Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2019 | Oct. 31, 2019 | |
Cover page. | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2019 | |
Document Transition Report | false | |
Entity File Number | 001-34962 | |
Entity Registrant Name | ZOGENIX, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 20-5300780 | |
Entity Address, Address Line One | 5959 Horton Street | |
Entity Address, Address Line Two | Suite 500 | |
Entity Address, City or Town | Emeryville | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 94608 | |
City Area Code | 510 | |
Local Phone Number | 550-8300 | |
Title of 12(b) Security | Common Stock, par value $0.001 per share | |
Trading Symbol | ZGNX | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 44,254,761 | |
Entity Central Index Key | 0001375151 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --12-31 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 33,099 | $ 68,454 |
Marketable securities | 221,865 | 445,733 |
Prepaid expenses | 9,108 | 6,718 |
Acquisition holdback amount placed in escrow | 25,000 | 0 |
Other current assets | 3,202 | 11,825 |
Total current assets | 292,274 | 532,730 |
Property and equipment, net | 9,782 | 2,870 |
Operating lease right-of-use assets | 8,134 | |
Intangible assets | 102,500 | 102,500 |
Goodwill | 6,234 | 6,234 |
Other noncurrent assets | 1,442 | 3,997 |
Total assets | 420,366 | 648,331 |
Current liabilities: | ||
Accounts payable | 7,553 | 7,989 |
Accrued and other current liabilities | 23,125 | 18,086 |
Acquisition holdback liability | 24,444 | 0 |
Deferred revenue, noncurrent | 5,688 | 0 |
Current portion of operating lease liabilities | 1,431 | |
Current portion of contingent consideration | 35,200 | 32,300 |
Total current liabilities | 97,441 | 58,375 |
Deferred revenue, noncurrent | 8,113 | 0 |
Operating lease liabilities, net of current portion | 11,095 | |
Contingent consideration, net of current portion | 35,700 | 45,900 |
Deferred income taxes | 17,425 | 17,425 |
Other long-term liabilities | 0 | 3,830 |
Total liabilities | 169,774 | 125,530 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Preferred stock, $0.001 par value; 10,000 shares authorized; none issued and outstanding | 0 | 0 |
Common stock, $0.001 par value; 100,000 and 50,000 shares authorized and 44,251 and 42,078 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively | 44 | 42 |
Additional paid-in capital | 1,309,523 | 1,218,710 |
Accumulated deficit | (1,059,397) | (695,954) |
Accumulated other comprehensive income | 422 | 3 |
Total stockholders’ equity | 250,592 | 522,801 |
Total liabilities and stockholders’ equity | $ 420,366 | $ 648,331 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Preferred stock par value (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 (usd per share) | $ 0.001 | $ 0.001 |
Common stock authorized (shares) | 100,000,000 | 50,000,000 |
Common stock issued (shares) | 44,251,000 | 42,078,000 |
Common stock outstanding (shares) | 44,251,000 | 42,078,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | ||||
Collaboration revenue | $ 630 | $ 0 | $ 1,699 | $ 0 |
Operating expenses: | ||||
Research and development | 28,372 | 27,608 | 79,820 | 77,329 |
Selling, general and administrative | 15,762 | 11,016 | 42,139 | 27,663 |
Acquired in-process research and development and related costs | 249,437 | 0 | 249,437 | 0 |
Change in fair value of contingent purchase consideration | 400 | 5,700 | 2,700 | 3,200 |
Total operating expenses | 293,971 | 44,324 | 374,096 | 108,192 |
Loss from operations | (293,341) | (44,324) | (372,397) | (108,192) |
Other income (expense): | ||||
Interest income | 2,382 | 2,133 | 8,521 | 3,995 |
Other income (expense) | 481 | (73) | 433 | 2,914 |
Total other income (expense) | 2,863 | 2,060 | 8,954 | 6,909 |
Net loss from continuing operations | (290,478) | (42,264) | (363,443) | (101,283) |
Loss from discontinued operations, net of taxes | 0 | 0 | 0 | (198) |
Net loss | $ (290,478) | $ (42,264) | $ (363,443) | $ (101,481) |
Net loss per share, basic and diluted: | ||||
Continuing operations (in dollars per share) | $ (6.75) | $ (1.08) | $ (8.54) | $ (2.78) |
Discontinued operations (in dollars per share) | 0 | 0 | 0 | 0 |
Net loss per share, basic and diluted (in dollars per share) | $ (6.75) | $ (1.08) | $ (8.54) | $ (2.78) |
Weighted average common shares used in the calculation of basic and diluted net loss per common share (shares) | 43,029 | 39,242 | 42,577 | 36,485 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (290,478) | $ (42,264) | $ (363,443) | $ (101,481) |
Other comprehensive income (loss): | ||||
Unrealized gains (losses) arising during period | 18 | (46) | 741 | (46) |
Reclassification adjustments for realization of gain on sale of marketable securities included in net loss | (322) | 0 | (322) | 0 |
Total other comprehensive (loss) income | (304) | (46) | 419 | (46) |
Comprehensive loss | $ (290,782) | $ (42,310) | $ (363,024) | $ (101,527) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income | Accumulated Deficit |
Stockholders' Equity Beginning Balance at Dec. 31, 2017 | $ 301,521 | $ 35 | $ 873,526 | $ 0 | $ (572,040) |
Stockholders' Equity - Beginning Balance (shares) at Dec. 31, 2017 | 34,808 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (30,180) | (30,180) | |||
Issuance of common stock under employee equity plans | 1,930 | 1,930 | |||
Issuance of common stock under employee equity plans (shares) | 198 | ||||
Shares repurchased for tax withholdings related to net share settlement of employee equity awards | (1,411) | (1,411) | |||
Shares repurchased for tax withholdings related to net share settlement of employee equity awards (shares) | (33) | ||||
Stock-based compensation | 1,912 | 1,912 | |||
Stockholders' Equity Ending Balance at Mar. 31, 2018 | 273,772 | $ 35 | 875,957 | 0 | (602,220) |
Stockholders' Equity - Ending Balance (shares) at Mar. 31, 2018 | 34,973 | ||||
Stockholders' Equity Beginning Balance at Dec. 31, 2017 | 301,521 | $ 35 | 873,526 | 0 | (572,040) |
Stockholders' Equity - Beginning Balance (shares) at Dec. 31, 2017 | 34,808 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (101,481) | ||||
Stockholders' Equity Ending Balance at Sep. 30, 2018 | 538,780 | $ 42 | 1,212,305 | (46) | (673,521) |
Stockholders' Equity - Ending Balance (shares) at Sep. 30, 2018 | 41,925 | ||||
Stockholders' Equity Beginning Balance at Mar. 31, 2018 | 273,772 | $ 35 | 875,957 | 0 | (602,220) |
Stockholders' Equity - Beginning Balance (shares) at Mar. 31, 2018 | 34,973 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (29,037) | (29,037) | |||
Issuance of common stock, net of offering costs | 30,252 | $ 1 | 30,251 | ||
Issuance of common stock, net of offering costs (shares) | 740 | ||||
Issuance of common stock under employee equity plans | 1,838 | 1,838 | |||
Issuance of common stock under employee equity plans (shares) | 114 | ||||
Shares repurchased for tax withholdings related to net share settlement of employee equity awards | (18) | (18) | |||
Shares repurchased for tax withholdings related to net share settlement of employee equity awards (shares) | 0 | ||||
Stock-based compensation | 3,059 | 3,059 | |||
Stockholders' Equity Ending Balance at Jun. 30, 2018 | 279,866 | $ 36 | 911,087 | 0 | (631,257) |
Stockholders' Equity - Ending Balance (shares) at Jun. 30, 2018 | 35,827 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (42,264) | (42,264) | |||
Other comprehensive income (loss) | (46) | (46) | |||
Issuance of common stock, net of offering costs | 292,886 | $ 6 | 292,880 | ||
Issuance of common stock, net of offering costs (shares) | 6,000 | ||||
Issuance of common stock under employee equity plans | 1,357 | 1,357 | |||
Issuance of common stock under employee equity plans (shares) | 98 | ||||
Stock-based compensation | 6,981 | 6,981 | |||
Stockholders' Equity Ending Balance at Sep. 30, 2018 | 538,780 | $ 42 | 1,212,305 | (46) | (673,521) |
Stockholders' Equity - Ending Balance (shares) at Sep. 30, 2018 | 41,925 | ||||
Stockholders' Equity Beginning Balance at Dec. 31, 2018 | 522,801 | $ 42 | 1,218,710 | 3 | (695,954) |
Stockholders' Equity - Beginning Balance (shares) at Dec. 31, 2018 | 42,078 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (35,202) | (35,202) | |||
Other comprehensive income (loss) | 370 | 370 | |||
Issuance of common stock under employee equity plans | 5,293 | 5,293 | |||
Issuance of common stock under employee equity plans (shares) | 380 | ||||
Shares repurchased for tax withholdings related to net share settlement of employee equity awards | (606) | (606) | |||
Shares repurchased for tax withholdings related to net share settlement of employee equity awards (shares) | (12) | ||||
Stock-based compensation | 4,223 | 4,223 | |||
Stockholders' Equity Ending Balance at Mar. 31, 2019 | 496,879 | $ 42 | 1,227,620 | 373 | (731,156) |
Stockholders' Equity - Ending Balance (shares) at Mar. 31, 2019 | 42,446 | ||||
Stockholders' Equity Beginning Balance at Dec. 31, 2018 | 522,801 | $ 42 | 1,218,710 | 3 | (695,954) |
Stockholders' Equity - Beginning Balance (shares) at Dec. 31, 2018 | 42,078 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (363,443) | ||||
Stockholders' Equity Ending Balance at Sep. 30, 2019 | 250,592 | $ 44 | 1,309,523 | 422 | (1,059,397) |
Stockholders' Equity - Ending Balance (shares) at Sep. 30, 2019 | 44,251 | ||||
Stockholders' Equity Beginning Balance at Mar. 31, 2019 | 496,879 | $ 42 | 1,227,620 | 373 | (731,156) |
Stockholders' Equity - Beginning Balance (shares) at Mar. 31, 2019 | 42,446 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (37,763) | (37,763) | |||
Other comprehensive income (loss) | 353 | 353 | |||
Issuance of common stock under employee equity plans | 888 | 888 | |||
Issuance of common stock under employee equity plans (shares) | 52 | ||||
Stock-based compensation | 5,358 | 5,358 | |||
Stockholders' Equity Ending Balance at Jun. 30, 2019 | 465,715 | $ 42 | 1,233,866 | 726 | (768,919) |
Stockholders' Equity - Ending Balance (shares) at Jun. 30, 2019 | 42,498 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (290,478) | (290,478) | |||
Other comprehensive income (loss) | (304) | (304) | |||
Issuance of common stock as consideration for asset acquisition | 68,124 | $ 2 | 68,122 | ||
Issuance of common stock as consideration for asset acquisition (shares) | 1,595 | ||||
Issuance of common stock under employee equity plans | 2,238 | 2,238 | |||
Issuance of common stock under employee equity plans (shares) | 163 | ||||
Shares repurchased for tax withholdings related to net share settlement of employee equity awards | (138) | (138) | |||
Shares repurchased for tax withholdings related to net share settlement of employee equity awards (shares) | (5) | ||||
Stock-based compensation | 5,435 | 5,435 | |||
Stockholders' Equity Ending Balance at Sep. 30, 2019 | $ 250,592 | $ 44 | $ 1,309,523 | $ 422 | $ (1,059,397) |
Stockholders' Equity - Ending Balance (shares) at Sep. 30, 2019 | 44,251 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash flow from operating activities: | ||
Net loss | $ (363,443,000) | $ (101,481,000) |
Adjustments to reconcile net loss from continuing operations to net cash used in operating activities: | ||
Stock-based compensation | 15,016,000 | 11,952,000 |
Depreciation and amortization | 910,000 | 76,000 |
Net accretion and amortization of investments in marketable securities | (4,495,000) | (521,000) |
Realized gain on sale of available-for-sale marketable securities | (322,000) | 0 |
Change in fair value of warrant liabilities | (241,000) | 95,000 |
Acquired in-process research and development and related costs | 249,437,000 | 0 |
Change in fair value of contingent purchase consideration | 2,700,000 | 3,200,000 |
Changes in operating assets and liabilities: | ||
Prepaid expenses, escrow holdback and other current assets | (18,056,000) | 1,429,000 |
Other assets | (5,225,000) | 551,000 |
Accounts payable, accrued and other liabilities | 20,863,000 | 1,463,000 |
Operating lease liability | 12,172,000 | |
Deferred revenue | 13,801,000 | 0 |
Net cash used in operating activities | (76,883,000) | (83,236,000) |
Cash flows from investing activities: | ||
Cash paid for asset acquisition, net of cash acquired | (175,732,000) | 0 |
Purchases of marketable securities | (308,202,000) | (375,612,000) |
Proceeds from maturities of marketable securities | 364,345,000 | 0 |
Proceeds from sales of marketable securities | 172,960,000 | 0 |
Purchases of property and equipment | (9,584,000) | (75,000) |
Net cash provided by (used in) investing activities | 43,787,000 | (375,687,000) |
Cash flows from financing activities: | ||
Payment of contingent consideration | (10,000,000) | 0 |
Proceeds from issuance of common stock under equity incentive plans | 8,399,000 | 6,749,000 |
Taxes paid related to net share settlement of equity awards | (658,000) | (1,426,000) |
Proceeds from issuance of common stock, net of issuance costs | 0 | 323,135,000 |
Net cash (used in) provided by financing activities | (2,259,000) | 328,458,000 |
Net decrease in cash and cash equivalents | (35,355,000) | (130,465,000) |
Cash and cash equivalents, beginning of the period | 68,454,000 | 293,503,000 |
Cash and cash equivalents, end of the period | 33,099,000 | 163,038,000 |
Noncash investing activities: | ||
Common stock issued as consideration for asset acquisition | 68,124,000 | 0 |
Net liabilities assumed in connection with asset acquisition | 3,688,000 | 0 |
Unpaid transaction costs related to asset acquisition | $ 2,449,000 | $ 0 |
Organization and Basis of Prese
Organization and Basis of Presentation | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | Organization and Basis of Presentation Zogenix, Inc. and subsidiaries (the Company, we, us or our) is a global pharmaceutical company committed to developing and commercializing transformative therapies to improve the lives of patients and their families living with rare diseases. We are currently focused on developing and commercializing therapies to address rare or orphan disorders. Our lead product candidate, Fintepla (ZX008, fenfluramine) is currently being developed for the treatment of seizures associated with Dravet syndrome and Lennox-Gastaut syndrome (LGS). In September 2019, we acquired all of the outstanding equity interests in Modis Therapeutics, Inc. (Modis), a privately-held biopharmaceutical company. Modis’ lead product, MT1621, is an investigational deoxynucleoside substrate enhancement therapy in development for the treatment of thymidine kinase 2 deficiency (TK2d), an inherited mitochondrial DNA depletion disorder that predominantly affects children and is often fatal. See Note 3 for additional information. We operate in one business segment—the research, development and commercialization of pharmaceutical products and our headquarters are located in Emeryville, California. Basis of Presentation The accompanying condensed consolidated financial statements include the accounts of Zogenix, Inc. and its wholly-owned subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation. The condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) for interim financial reporting. In the opinion of management, the condensed consolidated financial statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation. The results of operations for any interim period are not necessarily indicative of results of operations for any future period. Certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with generally accepted accounting principles in the United States (GAAP) have been condensed or omitted. Accordingly, these unaudited interim condensed consolidated financial statements and accompanying notes should be read in conjunction with the consolidated financial statements and related notes included in our 2018 Annual Report on Form 10-K, which was filed with the SEC on February 28, 2019. Certain prior period amounts within the accompanying unaudited condensed consolidated financial statements have been reclassified to conform to current period presentation. These reclassifications did not affect our financial position, net loss, comprehensive loss, or cash flows as of and for the periods presented. Our accompanying condensed consolidated financial statements include the assets acquired and liabilities assumed in connection with the acquisition of Modis, in addition to the operating results and cash flows, beginning with the date of the acquisition. Future Funding Requirements Excluding gains from two discrete business divestitures, we have incurred significant net losses and negative cash flows from operating activities since inception resulting in an accumulated deficit of $1.1 billion as of September 30, 2019. We expect to continue to incur significant operating losses and negative cash flows from operations as we continue to advance our product candidates through development and commercialization. Additionally, pursuant to our acquisition of Brabant Pharma Limited (Brabant) in 2014 to obtain worldwide development and commercialization rights to Fintepla, we are required to make additional payments to the former shareholders of Brabant in the event we achieve certain regulatory and sales milestones with Fintepla (See Note 6). Pursuant to our asset acquisition of Modis in September 2019, we are required to make additional payments to the former shareholders of Modis in the event we achieve certain regulatory milestones (See Note 3). Historically, we have relied primarily on the proceeds from equity offerings to finance our operations. Until such time, if ever, we can generate a sufficient amount of revenue to finance our cash requirements, we may need to continue to rely on additional financing to achieve our business objectives. However, if such financing is not available at adequate levels when needed, we may be required to significantly delay, scale back or discontinue one or more of our product development programs or commercialization efforts or other aspects of our business plans, and our operating results and financial condition would be adversely affected. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results may differ from those estimates. Significant Accounting Policies Our other significant accounting policies are described in Note 2 of Notes to Consolidated Financial Statements included in our 2018 Annual Report on Form 10-K. As a result of material transactions entered into during the nine months ended September 30, 2019 and the adoption of the new lease accounting standard, we have updated our significant accounting policies disclosures herein. There were no other changes to our significant accounting policies from those disclosed in our 2018 Annual Report on Form 10-K. Revenue Recognition We analyze our collaboration arrangements to assess whether such arrangements, or transactions between arrangement participants, involve joint operating activities performed by parties that are both active participants in the activities and exposed to significant risks and rewards dependent on the commercial success of such activities or are more akin to a vendor-customer relationship. In making this evaluation, we consider whether the activities of the collaboration are considered to be distinct and deemed to be within the scope of the collaborative arrangement guidance and those that are more reflective of a vendor-customer relationship and, therefore, within the scope of the revenue with contracts with customers guidance. This assessment is performed throughout the life of the arrangement based on changes in the responsibilities of all parties in the arrangement. For elements of collaboration arrangements that are not accounted for pursuant to the revenue from contracts with customers guidance, an appropriate recognition method is determined and applied consistently, generally by analogy to the revenue from contracts with customers guidance. Amounts related to transactions with a counterparty in a collaborative arrangement that is not a customer are presented as collaboration revenue and on a separate line item from revenue recognized from contracts with customers, if any, in our condensed consolidated statements of operations. Amounts received prior to satisfying the revenue recognition criteria are recorded as deferred revenue in the condensed consolidated balance sheets. If the related efforts underlying the deferred revenue is expected to be satisfied within the next twelve months this will be classified in current liabilities. Unconditional rights to receive consideration in advance of performance are recorded as receivables and deferred revenue in the condensed consolidated balance sheets when we have a contractual right to bill and receive the payment, performance is expected to commence shortly and there is less than a year between billing and performance. Amounts recognized for satisfied performance obligations prior to the right to payment becoming unconditional are recorded as contract assets in the condensed consolidated balance sheets. If we expect to have an unconditional right to receive consideration in the next twelve months, this will be classified in current assets. A net contract asset or liability is presented for each contract with a customer. For arrangements or transactions between arrangement participants determined to be within the scope of the contracts with customers guidance, we perform the following steps to determine the appropriate amount of revenue to be recognized as we fulfill our obligations: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations based on estimated selling prices; and (v) recognition of revenue when (or as) we satisfy each performance obligation. At contract inception, we assess the goods or services promised in a contract with a customer and identify those distinct goods and services that represent a performance obligation. A promised good or service may not be identified as a performance obligation if it is immaterial in the context of the contract with the customer, if it is not separately identifiable from other promises in the contract (either because it is not capable of being separated or because it is not separable in the context of the contract), or if the performance obligation does not provide the customer with a material right. We consider the terms of the contract and our customary business practices to determine the transaction price. The transaction price is the amount of consideration to which we expect to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. Variable consideration will only be included in the transaction price when it is not considered constrained, which is when it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur. If it is determined that multiple performance obligations exist, the transaction price is allocated at the inception of the agreement to all identified performance obligations based on the relative stand-alone selling prices unless the transaction price is variable and meets the criteria to be allocated entirely to one or more, but not all, performance obligations in the contract. The relative selling price for each performance obligation is based on observable prices if it is available. If observable prices are not available, we estimate stand-alone selling price for the performance obligation utilizing the estimated cost of the performance obligation with an estimated assumed margin. Once the transaction price has been allocated to a performance obligation using the applicable methodology, it is not subject to reassessment for subsequent changes in stand-alone selling prices. Revenue is recognized when, or as, we satisfy a performance obligation by transferring a promised good or service to a customer. An asset is transferred when, or as, the customer obtains control of that asset. For performance obligations that are satisfied over time, we recognize revenue using an input or output measure of progress that best depicts our satisfaction of the relevant performance obligation. Revenues from performance obligations associated with a purchase order of Fintepla will be recognized when the customer obtains control of our product, which will occur at a point in time which may be upon shipment or delivery to the customer. After contract inception, the transaction price is reassessed at every period end and updated for changes such as resolution of uncertain events. Any change in the overall transaction price is allocated to the performance obligations on the same methodology as at contract inception. Management may be required to exercise judgment in estimating revenue to be recognized. Judgment is required in identifying performance obligations, estimating the transaction price, estimating the stand-alone selling prices of identified performance obligations, which may include forecasted revenue, development timelines, reimbursement rates for personnel costs, discount rates and probabilities of technical and regulatory success, and estimating the progress towards satisfaction of performance obligations. Acquisitions We evaluate acquisitions of assets and other similar transactions to assess whether or not the transaction should be accounted for as a business combination or asset acquisition by first applying a screen test to determine if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. If the screen is met, the transaction is accounted for as an asset acquisition. If the screen is not met, further determination is required as to whether or not we have acquired inputs and processes that have the ability to create outputs which would meet the definition of a business. Significant judgment is required in the application of the screen test to determine whether an acquisition is a business combination or an acquisition of assets. For asset acquisitions, a cost accumulation model is used to determine the cost of an asset acquisition. Common stock issued as consideration in an asset acquisition is generally measured based on the acquisition date fair value of the equity interests issued . Direct transaction costs are recognized as part of the cost of an asset acquisition. We also evaluate which elements of a transaction should be accounted for as a part of an asset acquisition and which should be accounted for separately. Consideration deposited into escrow accounts are evaluated to determine whether it should be included as part of the cost of an asset acquisition or accounted for as contingent consideration. Amounts held in escrow where we have legal title to such balances but where such accounts are not held in our name, are recorded on a gross basis as an asset with a corresponding liability in our condensed consolidated balance sheet. The cost of an asset acquisition, including transaction costs, are allocated to identifiable assets acquired and liabilities assumed based on a relative fair value basis. Goodwill is not recognized in an asset acquisition. Any difference between the cost of an asset acquisition and the fair value of the net assets acquired is allocated to the non-monetary identifiable assets based on their relative fair values. Assets acquired as part of an asset acquisition that are considered to be in-process research and development (IPR&D) are immediately expensed unless there is an alternative future use in other research and development projects . In addition to upfront consideration, our asset acquisitions may also include contingent consideration payments to be made for future milestone events or royalties on net sales of future products. We assess whether such contingent consideration meets the definition of a derivative. Contingent consideration payments in an asset acquisition not required to be accounted for as derivatives are recognized when the contingency is resolved, and the consideration is paid or becomes payable. Contingent consideration payments required to be accounted for as derivatives are recorded at fair value on the date of the acquisition and are subsequently remeasured to fair value at each reporting date . Contingent consideration payments made prior to regulatory approval are expensed as incurred. Contingent consideration payments made subsequent to regulatory approval are capitalized as intangible assets and amortized, subject to impairment assessments. Recently Adopted Accounting Pronouncements Accounting Standards Update (ASU) 2018-18, Collaborative Arrangements: Clarifying the Interaction between Topic 808 and Topic 606 (ASU 2018-18) makes targeted improvements for collaborative arrangements by (1) clarifying that certain transactions between collaborative arrangement participants should be accounted for as revenue under the contract with customer guidance (Topic 606) when the collaborative arrangement participant is a customer, (2) adding unit of account guidance to assess whether the collaborative arrangement, or a part of the arrangement, is with a customer and (3) precluding a company from presenting transactions with collaborative arrangement participants that are not directly related to sales to third parties together with revenue from contracts with customers. Entities must apply the guidance retrospectively as of the date of their initial application of Topic 606 and should recognize the cumulative effect of initially applying the amendments as an adjustment to opening retained earnings as of the later of (1) the earliest annual period presented and (2) the annual period that includes the date of the entity’s initial application of Topic 606. ASU 2018-18 is effective for fiscal years beginning after December 15, 2019, including interim periods therein. Early adoption is permitted. We elected to early adopt this standard effective January 1, 2019 and have applied its guidance to our arrangement entered into in March 2019 with Nippon Shinyaku Co., Ltd. (See Note 4). No retrospective adjustment to our condensed consolidated financial statements was required as a result of our application of these amendments. In August 2018, the SEC adopted the final rule under SEC Release No. 33-10532, Disclosure Update and Simplification, amending certain disclosure requirements that were redundant, duplicative, overlapping, outdated or superseded. Additionally, the amendments expanded the disclosure requirements on the analysis of stockholders’ equity for interim financial statements. Under the amendments, a summary of changes in each caption of stockholders’ equity presented in the consolidated balance sheets must be provided in a note or separate statement, and we have provided this disclosure beginning with the first quarter of 2019. Leases In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) . Topic 842 establishes a right-of-use asset 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. We adopted Topic 842 effective January 1, 2019 using the modified retrospective approach and elected the package of practical expedients permitted under transition guidance. Consequently, prior period financial information and related disclosures have not been adjusted and will continue to be presented in accordance with the previous lease standard. In addition, we elected the package of transition provisions available for existing contracts, which allowed us to carryforward our historical assessments of (1) whether contracts are or contain leases, (2) lease classification and (3) initial direct lease costs for existing leases. We did not elect the practical expedient allowing the use-of-hindsight which would require us to reassess the lease term of our leases based on all facts and circumstances through the effective date and did not elect the practical expedient pertaining to land easements as this is not applicable to the current contract portfolio. The adoption of Topic 842 did not have a material impact on our condensed consolidated statements of operations and cash flows. The impact on the accompanying condensed consolidated balance sheet as of January 1, 2019 was as follows (in thousands): December 31, 2018 Adjustments Due to the January 1, 2019 Assets Operating lease right-of-use assets $ — $ 8,641 $ 8,641 Liabilities Other accrued liabilities $ 1,845 $ (363) $ 1,482 Current portion of operating lease liabilities — 1,058 1,058 Operating lease liabilities, net of current portion — 11,776 11,776 Other long-term liabilities 3,830 (3,830) — Total $ 5,675 $ 8,641 $ 14,316 Upon adoption on January 1, 2019, we recorded operating lease ROU assets and lease liabilities of $8.6 million and $12.8 million, respectively, with the difference between ROU assets and lease liabilities attributed to the reclassifications of deferred rent and lease incentive obligations, a cease-use liability and initial direct leasing costs as a component of ROU assets. Prior to January 1, 2019, we recognized related rent expense on a straight-line basis over the term of the lease. Incentives granted under our operating lease, including allowances for leasehold improvements and rent holidays, were recognized as reductions to rent expense on a straight-line basis over the term of the lease. Deferred rent consisted of the difference between rent expense recognized on a straight-line basis and cash rent payments. Subsequent to the adoption of Accounting Standards Update (ASU) 2016-02 and related amendments (collectively, Topic 842) on January 1, 2019, we determine whether the arrangement is or contains a lease at the inception of the arrangement and if such a lease is classified as a financing lease or operating lease at lease commencement. All of our leases are classified as operating leases. Leases with a term greater than one year are included in operating lease right-of-use assets (ROU asset), current portion of lease liabilities, and lease liabilities, net of current portion in our condensed consolidated balance sheet at September 30, 2019. If a lease contains an option to renew, the renewal option is included in the calculation of lease liabilities if we are reasonably certain at lease commencement the renewal option will be exercised. Lease liabilities and their corresponding ROU assets are measured at the present value of the remaining lease payments, discounted at an appropriate incremental borrowing rate at lease commencement, or as of January 1, 2019, for our existing leases. Management uses judgment to estimate the appropriate incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. Certain adjustments to the ROU asset may be required for items such as initial direct lease costs, lease incentives, scheduled rent escalations and impairment charges if we determine the ROU asset is impaired. Operating lease expense is recognized on a straight-line basis over the lease term. We elected the post-transition practical expedient to not separate lease components from non-lease components for all existing lease classes. We also elected a policy of not recording leases on our condensed balance sheets when a lease has a term of one year or less. Recent Accounting Pronouncements Not Yet Effective ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments 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 for us on January 1, 2020 with early adoption permitted. We expect to adopt this ASU on January 1, 2020 and are currently evaluating the effect that the updated standard will have on our consolidated financial statements and related disclosures. 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. We are currently evaluating the timing and effect that the updated standard will have on our 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, Fair Value Measurement , 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. We are currently evaluating the timing and effect that the updated standard will have on our consolidated financial statements and related disclosures. |
Modis Asset Acquisition and Ass
Modis Asset Acquisition and Assumption of License Agreements | 9 Months Ended |
Sep. 30, 2019 | |
Asset Acquisition [Abstract] | |
Modis Asset Acquisition and Assumption of License Agreements | Modis Asset Acquisition and Assumption of License Agreements Asset Acquisition of Modis On September 6, 2019, the date the transaction closed, we acquired all of the outstanding equity interests of Modis, a privately-held biopharmaceutical company, to expand our late-stage development pipeline. Modis was formed in May 2016 through a collaboration with academic experts in mitochondrial biology. Modis holds an exclusive worldwide license from Columbia University in New York City (Columbia) to certain intellectual property rights owned or controlled by Columbia to develop and commercialize MT1621. MT1621 is an investigational deoxynucleoside substrate enhancement therapy (SET) for the treatment of thymidine kinase 2 deficiency (TK2d), an inherited mitochondrial DNA depletion disorder that predominantly affects children and is often fatal. Aggregate upfront consideration transferred of approximately $246.5 million consisted of $175.5 million in cash payments made and 1,595,025 unregistered shares of our common stock issued to the outstanding shareholders of Modis as well as employee award holders under the legacy Modis 2017 Stock Plan (Modis Plan). The fair value of common stock issued as acquisition consideration was $68.1 million on the date the transaction closed. Also included in the aggregate upfront consideration transferred were $3.5 million of transaction costs incurred, reduced by a net working capital adjustment receivable of $0.6 million. Pursuant to the terms of the Modis purchase agreement, certain unvested awards held by employees under the Modis Plan converted into the right to receive a pro-rata share of the purchase consideration at the date of acquisition, with no future service requirement. A component of the total consideration transferred was attributed to the unvested awards with a fair value of $4.9 million and was accounted for as a separate transaction from the asset acquisition. This amount was immediately expensed and included in the “Acquired in-process research and development and related costs” line item in the condensed consolidated statements of operations for the three and nine months ended September 30, 2019. Of the upfront cash consideration, $25.0 million was deposited into an escrow account to fund post-closing net working capital adjustments, and general representations and warranties for a one-year period. In addition, the former shareholders of Modis are eligible to receive milestone payments consisting of $100.0 million upon FDA approval and $50.0 million upon EMA approval of MT1621, as well as a 5% royalty on any future net sales of specified Modis products. The upfront cash consideration was funded by our cash and marketable securities on hand. The shares of our common stock provided as consideration were subsequently registered under our existing shelf registration statement on Form S-3 (No. 333-220759). We determined substantially all of the fair value of Modis was concentrated in a single IPR&D asset group, which included license rights, clinical trial data, clinical trial development plans, research and development materials, formulations and intellectual property related to MT1621. Accordingly, the acquired set of assets and activities did not meet the definition of a business. As a result, we accounted for the transaction as an asset acquisition and allocated the remaining upfront consideration transferred to the identifiable tangible and intangible assets acquired and liabilities assumed based on their relative fair values resulting in $244.5 million being assigned to the IPR&D asset associated with MT1621 and $2.8 million for assumed net liabilities. In connection with the acquisition, 13 former Modis employees continued their employment with Zogenix on an at-will basis. The relative fair value attributed to this assembled workforce was deemed to be insignificant. As of the acquisition date, Modis had completed a pivotal Phase 2 retrospective treatment clinical trial study (RETRO) of MT1621 substrate enhancement therapy in patients with TK2d and commenced a Phase 2 prospective, open-label extension clinical trial study of patients with TK2d. As the MT1621 program had not yet reached technological feasibility and had no alternative future use, the purchased IPR&D asset was expensed immediately subsequent to the acquisition within our condensed consolidated statements of operations. As we had no tax basis in the acquired IPR&D asset, and the acquired IPR&D asset was expensed prior to the measurement of any deferred taxes, no deferred taxes were recognized for the initial differences between the amounts recognized for financial reporting and tax purposes. We have recorded the acquisition holdback amount placed in escrow of $25.0 million within current assets with a corresponding current liability, net of post-closing adjustment of $0.6 million on our condensed consolidated balance sheet at September 30, 2019. The milestone payments due upon FDA or EMA approval and royalty payments on future net sales of MT1621 products were determined to be contingent consideration. We determined the contingent consideration was not subject to derivative accounting and will be recognized when the contingency is resolved, and the consideration is paid or becomes payable. The nature of the remaining efforts for completion of the MT1621 program primarily consist of performing clinical trials and validating contract manufacturing abilities, the cost, length and success of which are extremely difficult to determine. Numerous risks and uncertainties can delay or stop clinical development of a pharmaceutical product prior to the receipt of marketing approval, including, but not limited to, results from clinical trials that do not support continuing development, issues related to manufacturing or intellectual property protection, and other events or circumstances that cause unanticipated delays, technical problems or other difficulties. Given these risks and uncertainties, there can be no assurance that the development of MT1621 will be successfully completed. If the development of MT1621 is not successful, in whole or in part, or completed in a timely manner, we may not realize the expected financial benefits from the development of MT1621. License Agreement with Columbia University As a result of our acquisition of Modis, we became party to the Exclusive License Agreement, by and between Modis and the Trustees of Columbia University in the City of New York, dated as of September 26, 2016, related to MT1621. We are required to use commercially reasonable efforts to develop and commercialize licensed products worldwide, including to meet certain development and commercialization milestones within specified periods of time. Upon the achievement of certain regulatory and commercial milestones, we are required to pay Columbia University up to $2.9 million and $25.0 million, respectively, as well as tiered royalties on sales for each licensed product, at percentages ranging from the mid-single digits to the high single-digits. The royalty obligations and License Agreement will expire on a country-by-country and product-by-product basis upon the later of (i) 15 years after the first bona fide commercial sale of a licensed product, (ii) the expiration of the last to expire valid patent claim covering a licensed product in a country or (iii) expiration of any regulatory exclusivity covering such licensed product. The License Agreement may be terminated by either by Columbia or by us in the event of an uncured material breach by the other party, or by Columbia in the event we are subject to specified bankruptcy, insolvency or similar circumstances. We can terminate the License Agreement either in its entirety or on a product-by-product and country-by-country basis, upon specified prior written notice to Columbia, provided we are not exploiting licensed products in such countries. Other License Agreement Assumed We also became party to a license agreement between two other research institutions related to MT1621 where we may be required to pay up to $2.7 million for research, development and regulatory milestone events and up to $10.0 million for certain sales milestone events. We are also required to pay tiered royalties ranging from low to mid-single digits on net sales of licensed product. |
Collaborative Arrangement
Collaborative Arrangement | 9 Months Ended |
Sep. 30, 2019 | |
Disaggregation of Revenue [Abstract] | |
Collaborative Arrangement | Collaborative Arrangement In March 2019, we entered into an agreement (Shinyaku Agreement) with Nippon Shinyaku Co., Ltd. (Shinyaku) for the exclusive distribution of Fintepla in Japan for the treatment of Dravet syndrome and LGS. As part of the Shinyaku Agreement, we are responsible for completing the global clinical development and all regulatory approval activities for Fintepla to support the submission of new drug applications in Japan for Dravet syndrome and LGS. Shinyaku will be responsible for the commercialization activities including the promotion, marketing, sale and distribution of Fintepla in Japan. Upon regulatory approval of Fintepla in Japan, Shinyaku will also act as our exclusive distributor for commercial shipment and distribution of Fintepla in Japan. If we pursue global development of Fintepla for indications other than Dravet syndrome or LGS, Shinyaku has the option to participate in the development for such indications in Japan, subject to cost sharing requirements pursuant to the agreement. Activities under the Shinyaku Agreement will be governed by a joint steering committee (JSC) consisting of three representatives from each party to the agreement. All decisions of the JSC are to be made by a unanimous vote with tie-breaking rights provided to each party for certain matters related to development, regulatory approval and commercialization. Shinyaku has agreed to support development and regulatory approval of Fintepla in Japan by actively participating in the design of non-clinical, clinical and manufacturing requirements needed for regulatory submission, actively planning and participating in product labeling decisions and discussions with the Japanese Ministry of Health, Labor and Welfare (MHLW) and obtained distribution exclusivity through the payment of $20.0 million, of which $15.5 million was received shortly after the execution of the agreement with the remainder payable over the next two years. We will be actively running the clinical trials, performing manufacturing validation activities, preparing regulatory filings and holding discussions with MHLW, and negotiating pricing. We and Shinyaku have agreed to proportionally share the Japan specific development costs that may arise outside of the initial development plan and any post-approval clinical study costs in Japan. In addition, we can earn up to $66.0 million from Shinyaku for the achievement of certain regulatory milestones related to the treatment of Dravet syndrome and the treatment of LGS. After regulatory approval of Fintepla in Japan has been obtained, we have agreed to supply Shinyaku with Fintepla upon receipt of purchase orders at our actual manufacturing cost plus a fixed transfer price mark-up, a fixed percentage of Shinyaku's net sales of Fintepla in Japan for such fiscal year, and a net price mark-up based on a percent of the applicable aggregate sales of Fintepla by Shinyaku for such fiscal year. The net price mark-up percentage increases with Shinyaku’s sales of Fintepla annual net sales in Japan and ranges between mid-twenties and is capped at a low thirties of the aggregate annual net sales for an applicable fiscal year. In addition, we can earn up to an additional $42.5 million tied to the achievement of certain net sales milestones by Shinyaku through the term of the agreement. The Shinyaku Agreement expires in September of 2045, unless earlier terminated by either party for a change in control, a material breach, bankruptcy, dissolution, or winding up of such other party. The Shinyaku Agreement may be also terminated by either party: (1) with one year prior written notice to the other party on or after the date of the first commercial sale of a competing generic version of the Fintepla in Japan, (2) if, prior to the launch of the Fintepla in Japan, a party has a good faith concern, based on credible evidence, that such launch is not likely to be possible with commercially reasonable efforts, or (3) if a party believes Fintepla poses a substantial safety concern. We may also terminate the agreement following the second anniversary of the first commercial sale of the Fintepla in Japan if Shinyaku has failed to achieve or maintain certain diligence obligations under the Shinyaku Agreement. Shinyaku may also terminate the agreement if, prior to the launch of the Fintepla in Japan, Shinyaku has a good faith concern that Fintepla will not be commercially viable in Japan. We concluded that collaborative activities under the Shinyaku Agreement prior to regulatory approval are within the scope of the collaborative arrangements guidance as both parties are active participants and are exposed to significant risks and rewards dependent on the success of commercializing Fintepla in Japan. Shinyaku is not a customer as it does not obtain an output of our development and regulatory approval activities for Fintepla as they were not provided a license to its intellectual property or the ability to manufacture the product, and we do not consider performing development and regulatory approval services to be a part of our ongoing activities. We considered the revenue from contracts with customers guidance by analogy in determining the unit of account, and the recognition and measurement of such unit of account for collaborative activities under the Shinyaku Agreement and concluded that there are two development programs akin to performance obligations related to collaborative activities for development and regulatory approval efforts for Dravet and LGS. Participation on the JSC was concluded to be both quantitatively and qualitatively immaterial in the context of the Shinyaku Agreement. We are the principal as it relates to the collaborative development and regulatory approval activities primarily because we are responsible for the acceptability of the results of the work of the third-party vendors that are used to assist us in performing such activities. Therefore, such collaboration revenue has been presented on a gross basis in our condensed consolidated statements of operations apart from research and development expenses incurred. The initial collaboration consideration allocated on a relative standalone selling price basis to each associated development program was determined using the most likely method to consist solely of the fixed consideration payments of $20.0 million. Analogizing to the revenue from contracts with customers variable consideration guidance, all potential regulatory milestone payment consideration will be included in the collaboration consideration if and when it is probable that a significant reversal in the amount of cumulative collaboration consideration recognized will not occur when the uncertainty associated with the variable collaboration consideration is subsequently resolved. At contract inception and through September 30, 2019, this consideration was fully constrained as the achievement of the events tied to these regulatory milestone payments was highly dependent on factors outside our control. Collaboration revenue is being recognized over time as the collaborative activities related to each development program are rendered. We determined an input method is a reasonable representative depiction of the performance of the collaborative activities under the Shinyaku Agreement. The method of measuring progress towards completion incorporates actual internal and external costs incurred, relative to total internal and external costs expected to be incurred over an estimated period to satisfy the collaborative activities. The period over which total costs are estimated reflects our estimate of the period over which it will perform the collaborative activities for each development program. We expect to recognize collaboration revenue for each development program over periods ranging from three As of September 30, 2019, we had received $15.5 million out of the $20.0 million in fixed consideration. The remaining $4.5 million will be billed in accordance with the terms of the agreement and will be recorded when there is an unconditional right to receive this payment. For the three and nine months ended September 30, 2019, we recognized collaboration revenue of $0.6 million and $1.7 million, respectively. As of September 30, 2019, $13.8 million related to this agreement was recorded as deferred revenue, which is classified as either current or net of current portion in the accompanying condensed consolidated balance sheets based on the period over which the collaboration revenue is expected to be recognized. We expect to recognize collaboration revenue related to these collaborative activities through the end of 2023. We concluded that the supply of Fintepla to Shinyaku will be within the scope of the revenue from contracts with customers guidance if regulatory approval in Japan occurs and when a purchase order is received from Shinyaku. Such activity is considered to be a vendor customer relationship as Shinyaku will be a party that has contracted with an us to obtain goods or services that are an output of our ordinary activities in exchange for consideration and selling approved commercial product to a customer is expected to be part of our ongoing activities. Each purchase order for a shipment of Fintepla will be identified as a separate performance obligation as we did not grant Shinyaku intellectual property rights. The agreed upon price for the supply of Fintepla (cost plus a fixed transfer price mark-up, fixed percentage of aggregate sales of Fintepla by Shinyaku per year, the net price mark-up and sales milestones) to Shinyaku does not represent a material right, and therefore is not a performance obligation, and such pricing on an aggregate basis represents the standalone selling price a distributor would typically pay for such a product in that region or market. There are also no minimum purchase commitments. The transaction price to be allocated to the performance obligation will include the fixed consideration associated with the cost-plus price of Fintepla and variable consideration associated with a fixed percentage of aggregate sales of Fintepla by Shinyaku per year, the net price mark-up and sales milestones subject to the constraint. As of September 30, 2019 , Shinyaku has not provided us with any purchase orders and thus no revenue has been recognized for the supply of Fintepla. |
Cash, Cash Equivalents and Mark
Cash, Cash Equivalents and Marketable Securities | 9 Months Ended |
Sep. 30, 2019 | |
Cash and Cash Equivalents [Abstract] | |
Cash, Cash Equivalents, and Marketable Securities | Cash, Cash Equivalents and Marketable Securities The following tables summarize the amortized cost and the estimated fair value of our cash, cash equivalents and marketable securities as of September 30, 2019 and December 31, 2018 (in thousands): September 30, 2019 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Current assets: Cash $ 23,568 $ — $ — $ 23,568 Cash equivalents: Commercial paper 996 — — 996 Money market funds 8,535 — — 8,535 Total cash equivalents 9,531 — — 9,531 Total cash and cash equivalents 33,099 — — 33,099 Marketable securities: Commercial paper 86,936 — — 86,936 Corporate debt securities 81,835 425 (3) 82,257 Certificate of deposits 52,672 — — 52,672 Total marketable securities 221,443 425 (3) 221,865 Total cash, cash equivalents and marketable securities $ 254,542 $ 425 $ (3) $ 254,964 December 31, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Current assets: Cash $ 5,222 $ — $ — $ 5,222 Cash equivalents: 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 Certificate of deposits 128,647 — — 128,647 U.S. Treasury securities 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 cost and fair value of marketable securities based on stated effective maturities as of September 30, 2019 (in thousands): Amortized Cost Fair Value Due within one year $ 168,397 $ 168,490 Due between one and two years 53,046 53,375 Total $ 221,443 $ 221,865 We determine realized gains or losses on the sale of marketable securities on a specific identification method. We recognized gross realized gains of $0.3 million for the three and nine months ended September 30, 2019. There were no sales of available-for-sale securities during the three and nine months ended September 30, 2018. We reflect these gains and losses as a component of other income (expense), net in the condensed consolidated statements of operations. As of September 30, 2019, available-for-sale debt securities that were in a continuous loss position but were not deemed to be other than temporarily impaired were not material. See Note 6 for further information regarding the fair value of our financial instruments. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2019 | |
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. Our financial instruments consist primarily of cash and cash equivalents, marketable securities, other current assets, accounts payable and accrued liabilities, contingent consideration liabilities and our outstanding common stock warrant liabilities. Certain cash equivalents, marketable securities, contingent consideration liabilities and common stock warrant liabilities are reported at their respective fair values on our condensed consolidated balance sheets. The remaining financial instruments are carried at cost which approximates their respective fair values because of the short-term nature of these financial instruments. The following tables summarize assets and liabilities recognized or disclosed at fair value on a recurring basis as of September 30, 2019 and December 31, 2018 (in thousands): September 30, 2019 Level 1 Level 2 Level 3 Total Assets: Cash equivalents: Commercial paper $ — $ 996 $ — $ 996 Money market funds 8,535 — — 8,535 Marketable securities: Commercial paper — 86,936 — 86,936 Corporate debt securities — 82,257 — 82,257 Certificate of deposits — 52,672 — 52,672 Total assets (1) $ 8,535 $ 222,861 $ — $ 231,396 Liabilities: Common stock warrant liabilities (2) $ — $ — $ 102 $ 102 Contingent consideration liabilities (3) — — 70,900 70,900 Total liabilities $ — $ — $ 71,002 $ 71,002 December 31, 2018 Level 1 Level 2 Level 3 Total 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 Certificate of deposits — 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 (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. We estimated the fair value of the warrant liabilities using the Black-Scholes valuation model. As of September 30, 2019 and December 31, 2018, common stock warrant liabilities relate to 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 our common stock at an exercise price of $72.00 per share and expires in July 2021. (3) In connection with a prior acquisition in 2014, we may be required to pay future contingent consideration upon the achievement of specified development, regulatory approval or sales-based milestone events. We estimated the fair value of the contingent consideration liabilities on the acquisition date 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 interest rates. Subsequent to the acquisition date, at each reporting period prior to settlement, we revalue these liabilities by performing a review of the assumptions listed above and record increases or decreases in the fair value of these contingent consideration liabilities. In the absence of any significant changes in key assumptions, the quarterly determination of fair values of these contingent consideration liabilities would primarily reflect the passage of time and risk-adjusted interest rates. Significant judgment is used in determining Level 3 inputs and fair value measurements as of the acquisition date and for each subsequent reporting period. Updates to assumptions could have a significant impact on our results of operations in any given period and actual results may differ from estimates. For example, significant increases in the 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 acquisition provides for aggregate contingent consideration of up to $95.0 million, of which $10.0 million was paid in March 2019. As of September 30, 2019, the estimated fair value of our contingent consideration liabilities was $70.9 million, of which $35.2 million has been classified as current liabilities. The classification was based upon our reasonable expectation as to the timing of settlement of certain specified milestones. The following tables provide a reconciliation of liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and nine months ended September 30, 2019 and 2018 (in thousands): Contingent Consideration Liabilities Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Balance at beginning of period $ 70,500 $ 74,400 $ 78,200 $ 76,900 Change in fair value 400 5,700 2,700 3,200 Settlements — — (10,000) — Balance at end of period $ 70,900 $ 80,100 $ 70,900 $ 80,100 Common Stock Warrant Liabilities Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Balance at beginning of period $ 501 $ 543 $ 343 $ 512 Change in fair value (399) 64 (241) 95 Balance at end of period $ 102 $ 607 $ 102 $ 607 The changes in fair value of the liabilities shown in the tables above are recorded through change in fair value of contingent consideration liabilities within operating expense and the change in fair value of common stock warrant liabilities within other income (expense) in the condensed consolidated statements of operations. There were no transfers between levels during the periods presented. See Note 5 for further information regarding the amortized cost of our financial instruments. |
Accrued and Other Current Liabi
Accrued and Other Current Liabilities | 9 Months Ended |
Sep. 30, 2019 | |
Payables and Accruals [Abstract] | |
Accrued and Other Current Liabilities | Accrued and Other Current Liabilities The following table provides details of accrued and other current liabilities (in thousands): September 30, 2019 December 31, 2018 Accrued clinical trial expenses $ 11,100 $ 10,621 Accrued compensation 6,219 5,277 Other accrued liabilities 5,704 1,845 Common stock warrant liabilities 102 343 Total accrued and other current liabilities $ 23,125 $ 18,086 |
Leases
Leases | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Leases | Leases We have noncancellable operating leases consisting of administrative and research and development office space for our Emeryville, California headquarters and former headquarters in San Diego, California that expire in May 2027 and March 2020, respectively. Our Emeryville lease includes a renewal option for an additional five years, which was not included in our determination of the lease term under the legacy lease standard as renewal was not reasonably assured at the inception of the lease. As a result, the renewal option to extend the lease was not included in determining our ROU assets and lease liabilities. Our former headquarters has been subleased to an unrelated third party for the remainder of our original lease term. As part of our acquisition of Modis in September 2019, we assumed the lease for Modis’ headquarters in Oakland, California. The Oakland lease expires in July 2021 and has been included in our ROU assets and lease liabilities in our condensed consolidated balance sheets. As of September 30, 2019, we do not have any material finance leases or service contracts with lease arrangements. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. The components of lease costs, which were included in our condensed consolidated statements of operations, were as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, Lease costs Operating lease cost $ 510 $ 1,505 Short-term lease cost (1) 142 690 Sublease income (145) (435) Total $ 507 $ 1,760 (1) Short-term lease cost included $0.2 million related to a short-term lease that expired in March 2019. Cash paid for amounts included in the measurement of lease liabilities for the nine months ended September 30, 2019 was $1.2 million and was included in net cash used in operating activities in our condensed consolidated statements of cash flows. Maturities of operating lease liabilities as of September 30, 2019 and lease commitments under noncancellable operating leases as of December 31, 2018 were as follows (in thousands): September 30, 2019 December 31, 2018 2019 (remaining 3 months and 12 months, respectively) $ 632 $ 1,777 2020 1,986 1,788 2021 1,957 1,839 2022 1,894 1,894 2023 1,951 1,951 Thereafter 7,111 7,296 Total lease payments 15,531 $ 16,545 Less imputed interest (3,005) Total operating lease liabilities $ 12,526 September 30, 2019 Current portion of operating lease liabilities $ 1,431 Operating lease liabilities, net of current portion 11,095 Total lease liabilities $ 12,526 As of September 30, 2019, the weighted average remaining lease term was 7.3 years and the weighted average discount rate, weighted based on the remaining balance of lease payments, was 6.0%. |
Common Stock and Stock-Based Co
Common Stock and Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Common Stock and Stock-Based Compensation | Common Stock and Stock-Based Compensation Increase in Authorized Shares of Common Stock In May 2019, our stockholders approved and we filed an amendment to our Fifth Amended and Restated Certificate of Incorporation, as amended, to increase the total number of authorized shares of common stock from 50,000,000 to 100,000,000. Equity Incentive Plans We have issued stock-based awards from various equity incentive and stock purchase plans, as more fully described in the consolidated financial statements and related notes included in our 2018 Annual Report on Form 10-K. At December 31, 2018, 1,550,351 shares were available for grant under our 2010 Equity Incentive Award Plan (2010 Plan). Pursuant to its evergreen provision, the number of shares reserved for issuance under the 2010 Plan automatically increases on January 1 of each year, commencing on January 1, 2013, and on each January 1 through and including January 1, 2020, in an amount equal to 4% of the total number of shares of common stock outstanding on December 31 of the preceding year, or a lesser number of shares as determined by our board of directors. On January 1, 2019, the increase in shares reserved for issuance pursuant to the evergreen provision was limited to 589,619 shares as the 2010 Plan’s maximum 7,500,000 shares reserved for issuance was reached. In May 2019, our stockholders approved the amendment and restatement of our 2010 Plan (2010 Restated Plan), which provided an increase in the number of shares of common stock reserved for issuance pursuant to awards granted under our 2010 Plan from 7,500,000 to 11,500,000 and an extension of the term of the 2010 Plan through March 2029. In addition, the 2010 Restated Plan eliminated the evergreen provision that provided for an annual increase in the number of shares available for issuance under the 2010 Plan on January 1 of each year discussed above. Following its approval, all future issuance of equity awards will be granted under the 2010 Restated Plan (other than the shares available for purchase under our 2010 Employee Stock Purchase Plan). As of September 30, 2019, 5,218,040 shares were available for future issuance under the 2010 Restated Plan. Stock Options The following is a summary of stock option activity for the nine months ended September 30, 2019 (in thousands, except per share data): Shares Weighted- Average Exercise Price per Share Outstanding at December 31, 2018 3,744 $ 20.69 Granted 994 49.94 Exercised (544) 14.82 Canceled (81) 34.46 Outstanding at September 30, 2019 4,113 $ 28.26 Restricted Stock Units The following is a summary of restricted stock unit activity for the nine months ended September 30, 2019 (in thousands, except per share data): Shares Weighted- Average Fair Value per Share at Grant Date Outstanding at December 31, 2018 289 $ 25.56 Granted 169 52.56 Vested (37) 43.10 Canceled (42) 32.20 Outstanding at September 30, 2019 379 $ 35.13 Stock-Based Compensation Expense Allocation The following table summarizes the components of total stock-based compensation expense included in the condensed consolidated statements of operations (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Research and development $ 2,012 $ 3,275 $ 5,521 $ 5,018 Selling, general and administrative 3,423 3,706 9,495 6,934 Compensation expense related to acquired IPR&D 4,927 — 4,927 — Total $ 10,362 $ 6,981 $ 19,943 $ 11,952 |
Net Loss Per Share
Net Loss Per Share | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Net Loss per Share | Net Loss Per ShareBasic net loss from continuing operations per share is calculated by dividing net loss from continuing operations by the weighted average number of shares outstanding for the period. Diluted net loss from continuing operations per share is calculated by dividing net loss from continuing operations by the weighted average number of shares of common stock and potential dilutive common stock equivalents outstanding during the period if the effect is dilutive. Our potentially dilutive shares of common stock include outstanding stock options, restricted stock units and warrants to purchase common stock. A reconciliation of the numerators and denominators used in computing net loss from continuing operations per share is as follows (in thousands, except per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Numerator: Net loss from continuing operations $ (290,478) $ (42,264) $ (363,443) $ (101,283) Denominator: Shares used in per share calculation 43,029 39,242 42,577 36,485 Net loss from continuing operations per share, basic and diluted $ (6.75) $ (1.08) $ (8.54) $ (2.78) The following table presents the potential shares of common stock outstanding that were excluded from the computation of diluted net loss from continuing operations per share for the periods presented because including them would have been anti-dilutive (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Shares subject to outstanding stock options 4,172 3,957 4,040 3,752 Shares subject to outstanding restricted stock units 402 303 371 287 Shares subject to outstanding warrants to purchase common stock 28 28 28 35 Total 4,602 4,288 4,439 4,074 |
United Kingdom (U.K.) Research
United Kingdom (U.K.) Research and Development Incentives | 9 Months Ended |
Sep. 30, 2019 | |
Other Income and Expenses [Abstract] | |
United Kingdom (U.K.) Research and Development Incentives | United Kingdom (U.K.) Research and Development Incentives We carry out extensive research and development activities that benefit from the U.K.’s small and medium-sized enterprise (SME) research and development tax credit regime, whereby we may either receive an enhanced U.K. tax deduction on our eligible research and development activities or, when an SME entity is in a net operating loss position, elect to surrender net operating losses that arise from its eligible research and development activities in exchange for a cash payment from the U.K. tax authorities. These refundable cash credits, which may be received without regard to actual tax liability, are not subject to accounting for income taxes and have been recorded as a component of other income. In December 2018, we filed a claim as an SME for a $7.1 million refundable cash credit for our 2016 tax year, which was received in February 2019. We recorded this amount as a component of other income for the year-ended December 31, 2018. As of the date hereof, we have not filed claims for any refundable cash credit for our 2017 or 2018 tax years, nor have we recorded any balances related to claims for these years or for the 2019 tax year, as collectability is deemed not probable or reasonably assured. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results may differ from those estimates. |
Revenue Recognition | Revenue Recognition We analyze our collaboration arrangements to assess whether such arrangements, or transactions between arrangement participants, involve joint operating activities performed by parties that are both active participants in the activities and exposed to significant risks and rewards dependent on the commercial success of such activities or are more akin to a vendor-customer relationship. In making this evaluation, we consider whether the activities of the collaboration are considered to be distinct and deemed to be within the scope of the collaborative arrangement guidance and those that are more reflective of a vendor-customer relationship and, therefore, within the scope of the revenue with contracts with customers guidance. This assessment is performed throughout the life of the arrangement based on changes in the responsibilities of all parties in the arrangement. For elements of collaboration arrangements that are not accounted for pursuant to the revenue from contracts with customers guidance, an appropriate recognition method is determined and applied consistently, generally by analogy to the revenue from contracts with customers guidance. Amounts related to transactions with a counterparty in a collaborative arrangement that is not a customer are presented as collaboration revenue and on a separate line item from revenue recognized from contracts with customers, if any, in our condensed consolidated statements of operations. Amounts received prior to satisfying the revenue recognition criteria are recorded as deferred revenue in the condensed consolidated balance sheets. If the related efforts underlying the deferred revenue is expected to be satisfied within the next twelve months this will be classified in current liabilities. Unconditional rights to receive consideration in advance of performance are recorded as receivables and deferred revenue in the condensed consolidated balance sheets when we have a contractual right to bill and receive the payment, performance is expected to commence shortly and there is less than a year between billing and performance. Amounts recognized for satisfied performance obligations prior to the right to payment becoming unconditional are recorded as contract assets in the condensed consolidated balance sheets. If we expect to have an unconditional right to receive consideration in the next twelve months, this will be classified in current assets. A net contract asset or liability is presented for each contract with a customer. For arrangements or transactions between arrangement participants determined to be within the scope of the contracts with customers guidance, we perform the following steps to determine the appropriate amount of revenue to be recognized as we fulfill our obligations: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations based on estimated selling prices; and (v) recognition of revenue when (or as) we satisfy each performance obligation. At contract inception, we assess the goods or services promised in a contract with a customer and identify those distinct goods and services that represent a performance obligation. A promised good or service may not be identified as a performance obligation if it is immaterial in the context of the contract with the customer, if it is not separately identifiable from other promises in the contract (either because it is not capable of being separated or because it is not separable in the context of the contract), or if the performance obligation does not provide the customer with a material right. We consider the terms of the contract and our customary business practices to determine the transaction price. The transaction price is the amount of consideration to which we expect to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. Variable consideration will only be included in the transaction price when it is not considered constrained, which is when it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur. If it is determined that multiple performance obligations exist, the transaction price is allocated at the inception of the agreement to all identified performance obligations based on the relative stand-alone selling prices unless the transaction price is variable and meets the criteria to be allocated entirely to one or more, but not all, performance obligations in the contract. The relative selling price for each performance obligation is based on observable prices if it is available. If observable prices are not available, we estimate stand-alone selling price for the performance obligation utilizing the estimated cost of the performance obligation with an estimated assumed margin. Once the transaction price has been allocated to a performance obligation using the applicable methodology, it is not subject to reassessment for subsequent changes in stand-alone selling prices. Revenue is recognized when, or as, we satisfy a performance obligation by transferring a promised good or service to a customer. An asset is transferred when, or as, the customer obtains control of that asset. For performance obligations that are satisfied over time, we recognize revenue using an input or output measure of progress that best depicts our satisfaction of the relevant performance obligation. Revenues from performance obligations associated with a purchase order of Fintepla will be recognized when the customer obtains control of our product, which will occur at a point in time which may be upon shipment or delivery to the customer. After contract inception, the transaction price is reassessed at every period end and updated for changes such as resolution of uncertain events. Any change in the overall transaction price is allocated to the performance obligations on the same methodology as at contract inception. Management may be required to exercise judgment in estimating revenue to be recognized. Judgment is required in identifying performance obligations, estimating the transaction price, estimating the stand-alone selling prices of identified performance obligations, which may include forecasted revenue, development timelines, reimbursement rates for personnel costs, discount rates and probabilities of technical and regulatory success, and estimating the progress towards satisfaction of performance obligations. |
Acquisitions | We evaluate acquisitions of assets and other similar transactions to assess whether or not the transaction should be accounted for as a business combination or asset acquisition by first applying a screen test to determine if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. If the screen is met, the transaction is accounted for as an asset acquisition. If the screen is not met, further determination is required as to whether or not we have acquired inputs and processes that have the ability to create outputs which would meet the definition of a business. Significant judgment is required in the application of the screen test to determine whether an acquisition is a business combination or an acquisition of assets. For asset acquisitions, a cost accumulation model is used to determine the cost of an asset acquisition. Common stock issued as consideration in an asset acquisition is generally measured based on the acquisition date fair value of the equity interests issued . Direct transaction costs are recognized as part of the cost of an asset acquisition. We also evaluate which elements of a transaction should be accounted for as a part of an asset acquisition and which should be accounted for separately. Consideration deposited into escrow accounts are evaluated to determine whether it should be included as part of the cost of an asset acquisition or accounted for as contingent consideration. Amounts held in escrow where we have legal title to such balances but where such accounts are not held in our name, are recorded on a gross basis as an asset with a corresponding liability in our condensed consolidated balance sheet. The cost of an asset acquisition, including transaction costs, are allocated to identifiable assets acquired and liabilities assumed based on a relative fair value basis. Goodwill is not recognized in an asset acquisition. Any difference between the cost of an asset acquisition and the fair value of the net assets acquired is allocated to the non-monetary identifiable assets based on their relative fair values. Assets acquired as part of an asset acquisition that are considered to be in-process research and development (IPR&D) are immediately expensed unless there is an alternative future use in other research and development projects . In addition to upfront consideration, our asset acquisitions may also include contingent consideration payments to be made for future milestone events or royalties on net sales of future products. We assess whether such contingent consideration meets the definition of a derivative. Contingent consideration payments in an asset acquisition not required to be accounted for as derivatives are recognized when the contingency is resolved, and the consideration is paid or becomes payable. Contingent consideration payments required to be accounted for as derivatives are recorded at fair value on the date of the acquisition and are subsequently remeasured to fair value at each reporting date . Contingent consideration payments made prior to regulatory approval are expensed as incurred. Contingent consideration payments made subsequent to regulatory approval are capitalized as intangible assets and amortized, subject to impairment assessments. |
Collaborative Arrangements | Accounting Standards Update (ASU) 2018-18, Collaborative Arrangements: Clarifying the Interaction between Topic 808 and Topic 606 (ASU 2018-18) makes targeted improvements for collaborative arrangements by (1) clarifying that certain transactions between collaborative arrangement participants should be accounted for as revenue under the contract with customer guidance (Topic 606) when the collaborative arrangement participant is a customer, (2) adding unit of account guidance to assess whether the collaborative arrangement, or a part of the arrangement, is with a customer and (3) precluding a company from presenting transactions with collaborative arrangement participants that are not directly related to sales to third parties together with revenue from contracts with customers. Entities must apply the guidance retrospectively as of the date of their initial application of Topic 606 and should recognize the cumulative effect of initially applying the amendments as an adjustment to opening retained earnings as of the later of (1) the earliest annual period presented and (2) the annual period that includes the date of the entity’s initial application of Topic 606. ASU 2018-18 is effective for fiscal years beginning after December 15, 2019, including interim periods therein. Early adoption is permitted. We elected to early adopt this standard effective January 1, 2019 and have applied its guidance to our arrangement entered into in March 2019 with Nippon Shinyaku Co., Ltd. (See Note 4). No retrospective adjustment to our condensed consolidated financial statements was required as a result of our application of these amendments. In August 2018, the SEC adopted the final rule under SEC Release No. 33-10532, Disclosure Update and Simplification, amending certain disclosure requirements that were redundant, duplicative, overlapping, outdated or superseded. Additionally, the amendments expanded the disclosure requirements on the analysis of stockholders’ equity for interim financial statements. Under the amendments, a summary of changes in each caption of stockholders’ equity presented in the consolidated balance sheets must be provided in a note or separate statement, and we have provided this disclosure beginning with the first quarter of 2019. |
Leases | Leases In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) . Topic 842 establishes a right-of-use asset 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. We adopted Topic 842 effective January 1, 2019 using the modified retrospective approach and elected the package of practical expedients permitted under transition guidance. Consequently, prior period financial information and related disclosures have not been adjusted and will continue to be presented in accordance with the previous lease standard. In addition, we elected the package of transition provisions available for existing contracts, which allowed us to carryforward our historical assessments of (1) whether contracts are or contain leases, (2) lease classification and (3) initial direct lease costs for existing leases. We did not elect the practical expedient allowing the use-of-hindsight which would require us to reassess the lease term of our leases based on all facts and circumstances through the effective date and did not elect the practical expedient pertaining to land easements as this is not applicable to the current contract portfolio. The adoption of Topic 842 did not have a material impact on our condensed consolidated statements of operations and cash flows. The impact on the accompanying condensed consolidated balance sheet as of January 1, 2019 was as follows (in thousands): December 31, 2018 Adjustments Due to the January 1, 2019 Assets Operating lease right-of-use assets $ — $ 8,641 $ 8,641 Liabilities Other accrued liabilities $ 1,845 $ (363) $ 1,482 Current portion of operating lease liabilities — 1,058 1,058 Operating lease liabilities, net of current portion — 11,776 11,776 Other long-term liabilities 3,830 (3,830) — Total $ 5,675 $ 8,641 $ 14,316 Upon adoption on January 1, 2019, we recorded operating lease ROU assets and lease liabilities of $8.6 million and $12.8 million, respectively, with the difference between ROU assets and lease liabilities attributed to the reclassifications of deferred rent and lease incentive obligations, a cease-use liability and initial direct leasing costs as a component of ROU assets. Prior to January 1, 2019, we recognized related rent expense on a straight-line basis over the term of the lease. Incentives granted under our operating lease, including allowances for leasehold improvements and rent holidays, were recognized as reductions to rent expense on a straight-line basis over the term of the lease. Deferred rent consisted of the difference between rent expense recognized on a straight-line basis and cash rent payments. Subsequent to the adoption of Accounting Standards Update (ASU) 2016-02 and related amendments (collectively, Topic 842) on January 1, 2019, we determine whether the arrangement is or contains a lease at the inception of the arrangement and if such a lease is classified as a financing lease or operating lease at lease commencement. All of our leases are classified as operating leases. Leases with a term greater than one year are included in operating lease right-of-use assets (ROU asset), current portion of lease liabilities, and lease liabilities, net of current portion in our condensed consolidated balance sheet at September 30, 2019. If a lease contains an option to renew, the renewal option is included in the calculation of lease liabilities if we are reasonably certain at lease commencement the renewal option will be exercised. Lease liabilities and their corresponding ROU assets are measured at the present value of the remaining lease payments, discounted at an appropriate incremental borrowing rate at lease commencement, or as of January 1, 2019, for our existing leases. Management uses judgment to estimate the appropriate incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. Certain adjustments to the ROU asset may be required for items such as initial direct lease costs, lease incentives, scheduled rent escalations and impairment charges if we determine the ROU asset is impaired. Operating lease expense is recognized on a straight-line basis over the lease term. We elected the post-transition practical expedient to not separate lease components from non-lease components for all existing lease classes. We also elected a policy of not recording leases on our condensed balance sheets when a lease has a term of one year or less. |
Recent Accounting Pronouncements | Recently Adopted Accounting Pronouncements Accounting Standards Update (ASU) 2018-18, Collaborative Arrangements: Clarifying the Interaction between Topic 808 and Topic 606 (ASU 2018-18) makes targeted improvements for collaborative arrangements by (1) clarifying that certain transactions between collaborative arrangement participants should be accounted for as revenue under the contract with customer guidance (Topic 606) when the collaborative arrangement participant is a customer, (2) adding unit of account guidance to assess whether the collaborative arrangement, or a part of the arrangement, is with a customer and (3) precluding a company from presenting transactions with collaborative arrangement participants that are not directly related to sales to third parties together with revenue from contracts with customers. Entities must apply the guidance retrospectively as of the date of their initial application of Topic 606 and should recognize the cumulative effect of initially applying the amendments as an adjustment to opening retained earnings as of the later of (1) the earliest annual period presented and (2) the annual period that includes the date of the entity’s initial application of Topic 606. ASU 2018-18 is effective for fiscal years beginning after December 15, 2019, including interim periods therein. Early adoption is permitted. We elected to early adopt this standard effective January 1, 2019 and have applied its guidance to our arrangement entered into in March 2019 with Nippon Shinyaku Co., Ltd. (See Note 4). No retrospective adjustment to our condensed consolidated financial statements was required as a result of our application of these amendments. In August 2018, the SEC adopted the final rule under SEC Release No. 33-10532, Disclosure Update and Simplification, amending certain disclosure requirements that were redundant, duplicative, overlapping, outdated or superseded. Additionally, the amendments expanded the disclosure requirements on the analysis of stockholders’ equity for interim financial statements. Under the amendments, a summary of changes in each caption of stockholders’ equity presented in the consolidated balance sheets must be provided in a note or separate statement, and we have provided this disclosure beginning with the first quarter of 2019. Leases In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) . Topic 842 establishes a right-of-use asset 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. We adopted Topic 842 effective January 1, 2019 using the modified retrospective approach and elected the package of practical expedients permitted under transition guidance. Consequently, prior period financial information and related disclosures have not been adjusted and will continue to be presented in accordance with the previous lease standard. In addition, we elected the package of transition provisions available for existing contracts, which allowed us to carryforward our historical assessments of (1) whether contracts are or contain leases, (2) lease classification and (3) initial direct lease costs for existing leases. We did not elect the practical expedient allowing the use-of-hindsight which would require us to reassess the lease term of our leases based on all facts and circumstances through the effective date and did not elect the practical expedient pertaining to land easements as this is not applicable to the current contract portfolio. The adoption of Topic 842 did not have a material impact on our condensed consolidated statements of operations and cash flows. The impact on the accompanying condensed consolidated balance sheet as of January 1, 2019 was as follows (in thousands): December 31, 2018 Adjustments Due to the January 1, 2019 Assets Operating lease right-of-use assets $ — $ 8,641 $ 8,641 Liabilities Other accrued liabilities $ 1,845 $ (363) $ 1,482 Current portion of operating lease liabilities — 1,058 1,058 Operating lease liabilities, net of current portion — 11,776 11,776 Other long-term liabilities 3,830 (3,830) — Total $ 5,675 $ 8,641 $ 14,316 Upon adoption on January 1, 2019, we recorded operating lease ROU assets and lease liabilities of $8.6 million and $12.8 million, respectively, with the difference between ROU assets and lease liabilities attributed to the reclassifications of deferred rent and lease incentive obligations, a cease-use liability and initial direct leasing costs as a component of ROU assets. Prior to January 1, 2019, we recognized related rent expense on a straight-line basis over the term of the lease. Incentives granted under our operating lease, including allowances for leasehold improvements and rent holidays, were recognized as reductions to rent expense on a straight-line basis over the term of the lease. Deferred rent consisted of the difference between rent expense recognized on a straight-line basis and cash rent payments. Subsequent to the adoption of Accounting Standards Update (ASU) 2016-02 and related amendments (collectively, Topic 842) on January 1, 2019, we determine whether the arrangement is or contains a lease at the inception of the arrangement and if such a lease is classified as a financing lease or operating lease at lease commencement. All of our leases are classified as operating leases. Leases with a term greater than one year are included in operating lease right-of-use assets (ROU asset), current portion of lease liabilities, and lease liabilities, net of current portion in our condensed consolidated balance sheet at September 30, 2019. If a lease contains an option to renew, the renewal option is included in the calculation of lease liabilities if we are reasonably certain at lease commencement the renewal option will be exercised. Lease liabilities and their corresponding ROU assets are measured at the present value of the remaining lease payments, discounted at an appropriate incremental borrowing rate at lease commencement, or as of January 1, 2019, for our existing leases. Management uses judgment to estimate the appropriate incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. Certain adjustments to the ROU asset may be required for items such as initial direct lease costs, lease incentives, scheduled rent escalations and impairment charges if we determine the ROU asset is impaired. Operating lease expense is recognized on a straight-line basis over the lease term. We elected the post-transition practical expedient to not separate lease components from non-lease components for all existing lease classes. We also elected a policy of not recording leases on our condensed balance sheets when a lease has a term of one year or less. Recent Accounting Pronouncements Not Yet Effective ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments 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 for us on January 1, 2020 with early adoption permitted. We expect to adopt this ASU on January 1, 2020 and are currently evaluating the effect that the updated standard will have on our consolidated financial statements and related disclosures. 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. We are currently evaluating the timing and effect that the updated standard will have on our 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, Fair Value Measurement , 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. We are currently evaluating the timing and effect that the updated standard will have on our consolidated financial statements and related disclosures. |
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. |
Stock-based Compensation | We have issued stock-based awards from various equity incentive and stock purchase plans, as more fully described in the consolidated financial statements and related notes included in our 2018 Annual Report on Form 10-K. At December 31, 2018, 1,550,351 shares were available for grant under our 2010 Equity Incentive Award Plan (2010 Plan). Pursuant to its evergreen provision, the number of shares reserved for issuance under the 2010 Plan automatically increases on January 1 of each year, commencing on January 1, 2013, and on each January 1 through and including January 1, 2020, in an amount equal to 4% of the total number of shares of common stock outstanding on December 31 of the preceding year, or a lesser number of shares as determined by our board of directors. On January 1, 2019, the increase in shares reserved for issuance pursuant to the evergreen provision was limited to 589,619 shares as the 2010 Plan’s maximum 7,500,000 shares reserved for issuance was reached. |
Net Loss per Share | Basic net loss from continuing operations per share is calculated by dividing net loss from continuing operations by the weighted average number of shares outstanding for the period. Diluted net loss from continuing operations per share is calculated by dividing net loss from continuing operations by the weighted average number of shares of common stock and potential dilutive common stock equivalents outstanding during the period if the effect is dilutive. Our |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Impact of Adopting Topic 842 on Condensed Consolidated Balance Sheets | The impact on the accompanying condensed consolidated balance sheet as of January 1, 2019 was as follows (in thousands): December 31, 2018 Adjustments Due to the January 1, 2019 Assets Operating lease right-of-use assets $ — $ 8,641 $ 8,641 Liabilities Other accrued liabilities $ 1,845 $ (363) $ 1,482 Current portion of operating lease liabilities — 1,058 1,058 Operating lease liabilities, net of current portion — 11,776 11,776 Other long-term liabilities 3,830 (3,830) — Total $ 5,675 $ 8,641 $ 14,316 |
Cash, Cash Equivalents and Ma_2
Cash, Cash Equivalents and Marketable Securities (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Cash and Cash Equivalents [Abstract] | |
Amortized Cost and Fair Value of Cash, Cash Equivalents and Marketable Securities | The following tables summarize the amortized cost and the estimated fair value of our cash, cash equivalents and marketable securities as of September 30, 2019 and December 31, 2018 (in thousands): September 30, 2019 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Current assets: Cash $ 23,568 $ — $ — $ 23,568 Cash equivalents: Commercial paper 996 — — 996 Money market funds 8,535 — — 8,535 Total cash equivalents 9,531 — — 9,531 Total cash and cash equivalents 33,099 — — 33,099 Marketable securities: Commercial paper 86,936 — — 86,936 Corporate debt securities 81,835 425 (3) 82,257 Certificate of deposits 52,672 — — 52,672 Total marketable securities 221,443 425 (3) 221,865 Total cash, cash equivalents and marketable securities $ 254,542 $ 425 $ (3) $ 254,964 December 31, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Current assets: Cash $ 5,222 $ — $ — $ 5,222 Cash equivalents: 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 Certificate of deposits 128,647 — — 128,647 U.S. Treasury securities 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 Value of Marketable Securities | The following table summarizes the cost and fair value of marketable securities based on stated effective maturities as of September 30, 2019 (in thousands): Amortized Cost Fair Value Due within one year $ 168,397 $ 168,490 Due between one and two years 53,046 53,375 Total $ 221,443 $ 221,865 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Assets Measured at Fair Value on Recurring Basis | The following tables summarize assets and liabilities recognized or disclosed at fair value on a recurring basis as of September 30, 2019 and December 31, 2018 (in thousands): September 30, 2019 Level 1 Level 2 Level 3 Total Assets: Cash equivalents: Commercial paper $ — $ 996 $ — $ 996 Money market funds 8,535 — — 8,535 Marketable securities: Commercial paper — 86,936 — 86,936 Corporate debt securities — 82,257 — 82,257 Certificate of deposits — 52,672 — 52,672 Total assets (1) $ 8,535 $ 222,861 $ — $ 231,396 Liabilities: Common stock warrant liabilities (2) $ — $ — $ 102 $ 102 Contingent consideration liabilities (3) — — 70,900 70,900 Total liabilities $ — $ — $ 71,002 $ 71,002 December 31, 2018 Level 1 Level 2 Level 3 Total 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 Certificate of deposits — 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 (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. We estimated the fair value of the warrant liabilities using the Black-Scholes valuation model. As of September 30, 2019 and December 31, 2018, common stock warrant liabilities relate to 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 our common stock at an exercise price of $72.00 per share and expires in July 2021. |
Liabilities Measured at Fair Value on Recurring Basis | The following tables summarize assets and liabilities recognized or disclosed at fair value on a recurring basis as of September 30, 2019 and December 31, 2018 (in thousands): September 30, 2019 Level 1 Level 2 Level 3 Total Assets: Cash equivalents: Commercial paper $ — $ 996 $ — $ 996 Money market funds 8,535 — — 8,535 Marketable securities: Commercial paper — 86,936 — 86,936 Corporate debt securities — 82,257 — 82,257 Certificate of deposits — 52,672 — 52,672 Total assets (1) $ 8,535 $ 222,861 $ — $ 231,396 Liabilities: Common stock warrant liabilities (2) $ — $ — $ 102 $ 102 Contingent consideration liabilities (3) — — 70,900 70,900 Total liabilities $ — $ — $ 71,002 $ 71,002 December 31, 2018 Level 1 Level 2 Level 3 Total 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 Certificate of deposits — 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 (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. We estimated the fair value of the warrant liabilities using the Black-Scholes valuation model. As of September 30, 2019 and December 31, 2018, common stock warrant liabilities relate to 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 our common stock at an exercise price of $72.00 per share and expires in July 2021. |
Reconciliation of Liabilities Measured at Fair Value Using Significant Unobservable Inputs (Level 3) | The following tables provide a reconciliation of liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and nine months ended September 30, 2019 and 2018 (in thousands): Contingent Consideration Liabilities Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Balance at beginning of period $ 70,500 $ 74,400 $ 78,200 $ 76,900 Change in fair value 400 5,700 2,700 3,200 Settlements — — (10,000) — Balance at end of period $ 70,900 $ 80,100 $ 70,900 $ 80,100 Common Stock Warrant Liabilities Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Balance at beginning of period $ 501 $ 543 $ 343 $ 512 Change in fair value (399) 64 (241) 95 Balance at end of period $ 102 $ 607 $ 102 $ 607 |
Accrued and Other Current Lia_2
Accrued and Other Current Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Payables and Accruals [Abstract] | |
Details of Accrued and Other Current Liabilities | The following table provides details of accrued and other current liabilities (in thousands): September 30, 2019 December 31, 2018 Accrued clinical trial expenses $ 11,100 $ 10,621 Accrued compensation 6,219 5,277 Other accrued liabilities 5,704 1,845 Common stock warrant liabilities 102 343 Total accrued and other current liabilities $ 23,125 $ 18,086 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Components of Lease Costs | The components of lease costs, which were included in our condensed consolidated statements of operations, were as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, Lease costs Operating lease cost $ 510 $ 1,505 Short-term lease cost (1) 142 690 Sublease income (145) (435) Total $ 507 $ 1,760 (1) Short-term lease cost included $0.2 million related to a short-term lease that expired in March 2019. |
Maturities of Operating Lease Liabilities | Maturities of operating lease liabilities as of September 30, 2019 and lease commitments under noncancellable operating leases as of December 31, 2018 were as follows (in thousands): September 30, 2019 December 31, 2018 2019 (remaining 3 months and 12 months, respectively) $ 632 $ 1,777 2020 1,986 1,788 2021 1,957 1,839 2022 1,894 1,894 2023 1,951 1,951 Thereafter 7,111 7,296 Total lease payments 15,531 $ 16,545 Less imputed interest (3,005) Total operating lease liabilities $ 12,526 September 30, 2019 Current portion of operating lease liabilities $ 1,431 Operating lease liabilities, net of current portion 11,095 Total lease liabilities $ 12,526 |
Common Stock and Stock-Based _2
Common Stock and Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Summary of Stock Option Activity | The following is a summary of stock option activity for the nine months ended September 30, 2019 (in thousands, except per share data): Shares Weighted- Average Exercise Price per Share Outstanding at December 31, 2018 3,744 $ 20.69 Granted 994 49.94 Exercised (544) 14.82 Canceled (81) 34.46 Outstanding at September 30, 2019 4,113 $ 28.26 |
Schedule of Restricted Stock Unit Activity | The following is a summary of restricted stock unit activity for the nine months ended September 30, 2019 (in thousands, except per share data): Shares Weighted- Average Fair Value per Share at Grant Date Outstanding at December 31, 2018 289 $ 25.56 Granted 169 52.56 Vested (37) 43.10 Canceled (42) 32.20 Outstanding at September 30, 2019 379 $ 35.13 |
Stock-Based Compensation Expense | The following table summarizes the components of total stock-based compensation expense included in the condensed consolidated statements of operations (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Research and development $ 2,012 $ 3,275 $ 5,521 $ 5,018 Selling, general and administrative 3,423 3,706 9,495 6,934 Compensation expense related to acquired IPR&D 4,927 — 4,927 — Total $ 10,362 $ 6,981 $ 19,943 $ 11,952 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Net Loss Per Share | A reconciliation of the numerators and denominators used in computing net loss from continuing operations per share is as follows (in thousands, except per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Numerator: Net loss from continuing operations $ (290,478) $ (42,264) $ (363,443) $ (101,283) Denominator: Shares used in per share calculation 43,029 39,242 42,577 36,485 Net loss from continuing operations per share, basic and diluted $ (6.75) $ (1.08) $ (8.54) $ (2.78) |
Schedule of Antidilutive Securities Excluded from Computation of Diluted Net Loss per Share | The following table presents the potential shares of common stock outstanding that were excluded from the computation of diluted net loss from continuing operations per share for the periods presented because including them would have been anti-dilutive (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Shares subject to outstanding stock options 4,172 3,957 4,040 3,752 Shares subject to outstanding restricted stock units 402 303 371 287 Shares subject to outstanding warrants to purchase common stock 28 28 28 35 Total 4,602 4,288 4,439 4,074 |
Organization and Basis of Pre_2
Organization and Basis of Presentation - Narrative (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019USD ($)segment | Dec. 31, 2018USD ($) | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Number of operating segments | segment | 1 | |
Accumulated deficit | $ | $ 1,059,397 | $ 695,954 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Impact of Adopting Topic 842 on Condensed Consolidated Balance Sheets (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Assets | |||
Operating lease right-of-use assets | $ 8,134 | $ 8,641 | |
Current liabilities: | |||
Other accrued liabilities | 5,704 | 1,482 | $ 1,845 |
Current portion of operating lease liabilities | 1,431 | 1,058 | |
Operating lease liabilities, net of current portion | 11,095 | 11,776 | |
Other long-term liabilities | $ 0 | 0 | 3,830 |
Total | 14,316 | $ 5,675 | |
Topic 842 | |||
Assets | |||
Operating lease right-of-use assets | 8,641 | ||
Current liabilities: | |||
Other accrued liabilities | (363) | ||
Current portion of operating lease liabilities | 1,058 | ||
Operating lease liabilities, net of current portion | 11,776 | ||
Other long-term liabilities | (3,830) | ||
Total | $ 8,641 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Jan. 01, 2019 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating lease right-of-use assets | $ 8,134 | $ 8,641 |
Operating lease liabilities | $ 12,526 | |
Topic 842 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating lease right-of-use assets | 8,641 | |
Operating lease liabilities | $ 12,800 |
Modis Asset Acquisition and A_2
Modis Asset Acquisition and Assumption of License Agreements (Details) $ in Thousands | Sep. 26, 2019USD ($) | Sep. 06, 2019USD ($)employeeshares | Sep. 30, 2019USD ($)shares | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Dec. 31, 2018USD ($) |
Asset Acquisition [Line Items] | ||||||
Cash paid for asset acquisition | $ 175,732 | $ 0 | ||||
Fair value of shares issued | $ 68,124 | |||||
Acquisition holdback amount placed in escrow | $ 25,000 | $ 25,000 | $ 0 | |||
Modis Acquisition | ||||||
Asset Acquisition [Line Items] | ||||||
Consideration paid | $ 246,500 | |||||
Cash paid for asset acquisition | 175,500 | |||||
Transaction costs | 3,500 | |||||
Net working capital adjustment receivable | 600 | |||||
Acquisition holdback amount placed in escrow | $ 25,000 | |||||
Royalty (percent) | 5.00% | |||||
Fair value assigned to acquired MT1621 | $ 244,500 | |||||
Assumed net liabilities | $ 2,800 | |||||
Number of former employees that continued employment with Zogenix | employee | 13 | |||||
Royalties payment period | 15 years | |||||
Modis Acquisition | FDA Approval in US | ||||||
Asset Acquisition [Line Items] | ||||||
Contingent consideration to be paid | $ 100,000 | |||||
Modis Acquisition | EMA Approval in Europe | ||||||
Asset Acquisition [Line Items] | ||||||
Contingent consideration to be paid | 50,000 | |||||
Modis Acquisition | Achievement of Regulatory Milestones | Columbia University | ||||||
Asset Acquisition [Line Items] | ||||||
Consideration payable upon achievement of milestones | $ 2,900 | |||||
Modis Acquisition | Certain commercial milestone events | ||||||
Asset Acquisition [Line Items] | ||||||
Consideration payable upon achievement of milestones | 10,000 | |||||
Modis Acquisition | Certain commercial milestone events | Columbia University | ||||||
Asset Acquisition [Line Items] | ||||||
Consideration payable upon achievement of milestones | $ 25,000 | |||||
Modis Acquisition | Research, development and regulatory milestones | ||||||
Asset Acquisition [Line Items] | ||||||
Consideration payable upon achievement of milestones | 2,700 | |||||
Modis Acquisition | Unvested awards | ||||||
Asset Acquisition [Line Items] | ||||||
Fair value of shares issued | $ 4,900 | |||||
Common Stock | ||||||
Asset Acquisition [Line Items] | ||||||
Shares issued (shares) | shares | 1,595,000 | |||||
Fair value of shares issued | $ 2 | |||||
Common Stock | Modis Acquisition | ||||||
Asset Acquisition [Line Items] | ||||||
Shares issued (shares) | shares | 1,595,025 | |||||
Fair value of shares issued | $ 68,100 |
Collaborative Arrangement (Deta
Collaborative Arrangement (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended | ||
Mar. 31, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | |
Disaggregation of Revenue [Line Items] | ||||||
Remaining amount to be billed in accordance with terms of agreement | $ 4,500,000 | $ 4,500,000 | $ 4,500,000 | |||
Collaboration revenue | 630,000 | $ 0 | 1,699,000 | $ 0 | ||
Contract liability | $ 13,800,000 | $ 13,800,000 | 13,800,000 | |||
Revenue recognized | $ 0 | |||||
Minimum | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Timing of consideration to be received | 3 years | 3 years | 3 years | |||
Maximum | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Timing of consideration to be received | 4 years | 4 years | 4 years | |||
Fixed Consideration | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Performance obligation at inception of arrangement | $ 20,000,000 | |||||
Portion of fixed consideration received | $ 15,500,000 | $ 15,500,000 | ||||
Payment term | 2 years | |||||
Variable Consideration | Achievement of Regulatory Milestones | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Amount that can be earned upon achievement of milestone | $ 66,000,000 | $ 66,000,000 | $ 66,000,000 | |||
Variable Consideration | Achievement of Net Sales Milestones | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Amount that can be earned upon achievement of net sales milestone | $ 42,500,000 | $ 42,500,000 | $ 42,500,000 |
Cash, Cash Equivalents and Ma_3
Cash, Cash Equivalents and Marketable Securities (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Cash and Cash Equivalents [Line Items] | |||||
Cash | $ 23,568,000 | $ 23,568,000 | $ 5,222,000 | ||
Total cash equivalents | 9,531,000 | 9,531,000 | |||
Total cash and cash equivalents | 33,099,000 | 33,099,000 | 68,454,000 | ||
Marketable securities, amortized cost | 221,443,000 | 221,443,000 | 445,730,000 | ||
Marketable securities, gross unrealized gains | 425,000 | 425,000 | 89,000 | ||
Marketable securities, gross unrealized losses | (3,000) | (3,000) | (86,000) | ||
Marketable securities, estimated fair value | 221,865,000 | 221,865,000 | 445,733,000 | ||
Total cash, cash equivalents and marketable securities, amortized cost | 254,542,000 | 254,542,000 | 514,184,000 | ||
Total cash, cash equivalents and marketable securities | 254,964,000 | 254,964,000 | 514,187,000 | ||
Amortized Cost | |||||
Due within one year, amortized cost | 168,397,000 | 168,397,000 | |||
Due between one and two years, amortized cost | 53,046,000 | 53,046,000 | |||
Marketable securities, amortized cost | 221,443,000 | 221,443,000 | |||
Fair Value | |||||
Due within one year, estimated fair value | 168,490,000 | 168,490,000 | |||
Due between one and two years, estimated fair value | 53,375,000 | 53,375,000 | |||
Marketable securities, estimated fair value | 221,865,000 | 221,865,000 | |||
Realized gain on sale of marketable securities | 300,000 | $ 0 | 322,000 | $ 0 | |
Commercial paper | |||||
Cash and Cash Equivalents [Line Items] | |||||
Total cash equivalents | 996,000 | 996,000 | |||
Marketable securities, amortized cost | 86,936,000 | 86,936,000 | 152,940,000 | ||
Marketable securities, gross unrealized gains | 0 | 0 | 0 | ||
Marketable securities, gross unrealized losses | 0 | 0 | 0 | ||
Marketable securities, estimated fair value | 86,936,000 | 86,936,000 | 152,940,000 | ||
Money market funds | |||||
Cash and Cash Equivalents [Line Items] | |||||
Total cash equivalents | 8,535,000 | 8,535,000 | 63,232,000 | ||
Corporate debt securities | |||||
Cash and Cash Equivalents [Line Items] | |||||
Marketable securities, amortized cost | 81,835,000 | 81,835,000 | 60,622,000 | ||
Marketable securities, gross unrealized gains | 425,000 | 425,000 | 58,000 | ||
Marketable securities, gross unrealized losses | (3,000) | (3,000) | (75,000) | ||
Marketable securities, estimated fair value | 82,257,000 | 82,257,000 | 60,605,000 | ||
Certificate of deposits | |||||
Cash and Cash Equivalents [Line Items] | |||||
Marketable securities, amortized cost | 52,672,000 | 52,672,000 | 128,647,000 | ||
Marketable securities, gross unrealized gains | 0 | 0 | 0 | ||
Marketable securities, gross unrealized losses | 0 | 0 | 0 | ||
Marketable securities, estimated fair value | $ 52,672,000 | $ 52,672,000 | 128,647,000 | ||
U.S. Treasury securities | |||||
Cash and Cash Equivalents [Line Items] | |||||
Marketable securities, amortized cost | 103,521,000 | ||||
Marketable securities, gross unrealized gains | 31,000 | ||||
Marketable securities, gross unrealized losses | (11,000) | ||||
Marketable securities, estimated fair value | $ 103,541,000 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 9 Months Ended | ||
Mar. 31, 2019 | Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2014 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Short-term fixed income securities | $ 221,865 | $ 445,733 | ||
Total assets | 231,396 | 508,965 | ||
Common stock warrant liabilities | 102 | 343 | ||
Total liabilities | $ 71,002 | 78,543 | ||
Shares of common stock exercisable through warrants | 28,125 | |||
Warrants exercise price per share (usd per share) | $ 72 | |||
Current portion of contingent consideration | $ 35,200 | 32,300 | ||
Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total assets | 8,535 | 63,232 | ||
Total liabilities | 0 | 0 | ||
Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total assets | 222,861 | 445,733 | ||
Total liabilities | 0 | 0 | ||
Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total assets | 0 | 0 | ||
Total liabilities | 71,002 | 78,543 | ||
Common stock warrant liabilities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Common stock warrant liabilities | 102 | 343 | ||
Common stock warrant liabilities | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Common stock warrant liabilities | 0 | 0 | ||
Common stock warrant liabilities | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Common stock warrant liabilities | 0 | 0 | ||
Common stock warrant liabilities | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Common stock warrant liabilities | 102 | 343 | ||
Contingent consideration liabilities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Contingent consideration liabilities | 70,900 | 78,200 | ||
Total contingent consideration | 70,900 | 78,200 | ||
Contingent consideration liabilities | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Contingent consideration liabilities | 0 | 0 | ||
Total contingent consideration | 0 | 0 | ||
Contingent consideration liabilities | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Contingent consideration liabilities | 0 | 0 | ||
Total contingent consideration | 0 | 0 | ||
Contingent consideration liabilities | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Contingent consideration liabilities | 70,900 | 78,200 | ||
Total contingent consideration | 70,900 | 78,200 | ||
Money market funds | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Cash Equivalents | 8,535 | 63,232 | ||
Money market funds | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Cash Equivalents | 8,535 | 63,232 | ||
Money market funds | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Cash Equivalents | 0 | 0 | ||
Money market funds | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Cash Equivalents | 0 | 0 | ||
Commercial paper | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Cash Equivalents | 996 | |||
Short-term fixed income securities | 86,936 | 152,940 | ||
Commercial paper | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Cash Equivalents | 0 | |||
Short-term fixed income securities | 0 | 0 | ||
Commercial paper | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Cash Equivalents | 996 | |||
Short-term fixed income securities | 86,936 | 152,940 | ||
Commercial paper | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Cash Equivalents | 0 | |||
Short-term fixed income securities | 0 | 0 | ||
Corporate debt securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Short-term fixed income securities | 82,257 | 60,605 | ||
Corporate debt securities | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Short-term fixed income securities | 0 | 0 | ||
Corporate debt securities | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Short-term fixed income securities | 82,257 | 60,605 | ||
Corporate debt securities | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Short-term fixed income securities | 0 | 0 | ||
Certificate of deposits | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Short-term fixed income securities | 52,672 | 128,647 | ||
Certificate of deposits | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Short-term fixed income securities | 0 | 0 | ||
Certificate of deposits | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Short-term fixed income securities | 52,672 | 128,647 | ||
Certificate of deposits | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Short-term fixed income securities | 0 | 0 | ||
U.S. Treasury securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Short-term fixed income securities | 103,541 | |||
U.S. Treasury securities | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Short-term fixed income securities | 0 | |||
U.S. Treasury securities | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Short-term fixed income securities | 103,541 | |||
U.S. Treasury securities | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Short-term fixed income securities | $ 0 | |||
ZX008 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Contingent consideration liabilities | 70,900 | |||
Potential contingent consideration payment, maximum | $ 95,000 | |||
Contingent consideration paid | $ 10,000 | |||
Total contingent consideration | 70,900 | |||
Current portion of contingent consideration | $ 35,200 |
Fair Value Measurements - Recon
Fair Value Measurements - Reconciliation of Liabilities Measured at Fair Value Using Significant Unobservable Inputs (Details) - Level 3 - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Contingent consideration liabilities | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance at beginning of period | $ 70,500 | $ 74,400 | $ 78,200 | $ 76,900 |
Change in fair value | 400 | 5,700 | 2,700 | 3,200 |
Settlements | 0 | 0 | (10,000) | 0 |
Balance at end of period | 70,900 | 80,100 | 70,900 | 80,100 |
Common stock warrant liabilities | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance at beginning of period | 501 | 543 | 343 | 512 |
Change in fair value | (399) | 64 | (241) | 95 |
Balance at end of period | $ 102 | $ 607 | $ 102 | $ 607 |
Accrued and Other Current Lia_3
Accrued and Other Current Liabilities - Details of Accrued and Other Current Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Payables and Accruals [Abstract] | |||
Accrued clinical trial expenses | $ 11,100 | $ 10,621 | |
Accrued compensation | 6,219 | 5,277 | |
Other accrued liabilities | 5,704 | $ 1,482 | 1,845 |
Common stock warrant liabilities | 102 | 343 | |
Accrued Liabilities and Other Current Liabilities | $ 23,125 | $ 18,086 |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019USD ($) | Sep. 30, 2019USD ($) | |
Lessee, Lease, Description [Line Items] | ||
Short-term lease cost | $ 142 | $ 690 |
Cash paid for amounts included in measurement of lease liabilities | $ 1,200 | |
Weighted average remaining lease term | 7 years 3 months 18 days | 7 years 3 months 18 days |
Weighted-average discount rate (percent) | 6.00% | 6.00% |
Emeryville lease | ||
Lessee, Lease, Description [Line Items] | ||
Length of each lease renewal | 5 years | 5 years |
Short-term Lease Terminated in March 2019 | ||
Lessee, Lease, Description [Line Items] | ||
Short-term lease cost | $ 200 | $ 200 |
Leases - Information Related to
Leases - Information Related to Operating Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Lease, Cost [Abstract] | ||
Operating lease cost | $ 510 | $ 1,505 |
Short-term lease cost | 142 | 690 |
Sublease income | (145) | (435) |
Total | $ 507 | $ 1,760 |
Leases - Maturities of Lease Li
Leases - Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Operating Lease Liabilities, Payments Due [Abstract] | |||
2019 (Remaining 3 months) | $ 632 | ||
2020 | 1,986 | ||
2021 | 1,957 | ||
2022 | 1,894 | ||
2023 | 1,951 | ||
Thereafter | 7,111 | ||
Total lease payments | 15,531 | ||
Less imputed interest | (3,005) | ||
Total operating lease liabilities | 12,526 | ||
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |||
2019 (Remaining 12 months) | $ 1,777 | ||
2020 | 1,788 | ||
2021 | 1,839 | ||
2022 | 1,894 | ||
2023 | 1,951 | ||
Thereafter | 7,296 | ||
Total lease payment due | $ 16,545 | ||
Assets and Liabilities, Lessee [Abstract] | |||
Current portion of operating lease liabilities | 1,431 | $ 1,058 | |
Operating lease liabilities, net of current portion | 11,095 | $ 11,776 | |
Total operating lease liabilities | $ 12,526 |
Common Stock and Stock-Based _3
Common Stock and Stock-Based Compensation - Additional Information (Details) - shares | 9 Months Ended | ||||
Sep. 30, 2019 | May 31, 2019 | Apr. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Maximum number of common stock that may be issued (shares) | 100,000,000 | 50,000,000 | |||
2010 Restated Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Maximum number of common stock that may be issued (shares) | 11,500,000 | 7,500,000 | 7,500,000 | ||
Shares available for grant (shares) | 5,218,040 | 589,619 | 1,550,351 | ||
Annual increment to maximum shares authorized as percentage of shares outstanding (percent) | 4.00% |
Common Stock and Stock-Based _4
Common Stock and Stock-Based Compensation - Options Activity (Details) shares in Thousands | 9 Months Ended |
Sep. 30, 2019$ / sharesshares | |
Shares (in thousands) | |
Options outstanding, beginning of period (in shares) | shares | 3,744 |
Granted (in shares) | shares | 994 |
Exercised (in shares) | shares | (544) |
Canceled (in shares) | shares | (81) |
Options outstanding, end of period (in shares) | shares | 4,113 |
Weighted- Average Exercise Price per Share | |
Outstanding weighted average exercise price, beginning balance (in usd per share) | $ / shares | $ 20.69 |
Granted weighted average exercise price (in usd per share | $ / shares | 49.94 |
Exercised weighted average exercise price (in usd per share | $ / shares | 14.82 |
Canceled weighted average exercise price (in usd per share | $ / shares | 34.46 |
Outstanding weighted average exercise price, ending balance (in usd per share | $ / shares | $ 28.26 |
Common Stock and Stock-Based _5
Common Stock and Stock-Based Compensation - Restricted Stock Unit Activity (Details) - Restricted stock units shares in Thousands | 9 Months Ended |
Sep. 30, 2019$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Outstanding at beginning of period (in shares) | shares | 289 |
Granted (in shares) | shares | 169 |
Vested (in shares) | shares | (37) |
Canceled (in shares) | shares | (42) |
Outstanding at end of period (in shares) | shares | 379 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |
Nonvested at beginning of period - Weighted average fair value per share at grant date (in usd per share) | $ / shares | $ 25.56 |
Granted - Weighted average fair value per share at grant date (in usd per share) | $ / shares | 52.56 |
Vested - Weighted average fair value per share at grant date (in usd per share) | $ / shares | 43.10 |
Canceled - Weighted average fair value per share at grant date (in usd per share) | $ / shares | 32.20 |
Nonvested at end of period - Weighted average fair value per share at grant date (in usd per share) | $ / shares | $ 35.13 |
Common Stock and Stock-Based _6
Common Stock and Stock-Based Compensation - Stock-Based Compensation Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | $ 10,362 | $ 6,981 | $ 19,943 | $ 11,952 |
Research and development | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | 2,012 | 3,275 | 5,521 | 5,018 |
Selling, general and administrative | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | 3,423 | 3,706 | 9,495 | 6,934 |
Compensation expense related to acquired IPR&D | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | $ 4,927 | $ 0 | $ 4,927 | $ 0 |
Net Loss Per Share - Reconcilia
Net Loss Per Share - Reconciliation of Numerator and Denominators in Computing Net Loss per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Earnings Per Share [Abstract] | ||||
Net loss from continuing operations | $ (290,478) | $ (42,264) | $ (363,443) | $ (101,283) |
Shares used in per share calculation (in shares) | 43,029 | 39,242 | 42,577 | 36,485 |
Net loss from continuing operations per share, basic and diluted (in dollars per share) | $ (6.75) | $ (1.08) | $ (8.54) | $ (2.78) |
Net Loss Per Share - Antidiluti
Net Loss Per Share - Antidilutive Securities (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from computation of earnings per share amount | 4,602 | 4,288 | 4,439 | 4,074 |
Shares subject to outstanding stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from computation of earnings per share amount | 4,172 | 3,957 | 4,040 | 3,752 |
Shares subject to outstanding restricted stock units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from computation of earnings per share amount | 402 | 303 | 371 | 287 |
Shares subject to outstanding warrants to purchase common stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from computation of earnings per share amount | 28 | 28 | 28 | 35 |
United Kingdom (U.K.) Researc_2
United Kingdom (U.K.) Research and Development Incentives (Details) $ in Millions | Dec. 31, 2018USD ($) |
Other Income and Expenses [Abstract] | |
Claim for refundable cash credit | $ 7.1 |