Kubota Pharmaceutical (KBBTF) 10-K 15 Mar 17 2016 FY Annual report Financial data

Document and Entity Information

Document and Entity Information - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2016	Feb. 28, 2017	Jun. 30, 2016
Document and Entity Information [Abstract]
Entity Registrant Name	KUBOTA PHARMACEUTICAL HOLDINGS CO LTD
Entity Central Index Key	1,400,482
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Document Type	10-K
Document Period End Date	Dec. 31, 2016
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	FY
Amendment Flag	false
Entity Common Stock, Shares Outstanding		37,911,040
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Public Float			$ 292.5

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 8,949	$ 5,088
Investments	113,365	106,922
Accounts receivable from collaborations	2,055	6,140
Prepaid expenses and other current assets	2,950	2,051
Total current assets	127,319	120,201
Property and equipment, net	770	920
Long-term investments	18,975	54,515
Other assets	319	314
Total assets	147,383	175,950
Current liabilities:
Accounts payable	439	207
Accrued liabilities	1,726	3,138
Accrued compensation	2,295	2,457
Deferred revenue from collaborations	0	2,467
Deferred rent and lease incentives	153	143
Total current liabilities	4,613	8,412
Commitments and contingencies
Long-term deferred rent, lease incentives, and others	953	1,104
Total long-term liabilities	953	1,104
Shareholders’ equity:
Common stock, no par value, 151,358 and 100,000 shares authorized as of December 31, 2016 and 2015; 37,878 and 36,517 shares issued and outstanding as of December 31, 2016 and 2015, respectively	207,449	197,984
Accumulated other comprehensive loss	(132)	(575)
Accumulated deficit	(65,500)	(30,975)
Total shareholders’ equity	141,817	166,434
Total liabilities and shareholders’ equity	$ 147,383	$ 175,950

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - shares	Dec. 31, 2016	Dec. 31, 2015
Equity [Abstract]
Common stock, shares authorized	151,358,000	100,000,000
Common stock, shares issued	37,878,000	36,517,000
Common stock, shares outstanding	37,878,000	36,517,000

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Income Statement [Abstract]
Revenue from collaborations	$ 7,606	$ 24,067	$ 35,396
Expenses:
Research and development	20,707	22,636	25,582
General and administrative	22,895	27,987	10,002
Total expenses	43,602	50,623	35,584
Loss from operations	(35,996)	(26,556)	(188)
Other income (expense), net:
Interest income	1,408	1,117	519
Interest expense	0	0	(15)
Other income (expense), net	64	(20)	37
Total other income, net	1,472	1,097	541
Income (loss) before income tax	(34,524)	(25,459)	353
Income tax expense	(1)	(50)	(2,359)
Net loss	$ (34,525)	$ (25,509)	$ (2,006)
Net loss per share
Basic (in dollars per share)	$ (0.92)	$ (0.71)	$ (0.06)
Diluted (in dollars per share)	$ (0.92)	$ (0.71)	$ (0.06)
Weighted average shares used to compute loss per share
Basic (shares)	37,417	35,972	32,869
Diluted (shares)	37,417	35,972	32,869

CONSOLIDATED STATEMENTS OF COMP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Statement of Comprehensive Income [Abstract]
Net loss	$ (34,525)	$ (25,509)	$ (2,006)
Other comprehensive income (loss):
Net unrealized gain (loss) on securities, net of tax	443	(214)	(354)
Comprehensive loss	$ (34,082)	$ (25,723)	$ (2,360)

CONSOLIDATED STATEMENTS OF SHAR

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands	Total	Preferred StockConvertible	Common Stock	Accumulated Other Comprehensive Loss	Accumulated Deficit
Balance (in shares) at Dec. 31, 2013		32,441	11,971
Balance at Dec. 31, 2013	$ 31,124	$ 28,209	$ 6,382	$ (7)	$ (3,460)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock issued in connection with IPO offering, net of issuance costs of $7,093 (in shares)			9,200
Common stock issued in connection with IPO offering, net of issuance costs of $7,093	142,044		$ 142,044
Common stock issued in connection with conversion of convertible preferred stock upon IPO (in shares)		(32,441)	10,814
Common stock issued in connection with conversion of convertible preferred stock upon IPO	0	$ (28,209)	$ 28,209
Common stock issued in connection with conversion of contingently convertible notes upon IPO (in shares)			3,636
Common stock issued in connection with conversion of contingently convertible notes upon IPO	12,000		$ 12,000
Stock-based compensation	516		516
Excess net tax benefit related to IPO costs	421		421
Excess net tax provision related to share-based awards	(64)		$ (64)
Common stock issued in connection with stock option exercises (in shares)			188
Common stock issued in connection with stock option exercises	682		$ 682
Net loss	(2,006)				(2,006)
Unrealized loss on marketable securities available for sale	(354)			(354)
Balance (in shares) at Dec. 31, 2014		0	35,809
Balance at Dec. 31, 2014	184,363	$ 0	$ 190,190	(361)	(5,466)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation	8,940		8,940
Excess net tax benefit related to IPO costs	14		$ 14
Common stock issued in connection with stock option exercises (in shares)			11
Common stock issued in connection with stock option exercises	5		$ 5
Issuance of restricted shares of common stock (in shares)			904
Net loss	(25,509)				(25,509)
Unrealized loss on marketable securities available for sale	(214)			(214)
RSUs withheld for employee payroll taxes (in shares)			(207)
RSUs withheld for employee payroll taxes	(1,165)		$ (1,165)
Balance (in shares) at Dec. 31, 2015		0	36,517
Balance at Dec. 31, 2015	166,434	$ 0	$ 197,984	(575)	(30,975)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation	5,945		5,945
Excess net tax provision related to share-based awards	(31)		$ (31)
Common stock issued in connection with stock option exercises (in shares)			1,246
Common stock issued in connection with stock option exercises	8,116		$ 8,116
Issuance of restricted shares of common stock (in shares)			397
Net loss	(34,525)				(34,525)
Unrealized loss on marketable securities available for sale	443			443
RSUs withheld for employee payroll taxes (in shares)			(282)
RSUs withheld for employee payroll taxes	(4,565)		$ (4,565)
Balance (in shares) at Dec. 31, 2016		0	37,878
Balance at Dec. 31, 2016	$ 141,817	$ 0	$ 207,449	$ (132)	$ (65,500)

CONSOLIDATED STATEMENTS OF SHA7

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2014
Statement of Stockholders' Equity [Abstract]
Issuance costs		$ 7,093
Employee payroll taxes, amount withheld	$ 3,469

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Cash flows from operating activities
Net loss	$ (34,525)	$ (25,509)	$ (2,006)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization	296	381	501
Stock-based compensation	5,945	8,940	516
Amortization, net, of premium/discount on marketable securities	1,199	2,290	1,175
Deferred taxes	0	103	2,349
Excess net tax provision related to share-based awards	0	0	(64)
Loss on disposal of fixed assets	1	30	0
Changes in operating assets and liabilities:
Accounts receivable from collaborations	4,085	(855)	4,977
Prepaid expenses and other current assets	(572)	815	401
Accounts payable	232	(234)	(313)
Accrued liabilities	(1,412)	(1,038)	(2,403)
Accrued compensation	(162)	774	(1,586)
Deferred rent and lease incentives	(141)	1,075	(250)
Deferred revenue from collaborations	(2,467)	(3,764)	6,231
Other assets	(5)	121	(86)
Net cash (used in) provided by operating activities	(27,526)	(16,871)	9,442
Cash flows from investing activities
Purchases of marketable securities available for sale	(90,933)	(86,590)	(201,732)
Maturities of marketable securities available for sale	119,102	91,420	48,931
Net additions to property and equipment	(147)	(489)	(131)
Net cash provided by (used in) investing activities	28,022	4,341	(152,932)
Cash flows from financing activities
Value of equity awards withheld for tax liability	8,034	1,177	0
Proceeds from issuance of common stock	11,399	17	149,819
Payments for deferred offering costs	0	0	(1,545)
Net cash provided by (used in) financing activities	3,365	(1,160)	148,274
Increase (decrease) in cash and cash equivalents	3,861	(13,690)	4,784
Cash and cash equivalents—beginning of period	5,088	18,778	13,994
Cash and cash equivalents—end of period	8,949	5,088	18,778
Supplemental disclosure
Cash paid for income taxes	0	0	60
Unpaid deferred offering costs	0	0	5,548
Conversion of convertible preferred stock upon IPO	0	0	28,209
Conversion of contingently convertible debt, related party, upon IPO	$ 0	$ 0	$ 12,000

Business and Basis of Presentat

Business and Basis of Presentation	12 Months Ended
	Dec. 31, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Business and Basis of Presentation	Business and Basis of Presentation Business Kubota Pharmaceutical Holdings Co., Ltd. is a clinical stage ophthalmology company that is committed to translating innovation into a diverse portfolio of drugs and devices to preserve and restore vision for millions worldwide. We have a broad product candidate portfolio of multiple technologies in the preclinical and clinical development stages intended to provide solutions to ophthalmic disorders affecting millions of people worldwide. We are pursuing development of our product candidates for debilitating diseases such as diabetic retinopathy/diabetic macular edema, cataract, retinitis pigmentosa, Stargardt disease, and age-related macular degeneration. As part of our mobile Health application initiatives, we are also developing technologies intended to detect nascent disease progression to improve treatment outcome in patients with wet age-related macular degeneration , diabetic macular edema and other neovascular retinal diseases. References in this report to the "Company,", "we", "our" and "us" refer to Kubota Pharmaceutical Holdings Co., Ltd. and its subsidiaries, including Acucela Inc. Redomicile Transaction On December 1, 2016 Japan Standard Time, we completed a corporate reorganization resulting in the change in corporate domicile, pursuant to which Kubota Pharmaceutical Holdings Co., Ltd., a company organized under the laws of Japan, or Kubota Holdings, became the publicly traded parent company of Acucela Inc., a Washington corporation, or Acucela US. The change in domicile, or the Redomicile Transaction, was effected pursuant to an Agreement and Plan of Merger, dated as of August 9, 2016, by and among Acucela US, Acucela North America Inc., a Washington corporation and wholly-owned subsidiary of Kubota Holdings, or US Merger Co, and Kubota Holdings. At the effective time of the merger, (1) Acucela US was merged with US Merger Co, with US Merger Co surviving the merger as a wholly-owned subsidiary of Kubota Holdings and was renamed Acucela Inc., and (2) each issued and outstanding share of common stock of Acucela US, or Acucela US Common Stock, was cancelled and converted into the right to receive one share of Kubota Holdings common stock, or Kubota Holdings Common Stock. An aggregate of approximately 37.8 million shares of Kubota Holdings Common Stock was delivered pursuant to the Redomicile Transaction prior to the listing of Kubota Holdings Common Stock on the Mothers market of the Tokyo Stock Exchange, or TSE, under the code “4596.” Kubota Holdings is the successor registrant to Acucela US pursuant to Rule 12g-3(a) under the Securities Exchange Act of 1934, as amended. The authorized number of shares as of December 31, 2016 represents the number of authorized shares of Kubota Holdings. The authorized number of shares as of December 31, 2015 represents the number of authorized shares of Acucela US. Basis of Presentation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Acucela Inc. and Kubota Ophthalmics Co., Ltd. Intercompany accounts and transactions have been eliminated. In the opinion of the Company’s management, the consolidated financial statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation. The preparation of these consolidated financial statements in conformity with generally accepted accounting principles, or GAAP, requires management to make estimates and assumptions that affect the amounts reported in these consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. As the Company’s common stock is without par value, the Company has re-classified its prior year presentation of additional paid-in capital to conform with the current year presentation of common stock. Segments We operate in one segment, pharmaceutical product development. All of our significant assets are located in the United States. During the years ended December 31, 2016 , 2015 , and 2014 , all revenue was generated in the United States.

Significant Accounting Policies

Significant Accounting Policies	12 Months Ended
	Dec. 31, 2016
Accounting Policies [Abstract]
Significant Accounting Policies	Significant Accounting Policies Revenue Recognition One of our business strategies is to enter into collaboration agreements with pharmaceutical companies for the development and commercialization of product candidates. The terms of the agreements may include nonrefundable license fees, funding of research and development activities, payments based upon achievement of development milestones, payments based upon achievement of regulatory and revenue milestones, and product sales or royalties on product sales. We recognize revenue when four basic criteria have been met: (a) persuasive evidence of an arrangement exists; (b) services are rendered; (c) the fee is fixed or determinable; and (d) collectability is reasonably assured. Amounts received prior to satisfying these criteria are recorded as deferred revenue. Revenue recognized for the years ended December 31, 2016 , 2015 , and 2014 consists entirely of amounts derived from our collaboration agreements with Otsuka (See "Note 9: Collaboration and License Agreements" in the Notes to the Consolidated Financial Statements in this report). Multiple Element Arrangements Our collaboration agreements with Otsuka were multiple element arrangements which were analyzed to identify whether the deliverables included in the agreements qualify as separate units of accounting. We determined that the activities associated with development met the criterion for a separate unit of accounting, since these services had value to Otsuka on a standalone basis. Best estimate of the selling price, or BESP, is based on our analysis of the value of the services provided and consideration of the fees charged by third party vendors for similar development services. We determined that the fees charged for the research services are competitive with the price other third-party vendors charge for similar research services. There were no rights of return in our collaboration agreements. Payments that are contingent upon the occurrence of future events that are not exclusively within our control are excluded from the allocable arrangement consideration until the contingency is resolved. Revenue from development efforts is recognized as services are incurred by third-parties. Revenue earned by full-time or part-time salaried employees is recognized using a proportional performance model based on hours worked. When we are able to estimate the total amount of services under a unit of accounting and such performance obligations are provided on a best-efforts basis, revenue is recognized using a proportional performance model. Costs incurred to date compared to total expected costs are used to determine proportional performance, as this is considered to be representative of the delivery of outputs. Significant judgment is required in determining the level of effort required and the period over which we are expected to complete our performance obligations under each unit of accounting. Deferred Revenue Amounts received prior to satisfying the above revenue recognition criteria are recorded as deferred revenue. 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 cash and money market funds. We have classified our entire investment portfolio, which consists of corporate debt securities, commercial paper, securities issued by U.S. government agencies 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 income (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 12 months from the balance sheet date as long-term and with a maturity less than 12 months from the balance sheet date as short-term. Concentration of Credit Risk Our accounts receivable, as of December 31, 2016 and December 31, 2015 , 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. Property and Equipment Property and equipment are recorded at cost, less accumulated depreciation. We provide for depreciation of equipment on a straight-line basis over an estimated useful life of five years, except leasehold improvements which are amortized on a straight-line basis over the shorter of the lease term or estimated useful life of the assets. The estimated useful lives of major classes of depreciable assets are as follows: Laboratory and computer equipment 5 years Leasehold improvements 2-7 years Office furniture and equipment 5 years Expenditures for maintenance and repairs are expensed as incurred. Long-lived assets held for use are subject to an impairment assessment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the carrying value is no longer recoverable based upon the undiscounted future cash flows of the asset, the amount of the impairment is the difference between the carrying amount and the fair value of the asset. We have recorded no impairment charges for the periods presented. Fair Value We measure and report at fair value our cash equivalents and investment securities. Fair value is defined as the exchange price that would be received for 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. Valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The carrying amounts reflected in the balance sheets for accounts receivable and accounts payable approximate fair value due to their short-term nature. Stock-Based Compensation Stock-based compensation cost is estimated at the grant date based on the award’s fair value and is recognized on a straight line basis as expense, less estimated forfeitures, over the requisite service period, which is generally the vesting period. The fair value of stock options under our outstanding equity awards is calculated using the Black-Scholes option pricing model. This model requires us to make assumptions to determine expected risk-free interest rates, stock price volatility, dividend yield, and weighted-average option term. We recognize stock-based compensation expense over the period from the date of grant to the date when the award is no longer contingent on either the employee providing additional services to the Company or the market price of the Company’s common stock reaching a certain level, for a specified minimum period of time (the vesting period). Any unexercised options expire in five to ten years. We estimate the fair value of each grant as a single award and amortize that value on a straight-line basis into compensation expense over the option’s vesting period. The Company also utilizes a forfeiture rate of 10% which is embedded in our compensation expense. Once terminations occurs, the Company records the actual forfeiture credits against expense incurred to date. The fair value of restricted stock units and restricted stock awards is equal to the market price of Kubota Holdings' stock on the date of grant. We amortize that value on a straight line basis into compensation expense, over the restricted share’s vesting period. Research and Development Costs Research and development costs include salaries paid to clinical development staff and scientists, fees paid to external service providers and to contract research organizations to conduct research and development activities. Costs may also include laboratory supplies, license fees, consulting, travel, fees paid to third parties involved in research and development activities, and an allocated portion of certain general operating costs, including facility and information technology costs. These research and development costs are expensed as incurred. Non-refundable advance payments related to research and development collaboration agreements are currently expensed as incurred as there is no assurance that the pre-clinical compounds will be used or rendered for future research and development. If collaboration projects have not yet begun to incur research and development expenses, we will record the non-refundable advance as a prepayment until such time as we may begin to expense as incurred. We will evaluate each reporting period whether non-refundable fees show characteristics that will be used or rendered for future research and development pursuant to an executory contractual arrangement. At such point, we may then decide to defer and capitalize these payments. We expense payments to acquire contractual rights to licensed technology as incurred, when the future economic benefit may be foreseen, but cannot be measured with any degree of certainty. Refundable advance payments are recorded as a refundable deposit. In the event the fee becomes nonrefundable, it is capitalized or expensed, based on the certainty of any future economic benefit. 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. During 2016, the Company adopted an accounting standard that simplified the presentation of deferred income taxes by requiring deferred tax assets and liabilities be classified as noncurrent in a classified statement of financial position. The Company has adopted this accounting standard prospectively; accordingly, the prior period amounts in the Company’s consolidated balance sheets within this Annual Report on Form 10-K were not adjusted to conform to the new accounting standard. The adoption of this accounting standard was not material to the Company’s consolidated financial statements. Foreign Currency Translation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Acucela Inc. and Kubota Ophthalmics Co., Ltd. The functional currency of the Company and Kubota Ophthalmics Co., Ltd. is the Japanese yen and the functional currency of Acucela Inc. is the U.S. dollar. Any realized and unrealized gains and losses are not significant as of December 31, 2016.

Recent Accounting Pronouncement

Recent Accounting Pronouncements	12 Months Ended
	Dec. 31, 2016
New Accounting Pronouncements and Changes in Accounting Principles [Abstract]
Recent Accounting Pronouncements	Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers: Topic 606 (ASU 2014-09), to supersede nearly all existing revenue recognition guidance under GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than required under existing GAAP, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. Adoption of ASU 2014-09 can be done using either of two methods: (i) retrospective to each prior reporting period presented with the option to elect certain practical expedients as defined within ASU 2014-09; or (ii) retrospective with the cumulative effect of initially applying ASU 2014-09 recognized at the date of initial application and providing certain additional disclosures as defined per ASU 2014-09. In August 2015, FASB issued Accounting Standards Update No. 2015-14, Revenue from Contracts with Customers - Deferral of the Effective Date: Topic 606 (ASU 2015-14) that deferred the effective date of ASU 2014-09 by one year. In April 2016, FASB issued Accounting Standards Update No. 2016-10 Revenue from Contracts with Customers - Identifying Performance Obligations and Licenses: Topic 606 (ASU 2016-10) that clarified accounting for licenses of intellectual property as well as identification of the distinct performance obligations of a contract. In May 2016, FASB issued Accounting Standards Update No. 2016-12 Revenue from Contracts with Customers - Narrow Scope Improvements and Practical Expedients: Topic 606 (ASU 2016-12) which did not change core principles but clarified the guidance on assessing collectability, presenting sales taxes, measuring non cash consideration, and certain transition matters. Application of the new revenue standard, as amended, is required for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. Following termination of the Company's collaboration agreements with Otsuka and completion of the wind-down period, we do not anticipate recognizing any future revenues under the Otsuka collaboration agreements. Currently, the Company is pursuing various partnering efforts and may generate revenue through future collaborations with strategic partners. If we enter revenue-generating agreements, we will evaluate the impact of adopting of ASU 2014-09. In February 2016, FASB issued Accounting Standards Update No. 2016-02, Leases: Topic 842 (ASU 2016-02). The new guidance is intended to increase transparency and comparability for organizations by recognizing lease assets and liabilities on the balance sheet and requiring additional financial disclosure on leasing arrangements. This amendment is primarily designed to address lessee accounting for operating leases and require lessees to account for all leases as assets and liabilities on the balance sheet. Adoption of ASU 2016-02 is required for fiscal reporting periods beginning after December 15, 2018 including interim reporting periods within those fiscal years. We are currently evaluating the potential impact of the pending adoption of ASU 2016-02 on our consolidated financial statements. In March 2016, FASB issued Accounting Standards Update No. 2016-09, Compensation - Stock Compensation: Topic 718 (ASU 2016-09): Improvements to Employee Share Based Accounting. The new guidance is intended to simplify the accounting for share based payment award transactions. The amendments in the update include the following aspects for share based accounting: accounting for income taxes, classification of excess tax benefits on the statement of cash flows, forfeitures, minimum statutory tax withholding requirements, and classification of employee taxes paid on the statement of cash flows when an employer withholds shares for tax withholding purposes. Adoption of ASU 2016-09 is required for fiscal reporting periods beginning after December 15, 2016 including interim reporting periods within those fiscal years. We do not anticipate that the adoption of ASU 2016-09 will result in a material impact on our consolidated financial statements. Other than noted above, we do not expect the adoption of recently issued accounting pronouncements to have a significant impact on our results of operations, financial position or cash flow.

Cash and Cash Equivalents and I

Cash and Cash Equivalents and Investments	12 Months Ended
	Dec. 31, 2016
Fair Value Disclosures [Abstract]
Cash and Cash Equivalents and Investments	Cash and Cash Equivalents and Investments Under FASB Accounting Standards Codification Topic 820, Fair Value Measurements and Disclosures, 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. Cash, cash equivalents and investments at December 31, 2016 and December 31, 2015 include all cash, money market funds, corporate debt securities, U.S. government agency securities, commercial paper and certificates of deposit. We measure the fair value of money market funds based on quoted prices in active markets for identical assets or liabilities. We consider our investments in corporate debt securities, U.S. government agency securities, commercial paper and certificates of deposit as available-for-sale. Available-for-sale securities are stated at fair value. Available for sale securities were valued either based on recent trades 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 December 31, 2016 or December 31, 2015 . The following table presents information about our financial assets that have been measured at fair value on a recurring basis as of December 31, 2016 and December 31, 2015 , and indicates the fair value hierarchy of the valuation inputs utilized to determine such fair value (in thousands): December 31, 2016 Amortized Cost Gross Unrealized Fair Value Holding Gains Holding Losses < 12 mos Holding Losses > 12 mos Cash $ 2,633 $ — $ — $ — $ 2,633 Level 1 Securities: Money market funds 6,316 — — — 6,316 Level 2 Securities: Commercial Paper 25,988 1 (9 ) — 25,980 U.S. government agencies 27,585 — (19 ) (14 ) 27,552 Corporate debt securities 77,459 6 (48 ) (52 ) 77,365 Certificates of deposit 1,440 3 — — 1,443 $ 141,421 $ 10 $ (76 ) $ (66 ) $ 141,289 December 31, 2015 Amortized Cost Gross Unrealized Fair Value Holding Gains Holding Losses < 12 mos Holding Losses > 12 mos Cash $ 3,856 $ — $ — $ — $ 3,856 Level 1 Securities: Money market funds 1,232 — — — 1,232 Level 2 Securities: U.S. government agencies 10,020 — (37 ) — 9,983 Corporate debt securities 144,352 — (435 ) (96 ) 143,821 Certificates of deposit 7,640 1 (7 ) (1 ) 7,633 $ 167,100 $ 1 $ (479 ) $ (97 ) $ 166,525 As of December 31, 2016 , $13.2 million of corporate debt securities and $5.7 million of U.S. government agency securities, mature in greater than one year, but less than two years. All other investment securities held as of December 31, 2016 mature within 12 months. We do not intend to sell the investments and it is not more likely than not that we will be required to sell the investments before recovery of our amortized cost basis, which may be maturity. 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 December 31, 2016 .

Property and Equipment

Property and Equipment	12 Months Ended
	Dec. 31, 2016
Property, Plant and Equipment [Abstract]
Property and Equipment	Property and Equipment Property and equipment as of December 31, 2016 and 2015 consist of the following (in thousands): December 31, 2016 2015 Laboratory and computer equipment $ 2,921 $ 2,981 Leasehold improvements 1,423 1,423 Office furniture and equipment 497 366 4,841 4,770 Less accumulated depreciation and amortization (4,071 ) (3,850 ) Property and equipment, net $ 770 $ 920

Shareholders' Equity

Shareholders' Equity	12 Months Ended
	Dec. 31, 2016
Stockholders' Equity Note [Abstract]
Shareholders' Equity	Shareholders’ Equity Common Stock On December 1, 2016 Japan Standard Time, we completed the Redomicile Transaction resulting in the change in corporate domicile, pursuant to which Kubota Holdings became the publicly traded parent company of Acucela Inc., a Washington corporation, or Acucela US. At the effective time of the merger, Acucela US was merged with Acucela North America Inc. and the merged company was renamed as Acucela Inc. Thereafter, each issued and outstanding share of Acucela US Common Stock was cancelled and converted into the right to receive one share of Kubota Holdings Common Stock. Kubota Holdings Common Stock is listed on the on the Mothers market of the Tokyo Stock Exchange, or TSE, under ticker symbol “4596.” In February 2014 , upon the closing of the initial public offering, or IPO, of Acucela US, all shares of Acucela US's outstanding convertible preferred stock automatically converted into 10,813,867 shares of Acucela US Common Stock. Acucela US issued 9,200,000 shares of Acucela US 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, $12.0 million of outstanding principal underlying convertible notes that Acucela US issued to affiliates of SBI Holdings, Inc. in May 2006 automatically converted into 3,636,365 shares of Acucela US Common Stock, after an intermediate conversion into Series C preferred shares. The number of shares issued upon conversion was determined by dividing the principal amount of the notes by $3.30 . In connection with the Redomicile Transaction, each issued and outstanding share of Acucela US Common Stock was cancelled and converted into a right to receive one share of Kubota Holdings Common Stock. Changes in Accumulated Other Comprehensive Loss (in thousands): Years Ended December 31, 2016 2015 2014 Beginning balance $ (575 ) $ (361 ) $ (7 ) Current period other comprehensive income (loss), net of tax 443 (214 ) (354 ) Ending balance $ (132 ) $ (575 ) $ (361 ) The changes in accumulated other comprehensive loss relate to unrealized holding gains and losses in available-for-sale securities.

Share-Based Compensation

Share-Based Compensation	12 Months Ended
	Dec. 31, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Share-Based Compensation	Share-Based Compensation Equity-Based Incentive Plans Prior to the Redomicile Transaction, employees held shares outstanding in both the 2002 Stock Option and Restricted Stock Plan, the 2012 Equity Incentive Plan and the 2014 Equity Incentive Plan, as amended, hereafter called the Acucela US Equity Plans. Upon closing of the Redomicile Transaction, the 2002 Stock Option and Restricted Stock Plan, the 2012 Equity Incentive Plan and the 2014 Equity Incentive Plan of Acucela US were cancelled and the Kubota Pharmaceutical Holdings Co., Ltd. 2016-2026 Year Stock Option Plan, or the Kubota Holdings Stock Plan, became effective and was administered by Kubota Holdings. The Redomicile Transaction resulted in a share conversion between Kubota Holdings and Acucela US, pursuant to which the following substitution awards were issued, hereinafter referred to collectively as the Substitution Awards: • Each unexpired, unexercised and outstanding Acucela US option was cancelled, and converted into a stock acquisition right, or stock option, issued by Kubota Holdings, with the same grant date, exercise price, vesting conditions and material terms as each such Acucela US option. These are known as Series 1 through 19 stock option substitution awards; • Each issued and outstanding Acucela US restricted stock unit, or RSU, was cancelled, and converted into a stock option with a 1 Japanese yen exercise price, issued by Kubota Holdings, with the same vesting conditions and material terms as each such cancelled RSU. These are known as Series 20 restricted stock unit substitution awards; • All outstanding shares of restricted stock awards granted by Acucela US were cancelled, and converted into shares of Kubota Holdings Common Stock. Kubota Holdings Common Stock was distributed to holders with restrictions that are substantially similar in all material respects to such cancelled stock. As of December 31, 2016, the Kubota Holdings Stock Plan is the only equity incentive plan under which equity awards may be granted in the future. As of December 31, 2016, no awards were outstanding under Kubota Holdings Stock Plan. As of December 31, 2015, we had three equity incentive plans under which equity awards were outstanding: the 2014 Equity Incentive Plan, as amended, the 2012 Equity Incentive Plan and the 2002 Stock Option and Restricted Stock Plan, or collectively, the Acucela US Equity Plans. As of December 31, 2016, all outstanding awards were Substitution Awards. We record compensation expense based on the fair value for all stock-based awards, which amounted to $5.9 million , $8.9 million , and $0.5 million for the years ended December 31, 2016, 2015 and 2014, respectively. As of December 31, 2016 , 1,513,313 shares of common stock were reserved to be issued in conjunction with the Kubota Holdings Stock Plan. The Kubota Holdings Stock Plan allows for the granting of stock options to employees, board members and consultants. Stock options granted to U.S. employees may qualify for treatment as incentive stock options under the U.S. Internal Revenue Code. On March 2015, the Board approved amendments to outstanding equity awards granted under the Acucela US Equity Plans to our employees, executive officers and non-employee members of our Board. The amendments provided that for employees and executive officers, if their employment is terminated without Cause or for Good Reason (as such terms are defined in the Change in Control Agreements) following a qualifying change in control of the Company, then any unvested portion of the awards held by such terminated employees and executives will become immediately vested. It was determined that the events of the Company's May 1, 2015 special shareholders meeting constituted a Qualifying Change in Control as defined in the Acucela US Equity Plans. Prior to the Qualifying Change in Control event, employees, executive officers and non-employee members of our Board were permitted to exercise their awards up to three months after termination. The Qualifying Change in Control changed the allowable post-termination exercise period from three to twelve months. The resulting modification resulted in $0.1 million of additional expense in 2015 and affected 27 employees and one non-employee member of our Board. The Qualifying Change in Control event in May 2015 accelerated the vesting of Acucela US options previously granted to our former non-employee directors as well as Acucela US options and Acucela US RSUs granted to our former President and Chief Executive Officer (see "Note 12: Commitments" in the Notes to the Consolidated Financial Statements of this report). Equity Awards During 2016, the Board approved the grant of 1,432,500 Acucela US options, of which 780,000 options were granted to our CEO, 220,000 options were granted to the Board, 120,000 options were granted to our Executive Vice President of Research and Development and 312,500 were granted to employees of Acucela Inc. during the year. The grant to our CEO included 390,000 Acucela US options that will vest over a three -year period, with 33% vesting after one year and 67% vesting on a monthly pro rata basis thereafter. He was also granted an additional 390,000 market-based Acucela US options which fully vested as of March 31, 2016. The grants to our Board vest in equal monthly installments over four years from the grant date. For the grant to our Executive Vice President of Research and Development, 7,500 Acucela US options vested on September 1, 2016. Thereafter, 2,500 Acucela US options will vest on the first day of each month, such that the awards are fully vested as of June 1, 2020. Of the 312,500 Acucela US options granted to employees, the awards consisted of the following vesting conditions: • 104,800 options were granted to new hires and are subject to a four year vesting period, with 25% of the option vesting after the employee's one year anniversary and the remaining 75% of the options vesting on a monthly pro rata basis over the ensuing three years. • 14,000 options were granted to a new hire and are subject to a four year vesting period, with 25% vesting after the employee's one year anniversary and the remaining 75% of the options vesting every three months thereafter, such that the award becomes fully vested and exercisable on September 16, 2020. • 159,700 options granted to existing employees vest and become exercisable 1/16th on January 11, 2017 and every three months thereafter, such that the award becomes fully vested and exercisable on October 11, 2020. • 34,000 options were granted to employees due to promotions and are subject to vest and become exercisable 1/16th on December 16, 2016 and every three months thereafter, such that the award becomes fully vested and exercisable on September 16, 2020. During 2015, the Board approved the grant of 1,509,872 Acucela US RSUs, 477,061 Acucela US restricted stock awards and 1,500,903 of Acucela US options to employees and senior executives of Acucela Inc. The 2015 awards are subject to a four -year vesting, with 25% vesting on the first year anniversary of the grant date and the remaining 75% on a monthly pro-rata basis over the ensuing three years. Option Activity The following is a summary of our Substitution Awards Series 1-19 as of December 31, 2016 . For further information please refer to the discussion of the Substitution Awards set forth above. Year Ended December 31, 2016 Stock options: Shares Underlying Options Weighted Average Aggregate Intrinsic Value (in thousands) Weighted Average Remaining Contractual Term (in years) Outstanding at beginning of period 1,854,030 $ 6.30 $ 2,244 Granted 1,432,500 11.61 Exercised (1,235,794 ) 6.56 8,595 Forfeited (40,929 ) 5.90 Expired (219 ) 8.22 Outstanding at end of period 2,009,588 $ 9.92 $ 1,865 9.1 Vested and exercisable at end of period 192,883 $ 7.88 $ 393 8.6 Vested and expected to vest at end of period 1,827,918 $ 9.90 $ 1,718 9.0 Supplemental Information 2016 2015 2014 Stock options: Weighted average grant date fair value per share - granted $ 6.71 $ 3.57 $ 5.00 Total intrinsic value of options exercised (in thousands) $ 8,595 $ 45 $ 886 Total fair value of options vested (in thousands) $ 920 $ 3,768 $ 482 The fair value of stock options granted for the years ended December 31, 2016 , 2015 and 2014 was calculated using the Black-Scholes option-pricing model and applied the following assumptions: Years ended December 31, 2016 2015 2014 Risk-free interest rate 1.2% - 2.0% 1.3%-1.8% 1.5%–2.5% Expected term 3.5 - 6.3 years 6.3 years 6.2 years Dividend yield —% —% —% Expected volatility 62% - 70.6% 67% 70% Risk-Free Interest Rate. We base the risk-free interest rate used in our option-pricing model on the implied yield currently available on U.S. Treasuries issued with an equivalent term. Where the expected term of our stock-based awards does not correspond with the term for which an interest rate is quoted, we perform a straight-line interpolation to determine the rate from the available term maturities. Expected Term. The expected term used in our option-pricing model represents the period that our stock-based awards are expected to be outstanding and is determined based on the simplified method. The simplified method uses a simple average of the vesting and original contractual terms of the option. We use the simplified method to determine the expected option term, since our stock option exercise experience does not provide a reasonable basis upon which to estimate the expected option term. Dividend Yield. We have never paid cash dividends and have no present intention to pay cash dividends in the future. Accordingly, the expected dividend used in our option-pricing model is zero . Expected Volatility. The volatility factor used in our option-pricing model is estimated using a probability weighted average of the Company's own volatility and the average volatility of comparable public companies. Due to lack of trading history for the Company, expected volatility has been based on an evaluation of the historical volatility of comparable public companies' share price, particularly over the historical period commensurate with the expected term. In 2016, we added the Company's share price as part of the evaluation and probability weighted the average of two groups. The expected term of the instruments has been based on historical experience and general option holder behavior. RSU and Restricted Award Activity The following is a summary of our Substitution Awards under Series 20 and a restricted stock award as of December 31, 2016 . For further information please refer to our discussion of the Substitution Awards set forth above. Years Ended December 31, 2016 RSUs and restricted stock awards: Shares Weighted Average Grant Date Fair Value Outstanding at beginning of period 1,195,931 $ 5.61 Granted — — Vested (454,148 ) 5.60 Forfeited (309,253 ) 5.51 Outstanding at end of period 432,530 $ 5.71 The vesting schedules for all outstanding awards as of December 31, 2016 are as follows: Type of Award Vesting Schedule Group Stock Options 25% after the first year and the remaining 75% of award vesting on a monthly pro rata basis Employees and Executive Officers Stock Options Vested on a monthly pro rata basis Board RSUs 25% vested annually for four years Employees Restricted Awards and RSUs 25% after the first year and the remaining 75% of award vesting on a monthly pro rata basis Executive Officers Stock Options 1/16 vests on January 11, 2017 and the remaining shares vest on a quarterly pro-rata basis, such that the award becomes fully vested and exercisable on October 11, 2020. Employees Stock Options 1/16 vests on December 16, 2016 and the remaining shares vest on a quarterly pro-rata basis, such that the award becomes fully vested and exercisable on September 16, 2020 Employees Stock Options 25% vests on September 16, 2017 and the remaining shares vest on a quarterly pro-rata basis, such that the award becomes fully vested and exercisable on September 16, 2020 Employees Stock Options 33.3% vests after the first year and the remaining 66.7% vest on a monthly pro-rata Executive Officer Stock Options Market based award: 1/3 vesting at 1,102.32 Yen/share, 1/3 vesting at 1,469.76 Yen/share, 1/3 vesting at 1,837.20 Yen/share Executive Officer Stock Options 7,500 shares vest September 1, 2016. Thereafter, 2,500 shares vest first day of each month until fully vested as of June 1, 2020. Executive Officer Stock options have terms of five to ten years. Any unexercised stock options expire at the end of the term. As of December 31, 2016 , there was unrecognized compensation cost related to non-vested options of $7.8 million and unrecognized compensation cost related to RSUs and restricted stock awards of $2.3 million granted under the Equity Plans, respectively. The cost is expected to be recognized over a weighted average period of 3.0 years and 2.4 years, respectively.

Income Taxes

Income Taxes	12 Months Ended
	Dec. 31, 2016
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes Deferred tax assets as of December 31, 2016 and 2015 , are as follows (in thousands): December 31, 2016 2015 Deferred tax assets: Net operating loss carryforwards $ 17,348 $ 6,050 Research & development tax credit carry forwards 1,029 1,029 Deferred rent 376 427 Property & equipment 152 140 Compensation 2,680 2,810 Alternative minimum tax credits 259 259 Other 18 7 Unrealized losses 141 141 Total $ 22,003 $ 10,863 Less: valuation allowance (22,003 ) (10,863 ) Net deferred tax asset $ — $ — At December 31, 2016 the company had federal research and development tax credit and net operating loss carryforwards of $1.0 million and $50.9 million , respectively. Use of the carryforwards is limited based on the future income of the company. The research and development tax credit carryforward will begin expiring in 2028, and the net operating loss carryforward will begin expiring in 2035. Approximately $0.3 million of the research and development tax credit carryforward relates to tax deductible stock-based compensation in excess of amounts recognized for financial statement purpose. To the extent that research and development tax credit carryforwards, if realized, relate to stock-based compensation, the resulting tax benefits will be recorded to shareholders' equity, rather than to results of operations. The components of the tax provisions are as follows (in thousands): Years Ended December 31, 2016 2015 2014 Federal: Current $ — $ (2 ) $ (79 ) Deferred — 43 2,400 — 41 2,321 State: Current $ 1 $ — $ 19 Deferred — 9 19 1 9 38 Total $ 1 $ 50 $ 2,359 The reconciliation of the statutory federal income tax rate to the Company's effective tax rate is as follows: Years Ended December 31, 2016 2015 2014 Statutory Rate - Japan 33.0 % N/A N/A Foreign Rate Differential 1.0 % N/A N/A Federal Statutory rate 34.0 % 34.0 % 34.0 % State income taxes (0.1 ) 0.2 6.8 Stock compensation (1.6 ) (0.8 ) (7.8 ) Other permanent items (0.1 ) (0.1 ) 5.5 Meals and entertainment — — 7.1 Return to provision items — — (6.0 ) Other, net — — (3.6 ) Valuation allowance (32.2 ) (33.5 ) 631.7 Effective tax rate — % (0.2 )% 667.7 % A full valuation allowance was established for deferred income tax assets, as, it is more likely than not that deductible temporary differences and net operating loss and credit carryforwards will not be realized through future taxable income. We recorded a full valuation allowance for the year ended December 31, 2016 of $22.0 million against our net operating loss, for a net increase of $11.1 million from 2015. During the year ended December 31, 2015, we recorded a full valuation allowance of $10.9 million against our net operating loss, for a net increase of $8.6 million from the previous year. We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. However, there are no material unrecognized tax benefits as of December 31, 2016 , or 2015 . Furthermore, we do not anticipate any significant changes in our unrecognized tax benefits over the next 12 months. We recognize interest and penalties related to our liabilities for uncertain tax positions in income tax expense. However, during the years ended December 31, 2016 , 2015 , and 2014 , we did not have any accrued interest or penalties associated with any unrecognized tax benefits

Collaboration and License Agree

Collaboration and License Agreements	12 Months Ended
	Dec. 31, 2016
Revenue Recognition [Abstract]
Collaboration and License Agreements	Collaboration and License Agreements Collaboration with Otsuka During the years ended December 31, 2016 , 2015 and 2014, we recognized $7.6 million , $24.1 million and $35.4 million , respectively, of revenues in performance of our collaborative co-development agreement with Otsuka. Emixustat Collaboration In 2008 , we entered into a definitive agreement with Otsuka to co-develop and commercialize Emixustat, our compound for geographic atrophy associated with dry AMD and for other potential indications in the United States, Canada, and Mexico, or Shared Territory. Under the agreement, we retained all rights in Europe, South America, Central America, the Caribbean, and Africa, or Acucela Territory, and Otsuka acquired the exclusive development and commercialization rights to the compound in Asia, the Middle East, and selected markets in the rest of the world, or Otsuka Territory. Otsuka paid us a $5.0 million nonrefundable up-front license fee upon its entry into the agreement. Under the agreement, Otsuka funded all development activities in the Shared Territory through Phase 2, up to $40.0 million . In 2012, the cost of development activities exceeded $40.0 million and Otsuka agreed to continue the agreement and equally share development costs with us. Prior to Otsuka’s termination of the agreement in June 2016, we had the potential to receive development milestones totaling $82.5 million as follows: i. Initial Indication— $55.0 million a. $5.0 million upon initiation of a Phase 2b/3 clinical trial in the United States (received in the year ending December 31, 2013) b. $5.0 million upon initiation of a Phase 3 clinical trial in the United States, or the filing of a NDA with the FDA in the United States, if a second Phase 3 clinical trial is not needed c. $15.0 million upon filing of a NDA with the FDA in the United States d. $20.0 million upon receipt of approval by the FDA of an NDA in the United States e. $10.0 million upon receipt of approval by the regulatory authority of a marketing approval application in Japan ii. Second Indication— $27.5 million a. $5.0 million upon initiation of a Phase 3 clinical trial in the United States b. $7.5 million upon filing of an NDA with the FDA in the United States c. $10.0 million upon receipt of approval by the FDA of an NDA in the United States d. $5.0 million upon receipt of approval by the regulatory authority of a marketing approval application in Japan Under the agreement, Otsuka funded our share of the Phase 2 development costs in the form of a secured promissory note. The promissory note provides that (a) interest will accrue daily and be calculated on the basis of 360 days per year and be payable on all amounts advanced to us from the date of advance until paid in full; (b) unpaid interest will compound annually; and (c) the applicable interest rate will be adjusted quarterly to reflect the then-effective rate equal to the three-month London InterBank Offered Rate, or LIBOR, in the “Money Rates” column of The Wall Street Journal as of the first business day of each calendar quarter, plus 3% ; and (d) all amounts are payable in U.S. dollars. The agreement includes a security interest agreement that grants Otsuka a first priority interest on our interests in net profits and royalty payments, and on our interests in ownership of the related collaboration compounds and collaboration products and the underlying intellectual property rights, both in the Shared Territory and the Acucela Territory. The loan is repayable only in the event that proceeds are generated by any future product sales under the collaboration agreement or by the sale or license of collaboration compounds and collaboration products developed under the agreement outside North America and Otsuka’s sole territory. As the agreement contained elements of funded development, we evaluated the agreement to determine if our obligation to Otsuka under the secured promissory note should be accounted for as a liability to repay a loan or as an obligation to perform contractual services. To conclude that a liability to repay a loan does not exist, the transfer of the financial risk involved with research and development from us to Otsuka must be substantive and genuine. We have determined that our obligation to Otsuka should be accounted for as an obligation to perform contractual services because repayment depends solely on the results of development having future economic benefit. Consequently, amounts received from Otsuka for our share of development costs under the agreement are recognized as revenue. For the years ended December 31, 2016 , 2015 , and 2014 , we have recognized cumulative revenue of approximately $64.6 million , $61.5 million , and $49.7 million respectively. In June 2016, Otsuka terminated their collaboration and licensing agreements with us. Going forward, we expect our revenues with Otsuka to reduce to zero. As of December 31, 2016 and 2015 , the contingently repayable funding has accrued $7.2 million and $4.6 million of interest, respectively. Our collaboration agreements with Otsuka were multiple element arrangements which were analyzed to identify whether the deliverables included in the agreements qualify as separate units of accounting. We determined that the activities associated with development met the criterion for a separate unit of accounting, since these services had value to Otsuka on a standalone basis. Best estimate of the selling price, or BESP, is based on our analysis of the value of the services provided and consideration of the fees charged by third party vendors for similar development services. We determined that the fees charged for the research services are competitive with the price other third-party vendors charge for similar research services. There were no rights of return in our collaboration agreements. Payments that are contingent upon the occurrence of future events that are not exclusively within our control are excluded from the allocable arrangement consideration until the contingency is resolved. Revenue from development efforts is recognized as services are incurred by third-parties. Revenue earned by full-time or part-time salaried employees is recognized using a proportional performance model based on hours worked. When we are able to estimate the total amount of services under a unit of accounting and such performance obligations are provided on a best-efforts basis, revenue is recognized using a proportional performance model. Costs incurred to date compared to total expected costs are used to determine proportional performance, as this is considered to be representative of the delivery of outputs. Significant judgment is required in determining the level of effort required and the period over which we are expected to complete our performance obligations under each unit of accounting. For the years ended December 31, 2016 , 2015 , and 2014 , we recognized $7.6 million , $24.1 million and $35.4 million , respectively, of revenue associated with development activities. No milestone payments were made for the years ended December 31, 2016 , 2015 , and 2014 . OPA-6566 Collaboration In 2010, Otsuka and we entered into a definitive agreement to develop OPA-6566, Otsuka’s proprietary compound for the treatment of glaucoma. We evaluated the agreement and determined that the development activities under the agreement represented the only deliverable under the arrangement. Revenue from development activities is recognized as services are performed. During the years ended December 31, 2016 , 2015 , and 2014 , we recognized no revenue in performance of the agreement. Termination of the Emixustat Agreement and OPA-6566 Agreement with Otsuka Pharmaceutical We received written notice from Otsuka on June 13, 2016, stating that Otsuka had elected to terminate in their entirety the Co-Development and Commercialization Agreement by and between the Company and Otsuka, dated September 4, 2008, or the Emixustat Agreement, and the Development and Collaboration Agreement by and between the Company and Otsuka, dated September 15, 2010, or the OPA-6566 Agreement. In accordance with the terms of the respective agreements, the terminations of the Emixustat Agreement and the OPA-6566 Agreement were effective on June 27, 2016, or the Termination Date. Otsuka’s written notice stated that its decision to terminate was based on the recently announced trial results from our Phase 2b/3 study of Emixustat in patients with geographic atrophy secondary to dry age-related macular degeneration, or AMD. Otsuka’s terminations of the Emixustat Agreement and the OPA-6566 Agreement were in accordance with the terms of such agreements without modification or amendment thereto. As of the Termination Date, rights granted by the Company to Otsuka pursuant to the Emixustat Agreement reverted to the Company. In addition, the Company and Otsuka have certain post-termination obligations as set forth in the Emixustat Agreement, including Otsuka’s responsibility for the cost of certain wind-down development activities for a six month period following the date of the termination notice. Effective on the Termination Date, Otsuka granted to the Company a perpetual, fully paid-up, non-exclusive license, with the right to grant sublicenses, under certain Otsuka intellectual property and data that are necessary or useful in the development, manufacture and commercialization of Emixustat. Wind-down costs for the six-month period ended December 31, 2016 totaled $1.2 million and we do not anticipate further revenues in the future. The Emixustat Agreement requires the Company to pay a low single-digit percentage royalty to Otsuka based on net sales of approved products resulting from the Company’s continued development and commercialization of Emixustat after the Termination Date. Such royalties will be capped at an amount equal to the total amount of the development costs and research costs already funded by Otsuka prior to the Termination Date, with interest. Pursuant to the terms of the OPA-6566 Agreement, which terms have been previously disclosed in our filings with the SEC, including our Annual Report on Form 10-K filed on March 11, 2016, the OPA-6566 Agreement granted us an opt-in right to co-develop and co-promote OPA-6566, Otsuka’s proprietary compound for the treatment of glaucoma, in the United States. We did not previously exercise our opt-in right. Pursuant to the OPA-6566 Agreement, all licenses granted by Otsuka to us expired on the Termination Date, and we will have no obligation to share development or commercialization costs that are incurred after the Termination Date. The foregoing is only a brief description of the material terms of the Emixustat Agreement and the OPA-6566 Agreement, does not purport to be complete and is qualified in its entirety by reference to the Emixustat Agreement and the OPA-6566 Agreement that were filed as Exhibits 10.9 and 10.10, respectively, to our Registration Statement on Form S-1, as amended (File No. 333-192900) filed with the SEC on December 17, 2013. Collaboration Agreement with EyeMedics In December 2016, we entered into the Collaboration Agreement, with EyeMedics. Pursuant to the terms of the Collaboration Agreement, we and EyeMedics will jointly conduct through human proof of concept the pre-clinical and clinical development of ACU-6151, a biomimetic small molecule covered by the license from the University of Southern California for the treatment, prevention and diagnosis of ophthalmic diseases, with an initial focus on diabetic macular edema. The agreement includes an exclusive option to acquire the global rights to ACU-6151, including an initial candidate molecule for ophthalmic use. We may exercise the option at any time prior to 120 days following the conclusion of a proof of concept trial and a meeting between EyeMedics and the FDA to discuss final results of Phase 2 trials. The proprietary technology, licensed by EyeMedics from the University of Southern California, modulates endogenous factors released during the inflammatory process at the early pathogenic stages of age related macular degeneration, proliferative diabetic retinopathy, diabetic macular edema and other retinal neovascular conditions. Acucela Inc. and EyeMedics has established a Joint Development Committee, or JDC, to meet semi-annually to determine the budget for the following year. The Company is required to advance any funds, less any remaining unused funds from the prior calendar half-year, to EyeMedics within 30 days of the JDC meeting. As of December 31, 2016, research and development work had not yet begun. Pursuant to the terms of the agreement, we paid non-refundable fees of $0.5 million in June 2016 and an additional $0.4 million in December 2016 to fund future collaboration efforts. We recognized these amounts as prepayments which we will expense as research and development costs are incurred. Option and License Agreement with YouHealth Eyetech, Inc. In March 2016, we entered into an exclusive option and license agreement with YouHealth Eyetech, Inc., or YouHealth. YouHealth’s parent company, Guangzhou Kang Rui Biological Pharmaceutical Technology Co., Ltd., is a party to the agreement as a guarantor of YouHealth’s performance of its obligations. Pursuant to the terms of the agreement, YouHealth granted us an option to obtain a royalty-bearing license, with the right to sub-license, certain YouHealth technology to develop and commercialize products containing lanosterol for the treatment of ophthalmological diseases in all territories excluding the People’s Republic of China, Taiwan and Hong Kong. Such excluded territories are referred to as the YouHealth Territory. We may exercise the option at any time before June 30, 2019, the option period, by providing written notice to YouHealth and a payment of $10.0 million. During the option period, we granted YouHealth an exclusive, royalty-free, fully-paid license, without the right to sub-license, certain of our technology to develop products containing lanosterol in the YouHealth Territory. If we choose to exercise this option, the license granted by us to YouHealth will then permit sub-licensing and commercialization of products containing lanosterol by YouHealth in the YouHealth Territory. Pursuant to the terms of the agreement, we paid a one-time upfront fee of $5.0 million to YouHealth during the first quarter of 2016. During the option period, YouHealth is eligible to receive up to an additional $5.0 million upon the achievement of certain near-term development and regulatory milestones establishing proof of concept. Upon our exercise of the option, YouHealth would then be eligible to receive up to an additional $300.0 million upon our achievement of certain regulatory milestones, such as initiation of Phase 3 clinical trials and approvals of new drug applications across multiple indications. YouHealth would be eligible to receive up to an additional $90.0 million upon our achievement of certain post-approval sales-based milestones. In addition to these potential one-time payments, YouHealth is eligible to receive a mid single-digit percentage of annual net sales, which may increase to a higher mid single-digit percentage if certain annual net sales figures are exceeded. Royalties would be payable on a product-by-product and country-by-country basis until the later of ten years from the date of first commercial sale in a particular country or the expiration of the last-to-expire valid claim of certain YouHealth patents covering the products. In the event no valid patent claim covers the Product, the royalty percentage would be subject to a 50% reduction in payment. In addition, the royalty may terminate at any time generic competition occurs. Pursuant to the terms of the agreement, each party will be solely responsible for the development, manufacture and commercialization of Products in its respective territory, compliance with applicable regulatory requirements and related expenses. We agreed to use diligent efforts to achieve certain milestones applicable to an existing license between YouHealth and the Regents of the University of California. The license between YouHealth and the Regents of the University of California comprises part of the technology made available to us through this agreement. Unless earlier terminated by the parties, our agreement with YouHealth expires on June 30, 2019, if we have not exercised our option or, if we do exercise our option, then upon the last to expire royalty term for any commercialized product. Either party may terminate the agreement upon the other party’s material breach, after provision of written notice and an opportunity to cure such breach. We have the right to terminate the agreement for any reason at any time upon 60 days prior written notice to YouHealth. If we decline to exercise the option, YouHealth would have the right of first negotiation to obtain an exclusive, worldwide license, with right to sub-license, under certain of our patents, to develop and commercialize products for the treatment of ophthalmic diseases. License Agreement with University of Manchester In April 2016, we announced our execution of an exclusive license agreement with the University of Manchester, whereby we will develop and commercialize University of Manchester’s human rhodopsin based optogenetic gene therapy for the treatment of retinal degenerative disease, including retinitis pigmentosa. We paid a non-refundable fee of $0.2 million in connection with the execution of the agreement, which was expensed during the second quarter of 2016.

Net Loss Per Share

Net Loss Per Share	12 Months Ended
	Dec. 31, 2016
Earnings Per Share [Abstract]
Net Loss Per Share	Net Loss Per Share Basic net income (loss) per share is calculated by dividing net income (loss) 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. For the years ended December 31, 2016 , 2015 , and 2014, equity awards of 1,089,606 , 96,683 , and 185,551 were excluded from the calculation of diluted net loss per share because the impact was anti-dilutive.

Retirement Plans

Retirement Plans	12 Months Ended
	Dec. 31, 2016
Compensation and Retirement Disclosure [Abstract]
Retirement Plans	Retirement Plans The Company’s 401(k) Plan is a deferred salary arrangement under Section 401(k) of the Internal Revenue Code. The 401(k) Plan allows U.S. employees to defer eligible compensation on a pre-tax and post-tax basis, up to the IRS annual contribution limit ($18,000 for calendar year 2016). The Company matches 50% of each employee’s contribution up to a maximum of 6% of the employee's eligible earnings. Employees are always 100% vested in their own contributions and vest in our contributions at the end of each year. The defined benefit contribution for the 2016 and 2015 employer match was $0.2 million and $0.2 million , respectively. In January 2015, the Board also authorized a non-elective discretionary employer contribution of $0.4 million to be allocated to participant accounts which vests over a four -year period based on employee hire dates. Such amounts are included in general and administrative and research and development expenses in the accompanying consolidated statements of operations.

Commitments and Contingencies

Commitments and Contingencies	12 Months Ended
	Dec. 31, 2016
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Leases We lease laboratory and corporate office space under operating leases. On August 17, 2016, we entered into an agreement with Servcorp to lease office space for Kubota Holdings' corporate headquarters in Tokyo, Japan. The term of the lease commenced on September 1, 2016 and will expire June 30, 2017 with automatic rollover every two months if written notice is not given to Servcorp two months in advance. On June 26, 2014, we entered into an agreement for the lease of approximately 38,723 square feet of office space for Acucela US's offices in Seattle, Washington. The term of the lease commenced on January 1, 2015 and, subject to the terms of the lease, will expire on November 30, 2021. In 2015, we received a tenant leasehold improvement allowance of $1.2 million in connection with the commencement of this lease. On January 12, 2017, we entered into a sub-sublease agreement (the Zillow Sublease) with Zillow, Inc. See Item 2. Properties for additional information on the Zillow Sublease. Acucela US also leases approximately 17,488 square feet of laboratory and office space in Bothell, Washington that it uses for laboratory, research and development and general and administrative purposes. The current annual rent is $0.4 million , subject to adjustment pursuant to the terms of the lease. On January 4, 2017, we entered into an amendment to the Bothell lease agreement. The amendment extended the expiration date of the original lease from February 28, 2017 to February 29, 2020, subject to our right to extend the term for one additional two-year period by written notice. See "Item 2. Properties" for additional information on the Bothell lease amendment. Lease incentives are recognized as deferred rent liabilities and amortized to rent expense over the term of the lease. Minimum rent payments under operating leases are recognized on a straight-line basis over the term of the lease, including any periods of free rent and reduced rent. Future minimum lease payments under operating leases (with initial or remaining lease terms in excess of one year) as of December 31, 2016 are as follows (in thousands): Payments Due by Period 2017 2018 2019 2020 2021 Thereafter Total Operating lease obligations $ 1,051 $ 968 $ 1,007 $ 1,046 $ 994 $ — $ 5,066 Total $ 1,051 $ 968 $ 1,007 $ 1,046 $ 994 $ — $ 5,066 Rent expense was $1.9 million , $2.0 million , and $1.0 million , respectively, in the years ended December 31, 2016 , 2015 , and 2014 . The foregoing table does not reflect the impact of the Zillow Sublease and the Bothell lease amendment. Severance and Change in Effective Control Agreements Mr. Roger Girard, our former Chief Strategy Officer, ceased to be an employee on July 10, 2016. In July 11, 2016, we entered into a Separation Agreement and Release with Mr. Girard, which entitles him to receive continuing payments at a rate equal to his annual base salary for a period of nine months from his termination date, up to nine months of health benefit coverage under our COBRA program, an incentive bonus equal to 50% of nine months of his base salary in effect on his termination date and nine months of vesting on his Acucela US RSUs, from his termination date. As of December 31, 2016, we paid severance of $0.2 million, and accrued severance of $0.2 million to our former Chief Strategy Officer, which is due to be paid through April 2017. In addition, we incurred $0.5 million of stock compensation expense related to the accelerated vesting of his Acucela US RSUs. All remaining unvested Acucela US RSUs were forfeited. In July 9, 2016, we entered into a Separation Agreement and Release with Dr. George Lasezkay, our former Executive Vice President, General Counsel. The Separation Agreement and Release agreement entitles him to receive continuing payments at a rate equal to his annual base salary for a period of nine months from his termination date, up to nine months of health benefit coverage under our COBRA program, an incentive bonus equal to 35% of nine months of his base salary in effect on his termination date and nine months of vesting on his Acucela US RSUs, from his termination date. As of December 31, 2016 , we paid $0.1 million and accrued severance of $0.2 million to our former Executive Vice President, General Counsel, which is due to be paid through April 2017. In addition, the Company incurred $0.2 million of stock compensation expense related to his accelerated Acucela US RSUs. All remaining unvested Acucela US RSUs were forfeited. During 2016 , we paid $0.6 million in severance related to our former employees which are due to be paid through April 2017. In March 2015, the Board approved the terms of the Severance and Change in Effective Control Agreements entered into with each member of our then current management team and certain other employees, or the Change in Control Agreements. The Change in Control Agreements provide 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 Change in 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 Change in Control Agreements terminated 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). In May 2015, as a result of the actions taken at a special meeting of our shareholders, a Qualifying Change in Effective Control was deemed to have taken place under the terms of the Change in Control Agreements. In 2015, the Company incurred $2.3 million of severance made under this plan. Mr. Brian O'Callaghan resigned his position as our President and Chief Executive Officer, effective on May 3, 2015. Under Mr. O'Callaghan's employment agreement, the termination of Mr. O’Callaghan’s employment without Cause or for Good Reason (as such terms were defined in his employment agreement), entitled him to receive 18 months of salary, up to 18 months of the premiums for health benefit coverage provided under our COBRA program, and a pro-rated portion of his annual bonus, totaling approximately $0.9 million in cash paid in 2015. In addition, pursuant to the terms of the Acucela US 2014 Equity Incentive Plan, all of his Acucela US options and Acucela US RSUs were accelerated such that his equity awards were fully vested as of May 3, 2015. In April 2015, Mr. O'Callaghan's Acucela US options were modified to extend the post-termination exercise period from three months to twelve months. The Company recognized stock-based compensation expense of $2.7 million related to the accelerated vesting of his Acucela US options in connection with his termination. In addition, pursuant to the terms of the Acucela US 2014 Equity Incentive Plan, the vesting of his Acucela US RSUs were accelerated such that these equity awards were fully vested as of May 3, 2015. We recognized general and administrative expense of approximately $2.1 million related to his Acucela US RSUs during 2015. Mr. Steven Tarr resigned his position as our Chief Operating Officer, or COO, effective November 18, 2015. Under Mr. Tarr's employment agreement, the termination of Mr. Tarr's employment without Cause or for Good reason, entitled him to receive 9 months of salary and 9 months of health benefit coverage under our COBRA program. The COO severance amounts, totaling $0.3 million in cash, was paid through August 2016. In addition, pursuant to the terms of the Acucela US 2014 Equity Incentive Plan, the vesting of his restricted stock awards were accelerated such that all were fully vested as of November 18, 2015. We recognized stock-based compensation expense of $1.8 million related to his accelerated restricted stock awards during 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.

Related-Party Transactions

Related-Party Transactions	12 Months Ended
	Dec. 31, 2016
Related Party Transactions [Abstract]
Related-Party Transactions	Related-Party Transactions In July, 2016, we entered into a consulting agreement with Dr. George Lasezkay, our former Executive Vice President, General Counsel, following termination of his employment with us. Pursuant to the terms of the consulting agreement, Dr. Lasezkay provides services to us relating to business and strategic partnering advisory services. In 2016, we paid Dr. Lasezkay aggregate consulting fees of $0.2 million pursuant to the consulting agreement. The consulting agreement is scheduled to terminate in April 2017 and we do not anticipate extending its term at such time. SBI Holdings, Inc., one of our shareholders and a related party, 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. The number of shares issued upon conversion was determined by dividing the principal of the note by $3.30 , which was subject to adjustment for any subsequent recapitalizations, stock combinations, stock dividends, or stock splits. On December 22, 2015, the Company filed an S-3 Registration Statement for the resale of up to 7,752,425 shares of our common stock that may be offered and sold from time to time by SBI Holdings, Inc. The shares of common stock were initially issued in private sales not registered under the Securities Act. We will not receive any of the proceeds from the sale of the shares of our common stock being sold. According to the Schedule 13D/A filed on January 11, 2017 by SBI Holdings, Inc. and SBI Incubation Co., SBI Holdings, Inc. owns 14,449,325 shares of our common stock. Dr. Kubota and SBI Holdings, Inc., our two largest shareholders, incurred certain fees and expenses totaling approximately $0.8 million in preparation for the May 1, 2015 Special Shareholders' meeting. Our Board appointed a special committee, or the Special Committee, consisting entirely of independent directors to evaluate these expenses to determine if the expenses, or a portion thereof, should be reimbursed by the Company. The Special Committee met on June 8, 2015 and concluded that the reimbursement of these expenses was appropriate.

Quarterly Information (Unaudite

Quarterly Information (Unaudited)	12 Months Ended
	Dec. 31, 2016
Quarterly Financial Information Disclosure [Abstract]
Quarterly Information (Unaudited)	Quarterly Information (Unaudited) The following tables set forth our unaudited quarterly statement of operations data for each of the last eight quarters in the period ended December 31, 2016 . The unaudited quarterly statement of operations data below have been prepared on the same basis as the audited financial statements included elsewhere in this Form 10-K and reflect all necessary adjustments, consisting only of normal recurring adjustments, that we believe are necessary for a fair statement of this information. The results of historical quarters are not necessarily indicative of the results of operations for a full year or any future period: (unaudited) (In thousands, except per share amounts) March 31 June 30 September 30 December 31 2016 Revenue from collaborations $ 3,756 $ 2,874 $ 711 $ 265 Net loss $ (12,591 ) $ (7,751 ) $ (6,976 ) $ (7,207 ) Basic net loss per share (0.34 ) (0.21 ) (0.18 ) (0.19 ) Diluted net loss per share (0.34 ) (0.21 ) (0.18 ) (0.19 ) March 31 June 30 September 30 December 31 2015 Revenue from collaborations $ 7,215 $ 7,181 $ 7,128 $ 2,543 (1) Net loss $ (3,940 ) $ (9,738 ) $ (3,550 ) $ (8,281 ) Basic net loss per share (0.11 ) (0.27 ) (0.10 ) (0.23 ) Diluted net loss per share (0.11 ) (0.27 ) (0.10 ) (0.23 ) (1) In the fourth quarter of 2015, we were in negotiations with Otsuka regarding the amount of indirect cost applicable in 2015. This negotiation resulted in a settlement of approximately $2.6 million , which was issued as a credit to Otsuka for development expenses that had been recognized as revenue in 2015 and has been recorded as a reduction to revenue for the year ended December 31, 2015.

Subsequent Events

Subsequent Events	12 Months Ended
	Dec. 31, 2016
Subsequent Events [Abstract]
Subsequent Events	Subsequent Events On January 4, 2017, Acucela US and Nexus Canyon Park LLC entered into an amendment to the lease agreement for the Bothell office used for Acucela US's research and development laboratory and office space. Pursuant to the terms of the amendment, the term of the Bothell Lease was extended to February 28, 2020, subject to Acucela US’s right to extend the term for one additional two year period by written notice to Nexus given no earlier than 18 months and no later than 12 months prior to February 28, 2020. On January 12, 2017, Acucela US entered into a Sub-Sublease Agreement with Zillow, Inc., pursuant to which Zillow, Inc., will sublease from Acucela US all 38,723 square feet of Acucela US's Seattle office space. The Zillow Sublease commences on May 1, 2017 and will continue until the expiration of the Acucela Sublease on February 28, 2022, unless Boeing earlier terminates the Acucela Sublease on November 30, 2021. For the first three months of the term of the Zillow Sublease, Acucela US will remain responsible for payment of rent to the Boeing Company. Following such three month period, the base rent shall be payable monthly by Zillow to Acucela US. In addition to base rent, Zillow will also be responsible for operating and other expenses owed by Acucela US to the Boeing Company pursuant to the terms of the Acucela Sublease. The Zillow Sublease is subject and subordinate to the Acucela Sublease and Boeing's lease with the landlord of the Seattle office space. During the term of the Zillow Sublease, Acucela US’s obligations under the Acucela Sublease will remain in force. Acucela US is evaluating alternative office space in Seattle, Washington and intends to relocate its operations currently occupying the Seattle office space once satisfactory space is secured. In December 2016, we entered into a collaboration agreement to jointly conduct through human proof of concept, the pre-clinical and clinical development of ACU-6151, a biomimetic small molecule covered by the license from the University of Southern California for the treatment, prevention and diagnosis of ophthalmic diseases, with an initial focus on diabetic macular edema. The agreement includes an exclusive option to acquire EyeMedics’ assets related to the development program contemplated by the collaboration agreement. We may exercise the option at any time prior to 120 days following the conclusion of a proof of concept trial and a meeting between EyeMedics and the FDA to discuss final results of a Phase 2 human proof of concept clinical trial. On January 2017, Acucela advanced additional $1.2 million to EyeMedics for collaboration work for the first half of 2017. For further discussion of the Bothell lease amendment, Sub-Sublease Agreement and future funding for EyeMedics, please refer to "Note 9: Collaboration and License Agreements" and "Note 12: Commitments" in the Notes to the Consolidated Financial Statements in this report.

Significant Accounting Polici24

Significant Accounting Policies (Policies)	12 Months Ended
	Dec. 31, 2016
Accounting Policies [Abstract]
Basis of Presentation	The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Acucela Inc. and Kubota Ophthalmics Co., Ltd. Intercompany accounts and transactions have been eliminated. In the opinion of the Company’s management, the consolidated financial statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation. The preparation of these consolidated financial statements in conformity with generally accepted accounting principles, or GAAP, requires management to make estimates and assumptions that affect the amounts reported in these consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. As the Company’s common stock is without par value, the Company has re-classified its prior year presentation of additional paid-in capital to conform with the current year presentation of common stock.
Segments	We operate in one segment, pharmaceutical product development. All of our significant assets are located in the United States. During the years ended December 31, 2016 , 2015 , and 2014 , all revenue was generated in the United States.
Revenue Recognition	One of our business strategies is to enter into collaboration agreements with pharmaceutical companies for the development and commercialization of product candidates. The terms of the agreements may include nonrefundable license fees, funding of research and development activities, payments based upon achievement of development milestones, payments based upon achievement of regulatory and revenue milestones, and product sales or royalties on product sales. We recognize revenue when four basic criteria have been met: (a) persuasive evidence of an arrangement exists; (b) services are rendered; (c) the fee is fixed or determinable; and (d) collectability is reasonably assured. Amounts received prior to satisfying these criteria are recorded as deferred revenue.
Revenue Recognition, Multiple Element Arrangements	Our collaboration agreements with Otsuka were multiple element arrangements which were analyzed to identify whether the deliverables included in the agreements qualify as separate units of accounting. We determined that the activities associated with development met the criterion for a separate unit of accounting, since these services had value to Otsuka on a standalone basis. Best estimate of the selling price, or BESP, is based on our analysis of the value of the services provided and consideration of the fees charged by third party vendors for similar development services. We determined that the fees charged for the research services are competitive with the price other third-party vendors charge for similar research services. There were no rights of return in our collaboration agreements. Payments that are contingent upon the occurrence of future events that are not exclusively within our control are excluded from the allocable arrangement consideration until the contingency is resolved.
Revenue Recognition, Substantive Milestone Payments	Revenue from development efforts is recognized as services are incurred by third-parties. Revenue earned by full-time or part-time salaried employees is recognized using a proportional performance model based on hours worked. When we are able to estimate the total amount of services under a unit of accounting and such performance obligations are provided on a best-efforts basis, revenue is recognized using a proportional performance model. Costs incurred to date compared to total expected costs are used to determine proportional performance, as this is considered to be representative of the delivery of outputs. Significant judgment is required in determining the level of effort required and the period over which we are expected to complete our performance obligations under each unit of accounting.
Revenue Recognition, Deferred Revenue	Amounts received prior to satisfying the above revenue recognition criteria are recorded as deferred revenue.
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 cash and money market funds.
Investments	We have classified our entire investment portfolio, which consists of corporate debt securities, commercial paper, securities issued by U.S. government agencies 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 income (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 12 months from the balance sheet date as long-term and with a maturity less than 12 months from the balance sheet date as short-term.
Concentration of Credit Risk	Our accounts receivable, as of December 31, 2016 and December 31, 2015 , 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.
Property and Equipment	Property and equipment are recorded at cost, less accumulated depreciation. We provide for depreciation of equipment on a straight-line basis over an estimated useful life of five years, except leasehold improvements which are amortized on a straight-line basis over the shorter of the lease term or estimated useful life of the assets. The estimated useful lives of major classes of depreciable assets are as follows: Laboratory and computer equipment 5 years Leasehold improvements 2-7 years Office furniture and equipment 5 years Expenditures for maintenance and repairs are expensed as incurred. Long-lived assets held for use are subject to an impairment assessment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the carrying value is no longer recoverable based upon the undiscounted future cash flows of the asset, the amount of the impairment is the difference between the carrying amount and the fair value of the asset. We have recorded no impairment charges for the periods presented.
Fair Value	We measure and report at fair value our cash equivalents and investment securities. Fair value is defined as the exchange price that would be received for 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. Valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The carrying amounts reflected in the balance sheets for accounts receivable and accounts payable approximate fair value due to their short-term nature.
Stock-Based Compensation	Stock-based compensation cost is estimated at the grant date based on the award’s fair value and is recognized on a straight line basis as expense, less estimated forfeitures, over the requisite service period, which is generally the vesting period. The fair value of stock options under our outstanding equity awards is calculated using the Black-Scholes option pricing model. This model requires us to make assumptions to determine expected risk-free interest rates, stock price volatility, dividend yield, and weighted-average option term. We recognize stock-based compensation expense over the period from the date of grant to the date when the award is no longer contingent on either the employee providing additional services to the Company or the market price of the Company’s common stock reaching a certain level, for a specified minimum period of time (the vesting period). Any unexercised options expire in five to ten years. We estimate the fair value of each grant as a single award and amortize that value on a straight-line basis into compensation expense over the option’s vesting period. The Company also utilizes a forfeiture rate of 10% which is embedded in our compensation expense. Once terminations occurs, the Company records the actual forfeiture credits against expense incurred to date. The fair value of restricted stock units and restricted stock awards is equal to the market price of Kubota Holdings' stock on the date of grant. We amortize that value on a straight line basis into compensation expense, over the restricted share’s vesting period.
Research and Development Cost	Research and development costs include salaries paid to clinical development staff and scientists, fees paid to external service providers and to contract research organizations to conduct research and development activities. Costs may also include laboratory supplies, license fees, consulting, travel, fees paid to third parties involved in research and development activities, and an allocated portion of certain general operating costs, including facility and information technology costs. These research and development costs are expensed as incurred. Non-refundable advance payments related to research and development collaboration agreements are currently expensed as incurred as there is no assurance that the pre-clinical compounds will be used or rendered for future research and development. If collaboration projects have not yet begun to incur research and development expenses, we will record the non-refundable advance as a prepayment until such time as we may begin to expense as incurred. We will evaluate each reporting period whether non-refundable fees show characteristics that will be used or rendered for future research and development pursuant to an executory contractual arrangement. At such point, we may then decide to defer and capitalize these payments. We expense payments to acquire contractual rights to licensed technology as incurred, when the future economic benefit may be foreseen, but cannot be measured with any degree of certainty. Refundable advance payments are recorded as a refundable deposit. In the event the fee becomes nonrefundable, it is capitalized or expensed, based on the certainty of any future economic benefit.
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. During 2016, the Company adopted an accounting standard that simplified the presentation of deferred income taxes by requiring deferred tax assets and liabilities be classified as noncurrent in a classified statement of financial position. The Company has adopted this accounting standard prospectively; accordingly, the prior period amounts in the Company’s consolidated balance sheets within this Annual Report on Form 10-K were not adjusted to conform to the new accounting standard. The adoption of this accounting standard was not material to the Company’s consolidated financial statements.
Foreign Currency Translation	The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Acucela Inc. and Kubota Ophthalmics Co., Ltd. The functional currency of the Company and Kubota Ophthalmics Co., Ltd. is the Japanese yen and the functional currency of Acucela Inc. is the U.S. dollar. Any realized and unrealized gains and losses are not significant as of December 31, 2016.
Recent Accounting Pronouncements	In May 2014, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers: Topic 606 (ASU 2014-09), to supersede nearly all existing revenue recognition guidance under GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than required under existing GAAP, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. Adoption of ASU 2014-09 can be done using either of two methods: (i) retrospective to each prior reporting period presented with the option to elect certain practical expedients as defined within ASU 2014-09; or (ii) retrospective with the cumulative effect of initially applying ASU 2014-09 recognized at the date of initial application and providing certain additional disclosures as defined per ASU 2014-09. In August 2015, FASB issued Accounting Standards Update No. 2015-14, Revenue from Contracts with Customers - Deferral of the Effective Date: Topic 606 (ASU 2015-14) that deferred the effective date of ASU 2014-09 by one year. In April 2016, FASB issued Accounting Standards Update No. 2016-10 Revenue from Contracts with Customers - Identifying Performance Obligations and Licenses: Topic 606 (ASU 2016-10) that clarified accounting for licenses of intellectual property as well as identification of the distinct performance obligations of a contract. In May 2016, FASB issued Accounting Standards Update No. 2016-12 Revenue from Contracts with Customers - Narrow Scope Improvements and Practical Expedients: Topic 606 (ASU 2016-12) which did not change core principles but clarified the guidance on assessing collectability, presenting sales taxes, measuring non cash consideration, and certain transition matters. Application of the new revenue standard, as amended, is required for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. Following termination of the Company's collaboration agreements with Otsuka and completion of the wind-down period, we do not anticipate recognizing any future revenues under the Otsuka collaboration agreements. Currently, the Company is pursuing various partnering efforts and may generate revenue through future collaborations with strategic partners. If we enter revenue-generating agreements, we will evaluate the impact of adopting of ASU 2014-09. In February 2016, FASB issued Accounting Standards Update No. 2016-02, Leases: Topic 842 (ASU 2016-02). The new guidance is intended to increase transparency and comparability for organizations by recognizing lease assets and liabilities on the balance sheet and requiring additional financial disclosure on leasing arrangements. This amendment is primarily designed to address lessee accounting for operating leases and require lessees to account for all leases as assets and liabilities on the balance sheet. Adoption of ASU 2016-02 is required for fiscal reporting periods beginning after December 15, 2018 including interim reporting periods within those fiscal years. We are currently evaluating the potential impact of the pending adoption of ASU 2016-02 on our consolidated financial statements. In March 2016, FASB issued Accounting Standards Update No. 2016-09, Compensation - Stock Compensation: Topic 718 (ASU 2016-09): Improvements to Employee Share Based Accounting. The new guidance is intended to simplify the accounting for share based payment award transactions. The amendments in the update include the following aspects for share based accounting: accounting for income taxes, classification of excess tax benefits on the statement of cash flows, forfeitures, minimum statutory tax withholding requirements, and classification of employee taxes paid on the statement of cash flows when an employer withholds shares for tax withholding purposes. Adoption of ASU 2016-09 is required for fiscal reporting periods beginning after December 15, 2016 including interim reporting periods within those fiscal years. We do not anticipate that the adoption of ASU 2016-09 will result in a material impact on our consolidated financial statements. Other than noted above, we do not expect the adoption of recently issued accounting pronouncements to have a significant impact on our results of operations, financial position or cash flow.

Significant Accounting Polici25

Significant Accounting Policies (Tables)	12 Months Ended
	Dec. 31, 2016
Accounting Policies [Abstract]
Schedule of Property and Equipment	The estimated useful lives of major classes of depreciable assets are as follows: Laboratory and computer equipment 5 years Leasehold improvements 2-7 years Office furniture and equipment 5 years Property and equipment as of December 31, 2016 and 2015 consist of the following (in thousands): December 31, 2016 2015 Laboratory and computer equipment $ 2,921 $ 2,981 Leasehold improvements 1,423 1,423 Office furniture and equipment 497 366 4,841 4,770 Less accumulated depreciation and amortization (4,071 ) (3,850 ) Property and equipment, net $ 770 $ 920

Cash and Cash Equivalents and26

Cash and Cash Equivalents and Investments (Tables)	12 Months Ended
	Dec. 31, 2016
Fair Value Disclosures [Abstract]
Schedule of Cash and Cash Equivalents and Investments	The following table presents information about our financial assets that have been measured at fair value on a recurring basis as of December 31, 2016 and December 31, 2015 , and indicates the fair value hierarchy of the valuation inputs utilized to determine such fair value (in thousands): December 31, 2016 Amortized Cost Gross Unrealized Fair Value Holding Gains Holding Losses < 12 mos Holding Losses > 12 mos Cash $ 2,633 $ — $ — $ — $ 2,633 Level 1 Securities: Money market funds 6,316 — — — 6,316 Level 2 Securities: Commercial Paper 25,988 1 (9 ) — 25,980 U.S. government agencies 27,585 — (19 ) (14 ) 27,552 Corporate debt securities 77,459 6 (48 ) (52 ) 77,365 Certificates of deposit 1,440 3 — — 1,443 $ 141,421 $ 10 $ (76 ) $ (66 ) $ 141,289 December 31, 2015 Amortized Cost Gross Unrealized Fair Value Holding Gains Holding Losses < 12 mos Holding Losses > 12 mos Cash $ 3,856 $ — $ — $ — $ 3,856 Level 1 Securities: Money market funds 1,232 — — — 1,232 Level 2 Securities: U.S. government agencies 10,020 — (37 ) — 9,983 Corporate debt securities 144,352 — (435 ) (96 ) 143,821 Certificates of deposit 7,640 1 (7 ) (1 ) 7,633 $ 167,100 $ 1 $ (479 ) $ (97 ) $ 166,525

Property and Equipment (Tables)

Property and Equipment (Tables)	12 Months Ended
	Dec. 31, 2016
Property, Plant and Equipment [Abstract]
Schedule of Property and Equipment	The estimated useful lives of major classes of depreciable assets are as follows: Laboratory and computer equipment 5 years Leasehold improvements 2-7 years Office furniture and equipment 5 years Property and equipment as of December 31, 2016 and 2015 consist of the following (in thousands): December 31, 2016 2015 Laboratory and computer equipment $ 2,921 $ 2,981 Leasehold improvements 1,423 1,423 Office furniture and equipment 497 366 4,841 4,770 Less accumulated depreciation and amortization (4,071 ) (3,850 ) Property and equipment, net $ 770 $ 920

Shareholders' Equity (Tables)

Shareholders' Equity (Tables)	12 Months Ended
	Dec. 31, 2016
Stockholders' Equity Note [Abstract]
Changes in Accumulated Other Comprehensive Loss	Changes in Accumulated Other Comprehensive Loss (in thousands): Years Ended December 31, 2016 2015 2014 Beginning balance $ (575 ) $ (361 ) $ (7 ) Current period other comprehensive income (loss), net of tax 443 (214 ) (354 ) Ending balance $ (132 ) $ (575 ) $ (361 )

Share-Based Compensation (Table

Share-Based Compensation (Tables)	12 Months Ended
	Dec. 31, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Schedule of Share-based Compensation, Stock Options, Activity	The following is a summary of our Substitution Awards Series 1-19 as of December 31, 2016 . For further information please refer to the discussion of the Substitution Awards set forth above. Year Ended December 31, 2016 Stock options: Shares Underlying Options Weighted Average Aggregate Intrinsic Value (in thousands) Weighted Average Remaining Contractual Term (in years) Outstanding at beginning of period 1,854,030 $ 6.30 $ 2,244 Granted 1,432,500 11.61 Exercised (1,235,794 ) 6.56 8,595 Forfeited (40,929 ) 5.90 Expired (219 ) 8.22 Outstanding at end of period 2,009,588 $ 9.92 $ 1,865 9.1 Vested and exercisable at end of period 192,883 $ 7.88 $ 393 8.6 Vested and expected to vest at end of period 1,827,918 $ 9.90 $ 1,718 9.0 Supplemental Information 2016 2015 2014 Stock options: Weighted average grant date fair value per share - granted $ 6.71 $ 3.57 $ 5.00 Total intrinsic value of options exercised (in thousands) $ 8,595 $ 45 $ 886 Total fair value of options vested (in thousands) $ 920 $ 3,768 $ 482
Schedule of Fair Value of Stock Options Granted	The fair value of stock options granted for the years ended December 31, 2016 , 2015 and 2014 was calculated using the Black-Scholes option-pricing model and applied the following assumptions: Years ended December 31, 2016 2015 2014 Risk-free interest rate 1.2% - 2.0% 1.3%-1.8% 1.5%–2.5% Expected term 3.5 - 6.3 years 6.3 years 6.2 years Dividend yield —% —% —% Expected volatility 62% - 70.6% 67% 70%
Schedule of Restricted Stock and Restricted Stock Units Activity	The following is a summary of our Substitution Awards under Series 20 and a restricted stock award as of December 31, 2016 . For further information please refer to our discussion of the Substitution Awards set forth above. Years Ended December 31, 2016 RSUs and restricted stock awards: Shares Weighted Average Grant Date Fair Value Outstanding at beginning of period 1,195,931 $ 5.61 Granted — — Vested (454,148 ) 5.60 Forfeited (309,253 ) 5.51 Outstanding at end of period 432,530 $ 5.71 The vesting schedules for all outstanding awards as of December 31, 2016 are as follows: Type of Award Vesting Schedule Group Stock Options 25% after the first year and the remaining 75% of award vesting on a monthly pro rata basis Employees and Executive Officers Stock Options Vested on a monthly pro rata basis Board RSUs 25% vested annually for four years Employees Restricted Awards and RSUs 25% after the first year and the remaining 75% of award vesting on a monthly pro rata basis Executive Officers Stock Options 1/16 vests on January 11, 2017 and the remaining shares vest on a quarterly pro-rata basis, such that the award becomes fully vested and exercisable on October 11, 2020. Employees Stock Options 1/16 vests on December 16, 2016 and the remaining shares vest on a quarterly pro-rata basis, such that the award becomes fully vested and exercisable on September 16, 2020 Employees Stock Options 25% vests on September 16, 2017 and the remaining shares vest on a quarterly pro-rata basis, such that the award becomes fully vested and exercisable on September 16, 2020 Employees Stock Options 33.3% vests after the first year and the remaining 66.7% vest on a monthly pro-rata Executive Officer Stock Options Market based award: 1/3 vesting at 1,102.32 Yen/share, 1/3 vesting at 1,469.76 Yen/share, 1/3 vesting at 1,837.20 Yen/share Executive Officer Stock Options 7,500 shares vest September 1, 2016. Thereafter, 2,500 shares vest first day of each month until fully vested as of June 1, 2020. Executive Officer

Income Taxes (Tables)

Income Taxes (Tables)	12 Months Ended
	Dec. 31, 2016
Income Tax Disclosure [Abstract]
Schedule of Deferred Tax Assets	Deferred tax assets as of December 31, 2016 and 2015 , are as follows (in thousands): December 31, 2016 2015 Deferred tax assets: Net operating loss carryforwards $ 17,348 $ 6,050 Research & development tax credit carry forwards 1,029 1,029 Deferred rent 376 427 Property & equipment 152 140 Compensation 2,680 2,810 Alternative minimum tax credits 259 259 Other 18 7 Unrealized losses 141 141 Total $ 22,003 $ 10,863 Less: valuation allowance (22,003 ) (10,863 ) Net deferred tax asset $ — $ —
Schedule of Components of Income Tax Expense (Benefit)	The components of the tax provisions are as follows (in thousands): Years Ended December 31, 2016 2015 2014 Federal: Current $ — $ (2 ) $ (79 ) Deferred — 43 2,400 — 41 2,321 State: Current $ 1 $ — $ 19 Deferred — 9 19 1 9 38 Total $ 1 $ 50 $ 2,359
Schedule of Effective Income Tax Rate Reconciliation	The reconciliation of the statutory federal income tax rate to the Company's effective tax rate is as follows: Years Ended December 31, 2016 2015 2014 Statutory Rate - Japan 33.0 % N/A N/A Foreign Rate Differential 1.0 % N/A N/A Federal Statutory rate 34.0 % 34.0 % 34.0 % State income taxes (0.1 ) 0.2 6.8 Stock compensation (1.6 ) (0.8 ) (7.8 ) Other permanent items (0.1 ) (0.1 ) 5.5 Meals and entertainment — — 7.1 Return to provision items — — (6.0 ) Other, net — — (3.6 ) Valuation allowance (32.2 ) (33.5 ) 631.7 Effective tax rate — % (0.2 )% 667.7 %

Commitments and Contingencies (

Commitments and Contingencies (Tables)	12 Months Ended
	Dec. 31, 2016
Commitments and Contingencies Disclosure [Abstract]
Schedule of Future Minimum Lease Payments Under Noncancelable Operating Leases	Future minimum lease payments under operating leases (with initial or remaining lease terms in excess of one year) as of December 31, 2016 are as follows (in thousands): Payments Due by Period 2017 2018 2019 2020 2021 Thereafter Total Operating lease obligations $ 1,051 $ 968 $ 1,007 $ 1,046 $ 994 $ — $ 5,066 Total $ 1,051 $ 968 $ 1,007 $ 1,046 $ 994 $ — $ 5,066

Quarterly Information (Unaudi32

Quarterly Information (Unaudited) (Tables)	12 Months Ended
	Dec. 31, 2016
Quarterly Financial Information Disclosure [Abstract]
Schedule of Quarterly Financial Information	The following tables set forth our unaudited quarterly statement of operations data for each of the last eight quarters in the period ended December 31, 2016 . The unaudited quarterly statement of operations data below have been prepared on the same basis as the audited financial statements included elsewhere in this Form 10-K and reflect all necessary adjustments, consisting only of normal recurring adjustments, that we believe are necessary for a fair statement of this information. The results of historical quarters are not necessarily indicative of the results of operations for a full year or any future period: (unaudited) (In thousands, except per share amounts) March 31 June 30 September 30 December 31 2016 Revenue from collaborations $ 3,756 $ 2,874 $ 711 $ 265 Net loss $ (12,591 ) $ (7,751 ) $ (6,976 ) $ (7,207 ) Basic net loss per share (0.34 ) (0.21 ) (0.18 ) (0.19 ) Diluted net loss per share (0.34 ) (0.21 ) (0.18 ) (0.19 ) March 31 June 30 September 30 December 31 2015 Revenue from collaborations $ 7,215 $ 7,181 $ 7,128 $ 2,543 (1) Net loss $ (3,940 ) $ (9,738 ) $ (3,550 ) $ (8,281 ) Basic net loss per share (0.11 ) (0.27 ) (0.10 ) (0.23 ) Diluted net loss per share (0.11 ) (0.27 ) (0.10 ) (0.23 ) (1) In the fourth quarter of 2015, we were in negotiations with Otsuka regarding the amount of indirect cost applicable in 2015. This negotiation resulted in a settlement of approximately $2.6 million , which was issued as a credit to Otsuka for development expenses that had been recognized as revenue in 2015 and has been recorded as a reduction to revenue for the year ended December 31, 2015.

Business and Basis of Present33

Business and Basis of Presentation (Details)	1 Months Ended	12 Months Ended
	Nov. 30, 2016shares	Dec. 31, 2016segment
Business Combination, Separately Recognized Transactions [Line Items]
Number of operating segments | segment		1
Kubota Holdings
Business Combination, Separately Recognized Transactions [Line Items]
Equity interest issued, number of shares | shares	37,800,000

Significant Accounting Polici34

Significant Accounting Policies (Details)	12 Months Ended
	Dec. 31, 2016
Property, Plant and Equipment [Line Items]
Forfeiture rate	10.00%
Minimum
Property, Plant and Equipment [Line Items]
Unexercised options, expiration period	5 years
Maximum
Property, Plant and Equipment [Line Items]
Unexercised options, expiration period	10 years
Laboratory and computer equipment
Property, Plant and Equipment [Line Items]
Estimated useful lives	P5Y
Leasehold improvements | Minimum
Property, Plant and Equipment [Line Items]
Estimated useful lives	P2Y
Leasehold improvements | Maximum
Property, Plant and Equipment [Line Items]
Estimated useful lives	P7Y
Office furniture and equipment
Property, Plant and Equipment [Line Items]
Estimated useful lives	P5Y

Cash and Cash Equivalents and35

Cash and Cash Equivalents and Investments (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash	$ 2,633	$ 3,856
Amortized Cost	141,421	167,100
Gross Unrealized Holding Gains	10	1
Gross Unrealized Holding Losses Less than 12 mos	(76)	(479)
Gross Unrealized Holding Losses 12 mos or Longer	(66)	(97)
Fair Value	141,289	166,525
Level 1 Securities | Money market funds
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Amortized Cost	6,316	1,232
Gross Unrealized Holding Gains	0	0
Gross Unrealized Holding Losses Less than 12 mos	0	0
Gross Unrealized Holding Losses 12 mos or Longer	0	0
Fair Value	6,316	1,232
Level 2 Securities | Commercial Paper
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Amortized Cost	25,988
Gross Unrealized Holding Gains	1
Gross Unrealized Holding Losses Less than 12 mos	(9)
Gross Unrealized Holding Losses 12 mos or Longer	0
Fair Value	25,980
Level 2 Securities | U.S. government agencies
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Amortized Cost	27,585	10,020
Gross Unrealized Holding Gains	0	0
Gross Unrealized Holding Losses Less than 12 mos	(19)	(37)
Gross Unrealized Holding Losses 12 mos or Longer	(14)	0
Fair Value	27,552	9,983
Level 2 Securities | Corporate debt securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Amortized Cost	77,459	144,352
Gross Unrealized Holding Gains	6	0
Gross Unrealized Holding Losses Less than 12 mos	(48)	(435)
Gross Unrealized Holding Losses 12 mos or Longer	(52)	(96)
Fair Value	77,365	143,821
Level 2 Securities | Certificates of deposit
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Amortized Cost	1,440	7,640
Gross Unrealized Holding Gains	3	1
Gross Unrealized Holding Losses Less than 12 mos	0	(7)
Gross Unrealized Holding Losses 12 mos or Longer	0	(1)
Fair Value	$ 1,443	$ 7,633

Cash and Cash Equivalents and36

Cash and Cash Equivalents and Investments (Narrative) (Details) $ in Millions	Dec. 31, 2016USD ($)
Corporate debt securities
Schedule of Available-for-sale Securities [Line Items]
Securities maturing from year one to year two	$ 13.2
U.S. government agencies
Schedule of Available-for-sale Securities [Line Items]
Securities maturing from year one to year two	$ 5.7

Property and Equipment (Details

Property and Equipment (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 4,841	$ 4,770
Less accumulated depreciation and amortization	(4,071)	(3,850)
Property and equipment, net	770	920
Laboratory and computer equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross	2,921	2,981
Leasehold improvements
Property, Plant and Equipment [Line Items]
Property and equipment, gross	1,423	1,423
Office furniture and equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 497	$ 366

Shareholders' Equity (Narrative

Shareholders' Equity (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions	1 Months Ended	12 Months Ended
	Feb. 28, 2014	Dec. 31, 2014
IPO | Affiliated Entity | Convertible Debt
Conversion of Stock [Line Items]
Convertible debt face amount	$ 12
Debt conversion price	$ 3.30
Common Stock
Conversion of Stock [Line Items]
IPO, shares issued	9,200,000	9,200,000
Proceeds from IPO	$ 142
Common Stock | IPO | Affiliated Entity
Conversion of Stock [Line Items]
Number of shares issued through debt conversion	3,636,365
Common Stock | IPO
Conversion of Stock [Line Items]
Number of shares issued on conversion of preferred stock	10,813,867

Shareholders' Equity (Changes i

Shareholders' Equity (Changes in AOCI) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning balance	$ (575)	$ (361)
Current period other comprehensive income (loss), net of tax	443	(214)	$ (354)
Ending balance	$ (132)	$ (575)	$ (361)

Share-Based Compensation (Narra

Share-Based Compensation (Narrative) (Details) $ in Thousands	1 Months Ended		3 Months Ended	12 Months Ended			87 Months Ended
	May 31, 2015USD ($)	Apr. 30, 2015	Mar. 31, 2016shares	Dec. 31, 2016USD ($)shares	Dec. 31, 2015USD ($)memberplanEmployeeshares	Dec. 31, 2014USD ($)	Mar. 31, 2015	Sep. 01, 2016shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of equity incentive plans | plan					3
Stock-based compensation | $				$ 5,945	$ 8,940	$ 516
Common stock reserved for future issuance				1,513,313
Exercise period after termination	12 months						3 months
Compensation cost | $					$ 100
Number of employees | Employee					27
Number of non-employee members | member					1
Options granted, gross (in shares)				1,432,500
Dividend yield				0.00%	0.00%	0.00%
Contractual term				9 years 1 month 6 days
Unrecognized compensation cost related to nonvested share-based compensation awards | $				$ 7,800
Each of our Board of Directors
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options granted, gross (in shares)				220,000
Share-based compensation, vesting period			4 years
Chief Executive Officer
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation cost | $	$ 2,700
Options granted, gross (in shares)				780,000
Share-based compensation, vesting period			3 years
Chief Executive Officer | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise period after termination		3 months
Chief Executive Officer | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise period after termination		12 months
Chief Executive Officer | Vest Over Three Years
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options granted, gross (in shares)			390,000
Chief Executive Officer | On the First Employment Anniversary
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage			33.00%
Chief Executive Officer | On a Monthly Pro Rata Basis Over the Next Three Years
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage			67.00%
Executive Vice President of Research and Development
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options granted, gross (in shares)				120,000
Option vested (in shares)								7,500
Executive Vice President of Research and Development | Vest on the First Day of Each Month, Fully Vested as of June 1, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Option vested (in shares)								2,500
Employees
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options granted, gross (in shares)				312,500
New Hires
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options granted, gross (in shares)				104,800
Share-based compensation, vesting period				4 years
New Hires | On September 16, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options granted, gross (in shares)				14,000
Share-based compensation, vesting period				4 years
New Hires | On the First Employment Anniversary
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage				25.00%
New Hires | On the First Employment Anniversary | On September 16, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage				25.00%
New Hires | On a Monthly Pro Rata Basis Over the Next Three Years
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage				75.00%
New Hires | Every Three Months Thereafter | On September 16, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage				75.00%
Existing Employees
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options granted, gross (in shares)				159,700
Employees who Received Promotions
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options granted, gross (in shares)				34,000
Market-based Awards | Chief Executive Officer
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options granted, gross (in shares)			390,000
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost related to nonvested share-based compensation awards | $				$ 2,300
Unrecognized compensation cost related to nonvested share-based compensation awards, weighted average period of recognition				2 years 4 months 24 days
Stock Options | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Contractual term				5 years
Stock Options | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Contractual term				10 years
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation, vesting period				4 years
Equity instruments, granted (in shares)					1,509,872
Unrecognized compensation cost related to nonvested share-based compensation awards, weighted average period of recognition				3 years
Restricted Stock Units (RSUs) | On the First Employment Anniversary
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage				25.00%
Restricted Stock Units (RSUs) | On a Monthly Pro Rata Basis Over the Next Three Years
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage				75.00%
Restricted Stock Units (RSUs) | Employees
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity instruments, granted (in shares)					477,061
Restricted Stock Units (RSUs) | Executives
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity instruments, granted (in shares)					1,500,903

Share-Based Compensation (Stock

Share-Based Compensation (Stock Option Activity) (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Shares Underlying Options
Outstanding at beginning of period (in shares)	1,854,030
Granted (in shares)	1,432,500
Exercised (in shares)	(1,235,794)
Forfeited (in shares)	(40,929)
Expired (in shares)	(219)
Outstanding at end of period (in shares)	2,009,588	1,854,030
Vested and exercisable at end of period (in shares)	192,883
Vested and expected to vest at end of period (in shares)	1,827,917.5
Weighted Average Exercise Price
Outstanding at beginning of period (in dollars per share)	$ 6.30
Granted (in dollars per share)	11.61
Exercised (in dollars per share)	6.56
Forfeited (in dollars per share)	5.90
Expired (in dollars per share)	8.22
Outstanding at end of period (in dollars per share)	9.92	$ 6.30
Vested and exercisable at end of period (in dollars per share)	7.88
Vested and expected to vest at end of period (in dollars per share)	$ 9.90
Aggregate Intrinsic Value
Outstanding at beginning of period	$ 2,244
Exercised	8,595	$ 45	$ 886
Outstanding at end of period	1,865	$ 2,244
Aggregate Intrinsic Value, Vested and exercisable at end of period	393
Aggregate Intrinsic Value, Vested and expected to vest at end of period	$ 1,718
Weighted Average Remaining Contractual Term, Outstanding at end of period	9 years 1 month 6 days
Weighted Average Remaining Contractual Term, Vested and exercisable at end of period	8 years 7 months 6 days
Weighted Average Remaining Contractual Term, Vested and expected to vest at end of period	9 years

Share-Based Compensation (Suppl

Share-Based Compensation (Supplemental Information) (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Weighted average grant date fair value per share - granted	$ 6.71	$ 3.57	$ 5
Exercised	$ 8,595	$ 45	$ 886
Total fair value of options vested	$ 920	$ 3,768	$ 482

Share-Based Compensation (Fair

Share-Based Compensation (Fair Value of Stock Options Granted) (Details)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Expected term		6 years 3 months 18 days	6 years 2 months 12 days
Dividend yield	0.00%	0.00%	0.00%
Expected volatility		67.00%	70.00%
Minimum
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Risk-free interest rate	1.20%	1.30%	1.50%
Expected term	3 years 6 months
Expected volatility	62.00%
Maximum
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Risk-free interest rate	2.00%	1.80%	2.50%
Expected term	6 years 3 months 18 days
Expected volatility	70.60%

Share-Based Compensation (RSU a

Share-Based Compensation (RSU and Restricted Stock Award Activity) (Details) - RSUs and Restricted Stock Award	12 Months Ended
	Dec. 31, 2016$ / sharesshares
Shares
Outstanding at beginning of period (in shares) | shares	1,195,931
Granted (in shares) | shares	0
Vested (in shares) | shares	(454,148)
Forfeited (in shares) | shares	(309,253)
Outstanding at end of period (in shares) | shares	432,530
Weighted Average Grant Date Fair Value
Outstanding at beginning of period (in dollars per share) | $ / shares	$ 5.61
Granted (in dollars per share) | $ / shares	0
Vested (in dollars per share) | $ / shares	5.60
Forfeited (in dollars per share) | $ / shares	5.51
Outstanding at end of period (in dollars per share) | $ / shares	$ 5.71

Share-Based Compensation (Vesti

Share-Based Compensation (Vesting Schedule) (Details)	12 Months Ended
	Dec. 31, 2016¥ / sharesshares
Stock Options | Employees and Executive Officers | On the First Employment Anniversary
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage	25.00%
Stock Options | Employees and Executive Officers | On a Monthly Pro Rata Basis Over the Next Three Years
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage	75.00%
Stock Options | Employees | On January 11, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage	0.0625%
Stock Options | Employees | On December 16, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage	0.0625%
Stock Options | Employees | On September 16, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage	25.00%
Stock Options | Executive Officer | On the First Employment Anniversary
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage	33.30%
Stock Options | Executive Officer | On a Monthly Pro Rata Basis Over the Next Three Years
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage	66.70%
Stock Options | Executive Officer | Vest upon Stock Price of ¥1,102.32
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage	33.33%
Price per share (in dollars per share)	¥ 1,102.32
Stock Options | Executive Officer | Vest upon Stock Price of ¥1,469.76
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage	33.33%
Price per share (in dollars per share)	¥ 1,469.76
Stock Options | Executive Officer | Vest upon Stock Price of ¥1,837.20
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage	33.33%
Price per share (in dollars per share)	¥ 1,837.20
Stock Options | Executive Officer | On September 1, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares vest | shares	7,500
Stock Options | Executive Officer | On June 1, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares vest | shares	2,500
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation, vesting period	4 years
Restricted Stock Units (RSUs) | On the First Employment Anniversary
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage	25.00%
Restricted Stock Units (RSUs) | On a Monthly Pro Rata Basis Over the Next Three Years
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage	75.00%
Restricted Stock Units (RSUs) | Employees | Vested Annually for Four Years
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage	25.00%
RSUs and Restricted Stock Award | Executive Officer | On the First Employment Anniversary
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage	25.00%
RSUs and Restricted Stock Award | Executive Officer | On a Monthly Pro Rata Basis Over the Next Three Years
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage	75.00%

Income Taxes (Narrative) (Detai

Income Taxes (Narrative) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Operating Loss Carryforwards [Line Items]
Operating loss carryforwards	$ 50,900
Tax credit carryforwards, research and development	1,000
Deferred tax assets, valuation allowance	22,003	$ 10,863
Deferred tax asset, increase in valuation allowance	$ 11,100	$ 8,600
Income tax examination, likelihood of being realized upon ultimate settlement	50.00%
Share-based Compensation
Operating Loss Carryforwards [Line Items]
Tax credit carryforwards, research and development	$ 300

Income Taxes (Deferred Tax Asse

Income Taxes (Deferred Tax Assets) (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Deferred tax assets:
Net operating loss carryforwards	$ 17,348	$ 6,050
Research & development tax credit carry forwards	1,029	1,029
Deferred rent	376	427
Property & equipment	152	140
Compensation	2,680	2,810
Alternative minimum tax credits	259	259
Other	18	7
Unrealized losses	141	141
Total	22,003	10,863
Less: valuation allowance	(22,003)	(10,863)
Net deferred tax asset	$ 0	$ 0

Income Taxes (Components of Tax

Income Taxes (Components of Tax Expense (Benefit)) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Federal:
Current	$ 0	$ (2)	$ (79)
Deferred	0	43	2,400
Federal income tax expense (benefit)	0	41	2,321
State:
Current	1	0	19
Deferred	0	9	19
State income tax expense (benefit)	1	9	38
Total	$ 1	$ 50	$ 2,359

Income Taxes (Reconciliation of

Income Taxes (Reconciliation of Statutory Federal Income Tax Rate) (Details)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Income Tax Disclosure [Abstract]
Effective Income Tax Rate Reconciliation, at Foreign Statutory Income Tax Rate, Percent	33.00%
Effective Income Tax Rate Reconciliation, Foreign Income Tax Rate Differential, Percent	1.00%
Federal Statutory rate	34.00%	34.00%	34.00%
State income taxes	(0.10%)	0.20%	6.80%
Stock compensation	(1.60%)	(0.80%)	(7.80%)
Other permanent items	(0.10%)	(0.10%)	5.50%
Meals and entertainment	0.00%	0.00%	7.10%
Return to provision items	0.00%	0.00%	(6.00%)
Other, net	0.00%	0.00%	(3.60%)
Valuation allowance	(32.20%)	(33.50%)	631.70%
Effective tax rate	0.00%	(0.20%)	667.70%

Collaboration and License Agr50

Collaboration and License Agreements (Details) - USD ($)

Apr. 30, 2016

Jan. 31, 2017

Dec. 31, 2016

Dec. 31, 2016

Sep. 30, 2016

Jun. 30, 2016

Mar. 31, 2016

Dec. 31, 2015

Sep. 30, 2015

Jun. 30, 2015

Mar. 31, 2015

Dec. 31, 2016

Dec. 31, 2016

Dec. 31, 2015

Dec. 31, 2014

Dec. 31, 2012

Dec. 31, 2008

Dec. 31, 2014

Dec. 31, 2015

Dec. 31, 2016

Revenue Recognition, Milestone Method [Line Items]

Revenue from collaborations

$ 265,000

$ 711,000

$ 2,874,000

$ 3,756,000

$ 2,543,000

$ 7,128,000

$ 7,181,000

$ 7,215,000

$ 7,606,000

$ 24,067,000

$ 35,396,000

Loss contingency accrual, payments

$ 200,000

EyeMedics

Revenue Recognition, Milestone Method [Line Items]

Option and license agreement, payment

$ 400,000

Collaboration agreement, non-refundable fees

$ 500,000

Collaboration agreement, option period to purchase product rights

120 days

EyeMedics | Subsequent Event

Revenue Recognition, Milestone Method [Line Items]

Option and license agreement, payment

$ 1,200,000

Collaboration agreement, option period to purchase product rights

120 days

Research and Development

Revenue Recognition, Milestone Method [Line Items]

Option and license agreement, fees

$ 10,000,000

Option and license agreement, payment

5,000,000

Option and license agreement, royalties, percent of reduction in payment

50.00%

Option and license agreement, termination period

60 days

Research and Development | Maximum

Revenue Recognition, Milestone Method [Line Items]

Option and license agreement, possible future payment

$ 5,000,000

Option and license agreement, exercise of options, eligibility for additional payment

300,000,000

Option and license agreement, sale-based milestone, eligibility for additional payment

$ 90,000,000

Reduction of Indirect Charges Billed Earlier

Revenue Recognition, Milestone Method [Line Items]

Revenue from collaborations

2,600,000

Development Activities

Revenue Recognition, Milestone Method [Line Items]

Costs incurred, development costs

$ 40,000,000

Collaborative Arrangement, Product

Revenue Recognition, Milestone Method [Line Items]

Revenue from collaborations

$ 7,600,000

24,100,000

35,400,000

Collaborative Arrangement, Product | Emixustat

Revenue Recognition, Milestone Method [Line Items]

Revenue from collaborations

$ 49,700,000

$ 61,500,000

$ 64,600,000

Nonrefundable up-front license fee received

$ 5,000,000

Funded amount, Phase 1

40,000,000

Potential to receive development milestones

82,500,000

Milestone method, revenue recognized

$ 1,200,000

0

Number of days used as base for calculating accrued interest

360 days

Contingently repayable funding, accrued interest

$ 7,200,000

$ 7,200,000

$ 4,600,000

$ 7,200,000

$ 7,200,000

4,600,000

$ 4,600,000

$ 7,200,000

Collaborative Arrangement, Product | Emixustat | Secured Promissory Note | Three-month LIBOR

Revenue Recognition, Milestone Method [Line Items]

Stated percentage

3.00%

3.00%

3.00%

3.00%

3.00%

Collaborative Arrangement, Product | Emixustat | Initial Indication

Revenue Recognition, Milestone Method [Line Items]

Potential to receive development milestones

55,000,000

Collaborative Arrangement, Product | Emixustat | Second Indication

Revenue Recognition, Milestone Method [Line Items]

Potential to receive development milestones

27,500,000

Collaborative Arrangement, Product | Development Activities

Revenue Recognition, Milestone Method [Line Items]

Revenue from collaborations

$ 7,600,000

$ 24,100,000

35,400,000

Collaborative Arrangement, Product | Development Activities | Initial Indication | Upon Initiation of a Phase 2b/3 | UNITED STATES

Revenue Recognition, Milestone Method [Line Items]

Milestone method, revenue recognized

$ 5,000,000

Collaborative Arrangement, Product | Development Activities | Initial Indication | Upon Initiation of a Phase 3 | UNITED STATES

Revenue Recognition, Milestone Method [Line Items]

Milestone method, revenue recognized

5,000,000

Collaborative Arrangement, Product | Development Activities | Initial Indication | Upon Filing of a NDA with the FDA | UNITED STATES

Revenue Recognition, Milestone Method [Line Items]

Milestone method, revenue recognized

15,000,000

Collaborative Arrangement, Product | Development Activities | Initial Indication | Upon Receipt of Approval by the FDA of an NDA | UNITED STATES

Revenue Recognition, Milestone Method [Line Items]

Milestone method, revenue recognized

20,000,000

Collaborative Arrangement, Product | Development Activities | Initial Indication | Upon Receipt of Approval by Regulatory Authority of a Marketing Approval | JAPAN

Revenue Recognition, Milestone Method [Line Items]

Milestone method, revenue recognized

10,000,000

Collaborative Arrangement, Product | Development Activities | Second Indication | Upon Filing of a NDA with the FDA | UNITED STATES

Revenue Recognition, Milestone Method [Line Items]

Milestone method, revenue recognized

7,500,000

Collaborative Arrangement, Product | Development Activities | Second Indication | Upon Receipt of Approval by the FDA of an NDA | UNITED STATES

Revenue Recognition, Milestone Method [Line Items]

Milestone method, revenue recognized

10,000,000

Collaborative Arrangement, Product | Development Activities | Second Indication | Upon Receipt of Approval by Regulatory Authority of a Marketing Approval | JAPAN

Revenue Recognition, Milestone Method [Line Items]

Milestone method, revenue recognized

$ 5,000,000

Collaborative Arrangement, Product | OPA-6566

Revenue Recognition, Milestone Method [Line Items]

Revenue from collaborations

$ 0

Net Loss Per Share (Details)

Net Loss Per Share (Details) - shares	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Earnings Per Share [Abstract]
Antidilutive securities excluded from the calculation of diluted net income (loss) per share	1,089,606	96,683	185,551

Retirement Plans (Details)

Retirement Plans (Details) - USD ($) $ in Millions	1 Months Ended	12 Months Ended
	Jan. 31, 2015	Dec. 31, 2016	Dec. 31, 2015
Compensation and Retirement Disclosure [Abstract]
Employer matching contribution, percent		50.00%
Employee contribution, percent		6.00%
Percent of vesting of employees in their contributions		100.00%
Contributions by employer		$ 0.2	$ 0.2
Non-elective discretionary employer contribution	$ 0.4
Defined contribution plan, vesting period	4 years

Commitments and Contingencies53

Commitments and Contingencies (Lease and Severance) (Narrative) (Details) $ in Millions	Jul. 11, 2016	Dec. 31, 2016USD ($)	Dec. 31, 2015USD ($)	Dec. 31, 2014USD ($)	Jun. 30, 2016USD ($)	Jan. 02, 2015USD ($)	Sep. 19, 2014ft²	Jun. 26, 2014ft²
Related Party Transaction [Line Items]
Rent expense		$ 1.9	$ 2	$ 1
Employee Severance
Related Party Transaction [Line Items]
Severance paid		0.6
Restricted Stock Units (RSUs)
Related Party Transaction [Line Items]
Share-based compensation		0.2
Former Chief Strategy Officer | Employee Severance
Related Party Transaction [Line Items]
Severance and change in effective control agreements, percent of employee’s annual target bonus for current year	50.00%
Loss contingency accrual		0.2
Severance paid		0.2
Former Chief Strategy Officer | Restricted Stock Units (RSUs) | Share-based Compensation
Related Party Transaction [Line Items]
Loss contingency accrual					$ 0.5
Former Executive Vice President, General Counsel | Employee Severance
Related Party Transaction [Line Items]
Severance and change in effective control agreements, percent of employee’s annual target bonus for current year	35.00%
Loss contingency accrual		0.2
Severance paid		0.1
Office Building
Related Party Transaction [Line Items]
Net rentable area of leased property | ft²								38,723
Tenant leasehold improvement allowance						$ 1.2
Laboratory and Office Space
Related Party Transaction [Line Items]
Net rentable area of leased property | ft²							17,488
Rent expense		$ 0.4

Commitments and Contingencies54

Commitments and Contingencies (Additional Severance) (Narrative) (Details) - USD ($) $ in Thousands	Nov. 18, 2015	May 01, 2015	Oct. 14, 2014	May 31, 2015	Apr. 30, 2015	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Mar. 31, 2015	Aug. 31, 2016	May 11, 2015
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Exercise period after termination				12 months					3 months
Incremental compensation cost							$ 100
General and administrative expense						$ 22,895	27,987	$ 10,002
Restricted Stock Units (RSUs)
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
General and administrative expense							$ 2,100
Employees
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Severance term							6 months
Severance costs							$ 2,300
Severance and change in effective control agreements, percent of employee’s annual target bonus for current year							50.00%
Chief Executive Officer
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Severance term			18 months
Severance benefit term			18 months
Severance escrow, funded amount											$ 900
Incremental compensation cost				$ 2,700
Chief Executive Officer | Minimum
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Exercise period after termination					3 months
Chief Executive Officer | Maximum
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Exercise period after termination					12 months
Chief Operating Officer
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Severance term		9 months
Severance benefit term		9 months
Severance escrow, funded amount										$ 300
Incremental compensation cost	$ 1,800

Commitments and Contingencies55

Commitments and Contingencies (Future Minimum Lease Payments) (Details) $ in Thousands	Dec. 31, 2016USD ($)
Commitments and Contingencies Disclosure [Abstract]
2,017	$ 1,051
2,018	968
2,019	1,007
2,020	1,046
2,021	994
Thereafter	0
Operating lease obligations	$ 5,066

Related-Party Transactions (Det

Related-Party Transactions (Details) - USD ($) $ / shares in Units, $ in Millions	1 Months Ended	12 Months Ended
	Feb. 28, 2014	Dec. 31, 2016	Dec. 31, 2015	Dec. 22, 2015
Related Party Transaction [Line Items]
Common stock, shares issued		37,878,000	36,517,000
Common Stock
Related Party Transaction [Line Items]
Release of shares				7,752,425
George Lasezkay
Related Party Transaction [Line Items]
Servicing fees		$ 0.2
SBI Holdings, Inc.
Related Party Transaction [Line Items]
Common stock, shares issued		14,449,325
Dr. Kubota and SBI Holding
Related Party Transaction [Line Items]
Costs and expenses, related party			$ 0.8
IPO | Affiliated Entity | Common Stock
Related Party Transaction [Line Items]
Number of shares issued through debt conversion	3,636,365
IPO | Convertible Debt | Affiliated Entity
Related Party Transaction [Line Items]
Debt conversion price	$ 3.30

Quarterly Information (Unaudi57

Quarterly Information (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Revenue from collaborations	$ 265	$ 711	$ 2,874	$ 3,756	$ 2,543	$ 7,128	$ 7,181	$ 7,215	$ 7,606	$ 24,067	$ 35,396
Net loss	$ (7,207)	$ (6,976)	$ (7,751)	$ (12,591)	$ (8,281)	$ (3,550)	$ (9,738)	$ (3,940)	$ (34,525)	$ (25,509)	$ (2,006)
Basic net income (loss) per share (in dollars per share)	$ (0.19)	$ (0.18)	$ (0.21)	$ (0.34)	$ (0.23)	$ (0.10)	$ (0.27)	$ (0.11)	$ (0.92)	$ (0.71)	$ (0.06)
Diluted net income (loss) per share (in dollars per share)	$ (0.19)	$ (0.18)	$ (0.21)	$ (0.34)	$ (0.23)	$ (0.10)	$ (0.27)	$ (0.11)	$ (0.92)	$ (0.71)	$ (0.06)
Reduction of Indirect Charges Billed Earlier
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Revenue from collaborations					$ 2,600

Subsequent Events (Details)

Subsequent Events (Details) $ in Millions	Jan. 04, 2017extension	Jan. 31, 2017USD ($)	Dec. 31, 2016USD ($)	Jan. 12, 2017ft²
EyeMedics
Subsequent Event [Line Items]
Collaboration agreement, option period to purchase product rights			120 days
Option and license agreement, payment			$ 0.4
Subsequent Event | EyeMedics
Subsequent Event [Line Items]
Collaboration agreement, option period to purchase product rights		120 days
Option and license agreement, payment		$ 1.2
Subsequent Event | Nexus Canyon Park LLC
Subsequent Event [Line Items]
Lease Agreement, Number of Extensions | extension	1
Lease Agreement, Period of Extensions	2 years
Subsequent Event | Nexus Canyon Park LLC | Minimum
Subsequent Event [Line Items]
Lease Agreement, Period of Written Notice for Extension	18 months
Subsequent Event | Nexus Canyon Park LLC | Maximum
Subsequent Event [Line Items]
Lease Agreement, Period of Written Notice for Extension	12 months
Subsequent Event | Seattle Premises
Subsequent Event [Line Items]
Net rentable area of leased property | ft²				38,723