Alder Biopharmaceuticals (ALDR) 10-Q 27 Apr 17 2017 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2017	Apr. 20, 2017
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2017
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q1
Trading Symbol	ALDR
Entity Registrant Name	ALDER BIOPHARMACEUTICALS INC
Entity Central Index Key	1,423,824
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		50,410,458

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Current assets
Cash and cash equivalents	$ 79,713	$ 116,216
Short-term investments	209,851	235,651
Prepaid expenses and other assets	19,827	40,380
Inventory	936	936
Total current assets	310,327	393,183
Property and equipment, net	6,776	7,076
Investment in unconsolidated entity	716	865
Other assets	30	8,030
Total assets	317,849	409,154
Current liabilities
Accounts payable	20,300	10,361
Accrued liabilities	9,243	15,437
Deferred rent	92	92
Total current liabilities	29,635	25,890
Long-term deferred rent	455	481
Total liabilities	30,090	26,371
Commitments and contingencies
Stockholders’ equity
Common stock; $0.0001 par value; 200,000,000 shares authorized; 50,410,368 and 50,368,206 shares issued and outstanding, respectively	5	5
Additional paid-in capital	766,707	761,456
Accumulated deficit	(478,958)	(378,630)
Accumulated other comprehensive income (loss)	5	(48)
Total stockholders’ equity	287,759	382,783
Total liabilities and stockholders’ equity	$ 317,849	$ 409,154

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Mar. 31, 2017	Dec. 31, 2016
Statement Of Financial Position [Abstract]
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	50,410,368	50,368,206
Common stock, shares outstanding	50,410,368	50,368,206

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Operating expenses
Research and development	$ 90,689	$ 27,647
General and administrative	9,981	6,045
Total operating expenses	100,670	33,692
Loss from operations	(100,670)	(33,692)
Other income (expense)
Interest income	485	415
Foreign currency gain (loss)	6	(86)
Total other income, net	491	329
Net loss before equity in net loss of unconsolidated entity	(100,179)	(33,363)
Equity in net loss of unconsolidated entity	(149)
Net loss	$ (100,328)	$ (33,363)
Net loss per share - basic and diluted	$ (1.99)	$ (0.76)
Weighted average number of common shares used in net loss per share - basic and diluted	50,395,632	43,753,517

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Statement Of Income And Comprehensive Income [Abstract]
Net loss	$ (100,328)	$ (33,363)
Other comprehensive income:
Unrealized gain on securities available-for-sale, net of tax	53	414
Foreign currency translation income, net of tax		21
Total other comprehensive income	53	435
Comprehensive loss	$ (100,275)	$ (32,928)

Condensed Consolidated Stateme6

Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Operating activities
Net loss	$ (100,328)	$ (33,363)
Adjustments to reconcile net loss to net cash used in operating activities
Equity in net loss of unconsolidated entity	149
Depreciation and amortization	747	235
Stock-based compensation	5,180	3,017
Other non-cash charges, net	179	20
Changes in operating assets and liabilities
Prepaid expenses and other assets	28,553	460
Accounts payable	10,341	4,921
Accrued liabilities	(6,194)	(2,557)
Deferred rent	(26)	(14)
Net cash used in operating activities	(61,399)	(27,281)
Investing activities
Purchases of investments	(28,334)	(6,566)
Proceeds from maturities of investments	54,008	6,250
Purchases of property and equipment	(849)	(931)
Proceeds from sale of property and equipment		5
Net cash provided by (used in) investing activities	24,825	(1,242)
Financing activities
Proceeds from exercise of stock options	71	45
Net cash provided by financing activities	71	45
Effect of exchange rate changes on cash		21
Net decrease in cash and cash equivalents	(36,503)	(28,457)
Cash and cash equivalents
Beginning of period	116,216	206,492
End of period	79,713	178,035
Supplemental disclosures:
Purchases of property and equipment included in accounts payable and accrued liabilities	$ 101	$ 188

Nature of Business

Nature of Business	3 Months Ended
	Mar. 31, 2017
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Nature of Business	1. Nature of Business Alder BioPharmaceuticals, Inc. (the “Company”) is a clinical-stage biopharmaceutical company that discovers, develops and seeks to commercialize therapeutic antibodies with the potential to meaningfully transform current treatment paradigms. The Company has developed a proprietary antibody platform designed to select and manufacture antibodies that have the potential to maximize efficacy as well as speed of onset and durability of therapeutic response. The Company was incorporated in Delaware on May 20, 2002 and is located in Bothell, Washington. Public Offerings In April 2016, the Company completed an underwritten public offering of 6,182,795 shares of common stock, which included 806,451 shares the Company issued pursuant to the underwriters’ exercise of their option to purchase additional shares, at $23.25 per share. The Company received $134.9 million in net proceeds, after deducting underwriting discounts and commissions of $8.6 million and offering expenses of $0.3 million.

Summary of Significant Accounti

Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2017
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	2. Summary of Significant Accounting Policies Principles of Consolidation The accompanying unaudited condensed consolidated financial statements reflect the accounts of Alder BioPharmaceuticals, Inc. and its wholly-owned subsidiaries. All inter-company balances and transactions have been eliminated in consolidation. The condensed consolidated balance sheet data as of December 31, 2016 were derived from audited financial statements. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) and generally accepted accounting principles in the United States of America (“GAAP”) for unaudited condensed consolidated financial information. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. The accompanying unaudited condensed consolidated financial statements reflect all adjustments consisting of normal recurring adjustments which, in the opinion of management, are necessary for a fair statement of the Company’s financial position and results of its operations, as of and for the periods presented. The Company manages its business as one operating segment; however, the Company operates in three The Company has a relationship with a variable interest entity (“VIE”). The Company evaluates VIEs to determine whether the Company is the primary beneficiary by performing a qualitative and quantitative analysis of each VIE that includes a review of, among other factors, the VIE’s capital structure, contractual terms, related party relationships, the Company’s fee arrangements and the design of the VIE. This analysis includes determining whether the Company (1) has the power to direct matters that most significantly impact the activities of the VIE, and (2) has the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. In circumstances where the Company is not the primary beneficiary, but the Company has the ability to exercise significant influence over the operating and financial policies of a company in which it has an investment, the Company utilizes the equity method of accounting for recording investment activity. In assessing whether the Company exercises significant influence, it considers the nature and magnitude of the investment, the voting and protective rights held, any participation in the governance of the other company, and other relevant factors such as the presence of a collaboration or other business relationship. Under the equity method of accounting, the Company records in its results of operations its share of income or loss of the other company. If the Company’s share of losses exceeds the carrying value of its investment, it will suspend recognizing additional losses and will continue to do so unless the Company commits to providing additional funding. The Company monitors its investment to evaluate whether any decline in value has occurred that would be other-than-temporary, based on the implied value of recent company financings, public market prices of comparable companies, and general market conditions. The carrying value of the investment is included in the Company’s condensed consolidated balance sheet as investment in unconsolidated entity. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The results of the Company’s operations for the three months ended March 31, 2017 are not necessarily indicative of the results to be expected for the full year or for any other period. Concentrations of Credit Risk The Company is exposed to credit risk from its deposits of cash, cash equivalents and short-term investments in excess of amounts insured by the Federal Deposit Insurance Corporation. Other Non-Current Assets As of December 31, 2016, other non-current assets included an $8.0 million fee paid to a third party to secure additional production capacity. Upon execution of a binding agreement in March 2017, this payment was characterized as a non-refundable payment and recognized as research and development expense during the first quarter ended March 31, 2017. Liquidity and Going Concern As of December 31, 2016, the Company adopted the provisions of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 205-40, Presentation of Financial Statements - Going Concern (ASC 205-40), which requires management to assess the Company’s ability to continue as a going concern for one year after the date the financial statements are issued. This standard requires management to 1) identify and disclose if there are initial conditions indicating substantial doubt about the Company’s ability to continue as a going concern within one year of the issuance date of the financial statements, 2) disclose the principal conditions that gave rise to substantial doubt, 3) disclose management’s evaluation of the significance of those conditions in relation to the Company’s ability to meet its obligations and 4) disclose management’s plans that are intended to mitigate the adverse conditions. In accordance with the accounting standard, when considering management’s plans to mitigate the conditions giving rise to substantial doubt, management can only consider those plans which are probable to be successfully implemented. As disclosed in the 2016 Annual Report on Form 10-K, the Company’s projected expenditures may deplete current cash, cash equivalents and investments in the first quarter of 2018. As of March 31, 2017, management has further assessed this risk and, in accordance with the requirements of ASC 205-40, determined that there are initial conditions indicating that there is substantial doubt about the Company’s ability to continue as a going concern within one year of the issuance date of these condensed consolidated financial statements. These indicators are the Company’s accumulated deficit and the forecasted cash expenditures. As of March 31, 2017, the Company had an accumulated deficit of $479.0 million and cash, cash equivalents and short-term investments on hand of $289.6 million. The Company is currently forecasting a significant increase in expenditures to support the Biologics License Application, or BLA, submission, commercial readiness activities, and anticipated commercial launch of eptinezumab. The Company has developed plans to mitigate this risk, which primarily consist of raising additional capital through a combination of equity or debt financings, new collaborations, and reducing cash expenditures. The Company currently expects to seek funding in the second half of 2017. While the Company has raised capital in the past, the ability to raise capital in future periods is not considered probable, as defined under the accounting standards. As such, under the requirements of ASC 205-40, management may not consider the potential for future capital raises in their assessment of the Company’s ability to meet its obligations for the next twelve months. If the Company is not able to secure adequate additional funding, the Company plans to make reductions in spending. This may include extending payment terms with suppliers, liquidating assets, and suspending or curtailing planned programs. The Company may also have to delay, reduce the scope of, suspend or eliminate one or more research and development programs or its commercialization efforts. The ability to reduce spending under this plan, at a level that mitigates the factors described above, is not considered probable, as defined in the accounting standards; as such, under the requirements of ASC 205-40, the full extent to which management may extend the Company’s funds through these actions may not be considered in management’s assessment of the Company’s ability to continue as a going concern for the next twelve months. As a result, in accordance with the requirements of ASC 205-40, management has concluded that it is required to disclose that substantial doubt exists about the Company’s ability to continue as a going concern for one year from the date these financial statements are issued. While management has plans in place to mitigate these actions, they are not considered probable, as defined in the accounting standards, and a failure to raise the additional funding or to effectively implement cost reductions could harm the Company’s business, results of operations and future prospects. The condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606), which will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. This ASU stipulates that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The ASU also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In March 2016, the FASB issued ASU 2016-08, Principal versus Agent Considerations (Reporting Revenue Gross versus Net). This ASU clarifies the implementation guidance on principal versus agent considerations. In April 2016, the FASB issued ASU 2016-10, Identifying Performance Obligations and Licensing. This ASU clarifies two aspects of ASU 2014-09, Revenue from Contracts with Customers (Topic 606): identifying performance obligations and the licensing implementation guidance. In May 2016, the FASB issued ASU 2016-12, Narrow-Scope Improvements and Practical Expedients. This ASU addresses certain issues in ASU 2014-09, Revenue from Contracts with Customers (Topic 606) regarding assessing collectability, presentation of sales taxes, noncash consideration, and completed contracts and contract modifications at transition. In December 2016, the FASB issued ASU 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers. This ASU amends narrow aspects of ASU 2014-09, Revenue from Contracts with Customers. The new revenue standards are effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early adoption is permitted for annual reporting periods beginning after the original effective date of December 15, 2016. The standards permit the use of either the full retrospective or modified retrospective method. The Company does not believe adopting this guidance will have a material impact on its financial statements as the Company is not currently generating material revenues. In January 2016, the FASB issued ASU 2016-01, Financial Instruments-Overall. This ASU addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. This ASU will become effective for annual periods beginning after December 15, 2017. The Company is currently evaluating the impact of the adoption of this ASU on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases. This ASU requires the recognition of lease assets and lease liabilities on the balance sheet and disclosure of key information about leasing arrangements. This ASU will become effective for annual periods beginning after December 15, 2018. The Company expects adopting this ASU will result in an increase in the assets and liabilities on its consolidated balance sheets and will have no impact on its consolidated statements of operations and statement of cash flows. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows – Classification of Certain Cash Receipts and Cash Payments. This ASU addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. This ASU will become effective for annual periods beginning after December 15, 2017. The Company does not believe adopting this ASU will have a material impact as it relates to the treatment of equity distributions which are currently not material to the Company. The Company has reviewed other recent accounting pronouncements and concluded that they are either not applicable to the business, or that no material effect is expected on the consolidated financial statements as a result of future adoption.

Net Loss Per Share

Net Loss Per Share	3 Months Ended
	Mar. 31, 2017
Earnings Per Share [Abstract]
Net Loss Per Share	3. Net Loss Per Share Basic net loss per share is calculated by dividing net loss by the weighted average common shares outstanding during the period, without consideration for common stock equivalents. Diluted net loss per share is calculated by adjusting the weighted average common shares outstanding for the dilutive effect of common stock equivalents outstanding for the period, determined using the treasury-stock method. Three Months Ended March 31, 2017 2016 Net loss (in thousands) $ (100,328 ) $ (33,363 ) Denominator Weighted average common shares outstanding - basic and diluted 50,395,632 43,753,517 Net loss per share - basic and diluted $ (1.99 ) $ (0.76 ) The following weighted average numbers of outstanding stock options and employee stock purchase plan awards were excluded from the calculation of diluted net loss per share for the three months ended March 31, 2017 and 2016 because including them would have had an anti-dilutive effect. Therefore, basic and diluted net loss per share were the same for all periods presented. Three Months Ended March 31, 2017 2016 Stock options 5,963,117 3,748,232 Employee stock purchase plan 40,740 21,634 6,003,857 3,769,866

Short-term Investments

Short-term Investments	3 Months Ended
	Mar. 31, 2017
Short Term Investments [Abstract]
Short-term Investments	4. Short-term Investments Short-term investments consisted of available-for-sale securities as follows: Amortized Cost Gross unrealized gains Gross unrealized losses Fair Value (in thousands) Type of security as of March 31, 2017 Negotiable certificates of deposit maturing in one year or less $ 7,500 $ — $ (1 ) $ 7,499 U.S. government agency obligations maturing in one year or less 202,344 121 (113 ) 202,352 Total available-for-sale securities $ 209,844 $ 121 $ (114 ) $ 209,851 Type of security as of December 31, 2016 Negotiable certificates of deposit maturing in one year or less $ 11,000 $ 1 $ (4 ) $ 10,997 U.S. government agency obligations maturing in one year or less 224,697 27 (70 ) 224,654 Total available-for-sale securities $ 235,697 $ 28 $ (74 ) $ 235,651 Realized gains and losses are determined based on the specific identification method and are reported in other income in the condensed consolidated statement of operations. There were no realized gains or losses on sales of available-for-sale securities in the three months ended March 31, 2017 and 2016.

Fair Value Disclosures

Fair Value Disclosures	3 Months Ended
	Mar. 31, 2017
Fair Value Disclosures [Abstract]
Fair Value Disclosures	5 . Fair Value Disclosures The Company holds financial instruments that are measured at fair value which is determined according to a fair value hierarchy that prioritizes the inputs and assumptions used, and the valuation techniques used to measure fair value. The three levels of the fair value hierarchy are described as follows: Level 1 Inputs are unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 Inputs are quoted prices for similar assets and liabilities in active markets or quoted prices for identical or similar instruments in markets that are not active and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. Level 3 Inputs are unobservable inputs based on the Company’s own assumptions and valuation techniques used to measure assets and liabilities at fair value. The inputs require significant management judgment or estimation. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels. The Company established the fair value of its assets and liabilities using 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 and established a fair value hierarchy based on the inputs used to measure fair value. The following table presents the Company’s financial instruments by level within the fair value hierarchy: Fair Value Measurement Using Level 1 Level 2 Level 3 Total (in thousands) As of March 31, 2017 Cash equivalents Money market funds $ 75,466 $ — $ — $ 75,466 Short-term investments Negotiable certificates of deposit — 7,499 — 7,499 U.S. government agency obligations — 202,352 — 202,352 $ 75,466 $ 209,851 $ — $ 285,317 As of December 31, 2016 Cash equivalents Money market funds $ 111,149 $ — $ — $ 111,149 Short-term investments Negotiable certificates of deposit — 10,997 — 10,997 U.S. government agency obligations — 224,654 — 224,654 $ 111,149 $ 235,651 $ — $ 346,800 The Company’s negotiable certificates of deposit and U.S. government agency obligations are valued using fair value measurements that are considered to be Level 2. The investment custodian provides the Company with valuations of its securities portfolio. The primary source for the security valuation is Interactive Data Corporation (“IDC”), which evaluates securities based on market data. IDC utilizes evaluated pricing models that vary by asset class and include available trade, bid, and other market information. Generally, the methodology includes broker quotes, proprietary models, vast descriptive terms and conditions databases, as well as extensive quality control programs. The custodian utilizes proprietary valuation matrices for valuing all negotiable certificates of deposit. Accounts payable and accrued liabilities are carried at cost, which approximates fair value due to the short-term nature of these financial instruments.

Gain on License of Clazakizumab

Gain on License of Clazakizumab and Investment in Unconsolidated Entity	3 Months Ended
	Mar. 31, 2017
Gain On License Agreements And Investment In Unconsolidated Entity [Abstract]
Gain on License of Clazakizumab and Investment in Unconsolidated Entity	6. Gain on License of Clazakizumab and Investment in Unconsolidated Entity In May 2016, the Company licensed the exclusive worldwide rights to its product candidate clazakizumab to Vitaeris, Inc. (“Vitaeris”), based in Vancouver, British Columbia, that is pursuing innovative therapeutic indications in chronic inflammatory diseases. In exchange for the rights to clazakizumab, the Company received an equity stake in Vitaeris and is eligible to receive royalties and certain other payments. In addition, Randall C. Schatzman, Ph.D., the Company’s president and chief executive officer, joined Vitaeris’ board of directors. As of March 31, 2017, the Company held $0.9 million in inventory of finished goods related to clazakizumab on its condensed consolidated balance sheet. Clazakizumab has not received regulatory approval for commercial sale and the related inventory is currently held only for resale associated with the Vitaeris agreement. The Company values inventory at the lower of cost or market value which is determined using the specific identification basis. Inventory is reduced to net realizable value for excess, obsolete or unsalable inventory. Vitaeris is a VIE for which the Company is not the primary beneficiary as the Company does not have the power to direct the activities that most significantly influence the economic performance of the entity. In addition to the Company’s exchange of license rights for clazakizumab, Vitaeris was capitalized through cash investments by other parties. The investment in Vitaeris is accounted for under the equity method of accounting because the Company holds common stock of Vitaeris and has significant influence over the operating and financial policies of Vitaeris through its ownership, license arrangement and representation on the board of directors. Therefore, the Company records its share of any loss or income generated by Vitaeris, which is recorded on a three-month lag, within the condensed consolidated statement of operations. The investment is reflected as an investment in unconsolidated entity on the Company’s condensed consolidated balance sheet which represents the investment in Vitaeris, net of the Company’s portion of any generated loss or income. The Company recorded $0.1 million in net loss with respect to Vitaeris for the three months ended March 31, 2017. This net loss reduced the Company’s carrying value of the Company’s investment in Vitaeris to $0.7 million which is classified as a non-current asset as of March 31, 2017. The Company has no implied or unfunded commitments related to Vitaeris and its maximum exposure to loss is limited to the current carrying value of the investment.

Accrued Liabilities

Accrued Liabilities	3 Months Ended
	Mar. 31, 2017
Payables And Accruals [Abstract]
Accrued Liabilities	7. Accrued Liabilities Accrued liabilities consisted of the following for the dates indicated: March 31, December 31, 2017 2016 (in thousands) Compensation and benefits $ 3,064 $ 4,833 Contracted research and development 3,841 9,837 Professional services and other 2,338 767 $ 9,243 $ 15,437

Summary of Significant Accoun14

Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2017
Accounting Policies [Abstract]
Principles of Consolidation	Principles of Consolidation The accompanying unaudited condensed consolidated financial statements reflect the accounts of Alder BioPharmaceuticals, Inc. and its wholly-owned subsidiaries. All inter-company balances and transactions have been eliminated in consolidation. The condensed consolidated balance sheet data as of December 31, 2016 were derived from audited financial statements. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) and generally accepted accounting principles in the United States of America (“GAAP”) for unaudited condensed consolidated financial information. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. The accompanying unaudited condensed consolidated financial statements reflect all adjustments consisting of normal recurring adjustments which, in the opinion of management, are necessary for a fair statement of the Company’s financial position and results of its operations, as of and for the periods presented. The Company manages its business as one operating segment; however, the Company operates in three The Company has a relationship with a variable interest entity (“VIE”). The Company evaluates VIEs to determine whether the Company is the primary beneficiary by performing a qualitative and quantitative analysis of each VIE that includes a review of, among other factors, the VIE’s capital structure, contractual terms, related party relationships, the Company’s fee arrangements and the design of the VIE. This analysis includes determining whether the Company (1) has the power to direct matters that most significantly impact the activities of the VIE, and (2) has the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. In circumstances where the Company is not the primary beneficiary, but the Company has the ability to exercise significant influence over the operating and financial policies of a company in which it has an investment, the Company utilizes the equity method of accounting for recording investment activity. In assessing whether the Company exercises significant influence, it considers the nature and magnitude of the investment, the voting and protective rights held, any participation in the governance of the other company, and other relevant factors such as the presence of a collaboration or other business relationship. Under the equity method of accounting, the Company records in its results of operations its share of income or loss of the other company. If the Company’s share of losses exceeds the carrying value of its investment, it will suspend recognizing additional losses and will continue to do so unless the Company commits to providing additional funding. The Company monitors its investment to evaluate whether any decline in value has occurred that would be other-than-temporary, based on the implied value of recent company financings, public market prices of comparable companies, and general market conditions. The carrying value of the investment is included in the Company’s condensed consolidated balance sheet as investment in unconsolidated entity. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.
Use of Estimates	Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The results of the Company’s operations for the three months ended March 31, 2017 are not necessarily indicative of the results to be expected for the full year or for any other period.
Concentrations of Credit Risk	Concentrations of Credit Risk The Company is exposed to credit risk from its deposits of cash, cash equivalents and short-term investments in excess of amounts insured by the Federal Deposit Insurance Corporation.
Other Non-Current Assets	Other Non-Current Assets As of December 31, 2016, other non-current assets included an $8.0 million fee paid to a third party to secure additional production capacity. Upon execution of a binding agreement in March 2017, this payment was characterized as a non-refundable payment and recognized as research and development expense during the first quarter ended March 31, 2017.
Liquidity and Going Concern	Liquidity and Going Concern As of December 31, 2016, the Company adopted the provisions of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 205-40, Presentation of Financial Statements - Going Concern (ASC 205-40), which requires management to assess the Company’s ability to continue as a going concern for one year after the date the financial statements are issued. This standard requires management to 1) identify and disclose if there are initial conditions indicating substantial doubt about the Company’s ability to continue as a going concern within one year of the issuance date of the financial statements, 2) disclose the principal conditions that gave rise to substantial doubt, 3) disclose management’s evaluation of the significance of those conditions in relation to the Company’s ability to meet its obligations and 4) disclose management’s plans that are intended to mitigate the adverse conditions. In accordance with the accounting standard, when considering management’s plans to mitigate the conditions giving rise to substantial doubt, management can only consider those plans which are probable to be successfully implemented. As disclosed in the 2016 Annual Report on Form 10-K, the Company’s projected expenditures may deplete current cash, cash equivalents and investments in the first quarter of 2018. As of March 31, 2017, management has further assessed this risk and, in accordance with the requirements of ASC 205-40, determined that there are initial conditions indicating that there is substantial doubt about the Company’s ability to continue as a going concern within one year of the issuance date of these condensed consolidated financial statements. These indicators are the Company’s accumulated deficit and the forecasted cash expenditures. As of March 31, 2017, the Company had an accumulated deficit of $479.0 million and cash, cash equivalents and short-term investments on hand of $289.6 million. The Company is currently forecasting a significant increase in expenditures to support the Biologics License Application, or BLA, submission, commercial readiness activities, and anticipated commercial launch of eptinezumab. The Company has developed plans to mitigate this risk, which primarily consist of raising additional capital through a combination of equity or debt financings, new collaborations, and reducing cash expenditures. The Company currently expects to seek funding in the second half of 2017. While the Company has raised capital in the past, the ability to raise capital in future periods is not considered probable, as defined under the accounting standards. As such, under the requirements of ASC 205-40, management may not consider the potential for future capital raises in their assessment of the Company’s ability to meet its obligations for the next twelve months. If the Company is not able to secure adequate additional funding, the Company plans to make reductions in spending. This may include extending payment terms with suppliers, liquidating assets, and suspending or curtailing planned programs. The Company may also have to delay, reduce the scope of, suspend or eliminate one or more research and development programs or its commercialization efforts. The ability to reduce spending under this plan, at a level that mitigates the factors described above, is not considered probable, as defined in the accounting standards; as such, under the requirements of ASC 205-40, the full extent to which management may extend the Company’s funds through these actions may not be considered in management’s assessment of the Company’s ability to continue as a going concern for the next twelve months. As a result, in accordance with the requirements of ASC 205-40, management has concluded that it is required to disclose that substantial doubt exists about the Company’s ability to continue as a going concern for one year from the date these financial statements are issued. While management has plans in place to mitigate these actions, they are not considered probable, as defined in the accounting standards, and a failure to raise the additional funding or to effectively implement cost reductions could harm the Company’s business, results of operations and future prospects. The condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, the realization of assets and the satisfaction of liabilities and commitments in the normal course of business.
Recent Accounting Pronouncements	Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606), which will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. This ASU stipulates that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The ASU also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In March 2016, the FASB issued ASU 2016-08, Principal versus Agent Considerations (Reporting Revenue Gross versus Net). This ASU clarifies the implementation guidance on principal versus agent considerations. In April 2016, the FASB issued ASU 2016-10, Identifying Performance Obligations and Licensing. This ASU clarifies two aspects of ASU 2014-09, Revenue from Contracts with Customers (Topic 606): identifying performance obligations and the licensing implementation guidance. In May 2016, the FASB issued ASU 2016-12, Narrow-Scope Improvements and Practical Expedients. This ASU addresses certain issues in ASU 2014-09, Revenue from Contracts with Customers (Topic 606) regarding assessing collectability, presentation of sales taxes, noncash consideration, and completed contracts and contract modifications at transition. In December 2016, the FASB issued ASU 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers. This ASU amends narrow aspects of ASU 2014-09, Revenue from Contracts with Customers. The new revenue standards are effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early adoption is permitted for annual reporting periods beginning after the original effective date of December 15, 2016. The standards permit the use of either the full retrospective or modified retrospective method. The Company does not believe adopting this guidance will have a material impact on its financial statements as the Company is not currently generating material revenues. In January 2016, the FASB issued ASU 2016-01, Financial Instruments-Overall. This ASU addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. This ASU will become effective for annual periods beginning after December 15, 2017. The Company is currently evaluating the impact of the adoption of this ASU on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases. This ASU requires the recognition of lease assets and lease liabilities on the balance sheet and disclosure of key information about leasing arrangements. This ASU will become effective for annual periods beginning after December 15, 2018. The Company expects adopting this ASU will result in an increase in the assets and liabilities on its consolidated balance sheets and will have no impact on its consolidated statements of operations and statement of cash flows. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows – Classification of Certain Cash Receipts and Cash Payments. This ASU addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. This ASU will become effective for annual periods beginning after December 15, 2017. The Company does not believe adopting this ASU will have a material impact as it relates to the treatment of equity distributions which are currently not material to the Company. The Company has reviewed other recent accounting pronouncements and concluded that they are either not applicable to the business, or that no material effect is expected on the consolidated financial statements as a result of future adoption.

Net Loss Per Share (Tables)

Net Loss Per Share (Tables)	3 Months Ended
	Mar. 31, 2017
Earnings Per Share [Abstract]
Schedule of Basic and Diluted Earnings per Share	Basic net loss per share is calculated by dividing net loss by the weighted average common shares outstanding during the period, without consideration for common stock equivalents. Diluted net loss per share is calculated by adjusting the weighted average common shares outstanding for the dilutive effect of common stock equivalents outstanding for the period, determined using the treasury-stock method. Three Months Ended March 31, 2017 2016 Net loss (in thousands) $ (100,328 ) $ (33,363 ) Denominator Weighted average common shares outstanding - basic and diluted 50,395,632 43,753,517 Net loss per share - basic and diluted $ (1.99 ) $ (0.76 )
Schedule of Weighted Average Numbers of Outstanding Stock Options and Employee Stock Purchase Plan Awards Excluded from Calculation of Diluted Net Loss Per Share	The following weighted average numbers of outstanding stock options and employee stock purchase plan awards were excluded from the calculation of diluted net loss per share for the three months ended March 31, 2017 and 2016 because including them would have had an anti-dilutive effect. Therefore, basic and diluted net loss per share were the same for all periods presented. Three Months Ended March 31, 2017 2016 Stock options 5,963,117 3,748,232 Employee stock purchase plan 40,740 21,634 6,003,857 3,769,866

Short-term Investments (Tables)

Short-term Investments (Tables)	3 Months Ended
	Mar. 31, 2017
Short Term Investments [Abstract]
Schedule of Available for Sale Securities	Short-term investments consisted of available-for-sale securities as follows: Amortized Cost Gross unrealized gains Gross unrealized losses Fair Value (in thousands) Type of security as of March 31, 2017 Negotiable certificates of deposit maturing in one year or less $ 7,500 $ — $ (1 ) $ 7,499 U.S. government agency obligations maturing in one year or less 202,344 121 (113 ) 202,352 Total available-for-sale securities $ 209,844 $ 121 $ (114 ) $ 209,851 Type of security as of December 31, 2016 Negotiable certificates of deposit maturing in one year or less $ 11,000 $ 1 $ (4 ) $ 10,997 U.S. government agency obligations maturing in one year or less 224,697 27 (70 ) 224,654 Total available-for-sale securities $ 235,697 $ 28 $ (74 ) $ 235,651

Fair Value Disclosures (Tables)

Fair Value Disclosures (Tables)	3 Months Ended
	Mar. 31, 2017
Fair Value Disclosures [Abstract]
Schedule of Financial Instruments by Level within Fair Value Hierarchy	The following table presents the Company’s financial instruments by level within the fair value hierarchy: Fair Value Measurement Using Level 1 Level 2 Level 3 Total (in thousands) As of March 31, 2017 Cash equivalents Money market funds $ 75,466 $ — $ — $ 75,466 Short-term investments Negotiable certificates of deposit — 7,499 — 7,499 U.S. government agency obligations — 202,352 — 202,352 $ 75,466 $ 209,851 $ — $ 285,317 As of December 31, 2016 Cash equivalents Money market funds $ 111,149 $ — $ — $ 111,149 Short-term investments Negotiable certificates of deposit — 10,997 — 10,997 U.S. government agency obligations — 224,654 — 224,654 $ 111,149 $ 235,651 $ — $ 346,800

Accrued Liabilities (Tables)

Accrued Liabilities (Tables)	3 Months Ended
	Mar. 31, 2017
Payables And Accruals [Abstract]
Schedule of Accrued Liabilities	Accrued liabilities consisted of the following for the dates indicated: March 31, December 31, 2017 2016 (in thousands) Compensation and benefits $ 3,064 $ 4,833 Contracted research and development 3,841 9,837 Professional services and other 2,338 767 $ 9,243 $ 15,437

Nature of Business - Additional

Nature of Business - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions	1 Months Ended	3 Months Ended
	Apr. 30, 2016	Mar. 31, 2017
Nature Of Operations [Line Items]
Company Incorporation, date		May 20, 2002
Public offering, shares issued	6,182,795
Shares issued, price per share	$ 23.25
Proceeds from the public offering	$ 134.9
Underwriting discounts and commissions	8.6
Offering expenses	$ 0.3
Over Allotment Option
Nature Of Operations [Line Items]
Public offering, shares issued	806,451

Summary of Significant Accoun20

Summary of Significant Accounting Policies - Additional Information (Detail) $ in Thousands	3 Months Ended
	Mar. 31, 2017USD ($)SegmentCountry	Dec. 31, 2016USD ($)
Significant Accounting Policies [Line Items]
Number of operating segment | Segment	1
Number of operating geographic regions | Country	3
Accumulated deficit	$ (478,958)	$ (378,630)
Cash, cash equivalents and short-term investments	$ 289,600
Other non-current assets
Significant Accounting Policies [Line Items]
Non refundable fee		$ 8,000

Net Loss Per Share - Schedule o

Net Loss Per Share - Schedule of Basic and Diluted Earnings per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Earnings Per Share [Abstract]
Net loss	$ (100,328)	$ (33,363)
Denominator
Weighted average common shares outstanding - basic and diluted	50,395,632	43,753,517
Net loss per share - basic and diluted	$ (1.99)	$ (0.76)

Net Loss Per Share - Schedule22

Net Loss Per Share - Schedule of Weighted Average Numbers of Outstanding Stock Options and Employee Purchase Plan Awards Excluded from Calculation of Diluted Net Loss Per Share (Detail) - shares	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Outstanding stock options and employee stock purchase plan awards excluded from calculation of diluted net loss per share	6,003,857	3,769,866
Stock options
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Outstanding stock options and employee stock purchase plan awards excluded from calculation of diluted net loss per share	5,963,117	3,748,232
Employee stock purchase plan
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Outstanding stock options and employee stock purchase plan awards excluded from calculation of diluted net loss per share	40,740	21,634

Short-term Investments - Schedu

Short-term Investments - Schedule of Available for Sale Securities (Detail) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	$ 209,844	$ 235,697
Gross unrealized gains	121	28
Gross unrealized losses	(114)	(74)
Fair Value	209,851	235,651
Negotiable certificates of deposit maturing in one year or less
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	7,500	11,000
Gross unrealized gains		1
Gross unrealized losses	(1)	(4)
Fair Value	7,499	10,997
U.S. government agency obligations maturing in one year or less
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	202,344	224,697
Gross unrealized gains	121	27
Gross unrealized losses	(113)	(70)
Fair Value	$ 202,352	$ 224,654

Short-term Investments - Additi

Short-term Investments - Additional Information (Detail) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Investments Debt And Equity Securities [Abstract]
Available for sale securities realized gains or losses	$ 0	$ 0

Fair Value Disclosures - Schedu

Fair Value Disclosures - Schedule of Financial Instruments by Level within Fair Value Hierarchy (Detail) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	$ 209,851	$ 235,651
Assets at fair value	285,317	346,800
Money market Funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	75,466	111,149
Negotiable Certificates of Deposit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	7,499	10,997
U.S. government agency obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	202,352	224,654
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets at fair value	75,466	111,149
Level 1 | Money market Funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	75,466	111,149
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets at fair value	209,851	235,651
Level 2 | Negotiable Certificates of Deposit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	7,499	10,997
Level 2 | U.S. government agency obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	$ 202,352	$ 224,654

Gain on License of Clazakizum26

Gain on License of Clazakizumab and Investment in Unconsolidated Entity - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Gain on License Agreements and Investment in Unconsolidated Entity [Line Items]
Net loss recorded	$ 149
Carrying value of investment	716	$ 865
Vitaeris, Inc.
Gain on License Agreements and Investment in Unconsolidated Entity [Line Items]
Initial gain on license agreement	1,100
Inventory of finished goods	$ 900
Lag in recording company's share of loss or income generated by unconsolidated entity within condensed consolidated statement of operations (in months)	3 months
Net loss recorded	$ 100
Carrying value of investment	$ 700

Accrued Liabilities - Schedule

Accrued Liabilities - Schedule of Accrued Liabilities (Detail) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Payables And Accruals [Abstract]
Compensation and benefits	$ 3,064	$ 4,833
Contracted research and development	3,841	9,837
Professional services and other	2,338	767
Accrued liabilities	$ 9,243	$ 15,437