Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | 4-May-15 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | FALSE | |
Document Period End Date | 31-Mar-15 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | ZGNX | |
Entity Registrant Name | ZOGENIX, INC. | |
Entity Central Index Key | 1375151 | |
Current Fiscal Year End Date | -19 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 153,363,743 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $21,314 | $42,205 |
Restricted cash | 8,500 | 8,500 |
Trade accounts receivable, net | 1,624 | 6,078 |
Inventory | 13,102 | 11,444 |
Prepaid expenses and other current assets | 3,460 | 2,048 |
Other current assets | 547 | 507 |
Current assets of discontinued operations | 6,636 | 7,196 |
Total current assets | 55,183 | 77,978 |
Property and equipment, net | 10,276 | 10,618 |
Intangible assets | 102,500 | 102,500 |
Goodwill | 6,234 | 6,234 |
Other assets | 2,646 | 2,832 |
Noncurrent assets of discontinued operations | 3,405 | 2,673 |
Total assets | 180,244 | 202,835 |
Current liabilities: | ||
Accounts payable | 5,191 | 4,742 |
Accrued expenses | 6,567 | 6,016 |
Accrued compensation | 1,657 | 3,157 |
Common stock warrant liabilities | 4,683 | 5,093 |
Revolving credit facility | 2,565 | 1,450 |
Long-term debt, current portion | 1,881 | 0 |
Deferred revenue | 1,031 | 1,472 |
Current liabilities of discontinued operations | 21,397 | 22,307 |
Total current liabilities | 44,972 | 44,237 |
Note payable | 2,549 | 2,461 |
Long term debt | 17,447 | 19,242 |
Deferred revenue, less current portion | 7,345 | 7,063 |
Deferred income taxes | 52,000 | 53,000 |
Deferred income taxes | 20,500 | 20,500 |
Other long-term liabilities | 1,138 | 1,053 |
Stockholders' equity: | ||
Common stock | 153 | 153 |
Additional paid-in capital | 458,661 | 456,786 |
Accumulated deficit | -424,521 | -401,660 |
Total stockholders’ equity | 34,293 | 55,279 |
Total liabilities and stockholders’ equity | $180,244 | $202,835 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Common Stock, Par or Stated Value Per Share | $0.00 | $0.00 |
Common Stock, Shares Authorized | 200,000,000 | 200,000,000 |
Common Stock, Shares, Issued | 153,365,000 | 153,363,000 |
Common Stock, Shares, Outstanding | 153,365,000 | 153,363,000 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations and Comprehensive Loss (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Revenue: | ||
Net product revenue | $0 | $6,485 |
Contract revenue | 4,181 | 0 |
Service and other product revenue | 433 | 904 |
Total revenue | 4,614 | 7,389 |
Operating expenses: | ||
Cost of sales | 0 | 3,333 |
Cost of contract manufacturing | 3,923 | 0 |
Royalty expense | 72 | 267 |
Research and development | 5,150 | 2,541 |
Selling, general and administrative | 6,268 | 12,528 |
Change in fair value of contingent purchase consideration | -1,000 | 0 |
Total operating expenses | 14,413 | 18,669 |
Loss from operations | -9,799 | -11,280 |
Other income (expense): | ||
Interest income | 5 | 6 |
Interest expense | -648 | -1,886 |
Change in fair value of warrant liabilities | 410 | 8,269 |
Change in fair value of embedded derivatives | 0 | -14 |
Other income (expense) | -120 | -47 |
Total other income (expense) | -353 | 6,328 |
Net loss before income taxes | -10,152 | -4,952 |
Provision for income taxes | -13 | 0 |
Net loss from continuing operations | -10,165 | -4,952 |
Loss from discontinued operations, net of applicable tax | -12,696 | -15,980 |
Net loss | -22,861 | -20,932 |
Basic net loss per share: | ||
Continuing operations, usd per share | ($0.07) | ($0.04) |
Discontinued operations, usd per share | ($0.08) | ($0.11) |
Total, usd per share | ($0.15) | ($0.15) |
Diluted net loss per share: | ||
Continuing operations, usd per share | ($0.07) | ($0.09) |
Discontinued operations, usd per share | ($0.08) | ($0.11) |
Net income (loss) per share, diluted, usd per share | ($0.15) | ($0.20) |
Weighted average common shares outstanding, basic | 153,362 | 139,309 |
Weighted average common shares outstanding, diluted | 153,362 | 145,323 |
Comprehensive loss | ($22,861) | ($20,932) |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Operating activities: | ||
Net loss for basic EPS | ($22,861) | ($20,932) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock-based compensation | 1,871 | 2,507 |
Depreciation and amortization | 393 | 406 |
Amortization of debt issuance costs and non-cash interest | 257 | 161 |
Change in fair value of warrant liabilities | -410 | -8,269 |
Change in fair value of embedded derivatives | 0 | 14 |
Change in fair value of contingent purchase consideration | -1,000 | 0 |
Changes in operating assets and liabilities: | ||
Trade accounts receivable | 4,207 | -5,015 |
Inventory, net | -450 | -4,918 |
Prepaid expenses and other current assets | -1,853 | 882 |
Other assets | -621 | -534 |
Accounts payable and accrued expenses | 947 | 6,937 |
Deferred rent | -26 | -26 |
Deferred revenue | -2,401 | 5,963 |
Net cash used in operating activities | -21,947 | -22,824 |
Investing activities: | ||
Purchases of property and equipment | -54 | -15 |
Net cash used in investing activities | -54 | -15 |
Financing activities: | ||
Proceeds from revolving credit facility | 1,450 | 0 |
Repayment of debt | -343 | 0 |
Proceeds from exercise of common stock options | 3 | 1,502 |
Net cash provided by financing activities | 1,110 | 1,502 |
Net (decrease) increase in cash and cash equivalents | -20,891 | -21,337 |
Cash and cash equivalents at beginning of period | 42,205 | 72,021 |
Cash and cash equivalents at end of period | 21,314 | 50,684 |
Noncash investing and financing activities: | ||
Change in purchases of property and equipment in accounts payable | $0 | ($310) |
Organization_and_Basis_of_Pres
Organization and Basis of Presentation | 3 Months Ended |
Mar. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | Organization and Basis of Presentation |
Zogenix, Inc. (the Company) is a pharmaceutical company committed to developing and commercializing therapies that address specific clinical needs for people living with central nervous system disorders who need innovative treatment alternatives to help them return to normal daily functioning. The Company was incorporated in the state of Delaware on May 11, 2006 as SJ2 Therapeutics, Inc. and commenced operations on August 25, 2006. On August 28, 2006, the Company changed its name to Zogenix, Inc. | |
The Company has incurred significant net losses since inception and has relied on its ability to fund its operations through equity financings, debt financings, revenues from the sale of products and proceeds from business collaborations and divestitures. As the Company continues to incur losses, successful transition to profitability is dependent upon achieving a level of revenues adequate to support the Company’s cost structure. This may not occur and, unless and until it does, the Company will continue to need to raise additional cash. These conditions raised substantial doubt about the Company’s ability to continue as a going concern as noted in our consolidated financial statements for the year ended December 31, 2014. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern and do not include any adjustments that might result from the outcome of this uncertainty. This basis of accounting contemplates the recovery of the Company’s assets and the satisfaction of liabilities in the normal course of business. | |
Subsequent to the issuance of the Company's annual report for the year ended December 31, 2014 dated March 11, 2015, and the reporting period included in these consolidated financial statements for the three months ended March 31, 2015, the Company sold its Zohydro ER business to Ferrimill Limited (Ferrimill) and received cash proceeds, net of $10,000,000 placed in escrow, of approximately $70,000,000, plus approximately $900,000 for Zohydro ER finished goods inventory acquired by the purchaser. Also, approximately 100 sales and marketing employees transitioned to the purchaser in conjunction with the divestiture. | |
On May 16, 2014, the Company sold its Sumavel DosePro business to Endo Ventures Bermuda and Endo Ventures Limited (collectively, Endo). In connection with the sale, the Company entered into a supply agreement under which the Company performs contract manufacturing services to provide Sumavel DosePro product exclusively to the purchaser subsequent to the sale. | |
Recent Developments | |
On April 24, 2015, the Company sold its Zohydro ER business, including the registered patents and trademarks, certain contracts, the new drug application and other regulatory approvals, documentation and authorizations, the books and records, marketing materials and product data relating to Zohydro ER. Zohydro ER activity has been excluded from continuing operations for all periods herein and reported as discontinued operations as a result of this sale. See Note 6, Sale of Zohydro ER business, for additional information on the divestiture of the Company's Zohydro ER product line. All prior period Zohydro ER business information herein has been recast to conform to this presentation. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 3 Months Ended | |||||||||||||||
Mar. 31, 2015 | ||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies | |||||||||||||||
Financial Statement Preparation and Use of Estimates | ||||||||||||||||
The unaudited consolidated financial statements contained in this Quarterly Report on Form 10-Q have been prepared by Zogenix, Inc. according to the rules and regulations of the Securities and Exchange Commission (SEC) and, therefore, certain information and disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP) have been omitted. | ||||||||||||||||
In the opinion of management, the accompanying unaudited consolidated financial statements for the periods presented reflect all adjustments, which are normal and recurring, necessary to fairly state the financial position, results of operations and cash flows. These unaudited consolidated financial statements should be read in conjunction with the audited financial statements included in the Company's Annual Report on Form 10-K and Form 10-K/A for the fiscal year ended December 31, 2014, each as filed with the SEC. | ||||||||||||||||
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results may differ from those estimates. | ||||||||||||||||
Principles of Consolidation | ||||||||||||||||
The unaudited interim consolidated financial statements include the accounts of Zogenix, Inc. and its wholly owned subsidiary Zogenix Europe Limited, which was incorporated under the laws of England and Wales in June 2010. All intercompany transactions and investments have been eliminated in consolidation. Zogenix Europe Limited’s functional currency is the U.S. dollar, the reporting currency of its parent. | ||||||||||||||||
Restricted Cash | ||||||||||||||||
In connection with its sale of the Sumavel DosePro business in May 2014, the Company has $8,500,000 of cash in escrow as of March 31, 2015 and December 31, 2014 to fund potential indemnification claims for a period of 12 months from the closing date of the sale. The Company classifies the cash flow from this restricted cash as an investing activity in the consolidated statement of cash flows as the source of the restricted cash is related to the sale of the Sumavel DosePro business. | ||||||||||||||||
Fair Value Measurements | ||||||||||||||||
The carrying amount of financial instruments consisting of cash, restricted cash, trade accounts receivable, prepaid expenses and other current assets, accounts payable, accrued expenses and accrued compensation included in the Company’s consolidated financial statements are reasonable estimates of fair value due to their short maturities. Based on the borrowing rates currently available to the Company for loans with similar terms, management believes the fair value of long-term debt approximates its carrying value. | ||||||||||||||||
Authoritative guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: | ||||||||||||||||
Level 1: | Observable inputs such as quoted prices in active markets; | |||||||||||||||
Level 2: | Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and | |||||||||||||||
Level 3: | Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. | |||||||||||||||
The Company classifies its cash equivalents within Level 1 of the fair value hierarchy because it values its cash equivalents using quoted market prices. The Company classifies its common stock warrant liabilities and contingent purchase consideration within Level 3 of the fair value hierarchy because they are valued using valuation models with significant unobservable inputs. Assets and liabilities measured at fair value on a recurring basis at March 31, 2015 and December 31, 2014 are as follows (in thousands): | ||||||||||||||||
Fair Value Measurements at Reporting Date Using | ||||||||||||||||
Quoted | Significant | Significant | Total | |||||||||||||
Prices in | Other | Unobservable | ||||||||||||||
Active | Observable | Inputs | ||||||||||||||
Markets | Inputs | (Level 3) | ||||||||||||||
for | (Level 2) | |||||||||||||||
Identical | ||||||||||||||||
Assets | ||||||||||||||||
(Level 1) | ||||||||||||||||
At March 31, 2015 | ||||||||||||||||
Assets | ||||||||||||||||
Cash equivalents(1) | $ | 18,125 | — | — | $ | 18,125 | ||||||||||
Liabilities | ||||||||||||||||
Common stock warrant liabilities(2) | $ | — | — | 4,683 | $ | 4,683 | ||||||||||
Contingent purchase consideration (3) | $ | — | — | 52,000 | $ | 52,000 | ||||||||||
At December 31, 2014 | ||||||||||||||||
Assets | ||||||||||||||||
Cash equivalents(1) | $ | 8,021 | — | — | $ | 8,021 | ||||||||||
Liabilities | ||||||||||||||||
Common stock warrant liabilities(2) | $ | — | — | 5,093 | $ | 5,093 | ||||||||||
Contingent purchase consideration (3) | $ | — | — | 53,000 | $ | 53,000 | ||||||||||
-1 | Cash equivalents are comprised of money market fund shares and are included as a component of cash and cash equivalents on the consolidated balance sheets. | |||||||||||||||
-2 | Common stock warrant liabilities include liabilities associated with warrants issued in connection with the Company's July 2012 public offering of common stock and warrants (see Note 4) and warrants issued in connection with the financing agreement entered into with Healthcare Royalty Partners (Healthcare Royalty), dated June 30, 2011, (the Healthcare Royalty financing agreement), which are measured at fair value using the Black-Scholes option pricing valuation model. The assumptions used in the Black-Scholes option pricing valuation model for both common stock warrant liabilities were: (a) a risk-free interest rate based on the rates for U.S. Treasury zero-coupon bonds with maturities similar to those of the remaining contractual term of the warrants; (b) an assumed dividend yield of zero based on the Company’s expectation that it will not pay dividends in the foreseeable future; (c) an expected term based on the remaining contractual term of the warrants; and (d) given the Company’s lack of relevant historical data due to the Company’s limited historical experience, an expected volatility based upon the Company's historical volatility, supplemented with historical volatility of comparable companies whose share prices have been publicly available for a sufficient period of time. The significant unobservable input used in measuring the fair value of the common stock warrant liabilities associated with the Healthcare Royalty financing agreement is the expected volatility. Significant increases in volatility would result in a higher fair value measurement. The following additional assumptions were used in the Black-Scholes option pricing valuation model to measure the fair value of the warrants sold in the July 2012 public offering: (a) management's projections regarding the probability of the occurrence of an extraordinary event and the timing of such event; and for the valuation scenario in which an extraordinary event occurs that is not an all cash transaction or an event whereby a public acquirer would assume the warrants, and (b) an expected volatility rate using the Company's historical volatility, supplemented with historical volatility of comparable companies, through the projected date of public announcement of an extraordinary transaction, blended with a rate equal to the lesser of 40% and the 180-day volatility rate obtained from the HVT function on Bloomberg as of the trading day immediately following the public announcement of an extraordinary transaction. The significant unobservable inputs used in measuring the fair value of the common stock warrant liabilities associated with the July 2012 public offering are the expected volatility and the probability of the occurrence of an extraordinary event. Significant increases in volatility would result in a higher fair value measurement and significant increases in the probability of an extraordinary event occurring would result in a significantly lower fair value measurement. The change in the fair value of the common stock warrant liabilities as of March 31, 2015 was primarily driven by the decrease in the expected term of the warrant at March 31, 2015 as compared against December 31, 2014 measurement dates. | |||||||||||||||
-3 | Contingent purchase consideration was measured at fair value using the income approach based on significant unobservable inputs including management's estimates of the probabilities of achieving specific net sales levels and development milestones and appropriate risk adjusted discount rates. Significant changes of either unobservable input could have a significant effect on the calculation of fair value of the contingent purchase consideration liability. | |||||||||||||||
The following table provides a reconciliation of liabilities measured at fair value using significant unobservable inputs (Level 3) for the three months ended March 31, 2015 (in thousands): | ||||||||||||||||
Contingent Purchase Consideration | Common | |||||||||||||||
Stock | ||||||||||||||||
Warrant | ||||||||||||||||
Liabilities | ||||||||||||||||
Balance at December 31, 2014 | $ | 53,000 | $ | 5,093 | ||||||||||||
Changes in fair value | (1,000 | ) | (410 | ) | ||||||||||||
Balance at March 31, 2015 | $ | 52,000 | $ | 4,683 | ||||||||||||
Changes in fair value of the liabilities shown in the table above are recorded through change in fair value of contingent consideration in operating expenses and change in fair value of warrant liabilities in other income (expense) in the consolidated statements of operations and comprehensive loss. | ||||||||||||||||
Net Loss per Share | ||||||||||||||||
Basic net loss per share is calculated by dividing the net loss by the weighted average number of common shares outstanding for the period, reduced by weighted average shares subject to repurchase, without consideration for common stock equivalents. Diluted net loss per share is computed by dividing the net loss by the weighted average number of common share equivalents outstanding for the period determined using the treasury-stock method and as-if converted method, as applicable. For purposes of this calculation, stock options, restricted stock units and warrants are considered to be common stock equivalents and are only included in the calculation of diluted net loss per share when their effect is dilutive. | ||||||||||||||||
The following table presents the computation of basic and diluted net loss per share for continuing and discontinued operations (in thousands, except per share amounts): | ||||||||||||||||
Three Months Ended March 31, | ||||||||||||||||
2015 | 2014 | |||||||||||||||
Continuing operations | Discontinued operations | Continuing operations | Discontinued operations | |||||||||||||
Numerator | ||||||||||||||||
Net loss, basic | $ | (10,165 | ) | $ | (12,696 | ) | $ | (4,952 | ) | $ | (15,980 | ) | ||||
Effect of dilutive securities: | ||||||||||||||||
Common stock warrants | — | — | (8,269 | ) | — | |||||||||||
Non-employee stock options and restricted stock units | — | — | (132 | ) | — | |||||||||||
— | — | (8,401 | ) | — | ||||||||||||
Net loss, diluted | $ | (10,165 | ) | $ | (12,696 | ) | $ | (13,353 | ) | $ | (15,980 | ) | ||||
Denominator | ||||||||||||||||
Weighted average common shares outstanding, basic | 153,362 | 153,362 | 139,309 | 139,309 | ||||||||||||
Effect of dilutive securities: | ||||||||||||||||
Common stock warrants | — | — | 5,870 | — | ||||||||||||
Non-employee stock options and restricted stock units | — | — | 144 | — | ||||||||||||
Dilutive potential shares of common stock | — | — | 6,014 | — | ||||||||||||
Weighted average common shares outstanding, diluted | 153,362 | 153,362 | 145,323 | 139,309 | ||||||||||||
Basic net loss per share | $ | (0.07 | ) | $ | (0.08 | ) | $ | (0.04 | ) | $ | (0.11 | ) | ||||
Diluted net loss per share | $ | (0.07 | ) | $ | (0.08 | ) | $ | (0.09 | ) | $ | (0.11 | ) | ||||
There were 730,000 and 11,246,000 dilutive securities (in common stock equivalent shares), from common stock options and restricted stock units excluded from the calculation of diluted net loss during the three months ended March 31, 2015 and 2014, respectively, because to include them would be anti-dilutive. Common stock warrants of 15,724,000 and 508,000 were excluded from the calculation of diluted net loss during the three months ended March 31, 2015 and 2014, respectively, as the exercise price of the warrants was greater than the Company's average stock price during these periods. | ||||||||||||||||
Goodwill and Intangible Assets | ||||||||||||||||
Goodwill represents the excess of acquisition cost over the fair value of the net assets of acquired businesses. Goodwill | ||||||||||||||||
has an indefinite useful life and is not amortized, but instead tested for impairment annually. Intangible assets consist of in-process research and development with an indefinite useful life that is not amortized, but instead tested for impairment until the successful completion and commercialization or abandonment of the associated research and development efforts, at which point the in-process research and development asset is either amortized over its estimated useful life or written-off immediately. | ||||||||||||||||
Impairment of Long-Lived Assets | ||||||||||||||||
The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. | ||||||||||||||||
Revenue Recognition | ||||||||||||||||
The Company recognized revenue from contract manufacturing, service fees earned on collaborative arrangements and the sale of Sumavel DosePro prior to its sale in May 2014. The company also recognized revenue from the sale of Zohydro ER prior to its sale to Ferrimill in April 2015, which is included in net loss from discontinued operations in the consolidated statement of operations and comprehensive loss. Revenue is recognized when (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred and title has passed, (iii) the price is fixed or determinable and (iv) collectability is reasonably assured. Revenue from sales transactions where the buyer has the right to return the product is recognized at the time of sale only if (a) the Company’s price to the buyer is substantially fixed or determinable at the date of sale, (b) the buyer has paid the Company, or the buyer is obligated to pay the Company and the obligation is not contingent on resale of the product, (c) the buyer’s obligation to the Company would not be changed in the event of theft or physical destruction or damage of the product, (d) the buyer acquiring the product for resale has economic substance apart from that provided by the Company, (e) the Company does not have significant obligations for future performance to directly bring about resale of the product by the buyer, and (f) the amount of future returns can be reasonably estimated. Prior to the divestiture of the Zohydro ER business, the Company deferred recognition of revenue on product shipments of Zohydro ER until the right of return no longer existed, as the Company was not able to reliably estimate expected returns of the product at the time of shipment given the limited sales history of Zohydro ER. | ||||||||||||||||
Revenue arrangements with multiple elements are divided into separate units of accounting if certain criteria are met, including whether the delivered element has stand-alone value to the customer. The consideration received is allocated among the separate units based on their respective fair values, and the applicable revenue recognition criteria are applied to each of the separate units. The application of the multiple element guidance requires subjective determinations, and requires the Company to make judgments about the individual deliverables and whether such deliverables are separable from the other aspects of the contractual relationship. Deliverables are considered separate units of accounting provided that: (1) the delivered item(s) has value to the customer on a stand-alone basis and (2) if the arrangement includes a general right of return relative to the delivered item(s), delivery or performance of the undelivered item(s) is considered probable and substantially in the Company's control. In determining the units of accounting, the Company evaluates certain criteria, including whether the deliverables have stand-alone value, based on the consideration of the relevant facts and circumstances for each arrangement. In addition, the Company considers whether the buyer can use the other deliverable(s) for their intended purpose without the receipt of the remaining element(s), whether the value of the deliverable is dependent on the undelivered item(s), and whether there are other vendors that can provide the undelivered element(s). | ||||||||||||||||
Arrangement consideration that is fixed or determinable is allocated among the separate units of accounting using the relative selling price method, and the applicable revenue recognition criteria, as described above, are applied to each of the separate units of accounting in determining the appropriate period or pattern of recognition. The Company determines the estimated selling price for deliverables within each agreement using vendor-specific objective evidence (VSOE) of selling price, if available, third-party evidence (TPE) of selling price if VSOE is not available, or management's best estimate of selling price (BESP) if neither VSOE nor TPE is available. Determining the BESP for a unit of accounting requires significant judgment. In developing the BESP for a unit of accounting, the Company considers applicable market conditions and relevant entity-specific factors, including factors that were contemplated in negotiating the agreement with the customer and estimated costs. | ||||||||||||||||
Contract Manufacturing Revenue | ||||||||||||||||
The Company and Endo entered into a supply agreement in connection with the sale of the Sumavel DosePro business to Endo in May 2014. Under the terms of the supply agreement, the Company retains the sole and exclusive right and the obligation to manufacture or supply Sumavel DosePro to Endo. The Company recognizes deferred revenue related to its supply of Sumavel DosePro as contract manufacturing revenue when earned on a "proportional performance" basis as product is delivered. The Company recognizes revenue related to its sale of Sumavel DosePro product, equal to the cost of contract manufacturing plus a 2.5% mark-up, upon the transfer of title to Endo. The Company supplies Sumavel DosePro product based on non-cancellable purchase orders. The Company initially defers revenue for any consideration received in advance of services being performed and product being delivered, and recognizes revenue pursuant to the related pattern of performance, based on total product delivered relative to the total estimated product delivery over the minimum eight year term of the supply agreement. The Company continually evaluates the performance period and will adjust the period of revenue recognition if circumstances change. | ||||||||||||||||
In addition, the Company follows the authoritative accounting guidance when reporting revenue as gross when the Company acts as a principal versus reporting revenue as net when the Company acts as an agent. For transactions in which the Company acts as a principal, has discretion to choose suppliers, bears credit risk and performs a substantive part of the services, revenue is recorded at the gross amount billed to a customer and costs associated with these reimbursements are reflected as a component of cost of sales for contract manufacturing services. | ||||||||||||||||
Product Revenue, Net | ||||||||||||||||
The Company sold Sumavel DosePro through May 2014, and sold Zohydro ER through April 2015, in the United States to wholesale pharmaceutical distributors and retail pharmacies, or collectively the Company's customers, subject to rights of return within a period beginning six months prior to, and ending 12 months following, product expiration. The Company recognized Sumavel DosePro product sales at the time title transferred to its customer, and reduced product sales for estimated future product returns and sales allowances in the same period the related revenue was recognized. The Company is responsible for all returns of Sumavel DosePro product distributed by the Company prior to the sale of the Sumavel DosePro business up to a maximum per unit amount as specified in the sales agreement. | ||||||||||||||||
Given the limited sales history of Zohydro ER, prior to the divestiture of the Zohydro ER business, the Company was not able to reliably estimate expected returns of the product at the time of shipment. Accordingly, the Company deferred recognition of revenue on Zohydro ER product shipments until the right of return no longer existed, which occurred at the earlier of the time Zohydro ER was dispensed through patient prescriptions or expiration of the right of return. The Company estimated Zohydro ER patient prescriptions dispensed using an analysis of third-party syndicated data. Zohydro ER was launched in March 2014 and, accordingly, the Company did not have a significant history estimating the number of patient prescriptions dispensed. If the Company underestimated or overestimated patient prescriptions dispensed for a given period, adjustments to revenue from discontinued operations may be necessary in future periods. The deferred revenue balance did not have a direct correlation with future revenue recognition as the Company recorded sales deductions at the time the prescription unit was dispensed. In addition, the costs of Zohydro ER associated with the deferred revenue were recorded as deferred costs, which were included in inventory, until such time the related deferred revenue was recognized. The Company will be responsible for returns of product sold, rebates and chargebacks for product dispensed and related Health Care Reform fees through the date of the sale of the Zohydro ER business in April 2015. Revenue for Zohydro ER is included in discontinued operations in the consolidated statement of operations and comprehensive loss. | ||||||||||||||||
Segment Reporting | ||||||||||||||||
Management has determined that the Company operates in one business segment, which is the development and commercialization of pharmaceutical products for people living with central nervous system disorders. | ||||||||||||||||
Recent Accounting Pronouncements | ||||||||||||||||
In April 2014, the Financial Accounting Standards Board (FASB) issued an accounting update that raises the threshold for disposals to qualify as discontinued operations and allows companies to have significant continuing involvement with and continuing cash flows from or to the discontinued operations. This accounting update also requires additional disclosures for discontinued operations and new disclosures for individually material disposal transactions that do not meet the definition of a discontinued operation. This guidance was effective for fiscal years beginning after December 15, 2014, with early adoption permitted. The Company has adopted the guidance in the first quarter of 2015. | ||||||||||||||||
In May 2014, the FASB issued new accounting guidance related to revenue recognition. This new standard will replace all current GAAP guidance on this topic and eliminate all industry-specific guidance. The new revenue recognition standard provides a unified model to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. This guidance will be effective for fiscal years beginning after December 15, 2017, including interim periods within that reporting period, and can be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. Early adoption is prohibited. The Company is evaluating the transition method, timing and impact of adopting this new accounting standard on its financial statements and related disclosures. | ||||||||||||||||
In April 2015, the FASB issued guidance which requires debt issuance costs related to a recognized debt liability to be presented on the balance sheet as a direct deduction from the debt liability instead of as an asset. The guidance is effective for annual and interim reporting periods beginning on or after December 15, 2016. Early adoption is permitted. The Company is evaluating the timing and impact of adopting this new accounting standard on its financial statements and related disclosures and does not expect that the adoption of the guidance will have a material impact on the Company’s financial statements. |
Inventory
Inventory | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Disclosure Inventory Net [Abstract] | ||||||||
Inventory | Inventory | |||||||
Inventory consists of the following (in thousands): | ||||||||
31-Mar-15 | December 31, 2014 | |||||||
Raw materials | $ | 3,742 | $ | 3,453 | ||||
Work in process | 9,360 | 7,991 | ||||||
Total | $ | 13,102 | $ | 11,444 | ||||
Common_Stock_Warrants
Common Stock Warrants | 3 Months Ended |
Mar. 31, 2015 | |
Disclosure Common Stock Warrants Additional Informational [Abstract] | |
Common Stock Warrants | Common Stock Warrants |
In July 2012, in connection with a public offering of common stock and warrants, the Company sold warrants to purchase 15,784,200 shares of common stock (including over-allotment purchase). The warrants are exercisable at an exercise price of $2.50 per share and will expire on July 27, 2017, which is five years from the date of issuance. As the warrants contain a cash settlement feature upon the occurrence of certain events that may be outside of the Company’s control, the warrants are recorded as a current liability and are marked to market at each reporting period (see Note 2). During the three months ended March 31, 2015, no warrants to purchase shares of common stock were exercised, and during the year ended December 31, 2014, warrants to purchase 465,250 shares of common stock were exercised. The Company recognized $0 and $1,163,000 in proceeds from the exercise of warrants during the three months ended March 31, 2015 and during the year ended December 31, 2014, respectively. The fair value of the warrants outstanding was approximately $4,585,000 and $4,978,000 as of March 31, 2015 and December 31, 2014, respectively. | |
In July 2011, upon the closing of and in connection with the Healthcare Royalty financing agreement, the Company issued to Healthcare Royalty a warrant exercisable into 225,000 shares of common stock. The warrant is exercisable at $9.00 per share of common stock and has a term of ten years. As the warrant contains covenants where compliance with such covenants may be outside of the Company’s control, the warrant was recorded as a current liability and is marked to market at each reporting date (see Note 2). The fair value of the warrant was approximately $98,000 and $115,000 as of March 31, 2015 and December 31, 2014, respectively. |
StockBased_Compensation
Stock-Based Compensation | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||
Stock-Based Compensation | Stock-Based Compensation | |||||||
The Company uses the Black-Scholes option-pricing model for determining the estimated fair value of stock-based compensation for stock-based awards to employees and the board of directors. The assumptions used in the Black-Scholes option-pricing model for the three months ended March 31, 2015 and 2014 are as follows: | ||||||||
Three Months Ended March 31, | ||||||||
2015 | 2014 | |||||||
Risk free interest rate | 1.50% | 2.00% | ||||||
Expected term | 5.8 to 6.1 years | 6.0 to 6.1 years | ||||||
Expected volatility | 78.50% | 84.90% | ||||||
Expected dividend yield | — | % | — | % | ||||
The risk-free interest rate assumption was based on the rates for U.S. Treasury zero-coupon bonds with maturities similar to those of the expected term of the award being valued. The assumed dividend yield was based on the Company’s expectation of not paying dividends in the foreseeable future. The weighted average expected term of options was calculated using the simplified method as prescribed by accounting guidance for stock-based compensation. This decision was based on the lack of relevant historical data due to the Company’s limited historical experience. In addition, due to the Company’s limited historical data, the estimated volatility was calculated based upon the Company's historical volatility, supplemented with historical volatility of comparable companies whose share prices are publicly available for a sufficient period of time. | ||||||||
The Company recognized stock-based compensation expense in continuing operations as follows (in thousands): | ||||||||
Three Months Ended March 31, | ||||||||
2015 | 2014 | |||||||
Cost of goods sold | $ | 93 | $ | 127 | ||||
Research and development | 224 | 357 | ||||||
Selling, general and administrative | 1,033 | 1,560 | ||||||
Total | $ | 1,350 | $ | 2,044 | ||||
As of March 31, 2015, there was approximately $10,447,000 of total unrecognized compensation costs related to outstanding employee and board of director stock options, which is expected to be recognized over a weighted average period of 3.0 years. | ||||||||
As of March 31, 2015, there were 233,000 unvested stock options outstanding to consultants, with approximately $256,000 of related unrecognized compensation expense based on a March 31, 2015 measurement date. These unvested stock options outstanding to consultants are expected to vest over a weighted average period of 2.9 years. In accordance with accounting guidance for stock-based compensation, the Company remeasures the fair value of stock option grants to non-employees at each reporting date and recognizes the related income or expense during their vesting period. The income recognized from the valuation of stock options and restricted stock units to consultants was immaterial for the three months ended March 31, 2015 and $174,000 for the three months ended March 31, 2014. Stock option expense for awards issued to consultants is included in the consolidated statement of operations and comprehensive loss within selling, general and administrative expense. |
Sale_of_Zohydro_ER_business
Sale of Zohydro ER business | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Discontinued Operations and Disposal Groups [Abstract] | ||||||||
Sale of Zohydro ER business | Sale of Zohydro ER business | |||||||
On March 10, 2015, the Company entered into an asset purchase agreement with Pernix Ireland Limited and Pernix Therapeutics Holdings, Inc., (Pernix Therapeutics, and, together with Pernix Ireland Limited, Pernix) whereby the Company agreed to sell its Zohydro ER business to Pernix, and on April 24, 2015, the Company completed the sale to Ferrimill, a subsidiary of Pernix, as a substitute purchaser. The Zohydro ER business divested included the registered patents and trademarks, certain contracts, the new drug application and other regulatory approvals, documentation and authorizations, the books and records, marketing materials and product data relating to Zohydro ER. | ||||||||
The Company received consideration of $80,000,000 in cash, $10,000,000 of which has been deposited in escrow to fund potential indemnification claims for a period of 12 months, and $11,900,000 in Pernix common stock. Further, Ferrimill purchased Zohydro ER inventory of $900,000. The Company has agreed to indemnify the purchaser for certain intellectual property matters up to an aggregate amount of $5,000,000. | ||||||||
In addition to the cash payment paid at closing, the Company is eligible to receive additional cash payments of up to $283,500,000 based on the achievement of pre-determined milestones, including a $12,500,000 payment upon approval by the U.S. Food and Drug Administration of an abuse-deterrent extended-release hydrocodone tablet (currently in development in collaboration with Altus Formulation Inc.) and up to $271,000,000 in potential sales milestones. The purchaser will assume responsibility for the Company's obligations under the purchased contracts and regulatory approvals, as well as other liabilities associated with the Zohydro ER business arising after the sale date. The Company will retain all liabilities associated with the Zohydro ER business arising prior to the sale. | ||||||||
On April 23, 2015, in connection with the sale of the Zohydro ER business, the Company, Oxford Finance LLC and Silicon Valley Bank entered into an amendment to the loan and security agreement dated December 30, 2014 which added an affirmative covenant requiring a liquidity ratio of 1.25 to 1 through the Company’s receipt of positive data from placebo-controlled trials in the United States and European Union of ZX008 and terminated all encumbrances on the Company's personal property related to its Zohydro ER business. The remaining obligations under the loan and security agreement remain substantially unchanged. | ||||||||
On April 24, 2015, the Company committed to a restructuring plan in conjunction with the sale of the Zohydro ER business in which approximately 100 employees transitioned employment to Pernix. The Company plans to reduce its workforce by an additional 16 employees as a result of the divestiture. | ||||||||
As a result of the Company's strategic decision to sell the Zohydro ER business and focus on clinical development of ZX008 and Relday, the consolidated statement of operations and comprehensive loss for the three months ended March 31, 2014 and the consolidated balance sheet as of December 31, 2014 have been retrospectively restated to reflect the financial results from the Zohydro ER business, and the related assets and liabilities, as discontinued operations. The results of operations from discontinued operations presented below include certain allocations that management believes fairly reflect the utilization of services provided to the Zohydro ER business. The allocations do not include amounts related to general corporate administrative expenses or interest expense. Therefore, the results of operations from the Zohydro ER business do not necessarily reflect what the results of operations would have been had the business operated as a stand-alone entity. | ||||||||
The following table summarizes the results of discontinued operations for the periods presented the consolidated statements of operations and comprehensive loss for the three months ended March 31, 2015 and 2014 (in thousands): | ||||||||
Three Months Ended March 31, | ||||||||
Discontinued operations | 2015 | 2014 | ||||||
Revenues: | ||||||||
Net product revenue | $ | 5,006 | $ | 285 | ||||
Operating expenses: | ||||||||
Cost of product sold | 1,340 | 49 | ||||||
Royalty expense | 418 | 96 | ||||||
Research and development | 4,808 | 997 | ||||||
Selling, general and administrative | 11,136 | 15,123 | ||||||
Total operating expenses | 17,702 | 16,265 | ||||||
Loss from discontinued operations | $ | (12,696 | ) | $ | (15,980 | ) | ||
The following table summarizes the assets and liabilities of discontinued operations as of March 31, 2015 and December 31, 2014 related to the Zohydro ER business (in thousands): | ||||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
ASSETS | ||||||||
Current assets | ||||||||
Trade accounts receivable | $ | 3,046 | $ | 2,799 | ||||
Inventory | 787 | 1,995 | ||||||
Prepaid expenses | 1,700 | 1,767 | ||||||
Other current assets | 1,103 | 635 | ||||||
Total current assets of discontinued operations | 6,636 | 7,196 | ||||||
Other assets | 3,405 | 2,673 | ||||||
Total assets of discontinued operations | $ | 10,041 | $ | 9,869 | ||||
LIABILITIES | ||||||||
Current liabilities | ||||||||
Accounts payable | $ | 4,786 | $ | 3,781 | ||||
Accrued expenses | 9,983 | 9,470 | ||||||
Accrued compensation | 1,747 | 1,933 | ||||||
Deferred revenue | 4,881 | 7,123 | ||||||
Total current liabilities of discontinued operations | 21,397 | 22,307 | ||||||
Total liabilities of discontinued operations | $ | 21,397 | $ | 22,307 | ||||
Total stock-based compensation related to discontinued operations was $522,000 and $463,000 for the three months ended March 31, 2015 and 2014, respectively. Total amortization expense related to discontinued operations was $124,000 and $85,000 for the three months ended March 31, 2015 and 2014, respectively. | ||||||||
The Company will complete the accounting for this business divestiture, including recording any related gain on sale, during the second quarter of 2015. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 3 Months Ended | |
Mar. 31, 2015 | ||
Accounting Policies [Abstract] | ||
Financial Statement Preparation and Use of Estimates | Financial Statement Preparation and Use of Estimates | |
The unaudited consolidated financial statements contained in this Quarterly Report on Form 10-Q have been prepared by Zogenix, Inc. according to the rules and regulations of the Securities and Exchange Commission (SEC) and, therefore, certain information and disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP) have been omitted. | ||
In the opinion of management, the accompanying unaudited consolidated financial statements for the periods presented reflect all adjustments, which are normal and recurring, necessary to fairly state the financial position, results of operations and cash flows. These unaudited consolidated financial statements should be read in conjunction with the audited financial statements included in the Company's Annual Report on Form 10-K and Form 10-K/A for the fiscal year ended December 31, 2014, each as filed with the SEC. | ||
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results may differ from those estimates. | ||
Principles of Consolidation | Principles of Consolidation | |
The unaudited interim consolidated financial statements include the accounts of Zogenix, Inc. and its wholly owned subsidiary Zogenix Europe Limited, which was incorporated under the laws of England and Wales in June 2010. All intercompany transactions and investments have been eliminated in consolidation. Zogenix Europe Limited’s functional currency is the U.S. dollar, the reporting currency of its parent. | ||
Restricted Cash | Restricted Cash | |
In connection with its sale of the Sumavel DosePro business in May 2014, the Company has $8,500,000 of cash in escrow as of March 31, 2015 and December 31, 2014 to fund potential indemnification claims for a period of 12 months from the closing date of the sale. The Company classifies the cash flow from this restricted cash as an investing activity in the consolidated statement of cash flows as the source of the restricted cash is related to the sale of the Sumavel DosePro business. | ||
Fair Value Measurements | Changes in fair value of the liabilities shown in the table above are recorded through change in fair value of contingent consideration in operating expenses and change in fair value of warrant liabilities in other income (expense) in the consolidated statements of operations and comprehensive loss. | |
Fair Value Measurements | ||
The carrying amount of financial instruments consisting of cash, restricted cash, trade accounts receivable, prepaid expenses and other current assets, accounts payable, accrued expenses and accrued compensation included in the Company’s consolidated financial statements are reasonable estimates of fair value due to their short maturities. Based on the borrowing rates currently available to the Company for loans with similar terms, management believes the fair value of long-term debt approximates its carrying value. | ||
Authoritative guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: | ||
Level 1: | Observable inputs such as quoted prices in active markets; | |
Level 2: | Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and | |
Level 3: | Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. | |
The Company classifies its cash equivalents within Level 1 of the fair value hierarchy because it values its cash equivalents using quoted market prices. The Company classifies its common stock warrant liabilities and contingent purchase consideration within Level 3 of the fair value hierarchy because they are valued using valuation models with significant unobservable inputs. | ||
Net Loss per Share | Net Loss per Share | |
Basic net loss per share is calculated by dividing the net loss by the weighted average number of common shares outstanding for the period, reduced by weighted average shares subject to repurchase, without consideration for common stock equivalents. Diluted net loss per share is computed by dividing the net loss by the weighted average number of common share equivalents outstanding for the period determined using the treasury-stock method and as-if converted method, as applicable. For purposes of this calculation, stock options, restricted stock units and warrants are considered to be common stock equivalents and are only included in the calculation of diluted net loss per share when their effect is dilutive. | ||
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets | |
The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. | ||
Revenue Recognition | Revenue Recognition | |
The Company recognized revenue from contract manufacturing, service fees earned on collaborative arrangements and the sale of Sumavel DosePro prior to its sale in May 2014. The company also recognized revenue from the sale of Zohydro ER prior to its sale to Ferrimill in April 2015, which is included in net loss from discontinued operations in the consolidated statement of operations and comprehensive loss. Revenue is recognized when (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred and title has passed, (iii) the price is fixed or determinable and (iv) collectability is reasonably assured. Revenue from sales transactions where the buyer has the right to return the product is recognized at the time of sale only if (a) the Company’s price to the buyer is substantially fixed or determinable at the date of sale, (b) the buyer has paid the Company, or the buyer is obligated to pay the Company and the obligation is not contingent on resale of the product, (c) the buyer’s obligation to the Company would not be changed in the event of theft or physical destruction or damage of the product, (d) the buyer acquiring the product for resale has economic substance apart from that provided by the Company, (e) the Company does not have significant obligations for future performance to directly bring about resale of the product by the buyer, and (f) the amount of future returns can be reasonably estimated. Prior to the divestiture of the Zohydro ER business, the Company deferred recognition of revenue on product shipments of Zohydro ER until the right of return no longer existed, as the Company was not able to reliably estimate expected returns of the product at the time of shipment given the limited sales history of Zohydro ER. | ||
Revenue arrangements with multiple elements are divided into separate units of accounting if certain criteria are met, including whether the delivered element has stand-alone value to the customer. The consideration received is allocated among the separate units based on their respective fair values, and the applicable revenue recognition criteria are applied to each of the separate units. The application of the multiple element guidance requires subjective determinations, and requires the Company to make judgments about the individual deliverables and whether such deliverables are separable from the other aspects of the contractual relationship. Deliverables are considered separate units of accounting provided that: (1) the delivered item(s) has value to the customer on a stand-alone basis and (2) if the arrangement includes a general right of return relative to the delivered item(s), delivery or performance of the undelivered item(s) is considered probable and substantially in the Company's control. In determining the units of accounting, the Company evaluates certain criteria, including whether the deliverables have stand-alone value, based on the consideration of the relevant facts and circumstances for each arrangement. In addition, the Company considers whether the buyer can use the other deliverable(s) for their intended purpose without the receipt of the remaining element(s), whether the value of the deliverable is dependent on the undelivered item(s), and whether there are other vendors that can provide the undelivered element(s). | ||
Arrangement consideration that is fixed or determinable is allocated among the separate units of accounting using the relative selling price method, and the applicable revenue recognition criteria, as described above, are applied to each of the separate units of accounting in determining the appropriate period or pattern of recognition. The Company determines the estimated selling price for deliverables within each agreement using vendor-specific objective evidence (VSOE) of selling price, if available, third-party evidence (TPE) of selling price if VSOE is not available, or management's best estimate of selling price (BESP) if neither VSOE nor TPE is available. Determining the BESP for a unit of accounting requires significant judgment. In developing the BESP for a unit of accounting, the Company considers applicable market conditions and relevant entity-specific factors, including factors that were contemplated in negotiating the agreement with the customer and estimated costs. | ||
Contract Manufacturing Revenue | ||
The Company and Endo entered into a supply agreement in connection with the sale of the Sumavel DosePro business to Endo in May 2014. Under the terms of the supply agreement, the Company retains the sole and exclusive right and the obligation to manufacture or supply Sumavel DosePro to Endo. The Company recognizes deferred revenue related to its supply of Sumavel DosePro as contract manufacturing revenue when earned on a "proportional performance" basis as product is delivered. The Company recognizes revenue related to its sale of Sumavel DosePro product, equal to the cost of contract manufacturing plus a 2.5% mark-up, upon the transfer of title to Endo. The Company supplies Sumavel DosePro product based on non-cancellable purchase orders. The Company initially defers revenue for any consideration received in advance of services being performed and product being delivered, and recognizes revenue pursuant to the related pattern of performance, based on total product delivered relative to the total estimated product delivery over the minimum eight year term of the supply agreement. The Company continually evaluates the performance period and will adjust the period of revenue recognition if circumstances change. | ||
In addition, the Company follows the authoritative accounting guidance when reporting revenue as gross when the Company acts as a principal versus reporting revenue as net when the Company acts as an agent. For transactions in which the Company acts as a principal, has discretion to choose suppliers, bears credit risk and performs a substantive part of the services, revenue is recorded at the gross amount billed to a customer and costs associated with these reimbursements are reflected as a component of cost of sales for contract manufacturing services. | ||
Product Revenue, Net | ||
The Company sold Sumavel DosePro through May 2014, and sold Zohydro ER through April 2015, in the United States to wholesale pharmaceutical distributors and retail pharmacies, or collectively the Company's customers, subject to rights of return within a period beginning six months prior to, and ending 12 months following, product expiration. The Company recognized Sumavel DosePro product sales at the time title transferred to its customer, and reduced product sales for estimated future product returns and sales allowances in the same period the related revenue was recognized. The Company is responsible for all returns of Sumavel DosePro product distributed by the Company prior to the sale of the Sumavel DosePro business up to a maximum per unit amount as specified in the sales agreement. | ||
Given the limited sales history of Zohydro ER, prior to the divestiture of the Zohydro ER business, the Company was not able to reliably estimate expected returns of the product at the time of shipment. Accordingly, the Company deferred recognition of revenue on Zohydro ER product shipments until the right of return no longer existed, which occurred at the earlier of the time Zohydro ER was dispensed through patient prescriptions or expiration of the right of return. The Company estimated Zohydro ER patient prescriptions dispensed using an analysis of third-party syndicated data. Zohydro ER was launched in March 2014 and, accordingly, the Company did not have a significant history estimating the number of patient prescriptions dispensed. If the Company underestimated or overestimated patient prescriptions dispensed for a given period, adjustments to revenue from discontinued operations may be necessary in future periods. The deferred revenue balance did not have a direct correlation with future revenue recognition as the Company recorded sales deductions at the time the prescription unit was dispensed. In addition, the costs of Zohydro ER associated with the deferred revenue were recorded as deferred costs, which were included in inventory, until such time the related deferred revenue was recognized. The Company will be responsible for returns of product sold, rebates and chargebacks for product dispensed and related Health Care Reform fees through the date of the sale of the Zohydro ER business in April 2015. Revenue for Zohydro ER is included in discontinued operations in the consolidated statement of operations and comprehensive loss. | ||
Segment Reporting | Segment Reporting | |
Management has determined that the Company operates in one business segment, which is the development and commercialization of pharmaceutical products for people living with central nervous system disorders. | ||
Recent Accounting Pronouncements | Recent Accounting Pronouncements | |
In April 2014, the Financial Accounting Standards Board (FASB) issued an accounting update that raises the threshold for disposals to qualify as discontinued operations and allows companies to have significant continuing involvement with and continuing cash flows from or to the discontinued operations. This accounting update also requires additional disclosures for discontinued operations and new disclosures for individually material disposal transactions that do not meet the definition of a discontinued operation. This guidance was effective for fiscal years beginning after December 15, 2014, with early adoption permitted. The Company has adopted the guidance in the first quarter of 2015. | ||
In May 2014, the FASB issued new accounting guidance related to revenue recognition. This new standard will replace all current GAAP guidance on this topic and eliminate all industry-specific guidance. The new revenue recognition standard provides a unified model to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. This guidance will be effective for fiscal years beginning after December 15, 2017, including interim periods within that reporting period, and can be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. Early adoption is prohibited. The Company is evaluating the transition method, timing and impact of adopting this new accounting standard on its financial statements and related disclosures. | ||
In April 2015, the FASB issued guidance which requires debt issuance costs related to a recognized debt liability to be presented on the balance sheet as a direct deduction from the debt liability instead of as an asset. The guidance is effective for annual and interim reporting periods beginning on or after December 15, 2016. Early adoption is permitted. The Company is evaluating the timing and impact of adopting this new accounting standard on its financial statements and related disclosures and does not expect that the adoption of the guidance will have a material impact on the Company’s financial statements. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 3 Months Ended | |||||||||||||||
Mar. 31, 2015 | ||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Assets and liabilities measured at fair value on a recurring basis at March 31, 2015 and December 31, 2014 are as follows (in thousands): | |||||||||||||||
Fair Value Measurements at Reporting Date Using | ||||||||||||||||
Quoted | Significant | Significant | Total | |||||||||||||
Prices in | Other | Unobservable | ||||||||||||||
Active | Observable | Inputs | ||||||||||||||
Markets | Inputs | (Level 3) | ||||||||||||||
for | (Level 2) | |||||||||||||||
Identical | ||||||||||||||||
Assets | ||||||||||||||||
(Level 1) | ||||||||||||||||
At March 31, 2015 | ||||||||||||||||
Assets | ||||||||||||||||
Cash equivalents(1) | $ | 18,125 | — | — | $ | 18,125 | ||||||||||
Liabilities | ||||||||||||||||
Common stock warrant liabilities(2) | $ | — | — | 4,683 | $ | 4,683 | ||||||||||
Contingent purchase consideration (3) | $ | — | — | 52,000 | $ | 52,000 | ||||||||||
At December 31, 2014 | ||||||||||||||||
Assets | ||||||||||||||||
Cash equivalents(1) | $ | 8,021 | — | — | $ | 8,021 | ||||||||||
Liabilities | ||||||||||||||||
Common stock warrant liabilities(2) | $ | — | — | 5,093 | $ | 5,093 | ||||||||||
Contingent purchase consideration (3) | $ | — | — | 53,000 | $ | 53,000 | ||||||||||
-1 | Cash equivalents are comprised of money market fund shares and are included as a component of cash and cash equivalents on the consolidated balance sheets. | |||||||||||||||
-2 | Common stock warrant liabilities include liabilities associated with warrants issued in connection with the Company's July 2012 public offering of common stock and warrants (see Note 4) and warrants issued in connection with the financing agreement entered into with Healthcare Royalty Partners (Healthcare Royalty), dated June 30, 2011, (the Healthcare Royalty financing agreement), which are measured at fair value using the Black-Scholes option pricing valuation model. The assumptions used in the Black-Scholes option pricing valuation model for both common stock warrant liabilities were: (a) a risk-free interest rate based on the rates for U.S. Treasury zero-coupon bonds with maturities similar to those of the remaining contractual term of the warrants; (b) an assumed dividend yield of zero based on the Company’s expectation that it will not pay dividends in the foreseeable future; (c) an expected term based on the remaining contractual term of the warrants; and (d) given the Company’s lack of relevant historical data due to the Company’s limited historical experience, an expected volatility based upon the Company's historical volatility, supplemented with historical volatility of comparable companies whose share prices have been publicly available for a sufficient period of time. The significant unobservable input used in measuring the fair value of the common stock warrant liabilities associated with the Healthcare Royalty financing agreement is the expected volatility. Significant increases in volatility would result in a higher fair value measurement. The following additional assumptions were used in the Black-Scholes option pricing valuation model to measure the fair value of the warrants sold in the July 2012 public offering: (a) management's projections regarding the probability of the occurrence of an extraordinary event and the timing of such event; and for the valuation scenario in which an extraordinary event occurs that is not an all cash transaction or an event whereby a public acquirer would assume the warrants, and (b) an expected volatility rate using the Company's historical volatility, supplemented with historical volatility of comparable companies, through the projected date of public announcement of an extraordinary transaction, blended with a rate equal to the lesser of 40% and the 180-day volatility rate obtained from the HVT function on Bloomberg as of the trading day immediately following the public announcement of an extraordinary transaction. The significant unobservable inputs used in measuring the fair value of the common stock warrant liabilities associated with the July 2012 public offering are the expected volatility and the probability of the occurrence of an extraordinary event. Significant increases in volatility would result in a higher fair value measurement and significant increases in the probability of an extraordinary event occurring would result in a significantly lower fair value measurement. The change in the fair value of the common stock warrant liabilities as of March 31, 2015 was primarily driven by the decrease in the expected term of the warrant at March 31, 2015 as compared against December 31, 2014 measurement dates. | |||||||||||||||
-3 | Contingent purchase consideration was measured at fair value using the income approach based on significant unobservable inputs including management's estimates of the probabilities of achieving specific net sales levels and development milestones and appropriate risk adjusted discount rates. Significant changes of either unobservable input could have a significant effect on the calculation of fair value of the contingent purchase consideration liability. | |||||||||||||||
Reconciliation of Liabilities Measured at Fair Value Using Significant Observable Inputs (Level 3) | The following table provides a reconciliation of liabilities measured at fair value using significant unobservable inputs (Level 3) for the three months ended March 31, 2015 (in thousands): | |||||||||||||||
Contingent Purchase Consideration | Common | |||||||||||||||
Stock | ||||||||||||||||
Warrant | ||||||||||||||||
Liabilities | ||||||||||||||||
Balance at December 31, 2014 | $ | 53,000 | $ | 5,093 | ||||||||||||
Changes in fair value | (1,000 | ) | (410 | ) | ||||||||||||
Balance at March 31, 2015 | $ | 52,000 | $ | 4,683 | ||||||||||||
Basic and Diluted Net Loss Per Share | The following table presents the computation of basic and diluted net loss per share for continuing and discontinued operations (in thousands, except per share amounts): | |||||||||||||||
Three Months Ended March 31, | ||||||||||||||||
2015 | 2014 | |||||||||||||||
Continuing operations | Discontinued operations | Continuing operations | Discontinued operations | |||||||||||||
Numerator | ||||||||||||||||
Net loss, basic | $ | (10,165 | ) | $ | (12,696 | ) | $ | (4,952 | ) | $ | (15,980 | ) | ||||
Effect of dilutive securities: | ||||||||||||||||
Common stock warrants | — | — | (8,269 | ) | — | |||||||||||
Non-employee stock options and restricted stock units | — | — | (132 | ) | — | |||||||||||
— | — | (8,401 | ) | — | ||||||||||||
Net loss, diluted | $ | (10,165 | ) | $ | (12,696 | ) | $ | (13,353 | ) | $ | (15,980 | ) | ||||
Denominator | ||||||||||||||||
Weighted average common shares outstanding, basic | 153,362 | 153,362 | 139,309 | 139,309 | ||||||||||||
Effect of dilutive securities: | ||||||||||||||||
Common stock warrants | — | — | 5,870 | — | ||||||||||||
Non-employee stock options and restricted stock units | — | — | 144 | — | ||||||||||||
Dilutive potential shares of common stock | — | — | 6,014 | — | ||||||||||||
Weighted average common shares outstanding, diluted | 153,362 | 153,362 | 145,323 | 139,309 | ||||||||||||
Basic net loss per share | $ | (0.07 | ) | $ | (0.08 | ) | $ | (0.04 | ) | $ | (0.11 | ) | ||||
Diluted net loss per share | $ | (0.07 | ) | $ | (0.08 | ) | $ | (0.09 | ) | $ | (0.11 | ) | ||||
Schedule of Calculation of Diluted Net Loss Per Share | There were 730,000 and 11,246,000 dilutive securities (in common stock equivalent shares), from common stock options and restricted stock units excluded from the calculation of diluted net loss during the three months ended March 31, 2015 and 2014, respectively, because to include them would be anti-dilutive. Common stock warrants of 15,724,000 and 508,000 were excluded from the calculation of diluted net loss during the three months ended March 31, 2015 and 2014, respectively, as the exercise price of the warrants was greater than the Company's average stock price during these periods. |
Inventory_Tables
Inventory (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Disclosure Inventory Net [Abstract] | ||||||||
Inventory, Net | ||||||||
31-Mar-15 | December 31, 2014 | |||||||
Raw materials | $ | 3,742 | $ | 3,453 | ||||
Work in process | 9,360 | 7,991 | ||||||
Total | $ | 13,102 | $ | 11,444 | ||||
StockBased_Compensation_Tables
Stock-Based Compensation (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||
Assumptions used in the Black-Scholes Option-Pricing Model | The assumptions used in the Black-Scholes option-pricing model for the three months ended March 31, 2015 and 2014 are as follows: | |||||||
Three Months Ended March 31, | ||||||||
2015 | 2014 | |||||||
Risk free interest rate | 1.50% | 2.00% | ||||||
Expected term | 5.8 to 6.1 years | 6.0 to 6.1 years | ||||||
Expected volatility | 78.50% | 84.90% | ||||||
Expected dividend yield | — | % | — | % | ||||
Stock-Based Compensation Expense | The Company recognized stock-based compensation expense in continuing operations as follows (in thousands): | |||||||
Three Months Ended March 31, | ||||||||
2015 | 2014 | |||||||
Cost of goods sold | $ | 93 | $ | 127 | ||||
Research and development | 224 | 357 | ||||||
Selling, general and administrative | 1,033 | 1,560 | ||||||
Total | $ | 1,350 | $ | 2,044 | ||||
Sale_of_Zohydro_ER_business_Ta
Sale of Zohydro ER business (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Discontinued Operations and Disposal Groups [Abstract] | ||||||||
Schedule of Results of Discontinued Operations | The following table summarizes the results of discontinued operations for the periods presented the consolidated statements of operations and comprehensive loss for the three months ended March 31, 2015 and 2014 (in thousands): | |||||||
Three Months Ended March 31, | ||||||||
Discontinued operations | 2015 | 2014 | ||||||
Revenues: | ||||||||
Net product revenue | $ | 5,006 | $ | 285 | ||||
Operating expenses: | ||||||||
Cost of product sold | 1,340 | 49 | ||||||
Royalty expense | 418 | 96 | ||||||
Research and development | 4,808 | 997 | ||||||
Selling, general and administrative | 11,136 | 15,123 | ||||||
Total operating expenses | 17,702 | 16,265 | ||||||
Loss from discontinued operations | $ | (12,696 | ) | $ | (15,980 | ) | ||
The following table summarizes the assets and liabilities of discontinued operations as of March 31, 2015 and December 31, 2014 related to the Zohydro ER business (in thousands): | ||||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
ASSETS | ||||||||
Current assets | ||||||||
Trade accounts receivable | $ | 3,046 | $ | 2,799 | ||||
Inventory | 787 | 1,995 | ||||||
Prepaid expenses | 1,700 | 1,767 | ||||||
Other current assets | 1,103 | 635 | ||||||
Total current assets of discontinued operations | 6,636 | 7,196 | ||||||
Other assets | 3,405 | 2,673 | ||||||
Total assets of discontinued operations | $ | 10,041 | $ | 9,869 | ||||
LIABILITIES | ||||||||
Current liabilities | ||||||||
Accounts payable | $ | 4,786 | $ | 3,781 | ||||
Accrued expenses | 9,983 | 9,470 | ||||||
Accrued compensation | 1,747 | 1,933 | ||||||
Deferred revenue | 4,881 | 7,123 | ||||||
Total current liabilities of discontinued operations | 21,397 | 22,307 | ||||||
Total liabilities of discontinued operations | $ | 21,397 | $ | 22,307 | ||||
Organization_and_Basis_of_Pres1
Organization and Basis of Presentation Narrative (Details) (USD $) | 3 Months Ended | 0 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | Apr. 24, 2015 | |
employee | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Net product revenue | $0 | $6,485,000 | |
Subsequent event | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Number of positions committed to be eliminated | 100 | ||
Zohydro ER | Subsequent event | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Restricted cash | 10,000,000 | ||
Cash proceeds, net | 70,000,000 | ||
Zohydro ER | Ferrimill Limited | Subsequent event | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Net product revenue | 900,000 |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies - Additional Information (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
Line of Credit Facility [Line Items] | ||
Number of business segments | 1 | |
Sumavel DosePro | ||
Line of Credit Facility [Line Items] | ||
Cost of goods sold mark-up, in percent | 2.50% | |
Restricted cash | $8,500 | $8,500 |
Endo Ventures Supply Agreement [Member] | Minimum [Member] | ||
Line of Credit Facility [Line Items] | ||
Term of supply agreement | 8 years | |
Zohydro ER and Sumavel DosePro [Member] | ||
Line of Credit Facility [Line Items] | ||
Period to accept returned unused product prior to expiration | 6 months | |
Period to accept returned unused product after product expiration | 12 months |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies - Assets and Liabilities Measured at Fair Value on a Recurring Basis (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
Liabilities | ||
Expected volatility rate period | 180 days | |
Minimum [Member] | ||
Liabilities | ||
Maximum volatility rate | 40.00% | |
Common Stock Warrant Liabilities [Member] | ||
Liabilities | ||
Liabilities measured at fair value on a recurring basis | 4,683 | $5,093 |
Embedded Derivative Liabilities [Member] | ||
Liabilities | ||
Liabilities measured at fair value on a recurring basis | 52,000 | 53,000 |
Money market fund shares [Member] | ||
Assets | ||
Assets measured at fair value on a recurring basis | 18,125 | 8,021 |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Common Stock Warrant Liabilities [Member] | ||
Liabilities | ||
Liabilities measured at fair value on a recurring basis | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Embedded Derivative Liabilities [Member] | ||
Liabilities | ||
Liabilities measured at fair value on a recurring basis | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Money market fund shares [Member] | ||
Assets | ||
Assets measured at fair value on a recurring basis | 18,125 | 8,021 |
Significant Other Observable Inputs (Level 2) [Member] | Common Stock Warrant Liabilities [Member] | ||
Liabilities | ||
Liabilities measured at fair value on a recurring basis | 0 | 0 |
Significant Other Observable Inputs (Level 2) [Member] | Embedded Derivative Liabilities [Member] | ||
Liabilities | ||
Liabilities measured at fair value on a recurring basis | 0 | 0 |
Significant Other Observable Inputs (Level 2) [Member] | Money market fund shares [Member] | ||
Assets | ||
Assets measured at fair value on a recurring basis | 0 | 0 |
Significant Unobservable Inputs (Level 3) [Member] | Common Stock Warrant Liabilities [Member] | ||
Liabilities | ||
Liabilities measured at fair value on a recurring basis | 4,683 | 5,093 |
Significant Unobservable Inputs (Level 3) [Member] | Embedded Derivative Liabilities [Member] | ||
Liabilities | ||
Liabilities measured at fair value on a recurring basis | 52,000 | 53,000 |
Significant Unobservable Inputs (Level 3) [Member] | Money market fund shares [Member] | ||
Assets | ||
Assets measured at fair value on a recurring basis | 0 | $0 |
Summary_of_Significant_Account5
Summary of Significant Accounting Policies - Reconciliation of Liabilities Measured at Fair Value Using Significant Observable Inputs Level 3 (Detail) (USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2015 |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Beginning Balance | $53,000 |
Changes in fair value | -1,000 |
Ending Balance | 52,000 |
Warrants and Rights Outstanding [Member] | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Beginning Balance | 5,093 |
Changes in fair value | -410 |
Ending Balance | $4,683 |
Summary_of_Significant_Account6
Summary of Significant Accounting Policies - Basic and Diluted Net Loss Per Share (Detail) (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Numerator | ||
Net loss from continuing operations | ($10,165) | ($4,952) |
Loss from discontinued operations, net of applicable tax | -12,696 | -15,980 |
Net loss, diluted | -10,165 | -13,353 |
Denominator | ||
Weighted average common shares outstanding, basic | 153,362,000 | 139,309,000 |
Weighted average common shares outstanding, diluted | 153,362,000 | 145,323,000 |
Continuing operations, usd per share | ($0.07) | ($0.04) |
Discontinued operations, usd per share | ($0.08) | ($0.11) |
Continuing operations, usd per share | ($0.07) | ($0.09) |
Discontinued operations, usd per share | ($0.08) | ($0.11) |
Common stock options | ||
Denominator | ||
Anti-dilutive securities excluded from computation of earnings per share amount | 730,000 | 11,246,000 |
Common Stock Warrants | ||
Denominator | ||
Anti-dilutive securities excluded from computation of earnings per share amount | 15,724,000 | 508,000 |
Continuing Operations | ||
Numerator | ||
Common stock warrants | 0 | 8,269 |
Non-employee stock options and restricted stock units | 0 | -132 |
Dilutive Securities, Effect on Basic Earnings Per Share | 0 | -8,401 |
Denominator | ||
Common stock warrants, shares | 0 | 5,870,000 |
Non-employee stock options and restricted stock units, shares | 0 | 144,000 |
Dilutive potential shares of common stock, shares | 0 | 6,014,000 |
Weighted average common shares outstanding, diluted | 153,362,000 | 145,323,000 |
Discontinued Operations | ||
Numerator | ||
Common stock warrants | 0 | 0 |
Non-employee stock options and restricted stock units | 0 | 0 |
Dilutive Securities, Effect on Basic Earnings Per Share | $0 | $0 |
Denominator | ||
Common stock warrants, shares | 0 | 0 |
Non-employee stock options and restricted stock units, shares | 0 | 0 |
Dilutive potential shares of common stock, shares | 0 | 0 |
Weighted average common shares outstanding, diluted | 153,362,000 | 139,309,000 |
Inventory_Detail
Inventory (Detail) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Disclosure Inventory Net [Abstract] | ||
Raw materials | $3,742 | $3,453 |
Work in process | 9,360 | 7,991 |
Inventory, net | $13,102 | $11,444 |
Collaboration_and_Financing_Ag
Collaboration and Financing Agreements - Additional Information (Detail) (USD $) | 1 Months Ended | 3 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Jul. 31, 2011 | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
Debt Instrument [Line Items] | ||||
Common stock issued and sold to Healthcare Royalty, amount | $153 | $153 | ||
Common stock issued and sold to Healthcare Royalty, shares | 153,365,000 | 153,363,000 | ||
Warrant exercisable to Healthcare Royalty, shares | 225,000 | |||
Warrant exercisable to Healthcare Royalty, price per share (usd per share) | $9 | |||
Repayment of debt | 343 | 0 | ||
Change in fair value | -1,000 | |||
Embedded Derivative Liabilities [Member] | ||||
Debt Instrument [Line Items] | ||||
Fair value of embedded derivatives | 52,000 | 53,000 | ||
Common Stock Warrant Liabilities [Member] | ||||
Debt Instrument [Line Items] | ||||
Fair value of embedded derivatives | $4,683 | $5,093 |
Common_Stock_Warrants_Addition
Common Stock Warrants - Additional Informational (Detail) (USD $) | 0 Months Ended | 1 Months Ended | 3 Months Ended | 12 Months Ended |
Jul. 27, 2012 | Jul. 31, 2011 | Mar. 31, 2015 | Dec. 31, 2014 | |
Schedule Of Common Stock [Line Items] | ||||
Shares of common stock exercisable through warrants | 15,784,200 | |||
Warrants exercise price per share | $2.50 | |||
Term of common stock warrant exercisable (years) | 5 years | 10 years | ||
Proceeds from warrant exercises | $0 | $1,163,000 | ||
Fair value of warrant liabilities | 4,585,000 | 4,978,000 | ||
Warrant exercisable to Healthcare Royalty, shares | 225,000 | |||
Warrant exercisable to Healthcare Royalty, price per share (usd per share) | $9 | |||
Healthcare Royalty | ||||
Schedule Of Common Stock [Line Items] | ||||
Fair value of warrant liabilities | $98,000 | $115,000 | ||
Common stock warrants | ||||
Schedule Of Common Stock [Line Items] | ||||
Warrants exercised | 465,250 |
StockBased_Compensation_Assump
Stock-Based Compensation - Assumptions used in Black-Scholes Option-Pricing Model (Detail) (Stock Options [Member]) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk free interest rate (percent) | 1.50% | 2.00% |
Expected volatility (percent) | 78.50% | 84.90% |
Expected dividend yield (percent) | 0.00% | 0.00% |
Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term | 5 years 9 months 18 days | 6 years |
Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term | 6 years 1 month | 6 years 1 month 6 days |
StockBased_Compensation_StockB
Stock-Based Compensation - Stock-Based Compensation Expense (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | $1,350 | $2,044 |
Cost of sales | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | 93 | 127 |
Research and development | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | 224 | 357 |
Selling, general and administrative | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | $1,033 | $1,560 |
StockBased_Compensation_Additi
Stock-Based Compensation - Additional Information (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation | ($1,350) | ($2,044) |
Consultants [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares | 233 | |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options | 256 | |
Stock-based compensation | 174 | |
Stock Options [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total unrecognized compensation costs | $10,447 | |
Recognition over weighted average periods | 3 years 0 months 0 days | |
Stock Options [Member] | Consultants [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 2 years 11 months |
Sale_of_Zohydro_ER_business_Na
Sale of Zohydro ER business - Narrative (Details) (USD $) | 3 Months Ended | 0 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Apr. 24, 2015 | Apr. 23, 2015 | |
employee | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Net product revenue | $0 | $6,485,000 | ||
Stock-based compensation | 1,871,000 | 2,507,000 | ||
Zohydro ER | Discontinued Operations | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Stock-based compensation | 522,000 | 463,000 | ||
Amortization | 124,000 | 85,000 | ||
Subsequent event | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Number of positions committed to be eliminated | 100 | |||
Expected number of additional positions to be eliminated | 16 | |||
Subsequent event | Silicon Valley Bank | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Liquidity ratio | 1.25 | |||
Subsequent event | Zohydro ER | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Proceeds from sale of business | 80,000,000 | |||
Restricted cash | 10,000,000 | |||
Potential indemnification period | 12 months | |||
Common stock received | 11,900,000 | |||
Potential additional cash payments | 283,500,000 | |||
Regulatory milestone payment | 12,500,000 | |||
Potential sales milestone | 271,000,000 | |||
Subsequent event | Zohydro ER | Ferrimill Limited | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Net product revenue | 900,000 | |||
Subsequent event | Zohydro ER | Ferrimill Limited | Indemnification Agreement [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Maximum indemnification amount | 5,000,000 |
Sale_of_Zohydro_ER_business_In
Sale of Zohydro ER business - Income Statement and Balance Sheet Disclosures Related to Zohydro (Details) (USD $) | 3 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
Disposal Group, Including Discontinued Operation, Balance Sheet Disclosures [Abstract] | |||
Total current assets of discontinued operations | $6,636 | $7,196 | |
Total current liabilities of discontinued operations | 21,397 | 22,307 | |
Zohydro ER | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Net product revenue | 5,006 | 285 | |
Cost of product sold | 1,340 | 49 | |
Royalty expense | 418 | 96 | |
Research and development | 4,808 | 997 | |
Selling, general and administrative | 11,136 | 15,123 | |
Total operating expenses | 17,702 | 16,265 | |
Loss from discontinued operations | -12,696 | -15,980 | |
Disposal Group, Including Discontinued Operation, Balance Sheet Disclosures [Abstract] | |||
Trade accounts receivable | 3,046 | 2,799 | |
Inventory | 787 | 1,995 | |
Prepaid expenses | 1,700 | 1,767 | |
Other current assets | 1,103 | 635 | |
Total current assets of discontinued operations | 6,636 | 7,196 | |
Other assets | 3,405 | 2,673 | |
Total assets of discontinued operations | 10,041 | 9,869 | |
Accounts payable | 4,786 | 3,781 | |
Accrued expenses | 9,983 | 9,470 | |
Accrued compensation | 1,747 | 1,933 | |
Deferred revenue | 4,881 | 7,123 | |
Total current liabilities of discontinued operations | 21,397 | 22,307 | |
Total liabilities of discontinued operations | $21,397 | $22,307 |