Kubota Pharmaceutical (KBBTF) 10-Q 14 May 15 2015 Q1 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information	3 Months Ended
	Mar. 31, 2015	11-May-15
Document and Entity Information [Abstract]
Entity Registrant Name	ACUCELA INC.
Entity Central Index Key	1400482
Current Fiscal Year End Date	-19
Entity Filer Category	Non-accelerated Filer
Document Type	10-Q
Document Period End Date	31-Mar-15
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q1
Amendment Flag	FALSE
Entity Common Stock, Shares Outstanding		36,456,986

CONDENSED_BALANCE_SHEETS

CONDENSED BALANCE SHEETS (USD $)	Mar. 31, 2015	Dec. 31, 2014
In Thousands, unless otherwise specified
Current assets:
Cash and cash equivalents	$18,422	$18,778
Investments	94,292	85,008
Accounts receivable from collaborations	4,912	5,285
Deferred tax asset	0	61
Prepaid expenses and other current assets	2,601	2,582
Total current assets	120,227	111,714
Property and equipment, net	992	742
Long-term investments	73,935	84,033
Long-term deferred tax asset	0	42
Other assets	435	435
Total assets	195,589	196,966
Current liabilities:
Accounts payable	1,010	441
Accrued liabilities	5,387	4,176
Accrued compensation	1,415	1,683
Deferred revenue from collaborations	5,411	6,231
Deferred rent and lease incentives	104	25
Total current liabilities	13,327	12,556
Commitments and contingencies (Note 4)
Long-term deferred rent, lease incentives, and others	1,211	47
Total long-term liabilities	1,211	47
Shareholders’ equity:
Common stock, no par value, 100,000 shares authorized as of March 31, 2015 and December 31, 2014; issued and outstanding, 35,809 shares as of March 31, 2015 and December 31, 2014	186,591	186,589
Additional paid-in capital	3,943	3,601
Accumulated other comprehensive loss	-77	-361
Accumulated deficit	-9,406	-5,466
Total shareholders’ equity	181,051	184,363
Total liabilities and shareholders’ equity	$195,589	$196,966

CONDENSED_BALANCE_SHEETS_Paren

CONDENSED BALANCE SHEETS (Parenthetical)	Mar. 31, 2015	Dec. 31, 2014
In Thousands, unless otherwise specified
Equity [Abstract]
Common stock, shares authorized	100,000	100,000
Common stock, shares issued	35,809	35,809
Common stock, shares outstanding	35,809	35,809

CONDENSED_STATEMENTS_OF_OPERAT

CONDENSED STATEMENTS OF OPERATIONS (USD $)	3 Months Ended
In Thousands, except Per Share data, unless otherwise specified	Mar. 31, 2015	Mar. 31, 2014
Income Statement [Abstract]
Revenue from collaborations	$7,215	$10,546
Expenses:
Research and development	5,866	7,970
General and administrative	5,508	2,361
Total expenses	11,374	10,331
Income (loss) from operations	-4,159	215
Other income (expense), net:
Interest income	238	44
Interest expense	0	-13
Other expense, net	-19	-4
Total other income, net	219	27
Income (loss) before income tax	-3,940	242
Income tax expense	0	-188
Net income (loss)	($3,940)	$54
Net income (loss) per share
Basic (in dollars per share)	($0.11)	$0
Diluted (in dollars per share)	($0.11)	$0
Weighted average shares
Basic (shares)	35,809	23,799
Diluted (shares)	35,809	24,159

CONDENSED_STATEMENTS_OF_COMPRE

CONDENSED STATEMENTS OF COMPREHENSIVE LOSS (USD $)	3 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2015	Mar. 31, 2014
Statement of Comprehensive Income [Abstract]
Net income (loss)	($3,940)	$54
Other comprehensive income (loss):
Net unrealized gain (loss) on securities, net of tax of $0 and $58	284	-108
Comprehensive loss	($3,656)	($54)

CONDENSED_STATEMENTS_OF_COMPRE1

CONDENSED STATEMENTS OF COMPREHENSIVE LOSS (Parenthetical) (USD $)	3 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2015	Mar. 31, 2014
Statement of Comprehensive Income [Abstract]
Net unrealized gain (loss) on securities, tax expense (benefit)	$0	($58)

CONDENSED_STATEMENTS_OF_CASH_F

CONDENSED STATEMENTS OF CASH FLOWS (USD $)	3 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2015	Mar. 31, 2014
Cash flows from operating activities
Net income (loss)	($3,940)	$54
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	120	128
Stock-based compensation	342	134
Amortization of premium/discount on marketable securities	561	118
Deferred taxes	103	143
Changes in operating assets and liabilities:
Accounts receivable from collaborations	373	-4,991
Prepaid expenses and other current assets	-19	183
Accounts payable	569	560
Accrued liabilities	1,211	-1,289
Accrued compensation	-268	-2,058
Deferred rent and lease incentives	1,243	-70
Deferred revenue from collaborations	-820	0
Other assets	0	5
Net cash used in operating activities	-525	-7,083
Cash flows from investing activities
Purchases of marketable securities available for sale	-22,483	-92,701
Maturities of marketable securities available for sale	23,020	6,950
Net additions to property and equipment	-370	0
Net cash provided by (used in) investing activities	167	-85,751
Cash flows from financing activities
Proceeds from issuance of common stock	2	149,206
Payments for deferred offering costs	0	-1,545
Net cash provided by financing activities	2	147,661
(Decrease) increase in cash and cash equivalents	-356	54,827
Cash and cash equivalents—beginning of period	18,778	13,994
Cash and cash equivalents—end of period	18,422	68,821
Supplemental disclosure
Unpaid deferred offering costs	0	5,548
Conversion of convertible preferred stock upon IPO	0	28,209
Conversion of contingently convertible debt, related party, upon IPO	$0	$12,000

Business_and_Basis_of_Presenta

Business and Basis of Presentation	3 Months Ended
	Mar. 31, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Business and Basis of Presentation	Business and Basis of Presentation
	Business
	Acucela Inc. (“we,” “our” and “us”) is a clinical-stage biotechnology company that specializes in discovering and developing novel drug candidates to potentially treat and slow the progression of sight-threatening ophthalmic diseases affecting millions of individuals worldwide. In 2008, we and Otsuka Pharmaceutical Co., Ltd. (“Otsuka”) entered into a definitive agreement to co-develop emixustat hydrochloride ("emixustat"), our lead investigational compound which is currently being evaluated in a Phase 2b/3 clinical trial in patients with geographic atrophy associated with dry AMD.
	Special Shareholders Meeting
	On May 1, 2015, at a special shareholders meeting (the "Special Meeting"), our shareholders approved the two shareholder proposals that removed all of the members of our Board of Directors (other than Dr. Kubota) and elected the following new members to our Board of Directors: Yoshitaka Kitao, Dr. Shiro Mita, Eisaku Nakamura and Robert Takeuchi. In addition, on May 1, 2015, at the initial meeting of the new Board of Directors, our founder and former chief executive officer, Dr. Kubota, was appointed as our President and Chief Executive Officer, replacing Brian O'Callaghan, who resigned effective on May 3, 2015.
	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 2015. 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 2014 Annual Report on Form 10-K.
	Use of Estimates
	The preparation of financial statements in conformity with 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, 2015 and 2014, all revenue was generated in the United States.

Significant_Accounting_Policie

Significant Accounting Policies	3 Months Ended
	Mar. 31, 2015
Accounting Policies [Abstract]
Significant Accounting Policies	Significant Accounting Policies
	Cash and Cash Equivalents and Investments
	We consider investments in highly liquid instruments purchased with an original maturity at purchase of three months or less to be cash equivalents. The amounts are recorded at cost, which approximates fair value. Our cash equivalents consist of money market funds at March 31, 2015 and money market funds and certificates of deposit at December 31, 2014.
	We have classified our entire investment portfolio, which consists of corporate debt securities, commercial paper and certificates of deposit, 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).
	We consider an investment with a maturity greater than twelve months from the balance sheet date as long-term and a maturity less than twelve months as short-term at the balance sheet date.
	Concentration of Credit Risk
	Our accounts receivable, as of March 31, 2015 and December 31, 2014, consist of amounts due from our collaborations with Otsuka. 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, 2015 and 2014 consist of amounts derived from our collaboration agreements with Otsuka.
	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 stockholders' 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.

Cash_and_Cash_Equivalents_and_

Cash and Cash Equivalents and Investments	3 Months Ended
	Mar. 31, 2015
Fair Value Disclosures [Abstract]
Cash and Cash Equivalents and Investments	Cash and Cash Equivalents and Investments
	Cash, cash equivalents and investments at March 31, 2015 and December 31, 2014 include all cash, money market funds, 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 financial instruments categorized as Level 3 as of March 31, 2015 or December 31, 2014.
	Cash and cash equivalents and investments as of March 31, 2015 and December 31, 2014 consisted of the following (in thousands):
		March 31, 2015
		Amortized		Gross Unrealized					Fair
		Cost		Holding		Holding			Value
				Gains		Losses
	Cash	$	1,190	$	—	$	—		$	1,190
	Level 1 Securities:
	Money market funds	17,232		—		—			17,232
	Level 2 Securities:
	Commercial paper	4,998		1		—			4,999
	U.S. Government agencies	2,000		2		—			2,002
	Corporate debt securities	147,137		15		(153		)	146,999
	Certificates of deposit	14,220		8		(1		)	14,227
		$	186,777	$	26	$	(154	)	$	186,649
		December 31, 2014
		Amortized		Gross Unrealized					Fair
		Cost		Holding		Holding			Value
				Gains		Losses
	Cash	$	767	$	—	$	—		$	767
	Level 1 Securities:
	Money market funds	17,771		—		—			17,771
	Level 2 Securities:
	Commercial paper	15,992		2		(1		)	15,993
	Corporate debt securities	131,586		—		(398		)	131,188
	Certificates of deposit	22,115		4		(19		)	22,100
		$	188,231	$	6	$	(418	)	$	187,819
	As of March 31, 2015, $3.6 million of certificates of deposit, $68.3 million of corporate debt securities and $2.0 million of U.S. government agencies mature in greater than one year, but less than two years. There were no investments which were in an unrealized loss position for a period of twelve months or more. All other investment securities held at March 31, 2015 mature within 12 months.
	Market values were determined for each individual security in the investment portfolio. The declines in value of certain of these investments are primarily related to changes in interest rates and are considered to be temporary in nature. We evaluate, among other things, the duration and extent to which the fair value of a security is less than its cost, the financial condition of the issuer, and our intent to sell, or whether it is more likely than not we will be required to sell the security before recovery of the amortized cost basis. We do not consider these investments to be other-than-temporarily impaired as of March 31, 2015.

Commitments_and_Contingencies

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2015
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies
	Commitments
	In addition to the contractual commitments, which consist of operating leases for corporate office and laboratory space, disclosed in our Annual Report on Form 10-K for the year ended December 31, 2014, we have not incurred any additional contractual obligations or commitments outside of the normal course of business other than the following:
	Former CEO Severance
	Under Mr. O'Callaghan's employment agreement, dated October 14, 2014, the termination of Mr. O’Callaghan’s employment without Cause or for Good Reason (as such terms are defined in his employment agreement), entitles him to receive 18 months of salary, up to 18 months of the premiums for him and his family to obtain health benefit coverage provided under our COBRA program, and a pro-rated portion of his annual bonus (“the CEO severance amounts”). Mr. O'Callaghan resigned his position as our President and Chief Executive Officer, effective on May 3, 2015. The CEO severance amounts, totaling approximately $0.9 million in cash, were paid on May 11, 2015. In addition, pursuant to the terms of the 2014 Equity Plan, as amended, the vesting of his 712,480 options and 356,410 restricted stock units was accelerated such that all of his equity awards were fully vested as of May 3, 2015.
	Severance and Change in Effective Control Agreements
	On March 24, 2015, our Board of Directors approved the terms of a Severance and Change in Effective Control Agreement to be entered into with each member of our management team and certain other employees. The Severance and Change in Effective Control Agreement provides that if the employee terminates for any reason or for no reason (including disability), voluntarily resigns for good reason (as defined in the agreement), or the employee dies, and the termination occurs within the six month period following a Qualifying Change in Effective Control (as defined in the Severance and Change in Effective Control Agreements), the employee will be entitled to an amount equal to the sum of six months of his or her monthly base salary, plus 50% of the employee’s annual target bonus for 2015, plus the premiums required to continue the employee’s group health care coverage for a period of six months following termination, which will be “grossed up” to cover taxes. The Severance and Change in Effective Control Agreements terminate upon the earlier of November 1, 2015 or the employee’s termination date (unless the termination is within six months following a Qualifying Change in Effective Control). On May 1, 2015, as a result of the actions taken by our shareholders at the Special Meeting, a Qualifying Change in Effective Control was deemed to have taken place under the terms of the Severance and Change in Effective Control Agreements. Potential payments under the agreements total approximately $1.5 million.
	Retention Pool
	On February 24, 2015, the compensation committee of the board of directors approved the creation of a pool of $600,000 to be distributed at the discretion of the Committee to employees who remain employed with us on December 31, 2015. Allocations of the pool will not be determined until the fourth quarter of 2015.
	Special Shareholders' Meeting Expenses
	Dr. Kubota and SBI Holding have incurred certain fees and expenses in preparation for the May 1, 2015 Special Shareholders’ meeting. A committee of the Board of Directors has been appointed to evaluate these expenses to determine if the expenses, or a portion thereof, should be reimbursed by the Company. The committee has not yet met, nor have they received documentation pertaining to these expenses. As a result, no accrual has been recorded for these expenses in the financial statements as of March 31, 2015.
	Litigation
	From time to time, we may be subject to legal proceedings and claims in the ordinary course of business. We are not currently a party to any material legal proceedings, and to our knowledge none is threatened. There can be no assurance that future legal proceedings arising in the ordinary course of business or otherwise will not have a material adverse effect on our financial position, results of operations or cash flows.

Net_Income_Loss_Per_Share

Net Income (Loss) Per Share	3 Months Ended
	Mar. 31, 2015
Earnings Per Share [Abstract]
Net Income (Loss) Per Share	Net Income (Loss) Per Share
	Immediately prior to the closing of our IPO, all outstanding shares of preferred stock were converted to common stock. 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, 2015, common stock is our only outstanding class of capital stock.
	Basic net income (loss) per share is calculated by dividing net income by the weighted average number of shares outstanding for the period. Diluted net income (loss) per share is calculated by dividing net income (loss) 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 and restricted stock units.
	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,
		2015			2014
	Numerator:
	Net income (loss)	$	(3,940	)	$	54
	Denominator:
	Weighted-average shares outstanding—basic (shares)	35,809			23,799
	Dilutive effect of stock options and RSUs (shares)	—			360
	Weighted average shares outstanding—diluted (shares)	35,809			24,159
	For the three months ended March 31, 2015, 63,232 stock options and RSUs were excluded from the calculation of diluted net income (loss) per share because the impact was anti-dilutive.

Collaboration_and_License_Agre

Collaboration and License Agreements	3 Months Ended
	Mar. 31, 2015
Revenue Recognition [Abstract]
Collaboration and License Agreements	Collaboration and License Agreements
	During the three months ended March 31, 2015 and 2014, we recognized $7.2 million and $10.5 million, respectively, of revenues in performance of the Emixustat Agreement.
	Continued Involvement of the CEO
	The Company’s collaboration arrangements with Otsuka require the continuing involvement of our Chief Executive Officer and President, 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 New Drug Application, or "NDA", for the first indication in the United States.

Shareholders_Equity

Shareholders' Equity	3 Months Ended
	Mar. 31, 2015
Stockholders' Equity Note [Abstract]
Shareholders' Equity	Shareholders’ Equity
	Changes in Accumulated Other Comprehensive Loss (in thousands):
		Three months ended March 31,
		2015			2014
	Beginning balance	$	(361	)	$	(7	)
	Current period other comprehensive gain (loss), net of tax	284			(108		)
	Ending balance	$	(77	)	$	(115	)
	The changes in accumulated other comprehensive loss relate to unrealized holding gains and losses in available-for-sale securities.

Income_Taxes

Income Taxes	3 Months Ended
	Mar. 31, 2015
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes
	Effective tax rates were 0% and 78% in 2015 and 2014, respectively. In the first quarter of 2015, we recorded a full valuation allowance against the remaining deferred tax asset resulting in an increase to our taxes receivable. 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.

Recent_Accounting_Pronouncemen

Recent Accounting Pronouncements	3 Months Ended
	Mar. 31, 2015
New Accounting Pronouncements and Changes in Accounting Principles [Abstract]
Recent Accounting Pronouncements	Recent Accounting Pronouncements
	In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers. This ASU amends the existing accounting standards for revenue recognition. Under the new revenue recognition model, a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The ASU is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early adoption is not permitted. The amendment may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of initial application. We are currently evaluating the transition alternatives and impact on our financial statements.

Subsequent_Events

Subsequent Events	3 Months Ended
	Mar. 31, 2015
Subsequent Events [Abstract]
Subsequent Events	Subsequent Events
	Equity Awards
	On April 23, 2015, we granted 9,500 restricted stock units to employees. On May 1, 2015, we granted 358,692 restricted stock units to our Chief Financial Officer. We also granted 358,692 shares and 118,369 shares, respectively, of restricted stock to our Chief Operating Officer and our Chief Business Officer, which shares are subject to repurchase over a four-year period if such officers are terminated, with 75% of the restricted stock subject to repurchase through May 1, 2016 and the remaining thereafter on a decreasing percentage on a monthly pro rata basis over the following three years, terminating on May 1, 2019. On May 1, 2015, we also granted our Chief Business Officer options to purchase 240,323 shares of our common stock.
	Amendments to Equity Incentive Plans and Share-based Awards
	On March 24, 2015, our Board of Directors approved amendments to outstanding equity awards granted under our 2002 Stock Option and Restricted Stock Plan, our 2012 Equity Incentive Plan, and our 2014 Equity Incentive Plan to our employees, executive officers and non-employee members of our Board. The amendments provide that for employees and executive officers, if we undergo a change in control and their employment is terminated without Cause or for Good Reason (as such terms are defined in the Severance and Change in Effective Control Agreements), then any unvested portion of the awards held by employees and executives will become immediately vested.
	In addition, our employees, executive officers and non-employee members of our Board will be permitted to exercise their awards up to twelve months after their termination. The modifications required acceptance by the option holders, and those acceptances were obtained in April 2015. We expect to recognize incremental stock-based compensation expense in the second quarter of 2015 related to the modification of these awards.

Significant_Accounting_Policie1

Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2015
Accounting Policies [Abstract]
Use of Estimates	The preparation of financial statements in conformity with 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, 2015 and 2014, all revenue was generated in the United States.
Cash and Cash Equivalents	We consider investments in highly liquid instruments purchased with an original maturity at purchase of three months or less to be cash equivalents. The amounts are recorded at cost, which approximates fair value. Our cash equivalents consist of money market funds at March 31, 2015 and money market funds and certificates of deposit at December 31, 2014.
Investments	We have classified our entire investment portfolio, which consists of corporate debt securities, commercial paper and certificates of deposit, 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).
	We consider an investment with a maturity greater than twelve months from the balance sheet date as long-term and a maturity less than twelve months as short-term at the balance sheet date.
Concentration of Credit Risk	Our accounts receivable, as of March 31, 2015 and December 31, 2014, consist of amounts due from our collaborations with Otsuka. 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, 2015 and 2014 consist of amounts derived from our collaboration agreements with Otsuka.
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 stockholders' 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.
Recent Accounting Pronouncements	In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers. This ASU amends the existing accounting standards for revenue recognition. Under the new revenue recognition model, a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The ASU is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early adoption is not permitted. The amendment may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of initial application. We are currently evaluating the transition alternatives and impact on our financial statements.

Cash_and_Cash_Equivalents_and_1

Cash and Cash Equivalents and Investments (Tables)	3 Months Ended
	Mar. 31, 2015
Fair Value Disclosures [Abstract]
Schedule of Cash and Cash Equivalents and Investments	Cash and cash equivalents and investments as of March 31, 2015 and December 31, 2014 consisted of the following (in thousands):
		March 31, 2015
		Amortized		Gross Unrealized					Fair
		Cost		Holding		Holding			Value
				Gains		Losses
	Cash	$	1,190	$	—	$	—		$	1,190
	Level 1 Securities:
	Money market funds	17,232		—		—			17,232
	Level 2 Securities:
	Commercial paper	4,998		1		—			4,999
	U.S. Government agencies	2,000		2		—			2,002
	Corporate debt securities	147,137		15		(153		)	146,999
	Certificates of deposit	14,220		8		(1		)	14,227
		$	186,777	$	26	$	(154	)	$	186,649
		December 31, 2014
		Amortized		Gross Unrealized					Fair
		Cost		Holding		Holding			Value
				Gains		Losses
	Cash	$	767	$	—	$	—		$	767
	Level 1 Securities:
	Money market funds	17,771		—		—			17,771
	Level 2 Securities:
	Commercial paper	15,992		2		(1		)	15,993
	Corporate debt securities	131,586		—		(398		)	131,188
	Certificates of deposit	22,115		4		(19		)	22,100
		$	188,231	$	6	$	(418	)	$	187,819

Net_Income_Loss_Per_Share_Tabl

Net Income (Loss) Per Share (Tables)	3 Months Ended
	Mar. 31, 2015
Earnings Per Share [Abstract]
Schedule of Earnings Per Share, Basic and Diluted	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,
		2015			2014
	Numerator:
	Net income (loss)	$	(3,940	)	$	54
	Denominator:
	Weighted-average shares outstanding—basic (shares)	35,809			23,799
	Dilutive effect of stock options and RSUs (shares)	—			360
	Weighted average shares outstanding—diluted (shares)	35,809			24,159

Shareholders_Equity_Tables

Shareholders' Equity (Tables)	3 Months Ended
	Mar. 31, 2015
Stockholders' Equity Note [Abstract]
Changes in Accumulated Other Comprehensive Loss	Changes in Accumulated Other Comprehensive Loss (in thousands):
		Three months ended March 31,
		2015			2014
	Beginning balance	$	(361	)	$	(7	)
	Current period other comprehensive gain (loss), net of tax	284			(108		)
	Ending balance	$	(77	)	$	(115	)

Cash_and_Cash_Equivalents_and_2

Cash and Cash Equivalents and Investments (Details) (USD $)	Mar. 31, 2015	Dec. 31, 2014
In Thousands, unless otherwise specified
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash	$1,190	$767
Amortized Cost	186,777	188,231
Gross Unrealized Holding Gains	26	6
Gross Unrealized Holding Losses	-154	-418
Fair Value	186,649	187,819
Level 1 Securities | Money market funds
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Amortized Cost	17,232	17,771
Gross Unrealized Holding Gains	0	0
Gross Unrealized Holding Losses	0	0
Fair Value	17,232	17,771
Level 2 Securities | Commercial paper
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Amortized Cost	4,998	15,992
Gross Unrealized Holding Gains	1	2
Gross Unrealized Holding Losses	0	-1
Fair Value	4,999	15,993
Level 2 Securities | US Government agencies
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Amortized Cost	2,000
Gross Unrealized Holding Gains	2
Gross Unrealized Holding Losses	0
Fair Value	2,002
Level 2 Securities | Corporate debt securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Amortized Cost	147,137	131,586
Gross Unrealized Holding Gains	15	0
Gross Unrealized Holding Losses	-153	-398
Fair Value	146,999	131,188
Level 2 Securities | Certificates of deposit
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Amortized Cost	14,220	22,115
Gross Unrealized Holding Gains	8	4
Gross Unrealized Holding Losses	-1	-19
Fair Value	$14,227	$22,100

Cash_and_Cash_Equivalents_and_3

Cash and Cash Equivalents and Investments (Narrative) (Details) (USD $)	Mar. 31, 2015
In Millions, unless otherwise specified
Certificates of deposit
Schedule of Available-for-sale Securities [Line Items]
Securities maturing from year one to year two	$3.60
Corporate debt securities
Schedule of Available-for-sale Securities [Line Items]
Securities maturing from year one to year two	68.3
US Government agencies
Schedule of Available-for-sale Securities [Line Items]
Securities maturing from year one to year two	$2

Commitments_and_Contingencies_

Commitments and Contingencies (Narrative) (Details) (USD $)	0 Months Ended
In Millions, except Share data, unless otherwise specified	Mar. 24, 2015	3-May-15	Oct. 14, 2014	Feb. 24, 2015	11-May-15
Property Subject to or Available for Operating Lease [Line Items]
Percent of employee’s annual target bonus for 2015	50.00%
Potential payments under equity award agreement	$1.50
Retention pool				0.6
2014 Equity Plan [Member] | Subsequent Event
Property Subject to or Available for Operating Lease [Line Items]
Options vested		712,480
2014 Equity Plan [Member] | Restricted Stock Units (RSUs) | Subsequent Event
Property Subject to or Available for Operating Lease [Line Items]
Equity instruments other than options, vested		356,410
Chief Executive Officer
Property Subject to or Available for Operating Lease [Line Items]
Severance term			18 months
Severance benefit term			18 months
Chief Executive Officer | Subsequent Event
Property Subject to or Available for Operating Lease [Line Items]
Severance escrow, funded amount					$0.90

Net_Income_Loss_Per_Share_Deta

Net Income (Loss) Per Share (Details) (USD $)	3 Months Ended		1 Months Ended
In Thousands, except Share data, unless otherwise specified	Mar. 31, 2015	Mar. 31, 2014	Feb. 28, 2014
Class of Stock [Line Items]
Net income (loss)	($3,940)	$54
Weighted-average shares outstanding—basic (shares)	35,809,000	23,799,000
Dilutive effect of stock options and RSUs (shares)	0	360,000
Weighted average shares outstanding—diluted (shares)	35,809,000	24,159,000
Antidilutive securities excluded from the calculation of diluted net income (loss) per share	63,232
Common Stock
Class of Stock [Line Items]
IPO, shares issued			9,200,000
Common Stock | Affiliated Entity | IPO
Class of Stock [Line Items]
Number of shares issued through debt conversion			3,636,365

Collaboration_and_License_Agre1

Collaboration and License Agreements (Details) (USD $)	3 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2015	Mar. 31, 2014
Revenue Recognition, Milestone Method [Line Items]
Revenue from collaborations	$7,215	$10,546
Collaborative Arrangement, Product
Revenue Recognition, Milestone Method [Line Items]
Revenue from collaborations	$7,200	$10,500

Shareholders_Equity_Changes_in

Shareholders' Equity (Changes in AOCI) (Details) (USD $)	3 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2015	Mar. 31, 2014
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning balance	($361)	($7)
Current period other comprehensive gain (loss), net of tax	284	-108
Ending balance	($77)	($115)

Income_Taxes_Narrative_Details

Income Taxes (Narrative) (Details)	3 Months Ended		12 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
Income Tax Disclosure [Abstract]
Effective tax rate	0.00%	78.00%
Statutory rate			34.00%

Subsequent_Events_Details

Subsequent Events (Details) (Subsequent Event)	0 Months Ended
	1-May-15	Apr. 23, 2015
Chief Business Officer
Subsequent Event [Line Items]
Granted	240,323
Restricted Stock Units (RSUs) | Employee
Subsequent Event [Line Items]
Equity instruments, granted		9,500
Restricted Stock Units (RSUs) | Chief Financial Officer
Subsequent Event [Line Items]
Equity instruments, granted	358,692
Restricted Stock | Chief Operating Officer
Subsequent Event [Line Items]
Equity instruments, granted	358,692
Restricted Stock | Chief Business Officer
Subsequent Event [Line Items]
Equity instruments, granted	118,369
Restricted Stock | Chief Operating Officer and Chief Business Officer
Subsequent Event [Line Items]
Share-based compensation, vesting period	4 years
Restricted Stock | Chief Operating Officer and Chief Business Officer | Through May 1, 2016 [Member]
Subsequent Event [Line Items]
Percent of repurchase	75.00%