Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Jun. 30, 2014 | Feb. 05, 2015 | |
Entity Registrant Name | IRONWOOD PHARMACEUTICALS INC | ||
Entity Central Index Key | 1446847 | ||
Document Type | 10-K | ||
Document Period End Date | 31-Dec-14 | ||
Amendment Flag | FALSE | ||
Current Fiscal Year End Date | -19 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $2,028,982,083 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Class A common stock | |||
Entity Common Stock, Shares Outstanding | 125,259,060 | ||
Class B common stock | |||
Entity Common Stock, Shares Outstanding | 15,901,272 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $74,297 | $75,490 |
Available-for-sale securities | 174,037 | 122,112 |
Accounts receivable | 10 | 513 |
Related party accounts receivable, net | 25,829 | 2,700 |
Inventory | 4,954 | 22,145 |
Prepaid expenses and other current assets | 10,603 | 6,168 |
Total current assets | 289,730 | 229,128 |
Restricted cash | 8,147 | 8,147 |
Property and equipment, net | 29,826 | 37,376 |
Other assets | 5,810 | 4,311 |
Total assets | 333,513 | 278,962 |
Current liabilities: | ||
Accounts payable | 9,754 | 10,139 |
Related party accounts payable, net | 8 | 48 |
Accrued research and development costs | 3,574 | 3,412 |
Accrued expenses | 22,612 | 18,438 |
Current portion of capital lease obligations | 1,152 | 1,139 |
Current portion of deferred rent | 4,992 | 2,790 |
Current portion of deferred revenue | 7,191 | 5,074 |
Current portion of notes payable | 11,258 | |
Total current liabilities | 60,541 | 41,040 |
Capital lease obligations, net of current portion | 2,571 | 3,134 |
Deferred rent, net of current portion | 10,522 | 8,822 |
Deferred revenue, net of current portion | 8,989 | 11,416 |
Notes payable, net of current portion | 162,338 | 174,672 |
Other liabilities | 1,653 | |
Commitments and contingencies (Note 4, 10 and 11) | ||
Stockholders' equity: | ||
Preferred stock, $0.001 par value, 75,000,000 shares authorized, no shares issued and outstanding | ||
Additional paid-in capital | 1,055,876 | 815,930 |
Accumulated deficit | -967,446 | -777,828 |
Accumulated other comprehensive income | -19 | 2 |
Total stockholders' equity | 88,552 | 38,225 |
Total liabilities and stockholders' equity | 333,513 | 278,962 |
Class A common stock | ||
Stockholders' equity: | ||
Common stock | 125 | 103 |
Class B common stock | ||
Stockholders' equity: | ||
Common stock | $16 | $18 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Preferred stock, par value (in dollars per share) | $0.00 | $0.00 |
Preferred stock, shares authorized | 75,000,000 | 75,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Class A common stock | ||
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 124,915,658 | 102,803,093 |
Common stock, shares outstanding | 124,915,658 | 102,803,093 |
Class B common stock | ||
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 15,907,272 | 18,362,037 |
Common stock, shares outstanding | 15,907,272 | 18,362,037 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Consolidated Statements of Operations | |||
Collaborative arrangements revenue | $76,436 | $22,881 | $150,245 |
Cost and expenses: | |||
Cost of revenue | 25,583 | 7,203 | 965 |
Research and development | 101,890 | 102,378 | 113,474 |
Selling, general and administrative | 118,333 | 123,228 | 92,538 |
Collaboration expense | 42,074 | 16,030 | |
Total cost and expenses | 245,806 | 274,883 | 223,007 |
Loss from operations | -169,370 | -252,002 | -72,762 |
Other (expense) income: | |||
Interest expense | -21,166 | -21,002 | -59 |
Interest and investment income | 257 | 192 | 197 |
Other income | 661 | ||
Other (expense) income, net | -20,248 | -20,810 | 138 |
Net loss | ($189,618) | ($272,812) | ($72,624) |
Net loss per share - basic and diluted | ($1.39) | ($2.35) | ($0.68) |
Weighted average number of common shares used in net loss per share - basic and diluted: | 136,811 | 115,852 | 106,403 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Loss (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Consolidated Statements of Comprehensive Loss | |||
Net loss | ($189,618) | ($272,812) | ($72,624) |
Other comprehensive loss: | |||
Unrealized losses on available-for-sale securities | -21 | -3 | -1 |
Total other comprehensive loss | -21 | -3 | -1 |
Comprehensive loss | ($189,639) | ($272,815) | ($72,625) |
Consolidated_Statements_of_Sto
Consolidated Statements of Stockholders' Equity (USD $) | Common Stock | Common Stock | Additional paid-in capital | Accumulated deficit | Accumulated other comprehensive income (loss) | Class A common stock | Total |
In Thousands, except Share data, unless otherwise specified | Class A common stock | Class B common stock | USD ($) | USD ($) | USD ($) | USD ($) | |
USD ($) | USD ($) | ||||||
Balance at Dec. 31, 2011 | $62 | $39 | $542,141 | ($432,392) | $6 | $109,856 | |
Balance (in shares) at Dec. 31, 2011 | 61,801,770 | 38,914,080 | |||||
Increase (Decrease) in Stockholders' Equity | |||||||
Issuance of common stock upon exercise of stock options and employee stock purchase plan | 1 | 4,019 | 4,020 | ||||
Issuance of common stock upon exercise of stock options and employee stock purchase plan (in shares) | 226,658 | 782,955 | |||||
Issuance of common stock awards | 30 | 30 | |||||
Issuance of common stock awards (in shares) | 2,364 | ||||||
Issuance of common stock upon public offering, net of offering costs of $10.8 million, $7.9 million and 5.9 million for the year ended 2014, 2013 and 2012, respectively | 6 | 85,222 | 85,228 | ||||
Issuance of common stock upon public offering, net of offering costs of $10.8 million, $7.9 million and 5.9 million for the year ended 2014, 2013 and 2012, respectively (in shares) | 6,037,500 | ||||||
Conversion of Class B common stock to Class A common stock | 10 | -10 | |||||
Conversion of Class B common stock to Class A common stock (in shares) | 10,184,782 | -10,184,782 | |||||
Share-based compensation expense related to issuance of stock options to non-employees | 60 | 60 | |||||
Share-based compensation expense related to issuance of stock options to employees and employee stock purchase plan | 17,483 | 17,483 | |||||
Restricted common shares subject to repurchase | -7 | -7 | |||||
Restricted common stock no longer subject to repurchase | 7 | 7 | |||||
Unrealized loss on short-term investments | -1 | -1 | |||||
Net loss | -72,624 | -72,624 | |||||
Balance at Dec. 31, 2012 | 78 | 30 | 648,955 | -505,016 | 5 | 144,052 | |
Balance (in shares) at Dec. 31, 2012 | 78,253,074 | 29,512,253 | |||||
Increase (Decrease) in Stockholders' Equity | |||||||
Issuance of common stock upon exercise of stock options and employee stock purchase plan | 1 | 1 | 9,295 | 9,297 | |||
Issuance of common stock upon exercise of stock options and employee stock purchase plan (in shares) | 645,196 | 1,538,887 | |||||
Issuance of common stock awards | 28 | 28 | |||||
Issuance of common stock awards (in shares) | 10,772 | ||||||
Issuance of common stock upon public offering, net of offering costs of $10.8 million, $7.9 million and 5.9 million for the year ended 2014, 2013 and 2012, respectively | 11 | 137,755 | 137,766 | ||||
Issuance of common stock upon public offering, net of offering costs of $10.8 million, $7.9 million and 5.9 million for the year ended 2014, 2013 and 2012, respectively (in shares) | 11,204,948 | ||||||
Conversion of Class B common stock to Class A common stock | 13 | -13 | |||||
Conversion of Class B common stock to Class A common stock (in shares) | 12,689,103 | -12,689,103 | |||||
Share-based compensation expense related to issuance of stock options to non-employees | 272 | 272 | |||||
Share-based compensation expense related to issuance of stock options to employees and employee stock purchase plan | 19,624 | 19,624 | |||||
Restricted common stock no longer subject to repurchase | 1 | 1 | |||||
Unrealized loss on short-term investments | -3 | -3 | |||||
Net loss | -272,812 | -272,812 | |||||
Balance at Dec. 31, 2013 | 103 | 18 | 815,930 | -777,828 | 2 | 38,225 | |
Balance (in shares) at Dec. 31, 2013 | 102,803,093 | 18,362,037 | |||||
Increase (Decrease) in Stockholders' Equity | |||||||
Issuance of common stock upon exercise of stock options and employee stock purchase plan | 2 | 2 | 23,328 | 23,332 | |||
Issuance of common stock upon exercise of stock options and employee stock purchase plan (in shares) | 1,705,752 | 1,876,880 | |||||
Issuance of common stock awards | 22 | 22 | |||||
Issuance of common stock awards (in shares) | 290,843 | ||||||
Issuance of common stock upon public offering, net of offering costs of $10.8 million, $7.9 million and 5.9 million for the year ended 2014, 2013 and 2012, respectively | 16 | 190,412 | 190,428 | ||||
Issuance of common stock upon public offering, net of offering costs of $10.8 million, $7.9 million and 5.9 million for the year ended 2014, 2013 and 2012, respectively (in shares) | 15,784,325 | ||||||
Conversion of Class B common stock to Class A common stock | 4 | -4 | |||||
Conversion of Class B common stock to Class A common stock (in shares) | 4,331,645 | -4,331,645 | |||||
Share-based compensation expense related to issuance of stock options to non-employees | 2,618 | 2,618 | |||||
Share-based compensation expense related to issuance of stock options to employees and employee stock purchase plan | 23,566 | 23,566 | |||||
Unrealized loss on short-term investments | -21 | -21 | |||||
Net loss | -189,618 | -189,618 | |||||
Balance at Dec. 31, 2014 | $125 | $16 | $1,055,876 | ($967,446) | ($19) | $88,552 | |
Balance (in shares) at Dec. 31, 2014 | 124,915,658 | 15,907,272 |
Consolidated_Statements_of_Sto1
Consolidated Statements of Stockholders' Equity (Parenthetical) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Consolidated Statements of Stockholders' Equity | |||
Issuance of common stock upon public offering, offering costs | $10.80 | $7.90 | $5.90 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Cash flows from operating activities: | |||
Net loss | ($189,618) | ($272,812) | ($72,624) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Depreciation and amortization | 12,331 | 11,729 | 11,325 |
Loss on disposal of property and equipment | 119 | 610 | 20 |
Share-based compensation expense | 26,184 | 19,829 | 17,573 |
Write-down of inventory to net realizable value | 20,292 | ||
Loss on facility subleases | 2,573 | ||
Accretion of discount/ premium on investment securities | 1,085 | 1,254 | 1,157 |
Non-cash interest expense | 1,566 | 1,719 | |
Changes in assets and liabilities: | |||
Accounts receivable and related party accounts receivable | -23,680 | -1,726 | -835 |
Restricted cash | -500 | ||
Prepaid expenses and other current assets | -3,947 | -52 | -5,127 |
Inventory | -3,078 | -11,915 | -6,699 |
Other assets | -2,876 | 116 | -145 |
Accounts payable and accrued expenses | 1,425 | -11,724 | 24,241 |
Accrued research and development costs | 162 | -2,252 | -1,346 |
Deferred revenue | 744 | -4,915 | -36,016 |
Deferred rent | 1,811 | -2,716 | -2,149 |
Other liabilities | -661 | 992 | |
Net cash used in operating activities | -155,568 | -273,355 | -69,633 |
Cash flows from investing activities: | |||
Purchases of available-for-sale securities | -253,995 | -287,943 | -96,709 |
Sales and maturities of available-for-sale securities | 200,964 | 196,102 | 140,757 |
Purchases of property and equipment | -3,538 | -9,592 | -13,979 |
Proceeds from sale of property and equipment | 9 | ||
Net cash (used in) provided by investing activities | -56,569 | -101,433 | 30,078 |
Cash flows from financing activities: | |||
Proceeds from issuance of common stock | 190,428 | 137,766 | 85,228 |
Proceeds from issuance of notes payable | 175,000 | ||
Costs associated with issuance of notes payable | -7,717 | ||
Proceeds from exercise of stock options, and shares issued under employee stock purchase plan | 22,741 | 9,297 | 4,020 |
Payments on capital lease obligations | -1,062 | -768 | -275 |
Principal payments on debt | -1,163 | ||
Net cash provided by financing activities | 210,944 | 313,578 | 88,973 |
Net (decrease) increase in cash and cash equivalents | -1,193 | -61,210 | 49,418 |
Cash and cash equivalents, beginning of period | 75,490 | 136,700 | 87,282 |
Cash and cash equivalents, end of period | 74,297 | 75,490 | 136,700 |
Supplemental cash flow disclosure: | |||
Cash paid for interest | 19,606 | 18,428 | 55 |
Non-cash investing activities: | |||
Purchases under capital leases | 766 | 4,472 | 247 |
Fixed assets in accounts payable and accrued expenses | $1,592 | $261 | $2,146 |
Nature_of_Business
Nature of Business | 12 Months Ended |
Dec. 31, 2014 | |
Nature of Business | |
Nature of Business | |
1. Nature of Business | |
Ironwood Pharmaceuticals, Inc. (the "Company") is an entrepreneurial pharmaceutical company focused on creating medicines that make a difference for patients, building value to earn the continued support of its fellow shareholders, and empowering its team to passionately pursue excellence. The Company's core strategy is to establish a leading gastrointestinal ("GI") therapeutics company, leveraging its development and commercial capabilities in addressing GI disorders as well as its pharmacologic expertise in guanylate cyclase ("GC") pathways. | |
The Company has one marketed product, linaclotide, which is available in the United States ("U.S.") and Mexico under the trademarked name LINZESS® and is available in certain European countries and Canada under the trademarked name CONSTELLA®. Linaclotide is also being developed and commercialized in other parts of the world by certain of the Company's partners. | |
In August 2012, the U.S. Food and Drug Administration ("FDA") approved LINZESS as a once-daily treatment for adult men and women suffering from irritable bowel syndrome with constipation ("IBS-C") or chronic idiopathic constipation ("CIC"). The Company and Forest Laboratories, Inc. ("Forest") began commercializing LINZESS in the U.S. in December 2012. In July 2014, Actavis plc ("Actavis") completed its acquisition of Forest. The collaboration between the companies for the development and commercialization of linaclotide in North America remains in effect. | |
In November 2012, the European Commission granted marketing authorization to CONSTELLA for the symptomatic treatment of moderate to severe IBS-C in adults. CONSTELLA is the first, and to date, only drug approved in the European Union ("E.U.") for IBS-C. The Company's European partner, Almirall, S.A. ("Almirall"), began commercializing CONSTELLA in Europe in the second quarter of 2013. Currently, CONSTELLA is commercially available in certain European countries, including the United Kingdom, Italy and Spain. In May 2014, Almirall suspended commercialization of CONSTELLA in Germany following an inability to reach agreement with the German National Association of Statutory Health Insurance Funds on a reimbursement price that reflects the innovation and value of CONSTELLA. Almirall is assessing all possibilities to facilitate continued access to CONSTELLA for appropriate patients in Germany. | |
In December 2013 and February 2014, linaclotide was approved in Canada and Mexico, respectively, as a treatment for adult women and men suffering from IBS-C or CIC. Actavis has exclusive rights to commercialize linaclotide in Canada as CONSTELLA and, through a sublicense from Actavis, Almirall has exclusive rights to commercialize linaclotide in Mexico as LINZESS. In May 2014, Actavis began commercializing CONSTELLA in Canada and in June 2014, Almirall began commercializing LINZESS in Mexico. | |
Astellas Pharma Inc. ("Astellas"), the Company's partner in Japan, is developing linaclotide for the treatment of patients with IBS-C in its territory. In October 2014, Astellas initiated a double-blind, placebo-controlled Phase III clinical trial of linaclotide in adult patients with IBS-C. In October 2012, the Company entered into a collaboration agreement with AstraZeneca AB ("AstraZeneca") to co-develop and co-commercialize linaclotide in China, Hong Kong and Macau, with AstraZeneca having primary responsibility for the local operational execution. In the third quarter of 2013, the Company and AstraZeneca initiated a double-blind, placebo-controlled Phase III clinical trial of linaclotide in adult patients with IBS-C. The Company continues to assess alternatives to bring linaclotide to IBS-C and CIC sufferers in the parts of the world outside of its partnered territories. | |
The Company and Actavis are also exploring development opportunities to enhance the clinical profile of LINZESS by seeking to expand its utility in its indicated populations, as well as studying linaclotide in additional indications and populations and in new formulations to assess its potential to treat various GI conditions. In November 2014, as part of this strategy, the Company and Actavis initiated a Phase III clinical trial in the U.S. evaluating a 72 mcg dose of linaclotide in adult patients with CIC to provide a broader range of treatment options to physicians and adult CIC patients. In addition to linaclotide-based opportunities, the Company is advancing multiple GI development programs as well as further leveraging the pharmacological expertise in GC pathways that it established through the development of linaclotide, a guanylate cyclase type-C agonists, to advance a second GC program targeting soluble guanylate cyclase ("sGC"). sGC is a validated mechanism with the potential for broad therapeutic utility and multiple opportunities for product development in cardiovascular disease and other indications. | |
The Company was incorporated in Delaware on January 5, 1998 as Microbia, Inc. On April 7, 2008, the Company changed its name to Ironwood Pharmaceuticals, Inc. To date, the Company has dedicated substantially all of its activities to the research, development and commercialization of linaclotide, as well as to the research and development of its other product candidates. The Company has incurred significant operating losses since its inception in 1998. As of December 31, 2014, the Company had an accumulated deficit of approximately $967.5 million. | |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Summary of Significant Accounting Policies | |||||||||||||||||
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies | ||||||||||||||||
Principles of Consolidation | |||||||||||||||||
The accompanying consolidated financial statements include the accounts of Ironwood Pharmaceuticals, Inc. and its wholly owned subsidiaries, Ironwood Pharmaceuticals Securities Corporation and Ironwood Pharmaceuticals GmbH. All intercompany transactions and balances are eliminated in consolidation. | |||||||||||||||||
Use of Estimates | |||||||||||||||||
The preparation of consolidated financial statements in accordance with U.S. generally accepted accounting principles requires the Company's management to make estimates and judgments that may affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, the Company's management evaluates its estimates, including those related to revenue recognition, available-for-sale securities, inventory valuation and related reserves, impairment of long-lived assets, balance sheet classification of notes payable, income taxes including the valuation allowance for deferred tax assets, research and development expense, contingencies and share-based compensation. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions. Changes in estimates are reflected in reported results in the period in which they become known. | |||||||||||||||||
Cash and Cash Equivalents | |||||||||||||||||
The Company considers all highly liquid investment instruments with a remaining maturity when purchased of three months or less to be cash equivalents. Investments qualifying as cash equivalents primarily consist of money market funds and U.S. government-sponsored securities. The carrying amount of cash equivalents approximates fair value. The amount of cash equivalents included in cash and cash equivalents was approximately $61.0 million and approximately $67.3 million at December 31, 2014 and 2013, respectively. | |||||||||||||||||
Restricted Cash | |||||||||||||||||
The Company is contingently liable under unused letters of credit with a bank, related to the Company's facility lease and automobile lease agreements and credit card arrangements, in the amount of approximately $8.1 million as of December 31, 2014 and 2013. As a result, the Company has restricted cash of approximately $8.1 million as of December 31, 2014 and 2013 securing these letters of credit. The cash will be restricted until the termination of the leases and credit card arrangements. | |||||||||||||||||
Available-for-Sale Securities | |||||||||||||||||
The Company classifies all short-term investments with a remaining maturity when purchased of greater than three months as available-for-sale. Available-for-sale securities are recorded at fair value, with the unrealized gains and losses reported in other comprehensive income (loss). The amortized cost of debt securities in this category is adjusted for the amortization of premiums and accretion of discounts to maturity. Such amortization is included in interest and investment income. Realized gains and losses, interest, dividends, and declines in value judged to be other than temporary on available-for-sale securities are included in interest and investment income. | |||||||||||||||||
The cost of securities sold is based on the specific identification method for purposes of recording realized gains and losses. To determine whether an other-than-temporary impairment exists, the Company considers whether it has the ability and intent to hold the investment until a market price recovery, and whether evidence indicating the recoverability of the cost of the investment outweighs evidence to the contrary. There were no other-than-temporary impairments for the years ended December 31, 2014, 2013 and 2012. | |||||||||||||||||
Inventory | |||||||||||||||||
Inventory is stated at the lower of cost or market with cost determined under the first-in, first-out basis. | |||||||||||||||||
The Company evaluates inventory levels quarterly and any inventory that has a cost basis in excess of its expected net realizable value, inventory that becomes obsolete, inventory in excess of expected sales requirements or inventory that fails to meet commercial sale specifications is written down with a corresponding charge to cost of revenue in the period that the impairment is first identified. The Company performs quarterly reviews of its inventory for potential excess or obsolescence and relies on data from several sources to estimate its net realizable value, including partner forecasts of projected inventory purchases, the Company's internal forecasts and related process, historical sales by geographic region, and the status of and progress toward commercialization of linaclotide in partnered territories. During the year ended December 31, 2014, the Company wrote-down approximately $20.3 million in inventory to an estimated net realizable value of approximately $5.0 million. This write-down was primarily attributable to Almirall's reduced inventory demand forecasts, mainly due to the suspension of commercialization of CONSTELLA in Germany and a challenging commercial environment throughout Europe. This write-down is more fully described in Note 7, Inventory, to these consolidated financial statements. | |||||||||||||||||
The Company capitalizes inventories manufactured in preparation for initiating sales of a product candidate when the related product candidate is considered to have a high likelihood of regulatory approval and the related costs are expected to be recoverable through sales of the inventories. In determining whether or not to capitalize such inventories, the Company evaluates, among other factors, information regarding the product candidate's safety and efficacy, the status of regulatory submissions and communications with regulatory authorities and the outlook for commercial sales, including the existence of current or anticipated competitive drugs and the availability of reimbursement. In addition, the Company evaluates risks associated with manufacturing the product candidate, including the ability of the Company's third-party suppliers to complete the validation batches, and the remaining shelf life of the inventories. | |||||||||||||||||
Costs associated with developmental products prior to satisfying the inventory capitalization criteria are charged to research and development expense as incurred. | |||||||||||||||||
Concentrations of Suppliers | |||||||||||||||||
The Company relies on third-party manufacturers and its collaboration partners to manufacture the linaclotide active pharmaceutical ingredient ("API") and final linaclotide drug product. Currently, there are two third-party manufacturers approved for the production of the linaclotide API in three facilities. The Company's collaboration partners, except AstraZeneca in China, (Actavis, Almirall and Astellas) are responsible for drug product manufacturing of linaclotide into finished product for their respective territories. The Company also has an agreement with another independent third party to serve as a second source of drug product manufacturing of linaclotide for its partnered territories. If any of the Company's suppliers were to limit or terminate production or otherwise fail to meet the quality or delivery requirements needed to satisfy the supply commitments, the process of locating and qualifying alternate sources could require up to several months, during which time the Company's production could be delayed. Such delays could have a material adverse effect on the Company's business, financial position and results of operations. | |||||||||||||||||
Accounts Receivable and Related Valuation Account | |||||||||||||||||
The Company makes judgments as to its ability to collect outstanding receivables and provides an allowance for receivables when collection becomes doubtful. Provisions are made based upon a specific review of all significant outstanding invoices and the overall quality and age of those invoices not specifically reviewed. The Company's receivables primarily relate to amounts reimbursed under its collaboration and license agreements. The Company believes that credit risks associated with these collaborators are not significant. To date, the Company has not had any write-offs of bad debt, and as such, the Company did not have an allowance for doubtful accounts as of December 31, 2014 and 2013. | |||||||||||||||||
Concentrations of Credit Risk | |||||||||||||||||
Financial instruments that subject the Company to credit risk primarily consist of cash and cash equivalents, restricted cash, available-for-sale securities, and accounts receivable. The Company maintains its cash and cash equivalent balances with high-quality financial institutions and, consequently, the Company believes that such funds are subject to minimal credit risk. The Company's available-for-sale investments primarily consist of U.S. Treasury securities and certain U.S. government sponsored securities and potentially subject the Company to concentrations of credit risk. The Company has adopted an investment policy which limits the amounts the Company may invest in any one type of investment, and requires all investments held by the Company to be at least A+ rated, thereby reducing credit risk exposure. | |||||||||||||||||
Accounts receivable, including related party accounts receivable, primarily consist of amounts due under the collaboration agreement with Actavis and the license agreement with Astellas (Note 4) for which the Company does not obtain collateral. Accounts receivable or payable to or from Actavis and Almirall are presented as related party transactions on the consolidated balance sheets as both entities own common stock of the Company. | |||||||||||||||||
The percentages of revenue recognized from significant customers of the Company in the years ended December 31, 2014, 2013 and 2012 as well as the account receivable balances, net of any payables due, at December 31, 2014 and 2013 are included in the following table: | |||||||||||||||||
Accounts Receivable | Revenue | ||||||||||||||||
December 31, | Years Ended December 31, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2012 | |||||||||||||
Collaborative Partner: | |||||||||||||||||
Actavis | 100 | % | 84 | % | 62 | % | 13 | % | 67 | % | |||||||
Almirall | — | % | — | % | 10 | % | 57 | % | 14 | % | |||||||
Astellas | — | % | 16 | % | 23 | % | 25 | % | 3 | % | |||||||
AstraZeneca | — | % | — | % | 5 | % | 5 | % | 16 | % | |||||||
As of December 31, 2014 and 2013, the Company was in a net payable position with AstraZeneca; as such, there was no accounts receivable due from AstraZeneca as of December 31, 2014 or 2013. For the years ended December 31, 2014, 2013 and 2012, no additional customers accounted for more than 10% of the Company's revenue. | |||||||||||||||||
Revenue Recognition | |||||||||||||||||
The Company's revenue is generated primarily through collaborative research and development and licensing agreements. The terms of these agreements contain multiple deliverables which may include (i) licenses, (ii) research and development activities, including participation on joint steering committees, and (iii) the manufacture of finished drug product, API, or development materials for the collaborative partner which are reimbursed at a contractually determined rate. Non-refundable payments to the Company under these agreements may include (i) up-front license fees, (ii) payments for research and development activities, (iii) payments for the manufacture of finished drug product, API, or development materials, (iv) payments based upon the achievement of certain milestones, and (v) royalties on product sales. Additionally, the Company may receive its share of the net profits or bear its share of the net losses from the sale of linaclotide in the U.S. and China through its collaborations with Actavis and AstraZeneca, respectively. | |||||||||||||||||
At December 31, 2014, the Company had collaboration agreements with Actavis and AstraZeneca and license agreements with Almirall and Astellas. Refer to Note 4, "Collaboration and License Agreements," for additional discussion of these agreements. | |||||||||||||||||
The Company recognizes revenue when there is persuasive evidence that an arrangement exists, services have been rendered or delivery has occurred, the price is fixed or determinable, and collection is reasonably assured. | |||||||||||||||||
For certain of our arrangements, particularly the license agreement with Almirall, it is required that taxes be withheld on payments to the Company. The Company has adopted a policy to recognize revenue net of these tax withholdings. | |||||||||||||||||
Agreements Entered into Prior to January 1, 2011 | |||||||||||||||||
For arrangements that include multiple deliverables and were entered into prior to January 1, 2011, the Company follows the provisions of the Accounting Standards Codification ("ASC") Topic 605-25, Revenue Recognition—Multiple-Element Arrangements ("ASC 605-25"), in accounting for these agreements. Under ASC 605-25, the Company was required to identify the deliverables included within the agreement and evaluate which deliverables represent separate units of accounting. Collaborative research and development and licensing agreements that contained multiple deliverables were divided into separate units of accounting when the following criteria were met: | |||||||||||||||||
• | Delivered element(s) had value to the collaborator on a standalone basis, | ||||||||||||||||
• | There was objective and reliable evidence of the fair value of the undelivered obligation(s), and | ||||||||||||||||
• | If the arrangement included a general right of return relative to the delivered item(s), delivery or performance of the undelivered item(s) was considered probable and substantially within the Company's control. | ||||||||||||||||
The Company allocated arrangement consideration among the separate units of accounting either on the basis of each unit's respective fair value or using the residual method, and applied the applicable revenue recognition criteria to each of the separate units. If the separation criteria were not met, revenue of the combined unit of accounting was recorded based on the method appropriate for the last delivered item. | |||||||||||||||||
Up-Front License Fees | |||||||||||||||||
The Company recognizes revenue from nonrefundable, up-front license fees on a straight-line basis over the contracted or estimated period of performance, which is typically the period over which the research and development is expected to occur or manufacturing services are expected to be provided. Accordingly, the Company is required to make estimates regarding the drug development and commercialization timelines for drugs and drug candidates being developed pursuant to the applicable agreement. The determination of the length of the period over which to recognize the revenue is subject to judgment and estimation and can have an impact on the amount of revenue recognized in a given period. Quarterly, the Company reassesses its period of substantial involvement over which the Company amortizes its up-front license fees and makes adjustments as appropriate. The Company's estimates regarding the period of performance under its collaborative research and development and licensing agreements have changed in the past and may change in the future. In the event that a license were to be terminated, the Company would recognize as revenue any portion of the up-front fee that had not previously been recorded as revenue, but was classified as deferred revenue at the date of such termination. At December 31, 2014, only a portion of Astellas' up-front license fee remains deferred as the period of performance under the Actavis and Almirall arrangements ended in the quarter ended September 30, 2012. | |||||||||||||||||
Agreements Entered into or Materially Modified on or after January 1, 2011 | |||||||||||||||||
The Company evaluates revenue from new multiple element agreements entered into on or after January 1, 2011 under ASU No. 2009-13, Multiple-Deliverable Revenue Arrangements ("ASU 2009-13"). The Company also evaluates whether amendments to its multiple element arrangements are considered material modifications that are subject to the application of ASU 2009-13. This evaluation requires management to assess all relevant facts and circumstances and to make subjective determinations and judgments. As part of this assessment, the Company considers whether the modification results in a material change to the arrangement, including whether there is a change in total arrangement consideration that is more than insignificant, whether there are changes in the deliverables included in the arrangement, whether there is a change in the term of the arrangement and whether there is a significant modification to the delivery schedule for contracted deliverables. | |||||||||||||||||
When evaluating multiple element arrangements under ASU 2009-13, the Company considers whether the deliverables under the arrangement represent separate units of accounting. This evaluation requires subjective determinations and requires management to make judgments about the individual deliverables and whether such deliverables are separable from the other aspects of the contractual relationship. In determining the units of accounting, management evaluates certain criteria, including whether the deliverables have standalone value, based on the consideration of the relevant facts and circumstances for each arrangement. Factors considered in this determination include the research, manufacturing and commercialization capabilities of the partner and the availability of peptide research and manufacturing expertise in the general marketplace. In addition, the Company considers whether the collaborator can use the license or other deliverables for their intended purpose without the receipt of the remaining elements, and whether the value of the deliverable is dependent on the undelivered items and whether there are other vendors that can provide the undelivered items. | |||||||||||||||||
The consideration received is allocated among the separate units of accounting using the relative selling price method, and the applicable revenue recognition criteria are applied to each of the separate units. | |||||||||||||||||
The Company determines the estimated selling price for deliverables using vendor-specific objective evidence ("VSOE") of selling price, if available, third-party evidence ("TPE") of selling price if VSOE is not available, or best estimate of selling price ("BESP") if neither VSOE nor TPE is available. Determining the BESP for a deliverable requires significant judgment. The Company uses BESP to estimate the selling price for licenses to the Company's proprietary technology, since the Company often does not have VSOE or TPE of selling price for these deliverables. In those circumstances where the Company utilizes BESP to determine the estimated selling price of a license to the Company's proprietary technology, the Company considers market conditions as well as entity-specific factors, including those factors contemplated in negotiating the agreements as well as internally developed models that include assumptions related to the market opportunity, estimated development costs, probability of success and the time needed to commercialize a product candidate pursuant to the license. In validating the Company's BESP, the Company evaluates whether changes in the key assumptions used to determine the BESP will have a significant effect on the allocation of arrangement consideration between multiple deliverables. | |||||||||||||||||
At December 31, 2014, the Company has one collaboration agreement with AstraZeneca that is being accounted for under ASU 2009-13. | |||||||||||||||||
Up-Front License Fees | |||||||||||||||||
When management believes the license to its intellectual property has stand-alone value, the Company generally recognizes revenue attributed to the license upon delivery. When management believes the license to its intellectual property does not have stand-alone value from the other deliverables to be provided in the arrangement, it is combined with other deliverables and the revenue of the combined unit of accounting is recorded based on the method appropriate for the last delivered item. | |||||||||||||||||
Milestones | |||||||||||||||||
At the inception of each arrangement that includes pre-commercial milestone payments, the Company evaluates whether each pre-commercial milestone is substantive, in accordance with ASU No. 2010-17, Revenue Recognition—Milestone Method ("ASU 2010-17"), adopted on January 1, 2011. This evaluation includes an assessment of whether (a) the consideration is commensurate with either (1) the entity's performance to achieve the milestone, or (2) the enhancement of the value of the delivered item(s) as a result of a specific outcome resulting from the entity's performance to achieve the milestone, (b) the consideration relates solely to past performance and (c) the consideration is reasonable relative to all of the deliverables and payment terms within the arrangement. The Company evaluates factors such as the scientific, clinical, regulatory, commercial and other risks that must be overcome to achieve the respective milestone, the level of effort and investment required and whether the milestone consideration is reasonable relative to all deliverables and payment terms in the arrangement in making this assessment. At December 31, 2014, the Company had no pre-commercial milestones that were deemed substantive. If a substantive pre-commercial milestone is achieved and collection of the related receivable is reasonably assured, the Company recognizes revenue related to the milestone in its entirety in the period in which the milestone is achieved. If the Company were to achieve milestones that are considered substantive under any of the Company's collaborations, the Company may experience significant fluctuations in collaborative arrangements revenue from quarter to quarter and year to year depending on the timing of achieving such substantive milestones. In those circumstances where a pre-commercial milestone is not substantive, the Company recognizes as revenue on the date the milestone is achieved an amount equal to the applicable percentage of the performance period that had elapsed as of the date the milestone was achieved, with the balance being deferred and recognized over the remaining period of performance. Pre-commercial milestone payments received prior to the adoption of ASU 2010-17 continue to be recognized over the remaining period of performance. | |||||||||||||||||
Commercial milestones are accounted for as royalties and are recorded as revenue upon achievement of the milestone, assuming all other revenue recognition criteria are met. | |||||||||||||||||
Net Profit or Net Loss Sharing | |||||||||||||||||
In accordance with ASC 808 Topic, Collaborative Arrangements, and ASC 605-45, Principal Agent Considerations, the Company considers the nature and contractual terms of the arrangement and the nature of the Company's business operations to determine the classification of the transactions under the Company's collaboration agreements. The Company records revenue transactions gross in the consolidated statements of operations if it is deemed the principal in the transaction, which includes being the primary obligor and having the risks and rewards of ownership. | |||||||||||||||||
The Company recognizes its share of the pre-tax commercial net profit or net loss generated from the sales of LINZESS in the U.S. in the period the product sales are reported by Actavis and related cost of goods sold and selling, general and administrative expenses are incurred by the Company and its collaboration partner. These amounts are partially determined based on amounts provided by Actavis and involve the use of estimates and judgments, such as product sales allowances and accruals related to prompt payment discounts, chargebacks, governmental and contractual rebates, wholesaler fees, product returns, and co-payment assistance costs, which could be adjusted based on actual results in the future. The Company is highly dependent on Actavis for timely and accurate information regarding any net revenues realized from sales of LINZESS and the costs incurred in selling it, in order to accurately report its results of operations. For the periods covered in the consolidated financial statements presented, there have been no material changes to prior period estimates of revenues, cost of goods sold or selling, general and administrative expenses associated with the sales of LINZESS in the U.S. However, if the Company does not receive timely and accurate information or incorrectly estimates activity levels associated with the collaboration at a given point in time, the Company could be required to record adjustments in future periods. | |||||||||||||||||
The Company records its share of the net profits or net losses from the sales of LINZESS in the U.S. on a net basis and presents the settlement payments to and from Actavis as collaboration expense or collaborative arrangements revenue, as applicable, as the Company is not the primary obligor and does not have the risks and rewards of ownership in the collaboration agreement with Actavis. The Company and Actavis settle the cost sharing quarterly, such that the Company's statement of operations reflects 50% of the pre-tax net profit or loss generated from sales of LINZESS in the U.S. Prior to the fourth quarter of 2012, selling, general and administrative cost-sharing payments were presented within selling, general and administrative expenses. The cost-sharing payments to Actavis for the nine months ended September 30, 2012 were reclassified to conform to the current period's presentation. | |||||||||||||||||
Royalties on Product Sales | |||||||||||||||||
The Company receives or expects to receive in the future royalty revenues under certain of the Company's license or collaboration agreements. If the Company does not have any future performance obligations under these license or collaborations agreements, the Company records these revenues as earned. To the extent the Company does not have access to the royalty reports from the Company's partners or the ability to accurately estimate the royalty revenue in the period earned, the Company records such royalty revenues one quarter in arrears. | |||||||||||||||||
Other | |||||||||||||||||
The Company produces finished drug product, API and development materials for certain of its collaborators. The Company recognizes revenue on finished drug product, API and development materials when the material has passed all quality testing required for collaborator acceptance, delivery has occurred, title and risk of loss have transferred to the collaborator, the price is fixed or determinable, and collection is reasonably assured. As it relates to development materials and API produced for Almirall and Astellas, the Company is reimbursed at a contracted rate. Such reimbursements are considered as part of revenue generated pursuant to the Almirall and Astellas license agreements and are presented as collaborative arrangements revenue. Any finished drug product, API and development materials currently produced for Actavis or AstraZeneca are recognized in accordance with the cost-sharing provisions of the Actavis and AstraZeneca collaboration agreements, respectively. | |||||||||||||||||
Cost of Revenue | |||||||||||||||||
Cost of revenue is recognized upon shipment of linaclotide API to certain of the Company's licensing partners outside of the U.S. and consists of the internal and external costs of producing such API. The costs of API were primarily recorded as research and development expenses in the periods prior to July 1, 2012. In the third quarter of 2012, the Company began capitalizing inventory costs for linaclotide API manufactured in preparation for its launch of linaclotide in the U.S. and Europe based on its evaluation of, among other factors, the status of the LINZESS New Drug Applications ("NDAs") in the U.S., the Committee for Medicinal Products for Human Use positive recommendation to grant marketing approval for CONSTELLA in the E.U., and the ability of the Company's third-party suppliers to successfully manufacture commercial quantities of linaclotide API, which provided the Company with reasonable assurance that the net realizable value of the inventory would be recoverable. As of December 31, 2012, the previously expensed commercial API inventory was substantially utilized. | |||||||||||||||||
During the year ending December 31, 2014, the Company wrote-down approximately $20.3 million in inventory to an estimated net realizable value of approximately $5.0 million. This write-down was primarily attributable to Almirall's reduced inventory demand forecasts, mainly due to the suspension of commercialization of CONSTELLA in Germany and a challenging commercial environment throughout Europe. This write-down is more fully described in Note 7, Inventory, to these consolidated financial statements. | |||||||||||||||||
Research and Development Costs | |||||||||||||||||
The Company expenses research and development costs to operations as incurred. The Company defers and capitalizes nonrefundable advance payments made by the Company for research and development activities until the related goods are received or the related services are performed. | |||||||||||||||||
Research and development expenses are comprised of costs incurred in performing research and development activities, including salary, benefits and other employee-related expenses; share-based compensation expense; laboratory supplies and other direct expenses; facilities expenses; overhead expenses; third-party contractual costs relating to nonclinical studies and clinical trial activities and related contract manufacturing expenses, development of manufacturing processes and regulatory registration of third-party manufacturing facilities; costs associated with linaclotide API prior to the Company concluding that regulatory approval is probable and that its net realizable value is recoverable; licensing fees for our product candidates; and other outside expenses. | |||||||||||||||||
The Company has entered into collaboration agreements with Actavis and AstraZeneca pursuant to which it shares research and development expenses with the collaborators. The Company records expenses incurred under the collaboration arrangements for such work as research and development expense. Because the collaboration arrangements are cost-sharing arrangements, the Company concluded that when there is a period during the collaboration arrangements during which the Company receives payments from Actavis or AstraZeneca, the Company records the payments by Actavis or AstraZeneca for their share of the development effort as a reduction of research and development expense. Payments to Actavis or AstraZeneca are recorded as incremental research and development expense. | |||||||||||||||||
Selling, General and Administrative Expenses | |||||||||||||||||
The Company expenses selling, general and administrative costs to operations as incurred. Selling, general and administrative expense consists primarily of compensation, benefits and other employee-related expenses for personnel in our administrative, finance, legal, information technology, business development, commercial, sales, marketing, communications and human resource functions. Other costs include the legal costs of pursuing patent protection of the Company's intellectual property, general and administrative related facility costs and professional fees for accounting and legal services. | |||||||||||||||||
Under the Actavis and AstraZeneca collaboration agreements, the Company is reimbursed for certain selling, general and administrative expenses and it nets these reimbursements against selling, general and administrative expenses as incurred. Payments to Actavis or AstraZeneca are recorded as incremental selling, general and administrative expense. | |||||||||||||||||
Beginning in the fourth quarter of 2012, the Company includes Actavis' selling, general and administrative cost-sharing payments in the calculation of the net profits and net losses from the sale of LINZESS in the U.S. and presents the net payment to or from Actavis as collaboration expense or collaborative arrangements revenue, as applicable. The selling, general and administrative cost-sharing payments to Actavis for the nine months ended September 30, 2012 were reclassified to conform to the current presentation. | |||||||||||||||||
Share-Based Compensation | |||||||||||||||||
The Company's stock-based compensation programs grant awards which have included stock awards, restricted stock, and stock options. Share-based compensation is recognized as an expense in the financial statements based on the grant date fair value over the requisite service period. For awards that vest based on service conditions, the Company uses the straight-line method to allocate compensation expense to reporting periods. The grant date fair value of options granted is calculated using the Black-Scholes option-pricing model, which requires the use of subjective assumptions including volatility and expected term, among others. | |||||||||||||||||
The Company records the expense for stock option grants subject to performance-based milestone vesting using the accelerated attribution method over the remaining service period when management determines that achievement of the milestone is probable. Management evaluates when the achievement of a performance-based milestone is probable based on the relative satisfaction of the performance conditions as of the reporting date. | |||||||||||||||||
The Company records the expense of services rendered by non-employees based on the estimated fair value of the stock option using the Black-Scholes option-pricing model. The fair value of unvested non-employee awards is remeasured at each reporting period and expensed over the vesting term of the underlying stock options. | |||||||||||||||||
During the quarter ended March 31, 2014, the Company transitioned from a "simplified method" to the use of its historical data when estimating the expected term of stock option grants for purposes of determining stock-based compensation expense. This change did not have a significant impact on the Company's financial position or results of operations for the year ended December 31, 2014. | |||||||||||||||||
Patent Costs | |||||||||||||||||
The Company incurred and recorded as operating expense legal and other fees related to patents of approximately $1.3 million, approximately $3.2 million, and approximately $3.5 million for the years ended December 31, 2014, 2013 and 2012, respectively. These costs were charged to selling, general and administrative expenses as incurred. | |||||||||||||||||
Net Income (Loss) Per Share | |||||||||||||||||
The Company calculates basic net income (loss) per common share and diluted net loss per common share by dividing the net income (loss) by the weighted average number of common shares outstanding during the period. Diluted net income per common share is computed by dividing net income by the diluted number of shares outstanding during the period. Except where the result would be antidilutive to net income, diluted net income per share is computed assuming the exercise of common stock options and the vesting of restricted stock (using the treasury stock method), as well as their related income tax effects. The Company allocates undistributed earnings between the classes on a one-to-one basis when computing net income (loss) per share. As a result, basic and diluted net income (loss) per Class A and Class B shares are equivalent. | |||||||||||||||||
Property and Equipment | |||||||||||||||||
Property and equipment, including leasehold improvements, are recorded at cost, and are depreciated when placed into service using the straight-line method based on their estimated useful lives as follows: | |||||||||||||||||
Asset Description | Estimated Useful Life | ||||||||||||||||
(In Years) | |||||||||||||||||
Manufacturing equipment | 10 | ||||||||||||||||
Laboratory equipment | 5 | ||||||||||||||||
Computer and office equipment | 3 | ||||||||||||||||
Furniture and fixtures | 7 | ||||||||||||||||
Software | 3 | ||||||||||||||||
Included in property and equipment are certain costs of software obtained for internal use. Costs incurred during the preliminary project stage are expensed as incurred, while costs incurred during the application development stage are capitalized and amortized over the estimated useful life of the software. The Company also capitalizes costs related to specific upgrades and enhancements when it is probable the expenditures will result in additional functionality. Maintenance and training costs related to software obtained for internal use are expensed as incurred. | |||||||||||||||||
Leasehold improvements are amortized over the shorter of the estimated useful life of the asset or the lease term. Capital lease assets are amortized over the lease term. However, if ownership was transferred by the end of the capital lease, or there was a bargain purchase option, such capital lease assets would be amortized over the useful life that would be assigned if such assets were owned. | |||||||||||||||||
Costs for capital assets not yet placed into service have been capitalized as construction in progress, and will be depreciated in accordance with the above guidelines once placed into service. Maintenance and repair costs are expensed as incurred. | |||||||||||||||||
Income Taxes | |||||||||||||||||
The Company provides for income taxes under the liability method. Deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates in effect when the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to reflect the uncertainty associated with their ultimate realization. | |||||||||||||||||
The Company accounts for uncertain tax positions recognized in the consolidated financial statements by prescribing a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. | |||||||||||||||||
Impairment of Long-Lived Assets | |||||||||||||||||
The Company regularly reviews the carrying amount of its long-lived assets to determine whether indicators of impairment may exist, which warrant adjustments to carrying values or estimated useful lives. If indications of impairment exist, projected future undiscounted cash flows associated with the asset are compared to the carrying amount to determine whether the asset's value is recoverable. If the carrying value of the asset exceeds such projected undiscounted cash flows, the asset will be written down to its estimated fair value. There were no significant impairments of long-lived assets for the years ended December 31, 2014, 2013 or 2012. | |||||||||||||||||
Comprehensive Income (Loss) | |||||||||||||||||
Comprehensive income (loss) is defined as the change in equity of a business enterprise during a period from transactions, and other events and circumstances from non-owner sources and currently consists of net loss and changes in unrealized gains and losses on available-for-sale securities. | |||||||||||||||||
Segment Information | |||||||||||||||||
Operating segments are components of an enterprise for which separate financial information is available and is evaluated regularly by the Company's chief operating decision-maker in deciding how to allocate resources and in assessing performance. The Company currently operates in one reportable business segment—human therapeutics. | |||||||||||||||||
Subsequent Events | |||||||||||||||||
The Company considers events or transactions that have occurred after the balance sheet date of December 31, 2014, but prior to the filing of the financial statements with the Securities and Exchange Commission to provide additional evidence relative to certain estimates or to identify matters that require additional recognition or disclosure. Subsequent events have been evaluated through the filing of the financial statements accompanying this Annual Report on Form 10-K. | |||||||||||||||||
New Accounting Pronouncements | |||||||||||||||||
From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board ("FASB") or other standard setting bodies that are adopted by the Company as of the specified effective date. The Company did not adopt any new accounting pronouncements during the year ended December 31, 2014 that had a material effect on its consolidated financial statements. | |||||||||||||||||
In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"), which supersedes the revenue recognition requirements in Accounting Standards Codification Topic 605, Revenue Recognition, and most industry-specific guidance. The new standard requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The update also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016 and should be applied retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying this update recognized at the date of initial application. The Company is currently evaluating the potential impact that ASU 2014-09 may have on its financial position and results of operations. | |||||||||||||||||
No other accounting standards known by the Company to be applicable to it that have been issued or proposed by the FASB or other standard-setting bodies and that do not require adoption until a future date are expected to have a material impact on the Company's consolidated financial statements upon adoption. | |||||||||||||||||
Net_Loss_Per_Share
Net Loss Per Share | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Net Loss Per Share | |||||||||||
Net Loss Per Share | |||||||||||
3. Net Loss Per Share | |||||||||||
The following table sets forth the computation of basic and diluted net loss per share (in thousands, except per share amounts): | |||||||||||
Years Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Numerator: | |||||||||||
Net loss | $ | (189,618 | ) | $ | (272,812 | ) | $ | (72,624 | ) | ||
Denominator: | |||||||||||
Weighted average number of common shares used in net loss per share—basic and diluted | 136,811 | 115,852 | 106,403 | ||||||||
| | | | | | | | | | | |
Net loss per share—basic and diluted | $ | (1.39 | ) | $ | (2.35 | ) | $ | (0.68 | ) | ||
| | | | | | | | | | | |
| | | | | | | | | | | |
The following potentially dilutive securities have been excluded from the computation of diluted weighted average shares outstanding as they would be anti-dilutive (in thousands): | |||||||||||
Years Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Options to purchase common stock | 19,958 | 20,928 | 19,540 | ||||||||
Shares subject to repurchase | 99 | — | 80 | ||||||||
| | | | | | | | | | | |
20,057 | 20,928 | 19,620 | |||||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
The number of shares issuable under the Company's employee stock purchase plan that were excluded from the calculation of diluted weighted average shares outstanding because their effects would be anti-dilutive was insignificant. | |||||||||||
Collaboration_and_License_Agre
Collaboration and License Agreements | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Collaboration and License Agreements | |||||||||||
Collaboration and License Agreements | |||||||||||
4. Collaboration and License Agreements | |||||||||||
At December 31, 2014, the Company had collaboration agreements with Actavis and AstraZeneca, and license agreements with Almirall and Astellas. The following table provides amounts by year included in our consolidated statements of operations as Collaborative arrangements revenue attributable to transactions from these collaborative and license arrangements (in thousands): | |||||||||||
Collaborative Arrangements | |||||||||||
Revenue | |||||||||||
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Actavis plc | $ | 47,682 | $ | 2,957 | $ | 100,442 | |||||
AstraZeneca AB | 3,417 | 1,044 | 24,710 | ||||||||
Almirall, S.A. | 7,587 | 13,103 | 21,205 | ||||||||
Astellas Pharma Inc. | 17,750 | 5,777 | 3,888 | ||||||||
| | | | | | | | | | | |
Total collaborative arrangements revenue | $ | 76,436 | $ | 22,881 | $ | 150,245 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Actavis plc | |||||||||||
In September 2007, the Company entered into a collaboration agreement with Forest to develop and commercialize linaclotide for the treatment of IBS-C, CIC and other GI conditions in North America. In July 2014, Actavis completed its acquisition of Forest. The collaboration between the companies for the development and commercialization of linaclotide in North America remains in effect. Under the terms of this collaboration agreement, the Company shares equally with Actavis all development costs as well as net profits or losses from the development and sale of linaclotide in the U.S. The Company receives royalties in the mid-teens percent based on net sales in Canada and Mexico. Actavis is solely responsible for the further development, regulatory approval and commercialization of linaclotide in those countries and funding any costs. In September 2012, Actavis sublicensed its commercialization rights in Mexico to Almirall. Actavis made non-refundable, up-front payments totaling $70.0 million to the Company in order to obtain rights to linaclotide in North America. Because the license to jointly develop and commercialize linaclotide did not have a standalone value without research and development activities provided by the Company, the Company recorded the up-front license fee as collaborative arrangements revenue on a straight-line basis through September 30, 2012, the period over which linaclotide was jointly developed under the collaboration. The collaboration agreement also includes contingent milestone payments, as well as a contingent equity investment, based on the achievement of specific development and commercial milestones. At December 31, 2014, $205.0 million in license fees and development milestone payments had been received by the Company, as well as a $25.0 million equity investment in the Company's capital stock. The Company can also achieve up to $100.0 million in a sales related milestone if certain conditions are met. | |||||||||||
The collaboration agreement included a contingent equity investment, in the form of a forward purchase contract, which required Actavis to purchase shares of the Company's convertible preferred stock upon achievement of a specific development milestone. At the inception of the arrangement, the Company valued the contingent equity investment and recorded an approximately $9.0 million asset and incremental deferred revenue. The $9.0 million of incremental deferred revenue was recognized as collaborative arrangements revenue on a straight-line basis over the period of the Company's continuing involvement through September 30, 2012. In July 2009, the Company achieved the development milestone triggering the equity investment and reclassified the forward purchase contract as a reduction to convertible preferred stock. On September 1, 2009, the Company issued 2,083,333 shares of convertible preferred stock to Actavis (Note 16). | |||||||||||
The Company achieved all six development milestones under this agreement. In September 2008 and July 2009, the Company achieved development milestones which triggered $10.0 million and $20.0 million milestone payments, respectively. These development milestones were recognized as collaborative arrangements revenue through September 2012. In October 2011, the Company achieved two development milestones upon the FDA's acceptance of the linaclotide NDA for both IBS-C and CIC in adults and received milestone payments totaling $20.0 million from Actavis. In August 2012, the Company achieved two additional development milestones upon the FDA's approval of the linaclotide NDAs for both IBS-C and CIC in adults and received milestone payments totaling $85.0 million from Actavis in September 2012, accordingly. In accordance with ASU 2010-17, these four development milestones were recognized as collaborative arrangements revenue in their entirety upon achievement. The remaining milestone payment that could be received from Actavis upon the achievement of sales targets will be recognized as collaborative arrangements revenue as earned. | |||||||||||
As a result of the research and development cost-sharing provisions of the collaboration, the Company offset approximately $4.3 million against research and development costs during the year ended December 31, 2014. The Company recognized approximately $2.2 million and approximately $2.1 million in incremental research and development costs during the years ended December 31, 2013 and 2012, respectively, to reflect its obligation under the collaboration to bear half of the development costs incurred by both parties. | |||||||||||
The Company receives 50% of the net profits and bears 50% of the net losses from the commercial sale of LINZESS in the U.S.; provided, however, that if either party provides fewer calls on physicians in a particular year than it is contractually required to provide, such party's share of the net profits will be adjusted as stipulated by the collaboration agreement. Net profits or net losses consist of net sales to third-party customers and sublicense income in the U.S. less cost of goods sold as well as selling, general and administrative expenses. Net sales are calculated and recorded by Actavis and may include gross sales net of discounts, rebates, allowances, sales taxes, freight and insurance charges, and other applicable deductions. The Company records its share of the net profits or net losses from the sale of LINZESS on a net basis and presents the settlement payments to and from Actavis as collaboration expense or collaborative arrangements revenue, as applicable. The Company and Actavis began commercializing LINZESS in the U.S. in December 2012. | |||||||||||
The Company recognized collaborative arrangements revenue from the Actavis collaboration agreement during the years ended December 31, 2014, 2013 and 2012 as follows (in thousands): | |||||||||||
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Collaborative arrangements revenue related to sales of LINZESS(1)(2) | $ | 47,618 | $ | 2,914 | $ | — | |||||
Royalty revenue | 64 | — | — | ||||||||
Pre-commercial collaborative arrangements revenue | — | — | 100,442 | ||||||||
Sale of API | — | 43 | — | ||||||||
| | | | | | | | | | | |
Total collaborative arrangements revenue | $ | 47,682 | $ | 2,957 | $ | 100,442 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
The collaborative arrangements revenue recognized in the years ended December 31, 2014 and 2013 primarily represents the Company's share of the net profits and net losses on the sale of LINZESS in the U.S. The collaborative arrangements revenue recognized in the year ended December 31, 2012 is related to the pre-commercial milestones earned. | |||||||||||
The following table presents the amounts recorded by the Company for commercial efforts related to LINZESS in the years ended December 31, 2014, 2013 and 2012 (in thousands): | |||||||||||
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Collaborative arrangements revenue(1)(2) | $ | 47,618 | $ | 2,914 | $ | — | |||||
Collaboration expense | — | (42,074 | ) | (16,030 | ) | ||||||
Selling, general and administrative costs incurred by the Company(1) | (31,646 | ) | (33,839 | ) | (5,092 | ) | |||||
| | | | | | | | | | | |
The Company's share of net profit (loss) | $ | 15,972 | $ | (72,999 | ) | $ | (21,122 | ) | |||
| | | | | | | | | | | |
| | | | | | | | | | | |
-1 | Includes only collaborative arrangement revenue or selling, general and administrative costs attributable to the cost-sharing arrangement with Actavis. | ||||||||||
-2 | Includes net profit share adjustments of approximately $1.7 million recorded during the year ended December 31, 2014, as described above. | ||||||||||
In May 2014, Actavis began commercializing CONSTELLA in Canada and in June 2014, Almirall began commercializing LINZESS in Mexico. The Company records royalties on sales of CONSTELLA in Canada and LINZESS in Mexico one quarter in arrears as it does not have access to the royalty reports from its partners or the ability to estimate the royalty revenue in the period earned. The Company recognized approximately $0.1 million of royalty revenues in Canada and Mexico during the year ended December 31, 2014. | |||||||||||
Almirall, S.A. | |||||||||||
In April 2009, the Company entered into a license agreement with Almirall to develop and commercialize linaclotide in Europe (including the Commonwealth of Independent States and Turkey) for the treatment of IBS-C, CIC and other GI conditions. Under the terms of the license agreement, Almirall is responsible for the expenses associated with the development and commercialization of linaclotide in the European territory and the Company is required to participate on a joint development committee over linaclotide's development period and a joint commercialization committee while the product is being commercialized. | |||||||||||
In May 2009, the Company received an approximately $38.0 million payment from Almirall representing a $40.0 million non-refundable up-front payment net of foreign withholding taxes. The Company elected to record the non-refundable up-front payment net of taxes withheld. The Company recognized the up-front license fee as collaborative arrangements revenue on a straight-line basis through September 30, 2012, the period over which linaclotide was developed under the license agreement. | |||||||||||
The license agreement also included a $15.0 million contingent equity investment, in the form of a forward purchase contract, which required Almirall to purchase shares of the Company's convertible preferred stock upon achievement of a specific development milestone. At the inception of the arrangement, the Company valued the contingent equity investment and recorded an approximately $6.0 million asset and incremental deferred revenue. The $6.0 million of incremental deferred revenue was recognized as collaborative arrangements revenue through September 2012. In November 2009, the Company achieved the development milestone triggering the equity investment and reclassified the forward purchase contract as a reduction to convertible preferred stock. On November 13, 2009, the Company received $15.0 million from Almirall for the purchase of 681,819 shares of convertible preferred stock (Note 16). | |||||||||||
The original license agreement also included contingent milestone payments that could total up to $40.0 million upon achievement of specific development and commercial launch milestones. In November 2010, the Company achieved a development milestone, which resulted in an approximately $19.0 million payment, representing a $20.0 million milestone, net of foreign withholding taxes. This development milestone was recognized as collaborative arrangements revenue through September 2012. Commercial milestone payments under the original license agreement consisted of $4.0 million due upon the first commercial launch in each of the five major E.U. countries set forth in the agreement. | |||||||||||
In June 2013 and February 2014, the Company and Almirall amended the original license agreement. Pursuant to the terms of the amendments, (i) the commercial launch milestones were reduced to $17.0 million; (ii) new sales-based milestone payments were added to the agreement; and (iii) the escalating royalties based on sales of linaclotide were modified such that they begin in the low-twenties percent and escalate to the mid-forties percent through April 2017, and thereafter begin in the mid-twenties percent and escalate to the mid-forties percent at lower sales thresholds. In each case, these royalty payments are reduced by the transfer price paid for the API included in the product actually sold in the Almirall territory and other contractual deductions. The Company concluded that the amendments were a material modification under Accounting Standard Update No. 2009-13, Multiple-Deliverable Revenue Arrangements ("ASU No. 2009-13"), but the modification did not have a material impact on the Company's consolidated financial statements. The commercial launch and sales-based milestones are recognized as revenue as earned. The Company records royalties on sales of CONSTELLA one quarter in arrears as it does not have access to the royalty reports from Almirall or the ability to estimate the royalty revenue in the period earned. | |||||||||||
During the second quarter of 2013, the Company achieved two milestones under the amended Almirall license agreement, which resulted in payments of approximately $1.9 million from Almirall to the Company related to the commercial launches in two of the five major E.U. countries, the United Kingdom and Germany. The approximately $1.9 million payment represented the two $1.0 million milestones, net of foreign tax withholdings. During the first and second quarters of 2014, the Company achieved two milestones under the amended Almirall license agreement triggering payments of approximately $1.0 million each related to the commercial launches in two additional major E.U. countries, Italy and Spain. Each approximately $1.0 million payment represents the $1.0 million milestone, net of foreign tax withholdings. | |||||||||||
The Company recognized approximately $7.6 million in total collaborative arrangements revenue from the Almirall license agreement during the year ended December 31, 2014, including approximately $5.1 million from the sale of API to Almirall, approximately $1.9 million in commercial launch milestones, and approximately $0.6 million in royalty revenue. The Company recognized approximately $13.1 million in total collaborative arrangements revenue from the Almirall license agreement during the year ended December 31, 2013, including approximately $11.1 million from the sale of API to Almirall, approximately $0.2 million in royalty revenue and approximately $1.9 million in commercial launch milestones. The Company recognized approximately $21.2 million in total collaborative arrangements revenue from the Almirall license agreement during the year ended December 31, 2012, including approximately $3.5 million from the sale of API to Almirall, and approximately $17.7 million related to the recognition of the up-front payment, equity investment and a development milestone, each as described above. | |||||||||||
Astellas Pharma Inc. | |||||||||||
In November 2009, the Company entered into a license agreement with Astellas to develop and commercialize linaclotide for the treatment of IBS-C, CIC and other GI conditions in Japan, South Korea, Taiwan, Thailand, the Philippines and Indonesia. As a result of an amendment executed in March 2013, the Company regained rights to linaclotide in South Korea, Taiwan, Thailand, the Philippines and Indonesia. The Company concluded that the amendment was not a material modification of the license agreement. Astellas continues to be responsible for all activities relating to development, regulatory approval and commercialization in Japan as well as funding any costs and the Company is required to participate on a joint development committee over linaclotide's development period. | |||||||||||
In 2009, Astellas paid the Company a non-refundable, up-front licensing fee of $30.0 million, which is being recognized as collaborative arrangements revenue on a straight-line basis over the Company's estimate of the period over which linaclotide will be developed under the license agreement. In March 2013, the Company revised its estimate of the development period from 115 months to 85 months based on the Company's assessment of regulatory approval timelines for Japan. This resulted in the recognition of an additional approximately $1.9 million and approximately $1.5 million of revenue in the years ended December 31, 2014 and 2013, respectively. | |||||||||||
The agreement also includes three additional development milestone payments that could total up to $45.0 million, none of which the Company considers substantive. The first milestone payment consists of $15.0 million upon enrollment of the first study subject in a Phase III study for linaclotide in Japan, which was achieved in November 2014 and for which $10.2 million was recognized as revenue during the quarter ended December 31, 2014. The remaining $4.8 million of this milestone payment will be recognized over the remaining development period. The two additional milestone payments consist of $15.0 million upon filing of the Japanese equivalent of an NDA with the relevant regulatory authority in Japan and $15.0 million upon approval of such equivalent by the relevant regulatory authority. In addition, the Company will receive royalties which escalate based on sales volume, beginning in the low-twenties percent, less the transfer price paid for the API included in the product actually sold and other contractual deductions. | |||||||||||
At December 31, 2014, approximately $11.4 million of the up-front license fee remains deferred. During the years ended December 31, 2014, 2013 and 2012, the Company recognized approximately $17.7 million, approximately $5.8 million and approximately $3.9 million, respectively, in collaborative arrangements revenue from the Astellas license agreement, including approximately $2.4 million, approximately $1.2 million, and approximately $0.8 million, respectively, from the sale of API to Astellas. | |||||||||||
AstraZeneca AB | |||||||||||
In October 2012, the Company entered into a collaboration agreement with AstraZeneca (the "AstraZeneca Collaboration Agreement") to co-develop and co-commercialize linaclotide in China, Hong Kong and Macau (the "License Territory"). The collaboration provides AstraZeneca with an exclusive nontransferable license to exploit the underlying technology in the License Territory. The parties share responsibility for continued development and commercialization of linaclotide under a joint development plan and a joint commercialization plan, respectively, with AstraZeneca having primary responsibility for the local operational execution. | |||||||||||
The parties agreed to an Initial Development Plan ("IDP") which includes the planned development of linaclotide in China, including the lead responsibility for each activity and the related internal and external costs. The IDP indicates that AstraZeneca is responsible for a multinational Phase III clinical trial (the "Phase III Trial"), the Company is responsible for nonclinical development and supplying clinical trial material and both parties are responsible for the regulatory submission process. The IDP indicates that the party specifically designated as being responsible for a particular development activity under the IDP shall implement and conduct such activities. The activities are governed by a Joint Development Committee ("JDC"), with equal representation from each party. The JDC is responsible for approving, by unanimous consent, the joint development plan and development budget, as well as approving protocols for clinical studies, reviewing and commenting on regulatory submissions, and providing an exchange of data and information. | |||||||||||
The AstraZeneca Collaboration Agreement will continue until there is no longer a development plan or commercialization plan in place, however, it can be terminated by AstraZeneca at any time upon 180 days' prior written notice. Under certain circumstances, either party may terminate the AstraZeneca Collaboration Agreement in the event of bankruptcy or an uncured material breach of the other party. Upon certain change in control scenarios of AstraZeneca, the Company may elect to terminate the AstraZeneca Collaboration Agreement and may re-acquire its product rights in a lump sum payment equal to the fair market value of such product rights. | |||||||||||
In connection with the AstraZeneca Collaboration Agreement, the Company and AstraZeneca also executed a co-promotion agreement (the "Co-Promotion Agreement"), pursuant to which the Company utilized its existing sales force to co-promote NEXIUM® (esomeprazole magnesium), one of AstraZeneca's products, in the U.S. The Co-Promotion Agreement expired in May 2014. | |||||||||||
There are no refund provisions in the AstraZeneca Collaboration Agreement and the Co-Promotion Agreement (together, the "AstraZeneca Agreements"). | |||||||||||
Under the terms of the AstraZeneca Collaboration Agreement, the Company received a $25.0 million non-refundable upfront payment upon execution. The Company is also eligible for $125.0 million in additional commercial milestone payments contingent on the achievement of certain sales targets. The parties will also share in the net profits and losses associated with the development and commercialization of linaclotide in the License Territory, with AstraZeneca receiving 55% of the net profits or incurring 55% of the net losses until a certain specified commercial milestone is achieved, at which time profits and losses will be shared equally thereafter. | |||||||||||
Activities under the AstraZeneca Agreements were evaluated in accordance with the Accounting Standards Codification ("ASC") Topic 605-25, Revenue Recognition—Multiple-Element Arrangements ("ASC 605-25"), to determine if they represented a multiple element revenue arrangement. The Company identified the following deliverables in the AstraZeneca Agreements: | |||||||||||
• | an exclusive license to develop and commercialize linaclotide in the License Territory (the "License Deliverable"), | ||||||||||
• | research, development and regulatory services pursuant to the IDP, as modified from time to time (the "R&D Services"), | ||||||||||
• | JDC services, | ||||||||||
• | obligation to supply clinical trial material, and | ||||||||||
• | co-promotion services for AstraZeneca's product (the "Co-Promotion Deliverable"). | ||||||||||
The License Deliverable is nontransferable and has certain sublicense restrictions. The Company determined that the License Deliverable had standalone value as a result of AstraZeneca's internal product development and commercialization capabilities, which would enable it to use the License Deliverable for its intended purposes without the involvement of the Company. The remaining deliverables were deemed to have standalone value based on their nature and all deliverables met the criteria to be accounted for as separate units of accounting under ASC 605-25. Factors considered in this determination included, among other things, whether any other vendors sell the items separately and if the customer could use the delivered item for its intended purpose without the receipt of the remaining deliverables. | |||||||||||
The Company identified the supply of linaclotide drug product for commercial requirements and commercialization services as contingent deliverables because these services are contingent upon the receipt of regulatory approval to commercialize linaclotide in the License Territory, and there were no binding commitments or firm purchase orders pending for commercial supply. As these deliverables are contingent, and are not at an incremental discount, they are not evaluated as deliverables at the inception of the arrangement. These contingent deliverables will be evaluated and accounted for separately as each related contingency is resolved. As of December 31, 2014, no contingent deliverables were provided by the Company under the AstraZeneca Agreements. | |||||||||||
In August 2014, the Company and AstraZeneca, through the JDC, modified the IDP and development budget to include approximately $14.0 million in additional activities over the remaining development period, to be shared by the Company and AstraZeneca under the terms of the AstraZeneca Collaboration Agreement. These additional activities serve to support the continued development of linaclotide in the Licensed Territory, including the Phase III Trial. Pursuant to the terms of the modified IDP and development budget, certain of the Company's deliverables were modified, specifically the R&D Services and the obligation to supply clinical trial material. The Company determined that the 2014 modification to the IDP and development budget was a material modification under ASU No. 2009-13 to the AstraZeneca Collaboration Agreement. However, this modification did not have a material impact on the Company's consolidated financial statements as there was an insignificant amount of deferred revenue associated with the AstraZeneca Collaboration Agreement as of the date of the modification. In accordance with ASU No. 2009-13, the Company reallocated the arrangement consideration to all of the identified deliverables in the arrangement (both delivered and undelivered) based on the information available as of the date of the modification. | |||||||||||
The total amount of the non-contingent consideration allocable to the AstraZeneca Agreements of approximately $34.0 million ("Arrangement Consideration") includes the $25.0 million non-refundable upfront payment and 55% of the costs for clinical trial material supply services and research, development and regulatory activities allocated to the Company in the IDP or as approved by the JDC in subsequent periods, or approximately $9.0 million. | |||||||||||
The Company allocated the Arrangement Consideration of approximately $34.0 million to the non-contingent deliverables based on management's BESP of each deliverable using the relative selling price method as the Company did not have VSOE or TPE of selling price for such deliverables. The Company estimated the BESP for the License Deliverable using a multi-period excess-earnings method under the income approach which utilized cash flow projections, the key assumptions of which included the following market conditions and entity-specific factors: (a) the specific rights provided under the license to develop and commercialize linaclotide; (b) the potential indications for linaclotide pursuant to the license; (c) the likelihood linaclotide will be developed for more than one indication; (d) the stage of development of linaclotide for IBS-C and CIC and the projected timeline for regulatory approval; (e) the development risk by indication; (f) the market size by indication; (g) the expected product life of linaclotide assuming commercialization; (h) the competitive environment, and (i) the estimated development and commercialization costs of linaclotide in the License Territory. The Company utilized a discount rate of 11.5% in its analysis, representing the weighted average cost of capital derived from returns on equity for comparable companies. The Company determined its BESP for the remaining deliverables based on the nature of the services to be performed and estimates of the associated effort and cost of the services adjusted for a reasonable profit margin such that they represented estimated market rates for similar services sold on a standalone basis. The Company concluded that a change in key assumptions used to determine BESP for each deliverable would not have a significant effect on the allocation of the Arrangement Consideration, as the estimated selling price of the License Deliverable significantly exceeds the other deliverables. | |||||||||||
Of the approximately $34.0 million of Arrangement Consideration, approximately $29.7 million was allocated to the License Deliverable, approximately $1.8 million to the R&D Services, approximately $0.1 million to the JDC services, approximately $0.3 million to the clinical trial material supply services, and approximately $2.1 million to the Co-Promotion Deliverable in the relative selling price model, at the time of the material modification. | |||||||||||
Because the Company shares development costs with AstraZeneca, payments from AstraZeneca with respect to both research and development and selling, general and administrative costs incurred by the Company prior to the commercialization of linaclotide in the License Territory are recorded as a reduction in expense, in accordance with the Company's policy, which is consistent with the nature of the cost reimbursement. Development costs incurred by the Company that pertain to the joint development plan and subsequent amendments to the joint development plan, as approved by the JDC, are recorded as research and development expense as incurred. Payments to AstraZeneca are recorded as incremental research and development expense. | |||||||||||
The Company completed its obligations related to the License Deliverable upon execution of the AstraZeneca Agreements; however, the revenue recognized in the statement of operations was limited to the non-contingent portion of the License Deliverable consideration in accordance with ASC 605-25. During the year ended December 31, 2014, and in connection with the modification to the IDP and development budget in August 2014, the Company recognized $2.5 million as collaborative arrangements revenue related to this deliverable as this portion of the Arrangement Consideration was no longer contingent. During the year ended December 31, 2013, the Company did not recognize any amounts in collaborative arrangements revenue related to the License Deliverable. During the year ended December 31, 2012, the Company recognized collaborative arrangements revenue of $24.7 million related to the License Deliverable. | |||||||||||
The Company also performs R&D Services and JDC services, and supplies clinical trial materials during the estimated development period. All Arrangement Consideration allocated to such services is being recognized as a reduction of research and development costs, using the proportional performance method, by which the amounts are recognized in proportion to the costs incurred. As a result of the cost-sharing arrangements under the collaboration, the Company recognized approximately $2.4 million in incremental research and development costs during the year ended December 31, 2014, and approximately $1.9 million in incremental research and development costs during the year ended December 31, 2013. Research and development costs incurred during the year ended December 31, 2012 were not significant. | |||||||||||
The amount allocated to the Co-Promotion Deliverable was recognized as collaborative arrangements revenue using the proportional performance method, which approximates recognition on a straight-line basis beginning on the date that the Company began to co-promote AstraZeneca's product, through December 31, 2013 (the earliest cancellation date). As of December 31, 2013, the Company completed its obligation related to the Co-Promotion Deliverable; however, the revenue recognized in the statement of operations was limited to the non-contingent consideration in accordance with ASC 605-25. During the year ended December 31, 2014, the Company recognized $0.9 million as collaborative arrangements revenue related to this deliverable as this portion of the Arrangement Consideration was no longer contingent. During the year ended December 31, 2013, the Company recognized approximately $1.0 million in collaborative arrangements revenue related to this deliverable. During the year ended December 31, 2012, the collaborative arrangements revenue related to the Co-Promotion Deliverable was not significant. | |||||||||||
The Company reassesses the periods of performance for each deliverable at the end of each reporting period. | |||||||||||
Milestone payments received from AstraZeneca upon the achievement of sales targets will be recognized as earned. | |||||||||||
Other Collaboration and License Agreements | |||||||||||
The Company has other collaboration and license agreements that are not individually significant to its business. In connection with entering into these agreements, the Company made aggregate up-front payments of approximately $5.8 million, which were expensed as research and development expense. Pursuant to the terms of one agreement, the Company may be required to pay $7.5 million for development milestones, of which, approximately $2.5 million had been paid as of December 31, 2014, and $18.0 million for regulatory milestones, none of which had been paid as of December 31, 2014. In addition, pursuant to the terms of another agreement, the contingent milestones could total up to $114.5 million per product to one of the Company's collaboration partners, including $21.5 million for development milestones, $58.0 million for regulatory milestones and $35.0 million for sales-based milestones. Further, under such agreements, the Company is also required to fund certain research activities and, if any product related to these collaborations is approved for marketing, to pay significant royalties on future sales. During the years ended December 31, 2014, 2013 and 2012, the Company incurred approximately $1.0 million, approximately $3.6 million and approximately $8.2 million, respectively, in research and development expense associated with the Company's other collaboration and license agreements. | |||||||||||
Fair_Value_of_Financial_Instru
Fair Value of Financial Instruments | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Fair Value of Financial Instruments | ||||||||||||||
Fair Value of Financial Instruments | 5. Fair Value of Financial Instruments | |||||||||||||
The tables below present information about the Company's assets that are measured at fair value on a recurring basis as of December 31, 2014 and 2013 and indicate the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value. In general, fair values determined by Level 1 inputs utilize observable inputs such as quoted prices in active markets for identical assets or liabilities. Fair values determined by Level 2 inputs utilize data points that are either directly or indirectly observable, such as quoted prices, interest rates and yield curves. Fair values determined by Level 3 inputs utilize unobservable data points in which there is little or no market data, which require the Company to develop its own assumptions for the asset or liability. | ||||||||||||||
The Company's investment portfolio includes many fixed income securities that do not always trade on a daily basis. As a result, the pricing services used by the Company apply other available information as applicable through processes such as benchmark yields, benchmarking of like securities, sector groupings and matrix pricing to prepare valuations. In addition, model processes were used to assess interest rate impact and develop prepayment scenarios. These models take into consideration relevant credit information, perceived market movements, sector news and economic events. The inputs into these models may include benchmark yields, reported trades, broker-dealer quotes, issuer spreads and other relevant data. | ||||||||||||||
The following tables present the assets the Company has measured at fair value on a recurring basis (in thousands): | ||||||||||||||
Fair Value Measurements at Reporting Date Using | ||||||||||||||
Description | December 31, | Quoted Prices in | Significant Other | Significant | ||||||||||
2014 | Active Markets for | Observable | Unobservable | |||||||||||
Identical Assets | Inputs | Inputs | ||||||||||||
(Level 1) | (Level 2) | (Level 3) | ||||||||||||
Cash and cash equivalents: | ||||||||||||||
Money market funds | $ | 60,966 | $ | 60,966 | $ | — | $ | — | ||||||
Available-for-sale securities: | ||||||||||||||
U.S. Treasury securities | 24,005 | 24,005 | — | — | ||||||||||
U.S. government-sponsored securities | 150,032 | — | 150,032 | — | ||||||||||
| | | | | | | | | | | | | | |
Total | $ | 235,003 | $ | 84,971 | $ | 150,032 | $ | — | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Fair Value Measurements at Reporting Date Using | ||||||||||||||
Description | December 31, | Quoted Prices in | Significant Other | Significant | ||||||||||
2013 | Active Markets for | Observable | Unobservable | |||||||||||
Identical Assets | Inputs | Inputs | ||||||||||||
(Level 1) | (Level 2) | (Level 3) | ||||||||||||
Cash and cash equivalents: | ||||||||||||||
Money market funds | $ | 59,747 | $ | 59,747 | $ | — | $ | — | ||||||
U.S. government-sponsored securities | 7,505 | — | 7,505 | — | ||||||||||
Available-for-sale securities: | ||||||||||||||
U.S. Treasury securities | 7,253 | 7,253 | — | — | ||||||||||
U.S. government-sponsored securities | 114,859 | — | 114,859 | — | ||||||||||
| | | | | | | | | | | | | | |
Total | $ | 189,364 | $ | 67,000 | $ | 122,364 | $ | — | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
There were no transfers between Level 1 and Level 2 of the fair value hierarchy during the years ended December 31, 2014 or 2013. | ||||||||||||||
Cash equivalents, accounts receivable, including related party accounts receivable, prepaid expenses and other current assets, accounts payable, related party accounts payable, accrued expenses and the current portion of capital lease obligations at December 31, 2014 and 2013 are carried at amounts that approximate fair value due to their short-term maturities. | ||||||||||||||
The non-current portion of the capital lease obligations at December 31, 2014 and 2013 approximates fair value as it bears interest at a rate approximating a market interest rate. | ||||||||||||||
AvailableforSale_Securities
Available-for-Sale Securities | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Available-for-Sale Securities | ||||||||||||||
Available-for-Sale Securities | ||||||||||||||
6. Available-for-Sale Securities | ||||||||||||||
The following tables summarize the available-for-sale securities held at December 31, 2014 and 2013 (in thousands): | ||||||||||||||
Amortized Cost | Gross | Gross | Fair Value | |||||||||||
Unrealized | Unrealized | |||||||||||||
Gains | Losses | |||||||||||||
December 31, 2014: | ||||||||||||||
U.S. government-sponsored securities | $ | 150,055 | $ | 2 | $ | (25 | ) | $ | 150,032 | |||||
U.S. Treasury securities | 24,001 | 4 | — | 24,005 | ||||||||||
| | | | | | | | | | | | | | |
Total | $ | 174,056 | $ | 6 | $ | (25 | ) | $ | 174,037 | |||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Amortized Cost | Gross | Gross | Fair Value | |||||||||||
Unrealized | Unrealized | |||||||||||||
Gains | Losses | |||||||||||||
December 31, 2013: | ||||||||||||||
U.S. government-sponsored securities | $ | 114,857 | $ | 6 | $ | (4 | ) | $ | 114,859 | |||||
U.S. Treasury securities | 7,253 | — | — | 7,253 | ||||||||||
| | | | | | | | | | | | | | |
Total | $ | 122,110 | $ | 6 | $ | (4 | ) | $ | 122,112 | |||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
The contractual maturities of all securities held at December 31, 2014 are one year or less. There were 27 and 12 available-for-sale securities in an unrealized loss position at December 31, 2014 and 2013, respectively, none of which had been in an unrealized loss position for more than twelve months. The aggregate fair value of these securities at December 31, 2014 and 2013 was approximately $101.9 million and approximately $38.7 million, respectively. The Company reviews its investments for other-than-temporary impairment whenever the fair value of an investment is less than amortized cost and evidence indicates that an investment's carrying amount is not recoverable within a reasonable period of time. To determine whether an impairment is other-than-temporary, the Company considers whether it has the ability and intent to hold the investment until a market price recovery and considers whether evidence indicating the cost of the investment is recoverable outweighs evidence to the contrary. The Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost bases, which may be maturity. The Company did not hold any securities with other-than-temporary impairment at December 31, 2014. | ||||||||||||||
There were no sales of available-for-sale securities during the years ended December 31, 2014 and 2013. The proceeds from maturities and sales of available-for-sale securities were approximately $89.8 million and approximately $51.0 million for the year ended December 31, 2012, respectively. Gross realized gains and losses on the sales of available-for-sale securities that have been included in other (expense) income, net unrealized holding gains or losses for the period that have been included in accumulated other comprehensive income as well as gains and losses reclassified out of accumulated other comprehensive income into other (expense) income were not material to the Company's consolidated results of operations. The cost of securities sold or the amount reclassified out of the accumulated other comprehensive income into other (expense) income is based on the specific identification method for purposes of recording realized gains and losses. | ||||||||||||||
Inventory
Inventory | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Inventory | ||||||||
Inventory | ||||||||
7. Inventory | ||||||||
Inventory consisted of the following (in thousands): | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Raw materials | $ | 4,954 | $ | 22,145 | ||||
Inventory at December 31, 2014 and 2013 represents API that is available for commercial sale. The Company writes down the value of its inventory for excess, obsolescence or other net realizable value adjustments to cost of revenue. During the year ended December 31, 2014, $20.3 million was charged to cost of revenue. Leading up to and early in the launch of CONSTELLA throughout Europe, the Company expanded its supply chain for API in order to reduce its reliance on any single supplier in this component of the supply chain. As a result, in connection with this expansion of the supply chain and to avoid shortages of API and possible patient impact, the Company agreed to purchase certain volumes based on higher potential demand levels projected with its European partner, Almirall. During the second quarter of 2014, Almirall reduced its inventory demand forecast, mainly due to the suspension of the commercialization of CONSTELLA in Germany, which led the Company to write down approximately $8.9 million of inventory to net realizable value. During the fourth quarter of 2014, Almirall lowered its inventory demand forecast due to increased commercial challenges throughout Europe, including Germany. Due to this further forecast reduction, and the fact that the Company has better insight into the launch trajectories outside of the U.S. than it did at launch, in the fourth quarter of 2014, the Company began placing additional emphasis on historical sales and its internal long range forecasts to evaluate inventory for potential excess or obsolescence, rather than on other data points such as Almirall's inventory demand forecasts, which were used in prior periods. This change in emphasis, in combination with Almirall lowering its inventory demand forecast during the quarter ended December 31, 2014, resulted in a write down of approximately $11.4 million of inventory to an estimated net realizable value of approximately $5.0 million. | ||||||||
Property_and_Equipment
Property and Equipment | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Property and Equipment | ||||||||
Property and Equipment | ||||||||
8. Property and Equipment | ||||||||
Property and equipment, net consisted of the following (in thousands): | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Manufacturing equipment | $ | 3,623 | $ | 2,812 | ||||
Laboratory equipment | 15,126 | 14,039 | ||||||
Computer and office equipment | 5,185 | 5,202 | ||||||
Furniture and fixtures | 2,093 | 2,365 | ||||||
Software | 13,921 | 12,352 | ||||||
Construction in process | 1,457 | 996 | ||||||
Leased vehicles | 4,472 | 4,472 | ||||||
Leasehold improvements | 36,928 | 36,827 | ||||||
| | | | | | | | |
82,805 | 79,065 | |||||||
Less accumulated depreciation and amortization | (52,979 | ) | (41,689 | ) | ||||
| | | | | | | | |
$ | 29,826 | $ | 37,376 | |||||
| | | | | | | | |
| | | | | | | | |
As of December 31, 2014 and 2013, substantially all of the Company's manufacturing equipment was located in the United Kingdom at one of the Company's contract manufacturers. All other property and equipment were located in the U.S. for the periods presented. | ||||||||
The Company has entered into capital leases for certain computer, vehicles and office equipment (Note 11). As of December 31, 2014 and 2013, the Company had approximately $5.5 million of assets under capital leases with accumulated amortization balances of approximately $2.0 million and approximately $1.2 million, respectively. | ||||||||
Depreciation and amortization expense of property and equipment, including equipment recorded under capital leases, was approximately $12.3 million for the year ended December 31, 2014. In addition, the Company wrote-down approximately $0.5 million of leasehold improvement assets not utilized by the Company under the terms of its subleases. Depreciation and amortization expense of property and equipment, including equipment recorded under capital leases, was approximately $11.7 million and approximately $11.3 million for the years ended December 31, 2013 and 2012, respectively. | ||||||||
In October 2012, the Company entered into an amendment to its Cambridge, Massachusetts building lease, pursuant to which the term of the lease was extended by 24 months. As a result of this amendment, the Company extended on a prospective basis the period over which it amortizes its leasehold improvements. | ||||||||
Accrued_Expenses
Accrued Expenses | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Accrued Expenses | ||||||||
Accrued Expenses | ||||||||
9. Accrued Expenses | ||||||||
Accrued expenses consisted of the following (in thousands): | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Salaries and benefits | $ | 16,582 | $ | 13,784 | ||||
Professional fees | 574 | 531 | ||||||
Accrued interest | 850 | 856 | ||||||
Other | 4,606 | 3,267 | ||||||
| | | | | | | | |
$ | 22,612 | $ | 18,438 | |||||
| | | | | | | | |
| | | | | | | | |
Notes_Payable
Notes Payable | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Notes Payable. | |||||
Notes Payable | 10. Notes Payable | ||||
On January 4, 2013, the Company closed a private placement of $175.0 million in aggregate principal amount of notes due on or before June 15, 2024. The notes bear an annual interest rate of 11%, with interest payable March 15, June 15, September 15 and December 15 of each year (each a "Payment Date") beginning June 15, 2013. On March 15, 2014, the Company began making quarterly payments on the notes equal to the greater of (i) 7.5% of net sales of LINZESS in the U.S. for the preceding quarter (the "Synthetic Royalty Amount") and (ii) accrued and unpaid interest on the notes (the "Required Interest Amount"). Principal on the notes will be repaid in an amount equal to the Synthetic Royalty Amount minus the Required Interest Amount, when this is a positive number, until the principal has been paid in full. Given the principal payments on the notes are based on the Synthetic Royalty Amount, which will vary from quarter to quarter, the notes may be repaid prior to June 15, 2024, the final legal maturity date. The Company made principal payments of approximately $1.2 million through December 31, 2014, and expects to pay approximately $11.3 million of the principal within twelve months following December 31, 2014. | |||||
The notes are secured solely by a security interest in a segregated bank account established to receive the required quarterly payments. Up to the amount of the required quarterly payments under the notes, Actavis will deposit its quarterly profit (loss) sharing payments due to the Company under the collaboration agreement, if any, into the segregated bank account. If the funds deposited by Actavis into the segregated bank account are insufficient to make a required payment of interest or principal on a particular Payment Date, the Company is obligated to deposit such shortfall out of the Company's general funds into the segregated bank account. | |||||
The notes may be redeemed at any time prior to maturity, in whole or in part, at the option of the Company. The Company will pay a redemption price equal to the percentage of outstanding principal balance of the notes being redeemed specified below for the period in which the redemption occurs (plus the accrued and unpaid interest to the redemption date on the notes being redeemed): | |||||
Payment Dates | Redemption | ||||
Percentage | |||||
From and including January 1, 2014 to and including December 31, 2014 | 112.00 | % | |||
From and including January 1, 2015 to and including December 31, 2015 | 105.50 | % | |||
From and including January 1, 2016 to and including December 31, 2016 | 102.75 | % | |||
From and including January 1, 2017 and thereafter | 100.00 | % | |||
The notes contain certain covenants related to the Company's obligations with respect to the commercialization of LINZESS and the related collaboration agreement with Actavis, as well as certain customary covenants, including covenants that limit or restrict the Company's ability to incur certain liens, merge or consolidate or make dispositions of assets. The notes also specify a number of events of default (some of which are subject to applicable cure periods), including, among other things, covenant defaults, other non-payment defaults, and bankruptcy and insolvency defaults. Upon the occurrence of an event of default, subject to cure periods in certain circumstances, all amounts outstanding may become immediately due and payable. | |||||
The upfront cash proceeds of $175.0 million, less a discount of approximately $0.4 million for payment of legal fees incurred on behalf of the noteholders, were recorded as notes payable at issuance. The Company also capitalized approximately $7.3 million of debt issuance costs, which are included in prepaid expenses and other current assets and in other assets on the Company's consolidated balance sheet. The debt issuance costs and discount are being amortized over the estimated term of the obligation using the effective interest method. The repayment provisions represent embedded derivatives that are clearly and closely related to the notes and as such do not require separate accounting treatment. | |||||
The accounting for the notes requires the Company to make certain estimates and assumptions about the future net sales of LINZESS in the U.S. LINZESS has been marketed since December 2012 and the estimates of the magnitude and timing of LINZESS net sales are subject to significant variability due to the recent product launch and the extended time period associated with the financing transaction, and thus subject to significant uncertainty. Therefore, these estimates and assumptions are likely to change as the Company gains additional experience marketing LINZESS, which may result in future adjustments to the portion of the debt that is classified as a current liability, the amortization of debt issuance costs and discounts as well as the accretion of the interest expense. Any such adjustments could be material to the Company's consolidated financial statements. | |||||
The fair value of the notes was estimated to be approximately $182.5 million and $183.8 million as of December 31, 2014 and 2013, respectively, and was determined using Level 3 inputs, including a quoted rate. | |||||
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Commitments and Contingencies | ||||||||||||||
Commitments and Contingencies | 11. Commitments and Contingencies | |||||||||||||
Lease Commitments | ||||||||||||||
The Company leases its facility, offsite data storage location, vehicles and various equipment under leases that expire at varying dates through 2018. Certain of these leases contain renewal options, and require the Company to pay operating costs, including property taxes, insurance, maintenance and other operating expenses. | ||||||||||||||
As of December 31, 2014, the Company rents office and laboratory space at its corporate headquarters in Cambridge, Massachusetts under a non-cancelable operating lease, entered into in January 2007, as amended ("2007 Lease Agreement"). The 2007 Lease Agreement contains various provisions for renewal at the Company's option and, in certain cases, free rent periods and rent escalation tied to the Consumer Price Index. The rent expense, inclusive of the escalating rent payments and free rent periods, is recognized on a straight-line basis over the lease term through January 2018. The Company maintains a letter of credit securing its obligations under the lease agreement of approximately $7.6 million, which is recorded as restricted cash. In addition to rents due under this lease, the Company is obligated to pay facilities charges, including utilities and taxes. In connection with the 2007 Lease Agreement, the Company was provided allowances totaling approximately $22.9 million as reimbursement for financing capital improvements to the facility. The reimbursement amount is recorded as deferred rent on the consolidated balance sheets and is being amortized as a reduction to rent expense over the lease term, as applicable. | ||||||||||||||
In the third quarter of 2014, the Company entered into arrangements, with the landlord's consent, to sublease a portion of its Cambridge, Massachusetts corporate headquarters as it does not intend to use the space for its operations. Under the first sublease, the Company's operating lease obligations through 2018 are partially offset by future sublease payments to it of $16.1 million and under the second sublease, the Company's operating lease obligations through 2016 are partially offset by future sublease payments to it of $1.9 million. During the year ended December 31, 2014, the Company recorded aggregate charges of $2.6 million, which represent its obligations to the landlord associated with the sublet space, net of sublease income due to the Company under the subleases, and a partial write-down of leasehold improvement assets not utilized by the Company under the terms of the subleases. | ||||||||||||||
In 2013, the Company entered into 36-month capital leases for the vehicle fleet for its field-based sales force and medical science liaisons. The capital leases expire at various times through September 2016. At December 31, 2014, the weighted average interest rate on the outstanding capital lease obligations was approximately 7.7%. In accordance with the terms of these arrangements, the Company maintains a letter of credit securing its obligations under the lease agreements of $0.5 million, which is recorded as restricted cash. | ||||||||||||||
The Company has also entered into capital leases for certain computer and office equipment. These capital leases expire in April 2018. At December 31, 2014, the weighted average interest rate on the outstanding capital lease obligations was approximately 14.5%. | ||||||||||||||
At December 31, 2014, future minimum lease payments under all non-cancelable lease arrangements were as follows (in thousands): | ||||||||||||||
Operating | Lease Payments | Net Operating | Capital | |||||||||||
Lease | to be Received | Lease Payments | Lease | |||||||||||
Payments | from Subleases | Payments | ||||||||||||
2015 | $ | 14,342 | $ | (4,365 | ) | $ | 9,976 | $ | 1,434 | |||||
2016 | 15,617 | (5,740 | ) | 9,878 | 2,410 | |||||||||
2017 | 16,170 | (5,665 | ) | 10,505 | 253 | |||||||||
2018 | 635 | (476 | ) | 159 | 85 | |||||||||
| | | | | | | | | | | | | | |
Total future minimum lease payments | $ | 46,764 | $ | (16,246 | ) | $ | 30,518 | $ | 4,182 | |||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Less: amounts representing interest | (459 | ) | ||||||||||||
| | | | | | | | | | | | | | |
Capital lease obligations at December 31, 2014 | 3,723 | |||||||||||||
Less: current portion of capital lease obligations | (1,152 | ) | ||||||||||||
| | | | | | | | | | | | | | |
Capital lease obligations, net of current portion | $ | 2,571 | ||||||||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Rental expense, net of sublease income of $2.6 million, under the operating leases amounted to approximately $10.2 million for the year ended December 31, 2014. Rental expense amounted to approximately $8.8 million and approximately $7.2 million for the years ended December 31, 2013 and 2012, respectively. | ||||||||||||||
Commercial Supply Commitments | ||||||||||||||
The Company has entered into multiple commercial supply agreements for the purchase of linaclotide finished drug product and API. Certain of the agreements contain minimum purchase commitments, the earliest of which commenced in 2012. As of December 31, 2014, the Company's minimum purchase requirements and other firm commitments related to the supply contracts associated with the territories not covered by the collaboration with Actavis were approximately $5.0 million, approximately $6.9 million, approximately $7.0 million, approximately $2.5 million, approximately $2.5 million and approximately $2.5 million for the years ending December 31, 2015, 2016, 2017, 2018, 2019 and thereafter, respectively. In addition, the Company and Actavis are jointly obligated to make minimum purchases of linaclotide API for the territories covered by the Company's collaboration with Actavis. Currently, Actavis fulfills all such minimum purchase commitments and, as a result, they are excluded from the amounts above. | ||||||||||||||
Commitments Related to the Collaboration and License Agreements | ||||||||||||||
Under the collaborative agreements with Actavis and AstraZeneca, the Company shares with Actavis and AstraZeneca all development and commercialization costs related to linaclotide in the U.S. and China, respectively. The actual amounts that the Company pays its partners or that partners pay to the Company will depend on numerous factors outside of the Company's control, including the success of certain clinical development efforts with respect to linaclotide, the content and timing of decisions made by the regulators, the reimbursement and competitive landscape around linaclotide and our other product candidates, and other factors. | ||||||||||||||
In addition, the Company has commitments to make potential future milestone payments to third parties under certain of its license and collaboration arrangements. These milestones primarily include the commencement and results of clinical trials, obtaining regulatory approval in various jurisdictions and the future commercial success of development programs, the outcome and timing of which are difficult to predict and subject to significant uncertainty. In addition to the milestones discussed above, the Company is obligated to pay royalties on future sales, which are contingent on generating levels of sales of future products that have not been achieved and may never be achieved. | ||||||||||||||
See Note 4, "Collaboration and License Agreements," for additional information regarding the license and collaboration arrangements. | ||||||||||||||
Other Funding Commitments | ||||||||||||||
As of December 31, 2014, the Company has several on-going studies in various clinical trial stages. The Company's most significant clinical trial expenditures are to contract research organizations ("CRO"). The contracts with CROs generally are cancellable, with notice, at the Company's option and do not have any significant cancellation penalties. | ||||||||||||||
Guarantees | ||||||||||||||
As permitted under Delaware law, the Company indemnifies its officers and directors for certain events or occurrences while the officer or director is, or was, serving at the Company's request in such capacity. The maximum potential amount of future payments the Company could be required to make is unlimited; however, the Company has directors' and officers' insurance coverage that is intended to limit its exposure and enable it to recover a portion of any future amounts paid. | ||||||||||||||
The Company enters into certain agreements with other parties in the ordinary course of business that contain indemnification provisions. These typically include agreements with directors and officers, business partners, contractors, landlords, clinical sites and customers. Under these provisions, the Company generally indemnifies and holds harmless the indemnified party for losses suffered or incurred by the indemnified party as a result of the Company's activities. These indemnification provisions generally survive termination of the underlying agreement. The maximum potential amount of future payments the Company could be required to make under these indemnification provisions is unlimited. However, to date the Company has not incurred material costs to defend lawsuits or settle claims related to these indemnification provisions. As a result, the estimated fair value of these obligations is minimal. Accordingly, the Company had no liabilities recorded for these obligations as of December 31, 2014 and 2013. | ||||||||||||||
Litigation | ||||||||||||||
From time to time, the Company is involved in various legal proceedings and claims, either asserted or unasserted, which arise in the ordinary course of business. While the outcome of these other claims cannot be predicted with certainty, management does not believe that the outcome of any of these ongoing legal matters, individually and in aggregate, will have a material adverse effect on the Company's consolidated financial statements. | ||||||||||||||
Stockholders_Equity
Stockholders' Equity | 12 Months Ended | |
Dec. 31, 2014 | ||
Stockholders' Equity | ||
Stockholders' Equity | 12. Stockholders' Equity | |
Preferred Stock | ||
The Company's preferred stock may be issued from time to time in one or more series, with each such series to consist of such number of shares and to have such terms as adopted by the board of directors. Authority is given to the board of directors to determine and fix such voting powers, full or limited, or no voting powers, and such designations, preferences and relative participating, optional or other special rights, and qualifications, limitation or restrictions thereof, including without limitation, dividend rights, conversion rights, redemption privileges and liquidation preferences. | ||
Common Stock | ||
The Company has designated two series of common stock, Series A Common Stock, which is referred to as "Class A Common Stock," and Series B Common Stock, which is referred to as "Class B Common Stock." All shares of common stock that were outstanding immediately prior to August 2008 were converted into shares of Class B Common Stock. The holders of Class A Common Stock and Class B Common Stock vote together as a single class. Class A Common Stock is entitled to one vote per share. Class B Common Stock is also entitled to one vote per share with the following exceptions: (1) after the completion of an initial public offering ("IPO") of the Company's stock, the holders of the Class B Common Stock are entitled to ten votes per share if the matter is an adoption of an agreement of merger or consolidation, an adoption of a resolution with respect to the sale, lease, or exchange of the Company's assets or an adoption of dissolution or liquidation of the Company, and (2) Class B common stockholders are entitled to ten votes per share on any matter if any individual, entity, or group seeks to obtain or has obtained beneficial ownership of 30% or more of the Company's outstanding shares of common stock. Class B Common Stock can be sold at any time and irrevocably converts to Class A Common Stock, on a one-for-one basis, upon sale or transfer. The Class B Common Stock is also entitled to a separate class vote for the issuance of additional shares of Class B Common Stock (except pursuant to dividends, splits or convertible securities), or any amendment, alteration or repeal of any provision of the Company's charter. All Class B Common Stock will automatically convert into Class A Common Stock upon the earliest of: | ||
• | the later of (1) the first date on which the number of shares of Class B Common Stock then outstanding is less than 19,561,556 which represents 25% of the number of shares of Class B Common Stock outstanding immediately following the completion of the Company's IPO or (2) December 31, 2018; | |
• | December 31, 2038; or | |
• | a date agreed to in writing by a majority of the holders of the Class B Common Stock. | |
The Company has reserved such number of shares of Class A Common Stock as there are outstanding shares of Class B Common Stock solely for the purpose of effecting the conversion of the Class B Common Stock. | ||
The holders of shares of Class A Common Stock and Class B Common Stock are entitled to dividends if and when declared by the board of directors. In the event that dividends are paid in the form of common stock or rights to acquire common stock, the holders of shares of Class A Common Stock shall receive Class A Common Stock or rights to acquire Class A Common Stock and the holders of shares of Class B Common Stock shall receive Class B Common Stock or rights to acquire Class B Common Stock, as applicable. | ||
In the event of a voluntary or involuntary liquidation, dissolution, distribution of assets, or winding up of the Company, the holders of shares of Class A Common Stock and the holders of shares of Class B Common Stock are entitled to share equally, on a per share basis, in all assets of the Company of whatever kind available for distribution to the holders of common stock. | ||
In February 2012, the Company sold 6,037,500 shares of its Class A common stock through a firm commitment, underwritten public offering at a price to the public of $15.09 per share. As a result of the offering, the Company received aggregate net proceeds, after underwriting discounts and commissions and other offering expenses, of approximately $85.2 million. | ||
During the second quarter of 2013, the Company sold 11,204,948 shares of its Class A common stock through a firm commitment, underwritten public offering at a price to the public of $13.00 per share. As a result of this offering, the Company received aggregate net proceeds, after underwriting discounts and commissions and other offering expenses, of approximately $137.8 million. | ||
In February 2014, the Company sold 15,784,325 shares of its Class A common stock through a firm commitment, underwritten public offering at a price to the public of $12.75 per share. As a result of this offering, the Company received aggregate net proceeds, after underwriting discounts and commissions and other offering expenses, of approximately $190.4 million. | ||
Stock_Benefit_Plans
Stock Benefit Plans | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Stock Benefit Plans | ||||||||||||||
Stock Benefit Plans | 13. Stock Benefit Plans | |||||||||||||
The following table summarizes the expense recognized for share-based compensation arrangements in the consolidated statements of operations (in thousands): | ||||||||||||||
Years Ended December 31, | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Employee stock options | $ | 19,373 | $ | 17,981 | $ | 16,582 | ||||||||
Restricted stock awards | 2,671 | 552 | 429 | |||||||||||
Non-employee stock options | 2,618 | 271 | 60 | |||||||||||
Employee stock purchase plan | 941 | 995 | 472 | |||||||||||
Workforce reduction | 551 | — | — | |||||||||||
Stock award | 30 | 30 | 30 | |||||||||||
| | | | | | | | | | | ||||
$ | 26,184 | $ | 19,829 | $ | 17,573 | |||||||||
| | | | | | | | | | | ||||
| | | | | | | | | | | ||||
Share-based compensation is reflected in the consolidated statements of operations as follows for the years ended December 31, 2014, 2013 and 2012 (in thousands): | ||||||||||||||
Years Ended December 31, | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Research and development | $ | 9,482 | $ | 9,178 | $ | 9,080 | ||||||||
Selling, general and administrative | 16,702 | 10,651 | 8,493 | |||||||||||
| | | | | | | | | | | ||||
$ | 26,184 | $ | 19,829 | $ | 17,573 | |||||||||
| | | | | | | | | | | ||||
| | | | | | | | | | | ||||
On November 4, 2014, the Company agreed to accelerate the vesting of all of a former executive officer's outstanding unvested stock options on the executive officer's departure date of December 31, 2014, and to allow the exercise of vested stock options for up to two years subsequent to the departure date, or until their expiration, whichever is earlier. These equity modifications resulted in an incremental charge of approximately $2.3 million, which was recorded within selling, general and administrative expenses during the quarter ended December 31, 2014. | ||||||||||||||
Stock Benefit Plans | ||||||||||||||
The Company has two share-based compensation plans pursuant to which awards are currently being made: the Amended and Restated 2010 Employee, Director and Consultant Equity Incentive Plan ("2010 Equity Plan") and the Amended and Restated 2010 Employee Stock Purchase Plan ("2010 Purchase Plan"). The Company also has two share-based compensation plans under which there are outstanding awards, but from which no further awards will be made: the Amended and Restated 2005 Stock Incentive Plan ("2005 Equity Plan") and the Amended and Restated 2002 Stock Incentive Plan ("2002 Equity Plan"). At December 31, 2014, there were 10,811,998 shares available for future grant under all such plans. | ||||||||||||||
2010 Equity Plan | ||||||||||||||
During 2010, the Company's stockholders approved the 2010 Equity Plan under which stock options, restricted stock, restricted stock units, and other stock-based awards may be granted to employees, officers, directors, or consultants of the Company. There were 6,000,000 shares of common stock initially reserved for issuance under the 2010 Equity Plan. The number of shares available for future grant may be increased on the first day of each fiscal year by an amount equal to the lesser of: (i) 6,600,000; (ii) 4% of the number of outstanding shares of common stock on the first day of each fiscal year; and (iii) an amount determined by the board of directors. Awards that are returned to the Company's other equity plans as a result of their expiration, cancellation, termination or repurchase are automatically made available for issuance under the 2010 Equity Plan. At December 31, 2014, there were 9,446,061 shares available for future grant under the 2010 Equity Plan. | ||||||||||||||
2010 Purchase Plan | ||||||||||||||
During 2010, the Company's stockholders approved the 2010 Purchase Plan, which gives eligible employees the right to purchase shares of common stock at the lower of 85% of the fair market value on the first or last day of an offering period. Each offering period is six months. There were 400,000 shares of common stock initially reserved for issuance pursuant to the 2010 Purchase Plan. The number of shares available for future grant under the 2010 Purchase Plan may be increased on the first day of each fiscal year by an amount equal to the lesser of: (i) 1,000,000 shares, (ii) 1% of the Class A shares of common stock outstanding on the last day of the immediately preceding fiscal year, or (iii) such lesser number of shares as is determined by the board of directors. At December 31, 2014, there were 1,335,084 shares available for future grant under the 2010 Purchase Plan. | ||||||||||||||
2005 Equity Plan and 2002 Equity Plan | ||||||||||||||
The 2005 Equity Plan and 2002 Equity Plan provided for the granting of stock options, restricted stock, restricted stock units, and other share-based awards to employees, officers, directors, consultants, or advisors of the Company. At December 31, 2014, there were 30,853 shares available for future grant under the 2005 Equity Plan and no shares available for future grant under the 2002 Equity Plan. | ||||||||||||||
Restricted Stock | ||||||||||||||
In 2014, the Company granted an aggregate of 288,606 shares of common stock to independent members of the board of directors under restricted stock agreements in accordance with the terms of the 2010 Equity Plan and the Company's director compensation plan, effective in January 2014. These shares of restricted stock vest ratably over the period of service from January 2014 through the Company's 2015 annual meeting of stockholders, provided the individual continues to serve on the Company's board of directors through each vest date. A summary of the unvested shares of restricted stock as of December 31, 2014 is presented below: | ||||||||||||||
Shares | Weighted-Average | |||||||||||||
Grant Date | ||||||||||||||
Fair Value | ||||||||||||||
Unvested at December 31, 2013 | — | $ | 0 | |||||||||||
Granted | 288,606 | $ | 13.29 | |||||||||||
Vested | (189,716 | ) | $ | 13.04 | ||||||||||
Forfeited | — | $ | 0 | |||||||||||
| | | | | | | | |||||||
Unvested at December 31, 2014 | 98,890 | $ | 13.77 | |||||||||||
| | | | | | | | |||||||
| | | | | | | | |||||||
Stock Options | ||||||||||||||
Stock options granted under the Company's equity plans generally have a ten-year term and vest over a period of four years, provided the individual continues to serve at the Company through the vesting dates. Options granted under all equity plans are exercisable at a price per share not less than the fair market value of the underlying common stock on the date of grant. The estimated fair value of options, including the effect of estimated forfeitures, is recognized over the requisite service period, which is typically the vesting period of each option. | ||||||||||||||
The weighted average assumptions used to estimate the fair value of the stock options using the Black-Scholes option pricing model were as follows for the years ended December 31, 2014, 2013 and 2012: | ||||||||||||||
Years Ended December 31, | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Fair value of common stock | $ | 13.82 | $ | 12.57 | $ | 13.44 | ||||||||
Expected volatility | 46.84 | % | 46.3 | % | 49.2 | % | ||||||||
Expected term (in years) | 6.10 | 6.5 | 6.5 | |||||||||||
Risk-free interest rate | 1.84 | % | 1.6 | % | 1.2 | % | ||||||||
Expected dividend yield | — | % | — | % | — | % | ||||||||
Prior to February 3, 2010, the Company was not publicly traded and therefore had no trading history. Therefore, the Company has been using a blended volatility rate that blends its own historical volatility with that of comparable public companies. For purposes of identifying comparable companies, the Company selected publicly-traded companies that are in the biopharmaceutical industry, have products or product candidates in similar therapeutic areas and stages of nonclinical and clinical development, have sufficient trading history to derive a historic volatility rate and have similar vesting terms as the Company's options. During the quarter ended March 31, 2014, the Company transitioned from a "simplified method" to the use of its historical data when estimating the expected term of stock option grants for purposes of determining stock-based compensation expense. This change did not have a significant impact on the Company's financial position or results of operations for the year ended December 31, 2014. The risk-free interest rate used for each grant is based on a zero-coupon U.S. Treasury instrument with a remaining term similar to the expected term of the share-based award. The Company has not paid and does not anticipate paying cash dividends on its shares of common stock in the foreseeable future; therefore, the expected dividend yield is assumed to be zero. | ||||||||||||||
The Company's Class B Common Stock is issuable upon exercise of options granted prior to the closing of the Company's IPO under the 2002 Equity Plan and the 2005 Equity Plan, and Class A Common Stock is issuable upon exercise of all options granted after the closing of the Company's IPO under the Company's equity plans. At December 31, 2014, options exercisable into 5,889,160 shares of Class B Common Stock and 14,068,613 shares of Class A Common Stock were outstanding. | ||||||||||||||
Subject to approval by the board of directors, option grantees under the 2002 Equity Plan and the 2005 Equity Plan may have the right to exercise an option prior to vesting. The exercise of these shares is not substantive and as a result, the cash paid for the exercise prices is considered a deposit or prepayment of the exercise price and is recorded as a liability. Amounts received upon the exercise of these shares were not material to the consolidated financial statements at December 31, 2014 and 2013. | ||||||||||||||
The Company, from time to time, issues certain time-accelerated stock options to certain employees. The vesting of these options accelerates upon the achievement of certain performance-based milestones. If these criteria are not met, such options will vest between six and ten years after the date of grant. During the year ended December 31, 2014, 170,000 shares vested as a result of milestone or service period achievements. At December 31, 2014 and 2013, there were 400,000 and 570,000 shares, respectively, issuable under unvested time-accelerated options. When achievement of the milestone is not deemed probable, the Company recognizes compensation expense associated with time-accelerated stock options initially over the vesting period of the respective stock option. When deemed probable of achievement, the Company expenses the remaining unrecognized compensation over the implicit service period. The Company recorded share-based compensation related to these time-accelerated options of $1.2 million, less than $0.1 million and approximately $0.5 million during the years ended December 31, 2014, 2013 and 2012, respectively. At December 31, 2014, the Company had approximately $0.2 million in unrecognized share-based compensation, net of estimated forfeitures, related to these options. | ||||||||||||||
The Company also grants to certain employees performance-based options to purchase shares of common stock. These options are subject to performance-based milestone vesting. During the year ended December 31, 2014, 40,000 shares vested as a result of performance milestone achievements. The Company recorded share-based compensation related to these performance-based options of approximately $0.5 million, approximately $0.1 million and approximately $1.0 million, respectively, during the years ended December 31, 2014, 2013 and 2012. At December 31, 2014, the unrecognized share-based compensation related to these performance-based options was approximately $3.5 million. | ||||||||||||||
The following table summarizes stock option activity under the Company's share-based compensation plans, including performance-based options: | ||||||||||||||
Shares of | Weighted- | Weighted- | Aggregate | |||||||||||
Common | Average | Average | Intrinsic | |||||||||||
Stock | Exercise | Contractual | Value | |||||||||||
Attributable | Price | Life | ||||||||||||
to Options | ||||||||||||||
(in years) | (in thousands) | |||||||||||||
Outstanding at December 31, 2013 | 20,927,874 | $ | 8.87 | 6.14 | $ | 71,616 | ||||||||
Granted | 4,502,800 | $ | 13.85 | |||||||||||
Exercised | (3,343,058 | ) | $ | 6.17 | ||||||||||
Cancelled | (2,129,843 | ) | $ | 12.35 | ||||||||||
| | | | | | | | | | | | | | |
Outstanding at December 31, 2014 | 19,957,773 | $ | 10.07 | 6 | $ | 104,897 | ||||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Vested or expected to vest at December 31, 2014 | 18,610,656 | $ | 9.99 | 5.87 | $ | 99,345 | ||||||||
Exercisable at December 31, 2014(1) | 11,570,658 | $ | 8.57 | 4.59 | $ | 78,226 | ||||||||
-1 | All stock options granted under the 2002 Equity Plan and the 2005 Equity Plan contain provisions allowing for the early exercise of such options into restricted stock. The exercisable shares disclosed above represent those that were vested as of December 31, 2014. | |||||||||||||
The weighted-average grant date fair value per share of options granted during the years ended December 31, 2014, 2013 and 2012 was $6.47, $5.96 and $6.62, respectively. The total intrinsic value of options exercised during the years ended December 31, 2014, 2013 and 2012 was approximately $26.9 million, $19.7 million, and approximately $8.6 million, respectively. The intrinsic value was calculated as the difference between the fair value of the Company's common stock and the exercise price of the option issued. | ||||||||||||||
As of December 31, 2014, there was approximately $33.7 million of unrecognized share-based compensation, net of estimated forfeitures, related to stock option grants with time-based vesting, which is expected to be recognized over a weighted average period of approximately 2.4 years. As of December 31, 2014, there was approximately $1.0 million of unrecognized share-based compensation, net of estimated forfeitures, related to restricted stock awards, which is expected to be recognized over a weighted average of period of approximately 0.4 years. The total unrecognized share-based compensation cost will be adjusted for future changes in estimated forfeitures. | ||||||||||||||
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Income Taxes | |||||||||||
Income Taxes | 14. Income Taxes | ||||||||||
In general, the Company has not recorded a provision for federal or state income taxes as it has had cumulative net operating losses since inception. | |||||||||||
A reconciliation of income taxes computed using the U.S. federal statutory rate to that reflected in operations follows (in thousands): | |||||||||||
Years Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Income tax benefit using U.S. federal statutory rate | $ | (64,470 | ) | $ | (92,756 | ) | $ | (24,692 | ) | ||
Permanent differences | 1,916 | 1,413 | 288 | ||||||||
State income taxes, net of federal benefit | (5,632 | ) | (13,684 | ) | (3,835 | ) | |||||
Stock-based compensation | 3,584 | 3,830 | 3,531 | ||||||||
Tax credits | (2,652 | ) | (5,089 | ) | (10,420 | ) | |||||
Expiring net operating losses and tax credits | 3,590 | — | 564 | ||||||||
Effect of change in state tax rate on deferred tax assets and deferred tax liabilities | 5,490 | 1,057 | — | ||||||||
Change in the valuation allowance | 58,185 | 105,186 | 34,577 | ||||||||
Other | (11 | ) | 43 | (13 | ) | ||||||
| | | | | | | | | | | |
$ | — | $ | — | $ | — | ||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Components of the Company's deferred tax assets and liabilities are as follows (in thousands): | |||||||||||
December 31, | |||||||||||
2014 | 2013 | ||||||||||
Deferred tax assets: | |||||||||||
Net operating loss carryforwards | $ | 279,123 | $ | 231,660 | |||||||
Tax credit carryforwards | 32,186 | 29,533 | |||||||||
Capitalized research and development | 6,826 | 11,939 | |||||||||
Deferred revenue | 4,220 | 6,433 | |||||||||
Other | 45,135 | 29,223 | |||||||||
| | | | | | | | ||||
Total deferred tax assets | 367,490 | 308,788 | |||||||||
Valuation allowance | (367,490 | ) | (308,788 | ) | |||||||
| | | | | | | | ||||
Net deferred tax asset | $ | — | $ | — | |||||||
| | | | | | | | ||||
| | | | | | | | ||||
Management of the Company has evaluated the positive and negative evidence bearing upon the realizability of its deferred tax assets. Management has considered the Company's history of operating losses and concluded, in accordance with the applicable accounting standards, that it is more likely than not that the Company may not realize the benefit of its deferred tax assets. Accordingly, the deferred tax assets have been fully reserved at December 31, 2014 and 2013. Management reevaluates the positive and negative evidence on a quarterly basis. | |||||||||||
The valuation allowance increased approximately $58.7 million during the year ended December 31, 2014, due primarily to the increase in the net operating loss carryforwards and tax credits. The valuation allowance increased approximately $105.8 million during the year ended December 31, 2013, due primarily to the increase in the net operating loss carryforwards and tax credits. | |||||||||||
Subject to the limitations described below, at December 31, 2014 and 2013, the Company has net operating loss carryforwards of approximately $745.6 million and approximately $600.9 million, respectively, to offset future federal taxable income, which expire beginning in 2018 continuing through 2034. The federal net operating loss carryforwards exclude approximately $53.1 million of deductions related to the exercise of stock options. This amount represents an excess tax benefit and has not been included in the gross deferred tax asset reflected for net operating losses. This amount will be recorded as an increase in additional paid in capital on the consolidated balance sheet once the excess benefits are "realized" in accordance with ASC 718, Compensation—Stock Compensation ("ASC 718"). As of December 31, 2014 and 2013, the Company had state net operating loss carryforwards of approximately $517.4 million and approximately $545.3 million, respectively, to offset future state taxable income, which have begun to expire and will continue to expire through 2034. The Company also had tax credit carryforwards of approximately $35.1 million and approximately $32.1 million as of December 31, 2014 and 2013, respectively, to offset future federal and state income taxes, which expire at various times through 2034. | |||||||||||
Utilization of net operating loss carryforwards and research and development credit carryforwards may be subject to a substantial annual limitation due to ownership change limitations that have occurred previously or that could occur in the future in accordance with Section 382 of the Internal Revenue Code of 1986 ("IRC Section 382") and with Section 383 of the Internal Revenue Code of 1986, as well as similar state provisions. These ownership changes may limit the amount of net operating loss carryforwards and research and development credit carryforwards that can be utilized annually to offset future taxable income and taxes, respectively. In general, an ownership change, as defined by IRC Section 382, results from transactions increasing the ownership of certain stockholders or public groups in the stock of a corporation by more than 50 percentage points over a three-year period. The Company has completed several financings since its inception which may have resulted in a change in control as defined by IRC Section 382, or could result in a change in control in the future. | |||||||||||
The Company applies ASC 740, Income Taxes ("ASC 740"). ASC 740 provides guidance on the accounting for uncertainty in income taxes recognized in financial statements and requires the impact of a tax position to be recognized in the financial statements if that position is more likely than not of being sustained by the taxing authority. As a result of the implementation of this guidance, the Company recognized no material adjustment for unrecognized income tax benefits. At December 31, 2014 and 2013, the Company had no unrecognized tax benefits. | |||||||||||
The Company will recognize interest and penalties related to uncertain tax positions in income tax expense. As of December 31, 2014, 2013 and 2012, the Company had no accrued interest or penalties related to uncertain tax positions and no amounts have been recognized in the Company's consolidated statements of operations. | |||||||||||
The statute of limitations for assessment by the Internal Revenue Service ("IRS") and state tax authorities is open for tax years ended December 31, 2013, 2012 and 2011, although carryforward attributes that were generated prior to tax year 2011 may still be adjusted upon examination by the IRS or state tax authorities if they either have been, or will be, used in a future period. There are currently no federal or state income tax audits in progress. | |||||||||||
Defined_Contribution_Plan
Defined Contribution Plan | 12 Months Ended |
Dec. 31, 2014 | |
Defined Contribution Plan | |
Defined Contribution Plan | 15. Defined Contribution Plan |
The Ironwood Pharmaceuticals, Inc. 401(k) Savings Plan is a defined contribution plan in the form of a qualified 401(k) plan in which substantially all employees are eligible to participate upon employment. Subject to certain IRS limits, eligible employees may elect to contribute from 1% to 100% of their compensation. Company contributions to the plan are at the sole discretion of the Company's board of directors. Currently, the Company provides a matching contribution of 75% of the employee's contributions, up to $6,000 annually. During the years ended December 31, 2014, 2013 and 2012, the Company recorded approximately $2.6 million, approximately $2.8 million and approximately $1.9 million of expense related to its 401(k) company match, respectively. | |
Related_Party_Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2014 | |
Related Party Transactions | |
Related Party Transactions | |
16. Related Party Transactions | |
The Company has and currently obtains legal services from a law firm that is an investor in the Company. The Company paid approximately $0.1 million, approximately $0.1 million and approximately $0.2 million in legal fees to this investor during the years ended December 31, 2014, 2013 and 2012, respectively. At both December 31, 2014 and 2013, the Company had less than $0.1 million of accounts payable due to this related party. | |
In September 2009, Forest became a related party when the Company sold to Forest 2,083,333 shares of the Company's convertible preferred stock. On July 1, 2014, Actavis became a related party when it completed its acquisition of Forest. In November 2009, Almirall became a related party when the Company sold to Almirall 681,819 shares of the Company's convertible preferred stock (Note 4). These shares of preferred stock converted to the Company's Class B common stock on a 1:1 basis upon the completion of the Company's IPO in February 2010. Amounts due to and due from Actavis and Almirall are reflected as related party accounts payable and related party accounts receivable, respectively. These balances are reported net of any balances due to or from the related party. At December 31, 2014, the Company did not have any related party accounts receivable associated with Almirall and approximately $25.8 million in related party accounts receivable, net of related party accounts payable, associated with Actavis. At December 31, 2013, the Company had less than $0.1 million in related party accounts receivable associated with Almirall and approximately $2.7 million in related party accounts receivable, net of related party accounts payable, associated with Actavis. | |
State_Grants
State Grants | 12 Months Ended |
Dec. 31, 2014 | |
State Grants | |
State Grants | 17. State Grants |
In the years ended December 31, 2012 and 2011, the Company was awarded an approximately $1.7 million and approximately $0.9 million tax incentive, respectively, associated with the Life Sciences Tax Incentive Program from the Massachusetts Life Sciences Center. The program was established in 2008 in order to incentivize life sciences companies to create new sustained jobs in Massachusetts. Jobs must be maintained for at least five years, during which time the grant proceeds can be recovered by the Massachusetts Department of Revenue ("DOR") if the Company does not meet and maintain its job creation commitments. The award received in 2011 was recognized as other income in the consolidated statement of operations in the third quarter of 2011, as the Company believed it had satisfied its job creation commitments. For the approximately $1.7 million in funds received in 2012, the Company believed it had satisfied its job creation commitments for the years 2012 and 2013 and recognized approximately $0.7 million as other income in the consolidated statement of operations for the year ended December 31, 2014. The remaining approximately $1.0 million is recorded as other current liabilities and is expected to be returned to the DOR, as the Company believes it did not satisfy the job creation commitments under the award. | |
Workforce_Reduction
Workforce Reduction | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Workforce Reduction. | |||||||||||||||||
Workforce Reduction | 18. Workforce Reduction | ||||||||||||||||
On January 8, 2014, the Company announced a headcount reduction of approximately 10% to align its workforce with its strategy to grow a leading GI therapeutics company. The field-based sales force and medical science liaison team were excluded from the workforce reduction. | |||||||||||||||||
During the three months ended March 31, 2014, the Company substantially completed the implementation of this reduction in workforce and, in accordance with ASC 420, Exit or Disposal Cost Obligations, recorded approximately $4.3 million of costs, including employee severance, benefits and related costs. These costs were adjusted to reduce expense by $0.1 million during the three months ended December 31, 2014, and are reflected in the Consolidated Statement of Operations as approximately $3.0 million in research and development expenses and approximately $1.2 million in selling, general and administrative expenses. The Company did not record any additional charges associated with this workforce reduction during the year ended December 31, 2014. All payments related to this reduction in workforce were made by the end of 2014. | |||||||||||||||||
The following table summarizes the charges related to the reduction in workforce for the year ended December 31, 2014 (in thousands): | |||||||||||||||||
Charges | Adjustments | Amounts | Non-cash | Amounts | |||||||||||||
Paid | Expense | Accrued at | |||||||||||||||
December 31, 2014 | |||||||||||||||||
Employee severance, benefits and related costs | $ | 4,334 | $ | (135 | ) | $ | (3,648 | ) | $ | (551 | ) | $ | — | ||||
| | | | | | | | | | | | | | | | | |
Total | $ | 4,334 | $ | (135 | ) | $ | (3,648 | ) | $ | (551 | ) | $ | — | ||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Selected_Quarterly_Financial_D
Selected Quarterly Financial Data (Unaudited) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Selected Quarterly Financial Data (Unaudited) | |||||||||||||||||
Selected Quarterly Financial Data (Unaudited) | 19. Selected Quarterly Financial Data (Unaudited) | ||||||||||||||||
The following table contains quarterly financial information for the years ended December 31, 2014 and 2013. The Company believes that the following information reflects all normal recurring adjustments necessary for a fair presentation of the information for the periods presented. The operating results for any quarter are not necessarily indicative of results for any future period. | |||||||||||||||||
First | Second | Third | Fourth | Total | |||||||||||||
Quarter | Quarter | Quarter | Quarter | Year | |||||||||||||
(in thousands, except per share data) | |||||||||||||||||
2014 | |||||||||||||||||
Collaborative arrangements revenue | $ | 14,605 | $ | 6,840 | $ | 16,918 | $ | 38,073 | $ | 76,436 | |||||||
Total cost and expenses | 58,992 | 61,959 | 53,657 | 71,198 | 245,806 | ||||||||||||
Other (expense) income, net | (5,239 | ) | (5,238 | ) | (5,249 | ) | (4,522 | ) | (20,248 | ) | |||||||
Net loss | (49,626 | ) | (60,357 | ) | (41,988 | ) | (37,647 | ) | (189,618 | ) | |||||||
Net loss per share—basic and diluted | $ | (0.38 | ) | $ | (0.44 | ) | $ | (0.30 | ) | $ | (0.27 | ) | $ | (1.39 | ) | ||
First | Second | Third | Fourth | Total | |||||||||||||
Quarter | Quarter | Quarter | Quarter | Year | |||||||||||||
(in thousands, except per share data) | |||||||||||||||||
2013 | |||||||||||||||||
Collaborative arrangements revenue | $ | 3,255 | $ | 9,663 | $ | 4,932 | $ | 5,031 | $ | 22,881 | |||||||
Total cost and expenses | 92,088 | 69,543 | 61,483 | 51,769 | 274,883 | ||||||||||||
Other (expense) income, net | (5,069 | ) | (5,269 | ) | (5,224 | ) | (5,248 | ) | (20,810 | ) | |||||||
Net loss | (93,902 | ) | (65,149 | ) | (61,775 | ) | (51,986 | ) | (272,812 | ) | |||||||
Net loss per share—basic and diluted | $ | (0.87 | ) | $ | (0.57 | ) | $ | (0.51 | ) | $ | (0.43 | ) | $ | (2.35 | ) | ||
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Summary of Significant Accounting Policies | |||||||||||||||||
Principles of Consolidation | Principles of Consolidation | ||||||||||||||||
The accompanying consolidated financial statements include the accounts of Ironwood Pharmaceuticals, Inc. and its wholly owned subsidiaries, Ironwood Pharmaceuticals Securities Corporation and Ironwood Pharmaceuticals GmbH. All intercompany transactions and balances are eliminated in consolidation. | |||||||||||||||||
Use of Estimates | Use of Estimates | ||||||||||||||||
The preparation of consolidated financial statements in accordance with U.S. generally accepted accounting principles requires the Company's management to make estimates and judgments that may affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, the Company's management evaluates its estimates, including those related to revenue recognition, available-for-sale securities, inventory valuation and related reserves, impairment of long-lived assets, balance sheet classification of notes payable, income taxes including the valuation allowance for deferred tax assets, research and development expense, contingencies and share-based compensation. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions. Changes in estimates are reflected in reported results in the period in which they become known. | |||||||||||||||||
Cash and Cash Equivalents | Cash and Cash Equivalents | ||||||||||||||||
The Company considers all highly liquid investment instruments with a remaining maturity when purchased of three months or less to be cash equivalents. Investments qualifying as cash equivalents primarily consist of money market funds and U.S. government-sponsored securities. The carrying amount of cash equivalents approximates fair value. The amount of cash equivalents included in cash and cash equivalents was approximately $61.0 million and approximately $67.3 million at December 31, 2014 and 2013, respectively. | |||||||||||||||||
Restricted Cash | Restricted Cash | ||||||||||||||||
The Company is contingently liable under unused letters of credit with a bank, related to the Company's facility lease and automobile lease agreements and credit card arrangements, in the amount of approximately $8.1 million as of December 31, 2014 and 2013. As a result, the Company has restricted cash of approximately $8.1 million as of December 31, 2014 and 2013 securing these letters of credit. The cash will be restricted until the termination of the leases and credit card arrangements. | |||||||||||||||||
Available-for-Sale Securities | Available-for-Sale Securities | ||||||||||||||||
The Company classifies all short-term investments with a remaining maturity when purchased of greater than three months as available-for-sale. Available-for-sale securities are recorded at fair value, with the unrealized gains and losses reported in other comprehensive income (loss). The amortized cost of debt securities in this category is adjusted for the amortization of premiums and accretion of discounts to maturity. Such amortization is included in interest and investment income. Realized gains and losses, interest, dividends, and declines in value judged to be other than temporary on available-for-sale securities are included in interest and investment income. | |||||||||||||||||
The cost of securities sold is based on the specific identification method for purposes of recording realized gains and losses. To determine whether an other-than-temporary impairment exists, the Company considers whether it has the ability and intent to hold the investment until a market price recovery, and whether evidence indicating the recoverability of the cost of the investment outweighs evidence to the contrary. There were no other-than-temporary impairments for the years ended December 31, 2014, 2013 and 2012. | |||||||||||||||||
Inventory | Inventory | ||||||||||||||||
Inventory is stated at the lower of cost or market with cost determined under the first-in, first-out basis. | |||||||||||||||||
The Company evaluates inventory levels quarterly and any inventory that has a cost basis in excess of its expected net realizable value, inventory that becomes obsolete, inventory in excess of expected sales requirements or inventory that fails to meet commercial sale specifications is written down with a corresponding charge to cost of revenue in the period that the impairment is first identified. The Company performs quarterly reviews of its inventory for potential excess or obsolescence and relies on data from several sources to estimate its net realizable value, including partner forecasts of projected inventory purchases, the Company's internal forecasts and related process, historical sales by geographic region, and the status of and progress toward commercialization of linaclotide in partnered territories. During the year ended December 31, 2014, the Company wrote-down approximately $20.3 million in inventory to an estimated net realizable value of approximately $5.0 million. This write-down was primarily attributable to Almirall's reduced inventory demand forecasts, mainly due to the suspension of commercialization of CONSTELLA in Germany and a challenging commercial environment throughout Europe. This write-down is more fully described in Note 7, Inventory, to these consolidated financial statements. | |||||||||||||||||
The Company capitalizes inventories manufactured in preparation for initiating sales of a product candidate when the related product candidate is considered to have a high likelihood of regulatory approval and the related costs are expected to be recoverable through sales of the inventories. In determining whether or not to capitalize such inventories, the Company evaluates, among other factors, information regarding the product candidate's safety and efficacy, the status of regulatory submissions and communications with regulatory authorities and the outlook for commercial sales, including the existence of current or anticipated competitive drugs and the availability of reimbursement. In addition, the Company evaluates risks associated with manufacturing the product candidate, including the ability of the Company's third-party suppliers to complete the validation batches, and the remaining shelf life of the inventories. | |||||||||||||||||
Costs associated with developmental products prior to satisfying the inventory capitalization criteria are charged to research and development expense as incurred. | |||||||||||||||||
Concentrations of Suppliers | Concentrations of Suppliers | ||||||||||||||||
The Company relies on third-party manufacturers and its collaboration partners to manufacture the linaclotide active pharmaceutical ingredient ("API") and final linaclotide drug product. Currently, there are two third-party manufacturers approved for the production of the linaclotide API in three facilities. The Company's collaboration partners, except AstraZeneca in China, (Actavis, Almirall and Astellas) are responsible for drug product manufacturing of linaclotide into finished product for their respective territories. The Company also has an agreement with another independent third party to serve as a second source of drug product manufacturing of linaclotide for its partnered territories. If any of the Company's suppliers were to limit or terminate production or otherwise fail to meet the quality or delivery requirements needed to satisfy the supply commitments, the process of locating and qualifying alternate sources could require up to several months, during which time the Company's production could be delayed. Such delays could have a material adverse effect on the Company's business, financial position and results of operations. | |||||||||||||||||
Accounts Receivable and Related Valuation Account | Accounts Receivable and Related Valuation Account | ||||||||||||||||
The Company makes judgments as to its ability to collect outstanding receivables and provides an allowance for receivables when collection becomes doubtful. Provisions are made based upon a specific review of all significant outstanding invoices and the overall quality and age of those invoices not specifically reviewed. The Company's receivables primarily relate to amounts reimbursed under its collaboration and license agreements. The Company believes that credit risks associated with these collaborators are not significant. To date, the Company has not had any write-offs of bad debt, and as such, the Company did not have an allowance for doubtful accounts as of December 31, 2014 and 2013. | |||||||||||||||||
Concentrations of Credit Risk | |||||||||||||||||
Concentrations of Credit Risk | |||||||||||||||||
Financial instruments that subject the Company to credit risk primarily consist of cash and cash equivalents, restricted cash, available-for-sale securities, and accounts receivable. The Company maintains its cash and cash equivalent balances with high-quality financial institutions and, consequently, the Company believes that such funds are subject to minimal credit risk. The Company's available-for-sale investments primarily consist of U.S. Treasury securities and certain U.S. government sponsored securities and potentially subject the Company to concentrations of credit risk. The Company has adopted an investment policy which limits the amounts the Company may invest in any one type of investment, and requires all investments held by the Company to be at least A+ rated, thereby reducing credit risk exposure. | |||||||||||||||||
Accounts receivable, including related party accounts receivable, primarily consist of amounts due under the collaboration agreement with Actavis and the license agreement with Astellas (Note 4) for which the Company does not obtain collateral. Accounts receivable or payable to or from Actavis and Almirall are presented as related party transactions on the consolidated balance sheets as both entities own common stock of the Company. | |||||||||||||||||
The percentages of revenue recognized from significant customers of the Company in the years ended December 31, 2014, 2013 and 2012 as well as the account receivable balances, net of any payables due, at December 31, 2014 and 2013 are included in the following table: | |||||||||||||||||
Accounts Receivable | Revenue | ||||||||||||||||
December 31, | Years Ended December 31, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2012 | |||||||||||||
Collaborative Partner: | |||||||||||||||||
Actavis | 100 | % | 84 | % | 62 | % | 13 | % | 67 | % | |||||||
Almirall | — | % | — | % | 10 | % | 57 | % | 14 | % | |||||||
Astellas | — | % | 16 | % | 23 | % | 25 | % | 3 | % | |||||||
AstraZeneca | — | % | — | % | 5 | % | 5 | % | 16 | % | |||||||
As of December 31, 2014 and 2013, the Company was in a net payable position with AstraZeneca; as such, there was no accounts receivable due from AstraZeneca as of December 31, 2014 or 2013. For the years ended December 31, 2014, 2013 and 2012, no additional customers accounted for more than 10% of the Company's revenue. | |||||||||||||||||
Revenue Recognition | Revenue Recognition | ||||||||||||||||
The Company's revenue is generated primarily through collaborative research and development and licensing agreements. The terms of these agreements contain multiple deliverables which may include (i) licenses, (ii) research and development activities, including participation on joint steering committees, and (iii) the manufacture of finished drug product, API, or development materials for the collaborative partner which are reimbursed at a contractually determined rate. Non-refundable payments to the Company under these agreements may include (i) up-front license fees, (ii) payments for research and development activities, (iii) payments for the manufacture of finished drug product, API, or development materials, (iv) payments based upon the achievement of certain milestones, and (v) royalties on product sales. Additionally, the Company may receive its share of the net profits or bear its share of the net losses from the sale of linaclotide in the U.S. and China through its collaborations with Actavis and AstraZeneca, respectively. | |||||||||||||||||
At December 31, 2014, the Company had collaboration agreements with Actavis and AstraZeneca and license agreements with Almirall and Astellas. Refer to Note 4, "Collaboration and License Agreements," for additional discussion of these agreements. | |||||||||||||||||
The Company recognizes revenue when there is persuasive evidence that an arrangement exists, services have been rendered or delivery has occurred, the price is fixed or determinable, and collection is reasonably assured. | |||||||||||||||||
For certain of our arrangements, particularly the license agreement with Almirall, it is required that taxes be withheld on payments to the Company. The Company has adopted a policy to recognize revenue net of these tax withholdings. | |||||||||||||||||
Agreements Entered into Prior to January 1, 2011 | |||||||||||||||||
For arrangements that include multiple deliverables and were entered into prior to January 1, 2011, the Company follows the provisions of the Accounting Standards Codification ("ASC") Topic 605-25, Revenue Recognition—Multiple-Element Arrangements ("ASC 605-25"), in accounting for these agreements. Under ASC 605-25, the Company was required to identify the deliverables included within the agreement and evaluate which deliverables represent separate units of accounting. Collaborative research and development and licensing agreements that contained multiple deliverables were divided into separate units of accounting when the following criteria were met: | |||||||||||||||||
• | Delivered element(s) had value to the collaborator on a standalone basis, | ||||||||||||||||
• | There was objective and reliable evidence of the fair value of the undelivered obligation(s), and | ||||||||||||||||
• | If the arrangement included a general right of return relative to the delivered item(s), delivery or performance of the undelivered item(s) was considered probable and substantially within the Company's control. | ||||||||||||||||
The Company allocated arrangement consideration among the separate units of accounting either on the basis of each unit's respective fair value or using the residual method, and applied the applicable revenue recognition criteria to each of the separate units. If the separation criteria were not met, revenue of the combined unit of accounting was recorded based on the method appropriate for the last delivered item. | |||||||||||||||||
Up-Front License Fees | |||||||||||||||||
The Company recognizes revenue from nonrefundable, up-front license fees on a straight-line basis over the contracted or estimated period of performance, which is typically the period over which the research and development is expected to occur or manufacturing services are expected to be provided. Accordingly, the Company is required to make estimates regarding the drug development and commercialization timelines for drugs and drug candidates being developed pursuant to the applicable agreement. The determination of the length of the period over which to recognize the revenue is subject to judgment and estimation and can have an impact on the amount of revenue recognized in a given period. Quarterly, the Company reassesses its period of substantial involvement over which the Company amortizes its up-front license fees and makes adjustments as appropriate. The Company's estimates regarding the period of performance under its collaborative research and development and licensing agreements have changed in the past and may change in the future. In the event that a license were to be terminated, the Company would recognize as revenue any portion of the up-front fee that had not previously been recorded as revenue, but was classified as deferred revenue at the date of such termination. At December 31, 2014, only a portion of Astellas' up-front license fee remains deferred as the period of performance under the Actavis and Almirall arrangements ended in the quarter ended September 30, 2012. | |||||||||||||||||
Agreements Entered into or Materially Modified on or after January 1, 2011 | |||||||||||||||||
The Company evaluates revenue from new multiple element agreements entered into on or after January 1, 2011 under ASU No. 2009-13, Multiple-Deliverable Revenue Arrangements ("ASU 2009-13"). The Company also evaluates whether amendments to its multiple element arrangements are considered material modifications that are subject to the application of ASU 2009-13. This evaluation requires management to assess all relevant facts and circumstances and to make subjective determinations and judgments. As part of this assessment, the Company considers whether the modification results in a material change to the arrangement, including whether there is a change in total arrangement consideration that is more than insignificant, whether there are changes in the deliverables included in the arrangement, whether there is a change in the term of the arrangement and whether there is a significant modification to the delivery schedule for contracted deliverables. | |||||||||||||||||
When evaluating multiple element arrangements under ASU 2009-13, the Company considers whether the deliverables under the arrangement represent separate units of accounting. This evaluation requires subjective determinations and requires management to make judgments about the individual deliverables and whether such deliverables are separable from the other aspects of the contractual relationship. In determining the units of accounting, management evaluates certain criteria, including whether the deliverables have standalone value, based on the consideration of the relevant facts and circumstances for each arrangement. Factors considered in this determination include the research, manufacturing and commercialization capabilities of the partner and the availability of peptide research and manufacturing expertise in the general marketplace. In addition, the Company considers whether the collaborator can use the license or other deliverables for their intended purpose without the receipt of the remaining elements, and whether the value of the deliverable is dependent on the undelivered items and whether there are other vendors that can provide the undelivered items. | |||||||||||||||||
The consideration received is allocated among the separate units of accounting using the relative selling price method, and the applicable revenue recognition criteria are applied to each of the separate units. | |||||||||||||||||
The Company determines the estimated selling price for deliverables using vendor-specific objective evidence ("VSOE") of selling price, if available, third-party evidence ("TPE") of selling price if VSOE is not available, or best estimate of selling price ("BESP") if neither VSOE nor TPE is available. Determining the BESP for a deliverable requires significant judgment. The Company uses BESP to estimate the selling price for licenses to the Company's proprietary technology, since the Company often does not have VSOE or TPE of selling price for these deliverables. In those circumstances where the Company utilizes BESP to determine the estimated selling price of a license to the Company's proprietary technology, the Company considers market conditions as well as entity-specific factors, including those factors contemplated in negotiating the agreements as well as internally developed models that include assumptions related to the market opportunity, estimated development costs, probability of success and the time needed to commercialize a product candidate pursuant to the license. In validating the Company's BESP, the Company evaluates whether changes in the key assumptions used to determine the BESP will have a significant effect on the allocation of arrangement consideration between multiple deliverables. | |||||||||||||||||
At December 31, 2014, the Company has one collaboration agreement with AstraZeneca that is being accounted for under ASU 2009-13. | |||||||||||||||||
Up-Front License Fees | |||||||||||||||||
When management believes the license to its intellectual property has stand-alone value, the Company generally recognizes revenue attributed to the license upon delivery. When management believes the license to its intellectual property does not have stand-alone value from the other deliverables to be provided in the arrangement, it is combined with other deliverables and the revenue of the combined unit of accounting is recorded based on the method appropriate for the last delivered item. | |||||||||||||||||
Milestones | |||||||||||||||||
At the inception of each arrangement that includes pre-commercial milestone payments, the Company evaluates whether each pre-commercial milestone is substantive, in accordance with ASU No. 2010-17, Revenue Recognition—Milestone Method ("ASU 2010-17"), adopted on January 1, 2011. This evaluation includes an assessment of whether (a) the consideration is commensurate with either (1) the entity's performance to achieve the milestone, or (2) the enhancement of the value of the delivered item(s) as a result of a specific outcome resulting from the entity's performance to achieve the milestone, (b) the consideration relates solely to past performance and (c) the consideration is reasonable relative to all of the deliverables and payment terms within the arrangement. The Company evaluates factors such as the scientific, clinical, regulatory, commercial and other risks that must be overcome to achieve the respective milestone, the level of effort and investment required and whether the milestone consideration is reasonable relative to all deliverables and payment terms in the arrangement in making this assessment. At December 31, 2014, the Company had no pre-commercial milestones that were deemed substantive. If a substantive pre-commercial milestone is achieved and collection of the related receivable is reasonably assured, the Company recognizes revenue related to the milestone in its entirety in the period in which the milestone is achieved. If the Company were to achieve milestones that are considered substantive under any of the Company's collaborations, the Company may experience significant fluctuations in collaborative arrangements revenue from quarter to quarter and year to year depending on the timing of achieving such substantive milestones. In those circumstances where a pre-commercial milestone is not substantive, the Company recognizes as revenue on the date the milestone is achieved an amount equal to the applicable percentage of the performance period that had elapsed as of the date the milestone was achieved, with the balance being deferred and recognized over the remaining period of performance. Pre-commercial milestone payments received prior to the adoption of ASU 2010-17 continue to be recognized over the remaining period of performance. | |||||||||||||||||
Commercial milestones are accounted for as royalties and are recorded as revenue upon achievement of the milestone, assuming all other revenue recognition criteria are met. | |||||||||||||||||
Net Profit or Net Loss Sharing | |||||||||||||||||
In accordance with ASC 808 Topic, Collaborative Arrangements, and ASC 605-45, Principal Agent Considerations, the Company considers the nature and contractual terms of the arrangement and the nature of the Company's business operations to determine the classification of the transactions under the Company's collaboration agreements. The Company records revenue transactions gross in the consolidated statements of operations if it is deemed the principal in the transaction, which includes being the primary obligor and having the risks and rewards of ownership. | |||||||||||||||||
The Company recognizes its share of the pre-tax commercial net profit or net loss generated from the sales of LINZESS in the U.S. in the period the product sales are reported by Actavis and related cost of goods sold and selling, general and administrative expenses are incurred by the Company and its collaboration partner. These amounts are partially determined based on amounts provided by Actavis and involve the use of estimates and judgments, such as product sales allowances and accruals related to prompt payment discounts, chargebacks, governmental and contractual rebates, wholesaler fees, product returns, and co-payment assistance costs, which could be adjusted based on actual results in the future. The Company is highly dependent on Actavis for timely and accurate information regarding any net revenues realized from sales of LINZESS and the costs incurred in selling it, in order to accurately report its results of operations. For the periods covered in the consolidated financial statements presented, there have been no material changes to prior period estimates of revenues, cost of goods sold or selling, general and administrative expenses associated with the sales of LINZESS in the U.S. However, if the Company does not receive timely and accurate information or incorrectly estimates activity levels associated with the collaboration at a given point in time, the Company could be required to record adjustments in future periods. | |||||||||||||||||
The Company records its share of the net profits or net losses from the sales of LINZESS in the U.S. on a net basis and presents the settlement payments to and from Actavis as collaboration expense or collaborative arrangements revenue, as applicable, as the Company is not the primary obligor and does not have the risks and rewards of ownership in the collaboration agreement with Actavis. The Company and Actavis settle the cost sharing quarterly, such that the Company's statement of operations reflects 50% of the pre-tax net profit or loss generated from sales of LINZESS in the U.S. Prior to the fourth quarter of 2012, selling, general and administrative cost-sharing payments were presented within selling, general and administrative expenses. The cost-sharing payments to Actavis for the nine months ended September 30, 2012 were reclassified to conform to the current period's presentation. | |||||||||||||||||
Royalties on Product Sales | |||||||||||||||||
The Company receives or expects to receive in the future royalty revenues under certain of the Company's license or collaboration agreements. If the Company does not have any future performance obligations under these license or collaborations agreements, the Company records these revenues as earned. To the extent the Company does not have access to the royalty reports from the Company's partners or the ability to accurately estimate the royalty revenue in the period earned, the Company records such royalty revenues one quarter in arrears. | |||||||||||||||||
Other | |||||||||||||||||
The Company produces finished drug product, API and development materials for certain of its collaborators. The Company recognizes revenue on finished drug product, API and development materials when the material has passed all quality testing required for collaborator acceptance, delivery has occurred, title and risk of loss have transferred to the collaborator, the price is fixed or determinable, and collection is reasonably assured. As it relates to development materials and API produced for Almirall and Astellas, the Company is reimbursed at a contracted rate. Such reimbursements are considered as part of revenue generated pursuant to the Almirall and Astellas license agreements and are presented as collaborative arrangements revenue. Any finished drug product, API and development materials currently produced for Actavis or AstraZeneca are recognized in accordance with the cost-sharing provisions of the Actavis and AstraZeneca collaboration agreements, respectively. | |||||||||||||||||
Cost of Revenue | Cost of Revenue | ||||||||||||||||
Cost of revenue is recognized upon shipment of linaclotide API to certain of the Company's licensing partners outside of the U.S. and consists of the internal and external costs of producing such API. The costs of API were primarily recorded as research and development expenses in the periods prior to July 1, 2012. In the third quarter of 2012, the Company began capitalizing inventory costs for linaclotide API manufactured in preparation for its launch of linaclotide in the U.S. and Europe based on its evaluation of, among other factors, the status of the LINZESS New Drug Applications ("NDAs") in the U.S., the Committee for Medicinal Products for Human Use positive recommendation to grant marketing approval for CONSTELLA in the E.U., and the ability of the Company's third-party suppliers to successfully manufacture commercial quantities of linaclotide API, which provided the Company with reasonable assurance that the net realizable value of the inventory would be recoverable. As of December 31, 2012, the previously expensed commercial API inventory was substantially utilized. | |||||||||||||||||
During the year ending December 31, 2014, the Company wrote-down approximately $20.3 million in inventory to an estimated net realizable value of approximately $5.0 million. This write-down was primarily attributable to Almirall's reduced inventory demand forecasts, mainly due to the suspension of commercialization of CONSTELLA in Germany and a challenging commercial environment throughout Europe. This write-down is more fully described in Note 7, Inventory, to these consolidated financial statements. | |||||||||||||||||
Research and Development Costs | Research and Development Costs | ||||||||||||||||
The Company expenses research and development costs to operations as incurred. The Company defers and capitalizes nonrefundable advance payments made by the Company for research and development activities until the related goods are received or the related services are performed. | |||||||||||||||||
Research and development expenses are comprised of costs incurred in performing research and development activities, including salary, benefits and other employee-related expenses; share-based compensation expense; laboratory supplies and other direct expenses; facilities expenses; overhead expenses; third-party contractual costs relating to nonclinical studies and clinical trial activities and related contract manufacturing expenses, development of manufacturing processes and regulatory registration of third-party manufacturing facilities; costs associated with linaclotide API prior to the Company concluding that regulatory approval is probable and that its net realizable value is recoverable; licensing fees for our product candidates; and other outside expenses. | |||||||||||||||||
The Company has entered into collaboration agreements with Actavis and AstraZeneca pursuant to which it shares research and development expenses with the collaborators. The Company records expenses incurred under the collaboration arrangements for such work as research and development expense. Because the collaboration arrangements are cost-sharing arrangements, the Company concluded that when there is a period during the collaboration arrangements during which the Company receives payments from Actavis or AstraZeneca, the Company records the payments by Actavis or AstraZeneca for their share of the development effort as a reduction of research and development expense. Payments to Actavis or AstraZeneca are recorded as incremental research and development expense. | |||||||||||||||||
Selling, General and Administrative Expenses | |||||||||||||||||
Selling, General and Administrative Expenses | |||||||||||||||||
The Company expenses selling, general and administrative costs to operations as incurred. Selling, general and administrative expense consists primarily of compensation, benefits and other employee-related expenses for personnel in our administrative, finance, legal, information technology, business development, commercial, sales, marketing, communications and human resource functions. Other costs include the legal costs of pursuing patent protection of the Company's intellectual property, general and administrative related facility costs and professional fees for accounting and legal services. | |||||||||||||||||
Under the Actavis and AstraZeneca collaboration agreements, the Company is reimbursed for certain selling, general and administrative expenses and it nets these reimbursements against selling, general and administrative expenses as incurred. Payments to Actavis or AstraZeneca are recorded as incremental selling, general and administrative expense. | |||||||||||||||||
Beginning in the fourth quarter of 2012, the Company includes Actavis' selling, general and administrative cost-sharing payments in the calculation of the net profits and net losses from the sale of LINZESS in the U.S. and presents the net payment to or from Actavis as collaboration expense or collaborative arrangements revenue, as applicable. The selling, general and administrative cost-sharing payments to Actavis for the nine months ended September 30, 2012 were reclassified to conform to the current presentation. | |||||||||||||||||
Share-Based Compensation | Share-Based Compensation | ||||||||||||||||
The Company's stock-based compensation programs grant awards which have included stock awards, restricted stock, and stock options. Share-based compensation is recognized as an expense in the financial statements based on the grant date fair value over the requisite service period. For awards that vest based on service conditions, the Company uses the straight-line method to allocate compensation expense to reporting periods. The grant date fair value of options granted is calculated using the Black-Scholes option-pricing model, which requires the use of subjective assumptions including volatility and expected term, among others. | |||||||||||||||||
The Company records the expense for stock option grants subject to performance-based milestone vesting using the accelerated attribution method over the remaining service period when management determines that achievement of the milestone is probable. Management evaluates when the achievement of a performance-based milestone is probable based on the relative satisfaction of the performance conditions as of the reporting date. | |||||||||||||||||
The Company records the expense of services rendered by non-employees based on the estimated fair value of the stock option using the Black-Scholes option-pricing model. The fair value of unvested non-employee awards is remeasured at each reporting period and expensed over the vesting term of the underlying stock options. | |||||||||||||||||
During the quarter ended March 31, 2014, the Company transitioned from a "simplified method" to the use of its historical data when estimating the expected term of stock option grants for purposes of determining stock-based compensation expense. This change did not have a significant impact on the Company's financial position or results of operations for the year ended December 31, 2014. | |||||||||||||||||
Patent Costs | Patent Costs | ||||||||||||||||
The Company incurred and recorded as operating expense legal and other fees related to patents of approximately $1.3 million, approximately $3.2 million, and approximately $3.5 million for the years ended December 31, 2014, 2013 and 2012, respectively. These costs were charged to selling, general and administrative expenses as incurred. | |||||||||||||||||
Net Income (Loss) Per Share | Net Income (Loss) Per Share | ||||||||||||||||
The Company calculates basic net income (loss) per common share and diluted net loss per common share by dividing the net income (loss) by the weighted average number of common shares outstanding during the period. Diluted net income per common share is computed by dividing net income by the diluted number of shares outstanding during the period. Except where the result would be antidilutive to net income, diluted net income per share is computed assuming the exercise of common stock options and the vesting of restricted stock (using the treasury stock method), as well as their related income tax effects. The Company allocates undistributed earnings between the classes on a one-to-one basis when computing net income (loss) per share. As a result, basic and diluted net income (loss) per Class A and Class B shares are equivalent. | |||||||||||||||||
Property and Equipment | Property and Equipment | ||||||||||||||||
Property and equipment, including leasehold improvements, are recorded at cost, and are depreciated when placed into service using the straight-line method based on their estimated useful lives as follows: | |||||||||||||||||
Asset Description | Estimated Useful Life | ||||||||||||||||
(In Years) | |||||||||||||||||
Manufacturing equipment | 10 | ||||||||||||||||
Laboratory equipment | 5 | ||||||||||||||||
Computer and office equipment | 3 | ||||||||||||||||
Furniture and fixtures | 7 | ||||||||||||||||
Software | 3 | ||||||||||||||||
Included in property and equipment are certain costs of software obtained for internal use. Costs incurred during the preliminary project stage are expensed as incurred, while costs incurred during the application development stage are capitalized and amortized over the estimated useful life of the software. The Company also capitalizes costs related to specific upgrades and enhancements when it is probable the expenditures will result in additional functionality. Maintenance and training costs related to software obtained for internal use are expensed as incurred. | |||||||||||||||||
Leasehold improvements are amortized over the shorter of the estimated useful life of the asset or the lease term. Capital lease assets are amortized over the lease term. However, if ownership was transferred by the end of the capital lease, or there was a bargain purchase option, such capital lease assets would be amortized over the useful life that would be assigned if such assets were owned. | |||||||||||||||||
Costs for capital assets not yet placed into service have been capitalized as construction in progress, and will be depreciated in accordance with the above guidelines once placed into service. Maintenance and repair costs are expensed as incurred. | |||||||||||||||||
Income Taxes | Income Taxes | ||||||||||||||||
The Company provides for income taxes under the liability method. Deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates in effect when the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to reflect the uncertainty associated with their ultimate realization. | |||||||||||||||||
The Company accounts for uncertain tax positions recognized in the consolidated financial statements by prescribing a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. | |||||||||||||||||
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets | ||||||||||||||||
The Company regularly reviews the carrying amount of its long-lived assets to determine whether indicators of impairment may exist, which warrant adjustments to carrying values or estimated useful lives. If indications of impairment exist, projected future undiscounted cash flows associated with the asset are compared to the carrying amount to determine whether the asset's value is recoverable. If the carrying value of the asset exceeds such projected undiscounted cash flows, the asset will be written down to its estimated fair value. There were no significant impairments of long-lived assets for the years ended December 31, 2014, 2013 or 2012. | |||||||||||||||||
Comprehensive Income (Loss) | Comprehensive Income (Loss) | ||||||||||||||||
Comprehensive income (loss) is defined as the change in equity of a business enterprise during a period from transactions, and other events and circumstances from non-owner sources and currently consists of net loss and changes in unrealized gains and losses on available-for-sale securities. | |||||||||||||||||
Segment Information | Segment Information | ||||||||||||||||
Operating segments are components of an enterprise for which separate financial information is available and is evaluated regularly by the Company's chief operating decision-maker in deciding how to allocate resources and in assessing performance. The Company currently operates in one reportable business segment—human therapeutics. | |||||||||||||||||
Subsequent Events | Subsequent Events | ||||||||||||||||
The Company considers events or transactions that have occurred after the balance sheet date of December 31, 2014, but prior to the filing of the financial statements with the Securities and Exchange Commission to provide additional evidence relative to certain estimates or to identify matters that require additional recognition or disclosure. Subsequent events have been evaluated through the filing of the financial statements accompanying this Annual Report on Form 10-K. | |||||||||||||||||
New Accounting Pronouncements | |||||||||||||||||
New Accounting Pronouncements | |||||||||||||||||
From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board ("FASB") or other standard setting bodies that are adopted by the Company as of the specified effective date. The Company did not adopt any new accounting pronouncements during the year ended December 31, 2014 that had a material effect on its consolidated financial statements. | |||||||||||||||||
In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"), which supersedes the revenue recognition requirements in Accounting Standards Codification Topic 605, Revenue Recognition, and most industry-specific guidance. The new standard requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The update also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016 and should be applied retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying this update recognized at the date of initial application. The Company is currently evaluating the potential impact that ASU 2014-09 may have on its financial position and results of operations. | |||||||||||||||||
No other accounting standards known by the Company to be applicable to it that have been issued or proposed by the FASB or other standard-setting bodies and that do not require adoption until a future date are expected to have a material impact on the Company's consolidated financial statements upon adoption. | |||||||||||||||||
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Summary of Significant Accounting Policies | |||||||||||||||||
Schedule of percentages of revenue and accounts receivable recognized from significant customers | |||||||||||||||||
Accounts Receivable | Revenue | ||||||||||||||||
December 31, | Years Ended December 31, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2012 | |||||||||||||
Collaborative Partner: | |||||||||||||||||
Actavis | 100 | % | 84 | % | 62 | % | 13 | % | 67 | % | |||||||
Almirall | — | % | — | % | 10 | % | 57 | % | 14 | % | |||||||
Astellas | — | % | 16 | % | 23 | % | 25 | % | 3 | % | |||||||
AstraZeneca | — | % | — | % | 5 | % | 5 | % | 16 | % | |||||||
Schedule of estimated useful life | |||||||||||||||||
Asset Description | Estimated Useful Life | ||||||||||||||||
(In Years) | |||||||||||||||||
Manufacturing equipment | 10 | ||||||||||||||||
Laboratory equipment | 5 | ||||||||||||||||
Computer and office equipment | 3 | ||||||||||||||||
Furniture and fixtures | 7 | ||||||||||||||||
Software | 3 | ||||||||||||||||
Net_Loss_Per_Share_Tables
Net Loss Per Share (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Net Loss Per Share | |||||||||||
Schedule of computation of basic and diluted net loss per share | |||||||||||
The following table sets forth the computation of basic and diluted net loss per share (in thousands, except per share amounts): | |||||||||||
Years Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Numerator: | |||||||||||
Net loss | $ | (189,618 | ) | $ | (272,812 | ) | $ | (72,624 | ) | ||
Denominator: | |||||||||||
Weighted average number of common shares used in net loss per share—basic and diluted | 136,811 | 115,852 | 106,403 | ||||||||
| | | | | | | | | | | |
Net loss per share—basic and diluted | $ | (1.39 | ) | $ | (2.35 | ) | $ | (0.68 | ) | ||
| | | | | | | | | | | |
| | | | | | | | | | | |
Schedule of potentially dilutive securities that have been excluded from computation of diluted weighted average shares outstanding | The following potentially dilutive securities have been excluded from the computation of diluted weighted average shares outstanding as they would be anti-dilutive (in thousands): | ||||||||||
Years Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Options to purchase common stock | 19,958 | 20,928 | 19,540 | ||||||||
Shares subject to repurchase | 99 | — | 80 | ||||||||
| | | | | | | | | | | |
20,057 | 20,928 | 19,620 | |||||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Collaboration_and_License_Agre1
Collaboration and License Agreements (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Schedule of revenue attributable to transactions from collaborative and license arrangements | The following table provides amounts by year included in our consolidated statements of operations as Collaborative arrangements revenue attributable to transactions from these collaborative and license arrangements (in thousands): | ||||||||||
Collaborative Arrangements | |||||||||||
Revenue | |||||||||||
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Actavis plc | $ | 47,682 | $ | 2,957 | $ | 100,442 | |||||
AstraZeneca AB | 3,417 | 1,044 | 24,710 | ||||||||
Almirall, S.A. | 7,587 | 13,103 | 21,205 | ||||||||
Astellas Pharma Inc. | 17,750 | 5,777 | 3,888 | ||||||||
| | | | | | | | | | | |
Total collaborative arrangements revenue | $ | 76,436 | $ | 22,881 | $ | 150,245 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Actavis Plc | |||||||||||
Schedule of revenue attributable to transactions from collaborative and license arrangements | The Company recognized collaborative arrangements revenue from the Actavis collaboration agreement during the years ended December 31, 2014, 2013 and 2012 as follows (in thousands): | ||||||||||
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Collaborative arrangements revenue related to sales of LINZESS(1)(2) | $ | 47,618 | $ | 2,914 | $ | — | |||||
Royalty revenue | 64 | — | — | ||||||||
Pre-commercial collaborative arrangements revenue | — | — | 100,442 | ||||||||
Sale of API | — | 43 | — | ||||||||
| | | | | | | | | | | |
Total collaborative arrangements revenue | $ | 47,682 | $ | 2,957 | $ | 100,442 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Schedule of amounts recorded for commercial efforts related to LIZNESS | The following table presents the amounts recorded by the Company for commercial efforts related to LINZESS in the years ended December 31, 2014, 2013 and 2012 (in thousands): | ||||||||||
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Collaborative arrangements revenue(1)(2) | $ | 47,618 | $ | 2,914 | $ | — | |||||
Collaboration expense | — | (42,074 | ) | (16,030 | ) | ||||||
Selling, general and administrative costs incurred by the Company(1) | (31,646 | ) | (33,839 | ) | (5,092 | ) | |||||
| | | | | | | | | | | |
The Company's share of net profit (loss) | $ | 15,972 | $ | (72,999 | ) | $ | (21,122 | ) | |||
| | | | | | | | | | | |
| | | | | | | | | | | |
-1 | Includes only collaborative arrangement revenue or selling, general and administrative costs attributable to the cost-sharing arrangement with Actavis. | ||||||||||
-2 | Includes net profit share adjustments of approximately $1.7 million recorded during the year ended December 31, 2014, as described above. | ||||||||||
Fair_Value_of_Financial_Instru1
Fair Value of Financial Instruments (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Fair Value of Financial Instruments | ||||||||||||||
Schedule of assets measured at fair value on a recurring basis | The following tables present the assets the Company has measured at fair value on a recurring basis (in thousands): | |||||||||||||
Fair Value Measurements at Reporting Date Using | ||||||||||||||
Description | December 31, | Quoted Prices in | Significant Other | Significant | ||||||||||
2014 | Active Markets for | Observable | Unobservable | |||||||||||
Identical Assets | Inputs | Inputs | ||||||||||||
(Level 1) | (Level 2) | (Level 3) | ||||||||||||
Cash and cash equivalents: | ||||||||||||||
Money market funds | $ | 60,966 | $ | 60,966 | $ | — | $ | — | ||||||
Available-for-sale securities: | ||||||||||||||
U.S. Treasury securities | 24,005 | 24,005 | — | — | ||||||||||
U.S. government-sponsored securities | 150,032 | — | 150,032 | — | ||||||||||
| | | | | | | | | | | | | | |
Total | $ | 235,003 | $ | 84,971 | $ | 150,032 | $ | — | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Fair Value Measurements at Reporting Date Using | ||||||||||||||
Description | December 31, | Quoted Prices in | Significant Other | Significant | ||||||||||
2013 | Active Markets for | Observable | Unobservable | |||||||||||
Identical Assets | Inputs | Inputs | ||||||||||||
(Level 1) | (Level 2) | (Level 3) | ||||||||||||
Cash and cash equivalents: | ||||||||||||||
Money market funds | $ | 59,747 | $ | 59,747 | $ | — | $ | — | ||||||
U.S. government-sponsored securities | 7,505 | — | 7,505 | — | ||||||||||
Available-for-sale securities: | ||||||||||||||
U.S. Treasury securities | 7,253 | 7,253 | — | — | ||||||||||
U.S. government-sponsored securities | 114,859 | — | 114,859 | — | ||||||||||
| | | | | | | | | | | | | | |
Total | $ | 189,364 | $ | 67,000 | $ | 122,364 | $ | — | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
AvailableforSale_Securities_Ta
Available-for-Sale Securities (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Available-for-Sale Securities | ||||||||||||||
Schedule of summary of available-for-sale securities | ||||||||||||||
The following tables summarize the available-for-sale securities held at December 31, 2014 and 2013 (in thousands): | ||||||||||||||
Amortized Cost | Gross | Gross | Fair Value | |||||||||||
Unrealized | Unrealized | |||||||||||||
Gains | Losses | |||||||||||||
December 31, 2014: | ||||||||||||||
U.S. government-sponsored securities | $ | 150,055 | $ | 2 | $ | (25 | ) | $ | 150,032 | |||||
U.S. Treasury securities | 24,001 | 4 | — | 24,005 | ||||||||||
| | | | | | | | | | | | | | |
Total | $ | 174,056 | $ | 6 | $ | (25 | ) | $ | 174,037 | |||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Amortized Cost | Gross | Gross | Fair Value | |||||||||||
Unrealized | Unrealized | |||||||||||||
Gains | Losses | |||||||||||||
December 31, 2013: | ||||||||||||||
U.S. government-sponsored securities | $ | 114,857 | $ | 6 | $ | (4 | ) | $ | 114,859 | |||||
U.S. Treasury securities | 7,253 | — | — | 7,253 | ||||||||||
| | | | | | | | | | | | | | |
Total | $ | 122,110 | $ | 6 | $ | (4 | ) | $ | 122,112 | |||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Inventory_Tables
Inventory (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Inventory | ||||||||
Schedule of Inventory | Inventory consisted of the following (in thousands): | |||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Raw materials | $ | 4,954 | $ | 22,145 | ||||
Property_and_Equipment_Tables
Property and Equipment (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Property and Equipment | ||||||||
Schedule of property and equipment | Property and equipment, net consisted of the following (in thousands): | |||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Manufacturing equipment | $ | 3,623 | $ | 2,812 | ||||
Laboratory equipment | 15,126 | 14,039 | ||||||
Computer and office equipment | 5,185 | 5,202 | ||||||
Furniture and fixtures | 2,093 | 2,365 | ||||||
Software | 13,921 | 12,352 | ||||||
Construction in process | 1,457 | 996 | ||||||
Leased vehicles | 4,472 | 4,472 | ||||||
Leasehold improvements | 36,928 | 36,827 | ||||||
| | | | | | | | |
82,805 | 79,065 | |||||||
Less accumulated depreciation and amortization | (52,979 | ) | (41,689 | ) | ||||
| | | | | | | | |
$ | 29,826 | $ | 37,376 | |||||
| | | | | | | | |
| | | | | | | | |
Accrued_Expenses_Tables
Accrued Expenses (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Accrued Expenses | ||||||||
Schedule of accrued expenses | Accrued expenses consisted of the following (in thousands): | |||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Salaries and benefits | $ | 16,582 | $ | 13,784 | ||||
Professional fees | 574 | 531 | ||||||
Accrued interest | 850 | 856 | ||||||
Other | 4,606 | 3,267 | ||||||
| | | | | | | | |
$ | 22,612 | $ | 18,438 | |||||
| | | | | | | | |
| | | | | | | | |
Notes_Payable_Tables
Notes Payable (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Notes Payable. | |||||
Schedule of redemption price as percentage of outstanding principal balance | |||||
Payment Dates | Redemption | ||||
Percentage | |||||
From and including January 1, 2014 to and including December 31, 2014 | 112.00 | % | |||
From and including January 1, 2015 to and including December 31, 2015 | 105.50 | % | |||
From and including January 1, 2016 to and including December 31, 2016 | 102.75 | % | |||
From and including January 1, 2017 and thereafter | 100.00 | % | |||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Commitments and Contingencies | ||||||||||||||
Schedule of future minimum lease payments under all non-cancelable lease arrangements | At December 31, 2014, future minimum lease payments under all non-cancelable lease arrangements were as follows (in thousands): | |||||||||||||
Operating | Lease Payments | Net Operating | Capital | |||||||||||
Lease | to be Received | Lease Payments | Lease | |||||||||||
Payments | from Subleases | Payments | ||||||||||||
2015 | $ | 14,342 | $ | (4,365 | ) | $ | 9,976 | $ | 1,434 | |||||
2016 | 15,617 | (5,740 | ) | 9,878 | 2,410 | |||||||||
2017 | 16,170 | (5,665 | ) | 10,505 | 253 | |||||||||
2018 | 635 | (476 | ) | 159 | 85 | |||||||||
| | | | | | | | | | | | | | |
Total future minimum lease payments | $ | 46,764 | $ | (16,246 | ) | $ | 30,518 | $ | 4,182 | |||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Less: amounts representing interest | (459 | ) | ||||||||||||
| | | | | | | | | | | | | | |
Capital lease obligations at December 31, 2014 | 3,723 | |||||||||||||
Less: current portion of capital lease obligations | (1,152 | ) | ||||||||||||
| | | | | | | | | | | | | | |
Capital lease obligations, net of current portion | $ | 2,571 | ||||||||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Stock_Benefit_Plans_Tables
Stock Benefit Plans (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Stock Benefit Plans | ||||||||||||||
Summary of expense recognized for share-based compensation arrangements | The following table summarizes the expense recognized for share-based compensation arrangements in the consolidated statements of operations (in thousands): | |||||||||||||
Years Ended December 31, | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Employee stock options | $ | 19,373 | $ | 17,981 | $ | 16,582 | ||||||||
Restricted stock awards | 2,671 | 552 | 429 | |||||||||||
Non-employee stock options | 2,618 | 271 | 60 | |||||||||||
Employee stock purchase plan | 941 | 995 | 472 | |||||||||||
Workforce reduction | 551 | — | — | |||||||||||
Stock award | 30 | 30 | 30 | |||||||||||
| | | | | | | | | | | ||||
$ | 26,184 | $ | 19,829 | $ | 17,573 | |||||||||
| | | | | | | | | | | ||||
| | | | | | | | | | | ||||
Share-based compensation expense reflected in the condensed consolidated statements of operations | ||||||||||||||
Share-based compensation is reflected in the consolidated statements of operations as follows for the years ended December 31, 2014, 2013 and 2012 (in thousands): | ||||||||||||||
Years Ended December 31, | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Research and development | $ | 9,482 | $ | 9,178 | $ | 9,080 | ||||||||
Selling, general and administrative | 16,702 | 10,651 | 8,493 | |||||||||||
| | | | | | | | | | | ||||
$ | 26,184 | $ | 19,829 | $ | 17,573 | |||||||||
| | | | | | | | | | | ||||
| | | | | | | | | | | ||||
Summary of the unvested shares of restricted stock | ||||||||||||||
Shares | Weighted-Average | |||||||||||||
Grant Date | ||||||||||||||
Fair Value | ||||||||||||||
Unvested at December 31, 2013 | — | $ | 0 | |||||||||||
Granted | 288,606 | $ | 13.29 | |||||||||||
Vested | (189,716 | ) | $ | 13.04 | ||||||||||
Forfeited | — | $ | 0 | |||||||||||
| | | | | | | | |||||||
Unvested at December 31, 2014 | 98,890 | $ | 13.77 | |||||||||||
| | | | | | | | |||||||
| | | | | | | | |||||||
Schedule of weighted-average assumptions used to estimate the fair value of the stock options using the Black-Scholes option-pricing model | ||||||||||||||
Years Ended December 31, | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Fair value of common stock | $ | 13.82 | $ | 12.57 | $ | 13.44 | ||||||||
Expected volatility | 46.84 | % | 46.3 | % | 49.2 | % | ||||||||
Expected term (in years) | 6.10 | 6.5 | 6.5 | |||||||||||
Risk-free interest rate | 1.84 | % | 1.6 | % | 1.2 | % | ||||||||
Expected dividend yield | — | % | — | % | — | % | ||||||||
Summary of stock option activity | ||||||||||||||
Shares of | Weighted- | Weighted- | Aggregate | |||||||||||
Common | Average | Average | Intrinsic | |||||||||||
Stock | Exercise | Contractual | Value | |||||||||||
Attributable | Price | Life | ||||||||||||
to Options | ||||||||||||||
(in years) | (in thousands) | |||||||||||||
Outstanding at December 31, 2013 | 20,927,874 | $ | 8.87 | 6.14 | $ | 71,616 | ||||||||
Granted | 4,502,800 | $ | 13.85 | |||||||||||
Exercised | (3,343,058 | ) | $ | 6.17 | ||||||||||
Cancelled | (2,129,843 | ) | $ | 12.35 | ||||||||||
| | | | | | | | | | | | | | |
Outstanding at December 31, 2014 | 19,957,773 | $ | 10.07 | 6 | $ | 104,897 | ||||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Vested or expected to vest at December 31, 2014 | 18,610,656 | $ | 9.99 | 5.87 | $ | 99,345 | ||||||||
Exercisable at December 31, 2014(1) | 11,570,658 | $ | 8.57 | 4.59 | $ | 78,226 | ||||||||
-1 | All stock options granted under the 2002 Equity Plan and the 2005 Equity Plan contain provisions allowing for the early exercise of such options into restricted stock. The exercisable shares disclosed above represent those that were vested as of December 31, 2014. | |||||||||||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Income Taxes | |||||||||||
Reconciliation of income taxes from continuing operations computed using U.S. federal statutory rate to that reflected in operations | A reconciliation of income taxes computed using the U.S. federal statutory rate to that reflected in operations follows (in thousands): | ||||||||||
Years Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Income tax benefit using U.S. federal statutory rate | $ | (64,470 | ) | $ | (92,756 | ) | $ | (24,692 | ) | ||
Permanent differences | 1,916 | 1,413 | 288 | ||||||||
State income taxes, net of federal benefit | (5,632 | ) | (13,684 | ) | (3,835 | ) | |||||
Stock-based compensation | 3,584 | 3,830 | 3,531 | ||||||||
Tax credits | (2,652 | ) | (5,089 | ) | (10,420 | ) | |||||
Expiring net operating losses and tax credits | 3,590 | — | 564 | ||||||||
Effect of change in state tax rate on deferred tax assets and deferred tax liabilities | 5,490 | 1,057 | — | ||||||||
Change in the valuation allowance | 58,185 | 105,186 | 34,577 | ||||||||
Other | (11 | ) | 43 | (13 | ) | ||||||
| | | | | | | | | | | |
$ | — | $ | — | $ | — | ||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Schedule of components of deferred tax assets and liabilities | Components of the Company's deferred tax assets and liabilities are as follows (in thousands): | ||||||||||
December 31, | |||||||||||
2014 | 2013 | ||||||||||
Deferred tax assets: | |||||||||||
Net operating loss carryforwards | $ | 279,123 | $ | 231,660 | |||||||
Tax credit carryforwards | 32,186 | 29,533 | |||||||||
Capitalized research and development | 6,826 | 11,939 | |||||||||
Deferred revenue | 4,220 | 6,433 | |||||||||
Other | 45,135 | 29,223 | |||||||||
| | | | | | | | ||||
Total deferred tax assets | 367,490 | 308,788 | |||||||||
Valuation allowance | (367,490 | ) | (308,788 | ) | |||||||
| | | | | | | | ||||
Net deferred tax asset | $ | — | $ | — | |||||||
| | | | | | | | ||||
| | | | | | | | ||||
Workforce_Reduction_Tables
Workforce Reduction (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Workforce Reduction. | |||||||||||||||||
Summary of charges related to the reduction in workforce | The following table summarizes the charges related to the reduction in workforce for the year ended December 31, 2014 (in thousands): | ||||||||||||||||
Charges | Adjustments | Amounts | Non-cash | Amounts | |||||||||||||
Paid | Expense | Accrued at | |||||||||||||||
December 31, 2014 | |||||||||||||||||
Employee severance, benefits and related costs | $ | 4,334 | $ | (135 | ) | $ | (3,648 | ) | $ | (551 | ) | $ | — | ||||
| | | | | | | | | | | | | | | | | |
Total | $ | 4,334 | $ | (135 | ) | $ | (3,648 | ) | $ | (551 | ) | $ | — | ||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Selected_Quarterly_Financial_D1
Selected Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Selected Quarterly Financial Data (Unaudited) | |||||||||||||||||
Schedule of quarterly financial information | |||||||||||||||||
First | Second | Third | Fourth | Total | |||||||||||||
Quarter | Quarter | Quarter | Quarter | Year | |||||||||||||
(in thousands, except per share data) | |||||||||||||||||
2014 | |||||||||||||||||
Collaborative arrangements revenue | $ | 14,605 | $ | 6,840 | $ | 16,918 | $ | 38,073 | $ | 76,436 | |||||||
Total cost and expenses | 58,992 | 61,959 | 53,657 | 71,198 | 245,806 | ||||||||||||
Other (expense) income, net | (5,239 | ) | (5,238 | ) | (5,249 | ) | (4,522 | ) | (20,248 | ) | |||||||
Net loss | (49,626 | ) | (60,357 | ) | (41,988 | ) | (37,647 | ) | (189,618 | ) | |||||||
Net loss per share—basic and diluted | $ | (0.38 | ) | $ | (0.44 | ) | $ | (0.30 | ) | $ | (0.27 | ) | $ | (1.39 | ) | ||
First | Second | Third | Fourth | Total | |||||||||||||
Quarter | Quarter | Quarter | Quarter | Year | |||||||||||||
(in thousands, except per share data) | |||||||||||||||||
2013 | |||||||||||||||||
Collaborative arrangements revenue | $ | 3,255 | $ | 9,663 | $ | 4,932 | $ | 5,031 | $ | 22,881 | |||||||
Total cost and expenses | 92,088 | 69,543 | 61,483 | 51,769 | 274,883 | ||||||||||||
Other (expense) income, net | (5,069 | ) | (5,269 | ) | (5,224 | ) | (5,248 | ) | (20,810 | ) | |||||||
Net loss | (93,902 | ) | (65,149 | ) | (61,775 | ) | (51,986 | ) | (272,812 | ) | |||||||
Net loss per share—basic and diluted | $ | (0.87 | ) | $ | (0.57 | ) | $ | (0.51 | ) | $ | (0.43 | ) | $ | (2.35 | ) | ||
Nature_of_Business_Details
Nature of Business (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Nature of Business | ||
Accumulated deficit since inception | $967,446 | $777,828 |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details) (USD $) | 12 Months Ended | 3 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Jun. 30, 2014 | |
Cash and Cash Equivalents | |||||
Cash Equivalent included in cash and cash equivalent | $61,000,000 | $67,300,000 | $61,000,000 | ||
Restricted Cash | |||||
Restricted cash securing letters of credit | 8,147,000 | 8,147,000 | 8,147,000 | ||
Available-for-Sale Securities | |||||
Minimum original maturity period of entity's short-term investments in order to classify them as available for sale | 3 months | ||||
Other-than-temporary impairments | 0 | 0 | 0 | ||
Inventory | |||||
Write-down of inventory to net realizable value | 20,292,000 | ||||
Inventory | 4,954,000 | 22,145,000 | 4,954,000 | ||
Letters of credit | |||||
Restricted Cash | |||||
Contingent liability under unused letters of credit | 8,100,000 | 8,100,000 | 8,100,000 | ||
Restricted cash securing letters of credit | 8,100,000 | 8,100,000 | 8,100,000 | ||
Almirall, S.A. | |||||
Inventory | |||||
Write-down of inventory to net realizable value | 20,300,000 | 11,400,000 | 8,900,000 | ||
Inventory | $5,000,000 | $5,000,000 |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies (Details 2) (USD $) | 3 Months Ended | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
item | ||||
Revenue and accounts receivable by major customer; third-party manufacturers | ||||
Accounts receivable | $10 | 513 | ||
Actavis Plc | ||||
Net Profit or Net Loss Sharing | ||||
Percentage of the pre-tax net profit or loss | 50.00% | |||
AstraZeneca | ||||
Revenue and accounts receivable by major customer; third-party manufacturers | ||||
Accounts receivable | $0 | 0 | ||
Number of collaboration agreements | 1 | |||
Supplier concentration | ||||
Revenue and accounts receivable by major customer; third-party manufacturers | ||||
Number of third-party manufacturers | 2 | |||
Number of manufacturing facilities | 3 | |||
Accounts receivable | Accounts receivable balances | Actavis Plc | ||||
Revenue and accounts receivable by major customer; third-party manufacturers | ||||
Revenue and accounts receivable by major customer (as a percent) | 100.00% | 84.00% | ||
Accounts receivable | Accounts receivable balances | Astellas Pharma Inc. | ||||
Revenue and accounts receivable by major customer; third-party manufacturers | ||||
Revenue and accounts receivable by major customer (as a percent) | 16.00% | |||
Revenue | Customer concentration | Actavis Plc | ||||
Revenue and accounts receivable by major customer; third-party manufacturers | ||||
Revenue and accounts receivable by major customer (as a percent) | 62.00% | 13.00% | 67.00% | |
Revenue | Customer concentration | Almirall, S.A. | ||||
Revenue and accounts receivable by major customer; third-party manufacturers | ||||
Revenue and accounts receivable by major customer (as a percent) | 10.00% | 57.00% | 14.00% | |
Revenue | Customer concentration | Astellas Pharma Inc. | ||||
Revenue and accounts receivable by major customer; third-party manufacturers | ||||
Revenue and accounts receivable by major customer (as a percent) | 23.00% | 25.00% | 3.00% | |
Revenue | Customer concentration | AstraZeneca | ||||
Revenue and accounts receivable by major customer; third-party manufacturers | ||||
Revenue and accounts receivable by major customer (as a percent) | 5.00% | 5.00% | 16.00% |
Summary_of_Significant_Account5
Summary of Significant Accounting Policies (Details 3) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Additional Disclosure for Income Statement | |||
Selling, general and administrative | $118,333 | $123,228 | $92,538 |
Patents | |||
Additional Disclosure for Income Statement | |||
Selling, general and administrative | $1,300 | $3,200 | $3,500 |
Summary_of_Significant_Account6
Summary of Significant Accounting Policies (Details 4) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
segment | |||
Segment Information | |||
Number of reportable segments | 1 | ||
Significant impairment of long-lived assets | $0 | $0 | $0 |
Manufacturing equipment | |||
Property and equipment | |||
Estimated useful life | 10 years | ||
Laboratory equipment | |||
Property and equipment | |||
Estimated useful life | 5 years | ||
Computer and office equipment | |||
Property and equipment | |||
Estimated useful life | 3 years | ||
Furniture and fixtures | |||
Property and equipment | |||
Estimated useful life | 7 years | ||
Software | |||
Property and equipment | |||
Estimated useful life | 3 years |
Net_Loss_Per_Share_Details
Net Loss Per Share (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Numerator: | |||||||||||
Net loss | ($37,647) | ($41,988) | ($60,357) | ($49,626) | ($51,986) | ($61,775) | ($65,149) | ($93,902) | ($189,618) | ($272,812) | ($72,624) |
Denominator: | |||||||||||
Weighted average number of common shares used in net loss per share - basic and diluted: | 136,811 | 115,852 | 106,403 | ||||||||
Net loss per share - basic and diluted | ($0.27) | ($0.30) | ($0.44) | ($0.38) | ($0.43) | ($0.51) | ($0.57) | ($0.87) | ($1.39) | ($2.35) | ($0.68) |
Net_Loss_Per_Share_Details_2
Net Loss Per Share (Details 2) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Potentially dilutive securities | |||
Dilutive securities excluded from the computation of diluted weighted average shares outstanding | 20,057 | 20,928 | 19,620 |
Options to purchase common stock | |||
Potentially dilutive securities | |||
Dilutive securities excluded from the computation of diluted weighted average shares outstanding | 19,958 | 20,928 | 19,540 |
Shares subject to repurchase | |||
Potentially dilutive securities | |||
Dilutive securities excluded from the computation of diluted weighted average shares outstanding | 99 | 80 |
Collaboration_and_License_Agre2
Collaboration and License Agreements (Details) (USD $) | 3 Months Ended | 12 Months Ended | 1 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2007 | Sep. 30, 2009 | Sep. 30, 2012 | Aug. 31, 2012 | Oct. 31, 2011 | Jul. 31, 2009 | Sep. 30, 2008 | Oct. 31, 2012 | 31-May-09 | Apr. 30, 2009 | Nov. 30, 2009 | Nov. 30, 2010 | |
item | item | ||||||||||||||||||||||
Collaboration and License Agreements | |||||||||||||||||||||||
Revenue recognized for collaborative and license arrangements | $76,436,000 | $22,881,000 | $150,245,000 | ||||||||||||||||||||
Collaborative arrangements revenue | 38,073,000 | 16,918,000 | 6,840,000 | 14,605,000 | 5,031,000 | 4,932,000 | 9,663,000 | 3,255,000 | 76,436,000 | 22,881,000 | 150,245,000 | ||||||||||||
Collaboration expense | -42,074,000 | -16,030,000 | |||||||||||||||||||||
Actavis Plc | Canada and Mexico | |||||||||||||||||||||||
Collaboration and License Agreements | |||||||||||||||||||||||
Royalty revenue | 100,000 | ||||||||||||||||||||||
Actavis Plc | |||||||||||||||||||||||
Collaboration and License Agreements | |||||||||||||||||||||||
Revenue recognized for collaborative and license arrangements | 47,682,000 | 2,957,000 | 100,442,000 | ||||||||||||||||||||
Up-front fee received | 70,000,000 | ||||||||||||||||||||||
Equity investment in the entity's capital stock | 25,000,000 | ||||||||||||||||||||||
Asset value for contingent equity investment by collaborative party recorded at inception of agreement | 9,000,000 | ||||||||||||||||||||||
Incremental deferred revenue related to contingent equity investment | 9,000,000 | ||||||||||||||||||||||
Collaborative arrangements revenue | 47,618,000 | 2,914,000 | |||||||||||||||||||||
Collaboration expense | -42,074,000 | -16,030,000 | |||||||||||||||||||||
Selling, general and administrative costs incurred by the Company | -31,646,000 | -33,839,000 | -5,092,000 | ||||||||||||||||||||
The Company's share of net profit (loss) | 15,972,000 | -72,999,000 | -21,122,000 | ||||||||||||||||||||
Net cost sharing offset or incremental expense related to research and development expense | 4,300,000 | -2,200,000 | -2,100,000 | ||||||||||||||||||||
Collaborative arrangements revenue related to sales of LINZESS | 47,618,000 | 2,914,000 | |||||||||||||||||||||
Royalty revenue | 64,000 | ||||||||||||||||||||||
Pre-commercial collaborative arrangements revenue | 100,442,000 | ||||||||||||||||||||||
Revenue recognized from sale of API | 43,000 | ||||||||||||||||||||||
Net profit share adjustment | 1,700,000 | ||||||||||||||||||||||
Actavis Plc | Convertible preferred stock (Note 12) | |||||||||||||||||||||||
Collaboration and License Agreements | |||||||||||||||||||||||
Issuance of Convertible preferred stock (in shares) | 2,083,333 | ||||||||||||||||||||||
Actavis Plc | Development and sales milestones | |||||||||||||||||||||||
Collaboration and License Agreements | |||||||||||||||||||||||
Number of milestone payments recognized | 4 | ||||||||||||||||||||||
Actavis Plc | Development milestones | |||||||||||||||||||||||
Collaboration and License Agreements | |||||||||||||||||||||||
Cumulative license fees and development milestone payments received | 205,000,000 | ||||||||||||||||||||||
Number of milestones achieved under collaboration agreement | 6 | 2 | 2 | ||||||||||||||||||||
Milestone payment received | 85,000,000 | 20,000,000 | 20,000,000 | 10,000,000 | |||||||||||||||||||
Actavis Plc | Commercialization milestone | |||||||||||||||||||||||
Collaboration and License Agreements | |||||||||||||||||||||||
Percentage of net profit from commercialization | 50.00% | ||||||||||||||||||||||
Percentage of net loss from commercialization | 50.00% | ||||||||||||||||||||||
Actavis Plc | Maximum | Sales milestones | |||||||||||||||||||||||
Collaboration and License Agreements | |||||||||||||||||||||||
Milestone payment to be received by company upon milestone achievement | 100,000,000 | ||||||||||||||||||||||
AstraZeneca | |||||||||||||||||||||||
Collaboration and License Agreements | |||||||||||||||||||||||
Revenue recognized for collaborative and license arrangements | 3,417,000 | 1,044,000 | 24,710,000 | ||||||||||||||||||||
Up-front fee received | 25,000,000 | ||||||||||||||||||||||
Collaborative arrangements revenue | 2,500,000 | 24,700,000 | |||||||||||||||||||||
Net cost sharing offset or incremental expense related to research and development expense | 2,400,000 | -1,900,000 | |||||||||||||||||||||
AstraZeneca | Sales milestones | |||||||||||||||||||||||
Collaboration and License Agreements | |||||||||||||||||||||||
Milestone payment to be received by company upon milestone achievement | 125,000,000 | ||||||||||||||||||||||
AstraZeneca | Commercialization milestone | |||||||||||||||||||||||
Collaboration and License Agreements | |||||||||||||||||||||||
Percentage of net profit from commercialization | 55.00% | ||||||||||||||||||||||
Percentage of net loss from commercialization | 55.00% | ||||||||||||||||||||||
Almirall, S.A. | |||||||||||||||||||||||
Collaboration and License Agreements | |||||||||||||||||||||||
Revenue recognized for collaborative and license arrangements | 7,587,000 | 13,103,000 | 21,205,000 | ||||||||||||||||||||
Up-front fee received | 40,000,000 | ||||||||||||||||||||||
Asset value for contingent equity investment by collaborative party recorded at inception of agreement | 6,000,000 | ||||||||||||||||||||||
Incremental deferred revenue related to contingent equity investment | 6,000,000 | ||||||||||||||||||||||
Collaborative arrangements revenue | 7,600,000 | 13,100,000 | 21,200,000 | ||||||||||||||||||||
Royalty revenue | 600,000 | 200,000 | |||||||||||||||||||||
Pre-commercial collaborative arrangements revenue | 1,900,000 | 1,900,000 | 17,700,000 | ||||||||||||||||||||
Revenue recognized from sale of API | 5,100,000 | 11,100,000 | 3,500,000 | ||||||||||||||||||||
Almirall, S.A. | Convertible preferred stock (Note 12) | |||||||||||||||||||||||
Collaboration and License Agreements | |||||||||||||||||||||||
Equity investment in the entity's capital stock | 15,000,000 | ||||||||||||||||||||||
Issuance of Convertible preferred stock (in shares) | 681,819 | ||||||||||||||||||||||
Almirall, S.A. | Development milestones | |||||||||||||||||||||||
Collaboration and License Agreements | |||||||||||||||||||||||
Milestone payment received | 20,000,000 | ||||||||||||||||||||||
Astellas Pharma Inc. | |||||||||||||||||||||||
Collaboration and License Agreements | |||||||||||||||||||||||
Revenue recognized for collaborative and license arrangements | 17,750,000 | 5,777,000 | 3,888,000 | ||||||||||||||||||||
Up-front fee received | 30,000,000 | ||||||||||||||||||||||
Collaborative arrangements revenue | 17,700,000 | 5,800,000 | 3,900,000 | ||||||||||||||||||||
Revenue recognized from sale of API | $2,400,000 | $1,200,000 | $800,000 |
Collaboration_and_License_Agre3
Collaboration and License Agreements (Details 2) (USD $) | 3 Months Ended | 12 Months Ended | 1 Months Ended | |||||||||||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | 31-May-09 | Apr. 30, 2009 | Nov. 30, 2009 | Nov. 30, 2010 | 31-May-13 | |
Collaboration and License Agreements | ||||||||||||||||
Collaborative arrangements revenue | $38,073,000 | $16,918,000 | $6,840,000 | $14,605,000 | $5,031,000 | $4,932,000 | $9,663,000 | $3,255,000 | $76,436,000 | $22,881,000 | $150,245,000 | |||||
Almirall, S.A. | ||||||||||||||||
Collaboration and License Agreements | ||||||||||||||||
Up-front fee received, net | 38,000,000 | |||||||||||||||
Up-front fee received | 40,000,000 | |||||||||||||||
Asset value for contingent equity investment by collaborative party recorded at inception of agreement | 6,000,000 | |||||||||||||||
Incremental deferred revenue related to contingent equity investment | 6,000,000 | |||||||||||||||
Revenue recognized from sale of API | 5,100,000 | 11,100,000 | 3,500,000 | |||||||||||||
Revenue recognized in royalty payments | 600,000 | 200,000 | ||||||||||||||
Revenue recognized in commercial launch milestones | 1,900,000 | 1,900,000 | 17,700,000 | |||||||||||||
Collaborative arrangements revenue | 7,600,000 | 13,100,000 | 21,200,000 | |||||||||||||
Number of major European Union countries | 5 | 5 | ||||||||||||||
Number of major European Union countries in which commercial launch occurred | 2 | |||||||||||||||
Milestone payment due upon the first commercial launch in each of the five major European Union countries | 4,000,000 | |||||||||||||||
Almirall, S.A. | Convertible preferred stock (Note 12) | ||||||||||||||||
Collaboration and License Agreements | ||||||||||||||||
Equity investment in the entity's capital stock | 15,000,000 | |||||||||||||||
Issuance of Convertible preferred stock (in shares) | 681,819 | |||||||||||||||
Almirall, S.A. | Development and sales milestones | ||||||||||||||||
Collaboration and License Agreements | ||||||||||||||||
Maximum contingent equity and milestone payments to be received | 40,000,000 | |||||||||||||||
Almirall, S.A. | Development milestones | ||||||||||||||||
Collaboration and License Agreements | ||||||||||||||||
Milestone payment received | 20,000,000 | |||||||||||||||
Milestone payment received, net of foreign withholding taxes | 19,000,000 | |||||||||||||||
Almirall, S.A. | Development milestones | Convertible preferred stock (Note 12) | ||||||||||||||||
Collaboration and License Agreements | ||||||||||||||||
Contingent equity investment to be received form forward purchase contract | 15,000,000 | |||||||||||||||
Almirall, S.A. | Amended Development Milestones | ||||||||||||||||
Collaboration and License Agreements | ||||||||||||||||
Number of milestones achieved under collaboration agreement | 2 | 2 | 2 | |||||||||||||
Milestone payment received, net of foreign withholding taxes | 1,000,000 | 1,000,000 | 1,900,000 | |||||||||||||
Milestones, net of foreign tax withholdings | 1,000,000 | 1,000,000 | 1,000,000 | |||||||||||||
Total milestone payment due upon the first commercial launch in all major European Union countries | $17,000,000 |
Collaboration_and_License_Agre4
Collaboration and License Agreements (Details 3) (USD $) | 3 Months Ended | 12 Months Ended | 1 Months Ended | |||||||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Nov. 30, 2009 | |
Collaboration and License Agreements | ||||||||||||
Collaborative arrangements revenue | $38,073,000 | $16,918,000 | $6,840,000 | $14,605,000 | $5,031,000 | $4,932,000 | $9,663,000 | $3,255,000 | $76,436,000 | $22,881,000 | $150,245,000 | |
Astellas Pharma Inc. | ||||||||||||
Collaboration and License Agreements | ||||||||||||
Up-front fee received | 30,000,000 | |||||||||||
Estimated development period prior to assessment | 115 months | |||||||||||
Estimated development period | 85 months | |||||||||||
Revenue recognized as a result of revised estimate of development period | 1,900,000 | 1,500,000 | ||||||||||
Up-front license fee deferred | 11,400,000 | 11,400,000 | ||||||||||
Collaborative arrangements revenue | 17,700,000 | 5,800,000 | 3,900,000 | |||||||||
Revenue recognized from sale of API | 2,400,000 | 1,200,000 | 800,000 | |||||||||
Astellas Pharma Inc. | Additional development milestones | Maximum | ||||||||||||
Collaboration and License Agreements | ||||||||||||
Total milestone payments to be received | 45,000,000 | |||||||||||
Astellas Pharma Inc. | Phase 3 milestones | ||||||||||||
Collaboration and License Agreements | ||||||||||||
Milestone payment to be received by company upon milestone achievement | 15,000,000 | |||||||||||
Collaborative arrangements revenue | 10,200,000 | |||||||||||
Revenue recognized over the remaining development period | 4,800,000 | 4,800,000 | ||||||||||
Astellas Pharma Inc. | Japanese NDA equivalent filing milestone | ||||||||||||
Collaboration and License Agreements | ||||||||||||
Milestone payment to be received by company upon milestone achievement | 15,000,000 | |||||||||||
Astellas Pharma Inc. | Approval of Japanese NDA equivalent filing milestone | ||||||||||||
Collaboration and License Agreements | ||||||||||||
Milestone payment to be received by company upon milestone achievement | $15,000,000 |
Collaboration_and_License_Agre5
Collaboration and License Agreements (Details 4) (USD $) | 3 Months Ended | 12 Months Ended | 1 Months Ended | ||||||||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Aug. 31, 2014 | Oct. 31, 2012 | |
Collaboration and License Agreements | |||||||||||||
Collaborative arrangements revenue | $38,073,000 | $16,918,000 | $6,840,000 | $14,605,000 | $5,031,000 | $4,932,000 | $9,663,000 | $3,255,000 | $76,436,000 | $22,881,000 | $150,245,000 | ||
AstraZeneca | |||||||||||||
Collaboration and License Agreements | |||||||||||||
Prior notice period to terminate the agreement | 180 days | ||||||||||||
Up-front fee received | 25,000,000 | ||||||||||||
Total amount of non-contingent arrangement consideration | 34,000,000 | ||||||||||||
Amount of arrangement consideration for clinical trial material supply services and research, development and regulatory activities | 9,000,000 | ||||||||||||
Discount rate utilized in analysis (as a percent) | 11.50% | ||||||||||||
Arrangement Consideration allocated to the License Deliverable | 29,700,000 | ||||||||||||
Arrangement Consideration allocated to the R&D Services | 1,800,000 | ||||||||||||
Arrangement Consideration allocated to the JDC services | 100,000 | ||||||||||||
Arrangement Consideration allocated to the clinical trial material supply services | 300,000 | ||||||||||||
Arrangement Consideration allocated to Co-Promotion Deliverable | 2,100,000 | ||||||||||||
Percentage of costs of clinical trial material supply services and research, development and regulatory activities allocated | 55.00% | ||||||||||||
Net cost sharing offset or incremental expense related to research and development expense | 2,400,000 | -1,900,000 | |||||||||||
Development budget for additional services | 14,000,000 | ||||||||||||
Collaborative arrangements revenue earned | 900,000 | 1,000,000 | |||||||||||
Collaborative arrangements revenue | 2,500,000 | 24,700,000 | |||||||||||
AstraZeneca | Sales milestones | |||||||||||||
Collaboration and License Agreements | |||||||||||||
Milestone payment to be received by company upon milestone achievement | $125,000,000 | ||||||||||||
AstraZeneca | Commercialization milestone | |||||||||||||
Collaboration and License Agreements | |||||||||||||
Percentage of net profit from commercialization | 55.00% | ||||||||||||
Percentage of net loss from commercialization | 55.00% |
Collaboration_and_License_Agre6
Collaboration and License Agreements (Details 5) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Collaboration and License Agreements | |||
Research and development expense | $101,890,000 | $102,378,000 | $113,474,000 |
Other Collaboration and License Agreements | |||
Collaboration and License Agreements | |||
Aggregate up-front fee paid | 5,800,000 | ||
Contingent milestone payable per product, maximum | 114,500,000 | ||
Research and development expense | 1,000,000 | 3,600,000 | 8,200,000 |
Other Collaboration and License Agreements | Sales milestones | |||
Collaboration and License Agreements | |||
Contingent milestone payable per product | 35,000,000 | ||
Other Collaboration and License Agreements | Development milestones | |||
Collaboration and License Agreements | |||
Contingent milestone payable | 7,500,000 | ||
Milestone payment | 2,500,000 | ||
Contingent milestone payable per product | 21,500,000 | ||
Other Collaboration and License Agreements | Regulatory milestones | |||
Collaboration and License Agreements | |||
Contingent milestone payable | 18,000,000 | ||
Milestone payment | 0 | ||
Contingent milestone payable per product | $58,000,000 |
Fair_Value_of_Financial_Instru2
Fair Value of Financial Instruments (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Description | ||
Available-for-sale securities | $174,037 | $122,112 |
Transfers between Level 1 and Level 2 of the fair value hierarchy | 0 | 0 |
Recurring basis | Fair Value | ||
Description | ||
Total assets fair value | 235,003 | 189,364 |
Recurring basis | Fair Value | Money market funds | ||
Description | ||
Cash and cash equivalents | 60,966 | 59,747 |
Recurring basis | Fair Value | U.S. Treasury securities | ||
Description | ||
Available-for-sale securities | 24,005 | 7,253 |
Recurring basis | Fair Value | U.S. government-sponsored securities | ||
Description | ||
Cash and cash equivalents | 7,505 | |
Available-for-sale securities | 150,032 | 114,859 |
Recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Description | ||
Total assets fair value | 84,971 | 67,000 |
Recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | Money market funds | ||
Description | ||
Cash and cash equivalents | 60,966 | 59,747 |
Recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | U.S. Treasury securities | ||
Description | ||
Available-for-sale securities | 24,005 | 7,253 |
Recurring basis | Significant Other Observable Inputs (Level 2) | ||
Description | ||
Total assets fair value | 150,032 | 122,364 |
Recurring basis | Significant Other Observable Inputs (Level 2) | U.S. government-sponsored securities | ||
Description | ||
Cash and cash equivalents | 7,505 | |
Available-for-sale securities | $150,032 | $114,859 |
AvailableforSale_Securities_De
Available-for-Sale Securities (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
item | item | ||
Available-for-Sale Securities | |||
Amortized Cost | $174,056,000 | $122,110,000 | |
Gross Unrealized Gains | 6,000 | 6,000 | |
Gross Unrealized Losses | -25,000 | -4,000 | |
Fair Value | 174,037,000 | 122,112,000 | |
Contractual maturity period, maximum | 1 year | ||
Number of investments classified as available-for-sale securities in an unrealized loss position | 27 | 12 | |
Number of investments classified as available-for-sale securities in an unrealized loss position for more than twelve months | 0 | 0 | |
Aggregate fair value of securities none of which had been in an unrealized loss position for more than twelve months | 101,900,000 | 38,700,000 | |
Proceeds from maturities of available-for-sale securities | 89,800,000 | ||
Proceeds from sales of available-for-sale securities | 0 | 0 | 51,000,000 |
U.S. government-sponsored securities | |||
Available-for-Sale Securities | |||
Amortized Cost | 150,055,000 | 114,857,000 | |
Gross Unrealized Gains | 2,000 | 6,000 | |
Gross Unrealized Losses | -25,000 | -4,000 | |
Fair Value | 150,032,000 | 114,859,000 | |
U.S. Treasury securities | |||
Available-for-Sale Securities | |||
Amortized Cost | 24,001,000 | 7,253,000 | |
Gross Unrealized Gains | 4,000 | ||
Fair Value | $24,005,000 | $7,253,000 |
Inventory_Details
Inventory (Details) (USD $) | 12 Months Ended | 3 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2014 | Jun. 30, 2014 | Dec. 31, 2013 |
Raw materials | $4,954 | $4,954 | $22,145 | |
Write-down of inventory to net realizable value | 20,292 | |||
Net realizable value | 4,954 | 4,954 | 22,145 | |
Almirall, S.A. | ||||
Write-down of inventory to net realizable value | 20,300 | 11,400 | 8,900 | |
Net realizable value | $5,000 | $5,000 |
Property_and_Equipment_Details
Property and Equipment (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Property and equipment | |||
Property and equipment, gross | $82,805,000 | $79,065,000 | |
Less accumulated depreciation and amortization | -52,979,000 | -41,689,000 | |
Property and equipment, net | 29,826,000 | 37,376,000 | |
Total depreciation and amortization expenses | 12,300,000 | ||
Depreciation and amortization | 12,331,000 | 11,729,000 | 11,325,000 |
Assets under capital lease | 5,500,000 | 5,500,000 | |
Accumulated amortization balances related to assets under capital lease | 2,000,000 | 1,200,000 | |
United Kingdom | |||
Property and equipment | |||
Number of contract manufacturers possessing manufacturing equipment | 1 | 1 | |
301 Binney Street, Cambridge, Massachusetts | |||
Property and equipment | |||
Additional term of the lease | 24 months | ||
Manufacturing equipment | |||
Property and equipment | |||
Property and equipment, gross | 3,623,000 | 2,812,000 | |
Laboratory equipment | |||
Property and equipment | |||
Property and equipment, gross | 15,126,000 | 14,039,000 | |
Computer and office equipment | |||
Property and equipment | |||
Property and equipment, gross | 5,185,000 | 5,202,000 | |
Furniture and fixtures | |||
Property and equipment | |||
Property and equipment, gross | 2,093,000 | 2,365,000 | |
Software | |||
Property and equipment | |||
Property and equipment, gross | 13,921,000 | 12,352,000 | |
Construction in process | |||
Property and equipment | |||
Property and equipment, gross | 1,457,000 | 996,000 | |
Leased vehicles | |||
Property and equipment | |||
Property and equipment, gross | 4,472,000 | 4,472,000 | |
Leasehold improvements | |||
Property and equipment | |||
Property and equipment, gross | 36,928,000 | 36,827,000 | |
Write-down of leasehold improvement assets | $500,000 |
Accrued_Expenses_Details
Accrued Expenses (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Accrued Expenses | ||
Salaries and benefits | $16,582 | $13,784 |
Professional fees | 574 | 531 |
Accrued interest | 850 | 856 |
Other | 4,606 | 3,267 |
Total accrued expense | $22,612 | $18,438 |
Notes_Payable_Details
Notes Payable (Details) (USD $) | 12 Months Ended | 0 Months Ended | 12 Months Ended |
Dec. 31, 2013 | Jan. 04, 2013 | Dec. 31, 2014 | |
Notes Payable | |||
Estimated principal payments | $11,258,000 | ||
Upfront cash proceeds | 175,000,000 | ||
Notes Payable | |||
Notes Payable | |||
Aggregate principal amount of notes issued in private placement | 175,000,000 | ||
Annual interest rate of notes (as a percent) | 11.00% | ||
Principal payment | 1,200,000 | ||
Estimated principal payments | 11,300,000 | ||
Percentage of net sales of LINZESS considered to determine quarterly payments on the notes | 7.50% | ||
Upfront cash proceeds | 175,000,000 | ||
Discount on issuance of debt | 400,000 | ||
Debt issuance costs capitalized | 7,300,000 | ||
Estimated fair value | $183,800,000 | $182,500,000 | |
Notes Payable | From and including January 1, 2014 to and including December 31, 2014 | |||
Notes Payable | |||
Payment start date | 1-Jan-14 | ||
Payment end date | 31-Dec-14 | ||
Redemption Percentage | 112.00% | ||
Notes Payable | From and including January 1, 2015 to and including December 31, 2015 | |||
Notes Payable | |||
Payment start date | 1-Jan-15 | ||
Payment end date | 31-Dec-15 | ||
Redemption Percentage | 105.50% | ||
Notes Payable | From and including January 1, 2016 to and including December 31, 2016 | |||
Notes Payable | |||
Payment start date | 1-Jan-16 | ||
Payment end date | 31-Dec-16 | ||
Redemption Percentage | 102.75% | ||
Notes Payable | From and including January 1, 2017 and thereafter | |||
Notes Payable | |||
Payment start date | 1-Jan-17 | ||
Redemption Percentage | 100.00% |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | 3 Months Ended | 12 Months Ended |
In Millions, unless otherwise specified | Sep. 30, 2014 | Dec. 31, 2014 |
Commitments and Contingencies | ||
Reimbursement for financing capital improvements | $22.90 | |
Minimum purchase requirement and other firm commitments related to supply contracts by year | ||
2015 | 5 | |
2016 | 6.9 | |
2017 | 7 | |
2018 | 2.5 | |
2019 | 2.5 | |
2020 and thereafter | 2.5 | |
Office and laboratory space in Cambridge, Massachusetts | ||
Commitments and Contingencies | ||
Letter of credit outstanding amount | 7.6 | |
First Sublease payments offset the lease obligations | 16.1 | |
Second Sublease payments offset the lease obligations | 1.9 | |
Operating Leases, Rent Expense, Net | $2.60 |
Commitments_and_Contingencies_2
Commitments and Contingencies (Details 2) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2014 |
Leased vehicles | ||
Capital lease obligation | ||
Initial term of the lease | 36 months | |
Weighted average interest rate on the outstanding capital lease obligations (as a percent) | 7.70% | |
Letters of credit securing capital lease obligations | $0.50 | |
Computer and office equipment | ||
Capital lease obligation | ||
Weighted average interest rate on the outstanding capital lease obligations (as a percent) | 14.50% |
Commitments_and_Contingencies_3
Commitments and Contingencies (Details 3) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Future minimum lease payments under Operating Lease Payments | |||
2015 | $14,342,000 | ||
2016 | 15,617,000 | ||
2017 | 16,170,000 | ||
2018 | 635,000 | ||
Total future minimum lease payments | 46,764,000 | ||
Future minimum Lease Payments to be Received from Subleases | |||
2015 | -4,365,000 | ||
2016 | -5,740,000 | ||
2017 | -5,665,000 | ||
2018 | -476,000 | ||
Total future minimum lease payments | -16,246,000 | ||
Future minimum lease payments under Net Operating Lease Payments | |||
2015 | 9,976,000 | ||
2016 | 9,878,000 | ||
2017 | 10,505,000 | ||
2018 | 159,000 | ||
Total future minimum lease payments | 30,518,000 | ||
Future minimum lease payments under Capital Leases Payments | |||
2015 | 1,434,000 | ||
2016 | 2,410,000 | ||
2017 | 253,000 | ||
2018 | 85,000 | ||
Total future minimum lease payments | 4,182,000 | ||
Less amounts representing interest | -459,000 | ||
Capital lease obligations at the end of the period | 3,723,000 | ||
Current portion of capital lease obligations | -1,152,000 | -1,139,000 | |
Capital lease obligations, net of current portion | 2,571,000 | 3,134,000 | |
Continuing operations | |||
Operating lease | |||
Rent expense | 10,200,000 | 8,800,000 | 7,200,000 |
Sublease income | $2,600,000 |
Stockholders_Equity_Details
Stockholders' Equity (Details) (USD $) | 12 Months Ended | 1 Months Ended | 3 Months Ended | |||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Feb. 28, 2014 | Feb. 29, 2012 | Jun. 30, 2013 |
item | ||||||
Stockholders' Equity | ||||||
Number of series of common stock designated | 2 | |||||
Minimum percentage of beneficial ownership in entity's outstanding shares of common stock used to determine number of voting rights allowed per share of common stock | 30.00% | |||||
Number of shares of Class A common stock to be received for each share of Class B common stock converted | 1 | |||||
Threshold number of shares of Class B common stock outstanding used to determine date of conversion | 19,561,556 | |||||
Percentage of the number of shares of Class B common stock outstanding immediately following the completion of an initial public offering used to determine date of conversion | 25.00% | |||||
Proceeds from issuance of common stock | $190,428 | $137,766 | $85,228 | |||
Class A common stock | ||||||
Stockholders' Equity | ||||||
Number of voting rights per share | 1 | |||||
Shares sold | 15,784,325 | 6,037,500 | 11,204,948 | |||
Issuance price per share (in dollars per share) | $12.75 | $15.09 | $13 | |||
Proceeds from issuance of common stock | $190,400 | $85,200 | $137,800 | |||
Class B common stock | ||||||
Stockholders' Equity | ||||||
Number of voting rights per share | 1 | |||||
Number of voting rights per share if the matter is an adoption agreement of merger or consolidation, an adoption of a resolution with respect to sale, lease, or exchange of the Company's assets or an adoption of dissolution or liquidation of the Company | 10 | |||||
Number of voting rights per share if any individual, entity, or group seeks to obtain or has obtained beneficial ownership of 30% or more of the Company's outstanding shares of common stock | 10 |
Stock_Benefit_Plans_Details
Stock Benefit Plans (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Restricted Stock | |||
Expense recognized for share-based compensation arrangements | $26,184 | $19,829 | $17,573 |
Employee stock options | |||
Restricted Stock | |||
Expense recognized for share-based compensation arrangements | 19,373 | 17,981 | 16,582 |
Restricted Stock | |||
Restricted Stock | |||
Expense recognized for share-based compensation arrangements | 2,671 | 552 | 429 |
Non-employee stock options | |||
Restricted Stock | |||
Expense recognized for share-based compensation arrangements | 2,618 | 271 | 60 |
Employee stock purchase plan | |||
Restricted Stock | |||
Expense recognized for share-based compensation arrangements | 941 | 995 | 472 |
Workforce reduction | |||
Restricted Stock | |||
Expense recognized for share-based compensation arrangements | 551 | ||
Stock award | |||
Restricted Stock | |||
Expense recognized for share-based compensation arrangements | $30 | $30 | $30 |
Stock_Benefit_Plans_Details_2
Stock Benefit Plans (Details 2) (USD $) | 12 Months Ended | 3 Months Ended | 0 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Nov. 04, 2014 |
Share-based compensation is reflected in the condensed consolidated statements of operations | |||||
Share-based compensation | $26,184 | $19,829 | $17,573 | ||
Incremental charge | 118,333 | 123,228 | 92,538 | ||
Research and development | |||||
Share-based compensation is reflected in the condensed consolidated statements of operations | |||||
Share-based compensation | 9,482 | 9,178 | 9,080 | ||
Selling, general and administrative | |||||
Share-based compensation is reflected in the condensed consolidated statements of operations | |||||
Share-based compensation | 16,702 | 10,651 | 8,493 | ||
Employee stock options | |||||
Share-based compensation is reflected in the condensed consolidated statements of operations | |||||
Share-based compensation | 19,373 | 17,981 | 16,582 | ||
Employee stock options | Executive Officer [Member] | |||||
Share-based compensation is reflected in the condensed consolidated statements of operations | |||||
Incremental charge | 2,300 | ||||
Employee stock options | Maximum | Executive Officer [Member] | |||||
Share-based compensation is reflected in the condensed consolidated statements of operations | |||||
Vesting period | 2 years | ||||
Restricted Stock | |||||
Share-based compensation is reflected in the condensed consolidated statements of operations | |||||
Share-based compensation | 2,671 | 552 | 429 | ||
Options to purchase common stock | |||||
Share-based compensation is reflected in the condensed consolidated statements of operations | |||||
Vesting period | 4 years | ||||
Performance-based milestone options | |||||
Share-based compensation is reflected in the condensed consolidated statements of operations | |||||
Share-based compensation | $500 | $100 | $1,000 |
Stock_Benefit_Plans_Details_3
Stock Benefit Plans (Details 3) (USD $) | 12 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2010 | |
item | ||||
Restricted Stock | ||||
Number of share-based compensation plans pursuant to which awards are currently being made | 2 | |||
Number of share-based compensation plans under which there are outstanding awards | 2 | |||
Additional disclosures | ||||
Share-based compensation | $26,184,000 | $19,829,000 | $17,573,000 | |
Restricted Stock | ||||
Summary of unvested shares of restricted stock, shares | ||||
Granted (in shares) | 288,606 | |||
Vested (in shares) | -189,716 | |||
Outstanding at the end of the period (in shares) | 98,890 | |||
Summary of unvested shares of restricted stock, weighted-average grant date fair value | ||||
Outstanding at the beginning of the period (in dollars per share) | $0 | |||
Granted (in dollars per share) | $13.29 | |||
Vested (in dollars per share) | $13.04 | |||
Outstanding at the end of the period (in dollars per share) | $13.77 | $0 | ||
Additional disclosures | ||||
Share-based compensation | 2,671,000 | 552,000 | 429,000 | |
Unrecognized share-based compensation | 1,000,000 | |||
Options to purchase common stock | ||||
Restricted Stock | ||||
Expiration period | 10 years | |||
Vesting period | 4 years | |||
Weighted-average assumptions used to estimate the fair value of the stock options using the Black-Scholes option-pricing model | ||||
Fair value of common stock (in dollars per share) | $13.82 | $12.57 | $13.44 | |
Expected volatility (as a percent) | 46.84% | 46.30% | 49.20% | |
Expected term | 6 years 1 month 6 days | 6 years 6 months | 6 years 6 months | |
Risk-free interest rate (as a percent) | 1.84% | 1.60% | 1.20% | |
Additional disclosures | ||||
Option exercisable (in shares) | 11,570,658 | |||
Shares issuable under outstanding options | 19,957,773 | 20,927,874 | ||
Unrecognized share-based compensation | 33,700,000 | |||
Vested (in shares) | 18,610,656 | |||
Options to purchase common stock | Class A common stock | ||||
Additional disclosures | ||||
Option exercisable (in shares) | 14,068,613 | |||
Options to purchase common stock | Class B common stock | ||||
Additional disclosures | ||||
Option exercisable (in shares) | 5,889,160 | |||
Performance-based milestone options | ||||
Additional disclosures | ||||
Share-based compensation | 500,000 | 100,000 | 1,000,000 | |
Unrecognized share-based compensation | 3,500,000 | |||
Vested (in shares) | 40,000 | |||
The Plans | ||||
Restricted Stock | ||||
Shares available for future grant | 10,811,998 | |||
The Plans | Time-accelerated stock options | ||||
Additional disclosures | ||||
Shares vested as a result of milestone or service period achievements | 170,000 | |||
Shares issuable under outstanding options | 400,000 | 570,000 | ||
Share-based compensation | 1,200,000 | 500,000 | ||
Unrecognized share-based compensation | 200,000 | |||
The Plans | Time-accelerated stock options | Minimum | ||||
Restricted Stock | ||||
Vesting period | 6 years | |||
The Plans | Time-accelerated stock options | Maximum | ||||
Restricted Stock | ||||
Vesting period | 10 years | |||
Additional disclosures | ||||
Share-based compensation | $100,000 | |||
2010 Plan | ||||
Restricted Stock | ||||
Shares reserved for issuance | 6,000,000 | |||
Threshold number of additional shares available for future grant | 6,600,000 | |||
Percentage for the threshold number of additional shares available for future grant, expressed as percentage of common stock outstanding on the last day of the immediately preceding fiscal year | 4.00% | |||
Shares available for future grant | 9,446,061 | |||
Employee stock purchase plan | ||||
Restricted Stock | ||||
Shares reserved for issuance | 400,000 | |||
Threshold number of additional shares available for future grant | 1,000,000 | |||
Shares available for future grant | 1,335,084 | |||
Purchase price as a percentage of fair market value of a share of common stock on the first or last day of an offering period | 85.00% | |||
Offering period | 6 months | |||
Employee stock purchase plan | Class A common stock | ||||
Restricted Stock | ||||
Percentage for the threshold number of additional shares available for future grant, expressed as percentage of common stock outstanding on the last day of the immediately preceding fiscal year | 1.00% | |||
2005 Equity Plan | ||||
Restricted Stock | ||||
Shares available for future grant | 30,853 | |||
2002 Equity Plan | ||||
Restricted Stock | ||||
Shares available for future grant | 0 | |||
2005 Equity Plan and director compensation program | Restricted Stock | ||||
Summary of unvested shares of restricted stock, shares | ||||
Granted (in shares) | 288,606 |
Stock_Benefit_Plans_Details_4
Stock Benefit Plans (Details 4) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Options to purchase common stock | |||
Number of Shares | |||
Outstanding at the beginning of the period (in shares) | 20,927,874 | ||
Granted (in shares) | 4,502,800 | ||
Exercised (in shares) | -3,343,058 | ||
Cancelled (in shares) | -2,129,843 | ||
Outstanding at the end of the period (in shares) | 19,957,773 | 20,927,874 | |
Vested or expected to vest at the end of the period (in shares) | 18,610,656 | ||
Exercisable at the end of the period (in shares) | 11,570,658 | ||
Weighted-Average Exercise Price | |||
Outstanding at the beginning of the period (in dollars per share) | $8.87 | ||
Granted (in dollars per share) | $13.85 | ||
Exercised (in dollars per share) | $6.17 | ||
Cancelled (in dollars per share) | $12.35 | ||
Outstanding at the end of the period (in dollars per share) | $10.07 | $8.87 | |
Vested or expected to vest at the end of the period (in dollars per share) | $9.99 | ||
Exercisable at the end of the period (in dollars per share) | $8.57 | ||
Weighted-Average Contractual Life | |||
Outstanding at the beginning of the period | 6 years 1 month 20 days | 6 years 1 month 21 days | |
Outstanding at the end of the period | 6 years 1 month 20 days | 6 years 1 month 21 days | |
Vested or expected to vest at the end of the period | 6 years 25 days | ||
Exercisable at the end of the period | 4 years 7 months 2 days | ||
Aggregate Intrinsic Value | |||
Outstanding at the beginning of the period | $71,616,000 | ||
Outstanding at the end of the period | 104,897,000 | 71,616,000 | |
Vested or expected to vest at the end of the period | 99,345,000 | ||
Exercisable at the end of the period | 78,226,000 | ||
Weighted average grant date fair value (in dollars per share) | $6.47 | $5.96 | $6.62 |
Total intrinsic value of options exercised | 26,900,000 | 19,700,000 | 8,600,000 |
Unrecognized share-based compensation | |||
Unrecognized share-based compensation | 33,700,000 | ||
Weighted average period for recognition | 2 years 4 months 24 days | ||
Restricted Stock | |||
Unrecognized share-based compensation | |||
Unrecognized share-based compensation | $1,000,000 | ||
Weighted average period for recognition | 4 months 24 days |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Reconciliation of income taxes | |||
Income tax benefit using U.S. federal statutory rate | ($64,470,000) | ($92,756,000) | ($24,692,000) |
Permanent differences | 1,916,000 | 1,413,000 | 288,000 |
State income taxes, net of federal benefit | -5,632,000 | -13,684,000 | -3,835,000 |
Stock-based compensation | 3,584,000 | 3,830,000 | 3,531,000 |
Tax credits | -2,652,000 | -5,089,000 | -10,420,000 |
Expiring net operating losses and tax credits | 3,590,000 | 564,000 | |
Effect of change in state tax rate on deferred tax assets and deferred tax liabilities | 5,490,000 | 1,057,000 | |
Change in the valuation allowance | 58,185,000 | 105,186,000 | 34,577,000 |
Other | -11,000 | 43,000 | -13,000 |
Deferred tax assets: | |||
Net operating loss carryforwards | 279,123,000 | 231,660,000 | |
Tax credit carryforwards | 32,186,000 | 29,533,000 | |
Capitalized research and development | 6,826,000 | 11,939,000 | |
Deferred revenue | 4,220,000 | 6,433,000 | |
Other | 45,135,000 | 29,223,000 | |
Total deferred tax assets | 367,490,000 | 308,788,000 | |
Valuation allowance | -367,490,000 | -308,788,000 | |
Net deferred tax asset | 0 | ||
Increase in valuation allowance | $58,700,000 | $105,800,000 |
Income_Taxes_Details_2
Income Taxes (Details 2) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Income Taxes | ||
Excess tax benefit related to the exercise of stock options excluded from net operating loss carryforward | $53.10 | |
Federal | ||
Net operating loss carryforwards available to offset future taxable income | ||
Net operating loss carryforwards | 745.6 | 600.9 |
State | ||
Net operating loss carryforwards available to offset future taxable income | ||
Net operating loss carryforwards | $517.40 | $545.30 |
Income_Taxes_Details_3
Income Taxes (Details 3) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued [Abstract] | |||
Unrecognized tax benefits | $0 | $0 | |
Accrued interest and penalties from uncertain tax positions | 0 | 0 | 0 |
Interest and tax penalties expense expense | 0 | 0 | 0 |
Research and developments | |||
Tax credit carryforwards available to offset future federal and state income taxes | |||
Tax credit carryforward | $35.10 | $32.10 |
Defined_Contribution_Plan_Deta
Defined Contribution Plan (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
401(k) Savings Plan | |||
Employer match of first $6,000 of employee contributions (as a percent) | 75.00% | ||
Amount of employee contributions matched 75% by employer | $6,000 | ||
Continuing operations | |||
401(k) Savings Plan | |||
Compensation cost | $2,600,000 | $2,800,000 | $1,900,000 |
Minimum | |||
401(k) Savings Plan | |||
Employee contribution per calendar year (as a percent of compensation) | 1.00% | ||
Maximum | |||
401(k) Savings Plan | |||
Employee contribution per calendar year (as a percent of compensation) | 100.00% |
Related_Party_Transactions_Det
Related Party Transactions (Details) (USD $) | 12 Months Ended | 1 Months Ended | |||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2009 | Nov. 30, 2009 |
Class B common stock | |||||
Related Party Transactions | |||||
Preferred stock conversion basis | 1 | ||||
Law firm investor | |||||
Related Party Transactions | |||||
Legal fees paid | 0.1 | $0.10 | $0.20 | ||
Law firm investor | Maximum | |||||
Related Party Transactions | |||||
Accounts payable | 0.1 | 0.1 | |||
Forest Laboratories, Inc. | Convertible preferred stock (Note 12) | |||||
Related Party Transactions | |||||
Issuance of Convertible preferred stock (in shares) | 2,083,333 | ||||
Almirall, S.A. | |||||
Related Party Transactions | |||||
Accounts receivable | 0.1 | ||||
Almirall, S.A. | Convertible preferred stock (Note 12) | |||||
Related Party Transactions | |||||
Issuance of Convertible preferred stock (in shares) | 681,819 | ||||
Actavis Plc | |||||
Related Party Transactions | |||||
Accounts receivable | 25.8 | $2.70 |
State_Grants_Details
State Grants (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2012 | Dec. 31, 2011 |
State grant received associated with the Life Science Tax Incentive Program | $1.70 | $0.90 | |
Minimum period for which jobs must be maintained | 5 years | ||
Recognized state grant associated with the Life Sciences Tax Incentive Program | 0.7 | ||
Other Liabilities | |||
Tax incentive due to Massachusetts DOR | $1 |
Workforce_Reduction_Details
Workforce Reduction (Details) (USD $) | 0 Months Ended | 3 Months Ended | 12 Months Ended | |
In Thousands, unless otherwise specified | Jan. 08, 2014 | Dec. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2014 |
Restructuring | ||||
Reduction in workforce (as a percent) | 10.00% | |||
Restructuring-related costs | $4,300 | $4,334 | ||
Restructuring-Adjustments | 100 | 135 | ||
Charges related to the reduction in workforce | ||||
Charges | 4,300 | 4,334 | ||
Adjustments | -100 | -135 | ||
Amounts Paid | -3,648 | |||
Non-cash Expense | -551 | |||
Research and development | ||||
Restructuring | ||||
Restructuring-related costs | 3,000 | |||
Charges related to the reduction in workforce | ||||
Charges | 3,000 | |||
Selling, general and administrative | ||||
Restructuring | ||||
Restructuring-related costs | 1,200 | |||
Charges related to the reduction in workforce | ||||
Charges | 1,200 | |||
Employee severance, benefits and related costs | ||||
Restructuring | ||||
Restructuring-related costs | 4,334 | |||
Restructuring-Adjustments | 135 | |||
Charges related to the reduction in workforce | ||||
Charges | 4,334 | |||
Adjustments | -135 | |||
Amounts Paid | -3,648 | |||
Non-cash Expense | ($551) |
Selected_Quarterly_Financial_D2
Selected Quarterly Financial Data (Unaudited) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Selected Quarterly Financial Data (Unaudited) | |||||||||||
Collaborative arrangements revenue | $38,073 | $16,918 | $6,840 | $14,605 | $5,031 | $4,932 | $9,663 | $3,255 | $76,436 | $22,881 | $150,245 |
Total cost and expenses | 71,198 | 53,657 | 61,959 | 58,992 | 51,769 | 61,483 | 69,543 | 92,088 | 245,806 | 274,883 | 223,007 |
Other (expense) income, net | -4,522 | -5,249 | -5,238 | -5,239 | -5,248 | -5,224 | -5,269 | -5,069 | -20,248 | -20,810 | 138 |
Net income (loss) | ($37,647) | ($41,988) | ($60,357) | ($49,626) | ($51,986) | ($61,775) | ($65,149) | ($93,902) | ($189,618) | ($272,812) | ($72,624) |
Net loss per share - basic and diluted | ($0.27) | ($0.30) | ($0.44) | ($0.38) | ($0.43) | ($0.51) | ($0.57) | ($0.87) | ($1.39) | ($2.35) | ($0.68) |