Document and Entity Information
Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2018 | Feb. 15, 2019 | Jun. 30, 2018 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | ZOGENIX, INC. | ||
Entity Central Index Key | 1,375,151 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 42,218,424 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 1.4 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 68,454 | $ 293,503 |
Marketable securities | 445,733 | 0 |
Prepaid expenses | 6,718 | 5,994 |
Other current assets | 11,825 | 5,206 |
Total current assets | 532,730 | 304,703 |
Property and equipment, net | 2,870 | 245 |
Indefinite-lived intangible asset | 102,500 | 102,500 |
Goodwill | 6,234 | 6,234 |
Other assets | 3,997 | 3,931 |
Total assets | 648,331 | 417,613 |
Current liabilities: | ||
Accounts payable | 7,989 | 3,356 |
Accrued clinical trial expenses | 10,621 | 8,657 |
Accrued compensation | 5,277 | 6,616 |
Other accrued expenses | 1,845 | 1,842 |
Current portion of contingent consideration | 32,300 | 0 |
Common stock warrant liabilities | 343 | 512 |
Total current liabilities | 58,375 | 20,983 |
Contingent consideration | 45,900 | 76,900 |
Deferred tax liability | 17,425 | 17,425 |
Other long-term liabilities | 3,830 | 784 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Preferred stock, $0.01 par value, 10,000 shares authorized, none issued and outstanding | 0 | 0 |
Common stock | 42 | 35 |
Additional paid-in capital | 1,218,710 | 873,526 |
Accumulated deficit | (695,954) | (572,040) |
Accumulated other comprehensive income | 3 | 0 |
Total stockholders’ equity | 522,801 | 301,521 |
Total liabilities and stockholders’ equity | $ 648,331 | $ 417,613 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Preferred stock par value (in usd per share) | $ 0.001 | $ 0.001 |
Preferred stock authorized (shares) | 10,000,000 | 10,000,000 |
Preferred stock issued (shares) | 0 | 0 |
Preferred stock outstanding (shares) | 0 | 0 |
Common stock, par value (in usd per share) | $ 0.001 | $ 0.001 |
Common stock authorized (shares) | 50,000,000 | 50,000,000 |
Common stock issued (shares) | 42,078,164 | 34,807,509 |
Common stock outstanding (shares) | 42,078,164 | 34,807,509 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenue: | |||
Total revenue | $ 0 | $ 9,821 | $ 28,850 |
Operating expenses (income): | |||
Cost of contract manufacturing | 0 | 10,729 | 22,173 |
Royalty expense | 0 | 0 | 295 |
Research and development | 100,925 | 67,449 | 41,840 |
Selling, general and administrative | 38,950 | 25,885 | 26,996 |
Loss on contract termination | 0 | 478 | 0 |
Change in fair value of contingent consideration | 1,300 | 24,100 | 1,800 |
Asset impairment charges | 0 | 1,116 | 8,431 |
Total operating expenses | 141,175 | 129,757 | 101,535 |
Loss from operations | (141,175) | (119,936) | (72,685) |
Other income (expense): | |||
Interest income | 7,170 | 1,090 | 443 |
Interest expense | (6) | (2,644) | (2,825) |
Loss on extinguishment of debt | 0 | (4,876) | 0 |
Change in fair value of common stock warrant liabilities | 169 | 297 | 5,387 |
Other income (expense) | 10,126 | 47 | 46 |
Total other income (expense) | 17,459 | (6,086) | 3,051 |
Loss from continuing operations before income taxes | (123,716) | (126,022) | (69,634) |
Income tax benefit | 0 | 0 | 948 |
Loss from continuing operations | (123,716) | (126,022) | (68,686) |
(Loss) income from discontinued operations | (198) | (795) | (1,021) |
Net (loss) income | $ (123,914) | $ (126,817) | $ (69,707) |
Net loss per share, basic and diluted: | |||
Continuing operations (in usd per share) | $ (3.27) | $ (4.62) | $ (2.77) |
Discontinued operations (in usd per share) | 0 | (0.03) | (0.04) |
Net loss per share, basic and diluted (in dollars per share) | $ (3.27) | $ (4.65) | $ (2.81) |
Weighted average shares outstanding, basic and diluted [Abstract] | |||
Weighted average common shares outstanding, basic and diluted (shares) | 37,884 | 27,301 | 24,785 |
Contract manufacturing revenue | |||
Revenue: | |||
Total revenue | $ 0 | $ 9,821 | $ 28,525 |
Service and other product revenue | |||
Revenue: | |||
Total revenue | $ 0 | $ 0 | $ 325 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | |||
Net loss | $ (123,914) | $ (126,817) | $ (69,707) |
Other comprehensive income: | |||
Unrealized loss on marketable securities | 3 | 0 | 0 |
Comprehensive loss | $ (123,911) | $ (126,817) | $ (69,707) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive Income [Member] | Accumulated Deficit [Member] |
Beginning balance at Dec. 31, 2015 | $ 182,760 | $ 25 | $ 558,251 | $ 0 | $ (375,516) |
Beginning balance (shares) at Dec. 31, 2015 | 24,772 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (69,707) | (69,707) | |||
Issuance of common stock under employee equity plans | 350 | $ 0 | 350 | ||
Issuance of common stock under employee equity plans (shares) | 41 | ||||
Stock-based compensation | 7,353 | 7,353 | |||
Ending balance at Dec. 31, 2016 | 120,756 | $ 25 | 565,954 | 0 | (445,223) |
Ending balance (shares) at Dec. 31, 2016 | 24,813 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (126,817) | (126,817) | |||
Issuance of common stock, net of offering costs | 290,591 | $ 9 | 290,582 | ||
Issuance of common stock, net of offering costs (shares) | 9,256 | ||||
Issuance of common stock upon net exercise of common stock warrants | $ 0 | 0 | |||
Issuance of common stock upon net exercise of common stock warrants (shares) | 26 | ||||
Issuance of common stock under employee equity plans | 10,836 | $ 1 | 10,835 | ||
Issuance of common stock under employee equity plans (shares) | 713 | ||||
Stock-based compensation | 6,155 | 6,155 | |||
Ending balance at Dec. 31, 2017 | 301,521 | $ 35 | 873,526 | 0 | (572,040) |
Ending balance (shares) at Dec. 31, 2017 | 34,808 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (123,914) | (123,914) | |||
Other Comprehensive Income | 3 | 3 | |||
Issuance of common stock, net of offering costs | 323,135 | $ 7 | 323,128 | ||
Issuance of common stock, net of offering costs (shares) | 6,740 | ||||
Issuance of common stock under employee equity plans | 7,994 | $ 0 | 7,994 | ||
Issuance of common stock under employee equity plans (shares) | 563 | ||||
Shares repurchased for tax withholdings related to net share settlement of employee equity | (1,430) | (1,430) | |||
Shares repurchased for tax withholdings related to net share settlement of employee equity (shares) | (33) | ||||
Stock-based compensation | 15,492 | 15,492 | |||
Ending balance at Dec. 31, 2018 | $ 522,801 | $ 42 | $ 1,218,710 | $ 3 | $ (695,954) |
Ending balance (shares) at Dec. 31, 2018 | 42,078 |
Consolidated Statements of St_2
Consolidated Statements of Stockholders' Equity (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Stockholders' Equity [Abstract] | ||
Stock issue costs | $ 20.2 | $ 18.1 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||||
Operating activities: | ||||||
Net (loss) income | $ (123,914,000) | $ (126,817,000) | $ (69,707,000) | |||
Adjustments to reconcile net (loss) income to net cash used in operating activities: | ||||||
Stock-based compensation | 15,492,000 | 6,155,000 | 7,353,000 | |||
Depreciation | 155,000 | 425,000 | 1,402,000 | |||
Amortization of debt issuance costs and debt discount | 0 | 887,000 | 991,000 | |||
Net accretion and amortization of investments in marketable securities | (1,998,000) | 0 | 0 | |||
Change in fair value of common stock warrant liabilities | (169,000) | (297,000) | (5,387,000) | |||
Change in fair value of contingent consideration | 1,300,000 | 24,100,000 | 1,800,000 | |||
Inventory write-down | 0 | 2,232,000 | 0 | |||
Impairment charges | 0 | 1,116,000 | 8,431,000 | |||
Loss on extinguishment of debt | 0 | 4,876,000 | 0 | |||
Changes in operating assets and liabilities: | ||||||
Trade accounts receivable | 0 | 9,356,000 | (11,181,000) | |||
Inventory | 0 | 2,583,000 | 4,983,000 | |||
Prepaid expenses and other current assets | (9,335,000) | (801,000) | (3,394,000) | |||
Other assets | 266,000 | (2,784,000) | 471,000 | |||
Accounts payable, accrued expenses and other liabilities | 6,545,000 | 4,340,000 | (1,778,000) | |||
Deferred revenue | 0 | (1,245,000) | (5,839,000) | |||
Deferred tax liability | 0 | 0 | (1,025,000) | |||
Net cash used in operating activities | (111,658,000) | (75,874,000) | (72,880,000) | |||
Investing activities: | ||||||
Payments to acquire marketable securities | (569,515,000) | 0 | 0 | |||
Proceeds from maturities of marketable securities | 125,783,000 | 0 | 0 | |||
Purchases of property and equipment | (1,018,000) | (76,000) | (103,000) | |||
Net cash (used in) provided by investing activities | (444,750,000) | (76,000) | (103,000) | |||
Financing activities: | ||||||
Proceeds from borrowings | 0 | 0 | 2,167,000 | |||
Principal repayments of long-term debt | 0 | (20,000,000) | (3,334,000) | |||
Payment of fees to extinguish long-term debt | 0 | (1,865,000) | 0 | |||
Proceeds from issuance of common stock under equity incentive plans | 9,654,000 | 9,176,000 | 350,000 | |||
Taxes paid related to net share settlement of equity awards | (1,430,000) | 0 | 0 | |||
Proceeds from issuance of common stock, net of offering costs | 323,135,000 | 290,591,000 | 0 | |||
Net cash provided by (used in) financing activities | 331,359,000 | 277,902,000 | (817,000) | |||
Net (decrease) increase in cash, cash equivalents and restricted cash | [1] | (225,049,000) | 201,952,000 | (73,800,000) | ||
Cash, cash equivalents and restricted cash at beginning of period | [1] | 293,503,000 | 91,551,000 | 165,351,000 | ||
Cash, cash equivalents and restricted cash at end of period | 68,454,000 | 293,503,000 | [1] | 91,551,000 | [1] | |
Supplemental disclosure of cash flow information: | ||||||
Cash paid for interest | 0 | 1,475,000 | 1,470,000 | |||
Noncash Investing and Financing Items [Abstract] | ||||||
Purchases of property and equipment in accounts payable and accrued liabilities | 1,762,000 | 0 | 0 | |||
Extinguishment of Endo working capital advance note payable through net settlement of balances owed to the Company | [2] | $ 0 | $ 7,000,000 | $ 0 | ||
[1] | Amounts in 2016 have been retrospectively adjusted to reflect the adoption of new accounting guidance that was effective January 1, 2018. See Note 2 for further information. | |||||
[2] | See Notes 3 and 8 for further information. |
Organization and Description of
Organization and Description of Business | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | Organization and Description of Business Zogenix, Inc. and subsidiaries (the Company) is a pharmaceutical company developing and commercializing transformative central nervous system (CNS) therapies for people living with serious and life-threatening rare CNS disorders and medical conditions. The Company is currently focused on developing and commercializing CNS therapies to address rare, or “orphan” childhood-onset epilepsy disorders. The Company was incorporated as SJ2 Therapeutics, Inc. in May 2006 in the State of Delaware and changed its name to Zogenix, Inc. in August 2006. The Company is in the development stage and generates no revenue. Previously, the Company performed contract manufacturing services in supplying Sumavel DosePro to Endo International plc (Endo) under a long-term supply agreement (Supply Agreement), which was terminated in 2017. Future Funding Requirements Excluding gains from two discrete business divestitures, the Company has incurred significant net losses and negative cash flows from operating activities resulting in an accumulated deficit of $696.0 million as of December 31, 2018. Management expects to continue to incur significant operating losses and negative cash flows from operations as the Company continues to incur costs related to its ongoing Phase 3 clinical trials of Fintepla in North America and the European Union (EU) in Dravet syndrome and a Phase 3 clinical trial in Lennox-Gastaut syndrome (LGS), which commenced in November 2017. Additionally, upon acceptance of the Company’s regulatory submissions or approval for Fintepla/ZX008 by the U.S. Food and Drug Administration (FDA) or the European Medicines Agency (EMA), if at all, the Company will owe milestone payments under an existing agreement in connection with the Company’s prior acquisition of Fintepla. Through December 31, 2018, the Company has relied primarily on the proceeds from equity offerings to finance its operations. Until such time, if ever, the Company can generate a sufficient amount of revenue to finance its cash requirements, the Company may need to continue to rely on additional financing to achieve its business objectives. However, if such financing is not available at adequate levels when needed, the Company may be required to significantly delay, scale back or discontinue one or more of the product development programs or commercialization efforts or other aspects of its business plans, and its operating results and financial condition would be adversely affected. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) and include the accounts of Zogenix and its wholly-owned subsidiaries. The functional currency of the Company’s foreign subsidiaries is the U.S. dollar. All intercompany transactions have been eliminated in consolidation. Certain reclassifications have been made to the prior period amounts to conform to the current year presentation. Specifically, “Accrued clinical trial expenses” and “Other accrued liabilities”, which previously were reported as “Accrued expenses” on the consolidated balance sheet, are now reported as separate line items. Use of Estimates 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 materially from those estimates. The Company believes significant judgment is involved in determining and in estimating the valuation of stock-based compensation, accrued clinical expenses, and contingent consideration liabilities. These estimates form the basis for making judgments about the carrying values of assets and liabilities when these values are not readily apparent from other sources. Business Combinations The Company measures all assets acquired and liabilities assumed, including contingent consideration, at fair value as of the acquisition date. Contingent consideration obligations incurred in connection with a business combination are remeasured to their estimated fair values at each reporting period with the change in fair value recorded in operating expenses until the related contingencies are resolved. In addition, the Company capitalizes in-process research and development (IPR&D) and either amortizes it over the life of the product upon commercialization, or impairs it if the carrying value exceeds the fair value or if the project is abandoned. Post-acquisition adjustments in deferred tax liabilities are recorded in current period income tax expense in the period of the adjustment. Fair Value of Financial Instruments The Company’s financial instruments, including cash and cash equivalents, other current assets, accounts payable and accrued liabilities, are carried at cost which approximates their fair value because of the short-term nature of these financial instruments. See Notes 4 and 5 for information on fair value for marketable securities, contingent consideration liabilities and the Company’s outstanding common stock warrant liabilities. Cash Equivalents and Marketable Securities The Company considers cash equivalents to be only those investments which are highly liquid, readily convertible to cash and have an original maturity of three months or less at the date of purchase. The Company invests its excess cash in marketable securities with high credit ratings including money market funds and certificates of deposit, securities issued by the U.S. government and its agencies, corporate debt securities and commercial paper, which are all classified as “available-for-sale”. The Company considers all available-for-sale securities, including those with maturity dates beyond 12 months, as available to support current operational liquidity needs and, therefore, classifies all securities with maturity dates beyond three months at the date of purchase as current assets on the consolidated balance sheets. The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity, which is included in interest income on the consolidated statements of operations and comprehensive loss. Realized gains and losses and declines in value determined to be other-than-temporary, if any, on marketable securities are included in other income (expense), net. The cost of securities sold is determined using the specific identification method. The Company periodically evaluates whether declines in fair values of its marketable securities below their book value are other-than-temporary. This evaluation consists of several qualitative and quantitative factors regarding the severity and duration of the unrealized loss as well as the Company’s ability and intent to hold the marketable security until a forecasted recovery occurs. Additionally, the Company assesses whether it has plans to sell the security or it is more likely than not it will be required to sell any marketable securities before recovery of its amortized cost basis. Factors considered include quoted market prices, recent financial results and operating trends, implied values from any recent transactions or offers of investee securities, credit quality of debt instrument issuers, other publicly available information that may affect the value of the marketable security, duration and severity of the decline in value, and management’s strategy and intentions for holding the marketable security. To date, the Company has not recorded any impairment charges on its marketable securities related to other-than-temporary declines in market value. Concentration of Risk Cash equivalents and marketable securities are financial instruments that potentially subject the Company to concentration of credit risk. The Company maintains amounts on deposit with various financial institutions, which may exceed federally insured limits. However, management periodically evaluates the credit-worthiness of those institutions, and the Company has not experienced any losses on such deposits. The Company invests its excess cash primarily in money market funds and certificates of deposit, securities issued by the U.S. government and its agencies, corporate debt securities and commercial paper. The Company has established guidelines relative to diversification and maturities to maintain safety and liquidity. The Company has not experienced any credit losses related to these financial instruments and does not believe it is exposed to any significant credit risk related to these instruments. Certain materials and key components that the Company utilizes in its operations are obtained through single suppliers. Since the suppliers of key components and materials must be named in a New Drug Application (NDA) filed with the FDA for a product, significant delays can occur if the qualification of a new supplier is required. If delivery of material from the Company’s suppliers were interrupted for any reason, the Company may be unable to supply any of its product candidates for clinical trials. Property and Equipment, Net Property and equipment is recorded at cost, net of accumulated depreciation. Depreciation is calculated on a straight-line basis over the estimated useful lives of the respective assets and primarily consists of the following: Computer equipment and software 3 years Furniture and fixtures 3-7 years Leasehold improvements Shorter of estimated useful life or lease term Depreciation expense for 2018, 2017 and 2016 was $0.2 million, $0.4 million and $1.4 million, respectively. Goodwill and Indefinite-Lived Intangible Assets Goodwill and indefinite-lived intangible assets are reviewed for impairment at least annually in the fourth quarter, and more frequently if events or other changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Impairment of goodwill and indefinite-lived intangibles is determined to exist when the fair value is less than the carrying value of the net assets being tested. Goodwill The difference between the purchase price and the fair value of assets acquired and liabilities assumed in a business combination is allocated to goodwill. Goodwill is evaluated for impairment on an annual basis as of October 1, and more frequently if indicators are present or changes in circumstances suggest that impairment may exist. As of October 1, 2018, the Company performed a quantitative test and determined the fair value of its single reporting unit significantly exceeded its carrying value. As such, the Company concluded that goodwill was not impaired. The Company has not recognized any goodwill impairment in any of the years presented. Indefinite-Lived Intangible Asset The Company’s indefinite-lived intangible asset consists of IPR&D acquired in a business combination that are used in research and development activities but have not yet reached technological feasibility, regardless of whether they have alternative future use. The primary basis for determining the technological feasibility or completion of these projects is obtaining regulatory approval to market the underlying products in an applicable geographic region. The Company classifies IPR&D acquired in a business combination as an indefinite-lived intangible asset until the completion or abandonment of the associated research and development efforts. Upon completion of the associated research and development efforts, the Company performed a final test for impairment and will determine the useful life of the technology and begin amortizing the assets to reflect their use over their remaining lives. Upon permanent abandonment, the Company would write-off the remaining carrying amount of the associated IPR&D intangible asset. In performing each annual impairment assessment and any interim impairment assessment, the Company determines if it should qualitatively assess whether it is more likely than not that the fair value of its IPR&D asset is less than its carrying amount (the qualitative impairment test). If the Company concludes that is the case, or elect not to use qualitative impairment test, the Company would proceed with quantitatively determining the fair value of the IPR&D asset and comparing its fair value to its carrying value to determine the amount of impairment, if any (the quantitative impairment test). In performing the qualitative impairment test, the Company considers the results of the most recent quantitative impairment test and identifies the most relevant drivers of the fair value for the IPR&D asset. The most relevant drivers of fair value identified are consistent with the assumptions used in the quantitative estimate of the IPR&D asset discussed below. Using these drivers of fair value, the Company identifies events and circumstances that may have an effect on the fair value of the IPR&D asset since the last time the IPR&D’s fair value was quantitatively determined. The Company then weighs these factors to determine and conclude if it is not more likely than not that the IPR&D asset is impaired. If it is more likely than not that the IPR&D asset is impaired, the Company proceeds with quantitatively determining the fair value of the IPR&D asset. The Company uses the income approach to determine the fair value of its IPR&D asset. This approach calculates fair value by estimating the after-tax cash flows attributable to an in-process project over its useful life and then discounting these after-tax cash flows back to a present value. This estimate includes significant assumptions regarding the estimates that market participants would make in evaluating the IPR&D asset, including the probability of successfully completing clinical trials and obtaining regulatory approval to market the IPR&D asset, the timing of and the expected costs to complete IPR&D projects, future net cash flows from potential drug sales, which are based on estimates of the sales price of the drug, the number of patients who will be diagnosed and treated and our competitive position in the marketplace, and appropriate discount and tax rates. Any impairment to be recorded is calculated as the difference between the fair value of the IPR&D asset as of the date of the assessment with the carrying value of the IPR&D asset on its consolidated balance sheet. For 2018, the Company performed a qualitative test and concluded that it is more-likely-than-not that the fair value of the Company’s IPR&D asset exceeded the carrying value and no further testing was required. The Company did not recognize any IPR&D impairment in any of the years presented. Impairment of Long-Lived Assets The Company evaluates long-lived assets periodically for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset (group) may not be recoverable. An impairment loss would be recognized when the carrying amount of the assets (asset group) exceeds the estimated undiscounted net cash flows. The amount of the impairment loss to be recorded is calculated as the excess of the carrying value of the assets (asset group) over their fair value. The Company recognized an impairment charge for long-lived assets of $6.4 million in 2016 as a result of the decision by Endo International plc (Endo) to discontinue the sale of Sumavel DosePro and terminate the long-term manufacturing and supply agreement (the Supply Agreement) with the Company. In 2017, the Company recorded an impairment charge of $0.8 million for long-lived manufacturing assets associated with the production of Sumavel DosePro. There was no impairment to long-lived assets in 2018. Common Stock Warrant Liabilities In accordance with accounting guidance for common stock warrants that may potentially require cash settlement under certain circumstances, the Company classifies such common stock warrants as current liabilities on the consolidated balance sheet. The Company adjusts the carrying value of these common stock warrants to their estimated fair value at each reporting date with the increases or decreases in the fair value of such warrants recorded as change in fair value of warrant liabilities in the consolidated statement of operations. Revenue Recognition In 2018, the Company had no revenue as it had no contracts with customers. In 2017 and 2016, the Company recognized revenue from contract manufacturing services provided under the Supply Agreement with Endo, which terminated in September 2017. Contract manufacturing revenue was recognized under the legacy revenue recognition standard when all of the following criteria for revenue recognition have been met: (1) persuasive evidence of an arrangement existed (2) delivery has occurred or services have been rendered; (3) the fee was fixed or determinable; and (4) collectability was reasonably assured. Research and Development Expense and Accruals Research and development costs are expensed as incurred unless there is an alternative future use in other research and development projects. Research and development costs include personnel-related costs, outside contracted services including clinical trial costs, facilities costs, fees paid to consultants, milestone payments prior to FDA approval, license fees prior to FDA approval, professional services, travel costs, dues and subscriptions, depreciation and materials used in clinical trials and research and development. The Company expenses costs relating to the purchase and production of pre-approval inventories as research and development expense in the period incurred until FDA approval is received. Payments made prior to the receipt of goods or services to be used in research and development are capitalized until the goods or services are received. Such payments are evaluated for current or long-term classification based on when they will be realized. The Company’s expense accruals for clinical trials are based on estimates of the services received from clinical trial investigational sites and contract research organizations (CROs). Payments under some of the Company’s contracts with such parties depend on factors such as the milestones accomplished, successful enrollment of certain numbers of patients, site initiation and the completion of clinical trial milestones. In accruing service fees, the Company estimates the time period over which services will be performed and the level of effort to be expended in each period. If possible, the Company obtains information regarding unbilled services directly from these service providers. However, the Company may be required to estimate these services based on information available to its product development or administrative staff. If the Company underestimates or overestimates the activity associated with a study or service at a given point in time, adjustments to research and development expenses may be necessary in future periods. For asset purchases outside of business combinations, the Company expenses any purchased research and development assets as of the acquisition date if they have no alternative future uses. Income Taxes Income taxes are accounted for under the asset and liability method of accounting. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, as well as for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. The Company provides a valuation allowance against net deferred tax assets unless, based upon the available evidence, it is more likely than not that the deferred tax asset will be realized. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. UK’s Research and Development (R&D) Tax Relief Scheme The Company carries out extensive research and development activities that benefit from UK’s small and medium-sized enterprises (SME) R&D tax relief scheme, whereby an entity has an option to receive an enhanced UK tax deduction on its eligible R&D activities or, when an SME entity is in a net operating loss position, elect to surrender net operating losses that arise from its eligible R&D activities in exchange for a cash payment from the UK tax authorities. As the tax incentives may be received without regard to an entity’s actual tax liability, they are not subject to accounting for income taxes. Amounts realized under the SME R&D tax relief scheme are recorded as a component of other income after an election for tax relief in the form of cash payments has been made for a discrete tax year by submitting a claim and collectability is deemed probable and reasonably assured. Leases The Company leases office space facilities under non-cancelable operating lease agreements and recognizes related rent expense on a straight-line basis over the term of the lease. Landlord allowances and incentives received, including allowances for leasehold improvements and rent holidays, are recognized as reductions to rent expense on a straight-line basis over the term of the lease. Cash reimbursements for tenant improvement allowances not yet received are recorded in other current assets on the consolidated balance sheet. The Company does not assume renewals in its determination of the lease term unless they are deemed to be reasonably assured at the inception of the lease. The Company begins recognizing rent expense on the date it obtains the legal right to use and control the leased space. Deferred rent consists of the difference between cash payments and the rent expense recognized. Foreign Currency Transactions Gains or losses resulting from transactions denominated in foreign currencies are included in other expense, net in the consolidated statements of operations and were not material for all periods presented. Stock-Based Compensation The Company recognizes stock-based compensation for all equity awards made to employees based upon the awards’ estimated grant date fair value. For equity awards that vest subject to the satisfaction of service requirements, compensation expense is measured based on the fair value of the award on the date of grant and is recognized as expense on a straight-line basis over the requisite service period. For stock awards which have a performance component, compensation cost is measured based on the fair value on the grant date (the date performance targets are established) and is expensed over the service period for each separately vesting tranche when the achievement of the performance condition becomes probable. The Company recognizes forfeitures as they occur. Valuation of Stock Options The fair value of each option granted was estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions: • Expected term—The expected term of the option awards represents the period of time between the grant date of the option awards and the date the option awards are either exercised, converted or canceled, including an estimate for those option awards still outstanding. The Company used the simplified method, as permitted by the SEC for companies with a limited history of relevant stock option exercise activity, to determine the expected term for its option grants. • Expected volatility—The expected volatility was calculated based on the Company’s historical stock prices over the expected term, supplemented as necessary with historical volatility of the common stock of several peer companies with characteristics similar to those of the Company. • Risk-free interest rate—The risk-free interest rate was based on the U.S. Treasury yield curve in effect at the time of grant and with a maturity that approximated the Company’s expected term. • Dividend yield—The dividend yield was based on the Company’s dividend history and the anticipated dividend payout over its expected term. Valuation of Restricted Stock Units The fair value of each restricted stock unit was based on the Company’s closing stock price on the date of grant. The Company is also required to make estimates as to the probability of achieving the specific performance criteria. If actual results are not consistent with the Company’s assumptions and judgments used in making these estimates, the Company may be required to increase or decrease compensation expense, which could be material to the Company’s results of operations. Loss from Continuing Operations per Share Basic net loss from continuing operations per share is calculated by dividing the net loss from continuing operations 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 from continuing operations per share is computed by dividing the net loss from continuing operations 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 to purchase common stock are considered to be common stock equivalents and are only included in the calculation of diluted net loss from continuing operations per share when their effect is dilutive. The calculation of diluted loss per share also requires that, to the extent the average market price of the underlying shares for the reporting period exceeds the exercise price of the warrants to purchase common stock and the presumed exercise of such securities are dilutive to loss per share for the period, adjustments to net income or net loss used in the calculation are required to remove the change in fair value of the common stock warrant liability for the period. Likewise, adjustments to the denominator are required to reflect the related dilutive shares. The following table presents the computation of basic and diluted loss from continuing operations per share (in thousands, except per share amounts): 2018 2017 2016 Numerator Net loss from continuing operations $ (123,716) $ (126,022) $ (68,686) Denominator Weighted average common shares outstanding, basic and diluted 37,884 27,301 24,785 Loss from continuing operations per share, basic and diluted $ (3.27) $ (4.62) $ (2.77) The following table presents the potential common shares outstanding that were excluded from the computation of diluted loss from continuing operations per share of common stock for the periods presented because including them would have been antidilutive (in thousands): Year Ended December 31, 2018 2017 2016 Shares subject to outstanding common stock options 3,770 3,865 3,171 Shares subject to outstanding restricted stock units 289 237 85 Shares subject to outstanding warrants to purchase common stock 33 282 1,975 4,092 4,384 5,231 Segment Information The Company operates as a single segment, which is the business of developing and commercializing transformative therapies to improve the lives of patients living with rare diseases and their families. The Company’s chief decision maker, the President and Chief Executive Officer, reviews the Company’s operating results on an aggregate basis and manages the Company’s operations as a single operating unit. Substantially all of the Company's long-lived assets are located in the U.S. Accounting Pronouncements Recently Adopted Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606) and subsequent amendments to the initial guidance, or collectively, Topic 606, amended the existing accounting standards for revenue recognition. The core principle of Topic 606 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. The Company adopted Topic 606 effective January 1, 2018 using the modified retrospective approach. The adoption of Topic 606 did not have a material impact on the Company’s consolidated financial statements as the Company does not have any contracts with customers. ASU 2016-15, Statement of Cash Flows (Topic 230) provides guidance on eight specific cash flow issues, thereby reducing the diversity in practice in how certain transactions are classified in the statement of cash flows. The amendments in this ASU should be applied retrospectively to all periods presented. The Company adopted ASU 2016-15 effective January 1, 2018. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements. ASU 2016-18, Statement of Cash Flows (Topic 230), Restricted Cash, amends Topic 230 to add or clarify guidance on the classification and presentation of restricted cash in the statement of cash flows. The guidance requires that the statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents rather than only cash and cash equivalents, as previously required. The Company adopted ASU 2016-18 effective January 1, 2018 on a retrospective basis to all periods presented. For the year ended December 31, 2016, the change in restricted cash due to the release from escrow of holdback funds related to the Company’s divestiture of Zohydro ER of $10.0 million has been excluded from investing activity in the statement of cash flows as the amount has now been included in the beginning total cash, cash equivalents, and restricted cash balance. The adoption of the guidance did not have any impact on the Company’s financial position or result of operations. As of December 31, 2018 and 2017, the Company did not have any restricted cash. ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business narrows the definition of a business and provides additional guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. This accounting standards update is required to be applied prospectively to transactions occurring after the date of adoption. The Company adopted ASU 2017-09 effective January 1, 2018. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements. ASU 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting provides guidance on determining changes to the terms and conditions of share-based payment awards and require an entity to apply modification accounting under Topic 718 unless all of the following conditions are met: (1) the fair value of the modified award is the same as the fair value of the original award immediately before the original award is modified. If the modification does not affect any of the inputs to the valuation technique that the entity uses to value the award, the entity is not required to estimate the value immediately before and after the modification; (2) the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified; and (3) the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. The amendments should be applied prospectively to an award modified on or after the adoption date. The Company adopted ASU 2017-09 effective January 1, 2018. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements. ASU 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting simplifies the accounting for share-based payment awards issued to nonemployees for goods and services, including fixing the estimated fair value of the stock award at the date of grant. ASU 2018-07 expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from non-employees. Consequently, the accounting for share-based payments to nonemployees and employees will be substantially aligned. The adoption of ASU 2018-07 requires a modified retrospective transition approach, with a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year. ASU 2018-07 is effective for public companies for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. Early adoption is permitted, but no earlier than an entity’s adoption date of Topic 606. The Company early adopted ASU 2018-07 effective July 1, 2018. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements. In December 2017, the SEC issued Staff Accounting Bulletin No. 118 (SAB 118), Income Tax Accounting Implications of the Tax Cuts and Jobs Act to address the application of GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Cuts and Jobs Act of 2017 (Tax Act). In accordance with SAB 118, the Company recorded provisional tax impacts related to the revaluation of deferred tax assets and liabilities and the effects of the transition tax on undistributed foreign earnings and profits in its consolidated financial statements for the year ended December 31, 2017. As of December 31, 2018, the Company completed its accounting for the impact of the Tax Act and determined there were no material changes to its analysis originally performed. See Note 12 to the consolidated financial statements for additional details. In August 2018, the SEC adopted amendments to certain disclosure requirements in Securities Act Release No. 33-10532, Disclosure Update and Simplification. These amendments eliminate, modify, or integrate into other SEC requirements certain disclosure rules. Among the amendments is the requirement to present an analysis of changes in stockholders’ equity in the interim financial statements included in quarterly reports on Form 10-Q. The analysis, which can be presented as a footnote or separate statement, is required for the current and comparative quarter and year-to-date interim periods. The amendments became effective for all filings made on or after November 5, 2018. In light of the anticipated timing of effectiveness of the amendments and expected proximity of effectiveness to the filing dat |
Strategic and License Agreement
Strategic and License Agreements | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Strategic and License Agreements | Strategic and License Agreements Fintepla (ZX008) In October 2014, the Company acquired Brabant Pharma Limited (Brabant) in a business combination and obtained worldwide development and commercialization rights to Fintepla (ZX008; low-dose fenfluramine), its lead product candidate. Under the terms of the sale and purchase agreement, the Company agreed to make future milestone payments to the former owners of Brabant for up to $95.0 million in the event the Company achieves certain milestones with respect to Fintepla, consisting of $50.0 million in regulatory milestones and $45.0 million in sales milestones. In February 2019, the Company completed a rolling submission of a NDA with the FDA and submitted a MAA to the EMA for Fintepla for the treatment of seizures associated with Dravet syndrome. The EMA has accepted the MAA, which triggered a $10.0 million development milestone payment. An additional $10.0 million milestone payment shall become due and payable if the NDA is accepted by the FDA. In addition, the Company has a collaboration and license agreement with the Universities of Antwerp and Leuven in Belgium (the Universities) that runs through September 2045. Under the terms of the agreement, the Universities granted the Company an exclusive worldwide license to use the data obtained from a study related to low-dose fenfluramine for the treatment of Dravet syndrome, as well as certain other intellectual property. The Company is required to pay a mid-single-digit percentage royalty on net sales of products containing low-dose fenfluramine for the treatment of Dravet syndrome or, in the case of a sublicense of products containing low-dose fenfluramine for the treatment of Dravet syndrome, a percentage in the mid-twenties of the sub-licensing revenues. The agreement may be terminated by the Universities if the Company: (a) does not use commercially reasonable efforts to (i) develop and commercialize products containing low-dose fenfluramine for the treatment of Dravet syndrome or related conditions stemming from infantile epilepsy, or (ii) seek approval of products containing low-dose fenfluramine for the treatment of Dravet syndrome in the United States; or (b) if the Company becomes insolvent or makes an assignment for the benefit of creditors or should any petition in bankruptcy, or similar relief, be filed by or against the Company. The Company can terminate the agreement upon specified prior written notice to the Universities. Contract Manufacturing Supply Agreement with Endo and Associated Exit Activities In May 2014, the Company completed the sale of its Sumavel DosePro business. Concurrently with the sale, the Company entered into the Supply Agreement to be the exclusive supplier of Sumavel DosePro to Endo. The Supply Agreement was terminated in September 2017. The Company recorded a charge of $2.2 million in inventory write-down to reflect its current net realizable value as a result the termination agreement in 2017 and also recorded an impairment charge of $2.0 million in 2016 to write off the remaining carrying amount of a prepaid royalty associated with the Supply Agreement. These additional charges reflected ongoing negotiations over the course of finalizing the termination of the Supply Agreement and were included as a cost of contract manufacturing and a component of operating expenses, respectively, in the consolidated statements of operations. Pursuant to the termination agreement, the Company also received cash consideration of $1.5 million from Endo for reimbursement of a portion of the Company’s termination costs for its third-party suppliers and manufacturers related to Sumavel DosePro product. As part of the termination agreement, both parties also agreed to net settle outstanding accounts receivable of $4.7 million due from Endo and the Company’s remaining purchased raw materials and other costs of $2.3 million against the $7.0 million working capital advance note payable due to Endo. In connection with the Endo termination agreement, the Company also executed termination agreements with its third-party suppliers and manufacturers related to the Sumavel DosePro product and incurred contract termination costs of $2.5 million. Excluding the non-cash loss on extinguishment of debt due to the write-off of unamortized discount related to imputed interest (see Note 8), these termination agreements resulted in a net loss on contract termination of $0.5 million, which was included in loss on contract termination within continuing operations in the consolidated statements of operations. Other Asset Acquisitions In October 2016, the Company paid $1.5 million to acquire the global rights to a preclinical development program for orphan CNS disorders in an asset acquisition. At the date of acquisition, the project had not yet reached technological feasibility, was deemed to have no alternative use, and was immediately charged to research and development expense. The asset purchase agreement provides for potential additional payments if certain development and sales milestones are achieved. Due to the preclinical stage of development and the nature of this arrangement, any future potential payments related to the attainment of the specified milestones over a period of several years are inherently uncertain. |
Cash, Cash Equivalents and Mark
Cash, Cash Equivalents and Marketable Securities | 12 Months Ended |
Dec. 31, 2018 | |
Cash and Cash Equivalents [Abstract] | |
Cash, Cash Equivalents and Marketable Securities | Cash, Cash Equivalents and Marketable Securities The following table summarizes the amortized cost and fair value of the Company’s cash, cash equivalents and marketable securities as of December 31, 2018 (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Current assets: Cash and cash equivalents: Cash $ 5,222 $ — $ — $ 5,222 Money market funds 63,232 — — 63,232 Total cash and cash equivalents $ 68,454 $ — $ — $ 68,454 Marketable securities: Commercial paper $ 152,940 $ — $ — $ 152,940 Corporate debt securities 60,622 58 (75) 60,605 Certificates of deposit 128,647 — — 128,647 U.S. Treasuries 103,521 31 (11) 103,541 Total marketable securities $ 445,730 $ 89 $ (86) $ 445,733 Total cash, cash equivalents and marketable securities $ 514,184 $ 89 $ (86) $ 514,187 The following table summarizes the amortized cost and fair value of marketable securities based on stated effective maturities as of December 31, 2018 (in thousands): Amortized Cost Fair Value Due within one year $ 408,479 $ 408,471 Due between one and two years 37,251 37,262 Total $ 445,730 $ 445,733 As of December 31, 2017, cash and cash equivalents included $289.8 million of money market fund investments having a carrying value equaled to their fair value. The Company did not hold any marketable securities at December 31, 2017. There have been no significant realized gains or losses on available-for-sale securities for the periods presented. Available-for-sale debt securities that were in a continuous loss position but were not deemed to be other than temporarily impaired were immaterial at December 31, 2018. See Note 5 for further information regarding the fair value of the Company’s financial instruments. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. A three-level valuation hierarchy has been established under GAAP for disclosure of fair value measurements. The valuation hierarchy is based on the transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels are defined 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 following tables summarize assets and liabilities recognized or disclosed at fair value on a recurring basis at December 31, 2018 and 2017 (in thousands): Level 1 Level 2 Level 3 Total December 31, 2018 Assets: Cash equivalents: Money market funds $ 63,232 $ — $ — $ 63,232 Marketable securities: Commercial paper — 152,940 — 152,940 Corporate debt securities — 60,605 — 60,605 Certificates of deposit — 128,647 — 128,647 U.S. Treasury securities — 103,541 — 103,541 Total assets(1) $ 63,232 $ 445,733 $ — $ 508,965 Liabilities: Common stock warrant liabilities (2) $ — $ — $ 343 $ 343 Contingent consideration liabilities (3) — — 78,200 78,200 Total liabilities $ — $ — $ 78,543 $ 78,543 December 31, 2017 Assets: Cash equivalents: Money market funds (1) $ 289,782 $ — $ — $ 289,782 Total assets $ 289,782 $ — $ — $ 289,782 Liabilities: Common stock warrant liabilities (2) $ — $ — $ 512 $ 512 Contingent consideration liabilities (3) — — 76,900 76,900 Total liabilities $ — $ — $ 77,412 $ 77,412 (1) Fair value is determined by taking into consideration valuations obtained from third-party pricing services. The third-party pricing services utilize industry standard valuation models, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include reported trades of and broker/dealer quotes on the same or similar securities; issuer credit spreads; benchmark securities; and other observable inputs. (2) Represents the fair value of common stock warrants outstanding that may require cash settlement under certain circumstances. The Company estimated the fair value of the warrant liabilities using the Black-Scholes valuation model. As of December 31, 2018, common stock warrant liabilities consisted of warrants issued in July 2011 in connection with a debt financing arrangement. The warrants entitle the holder to purchase up to 28,125 shares of common stock at an exercise price of $72.00 per share and expires in July 2021. (3) In connection with the acquisition of Brabant in 2014 (See Note 3), the Company may be required to pay future consideration that is contingent upon the achievement of specified development, regulatory approval or sales-based milestone events. The Company estimates the fair value of contingent purchase consideration liabilities using a probability-weighted income approach, which reflects the probability and timing of future payments. This fair value measurement is based on significant Level 3 inputs such as the anticipated timelines and probability of achieving development, regulatory approval or sales-based milestone events and projected revenues. The resulting probability-weighted cash flows are discounted at risk-adjusted rates. Subsequent to the acquisition date, at each reporting period prior to settlement, the Company revalues these liabilities by performing a review of the assumptions listed above and records an adjustment to reflect any changes in the estimated fair values of these contingent consideration liabilities. In the absence of any significant changes in key assumptions during a reporting period, the change in fair values of these contingent consideration liabilities would primarily reflect an increase in fair value from the passage of time. Significant judgment is used in determining Level 3 inputs and fair value measurements as of a reporting period. Updates to assumptions could have a significant impact on the Company’s results of operations in a reporting period and actual results may differ from estimates. For example, significant increases in the estimated probability of achieving a milestone or projected revenues would result in a significantly higher fair value measurement while significant decreases in the estimated probability of achieving a milestone or projected revenues would result in a significantly lower fair value measurement. Significant increases in the discount rate or in the anticipated timelines would result in a significantly lower fair value measurement while significant decreases in the discount rate or anticipated timelines would result in a significantly higher fair value measurement. The potential contingent consideration payments required upon achievement of development, regulatory approval and sales-based milestones related to the Company’s acquisition of Brabant range from zero if none of the milestones are achieved to a maximum of $95.0 million (undiscounted). As of December 31, 2018, the Company classified $32.3 million of the total contingent consideration liabilities of $78.2 million as current liabilities. The classification was based upon the Company's reasonable expectation as to the timing of settlement of certain specified milestones. There were no transfers between levels for all periods presented. See Note 4 for further information regarding the carrying value of the Company’s financial instruments. The following table provides a reconciliation of assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the years ended December 31, 2018 and 2017 (in thousands): Contingent Purchase Consideration Common Stock Warrant Liabilities Balance at December 31, 2016 $ 52,800 $ 809 Additions — — Settlements — — Changes in fair value 24,100 (297) Balance at December 31, 2017 76,900 512 Additions — — Settlements — — Changes in fair value 1,300 (169) Balance at December 31, 2018 $ 78,200 $ 343 Changes in the estimated fair value of contingent purchase consideration are reflected as operating expenses in the consolidated statements of operations. Changes in the estimated fair value of common stock warrant liabilities are included within other income (expense) in the consolidated statements of operations. |
Balance Sheet Components
Balance Sheet Components | 12 Months Ended |
Dec. 31, 2018 | |
Balance Sheet Related Disclosures [Abstract] | |
Balance Sheet Components | Balance Sheet Components The following tables provide details of selected balance sheet components (in thousands): Property and Equipment, Net Property and equipment, net consisted of the following: December 31, 2018 2017 Computer equipment and software $ 216 $ 141 Leasehold improvements 3,210 976 Furniture and fixtures 880 407 Total 4,306 1,524 Less accumulated depreciation (1,436) (1,279) Property and equipment, net $ 2,870 $ 245 Other Long-Term Liabilities Other long-term liabilities consisted of the following: December 31, 2018 2017 Deferred rent and lease incentive obligation $ 3,685 $ 244 Other 145 540 $ 3,830 $ 784 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies The Company is not currently involved in any material legal proceedings. The Company may become involved in various legal proceedings and claims that arise in the ordinary course of business. Such matters are subject to uncertainty and there can be no assurance that such legal proceedings will not have a material adverse effect on its business, results of operations, financial position or cash flows. See Note 3 for the Company’s commitments under collaboration, license and purchase agreements. Operating Leases In October 2018, the Company entered into a new lease agreement for new headquarters and amended its existing headquarter lease, both with the same landlord. The new lease agreement provides for 37,307 square feet of office and laboratory space also located in Emeryville, California under a noncancellable lease that expires on June 30, 2027 and has a renewal option for an additional five years. The cash expected to be paid for base rent over the term of the new lease is approximately $15.3 million beginning in June 2019. The lease provides for lease incentives for tenant improvements of $3.1 million, a rent free period, and scheduled rent increases over the term of the lease. The Company is also required to pay its proportionate share of costs related to common area maintenance, property taxes, and other operating costs. Upon completion of its relocation to its new headquarters, which is expected to be by the end of the second quarter of 2019, the lease agreement for its existing headquarters will be terminated. The Company was provided access to the leased space upon lease execution and recorded a $3.1 million lease incentive receivable within other current assets, with a corresponding lease incentive obligation as a component of deferred rent, in accrued liabilities or long-term liabilities, as appropriate. The Company also has a noncancellable operating lease expiring in March 2020 for office space in San Diego, California, which previously served as the Company’s he adquarters prior to its relocation to Emeryville, California. In 2017, the Company vacated the leased premises upon entering into a noncancellable sublease agreement with a sublessee for the remainder of the Company’s lease term. Because amounts to be received under the sublease were less than the amounts the Company is required to pay its lessor, the Company recorded a loss on lease of $0.6 million, net of adjustments to derecognize the related deferred rent liability, as a component of general and administrative expenses in the consolidated statements of operations. As of December 31, 2018, accrued liabilities related to this lease arrangement was $0.5 million, of which $0.1 million was long-term. Rent expense for 2018, 2017 and 2016 was $1.6 million, $1.8 million and $1.9 million, respectively. Future minimum rental payments under the Company’s noncancellable operating leases, net of sublease rental income, were as follows (in thousands): Gross Rental Payments Sublease Rental Income Net Rental Payments 2019 $ 1,777 $ (576) $ 1,201 2020 1,788 (148) 1,640 2021 1,839 — 1,839 2022 1,894 — 1,894 2023 1,951 — 1,951 Thereafter 7,296 — 7,296 Total $ 16,545 $ (724) $ 15,821 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Debt Obligations | Debt In December 2017, the Company used a portion of the proceeds from the Company’s October 2017 common stock offering (see Note 9) and paid off its term loan with an outstanding principal balance of $20.0 million, plus accrued interest. The Company recognized a $1.5 million loss on early extinguishment of debt consisting of a noncash charge to write off the remaining unamortized debt issuance costs and debt discount. The Company also incurred $1.9 million in additional fees related to early extinguishment of the term loan, which had a scheduled maturity date of July 1, 2020. In May 2014, the Company was provided with an interest-free working capital note payable of $7.0 million from Endo in connection with the Supply Agreement (See Note 3). The working capital advance note payable matured upon the termination of the Supply Agreement. The working capital advance note payable was initially recorded on the consolidated balance sheet net of a $4.7 million debt discount related to imputed interest. In September 2017, the Company and Endo terminated the Supply Agreement and the working capital advance note payable became due and payable in accordance with its terms. Pursuant to the termination agreement, the $7.0 million promissory note was extinguished to settle amounts owed to the Company for accounts receivable and purchased raw materials (See Note 5). In connection with the extinguishment, the Company recognized a non-cash charge upon debt extinguishment of $3.4 million to write off the remaining unamortized debt discount related to imputed interest. As of December 31, 2018 and 2017, the Company had no debt outstanding. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Preferred Stock The Company has 10,000,000 shares of preferred stock authorized for issuance, par value of $0.001 per share. As of December 31, 2018 and 2017, no shares of preferred stock were issued and outstanding. Common Stock The Company has 50,000,000 shares of common stock authorized for issuance, par value of $0.001 per share. Holders of the Company’s common stock are entitled to one vote per share. As of December 31, 2018 and 2017, there were 42,078,164 and 34,807,509 shares of common stock issued and outstanding. The following table presents common stock reserved for future issuance for the following equity instruments as of December 31, 2018 and 2017 (in thousands): December 31, 2018 2017 Stock options and RSUs outstanding 4,033 3,651 Warrants to purchase common stock 28 38 Available for future issuance under employee equity plans 1,684 872 Total common stock reserved for future issuance 5,745 4,561 Sale of Common Stock In the third quarter of 2017, the Company sold a total of 1,550,880 shares of its common stock pursuant to an at-the-market sales agreement with Cantor Fitzgerald & Co. (ATM Agreement) and received net proceeds of approximately $19.4 million, after deducting commissions and other offering expenses. In October 2017, the Company completed an underwritten public offering for the sale of 7,700,000 shares of its common stock. The shares were sold to the public at an offering price of $37.50 per share. Net proceeds raised from the offering amounted to approximately $271.3 million, after deducting underwriting discounts and commissions and other offering expenses. In the second quarter of 2018, the Company sold a total of 740,417 shares of its common stock pursuant to the ATM Agreement and received net proceeds of approximately $30.3 million, after deducting commissions and other offering expenses. In August 2018, the Company completed an underwritten public offering for the sale of 6,000,000 shares of its common stock. The shares were sold to the public at an offering price of $52.00 per share. Net proceeds raised from the offering amounted to approximately $292.9 million, after deducting underwriting discounts and commissions and other offering expenses. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation Summary of Equity Incentive Plans 2006 Plan The Company granted options under its 2006 Equity Incentive Award Plan, as amended (2006 Plan) until November 2010 upon adoption of the 2010 Plan (discussed below), which serves as the successor plan to the 2006 Plan. While no further grants may be made from the 2006 Plan, it continues to govern the terms of options that remain outstanding under the 2006 Plan. The 2006 Plan provided for the granting of incentive stock options, non-qualified stock options and rights to purchase restricted stock to eligible recipients. Stock options granted pursuant to the 2006 Plan had a contractual term of ten years and generally vest over four years. 2010 Plan The Company’s 2010 Equity Incentive Award Plan, which was amended in June 2012 (2010 Plan), became effective immediately prior to the completion of the Company’s initial public offering in November 2010. The 2010 Plan provides for the granting of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock units and rights to purchase restricted stock to eligible recipients. Service-based options granted pursuant to the 2010 Plan has a contractual term of ten years and generally vest over four years. Performance-based awards are subject to the employee’s continued service and become vested based on the completion of the applicable performance conditions. As amended in June 2012, the initial 280,459 shares reserved for issuance under the 2010 Plan was increased to 1,162,500 shares, plus any shares related to outstanding options granted under the 2006 Plan that are subsequently repurchased, forfeited, expire or are canceled. In addition, the 2010 Plan’s evergreen provision was also amended such that, commencing on January 1, 2013, and on each January 1 through and including January 1, 2020, the aggregate number of shares available for issuance under the 2010 Plan shall be increased by that number of shares of the Company’s common stock equal to the lower of: • 4% of the Company’s outstanding common stock on the applicable January 1; or • an amount determined by the board of directors. In March 2018, the Board approved an amendment and restatement of its non-employee director compensation policy. Under the amended and restated compensation policy, any non-employee director who is first elected to the board of directors is granted an option to purchase 20,000 shares of our common stock on the date of his or her initial election to the board of directors. In addition, on the date of each of the Company ’ s Annual Meeting of Stockholders, each non-employee director is eligible to receive an option to purchase 15,000 shares of common stock. As of December 31, 2018 and 2017, 1,550,351 and 756,524 shares of common stock were available for future issuance under the 2010 Plan, respectively. Inducement Plan In December 2013, the Company’s board of directors (Board) adopted the Employment Inducement Equity Incentive Award Plan (Inducement Plan). The terms of the Inducement Plan are substantially similar to the terms of the 2010 Plan with two principal exceptions: (1) incentive stock options may not be granted under the Inducement Plan; and (2) the annual compensation paid by the Company to specified executives will be deductible only to the extent that it does not exceed $1.0 million, as the conditions of Section 162(m) of the Code applicable at the time will not be met. The Inducement Plan was adopted by the board of directors without stockholder approval pursuant to Rule 5635(c)(4) of the Nasdaq Listing Rules. The Company has initially reserved 337,500 shares of the Company’s common stock for issuance pursuant to awards granted under the Inducement Plan, which was subsequently increased to 637,500 shares in May 2018. In accordance with Rule 5635(c)(4) of the Nasdaq Listing Rules, awards under the Inducement Plan may only be made to an employee who has not previously been an employee or member of the board of directors of the Company or any parent or subsidiary, or following a bona fide period of non-employment by the Company or a parent or subsidiary, if he or she is granted such award in connection with his or her commencement of employment with the Company or a subsidiary and such grant is an inducement material to his or her entering into employment with the Company or such subsidiary. As of December 31, 2018 and 2017, there were 118,325 and 102,276 shares of common stock available for future issuance under the Inducement Plan, respectively. 2010 ESPP In November 2010, the Board adopted the 2010 Employee Stock Purchase Plan (2010 ESPP), which allows employees to purchase shares of the Company’s common stock during specified offering periods at a discount to the fair market value at the time of purchase. The ESPP is implemented by overlapping, twelve-month offering periods and each offering period may contain up to two purchase periods of six months each. At any one time, there may be up to two offering periods under the ESPP. In general, a new twelve-month offering period commences on each June 1 and December 1 of a calendar year. Stock may be purchased under the ESPP at a price equal to 85% of the fair market value of the Company’s stock on either the date of purchase or the first day of an offering period, whichever is lower. Eligible employees may elect to withhold up to 20% of their compensation through payroll deductions during an offering period for the purchase of stock. The ESPP contains a reset provision whereby if the price of the Company’s common stock on the first day of a new offering period is less than the price on the first day of any preceding offering period, all participants in the preceding offering period with higher first day price will be automatically withdrawn from such offering periods and re-enrolled in the new offering period. The reset feature, when triggered, will be accounted for as a modification to the original offering period, resulting in incremental expense to be recognized over the twelve-month period of the new offering. The ESPP limits the maximum number of shares that may be purchased by any one participant in an offering period to 2,500 shares. In addition, the Code limits purchases under an ESPP to $25,000 worth of stock in any one calendar year, valued as of the first day of the offering period. As of December 31, 2018 and 2017, there were 15,243 and 16,672 shares of common stock available for issuance under the 2010 ESPP, respectively. Equity Incentive Plan Activity The following sections summarize activity under the Company’s equity incentive plans. Stock Options The following table summarizes the Company’s stock option activity for 2018: Shares (in thousands) Weighted Average Exercise Price Weighted Average Remaining Contractual Term (years) Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2017 3,392 $ 14.41 Granted 889 $ 43.19 Exercised (434) $ 16.84 Canceled (103) $ 24.16 Outstanding at December 31, 2018 3,744 $ 20.69 6.9 $ 64,906 Exercisable at December 31, 2018 2,415 $ 16.66 6.0 $ 48,735 The total intrinsic value of options exercised in 2018, 2017 and 2016 was $11.8 million, $14.3 million and $24,000, respectively. Restricted Stock Units (RSUs) The following table summarizes the Company’s restricted stock unit activity for 2018: Shares (in thousands) Weighted Average Fair Value per Share at Grant Date Nonvested at December 31, 2017 259 $ 10.43 Granted 146 $ 42.76 Vested (98) $ 10.74 Canceled (18) $ 27.89 Nonvested at December 31, 2018 289 $ 25.56 The total intrinsic value of RSUs vested in 2018 was $4.2 million. No RSUs vested in 2017 and 2016. As of December 31, 2018, outstanding RSUs included approximately 154,000 shares granted in March 2017 to employees and executives that are performance-based. These performance-based awards vest upon FDA approval of the Company’s NDA for Fintepla, provided such approval occurs within five years following the grant date. Due to the uncertainties associated with the FDA approval process, approval is not yet probable, as such term is used for accounting purposes, prior to the occurrence of the event. Accordingly, no compensation expense has been recognized to date. As of December 31, 2018, total unrecognized compensation costs related to such awards were $1.6 million. As of December 31, 2018, nonvested restricted stock units outstanding not subject to a performance condition had a weighted average remaining contractual term of 1.7 years with an intrinsic value of $4.9 million. Employee Stock Purchase Plan Shares purchased by employees under the 2010 ESPP were 32,679 shares, 35,934 shares and 35,164 shares in 2018, 2017 and 2016, respectively. As of December 31, 2018 and 2017, 15,243 shares and 16,672 shares of common stock were reserved for issuance under the 2010 ESPP, respectively. Valuation of Equity Awards The Company used the Black-Scholes option-pricing model for determining the estimated fair value and stock-based compensation related to stock options and ESPP purchase rights granted. A summary of the assumptions used to estimate the fair values for the periods presented is as follows: Year Ended December 31, 2018 2017 2016 Stock Options Risk free interest rate 2.3% to 3.0% 1.8% to 2.3% 1.1% to 2.1% Expected term 5.3 to 6.1 years 5.1 to 6.1 years 5.1 to 6.1 years Expected volatility 80.1% to 85.2% 75.1% to 85.8% 76.5% to 78.1% Expected dividend yield —% —% —% Weighted-average fair value of option on grant date $30.87 $7.43 $6.69 Employee Stock Purchase Plan Risk free interest rate 2.1% to 2.7% 1.1% to 1.6% 0.5% to 0.8% Expected term 0.5 to 1.0 years 0.5 to 1.0 years 0.5 to 1.0 years Expected volatility 44.7% to 113.1% 54.8% to 152.8% 59.5% to 71.3% Expected dividend yield —% —% —% Performance Stock Options In October 2015, the Company granted employees certain performance-based stock options for retention purposes. The stock options would vest upon satisfaction of a specified regulatory milestone within three years of the date of grant. In 2017, management determined the achievement of the performance condition was no longer probable and the cumulative compensation expense previously recognized of $0.7 million was reversed. In September 2018, these awards were modified to allow for 90% of such options outstanding at the modification date to vest immediately. The remaining 10% of the awards were canceled in October 2018 since the performance condition was not met. This improbable to probable modification resulted in the calculation and recognition of incremental stock-based compensation expense of $3.5 million in 2018. The Company estimated the fair value of the modified stock options using the Black-Scholes model based on the following key assumptions: Modification of Stock Options Exercise price $ 13.32 Common stock price on date of modification $ 49.60 Expected term 3.5 years Expected volatility 79.9% Expected dividend yield —% Stock-Based Compensation Expense The following table summarizes the components of total stock-based compensation expense included in the consolidated statements of operations for the periods presented (in thousands): Year Ended December 31, 2018 2017 2016 Cost of contract manufacturing $ — $ 71 $ 386 Research and development 6,317 1,933 1,924 Selling, general and administrative 9,175 4,151 5,043 Total $ 15,492 $ 6,155 $ 7,353 |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2018 | |
Postemployment Benefits [Abstract] | |
Employee Benefit Plan | Employee Benefit Plan Effective February 1, 2007, the Company established a defined contribution 401(k) plan (the Plan) for all employees who are at least 21 years of age. Employees are eligible to participate in the Plan beginning on the first day of the month following one month of employment. Under the terms of the Plan, employees may make voluntary contributions as a percentage of compensation. The Plan also provides the Company to make discretionary matching contributions. In 2018, 2017 and 2016, the Company made discretionary matching contributions of $0.2 million, $0.2 million, $0.1 million, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For financial reporting purposes, the components of loss from continuing operations before income taxes were as follows (in thousands): December 31, 2018 2017 2016 United States $ (35,838) $ (32,112) $ (24,285) Foreign (87,878) (93,910) (45,349) Total $ (123,716) $ (126,022) $ (69,634) At December 31, 2018, the Company’s federal, state, and foreign net operating loss carryforwards were approximately $286.3 million, $190.3 million and $191.8 million, respectively, which may be subject to limitations as described below. If not utilized, the federal tax loss carryforwards incurred prior to 2018 will begin to expire in 2029 and the state tax loss carryforwards incurred prior to 2018 will begin to expire in 2021. Under the Tax Cut and Jobs Act of 2017 (Tax Act), federal net operating losses incurred in 2018 and in future years may be carried forward indefinitely, but the deductibility of such federal net operating losses is limited. It is uncertain if and to what extent various states will conform to the Tax Act. In addition, the Company has federal and California research and development income tax credit carryforwards of approximately $3.4 million and $4.1 million, respectively. If not utilized, the federal research and development income tax credit carryforwards will begin to expire in 2027. The California research and development income tax credit carryforwards do not expire and can be carried forward indefinitely. Due to the net operating loss carryforwards, all years remain open for income tax examination by tax authorities in the United States, various states and foreign tax jurisdictions in which the Company files tax returns. As of December 31, 2018, the Company has experienced at least three ownership changes. The first ownership change occurred in August 2006 upon the issuance of the Series A-1 convertible preferred. As a result of this ownership change, the Company has reduced its net operating loss carryforwards by $1.9 million and research and development income tax credits by $8,000. The Company had a second ownership change in September 2011 upon the issuance of common stock in a follow-on offering. As a result of the second ownership change, the Company has reduced its federal net operating loss carryforwards as of December 31, 2011 by $121.1 million and research and development income tax credits as of December 31, 2011 by $3.0 million. In addition, the Company also reduced its California net operating loss carryforwards as of December 31, 2011 by $53.3 million as a result of the second ownership change. The Company had a third ownership change in January 2014, which did not result in any reductions of federal and California net operating loss carryforwards or research and development income tax credits. Based on the Company’s most recent assessment through December 31, 2018, no reduction was made to the federal and state net operating loss carryforwards or federal and state tax income tax credit carryforwards under these rules. Pursuant to the IRC, the use of the Company’s net operating loss and research and development income tax credit carryforwards may be limited in the event of a future cumulative change in ownership of more than 50% within a three-year period. A reconciliation of the Company’s income tax benefit from continuing operations compared to the income tax benefit computed at the federal statutory tax is was as follows (in thousands): December 31, 2018 2017 2016 Income tax at federal statutory rate $ (26,022) $ (42,846) $ (23,675) State taxes, net of federal benefit (8) (19) (65) Change in valuation allowance 16,949 (11,208) 16,024 Impact of U.S. statutory rate change on revaluing deferred tax assets — 36,085 — Permanent interest disallowed (35) (150) (1,832) Impact of foreign rate change on deferred taxes 1,961 1,619 521 Other permanent differences (1) (666) 8,236 630 Research and development tax credits (51) (274) (145) State tax rate benefit 169 56 578 Foreign rate differential 1,731 10,636 6,122 Stock-based compensation (1) (1,344) (2,462) 1,132 Net operating losses surrendered under UK's R&D tax relief scheme 6,322 — — Credits and other (1) 994 327 (238) Income tax benefit $ — $ — $ (948) (1) Certain prior years’ amounts in the table above have been reclassified to conform with current year’s presentation. The Tax Act has resulted in significant changes to the U.S. corporate income tax system. These changes include a federal statutory rate reduction from 35% to a flat rate of 21% for tax years beginning after December 31, 2017, limitation of the deduction for net operating losses to 80% of current year taxable income and elimination of net operating loss carrybacks, implementing a territorial tax system, and requiring a mandatory one-time tax on U.S. owned undistributed foreign earnings and profits known as the transition tax. Pursuant to SAB 118, an entity may select between one of three scenarios to determine a reasonable estimate arising from the Tax Act. The scenarios are (i) a final estimate which effectively closes the measurement window; (ii) a reasonable estimate leaving the measurement window open for future revisions; and (iii) no estimate as the law is still being analyzed. The Company was able to provide a reasonable estimate for the revaluation of deferred taxes and the effects of the transition tax on undistributed foreign earnings and profits. As such, the Company has recorded a $36.1 million reduction in deferred tax assets for the revaluation of deferred taxes which was offset by a corresponding decrease to the Company’s full valuation allowance. As of December 31, 2018, the Company completed its accounting for the impact of the Tax Act and determined there were no material changes to its analysis originally performed. Significant components of the Company’s deferred tax assets are presented below. A valuation allowance of $118.1 million and $101.1 million as of December 31, 2018 and 2017, respectively, has been established against the deferred tax assets for which it is more likely than not that the tax benefit will not be realized. December 31, 2018 2017 Deferred tax assets: Net operating losses $ 103,187 $ 87,142 Capitalized research and development 1,537 2,155 Accrued expenses 1,300 1,310 Research and development credits 5,343 5,282 Amortization 528 630 Depreciation — 163 Stock-based compensation (1) 5,868 4,334 Other, net (1) 775 98 Total gross deferred tax assets 118,538 101,114 Less valuation allowance (118,064) (101,114) Net deferred tax assets $ 474 $ — Deferred tax liabilities: IPR&D $ (17,425) $ (17,425) Depreciation (474) — Total deferred tax liabilities (17,899) (17,425) Net deferred tax liability $ (17,425) $ (17,425) (1) Prior year’s amounts have been reclassified to conform with current year’s presentation. In 2017 and 2018, no tax provision has been recognized because of the operating losses and the full valuation allowance provided on all deferred tax assets, including the net operating losses. In 2016, the Company recognized a tax benefit of $0.9 million primarily due to the impact of changes in tax laws (tax rate reductions) enacted in the UK, which decreased the Company’s deferred tax liability. The Company recognizes liabilities for uncertain tax positions based on a two-step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount which is more than 50% likely of being realized upon ultimate settlement. The following table summarizes the activity related to the Company’s unrecognized tax benefits (in thousands): December 31, 2018 2017 2016 Beginning balance of unrecognized tax benefits $ 2,030 $ 1,248 $ 1,132 Gross increases based on tax positions related to current year — 633 116 Gross decreases based on tax positions related to prior years (634) — — Gross increases based on tax positions related to prior years 91 149 — Settlements with taxing authorities — — — Expiration of statute of limitations — — — Ending balance of unrecognized tax benefits $ 1,487 $ 2,030 $ 1,248 As at December 31, 2018 and 2017, there were no unrecognized tax benefits that, if recognized, would affect the Company’s effective tax rate as any tax benefit would increase a deferred tax asset, which is currently offset by a full valuation allowance. The Company recognizes interest and, if applicable, penalties related to income tax matters as income tax expense. No interest or penalties have been recorded for all periods presented. The Company does not expect any significant increases or decreases to its unrecognized tax benefits in the next twelve months. |
UK's R&D Tax Relief Scheme
UK's R&D Tax Relief Scheme | 12 Months Ended |
Dec. 31, 2018 | |
Other Income and Expenses [Abstract] | |
UK's R&D Tax Relief Scheme | UK’s R&D Tax Relief Scheme The Company carries out extensive research and development activities that benefit from UK’s small and medium-sized enterprises (SME) R&D tax relief scheme. Under this tax relief scheme, a SME has an option to receive an enhanced UK tax deduction on its eligible R&D activities or, when an SME entity is in a net operating loss position, can elect to surrender net operating losses that arise from its eligible R&D activities in exchange for a cash payment from the UK tax authorities. As the tax incentives may be received without regard to an entity’s actual tax liability, they are not subject to accounting for income taxes. Amounts recognized by the Company for cash payment claims under the SME R&D tax relief scheme are recorded as a component of other income after an election for tax relief has been made for a discrete tax year by submitting a claim and collectability is deemed probable and reasonably assured. In 2018, other income included $10.1 million related to elections the Company made to surrender net operating losses that arose from eligible R&D activities in exchange for cash under the SME R&D tax relief scheme. The balance consisted of a $3.0 million claim submitted in December 2017 for the Company's 2015 tax year, which was received in July 2018, and a $7.1 million claim submitted in December 2018 for the Company’s 2016 tax year, which was received in February 2019. As of December 31, 2018, other current assets included a $7.1 million receivable related to the submitted claim for the Company’s 2016 tax year. As of December 31, 2017, the Company did not record a receivable related to the submitted claim for its 2015 tax year as collectability was not probable or reasonably assured. The Company has not submitted claims or made elections to receive enhanced UK tax deductions on its eligible R&D activities for its 2017 or 2018 tax years. |
Selected Quarterly Financial In
Selected Quarterly Financial Information (Unaudited) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Quarterly Financial Information (Unaudited) | Selected Quarterly Financial Information (Unaudited) The following tables show a summary of the Company’s quarterly financial information for each of the four quarters of 2018 and 2017 and have been prepared in accordance with GAAP for interim financial information. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. 2018 Quarter Ended March 31 June 30 September 30 December 31 (in thousands, except per share amounts) Revenue $ — $ — $ — $ — Loss from continuing operations $ (30,180) $ (28,839) $ (42,264) $ (22,433) Loss from discontinued operations $ — $ (198) $ — $ — Net loss $ (30,180) $ (29,037) $ (42,264) $ (22,433) Net loss per share, basic and diluted $ (0.87) $ (0.83) $ (1.08) $ (0.53) 2017 Quarter Ended March 31 June 30 September 30 December 31 (in thousands, except per share amounts) Revenue $ 2,696 $ 7,125 $ — $ — Loss from continuing operations $ (21,126) $ (22,453) $ (42,660) $ (39,783) (Loss) income from discontinued operations $ (181) $ (555) $ (134) $ 75 Net loss $ (21,307) $ (23,008) $ (42,794) $ (39,708) Net loss per share, basic and diluted $ (0.86) $ (0.93) $ (1.68) $ (1.17) |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of PresentationThese consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) |
Consolidation | These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) and include the accounts of Zogenix and its wholly-owned subsidiaries. The functional currency of the Company’s foreign subsidiaries is the U.S. dollar. All intercompany transactions have been eliminated in consolidation.Certain reclassifications have been made to the prior period amounts to conform to the current year presentation. Specifically, “Accrued clinical trial expenses” and “Other accrued liabilities”, which previously were reported as “Accrued expenses” on the consolidated balance sheet, are now reported as separate line items. |
Use of Estimates | Use of Estimates 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 materially from those estimates. The Company believes significant judgment is involved in determining and in estimating the valuation of stock-based compensation, accrued clinical expenses, and contingent consideration liabilities. These estimates form the basis for making judgments about the carrying values of assets and liabilities when these values are not readily apparent from other sources. |
Business Combinations | Business Combinations The Company measures all assets acquired and liabilities assumed, including contingent consideration, at fair value as of the acquisition date. Contingent consideration obligations incurred in connection with a business combination are remeasured to their estimated fair values at each reporting period with the change in fair value recorded in operating expenses until the related contingencies are resolved. In addition, the Company capitalizes in-process research and development (IPR&D) and either amortizes it over the life of the product upon commercialization, or impairs it if the carrying value exceeds the fair value or if the project is abandoned. Post-acquisition adjustments in deferred tax liabilities are recorded in current period income tax expense in the period of the adjustment. |
Cash and Cash Equivalents and Marketable Securities | Cash Equivalents and Marketable Securities The Company considers cash equivalents to be only those investments which are highly liquid, readily convertible to cash and have an original maturity of three months or less at the date of purchase. The Company invests its excess cash in marketable securities with high credit ratings including money market funds and certificates of deposit, securities issued by the U.S. government and its agencies, corporate debt securities and commercial paper, which are all classified as “available-for-sale”. The Company considers all available-for-sale securities, including those with maturity dates beyond 12 months, as available to support current operational liquidity needs and, therefore, classifies all securities with maturity dates beyond three months at the date of purchase as current assets on the consolidated balance sheets. The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity, which is included in interest income on the consolidated statements of operations and comprehensive loss. Realized gains and losses and declines in value determined to be other-than-temporary, if any, on marketable securities are included in other income (expense), net. The cost of securities sold is determined using the specific identification method. The Company periodically evaluates whether declines in fair values of its marketable securities below their book value are other-than-temporary. This evaluation consists of several qualitative and quantitative factors regarding the severity and duration of the unrealized loss as well as the Company’s ability and intent to hold the marketable security until a forecasted recovery occurs. Additionally, the Company assesses whether it has plans to sell the security or it is more likely than not it will be required to sell any marketable securities before recovery of its amortized cost basis. Factors considered include quoted market prices, recent financial results and operating trends, implied values from any recent transactions or offers of investee securities, credit quality of debt instrument issuers, other publicly available information that may affect the value of the marketable security, duration and severity of the decline in value, and management’s strategy and intentions for holding the marketable security. To date, the Company has not recorded any impairment charges on its marketable securities related to other-than-temporary declines in market value. |
Concentration of Credit Risk | Concentration of Risk Cash equivalents and marketable securities are financial instruments that potentially subject the Company to concentration of credit risk. The Company maintains amounts on deposit with various financial institutions, which may exceed federally insured limits. However, management periodically evaluates the credit-worthiness of those institutions, and the Company has not experienced any losses on such deposits. The Company invests its excess cash primarily in money market funds and certificates of deposit, securities issued by the U.S. government and its agencies, corporate debt securities and commercial paper. The Company has established guidelines relative to diversification and maturities to maintain safety and liquidity. The Company has not experienced any credit losses related to these financial instruments and does not believe it is exposed to any significant credit risk related to these instruments. Certain materials and key components that the Company utilizes in its operations are obtained through single suppliers. Since the suppliers of key components and materials must be named in a New Drug Application (NDA) filed with the FDA for a product, significant delays can occur if the qualification of a new supplier is required. If delivery of material from the |
Property and Equipment, Net | Property and Equipment, Net Property and equipment is recorded at cost, net of accumulated depreciation. Depreciation is calculated on a straight-line basis over the estimated useful lives of the respective assets and primarily consists of the following: Computer equipment and software 3 years Furniture and fixtures 3-7 years Leasehold improvements Shorter of estimated useful life or lease term |
Goodwill and indefinite-lived Intangible Asset | Goodwill and Indefinite-Lived Intangible Assets Goodwill and indefinite-lived intangible assets are reviewed for impairment at least annually in the fourth quarter, and more frequently if events or other changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Impairment of goodwill and indefinite-lived intangibles is determined to exist when the fair value is less than the carrying value of the net assets being tested. Goodwill The difference between the purchase price and the fair value of assets acquired and liabilities assumed in a business combination is allocated to goodwill. Goodwill is evaluated for impairment on an annual basis as of October 1, and more frequently if indicators are present or changes in circumstances suggest that impairment may exist. As of October 1, 2018, the Company performed a quantitative test and determined the fair value of its single reporting unit significantly exceeded its carrying value. As such, the Company concluded that goodwill was not impaired. The Company has not recognized any goodwill impairment in any of the years presented. Indefinite-Lived Intangible Asset The Company’s indefinite-lived intangible asset consists of IPR&D acquired in a business combination that are used in research and development activities but have not yet reached technological feasibility, regardless of whether they have alternative future use. The primary basis for determining the technological feasibility or completion of these projects is obtaining regulatory approval to market the underlying products in an applicable geographic region. The Company classifies IPR&D acquired in a business combination as an indefinite-lived intangible asset until the completion or abandonment of the associated research and development efforts. Upon completion of the associated research and development efforts, the Company performed a final test for impairment and will determine the useful life of the technology and begin amortizing the assets to reflect their use over their remaining lives. Upon permanent abandonment, the Company would write-off the remaining carrying amount of the associated IPR&D intangible asset. In performing each annual impairment assessment and any interim impairment assessment, the Company determines if it should qualitatively assess whether it is more likely than not that the fair value of its IPR&D asset is less than its carrying amount (the qualitative impairment test). If the Company concludes that is the case, or elect not to use qualitative impairment test, the Company would proceed with quantitatively determining the fair value of the IPR&D asset and comparing its fair value to its carrying value to determine the amount of impairment, if any (the quantitative impairment test). In performing the qualitative impairment test, the Company considers the results of the most recent quantitative impairment test and identifies the most relevant drivers of the fair value for the IPR&D asset. The most relevant drivers of fair value identified are consistent with the assumptions used in the quantitative estimate of the IPR&D asset discussed below. Using these drivers of fair value, the Company identifies events and circumstances that may have an effect on the fair value of the IPR&D asset since the last time the IPR&D’s fair value was quantitatively determined. The Company then weighs these factors to determine and conclude if it is not more likely than not that the IPR&D asset is impaired. If it is more likely than not that the IPR&D asset is impaired, the Company proceeds with quantitatively determining the fair value of the IPR&D asset. The Company uses the income approach to determine the fair value of its IPR&D asset. This approach calculates fair value by estimating the after-tax cash flows attributable to an in-process project over its useful life and then discounting these after-tax cash flows back to a present value. This estimate includes significant assumptions regarding the estimates that market participants would make in evaluating the IPR&D asset, including the probability of successfully completing clinical trials and obtaining regulatory approval to market the IPR&D asset, the timing of and the expected costs to complete IPR&D projects, future net cash flows from potential drug sales, which are based on estimates of the sales price of the drug, the number of patients who will be diagnosed and treated and our competitive position in the marketplace, and appropriate discount and tax rates. Any impairment to be recorded is calculated as the difference between the fair value of the IPR&D asset as of the date of the assessment with the carrying value of the IPR&D asset on its consolidated balance sheet. For 2018, the Company performed a qualitative test and concluded that it is more-likely-than-not that the fair value of the Company’s IPR&D asset exceeded the carrying value and no further testing was required. The Company did not recognize any IPR&D impairment in any of the years presented. |
Impairment of Long-lived Assets | Impairment of Long-Lived Assets The Company evaluates long-lived assets periodically for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset (group) may not be recoverable. An impairment loss would be recognized when the carrying amount of the assets (asset group) exceeds the estimated undiscounted net cash flows. The amount of the impairment loss to be recorded is calculated as the excess of the carrying value of the assets (asset group) over their fair value. The Company recognized an impairment charge for long-lived assets of $6.4 million in 2016 as a result of the decision by Endo International plc (Endo) to discontinue the sale of Sumavel DosePro and terminate the long-term manufacturing and supply agreement (the Supply Agreement) with the Company. In 2017, the Company recorded an impairment charge of $0.8 million for long-lived manufacturing assets associated with the production of Sumavel DosePro. There was no impairment to long-lived assets in 2018. |
Common Stock Warrant Liabilities | Common Stock Warrant Liabilities In accordance with accounting guidance for common stock warrants that may potentially require cash settlement under certain circumstances, the Company classifies such common stock warrants as current liabilities on the consolidated balance sheet. The Company adjusts the carrying value of these common stock warrants to their estimated fair value at each reporting date with the increases or decreases in the fair value of such warrants recorded as change in fair value of warrant liabilities in the consolidated statement of operations. |
Revenue Recognition | Revenue RecognitionIn 2018, the Company had no revenue as it had no contracts with customers. In 2017 and 2016, the Company recognized revenue from contract manufacturing services provided under the Supply Agreement with Endo, which terminated in September 2017. Contract manufacturing revenue was recognized under the legacy revenue recognition standard when all of the following criteria for revenue recognition have been met: (1) persuasive evidence of an arrangement existed (2) delivery has occurred or services have been rendered; (3) the fee was fixed or determinable; and (4) collectability was reasonably assured. |
Research and Development Expense and Accruals | Research and Development Expense and Accruals Research and development costs are expensed as incurred unless there is an alternative future use in other research and development projects. Research and development costs include personnel-related costs, outside contracted services including clinical trial costs, facilities costs, fees paid to consultants, milestone payments prior to FDA approval, license fees prior to FDA approval, professional services, travel costs, dues and subscriptions, depreciation and materials used in clinical trials and research and development. The Company expenses costs relating to the purchase and production of pre-approval inventories as research and development expense in the period incurred until FDA approval is received. Payments made prior to the receipt of goods or services to be used in research and development are capitalized until the goods or services are received. Such payments are evaluated for current or long-term classification based on when they will be realized. The Company’s expense accruals for clinical trials are based on estimates of the services received from clinical trial investigational sites and contract research organizations (CROs). Payments under some of the Company’s contracts with such parties depend on factors such as the milestones accomplished, successful enrollment of certain numbers of patients, site initiation and the completion of clinical trial milestones. In accruing service fees, the Company estimates the time period over which services will be performed and the level of effort to be expended in each period. If possible, the Company obtains information regarding unbilled services directly from these service providers. However, the Company may be required to estimate these services based on information available to its product development or administrative staff. If the Company underestimates or overestimates the activity associated with a study or service at a given point in time, adjustments to research and development expenses may be necessary in future periods. For asset purchases outside of business combinations, the Company expenses any purchased research and development assets as of the acquisition date if they have no alternative future uses. |
Income Taxes | Income Taxes Income taxes are accounted for under the asset and liability method of accounting. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, as well as for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. The Company provides a valuation allowance against net deferred tax assets unless, based upon the available evidence, it is more likely than not that the deferred tax asset will be realized. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. UK’s Research and Development (R&D) Tax Relief Scheme The Company carries out extensive research and development activities that benefit from UK’s small and medium-sized enterprises (SME) R&D tax relief scheme, whereby an entity has an option to receive an enhanced UK tax deduction on its eligible R&D activities or, when an SME entity is in a net operating loss position, elect to surrender net operating losses that arise from its eligible R&D activities in exchange for a cash payment from the UK tax authorities. As the tax incentives may be received without regard to an entity’s actual tax liability, they are not subject to accounting for income taxes. Amounts realized under the SME R&D tax relief scheme are recorded as a component of other income after an election for tax relief in the form of cash payments has been made for a discrete tax year by submitting a claim and collectability is deemed probable and reasonably assured. Leases |
Foreign Currency Transactions | Foreign Currency TransactionsGains or losses resulting from transactions denominated in foreign currencies are included in other expense, net in the consolidated statements of operations and were not material for all periods presented. |
Stock-Based Compensation | Stock-Based Compensation The Company recognizes stock-based compensation for all equity awards made to employees based upon the awards’ estimated grant date fair value. For equity awards that vest subject to the satisfaction of service requirements, compensation expense is measured based on the fair value of the award on the date of grant and is recognized as expense on a straight-line basis over the requisite service period. For stock awards which have a performance component, compensation cost is measured based on the fair value on the grant date (the date performance targets are established) and is expensed over the service period for each separately vesting tranche when the achievement of the performance condition becomes probable. The Company recognizes forfeitures as they occur. Valuation of Stock Options The fair value of each option granted was estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions: • Expected term—The expected term of the option awards represents the period of time between the grant date of the option awards and the date the option awards are either exercised, converted or canceled, including an estimate for those option awards still outstanding. The Company used the simplified method, as permitted by the SEC for companies with a limited history of relevant stock option exercise activity, to determine the expected term for its option grants. • Expected volatility—The expected volatility was calculated based on the Company’s historical stock prices over the expected term, supplemented as necessary with historical volatility of the common stock of several peer companies with characteristics similar to those of the Company. • Risk-free interest rate—The risk-free interest rate was based on the U.S. Treasury yield curve in effect at the time of grant and with a maturity that approximated the Company’s expected term. • Dividend yield—The dividend yield was based on the Company’s dividend history and the anticipated dividend payout over its expected term. Valuation of Restricted Stock Units The fair value of each restricted stock unit was based on the Company’s closing stock price on the date of grant. The Company is also required to make estimates as to the probability of achieving the specific performance criteria. If actual results are not consistent with the Company’s assumptions and judgments used in making these estimates, the Company may be required to increase or decrease compensation expense, which could be material to the Company’s results of operations. |
Loss from Continuing Operations per Share | Loss from Continuing Operations per Share Basic net loss from continuing operations per share is calculated by dividing the net loss from continuing operations 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 from continuing operations per share is computed by dividing the net loss from continuing operations 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 to purchase common stock are considered to be common stock equivalents and are only included in the calculation of diluted net loss from continuing operations per share when their effect is dilutive. The calculation of diluted loss per share also requires that, to the extent the average market price of the underlying shares for the reporting period exceeds the exercise price of the warrants to purchase common stock and the presumed exercise of such securities are dilutive to loss per share for the period, adjustments to net income or net loss used in the calculation are required to remove the change in fair value of the common stock warrant liability for the period. Likewise, adjustments to the denominator are required to reflect the related dilutive shares. |
Segment Information | Segment Information The Company operates as a single segment, which is the business of developing and commercializing transformative therapies to improve the lives of patients living with rare diseases and their families. The Company’s chief decision maker, the President and Chief Executive Officer, reviews the Company’s operating results on an aggregate basis and manages the Company’s operations as a single operating unit. Substantially all of the Company's long-lived assets are located in the U.S. |
Recent Accounting Pronouncements | Accounting Pronouncements Recently Adopted Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606) and subsequent amendments to the initial guidance, or collectively, Topic 606, amended the existing accounting standards for revenue recognition. The core principle of Topic 606 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. The Company adopted Topic 606 effective January 1, 2018 using the modified retrospective approach. The adoption of Topic 606 did not have a material impact on the Company’s consolidated financial statements as the Company does not have any contracts with customers. ASU 2016-15, Statement of Cash Flows (Topic 230) provides guidance on eight specific cash flow issues, thereby reducing the diversity in practice in how certain transactions are classified in the statement of cash flows. The amendments in this ASU should be applied retrospectively to all periods presented. The Company adopted ASU 2016-15 effective January 1, 2018. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements. ASU 2016-18, Statement of Cash Flows (Topic 230), Restricted Cash, amends Topic 230 to add or clarify guidance on the classification and presentation of restricted cash in the statement of cash flows. The guidance requires that the statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents rather than only cash and cash equivalents, as previously required. The Company adopted ASU 2016-18 effective January 1, 2018 on a retrospective basis to all periods presented. For the year ended December 31, 2016, the change in restricted cash due to the release from escrow of holdback funds related to the Company’s divestiture of Zohydro ER of $10.0 million has been excluded from investing activity in the statement of cash flows as the amount has now been included in the beginning total cash, cash equivalents, and restricted cash balance. The adoption of the guidance did not have any impact on the Company’s financial position or result of operations. As of December 31, 2018 and 2017, the Company did not have any restricted cash. ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business narrows the definition of a business and provides additional guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. This accounting standards update is required to be applied prospectively to transactions occurring after the date of adoption. The Company adopted ASU 2017-09 effective January 1, 2018. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements. ASU 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting provides guidance on determining changes to the terms and conditions of share-based payment awards and require an entity to apply modification accounting under Topic 718 unless all of the following conditions are met: (1) the fair value of the modified award is the same as the fair value of the original award immediately before the original award is modified. If the modification does not affect any of the inputs to the valuation technique that the entity uses to value the award, the entity is not required to estimate the value immediately before and after the modification; (2) the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified; and (3) the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. The amendments should be applied prospectively to an award modified on or after the adoption date. The Company adopted ASU 2017-09 effective January 1, 2018. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements. ASU 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting simplifies the accounting for share-based payment awards issued to nonemployees for goods and services, including fixing the estimated fair value of the stock award at the date of grant. ASU 2018-07 expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from non-employees. Consequently, the accounting for share-based payments to nonemployees and employees will be substantially aligned. The adoption of ASU 2018-07 requires a modified retrospective transition approach, with a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year. ASU 2018-07 is effective for public companies for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. Early adoption is permitted, but no earlier than an entity’s adoption date of Topic 606. The Company early adopted ASU 2018-07 effective July 1, 2018. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements. In December 2017, the SEC issued Staff Accounting Bulletin No. 118 (SAB 118), Income Tax Accounting Implications of the Tax Cuts and Jobs Act to address the application of GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Cuts and Jobs Act of 2017 (Tax Act). In accordance with SAB 118, the Company recorded provisional tax impacts related to the revaluation of deferred tax assets and liabilities and the effects of the transition tax on undistributed foreign earnings and profits in its consolidated financial statements for the year ended December 31, 2017. As of December 31, 2018, the Company completed its accounting for the impact of the Tax Act and determined there were no material changes to its analysis originally performed. See Note 12 to the consolidated financial statements for additional details. In August 2018, the SEC adopted amendments to certain disclosure requirements in Securities Act Release No. 33-10532, Disclosure Update and Simplification. These amendments eliminate, modify, or integrate into other SEC requirements certain disclosure rules. Among the amendments is the requirement to present an analysis of changes in stockholders’ equity in the interim financial statements included in quarterly reports on Form 10-Q. The analysis, which can be presented as a footnote or separate statement, is required for the current and comparative quarter and year-to-date interim periods. The amendments became effective for all filings made on or after November 5, 2018. In light of the anticipated timing of effectiveness of the amendments and expected proximity of effectiveness to the filing date for most filers’ quarterly reports, the SEC’s Division of Corporate Finance issued a Compliance and Disclosure Interpretation related to Exchange Act Forms (CDI) – Question 105.09, that provides transition guidance related to this disclosure requirement. CDI – Question 105.09 states that the SEC would not object if the filer’s first presentation of the changes in shareholders’ equity is included in its Form 10-Q for the quarter that begins after the effective date of the amendments. Except for the requirement to provide the annual disclosure changes in stockholders’ equity for interim periods, which will be included beginning with the Company’s quarterly report on Form 10-Q ending March 31, 2019, the Company has adopted all relevant disclosure requirements. Accounting Pronouncements Issued But Not Yet Effective ASU 2016-02, Leases (Topic 842) establishes a right-of-use (ROU) model that requires all lessees to recognize ROU assets and liabilities for leases with a duration greater than one year on the balance sheet as well as provide disclosures with respect to certain qualitative and quantitative information regarding the amount, timing and uncertainty of cash flows arising from leases. Both a ROU asset and liability will initially be measured at the present value of the future minimum lease payments over the lease term. Subsequent measurement, including the presentation of expenses and cash flows, will depend on the classification of the lease as either a finance or an operating lease. Initial costs directly attributable to negotiating and arranging the lease will be included in the ROU asset. The new standard is effective for fiscal years beginning after December 15, 2018, and interim periods therein. Early adoption is permitted. Originally, entities were required to adopt ASU 2016-02 using a modified retrospective approach, which required prior periods to be presented under this new standard with various practical expedients allowed. In July 2018, the Financial Accounting Standards Board (FASB) issued ASU 2018-11, Leases (Topic 842): Targeted Improvements, which allows for a new transition method that offers the option to use the effective date as the date of initial application. The Company intends to elect this alternative transition method and therefore will not adjust comparative-period financial information and will continue to present all prior periods under previous lease accounting guidance. In addition, the Company intends to utilize the practical expedient that allows the Company to not reassess whether an expired or existing contract contains a lease, the classification of leases or initial direct costs. The Company has identified the population of its contracts subject to this guidance. While the Company is finalizing its evaluation of the impact of adopting this accounting standard update on its consolidated financial statements and related disclosures, the Company expects to recognize on its balance sheet for associated leases a new ROU asset ranging from $7.5 million to $9.5 million and lease liability ranging from $12.0 million to $14.0 million, with the difference between ROU assets and lease liability attributed to the elimination of remaining unamortized lease incentive obligations, deferred rent and a cease-use liability. The adoption of this standard are also expected to impact the Company’s consolidated financial statement disclosures. ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . This standard update requires that certain financial assets be measured at amortized cost net of an allowance for estimated credit losses such that the net receivable represents the present value of expected cash collection. In addition, this standard update requires that certain financial assets be measured at amortized cost reflecting an allowance for estimated credit losses expected to occur over the life of the assets. The estimate of credit losses must be based on all relevant information including historical information, current conditions and reasonable and supportable forecasts that affect the collectability of the amounts. This standard update is effective as of the first quarter of 2020; however, early adoption is permitted. The Company intends to adopt this standard update in the first quarter of 2020. The Company is currently evaluating the impact that this standard update will have on its consolidated financial statements upon adoption. ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. Under the amendments in ASU 2017-04, an entity should recognize an impairment charge for the amount by which the carrying amount of a reporting unit exceeds its fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The updated guidance requires a prospective adoption. ASU 2017-04 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently evaluating the timing and impact of adopting this ASU on its consolidated financial statements and related disclosures. ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement modifies the disclosure requirements in Topic 820 by removing certain disclosure requirements related to the fair value hierarchy, modifying existing disclosure requirements related to measurement uncertainty and adding new disclosure requirements, such as disclosing the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and disclosing the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. This ASU is effective for public companies for fiscal years beginning after December 15, 2019, including interim periods within that fiscal year. Early adoption is permitted for any removed or modified disclosures. The Company is currently evaluating the timing and impact of adopting this ASU on its consolidated financial statements and related disclosures. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Depreciation Useful lives | Depreciation is calculated on a straight-line basis over the estimated useful lives of the respective assets and primarily consists of the following: Computer equipment and software 3 years Furniture and fixtures 3-7 years Leasehold improvements Shorter of estimated useful life or lease term |
Schedule of Computation of Basic and Diluted Net Loss per Share | The following table presents the computation of basic and diluted loss from continuing operations per share (in thousands, except per share amounts): 2018 2017 2016 Numerator Net loss from continuing operations $ (123,716) $ (126,022) $ (68,686) Denominator Weighted average common shares outstanding, basic and diluted 37,884 27,301 24,785 Loss from continuing operations per share, basic and diluted $ (3.27) $ (4.62) $ (2.77) |
Schedule of Potential Common Shares Excluded From Calculation of Diluted Net Loss per Share | The following table presents the potential common shares outstanding that were excluded from the computation of diluted loss from continuing operations per share of common stock for the periods presented because including them would have been antidilutive (in thousands): Year Ended December 31, 2018 2017 2016 Shares subject to outstanding common stock options 3,770 3,865 3,171 Shares subject to outstanding restricted stock units 289 237 85 Shares subject to outstanding warrants to purchase common stock 33 282 1,975 4,092 4,384 5,231 |
Cash, Cash Equivalents and Ma_2
Cash, Cash Equivalents and Marketable Securities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Cash and Cash Equivalents [Abstract] | |
Amortized Cost and Fair Value of Cash, Cash Equivalents and Marketable Securities | The following table summarizes the amortized cost and fair value of the Company’s cash, cash equivalents and marketable securities as of December 31, 2018 (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Current assets: Cash and cash equivalents: Cash $ 5,222 $ — $ — $ 5,222 Money market funds 63,232 — — 63,232 Total cash and cash equivalents $ 68,454 $ — $ — $ 68,454 Marketable securities: Commercial paper $ 152,940 $ — $ — $ 152,940 Corporate debt securities 60,622 58 (75) 60,605 Certificates of deposit 128,647 — — 128,647 U.S. Treasuries 103,521 31 (11) 103,541 Total marketable securities $ 445,730 $ 89 $ (86) $ 445,733 Total cash, cash equivalents and marketable securities $ 514,184 $ 89 $ (86) $ 514,187 |
Cost and Fair Values of Marketable Securities | The following table summarizes the amortized cost and fair value of marketable securities based on stated effective maturities as of December 31, 2018 (in thousands): Amortized Cost Fair Value Due within one year $ 408,479 $ 408,471 Due between one and two years 37,251 37,262 Total $ 445,730 $ 445,733 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of assets recognized or disclosed at fair value on recurring basis | The following tables summarize assets and liabilities recognized or disclosed at fair value on a recurring basis at December 31, 2018 and 2017 (in thousands): Level 1 Level 2 Level 3 Total December 31, 2018 Assets: Cash equivalents: Money market funds $ 63,232 $ — $ — $ 63,232 Marketable securities: Commercial paper — 152,940 — 152,940 Corporate debt securities — 60,605 — 60,605 Certificates of deposit — 128,647 — 128,647 U.S. Treasury securities — 103,541 — 103,541 Total assets(1) $ 63,232 $ 445,733 $ — $ 508,965 Liabilities: Common stock warrant liabilities (2) $ — $ — $ 343 $ 343 Contingent consideration liabilities (3) — — 78,200 78,200 Total liabilities $ — $ — $ 78,543 $ 78,543 December 31, 2017 Assets: Cash equivalents: Money market funds (1) $ 289,782 $ — $ — $ 289,782 Total assets $ 289,782 $ — $ — $ 289,782 Liabilities: Common stock warrant liabilities (2) $ — $ — $ 512 $ 512 Contingent consideration liabilities (3) — — 76,900 76,900 Total liabilities $ — $ — $ 77,412 $ 77,412 (1) Fair value is determined by taking into consideration valuations obtained from third-party pricing services. The third-party pricing services utilize industry standard valuation models, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include reported trades of and broker/dealer quotes on the same or similar securities; issuer credit spreads; benchmark securities; and other observable inputs. (2) Represents the fair value of common stock warrants outstanding that may require cash settlement under certain circumstances. The Company estimated the fair value of the warrant liabilities using the Black-Scholes valuation model. As of December 31, 2018, common stock warrant liabilities consisted of warrants issued in July 2011 in connection with a debt financing arrangement. The warrants entitle the holder to purchase up to 28,125 shares of common stock at an exercise price of $72.00 per share and expires in July 2021. (3) In connection with the acquisition of Brabant in 2014 (See Note 3), the Company may be required to pay future consideration that is contingent upon the achievement of specified development, regulatory approval or sales-based milestone events. The Company estimates the fair value of contingent purchase consideration liabilities using a probability-weighted income approach, which reflects the probability and timing of future payments. This fair value measurement is based on significant Level 3 inputs such as the anticipated timelines and probability of achieving development, regulatory approval or sales-based milestone events and projected revenues. The resulting probability-weighted cash flows are discounted at risk-adjusted rates. Subsequent to the acquisition date, at each reporting period prior to settlement, the Company revalues these liabilities by performing a review of the assumptions listed above and records an adjustment to reflect any changes in the estimated fair values of these contingent consideration liabilities. In the absence of any significant changes in key assumptions during a reporting period, the change in fair values of these contingent consideration liabilities would primarily reflect an increase in fair value from the passage of time. Significant judgment is used in determining Level 3 inputs and fair value measurements as of a reporting period. Updates to assumptions could have a significant impact on the Company’s results of operations in a reporting period and actual results may differ from estimates. For example, significant increases in the estimated probability of achieving a milestone or projected revenues |
Schedule of liabilities recognized or disclosed at fair value on recurring basis | The following tables summarize assets and liabilities recognized or disclosed at fair value on a recurring basis at December 31, 2018 and 2017 (in thousands): Level 1 Level 2 Level 3 Total December 31, 2018 Assets: Cash equivalents: Money market funds $ 63,232 $ — $ — $ 63,232 Marketable securities: Commercial paper — 152,940 — 152,940 Corporate debt securities — 60,605 — 60,605 Certificates of deposit — 128,647 — 128,647 U.S. Treasury securities — 103,541 — 103,541 Total assets(1) $ 63,232 $ 445,733 $ — $ 508,965 Liabilities: Common stock warrant liabilities (2) $ — $ — $ 343 $ 343 Contingent consideration liabilities (3) — — 78,200 78,200 Total liabilities $ — $ — $ 78,543 $ 78,543 December 31, 2017 Assets: Cash equivalents: Money market funds (1) $ 289,782 $ — $ — $ 289,782 Total assets $ 289,782 $ — $ — $ 289,782 Liabilities: Common stock warrant liabilities (2) $ — $ — $ 512 $ 512 Contingent consideration liabilities (3) — — 76,900 76,900 Total liabilities $ — $ — $ 77,412 $ 77,412 (1) Fair value is determined by taking into consideration valuations obtained from third-party pricing services. The third-party pricing services utilize industry standard valuation models, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include reported trades of and broker/dealer quotes on the same or similar securities; issuer credit spreads; benchmark securities; and other observable inputs. (2) Represents the fair value of common stock warrants outstanding that may require cash settlement under certain circumstances. The Company estimated the fair value of the warrant liabilities using the Black-Scholes valuation model. As of December 31, 2018, common stock warrant liabilities consisted of warrants issued in July 2011 in connection with a debt financing arrangement. The warrants entitle the holder to purchase up to 28,125 shares of common stock at an exercise price of $72.00 per share and expires in July 2021. (3) In connection with the acquisition of Brabant in 2014 (See Note 3), the Company may be required to pay future consideration that is contingent upon the achievement of specified development, regulatory approval or sales-based milestone events. The Company estimates the fair value of contingent purchase consideration liabilities using a probability-weighted income approach, which reflects the probability and timing of future payments. This fair value measurement is based on significant Level 3 inputs such as the anticipated timelines and probability of achieving development, regulatory approval or sales-based milestone events and projected revenues. The resulting probability-weighted cash flows are discounted at risk-adjusted rates. Subsequent to the acquisition date, at each reporting period prior to settlement, the Company revalues these liabilities by performing a review of the assumptions listed above and records an adjustment to reflect any changes in the estimated fair values of these contingent consideration liabilities. In the absence of any significant changes in key assumptions during a reporting period, the change in fair values of these contingent consideration liabilities would primarily reflect an increase in fair value from the passage of time. Significant judgment is used in determining Level 3 inputs and fair value measurements as of a reporting period. Updates to assumptions could have a significant impact on the Company’s results of operations in a reporting period and actual results may differ from estimates. For example, significant increases in the estimated probability of achieving a milestone or projected revenues |
Reconciliation of Liabilities Measured at Fair Value Using Significant Observable Inputs (Level 3) | The following table provides a reconciliation of assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the years ended December 31, 2018 and 2017 (in thousands): Contingent Purchase Consideration Common Stock Warrant Liabilities Balance at December 31, 2016 $ 52,800 $ 809 Additions — — Settlements — — Changes in fair value 24,100 (297) Balance at December 31, 2017 76,900 512 Additions — — Settlements — — Changes in fair value 1,300 (169) Balance at December 31, 2018 $ 78,200 $ 343 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Balance Sheet Related Disclosures [Abstract] | |
Property and Equipment, Net | Property and equipment, net consisted of the following: December 31, 2018 2017 Computer equipment and software $ 216 $ 141 Leasehold improvements 3,210 976 Furniture and fixtures 880 407 Total 4,306 1,524 Less accumulated depreciation (1,436) (1,279) Property and equipment, net $ 2,870 $ 245 |
Other Long-Term Liabilities | Other Long-Term Liabilities Other long-term liabilities consisted of the following: December 31, 2018 2017 Deferred rent and lease incentive obligation $ 3,685 $ 244 Other 145 540 $ 3,830 $ 784 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Operating Lease Payments, Net of Sublease Income | Future minimum rental payments under the Company’s noncancellable operating leases, net of sublease rental income, were as follows (in thousands): Gross Rental Payments Sublease Rental Income Net Rental Payments 2019 $ 1,777 $ (576) $ 1,201 2020 1,788 (148) 1,640 2021 1,839 — 1,839 2022 1,894 — 1,894 2023 1,951 — 1,951 Thereafter 7,296 — 7,296 Total $ 16,545 $ (724) $ 15,821 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Summary of Common Stock Reserved for Future Issuance | The following table presents common stock reserved for future issuance for the following equity instruments as of December 31, 2018 and 2017 (in thousands): December 31, 2018 2017 Stock options and RSUs outstanding 4,033 3,651 Warrants to purchase common stock 28 38 Available for future issuance under employee equity plans 1,684 872 Total common stock reserved for future issuance 5,745 4,561 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Stock Options Activity | The following table summarizes the Company’s stock option activity for 2018: Shares (in thousands) Weighted Average Exercise Price Weighted Average Remaining Contractual Term (years) Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2017 3,392 $ 14.41 Granted 889 $ 43.19 Exercised (434) $ 16.84 Canceled (103) $ 24.16 Outstanding at December 31, 2018 3,744 $ 20.69 6.9 $ 64,906 Exercisable at December 31, 2018 2,415 $ 16.66 6.0 $ 48,735 |
Schedule of Restricted Stock Units Activity | The following table summarizes the Company’s restricted stock unit activity for 2018: Shares (in thousands) Weighted Average Fair Value per Share at Grant Date Nonvested at December 31, 2017 259 $ 10.43 Granted 146 $ 42.76 Vested (98) $ 10.74 Canceled (18) $ 27.89 Nonvested at December 31, 2018 289 $ 25.56 |
Assumptions used in the Black-Scholes Option-Pricing Model | A summary of the assumptions used to estimate the fair values for the periods presented is as follows: Year Ended December 31, 2018 2017 2016 Stock Options Risk free interest rate 2.3% to 3.0% 1.8% to 2.3% 1.1% to 2.1% Expected term 5.3 to 6.1 years 5.1 to 6.1 years 5.1 to 6.1 years Expected volatility 80.1% to 85.2% 75.1% to 85.8% 76.5% to 78.1% Expected dividend yield —% —% —% Weighted-average fair value of option on grant date $30.87 $7.43 $6.69 Employee Stock Purchase Plan Risk free interest rate 2.1% to 2.7% 1.1% to 1.6% 0.5% to 0.8% Expected term 0.5 to 1.0 years 0.5 to 1.0 years 0.5 to 1.0 years Expected volatility 44.7% to 113.1% 54.8% to 152.8% 59.5% to 71.3% Expected dividend yield —% —% —% |
Schedule of Stock-Based Compensation, Activity | The Company estimated the fair value of the modified stock options using the Black-Scholes model based on the following key assumptions: Modification of Stock Options Exercise price $ 13.32 Common stock price on date of modification $ 49.60 Expected term 3.5 years Expected volatility 79.9% Expected dividend yield —% |
Stock-Based Compensation Expense | The following table summarizes the components of total stock-based compensation expense included in the consolidated statements of operations for the periods presented (in thousands): Year Ended December 31, 2018 2017 2016 Cost of contract manufacturing $ — $ 71 $ 386 Research and development 6,317 1,933 1,924 Selling, general and administrative 9,175 4,151 5,043 Total $ 15,492 $ 6,155 $ 7,353 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Domestic and Foreign Components of Loss before Provision for Income Taxes | For financial reporting purposes, the components of loss from continuing operations before income taxes were as follows (in thousands): December 31, 2018 2017 2016 United States $ (35,838) $ (32,112) $ (24,285) Foreign (87,878) (93,910) (45,349) Total $ (123,716) $ (126,022) $ (69,634) |
Reconciliation of Income Tax to Expense (Benefit) | A reconciliation of the Company’s income tax benefit from continuing operations compared to the income tax benefit computed at the federal statutory tax is was as follows (in thousands): December 31, 2018 2017 2016 Income tax at federal statutory rate $ (26,022) $ (42,846) $ (23,675) State taxes, net of federal benefit (8) (19) (65) Change in valuation allowance 16,949 (11,208) 16,024 Impact of U.S. statutory rate change on revaluing deferred tax assets — 36,085 — Permanent interest disallowed (35) (150) (1,832) Impact of foreign rate change on deferred taxes 1,961 1,619 521 Other permanent differences (1) (666) 8,236 630 Research and development tax credits (51) (274) (145) State tax rate benefit 169 56 578 Foreign rate differential 1,731 10,636 6,122 Stock-based compensation (1) (1,344) (2,462) 1,132 Net operating losses surrendered under UK's R&D tax relief scheme 6,322 — — Credits and other (1) 994 327 (238) Income tax benefit $ — $ — $ (948) (1) Certain prior years’ amounts in the table above have been reclassified to conform with current year’s presentation. |
Schedule of Deferred Tax Assets | Significant components of the Company’s deferred tax assets are presented below. A valuation allowance of $118.1 million and $101.1 million as of December 31, 2018 and 2017, respectively, has been established against the deferred tax assets for which it is more likely than not that the tax benefit will not be realized. December 31, 2018 2017 Deferred tax assets: Net operating losses $ 103,187 $ 87,142 Capitalized research and development 1,537 2,155 Accrued expenses 1,300 1,310 Research and development credits 5,343 5,282 Amortization 528 630 Depreciation — 163 Stock-based compensation (1) 5,868 4,334 Other, net (1) 775 98 Total gross deferred tax assets 118,538 101,114 Less valuation allowance (118,064) (101,114) Net deferred tax assets $ 474 $ — Deferred tax liabilities: IPR&D $ (17,425) $ (17,425) Depreciation (474) — Total deferred tax liabilities (17,899) (17,425) Net deferred tax liability $ (17,425) $ (17,425) (1) Prior year’s amounts have been reclassified to conform with current year’s presentation. |
Summary of Unrecognized Tax Benefits | The following table summarizes the activity related to the Company’s unrecognized tax benefits (in thousands): December 31, 2018 2017 2016 Beginning balance of unrecognized tax benefits $ 2,030 $ 1,248 $ 1,132 Gross increases based on tax positions related to current year — 633 116 Gross decreases based on tax positions related to prior years (634) — — Gross increases based on tax positions related to prior years 91 149 — Settlements with taxing authorities — — — Expiration of statute of limitations — — — Ending balance of unrecognized tax benefits $ 1,487 $ 2,030 $ 1,248 |
Selected Quarterly Financial _2
Selected Quarterly Financial Information (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information | The following tables show a summary of the Company’s quarterly financial information for each of the four quarters of 2018 and 2017 and have been prepared in accordance with GAAP for interim financial information. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. 2018 Quarter Ended March 31 June 30 September 30 December 31 (in thousands, except per share amounts) Revenue $ — $ — $ — $ — Loss from continuing operations $ (30,180) $ (28,839) $ (42,264) $ (22,433) Loss from discontinued operations $ — $ (198) $ — $ — Net loss $ (30,180) $ (29,037) $ (42,264) $ (22,433) Net loss per share, basic and diluted $ (0.87) $ (0.83) $ (1.08) $ (0.53) 2017 Quarter Ended March 31 June 30 September 30 December 31 (in thousands, except per share amounts) Revenue $ 2,696 $ 7,125 $ — $ — Loss from continuing operations $ (21,126) $ (22,453) $ (42,660) $ (39,783) (Loss) income from discontinued operations $ (181) $ (555) $ (134) $ 75 Net loss $ (21,307) $ (23,008) $ (42,794) $ (39,708) Net loss per share, basic and diluted $ (0.86) $ (0.93) $ (1.68) $ (1.17) |
Organization and Description _2
Organization and Description of Business - Narrative (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accumulated deficit | $ 695,954 | $ 572,040 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Narrative (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jan. 01, 2019 | |
Concentration Risk [Line Items] | ||||
Impairment of long-lived assets | $ 0 | $ 1,116,000 | $ 8,431,000 | |
Total revenue | 0 | 9,821,000 | 28,850,000 | |
Deferred tax asset | 118,538,000 | 101,114,000 | ||
Less valuation allowance | 118,064,000 | 101,114,000 | ||
Long Lived Assets, Production [Member] | Sumavel DosePro [Member] | ||||
Concentration Risk [Line Items] | ||||
Impairment of long-lived assets | $ 800,000 | $ 6,400,000 | ||
ZX008 [Member] | ||||
Concentration Risk [Line Items] | ||||
Potential contingent payment, minimum | 0 | |||
Potential contingent payment, maximum | $ 95,000,000 | |||
Subsequent Event [Member] | Accounting Standards Update 2016-02 [Member] | Minimum [Member] | ||||
Concentration Risk [Line Items] | ||||
Right of use asset | $ 7,500,000 | |||
Lease liability | 12,000,000 | |||
Subsequent Event [Member] | Accounting Standards Update 2016-02 [Member] | Maximum [Member] | ||||
Concentration Risk [Line Items] | ||||
Right of use asset | 9,500,000 | |||
Lease liability | $ 14,000,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Property and Equipment, Net Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation | $ 155,000 | $ 425,000 | $ 1,402,000 |
Goodwill impairment | 0 | 0 | 0 |
Impairment charges | $ 0 | $ 1,116,000 | 8,431,000 |
Computer equipment and software [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, useful life | 3 years | ||
Furniture and fixtures [Member] | Minimum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, useful life | 3 years | ||
Furniture and fixtures [Member] | Maximum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, useful life | 7 years | ||
IPR&D [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Impairment of IPR&D | $ 0 | $ 0 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Basic and Diluted Net (Loss) Income Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Numerator | |||
Net (loss) income from continuing operations | $ (123,716) | $ (126,022) | $ (68,686) |
Denominator | |||
Weighted average common shares outstanding, basic and diluted (shares) | 37,884 | 27,301 | 24,785 |
Continuing operations (in usd per share) | $ (3.27) | $ (4.62) | $ (2.77) |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Schedule of Calculation of Diluted Net Loss Per Share (Detail) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Potential common shares outstanding excluded from calculation of diluted net income per share (shares) | 4,092 | 4,384 | 5,231 |
Shares subject to outstanding common stock options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Potential common shares outstanding excluded from calculation of diluted net income per share (shares) | 3,770 | 3,865 | 3,171 |
Shares subject to outstanding restricted stock units | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Potential common shares outstanding excluded from calculation of diluted net income per share (shares) | 289 | 237 | 85 |
Shares subject to outstanding warrants to purchase common stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Potential common shares outstanding excluded from calculation of diluted net income per share (shares) | 33 | 282 | 1,975 |
Strategic and License Agreeme_2
Strategic and License Agreements - Narrative (Details) - USD ($) $ in Thousands | Oct. 24, 2014 | Sep. 30, 2017 | Oct. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Feb. 27, 2019 |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||
Inventory write-down | $ 0 | $ 2,232 | $ 0 | ||||
Payments to acquire global rights to preclinical development program | $ 1,500 | ||||||
Endo Ventures manufacturing and supply agreement | |||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||
Cash received for reimbursements | $ 1,500 | ||||||
Net receivables | 4,700 | ||||||
Raw materials | 2,300 | ||||||
Notes payable | 7,000 | ||||||
Contract termination fee | 2,500 | ||||||
Contract termination costs | $ 500 | ||||||
Brabant Pharma Limited [Member] | |||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||
Aggregate amount of contingent liabilities | $ 95,000 | ||||||
Regulatory Milestones [Member] | Brabant Pharma Limited [Member] | |||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||
Aggregate amount of contingent liabilities | 50,000 | ||||||
Sales Milestones [Member] | Brabant Pharma Limited [Member] | |||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||
Aggregate amount of contingent liabilities | $ 45,000 | ||||||
Sumavel DosePro [Member] | |||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||
Inventory write-down | 2,200 | ||||||
Impairment of prepaid royalties | $ 2,000 | ||||||
Subsequent Event [Member] | |||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||
Contingent development milestone payment | $ 10,000 |
Cash, Cash Equivalents and Ma_3
Cash, Cash Equivalents and Marketable Securities - Amortized Cost and Fair Value of Cash, Cash Equivalents and Marketable Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Cash and Cash Equivalents [Line Items] | ||
Cash | $ 5,222 | |
Money market funds | $ 289,800 | |
Cash and cash equivalents | 68,454 | $ 293,503 |
Marketable securities, gross unrealized gains | 89 | |
Gross Unrealized Losses | (86) | |
Total cash, cash equivalents and marketable securities | 514,184 | |
Total cash, cash equivalents and marketable securities at fair value | 514,187 | |
Money market funds | ||
Cash and Cash Equivalents [Line Items] | ||
Money market funds | 63,232 | |
Marketable securities | ||
Cash and Cash Equivalents [Line Items] | ||
Marketable securities, amortized cost | 445,730 | |
Marketable securities, gross unrealized gains | 89 | |
Gross Unrealized Losses | (86) | |
Marketable securities | 445,733 | |
Commercial paper | ||
Cash and Cash Equivalents [Line Items] | ||
Marketable securities, amortized cost | 152,940 | |
Marketable securities, gross unrealized gains | 0 | |
Gross Unrealized Losses | 0 | |
Marketable securities | 152,940 | |
Corporate debt securities | ||
Cash and Cash Equivalents [Line Items] | ||
Marketable securities, amortized cost | 60,622 | |
Marketable securities, gross unrealized gains | 58 | |
Gross Unrealized Losses | (75) | |
Marketable securities | 60,605 | |
Certificates of deposits | ||
Cash and Cash Equivalents [Line Items] | ||
Marketable securities, amortized cost | 128,647 | |
Marketable securities, gross unrealized gains | 0 | |
Gross Unrealized Losses | 0 | |
Marketable securities | 128,647 | |
U.S Treasury securities | ||
Cash and Cash Equivalents [Line Items] | ||
Marketable securities, amortized cost | 103,521 | |
Marketable securities, gross unrealized gains | 31 | |
Gross Unrealized Losses | (11) | |
Marketable securities | $ 103,541 |
Cash, Cash Equivalents and Ma_4
Cash, Cash Equivalents and Marketable Securities - Amortized Cost and Fair Value of Marketable Securities by Maturity (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Amortized Cost | |
Due within one year, amortized cost | $ 408,479 |
Due between one and two years, amortized cost | 37,251 |
Marketable securities, amortized cost | 445,730 |
Fair Value | |
Due within one year, fair value | 408,471 |
Due between one and two years, fair value | 37,262 |
Marketable securities, estimated fair value | $ 445,733 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | $ 289,782 | |
Total cash, cash equivalents and marketable securities at fair value | $ 514,187 | |
Total liabilities | 78,543 | 77,412 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 289,782 | |
Total cash, cash equivalents and marketable securities at fair value | 63,232 | |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total cash, cash equivalents and marketable securities at fair value | 445,733 | |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities | 78,543 | 77,412 |
Common stock warrant liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities | 343 | 512 |
Common stock warrant liabilities | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities | 343 | 512 |
Contingent purchase consideration | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities | 78,200 | 76,900 |
Contingent purchase consideration | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities | 78,200 | 76,900 |
Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 63,232 | 289,782 |
Money market funds | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 63,232 | $ 289,782 |
Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 152,940 | |
Commercial paper | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 152,940 | |
Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 60,605 | |
Corporate debt securities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 60,605 | |
Certificates of deposits | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 128,647 | |
Certificates of deposits | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 128,647 | |
U.S Treasury securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 103,541 | |
U.S Treasury securities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | $ 103,541 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities measured at fair value on a recurring basis | $ 78,543 | $ 77,412 |
Contingent purchase consideration | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities measured at fair value on a recurring basis | 78,200 | $ 76,900 |
Current Liabilities [Member] | Contingent purchase consideration | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities measured at fair value on a recurring basis | $ 32,300 | |
Warrants From July 2011 Debt Financing [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Number of common stock that can be purchased (shares) | 28,125 | |
Exercise price of warrants (in usd per share) | $ 72 |
Fair Value Measurements - Recon
Fair Value Measurements - Reconciliation of Liabilities Measured at Fair Value Using Significant Unobservable Inputs (Details) - Level 3 - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Contingent purchase consideration | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning Balance | $ 76,900 | $ 52,800 |
Changes in fair value | 1,300 | 24,100 |
Ending Balance | 78,200 | 76,900 |
Common stock warrant liabilities | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning Balance | 512 | 809 |
Changes in fair value | (169) | (297) |
Ending Balance | $ 343 | $ 512 |
Balance Sheet Components - Prop
Balance Sheet Components - Property and Equipment, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 4,306 | $ 1,524 |
Less accumulated depreciation | (1,436) | (1,279) |
Property and equipment, net | 2,870 | 245 |
Computer equipment and software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 216 | 141 |
Leasehold improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 3,210 | 976 |
Furniture and fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 880 | $ 407 |
Balance Sheet Components - Othe
Balance Sheet Components - Other Long-Term Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Balance Sheet Related Disclosures [Abstract] | ||
Deferred rent | $ 3,685 | $ 244 |
Other long-term liabilities | 145 | 540 |
Total other long-term liabilities | $ 3,830 | $ 784 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) $ in Thousands | 1 Months Ended | 2 Months Ended | 12 Months Ended | |||
Jun. 30, 2019USD ($) | Oct. 31, 2017USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Oct. 31, 2018USD ($)ft² | |
Operating Leased Assets [Line Items] | ||||||
Office and laboratory space available for rent (in sq ft) | ft² | 37,307 | |||||
Additional renewal term | 5 years | |||||
Incentive from Lessor | $ 3,100 | |||||
Rent expense | $ 1,600 | $ 1,800 | $ 1,900 | |||
Amended Lease Agreement [Member] | Building [Member] | ||||||
Operating Leased Assets [Line Items] | ||||||
Additional renewal term | 5 years | |||||
Accrued Lease Obligations [Member] | ||||||
Operating Leased Assets [Line Items] | ||||||
Loss on lease | $ 600 | |||||
Accrued operating lease obligation | $ 500 | |||||
Accrued operating lease obligation, noncurrent | $ 100 | |||||
Expected [Member] | ||||||
Operating Leased Assets [Line Items] | ||||||
Operating Lease, Payments | $ 15,300 |
Commitments and Contingencies_2
Commitments and Contingencies - Future Minimum Lease Payments (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2019 Gross lease payment due | $ 1,777 |
2020 Gross lease payment due | 1,788 |
2021 Gross lease payment due | 1,839 |
2022 Gross lease payment due | 1,894 |
2023 Gross lease payment due | 1,951 |
Thereafter | 7,296 |
Total Gross lease payment due | 16,545 |
2019 Sublease income | (576) |
2020 Sublease income | (148) |
2021 Sublease income | 0 |
2022 Sublease income | 0 |
2023 Sublease income | 0 |
Thereafter | 0 |
Total Sublease income | (724) |
2019 Net lease payment due | 1,201 |
2020 Net lease payment due | 1,640 |
2021 Net lease payment due | 1,839 |
2022 Net lease payment due | 1,894 |
2023 Net lease payment due | 1,951 |
Thereafter | 7,296 |
Total Net lease payment due | $ 15,821 |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | May 31, 2014 | |
Debt Instrument [Line Items] | ||||||
Loss on extinguishment of debt | $ 0 | $ 4,876 | $ 0 | |||
Term Loan | Second Amendment [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Repayments of debt | $ 20,000 | |||||
Loss on extinguishment of debt | 1,500 | |||||
Write-off of unamortized debt issuance costs and discount | $ 1,900 | |||||
Endo Ventures manufacturing and supply agreement | ||||||
Debt Instrument [Line Items] | ||||||
Notes payable | $ 7,000 | |||||
Endo Ventures manufacturing and supply agreement | Notes payable | ||||||
Debt Instrument [Line Items] | ||||||
Notes payable | $ 7,000 | |||||
Imputed interest on working capital advance | $ 4,700 | |||||
Write-off of unamortized discount | $ 3,400 |
Stockholders' Equity - Preferre
Stockholders' Equity - Preferred Stock and Common Stock Narrative (Details) $ / shares in Units, $ in Millions | 3 Months Ended | ||
Jun. 30, 2018USD ($)shares | Dec. 31, 2018vote$ / sharesshares | Dec. 31, 2017$ / sharesshares | |
Subsidiary, Sale of Stock [Line Items] | |||
Preferred stock authorized (shares) | 10,000,000 | 10,000,000 | |
Preferred stock par value (in usd per share) | $ / shares | $ 0.001 | $ 0.001 | |
Preferred stock outstanding (shares) | 0 | 0 | |
Preferred stock issued (shares) | 0 | 0 | |
Common stock authorized (shares) | 50,000,000 | 50,000,000 | |
Common stock, par value (in usd per share) | $ / shares | $ 0.001 | $ 0.001 | |
Number of votes entitled to for each common share held | vote | 1 | ||
Common stock issued (shares) | 42,078,164 | 34,807,509 | |
Common stock outstanding (shares) | 42,078,164 | 34,807,509 | |
Public Stock Offering [Member] | |||
Subsidiary, Sale of Stock [Line Items] | |||
Issuance of common stock, net of offering costs (shares) | 740,417 | ||
Proceeds from sale of stock | $ | $ 30.3 |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Common Stock Reserved for Future Issuance (Details) - shares shares in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Class of Stock [Line Items] | ||
Common stock reserved for future issuance (shares) | 5,745 | 4,561 |
Shares subject to outstanding warrants to purchase common stock | ||
Class of Stock [Line Items] | ||
Common stock reserved for future issuance (shares) | 28 | 38 |
Stock options and RSUs outstanding | ||
Class of Stock [Line Items] | ||
Common stock reserved for future issuance (shares) | 4,033 | 3,651 |
Available for future issuance under employee equity plans | ||
Class of Stock [Line Items] | ||
Common stock reserved for future issuance (shares) | 1,684 | 872 |
Stockholders' Equity - Sale of
Stockholders' Equity - Sale of Common Stock (Details) - Public Stock Offering [Member] - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 2 Months Ended | |
Aug. 31, 2018 | Oct. 31, 2017 | Sep. 30, 2017 | |
Class of Stock [Line Items] | |||
Stock issued (shares) | 6,000,000 | 7,700,000 | 1,550,880 |
Net proceeds from stock issuance | $ 292.9 | $ 271.3 | $ 19.4 |
Stock offer price (in usd per share) | $ 52 | $ 37.50 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Detail) | Dec. 03, 2013USD ($) | Oct. 31, 2018 | Sep. 30, 2018 | Mar. 31, 2018shares | Mar. 31, 2017shares | Jun. 30, 2012shares | Dec. 31, 2018USD ($)purchase_periodoffering_period$ / sharesshares | Dec. 31, 2017USD ($)shares | Dec. 31, 2016USD ($)shares | May 31, 2018shares | Dec. 04, 2013shares | Dec. 31, 2010shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Intrinsic value of options exercised | $ | $ 11,800,000 | $ 14,300,000 | $ 24,000 | |||||||||
Stock-based compensation | $ | 15,492,000 | $ 6,155,000 | $ 7,353,000 | |||||||||
Limit on purchases under the ESPP per calendar year | $ | $ 25,000 | |||||||||||
Common stock reserved for future issuance (shares) | 5,745,000 | 4,561,000 | ||||||||||
Shares subject to outstanding common stock options | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Stock-based compensation | $ | $ (3,500,000) | $ (700,000) | ||||||||||
Total unrecognized compensation costs | $ | $ 29,600,000 | |||||||||||
Percentage of outstanding options that vested (percent) | 90.00% | |||||||||||
Percentage of outstanding options that were canceled (percent) | 10.00% | |||||||||||
Recognition over weighted average periods | 2 years 7 months 6 days | |||||||||||
Shares subject to outstanding restricted stock units | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Number of restricted stock units granted (in shares) | 154,000 | 146,000 | ||||||||||
Weighted-average grant date fair value per share, granted (in usd per share) | $ / shares | $ 42.76 | |||||||||||
Stock-based compensation | $ | $ 0 | |||||||||||
Restricted stock units vested (in shares) | 98,000 | 0 | 0 | |||||||||
Weighted average remaining contractual term | 1 year 8 months 12 days | |||||||||||
Intrinsic value of restricted stock units, nonvested | $ | $ 4,900,000 | |||||||||||
Intrinsic value of RSUs that vested | $ | 4,200,000 | |||||||||||
Total unrecognized compensation costs | $ | $ 1,600,000 | |||||||||||
Employee Stock [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Common stock reserved for future issuance (shares) | 1,684,000 | 872,000 | ||||||||||
2006 Plan [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Expected term | 10 years | |||||||||||
2006 Plan [Member] | Shares subject to outstanding common stock options | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Vesting term | 4 years | |||||||||||
2010 Plan [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Shares of common stock reserved | 280,459 | |||||||||||
Expected term | 10 years | |||||||||||
Vesting term | 4 years | |||||||||||
Restated 2010 Plan [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Shares of common stock reserved | 1,162,500 | 1,550,351 | 756,524 | |||||||||
Percent of additional shares authorized provision | 4.00% | |||||||||||
Inducement Plan [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Shares of common stock reserved | 118,325 | 102,276 | 637,500 | 337,500 | ||||||||
Maximum amount deductible | $ | $ 1,000,000 | |||||||||||
Employee Stock Purchase Plan [Member] | Employee Stock [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Shares of common stock reserved | 15,243 | 16,672 | ||||||||||
Duration of each offering period under the ESPP | 12 months | |||||||||||
Number of purchase periods permitted under the ESPP | purchase_period | 2 | |||||||||||
Duration of each purchase period under the ESPP | 6 months | |||||||||||
Number of offering periods permitted under the ESPP | offering_period | 2 | |||||||||||
Percentage of purchase price | 85.00% | |||||||||||
Maximum percentage of employee withholding | 20.00% | |||||||||||
Maximum number of shares per employee | 2,500 | |||||||||||
Common stock reserved for future issuance (shares) | 15,243 | 16,672 | ||||||||||
Number of shares purchased during period (shares) | 32,679 | 35,934 | 35,164 | |||||||||
Non-employee Director [Member] | Shares subject to outstanding common stock options | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Shares of common stock reserved | 20,000 | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized | 15,000 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Stock-Based Compensation Activity (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Outstanding beginning balance (in shares) | shares | 3,392 |
Granted (in shares) | shares | 889 |
Exercised (in shares) | shares | (434) |
Canceled/Forfeited (in shares) | shares | (103) |
Outstanding ending balance (in shares) | shares | 3,744 |
Exercisable at end of period (in shares) | shares | 2,415 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | |
Outstanding weighted average exercise price, beginning balance (in usd per share) | $ / shares | $ 14.41 |
Granted weighted average exercise price (in usd per share) | $ / shares | 43.19 |
Exercised weighted average exercise price (in usd per share) | $ / shares | 16.84 |
Canceled/Forfeited weighted average exercise price (in usd per share) | $ / shares | 24.16 |
Outstanding weighted average exercise price, ending balance (in usd per share) | $ / shares | 20.69 |
Exercisable weighted average exercise price at end of period (in usd per share) | $ / shares | $ 16.66 |
Outstanding, weighted average remaining term at end of period | 6 years 10 months 24 days |
Exercisable, weighted average remaining term at end of period | 6 years |
Outstanding, intrinsic value at end of period | $ | $ 64,906 |
Exercisable, intrinsic value at end of period | $ | $ 48,735 |
Stock-Based Compensation - Sc_2
Stock-Based Compensation - Schedule of Restricted Stock Unit Activity (Details) - Shares subject to outstanding restricted stock units - $ / shares | 1 Months Ended | 12 Months Ended | ||
Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||||
Number of restricted stock units, beginning balance (in shares) | 259,000 | |||
Number of restricted stock units granted (in shares) | 154,000 | 146,000 | ||
Restricted stock units vested (in shares) | (98,000) | 0 | 0 | |
Restricted stock units forfeited (in shares) | (18,000) | |||
Number of restricted stock units, ending balance (in shares) | 289,000 | 259,000 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | ||||
Weighted-average grant date fair value per share, beginning balance (in usd per share) | $ 10.43 | |||
Weighted-average grant date fair value per share, granted (in usd per share) | 42.76 | |||
Weighted-average grant date fair value per share, vested (in usd per share) | 10.74 | |||
Weighted-average grant date fair value per share, canceled (in usd per share) | 27.89 | |||
Weighted-average grant date fair value per share, ending balance (in usd per share) | $ 25.56 | $ 10.43 |
Stock-Based Compensation - Assu
Stock-Based Compensation - Assumptions used in Black-Scholes Option-Pricing Model (Detail) - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Shares subject to outstanding common stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Exercise price (in usd per share) | $ 13.32 | ||
Share price (in usd per share) | $ 49.60 | ||
Risk free interest rate, minimum (percent) | 2.30% | 1.80% | 1.10% |
Risk free interest rate, maximum (percent) | 3.00% | 2.30% | 2.10% |
Expected term | 3 years 6 months | ||
Expected volatility | 79.90% | ||
Expected volatility, minimum (percent) | 80.10% | 75.10% | 76.50% |
Expected volatility, maximum (percent) | 85.20% | 85.80% | 78.10% |
Expected dividend yield (percent) | 0.00% | 0.00% | 0.00% |
Shares subject to outstanding common stock options | Minimum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term | 5 years 3 months 18 days | 5 years 1 month 6 days | 5 years 1 month 6 days |
Shares subject to outstanding common stock options | Maximum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term | 6 years 1 month 6 days | 6 years 1 month 6 days | 6 years 1 month 6 days |
Employee Stock [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk free interest rate, minimum (percent) | 2.10% | 1.10% | 0.50% |
Risk free interest rate, maximum (percent) | 2.70% | 1.60% | 0.80% |
Expected volatility, minimum (percent) | 44.70% | 54.80% | 59.50% |
Expected volatility, maximum (percent) | 113.10% | 152.80% | 71.30% |
Expected dividend yield (percent) | 0.00% | 0.00% | 0.00% |
Employee Stock [Member] | Minimum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term | 6 months | 6 months | 6 months |
Employee Stock [Member] | Maximum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term | 1 year | 1 year | 1 year |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock-Based Compensation Expense (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense | $ 15,492 | $ 6,155 | $ 7,353 |
Cost of Contract Manufacturing [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense | 0 | 71 | 386 |
Research and Development Expense [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense | 6,317 | 1,933 | 1,924 |
Selling, General and Administrative [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense | $ 9,175 | $ 4,151 | $ 5,043 |
Employee Benefit Plan (Details)
Employee Benefit Plan (Details) - USD ($) $ in Millions | Feb. 02, 2007 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Postemployment Benefits [Abstract] | ||||
Postemployment benefit, minimum attained age | 21 years | |||
Employer's discretionary matching contributions | $ 0.2 | $ 0.2 | $ 0.1 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) | 12 Months Ended | 149 Months Ended | ||||
Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2018USD ($)ownership_change | Dec. 31, 2011USD ($) | Aug. 31, 2006USD ($) | |
Operating Loss Carryforwards [Line Items] | ||||||
Penalties and interest expense | $ 0 | $ 0 | $ 0 | |||
Penalties and interest accrued | 0 | 0 | $ 0 | |||
Number of changes in ownership | ownership_change | 3 | |||||
Reduction in deferred tax asset and corresponding decrease in valuation allowance | 36,100,000 | |||||
Less valuation allowance | 118,064,000 | 101,114,000 | $ 118,064,000 | |||
Income tax expense (benefits) | 0 | $ 0 | $ (948,000) | |||
Internal Revenue Service (IRS) [Member] | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Net operating losses | 286,300,000 | 286,300,000 | ||||
Tax credit carryforward, amount | 3,400,000 | 3,400,000 | ||||
Operating loss carryforwards decrease | $ 121,100,000 | $ 1,900,000 | ||||
Tax credit carryforwards, decrease | 3,000,000 | $ 8,000 | ||||
State and Local Jurisdiction [Member] | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Tax credit carryforward, amount | 4,100,000 | 4,100,000 | ||||
Operating loss carryforwards decrease | $ 53,300,000 | |||||
State and Local Jurisdiction [Member] | California [Member] | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Net operating losses | 190,300,000 | 190,300,000 | ||||
Foreign Tax Authority [Member] | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Net operating losses | $ 191,800,000 | $ 191,800,000 |
Income Taxes - Schedule of Dome
Income Taxes - Schedule of Domestic and Foreign Components of Loss before Tax Provision (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
United States | $ (35,838) | $ (32,112) | $ (24,285) |
Foreign | (87,878) | (93,910) | (45,349) |
Total | $ (123,716) | $ (126,022) | $ (69,634) |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Income Tax to Expense (Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Income tax at federal statutory rate | $ (26,022) | $ (42,846) | $ (23,675) |
State taxes, net of federal benefit | (8) | (19) | (65) |
Change in valuation allowance | 16,949 | (11,208) | 16,024 |
U.S. statutory tax rate change | 0 | 36,085 | 0 |
Permanent interest disallowed | (35) | (150) | (1,832) |
Foreign rate change - Impact on Deferred Taxes | 1,961 | 1,619 | 521 |
Other permanent differences | (666) | 8,236 | 630 |
Research and development tax credits | (51) | (274) | (145) |
State tax rate benefit | 169 | 56 | 578 |
Foreign rate differential | 1,731 | 10,636 | 6,122 |
Stock-based compensation | (1,344) | (2,462) | 1,132 |
Net operating losses surrendered under UK's R&D tax relief scheme | (6,322) | 0 | 0 |
Credits and other | 994 | 327 | (238) |
Income tax benefit | $ 0 | $ 0 | $ (948) |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Income Tax Disclosure [Abstract] | ||
Net operating losses | $ 103,187 | $ 87,142 |
Capitalized research and development | 1,537 | 2,155 |
Accrued expenses | 1,300 | 1,310 |
Research and development credits | 5,343 | 5,282 |
Amortization | 528 | 630 |
Depreciation | 0 | 163 |
Deferred Tax Assets, Stock-based Compensation | 5,868 | 4,334 |
Other, net | 775 | 98 |
Total deferred tax assets | 118,538 | 101,114 |
Less valuation allowance | (118,064) | (101,114) |
Net deferred tax assets | 474 | 0 |
IPR&D | (17,425) | (17,425) |
Depreciation | (474) | 0 |
Total deferred tax liabilities | (17,899) | (17,425) |
Net deferred tax liability | $ (17,425) | $ (17,425) |
Income Taxes - Schedule of Unre
Income Taxes - Schedule of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Beginning balance of unrecognized tax benefits | $ 2,030 | $ 1,248 | $ 1,132 |
Gross increases based on tax positions related to current year | 0 | 633 | 116 |
Gross decreases based on tax positions related to prior years | (634) | 0 | 0 |
Gross increases based on tax positions related to prior year | 91 | 149 | 0 |
Settlements with taxing authorities | 0 | 0 | 0 |
Expiration of statue of limitations | 0 | 0 | 0 |
Ending balance of unrecognized tax benefits | $ 1,487 | $ 2,030 | $ 1,248 |
UK's R&D Tax Relief Scheme (Det
UK's R&D Tax Relief Scheme (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Jul. 31, 2018 |
Other Income and Expenses [Abstract] | ||
Former Gain Contingency, Recognized in Current Period | $ 10,100 | $ 3,000 |
Income Taxes Receivable | $ 7,100 |
Selected Quarterly Financial _3
Selected Quarterly Financial Information (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenue | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 7,125 | $ 2,696 | |||
Loss from continuing operations | (22,433) | (42,264) | (28,839) | (30,180) | (39,783) | (42,660) | (22,453) | (21,126) | $ (123,716) | $ (126,022) | $ (69,634) |
(Loss) income from discontinued operations | 0 | 0 | (198) | 0 | 75 | (134) | (555) | (181) | (198) | (795) | (1,021) |
Net loss | $ (22,433) | $ (42,264) | $ (29,037) | $ (30,180) | $ (39,708) | $ (42,794) | $ (23,008) | $ (21,307) | $ (123,914) | $ (126,817) | $ (69,707) |
Net loss per share, basic and diluted (in dollars per share) | $ (0.53) | $ (1.08) | $ (0.83) | $ (0.87) | $ (1.17) | $ (1.68) | $ (0.93) | $ (0.86) | $ (3.27) | $ (4.65) | $ (2.81) |