Vanda Pharmaceuticals (VNDA) 10-Q 7 Nov 19 2019 Q3 Quarterly report Financial data

Cover Page

Cover Page - $ / shares	9 Months Ended
	Sep. 30, 2019	Oct. 31, 2019	Dec. 31, 2018
Cover page.
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2019
Document Transition Report	false
Entity File Number	001-34186
Entity Registrant Name	VANDA PHARMACEUTICALS INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	03-0491827
Entity Address, Address Line One	2200 Pennsylvania Avenue, N.W.,
Entity Address, Address Line Two	Suite 300 E
Entity Address, City or Town	Washington,
Entity Address, State or Province	DC
Entity Address, Postal Zip Code	20037
City Area Code	202
Local Phone Number	734-3400
Title of 12(b) Security	Common Stock, par value $0.001 per share
Trading Symbol	VNDA
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		53,337,085
Entity Central Index Key	0001347178
Current Fiscal Year End Date	--12-31
Common stock, par value (in dollars per share)	$ 0.001		$ 0.001
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
Amendment Flag	false

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 39,208	$ 61,005
Marketable securities	198,577	196,355
Accounts receivable, net	26,824	28,780
Inventory	1,019	994
Prepaid expenses and other current assets	14,382	11,998
Total current assets	280,010	299,132
Marketable securities, non-current	61,827	0
Property and equipment, net	4,156	4,417
Operating lease right-of-use assets	11,436	0
Intangible assets, net	23,407	24,542
Deferred tax assets	89,072	0
Non-current inventory and other	4,541	4,039
Total assets	474,449	332,130
Current liabilities:
Accounts payable and accrued liabilities	26,992	21,584
Product revenue allowances	33,004	31,231
Milestone obligations under license agreements	0	200
Total current liabilities	59,996	53,015
Operating lease non-current liabilities	12,793	0
Other non-current liabilities	753	3,693
Total liabilities	73,542	56,708
Commitments and contingencies (Notes 9 and 15)
Stockholders’ equity:
Preferred stock, $0.001 par value; 20,000,000 shares authorized, and no shares issued or outstanding at September 30, 2019 and December 31, 2018	0	0
Common stock, $0.001 par value; 150,000,000 shares authorized; 53,333,211 and 52,477,593 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively	53	52
Additional paid-in capital	625,524	611,587
Accumulated other comprehensive income	211	1
Accumulated deficit	(224,881)	(336,218)
Total stockholders’ equity	400,907	275,422
Total liabilities and stockholders’ equity	$ 474,449	$ 332,130

CONDENSED CONSOLIDATED BALANC_2

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares	Sep. 30, 2019	Dec. 31, 2018
Statement of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	20,000,000	20,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	150,000,000	150,000,000
Common stock, shares issued (in shares)	53,333,211	52,477,593
Common stock, shares outstanding (in shares)	53,333,211	52,477,593

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Revenues:
Net product sales	$ 59,485	$ 49,135	$ 166,258	$ 140,077
Total revenues	59,485	49,135	166,258	140,077
Operating expenses:
Cost of goods sold excluding amortization	6,782	5,068	18,263	14,841
Research and development	11,347	11,390	35,575	30,672
Selling, general and administrative	30,221	26,047	92,718	80,829
Intangible asset amortization	376	397	1,135	1,147
Total operating expenses	48,726	42,902	147,691	127,489
Income from operations	10,759	6,233	18,567	12,588
Other income	1,517	1,030	4,651	2,440
Income before income taxes	12,276	7,263	23,218	15,028
Provision (benefit) for income taxes	(88,147)	92	(88,119)	180
Net income	$ 100,423	$ 7,171	$ 111,337	$ 14,848
Net income per share:
Basic (in dollars per share)	$ 1.88	$ 0.14	$ 2.10	$ 0.30
Diluted (in dollars per share)	$ 1.84	$ 0.13	$ 2.03	$ 0.28
Weighted average shares outstanding:
Basic (in shares)	53,297,298	52,389,012	53,052,521	50,321,640
Diluted (in shares)	54,541,625	54,709,749	54,803,851	52,315,642

CONDENSED CONSOLIDATED STATEM_2

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Statement of Comprehensive Income [Abstract]
Net income	$ 100,423	$ 7,171	$ 111,337	$ 14,848
Other comprehensive income (loss):
Net foreign currency translation loss	(19)	(2)	(17)	(15)
Change in net unrealized gain (loss) on marketable securities	(89)	(7)	294	119
Tax provision on other comprehensive income (loss)	(67)	0	(67)	0
Other comprehensive income (loss), net of tax	(175)	(9)	210	104
Comprehensive income	$ 100,248	$ 7,162	$ 111,547	$ 14,952

CONDENSED CONSOLIDATED STATEM_3

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited) - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Other Comprehensive Income	Accumulated Deficit
Beginning balance (in shares) at Dec. 31, 2017		44,938,133
Beginning balance at Dec. 31, 2017	$ 131,387	$ 45	$ 492,802	$ (34)	$ (361,426)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net proceeds from public offering of common stock (in shares)		6,325,000
Net proceeds from public offering of common stock	100,868	$ 6	100,862
Issuance of common stock form the exercise of stock options and settlement of restricted stock units (in shares)		846,568
Issuance of common stock from the exercise of stock options and settlement of restricted stock units	2,666	$ 1	2,665
Stock-based compensation expense	3,151		3,151
Net income (loss)	3,066				3,066
Other comprehensive income (loss), net of tax	6			6
Ending balance (in shares) at Mar. 31, 2018		52,109,701
Ending balance at Mar. 31, 2018	241,144	$ 52	599,480	(28)	(358,360)
Beginning balance (in shares) at Dec. 31, 2017		44,938,133
Beginning balance at Dec. 31, 2017	131,387	$ 45	492,802	(34)	(361,426)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	14,848
Other comprehensive income (loss), net of tax	104
Ending balance (in shares) at Sep. 30, 2018		52,400,709
Ending balance at Sep. 30, 2018	261,417	$ 52	607,873	70	(346,578)
Beginning balance (in shares) at Mar. 31, 2018		52,109,701
Beginning balance at Mar. 31, 2018	241,144	$ 52	599,480	(28)	(358,360)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net proceeds from public offering of common stock (in shares)		0
Net proceeds from public offering of common stock	2	$ 0	2
Issuance of common stock form the exercise of stock options and settlement of restricted stock units (in shares)		266,244
Issuance of common stock from the exercise of stock options and settlement of restricted stock units	2,686	$ 0	2,686
Stock-based compensation expense	2,721		2,721
Net income (loss)	4,611				4,611
Other comprehensive income (loss), net of tax	107			107
Ending balance (in shares) at Jun. 30, 2018		52,375,945
Ending balance at Jun. 30, 2018	251,271	$ 52	604,889	79	(353,749)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock form the exercise of stock options and settlement of restricted stock units (in shares)		24,764
Issuance of common stock from the exercise of stock options and settlement of restricted stock units	112		112
Stock-based compensation expense	2,872		2,872
Net income (loss)	7,171				7,171
Other comprehensive income (loss), net of tax	(9)			(9)
Ending balance (in shares) at Sep. 30, 2018		52,400,709
Ending balance at Sep. 30, 2018	$ 261,417	$ 52	607,873	70	(346,578)
Beginning balance (in shares) at Dec. 31, 2018	52,477,593	52,477,593
Beginning balance at Dec. 31, 2018	$ 275,422	$ 52	611,587	1	(336,218)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock form the exercise of stock options and settlement of restricted stock units (in shares)		485,083
Issuance of common stock from the exercise of stock options and settlement of restricted stock units	179	$ 1	178
Stock-based compensation expense	3,282		3,282
Net income (loss)	(612)				(612)
Other comprehensive income (loss), net of tax	134			134
Ending balance (in shares) at Mar. 31, 2019		52,962,676
Ending balance at Mar. 31, 2019	$ 278,405	$ 53	615,047	135	(336,830)
Beginning balance (in shares) at Dec. 31, 2018	52,477,593	52,477,593
Beginning balance at Dec. 31, 2018	$ 275,422	$ 52	611,587	1	(336,218)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	111,337
Other comprehensive income (loss), net of tax	$ 210
Ending balance (in shares) at Sep. 30, 2019	53,333,211	53,333,211
Ending balance at Sep. 30, 2019	$ 400,907	$ 53	625,524	211	(224,881)
Beginning balance (in shares) at Mar. 31, 2019		52,962,676
Beginning balance at Mar. 31, 2019	278,405	$ 53	615,047	135	(336,830)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock form the exercise of stock options and settlement of restricted stock units (in shares)		302,108
Issuance of common stock from the exercise of stock options and settlement of restricted stock units	3,411	$ 0	3,411
Stock-based compensation expense	3,101		3,101
Net income (loss)	11,526				11,526
Other comprehensive income (loss), net of tax	251			251
Ending balance (in shares) at Jun. 30, 2019		53,264,784
Ending balance at Jun. 30, 2019	296,694	$ 53	621,559	386	(325,304)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock form the exercise of stock options and settlement of restricted stock units (in shares)		68,427
Issuance of common stock from the exercise of stock options and settlement of restricted stock units	558	$ 0	558
Stock-based compensation expense	3,407		3,407
Net income (loss)	100,423				100,423
Other comprehensive income (loss), net of tax	$ (175)			(175)
Ending balance (in shares) at Sep. 30, 2019	53,333,211	53,333,211
Ending balance at Sep. 30, 2019	$ 400,907	$ 53	$ 625,524	$ 211	$ (224,881)

CONDENSED CONSOLIDATED STATEM_4

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Cash flows from operating activities
Net income	$ 111,337	$ 14,848
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property and equipment	1,022	1,057
Stock-based compensation	9,790	8,744
Amortization of discounts on marketable securities	(2,627)	(1,386)
Intangible asset amortization	1,135	1,147
Deferred income taxes	(89,155)	0
Other non-cash adjustments, net	1,517	153
Changes in operating assets and liabilities:
Accounts receivable	1,914	(7,686)
Prepaid expenses and other assets	(2,956)	(3,936)
Inventory	(896)	215
Accounts payable and other liabilities	3,191	(3,182)
Product revenue allowances	1,884	4,749
Net cash provided by operating activities	36,156	14,723
Cash flows from investing activities
Acquisition of intangible asset	0	(25,000)
Purchases of property and equipment	(951)	(346)
Purchases of marketable securities	(291,333)	(201,940)
Maturities of marketable securities	230,205	133,430
Net cash used in investing activities	(62,079)	(93,856)
Cash flows from financing activities
Net proceeds from offering of common stock	0	100,870
Proceeds from the exercise of stock options	4,148	5,464
Net cash provided by financing activities	4,148	106,334
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(24)	(14)
Net change in cash, cash equivalents and restricted cash	(21,799)	27,187
Cash, cash equivalents and restricted cash
Beginning of period	61,749	34,335
End of period	$ 39,950	$ 61,522

Business Organization and Prese

Business Organization and Presentation	9 Months Ended
	Sep. 30, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Business Organization and Presentation	Business Organization and Presentation Business organization Vanda Pharmaceuticals Inc. (the Company) is a leading 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 ® (tasimelteon), a product for the treatment of non-24-hour sleep-wake disorder (Non-24), was approved by the U.S. Food and Drug Administration (FDA) in January 2014 and launched commercially in the U.S. in April 2014. In July 2015, the European Commission (EC) granted centralized marketing authorization with unified labeling for HETLIOZ ® for the treatment of Non-24 in totally blind adults. HETLIOZ ® was commercially launched in Germany in August 2016. HETLIOZ ® has potential utility in a number of other circadian rhythm disorders and is presently in clinical development for the treatment of Jet Lag Disorder, Smith-Magenis Syndrome (SMS) and pediatric Non-24. An assessment of new HETLIOZ ® clinical opportunities, including the treatment of delayed sleep phase disorder and for sleep disorders in patients with neurodevelopmental disorders, is ongoing. • Fanapt ® (iloperidone), a product for the treatment of schizophrenia, the oral formulation of which was approved by the FDA in May 2009 and launched commercially in the U.S. by Novartis Pharma AG (Novartis) in January 2010. Novartis transferred all the U.S. and Canadian commercial rights to the Fanapt ® franchise to the Company on December 31, 2014. Additionally, the Company's distribution partners launched Fanapt ® in Israel in 2014. Fanapt ® has potential utility in a number of other disorders. Initial clinical work studying a long acting injectable (LAI) formulation of Fanapt ® began in 2018. An assessment of new Fanapt ® clinical opportunities, including the treatment of bipolar disorder, is ongoing. • Tradipitant (VLY-686), a small molecule neurokinin-1 receptor (NK-1R) antagonist, which is presently in clinical development for the treatment of chronic pruritus in atopic dermatitis, gastroparesis and motion sickness. • VTR-297, a small molecule histone deacetylase (HDAC) inhibitor presently in clinical development for the treatment of hematologic malignancies. • Portfolio of Cystic Fibrosis Transmembrane Conductance Regulator (CFTR) activators and inhibitors. An early stage CFTR activator program is planned for the treatment of dry eye and ocular inflammation. In addition, an early stage CFTR inhibitor program is planned for the treatment of secretory diarrhea disorders, including cholera. • VQW-765, a Phase II alpha-7 nicotinic acetylcholine receptor partial agonist. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the Company’s consolidated financial statements and accompanying notes included in the Company's annual report on Form 10-K for the fiscal year ended December 31, 2018 . The financial information as of September 30, 2019 and for the three and nine months ended September 30, 2019 and 2018 is unaudited, but in the opinion of management, all adjustments considered necessary for a fair statement of the results for these interim periods have been included. All intercompany accounts and transactions have been eliminated in consolidation. The condensed consolidated balance sheet data as of December 31, 2018

Summary of Significant Accounti

Summary of Significant Accounting Policies	9 Months Ended
	Sep. 30, 2019
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	Summary of Significant Accounting Policies With the exception of the adoption of Accounting Standards Update (ASU) No. 2016-02, Leases and all related amendments (collectively, Accounting Standards Codification (ASC) 842) on January 1, 2019, discussed below, there have been no material changes to the significant accounting policies previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates that affect the reported amounts of assets and liabilities at the date of the financial statements, disclosure of contingent assets and liabilities, and the reported amounts of revenue and expenses during the reporting period. Management continually re-evaluates its estimates, judgments and assumptions, and management’s evaluation could change. Actual results could differ from those estimates. Leases In accordance with ASC 842, Leases , effective January 1, 2019, the Company determines if an arrangement contains a lease at inception. Right-of-use (ROU) assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from that lease. For leases with a term greater than 12 months, ROU assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. The lease term includes the option to extend the lease when it is reasonably certain the Company will exercise that option. When available, the Company uses the rate implicit in the lease to discount lease payments to present value. In the case the implicit rate is not available, the Company uses its incremental borrowing rate based on information available at the lease commencement date, including publicly available data for instruments with similar characteristics, to determine the present value of lease payments. The Company does not combine lease and non-lease elements for office leases. For existing leases as of January 1, 2019, executory costs are excluded from lease expense, which is consistent with the Company's accounting under ASC 840, Leases . For all leases entered into after January 1, 2019, executory costs are allocated between lease and non-lease elements based upon their relative stand-alone prices. Revenue from Net Product Sales The Company’s revenues consist of net product sales of HETLIOZ ® and net product sales of Fanapt ® . Net sales by product for the three and nine months ended September 30, 2019 and 2018 were as follows: Three Months Ended Nine Months Ended (in thousands) September 30, September 30, September 30, September 30, HETLIOZ ® product sales, net $ 37,589 $ 29,923 $ 104,381 $ 83,391 Fanapt ® product sales, net 21,896 19,212 61,877 56,686 Total net product sales $ 59,485 $ 49,135 $ 166,258 $ 140,077 Major Customers HETLIOZ ® is available in the U.S. for distribution through a limited number of specialty pharmacies, and is not available in retail pharmacies. Fanapt ® is available in the U.S. for distribution through a limited number of wholesalers and is available in retail pharmacies. The Company invoices and records revenue when its customers, specialty pharmacies and wholesalers, receive product from the third-party logistics warehouse which is the point at which control is transferred to the customer. There were five major customers that each accounted for more than 10% of total revenues and, as a group, represented 96% of total revenues for the nine months ended September 30, 2019 . There were five major customers that each accounted for more than 10% of accounts receivable and, as a group, represented 93% of total accounts receivable at September 30, 2019 . The Company evaluates outstanding receivables to assess collectability. In performing this evaluation, the Company analyzes economic conditions, the aging of receivables and customer specific risks. Using this information, the Company reserves an amount that it estimates may not be collected. Supplemental Cash Flows Information Cash, Cash Equivalents and Restricted Cash For purposes of the Condensed Consolidated Balance Sheets and Condensed 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 include investments in money market funds with commercial banks and financial institutions, and commercial paper of high-quality corporate issuers. Restricted cash relates primarily to amounts held as collateral for letters of credit for leases for office space at the Company’s Washington, D.C. headquarters. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Condensed Consolidated Balance Sheets to the total end of period cash, cash equivalents and restricted cash reported within the Condensed Consolidated Statement of Cash Flows: (in thousands) September 30, September 30, Cash and cash equivalents $ 39,208 $ 60,778 Restricted cash included in: Prepaid expenses and other current assets 157 157 Non-current inventory and other 585 587 Total cash, cash equivalents and restricted cash $ 39,950 $ 61,522 Recent Accounting Pronouncements In August 2018, the U.S. Securities and Exchange Commission (SEC) adopted the final rule under SEC Release No. 33-10532, Disclosure Update and Simplification. This final rule amends certain disclosure requirements that are redundant, duplicative, overlapping, outdated or superseded. In addition, the amendments expand the disclosure requirements on the analysis of stockholders' equity for interim financial statements. Under the amendments, an analysis of changes in each caption of stockholders' equity presented in the balance sheet must be provided in a note or separate statement. The analysis should present a reconciliation of the beginning balance to the ending balance of each period for which a statement of comprehensive income is required to be filed. This final rule is effective for the Company for all filings made on or after November 5, 2018. The SEC staff clarified that the first presentation of the changes in shareholders' equity may be included in the first Form 10-Q for the quarter that begins after the effective date of the amendments. The adoption of the final rule did not have a material impact on the Company’s condensed consolidated financial statements. The Company updated the disclosure of its Condensed Consolidated Statements of Changes in Stockholders' Equity in 2019 to include a reconciliation for the quarter-to-date and year-to-date comparative periods. In June 2016, the Financial Accounting Standards Board (FASB) issued ASU 2016-13, Financial Instruments – Credit Losses, which changes the impairment model for most financial assets and certain other financial instruments. The standard will require the use of a forward-looking “expected loss” model for instruments measured at amortized cost that generally will result in the earlier recognition of allowances for losses. The standard is effective for years beginning after December 15, 2019, and interim periods within annual periods beginning after December 15, 2019. The Company is evaluating this standard to determine if adoption will have a material impact on the Company’s accounts receivable and marketable securities balances and related financial statement disclosures. In February 2016, the FASB issued ASU 2016-2, Leases (Topic 842) , which was further clarified by ASU 2018-10, Codification Improvements to Topic 842, Leases , and ASU 2018-11, Leases - Targeted Improvements , issued in July 2018. ASC 842 supersedes existing lease guidance, including ASC 840 Leases . The new leasing standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The new leasing standard requires that lessees will need to recognize an ROU asset and a lease liability for virtually all of their leases, and allows companies to make a policy election as to whether short term leases will be recognized under the requirements of the new standard. The Company elected to exclude short-term leases in the application of the new standard. The lease liability is equal to the present value of lease payments. The ROU asset is based on the liability subject to certain adjustments. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance. Operating leases will result in straight-line expense, similar to accounting for operating leases under ASC 840, while finance leases will result in a front-loaded expense pattern, similar to accounting for capital leases under ASC 840. The Company adopted the new leasing standard in the first quarter of 2019, using a modified retrospective transition. There was no impact to the opening balance of retained earnings as of the effective date of January 1, 2019 as a result of adoption. Prior period financial statements were not recast. The Company elected the package of transition provisions available for expired or existing contracts, which allowed it to carryforward its historical assessments of (1) whether contracts are or contain leases, (2) lease classification and (3) initial direct costs. The adoption of the new leasing standard on January 1, 2019 resulted in the recognition of $15.8 million of operating lease liabilities, $2.2 million of which were classified as current liabilities, with corresponding ROU assets of $12.2 million

Marketable Securities

Marketable Securities	9 Months Ended
	Sep. 30, 2019
Investments, Debt and Equity Securities [Abstract]
Marketable Securities	Marketable Securities The following is a summary of the Company’s available-for-sale marketable securities as of September 30, 2019 : September 30, 2019 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Market Value (in thousands) Current: U.S. Treasury and government agencies $ 72,767 $ 83 $ (4 ) $ 72,846 Corporate debt 110,119 176 — 110,295 Asset-backed securities 15,410 28 (2 ) 15,436 Total marketable securities, current $ 198,296 $ 287 $ (6 ) $ 198,577 Non-current: U.S. Treasury and government agencies $ 14,499 $ — $ (20 ) $ 14,479 Corporate debt 15,852 28 (2 ) 15,878 Asset-backed securities 31,469 15 (14 ) 31,470 Total marketable securities, non-current 61,820 43 (36 ) 61,827 Total marketable securities $ 260,116 $ 330 $ (42 ) $ 260,404 Current marketable securities have a remaining maturity of less than one year. Non-current marketable securities have a remaining maturity of between one and two years. The following is a summary of the Company’s available-for-sale marketable securities as of December 31, 2018 , which all have contract maturities of less than one year: December 31, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Market Value (in thousands) Current: U.S. Treasury and government agencies $ 69,275 $ 12 $ (17 ) $ 69,270 Corporate debt 105,897 38 (25 ) 105,910 Asset-backed securities 21,189 — (14 ) 21,175 Total marketable securities, current $ 196,361 $ 50 $ (56 ) $ 196,355

Fair Value Measurements

Fair Value Measurements	9 Months Ended
	Sep. 30, 2019
Fair Value Disclosures [Abstract]
Fair Value Measurements	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 September 30, 2019 and December 31, 2018 consist of available-for-sale marketable securities. The valuation of Level 1 instruments is determined using a market approach, and is based upon unadjusted quoted prices for identical assets in active markets. The valuation of investments classified in Level 2 is also determined using a market approach based upon quoted prices for similar assets in active markets, or other inputs that are observable for substantially the full term of the financial instrument. Level 2 securities include certificates of deposit, commercial paper, corporate notes and asset-backed securities that use as their basis readily observable market parameters. The Company did not transfer any assets between Level 2 and Level 1 during the nine months ended September 30, 2019 and 2018 . As of September 30, 2019 , the Company held certain assets that are required to be measured at fair value on a recurring basis, as follows: Fair Value Measurement as of September 30, 2019 Using Total Fair Value Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (in thousands) (Level 1) (Level 2) (Level 3) U.S. Treasury and government agencies $ 87,325 $ 87,325 $ — $ — Corporate debt 126,173 — 126,173 — Asset-backed securities 46,906 — 46,906 — Total assets measured at fair value $ 260,404 $ 87,325 $ 173,079 $ — As of December 31, 2018 , the Company held certain assets that are required to be measured at fair value on a recurring basis, as follows: Fair Value Measurement as of December 31, 2018 Using Total Fair Value Quoted Prices in Significant Other Significant (in thousands) (Level 1) (Level 2) (Level 3) U.S. Treasury and government agencies $ 69,270 $ 69,270 $ — $ — Corporate debt 105,910 — 105,910 — Asset-backed securities 21,175 — 21,175 — Total assets measured at fair value $ 196,355 $ 69,270 $ 127,085 $ — 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, accounts receivable, restricted cash, accounts payable and accrued liabilities, product revenue allowances and milestone obligations under license agreements, the carrying values of which materially approximate their fair values.

Inventory

Inventory	9 Months Ended
	Sep. 30, 2019
Inventory Disclosure [Abstract]
Inventory	Inventory The Company evaluates expiry risk by evaluating current and future product demand relative to product shelf life. The Company builds demand forecasts by considering factors such as, but not limited to, overall market potential, market share, market acceptance and patient usage. Inventory levels are evaluated for the amount of inventory that would be sold within one year. At certain times, the level of inventory can exceed the forecasted level of cost of goods sold for the next twelve months. The Company classifies the estimate of such inventory as non-current. Inventory consisted of the following as of September 30, 2019 and December 31, 2018 : (in thousands) September 30, December 31, Current: Work-in-process $ — $ 48 Finished goods 1,019 946 Total inventory, current $ 1,019 $ 994 Non-Current: Raw materials $ 662 $ 86 Work-in-process 1,131 2,290 Finished goods 1,286 516 Total inventory, non-current 3,079 2,892 Total inventory $ 4,098 $ 3,886

Leases

Leases	9 Months Ended
	Sep. 30, 2019
Leases [Abstract]
Leases	Leases The Company's long-term leases primarily include operating leases and subleases for office space in Washington, D.C. and London, England. The Company recognized ROU assets and lease liabilities related to fixed payments for these long-term operating leases in its Condensed Consolidated Balance Sheet as of September 30, 2019 . The Company also has short-term leases, including office space in Berlin, Germany. In June 2011, the Company entered into an operating lease agreement under which it leases 33,534 square feet of office space for its headquarters at 2200 Pennsylvania Avenue, N.W. in Washington, D.C. Subject to the prior rights of other tenants, the Company has the right to renew the lease for five years following its expiration in July 2028. As of September 30, 2019 , the renewal period has not been included in the lease term. 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 agreement under which it subleases an additional 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. In May 2016, the Company entered into an operating lease agreement under which it leases 2,880 square feet of office space for its European headquarters in London, England. The Company has the right to renew the lease for five years following its expiration in 2021. As of September 30, 2019 , the renewal period has not been included in the lease term. The following is a summary of the Company’s ROU assets and operating lease liabilities as of September 30, 2019 : (in thousands) Classification on the Balance Sheet September 30, 2019 Assets Operating lease assets Operating lease right-of-use assets $ 11,436 Liabilities Operating lease current liabilities Accounts payable and accrued liabilities $ 2,123 Operating lease non-current liabilities Operating lease non-current liabilities 12,793 Total lease liabilities $ 14,916 Weighted average remaining lease term 8.3 Years Weighted average discount rate (1) 8.1 % (1) Upon adoption of the new lease standard, discount rates used for existing leases were established at January 1, 2019. For the three and nine months ended September 30, 2019 , the Company recognized operating lease cost of $0.6 million and $1.7 million , respectively, and short-term operating lease cost of $0.1 million and $0.3 million , respectively. The Company also recognized $0.4 million and $1.0 million , respectively, of expense related to non-lease elements, such as building maintenance services and utilities, and executory costs associated with the operating leases. For existing leases as of January 1, 2019, executory costs are excluded from operating lease expense, which is consistent with the Company's accounting under ASC 840. For all leases entered into after January 1, 2019, executory costs are allocated between lease and non-lease elements based upon their relative stand-alone prices. For the three and nine months ended September 30, 2018 , the Company recognized $0.9 million and $2.7 million of rent expense, respectively, inclusive of lease expense, non-lease elements, and executory costs for short and long-term operating leases. Cash paid for amounts included in the measurement of operating lease liabilities is included in operating cash flows was $1.8 million for the nine months ended September 30, 2019 . The table below reconciles the Company's future cash obligations to operating lease liabilities recorded on the balance sheet as of September 30, 2019 : (in thousands) Operating Leases 2019 $ 633 2020 2,309 2021 2,329 2022 2,355 2023 2,420 Thereafter 10,669 Total minimum lease payments 20,715 Less: amount of lease payments representing interest (5,799 ) Present value of future minimum lease payments 14,916 Less: current obligations under leases (2,123 ) Operating lease non-current liabilities $ 12,793 At December 31, 2018 , future minimum payments under noncancellable operating leases under ASC 840 were as follows: Cash Payments Due by Year (in thousands) Total 2019 2020 2021 2022 2023 Thereafter Operating leases 22,757 2,483 2,495 2,335 2,355 2,420 10,669

Intangible Assets

Intangible Assets	9 Months Ended
	Sep. 30, 2019
Goodwill and Intangible Assets Disclosure [Abstract]
Intangible Assets	Intangible Assets HETLIOZ ® . In January 2014, the Company announced that the FDA had approved the New Drug Application (NDA) for HETLIOZ ® . As a result of this approval, the Company met a milestone under its license agreement with Bristol-Myers Squibb (BMS) that required the Company to make a license payment of $8.0 million to BMS. The $8.0 million is being amortized on a straight-line basis over the estimated economic useful life of the related product patents, the latest of which expires in July 2035 . In April 2018, the Company met its final milestone under its license agreement when cumulative worldwide sales of HETLIOZ ® reached $250.0 million . As a result of the achievement of this milestone, the Company made a payment to BMS of $25.0 million in the second quarter of 2018. The $25.0 million was determined to be additional consideration for the acquisition of the HETLIOZ ® intangible asset and is being amortized on a straight-line basis over the estimated economic useful life of the related product patents, the latest of which expires in July 2035 . The estimated economic useful life of both the $8.0 million and the $25.0 million intangible assets were changed from February 2035 to July 2035 based on the July 2035 expiration date of U.S. patent number 10,376,487 ('487 Patent) issued by the U.S. Patent and Trademark Office in August 2019. The estimated economic useful life of these intangible assets were previously changed from May 2034 to February 2035 based on the February 2035 expiration date of U.S. patent number 10,071,977 ('977 Patent) issued by the U.S. Patent and Trademark Office in September 2018. The following is a summary of the Company’s intangible assets as of September 30, 2019 : September 30, 2019 (in thousands) Estimated Useful Life (Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount HETLIOZ ® July 2035 $ 33,000 $ 9,593 $ 23,407 The following is a summary of the Company’s intangible assets as of December 31, 2018 : December 31, 2018 (in thousands) Estimated Useful Life (Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount HETLIOZ ® February 2035 $ 33,000 $ 8,458 $ 24,542 As of September 30, 2019 and December 31, 2018 , the Company also had $27.9 million of fully amortized intangible assets related to Fanapt ® . Intangible assets are amortized over their estimated useful economic life using the straight-line method. Amortization expense was $0.4 million for each of the three months ended September 30, 2019 and 2018 . Amortization expense was $1.1 million for each of the nine months ended September 30, 2019 and 2018 . The following is a summary of the future intangible asset amortization schedule as of September 30, 2019 : (in thousands) Total 2019 2020 2021 2022 2023 Thereafter HETLIOZ ® $ 23,407 $ 370 $ 1,478 $ 1,478 $ 1,478 $ 1,478 $ 17,125

Accounts Payable and Accrued Li

Accounts Payable and Accrued Liabilities	9 Months Ended
	Sep. 30, 2019
Payables and Accruals [Abstract]
Accounts Payable and Accrued Liabilities	Accounts Payable and Accrued Liabilities The following is a summary of the Company’s accounts payable and accrued liabilities as of September 30, 2019 and December 31, 2018 : (in thousands) September 30, December 31, Consulting and other professional fees $ 4,579 $ 2,924 Research and development expenses 6,709 5,593 Royalties payable 5,783 5,172 Compensation and employee benefits 5,490 6,363 Operating lease liabilities 2,123 — Other 2,308 1,532 Total accounts payable and accrued liabilities $ 26,992 $ 21,584

Commitments and Contingencies

Commitments and Contingencies	9 Months Ended
	Sep. 30, 2019
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies The following is a summary of the Company's noncancellable long-term contractual cash obligations as of September 30, 2019 . See footnote 6, Leases , for the maturities of the Company's operating lease liabilities as of September 30, 2019 . Cash Payments Due by Year (in thousands) Total 2019 2020 2021 2022 2023 Thereafter Purchase commitments 12,872 225 11,200 966 481 — — 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 ® . In February 2004, the Company entered into a license agreement with BMS under which it received an exclusive worldwide license under certain patents and patent applications, and other licenses to intellectual property, to develop and commercialize HETLIOZ ® . As a result of the FDA’s approval of the HETLIOZ ® NDA in January 2014, the Company made an $8.0 million milestone payment to BMS in the first quarter of 2014 under the license agreement that was capitalized as an intangible asset and is being amortized over the estimated economic useful life of the related product patents for HETLIOZ ® in the U.S. In April 2018, the Company met another milestone under its license agreement when cumulative worldwide sales of HETLIOZ ® reached $250.0 million . As a result of the achievement of this milestone, the Company made a payment to BMS of $25.0 million in the second quarter of 2018. The $25.0 million milestone obligation was capitalized as an intangible asset in the first quarter of 2015 and is being amortized over the estimated economic useful life of the related product patents for HETLIOZ ® in the U.S. The Company has no remaining milestone obligations to BMS. Additionally, the Company is obligated to make royalty payments on HETLIOZ ® net sales to BMS in any territory where the Company commercializes HETLIOZ ® for a period equal to the greater of 10 years following the first commercial sale in the territory or the expiry of the new chemical entity (NCE) patent in that territory. During the period prior to the expiry of the NCE patent in a territory, the Company is obligated to pay a 10% royalty on net sales in that territory. The royalty rate is decreased by half for countries in which no NCE patent existed or for the remainder of the 10 years after the expiry of the NCE patent. The Company is also obligated under the license agreement to pay BMS a percentage of any sublicense fees, upfront payments and milestone and other payments (excluding royalties) that it receives from a third party in connection with any sublicensing arrangement, at a rate which is in the mid-twenties . The Company has agreed with BMS in the license agreement for HETLIOZ ® to use its commercially reasonable efforts to develop and commercialize HETLIOZ ® . Fanapt ® . Pursuant to the terms of a settlement agreement with Novartis, Novartis transferred all U.S. and Canadian rights in the Fanapt ® franchise to the Company on December 31, 2014. The Company pays directly to Sanofi S.A (Sanofi) a fixed royalty of 3% of net sales through December 2019 related to manufacturing know-how. No further royalties on manufacturing know-how will be payable by the Company after December 2019. The Company is also obligated to pay Sanofi a fixed royalty on Fanapt ® net sales equal to 6% on Sanofi know-how not related to manufacturing under certain conditions for a period of up to 10 years in markets where the NCE patent has expired or was not issued. The Company is obligated to pay this 6% royalty on net sales in the U.S. through November 2026. No further royalties on know-how not related to manufacturing will be payable by the Company for net sales in the U.S. after November 2026. Tradipitant. In April 2012, the Company entered into a license agreement with Eli Lilly and Company (Lilly) pursuant to which the Company acquired an exclusive worldwide license under certain patents and patent applications, and other licenses to intellectual property, to develop and commercialize an NK-1R antagonist, tradipitant, for all human indications. The patent describing tradipitant as an NCE expires in April 2023, except in the U.S., where it expires in June 2024 absent any applicable patent term adjustments. Lilly is eligible to receive future payments based upon achievement of specified development and commercialization milestones as well as tiered-royalties on net sales at percentage rates up to the low double digits . As of September 30, 2019 , remaining milestone obligations include a $2.0 million pre-NDA approval milestone due upon the filing of the first marketing authorization for tradipitant in either the U.S. or European Union, $10.0 million and $5.0 million for the first approval of a marketing authorization for tradipitant in the U.S. and European Union, respectively, and up to $80.0 million for sales milestones. In the third quarter of 2018, the Company also made a $2.0 million milestone payment to Lilly as a result of enrolling the first subject into a Phase III study for tradipitant in July 2018. The likelihood of achieving this milestone was determined to be probable during 2017 and the obligation of $2.0 million tied to such milestone was recorded as research and development expense in the consolidated statement of operations during the year ended December 31, 2017 . The Company is obligated to use its commercially reasonable efforts to develop and commercialize tradipitant. VQW-765. In connection with a settlement agreement with Novartis relating to Fanapt ® , the Company received an exclusive worldwide license under certain patents and patent applications, and other licenses to intellectual property, to develop and commercialize VQW-765, a Phase II alpha-7 nicotinic acetylcholine receptor partial agonist. Pursuant to the license agreement, the Company is obligated to use its commercially reasonable efforts to develop and commercialize VQW-765 and is responsible for all development costs. The Company has no milestone obligations; however, Novartis is eligible to receive tiered-royalties on net sales at percentage rates up to the mid-teens . Portfolio of CFTR activators and inhibitors . In March 2017, the Company entered into a license agreement with the University of California San Francisco (UCSF), under which the Company acquired an exclusive worldwide license to develop and commercialize a portfolio of CFTR activators and inhibitors. Pursuant to the license agreement, the Company will develop and commercialize the CFTR activators and inhibitors and is responsible for all development costs under the license agreement, including current pre-investigational new drug development work. UCSF is eligible to receive future payments based upon achievement of specified development and commercialization milestones as well as single-digit royalties on net sales. As of September 30, 2019 , remaining milestone obligations include annual maintenance fees, $12.2 million for pre-NDA approval milestones and $33.0 million for future regulatory approval and sales milestones. Included in the $12.2 million pre-NDA approval milestones is a $350,000 milestone due upon the conclusion of a Phase I study for each licensed product but not to exceed $1.1 million in total for the CFTR portfolio. In the first quarter of 2019, the Company also made a $0.2 million pre-NDA approval milestone payment to UCSF, which was determined to be probable and accrued as a current liability in the fourth quarter of 2018. Additionally, the Company paid an initial license fee of $1.0 million in 2017. Purchase Commitments 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-for-service arrangements. The Company’s current agreements for clinical, marketing, and other services generally may be terminated on 90

Public Offering of Common Stock

Public Offering of Common Stock	9 Months Ended
	Sep. 30, 2019
Equity [Abstract]
Public Offering of Common Stock	Public Offering of Common Stock In March 2018, the Company completed a public offering of 6,325,000 shares of its common stock, including the exercise of the underwriters’ option to purchase an additional 825,000 shares of common stock, at a price to the public of $17.00 per share. Net cash proceeds from the public offering were $100.9 million after deducting the underwriting discounts and commissions and offering expenses.

Accumulated Other Comprehensive

Accumulated Other Comprehensive Income	9 Months Ended
	Sep. 30, 2019
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]
Accumulated Other Comprehensive Income (Loss)	Accumulated Other Comprehensive Income The accumulated balances related to each component of other comprehensive income (loss), net of taxes, were as follows as of September 30, 2019 and December 31, 2018 : (in thousands) September 30, December 31, Foreign currency translation $ (10 ) $ 7 Unrealized gain (loss) on marketable securities 221 (6 ) Accumulated other comprehensive income $ 211 $ 1 There were no reclassifications out of accumulated other comprehensive income for either of the nine months ended September 30, 2019 or 2018 .

Stock-Based Compensation

Stock-Based Compensation	9 Months Ended
	Sep. 30, 2019
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Stock-Based Compensation	Stock-Based Compensation As of September 30, 2019 , there were 6,324,304 shares that were subject to outstanding options and restricted stock units (RSUs) under the 2006 Equity Incentive Plan (2006 Plan) and the Amended and Restated 2016 Equity Incentive Plan (2016 Plan, and together with the 2006 Plan, Plans). The 2006 Plan expired by its terms in April 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. The 2016 Plan has been amended and restated twice to increase the number of shares reserved for issuance, among other administrative changes. Both amendments and restatements of the 2016 Plan were approved by the Company's stockholders. There are a total of 7,100,000 shares of common stock reserved for issuance under the 2016 Plan, 3,063,197 shares of which remained available for future grant as of September 30, 2019 . 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 Company's board of directors. Service option awards have 10 year contractual terms. Service option awards granted to employees and new directors upon their election vest and become exercisable on the first anniversary of the grant date with respect to 25% of the shares subject to service option awards. The remaining 75% of the shares subject to the service option awards vest and become exercisable monthly in equal installments thereafter over three years . Subsequent annual service option awards granted to directors vest and become exercisable in either equal monthly installments over a period of one year or on the first anniversary of the grant date. Certain service option awards to executives and directors provide for accelerated vesting if there is a change in control of the Company. Certain service option awards to employees and executives provide for accelerated vesting if the respective employee’s or executive’s service is terminated by the Company for any reason other than cause or permanent disability. As of September 30, 2019 , $10.7 million of unrecognized compensation costs related to unvested service option awards are expected to be recognized over a weighted average period of 1.5 years . No option awards are classified as a liability as of September 30, 2019 . A summary of option activity under the Plans for the nine months ended September 30, 2019 follows: 2006 and 2016 Plans (in thousands, except for share and per share amounts) Number of Shares Weighted Average Exercise Price at Grant Date Weighted Average Remaining Term (Years) Aggregate Intrinsic Value Outstanding at December 31, 2018 4,369,042 $ 11.15 5.28 $ 65,438 Granted 652,500 18.60 Forfeited — — Expired (15,000 ) 14.78 Exercised (338,317 ) 12.26 1,083 Outstanding at September 30, 2019 4,668,225 12.10 5.56 12,673 Exercisable at September 30, 2019 3,489,627 10.21 4.46 12,343 Vested and expected to vest at September 30, 2019 4,459,638 11.81 5.38 12,652 The weighted average grant-date fair value of options granted was $10.34 and $10.66 per share for the nine months ended September 30, 2019 and 2018 , respectively. Proceeds from the exercise of stock options amounted to $4.1 million and $5.5 million for the nine months ended September 30, 2019 and 2018 , 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 generally vest over 4 years in equal annual installments provided that the employee remains employed with the Company. Annual service RSUs granted to directors vest on the first anniversary of the grant date. As of September 30, 2019 , $25.3 million of unrecognized compensation costs related to unvested service RSUs are expected to be recognized over a weighted average period of 1.9 years . No RSUs are classified as a liability as of September 30, 2019 . A summary of RSU activity under the Plans for the nine months ended September 30, 2019 follows: 2006 and 2016 Plans Number of Shares Underlying RSUs Weighted Average Grant Date Fair Value Unvested at December 31, 2018 1,313,576 $ 15.68 Granted 915,328 19.58 Forfeited (55,024 ) 18.93 Vested (517,801 ) 14.49 Unvested at September 30, 2019 1,656,079 18.09 The grant date fair value for the 517,801 shares underlying RSUs that vested during the nine months ended September 30, 2019 was $7.5 million . Stock-Based Compensation Stock-based compensation expense recognized for the three and nine months ended September 30, 2019 and 2018 was comprised of the following: Three Months Ended Nine Months Ended (in thousands) September 30, September 30, September 30, September 30, Research and development $ 827 $ 326 $ 2,311 $ 963 Selling, general and administrative 2,580 2,546 7,479 7,781 Total stock-based compensation expense $ 3,407 $ 2,872 $ 9,790 $ 8,744 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 stock options granted during the nine months ended September 30, 2019 and 2018 were as follows: Nine Months Ended September 30, September 30, Expected dividend yield 0 % 0 % Weighted average expected volatility 58 % 58 % Weighted average expected term (years) 5.94 5.90 Weighted average risk-free rate 2.29 % 2.68 %

Income Taxes

Income Taxes	9 Months Ended
	Sep. 30, 2019
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes For the three months ended September 30, 2019 and 2018 , the Company recorded income tax benefit of $ 88.1 million and income tax expense of $ 0.1 million, respectively. For the nine months ended September 30, 2019 and 2018 , the Company recorded income tax benefit of $ 88.1 million and income tax expense of $ 0.2 million, respectively. The income tax benefit for the three and nine months ended September 30, 2019 was primarily due to the reduction of the Company's tax valuation allowance against substantially all of its deferred tax assets in the U.S. recognized during the three months ended September 30, 2019. Net income tax benefit of $1.6 million was also recorded related to the generation of 2019 research and development and orphan drug credits, current taxes payable to certain U.S. state and foreign jurisdictions and uncertain tax positions for the three and nine months ended September 30, 2019 . As a result of the tax valuation allowance against deferred tax assets in the U.S., there was no expense for federal income taxes associated with the income before taxes for the three and nine months ended September 30, 2018. Income taxes were recorded related to certain U.S. state and foreign jurisdictions for the three and nine months ended September 30, 2018. The Company assesses the need for a valuation allowance against its deferred tax asset each quarter through the review of all available positive and negative evidence. Deferred tax assets are reduced 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. As of December 31, 2018, there was a full tax valuation allowance against all deferred tax assets in the U.S. During the three months ended September 30, 2019, after considering all available positive and negative evidence, including but not limited to cumulative income in recent periods, historical and current projected results, and significant risks and uncertainties related to forecasts, the Company concluded that it was more likely than not that substantially all of its deferred taxes are realizable in future periods. Tax benefits are recognized from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefit recognized in the financial statements for a particular tax position is based on the largest benefit that is more likely than not to be realized upon settlement. As of September 30, 2019, the total amount of unrecognized tax benefits (UTB) was $9.7 million . As of December 31, 2018, the Company had no UTB. The UTB recognized in 2019 is primarily related to prior year tax positions and has no impact on tax expense as, prior to 2019, a tax valuation allowance was recorded against deferred tax assets in the U.S. The Company does not expect its unrecognized tax benefits as of September 30, 2019 to change significantly over the next twelve months. Certain tax attributes of the Company, including net operating losses (NOLs) and credits, would be subject to a limitation should an ownership change as defined under the Internal Revenue Code of 1986, as amended, 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 ended 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. The Tax Cuts and Jobs Act (TCJA) was enacted in December 2017. During the fourth quarter of 2018, the Company completed its accounting for the tax effects of the TCJA. No material measurement period adjustments were recorded in 2018 to adjust estimated effects of the TCJA that were recorded in 2017. Immaterial measurement period adjustments that were recorded resulted in no tax expense as they were fully offset by a change in the Company's valuation allowance.

Earnings per Share

Earnings per Share	9 Months Ended
	Sep. 30, 2019
Earnings Per Share [Abstract]
Earnings per Share	Earnings per Share Basic earnings per share (EPS) is calculated by dividing the net income by the weighted average number of shares of common stock outstanding. Diluted EPS is computed by dividing the net income 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 per share of common stock for the three and nine months ended September 30, 2019 and 2018 : Three Months Ended Nine Months Ended (in thousands, except for share and per share amounts) September 30, September 30, September 30, September 30, Numerator: Net income $ 100,423 $ 7,171 $ 111,337 $ 14,848 Denominator: Weighted average shares outstanding, basic 53,297,298 52,389,012 53,052,521 50,321,640 Effect of dilutive securities 1,244,327 2,320,737 1,751,330 1,994,002 Weighted average shares outstanding, diluted 54,541,625 54,709,749 54,803,851 52,315,642 Net income per share, basic and diluted: Basic $ 1.88 $ 0.14 $ 2.10 $ 0.30 Diluted $ 1.84 $ 0.13 $ 2.03 $ 0.28 Antidilutive securities excluded from calculations of diluted net income per share 2,646,933 752,194 1,826,279 1,058,058

Legal Matters

Legal Matters	9 Months Ended
	Sep. 30, 2019
Commitments and Contingencies Disclosure [Abstract]
Legal Matters	Legal Matters Fanapt ® . The Company has been involved in litigation with Roxane Laboratories, Inc. (Roxane) and its affiliates, West-Ward Pharmaceuticals International Limited and West-Ward Pharmaceuticals Corp (West-Ward), since the Company filed a lawsuit against Roxane in the U.S. District Court for the District of Delaware (Delaware District Court) for patent infringement in June 2014. The lawsuit was filed in response to Roxane’s submission to the U.S. Food and Drug Administration (FDA) of an Abbreviated New Drug Application (ANDA) for a generic version of Fanapt ® prior to the expiration of certain of the Company’s patents covering Fanapt ® , including U.S. Patent No. 8,586,610 (‘610 Patent). In August 2016, the Delaware District Court ruled in the Company’s favor, permanently enjoining Roxane from manufacturing, using, selling, offering to sell, distributing or importing any generic iloperidone product described in Roxane’s ANDA until the expiration of the ‘610 Patent in November 2027, or May 2028 if the Company obtains pediatric exclusivity. In April 2018, following an appeal by Roxane of the Delaware District Court’s decision to the Federal Circuit Court of Appeals (Federal Circuit), the Federal Circuit affirmed the Delaware District Court’s ruling. In June 2018, West-Ward, having replaced Roxane as defendants following the acquisition of Roxane by West-Ward’s parent company, Hikma Pharmaceuticals PLC, petitioned the Federal Circuit for a rehearing en banc. In August 2018, the Federal Circuit denied West-Ward's petition. In January 2019, West-Ward filed a petition in the U.S. Supreme Court for a writ of certiorari seeking reversal of the Federal Circuit’s decision. In March 2019, the U.S. Supreme Court invited the Solicitor General of the U.S. to file a brief in the matter expressing the views of the U.S. 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. (Apotex, and collectively with Roxane, Inventia, Lupin and Taro, the Fanapt ® Defendants). These lawsuits were filed in response to the submission to the FDA by each of the Fanapt ® Defendants of ANDAs for generic versions of Fanapt ® prior to the expiration of the ‘610 Patent in November 2027 or the U.S. Patent No. 9,138,432 in September 2025. The Company entered into separate confidential stipulations with each of Inventia and Lupin regarding any potential launch of their generic versions of Fanapt ® . The remaining lawsuits against the other Fanapt ® Defendants have been stayed until 14 days after final disposition by the U.S. Supreme Court of the petition for a writ of certiorari filed by West-Ward. HETLIOZ ® . In April and May 2018, the Company filed three separate patent infringement lawsuits in the Delaware District Court against Teva Pharmaceuticals USA, Inc. (Teva), MSN Pharmaceuticals Inc. and MSN Laboratories Private Limited (MSN) and Apotex (collectively with Teva and MSN, the HETLIOZ ® Defendants) after having received Paragraph IV certification notice letters (Paragraph IV Letters) from each of the HETLIOZ ® Defendants alleging that certain of the Company's patents covering HETLIOZ ® (collectively, the HETLIOZ ® Patents) were invalid, unenforceable and/or would not be infringed by the manufacture, use or sale of their generic versions of HETLIOZ ® , as described in the ANDAs submitted to the FDA by each of the HETLIOZ ® Defendants, prior to the expiration of the latest to expire of the HETLIOZ ® Patents in 2034. Each of the HETLIOZ ® Patents are listed in the Approved Drug Products with Therapeutic Equivalence Evaluations (Orange Book). In December 2018, the Company filed amended complaints against each of the HETLIOZ ® Defendants following the receipt of additional Paragraph IV Letters from Teva and Apotex concerning its Orange Book listed '977 Patent, which expires in 2035. These lawsuits are scheduled for trial in October 2020. In March 2019, April 2019, and May 2019, the Company filed three additional patent infringement lawsuits in the Delaware District Court against the HETLIOZ ® Defendants following the receipt of additional Paragraph IV Letters from each concerning its Orange Book listed U.S. Patent No. 10,149,829, which expires in 2033. A trial date has not yet been scheduled for these lawsuits. In October 2019, the Company received an additional Paragraph IV certification notice letter from Teva concerning its Orange Book listed ‘487 Patent, which expires in July 2035. In its notice letter, Teva alleges that the ‘487 Patent, which covers a method of treatment using HETLIOZ ® , is invalid, unenforceable and/or will not be infringed by Teva’s manufacture, use or sale of its generic version of HETLIOZ ® as described in its ANDA. The Company intends to vigorously pursue a patent infringement lawsuit permanently enjoining Teva from infringing the claims of the ‘487 Patent. Other Matters . In April 2018, the Company submitted a protocol amendment to the FDA, proposing a 52-week open-label extension (OLE) period for patients who had completed the tradipitant Phase II clinical study (2301) in gastroparesis. In May 2018, based on feedback from the FDA, the Company amended the protocol limiting the duration of treatment in the 2301 study to a total of three months, while continuing to seek further dialogue with the FDA on extending the study duration to 52-weeks. As a part of this negotiation process, in September 2018, the Company submitted a new follow-on 52-week OLE protocol to the FDA (2302) for patients who had completed the 2301 study. While waiting for further feedback, the Company did not enroll any patients in any study beyond 12 weeks. In December 2018, the FDA imposed a partial clinical hold (PCH) on the two proposed studies, stating that the Company is required first to conduct additional chronic toxicity studies in canines, monkeys or minipigs before allowing patients access in any clinical protocol beyond 12 weeks. The original PCH was not based on any safety or efficacy data related to tradipitant. Rather, the FDA informed the Company that these additional toxicity studies are required by a guidance document. On February 5, 2019, the Company filed a lawsuit against the FDA in the U.S. District Court for the District of Columbia (DC District Court), challenging the FDA’s legal authority to issue the PCH, and seeking an order to set it aside. In February 2019, the FDA filed a Motion for Voluntary Remand to the Agency and for a Stay of the Case. In March 2019, the DC District Court granted the FDA’s request for voluntary remand and returned the matter to the FDA for further consideration. In April 2019, the FDA provided its remand response, in which it indicated that, upon review of scientific literature and tradipitant data, it believes that a partial clinical hold continues to be appropriate until the Company has adequate safety data from a 9-month non-rodent toxicity study. After reviewing the FDA’s remand response, the Company continues to believe that additional chronic toxicity studies are unjustified, and that it has provided the FDA with sufficient information regarding the safety of tradipitant to justify the continued study of tradipitant in patients beyond 12 weeks, in accordance with applicable law and FDA regulations. In May 2019, the Company filed an amended complaint, and in July 2019, the Company filed a Motion for Summary Judgment. The FDA filed a reply and cross-motion for summary judgment in October 2019. A hearing has been set for December 13, 2019. The Company intends to continue vigorously pursuing its interests in the matter. In February 2019, a qui tam action filed against the Company was unsealed by order of the DC District Court. The qui tam action, which was filed under seal in March 2017, was brought by a former Company employee on behalf of the U.S., 28 states and the District of Columbia (collectively, the Plaintiff States) and the policyholders of certain insurance companies under the Federal False Claims Act and state law equivalents to the Federal False Claims Act and related state laws. The complaint alleged that the Company violated these laws through the promotion and marketing of its products Fanapt ® and HETLIOZ ® and sought, among other things, treble damages, civil penalties for each alleged false claim, and attorneys’ fees and costs. By virtue of the DC District Court having unsealed the original complaint, the Company learned that in January 2019, the U.S. Department of Justice (the DOJ), as well as the Plaintiff States, elected not to intervene in the qui tam action at that time. In May 2019, the plaintiff filed an amended complaint under seal repeating the same allegations and seeking the same relief. In August 2019, the Company filed a motion to dismiss, and in October 2019 the plaintiff filed a reply. According to a filing unsealed in June 2019, the DOJ reaffirmed its decision not to intervene and incorporated its prior filing, indicating that neither the DOJ nor the Plaintiff States were intervening regarding the original complaint. Although the DOJ and the Plaintiff States have elected not to intervene, the plaintiff may litigate this action and the DOJ and the Plaintiff States may later seek to intervene in the action. The Company intends to vigorously defend itself in the case. In February 2019, a securities class action, Gordon v. Vanda Pharmaceuticals Inc. , was filed in the U.S. District Court for the Eastern District of New York naming the Company and certain of its officers as defendants. An amended complaint was filed in July 2019. The amended complaint, filed on behalf of a purported stockholder, asserts claims on behalf of a putative class of all persons who purchased the Company’s publicly traded securities between November 4, 2015 and February 11, 2019, for alleged violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder. The amended complaint alleges that the defendants made false and misleading statements and/or omissions regarding Fanapt ® , HETLIOZ ® and the Company’s interactions with the FDA regarding tradipitant between November 3, 2015 and February 11, 2019. The Company believes that it has meritorious defenses and intends to vigorously defend this lawsuit. The Company does not anticipate that this litigation will have a material adverse effect on its business, results of operations or financial condition. However, this lawsuit is subject to inherent uncertainties, the actual cost may be significant, and the Company may not prevail. The Company believes it is entitled to coverage under its relevant insurance policies, subject to a retention, but coverage could be denied or prove to be insufficient. In July 2019, a shareholder derivative complaint, Samuel Williams vs. Mihael Polymeropoulos, et al. , was filed in the U.S. District Court for the Eastern District of New York naming certain current and former Company directors and officers as defendants. In September 2019, a shareholder derivative complaint, Michael Bavaro v. Mihael Polymeropoulos, et al. , was filed in the Delaware District Court naming certain current and former Company directors and officers as defendants. In October 2019, the Company filed a motion to transfer the Bavaro case to the Eastern District of New York, where the Gordon and Williams cases are pending. These complaints, filed on behalf of purported stockholders, derivatively on behalf of the Company, assert claims for alleged breach of fiduciary duties by certain of the Company’s current and former directors and officers. The Company believes that it has meritorious defenses and intends to vigorously defend these lawsuits. The Company does not anticipate that this litigation will have a material adverse effect on its business, results of operations or financial condition. However, these lawsuits are subject to inherent uncertainties, the actual cost may be significant, and the Company may not prevail. The Company believes it is entitled to coverage under its relevant insurance policies, subject to a retention, but coverage could be denied or prove to be insufficient.

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2019
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the Company’s consolidated financial statements and accompanying notes included in the Company's annual report on Form 10-K for the fiscal year ended December 31, 2018 . The financial information as of September 30, 2019 and for the three and nine months ended September 30, 2019 and 2018 is unaudited, but in the opinion of management, all adjustments considered necessary for a fair statement of the results for these interim periods have been included. All intercompany accounts and transactions have been eliminated in consolidation. The condensed consolidated balance sheet data as of December 31, 2018 was derived from audited financial statements but does not include all disclosures required by GAAP. The results of the Company’s operations for any interim period are not necessarily indicative of the results that may be expected for any other interim period or any future year or period.
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates that affect the reported amounts of assets and liabilities at the date of the financial statements, disclosure of contingent assets and liabilities, and the reported amounts of revenue and expenses during the reporting period. Management continually re-evaluates its estimates, judgments and assumptions, and management’s evaluation could change. Actual results could differ from those estimates.
Leases	Leases In accordance with ASC 842, Leases , effective January 1, 2019, the Company determines if an arrangement contains a lease at inception. Right-of-use (ROU) assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from that lease. For leases with a term greater than 12 months, ROU assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. The lease term includes the option to extend the lease when it is reasonably certain the Company will exercise that option. When available, the Company uses the rate implicit in the lease to discount lease payments to present value. In the case the implicit rate is not available, the Company uses its incremental borrowing rate based on information available at the lease commencement date, including publicly available data for instruments with similar characteristics, to determine the present value of lease payments. The Company does not combine lease and non-lease elements for office leases. For existing leases as of January 1, 2019, executory costs are excluded from lease expense, which is consistent with the Company's accounting under ASC 840, Leases . For all leases entered into after January 1, 2019, executory costs are allocated between lease and non-lease elements based upon their relative stand-alone prices.
Major Customers	Major Customers HETLIOZ ® is available in the U.S. for distribution through a limited number of specialty pharmacies, and is not available in retail pharmacies. Fanapt ® is available in the U.S. for distribution through a limited number of wholesalers and is available in retail pharmacies. The Company invoices and records revenue when its customers, specialty pharmacies and wholesalers, receive product from the third-party logistics warehouse which is the point at which control is transferred to the customer. There were five major customers that each accounted for more than 10% of total revenues and, as a group, represented 96% of total revenues for the nine months ended September 30, 2019 . There were five major customers that each accounted for more than 10% of accounts receivable and, as a group, represented 93% of total accounts receivable at September 30, 2019 . The Company evaluates outstanding receivables to assess collectability. In performing this evaluation, the Company analyzes economic conditions, the aging of receivables and customer specific risks. Using this information, the Company reserves an amount that it estimates may not be collected.
Cash, Cash Equivalents and Restricted Cash	Cash, Cash Equivalents and Restricted Cash
Recent Accounting Pronouncements	Recent Accounting Pronouncements In August 2018, the U.S. Securities and Exchange Commission (SEC) adopted the final rule under SEC Release No. 33-10532, Disclosure Update and Simplification. This final rule amends certain disclosure requirements that are redundant, duplicative, overlapping, outdated or superseded. In addition, the amendments expand the disclosure requirements on the analysis of stockholders' equity for interim financial statements. Under the amendments, an analysis of changes in each caption of stockholders' equity presented in the balance sheet must be provided in a note or separate statement. The analysis should present a reconciliation of the beginning balance to the ending balance of each period for which a statement of comprehensive income is required to be filed. This final rule is effective for the Company for all filings made on or after November 5, 2018. The SEC staff clarified that the first presentation of the changes in shareholders' equity may be included in the first Form 10-Q for the quarter that begins after the effective date of the amendments. The adoption of the final rule did not have a material impact on the Company’s condensed consolidated financial statements. The Company updated the disclosure of its Condensed Consolidated Statements of Changes in Stockholders' Equity in 2019 to include a reconciliation for the quarter-to-date and year-to-date comparative periods. In June 2016, the Financial Accounting Standards Board (FASB) issued ASU 2016-13, Financial Instruments – Credit Losses, which changes the impairment model for most financial assets and certain other financial instruments. The standard will require the use of a forward-looking “expected loss” model for instruments measured at amortized cost that generally will result in the earlier recognition of allowances for losses. The standard is effective for years beginning after December 15, 2019, and interim periods within annual periods beginning after December 15, 2019. The Company is evaluating this standard to determine if adoption will have a material impact on the Company’s accounts receivable and marketable securities balances and related financial statement disclosures. In February 2016, the FASB issued ASU 2016-2, Leases (Topic 842) , which was further clarified by ASU 2018-10, Codification Improvements to Topic 842, Leases , and ASU 2018-11, Leases - Targeted Improvements , issued in July 2018. ASC 842 supersedes existing lease guidance, including ASC 840 Leases . The new leasing standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The new leasing standard requires that lessees will need to recognize an ROU asset and a lease liability for virtually all of their leases, and allows companies to make a policy election as to whether short term leases will be recognized under the requirements of the new standard. The Company elected to exclude short-term leases in the application of the new standard. The lease liability is equal to the present value of lease payments. The ROU asset is based on the liability subject to certain adjustments. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance. Operating leases will result in straight-line expense, similar to accounting for operating leases under ASC 840, while finance leases will result in a front-loaded expense pattern, similar to accounting for capital leases under ASC 840. The Company adopted the new leasing standard in the first quarter of 2019, using a modified retrospective transition. There was no impact to the opening balance of retained earnings as of the effective date of January 1, 2019 as a result of adoption. Prior period financial statements were not recast. The Company elected the package of transition provisions available for expired or existing contracts, which allowed it to carryforward its historical assessments of (1) whether contracts are or contain leases, (2) lease classification and (3) initial direct costs. The adoption of the new leasing standard on January 1, 2019 resulted in the recognition of $15.8 million of operating lease liabilities, $2.2 million of which were classified as current liabilities, with corresponding ROU assets of $12.2 million
Marketable securities	Marketable securities classified in Level 1 and Level 2 as of September 30, 2019 and December 31, 2018
Inventory	InventoryThe 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.
Earnings per Share	Earnings per Share Basic earnings per share (EPS) is calculated by dividing the net income by the weighted average number of shares of common stock outstanding. Diluted EPS is computed by dividing the net income 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.

Summary of Significant Accoun_3

Summary of Significant Accounting Policies (Tables)	9 Months Ended
	Sep. 30, 2019
Accounting Policies [Abstract]
Net Sales by Product	The Company’s revenues consist of net product sales of HETLIOZ ® and net product sales of Fanapt ® . Net sales by product for the three and nine months ended September 30, 2019 and 2018 were as follows: Three Months Ended Nine Months Ended (in thousands) September 30, September 30, September 30, September 30, HETLIOZ ® product sales, net $ 37,589 $ 29,923 $ 104,381 $ 83,391 Fanapt ® product sales, net 21,896 19,212 61,877 56,686 Total net product sales $ 59,485 $ 49,135 $ 166,258 $ 140,077
Schedule of Cash Flow, Supplemental Disclosures	The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Condensed Consolidated Balance Sheets to the total end of period cash, cash equivalents and restricted cash reported within the Condensed Consolidated Statement of Cash Flows: (in thousands) September 30, September 30, Cash and cash equivalents $ 39,208 $ 60,778 Restricted cash included in: Prepaid expenses and other current assets 157 157 Non-current inventory and other 585 587 Total cash, cash equivalents and restricted cash $ 39,950 $ 61,522

Marketable Securities (Tables)

Marketable Securities (Tables)	9 Months Ended
	Sep. 30, 2019
Investments, Debt and Equity Securities [Abstract]
Summary of Available-for-Sale Marketable Securities	The following is a summary of the Company’s available-for-sale marketable securities as of September 30, 2019 : September 30, 2019 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Market Value (in thousands) Current: U.S. Treasury and government agencies $ 72,767 $ 83 $ (4 ) $ 72,846 Corporate debt 110,119 176 — 110,295 Asset-backed securities 15,410 28 (2 ) 15,436 Total marketable securities, current $ 198,296 $ 287 $ (6 ) $ 198,577 Non-current: U.S. Treasury and government agencies $ 14,499 $ — $ (20 ) $ 14,479 Corporate debt 15,852 28 (2 ) 15,878 Asset-backed securities 31,469 15 (14 ) 31,470 Total marketable securities, non-current 61,820 43 (36 ) 61,827 Total marketable securities $ 260,116 $ 330 $ (42 ) $ 260,404 Current marketable securities have a remaining maturity of less than one year. Non-current marketable securities have a remaining maturity of between one and two years. The following is a summary of the Company’s available-for-sale marketable securities as of December 31, 2018 , which all have contract maturities of less than one year: December 31, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Market Value (in thousands) Current: U.S. Treasury and government agencies $ 69,275 $ 12 $ (17 ) $ 69,270 Corporate debt 105,897 38 (25 ) 105,910 Asset-backed securities 21,189 — (14 ) 21,175 Total marketable securities, current $ 196,361 $ 50 $ (56 ) $ 196,355

(Tables)

(Tables)	9 Months Ended
	Sep. 30, 2019
Fair Value Disclosures [Abstract]
Assets Measured at Fair Value on Recurring Basis	As of September 30, 2019 , the Company held certain assets that are required to be measured at fair value on a recurring basis, as follows: Fair Value Measurement as of September 30, 2019 Using Total Fair Value Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (in thousands) (Level 1) (Level 2) (Level 3) U.S. Treasury and government agencies $ 87,325 $ 87,325 $ — $ — Corporate debt 126,173 — 126,173 — Asset-backed securities 46,906 — 46,906 — Total assets measured at fair value $ 260,404 $ 87,325 $ 173,079 $ — As of December 31, 2018 , the Company held certain assets that are required to be measured at fair value on a recurring basis, as follows: Fair Value Measurement as of December 31, 2018 Using Total Fair Value Quoted Prices in Significant Other Significant (in thousands) (Level 1) (Level 2) (Level 3) U.S. Treasury and government agencies $ 69,270 $ 69,270 $ — $ — Corporate debt 105,910 — 105,910 — Asset-backed securities 21,175 — 21,175 — Total assets measured at fair value $ 196,355 $ 69,270 $ 127,085 $ —

Inventory (Tables)

Inventory (Tables)	9 Months Ended
	Sep. 30, 2019
Inventory Disclosure [Abstract]
Inventory	Inventory consisted of the following as of September 30, 2019 and December 31, 2018 : (in thousands) September 30, December 31, Current: Work-in-process $ — $ 48 Finished goods 1,019 946 Total inventory, current $ 1,019 $ 994 Non-Current: Raw materials $ 662 $ 86 Work-in-process 1,131 2,290 Finished goods 1,286 516 Total inventory, non-current 3,079 2,892 Total inventory $ 4,098 $ 3,886

Leases (Tables)

Leases (Tables)	9 Months Ended
	Sep. 30, 2019
Leases [Abstract]
Schedule Of Lease Assets And Liabilities	The following is a summary of the Company’s ROU assets and operating lease liabilities as of September 30, 2019 : (in thousands) Classification on the Balance Sheet September 30, 2019 Assets Operating lease assets Operating lease right-of-use assets $ 11,436 Liabilities Operating lease current liabilities Accounts payable and accrued liabilities $ 2,123 Operating lease non-current liabilities Operating lease non-current liabilities 12,793 Total lease liabilities $ 14,916 Weighted average remaining lease term 8.3 Years Weighted average discount rate (1) 8.1 % (1) Upon adoption of the new lease standard, discount rates used for existing leases were established at January 1, 2019.
Lessee, Operating Lease, Liability, Maturity	The table below reconciles the Company's future cash obligations to operating lease liabilities recorded on the balance sheet as of September 30, 2019 : (in thousands) Operating Leases 2019 $ 633 2020 2,309 2021 2,329 2022 2,355 2023 2,420 Thereafter 10,669 Total minimum lease payments 20,715 Less: amount of lease payments representing interest (5,799 ) Present value of future minimum lease payments 14,916 Less: current obligations under leases (2,123 ) Operating lease non-current liabilities $ 12,793
Schedule of Future Minimum Rental Payments for Operating Leases	At December 31, 2018 , future minimum payments under noncancellable operating leases under ASC 840 were as follows: Cash Payments Due by Year (in thousands) Total 2019 2020 2021 2022 2023 Thereafter Operating leases 22,757 2,483 2,495 2,335 2,355 2,420 10,669

Intangible Assets (Tables)

Intangible Assets (Tables)	9 Months Ended
	Sep. 30, 2019
Goodwill and Intangible Assets Disclosure [Abstract]
Summary of Intangible Assets	The following is a summary of the Company’s intangible assets as of September 30, 2019 : September 30, 2019 (in thousands) Estimated Useful Life (Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount HETLIOZ ® July 2035 $ 33,000 $ 9,593 $ 23,407 The following is a summary of the Company’s intangible assets as of December 31, 2018 : December 31, 2018 (in thousands) Estimated Useful Life (Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount HETLIOZ ® February 2035 $ 33,000 $ 8,458 $ 24,542
Summary of Future Intangible Asset Amortization	The following is a summary of the future intangible asset amortization schedule as of September 30, 2019 : (in thousands) Total 2019 2020 2021 2022 2023 Thereafter HETLIOZ ® $ 23,407 $ 370 $ 1,478 $ 1,478 $ 1,478 $ 1,478 $ 17,125

Accounts Payable and Accrued _2

Accounts Payable and Accrued Liabilities (Tables)	9 Months Ended
	Sep. 30, 2019
Payables and Accruals [Abstract]
Summary of Accounts Payable and Accrued Liabilities	The following is a summary of the Company’s accounts payable and accrued liabilities as of September 30, 2019 and December 31, 2018 : (in thousands) September 30, December 31, Consulting and other professional fees $ 4,579 $ 2,924 Research and development expenses 6,709 5,593 Royalties payable 5,783 5,172 Compensation and employee benefits 5,490 6,363 Operating lease liabilities 2,123 — Other 2,308 1,532 Total accounts payable and accrued liabilities $ 26,992 $ 21,584

Commitments and Contingencies (

Commitments and Contingencies (Tables)	9 Months Ended
	Sep. 30, 2019
Commitments and Contingencies Disclosure [Abstract]
Summary of Non-cancelable Long-term Contractual Cash Obligations	The following is a summary of the Company's noncancellable long-term contractual cash obligations as of September 30, 2019 . See footnote 6, Leases , for the maturities of the Company's operating lease liabilities as of September 30, 2019 . Cash Payments Due by Year (in thousands) Total 2019 2020 2021 2022 2023 Thereafter Purchase commitments 12,872 225 11,200 966 481 — —

Accumulated Other Comprehensi_2

Accumulated Other Comprehensive Income (Tables)	9 Months Ended
	Sep. 30, 2019
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]
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), net of taxes, were as follows as of September 30, 2019 and December 31, 2018 : (in thousands) September 30, December 31, Foreign currency translation $ (10 ) $ 7 Unrealized gain (loss) on marketable securities 221 (6 ) Accumulated other comprehensive income $ 211 $ 1

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	9 Months Ended
	Sep. 30, 2019
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Summary of Option Activity Plan	A summary of option activity under the Plans for the nine months ended September 30, 2019 follows: 2006 and 2016 Plans (in thousands, except for share and per share amounts) Number of Shares Weighted Average Exercise Price at Grant Date Weighted Average Remaining Term (Years) Aggregate Intrinsic Value Outstanding at December 31, 2018 4,369,042 $ 11.15 5.28 $ 65,438 Granted 652,500 18.60 Forfeited — — Expired (15,000 ) 14.78 Exercised (338,317 ) 12.26 1,083 Outstanding at September 30, 2019 4,668,225 12.10 5.56 12,673 Exercisable at September 30, 2019 3,489,627 10.21 4.46 12,343 Vested and expected to vest at September 30, 2019 4,459,638 11.81 5.38 12,652
Summary of RSU Activity for 2006 Plan and 2016 Plan	A summary of RSU activity under the Plans for the nine months ended September 30, 2019 follows: 2006 and 2016 Plans Number of Shares Underlying RSUs Weighted Average Grant Date Fair Value Unvested at December 31, 2018 1,313,576 $ 15.68 Granted 915,328 19.58 Forfeited (55,024 ) 18.93 Vested (517,801 ) 14.49 Unvested at September 30, 2019 1,656,079 18.09
Stock-Based Compensation Expense	Stock-based compensation expense recognized for the three and nine months ended September 30, 2019 and 2018 was comprised of the following: Three Months Ended Nine Months Ended (in thousands) September 30, September 30, September 30, September 30, Research and development $ 827 $ 326 $ 2,311 $ 963 Selling, general and administrative 2,580 2,546 7,479 7,781 Total stock-based compensation expense $ 3,407 $ 2,872 $ 9,790 $ 8,744
Black-Scholes-Merton Option Pricing Model for Employee and Director Stock Options Granted	Assumptions used in the Black-Scholes-Merton option pricing model for stock options granted during the nine months ended September 30, 2019 and 2018 were as follows: Nine Months Ended September 30, September 30, Expected dividend yield 0 % 0 % Weighted average expected volatility 58 % 58 % Weighted average expected term (years) 5.94 5.90 Weighted average risk-free rate 2.29 % 2.68 %

Earnings per Share (Tables)

Earnings per Share (Tables)	9 Months Ended
	Sep. 30, 2019
Earnings Per Share [Abstract]
Basic and Diluted Net Loss Per Share of Common Stock	The following table presents the calculation of basic and diluted net income per share of common stock for the three and nine months ended September 30, 2019 and 2018 : Three Months Ended Nine Months Ended (in thousands, except for share and per share amounts) September 30, September 30, September 30, September 30, Numerator: Net income $ 100,423 $ 7,171 $ 111,337 $ 14,848 Denominator: Weighted average shares outstanding, basic 53,297,298 52,389,012 53,052,521 50,321,640 Effect of dilutive securities 1,244,327 2,320,737 1,751,330 1,994,002 Weighted average shares outstanding, diluted 54,541,625 54,709,749 54,803,851 52,315,642 Net income per share, basic and diluted: Basic $ 1.88 $ 0.14 $ 2.10 $ 0.30 Diluted $ 1.84 $ 0.13 $ 2.03 $ 0.28 Antidilutive securities excluded from calculations of diluted net income per share 2,646,933 752,194 1,826,279 1,058,058

Business Organization and Pre_2

Business Organization and Presentation (Detail)	9 Months Ended
	Sep. 30, 2019Segment
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of operating segments	1

Summary of Significant Accoun_4

Summary of Significant Accounting Policies - Net Sales by Product (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Revenue from External Customer [Line Items]
Net product sales	$ 59,485	$ 49,135	$ 166,258	$ 140,077
HETLIOZ® product sales, net
Revenue from External Customer [Line Items]
Net product sales	37,589	29,923	104,381	83,391
Fanapt® product sales, net
Revenue from External Customer [Line Items]
Net product sales	$ 21,896	$ 19,212	$ 61,877	$ 56,686

Summary of Significant Accoun_5

Summary of Significant Accounting Policies - Additional Information (Detail)	9 Months Ended
	Sep. 30, 2019Customer
Customer Concentration Risk | Sales Revenue, Net
Summary Of Significant Accounting Policies [Line Items]
Number of major customers that each accounted for more than 10% of total revenues	5
Concentration risk, percentage	96.00%
Credit Concentration Risk | Accounts Receivable
Summary Of Significant Accounting Policies [Line Items]
Concentration risk, percentage	93.00%
Number of major customers that each accounted for more than 10% of total accounts receivable	5

Summary of Significant Accoun_6

Summary of Significant Accounting Policies - Supplemental Cash Flows Information (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018	Sep. 30, 2018	Dec. 31, 2017
Cash and Cash Equivalents [Line Items]
Cash and cash equivalents	$ 39,208	$ 61,005	$ 60,778
Restricted cash included in:
Total cash, cash equivalents and restricted cash	39,950	$ 61,749	61,522	$ 34,335
Prepaid expenses and other current assets
Restricted cash included in:
Restricted cash	157		157
Non-current inventory and other
Restricted cash included in:
Restricted cash	$ 585		$ 587

Summary of Significant Accoun_7

Summary of Significant Accounting Policies - Recent Accounting Pronouncements (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Jan. 01, 2019	Dec. 31, 2018
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease liability	$ 14,916
Operating lease current liabilities	2,123		$ 0
Operating lease right-of-use assets	$ 11,436		$ 0
Accounting Standards Update 2016-02
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease liability		$ 15,800
Operating lease current liabilities		2,200
Operating lease right-of-use assets		$ 12,200

Marketable Securities Available

Marketable Securities Available-For-Sale Marketable Securities (Detail) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	$ 260,116
Gross Unrealized Gains	330
Gross Unrealized Losses	(42)
Fair Market Value	260,404
Current Investments
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	198,296	$ 196,361
Gross Unrealized Gains	287	50
Gross Unrealized Losses	(6)	(56)
Fair Market Value	198,577	196,355
Current Investments | U.S. Treasury and government agencies
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	72,767	69,275
Gross Unrealized Gains	83	12
Gross Unrealized Losses	(4)	(17)
Fair Market Value	72,846	69,270
Current Investments | Corporate debt
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	110,119	105,897
Gross Unrealized Gains	176	38
Gross Unrealized Losses	0	(25)
Fair Market Value	110,295	105,910
Current Investments | Asset-backed securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	15,410	21,189
Gross Unrealized Gains	28	0
Gross Unrealized Losses	(2)	(14)
Fair Market Value	15,436	$ 21,175
Noncurrent Investments
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	61,820
Gross Unrealized Gains	43
Gross Unrealized Losses	(36)
Fair Market Value	61,827
Noncurrent Investments | U.S. Treasury and government agencies
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	14,499
Gross Unrealized Gains	0
Gross Unrealized Losses	(20)
Fair Market Value	14,479
Noncurrent Investments | Corporate debt
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	15,852
Gross Unrealized Gains	28
Gross Unrealized Losses	(2)
Fair Market Value	15,878
Noncurrent Investments | Asset-backed securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	31,469
Gross Unrealized Gains	15
Gross Unrealized Losses	(14)
Fair Market Value	$ 31,470

Fair Value Measurements - Asset

Fair Value Measurements - Assets Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	$ 260,404	$ 196,355
U.S. Treasury and government agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	87,325	69,270
Corporate debt
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	126,173	105,910
Asset-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	46,906	21,175
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	87,325	69,270
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	87,325	69,270
Quoted Prices in Active Markets for Identical Assets (Level 1) | Corporate debt
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Asset-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	0	0
Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	173,079	127,085
Significant Other Observable Inputs (Level 2) | U.S. Treasury and government agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	0	0
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	126,173	105,910
Significant Other Observable Inputs (Level 2) | Asset-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	46,906	21,175
Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	0	0
Significant Unobservable Inputs (Level 3) | U.S. Treasury and government agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	0	0
Significant Unobservable Inputs (Level 3) | Corporate debt
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	0	0
Significant Unobservable Inputs (Level 3) | Asset-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	$ 0	$ 0

Inventory (Detail)

Inventory (Detail) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Current:
Work-in-process	$ 0	$ 48
Finished goods	1,019	946
Total inventory, current	1,019	994
Non-Current:
Raw materials	662	86
Work-in-process	1,131	2,290
Finished goods	1,286	516
Total inventory, non-current	3,079	2,892
Total inventory	$ 4,098	$ 3,886

Leases - Additional Information

Leases - Additional Information (Details) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019USD ($)ft²	Sep. 30, 2018USD ($)	Sep. 30, 2019USD ($)ft²	Sep. 30, 2018USD ($)
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease cost	$ 0.6		$ 1.7
Short-term lease cost	0.1		0.3
Non-lease component expense	$ 0.4		1
Rent expense		$ 0.9		$ 2.7
Operating lease, payments			$ 1.8
Washington DC Lease
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Leased square footage | ft²	33,534		33,534
Renewal term of lease agreement	5 years		5 years
London Lease
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Leased square footage | ft²	2,880		2,880
Renewal term of lease agreement	5 years		5 years
Sublease | Washington DC Lease
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Leased square footage | ft²	9,928		9,928

Leases - Lease Assets and Liabi

Leases - Lease Assets and Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Leases [Abstract]
Operating lease assets	$ 11,436	$ 0
Operating lease current liabilities	2,123	0
Operating lease non-current liabilities	12,793	$ 0
Total lease liabilities	$ 14,916
Weighted average remaining lease term	8 years 3 months 18 days
Weighted-average discount rate	8.10%

Leases - Maturities (Details)

Leases - Maturities (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Leases [Abstract]
2019	$ 633
2020	2,309
2021	2,329
2022	2,355
2023	2,420
Thereafter	10,669
Total minimum lease payments	20,715
Less: amount of lease payments representing interest	(5,799)
Total lease liabilities	14,916
Less: current obligations under leases	(2,123)	$ 0
Operating lease non-current liabilities	$ 12,793	$ 0

Leases - Maturities under ASC 8

Leases - Maturities under ASC 840 (Details) $ in Thousands	Dec. 31, 2018USD ($)
Leases [Abstract]
Total	$ 22,757
2019	2,483
2020	2,495
2021	2,335
2022	2,355
2023	2,420
Thereafter	$ 10,669

Intangible Assets - (HETLIOZ) -

Intangible Assets - (HETLIOZ) - Additional Information (Detail) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended			9 Months Ended
	Apr. 30, 2018	Sep. 30, 2018	Mar. 31, 2015	Mar. 31, 2014	Sep. 30, 2019	Sep. 30, 2018
Finite-Lived Intangible Assets [Line Items]
Acquisition of intangible assets					$ 0	$ 25,000
HETLIOZ®
Finite-Lived Intangible Assets [Line Items]
Acquisition of intangible assets		$ 25,000		$ 8,000
Cumulative worldwide sales milestone	$ 250,000
Intangible assets capitalized			$ 25,000

Intangible Assets - (Fanapt) -

Intangible Assets - (Fanapt) - Additional Information (Detail) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Fanapt®
Finite-Lived Intangible Assets [Line Items]
Fully amortized intangible assets	$ 27.9	$ 27.9

Intangible Assets - Additional

Intangible Assets - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
Intangible asset amortization	$ 376	$ 397	$ 1,135	$ 1,147

Intangible Assets - Summary of

Intangible Assets - Summary of Intangible Assets (Detail) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Finite-Lived Intangible Assets [Line Items]
Net Carrying Amount	$ 23,407	$ 24,542
HETLIOZ®
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	33,000	33,000
Accumulated Amortization	9,593	8,458
Net Carrying Amount	$ 23,407	$ 24,542

Intangible Assets - Summary o_2

Intangible Assets - Summary of Future Intangible Asset Amortization (Detail) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Finite-Lived Intangible Assets [Line Items]
Net Carrying Amount	$ 23,407	$ 24,542
HETLIOZ®
Finite-Lived Intangible Assets [Line Items]
Net Carrying Amount	23,407	$ 24,542
2019	370
2020	1,478
2021	1,478
2022	1,478
2023	1,478
Thereafter	$ 17,125

Accounts Payable and Accrued _3

Accounts Payable and Accrued Liabilities (Detail) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Payables and Accruals [Abstract]
Consulting and other professional fees	$ 4,579	$ 2,924
Research and development expenses	6,709	5,593
Royalties payable	5,783	5,172
Compensation and employee benefits	5,490	6,363
Operating lease liabilities	2,123	0
Other	2,308	1,532
Accounts payable and accrued liabilities	$ 26,992	$ 21,584

Commitments and Contingencies -

Commitments and Contingencies - Summary of Noncanellable Long-Term Contractual Cash Obligations (Detail) $ in Thousands	Sep. 30, 2019USD ($)
Purchase commitments
Purchase commitments	$ 12,872
2019	225
2020	11,200
2021	966
2022	481
2023	0
Thereafter	$ 0

Commitments and Contingencies_2

Commitments and Contingencies - (HETLIOZ) - Additional Information (Detail) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended			9 Months Ended
	Apr. 30, 2018	Sep. 30, 2018	Mar. 31, 2015	Mar. 31, 2014	Sep. 30, 2019	Sep. 30, 2018
HETLIOZ
Acquisition of intangible assets					$ 0	$ 25,000
Percentage of future sublicense fees payable to third-party					mid-twenties
HETLIOZ®
HETLIOZ
Acquisition of intangible assets		$ 25,000		$ 8,000
Cumulative worldwide sales milestone	$ 250,000
Intangible assets capitalized			$ 25,000
Royalty payment period					10 years
Royalty payable percentage on net sales					10.00%

Commitments and Contingencies_3

Commitments and Contingencies - (Fanapt) - Additional Information (Detail)	9 Months Ended
	Sep. 30, 2019
November 16,2016 through December 31,2019
Fanapt
Royalty payable percentage on net sales	3.00%
Fanapt®
Fanapt
Royalty payable percentage on net sales	6.00%
Royalty payment period	10 years

Commitments and Contingencies_4

Commitments and Contingencies - (Tradipitant) - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2019	Dec. 31, 2018	Dec. 31, 2017
Commitments and Contingencies [Line Items]
Milestone obligation under license agreement		$ 0	$ 200
Tradipitant
Commitments and Contingencies [Line Items]
Future percentage of royalty payments based net sales		low double digits
Possible future milestone payment		$ 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 | Sales Milestone
Commitments and Contingencies [Line Items]
Possible future milestone payment		80,000
UNITED STATES | Tradipitant | Regulatory Approval Milestone
Commitments and Contingencies [Line Items]
Possible future milestone payment		10,000
Europe | Tradipitant | Regulatory Approval Milestone
Commitments and Contingencies [Line Items]
Possible future milestone payment		$ 5,000

Commitments and Contingencies_5

Commitments and Contingencies - (VQW-765) - Additional Information (Detail)	9 Months Ended
	Sep. 30, 2019
VQW-765
Commitments and Contingencies [Line Items]
Future percentage of royalty payments based net sales	mid-teens

Commitments and Contingencies_6

Commitments and Contingencies - (CFTR Activators and Inhibitors) - Additional Information (Detail) - CFTR Activators and Inhibitors - USD ($) $ in Thousands	3 Months Ended	9 Months Ended	12 Months Ended
	Mar. 31, 2019	Sep. 30, 2019	Dec. 31, 2017
Commitments and Contingencies [Line Items]
Future percentage of royalty payments based net sales		single-digit
CFTR activators and inhibitors
Possible future milestone payments	$ 200
Milestone payment under license agreement			$ 1,000
Regulatory Approval Milestone
CFTR activators and inhibitors
Possible future milestone payments		$ 12,200
Future Regulatory Approval And Sales Milestones
CFTR activators and inhibitors
Possible future milestone payments		33,000
Development And Milestone Payment, Conclusion Of Phase I Study
CFTR activators and inhibitors
Possible future milestone payments		350
Maximum | Development And Milestone Payment, Conclusion Of Phase I Study
CFTR activators and inhibitors
Possible future milestone payments		$ 1,100

Commitments and Contingencies_7

Commitments and Contingencies - Research and Development and Marketing Agreements (Details)	9 Months Ended
	Sep. 30, 2019
Commitments and Contingencies Disclosure [Abstract]
Agreements for clinical and marketing services, termination notice period	90 days

Public Offering of Common Sto_2

Public Offering of Common Stock (Detail) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	9 Months Ended
	Mar. 31, 2018	Sep. 30, 2019	Sep. 30, 2018
Subsidiary, Sale of Stock [Line Items]
Net proceeds from public offering		$ 0	$ 100,870
Public Offering
Subsidiary, Sale of Stock [Line Items]
Public offering of common stock (in shares)	6,325,000
Public offerings of common stock (in dollars per share)	$ 17
Net proceeds from public offering	$ 100,900
Over-Allotment Option
Subsidiary, Sale of Stock [Line Items]
Public offering of common stock (in shares)	825,000

Accumulated Other Comprehensi_3

Accumulated Other Comprehensive Income - Summary of Accumulated Balances Related to Each Component of Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]
Foreign currency translation	$ (10)	$ 7
Unrealized gain (loss) on marketable securities	221	(6)
Accumulated other comprehensive income	$ 211	$ 1

Accumulated Other Comprehensi_4

Accumulated Other Comprehensive Income - Additional Information (Detail) - USD ($)	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
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

Stock-Based Compensation - (Sto

Stock-Based Compensation - (Stock-Based Compensation) - Additional Information (Detail)	9 Months Ended
	Sep. 30, 2019shares
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 (in shares)	6,324,304
2016 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares of common stock reserved for issuance (in shares)	7,100,000
Number of shares of common stock available for future grant (in shares)	3,063,197

Stock-Based Compensation - (S_2

Stock-Based Compensation - (Stock Option) - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
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 for subsequent stock options granted to directors	1 year
Options granted, weighted average fair value per share (in dollars per share)	$ 10.34	$ 10.66
Proceeds from exercise of employee stock options	$ 4,148	$ 5,464
Service option awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expenses	$ 10,700
Unrecognized compensation expenses, weighted average period	1 year 6 months

Stock-Based Compensation - (RSU

Stock-Based Compensation - (RSU) - Additional Information (Detail) - Restricted Stock Units (RSU) $ in Millions	9 Months Ended
	Sep. 30, 2019USD ($)shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period of RSU awards in equal installments	4 years
Unrecognized compensation expenses related to unvested RSUs	$ 25.3
Unrecognized compensation expenses, weighted average period	1 year 10 months 24 days
Grant date fair value of common stock granted (in shares) | shares	517,801
Grant date fair value of common stock vested	$ 7.5

Stock-Based Compensation - Summ

Stock-Based Compensation - Summary of Option Activity for 2006 Plan and the 2016 Plan (Detail) - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Number of Shares
Expired (in shares)	(15,000)
Weighted Average Exercise Price at Grant Date
Expired (in dollars per share)	$ 14.78
2006 Plan and 2016 Plan
Number of Shares
Beginning balance (in shares)	4,369,042
Granted (in shares)	652,500
Forfeited (in shares)	0
Exercised (in shares)	(338,317)
Ending balance (in shares)	4,668,225	4,369,042
Exercisable (in shares)	3,489,627
Vested and expected to vest at end of period (in shares)	4,459,638
Weighted Average Exercise Price at Grant Date
Beginning balance (in dollars per share)	$ 11.15
Granted (in dollars per share)	18.60
Forfeited (in dollars per share)	0
Exercised (in dollars per share)	12.26
Ending balance (in dollars per share)	12.10	$ 11.15
Exercisable (in dollars per share)	10.21
Vested and expected to vest at end of period (in dollars per share)	$ 11.81
Weighted Average Remaining Term (Years)
Weighted Average Remaining Term	5 years 6 months 21 days	5 years 3 months 10 days
Exercisable	4 years 5 months 15 days
Vested and expected to vest at end of period	5 years 4 months 17 days
Aggregate Intrinsic Value
Beginning balance	$ 65,438
Exercised	1,083
Ending balance	12,673	$ 65,438
Exercisable	12,343
Vested and expected to vest at end of period	$ 12,652

Stock-Based Compensation - Su_2

Stock-Based Compensation - Summary of RSU Activity Plan (Detail) - Restricted Stock Units (RSU)	9 Months Ended
	Sep. 30, 2019$ / sharesshares
Number of Shares Unvested
Beginning balance (in shares) | shares	1,313,576
Granted (in shares) | shares	915,328
Forfeited (in shares) | shares	(55,024)
Vested (in shares) | shares	(517,801)
Ending balance (in shares) | shares	1,656,079
Weighted Average Price/Share Unvested
Beginning balance (in dollars per share) | $ / shares	$ 15.68
Granted (in dollars per share) | $ / shares	19.58
Forfeited (in dollars per share) | $ / shares	18.93
Vested (in dollars per share) | $ / shares	14.49
Ending balance (in dollars per share) | $ / shares	$ 18.09

Stock-Based Compensation - Tota

Stock-Based Compensation - Total Stock-Based Compensation Expense (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	$ 3,407	$ 2,872	$ 9,790	$ 8,744
Research and development
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	827	326	2,311	963
Selling, general and administrative
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	$ 2,580	$ 2,546	$ 7,479	$ 7,781

Stock-Based Compensation - Blac

Stock-Based Compensation - Black-Scholes-Merton Option Pricing Model for Stock Options Granted (Detail)	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Expected dividend yield	0.00%	0.00%
Weighted average expected volatility	58.00%	58.00%
Weighted average expected term (years)	5 years 11 months 8 days	5 years 10 months 24 days
Weighted average risk-free rate	2.29%	2.68%

Income Taxes (Details)

Income Taxes (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Operating Loss Carryforwards [Line Items]
Income tax expense (benefit)	$ (88,147,000)	$ 92,000	$ (88,119,000)	$ 180,000
Unrecognized tax benefits	9,700,000		9,700,000		$ 0
Research Tax Credit
Operating Loss Carryforwards [Line Items]
Income tax expense (benefit)	$ (1,600,000)		$ (1,600,000)

Earnings per Share (Detail)

Earnings per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Sep. 30, 2019	Sep. 30, 2018
Numerator:
Net income	$ 100,423	$ 11,526	$ (612)	$ 7,171	$ 4,611	$ 3,066	$ 111,337	$ 14,848
Denominator:
Weighted average shares outstanding, basic (in shares)	53,297,298			52,389,012			53,052,521	50,321,640
Effect of dilutive securities (in shares)	1,244,327			2,320,737			1,751,330	1,994,002
Weighted average shares outstanding, diluted (in shares)	54,541,625			54,709,749			54,803,851	52,315,642
Net income per share, basic and diluted:
Basic (in dollars per share)	$ 1.88			$ 0.14			$ 2.10	$ 0.30
Diluted (in dollars per share)	$ 1.84			$ 0.13			$ 2.03	$ 0.28
Antidilutive securities excluded from calculations of diluted net income per share (in shares)	2,646,933			752,194			1,826,279	1,058,058