’s available-for-sale Gross Gross Fair December 31, 2016 Amortized Unrealized Unrealized Market (in thousands) Cost Gains Losses Value U.S. Treasury and government agencies $ 50,661 $ 3 $ (17 ) $ 50,647 Corporate debt 50,194 89 (16 ) 50,267 $ 100,855 $ 92 $ (33 ) $ 100,914

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	12 Months Ended
	Dec. 31, 2017
Assets Measured at Fair Value on Recurring Basis	The Company held certain assets that are required to be measured at fair value on a recurring basis as of December 31, 2017, as follows: Fair Value Measurement as of December 31, 2017 Using Quoted Prices in Significant Active Markets for Significant Other Unobservable December 31, Identical Assets Observable Inputs Inputs (in thousands) 2017 (Level 1) (Level 2) (Level 3) U.S. Treasury and government agencies 60,618 60,618 — — Corporate debt 53,164 — 53,164 — $ 113,782 $ 60,618 $ 53,164 $ — The Company held certain assets that are required to be measured at fair value on a recurring basis as of December 31, 2016, as follows: Fair Value Measurement as of December 31, 2016 Using Quoted Prices in Significant Active Markets for Significant Other Unobservable December 31, Identical Assets Observable Inputs Inputs (in thousands) 2016 (Level 1) (Level 2) (Level 3) U.S. Treasury and government agencies $ 50,647 $ 50,647 $ — $ — Corporate debt 50,267 — 50,267 — $ 100,914 $ 50,647 $ 50,267 $ —

Inventory (Tables)

Inventory (Tables)	12 Months Ended
	Dec. 31, 2017
Inventory	Inventory consisted of the following as of December 31, 2017 and 2016: December 31, December 31, (in thousands) 2017 2016 Current assets Work-in-process $ 80 $ 17 Finished goods 760 762 $ 840 $ 779 Non-Current Raw materials $ 87 $ 127 Work-in-process 2,821 2,225 Finished goods 408 83 $ 3,316 $ 2,435

Prepaid Expenses and Other Cu31

Prepaid Expenses and Other Current Assets (Tables)	12 Months Ended
	Dec. 31, 2017
Summary of Prepaid Expenses, and Other Current Assets	The following is a summary of the Company’s prepaid expenses and other current assets as of December 31, 2017 and 2016: December 31, December 31, (in thousands) 2017 2016 Research and development expenses $ 2,415 $ 2,397 Consulting and other professional fees 2,876 6,051 Prepaid royalties — 1,761 Other 2,712 1,579 $ 8,003 $ 11,788

Property and Equipment (Tables)

Property and Equipment (Tables)	12 Months Ended
	Dec. 31, 2017
Summary of Property and Equipment-at Cost	The following is a summary of the Company’s property and equipment, at cost, as of December 31, 2017 and 2016: Estimated Useful Life December 31, (in thousands) (Years) 2017 2016 Computer and other equipment 3 $ 3,342 $ 2,426 Furniture and fixtures 5 - 7 1,929 1,412 Leasehold improvements 5 - 11 4,515 4,408 9,786 8,246 Accumulated depreciation and amortization (4,480 ) (3,231 ) $ 5,306 $ 5,015

Intangible Assets (Tables)

Intangible Assets (Tables)	12 Months Ended
	Dec. 31, 2017
Summary of Intangible Assets	The following is a summary of the Company’s intangible assets as of December 31, 2017: December 31, 2017 Estimated Gross Net Useful Life Carrying Accumulated Carrying (in thousands) (Years) Amount Amortization Amount HETLIOZ ® May 2034 $ 33,000 $ 6,931 $ 26,069 Fanapt ® November 2016 27,941 27,941 — $ 60,941 $ 34,872 $ 26,069 The following is a summary of the Company’s intangible assets as of December 31, 2016: December 31, 2016 Estimated Gross Net Useful Life Carrying Accumulated Carrying (in thousands) (Years) Amount Amortization Amount HETLIOZ ® January 2033 $ 33,000 $ 5,181 $ 27,819 Fanapt ® November 2016 27,941 27,941 — $ 60,941 $ 33,122 $ 27,819
Summary of Amortization Expense	Amortization expense for the years ended December 31, 2017, 2016 and 2015 was as follows: Year Ended December 31, (in thousands) 2017 2016 2015 HETLIOZ ® $ 1,750 $ 1,721 $ 2,922 Fanapt ® — 9,212 10,050 $ 1,750 $ 10,933 $ 12,972
Summary of Future Intangible Asset Amortization	The following is a summary of the future intangible asset amortization schedule as of December 31, 2017: (in thousands) Total 2018 2019 2020 2021 2022 Thereafter HETLIOZ ® $ 26,069 $ 1,545 $ 1,591 $ 1,591 $ 1,591 $ 1,591 $ 18,160

Accounts Payable and Accrued 34

Accounts Payable and Accrued Liabilities (Tables)	12 Months Ended
	Dec. 31, 2017
Summary of Accounts Payable and Accrued Liabilities	The following is a summary of the Company’s accounts payable and accrued liabilities as of December 31, 2017 and 2016: December 31, December 31, (in thousands) 2017 2016 Research and development expenses $ 4,663 $ 3,024 Consulting and other professional fees 3,961 3,192 Compensation and employee benefits 5,323 4,291 Royalties payable 4,394 4,555 Other 1,994 1,134 $ 20,335 $ 16,196

Commitments and Contingencies (

Commitments and Contingencies (Tables)	12 Months Ended
	Dec. 31, 2017
Summary of Minimum Annual Future Payments under Operating Leases and Subleases	The following is a summary of the minimum annual future payments under operating leases and subleases for office space as of December 31, 2017: Cash payments due by year (in thousands) Total 2018 2019 2020 2021 2022 Thereafter Operating leases $ 19,789 $ 2,311 $ 2,295 $ 2,351 $ 2,174 $ 2,187 $ 8,471

Income Taxes (Tables)

Income Taxes (Tables)	12 Months Ended
	Dec. 31, 2017
Summary of Provision (Benefit) for Income Taxes	The following is a summary of the provision (benefit) for income taxes for the years ended December 31, 2017, 2016 and 2015: Year Ended December 31, (in thousands) 2017 2016 2015 Current: Federal $ — $ — $ — State 65 66 — Foreign (66 ) 142 Deferred: Federal — — — State — — Foreign 137 (104 ) — Provision for income taxes $ 136 $ 104 $ —
Reconciliation Between Statutory Tax Rate and Effective Tax Rate	The following is reconciliation between the federal statutory tax rate and the Company’s effective tax rate for the years ended December 31, 2017, 2016 and 2015: Year Ended December 31, 2017 2016 2015 Federal tax at statutory rate 35.0 % 35.0 % 35.0 % State taxes 1.7 % 0.8 % -0.1 % The U.S. Tax Cuts and Job Act (1) -262.6 % 0.0 % 0.0 % Change in valuation allowance - U.S. Tax Cuts and Jobs Act 262.6 % 0.0 % 0.0 % Other change in valuation allowance -47.8 % -38.4 % -25.4 % Research and development credit 9.0 % 3.8 % 1.5 % Orphan drug credit 6.3 % 7.6 % 1.6 % Section 162(m) limitation 8.1 % 0.0 % -5.7 % Other tax rate changes -2.6 % 3.9 % -0.3 % Change in state NOLs 5.1 % 0.0 % -1.4 % Stock-based compensation -13.0 % -12.5 % -5.1 % Other items -2.7 % -0.8 % -0.1 % Effective tax rate -0.9 % -0.6 % 0.0 % (1) The effective tax rate for the year ended December 31, 2017 includes the estimate of the effect of the U.S. Tax Cuts and Jobs Act, which primarily relates to the remeasurement of existing deferred taxes as a result of the change to the U.S. federal tax rate.
Components of Deferred Tax Assets, Net, and Related Valuation Allowance	The following is a summary of the components of the Company’s deferred tax assets, net, and the related tax valuation allowance as of December 31, 2017 and 2016: December 31, (in thousands) 2017 2016 Deferred tax assets: Net operating loss carryforwards $ 59,222 $ 84,177 Stock-based compensation 5,383 12,443 Accrued and deferred expenses 1,967 2,558 Research and development and orphan drug credit carryforwards 43,976 41,104 Intangible assets 3,745 5,477 Other 2,174 1,019 Total deferred tax assets 116,467 146,778 Deferred tax liabilities: Other (386 ) (666 ) Total deferred tax liabilities (386 ) (666 ) Deferred tax assets, net 116,081 146,112 Valuation allowance 116,110 146,012 Net deferred tax assets (liabilities) $ (29 ) $ 100
Summary of Changes in Tax Valuation Allowance	The following is a summary of changes in the Company’s tax valuation allowance for the years ended December 31, 2017, 2016 and 2015: Balance at Balance at Beginning End of (in thousands) of Year Additions Reductions Year Year Ended: December 31, 2017 $ 146,012 $ 12,403 $ (42,305 ) $ 116,110 December 31, 2016 139,037 11,031 (4,056 ) 146,012 December 31, 2015 128,890 17,002 (6,855 ) 139,037

Accumulated Other Comprehensi37

Accumulated Other Comprehensive Income (Loss) (Tables)	12 Months Ended
	Dec. 31, 2017
Summary of Accumulated Balances Related to Each Component of Other Comprehensive Income (Loss)	The accumulated balances related to each component of other comprehensive income (loss) were as follows for the years ended December 31, 2017 and 2016: December 31, December 31, (in thousands) 2017 2016 Foreign currency translation $ 29 $ (1 ) Available-for-sale (63 ) 59 $ (34 ) $ 58

Equity Incentive Plans (Tables)

Equity Incentive Plans (Tables)	12 Months Ended
	Dec. 31, 2017
Summary of RSU Activity for 2006 Plan and 2016 Plan	The following is a summary of RSU activity for the 2006 Plan and the 2016 Plan for the years ended December 31, 2017, 2016, and 2015: Number of Weighted Shares Average Underlying Grant Date RSUs RSUs Fair Value Unvested at December 31, 2014 1,025,961 $ 9.94 Granted 417,000 11.51 Forfeited (189,187 ) 10.60 Vested (231,093 ) 7.96 Unvested at December 31, 2015 1,022,681 10.90 Granted 657,742 8.71 Forfeited (254,329 ) 10.38 Vested (287,666 ) 9.65 Unvested at December 31, 2016 1,138,428 10.07 Granted 857,336 14.57 Forfeited (275,613 ) 11.41 Vested (362,313 ) 9.78 Unvested at December 31, 2017 1,357,838 12.72
Stock-Based Compensation Expense	Stock-based compensation expense recognized for the years ended December 31, 2017, 2016 and 2015 was allocated as follows: Year Ended December 31, (in thousands) 2017 2016 2015 Research and development $ 1,152 $ 2,087 $ 2,269 Selling, general and administrative 9,313 6,456 5,692 $ 10,465 $ 8,543 $ 7,961
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 years ended December 31, 2017, 2016 and 2015 were as follows: Year Ended December 31, 2017 2016 2015 Expected dividend yield 0 % 0 % 0 % Weighted average expected volatility 57 % 57 % 60 % Weighted average expected term (years) 5.89 6.08 6.00 Weighted average risk-free rate 1.97 % 1.37 % 1.67 %
2004 Plan
Summary of Option Activity Plan	The following is a summary of option activity for the 2004 Plan for the year ended December 31, 2015: Weighted Average Weighted Average Aggregate 2004 Plan Number of Exercise Price at Remaining Term Intrinsic (in thousands, except for share and per share amounts) Shares Grant Date (Years) Value Outstanding at December 31, 2014 652,810 $ 1.74 0.78 $ 8,212 Exercised (652,810 ) 1.74 6,129 Outstanding at December 31, 2015 —
2006 Plan and 2016 Plan
Summary of Option Activity Plan	The following is a summary of option activity for the 2006 Plan and the 2016 Plan for the years ended December 31, 2017, 2016, and 2015: Weighted Average Weighted Average Aggregate 2006 and 2016 Plans Number of Exercise Price at Remaining Term Intrinsic (in thousands, except for share and per share amounts) Shares Grant Date (Years) Value Outstanding at December 31, 2014 6,227,112 $ 11.58 6.71 $ 28,523 Granted 1,056,500 11.74 Forfeited (496,854 ) 10.75 Expired (64,336 ) 25.69 Exercised (469,974 ) 7.02 2,594 Outstanding at December 31, 2015 6,252,448 11.87 6.16 7,498 Granted 866,011 8.43 Forfeited (392,700 ) 11.23 Expired (279,766 ) 17.38 Exercised (897,657 ) 8.63 4,264 Outstanding at December 31, 2016 5,548,336 11.62 5.58 32,453 Granted 643,000 14.44 Forfeited (290,729 ) 10.73 Expired (605,617 ) 29.87 Exercised (575,206 ) 9.13 3,140 Outstanding at December 31, 2017 4,719,784 10.03 5.63 24,421 Exercisable at December 31, 2017 3,540,804 9.35 4.73 20,715 Vested and expected to vest at December 31, 2017 4,589,591 9.94 5.56 24,129

Quarterly Financial Data (Una39

Quarterly Financial Data (Unaudited) (Tables)	12 Months Ended
	Dec. 31, 2017
Quarterly Financial Data	The following is a summary of quarterly financial data for the years ended December 31, 2017 and 2016: First Second Third Fourth (in thousands, except for per share amounts) Quarter Quarter Quarter Quarter Year Ended December 31, 2017 Revenues $ 37,415 $ 42,056 $ 41,336 $ 44,276 Gross profit (1) 32,958 37,095 36,379 39,053 Loss from operations (7,906 ) (1,924 ) (4,923 ) (2,150 ) Net loss (7,645 ) (1,534 ) (4,550 ) (1,838 ) Net loss per share, basic and diluted $ (0.17 ) $ (0.03 ) $ (0.10 ) $ (0.04 ) Year Ended December 31, 2016 Revenues $ 33,262 $ 36,029 $ 38,482 $ 38,244 Gross profit (1) 24,363 26,593 28,549 30,867 Loss from operations (12,475 ) (4,789 ) (653 ) (654 ) Net loss (12,358 ) (4,618 ) (430 ) (604 ) Net loss per share, basic and diluted $ (0.29 ) $ (0.11 ) $ (0.01 ) $ (0.01 ) (1) Gross profit includes revenues less cost of goods sold, excluding amortization, and less intangible asset amortization.

Business Organization and Pre40

Business Organization and Presentation - Additional Information (Detail)	12 Months Ended
	Dec. 31, 2017Segment
Organization and Summary of Significant Accounting Policies Disclosure [Line Items]
Number of operating segments	1

Summary of Significant Accoun41

Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Summary Of Significant Accounting Policies [Line Items]
Restricted cash, current and non-current	$ 0.7	$ 0.8
Percentage of insurance coverage gap allocated for prescription drugs under Medicare Part D	50.00%
Advertising expenses	$ 1.3	1.4	$ 3.4
Purchases of property, plant and equipment and the related current liability	0	0.2	0.2
Acquisition of intangible asset accrued in non-current liabilities			25
Other Income
Summary Of Significant Accounting Policies [Line Items]
Foreign currency transaction gains and losses	$ 0.1	$ (0.2)	$ 0

Net Sales by Product (Detail)

Net Sales by Product (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Revenue from External Customer [Line Items]
Net product sales	$ 165,083	$ 146,017	$ 109,925
HETLIOZ
Revenue from External Customer [Line Items]
Net product sales	89,978	71,671	44,302
Fanapt
Revenue from External Customer [Line Items]
Net product sales	$ 75,105	$ 74,346	$ 65,623

Schedule of Major Customers tha

Schedule of Major Customers that Represented More Than 10% of Total Revenues (Detail) - Customer Concentration Risk - Sales Revenue, Net	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Distributor A
Revenue, Major Customer [Line Items]
Concentration Risk, Percentage	32.00%	23.00%	14.00%
Distributor B
Revenue, Major Customer [Line Items]
Concentration Risk, Percentage	15.00%	16.00%	18.00%
Distributor C
Revenue, Major Customer [Line Items]
Concentration Risk, Percentage	15.00%	16.00%	19.00%
Distributor D
Revenue, Major Customer [Line Items]
Concentration Risk, Percentage	12.00%	15.00%	17.00%
Distributor E
Revenue, Major Customer [Line Items]
Concentration Risk, Percentage	11.00%	16.00%	14.00%
Distributor F
Revenue, Major Customer [Line Items]
Concentration Risk, Percentage	10.00%	1.00%	0.00%
Distributor G
Revenue, Major Customer [Line Items]
Concentration Risk, Percentage		9.00%	12.00%

Schedule of Major Customers t44

Schedule of Major Customers that Represented More Than 10% of Accounts Receivable, Net (Detail) - Credit Concentration Risk - Accounts Receivable	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Distributor A
Concentration Risk [Line Items]
Concentration Risk, Percentage	28.00%	22.00%
Distributor B
Concentration Risk [Line Items]
Concentration Risk, Percentage	18.00%	19.00%
Distributor C
Concentration Risk [Line Items]
Concentration Risk, Percentage	10.00%	15.00%
Distributor D
Concentration Risk [Line Items]
Concentration Risk, Percentage	21.00%	25.00%
Distributor E
Concentration Risk [Line Items]
Concentration Risk, Percentage	8.00%	11.00%

Summary of Product Return Allow

Summary of Product Return Allowance (Detail) - Product Return Allowance - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Valuation and Qualifying Accounts Disclosure [Line Items]
Beginning balance	$ 3,080	$ 1,059	$ 85
Additions	5,978	2,507	986
Credits/payments	(4,939)	(486)	(12)
Ending balance	$ 4,119	$ 3,080	$ 1,059

Basic and Diluted Net Income (L

Basic and Diluted Net Income (Loss) Per Share of Common Stock (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Numerator:
Net loss	$ (1,838)	$ (4,550)	$ (1,534)	$ (7,645)	$ (604)	$ (430)	$ (4,618)	$ (12,358)	$ (15,567)	$ (18,010)	$ (39,865)
Denominator:
Weighted average shares outstanding, basic and diluted									44,735,146	43,449,441	42,250,254
Net loss per share, basic and diluted:
Basic									$ (0.35)	$ (0.41)	$ (0.94)
Diluted									$ (0.35)	$ (0.41)	$ (0.94)
Antidilutive securities excluded from calculations of diluted net income (loss) per share									3,136,515	4,943,797	5,660,199

Summary of Available-For-Sale M

Summary of Available-For-Sale Marketable Securities (Detail) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Schedule of Available-for-sale Securities [Line Items]
Fair Market Value	$ 109,786	$ 100,914
Current Investment
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	109,849	100,855
Gross Unrealized Gains	12	92
Gross Unrealized Losses	(75)	(33)
Fair Market Value	109,786	100,914
Current Investment | U.S. Treasury and government agencies
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	60,681	50,661
Gross Unrealized Gains		3
Gross Unrealized Losses	(63)	(17)
Fair Market Value	60,618	50,647
Current Investment | Corporate debt
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	49,168	50,194
Gross Unrealized Gains	12	89
Gross Unrealized Losses	(12)	(16)
Fair Market Value	$ 49,168	$ 50,267

Assets Measured at Fair Value o

Assets Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	$ 113,782	$ 100,914
U.S. Treasury and government agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	60,618	50,647
Corporate debt
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	53,164	50,267
Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	60,618	50,647
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]
Assets measured at fair value	60,618	50,647
Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	53,164	50,267
Significant Other Observable Inputs (Level 2) | Corporate debt
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	$ 53,164	$ 50,267

Fair Value Measurements - Addit

Fair Value Measurements - Additional Information (Detail) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	$ 113,782	$ 100,914
Cash Equivalents
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	$ 4,000

Inventory (Detail)

Inventory (Detail) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Current assets
Work-in-process	$ 80	$ 17
Finished goods	760	762
Total	840	779
Non-Current assets
Raw materials	87	127
Work-in-process	2,821	2,225
Finished goods	408	83
Total	$ 3,316	$ 2,435

Summary of Prepaid Expenses and

Summary of Prepaid Expenses and Other Current Assets (Detail) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Prepaid Expenses And Other Current Assets [Line Items]
Research and development expenses	$ 2,415	$ 2,397
Consulting and other professional fees	2,876	6,051
Prepaid royalties		1,761
Other	2,712	1,579
Prepaid expenses and other current assets	$ 8,003	$ 11,788

Summary of Property and Equipme

Summary of Property and Equipment-at Cost (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 9,786	$ 8,246
Accumulated depreciation and amortization	(4,480)	(3,231)
Property and equipment, net	$ 5,306	5,015
Computer and Other Equipment
Property, Plant and Equipment [Line Items]
Estimated Useful Life (Years)	3 years
Property and equipment, gross	$ 3,342	2,426
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 1,929	1,412
Furniture and fixtures | Minimum
Property, Plant and Equipment [Line Items]
Estimated Useful Life (Years)	5 years
Furniture and fixtures | Maximum
Property, Plant and Equipment [Line Items]
Estimated Useful Life (Years)	7 years
Leasehold improvements
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 4,515	$ 4,408
Leasehold improvements | Minimum
Property, Plant and Equipment [Line Items]
Estimated Useful Life (Years)	5 years
Leasehold improvements | Maximum
Property, Plant and Equipment [Line Items]
Estimated Useful Life (Years)	11 years

Property and Equipment - Additi

Property and Equipment - Additional Information (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Property, Plant and Equipment [Line Items]
Depreciation expense	$ 1,234	$ 935	$ 582

Intangible Assets (Textual 2 -

Intangible Assets (Textual 2 - HETLIOZ) - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2017	Dec. 31, 2016
Finite-Lived Intangible Assets [Line Items]
Milestone obligation under license agreement			$ 27,000
Milestone obligation under license agreement, non-current				$ 25,000
HETLIOZ
Finite-Lived Intangible Assets [Line Items]
Acquisition of intangible assets		$ 8,000
Intangible assets, estimated future useful life			2034-05	2033-01
Cumulative worldwide sales milestone			$ 250,000
Milestone obligation under license agreement			25,000
Milestone obligation under license agreement, non-current				$ 25,000
Intangible assets capitalized	$ 25,000		$ 25,000

Intangible Assets (Textual 3 -

Intangible Assets (Textual 3 - Fanapt) - Additional Information (Detail) - Fanapt - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2009	Dec. 31, 2014
Finite-Lived Intangible Assets [Line Items]
Acquisition of intangible assets			$ 12
Intangible assets, estimated useful life	2016-11	2016-11
Assets acquired and recorded at fair value, Intangible re-acquired right				$ 15.9

Summary of Intangible Assets (D

Summary of Intangible Assets (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 60,941	$ 60,941
Accumulated Amortization	34,872	33,122
Net Carrying Amount	$ 26,069	$ 27,819
HETLIOZ
Finite-Lived Intangible Assets [Line Items]
Intangible assets, estimated future useful life	2034-05	2033-01
Gross Carrying Amount	$ 33,000	$ 33,000
Accumulated Amortization	6,931	5,181
Net Carrying Amount	$ 26,069	$ 27,819
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	$ 27,941	$ 27,941

Summary of Amortization Expense

Summary of Amortization Expense (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Finite-Lived Intangible Assets [Line Items]
Intangible asset amortization	$ 1,750	$ 10,933	$ 12,972
HETLIOZ
Finite-Lived Intangible Assets [Line Items]
Intangible asset amortization	$ 1,750	1,721	2,922
Fanapt
Finite-Lived Intangible Assets [Line Items]
Intangible asset amortization		$ 9,212	$ 10,050

Summary of Future Intangible As

Summary of Future Intangible Asset Amortization (Detail) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Finite-Lived Intangible Assets [Line Items]
Total	$ 26,069	$ 27,819
HETLIOZ
Finite-Lived Intangible Assets [Line Items]
Total	26,069	$ 27,819
2,018	1,545
2,019	1,591
2,020	1,591
2,021	1,591
2,022	1,591
Thereafter	$ 18,160

Summary of Accounts Payable and

Summary of Accounts Payable and Accrued Liabilities (Detail) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Accounts Payable and Accrued Liabilities [Line Items]
Research and development expenses	$ 4,663	$ 3,024
Consulting and other professional fees	3,961	3,192
Compensation and employee benefits	5,323	4,291
Royalties payable	4,394	4,555
Other	1,994	1,134
Accounts payable and accrued liabilities	$ 20,335	$ 16,196

Commitments and Contingencies -

Commitments and Contingencies - Additional Information (Detail) $ in Millions	12 Months Ended
	Dec. 31, 2017USD ($)ft²	Dec. 31, 2016USD ($)	Dec. 31, 2015USD ($)	Dec. 31, 2011ft²
Commitments and Contingencies Disclosure [Line Items]
Rent expense | $	$ 3.2	$ 2.5	$ 1.9
Washington DC Leases and Sublease
Commitments and Contingencies Disclosure [Line Items]
Leased square footage	40,188			21,400
Expiration date of leases for office space	2,026
Washington DC Leases and Sublease | Sublease
Commitments and Contingencies Disclosure [Line Items]
Leased square footage	9,928
Washington DC Lease Amendment
Commitments and Contingencies Disclosure [Line Items]
Leased square footage	30,260
Renewal term of lease agreement	5 years
London Lease
Commitments and Contingencies Disclosure [Line Items]
Leased square footage	2,880
Noncancellable lease term ending date	2,021
Berlin Lease
Commitments and Contingencies Disclosure [Line Items]
Leased square footage	1,249

Summary of Minimum Annual Futur

Summary of Minimum Annual Future Payments Under Operating Leases and Subleases for Office Space (Detail) $ in Thousands	Dec. 31, 2017USD ($)
Operating Leased Assets [Line Items]
Operating leases, Total	$ 19,789
Operating leases, 2018	2,311
Operating leases, 2019	2,295
Operating leases, 2020	2,351
Operating leases, 2021	2,174
Operating leases, 2022	2,187
Operating leases, Thereafter	$ 8,471

Commitments and Contingencies62

Commitments and Contingencies (Textual 2 - HETLIOZ) - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended		12 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2017
HETLIOZ
Percentage of future sublicense fees payable to third-party			Mid-twenties
HETLIOZ
HETLIOZ
Acquisition of intangible assets		$ 8
Milestone obligation under license agreement			$ 25
Royalty payable percentage on net sales			10.00%
Cumulative worldwide sales milestone			$ 250
Intangible assets capitalized	$ 25		$ 25

Commitments and Contingencies63

Commitments and Contingencies (Textual 3 - Fanapt) - Additional Information (Detail) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Fanapt
Prepaid royalty		$ 1,761,000
Royalty Rate for Annual Sales up to $200 million through November 2016
Fanapt
Royalty percentage payable on net sales below annual threshold		23.00%
Royalty Rate for Annual Sales up to $200 million through November 2016 | Maximum
Fanapt
Agreed upon sales threshold level for royalty rate		$ 200,000,000
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
Royalty Rate for Annual Sales in Excess of $200 million through November 2016 | Maximum
Fanapt
Agreed upon sales threshold level for royalty rate		$ 200,000,000
November 16,2016 through December 31,2019
Fanapt
Royalty payable percentage on net sales		3.00%
Prepaid royalty		$ 2,000,000
Fanapt
Fanapt
Royalty payable percentage on net sales	6.00%
Royalty payment period	10 years

Commitments and Contingencies64

Commitments and Contingencies (Textual 4 - Tradipitant) - Additional Information (Detail) $ in Thousands	12 Months Ended
	Dec. 31, 2017USD ($)
Commitments and Contingencies [Line Items]
Milestone obligation under license agreement	$ 27,000
Tradipitant
Commitments and Contingencies [Line Items]
Future percentage of royalty payments based net sales	Low double digits
Possible future milestone payment	$ 4,000
Milestone obligation under license agreement	2,000
Tradipitant | Research and development
Commitments and Contingencies [Line Items]
Milestone obligation under license agreement	2,000
Tradipitant | Development and Milestone Payments of Phase III Study Potentially Due to Third Party
Commitments and Contingencies [Line Items]
Possible future milestone payment	2,000
Tradipitant | Development and Milestone Payment for First Marketing Authorization Potentially Due to Third Party
Commitments and Contingencies [Line Items]
Possible future milestone payment	2,000
Tradipitant | Future Regulatory Approval and Sales Milestones
Commitments and Contingencies [Line Items]
Possible future milestone payment	$ 95,000

Commitments and Contingencies65

Commitments and Contingencies (Textual 5 - CFTR Activators and Inhibitors - Additional Information (Detail) - CFTR Activators and Inhibitors - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2017	Dec. 31, 2017
CFTR activators and inhibitors
Milestone payment under license agreement	$ 1
Possible future milestone payments		$ 46
Tiered royalties payable on future net sales		Single-digit

Income Taxes - Additional Infor

Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Income Taxes [Line Items]
Provision for income taxes		$ 136	$ 104
Income (loss) before income taxes		(15,431)	(17,906)	$ (39,865)
Pretax loss in U.S		(15,700)	(18,100)
Pretax income from foreign subsidiaries		300	200
Income tax benefit associated with the loss before income taxes		0	0	$ 0
Net deferred tax assets			100
Net deferred tax liability		29
Net operating loss carryforwards		59,222	$ 84,177
Deferred tax assets related to U.S. federal research and development credits		$ 9,000
Net operating loss carryforwards beginning expiration year		2,028
U.S. research and development credit beginning expiration year		2,024
Orphan drug credit beginning expiration year		2,030
Federal tax at statutory rate		35.00%	35.00%	35.00%
Percentage at which certain U.S. federal deferred tax assets and liabilities remeasured		21.00%
U.S. Federal
Income Taxes [Line Items]
Net operating loss carryforwards		$ 49,000
Orphan Drug
Income Taxes [Line Items]
Net deferred tax assets		$ 35,000
Scenario, Forecast
Income Taxes [Line Items]
Federal tax at statutory rate	21.00%
District of Columbia
Income Taxes [Line Items]
Net operating loss carryforwards beginning expiration year		2,031
Deferred tax assets relating to U.S. state NOL carryforwards		$ 10,000
Other States
Income Taxes [Line Items]
Net operating loss carryforwards beginning expiration year		2,018
Non-current inventory and other
Income Taxes [Line Items]
Net deferred tax assets			$ 100
Other Non-current Liabilities | Maximum
Income Taxes [Line Items]
Net deferred tax liability		$ 100

Summary of Provision (Benefit)

Summary of Provision (Benefit) for Income Taxes (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Current:
Federal	$ 0	$ 0	$ 0
State	65	66
Foreign	(66)	142
Deferred:
Federal	0	0	0
State	0	0	$ 0
Foreign	137	(104)
Provision for income taxes	$ 136	$ 104

Reconciliation Between Statutor

Reconciliation Between Statutory Tax Rate and Effective Tax Rate (Detail)		12 Months Ended
		Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Income Tax Rate Reconciliation [Line Items]
Federal tax at statutory rate		35.00%	35.00%	35.00%
State taxes		1.70%	0.80%	(0.10%)
The U.S. Tax Cuts and Job Act	[1]	(262.60%)	0.00%	0.00%
Change in valuation allowance - U.S. Tax Cuts and Jobs Act		262.60%	0.00%	0.00%
Other change in valuation allowance		(47.80%)	(38.40%)	(25.40%)
Research and development credit		9.00%	3.80%	1.50%
Orphan drug credit		6.30%	7.60%	1.60%
Section 162(m) limitation		8.10%	0.00%	(5.70%)
Other tax rate changes		(2.60%)	3.90%	(0.30%)
Change in state NOLs		5.10%	0.00%	(1.40%)
Stock-based compensation		(13.00%)	(12.50%)	(5.10%)
Other items		(2.70%)	(0.80%)	(0.10%)
Effective tax rate		(0.90%)	(0.60%)	0.00%
[1]	The effective tax rate for the year ended December 31, 2017 includes the estimate of the effect of the U.S. Tax Cuts and Jobs Act, which primarily relates to the remeasurement of existing deferred taxes as a result of the change to the U.S. federal tax rate.

Components of Deferred Tax Asse

Components of Deferred Tax Assets, Net and Related Valuation Allowance (Detail) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Deferred tax assets:
Net operating loss carryforwards	$ 59,222	$ 84,177
Stock-based compensation	5,383	12,443
Accrued and deferred expenses	1,967	2,558
Research and development and orphan drug credit carryforwards	43,976	41,104
Intangible assets	3,745	5,477
Other	2,174	1,019
Total deferred tax assets	116,467	146,778
Deferred tax liabilities:
Other	(386)	666
Total deferred tax liabilities	(386)	(666)
Deferred tax assets, net	116,081	146,112
Valuation allowance	116,110	146,012	$ 139,037	$ 128,890
Net deferred tax liabilities	$ (29)
Net deferred tax assets		$ 100

Valuation Allowance Activity on

Valuation Allowance Activity on Deferred Tax Assets (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Valuation Allowance [Line Items]
Balance at Beginning of Year	$ 146,012	$ 139,037	$ 128,890
Additions	12,403	11,031	17,002
Reductions	(42,305)	(4,056)	(6,855)
Balance at End of Year	$ 116,110	$ 146,012	$ 139,037

Summary of Accumulated Balances

Summary of Accumulated Balances Related to Each Component of Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Accumulated Other Comprehensive Income (Loss) [Line Items]
Foreign currency translation	$ 29	$ (1)
Available-for-sale securities	(63)	59
Accumulated other comprehensive income (loss)	$ (34)	$ 58

Accumulated Other Comprehensi72

Accumulated Other Comprehensive Income (Loss) - Additional Information (Detail) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Reclassification Out of Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income (Loss) [Line Items]
Reclassifications out of accumulated other comprehensive income (loss)	$ 0	$ 0	$ 0

Equity Incentive Plans (Textual

Equity Incentive Plans (Textual 1 - Equity Incentive Plans) - Additional Information (Detail) - shares	12 Months Ended
	Dec. 31, 2017	Jun. 30, 2016
2006 Plan and 2016 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	6,077,622
2016 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares of common stock reserved for issuance	4,700,000	2,000,000
Number of shares of common stock available for future grant	3,168,565
2016 Plan Amendment
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares of common stock reserved for issuance	2,700,000

Equity Incentive Plans (Textu74

Equity Incentive Plans (Textual 2 Stock Option) - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 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	$ 5,251	$ 7,751	$ 4,374
Options granted, weighted average fair value per share	$ 7.81	$ 4.53	$ 6.59
Service option awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expenses	$ 7,300
Unrecognized compensation expenses, weighted average period	1 year 2 months 12 days

Summary of Option Activity for

Summary of Option Activity for 2004 Plan (Detail) - 2004 Plan - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Number of Shares
Beginning balance	652,810
Exercised	(652,810)
Weighted Average Remaining Term (Years)
Weighted Average Remaining Term		9 months 11 days
Ending balance		652,810
Aggregate Intrinsic Value
Beginning balance		$ 8,212
Exercised	$ 6,129
Weighted Average Exercise Price at Grant Date
Beginning balance		$ 1.74
Exercised	$ 1.74

Summary of Option Activity fo76

Summary of Option Activity for 2006 Plan and the 2016 Plan (Detail) - 2006 Plan and 2016 Plan - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Number of Shares
Beginning balance	5,548,336	6,252,448	6,227,112
Granted	643,000	866,011	1,056,500
Forfeited	(290,729)	(392,700)	(496,854)
Expired	(605,617)	(279,766)	(64,336)
Exercised	(575,206)	(897,657)	(469,974)
Ending balance	4,719,784	5,548,336	6,252,448	6,227,112
Exercisable	3,540,804
Vested and expected to vest at December 31, 2017	4,589,591
Weighted Average Exercise Price at Grant Date
Beginning balance	$ 11.62	$ 11.87	$ 11.58
Granted	14.44	8.43	11.74
Forfeited	10.73	11.23	10.75
Expired	29.87	17.38	25.69
Exercised	9.13	8.63	7.02
Ending balance	10.03	$ 11.62	$ 11.87	$ 11.58
Exercisable	9.35
Vested and expected to vest at December 31, 2017	$ 9.94
Weighted Average Remaining Term (Years)
Weighted Average Remaining Term	5 years 7 months 17 days	5 years 6 months 29 days	6 years 1 month 27 days	6 years 8 months 16 days
Exercisable	4 years 8 months 23 days
Vested and expected to vest at December 31, 2017	5 years 6 months 21 days
Aggregate Intrinsic Value
Beginning balance	$ 32,453	$ 7,498	$ 28,523
Exercised	3,140	4,264	2,594
Ending balance	24,421	$ 32,453	$ 7,498	$ 28,523
Exercisable	20,715
Vested and expected to vest at December 31, 2017	$ 24,129

Equity Incentive Plans (Textu77

Equity Incentive Plans (Textual 3 RSU) - Additional Information (Detail) - Restricted Stock Units (RSU) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
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	1 year 8 months 12 days
Unrecognized compensation expenses related to unvested RSUs	$ 12.1
Grant date fair value of common stock vested, shares	362,313	287,666	231,093
Grant date fair value of common stock vested	$ 3.5

Summary of RSU Activity Plan (D

Summary of RSU Activity Plan (Detail) - Restricted Stock Units (RSU) - $ / shares	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Number of Shares Unvested
Beginning balance	1,138,428	1,022,681	1,025,961
Granted	857,336	657,742	417,000
Forfeited	(275,613)	(254,329)	(189,187)
Vested	(362,313)	(287,666)	(231,093)
Ending balance	1,357,838	1,138,428	1,022,681
Weighted Average Price/Share Unvested
Beginning balance	$ 10.07	$ 10.90	$ 9.94
Granted	14.57	8.71	11.51
Forfeited	11.41	10.38	10.60
Vested	9.78	9.65	7.96
Ending balance	$ 12.72	$ 10.07	$ 10.90

Total Stock-Based Compensation

Total Stock-Based Compensation Expense (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	$ 10,465	$ 8,543	$ 7,961
Research and development
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	1,152	2,087	2,269
Selling, general and administrative
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	$ 9,313	$ 6,456	$ 5,692

Black-Scholes-Merton Option Pri

Black-Scholes-Merton Option Pricing Model for Stock Options Granted (Detail)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Share Based Payment Award Stock Options Valuation Assumptions [Line Items]
Expected dividend yield	0.00%	0.00%	0.00%
Weighted average expected volatility	57.00%	57.00%	60.00%
Weighted average expected term (years)	5 years 10 months 21 days	6 years 29 days	6 years
Weighted average risk-free rate	1.97%	1.37%	1.67%

Employee Benefit Plan - Additio

Employee Benefit Plan - Additional Information (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Employee Benefit Plans [Line Items]
Defined contribution plan employer matching percent	50.00%
Defined contribution plan maximum employee contribution percent	6.00%
Defined contribution plan vesting period	4 years
Defined contribution plan matching amount	$ 0.8	$ 0.4	$ 0.3

Quarterly Financial Data (Detai

Quarterly Financial Data (Detail) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended								12 Months Ended
		Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Quarterly Financial Data [Line Items]
Revenues		$ 44,276	$ 41,336	$ 42,056	$ 37,415	$ 38,244	$ 38,482	$ 36,029	$ 33,262	$ 165,083	$ 146,017	$ 109,925
Gross profit	[1]	39,053	36,379	37,095	32,958	30,867	28,549	26,593	24,363
Loss from operations		(2,150)	(4,923)	(1,924)	(7,906)	(654)	(653)	(4,789)	(12,475)	(16,903)	(18,571)	(40,185)
Net loss		$ (1,838)	$ (4,550)	$ (1,534)	$ (7,645)	$ (604)	$ (430)	$ (4,618)	$ (12,358)	$ (15,567)	$ (18,010)	$ (39,865)
Net loss per share, basic and diluted		$ (0.04)	$ (0.10)	$ (0.03)	$ (0.17)	$ (0.01)	$ (0.01)	$ (0.11)	$ (0.29)
[1]	Gross profit includes revenues less cost of goods sold, excluding amortization, and less intangible asset amortization.