Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Jul. 30, 2018 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | CNCE | |
Entity Registrant Name | CONCERT PHARMACEUTICALS, INC. | |
Entity Central Index Key | 1,367,920 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 23,415,025 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 58,359 | $ 27,665 |
Investments, available for sale | 121,988 | 175,500 |
Marketable equity securities | 9,824 | 0 |
Interest receivable | 511 | 628 |
Accounts receivable | 25 | 155 |
Contract asset (Note 7) | 16,000 | 0 |
Prepaid expenses and other current assets | 2,287 | 1,786 |
Total current assets | 208,994 | 205,734 |
Property and equipment, net | 7,698 | 2,165 |
Restricted cash | 1,557 | 1,557 |
Other assets | 16 | 34 |
Income taxes receivable | 2,250 | 2,246 |
Total assets | 220,515 | 211,736 |
Current liabilities: | ||
Accounts payable | 1,084 | 658 |
Accrued expenses and other liabilities | 3,389 | 4,299 |
Income taxes payable | 280 | 46 |
Deferred revenue, current portion | 1,413 | 1,442 |
Total current liabilities | 6,166 | 6,445 |
Deferred revenue, net of current portion | 9,120 | 8,859 |
Deferred lease incentive, net of current portion | 3,521 | 0 |
Deferred rent, net of current portion | 1,425 | 0 |
Total liabilities | 20,232 | 15,304 |
Commitments (Note 10) | ||
Stockholders’ equity: | ||
Preferred stock, $0.001 par value per share; 5,000,000 shares authorized; no shares issued and outstanding in 2018 and 2017, respectively | 0 | 0 |
Common stock, $0.001 par value per share; 100,000,000 shares authorized; 23,491,740 and 23,147,779 shares issued and 23,414,588 and 23,140,378 outstanding in 2018 and 2017, respectively | 23 | 23 |
Additional paid-in capital | 278,867 | 273,059 |
Accumulated other comprehensive loss | (328) | (407) |
Accumulated deficit | (78,279) | (76,243) |
Total stockholders’ equity | 200,283 | 196,432 |
Total liabilities and stockholders’ equity | $ 220,515 | $ 211,736 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - $ / shares | Jun. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 23,491,740 | 23,147,779 |
Common stock, shares outstanding (in shares) | 23,414,588 | 23,140,378 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenue: | ||||
License and research and development revenue | $ 2 | $ 15 | $ 10,481 | $ 35 |
Operating expenses: | ||||
Research and development | 8,862 | 7,285 | 17,518 | 15,522 |
General and administrative | 5,514 | 5,707 | 11,144 | 10,960 |
Total operating expenses | 14,376 | 12,992 | 28,662 | 26,482 |
Loss from operations | (14,374) | (12,977) | (18,181) | (26,447) |
Investment income | 660 | 155 | 1,300 | 292 |
Interest and other expense | 0 | (205) | 0 | (205) |
Unrealized gain (loss) on marketable equity securities | 669 | 0 | (627) | 0 |
Loss before tax provision | (13,045) | (13,027) | (17,508) | (26,360) |
Provision for income taxes | 280 | 0 | 280 | 0 |
Net Loss | (13,325) | (13,027) | (17,788) | (26,360) |
Other comprehensive income (loss): | ||||
Unrealized gain (loss) on investments, available for sale | 154 | (10) | 79 | (37) |
Comprehensive loss | $ (13,171) | $ (13,037) | $ (17,709) | $ (26,397) |
Net loss per share applicable to common stockholders - basic and diluted (in dollars per share) | $ (0.57) | $ (0.58) | $ (0.76) | $ (1.17) |
Weighted-average number of common shares used in net loss per share applicable to common stockholders - basic and diluted (in shares) | 23,402 | 22,579 | 23,313 | 22,479 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Operating activities | ||
Net loss | $ (17,788) | $ (26,360) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 509 | 493 |
Stock-based compensation expense | 6,103 | 3,216 |
Accretion of premiums and discounts on investments | (123) | 100 |
Amortization of discount on loan payable | 0 | 42 |
Amortization of deferred lease incentive | (393) | (161) |
Noncash license consideration (Note 7) | (10,452) | 0 |
Unrealized loss on marketable equity securities | 627 | 0 |
Loss on disposal of asset | 0 | 4 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 130 | (246) |
Interest receivable | 117 | (54) |
Prepaid expenses and other current assets | (500) | (965) |
Other assets | 17 | 18 |
Accounts payable | 183 | 455 |
Accrued expenses and other liabilities | (1,205) | (8) |
Income taxes payable | 230 | 0 |
Deferred rent | 1,356 | (44) |
Deferred revenue | (16) | (25) |
Net cash used in operating activities | (21,205) | (23,535) |
Investing activities | ||
Purchases of property and equipment | (1,521) | (229) |
Purchases of investments | (9,429) | (64,919) |
Maturities of investments | 63,144 | 44,583 |
Net cash provided by (used in) investing activities | 52,194 | (20,565) |
Financing activities | ||
Proceeds from loan, net | 0 | 29,680 |
Repurchase of common stock pursuant to share surrender | (1,206) | 0 |
Proceeds from exercise of stock options | 911 | 1,456 |
Net cash (used in) provided by financing activities | (295) | 31,136 |
Net increase (decrease) in cash and cash equivalents and restricted cash | 30,694 | (12,964) |
Cash, cash equivalents and restricted cash at beginning of period | 29,222 | 40,955 |
Cash, cash equivalents and restricted cash at end of period | 59,916 | 27,991 |
Supplemental cash flow information: | ||
Cash paid for income taxes | 50 | 0 |
Purchases of property and equipment unpaid at period end | 320 | 6 |
Tenant improvements paid by landlord | $ 4,202 | 0 |
Issuance of stock warrants | $ 512 |
Nature of Business
Nature of Business | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Business | Nature of Business Concert Pharmaceuticals, Inc., or Concert or the Company, was incorporated on April 12, 2006 as a Delaware corporation with operations based in Lexington, Massachusetts. The Company is a clinical stage biopharmaceutical company that applies its extensive knowledge of deuterium chemistry to discover and develop novel small molecule drugs. The Company’s approach starts with previously studied compounds, including approved drugs, that the Company believes can be improved with deuterium substitution to provide better pharmacokinetic or metabolic properties, enhancing clinical safety, tolerability or efficacy. The Company believes this approach may enable drug discovery and clinical development that is more efficient and less expensive than conventional small molecule drug research and development. The Company’s pipeline includes multiple clinical-stage candidates and a number of preclinical compounds that it is currently assessing. The Company had cash and cash equivalents and investments of $180.3 million at June 30, 2018. The Company believes that its cash and cash equivalents and investments at June 30, 2018 will be sufficient to allow the Company to fund its current operating plan for at least the next twelve months. The Company may pursue additional cash resources through public or private financings and by establishing collaborations with or licensing its technology to other companies and through other arrangements. Since its inception, the Company has generated an accumulated deficit of $78.3 million through June 30, 2018. The Company's operating results may fluctuate significantly from year to year, depending on the timing and magnitude of cash payments received pursuant to collaboration and licensing arrangements and other agreements and the timing and magnitude of clinical trial and other development activities under its current development programs. Substantially all the Company's net losses have resulted from costs incurred in connection with its research and development programs and from general and administrative costs associated with its operations. The Company expects to continue to incur significant expenses and increasing operating losses for at least the next several years. The Company is subject to risks common to companies in the biotechnology industry, including, but not limited to, risks of failure or unsatisfactory results of nonclinical studies and clinical trials, the need to obtain additional financing to fund the future development of its pipeline, the need to obtain marketing approval for its product candidates, the need to successfully commercialize and gain market acceptance of its product candidates, dependence on key personnel, protection of proprietary technology, compliance with government regulations, development by competitors of technological innovations and ability to transition from pilot-scale manufacturing to large-scale production of products. Unless otherwise indicated, all amounts are in thousands except share and per share amounts. |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies | Basis of Presentation and Significant Accounting Policies Basis of Presentation The accompanying condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring accruals and revisions of estimates, considered necessary for a fair presentation of the condensed consolidated financial statements have been included. Interim results for the three and six months ended June 30, 2018 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2018 or any other future period. The accompanying condensed consolidated financial statements reflect the accounts of Concert and its subsidiaries. All intercompany transactions between the Company and its subsidiaries have been eliminated. Management has determined that the Company operates in one segment: the development of pharmaceutical products on its own behalf or in collaboration with others. The information included in this quarterly report on Form 10-Q should be read in conjunction with the Company’s consolidated financial statements and the accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 filed with the Securities and Exchange Commission on March 1, 2018. Use of Estimates and Summary of Significant Accounting Policies The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, equity, revenue, expenses and the disclosure of contingent assets and liabilities and the Company's ability to continue as a going concern. In preparing the consolidated financial statements, management used estimates in the following areas, among others: revenue recognition; income tax expense; stock-based compensation expense; accrued expenses; and the evaluation of the existence of conditions and events that raise substantial doubt regarding the Company’s ability to continue as a going concern. Actual results could differ from those estimates. With the exception of the adoption of ASU 2014-09 during the three months ended March 31, 2018, discussed in Note 2 "Recently Adopted Accounting Pronouncements" and Note 7, there have been no material changes to the significant accounting policies previously disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017. Recently Adopted Accounting Pronouncements On January 1, 2018, the Company adopted ASU 2014-09, Revenue from Contracts with Customers and all related amendments ("ASC 606" or "the new revenue standard"). ASC 606 is a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-s pecific guidance. The new revenue standard is based on the principle that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this core principle, ASC 606 provides that an entity should apply the following steps: (1) identify the contract(s) with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract and (5) recognize revenue when (or as) the entity satisfies a performance obligation. The new revenue standard also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts and costs to obtain or fulfill contracts. The Company applied ASC 606 on January 1, 2018 to all contracts using the modified retrospective approach. As a result of the adoption, the cumulative effect to retained earnings at January 1, 2018 was $15.8 million . The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. The adoption of the new standard had an immaterial impact on the Company’s reported revenues, operating income and changes in operating cash flows for the three and six months ended June 30, 2018 as compared to what reported amounts would have been under legacy guidance. The cumulative effect of the changes made to the consolidated January 1, 2018 balance sheet for the adoption of the new revenue standard was as follows: (Amounts in thousands) Balance at December 31, 2017 ASC 606 Adjustments Opening Balance at January 1, 2018 Assets Contract Asset $ — $ 16,000 $ 16,000 Liabilities and Equity Deferred revenue, current portion $ 1,442 $ (14 ) $ 1,428 Deferred revenue, net of current portion 8,859 261 9,120 Retained earnings 76,243 15,753 60,490 The impact of adopting the new revenue standard primarily relates to the treatment of the consideration held in escrow under the Vertex Asset Purchase Agreement. Under previous authoritative guidance, the Company concluded that it would not recognize the Vertex escrow consideration until it was received. However, under ASC 606, the Vertex escrow consideration represents variable consideration and was included in the transaction price at contract inception, discussed further in Note 7. There was no material effect on the accounting for income taxes resulting from the adoption of ASC 606. In August 2016, the FASB issued ASU 2016-15—Classification of Certain Cash Receipts and Cash Payments. The amendments in ASU 2016-15 address eight specific cash flow issues and apply to all entities that are required to present a statement of cash flows under FASB Accounting Standards Codification (ASC) 230, Statement of Cash Flows. The amendments in ASU 2016-15 are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption during an interim period. The Company early adopted this update for the interim period ended September 30, 2017 as the treatment of debt extinguishment payments as a financing activity more clearly presents the cash outflow of the extinguishment transaction. The adoption of ASU 2016-15 resulted in classification of cash payments related to a debt prepayment as cash outflows for financing activities. Additional information concerning the prepayment of the Loan Agreement is discussed further in Note 11 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 filed with the Securities and Exchange Commission on March 1, 2018. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows - Restricted Cash (Topic 230). This standard requires companies to include amounts generally described as restricted cash and restricted cash equivalents in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The Company adopted this standard on January 1, 2018. The adoption of ASU 2016-18 resulted in the Company's cash, cash equivalents and restricted cash being included in the beginning and ending amounts for the periods shown on the statement of cash flows and was applied retroactively and reflected in the balances presented for any prior periods. The Company believes that the adoption of this guidance did not have a significant impact on its condensed consolidated financial statements and related disclosures. The restricted cash as of June 30, 2018 and December 31, 2017 is held as collateral for stand-by letters of credit issued by the Company to its landlords in connection with the leases of the Company's Lexington, Massachusetts facilities. Cash, cash equivalents and restricted cash consisted of the following: June 30, June 30, Cash and cash equivalents $ 58,359 $ 27,591 Restricted cash 1,557 400 $ 59,916 $ 27,991 In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, which revises the classification and measurement of investments in equity securities. ASU 2016-01 generally requires that equity investments, except for those accounted for under the equity method of accounting, be measured at fair value and changes in fair value are recognized in net income. Effective January 1, 2018, the Company prospectively adopted this new standard resulting in the recognition of the effects of changes in fair value of equity securities within net income (loss) in the condensed consolidated statement of operations and comprehensive loss. Refer to Note 4 for discussion of the Company's marketable equity securities holdings. Pending Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 requires lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by all leases with terms of more than 12 months. ASU 2016-02 also will require certain qualitative and quantitative disclosures designed to give financial statement users information on the amount, timing, and uncertainty of cash flows arising from leases. ASU 2016-02 will be effective for the Company on January 1, 2019. The Company is currently evaluating the effect of adopting the requirements of ASU 2016-02 as it relates to the accounting for its facility lease at 65 Hayden Avenue, Lexington, Massachusetts, which was executed in December 2017 and is discussed further in Note 10. The Company is also currently evaluating other contracts to determine if any contain embedded leases. The Company's lease for its 99 Hayden Avenue, Lexington, Massachusetts facility expires in September 2018 and as a result will not be evaluated under the scope of ASU 2016-02. In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326)-Measurement of Credit Losses on Financial Instruments. The new standard requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. ASU 2016-13 will become effective for the Company for fiscal years beginning after December 15, 2019, with early adoption permitted. The Company is currently evaluating the impact ASU 2016-13 will have on its financial statements and related disclosures. In June 2018, the FASB issued ASU 2018-07 (Topic 718) - Improvements to Nonemployee Share-Based Payment Accounting that expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. An entity should apply the requirements of Topic 718 to nonemployee awards except for certain exemptions specified in the amendment. The guidance is effective for fiscal years beginning after December 15, 2018, including interim reporting periods within that fiscal year. Early adoption is permitted, but no earlier than an entity’s adoption date of Topic 606. The Company believes that this guidance will not have a significant impact on its condensed consolidated financial statements and related disclosures. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The Company has certain financial assets and liabilities that are recorded at fair value which have been classified as Level 1, 2 or 3 within the fair value hierarchy as described in the accounting standards for fair value measurements: • Level 1—quoted prices for identical instruments in active markets; • Level 2—quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and • Level 3—valuations derived from valuation techniques in which one or more significant value drivers are unobservable. The tables below present information about the Company’s financial assets and liabilities that are measured and carried at fair value as of June 30, 2018 and December 31, 2017 (in thousands) and indicate the level within the fair value hierarchy where each measurement is classified. Level 1 Level 2 Level 3 Total June 30, 2018 Cash equivalents: Money market funds $ 51,295 $ — $ — $ 51,295 Investments, available for sale: U.S. Treasury obligations 34,422 — — 34,422 Government agency securities 47,426 40,140 — 87,566 Marketable equity securities: Corporate equity securities (Note 7) 9,824 — — 9,824 Total $ 142,967 $ 40,140 $ — $ 183,107 Level 1 Level 2 Level 3 Total December 31, 2017 Cash equivalents: Money market funds $ 8,108 $ — $ — $ 8,108 Investments, available for sale: U.S. Treasury obligations 53,910 — — 53,910 Government agency securities 88,651 32,939 — 121,590 Total $ 150,669 $ 32,939 $ — $ 183,608 |
Cash, Cash Equivalents, Investm
Cash, Cash Equivalents, Investments and Marketable Equity Securities | 6 Months Ended |
Jun. 30, 2018 | |
Cash and Cash Equivalents [Abstract] | |
Cash, Cash Equivalents, Investments and Marketable Equity Securities | Cash, Cash Equivalents, Investments and Marketable Equity Securities Cash equivalents include all highly liquid investments maturing within 90 days from the date of purchase. Investments consist of securities with original maturities greater than 90 days when purchased. The Company classifies these investments as available-for-sale and records them at fair value in the accompanying consolidated balance sheets. In accordance with ASU 2016-01, unrealized gains or losses from equity securities are included in net income. Unrealized gains or losses from other investments, including debt securities, are included in accumulated other comprehensive income (loss). Premiums or discounts from par value are amortized to investment income over the life of the underlying investment. Cash, cash equivalents, available for sale investments, and marketable equity securities included the following at June 30, 2018 and December 31, 2017: Average maturity Amortized cost Unrealized gains Unrealized losses Fair value June 30, 2018 Cash $ 7,064 $ — $ — $ 7,064 Money market funds 51,295 — — 51,295 Cash and cash equivalents $ 58,359 $ — $ — $ 58,359 U.S. Treasury obligations 109 days 34,470 — (48 ) 34,422 Government agency securities 169 days 87,846 — (280 ) 87,566 Investments, available for sale $ 122,316 $ — $ (328 ) $ 121,988 Marketable equity securities (Note 7) $ 10,451 $ — $ (627 ) $ 9,824 Average maturity Amortized cost Unrealized gains Unrealized losses Fair value December 31, 2017 Cash $ 19,557 $ — $ — $ 19,557 Money market funds 8,108 — — 8,108 Cash and cash equivalents $ 27,665 $ — $ — $ 27,665 U.S. Treasury obligations 184 days 54,004 — (94 ) 53,910 Government agency securities 229 days 121,903 — (313 ) 121,590 Investments, available for sale $ 175,907 $ — $ (407 ) $ 175,500 Although available to be sold to meet operating needs or otherwise (and therefore classified as current assets), securities are generally held through maturity. The cost of securities sold is determined based on the specific identification method for purposes of recording realized gains and losses. During 2018 and 2017, there were no realized gains or losses on sales of investments, and no investments were adjusted for other than temporary declines in fair value. |
Accrued Expenses and Other Liab
Accrued Expenses and Other Liabilities | 6 Months Ended |
Jun. 30, 2018 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Liabilities | Accrued Expenses and Other Liabilities Accrued expenses and other liabilities consisted of the following: June 30, December 31, Accrued professional fees and other $ 1,076 $ 628 Employee compensation and benefits 1,286 2,797 Research and development expenses 454 521 Deferred lease incentive, current portion 538 249 Deferred rent, current portion 35 104 $ 3,389 $ 4,299 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Deferred tax assets and deferred tax liabilities are recognized based on temporary differences between the financial reporting and tax basis of assets and liabilities using statutory rates. A valuation allowance is recorded against deferred tax assets if it is more likely than not that some or all of the deferred tax assets will not be realized. The Company’s ability to use its operating loss carryforwards and tax credits to offset future taxable income is subject to restrictions under Sections 382 and 383 of the United States Internal Revenue Code (the “Internal Revenue Code”). Net operating loss and tax credit carryforwards may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant shareholders over a three-year period in excess of 50 percent, as defined under Sections 382 and 383 of the Internal Revenue Code. Such changes would limit the Company’s use of its operating loss carryforwards and tax credits. In such a situation, the Company may be required to pay income taxes, even though significant operating loss carryforwards and tax credits exist. The Company records a provision or benefit for income taxes on ordinary pre-tax income or loss based on its estimated effective tax rate for the year. As of June 30, 2018, the Company forecasts an ordinary pre-tax loss for the year ended December 31, 2018 and, since it maintains a full valuation allowance on its deferred tax assets, the Company did not record an income tax benefit for the six month ended June 30, 2018. On July 25, 2017, the transaction contemplated by the Asset Purchase Agreement with Vertex, as discussed in Note 7, closed and Vertex paid the Company $160 million in cash consideration, with $16 million to be held in escrow. For income tax purposes, the $16 million held in escrow is recognized under the installment method and therefore deferred until the cash is received by the Company. Under the provisions of Section 453A of the Internal Revenue Code, the Company is required to recognize interest on the portion of the installment sale outstanding as of the close of each taxable year that exceeds $5 million . As a result, as of June 30, 2018 the Company recorded a provision of $0.3 million which includes $0.2 million of interest accrued for tax year 2017 and $0.1 million of interest accrued for the first six months of 2018. In accordance with SAB 118, the Company's preliminary estimate of the effects of the Tax Cuts and Jobs Act, or TCJA, including the remeasurement of deferred tax assets and liabilities and the recognition of an income tax benefit related to AMT tax credit carryforwards, is subject to the finalization of management’s analysis related to certain matters, such as developing interpretations of the provisions of the TCJA and the filing of its tax returns. During the six months ended June 30, 2018, no adjustments were recorded to the provisional amounts previously recorded. U.S. Treasury regulations, administrative interpretations or court decisions interpreting the TCJA may require further adjustments and changes in estimates. The final determination of the effects of the TCJA will be completed as additional information becomes available, but no later than one year from the enactment of the TCJA. In all cases, the Company will continue to make and refine its calculations as additional analysis is completed. In addition, the Company's estimates may also be affected as it gains a more thorough understanding of the tax law. |
Revenue
Revenue | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Revenue | Revenue The Company's revenue is currently generated through collaborative licensing agreements, patent assignments, and sales of intellectual property. The Company generates its revenue through one segment and the revenue recognized under each of the Company's arrangements during the current and prior period is described below. The terms of these agreements may contain multiple promised goods or services or optional goods and services, including licenses, or options to obtain licenses, to product candidates, referred to as exclusive licenses, as well as research and development activities to be performed by the Company on behalf of the collaboration partner related to the licensed product candidates. Revenue recognition Revenue is recognized when control of the promised goods or services are transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for transferring those goods or providing services. The Company accounts for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. When determining whether the customer has obtained control of the goods or services, the Company considers the point at which the customer may benefit from the goods or services. For licenses to product candidates, revenue is recognized upon grant or transfer of the exclusive license, as the Company's licenses are considered functional in nature. For research, development, and manufacturing activities, revenue is recognized as the work is performed using either the output or input method. Performance obligations A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in ASC 606. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The Company's contracts may contain multiple performance obligations if a promise to transfer the individual goods or services is separately identifiable from other promises in the contracts and, therefore, is considered distinct. For contracts with multiple performance obligations, the Company determines the standalone selling price of each performance obligation and allocates the total transaction price using the relative selling price basis. The Company recognizes performance obligations based on their nature, as discussed above in the revenue recognition section. Options to exclusive licenses The collaborative arrangement with Celgene provides the customer the option to purchase additional licenses in addition to preclinical and clinical development services at a discount. These options are considered performance obligations as they provide the customer with material rights that the customer would not receive without entering into the contract. The portion of the transaction price attributed to a material right is recognized when the underlying option is exercised or when the option expires. To date, Celgene has not exercised any of its options that were determined to represent material rights. Significant Payment Terms The Company’s revenue arrangements include payments to the Company of one or more of the following: a nonrefundable, upfront payment; milestone payments; payment of license exercise or option fees with respect to product candidates; fees for research and development services rendered; and royalties on commercial sales of licensed product candidates, if any. To date, the Company has received upfront payments, several milestone payments and certain research and development service payments but has not received any license exercise or option fees or earned royalty revenue as a result of product sales. Under ASC 606, the Company estimates the amount of consideration to which it will be entitled in exchange for satisfying performance obligations. Based on the Company’s current contracts, variable consideration primarily exists in the following forms: development and regulatory milestones, royalties and sales-based milestones, and consideration held in escrow for indemnification purposes. The Company utilizes the "most likely amount" variable consideration method for estimating development and regulatory milestone consideration to include in the transaction price and the “expected value” variable consideration method for the consideration held in escrow for indemnification purposes. The Company only includes an amount of variable consideration in the transaction price to the extent it is probable that significant reversal in the cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The Company refers to this as the variable consideration constraint. Due to the uncertainty associated with the occurrence of the underlying events which would trigger development and regulatory milestone consideration under its revenue arrangements, with the exception of those development and regulatory milestones received to date, the Company has concluded the variable consideration associated with all development and regulatory milestones to be fully constrained as of the ASC 606 transition date and as of June 30, 2018 and therefore has not included such consideration in the transaction price for any of its revenue arrangements. The Company will re-assess this conclusion at each subsequent reporting period and will only include amounts associated with regulatory or development milestones in the transaction price when, or if, the variable consideration is determined to be released from the constraint. To date, the Company has not recognized any royalties under its licensing and collaboration arrangements. Royalties qualify for the sales-and-usage exemption under ASC 606 as (i) royalties are based strictly on the sales-and-usage by the licensee; and (ii) a license of IP is the sole or predominant item to which such royalties relate. Based on this exemption, these royalties are earned under the terms of a license agreement in the period the products are sold by the Company's collaborator and the Company has a present right to payment. In accordance with ASC 606, the Company is required to adjust the transaction price for the effects of the time value of money if the timing of payments agreed to by the parties to the contract, explicitly or implicitly, provides the Company or its customer with a significant benefit of financing the transfer of goods or services. The Company concluded that its licensing and collaboration arrangements do not contain a significant financing component because the payment structure of its agreements arise from reasons other than providing a significant benefit of financing. Application of Practical Expedients The collaborative arrangements with Glaxo Group Limited, or GSK, and Jazz Pharmaceuticals contained contract modifications. The Company elected to apply the transition practical expedient under ASC 606-10-65-1(f)(4) that allows an entity to reflect the aggregate effect of all contract modifications on contracts that were modified before the beginning of the earliest period presented under the new standard (that is, January 1, 2018) when (i) identifying the satisfied and unsatisfied performance obligations, (ii) determining the transaction price, and (iii) allocating the transaction price to the satisfied and unsatisfied performance obligations. The application of the practical expedient did not have a material effect on the Company’s revenue recognition. Contract Assets As of January 1, 2018, the Company identified a contract asset of $16.0 million associated to the Vertex indemnification payment currently held in escrow. As the receipt of the Vertex indemnification consideration involves more than the passage of time, the consideration was concluded to be conditional and therefore classified as a contract asset. As of June 30, 2018, there have been no changes to the balance of the Company's contract asset from the date of adoption of ASC 606. Contract Liabilities As of January 1, 2018, the Company identified contract liabilities of $10.5 million related to unsatisfied performance obligations as well as variable consideration paid in advance but currently constrained from recognition. Contract liabilities are presented as deferred revenue and classified as current or noncurrent based on the timing of when the Company expects to recognize revenue. No deferred revenue was recognized into revenue during the three months ended June 30, 2018. During the six months ended June 30, 2018, $16 thousand of deferred revenue was recognized into revenue. As of June 30, 2018, the Company recorded $10.5 million of contract liabilities in the condensed consolidated statement of financial position. Collaboration Arrangements Celgene In April 2013, the Company entered into a master development and license agreement with Celgene Corporation and Celgene International Sàrl, referred to together as Celgene, which is primarily focused on the research, development and commercialization of specified deuterated compounds targeting inflammation or cancer. The initial program in the collaboration is CTP-730, a deuterium-modified analog of apremilast. Celgene has an exclusive worldwide license to develop, manufacture and commercialize deuterated analogs of apremilast and certain close chemical derivatives thereof. The Company further granted Celgene licenses with respect to two additional programs and an option with respect to a third additional program. With respect to the two additional license programs, the Company granted Celgene an upfront exclusive worldwide license to develop, manufacture and commercialize deuterated products that contain deuterated analogs of the agreed non-deuterated compounds. Celgene is restricted from utilizing their research, development and commercialization rights under each of these upfront licenses, unless, within seven years after the effective date of the agreement, Celgene pays the Company a license exercise fee. If Celgene does not elect to pay the license exercise fee during the seven year period, the license will expire. With respect to the option program, once a compound is selected, Celgene may exercise its option by paying the Company an option exercise fee within seven years of the effective date of the agreement, and upon Celgene’s exercise of the option the Company will grant to Celgene an exclusive worldwide license to develop, manufacture and commercialize deuterated products that contain deuterated analogs of the selected non-deuterated compound. As a result of the restrictions placed on the two additional license programs that preclude Celgene from exercising its rights under the respective licenses without the payment of a significant license exercise fee, for accounting purposes the Company concluded that it had effectively provided Celgene an option to obtain licenses to those programs. The Company was responsible for conducting and funding research and early development activities for the CTP-730 program at its own expense pursuant to mutually agreed upon development plans. This included the completion of single and multiple ascending dose Phase 1 clinical trials in 2015. The Company does not have any obligation to conduct any research or development activities for any of the additional programs unless and until Celgene exercises its rights with respect to such program and pays the applicable exercise fee. If Celgene exercises its rights with respect to any additional program and pays the Company the applicable exercise fee, the Company is responsible, at its own expense, for conducting research and development activities for such program pursuant to agreed-upon development plans until the completion of Phase 1 clinical trial, which will be defined in each development plan on a program-by-program basis. In addition, if Celgene exercises its rights with respect to the option program and pays the Company the applicable option exercise fee, the Company is responsible for seeking to generate a deuterated compound for clinical development in the selected option program. Oversight of the development program for each program under the Celgene Agreement is guided by separate JSCs. Celgene is solely responsible for all research, development and commercialization costs with respect to the initial program beyond the Phase 1 clinical trials that the Company conducts. If Celgene exercises its rights with respect to any additional program, Celgene will be solely responsible for all research, development and commercialization costs for such program following the completion of the first Phase 1 clinical trial for such program. Under the terms of the agreement, the Company received a non-refundable upfront payment of $35.0 million . In October 2015, the Company received an $8.0 million development milestone payment based on the completion of Phase 1 clinical evaluation of CTP-730. In addition, the Company is eligible to earn an additional $15.0 million development milestone payment, up to $247.5 million in regulatory milestone payments and up to $50.0 million in sales-based milestone payments related to products within the CTP-730 program. The next milestone payment the Company may be entitled to achieve under the CTP-730 program is $15.0 million related to the first actual dosing in a Phase 3 clinical trial or, if earlier, acceptance for filing of a new drug application, or NDA. If Celgene exercises its rights with respect to either of the two additional license programs, the Company will receive a license exercise fee for the applicable program of $30.0 million and will also be eligible to earn up to $23.0 million in development milestone payments and up to $247.5 million in regulatory milestone payments for that program. Additionally, with respect to one of the additional license programs, the Company is eligible to receive up to $100.0 million in milestone payments based on net sales of products, and with respect to the other additional license program, the Company is eligible to receive up to $50.0 million in milestone payments based on net sales of products. If Celgene exercises its option with respect to the option program, in respect of a compound to be identified at a later time, the Company will receive an option exercise fee of $10.0 million and will be eligible to earn up to $23.0 million in development milestone payments and up to $247.5 million in regulatory milestone payments. In addition, with respect to each program, Celgene is required to pay the Company royalties on worldwide net sales of each licensed product at defined percentages ranging from the mid-single digits to low double digits below 20% . The royalty rate is reduced on a country-by-country basis during any period within the royalty term when there is no patent claim or regulatory exclusivity covering the licensed product in the particular country. Under ASC 606, the Company's collaborative arrangement with Celgene contains the following performance obligations: (i) an exclusive worldwide license to develop, manufacture and commercialize deuterated analogs of apremilast related to the CTP-730 program, or the License Performance Obligation, (ii) obligations to perform research and development services associated with the CTP-730 program, or the R&D Services Performance Obligation, (iii) obligation to supply nonclinical and clinical trial material related to the CTP-730 program, or the Supply Performance Obligation, (iv) material right related to the first additional license program for which the non-deuterated compound has been selected, or the First Discount Performance Obligation and (v) material right related to the second additional license program for which the non-deuterated compound has been selected, or the Second Discount Performance Obligation. The transaction price as of the transition date consisted of the $35.0 million non-refundable upfront payment and the $8.0 million milestone payment received upon successful completion of the Phase 1 clinical program totaling to $43.0 million . The Company allocated the upfront arrangement consideration of $35.0 million among the performance obligations using the relative selling price method based on the standalone selling prices of each performance obligation, which is generally the price at which it would sell such deliverable if it were to be sold regularly on a standalone basis. The standalone selling price of License Performance Obligation was based on historical valuations for other licensing arrangements entered into by the Company. The standalone selling prices of the R&D Services Performance Obligation and the Supply Performance Obligation were based on the expected cost plus margin approach. The standalone selling prices of the First and Second Discount Performance Obligations were based the expected value of the options. The Company allocated the $8.0 million milestone payment to only the License Performance Obligation, R&D Services Performance Obligation and the Supply Performance Obligation using the relative selling price method based on the standalone selling prices of each of these three performance obligations. The Company concluded that the achievement of the performance-based milestone for the CTP-730 program should only be allocated to the performance obligations associated to the CTP-730 program as the achievement of the milestone related specifically to the Company’s efforts with respect to the satisfaction of the performance obligations related to that program. The transaction price was allocated as follows: (i) $21.7 million to the License Performance Obligation, (ii) $11.0 million to the R&D Services Performance Obligation, (iii) $4.0 million to the Supply Performance Obligation, (iv) $3.2 million to the First Discount Performance Obligation and (v) $3.2 million to the Second Discount Performance Obligation. Revenue is recognized when the performance obligation is considered satisfied. The License Performance Obligation was considered satisfied at contract inception as the exclusive license transferred control to the customer at this point in time. The R&D Services Performance Obligation and the Supply Performance Obligation are satisfied over time using the input method based on costs incurred determined by estimates of associated effort and cost of services adjusted for a reasonable profit margin such that they represent estimated market rates for similar services on a standalone basis. The First Discount Performance Obligation and the Second Discount Performance Obligation shall be considered satisfied upon the option's exercise or expiration. Unsatisfied performance obligations represent contract liabilities that are presented as deferred revenue within the accompanying condensed consolidated balance sheet. The collaborative arrangement with Celgene contains consideration that is variable based on the customer's achievement of certain development, regulatory, and sales-based milestones in addition to royalties upon the customer's commercial success with licensed programs. The next milestone payment of $15.0 million upon first actual dosing in a Phase 3 clinical trial, or if earlier, acceptance for filing of a new drug application, or NDA, for the CTP-730 program is considered variable consideration that is fully constrained due to the uncertainty associated to the achievement of the milestone. The consideration related to royalty and sales-based milestones are also considered variable consideration that is fully constrained in accordance with the royalty recognition constraint. As a result, the variable consideration that is considered fully constrained related to milestones will not be recognized until the time at which the constraint is released. The variable consideration related to royalties will be recognized in the period the products are sold by Celgene and the Company has a present right to payment. During the three months ended June 30, 2018 and June 30, 2017, the Company recognized no revenue for the R&D Services and Supply Performance Obligations as no services were performed. During the six months ended June 30, 2018, the Company recognized $16 thousand for the R&D Services and Supply Performance Obligations, as compared to the $21 thousand recognized during the six months ended June 30, 2017. The revenue in the prior year period was recognized in accordance with legacy authoritative guidance. The revenue was classified as license and research and development revenue in the accompanying condensed consolidated statements of operations and comprehensive loss. As of June 30, 2018, there was $7.8 million of deferred revenue related to the Company’s collaboration with Celgene, consisting of $1.3 million related to the R&D Services Performance Obligation, $0.1 million related to the Supply Performance Obligation and $6.4 million related to the First and Second Discount Performance Obligations. The Company classified the $1.4 million related to the R&D Services Performance Obligation and the Supply Performance Obligation as a current liability and the $6.4 million related to the First and Second Discount Performance Obligations as a noncurrent liability in the accompanying condensed consolidated balance sheet. Avanir In February 2012, the Company entered into a development and license agreement with Avanir Pharmaceuticals, Inc., or Avanir, under which the Company granted Avanir an exclusive worldwide license to develop, manufacture and commercialize deudextromethorphan-containing products. Avanir is currently focused on developing AVP-786, which is a combination of a deudextromethorphan and an ultra-low dose of quinidine. Subsequent to the Company’s agreement, Avanir was acquired by Otsuka Pharmaceutical Co., Ltd. and it is now a wholly owned subsidiary of Otsuka America, Inc. Since June 2012, Avanir has elected to conduct all research and development activities, including manufacturing activities; however, the Company has received intellectual property cost reimbursements. Under the agreement, the Company received a non-refundable upfront payment of $2.0 million and has received milestone payments of $6.0 million . The Company is also eligible to earn, with respect to licensed products comprising a combination of deudextromethorphan and quinidine, up to $37.0 million in regulatory and commercial launch milestone payments, of which $21.5 million in development and regulatory milestone payments are associated with the first indication, and up to $125.0 million in sales-based milestone payments. The next milestone payments that the Company may be entitled to receive are $5.0 million upon acceptance for filing of a NDA, $3.0 million upon acceptance for filing of a Marketing Authorization Application, or MAA, and $1.5 million upon acceptance for filing of a NDA by the Ministry of Health, Labour and Welfare, or MHLW, related to AVP-786. In addition, the Company is eligible for higher development milestones, up to an additional $43.0 million , for licensed products that do not require quinidine. Avanir is currently developing deudextromethorphan only in combination with quinidine. Avanir also is required to pay the Company royalties at defined percentages ranging from the mid-single digits to low double digits below 20% on net sales of licensed products on a country-by-country basis. The royalty rate is reduced, on a country-by-country basis, during any period within the royalty term when there is no patent claim covering the licensed product in the particular country. The Company determined that all promised goods and services related to the arrangement with Avanir were considered satisfied as of the ASC 606 adoption date of January 1, 2018. The transaction price consists of the $2.0 million non-refundable upfront payment and $6.0 in development milestone payments received totaling to $8.0 million . As all promised goods and services were considered satisfied as of the ASC 606 adoption date, the arrangement consideration need not be allocated among the performance obligations because the arrangement consideration was fully recognized as of January 1, 2018. The arrangement with Avanir contains consideration that is variable based on the customer's achievement of certain development, regulatory, and sales-based milestones in addition to royalties upon the customer's commercial success with the licensed product. The $6.0 million resulting from the achievement of development milestones represents variable consideration that has been earned and therefore is not subject to constraint. The next milestones that the Company may be entitled to are regulatory milestones that represent variable consideration that is fully constrained due to the uncertainty associated to the achievement of milestones of this nature. The variable consideration related to royalties will be recognized in the period the products are sold by Avanir and the Company has a present right to payment. Jazz Pharmaceuticals In February 2013, the Company entered into a development and license agreement with Jazz Pharmaceuticals, Inc., or Jazz Pharmaceuticals, to research, develop and commercialize products containing a deuterated sodium oxybate analog, or D-SXB. Jazz Pharmaceuticals is initially focusing on one analog, designated as JZP-386, a once-nightly oxybate product. Under the terms of the agreement, the Company granted Jazz Pharmaceuticals an exclusive, worldwide, royalty-bearing license under intellectual property controlled by the Company to develop, manufacture and commercialize D-SXB products including, but not limited to, JZP-386. The Company, together with Jazz Pharmaceuticals, has conducted certain development activities for Phase 1 clinical trials with respect to JZP-386 pursuant to an agreed upon development plan. The Company was responsible under the development plan for conducting the Phase 1 clinical trials with respect to JZP-386. The Company’s obligations to conduct further development activities are subject to mutual agreement. Jazz Pharmaceuticals has assumed all manufacturing and development responsibilities relating to JZP-386. Pursuant to the agreement, the Company’s costs for activities under the development plan were reimbursed by Jazz Pharmaceuticals, except for the costs of a Phase 1 clinical trial that was conducted in the first half of 2015, which was shared between Jazz Pharmaceuticals and the Company. Under the agreement, the Company received a non-refundable upfront payment of $4.0 million and is eligible to earn an aggregate of up to $8.0 million in development milestone payments, up to $35.0 million in regulatory milestone payments and up to $70.0 million in sales-based milestone payments based on net product sales of licensed products. The next milestone payment that the Company may be entitled to receive is $4.0 million related to initiation of the first Phase 2 clinical trial of JZP-386. In addition, Jazz Pharmaceuticals is required to pay the Company royalties at defined percentages ranging from the mid-single digits to low double digits below 20% on worldwide net sales of licensed products. The royalty rate is lowered, on a country-by-country basis, under certain circumstances as specified in the agreement. The Company determined that all promised goods and services related to the collaborative arrangement with Jazz Pharmaceuticals were considered satisfied as of the ASC 606 adoption date of January 1, 2018. The transaction price consists of the $4.0 million non-refundable upfront payment. As all promised goods and services were considered satisfied as of the ASC 606 adoption date, the arrangement consideration need not be allocated among the performance obligations. Furthermore, as all promised goods and services are considered satisfied, the consideration was fully recognized as of January 1, 2018. The collaborative arrangement with Jazz Pharmaceuticals contains consideration that is variable based on the customer's achievement of certain development, regulatory, and sales-based milestones in addition to royalties upon the customer's commercial success with the licensed product. The next milestone payment the Company may be entitled to receive of $4.0 million related to initiation of the first Phase 2 clinical trial of JZP-386 is considered variable consideration that is fully constrained due to the uncertainty associated to the achievement of the development milestone. The consideration related to royalty and sales-based milestones are also considered variable consideration that is fully constrained in accordance with the royalty recognition constraint. The variable consideration related to royalties will be recognized in the period the products are sold by Jazz and the Company has a present right to payment. For the three and six months ended June 30, 2018, the Company did not recognize revenue as compared to $15 thousand and $22 thousand for the three and six months ended June 30, 2017, respectively, related to the performance of development support services. The revenue in the prior year period was recognized in accordance with legacy authoritative guidance. Other Revenue Arrangements Vertex On March 3, 2017, the Company and Vertex entered into an Asset Purchase Agreement pursuant to which, subject to the satisfaction or waiver of the conditions therein, the Company sold and assigned to Vertex, CTP-656, a deuterated analog of ivacaftor now known as VX-561, and other cystic fibrosis assets of the Company. On July 25, 2017, the Closing Date, the transaction contemplated by the Asset Purchase Agreement closed and Vertex paid the Company $160 million in cash consideration, with $16 million to be held in escrow. There are no refund provisions with the exception of the amount held in escrow for potential indemnification for a period of eighteen months. Additionally, upon the achievement of certain milestone events, Vertex has agreed to pay the Company an aggregate of up to $90 million . Of this amount, $50 million will become payable to the Company upon receipt of FDA marketing approval for a combination treatment regimen containing VX-561, for patients with cystic fibrosis, and $40 million will become payable to the Company upon completion of a pricing and reimbursement agreement in the first of the United Kingdom, Germany or France with respect to a combination treatment regimen containing VX-561 for patients with cystic fibrosis. Pursuant to the Asset Purchase Agreement, the Company has agreed to indemnify Vertex for certain matters, including breaches of specified representations and warranties, covenants included in the Asset Purchase Agreement and specified tax claims. Representations and warranties, other than certain fundamental representations and warranties, survive for a period of eighteen months following the Closing Date and the maximum liability of the Company for claims by Vertex related to the breaches of such representations and warranties, with limited exceptions, is limited to the escrow amount, or $16 million . In no event will the aggregate liability of the Company for indemnification exceed the purchase price paid by Vertex, including any milestone payments. Eighteen months after the Closing Date, any remaining balance in the escrow account not subject to indemnity claims by Vertex will be released to the Company. The Asset Purchase Agreement with Vertex contains a single performance obligation: all rights to develop, manufacture, and commercialize deuterated analogs of ivacaftor related to the CTP-656 program, including all intellectual property, permits and registrations, and records, documentation, and regulatory filings, in addition to an obligation to perform research and testing consulting services to facilitate the transfer of materials, documents, and knowledge up to the close of the Asset Purchase Agreement, referred to as the Transfer of IP Performance Obligation. The Asset Purchase Agreement with Vertex contains consideration that is variable based on Vertex's achievement of certain regulatory milestones in addition to the $16.0 million held in escrow to indemnify Vertex. The regulatory milestone payments are considered variable consideration that are fully constrained due to the uncertainty associated to the achievement of the respective milestones. The Company concluded that an indemnification claim was remote and as a result was not subject to the variable consideration constraint at the ASC 606 transition date. A |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation The Company’s equity incentive plans provide for the issuance of a variety of stock-based awards, including incentive stock options, nonstatutory stock options and awards of stock, to directors, officers and employees of the Company, as well as consultants and advisors to the Company. As of June 30, 2018, the Company has granted awards in the form of stock options and restricted stock units (the "RSUs"). The stock options generally have been granted with an exercise price equal to the fair value of the underlying common stock on the date of grant, a vesting period of three or four years, and all options expire no later than ten years from the date of grant. Effective January 1, 2018, an additional 925,615 shares were added to the Company’s 2014 Stock Incentive Plan (the "2014 Plan"), for future issuance pursuant to the terms of the 2014 Plan. As of June 30, 2018, there were 1,356,655 shares of common stock available for future award grants under the 2014 Plan. Total stock-based compensation expense related to all stock-based options and awards recognized in the condensed consolidated statements of operations and comprehensive loss consisted of: Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Research and development $ 1,274 $ 686 $ 2,801 $ 1,403 General and administrative 1,530 887 3,302 1,813 Total stock-based compensation expense $ 2,804 $ 1,573 $ 6,103 $ 3,216 Stock Options Stock options are valued using the Black-Scholes-Merton option valuation model and compensation cost is recognized based on such fair value over the period of vesting. The weighted average fair value of options granted in the three and six months ended June 30, 2018 and 2017 reflect the following weighted-average assumptions: Three Months Ended Six Months Ended June 30, 2018 2017 2018 2017 Expected volatility 77.10 % 78.30 % 77.17 % 78.16 % Expected term 6.0 years 6.0 years 6.0 years 6.0 years Risk-free interest rate 2.77 % 2.02 % 2.64 % 2.07 % Expected dividend yield — % — % — % — % For the three and six months ended June 30, 2018 and 2017, expected volatility was estimated using a weighted-average of the Company's historical volatility of its common stock and the historical volatility of the common stock of a group of similar companies that were publicly traded. The Company will continue to apply this process until a sufficient amount of historical information regarding the volatility of its own stock price becomes available. The following table provides certain information related to the Company's outstanding stock options: Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 (in thousands, except per share data) Weighted average fair value of options granted, per option $ 13.38 $ 9.29 $ 18.14 $ 7.66 Aggregate grant date fair value of options vested during the period $ 2,268 $ 1,691 $ 3,729 $ 2,967 Total cash received from exercises of stock options $ 242 $ 317 $ 911 $ 1,456 Total intrinsic value of stock options exercised $ 243 $ 645 $ 2,352 $ 3,309 The following is a summary of stock option activity for the six months ended June 30, 2018: Number of Option Shares Weighted Average Exercise Price per Share Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (In years) (In thousands) Outstanding at December 31, 2017 2,889,722 $ 11.25 Granted 921,343 $ 26.61 Exercised (169,911 ) $ 7.43 Forfeited or expired (19,877 ) $ 18.13 Outstanding at June 30, 2018 3,621,277 $ 15.30 7.38 $ 14,543 Exercisable at June 30, 2018 1,825,536 $ 11.21 6.26 $ 10,766 Vested and expected to vest at June 30, 2018 (1) 3,457,648 $ 15.04 7.32 $ 14,230 (1) This represents the number of vested stock option shares as of June 30, 2018, plus the number of unvested stock option shares that the Company estimated as of June 30, 2018 would vest, based on the unvested stock option shares at June 30, 2018 and an estimated forfeiture rate of 7% . As of June 30, 2018, there was $21.1 million of unrecognized compensation cost related to stock options that are expected to vest. The stock option costs are expected to be recognized over a weighted average remaining vesting period of 2.6 years. Restricted Stock Units On July 6, 2017, the Company granted 0.5 million restricted stock units, or RSUs, to executives and employees. The awards granted to employees are service-based, whereas the awards granted to executives are a blend of service-based and performance-based. Assuming all service and performance conditions were achieved, fifty percent of the RSUs would vest on March 31, 2018, and the remaining fifty percent of the RSUs will vest on March 31, 2019. Certain executive awards were subject to the achievement of defined performance criteria prior to March 31, 2018, including the closing of the Asset Purchase Agreement with Vertex Pharmaceuticals, Inc. and the institution by the Patent Trial and Appeal Board ("PTAB") of the Post Grant Review ("PGR") petition filed by the Company against Incyte Corporation. In January 2018, the PTAB decided not to institute the PGR petition and, as a result, the corresponding performance-based awards did not vest on March 31, 2018. The Company is using the accelerated attribution method to recognize expense over the required service period based on its estimate of the number of performance-based awards that will vest. If there is a change in the estimate of the number of performance-based awards that are probable of vesting, the Company will cumulatively adjust compensation expense in the period that the change in estimate is made. RSUs are not included in issued and outstanding common stock until the shares are vested and released. As of June 30, 2018, 174,050 RSUs had vested. The fair value of an RSU is measured based on the market price of the underlying common stock as of the date of grant, reduced by the purchase price of $0.001 per share. The following is a summary of RSU activity, including both service-based and performance-based RSUs for the six months ended June 30, 2018: Number of RSU Shares Weighted Average Grant Date Fair Value Outstanding at December 31, 2017 517,300 $ 13.87 Granted — $ — Released (174,050 ) $ 13.87 Forfeited (114,700 ) $ 13.87 Outstanding at June 30, 2018 228,550 $ 13.87 As of June 30, 2018, there was $1.8 million of unrecognized compensation cost related to RSUs that are expected to vest. This amount excludes compensation cost related to RSUs where the performance conditions are not considered probable of being satisfied. The costs from RSUs likely to vest are expected to be recognized over a weighted average remaining vesting period of 0.8 years. |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Share | Earnings (Loss) Per Share Basic net earnings (loss) per common share is calculated by dividing net earnings (loss) allocable to common stockholders by the weighted-average common shares outstanding during the period, without consideration of common stock equivalents. Diluted net earnings per share is calculated by adjusting the weighted-average shares outstanding for the dilutive effect of common stock equivalents, including stock options and warrants, outstanding for the period as determined using the treasury stock method. For purposes of the diluted net loss per share calculation, common stock equivalents are excluded from the calculation because their effect would be anti-dilutive. Therefore, basic and diluted net loss per share applicable to common stockholders is the same for periods with a net loss. The following table illustrates the determination of loss per share for each period presented. Three Months Ended June 30, Six Months Ended 2018 2017 2018 2017 (in thousands, expect per share amounts) Numerator: Net loss applicable to common stockholders - basic and diluted $ (13,325 ) $ (13,027 ) $ (17,788 ) $ (26,360 ) Denominator: Weighted average shares outstanding - basic 23,402 22,579 23,313 22,479 Dilutive stock options — — — — Dilutive warrants — — — — Weighted average shares outstanding - diluted 23,402 22,579 23,313 22,479 Net loss per share applicable to common stockholders - basic and diluted $ (0.57 ) $ (0.58 ) $ (0.76 ) $ (1.17 ) Anti-dilutive potential common stock equivalents excluded from the calculation of net loss per share: Stock options 786 637 880 610 Stock awards 140 — 254 — Warrants 132 132 132 132 |
Commitments
Commitments | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments | Commitments In December 2017, the Company entered into an agreement to lease approximately 55,500 square feet of office and laboratory space in a new location at 65 Hayden Avenue, Lexington, Massachusetts (the "Premises"). The Company expects to relocate its operations to the Premises in the third quarter of 2018 prior to the expiration of the lease agreement for its current office and laboratory space on September 30, 2018. For additional details related to the lease agreement, refer to Note 11 in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2017, which was filed with the Securities and Exchange Commission on March 1, 2018. The Company began recognizing rent expense relating to 65 Hayden Avenue on a straight line basis beginning on January 1, 2018, which was determined to be the lease commencement date. The Company recognized $1.4 million in rent expense relating to this property during the six months ended June 30, 2018. The Company's lease agreement calls for a tenant improvement allowance of $5.0 million for certain permitted costs related to the design and construction of Company improvements to the Premises. The Company is accounting for the tenant improvements as a lease incentive obligation to be amortized against operating lease expense on a straight-line basis over the term of the Lease. The leasehold improvements will be recognized as assets and amortized on a straight-line basis over the term of the Lease. The Company recorded leasehold improvement assets and a corresponding lease incentive obligation of $4.2 million for design and construction improvements completed during the six month period ended June 30, 2018. The lease incentive of $5.0 million is being amortized over the lease term on a straight line basis beginning on January 1, 2018, or the lease commencement date. |
Basis of Presentation and Sig16
Basis of Presentation and Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring accruals and revisions of estimates, considered necessary for a fair presentation of the condensed consolidated financial statements have been included. Interim results for the three and six months ended June 30, 2018 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2018 or any other future period. The accompanying condensed consolidated financial statements reflect the accounts of Concert and its subsidiaries. All intercompany transactions between the Company and its subsidiaries have been eliminated. Management has determined that the Company operates in one segment: the development of pharmaceutical products on its own behalf or in collaboration with others. The information included in this quarterly report on Form 10-Q should be read in conjunction with the Company’s consolidated financial statements and the accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 filed with the Securities and Exchange Commission on March 1, 2018. |
Use of Estimates and Summary of Significant Accounting Policies | Use of Estimates and Summary of Significant Accounting Policies The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, equity, revenue, expenses and the disclosure of contingent assets and liabilities and the Company's ability to continue as a going concern. In preparing the consolidated financial statements, management used estimates in the following areas, among others: revenue recognition; income tax expense; stock-based compensation expense; accrued expenses; and the evaluation of the existence of conditions and events that raise substantial doubt regarding the Company’s ability to continue as a going concern. Actual results could differ from those estimates. With the exception of the adoption of ASU 2014-09 during the three months ended March 31, 2018, discussed in Note 2 "Recently Adopted Accounting Pronouncements" and Note 7, there have been no material changes to the significant accounting policies previously disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017. |
Recently Adopted Accounting Pronouncements and Pending Accounting Pronouncements | Recently Adopted Accounting Pronouncements On January 1, 2018, the Company adopted ASU 2014-09, Revenue from Contracts with Customers and all related amendments ("ASC 606" or "the new revenue standard"). ASC 606 is a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-s pecific guidance. The new revenue standard is based on the principle that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this core principle, ASC 606 provides that an entity should apply the following steps: (1) identify the contract(s) with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract and (5) recognize revenue when (or as) the entity satisfies a performance obligation. The new revenue standard also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts and costs to obtain or fulfill contracts. The Company applied ASC 606 on January 1, 2018 to all contracts using the modified retrospective approach. As a result of the adoption, the cumulative effect to retained earnings at January 1, 2018 was $15.8 million . The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. The adoption of the new standard had an immaterial impact on the Company’s reported revenues, operating income and changes in operating cash flows for the three and six months ended June 30, 2018 as compared to what reported amounts would have been under legacy guidance. The cumulative effect of the changes made to the consolidated January 1, 2018 balance sheet for the adoption of the new revenue standard was as follows: (Amounts in thousands) Balance at December 31, 2017 ASC 606 Adjustments Opening Balance at January 1, 2018 Assets Contract Asset $ — $ 16,000 $ 16,000 Liabilities and Equity Deferred revenue, current portion $ 1,442 $ (14 ) $ 1,428 Deferred revenue, net of current portion 8,859 261 9,120 Retained earnings 76,243 15,753 60,490 The impact of adopting the new revenue standard primarily relates to the treatment of the consideration held in escrow under the Vertex Asset Purchase Agreement. Under previous authoritative guidance, the Company concluded that it would not recognize the Vertex escrow consideration until it was received. However, under ASC 606, the Vertex escrow consideration represents variable consideration and was included in the transaction price at contract inception, discussed further in Note 7. There was no material effect on the accounting for income taxes resulting from the adoption of ASC 606. In August 2016, the FASB issued ASU 2016-15—Classification of Certain Cash Receipts and Cash Payments. The amendments in ASU 2016-15 address eight specific cash flow issues and apply to all entities that are required to present a statement of cash flows under FASB Accounting Standards Codification (ASC) 230, Statement of Cash Flows. The amendments in ASU 2016-15 are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption during an interim period. The Company early adopted this update for the interim period ended September 30, 2017 as the treatment of debt extinguishment payments as a financing activity more clearly presents the cash outflow of the extinguishment transaction. The adoption of ASU 2016-15 resulted in classification of cash payments related to a debt prepayment as cash outflows for financing activities. Additional information concerning the prepayment of the Loan Agreement is discussed further in Note 11 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 filed with the Securities and Exchange Commission on March 1, 2018. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows - Restricted Cash (Topic 230). This standard requires companies to include amounts generally described as restricted cash and restricted cash equivalents in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The Company adopted this standard on January 1, 2018. The adoption of ASU 2016-18 resulted in the Company's cash, cash equivalents and restricted cash being included in the beginning and ending amounts for the periods shown on the statement of cash flows and was applied retroactively and reflected in the balances presented for any prior periods. The Company believes that the adoption of this guidance did not have a significant impact on its condensed consolidated financial statements and related disclosures. The restricted cash as of June 30, 2018 and December 31, 2017 is held as collateral for stand-by letters of credit issued by the Company to its landlords in connection with the leases of the Company's Lexington, Massachusetts facilities. Cash, cash equivalents and restricted cash consisted of the following: June 30, June 30, Cash and cash equivalents $ 58,359 $ 27,591 Restricted cash 1,557 400 $ 59,916 $ 27,991 In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, which revises the classification and measurement of investments in equity securities. ASU 2016-01 generally requires that equity investments, except for those accounted for under the equity method of accounting, be measured at fair value and changes in fair value are recognized in net income. Effective January 1, 2018, the Company prospectively adopted this new standard resulting in the recognition of the effects of changes in fair value of equity securities within net income (loss) in the condensed consolidated statement of operations and comprehensive loss. Refer to Note 4 for discussion of the Company's marketable equity securities holdings. Pending Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 requires lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by all leases with terms of more than 12 months. ASU 2016-02 also will require certain qualitative and quantitative disclosures designed to give financial statement users information on the amount, timing, and uncertainty of cash flows arising from leases. ASU 2016-02 will be effective for the Company on January 1, 2019. The Company is currently evaluating the effect of adopting the requirements of ASU 2016-02 as it relates to the accounting for its facility lease at 65 Hayden Avenue, Lexington, Massachusetts, which was executed in December 2017 and is discussed further in Note 10. The Company is also currently evaluating other contracts to determine if any contain embedded leases. The Company's lease for its 99 Hayden Avenue, Lexington, Massachusetts facility expires in September 2018 and as a result will not be evaluated under the scope of ASU 2016-02. In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326)-Measurement of Credit Losses on Financial Instruments. The new standard requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. ASU 2016-13 will become effective for the Company for fiscal years beginning after December 15, 2019, with early adoption permitted. The Company is currently evaluating the impact ASU 2016-13 will have on its financial statements and related disclosures. In June 2018, the FASB issued ASU 2018-07 (Topic 718) - Improvements to Nonemployee Share-Based Payment Accounting that expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. An entity should apply the requirements of Topic 718 to nonemployee awards except for certain exemptions specified in the amendment. The guidance is effective for fiscal years beginning after December 15, 2018, including interim reporting periods within that fiscal year. Early adoption is permitted, but no earlier than an entity’s adoption date of Topic 606. The Company believes that this guidance will not have a significant impact on its condensed consolidated financial statements and related disclosures. |
Basis of Presentation and Sig17
Basis of Presentation and Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | The cumulative effect of the changes made to the consolidated January 1, 2018 balance sheet for the adoption of the new revenue standard was as follows: (Amounts in thousands) Balance at December 31, 2017 ASC 606 Adjustments Opening Balance at January 1, 2018 Assets Contract Asset $ — $ 16,000 $ 16,000 Liabilities and Equity Deferred revenue, current portion $ 1,442 $ (14 ) $ 1,428 Deferred revenue, net of current portion 8,859 261 9,120 Retained earnings 76,243 15,753 60,490 |
Schedule of Cash and Cash Equivalents | Cash, cash equivalents and restricted cash consisted of the following: June 30, June 30, Cash and cash equivalents $ 58,359 $ 27,591 Restricted cash 1,557 400 $ 59,916 $ 27,991 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Financial Assets and Liabilities Recognized at Fair Value | The tables below present information about the Company’s financial assets and liabilities that are measured and carried at fair value as of June 30, 2018 and December 31, 2017 (in thousands) and indicate the level within the fair value hierarchy where each measurement is classified. Level 1 Level 2 Level 3 Total June 30, 2018 Cash equivalents: Money market funds $ 51,295 $ — $ — $ 51,295 Investments, available for sale: U.S. Treasury obligations 34,422 — — 34,422 Government agency securities 47,426 40,140 — 87,566 Marketable equity securities: Corporate equity securities (Note 7) 9,824 — — 9,824 Total $ 142,967 $ 40,140 $ — $ 183,107 Level 1 Level 2 Level 3 Total December 31, 2017 Cash equivalents: Money market funds $ 8,108 $ — $ — $ 8,108 Investments, available for sale: U.S. Treasury obligations 53,910 — — 53,910 Government agency securities 88,651 32,939 — 121,590 Total $ 150,669 $ 32,939 $ — $ 183,608 |
Cash, Cash Equivalents, Inves19
Cash, Cash Equivalents, Investments and Marketable Equity Securities (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Cash and Cash Equivalents [Abstract] | |
Cash Equivalents and Short-term and Long-term Investments | Cash, cash equivalents, available for sale investments, and marketable equity securities included the following at June 30, 2018 and December 31, 2017: Average maturity Amortized cost Unrealized gains Unrealized losses Fair value June 30, 2018 Cash $ 7,064 $ — $ — $ 7,064 Money market funds 51,295 — — 51,295 Cash and cash equivalents $ 58,359 $ — $ — $ 58,359 U.S. Treasury obligations 109 days 34,470 — (48 ) 34,422 Government agency securities 169 days 87,846 — (280 ) 87,566 Investments, available for sale $ 122,316 $ — $ (328 ) $ 121,988 Marketable equity securities (Note 7) $ 10,451 $ — $ (627 ) $ 9,824 Average maturity Amortized cost Unrealized gains Unrealized losses Fair value December 31, 2017 Cash $ 19,557 $ — $ — $ 19,557 Money market funds 8,108 — — 8,108 Cash and cash equivalents $ 27,665 $ — $ — $ 27,665 U.S. Treasury obligations 184 days 54,004 — (94 ) 53,910 Government agency securities 229 days 121,903 — (313 ) 121,590 Investments, available for sale $ 175,907 $ — $ (407 ) $ 175,500 |
Accrued Expenses and Other Li20
Accrued Expenses and Other Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Liabilities | Accrued expenses and other liabilities consisted of the following: June 30, December 31, Accrued professional fees and other $ 1,076 $ 628 Employee compensation and benefits 1,286 2,797 Research and development expenses 454 521 Deferred lease incentive, current portion 538 249 Deferred rent, current portion 35 104 $ 3,389 $ 4,299 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation Expense Related to All Stock Based Awards Recognized in Statements of Operations and Comprehensive Income (Loss) | Total stock-based compensation expense related to all stock-based options and awards recognized in the condensed consolidated statements of operations and comprehensive loss consisted of: Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Research and development $ 1,274 $ 686 $ 2,801 $ 1,403 General and administrative 1,530 887 3,302 1,813 Total stock-based compensation expense $ 2,804 $ 1,573 $ 6,103 $ 3,216 |
Estimated Weighted-Average Assumptions of Options Granted | The weighted average fair value of options granted in the three and six months ended June 30, 2018 and 2017 reflect the following weighted-average assumptions: Three Months Ended Six Months Ended June 30, 2018 2017 2018 2017 Expected volatility 77.10 % 78.30 % 77.17 % 78.16 % Expected term 6.0 years 6.0 years 6.0 years 6.0 years Risk-free interest rate 2.77 % 2.02 % 2.64 % 2.07 % Expected dividend yield — % — % — % — % |
Certain Information Related to Outstanding Stock Options | The following table provides certain information related to the Company's outstanding stock options: Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 (in thousands, except per share data) Weighted average fair value of options granted, per option $ 13.38 $ 9.29 $ 18.14 $ 7.66 Aggregate grant date fair value of options vested during the period $ 2,268 $ 1,691 $ 3,729 $ 2,967 Total cash received from exercises of stock options $ 242 $ 317 $ 911 $ 1,456 Total intrinsic value of stock options exercised $ 243 $ 645 $ 2,352 $ 3,309 |
Summary of Stock Option Activity | The following is a summary of stock option activity for the six months ended June 30, 2018: Number of Option Shares Weighted Average Exercise Price per Share Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (In years) (In thousands) Outstanding at December 31, 2017 2,889,722 $ 11.25 Granted 921,343 $ 26.61 Exercised (169,911 ) $ 7.43 Forfeited or expired (19,877 ) $ 18.13 Outstanding at June 30, 2018 3,621,277 $ 15.30 7.38 $ 14,543 Exercisable at June 30, 2018 1,825,536 $ 11.21 6.26 $ 10,766 Vested and expected to vest at June 30, 2018 (1) 3,457,648 $ 15.04 7.32 $ 14,230 (1) This represents the number of vested stock option shares as of June 30, 2018, plus the number of unvested stock option shares that the Company estimated as of June 30, 2018 would vest, based on the unvested stock option shares at June 30, 2018 and an estimated forfeiture rate of 7% . |
Summary of RSU Activity | The following is a summary of RSU activity, including both service-based and performance-based RSUs for the six months ended June 30, 2018: Number of RSU Shares Weighted Average Grant Date Fair Value Outstanding at December 31, 2017 517,300 $ 13.87 Granted — $ — Released (174,050 ) $ 13.87 Forfeited (114,700 ) $ 13.87 Outstanding at June 30, 2018 228,550 $ 13.87 |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Earnings (Loss) Per Share | The following table illustrates the determination of loss per share for each period presented. Three Months Ended June 30, Six Months Ended 2018 2017 2018 2017 (in thousands, expect per share amounts) Numerator: Net loss applicable to common stockholders - basic and diluted $ (13,325 ) $ (13,027 ) $ (17,788 ) $ (26,360 ) Denominator: Weighted average shares outstanding - basic 23,402 22,579 23,313 22,479 Dilutive stock options — — — — Dilutive warrants — — — — Weighted average shares outstanding - diluted 23,402 22,579 23,313 22,479 Net loss per share applicable to common stockholders - basic and diluted $ (0.57 ) $ (0.58 ) $ (0.76 ) $ (1.17 ) Anti-dilutive potential common stock equivalents excluded from the calculation of net loss per share: Stock options 786 637 880 610 Stock awards 140 — 254 — Warrants 132 132 132 132 |
Nature of Business - Additional
Nature of Business - Additional Information (Detail) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Cash and cash equivalents and investments | $ 180,300 | ||
Period of sufficiency of cash resources to fund operating plan | 12 months | ||
Accumulated deficit | $ 78,279 | $ (60,490) | $ 76,243 |
Basis of Presentation and Sig24
Basis of Presentation and Significant Accounting Policies - Additional Information (Detail) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2018USD ($)segment | Jan. 01, 2018USD ($) | Dec. 31, 2017USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Number of segments | segment | 1 | ||
Retained earnings | $ (78,279) | $ 60,490 | $ (76,243) |
Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Retained earnings | $ 15,753 |
Basis of Presentation and Sig25
Basis of Presentation and Significant Accounting Policies - Schedule of New Accounting Pronouncements and Changes in Accounting Principles (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Assets | |||
Contract asset | $ 16,000 | $ 16,000 | $ 0 |
Liabilities and stockholders’ equity | |||
Deferred revenue, current portion | 1,413 | 1,428 | 1,442 |
Deferred rent, net of current portion | 1,425 | 9,120 | 0 |
Retained earnings | $ (78,279) | 60,490 | (76,243) |
Calculated under Revenue Guidance in Effect before Topic 606 | |||
Assets | |||
Contract asset | 0 | ||
Liabilities and stockholders’ equity | |||
Deferred revenue, current portion | 1,442 | ||
Deferred rent, net of current portion | 8,859 | ||
Retained earnings | $ 76,243 | ||
Accounting Standards Update 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | |||
Assets | |||
Contract asset | 16,000 | ||
Liabilities and stockholders’ equity | |||
Deferred revenue, current portion | (14) | ||
Deferred rent, net of current portion | 261 | ||
Retained earnings | $ 15,753 |
Basis of Presentation and Sig26
Basis of Presentation and Significant Accounting Policies - Schedule of Cash and Cash Equivalents (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | Dec. 31, 2016 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 58,359 | $ 27,665 | $ 27,591 | |
Restricted cash | 1,557 | 1,557 | 400 | |
Cash, cash equivalents and restricted cash | $ 59,916 | $ 29,222 | $ 27,991 | $ 40,955 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Assets and Liabilities Recognized at Fair Value (Detail) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value, cash equivalents | $ 58,359 | $ 27,665 |
Fair value measurements | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets at fair value | 183,107 | 183,608 |
Fair value measurements | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets at fair value | 142,967 | 150,669 |
Fair value measurements | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets at fair value | 40,140 | 32,939 |
Fair value measurements | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets at fair value | 0 | 0 |
Shorter maturity | Fair value measurements | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value, cash equivalents | 51,295 | 8,108 |
Shorter maturity | Fair value measurements | Money market funds | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value, cash equivalents | 51,295 | 8,108 |
Shorter maturity | Fair value measurements | Money market funds | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value, cash equivalents | 0 | 0 |
Shorter maturity | Fair value measurements | Money market funds | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value, cash equivalents | 0 | 0 |
Longer maturity | Fair value measurements | U.S. Treasury obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value, investments available-for-sale securities | 34,422 | 53,910 |
Longer maturity | Fair value measurements | U.S. Treasury obligations | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value, investments available-for-sale securities | 34,422 | 53,910 |
Longer maturity | Fair value measurements | U.S. Treasury obligations | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value, investments available-for-sale securities | 0 | 0 |
Longer maturity | Fair value measurements | U.S. Treasury obligations | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value, investments available-for-sale securities | 0 | 0 |
Longer maturity | Fair value measurements | Government agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value, investments available-for-sale securities | 87,566 | 121,590 |
Longer maturity | Fair value measurements | Government agency securities | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value, investments available-for-sale securities | 47,426 | 88,651 |
Longer maturity | Fair value measurements | Government agency securities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value, investments available-for-sale securities | 40,140 | 32,939 |
Longer maturity | Fair value measurements | Government agency securities | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value, investments available-for-sale securities | 0 | $ 0 |
Corporate equity securities | Fair value measurements | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value, marketable equity securities | 9,824 | |
Corporate equity securities | Fair value measurements | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value, marketable equity securities | 9,824 | |
Corporate equity securities | Fair value measurements | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value, marketable equity securities | 0 | |
Corporate equity securities | Fair value measurements | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value, marketable equity securities | $ 0 |
Cash, Cash Equivalents, Inves28
Cash, Cash Equivalents, Investments and Marketable Equity Securities - Cash Equivalents and Short-term and Long-term Investments (Detail) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2017 |
Cash and Cash Equivalents | |||
Amortized cost, cash and cash equivalents | $ 58,359 | $ 27,665 | $ 27,591 |
Fair value, cash and cash equivalent | 58,359 | 27,665 | |
U.S. Treasury obligations | |||
Debt Securities | |||
Amortized cost, investments available for sale | 34,470 | 54,004 | |
Unrealized gains | 0 | 0 | |
Unrealized losses | (48) | (94) | |
Fair value, available-for-sale securities | 34,422 | 53,910 | |
Government agency securities | |||
Debt Securities | |||
Amortized cost, investments available for sale | 87,846 | 121,903 | |
Unrealized gains | 0 | 0 | |
Unrealized losses | (280) | (313) | |
Fair value, available-for-sale securities | 87,566 | 121,590 | |
Investments, available for sale | |||
Debt Securities | |||
Amortized cost, investments available for sale | 122,316 | 175,907 | |
Unrealized gains | 0 | 0 | |
Unrealized losses | (328) | (407) | |
Fair value, available-for-sale securities | 121,988 | 175,500 | |
Marketable equity securities | |||
Marketable Securities | |||
Amortized cost | 10,451 | ||
Unrealized gains | 0 | ||
Unrealized losses | 627 | ||
Fair value | 9,824 | ||
Cash | |||
Cash and Cash Equivalents | |||
Amortized cost, cash and cash equivalents | 7,064 | 19,557 | |
Fair value, cash and cash equivalent | 7,064 | 19,557 | |
Money market funds | |||
Cash and Cash Equivalents | |||
Amortized cost, cash and cash equivalents | 51,295 | 8,108 | |
Fair value, cash and cash equivalent | $ 51,295 | $ 8,108 | |
Measurement Input, Expected Term | U.S. Treasury obligations | |||
Debt Securities | |||
Average maturity | 109 days | 184 days | |
Measurement Input, Expected Term | Government agency securities | |||
Debt Securities | |||
Average maturity | 169 days | 229 days |
Cash, Cash Equivalents, Inves29
Cash, Cash Equivalents, Investments and Marketable Equity Securities - Additional Information (Detail) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2018 | Dec. 31, 2017 | |
Cash and Cash Equivalents [Abstract] | ||
Debt securities, realized gain | $ 0 | $ 0 |
Debt securities, realized loss | 0 | 0 |
Equity securities, realized gain | 0 | 0 |
Equity securities, realized loss | 0 | 0 |
Other than temporary impairment losses, investments | $ 0 | $ 0 |
Accrued Expenses and Other Li30
Accrued Expenses and Other Liabilities (Detail) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Payables and Accruals [Abstract] | ||
Accrued professional fees and other | $ 1,076 | $ 628 |
Employee compensation and benefits | 1,286 | 2,797 |
Research and development expenses | 454 | 521 |
Deferred lease incentive, current portion | 538 | 249 |
Deferred rent, current portion | 35 | 104 |
Accrued expenses and other liabilities | $ 3,389 | $ 4,299 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jan. 01, 2018 | Jul. 25, 2017 | Mar. 03, 2017 | |
Operating Loss Carryforwards [Line Items] | |||||||
Income tax benefit | $ 280 | $ 0 | $ 280 | $ 0 | |||
Tax Year 2017 | |||||||
Operating Loss Carryforwards [Line Items] | |||||||
Income tax benefit | 200 | ||||||
Tax Year 2018 | |||||||
Operating Loss Carryforwards [Line Items] | |||||||
Income tax benefit | $ 100 | ||||||
Assets for synthesis and research and development for treating Cystic Fibrosis | Disposed of by sale, not discontinued operations | |||||||
Operating Loss Carryforwards [Line Items] | |||||||
Cash consideration | $ 160,000 | $ 160,000 | |||||
Assets for synthesis and research and development for treating Cystic Fibrosis | Disposed of by sale, not discontinued operations | Indemnification agreement | |||||||
Operating Loss Carryforwards [Line Items] | |||||||
Guarantor maximum liability | $ 16,000 | $ 16,000 | $ 16,000 |
Revenue - Additional Informatio
Revenue - Additional Information (Detail) | Mar. 21, 2018USD ($) | Apr. 30, 2013USD ($)licenseoption | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($)segment | Jun. 30, 2017USD ($) | Oct. 30, 2013USD ($) | Oct. 31, 2015USD ($) | Jan. 01, 2018USD ($) | Dec. 31, 2017USD ($) | Oct. 30, 2015USD ($) |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||
Number of segments | segment | 1 | |||||||||||
Contract asset | $ 16,000,000 | $ 16,000,000 | $ 16,000,000 | $ 0 | ||||||||
Contract liability | 10,500,000 | 10,500,000 | 10,500,000 | |||||||||
Deferred revenue recognized into revenue | 0 | 16,000 | ||||||||||
Deferred revenue, additions | (16,000) | $ (25,000) | ||||||||||
Deferred revenue, current portion | 1,413,000 | 1,413,000 | $ 1,428,000 | 1,442,000 | ||||||||
Allocable arrangement consideration | $ 10,500,000 | 2,000 | $ 10,500,000 | $ 15,000 | 10,481,000 | 35,000 | ||||||
Deferred revenue, noncurrent | 9,120,000 | 9,120,000 | $ 8,859,000 | |||||||||
Celgene | ||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||
Contract liability | 7,800,000 | 7,800,000 | ||||||||||
Number of additional license program | license | 2 | |||||||||||
Agreement term | 7 years | |||||||||||
Deferred revenue, current portion | 1,400,000 | 1,400,000 | ||||||||||
Percentage of royalty on net sales required to pay under the agreement | 20.00% | |||||||||||
Deferred revenue, noncurrent | 6,400,000 | 6,400,000 | ||||||||||
Celgene | License exercise fee | ||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||
Number of options for providing license program | option | 1 | |||||||||||
Celgene | If Celgene exercises its option with respect to the option program | ||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||
Deferred revenue, current portion | $ 10,000,000 | |||||||||||
Celgene | If Celgene exercises its option with respect to the option program | Development milestone | Maximum | ||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||
Eligible payments receivable | 23,000,000 | |||||||||||
Celgene | If Celgene exercises its option with respect to the option program | Regulatory milestones | Maximum | ||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||
Eligible payments receivable | 247,500,000 | |||||||||||
Celgene | If Celgene exercises its rights with respect to either of the two additional license programs | Development milestone | Maximum | ||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||
Eligible payments receivable | 23,000,000 | |||||||||||
Celgene | If Celgene exercises its rights with respect to either of the two additional license programs | Regulatory milestones | Maximum | ||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||
Eligible payments receivable | 247,500,000 | |||||||||||
Celgene | If Celgene exercises its rights with respect to either of the two additional license programs | Sales-based milestones | Maximum | ||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||
Eligible payments receivable | $ 100,000,000 | |||||||||||
Celgene | If Celgene exercises its rights with respect to either of the two additional license programs | License exercise fee | ||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||
Number of options for providing license program | option | 2 | |||||||||||
Deferred revenue, current portion | $ 30,000,000 | |||||||||||
Celgene | One of the other additional license programs | Sales-based milestones | Maximum | ||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||
Eligible payments receivable | 50,000,000 | |||||||||||
Celgene | CTP-730 Program | Non-refundable upfront payment arrangement | ||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||
Deferred revenue, additions | 35,000,000 | |||||||||||
Celgene | CTP-730 Program | Development milestone | ||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||
Eligible payments receivable | $ 8,000,000 | |||||||||||
Allocable arrangement consideration | $ 43,000,000 | |||||||||||
Celgene | CTP-730 Program | Milestone Payment, Phase 3 Clinical Trial | ||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||
Eligible payments receivable | $ 15,000,000 | |||||||||||
Celgene | CTP-730 Program | Regulatory milestones | Maximum | ||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||
Eligible payments receivable | 247,500,000 | |||||||||||
Celgene | CTP-730 Program | Sales-based milestones | Maximum | ||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||
Eligible payments receivable | 50,000,000 | |||||||||||
Celgene | CTP-730 Program | If Celgene exercises its option with respect to the option program | Development milestone | ||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||
Eligible payments receivable | 15,000,000 | |||||||||||
Celgene | Product collaborative arrangement | CTP-730 Program | Development milestone | Maximum | ||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||
Eligible payments receivable | $ 15,000,000 | |||||||||||
License Performance Obligation | Celgene | CTP-730 Program | Development milestone | ||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||
Allocable arrangement consideration | $ 21,700,000 | |||||||||||
R&D Services Performance Obligation | Celgene | CTP-730 Program | Development milestone | ||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||
Allocable arrangement consideration | 1,300,000 | 11,000,000 | ||||||||||
Supply Performance Obligation | Celgene | CTP-730 Program | Development milestone | ||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||
Allocable arrangement consideration | 100,000 | 4,000,000 | ||||||||||
First Discount Performance Obligation | Celgene | CTP-730 Program | Development milestone | ||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||
Allocable arrangement consideration | 3,200,000 | |||||||||||
Second Discount Performance Obligation | Celgene | CTP-730 Program | Development milestone | ||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||
Allocable arrangement consideration | $ 3,200,000 | |||||||||||
License and Service | Celgene | Research and development services deliverable | ||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||
Allocable arrangement consideration | $ 0 | $ 0 | 16,000 | $ 21,000 | ||||||||
First and Second Discount Performance Obligations | Celgene | CTP-730 Program | Development milestone | ||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||
Allocable arrangement consideration | $ 6,400,000 |
Revenue - Avanir - Additional I
Revenue - Avanir - Additional Information (Detail) - USD ($) | Mar. 21, 2018 | Jan. 01, 2018 | Feb. 29, 2012 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Allocable arrangement consideration | $ 10,500,000 | $ 2,000 | $ 10,500,000 | $ 15,000 | $ 10,481,000 | $ 35,000 | ||
Avanir Pharmaceuticals | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Eligible payments receivable | $ 6,000,000 | $ 6,000,000 | ||||||
Allocable arrangement consideration | $ 8,000,000 | |||||||
Avanir Pharmaceuticals | Non-refundable upfront payment arrangement | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Eligible payments receivable | $ 2,000,000 | |||||||
Avanir Pharmaceuticals | Regulatory and commercial launch milestone | Maximum | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Eligible payments receivable | 37,000,000 | |||||||
Avanir Pharmaceuticals | Development milestone | Maximum | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Eligible payments receivable | 21,500,000 | |||||||
Avanir Pharmaceuticals | Sales-based milestones | Maximum | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Eligible payments receivable | $ 125,000,000 | |||||||
Avanir Pharmaceuticals | Product collaborative arrangement | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Percentage of royalty on net sales required to pay under the agreement | 20.00% | |||||||
Avanir Pharmaceuticals | Product collaborative arrangement | Licensed product | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Eligible payments receivable | $ 43,000,000 | |||||||
Avanir Pharmaceuticals | Co-promotion collaborative arrangement | AVP-786 Program | Development milestone | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Eligible payments receivable | 3,000,000 | |||||||
US Food and Drug Administration | Avanir Pharmaceuticals | Product collaborative arrangement | AVP-786 Program | Development milestone | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Eligible payments receivable | 5,000,000 | |||||||
Ministry of Health, Labour and Welfare (MHLW) | Avanir Pharmaceuticals | Product collaborative arrangement | AVP-786 Program | Development milestone | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Eligible payments receivable | $ 1,500,000 | |||||||
Non-Refundable Upfront Payment | Avanir Pharmaceuticals | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Allocable arrangement consideration | 2,000,000 | |||||||
Development Milestone Payments | Avanir Pharmaceuticals | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Allocable arrangement consideration | $ 6,000,000 |
Revenue - Jazz Pharmaceuticals
Revenue - Jazz Pharmaceuticals - Additional Information (Detail) - USD ($) | Mar. 21, 2018 | Feb. 28, 2013 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||
Allocable arrangement consideration | $ 10,500,000 | $ 2,000 | $ 10,500,000 | $ 15,000 | $ 10,481,000 | $ 35,000 | |
Deferred revenue, additions | $ (16,000) | (25,000) | |||||
Jazz Pharmaceuticals | |||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||
Percentage of royalty on net sales required to pay under the agreement | 20.00% | ||||||
Jazz Pharmaceuticals | Non-refundable upfront payment arrangement | |||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||
Deferred revenue, additions | $ 4,000,000 | ||||||
Jazz Pharmaceuticals | Regulatory milestones | Maximum | |||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||
Eligible payments receivable | 35,000,000 | ||||||
Jazz Pharmaceuticals | Sales-based milestones | Maximum | |||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||
Eligible payments receivable | 70,000,000 | ||||||
Jazz Pharmaceuticals | JZP 386 | |||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||
Eligible payments receivable | 4,000,000 | ||||||
Jazz Pharmaceuticals | Co-promotion collaborative arrangement | Development milestone | Maximum | |||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||
Eligible payments receivable | $ 8,000,000 | ||||||
Performance Of Development Support Services | Jazz Pharmaceuticals | |||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||
Allocable arrangement consideration | $ 15,000 | $ 22,000 |
Revenue - Vertex (Details)
Revenue - Vertex (Details) - USD ($) | Mar. 21, 2018 | Mar. 03, 2017 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jan. 01, 2018 | Dec. 31, 2017 | Jul. 25, 2017 |
Revenue Recognition, Milestone Method [Line Items] | ||||||||||
Allocable arrangement consideration | $ 10,500,000 | $ 2,000 | $ 10,500,000 | $ 15,000 | $ 10,481,000 | $ 35,000 | ||||
Contract asset | 16,000,000 | 16,000,000 | $ 16,000,000 | $ 0 | ||||||
Disposed of by sale, not discontinued operations | Assets for synthesis and research and development for treating Cystic Fibrosis | ||||||||||
Revenue Recognition, Milestone Method [Line Items] | ||||||||||
Cash consideration | $ 160,000,000 | $ 160,000,000 | ||||||||
Indemnification agreement | Disposed of by sale, not discontinued operations | Assets for synthesis and research and development for treating Cystic Fibrosis | ||||||||||
Revenue Recognition, Milestone Method [Line Items] | ||||||||||
Guarantor maximum liability | 16,000,000 | $ 16,000,000 | $ 16,000,000 | |||||||
Allocable arrangement consideration | $ 160,000,000 | |||||||||
Guarantor obligations term | 18 months | |||||||||
Contract asset | $ 16,000,000 | $ 16,000,000 | ||||||||
Contingent consideration asset, After achievement of milestone events | Disposed of by sale, not discontinued operations | Assets for synthesis and research and development for treating Cystic Fibrosis | ||||||||||
Revenue Recognition, Milestone Method [Line Items] | ||||||||||
Contingent consideration receivable | $ 90,000,000 | |||||||||
Contingent consideration asset, Upon receipt of FDA marketing approval | Disposed of by sale, not discontinued operations | Assets for synthesis and research and development for treating Cystic Fibrosis | ||||||||||
Revenue Recognition, Milestone Method [Line Items] | ||||||||||
Contingent consideration receivable | 50,000,000 | |||||||||
Contingent consideration asset, Upon completion of pricing and reimbursement agreement | Disposed of by sale, not discontinued operations | Assets for synthesis and research and development for treating Cystic Fibrosis | ||||||||||
Revenue Recognition, Milestone Method [Line Items] | ||||||||||
Contingent consideration receivable | $ 40,000,000 |
Revenue - GSK (Details)
Revenue - GSK (Details) - USD ($) $ in Thousands | 1 Months Ended | 6 Months Ended | |
May 31, 2012 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenue Recognition, Milestone Method [Line Items] | |||
Deferred revenue, additions | $ (16) | $ (25) | |
GSK | Amended Agreement | |||
Revenue Recognition, Milestone Method [Line Items] | |||
Deferred revenue, additions | $ 2,800 |
Revenue - Auspex (Details)
Revenue - Auspex (Details) - USD ($) $ in Thousands | Mar. 21, 2018 | Jun. 30, 2015 | Sep. 30, 2011 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2015 |
Revenue Recognition, Milestone Method [Line Items] | |||||||||
Percent of proceeds payable | 1.44% | ||||||||
Allocable arrangement consideration | $ 10,500 | $ 2 | $ 10,500 | $ 15 | $ 10,481 | $ 35 | |||
Product and Service, Other | Concert Auspex Patent Agreement | |||||||||
Revenue Recognition, Milestone Method [Line Items] | |||||||||
Allocable arrangement consideration | $ 50,200 | $ 50,200 |
Revenue - Processa (Details)
Revenue - Processa (Details) - USD ($) $ in Thousands | Mar. 21, 2018 | Mar. 19, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 |
Revenue Recognition, Milestone Method [Line Items] | |||||||
Allocable arrangement consideration | $ 10,500 | $ 2 | $ 10,500 | $ 15 | $ 10,481 | $ 35 | |
Processa | |||||||
Revenue Recognition, Milestone Method [Line Items] | |||||||
Equity received from sale (in shares) | 2,090,301 | 2,090,301 | |||||
Percent of common stock outstanding | 5.90% | ||||||
Receivables from Customers | $ 10,500 | $ 10,500 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | Jan. 01, 2018 | Jul. 06, 2017 | Jun. 30, 2018 |
Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total unrecognized compensation cost related to unvested options | $ 21.1 | ||
Total unrecognized compensation cost, weighted-average recognition period | 2 years 7 months 18 days | ||
Restricted stock units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total unrecognized compensation cost, weighted-average recognition period | 9 months | ||
Number of RSU shares, granted (in shares) | 500,000 | 0 | |
Number of RSU shares, vested (in shares) | 174,050 | ||
Weighted average exercise price reduction, granted (in dollars per share) | $ 0.001 | ||
Total unrecognized compensation cost related to restricted stock units | $ 1.8 | ||
Restricted stock units | Tranche one | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting percentage | 50.00% | ||
Restricted stock units | Tranche two | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting percentage | 50.00% | ||
Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 3 years | ||
Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 4 years | ||
Awards expiration period | 10 years | ||
2014 Stock Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Additional shares issued under the plan (in shares) | 925,615 | ||
Common stock available for future award grant (in shares) | 1,356,655 |
Stock Based Compensation - Stoc
Stock Based Compensation - Stock-Based Compensation Expense Related to All Stock Based Awards Recognized in Statements of Operations and Comprehensive Income (Loss) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 2,804 | $ 1,573 | $ 6,103 | $ 3,216 |
Research and development | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | 1,274 | 686 | 2,801 | 1,403 |
General and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 1,530 | $ 887 | $ 3,302 | $ 1,813 |
Stock Based Compensation - Esti
Stock Based Compensation - Estimated Weighted-Average Assumptions of Options Granted (Detail) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||
Expected volatility | 77.10% | 78.30% | 77.17% | 78.16% |
Expected term | 6 years | 6 years | 6 years | 6 years |
Risk-free interest rate | 2.77% | 2.02% | 2.64% | 2.07% |
Expected dividend yield | 0.00% | 0.00% | 0.00% | 0.00% |
Stock-Based Compensation - Fair
Stock-Based Compensation - Fair Value of Options (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||
Weighted average grant date fair value of options granted, per option (in dollars per share) | $ 13.38 | $ 9.29 | $ 18.14 | $ 7.66 |
Aggregate grant date fair value of options vested during the period | $ 2,268 | $ 1,691 | $ 3,729 | $ 2,967 |
Total cash received from exercises of stock options | 242 | 317 | 911 | 1,456 |
Total intrinsic value of stock options exercised | $ 243 | $ 645 | $ 2,352 | $ 3,309 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock Option Activity (Detail) $ / shares in Units, $ in Thousands | 6 Months Ended |
Jun. 30, 2018USD ($)$ / sharesshares | |
Number of Option Shares | |
Number of options, Outstanding beginning balance (in shares) | shares | 2,889,722 |
Number of options, Granted (in shares) | shares | 921,343 |
Number of options, Exercised (in shares) | shares | (169,911) |
Number of options, Forfeited or expired (in shares) | shares | (19,877) |
Number of options, Outstanding ending balance (in shares) | shares | 3,621,277 |
Number of options, Exercisable (in shares) | shares | 1,825,536 |
Number of options, Vested and expected to vest (in shares) | shares | 3,457,648 |
Weighted Average Exercise Price per Share | |
Weighted average exercise price per share, Outstanding at beginning of year (in dollars per share) | $ / shares | $ 11.25 |
Weighted average exercise price per share, Granted (in dollars per share) | $ / shares | 26.61 |
Weighted average exercise price per share, Exercised (in dollars per share) | $ / shares | 7.43 |
Weighted average exercise price per share, Forfeited or expired (in dollars per share) | $ / shares | 18.13 |
Weighted average exercise price per share, Outstanding ending balance (in dollars per share) | $ / shares | 15.30 |
Weighted average exercise price per share, Exercisable (in dollars per share) | $ / shares | 11.21 |
Weighted average exercise price per share, Vested and expected to vest (in dollars per share) | $ / shares | $ 15.04 |
Weighted Average Remaining Contractual Term (In years) | |
Weighted average remaining contractual term, Outstanding | 7 years 4 months 17 days |
Weighted average remaining contractual term, Exercisable | 6 years 3 months 4 days |
Weighted average remaining contractual term, Vested and expected to vest | 7 years 3 months 26 days |
Aggregate Intrinsic Value | |
Aggregate intrinsic value, Outstanding | $ | $ 14,543 |
Aggregate intrinsic value, Exercisable | $ | 10,766 |
Aggregate intrinsic value, Vested and expected to vest | $ | $ 14,230 |
Stock options | |
Aggregate Intrinsic Value | |
Estimated forfeiture rate | 7.00% |
Stock-Based Compensation - Su44
Stock-Based Compensation - Summary of RSU Activity (Details) - Restricted stock units - $ / shares | Jul. 06, 2017 | Jun. 30, 2018 |
Number of RSU Shares | ||
Number of RSU shares, Outstanding beginning balance (in shares) | 517,300 | |
Number of RSU shares, Granted (in shares) | 500,000 | 0 |
Number of RSU shares, Released (in shares) | (174,050) | |
Number of RSU shares, Forfeited (in shares) | (114,700) | |
Number of RSU shares, Outstanding ending balance (in shares) | 228,550 | |
Weighted Average Grant Date Fair Value | ||
Weighted average grant date fair value, Outstanding at beginning of year (in dollars per share) | $ 13.87 | |
Weighted average grant date fair value, Granted (in dollars per share) | 0 | |
Weighted average grant date fair value, Released (in dollars per share) | 13.87 | |
Weighted average grant date fair value, Forfeited (in dollars per share) | 13.87 | |
Weighted average grant date fair value, Outstanding at ending of year (in dollars per share) | $ 13.87 |
Earnings (Loss) Per Share - Com
Earnings (Loss) Per Share - Computation of Basic and Diluted Earnings (Loss) Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Numerator: | ||||
Net loss applicable to common stockholders - basic and diluted | $ (13,325) | $ (13,027) | $ (17,788) | $ (26,360) |
Denominator: | ||||
Weighted average shares outstanding - basic (in shares) | 23,402 | 22,579 | 23,313 | 22,479 |
Dilutive stock options (in shares) | 0 | 0 | 0 | 0 |
Dilutive warrants (in shares) | 0 | 0 | 0 | 0 |
Weighted average shares outstanding - diluted (in shares) | 23,402 | 22,579 | 23,313 | 22,479 |
Net loss per share applicable to common stockholders - basic and diluted (in dollars per share) | $ (0.57) | $ (0.58) | $ (0.76) | $ (1.17) |
Stock options | ||||
Anti-dilutive potential common stock equivalents excluded from the calculation of net income (loss) per share: | ||||
Anti-dilutive stock options, restricted stock units, and warrants (in shares) | 786 | 637 | 880 | 610 |
Stock awards | ||||
Anti-dilutive potential common stock equivalents excluded from the calculation of net income (loss) per share: | ||||
Anti-dilutive stock options, restricted stock units, and warrants (in shares) | 140 | 0 | 254 | 0 |
Warrants | ||||
Anti-dilutive potential common stock equivalents excluded from the calculation of net income (loss) per share: | ||||
Anti-dilutive stock options, restricted stock units, and warrants (in shares) | 132 | 132 | 132 | 132 |
Commitments (Details)
Commitments (Details) $ in Thousands | 6 Months Ended | |||
Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Jan. 01, 2018USD ($) | Dec. 31, 2017ft² | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Office space (sq ft) | ft² | 55,500 | |||
Rent expense | $ 1,400 | |||
Tenant improvement allowance | $ 5,000 | |||
Tenant improvements paid by landlord | $ 4,202 | $ 0 |