Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Mar. 27, 2014 | Jun. 28, 2013 | |
Document and Entity Information | ' | ' | ' |
Entity Registrant Name | 'OSIRIS THERAPEUTICS, INC. | ' | ' |
Entity Central Index Key | '0001360886 | ' | ' |
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 | 'Accelerated Filer | ' | ' |
Entity Public Float | ' | ' | $332,203,550 |
Entity Common Stock, Shares Outstanding | ' | 34,221,412 | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
BALANCE_SHEETS
BALANCE SHEETS (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash | $2,416 | $1,854 |
Investments available for sale | 39,508 | 32,238 |
Trading securities | 17,086 | ' |
Trade accounts receivable, net of reserves | 7,459 | 2,854 |
Other receivables | 15,265 | 5 |
Inventory | 1,929 | 1,278 |
Prepaid expenses and other current assets | 355 | 603 |
Current assets of discontinued operations | 91 | 204 |
Total current assets | 84,109 | 39,036 |
Property and equipment, net | 1,896 | 2,111 |
Deferred tax asset | 5,849 | ' |
Restricted cash | 243 | 317 |
Total assets | 92,097 | 41,464 |
Current liabilities: | ' | ' |
Accounts payable and accrued expenses | 4,842 | 2,096 |
Capital lease obligations, current portion | 45 | 44 |
Deferred tax liability | 5,849 | ' |
Current liabilities of discontinued operations | 57 | 2,903 |
Total current liabilities | 10,793 | 5,043 |
Other long-term liabilities | 355 | 531 |
Total liabilities | 11,148 | 5,574 |
Commitments and contingencies | ' | ' |
Stockholders' equity | ' | ' |
Common stock, $.001 par value, 90,000 shares authorized, 34,115 shares outstanding - 2013, 32,881 shares outstanding - 2012 | 34 | 33 |
Additional paid-in-capital | 282,702 | 279,269 |
Accumulated other comprehensive (loss) income | -33 | -20 |
Accumulated deficit | -201,754 | -243,392 |
Total stockholders' equity | 80,949 | 35,890 |
Total liabilities and stockholders' equity | $92,097 | $41,464 |
BALANCE_SHEETS_Parenthetical
BALANCE SHEETS (Parenthetical) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, except Per Share data, unless otherwise specified | ||
BALANCE SHEETS | ' | ' |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized | 90,000 | 90,000 |
Common stock, shares outstanding | 34,115 | 32,881 |
STATEMENTS_OF_COMPREHENSIVE_LO
STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
STATEMENTS OF COMPREHENSIVE (LOSS) INCOME | ' | ' | ' |
Product revenues | $24,308 | $7,849 | $1,263 |
Cost of product revenues | 6,656 | 2,551 | 531 |
Gross profit | 17,652 | 5,298 | 732 |
Operating expenses: | ' | ' | ' |
Research and development | 4,952 | 5,501 | 4,340 |
Selling, general and administrative | 15,291 | 3,676 | 7,008 |
Fees paid to related parties | 62 | 36 | 87 |
Share based payments to related parties | 180 | 1,918 | 74 |
Total operating expenses | 20,485 | 11,131 | 11,509 |
Loss from operations | -2,833 | -5,833 | -10,777 |
Other income, net | 414 | 49 | 100 |
Loss from continuing operations, before income taxes | -2,419 | -5,784 | -10,677 |
Income tax benefit | 1,326 | 37 | 775 |
Income (loss) from continuing operations | -1,093 | -5,747 | -9,902 |
Discontinued operations: | ' | ' | ' |
Income (loss) from operations of discontinued operations, net of income taxes of $818 in 2011 | -6,668 | -5,318 | 24,794 |
Gain from sale of discontinued operations, net of income taxes of $1,705 in 2013 | 49,399 | ' | ' |
Income (loss) from discontinued operations | 42,731 | -5,318 | 24,794 |
Net income (loss) | 41,638 | -11,065 | 14,892 |
Other comprehensive income (loss) | ' | ' | ' |
Unrealized gain (loss) on investments available for sale | -13 | -40 | 23 |
Comprehensive income (loss) | $41,625 | ($11,105) | $14,915 |
Basic and diluted income (loss) per share | ' | ' | ' |
Income (loss) from continuing operations (in dollars per share) | ($0.04) | ($0.17) | ($0.30) |
Income (loss) from discontinued operations (in dollars per share) | $1.29 | ($0.16) | $0.75 |
Income (loss) per share (in dollars per share) | $1.25 | ($0.34) | $0.45 |
Weighted average common shares (basic and diluted) (in shares) | 33,307 | 32,859 | 32,820 |
STATEMENTS_OF_COMPREHENSIVE_LO1
STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (Parenthetical) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2011 |
STATEMENTS OF COMPREHENSIVE (LOSS) INCOME | ' | ' |
Income (loss) from operations of discontinued operations, income taxes | ' | $818 |
Gain from sale of discontinued operations, income taxes | $1,705 | ' |
STATEMENTS_OF_CHANGES_IN_STOCK
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (USD $) | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive (Loss) Income | Accumulated Deficit |
Balance at Dec. 31, 2010 | $27,457,000 | $33,000 | $274,646,000 | ($3,000) | ($247,219,000) |
Balance (in shares) at Dec. 31, 2010 | ' | 32,793,457 | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' |
Exercise of options to purchase common stock ($.40-$22.74, $.40 - $7.74, and $.40 - $7.74 per share) in 2013, 2012 and 2011, respectively | 22,000 | ' | 22,000 | ' | ' |
Exercise of options to purchase common stock (in shares) | ' | 9,064 | ' | ' | ' |
Share-based payment-director services ($7.73, $5.08, and $7.13 per share) in 2013, 2012 and 2011, respectively | 178,000 | ' | 178,000 | ' | ' |
Share-based payment-director services (in shares) | ' | 25,000 | ' | ' | ' |
Share-based payment-employee compensation | 1,506,000 | ' | 1,506,000 | ' | ' |
Net income (loss) | 14,892,000 | ' | ' | ' | 14,892,000 |
Unrealized (loss) gain on investments available for sale | 23,000 | ' | ' | 23,000 | ' |
Share-based payment-related party | 1,740,000 | ' | 1,740,000 | ' | ' |
Balance at Dec. 31, 2011 | 45,818,000 | 33,000 | 278,092,000 | 20,000 | -232,327,000 |
Balance (in shares) at Dec. 31, 2011 | ' | 32,827,521 | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' |
Exercise of options to purchase common stock ($.40-$22.74, $.40 - $7.74, and $.40 - $7.74 per share) in 2013, 2012 and 2011, respectively | 87,000 | ' | 87,000 | ' | ' |
Exercise of options to purchase common stock (in shares) | ' | 28,708 | ' | ' | ' |
Share-based payment-director services ($7.73, $5.08, and $7.13 per share) in 2013, 2012 and 2011, respectively | 127,000 | ' | 127,000 | ' | ' |
Share-based payment-director services (in shares) | ' | 25,000 | ' | ' | ' |
Share-based payment-employee compensation | 963,000 | ' | 963,000 | ' | ' |
Net income (loss) | -11,065,000 | ' | ' | ' | -11,065,000 |
Unrealized (loss) gain on investments available for sale | -40,000 | ' | ' | -40,000 | ' |
Balance at Dec. 31, 2012 | 35,890,000 | 33,000 | 279,269,000 | -20,000 | -243,392,000 |
Balance (in shares) at Dec. 31, 2012 | 32,881,000 | 32,881,229 | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' |
Exercise of options to purchase common stock ($.40-$22.74, $.40 - $7.74, and $.40 - $7.74 per share) in 2013, 2012 and 2011, respectively | 2,193,000 | ' | 2,193,000 | ' | ' |
Exercise of options to purchase common stock (in shares) | ' | 642,514 | ' | ' | ' |
Share-based payment-director services ($7.73, $5.08, and $7.13 per share) in 2013, 2012 and 2011, respectively | 180,000 | ' | 180,000 | ' | ' |
Share-based payment-director services (in shares) | ' | 23,250 | ' | ' | ' |
Net exercise of warrant to purchase common stock ($11.00 per share) | ' | 1,000 | -1,000 | ' | ' |
Net exercise of warrant to purchase common stock (in shares) | ' | 567,610 | ' | ' | ' |
Share-based payment-employee compensation | 1,061,000 | ' | 1,061,000 | ' | ' |
Net income (loss) | 41,638,000 | ' | ' | ' | 41,638,000 |
Unrealized (loss) gain on investments available for sale | -13,000 | ' | ' | -13,000 | ' |
Balance at Dec. 31, 2013 | $80,949,000 | $34,000 | $282,702,000 | ($33,000) | ($201,754,000) |
Balance (in shares) at Dec. 31, 2013 | 34,115,000 | 34,114,603 | ' | ' | ' |
STATEMENTS_OF_CHANGES_IN_STOCK1
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY | ' | ' | ' |
Exercise of options to purchase common stock, per share, low end of range | $0.40 | $0.40 | $0.40 |
Exercise of options to purchase common stock, per share, high end of range | $22.74 | $7.74 | $7.74 |
Share-based payment-director services, per share | $7.73 | $5.08 | $7.13 |
Exercise of warrant to purchase common stock, per share | $11 | ' | ' |
STATEMENTS_OF_CASH_FLOWS
STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Continuing operations | ' | ' | ' |
Income (loss) from continuing operations | ($1,093) | ($5,747) | ($9,902) |
Adjustments to reconcile income (loss) from continuing operations to net cash provided by (used in) operations of continuing operations: | ' | ' | ' |
Unrealized gain on trading securities | -401 | ' | ' |
Depreciation and amortization | 587 | 552 | 577 |
Non cash share-based payments | 583 | 492 | 894 |
Provision for bad debts | 80 | 22 | 3 |
Non cash expense-extension of expiration date of warrant to related party | ' | ' | 1,740 |
Changes in operating assets and liabilities: | ' | ' | ' |
Accounts receivable | -4,685 | -2,185 | -523 |
Inventory | -651 | -511 | -257 |
Prepaid and deferred taxes expenses , and other current assets | 158 | -259 | 266 |
Tax and deferred taxes | -160 | 2,188 | 982 |
Other assets | ' | ' | 184 |
Accounts payable, accrued expenses, and other current liabilities | 2,605 | 665 | -140 |
Net cash used in operating activities of continuing operations | -2,977 | -4,783 | -6,176 |
Discontinued operations | ' | ' | ' |
Income (loss) from discontinued operations | -6,668 | -5,318 | 24,794 |
Adjustments to reconcile loss from discontinued operations to net cash used in operations of discontinued operations: | ' | ' | ' |
Non cash impact of the sale of discontinued operations | -1,705 | ' | ' |
Depreciation and amortization | 156 | 156 | 168 |
Non cash share-based payments | 658 | 598 | 790 |
Changes in operating assets and liabilities: | ' | ' | ' |
Accounts receivable and other current assets | 113 | -172 | 1,720 |
Accounts payable and accrued expenses | -2,846 | -419 | -772 |
Deferred revenue | ' | -3,333 | -40,960 |
Net cash used in operations of discontinued operations | -10,292 | -8,488 | -14,260 |
Net cash used in operating activities | -13,269 | -13,271 | -20,436 |
Cash flows from investing activities: | ' | ' | ' |
Purchases of property and equipment | -528 | -128 | -81 |
Proceeds from sale of discontinued operations, net | 19,419 | ' | ' |
Proceeds from sale of investments available for sale | 55,357 | 217,185 | 284,569 |
Purchases of investments available for sale | -62,640 | -203,733 | -263,984 |
Net cash provided by investing activities | 11,608 | 13,324 | 20,504 |
Cash flows from financing activities: | ' | ' | ' |
Principal payments on capital lease obligations | -44 | -22 | ' |
Restricted cash | 74 | 75 | 129 |
Proceeds from the exercise of options to purchase common stock | 2,193 | 87 | 22 |
Net cash provided by financing activities | 2,223 | 140 | 151 |
Net increase in cash | 562 | 193 | 219 |
Cash at beginning of period | 1,854 | 1,661 | 1,442 |
Cash at end of period | 2,416 | 1,854 | 1,661 |
Supplemental disclosure of cash flows information: | ' | ' | ' |
Cash paid for income taxes | 539 | ' | ' |
Supplemental disclosure of non cash activities: | ' | ' | ' |
Equipment acquired under a capital lease | ' | 228 | ' |
Trading securities from the sales of discontinued operations | 15,000 | ' | ' |
Purchase price guarantee related to trading securities | 1,685 | ' | ' |
Proceeds receivable due from sale of discontinued operations | $15,000 | ' | ' |
Description_of_Business_and_Si
Description of Business and Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2013 | |
Description of Business and Significant Accounting Policies | ' |
Description of Business and Significant Accounting Policies | ' |
1. Description of Business and Significant Accounting Policies | |
Description of Business | |
Osiris Therapeutics, Inc. ("we," "us," "our," or the "Company") is a Maryland corporation headquartered in Columbia, Maryland. We began operations on December 23, 1992 and were a Delaware corporation until, with approval of our stockholders, we reincorporated as a Maryland corporation on May 31, 2010. We are a leading stem cell company focused on developing and marketing products in the orthopedic, sports medicine, and wound healing markets. | |
From 2010 to 2013, we operated our business in two segments, Biosurgery and Therapeutics. Our Biosurgery business focuses on products for wound healing, cartilage repair, and orthopedics to harness the ability of cells and novel constructs to promote the body's natural healing. Our Therapeutics business focused on developing biologic stem cell drug candidates from a readily available and non-controversial source—adult bone marrow, until it was sold, as described further below. | |
Our Biosurgery business has continued to grow since its inception, and we have increased our organizational focus on the development and commercialization of products in this segment. Consistent with this organizational focus, as discussed further in Note 2—Discontinued Operations below, on October 10, 2013, we entered into a Purchase Agreement to sell our Therapeutics segment, including all of our culture expanded mesenchymal stem cell business, including Prochymal and other related assets. We eliminated the Therapeutics segment from our continuing operations as a result of the disposal transaction, and have presented the assets, liabilities, and results of the segment's operations as a discontinued operation for all periods presented. Our continuing operations now represent the portion of our business previously referred to as our Biosurgery segment. | |
Use of Estimates | |
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Due to the inherent uncertainty involved in making those assumptions, actual results could differ from those estimates. We believe that the most significant estimates that affect our financial statements are those that relate to deferred tax assets, inventory valuation, share-based compensation and the value of the derivative obtained in connection with the sale of our former Therapeutics business. | |
Cash and Cash Equivalents | |
Amounts listed as cash on our balance sheets are maintained in depository accounts at a commercial bank. Cash and cash equivalents, which include highly liquid investments with maturities of three months or less when purchased, held in our brokerage investment accounts are classified as investments available for sale, as the amounts represent investments that have matured and are anticipated to be reinvested in debt securities in the near future, and are disclosed at fair value, which approximates cost. | |
Reclassifications | |
We have reclassified certain prior-year amounts for comparative purposes. These reclassifications did not affect our results of operations or financial positions for the years presented. | |
Investments Available for Sale | |
Investments available for sale consist primarily of marketable securities with maturities less than one year. Investments available for sale are valued at their fair value, with unrealized gains and losses reported as a separate component of stockholders' equity in accumulated other comprehensive income. All realized gains and losses on our investments available for sale are recognized in results of operations as other income. | |
Investments available for sale are evaluated periodically to determine whether a decline in their value is "other than temporary." The term "other than temporary" is not intended to indicate a permanent decline in value. Rather, it means that the prospects for near term recovery of value are not necessarily favorable, or that there is a lack of evidence to support fair values equal to, or greater than, the carrying value of the security. We review criteria such as the magnitude and duration of the decline, as well as the reasons for the decline, to predict whether the loss in value is other than temporary. If a decline in value is determined to be other than temporary, the carrying value of the security is reduced and a corresponding charge to earnings is recognized. | |
Restricted Cash | |
We periodically are required under the terms of various agreements to provide letters of credit which are collateralized by cash deposits. The majority of the restricted cash balance relates to a letter of credit that we caused to be issued in lieu of a security deposit under the operating lease for our Columbia, Maryland facility. | |
Trade Accounts Receivable | |
Trade accounts receivable are reported at their net realizable value. We charge off uncollectible receivables when the likelihood of collection is remote. We set credit terms with individual customers, and consider receivables outstanding longer than the time specified in the respective customer's contract, typically 45-days, to be past due. As of December 31, 2013 and 2012, accounts receivable in the accompanying balance sheet are reported net of a $78,000 and a $25,000 allowance for doubtful accounts, respectively. We believe the reported amounts are fully collectible. Trade accounts receivable balances are not collateralized. We have incurred bad debt expense of $95,000, $22,000 and $3,000 related to our biosurgery operations during fiscal 2013, 2012 and 2011, respectively. | |
Inventory | |
We began carrying inventory of our Biosurgery products on our balance sheet following commercial launch of such products. Inventory consists of raw materials, biologic products in process, and products available for distribution. We determine our inventory values using the first-in, first-out method. Inventory is valued at the lower of cost or market, and excludes units that we anticipate distributing for clinical evaluation. | |
Property and Equipment | |
Property and equipment, including improvements that extend useful lives, are valued at cost, while maintenance and repairs are charged to operations as incurred. Depreciation is calculated using the straight-line method based on estimated useful lives ranging from three to seven years for furniture, equipment and internal use software. Leasehold improvements and assets under capital leases are amortized over the shorter of the estimated useful life of the asset or the original term of the lease. | |
Valuation of Long-lived Assets | |
We review long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or group of assets may not be fully recoverable. These events or changes in circumstances may include a significant deterioration of operating results, changes in business plans, or changes in anticipated future cash flows. If an impairment indicator is present, we evaluate recoverability by a comparison of the carrying amount of the assets to future undiscounted net cash flows expected to be generated by the assets. Assets are grouped at the lowest level for which there is identifiable cash flows that are largely independent of the cash flows generated by other asset groups. If the total of the expected undiscounted future cash flows is less than the carrying amount of the asset, an impairment loss is recognized for the difference between the fair value and carrying value of assets. Fair value is generally determined by estimates of discounted cash flows. The discount rate used in any estimate of discounted cash flows would be the rate required for a similar investment of like risk. There were no impairment losses recognized during fiscal years 2013, 2012 or 2011. | |
Derivative and Securities Received in Business Disposition | |
As discussed in Note 2—Discontinued Operations, we disposed of our Therapeutics segment in October 2013. A portion of the consideration for the sale of that business was stock of Mesoblast Limited ("Mesoblast"), the parent of the purchaser. We are required to hold that stock for one year from the date of receipt. We currently intend to dispose of the Mesoblast stock as soon as we are able to do so. As such, we have reflected the investment as a current asset in Trading Securities. Mesoblast is a public company and its stock is traded on the Australian stock exchange. | |
The Mesoblast stock is subject to limited price protection for the one year required holding period. To the extent the value of those shares decreases during the holding period, Mesoblast is required to pay us for the decrease in value. This payment is to be made at least one half in cash and at the option of Mesoblast, up to one half in additional shares of Mesoblast stock. Any additional Mesoblast stock will also have to be held for one year during which period there is no further price protection. The price protection is accounted for as a derivative under ASC 815, Derivatives and Hedging, and, as such is recorded on the balance sheet at fair value, with changes recognized in net income. We have elected to measure the Mesoblast stock at fair value with changes in fair value reflected in net income, as permitted under ASC 825-10, Financial Instruments—Fair Value Option. | |
All derivative instruments within the scope of ASC 815, Derivatives and Hedging, are recorded on the balance sheet at fair value. Currently, our only derivative instrument is the price guarantee regarding the payment received in restricted Mesoblast shares described in Note 12—Derivative and Securities Received in Business Disposition below. We do not hold derivative financial instruments for trading purposes. | |
Investments Available for Sale | |
Investments available for sale consist primarily of marketable securities. Investments available for sale are valued at their fair value, with unrealized gains and losses reported as a separate component of stockholders' equity in accumulated other comprehensive income. All realized gains and losses on our investments available for sale are recognized in results of operations as other income. | |
Investments available for sale are evaluated periodically to determine whether a decline in their value is "other than temporary." The term "other than temporary" is not intended to indicate a permanent decline in value. Rather, it means that the prospects for near term recovery of value are not necessarily favorable, or that there is a lack of evidence to support fair values equal to, or greater than, the carrying value of the security. We review criteria such as the magnitude and duration of the decline, as well as the reasons for the decline, to predict whether the loss in value is other than temporary. If a decline in value is determined to be other than temporary, the carrying value of the security is reduced and a corresponding charge to earnings is recognized. | |
Biosurgery Revenue Recognition | |
We recognize revenue from product distribution when title passes to the customer. Title usually passes when the product is shipped to the customer and leaves our loading dock. In some situations, we store consigned inventory on site in freezers at hospital or clinic facilities and title passes to the customer when the product is used in a surgical procedure. In these instances we recognize the revenue upon notification of the completed surgical procedure. We verify the condition and status of all consigned inventory on at least a quarterly basis. Due to the nature of our products and the need to ensure they are maintained at the proper frozen temperature, we generally do not allow product returns. | |
Therapeutics Revenue Recognition | |
In our former Therapeutics business, we evaluated revenues from agreements that have multiple elements to determine whether the components of the arrangement represent separate units of accounting. To recognize a delivered item in a multiple element arrangement, the delivered items must have value on a standalone basis and the delivery or performance must be probable and within our control for any delivered items that have a right of return. The determination of whether multiple elements of a collaboration agreement meet the criteria for separate units of accounting requires us to exercise judgment. We account for the activities of our former Therapeutics business as discontinued operations. | |
Revenues from research licenses associated with our former Therapeutics business were recognized as earned upon either the incurring of reimbursable expenses directly related to the particular research plan or the completion of certain development milestones as defined within the terms of the agreement. Payments received in advance of research performance were designated as deferred revenue. Non-refundable upfront license fees and certain other related fees associated with our former Therapeutics business were recognized on a straight-line basis over the development periods of the contract deliverables. Fees associated with substantive at risk performance based milestones [are] recognized as revenue upon their completion, as defined in the respective agreements. Incidental assignment of technology rights [were] recognized as revenue when and if it was earned and received. | |
In October 2008, we entered into a Collaboration Agreement with Genzyme Corporation, then an independent and now a Sanofi company ("Genzyme"), for the development and commercialization of our biologic drug candidates, Prochymal and Chondrogen™. Under this agreement, Genzyme made non-contingent, non-refundable cash payments to us, totaling $130 million. The agreement provided Genzyme with certain rights to intellectual property developed by us, and required that we continue to perform certain development work related to the subject biologic drug candidates. In February 2012, Sanofi issued a press release which included an update on their R&D pipeline, stating that it had discontinued its project with Prochymal for GvHD. In September 2012, we reached agreement with Sanofi to conclude the Collaboration Agreement without either party having any continuing obligation to the other. | |
We evaluated the deliverables related to the upfront payments made to us under the Genzyme collaboration agreement, and concluded that the various deliverables represent a single unit of accounting. For this reason, we deferred the recognition of revenue related to the upfront payments, and amortized these amounts to revenue on a straight-line basis over the estimated delivery period of the required development services, which extended through January 2012. | |
Research and Development Costs | |
We expense internal and external research and development ("R&D") costs, including costs of funded R&D arrangements and the manufacture of clinical batches of Biosurgery products used in clinical trials, in the period incurred. | |
Internal resources are applied interchangeably across several product candidates due to the potential applicability of our biologic drug candidates for multiple indications. | |
Income Taxes | |
Deferred tax liabilities and assets are recognized for the estimated future tax consequences of temporary differences, income tax credits and net operating loss carry-forwards. Temporary differences are primarily the result of the differences between the tax bases of assets and liabilities and their financial reporting values. Deferred tax liabilities and assets are measured by applying the enacted statutory tax rates applicable to the future years in which deferred tax liabilities or assets are expected to be settled or realized. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense, if any, consists of the taxes payable for the current period and the change during the period in deferred tax assets and liabilities. | |
We recognize in our financial statements the impact of a tax position, if that position is more likely than not to be sustained upon an examination, based on the technical merits of the position. Interest and penalties related to income tax matters are recorded as income tax expense. At December 31, 2013 and 2012, we had no accruals for interest or penalties related to income tax matters. | |
Income per Common Share | |
Basic income per common share is calculated by dividing net income by the weighted average number of common shares outstanding during the period. Diluted income per common share adjusts basic income per share for the potentially dilutive effects of common share equivalents, using the treasury stock method, and includes the incremental effect of shares that would be issued upon the assumed exercise of stock options and warrants. | |
Diluted loss from continuing operations for the year ended December 31, 2013 excluded all 1,233,767 shares issuable upon the exercise of options, as their impact on our loss from continuing operations is anti-dilutive. As a result, basic and diluted weighted average common shares outstanding are identical. | |
Diluted loss per common share for the year ended December 31, 2012 excludes the 1,000,000 shares issuable upon the exercise of an outstanding "out-of the money" warrant, and all 1,826,114 of our outstanding options as of December 31, 2012, as their impact on our net loss is anti-dilutive. As a result, basic and diluted weighted average common shares outstanding are identical. | |
Diluted income per common share for 2011 excludes 1,311,686 "out-of the money" stock options and the 1,000,000 shares issuable upon the assumed exercise of our outstanding warrant, discussed in Note 8 below, as their effect is anti-dilutive. | |
Share-Based Compensation | |
We account for share-based payments using the fair value method. | |
We recognize all share-based payments to employees and non-employee directors in our financial statements based on their grant date fair values, calculated using the Black-Scholes option pricing model. Compensation expense related to share-based awards is recognized on a straight-line basis for each vesting tranche based on the value of share awards that are expected to vest on the grant date, which is revised if actual forfeitures differ materially from original expectations. | |
Comprehensive Income | |
Comprehensive income consists of net income and all changes in equity from non-stockholder sources, which consist of changes in unrealized gains and losses on investments. | |
Concentration of Risk | |
We maintain cash and short-term investment balances in accounts that exceed federally insured limits, although we have not experienced any losses on such accounts. We also invest excess cash in investment grade securities, generally with maturities of one year or less. | |
We have historically provided credit in the normal course of business to contract counterparties and to the distributors of our product. Trade accounts receivable in the accompanying balance sheets consist primarily of amounts due from distributors of our Biosurgery products within the United States. During fiscal 2013, revenues from one of the distributors of our Biosurgery products, Stability Biologics, comprised approximately 50% of our total Biosurgery revenues. As of December 31, 2013, receivables from this distributor comprised 6% of our total receivables. We expect all of our reported receivables to be fully collected. As discussed under "Trade Accounts Receivable" above, we have not incurred material bad debt expense for the three years ended December 31, 2013. | |
Recent Accounting Guidance Not Yet Adopted at December 31, 2013 | |
In July 2013, the Financial Accounting Standards Board ("FASB") issued an Accounting Standards Update ("ASU") related to the presentation of unrecognized tax benefits when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. The ASU requires an unrecognized tax benefit, or a portion of an unrecognized tax benefit, to be presented in the financial statements as either a reduction to a deferred tax asset or separately as a liability depending on the existence, availability and/or use of an operating loss carryforward, a similar tax loss, or a tax credit carryforward. This ASU will be effective for us beginning the first quarter of 2014. We do not expect that this ASU will have an impact on our consolidated financial statements as we currently do not have any unrecognized tax benefits in the same jurisdictions in which we have tax loss or credit carryovers. | |
In February 2013, the FASB issued an ASU related to the reporting and disclosure of amounts reclassified out of accumulated other comprehensive income by component. An entity is required to present either on the face of the statement of operations or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income, but only if the amount reclassified is required to be reclassified to net income in its entirety in the same reporting period. For amounts not reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures that provide additional detail about those amounts. This ASU was effective for our annual and interim periods beginning in fiscal 2013. The ASU had no effect on our consolidated financial statements as we have a single component of other comprehensive income, currency translation adjustments, which is not reclassified to net income. | |
Discontinued_Operations
Discontinued Operations | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Discontinued Operations | ' | ||||||||||
Discontinued Operations | ' | ||||||||||
2. Discontinued Operations | |||||||||||
As reported on our Current Report on Form 8-K, dated October 10, 2013, we entered into a Purchase Agreement with Mesoblast, pursuant to the terms of which the we sold our culture expanded mesenchymal stem cell (ceMSC) business, including Prochymal and other related assets. The Purchase Agreement provides for payment to us of $50 million in initial consideration, and payment of up to an additional $50 million upon the achievement by Mesoblast of certain clinical and regulatory milestones. Additionally, we will be entitled to earn low single to double digit cash royalties on future sales by Mesoblast of Prochymal and other products utilizing the acquired ceMSC technology. | |||||||||||
The Purchase Agreement provides for the $50.0 million of initial payments and up to $50.0 million of contingent additional payments to us upon our achievement of milestone events, as follows: | |||||||||||
Milestone | Amount | ||||||||||
$0 | |||||||||||
Initial consideration | |||||||||||
Letter of intent payments | $ | 3,500 | |||||||||
Initial closing payment | 16,500 | ||||||||||
Additional closing payment, 6 months after closing date | 15,000 | ||||||||||
Delivery of all scheduled assets under the Transfer Agreement | 15,000 | ||||||||||
| | | | | |||||||
Total initial consideration | 50,000 | ||||||||||
| | | | | |||||||
Contingent Consideration | |||||||||||
First marketing authorization received in the U.S. | 20,000 | ||||||||||
First marketing authorization received from France, Germany, or European Union. | 10,000 | ||||||||||
Completion of the enrollment of the Phase 3 Crohn's Trial or Mesoblast's election to discontinue the trial | 10,000 | ||||||||||
Receipt of final data for the Crohn's trial or first marketing approval for Crohn's | 10,000 | ||||||||||
| | | | | |||||||
Total conditional consideration | 50,000 | ||||||||||
| | | | | |||||||
Total possible purchase price | $ | 100,000 | |||||||||
| | | | | |||||||
| | | | | |||||||
Of the $50 million in total initial consideration, we had received at December 31, 2013, payment of $20 million in cash, and $15 million in Mesoblast ordinary shares, which were delivered to us upon completed delivery of the ceMSC assets. The remaining $15 million of the initial consideration is scheduled for payment to us in cash on April 10, 2014. The Mesoblast shares received by us are subject to a one year holding period from the date of receipt, but are afforded limited downside protection for a drop in the Mesoblast share price over the holding period. We have evaluated this downside protection, and determined that it meets the criteria of a derivative instrument. The fair value of the protection at the time of the disposition of our Therapeutics business was $1.7 million. We recognized the price protection derivative as an asset at year end at its then fair value of $1.7 million, which has been reflected in the calculation of the gain on sale of the Therapeutics business. | |||||||||||
Our ability to receive the second $50 million is subject to satisfaction of the milestones indicated above all of which are largely dependent upon the clinical and regulatory success of Mesoblast and other factors not in our control. These include many if not all of the risks and uncertainties that our ceMSC business was subject to prior to its sale to Mesoblast, including product development, efficacy and regulatory risks. We have received no such payments thus far, nor do we have any expectation of receiving any such payments in the foreseeable future. Our ability to earn royalties from Mesoblast is subject to these same risks and will require performance by Mesoblast that results in its meeting some or all of the milestones referred to above, and is thereafter also dependent upon the commercial success of Mesoblast's ceMSC business. Royalties, if any, are payable to us in cash. Any portion of the second $50 million that becomes payable to us will be payable, at the discretion of Mesoblast, in Mesoblast ordinary shares, based on a then current valuation of such shares. Any such Mesoblast ordinary shares that we receive will also be subject to a one year holding period, with the same limited downside protection described above. | |||||||||||
We eliminated the Therapeutics segment from our continuing operations as a result of the disposal transaction and have presented the assets, liabilities, and results of the segment's operations as a discontinued operation for all periods. Our continuing operations now represent the portion of our business previously referred to as our Biosurgery segment. | |||||||||||
As noted above, we eliminated the Therapeutics business from our continuing operations as a result of the disposal transaction and have presented the assets, liabilities, and results of the segment's operations as a discontinued operation for all periods presented. We have no continuing involvement with Therapeutics business, and the only continuing cash flows to us related to the Therapeutics business will be the contingent consideration and royalties provided for under the purchase agreement, as described above. We received no such contingent payments or royalties in 2013. | |||||||||||
We recognized a gain of approximately $49.4 million of the sale of discontinued operations during the year ended December 31, 2013, representing the $50.0 million in initial payments received under the Purchase Agreement and the $1.7 million fair value of the derivative instrument received, net of transaction costs of $0.6 million, including legal, accounting and advisory fees, and income tax expense of $1.7 million. | |||||||||||
The net assets allocable to the Therapeutics business at December 31, 2013 and 2012 were as follows: | |||||||||||
2013 | 2012 | ||||||||||
($000s) | ($000s) | ||||||||||
Current assets: | |||||||||||
Accounts receivable | $ | 91 | $ | 204 | |||||||
| | | | | | | | ||||
| | | | | | | | ||||
Current liabilities: | |||||||||||
Accounts payable and accrued expenses | $ | 57 | $ | 2,903 | |||||||
| | | | | | | | ||||
Summarized operating results of the Therapeutics segment are as follows: | |||||||||||
Year ended December 31, | |||||||||||
($000s) | |||||||||||
2013 | 2012 | 2011 | |||||||||
Revenue from collaborative research agreements and royalties | $ | 639 | $ | 3,955 | $ | 41,140 | |||||
Operating expenses: | |||||||||||
Research and development | $ | 6,426 | 8,607 | 14,816 | |||||||
Selling, general and administrative | 881 | 666 | 712 | ||||||||
| | | | | | | | | | | |
7,307 | 9,273 | 15,528 | |||||||||
| | | | | | | | | | | |
(Loss) income from discontinued operations before income tax expense | (6,668 | ) | (5,318 | ) | 25,612 | ||||||
Income tax expense | — | — | (818 | ) | |||||||
| | | | | | | | | | | |
(Loss) income from discontinued operations | $ | (6,668 | ) | $ | (5,318 | ) | $ | 24,794 | |||
| | | | | | | | | | | |
| | | | | | | | | | | |
Revenues for our Therapeutics segment have historically consisted primarily of collaborative research agreements and royalties. Because of the disposition of our Therapeutics business in 2013, we will no longer incur related research and development expenses related to these discontinued operations. Our Therapeutics segment also earned royalty revenues and cost reimbursement under our adult expanded access program. Royalties are earned on the sale of human mesenchymal stem cells sold for research purposes. We recognize this revenue as sales are made. Revenues from our former Therapeutics business include approximately $215,000 of royalty revenue in 2013, $305,000 of royalty revenue in 2012, and $65,000 of royalty revenue in 2011. Revenues from our former Therapeutics business also include approximately $424 000, $296,000, and $115,000, in cost reimbursement for Prochymal used in our adult expanded access program during 2013, 2012, and 2011, respectively. | |||||||||||
Segment_Reporting
Segment Reporting | 12 Months Ended |
Dec. 31, 2013 | |
Segment Reporting | ' |
Segment Reporting | ' |
3. Segment Reporting | |
Historically, we have managed our business in two operating segments: our Biosurgery segment and our Therapeutics segment. | |
Our Biosurgery segment is focused on the development, manufacture and distribution of biologic products for wound healing, cartilage repair, and orthopedics to harness the ability of cells and novel constructs to promote the body's natural healing. We launched Grafix for commercial distribution in 2010, began distribution of Ovation in early fiscal 2011, and began distribution of Cartiform and OvationOS during 2013. We have continued to increase our distribution volume of these products since their respective commercial launches and are developing additional products for future commercialization. | |
Our Therapeutics segment focused on developing and marketing products to treat medical conditions in the inflammatory and cardiovascular disease areas. Its operations have focused on clinical trials and discovery efforts. As disclosed in Note 2—Discontinued Operations, we entered into a Purchase Agreement with Mesoblast, pursuant to the terms of which we sold our culture expanded mesenchymal stem cell business, including Prochymal and other related assets. | |
Given the sale of our former Therapeutics segment, we now have only one operating segment in the United States of America. As such, our financial statements present the assets, liabilities, and results of the former Therapeutics segment as discontinued operations for all periods presented, the rest of our balance sheets and statements of comprehensive (loss) income present information of the remaining Biosurgery segment. | |
Property_and_Equipment
Property and Equipment | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Property and Equipment | ' | |||||||
Property and Equipment | ' | |||||||
4. Property and Equipment | ||||||||
Property and equipment at December 31, 2013 and 2012 are as follows: | ||||||||
2013 | 2012 | |||||||
$0 | $0 | |||||||
Laboratory and manufacturing equipment | $ | 663 | $ | 492 | ||||
Computer hardware, furniture and fixtures | 899 | 567 | ||||||
Leased assets | 228 | 228 | ||||||
Leasehold improvements | 4,260 | 4,234 | ||||||
| | | | | | | | |
6,050 | 5,521 | |||||||
Accumulated depreciation and amortization | (4,154 | ) | (3,410 | ) | ||||
| | | | | | | | |
Property and equipment, net | $ | 1,896 | $ | 2,111 | ||||
| | | | | | | | |
| | | | | | | | |
Inventory
Inventory | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Inventory | ' | |||||||
Inventory | ' | |||||||
5. Inventory | ||||||||
We began carrying inventory of our Biosurgery products on our balance sheet following commercial launch of such products. | ||||||||
As of December 31, 2013 and 2012, inventory for our Biosurgery segment consists of the following: | ||||||||
2013 | 2012 | |||||||
$0 | $0 | |||||||
Inventory | ||||||||
Raw materials and supplies | $ | 387 | $ | 284 | ||||
Work-in-process | 22 | 135 | ||||||
Finished goods | 1,520 | 859 | ||||||
| | | | | | | | |
Total Biosurgery inventory | $ | 1,929 | $ | 1,278 | ||||
| | | | | | | | |
Prior to the transaction described in Note 2—Discontinued Operations, we did not carry any inventory for our Therapeutics products, as we had yet to launch Prochymal for commercial distribution. | ||||||||
Capital_Lease
Capital Lease | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Capital Lease | ' | ||||
Capital Lease | ' | ||||
6. Capital Lease | |||||
In July 2012, we leased equipment under a capital lease at an effective interest rate of approximately 5%, with 60 monthly payments of $4,000 starting July 2012. The capital lease is recorded at the present value of the future minimum lease payments. Future minimum lease payments under the capital lease agreement at December 31, 2013 are as follows: | |||||
Amount | |||||
(000s) | |||||
December 31, | |||||
2014 | $ | 48 | |||
2015 | 48 | ||||
2016 | 48 | ||||
2017 | 24 | ||||
| | | | | |
168 | |||||
Less: Amount representing interest | (6 | ) | |||
| | | | | |
Present value of minimum lease payments | 162 | ||||
Less: Current portion of capital lease obligations | (45 | ) | |||
| | | | | |
Long-term portion of capital lease obligations | $ | 117 | |||
| | | | | |
| | | | | |
ShareBased_Compensation
Share-Based Compensation | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Share-Based Compensation | ' | ||||||||||||||||
Share-Based Compensation | ' | ||||||||||||||||
7. Share-Based Compensation | |||||||||||||||||
In April 2006, we adopted our 2006 Omnibus Plan. We amended and restated this plan in 2008 and 2010, and amended it further in 2012, in each case to, among other things, increase the number of shares available for grant. In addition, we had previously established our Amended and Restated 1994 Stock Incentive Plan. Both Plans authorize the issuance of various forms of stock-based awards, including incentive and non-qualified stock options, stock purchase rights, stock appreciation rights and restricted and unrestricted stock awards. A total of 2,250,000 shares of our common stock have been reserved for issuance under the Amended and Restated 2006 Omnibus Plan, and 736,378 shares were reserved under our Amended and Restated 1994 Stock Incentive Plan. We ceased all grants under the Amended and Restated 1994 Stock Incentive Plan concurrent with our initial public offering in August 2006. As a result, no shares are currently available for future awards under the Amended and Restated 1994 Stock Incentive Plan. At December 31, 2013, there were approximately 369,781 shares available for future awards under the Amended and Restated 2006 Omnibus Plan. | |||||||||||||||||
We generally issue stock option awards that vest over four years and have a ten-year contractual life. We estimate the fair value of stock options using the Black-Scholes option-pricing model. Estimates of fair value are not intended to predict actual future events or the value ultimately realized by persons who receive equity awards. The fair value of stock options granted during each of the periods was estimated using the following assumptions: | |||||||||||||||||
Years ended December 31, | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Assumptions: | |||||||||||||||||
Weighted average risk-free interest rate | 1.00-1.50 | % | 2 | % | 2 | % | |||||||||||
Dividend yield | 0 | % | 0 | % | 0 | % | |||||||||||
Expected life of option grants | 5.0-6.5 yrs | 6.0-6.3 yrs | 5.5 yrs | ||||||||||||||
Weighted average expected stock price volatility | 52-61 | % | 52-54 | % | 53-55 | % | |||||||||||
The expected life of stock options granted was based on the our historical option exercise experience and post vesting forfeiture experience using the historical expected term from the vesting date. The expected volatility of the options granted was determined using historical volatilities based on stock prices over a look-back period corresponding to the expected life. The risk-free interest rate was determined using the yield available for zero-coupon United States government issues with a remaining term approximating the expected life of the options. The forfeiture rate was determined based on historical pre-vesting forfeitures. We have never paid a dividend and have no intention to pay a dividend, and as such, the dividend yield is zero. | |||||||||||||||||
In connection with the stock options exercised during the year ended December 31, 2013, we received cash proceeds of $2.2 million. At December 31, 2013, there was $1.3 million of total unrecognized compensation costs related to non-vested stock options, which is expected to be recognized through fiscal 2017. | |||||||||||||||||
A summary of stock option activity for the years ended December 31, 2013, 2012, and 2011 is as follows: | |||||||||||||||||
Number of | Weighted | Weighted Average | Aggregate | ||||||||||||||
Shares | Average | Remaining | Intrinsic | ||||||||||||||
Exercise | Contractual | Value | |||||||||||||||
Price | Life | (in thousands) | |||||||||||||||
Outstanding at January 1, 2011 | 1,349,261 | $ | 9.75 | 7.0-years | |||||||||||||
Granted | 450,000 | $ | 6.82 | ||||||||||||||
Exercised | (9,064 | ) | $ | (2.42 | ) | $ | 36 | ||||||||||
Forfeited or canceled | (88,125 | ) | $ | (8.89 | ) | ||||||||||||
| | | | | | | | | | | | | |||||
Balance, December 31, 2011 | 1,702,072 | $ | 9.06 | 6.8-years | |||||||||||||
Granted | 302,000 | $ | 5.5 | ||||||||||||||
Exercised | (28,708 | ) | $ | (3.05 | ) | $ | 114 | ||||||||||
Forfeited or canceled | (149,250 | ) | $ | (7.20 | ) | ||||||||||||
| | | | | | | | | | | | | |||||
Balance, December 31, 2012 | 1,826,114 | $ | 8.72 | 6.1-years | $ | 4,754 | |||||||||||
Granted | 452,000 | $ | 9.03 | ||||||||||||||
Exercised | (642,514 | ) | $ | (6.50 | ) | $ | 6,983 | ||||||||||
Forfeited or canceled | (401,833 | ) | $ | (6.79 | ) | ||||||||||||
| | | | | | | | | | | | | |||||
Balance, December 31, 2013 | 1,233,767 | $ | 10.61 | 6.3-years | $ | 7,992 | |||||||||||
| | | | | | | | | | | | | |||||
| | | | | | | | | | | | | |||||
Exercisable at December 31, 2013 | 541,142 | $ | 14.22 | 2.6-years | $ | 2,224 | |||||||||||
| | | | | | | | | | | | | |||||
| | | | | | | | | | | | | |||||
A summary of stock options outstanding at December 31, 2013, by price range is as follows: | |||||||||||||||||
Options Outstanding | Options Exercisable | ||||||||||||||||
Range of Exercise Prices | Number | Weighted-Average | Weighted-Average | Number | Weighted-Average | ||||||||||||
Outstanding | Remaining | Exercise | Outstanding | Exercise Price | |||||||||||||
Contractual Life | Price | ||||||||||||||||
(in years) | |||||||||||||||||
$ 0.01 to $ 1.00 | 18,201 | 1.4 | $ | 0.4 | 18,201 | $ | 0.4 | ||||||||||
1.01 to 5.00 | 2,500 | 8.2 | 4.78 | 625 | 4.78 | ||||||||||||
5.01 to 6.75 | 233,377 | 7.9 | 5.36 | 44,127 | 5.73 | ||||||||||||
6.76 to 7.50 | 180,064 | 6.4 | 7.06 | 72,564 | 6.98 | ||||||||||||
7.51 to 8.50 | 327,750 | 8.2 | 7.75 | 65,125 | 7.74 | ||||||||||||
8.51 to 12.25 | 114,875 | 7.6 | 10.5 | 36,500 | 11.93 | ||||||||||||
12.26 to 15.00 | 74,500 | 6.4 | 13.67 | 44,500 | 13.4 | ||||||||||||
15.01 to 17.50 | 24,000 | 4.4 | 17.04 | 21,000 | 17.1 | ||||||||||||
17.51 to 20.00 | 140,500 | 4 | 18.52 | 120,500 | 18.6 | ||||||||||||
$20.01 to $23.62 | 118,00 | 0.6 | 23.62 | 118,000 | 23.62 | ||||||||||||
| | | | | | | | | | | | | | | | | |
1,233,767 | 6.3 | $ | 10.62 | 541,142 | 14.22 | ||||||||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
The weighted fair value of options granted during the years ended December 31, 2013, 2012, and 2011 were $4.68, $2.82, and $3.50, respectively. | |||||||||||||||||
The table below reflects the total share-based compensation expense (including share-based payments to our non-employee directors, but excluding the non cash expense related to the extension of the expiration date of an outstanding warrant as discussed in Note 8 below) recognized in our statements of comprehensive (loss) income for the years ended December 31, 2013, 2012, and 2011. | |||||||||||||||||
Year Ended | |||||||||||||||||
December 31, | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
(000s) | (000s) | (000s) | |||||||||||||||
Research and development | 335 | 283 | 432 | ||||||||||||||
Selling, general and administrative | 248 | 209 | 462 | ||||||||||||||
Discontinued operations | 658 | 598 | 790 | ||||||||||||||
| | | | | | | | | | | |||||||
Total | 1,241 | 1,090 | 1,684 | ||||||||||||||
| | | | | | | | | | | |||||||
| | | | | | | | | | | |||||||
Related_Party_Transactions_and
Related Party Transactions and Warrant | 12 Months Ended |
Dec. 31, 2013 | |
Related Party Transactions and Warrant | ' |
Related Party Transactions and Warrant | ' |
8. Related Party Transactions and Warrant | |
Peter Friedli. Peter Friedli, the Chairman of our Board of Directors, or entities with which he is affiliated, have been responsible for procuring since 1993, an aggregate of approximately $270 million in debt and equity financing for us and our predecessor company. Mr. Friedli is the beneficial owner of approximately 43% of our common stock as of December 31, 2013. Of the shares beneficially owned by Mr. Friedli at December 31, 2013, 75,000 shares were received by him as Board compensation since 1996, 12,500 shares were granted in recognition of his fundraising efforts, as discussed below, 567,610 shares were received by him upon his net exercise of a warrant to purchase 1,000,000 shares of our common stock at $11.00 per share, as described below, and the remaining shares were acquired through investment or through purchase from third parties. | |
Of the 75,000 shares received by Mr. Friedli as board compensation since 1996, 10,000 shares, then valued at approximately $77,000, were issued to Mr. Friedli in 2013, 10,000 shares, then valued at approximately $51,000, were issued to Mr. Friedli in 2012, and 10,000 shares, then valued at approximately $71,000, were issued to Mr. Friedli in 2011. | |
In response to Mr. Friedli's successful efforts in procuring for us accommodations relative to financing transactions that had occurred prior to our initial public offering, we issued to Mr. Friedli in 2006, in connection with and just prior to our initial public offering, a warrant exercisable for up to 1,000,000 shares of our common stock at $11.00 per share, the price for which shares were sold in the initial public offering. This warrant was scheduled to expire in May 2011. In light of Mr. Friedli's unwavering support of the Company over a period of many years, and in recognition of his invaluable contributions to us, as founder, as a director and as Chairman of our Board, and to encourage his continued support, our Board of Directors and Compensation Committee, by the unanimous vote of all independent and disinterested members of each, approved the extension of the expiration date of the warrant until May 24, 2015, subject to the approval of our stockholders. Our stockholders approved the extension of the warrant at our 2011 Annual Meeting of Stockholders, on May 26, 2011. | |
We incurred a non cash charge against earnings on account of the extension of the warrant expiration date, based on its increase in fair value of approximately $1.7 million. This amount was recorded within general and administrative expenses. The increase in value was computed using the Black-Scholes option pricing model with a risk free interest rate of 1.50%, a four year increase in the expected life of the warrant, and a historical volatility of approximately 51%. | |
Mr. Friedli exercised this warrant on August 14, 2013 using the Net Exercise Method, resulting in the net issuance of 567,610 shares of our common stock. As of December 31, 2013, we no longer have any outstanding warrants. | |
Prolexys Pharmaceuticals, Inc. During the third quarter of fiscal 2011 we entered into a contract research agreement with Prolexys Pharmaceuticals, Inc. under which we are conducting for Prolexys an early stage clinical trial investigating a novel compound as a product candidate for cancer therapeutics. This contract was filed as an exhibit to and discussed in a Current Report on Form 8-K filed by us with the SEC primarily because of the related nature of the management and ownership of Prolexys with us and our management and with certain of our significant stockholders, and not because our rights or obligations under the contract research agreement with Prolexys are otherwise material to us. We are not incurring any third party costs related to our work with Prolexys and are primarily contributing only the efforts of employees. All third party costs associated with the Prolexys study are paid directly by Prolexys. As of December 31, 2013, the amount of internal resources we have devoted to Prolexys is not material to our operations as a whole. | |
Prolexys is 35.7% owned by BIH SA, which owns 7.8% of our outstanding common stock; 24.3% owned by Peter Friedli who is the Chairman of our Board of Directors and direct owner of 29.3% of our common stock; and 13.8% owned by Venturetec, Inc., which holds 12.5% of our common stock. Peter Friedli is the President and an approximately 2% owner of Venturetec, Inc. Mr. Friedli has also recently reported the acquisition of a convertible bond that would entitle him, upon conversion, to acquire an additional approximately 19% interest in Venturetec, Inc. Lode Debrabandere, our Chief Executive Officer, serves on the Board of Directors of Prolexys, but has no other interest therein. | |
This arrangement is part of our ongoing efforts to expand our portfolio of product candidates, but we do not consider this arrangement to be material to us at this time. | |
Our Board of Directors and Audit Committee, including all of our independent directors, but with Mr. Friedli abstaining, unanimously approved this transaction. | |
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Income Taxes | ' | ||||||||||
Income Taxes | ' | ||||||||||
9. Income Taxes | |||||||||||
For income tax reporting purposes, we reported taxable income in fiscal 2013, compared to a loss in fiscal 2012 and 2011. The income in 2013 was primarily attributable to the gain from sale of discontinued operations which are reflected in the statement of comprehensive (loss) income, net of income taxes. Continuing operations below reflect a tax benefit in the amount of $1.3 million generated during fiscal 2013. Included in this amount is $79,000 of taxes recoverable from a prior period. | |||||||||||
The loss in 2011 was primarily because we recognized the entire $130.0 million up-front payment made to us by Genzyme as of the end of fiscal 2010 for tax purposes. For financial reporting purposes, we recognized $40.0 million in revenue from the Genzyme payments during fiscal 2011. The $37,000 income tax benefit recognized during fiscal 2012 resulted from the true-up of our tax asset accounts upon filing our 2011 income tax returns. In fiscal 2011, we recorded an income tax benefit of $775,000 from continuing operations and an income tax expense of $818,000, which was offset against the income from discontinued operations. | |||||||||||
In 2013 we are subject to the alternative minimum tax in the amount of $388,000. This is reported in gain from sale of discontinued operations. In 2012 and 2011, we were not subject to the alternative minimum tax due to having a net loss for tax purposes. In the future, we may be subject to the alternative minimum tax regardless of our tax attributes. The gain from sale of discontinued operations includes interest to be accrued in the amount of $70,000 which increases income taxes payable. | |||||||||||
The effective tax rate benefit (expense) varies from the U.S. Federal Statutory tax rate principally due to the following: | |||||||||||
2013 | 2012 | 2011 | |||||||||
U.S. Federal Statutory tax rate | 35 | % | 35 | % | 35 | % | |||||
State taxes, net of federal benefits | 7 | 0 | 3.7 | ||||||||
Permanent differences | 10.7 | (5.6 | ) | (10.6 | ) | ||||||
Change in valuation allowance | — | (29.4 | ) | (20.4 | ) | ||||||
Other | 2.1 | 0.6 | (0.4 | ) | |||||||
| | | | | | | | | | | |
Effective tax rate | 54.8 | % | 0.6 | % | 7.3 | % | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Permanent differences represent primarily the exercise of incentive stock options, net of windfall benefits attributable to disqualifying dispositions, for the year ended December 31, 2013, and research and development expenses for which we claimed the orphan drug credit and non-cash share based compensation for each of the two years ended prior to December 31, 2013. | |||||||||||
The components of our net deferred tax assets and liabilities at December 31 are as follows: | |||||||||||
2013 | 2012 | ||||||||||
$0 | $0 | ||||||||||
Deferred Tax Assets: | |||||||||||
Credits | $ | 76,023 | $ | 76,491 | |||||||
Net Operating loss carry-forward | 0 | 9,243 | |||||||||
Stock options—NQSO | 1,689 | 1,638 | |||||||||
Fixed assets | 811 | 798 | |||||||||
Accrued Expenses | 101 | 57 | |||||||||
Allowance for doubtful accounts | 31 | 10 | |||||||||
Contribution carry-forward | — | 5 | |||||||||
78,655 | 88,243 | ||||||||||
Valuation allowance | (72,601 | ) | (88,243 | ) | |||||||
Net deferred tax assets | $ | 6,054 | $ | — | |||||||
Deferred Tax Liabilities: | |||||||||||
Gain on installment sale | $ | (6,054 | ) | $ | — | ||||||
| | | | | | | | ||||
| | | | | | | | ||||
We presently have available for federal income tax purposes, approximately $74.6 million of general business credit carry-forwards, which expire beginning in 2025 through 2031. In addition, we have approximately $3.5 million of net operating loss and $2.1 million alternative minimum tax credit carry forwards as of December 31, 2013. The net operating losses will begin to expire in 2031 and the alternative minimum tax credits do not expire. In addition, the windfall equity-based compensation deductions are tracked, but will not be recorded to the balance sheet until Management determines that such amounts will be utilized. During 2013, the Company had $5.4 million, of windfall stock compensation deductions. When realized, the tax benefit associated with these deductions will be credited to additional paid-in capital. | |||||||||||
The Company's ability to realize its deferred tax assets depends primarily upon the generation of sufficient future taxable income to allow for the utilization of the Company's deductible temporary differences and upon tax planning strategies. Realization of net deferred tax assets is dependent on the Company's ability to generate future taxable income, which is uncertain. The Company has recorded a valuation allowance of $72.6 million and $88.2 million, against the Company's net deferred tax assets as of December 31 2013 and December 31 2012, respectively, as Management believes it is more likely than not that the assets will not be realized. | |||||||||||
Utilization of the net operating loss carryforwards and credits may be subject to an annual limitation due to the ownership change limitations provided by the Internal Revenue Code of 1986, as amended, and similar state provisions. The Company has not performed a detailed analysis to determine whether an ownership change under Section 382 of the Internal Revenue Code occurred. The effect of an ownership change would be the imposition of an annual limitation on the use of net operating loss carryforwards and credits attributable to periods before the change and could result in a reduction in the total net operating losses and credits available. | |||||||||||
The Company is subject to income taxes in the United States and State of Maryland. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. The Company had tax net operating losses and credit carryforwards that are subject to examination for a number of years beyond the year in which they are generated for tax purposes. Since a portion of these carryforwards may be utilized in the future, many of these attribute carryforwards remain subject to examination. | |||||||||||
The Company's policy is to recognize interest and penalties related to income tax matters in income tax expense. As of December 31, 2013 and December 31, 2012, the Company had no accruals for interest or penalties related to income tax matters. | |||||||||||
Effective January 1, 2007, we adopted the provisions of the accounting pronouncement clarifying the accounting for uncertain tax positions. The pronouncement prescribes a recognition threshold and measurement attribute criteria for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The pronouncement also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. We have evaluated our tax positions in the tax returns filed, as well as un-filed tax positions and the amounts comprising our deferred tax assets. We have determined that the pronouncement does not have a material impact on our financial condition, results of operations or cash flows. | |||||||||||
Defined_Contribution_Plan
Defined Contribution Plan | 12 Months Ended |
Dec. 31, 2013 | |
Defined Contribution Plan | ' |
Defined Contribution Plan | ' |
10. Defined Contribution Plan | |
We have a 401(k) plan that is available to all employees. Employee contributions are voluntary and are determined on an individual basis up to the amount allowable under federal regulations. Employer contributions to the plan are at the discretion of the Board of Directors and vest over a seven year period beginning after the third year of eligibility. No employer contributions have been made to date. | |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Commitments and Contingencies | ' | ||||
Commitments and Contingencies | ' | ||||
11. Commitments and Contingencies | |||||
Contract Research Organizations. We utilize independent contract research organizations ("CROs") to perform many of the tasks required under our clinical trials. We rely on CROs for their testing expertise and to ensure the objectivity of our clinical results. Under the terms of these agreements, we design the protocol regarding the testing to be performed, and the CRO assists in the enrollment of the patients and testing sites, administers the trial, performs statistical analysis of the results, and compiles the final report. | |||||
We pay fees directly to the CROs for their professional services, which may be payable upon specified trial milestones or as they provide services, depending on the structure of the contract. We are also responsible for reimbursing the CROs for certain pass thru expenses they incur in administering the trial. The timing of our payments to the CROs is dependent upon the progress of the various trials, which is highly variable dependent upon the speed with which the CROs are able to enroll patients and testing sites. As such, we are unable to specifically predict the timing of future payments to CROs. | |||||
As of December 31, 2013, we had one active contract with a CRO. The total contracted payments were $3.2 million, of which we had incurred approximately $3.0 million as of that date. We expect to pay our remaining obligations under this contract during 2014. | |||||
We may utilize CROs for future clinical trials. | |||||
Leases. During 2006, we entered into a sublease agreement for approximately 61,000 square feet of laboratory, production, warehouse and office space in Columbia, Maryland. We have also entered into a direct lease with the owner of this facility that was effective as of June 1, 2009 upon the expiration of the sublease and expires in July 2016. During 2009, following the expiration of the sublease agreement, we increased an outstanding letter of credit, which was used in lieu of a security deposit for this lease, to $591,000 according to the terms of the direct lease with the owner of the facility. At each of July 1, 2013, 2012, and 2011, the security deposit required under this lease decreased to $223,000, $298,000, and $372,000, respectively. We reduced our outstanding letter of credit accordingly, and the reduced letter of credit of $223,000 remained outstanding as of December 31, 2013, and has been fully collateralized by restricted cash. | |||||
The future minimum lease payments due under the operating lease for this facility are as follows: | |||||
Columbia | |||||
Facility | |||||
$0 | |||||
2014 | $ | 1,165 | |||
2015 | 1,194 | ||||
2016 | 709 | ||||
| | | | | |
$ | 3,068 | ||||
| | | | | |
| | | | | |
Our expenses under this lease were $1.3 million, $1.3 million, and $1.2 million, during 2013, 2012, and 2011, respectively. | |||||
Historically, we also have entered into various financing arrangements to lease laboratory and other equipment. The terms of these facilities and equipment leases are considered capitalized leases. | |||||
As discussed in Note 6 Capital Lease, in July 2012, we leased an additional $228,000 of equipment under a capital lease, which was included in our balance sheet at December 31, 2013 along with $68,000 of accumulated depreciation. | |||||
Legal. We are subject to certain litigation, claims and assessments which occur in the normal course of business. Based on consultation with our legal counsel, management is of the opinion that there are no matters that are probable or reasonably possible that require accrual or disclosure. | |||||
Derivative_and_Securities_Rece
Derivative and Securities Received in Business Disposition | 12 Months Ended |
Dec. 31, 2013 | |
Derivative and Securities Received in Business Disposition | ' |
Derivative and Securities Received in Business Disposition | ' |
12. Derivative and Securities Received in Business Disposition | |
The only derivative instrument to which the company is a party is the price protection related to the shares received from Mesoblast as part of the disposition of our Therapeutics business. As discussed in Note 2—Discontinued Operations, the $15 million milestone for completed delivery of the ceMSC assets was payable in either cash or stock, at Mesoblast's election. Because Mesoblast made that payment in stock, the Purchase Agreement provides that these shares are subject to a one year holding period, during which time we are afforded limited protection for any drop in the Mesoblast share price. In the event that the shares decrease in value during the holding period, we will be compensated for 100% of the decrease in value, with 50% of the decrease payable to us in cash, and the remaining 50% again payable in either cash or ordinary shares, at Mesoblast's election. Any additional shares issued would be subject to an additional one year holding period, but will not be afforded price protection. | |
The price protection was recorded as a part of the initial consideration received under the Purchase Agreement at its fair value as of that date of $1.7 million. We have evaluated this downside protection, and determined that it meets the criteria of a derivative instrument under ASC 815. As such, the price protection derivative is being remeasured at its fair value with change in fair value being recorded in net income as a component of "Other income". | |
As of December 31, 2013, the price protection derivative has a fair value of $1.7 million, which is included as a component of "Trading Securities" as of December 31, 2013. From the closing of the sale of the Therapeutics business through December 31, 2013, we recorded a loss of $52,000 on the price protection, which is included as a component of "Other income": | |
The shares of Mesoblast to which the price protection relates were received by the Company on December 18, 2013 and are required to be held for one year from the date of receipt. The fair value of the shares when they were received was $15 million. The Company has elected to remeasure the Mesoblast shares at fair value, with changes in fair value being recorded as a component of "Other income". As such, the statement of comprehensive (loss) income impact of changes in the fair value of the Mesoblast shares and the statement of comprehensive (loss) income impact of changes in the fair value of the price protection derivative will largely offset each other during the mandatory holding. | |
The fair value of the Mesoblast shares as of December 31, 2013, determined by reference to the trading price of identical Mesoblast ordinary shares on the Australian Securities Exchange, was $15.4 million. The gain during the period from December 18, 2013 through December 31, 2013 was $401,000 and is included as a component of "Other income". | |
Fair_Value
Fair Value | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Fair Value | ' | |||||||||||||
Fair Value | ' | |||||||||||||
13. Fair Value | ||||||||||||||
Fair value is defined as the price at which an asset could be exchanged or a liability transferred (an exit price) in an orderly transaction between knowledgeable, willing parties in the principal or most advantageous market for the asset or liability. Where available, fair value is based on observable market prices or parameters or derived from such prices or parameters. Where observable prices or inputs are not available, valuation models are applied. | ||||||||||||||
Financial assets recorded at fair value in the accompanying financial statements are categorized based upon the level of judgment associated with the inputs used to measure their fair value. The levels are directly related to the amount of subjectivity associated with the inputs to fair valuation of these assets and liabilities, and are as follows: | ||||||||||||||
Level 1 | Inputs are unadjusted, quoted prices in active markets for identical assets at the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. | |||||||||||||
The fair valued assets we hold that are generally included in this category are money market securities and the Mesoblast shares received in the disposition of the Therapeutics business, where fair value is based on publicly quoted prices. | ||||||||||||||
Level 2 | Inputs are other than quoted prices included in Level 1, which are either directly or indirectly observable for the asset or liability through correlation with market data at the reporting date and for the duration of the instrument's anticipated life. | |||||||||||||
The fair valued assets we hold that are generally included in this category are investment grade short-term securities and our derivative instrument. | ||||||||||||||
Level 3 | Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities and which reflect management's best estimate of what market participants would use in pricing the asset or liability at the reporting date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. | |||||||||||||
The only asset we hold that is included in this category is the price protection derivative related to the Mesoblast shares received in the disposition of our Therapeutics business. | ||||||||||||||
When quoted prices in active markets for identical assets are available, we use these quoted market prices to determine the fair value of financial assets and classify these assets as Level 1. In other cases where a quoted market price for identical assets in an active market is either not available or not observable, we obtain the fair value from a third party vendor that uses pricing models, such as matrix pricing, to determine fair value. These financial assets would then be classified as Level 2. In the event quoted market prices were not available, we would determine fair value using broker quotes or an internal analysis of each investment's financial statements and cash flow projections. In these instances, financial assets would be classified based upon the lowest level of input that is significant to the valuation. Thus, financial assets might be classified in Level 3 even though there could be some significant inputs that may be readily available. There have been no transfers between level 1 and 2. | ||||||||||||||
The price protection derivative related to the Mesoblast shares is classified in Level 3. Its fair value was determined through use of the Black-Scholes valuation method, a standard industry methodology for valuing equity options, because the price protection is economically equivalent to a put option on the Mesoblast shares at a price of $15 million. Significant inputs to the model include the following: | ||||||||||||||
Fair value of underlying Mesoblast stock: $15,000,000 | ||||||||||||||
Contractual life: 1.0 year | ||||||||||||||
Volatility: 40% | ||||||||||||||
Risk-free interest rate: 0.13% | ||||||||||||||
Expected dividends: $0 | ||||||||||||||
There have been no other transfers in and out of Level 3. The following table represents a rollforward of the fair value of Level 3 instruments, comprised solely of the limited price protection derivative related to the Mesoblast stock issued to us in connection with the sale of our former Therapeutics business: | ||||||||||||||
December 31, | ||||||||||||||
2013 | ||||||||||||||
($000s) | ||||||||||||||
Balance at beginning of period | $ | — | ||||||||||||
Fair value upon receipt of Mesoblast stock | 1,737 | |||||||||||||
Change in Fair Value | (52 | ) | ||||||||||||
| | | | | ||||||||||
Balance at end of period | $ | 1,685 | ||||||||||||
| | | | | ||||||||||
| | | | | ||||||||||
Assets and liabilities measured at fair value on a recurring basis are summarized below as of December 31, 2013 and 2012: | ||||||||||||||
December 31, 2013 | ||||||||||||||
($000s) | ||||||||||||||
Level I | Level II | Level III | Total | |||||||||||
Assets | ||||||||||||||
Investments available for sale | ||||||||||||||
Cash & Cash Equivalents | $ | 655 | $ | — | $ | — | $ | 655 | ||||||
Investments: Available for Sale Securities | ||||||||||||||
Government Obligations | $ | — | $ | 9,244 | $ | — | $ | 9,244 | ||||||
Mutual Funds | — | 4,076 | — | 4,076 | ||||||||||
Agency Obligations | $ | — | $ | 6,675 | $ | — | $ | 6,675 | ||||||
Corporate Debt Securities & Commercial Paper | — | 6,367 | — | 6,367 | ||||||||||
Municipal Securities | $ | — | $ | 12,491 | $ | — | $ | 12,491 | ||||||
| | | | | | | | | | | | | | |
Investments available for sale | $ | 655 | $ | 38,853 | $ | — | $ | 39,508 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Derivative and securities received in business disposition | ||||||||||||||
Restricted shares of Mesoblast common stock | $ | 15,401 | $ | — | $ | — | $ | 15,401 | ||||||
Price protection on restricted Mesoblast shares | — | — | 1,685 | 1,685 | ||||||||||
| | | | | | | | | | | | | | |
Derivative and securities received in business disposition | $ | — | $ | — | $ | 1,685 | $ | 17,086 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Total assets | $ | 16,056 | $ | 38,853 | $ | 1,685 | $ | 56,594 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
December 31, 2012 | ||||||||||||||
($000s) | ||||||||||||||
Level I | Level II | Level III | Total | |||||||||||
Assets | ||||||||||||||
Money market funds and certificates of deposit | $ | 2,478 | $ | — | $ | — | $ | 2,478 | ||||||
U.S. and international government agencies | — | 200 | — | 200 | ||||||||||
Agency obligations | — | 14,856 | — | 14,856 | ||||||||||
Corporate debt securities & commercial paper | — | 4,937 | — | 4,937 | ||||||||||
Municipal securities | — | 9,767 | — | 9,767 | ||||||||||
| | | | | | | | | | | | | | |
Investments available for sale | $ | 2,478 | $ | 29,760 | $ | — | $ | 32,238 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Quarterly_Financial_Data_Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Quarterly Financial Data (Unaudited) | ' | |||||||||||||
Quarterly Financial Data (Unaudited) | ' | |||||||||||||
14. Quarterly Financial Data (Unaudited) | ||||||||||||||
Following is a summary of our unaudited quarterly results for the years ended December 31, 2013 and 2012: | ||||||||||||||
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | |||||||||||
(000s) | (000s) | (000s) | (000s) | |||||||||||
2013 | ||||||||||||||
Product revenues | $ | 4,055 | $ | 5,291 | $ | 6,882 | $ | 8,080 | ||||||
Gross profit | 2,920 | 3,810 | 5,024 | 5,898 | ||||||||||
Research and development expenses | 957 | 1,132 | 913 | 1,950 | ||||||||||
Selling, general and administrative expenses and fees | 2,646 | 4,157 | 4,602 | 4,128 | ||||||||||
Income (loss) from continuing operations | (654 | ) | (1,454 | ) | (466 | ) | 1,481 | |||||||
(Loss) income from discontinued operations | (2,081 | ) | (2,302 | ) | (1,211 | ) | 48,325 | |||||||
Net (loss) income | (2,735 | ) | (3,756 | ) | (1,677 | ) | 49,806 | |||||||
**Loss from continuing operations per share, basic | $ | (0.02 | ) | $ | (0.04 | ) | $ | (0.01 | ) | $ | 0.03 | |||
**Loss from continuing operations per share, basic diluted | (0.02 | ) | (0.04 | ) | (0.01 | ) | 0.03 | |||||||
**(Loss) income from discontinued operations per share, basic | $ | (0.06 | ) | $ | (0.07 | ) | $ | (0.04 | ) | $ | 1.46 | |||
**(Loss) income from discontinued operations per share, diluted | (0.06 | ) | (0.07 | ) | (0.04 | ) | 1.43 | |||||||
**Net (loss) income per share, basic | $ | (0.08 | ) | $ | (0.11 | ) | $ | (0.05 | ) | $ | 1.49 | |||
**Net (loss) income per share, diluted | (0.08 | ) | (0.11 | ) | (0.05 | ) | 1.46 | |||||||
2012 | ||||||||||||||
Product revenues | $ | 1,137 | $ | 1,626 | $ | 2,151 | $ | 2,935 | ||||||
Gross profit | 750 | 1,074 | 1,419 | 2,055 | ||||||||||
Research and development expenses | 1,454 | 1,434 | 1,413 | 1,200 | ||||||||||
Selling, general and administrative expenses and fees | 1,353 | 1,253 | 1,369 | 1,655 | ||||||||||
Loss from continuing operations | (2,039 | ) | (1,560 | ) | (1,345 | ) | (803 | ) | ||||||
Income (loss) from discontinued operations | 767 | (2,705 | ) | (1,569 | ) | (1,811 | ) | |||||||
Net loss | (1,272 | ) | (4,265 | ) | (2,914 | ) | (2,614 | ) | ||||||
**Loss from continuing operations per share, basic and diluted | $ | (0.06 | ) | $ | (0.05 | ) | $ | (0.04 | ) | $ | (0.02 | ) | ||
**Income (loss) from discontinued operations per share, basic and dilute | $ | 0.02 | $ | (0.08 | ) | $ | (0.05 | ) | $ | (0.05 | ) | |||
**Net loss per share, basic and diluted | $ | (0.04 | ) | $ | (0.13 | ) | $ | (0.09 | ) | $ | (0.07 | ) | ||
** | ||||||||||||||
(Loss) income per share is calculated on a quarterly basis and may not be additive to year-to-date amounts. | ||||||||||||||
Subsequent_Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2013 | |
Subsequent Events | ' |
Subsequent Events | ' |
15. Subsequent Events | |
We evaluated our December 31, 2013 financial statements for subsequent events through the date the financial statements were issued. We are not aware of any subsequent events which would require recognition or disclosure in the financial statements. | |
SCHEDULE_IIVALUATION_AND_QUALI
SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS | ' | |||||||||||||
SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS | ' | |||||||||||||
SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS | ||||||||||||||
FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 and 2011 | ||||||||||||||
(in thousands) | ||||||||||||||
Balance at | Additions | Deductions | Balance at | |||||||||||
Beginning of | End of Year | |||||||||||||
Year | ||||||||||||||
Accounts Receivable Reserve: | ||||||||||||||
2013 | $ | 25 | $ | 80 | $ | (27 | ) | $ | 78 | |||||
2012 | 3 | 22 | — | 25 | ||||||||||
2011 | — | 3 | — | 3 | ||||||||||
Inventory Reserve: | ||||||||||||||
2013 | $ | 112 | $ | — | $ | (112 | ) | $ | — | |||||
2012 | 274 | — | (162 | ) | 112 | |||||||||
2011 | 300 | — | (26 | ) | 274 | |||||||||
Net Deferred Tax Asset Valuation Allowance: | ||||||||||||||
2013 | $ | 88,243 | $ | — | $ | (15,642 | ) | $ | 72,601 | |||||
2012 | 84,134 | 4,109 | — | 88,243 | ||||||||||
2011 | 77,317 | 6,817 | — | 84,134 |
Description_of_Business_and_Si1
Description of Business and Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2013 | |
Description of Business and Significant Accounting Policies | ' |
Use of Estimates | ' |
Use of Estimates | |
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Due to the inherent uncertainty involved in making those assumptions, actual results could differ from those estimates. We believe that the most significant estimates that affect our financial statements are those that relate to deferred tax assets, inventory valuation, share-based compensation and the value of the derivative obtained in connection with the sale of our former Therapeutics business. | |
Cash and Cash Equivalents | ' |
Cash and Cash Equivalents | |
Amounts listed as cash on our balance sheets are maintained in depository accounts at a commercial bank. Cash and cash equivalents, which include highly liquid investments with maturities of three months or less when purchased, held in our brokerage investment accounts are classified as investments available for sale, as the amounts represent investments that have matured and are anticipated to be reinvested in debt securities in the near future, and are disclosed at fair value, which approximates cost. | |
Reclassifications | ' |
Reclassifications | |
We have reclassified certain prior-year amounts for comparative purposes. These reclassifications did not affect our results of operations or financial positions for the years presented. | |
Investments Available for Sale | ' |
Investments Available for Sale | |
Investments available for sale consist primarily of marketable securities with maturities less than one year. Investments available for sale are valued at their fair value, with unrealized gains and losses reported as a separate component of stockholders' equity in accumulated other comprehensive income. All realized gains and losses on our investments available for sale are recognized in results of operations as other income. | |
Investments available for sale are evaluated periodically to determine whether a decline in their value is "other than temporary." The term "other than temporary" is not intended to indicate a permanent decline in value. Rather, it means that the prospects for near term recovery of value are not necessarily favorable, or that there is a lack of evidence to support fair values equal to, or greater than, the carrying value of the security. We review criteria such as the magnitude and duration of the decline, as well as the reasons for the decline, to predict whether the loss in value is other than temporary. If a decline in value is determined to be other than temporary, the carrying value of the security is reduced and a corresponding charge to earnings is recognized. | |
Restricted Cash | ' |
Restricted Cash | |
We periodically are required under the terms of various agreements to provide letters of credit which are collateralized by cash deposits. The majority of the restricted cash balance relates to a letter of credit that we caused to be issued in lieu of a security deposit under the operating lease for our Columbia, Maryland facility. | |
Trade Accounts Receivable | ' |
Trade Accounts Receivable | |
Trade accounts receivable are reported at their net realizable value. We charge off uncollectible receivables when the likelihood of collection is remote. We set credit terms with individual customers, and consider receivables outstanding longer than the time specified in the respective customer's contract, typically 45-days, to be past due. As of December 31, 2013 and 2012, accounts receivable in the accompanying balance sheet are reported net of a $78,000 and a $25,000 allowance for doubtful accounts, respectively. We believe the reported amounts are fully collectible. Trade accounts receivable balances are not collateralized. We have incurred bad debt expense of $95,000, $22,000 and $3,000 related to our biosurgery operations during fiscal 2013, 2012 and 2011, respectively. | |
Inventory | ' |
Inventory | |
We began carrying inventory of our Biosurgery products on our balance sheet following commercial launch of such products. Inventory consists of raw materials, biologic products in process, and products available for distribution. We determine our inventory values using the first-in, first-out method. Inventory is valued at the lower of cost or market, and excludes units that we anticipate distributing for clinical evaluation. | |
Property and Equipment | ' |
Property and Equipment | |
Property and equipment, including improvements that extend useful lives, are valued at cost, while maintenance and repairs are charged to operations as incurred. Depreciation is calculated using the straight-line method based on estimated useful lives ranging from three to seven years for furniture, equipment and internal use software. Leasehold improvements and assets under capital leases are amortized over the shorter of the estimated useful life of the asset or the original term of the lease. | |
Valuation of Long-lived Assets | ' |
Valuation of Long-lived Assets | |
We review long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or group of assets may not be fully recoverable. These events or changes in circumstances may include a significant deterioration of operating results, changes in business plans, or changes in anticipated future cash flows. If an impairment indicator is present, we evaluate recoverability by a comparison of the carrying amount of the assets to future undiscounted net cash flows expected to be generated by the assets. Assets are grouped at the lowest level for which there is identifiable cash flows that are largely independent of the cash flows generated by other asset groups. If the total of the expected undiscounted future cash flows is less than the carrying amount of the asset, an impairment loss is recognized for the difference between the fair value and carrying value of assets. Fair value is generally determined by estimates of discounted cash flows. The discount rate used in any estimate of discounted cash flows would be the rate required for a similar investment of like risk. There were no impairment losses recognized during fiscal years 2013, 2012 or 2011. | |
Derivative and Securities Received in Business Disposition | ' |
Derivative and Securities Received in Business Disposition | |
As discussed in Note 2—Discontinued Operations, we disposed of our Therapeutics segment in October 2013. A portion of the consideration for the sale of that business was stock of Mesoblast Limited ("Mesoblast"), the parent of the purchaser. We are required to hold that stock for one year from the date of receipt. We currently intend to dispose of the Mesoblast stock as soon as we are able to do so. As such, we have reflected the investment as a current asset in Trading Securities. Mesoblast is a public company and its stock is traded on the Australian stock exchange. | |
The Mesoblast stock is subject to limited price protection for the one year required holding period. To the extent the value of those shares decreases during the holding period, Mesoblast is required to pay us for the decrease in value. This payment is to be made at least one half in cash and at the option of Mesoblast, up to one half in additional shares of Mesoblast stock. Any additional Mesoblast stock will also have to be held for one year during which period there is no further price protection. The price protection is accounted for as a derivative under ASC 815, Derivatives and Hedging, and, as such is recorded on the balance sheet at fair value, with changes recognized in net income. We have elected to measure the Mesoblast stock at fair value with changes in fair value reflected in net income, as permitted under ASC 825-10, Financial Instruments—Fair Value Option. | |
All derivative instruments within the scope of ASC 815, Derivatives and Hedging, are recorded on the balance sheet at fair value. Currently, our only derivative instrument is the price guarantee regarding the payment received in restricted Mesoblast shares described in Note 12—Derivative and Securities Received in Business Disposition below. We do not hold derivative financial instruments for trading purposes. | |
Biosurgery Revenue Recognition | ' |
Biosurgery Revenue Recognition | |
We recognize revenue from product distribution when title passes to the customer. Title usually passes when the product is shipped to the customer and leaves our loading dock. In some situations, we store consigned inventory on site in freezers at hospital or clinic facilities and title passes to the customer when the product is used in a surgical procedure. In these instances we recognize the revenue upon notification of the completed surgical procedure. We verify the condition and status of all consigned inventory on at least a quarterly basis. Due to the nature of our products and the need to ensure they are maintained at the proper frozen temperature, we generally do not allow product returns. | |
Therapeutics Revenue Recognition | ' |
Therapeutics Revenue Recognition | |
In our former Therapeutics business, we evaluated revenues from agreements that have multiple elements to determine whether the components of the arrangement represent separate units of accounting. To recognize a delivered item in a multiple element arrangement, the delivered items must have value on a standalone basis and the delivery or performance must be probable and within our control for any delivered items that have a right of return. The determination of whether multiple elements of a collaboration agreement meet the criteria for separate units of accounting requires us to exercise judgment. We account for the activities of our former Therapeutics business as discontinued operations. | |
Revenues from research licenses associated with our former Therapeutics business were recognized as earned upon either the incurring of reimbursable expenses directly related to the particular research plan or the completion of certain development milestones as defined within the terms of the agreement. Payments received in advance of research performance were designated as deferred revenue. Non-refundable upfront license fees and certain other related fees associated with our former Therapeutics business were recognized on a straight-line basis over the development periods of the contract deliverables. Fees associated with substantive at risk performance based milestones [are] recognized as revenue upon their completion, as defined in the respective agreements. Incidental assignment of technology rights [were] recognized as revenue when and if it was earned and received. | |
In October 2008, we entered into a Collaboration Agreement with Genzyme Corporation, then an independent and now a Sanofi company ("Genzyme"), for the development and commercialization of our biologic drug candidates, Prochymal and Chondrogen™. Under this agreement, Genzyme made non-contingent, non-refundable cash payments to us, totaling $130 million. The agreement provided Genzyme with certain rights to intellectual property developed by us, and required that we continue to perform certain development work related to the subject biologic drug candidates. In February 2012, Sanofi issued a press release which included an update on their R&D pipeline, stating that it had discontinued its project with Prochymal for GvHD. In September 2012, we reached agreement with Sanofi to conclude the Collaboration Agreement without either party having any continuing obligation to the other. | |
We evaluated the deliverables related to the upfront payments made to us under the Genzyme collaboration agreement, and concluded that the various deliverables represent a single unit of accounting. For this reason, we deferred the recognition of revenue related to the upfront payments, and amortized these amounts to revenue on a straight-line basis over the estimated delivery period of the required development services, which extended through January 2012. | |
Research and Development Costs | ' |
Research and Development Costs | |
We expense internal and external research and development ("R&D") costs, including costs of funded R&D arrangements and the manufacture of clinical batches of Biosurgery products used in clinical trials, in the period incurred. | |
Internal resources are applied interchangeably across several product candidates due to the potential applicability of our biologic drug candidates for multiple indications. | |
Income Taxes | ' |
Income Taxes | |
Deferred tax liabilities and assets are recognized for the estimated future tax consequences of temporary differences, income tax credits and net operating loss carry-forwards. Temporary differences are primarily the result of the differences between the tax bases of assets and liabilities and their financial reporting values. Deferred tax liabilities and assets are measured by applying the enacted statutory tax rates applicable to the future years in which deferred tax liabilities or assets are expected to be settled or realized. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense, if any, consists of the taxes payable for the current period and the change during the period in deferred tax assets and liabilities. | |
We recognize in our financial statements the impact of a tax position, if that position is more likely than not to be sustained upon an examination, based on the technical merits of the position. Interest and penalties related to income tax matters are recorded as income tax expense. At December 31, 2013 and 2012, we had no accruals for interest or penalties related to income tax matters. | |
Income per Common Share | ' |
Income per Common Share | |
Basic income per common share is calculated by dividing net income by the weighted average number of common shares outstanding during the period. Diluted income per common share adjusts basic income per share for the potentially dilutive effects of common share equivalents, using the treasury stock method, and includes the incremental effect of shares that would be issued upon the assumed exercise of stock options and warrants. | |
Diluted loss from continuing operations for the year ended December 31, 2013 excluded all 1,233,767 shares issuable upon the exercise of options, as their impact on our loss from continuing operations is anti-dilutive. As a result, basic and diluted weighted average common shares outstanding are identical. | |
Diluted loss per common share for the year ended December 31, 2012 excludes the 1,000,000 shares issuable upon the exercise of an outstanding "out-of the money" warrant, and all 1,826,114 of our outstanding options as of December 31, 2012, as their impact on our net loss is anti-dilutive. As a result, basic and diluted weighted average common shares outstanding are identical. | |
Diluted income per common share for 2011 excludes 1,311,686 "out-of the money" stock options and the 1,000,000 shares issuable upon the assumed exercise of our outstanding warrant, discussed in Note 8 below, as their effect is anti-dilutive. | |
Share-Based Compensation | ' |
Share-Based Compensation | |
We account for share-based payments using the fair value method. | |
We recognize all share-based payments to employees and non-employee directors in our financial statements based on their grant date fair values, calculated using the Black-Scholes option pricing model. Compensation expense related to share-based awards is recognized on a straight-line basis for each vesting tranche based on the value of share awards that are expected to vest on the grant date, which is revised if actual forfeitures differ materially from original expectations. | |
Comprehensive Income | ' |
Comprehensive Income | |
Comprehensive income consists of net income and all changes in equity from non-stockholder sources, which consist of changes in unrealized gains and losses on investments. | |
Concentration of Risk | ' |
Concentration of Risk | |
We maintain cash and short-term investment balances in accounts that exceed federally insured limits, although we have not experienced any losses on such accounts. We also invest excess cash in investment grade securities, generally with maturities of one year or less. | |
We have historically provided credit in the normal course of business to contract counterparties and to the distributors of our product. Trade accounts receivable in the accompanying balance sheets consist primarily of amounts due from distributors of our Biosurgery products within the United States. During fiscal 2013, revenues from one of the distributors of our Biosurgery products, Stability Biologics, comprised approximately 50% of our total Biosurgery revenues. As of December 31, 2013, receivables from this distributor comprised 6% of our total receivables. We expect all of our reported receivables to be fully collected. As discussed under "Trade Accounts Receivable" above, we have not incurred material bad debt expense for the three years ended December 31, 2013. | |
Recent Accounting Guidance Not Yet Adopted at December 31, 2013 | ' |
Recent Accounting Guidance Not Yet Adopted at December 31, 2013 | |
In July 2013, the Financial Accounting Standards Board ("FASB") issued an Accounting Standards Update ("ASU") related to the presentation of unrecognized tax benefits when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. The ASU requires an unrecognized tax benefit, or a portion of an unrecognized tax benefit, to be presented in the financial statements as either a reduction to a deferred tax asset or separately as a liability depending on the existence, availability and/or use of an operating loss carryforward, a similar tax loss, or a tax credit carryforward. This ASU will be effective for us beginning the first quarter of 2014. We do not expect that this ASU will have an impact on our consolidated financial statements as we currently do not have any unrecognized tax benefits in the same jurisdictions in which we have tax loss or credit carryovers. | |
In February 2013, the FASB issued an ASU related to the reporting and disclosure of amounts reclassified out of accumulated other comprehensive income by component. An entity is required to present either on the face of the statement of operations or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income, but only if the amount reclassified is required to be reclassified to net income in its entirety in the same reporting period. For amounts not reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures that provide additional detail about those amounts. This ASU was effective for our annual and interim periods beginning in fiscal 2013. The ASU had no effect on our consolidated financial statements as we have a single component of other comprehensive income, currency translation adjustments, which is not reclassified to net income. | |
Discontinued_Operations_Tables
Discontinued Operations (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Discontinued Operations | ' | ||||||||||
Schedule of initial consideration and contingent additional payments upon achievement of milestone events provided under Purchase Agreement | ' | ||||||||||
Milestone | Amount | ||||||||||
$0 | |||||||||||
Initial consideration | |||||||||||
Letter of intent payments | $ | 3,500 | |||||||||
Initial closing payment | 16,500 | ||||||||||
Additional closing payment, 6 months after closing date | 15,000 | ||||||||||
Delivery of all scheduled assets under the Transfer Agreement | 15,000 | ||||||||||
| | | | | |||||||
Total initial consideration | 50,000 | ||||||||||
| | | | | |||||||
Contingent Consideration | |||||||||||
First marketing authorization received in the U.S. | 20,000 | ||||||||||
First marketing authorization received from France, Germany, or European Union. | 10,000 | ||||||||||
Completion of the enrollment of the Phase 3 Crohn's Trial or Mesoblast's election to discontinue the trial | 10,000 | ||||||||||
Receipt of final data for the Crohn's trial or first marketing approval for Crohn's | 10,000 | ||||||||||
| | | | | |||||||
Total conditional consideration | 50,000 | ||||||||||
| | | | | |||||||
Total possible purchase price | $ | 100,000 | |||||||||
| | | | | |||||||
| | | | | |||||||
Schedule of net assets allocable to the Therapeutics business | ' | ||||||||||
2013 | 2012 | ||||||||||
($000s) | ($000s) | ||||||||||
Current assets: | |||||||||||
Accounts receivable | $ | 91 | $ | 204 | |||||||
| | | | | | | | ||||
| | | | | | | | ||||
Current liabilities: | |||||||||||
Accounts payable and accrued expenses | $ | 57 | $ | 2,903 | |||||||
| | | | | | | | ||||
Summary of operating results of the Therapeutics segment | ' | ||||||||||
Year ended December 31, | |||||||||||
($000s) | |||||||||||
2013 | 2012 | 2011 | |||||||||
Revenue from collaborative research agreements and royalties | $ | 639 | $ | 3,955 | $ | 41,140 | |||||
Operating expenses: | |||||||||||
Research and development | $ | 6,426 | 8,607 | 14,816 | |||||||
Selling, general and administrative | 881 | 666 | 712 | ||||||||
| | | | | | | | | | | |
7,307 | 9,273 | 15,528 | |||||||||
| | | | | | | | | | | |
(Loss) income from discontinued operations before income tax expense | (6,668 | ) | (5,318 | ) | 25,612 | ||||||
Income tax expense | — | — | (818 | ) | |||||||
| | | | | | | | | | | |
(Loss) income from discontinued operations | $ | (6,668 | ) | $ | (5,318 | ) | $ | 24,794 | |||
| | | | | | | | | | | |
| | | | | | | | | | | |
Property_and_Equipment_Tables
Property and Equipment (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Property and Equipment | ' | |||||||
Schedule of property and equipment | ' | |||||||
2013 | 2012 | |||||||
$0 | $0 | |||||||
Laboratory and manufacturing equipment | $ | 663 | $ | 492 | ||||
Computer hardware, furniture and fixtures | 899 | 567 | ||||||
Leased assets | 228 | 228 | ||||||
Leasehold improvements | 4,260 | 4,234 | ||||||
| | | | | | | | |
6,050 | 5,521 | |||||||
Accumulated depreciation and amortization | (4,154 | ) | (3,410 | ) | ||||
| | | | | | | | |
Property and equipment, net | $ | 1,896 | $ | 2,111 | ||||
| | | | | | | | |
| | | | | | | | |
Inventory_Tables
Inventory (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Inventory | ' | |||||||
Schedule of inventory for Biosurgery segment | ' | |||||||
2013 | 2012 | |||||||
$0 | $0 | |||||||
Inventory | ||||||||
Raw materials and supplies | $ | 387 | $ | 284 | ||||
Work-in-process | 22 | 135 | ||||||
Finished goods | 1,520 | 859 | ||||||
| | | | | | | | |
Total Biosurgery inventory | $ | 1,929 | $ | 1,278 | ||||
| | | | | | | |
Capital_Lease_Tables
Capital Lease (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Capital Lease | ' | ||||
Schedule of future minimum lease payments under the capital lease agreement | ' | ||||
Amount | |||||
(000s) | |||||
December 31, | |||||
2014 | $ | 48 | |||
2015 | 48 | ||||
2016 | 48 | ||||
2017 | 24 | ||||
| | | | | |
168 | |||||
Less: Amount representing interest | (6 | ) | |||
| | | | | |
Present value of minimum lease payments | 162 | ||||
Less: Current portion of capital lease obligations | (45 | ) | |||
| | | | | |
Long-term portion of capital lease obligations | $ | 117 | |||
| | | | | |
| | | | | |
ShareBased_Compensation_Tables
Share-Based Compensation (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Share-Based Compensation | ' | ||||||||||||||||
Schedule of assumptions used to estimate fair value of stock options granted | ' | ||||||||||||||||
Years ended December 31, | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Assumptions: | |||||||||||||||||
Weighted average risk-free interest rate | 1.00-1.50 | % | 2 | % | 2 | % | |||||||||||
Dividend yield | 0 | % | 0 | % | 0 | % | |||||||||||
Expected life of option grants | 5.0-6.5 yrs | 6.0-6.3 yrs | 5.5 yrs | ||||||||||||||
Weighted average expected stock price volatility | 52-61 | % | 52-54 | % | 53-55 | % | |||||||||||
Summary of stock option activity | ' | ||||||||||||||||
Number of | Weighted | Weighted Average | Aggregate | ||||||||||||||
Shares | Average | Remaining | Intrinsic | ||||||||||||||
Exercise | Contractual | Value | |||||||||||||||
Price | Life | (in thousands) | |||||||||||||||
Outstanding at January 1, 2011 | 1,349,261 | $ | 9.75 | 7.0-years | |||||||||||||
Granted | 450,000 | $ | 6.82 | ||||||||||||||
Exercised | (9,064 | ) | $ | (2.42 | ) | $ | 36 | ||||||||||
Forfeited or canceled | (88,125 | ) | $ | (8.89 | ) | ||||||||||||
| | | | | | | | | | | | | |||||
Balance, December 31, 2011 | 1,702,072 | $ | 9.06 | 6.8-years | |||||||||||||
Granted | 302,000 | $ | 5.5 | ||||||||||||||
Exercised | (28,708 | ) | $ | (3.05 | ) | $ | 114 | ||||||||||
Forfeited or canceled | (149,250 | ) | $ | (7.20 | ) | ||||||||||||
| | | | | | | | | | | | | |||||
Balance, December 31, 2012 | 1,826,114 | $ | 8.72 | 6.1-years | $ | 4,754 | |||||||||||
Granted | 452,000 | $ | 9.03 | ||||||||||||||
Exercised | (642,514 | ) | $ | (6.50 | ) | $ | 6,983 | ||||||||||
Forfeited or canceled | (401,833 | ) | $ | (6.79 | ) | ||||||||||||
| | | | | | | | | | | | | |||||
Balance, December 31, 2013 | 1,233,767 | $ | 10.61 | 6.3-years | $ | 7,992 | |||||||||||
| | | | | | | | | | | | | |||||
| | | | | | | | | | | | | |||||
Exercisable at December 31, 2013 | 541,142 | $ | 14.22 | 2.6-years | $ | 2,224 | |||||||||||
| | | | | | | | | | | | | |||||
| | | | | | | | | | | | | |||||
Summary of stock options outstanding by price range | ' | ||||||||||||||||
Options Outstanding | Options Exercisable | ||||||||||||||||
Range of Exercise Prices | Number | Weighted-Average | Weighted-Average | Number | Weighted-Average | ||||||||||||
Outstanding | Remaining | Exercise | Outstanding | Exercise Price | |||||||||||||
Contractual Life | Price | ||||||||||||||||
(in years) | |||||||||||||||||
$ 0.01 to $ 1.00 | 18,201 | 1.4 | $ | 0.4 | 18,201 | $ | 0.4 | ||||||||||
1.01 to 5.00 | 2,500 | 8.2 | 4.78 | 625 | 4.78 | ||||||||||||
5.01 to 6.75 | 233,377 | 7.9 | 5.36 | 44,127 | 5.73 | ||||||||||||
6.76 to 7.50 | 180,064 | 6.4 | 7.06 | 72,564 | 6.98 | ||||||||||||
7.51 to 8.50 | 327,750 | 8.2 | 7.75 | 65,125 | 7.74 | ||||||||||||
8.51 to 12.25 | 114,875 | 7.6 | 10.5 | 36,500 | 11.93 | ||||||||||||
12.26 to 15.00 | 74,500 | 6.4 | 13.67 | 44,500 | 13.4 | ||||||||||||
15.01 to 17.50 | 24,000 | 4.4 | 17.04 | 21,000 | 17.1 | ||||||||||||
17.51 to 20.00 | 140,500 | 4 | 18.52 | 120,500 | 18.6 | ||||||||||||
$20.01 to $23.62 | 118,00 | 0.6 | 23.62 | 118,000 | 23.62 | ||||||||||||
| | | | | | | | | | | | | | | | | |
1,233,767 | 6.3 | $ | 10.62 | 541,142 | 14.22 | ||||||||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Schedule of share-based compensation expense | ' | ||||||||||||||||
Year Ended | |||||||||||||||||
December 31, | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
(000s) | (000s) | (000s) | |||||||||||||||
Research and development | 335 | 283 | 432 | ||||||||||||||
Selling, general and administrative | 248 | 209 | 462 | ||||||||||||||
Discontinued operations | 658 | 598 | 790 | ||||||||||||||
| | | | | | | | | | | |||||||
Total | 1,241 | 1,090 | 1,684 | ||||||||||||||
| | | | | | | | | | | |||||||
| | | | | | | | | | | |||||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Income Taxes | ' | ||||||||||
Schedule of effective tax rate benefit (expense) that varies from the U.S. Federal Statutory tax rate | ' | ||||||||||
2013 | 2012 | 2011 | |||||||||
U.S. Federal Statutory tax rate | 35 | % | 35 | % | 35 | % | |||||
State taxes, net of federal benefits | 7 | 0 | 3.7 | ||||||||
Permanent differences | 10.7 | (5.6 | ) | (10.6 | ) | ||||||
Change in valuation allowance | — | (29.4 | ) | (20.4 | ) | ||||||
Other | 2.1 | 0.6 | (0.4 | ) | |||||||
| | | | | | | | | | | |
Effective tax rate | 54.8 | % | 0.6 | % | 7.3 | % | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Schedule of components of net deferred tax assets and liabilities | ' | ||||||||||
2013 | 2012 | ||||||||||
$0 | $0 | ||||||||||
Deferred Tax Assets: | |||||||||||
Credits | $ | 76,023 | $ | 76,491 | |||||||
Net Operating loss carry-forward | 0 | 9,243 | |||||||||
Stock options—NQSO | 1,689 | 1,638 | |||||||||
Fixed assets | 811 | 798 | |||||||||
Accrued Expenses | 101 | 57 | |||||||||
Allowance for doubtful accounts | 31 | 10 | |||||||||
Contribution carry-forward | — | 5 | |||||||||
78,655 | 88,243 | ||||||||||
Valuation allowance | (72,601 | ) | (88,243 | ) | |||||||
Net deferred tax assets | $ | 6,054 | $ | — | |||||||
Deferred Tax Liabilities: | |||||||||||
Gain on installment sale | $ | (6,054 | ) | $ | — | ||||||
| | | | | | | | ||||
| | | | | | | | ||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Commitments and Contingencies | ' | ||||
Schedule of future minimum lease payments due under the operating lease | ' | ||||
Columbia | |||||
Facility | |||||
$0 | |||||
2014 | $ | 1,165 | |||
2015 | 1,194 | ||||
2016 | 709 | ||||
| | | | | |
$ | 3,068 | ||||
| | | | | |
| | | | | |
Fair_Value_Tables
Fair Value (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Fair Value | ' | |||||||||||||
Schedule of significant inputs used to measure fair value using Black-Scholes valuation method | ' | |||||||||||||
Fair value of underlying Mesoblast stock: $15,000,000 | ||||||||||||||
Contractual life: 1.0 year | ||||||||||||||
Volatility: 40% | ||||||||||||||
Risk-free interest rate: 0.13% | ||||||||||||||
Expected dividends: $0 | ||||||||||||||
Schedule of rollforward of the fair value of Level 3 instruments, comprised solely of the limited price protection derivative related to the Mesoblast stock issued to entity in connection with the sale of entity's former Therapeutics business | ' | |||||||||||||
December 31, | ||||||||||||||
2013 | ||||||||||||||
($000s) | ||||||||||||||
Balance at beginning of period | $ | — | ||||||||||||
Fair value upon receipt of Mesoblast stock | 1,737 | |||||||||||||
Change in Fair Value | (52 | ) | ||||||||||||
| | | | | ||||||||||
Balance at end of period | $ | 1,685 | ||||||||||||
| | | | | ||||||||||
| | | | | ||||||||||
Schedule of assets and liabilities measured at fair value on a recurring basis | ' | |||||||||||||
December 31, 2013 | ||||||||||||||
($000s) | ||||||||||||||
Level I | Level II | Level III | Total | |||||||||||
Assets | ||||||||||||||
Investments available for sale | ||||||||||||||
Cash & Cash Equivalents | $ | 655 | $ | — | $ | — | $ | 655 | ||||||
Investments: Available for Sale Securities | ||||||||||||||
Government Obligations | $ | — | $ | 9,244 | $ | — | $ | 9,244 | ||||||
Mutual Funds | — | 4,076 | — | 4,076 | ||||||||||
Agency Obligations | $ | — | $ | 6,675 | $ | — | $ | 6,675 | ||||||
Corporate Debt Securities & Commercial Paper | — | 6,367 | — | 6,367 | ||||||||||
Municipal Securities | $ | — | $ | 12,491 | $ | — | $ | 12,491 | ||||||
| | | | | | | | | | | | | | |
Investments available for sale | $ | 655 | $ | 38,853 | $ | — | $ | 39,508 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Derivative and securities received in business disposition | ||||||||||||||
Restricted shares of Mesoblast common stock | $ | 15,401 | $ | — | $ | — | $ | 15,401 | ||||||
Price protection on restricted Mesoblast shares | — | — | 1,685 | 1,685 | ||||||||||
| | | | | | | | | | | | | | |
Derivative and securities received in business disposition | $ | — | $ | — | $ | 1,685 | $ | 17,086 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Total assets | $ | 16,056 | $ | 38,853 | $ | 1,685 | $ | 56,594 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
December 31, 2012 | ||||||||||||||
($000s) | ||||||||||||||
Level I | Level II | Level III | Total | |||||||||||
Assets | ||||||||||||||
Money market funds and certificates of deposit | $ | 2,478 | $ | — | $ | — | $ | 2,478 | ||||||
U.S. and international government agencies | — | 200 | — | 200 | ||||||||||
Agency obligations | — | 14,856 | — | 14,856 | ||||||||||
Corporate debt securities & commercial paper | — | 4,937 | — | 4,937 | ||||||||||
Municipal securities | — | 9,767 | — | 9,767 | ||||||||||
| | | | | | | | | | | | | | |
Investments available for sale | $ | 2,478 | $ | 29,760 | $ | — | $ | 32,238 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Quarterly_Financial_Data_Unaud1
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Quarterly Financial Data (Unaudited) | ' | |||||||||||||
Schedule of unaudited quarterly results | ' | |||||||||||||
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | |||||||||||
(000s) | (000s) | (000s) | (000s) | |||||||||||
2013 | ||||||||||||||
Product revenues | $ | 4,055 | $ | 5,291 | $ | 6,882 | $ | 8,080 | ||||||
Gross profit | 2,920 | 3,810 | 5,024 | 5,898 | ||||||||||
Research and development expenses | 957 | 1,132 | 913 | 1,950 | ||||||||||
Selling, general and administrative expenses and fees | 2,646 | 4,157 | 4,602 | 4,128 | ||||||||||
Income (loss) from continuing operations | (654 | ) | (1,454 | ) | (466 | ) | 1,481 | |||||||
(Loss) income from discontinued operations | (2,081 | ) | (2,302 | ) | (1,211 | ) | 48,325 | |||||||
Net (loss) income | (2,735 | ) | (3,756 | ) | (1,677 | ) | 49,806 | |||||||
**Loss from continuing operations per share, basic | $ | (0.02 | ) | $ | (0.04 | ) | $ | (0.01 | ) | $ | 0.03 | |||
**Loss from continuing operations per share, basic diluted | (0.02 | ) | (0.04 | ) | (0.01 | ) | 0.03 | |||||||
**(Loss) income from discontinued operations per share, basic | $ | (0.06 | ) | $ | (0.07 | ) | $ | (0.04 | ) | $ | 1.46 | |||
**(Loss) income from discontinued operations per share, diluted | (0.06 | ) | (0.07 | ) | (0.04 | ) | 1.43 | |||||||
**Net (loss) income per share, basic | $ | (0.08 | ) | $ | (0.11 | ) | $ | (0.05 | ) | $ | 1.49 | |||
**Net (loss) income per share, diluted | (0.08 | ) | (0.11 | ) | (0.05 | ) | 1.46 | |||||||
2012 | ||||||||||||||
Product revenues | $ | 1,137 | $ | 1,626 | $ | 2,151 | $ | 2,935 | ||||||
Gross profit | 750 | 1,074 | 1,419 | 2,055 | ||||||||||
Research and development expenses | 1,454 | 1,434 | 1,413 | 1,200 | ||||||||||
Selling, general and administrative expenses and fees | 1,353 | 1,253 | 1,369 | 1,655 | ||||||||||
Loss from continuing operations | (2,039 | ) | (1,560 | ) | (1,345 | ) | (803 | ) | ||||||
Income (loss) from discontinued operations | 767 | (2,705 | ) | (1,569 | ) | (1,811 | ) | |||||||
Net loss | (1,272 | ) | (4,265 | ) | (2,914 | ) | (2,614 | ) | ||||||
**Loss from continuing operations per share, basic and diluted | $ | (0.06 | ) | $ | (0.05 | ) | $ | (0.04 | ) | $ | (0.02 | ) | ||
**Income (loss) from discontinued operations per share, basic and dilute | $ | 0.02 | $ | (0.08 | ) | $ | (0.05 | ) | $ | (0.05 | ) | |||
**Net loss per share, basic and diluted | $ | (0.04 | ) | $ | (0.13 | ) | $ | (0.09 | ) | $ | (0.07 | ) | ||
** | ||||||||||||||
(Loss) income per share is calculated on a quarterly basis and may not be additive to year-to-date amounts. | ||||||||||||||
Description_of_Business_and_Si2
Description of Business and Significant Accounting Policies (Details) (USD $) | 12 Months Ended | 48 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | |
item | ||||
Description of Business and Significant Accounting Policies | ' | ' | ' | ' |
Number of business segments | ' | ' | ' | 2 |
Trade Accounts Receivable | ' | ' | ' | ' |
Typical trade accounts receivable due period | '45 days | ' | ' | ' |
Allowance for doubtful accounts related to accounts receivable | $78,000 | $25,000 | ' | $78,000 |
Trade Accounts Receivable | ' | ' | ' | ' |
Provision for bad debts | 80,000 | 22,000 | 3,000 | ' |
Biosurgery segment | ' | ' | ' | ' |
Trade Accounts Receivable | ' | ' | ' | ' |
Provision for bad debts | $95,000 | $22,000 | $3,000 | ' |
Description_of_Business_and_Si3
Description of Business and Significant Accounting Policies (Details 2) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Valuation of Long-lived Assets | ' | ' | ' |
Impairment losses | $0 | $0 | $0 |
Income Taxes | ' | ' | ' |
Accruals for interest or penalties related to income tax matters | $0 | $0 | ' |
Minimum | ' | ' | ' |
Property and Equipment | ' | ' | ' |
Estimated useful lives | '3 years | ' | ' |
Maximum | ' | ' | ' |
Property and Equipment | ' | ' | ' |
Estimated useful lives | '7 years | ' | ' |
Description_of_Business_and_Si4
Description of Business and Significant Accounting Policies (Details 3) (Purchase Agreement with Mesoblast) | 0 Months Ended | 12 Months Ended | |
Dec. 31, 2013 | Oct. 10, 2013 | Dec. 31, 2013 | |
Derivative and Securities Received in Business Disposition | ' | ' | ' |
Holding period for any payments made in ordinary shares | ' | '1 year | ' |
Holding period of stock subject to limited price protection | '1 year | ' | ' |
Aggregate compensation to be received for decrease in value of shares payable in cash (as a percent) | ' | ' | 50.00% |
Aggregate compensation to be received for decrease in value of shares (as a percent) | ' | ' | 50.00% |
Therapeutics segment | ' | ' | ' |
Derivative and Securities Received in Business Disposition | ' | ' | ' |
Holding period for any payments made in ordinary shares | ' | '1 year | ' |
Description_of_Business_and_Si5
Description of Business and Significant Accounting Policies (Details 4) (Genzyme Corporation, USD $) | 1 Months Ended |
In Millions, unless otherwise specified | Oct. 31, 2008 |
Genzyme Corporation | ' |
Revenue Recognition | ' |
Non-contingent, non-refundable cash payments | $130 |
Description_of_Business_and_Si6
Description of Business and Significant Accounting Policies (Details 5) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Warrant | ' | ' | ' |
Income per Common Share | ' | ' | ' |
Anti-dilutive securities not included in diluted income (loss) per common share | ' | 1,000,000 | 1,000,000 |
Stock options | ' | ' | ' |
Income per Common Share | ' | ' | ' |
Anti-dilutive securities not included in diluted income (loss) per common share | 1,233,767 | 1,826,114 | 1,311,686 |
Description_of_Business_and_Si7
Description of Business and Significant Accounting Policies (Details 6) (Distributors) | 12 Months Ended |
Dec. 31, 2013 | |
Receivables | ' |
Concentration of Risk | ' |
Concentration of risk (as a percent) | 6.00% |
Revenue | Biosurgery segment | ' |
Concentration of Risk | ' |
Number of significant distributors | 1 |
Concentration of risk (as a percent) | 50.00% |
Discontinued_Operations_Detail
Discontinued Operations (Details) (USD $) | 12 Months Ended | 0 Months Ended | 0 Months Ended | 12 Months Ended | |||||||||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Oct. 10, 2013 | Dec. 31, 2013 | Oct. 10, 2013 | Dec. 31, 2013 | Dec. 18, 2013 | Oct. 10, 2013 | Oct. 10, 2013 | Oct. 10, 2013 | Oct. 10, 2013 | Oct. 10, 2013 | Oct. 10, 2013 | Oct. 10, 2013 | Oct. 10, 2013 | |
Therapeutics segment | Therapeutics segment | Therapeutics segment | Purchase Agreement with Mesoblast | Purchase Agreement with Mesoblast | Purchase Agreement with Mesoblast | Purchase Agreement with Mesoblast | Purchase Agreement with Mesoblast | Purchase Agreement with Mesoblast | Purchase Agreement with Mesoblast | Purchase Agreement with Mesoblast | Purchase Agreement with Mesoblast | Purchase Agreement with Mesoblast | Purchase Agreement with Mesoblast | Purchase Agreement with Mesoblast | Purchase Agreement with Mesoblast | ||||
Hedging instrument | Therapeutics segment | Therapeutics segment | Therapeutics segment | Letter of intent payments | Initial closing payment | Additional closing payment, 6 months after closing date | Delivery of all scheduled assets under the Transfer Agreement | First marketing authorization received in the U.S. | First marketing authorization received from France, Germany, or European Union | Completion of the enrollment of the Phase 3 Crohn's Trial or Mesoblast's election to discontinue the trial | Receipt of final data for the Crohn's trial or first marketing approval for Crohn's | ||||||||
Therapeutics segment | Therapeutics segment | Therapeutics segment | Therapeutics segment | Therapeutics segment | Therapeutics segment | Therapeutics segment | Therapeutics segment | ||||||||||||
Initial consideration and contingent additional payments provided under Purchase Agreement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Initial consideration | ' | ' | ' | ' | ' | ' | ' | ' | $50,000,000 | ' | ' | $3,500,000 | $16,500,000 | $15,000,000 | $15,000,000 | ' | ' | ' | ' |
Contingent Consideration | ' | ' | ' | ' | ' | ' | ' | ' | 50,000,000 | ' | ' | ' | ' | ' | ' | 20,000,000 | 10,000,000 | 10,000,000 | 10,000,000 |
Total possible purchase price | ' | ' | ' | ' | ' | ' | ' | ' | 100,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total initial consideration paid in cash | ' | ' | ' | ' | ' | ' | ' | ' | 20,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Initial consideration paid in ordinary shares | ' | ' | ' | ' | ' | ' | ' | ' | -15,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Holding period for any payments made in ordinary shares | ' | ' | ' | ' | ' | ' | '1 year | ' | '1 year | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair value of derivative instruments | ' | ' | ' | ' | ' | ' | ' | 1,700,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Consideration in cash | 19,419,000 | ' | ' | ' | ' | ' | ' | ' | ' | 20,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Consideration in restricted stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 15,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Initial consideration payable in cash | ' | ' | ' | ' | ' | ' | ' | ' | ' | 15,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Gain on sale of discontinued operations | 49,399,000 | ' | ' | 49,400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Transaction costs | ' | ' | ' | ' | ' | ' | ' | ' | ' | 600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Income tax expense related to gain from sale of discontinued operation | 1,705,000 | ' | ' | ' | ' | ' | ' | ' | ' | 1,700,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Current assets: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accounts Receivable | ' | ' | ' | 91,000 | 204,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Current liabilities: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accounts payable and accrued expenses | ' | ' | ' | 57,000 | 2,903,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Contingent milestone payments received | ' | ' | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Royalty revenue | 215,000 | 305,000 | 65,000 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Summarized operating results | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenue from collaborative research agreements and royalties | ' | ' | ' | 639,000 | 3,955,000 | 41,140,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Operating expenses: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Research and development | ' | ' | ' | 6,426,000 | 8,607,000 | 14,816,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Selling, general and administrative | ' | ' | ' | 881,000 | 666,000 | 712,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total operating expenses | ' | ' | ' | 7,307,000 | 9,273,000 | 15,528,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
(Loss) income from discontinued operations before income tax expense | ' | ' | ' | -6,668,000 | -5,318,000 | 25,612,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Income tax expense | ' | ' | -818,000 | ' | ' | -818,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
(Loss) income from discontinued operations | -6,668,000 | -5,318,000 | 24,794,000 | -6,668,000 | -5,318,000 | 24,794,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cost of reimbursement | $424,000 | $296,000 | $115,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Segment_Reporting_Details
Segment Reporting (Details) | 12 Months Ended |
Dec. 31, 2013 | |
item | |
Segment Reporting | ' |
Number of operating segments historically managed by the entity | 2 |
Number of operating segments | 1 |
Property_and_Equipment_Details
Property and Equipment (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Property and Equipment | ' | ' |
Property and equipment, gross | $6,050 | $5,521 |
Accumulated depreciation and amortization | -4,154 | -3,410 |
Property and equipment, net | 1,896 | 2,111 |
Laboratory and manufacturing equipment | ' | ' |
Property and Equipment | ' | ' |
Property and equipment, gross | 663 | 492 |
Computer hardware, furniture and fixtures | ' | ' |
Property and Equipment | ' | ' |
Property and equipment, gross | 899 | 567 |
Leased assets | ' | ' |
Property and Equipment | ' | ' |
Property and equipment, gross | 228 | 228 |
Leasehold improvements | ' | ' |
Property and Equipment | ' | ' |
Property and equipment, gross | $4,260 | $4,234 |
Inventory_Details
Inventory (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Inventory | ' | ' |
Total Biosurgery inventory | $1,929 | $1,278 |
Biosurgery segment | ' | ' |
Inventory | ' | ' |
Raw materials and supplies | 387 | 284 |
Work-in-process | 22 | 135 |
Finished goods | 1,520 | 859 |
Total Biosurgery inventory | $1,929 | $1,278 |
Capital_Lease_Details
Capital Lease (Details) (USD $) | 1 Months Ended | ||
Jul. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | |
Capital Lease | ' | ' | ' |
Effective interest rate (as a percent) | 5.00% | ' | ' |
Term of lease | '60 months | ' | ' |
Amount of monthly payments of capital lease | $4,000 | ' | ' |
Future minimum lease payments under the capital lease agreement | ' | ' | ' |
2014 | ' | 48,000 | ' |
2015 | ' | 48,000 | ' |
2016 | ' | 48,000 | ' |
2017 | ' | 24,000 | ' |
Total | ' | 168,000 | ' |
Less: Amount representing interest | ' | -6,000 | ' |
Present value of minimum lease payments | ' | 162,000 | ' |
Less: Current portion of capital lease obligations | ' | -45,000 | -44,000 |
Long-term portion of capital lease obligations | ' | $117,000 | ' |
ShareBased_Compensation_Detail
Share-Based Compensation (Details) (USD $) | 12 Months Ended | |||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | |
Assumptions to estimate the fair value of stock options granted | ' | ' | ' | ' |
Proceeds for exercise of options | $2,193,000 | $87,000 | $22,000 | ' |
Stock options | ' | ' | ' | ' |
Share-Based Compensation | ' | ' | ' | ' |
Vesting period | '4 years | ' | ' | ' |
Contractual life | '10 years | ' | ' | ' |
Assumptions to estimate the fair value of stock options granted | ' | ' | ' | ' |
Weighted average risk-free interest rate (as a percent) | ' | 2.00% | 2.00% | ' |
Dividend yield (as a percent) | 0.00% | 0.00% | 0.00% | ' |
Expected life of option grants | ' | ' | '5 years 6 months | ' |
Weighted average expected stock price volatility, minimum (as a percent) | 52.00% | 52.00% | 53.00% | ' |
Weighted average expected stock price volatility, maximum (as a percent) | 61.00% | 54.00% | 55.00% | ' |
Coupon rate on United States government issues used to determine risk-free interest rate (as a percent) | 0.00% | ' | ' | ' |
Proceeds for exercise of options | 2,200,000 | ' | ' | ' |
Total unrecognized compensation costs related to non-vested stock options | 1,300,000 | ' | ' | ' |
Number of Shares | ' | ' | ' | ' |
Outstanding at the beginning of the period (in shares) | 1,826,114 | 1,702,072 | 1,349,261 | ' |
Granted (in shares) | 452,000 | 302,000 | 450,000 | ' |
Exercised (in shares) | -642,514 | -28,708 | -9,064 | ' |
Forfeited or canceled (in shares) | -401,833 | -149,250 | -88,125 | ' |
Outstanding at the end of the period (in shares) | 1,233,767 | 1,826,114 | 1,702,072 | 1,349,261 |
Exercisable at the end of the period (in shares) | 541,142 | ' | ' | ' |
Weighted Average Exercise Price Per Share | ' | ' | ' | ' |
Outstanding at the beginning of the period (in dollars per share) | $8.72 | $9.06 | $9.75 | ' |
Granted (in dollars per share) | $9.03 | $5.50 | $6.82 | ' |
Exercised (in dollars per share) | ($6.50) | ($3.05) | ($2.42) | ' |
Forfeited or canceled (in dollars per share) | ($6.79) | ($7.20) | ($8.89) | ' |
Outstanding at the end of the period (in dollars per share) | $10.61 | $8.72 | $9.06 | $9.75 |
Exercisable at the end of the period (in dollars per share) | $14.22 | ' | ' | ' |
Weighted Average Remaining Term Contractual Life | ' | ' | ' | ' |
Outstanding at the beginning of the period | '6 years 3 months 18 days | '6 years 1 month 6 days | '6 years 9 months 18 days | '7 years |
Outstanding at the end of the period | '6 years 3 months 18 days | '6 years 1 month 6 days | '6 years 9 months 18 days | '7 years |
Exercisable at the end of the period | '2 years 7 months 6 days | ' | ' | ' |
Aggregate Intrinsic Value | ' | ' | ' | ' |
Outstanding at the beginning of the period (in dollars) | 4,754,000 | ' | ' | ' |
Exercised (in dollars) | 6,983,000 | 114,000 | 36,000 | ' |
Outstanding at the end of the period (in dollars) | 7,992,000 | 4,754,000 | ' | ' |
Exercisable at the end of the period (in dollars) | $2,224,000 | ' | ' | ' |
Weighted average fair value of options granted (in dollars per share) | $4.68 | $2.82 | $3.50 | ' |
Stock options | Minimum | ' | ' | ' | ' |
Assumptions to estimate the fair value of stock options granted | ' | ' | ' | ' |
Weighted average risk-free interest rate (as a percent) | 1.00% | ' | ' | ' |
Expected life of option grants | '5 years | '6 years | ' | ' |
Stock options | Maximum | ' | ' | ' | ' |
Assumptions to estimate the fair value of stock options granted | ' | ' | ' | ' |
Weighted average risk-free interest rate (as a percent) | 1.50% | ' | ' | ' |
Expected life of option grants | '6 years 6 months | '6 years 3 months 18 days | ' | ' |
Amended and Restated 2006 Omnibus Plan | ' | ' | ' | ' |
Share-Based Compensation | ' | ' | ' | ' |
Common stock reserved for issuance (in shares) | 2,250,000 | ' | ' | ' |
Shares available for future issuance | 369,781 | ' | ' | ' |
Amended and Restated 1994 Stock Incentive Plan | ' | ' | ' | ' |
Share-Based Compensation | ' | ' | ' | ' |
Common stock reserved for issuance (in shares) | 736,378 | ' | ' | ' |
Shares available for future issuance | 0 | ' | ' | ' |
ShareBased_Compensation_Detail1
Share-Based Compensation (Details 2) (Stock options, USD $) | 12 Months Ended |
Dec. 31, 2013 | |
Options Outstanding | ' |
Number Outstanding (in shares) | 1,233,767 |
Weighted Average Remaining Contractual Life | '6 years 3 months 18 days |
Weighted-Average Exercise Price (in dollars per share) | $10.62 |
Options Exercisable | ' |
Number Exercisable (in shares) | 541,142 |
Weighted-Average Exercise Price (in dollars per share) | $14.22 |
$0.01 to $1.00 | ' |
Outstanding and exercisable options | ' |
Exercise price, lower range limit (in dollars per share) | $0.01 |
Exercise price, upper range limit (in dollars per share) | $1 |
Options Outstanding | ' |
Number Outstanding (in shares) | 18,201 |
Weighted Average Remaining Contractual Life | '1 year 4 months 24 days |
Weighted-Average Exercise Price (in dollars per share) | $0.40 |
Options Exercisable | ' |
Number Exercisable (in shares) | 18,201 |
Weighted-Average Exercise Price (in dollars per share) | $0.40 |
$1.01 to $5.00 | ' |
Outstanding and exercisable options | ' |
Exercise price, lower range limit (in dollars per share) | $1.01 |
Exercise price, upper range limit (in dollars per share) | $5 |
Options Outstanding | ' |
Number Outstanding (in shares) | 2,500 |
Weighted Average Remaining Contractual Life | '8 years 2 months 12 days |
Weighted-Average Exercise Price (in dollars per share) | $4.78 |
Options Exercisable | ' |
Number Exercisable (in shares) | 625 |
Weighted-Average Exercise Price (in dollars per share) | $4.78 |
$5.01 to $6.75 | ' |
Outstanding and exercisable options | ' |
Exercise price, lower range limit (in dollars per share) | $5.01 |
Exercise price, upper range limit (in dollars per share) | $6.75 |
Options Outstanding | ' |
Number Outstanding (in shares) | 233,377 |
Weighted Average Remaining Contractual Life | '7 years 10 months 24 days |
Weighted-Average Exercise Price (in dollars per share) | $5.36 |
Options Exercisable | ' |
Number Exercisable (in shares) | 44,127 |
Weighted-Average Exercise Price (in dollars per share) | $5.73 |
$6.76 to $7.50 | ' |
Outstanding and exercisable options | ' |
Exercise price, lower range limit (in dollars per share) | $6.76 |
Exercise price, upper range limit (in dollars per share) | $7.50 |
Options Outstanding | ' |
Number Outstanding (in shares) | 180,064 |
Weighted Average Remaining Contractual Life | '6 years 4 months 24 days |
Weighted-Average Exercise Price (in dollars per share) | $7.06 |
Options Exercisable | ' |
Number Exercisable (in shares) | 72,564 |
Weighted-Average Exercise Price (in dollars per share) | $6.98 |
$7.51 to $8.50 | ' |
Outstanding and exercisable options | ' |
Exercise price, lower range limit (in dollars per share) | $7.51 |
Exercise price, upper range limit (in dollars per share) | $8.50 |
Options Outstanding | ' |
Number Outstanding (in shares) | 327,750 |
Weighted Average Remaining Contractual Life | '8 years 2 months 12 days |
Weighted-Average Exercise Price (in dollars per share) | $7.75 |
Options Exercisable | ' |
Number Exercisable (in shares) | 65,125 |
Weighted-Average Exercise Price (in dollars per share) | $7.74 |
$8.51 to $12.25 | ' |
Outstanding and exercisable options | ' |
Exercise price, lower range limit (in dollars per share) | $8.51 |
Exercise price, upper range limit (in dollars per share) | $12.25 |
Options Outstanding | ' |
Number Outstanding (in shares) | 114,875 |
Weighted Average Remaining Contractual Life | '7 years 7 months 6 days |
Weighted-Average Exercise Price (in dollars per share) | $10.50 |
Options Exercisable | ' |
Number Exercisable (in shares) | 36,500 |
Weighted-Average Exercise Price (in dollars per share) | $11.93 |
$12.26 to $15.00 | ' |
Outstanding and exercisable options | ' |
Exercise price, lower range limit (in dollars per share) | $12.26 |
Exercise price, upper range limit (in dollars per share) | $15 |
Options Outstanding | ' |
Number Outstanding (in shares) | 74,500 |
Weighted Average Remaining Contractual Life | '6 years 4 months 24 days |
Weighted-Average Exercise Price (in dollars per share) | $13.67 |
Options Exercisable | ' |
Number Exercisable (in shares) | 44,500 |
Weighted-Average Exercise Price (in dollars per share) | $13.40 |
$15.01 to $17.50 | ' |
Outstanding and exercisable options | ' |
Exercise price, lower range limit (in dollars per share) | $15.01 |
Exercise price, upper range limit (in dollars per share) | $17.50 |
Options Outstanding | ' |
Number Outstanding (in shares) | 24,000 |
Weighted Average Remaining Contractual Life | '4 years 4 months 24 days |
Weighted-Average Exercise Price (in dollars per share) | $17.04 |
Options Exercisable | ' |
Number Exercisable (in shares) | 21,000 |
Weighted-Average Exercise Price (in dollars per share) | $17.10 |
$17.51 to $20.00 | ' |
Outstanding and exercisable options | ' |
Exercise price, lower range limit (in dollars per share) | $17.51 |
Exercise price, upper range limit (in dollars per share) | $20 |
Options Outstanding | ' |
Number Outstanding (in shares) | 140,500 |
Weighted Average Remaining Contractual Life | '4 years |
Weighted-Average Exercise Price (in dollars per share) | $18.52 |
Options Exercisable | ' |
Number Exercisable (in shares) | 120,500 |
Weighted-Average Exercise Price (in dollars per share) | $18.60 |
$ 20.01 to $23.62 | ' |
Outstanding and exercisable options | ' |
Exercise price, lower range limit (in dollars per share) | $20.01 |
Exercise price, upper range limit (in dollars per share) | $23.62 |
Options Outstanding | ' |
Number Outstanding (in shares) | 11,800 |
Weighted Average Remaining Contractual Life | '7 months 6 days |
Weighted-Average Exercise Price (in dollars per share) | $23.62 |
Options Exercisable | ' |
Number Exercisable (in shares) | 118,000 |
Weighted-Average Exercise Price (in dollars per share) | $23.62 |
ShareBased_Compensation_Detail2
Share-Based Compensation (Details 3) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Share-based compensation expense | ' | ' | ' |
Discontinued operations | $658 | $598 | $790 |
Stock options | ' | ' | ' |
Share-based compensation expense | ' | ' | ' |
Share-based compensation | 1,241 | 1,090 | 1,684 |
Research and development | Stock options | ' | ' | ' |
Share-based compensation expense | ' | ' | ' |
Share-based compensation | 335 | 283 | 432 |
Selling, general and administrative | Stock options | ' | ' | ' |
Share-based compensation expense | ' | ' | ' |
Share-based compensation | $248 | $209 | $462 |
Related_Party_Transactions_and1
Related Party Transactions and Warrant (Details) (USD $) | 12 Months Ended | 0 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Aug. 14, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | |
Warrant | Warrant | Chairman of Board of Directors | Chairman of Board of Directors | Chairman of Board of Directors | Chairman of Board of Directors | Chairman of Board of Directors | BIH SA | BIH SA | Venturetec, Inc | Venturetec, Inc | ||||
Prolexys Pharmaceuticals, Inc | Warrant | Prolexys Pharmaceuticals, Inc | Prolexys Pharmaceuticals, Inc | |||||||||||
Related Party Transaction and Warrants | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt and equity financing procured by related party | ' | ' | ' | ' | ' | $270,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of beneficial ownership interest held by related party | ' | ' | ' | ' | ' | 43.00% | ' | ' | ' | ' | ' | ' | ' | ' |
Number of shares received by related party as Board compensation since 1996 | ' | ' | ' | ' | ' | 75,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Shares granted in recognition of fundraising efforts by related party | ' | ' | ' | ' | ' | 12,500 | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of common stock on exercise of warrants (in shares) | ' | ' | ' | 567,610 | ' | ' | ' | ' | ' | 567,610 | ' | ' | ' | ' |
Number of shares of common stock that can be purchased through outstanding warrant | ' | ' | ' | ' | 1,000,000 | ' | ' | ' | ' | 1,000,000 | ' | ' | ' | ' |
Exercise price (in dollars per share) | ' | ' | ' | ' | $11 | ' | ' | ' | ' | $11 | ' | ' | ' | ' |
Shares issued to related party for servicing as Board of Director | ' | ' | ' | ' | ' | 10,000 | 10,000 | 10,000 | ' | ' | ' | ' | ' | ' |
Value of shares issued to related party for servicing as Board of Director | 180,000 | 127,000 | 178,000 | ' | ' | 77,000 | 51,000 | 71,000 | ' | ' | ' | ' | ' | ' |
Non-cash charge against earnings on account of the extension of the warrant expiration date | ' | ' | $1,740,000 | ' | ' | $1,700,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Risk free interest rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.50% | ' | ' | ' | ' |
Expected life | ' | ' | ' | ' | ' | ' | ' | ' | ' | '4 years | ' | ' | ' | ' |
Historical volatility (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | 51.00% | ' | ' | ' | ' |
Percentage of ownership interest held by related party in research agreement counterparty | ' | ' | ' | ' | ' | ' | ' | ' | 24.30% | ' | ' | 35.70% | ' | 13.80% |
Ownership percentage held in entity by related party | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7.80% | ' | 12.50% | ' |
Direct ownership percentage held in entity by related party | ' | ' | ' | ' | ' | 29.30% | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of ownership interest held by related party in another related party with ownership interest in research agreement counterparty | ' | ' | ' | ' | ' | ' | ' | ' | 2.00% | ' | ' | ' | ' | ' |
Additional percentage of ownership interest in counterparty to agreement which will be acquired by related party upon conversion of convertible bond | ' | ' | ' | ' | ' | ' | ' | ' | 19.00% | ' | ' | ' | ' | ' |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 12 Months Ended | ||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2011 | Dec. 31, 2010 | |
Genzyme Corporation | Genzyme Corporation | ||||
Revenue Recognition | ' | ' | ' | ' | ' |
Revenue recognized from collaboration agreement for tax purposes | ' | ' | ' | ' | $130,000,000 |
Revenue recognized from collaboration agreement for financial reporting purposes | ' | ' | ' | 40,000,000 | ' |
Income tax benefit from continuing operations | -1,326,000 | -37,000 | -775,000 | ' | ' |
Income tax expense, which was offset against the income from discontinued operations | ' | ' | 818,000 | ' | ' |
Amount of taxes recoverable from a prior period included in tax benefits | 79,000 | ' | ' | ' | ' |
Alternative minimum tax | 388,000 | ' | ' | ' | ' |
Interest accrued included in gain from sale of discontinued operations | 70,000 | ' | ' | ' | ' |
Period during which amount of orphan drug credit and non-cash share based compensation claimed | '2 years | ' | ' | ' | ' |
Effective tax rate varies from the U.S. Federal Statutory tax rate | ' | ' | ' | ' | ' |
U.S. Federal Statutory tax rate (as a percent) | 35.00% | 35.00% | 35.00% | ' | ' |
State taxes, net of federal benefits (as a percent) | 7.00% | 0.00% | 3.70% | ' | ' |
Permanent differences (as a percent) | 10.70% | -5.60% | -10.60% | ' | ' |
Change in valuation allowance (as a percent) | ' | -29.40% | -20.40% | ' | ' |
Other (as a percent) | 2.10% | 0.60% | -0.40% | ' | ' |
Effective tax rate (as a percent) | 54.80% | 0.60% | 7.30% | ' | ' |
Deferred Tax Assets: | ' | ' | ' | ' | ' |
Credits | 76,023,000 | 76,491,000 | ' | ' | ' |
Net operating loss carry-forwards | 0 | 9,243,000 | ' | ' | ' |
Stock options - NQSO | 1,689,000 | 1,638,000 | ' | ' | ' |
Fixed assets | 811,000 | 798,000 | ' | ' | ' |
Accrued Expenses | 101,000 | 57,000 | ' | ' | ' |
Allowance for doubtful accounts | 31,000 | 10,000 | ' | ' | ' |
Contribution carry-forward | ' | 5,000 | ' | ' | ' |
Deferred tax assets gross | 78,655,000 | 88,243,000 | ' | ' | ' |
Valuation allowance | -72,601,000 | -88,243,000 | ' | ' | ' |
Net deferred tax assets | 6,054,000 | ' | ' | ' | ' |
Deferred Tax Liabilities: | ' | ' | ' | ' | ' |
Gain on installment sale | 6,054,000 | ' | ' | ' | ' |
Net operating loss carryforwards | 3,500,000 | ' | ' | ' | ' |
Amount of windfall stock compensation deductions | 5,400,000 | ' | ' | ' | ' |
Accruals for interest or penalties related to income tax matters | $0 | $0 | ' | ' | ' |
Income_Taxes_Details_2
Income Taxes (Details 2) (USD $) | Dec. 31, 2013 |
In Millions, unless otherwise specified | |
General business credit carry-forwards | ' |
Tax credit carryforwards | ' |
Tax credit amount | $74.60 |
Alternative minimum tax credit | ' |
Tax credit carryforwards | ' |
Tax credit amount | $2.10 |
Defined_Contribution_Plan_Deta
Defined Contribution Plan (Details) (USD $) | 12 Months Ended |
Dec. 31, 2013 | |
Defined Contribution Plan | ' |
Vesting period | '7 years |
Eligibility period for commencement of vesting | '3 years |
Employer contributions to date | $0 |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | Dec. 31, 2013 | Jul. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Jul. 02, 2013 | Jul. 02, 2012 | Jul. 01, 2011 | Dec. 31, 2009 | Dec. 31, 2006 |
item | Columbia Facility | Columbia Facility | Columbia Facility | Columbia Facility | Columbia Facility | Columbia Facility | Columbia Facility | Columbia Facility | ||
sqft | ||||||||||
Contract Research Organizations | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of active contracts with CRO | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total contracted payments to CROs under the agreements | $3,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total contracted payments incurred as of the balance sheet date | 3,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Operating lease | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Area of property leased (in square feet) | ' | ' | ' | ' | ' | ' | ' | ' | ' | 61,000 |
Letter of credit outstanding in lieu of security deposit | ' | ' | 223,000 | ' | ' | ' | ' | ' | 591,000 | ' |
Security deposit required under lease agreement | ' | ' | ' | ' | ' | 223,000 | 298,000 | 372,000 | ' | ' |
Future minimum lease payments due under the operating lease | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2014 | ' | ' | 1,165,000 | ' | ' | ' | ' | ' | ' | ' |
2015 | ' | ' | 1,194,000 | ' | ' | ' | ' | ' | ' | ' |
2016 | ' | ' | 709,000 | ' | ' | ' | ' | ' | ' | ' |
Future minimum lease payments due | ' | ' | 3,068,000 | ' | ' | ' | ' | ' | ' | ' |
Lease expenses | ' | ' | 1,300,000 | 1,300,000 | 1,200,000 | ' | ' | ' | ' | ' |
Capital leases | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Equipment under lease agreement | ' | 228,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Accumulated depreciation of equipment acquired under capital lease | $68,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Derivative_and_Securities_Rece1
Derivative and Securities Received in Business Disposition (Details) (Purchase Agreement with Mesoblast, USD $) | 0 Months Ended | 12 Months Ended | 0 Months Ended | 0 Months Ended | 3 Months Ended | ||||
Dec. 31, 2013 | Oct. 10, 2013 | Dec. 31, 2013 | Oct. 10, 2013 | Dec. 31, 2013 | Dec. 18, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | |
Therapeutics segment | Therapeutics segment | Therapeutics segment | Hedging instrument | Hedging instrument | Hedging instrument | ||||
Therapeutics segment | Therapeutics segment | ||||||||
Derivative instruments | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Initial consideration payable either in cash or ordinary shares | ' | $15,000,000 | ' | ' | ' | ' | ' | ' | ' |
Holding period for any payments made in ordinary shares | ' | '1 year | ' | '1 year | ' | ' | ' | ' | ' |
Aggregate compensation to be received for decrease in value of shares (as a percent) | ' | ' | 50.00% | ' | ' | ' | ' | ' | ' |
Aggregate compensation to be received for decrease in value of shares payable in cash (as a percent) | ' | ' | 50.00% | ' | ' | ' | ' | ' | ' |
Aggregate compensation to be received for decrease in value of shares payable in cash or ordinary shares (as a percent) | ' | ' | 100.00% | ' | ' | ' | ' | ' | ' |
Fair value of derivative instruments | ' | ' | ' | ' | ' | ' | 1,700,000 | ' | ' |
Loss on derivative instruments | ' | ' | ' | ' | ' | ' | ' | ' | 52,000 |
Holding period of stock subject to limited price protection | '1 year | ' | ' | ' | ' | ' | ' | '1 year | ' |
Fair value of the shares received from discontinued operations | ' | ' | ' | ' | 15,400,000 | 15,000,000 | ' | ' | ' |
Gain from shares received from discontinued operations | $401,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Fair_Value_Details
Fair Value (Details) (USD $) | 12 Months Ended |
Dec. 31, 2013 | |
Fair Value | ' |
Transfers between level 1 and level 2 | $0 |
Transfers between level 2 and level 1 | 0 |
Other transfers in and out of Level 3 | ' |
Other transfers in Level 3 | 0 |
Other transfers out of Level 3 | 0 |
Price protection on restricted Mesoblast shares | ' |
Rollforward of the fair value of Level 3 instruments | ' |
Fair value upon receipt of Mesoblast stock | 1,737,000 |
Change in Fair Value | -52,000 |
Balance at end of period | 1,685,000 |
Recurring | Level III | ' |
Significant inputs | ' |
Fair value | 1,685,000 |
Recurring | Price protection on restricted Mesoblast shares | Level III | ' |
Significant inputs | ' |
Fair value | $15,000,000 |
Contractual life | '1 year |
Volatility (as a percent) | 40.00% |
Risk free interest rate (as a percent) | 0.13% |
Expected dividends | $0 |
Fair_Value_Details_2
Fair Value (Details 2) (Recurring, USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Level I | ' | ' |
Assets | ' | ' |
Investments available for sale | $655 | $2,478 |
Total assets | 16,056 | ' |
Level II | ' | ' |
Assets | ' | ' |
Investments available for sale | 38,853 | 29,760 |
Total assets | 38,853 | ' |
Level III | ' | ' |
Assets | ' | ' |
Total assets | 1,685 | ' |
Derivative instruments | 1,685 | ' |
Total | ' | ' |
Assets | ' | ' |
Investments available for sale | 39,508 | 32,238 |
Derivative and securities received in business disposition | 17,086 | ' |
Total assets | 56,594 | ' |
Cash equivalents | Level I | ' | ' |
Assets | ' | ' |
Investments available for sale | 655 | ' |
Cash equivalents | Total | ' | ' |
Assets | ' | ' |
Investments available for sale | 655 | ' |
Government Obligations | Level II | ' | ' |
Assets | ' | ' |
Investments available for sale | 9,244 | ' |
Government Obligations | Total | ' | ' |
Assets | ' | ' |
Investments available for sale | 9,244 | ' |
Mutual Funds | Level II | ' | ' |
Assets | ' | ' |
Investments available for sale | 4,076 | ' |
Mutual Funds | Total | ' | ' |
Assets | ' | ' |
Investments available for sale | 4,076 | ' |
Agency Obligations | Level II | ' | ' |
Assets | ' | ' |
Investments available for sale | 6,675 | 14,856 |
Agency Obligations | Total | ' | ' |
Assets | ' | ' |
Investments available for sale | 6,675 | 14,856 |
Corporate debt securities & commercial paper | Level II | ' | ' |
Assets | ' | ' |
Investments available for sale | 6,367 | 4,937 |
Corporate debt securities & commercial paper | Total | ' | ' |
Assets | ' | ' |
Investments available for sale | 6,367 | 4,937 |
Municipal Securities | Level II | ' | ' |
Assets | ' | ' |
Investments available for sale | 12,491 | 9,767 |
Municipal Securities | Total | ' | ' |
Assets | ' | ' |
Investments available for sale | 12,491 | 9,767 |
Money market funds and certificates of deposit | Level I | ' | ' |
Assets | ' | ' |
Investments available for sale | ' | 2,478 |
Money market funds and certificates of deposit | Total | ' | ' |
Assets | ' | ' |
Investments available for sale | ' | 2,478 |
US and International government agencies | Level II | ' | ' |
Assets | ' | ' |
Investments available for sale | ' | 200 |
US and International government agencies | Total | ' | ' |
Assets | ' | ' |
Investments available for sale | ' | 200 |
Restricted shares of Mesoblast common stock | Level I | ' | ' |
Assets | ' | ' |
Fair value of securities | 15,401 | ' |
Restricted shares of Mesoblast common stock | Total | ' | ' |
Assets | ' | ' |
Fair value of securities | 15,401 | ' |
Price protection on restricted Mesoblast shares | Level III | ' | ' |
Assets | ' | ' |
Derivative instruments | 15,000 | ' |
Price protection on restricted Mesoblast shares | Level III | Hedging instrument | ' | ' |
Assets | ' | ' |
Derivative instruments | 1,685 | ' |
Price protection on restricted Mesoblast shares | Total | Hedging instrument | ' | ' |
Assets | ' | ' |
Derivative instruments | $1,685 | ' |
Quarterly_Financial_Data_Unaud2
Quarterly Financial Data (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 Data (Unaudited) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Product revenues | $8,080 | $6,882 | $5,291 | $4,055 | $2,935 | $2,151 | $1,626 | $1,137 | ' | ' | ' |
Gross profit | 5,898 | 5,024 | 3,810 | 2,920 | 2,055 | 1,419 | 1,074 | 750 | 17,652 | 5,298 | 732 |
Research and development expenses | 1,950 | 913 | 1,132 | 957 | 1,200 | 1,413 | 1,434 | 1,454 | 4,952 | 5,501 | 4,340 |
Selling General and administrative expenses and fees | 4,128 | 4,602 | 4,157 | 2,646 | 1,655 | 1,369 | 1,253 | 1,353 | ' | ' | ' |
Income (loss) from continuing operations | 1,481 | -466 | -1,454 | -654 | -803 | -1,345 | -1,560 | -2,039 | -2,833 | -5,833 | -10,777 |
Income (Loss) from discontinued operations | 48,325 | -1,211 | -2,302 | -2,081 | -1,811 | -1,569 | -2,705 | 767 | 42,731 | -5,318 | 24,794 |
Net (loss) income | $49,806 | ($1,677) | ($3,756) | ($2,735) | ($2,614) | ($2,914) | ($4,265) | ($1,272) | $41,638 | ($11,065) | $14,892 |
Loss from continuing operations per share, basic (in dollars per share) | $0.03 | ($0.01) | ($0.04) | ($0.02) | ' | ' | ' | ' | ($0.04) | ($0.17) | ($0.33) |
Loss from continuing operation per share, basic and diluted (in dollars per share) | $0.03 | ($0.01) | ($0.04) | ($0.02) | ($0.02) | ($0.04) | ($0.05) | ($0.06) | ($0.04) | ($0.17) | ($0.30) |
(Loss) income from discontinued operations per share, basic (in dollars per share) | $1.46 | ($0.04) | ($0.07) | ($0.06) | ' | ' | ' | ' | ' | ' | ' |
(Loss) income from discontinued operations per share, diluted (in dollars per share) | $1.43 | ($0.04) | ($0.07) | ($0.06) | ' | ' | ' | ' | ' | ' | ' |
Income (Loss) from discontinued operations per shares, basic and diluted (in dollars per share) | ' | ' | ' | ' | ($0.05) | ($0.05) | ($0.08) | $0.02 | $1.29 | ($0.16) | $0.75 |
Net (loss) income per share, basic (in dollars per share) | $1.49 | ($0.05) | ($0.11) | ($0.08) | ' | ' | ' | ' | ' | ' | ' |
Net (loss) income per share, diluted (in dollars per share) | $1.46 | ($0.05) | ($0.11) | ($0.08) | ' | ' | ' | ' | ' | ' | ' |
Income (loss) per share (in dollars per share) | ' | ' | ' | ' | ($0.07) | ($0.09) | ($0.13) | ($0.04) | $1.25 | ($0.34) | $0.45 |
SCHEDULE_IIVALUATION_AND_QUALI1
SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Accounts Receivable Reserve: | ' | ' | ' |
Valuation and qualifying accounts | ' | ' | ' |
Balance at Beginning of Year | $25 | $3 | ' |
Additions | 80 | 22 | 3 |
Deductions | -27 | ' | ' |
Balance at End of Year | 78 | 25 | 3 |
Inventory Reserve: | ' | ' | ' |
Valuation and qualifying accounts | ' | ' | ' |
Balance at Beginning of Year | 112 | 274 | 300 |
Deductions | -112 | -162 | -26 |
Balance at End of Year | ' | 112 | 274 |
Net Deferred Tax Asset Valuation Allowance: | ' | ' | ' |
Valuation and qualifying accounts | ' | ' | ' |
Balance at Beginning of Year | 88,243 | 84,134 | 77,317 |
Additions | ' | 4,109 | 6,817 |
Deductions | -15,642 | ' | ' |
Balance at End of Year | $72,601 | $88,243 | $84,134 |