Kubota Pharmaceutical (KBBTF) 10-Q 15 May 14 2014 Q1 Quarterly report Financial data

DEI_Document

DEI Document	3 Months Ended
	Mar. 31, 2014	8-May-14
Document Information [Abstract]	'	'
Entity Registrant Name	'ACUCELA INC.	'
Entity Central Index Key	'0001400482	'
Current Fiscal Year End Date	'--12-31	'
Entity Filer Category	'Non-accelerated Filer	'
Document Type	'10-Q	'
Document Period End Date	31-Mar-14	'
Document Fiscal Year Focus	'2014	'
Document Fiscal Period Focus	'Q1	'
Amendment Flag	'false	'
Entity Common Stock, Shares Outstanding	'	35,640,996

Balance_Sheets

Balance Sheets (USD $)	Mar. 31, 2014	Dec. 31, 2013
In Thousands, unless otherwise specified
Current assets	'	'
Cash and cash equivalents	$68,821	$13,994
Investments	55,359	14,947
Accounts receivable from collaborations	15,253	10,262
Deferred tax asset	1,116	1,114
Prepaid expenses and other current assets	1,781	1,964
Total current assets	142,330	42,281
Property and equipment, net	984	1,112
Long-term investments	48,531	3,478
Long-term deferred tax asset	1,195	1,280
Deferred offering costs	0	5,548
Other assets	344	349
Total assets	193,384	54,048
Current liabilities	'	'
Current maturities of contingently convertible debt, related party	0	12,000
Accounts payable	1,314	754
Accrued liabilities	5,290	6,579
Accrued compensation	1,211	3,269
Deferred rent and lease incentives	245	267
Total current liabilities	8,060	22,869
Commitments	'	'
Long-term deferred rent, lease incentives, and others	7	55
Total long-term liabilities	7	55
Shareholders' equity	'	'
Common Stock, Value, Outstanding	185,976	3,654
Additional Paid in Capital	2,862	2,728
Accumulated Other Comprehensive Income (Loss), Net of Tax	-115	-7
Retained Earnings (Accumulated Deficit)	-3,406	-3,460
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	185,317	31,124
Liabilities and Equity	$193,384	$54,048
Series A Convertible Preferred Stock	'	'
Shareholders' equity	'	'
Preferred Stock, No Par Value	$0	$2,051
Series B Convertible Preferred Stock	'	'
Shareholders' equity	'	'
Preferred Stock, No Par Value	$0	$13,387
Series C Convertible Preferred Stock	'	'
Shareholders' equity	'	'
Preferred Stock, No Par Value	$0	$12,771

Balance_Sheets_Parenthetical

Balance Sheets (Parenthetical) (USD $)	Mar. 31, 2014	Dec. 31, 2013
In Thousands, except Share data, unless otherwise specified
Class of Stock [Line Items]	'	'
Common Stock, Par or Stated Value Per Share	$0	$0
Common stock, shares authorized	100,000,000	60,000,000
Common Stock, Shares, Issued	35,640,000	11,971,000
Common Stock, Shares, Outstanding	35,640,000	11,971,000
Series A Convertible Preferred Stock	'	'
Class of Stock [Line Items]	'	'
Preferred Stock, Par or Stated Value Per Share	$0	$0
Preferred Stock, Shares Authorized	0	2,734,000
Preferred Stock, Shares Issued	0	2,734,000
Preferred Stock, Shares Outstanding	0	2,734,000
Preferred Stock, Liquidation Preference, Value	'	$2,051
Series B Convertible Preferred Stock	'	'
Class of Stock [Line Items]	'	'
Preferred Stock, Par or Stated Value Per Share	$0	$0
Preferred Stock, Shares Authorized	0	17,900,000
Preferred Stock, Shares Issued	0	17,900,000
Preferred Stock, Shares Outstanding	0	17,900,000
Preferred Stock, Liquidation Preference, Value	'	13,425
Series C Convertible Preferred Stock	'	'
Class of Stock [Line Items]	'	'
Preferred Stock, Par or Stated Value Per Share	$0	$0
Preferred Stock, Shares Authorized	0	31,818,000
Preferred Stock, Shares Issued	0	11,807,000
Preferred Stock, Shares Outstanding	0	11,807,000
Preferred Stock, Liquidation Preference, Value	'	$12,988

Statements_of_Income

Statements of Income (USD $)	3 Months Ended
In Thousands, except Per Share data, unless otherwise specified	Mar. 31, 2014	Mar. 31, 2013
Income Statement [Abstract]	'	'
Revenues from collaborations	$10,546	$15,980
Expenses	'	'
Research and development	7,970	8,128
General and administrative	2,361	2,132
Total expenses	10,331	10,260
Income from operations	215	5,720
Other income (expense), net:	'	'
Interest income	44	18
Interest expense	-13	-30
Other expense, net	-4	-4
Total other income (expense), net	27	-16
Income before income tax	242	5,704
Income tax expense	-188	-1,993
Net income	54	3,711
Net income attributable to participating securities	0	2,712
Net income attributable to common shareholders	$54	$999
Earnings Per Share [Abstract]	'	'
Net income per share, Basic	$0	$0.08
Net income per share, Diluted	$0	$0.08
Weighted average shares, Basic	23,799	11,944
Weighted average shares, Diluted	24,159	12,198

Statements_of_Comprehensive_Lo

Statements of Comprehensive (Loss) Income Statement (USD $)	3 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2014	Mar. 31, 2013
Statement of Comprehensive Income [Abstract]	'	'
Net Income	$54	$3,711
Other comprehensive (loss) income	'	'
Net unrealized loss on securities, net of tax	-108	-2
Comprehensive (loss) income	($54)	$3,709

Statements_of_Comprehensive_Lo1

Statements of Comprehensive (Loss) Income (Parenthetical) (Details) (USD $)	3 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2014	Mar. 31, 2013
Statement of Comprehensive Income [Abstract]	'	'
Net unrealized loss on securities, tax	$58	$0

Statements_of_Cash_Flows

Statements of Cash Flows (USD $)	3 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2014	Mar. 31, 2013
Cash flows from operating activities	'	'
Net Income	$54	$3,711
Adjustments to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities [Abstract]	'	'
Depreciation and amortization	128	123
Stock-based compensation	134	172
Amortization of premium/discount on marketable securities	118	38
Deferred taxes	143	1,280
Increase (Decrease) in Other Operating Assets and Liabilities, Net [Abstract]	'	'
Accounts receivable from collaborations	-4,991	1,181
Prepaid expenses and other assets	183	176
Accounts payable	560	785
Accrued liabilities	-1,289	470
Accrued compensation	-2,058	-1,264
Deferred rent and lease incentives	-70	-65
Deferred revenue from collaborations	0	4,730
Other assets	5	1
Net cash provided by (used in) operating activities	-7,083	11,338
Cash flows from investing activities	'	'
Purchases of marketable securities available for sale	-92,701	-4,413
Maturities of marketable securities available for sale	6,950	2,000
Additions to property and equipment	0	-327
Net cash used in investing activities	-85,751	-2,740
Cash flows from financing activities	'	'
Proceeds from issuance of common stock	149,206	217
Payments for deferred offering costs	-1,545	-247
Excess tax benefit from stock-based compensation	0	123
Net cash provided by financing activities	147,661	93
Cash and Cash Equivalents, Period Increase (Decrease) [Abstract]	'	'
Increase in cash and cash equivalents	54,827	8,691
Cash and cash equivalents - beginning of period	13,994	16,639
Cash and cash equivalents - end of period	68,821	25,330
Supplemental disclosure	'	'
Deferred offering costs	5,548	'
Conversion of preferred stock upon IPO	28,209	'
Conversion of contingently convertible debt, related party, upon IPO	$12,000	'

Description_of_Business

Description of Business	3 Months Ended
	Mar. 31, 2014
Organization, Consolidation and Presentation of Financial Statements [Abstract]	'
Description of Business	'
	Description of Business
	Acucela Inc. (“we,” “our” and “us”) is a clinical-stage biotechnology company that specializes in discovering and developing novel therapeutics to treat and slow the progression of sight-threatening ophthalmic diseases impacting millions of individuals worldwide. We focus on developing oral products based on our proprietary visual cycle modulation, or VCM, compounds to address a variety of retinal diseases, primarily age-related macular degeneration, or AMD, diabetic retinopathy, or DR, and diabetic macular edema, or DME, and potentially Stargardt disease, retinitis pigmentosa and retinopathy of prematurity. Our product candidates are designed to address the root cause of these diseases by reducing toxic by-products and oxidative damage as well as protecting the retina from light damage.

Significant_Accounting_Policie

Significant Accounting Policies	3 Months Ended
	Mar. 31, 2014
Accounting Policies [Abstract]	'
Significant Accounting Policies	'
	Significant Accounting Policies
	Unaudited Interim Financial Information
	We have prepared the accompanying financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial reporting. These financial statements are unaudited and, in our opinion, include all adjustments, consisting of normal recurring adjustments and accruals necessary for a fair presentation of our balance sheets, operating results, and cash flows for the periods presented. Operating results for the periods presented are not necessarily indicative of the results that may be expected for fiscal year 2014. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been omitted in accordance with the rules and regulations of the SEC. These financial statements should be read in conjunction with the audited financial statements and accompanying notes in Item 8 of Part II, “Financial Statements and Supplementary Data,” of our 2013 Annual Report on Form 10-K.
	Use of Estimates
	The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates.
	Segments
	We operate in one segment, pharmaceutical product development. All of our significant assets are located in the United States. During the three months ended March 31, 2014 and 2013, all of our revenue was generated in the United States.
	Initial Public Offering
	On February 13, 2014, we completed our initial public offering ("IPO") whereby 9,200,000 shares of common stock were sold to the public at a price of $17.72 per share. We received aggregate proceeds of $142.0 million from the initial public offering ("IPO"), net of underwriters’ discounts and commissions, and offering expenses. Upon the closing of the IPO, all shares of our outstanding convertible preferred stock automatically converted into 10,813,867 shares of common stock and $12.0 million of outstanding principal underlying a convertible note that we issued to SBI Holdings, Inc. in May 2006, automatically converted into 3,636,365 shares of common stock.
	Investments
	Investments are composed of commercial paper, corporate debt securities, certificates of deposit, and government-backed securities. Investments with original maturities longer than three months and remaining maturities of less than one year are classified as short-term investments. We consider our investments as available-for-sale. Available-for-sale securities are stated at fair value as of each balance sheet date based on market quotes, and unrealized gains and losses are reflected as a net amount under the caption of accumulated other comprehensive loss. Premiums or discounts arising at acquisition are amortized into earnings.
	We periodically evaluate whether declines in fair values of our investments below their cost are other-than-temporary. This evaluation consists of several qualitative and quantitative factors regarding the severity and duration of the unrealized loss, as well as whether it is more likely than not that we will hold the investment until recovery of its amortized cost basis. Realized gains and losses are calculated using the specific identification method. Realized gains and losses and declines in value judged to be other-than-temporary are recorded within the statements of income under the caption other income (expense).
	Concentration of Credit Risk
	All of our accounts receivable, as of March 31, 2014 and December 31, 2013, consist of amounts due from our collaborations with Otsuka Pharmaceutical Co. Ltd., or Otsuka, a global pharmaceutical company based in Japan. There was no allowance for doubtful accounts for the periods presented, as we believe all outstanding amounts will be paid based on our contractual arrangements with Otsuka and history of successful collections thereunder and collateral is not required. Revenue recognized for the three month periods ended March 31, 2014 and 2013 consist of amounts derived from our collaboration agreements with Otsuka.
	Deferred Offering Costs
	External costs we incurred directly attributable our public offering were deferred and recorded as noncurrent assets as of December 31, 2013, and were offset against the proceeds of the 2014 IPO.
	Income Taxes
	We recognize deferred tax assets and liabilities for the expected future tax consequences of events that have already been recognized in the financial statements or tax returns. Excess tax benefits associated with stock option exercises and other equity awards are credited to shareholders' equity. Deferred tax liabilities and assets are based on the difference between financial statement carrying amounts and the tax basis of assets and liabilities, operating loss, and tax credit carryforwards and are measured using enacted tax rates expected to be in effect in the years the differences or carryforwards are anticipated to be recovered or settled. A valuation allowance is established when we believe that it is more likely than not that benefits of the deferred tax assets will not be realized. The Company had no uncertain tax positions as of March 31, 2014 and December 31, 2013.

Cash_Cash_Equivalents_and_Inve

Cash, Cash Equivalents and Investments	3 Months Ended
	Mar. 31, 2014
Fair Value Disclosures [Abstract]	'
Cash, Cash Equivalents, and Investments	'
	Cash, Cash Equivalents and Investments
	Cash, cash equivalents and investments at March 31, 2014 and December 31, 2013 include all cash, money market funds, municipal bonds, corporate debt securities, commercial paper and certificates of deposit. We consider our investments as available-for-sale. Available-for-sale securities are stated at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value:
	Level 1—Quoted prices in active markets for identical assets and liabilities,
	Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities, and
	Level 3—Unobservable inputs in which there is little or no market data available, which requires us to develop our own assumptions.
	We measure the fair value of money market funds based on quoted prices in active markets for identical assets or liabilities. All other financial instruments were valued either based on recent trades of securities in inactive markets or based on quoted market prices of similar instruments and other significant inputs derived from or corroborated by observable market data. We did not hold any cash, cash equivalents, or investments categorized as Level 3 as of March 31, 2014 or December 31, 2013.
	Cash and cash equivalents and investments as of March 31, 2014 and December 31, 2013 consisted of the following (in thousands):
		March 31, 2014
		Amortized		Gross Unrealized					Fair
		Cost		Holding		Holding			Value
				Gains		Losses
	Cash	$	785	$	—	$	—		$	785
	Level 1 Securities:
	Money market funds	58,183		—		—			58,183
	Level 2 Securities:
	Commercial paper	38,793		4		(5		)	38,792
	Corporate debt securities	61,888		2		(157		)	61,733
	Municipal bonds	615		—		—			615
	Certificates of deposit	12,623		—		(20		)	12,603
		$	172,887	$	6	$	(182	)	$	172,711
		December 31, 2013
		Amortized		Gross Unrealized					Fair
		Cost		Holding		Holding			Value
				Gains		Losses
	Cash	$	868	$	—	$	—		$	868
	Level 1 Securities:
	Money market funds	12,501		—		—			12,501
	Level 2 Securities:
	Commercial paper	1,099		1		—			1,100
	Corporate debt securities	12,101		—		(4		)	12,097
	Municipal bonds	625		—		—			625
	Certificates of deposit	5,235		2		(9		)	5,228
		$	32,429	$	3	$	(13	)	$	32,419
	As of March 31, 2014, $42.9 million of corporate debt securities and $5.6 million of certificates of deposit mature in greater than one year, but less than two years. All other investment securities held at March 31, 2014 mature within 12 months.
	Unrealized losses as of March 31, 2014 are related to changes in interest rates and it is more likely than not that we will hold these securities until a recovery of the cost basis occurs. No investments have been in a loss position for more than 12 months.

Commitments

Commitments	3 Months Ended
	Mar. 31, 2014
Commitments and Contingencies Disclosure [Abstract]	'
Commitments	'
	Commitments
	Our contractual commitments, which consist of noncancelable operating leases for corporate office and laboratory space, have not changed from the commitments and obligations disclosed in our Annual Report on Form 10-K for the year ended December 31, 2013, outside of the normal course of business.

Net_Income_Per_Share

Net Income Per Share	3 Months Ended
	Mar. 31, 2014
Earnings Per Share [Abstract]	'
Net Income Per Share	'
	Net Income Per Share
	Net income per share attributable to common shareholders is presented in conformity with the two-class method required for participating securities for periods in which we have net income. Prior to the IPO, all series of convertible preferred stock were considered to be participating securities, as the holders were entitled to participate in any dividends prior and in preference to dividends declared or paid on the common stock. Undistributed earnings allocated to these participating securities were subtracted from net income in determining net income attributable to common shareholders.
	Immediately prior to the closing of our IPO, all outstanding shares of preferred stock were converted to common. We issued 9,200,000 shares of common stock in the IPO. In addition, 3,636,365 shares of common stock were issued upon the conversion of the contingently convertible debt held by a related party. As a result, as of March 31, 2014, common stock is our only outstanding class of capital stock.
	Basic net income per share is calculated by dividing net income attributable to common shareholders by the weighted average number of shares outstanding for the period. Diluted net income per share is calculated by dividing net income attributable to common shareholders by the weighted average number of shares of the common stock outstanding and other dilutive securities outstanding during the period. The potential dilutive shares of our common stock include the exercise of outstanding stock options that are dilutive.
	The following tables reconcile the numerator and denominator used to calculate diluted net income per share for the periods presented (in thousands):
		Three months ended March 31,
		2014		2013
	Numerator:
	Net income attributable to common shareholders	$	54	$	999
	Denominator:
	Weighted average shares outstanding—basic	23,799		11,944
	Dilutive effect of stock options	360		254
	Weighted average shares outstanding—diluted	24,159		12,198

Collaboration_and_License_Agre

Collaboration and License Agreements	3 Months Ended
	Mar. 31, 2014
Revenue Recognition [Abstract]	'
Collaboration and License Agreements	'
	Collaboration and License Agreements
	During the three months ended March 31, 2013, we received and recognized as revenue the $5.0 million milestone payment associated with the initiation of the Phase 2b/3 clinical trial related to emixustat. No development or net sales milestones were achieved during the three months ended March 31, 2014. During the three months ended March 31, 2014 and 2013, we recognized $10.5 million and $11.9 million, respectively, of revenues in performance of the emixustat agreement.
	During the three months ended March 31, 2014 and 2013, we recognized $0.0 million and $3.1 million, respectively, of revenue associated with rebamipide clinical development activities. The Rebamipide Agreement was terminated during the three months ended September 30, 2013. During the three months ended March 31, 2014 and 2013, we recognized $0.0 million and $0.9 million, respectively, of revenue associated with OPA-6566 for glaucoma clinical development activities.
	Continued Involvement of the CEO
	The Company’s collaboration arrangements with Otsuka require the continuing involvement of our CEO, Dr. Ryo Kubota. In the event of the departure of Dr. Kubota from the Company or a change in his role or responsibilities with the Company, the arrangements are subject to termination, at the option of Otsuka. For each agreement, this provision expires upon the approval of the NDA for the first indication in the United States.

Strategic_Restructuring

Strategic Restructuring	3 Months Ended
	Mar. 31, 2014
Restructuring and Related Activities [Abstract]	'
Strategic Restructuring	'
	Strategic Restructuring
	In October 2013, we announced a plan to reduce expenses, including a workforce reduction, as a result of the termination of the Rebamipide Agreement. The plan resulted in a reduction in force of approximately 35% of our total workforce, or approximately 30 employees, effective January 1, 2014.
	As a result of this workforce reduction, we recorded cumulative to date through March 31, 2014 $1.0 million in general and administrative expense, related to severance, other termination benefits, and outplacement services. Expense recorded in the three months ended March 31, 2014 was not material. The following table summarizes the utilization of the restructuring liability (in thousands):
		Severance and Other Termination Benefits
	Balance, December 31, 2013	$	966
	Cash payments	(808		)
	Adjustments	(8		)
	Balance, March 31, 2014	$	150

Shareholders_Equity

Shareholders' Equity	3 Months Ended
	Mar. 31, 2014
Statement of Stockholders' Equity [Abstract]	'
Shareholders' Equity	'
	Shareholders’ Equity
	Common Stock
	Our certificate of incorporation, as amended and restated, authorizes us to issue 100,000,000 shares of common stock without par value.
	In February 2014, upon the closing of our IPO, all shares of our outstanding convertible preferred stock automatically converted into 10,813,867 shares of common stock. We issued 9,200,000 shares of common stock for aggregate proceeds of $142.0 million from the IPO, net of underwriters’ discounts and commissions, and offering expenses. In addition, upon the closing of the IPO, $12,000,000 of outstanding principal underlying a convertible note that we issued to SBI Holdings, Inc. in May 2006 automatically converted into 3,636,365 shares of common stock, after an intermediate conversion into Series C preferred shares. The number of shares issued upon conversion was determined by dividing the principal of the note by $3.30.
	Changes in Accumulated Other Comprehensive Loss (in thousands):
		Three months ended March 31,
		2014			2013
	Beginning balance	$	(7	)	$	—
	Current period other comprehensive loss, net of tax	(108		)	(2		)
	Ending balance	$	(115	)	$	(2	)
	The changes in accumulated other comprehensive loss relate to unrealized holding gains and losses in available-for-sale securities.

RelatedParty_Transactions

Related-Party Transactions	3 Months Ended
	Mar. 31, 2014
Related Party Transactions [Abstract]	'
Related-Party Transactions	'
	Related-Party Transactions
	Peter Kresel, M.B.A., a member of the Board, received payment from us for consulting services and reimbursement of direct expenses. Mr. Kresel’s payments for consulting services and expense reimbursements were $30,000 and $36,000 during the three months ended March 31, 2014 and 2013, respectively.
	SBI Holdings, Inc. (a related party), one of our shareholders, was the holder for our contingently convertible debt. In connection with our IPO, the contingently convertible debt automatically converted into 3,636,365 shares of common stock (see Note 8).

Income_Taxes_Notes

Income Taxes (Notes)	3 Months Ended
	Mar. 31, 2014
Income Tax Disclosure [Abstract]	'
Income Taxes	'
	Income Taxes
	Effective tax rates were 78% and 35% in 2014 and 2013, respectively. The difference between the U.S. federal statutory rate of 34% and our effective tax rate in 2014 was due primarily to permanent differences in book and tax earnings for stock options, meals and entertainment, and other miscellaneous items. In 2013 there was no individual items representing a greater than 5% impact on the effective tax rate.

Significant_Accounting_Policie1

Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2014
Accounting Policies [Abstract]	'
Unaudited Interim Financial Information	'
	Unaudited Interim Financial Information
	We have prepared the accompanying financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial reporting. These financial statements are unaudited and, in our opinion, include all adjustments, consisting of normal recurring adjustments and accruals necessary for a fair presentation of our balance sheets, operating results, and cash flows for the periods presented. Operating results for the periods presented are not necessarily indicative of the results that may be expected for fiscal year 2014. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been omitted in accordance with the rules and regulations of the SEC. These financial statements should be read in conjunction with the audited financial statements and accompanying notes in Item 8 of Part II, “Financial Statements and Supplementary Data,” of our 2013 Annual Report on Form 10-K.
Use of Estimates	'
	Use of Estimates
	The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates.
Segments	'
	Segments
	We operate in one segment, pharmaceutical product development. All of our significant assets are located in the United States. During the three months ended March 31, 2014 and 2013, all of our revenue was generated in the United States.
Initial Public Offering	'
	Initial Public Offering
	On February 13, 2014, we completed our initial public offering ("IPO") whereby 9,200,000 shares of common stock were sold to the public at a price of $17.72 per share. We received aggregate proceeds of $142.0 million from the initial public offering ("IPO"), net of underwriters’ discounts and commissions, and offering expenses. Upon the closing of the IPO, all shares of our outstanding convertible preferred stock automatically converted into 10,813,867 shares of common stock and $12.0 million of outstanding principal underlying a convertible note that we issued to SBI Holdings, Inc. in May 2006, automatically converted into 3,636,365 shares of common stock.
Investments	'
	Investments
	Investments are composed of commercial paper, corporate debt securities, certificates of deposit, and government-backed securities. Investments with original maturities longer than three months and remaining maturities of less than one year are classified as short-term investments. We consider our investments as available-for-sale. Available-for-sale securities are stated at fair value as of each balance sheet date based on market quotes, and unrealized gains and losses are reflected as a net amount under the caption of accumulated other comprehensive loss. Premiums or discounts arising at acquisition are amortized into earnings.
	We periodically evaluate whether declines in fair values of our investments below their cost are other-than-temporary. This evaluation consists of several qualitative and quantitative factors regarding the severity and duration of the unrealized loss, as well as whether it is more likely than not that we will hold the investment until recovery of its amortized cost basis. Realized gains and losses are calculated using the specific identification method. Realized gains and losses and declines in value judged to be other-than-temporary are recorded within the statements of income under the caption other income (expense).
	Cash, cash equivalents and investments at March 31, 2014 and December 31, 2013 include all cash, money market funds, municipal bonds, corporate debt securities, commercial paper and certificates of deposit. We consider our investments as available-for-sale. Available-for-sale securities are stated at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value:
	Level 1—Quoted prices in active markets for identical assets and liabilities,
	Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities, and
	Level 3—Unobservable inputs in which there is little or no market data available, which requires us to develop our own assumptions.
	We measure the fair value of money market funds based on quoted prices in active markets for identical assets or liabilities. All other financial instruments were valued either based on recent trades of securities in inactive markets or based on quoted market prices of similar instruments and other significant inputs derived from or corroborated by observable market data.
Concentration of Credit Risk	'
	Concentration of Credit Risk
	All of our accounts receivable, as of March 31, 2014 and December 31, 2013, consist of amounts due from our collaborations with Otsuka Pharmaceutical Co. Ltd., or Otsuka, a global pharmaceutical company based in Japan. There was no allowance for doubtful accounts for the periods presented, as we believe all outstanding amounts will be paid based on our contractual arrangements with Otsuka and history of successful collections thereunder and collateral is not required. Revenue recognized for the three month periods ended March 31, 2014 and 2013 consist of amounts derived from our collaboration agreements with Otsuka.
Deferred Offering Costs	'
	Deferred Offering Costs
	External costs we incurred directly attributable our public offering were deferred and recorded as noncurrent assets as of December 31, 2013, and were offset against the proceeds of the 2014 IPO.
Income Taxes	'
	Income Taxes
	We recognize deferred tax assets and liabilities for the expected future tax consequences of events that have already been recognized in the financial statements or tax returns. Excess tax benefits associated with stock option exercises and other equity awards are credited to shareholders' equity. Deferred tax liabilities and assets are based on the difference between financial statement carrying amounts and the tax basis of assets and liabilities, operating loss, and tax credit carryforwards and are measured using enacted tax rates expected to be in effect in the years the differences or carryforwards are anticipated to be recovered or settled. A valuation allowance is established when we believe that it is more likely than not that benefits of the deferred tax assets will not be realized. The Company had no uncertain tax positions as of March 31, 2014 and December 31, 2013.

Cash_Cash_Equivalents_and_Inve1

Cash, Cash Equivalents and Investments (Tables)	3 Months Ended
	Mar. 31, 2014
Fair Value Disclosures [Abstract]	'
Schedule of Cash and Cash Equivalents and Investments	'
	Cash and cash equivalents and investments as of March 31, 2014 and December 31, 2013 consisted of the following (in thousands):
		March 31, 2014
		Amortized		Gross Unrealized					Fair
		Cost		Holding		Holding			Value
				Gains		Losses
	Cash	$	785	$	—	$	—		$	785
	Level 1 Securities:
	Money market funds	58,183		—		—			58,183
	Level 2 Securities:
	Commercial paper	38,793		4		(5		)	38,792
	Corporate debt securities	61,888		2		(157		)	61,733
	Municipal bonds	615		—		—			615
	Certificates of deposit	12,623		—		(20		)	12,603
		$	172,887	$	6	$	(182	)	$	172,711
		December 31, 2013
		Amortized		Gross Unrealized					Fair
		Cost		Holding		Holding			Value
				Gains		Losses
	Cash	$	868	$	—	$	—		$	868
	Level 1 Securities:
	Money market funds	12,501		—		—			12,501
	Level 2 Securities:
	Commercial paper	1,099		1		—			1,100
	Corporate debt securities	12,101		—		(4		)	12,097
	Municipal bonds	625		—		—			625
	Certificates of deposit	5,235		2		(9		)	5,228
		$	32,429	$	3	$	(13	)	$	32,419

Net_Income_Per_Share_Tables

Net Income Per Share (Tables)	3 Months Ended
	Mar. 31, 2014
Earnings Per Share [Abstract]	'
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]	'
	The following tables reconcile the numerator and denominator used to calculate diluted net income per share for the periods presented (in thousands):
		Three months ended March 31,
		2014		2013
	Numerator:
	Net income attributable to common shareholders	$	54	$	999
	Denominator:
	Weighted average shares outstanding—basic	23,799		11,944
	Dilutive effect of stock options	360		254
	Weighted average shares outstanding—diluted	24,159		12,198

Strategic_Restructuring_Tables

Strategic Restructuring (Tables)	3 Months Ended
	Mar. 31, 2014
Restructuring and Related Activities [Abstract]	'
Summary of the Utilization of the Restructuring Liability	'
	The following table summarizes the utilization of the restructuring liability (in thousands):
		Severance and Other Termination Benefits
	Balance, December 31, 2013	$	966
	Cash payments	(808		)
	Adjustments	(8		)
	Balance, March 31, 2014	$	150

Shareholders_Equity_Tables

Shareholders' Equity (Tables)	3 Months Ended
	Mar. 31, 2014
Statement of Stockholders' Equity [Abstract]	'
Changes in Accumulated Other Comprehensive Loss	'
	Changes in Accumulated Other Comprehensive Loss (in thousands):
		Three months ended March 31,
		2014			2013
	Beginning balance	$	(7	)	$	—
	Current period other comprehensive loss, net of tax	(108		)	(2		)
	Ending balance	$	(115	)	$	(2	)

Significant_Accounting_Policie2

Significant Accounting Policies (Details) (USD $)	3 Months Ended		0 Months Ended
	Mar. 31, 2014	Dec. 31, 2013	Feb. 13, 2014	Feb. 13, 2014
			Common Stock	Common Stock
				IPO
Conversion of Stock [Line Items]	'	'	'	'
Initial Public Offering, shares issued	'	'	9,200,000	'
Initial Public Offering, price per share	'	'	$17.72	'
Proceeds from IPO	'	'	$142,000,000	'
Number of shares issued on conversion of preferred stock	'	'	'	10,813,867
Debt Conversion [Line Items]	'	'	'	'
Convertible debt face amount	12,000,000	'	'	'
Allowance for doubtful accounts receivable	0	0	'	'
Uncertain tax positions	$0	$0	'	'

Cash_Cash_Equivalents_and_Inve2

Cash, Cash Equivalents and Investments (Details) (USD $)	Mar. 31, 2014	Dec. 31, 2013
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]	'	'
Cash	$785,000	$868,000
Amortized Cost	172,887,000	32,429,000
Gross Unrealized Holding Gains	6,000	3,000
Gross Unrealized Holding Losses	-182,000	-13,000
Fair Value	172,711,000	32,419,000
Money market funds	'	'
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]	'	'
Amortized Cost	58,183,000	12,501,000
Gross Unrealized Holding Gains	0	0
Gross Unrealized Holding Losses	0	0
Commercial paper	'	'
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]	'	'
Amortized Cost	38,793,000	1,099,000
Gross Unrealized Holding Gains	4,000	1,000
Gross Unrealized Holding Losses	-5,000	0
Securities maturing from year one to year two	5,600,000	'
Corporate debt securities	'	'
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]	'	'
Amortized Cost	61,888,000	12,101,000
Gross Unrealized Holding Gains	2,000	0
Gross Unrealized Holding Losses	-157,000	-4,000
Securities maturing from year one to year two	42,900,000	'
Municipal bonds	'	'
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]	'	'
Amortized Cost	615,000	625,000
Gross Unrealized Holding Gains	0	0
Gross Unrealized Holding Losses	0	0
Certificates of deposit	'	'
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]	'	'
Amortized Cost	12,623,000	5,235,000
Gross Unrealized Holding Gains	0	2,000
Gross Unrealized Holding Losses	-20,000	-9,000
Level 1 Securities | Money market funds	'	'
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]	'	'
Fair Value	58,183,000	12,501,000
Level 2 Securities | Commercial paper	'	'
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]	'	'
Fair Value	38,792,000	1,100,000
Level 2 Securities | Corporate debt securities	'	'
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]	'	'
Fair Value	61,733,000	12,097,000
Level 2 Securities | Municipal bonds	'	'
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]	'	'
Fair Value	615,000	625,000
Level 2 Securities | Certificates of deposit	'	'
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]	'	'
Fair Value	$12,603,000	$5,228,000

Net_Income_Per_Share_Details

Net Income Per Share (Details) (USD $)	3 Months Ended		0 Months Ended
In Thousands, except Share data, unless otherwise specified	Mar. 31, 2014	Mar. 31, 2013	Feb. 13, 2014	Feb. 13, 2014
			Common Stock	Affiliated Entity
				Common Stock
				IPO
Class of Stock [Line Items]	'	'	'	'
Initial Public Offering, shares issued	'	'	9,200,000	'
Number of Shares Issued through Debt Conversion	'	'	'	3,636,365
Net income attributable to common shareholders	$54	$999	'	'
Weighted average shares outstanding - basic	23,799,000	11,944,000	'	'
Dilutive effect of stock options	360,000	254,000	'	'
Weighted average shares outstanding - diluted	24,159,000	12,198,000	'	'

Collaboration_and_License_Agre1

Collaboration and License Agreements (Details) (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Revenue Recognition, Milestone Method [Line Items]	'	'
Revenues from collaborations	$10,546,000	$15,980,000
Collaborative Arrangement, Product	'	'
Revenue Recognition, Milestone Method [Line Items]	'	'
Revenues from collaborations	10,500,000	11,900,000
Collaborative Arrangement, Product | Emixustat	'	'
Revenue Recognition, Milestone Method [Line Items]	'	'
Milestone method, revenue recognized	0	5,000,000
Collaborative Arrangement, Product | Rebamipide	'	'
Revenue Recognition, Milestone Method [Line Items]	'	'
Revenues from collaborations	0	3,100,000
Collaborative Arrangement, Product | OPA-6566	'	'
Revenue Recognition, Milestone Method [Line Items]	'	'
Revenues from collaborations	$0	$900,000

Strategic_Restructuring_Detail

Strategic Restructuring (Details) (USD $)	3 Months Ended		6 Months Ended
	Mar. 31, 2014	Dec. 31, 2013	Mar. 31, 2014
		Employee
Restructuring Cost and Reserve [Line Items]	'	'	'
Workforce reduction, percentage	'	35.00%	'
Number of positions eliminated	'	30	'
Restructuring Costs	'	'	$1,000,000
Restructuring Reserve [Roll Forward]	'	'	'
Cash payments	-808,000	'	'
Adjustments	-8,000	'	'
Employee Severance	'	'	'
Restructuring Reserve [Roll Forward]	'	'	'
Balance, March 31, 2014	$150,000	966,000	$150,000

Shareholders_Equity_Details

Shareholders' Equity (Details) (USD $)	3 Months Ended				0 Months Ended			3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Feb. 13, 2014	Dec. 31, 2013	Feb. 13, 2014	Feb. 13, 2014	Feb. 13, 2014	Mar. 31, 2014	Feb. 13, 2014
					Common Stock	Common Stock	Affiliated Entity	Affiliated Entity	Affiliated Entity
						IPO	IPO	Convertible Debt	Convertible Debt
							Common Stock	IPO	IPO
Conversion of Stock [Line Items]	'	'	'	'	'	'	'	'	'
Common stock, shares authorized	100,000,000	'	100,000,000	60,000,000	'	'	'	'	'
Number of shares issued on conversion of preferred stock	'	'	'	'	'	10,813,867	'	'	'
Initial Public Offering, shares issued	'	'	'	'	9,200,000	'	'	'	'
Proceeds from IPO	'	'	'	'	$142,000,000	'	'	'	'
Convertible debt face amount	12,000,000	'	'	'	'	'	'	12,000,000	'
Number of Shares Issued through Debt Conversion	'	'	'	'	'	'	3,636,365	'	'
Debt conversion price	'	'	'	'	'	'	'	'	$3.30
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]	'	'	'	'	'	'	'	'	'
Beginning balance	-7,000	0	'	'	'	'	'	'	'
Current period other comprehensive loss, net of tax	-108,000	-2,000	'	'	'	'	'	'	'
Ending balance	($115,000)	($2,000)	'	'	'	'	'	'	'

RelatedParty_Transactions_Deta

Related-Party Transactions (Details) (USD $)	3 Months Ended		0 Months Ended
In Thousands, except Share data, unless otherwise specified	Mar. 31, 2014	Mar. 31, 2013	Feb. 13, 2014
	Management	Management	Common Stock
			IPO
			Affiliated Entity
Related Party Transaction [Line Items]	'	'	'
Related Party Transaction, Expenses from Transactions with Related Party	$30	$36	'
Debt Conversion, Converted Instrument, Shares Issued	'	'	3,636,365

Income_Taxes_Details

Income Taxes (Details)	3 Months Ended		12 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Dec. 31, 2013
Income Tax Disclosure [Abstract]	'	'	'
Effective income tax rate	78.00%	35.00%	'
Federal statutory income tax rate	34.00%	'	'
Effective tax rate reconciliation, disclosure threshold	'	'	5.00%