Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Aug. 02, 2019 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | ALDR | |
Entity Registrant Name | ALDER BIOPHARMACEUTICALS INC | |
Entity Central Index Key | 0001423824 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 83,637,234 | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity File Number | 001-36431 | |
Entity Tax Identification Number | 900134860 | |
Entity Address, Address Line One | 11804 North Creek Parkway South | |
Entity Address, City or Town | Bothell | |
Entity Address, State or Province | WA | |
Entity Address, Postal Zip Code | 98011 | |
City Area Code | (425) | |
Local Phone Number | 205-2900 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Current assets | ||
Cash and cash equivalents | $ 88,378 | $ 87,865 |
Short-term investments | 320,933 | 319,504 |
Restricted cash | 31,341 | 5,000 |
Prepaid expenses and other assets | 11,020 | 7,440 |
Total current assets | 451,672 | 419,809 |
Property and equipment, net | 6,403 | 6,400 |
Right of use assets | 4,480 | |
Other assets | 12 | 30 |
Total assets | 462,567 | 426,239 |
Current liabilities | ||
Accounts payable | 7,722 | 8,945 |
Accrued liabilities | 41,826 | 19,217 |
Operating lease liability | 981 | |
Deferred rent | 74 | |
Total current liabilities | 50,529 | 28,236 |
Long-term operating lease liability | 4,061 | |
Long-term deferred rent | 510 | |
2025 convertible senior notes, net | 188,323 | 182,104 |
Derivative liability | 2,803 | 1,658 |
Total liabilities | 245,716 | 212,508 |
Commitments and contingencies | ||
Stockholders’ equity | ||
Common stock; $0.0001 par value; 200,000,000 shares authorized; 83,609,492 and 68,410,576 shares issued and outstanding, respectively | 8 | 7 |
Additional paid-in capital | 1,250,629 | 1,074,963 |
Accumulated deficit | (1,140,283) | (963,938) |
Accumulated other comprehensive loss | (49) | (1,056) |
Total stockholders’ equity | 110,305 | 109,976 |
Total liabilities, convertible preferred stock and stockholders’ equity | 462,567 | 426,239 |
Class A-1 Convertible Preferred Stock | ||
Current liabilities | ||
Class A-1 convertible preferred stock; $0.0001 par value; 10,000,000 shares authorized; 779,776 and 760,753 shares issued and outstanding, respectively; liquidation preference of $107,516 and $104,893, respectively | $ 106,546 | $ 103,755 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 83,609,492 | 68,410,576 |
Common stock, shares outstanding | 83,609,492 | 68,410,576 |
Class A-1 Convertible Preferred Stock | ||
Temporary equity, par value | $ 0.0001 | $ 0.0001 |
Temporary equity, shares authorized | 10,000,000 | 10,000,000 |
Temporary equity, shares issued | 779,776 | 760,753 |
Temporary equity, shares outstanding | 779,776 | 760,753 |
Temporary equity, liquidation preference | $ 107,516 | $ 104,893 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenues | ||||
Collaboration and license agreements | $ 0 | $ 0 | $ 0 | $ 0 |
Type of Revenue [Extensible List] | aldr:CollaborationAndLicenseAgreementsMember | aldr:CollaborationAndLicenseAgreementsMember | aldr:CollaborationAndLicenseAgreementsMember | aldr:CollaborationAndLicenseAgreementsMember |
Operating expenses | ||||
Research and development | $ 34,125,000 | $ 52,818,000 | $ 103,714,000 | $ 126,866,000 |
General and administrative | 21,633,000 | 11,911,000 | 66,131,000 | 23,464,000 |
Total operating expenses | 55,758,000 | 64,729,000 | 169,845,000 | 150,330,000 |
Loss from operations | (55,758,000) | (64,729,000) | (169,845,000) | (150,330,000) |
Other income (expense) | ||||
Interest income | 2,492,000 | 2,533,000 | 4,458,000 | 4,176,000 |
Interest expense | (4,975,000) | (4,688,000) | (9,813,000) | (7,539,000) |
Change in fair value of derivative liability | (170,000) | (1,505,000) | (1,145,000) | (1,505,000) |
Total other income (expense), net | (2,653,000) | (3,660,000) | (6,500,000) | (4,868,000) |
Net loss before equity in net loss of unconsolidated entity | (58,411,000) | (68,389,000) | (176,345,000) | (155,198,000) |
Equity in net loss of unconsolidated entity | (222,000) | |||
Net loss | (58,411,000) | (68,389,000) | (176,345,000) | (155,420,000) |
Deemed dividends on convertible preferred stock attributable to accretion of beneficial conversion feature | (29,460,000) | |||
Dividends on convertible preferred stock | (1,480,000) | (2,302,000) | (2,791,000) | (3,385,000) |
Net loss applicable to common stockholders | $ (59,891,000) | $ (70,691,000) | $ (179,136,000) | $ (188,265,000) |
Net loss per share applicable to common stockholders - basic and diluted | $ (0.72) | $ (1.04) | $ (2.29) | $ (2.77) |
Weighted average number of common shares used in net loss per share - basic and diluted | 83,479,867 | 67,966,066 | 78,297,180 | 67,905,804 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Net loss | $ (58,411) | $ (68,389) | $ (176,345) | $ (155,420) |
Other comprehensive income (loss): | ||||
Unrealized gain (loss) on securities available-for-sale, net of tax | 445 | (386) | 1,007 | (1,263) |
Total other comprehensive income (loss), net | 445 | (386) | 1,007 | (1,263) |
Comprehensive loss | $ (57,966) | $ (68,775) | $ (175,338) | $ (156,683) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Series A-1 Convertible Preferred Stock |
Issuance of Class A-1 convertible preferred stock, net of issuance costs of $2.3 million | $ 97,710 | |||||
Issuance of Class A-1 convertible preferred stock, net of issuance costs of $2.3 million, shares | 725,268 | |||||
Beneficial conversion feature on Class A-1 convertible preferred stock | $ (29,460) | |||||
Deemed dividend on convertible preferred stock attributable to accretion of beneficial conversion feature | 29,460 | |||||
Paid-in-kind dividends on convertible preferred stock | $ 3,385 | |||||
Paid-in-kind dividends on convertible preferred stock, shares | 16,927 | |||||
Ending Balance at Jun. 30, 2018 | $ 101,095 | |||||
Ending Balance, (in shares) at Jun. 30, 2018 | 742,195 | |||||
Beginning Balance at Dec. 31, 2017 | $ 279,275 | $ 7 | $ 946,869 | $ (667,509) | $ (92) | |
Beginning Balance, (in shares) at Dec. 31, 2017 | 67,842,942 | |||||
Net loss | (155,420) | (155,420) | ||||
Other comprehensive loss | (1,263) | (1,263) | ||||
Beneficial conversion feature on Class A-1 convertible preferred stock | 29,460 | 29,460 | ||||
Deemed dividend on convertible preferred stock attributable to accretion of beneficial conversion feature | (29,460) | (29,460) | ||||
Paid-in-kind dividends on convertible preferred stock | (3,385) | (3,385) | ||||
Equity component of 2025 convertible senior notes | 109,911 | 109,911 | ||||
Equity component of deferred financing costs for 2025 convertible senior notes | (3,763) | (3,763) | ||||
Stock-based compensation | 13,169 | 13,169 | ||||
Exercise of stock options | 426 | 426 | ||||
Exercise of stock options, shares | 233,562 | |||||
Shares issued under employee stock purchase plan | 716 | 716 | ||||
Shares issued under employee stock purchase plan, shares | 76,570 | |||||
Ending Balance at Jun. 30, 2018 | 239,666 | $ 7 | 1,063,943 | (822,929) | (1,355) | |
Ending Balance, (in shares) at Jun. 30, 2018 | 68,153,074 | |||||
Beginning Balance at Dec. 31, 2018 | $ 103,755 | |||||
Beginning Balance, (in shares) at Dec. 31, 2018 | 760,753 | |||||
Paid-in-kind dividends on convertible preferred stock | $ 2,791 | |||||
Paid-in-kind dividends on convertible preferred stock, shares | 19,023 | |||||
Ending Balance at Jun. 30, 2019 | $ 106,546 | |||||
Ending Balance, (in shares) at Jun. 30, 2019 | 779,776 | |||||
Beginning Balance at Dec. 31, 2018 | 109,976 | $ 7 | 1,074,963 | (963,938) | (1,056) | |
Beginning Balance, (in shares) at Dec. 31, 2018 | 68,410,576 | |||||
Net loss | (176,345) | (176,345) | ||||
Other comprehensive loss | 1,007 | 1,007 | ||||
Paid-in-kind dividends on convertible preferred stock | (2,791) | (2,791) | ||||
Issuance of common stock, net of offering costs | 159,098 | $ 1 | 159,097 | |||
Issuance of common stock, net of offering costs, shares | 14,739,130 | |||||
Stock-based compensation | 17,959 | 17,959 | ||||
Exercise of stock options | 493 | 493 | ||||
Exercise of stock options, shares | 104,427 | |||||
Restricted stock units vested, net, shares | 256,711 | |||||
Shares issued under employee stock purchase plan | 908 | 908 | ||||
Shares issued under employee stock purchase plan, shares | 98,648 | |||||
Ending Balance at Jun. 30, 2019 | $ 110,305 | $ 8 | $ 1,250,629 | $ (1,140,283) | $ (49) | |
Ending Balance, (in shares) at Jun. 30, 2019 | 83,609,492 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders' Equity (Unaudited) (Parenthetical) $ in Millions | 6 Months Ended |
Jun. 30, 2018USD ($) | |
Series A-1 Convertible Preferred Stock | |
Issuance costs, net | $ 2.3 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Operating activities | ||
Net loss | $ (176,345) | $ (155,420) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Equity in net loss of unconsolidated entity | 222 | |
Depreciation and amortization | 1,070 | 1,608 |
Stock-based compensation | 17,959 | 13,169 |
Accretion of discount on convertible notes | 6,219 | 4,544 |
Non-cash change in fair value of derivative liability | 1,145 | 1,505 |
Other non-cash charges, net | (1,712) | (1,460) |
Changes in operating assets and liabilities | ||
Prepaid expenses and other assets | (3,562) | 3,373 |
Accounts payable | (1,257) | 8,026 |
Accrued liabilities | 22,609 | (2,083) |
Deferred rent | (10) | |
Net cash used in operating activities | (133,874) | (126,526) |
Investing activities | ||
Purchases of investments | (64,022) | (487,031) |
Proceeds from maturities of investments | 65,290 | 193,000 |
Proceeds from sales of investments | 83,184 | |
Purchases of property and equipment | (1,039) | (277) |
Net cash provided by (used in) investing activities | 229 | (211,124) |
Financing activities | ||
Proceeds from issuance of 2025 convertible senior notes, net of offering costs | 277,656 | |
Proceeds from issuance of convertible preferred stock, net of offering costs | 97,710 | |
Proceeds from issuance of common stock, net of offering costs | 159,098 | |
Proceeds from exercise of stock options and employee stock purchase plan | 1,401 | 1,142 |
Net cash provided by financing activities | 160,499 | 376,508 |
Net increase in cash, cash equivalents and restricted cash | 26,854 | 38,858 |
Cash, cash equivalents and restricted cash | ||
Beginning of period | 92,865 | 86,896 |
End of period | 119,719 | 125,754 |
Supplemental disclosures: | ||
Cash paid for interest | 3,594 | |
Purchases of property and equipment included in accounts payable and accrued liabilities | $ 243 | $ 246 |
Nature of Business
Nature of Business | 6 Months Ended |
Jun. 30, 2019 | |
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 the treatment paradigm in migraine. 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. Financings On March 4, 2019, the Company completed an underwritten public offering of 13,000,000 shares of common stock, which included 1,695,652 shares issued pursuant to the underwriters’ exercise of their option to purchase additional shares. Concurrent with the public offering, the Company sold in a private placement 1,739,130 shares of common stock to the Redmile Group, LLC (a related party) and certain institutional and other accredited investors affiliated with or managed by Redmile Group, LLC. The Company received approximately $159.1 million in net proceeds from these offerings, after deducting underwriting discounts and commissions and placement agent fees of $10.2 million and offering expenses of approximately $0.2 million. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2019 | |
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, Alder BioPharmaceuticals Pty. Ltd., AlderBio Holdings LLC, and Alder BioPharmaceuticals Limited. All inter-company balances and transactions have been eliminated in consolidation. The condensed consolidated balance sheet data as of December 31, 2018 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, 2018. 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 and six months ended June 30, 2019 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, investments and restricted cash in excess of amounts insured by the Federal Deposit Insurance Corporation and Securities Investor Protection Corporation. Restricted Cash The Company had restricted cash of $31.3 million as of June 30, 2019, classified as current assets. The funds are restricted pursuant to contractual agreements with third-party manufacturers for payments to be made under those agreements in 2019, or for security under standby letter of credit agreements which expire in 12 months or less. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets to the total of cash, cash equivalents and restricted cash shown in the condensed consolidated statement of cash flows. June 30, December 31, 2019 2018 (in thousands) Cash and cash equivalents $ 88,378 $ 87,865 Restricted cash 31,341 5,000 Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows $ 119,719 $ 92,865 Convertible Senior Notes, Net In accordance with accounting guidance for debt with conversion and other options, the Company separately accounted for the liability and equity components of the 2.5% Convertible Senior Notes due 2025 (the “Convertible Notes”) by allocating the proceeds between the liability component and the embedded conversion option (the “Equity Component”) due to the Company’s ability to settle the Convertible Notes in cash, common stock or a combination of cash and common stock, at its option. The carrying amount of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated convertible feature. The allocation was performed in a manner that reflected the Company’s non-convertible debt borrowing rate for similar debt. The Equity Component of the Convertible Notes was recognized as a debt discount and represents the difference between the proceeds from the issuance of the Convertible Notes and the fair value of the liability of the Convertible Notes on their respective dates of issuance. The excess of the principal amount of the liability component over its carrying amount is amortized to interest expense using the effective interest method over seven years. The Equity Component is not remeasured as long as it continues to meet the conditions for equity classification. In connection with the issuance of the Convertible Notes, the Company also incurred certain offering costs directly attributable to the offering. Such costs are deferred and amortized to interest expense over the term of the debt using the effective interest method. A portion of the deferred financing costs incurred in connection with the Convertible Notes was deemed to relate to the Equity Component and was allocated to additional paid-in capital. Convertible Preferred Stock The Company recorded the convertible preferred stock at fair value on the date of issuance, net of issuance costs. The convertible preferred stock is recorded outside of stockholders’ equity because, in the event of certain deemed liquidation events considered not solely within the Company’s control, such as a merger or acquisition and sale of all or substantially all of the Company’s assets, the convertible preferred stock will become redeemable at the option of the holders. Revenue Recognition In May 2016, the Company licensed the exclusive worldwide rights to its product candidate clazakizumab to Vitaeris, Inc. (“Vitaeris”), a newly formed company based in Vancouver, British Columbia, Canada. In exchange for the rights to clazakizumab, the Company received an equity interest in Vitaeris and is eligible to receive royalties and certain other payments including revenue from the sale of drug supply inventory. The Company did no t record any revenue under this agreement in the three and six months ended June 30 , 2019 and 2018. In the future, the Company may generate revenue from product sales and may enter into agreements with strategic partners for the development and commercialization of the Company’s product candidates under which revenues may consist of license fees, non-refundable upfront fees, milestones, funding of research and development activities, sales of drug supply, or other revenue. The Company could receive both fixed and variable consideration. On January 1, 2018, the Company adopted ASC Topic 606 and related pronouncements regarding revenue recognition using the modified retrospective method. The adoption of this guidance did not have a material impact on the Company’s condensed consolidated financial statements. In determining the appropriate amount of revenue to be recognized as it fulfills its obligations under its agreements, the Company will perform the following steps: (i) identify the contract; (ii) identify the performance obligations; (iii) measure the transaction price, including the constraint on variable consideration; (iv) allocate the transaction price to the performance obligations based on estimated selling prices; and (v) recognize revenue when (or as) the Company satisfies each performance obligation. The identification of a contract to be accounted for under ASC Topic 606 requires both parties to approve the contract and are committed to delivering their respective performance obligations, be able to identify the goods or services to be transferred, identify the payment terms, and for the contract to be have commercial substance. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of accounting in ASC Topic 606. The Company’s performance obligations may include license rights and development services. Significant management judgment will be required to determine the level of effort required under an arrangement and the period over which the Company expects to complete its performance obligations under the arrangement. When the Company has substantive performance obligations under an arrangement accounted for as one unit of accounting, revenues will be recognized using a proportional performance-based approach. Under this approach, revenue recognition is based on costs incurred to date compared to total expected costs to be incurred over the performance period as this is considered to be representative of the delivery of service under the arrangement. Changes in estimates of total expected performance costs or service obligation time-period will be accounted for prospectively as a change in estimate. Revenues recognized at any point in time will be limited to the amount of noncontingent payments received or due. The Company will allocate the total transaction price to each performance obligation based on the estimated relative standalone selling prices, or SSP, at contract inception of the promised goods or service underlying each performance obligation. If SSP is not available, ASC Topic 606 allows the use of adjusted market assessment approach, expected cost-plus margin approach, or residual approval, among others, as long as the estimation results in an accurate representation of what the price would be charged in a separate transaction to a customer. The Company may consider the following key assumptions when estimating the SSP: the development timeline, revenue forecast, commercialization expenses, discount rate and probabilities of technical and regulatory success. Licenses of intellectual property: If the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company will recognize revenues from non-refundable, up-front fees allocated to the license when the license is transferred to the customer, and the customer can use and benefit from the license. For licenses that are bundled with other promises, the Company will utilize judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from non-refundable, up-front fees. The Company will evaluate the measure of progress each reporting period and, if necessary, adjust the measure of performance and related revenue recognition. Milestone payments: At the inception of each arrangement that includes milestone payments, the Company will evaluate whether the milestones are considered probable of being achieved and estimate the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the value of the associated milestone (such as a regulatory submission by the Company) will be included in the transaction price. Milestone payments that are not within the control of the Company, such as approvals from regulators, will not be considered probable of being achieved until those approvals are received. When the Company’s assessment of probability of achievement changes and variable consideration becomes probable, any additional estimated consideration will be allocated to each performance obligation based on the estimated relative standalone selling prices of the promised goods or service underlying each performance obligation and recorded in license, collaboration, and other revenues based upon when the customer obtains control of each element. Royalties: For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company will recognize revenue at the later of (a) when the related sales occur, or (b) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). Collaboration payments: The Company may also perform research and development activities on behalf of collaborative partners that are paid for by the collaborators. For research and development activities which are not determined to be separate units of accounting based on the criteria above, revenues for these research and development activities will be recognized using the single unit of accounting method for that collaborative arrangement. For research and development activities which are determined to be separate units of accounting, arrangement consideration will be allocated and revenues will be recognized as services are delivered, assuming the general criteria for revenue recognition noted above have been met. The corresponding research and development costs incurred under these contracts will be included in research and development expense in the consolidated statements of operations. For sales of drug supply inventory at cost, the revenue will be recognized upon transfer of the inventory. The Company expects to invoice its customers upon the completion of the effort, based on the terms of each agreement. Amounts earned, but not yet collected from the customers, if any, will be included in accounts receivable in the accompanying consolidated balance sheets. Deferred revenue will arise from payments received in advance of the culmination of the earnings process. Deferred revenue expected to be recognized within the next 12 months will be classified as a current liability. Deferred revenue will be recognized as revenue in future periods when the applicable revenue recognition criteria have been met. Lease Accounting In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU-2016-02, Leases. In July 2018, the FASB issued ASU 2018-10, Codification Improvements and ASU 2018-11, Targeted Improvements, to Topic 842 – Leases. In March 2019, the FASB issued ASU-2019-01, Codification Improvements. The Company adopted the standard on January 1, 2019 using the optional transition method. As such, the consolidated balance sheets and statements of operations for prior periods will not be comparable in the year of adoption of ASC 842. The Company did not elect the package of practical expedients permitted under the transition guidance within the standard. Accordingly, the Company reassessed the conclusion of whether the existing arrangements contain a lease, lease classification and initial direct costs under ASC 842. As a result of the reassessments performed, the Company has two real estate operating leases under ASC 842 described in Note 10. As a result of the adoption of ASC 842, the Company recorded $4.9 million of operating lease right of use (“ROU”) assets and a total of $5.5 million of lease liabilities on the consolidated balance sheets as of January 1, 2019. The Company determines if an arrangement is, or contains, a lease at inception. Operating leases are included in ROU assets, and operating lease liabilities on the consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities representing the Company’s obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments to be made over the lease term. The ROU asset also includes any lease payments made at or before the lease commencement date and excludes lease incentives received. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments. The Company uses the implicit rate when readily determinable. The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Operating lease expense is recognized on a straight-line basis over the lease term. The Company has elected to not to apply the recognition requirements of ASC 842 to short-term leases, which are defined as leases that, at the lease commencement date, have a lease term of 12 months or less and do not include an option to purchase the underlying asset that the Company is reasonably certain to exercise. For real estate lease agreements entered into or modified after the adoption of ASC 842 that include lease and non-lease components, the Company has elected to account for the lease and non-lease components, such as common area maintenance charges, as a single lease component. Stock Compensation In June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation (Topic 718) – Improvements to Nonemployee Share-Based Payment Accounting. The amendment substantially aligns accounting for share-based payments to employees and non-employees by expanding the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. Consistent with the accounting requirement for employee share-based payment awards, nonemployee share-based payment awards will be measured at grant-date fair value. On January 1, 2019, the Company adopted this ASU which did not have a material effect on the Company’s condensed consolidated financial statements and related disclosures. Long-Term Incentive Plan In January 2018, the Company established a long-term incentive plan (“LTIP”) which provides eligible employees with the opportunity to receive performance-based compensation comprised of restricted stock units. The vesting of the restricted stock units is contingent upon the achievement of pre-determined regulatory milestones. The Company records compensation expense over the estimated service period for a milestone when the achievement of the milestone is considered probable, which is assessed at each reporting date. Once a milestone is considered probable, the Company records compensation expense based on the portion of the service period elapsed to date with respect to that milestone, with a cumulative catch-up, net of estimated forfeitures, and recognizes remaining compensation expense, if any, over the remaining estimated service period. Compensation expense of $3.1 million has been recorded to date under the LTIP as certain conditions for recognizing expense have been met. As of June 30, 2019, the estimated potential value to be delivered in restricted stock units to participants eligible for the LTIP was approximately $5.9 million. The total potential value to be delivered under the LTIP is expected to change in the future. 2018 Inducement Award Plan On June 11, 2018, the Company established the 2018 Inducement Award Plan (“Inducement Plan”). The Inducement Plan allows for the grant of options, restricted stock, restricted stock unit awards, and performance unit awards to new employees of the Company by granting an award to such new employee as an inducement to begin employment with the Company. On June 20, 2019, the Company’s Compensation Committee approved an increase of 1,000,000 shares for a total of 4,000,000 shares of its common stock reserved for issuance under the Inducement Plan. As of June 30, 2019, there were 1,655,000 shares available for issuance under the Inducement Plan. Liquidity and Going Concern The Company has an accumulated deficit as of June 30, 2019. To date, the Company has funded its operations primarily through sales and issuances of its capital stock, Convertible Notes and payments from its former collaboration partners, and will require substantial additional capital for research and product development. In January 2019, the Company entered into an equity distribution agreement to commence an “at the market” offering program, , under which the Company is permitted to offer and sell, from time to time, shares of common stock having a maximum aggregate offering price of up to $100 million. The ATM program will remain in full force and effect until the ATM program is terminated. The Company has not raised any funds through the ATM program. The Company estimates the available cash, cash equivalents, investments and restricted cash as of June 30, 2019 will be sufficient to meet the Company’s projected operating requirements through the anticipated launch of eptinezumab and into the latter part of 2020. These operating requirements consist principally of expenditures related to the establishment of the eptinezumab commercial drug supply chain, continued build-out of the Company’s commercial organization (e.g., marketing, sales, medical affairs, payor access, information technology) and pre-launch market readiness activities. The Company has based its estimate of the timing for its projected expenditures on assumptions that may prove to be wrong, and it could utilize its available capital resources sooner than it currently expects. Furthermore, the Company’s operating plans may change, and it may need additional funds to meet operational needs and capital requirements sooner than planned. The Company will need additional funding to execute and sustain the commercial launch of eptinezumab. The Company will also need to obtain substantial additional sources of funding to develop and commercialize ALD1910 and its other product candidates. The Company expects to finance future cash needs through equity financings, debt financings, collaborations, strategic alliances, licensing arrangements and other marketing and distribution arrangements, but there are no assurances that the Company will be able to raise sufficient amounts of funding in the future on acceptable terms, or at all. If such additional funding is not available on favorable terms or at all, the Company may need to delay or reduce the scope of its development programs or commercialization activities, or grant rights in the United States, as well as outside the United States, to its product candidates to one or more partners. 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 June 2016, the FASB issued ASU 2016-13, Financial Instruments: Credit Losses, as clarified in April 2019 with ASU 2019-04 and in June 2019 with ASU 2019-05. This amendment requires an entity to measure and recognize all expected credit losses for financial assets held and disclose significant estimates and judgments used in estimating those credit losses at the reporting date. This ASU will become effective for annual periods beginning after December 15, 2019, with early adoption permitted. The Company is currently evaluating the effect of this new guidance on its consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) – Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement. The amendment is intended to improve the effectiveness of disclosures in the notes to financial statements related to fair value measurements in Topic 820. This ASU will become effective for annual periods beginning after December 15, 2019, including interim periods within that period, and early adoption is permitted. The Company is currently evaluating the effect of this new guidance on its consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40) – Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. This amendment aligns the accounting for implementation costs incurred in a hosting arrangement that is a service contract with the guidance on capitalizing costs associated with developing or obtaining internal-use software. This ASU will become effective for annual periods beginning after December 15, 2019, including interim periods within that period, and early adoption is permitted. The Company does not expect this ASU to have a material effect on its consolidated financial statements. 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 condensed consolidated financial statements as a result of future adoption. |
Net Loss Per Share Applicable t
Net Loss Per Share Applicable to Common Stockholders | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share Applicable to Common Stockholders | 3. Net Loss Per Share Applicable to Common Stockholders Basic net loss per share applicable to common stockholders is calculated by dividing net loss applicable to common stockholders 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 Six Months Ended June 30, June 30, 2019 2018 2019 2018 Net loss applicable to common stockholders (in thousands) $ (59,891 ) $ (70,691 ) $ (179,136 ) $ (188,265 ) Denominator Weighted average common shares outstanding - basic and diluted 83,479,867 67,966,066 78,297,180 67,905,804 Net loss per share applicable to common stockholders - basic and diluted $ (0.72 ) $ (1.04 ) $ (2.29 ) $ (2.77 ) The following weighted average numbers of securities were excluded from the calculation of diluted net loss per share for the three and six months ended June 30, 2019 and 2018 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 Six Months Ended June 30, June 30, 2019 2018 2019 2018 Common shares underlying 2025 convertible senior notes 14,197,526 14,197,531 14,197,526 11,643,135 Common shares underlying convertible preferred stock 7,630,525 7,254,541 7,619,091 6,812,845 Stock options, stock awards and shares under employee stock purchase plan 14,074,135 10,210,026 13,407,239 9,591,644 35,902,186 31,662,098 35,223,856 28,047,624 |
Investments
Investments | 6 Months Ended |
Jun. 30, 2019 | |
Investments [Abstract] | |
Investments | 4. Investments 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 June 30, 2019 U.S. government agency obligations maturing in one year or less $ 320,980 $ 30 $ (77 ) $ 320,933 Type of security as of December 31, 2018 U.S. government agency obligations maturing in one year or less $ 320,558 $ — $ (1,054 ) $ 319,504 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. The Company had no realized gains or losses on sales of available-for-sale securities in the three and six months ended June 30, 2019. During the three and six months ended June 30, 2018, the Company recorded $0.3 million in realized losses related to available-for-sale securities included in the Company’s condensed consolidated statement of operations. See Note 6 for additional information about fair value disclosures. |
Investment In Unconsolidated En
Investment In Unconsolidated Entity and Derivative Liability | 6 Months Ended |
Jun. 30, 2019 | |
Investment In Unconsolidated Entity And Derivative Liability [Abstract] | |
Investment In Unconsolidated Entity and Derivative Liability | 5. Investment in Unconsolidated Entity and Derivative Liability In May 2016, the Company licensed the exclusive worldwide rights to its product candidate clazakizumab to Vitaeris. 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. Since clazakizumab was developed internally by the Company, all previous expenditures to develop the compound were recognized as expense in the period incurred and there was no carrying value on the Company’s condensed consolidated balance sheet. In 2016, the Company recognized a gain on the license agreement of $1.1 million, which was determined as the initial fair value of the Company’s equity stake in Vitaeris. 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 $0.2 million in net loss with respect to Vitaeris in 2018, which was the remaining balance of the carrying value of the Company’s investment in Vitaeris. 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. In November 2017, the Company and Vitaeris amended the license agreement for clazakizumab and Vitaeris and its shareholders, including the Company, entered into a strategic collaboration and purchase option agreement (the “option agreement”) with a third party, CSL Limited (“CSL”), an Australian entity, to expedite the development of clazakizumab as a therapeutic option for solid organ transplant rejection. Pursuant to the option agreement, CSL will provide research funding to Vitaeris for the development of clazakizumab and CSL received an exclusive option to acquire Vitaeris, subject to certain terms and conditions. Upon the execution of the option agreement, Vitaeris received an upfront payment of $15 million and Vitaeris will also receive future development milestone payments. If CSL exercises its purchase option, it will be required to make to Vitaeris’ shareholders, including the Company, an immediate one-time payment and thereafter certain sales-based milestone payments. The Company will continue to be eligible to receive royalties and certain other payments following an acquisition of Vitaeris by CSL. The purchase option created a written call on the Company’s shares in Vitaeris, which was determined to have a fair value of $1.7 million as of December 31, 2018 and is considered a derivative under GAAP (see Note 6). As of June 30, 2019, the fair value of the purchase option was $2.8 million. The Company recorded expense of $0.2 million and $1.1 million on its consolidated statement of operations for the three and six months ended June 30, 2019, respectively, and $1.5 million for the three and six months ended June 30, 2018 to recognize the increase in the fair value of the derivative liability. The Company will assess the fair value of the derivative at each reporting period. |
Fair Value Disclosures
Fair Value Disclosures | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosures | 6 . 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 June 30, 2019 Assets Cash equivalents Money market funds $ 83,494 $ — $ — $ 83,494 Short-term investments U.S. government agency obligations — 320,933 — 320,933 Restricted cash Time deposits 31,341 — — 31,341 $ 114,835 $ 320,933 $ — $ 435,768 Liabilities 2025 convertible senior notes — 268,511 — 268,511 Derivative liability — — 2,803 2,803 $ — $ 268,511 $ 2,803 $ 271,314 As of December 31, 2018 Assets Cash equivalents Money market funds $ 85,323 $ — $ — $ 85,323 Short-term investments U.S. government agency obligations — 319,504 — 319,504 Restricted cash Money market funds 5,000 — — 5,000 $ 90,323 $ 319,504 $ — $ 409,827 Liabilities 2025 convertible senior notes — 230,538 — 230,538 Derivative liability — — 1,658 1,658 $ — $ 230,538 $ 1,658 $ 232,196 The Company’s 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. Accounts payable and accrued liabilities are carried at cost, which approximates fair value due to the short-term nature of these financial instruments. Fair Value of Convertible Notes The fair value of the Convertible Notes is determined based upon data from readily available pricing sources which utilize market observable inputs and other characteristics for similar types of instruments and is included in Level 2 of the fair value hierarchy. See Note 8 for information about the determination of the carrying value of the Convertible Notes at June 30, 2019. Fair Value of Derivative Liability The fair value of the derivative liability related to the purchase option under which CSL could acquire the Company’s interest in Vitaeris (see Note 5) was $2.8 million as of June 30, 2019. In accordance with ASC 815, Derivatives and Hedging, the fair value of a derivative is required to be recorded on the balance sheet with any changes in fair value recorded in earnings. The determination of the fair value requires judgment based on significant inputs not observable in the market which represents a Level 3 measurement within the fair value hierarchy. If factors change and different assumptions are used, the fair value of the derivative liability and related gains or losses could be materially different in the future. |
Accrued Liabilities
Accrued Liabilities | 6 Months Ended |
Jun. 30, 2019 | |
Payables And Accruals [Abstract] | |
Accrued Liabilities | 7. Accrued Liabilities Accrued liabilities consisted of the following for the dates indicated: June 30, December 31, 2019 2018 (in thousands) Loss contingency - contract manufacturing (Note 12) $ 26,000 $ — Compensation and benefits 7,582 9,260 Contracted research and development 955 5,655 Professional services and other 4,294 1,307 Interest on 2025 convertible senior notes 2,995 2,995 $ 41,826 $ 19,217 |
2025 Convertible Senior Notes,
2025 Convertible Senior Notes, Net | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
2025 Convertible Senior Notes, Net | 8. 2025 Convertible Senior Notes, Net On February 1, 2018, the Company issued $250.0 million aggregate principal amount of Convertible Notes in a registered underwritten public offering. In addition, on February 13, 2018, the Company issued an additional $37.5 million principal amount of Convertible Notes pursuant to the exercise of an over-allotment option granted to the underwriters in the offering. The Convertible Notes are senior unsecured obligations of the Company and bear interest at a rate of 2.5% per annum, payable semi-annually in arrears on February 1 and August 1 of each year, commencing on August 1, 2018. Upon conversion, the Convertible Notes will be convertible into cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s election. The Convertible Notes will be subject to redemption at the Company’s option, on or after February 1, 2022, in whole or in part, if the conditions described below are satisfied. The Convertible Notes will mature on February 1, 2025, unless earlier converted, redeemed or repurchased in accordance with their terms. Subject to satisfaction of certain conditions and during the periods described below, the Convertible Notes may be converted at an initial conversion rate of 49.3827 shares of common stock per $1,000 principal amount of the Convertible Notes (equivalent to an initial conversion price of approximately $20.25 per share of common stock). The conversion rate will be subject to adjustment in some events but will not be adjusted for any accrued and unpaid interest. In addition, if certain corporate events occur prior to the maturity date, the Company will increase the conversion rate for a holder of Convertible Notes who elects to convert its Convertible Notes in connection with such a corporate event in certain circumstances. Holders of the Convertible Notes may convert all or any portion of their notes, in multiples of $1,000 principal amount, at their option at any time prior to the close of business on the business day immediately preceding November 1, 2024 only under the following circumstances: 1. during any calendar quarter commencing after the calendar quarter ending on March 31, 2018 (and only during such calendar quarter), if the last reported sale price of the Company's common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; 2. during the five business day period after any five consecutive trading day period (the “measurement period”) in which the “trading price” per $1,000 principal amount of the Convertible Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day; 3. if the Company calls any or all of the Convertible Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; or 4. upon the occurrence of specified corporate events. On or after November 1, 2024 and prior to the close of business on the business day immediately preceding February 1, 2025, holders may convert their Convertible Notes at any time. Prior to February 1, 2022, the Company may not redeem the Convertible Notes. On or after February 1, 2022, the Company may redeem any or all of the Convertible Notes at a redemption price equal to 100% of the principal amount of the Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date, if the last reported sale price of the Common Stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on the trading day immediately prior to the date of the redemption notice exceeds 130% of the applicable conversion price for the Convertible Notes on each applicable trading day. If a “make-whole fundamental change” (as defined in the indenture) occurs prior to February 1, 2025, the Company will, in certain circumstances, increase the conversion rate for a holder who elects to convert its Convertible Notes in connection with the make-whole fundamental change . The Convertible Notes do not contain any financial or operating covenants or any restrictions on the payment of dividends, the issuance of other indebtedness or the issuance or repurchase of securities by the Company. The Convertible Notes indenture contains customary events of default, including that upon certain events of default, 100% of the principal and accrued and unpaid interest on the Convertible Notes will automatically become due and payable. In accordance with accounting guidance for debt with conversion and other options, the Company separately accounted for the embedded conversion feature of the Convertible Notes by allocating the proceeds between the liability component and the Equity Component, due to the Company’s ability to settle the Convertible Notes in cash, common stock or a combination of cash and common stock, at its option. The initial amount of the liability component of $177.6 million was calculated by measuring the fair value of a similar liability that does not have an associated convertible feature and the residual between the proceeds from the issuance of $287.5 million and the fair value of the liability of $177.6 million is allocated to the Equity Component, which was recorded at $109.9 million and recognized as a debt discount. In addition, the Company incurred approximately $9.8 million of debt issuance costs, which primarily consisted of underwriting, legal and other professional fees. The issuance costs were allocated to the liability component and Equity Component proportionally based on the allocation of total proceeds. A total of $3.7 million was allocated to the Equity Component and recorded as a reduction to additional paid-in capital and $6.1 million was allocated to the liability component and is recorded as a reduction of the Convertible Notes in the Company’s condensed consolidated balance sheet. The debt discount and the issuance costs will be amortized to interest expense using the effective interest method over seven years, the expected life of the Convertible Notes as discussed below. The Equity Component is not remeasured as long as it continues to meet the conditions for equity classification. During the three months ended June 30, 2019 and 2018, the Company recorded $3.2 million and $2.9 million, respectively, of interest expense related to the amortization of the debt discount and issuance costs. During the six months ended June 30, 2019 and 2018, the Company recorded $6.2 million and $4.5 million, respectively, of interest expense related to the amortization of debt discount and issuance costs. While the Convertible Notes are classified on the Company’s condensed consolidated balance sheet at June 30, 2019 as long-term, the resulting balance sheet classification of this liability will be monitored at each quarterly reporting date and will be analyzed dependent upon whether the Convertible Notes are convertible or subject to an event triggering potential redemption during the prescribed measurement periods. In the event that the holders of the Convertible Notes have the election to convert the Convertible Notes or the Convertible Notes become redeemable at any time during the prescribed measurement period, the Convertible Notes would then be considered a current obligation and classified as such. While for GAAP purposes, the Convertible Notes are allocated between the liability component and the Equity Component, for U.S. tax purposes there is no allocation, and a deferred tax liability is recognized related to such difference. Because the Company has a full valuation allowance recorded against net deferred tax assets, there is no net impact on the Company’s condensed consolidated balance sheets or condensed consolidated statements of operations as a result of establishing this deferred tax liability. The outstanding balances of the Convertible Notes as of June 30, 2019 consisted of the following: 2025 Convertible Senior Notes (in thousands) Liability component: Principal $ 287,500 Less: unamortized debt discount and issuance costs (99,177 ) Net carrying amount of Liability Component $ 188,323 Net carrying amount of Equity Component $ 106,148 The Company determined the expected life of the Convertible Notes was equal to its seven-year term and the effective interest rate on the liability component was 10.6%. As of June 30, 2019, the “if-converted value” did not exceed the remaining principal amount of the Convertible Notes. The fair value of the Convertible Notes is based on data from readily available pricing sources which utilize market observable inputs and other characteristics for similar types of instruments, and, therefore, these Convertible Notes are classified within Level 2 in the fair value hierarchy. The fair value of the Convertible Notes, which differs from their carrying value, is influenced by interest rates, the Company’s stock price and stock price volatility. The estimated fair value of the Convertible Notes as of June 30, 2019 was approximately $268.5 million. The following table sets forth total interest expense recognized related to the Convertible Notes during the three and six months ended June 30, 2019 and 2018: Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 (in thousands) (in thousands) Contractual interest expense $ 1,798 $ 1,833 $ 3,594 $ 2,995 Amortization of debt discount and issuance costs 3,177 2,855 6,219 4,544 Total interest expense $ 4,975 $ 4,688 $ 9,813 $ 7,539 Future minimum payments including interest on the Company’s long-term debt as of June 30, 2019 were as follows: Years ended December 31, Future Minimum Payments (in thousands) 2019 $ 3,594 2020 7,188 2021 7,188 2022 7,188 2023 7,188 2024 and thereafter 298,279 Total minimum payments 330,625 Less: interest (43,125 ) Less: unamortized discount and issuance costs (99,177 ) Less: current portion — 2025 convertible senior notes, net $ 188,323 |
Convertible Preferred Stock
Convertible Preferred Stock | 6 Months Ended |
Jun. 30, 2019 | |
Temporary Equity Disclosure [Abstract] | |
Convertible Preferred Stock | 9. Convertible Preferred Stock On January 7, 2018, the Company entered into a Preferred Stock Purchase Agreement (the “Purchase Agreement”) with certain institutional and other accredited investors affiliated with or managed by Redmile Group, LLC (the “Buyers”). Under the terms of the Purchase Agreement, on January 12, 2018, the Company sold to the Buyers in a private placement 725,268 shares of Series A-1 convertible preferred stock at $137.88 per share for net proceeds of approximately $97.7 million, after deducting fees and applicable expenses of $2.3 million. The Buyers hold more than 5% of the Company’s capital stock and therefore are considered a related party of the Company. The Purchase Agreement also provided the Company with an option to sell up to $150 million of convertible preferred stock in aggregate beginning after the 90-day period following the date of the initial purchase of the convertible preferred stock. This option was classified as an asset and was determined to have immaterial fair value at inception and subsequently. The Company’s right to sell The terms and conditions of the convertible preferred stock are governed by the Certificate of Designation of Preferences, Rights and Limitations (the “Certificate of Designation”). Liquidation Preference In the event of any liquidation, dissolution, or winding up of the Company, whether voluntary or involuntary, occurs within 24 months of the date of the Purchase Agreement, after satisfaction of all liabilities and obligations to creditors of the Company and before any distribution to holders of the Company’s common stock, the holders of each share of convertible preferred stock shall be entitled to receive the amount of $137.88 per share, plus all accrued but unpaid dividends. If, upon the occurrence of such event, the proceeds distributed among the holders of the convertible preferred stock are insufficient to make payment in full to all holders, then the entire proceeds legally available for distribution to the holders of the convertible preferred stock shall be distributed ratably in proportion to the full amounts to which the holders would otherwise be respectively entitled. A liquidation shall be deemed to include the occurrence of either (i) the Company merges into or consolidates with any other entity, or any entity merges into or consolidates with the Company and, after giving effect to such transaction, the stockholders of the Company immediately prior to such transaction own less than 50% of the aggregate voting power of the Company or the successor entity of such transaction or (ii) the Company sells, leases, licenses or transfers all or substantially all of its assets to another person or entity and the stockholders of the Company immediately prior to such transaction own less than 50% of the aggregate voting power of the acquiring entity immediately after the transaction (each a “Deemed Liquidation”). Dividends The holders of the convertible preferred stock are entitled to receive cumulative dividends at a rate of 5% per annum payable semi-annually in arrears on June 30 and December 31 of each year. In the three months and six months ended June 30, 2019, the Company accrued an aggregate of $1.5 million and $2.8 million, respectively, in dividends on convertible preferred stock, or $1.90 and $3.58 per weighted average share of convertible preferred stock. The dividends are payable in additional shares of convertible preferred stock and/or cash at the Company’s option. In the three and six months ended June 30, 2018, the Company accrued an aggregate of $2.3 million and $3.4 million, respectively, in dividends on convertible preferred stock or $3.17 and $4.67 per weighted average share of convertible preferred stock. Conversion Each share of convertible preferred stock is convertible, at any time and from time to time and after the issuance date, at the holders’ option, into shares of common stock in a one-for-ten basis. Voting Rights Except specifically required by the Certificate of Designation or by the provisions of the Delaware General Corporation Law, the holders of the convertible preferred stock have no voting rights. Warrants In the event of a Deemed Liquidation that occurs within 24 months of the date of the Purchase Agreement, the Company will issue to the Buyers a warrant to purchase an aggregate of 75,000 shares of convertible preferred stock at a purchase price per share equal to the initial purchase price of $137.88. The number of shares and exercise price are each subject to adjustment for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction. Pursuant to applicable accounting standards, the warrant was considered a freestanding financial instrument, which is a financial liability and requires initial and subsequent measurements at fair value. The warrant was determined to have immaterial fair value initially and subsequently at June 30, 2019. In accordance with ASC 480-10-S99, the convertible preferred stock has been recorded as temporary equity on the Company’s condensed consolidated balance sheet because the convertible preferred stock is redeemable for cash or other assets of the Company upon Deemed Liquidation events that are not within the control of the Company. The net carrying amount of the convertible preferred stock is not currently accreted to a redemption value because the preferred stock is not currently redeemable or probable of becoming redeemable in the future. In accordance with ASC 470-20, the Company recognized a beneficial conversion feature representing a conversion right with an effective conversion price less than the market price of the underlying stock at the commitment date of January 12, 2018. The beneficial conversion feature of $29.5 million was recognized by allocating the intrinsic value of the conversion option, which is the number of shares of common stock available upon conversion multiplied by the difference between the effective conversion price per share and the fair value of common stock per share on the commitment date, to additional paid-in capital. On the last trading day prior to the entering into the Purchase Agreement, the closing price of the Company’s common stock was $12.95 per share. The transaction closed on January 12, 2018, at which time last closing price of the Company’s common stock was $17.85 per share, which is the value used in calculating the intrinsic value of the beneficial conversion feature. Since the convertible preferred stock is currently convertible at holder’s option, the Company immediately accreted the full amount of discount created by allocation of proceeds to the beneficial conversion feature and recognized as a deemed dividend to the convertible preferred stockholders. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Leases | 10. Leases Under two real estate operating lease agreements, the Company leases office space in three adjacent buildings in Bothell, Washington, for its research and development and administrative activities under leases that will expire on July 31, 2023. The leases include an option to extend the lease for an additional three years. None of these optional periods have been included in the determination of the lease term as the Company is not reasonably certain that it would exercise any such options. The lease agreements include escalating rental payments and common area maintenance charges. The lease agreements do not contain any material residual value guarantees or material restrictive covenants. Upon adoption of the new lease standard, discount rates used for existing leases were established at January 1, 2019. Supplemental balance sheet information related to leases was as follows: June 30, 2019 (in thousands) Assets Long-term Right of use assets $ 4,480 Liabilities Current operating lease liabilities $ 981 Long-term operating lease liabilities 4,061 Total operating lease liabilities $ 5,042 June 30, 2019 Weighted-average remaining lease term (years) 4.1 Weighted-average discount rate 10.3 % For the three months ended June 30, 2019, the Company recorded $0.3 million of operating lease cost, $0.2 million of variable lease cost, and $22,000 of short-term lease cost. For the six months ended June 30, 2019, the Company recorded $0.7 million of operating lease cost, $0.3 million of variable lease cost and $43,000 of short-term lease cost. The lease expense for the three months and six months ended June 30, 2018 was $0.5 and $1.0 million, respectively. Cash paid for amounts included in the measurement of lease liabilities for the three and six months ended June 30, 2019 was $0.2 and $0.4 million, respectively. The table below reconciles the undiscounted cash flows to the operating lease liabilities recorded on the consolidated balance sheet as of June 30, 2019. Years ended December 31, (in thousands) 2019 (excluding the six months ended June 30, 2019) $ 720 2020 1,477 2021 1,521 2022 1,568 2023 938 Total minimum payments 6,224 Less: amount of lease payments representing interest (1,182 ) Present value of future lease payments 5,042 Less: current lease liabilities (981 ) Noncurrent lease liabilities $ 4,061 Future aggregate minimum payments under noncancelable operating leases are as follows: Years ended December 31, (in thousands) 2019 (six months ending December 31, 2019) $ 720 2020 1,477 2021 1,521 2022 1,568 2023 938 Total minimum lease payments $ 6,224 |
Teva License Agreement
Teva License Agreement | 6 Months Ended |
Jun. 30, 2019 | |
License Agreement [Abstract] | |
Teva License Agreement | 1 1 . Teva License Agreement On January 5, 2018, the Company entered into a Settlement and License Agreement with Teva Pharmaceuticals International GmbH (“Teva GmbH”). Under the terms of the Settlement and License Agreement, the Company received a non-exclusive license to Teva’s calcitonin gene-related peptide (“CGRP”) patent portfolio for the development, manufacturing and commercialization of eptinezumab in the U.S. and worldwide, excluding Japan and Korea. While the agreement does not provide the Company with a license for Japan and Korea, the Company believes it has freedom to develop, manufacture and commercialize eptinezumab in these countries. Upon the execution of the agreement, the Company made an immediate one-time, non-refundable payment of $25 million, which was included in research and development expense in the Company’s condensed consolidated statement of operations. In addition, a second one-time, non-refundable payment of $25 million is payable upon the approval of a Biologics License Application (“BLA”) for eptinezumab with the U.S. Food and Drug Administration (“FDA”) or of an earlier equivalent filing with a regulatory authority elsewhere in the license territory in which Teva GmbH licensed patents exist. The Company is also obligated to pay $75 million at each of two sales-related milestones (at $1 billion and $2 billion in annual sales) and to provide certain royalty payments on net sales at rates from 5% to 7% following the commercial launch of eptinezumab. |
Loss Contingency
Loss Contingency | 6 Months Ended |
Jun. 30, 2019 | |
Loss Contingency [Abstract] | |
Loss Contingency | 12. Loss Contingency In February 2019, the Company terminated for breach a contract manufacturing agreement for the delivery of future services. The vendor has disputed the termination and in April 2019 filed for arbitration. Accounting Standards Codification 450 (Contingencies) requires the Company to evaluate both the probability of a loss and whether an amount of loss can be reasonably estimated. In May 2019, the Company filed an answer, affirmative defenses and counterclaims arising from the vendor’s breach of the agreement and in June 2019, the vendor filed its answer and affirmative defenses to the Company’s counterclaims. While the Company believes it is not obligated to make any payments for future services under the agreement, including any portion of the amount accrued, the ultimate resolution of the matter could result in a loss of up to $26 million in excess of the amount accrued. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
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, Alder BioPharmaceuticals Pty. Ltd., AlderBio Holdings LLC, and Alder BioPharmaceuticals Limited. All inter-company balances and transactions have been eliminated in consolidation. The condensed consolidated balance sheet data as of December 31, 2018 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, 2018. |
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 and six months ended June 30, 2019 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, investments and restricted cash in excess of amounts insured by the Federal Deposit Insurance Corporation and Securities Investor Protection Corporation. |
Restricted Cash | Restricted Cash The Company had restricted cash of $31.3 million as of June 30, 2019, classified as current assets. The funds are restricted pursuant to contractual agreements with third-party manufacturers for payments to be made under those agreements in 2019, or for security under standby letter of credit agreements which expire in 12 months or less. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets to the total of cash, cash equivalents and restricted cash shown in the condensed consolidated statement of cash flows. June 30, December 31, 2019 2018 (in thousands) Cash and cash equivalents $ 88,378 $ 87,865 Restricted cash 31,341 5,000 Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows $ 119,719 $ 92,865 |
Convertible Senior Notes, Net | Convertible Senior Notes, Net In accordance with accounting guidance for debt with conversion and other options, the Company separately accounted for the liability and equity components of the 2.5% Convertible Senior Notes due 2025 (the “Convertible Notes”) by allocating the proceeds between the liability component and the embedded conversion option (the “Equity Component”) due to the Company’s ability to settle the Convertible Notes in cash, common stock or a combination of cash and common stock, at its option. The carrying amount of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated convertible feature. The allocation was performed in a manner that reflected the Company’s non-convertible debt borrowing rate for similar debt. The Equity Component of the Convertible Notes was recognized as a debt discount and represents the difference between the proceeds from the issuance of the Convertible Notes and the fair value of the liability of the Convertible Notes on their respective dates of issuance. The excess of the principal amount of the liability component over its carrying amount is amortized to interest expense using the effective interest method over seven years. The Equity Component is not remeasured as long as it continues to meet the conditions for equity classification. In connection with the issuance of the Convertible Notes, the Company also incurred certain offering costs directly attributable to the offering. Such costs are deferred and amortized to interest expense over the term of the debt using the effective interest method. A portion of the deferred financing costs incurred in connection with the Convertible Notes was deemed to relate to the Equity Component and was allocated to additional paid-in capital. |
Convertible Preferred Stock | Convertible Preferred Stock The Company recorded the convertible preferred stock at fair value on the date of issuance, net of issuance costs. The convertible preferred stock is recorded outside of stockholders’ equity because, in the event of certain deemed liquidation events considered not solely within the Company’s control, such as a merger or acquisition and sale of all or substantially all of the Company’s assets, the convertible preferred stock will become redeemable at the option of the holders. |
Revenue Recognition | Revenue Recognition In May 2016, the Company licensed the exclusive worldwide rights to its product candidate clazakizumab to Vitaeris, Inc. (“Vitaeris”), a newly formed company based in Vancouver, British Columbia, Canada. In exchange for the rights to clazakizumab, the Company received an equity interest in Vitaeris and is eligible to receive royalties and certain other payments including revenue from the sale of drug supply inventory. The Company did no t record any revenue under this agreement in the three and six months ended June 30 , 2019 and 2018. In the future, the Company may generate revenue from product sales and may enter into agreements with strategic partners for the development and commercialization of the Company’s product candidates under which revenues may consist of license fees, non-refundable upfront fees, milestones, funding of research and development activities, sales of drug supply, or other revenue. The Company could receive both fixed and variable consideration. On January 1, 2018, the Company adopted ASC Topic 606 and related pronouncements regarding revenue recognition using the modified retrospective method. The adoption of this guidance did not have a material impact on the Company’s condensed consolidated financial statements. In determining the appropriate amount of revenue to be recognized as it fulfills its obligations under its agreements, the Company will perform the following steps: (i) identify the contract; (ii) identify the performance obligations; (iii) measure the transaction price, including the constraint on variable consideration; (iv) allocate the transaction price to the performance obligations based on estimated selling prices; and (v) recognize revenue when (or as) the Company satisfies each performance obligation. The identification of a contract to be accounted for under ASC Topic 606 requires both parties to approve the contract and are committed to delivering their respective performance obligations, be able to identify the goods or services to be transferred, identify the payment terms, and for the contract to be have commercial substance. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of accounting in ASC Topic 606. The Company’s performance obligations may include license rights and development services. Significant management judgment will be required to determine the level of effort required under an arrangement and the period over which the Company expects to complete its performance obligations under the arrangement. When the Company has substantive performance obligations under an arrangement accounted for as one unit of accounting, revenues will be recognized using a proportional performance-based approach. Under this approach, revenue recognition is based on costs incurred to date compared to total expected costs to be incurred over the performance period as this is considered to be representative of the delivery of service under the arrangement. Changes in estimates of total expected performance costs or service obligation time-period will be accounted for prospectively as a change in estimate. Revenues recognized at any point in time will be limited to the amount of noncontingent payments received or due. The Company will allocate the total transaction price to each performance obligation based on the estimated relative standalone selling prices, or SSP, at contract inception of the promised goods or service underlying each performance obligation. If SSP is not available, ASC Topic 606 allows the use of adjusted market assessment approach, expected cost-plus margin approach, or residual approval, among others, as long as the estimation results in an accurate representation of what the price would be charged in a separate transaction to a customer. The Company may consider the following key assumptions when estimating the SSP: the development timeline, revenue forecast, commercialization expenses, discount rate and probabilities of technical and regulatory success. Licenses of intellectual property: If the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company will recognize revenues from non-refundable, up-front fees allocated to the license when the license is transferred to the customer, and the customer can use and benefit from the license. For licenses that are bundled with other promises, the Company will utilize judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from non-refundable, up-front fees. The Company will evaluate the measure of progress each reporting period and, if necessary, adjust the measure of performance and related revenue recognition. Milestone payments: At the inception of each arrangement that includes milestone payments, the Company will evaluate whether the milestones are considered probable of being achieved and estimate the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the value of the associated milestone (such as a regulatory submission by the Company) will be included in the transaction price. Milestone payments that are not within the control of the Company, such as approvals from regulators, will not be considered probable of being achieved until those approvals are received. When the Company’s assessment of probability of achievement changes and variable consideration becomes probable, any additional estimated consideration will be allocated to each performance obligation based on the estimated relative standalone selling prices of the promised goods or service underlying each performance obligation and recorded in license, collaboration, and other revenues based upon when the customer obtains control of each element. Royalties: For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company will recognize revenue at the later of (a) when the related sales occur, or (b) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). Collaboration payments: The Company may also perform research and development activities on behalf of collaborative partners that are paid for by the collaborators. For research and development activities which are not determined to be separate units of accounting based on the criteria above, revenues for these research and development activities will be recognized using the single unit of accounting method for that collaborative arrangement. For research and development activities which are determined to be separate units of accounting, arrangement consideration will be allocated and revenues will be recognized as services are delivered, assuming the general criteria for revenue recognition noted above have been met. The corresponding research and development costs incurred under these contracts will be included in research and development expense in the consolidated statements of operations. For sales of drug supply inventory at cost, the revenue will be recognized upon transfer of the inventory. The Company expects to invoice its customers upon the completion of the effort, based on the terms of each agreement. Amounts earned, but not yet collected from the customers, if any, will be included in accounts receivable in the accompanying consolidated balance sheets. Deferred revenue will arise from payments received in advance of the culmination of the earnings process. Deferred revenue expected to be recognized within the next 12 months will be classified as a current liability. Deferred revenue will be recognized as revenue in future periods when the applicable revenue recognition criteria have been met. |
Lease Accounting | Lease Accounting In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU-2016-02, Leases. In July 2018, the FASB issued ASU 2018-10, Codification Improvements and ASU 2018-11, Targeted Improvements, to Topic 842 – Leases. In March 2019, the FASB issued ASU-2019-01, Codification Improvements. The Company adopted the standard on January 1, 2019 using the optional transition method. As such, the consolidated balance sheets and statements of operations for prior periods will not be comparable in the year of adoption of ASC 842. The Company did not elect the package of practical expedients permitted under the transition guidance within the standard. Accordingly, the Company reassessed the conclusion of whether the existing arrangements contain a lease, lease classification and initial direct costs under ASC 842. As a result of the reassessments performed, the Company has two real estate operating leases under ASC 842 described in Note 10. As a result of the adoption of ASC 842, the Company recorded $4.9 million of operating lease right of use (“ROU”) assets and a total of $5.5 million of lease liabilities on the consolidated balance sheets as of January 1, 2019. The Company determines if an arrangement is, or contains, a lease at inception. Operating leases are included in ROU assets, and operating lease liabilities on the consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities representing the Company’s obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments to be made over the lease term. The ROU asset also includes any lease payments made at or before the lease commencement date and excludes lease incentives received. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments. The Company uses the implicit rate when readily determinable. The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Operating lease expense is recognized on a straight-line basis over the lease term. The Company has elected to not to apply the recognition requirements of ASC 842 to short-term leases, which are defined as leases that, at the lease commencement date, have a lease term of 12 months or less and do not include an option to purchase the underlying asset that the Company is reasonably certain to exercise. For real estate lease agreements entered into or modified after the adoption of ASC 842 that include lease and non-lease components, the Company has elected to account for the lease and non-lease components, such as common area maintenance charges, as a single lease component. |
Stock Compensation | Stock Compensation In June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation (Topic 718) – Improvements to Nonemployee Share-Based Payment Accounting. The amendment substantially aligns accounting for share-based payments to employees and non-employees by expanding the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. Consistent with the accounting requirement for employee share-based payment awards, nonemployee share-based payment awards will be measured at grant-date fair value. On January 1, 2019, the Company adopted this ASU which did not have a material effect on the Company’s condensed consolidated financial statements and related disclosures. |
Long-Term Incentive Plan | Long-Term Incentive Plan In January 2018, the Company established a long-term incentive plan (“LTIP”) which provides eligible employees with the opportunity to receive performance-based compensation comprised of restricted stock units. The vesting of the restricted stock units is contingent upon the achievement of pre-determined regulatory milestones. The Company records compensation expense over the estimated service period for a milestone when the achievement of the milestone is considered probable, which is assessed at each reporting date. Once a milestone is considered probable, the Company records compensation expense based on the portion of the service period elapsed to date with respect to that milestone, with a cumulative catch-up, net of estimated forfeitures, and recognizes remaining compensation expense, if any, over the remaining estimated service period. Compensation expense of $3.1 million has been recorded to date under the LTIP as certain conditions for recognizing expense have been met. As of June 30, 2019, the estimated potential value to be delivered in restricted stock units to participants eligible for the LTIP was approximately $5.9 million. The total potential value to be delivered under the LTIP is expected to change in the future. |
2018 Inducement Award Plan | 2018 Inducement Award Plan On June 11, 2018, the Company established the 2018 Inducement Award Plan (“Inducement Plan”). The Inducement Plan allows for the grant of options, restricted stock, restricted stock unit awards, and performance unit awards to new employees of the Company by granting an award to such new employee as an inducement to begin employment with the Company. On June 20, 2019, the Company’s Compensation Committee approved an increase of 1,000,000 shares for a total of 4,000,000 shares of its common stock reserved for issuance under the Inducement Plan. As of June 30, 2019, there were 1,655,000 shares available for issuance under the Inducement Plan. |
Liquidity and Going Concern | Liquidity and Going Concern The Company has an accumulated deficit as of June 30, 2019. To date, the Company has funded its operations primarily through sales and issuances of its capital stock, Convertible Notes and payments from its former collaboration partners, and will require substantial additional capital for research and product development. In January 2019, the Company entered into an equity distribution agreement to commence an “at the market” offering program, , under which the Company is permitted to offer and sell, from time to time, shares of common stock having a maximum aggregate offering price of up to $100 million. The ATM program will remain in full force and effect until the ATM program is terminated. The Company has not raised any funds through the ATM program. The Company estimates the available cash, cash equivalents, investments and restricted cash as of June 30, 2019 will be sufficient to meet the Company’s projected operating requirements through the anticipated launch of eptinezumab and into the latter part of 2020. These operating requirements consist principally of expenditures related to the establishment of the eptinezumab commercial drug supply chain, continued build-out of the Company’s commercial organization (e.g., marketing, sales, medical affairs, payor access, information technology) and pre-launch market readiness activities. The Company has based its estimate of the timing for its projected expenditures on assumptions that may prove to be wrong, and it could utilize its available capital resources sooner than it currently expects. Furthermore, the Company’s operating plans may change, and it may need additional funds to meet operational needs and capital requirements sooner than planned. The Company will need additional funding to execute and sustain the commercial launch of eptinezumab. The Company will also need to obtain substantial additional sources of funding to develop and commercialize ALD1910 and its other product candidates. The Company expects to finance future cash needs through equity financings, debt financings, collaborations, strategic alliances, licensing arrangements and other marketing and distribution arrangements, but there are no assurances that the Company will be able to raise sufficient amounts of funding in the future on acceptable terms, or at all. If such additional funding is not available on favorable terms or at all, the Company may need to delay or reduce the scope of its development programs or commercialization activities, or grant rights in the United States, as well as outside the United States, to its product candidates to one or more partners. 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 June 2016, the FASB issued ASU 2016-13, Financial Instruments: Credit Losses, as clarified in April 2019 with ASU 2019-04 and in June 2019 with ASU 2019-05. This amendment requires an entity to measure and recognize all expected credit losses for financial assets held and disclose significant estimates and judgments used in estimating those credit losses at the reporting date. This ASU will become effective for annual periods beginning after December 15, 2019, with early adoption permitted. The Company is currently evaluating the effect of this new guidance on its consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) – Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement. The amendment is intended to improve the effectiveness of disclosures in the notes to financial statements related to fair value measurements in Topic 820. This ASU will become effective for annual periods beginning after December 15, 2019, including interim periods within that period, and early adoption is permitted. The Company is currently evaluating the effect of this new guidance on its consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40) – Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. This amendment aligns the accounting for implementation costs incurred in a hosting arrangement that is a service contract with the guidance on capitalizing costs associated with developing or obtaining internal-use software. This ASU will become effective for annual periods beginning after December 15, 2019, including interim periods within that period, and early adoption is permitted. The Company does not expect this ASU to have a material effect on its consolidated financial statements. 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 condensed consolidated financial statements as a result of future adoption. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Reconciliation of Cash, Cash Equivalents and Restricted Cash | The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets to the total of cash, cash equivalents and restricted cash shown in the condensed consolidated statement of cash flows. June 30, December 31, 2019 2018 (in thousands) Cash and cash equivalents $ 88,378 $ 87,865 Restricted cash 31,341 5,000 Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows $ 119,719 $ 92,865 |
Net Loss Per Share Applicable_2
Net Loss Per Share Applicable to Common Stockholders (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Earnings per Share | Basic net loss per share applicable to common stockholders is calculated by dividing net loss applicable to common stockholders 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 Six Months Ended June 30, June 30, 2019 2018 2019 2018 Net loss applicable to common stockholders (in thousands) $ (59,891 ) $ (70,691 ) $ (179,136 ) $ (188,265 ) Denominator Weighted average common shares outstanding - basic and diluted 83,479,867 67,966,066 78,297,180 67,905,804 Net loss per share applicable to common stockholders - basic and diluted $ (0.72 ) $ (1.04 ) $ (2.29 ) $ (2.77 ) |
Schedule of Weighted Average Numbers of Securities Excluded from Calculation of Diluted Net Loss Per Share | The following weighted average numbers of securities were excluded from the calculation of diluted net loss per share for the three and six months ended June 30, 2019 and 2018 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 Six Months Ended June 30, June 30, 2019 2018 2019 2018 Common shares underlying 2025 convertible senior notes 14,197,526 14,197,531 14,197,526 11,643,135 Common shares underlying convertible preferred stock 7,630,525 7,254,541 7,619,091 6,812,845 Stock options, stock awards and shares under employee stock purchase plan 14,074,135 10,210,026 13,407,239 9,591,644 35,902,186 31,662,098 35,223,856 28,047,624 |
Investments (Tables)
Investments (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Investments [Abstract] | |
Schedule of Available for Sale Securities | 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 June 30, 2019 U.S. government agency obligations maturing in one year or less $ 320,980 $ 30 $ (77 ) $ 320,933 Type of security as of December 31, 2018 U.S. government agency obligations maturing in one year or less $ 320,558 $ — $ (1,054 ) $ 319,504 |
Fair Value Disclosures (Tables)
Fair Value Disclosures (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
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 June 30, 2019 Assets Cash equivalents Money market funds $ 83,494 $ — $ — $ 83,494 Short-term investments U.S. government agency obligations — 320,933 — 320,933 Restricted cash Time deposits 31,341 — — 31,341 $ 114,835 $ 320,933 $ — $ 435,768 Liabilities 2025 convertible senior notes — 268,511 — 268,511 Derivative liability — — 2,803 2,803 $ — $ 268,511 $ 2,803 $ 271,314 As of December 31, 2018 Assets Cash equivalents Money market funds $ 85,323 $ — $ — $ 85,323 Short-term investments U.S. government agency obligations — 319,504 — 319,504 Restricted cash Money market funds 5,000 — — 5,000 $ 90,323 $ 319,504 $ — $ 409,827 Liabilities 2025 convertible senior notes — 230,538 — 230,538 Derivative liability — — 1,658 1,658 $ — $ 230,538 $ 1,658 $ 232,196 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Payables And Accruals [Abstract] | |
Schedule of Accrued Liabilities | Accrued liabilities consisted of the following for the dates indicated: June 30, December 31, 2019 2018 (in thousands) Loss contingency - contract manufacturing (Note 12) $ 26,000 $ — Compensation and benefits 7,582 9,260 Contracted research and development 955 5,655 Professional services and other 4,294 1,307 Interest on 2025 convertible senior notes 2,995 2,995 $ 41,826 $ 19,217 |
2025 Convertible Senior Notes_2
2025 Convertible Senior Notes, Net (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Outstanding Balances of Convertible Notes | The outstanding balances of the Convertible Notes as of June 30, 2019 consisted of the following: 2025 Convertible Senior Notes (in thousands) Liability component: Principal $ 287,500 Less: unamortized debt discount and issuance costs (99,177 ) Net carrying amount of Liability Component $ 188,323 Net carrying amount of Equity Component $ 106,148 |
Schedule of Total Interest Expense Recognized Related to Convertible Notes | The following table sets forth total interest expense recognized related to the Convertible Notes during the three and six months ended June 30, 2019 and 2018: Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 (in thousands) (in thousands) Contractual interest expense $ 1,798 $ 1,833 $ 3,594 $ 2,995 Amortization of debt discount and issuance costs 3,177 2,855 6,219 4,544 Total interest expense $ 4,975 $ 4,688 $ 9,813 $ 7,539 |
Schedule of Future Minimum Payments Including Interest on Long-Term Debt | Future minimum payments including interest on the Company’s long-term debt as of June 30, 2019 were as follows: Years ended December 31, Future Minimum Payments (in thousands) 2019 $ 3,594 2020 7,188 2021 7,188 2022 7,188 2023 7,188 2024 and thereafter 298,279 Total minimum payments 330,625 Less: interest (43,125 ) Less: unamortized discount and issuance costs (99,177 ) Less: current portion — 2025 convertible senior notes, net $ 188,323 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Schedule of Supplemental Balance Sheet Information Related to Leases | Supplemental balance sheet information related to leases was as follows: June 30, 2019 (in thousands) Assets Long-term Right of use assets $ 4,480 Liabilities Current operating lease liabilities $ 981 Long-term operating lease liabilities 4,061 Total operating lease liabilities $ 5,042 |
Schedule of Weighted Average Remaining Lease Term and Discount Rate | June 30, 2019 Weighted-average remaining lease term (years) 4.1 Weighted-average discount rate 10.3 % |
Schedule of Undiscounted Cash Flows to Operating Lease Liabilities | The table below reconciles the undiscounted cash flows to the operating lease liabilities recorded on the consolidated balance sheet as of June 30, 2019. Years ended December 31, (in thousands) 2019 (excluding the six months ended June 30, 2019) $ 720 2020 1,477 2021 1,521 2022 1,568 2023 938 Total minimum payments 6,224 Less: amount of lease payments representing interest (1,182 ) Present value of future lease payments 5,042 Less: current lease liabilities (981 ) Noncurrent lease liabilities $ 4,061 |
Schedule of Future Aggregate Minimum Payments Under Noncancelable Operating Leases | Future aggregate minimum payments under noncancelable operating leases are as follows: Years ended December 31, (in thousands) 2019 (six months ending December 31, 2019) $ 720 2020 1,477 2021 1,521 2022 1,568 2023 938 Total minimum lease payments $ 6,224 |
Nature of Business - Additional
Nature of Business - Additional Information (Detail) - USD ($) $ in Thousands | Mar. 04, 2019 | Jun. 30, 2019 |
Nature Of Operations [Line Items] | ||
Company Incorporation, date | May 20, 2002 | |
Public offering, shares issued | 13,000,000 | |
Proceeds from the public offering | $ 159,100 | $ 159,098 |
Underwriting discounts and commissions and placement agent fees | 10,200 | |
Offering expenses | $ 200 | |
Private Placement | ||
Nature Of Operations [Line Items] | ||
Public offering, shares issued | 1,739,130 | |
Private Placement | Redmile Group, LLC | ||
Nature Of Operations [Line Items] | ||
Public offering, shares issued | 1,739,130 | |
Over Allotment Option | ||
Nature Of Operations [Line Items] | ||
Public offering, shares issued | 1,695,652 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Detail) | Jun. 20, 2019shares | Mar. 04, 2019USD ($)shares | Jun. 30, 2019USD ($)Countryshares | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($)SegmentCountryshares | Jun. 30, 2018USD ($) | Jan. 31, 2019USD ($) | Jan. 01, 2019USD ($) | Dec. 31, 2018USD ($) |
Significant Accounting Policies [Line Items] | |||||||||
Number of operating segment | Segment | 1 | ||||||||
Number of operating geographic regions | Country | 3 | 3 | |||||||
Restricted cash | $ 31,341,000 | $ 31,341,000 | $ 5,000,000 | ||||||
Type of Revenue [Extensible List] | aldr:CollaborationAndLicenseAgreementsMember | aldr:CollaborationAndLicenseAgreementsMember | aldr:CollaborationAndLicenseAgreementsMember | aldr:CollaborationAndLicenseAgreementsMember | |||||
Revenue | $ 0 | $ 0 | $ 0 | $ 0 | |||||
Operating lease right of use ("ROU") assets | 4,480,000 | 4,480,000 | $ 4,900,000 | ||||||
Lease liabilities | 5,042,000 | 5,042,000 | $ 5,500,000 | ||||||
Public offering, shares issued | shares | 13,000,000 | ||||||||
Proceeds from the public offering | $ 159,100,000 | 159,098,000 | |||||||
At-The-Market Program | Distribution Agreement | Maximum | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Common stock aggregate offering price | $ 100,000,000 | ||||||||
Private Placement | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Public offering, shares issued | shares | 1,739,130 | ||||||||
Long-Term Incentive Plan | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Compensation expense | 3,100,000 | ||||||||
Estimated potential value to be delivered in restricted stock units to participants eligible | $ 5,900,000 | $ 5,900,000 | |||||||
2018 Inducement Award Plan | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Increase in number of shares common stock reserved and authorized for issuance | shares | 1,000,000 | ||||||||
Total shares common stock reserved and authorized for issuance | shares | 4,000,000 | ||||||||
Available for issuance of common stock | shares | 1,655,000 | 1,655,000 | |||||||
2.5% Convertible Senior Notes Due in February 1, 2025 | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Convertible Notes, interest rate | 2.50% | 2.50% | |||||||
Debt discount amortization period | 7 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Reconciliation of Cash, Cash Equivalents and Restricted Cash (Detail) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Dec. 31, 2017 |
Cash Cash Equivalents Restricted Cash And Restricted Cash Equivalents [Abstract] | ||||
Cash and cash equivalents | $ 88,378 | $ 87,865 | ||
Restricted cash | 31,341 | 5,000 | ||
Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows | $ 119,719 | $ 92,865 | $ 125,754 | $ 86,896 |
Net Loss Per Share Applicable_3
Net Loss Per Share Applicable to Common Stockholders - Schedule of Basic and Diluted Earnings per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Earnings Per Share [Abstract] | ||||
Net loss applicable to common stockholders (in thousands) | $ (59,891) | $ (70,691) | $ (179,136) | $ (188,265) |
Denominator | ||||
Weighted average common shares outstanding - basic and diluted | 83,479,867 | 67,966,066 | 78,297,180 | 67,905,804 |
Net loss per share applicable to common stockholders - basic and diluted | $ (0.72) | $ (1.04) | $ (2.29) | $ (2.77) |
Net Loss Per Share Applicable_4
Net Loss Per Share Applicable to Common Stockholders - Schedule of Weighted Average Numbers of Securities Excluded from Calculation of Diluted Net Loss Per Share (Detail) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
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 | 35,902,186 | 31,662,098 | 35,223,856 | 28,047,624 |
Common shares underlying 2025 convertible senior notes | ||||
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 | 14,197,526 | 14,197,531 | 14,197,526 | 11,643,135 |
Common shares underlying convertible preferred stock | ||||
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 | 7,630,525 | 7,254,541 | 7,619,091 | 6,812,845 |
Stock options, stock awards and shares under 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 | 14,074,135 | 10,210,026 | 13,407,239 | 9,591,644 |
Investments - Schedule of Avail
Investments - Schedule of Available for Sale Securities (Detail) - U.S. government agency obligations maturing in one year or less - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | $ 320,980 | $ 320,558 |
Gross unrealized gains | 30 | |
Gross unrealized losses | (77) | (1,054) |
Fair Value | $ 320,933 | $ 319,504 |
Investments - Additional Inform
Investments - Additional Information (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Investments Debt And Equity Securities [Abstract] | ||||
Available for sale securities realized gains or losses | $ 0 | $ 300,000 | $ 0 | $ 300,000 |
Investment in Unconsolidated _2
Investment in Unconsolidated Entity and Derivative Liability - Additional Information (Detail) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Nov. 30, 2017 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2016 | |
Investment in Unconsolidated Entity [Line Items] | |||||||
Net loss recorded | $ 222 | ||||||
Fair value of derivative liability | $ 2,803 | $ 2,803 | $ 1,658 | ||||
Increase in fair value of derivative liability expense | $ 170 | $ 1,505 | $ 1,145 | $ 1,505 | |||
Vitaeris | |||||||
Investment in Unconsolidated Entity [Line Items] | |||||||
Gain on license agreement | $ 1,100 | ||||||
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 | $ 200 | ||||||
Upfront payment received | $ 15,000 |
Fair Value Disclosures - Schedu
Fair Value Disclosures - Schedule of Financial Instruments by Level within Fair Value Hierarchy (Detail) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | $ 320,933 | $ 319,504 |
Assets at fair value | 435,768 | 409,827 |
Liabilities at fair value | 271,314 | 232,196 |
Derivative liability | 2,803 | 1,658 |
2025 convertible senior notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities at fair value | 268,511 | 230,538 |
Money market Funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 83,494 | 85,323 |
Restricted cash | 5,000 | |
U.S. government agency obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 320,933 | 319,504 |
Time deposits | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Restricted cash | 31,341 | |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets at fair value | 114,835 | 90,323 |
Level 1 | Money market Funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 83,494 | 85,323 |
Restricted cash | 5,000 | |
Level 1 | Time deposits | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Restricted cash | 31,341 | |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets at fair value | 320,933 | 319,504 |
Liabilities at fair value | 268,511 | 230,538 |
Level 2 | 2025 convertible senior notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities at fair value | 268,511 | 230,538 |
Level 2 | U.S. government agency obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 320,933 | 319,504 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities at fair value | 2,803 | 1,658 |
Derivative liability | $ 2,803 | $ 1,658 |
Fair Value Disclosures - Additi
Fair Value Disclosures - Additional Information (Detail) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Fair Value Disclosures [Abstract] | ||
Fair value of derivative liability | $ 2,803 | $ 1,658 |
Accrued Liabilities - Schedule
Accrued Liabilities - Schedule of Accrued Liabilities (Detail) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Payables And Accruals [Abstract] | ||
Loss contingency - contract manufacturing (Note 12) | $ 26,000 | |
Compensation and benefits | 7,582 | $ 9,260 |
Contracted research and development | 955 | 5,655 |
Professional services and other | 4,294 | 1,307 |
Interest on 2025 convertible senior notes | 2,995 | 2,995 |
Accrued liabilities | $ 41,826 | $ 19,217 |
2025 Convertible Senior Notes_3
2025 Convertible Senior Notes, Net - Additional Information (Detail) | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2019USD ($)$ / shares | Jun. 30, 2018USD ($) | Mar. 31, 2018trading_day | Jun. 30, 2019USD ($)trading_day$ / sharesshares | Jun. 30, 2018USD ($) | Feb. 13, 2018USD ($) | Feb. 01, 2018USD ($) | |
Debt Instrument [Line Items] | |||||||
Percentage of principal and accrued and unpaid Interest payable upon default | 100.00% | ||||||
Proceeds from issuance of Convertible Notes | $ 277,656,000 | ||||||
Equity component of Convertible Notes recognized as debt discount | 109,911,000 | ||||||
Amortization of debt discount and issuance costs | $ 3,177,000 | $ 2,855,000 | $ 6,219,000 | 4,544,000 | |||
2025 Convertible Senior Notes | |||||||
Debt Instrument [Line Items] | |||||||
Convertible Notes, interest rate | 2.50% | 2.50% | |||||
Debt instrument, frequency of periodic payment | semi-annually | ||||||
Debt instrument, payment terms | The Convertible Notes are senior unsecured obligations of the Company and bear interest at a rate of 2.5% per annum, payable semi-annually in arrears on February 1 and August 1 of each year, commencing on August 1, 2018. | ||||||
Debt instrument, date of first required payment | Aug. 1, 2018 | ||||||
Debt instrument, redemption period, start date | Feb. 1, 2022 | ||||||
Debt instrument, maturity date | Feb. 1, 2025 | ||||||
Initial conversion rate per $1,000 principal amount of notes | shares | 49.3827 | ||||||
Principal amount of notes used in conversion rate | $ 1,000 | $ 1,000 | |||||
Initial conversion price per share of common stock | $ / shares | $ 20.25 | $ 20.25 | |||||
Debt instrument, convertible, latest date | Nov. 1, 2024 | ||||||
Debt instrument, convertible, terms of conversion feature | Holders of the Convertible Notes may convert all or any portion of their notes, in multiples of $1,000 principal amount, at their option at any time prior to the close of business on the business day immediately preceding November 1, 2024 only under the following circumstances: 1. during any calendar quarter commencing after the calendar quarter ending on March 31, 2018 (and only during such calendar quarter), if the last reported sale price of the Company's common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; 2. during the five business day period after any five consecutive trading day period (the “measurement period”) in which the “trading price” per $1,000 principal amount of the Convertible Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day; 3. if the Company calls any or all of the Convertible Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; or 4. upon the occurrence of specified corporate events. | ||||||
Initial amount of liability component | $ 177,600,000 | $ 177,600,000 | |||||
Proceeds from issuance of Convertible Notes | 287,500,000 | ||||||
Fair value of liability of Convertible Notes | 177,600,000 | 177,600,000 | |||||
Equity component of Convertible Notes recognized as debt discount | 109,900,000 | ||||||
Debt issuance costs | 9,800,000 | 9,800,000 | |||||
Debt issuance costs allocated to equity component and recorded as reduction to additional paid-in capital | 3,700,000 | ||||||
Debt issuance costs allocated to liability component and recorded as reduction of Convertible Notes | $ 6,100,000 | ||||||
Debt discount and issuance costs amortized to interest expense, amortization period | 7 years | ||||||
Amortization of debt discount and issuance costs | 3,200,000 | $ 2,900,000 | $ 6,200,000 | $ 4,500,000 | |||
Expected life of Convertible Notes | 7 years | ||||||
Effective interest rate on liability component of Convertible Notes for the period | 10.60% | ||||||
Debt instrument, convertible, if-converted value in excess of principal | $ 0 | ||||||
Estimated fair value of Convertible Notes | 268,500,000 | $ 268,500,000 | |||||
2025 Convertible Senior Notes | Debt Instrument, Redemption, Period On or After February 1, 2022 | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, redemption period, start date | Feb. 1, 2022 | ||||||
Debt instrument, redemption price, percentage of principal amount redeemed | 100.00% | ||||||
Debt instrument, redemption, threshold trading days | trading_day | 20 | ||||||
Debt instrument, redemption, threshold consecutive trading days | trading_day | 30 | ||||||
Debt instrument, redemption, threshold percentage of stock price trigger | 130.00% | ||||||
2025 Convertible Senior Notes | Debt Instrument, Convertible, Terms of Conversion Feature, Circumstances One | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, convertible, threshold trading days | trading_day | 20 | ||||||
Debt instrument, convertible, threshold consecutive trading days | trading_day | 30 | ||||||
Debt instrument, convertible, threshold percentage of stock price trigger | 130.00% | ||||||
2025 Convertible Senior Notes | Debt Instrument, Convertible, Terms of Conversion Feature, Circumstances Two | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, convertible, threshold consecutive trading days | trading_day | 5 | ||||||
Debt instrument, convertible, threshold measurement period, description | during the five business day period after any five consecutive trading day period | ||||||
Debt instrument, convertible, threshold maximum percentage of product of last reported sale price of common stock | 98.00% | ||||||
2025 Convertible Senior Notes | 2025 convertible senior notes | |||||||
Debt Instrument [Line Items] | |||||||
Aggregate principal amount | $ 287,500,000 | $ 287,500,000 | $ 37,500,000 | $ 250,000,000 |
2025 Convertible Senior Notes_4
2025 Convertible Senior Notes, Net - Schedule of Outstanding Balances of Convertible Notes (Detail) - USD ($) | Jun. 30, 2019 | Feb. 13, 2018 | Feb. 01, 2018 |
Liability component: | |||
Less: unamortized debt discount and issuance costs | $ (99,177,000) | ||
2025 convertible senior notes, net | 188,323,000 | ||
Convertible Notes | 2025 Convertible Senior Notes | |||
Liability component: | |||
Principal | 287,500,000 | $ 37,500,000 | $ 250,000,000 |
Less: unamortized debt discount and issuance costs | (99,177,000) | ||
2025 convertible senior notes, net | 188,323,000 | ||
Net carrying amount of Equity Component | $ 106,148,000 |
2025 Convertible Senior Notes_5
2025 Convertible Senior Notes, Net - Schedule of Total Interest Expense Recognized Related to Convertible Notes (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Debt Disclosure [Abstract] | ||||
Contractual interest expense | $ 1,798 | $ 1,833 | $ 3,594 | $ 2,995 |
Amortization of debt discount and issuance costs | 3,177 | 2,855 | 6,219 | 4,544 |
Total interest expense | $ 4,975 | $ 4,688 | $ 9,813 | $ 7,539 |
2025 Convertible Senior Notes_6
2025 Convertible Senior Notes, Net - Schedule of Future Minimum Payments Including Interest on Long-Term Debt (Detail) $ in Thousands | Jun. 30, 2019USD ($) |
Debt Disclosure [Abstract] | |
Future Minimum Payments, 2019 | $ 3,594 |
Future Minimum Payments, 2020 | 7,188 |
Future Minimum Payments, 2021 | 7,188 |
Future Minimum Payments, 2022 | 7,188 |
Future Minimum Payments, 2023 | 7,188 |
Future Minimum Payments, 2024 and thereafter | 298,279 |
Total minimum payments | 330,625 |
Less: interest | (43,125) |
Less: unamortized debt discount and issuance costs | (99,177) |
2025 convertible senior notes, net | $ 188,323 |
Convertible Preferred Stock - A
Convertible Preferred Stock - Additional Information (Detail) - USD ($) | Mar. 04, 2019 | Jan. 12, 2018 | Jan. 07, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Jan. 05, 2018 |
Temporary Equity [Line Items] | ||||||||
Public offering, shares issued | 13,000,000 | |||||||
Preferred stock liquidation preference description | A liquidation shall be deemed to include the occurrence of either (i) the Company merges into or consolidates with any other entity, or any entity merges into or consolidates with the Company and, after giving effect to such transaction, the stockholders of the Company immediately prior to such transaction own less than 50% of the aggregate voting power of the Company or the successor entity of such transaction or (ii) the Company sells, leases, licenses or transfers all or substantially all of its assets to another person or entity and the stockholders of the Company immediately prior to such transaction own less than 50% of the aggregate voting power of the acquiring entity immediately after the transaction (each a “Deemed Liquidation”). | |||||||
Accrued dividends on convertible preferred stock | $ 1,480,000 | $ 2,302,000 | $ 2,791,000 | $ 3,385,000 | ||||
Common stock price per share | $ 17.85 | $ 12.95 | ||||||
Private Placement | ||||||||
Temporary Equity [Line Items] | ||||||||
Public offering, shares issued | 1,739,130 | |||||||
Convertible Preferred Stock | ||||||||
Temporary Equity [Line Items] | ||||||||
Beneficial conversion feature | 29,500,000 | |||||||
Redmile Group, LLC | Private Placement | ||||||||
Temporary Equity [Line Items] | ||||||||
Public offering, shares issued | 1,739,130 | |||||||
Preferred Stock Purchase Agreement | Redmile Group, LLC | ||||||||
Temporary Equity [Line Items] | ||||||||
Percentage of capital stock held by related party | 5.00% | |||||||
Preferred stock convertible into shares of common stock | 10 | |||||||
Preferred Stock Purchase Agreement | Redmile Group, LLC | Class A-1 Convertible Preferred Stock | Private Placement | ||||||||
Temporary Equity [Line Items] | ||||||||
Number of shares sold | 725,268 | |||||||
Price per share | $ 137.88 | |||||||
Net proceeds from sale of shares after deducting fees and applicable expenses | $ 97,700,000 | |||||||
Fees and applicable expenses paid | $ 2,300,000 | |||||||
Preferred Stock Purchase Agreement | Redmile Group, LLC | Convertible Preferred Stock | ||||||||
Temporary Equity [Line Items] | ||||||||
Option to sell convertible preferred stock, maximum amount | $ 150,000,000 | |||||||
Period of option to sell convertible preferred stock, following date of initial purchase | 90 days | |||||||
Public offering, shares issued | 0 | |||||||
Liquidation preference, per share | $ 137.88 | |||||||
Rate of dividend per year | 5.00% | |||||||
Accrued dividends on convertible preferred stock | $ 1,500,000 | $ 2,300,000 | $ 2,800,000 | $ 3,400,000 | ||||
Accrued dividends on convertible preferred stock per share | $ 1.90 | $ 3.17 | $ 3.58 | $ 4.67 | ||||
Issuance of warrants to purchase shares of convertible preferred stock | 75,000 | 75,000 | ||||||
Convertible preferred stock at a purchase price per share | $ 137.88 | $ 137.88 | ||||||
Preferred Stock Purchase Agreement | Redmile Group, LLC | Convertible Preferred Stock | 2.5% Convertible Senior Notes Due in February 1, 2025 | ||||||||
Temporary Equity [Line Items] | ||||||||
Termination of right to sell additional convertible preferred stock | $ 150,000,000 |
Leases - Additional Information
Leases - Additional Information (Detail) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019USD ($)Buildings | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($)AgreementBuildings | Jun. 30, 2018USD ($) | |
Leases [Abstract] | ||||
Operating lease, number of real estate agreements | Agreement | 2 | |||
Number of adjacent buildings for leases | Buildings | 3 | 3 | ||
Lease expire date | Jul. 31, 2023 | |||
Lessee, operating lease, option to extend | The leases include an option to extend the lease for an additional three years | |||
Lessee, operating lease, existence of option to extend | true | |||
Lessee, operating lease, additional term of contract | 3 years | |||
Operating lease cost | $ 300,000 | $ 700,000 | ||
Variable lease cost | 200,000 | 300,000 | ||
Short-term lease cost | 22,000 | 43,000 | ||
Lease expense | $ 500,000 | $ 1,000,000 | ||
Cash paid for lease | $ 200,000 | $ 400,000 |
Leases - Schedule of Supplement
Leases - Schedule of Supplemental Balance Sheet Information Related to Leases (Detail) - USD ($) $ in Thousands | Jun. 30, 2019 | Jan. 01, 2019 |
Long-term | ||
Right of use assets | $ 4,480 | $ 4,900 |
Liabilities | ||
Current operating lease liabilities | 981 | |
Long-term operating lease liabilities | 4,061 | |
Total operating lease liabilities | $ 5,042 | $ 5,500 |
Leases - Schedule of Weighted A
Leases - Schedule of Weighted Average Remaining Lease Term and Discount Rate (Detail) | Jun. 30, 2019 |
Leases [Abstract] | |
Weighted-average remaining lease term (years) | 4 years 1 month 6 days |
Weighted-average discount rate | 10.30% |
Leases - Schedule of Undiscount
Leases - Schedule of Undiscounted Cash Flows to Operating Lease Liabilities (Detail) - USD ($) $ in Thousands | Jun. 30, 2019 | Jan. 01, 2019 |
Leases [Abstract] | ||
2019 (excluding the six months ended June 30, 2019) | $ 720 | |
2020 | 1,477 | |
2021 | 1,521 | |
2022 | 1,568 | |
2023 | 938 | |
Total minimum payments | 6,224 | |
Less: amount of lease payments representing interest | (1,182) | |
Total operating lease liabilities | 5,042 | $ 5,500 |
Less: current lease liabilities | (981) | |
Noncurrent lease liabilities | $ 4,061 |
Leases - Schedule of Future Agg
Leases - Schedule of Future Aggregate Minimum Payments Under Noncancelable Operating Leases (Detail) $ in Thousands | Jun. 30, 2019USD ($) |
Leases [Abstract] | |
2019 (six months ending December 31, 2019) | $ 720 |
2020 | 1,477 |
2021 | 1,521 |
2022 | 1,568 |
2023 | 938 |
Total minimum lease payments | $ 6,224 |
Teva License Agreement - Additi
Teva License Agreement - Additional Information (Detail) - Teva Pharmaceuticals International GmbH - Settlement and Licensing Agreement | Jan. 05, 2018USD ($)Milestone |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |
Agreement entered date | Jan. 5, 2018 |
One-time non-refundable payment, amount | $ 25,000,000 |
Second one-time, non-refundable payment payable upon approval of Biologics License Application ('BLA") | 25,000,000 |
Amount payable upon each sales-related milestones | $ 75,000,000 |
Number of sales-related milestones | Milestone | 2 |
Annual sales milestone one | $ 1,000,000,000 |
Annual sales milestone two | $ 2,000,000,000 |
Minimum [Member] | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |
Percentage of royalty payments on net sales | 5.00% |
Maximum | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |
Percentage of royalty payments on net sales | 7.00% |
Loss Contingency - Additional I
Loss Contingency - Additional Information (Detail) $ in Millions | Feb. 28, 2019USD ($) |
Termination for Breach of Contract Manufacturing Agreement | Maximum | |
Loss Contingencies [Line Items] | |
Loss contingency, excess of amount accrued | $ 26 |