Document and Entity Information
Document and Entity Information - $ / shares | 9 Months Ended | |
Sep. 30, 2019 | Oct. 25, 2019 | |
Document and Entity Information [Abstract] | ||
Entity Central Index Key | 0001446847 | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2019 | |
Document Transition Report | false | |
Entity File Number | 001-34620 | |
Entity Registrant Name | IRONWOOD PHARMACEUTICALS INC | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 04-3404176 | |
Entity Address, Address Line One | 100 Summer Street | |
Entity Address, Address Line Two | Suite 2300 | |
Entity Address, City or Town | Boston | |
Entity Address, State or Province | MA | |
Entity Address, Postal Zip Code | 02110 | |
City Area Code | 617 | |
Local Phone Number | 621-7722 | |
Title of 12(b) Security | Class A common stock, $0.001 par value | |
Entity Listing, Par Value Per Share | $ 0.001 | |
Trading Symbol | IRWD | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 156,818,126 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 139,231 | $ 173,172 |
Accounts receivable, net | 2,017 | 20,991 |
Related party accounts receivable, net | 94,553 | 59,959 |
Inventory, net | 2,298 | |
Prepaid expenses and other current assets | 11,863 | 10,216 |
Restricted cash | 7,676 | 1,250 |
Current assets of discontinued operations | 847 | |
Total current assets | 257,638 | 266,435 |
Restricted cash, net of current portion | 971 | 6,426 |
Accounts receivable, net of current portion | 32,398 | |
Property and equipment, net | 11,381 | 7,652 |
Operating lease right-of-use assets | 19,793 | |
Convertible note hedges | 11,357 | 41,020 |
Goodwill | 785 | 785 |
Other assets | 20 | 89 |
Non-current assets of discontinued operations | 9,643 | |
Total assets | 334,343 | 332,050 |
Current liabilities: | ||
Accounts payable | 4,505 | 14,891 |
Related party accounts payable, net | 1,593 | |
Accrued research and development costs | 4,956 | 2,963 |
Accrued expenses and other current liabilities | 30,529 | 38,001 |
Capital lease obligations | 73 | |
Current portion of deferred rent | 252 | |
Current portion of 2026 Notes | 47,554 | |
Current portion of operating lease liabilities | 9,934 | |
Current portion of contingent consideration | 51 | |
Current liabilities of discontinued operations | 15,739 | |
Deferred revenue | 1,278 | |
Total current liabilities | 52,795 | 119,524 |
Capital lease obligations, net of current portion | 158 | |
Deferred rent, net of current portion | 6,308 | |
Note hedge warrants | 8,768 | 33,763 |
Convertible senior notes | 402,675 | 265,601 |
Operating lease liabilities, net of current portion | 22,660 | |
Operating lease liabilities, net of current portion | 22,660 | |
2026 Notes, net of current portion | 100,537 | |
Other liabilities | 492 | 2,530 |
Commitments and contingencies | ||
Stockholders' deficit: | ||
Preferred stock, $0.001 par value, 75,000,000 shares authorized, no shares issued and outstanding | ||
Class A common stock, $0.001 par value, 500,000,000 shares authorized and 156,808,126 issued and outstanding at September 30, 2019 and 500,000,000 shares authorized and 154,414,691 shares issued and outstanding at December 31, 2018 | 157 | 154 |
Additional paid-in capital | 1,466,886 | 1,394,603 |
Accumulated deficit | (1,620,090) | (1,591,128) |
Total stockholders' deficit | (153,047) | (196,371) |
Total liabilities and stockholders' deficit | $ 334,343 | $ 332,050 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
Preferred stock | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 75,000,000 | 75,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 156,808,126 | 154,414,691 |
Common stock, shares outstanding | 156,808,126 | 154,414,691 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenues: | ||||
Total revenues | $ 131,167 | $ 65,686 | $ 302,112 | $ 215,947 |
Cost and expenses: | ||||
Cost of revenues, excluding amortization of acquired intangible assets | 506 | 4,616 | 12,862 | 11,288 |
Write-down of commercial supply and inventory to net realizable value and (settlement) loss on non-cancellable purchase commitments | (3,530) | (1,589) | (3,530) | 247 |
Research and development | 27,551 | 29,158 | 88,507 | 72,821 |
Selling, general and administrative | 40,919 | 50,536 | 133,260 | 169,252 |
Amortization of acquired intangible assets | 1,159 | 8,111 | ||
Gain on fair value remeasurement of contingent consideration | (33,519) | (31,045) | ||
Gain on lease modification | (3,169) | |||
Restructuring expenses | (166) | 10,102 | 3,652 | 14,010 |
Impairment of intangible assets | 151,794 | 151,794 | ||
Total cost and expenses | 65,280 | 212,257 | 231,582 | 396,478 |
Income (loss) from operations | 65,887 | (146,571) | 70,530 | (180,531) |
Other (expense) income: | ||||
Interest expense | (10,457) | (9,482) | (29,479) | (28,138) |
Interest and investment income | 893 | 741 | 2,297 | 2,154 |
(Loss) gain on derivatives | (4,766) | 3,489 | (1,494) | 3,996 |
Loss on extinguishment of debt | (30,977) | (30,977) | ||
Other income | 68 | 208 | ||
Other expense, net | (45,239) | (5,252) | (59,445) | (21,988) |
Net income (loss) from continuing operations | 20,648 | (151,823) | 11,085 | (202,519) |
Net loss from discontinued operations | (22,528) | (37,438) | (64,356) | |
Net income (loss) | $ 20,648 | $ (174,351) | $ (26,353) | $ (266,875) |
Net income (loss) per share from continuing operations-basic and diluted (in dollars per share) | $ 0.13 | $ (0.99) | $ 0.07 | $ (1.33) |
Net loss per share from discontinued operations-basic and diluted (in dollars per share) | (0.15) | (0.24) | (0.42) | |
Net income (loss) per share-basic and diluted (in dollars per share) | $ 0.13 | $ (1.14) | $ (0.17) | $ (1.75) |
Weighted average number of common shares-basic and diluted (in shares) | 156,436 | 153,227 | 155,752 | 152,143 |
Collaborative arrangements revenue | ||||
Revenues: | ||||
Total revenues | $ 130,524 | $ 54,194 | $ 273,998 | $ 188,487 |
Product revenue, net | ||||
Revenues: | ||||
Total revenues | 1,235 | 2,966 | ||
Sale of active pharmaceutical ingredient | ||||
Revenues: | ||||
Total revenues | $ 643 | $ 10,257 | $ 28,114 | $ 24,494 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Condensed Consolidated Statements of Comprehensive Income (Loss) | ||||
Net income (loss) | $ 20,648 | $ (174,351) | $ (26,353) | $ (266,875) |
Other comprehensive income: | ||||
Unrealized gains on available-for-sale securities | 35 | 70 | ||
Total other comprehensive income | 35 | 70 | ||
Comprehensive income (loss) | $ 20,648 | $ (174,316) | $ (26,353) | $ (266,805) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Deficit - USD ($) $ in Thousands | Class A common stockCommon Stock | Class B common stockCommon Stock | Additional paid-in capital | Accumulated deficit | Accumulated other comprehensive income (loss) | Total |
Balance at Dec. 31, 2017 | $ 137 | $ 14 | $ 1,318,536 | $ (1,308,760) | $ (79) | $ 9,848 |
Balance (in shares) at Dec. 31, 2017 | 136,465,526 | 13,983,762 | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Issuance of common stock related to share-based awards and employee stock purchase plan | $ 1 | 6,193 | 6,194 | |||
Issuance of common stock related to share-based awards and employee stock purchase plan (in shares) | 882,448 | 272,146 | ||||
Issuance of common stock awards (in shares) | 162 | |||||
Conversion of Class B common stock to Class A common stock (in shares) | 258,551 | (258,551) | ||||
Share-based compensation expense related to share-based awards and employee stock purchase plan | 9,062 | 9,062 | ||||
Unrealized gains (losses) on available-for-sale securities / short-term investments | (12) | (12) | ||||
Net income (loss) | (43,144) | (43,144) | ||||
Balance at Mar. 31, 2018 | $ 138 | $ 14 | 1,333,791 | (1,351,904) | (91) | (18,052) |
Balance (in shares) at Mar. 31, 2018 | 137,606,687 | 13,997,357 | ||||
Balance at Dec. 31, 2017 | $ 137 | $ 14 | 1,318,536 | (1,308,760) | (79) | 9,848 |
Balance (in shares) at Dec. 31, 2017 | 136,465,526 | 13,983,762 | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Unrealized gains (losses) on available-for-sale securities / short-term investments | 70 | |||||
Net income (loss) | (266,875) | |||||
Balance at Sep. 30, 2018 | $ 140 | $ 14 | 1,378,195 | (1,575,635) | (9) | (197,295) |
Balance (in shares) at Sep. 30, 2018 | 139,805,308 | 13,976,855 | ||||
Balance at Mar. 31, 2018 | $ 138 | $ 14 | 1,333,791 | (1,351,904) | (91) | (18,052) |
Balance (in shares) at Mar. 31, 2018 | 137,606,687 | 13,997,357 | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Issuance of common stock related to share-based awards and employee stock purchase plan | $ 1 | 12,865 | 12,866 | |||
Issuance of common stock related to share-based awards and employee stock purchase plan (in shares) | 989,830 | 129,501 | ||||
Issuance of common stock awards (in shares) | 130,045 | |||||
Conversion of Class B common stock to Class A common stock (in shares) | 134,367 | (134,367) | ||||
Share-based compensation expense related to share-based awards and employee stock purchase plan | 10,568 | 10,568 | ||||
Unrealized gains (losses) on available-for-sale securities / short-term investments | 47 | 47 | ||||
Net income (loss) | (49,380) | (49,380) | ||||
Balance at Jun. 30, 2018 | $ 139 | $ 14 | 1,357,224 | (1,401,284) | (44) | (43,951) |
Balance (in shares) at Jun. 30, 2018 | 138,860,929 | 13,992,491 | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Issuance of common stock upon exercise of stock options, employee stock purchase plan and restricted stock units | $ 1 | 8,319 | 8,320 | |||
Issuance of common stock upon exercise of stock options, employee stock purchase plan and restricted stock units (in shares) | 621,420 | 307,051 | ||||
Issuance of common stock awards (in shares) | 272 | |||||
Conversion of Class B common stock to Class A common stock (in shares) | 322,687 | (322,687) | ||||
Share-based compensation expense related to share-based awards and employee stock purchase plan | 12,652 | 12,652 | ||||
Unrealized gains (losses) on available-for-sale securities / short-term investments | 35 | 35 | ||||
Net income (loss) | (174,351) | (174,351) | ||||
Balance at Sep. 30, 2018 | $ 140 | $ 14 | 1,378,195 | (1,575,635) | $ (9) | (197,295) |
Balance (in shares) at Sep. 30, 2018 | 139,805,308 | 13,976,855 | ||||
Balance at Dec. 31, 2018 | $ 154 | 1,394,603 | (1,591,128) | (196,371) | ||
Balance (in shares) at Dec. 31, 2018 | 154,414,691 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Issuance of common stock related to share-based awards and employee stock purchase plan | $ 2 | 3,486 | 3,488 | |||
Issuance of common stock related to share-based awards and employee stock purchase plan (in shares) | 1,210,858 | |||||
Share-based compensation expense related to share-based awards and employee stock purchase plan | 14,988 | 14,988 | ||||
Net income (loss) | (59,284) | (59,284) | ||||
Balance at Mar. 31, 2019 | $ 156 | 1,413,077 | (1,650,412) | (237,179) | ||
Balance (in shares) at Mar. 31, 2019 | 155,625,549 | |||||
Balance at Dec. 31, 2018 | $ 154 | 1,394,603 | (1,591,128) | (196,371) | ||
Balance (in shares) at Dec. 31, 2018 | 154,414,691 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income (loss) | (26,353) | |||||
Balance at Sep. 30, 2019 | $ 157 | 1,466,886 | (1,620,090) | (153,047) | ||
Balance (in shares) at Sep. 30, 2019 | 156,808,126 | |||||
Balance at Mar. 31, 2019 | $ 156 | 1,413,077 | (1,650,412) | (237,179) | ||
Balance (in shares) at Mar. 31, 2019 | 155,625,549 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Issuance of common stock upon exercise of stock options and employee stock purchase plan, net of cancellations | 1,801 | 1,801 | ||||
Issuance of common stock upon exercise of stock options and employee stock purchase plan, net of cancellations (in shares) | 621,588 | |||||
Share-based compensation expense related to share-based awards and employee stock purchase plan | 6,337 | 6,337 | ||||
Share-based compensation expense related to share-based awards and employee stock purchase plan (in shares) | 195,195 | |||||
Dividend of sGC business | (2,609) | (2,609) | ||||
Net income (loss) | 12,283 | 12,283 | ||||
Balance at Jun. 30, 2019 | $ 156 | 1,421,215 | (1,640,738) | (219,367) | ||
Balance (in shares) at Jun. 30, 2019 | 156,442,332 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Issuance of common stock related to share-based awards and employee stock purchase plan | $ 1 | 1,859 | 1,860 | |||
Issuance of common stock related to share-based awards and employee stock purchase plan (in shares) | 364,102 | |||||
Share-based compensation expense related to share-based awards and employee stock purchase plan | 5,520 | 5,520 | ||||
Share-based compensation expense related to share-based awards and employee stock purchase plan (in shares) | 1,692 | |||||
Equity component of convertible senior notes | 92,502 | 92,502 | ||||
Equity component of issuance costs for convertible senior notes | (2,092) | (2,092) | ||||
Equity component of the partial repurchase of the 2022 Convertible Notes | (26,959) | (26,959) | ||||
Purchase of capped calls | (25,159) | (25,159) | ||||
Net income (loss) | 20,648 | 20,648 | ||||
Balance at Sep. 30, 2019 | $ 157 | $ 1,466,886 | $ (1,620,090) | $ (153,047) | ||
Balance (in shares) at Sep. 30, 2019 | 156,808,126 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash flows from operating activities: | ||
Net loss | $ (26,353) | $ (266,875) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 4,713 | 3,165 |
Amortization of acquired intangible assets | 8,111 | |
Impairment of intangible assets | 151,794 | |
Loss (gain) on disposal of property and equipment | 109 | (1,591) |
Gain on lease modification | (3,169) | |
Share-based compensation expense | 25,792 | 30,165 |
Change in fair value of note hedge warrants | 740 | 30,590 |
Change in fair value of convertible note hedges | 754 | (34,586) |
Write-down of commercial supply and inventory to net realizable value and (settlement) loss on non-cancellable purchase commitments | (3,530) | 247 |
Write-down of excess non-cancellable ZURAMPIC and DUZALLO sample purchase commitments | 390 | |
Accretion of discount/premium on investment securities | (157) | |
Non-cash interest expense | 15,532 | 13,044 |
Non-cash change in fair value of contingent consideration | (31,045) | |
Loss on extinguishment of debt | 30,977 | |
Changes in assets and liabilities: | ||
Accounts receivable and related party accounts receivable, net | (46,712) | 16,782 |
Prepaid expenses and other current assets | (421) | (13,513) |
Inventory, net | (1,086) | (713) |
Other assets | 119 | |
Accounts payable, related party accounts payable and accrued expenses | (37,275) | (6,988) |
Accrued research and development costs | 1,021 | (1,241) |
Operating lease right-of-use assets | 12,091 | |
Operating lease liabilities | (2,680) | |
Deferred revenue | 1,278 | 13,521 |
Deferred rent | 716 | |
Net cash used in continuing operating activities | (28,219) | (88,065) |
Net cash provided by discontinued operating activities | 11,364 | 7,910 |
Net cashed used in operating activities | (16,855) | (80,155) |
Cash flows from investing activities: | ||
Purchases of available-for-sale securities | (3,241) | |
Sales and maturities of available-for-sale securities | 79,312 | |
Purchases of property and equipment | (4,521) | (97) |
Proceeds from sale of property and equipment | 261 | 627 |
Net cash (used in) provided by continuing investing activities | (4,260) | 76,601 |
Net cash used in discontinued investing activities | (4,223) | (5,223) |
Net cash (used in) provided by investing activities | (8,483) | 71,378 |
Cash flows from financing activities: | ||
Proceeds from issuance of convertible senior notes | 400,000 | |
Purchase of capped calls | (25,159) | |
Proceeds from partial termination of convertible note hedges and warrants | 3,174 | |
Costs associated with issuance of convertible senior notes | (9,048) | |
Proceeds from exercise of stock options and employee stock purchase plan | 7,148 | 27,152 |
Payments on capital lease obligations | (1,822) | |
Payments for partial repurchase of 2022 Convertible Notes | (227,338) | |
Payments on 2026 Notes | (156,409) | |
Payments on contingent purchase price consideration | (107) | |
Net cash (used in) provided by continuing financing activities | (7,632) | 25,223 |
Net cash (used in) provided by financing activities | (7,632) | 25,223 |
Net (decrease) increase in cash, cash equivalents and restricted cash | (32,970) | 16,446 |
Cash, cash equivalents and restricted cash, beginning of period | 180,848 | 132,792 |
Cash, cash equivalents and restricted cash, end of period | $ 147,878 | $ 149,238 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2019 | Sep. 30, 2018 |
Reconciliation of cash, cash equivalents, and restricted cash to the condensed consolidated balance sheets | ||
Cash and cash equivalents | $ 139,231 | $ 141,562 |
Restricted cash | 8,647 | 7,676 |
Total cash, cash equivalents, and restricted cash | $ 147,878 | $ 149,238 |
Nature of Business
Nature of Business | 9 Months Ended |
Sep. 30, 2019 | |
Disclosure Text Block | |
Nature of Business | 1. Nature of Business Overview Ironwood Pharmaceuticals, Inc. (“Ironwood” or the “Company”) is a gastrointestinal (“GI”) focused healthcare company dedicated to creating medicines that make a difference for people living with GI diseases. The Company is advancing innovative product opportunities in areas of large unmet need, capitalizing on its proven development and commercial capabilities and its deep expertise in GI diseases. On April 1, 2019, the Company completed its tax-free spin-off of its soluble guanylate cyclase (“sGC”) business into a separate publicly traded company, Cyclerion Therapeutics, Inc. (“Cyclerion”). The Company’s commercial product, linaclotide, is available to adult men and women suffering from irritable bowel syndrome with constipation (“IBS-C”), or chronic idiopathic constipation (“CIC”), in certain countries around the world. As many as 13 million adults suffer from IBS-C and as many as 35 million adults suffer from CIC in the U.S. alone, according to our analysis of studies including P Pare, et al. (published in 2001 in the American Journal of Gastroenterology) and J.F. Johanson, et al. (published in 2007 in Alimentary Pharmacology and Therapeutics) and American College of Gastroenterology Chronic Constipation Task Force (2005), American Journal of Gastroenterology Vol. 100, No. S1, 2005. Symptoms of IBS-C include abdominal pain, discomfort or bloating and constipation symptoms (for example, incomplete evacuation, infrequent bowel movements, hard/lumpy stools), while CIC is primarily characterized by constipation symptoms. Linaclotide is available under the trademarked name LINZESS ® ® to adult men and women suffering from IBS-C or CIC in Canada, and to adult men and women suffering from IBS-C in certain European countries. The Company has strategic partnerships with leading pharmaceutical companies to support the development and commercialization of linaclotide throughout the world. The Company and its partner, Allergan plc (together with its affiliates, “Allergan”), began commercializing LINZESS in the U.S. in December 2012. Under the Company’s collaboration with Allergan for North America, total net sales of LINZESS in the U.S., as recorded by Allergan, are reduced by commercial costs incurred by each party and the resulting amount is shared equally between the Company and Allergan. Allergan also has an exclusive license from the Company to develop and commercialize linaclotide in all countries other than China, including Hong Kong and Macau, Japan and the countries and territories of North America (the “Allergan License Territory”). On a country-by-country and product-by-product basis in the Allergan License Territory, Allergan pays the Company a royalty as a percentage of net sales of products containing linaclotide as an active ingredient. In addition, Allergan has exclusive rights to commercialize linaclotide in Canada as CONSTELLA and in Mexico as LINZESS. Astellas Pharma Inc. (“Astellas”), the Company’s partner in Japan, has an exclusive license to develop and commercialize linaclotide in Japan. In March 2017, Astellas began commercializing LINZESS for the treatment of adults with IBS-C in Japan, and in September 2018, Astellas began commercializing LINZESS for the treatment of adults with chronic constipation in Japan. On August 1, 2019, the Company amended and restated its license agreement with Astellas. Beginning in 2020, the Company will no longer be responsible for the supply of linaclotide active pharmaceutical ingredient (“API”) to Astellas (Note 4). In October 2012, the Company and AstraZeneca AB (together with its affiliates, “AstraZeneca”), entered into a collaboration agreement to co-develop and co-commercialize linaclotide in China, including Hong Kong and Macau (the “AstraZeneca License Territory”). In January 2019, the National Medical Products Administration approved the marketing application for LINZESS for adults with IBS-C in China. On September 16, 2019, the Company amended its existing collaboration agreement with AstraZeneca. As of September 16, 2019, AstraZeneca has the exclusive right to develop, manufacture, and commercialize products containing linaclotide in the AstraZeneca License Territory (Note 4). The Company and Allergan are exploring ways to enhance the clinical profile of LINZESS by studying linaclotide in additional indications, populations, and formulations to assess its potential to treat various conditions. In June 2019, the Company announced positive topline data from its Phase IIIb trial demonstrating the efficacy and safety of LINZESS 290 mcg on the overall abdominal symptoms of bloating, pain and discomfort, in adult patients with IBS-C. The Company and Allergan are advancing MD-7246, a delayed release form of linaclotide, as an oral, intestinal, non-opioid pain-relieving agent for patients suffering from abdominal pain associated with certain GI diseases. There are an estimated 16 million Americans who suffer from symptoms of IBS with diarrhea (“IBS-D”), according to Grundmann and Yoon in Irritable Bowel Syndrome: epidemiology, diagnosis and treatment: an update for health-care practitioners (published in the Journal of Gastroenterology and Hepatology in 2010) and the United States Census Bureau. In May 2019, the Company and Allergan initiated a Phase II clinical trial evaluating MD-7246 in adult patients with IBS-D. The Company is advancing IW-3718, a gastric retentive formulation of a bile acid sequestrant, for the potential treatment of persistent gastroesophageal reflux disease (“GERD”). There are an estimated 10 million Americans who suffer regularly from symptoms of GERD, such as heartburn and regurgitation, despite receiving treatment with the current standard of care, a proton pump inhibitor, to suppress stomach acid, according to a study published in 2014 by HB El-Sarag, Sweet S, Winchester CC et al Gut The Company periodically enters into co-promotion agreements to maximize its salesforce productivity, such as its co-promotion agreement with Allergan to perform sales detailing activities for VIBERZI for treatment for adults suffering from IBS-D. In August 2019, the Company entered into a disease education and promotional agreement with Alnylam Pharmaceuticals, Inc. (“Alnylam”) for Alnylam’s givosiran, an investigational RNAi therapeutic for the treatment of patients with acute hepatic porphyria (“AHP”). Under the agreement, the Company will perform disease awareness activities related to AHP and, if givosiran is approved by the U.S. Food and Drug Administration (“FDA”), future sales detailing activities of a product containing givosiran (Note 4). On April 1, 2019, Ironwood completed the separation of its sGC business, and certain other assets and liabilities, into Cyclerion (the “Separation”). The Separation was effected by means of a distribution of all of the outstanding shares of common stock, with no par value, of Cyclerion through a dividend of all outstanding shares of Cyclerion’s common stock, to Ironwood’s stockholders of record as of the close of business on March 19, 2019 (Note 2). On June 11, 2019, the Company entered into a non-cancelable operating lease (the “Summer Street Lease”) for approximately 39,000 square feet of office space on the 23 rd The proceeds from the issuance of the 2024 Convertible Notes and the 2026 Convertible Notes were used in August 2019 to pay the cost of associated capped call transactions (the “Capped Calls”) and to repurchase $215.0 million aggregate principal amount of the existing 2.25% Convertible Senior Notes due 2022 (the “2022 Convertible Notes”). The proceeds from the issuance of the 2024 Convertible Notes and 2026 Convertible Notes were also used to redeem all of the outstanding principal balance of the 8.375% Notes due 2026 (the “2026 Notes”) on September 16, 2019 (Note 9). The Company retired the 2026 Notes, which had an outstanding aggregate principal balance of approximately $116.5 million, for a redemption price of approximately $123.0 million. During the three months ended September 30, 2019, the Company recognized a loss on extinguishment of debt of approximately $31.0 million related to the redemption of the 2026 Notes and the partial repurchase of the 2022 Convertible Notes. Basis of Presentation The accompanying condensed consolidated financial statements and the related disclosures are unaudited and have been prepared in accordance with accounting principles generally accepted in the U.S. Additionally, certain information and footnote disclosures normally included in the Company’s annual financial statements have been condensed or omitted. Accordingly, these interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, which was filed with the Securities and Exchange Commission on February 25, 2019 (the “2018 Annual Report on Form 10-K”). The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all normal recurring adjustments considered necessary for a fair presentation of the Company’s financial position as of September 30, 2019, and the results of its operations for the three and nine months ended September 30, 2019 and 2018, its statements of stockholders’ deficit for the three and nine months ended September 30, 2019 and 2018, and its cash flows for the nine months ended September 30, 2019 and 2018. The results of operations for the three and nine months ended September 30, 2019 and 2018 are not necessarily indicative of the results that may be expected for the full year or any other subsequent interim period. Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of Ironwood and its wholly-owned subsidiaries as of September 30, 2019, Ironwood Pharmaceuticals Securities Corporation and Ironwood Pharmaceuticals GmbH. Cyclerion was a wholly-owned subsidiary until it became an independent, publicly-traded company on April 1, 2019. All intercompany transactions and balances are eliminated in consolidation. Use of Estimates The preparation of condensed 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 and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the amounts of revenues and expenses during the reported periods. On an on-going basis, the Company’s management evaluates its estimates, judgments and methodologies. Significant estimates and assumptions in the condensed consolidated financial statements include those related to revenue recognition; available-for-sale securities; accounts receivable; inventory valuation, and related reserves; impairment of long-lived assets, including goodwill; valuation procedures for right-of-use assets and operating lease liabilities; initial valuation procedures for the issuance and repurchase of convertible notes; valuation of assets and liabilities held for disposition and losses related to discontinued operations; fair value of derivatives; balance sheet classification of notes payable and convertible notes; income taxes, including the valuation allowance for deferred tax assets; research and development expenses; 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 materially from these estimates under different assumptions or conditions. Changes in estimates are reflected in reported results in the period in which they become known. Reclassifications of Prior Period Financial Statements Certain prior period financial statement items, such as discontinued operations, have been reclassified to conform to current period presentation. Summary of Significant Accounting Policies The Company’s significant accounting policies are described in Note 2, Summary of Significant Accounting Policies Discontinued Operations During the three months ended June 30, 2019, the Company determined that its sGC business met the criteria for classification as a discontinued operation in accordance with Accounting Standards Codification (“ASC”) Subtopic 205-20, Discontinued Operations Cyclerion Separation Leases Effective January 1, 2019, the Company adopted ASC Topic 842, Leases Leases The recognition of right-of-use assets and lease liabilities related to the Company’s operating leases under ASC 842 has had a material impact on the Company’s condensed consolidated financial statements. As part of the ASC 842 adoption, the Company elected certain practical expedients outlined in the guidance. These practical expedients include: ● Accounting policy election to use the short-term lease exception by asset class; ● Election of the practical expedient package during transition, which includes: o An entity need not reassess whether any expired or existing contracts are or contain leases. o An entity need not reassess the classification for any expired or existing leases. As a result, all leases that were classified as operating leases in accordance with ASC 840 are classified as operating leases under ASC 842, and all leases that were classified as capital leases in accordance with ASC 840 are classified as finance leases under ASC 842. o An entity need not reassess initial direct costs for any existing leases. Subsequent to the Company’s adoption of ASC 842, the Company elected the post-transition practical expedient, by class of underlying asset, to account for lease components and non-lease components together as a single component for the asset class of operating lease right-of-use real estate assets. The Company’s lease portfolio for the three and nine months ended September 30, 2019 includes: leases for its prior and current headquarters locations, a data center colocation lease, vehicle leases for its salesforce representatives, and leases for computer and office equipment. The Company determines if an arrangement is a lease at the inception of the contract. The asset component of the Company’s operating leases is recorded as operating lease right-of-use assets, and the liability component is recorded as current portion of operating lease liabilities and operating lease liabilities, net of current portion in the Company’s condensed consolidated balance sheets. As of September 30, 2019, the Company did not have any finance leases. Right-of-use assets and operating lease liabilities are recognized based on the present value of lease payments over the lease term at the lease inception date. Existing leases in the Company’s lease portfolio as of the adoption date were valued as of January 1, 2019. The Company uses an incremental borrowing rate based on the information available at lease inception in determining the present value of lease payments, if an implicit rate of return is not provided with the lease contract. Operating lease right-of-use assets are adjusted for incentives expected to be received. Right-of-use assets and operating lease liabilities are remeasured upon certain modifications to leases using the present value of remaining lease payments and estimated incremental borrowing rate upon lease modification. Lease cost is recognized on a straight-line basis over the lease term, and includes amounts related to short-term leases. The Company recognizes variable lease payments as operating expenses in the period in which the obligation for those payments is incurred. Variable lease payments primarily include common area maintenance, utilities, real estate taxes, insurance, and other operating costs that are passed on from the lessor in proportion to the space leased by the Company. Derivative Assets and Liabilities In June 2015, in connection with the issuance of the 2022 Convertible Notes, the Company entered into convertible note hedge transactions (the “Convertible Note Hedges”). Concurrently with entering into the Convertible Note Hedges, the Company also entered into certain warrant transactions in which it sold note hedge warrants (the “Note Hedge Warrants”) to the Convertible Note Hedge counterparties to acquire shares of the Company’s Class A common stock, subject to customary anti-dilution adjustments (Note 12). In connection with the partial repurchase of the 2022 Convertible Notes in August 2019, the Company terminated its Convertible Note Hedges and Note Hedge Warrants proportionately. These instruments are derivative financial instruments under ASC Topic 815, Derivatives and Hedging These derivatives are recorded as assets or liabilities at fair value each reporting period and the fair value is determined using the Black-Scholes option-pricing model. The changes in fair value are recorded as a component of other (expense) income in the consolidated statements of operations. Significant inputs used to determine the fair value include the price per share of the Company’s Class A common stock on the date of valuation, time to maturity of the derivative instruments, the strike prices of the derivative instruments, the risk-free interest rate, and the volatility of the Company’s Class A common stock. Changes to these inputs could materially affect the valuation of the Convertible Note Hedges and Note Hedge Warrants in future periods. In August 2019, in connection with the issuance of the 2024 Convertible Notes and the 2026 Convertible Notes, the Company entered into the Capped Calls with certain financial institutions. Subject to customary anti-dilution and certain other adjustments, the Capped Calls cover the same number of shares of Class A common stock that initially underlie the 2024 Convertible Notes and the 2026 Convertible Notes. These instruments meet the conditions outlined in ASC 815 to be classified in stockholders’ deficit and are not subsequently remeasured as long as the conditions for equity classification continue to be met. New Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (the “FASB”) or other standard setting bodies that are adopted by the Company as of the specified effective date. Except as set forth below, the Company did not adopt any new accounting pronouncements during the three and nine months ended September 30, 2019 that had a material effect on its condensed consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. Subsequent to the issuance of ASU 2016-02, the FASB issued ASU No. 2018-10, Leases (Topic 842), Codification Improvements Leases (Topic 842), Targeted Improvements , Leases (Topic 842), Codification Improvements . . In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments Financial Instruments—Credit Losses (Topic 326): Targeted Transition Relief is permitted. The Company is currently evaluating the potential impact that the adoption of these ASUs will have on the Company’s financial position and results of operations. In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350) In June 2018, the FASB issued ASU No. 2018-07, Compensation—Stock Compensation (Topic 718) Improvements to Nonemployee Share-Based Payment Accounting . In July 2018, the FASB issued ASU 2018-09, Codification Improvements Compensation—Stock Compensation—Income Taxes Compensation—Stock Compensation—Income Taxes In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirement for Fair Value Measurement In August 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract (a consensus of the FASB Emerging Issues Task Force) In October 2018, the FASB issued ASU No. 2018-17, Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities In July 2019, the FASB issued ASU No. 2019-07, Disclosure Update and Simplification and Investment Company Reporting Modernization |
Cyclerion Separation
Cyclerion Separation | 9 Months Ended |
Sep. 30, 2019 | |
Disclosure Text Block | |
Cyclerion Separation | 2. Cyclerion Separation On April 1, 2019, Ironwood completed the Separation of Cyclerion. The Separation was effected by means of a distribution of all of the outstanding shares of common stock, with no par value, of Cyclerion through a dividend of Cyclerion’s common stock, to Ironwood’s stockholders of record as of the close of business on March 19, 2019. Prior to the Separation on April 1, 2019, as described in Note 1, Nature of Business Agreements with Cyclerion The separation agreement with Cyclerion, dated as of March 30, 2019, sets forth, among other things, the Company’s agreements with Cyclerion regarding the principal actions to be taken in connection with the Separation, including the distribution, which was effective as of April 1, 2019. The separation agreement identifies assets transferred, liabilities assumed by and contracts assigned to each of Cyclerion and Ironwood as part of the Separation, and it provides for when and how these transfers, assumptions and assignments occur. The purpose of the separation agreement is to provide Cyclerion and Ironwood with assets to operate their respective businesses and retain or assume liabilities related to those assets. As of April 1, 2019 Assets: Prepaid expenses and other current assets $ 1,169 Property and equipment, net 10,241 Other assets 21 $ 11,431 Liabilities: Accrued research and development costs $ 5,673 Accrued expenses and other current liabilities 3,149 $ 8,822 Net Assets Transferred to Cyclerion $ 2,609 In addition, the Company received approximately $1.3 million during the three months ended September 30, 2019 associated with tenant improvement reimbursement provisions related to the Cyclerion lease in accordance with the separation agreement. The tax matters agreement, dated as of March 30, 2019, governs each party’s rights, responsibilities and obligations with respect to taxes, including taxes, if any, incurred as a result of any failure of the Separation to qualify as tax-free. In general, if the parties incur tax liabilities in the event that the Separation is not tax-free, each party is expected to be responsible for any taxes imposed on Ironwood or Cyclerion that arise from the failure of the Separation to qualify as a transaction that is generally tax-free for U.S. federal income tax purposes, under Sections 355 and 368(a)(1)(D) and certain other relevant provisions of the Internal Revenue Code of 1986, as amended, to the extent that the failure to so qualify is attributable to an acquisition of stock or assets of, or certain actions, omissions or failures to act of, such party. If both Ironwood and Cyclerion are responsible for such failure, liability will be shared according to relative fault. U.S. tax otherwise resulting from the failure of the Separation to qualify as a transaction that is tax-free generally will be the responsibility of Ironwood. Each party otherwise agreed to indemnify the other party from and against any liability for taxes allocated to such party under the tax matters agreement and any taxes resulting from breach of any such party’s covenants under the tax matters agreement, the separation agreement, or any ancillary agreement entered into in connection with the Separation. Cyclerion agreed to certain covenants that contain restrictions intended to preserve the tax-free status of the distribution and certain related transactions. The employee matters agreement, dated as of March 30, 2019, allocates assets, liabilities and responsibilities relating to the employment, compensation, and employee benefits of Ironwood and Cyclerion employees, and other related matters in connection with the Separation, including the treatment of outstanding Ironwood incentive equity awards. Pursuant to the employee matters agreement, the outstanding Ironwood equity awards held by Cyclerion and Ironwood employees were adjusted in connection with the Separation, with the intent to maintain, immediately following the Separation, the economic value of the awards. No incremental stock-based compensation expense was recognized during the three or nine months ended September 30, 2019 (Note 10). Additionally, the Company entered into two transition services agreements and a development agreement with Cyclerion. Pursuant to the transition service agreements, the Company is obligated to provide and is entitled to receive certain transition services related to corporate functions, such as finance, procurement, facilities and development. Services provided by the Company to Cyclerion will continue for an initial term of one to two years from the date of the Separation (as applicable), unless earlier terminated or extended according to the terms of the transition services agreement. Services provided by Cyclerion to the Company will continue for an initial term of one year from the date of the Separation, unless earlier terminated or extended according to the terms of such transition services agreement. Services received and performed are paid at a mutually agreed upon rate. Amounts for services provided to Cyclerion are recorded as other income and amounts for services provided by Cyclerion are recorded as selling, general and administrative expense and research and development expense, as applicable. During the three and nine months ended September 30, 2019, the Company recorded an insignificant amount and approximately $0.2 million as other income for services provided to Cyclerion, respectively. During each of the three and nine months ended September 30, 2019, the Company recorded an insignificant amount in both selling, general and administrative expense and research and development expense for services provided by Cyclerion. Pursuant to the development agreement, Cyclerion is obligated to provide the Company with certain research and development services with respect to certain of Ironwood’s products and product candidates, including MD-7246 and IW-3718. Such research and development activities are governed by a joint steering committee comprised of representatives from both Cyclerion and Ironwood. Services received are paid at a mutually agreed upon rate. The Company recorded approximately $1.4 million and approximately $3.0 million in research and development expenses under the development agreement during the three and nine months ended September 30, 2019, respectively. Discontinued Operations Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Costs and expenses: Research and development — 17,636 21,792 49,410 Selling, general and administrative — 4,712 15,646 13,860 Restructuring expenses — 180 — 1,086 Net loss from discontinued operations — 22,528 37,438 64,356 Assets: Prepaid expenses and other current assets $ 847 Property and equipment, net 9,618 Other assets 25 $ 10,490 Liabilities: Accounts payable $ 3,232 Accrued research and development costs 5,256 Accrued expenses and other current liabilities 7,251 $ 15,739 |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 9 Months Ended |
Sep. 30, 2019 | |
Disclosure Text Block | |
Net Income (Loss) Per Share | 3. Net Income (Loss) Per Share Basic and diluted net income (loss) per common share is computed by dividing net (income) loss by the weighted average number of common shares outstanding during the period. In June 2015, in connection with the issuance of approximately $335.7 million in aggregate principal amount of 2022 Convertible Notes (Note 9), the Company entered into the Convertible Note Hedges. The Convertible Note Hedges are generally expected to reduce the potential dilution to the Company’s Class A common stockholders upon a conversion of the 2022 Convertible Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of converted 2022 Convertible Notes in the event that the market price per share of the Company’s Class A common stock, as measured under the terms of the Convertible Note Hedges, is greater than the conversion price of the 2022 Convertible Notes. The Convertible Note Hedges are not considered for purposes of calculating the number of diluted weighted average shares outstanding, as their effect would be anti-dilutive. A proportionate amount of these Convertible Note Hedges were terminated in connection with the partial repurchase of the 2022 Convertible Notes in August 2019. Concurrently with entering into the Convertible Note Hedges, the Company also entered into the Note Hedge Warrants to the Convertible Note Hedge counterparties to acquire shares of the Company’s Class A common stock, subject to customary anti-dilution adjustments (Note 9). The Note Hedge Warrants could have a dilutive effect on the Company’s Class A common stock to the extent that the market price per share of the Class A common stock exceeds the applicable strike price of such warrants. The Note Hedge Warrants are not considered for purposes of calculating the number of diluted weighted averages shares outstanding, as their effect would be anti-dilutive. A proportionate amount of these Note Hedge Warrants were terminated in connection with the partial repurchase of the 2022 Convertible Notes in August 2019. In August 2019, in connection with the issuance of the 2024 Convertible Notes and the 2026 Convertible Notes, the Company entered into the Capped Calls. The Capped Calls are generally expected to reduce the potential dilution to the Company’s Class A common stockholders upon a conversion of the 2024 Convertible Notes or the 2026 Convertible Notes and/or offset any cash payments that the Company is required to make in excess of the principal amount of converted 2024 Convertible Notes or 2026 Convertible Notes in the event that the market price per share of the Company’s Class A common stock, as measured under the terms of the Capped Calls, is greater than the conversion price of the 2024 Convertible Notes or the 2026 Convertible Notes. The Capped Calls are not considered for purposes of calculating the number of diluted weighted average shares outstanding, as their effect would be anti-dilutive. The following potentially dilutive securities have been excluded from the computation of diluted weighted average shares outstanding, as applicable, as their effect would be anti-dilutive (in thousands): As of September 30, 2019 2018 Options to purchase Class A common stock 17,889 20,860 Shares subject to repurchase 182 97 Restricted stock units 2,838 3,238 Shares subject to issuance under Employee Stock Purchase Plan 67 59 Note Hedge Warrants 8,318 20,250 2022 Convertible Notes 8,318 20,250 2024 Convertible Notes 14,934 — 2026 Convertible Notes 14,934 — Total 67,480 64,754 During the three and nine months ended September 30, 2019, the Company recorded net income of approximately $20.6 million and net loss of approximately $26.4 million, respectively. The inclusion of applicable securities in the calculation of diluted earnings per share was anti-dilutive for the three months ended September 30, 2019. As a result, diluted earnings per share is equivalent to basic earnings per share for the three and nine months ended September 30, 2019. |
Collaboration, License, Co-Prom
Collaboration, License, Co-Promotion and Other Commercial Agreements | 9 Months Ended |
Sep. 30, 2019 | |
Disclosure Text Block | |
Collaboration, License, Co-Promotion and Other Commercial Agreements | 4. Collaboration, License, Co-Promotion and Other Commercial Agreements For the three and nine months ended September 30, 2019, the Company had linaclotide collaboration agreements with Allergan for North America and AstraZeneca for China, including Hong Kong and Macau, as well as linaclotide license agreements with Astellas for Japan and with Allergan for the Allergan License Territory. The Company also had agreements with Allergan to co-promote VIBERZI in the U.S. and Alnylam to perform disease awareness activities for AHP and, if givosiran is approved by the FDA, future sales detailing activities of a product containing givosiran. The following table provides amounts included in the Company’s condensed consolidated statements of operations as collaborative arrangements revenue and sale of active pharmaceutical ingredient (“API”) attributable to transactions from these arrangements (in thousands): Three Months Ended Nine Months Ended September 30, September 30, Collaborative Arrangements Revenue 2019 2018 2019 2018 Linaclotide Collaboration Agreements: Allergan (North America) $ 85,107 $ 52,724 $ 225,390 $ 184,133 Allergan (Europe and other) 526 255 1,208 831 AstraZeneca (China, including Hong Kong and Macau) 32,401 — 32,401 — Astellas (Japan) 10,059 — 10,059 — Co-Promotion and Other Agreements: Allergan (VIBERZI) 1,363 750 2,602 2,250 Alnylam (givosiran) 722 — 722 — Other 346 465 1,616 1,273 Total collaborative arrangements revenue $ 130,524 $ 54,194 $ 273,998 $ 188,487 Sale of API (1) Linaclotide License Agreements: Astellas (Japan) $ — $ 9,501 $ 27,468 $ 23,738 AstraZeneca (China, including Hong Kong and Macau) 643 — 646 — Other (1) — 756 — 756 Total sale of API $ 643 $ 10,257 $ 28,114 $ 24,494 (1) During the three months ended September 30, 2018, the Company recorded approximately $0.8 million in revenue related to the sale of API to Allergan. Accounts receivable, net and related party accounts receivable, net included approximately $129.0 million related to collaborative arrangements revenue and sale of API as of September 30, 2019, net of approximately $3.8 million related to related party accounts payable. As of September 30, 2019, there were no impairment indicators for the accounts receivable recorded. Linaclotide Agreements Collaboration Agreement for North America with Allergan In September 2007, the Company entered into a collaboration agreement with Allergan to develop and commercialize linaclotide for the treatment of IBS-C, CIC and other GI conditions in North America. Under the terms of this collaboration agreement, the Company received a non-refundable, upfront licensing fee and shares equally with Allergan 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. Allergan is solely responsible for the further development, regulatory approval and commercialization of linaclotide in those countries and funding any costs. The collaboration agreement for North America also includes contingent milestone payments, as well as a contingent equity investment, based on the achievement of specific development and commercial milestones. At September 30, 2019, $205.0 million in license fees and all six development milestone payments had been received by the Company, as well as a $25.0 million equity investment in the Company’s capital stock (Note 11). The Company can also achieve up to $100.0 million in a sales-related milestone if certain conditions are met, which will be recognized as collaborative arrangements revenue when it is probable that a significant reversal of revenue would not occur and the associated constraints have been lifted. As a result of the research and development cost-sharing provisions of the linaclotide collaboration for North America, the Company offset approximately $0.9 million and approximately $6.5 million in incremental research and development costs during the three and nine months ended September 30, 2019, respectively, and offset approximately $2.5 million and approximately $5.8 million in incremental research and development costs during the three and nine months ended September 30, 2018, respectively, to reflect the obligations of each party under the collaboration to bear half of the development costs incurred. The Company and Allergan began commercializing LINZESS in the U.S. in December 2012. 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. Net profits or net losses consist of net sales of LINZESS to third-party customers and sublicense income in the U.S. less the cost of goods sold as well as selling, general and administrative expenses. LINZESS net sales are calculated and recorded by Allergan and may include gross sales net of discounts, rebates, allowances, sales taxes, freight and insurance charges, and other applicable deductions. If either party provided fewer calls on physicians in a particular year than it was contractually required to provide, such party’s share of the net profits would be adjusted as set forth in the collaboration agreement for North America. The Company has completed its obligations under the terms of the commercial agreement with Allergan, pursuant to which it promoted CANASA, and these adjustments to the share of the net profits have been eliminated, in full, in 2018 and all subsequent years. The Company evaluated this collaboration arrangement under ASC 606, Revenue from Contracts with Customers Under the Company’s collaboration agreement with Allergan for North America, LINZESS net sales are calculated and recorded by Allergan and include gross sales net of discounts, rebates, allowances, sales taxes, freight and insurance charges, and other applicable deductions, as noted above. These amounts include the use of estimates and judgments, which could be adjusted based on actual results in the future. 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 less commercial expenses and presents the settlement payments to and from Allergan as collaboration expense or collaborative arrangements revenue, as applicable. This treatment is in accordance with the Company’s revenue recognition policy, given that the Company is not the primary obligor and does not have the inventory risks in the collaboration agreement with Allergan for North America. The Company relies on Allergan to provide accurate and complete information related to net sales of LINZESS in accordance with U.S. generally accepted accounting principles in order to calculate its settlement payments to and from Allergan and record collaboration expense or collaborative arrangements revenue, as applicable. From time to time, in accordance with the terms of the collaboration with Allergan for North America, the Company engages an independent certified public accounting firm to review the accuracy of the financial reporting from Allergan to the Company. In connection with such a review during the three months ended September 30, 2018, Allergan reported to the Company an approximately $59.3 million negative adjustment to LINZESS net sales. Such adjustment related to the cumulative difference between certain previously estimated LINZESS gross-to-net sales reserves and allowances made by Allergan during the years ended December 31, 2015, 2016 and 2017, and subsequent actual payments made. This adjustment was primarily associated with estimated governmental and contractual rebates, as reported by Allergan. Accordingly, upon receiving this information from Allergan, the Company recorded a change in accounting estimate to reduce collaborative arrangements revenue by approximately $29.7 million during the three months ended September 30, 2018 related to the Company’s share of this adjustment. The Company recognized collaborative arrangements revenue from the Allergan collaboration agreement for North America during the three and nine months ended September 30, 2019 and 2018 as follows (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Collaborative arrangements revenue related to sales of LINZESS in the U.S. $ 84,565 $ 52,261 $ 223,831 $ 182,675 Royalty revenue 542 463 1,559 1,458 Total collaborative arrangements revenue $ 85,107 $ 52,724 $ 225,390 $ 184,133 The collaborative arrangements revenue recognized in the three and nine months ended September 30, 2019 and 2018 primarily represents the Company’s share of the net profits and net losses on the sale of LINZESS in the U.S. The following table presents the amounts recorded by the Company for commercial efforts related to LINZESS in the U.S. in the three and nine months ended September 30, 2019 and 2018 (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Collaborative arrangements revenue related to sales of LINZESS in the U.S. (1)(2) $ 84,565 $ 52,261 $ 223,831 $ 182,675 Selling, general and administrative costs incurred by the Company (1) (9,129) (10,915) (29,764) (33,556) The Company’s share of net profit $ 75,436 $ 41,346 $ 194,067 $ 149,119 (1) Includes only collaborative arrangement revenue or selling, general and administrative costs attributable to the cost-sharing arrangement with Allergan for the three and nine months ended September 30, 2019 and 2018. In May 2014, CONSTELLA became commercially available in Canada and in June 2014, LINZESS became commercially available in Mexico. The Company records royalties on sales of CONSTELLA in Canada and LINZESS in Mexico in the period earned. The Company recognized approximately $0.5 million and approximately $1.6 million of combined royalty revenues from Canada and Mexico during the three and nine months ended September 30, 2019, respectively. The Company recognized approximately $0.5 million and approximately $1.5 million of combined royalty revenues from Canada and Mexico during the three and nine months ended September 30, 2018, respectively. License Agreement with Allergan (All countries other than the countries and territories of North America, China, including Hong Kong and Macau, and Japan) In April 2009, the Company entered into a license agreement with Almirall, S.A. (“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 (the “European License Agreement”). In accordance with the European License Agreement, the Company granted Almirall a right to access its U.S. Phase III clinical trial data for the purposes of supporting European regulatory approval. Additionally, the Company was required to participate on a joint development committee during linaclotide’s development period and is required to participate in a joint commercialization committee while linaclotide is commercially available. In October 2015, Almirall transferred its exclusive license to develop and commercialize linaclotide in Europe to Allergan. Additionally, in October 2015, the Company and Allergan separately entered into an amendment to the European License Agreement relating to the development and commercialization of linaclotide in Europe. Pursuant to the terms of the amendment, (i) certain sales-based milestones payable to the Company under the European License Agreement were modified to increase the total milestone payments such that, when aggregated with certain commercial launch milestones, they could total up to $42.5 million, (ii) the royalties payable to the Company during the term of the European License Agreement were modified such that the royalties based on sales volume in Europe begin in the mid-single digit percent and escalate to the upper-teens percent by calendar year 2019, and (iii) Allergan assumed responsibility for the manufacturing of linaclotide API for Europe from the Company, as well as the associated costs. The Company concluded that the 2015 amendment to the European License Agreement was not a modification to the linaclotide collaboration agreement with Allergan for North America. In January 2017, concurrently with entering into the commercial agreement as described below in Commercial Agreement with Allergan Prior to the adoption of ASC 606, the Company concluded that the 2017 Amendment was a material modification to the European License Agreement; however, this modification did not have a material impact on the Company's condensed consolidated financial statements as there was no deferred revenue associated with the European License Agreement. The Company also concluded that the 2017 Amendment was not a material modification to the linaclotide collaboration agreement with Allergan for North America. In evaluating the terms of the 2009 European License Agreement under ASC 606, the Company determined that there are no remaining performance obligations as of September 2012. However, the Company continues to be eligible to receive consideration in the form of commercial launch milestones, sales-based milestones, and royalties. The commercial launch milestones, sales-based milestones and royalties under the European License Agreement have historically been recognized as revenue as earned. Under ASC 606, the Company applied the sales-based royalty exception to royalties and sales-based milestones, as these payments relate predominantly to the license granted to Allergan (formerly Almirall). Accordingly, the royalties and sales-based milestones are recorded as revenue in the period earned. The Company records royalties on sales of CONSTELLA in Europe in the period earned based on royalty reports from its partner, if available, or the projected sales and historical trends. The commercial launch milestones are recognized as revenue when it is probable that a significant reversal of revenue would not occur and the associated constraint has been lifted. Additionally, the Company evaluated the terms of the 2017 Amendment under ASC 606 and determined that it would be treated as a separate contract given that it adds a distinct good or service at an amount that reflects standalone selling price. The Company determined that all performance obligations in the 2017 Amendment were satisfied in January 2017 when the license for the additional territory was transferred. The Company continues to receive royalties under this agreement, which are recorded in the period earned pursuant to the sales-based royalty exception, as they related predominantly to the license granted to Allergan. The Company recognized approximately $0.5 million and approximately $1.2 million of royalty revenue from the European License Agreement during the three and nine months ended September 30, 2019, respectively, and recognized approximately $0.2 million and approximately $0.8 million during the three and nine months ended September 30, 2018, respectively. License Agreement for Japan with Astellas In November 2009, the Company entered into a license agreement with Astellas, as amended, to develop and commercialize linaclotide for the treatment of IBS-C, CIC and other GI conditions in Japan (the “2009 License Agreement with Astellas”). Astellas is responsible for all activities relating to development, regulatory approval and commercialization in Japan as well as funding the associated costs and the Company is required to participate on a joint development committee over linaclotide’s development period. During the year ended December 31, 2017, the Company and Astellas entered into a commercial API supply agreement (the “Astellas Commercial Supply Agreement”). Pursuant to the Astellas Commercial Supply Agreement, the Company sells linaclotide API supply to Astellas at a contractually defined rate and recognizes related revenue as sale of API. Under the 2009 License Agreement with Astellas, the Company received royalties which escalated based on sales volume, beginning in the low-twenties percent, less the transfer price paid for the API included in the product sold and other contractual deductions. Under the 2009 License Agreement with Astellas, the Company received an up-front licensing fee of $30.0 million and three development milestone payments that totaled up to $45.0 million, which were recognized as revenue prior to the adoption of ASC 606 on January 1, 2018. The Company had evaluated the terms of the 2009 License Agreement with Astellas under ASC 606 and determined that there were no remaining performance obligations as of the adoption of ASC 606. Additionally, under the terms of the Astellas Commercial Supply Agreement, the Company determined it had an ongoing performance obligation to supply API. Upon adoption of ASC 606, product revenue is recognized when the customer obtains control of the Company’s product, which occurs at a point in time, typically upon shipment of the product to the customer. This results in earlier revenue recognition than the Company’s historical accounting. On August 1, 2019, the Company and Astellas amended and restated the 2009 License Agreement with Astellas (the “Amended Astellas License Agreement”). This amendment is considered a modification to the 2009 License Agreement with Astellas and is accounted for as a new and separate contract. Under the terms of this Amended Astellas License Agreement, the Company will no longer be responsible for the supply of linaclotide API to Astellas, and Astellas will be responsible for its own supply of linaclotide API for sale in Japan, beginning in 2020. Astellas has committed to purchase certain quantities of linaclotide API from the Company in 2019. In connection with the execution of the Amended Astellas License Agreement, Astellas paid the Company a non-refundable upfront payment of $10.0 million in August 2019. Further, beginning in 2020, Astellas will, in lieu of the royalty payment terms set forth in the 2009 License Agreement with Astellas, pay royalties to the Company at rates beginning in the mid-single digit percent and escalating to low-double-digit percent, based on aggregate annual net sales in Japan of products containing linaclotide API. These royalty payments will be subject to reduction following the expiration of certain licensed patents and the occurrence of generic competition in Japan. The Company will continue to supply linaclotide API for Japan during 2019 at a contractually defined rate. Additionally, Astellas will reimburse the Company for the Company’s performance of adverse event reporting services at a fixed monthly rate until such services are terminated. ● delivery of the expanded license of intellectual property, including the applicable manufacturing know-how, ● obligation to supply linaclotide API for 2019, and ● adverse event reporting services. The Company allocated the $10.0 million upfront payment to the delivery of the expanded license of intellectual property and recognized it as collaborative arrangements revenue at contract inception. The Company allocated the approximately $20.4 million in remaining purchase orders for API to the obligation to supply linaclotide API to Astellas for 2019. Consideration for the supply of linaclotide API will be recognized over the performance period using an output method as linaclotide API is shipped to Astellas. Consideration allocated to the adverse event reporting services will be recognized as such services are provided over the performance period using an output method based on the amount to which the Company has a right to invoice. Royalties on sales of LINZESS in Japan relate predominantly to the license granted to Astellas. Accordingly, the Company applies the sales-based royalty exception and records royalties on sales of LINZESS in Japan in the period earned based on royalty reports from its partner, if available, or the projected sales and historical trends. The Company recognized $10.0 million in collaborative arrangements revenue during the three and nine months ended September 30, 2019 related to the upfront fee associated with the execution of the Amended Astellas License Agreement. The Company recognized no revenue and approximately $27.5 million from the sale of API to Astellas under the Amended License Agreement, the 2009 License Agreement with Astellas and the Astellas Commercial Supply Agreement during the three and nine months ended September 30, 2019, respectively, and recognized approximately $9.5 million and approximately $23.7 million during the three and nine months ended September 30, 2018, respectively. The royalties on sales of LINZESS in Japan did not exceed the transfer price of API sold and other contractual deductions during each of the periods presented. Collaboration Agreement for China (including Hong Kong and Macau) with AstraZeneca In October 2012, the Company entered into a collaboration agreement with AstraZeneca to co-develop and co-commercialize linaclotide in the AstraZeneca License Territory (the “AstraZeneca Collaboration Agreement”). The collaboration provided AstraZeneca with an exclusive nontransferable license to exploit the underlying technology in the AstraZeneca License Territory. The parties shared 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. In September 2019, the Company and AstraZeneca entered into an amendment and restatement of the AstraZeneca Collaboration Agreement (the “Amended AstraZeneca Agreement”), under which AstraZeneca obtained the exclusive right to develop, manufacture and commercialize products containing linaclotide in the AstraZeneca License Territory (the “AstraZeneca License”). Prior to the execution of the Amended AstraZeneca Agreement, the Company identified the following performance obligations under the AstraZeneca Collaboration Agreement: ● research, development and regulatory services pursuant to the development plan (“R&D Services”), ● Joint Development Committee (“JDC”) services, ● obligation to supply clinical trial material, and ● Joint Commercialization Committee (“JCC”) services. Under the AstraZeneca Collaboration Agreement, the Company shared development costs with AstraZeneca, with AstraZeneca incurring During the three and nine months ended September 30, 2019, the Company incurred no costs and offset an insignificant amount of costs related to R&D Services and JDC Services, respectively, under the AstraZeneca Collaboration Agreement. During the three and nine months ended September 30, 2018, the Company offset an insignificant amount of costs and approximately $0.8 million, respectively, related to R&D Services and JDC Services. During the three and nine months ended September 30, 2019, the Company recognized an insignificant amount of revenue related to sale of linaclotide drug product and API under the AstraZeneca Collaboration Agreement. The Company recorded no revenue related to sale of linaclotide drug product and API during each of the three and nine months ended September 30, 2018. Additionally, the Company incurred approximately $0.7 million and approximately $1.2 million in costs related to pre-launch commercial services and supply chain services during the three and nine months ended September 30, 2019, respectively. Under the Amended AstraZeneca Agreement, the Company will receive non-contingent payments totaling $35.0 million in three installments through 2024. In addition, AstraZeneca may be required to make milestone payments totaling up to The Company evaluated the Amended AstraZeneca Agreement in accordance with ASC 606 and determined that it would be treated as a separate contract because it adds a distinct good or service at an amount that reflects standalone selling price. The following performance obligations under the Amended AstraZeneca Agreement were identified: ● delivery of the AstraZeneca License, ● AstraZeneca TSA services, and ● supply of linaclotide API, drug product and finished goods under the AstraZeneca CSA. The Company determined that the non-contingent payments should be allocated to the delivery of the AstraZeneca License. The non-contingent payments totaling $35.0 million will be paid in installments through 2024. The Company determined that the performance obligation related to the transfer of the AstraZeneca License was satisfied as of the execution date of the Amended AstraZeneca Agreement. As a portion of the payments relating to the transfer of the AstraZeneca License are due significantly after the performance obligation was satisfied, the Company adjusted its transaction price for the significant financing component of approximately $2.6 million. Accordingly, the Company recognized approximately $32.4 million relating to the delivery of the AstraZeneca license as collaborative arrangements revenue during the three months ended September 30, 2019 and will recognize the approximately $2.6 million relating to the significant financing component as interest income through 2024. Consideration allocated to the AstraZeneca TSA services will be recognized as collaborative arrangements revenue as such services are provided over the performance period using an output method based on the amount to which the Company has a right to invoice. Consideration for the supply of linaclotide API, drug product and finished goods under the AstraZeneca CSA will be recognized over the performance period using an output method as linaclotide API, drug product and finished goods are shipped to AstraZeneca. During each of the three and nine months ended September 30, 2019, the Company recognized approximately $32.4 million in collaborative arrangements revenue related to the Amended AstraZeneca License, of which approximately $32.4 million related to the delivery of the AstraZeneca License and an insignificant amount related to the AstraZeneca TSA services. During each of the three and nine months ended September 30, 2019, the Company recognized approximately $0.6 million of sale of API on its condensed consolidated statement of operations, relating to the supply of linaclotide drug product and finished goods under the AstraZeneca CSA. Co-Promotion and Other Agreements Co-Promotion Agreements with Allergan In January 2017, concurrently with entering into the amendment to the European License Agreement, the Company and Allergan entered into an agreement under which the adjustments to the Company’s or Allergan’s share of the net profits under the share adjustment provision of the collaboration agreement for linaclotide in North America relating to the contractually required calls on physicians in each year were eliminated, in full, in 2018 and all subsequent years (the “Commercial Agreement”). Pursuant to the Commercial Agreement, Allergan appointed the Company, on a non-exclusive basis, to promote CANASA, approved for the treatment of ulcerative proctitis in the U.S. for approximately two years through February 2019. Under the terms of the Commercial Agreement, the Company was obligated to perform third position sales details and offer samples of such products to gastroenterology prescribers who were on the then-current call panel for LINZESS to which the Company was providing first or second position details. On a product-by-product basis, Allergan paid the Company a royalty in the mid-teens on incremental sales of CANASA above a mutually agreed upon sales baseline. The Company discontinued its promotion of CANASA on December 31, 2018. Upon adoption of ASC 606, the Company evaluated the commercial agreement and the amendment to the European License Agreement under the contract combination and contract modification guidance in ASC 606. The Company determined that the agreements should be accounted for as separate contracts because each agreement adds distinct goods or services at an amount that reflects standalone selling price. The Company concluded that the CANASA sales detailing deliverable under ASC 605 was also considered a performance obligation in accordance with ASC 606. Accordingly, the Company recorded royalties on sales of CANASA and any estimated detailing shortfall penalty over the period of performance for the sales details; collaborative arrangements revenue was recognized when it was probable that a significant reversal of revenue would not occur and the associated constraint has been lifted. The Company estimated sales detailing royalties based on royalty reports from its partner, if available, or the projected sales and historical trends. At the inception of the arrangement, the consideration associated with the agreement comprised of royalties and a sales detailing shortfall penalty are fully constrained. During each of the three and nine months ended September 30, 2018, the Company did not recognize royalty revenue related to the Commercial Agreement with Allergan for sales of CANASA. In December 2017, the Company and Allergan entered into an amendment to the commercial agreement with Allergan (the “VIBERZI Amendment”), as described below, to include the VIBERZI promotional activities through December 31, 2018. Under the terms of the VIBERZI Amendment, the Company’s clinical sales specialists detailed VIBERZI in the second position to the same health care practitioners to whom they detailed LINZESS in the first position and provided certain medical education services. The Company had the potential to achieve a milestone payment of up to $7.5 million based on the net sales of VIBERZI during 2018 and was compensated approximately $3.0 million over the term of the agreement for its medical education initiatives. The Company evaluated the VIBERZI Amendment in accordance with ASC 606 and determined that it would be treated as a separate contract because it adds a distinct good or service at an amount that reflects standalone selling price. The following performance obligations under the VIBERZI Amendment were identified: ● sales detailing of VIBERZI in either first or second position, and ● medical education services. The sales-based milestone payment was recognized as collaborative arrangements revenue when it was probable that a significant reversal of revenue would not occur and the associated constraint had been lifted. During the three months ended December 31, 2018, the Company determined the sales-based milestone payment was no longer constrained and recognized approximately $1.3 million in collaborative arrangements revenue. The consideration related to medical education events of approximately $3.0 million was recognized over the period of performance that medical education services are provided. During the three and nine months ended September 30, 2018, the Company recognized approximately $0.8 million and approximately $2.3 million of collaborative arrangements revenue, respectively, related to VIBERZI medical education services. In December 2018 and in March 2019, the Company extended the VIBERZI Amendment through April 2019. In April 2019, the Company entered into a new agreement with Allergan to perform sales detailing activities for VIBERZI, effective April 1, 2019 through December 31, 2019 (the “VIBERZI Promotion Agreement”). Under the terms of the VIBERZI Promotion Agreement, the Company’s clinical sales specialists will continue detailing VIBERZI in the second position to the same health care practitioners to whom they detail LINZESS in the first position. The Company has the potential to achieve a milestone payment of up to approximately $4.2 million based on the number of VIBERZI prescription extended units filled over the term of the agreement. The Company will be compensated based on the number of VIBERZI sales details performed, up to a maximum amount of approximately $4.1 million over the term of the agreement. In accordance with ASC 606, the VIBERZI Promotion Agreement will be accounted for as a separate contract as it contains distinct |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2019 | |
Disclosure Text Block | |
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 September 30, 2019 and December 31, 2018 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 for similar instruments in active markets, 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 may include 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 are 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 Company validates the prices provided by its third-party pricing services by obtaining market values from other pricing sources and analyzing pricing data in certain instances. The Company also invests in certain reverse repurchase agreements which are collateralized by deposits in the form of Government Securities and Obligations for an amount not less than 102% of their principal amount. The Company does not record an asset or liability for the collateral as the Company is not permitted to sell or re-pledge the collateral. The collateral has at least the prevailing credit rating of U.S. Government Treasuries and Agencies. The Company utilizes a third-party custodian to manage the exchange of funds and ensure the collateral received is maintained at 102% of the reverse repurchase agreements principal amount on a daily basis. The following tables present the assets and liabilities the Company has measured at fair value on a recurring basis (in thousands): Fair Value Measurements at Reporting Date Using Quoted Prices in Significant Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs September 30, 2019 (Level 1) (Level 2) (Level 3) Assets: Cash and cash equivalents: Money market funds $ 101,207 $ 101,207 $ — $ — Repurchase agreements 37,800 37,800 — — Convertible Note Hedges 11,357 — — 11,357 Total assets measured at fair value $ 150,364 $ 139,007 $ — $ 11,357 Liabilities: Note Hedge Warrants $ 8,768 $ — $ — $ 8,768 Total liabilities measured at fair value $ 8,768 $ — $ — $ 8,768 Fair Value Measurements at Reporting Date Using Quoted Prices in Significant Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs December 31, 2018 (Level 1) (Level 2) (Level 3) Assets: Cash and cash equivalents: Money market funds $ 142,218 $ 142,218 $ — $ — Repurchase agreements 30,875 30,875 — — Convertible Note Hedges 41,020 — — 41,020 Total assets measured at fair value $ 214,113 $ 173,093 $ — $ 41,020 Liabilities: Note Hedge Warrants $ 33,763 $ — $ — $ 33,763 Contingent Consideration 51 — — 51 Total liabilities measured at fair value $ 33,814 $ — $ — $ 33,814 There were no transfers between fair value measurement levels during each of the three and nine months ended September 30, 2019 or 2018. Cash equivalents, accounts receivable, related party accounts receivable, prepaid expenses and other current assets, accounts payable, related party accounts payable, accrued expenses and other current liabilities, the current portion of capital lease obligations, deferred rent, deferred revenue and operating lease obligations at September 30, 2019 and December 31, 2018 are carried at amounts that approximate fair value due to their short-term maturities. Convertible Note Hedges and Note Hedge Warrants The Company’s Convertible Note Hedges and the Note Hedge Warrants are recorded as derivative assets and liabilities, and are classified as Level 3 under the fair value hierarchy. These derivatives are not actively traded and are valued using the Black-Scholes option-pricing model which requires the use of subjective assumptions. Significant inputs used to determine the fair value as of September 30, 2019 included the price per share of the Company’s Class A common stock, time to maturity of the derivative instruments, strike prices of the derivative instruments, risk-free interest rate, expected volatility of the Company’s Class A common stock, and expected dividend yield. Changes to these inputs could materially affect the valuation of the Convertible Note Hedges and Note Hedge Warrants. In April 2019, the Company announced an adjustment to the conversion rate applicable to the 2022 Convertible Notes, effective April 15, 2019 (Note 9). In August 2019, the Company repurchased $215.0 million aggregate principal amount of the 2022 Convertible Notes, which triggered a partial termination of the outstanding Convertible Note Hedges and Note Hedge Warrants. During the three and nine months ended September 30, 2019, the Company recorded a loss of approximately $4.8 million and approximately $1.5 million on derivatives, respectively, as a result of the partial termination of the Convertible Note Hedges and Note Hedge Warrants and the change in fair value of the remaining Convertible Note Hedges and Note Hedge Warrants during the quarter (Note 9). The following inputs were used in the fair market valuation of the Convertible Note Hedges and Note Hedge Warrants as of September 30, 2019 and December 31, 2018: Nine Months Ended Year Ended September 30, December 31, 2019 2018 Convertible Note Hedge Convertible Note Hedge Note Hedges Warrants Note Hedges Warrants Risk-free interest rate (1) 1.6 % 1.6 % 2.5 % 2.5 % Time to maturity 2.7 3.3 3.5 4.1 Stock price (2) $ 8.59 $ 8.59 $ 10.36 $ 10.36 Strike price (3) $ 14.51 $ 18.82 $ 16.58 $ 21.50 Common stock volatility (4) 47.8 % 46.5 % 43.8 % 43.6 % Dividend yield — % — % — % — % (1) Based on U.S. Treasury yield curve, with terms commensurate with the terms of the Convertible Note Hedges and the Note Hedge Warrants. (2) The closing price of the Company’s Class A common stock on the last trading day of the quarter ended September 30, 2019 and December 31, 2018, respectively. (3) As per the respective agreements for the Convertible Note Hedges and Note Hedge Warrants. The strike prices for the Convertible Note Hedges and Note Hedge Warrants were adjusted in conjunction with the conversion rate adjustment in April 2019 (Note 9). (4) Expected volatility based on historical volatility of the Company’s Class A common stock. (5) 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 Convertible Note Hedges and the Note Hedge Warrants are recorded at fair value at each reporting period and changes in fair value are recorded in other expense, net within the Company’s condensed consolidated statements of operations. Gains and losses for these derivative financial instruments are presented separately in the Company’s condensed consolidated statements of cash flows. The following table reflects the change in the Company’s Level 3 Convertible Note Hedges and Note Hedge Warrants from December 31, 2018 through September 30, 2019 (in thousands): Convertible Note Hedge Note Hedges Warrants Balance at December 31, 2018 $ 41,020 $ (33,763) Cash settlement (received) paid upon early termination of derivatives (28,909) 25,735 Change in fair value, recorded as a component of gain (loss) on derivatives (754) (740) Balance at September 30, 2019 $ 11,357 $ (8,768) Convertible Senior Notes In June 2015, the Company issued approximately $335.7 million aggregate principal amount of its 2022 Convertible Notes. In August 2019, the Company repurchased $215.0 million aggregate principal amount of its 2022 Convertible Notes. Additionally, in August 2019, the Company issued $200.0 million aggregate principal amount of its 2024 Convertible Notes and $200.0 million aggregate principal amount of its 2026 Convertible Notes. The Company separately accounted for the liability and equity components of each of the 2022 Convertible Notes, 2024 Convertible Notes, and 2026 Convertible Notes, and together the Convertible Senior Notes, by allocating the proceeds between the liability component and equity component (Note 9). The fair value of the respective Convertible Senior Notes, which differs from their carrying value, is influenced by interest rates, the price of the Company’s Class A common stock and the volatility thereof, and the prices for the respective Convertible Senior Notes observed in market trading, which are Level 2 inputs. The estimated fair value of the 2022 Convertible Notes was approximately $120.0 million and approximately $315.0 million as of September 30, 2019 and December 31, 2018, respectively. The estimated fair value of the 2024 Convertible Notes was approximately $185.9 million as of September 30, 2019. The estimated fair value of the 2026 Convertible Notes was approximately $183.6 million as of September 30, 2019. Capped Calls 8.375% Notes Due 2026 In September 2016, the Company closed a direct private placement pursuant to which the Company issued $150.0 million in aggregate principal amount of the 2026 Notes in January 2017. The outstanding principal balance of the 2026 Notes was redeemed in September 2019 (Note 9). The estimated fair value of the 2026 Notes was approximately $148.2 million as of December 31, 2018. This valuation was calculated using a discounted cash flow estimate of expected interest and principal payments and was determined using Level 3 inputs, including significant estimates related to expected LINZESS sales and a discount rate equivalent to market participant interest rates. Nonrecurring fair value measurements – Intangible Assets performed utilized the revised projected revenue and net cash flows assumed through the termination of the lesinurad license agreement, resulting in an impairment of the full carrying value of the intangible assets. |
Inventory
Inventory | 9 Months Ended |
Sep. 30, 2019 | |
Disclosure Text Block | |
Inventory | 6. Inventory Inventory consisted of the following (in thousands): September 30, 2019 December 31, 2018 Raw Materials $ 1,134 $ — Work in Progress 707 — Finished Goods 457 $ 2,298 $ — The Company’s inventory represents linaclotide API, drug product, and finished goods. 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, inventory that fails to meet commercial sale specifications or is otherwise impaired is written down with a corresponding charge to the statement of operations in the period that the impairment is first identified. No impairment of inventory was recorded during the three and nine months ended September 30, 2019. The Company wrote down approximately $0.6 million and approximately $2.5 million related to lesinurad inventory and commercial supply purchase commitments during the three and nine months ended September 30, 2018, respectively, as a result of revised demand forecasts and the termination of the Lesinurad License. The adjustment was recorded as write-down of commercial supply to net realizable value and (settlement) loss on non-cancelable purchase commitments. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 9 Months Ended |
Sep. 30, 2019 | |
Disclosure Text Block | |
Accrued Expenses and Other Current Liabilities | 7. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following (in thousands): p September 30, 2019 December 31, 2018 Salaries $ 1,703 $ 3,054 Accrued vacation 2,647 3,493 Accrued incentive compensation 8,647 13,867 Other employee benefits 1,340 1,883 Professional fees 5,177 1,735 Accrued interest 1,392 873 Restructuring accruals 432 2,885 Other 9,191 10,211 $ 30,529 $ 38,001 As of September 30, 2019, other accrued expenses of approximately $9.2 million included approximately $4.0 million related to activities associated with the Company’s move to the Summer Street Property, approximately $1.2 million related to unbilled inventory, and approximately $0.7 million related to contracted services for strategy-related GI research. During the three months ended September 30, 2019, the Company relieved approximately $4.0 million of previously accrued non-cancelable purchase commitments recorded as accrued expenses related to excess non-cancelable Lesinurad Products commercial supply and sample purchase commitments, as well as certain excess non-cancelable linaclotide purchase commitments. In addition, during the three months ended September 30, 2019, the Company also relieved approximately $2.5 million of previously accrued non-cancelable purchase commitments recorded as other liabilities related to the assignment of certain linaclotide excess non-cancelable purchase commitments to AstraZeneca in connection with the Amended AstraZeneca Collaboration Agreement. Accordingly, the Company recorded a settlement of approximately $3.5 million as write-down of commercial supply to net realizable value and (settlement) loss on non-cancelable purchase commitments related to certain of the aforementioned reversals. During the three months ended September 30, 2018, the Company assigned to Allergan certain linaclotide excess non-cancelable purchase commitments that the Company had previously accrued for. Accordingly, the Company relieved the previous accrual of approximately $2.5 million, which was recorded as write-down of commercial supply to net realizable value and (settlement) loss on non-cancelable purchase commitments. As of December 31, 2018, other accrued expenses of approximately $10.2 million included approximately $2.5 million related to linaclotide excess purchase commitments, and approximately $1.4 million related to excess non-cancelable Lesinurad Products commercial supply and sample purchase commitments. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2019 | |
Disclosure Text Block | |
Leases | 8. Leases Effective January 1, 2019, the Company adopted ASC 842 using the optional transition method. The Company’s lease portfolio for the nine months ended September 30, 2019 includes: leases for its prior and current headquarters locations, a data center colocation lease, vehicle leases for its salesforce representatives, and leases for computer and office equipment. Lease cost is recognized on a straight-line basis over the lease term. The components of lease cost for the three and nine months ended September 30, 2019 are as follows (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2019 2019 Operating lease cost during period, net (1) $ 6,244 13,924 Variable lease payments 654 1,308 Short-term lease cost 375 1,143 Total lease cost $ 7,273 16,375 (1) Operating lease cost is presented net of approximately $0.3 million of sublease income for the nine months ended September 30, 2019. Sublease income relates to a sublease agreement between Ironwood and Cyclerion executed upon Separation. The sublease agreement terminated in May 2019. Supplemental cash flow information related to leases for the periods reported is as follows: Nine Months Ended September 30, 2019 Right-of-use assets obtained in exchange for new operating lease upon adoption of ASC 842 (in thousands) $ 88,299 Adjustment to right-of-use assets as a result of the lease modification at the Separation date (in thousands) (40,427) Adjustment to right-of-use assets as a result of the termination of the Binney Street Lease (in thousands) (34,440) Right-of-use assets obtained in exchange for new operating lease liabilities (1) 18,452 Cash paid for amounts included in the measurement of lease liabilities (in thousands) 8,869 Weighted-average remaining lease term of operating leases (in years) 8.0 Weighted-average discount rate of operating leases 5.4 % (1) Relates to right-of-use assets and operating lease liabilities for the Summer Street Lease. Future minimum lease payments under non-cancelable operating leases under ASC 842 as of September 30, 2019 are as follows (in thousands): Operating Lease Payments 2019 (1) $ 9,729 2020 1,146 2021 3,128 2022 3,129 2023 3,065 2024 and thereafter 21,170 Total future minimum lease payments 41,367 Less: present value adjustment 8,773 Operating lease liabilities at September 30, 2019 32,594 Less: current portion of operating lease liabilities 9,934 Operating lease liabilities, net of current portion $ 22,660 (1) Amounts are for the three months ending December 31, 2019. At December 31, 2018, future minimum lease payments under non-cancelable leases under ASC 840 were as follows (in thousands): Operating Lease Payments 2019 $ 18,736 2020 18,312 2021 18,863 2022 19,365 2023 19,818 2024 and thereafter 22,118 Total future minimum lease payments $ 117,212 Summer Street Lease (current headquarters) On June 11, 2019, the Company entered into the Summer Street Lease, a non-cancelable operating lease with MA-100 Summer Street Owner, L.L.C. (the “Summer Street Landlord”) for the Summer Street Property. The Summer Street Property began serving as the Company’s headquarters beginning in October 2019, replacing its prior headquarters at 301 Binney Street in Cambridge, Massachusetts. The Summer Street Lease terminates on June 11, 2030 and includes an option to extend the term of the lease for an additional five years at a market base rental rate, a 2% annual rent escalation, free rent periods, and a tenant improvement allowance. The rent expense for the Summer Street Property, inclusive of the escalating rent payments and lease incentives, is recognized on a straight-line basis over the lease term. Additionally, the Summer Street Lease requires a letter of credit to secure the Company’s obligations under the lease agreement of approximately $1.0 million, which is collateralized by a money market account recorded as restricted cash on the Company’s condensed consolidated balance sheets as of September 30, 2019. At lease inception, the Company recorded a right-of-use asset and a lease liability associated with the Summer Street Lease using an incremental borrowing rate of approximately 5.8%. At September 30, 2019, the balance of the right-of-use asset for the Summer Street Lease was approximately $18.0 million. At September 30, 2019, the balance of the lease liability for the Summer Street Lease was approximately $22.5 million. The Company recorded an asset retirement obligation in connection with the estimated future costs related to the removal of certain leasehold improvements at the Summer Street Property upon termination of the lease. The balance of the Company’s asset retirement obligation for the Summer Street Lease was approximately $0.5 million as of September 30, 2019. Lease cost related to the Summer Street Lease recorded during the three and nine months ended September 30, 2019 was approximately $0.6 million and $0.8 million, respectively. Binney Street Lease (prior headquarters) The Company rented office space at 301 Binney Street, Cambridge, Massachusetts (“Binney Street Property”) under a non-cancelable operating lease, entered into in January 2007, as amended (“Binney Street Lease”) through October 2019. The Binney Street Property previously served as the Company’s headquarters but was replaced by the Summer Street Property in October 2019, as discussed above. Prior to the modifications discussed below, the term of the Binney Street Lease was through January 31, 2025 for approximately 223,000 square feet of laboratory and office space. The Binney Street Lease included an option to extend the term of the lease for an additional five years at a market base rental rate, a 3% annual rent escalation, free rent periods, a tenant improvement allowance, and an option to extend the term of the lease for an additional five years at a market base rental rate. The rent expense for the Binney Street Lease, inclusive of the escalating rent payments, lease incentives and free rent periods, was to be recognized on a straight-line basis over the lease term through January 2025. Additionally, the Binney Street Lease required a letter of credit to secure the Company’s obligations under the lease agreement of approximately $6.4 million, which is recorded as restricted cash. As of January 1, 2019, in conjunction with the adoption of ASC 842, the Company recorded a right-of-use asset of approximately $87.7 million and a lease liability of approximately $94.3 million associated with the Binney Street Lease. On April 1, 2019, the Company modified its lease with BMR-Rogers Street LLC (“Binney Street Landlord”), to reduce its leased premises to approximately 108,000 rentable square feet of office space on the first and third floors. The surrendered portion of approximately 114,000 rentable square feet on the first and second floor of the building is now occupied by Cyclerion under a direct lease between Cyclerion and the Binney Street Landlord. As a result of the modification, the Company adjusted the value of its right-of-use asset and operating lease liability using an incremental borrowing rate of approximately 5.1% in accordance with ASC 842, and recognized a gain of approximately $3.2 million, recorded as operating expenses on its condensed consolidated statement of operations. The Company elected to determine the proportionate reduction in the right-of-use asset based on the reduction to the lease liability and will apply that methodology consistently to all comparable modifications that decrease the scope of the lease. On June 11, 2019, the Company entered into a lease termination agreement (the “Lease Termination”) with the Binney Street Landlord to terminate the Company’s existing lease for approximately 108,000 square feet of office space. The Lease Termination was effective during the fourth quarter of 2019 in exchange for an approximately $9.0 million payment to the Binney Street Landlord. The Company determined that the Lease Termination would be accounted for as a lease modification that reduces the term of the existing lease. As a result of this modification, the Company adjusted the value of its right-of-use asset and operating lease liability using an incremental borrowing rate of approximately 4.0%. At September 30, 2019, the balances of the right-of-use asset and lease liability for the Binney Street Lease were approximately $1.8 million and approximately $9.7 million, respectively. Lease cost related to the Binney Street Lease recorded during the three months ended September 30, 2019 was approximately $6.2 million. Lease cost related to the Binney Street Lease recorded during the nine months ended September 30, 2019 was approximately $14.3 million, net of sublease income of approximately $0.3 million. Under ASC 840, rent expense related to the Binney Street Lease recorded during the three and nine months ended September 30, 2018 was approximately $2.5 million and $7.6 million, respectively. Data center colocation lease The Company rents space for its data center at a colocation in Boston, Massachusetts under a non-cancelable operating lease (the “Data Center Lease”). The Data Center Lease contains various provisions, including a 4% annual rent escalation. The rent expense, inclusive of the escalating rent payments, is recognized on a straight-line basis over the lease term through August 2022. The Company recorded a right-of-use asset of approximately $0.6 million, and a lease liability of approximately $0.6 million associated with the Data Center Lease upon adoption of ASC 842. During the three months ended March 31, 2019, the Company migrated its data management process to a cloud-based services system, rendering its current data center technology and assets obsolete. As a result, the Company considered the right-of-use asset associated with the Data Center Lease to be impaired. The Company recorded a charge of approximately $0.5 million to selling, general, and administrative expenses on its condensed consolidated statement of operations as a result of the impairment during the three months ended March 31, 2019. At September 30, 2019, the lease liability associated with the Data Center Lease was approximately $0.5 million, and the right-of-use asset remained fully impaired. The incremental borrowing rate for the outstanding Data Center Lease obligation upon adoption of ASC 842 was approximately 6.0%. Under ASC 842, the lease costs related to the Data Center Lease were insignificant for each of the three and nine months ended September 30, 2019. Under ASC 840, rent expenses related to the Data Center Lease were insignificant for each of the three and nine months ended September 30, 2018. Vehicle fleet leases During April 2018, the Company entered into a master services agreement containing 12-month leases (the “2018 Vehicle Leases”) for certain vehicles within its fleet for its field-based sales force and medical science liaisons. These leases are classified as short-term in accordance with the practical expedient in ASC 842. The 2018 Vehicle Leases expire at varying times beginning in June 2019, with a monthly renewal provision. In accordance with the terms of the 2018 Vehicle Leases, the Company maintains a letter of credit securing its obligation under the lease agreements of $1.3 million, which is collateralized by a money market account recorded as restricted cash. Lease cost related to the 2018 Vehicle Leases was approximately $0.4 million and approximately $1.1 million for the three and nine months ended September 30, 2019, respectively. Lease cost related to the 2018 Vehicle Leases was approximately $0.4 million for each of the three and nine months ended September 30, 2018. Prior to the adoption of ASC 842, during 2018, the Company had certain ongoing vehicle leases for its field-based sales force and medical science liaisons (the “2015 Vehicle Leases”). These leases were classified as capital leases under ASC 840. The 2015 Vehicle Leases expired at varying times through December 2018. In connection with entering into the 2018 Vehicle Leases, all of the 2015 Vehicle Leases were terminated through December 31, 2018. At December 31, 2018, the Company had no remaining capital lease obligations related to the 2015 Vehicle Leases. Other leases Prior to the adoption of ASC 842, the Company entered into leases for certain computer and office equipment that expired in 2018. These leases were classified as capital leases under ASC 840. At December 31, 2018, the Company had approximately $0.2 million in capital lease obligations. At December 31, 2018, the weighted average interest rate on the outstanding capital lease obligations was approximately 3.4%. |
Notes Payable
Notes Payable | 9 Months Ended |
Sep. 30, 2019 | |
Disclosure Text Block | |
Notes Payable | 9. Notes Payable 8.375% Notes due 2026 On September 23, 2016, the Company closed a direct private placement, pursuant to which the Company issued $150.0 million in aggregate principal amount of 8.375% notes due 2026 on January 5, 2017. The Company capitalized approximately $0.5 million of debt issuance costs, which were netted against the carrying value of the 2026 Notes. Proceeds from the issuance of the 2024 Convertible Notes and the 2026 Convertible Notes were used, in part, to redeem the outstanding principal balance of the 2026 Notes in September 2019. The Company retired the 2026 Notes, which had an outstanding aggregate principal balance of approximately $116.5 million, for a redemption price of approximately $123.0 million. The redemption of the 2026 Notes resulted in a loss on extinguishment of debt of approximately $7.6 million related to the prepayment premium and write-off of the remaining 2026 Notes, the unamortized debt issuance costs, and the unamortized debt discount. The 2026 Notes had an annual interest rate of 8.375%, with interest payable March 15, June 15, September 15 and December 15 of each year (each an “8.375% Payment Date”), which began June 15, 2017. Principal of the 2026 Notes was payable on the 8.375% Payment Dates beginning March 15, 2019 through the redemption of the 2026 Notes. From March 15, 2019, the Company made quarterly payments on the 2026 Notes equal to the greater of (i) 7.5% of net sales of linaclotide in the U.S. for the preceding quarter (the “8.375% Synthetic Royalty Amount”) and (ii) accrued and unpaid interest on the 2026 Notes (the “8.375% Required Interest Amount”). Principal on the 2026 Notes was due to be repaid in an amount equal to the 8.375% Synthetic Royalty Amount minus the 8.375% Required Interest Amount, when this is a positive number, until the principal had been paid in full. Convertible Senior Notes 2.25% Convertible Senior Notes due 2022 In June 2015, the Company issued approximately $335.7 million aggregate principal amount of the 2022 Convertible Notes. The Company received net proceeds of approximately $324.0 million from the sale of the 2022 Convertible Notes, after deducting fees and expenses of approximately $11.7 million. The Company used approximately $21.1 million of the net proceeds from the sale of the 2022 Convertible Notes to pay the net cost of the Convertible Note Hedges (after such cost was partially offset by the proceeds to the Company from the sale of the Note Hedge Warrants), as described below. The 2022 Convertible Notes are governed by an indenture (the “2022 Indenture”) between the Company and U.S. Bank National Association, as the trustee. The 2022 Convertible Notes are senior unsecured obligations and bear cash interest at the annual rate of 2.25%, payable on June 15 and December 15 of each year, which began on December 15, 2015. The 2022 Convertible Notes will mature on June 15, 2022, unless earlier converted or repurchased. The Company may settle conversions of the 2022 Convertible Notes through payment or delivery, as the case may be, of cash, shares of Class A common stock of the Company or a combination of cash and shares of Class A common stock, at the Company’s option (subject to, and in accordance with, the settlement provisions of the 2022 Indenture). The initial conversion rate for the 2022 Convertible Notes was 60.3209 shares of Class A common stock (subject to adjustment as provided for in the 2022 Indenture) per $1,000 principal amount of the 2022 Convertible Notes, which was equal to an initial conversion price of approximately $16.58 per share and 20,249,665 shares. In connection with the Separation in April 2019, the conversion rate under the 2022 Indenture was adjusted to equal 68.9172 shares of Ironwood Class A common stock per $1,000 principal amount of the 2022 Convertible Notes, which is equal to an adjusted conversion price of approximately $14.51 per share and 23,135,435 shares. In connection with the issuance of the 2024 Convertible Notes and the 2026 Convertible Notes in August 2019, the Company repurchased $215.0 million aggregate principal amount of the 2022 Convertible Notes. Holders of the 2022 Convertible Notes may convert their 2022 Convertible Notes at their option at any time prior to the close of business on the business day immediately preceding December 15, 2021 in multiples of $1,000 principal amount, only under the following circumstances: ● during any calendar quarter commencing after the calendar quarter ending on September 30, 2015 (and only during such calendar quarter), if the last reported sale price of the Company’s Class A common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price for the 2022 Convertible Notes on each applicable trading day; ● during the five business day period after any five consecutive trading day period (the “measurement period”) in which the “trading price” (as defined in the 2022 Indenture) per $1,000 principal amount of the 2022 Convertible Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s Class A common stock and the conversion rate for the 2022 Convertible Notes on each such trading day; or ● upon the occurrence of specified corporate events described in the 2022 Indenture. On or after December 15, 2021, until the close of business on the second scheduled trading day immediately preceding June 15, 2022, holders may convert their 2022 Convertible Notes, in multiples of $1,000 principal amount, at the option of the holder regardless of the foregoing circumstances. If a make-whole fundamental change, as described in the 2022 Indenture, occurs and a holder elects to convert its 2022 Convertible Notes in connection with such make-whole fundamental change, such holder may be entitled to an increase in the conversion rate as described in the 2022 Indenture. The Company may not redeem the 2022 Convertible Notes prior to the maturity date and no “sinking fund” is provided for by the 2022 Convertible Notes, which means that the Company is not required to periodically redeem or retire the 2022 Convertible Notes. Upon the occurrence of certain fundamental changes involving the Company, holders of the 2022 Convertible Notes may require the Company to repurchase for cash all or part of their 2022 Convertible Notes at a repurchase price equal to 100% of the principal amount of the 2022 Convertible Notes to be repurchased, plus accrued and unpaid interest. The 2022 Indenture does not contain any financial covenants or restrict the Company’s ability to repurchase the Company’s securities, pay dividends or make restricted payments in the event of a transaction that substantially increases the Company’s level of indebtedness. The 2022 Indenture provides for customary events of default. In the case of an event of default with respect to the 2022 Convertible Notes arising from specified events of bankruptcy or insolvency, all outstanding 2022 Convertible Notes will become due and payable immediately without further action or notice. If any other event of default with respect to the 2022 Convertible Notes under the 2022 Indenture occurs or is continuing, the trustee or holders of at least 25% in aggregate principal amount of the then outstanding 2022 Convertible Notes may declare the principal amount of the 2022 Convertible Notes to be immediately due and payable. Notwithstanding the foregoing, the 2022 Indenture provides that, upon the Company’s election, and for up to 180 days, the sole remedy for an event of default relating to certain failures by the Company to comply with certain reporting covenants in the 2022 Indenture consists exclusively of the right to receive additional interest on the 2022 Convertible Notes. In accordance with accounting guidance for debt with conversion and other options, the Company separately accounted for the liability and equity components of the 2022 Convertible Notes by allocating the proceeds between the liability component and the embedded conversion option, or equity component, due to the Company’s ability to settle the 2022 Convertible Notes in cash, its Class A common stock, or a combination of cash and Class A common stock at the option of the Company. The carrying amount of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated convertible feature. The allocation was performed in a manner that reflected the Company’s non-convertible debt borrowing rate for similar debt. The equity component of the 2022 Convertible Notes was recognized as a debt discount and represents the difference between the gross proceeds from the issuance of the 2022 Convertible Notes and the fair value of the liability of the 2022 Convertible Notes on their respective dates of issuance. The excess of the principal amount of the liability component over its carrying amount, or debt discount, is amortized to interest expense using the effective interest method over seven years, or the expected life of the 2022 Convertible Notes. The equity component is not remeasured as long as it continues to meet the conditions for equity classification. In connection with the issuance of the 2024 Convertible Notes and the 2026 Convertible Notes in August 2019, the Company repurchased $215.0 million aggregate principal amount of the 2022 Convertible Notes. The 2022 Convertible Notes were repurchased at a premium totaling approximately $227.3 million. Accordingly, the Company recognized a loss on extinguishment of debt of approximately $23.4 million related to the prepayment premium and proportional write-off of the 2022 Convertible Notes unamortized debt issuance costs and unamortized debt discount. Additionally, the repurchase resulted in a reduction to additional paid-in capital by approximately $27.0 million related to the equity component of the 2022 Convertible Notes. 0.75% Convertible Senior Notes due 2024 and 1.50% Convertible Senior Notes due 2026 In August 2019, the Company issued $200.0 million aggregate principal amount of the 2024 Convertible Notes and $200.0 million aggregate principal amount of the 2026 Convertible Notes. The Company received net proceeds of approximately $391.0 million from the sale of the 2024 Convertible Notes and 2026 Convertible Notes, after deducting fees and expenses of approximately $9.0 million. The Company used approximately $25.2 million of the net proceeds from the sale of the 2024 Convertible Notes and 2026 Convertible Notes to pay the net cost of the Capped Calls, as described below. For purposes of this section, “Notes” refer to the 2024 Convertible Notes and the 2026 Convertible Notes, collectively. ● during any calendar quarter commencing after the calendar quarter ending on December 31, 2019 (and only during such calendar quarter), if the last reported sale price of Class A common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price for the Notes on each applicable trading day; ● during the five business day period after any five consecutive trading day period (the “measurement period”) in which the “trading price” (as defined in each Indenture) per $1,000 principal amount of Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of Class A common stock and the conversion rate for the Notes on each such trading day; or ● upon the occurrence of specified corporate events described in each Indenture. In accordance with accounting guidance for debt with conversion and other options, the Company separately accounted for the liability and equity components of the 2024 Convertible Notes and the 2026 Convertible Notes by allocating the proceeds between the liability components and the embedded conversion options, or equity components, due to the Company’s ability to settle the 2024 Convertible Notes and the 2026 Convertible Notes in cash, its Class A common stock, or a combination of cash and Class A common stock at the option of the Company. The carrying amount of the respective liability components were calculated by measuring the fair value of a similar liability that does not have an associated convertible feature. The allocation was performed in a manner that reflected the Company’s non-convertible debt borrowing rate for similar debt. The respective equity components of the 2024 Convertible Notes and the 2026 Convertible Notes were recognized as a debt discount and represent the difference between the gross proceeds from the issuance of the 2024 Convertible Notes and 2026 Convertible Notes and the fair value of the liability of the 2024 Convertible Notes and 2026 Convertible Notes on their respective dates of issuance. The excess of the principal amount of the liability component over its carrying amount, or debt discount, is amortized to interest expense using the effective interest method over approximately five and seven years, or the expected life of the 2024 Convertible Notes and the 2026 Convertible Notes, respectively. The respective equity components are not remeasured as long as they continue to meet the conditions for equity classification. The Company’s outstanding balances for the Convertible Senior Notes as of September 30, 2019 and December 31, 2018 consisted of the following (in thousands): September 30, 2019 December 31, 2018 Liability component: Principal: 2022 Convertible Notes $ 120,699 $ 335,699 2024 Convertible Notes 200,000 — 2026 Convertible Notes 200,000 — Less: unamortized debt discount (109,685) (65,094) Less: unamortized debt issuance costs (8,339) (5,004) Net carrying amount $ 402,675 $ 265,601 Equity Component: 2022 Convertible Notes $ 19,807 $ 114,199 2024 Convertible Notes 41,152 — 2026 Convertible Notes 51,350 — Total Equity component $ 112,309 $ 114,199 In connection with the issuance of the 2022 Convertible Notes, the Company incurred approximately $11.7 million of debt issuance costs, which primarily consisted of initial purchasers’ discounts and legal and other professional fees. The Company allocated these costs to the liability and equity components based on the allocation of the proceeds. The portion of these costs allocated to the equity components totaling approximately $4.0 million were recorded as a reduction to additional paid-in capital upon issuance. The portion of these costs allocated to the liability components totaling approximately $7.7 million were recorded as a reduction in the carrying value of the debt on the balance sheet and are amortized to interest expense using the effective interest method over the expected life of the 2022 Convertible Notes. In connection with the partial repurchase of the 2022 Convertible Notes, the Company recorded a loss on extinguishment of debt of approximately $23.4 million, of which approximately $2.8 million related to the initial debt issuance costs. The Company determined the expected life of the 2022 Convertible Notes was equal to their seven-year term. The effective interest rate on the liability components of the 2022 Convertible Notes for the period from the date of issuance through June 30, 2019 was 9.34%. From the date of the partial repurchase of the 2022 Convertible Notes in August 2019 through September 30, 2019, the effective interest rate on the liability component of the 2022 Convertible Notes was 9.37%. In connection with the issuance of the 2024 Convertible Notes and the 2026 Convertible Notes, the Company incurred approximately $9.0 million of debt issuance costs, which primarily consisted of initial purchaser’s discounts and legal and other professional fees. The Company allocated these costs to the liability and equity components based on the allocation of the proceeds. The portion of these costs allocated to the equity components totaling approximately $2.1 million were recorded as a reduction to additional paid-in capital. The portion of these costs allocated to the liability components totaling approximately $6.9 million were recorded as a reduction in the carrying value of the debt on the balance sheet and are amortized to interest expense using the effective interest method over the expected life of the 2024 Convertible Notes and the 2026 Convertible Notes. The Company determined the expected life of the 2024 Convertible Notes and the 2026 Convertible Notes was equal to their approximately five and seven-year terms, respectively. The effective interest rates on the liability components of the 2024 Convertible Notes and the 2026 Convertible Notes for the period from the date of issuance through September 30, 2019 was 6.1% and 6.5%, respectively. The following table sets forth total interest expense recognized related to the 2022 Convertible Notes, 2024 Convertible Notes, and 2026 Convertible Notes during the three and nine months ended September 30, 2019 and 2018 (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Contractual interest expense $ 1,780 $ 1,889 $ 5,557 $ 5,665 Amortization of debt issuance costs 301 249 856 712 Amortization of debt discount 4,460 3,900 12,699 11,450 Total interest expense $ 6,541 $ 6,038 $ 19,112 $ 17,827 2019 (1) $ 2,895 2020 7,216 2021 7,216 2022 126,556 2023 4,500 2024 203,750 Thereafter 204,500 Total future minimum payments under the convertible senior notes 556,633 Less: amounts representing interest (35,934) Less: unamortized debt discount (109,685) Less: unamortized debt issuance costs (8,339) Convertible senior notes balance $ 402,675 (1) Amounts are for the three months ending December 31, 2019. Convertible Note Hedge and Note Hedge Warrant Transactions with Respect to 2022 Convertible Notes To minimize the impact of potential dilution to the Company’s Class A common stockholders upon conversion of the 2022 Convertible Notes, the Company entered into the Convertible Note Hedges covering 20,249,665 shares of the Company’s Class A common stock in connection with the issuance of the 2022 Convertible Notes. The Convertible Note Hedges had an initial exercise price of $16.58 per share, subject to adjustment upon the occurrence of certain corporate events or transactions, and were exercisable if the 2022 Convertible Notes were converted. In connection with the adjustment to the conversion rate of the 2022 Indenture, the exercise price of the Convertible Note Hedges and the Note Hedge Warrants were adjusted to $14.51 per share and $18.82 per share, respectively (Note 5). If upon conversion of the 2022 Convertible Notes, the price of the Company’s Class A common stock is above the exercise price of the Convertible Note Hedges, the counterparties are obligated to deliver shares of the Company’s Class A common stock and/or cash with an aggregate value approximately equal to the difference between the price of the Company’s Class A common stock at the conversion date and the exercise price, multiplied by the number of shares of the Company’s Class A common stock related to the Convertible Note Hedge being exercised. Concurrently with entering into the Convertible Note Hedges, the Company also sold Note Hedge Warrants to the Convertible Note Hedge counterparties to acquire 20,249,665 shares of the Company’s Class A common stock, subject to customary anti-dilution adjustments. The strike price of the Note Hedge Warrants was initially $21.50 per share, subject to adjustment, and such warrants are exercisable over the 150 trading day period beginning on September 15, 2022. In connection with the Separation in April 2019, the exercise price was adjusted to $18.82 per share and the number of shares underlying the Note Hedge Warrants was increased to 23,135,435 The Convertible Note Hedges and the Note Hedge Warrants are separate transactions entered into by the Company and are not part of the terms of the 2022 Convertible Notes. Holders of the 2022 Convertible Notes and the Note Hedge Warrants do not have any rights with respect to the Convertible Note Hedges. The Company paid approximately $91.9 million for the Convertible Note Hedges and recorded this amount as a long-term asset on its condensed consolidated balance sheet. The Company received approximately $70.8 million for the Note Hedge Warrants and recorded this amount as a long-term liability, resulting in a net cost to the Company of approximately $21.1 million. In August 2019, concurrently with the repurchase of $215.0 million aggregate principal amount of the 2022 Convertible Notes, the Company terminated the respective portion of the Convertible Note Hedges and Note Hedge Warrants. The Company received approximately $3.2 million related to net termination payments from the counterparties of the Convertible Note Hedges and Note Hedge Warrants. During the three months ended September 30, 2019, the Company recorded approximately $4.8 million in loss on derivatives as a result of the partial termination of the Convertible Note Hedges and Note Hedge Warrants and change in fair value over the period. The Convertible Note Hedges and Note Hedge Warrants are accounted for as derivative assets and liabilities, respectively, in accordance with ASC Topic 815, Derivatives and Hedging Capped Calls with Respect to 2024 Convertible Notes and 2026 Convertible Notes 2024 Convertible Notes and the 2026 Convertible Notes do not have any rights with respect to the Capped Calls. These instruments meet the conditions outlined in ASC 815 to be classified in stockholders’ deficit and are not subsequently remeasured as long as the conditions for equity classification continue to be met. The Company recorded a reduction to additional paid-in capital of approximately $25.0 million related to the premium payments for the Capped Calls. Additionally, the Company recorded an approximately $0.2 million reduction to equity related to transaction costs incurred in connection with the Capped Calls. |
Employee Stock Benefit Plans
Employee Stock Benefit Plans | 9 Months Ended |
Sep. 30, 2019 | |
Disclosure Text Block | |
Employee Stock Benefit Plans | 10. Employee Stock Benefit Plans The Company has several share-based compensation plans under which stock options, restricted stock awards, restricted stock units (“RSUs”), and other share-based awards are available for grant to employees, officers, directors and consultants of the Company. In May 2019, the Company’s stockholders approved the 2019 Equity Incentive Plan (the “2019 Equity Plan”) under which stock options, restricted stock awards, RSUs, and other stock-based awards may be granted to employees, officers, directors, or consultants of the Company. Under the 2019 Equity Plan, 10,000,000 shares of Class A common stock were initially reserved for issuance. As of September 30, 2019, 11,276,185 shares were available for future grant under the 2019 Equity Plan. The following table summarizes share-based compensation expense reflected in the condensed consolidated statements of operations for the three and nine months ended September 30, 2019 and 2018 (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Research and development $ 1,208 $ 2,974 $ 5,306 $ 8,446 Selling, general and administrative 4,312 7,643 19,832 19,708 Restructuring expenses — 1,551 654 2,068 $ 5,520 $ 12,168 $ 25,792 $ 30,222 During the three months ended March 31, 2018, the Company reduced its field-based workforce by approximately 60 employees, primarily consisting of field-based sales representatives that promoted DUZALLO or ZURAMPIC in the first position, resulting in a modification to certain share-based payment awards. As a result of the modification, the Company recorded stock-based compensation expense of approximately $0.2 million to restructuring expenses during the three months ended March 31, 2018. During the three months ended June 30, 2018, the Company initiated a reduction in headquarter-based workforce by approximately 40 employees associated with the Separation. Certain share-based payment awards were modified in connection with the reduction in workforce. As a result of the modifications, the Company recorded approximately $1.0 million and $1.3 million of restructuring expenses during the three and nine months ended September 30, 2018, respectively. In February 2019, following further analysis of the Company’s strategy and core business needs, and in an effort to further strengthen the operational efficiency of the organization, the Company commenced a reduction in workforce by approximately 35 employees, primarily based in the home office. Certain share-based payment awards were modified in connection with the reduction in workforce. As a result of the modifications, the Company recorded no share-based compensation expense and approximately $0.7 million to restructuring expenses during the three and nine months ended September 30, 2019, respectively. In April 2019, in connection with the Separation, all outstanding share-based payment awards were modified in accordance with the equity conversion-related provisions of the employee matters agreement. No share-based compensation expense was recognized in connection with these modifications. Additionally, modifications with respect to the Company’s Employee Stock Purchase Plan (“ESPP”) were made due to the change in share price as a result of the Separation. As a result of the modification to the ESPP, the Company recorded approximately $0.3 million of share-based compensation expense during the nine months ended September 30, 2019. In connection with certain other modifications of share-based payment awards during the three and nine months ended September 30, 2019, the Company recognized approximately |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2019 | |
Disclosure Text Block | |
Related Party Transactions | 11. Related Party Transactions In September 2009, Allergan became a related party when the Company sold to Allergan 2,083,333 shares of the Company’s convertible preferred stock. Under the collaboration agreement, the Company and Allergan equally support the development and commercialization of linaclotide (Note 4). Amounts due to and due from Allergan 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. As of September 30, 2019 and December 31, 2018, the Company had approximately $94.4 million and approximately $60.0 million, respectively, in related party accounts receivable, net of related party accounts payable, associated with Allergan. The Company has and currently obtains health insurance services for its employees from an insurance provider whose President and Chief Executive Officer became a member of the Company’s Board of Directors in April 2016. The Company paid approximately $1.7 million and approximately $5.8 million in insurance premiums to this insurance provider during the three and nine months ended September 30, 2019, respectively, and paid approximately $2.9 million and approximately $9.2 million during the three and nine months ended September 30, 2018, respectively. At September 30, 2019 and December 31, 2018, the Company had no accounts payable due to this related party. The Company has and currently obtains commercial market and prescription data from a vendor whose Senior Vice President of Strategy, Marketing and Communications became a member of the Company’s Board of Directors in April 2019. The Company paid approximately $0.8 million and approximately $2.0 million in fees to this company during the three and nine months ended September 30, 2019, respectively, and approximately $0.8 million and approximately $2.6 million during the three and nine months ended September 30, 2018, respectively. As of September 30, 2019 and December 31, 2018, the Company had an insignificant amount of accounts payable due to this related party. In connection with the Separation, the Company executed certain contracts with Cyclerion whose President became a member of the Company’s Board of Directors in April 2019 (Note 2). As of September 30, 2019, the Company had $1.3 million of accounts payable, net of accounts receivable, due to Cyclerion. |
Workforce Reduction
Workforce Reduction | 9 Months Ended |
Sep. 30, 2019 | |
Disclosure Text Block | |
Workforce Reduction | 12. Workforce Reduction On January 30, 2018, the Company commenced an initiative to evaluate the optimal mix of investments for the lesinurad franchise. As part of this effort, the Company reduced its field-based workforce by approximately 60 employees, primarily consisting of field-based sales representatives that promoted DUZALLO or ZURAMPIC in the first position. During the three months ended March 31, 2018, the Company substantially completed the implementation of this reduction in field-based workforce and, in accordance with ASC Topic 420, Exit or Disposal Activities On June 27, 2018, the Company determined the initial organizational designs of the two new businesses, including employees’ roles and responsibilities, in connection with the Separation. As part of this process, the Company initiated a reduction in its headquarter-based workforce by approximately 40 employees. During the three and nine months ended September 30, 2019, the Company recorded an insignificant amount of costs in connection with this workforce reduction. During the three and nine months ended September 30, 2018, the Company recorded approximately $2.5 million and $4.0 million, respectively, of costs in connection with the reduction in workforce in accordance with ASC 420. These costs are reflected in the condensed consolidated statement of operations as restructuring expenses. On August 16, 2018, the Company initiated a reduction in its workforce by approximately 100 employees, primarily consisting of field-based sales representatives in connection with the termination of the Lesinurad License. During the three and nine months ended September 30, 2019, the Company did not record any restructuring costs related to this workforce reduction. During each of the three and nine months ended September 30, 2018, the Company recorded approximately $7.6 million of costs in connection with the reduction in workforce. These costs are reflected in the condensed consolidated statement of operations as restructuring expenses. On February 7, 2019, following further analysis of the Company’s strategy and core business needs, and in an effort to further strengthen the operational efficiency of the organization, the Company commenced a reduction in workforce by approximately 35 employees, primarily based in the home office. During the three and nine months ended September 30, 2019, the Company reversed approximately $0.2 million and recorded approximately $3.7 million, respectively, of costs that are reflected in the condensed consolidated statement of operations as restructuring expenses. The following table summarizes the accrued liabilities activity recorded in connection with the reduction in workforce for the three and nine months ended September 30, 2019 (in thousands): Amounts Amounts Accrued at Accrued at December 31, 2018 Charges Amount Paid Adjustments September 30, 2019 Employee severance, benefits and related costs June 2018 Reduction 696 16 (689) (23) — August 2018 Reduction 1,756 — (1,708) (48) — February 2019 Reduction — 3,182 (2,765) (89) 328 Total $ 2,452 $ 3,198 $ (5,162) $ (160) $ 328 Contract related costs August 2018 Reduction $ 433 $ — (287) (42) $ 104 Total $ 433 $ — $ (287) $ (42) $ 104 |
Nature of Business (Policies)
Nature of Business (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Policy Text Blocks | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements and the related disclosures are unaudited and have been prepared in accordance with accounting principles generally accepted in the U.S. Additionally, certain information and footnote disclosures normally included in the Company’s annual financial statements have been condensed or omitted. Accordingly, these interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, which was filed with the Securities and Exchange Commission on February 25, 2019 (the “2018 Annual Report on Form 10-K”). The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all normal recurring adjustments considered necessary for a fair presentation of the Company’s financial position as of September 30, 2019, and the results of its operations for the three and nine months ended September 30, 2019 and 2018, its statements of stockholders’ deficit for the three and nine months ended September 30, 2019 and 2018, and its cash flows for the nine months ended September 30, 2019 and 2018. The results of operations for the three and nine months ended September 30, 2019 and 2018 are not necessarily indicative of the results that may be expected for the full year or any other subsequent interim period. |
Principles of Consolidation | Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of Ironwood and its wholly-owned subsidiaries as of September 30, 2019, Ironwood Pharmaceuticals Securities Corporation and Ironwood Pharmaceuticals GmbH. Cyclerion was a wholly-owned subsidiary until it became an independent, publicly-traded company on April 1, 2019. All intercompany transactions and balances are eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of condensed 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 and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the amounts of revenues and expenses during the reported periods. On an on-going basis, the Company’s management evaluates its estimates, judgments and methodologies. Significant estimates and assumptions in the condensed consolidated financial statements include those related to revenue recognition; available-for-sale securities; accounts receivable; inventory valuation, and related reserves; impairment of long-lived assets, including goodwill; valuation procedures for right-of-use assets and operating lease liabilities; initial valuation procedures for the issuance and repurchase of convertible notes; valuation of assets and liabilities held for disposition and losses related to discontinued operations; fair value of derivatives; balance sheet classification of notes payable and convertible notes; income taxes, including the valuation allowance for deferred tax assets; research and development expenses; 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 materially from these estimates under different assumptions or conditions. Changes in estimates are reflected in reported results in the period in which they become known. |
Reclassifications of Prior Period Financial Statements | Reclassifications of Prior Period Financial Statements Certain prior period financial statement items, such as discontinued operations, have been reclassified to conform to current period presentation. |
Discontinued Operations | Discontinued Operations During the three months ended June 30, 2019, the Company determined that its sGC business met the criteria for classification as a discontinued operation in accordance with Accounting Standards Codification (“ASC”) Subtopic 205-20, Discontinued Operations Cyclerion Separation |
Leases | Leases Effective January 1, 2019, the Company adopted ASC Topic 842, Leases Leases The recognition of right-of-use assets and lease liabilities related to the Company’s operating leases under ASC 842 has had a material impact on the Company’s condensed consolidated financial statements. As part of the ASC 842 adoption, the Company elected certain practical expedients outlined in the guidance. These practical expedients include: ● Accounting policy election to use the short-term lease exception by asset class; ● Election of the practical expedient package during transition, which includes: o An entity need not reassess whether any expired or existing contracts are or contain leases. o An entity need not reassess the classification for any expired or existing leases. As a result, all leases that were classified as operating leases in accordance with ASC 840 are classified as operating leases under ASC 842, and all leases that were classified as capital leases in accordance with ASC 840 are classified as finance leases under ASC 842. o An entity need not reassess initial direct costs for any existing leases. Subsequent to the Company’s adoption of ASC 842, the Company elected the post-transition practical expedient, by class of underlying asset, to account for lease components and non-lease components together as a single component for the asset class of operating lease right-of-use real estate assets. The Company’s lease portfolio for the three and nine months ended September 30, 2019 includes: leases for its prior and current headquarters locations, a data center colocation lease, vehicle leases for its salesforce representatives, and leases for computer and office equipment. The Company determines if an arrangement is a lease at the inception of the contract. The asset component of the Company’s operating leases is recorded as operating lease right-of-use assets, and the liability component is recorded as current portion of operating lease liabilities and operating lease liabilities, net of current portion in the Company’s condensed consolidated balance sheets. As of September 30, 2019, the Company did not have any finance leases. Right-of-use assets and operating lease liabilities are recognized based on the present value of lease payments over the lease term at the lease inception date. Existing leases in the Company’s lease portfolio as of the adoption date were valued as of January 1, 2019. The Company uses an incremental borrowing rate based on the information available at lease inception in determining the present value of lease payments, if an implicit rate of return is not provided with the lease contract. Operating lease right-of-use assets are adjusted for incentives expected to be received. Right-of-use assets and operating lease liabilities are remeasured upon certain modifications to leases using the present value of remaining lease payments and estimated incremental borrowing rate upon lease modification. Lease cost is recognized on a straight-line basis over the lease term, and includes amounts related to short-term leases. The Company recognizes variable lease payments as operating expenses in the period in which the obligation for those payments is incurred. Variable lease payments primarily include common area maintenance, utilities, real estate taxes, insurance, and other operating costs that are passed on from the lessor in proportion to the space leased by the Company. |
Derivative Assets and Liabilities | Derivative Assets and Liabilities In June 2015, in connection with the issuance of the 2022 Convertible Notes, the Company entered into convertible note hedge transactions (the “Convertible Note Hedges”). Concurrently with entering into the Convertible Note Hedges, the Company also entered into certain warrant transactions in which it sold note hedge warrants (the “Note Hedge Warrants”) to the Convertible Note Hedge counterparties to acquire shares of the Company’s Class A common stock, subject to customary anti-dilution adjustments (Note 12). In connection with the partial repurchase of the 2022 Convertible Notes in August 2019, the Company terminated its Convertible Note Hedges and Note Hedge Warrants proportionately. These instruments are derivative financial instruments under ASC Topic 815, Derivatives and Hedging These derivatives are recorded as assets or liabilities at fair value each reporting period and the fair value is determined using the Black-Scholes option-pricing model. The changes in fair value are recorded as a component of other (expense) income in the consolidated statements of operations. Significant inputs used to determine the fair value include the price per share of the Company’s Class A common stock on the date of valuation, time to maturity of the derivative instruments, the strike prices of the derivative instruments, the risk-free interest rate, and the volatility of the Company’s Class A common stock. Changes to these inputs could materially affect the valuation of the Convertible Note Hedges and Note Hedge Warrants in future periods. In August 2019, in connection with the issuance of the 2024 Convertible Notes and the 2026 Convertible Notes, the Company entered into the Capped Calls with certain financial institutions. Subject to customary anti-dilution and certain other adjustments, the Capped Calls cover the same number of shares of Class A common stock that initially underlie the 2024 Convertible Notes and the 2026 Convertible Notes. These instruments meet the conditions outlined in ASC 815 to be classified in stockholders’ deficit and are not subsequently remeasured as long as the conditions for equity classification continue to be met. |
New Accounting Pronouncements | New Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (the “FASB”) or other standard setting bodies that are adopted by the Company as of the specified effective date. Except as set forth below, the Company did not adopt any new accounting pronouncements during the three and nine months ended September 30, 2019 that had a material effect on its condensed consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. Subsequent to the issuance of ASU 2016-02, the FASB issued ASU No. 2018-10, Leases (Topic 842), Codification Improvements Leases (Topic 842), Targeted Improvements , Leases (Topic 842), Codification Improvements . . In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments Financial Instruments—Credit Losses (Topic 326): Targeted Transition Relief is permitted. The Company is currently evaluating the potential impact that the adoption of these ASUs will have on the Company’s financial position and results of operations. In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350) In June 2018, the FASB issued ASU No. 2018-07, Compensation—Stock Compensation (Topic 718) Improvements to Nonemployee Share-Based Payment Accounting . In July 2018, the FASB issued ASU 2018-09, Codification Improvements Compensation—Stock Compensation—Income Taxes Compensation—Stock Compensation—Income Taxes In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirement for Fair Value Measurement In August 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract (a consensus of the FASB Emerging Issues Task Force) In October 2018, the FASB issued ASU No. 2018-17, Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities In July 2019, the FASB issued ASU No. 2019-07, Disclosure Update and Simplification and Investment Company Reporting Modernization |
Cyclerion Separation (Tables)
Cyclerion Separation (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Table Text Blocks | |
Summary of assets and liabilities transferred in separation | As of April 1, 2019 Assets: Prepaid expenses and other current assets $ 1,169 Property and equipment, net 10,241 Other assets 21 $ 11,431 Liabilities: Accrued research and development costs $ 5,673 Accrued expenses and other current liabilities 3,149 $ 8,822 Net Assets Transferred to Cyclerion $ 2,609 |
Summary of the discontinued operations | Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Costs and expenses: Research and development — 17,636 21,792 49,410 Selling, general and administrative — 4,712 15,646 13,860 Restructuring expenses — 180 — 1,086 Net loss from discontinued operations — 22,528 37,438 64,356 Assets: Prepaid expenses and other current assets $ 847 Property and equipment, net 9,618 Other assets 25 $ 10,490 Liabilities: Accounts payable $ 3,232 Accrued research and development costs 5,256 Accrued expenses and other current liabilities 7,251 $ 15,739 |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Table Text Blocks | |
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 applicable, as their effect would be anti-dilutive (in thousands): As of September 30, 2019 2018 Options to purchase Class A common stock 17,889 20,860 Shares subject to repurchase 182 97 Restricted stock units 2,838 3,238 Shares subject to issuance under Employee Stock Purchase Plan 67 59 Note Hedge Warrants 8,318 20,250 2022 Convertible Notes 8,318 20,250 2024 Convertible Notes 14,934 — 2026 Convertible Notes 14,934 — Total 67,480 64,754 |
Collaboration, License, Co-Pr_2
Collaboration, License, Co-Promotion and Other Commercial Agreements (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Table Text Blocks | |
Schedule of revenue attributable to transactions from collaboration and license arrangements | Three Months Ended Nine Months Ended September 30, September 30, Collaborative Arrangements Revenue 2019 2018 2019 2018 Linaclotide Collaboration Agreements: Allergan (North America) $ 85,107 $ 52,724 $ 225,390 $ 184,133 Allergan (Europe and other) 526 255 1,208 831 AstraZeneca (China, including Hong Kong and Macau) 32,401 — 32,401 — Astellas (Japan) 10,059 — 10,059 — Co-Promotion and Other Agreements: Allergan (VIBERZI) 1,363 750 2,602 2,250 Alnylam (givosiran) 722 — 722 — Other 346 465 1,616 1,273 Total collaborative arrangements revenue $ 130,524 $ 54,194 $ 273,998 $ 188,487 Sale of API (1) Linaclotide License Agreements: Astellas (Japan) $ — $ 9,501 $ 27,468 $ 23,738 AstraZeneca (China, including Hong Kong and Macau) 643 — 646 — Other (1) — 756 — 756 Total sale of API $ 643 $ 10,257 $ 28,114 $ 24,494 (1) During the three months ended September 30, 2018, the Company recorded approximately $0.8 million in revenue related to the sale of API to Allergan. |
Allergan | |
Table Text Blocks | |
Schedule of revenue attributable to transactions from collaboration and license arrangements | The Company recognized collaborative arrangements revenue from the Allergan collaboration agreement for North America during the three and nine months ended September 30, 2019 and 2018 as follows (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Collaborative arrangements revenue related to sales of LINZESS in the U.S. $ 84,565 $ 52,261 $ 223,831 $ 182,675 Royalty revenue 542 463 1,559 1,458 Total collaborative arrangements revenue $ 85,107 $ 52,724 $ 225,390 $ 184,133 |
Schedule of amount recorded by the Company for share of net loss related to collaborative arrangement | The following table presents the amounts recorded by the Company for commercial efforts related to LINZESS in the U.S. in the three and nine months ended September 30, 2019 and 2018 (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Collaborative arrangements revenue related to sales of LINZESS in the U.S. (1)(2) $ 84,565 $ 52,261 $ 223,831 $ 182,675 Selling, general and administrative costs incurred by the Company (1) (9,129) (10,915) (29,764) (33,556) The Company’s share of net profit $ 75,436 $ 41,346 $ 194,067 $ 149,119 (1) Includes only collaborative arrangement revenue or selling, general and administrative costs attributable to the cost-sharing arrangement with Allergan for the three and nine months ended September 30, 2019 and 2018. |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Table Text Blocks | |
Schedule of assets and liabilities measured at fair value on a recurring basis | The following tables present the assets and liabilities the Company has measured at fair value on a recurring basis (in thousands): Fair Value Measurements at Reporting Date Using Quoted Prices in Significant Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs September 30, 2019 (Level 1) (Level 2) (Level 3) Assets: Cash and cash equivalents: Money market funds $ 101,207 $ 101,207 $ — $ — Repurchase agreements 37,800 37,800 — — Convertible Note Hedges 11,357 — — 11,357 Total assets measured at fair value $ 150,364 $ 139,007 $ — $ 11,357 Liabilities: Note Hedge Warrants $ 8,768 $ — $ — $ 8,768 Total liabilities measured at fair value $ 8,768 $ — $ — $ 8,768 Fair Value Measurements at Reporting Date Using Quoted Prices in Significant Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs December 31, 2018 (Level 1) (Level 2) (Level 3) Assets: Cash and cash equivalents: Money market funds $ 142,218 $ 142,218 $ — $ — Repurchase agreements 30,875 30,875 — — Convertible Note Hedges 41,020 — — 41,020 Total assets measured at fair value $ 214,113 $ 173,093 $ — $ 41,020 Liabilities: Note Hedge Warrants $ 33,763 $ — $ — $ 33,763 Contingent Consideration 51 — — 51 Total liabilities measured at fair value $ 33,814 $ — $ — $ 33,814 |
Schedule of assumptions used in fair market valuations | The following inputs were used in the fair market valuation of the Convertible Note Hedges and Note Hedge Warrants as of September 30, 2019 and December 31, 2018: Nine Months Ended Year Ended September 30, December 31, 2019 2018 Convertible Note Hedge Convertible Note Hedge Note Hedges Warrants Note Hedges Warrants Risk-free interest rate (1) 1.6 % 1.6 % 2.5 % 2.5 % Time to maturity 2.7 3.3 3.5 4.1 Stock price (2) $ 8.59 $ 8.59 $ 10.36 $ 10.36 Strike price (3) $ 14.51 $ 18.82 $ 16.58 $ 21.50 Common stock volatility (4) 47.8 % 46.5 % 43.8 % 43.6 % Dividend yield — % — % — % — % (1) Based on U.S. Treasury yield curve, with terms commensurate with the terms of the Convertible Note Hedges and the Note Hedge Warrants. (2) The closing price of the Company’s Class A common stock on the last trading day of the quarter ended September 30, 2019 and December 31, 2018, respectively. (3) As per the respective agreements for the Convertible Note Hedges and Note Hedge Warrants. The strike prices for the Convertible Note Hedges and Note Hedge Warrants were adjusted in conjunction with the conversion rate adjustment in April 2019 (Note 9). (4) Expected volatility based on historical volatility of the Company’s Class A common stock. (5) 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. |
Schedule of the change in Level 3 convertible note derivatives | The following table reflects the change in the Company’s Level 3 Convertible Note Hedges and Note Hedge Warrants from December 31, 2018 through September 30, 2019 (in thousands): Convertible Note Hedge Note Hedges Warrants Balance at December 31, 2018 $ 41,020 $ (33,763) Cash settlement (received) paid upon early termination of derivatives (28,909) 25,735 Change in fair value, recorded as a component of gain (loss) on derivatives (754) (740) Balance at September 30, 2019 $ 11,357 $ (8,768) |
Inventory (Tables)
Inventory (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Table Text Blocks | |
Schedule of Inventory | Inventory consisted of the following (in thousands): September 30, 2019 December 31, 2018 Raw Materials $ 1,134 $ — Work in Progress 707 — Finished Goods 457 $ 2,298 $ — |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Table Text Blocks | |
Schedule of accrued expenses and other current liabilities | Accrued expenses and other current liabilities consisted of the following (in thousands): p September 30, 2019 December 31, 2018 Salaries $ 1,703 $ 3,054 Accrued vacation 2,647 3,493 Accrued incentive compensation 8,647 13,867 Other employee benefits 1,340 1,883 Professional fees 5,177 1,735 Accrued interest 1,392 873 Restructuring accruals 432 2,885 Other 9,191 10,211 $ 30,529 $ 38,001 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Table Text Blocks | |
Schedule of components of lease cost and supplemental cash flow information | Lease cost is recognized on a straight-line basis over the lease term. The components of lease cost for the three and nine months ended September 30, 2019 are as follows (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2019 2019 Operating lease cost during period, net (1) $ 6,244 13,924 Variable lease payments 654 1,308 Short-term lease cost 375 1,143 Total lease cost $ 7,273 16,375 (1) Operating lease cost is presented net of approximately $0.3 million of sublease income for the nine months ended September 30, 2019. Sublease income relates to a sublease agreement between Ironwood and Cyclerion executed upon Separation. The sublease agreement terminated in May 2019. Supplemental cash flow information related to leases for the periods reported is as follows: Nine Months Ended September 30, 2019 Right-of-use assets obtained in exchange for new operating lease upon adoption of ASC 842 (in thousands) $ 88,299 Adjustment to right-of-use assets as a result of the lease modification at the Separation date (in thousands) (40,427) Adjustment to right-of-use assets as a result of the termination of the Binney Street Lease (in thousands) (34,440) Right-of-use assets obtained in exchange for new operating lease liabilities (1) 18,452 Cash paid for amounts included in the measurement of lease liabilities (in thousands) 8,869 Weighted-average remaining lease term of operating leases (in years) 8.0 Weighted-average discount rate of operating leases 5.4 % (1) Relates to right-of-use assets and operating lease liabilities for the Summer Street Lease. |
Schedule of future minimum lease payments under non-cancelable operating leases - ASC 842 | Future minimum lease payments under non-cancelable operating leases under ASC 842 as of September 30, 2019 are as follows (in thousands): Operating Lease Payments 2019 (1) $ 9,729 2020 1,146 2021 3,128 2022 3,129 2023 3,065 2024 and thereafter 21,170 Total future minimum lease payments 41,367 Less: present value adjustment 8,773 Operating lease liabilities at September 30, 2019 32,594 Less: current portion of operating lease liabilities 9,934 Operating lease liabilities, net of current portion $ 22,660 (1) Amounts are for the three months ending December 31, 2019. |
Schedule of future minimum lease payments under non-cancelable operating leases - ASC 840 | At December 31, 2018, future minimum lease payments under non-cancelable leases under ASC 840 were as follows (in thousands): Operating Lease Payments 2019 $ 18,736 2020 18,312 2021 18,863 2022 19,365 2023 19,818 2024 and thereafter 22,118 Total future minimum lease payments $ 117,212 |
Notes Payable (Tables)
Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Table Text Blocks | |
Schedule of outstanding Convertible Note | The Company’s outstanding balances for the Convertible Senior Notes as of September 30, 2019 and December 31, 2018 consisted of the following (in thousands): September 30, 2019 December 31, 2018 Liability component: Principal: 2022 Convertible Notes $ 120,699 $ 335,699 2024 Convertible Notes 200,000 — 2026 Convertible Notes 200,000 — Less: unamortized debt discount (109,685) (65,094) Less: unamortized debt issuance costs (8,339) (5,004) Net carrying amount $ 402,675 $ 265,601 Equity Component: 2022 Convertible Notes $ 19,807 $ 114,199 2024 Convertible Notes 41,152 — 2026 Convertible Notes 51,350 — Total Equity component $ 112,309 $ 114,199 |
Schedule of interest expense related to Convertible Notes | Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Contractual interest expense $ 1,780 $ 1,889 $ 5,557 $ 5,665 Amortization of debt issuance costs 301 249 856 712 Amortization of debt discount 4,460 3,900 12,699 11,450 Total interest expense $ 6,541 $ 6,038 $ 19,112 $ 17,827 |
Schedule of future minimum payments details of debt | Future minimum payments under the Convertible Senior Notes as of September 30, 2019 are as follows (in thousands): 2019 (1) $ 2,895 2020 7,216 2021 7,216 2022 126,556 2023 4,500 2024 203,750 Thereafter 204,500 Total future minimum payments under the convertible senior notes 556,633 Less: amounts representing interest (35,934) Less: unamortized debt discount (109,685) Less: unamortized debt issuance costs (8,339) Convertible senior notes balance $ 402,675 |
Employee Stock Benefit Plans (T
Employee Stock Benefit Plans (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Table Text Blocks | |
Share-based compensation expense reflected in the condensed consolidated statements of operations | The following table summarizes share-based compensation expense reflected in the condensed consolidated statements of operations for the three and nine months ended September 30, 2019 and 2018 (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Research and development $ 1,208 $ 2,974 $ 5,306 $ 8,446 Selling, general and administrative 4,312 7,643 19,832 19,708 Restructuring expenses — 1,551 654 2,068 $ 5,520 $ 12,168 $ 25,792 $ 30,222 |
Workforce Reduction (Tables)
Workforce Reduction (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Table Text Blocks | |
Schedule of charges made to the reduction in field-based workforce | The following table summarizes the accrued liabilities activity recorded in connection with the reduction in workforce for the three and nine months ended September 30, 2019 (in thousands): Amounts Amounts Accrued at Accrued at December 31, 2018 Charges Amount Paid Adjustments September 30, 2019 Employee severance, benefits and related costs June 2018 Reduction 696 16 (689) (23) — August 2018 Reduction 1,756 — (1,708) (48) — February 2019 Reduction — 3,182 (2,765) (89) 328 Total $ 2,452 $ 3,198 $ (5,162) $ (160) $ 328 Contract related costs August 2018 Reduction $ 433 $ — (287) (42) $ 104 Total $ 433 $ — $ (287) $ (42) $ 104 |
Nature of Business - Linaclotid
Nature of Business - Linaclotide (Details) person in Millions | 9 Months Ended |
Sep. 30, 2019person | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of adults suffering with irritable bowel syndrome with constipation ("IBS-C") | 13 |
Number of adults suffering with chronic idiopathic constipation ("CIC") | 35 |
Number of adults suffering with irritable bowel syndrome with diarrhea ("IBS-D") | 16 |
Number of adults suffering with gastroesophageal reflux disease ("GERD") | 10 |
Nature of Business - Non-cancel
Nature of Business - Non-cancelable Operating Lease (Details) ft² in Thousands | Jun. 11, 2019ft² |
Summer Street Lease | |
Operating leases | |
Rentable area leased (in square feet) | 39 |
Nature of Business - Notes Paya
Nature of Business - Notes Payable (Details) - USD ($) $ in Thousands | Sep. 23, 2016 | Sep. 30, 2019 | Aug. 31, 2019 | Sep. 30, 2019 | Sep. 30, 2019 | Sep. 16, 2019 | Aug. 12, 2019 | Dec. 31, 2018 | Jun. 30, 2015 |
Notes Payable | |||||||||
Loss on extinguishment of debt | $ 30,977 | $ 30,977 | |||||||
Equity component of the partial repurchase of the 2022 Convertible Notes | (26,959) | ||||||||
Convertible Senior Notes | |||||||||
Notes Payable | |||||||||
Net proceed received | $ 391,000 | ||||||||
2.25% Convertible Senior Notes due 2022 | Convertible Senior Notes | |||||||||
Notes Payable | |||||||||
Aggregate principal amount of notes issued | $ 120,699 | 120,699 | 120,699 | $ 335,699 | $ 335,700 | ||||
Stated interest rate (as a percent) | 2.25% | 2.25% | |||||||
Fees and expenses | $ 11,700 | ||||||||
Debt redeemed/repurchased | 215,000 | $ 215,000 | |||||||
Debt redemption/repurchase price | 227,300 | ||||||||
Loss on extinguishment of debt | 23,400 | ||||||||
Initial debt issuance costs | 2,800 | ||||||||
0.75% Convertible Senior Notes due 2024 and 1.50% Convertible Senior Notes due 2026 | Convertible Senior Notes | |||||||||
Notes Payable | |||||||||
Fees and expenses | 9,000 | ||||||||
0.75% Convertible Senior Notes due 2024 | Convertible Senior Notes | |||||||||
Notes Payable | |||||||||
Aggregate principal amount of notes issued | 200,000 | 200,000 | 200,000 | 200,000 | $ 200,000 | ||||
Stated interest rate (as a percent) | 0.75% | ||||||||
1.50% Convertible Senior Notes due 2026 | Convertible Senior Notes | |||||||||
Notes Payable | |||||||||
Aggregate principal amount of notes issued | $ 200,000 | $ 200,000 | $ 200,000 | $ 200,000 | $ 200,000 | ||||
Stated interest rate (as a percent) | 1.50% | ||||||||
8.375% Notes due 2026 | Notes Payable | |||||||||
Notes Payable | |||||||||
Aggregate principal amount of notes issued | $ 150,000 | ||||||||
Stated interest rate (as a percent) | 8.375% | 8.375% | 8.375% | 8.375% | |||||
Debt redeemed/repurchased | 116,500 | ||||||||
Debt redemption/repurchase price | $ 123,000 | ||||||||
Loss on extinguishment of debt | $ 7,600 | $ 31,000 |
Nature of Business - Segment In
Nature of Business - Segment Information (Details) - segment | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Segment Information | ||||
Number of reportable segments | 1 | 1 | 1 | 1 |
Nature of Business - Leases - C
Nature of Business - Leases - Cumulative Adjustment (Details) $ in Millions | Jan. 01, 2019USD ($) |
Accounting Standards Update 2016-02 | |
New Accounting Pronouncements | |
Cumulative effect of adoption of accounting standard | $ 0 |
Nature of Business - Leases - P
Nature of Business - Leases - Practical Expedients (Details) | 9 Months Ended |
Sep. 30, 2019 | |
Leases | |
Lease, Practical Expedients, Package | true |
Lease, Practical Expedient, Lessor Single Lease Component | true |
Nature of Business - Leases - R
Nature of Business - Leases - Recognition of Assets and Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Jan. 01, 2019 |
Leases | ||
Operating lease right-of-use assets | $ 19,793 | $ 88,300 |
Lease liabilities | $ 32,594 | $ 94,900 |
Nature of Business - New Accoun
Nature of Business - New Accounting Pronouncements (Details) | Sep. 30, 2019 |
Accounting Standards Update 2016-02 | |
New Accounting Pronouncements | |
Change in Accounting Principle, Accounting Standards Update, Adopted | true |
Change in Accounting Principle, Accounting Standards Update, Adoption Date | Jan. 1, 2019 |
Change in Accounting Principle, Accounting Standards Update, Early Adoption | false |
Accounting Standards Update 2016-13 | |
New Accounting Pronouncements | |
Change in Accounting Principle, Accounting Standards Update, Adopted | false |
Change in Accounting Principle, Accounting Standards Update, Early Adoption | false |
Accounting Standards Update 2017-04 | |
New Accounting Pronouncements | |
Change in Accounting Principle, Accounting Standards Update, Adopted | false |
Change in Accounting Principle, Accounting Standards Update, Early Adoption | false |
Accounting Standards Update 2018-07 | |
New Accounting Pronouncements | |
Change in Accounting Principle, Accounting Standards Update, Adopted | true |
Change in Accounting Principle, Accounting Standards Update, Adoption Date | Mar. 31, 2019 |
Change in Accounting Principle, Accounting Standards Update, Early Adoption | false |
Accounting Standards Update 2018-09 | |
New Accounting Pronouncements | |
Change in Accounting Principle, Accounting Standards Update, Adopted | true |
Change in Accounting Principle, Accounting Standards Update, Adoption Date | Mar. 31, 2019 |
Change in Accounting Principle, Accounting Standards Update, Early Adoption | false |
Accounting Standards Update 2018-13 | |
New Accounting Pronouncements | |
Change in Accounting Principle, Accounting Standards Update, Adopted | false |
Change in Accounting Principle, Accounting Standards Update, Early Adoption | false |
Accounting Standards Update 2018-15 | |
New Accounting Pronouncements | |
Change in Accounting Principle, Accounting Standards Update, Adopted | false |
Change in Accounting Principle, Accounting Standards Update, Early Adoption | false |
Accounting Standards Update 2018-17 | |
New Accounting Pronouncements | |
Change in Accounting Principle, Accounting Standards Update, Adopted | false |
Change in Accounting Principle, Accounting Standards Update, Early Adoption | false |
Cyclerion Separation - Separati
Cyclerion Separation - Separation Agreement (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Apr. 01, 2019 | Dec. 31, 2018 |
Assets: | |||
Prepaid expenses and other current assets | $ 11,863 | $ 10,216 | |
Property and equipment, net | 11,381 | 7,652 | |
Other assets | 20 | 89 | |
Total assets | 334,343 | 332,050 | |
Liabilities: | |||
Accrued research and development costs | 4,956 | 2,963 | |
Accrued expenses and other current liabilities | $ 30,529 | $ 38,001 | |
Cyclerion Therapeutics, Inc. | |||
Assets: | |||
Prepaid expenses and other current assets | $ 1,169 | ||
Property and equipment, net | 10,241 | ||
Other assets | 21 | ||
Total assets | 11,431 | ||
Liabilities: | |||
Accrued research and development costs | 5,673 | ||
Accrued expenses and other current liabilities | 3,149 | ||
Liabilities | 8,822 | ||
Net Assets Transferred to Cyclerion | $ 2,609 |
Cyclerion Separation - General
Cyclerion Separation - General Information (Details) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019USD ($) | Sep. 30, 2019USD ($)agreement | |
Cyclerion Separation | ||
Initial term of service, low end of range | 1 year | |
Initial term of service, high end of range | 2 years | |
Incremental stock-based compensation expense | $ 0 | $ 0 |
Transition services agreements | agreement | 2 | |
Transition Service Agreement [Member] | ||
Cyclerion Separation | ||
Other Income | $ 0.2 | |
Affiliated Entity | ||
Cyclerion Separation | ||
Tenant improvement reimbursement provisions | 1.3 | 1.3 |
Affiliated Entity | Research and development | Development Agreement [Member] | ||
Cyclerion Separation | ||
Expense for service provided by related party | $ 1.4 | $ 3 |
Cyclerion Separation - Summary
Cyclerion Separation - Summary of Expenses of Cyclerion (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Net Loss from Discontinued Operations | |||
Net loss from discontinued operations | $ 22,528 | $ 37,438 | $ 64,356 |
sGC Business | Discontinued Operations, Disposed of by Means Other than Sale, Spinoff | |||
Net Loss from Discontinued Operations | |||
Net loss from discontinued operations | 22,528 | 37,438 | 64,356 |
sGC Business | Discontinued Operations, Disposed of by Means Other than Sale, Spinoff | Research and development | |||
Net Loss from Discontinued Operations | |||
Net loss from discontinued operations | 17,636 | 21,792 | 49,410 |
sGC Business | Discontinued Operations, Disposed of by Means Other than Sale, Spinoff | Selling, general and administrative | |||
Net Loss from Discontinued Operations | |||
Net loss from discontinued operations | 4,712 | $ 15,646 | 13,860 |
sGC Business | Discontinued Operations, Disposed of by Means Other than Sale, Spinoff | Restructuring expenses | |||
Net Loss from Discontinued Operations | |||
Net loss from discontinued operations | $ 180 | $ 1,086 |
Cyclerion Separation - Summar_2
Cyclerion Separation - Summary of Assets and Liabilities Held for Disposition (Details) - Discontinued Operations, Disposed of by Means Other than Sale, Spinoff - sGC Business - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Assets: | ||
Prepaid expenses and other current assets | $ 847 | |
Property and equipment, net | 9,618 | |
Other assets | 25 | |
Assets | $ 0 | 10,490 |
Liabilities: | ||
Accounts payable | 3,232 | |
Accrued research and development costs | 5,256 | |
Accrued expenses and other current liabilities | 7,251 | |
Liabilities | $ 0 | $ 15,739 |
Net Income (Loss) Per Share - N
Net Income (Loss) Per Share - Notes Payable (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2015 |
Convertible Senior Notes | 2.25% Convertible Senior Notes due 2022 | |||
Notes Payable | |||
Aggregate principal amount of notes issued | $ 120,699 | $ 335,699 | $ 335,700 |
Net Income (Loss) Per Share - P
Net Income (Loss) Per Share - Potentially Dilutive Securities (Details) - shares shares in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Potentially dilutive securities | ||
Total potentially dilutive securities excluded from the computation of diluted weighted average shares outstanding (in shares) | 67,480 | 64,754 |
Employee stock options | ||
Potentially dilutive securities | ||
Total potentially dilutive securities excluded from the computation of diluted weighted average shares outstanding (in shares) | 17,889 | 20,860 |
Shares subject to repurchase | ||
Potentially dilutive securities | ||
Total potentially dilutive securities excluded from the computation of diluted weighted average shares outstanding (in shares) | 182 | 97 |
Restricted stock units | ||
Potentially dilutive securities | ||
Total potentially dilutive securities excluded from the computation of diluted weighted average shares outstanding (in shares) | 2,838 | 3,238 |
Shares subject to issuance under Employee Stock Purchase Plan | ||
Potentially dilutive securities | ||
Total potentially dilutive securities excluded from the computation of diluted weighted average shares outstanding (in shares) | 67 | 59 |
Note Hedge Warrants | ||
Potentially dilutive securities | ||
Total potentially dilutive securities excluded from the computation of diluted weighted average shares outstanding (in shares) | 8,318 | 20,250 |
2.25% Convertible Senior Notes due 2022 | ||
Potentially dilutive securities | ||
Total potentially dilutive securities excluded from the computation of diluted weighted average shares outstanding (in shares) | 8,318 | 20,250 |
0.75% Convertible Senior Notes due 2024 | ||
Potentially dilutive securities | ||
Total potentially dilutive securities excluded from the computation of diluted weighted average shares outstanding (in shares) | 14,934 | |
1.50% Convertible Senior Notes due 2026 | ||
Potentially dilutive securities | ||
Total potentially dilutive securities excluded from the computation of diluted weighted average shares outstanding (in shares) | 14,934 |
Net Income (Loss) Per Share - C
Net Income (Loss) Per Share - Computation of EPS (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Numerator: | ||||||||
Net income (loss) | $ 20,648 | $ 12,283 | $ (59,284) | $ (174,351) | $ (49,380) | $ (43,144) | $ (26,353) | $ (266,875) |
Denominator: | ||||||||
Weighted average number of common shares used in net loss per share-basic and diluted | 156,436 | 153,227 | 155,752 | 152,143 | ||||
Net income (loss) per share-basic and diluted (in dollars per share) | $ 0.13 | $ (1.14) | $ (0.17) | $ (1.75) |
Collaboration, License, Co-Pr_3
Collaboration, License, Co-Promotion and Other Commercial Agreements - Summary (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenues: | |||||
Revenue | $ 131,167 | $ 65,686 | $ 302,112 | $ 215,947 | |
Collaborative arrangements revenue | |||||
Revenues: | |||||
Revenue | 130,524 | 54,194 | 273,998 | 188,487 | |
Collaborative arrangement, co-promotion agreements | |||||
Revenues: | |||||
Revenue | 2,600 | ||||
Collaborative arrangement, other agreements | |||||
Revenues: | |||||
Revenue | 346 | 465 | 1,616 | 1,273 | |
Sale of active pharmaceutical ingredient | |||||
Revenues: | |||||
Revenue | 643 | 10,257 | 28,114 | 24,494 | |
Allergan | Collaborative arrangement, co-promotion agreements | |||||
Revenues: | |||||
Revenue | 1,363 | $ 1,300 | 750 | 2,602 | 2,250 |
Allergan | Sale of active pharmaceutical ingredient | |||||
Revenues: | |||||
Revenue | 756 | 756 | |||
Allergan | North America | Collaborative arrangements revenue | |||||
Revenues: | |||||
Revenue | 85,107 | 52,724 | 225,390 | 184,133 | |
Allergan | North America | Collaborative arrangement, collaboration and license agreements | |||||
Revenues: | |||||
Revenue | 85,107 | 52,724 | 225,390 | 184,133 | |
Allergan | Europe and Other | Collaborative arrangement, collaboration and license agreements | |||||
Revenues: | |||||
Revenue | 526 | 255 | 1,208 | 831 | |
AstraZeneca | China, Hong Kong, and Macau | Collaborative arrangement, collaboration and license agreements | |||||
Revenues: | |||||
Revenue | 32,401 | 32,401 | |||
AstraZeneca | China, Hong Kong, and Macau | Sale of active pharmaceutical ingredient | |||||
Revenues: | |||||
Revenue | 643 | 646 | |||
Astellas Pharma Inc. | Japan | Collaborative arrangement, collaboration and license agreements | |||||
Revenues: | |||||
Revenue | 10,059 | 10,059 | |||
Astellas Pharma Inc. | Japan | Sale of active pharmaceutical ingredient | |||||
Revenues: | |||||
Revenue | 0 | $ 9,501 | 27,468 | $ 23,738 | |
Alnylam | Collaborative arrangement, co-promotion agreements | |||||
Revenues: | |||||
Revenue | $ 722 | $ 722 |
Collaboration, License, Co-Pr_4
Collaboration, License, Co-Promotion and Other Commercial Agreements - Accounts Receivable (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Accounts receivable, net | |
Accounts payable from related party | $ 1,593 |
Collaborative arrangements and active pharmaceutical ingredient | |
Accounts receivable, net | |
Accounts receivable, net and related party accounts receivable, net, net of related party accounts payable | 129,000 |
Accounts payable from related party | $ 3,800 |
Collaboration, License, Co-Pr_5
Collaboration, License, Co-Promotion and Other Commercial Agreements - North America - General Information (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)itempayment | Sep. 30, 2018USD ($) | |
Sales milestones | ||||
Collaboration, License and Co-Promotion Agreements | ||||
Sales-related milestone if certain conditions are met | $ 100 | $ 100 | ||
Allergan | ||||
Collaboration, License and Co-Promotion Agreements | ||||
Equity investment in the entity's capital stock | 25 | |||
Net cost sharing offset or incremental expense related to research and development expense | 0.9 | $ 6.5 | ||
Cost sharing amount, reduction to research and development | $ 2.5 | $ 5.8 | ||
Remaining commercial-period performance obligations | item | 3 | |||
Allergan | Development and sales milestones | ||||
Collaboration, License and Co-Promotion Agreements | ||||
Cumulative license fees and development milestone payments received | $ 205 | $ 205 | ||
Allergan | Development milestones | ||||
Collaboration, License and Co-Promotion Agreements | ||||
Number of milestone payments received | payment | 6 | |||
Allergan | Sales milestones | ||||
Collaboration, License and Co-Promotion Agreements | ||||
Percentage of net profit from commercialization (as a percent) | 50.00% | |||
Percentage of net loss from commercialization (as a percent) | 50.00% |
Collaboration, License, Co-Pr_6
Collaboration, License, Co-Promotion and Other Commercial Agreements - North America - Change in Accounting Estimate (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Change in accounting estimate | ||||
Revenue | $ 131,167 | $ 65,686 | $ 302,112 | $ 215,947 |
Collaborative arrangements revenue | ||||
Change in accounting estimate | ||||
Revenue | 130,524 | 54,194 | 273,998 | 188,487 |
Collaborative arrangements revenue | Allergan | North America | ||||
Change in accounting estimate | ||||
Revenue | 85,107 | 52,724 | 225,390 | 184,133 |
Collaborative arrangements, LINZESS | Allergan | North America | ||||
Change in accounting estimate | ||||
Revenue | $ 84,565 | 52,261 | $ 223,831 | $ 182,675 |
Sales Returns and Allowances | Allergan | ||||
Change in accounting estimate | ||||
Revenue | 59,300 | |||
Sales Returns and Allowances | Collaborative arrangements, LINZESS | Allergan | North America | Collaborative arrangement, collaboration and license agreements | ||||
Change in accounting estimate | ||||
Revenue | $ 29,700 |
Collaboration, License, Co-Pr_7
Collaboration, License, Co-Promotion and Other Commercial Agreements - North America - Collaborative Arrangements Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenues: | ||||
Revenue | $ 131,167 | $ 65,686 | $ 302,112 | $ 215,947 |
Collaborative arrangements revenue | ||||
Revenues: | ||||
Revenue | 130,524 | 54,194 | 273,998 | 188,487 |
Allergan | North America | Collaborative arrangements revenue | ||||
Revenues: | ||||
Revenue | 85,107 | 52,724 | 225,390 | 184,133 |
Allergan | North America | Collaborative arrangements, LINZESS | ||||
Revenues: | ||||
Revenue | 84,565 | 52,261 | 223,831 | 182,675 |
Allergan | North America | Royalty | ||||
Revenues: | ||||
Revenue | $ 542 | $ 463 | $ 1,559 | $ 1,458 |
Collaboration, License, Co-Pr_8
Collaboration, License, Co-Promotion and Other Commercial Agreements - North America - Commercial Efforts (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Collaboration, License and Co-Promotion Agreements | ||||
Revenue | $ 131,167 | $ 65,686 | $ 302,112 | $ 215,947 |
Collaborative arrangements revenue | ||||
Collaboration, License and Co-Promotion Agreements | ||||
Revenue | 130,524 | 54,194 | 273,998 | 188,487 |
Collaborative arrangements, LINZESS | Allergan | U.S. | ||||
Collaboration, License and Co-Promotion Agreements | ||||
Revenue | 84,565 | 52,261 | 223,831 | 182,675 |
Selling, general and administrative costs incurred by the Company | (9,129) | (10,915) | (29,764) | (33,556) |
The Company's share of net profit | $ 75,436 | $ 41,346 | $ 194,067 | $ 149,119 |
Collaboration, License, Co-Pr_9
Collaboration, License, Co-Promotion and Other Commercial Agreements - North America - Royalty Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenues: | ||||
Revenue | $ 131,167 | $ 65,686 | $ 302,112 | $ 215,947 |
Collaborative arrangements revenue | ||||
Revenues: | ||||
Revenue | 130,524 | 54,194 | 273,998 | 188,487 |
Collaborative arrangements revenue | North America | Allergan | ||||
Revenues: | ||||
Revenue | 85,107 | 52,724 | 225,390 | 184,133 |
Royalty | North America | Allergan | ||||
Revenues: | ||||
Revenue | 542 | 463 | 1,559 | 1,458 |
Royalty | Canada and Mexico | Allergan | ||||
Revenues: | ||||
Revenue | $ 500 | $ 500 | $ 1,600 | $ 1,500 |
Collaboration, License, Co-P_10
Collaboration, License, Co-Promotion and Other Commercial Agreements - European and Other Territories (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Oct. 31, 2015 | Sep. 30, 2012 | |
Collaboration, License and Co-Promotion Agreements | ||||||
Revenue | $ 131,167 | $ 65,686 | $ 302,112 | $ 215,947 | ||
Collaborative arrangements revenue | ||||||
Collaboration, License and Co-Promotion Agreements | ||||||
Revenue | 130,524 | 54,194 | $ 273,998 | 188,487 | ||
License | Allergan | ||||||
Collaboration, License and Co-Promotion Agreements | ||||||
Royalty percentage, five years following the first commercial sale | upper-single digits | |||||
Annual royalty | 5 years | |||||
Royalty percentage, thereafter | low-double digits | |||||
Royalty percentage, expanded territory | lower-single digits | |||||
License | Allergan | Europe | ||||||
Collaboration, License and Co-Promotion Agreements | ||||||
Remaining milestone payment due upon the amendment to the license agreement | $ 42,500 | |||||
Revenue remaining performance obligation | $ 0 | |||||
Royalty | Allergan | Europe | ||||||
Collaboration, License and Co-Promotion Agreements | ||||||
Revenue | $ 500 | $ 200 | $ 1,200 | $ 800 |
Collaboration, License, Co-P_11
Collaboration, License, Co-Promotion and Other Commercial Agreements - Japan (Details) $ in Thousands | Aug. 01, 2019USD ($) | Nov. 30, 2009USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Dec. 31, 2017USD ($)payment | Dec. 31, 2016USD ($) |
Collaboration, License and Co-Promotion Agreements | ||||||||
Revenue | $ 131,167 | $ 65,686 | $ 302,112 | $ 215,947 | ||||
Astellas Pharma Inc. | Japan | ||||||||
Collaboration, License and Co-Promotion Agreements | ||||||||
Up-front fee received | $ 30,000 | |||||||
Astellas Pharma Inc. | Japan | Additional development milestones | ||||||||
Collaboration, License and Co-Promotion Agreements | ||||||||
Number of milestone payments | payment | 3 | |||||||
Total milestone payments to be received | $ 45,000 | |||||||
Collaborative arrangements revenue | ||||||||
Collaboration, License and Co-Promotion Agreements | ||||||||
Revenue | 130,524 | 54,194 | 273,998 | 188,487 | ||||
Collaborative arrangement, collaboration and license agreements | Astellas Pharma Inc. | Japan | ||||||||
Collaboration, License and Co-Promotion Agreements | ||||||||
Revenue | 10,059 | 10,059 | ||||||
Revenue remaining performance obligation | $ 20,400 | |||||||
Non-refundable upfront payment | $ 10,000 | |||||||
Collaborative arrangement, collaboration and license agreements, upfront fee | Astellas Pharma Inc. | Japan | ||||||||
Collaboration, License and Co-Promotion Agreements | ||||||||
Revenue | 10,000 | 10,000 | ||||||
Sale of active pharmaceutical ingredient | ||||||||
Collaboration, License and Co-Promotion Agreements | ||||||||
Revenue | 643 | 10,257 | 28,114 | 24,494 | ||||
Sale of active pharmaceutical ingredient | Astellas Pharma Inc. | Japan | ||||||||
Collaboration, License and Co-Promotion Agreements | ||||||||
Revenue | $ 0 | $ 9,501 | $ 27,468 | $ 23,738 | ||||
Revenue remaining performance obligation | $ 0 |
Collaboration, License, Co-P_12
Collaboration, License, Co-Promotion and Other Commercial Agreements - China, Hong Kong and Macau (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019USD ($)installment | Oct. 31, 2012 | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | |
Collaboration, License and Co-Promotion Agreements | ||||||
Revenue | $ 131,167 | $ 65,686 | $ 302,112 | $ 215,947 | ||
Collaborative arrangements revenue | ||||||
Collaboration, License and Co-Promotion Agreements | ||||||
Revenue | 130,524 | 54,194 | 273,998 | 188,487 | ||
Sale of active pharmaceutical ingredient | ||||||
Collaboration, License and Co-Promotion Agreements | ||||||
Revenue | 643 | 10,257 | 28,114 | 24,494 | ||
AstraZeneca | China, Hong Kong, and Macau | Collaborative arrangements revenue | ||||||
Collaboration, License and Co-Promotion Agreements | ||||||
Collaborative arrangement, significant financing component, transaction price | $ 2,600 | 2,600 | 2,600 | |||
Net cost sharing offset or incremental expense related to research and development expense | 800 | 800 | ||||
Collaborative arrangement, expected interest income | 2,600 | 2,600 | 2,600 | |||
AstraZeneca | China, Hong Kong, and Macau | Collaborative arrangement, collaboration and license agreements | ||||||
Collaboration, License and Co-Promotion Agreements | ||||||
Revenue | 32,401 | 32,401 | ||||
AstraZeneca | China, Hong Kong, and Macau | Collaborative arrangement, collaboration agreements | ||||||
Collaboration, License and Co-Promotion Agreements | ||||||
Milestone payment to be received by company upon milestone achievement | 90,000 | |||||
Amount of non-contingent arrangement consideration | $ 35,000 | |||||
Non-contingent consideration installments | installment | 3 | |||||
Percentage of tiered royalties | 20.00% | |||||
Revenue | 32,400 | 32,400 | ||||
AstraZeneca | China, Hong Kong, and Macau | Collaborative arrangement, transition services agreement | ||||||
Collaboration, License and Co-Promotion Agreements | ||||||
Regulatory and administrative services initial term | 2 years | |||||
AstraZeneca | China, Hong Kong, and Macau | Sale of active pharmaceutical ingredient | ||||||
Collaboration, License and Co-Promotion Agreements | ||||||
Revenue | 643 | 646 | ||||
AstraZeneca | China, Hong Kong, and Macau | Commercialization milestone | Collaborative arrangements revenue | ||||||
Collaboration, License and Co-Promotion Agreements | ||||||
Revenue | $ 0 | $ 0 | ||||
AstraZeneca | China, Hong Kong, and Macau | Commercialization milestone | Collaborative arrangement, collaboration agreements | ||||||
Collaboration, License and Co-Promotion Agreements | ||||||
Percentage of net loss from commercialization (as a percent) | 55.00% | |||||
Pre-launch commercial services and supply chain services | $ 700 | $ 1,200 |
Collaboration, License, Co-P_13
Collaboration, License, Co-Promotion and Other Commercial Agreements - Co-Promotion Agreements (Details) - USD ($) $ in Thousands | Aug. 09, 2019 | Sep. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 |
Collaboration, License and Co-Promotion Agreements | ||||||||
Revenue | $ 131,167 | $ 65,686 | $ 302,112 | $ 215,947 | ||||
Collaborative arrangements revenue | ||||||||
Collaboration, License and Co-Promotion Agreements | ||||||||
Revenue | 130,524 | 54,194 | 273,998 | 188,487 | ||||
Collaborative arrangement, co-promotion agreements | ||||||||
Collaboration, License and Co-Promotion Agreements | ||||||||
Revenue | 2,600 | |||||||
Collaborative arrangement, promotion agreements | ||||||||
Collaboration, License and Co-Promotion Agreements | ||||||||
Revenue | 1,400 | 1,400 | ||||||
Allergan | Collaborative arrangement, co-promotion agreements | ||||||||
Collaboration, License and Co-Promotion Agreements | ||||||||
Revenue | 1,363 | $ 1,300 | $ 750 | 2,602 | $ 2,250 | |||
Milestone payment to be received by company upon milestone achievement | $ 7,500 | |||||||
Collaborative arrangement compensated amount | $ 3,000 | |||||||
Allergan | Collaborative arrangement, promotion agreements | ||||||||
Collaboration, License and Co-Promotion Agreements | ||||||||
Milestone payment to be received by company upon milestone achievement | $ 4,200 | |||||||
Collaborative arrangement compensated amount | $ 4,100 | |||||||
Alnylam | Collaborative arrangement, co-promotion agreements | ||||||||
Collaboration, License and Co-Promotion Agreements | ||||||||
Revenue | 722 | 722 | ||||||
Alnylam | Collaborative arrangement, promotion agreements | ||||||||
Collaboration, License and Co-Promotion Agreements | ||||||||
Deferred revenue | $ 1,300 | 1,300 | ||||||
Revenue | 700 | |||||||
Total annual service fees due | $ 9,500 | |||||||
Term of agreement | 3 years | |||||||
Sales milestones | Allergan | Collaborative arrangement, co-promotion agreements | ||||||||
Collaboration, License and Co-Promotion Agreements | ||||||||
Milestone payment to be received by company upon milestone achievement | $ 3,000 |
Collaboration, License, Co-P_14
Collaboration, License, Co-Promotion and Other Commercial Agreements - Other Collaborations and License Agreements (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Collaboration, License and Co-Promotion Agreements | ||||
Research and development | $ 27,551 | $ 29,158 | $ 88,507 | $ 72,821 |
Collaborative arrangement, co-promotion and other agreements | ||||
Collaboration, License and Co-Promotion Agreements | ||||
Revenue related to nonrefundable upfront payments | 0 | 500 | ||
Collaborative arrangement, co-promotion and other agreements | Development and sales milestones | ||||
Collaboration, License and Co-Promotion Agreements | ||||
Maximum payment receivable under the milestone | 63,500 | 63,500 | ||
Collaborative arrangement, other agreements | ||||
Collaboration, License and Co-Promotion Agreements | ||||
Research and development | $ 0 | $ 5,000 | 0 | $ 5,000 |
Collaborative arrangement, other agreements | Development milestones | ||||
Collaboration, License and Co-Promotion Agreements | ||||
Contingent milestone payable | 7,500 | |||
Collaborative arrangement, other agreements | Regulatory milestones | ||||
Collaboration, License and Co-Promotion Agreements | ||||
Contingent milestone payable | 18,000 | |||
Milestone payment made | $ 0 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - General Information (Details) | Sep. 30, 2019 |
Fair Value of Financial Instruments | |
Threshold percentage of collateralized value (as a percent) | 102.00% |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Measured on Recurring Basis (Details) - Recurring basis - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Assets: | ||
Convertible note hedges | $ 11,357 | $ 41,020 |
Total assets measured at fair value | 150,364 | 214,113 |
Liabilities: | ||
Note hedge warrants | 8,768 | 33,763 |
Contingent consideration | 51 | |
Total liabilities measured at fair value | 8,768 | 33,814 |
Money market funds | ||
Assets: | ||
Cash and cash equivalents | 101,207 | 142,218 |
Repurchase agreements | ||
Assets: | ||
Cash and cash equivalents | 37,800 | 30,875 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Assets: | ||
Total assets measured at fair value | 139,007 | 173,093 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Money market funds | ||
Assets: | ||
Cash and cash equivalents | 101,207 | 142,218 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Repurchase agreements | ||
Assets: | ||
Cash and cash equivalents | 37,800 | 30,875 |
Significant Unobservable Inputs (Level 3) | ||
Assets: | ||
Convertible note hedges | 11,357 | 41,020 |
Total assets measured at fair value | 11,357 | 41,020 |
Liabilities: | ||
Note hedge warrants | 8,768 | 33,763 |
Contingent consideration | 51 | |
Total liabilities measured at fair value | $ 8,768 | $ 33,814 |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments - Transfers Between Fair Value Measurement Levels (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Fair value transfers | ||||
Fair value transfer between measurement levels | $ 0 | $ 0 | $ 0 | $ 0 |
Fair Value of Financial Instr_6
Fair Value of Financial Instruments - Assumptions - Convertible Note Hedges (Details) | Sep. 30, 2019$ / sharesY | Dec. 31, 2018$ / sharesY |
Fair Value of Financial Instruments | ||
Derivative asset, valuation technique | us-gaap:ValuationTechniqueOptionPricingModelMember | us-gaap:ValuationTechniqueOptionPricingModelMember |
Measurement Input, Risk Free Interest Rate | ||
Fair Value of Financial Instruments | ||
Derivative asset, measurement input | 0.016 | 0.025 |
Measurement Input, Expected Term | ||
Fair Value of Financial Instruments | ||
Derivative asset, measurement input | Y | 2.7 | 3.5 |
Measurement Input, Share Price | ||
Fair Value of Financial Instruments | ||
Derivative asset, measurement input | 8.59 | 10.36 |
Measurement Input, Exercise Price | ||
Fair Value of Financial Instruments | ||
Derivative asset, measurement input | 14.51 | 16.58 |
Measurement Input, Price Volatility | ||
Fair Value of Financial Instruments | ||
Derivative asset, measurement input | 0.478 | 0.438 |
Measurement Input, Expected Dividend Rate | ||
Fair Value of Financial Instruments | ||
Derivative asset, measurement input | 0 | 0 |
Fair Value of Financial Instr_7
Fair Value of Financial Instruments - Assumptions - Note Hedge Warrants (Details) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019USD ($)Y$ / shares | Sep. 30, 2019USD ($)Y$ / shares | Sep. 16, 2019USD ($) | Aug. 31, 2019USD ($) | Dec. 31, 2018$ / sharesY | |
Fair Value of Financial Instruments | |||||
(Loss) gain on derivatives | $ 4.8 | ||||
Derivative liability, valuation technique | us-gaap:ValuationTechniqueOptionPricingModelMember | us-gaap:ValuationTechniqueOptionPricingModelMember | us-gaap:ValuationTechniqueOptionPricingModelMember | ||
2.25% Convertible Senior Notes due 2022 | Convertible Senior Notes | |||||
Fair Value of Financial Instruments | |||||
Debt redeemed/repurchased | $ 215 | $ 215 | |||
Debt redemption/repurchase price | $ 227.3 | ||||
Warrants | |||||
Fair Value of Financial Instruments | |||||
(Loss) gain on derivatives | $ (4.8) | $ (1.5) | |||
Measurement Input, Risk Free Interest Rate | |||||
Fair Value of Financial Instruments | |||||
Derivative liability, measurement input | 0.016 | 0.016 | 0.025 | ||
Measurement Input, Expected Term | |||||
Fair Value of Financial Instruments | |||||
Derivative liability, measurement input | Y | 3.3 | 3.3 | 4.1 | ||
Measurement Input, Share Price | |||||
Fair Value of Financial Instruments | |||||
Derivative liability, measurement input | $ / shares | 8.59 | 8.59 | 10.36 | ||
Measurement Input, Exercise Price | |||||
Fair Value of Financial Instruments | |||||
Derivative liability, measurement input | $ / shares | 18.82 | 18.82 | 21.50 | ||
Measurement Input, Price Volatility | |||||
Fair Value of Financial Instruments | |||||
Derivative liability, measurement input | 0.465 | 0.465 | 0.436 | ||
Measurement Input, Expected Dividend Rate | |||||
Fair Value of Financial Instruments | |||||
Derivative liability, measurement input | 0 | 0 | 0 |
Fair Value of Financial Instr_8
Fair Value of Financial Instruments - Change in Level 3 - Convertible Note Hedges (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Change in Level 3 Assets | |
Balance at beginning of period | $ 41,020 |
Cash settlement (received) paid upon early termination of derivatives | (28,909) |
Change in fair value, recorded as a component of gain (loss) on derivatives | (754) |
Balance at end of period | $ 11,357 |
Fair Value of Financial Instr_9
Fair Value of Financial Instruments - Change in Level 3 - Note Hedge Warrants (Details) - Warrants $ in Thousands | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Change in Level 3 Liabilities | |
Balance at beginning of period | $ (33,763) |
Cash settlement (received) paid upon early termination of derivatives | 25,735 |
Change in fair value, recorded as a component of gain (loss) on derivatives | (740) |
Balance at end of period | $ (8,768) |
Fair Value of Financial Inst_10
Fair Value of Financial Instruments - Notes Payable (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Sep. 16, 2019 | Aug. 31, 2019 | Aug. 12, 2019 | Dec. 31, 2018 | Sep. 23, 2016 | Jun. 30, 2015 |
Notes Payable | 8.375% Notes due 2026 | |||||||
Fair value disclosures | |||||||
Stated interest rate (as a percent) | 8.375% | 8.375% | |||||
Debt Instrument, Repurchased Face Amount | $ 116,500 | ||||||
Aggregate principal amount of notes issued | $ 150,000 | ||||||
Notes Payable | 8.375% Notes due 2026 | Significant Unobservable Inputs (Level 3) | |||||||
Fair value disclosures | |||||||
Estimated fair value | $ 148,200 | ||||||
Convertible Senior Notes | 2.25% Convertible Senior Notes due 2022 | |||||||
Fair value disclosures | |||||||
Stated interest rate (as a percent) | 2.25% | 2.25% | |||||
Debt Instrument, Repurchased Face Amount | $ 215,000 | $ 215,000 | |||||
Aggregate principal amount of notes issued | $ 120,699 | 335,699 | $ 335,700 | ||||
Convertible Senior Notes | 2.25% Convertible Senior Notes due 2022 | Significant Other Observable Inputs (Level 2) | |||||||
Fair value disclosures | |||||||
Estimated fair value | 120,000 | $ 315,000 | |||||
Convertible Senior Notes | 0.75% Convertible Senior Notes due 2024 | |||||||
Fair value disclosures | |||||||
Stated interest rate (as a percent) | 0.75% | ||||||
Aggregate principal amount of notes issued | 200,000 | 200,000 | $ 200,000 | ||||
Convertible Senior Notes | 0.75% Convertible Senior Notes due 2024 | Significant Other Observable Inputs (Level 2) | |||||||
Fair value disclosures | |||||||
Estimated fair value | 185,900 | ||||||
Convertible Senior Notes | 1.50% Convertible Senior Notes due 2026 | |||||||
Fair value disclosures | |||||||
Stated interest rate (as a percent) | 1.50% | ||||||
Aggregate principal amount of notes issued | 200,000 | $ 200,000 | $ 200,000 | ||||
Convertible Senior Notes | 1.50% Convertible Senior Notes due 2026 | Significant Other Observable Inputs (Level 2) | |||||||
Fair value disclosures | |||||||
Estimated fair value | $ 183,600 |
Fair Value of Financial Inst_11
Fair Value of Financial Instruments - Capped Calls in connection with issuance of 2024 Convertible Notes and the 2026 Convertible Notes (Details) - Capped Calls | 1 Months Ended |
Aug. 31, 2019$ / shares$ / itemshares | |
Capped Calls | |
Number of shares covered by capped calls (in shares) | shares | 29,867,480 |
Strike price (in dollars per share) | $ / shares | $ 13.39 |
Cap price | $ / item | 17.05 |
Fair Value of Financial Inst_12
Fair Value of Financial Instruments - Nonrecurring Fair Value Measurements - Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2018 | Sep. 30, 2018 | |
Impairment of Intangible Assets (Excluding Goodwill) [Abstract] | ||
Impairment of intangible assets | $ 151,794 | $ 151,794 |
Inventory - Tabular Disclosure
Inventory - Tabular Disclosure (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Inventory | |
Raw Materials | $ 1,134 |
Work in Progress | 707 |
Finished Goods | 457 |
Total | $ 2,298 |
Inventory - General Information
Inventory - General Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Inventory | ||||
Write-down of inventory | $ 0 | $ 2.5 | $ 0 | |
Lesinurad | ||||
Inventory | ||||
Write-down of inventory | $ 0.6 | |||
Commercial and Sample Supply Commitments | ||||
Inventory | ||||
Write-down of inventory | $ 2.5 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities - Tabular Disclosure (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Accrued Expenses | ||
Salaries | $ 1,703 | $ 3,054 |
Accrued vacation | 2,647 | 3,493 |
Accrued incentive compensation | 8,647 | 13,867 |
Other employee benefits | 1,340 | 1,883 |
Professional fees | 5,177 | 1,735 |
Accrued interest | 1,392 | 873 |
Restructuring accruals | 432 | 2,885 |
Other | 9,191 | 10,211 |
Total accrued expenses and other current liabilities | $ 30,529 | $ 38,001 |
Accrued Expenses and Other Cu_4
Accrued Expenses and Other Current Liabilities - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Accrued Expenses | |||||
Other accrued expenses | $ 9,191 | $ 9,191 | $ 10,211 | ||
Move activities | 4,000 | 4,000 | |||
Unbilled inventories | 1,200 | 1,200 | |||
Other accrued expenses contracted services | 700 | 700 | |||
Recorded settlement | 3,500 | ||||
Write-down of inventory | 0 | $ 2,500 | 0 | ||
Lesinurad | |||||
Accrued Expenses | |||||
Write-down of inventory | $ 600 | ||||
Commercial and Sample Supply Commitments | |||||
Accrued Expenses | |||||
Write-down of inventory | $ 2,500 | ||||
Write-down of excess non-cancellable sample purchase commitments | 1,400 | ||||
Commercial and Sample Supply Commitments | Linaclotide | |||||
Accrued Expenses | |||||
Accrued non-cancelable purchase | 4,000 | 4,000 | |||
Commercial and Sample Supply Commitments | Linaclotide | Accrued Expenses and Other Current Liabilities | |||||
Accrued Expenses | |||||
Accrual for non-cancellable purchase commitments | $ 2,500 | ||||
Commercial and Sample Supply Commitments | Linaclotide | Other Current Liabilities | |||||
Accrued Expenses | |||||
Accrued non-cancelable purchase | $ 2,500 | $ 2,500 |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Lease cost | ||
Operating lease cost during period | $ 6,244 | $ 13,924 |
Variable lease payments | 654 | 1,308 |
Short-term lease cost | 375 | 1,143 |
Total lease cost | $ 7,273 | 16,375 |
Sublease income | $ 300 |
Leases - Operating Leases - Sup
Leases - Operating Leases - Supplemental Cash Flow Information (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Operating leases | |
Right-of-use assets obtained in exchange for new operating lease upon adoption of ASC 842 | $ 88,299 |
Adjustment to right-of-use assets as a result of the lease modification at the Separation date | (40,427) |
Adjustment to right-of-use assets as a result of the termination of the Binney Street Lease | (34,440) |
Right-of-use assets obtained in exchange for new operating lease liabilities | 18,452 |
Cash paid for amounts included in the measurement of lease liabilities | $ 8,869 |
Weighted-average remaining lease term of operating leases (in years) | 8 years |
Weighted-average discount rate of operating leases (as a percent) | 5.40% |
Leases - Operating Leases - Fut
Leases - Operating Leases - Future Minimum Lease Payments - ASC 842 (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Future minimum lease payments | |
2019 | $ 9,729 |
2020 | 1,146 |
2021 | 3,128 |
2022 | 3,129 |
2023 | 3,065 |
2024 and thereafter | 21,170 |
Total future minimum lease payments | $ 41,367 |
Leases - Operating Leases - Ope
Leases - Operating Leases - Operating Lease Obligations (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Jan. 01, 2019 |
Operating lease obligations | ||
Total future minimum lease payments | $ 41,367 | |
Less: present value adjustment | 8,773 | |
Operating lease liabilities | 32,594 | $ 94,900 |
Less: current portion of operating lease obligations | 9,934 | |
Operating lease liabilities, net of current portion | $ 22,660 |
Leases - Operating Leases - F_2
Leases - Operating Leases - Future Minimum Lease Payments - ASC 840 (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Future minimum lease payments | |
2019 | $ 18,736 |
2020 | 18,312 |
2021 | 18,863 |
2022 | 19,365 |
2023 | 19,818 |
2024 and thereafter | 22,118 |
Total future minimum lease payments | $ 117,212 |
Leases - Operating Leases - Sum
Leases - Operating Leases - Summer Street Lease (Details) - USD ($) $ in Thousands | Jun. 11, 2019 | Sep. 30, 2019 | Sep. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Operating leases | |||||
Restricted cash, noncurrent | $ 971 | $ 971 | $ 6,426 | ||
Operating lease right-of-use assets | $ 19,793 | $ 19,793 | $ 88,300 | ||
Weighted-average discount rate of operating leases (as a percent) | 5.40% | 5.40% | |||
Operating lease cost | $ 6,244 | $ 13,924 | |||
Summer Street Lease | |||||
Operating leases | |||||
Option to extend the term of the lease | true | ||||
Operating lease, renewal term | 5 years | ||||
Annual rent escalation (as a percent) | 2.00% | ||||
Restricted cash, noncurrent | 1,000 | 1,000 | |||
Operating lease right-of-use assets | 18,000 | 18,000 | |||
Lease liability, net of tenant improvement allowance reimbursement | $ 22,500 | $ 22,500 | |||
Weighted-average discount rate of operating leases (as a percent) | 5.80% | 5.80% | |||
Asset retirement obligation | $ 500 | $ 500 | |||
Operating lease cost | $ 600 | $ 800 |
Leases - Operating Leases - Bin
Leases - Operating Leases - Binney Street Lease (Details) $ in Thousands | Jun. 11, 2019USD ($)ft² | Apr. 01, 2019ft² | Jan. 31, 2007USD ($)ft² | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Jan. 01, 2019USD ($) | Dec. 31, 2018USD ($) |
Operating leases | |||||||||
Restricted cash, noncurrent | $ 971 | $ 971 | $ 6,426 | ||||||
Operating lease right-of-use assets | 19,793 | 19,793 | $ 88,300 | ||||||
Lease liability | $ 32,594 | $ 32,594 | 94,900 | ||||||
Weighted-average discount rate of operating leases (as a percent) | 5.40% | 5.40% | |||||||
Operating lease cost | $ 6,244 | $ 13,924 | |||||||
Sublease income | 300 | ||||||||
Binney Street Lease | |||||||||
Operating leases | |||||||||
Rentable area leased (in square feet) | ft² | 108,000 | 108,000 | 223,000 | ||||||
Option to extend the term of the lease | true | ||||||||
Operating lease, renewal term | 5 years | ||||||||
Annual rent escalation (as a percent) | 3.00% | ||||||||
Restricted cash, noncurrent | $ 6,400 | ||||||||
Operating lease right-of-use assets | 1,800 | 1,800 | 87,700 | ||||||
Lease liability | 9,700 | 9,700 | $ 94,300 | ||||||
Surrendered space (in square feet) | ft² | 114,000 | ||||||||
Weighted-average discount rate of operating leases (as a percent) | 4.00% | 5.10% | |||||||
Gain on modification of lease | 3,200 | ||||||||
Lease termination cost | $ 9,000 | ||||||||
Operating lease cost | 6,200 | $ 14,300 | |||||||
Sublease income | $ 300 | ||||||||
Rent expense | $ 2,500 | $ 7,600 |
Leases - Operating Leases - Dat
Leases - Operating Leases - Data center colocation lease (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Sep. 30, 2019 | Jan. 01, 2019 | |
Operating leases | |||
Operating lease right-of-use assets | $ 19,793 | $ 88,300 | |
Lease liability | $ 32,594 | 94,900 | |
Asset impairment charge | |||
Weighted-average discount rate of operating leases (as a percent) | 5.40% | ||
Data Center Lease, Boston, Massachusetts | |||
Operating leases | |||
Annual rent escalation (as a percent) | 4.00% | ||
Operating lease right-of-use assets | $ 0 | 600 | |
Lease liability | $ 500 | $ 600 | |
Asset impairment charge | |||
Weighted-average discount rate of operating leases (as a percent) | 6.00% | ||
Data Center Lease, Boston, Massachusetts | Selling, general and administrative | |||
Asset impairment charge | |||
Asset impairment charge | $ 500 |
Leases - Operating Leases - Veh
Leases - Operating Leases - Vehicle fleet leases (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Apr. 30, 2018 | |
Operating leases | ||||||
Restricted cash, noncurrent | $ 971 | $ 971 | $ 6,426 | |||
Operating lease cost | 6,244 | 13,924 | ||||
Vehicles, 2018 Vehicle Leases | ||||||
Operating leases | ||||||
Operating lease, term | 12 months | |||||
Operating lease, renewal term | 1 month | |||||
Restricted cash, noncurrent | $ 1,300 | |||||
Operating lease cost | $ 400 | $ 400 | $ 1,100 | $ 400 | ||
Vehicles | ||||||
Operating leases | ||||||
Capital lease obligations | $ 0 |
Leases - Other Leases (Details)
Leases - Other Leases (Details) - Computer and office equipment, under capital lease $ in Millions | Dec. 31, 2018USD ($) |
Capital leases | |
Capital lease obligations | $ 0.2 |
Weighted average interest rate on the outstanding capital lease obligations (as a percent) | 3.40% |
Notes Payable - 8.375% Notes du
Notes Payable - 8.375% Notes due 2026 - General Information (Details) - USD ($) $ in Thousands | Sep. 23, 2016 | Sep. 30, 2019 | Aug. 31, 2019 | Sep. 30, 2019 | Sep. 30, 2019 | Sep. 16, 2019 | Dec. 31, 2018 | Jun. 30, 2015 |
Notes Payable | ||||||||
Proceeds from partial termination of convertible note hedges and warrants | $ 3,200 | $ 3,174 | ||||||
Loss on extinguishment of debt | $ 30,977 | 30,977 | ||||||
Equity component of convertible senior notes | 92,502 | |||||||
Debt issuance costs capitalized | $ 8,339 | 8,339 | 8,339 | |||||
Convertible Senior Notes | ||||||||
Notes Payable | ||||||||
Debt issuance costs capitalized | $ 8,339 | $ 8,339 | $ 8,339 | $ 5,004 | ||||
8.375% Notes due 2026 | Notes Payable | ||||||||
Notes Payable | ||||||||
Aggregate principal amount of notes issued | $ 150,000 | |||||||
Stated interest rate (as a percent) | 8.375% | 8.375% | 8.375% | 8.375% | ||||
Debt redeemed/repurchased | $ 116,500 | |||||||
Debt redemption/repurchase price | $ 123,000 | |||||||
Loss on extinguishment of debt | $ 7,600 | $ 31,000 | ||||||
Debt issuance costs capitalized | $ 500 | |||||||
Percentage of net sales to determine quarterly payments (as a percent) | 7.50% | |||||||
2.25% Convertible Senior Notes due 2022 | Convertible Senior Notes | ||||||||
Notes Payable | ||||||||
Aggregate principal amount of notes issued | $ 120,699 | $ 120,699 | $ 120,699 | $ 335,699 | $ 335,700 | |||
Stated interest rate (as a percent) | 2.25% | 2.25% | ||||||
Debt redeemed/repurchased | 215,000 | $ 215,000 | ||||||
Debt redemption/repurchase price | 227,300 | |||||||
Loss on extinguishment of debt | 23,400 | |||||||
Equity component of convertible senior notes | $ (27,000) |
Notes Payable - 2.25% Convertib
Notes Payable - 2.25% Convertible Senior Notes due 2022 - General Information (Details) | Apr. 15, 2019USD ($)$ / sharesshares | Aug. 31, 2019USD ($) | Jun. 30, 2015USD ($)D$ / sharesshares | Sep. 30, 2019USD ($)$ / sharesshares | Sep. 16, 2019 | Dec. 31, 2018USD ($) |
Notes Payable | ||||||
Payments for convertible note hedges | $ 25,200,000 | $ 21,100,000 | ||||
Debt issuance costs capitalized | $ 8,339,000 | |||||
Net proceeds received | $ 400,000,000 | |||||
Note Hedge Warrants | ||||||
Notes Payable | ||||||
Warrants strike price (in dollars per share) | $ / shares | $ 18.82 | $ 21.50 | ||||
Convertible Note Hedge | ||||||
Notes Payable | ||||||
Conversion price (in dollars per share) | $ / shares | $ 14.51 | $ 16.58 | ||||
Shares issuable upon conversion of debt (in shares) | shares | 20,249,665 | |||||
Convertible Senior Notes | ||||||
Notes Payable | ||||||
Debt issuance costs capitalized | $ 8,339,000 | $ 5,004,000 | ||||
2.25% Convertible Senior Notes due 2022 | Note Hedge Warrants | ||||||
Notes Payable | ||||||
Shares issuable upon conversion of debt (in shares) | shares | 23,135,435 | |||||
2.25% Convertible Senior Notes due 2022 | Convertible Senior Notes | ||||||
Notes Payable | ||||||
Aggregate principal amount of notes issued | 335,700,000 | $ 120,699,000 | $ 335,699,000 | |||
Net proceed received | 324,000,000 | |||||
Fees and expenses | $ 11,700,000 | |||||
Stated interest rate (as a percent) | 2.25% | 2.25% | ||||
Conversion rate, number of shares to be issued per | 68.9172 | 60.3209 | ||||
Principal amount used for debt instrument conversion ratio | $ 1,000 | $ 1,000 | ||||
Conversion price (in dollars per share) | $ / shares | $ 14.51 | $ 16.58 | ||||
Shares issuable upon conversion of debt (in shares) | shares | 23,135,435 | 20,249,665 | ||||
Number of trading days | D | 20 | |||||
Consecutive trading days | D | 30 | |||||
Minimum percentage of stock price | 130.00% | |||||
Number of business days immediately after any five consecutive trading day period during the measurement period | D | 5 | |||||
Number of consecutive trading days before five business days during the measurement period | D | 5 | |||||
Repurchase price, as percentage of principal amount, if company undergoes change of control | 100.00% | |||||
Maximum period of the sole remedy for event failures in the Indenture | 180 days | |||||
Amortization period | 7 years | |||||
2.25% Convertible Senior Notes due 2022 | Convertible Senior Notes | Minimum | ||||||
Notes Payable | ||||||
Percentage of aggregate principal amount payable, in case of event of default | 25.00% | |||||
2.25% Convertible Senior Notes due 2022 | Convertible Senior Notes | Maximum | ||||||
Notes Payable | ||||||
Percentage of the trading price to the product of the sale price of the entity's common stock and the conversion rate | 98.00% |
Notes Payable - 2.25% Convert_2
Notes Payable - 2.25% Convertible Senior Notes due 2022 - Balances (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Aug. 31, 2019 | Aug. 12, 2019 | Dec. 31, 2018 | Jun. 30, 2015 |
Liability component: | |||||
Long-term Debt, Gross | $ 556,633 | ||||
Less: unamortized debt discount | (109,685) | ||||
Less: unamortized debt issuance costs | (8,339) | ||||
Net carrying amount | 402,675 | ||||
Convertible Senior Notes | |||||
Liability component: | |||||
Less: unamortized debt discount | (109,685) | $ (65,094) | |||
Less: unamortized debt issuance costs | (8,339) | (5,004) | |||
Net carrying amount | 402,675 | 265,601 | |||
Equity component | 112,309 | 114,199 | |||
2.25% Convertible Senior Notes due 2022 | Convertible Senior Notes | |||||
Liability component: | |||||
Aggregate principal amount of notes issued | 120,699 | 335,699 | $ 335,700 | ||
Equity component | 19,807 | $ 114,199 | |||
0.75% Convertible Senior Notes due 2024 | Convertible Senior Notes | |||||
Liability component: | |||||
Aggregate principal amount of notes issued | 200,000 | $ 200,000 | $ 200,000 | ||
Equity component | 41,152 | ||||
1.50% Convertible Senior Notes due 2026 | Convertible Senior Notes | |||||
Liability component: | |||||
Aggregate principal amount of notes issued | 200,000 | $ 200,000 | $ 200,000 | ||
Equity component | $ 51,350 |
Notes Payable - 2.25% Convert_3
Notes Payable - 2.25% Convertible Senior Notes due 2022 - Additional Information (Details) - 2.25% Convertible Senior Notes due 2022 - Convertible Senior Notes - USD ($) $ in Millions | 1 Months Ended | ||
Jun. 30, 2015 | Sep. 30, 2019 | Sep. 29, 2019 | |
Notes Payable | |||
Debt issuance costs incurred | $ 11.7 | ||
Debt issuance costs allocated to equity components | 4 | ||
Debt issuance costs allocated to liability components | $ 7.7 | ||
Debt instrument term | 7 years | ||
Effective interest rate on liability components | 9.37% | 9.34% |
Notes Payable - 2.25% Convert_4
Notes Payable - 2.25% Convertible Senior Notes due 2022 - Total Interest Expense (Details) - 2.25% Convertible Senior Notes due 2022 - Convertible Senior Notes - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Interest Expense | ||||
Contractual interest expense | $ 1,780 | $ 1,889 | $ 5,557 | $ 5,665 |
Amortization of debt issuance costs | 301 | 249 | 856 | 712 |
Amortization of debt discount | 4,460 | 3,900 | 12,699 | 11,450 |
Total interest expense | $ 6,541 | $ 6,038 | $ 19,112 | $ 17,827 |
Notes Payable - 2.25% Convert_5
Notes Payable - 2.25% Convertible Senior Notes due 2022 - Future Minimum Payments (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Future minimum payments of Convertible senior notes | ||
2019 | $ 2,895 | |
2020 | 7,216 | |
2021 | 7,216 | |
2022 | 126,556 | |
2023 | 4,500 | |
2024 | 203,750 | |
Thereafter | 204,500 | |
Total future minimum payments under the convertible senior notes | 556,633 | |
Less: amounts representing interest | (35,934) | |
Less: unamortized debt discount | (109,685) | |
Less: unamortized debt issuance costs | (8,339) | |
Net carrying amount | 402,675 | |
Convertible Senior Notes | ||
Future minimum payments of Convertible senior notes | ||
Less: unamortized debt discount | (109,685) | $ (65,094) |
Less: unamortized debt issuance costs | (8,339) | (5,004) |
Net carrying amount | $ 402,675 | $ 265,601 |
Notes Payable - 0.75% Convertib
Notes Payable - 0.75% Convertible Senior Notes due 2024 and 1.50% Convertible Senior Notes due 2026 (Details) | Aug. 12, 2019USD ($) | Aug. 07, 2019USD ($)$ / shares | Apr. 15, 2019USD ($)$ / sharesshares | Aug. 31, 2019USD ($)D | Jun. 30, 2015USD ($)D$ / sharesshares | Sep. 30, 2019USD ($) | Sep. 16, 2019 | Dec. 31, 2018USD ($) |
Notes Payable | ||||||||
Payments for convertible note hedges | $ 25,200,000 | $ 21,100,000 | ||||||
Repurchase price | 100.00% | |||||||
The percentage of aggregate principal amount of notes outstanding and payable in case of event of default under the agreement. | 25.00% | |||||||
2.25% Convertible Senior Notes due 2022 | Convertible Senior Notes | ||||||||
Notes Payable | ||||||||
Aggregate principal amount of notes issued | 335,700,000 | $ 120,699,000 | $ 335,699,000 | |||||
Net proceed received | 324,000,000 | |||||||
Fees and expenses | $ 11,700,000 | |||||||
Stated interest rate (as a percent) | 2.25% | 2.25% | ||||||
Conversion rate, number of shares to be issued per | 68.9172 | 60.3209 | ||||||
Principal amount used for debt instrument conversion ratio | $ 1,000 | $ 1,000 | ||||||
Initial conversion price (in dollars per share) | $ / shares | $ 14.51 | $ 16.58 | ||||||
Shares issuable upon conversion of debt (in shares) | shares | 23,135,435 | 20,249,665 | ||||||
Number of trading days | D | 20 | |||||||
Consecutive trading days | D | 30 | |||||||
Minimum percentage of stock price | 130.00% | |||||||
Number of business days immediately after any five consecutive trading day period during the measurement period | D | 5 | |||||||
Number of consecutive trading days before five business days during the measurement period | D | 5 | |||||||
Repurchase price, as percentage of principal amount, if company undergoes change of control | 100.00% | |||||||
Amortization period | 7 years | |||||||
2.25% Convertible Senior Notes due 2022 | Convertible Senior Notes | Minimum | ||||||||
Notes Payable | ||||||||
Percentage of aggregate principal amount payable, in case of event of default | 25.00% | |||||||
2.25% Convertible Senior Notes due 2022 | Convertible Senior Notes | Maximum | ||||||||
Notes Payable | ||||||||
Percentage of the trading price to the product of the sale price of the entity's common stock and the conversion rate | 98.00% | |||||||
0.75% Convertible Senior Notes due 2024 and 1.50% Convertible Senior Notes due 2026 | Convertible Senior Notes | ||||||||
Notes Payable | ||||||||
Net proceed received | $ 391,000,000 | |||||||
Fees and expenses | 9,000,000 | |||||||
Conversion rate, number of shares to be issued per | 74.6687 | |||||||
Principal amount used for debt instrument conversion ratio | $ 1,000 | $ 1,000 | ||||||
Initial conversion price (in dollars per share) | $ / shares | $ 13.39 | |||||||
Conversion premium percentage on sale price of commonstock | 37.50% | |||||||
Share Price | $ / shares | $ 9.74 | |||||||
Number of consecutive trading days before five business days during the measurement period | D | 5 | |||||||
0.75% Convertible Senior Notes due 2024 and 1.50% Convertible Senior Notes due 2026 | Convertible Senior Notes | Calendar quarter commencing after December 31, 2019 | ||||||||
Notes Payable | ||||||||
Number of trading days | D | 20 | |||||||
Consecutive trading days | D | 30 | |||||||
0.75% Convertible Senior Notes due 2024 and 1.50% Convertible Senior Notes due 2026 | Convertible Senior Notes | Measurement period | ||||||||
Notes Payable | ||||||||
Number of business days immediately after any five consecutive trading day period during the measurement period | D | 5 | |||||||
0.75% Convertible Senior Notes due 2024 and 1.50% Convertible Senior Notes due 2026 | Convertible Senior Notes | Minimum | Calendar quarter commencing after December 31, 2019 | ||||||||
Notes Payable | ||||||||
Minimum percentage of stock price | 130.00% | |||||||
0.75% Convertible Senior Notes due 2024 and 1.50% Convertible Senior Notes due 2026 | Convertible Senior Notes | Maximum | Measurement period | ||||||||
Notes Payable | ||||||||
Conversion premium percentage on sale price of commonstock | 98.00% | |||||||
0.75% Convertible Senior Notes due 2024 | Convertible Senior Notes | ||||||||
Notes Payable | ||||||||
Aggregate principal amount of notes issued | $ 200,000,000 | $ 200,000,000 | 200,000,000 | |||||
Stated interest rate (as a percent) | 0.75% | |||||||
Amortization period | 5 years | |||||||
1.50% Convertible Senior Notes due 2026 | Convertible Senior Notes | ||||||||
Notes Payable | ||||||||
Aggregate principal amount of notes issued | $ 200,000,000 | $ 200,000,000 | $ 200,000,000 | |||||
Stated interest rate (as a percent) | 1.50% | |||||||
Amortization period | 7 years |
Notes Payable - 2.25% Convert_6
Notes Payable - 2.25% Convertible Senior Notes due 2022, 0.75% Convertible Senior Notes due 2024 and 1.50% Convertible Senior Notes due 2026 (Details) - USD ($) $ in Millions | 1 Months Ended | |||
Aug. 31, 2019 | Jun. 30, 2015 | Sep. 30, 2019 | Sep. 29, 2019 | |
2.25% Convertible Senior Notes due 2022 | Convertible Senior Notes | ||||
Debt Instruments [Abstract] | ||||
Debt issuance costs incurred | $ 11.7 | |||
Debt issuance costs allocated to equity components | 4 | |||
Debt issuance costs allocated to liability components | $ 7.7 | |||
Debt instrument term | 7 years | |||
Effective interest rate on liability components | 9.37% | 9.34% | ||
0.75% Convertible Senior Notes due 2024 and 1.50% Convertible Senior Notes due 2026 | Convertible Senior Notes | ||||
Debt Instruments [Abstract] | ||||
Debt issuance costs incurred | $ 9 | |||
Debt issuance costs allocated to equity components | 2.1 | |||
Debt issuance costs allocated to liability components | $ 6.9 | |||
0.75% Convertible Senior Notes due 2024 | Convertible Senior Notes | ||||
Debt Instruments [Abstract] | ||||
Debt instrument term | 5 years | |||
Effective interest rate on liability components | 6.10% | |||
1.50% Convertible Senior Notes due 2026 | ||||
Debt Instruments [Abstract] | ||||
Effective interest rate on liability components | 6.50% | |||
1.50% Convertible Senior Notes due 2026 | Convertible Senior Notes | ||||
Debt Instruments [Abstract] | ||||
Debt instrument term | 7 years |
Notes Payable - Convertible Not
Notes Payable - Convertible Note Hedge and Warrant Transactions (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2015 | Sep. 30, 2019 | Sep. 30, 2019 | Apr. 15, 2019 | Dec. 31, 2018 | |
Notes Payable | |||||
Long-term asset | $ 11,357 | $ 11,357 | $ 41,020 | ||
Long-term liability | 8,768 | $ 8,768 | $ 33,763 | ||
Net derivative issuance cost | $ 21,100 | ||||
(Loss) gain on derivatives | $ 4,800 | ||||
Convertible Note Hedge | |||||
Notes Payable | |||||
Shares issuable upon conversion of debt (in shares) | 20,249,665 | ||||
Conversion price (in dollars per share) | $ 16.58 | $ 16.58 | $ 14.51 | ||
Long-term asset | 91,900 | ||||
Note Hedge Warrant Derivatives | |||||
Notes Payable | |||||
Shares into which warrants may be converted (in shares) | 20,249,665 | 20,249,665 | |||
Trading day period | 150 days | ||||
Long-term liability | $ 70,800 | ||||
Note Hedge Warrants | |||||
Notes Payable | |||||
Warrants strike price (in dollars per share) | $ 21.50 | $ 21.50 | $ 18.82 |
Notes Payable - Capped Calls wi
Notes Payable - Capped Calls with Respect to 2024 Convertible Notes and 2026 Convertible Notes (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended |
Aug. 31, 2019USD ($)$ / shares$ / itemshares | Sep. 30, 2019USD ($) | |
Capped Calls | ||
Purchase of capped calls | $ 25,159 | |
Equity component of issuance costs for convertible senior notes | $ 2,092 | |
Capped Calls | ||
Capped Calls | ||
Payment made to enter into Capped Calls | $ 25,200 | |
Strike price (in dollars per share) | $ / shares | $ 13.39 | |
Cap price | $ / item | 17.05 | |
Percentage of cap premium (as a percent) | 75.00% | |
Number of shares covered by capped calls (in shares) | shares | 29,867,480 | |
Purchase of capped calls | $ 25,000 | |
Equity component of issuance costs for convertible senior notes | $ 200 |
Employee Stock Benefit Plans -
Employee Stock Benefit Plans - Equity Plan (Details) - 2019 Equity Plan | May 31, 2019shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares reserved for issuance (in shares) | 10,000,000 |
Shares available for future grant (in shares) | 11,276,185 |
Employee Stock Benefit Plans _2
Employee Stock Benefit Plans - Share-based Compensation Reflected in the Consolidated Statement of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Employee Stock Benefit Plans | ||||
Share-based compensation expense | $ 5,520 | $ 12,168 | $ 25,792 | $ 30,222 |
Research and development | ||||
Employee Stock Benefit Plans | ||||
Share-based compensation expense | 1,208 | 2,974 | 5,306 | 8,446 |
Selling, general and administrative | ||||
Employee Stock Benefit Plans | ||||
Share-based compensation expense | $ 4,312 | 7,643 | 19,832 | 19,708 |
Restructuring expenses | ||||
Employee Stock Benefit Plans | ||||
Share-based compensation expense | $ 1,551 | $ 654 | $ 2,068 |
Employee Stock Benefit Plans _3
Employee Stock Benefit Plans - Workforce Reduction (Details) $ in Thousands | Feb. 07, 2019employee | Aug. 16, 2018employee | Jun. 27, 2018employee | Jan. 30, 2018employee | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) |
Employee Stock Benefit Plans | |||||||||
Share-based compensation expense | $ 5,520 | $ 12,168 | $ 25,792 | $ 30,222 | |||||
Spin-off | Share-based Payment Awards, Excluding Employee Stock Purchase Plan [Member] | |||||||||
Employee Stock Benefit Plans | |||||||||
Share-based compensation expense | 0 | 0 | |||||||
Spin-off | Shares subject to issuance under Employee Stock Purchase Plan | |||||||||
Employee Stock Benefit Plans | |||||||||
Share-based compensation expense | 300 | ||||||||
Research and development | |||||||||
Employee Stock Benefit Plans | |||||||||
Share-based compensation expense | 1,208 | 2,974 | 5,306 | 8,446 | |||||
Selling, general and administrative | |||||||||
Employee Stock Benefit Plans | |||||||||
Share-based compensation expense | 4,312 | 7,643 | 19,832 | 19,708 | |||||
Restructuring expenses | |||||||||
Employee Stock Benefit Plans | |||||||||
Share-based compensation expense | 1,551 | 654 | 2,068 | ||||||
Reduction in Field-based Workforce, January 30, 2018 | |||||||||
Workforce Reduction | |||||||||
Number of employees eliminated | employee | 60 | ||||||||
Reduction in Field-based Workforce, January 30, 2018 | Restructuring expenses | Employee severance, benefits and related costs | |||||||||
Employee Stock Benefit Plans | |||||||||
Share-based compensation expense | $ 200 | ||||||||
Reduction in Headquarter-based Workforce, June 27, 2018 | |||||||||
Workforce Reduction | |||||||||
Number of employees expected to be eliminated | employee | 40 | ||||||||
Reduction in Headquarter-based Workforce, June 27, 2018 | Restructuring expenses | Employee severance, benefits and related costs | |||||||||
Employee Stock Benefit Plans | |||||||||
Share-based compensation expense | 1,000 | $ 1,300 | |||||||
Reduction in Workforce, Termination of Lesinurad License Agreement, August 16, 2018 | |||||||||
Workforce Reduction | |||||||||
Number of employees eliminated | employee | 100 | ||||||||
Number of employees expected to be eliminated | employee | 100 | ||||||||
Reduction in Workforce, Termination of Lesinurad License Agreement, August 16, 2018 | Restructuring expenses | |||||||||
Employee Stock Benefit Plans | |||||||||
Share-based compensation expense | $ 600 | ||||||||
Reduction in Workforce, February 7, 2019 | |||||||||
Workforce Reduction | |||||||||
Number of employees expected to be eliminated | employee | 35 | ||||||||
Reduction in Workforce, February 7, 2019 | Restructuring expenses | Employee severance, benefits and related costs | |||||||||
Employee Stock Benefit Plans | |||||||||
Share-based compensation expense | $ 0 | $ 700 |
Employee Stock Benefit Plans _4
Employee Stock Benefit Plans - Share-based Compensation Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Employee Stock Benefit Plans | ||
Share-based compensation expense, other modifications | $ 0.2 | $ 2.8 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2009 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Related Party Transactions | ||||||
Accounts payable from related party | $ 1,593 | $ 1,593 | ||||
Investor | Allergan | ||||||
Related Party Transactions | ||||||
Accounts receivable | 94,400 | 94,400 | $ 60,000 | |||
Investor | Allergan | Convertible preferred stock | ||||||
Related Party Transactions | ||||||
Shares sold (in shares) | 2,083,333 | |||||
Board of Directors member | ||||||
Related Party Transactions | ||||||
Fees paid to related party | 800 | $ 800 | 2,000 | $ 2,600 | ||
Amount of insurance premium paid to the insurance provider | 1,700 | $ 2,900 | 5,800 | $ 9,200 | ||
Accounts payable from related party | 0 | 0 | $ 0 | |||
Net of accounts receivable | $ 1,300 | $ 1,300 |
Workforce Reduction - General I
Workforce Reduction - General Information (Details) $ in Thousands | Feb. 07, 2019employee | Aug. 16, 2018employee | Jun. 27, 2018itememployee | Jan. 30, 2018employee | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) |
Restructuring expenses | |||||||||
Restructuring expenses | $ (166) | $ 10,102 | $ 3,652 | $ 14,010 | |||||
Employee severance, benefits and related costs | |||||||||
Restructuring expenses | |||||||||
Restructuring expenses | 3,198 | ||||||||
Reduction in Field-based Workforce, January 30, 2018 | |||||||||
Workforce Reduction | |||||||||
Number of employees eliminated | employee | 60 | ||||||||
Restructuring expenses | |||||||||
Employee severance, benefits and related costs | $ 2,400 | ||||||||
Reduction in Headquarter-based Workforce, June 27, 2018 | |||||||||
Workforce Reduction | |||||||||
Number of new business | item | 2 | ||||||||
Number of employees expected to be eliminated | employee | 40 | ||||||||
Restructuring expenses | |||||||||
Employee severance, benefits and related costs | 2,500 | 4,000 | |||||||
Reduction in Headquarter-based Workforce, June 27, 2018 | Employee severance, benefits and related costs | |||||||||
Restructuring expenses | |||||||||
Restructuring expenses | 16 | ||||||||
Reduction in Workforce, Termination of Lesinurad License Agreement, August 16, 2018 | |||||||||
Workforce Reduction | |||||||||
Number of employees eliminated | employee | 100 | ||||||||
Number of employees expected to be eliminated | employee | 100 | ||||||||
Restructuring expenses | |||||||||
Employee severance, benefits and related costs | $ 7,600 | $ 7,600 | |||||||
Reduction in Workforce, February 7, 2019 | |||||||||
Workforce Reduction | |||||||||
Number of employees expected to be eliminated | employee | 35 | ||||||||
Restructuring expenses | |||||||||
Employee severance, benefits and related costs | $ (200) | 3,700 | |||||||
Reduction in Workforce, February 7, 2019 | Employee severance, benefits and related costs | |||||||||
Restructuring expenses | |||||||||
Restructuring expenses | $ 3,182 |
Workforce Reduction - Tabular D
Workforce Reduction - Tabular Disclosure (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Workforce Reduction | ||||
Charges | $ (166) | $ 10,102 | $ 3,652 | $ 14,010 |
Employee severance, benefits and related costs | ||||
Workforce Reduction | ||||
Balance at beginning of period | 2,452 | |||
Charges | 3,198 | |||
Amounts paid | (5,162) | |||
Adjustments | (160) | |||
Balance at end of period | 328 | 328 | ||
Employee severance, benefits and related costs | Reduction in Headquarter-based Workforce, June 27, 2018 | ||||
Workforce Reduction | ||||
Balance at beginning of period | 696 | |||
Charges | 16 | |||
Amounts paid | (689) | |||
Adjustments | (23) | |||
Balance at end of period | 0 | 0 | ||
Employee severance, benefits and related costs | Reduction in Workforce, Termination of Lesinurad License Agreement, August 16, 2018 | ||||
Workforce Reduction | ||||
Balance at beginning of period | 1,756 | |||
Amounts paid | (1,708) | |||
Adjustments | (48) | |||
Balance at end of period | 0 | 0 | ||
Employee severance, benefits and related costs | Reduction in Workforce, February 7, 2019 | ||||
Workforce Reduction | ||||
Balance at beginning of period | 0 | |||
Charges | 3,182 | |||
Amounts paid | (2,765) | |||
Adjustments | (89) | |||
Balance at end of period | 328 | 328 | ||
Contract related costs | ||||
Workforce Reduction | ||||
Balance at beginning of period | 433 | |||
Amounts paid | (287) | |||
Adjustments | (42) | |||
Balance at end of period | 104 | 104 | ||
Contract related costs | Reduction in Workforce, Termination of Lesinurad License Agreement, August 16, 2018 | ||||
Workforce Reduction | ||||
Balance at beginning of period | 433 | |||
Amounts paid | (287) | |||
Adjustments | (42) | |||
Balance at end of period | $ 104 | $ 104 |
Workforce Reduction - Restructu
Workforce Reduction - Restructuring Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Restructuring expenses | ||||
Restructuring expenses | $ (166) | $ 10,102 | $ 3,652 | $ 14,010 |