Document and Entity Information
Document and Entity Information - $ / shares | 3 Months Ended | |
Mar. 31, 2020 | May 01, 2020 | |
Cover [Abstract] | ||
Entity Central Index Key | 0001446847 | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2020 | |
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 | 159,378,637 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 231,143 | $ 177,023 |
Accounts receivable, net | 17,703 | 11,279 |
Related party accounts receivable, net | 73,404 | 105,967 |
Inventory, net | 648 | |
Prepaid expenses and other current assets | 10,443 | 10,685 |
Restricted cash | 1,250 | 1,250 |
Total current assets | 333,943 | 306,852 |
Restricted cash, net of current portion | 971 | 971 |
Accounts receivable, net of current portion | 22,795 | 32,597 |
Property and equipment, net | 12,164 | 12,429 |
Operating lease right-of-use assets | 17,447 | 17,743 |
Convertible note hedges | 15,847 | 31,366 |
Other assets | 838 | 790 |
Total assets | 404,005 | 402,748 |
Current liabilities: | ||
Accounts payable | 2,781 | 3,978 |
Related party accounts payable, net | 1,058 | 1,509 |
Accrued research and development costs | 2,286 | 2,956 |
Accrued expenses and other current liabilities | 18,719 | 30,465 |
Current portion of operating lease liabilities | 1,876 | 1,146 |
Deferred revenue | 875 | 875 |
Total current liabilities | 27,595 | 40,929 |
Note hedge warrants | 12,207 | 24,260 |
Convertible senior notes | 413,409 | 407,994 |
Operating lease obligations, net of current portion | 21,646 | 22,082 |
Other liabilities | 705 | 734 |
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 159,368,126 issued and outstanding at March 31, 2020 and 500,000,000 shares authorized and 157,535,962 shares issued and outstanding at December 31, 2019 | 159 | 158 |
Additional paid-in capital | 1,497,171 | 1,478,823 |
Accumulated deficit | (1,568,887) | (1,572,232) |
Total stockholders' deficit | (71,557) | (93,251) |
Total liabilities and stockholders' deficit | $ 404,005 | $ 402,748 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2020 | Dec. 31, 2019 |
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 | 159,368,126 | 157,535,962 |
Common stock, shares outstanding | 159,368,126 | 157,535,962 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenues: | ||
Total revenues | $ 79,943 | $ 68,730 |
Cost and expenses: | ||
Cost of revenues | 2,239 | 1,043 |
Research and development | 28,027 | 32,198 |
Selling, general and administrative | 36,450 | 49,095 |
Restructuring expenses | 0 | 3,328 |
Total cost and expenses | 66,716 | 85,664 |
Income (loss) from operations | 13,227 | (16,934) |
Other (expense) income: | ||
Interest expense | (7,220) | (9,592) |
Interest and investment income | 777 | 736 |
(Loss) gain on derivatives | (3,466) | 3,944 |
Other income | 27 | |
Other expense, net | (9,882) | (4,912) |
Net income (loss) from continuing operations | 3,345 | (21,846) |
Net loss from discontinued operations | (37,438) | |
Net income (loss) and comprehensive income | $ 3,345 | $ (59,284) |
Net income per share from continuing operations - basic and diluted (in dollars per share) | $ 0.02 | $ (0.14) |
Net loss per share from discontinued operations - basic and diluted (in dollars per share) | (0.24) | |
Net income (loss) per share - basic and diluted (in dollars per share) | $ 0.02 | $ (0.38) |
Weighted average shares used in computing net income (loss) per share - basic | 158,374 | 154,956 |
Weighted average shares used in computing net income (loss) per share - diluted | 159,970 | 154,956 |
Collaborative arrangements revenue | ||
Revenues: | ||
Total revenues | $ 74,445 | $ 66,152 |
Sale of active pharmaceutical ingredient | ||
Revenues: | ||
Total revenues | $ 5,498 | $ 2,578 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Deficit - USD ($) $ in Thousands | Class A common stockCommon Stock | Additional paid-in capital | Accumulated deficit | Total |
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 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, 2019 | $ 158 | 1,478,823 | (1,572,232) | $ (93,251) |
Balance (in shares) at Dec. 31, 2019 | 157,535,962 | 157,535,962 | ||
Increase (Decrease) in Stockholders' Equity | ||||
Issuance of common stock related to share-based awards and employee stock purchase plan | $ 1 | 11,984 | $ 11,985 | |
Issuance of common stock related to share-based awards and employee stock purchase plan (in shares) | 1,832,164 | |||
Share-based compensation expense related to share-based awards and employee stock purchase plan | 6,364 | 6,364 | ||
Net loss | 3,345 | 3,345 | ||
Balance at Mar. 31, 2020 | $ 159 | $ 1,497,171 | $ (1,568,887) | $ (71,557) |
Balance (in shares) at Mar. 31, 2020 | 159,368,126 | 159,368,126 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash flows from operating activities: | ||
Net Income (Loss) | $ 3,345 | $ (59,284) |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||
Depreciation and amortization | 682 | 688 |
Loss on disposal of property and equipment | 16 | 99 |
Share-based compensation expense | 6,364 | 13,934 |
Change in fair value of note hedge warrants | (12,053) | 5,625 |
Change in fair value of convertible note hedges | 15,519 | (9,569) |
Non-cash interest expense | 5,416 | 4,609 |
Changes in assets and liabilities: | ||
Accounts receivable and related party accounts receivable, net | 35,941 | 8,333 |
Prepaid expenses and other current assets | 301 | 2,482 |
Inventory, net | (152) | |
Other assets | (51) | 52 |
Accounts payable, related party accounts payable and accrued expenses | (11,768) | (21,824) |
Accrued research and development costs | (670) | 621 |
Operating lease right-of-use assets | 296 | 3,466 |
Operating lease liabilities | 294 | (2,829) |
Other liabilities | (29) | |
Net cash provided by (used in) continuing operating activities | 43,603 | (53,749) |
Net cash provided by discontinued operating activities | 11,364 | |
Net cash provided by (used in) operating activities | 43,603 | (42,385) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (1,438) | 988 |
Proceeds from sale of property and equipment | 258 | |
Net cash (used in) provided by continuing investing activities | (1,438) | 1,246 |
Net cash used in discontinued investing activities | (4,223) | |
Net cash used in investing activities | (1,438) | (2,977) |
Cash flows from financing activities: | ||
Proceeds from exercise of stock options and employee stock purchase plan | 11,955 | 3,487 |
Payments on 2026 Notes | (12,252) | |
Net cash provided by (used in) continuing financing activities | 11,955 | (8,765) |
Net cash provided by (used in) financing activities | 11,955 | (8,765) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 54,120 | (54,127) |
Cash, cash equivalents and restricted cash, beginning of period | 179,244 | 180,848 |
Cash, cash equivalents and restricted cash, end of period | $ 233,364 | $ 126,721 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2020 | Mar. 31, 2019 |
Reconciliation of cash, cash equivalents, and restricted cash to the condensed consolidated balance sheets | ||
Cash and cash equivalents | $ 231,143 | $ 119,045 |
Restricted cash | 2,221 | 7,676 |
Total cash, cash equivalents, and restricted cash | $ 233,364 | $ 126,721 |
Nature of Business
Nature of Business | 3 Months Ended |
Mar. 31, 2020 | |
Disclosure Text Block | |
Nature of Business | 1. Nature of Business Ironwood Pharmaceuticals, Inc. (“Ironwood” or the “Company”) is a gastrointestinal (“GI”) healthcare company dedicated to advancing the treatment of GI diseases and redefining the standard of care for millions of GI patients. The Company is focused on the development and commercialization of innovative GI product opportunities in areas of large unmet need, leveraging its demonstrated expertise and capabilities in GI diseases. 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. In August 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 September 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). In November 2019, AstraZeneca began commercializing LINZESS for the treatment of adults with IBS-C in China. 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 formulation of linaclotide, as an oral, intestinal, non-opioid, pain-relieving agent for patients with abdominal pain associated with certain GI diseases. In May 2019, the Company and Allergan announced the initiation of a Phase II clinical trial evaluating the safety and efficacy of MD-7246 in adult patients with abdominal pain associated with IBS with diarrhea (“IBS-D”). In March 2020, the Company announced that patient dosing in the IBS-D Phase II clinical trial was complete. The Company also is developing IW-3718, a gastric retentive formulation of a bile acid sequestrant, for the potential treatment of refractory gastroesophageal reflux disease (“refractory GERD”). In June 2018, the Company initiated two Phase III clinical trials evaluating the safety and efficacy of IW-3718 in patients with refractory GERD. Additionally, the Company periodically enters into co-promotion agreements to bolster its salesforce productivity. In August 2019, the Company entered into a disease education and promotional agreement with Alnylam Pharmaceuticals, Inc. (“Alnylam”) for Alnylam’s GIVLAARI TM These and other agreements are more fully described in Note 4, Collaboration, License, Co-Promotion and Other Commercial Agreements On April 1, 2019, Ironwood completed the separation (the “Separation”) of its soluble guanylate cyclase (“sGC”) business, and certain other assets and liabilities, into Cyclerion Therapeutics, Inc. (“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 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). In August 2019, the Company issued $200.0 million in aggregate principal amount of 0.75% Convertible Senior Notes due 2024 (the “2024 Convertible Notes”) and $200.0 million in aggregate principal amount of 1.50% Convertible Senior Notes due 2026 (the “2026 Convertible Notes”). The Company received net proceeds of approximately $391.0 million from the sale of the 2024 Convertible Notes and the 2026 Convertible Notes, after deducting fees and expenses of approximately $9.0 million. 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”) and in September 2019 to redeem all of the outstanding principal balance of the 8.375% Notes due 2026 (the “2026 Notes”) (Note 8). 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, 2019, which was filed with the Securities and Exchange Commission on February 13, 2020 (the “2019 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 March 31, 2020, and the results of its operations for the three months ended March 31, 2020 and 2019, its statements of stockholders’ deficit for the three months ended March 31, 2020 and 2019, and its cash flows for the three months ended March 31, 2020 and 2019. The results of operations for the three months ended March 31, 2020 and 2019 are not necessarily indicative of the results that may be expected for the full year or any other subsequent interim period. The Company has presented its sGC business as discontinued operations in its condensed consolidated financial statements for all periods presented. The historical financial statements and footnotes have been recast accordingly (Note 2). For periods following the Separation, the Company continues to report financial results under one business segment. Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of Ironwood and its wholly-owned subsidiaries as of March 31, 2020, 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 ongoing 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; accounts receivable; inventory valuation and related reserves; useful lives of long-lived assets; impairment of long-lived assets, including goodwill; valuation procedures for right-of-use assets and operating lease liabilities; valuation procedures for the issuance and repurchase of convertible notes; losses related to discontinued operations; fair value of derivatives; balance sheet classification of 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 have been reclassified to conform to current period presentation. The Company has presented its sGC business as discontinued operations in its condensed consolidated financial statements for prior periods presented. The historical financial statements and footnotes have been recast accordingly. Summary of Significant Accounting Policies The Company’s significant accounting policies are described in Note 2, Summary of Significant Accounting Policies 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 months ended March 31, 2020 that had a material effect on its condensed consolidated financial statements. In June 2016, the FASB issued Accounting Standards Update (“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 Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Date Codification Improvements to Topic 326, Financial Instruments—Credit Losses Financial Instruments—Credit Losses (Topic 326) and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-02, Leases (Topic 842) Financial Instruments—Credit Losses In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other 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 December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes , No other accounting standards known by the Company to be applicable to it that have been issued by the FASB or other standard-setting bodies and that do not require adoption until a future date are expected to have a material impact on the Company’s condensed consolidated financial statements upon adoption. |
Cyclerion Separation
Cyclerion Separation | 3 Months Ended |
Mar. 31, 2020 | |
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, Cyclerion was a wholly owned subsidiary of the Company. On March 30, 2019, the Company entered into certain agreements with Cyclerion relating to the Separation, including a separation agreement, a tax matters agreement, and an employee matters agreement. 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 dividend, 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 provides for when and how these transfers, assumptions and assignments occur. The purpose of the separation agreement was to provide Cyclerion and Ironwood with assets to operate their respective businesses and retain or assume liabilities related to those assets. The transfer of assets and liabilities to Cyclerion was effected through a contribution in accordance with the separation agreement as summarized below (in thousands): 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 year ended December 31, 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. Additionally, the Company entered into two transition services agreements and a development agreement with Cyclerion. Pursuant to the transition service agreements, the Company was obligated to provide and was entitled to receive certain transition services related to corporate functions, such as finance, procurement, facilities and development. Services provided by the Company to Cyclerion were to continue for an initial term of one 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 continued for a term of one year from the date of the Separation. Services received and performed under each transition services agreement were paid at a mutually agreed upon rate. Amounts received for services provided to Cyclerion were recorded as other income and amounts paid for services provided by Cyclerion were recorded as selling, general and administrative expense and research and development expense, as applicable. The transition services agreements terminated on March 31, 2020. During the three months ended March 31, 2020, the Company recorded an insignificant amount as other income for services provided to Cyclerion. During the three months ended March 31, 2020, the Company recorded an insignificant amount in selling, general and administrative 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 $1.0 million in research and development expenses under the development agreement during the three months ended March 31, 2020. Discontinued Operations Upon Separation, the Company determined its sGC business qualified for discontinued operations accounting treatment in accordance with Accounting Standards Codification (“ASC”) 205-20. The following is a summary of expenses of Cyclerion for the three months ended March 31, 2020 and 2019 (in thousands): Three months ended March 31, 2020 2019 Costs and expenses: Research and development $ — $ 21,792 Selling, general and administrative — 15,646 Net loss from discontinued operations $ — $ 37,438 There were no assets and liabilities |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 3 Months Ended |
Mar. 31, 2020 | |
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 the 2022 Convertible Notes (Note 8), the Company entered into convertible note hedge transactions, or 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 antidilutive. Concurrently with entering into the Convertible Note Hedges, the Company also sold note hedge warrant, or 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 8). 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. 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. As applicable, the following potentially dilutive securities have been excluded from the computation of diluted weighted average shares outstanding, when their effect would be anti-dilutive (in thousands): Three Months Ended March 31, 2020 2019 Options to purchase Class A Common Stock 15,647 24,080 Shares subject to repurchase 182 32 Time-vesting restricted stock units 4,945 3,641 Performance-based restricted stock units 543 — Shares subject to issuance under Employee Stock Purchase Plan 105 125 Note Hedge Warrants 8,318 20,250 2022 Convertible Notes 8,318 20,250 2024 Convertible Notes 14,934 — 2026 Convertible Notes 14,934 — 67,926 68,378 |
Collaboration, License, Co-Prom
Collaboration, License, Co-Promotion and Other Commercial Agreements | 3 Months Ended |
Mar. 31, 2020 | |
Disclosure Text Block | |
Collaboration, License, Co-Promotion and Other Commercial Agreements | 4. Collaboration, License, Co-Promotion and Other Commercial Agreements For the three months ended March 31, 2020, 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 an agreement with Alnylam to perform disease awareness activities for AHP and sales detailing activities for GIVLAARI. The following table provides amounts included in the Company’s condensed consolidated statements of operations as collaborative arrangements revenue and sale of API primarily attributable to transactions from these arrangements (in thousands): Three Months Ended March 31, Collaborative Arrangements Revenue 2020 2019 Linaclotide Collaboration Agreements: Allergan (North America) $ 71,692 $ 64,785 Allergan (Europe and other) 643 420 AstraZeneca (China, including Hong Kong and Macau) 332 — Astellas (Japan) 479 — Co-Promotion and Other Agreements: Alnylam (GIVLAARI) 945 — Other 354 947 Total collaborative arrangements revenue $ 74,445 $ 66,152 Sale of API Linaclotide License Agreements: Astellas (Japan) $ — $ 2,575 AstraZeneca (China, including Hong Kong and Macau) 5,498 — Other — 3 Total sale of API $ 5,498 $ 2,578 Accounts receivable, net included approximately $40.5 million and approximately $43.9 million related to collaborative arrangements revenue and sale of API, collectively, as of March 31, 2020 and December 31, 2019, respectively. Related party accounts receivable, net included approximately $73.4 million and approximately $110.1 million related to collaborative arrangements revenue, net of approximately $4.6 million and approximately $4.1 million related to related party accounts payable as of March 31, 2020 and December 31, 2019, respectively. As of March 31, 2020, deferred revenue was approximately $0.9 million related to the disease education and promotional agreement with Alnylam. The Company routinely assesses the creditworthiness of its license and collaboration partners. The Company has not experienced any material losses related to receivables from its license or collaboration partners. 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 March 31, 2020, $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. 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. During the three months ended March 31, 2020 and 2019, the Company incurred approximately $6.6 million and approximately $10.0 million in total research and development expenses under the linaclotide collaboration for North America, respectively. As a result of the research and development cost-sharing provisions of the linaclotide collaboration for North America, the Company incurred approximately $0.8 million and offset approximately $3.2 million in research and development costs during the three months ended March 31, 2020 and 2019, 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. The Company evaluated its collaboration arrangement for North America with Allergan under ASC Topic 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. The Company recognized collaborative arrangements revenue from the Allergan collaboration agreement for North America during the three months ended March 31, 2020 and 2019 as follows (in thousands): Three Months Ended March 31, 2020 2019 Collaborative arrangements revenue related to sales of LINZESS in the U.S. $ 71,142 $ 64,293 Royalty revenue 550 492 Total collaborative arrangements revenue $ 71,692 $ 64,785 The collaborative arrangements revenue recognized in the three months ended March 31, 2020 and 2019 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 months ended March 31, 2020 and 2019 (in thousands): Three Months Ended March 31, 2020 2019 Collaborative arrangements revenue related to sales of LINZESS in the U.S. (1) $ 71,142 $ 64,293 Selling, general and administrative costs incurred by the Company (1) (8,674) (10,277) The Company’s share of net profit $ 62,468 $ 54,016 (1) Includes only collaborative arrangements revenue or selling, general and administrative costs attributable to the cost-sharing arrangement with Allergan. Excludes approximately $0.2 million and approximately $0.5 million for the three months ended March 31, 2020 and 2019, respectively, related to patent prosecution and patent litigation costs recognized in connection with the collaboration agreement with Allergan for North America. 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 $0.6 million and approximately $0.5 million of combined royalty revenues from Canada and Mexico during the three months ended March 31, 2020 and 2019, 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. 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, the Company and Allergan entered into an amendment to the European License Agreement (the “2017 Amendment”). The 2017 Amendment extended the license 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. On a country-by-country and product-by-product basis in such additional territory, Allergan is obligated to pay the Company a royalty as a percentage of net sales of products containing linaclotide as an active ingredient in the upper-single digits for five years following the first commercial sale of a linaclotide product in a country, and in the low-double digits thereafter. The royalty rate for products in the expanded territory will decrease, on a country-by-country basis, to the lower-single digits, or cease entirely, following the occurrence of certain events. The 2017 Amendment did not modify any of the milestones or royalty terms related to Europe. In evaluating the terms of the European License Agreement and the 2017 Amendment under ASC 606, the Company determined that there are no remaining performance obligations. 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 and the 2017 Amendment relate predominantly to the license granted to Allergan (formerly Almirall). 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 under the sales-based royalty exception. 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. The Company recognized approximately $0.6 million and approximately $0.4 million of royalty revenue from the 2017 Amendment during the three months ended March 31, 2020 and 2019, 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 was 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 $45.0 million, which were recognized as revenue prior to the adoption of ASC 606 on January 1, 2018. The Company evaluated the terms of the 2009 License Agreement with Astellas 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. During the three months ended March 31, 2019, the Company recognized approximately $2.6 million from the sale of API to Astellas under the 2009 License Agreement with Astellas and the Astellas Commercial Supply Agreement. 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. In August 2019, the Company and Astellas amended and restated the 2009 License Agreement with Astellas (the “Amended Astellas License Agreement”). This amendment was a modification to the 2009 License Agreement with Astellas and was accounted for as a new and separate contract. Under the terms of the 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 in Japan beginning in 2020. 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, in lieu of the royalty payment terms set forth in the 2009 License Agreement with Astellas, is required to 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 continued 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. The Company identified the following performance obligations under the Amended Astellas License Agreement: ● 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 is recognized over the performance period as linaclotide API is shipped to Astellas using an output method. Consideration allocated to the adverse event reporting services is recognized as such services are provided over the performance period based on the amount to which the Company has a right to invoice using an output method. 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 approximately $0.5 million in collaborative arrangements revenue during the three months ended March 31, 2020 under the Amended Astellas License Agreement, of which approximately $0.4 million related to royalties and an insignificant amount related to adverse event reporting services. 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 services. Under the original AstraZeneca Collaboration Agreement, the Company shared development costs with AstraZeneca, with AstraZeneca incurring 55% of the net losses from the development and commercialization of linaclotide in the AstraZeneca License Territory. Payments from AstraZeneca with respect to both research and development and selling, general and administrative costs incurred by the Company prior to the commercialization of linaclotide in the AstraZeneca License Territory were recorded as a reduction in expense. Development costs incurred by the Company that pertained to the joint development plan and subsequent amendments to the joint development plan, as approved by the JDC, were recorded as research and development expense as incurred. Payments to AstraZeneca were recorded as incremental research and development expense. During the three months ended March 31, 2019, the Company offset an insignificant amount of costs related to R&D Services and JDC services under the AstraZeneca Collaboration Agreement. During the three months ended March 31, 2019, the Company recognized an insignificant amount of revenue related to the sale of linaclotide drug product and API under the AstraZeneca Collaboration Agreement. Additionally, the Company recorded approximately $0.2 million in costs related to pre-launch commercial services and supply chain services during the three months ended March 31, 2019. 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 expanded AstraZeneca License; ● AstraZeneca TSA services; and ● supply of linaclotide API, finished 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 at contract inception and will recognize the approximately $2.6 million relating to the significant financing component as interest income through 2024 using the effective interest method. 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, finished drug product and finished goods under the AstraZeneca CSA will be recognized over the performance period using an output method as linaclotide API, finished drug product and finished goods are shipped to AstraZeneca. During the three months ended March 31, 2020, the Company recognized approximately $0.2 million in collaborative arrangements revenue under the Amended AstraZeneca Agreement related to the AstraZeneca TSA services. During the three months ended March 31, 2020, the Company recognized approximately $5.5 million of sale of API on its condensed consolidated statement of operations relating to the supply of linaclotide finished drug product and finished goods under the AstraZeneca CSA. The Company recognized approximately $0.2 million in interest income related to the significant financing component of the Amended AstraZeneca Agreement during the three months ended March 31, 2020. Co-Promotion Agreements Disease Education and Promotional Agreement with Alnylam ● performance of disease education activities for AHP and performance of sales details for GIVLAARI (together “Givosiran Education and Promotion Activities”). Other Collaboration and License Agreements The Company has other collaboration and license agreements that are not individually significant to its business. Pursuant to the terms of one agreement, the Company may be required to pay up to $18.0 million for regulatory milestones, none |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2020 | |
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 March 31, 2020 and December 31, 2019 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 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 March 31, 2020 (Level 1) (Level 2) (Level 3) Assets: Cash and cash equivalents: Money market funds $ 215,790 $ 215,790 $ — $ — Restricted cash: Money market funds 2,221 2,221 — — Convertible Note Hedges 15,847 — — 15,847 Total assets measured at fair value $ 233,858 $ 218,011 $ — $ 15,847 Liabilities: Note Hedge Warrants $ 12,207 $ — $ — $ 12,207 Total liabilities measured at fair value $ 12,207 $ — $ — $ 12,207 Fair Value Measurements at Reporting Date Using Quoted Prices in Significant Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs December 31, 2019 (Level 1) (Level 2) (Level 3) Assets: Cash and cash equivalents: Money market funds $ 139,190 $ 139,190 $ — $ — Repurchase agreements 37,800 37,800 — — Restricted cash: Money market funds 2,221 2,221 — — Convertible Note Hedges 31,366 — — 31,366 Total assets measured at fair value $ 210,577 $ 179,211 $ — $ 31,366 Liabilities: Note Hedge Warrants $ 24,260 $ — $ — $ 24,260 Total liabilities measured at fair value $ 24,260 $ — $ — $ 24,260 There were no transfers between fair value measurement levels during each of the three months ended March 31, 2020 or 2019. Cash equivalents, accounts receivable, related party accounts receivable, prepaid expenses and other current assets, accounts payable, related party accounts payable, accrued research and development costs, accrued expenses and other current liabilities, deferred revenue and current portion of operating lease obligations at March 31, 2020 and 2019 are carried at amounts that approximate fair value due to their short-term maturities. Convertible Note Hedges and Note Hedge Warrants with Respect to 2022 Convertible Notes The Company’s Convertible Note Hedges and the Note Hedge Warrants are recorded as derivative assets and liabilities, respectively, and are classified as Level 3 measurements 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 March 31, 2020 included the price per share of the Company’s Class A Common Stock, expected terms of the derivative instruments, strike prices of the derivative instruments, risk-free interest rates, and expected 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. The following inputs were used in the fair market valuation of the Convertible Note Hedges and Note Hedge Warrants as of March 31, 2020 and December 31, 2019: Three Months Ended Year Ended March 31, December 31, 2020 2019 Convertible Note Hedge Convertible Note Hedge Note Hedges Warrants Note Hedges Warrants Risk-free interest rate (1) 0.2 % 0.3 % 1.6 % 1.6 % Expected term 2.2 2.8 2.5 3.0 Stock price (2) $ 10.09 $ 10.09 $ 13.31 $ 13.31 Strike price (3) $ 14.51 $ 18.82 $ 14.51 $ 18.82 Common stock volatility (4) 52.4 % 50.1 % 49.1 % 46.5 % Dividend yield (5) — % — % — % — % (1) Based on U.S. Treasury yield curve, with terms commensurate with the expected 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 days of the quarters ended March 31, 2020 and December 31, 2019, respectively. (3) As per the respective agreements for the Convertible Note Hedges and Note Hedge Warrants. (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 date and changes in fair value are recorded in other (expense) income, 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, 2019 through March 31, 2020 (in thousands): Convertible Note Hedge Note Hedges Warrants Balance at December 31, 2019 $ 31,366 $ (24,260) Change in fair value, recorded as a component of (loss) gain on derivatives (15,519) 12,053 Balance at March 31, 2020 $ 15,847 $ (12,207) 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 issued $200.0 million aggregate principal amount of its 2024 Convertible Notes and $200.0 million aggregate principal amount of its 2026 Convertible Notes and used a portion of the proceeds from such issuances to repurchase $215.0 million aggregate principal amount of its 2022 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 by allocating the proceeds between the liability component and equity component (Note 8). 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 $124.7 million and approximately $141.3 million as of March 31, 2020 and December 31, 2019, respectively. The estimated fair value of the 2024 Convertible Notes was approximately $202.1 million and approximately $235.7 million as of March 31, 2020 and December 31, 2019, respectively. The estimated fair value of the 2026 Convertible Notes was approximately $202.4 million and approximately $240.1 million as of March 31, 2020 and December 31, 2019, respectively. Capped Calls with Respect to 2024 Convertible Notes and 2026 Convertible Notes Derivatives and Hedging |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 3 Months Ended |
Mar. 31, 2020 | |
Disclosure Text Block | |
Accrued Expenses and Other Current Liabilities | 6. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following (in thousands): March 31, 2020 December 31, 2019 Salaries $ 1,582 $ 2,973 Accrued vacation 3,007 2,540 Accrued incentive compensation 3,672 11,760 Other employee benefits 2,084 1,260 Professional fees 2,036 1,421 Accrued interest 2,105 301 Other 4,233 10,210 $ 18,719 $ 30,465 As of March 31, 2020, other accrued expenses of approximately $4.2 million included approximately $0.9 million related to unbilled drug product and finished goods manufacturing costs, approximately $0.3 million related to equipment for clinical studies, approximately $0.2 million related to franchise taxes, approximately $0.2 million related to facility services, and approximately $0.2 million related to public relations services. As of December 31, 2019, other accrued expenses of approximately $10.2 million included approximately $4.1 million related to API batches yet to be invoiced, approximately $0.9 million related to activities associated with the Company’s move to the 100 Summer Street headquarters, approximately $0.6 million related to unbilled inventory, and approximately $0.2 million related to equipment for clinical studies. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2020 | |
Disclosure Text Block | |
Leases | 7. Leases Effective January 1, 2019, the Company adopted ASC 842 using the optional transition method. The Company’s lease portfolio for the three months ended March 31, 2020 includes: leases for its current headquarters location, 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 months ended March 31, 2020 and 2019 are as follows (in thousands): Three Months Ended March 31, 2020 2019 Operating lease cost during period $ 633 $ 4,525 Short-term lease cost 372 389 Total lease cost $ 1,005 $ 4,914 Supplemental cash flow information related to leases for the periods reported is as follows: Three Months Ended March 31, 2020 2019 Right-of-use assets obtained in exchange for new operating lease upon adoption of ASC 842 (in thousands) $ — $ 88,299 Cash paid for amounts included in the measurement of lease liabilities (in thousands) 43 4,412 Weighted-average remaining lease term of operating leases (in years) 10.0 5.7 Weighted-average discount rate of operating leases 5.8 % 6.7 % Future minimum lease payments under non-cancelable operating leases as of March 31, 2020 are as follows (in thousands): Operating Lease Payments 2020 (1) $ 1,102 2021 3,128 2022 3,129 2023 3,065 2024 3,126 2025 and thereafter 18,044 Total future minimum lease payments 31,594 Less: present value adjustment (8,072) Operating lease liabilities at March 31, 2020 23,522 Less: current portion of operating lease liabilities (1,876) Operating lease liabilities, net of current portion $ 21,646 (1) For the nine months ending December 31, 2020. Summer Street Lease (current headquarters) On June 11, 2019, the Company entered into a non-cancelable operating lease (the “Summer Street Lease”) with MA-100 Summer Street Owner, L.L.C. for approximately 39,000 square feet of office space on the 23 rd 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 non-current restricted cash on the Company’s condensed consolidated balance sheets as of March 31, 2020 and December 31, 2019. At lease inception, the Company recorded a right-of-use asset and a lease liability using an incremental borrowing rate of approximately 5.8%. At March 31, 2020, the balances of the right-of-use asset and operating lease liability were approximately $17.4 million and approximately $23.1 million, respectively. At December 31, 2019, the balances of the right-of-use asset and operating lease liability were approximately $17.7 million and approximately $22.8 million, respectively. Lease cost related to the Summer Street Lease recorded during the three months ended March 31, 2020 was approximately $0.6 million. 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 and was replaced by the Summer Street Property in October 2019, as discussed above. Lease cost related to the Binney Street Lease recorded during the three months ended March 31, 2019 was approximately $2.6 million. 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 includes 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. The incremental borrowing rate for the outstanding Data Center Lease obligation upon adoption of ASC 842 was approximately 6.0%. 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 fully 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 both March 31, 2020 and December 31, 2019, the lease liability associated with the Data Center Lease was approximately $0.4 million. Costs related to the Data Center Lease were insignificant for each of the three months ended March 31, 2020 and 2019. Vehicle fleet leases During April 2018, the Company entered into a master services agreement containing 12-month leases (the “2018 Vehicle Leases”) for 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 Lease cost related to the 2018 Vehicle Leases was approximately $0.4 million for each of the three months ended March 31, 2020 and 2019. |
Notes Payable
Notes Payable | 3 Months Ended |
Mar. 31, 2020 | |
Disclosure Text Block | |
Notes Payable | 8. Notes Payable 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 trustee (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. 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 component 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. The Company recognized a loss on extinguishment of debt of approximately $23.4 million during the year ended December 31, 2019 related to the 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 of approximately $27.0 million during the year ended December 31, 2019 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 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. approximately $13.39 per share, representing a conversion premium of approximately 37.5% above the last reported sale price of Class A Common Stock of $9.74 per share on August 7, 2019. ● 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 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 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 The Company’s outstanding balances for the convertible senior notes as of March 31, 2020 and December 31, 2019 consisted of the following (in thousands): March 31, 2020 December 31, 2019 Liability component: Principal: 2022 Convertible Notes $ 120,699 $ 120,699 2024 Convertible Notes 200,000 200,000 2026 Convertible Notes 200,000 200,000 Less: unamortized debt discount (99,631) (104,700) Less: unamortized debt issuance costs (7,659) (8,005) Net carrying amount $ 413,409 $ 407,994 Equity component: 2022 Convertible Notes 19,807 19,807 2024 Convertible Notes 41,152 41,152 2026 Convertible Notes 51,350 51,350 Total equity component $ 112,309 $ 112,309 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 condensed consolidated 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 during the year ended December 31, 2019. The Company determined the expected life of the 2022 Convertible Notes was equal to their seven-year term. From the date of the partial repurchase of the 2022 Convertible Notes in August 2019 through March 31, 2020, the effective interest rate on the liability component of the 2022 Convertible Notes was 9.5%. 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 condensed consolidated 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 components of the 2024 Convertible Notes and the 2026 Convertible Notes for the period from the date of issuance through March 31, 2020 was 6.1% and 6.5%, respectively. The following table sets forth total interest expense recognized related to convertible senior notes during the three months ended March 31, 2020 and 2019 (in thousands): Three Months Ended March 31, 2020 2019 Contractual interest expense $ 1,805 $ 1,888 Amortization of debt issuance costs 346 272 Amortization of debt discount 5,069 4,075 Total interest expense $ 7,220 $ 6,235 2020 (1) $ 7,216 2021 7,216 2022 126,556 2023 4,500 2024 203,750 2025 3,000 2026 and Thereafter 201,500 Total future minimum payments under the convertible senior notes 553,738 Less: amounts representing interest (33,039) Less: unamortized debt discount (99,631) Less: unamortized debt issuance costs (7,659) Convertible senior notes balance $ 413,409 (1) For the nine months ending December 31, 2020. 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 are exercisable if the 2022 Convertible Notes are converted. In connection with the adjustment to the conversion rate of the 2022 Convertible Notes related to the Separation in April 2019, the exercise price of the Convertible Note Hedges was adjusted to $14.51 per share and the number of shares underlying the Convertible Note Hedges was increased to 23,135,435 shares. 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 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 Convertible Note Hedges and the Note Hedge Warrants do not have any rights with respect to the 2022 Convertible Notes. 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 of termination payments from the counterparties of the Convertible Note Hedges and Note Hedge Warrants. The Convertible Note Hedges and Note Hedge Warrants are accounted for as derivative assets and liabilities, respectively, in accordance with ASC 815. Capped Calls with Respect to 2024 Convertible Notes and 2026 Convertible Notes |
Employee Stock Benefit Plans
Employee Stock Benefit Plans | 3 Months Ended |
Mar. 31, 2020 | |
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Employee Stock Benefit Plans | 9. Employee Stock Benefit Plans The Company has several share-based compensation plans under which stock options, restricted stock awards, restricted stock units, and other share-based awards are available for grant to employees, officers, directors and consultants of the Company. The following table summarizes share-based compensation expense (in thousands): Three Months Ended March 31, 2020 2019 Research and development $ 1,396 $ 2,918 Selling, general and administrative 4,968 10,499 Restructuring expenses — 517 $ 6,364 $ 13,934 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 share-based compensation expense of approximately $0.5 million to restructuring expenses for the three months ended March 31, 2019. In connection with certain other modifications of share-based payment awards for the three months ended March 31, 2020 and 2019, the Company recognized an insignificant amount and approximately |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2020 | |
Disclosure Text Block | |
Related Party Transactions | 10. Related Party Transactions 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 March 31, 2020 and December 31, 2019, the Company had approximately $73.4 million and approximately $106.0 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 $2.4 million and approximately $2.5 million in insurance premiums to this insurance provider during the three months ended March 31, 2020 and 2019, respectively. At both March 31, 2020 and December 31, 2019, the Company had no 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 March 31, 2020, the Company had an insignificant amount of accounts receivable and approximately $1.1 million of accounts payable due from and to Cyclerion, respectively. As of December 31, 2019, the Company had an insignificant amount of accounts receivable and approximately $1.5 million of accounts payable due from and to Cyclerion, respectively. The transition services agreements with Cyclerion terminated on March 31, 2020. |
Workforce Reduction
Workforce Reduction | 3 Months Ended |
Mar. 31, 2020 | |
Disclosure Text Block | |
Workforce Reduction | 11. Workforce Reduction On February 7, 2019, following 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 months ended March 31, 2019, the Company substantially completed the implementation of this reduction in workforce and, in accordance with ASC 420, Exit or Disposal Cost Obligations During the three months ended March 31, 2020 and 2019, the Company recorded no restructuring expenses and approximately $3.3 million in restructuring expenses, respectively. At March 31, 2020 and December 31, 2019, the Company had an insignificant amount and approximately $0.2 million in accrued restructuring costs remaining, respectively. |
Nature of Business (Policies)
Nature of Business (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
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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, 2019, which was filed with the Securities and Exchange Commission on February 13, 2020 (the “2019 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 March 31, 2020, and the results of its operations for the three months ended March 31, 2020 and 2019, its statements of stockholders’ deficit for the three months ended March 31, 2020 and 2019, and its cash flows for the three months ended March 31, 2020 and 2019. The results of operations for the three months ended March 31, 2020 and 2019 are not necessarily indicative of the results that may be expected for the full year or any other subsequent interim period. The Company has presented its sGC business as discontinued operations in its condensed consolidated financial statements for all periods presented. The historical financial statements and footnotes have been recast accordingly (Note 2). For periods following the Separation, the Company continues to report financial results under one business segment. |
Principles of Consolidation | Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of Ironwood and its wholly-owned subsidiaries as of March 31, 2020, 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 ongoing 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; accounts receivable; inventory valuation and related reserves; useful lives of long-lived assets; impairment of long-lived assets, including goodwill; valuation procedures for right-of-use assets and operating lease liabilities; valuation procedures for the issuance and repurchase of convertible notes; losses related to discontinued operations; fair value of derivatives; balance sheet classification of 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 have been reclassified to conform to current period presentation. The Company has presented its sGC business as discontinued operations in its condensed consolidated financial statements for prior periods presented. The historical financial statements and footnotes have been recast accordingly. |
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 months ended March 31, 2020 that had a material effect on its condensed consolidated financial statements. In June 2016, the FASB issued Accounting Standards Update (“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 Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Date Codification Improvements to Topic 326, Financial Instruments—Credit Losses Financial Instruments—Credit Losses (Topic 326) and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-02, Leases (Topic 842) Financial Instruments—Credit Losses In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other 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 December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes , No other accounting standards known by the Company to be applicable to it that have been issued by the FASB or other standard-setting bodies and that do not require adoption until a future date are expected to have a material impact on the Company’s condensed consolidated financial statements upon adoption. |
Cyclerion Separation (Tables)
Cyclerion Separation (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
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Summary of assets and liabilities transferred in separation | The transfer of assets and liabilities to Cyclerion was effected through a contribution in accordance with the separation agreement as summarized below (in thousands): 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 year ended December 31, 2019 associated with tenant improvement reimbursement provisions related to the Cyclerion lease in accordance with the separation agreement. |
Summary of the discontinued operations | Three months ended March 31, 2020 2019 Costs and expenses: Research and development $ — $ 21,792 Selling, general and administrative — 15,646 Net loss from discontinued operations $ — $ 37,438 |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
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Schedule of potentially dilutive securities that have been excluded from computation of diluted weighted average shares outstanding | Three Months Ended March 31, 2020 2019 Options to purchase Class A Common Stock 15,647 24,080 Shares subject to repurchase 182 32 Time-vesting restricted stock units 4,945 3,641 Performance-based restricted stock units 543 — Shares subject to issuance under Employee Stock Purchase Plan 105 125 Note Hedge Warrants 8,318 20,250 2022 Convertible Notes 8,318 20,250 2024 Convertible Notes 14,934 — 2026 Convertible Notes 14,934 — 67,926 68,378 |
Collaboration, License, Co-Pr_2
Collaboration, License, Co-Promotion and Other Commercial Agreements (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Table Text Blocks | |
Schedule of revenue attributable to transactions from collaboration and license arrangements | Three Months Ended March 31, Collaborative Arrangements Revenue 2020 2019 Linaclotide Collaboration Agreements: Allergan (North America) $ 71,692 $ 64,785 Allergan (Europe and other) 643 420 AstraZeneca (China, including Hong Kong and Macau) 332 — Astellas (Japan) 479 — Co-Promotion and Other Agreements: Alnylam (GIVLAARI) 945 — Other 354 947 Total collaborative arrangements revenue $ 74,445 $ 66,152 Sale of API Linaclotide License Agreements: Astellas (Japan) $ — $ 2,575 AstraZeneca (China, including Hong Kong and Macau) 5,498 — Other — 3 Total sale of API $ 5,498 $ 2,578 |
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 months ended March 31, 2020 and 2019 as follows (in thousands): Three Months Ended March 31, 2020 2019 Collaborative arrangements revenue related to sales of LINZESS in the U.S. $ 71,142 $ 64,293 Royalty revenue 550 492 Total collaborative arrangements revenue $ 71,692 $ 64,785 |
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 months ended March 31, 2020 and 2019 (in thousands): Three Months Ended March 31, 2020 2019 Collaborative arrangements revenue related to sales of LINZESS in the U.S. (1) $ 71,142 $ 64,293 Selling, general and administrative costs incurred by the Company (1) (8,674) (10,277) The Company’s share of net profit $ 62,468 $ 54,016 (1) Includes only collaborative arrangements revenue or selling, general and administrative costs attributable to the cost-sharing arrangement with Allergan. Excludes approximately $0.2 million and approximately $0.5 million for the three months ended March 31, 2020 and 2019, respectively, related to patent prosecution and patent litigation costs recognized in connection with the collaboration agreement with Allergan for North America. |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
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 March 31, 2020 (Level 1) (Level 2) (Level 3) Assets: Cash and cash equivalents: Money market funds $ 215,790 $ 215,790 $ — $ — Restricted cash: Money market funds 2,221 2,221 — — Convertible Note Hedges 15,847 — — 15,847 Total assets measured at fair value $ 233,858 $ 218,011 $ — $ 15,847 Liabilities: Note Hedge Warrants $ 12,207 $ — $ — $ 12,207 Total liabilities measured at fair value $ 12,207 $ — $ — $ 12,207 Fair Value Measurements at Reporting Date Using Quoted Prices in Significant Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs December 31, 2019 (Level 1) (Level 2) (Level 3) Assets: Cash and cash equivalents: Money market funds $ 139,190 $ 139,190 $ — $ — Repurchase agreements 37,800 37,800 — — Restricted cash: Money market funds 2,221 2,221 — — Convertible Note Hedges 31,366 — — 31,366 Total assets measured at fair value $ 210,577 $ 179,211 $ — $ 31,366 Liabilities: Note Hedge Warrants $ 24,260 $ — $ — $ 24,260 Total liabilities measured at fair value $ 24,260 $ — $ — $ 24,260 |
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 March 31, 2020 and December 31, 2019: Three Months Ended Year Ended March 31, December 31, 2020 2019 Convertible Note Hedge Convertible Note Hedge Note Hedges Warrants Note Hedges Warrants Risk-free interest rate (1) 0.2 % 0.3 % 1.6 % 1.6 % Expected term 2.2 2.8 2.5 3.0 Stock price (2) $ 10.09 $ 10.09 $ 13.31 $ 13.31 Strike price (3) $ 14.51 $ 18.82 $ 14.51 $ 18.82 Common stock volatility (4) 52.4 % 50.1 % 49.1 % 46.5 % Dividend yield (5) — % — % — % — % (1) Based on U.S. Treasury yield curve, with terms commensurate with the expected 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 days of the quarters ended March 31, 2020 and December 31, 2019, respectively. (3) As per the respective agreements for the Convertible Note Hedges and Note Hedge Warrants. (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, 2019 through March 31, 2020 (in thousands): Convertible Note Hedge Note Hedges Warrants Balance at December 31, 2019 $ 31,366 $ (24,260) Change in fair value, recorded as a component of (loss) gain on derivatives (15,519) 12,053 Balance at March 31, 2020 $ 15,847 $ (12,207) |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Table Text Blocks | |
Schedule of accrued expenses and other current liabilities | Accrued expenses and other current liabilities consisted of the following (in thousands): March 31, 2020 December 31, 2019 Salaries $ 1,582 $ 2,973 Accrued vacation 3,007 2,540 Accrued incentive compensation 3,672 11,760 Other employee benefits 2,084 1,260 Professional fees 2,036 1,421 Accrued interest 2,105 301 Other 4,233 10,210 $ 18,719 $ 30,465 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
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 months ended March 31, 2020 and 2019 are as follows (in thousands): Three Months Ended March 31, 2020 2019 Operating lease cost during period $ 633 $ 4,525 Short-term lease cost 372 389 Total lease cost $ 1,005 $ 4,914 Supplemental cash flow information related to leases for the periods reported is as follows: Three Months Ended March 31, 2020 2019 Right-of-use assets obtained in exchange for new operating lease upon adoption of ASC 842 (in thousands) $ — $ 88,299 Cash paid for amounts included in the measurement of lease liabilities (in thousands) 43 4,412 Weighted-average remaining lease term of operating leases (in years) 10.0 5.7 Weighted-average discount rate of operating leases 5.8 % 6.7 % |
Schedule of future minimum lease payments under non-cancelable operating leases | Future minimum lease payments under non-cancelable operating leases as of March 31, 2020 are as follows (in thousands): Operating Lease Payments 2020 (1) $ 1,102 2021 3,128 2022 3,129 2023 3,065 2024 3,126 2025 and thereafter 18,044 Total future minimum lease payments 31,594 Less: present value adjustment (8,072) Operating lease liabilities at March 31, 2020 23,522 Less: current portion of operating lease liabilities (1,876) Operating lease liabilities, net of current portion $ 21,646 (1) For the nine months ending December 31, 2020. |
Notes Payable (Tables)
Notes Payable (Tables) | 3 Months Ended | 9 Months Ended |
Mar. 31, 2020 | Sep. 30, 2019 | |
Table Text Blocks | ||
Schedule of outstanding Convertible Note | The Company’s outstanding balances for the convertible senior notes as of March 31, 2020 and December 31, 2019 consisted of the following (in thousands): March 31, 2020 December 31, 2019 Liability component: Principal: 2022 Convertible Notes $ 120,699 $ 120,699 2024 Convertible Notes 200,000 200,000 2026 Convertible Notes 200,000 200,000 Less: unamortized debt discount (99,631) (104,700) Less: unamortized debt issuance costs (7,659) (8,005) Net carrying amount $ 413,409 $ 407,994 Equity component: 2022 Convertible Notes 19,807 19,807 2024 Convertible Notes 41,152 41,152 2026 Convertible Notes 51,350 51,350 Total equity component $ 112,309 $ 112,309 | |
Schedule of interest expense related to Convertible Notes | The following table sets forth total interest expense recognized related to convertible senior notes during the three months ended March 31, 2020 and 2019 (in thousands): Three Months Ended March 31, 2020 2019 Contractual interest expense $ 1,805 $ 1,888 Amortization of debt issuance costs 346 272 Amortization of debt discount 5,069 4,075 Total interest expense $ 7,220 $ 6,235 | |
Schedule of future minimum payments details of debt | 2020 (1) $ 7,216 2021 7,216 2022 126,556 2023 4,500 2024 203,750 2025 3,000 2026 and Thereafter 201,500 Total future minimum payments under the convertible senior notes 553,738 Less: amounts representing interest (33,039) Less: unamortized debt discount (99,631) Less: unamortized debt issuance costs (7,659) Convertible senior notes balance $ 413,409 (1) For the nine months ending December 31, 2020. | Future minimum payments under the convertible senior notes as of March 31, 2020 are as follows (in thousands): |
Employee Stock Benefit Plans (T
Employee Stock Benefit Plans (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Table Text Blocks | |
Share-based compensation expense reflected in the condensed consolidated statements of operations | The following table summarizes share-based compensation expense (in thousands): Three Months Ended March 31, 2020 2019 Research and development $ 1,396 $ 2,918 Selling, general and administrative 4,968 10,499 Restructuring expenses — 517 $ 6,364 $ 13,934 |
Nature of Business - Notes Paya
Nature of Business - Notes Payable (Details) - USD ($) $ in Thousands | 1 Months Ended | |||||
Aug. 31, 2019 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Aug. 12, 2019 | Jun. 30, 2015 | |
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 | $ 335,700 | |||
Stated interest rate (as a percent) | 2.25% | 2.25% | ||||
Fees and expenses | $ 11,700 | |||||
Debt redeemed/repurchased | $ 215,000 | |||||
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 | ||
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 | ||
Stated interest rate (as a percent) | 1.50% | |||||
8.375% Notes due 2026 | Notes Payable | ||||||
Notes Payable | ||||||
Stated interest rate (as a percent) | 8.375% |
Cyclerion Separation - Separati
Cyclerion Separation - Separation Agreement (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | Apr. 01, 2019 |
Assets: | |||
Prepaid expenses and other current assets | $ 10,443 | $ 10,685 | |
Property and equipment, net | 12,164 | 12,429 | |
Other assets | 838 | 790 | |
Total assets | 404,005 | 402,748 | |
Liabilities: | |||
Accrued research and development costs | 2,286 | 2,956 | |
Accrued expenses and other current liabilities | $ 18,719 | $ 30,465 | |
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 | ||
Total liabilities | 8,822 | ||
Net Assets Transferred to Cyclerion | $ 2,609 |
Cyclerion Separation - General
Cyclerion Separation - General Information (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020USD ($)agreement | Mar. 31, 2019USD ($) | Dec. 31, 2019USD ($) | |
Cyclerion Separation | |||
Transition services agreements | agreement | 2 | ||
Initial term of service, low end of range | 1 year | ||
Initial term of service, high end of range | 2 years | ||
Research and Development Expense | $ 28,027 | $ 32,198 | |
Affiliated Entity | |||
Cyclerion Separation | |||
Tenant improvement reimbursement provisions | $ 1,300 | ||
Affiliated Entity | Research and development | Development Agreement [Member] | |||
Cyclerion Separation | |||
Research and Development Expense | $ 1,000 |
Cyclerion Separation - Summary
Cyclerion Separation - Summary of Expenses of Cyclerion (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2020 | |
Net Loss from Discontinued Operations | ||
Net loss from discontinued operations | $ 37,438 | |
sGC Business | Discontinued Operations, Disposed of by Means Other than Sale, Spinoff | ||
Net Loss from Discontinued Operations | ||
Net loss from discontinued operations | 37,438 | |
Liabilities | $ 0 | |
Assets | $ 0 | |
Research and development | sGC Business | Discontinued Operations, Disposed of by Means Other than Sale, Spinoff | ||
Net Loss from Discontinued Operations | ||
Net loss from discontinued operations | 21,792 | |
Selling, general and administrative | sGC Business | Discontinued Operations, Disposed of by Means Other than Sale, Spinoff | ||
Net Loss from Discontinued Operations | ||
Net loss from discontinued operations | $ 15,646 |
Net Income (Loss) Per Share (De
Net Income (Loss) Per Share (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Potentially dilutive securities | ||
Total potentially dilutive securities excluded from the computation of diluted weighted average shares outstanding (in shares) | 67,926 | 68,378 |
Employee stock options | ||
Potentially dilutive securities | ||
Total potentially dilutive securities excluded from the computation of diluted weighted average shares outstanding (in shares) | 15,647 | 24,080 |
Shares subject to repurchase | ||
Potentially dilutive securities | ||
Total potentially dilutive securities excluded from the computation of diluted weighted average shares outstanding (in shares) | 182 | 32 |
Time-vesting restricted stock units | ||
Potentially dilutive securities | ||
Total potentially dilutive securities excluded from the computation of diluted weighted average shares outstanding (in shares) | 4,945 | 3,641 |
Performance-based restricted stock units | ||
Potentially dilutive securities | ||
Total potentially dilutive securities excluded from the computation of diluted weighted average shares outstanding (in shares) | 543 | |
Employee Stock Purchase Plan | ||
Potentially dilutive securities | ||
Total potentially dilutive securities excluded from the computation of diluted weighted average shares outstanding (in shares) | 105 | 125 |
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 |
Collaboration, License, Co-Pr_3
Collaboration, License, Co-Promotion and Other Commercial Agreements - Summary (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenues: | ||
Revenue | $ 79,943 | $ 68,730 |
Collaborative arrangements revenue | ||
Revenues: | ||
Revenue | 74,445 | 66,152 |
Collaborative arrangement, other agreements | ||
Revenues: | ||
Revenue | 354 | 947 |
Sale of active pharmaceutical ingredient | ||
Revenues: | ||
Revenue | 5,498 | 2,578 |
Allergan | North America | Collaborative arrangements revenue | ||
Revenues: | ||
Revenue | 71,692 | 64,785 |
Allergan | North America | Collaborative arrangement, collaboration and license agreements | ||
Revenues: | ||
Revenue | 71,692 | 64,785 |
Allergan | Europe and Other | Collaborative arrangement, collaboration and license agreements | ||
Revenues: | ||
Revenue | 643 | 420 |
AstraZeneca | Sale of active pharmaceutical ingredient | ||
Revenues: | ||
Revenue | 3 | |
AstraZeneca | China, Hong Kong, and Macau | Collaborative arrangement, collaboration and license agreements | ||
Revenues: | ||
Revenue | 332 | |
AstraZeneca | China, Hong Kong, and Macau | Sale of active pharmaceutical ingredient | ||
Revenues: | ||
Revenue | 5,498 | |
Astellas Pharma Inc. | Japan | Collaborative arrangement, collaboration and license agreements | ||
Revenues: | ||
Revenue | 479 | |
Astellas Pharma Inc. | Japan | Sale of active pharmaceutical ingredient | ||
Revenues: | ||
Revenue | $ 2,575 | |
Alnylam | Collaborative arrangement, co-promotion and other agreements | ||
Revenues: | ||
Revenue | $ 945 |
Collaboration, License, Co-Pr_4
Collaboration, License, Co-Promotion and Other Commercial Agreements - Accounts Receivable (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Accounts receivable, net | ||
Accounts receivable, net | $ 22,795 | $ 32,597 |
Accounts payable due related party | 1,058 | 1,509 |
Collaborative arrangements and active pharmaceutical ingredient | ||
Accounts receivable, net | ||
Accounts receivable, net | 40,500 | 43,900 |
Accounts receivable, net and related party accounts receivable, net, net of related party accounts payable | 73,400 | 110,100 |
Accounts payable due related party | 4,600 | $ 4,100 |
Deferred revenue | $ 900 |
Collaboration, License, Co-Pr_5
Collaboration, License, Co-Promotion and Other Commercial Agreements - North America - General Information (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020USD ($)itempayment | Mar. 31, 2019USD ($) | |
Collaboration, License and Co-Promotion Agreements | ||
Research and development expense | $ 28,027 | $ 32,198 |
Sales milestones | ||
Collaboration, License and Co-Promotion Agreements | ||
Sales-related milestone if certain conditions are met | 100,000 | |
Allergan | ||
Collaboration, License and Co-Promotion Agreements | ||
Equity investment in the entity's capital stock | 25,000 | |
Research and development expense | 6,600 | 10,000 |
Net cost sharing offset or incremental expense related to research and development expense | $ 800 | $ 3,200 |
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 | $ 205,000 | |
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 - Collaborative Arrangements Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenues: | ||
Revenue | $ 79,943 | $ 68,730 |
Collaborative arrangements revenue | ||
Revenues: | ||
Revenue | 74,445 | 66,152 |
Allergan | North America | Collaborative arrangements revenue | ||
Revenues: | ||
Revenue | 71,692 | 64,785 |
Allergan | North America | Collaborative arrangements, LINZESS | ||
Revenues: | ||
Revenue | 71,142 | 64,293 |
Allergan | North America | Royalty | ||
Revenues: | ||
Revenue | $ 550 | $ 492 |
Collaboration, License, Co-Pr_7
Collaboration, License, Co-Promotion and Other Commercial Agreements - North America - Commercial Efforts (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Collaboration, License and Co-Promotion Agreements | ||
Revenue | $ 79,943 | $ 68,730 |
Collaborative arrangements revenue | ||
Collaboration, License and Co-Promotion Agreements | ||
Revenue | 74,445 | 66,152 |
Collaborative arrangements, LINZESS | Allergan | ||
Collaboration, License and Co-Promotion Agreements | ||
Patent and litigation costs | 200 | 500 |
Collaborative arrangements, LINZESS | Allergan | U.S. | ||
Collaboration, License and Co-Promotion Agreements | ||
Revenue | 71,142 | 64,293 |
Selling, general and administrative costs incurred by the Company | (8,674) | (10,277) |
The Company's share of net profit | $ 62,468 | $ 54,016 |
Collaboration, License, Co-Pr_8
Collaboration, License, Co-Promotion and Other Commercial Agreements - North America - Royalty Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenues: | ||
Revenue | $ 79,943 | $ 68,730 |
Collaborative arrangements revenue | ||
Revenues: | ||
Revenue | 74,445 | 66,152 |
Collaborative arrangements revenue | North America | Allergan | ||
Revenues: | ||
Revenue | 71,692 | 64,785 |
Royalty | North America | Allergan | ||
Revenues: | ||
Revenue | 550 | 492 |
Royalty | Canada and Mexico | Allergan | ||
Revenues: | ||
Revenue | $ 600 | $ 500 |
Collaboration, License, Co-Pr_9
Collaboration, License, Co-Promotion and Other Commercial Agreements - European and Other Territories (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | Oct. 31, 2015 | Sep. 30, 2012 | |
Collaboration, License and Co-Promotion Agreements | ||||
Revenue | $ 79,943 | $ 68,730 | ||
Collaborative arrangements revenue | ||||
Collaboration, License and Co-Promotion Agreements | ||||
Revenue | $ 74,445 | 66,152 | ||
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 | $ 600 | $ 400 |
Collaboration, License, Co-P_10
Collaboration, License, Co-Promotion and Other Commercial Agreements - Japan (Details) $ in Thousands | Aug. 01, 2019USD ($) | Nov. 30, 2009USD ($) | Mar. 31, 2020USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($)payment | Dec. 31, 2016USD ($) |
Collaboration, License and Co-Promotion Agreements | ||||||
Revenue | $ 79,943 | $ 68,730 | ||||
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 | 74,445 | 66,152 | ||||
Collaborative arrangement, collaboration and license agreements | Astellas Pharma Inc. | Japan | ||||||
Collaboration, License and Co-Promotion Agreements | ||||||
Revenue | 479 | |||||
Revenue remaining performance obligation | $ 20,400 | |||||
Non-refundable upfront payment | $ 10,000 | |||||
Sale of active pharmaceutical ingredient | ||||||
Collaboration, License and Co-Promotion Agreements | ||||||
Revenue | 5,498 | 2,578 | ||||
Sale of active pharmaceutical ingredient | Astellas Pharma Inc. | Japan | ||||||
Collaboration, License and Co-Promotion Agreements | ||||||
Revenue | 2,575 | |||||
Revenue remaining performance obligation | $ 0 | |||||
Sale of active pharmaceutical ingredient | Astellas Pharma Inc., 2009 License Agreement | Japan | ||||||
Collaboration, License and Co-Promotion Agreements | ||||||
Revenue | $ 2,600 | |||||
Royalty | Astellas Pharma Inc. | Japan | ||||||
Collaboration, License and Co-Promotion Agreements | ||||||
Revenue | $ 400 |
Collaboration, License, Co-P_11
Collaboration, License, Co-Promotion and Other Commercial Agreements - China, Hong Kong and Macau (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | |
Sep. 30, 2019USD ($)installment | Mar. 31, 2020USD ($) | Mar. 31, 2019USD ($) | |
Collaboration, License and Co-Promotion Agreements | |||
Revenue | $ 79,943 | $ 68,730 | |
Collaborative arrangements revenue | |||
Collaboration, License and Co-Promotion Agreements | |||
Revenue | 74,445 | 66,152 | |
Sale of active pharmaceutical ingredient | |||
Collaboration, License and Co-Promotion Agreements | |||
Revenue | 5,498 | 2,578 | |
AstraZeneca | Sale of active pharmaceutical ingredient | |||
Collaboration, License and Co-Promotion Agreements | |||
Revenue | 3 | ||
AstraZeneca | China, Hong Kong, and Macau | Collaborative arrangements revenue | |||
Collaboration, License and Co-Promotion Agreements | |||
Collaborative arrangement, significant financing component, transaction price | $ 2,600 | ||
Collaborative arrangement, expected interest income | 2,600 | ||
AstraZeneca | China, Hong Kong, and Macau | Collaborative arrangement, collaboration and license agreements | |||
Collaboration, License and Co-Promotion Agreements | |||
Revenue | 332 | ||
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 | ||
Pre-launch commercial services and supply chain services | $ 200 | ||
Amount of non-contingent arrangement consideration | $ 35,000 | ||
Non-contingent consideration installments | installment | 3 | ||
Percentage of tiered royalties | 20.00% | ||
Revenue | 32,400 | ||
Interest income | 200 | ||
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 | $ 5,498 | ||
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% | ||
AstraZeneca Service Agreement | China, Hong Kong, and Macau | Collaborative arrangement, collaboration agreements | |||
Collaboration, License and Co-Promotion Agreements | |||
Revenue | $ 200 |
Collaboration, License, Co-P_12
Collaboration, License, Co-Promotion and Other Commercial Agreements - Co-Promotion Agreements (Details) - USD ($) $ in Thousands | Aug. 09, 2019 | Mar. 31, 2020 | Mar. 31, 2019 |
Collaboration, License and Co-Promotion Agreements | |||
Revenue | $ 79,943 | $ 68,730 | |
Collaborative arrangements and active pharmaceutical ingredient | |||
Collaboration, License and Co-Promotion Agreements | |||
Deferred revenue | 900 | ||
Collaborative arrangements revenue | |||
Collaboration, License and Co-Promotion Agreements | |||
Revenue | 74,445 | $ 66,152 | |
Alnylam | Collaborative arrangement, co-promotion and other agreements | |||
Collaboration, License and Co-Promotion Agreements | |||
Revenue | 945 | ||
Alnylam | Collaborative arrangement, promotion agreements | |||
Collaboration, License and Co-Promotion Agreements | |||
Total annual service fees due | $ 9,500 | ||
Term of agreement | 3 years | ||
Revenue | 900 | ||
Deferred revenue | 900 | ||
Alnylam | Service fees | |||
Collaboration, License and Co-Promotion Agreements | |||
Revenue | $ 900 |
Collaboration, License, Co-P_13
Collaboration, License, Co-Promotion and Other Commercial Agreements - Other Collaborations and License Agreements (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Collaboration, License and Co-Promotion Agreements | ||
Research and development | $ 28,027 | $ 32,198 |
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 | |
Collaborative arrangement, other agreements | ||
Collaboration, License and Co-Promotion Agreements | ||
Revenue related to nonrefundable upfront payments | 500 | |
Research and development | 0 | $ 0 |
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) | Mar. 31, 2020 |
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 | Mar. 31, 2020 | Dec. 31, 2019 |
Assets: | ||
Convertible note hedges | $ 15,847 | $ 31,366 |
Total assets measured at fair value | 233,858 | 210,577 |
Liabilities: | ||
Note hedge warrants | 12,207 | 24,260 |
Total liabilities measured at fair value | 12,207 | 24,260 |
Money market funds | ||
Assets: | ||
Cash and cash equivalents | 215,790 | 139,190 |
Restricted cash | 2,221 | 2,221 |
Repurchase agreements | ||
Assets: | ||
Cash and cash equivalents | 37,800 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Assets: | ||
Total assets measured at fair value | 218,011 | 179,211 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Money market funds | ||
Assets: | ||
Cash and cash equivalents | 215,790 | 139,190 |
Restricted cash | 2,221 | 2,221 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Repurchase agreements | ||
Assets: | ||
Cash and cash equivalents | 37,800 | |
Significant Unobservable Inputs (Level 3) | ||
Assets: | ||
Convertible note hedges | 15,847 | 31,366 |
Total assets measured at fair value | 15,847 | 31,366 |
Liabilities: | ||
Note hedge warrants | 12,207 | 24,260 |
Total liabilities measured at fair value | $ 12,207 | $ 24,260 |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments - Transfers Between Fair Value Measurement Levels (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Fair value transfers | ||
Fair value transfer between measurement levels | $ 0 | $ 0 |
Fair Value of Financial Instr_6
Fair Value of Financial Instruments - Assumptions - Convertible Note Hedges (Details) | Mar. 31, 2020$ / sharesY | Dec. 31, 2019$ / 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 | 0.002 | 0.016 |
Measurement Input, Expected Term | ||
Fair Value of Financial Instruments | ||
Derivative asset, measurement input | Y | 2.2 | 2.5 |
Measurement Input, Share Price | ||
Fair Value of Financial Instruments | ||
Derivative asset, measurement input | 10.09 | 13.31 |
Measurement Input, Exercise Price | ||
Fair Value of Financial Instruments | ||
Derivative asset, measurement input | 14.51 | 14.51 |
Measurement Input, Price Volatility | ||
Fair Value of Financial Instruments | ||
Derivative asset, measurement input | 0.524 | 0.491 |
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) | Mar. 31, 2020Y$ / shares | Dec. 31, 2019Y$ / shares |
Fair Value of Financial Instruments | ||
Derivative asset, valuation technique | us-gaap:ValuationTechniqueOptionPricingModelMember | us-gaap:ValuationTechniqueOptionPricingModelMember |
Derivative liability, valuation technique | us-gaap:ValuationTechniqueOptionPricingModelMember | us-gaap:ValuationTechniqueOptionPricingModelMember |
Measurement Input, Risk Free Interest Rate | ||
Fair Value of Financial Instruments | ||
Derivative liability, measurement input | 0.003 | 0.016 |
Measurement Input, Expected Term | ||
Fair Value of Financial Instruments | ||
Derivative liability, measurement input | Y | 2.8 | 3 |
Measurement Input, Share Price | ||
Fair Value of Financial Instruments | ||
Derivative liability, measurement input | 10.09 | 13.31 |
Measurement Input, Exercise Price | ||
Fair Value of Financial Instruments | ||
Derivative liability, measurement input | 18.82 | 18.82 |
Measurement Input, Price Volatility | ||
Fair Value of Financial Instruments | ||
Derivative liability, measurement input | 0.501 | 0.465 |
Measurement Input, Expected Dividend Rate | ||
Fair Value of Financial Instruments | ||
Derivative liability, measurement input | 0 | 0 |
Fair Value of Financial Instr_8
Fair Value of Financial Instruments - Change in Level 3 - Convertible Note Hedges (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Change in Level 3 Assets | |
Balance at beginning of period | $ 31,366 |
Change in fair value, recorded as a component of (loss) gain on derivatives | (15,519) |
Balance at end of period | $ 15,847 |
Fair Value of Financial Instr_9
Fair Value of Financial Instruments - Change in Level 3 - Note Hedge Warrants (Details) - Warrants $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Change in Level 3 Liabilities | |
Balance at beginning of period | $ (24,260) |
Change in fair value, recorded as a component of (loss) gain on derivatives | 12,053 |
Balance at end of period | $ (12,207) |
Fair Value of Financial Inst_10
Fair Value of Financial Instruments - Notes Payable (Details) - Convertible Senior Notes - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | Aug. 31, 2019 | Aug. 12, 2019 | Jun. 30, 2015 |
2.25% Convertible Senior Notes due 2022 | |||||
Fair value disclosures | |||||
Debt Instrument, Repurchased Face Amount | $ 215,000 | ||||
Aggregate principal amount of notes issued | $ 120,699 | $ 120,699 | $ 335,700 | ||
2.25% Convertible Senior Notes due 2022 | Significant Other Observable Inputs (Level 2) | |||||
Fair value disclosures | |||||
Estimated fair value | 124,700 | 141,300 | |||
0.75% Convertible Senior Notes due 2024 | |||||
Fair value disclosures | |||||
Aggregate principal amount of notes issued | 200,000 | 200,000 | 200,000 | $ 200,000 | |
0.75% Convertible Senior Notes due 2024 | Significant Other Observable Inputs (Level 2) | |||||
Fair value disclosures | |||||
Estimated fair value | 202,100 | 235,700 | |||
1.50% Convertible Senior Notes due 2026 | |||||
Fair value disclosures | |||||
Aggregate principal amount of notes issued | 200,000 | 200,000 | $ 200,000 | $ 200,000 | |
1.50% Convertible Senior Notes due 2026 | Significant Other Observable Inputs (Level 2) | |||||
Fair value disclosures | |||||
Estimated fair value | $ 202,400 | $ 240,100 |
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 with Respect to 2024 Convertible Notes and 2026 Convertible Notes | 1 Months Ended | |
Aug. 31, 2019$ / shares$ / itemshares | Mar. 31, 2020$ / item | |
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 | 17.05 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities - Tabular Disclosure (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Accrued Expenses | ||
Salaries | $ 1,582 | $ 2,973 |
Accrued vacation | 3,007 | 2,540 |
Accrued incentive compensation | 3,672 | 11,760 |
Other employee benefits | 2,084 | 1,260 |
Professional fees | 2,036 | 1,421 |
Accrued interest | 2,105 | 301 |
Other | 4,233 | 10,210 |
Total accrued expenses and other current liabilities | $ 18,719 | $ 30,465 |
Accrued Expenses and Other Cu_4
Accrued Expenses and Other Current Liabilities - Additional Information (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Accrued Expenses | ||
Other accrued expenses | $ 4,233 | $ 10,210 |
Unbilled inventories | 900 | 600 |
Equipment for clinical studies | 300 | |
Franchise Taxes | 200 | |
Facility services | 200 | |
Public relations services | $ 200 | |
Other accrued expenses contracted services | 200 | |
Accrued Expenses and Other Current Liabilities | ||
Accrued Expenses | ||
Move activities | 900 | |
Accrued non-cancelable purchase | $ 4,100 |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Lease cost | ||
Operating lease cost during period | $ 633 | $ 4,525 |
Short-term lease cost | 372 | 389 |
Total lease cost | $ 1,005 | $ 4,914 |
Leases - Operating Leases - Sup
Leases - Operating Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Operating leases | ||
Right-of-use assets obtained in exchange for new operating lease upon adoption of ASC 842 | $ 88,299 | |
Cash paid for amounts included in the measurement of lease liabilities | $ 43 | $ 4,412 |
Weighted-average remaining lease term of operating leases (in years) | 10 years | 5 years 8 months 12 days |
Weighted-average discount rate of operating leases (as a percent) | 5.80% | 6.70% |
Leases - Operating Leases - Fut
Leases - Operating Leases - Future Minimum Lease Payments - ASC 842 (Details) $ in Thousands | Mar. 31, 2020USD ($) |
Future minimum lease payments | |
2020 | $ 1,102 |
2021 | 3,128 |
2022 | 3,129 |
2023 | 3,065 |
2024 | 3,126 |
2025 and thereafter | 18,044 |
Total future minimum lease payments | $ 31,594 |
Leases - Operating Leases - Ope
Leases - Operating Leases - Operating Lease Obligations (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Operating lease obligations | ||
Total future minimum lease payments | $ 31,594 | |
Less: amounts representing imputed interest | (8,072) | |
Operating lease liabilities | 23,522 | |
Less: current portion of operating lease obligations | 1,876 | $ 1,146 |
Operating lease obligations, net of current portion | $ 21,646 | $ 22,082 |
Leases - Operating Leases - Sum
Leases - Operating Leases - Summer Street Lease (Details) $ in Thousands | Jun. 11, 2019 | Mar. 31, 2020USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2019USD ($) | Nov. 11, 2019ft² |
Operating leases | |||||
Restricted cash, noncurrent | $ 971 | $ 971 | |||
Weighted-average discount rate of operating leases (as a percent) | 5.80% | 6.70% | |||
Operating lease right-of-use assets | $ 17,447 | 17,743 | |||
Operating lease liability | 23,522 | ||||
Operating lease cost | 633 | $ 4,525 | |||
Summer Street Lease | |||||
Operating leases | |||||
Option to extend the term of the lease | true | ||||
Rentable area leased (in square feet) | ft² | 39,000 | ||||
Operating lease, renewal term | 5 years | ||||
Annual rent escalation (as a percent) | 2.00% | ||||
Restricted cash, noncurrent | $ 1,000 | ||||
Weighted-average discount rate of operating leases (as a percent) | 5.80% | ||||
Operating lease right-of-use assets | $ 17,400 | 17,700 | |||
Operating lease liability | 23,100 | $ 22,800 | |||
Operating lease cost | $ 600 |
Leases - Operating Leases - Bin
Leases - Operating Leases - Binney Street Lease (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Operating leases | ||
Operating lease cost | $ 633 | $ 4,525 |
Binney Street Lease | ||
Operating leases | ||
Operating lease cost | $ 2,600 |
Leases - Operating Leases - Dat
Leases - Operating Leases - Data Center Colocation Lease (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2020 | Dec. 31, 2019 | Jan. 01, 2019 | |
Operating leases | ||||
Operating lease right-of-use assets | $ 17,447 | $ 17,743 | ||
Operating lease liability | $ 23,522 | |||
Asset impairment charge | ||||
Weighted-average discount rate of operating leases (as a percent) | 6.70% | 5.80% | ||
Data Center Lease, Boston, Massachusetts | ||||
Operating leases | ||||
Annual rent escalation (as a percent) | 4.00% | |||
Operating lease right-of-use assets | $ 600 | |||
Operating lease liability | $ 400 | $ 400 | $ 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 | |||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Apr. 30, 2018 | |
Operating leases | ||||
Restricted cash, noncurrent | $ 971 | $ 971 | ||
Operating lease cost | 633 | $ 4,525 | ||
Vehicles, 2018 Vehicle Leases | ||||
Operating leases | ||||
Operating lease, term | 12 months | |||
Operating lease, renewal term | 1 month | |||
Restricted cash, noncurrent | 1,300 | $ 1,300 | ||
Operating lease cost | $ 400 | $ 400 |
Notes Payable - 8.375% Notes Du
Notes Payable - 8.375% Notes Due 2026 (Details) - USD ($) $ in Thousands | 1 Months Ended | ||||
Aug. 31, 2019 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2015 | |
Notes Payable | |||||
Proceeds from partial termination of convertible note hedges and note hedge warrants | $ 3,200 | ||||
8.375% Notes due 2026 | Notes Payable | |||||
Notes Payable | |||||
Stated interest rate (as a percent) | 8.375% | ||||
2.25% Convertible Senior Notes due 2022 | Convertible Senior Notes | |||||
Notes Payable | |||||
Aggregate principal amount of notes issued | $ 120,699 | $ 120,699 | $ 335,700 | ||
Stated interest rate (as a percent) | 2.25% | 2.25% | |||
Debt redeemed/repurchased | $ 215,000 | ||||
Debt redemption/repurchase price | 227,300 | ||||
Loss on extinguishment of debt | 23,400 | ||||
Initial debt issuance costs | 2,800 | ||||
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 | Mar. 31, 2020USD ($)$ / sharesshares | Dec. 31, 2019USD ($) |
Notes Payable | |||||
Payments for convertible note hedges | $ 25,200,000 | $ 21,100,000 | |||
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 | ||||
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 | $ 120,699,000 | ||
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 | Mar. 31, 2020 | Dec. 31, 2019 | Aug. 31, 2019 | Aug. 12, 2019 | Jun. 30, 2015 |
Liability component: | |||||
Long-term Debt, Gross | $ 553,738 | ||||
Less: unamortized debt discount | (99,631) | ||||
Less: unamortized debt issuance costs | (7,659) | ||||
Net carrying amount | 413,409 | ||||
Convertible Senior Notes | |||||
Liability component: | |||||
Less: unamortized debt discount | (99,631) | $ (104,700) | |||
Less: unamortized debt issuance costs | (7,659) | (8,005) | |||
Net carrying amount | 413,409 | 407,994 | |||
Total equity component | 112,309 | 112,309 | |||
2.25% Convertible Senior Notes due 2022 | Convertible Senior Notes | |||||
Liability component: | |||||
Aggregate principal amount of notes issued | 120,699 | 120,699 | $ 335,700 | ||
Total equity component | 19,807 | 19,807 | |||
0.75% Convertible Senior Notes due 2024 | Convertible Senior Notes | |||||
Liability component: | |||||
Aggregate principal amount of notes issued | 200,000 | 200,000 | $ 200,000 | $ 200,000 | |
Total equity component | 41,152 | 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 | $ 200,000 | |
Total equity component | $ 51,350 | $ 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 | Mar. 31, 2020 | |
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 | 9.50% |
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 | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Interest Expense | ||
Contractual interest expense | $ 1,805 | $ 1,888 |
Amortization of debt issuance costs | 346 | 272 |
Amortization of debt discount | 5,069 | 4,075 |
Total interest expense | $ 7,220 | $ 6,235 |
Notes Payable - 2.25% Convert_5
Notes Payable - 2.25% Convertible Senior Notes Due 2022 - Future Minimum Payments (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Future minimum payments of Convertible senior notes | ||
2020 | $ 7,216 | |
2021 | 7,216 | |
2022 | 126,556 | |
2023 | 4,500 | |
2024 | 203,750 | |
2025 | 3,000 | |
2026 and Thereafter | 201,500 | |
Total future minimum payments under the convertible senior notes | 553,738 | |
Less: amounts representing interest | (33,039) | |
Less: unamortized debt discount | (99,631) | |
Less: unamortized debt issuance costs | (7,659) | |
Net carrying amount | 413,409 | |
Convertible Senior Notes | ||
Future minimum payments of Convertible senior notes | ||
Less: unamortized debt discount | (99,631) | $ (104,700) |
Less: unamortized debt issuance costs | (7,659) | (8,005) |
Net carrying amount | $ 413,409 | $ 407,994 |
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 | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
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% | ||||||
Default payment days | 180 days | ||||||
2.25% Convertible Senior Notes due 2022 | Convertible Senior Notes | |||||||
Notes Payable | |||||||
Aggregate principal amount of notes issued | 335,700,000 | $ 120,699,000 | $ 120,699,000 | ||||
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 common stock | 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 common stock | 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 | 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 | $ 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) - Convertible Senior Notes - USD ($) $ in Millions | 1 Months Ended | ||
Aug. 31, 2019 | Jun. 30, 2015 | Mar. 31, 2020 | |
2.25% Convertible Senior Notes due 2022 | |||
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 | 9.50% | ||
0.75% Convertible Senior Notes due 2024 and 1.50% Convertible Senior Notes due 2026 | |||
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 | |||
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] | |||
Debt instrument term | 7 years | ||
Effective interest rate on liability components | 6.50% |
Notes Payable - Convertible Not
Notes Payable - Convertible Note Hedge and Warrant Transactions (Details) - USD ($) $ / shares in Units, $ in Thousands | Apr. 15, 2019 | Jun. 30, 2015 | Mar. 31, 2020 | Dec. 31, 2019 |
Notes Payable | ||||
Long-term asset | $ 15,847 | $ 31,366 | ||
Long-term liability | $ 12,207 | $ 24,260 | ||
Net derivative issuance cost | $ 21,100 | |||
Convertible Note Hedge | ||||
Notes Payable | ||||
Shares issuable upon conversion of debt (in shares) | 20,249,665 | |||
Conversion price (in dollars per share) | $ 14.51 | $ 16.58 | ||
Long-term asset | 91,900 | |||
Note Hedge Warrant Derivatives | ||||
Notes Payable | ||||
Shares into which warrants may be converted (in shares) | 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) | $ 18.82 | $ 21.50 | ||
Note Hedge Warrants | 2.25% Convertible Senior Notes due 2022 | ||||
Notes Payable | ||||
Shares issuable upon conversion of debt (in shares) | 23,135,435 |
Notes Payable - Capped Calls wi
Notes Payable - Capped Calls with Respect to 2024 Convertible Notes and 2026 Convertible Notes (Details) - Capped Calls with Respect to 2024 Convertible Notes and 2026 Convertible Notes $ / shares in Units, $ in Millions | 1 Months Ended | |
Aug. 31, 2019USD ($)$ / shares$ / itemshares | Mar. 31, 2020$ / item | |
Capped Calls | ||
Payment made to enter into Capped Calls | $ 25.2 | |
Strike price (in dollars per share) | $ / shares | $ 13.39 | |
Cap price | $ / item | 17.05 | 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 | |
Equity component of issuance costs for convertible senior notes | $ 0.2 |
Employee Stock Benefit Plans -
Employee Stock Benefit Plans - Share-based Compensation Reflected in the Consolidated Statement of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Employee Stock Benefit Plans | ||
Share-based compensation expense | $ 6,364 | $ 13,934 |
Research and development | ||
Employee Stock Benefit Plans | ||
Share-based compensation expense | 1,396 | 2,918 |
Selling, general and administrative | ||
Employee Stock Benefit Plans | ||
Share-based compensation expense | $ 4,968 | 10,499 |
Restructuring expenses | ||
Employee Stock Benefit Plans | ||
Share-based compensation expense | $ 517 |
Employee Stock Benefit Plans _2
Employee Stock Benefit Plans - Workforce Reduction (Details) $ in Thousands | Feb. 07, 2019employee | Mar. 31, 2020USD ($) | Mar. 31, 2019USD ($) |
Employee Stock Benefit Plans | |||
Share-based compensation expense | $ 6,364 | $ 13,934 | |
Reduction in Workforce, February 7, 2019 | |||
Workforce Reduction | |||
Number of employees expected to be eliminated | employee | 35 | ||
Employee Stock Benefit Plans | |||
Share-based compensation expense | $ 500 |
Employee Stock Benefit Plans _3
Employee Stock Benefit Plans - Share-based Compensation Expense (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Employee Stock Benefit Plans | |
Share-based compensation expense, other modifications | $ 2.4 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Related Party Transactions | |||
Accounts payable due related party | $ 1,058 | $ 1,509 | |
Investor | Allergan | |||
Related Party Transactions | |||
Accounts receivable | 73,400 | 106,000 | |
Board of Directors member | |||
Related Party Transactions | |||
Amount of insurance premium paid to the insurance provider | 2,400 | $ 2,500 | |
Related party prepaid assets | 600 | ||
Accounts payable due to related party | 0 | 0 | |
Board of Directors member | Cyclerion Therapeutics, Inc. | |||
Related Party Transactions | |||
Accounts payable due related party | $ 1,100 | $ 1,500 |
Workforce Reduction - General I
Workforce Reduction - General Information (Details) $ in Thousands | Feb. 07, 2019employee | Mar. 31, 2020USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2019USD ($) |
Restructuring expenses | ||||
Restructuring expenses | $ 0 | $ 3,328 | ||
Restructuring accruals | $ 200 | $ 200 | ||
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 | $ 3,300 |