Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Mar. 14, 2014 | Jun. 30, 2013 | |
Document and Entity Information | ' | ' | ' |
Entity Registrant Name | 'SUPERNUS PHARMACEUTICALS INC | ' | ' |
Entity Central Index Key | '0001356576 | ' | ' |
Document Type | '10-K | ' | ' |
Document Period End Date | 31-Dec-13 | ' | ' |
Amendment Flag | 'false | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Entity Well-known Seasoned Issuer | 'No | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Filer Category | 'Smaller Reporting Company | ' | ' |
Entity Public Float | ' | ' | $49,114,520 |
Entity Common Stock, Shares Outstanding | ' | 42,044,197 | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $32,980 | $40,302 |
Marketable securities | 49,211 | 48,206 |
Accounts receivable, net | 5,054 | 11 |
Interest receivable | 483 | 664 |
Inventories | 7,152 | 1,152 |
Prepaid expenses and other current assets | 2,052 | 983 |
Deferred financing costs, current | 229 | 144 |
Total current assets | 97,161 | 91,462 |
Property and equipment, net | 2,554 | 1,421 |
Intangible assets, net | 1,158 | 683 |
Long term investments | 8,756 | ' |
Other non-current assets | 361 | 334 |
Deferred financing costs, long-term | 1,005 | 89 |
Total assets | 110,995 | 93,989 |
Current liabilities: | ' | ' |
Accounts payable and accrued expenses | 18,314 | 10,666 |
Deferred product revenue, net | 7,882 | ' |
Deferred licensing revenue | 204 | 508 |
Secured notes payable, net of discount | ' | 11,809 |
Total current liabilities | 26,400 | 22,983 |
Deferred licensing revenue, net of current portion | 1,417 | 309 |
Convertible notes, net of discount | 34,393 | ' |
Secured notes payable, net of current portion and discount | ' | 11,088 |
Other non-current liabilities | 2,677 | 1,788 |
Derivative liabilities | 12,644 | 251 |
Total liabilities | 77,531 | 36,419 |
Stockholders' equity: | ' | ' |
Common stock, $0.001 par value, 130,000,000 shares authorized at December 31, 2013 and 2012; 39,983,437 and 30,621,869 shares issued and outstanding at December 31, 2013 and 2012, respectively | 40 | 31 |
Additional paid-in capital | 211,952 | 143,851 |
Accumulated other comprehensive loss | ' | -57 |
Accumulated deficit | -178,528 | -86,255 |
Total stockholders' equity | 33,464 | 57,570 |
Total liabilities and stockholders' equity | $110,995 | $93,989 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Consolidated Balance Sheets | ' | ' |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized | 130,000,000 | 130,000,000 |
Common stock, shares issued | 39,983,437 | 39,983,437 |
Common stock, shares outstanding | 30,621,869 | 30,621,869 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Revenue | ' | ' | ' |
Net product sales | $11,552 | ' | ' |
Licensing revenue | 467 | 1,480 | 803 |
Total revenue | 12,019 | 1,480 | 803 |
Costs and expenses | ' | ' | ' |
Cost of product sales | 1,104 | ' | ' |
Research and development | 17,245 | 23,517 | 30,627 |
Selling, general and administrative | 55,590 | 20,132 | 7,928 |
Total costs and expenses | 73,939 | 43,649 | 38,555 |
Operating loss | -61,920 | -42,169 | -37,752 |
Other income (expense) | ' | ' | ' |
Interest income | 299 | 120 | 31 |
Interest expense | -7,849 | -3,575 | -1,866 |
Changes in fair value of derivative liabilities | -13,354 | -710 | -85 |
Loss on extinguishment of debt | -9,550 | ' | ' |
Other income | 101 | 50 | 202 |
Total other expense | -30,353 | -4,115 | -1,718 |
Loss from continuing operations before income tax benefit | -92,273 | -46,284 | -39,470 |
Income tax benefit | 0 | 0 | 16,245 |
Loss from continuing operations | -92,273 | -46,284 | -23,225 |
Discontinued operations: | ' | ' | ' |
Income from discontinued operations, net of tax | ' | ' | 2,188 |
Gain on disposal of discontinued operations, net of tax | ' | ' | 74,852 |
Income from discontinued operations | ' | ' | 77,040 |
Net (loss) income | -92,273 | -46,284 | 53,815 |
Cumulative dividends on Series A convertible preferred stock | ' | -1,143 | -3,430 |
Net (loss) income attributable to common stockholders | ($92,273) | ($47,427) | $50,385 |
Basic and diluted | ' | ' | ' |
Continuing operations (in dollars per share) | ($2.90) | ($2.72) | ($16.60) |
Discontinued operations (in dollars per share) | ' | ' | $47.99 |
Net (loss) income per share, basic and diluted (in dollars per share) | ($2.90) | ($2.72) | $31.39 |
Weighted-average number of common shares: | ' | ' | ' |
Basic and diluted (in shares) | 31,848,299 | 17,440,910 | 1,605,324 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (Loss) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Consolidated Statements of Comprehensive Income (Loss) | ' | ' | ' |
Net (loss) income | ($92,273) | ($46,284) | $53,815 |
Other comprehensive (loss) income: | ' | ' | ' |
Unrealized net (loss) gain on marketable securities | 57 | -58 | 1 |
Other comprehensive (loss) income | 57 | -58 | 1 |
Comprehensive (loss) income | ($92,216) | ($46,342) | $53,816 |
Consolidated_Statements_of_Cha
Consolidated Statements of Changes in Stockholder's Equity (USD $) | Total | Series A Convertible Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit |
In Thousands, except Share data, unless otherwise specified | ||||||
Balance at Dec. 31, 2010 | ($44,320) | $49 | $2 | $49,415 | ' | ($93,786) |
Balance (in shares) at Dec. 31, 2010 | ' | 49,000,000 | 1,592,762 | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' | ' |
Exercise of stock options | 29 | ' | ' | 29 | ' | ' |
Exercise of stock options (in shares) | ' | ' | 69,559 | ' | ' | ' |
Share-based compensation | -82 | ' | ' | -82 | ' | ' |
Net (loss) income | 53,815 | ' | ' | ' | ' | 53,815 |
Other comprehensive income (loss) | 1 | ' | ' | ' | 1 | ' |
Balance at Dec. 31, 2011 | 9,443 | 49 | 2 | 49,362 | 1 | -39,971 |
Balance (in shares) at Dec. 31, 2011 | ' | 49,000,000 | 1,662,321 | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' | ' |
Share-based compensation | 443 | ' | ' | 443 | ' | ' |
Issuance of employee stock purchase plan shares | 223 | ' | ' | 223 | ' | ' |
Issuance of employee stock purchase plan shares (in shares) | ' | ' | 36,727 | ' | ' | ' |
Exercise of stock options | 265 | ' | ' | 265 | ' | ' |
Exercise of stock options (in shares) | ' | ' | 159,264 | ' | ' | ' |
Warrant Exercise | 1,156 | ' | ' | 1,156 | ' | ' |
Warrant Exercise (in shares) | ' | ' | 64,309 | ' | ' | ' |
Issuance of common stock, net of underwriters' discount and offering costs | 92,382 | ' | 17 | 92,365 | ' | ' |
Issuance of common stock, net of underwriters' discount and offering costs (in shares) | ' | ' | 16,449,250 | ' | ' | ' |
Conversion of preferred stock to common stock | ' | -49 | 12 | 37 | ' | ' |
Conversion of preferred stock to common stock to common stock (in shares) | ' | -49,000,000 | 12,249,998 | ' | ' | ' |
Net (loss) income | -46,284 | ' | ' | ' | ' | -46,284 |
Other comprehensive income (loss) | -58 | ' | ' | ' | -58 | ' |
Balance at Dec. 31, 2012 | 57,570 | ' | 31 | 143,851 | -57 | -86,255 |
Balance (in shares) at Dec. 31, 2012 | ' | ' | 30,621,869 | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' | ' |
Exercise of over allotment from secondary offering | 1,791 | ' | ' | 1,791 | ' | ' |
Exercise of over allotment from secondary offering (in shares) | ' | ' | 239,432 | ' | ' | ' |
Share-based compensation | 1,913 | ' | ' | 1,913 | ' | ' |
Issuance of employee stock purchase plan shares | 444 | ' | ' | 444 | ' | ' |
Issuance of employee stock purchase plan shares (in shares) | ' | ' | 81,370 | ' | ' | ' |
Exercise of stock options | 78 | ' | ' | 78 | ' | ' |
Exercise of stock options (in shares) | ' | ' | 62,513 | ' | ' | ' |
Equity conversion feature on issuance of convertible notes, less issuance costs of $869 | 21,467 | ' | ' | 21,467 | ' | ' |
Equity issued on conversion of convertible notes | 42,417 | ' | 9 | 42,408 | ' | ' |
Equity issued on conversion of convertible notes (in shares) | ' | ' | 8,978,253 | ' | ' | ' |
Net (loss) income | -92,273 | ' | ' | ' | ' | -92,273 |
Other comprehensive income (loss) | 57 | ' | ' | ' | 57 | ' |
Balance at Dec. 31, 2013 | $33,464 | ' | $40 | $211,952 | ' | ($178,528) |
Balance (in shares) at Dec. 31, 2013 | ' | ' | 39,983,437 | ' | ' | ' |
Consolidated_Statements_of_Cha1
Consolidated Statements of Changes in Stockholder's Equity (Parenthetical) (USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2013 |
Consolidated Statements of Changes in Stockholder's Equity | ' |
Equity conversion feature on issuance of convertible notes, issuance costs | $869 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Cash flows from operating activities | ' | ' | ' |
Net (loss) income | ($92,273) | ($46,284) | $53,815 |
Income from discontinued operations | ' | ' | -77,040 |
Loss from continuing operations | -92,273 | -46,284 | -23,225 |
Adjustments to reconcile (loss) income from continuing operations to net cash used in operating activities: | ' | ' | ' |
Loss on extinguishment of debt | 9,550 | ' | ' |
Gain on sale of property and equipment | ' | ' | -25 |
Change in fair value of derivative liability | 13,354 | 710 | 85 |
Unrealized gain (loss) on marketable securities | 57 | -57 | 1 |
Depreciation and amortization | 742 | 871 | 879 |
Income tax benefit | 0 | 0 | -16,245 |
Amortization of deferred financing costs and debt discount | 3,033 | 330 | 218 |
Share-based compensation expense | 1,913 | 443 | -82 |
Changes in operating assets and liabilities : | ' | ' | ' |
Accounts receivable | -5,043 | -11 | 44 |
Interest receivable | 181 | -664 | 114 |
Inventory | -6,000 | -1,152 | ' |
Prepaid expenses and other assets | -1,070 | -516 | -247 |
Accounts payable and accrued expenses | 8,492 | -1,098 | -959 |
Deferred product revenue, net | 7,883 | ' | ' |
Deferred licensing revenue | 803 | 120 | 697 |
Other non-current liabilities | 429 | 109 | 539 |
Net cash used in operating activities from continuing operations | -57,949 | -47,199 | -38,206 |
Net cash provided by operating activities from discontinued operations | ' | ' | 2,021 |
Net cash used in operating activities | -57,949 | -47,199 | -36,185 |
Cash flows from investing activities | ' | ' | ' |
Purchases of marketable securities | -85,567 | -97,674 | -17,890 |
Sales and maturities of marketable securities | 75,806 | 49,468 | 26,870 |
Purchases of property and equipment, net | -1,646 | -753 | -685 |
Capitalized patent defense costs | -705 | ' | ' |
Net cash (used in) provided by investing activities from continuing operations | -12,112 | -48,959 | 8,295 |
Net cash provided by disposal/sale of discontinued operations | ' | ' | 25,607 |
Net cash (used in) provided by investing activities | -12,112 | -48,959 | 33,902 |
Cash flows from financing activities | ' | ' | ' |
Proceeds from issuance of common stock | 2,437 | 100,735 | 29 |
Proceeds from issuance of secured notes payable | ' | ' | 30,000 |
Proceeds from convertible debt issuance | 90,000 | ' | ' |
Repayment of secured notes payable | -24,344 | -6,775 | ' |
Cash settlement of debt to equity conversion | -1,727 | ' | ' |
Financing costs and underwriters discounts | -3,627 | -6,044 | -975 |
Net cash provided by financing activities from continuing operations | 62,739 | 87,916 | 29,054 |
Net cash used in financing activities from discontinued operations | ' | ' | -1,967 |
Net cash provided by financing activities | 62,739 | 87,916 | 27,087 |
Net change in cash and cash equivalents | -7,322 | -8,242 | 24,804 |
Cash and cash equivalents at beginning of year | 40,302 | 48,544 | 23,740 |
Cash and cash equivalents at end of year | 32,980 | 40,302 | 48,544 |
Supplemental cash flow information: | ' | ' | ' |
Cash paid for interest- Continuing operations | 4,313 | 2,938 | 1,412 |
Noncash financial activity: | ' | ' | ' |
Conversion of convertible notes | 42,417 | ' | ' |
Conversion of preferred stock | ' | 49 | ' |
Issuance of warrants | ' | ' | 612 |
Exercise of warrants | ' | $1,156 | ' |
Organization_and_Nature_of_Ope
Organization and Nature of Operations | 12 Months Ended |
Dec. 31, 2013 | |
Organization and Nature of Operations | ' |
Organization and Nature of Operations | ' |
1. Organization and Nature of Operations | |
Supernus Pharmaceuticals, Inc. (the Company) was incorporated in Delaware on March 30, 2005, and commenced operations on December 22, 2005. The Company is a specialty pharmaceutical company focused on developing and commercializing products for the treatment of central nervous system diseases, including neurological and psychiatric disorders. The Company markets two epilepsy products, Oxtellar XR and Trokendi XR, and has several proprietary product candidates in clinical development that address the attention deficit hyperactivity disorder market. | |
The Company commenced the commercialization of Oxtellar XR and Trokendi XR in 2013. Oxtellar XR received final approval from the Food and Drug Administration (FDA) on October 19, 2012 and the Company launched this product on February 4, 2013. The Company received final approval from the FDA for Trokendi XR on August 16, 2013 and the Company launched this product on August 26, 2013. | |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Summary of Significant Accounting Policies | ' | ||||
Summary of Significant Accounting Policies | ' | ||||
2. Summary of Significant Accounting Policies | |||||
Basis of Presentation | |||||
The Company's consolidated financial statements include the accounts of Supernus Pharmaceuticals, Inc. and Supernus Europe Ltd., These are collectively referred to herein as "Supernus" or "the Company." All significant intercompany transactions and balances have been eliminated in consolidation. The Company's consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (U.S. GAAP). | |||||
The Company, which is primarily located in the United States, operates in one business segment. | |||||
The assets and liabilities related to TCD Royalty Sub LLC (TCD) have identifiable cash flows that are largely independent of the cash flows of other groups of assets and liabilities, and the Company does not have significant continuing involvement with the related products. Accordingly, the results of operations, related to TCD are presented as discontinued operations until its disposition on December 14, 2011. | |||||
Use of Estimates | |||||
The preparation of the financial statements in accordance with U.S. GAAP requires the Company to make estimates and judgments in certain circumstances that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. In preparing these consolidated financial statements, management has made its best estimates and judgments of certain amounts included in the financial statements, giving due consideration to materiality. On an ongoing basis, the Company evaluates its estimates, including those related to revenue recognition, fair value of financial assets and liabilities, common stock options and warrants, income taxes, preclinical study and clinical trial accruals, and other contingencies. Management bases its estimates on historical experience or on various other assumptions, including information received from its service providers and independent valuation consultants, which it believes to be reasonable under the circumstances. Actual results could differ from these estimates. | |||||
Cash and Cash Equivalents | |||||
The Company considers all investments in highly liquid financial instruments with an original maturity of three months or less to be cash equivalents. | |||||
Marketable Securities | |||||
Marketable securities may consist of investments in U.S. Treasuries, various U.S. governmental agency debt securities, corporate bonds and other fixed income securities. Management classifies the Company's investments as available-for-sale. Such securities are carried at estimated fair value, with any unrealized holding gains or losses reported, net of any tax effects reported, as accumulated other comprehensive income, which is a separate component of stockholders' equity. Realized gains and losses, and declines in value judged to be other-than-temporary, if any, are included in consolidated results of operations. A decline in the market value of any available-for-sale security below cost that is deemed to be other-than-temporary results in a reduction in fair value, which is charged to earnings in that period, and a new cost basis for the security is established. Dividend and interest income is recognized as interest income when earned. The cost of securities sold is calculated using the specific identification method. The Company places all investments with highly rated government or private sector or industrial financial institutions whose debt is rated as investment grade. | |||||
The Company established the Supernus Supplemental Executive Retirement Plan (SERP) for the sole purpose of receiving funds for two executives from a previous SERP and providing a continuing deferral program under the Supernus SERP. As of December 31, 2013 and December 31, 2012, the estimated fair value of the mutual fund investment securities within the SERP was approximately $305,000 and $279,000 respectively. The fair value of these assets is included within other non-current assets on the consolidated balance sheets. A corresponding noncurrent liability is also included in the consolidated balance sheets to reflect the Company's obligation for the SERP. The Company has not made, and has no plans to make, contributions to the SERP. The securities are restricted in nature and can only be used for purposes of paying benefits under the SERP. | |||||
Accounts Receivable, net | |||||
Accounts receivable are reported in the consolidated balance sheets at outstanding amounts, less an allowance for doubtful accounts if necessary and net of prompt pay discounts. The Company extends credit without requiring collateral. The Company writes off uncollectible receivables when the likelihood of collection is remote. The Company evaluates the collectability of accounts receivable on a regular basis. An allowance for uncollectible receivables is based upon various factors including the financial condition and payment history of customers, an overall review of collections experience on other accounts, and economic factors or events expected to affect future collections experience. No accounts have been written off in 2013 and 2012. No allowance for uncollectible receivables is recorded at December 31, 2013 or December 31, 2012. The Company has an allowance of $0.1 million for expected prompt-pay discounts as of December 31, 2013 and no allowance at December 31, 2012. The following table includes those customers that represent more than 10% total revenue: | |||||
Customer A | 34 | % | |||
Customer B | 34 | % | |||
Customer C | 26 | % | |||
Three customers each having a balance of more than 10% of the accounts receivable balance on the consolidated balance sheet as of December 31, 2013 represent an aggregate of 96.4% of accounts receivable. | |||||
Concentration of Credit Risk | |||||
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash, cash equivalents, accounts receivable and marketable securities. The counterparties are various corporations and financial institutions of high credit standing. | |||||
Substantially all of the Company's cash and cash equivalents are maintained with well known, U.S. and non U.S. financial institutions, government agencies, and corporations. Deposits held with banks may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed upon demand and, therefore, management believes they bear minimal risk. | |||||
Inventory | |||||
Inventories, which are recorded at the lower of cost or market, include materials, labor, and other direct and indirect costs and are valued using the first-in, first-out method. The Company capitalizes inventories produced in preparation for commercial launches when it becomes probable that the related product candidates will receive regulatory approval and that the related costs will be recoverable through the commercial sale of the product. In the case of Oxtellar XR, manufacturing costs have been capitalized since October 2012, when the Company received tentative approval from the FDA for the commercialization of Oxtellar XR. In the case of Trokendi XR, manufacturing costs have been capitalized since June 2012, when the Company received tentative approval from the FDA for the commercialization of Trokendi XR. | |||||
Inventory is evaluated for impairment through consideration of factors such as the net realizable value, lower of cost or market, obsolescence, and expiry. Inventories do not have carrying values that exceed either cost or net realizable value. The company had no inventory reserve at December 31, 2013 and December 31, 2012. | |||||
Property and Equipment | |||||
Property and equipment are stated at cost. Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is credited or charged to operations. Repairs and maintenance costs are expensed as incurred. Depreciation and amortization are computed using the straight-line method over the following average useful lives: | |||||
Computer equipment | 3Â years | ||||
Software | 3Â years | ||||
Lab equipment and furniture | 5 - 10Â years | ||||
Leasehold improvements | Shorter of lease term or useful life | ||||
Intangible Assets | |||||
Intangible assets consist primarily of purchased patents. Patents are carried at cost less accumulated amortization, which is calculated on a straight-line basis over the estimated useful lives of the patents, generally estimated to be ten years. The carrying value of the patents is assessed for impairment annually during the fourth quarter of each year, or more frequently if impairment indicators exist. There were no indicators of impairment identified at December 31, 2013 or 2012. | |||||
Impairment of Long-Lived Assets | |||||
Long-lived assets consist primarily of purchased patents and property and equipment. The Company assesses the recoverability of its long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If indications of impairment exist, projected future undiscounted cash flows associated with the asset are compared to the carrying amount to determine whether the asset's value is recoverable. Evaluating for impairment requires judgment, including the estimation of future cash flows, future growth rates and profitability and the expected life over which cash flows will occur. Changes in the Company's business strategy or adverse changes in market conditions could impact impairment analyses and require the recognition of an impairment charge equal to the excess of the carrying value of the long-lived assets over its estimated fair value. For the years ended December 31, 2013 and 2012, the Company determined that there was no impairment of the Company's long-lived assets. | |||||
Deferred Financing Costs | |||||
Deferred financing costs consist of financing costs incurred by the Company in connection with the closing of the Company's 7.50% Convertible Senior Secured Notes and Secured Notes Payable (see Note 8). The Company amortizes deferred financing costs over the term of the related debt using the effective interest method. Upon extinguishment of debt the related deferred financing costs are written off. | |||||
Preclinical Study and Clinical Trial Accruals and Deferred Advance Payments | |||||
The Company estimates preclinical study and clinical trial expenses based on the services performed pursuant to contracts with research institutions, investigators, and clinical research organizations that conduct these activities on our behalf. In recording service fees, the Company estimates the time period over which the related services will be performed and compares the level of effort expended through the end of each period to the cumulative expenses recorded and payments made for such services and, as appropriate, accrues additional service fees or defers any non-refundable advance payments until the related services are performed. If the actual timing of the performance of services or the level of effort varies from the estimate, the Company will adjust its accrual or deferred advance payment accordingly. If the Company later determines that it no longer expects the services associated with a nonrefundable advance payment to be rendered, the advance payment will be charged to expense in the period that such determination is made. | |||||
Income Taxes | |||||
The Company utilizes the liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax reporting bases of assets and liabilities and are measured using enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. Valuation allowances are established to reduce deferred tax assets to the amounts expected to be realized. | |||||
The Company accounts for uncertain tax positions in its consolidated financial statements when it is more-likely-than-not that the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts. The Company's policy is to recognize any interest and penalties related to income taxes in income tax expense. | |||||
Revenue Recognition on Product Sales | |||||
Revenue from product sales are recognized when persuasive evidence of an arrangement exists, delivery has occurred and title of the product and associated risk of loss has passed to the customer, the price is fixed or determinable, collection from the customer has been reasonably assured and all performance obligations have been met and returns and allowances can be reasonably estimated. Product sales are recorded net of estimated rebates, chargebacks, discounts, co-pay assistance and other deductions (collectively, "sales deductions") as well as estimated product returns. | |||||
Oxtellar XR Gross Revenue | |||||
The Company launched Oxtellar XR on February 4, 2013. During the fourth quarter of 2013, we began to recognize revenue for Oxtellar XR contemporaneously upon shipment of finished product to wholesalers less allowances for estimated net sales deductions (defined below). | |||||
Trokendi XR Gross Revenue | |||||
Our products are distributed through wholesalers and pharmaceutical distributors. Each of these wholesalers and distributors will take title and ownership of the product upon physical receipt of the product and then distribute our products to the pharmacies. Though these distributors will be invoiced concurrent with product shipment, we will be unable to recognize revenue upon shipment until such time as we can reasonably estimate and record provisions for sales deductions and product returns utilizing historical information and market research projections. | |||||
The Company launched Trokendi XR on August 26, 2013. Through December 31, 2013 the Company recorded shipments to wholesalers as deferred revenue i.e., sales price net of known sales deductions (e.g. prompt pay discounts and other similar charges defined below). We lack the experiential data which would allow us to estimate all remaining sales rebates, allowances and returns. Accordingly, we must wait until these data become available to the Company. | |||||
Rather than recognize revenue upon shipments to wholesalers, the Company currently recognizes Trokendi XR revenue upon filling prescriptions at pharmacies because prescriptions filled at the pharmacy level have no remaining right of return. However, because we are still compiling historical data related to our experience with other sales deductions, we cannot reasonably estimate all other sales rebates and allowances, but rather must wait until this data becomes available to the Company. Because this occurs approximately eight weeks after the close of the quarter, the Company currently delays recognition of revenue until the subsequent fiscal quarter. | |||||
The Company believes the compilation of sufficient product specific historical data to reasonably estimate returns, rebates, and allowances for Trokendi XR may be available by the second quarter of 2014, at which time the Company may record revenue based on shipments to wholesalers rather than on prescriptions filled at the pharmacy level. | |||||
With respect to prescriptions which were filled in the third quarter, data on rebates and allowances were generally received by the end of November. As a result of the time lag between the end of the quarter and receipt of these data, the Company could not determine net revenue in a timeframe which would allow reporting third quarter net revenue in the Form 10-Q filed for the quarter ended September 30, 2013. Consequently, revenue generated from prescriptions filled at the pharmacy level in the third quarter are being reported in the Company's fourth quarter financial results. We expect to continue to report revenue based on prescriptions filled at the pharmacy level until sufficient experience with rebates and allowances is assembled to allow reporting of revenue based on shipments to wholesalers. | |||||
Net Sales Deductions | |||||
Allowances for estimated sales deductions are provided for the following: | |||||
• | |||||
Rebates.  Allowances for rebates include mandated discounts under the Medicaid Drug Rebate Program, the Medicare coverage gap program, as well as negotiated discounts with commercial health-care providers. Rebates are amounts owed after the final dispensing of products to a benefit plan participant and are based upon contractual agreements or legal requirements with the public sector (e.g. Medicaid) and with private sector benefit providers. The allowance for rebates is based on statutory and contractual discount rates and expected claimed rebates paid based on a plan provider's utilization. Our estimates for expected claimed rebates are based in part on third party market research. Rebates are generally invoiced and paid quarterly in arrears so that the accrual balance consists of an estimate of the amount expected to be incurred for the current quarter's activity, plus an accrual balance for known prior quarters' unpaid rebates. If actual future rebates vary from estimates, we may need to adjust prior period accruals, which would affect revenue in the period of adjustment. | |||||
• | |||||
Chargebacks.  Chargebacks are discounts that occur when contracted customers purchase directly from an intermediary distributor or wholesaler. Contracted customers, which currently consist primarily of Public Health Service institutions and Federal government entities purchasing via the Federal Supply Schedule, generally purchase the product at a discounted price. The distributor or wholesaler, in turn, charges back the difference between the price initially paid by the distributor or wholesaler and the discounted price paid to the distributor or wholesaler by the customer. The allowance for distributor/wholesaler chargebacks is based on known sales to contracted customers. | |||||
• | |||||
Distributor/Wholesaler deductions and discounts.  U.S. specialty distributors and wholesalers are offered various forms of consideration including allowances, service fees and prompt payment discounts as consideration for distributing our products. Distributor allowances and service fees arise from contractual agreements with distributors and are generally a percentage of the purchase price paid by the distributors and wholesalers. Wholesale customers are offered a prompt pay discount for payment within a specified period. | |||||
• | |||||
Co-pay assistance.  Patients who pay in cash or have commercial insurance and meet certain eligibility requirements may receive co-pay assistance from the Company. The intent of this program is to reduce the patient's out of pocket costs. Liabilities for co-pay assistance will be based on actual program participation and estimates of program redemption using data provided by third-party administrators. | |||||
• | |||||
Returns.  Sales of our products are not subject to a general right of return; however, the Company will accept product that is damaged or defective when shipped directly from our warehouse or for expired product up to 12 months subsequent to its expiry date. Product that has been used to fill patient prescriptions is no longer subject to any right of return. | |||||
Revenue recognition of License Revenue | |||||
Multiple Element Arrangements | |||||
For arrangements entered into with multiple elements, such as collaboration agreements, the Company evaluates whether the components of each arrangement are separate elements based on certain criteria. Accordingly, revenues from such agreements are recognized based on the performance requirements of the agreements. The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the fee is fixed and determinable, and collection is reasonably assured. | |||||
Non-refundable license fees are recognized as revenue when the Company has a contractual right to receive such payment, the contract price is fixed or determinable, the collection of the resulting receivable is reasonably assured, and the Company has no further significant performance obligations in exchange for the license. | |||||
As of January 1, 2011, the Company adopted Accounting Standard Update (ASU) No. 2009-13, Revenue Recognition (Topic 605)—Multiple-Deliverable Revenue Arrangements: a consensus of the FASB Emerging Issues Task Force (ASU No. 2009-13) which was codified in ASC 605-25. ASU No. 2009-13 establishes a selling-price hierarchy for determining the selling price of each element within a multiple-deliverable arrangement. Specifically, the selling price assigned to each deliverable is to be based on vendor-specific objective evidence (VSOE) if available; third-party evidence, if VSOE is unavailable; and estimated selling prices if neither VSOE or third-party evidence is available. In addition, ASU No. 2009-13 eliminates the residual method of allocating arrangement consideration and instead requires allocation using the relative selling price method. The adoption of ASU No. 2009-13 did not impact the Company's consolidated financial statements, as the Company did not enter into or modify any multiple element arrangements during 2011. The Company evaluates new or materially modified multiple element arrangements pursuant to the guidance in ASC 605-25. | |||||
License and Collaboration Agreements | |||||
We have entered into collaboration agreements to have both Oxtellar XR and Trokendi XR commercialized outside of the U.S. These agreements generally include an up-front license fee and ongoing milestone payments upon the achievement of specific events. We believe the milestones meet all of the necessary criteria to be considered substantive and therefore should be recognized as revenue when achieved. For up-front license fees, we have estimated the service period of the contract and are recognizing this payment as revenue on a straight-line basis over the respective service period. | |||||
Milestone Payments | |||||
Milestone payments on licensing agreements are recognized as revenue when the collaborative partner acknowledges completion of the milestone and substantive effort was necessary to achieve the milestone. Management may recognize revenue contingent upon the achievement of a milestone in its entirety in the period in which the milestone is achieved only if the milestone meets all the criteria to be considered substantive. Substantive milestone payments are recognized upon achievement of the milestone only if all of the following conditions are met: | |||||
• | |||||
the milestone payments are non-refundable; | |||||
• | |||||
achievement of the milestone involves a degree of risk and was not reasonably assured at the inception of the arrangement; | |||||
• | |||||
substantive effort on the Company's part is involved in achieving the milestone; | |||||
• | |||||
the amount of the milestone payment is reasonable in relation to the effort expended or the risk associated with achievement of the milestone; and | |||||
• | |||||
a reasonable amount of time passes between the up-front license payment and the first milestone payment as well as between each subsequent milestone payment. | |||||
Determination as to whether a payment meets the aforementioned conditions involves management's judgment. If any of these conditions are not met, the resulting payment would not be considered a substantive milestone, and therefore the resulting payment would be considered part of the consideration for the single unit of accounting and amortized over the appropriate period. | |||||
The Company recorded no milestone revenues during the year ended December, 31, 2013 and $1.1 million of milestone revenue during the year ended December 31, 2012, respectively. | |||||
Cost of Product Sales | |||||
The cost of product sales consist primarily of materials, third-party manufacturing costs, freight and distribution costs, allocation of labor, quality control and assurance, and other overhead costs associated with the sales of Oxtellar XR based on product shipped to distributors through December 31, 2013 and sales of Trokendi XR based on prescriptions filled at the pharmacy level during the third quarter of 2013. | |||||
Research and Development Costs | |||||
Research and development expenditures are expensed as incurred. Research and development costs primarily consist of employee-related expenses, including salaries and benefits; expenses incurred under agreements with contract research organizations, investigative sites, and consultants that conduct the Company's clinical trials; the cost of acquiring and manufacturing clinical trial materials; the cost of manufacturing materials used in process validation, to the extent that those materials are manufactured prior to receiving regulatory approval for those products and are not expected to be sold commercially, facilities costs that do not have an alternative future use; related depreciation and other allocated expenses; license fees for and milestone payments related to in-licensed products and technologies; share-based compensation expense; and costs associated with non-clinical activities and regulatory approvals. | |||||
Advertising Expense | |||||
The Company records the cost of its advertising efforts when services are performed or goods are delivered. The Company incurred approximately $14.6 million and $5.8 million in advertising costs for the year ended December 31, 2013 and 2012, respectively. | |||||
Share-Based Compensation | |||||
Employee share-based compensation is measured based on the estimated fair value on the grant date. The grant date fair value is calculated using the Black-Scholes option-pricing model, which requires the use of subjective assumptions including volatility, expected term, risk-free rate, and the fair value of the underlying common stock. The Company has awarded non-vested stock that vest based on service conditions. The Company recognizes expense using the straight-line method less estimated forfeitures. | |||||
The Company records the expense for stock option grants to non-employees based on the estimated fair value of the stock option using the Black-Scholes option-pricing model. The fair value of non-employee awards is re-measured at each reporting period. As a result, stock compensation expense for non-employee awards with vesting is affected by subsequent changes in the fair value of the Company's common stock. | |||||
Warrant Liability | |||||
In January 2011, the Company entered into a secured credit facility pursuant to a loan and security agreement with certain lenders, which was subsequently amended in December 2011, providing for term loans of up to an aggregate of $30.0 million. In connection with the drawdown of $15.0 million under the secured credit facility on January 26, 2011, the Company issued to its lenders warrants to purchase an aggregate of 375,000 shares of the Company's Series A Preferred Stock at an exercise price of $1.00 per share. The warrants became exercisable immediately and expire on January 26, 2021. Upon completion of the Company's IPO on May 1, 2012, the lender warrants converted into warrants to purchase 93,750 shares of Common Stock at an exercise price of $4.00 per share. These warrants are recorded as a derivative liability and, as such, the Company reflects the warrant liability at fair value in the consolidated balance sheets. The fair value of this derivative liability is re-measured at the end of every reporting period and the change in fair value is reported in the consolidated statements of operations as other income (expense). On October 5, 2012, a holder exercised warrants to purchase an aggregate of 75,000 shares of common stock via a cashless net share settlement election in accordance with the terms of the agreement, pursuant to which we issued the warrant holder 49,137 shares of common stock. As of December 31, 2013 and December 31, 2012, the fair value of the outstanding warrants was estimated to be approximately $119,000 and $114,000, respectively. The change in fair value of approximately $5,000 and $506,000 has been recorded in other income (expense) in the Company's consolidated statements of operations for the year ended December 31, 2013 and 2012, respectively. | |||||
In connection with the drawdown of the second $15.0 million under the secured credit facility on December 30, 2011, the Company issued to its lenders warrants to purchase an aggregate of 200,000 shares of the Company's Series A Preferred Stock at an exercise price of $1.50 per share. The warrants became exercisable immediately and expire on December 30, 2021. Upon completion of the Company's IPO on May 1, 2012, the warrants converted into warrants to purchase 49,999 shares of Common Stock at an exercise price of $5.00 per share. These warrants are recorded as a derivative liability and, as such, the Company reflects the warrant liability at fair value in the consolidated balance sheets. The fair value of this derivative liability is re-measured at the end of every reporting period and the change in fair value is reported in the consolidated statements of operations as other income (expense). On October 5, 2012, a holder exercised warrants to purchase an aggregate of 26,667 shares of common stock via a cashless net share settlement election in accordance with the terms of the agreement, pursuant to which we issued the warrant holder 15,172 shares of common stock. As of December 31, 2013 and 2012, the fair value of the outstanding warrants was estimated to be approximately $153,000 and $138,000, respectively. The change in fair value of approximately $15,000 and $204,000 has been recorded in other income (expense) in the Company's consolidated statements of operations for the year ended December 31, 2013 and 2012, respectively. | |||||
The terms of the warrant agreements provide for "down-round" anti-dilution adjustment for the warrants in certain situations whereby the Company sells or issues (a)Â shares at a price per share less than the exercise price of the warrants, or (b)Â equity-linked financial instruments with strike prices less than the exercise price of the warrants. As a result of this "down round" provision, the warrants continue to be classified as derivative liabilities. | |||||
Subsequent to the completion of its IPO, which occurred on May 1, 2012, the fair value of the Common Stock warrants is determined using a Black-Scholes model within a Monte-Carlo framework. The Monte-Carlo simulation is a generally accepted statistical method used to estimate fair value based on the application of subjective assumptions, consistently applied for each period, including the probability, timing and magnitude of the Company's issuance of additional common stock in future financings or raising capital via debt issuance. This valuation is computed at the end of each fiscal quarter to reflect conditions at each valuation date until the warrants are exercised or they expire. In addition to assumptions regarding future equity financings, consideration is also given to the current stock price, anticipated stock volatility going forward, and the anti-dilution provisions embedded in the warrant agreements. | |||||
Recently Issued Accounting Pronouncements | |||||
In April 2013, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, which amended interim and annual reporting requirements about accumulated other comprehensive income (AOCI). In interim periods, companies are required to report information about reclassifications out of AOCI and changes in AOCI balances. The provision of ASU 2013-02 became effective for the first quarter of 2013. The adoption of ASU 2013-02 did not have a material effect on the Company's consolidated results of operations, financial position or liquidity. | |||||
In July 2013, the FASB issued ASU No. 2013-11, which amended ASC Topic 740 regarding presentation of an unrecognized tax benefit when a net operating loss (NOL) carryforward, a similar tax loss, or a tax credit carryforward exists. The amendments in ASU No. 2013-11 require an entity to present an unrecognized tax benefit as a reduction of a deferred tax asset for an NOL carryforward, or similar tax loss or tax credit carryforward, rather than as a liability when (1) the uncertain tax position would reduce the NOL or other carryforward under the tax law of the applicable jurisdiction and (2) the entity intends to use the deferred tax asset for that purpose. The ASU does not require new recurring disclosures. This amendment is effective prospectively for fiscal years beginning after December 15, 2013. The Company does not believe this amendment will have a material impact on its financial statements. | |||||
Fair_Value_of_Financial_Instru
Fair Value of Financial Instruments | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Fair Value of Financial Instruments | ' | |||||||||||||
Fair Value of Financial Instruments | ' | |||||||||||||
3. Fair Value of Financial Instruments | ||||||||||||||
The fair value of an asset or liability should represent the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Such transactions to sell an asset or transfer a liability are assumed to occur in the principal or most advantageous market for the asset or liability. Accordingly, fair value is determined based on a hypothetical transaction at the measurement date, considered from the perspective of a market participant rather than from a reporting entity's perspective. | ||||||||||||||
The Company reports assets and liabilities that are measured at fair value using a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy maximizes the use of observable inputs and minimizes the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: | ||||||||||||||
• | ||||||||||||||
Level 1—Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. | ||||||||||||||
• | ||||||||||||||
Level 2—Inputs are quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (interest rates, yield curves, etc.) and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs). | ||||||||||||||
• | ||||||||||||||
Level 3—Unobservable inputs that reflect the Company's own assumptions, based on the best information available, including the Company's own data. | ||||||||||||||
In accordance with the fair value hierarchy described above, the following tables show the fair value of the Company's financial assets and liabilities that are required to be measured at fair value, in thousands: | ||||||||||||||
Fair Value Measurements at December 31, 2013 | ||||||||||||||
Total Carrying | Quoted Prices | Significant | Significant | |||||||||||
Value at | in Active | Other | Unobservable | |||||||||||
December 31, | Markets | Observable | Inputs | |||||||||||
2013 | (Level 1) | Inputs | (Level 3) | |||||||||||
(Level 2) | ||||||||||||||
Assets: | ||||||||||||||
Cash and cash equivalents | $ | 32,980 | $ | 32,980 | $ | — | $ | — | ||||||
Marketable securities | 49,211 | — | 49,211 | — | ||||||||||
Long term investments | 8,756 | — | 8,756 | — | ||||||||||
Marketable securities—restricted (SERP) | 305 | — | 305 | — | ||||||||||
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
Total assets at fair value | $ | 91,252 | $ | 32,980 | $ | 58,272 | $ | — | ||||||
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
Liabilities: | ||||||||||||||
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
Derivative liabilities | $ | 12,644 | $ | — | $ | — | $ | 12,644 | ||||||
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
Fair Value Measurements at December 31, 2012 | ||||||||||||||
Total Carrying | Quoted Prices | Significant | Significant | |||||||||||
Value at | in Active | Other | Unobservable | |||||||||||
December 31, | Markets | Observable | Inputs | |||||||||||
2012 | (Level 1) | Inputs | (Level 3) | |||||||||||
(Level 2) | ||||||||||||||
Assets: | ||||||||||||||
Cash and cash equivalents | $ | 40,302 | $ | 31,561 | $ | 8,741 | $ | — | ||||||
Marketable securities | 48,206 | — | 48,206 | — | ||||||||||
Marketable securities—restricted (SERP) | 279 | — | 279 | — | ||||||||||
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
Total assets at fair value | $ | 88,787 | $ | 31,561 | $ | 57,226 | $ | — | ||||||
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
Liabilities: | ||||||||||||||
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
Derivative liabilities | $ | 251 | $ | — | $ | — | $ | 251 | ||||||
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
The fair value of the restricted marketable securities is included within other non-current assets in the consolidated balance sheets. | ||||||||||||||
The Company's Level 1 assets include money market funds and U.S. Treasury and government agency debt securities with quoted prices in active markets. | ||||||||||||||
Level 2 assets include mutual funds in which the SERP assets are invested, commercial paper and investment grade corporate bonds and other fixed income securities. Level 2 securities are valued using third-party pricing sources that apply applicable inputs and other relevant data into their models to estimate fair value. | ||||||||||||||
Level 3 liabilities include the fair market value of the interest make-whole liability associated with the 7.50% Convertible Senior Secured Notes due in 2019 and the outstanding warrants to purchase Common Stock, which are both recorded as derivative liabilities. | ||||||||||||||
The fair value of the common stock warrant liability was calculated using a Monte-Carlo simulation on a Black-Scholes model with the following assumptions as of December 31, 2013: | ||||||||||||||
Exercise Price | $4.00Â -Â $5.00 per share | |||||||||||||
Volatility | 70% | |||||||||||||
Stock Price as of December 31, 2013 | $7.54 per share | |||||||||||||
Term | 7.1Â -Â 8.0Â years | |||||||||||||
Dividend Yield | 0.00% | |||||||||||||
Risk-Free Rate | 2.55%Â -Â 2.75% | |||||||||||||
The fair value of the interest make-whole liability of the Notes was calculated using a binomial-lattice model with the following key assumptions as of December 31, 2013: | ||||||||||||||
Volatility | 45% | |||||||||||||
Stock Price as of December 31, 2013 | $7.54 per share | |||||||||||||
Credit Spread | 1200 bps | |||||||||||||
Term | 3.3Â years | |||||||||||||
Dividend Yield | 0.00% | |||||||||||||
Significant changes to these assumptions would result in increases/decreases to the fair value of the derivative liabilities. | ||||||||||||||
Changes in the fair value of the warrants and the interest make-whole liability are recognized as a component of Other Income (Expense) in the Consolidated Statements of Operations. The following table presents information about the Company's Level 3 liabilities as of December 31, 2012 and December 31, 2013 that are included in the Non-Current Liabilities section of the Consolidated Balance Sheets, in thousands: | ||||||||||||||
Year Ended | ||||||||||||||
December 31, | ||||||||||||||
2012 and 2013 | ||||||||||||||
Balance at December 31, 2011 | $ | 697 | ||||||||||||
Exercise of warrants | (1,156 | ) | ||||||||||||
Changes in fair value of warrants included in earnings | 710 | |||||||||||||
​ | ​ | ​ | ​ | ​ | ||||||||||
Balance at December 31, 2012 | 251 | |||||||||||||
​ | ​ | ​ | ​ | ​ | ||||||||||
Initial value of interest make-whole payment associated with the convertible notes | 9,270 | |||||||||||||
Changes in fair value of derivative liabilities included in earnings | 13,354 | |||||||||||||
Reduction due to conversion of debt to equity | (10,231 | ) | ||||||||||||
​ | ​ | ​ | ​ | ​ | ||||||||||
Balance at December 31, 2013 | $ | 12,644 | ||||||||||||
​ | ​ | ​ | ​ | ​ | ||||||||||
​ | ​ | ​ | ​ | ​ | ||||||||||
The carrying value and estimated fair value of the convertible notes was approximately $34.4 million and $79.8 million, respectively, as of December 31, 2013. The fair value was estimated based on actual trade information as well as quoted prices provided by bond traders, which would be characterized within Level 2 of the fair value measurement table. | ||||||||||||||
The carrying amounts of other financial instruments, including accounts receivable, accounts payable and accrued expenses approximate fair value due to their short-term maturities. | ||||||||||||||
Unrestricted marketable securities held by the Company were as follows, in thousands: | ||||||||||||||
At December 31, 2013: | ||||||||||||||
Available for Sale | Amortized | Gross | Gross | Fair Value | ||||||||||
Cost | Unrealized | Unrealized | ||||||||||||
Gains | Losses | |||||||||||||
Corporate debt securities | $ | 57,967 | $ | 33 | $ | (33 | ) | $ | 57,967 | |||||
At December 31, 2012: | ||||||||||||||
Available for Sale | Amortized | Gross | Gross | Fair Value | ||||||||||
Cost | Unrealized | Unrealized | ||||||||||||
Gains | Losses | |||||||||||||
Corporate debt securities | $ | 48,259 | $ | 1 | $ | (54 | ) | $ | 48,206 | |||||
The contractual maturities of the unrestricted marketable securities held by the Company were as follows, in thousands: | ||||||||||||||
December 31, | ||||||||||||||
2013 | ||||||||||||||
Less Than 1 Year | $ | 49,211 | ||||||||||||
1Â -Â 5Â years | 8,756 | |||||||||||||
Greater Than 5 Years | — | |||||||||||||
​ | ​ | ​ | ​ | ​ | ||||||||||
Total | $ | 57,967 | ||||||||||||
​ | ​ | ​ | ​ | ​ | ||||||||||
​ | ​ | ​ | ​ | ​ | ||||||||||
The Company has not experienced any other-than-temporary losses on its marketable securities and restricted marketable securities. The cost of securities sold is calculated using the specific identification method. | ||||||||||||||
Inventories
Inventories | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Inventories | ' | |||||||
Inventories | ' | |||||||
4. Inventories | ||||||||
Inventories consist of the following, in thousands: | ||||||||
December 31, | December 31, | |||||||
2013 | 2012 | |||||||
Raw materials | $ | 3,897 | $ | 1,152 | ||||
Work in process | 1,347 | — | ||||||
Finished goods | 1,908 | — | ||||||
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
Total | $ | 7,152 | $ | 1,152 | ||||
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
Property_and_Equipment
Property and Equipment | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Property and Equipment | ' | |||||||
Property and Equipment | ' | |||||||
5. Property and Equipment | ||||||||
Property and equipment consist of the following, in thousands: | ||||||||
December 31, | December 31, | |||||||
2013 | 2012 | |||||||
Computer equipment | $ | 798 | $ | 615 | ||||
Software | 209 | 209 | ||||||
Lab equipment and furniture | 4,809 | 3,896 | ||||||
Leasehold improvements | 2,329 | 1,779 | ||||||
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
8,145 | 6,499 | |||||||
Less accumulated depreciation and amortization | (5,591 | ) | (5,078 | ) | ||||
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
$ | 2,554 | $ | 1,421 | |||||
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
Depreciation expense on property and equipment was approximately $512,000, $642,000 and $650,000 for years ended December 31, 2013, 2012 and 2011 respectively. | ||||||||
Intangible_Assets
Intangible Assets | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Intangible Assets | ' | ||||||||||||||||
Intangible Assets | ' | ||||||||||||||||
6. Intangible Assets | |||||||||||||||||
The Company purchased certain patents from Shire Laboratories, Inc. in connection with a 2005 purchase agreement, which is being amortized over the weighted average life of the patents purchased in that transaction. Patent defense costs have been incurred in connection with a Complaint filed against Watson on August 7, 2013 related to patents for Oxtellar XR (see Part I, Item 3, Legal Proceedings). The following sets forth the gross carrying amount and related accumulated amortization of these intangible assets, in thousands: | |||||||||||||||||
December 31, 2013 | December 31, 2012 | ||||||||||||||||
Weighted- | Gross Carrying | Accumulated | Gross Carrying | Accumulated | |||||||||||||
Average Life | Amount | Amortization | Amount | Amortization | |||||||||||||
Purchased patents | 10 | $ | 2,292 | $ | 1,838 | $ | 2,292 | $ | 1,609 | ||||||||
Patent defense costs(1) | $ | 704 | $ | — | $ | — | $ | — | |||||||||
-1 | |||||||||||||||||
Three U.S. patents have been issued covering Oxtellar XR, providing patent protection through 2027. The Company's patent defense costs will be capitalized until the outcome of the Watson litigation becomes known. Assuming a successful outcome of that litigation, these costs will commence amortization from that point of time forward. | |||||||||||||||||
Amortization expense was approximately $229,000 for each year. The estimated annual aggregate amortization expense through December 31, 2015 is $229,000. The net book value of intangible assets as of December 31, 2013 and 2012 was approximately $1.2 million and $0.7 million, respectively. | |||||||||||||||||
There were no indicators of impairment identified at December 31, 2013 or 2012. | |||||||||||||||||
Accrued_Liabilities
Accrued Liabilities | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Accrued Liabilities | ' | |||||||
Accrued Liabilities | ' | |||||||
7. Accrued Liabilities | ||||||||
Accrued Liabilities are comprised of the following (and are included within the accounts payable and accrued expenses line item on the consolidated balance sheets), in thousands: | ||||||||
December 31, | December 31, | |||||||
2013 | 2012 | |||||||
Accrued clinical trial and clinical supply costs | $ | 2,253 | $ | 3,335 | ||||
Accrued compensation | 5,016 | 2,492 | ||||||
Accrued rebates and allowances | 1,132 | — | ||||||
Accrued product costs | 3,274 | — | ||||||
Accrued sales and marketing expenses | 1,077 | 1,315 | ||||||
Accrued interest | 619 | 213 | ||||||
Other accrued liabilities | 1,801 | 505 | ||||||
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
$ | 15,172 | $ | 7,860 | |||||
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
Accrued clinical trial and clinical supply costs consist primarily of investigator fees, contract research organization services, contract manufacturing, pass-through costs and laboratory costs. Other accrued liabilities consist primarily of professional fees, distribution fees relating to our products, and miscellaneous accrued expenses. | ||||||||
Convertible_Senior_Secured_Not
Convertible Senior Secured Notes | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Convertible Senior Secured Notes | ' | ||||
Convertible Senior Secured Notes | ' | ||||
8. Convertible Senior Secured Notes | |||||
On May 3, 2013, the Company issued $90.0 million aggregate principal amount of 7.50% Convertible Senior Secured Notes due 2019 (the "Notes"). The Company completed this private placement offering in reliance on Section 4(a)(2) under the Securities Act of 1933, as amended (the "Securities Act"). The notes were available for resale in transactions exempt from the registration requirements of the Securities Act to persons reasonably believed by the initial purchasers to be "qualified institutional buyers" as defined in Rule 144A under the Securities Act. | |||||
Aggregate offering expenses in connection with the transaction, including the underwriters' fee of $3.0Â million, were approximately $3.5Â million, resulting in net proceeds of approximately $86.5Â million. The Company used approximately $19.6Â million to repay in full its borrowings under and terminate its then existing secured credit facility. The remainder of the net proceeds will be used to fund the commercialization of the Company's approved products, Oxtellar XR and Trokendi XR, as well as to continue development of the Company's pipeline products and for other general corporate purposes, which may include research and development expenses, capital expenditures, working capital and general administrative expenses. | |||||
The Company issued the Notes under an Indenture, dated May 3, 2013 (the "Indenture"), between the Company and U.S. Bank National Association, as Trustee and Collateral Agent. The Notes provide for 7.50% interest per annum on the principal amount of the Notes, payable semi-annually in arrears on May 1 and November 1 of each year, beginning on November 1, 2013. Interest will accrue on the Notes from and including May 3, 2013 and the Notes will mature on May 1, 2019, unless earlier converted, redeemed or repurchased by the Company. The Notes are convertible into the Company's common stock ("Common Stock") as described below. | |||||
The Notes are the Company's senior secured obligations and (i)Â rank senior in right of payment to any of the indebtedness that is expressly subordinated in right of payment to the Notes; (ii)Â rank effectively senior to any of the unsecured indebtedness to the extent of the value of the collateral securing the Notes; (iii)Â rank equal in right of payment with all of the Company's indebtedness that is not subordinated to the Notes; and (iv)Â are structurally subordinated to all indebtedness and liabilities, including trade payables, of the Company's existing and future subsidiaries. | |||||
The Notes are secured by a first-priority lien, other than customary permitted liens, on substantially all of the Company's and its domestic subsidiaries' assets, whether now owned or hereafter acquired, including license agreements, general intangibles, accounts, instruments, investment property, intellectual property and any proceeds of the foregoing pursuant to that certain Security and Pledge Agreement, dated May 3, 2013 (the "Security Agreement"), between the Company and U.S. Bank National Association, as Collateral Agent. The Indenture restricts the ability of the Company and its existing and future subsidiaries to make investments, including transfers of the Company's assets that constitute collateral securing the Notes, in its existing and future foreign subsidiaries. The Company is entitled to the release of property and other assets constituting collateral from the liens securing the Notes and the obligations thereunder (i) to enable the Company to consummate the sale, transfer, license, monetization or other disposition of such property or assets; (ii) with the consent of the holders of at least 662/3% of the aggregate principal amount of the Notes then outstanding and affected; or (iii) pursuant to a modification or amendment of the Indenture, the Notes or the Security Agreement. | |||||
If the Company has not received stockholder approval (as defined in the Indenture), a holder of Notes may surrender all or a portion of its Notes for conversion at any time prior to the close of business on the business day immediately preceding the maturity date of the Notes and the Company will deliver for each $1,000 principal amount of converted Notes a number of shares of Common Stock equal to the conversion rate, together with a cash payment in lieu of any fractional shares of Common Stock issuable upon conversion. If the Company obtains stockholder approval, (i) on and after such date of approval and prior to the close of business on the business day immediately preceding November 1, 2018, a holder of Notes may convert all or a portion of its Notes, in principal amounts equal to $1,000 or an integral multiple thereof, only if one or more of the following conditions has been satisfied: (1) if, for at least 20 trading days (whether or not consecutive) during the 30 consecutive trading day period ending within five trading days prior to a conversion date, the last reported sale price of the Company's Common Stock exceeds the conversion price on each such trading day; (2) during the five consecutive business day period immediately following any five consecutive trading day period (the "Measurement Period"), in which, for each trading day of that Measurement Period, the trading price (as defined in the Indenture) per $1,000 principal amount of Notes for such trading day was less than 98% of the product of the last reported sale price of the Company's Common Stock on such trading day and the applicable conversion rate on such trading day; (3) upon the occurrence of specified corporate transactions; or (4) if the Company calls the Notes for redemption, at any time prior to the close of business on the business day immediately preceding the redemption date; and (ii) on and after November 1, 2018, a holder of Notes may convert all or a portion of its Notes, in principal amounts equal to $1,000 or an integral multiple thereof, at any time prior to the close of business on the business day immediately preceding the maturity date of the Notes, regardless of the foregoing circumstances. If stockholder approval has been received, the Company will settle conversion of the Notes through payment or delivery, as the case may be of cash, shares of Common Stock or a combination thereof, at its election. The Company has no obligation to seek stockholder approval and, even if it does, it cannot be certain that its stockholders will grant the stockholder approval. | |||||
The conversion rate for the Notes is equal to 188.7059 shares of Common Stock per $1,000 principal amount of notes (which is equivalent to an initial conversion price of approximately $5.30 per share of Common Stock). The conversion rate is subject to adjustment upon the occurrence of certain specified events but will not be adjusted for accrued and unpaid interest. In addition, upon the occurrence of a "make-whole fundamental change" (as defined in the Indenture), the Company will, in certain circumstances, increase the conversion rate by a number of additional shares for a holder that elects to convert its notes in connection with such make-whole fundamental change as described in the Indenture. | |||||
Effective November 1, 2013, if, for at least 20 trading days (whether or not consecutive) during the 30 consecutive trading day period ending within five trading days prior to a conversion date, the last reported sale price of the Company's common stock exceeds the conversion price on each such trading day, the Company became required, in certain circumstances, to make an interest make-whole payment to converting holders equal to the sum of the present value of the remaining scheduled payments of interest that would have been made on the Notes to be converted had such notes remained outstanding until May 1, 2017 computed using a discount rate equal to 2%. The Company may pay an interest make-whole payment either in cash or in Common Stock, at its election. If the Company elects to pay an interest make-whole payment in Common Stock, then the stock will be valued at 95% of the simple average of the daily volume-weighted average price ("VWAP") per share for the 10 trading days ending on and including the trading day immediately preceding the conversion date. Notwithstanding the foregoing, the number of shares the Company may deliver in connection with an interest make-whole payment and repayment of principal will not exceed 221.7294 shares per $1,000 principal amount of Notes, subject to adjustment. If, pursuant to its election to deliver Common Stock in connection with the payment of the interest make-whole amount, the Company would be required to deliver a number of shares of Common Stock in excess of such threshold, the Company would deliver cash in lieu of shares otherwise deliverable upon conversions in excess thereof (based on the simple average of the daily VWAP for the 10 trading days ending on and including the trading day immediately preceding the conversion date). | |||||
Upon (i)Â the occurrence of a fundamental change (as defined in the Indenture) or (ii)Â if the Company calls the Notes for redemption as described below (either event, a "make-whole fundamental change") and a holder elects to convert its Notes in connection with such make-whole fundamental change, the Company will, in certain circumstances, increase the conversion rate by a number of additional shares (the "Additional Shares") as described below. The Company will notify holders within one business day after the first public announcement by it or a third party of an event or transaction that the Company reasonably determines would, if consummated, constitute a make-whole fundamental change. Upon receiving notice or otherwise becoming aware of a potential make-whole fundamental change described, the Company will use commercially reasonable efforts to announce or cause the announcement of such potential make-whole fundamental change in time to deliver such notice at least 50 scheduled trading days prior to the anticipated effective date for such transaction if stockholder approval has been obtained. The Company will notify the Trustee and holders of the effective date of any make-whole fundamental change no later than one business day after such effective date. | |||||
The number of additional shares by which the Company will increase the conversion rate will be determined based on the date on which the make-whole fundamental change occurs or becomes effective (the "Effective Date") and the price (the "Stock Price") paid (or deemed paid) per share of the Company's Common Stock in the fundamental change. If the holders of the Company's common stock receive only cash in a make-whole fundamental change (i)Â the Stock Price shall be the cash amount paid per share and (ii)Â the Company will satisfy its conversion obligation to a holder that converts its Notes any time after such make-whole fundamental change by delivering to such holder, on the third business day immediately following the relevant conversion date, an amount of cash, for each $1,000 principal amount of Notes converted, equal to the product of (x)Â the conversion rate in effect on the relevant conversion date (as increased by the Additional Shares, if any) and (y)Â the Stock Price. Otherwise, (i)Â the Stock Price will equal the average of the last reported sale prices of the Company's Common Stock over the five trading day period ending on, and including, the trading day immediately preceding the Effective Date of the make-whole fundamental change and (ii)Â the Company will satisfy its conversion obligation to a holder that converts its Notes in connection with such make-whole fundamental change based on the conversion rate as increased by the number of Additional Shares. In connection with a make-whole fundamental change triggered by redemption of the Notes, the Effective Date of such make-whole fundamental change will be the date on which the Company delivers notice of the redemption. Notwithstanding the foregoing, in no event will the conversion rate exceed the maximum conversion rate, which is 221.7294 shares per $1,000 principal amount of Notes, which amount is inclusive of repayment of the principal of the Notes. | |||||
If a fundamental change occurs at any time, holders will have the right, at their option, to require the Company to purchase for cash any or all of the Notes, or any portion of the principal amount thereof, that is equal to $1,000 or an integral multiple of $1,000 in excess thereof, on a date of the Company's choosing that is not less than 20 calendar days nor more than 35 calendar days after the date on which it delivers a fundamental change notice. The price the Company is required to pay for a Note is equal to 100% of the principal amount of such Note plus accrued and unpaid interest, if any, to, but excluding, the fundamental change purchase date. Any Notes purchased by the Company will be paid for in cash. | |||||
The Company may not redeem the Notes prior to May 1, 2017. On or after May 1, 2017, the Company may redeem for cash all, but not less than all, of the Notes if the last reported sale price of the Company's Common Stock equals or exceeds 140% of the applicable conversion price for at least 20 trading days during the 30 consecutive trading day period ending on the trading day immediately prior to the date the Company delivers written notice of the redemption. The redemption price will be equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. If the Company calls the Notes for redemption, a make-whole fundamental change will be deemed to occur and the Company will, in certain circumstances, increase the conversion rate for holders who convert their notes in connections with such make-whole fundamental change as described in the Indenture. | |||||
The Company incurred approximately $3.5 million of financing costs (including the underwriters' fee) in connection with the issuance of the Notes. Approximately $0.9 million of this amount was allocated to additional paid-in capital and the remaining $2.6 million is recorded as a deferred cost being amortized over the term of the Notes. As of December 31, 2013, approximately $1.2 million remained unamortized, of which $0.2 million is current and $1.0 million is long term. | |||||
The table below summarizes how the issuance of the Notes is reflected in the balance sheet at December 31, 2013, in thousands: | |||||
December 31, 2013 | |||||
Gross proceeds | $ | 90,000 | |||
Initial value of interest make-whole derivative reported as debt discount | (9,270 | ) | |||
Conversion option reported as debt discount and APIC | (22,336 | ) | |||
Conversion of debt to equity—principal | (40,492 | ) | |||
Conversion of debt to equity—debt discount | 13,833 | ||||
Amortization of debt discount | 2,658 | ||||
​ | ​ | ​ | ​ | ​ | |
Carrying value | $ | 34,393 | |||
​ | ​ | ​ | ​ | ​ | |
​ | ​ | ​ | ​ | ​ | |
During the period ended December 31, 2013 approximately $40.5 million of the Notes were presented to the Company for conversion. Accordingly, the Company has issued approximately 7.6 million shares of common stock in conversion of the principal amount of the Notes. The Company has issued an additional 1.3 million shares of common stock and paid approximately $1.7 million cash in settlement of the interest make-whole provision related to the converted Notes. As a result of the conversions, the Company incurred an approximately $8.4 million loss on extinguishment of debt during the period ended December 31, 2013. | |||||
Secured Notes Payable | |||||
In January 2011, the Company entered into a secured credit facility pursuant to a loan and security agreement with certain lenders, which was subsequently amended in December 2011, providing for term loans of up to an aggregate of $30.0 million. On January 26, 2011 and December 30, 2011, the Company drew down $15.0 million and $15.0 million, respectively, of term loans under this secured credit facility. The Company used approximately $19.6 million of the Convertible Note proceeds to repay in full its borrowings under and terminate this secured credit facility in May 2013. Upon repayment of the secured notes payable, the Company incurred an approximately $1.2 million loss on extinguishment of debt during the period ended December 31, 2013. | |||||
Sale_of_TCD_Royalty_Sub_Report
Sale of TCD Royalty Sub Reported as Discontinued Operations | 12 Months Ended |
Dec. 31, 2013 | |
Sale of TCD Royalty Sub Reported as Discontinued Operations | ' |
Sale of TCD Royalty Sub Reported as Discontinued Operations | ' |
9. Sale of TCD Royalty Sub Reported as Discontinued Operations | |
Pursuant to a Unit Purchase Agreement executed on December 14, 2011, the Company sold 100% of its equity ownership interests in TCD to an entity affiliated with Orbimed Advisors LLC, one of its stockholders, hereafter referred to as the "Purchase Transaction." The purchase price consisted of $27.0 million cash payment, assumption of all assets and liabilities and a milestone payment of $3.0 million payable within 10 days of the occurrence of the earlier of the following conditions: | |
• | |
The purchaser receives royalty payments equal to at least $35.1Â million, the purchaser has not entered into a transaction to sell, refinance or monetize its equity interests in TCD, and no generic formulations of the products underlying the royalty payments and related license agreements have entered the market, or | |
• | |
The purchaser receives proceeds in excess of the aggregate of (a)Â $27.0Â million, plus (b)Â the purchase price paid by the purchaser, if any, to acquire a beneficial interest in one or more of the Notes, plus (c)Â the aggregate redemption price paid by the purchaser, if any, to redeem any of the Notes, from any transaction that refinances or liquidates the equity interests in TCD or the Notes. | |
The purchase price was determined through a competitive bidding process, involving more than one bidder and multiple rounds of negotiations between each potential buyer and the Company. The Company entered into the purchase transaction with Royalty Opportunities S.à r.l ("ROS") an entity affiliated with OrbiMed Advisors LLC, which offered the highest purchase price. | |
Pursuant to the Purchase Transaction, the Company retained duties and obligations under certain notes and related agreements, including the Purchase and Sale Agreement, the Residual License Agreements and the Servicing Agreement, for so long as the notes remain outstanding. The purchaser assumed all rights and obligations of the notes. | |
The Company also retained certain duties and obligations under the ongoing Servicing Agreement. The Company will continue to perform these services in exchange for a quarterly fee of $10,000, or $40,000 annually. These retained duties consist of taking commercially reasonable steps to collect the royalty amounts due and enforcing the related provisions under the license agreements. In particular, the Company is required to monitor receipt of the royalty payments due under the license agreements and to confirm that the payments are received on a timely basis, calculated properly and made available to the trustee. | |
At the time the aforementioned Notes cease to be outstanding, the purchaser must make an election to either (1)Â terminate the Servicing Agreement and execute the New Servicing Agreement, which was contemplated and drafted at the time of the Purchase Transaction, or (2)Â obtain from the Company the assignment and transfer of all the licensed intellectual property and all of the Company's rights and obligations under the license agreements subject to certain conditions described in the Unit Purchase Agreement. | |
The Company determined it had not retained any interest nor any of the risks and rewards of TCD ownership nor had it guaranteed any payment of principal and interest on the Notes. The Company is serving as an agent for the debt holders in discharging its retained duties. Therefore, pursuant to ASCÂ 810-10, "Consolidation", the Company accounted for the Purchase Transaction as a sale of a subsidiary and is calculating the resulting gain as the aggregate of the fair value of consideration and the carrying value of TCD's assets and liabilities, less its fees and expenses. Since the assets and liabilities of TCD had identifiable operations and cash flows that are independent from the Company and the Company does not have a significant continuing involvement with TCD operations, the sale of TCD is reported as discontinued operations in the Company's consolidated statements of operations. Accordingly, the gain on the sale of the subsidiary, as well as any results of operations related to TCD, are presented as discontinued operations in all periods presented in the accompanying financial statements. Should the Company receive the milestone payment or additional consideration, the fair value of amounts received, less any related fees and expenses, will be recorded as "gain on the sale of the subsidiary," a component of discontinued operations. | |
Stockholders_Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2013 | |
Stockholders' Equity | ' |
Stockholders' Equity | ' |
10. Stockholders' Equity | |
Upon consummation of the IPO in May 2012, the 49,000,000 outstanding shares of Series A Preferred Stock automatically converted to 12,249,998 shares of Common Stock. | |
Until the Series A Preferred Stock was converted into shares of common stock, dividends on the Series A Preferred Stock were cumulative and accrued at a rate per annum of $0.07 per share, subject to adjustment for certain dilutive events. The Company was not obligated to pay the dividends unless it declared or paid dividends on any other shares of capital stock or in the event of a liquidation, dissolution or winding up of the Company. No dividends were paid prior to the conversion of the Series A Preferred Stock into Common Stock in connection with the IPO. | |
Common Stock | |
The holders of the Common Stock are entitled to one vote for each share of Common Stock held. On May 1, 2012, the Company completed its IPO, in which 10 million shares of the Company's Common Stock were sold at a price of $5 per share. Additionally, the underwriters of the Company's IPO exercised the full amount of their over-allotment option resulting in the sale of an additional 449,250 shares of the Company's Common Stock at a price of $5 per share, resulting in cash proceeds to the Company of $52.3 million. The Company realized net proceeds of $47.6 million from the IPO, after applying financing costs of approximately $4.7 million. | |
On December 5, 2012 the Company completed a follow-on offering, in which 6 million shares of the Company's Common Stock were sold at a price of $8 per share. Additionally, the underwriters of the Company's follow-on offering exercised their over-allotment options in January 2013 resulting in the sale of an additional 239,432 shares of the Company's Common Stock at a price of $8 per share, resulting in total cash proceeds to the Company of $49.9 million. The Company realized net proceeds of $46.6 million from the follow-on offering, after applying financing costs of approximately $3.3 million. | |
During the period from November 1, 2013 through December 31, 2013, the Company issued 7,641,060 shares of common stock as a result of the conversion of approximately $40.5 million of Convertible Notes and approximately 1,337,193 shares of common stock in settlement of the interest-make whole associated with those conversions. | |
ShareBased_Payments
Share-Based Payments | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Share-Based Payments | ' | ||||||||||
Share-Based Payments | ' | ||||||||||
11. Share-Based Payments | |||||||||||
Stock Option Plans | |||||||||||
The Company has adopted the Supernus Pharmaceuticals, Inc. 2012 Equity Incentive Plan (the 2012 Plan), which is stockholder-approved, and provides for the grant of stock options and certain other awards, including stock appreciation rights ("SAR"), restricted and unrestricted stock, stock units, performance awards, cash awards and other awards that are convertible into or otherwise based on the Company's common stock, to the Company's key employees, directors, and consultants and advisors. The 2012 Plan is administered by the Company's Board of Directors and provides for the issuance of up to 2,500,000 shares of the Company's Common Stock. Option awards are granted with an exercise price equal to the estimated fair value of the Company's Common Stock at the grant date; those option awards generally vest in four annual installments, starting on the first anniversary of the date of grant and have ten-year contractual terms. The 2012 Plan provides for the issuance of Common Stock of the Company upon the exercise of stock options. Share-based compensation recognized related to the grant of employee and non-employee stock option, SARS, and non-vested stock was as follows, in thousands: | |||||||||||
Year Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
(in thousands) | |||||||||||
Research and development | $ | 417 | $ | 208 | $ | 63 | |||||
Selling, general and administrative | 1,291 | 131 | (145 | ) | |||||||
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
Total | $ | 1,708 | $ | 339 | $ | (82 | ) | ||||
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing model using the assumptions in the following table: | |||||||||||
Year Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Fair value of common stock | $5.40 - $7.90 | $5.07 - $12.92 | $2.56 - $3.36 | ||||||||
Expected volatility | 69.5% - 70.9% | 68.3% - 71.6% | 59.1% - 74.7% | ||||||||
Dividend Yield | 0% | 0% | 0% | ||||||||
Expected term | 6.25 - 9.60Â years | 6.25Â years | 0.41 - 6.25Â years | ||||||||
Risk-free interest rate | 1.20% - 2.94% | 0.89% - 1.14% | 0.15% - 2.93% | ||||||||
Expected forfeiture rate | 5% | 0% - 5% | 0% - 5% | ||||||||
Fair Value of Common Stock—For all option grants prior to the completion of the Company's IPO on May 1, 2012, the fair value of the Common Stock underlying the option grants was determined by the Board, with the assistance of management, which intended all options granted to be exercisable at a price per share not less than the per share fair value of the Company's Common Stock underlying those options on the date of grant. The Company utilized methodologies, approaches and assumptions as set forth in the Technical Practice Aid, when estimating the fair value of Common Stock at each grant date. | |||||||||||
Given the lack of an active public market for the Common Stock, the Board employed a third-party valuation firm to assist in the determination of fair value by completing contemporaneous valuations. In the absence of a public market, and as a clinical stage company with no significant revenues from product sales, the Company considered a range of factors to determine the fair market value of the Common Stock at each grant date. The factors include: (1)Â the achievement of clinical and operational milestones by the Company, (2)Â the status of strategic relationships with collaborators, (3)Â the significant risks associated with the Company's stage of development, (4)Â capital market conditions for life science companies, particularly similarly situated privately held, early-stage life science companies, (5)Â the Company's available cash, financial condition, and results of operations, (6)Â the most recent sales of the Company's preferred stock, and (7)Â the preferential rights of the outstanding preferred stock. | |||||||||||
For option grants that occurred after the Company's IPO on May 1, 2012, the fair value of the Common Stock underlying the option grants was determined based on observable market prices of the Company's Common Stock. | |||||||||||
Expected Volatility—Volatility is a measure of the amount by which a financial variable such as a share price has fluctuated (historical volatility) or is expected to fluctuate (expected volatility) during a period. The Company has identified several public entities of similar size, complexity, and stage of development and, accordingly, historical volatility has been calculated using the volatility of these companies. The Company will continue to use the guideline peer group volatility information until the historical volatility of its own Common Stock is relevant to measure expected volatility for future option grants. | |||||||||||
Dividend Yield—The Company has never declared or paid dividends and has no plans to do so in the foreseeable future. | |||||||||||
Expected Term—This is the period of time that the options granted are expected to remain unexercised. Options granted have a maximum term of ten years. The Company determines the average expected life of stock options according to the "simplified method" as described in Staff Accounting Bulletin 110, which is the mid-point between the vesting date and the end of the contractual term. Over time, management will track estimates of the expected life of the option term so that estimates will approximate actual behavior for similar options. | |||||||||||
Risk-Free Interest Rate—This is the U.S. Treasury rate for the week of each option grant during the year, having a term that most closely resembles the expected term of the option. | |||||||||||
Expected Forfeiture Rate—The forfeiture rate is the estimated percentage of options granted that are expected to be forfeited or canceled on an annual basis before becoming fully vested. The Company estimates the forfeiture rate based on turnover data with further consideration given to the class of employees to whom the options were granted. | |||||||||||
The following table summarizes stock option and SAR activity: | |||||||||||
Number of | Weighted- | Weighted-Average | |||||||||
Options | Average Exercise | Remaining | |||||||||
Price | Contractual | ||||||||||
Term | |||||||||||
Outstanding, December 31, 2011 | 598,109 | $ | 2.75 | 7.71 | |||||||
Granted | 188,136 | $ | 10.73 | ||||||||
Exercised | (159,264 | ) | $ | 1.67 | |||||||
Forfeited or expired | (57,070 | ) | $ | 2.45 | |||||||
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
Outstanding, December 31, 2012 | 569,911 | $ | 5.72 | 7.88 | |||||||
Granted | 974,582 | $ | 7.79 | ||||||||
Exercised | (62,513 | ) | $ | 1.25 | |||||||
Forfeited or expired | (18,937 | ) | $ | 6.47 | |||||||
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
Outstanding, December 31, 2013 | 1,463,043 | $ | 7.27 | 8.51 | |||||||
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
As of December 31, 2013: | |||||||||||
Vested and expected to vest | 1,425,752 | $ | 7.26 | 8.5 | |||||||
Exercisable | 256,227 | $ | 4.47 | 6.44 | |||||||
The aggregate intrinsic value of options outstanding, vested and expected to vest, and exercisable as of December 31, 2011 is approximately $1.9 million, $1.8 million and $1.2 million, respectively. The aggregate intrinsic value of options outstanding, vested and expected to vest, and exercisable as of December 31, 2012 is approximately $1.6 million, $1.5 million and $1.0 million, respectively. The aggregate intrinsic value of options outstanding, vested and expected to vest, and exercisable as of December 31, 2013 is approximately $1.4 million, $1.4 million and $1.0 million, respectively. | |||||||||||
The weighted-average, grant-date fair value of options granted for the years ended December 31, 2011, 2012 and 2013 was $3.64, $6.85, and $4.98 per share, respectively. The total fair value of the underlying Common Stock related to shares that vested during the years ended December 31, 2011, 2012 and 2013 was approximately $113,000, $218,000, and $512,000, respectively. The total intrinsic value of options exercised amounted to approximately $262,000, $748,000, and $377,000, respectively, during the years ended December 31, 2011, 2012 and 2013. As of December 31, 2012 and 2013, the total unrecognized compensation expense, net of related forfeiture estimates, was approximately $1,651,000 and $4,611,000, respectively, which the Company expects to recognize over a weighted-average period of 3.06 and 2.94 years, respectively. | |||||||||||
Loss_per_Share
Loss per Share | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Loss per Share | ' | ||||||||||
Loss per Share | ' | ||||||||||
12. Loss per Share | |||||||||||
Basic loss per common share is determined by dividing loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period, without consideration of common stock equivalents. Diluted loss per share is computed by dividing the loss attributable to common stockholders by the weighted-average number of common share equivalents outstanding for the period. The treasury stock method is used to determine the dilutive effect of the Company's stock option grants, SARS, potential Employee Stock Purchase Plan (ESPP) awards and warrants, and the if-converted method is used to determine the dilutive effect of the Company's Notes and Series A Preferred Stock. The following common stock equivalents were excluded in the calculation of diluted loss per share because their effect would be anti-dilutive as applied to the loss from continuing operations applicable to common stockholders for the periods ending December 31, 2013, 2012 and 2011: | |||||||||||
Year Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Shares Underlying Convertible Senior Secured Notes | 6,219,782 | — | — | ||||||||
Series A Preferred Stock | — | 4,049,863 | 12,249,998 | ||||||||
Warrants to purchase Series A Preferred Stock/Common Stock | 13,388 | 21,090 | 143,749 | ||||||||
Stock Options, Stock Appreciation Rights, and Non-vested Stock Options | 151,737 | 256,939 | 598,109 |
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Income Taxes | ' | ||||||||||
Income Taxes | ' | ||||||||||
13. Income Taxes | |||||||||||
The components of the income tax benefit were as follow, in thousands: | |||||||||||
Year Ended | |||||||||||
December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Current | |||||||||||
Federal | $ | — | $ | — | $ | 14,090 | |||||
State | — | — | 2,155 | ||||||||
Deferred | |||||||||||
Federal | — | — | — | ||||||||
State | — | — | — | ||||||||
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
Total | $ | — | $ | — | $ | 16,245 | |||||
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
For the years ended December 31, 2013, 2012 and 2011, there was a $0 million, $0 million and $16.2 million benefit for federal or state income taxes based on continuing operations, respectively. A reconciliation of the expected income tax benefit computed using the federal statutory income tax rate to the Company's effective income tax rate is as follows, in thousands: | |||||||||||
Year Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Income tax (benefit) computed at federal statutory tax rate | $ | (32,286 | ) | $ | (16,270 | ) | $ | (13,419 | ) | ||
Permanent items | 340 | 396 | 57 | ||||||||
State taxes | (4,772 | ) | (2,487 | ) | (2,155 | ) | |||||
Change in valuation allowance | 31,526 | 18,754 | — | ||||||||
Uncertain tax position | 5,411 | (64 | ) | 129 | |||||||
Research and development credits | (156 | ) | — | (857 | ) | ||||||
Other | (63 | ) | (329 | ) | — | ||||||
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
Income tax benefit | $ | — | $ | — | $ | (16,245 | ) | ||||
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
In 2011, the Company recorded pre-tax income from discontinued operations of approximately $93.3Â million, which resulted in income tax expense from discontinued operations of approximately $36.8Â million. This income tax expense from discontinued operations was completely offset by a $16.2Â million income tax benefit generated from the 2011 loss from continuing operations and the utilization of net operating loss carryforwards. | |||||||||||
In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some or all of the deferred tax assets will not be realized. The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which the net operating loss (NOL) carryforwards are available. Management considers projected future taxable income, the scheduled reversal of deferred tax liabilities, and available tax planning strategies that can be implemented by the Company in making this assessment. Based upon the level of historical taxable income and projections for future taxable income over the periods in which the NOL carryforwards are available to reduce income taxes payable, management has established a full valuation allowance. | |||||||||||
As of December 31, 2013, the NOL carryforwards amounted to approximately $144.3 million ($58.0 million tax effected) and will expire in various years beginning in 2030. As of December 31, 2013, the Company has available research and development credit carryforwards of approximately $4.2 million, which expire, if unused, starting 2025. The use of the Company's NOL carryforwards and research and development credits may be restricted due to changes in Company ownership. Additionally, despite the NOL carryforwards, the Company may have a future tax liability due to an alternative minimum tax or state tax requirements. The Company paid no income taxes in the years ended December 31, 2013, 2012 or 2011. | |||||||||||
The deferred tax benefit has been entirely offset by valuation allowances. The significant components of the Company's deferred tax assets (liabilities) were as follow, in thousands: | |||||||||||
As of December 31, | |||||||||||
2013 | 2012 | ||||||||||
Deferred tax assets: | |||||||||||
Net operating loss carryforward | $ | 58,047 | $ | 32,714 | |||||||
Deferred rent credit | 615 | 477 | |||||||||
Accrued compensation and non-qualified stock options | 1,986 | 59 | |||||||||
Deferred financing costs | 319 | — | |||||||||
Depreciation and amortization | 337 | 282 | |||||||||
Research and development credits | 4,167 | 3,901 | |||||||||
Capitalized overhead into inventory (UNICAP §263A) | 282 | — | |||||||||
Other | 151 | 789 | |||||||||
Valuation allowance | (59,823 | ) | (38,222 | ) | |||||||
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ||||
Net deferred tax asset | 6,081 | — | |||||||||
Deferred tax liability: | |||||||||||
Debt discount on convertible notes | (6,081 | ) | — | ||||||||
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ||||
Net deferred taxes | $ | 0 | $ | 0 | |||||||
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ||||
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ||||
The Company accounts for uncertain tax positions pursuant to the guidance in FASB ASC Topic 740, Income Taxes. The Company recognizes interest and penalties related to uncertain tax positions, if any, in income tax expense. As of December 31, 2013 and 2012, the Company did not accrue any interest related to uncertain tax positions. The Company's income taxes have not been subject to examination by any tax jurisdictions since its inception. Due to NOL and research and development credit carryforwards, all income tax returns filed by the Company are subject to examination by the taxing jurisdictions. The net change during the year ended December 31, 2013 in total valuation allowance of approximately $21.6 million is primarily due to an increase in the NOL carryforward related to the 2013 net loss from continuing operations. | |||||||||||
A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows, in thousands: | |||||||||||
Year Ended | |||||||||||
December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Balance as of January 1 | $ | 688 | $ | 752 | $ | 642 | |||||
Gross increases related to prior-year tax positions | 23 | — | — | ||||||||
Gross increases (decrease) related to current-year tax positions | 9,117 | (64 | ) | 110 | |||||||
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
Balance as of December 31 | $ | 9,828 | $ | 688 | $ | 752 | |||||
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
The Company believes that its uncertain tax positions would not result in adjustments to its effective income tax rate because likely corresponding adjustments to deferred tax assets would be offset by adjustments to recorded valuation allowances. | |||||||||||
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Commitments and Contingencies | ' | ||||
Commitments and Contingencies | ' | ||||
14. Commitments and Contingencies | |||||
The Company has concurrent leases for office and lab space that extend through April 2018. The Company may elect to extend the term of the leases for an additional five-year term. The leases provide for a tenant improvement allowance of approximately $1.8 million in aggregate. As of December 31, 2013, 2012 and 2011, approximately $0.5 million, $0.3 million, and $0.5 million, respectively, of the allowance has been utilized and included in fixed assets and deferred rent. | |||||
Rent expense for the years ended December 31, 2013, 2012 and 2011 was approximately, $1,020,000, $906,000, and $906,000, respectively. Future minimum lease payments under non-cancelable operating leases as of December 31, 2013 are as follows, in thousands: | |||||
Year ending December 31: | |||||
2014 | $ | 1,118 | |||
2015 | 1,140 | ||||
2016 | 1,163 | ||||
2017 | 1,186 | ||||
Thereafter | 402 | ||||
​ | ​ | ​ | ​ | ​ | |
$ | 5,009 | ||||
​ | ​ | ​ | ​ | ​ | |
​ | ​ | ​ | ​ | ​ | |
The Company has obtained exclusive licenses from third parties for proprietary rights to support the product candidates in the Company's psychiatry portfolio. Under license agreements with Afecta Pharmaceuticals, Inc. (Afecta), the Company has an exclusive option to evaluate Afecta's CNS pipeline and to obtain exclusive worldwide rights to selected product candidates, including an exclusive license to SPN-810. The Company does not owe any future milestone payments for SPN-810. The Company is obligated to pay royalties to Afecta based on worldwide net sales of each of these products in the low-single digits. | |||||
The Company has also entered into a purchase and sale agreement with Rune Healthcare Limited (Rune), where the Company obtained the exclusive worldwide rights to a product concept from Rune. There are no future milestone payments owing to Rune under this agreement. If the Company receives approval to market and sell any products based on the Rune product concept for SPN-809, the Company is obligated to pay royalties to Rune based on net sales worldwide in the low single digits. | |||||
Employee_Benefit_Plan
Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2013 | |
Employee Benefit Plan | ' |
Employee Benefit Plan | ' |
15. Employee Benefit Plan | |
On January 2, 2006, the Company established the Supernus Pharmaceuticals, Inc. 401(k) Profit Sharing Plan (the 401(k) Plan) for its employees under Section 401(k) of the Internal Revenue Code (Code). Under the 401(k) Plan, all full-time employees who are at least 21 years old are eligible to participate in the 401(k) Plan. Employees may participate starting on the first day of the month following employment. Employees may contribute up to the lesser of 90% of eligible compensation or the applicable limit established by the Code. | |
Employees are 100% vested in their contributions to the 401(k) Plan. The Company matches 100% of a participant's contribution for the first 3% of their salary deferral and matches 50% of the next 2% of their salary deferral. As determined by the Board, the Company may elect to make a discretionary contribution not exceeding 60% of the annual compensation paid to all participating employees. The Company's contributions to the 401(k) Plan approximated $645,000, $323,000, and $267,000 for the years ended December 31, 2013, 2012 and 2011, respectively. | |
RelatedParty_Transactions
Related-Party Transactions | 12 Months Ended |
Dec. 31, 2013 | |
Related-Party Transactions | ' |
Related-Party Transactions | ' |
16. Related-Party Transactions | |
In December 2011, the Company entered into a Unit Purchase Agreement with Royalty Opportunities S.à r.l ("ROS") (see Note 9). Pursuant to the Unit Purchase Agreement, the Company sold 100% of its equity interests in TCD to ROS for a cash payment of $27.0 million upon closing, assumption of assets and liabilities, and a potential milestone payment of $3.0 million payable upon the occurrence of certain conditions. ROS is an affiliate of Orbimed Advisors LLC, one of the Company's Common Stock holders. | |
Collaboration_Agreements
Collaboration Agreements | 12 Months Ended |
Dec. 31, 2013 | |
Collaboration Agreements | ' |
Collaboration Agreements | ' |
17. Collaboration Agreements | |
United Therapeutics | |
The Company has a license agreement with United Therapeutics to use one of its proprietary technologies for an oral formulation of Remodulin for the treatment of pulmonary arterial hypertension and potentially for additional indications. Through December 31, 2013, the Company has received $1.5 million in pre-commercial milestone payments under the agreement. On December 20, 2013 United Therapeutics announced that the FDA had approved Orenitram (treprostinil). The launch of this product is expected to be in 2014, which will trigger a milestone payment due to the Company of $2.0 million. Remaining milestone payments could total approximately $4.0 million for the development of additional treprostinil diethanolamine products for a second indication. If United Therapeutics receives approval to market and sell oral treprostinil diethanolamine for additional indications and/or any additional combination products that utilize the Company's technologies, the Company will receive royalties in the low to mid single digits based on net sales worldwide. The Company's license agreement with United Therapeutics will expire, on a country-by-country and product-by-product basis, 12.5 years from the first commercial sale of each product in such country. United Therapeutics may terminate, at its option, the agreement for a technical, strategic or market-related cause after giving the Company a reasonable opportunity to cure. The Company may terminate the agreement if, after having launched a product in a country, United Therapeutics or its sub-licensee discontinues the sale of such product for a prolonged period of time for reasons unrelated to force majeure, regulatory or safety issues. In addition, either party may terminate the agreement for the material, uncured breach by the other party and in certain events of bankruptcy or insolvency of the other party. | |
Stendhal License | |
In August 2011, we executed a Development and Licensing Agreement with Especificos Stendhal, S.A., DE C.V. (Stendhal) that provided Stendhal an exclusive license to our licensed intellectual property underlying our Oxtellar XR product, in Mexico, Venezuela, Colombia and other select markets in Central and South America. The agreement included the right to our patents, proprietary information, and know-how of our drug-delivery technology and pharmaceutical product underlying our Oxtellar XR product. Stendhal is responsible for all costs associated with clinical development, approval, commercialization and distribution of the product in the defined territory, which may be expanded upon certain events. We have received $1.5 million from Stendhal, which is being recognized as revenue on a straight-line basis over the substantive obligation period until approval, which is estimated to be June 2014. We monitor this estimate on a quarterly basis to determine if facts and circumstances may have changed that would require a prospective adjustment of the recognition period. We may receive up to $2.3 million in additional milestone payments, based on certain regulatory and commercial milestones defined in the agreement. As of December 31, 2013, $0.1 million of up-front license payments were recorded as deferred revenue. | |
In September 2012, the Company executed a Development and Licensing Agreement (Stendhal License Agreement) with Stendhal that provided Stendhal with an exclusive license of the Company's licensed intellectual property underlying the Trokendi XR product in the defined territory. The license included the right to the Company's patents, proprietary information, and know-how of the Company's drug-delivery technology and pharmaceutical product underlying its Trokendi XR product. Stendhal is responsible for all costs associated with clinical development, approval, commercialization and distribution of the product in the defined territory. The Company received $1.8 million cash that is being recognized as revenue on a straight-line basis over its substantive obligation period of twelve years. As of December 31, 2013, approximately $1.6 million of this amount was recorded as deferred revenue. The Company monitors this estimate on a quarterly basis to determine if facts and circumstances may have changed that would require a prospective adjustment to the recognition period. The Company may receive up to an additional $1.8 million in future milestone payments, based on certain milestones defined in the Stendhal License Agreement. | |
Quarterly_Financial_Informatio
Quarterly Financial Information (unaudited) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Quarterly Financial Information (unaudited) | ' | |||||||||||||
Quarterly Financial Information (unaudited) | ' | |||||||||||||
18. Quarterly Financial Information (unaudited) | ||||||||||||||
Quarterly financial information for fiscal 2013 and 2012 are presented in the following table, in thousands, except per share data, unaudited: | ||||||||||||||
1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter | |||||||||||
2013 | ||||||||||||||
Revenue | $ | 147 | $ | 281 | $ | 1,257 | $ | 10,334 | ||||||
Total costs and expenses | 18,055 | 15,760 | 18,432 | 21,691 | ||||||||||
Operating loss | (17,908 | ) | (15,479 | ) | (17,175 | ) | (11,357 | ) | ||||||
Net loss | (18,414 | ) | (27,357 | ) | (24,096 | ) | (22,406 | ) | ||||||
Net loss per share, basic and diluted | (0.60 | ) | (0.89 | ) | (0.78 | ) | (0.65 | ) | ||||||
2012 | ||||||||||||||
Revenue | $ | 208 | $ | 91 | $ | 91 | $ | 1,090 | ||||||
Total costs and expenses | 8,086 | 9,348 | 12,381 | 13,834 | ||||||||||
Operating loss | (9,277 | ) | (10,013 | ) | (13,482 | ) | (13,512 | ) | ||||||
Net loss | (9,277 | ) | (10,013 | ) | (13,482 | ) | (13,512 | ) | ||||||
Net loss per share, basic and diluted | (6.05 | ) | (0.61 | ) | (0.55 | ) | (0.51 | ) |
Subsequent_Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2013 | |
Subsequent Events | ' |
Subsequent Events | ' |
19. Subsequent Events | |
During the period from January 1, 2014 to March 14, 2014 holders of the Notes converted approximately $9.5 million of the Notes and we issued a total of approximately 1.8 million shares of common stock in conversion of the principal amount of the Notes and accrued interest thereon, and issued an additional 0.3 million shares of common stock in settlement of the interest make-whole provision related to the converted Notes. | |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Summary of Significant Accounting Policies | ' | ||||
Basis of Presentation | ' | ||||
Basis of Presentation | |||||
The Company's consolidated financial statements include the accounts of Supernus Pharmaceuticals, Inc. and Supernus Europe Ltd., These are collectively referred to herein as "Supernus" or "the Company." All significant intercompany transactions and balances have been eliminated in consolidation. The Company's consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (U.S. GAAP). | |||||
The Company, which is primarily located in the United States, operates in one business segment. | |||||
The assets and liabilities related to TCD Royalty Sub LLC (TCD) have identifiable cash flows that are largely independent of the cash flows of other groups of assets and liabilities, and the Company does not have significant continuing involvement with the related products. Accordingly, the results of operations, related to TCD are presented as discontinued operations until its disposition on December 14, 2011. | |||||
Use of Estimates | ' | ||||
Use of Estimates | |||||
The preparation of the financial statements in accordance with U.S. GAAP requires the Company to make estimates and judgments in certain circumstances that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. In preparing these consolidated financial statements, management has made its best estimates and judgments of certain amounts included in the financial statements, giving due consideration to materiality. On an ongoing basis, the Company evaluates its estimates, including those related to revenue recognition, fair value of financial assets and liabilities, common stock options and warrants, income taxes, preclinical study and clinical trial accruals, and other contingencies. Management bases its estimates on historical experience or on various other assumptions, including information received from its service providers and independent valuation consultants, which it believes to be reasonable under the circumstances. Actual results could differ from these estimates. | |||||
Cash and Cash Equivalents | ' | ||||
Cash and Cash Equivalents | |||||
The Company considers all investments in highly liquid financial instruments with an original maturity of three months or less to be cash equivalents. | |||||
Marketable Securities | ' | ||||
Marketable Securities | |||||
Marketable securities may consist of investments in U.S. Treasuries, various U.S. governmental agency debt securities, corporate bonds and other fixed income securities. Management classifies the Company's investments as available-for-sale. Such securities are carried at estimated fair value, with any unrealized holding gains or losses reported, net of any tax effects reported, as accumulated other comprehensive income, which is a separate component of stockholders' equity. Realized gains and losses, and declines in value judged to be other-than-temporary, if any, are included in consolidated results of operations. A decline in the market value of any available-for-sale security below cost that is deemed to be other-than-temporary results in a reduction in fair value, which is charged to earnings in that period, and a new cost basis for the security is established. Dividend and interest income is recognized as interest income when earned. The cost of securities sold is calculated using the specific identification method. The Company places all investments with highly rated government or private sector or industrial financial institutions whose debt is rated as investment grade. | |||||
The Company established the Supernus Supplemental Executive Retirement Plan (SERP) for the sole purpose of receiving funds for two executives from a previous SERP and providing a continuing deferral program under the Supernus SERP. As of December 31, 2013 and December 31, 2012, the estimated fair value of the mutual fund investment securities within the SERP was approximately $305,000 and $279,000 respectively. The fair value of these assets is included within other non-current assets on the consolidated balance sheets. A corresponding noncurrent liability is also included in the consolidated balance sheets to reflect the Company's obligation for the SERP. The Company has not made, and has no plans to make, contributions to the SERP. The securities are restricted in nature and can only be used for purposes of paying benefits under the SERP. | |||||
Accounts Receivable, net | ' | ||||
Accounts Receivable, net | |||||
Accounts receivable are reported in the consolidated balance sheets at outstanding amounts, less an allowance for doubtful accounts if necessary and net of prompt pay discounts. The Company extends credit without requiring collateral. The Company writes off uncollectible receivables when the likelihood of collection is remote. The Company evaluates the collectability of accounts receivable on a regular basis. An allowance for uncollectible receivables is based upon various factors including the financial condition and payment history of customers, an overall review of collections experience on other accounts, and economic factors or events expected to affect future collections experience. No accounts have been written off in 2013 and 2012. No allowance for uncollectible receivables is recorded at December 31, 2013 or December 31, 2012. The Company has an allowance of $0.1 million for expected prompt-pay discounts as of December 31, 2013 and no allowance at December 31, 2012. The following table includes those customers that represent more than 10% total revenue: | |||||
Customer A | 34 | % | |||
Customer B | 34 | % | |||
Customer C | 26 | % | |||
Three customers each having a balance of more than 10% of the accounts receivable balance on the consolidated balance sheet as of December 31, 2013 represent an aggregate of 96.4% of accounts receivable. | |||||
Concentration of Credit Risk | ' | ||||
Concentration of Credit Risk | |||||
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash, cash equivalents, accounts receivable and marketable securities. The counterparties are various corporations and financial institutions of high credit standing. | |||||
Substantially all of the Company's cash and cash equivalents are maintained with well known, U.S. and non U.S. financial institutions, government agencies, and corporations. Deposits held with banks may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed upon demand and, therefore, management believes they bear minimal risk. | |||||
Inventory | ' | ||||
Inventory | |||||
Inventories, which are recorded at the lower of cost or market, include materials, labor, and other direct and indirect costs and are valued using the first-in, first-out method. The Company capitalizes inventories produced in preparation for commercial launches when it becomes probable that the related product candidates will receive regulatory approval and that the related costs will be recoverable through the commercial sale of the product. In the case of Oxtellar XR, manufacturing costs have been capitalized since October 2012, when the Company received tentative approval from the FDA for the commercialization of Oxtellar XR. In the case of Trokendi XR, manufacturing costs have been capitalized since June 2012, when the Company received tentative approval from the FDA for the commercialization of Trokendi XR. | |||||
Inventory is evaluated for impairment through consideration of factors such as the net realizable value, lower of cost or market, obsolescence, and expiry. Inventories do not have carrying values that exceed either cost or net realizable value. The company had no inventory reserve at December 31, 2013 and December 31, 2012. | |||||
Property and Equipment | ' | ||||
Property and Equipment | |||||
Property and equipment are stated at cost. Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is credited or charged to operations. Repairs and maintenance costs are expensed as incurred. Depreciation and amortization are computed using the straight-line method over the following average useful lives: | |||||
Computer equipment | 3Â years | ||||
Software | 3Â years | ||||
Lab equipment and furniture | 5 - 10Â years | ||||
Leasehold improvements | Shorter of lease term or useful life | ||||
Intangible Assets | ' | ||||
Intangible Assets | |||||
Intangible assets consist primarily of purchased patents. Patents are carried at cost less accumulated amortization, which is calculated on a straight-line basis over the estimated useful lives of the patents, generally estimated to be ten years. The carrying value of the patents is assessed for impairment annually during the fourth quarter of each year, or more frequently if impairment indicators exist. There were no indicators of impairment identified at December 31, 2013 or 2012. | |||||
Impairment of Long-Lived Assets | ' | ||||
Impairment of Long-Lived Assets | |||||
Long-lived assets consist primarily of purchased patents and property and equipment. The Company assesses the recoverability of its long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If indications of impairment exist, projected future undiscounted cash flows associated with the asset are compared to the carrying amount to determine whether the asset's value is recoverable. Evaluating for impairment requires judgment, including the estimation of future cash flows, future growth rates and profitability and the expected life over which cash flows will occur. Changes in the Company's business strategy or adverse changes in market conditions could impact impairment analyses and require the recognition of an impairment charge equal to the excess of the carrying value of the long-lived assets over its estimated fair value. For the years ended December 31, 2013 and 2012, the Company determined that there was no impairment of the Company's long-lived assets. | |||||
Deferred Financing Costs | ' | ||||
Deferred Financing Costs | |||||
Deferred financing costs consist of financing costs incurred by the Company in connection with the closing of the Company's 7.50% Convertible Senior Secured Notes and Secured Notes Payable (see Note 8). The Company amortizes deferred financing costs over the term of the related debt using the effective interest method. Upon extinguishment of debt the related deferred financing costs are written off. | |||||
Preclinical Study and Clinical Trial Accruals and Deferred Advance Payments | ' | ||||
Preclinical Study and Clinical Trial Accruals and Deferred Advance Payments | |||||
The Company estimates preclinical study and clinical trial expenses based on the services performed pursuant to contracts with research institutions, investigators, and clinical research organizations that conduct these activities on our behalf. In recording service fees, the Company estimates the time period over which the related services will be performed and compares the level of effort expended through the end of each period to the cumulative expenses recorded and payments made for such services and, as appropriate, accrues additional service fees or defers any non-refundable advance payments until the related services are performed. If the actual timing of the performance of services or the level of effort varies from the estimate, the Company will adjust its accrual or deferred advance payment accordingly. If the Company later determines that it no longer expects the services associated with a nonrefundable advance payment to be rendered, the advance payment will be charged to expense in the period that such determination is made. | |||||
Income Taxes | ' | ||||
Income Taxes | |||||
The Company utilizes the liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax reporting bases of assets and liabilities and are measured using enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. Valuation allowances are established to reduce deferred tax assets to the amounts expected to be realized. | |||||
The Company accounts for uncertain tax positions in its consolidated financial statements when it is more-likely-than-not that the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts. The Company's policy is to recognize any interest and penalties related to income taxes in income tax expense. | |||||
Revenue Recognition on Product Sales | ' | ||||
Revenue Recognition on Product Sales | |||||
Revenue from product sales are recognized when persuasive evidence of an arrangement exists, delivery has occurred and title of the product and associated risk of loss has passed to the customer, the price is fixed or determinable, collection from the customer has been reasonably assured and all performance obligations have been met and returns and allowances can be reasonably estimated. Product sales are recorded net of estimated rebates, chargebacks, discounts, co-pay assistance and other deductions (collectively, "sales deductions") as well as estimated product returns. | |||||
Oxtellar XR Gross Revenue | |||||
The Company launched Oxtellar XR on February 4, 2013. During the fourth quarter of 2013, we began to recognize revenue for Oxtellar XR contemporaneously upon shipment of finished product to wholesalers less allowances for estimated net sales deductions (defined below). | |||||
Trokendi XR Gross Revenue | |||||
Our products are distributed through wholesalers and pharmaceutical distributors. Each of these wholesalers and distributors will take title and ownership of the product upon physical receipt of the product and then distribute our products to the pharmacies. Though these distributors will be invoiced concurrent with product shipment, we will be unable to recognize revenue upon shipment until such time as we can reasonably estimate and record provisions for sales deductions and product returns utilizing historical information and market research projections. | |||||
The Company launched Trokendi XR on August 26, 2013. Through December 31, 2013 the Company recorded shipments to wholesalers as deferred revenue i.e., sales price net of known sales deductions (e.g. prompt pay discounts and other similar charges defined below). We lack the experiential data which would allow us to estimate all remaining sales rebates, allowances and returns. Accordingly, we must wait until these data become available to the Company. | |||||
Rather than recognize revenue upon shipments to wholesalers, the Company currently recognizes Trokendi XR revenue upon filling prescriptions at pharmacies because prescriptions filled at the pharmacy level have no remaining right of return. However, because we are still compiling historical data related to our experience with other sales deductions, we cannot reasonably estimate all other sales rebates and allowances, but rather must wait until this data becomes available to the Company. Because this occurs approximately eight weeks after the close of the quarter, the Company currently delays recognition of revenue until the subsequent fiscal quarter. | |||||
The Company believes the compilation of sufficient product specific historical data to reasonably estimate returns, rebates, and allowances for Trokendi XR may be available by the second quarter of 2014, at which time the Company may record revenue based on shipments to wholesalers rather than on prescriptions filled at the pharmacy level. | |||||
With respect to prescriptions which were filled in the third quarter, data on rebates and allowances were generally received by the end of November. As a result of the time lag between the end of the quarter and receipt of these data, the Company could not determine net revenue in a timeframe which would allow reporting third quarter net revenue in the Form 10-Q filed for the quarter ended September 30, 2013. Consequently, revenue generated from prescriptions filled at the pharmacy level in the third quarter are being reported in the Company's fourth quarter financial results. We expect to continue to report revenue based on prescriptions filled at the pharmacy level until sufficient experience with rebates and allowances is assembled to allow reporting of revenue based on shipments to wholesalers. | |||||
Net Sales Deductions | |||||
Allowances for estimated sales deductions are provided for the following: | |||||
• | |||||
Rebates.  Allowances for rebates include mandated discounts under the Medicaid Drug Rebate Program, the Medicare coverage gap program, as well as negotiated discounts with commercial health-care providers. Rebates are amounts owed after the final dispensing of products to a benefit plan participant and are based upon contractual agreements or legal requirements with the public sector (e.g. Medicaid) and with private sector benefit providers. The allowance for rebates is based on statutory and contractual discount rates and expected claimed rebates paid based on a plan provider's utilization. Our estimates for expected claimed rebates are based in part on third party market research. Rebates are generally invoiced and paid quarterly in arrears so that the accrual balance consists of an estimate of the amount expected to be incurred for the current quarter's activity, plus an accrual balance for known prior quarters' unpaid rebates. If actual future rebates vary from estimates, we may need to adjust prior period accruals, which would affect revenue in the period of adjustment. | |||||
• | |||||
Chargebacks.  Chargebacks are discounts that occur when contracted customers purchase directly from an intermediary distributor or wholesaler. Contracted customers, which currently consist primarily of Public Health Service institutions and Federal government entities purchasing via the Federal Supply Schedule, generally purchase the product at a discounted price. The distributor or wholesaler, in turn, charges back the difference between the price initially paid by the distributor or wholesaler and the discounted price paid to the distributor or wholesaler by the customer. The allowance for distributor/wholesaler chargebacks is based on known sales to contracted customers. | |||||
• | |||||
Distributor/Wholesaler deductions and discounts.  U.S. specialty distributors and wholesalers are offered various forms of consideration including allowances, service fees and prompt payment discounts as consideration for distributing our products. Distributor allowances and service fees arise from contractual agreements with distributors and are generally a percentage of the purchase price paid by the distributors and wholesalers. Wholesale customers are offered a prompt pay discount for payment within a specified period. | |||||
• | |||||
Co-pay assistance.  Patients who pay in cash or have commercial insurance and meet certain eligibility requirements may receive co-pay assistance from the Company. The intent of this program is to reduce the patient's out of pocket costs. Liabilities for co-pay assistance will be based on actual program participation and estimates of program redemption using data provided by third-party administrators. | |||||
• | |||||
Returns.  Sales of our products are not subject to a general right of return; however, the Company will accept product that is damaged or defective when shipped directly from our warehouse or for expired product up to 12 months subsequent to its expiry date. Product that has been used to fill patient prescriptions is no longer subject to any right of return. | |||||
Revenue recognition of License Revenue | ' | ||||
Revenue recognition of License Revenue | |||||
Multiple Element Arrangements | |||||
For arrangements entered into with multiple elements, such as collaboration agreements, the Company evaluates whether the components of each arrangement are separate elements based on certain criteria. Accordingly, revenues from such agreements are recognized based on the performance requirements of the agreements. The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the fee is fixed and determinable, and collection is reasonably assured. | |||||
Non-refundable license fees are recognized as revenue when the Company has a contractual right to receive such payment, the contract price is fixed or determinable, the collection of the resulting receivable is reasonably assured, and the Company has no further significant performance obligations in exchange for the license. | |||||
As of January 1, 2011, the Company adopted Accounting Standard Update (ASU) No. 2009-13, Revenue Recognition (Topic 605)—Multiple-Deliverable Revenue Arrangements: a consensus of the FASB Emerging Issues Task Force (ASU No. 2009-13) which was codified in ASC 605-25. ASU No. 2009-13 establishes a selling-price hierarchy for determining the selling price of each element within a multiple-deliverable arrangement. Specifically, the selling price assigned to each deliverable is to be based on vendor-specific objective evidence (VSOE) if available; third-party evidence, if VSOE is unavailable; and estimated selling prices if neither VSOE or third-party evidence is available. In addition, ASU No. 2009-13 eliminates the residual method of allocating arrangement consideration and instead requires allocation using the relative selling price method. The adoption of ASU No. 2009-13 did not impact the Company's consolidated financial statements, as the Company did not enter into or modify any multiple element arrangements during 2011. The Company evaluates new or materially modified multiple element arrangements pursuant to the guidance in ASC 605-25. | |||||
License and Collaboration Agreements | |||||
We have entered into collaboration agreements to have both Oxtellar XR and Trokendi XR commercialized outside of the U.S. These agreements generally include an up-front license fee and ongoing milestone payments upon the achievement of specific events. We believe the milestones meet all of the necessary criteria to be considered substantive and therefore should be recognized as revenue when achieved. For up-front license fees, we have estimated the service period of the contract and are recognizing this payment as revenue on a straight-line basis over the respective service period. | |||||
Milestone Payments | |||||
Milestone payments on licensing agreements are recognized as revenue when the collaborative partner acknowledges completion of the milestone and substantive effort was necessary to achieve the milestone. Management may recognize revenue contingent upon the achievement of a milestone in its entirety in the period in which the milestone is achieved only if the milestone meets all the criteria to be considered substantive. Substantive milestone payments are recognized upon achievement of the milestone only if all of the following conditions are met: | |||||
• | |||||
the milestone payments are non-refundable; | |||||
• | |||||
achievement of the milestone involves a degree of risk and was not reasonably assured at the inception of the arrangement; | |||||
• | |||||
substantive effort on the Company's part is involved in achieving the milestone; | |||||
• | |||||
the amount of the milestone payment is reasonable in relation to the effort expended or the risk associated with achievement of the milestone; and | |||||
• | |||||
a reasonable amount of time passes between the up-front license payment and the first milestone payment as well as between each subsequent milestone payment. | |||||
Determination as to whether a payment meets the aforementioned conditions involves management's judgment. If any of these conditions are not met, the resulting payment would not be considered a substantive milestone, and therefore the resulting payment would be considered part of the consideration for the single unit of accounting and amortized over the appropriate period. | |||||
The Company recorded no milestone revenues during the year ended December, 31, 2013 and $1.1 million of milestone revenue during the year ended December 31, 2012, respectively. | |||||
Cost of Product Sales | ' | ||||
Cost of Product Sales | |||||
The cost of product sales consist primarily of materials, third-party manufacturing costs, freight and distribution costs, allocation of labor, quality control and assurance, and other overhead costs associated with the sales of Oxtellar XR based on product shipped to distributors through December 31, 2013 and sales of Trokendi XR based on prescriptions filled at the pharmacy level during the third quarter of 2013. | |||||
Research and Development Costs | ' | ||||
Research and Development Costs | |||||
Research and development expenditures are expensed as incurred. Research and development costs primarily consist of employee-related expenses, including salaries and benefits; expenses incurred under agreements with contract research organizations, investigative sites, and consultants that conduct the Company's clinical trials; the cost of acquiring and manufacturing clinical trial materials; the cost of manufacturing materials used in process validation, to the extent that those materials are manufactured prior to receiving regulatory approval for those products and are not expected to be sold commercially, facilities costs that do not have an alternative future use; related depreciation and other allocated expenses; license fees for and milestone payments related to in-licensed products and technologies; share-based compensation expense; and costs associated with non-clinical activities and regulatory approvals. | |||||
Advertising Expense | ' | ||||
Advertising Expense | |||||
The Company records the cost of its advertising efforts when services are performed or goods are delivered. The Company incurred approximately $14.6 million and $5.8 million in advertising costs for the year ended December 31, 2013 and 2012, respectively. | |||||
Share-Based Compensation | ' | ||||
Share-Based Compensation | |||||
Employee share-based compensation is measured based on the estimated fair value on the grant date. The grant date fair value is calculated using the Black-Scholes option-pricing model, which requires the use of subjective assumptions including volatility, expected term, risk-free rate, and the fair value of the underlying common stock. The Company has awarded non-vested stock that vest based on service conditions. The Company recognizes expense using the straight-line method less estimated forfeitures. | |||||
The Company records the expense for stock option grants to non-employees based on the estimated fair value of the stock option using the Black-Scholes option-pricing model. The fair value of non-employee awards is re-measured at each reporting period. As a result, stock compensation expense for non-employee awards with vesting is affected by subsequent changes in the fair value of the Company's common stock. | |||||
Warrant Liability | ' | ||||
Warrant Liability | |||||
In January 2011, the Company entered into a secured credit facility pursuant to a loan and security agreement with certain lenders, which was subsequently amended in December 2011, providing for term loans of up to an aggregate of $30.0 million. In connection with the drawdown of $15.0 million under the secured credit facility on January 26, 2011, the Company issued to its lenders warrants to purchase an aggregate of 375,000 shares of the Company's Series A Preferred Stock at an exercise price of $1.00 per share. The warrants became exercisable immediately and expire on January 26, 2021. Upon completion of the Company's IPO on May 1, 2012, the lender warrants converted into warrants to purchase 93,750 shares of Common Stock at an exercise price of $4.00 per share. These warrants are recorded as a derivative liability and, as such, the Company reflects the warrant liability at fair value in the consolidated balance sheets. The fair value of this derivative liability is re-measured at the end of every reporting period and the change in fair value is reported in the consolidated statements of operations as other income (expense). On October 5, 2012, a holder exercised warrants to purchase an aggregate of 75,000 shares of common stock via a cashless net share settlement election in accordance with the terms of the agreement, pursuant to which we issued the warrant holder 49,137 shares of common stock. As of December 31, 2013 and December 31, 2012, the fair value of the outstanding warrants was estimated to be approximately $119,000 and $114,000, respectively. The change in fair value of approximately $5,000 and $506,000 has been recorded in other income (expense) in the Company's consolidated statements of operations for the year ended December 31, 2013 and 2012, respectively. | |||||
In connection with the drawdown of the second $15.0 million under the secured credit facility on December 30, 2011, the Company issued to its lenders warrants to purchase an aggregate of 200,000 shares of the Company's Series A Preferred Stock at an exercise price of $1.50 per share. The warrants became exercisable immediately and expire on December 30, 2021. Upon completion of the Company's IPO on May 1, 2012, the warrants converted into warrants to purchase 49,999 shares of Common Stock at an exercise price of $5.00 per share. These warrants are recorded as a derivative liability and, as such, the Company reflects the warrant liability at fair value in the consolidated balance sheets. The fair value of this derivative liability is re-measured at the end of every reporting period and the change in fair value is reported in the consolidated statements of operations as other income (expense). On October 5, 2012, a holder exercised warrants to purchase an aggregate of 26,667 shares of common stock via a cashless net share settlement election in accordance with the terms of the agreement, pursuant to which we issued the warrant holder 15,172 shares of common stock. As of December 31, 2013 and 2012, the fair value of the outstanding warrants was estimated to be approximately $153,000 and $138,000, respectively. The change in fair value of approximately $15,000 and $204,000 has been recorded in other income (expense) in the Company's consolidated statements of operations for the year ended December 31, 2013 and 2012, respectively. | |||||
The terms of the warrant agreements provide for "down-round" anti-dilution adjustment for the warrants in certain situations whereby the Company sells or issues (a)Â shares at a price per share less than the exercise price of the warrants, or (b)Â equity-linked financial instruments with strike prices less than the exercise price of the warrants. As a result of this "down round" provision, the warrants continue to be classified as derivative liabilities. | |||||
Subsequent to the completion of its IPO, which occurred on May 1, 2012, the fair value of the Common Stock warrants is determined using a Black-Scholes model within a Monte-Carlo framework. The Monte-Carlo simulation is a generally accepted statistical method used to estimate fair value based on the application of subjective assumptions, consistently applied for each period, including the probability, timing and magnitude of the Company's issuance of additional common stock in future financings or raising capital via debt issuance. This valuation is computed at the end of each fiscal quarter to reflect conditions at each valuation date until the warrants are exercised or they expire. In addition to assumptions regarding future equity financings, consideration is also given to the current stock price, anticipated stock volatility going forward, and the anti-dilution provisions embedded in the warrant agreements. | |||||
Recently Issued Accounting Pronouncements | ' | ||||
Recently Issued Accounting Pronouncements | |||||
In April 2013, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, which amended interim and annual reporting requirements about accumulated other comprehensive income (AOCI). In interim periods, companies are required to report information about reclassifications out of AOCI and changes in AOCI balances. The provision of ASU 2013-02 became effective for the first quarter of 2013. The adoption of ASU 2013-02 did not have a material effect on the Company's consolidated results of operations, financial position or liquidity. | |||||
In July 2013, the FASB issued ASU No. 2013-11, which amended ASC Topic 740 regarding presentation of an unrecognized tax benefit when a net operating loss (NOL) carryforward, a similar tax loss, or a tax credit carryforward exists. The amendments in ASU No. 2013-11 require an entity to present an unrecognized tax benefit as a reduction of a deferred tax asset for an NOL carryforward, or similar tax loss or tax credit carryforward, rather than as a liability when (1) the uncertain tax position would reduce the NOL or other carryforward under the tax law of the applicable jurisdiction and (2) the entity intends to use the deferred tax asset for that purpose. The ASU does not require new recurring disclosures. This amendment is effective prospectively for fiscal years beginning after December 15, 2013. The Company does not believe this amendment will have a material impact on its financial statements. | |||||
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Summary of Significant Accounting Policies | ' | ||||
Schedule of customers that represent more than 10% total revenue | ' | ||||
Customer A | 34 | % | |||
Customer B | 34 | % | |||
Customer C | 26 | % | |||
Schedule of average useful lives used to compute depreciation and amortization | ' | ||||
Computer equipment | 3Â years | ||||
Software | 3Â years | ||||
Lab equipment and furniture | 5 - 10Â years | ||||
Leasehold improvements | Shorter of lease term or useful life |
Fair_Value_of_Financial_Instru1
Fair Value of Financial Instruments (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Fair Value of Financial Instruments | ' | |||||||||||||
Schedule of fair value of the financial assets and liabilities | ' | |||||||||||||
The following tables show the fair value of the Company's financial assets and liabilities that are required to be measured at fair value, in thousands: | ||||||||||||||
Fair Value Measurements at December 31, 2013 | ||||||||||||||
Total Carrying | Quoted Prices | Significant | Significant | |||||||||||
Value at | in Active | Other | Unobservable | |||||||||||
December 31, | Markets | Observable | Inputs | |||||||||||
2013 | (Level 1) | Inputs | (Level 3) | |||||||||||
(Level 2) | ||||||||||||||
Assets: | ||||||||||||||
Cash and cash equivalents | $ | 32,980 | $ | 32,980 | $ | — | $ | — | ||||||
Marketable securities | 49,211 | — | 49,211 | — | ||||||||||
Long term investments | 8,756 | — | 8,756 | — | ||||||||||
Marketable securities—restricted (SERP) | 305 | — | 305 | — | ||||||||||
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
Total assets at fair value | $ | 91,252 | $ | 32,980 | $ | 58,272 | $ | — | ||||||
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
Liabilities: | ||||||||||||||
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
Derivative liabilities | $ | 12,644 | $ | — | $ | — | $ | 12,644 | ||||||
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
Fair Value Measurements at December 31, 2012 | ||||||||||||||
Total Carrying | Quoted Prices | Significant | Significant | |||||||||||
Value at | in Active | Other | Unobservable | |||||||||||
December 31, | Markets | Observable | Inputs | |||||||||||
2012 | (Level 1) | Inputs | (Level 3) | |||||||||||
(Level 2) | ||||||||||||||
Assets: | ||||||||||||||
Cash and cash equivalents | $ | 40,302 | $ | 31,561 | $ | 8,741 | $ | — | ||||||
Marketable securities | 48,206 | — | 48,206 | — | ||||||||||
Marketable securities—restricted (SERP) | 279 | — | 279 | — | ||||||||||
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
Total assets at fair value | $ | 88,787 | $ | 31,561 | $ | 57,226 | $ | — | ||||||
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
Liabilities: | ||||||||||||||
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
Derivative liabilities | $ | 251 | $ | — | $ | — | $ | 251 | ||||||
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
Schedule of Level 3 liabilities included in Non-current Liabilities on the Balance Sheet | ' | |||||||||||||
The following table presents information about the Company's Level 3 liabilities as of December 31, 2012 and December 31, 2013 that are included in the Non-Current Liabilities section of the Consolidated Balance Sheets, in thousands: | ||||||||||||||
Year Ended | ||||||||||||||
December 31, | ||||||||||||||
2012 and 2013 | ||||||||||||||
Balance at December 31, 2011 | $ | 697 | ||||||||||||
Exercise of warrants | (1,156 | ) | ||||||||||||
Changes in fair value of warrants included in earnings | 710 | |||||||||||||
​ | ​ | ​ | ​ | ​ | ||||||||||
Balance at December 31, 2012 | 251 | |||||||||||||
​ | ​ | ​ | ​ | ​ | ||||||||||
Initial value of interest make-whole payment associated with the convertible notes | 9,270 | |||||||||||||
Changes in fair value of derivative liabilities included in earnings | 13,354 | |||||||||||||
Reduction due to conversion of debt to equity | (10,231 | ) | ||||||||||||
​ | ​ | ​ | ​ | ​ | ||||||||||
Balance at December 31, 2013 | $ | 12,644 | ||||||||||||
​ | ​ | ​ | ​ | ​ | ||||||||||
​ | ​ | ​ | ​ | ​ | ||||||||||
Schedule of unrestricted marketable securities | ' | |||||||||||||
Unrestricted marketable securities held by the Company were as follows, in thousands: | ||||||||||||||
At December 31, 2013: | ||||||||||||||
Available for Sale | Amortized | Gross | Gross | Fair Value | ||||||||||
Cost | Unrealized | Unrealized | ||||||||||||
Gains | Losses | |||||||||||||
Corporate debt securities | $ | 57,967 | $ | 33 | $ | (33 | ) | $ | 57,967 | |||||
At December 31, 2012: | ||||||||||||||
Available for Sale | Amortized | Gross | Gross | Fair Value | ||||||||||
Cost | Unrealized | Unrealized | ||||||||||||
Gains | Losses | |||||||||||||
Corporate debt securities | $ | 48,259 | $ | 1 | $ | (54 | ) | $ | 48,206 | |||||
Schedule of contractual maturities of the unrestricted marketable securities held | ' | |||||||||||||
The contractual maturities of the unrestricted marketable securities held by the Company were as follows, in thousands: | ||||||||||||||
December 31, | ||||||||||||||
2013 | ||||||||||||||
Less Than 1 Year | $ | 49,211 | ||||||||||||
1Â -Â 5Â years | 8,756 | |||||||||||||
Greater Than 5 Years | — | |||||||||||||
​ | ​ | ​ | ​ | ​ | ||||||||||
Total | $ | 57,967 | ||||||||||||
​ | ​ | ​ | ​ | ​ | ||||||||||
​ | ​ | ​ | ​ | ​ | ||||||||||
Common stock warrant | ' | |||||||||||||
Fair value of financial instruments | ' | |||||||||||||
Schedule of assumptions used to calculate fair value of liabilities | ' | |||||||||||||
Exercise Price | $4.00Â -Â $5.00 per share | |||||||||||||
Volatility | 70% | |||||||||||||
Stock Price as of December 31, 2013 | $7.54 per share | |||||||||||||
Term | 7.1Â -Â 8.0Â years | |||||||||||||
Dividend Yield | 0.00% | |||||||||||||
Risk-Free Rate | 2.55%Â -Â 2.75% | |||||||||||||
Interest make-whole liability | ' | |||||||||||||
Fair value of financial instruments | ' | |||||||||||||
Schedule of assumptions used to calculate fair value of liabilities | ' | |||||||||||||
Volatility | 45% | |||||||||||||
Stock Price as of December 31, 2013 | $7.54 per share | |||||||||||||
Credit Spread | 1200 bps | |||||||||||||
Term | 3.3Â years | |||||||||||||
Dividend Yield | 0.00% |
Inventories_Tables
Inventories (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Inventories | ' | |||||||
Schedule of inventories | ' | |||||||
Inventories consist of the following, in thousands: | ||||||||
December 31, | December 31, | |||||||
2013 | 2012 | |||||||
Raw materials | $ | 3,897 | $ | 1,152 | ||||
Work in process | 1,347 | — | ||||||
Finished goods | 1,908 | — | ||||||
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
Total | $ | 7,152 | $ | 1,152 | ||||
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
Property_and_Equipment_Tables
Property and Equipment (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Property and Equipment | ' | |||||||
Schedule of property and equipment | ' | |||||||
Property and equipment consist of the following, in thousands: | ||||||||
December 31, | December 31, | |||||||
2013 | 2012 | |||||||
Computer equipment | $ | 798 | $ | 615 | ||||
Software | 209 | 209 | ||||||
Lab equipment and furniture | 4,809 | 3,896 | ||||||
Leasehold improvements | 2,329 | 1,779 | ||||||
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
8,145 | 6,499 | |||||||
Less accumulated depreciation and amortization | (5,591 | ) | (5,078 | ) | ||||
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
$ | 2,554 | $ | 1,421 | |||||
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
Intangible_Assets_Tables
Intangible Assets (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Intangible Assets | ' | ||||||||||||||||
Schedule of gross carrying amount and related accumulated amortization of the intangible assets | ' | ||||||||||||||||
The following sets forth the gross carrying amount and related accumulated amortization of these intangible assets, in thousands: | |||||||||||||||||
December 31, 2013 | December 31, 2012 | ||||||||||||||||
Weighted- | Gross Carrying | Accumulated | Gross Carrying | Accumulated | |||||||||||||
Average Life | Amount | Amortization | Amount | Amortization | |||||||||||||
Purchased patents | 10 | $ | 2,292 | $ | 1,838 | $ | 2,292 | $ | 1,609 | ||||||||
Patent defense costs(1) | $ | 704 | $ | — | $ | — | $ | — | |||||||||
-1 | |||||||||||||||||
Three U.S. patents have been issued covering Oxtellar XR, providing patent protection through 2027. The Company's patent defense costs will be capitalized until the outcome of the Watson litigation becomes known. Assuming a successful outcome of that litigation, these costs will commence amortization from that point of time forward. | |||||||||||||||||
Accrued_Liabilities_Tables
Accrued Liabilities (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Accrued Liabilities | ' | |||||||
Schedule of accrued expenses | ' | |||||||
Accrued Liabilities are comprised of the following (and are included within the accounts payable and accrued expenses line item on the consolidated balance sheets), in thousands: | ||||||||
December 31, | December 31, | |||||||
2013 | 2012 | |||||||
Accrued clinical trial and clinical supply costs | $ | 2,253 | $ | 3,335 | ||||
Accrued compensation | 5,016 | 2,492 | ||||||
Accrued rebates and allowances | 1,132 | — | ||||||
Accrued product costs | 3,274 | — | ||||||
Accrued sales and marketing expenses | 1,077 | 1,315 | ||||||
Accrued interest | 619 | 213 | ||||||
Other accrued liabilities | 1,801 | 505 | ||||||
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
$ | 15,172 | $ | 7,860 | |||||
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
Convertible_Senior_Secured_Not1
Convertible Senior Secured Notes (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Convertible Senior Secured Notes | ' | ||||
Summary of issuance of Notes reflected in balance sheet | ' | ||||
The table below summarizes how the issuance of the Notes is reflected in the balance sheet at December 31, 2013, in thousands: | |||||
December 31, 2013 | |||||
Gross proceeds | $ | 90,000 | |||
Initial value of interest make-whole derivative reported as debt discount | (9,270 | ) | |||
Conversion option reported as debt discount and APIC | (22,336 | ) | |||
Conversion of debt to equity—principal | (40,492 | ) | |||
Conversion of debt to equity—debt discount | 13,833 | ||||
Amortization of debt discount | 2,658 | ||||
​ | ​ | ​ | ​ | ​ | |
Carrying value | $ | 34,393 | |||
​ | ​ | ​ | ​ | ​ | |
​ | ​ | ​ | ​ | ​ | |
ShareBased_Payments_Tables
Share-Based Payments (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Share-Based Payments | ' | ||||||||||
Schedule of share-based compensation recognized related to the grant of employee and non-employee stock options, SARS and non-vested stock | ' | ||||||||||
Year Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
(in thousands) | |||||||||||
Research and development | $ | 417 | $ | 208 | $ | 63 | |||||
Selling, general and administrative | 1,291 | 131 | (145 | ) | |||||||
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
Total | $ | 1,708 | $ | 339 | $ | (82 | ) | ||||
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
Schedule of assumptions used in estimation of fair value of each award option on the date of grant using Black-Scholes option-pricing model | ' | ||||||||||
Year Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Fair value of common stock | $5.40 - $7.90 | $5.07 - $12.92 | $2.56 - $3.36 | ||||||||
Expected volatility | 69.5% - 70.9% | 68.3% - 71.6% | 59.1% - 74.7% | ||||||||
Dividend Yield | 0% | 0% | 0% | ||||||||
Expected term | 6.25 - 9.60Â years | 6.25Â years | 0.41 - 6.25Â years | ||||||||
Risk-free interest rate | 1.20% - 2.94% | 0.89% - 1.14% | 0.15% - 2.93% | ||||||||
Expected forfeiture rate | 5% | 0% - 5% | 0% - 5% | ||||||||
Summary of stock option and SAR activity | ' | ||||||||||
Number of | Weighted- | Weighted-Average | |||||||||
Options | Average Exercise | Remaining | |||||||||
Price | Contractual | ||||||||||
Term | |||||||||||
Outstanding, December 31, 2011 | 598,109 | $ | 2.75 | 7.71 | |||||||
Granted | 188,136 | $ | 10.73 | ||||||||
Exercised | (159,264 | ) | $ | 1.67 | |||||||
Forfeited or expired | (57,070 | ) | $ | 2.45 | |||||||
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
Outstanding, December 31, 2012 | 569,911 | $ | 5.72 | 7.88 | |||||||
Granted | 974,582 | $ | 7.79 | ||||||||
Exercised | (62,513 | ) | $ | 1.25 | |||||||
Forfeited or expired | (18,937 | ) | $ | 6.47 | |||||||
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
Outstanding, December 31, 2013 | 1,463,043 | $ | 7.27 | 8.51 | |||||||
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
As of December 31, 2013: | |||||||||||
Vested and expected to vest | 1,425,752 | $ | 7.26 | 8.5 | |||||||
Exercisable | 256,227 | $ | 4.47 | 6.44 |
Loss_per_Share_Tables
Loss per Share (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Loss per Share | ' | ||||||||||
Schedule of common stock equivalents excluded in the calculation of diluted loss per share | ' | ||||||||||
Year Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Shares Underlying Convertible Senior Secured Notes | 6,219,782 | — | — | ||||||||
Series A Preferred Stock | — | 4,049,863 | 12,249,998 | ||||||||
Warrants to purchase Series A Preferred Stock/Common Stock | 13,388 | 21,090 | 143,749 | ||||||||
Stock Options, Stock Appreciation Rights, and Non-vested Stock Options | 151,737 | 256,939 | 598,109 |
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Income Taxes | ' | ||||||||||
Schedule of components of the income tax benefit | ' | ||||||||||
The components of the income tax benefit were as follow, in thousands: | |||||||||||
Year Ended | |||||||||||
December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Current | |||||||||||
Federal | $ | — | $ | — | $ | 14,090 | |||||
State | — | — | 2,155 | ||||||||
Deferred | |||||||||||
Federal | — | — | — | ||||||||
State | — | — | — | ||||||||
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
Total | $ | — | $ | — | $ | 16,245 | |||||
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
Schedule of reconciliation of the expected income tax benefit computed using the federal statutory income tax rate to the entity's effective income tax rate | ' | ||||||||||
A reconciliation of the expected income tax benefit computed using the federal statutory income tax rate to the Company's effective income tax rate is as follows, in thousands: | |||||||||||
Year Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Income tax (benefit) computed at federal statutory tax rate | $ | (32,286 | ) | $ | (16,270 | ) | $ | (13,419 | ) | ||
Permanent items | 340 | 396 | 57 | ||||||||
State taxes | (4,772 | ) | (2,487 | ) | (2,155 | ) | |||||
Change in valuation allowance | 31,526 | 18,754 | — | ||||||||
Uncertain tax position | 5,411 | (64 | ) | 129 | |||||||
Research and development credits | (156 | ) | — | (857 | ) | ||||||
Other | (63 | ) | (329 | ) | — | ||||||
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
Income tax benefit | $ | — | $ | — | $ | (16,245 | ) | ||||
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
Schedule of Significant components of the entity's deferred tax assets (liabilities) | ' | ||||||||||
The significant components of the Company's deferred tax assets (liabilities) were as follow, in thousands: | |||||||||||
As of December 31, | |||||||||||
2013 | 2012 | ||||||||||
Deferred tax assets: | |||||||||||
Net operating loss carryforward | $ | 58,047 | $ | 32,714 | |||||||
Deferred rent credit | 615 | 477 | |||||||||
Accrued compensation and non-qualified stock options | 1,986 | 59 | |||||||||
Deferred financing costs | 319 | — | |||||||||
Depreciation and amortization | 337 | 282 | |||||||||
Research and development credits | 4,167 | 3,901 | |||||||||
Capitalized overhead into inventory (UNICAP §263A) | 282 | — | |||||||||
Other | 151 | 789 | |||||||||
Valuation allowance | (59,823 | ) | (38,222 | ) | |||||||
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ||||
Net deferred tax asset | 6,081 | — | |||||||||
Deferred tax liability: | |||||||||||
Debt discount on convertible notes | (6,081 | ) | — | ||||||||
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ||||
Net deferred taxes | $ | 0 | $ | 0 | |||||||
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ||||
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ||||
Schedule of reconciliation of the beginning and ending amount of gross unrecognized tax benefits | ' | ||||||||||
A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows, in thousands: | |||||||||||
Year Ended | |||||||||||
December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Balance as of January 1 | $ | 688 | $ | 752 | $ | 642 | |||||
Gross increases related to prior-year tax positions | 23 | — | — | ||||||||
Gross increases (decrease) related to current-year tax positions | 9,117 | (64 | ) | 110 | |||||||
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
Balance as of December 31 | $ | 9,828 | $ | 688 | $ | 752 | |||||
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Commitments and Contingencies | ' | ||||
Schedule of future minimum lease payments under non-cancelable operating leases | ' | ||||
Future minimum lease payments under non-cancelable operating leases as of December 31, 2013 are as follows, in thousands: | |||||
Year ending December 31: | |||||
2014 | $ | 1,118 | |||
2015 | 1,140 | ||||
2016 | 1,163 | ||||
2017 | 1,186 | ||||
Thereafter | 402 | ||||
​ | ​ | ​ | ​ | ​ | |
$ | 5,009 | ||||
​ | ​ | ​ | ​ | ​ | |
​ | ​ | ​ | ​ | ​ | |
Quarterly_Financial_Informatio1
Quarterly Financial Information (unaudited) (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Quarterly Financial Information (unaudited) | ' | |||||||||||||
Schedule of quarterly financial information | ' | |||||||||||||
Quarterly financial information for fiscal 2013 and 2012 are presented in the following table, in thousands, except per share data, unaudited: | ||||||||||||||
1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter | |||||||||||
2013 | ||||||||||||||
Revenue | $ | 147 | $ | 281 | $ | 1,257 | $ | 10,334 | ||||||
Total costs and expenses | 18,055 | 15,760 | 18,432 | 21,691 | ||||||||||
Operating loss | (17,908 | ) | (15,479 | ) | (17,175 | ) | (11,357 | ) | ||||||
Net loss | (18,414 | ) | (27,357 | ) | (24,096 | ) | (22,406 | ) | ||||||
Net loss per share, basic and diluted | (0.60 | ) | (0.89 | ) | (0.78 | ) | (0.65 | ) | ||||||
2012 | ||||||||||||||
Revenue | $ | 208 | $ | 91 | $ | 91 | $ | 1,090 | ||||||
Total costs and expenses | 8,086 | 9,348 | 12,381 | 13,834 | ||||||||||
Operating loss | (9,277 | ) | (10,013 | ) | (13,482 | ) | (13,512 | ) | ||||||
Net loss | (9,277 | ) | (10,013 | ) | (13,482 | ) | (13,512 | ) | ||||||
Net loss per share, basic and diluted | (6.05 | ) | (0.61 | ) | (0.55 | ) | (0.51 | ) |
Organization_and_Nature_of_Ope1
Organization and Nature of Operations (Details) | 12 Months Ended |
Dec. 31, 2013 | |
item | |
Organization and Nature of Operations | ' |
Number of proprietary products in clinical development | 2 |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
item | ||
Basis of Presentation | ' | ' |
Number of business segments | 1 | ' |
Supernus Executive Retirement Plan (SERP) | ' | ' |
Marketable Securities - Restricted | ' | ' |
Number of executives for whom SERP was established | 2 | ' |
Marketable securities - restricted | $305,000 | $279,000 |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies (Details 2) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 |
Revenue | Revenue | Revenue | Accounts receivable | |||
Customer concentration risk | Customer concentration risk | Customer concentration risk | Customer concentration risk | |||
Customer A | Customer B | Customer C | item | |||
Accounts Receivable, net | ' | ' | ' | ' | ' | ' |
Allowance for uncollectible receivables | $0 | $0 | ' | ' | ' | ' |
Allowance for expected prompt-pay discounts | $100,000 | $0 | ' | ' | ' | ' |
Concentration risk percentage | ' | ' | ' | ' | ' | ' |
Concentration risk percentage | ' | ' | 34.00% | 34.00% | 26.00% | 96.40% |
Number of customers | ' | ' | ' | ' | ' | 3 |
Summary_of_Significant_Account5
Summary of Significant Accounting Policies (Details 3) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Inventory | ' | ' |
Inventory reserve | $0 | $0 |
Intangible Assets | ' | ' |
Estimated useful lives of the patents | '10 years | '10 years |
Impairment of Long-Lived Assets | ' | ' |
Impairment of long-lived assets | $0 | $0 |
Computer equipment | ' | ' |
Property and equipment | ' | ' |
Average useful lives | '3 years | ' |
Software | ' | ' |
Property and equipment | ' | ' |
Average useful lives | '3 years | ' |
Lab equipment and furniture | Minimum | ' | ' |
Property and equipment | ' | ' |
Average useful lives | '5 years | ' |
Lab equipment and furniture | Maximum | ' | ' |
Property and equipment | ' | ' |
Average useful lives | '10 years | ' |
Summary_of_Significant_Account6
Summary of Significant Accounting Policies (Details 4) (USD $) | 12 Months Ended | |||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | 3-May-13 |
7.50% Convertible Senior Secured Notes due 2019 | 7.50% Convertible Senior Secured Notes due 2019 | |||
Notes payable | ' | ' | ' | ' |
Fixed interest rate (as a percent) | 7.50% | ' | 7.50% | 7.50% |
Revenue Recognition on Product Sales | ' | ' | ' | ' |
Period for availability of requisite data for revenue recognition | '56 days | ' | ' | ' |
Sales return period | '12 months | ' | ' | ' |
Milestone revenues recorded | $0 | $1.10 | ' | ' |
Advertising Expense | ' | ' | ' | ' |
Advertising costs | $14.60 | $5.80 | ' | ' |
Summary_of_Significant_Account7
Summary of Significant Accounting Policies (Details 5) (USD $) | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2011 | Jan. 26, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Oct. 05, 2012 | Jan. 26, 2011 | 1-May-12 | Dec. 30, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Oct. 05, 2012 | Dec. 30, 2011 | 1-May-12 | |
Term loans | Initial term loan facility | Initial term loan facility | Initial term loan facility | Initial term loan facility | Initial term loan facility | Initial term loan facility | Additional term loan after amendment | Additional term loan after amendment | Additional term loan after amendment | Additional term loan after amendment | Additional term loan after amendment | Additional term loan after amendment | ||||
Warrants | Warrants | Warrants | Warrants to purchase Series A Preferred Stock | Warrants to purchase common stock | Warrants | Warrants | Warrants | Warrants to purchase Series A Preferred Stock | Warrants to purchase common stock | |||||||
Warrant liability | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum borrowing capacity | ' | ' | ' | $30,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Draw down under secured credit facility | ' | ' | 30,000,000 | ' | 15,000,000 | ' | ' | ' | ' | ' | 15,000,000 | ' | ' | ' | ' | ' |
Number of shares that can be purchased from warrants | ' | ' | ' | ' | ' | ' | ' | ' | 375,000 | 93,750 | ' | ' | ' | ' | 200,000 | 49,999 |
Exercise price (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | $1 | $4 | ' | ' | ' | ' | $1.50 | $5 |
Number of warrants exercised | ' | ' | ' | ' | ' | ' | ' | 75,000 | ' | ' | ' | ' | ' | 26,667 | ' | ' |
Number of shares issued on exercise of warrants | ' | ' | ' | ' | ' | ' | ' | 49,137 | ' | ' | ' | ' | ' | 15,172 | ' | ' |
Warrant liability at fair value | 12,644,000 | 251,000 | ' | ' | ' | 119,000 | 114,000 | ' | ' | ' | ' | 153,000 | 138,000 | ' | ' | ' |
Changes in fair value of warrants included in earnings | ($13,354,000) | ($710,000) | ($85,000) | ' | ' | $5,000 | $506,000 | ' | ' | ' | ' | $15,000 | $204,000 | ' | ' | ' |
Fair_Value_of_Financial_Instru2
Fair Value of Financial Instruments (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Assets: | ' | ' |
Marketable securities | $49,211,000 | $48,206,000 |
Long term investments | 8,756,000 | ' |
Liabilities: | ' | ' |
Derivative liabilities | 12,644,000 | 251,000 |
Quoted Prices in Active Markets (Level 1) | ' | ' |
Assets: | ' | ' |
Cash and cash equivalents | 32,980,000 | 31,561,000 |
Total assets at fair value | 32,980,000 | 31,561,000 |
Significant Other Observable Inputs (Level 2) | ' | ' |
Assets: | ' | ' |
Cash and cash equivalents | ' | 8,741,000 |
Marketable securities | 49,211,000 | 48,206,000 |
Long term investments | 8,756,000 | ' |
Marketable securities - restricted (SERP) | 305,000 | 279,000 |
Total assets at fair value | 58,272,000 | 57,226,000 |
Significant Unobservable Inputs (Level 3) | ' | ' |
Liabilities: | ' | ' |
Derivative liabilities | 12,644,000 | 251,000 |
Total Carrying Value | ' | ' |
Assets: | ' | ' |
Cash and cash equivalents | 32,980,000 | 40,302,000 |
Marketable securities | 49,211,000 | 48,206,000 |
Long term investments | 8,756,000 | ' |
Marketable securities - restricted (SERP) | 305,000 | 279,000 |
Total assets at fair value | 91,252,000 | 88,787,000 |
Liabilities: | ' | ' |
Derivative liabilities | $12,644,000 | $251,000 |
Fair_Value_of_Financial_Instru3
Fair Value of Financial Instruments (Details 2) (USD $) | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | 3-May-13 |
Common stock warrant | Common stock warrant | Common stock warrant | Interest make-whole liability | 7.50% Convertible Senior Secured Notes due 2019 | 7.50% Convertible Senior Secured Notes due 2019 | ||
Minimum | Maximum | ||||||
Assumptions used to calculate fair value of common stock warrant liability using Monte-Carlo simulation on a Black-Scholes lattice model | ' | ' | ' | ' | ' | ' | ' |
Interest rate (as a percent) | 7.50% | ' | ' | ' | ' | 7.50% | 7.50% |
Exercise Price (in dollars per share) | ' | ' | $4 | $5 | ' | ' | ' |
Volatility (as a percent) | ' | 70.00% | ' | ' | 45.00% | ' | ' |
Stock Price (in dollars per share) | ' | $7.54 | ' | ' | $7.54 | ' | ' |
Credit Spread (as a percent) | ' | ' | ' | ' | 12.00% | ' | ' |
Term | ' | ' | '7 years 1 month 6 days | '8 years | '3 years 3 months 18 days | ' | ' |
Dividend Yield (as a percent) | ' | 0.00% | ' | ' | 0.00% | ' | ' |
Risk-Free Rate (as a percent) | ' | ' | 2.55% | 2.75% | ' | ' | ' |
Fair_Value_of_Financial_Instru4
Fair Value of Financial Instruments (Details 3) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Warrant Liability | ' | ' | ' |
Initial value of interest make-whole payment associated with the convertible notes | ($13,354,000) | ($710,000) | ($85,000) |
Reduction due to conversion of debt to equity | -42,417,000 | ' | ' |
Carrying value of the convertible notes | 34,393,000 | ' | ' |
Estimated fair value of the convertible notes | 79,800,000 | ' | ' |
Common stock warrant | ' | ' | ' |
Warrant Liability | ' | ' | ' |
Balance at the beginning of the period | 251,000 | 697,000 | ' |
Exercise of warrants | ' | -1,156,000 | ' |
Initial value of interest make-whole payment associated with the convertible notes | 9,270,000 | ' | ' |
Changes in fair value of derivative liabilities and warrants included in earnings | 13,354,000 | 710,000 | ' |
Reduction due to conversion of debt to equity | -10,231,000 | ' | ' |
Balance at the end of the period | $12,644,000 | $251,000 | ' |
Fair_Value_of_Financial_Instru5
Fair Value of Financial Instruments (Details 4) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Fair Value of Financial Instruments | ' | ' |
Corporate debt securities, Amortized Cost | $57,967 | $48,259 |
Corporate debt securities, Gross Unrealized Gains | 33 | 1 |
Corporate debt securities, Gross Unrealized Losses | -33 | -54 |
Corporate debt securities, Fair Value | 57,967 | 48,206 |
Contractual maturities of the unrestricted marketable securities held | ' | ' |
Less Than 1 Year | 49,211 | ' |
1-5 years | 8,756 | ' |
Corporate debt securities, Fair Value | $57,967 | $48,206 |
Inventories_Details
Inventories (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Inventories | ' | ' |
Raw materials | $3,897 | $1,152 |
Work in process | 1,347 | ' |
Finished goods | 1,908 | ' |
Total inventories | $7,152 | $1,152 |
Property_and_Equipment_Details
Property and Equipment (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Property and equipment | ' | ' | ' |
Property and equipment, gross | $8,145,000 | $6,499,000 | ' |
Less accumulated depreciation and amortization | -5,591,000 | -5,078,000 | ' |
Property and equipment, net | 2,554,000 | 1,421,000 | ' |
Depreciation expense | 512,000 | 642,000 | 650,000 |
Computer equipment | ' | ' | ' |
Property and equipment | ' | ' | ' |
Property and equipment, gross | 798,000 | 615,000 | ' |
Software | ' | ' | ' |
Property and equipment | ' | ' | ' |
Property and equipment, gross | 209,000 | 209,000 | ' |
Lab equipment and furniture | ' | ' | ' |
Property and equipment | ' | ' | ' |
Property and equipment, gross | 4,809,000 | 3,896,000 | ' |
Leasehold improvements | ' | ' | ' |
Property and equipment | ' | ' | ' |
Property and equipment, gross | $2,329,000 | $1,779,000 | ' |
Intangible_Assets_Details
Intangible Assets (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
item | ||
Purchased patents | ' | ' |
Weighted-Average Life | '10 years | '10 years |
Gross Carrying Amount | $2,292,000 | $2,292,000 |
Accumulated Amortization | 1,838,000 | 1,609,000 |
Patent defense costs | ' | ' |
Gross Carrying Amount | 704,000 | ' |
Number of U.S. patents issued | 3 | ' |
Additional disclosures | ' | ' |
Amortization expense | 229,000 | ' |
Estimated annual aggregate amortization expense through December 31, 2015 | 229,000 | ' |
Net book value of intangible assets | $1,158,000 | $683,000 |
Accrued_Liabilities_Details
Accrued Liabilities (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Accrued Liabilities | ' | ' |
Accrued clinical trial and clinical supply costs | $2,253 | $3,335 |
Accrued compensation | 5,016 | 2,492 |
Accrued rebates and allowances | 1,132 | ' |
Accrued product costs | 3,274 | ' |
Accrued sales and marketing expenses | 1,077 | 1,315 |
Accrued interest | 619 | 213 |
Other accrued liabilities | 1,801 | 505 |
Total | $15,172 | $7,860 |
Convertible_Senior_Secured_Not2
Convertible Senior Secured Notes (Details) (USD $) | 12 Months Ended | 12 Months Ended | 0 Months Ended | 2 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | 0 Months Ended | 1 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2013 | Dec. 31, 2011 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | 3-May-13 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | 3-May-13 | 31-May-13 | Dec. 31, 2013 | |
Occurrence of fundamental change | Occurrence of fundamental change | Occurrence of fundamental change | Occurrence of make-whole fundamental change | Company redeems Notes on or after May 1, 2017 | 7.50% Convertible Senior Secured Notes due 2019 | 7.50% Convertible Senior Secured Notes due 2019 | 7.50% Convertible Senior Secured Notes due 2019 | 7.50% Convertible Senior Secured Notes due 2019 | 7.50% Convertible Senior Secured Notes due 2019 | 7.50% Convertible Senior Secured Notes due 2019 | 7.50% Convertible Senior Secured Notes due 2019 | 7.50% Convertible Senior Secured Notes due 2019 | Term loans under secured credit facility | Term loans under secured credit facility | Term loans under secured credit facility | ||||
Minimum | Maximum | item | Company has not received stockholder approval | Company obtains stockholder approval prior to day before November 1, 2018 | Company calls Notes for redemption prior to day before redemption date and Note holder converts on or after November 1, 2018 | On or after November 1, 2013, Company makes interest make-whole payments | On or after November 1, 2013, Company makes interest make-whole payments | ||||||||||||
item | item | Maximum | |||||||||||||||||
Notes payable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Gross proceeds | ' | $30,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | $90,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Fixed interest rate (as a percent) | 7.50% | ' | ' | ' | ' | ' | ' | ' | 7.50% | 7.50% | 7.50% | ' | ' | ' | ' | ' | ' | ' | ' |
Amount of underwriters' fee | ' | ' | ' | ' | ' | ' | ' | ' | 3,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Offering expenses | ' | ' | ' | ' | ' | ' | ' | ' | 3,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net proceeds from issuance of debt | 90,000,000 | ' | ' | ' | ' | ' | ' | ' | 86,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Repayment of debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 19,600,000 | 19,600,000 | ' |
Minimum percentage of debt holder's consent require to transfer property collateral for notes | ' | ' | ' | ' | ' | ' | ' | ' | 66.67% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Principal amount used for debt instrument conversion ratio | ' | ' | ' | 1,000 | ' | ' | ' | ' | ' | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | ' | ' | ' | ' |
Threshold trading days (whether or not consecutive) | ' | ' | ' | ' | ' | ' | ' | 20 | ' | ' | ' | ' | 20 | ' | 20 | ' | ' | ' | ' |
Consecutive trading day period | ' | ' | ' | ' | ' | ' | ' | '30 days | ' | ' | ' | ' | '30 days | ' | '30 days | ' | ' | ' | ' |
Number of trading days prior to a conversion date within which threshold trading days should complete | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5 | ' | 5 | ' | ' | ' | ' |
Threshold trading days period prior to a conversion date during which principal amount of notes for such trading day was less than 98% of the product of the last reported sale price of common stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5 | ' | ' | ' | ' | ' | ' |
Consecutive trading day period prior to a conversion date during which principal amount of notes for such trading day was less than 98% of the product of the last reported sale price of common stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '5 days | ' | ' | ' | ' | ' | ' |
Maximum ratio of trading price for each day in measurement period to last reported sales price of Company's stock on each day of measurement period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 98.00% | ' | ' | ' | ' | ' | ' |
Conversion rate for the Notes (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 188.7059 | ' | ' | ' | ' | 221.7294 | ' | ' | ' |
Conversion price, per share of Common Stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | $5.30 | $5.30 | ' | ' | ' | ' | ' | ' | ' | ' |
Discount rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2.00% | ' | ' | ' | ' |
Stock value as percentage of simple average of the daily volume-weighted average price if the company elects to pay an interest make-whole payment in common stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 95.00% | ' | ' | ' | ' |
Number of trading days ending on and including the trading day immediately preceding the conversion date use to determine daily volume weighted average price | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10 | ' | ' | ' | ' |
Required notice period for notification of fundamental change | ' | ' | ' | '1 day | ' | ' | '50 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Period from notice date within which note holders can exercise their right to exchange the notes | ' | ' | ' | ' | '20 days | '35 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Redemption price (as a percent) | ' | ' | ' | 100.00% | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Threshold percentage of common stock price to determine eligibility of conversion | ' | ' | ' | ' | ' | ' | ' | 140.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Details of Notes reflected in balance sheet | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Gross proceeds | ' | 30,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | 90,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Initial value of interest make-whole derivative reported as debt discount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -9,270,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Conversion option reported as debt discount and APIC | ' | ' | ' | ' | ' | ' | ' | ' | 900,000 | ' | -22,336,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Conversion of debt to equity - principal | ' | ' | ' | ' | ' | ' | ' | ' | ' | 40,500,000 | -40,492,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Conversion of debt to equity - debt discount | ' | ' | ' | ' | ' | ' | ' | ' | ' | 13,833,000 | 13,833,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Amortization of debt discount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,658,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Carrying value | 34,393,000 | ' | ' | ' | ' | ' | ' | ' | ' | 34,393,000 | 34,393,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Unamortized debt issuance costs | ' | ' | ' | ' | ' | ' | ' | ' | 2,600,000 | 1,200,000 | 1,200,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred financing costs, current | 229,000 | ' | 144,000 | ' | ' | ' | ' | ' | ' | 200,000 | 200,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred financing costs, long-term | 1,005,000 | ' | 89,000 | ' | ' | ' | ' | ' | ' | 1,000,000 | 1,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Shares of common stock issued in conversion of Notes | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7,641,060 | 7,600,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Shares of common stock issued in settlement of the interest make-whole provision | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,337,193 | 1,300,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Cash paid in settlement of the interest make-whole provision | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,700,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Loss on extinguishment of debt | $9,550,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | $8,400,000 | ' | ' | ' | ' | ' | ' | ' | $1,200,000 |
Convertible_Senior_Secured_Not3
Convertible Senior Secured Notes (Details 2) (USD $) | 12 Months Ended | 0 Months Ended | 1 Months Ended | 12 Months Ended | 0 Months Ended | |||
Dec. 31, 2013 | Dec. 31, 2011 | 3-May-13 | 31-May-13 | Dec. 31, 2013 | Dec. 31, 2011 | Jan. 26, 2011 | Dec. 30, 2011 | |
Term loans under secured credit facility | Term loans under secured credit facility | Term loans under secured credit facility | Term loans under secured credit facility | Initial term loan facility | Additional term loan after amendment | |||
Notes payable | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate amount | ' | ' | ' | ' | ' | $30,000,000 | ' | ' |
Drawdown under the secured credit facility | ' | 30,000,000 | ' | ' | ' | ' | 15,000,000 | 15,000,000 |
Repayment of debt | ' | ' | 19,600,000 | 19,600,000 | ' | ' | ' | ' |
Loss on extinguishment of debt | $9,550,000 | ' | ' | ' | $1,200,000 | ' | ' | ' |
Sale_of_TCD_Royalty_Sub_Report1
Sale of TCD Royalty Sub Reported as Discontinued Operations (Details) (USD $) | 0 Months Ended |
Dec. 14, 2011 | |
Sale of TCD Royalty Sub reported as discontinued operations | ' |
Equity interest sold (as a percent) | 100.00% |
TCD | ' |
Sale of TCD Royalty Sub reported as discontinued operations | ' |
Equity interest sold (as a percent) | 100.00% |
Cash payment to be received as consideration from sale of equity interest in TCD | 27,000,000 |
Contingent consideration to be received in future from sale of equity interest in TCD | 3,000,000 |
Number of days from occurrence of certain conditions to pay milestone payment | '10 days |
Minimum royalty payment to be received by purchaser for milestone payment | 35,100,000 |
Minimum proceeds to be received by purchaser for milestone payment | 27,000,000 |
Minimum number of bidder involved in competitive bidding process to determine the purchase price | 1 |
Quarterly servicing fee to be received for performance of services related to the collection of amounts due in connection with license agreements | 10,000 |
Annual servicing fee to be received for performance of services related to the collection of amounts due in connection with license agreements | 40,000 |
Stockholders_Equity_Details
Stockholders' Equity (Details) (USD $) | 12 Months Ended | 2 Months Ended | 12 Months Ended | 0 Months Ended | 1 Months Ended | |||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | 31-May-12 | Dec. 05, 2012 | 1-May-12 | Jan. 31, 2013 | Dec. 31, 2013 | 31-May-12 | |
7.50% Convertible Senior Secured Notes due 2019 | 7.50% Convertible Senior Secured Notes due 2019 | Series A Preferred Stock | Series A Preferred Stock | Common Stock | Common Stock | Common Stock | Common Stock | Common Stock | ||||
item | ||||||||||||
Stockholders' equity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of outstanding shares of Series A preferred Stock that are automatically converted to shares of common stock | ' | ' | ' | ' | ' | ' | 49,000,000 | ' | ' | ' | ' | ' |
Number of shares of common stock into which Series A preferred stock automatically got converted | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 12,249,998 |
Rate at which dividends accrued (in dollars per share) | ' | ' | ' | ' | ' | $0.07 | ' | ' | ' | ' | ' | ' |
Amount of dividends paid prior to the conversion of the preferred stock into common stock in connection with the IPO | ' | ' | ' | ' | ' | $0 | ' | ' | ' | ' | ' | ' |
Number of votes to which holders of common shares are entitled for each share held | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1 | ' |
Number of shares sold | ' | ' | ' | ' | ' | ' | ' | 6,000,000 | 10,000,000 | ' | ' | ' |
Selling price (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | $8 | $5 | $8 | ' | ' |
Expenses incurred in connection with offering | 869,000 | ' | ' | ' | ' | ' | ' | 3,300,000 | 4,700,000 | ' | ' | ' |
Shares of common stock sold upon exercise of full amount of over-allotment option by the underwriters | ' | ' | ' | ' | ' | ' | ' | ' | 449,250 | 239,432 | ' | ' |
Gross proceeds from issuance of common stock | ' | ' | ' | ' | ' | ' | ' | ' | 52,300,000 | ' | ' | ' |
Net cash proceeds from sale of common stock | ' | ' | ' | ' | ' | ' | ' | ' | 47,600,000 | ' | ' | ' |
Gross cash proceeds from sale of common stock in a follow-on offering | 2,437,000 | 100,735,000 | 29,000 | ' | ' | ' | ' | 49,900,000 | ' | ' | ' | ' |
Net cash proceeds from sale of common stock in a follow-on offering | ' | ' | ' | ' | ' | ' | ' | 46,600,000 | ' | ' | ' | ' |
Shares of common stock issued in conversion of Notes | ' | ' | ' | 7,641,060 | 7,600,000 | ' | ' | ' | ' | ' | ' | ' |
Principal amount of the Notes converted | ' | ' | ' | $40,500,000 | ($40,492,000) | ' | ' | ' | ' | ' | ' | ' |
Shares of common stock issued in settlement of the interest make-whole provision | ' | ' | ' | 1,337,193 | 1,300,000 | ' | ' | ' | ' | ' | ' | ' |
ShareBased_Payments_Details
Share-Based Payments (Details) (2012 Plan) | 12 Months Ended |
Dec. 31, 2013 | |
item | |
Share-based payments | ' |
Maximum number of shares of common stock provided for issuance | 2,500,000 |
Stock option | ' |
Share-based payments | ' |
Number of annual installments in which the awards would generally vest starting on the first anniversary of the date of grant | 4 |
Contractual term | '10 years |
ShareBased_Payments_Details_2
Share-Based Payments (Details 2) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Share-based Payments | ' | ' | ' |
Share-based compensation recognized | $1,708 | $339 | ($82) |
Research and development | ' | ' | ' |
Share-based Payments | ' | ' | ' |
Share-based compensation recognized | 417 | 208 | 63 |
Selling, general and administrative | ' | ' | ' |
Share-based Payments | ' | ' | ' |
Share-based compensation recognized | $1,291 | $131 | ($145) |
ShareBased_Payments_Details_3
Share-Based Payments (Details 3) (Stock option, USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Assumptions used in estimating the fair value of each option award using the Black-Scholes option-pricing model | ' | ' | ' |
Expected volatility, minimum (as a percent) | 69.50% | 68.30% | 59.10% |
Expected volatility, maximum (as a percent) | 70.90% | 71.60% | 74.70% |
Dividend Yield (as a percent) | 0.00% | 0.00% | 0.00% |
Expected term | ' | '6 years 3 months | ' |
Risk-free rate, minimum (as a percent) | 1.20% | 0.89% | 0.15% |
Risk-free rate, maximum (as a percent) | 2.94% | 1.14% | 2.93% |
Expected forfeiture rate (as a percent) | 5.00% | ' | ' |
Number of Options | ' | ' | ' |
Outstanding at the beginning of the period (in shares) | 569,911 | 598,109 | ' |
Granted (in shares) | 974,582 | 188,136 | ' |
Exercised (in shares) | -62,513 | -159,264 | ' |
Forfeited or expired (in shares) | -18,937 | -57,070 | ' |
Outstanding at the end of the period (in shares) | 1,463,043 | 569,911 | 598,109 |
Vested and expected to vest (in shares) | 1,425,752 | ' | ' |
Exercisable (in shares) | 256,227 | ' | ' |
Weighted-Average Exercise Price | ' | ' | ' |
Outstanding at the beginning of the period (in dollars per share) | $5.72 | $2.75 | ' |
Granted (in dollars per share) | $7.79 | $10.73 | ' |
Exercised (in dollars per share) | $1.25 | $1.67 | ' |
Forfeited or expired (in dollars per share) | $6.47 | $2.45 | ' |
Outstanding at the end of the period (in dollars per share) | $7.27 | $5.72 | $2.75 |
Vested and expected to vest (in dollars per share) | $7.26 | ' | ' |
Exercisable (in dollars per share) | $4.47 | ' | ' |
Weighted-Average Remaining Contractual Term | ' | ' | ' |
Outstanding at the end of the period | '8 years 6 months 4 days | '7 years 10 months 17 days | '7 years 8 months 16 days |
Vested and expected to vest | '8 years 6 months | ' | ' |
Exercisable | '6 years 5 months 8 days | ' | ' |
Share-based payments, additional disclosure | ' | ' | ' |
Aggregate intrinsic value of options outstanding | $1,400,000 | $1,600,000 | $1,900,000 |
Aggregate intrinsic value of options vested and expected to vest | 1,400,000 | 1,500,000 | 1,800,000 |
Aggregate intrinsic value of options exercisable | 1,000,000 | 1,000,000 | 1,200,000 |
Weighted-average, grant-date fair value of options granted (in dollars per share) | $4.98 | $6.85 | $3.64 |
Total fair value of the common stock vested | 512,000 | 218,000 | 113,000 |
Total intrinsic value of options exercised | 377,000 | 748,000 | 262,000 |
Total unrecognized compensation expense, net of related forfeiture estimates | $4,611,000 | $1,651,000 | ' |
Weighted-average period over which total unrecognized compensation expense is expected to be recognized | '2 years 11 months 8 days | '3 years 22 days | ' |
Minimum | ' | ' | ' |
Assumptions used in estimating the fair value of each option award using the Black-Scholes option-pricing model | ' | ' | ' |
Fair value of common stock (in dollars per share) | $5.40 | $5.07 | $2.56 |
Expected term | '6 years 3 months | ' | '4 months 28 days |
Expected forfeiture rate (as a percent) | ' | 0.00% | 0.00% |
Maximum | ' | ' | ' |
Assumptions used in estimating the fair value of each option award using the Black-Scholes option-pricing model | ' | ' | ' |
Fair value of common stock (in dollars per share) | $7.90 | $12.92 | $3.36 |
Expected term | '9 years 7 months 6 days | ' | '6 years 3 months |
Expected forfeiture rate (as a percent) | ' | 5.00% | 5.00% |
Loss_per_Share_Details
Loss per Share (Details) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Shares Underlying Convertible Senior Secured Notes | ' | ' | ' |
Loss Per Share | ' | ' | ' |
Common stock equivalents excluded in the calculation of diluted loss per share | 6,219,782 | ' | ' |
Series A Preferred Stock | ' | ' | ' |
Loss Per Share | ' | ' | ' |
Common stock equivalents excluded in the calculation of diluted loss per share | ' | 4,049,863 | 12,249,998 |
Warrants to purchase Series A Preferred Stock/Common Stock | ' | ' | ' |
Loss Per Share | ' | ' | ' |
Common stock equivalents excluded in the calculation of diluted loss per share | 13,388 | 21,090 | 143,749 |
Stock Options, Stock Appreciation Rights, and Non-vested Stock Options | ' | ' | ' |
Loss Per Share | ' | ' | ' |
Common stock equivalents excluded in the calculation of diluted loss per share | 151,737 | 256,939 | 598,109 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Current | ' | ' | ' |
Federal | ' | ' | $14,090,000 |
State | ' | ' | 2,155,000 |
Total | 0 | 0 | 16,245,000 |
Reconciliation of the expected income tax benefit computed using the federal statutory income tax rate to the Company's effective income tax rate | ' | ' | ' |
Income tax (benefit) computed at federal statutory tax rate | -32,286,000 | -16,270,000 | -13,419,000 |
Permanent items | 340,000 | 396,000 | 57,000 |
State taxes | -4,772,000 | -2,487,000 | -2,155,000 |
Change in valuation allowance | 31,526,000 | 18,754,000 | ' |
Uncertain tax position | 5,411,000 | -64,000 | 129,000 |
Research and development credits | -156,000 | ' | -857,000 |
Other | -63,000 | -329,000 | ' |
Tax benefit | 0 | 0 | -16,245,000 |
Pre-tax income from discontinued operations | ' | ' | 93,300,000 |
Income tax expense from discontinued operations | ' | ' | 36,800,000 |
NOL carryforwards | 144,300,000 | ' | ' |
NOL carryforwards after tax effect | 58,000,000 | ' | ' |
Research and development credit carryforwards | 4,200,000 | ' | ' |
Income taxes paid | 0 | 0 | 0 |
Deferred tax assets: | ' | ' | ' |
Net operating loss carryforward | 58,047,000 | 32,714,000 | ' |
Deferred rent credit | 615,000 | 477,000 | ' |
Accrued compensation and non-qualified stock options | 1,986,000 | 59,000 | ' |
Deferred financing costs | 319,000 | ' | ' |
Depreciation and amortization | 337,000 | 282,000 | ' |
Research and development credits | 4,167,000 | 3,901,000 | ' |
Capitalized overhead into inventory (UNICAP 263A) | 282,000 | ' | ' |
Other | 151,000 | 789,000 | ' |
Valuation allowance | -59,823,000 | -38,222,000 | ' |
Net deferred tax asset | 6,081,000 | 0 | ' |
Deferred tax liability: | ' | ' | ' |
Debt discount on convertible notes | -6,081,000 | ' | ' |
Net deferred taxes | 0 | 0 | ' |
Net change in total valuation allowance due to the tax attributes utilized by discontinued operations | 21,600,000 | ' | ' |
Reconciliation of the beginning and ending amount of gross unrecognized tax benefits | ' | ' | ' |
Balance at the beginning of the period | 688,000 | 752,000 | 642,000 |
Gross increases related to prior-year tax positions | 23,000 | ' | ' |
Gross increases (decrease) related to current-year tax positions | 9,117,000 | -64,000 | 110,000 |
Balance at the end of the period | $9,828,000 | $688,000 | $752,000 |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Commitments and Contingencies | ' | ' | ' |
Additional period for which the entity may elect to extend the term of the lease | '5 years | ' | ' |
Additional tenant improvement allowance | $1,800,000 | ' | ' |
Tenant improvement allowance utilized and included in fixed assets and deferred rent | 500,000 | 300,000 | 500,000 |
Rent expense | 1,020,000 | 906,000 | 906,000 |
Future minimum lease payments under non-cancelable operating leases | ' | ' | ' |
2014 | 1,118,000 | ' | ' |
2015 | 1,140,000 | ' | ' |
2016 | 1,163,000 | ' | ' |
2017 | 1,186,000 | ' | ' |
Thereafter | 402,000 | ' | ' |
Total | $5,009,000 | ' | ' |
Employee_Benefit_Plan_Details
Employee Benefit Plan (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Employee Benefit Plan | ' | ' | ' |
Minimum age requirement for employees to participate in the plan | '21 years | ' | ' |
Maximum contribution by employee (as a percent) | 90.00% | ' | ' |
Vesting percentage of contributions by employee to the 401(k) Plan | 100.00% | ' | ' |
Employer match of employee contributions on the first level of salary deferral (as a percent) | 100.00% | ' | ' |
Percentage of eligible compensation, first level, matched by employer | 3.00% | ' | ' |
Employer match of employee contributions on the second level of salary deferral (as a percent) | 50.00% | ' | ' |
Percentage of eligible compensation, second level, partially matched by employer | 2.00% | ' | ' |
Maximum percentage of participating employee annual compensation that the company may elect to make a discretionary contribute towards | 60.00% | ' | ' |
Company's contribution to the 401(k) Plan | $645,000 | $323,000 | $267,000 |
RelatedParty_Transactions_Deta
Related-Party Transactions (Details) (USD $) | 0 Months Ended | 1 Months Ended | |
In Millions, unless otherwise specified | Dec. 14, 2011 | Dec. 14, 2011 | Dec. 31, 2011 |
TCD | ROS | ||
TCD | |||
Related party transaction | ' | ' | ' |
Equity interest sold (as a percent) | 100.00% | 100.00% | 100.00% |
Cash payment to be received as consideration from sale of equity interest in TCD | ' | $27 | $27 |
Contingent consideration to be received in future from sale of equity interest in TCD | ' | $3 | $3 |
Collaboration_Agreements_Detai
Collaboration Agreements (Details) (USD $) | 12 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2013 |
Stendhal License | ' |
Collaboration agreement | ' |
Amount received to be recognized as revenue on a straight-line basis | $1.50 |
Future milestone payment to be received, based on certain milestones defined in the license agreement | 2.3 |
Deferred revenue | 0.1 |
Collaboration agreements | United Therapeutics | ' |
Collaboration agreement | ' |
Pre-commercial milestone payments received | 1.5 |
Milestone payments to be received upon launch of Orenitram (treprostinil) product | 2 |
Milestone payments to be received upon development of additional treprostinil diethanolamine products for a second indication | 4 |
Expiration period from the first commercial sale of each product on a country-by-country and product-by-product basis | '12 years 6 months |
Collaboration agreements | Stendhal License | ' |
Collaboration agreement | ' |
Amount received to be recognized as revenue on a straight-line basis | 1.8 |
Future milestone payment to be received, based on certain milestones defined in the license agreement | 1.8 |
Deferred revenue | $1.60 |
Collaboration agreement substantive obligation period | '12 years |
Quarterly_Financial_Informatio2
Quarterly Financial Information (unaudited) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Quarterly Financial Information (unaudited) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues | $10,334 | $1,257 | $281 | $147 | $1,090 | $91 | $91 | $208 | $11,552 | ' | ' |
Total costs and expenses | 21,691 | 18,432 | 15,760 | 18,055 | 13,834 | 12,381 | 9,348 | 8,086 | 73,939 | 43,649 | 38,555 |
Operating loss | -11,357 | -17,175 | -15,479 | -17,908 | -13,512 | -13,482 | -10,013 | -9,277 | -92,273 | -46,284 | -23,225 |
Net loss | ($22,406) | ($24,096) | ($27,357) | ($18,414) | ($13,512) | ($13,482) | ($10,013) | ($9,277) | ($92,273) | ($46,284) | $53,815 |
Net loss per share, basic and diluted (in dollars per share) | ($0.65) | ($0.78) | ($0.89) | ($0.60) | ($0.51) | ($0.55) | ($0.61) | ($6.05) | ($2.90) | ($2.72) | $31.39 |
Subsequent_Events_Details
Subsequent Events (Details) (7.50% Convertible Senior Secured Notes due 2019, USD $) | 2 Months Ended | 12 Months Ended | 3 Months Ended |
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2013 | Mar. 14, 2014 |
Subsequent events | |||
Subsequent events | ' | ' | ' |
Principal amount of the Notes converted | $40,500 | ($40,492) | $9,500 |
Shares of common stock issued in conversion of Notes and accrued interest thereon | 7,641,060 | 7,600,000 | 1,800,000 |
Shares of common stock issued in settlement of the interest make-whole provision | 1,337,193 | 1,300,000 | 300,000 |