Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Jan. 31, 2023 | Jun. 30, 2022 | |
Cover [Abstract] | |||
Entity Central Index Key | 0001446847 | ||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
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 Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
ICFR Auditor Attestation Flag | true | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 1,555,346,291 | ||
Entity Common Stock, Shares Outstanding | 154,158,046 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Auditor Name | Ernst & Young LLP | ||
Auditor Firm ID | 42 | ||
Auditor Location | Boston, Massachusetts |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 656,203 | $ 620,129 |
Accounts receivable, net | 115,458 | 114,042 |
Prepaid expenses and other current assets | 7,715 | 8,689 |
Restricted cash | 1,250 | 1,250 |
Convertible note hedges | 1,115 | |
Total current assets | 780,626 | 745,225 |
Restricted cash, net of current portion | 485 | 485 |
Accounts receivable, net of current portion | 14,589 | 23,998 |
Property and equipment, net | 6,288 | 7,575 |
Operating lease right-of-use assets | 14,023 | 15,350 |
Deferred tax assets | 283,661 | 333,294 |
Other assets | 847 | 1,000 |
Total assets | 1,100,519 | 1,126,927 |
Current liabilities: | ||
Accounts payable | 483 | 935 |
Accrued research and development costs | 5,258 | 15,896 |
Accrued expenses and other current liabilities | 16,700 | 23,566 |
Current portion of operating lease liabilities | 3,065 | 3,127 |
Current portion of convertible senior notes | 116,858 | |
Note hedge warrants | 19 | 1,316 |
Total current liabilities | 25,525 | 161,698 |
Convertible senior notes, net of current portion | 396,251 | 337,333 |
Operating lease obligations, net of current portion | 16,599 | 18,484 |
Other liabilities | 9,766 | 3,501 |
Commitments and contingencies | ||
Stockholders' equity: | ||
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 154,026,949 shares issued and outstanding at December 31, 2022 and 500,000,000 shares authorized and 162,036,461 shares issued and outstanding at December 31, 2021 | 154 | 162 |
Additional paid-in capital | 1,348,600 | 1,543,357 |
Accumulated deficit | (696,376) | (937,608) |
Total stockholders' equity | 652,378 | 605,911 |
Total liabilities and stockholders' equity | $ 1,100,519 | $ 1,126,927 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
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 | 154,026,949 | 162,036,461 |
Common stock, shares outstanding | 154,026,949 | 162,036,461 |
Consolidated Statements of Inco
Consolidated Statements of Income and Comprehensive Income - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenues: | |||
Total revenues | $ 410,596 | $ 413,753 | $ 389,523 |
Operating expenses: | |||
Cost of revenues | 3,136 | ||
Research and development | 44,265 | 70,405 | 88,062 |
Selling, general and administrative | 115,994 | 111,133 | 140,003 |
Restructuring expenses | (44) | 15,382 | |
Total operating expenses | 160,259 | 181,494 | 246,583 |
Income from operations | 250,337 | 232,259 | 142,940 |
Other (expense) income: | |||
Interest expense | (7,598) | (31,150) | (29,478) |
Interest and investment income | 9,501 | 726 | 1,504 |
Gain (loss) on derivatives | 182 | (1,178) | (6,129) |
Other income | 24 | ||
Other (expense) income, net | 2,085 | (31,602) | (34,079) |
Income before income taxes | 252,422 | 200,657 | 108,861 |
Income tax (expense) benefit | (77,357) | 327,791 | (2,685) |
Net income | 175,065 | 528,448 | 106,176 |
Comprehensive income | $ 175,065 | $ 528,448 | $ 106,176 |
Net income per share - basic (in dollars per share) | $ 1.13 | $ 3.26 | $ 0.67 |
Net income per share - diluted (in dollars per share) | $ 0.96 | $ 3.21 | $ 0.66 |
Weighted average shares used in computing net income per share - basic (in shares) | 154,366 | 162,245 | 159,427 |
Weighted average shares used in computing net income per share - diluted (in shares) | 186,312 | 164,418 | 160,655 |
Collaborative arrangements revenue | |||
Revenues: | |||
Total revenues | $ 410,596 | $ 412,784 | $ 381,545 |
Sale of active pharmaceutical ingredient | |||
Revenues: | |||
Total revenues | $ 969 | $ 7,978 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Common Stock | Additional paid-in capital Cumulative Effect, Period of Adoption, Adjustment | Additional paid-in capital | Accumulated deficit Cumulative Effect, Period of Adoption, Adjustment | Accumulated deficit | Cumulative Effect, Period of Adoption, Adjustment | Total |
Balance at Dec. 31, 2019 | $ 158 | $ 1,478,823 | $ (1,572,232) | $ (93,251) | |||
Balance (in shares) at Dec. 31, 2019 | 157,535,962 | ||||||
Increase (Decrease) in Stockholders' Equity (Deficit) | |||||||
Issuance of common stock related to share-based awards and employee stock purchase plan | $ 3 | 18,537 | 18,540 | ||||
Issuance of common stock related to share-based awards and employee stock purchase plan (in shares) | 3,080,713 | ||||||
Share-based compensation expense related to share-based awards and employee stock purchase plan | 31,175 | 31,175 | |||||
Net income | 106,176 | 106,176 | |||||
Balance at Dec. 31, 2020 | $ 161 | 1,528,535 | (1,466,056) | 62,640 | |||
Balance (in shares) at Dec. 31, 2020 | 160,616,675 | ||||||
Increase (Decrease) in Stockholders' Equity (Deficit) | |||||||
Issuance of common stock related to share-based awards and employee stock purchase plan | $ 3 | 19,678 | 19,681 | ||||
Issuance of common stock related to share-based awards and employee stock purchase plan (in shares) | 3,776,786 | ||||||
Share-based compensation expense related to share-based awards and employee stock purchase plan | 22,281 | 22,281 | |||||
Repurchases of common stock | $ (2) | (27,137) | (27,139) | ||||
Repurchases of common stock (in shares) | (2,357,000) | ||||||
Net income | 528,448 | 528,448 | |||||
Balance at Dec. 31, 2021 | $ 162 | $ (110,217) | 1,543,357 | $ 66,167 | (937,608) | $ (44,050) | $ 605,911 |
Balance (in shares) at Dec. 31, 2021 | 162,036,461 | 162,036,461 | |||||
Increase (Decrease) in Stockholders' Equity (Deficit) | |||||||
Issuance of common stock related to share-based awards and employee stock purchase plan | $ 3 | 11,787 | $ 11,790 | ||||
Issuance of common stock related to share-based awards and employee stock purchase plan (in shares) | 2,756,841 | ||||||
Share-based compensation expense related to share-based awards and employee stock purchase plan | 27,048 | 27,048 | |||||
Repurchases of common stock | $ (11) | (123,375) | $ (123,386) | ||||
Repurchases of common stock (in shares) | (10,766,353) | (10,800,000) | |||||
Net income | 175,065 | $ 175,065 | |||||
Balance at Dec. 31, 2022 | $ 154 | $ 1,348,600 | $ (696,376) | $ 652,378 | |||
Balance (in shares) at Dec. 31, 2022 | 154,026,949 | 154,026,949 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities: | |||
Net income | $ 175,065 | $ 528,448 | $ 106,176 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 1,418 | 1,523 | 3,564 |
Loss on disposal of property and equipment | 2 | 93 | 470 |
Share-based compensation expense | 27,048 | 22,281 | 31,175 |
Change in fair value of note hedge warrants | (1,297) | (10,772) | (12,172) |
Change in fair value of convertible note hedges | 1,115 | 11,950 | 18,301 |
Non-cash interest expense | 1,853 | 23,935 | 22,263 |
Deferred income taxes (including benefit from valuation allowance release) | 65,739 | (333,294) | |
Changes in assets and liabilities: | |||
Accounts receivable and related party accounts receivable, net | 7,993 | 7,712 | 4,091 |
Prepaid expenses and other current assets | 3,224 | 601 | 1,515 |
Inventory, net | 648 | ||
Operating lease right-of-use assets | 1,327 | 1,226 | 1,167 |
Other assets | 153 | (57) | (153) |
Accounts payable, related party accounts payable, and accrued expenses | (8,116) | (2,644) | (7,523) |
Accrued research and development costs | (10,638) | 13,998 | (1,058) |
Operating lease liabilities | (1,947) | (1,835) | 218 |
Deferred revenue | (875) | ||
Other liabilities | 10,824 | (1,270) | 1,029 |
Net cash provided by operating activities | 273,763 | 261,895 | 168,836 |
Cash flows from investing activities: | |||
Purchases of property and equipment | (136) | (265) | (1,842) |
Net cash (used in) investing activities | (136) | (265) | (1,842) |
Cash flows from financing activities: | |||
Proceeds from exercise of stock options and employee stock purchase plan | 9,540 | 19,581 | 18,546 |
Payment on 2022 Convertible Notes | (120,699) | ||
Repurchases of common stock | (126,394) | (24,131) | |
Net cash provided by (used in) financing activities | (237,553) | (4,550) | 18,546 |
Net increase in cash, cash equivalents and restricted cash | 36,074 | 257,080 | 185,540 |
Cash, cash equivalents and restricted cash, beginning of period | 621,864 | 364,784 | 179,244 |
Cash, cash equivalents and restricted cash, end of period | 657,938 | 621,864 | 364,784 |
Supplemental cash flow disclosure: | |||
Cash paid for interest | 5,745 | 7,216 | 7,216 |
Cash paid for income taxes | 4,615 | 3,452 | $ 1,848 |
Non-cash investing and financing activities | |||
Stock repurchases payable in accrued expenses | 3,009 | ||
Stock option exercise proceeds receivable in other current assets | $ 2,351 | $ 101 |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Reconciliation of cash, cash equivalents, and restricted cash to the condensed consolidated balance sheets | ||||
Cash and cash equivalents | $ 656,203 | $ 620,129 | $ 362,564 | |
Restricted cash | 1,735 | 1,735 | 2,220 | |
Total cash, cash equivalents, and restricted cash | $ 657,938 | $ 621,864 | $ 364,784 | $ 179,244 |
Nature of Business
Nature of Business | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure Text Block | |
Nature of Business | 1. Nature of Business Ironwood Pharmaceuticals, Inc. (the “Company”) is a gastrointestinal (“GI”) healthcare company dedicated to advancing the treatment of GI diseases and redefining the standard of care for GI patients. The Company is focused on the development and commercialization of innovative GI product opportunities in areas of significant unmet need, leveraging its demonstrated expertise and capabilities in GI diseases. LINZESS ® (linaclotide), the Company’s commercial product, is the first product approved by the United States Food and Drug Administration (the “U.S. FDA”) in a class of GI medicines called guanylate cyclase type C agonists (“GC-C agonists”) and is indicated for adult men and women suffering from irritable bowel syndrome with constipation (“IBS-C”) or chronic idiopathic constipation (“CIC”). LINZESS is available to adult men and women suffering from IBS-C or CIC in the United States (the “U.S.”) and Mexico and to adult men and women suffering from IBS-C in Japan and China. Linaclotide is available under the trademarked name CONSTELLA ® 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, AbbVie Inc. (together with its affiliates, “AbbVie”), began commercializing LINZESS in the U.S. in December 2012. Under the Company’s collaboration for North America with AbbVie, total net sales of LINZESS in the U.S., as recorded by AbbVie, are reduced by commercial costs incurred by each party, and the resulting amount is shared equally between the Company and AbbVie. Additionally, development costs are shared equally between the Company and AbbVie. The Company and AbbVie 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. Outside of the U.S., the Company earns royalties as a percentage of net sales of products containing linaclotide as an active ingredient by the Company’s collaboration partners. AbbVie 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 AbbVie License Territory”). In addition, AbbVie 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, manufacture, and commercialize linaclotide in Japan. AstraZeneca AB (together with its affiliates) (“AstraZeneca”), the Company’s partner in China, has the exclusive right to develop, manufacture, and commercialize products containing linaclotide in China (including Hong Kong and Macau) (the “AstraZeneca License Territory”). The Company has a collaboration and license option agreement (the “COUR Collaboration Agreement”) with COUR Pharmaceutical Development Company, Inc. (“COUR”), a biotechnology company developing novel immune-modifying nanoparticles to treat autoimmune diseases. The COUR Collaboration Agreement grants the Company an option to acquire an exclusive license to research, develop, manufacture and commercialize, in the U.S., products containing CNP-104, a potential treatment for primary biliary cholangitis, a rare autoimmune disease targeting the liver. These and other agreements are more fully described in Note 4, Collaboration, License, and Other Agreements, The Company is also advancing IW-3300, a GC-C agonist, for the potential treatment of visceral pain conditions, including interstitial cystitis / bladder pain syndrome (“IC/BPS”) and endometriosis. The Company was incorporated in Delaware on January 5, 1998 as Microbia, Inc. On April 7, 2008, the Company changed its name to Ironwood Pharmaceuticals, Inc. To date, the Company has dedicated a majority of its activities to the research, development and commercialization of linaclotide, as well as to the research and development of its other product candidates. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure Text Block | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Principles of Consolidation The accompanying consolidated financial statements include the accounts of Ironwood and its wholly-owned subsidiaries, as of December 31, 2022, Ironwood Pharmaceuticals Securities Corporation and Ironwood Pharmaceuticals GmbH. All intercompany transactions and balances are eliminated in consolidation. Segment Information Operating segments are components of an enterprise for which separate financial information is available and is evaluated regularly by the Company’s chief operating decision-maker in deciding how to allocate resources and in assessing performance. The Company currently operates in one reportable business segment – human therapeutics. Reclassifications Use of Estimates The preparation of consolidated financial statements in accordance with U.S. generally accepted accounting principles requires the Company’s management to make estimates and judgments that may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the 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 consolidated financial statements include those related to revenue recognition; accounts receivable; 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; balance sheet classification of convertible notes; fair value of derivatives; 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. Cash and Cash Equivalents The Company considers all highly liquid investment instruments with a remaining maturity when purchased of three months or less to be cash equivalents. Investments qualifying as cash equivalents primarily consist of money market funds, repurchase agreements, commercial paper, and corporate bonds. The carrying amount of cash equivalents approximates fair value. The amount of cash equivalents included in cash and cash equivalents was $650.2 million and $595.2 million at December 31, 2022 and 2021, respectively. Restricted Cash The Company is contingently liable under unused letters of credit with a bank, related to the Company’s facility lease and vehicle lease agreements, in the amount of $1.7 million as of December 31, 2022 and 2021. The Company records as restricted cash the collateral used to secure these letters of credit. The amount of restricted cash in current assets and non-current assets was $1.3 million and $0.5 million, respectively, at December 31, 2022 and 2021. Concentrations of Suppliers The Company relies on its collaboration partners and their suppliers to manufacture linaclotide API, linaclotide finished drug product, and finished goods. If any of the Company’s collaboration partners and their suppliers were to limit or terminate production or otherwise fail to meet the quality or delivery requirements needed to satisfy the supply commitments, the process of locating and qualifying alternate sources could require up to several months, during which time production could be delayed. Such delays could have a material adverse effect on the Company’s business, financial position and results of operations. Accounts Receivable The Company makes judgments as to its ability to collect outstanding receivables and provides an allowance for credit losses when collection becomes doubtful. Provisions are made based upon a specific review of all significant outstanding invoices and the overall quality and age of those invoices not specifically reviewed. The Company’s receivables relate primarily to amounts reimbursed under its collaboration, license, and other agreements. The Company believes that credit risks associated with these partners are not significant. The Company reviews the need for an allowance for credit losses for its receivables based on various factors including payment history and historical bad debt experience. The Company had no allowance for credit losses as of December 31, 2022 or 2021. Concentrations of Credit Risk Financial instruments that subject the Company to credit risk primarily consist of cash and cash equivalents, restricted cash, and accounts receivable. The Company maintains its cash and cash equivalent balances with high-quality financial institutions and the Company believes that such funds are subject to minimal credit risk. The Company has adopted an investment policy which limits the amounts the Company may invest in certain types of investments, and requires all investments held by the Company to be at least A- rated, thereby reducing credit risk exposure. Accounts receivable primarily consist of amounts due under the linaclotide collaboration agreement with AbbVie for North America (Note 4). The Company does not obtain collateral for its accounts receivable. The Company previously reflected amounts due from Allergan plc (“Allergan”), net of amounts payable to Allergan, prior to its acquisition by AbbVie as related party accounts receivable, net. Following the acquisition of Allergan by AbbVie, the Company determined that AbbVie is not a related party to the Company (Note 15). The percentages of revenue recognized from significant collaborative partners of the Company in the years ended December 31, 2022, 2021 and 2020 as well as the account receivable balances, net of any payables due, at December 31, 2022 and 2021 are included in the following table: Accounts Receivable Revenue December 31, Year Ended December 31, 2022 2021 2022 2021 2020 Collaborative Partner: AbbVie (North America and Europe) 80 % 81 % 98 % 98 % 96 % Property and Equipment Property and equipment, including leasehold improvements, are recorded at cost, and are depreciated when placed into service using the straight-line method based on their estimated useful lives as follows: Estimated Useful Life Asset Description (In Years) Laboratory equipment 5 Computer and office equipment 3 Furniture and fixtures 7 Software 3 Included in property and equipment are certain costs of software obtained for internal use. Costs incurred during the preliminary project stage are expensed as incurred, while costs incurred during the application development stage are capitalized and amortized over the estimated useful life of the software. The Company also capitalizes costs related to specific upgrades and enhancements when it is probable the expenditures will result in additional functionality. Maintenance and training costs related to software obtained for internal use are expensed as incurred. Leasehold improvements are amortized over the shorter of the estimated useful life of the asset or the lease term. Costs for capital assets not yet placed into service have been capitalized as construction in process, and will be depreciated in accordance with the above guidelines once placed into service. Maintenance and repair costs are expensed as incurred. Impairment of Long-Lived Assets The Company regularly reviews the carrying amount of its long-lived assets to determine whether indicators of impairment may exist, which warrant adjustments to carrying values or estimated useful lives. If indications of impairment exist, projected future undiscounted cash flows associated with the asset are compared to the carrying amount to determine whether the asset’s value is recoverable. If the carrying value of the asset exceeds such projected undiscounted cash flows, the asset will be written down to its estimated fair value. Income Taxes The Company provides for income taxes under the asset and liability method. Deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates in effect when the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to reflect the uncertainty associated with their ultimate realization. The Company accounts for uncertain tax positions recognized in the consolidated financial statements in accordance with the provisions of Accounting Standards Codification (“ASC”) Topic 740, Income Taxes Financing Costs Financing costs include costs directly attributable to the Company’s offerings of its equity securities and its debt financings. Costs attributable to equity offerings are charged as a reduction to stockholders’ equity against the proceeds of the offering once the offering is completed. Costs attributable to debt financings are deferred and amortized to interest expense over the term of the debt using the effective interest method. In accordance with ASC Topic 835, Interest Leases The Company’s lease portfolio for the year ended December 31, 2022 included: an office lease for its headquarters location, vehicle leases for its salesforce representatives, and leases for computer and office equipment. The Company determines if an arrangement is a lease at the inception of the contract and determines the classification of its leases at lease commencement. The asset component of the Company’s operating leases is recorded as operating lease right-of-use assets, and the liability component is recorded as current portion of operating lease liabilities and operating lease liabilities, net of current portion in the Company’s consolidated balance sheets. As of December 31, 2022, the Company did not record any finance leases. Right-of-use assets and operating lease liabilities are recognized based on the present value of lease payments over the lease term at the lease commencement date. The lease term used to measure the right-of-use asset and operating lease liability may include options to extend the lease when it is reasonably certain that the Company will exercise the option. The Company accounts for lease components and non-lease components together as a single lease component for the asset class of right-of-use real estate assets. The Company uses an incremental borrowing rate based on the information available at lease commencement in determining the present value of lease payments, if an implicit rate of return is not readily determinable. Operating lease right-of-use assets are adjusted for prepaid rent, initial direct costs, and lease incentives. Right-of-use assets and operating lease liabilities are remeasured upon reassessment events and modifications to leases using the present value of remaining lease payments and estimated incremental borrowing rate at the time of remeasurement, as applicable. Operating lease cost is recognized on a straight-line basis over the lease term, and includes amounts related to short-term leases. The Company has elected to not recognize lease terms with a term of twelve months or less on its balance sheet for all classes of underlying asset types. The Company recognizes variable lease payments as operating expenses in the period in which the obligation for those payments is incurred. Variable lease payments primarily include common area maintenance, utilities, real estate taxes, insurance, and other operating costs that are passed on from the lessor in proportion to the space leased by the Company. Derivative Assets and Liabilities In June 2015, the Company issued Convertible Senior Notes due 2026 (the “2026 Convertible Notes”, and together with the 2022 Convertible Notes and the 2024 Convertible Notes, the “Convertible Senior Notes”). I Derivatives and Hedging These derivatives are recorded as assets or liabilities at fair value each reporting date and the fair value is determined using the Black-Scholes option-pricing model. The changes in fair value are recorded as a component of other (expense) income in the consolidated statements of income. Significant inputs used to determine the fair value include 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 derivative instruments. 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 cover the same number of shares of Class A Common Stock that initially underlie the 2024 Convertible Notes and the 2026 Convertible Notes (subject to anti-dilution and certain other adjustments). These instruments meet the conditions outlined in ASC 815 to be classified in stockholders’ equity (deficit) and are not subsequently remeasured as long as the conditions for equity classification continue to be met. Share Repurchases The Company accounts for repurchases of its Class A Common Stock on the trade date by recording the excess of the repurchase price over the par value entirely to additional paid-in capital. All repurchased shares are retired or constructively retired. Issued and outstanding shares are reduced by shares repurchased. Revenue Recognition The Company’s revenues are generated primarily through collaborative arrangements and license agreements related to the research and development and commercialization of linaclotide. The terms of the collaborative research and development, license, co-promotion and other agreements contain multiple performance obligations which may include (i) licenses, (ii) research and development activities, including participation on joint steering committees, (iii) the manufacture of finished drug product, API, or development materials for a partner, which are reimbursed at a contractually determined rate, and (iv) education or co-promotion activities by the Company’s clinical sales specialists. Non-refundable payments to the Company under these agreements may include (i) up-front license fees, (ii) payments for research and development activities, (iii) payments for the manufacture of finished drug product, API, or development materials, (iv) payments based upon the achievement of certain milestones, (v) payments for sales detailing, promotional support services and medical education initiatives, and (vi) royalties on product sales. The Company receives its share of the net profits or bears its share of the net losses from the sale of linaclotide in the U.S. through its collaboration agreement with AbbVie for North America. The Company has adopted a policy to recognize revenue net of tax withholdings, as applicable. Collaboration, License, and Other Commercial Agreements Upon licensing intellectual property to a customer, the Company determines if the license is distinct from the other performance obligations identified in the arrangement. The Company recognizes revenues from the transaction price, including non-refundable, up-front fees allocated to the license when the license is transferred to the customer if the license has distinct benefit to the customer. For licenses that are combined with other promises, the Company assesses the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time. For performance obligations that are satisfied over time, the Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. The Company’s license and collaboration agreements include milestone payments, such as development and other milestones. The Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price using the most likely amount method at the inception of the agreement. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the control of the Company, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. The transaction price is then allocated to each performance obligation on a relative standalone selling price basis, for which the Company recognizes revenue as or when the performance obligations under the contract are satisfied. The Company re-evaluates the probability of achievement of such milestones and any related constraint at each reporting period, and any adjustments are recorded on a cumulative catch-up basis. Agreements that include the supply of API or drug product for either clinical development or commercial supply at the customer’s discretion are generally considered as options. The Company assesses if these options provide a material right to its partner, and if so, they are accounted for as separate performance obligations. If the Company is entitled to additional payments when the customer exercises these options, any additional payments are recorded as revenue when the customer obtains control of the goods, which is typically upon shipment for sales of API and finished drug product. For agreements that include sales-based royalties, including milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue when the related sales occur. Net Profit or Net Loss Sharing In accordance with ASC Topic 808, Collaborative Arrangements Revenue from Contracts with Customers The Company’s collaborative arrangements revenues generated from sales of LINZESS in the U.S. are considered akin to sales-based royalties. In accordance with the sales-based royalty exception, the Company recognizes its share of the pre-tax commercial net profit or net loss generated from the sales of LINZESS in the U.S. in the period the product sales are earned, as reported by AbbVie, and related cost of goods sold and selling, general and administrative expenses as incurred by the Company and AbbVie. These amounts are partially determined based on amounts provided by AbbVie and involve the use of estimates and judgments, such as product sales allowances and accruals related to prompt payment discounts, chargebacks, governmental and contractual rebates, wholesaler fees, product returns, and co-payment assistance costs, which could be adjusted based on actual results in the future. The Company is highly dependent on AbbVie for timely and accurate information regarding net revenues from sales of LINZESS in the U.S. in accordance with both ASC 808 and ASC 606, and the related costs, in order to accurately report its results of operations. If the Company does not receive timely and accurate information or incorrectly estimates activity levels associated with the collaboration at a given point in time, the Company could be required to record adjustments in future periods. In accordance with ASC 606-10-55, Principal Agent Considerations Sale of Active Pharmaceutical Ingredient During the year ended December 31, 2020 the Company produced linaclotide API, finished drug product, finished goods, and/or development materials for certain of its partners. As of December 31, 2020, the Company was no longer responsible for the supply of linaclotide API, finished drug product, finished goods or development materials to its partners, though the Company may provide development materials to certain of its partners on a periodic basis. Sales of such development materials have been and are expected to continue to be immaterial. The Company recognizes revenue on linaclotide API, finished drug product, finished goods, and development materials when control has transferred to the partner, which generally occurs upon shipment after the material passed all quality testing required for acceptance by the partner. Other The Company’s deferred revenue balance consists of advance billings and payments received from customers in excess of revenue recognized. Cost of Revenues Cost of revenues includes cost related to the sales of linaclotide API, finished drug product, and finished goods and are generally recognized upon shipment to certain of the Company’s partners outside of the U.S. The Company’s cost of revenues for linaclotide consists of the internal and external costs of producing such API, finished drug product, and finished goods. Research and Development Costs The Company generally expenses research and development costs to operations as incurred. The Company capitalizes nonrefundable advance payments made by the Company for research and development activities and defers expense recognition until the related goods are received or the related services are performed. Research and development expenses are comprised of costs incurred in performing research and development activities, including salary, benefits, share-based compensation, and other employee-related expenses; laboratory supplies and other direct expenses; facilities expenses; overhead expenses; third-party contractual costs relating to nonclinical studies and clinical trial activities and related contract manufacturing expenses, development of manufacturing processes and regulatory registration of third-party manufacturing facilities; licensing fees for the Company’s product candidates; and other outside expenses. The Company has certain collaboration agreements pursuant to which it shares or has shared research and development expenses related to linaclotide. The Company records expenses incurred under such linaclotide collaboration arrangements as research and development expense. Under the Company’s collaboration agreement with AbbVie for North America, the Company is reimbursed for certain research and development expenses and nets these reimbursements against its research and development expenses as incurred. Research and development expense includes up-front payment, non-contingent payment, and milestone payment obligations under the COUR Collaboration Agreement (Note 4). Expense is recognized when the obligation is determined to be probable. Restructuring Expenses Restructuring expenses are comprised primarily of costs associated with exit and disposal activities in accordance with ASC Topic 420, Exit or Disposal Cost Obligations Selling, General and Administrative Expenses The Company expenses selling, general and administrative costs to operations as incurred. Selling, general and administrative expenses consist primarily of compensation, benefits and other employee-related expenses for personnel in the Company’s administrative, finance, legal, information technology, business development, commercial, sales, marketing, communications and human resources functions. Other costs include the legal costs of pursuing patent protection of the Company’s intellectual property, general and administrative related facility costs, insurance costs and professional fees for accounting, tax, consulting, legal and other services. The Company includes AbbVie’s selling, general and administrative cost-sharing payments in the calculation of the net profits and net losses from the sale of LINZESS in the U.S. and presents the net payment to or from AbbVie as collaboration expense or collaborative arrangements revenue, respectively. Share-Based Compensation Expense The Company grants awards under its share-based compensation programs, including stock awards, restricted stock awards (“RSAs”), restricted stock units (“RSUs”) (including both time-based and performance-based RSUs), stock options, and shares issued under the Company’s employee stock purchase plan (“ESPP”). Share-based compensation is recognized as expense in the consolidated statements of income based on the grant date fair value over the requisite service period, net of estimated forfeitures. The Company estimates forfeitures over the requisite service period using historical forfeiture activity and records share-based compensation expense only for those awards that are expected to vest. The Company estimates the fair value of stock options using the Black-Scholes option-pricing model, which requires the use of subjective assumptions including volatility and expected term, among others. The fair value of stock awards, RSAs, and RSUs is based on the market value of the Company’s Class A Common Stock on the date of grant, with the exception of performance-based RSUs with market conditions, which are measured using the Monte Carlo simulation method on the date of grant (Note 12). Discounted stock purchases under the Company’s ESPP are valued on the first date of the offering period using the Black-Scholes option-pricing model to compute the fair value of the lookback provision plus the purchase discount. For awards that vest based on service conditions and market conditions, the Company uses a straight-line method to recognize compensation expense over the respective service period. For awards that contain performance conditions, the Company determines the appropriate amount to expense at each reporting date based on the anticipated achievement of performance targets, which requires judgement, including forecasting the achievement of future specified targets. At the date performance conditions are determined to be probable of achievement, the Company records a cumulative expense catch-up, with remaining expense amortized over the remaining service period. Throughout the performance period, the Company re-assesses the estimated performance and updates the number of performance-based awards that it believes will ultimately vest. Discounted stock purchases under the Company’s ESPP are recognized over the offering period. Compensation expense related to modified awards is measured based on the fair value for the awards as of the modification date. Any incremental compensation expense arising from the excess of the fair value of the awards on the modification date compared to the fair value of the awards immediately before the modification date is recognized at the modification date or ratably over the requisite remaining service period, as appropriate. While the assumptions used to calculate and account for share-based compensation awards represent management’s best estimates, these estimates involve inherent uncertainties and the application of management’s judgment. As a result, if revisions are made to the Company’s underlying assumptions and estimates, the Company’s share-based compensation expense could vary significantly from period to period. Patent Costs The Company incurred and recorded as operating expense legal and other fees related to patents of $1.3 million, $1.7 million, and $2.3 million for the years ended December 31, 2022, 2021 and 2020, respectively. These costs were charged to selling, general and administrative expenses as incurred. Net Income Per Share Basic net income per common share is computed by dividing the net income by the weighted average number of common shares outstanding during the period. Diluted net income per share reflects the potential dilution beyond common shares for basic net income per share that could occur if securities or other contracts to issue common shares were exercised, converted into common shares, or resulted in the issuance of common shares that would have shared in the Company’s earnings. Subsequent Events The Company considers events or transactions that have occurred after the balance sheet date of December 31, 2022, but prior to the filing of the financial statements with the Securities and Exchange Commission (“SEC”) to provide additional evidence relative to certain estimates or to identify matters that require additional recognition or disclosure. Subsequent events have been evaluated through the filing of the financial statements accompanying this Annual Report on Form 10-K. New Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (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 year ended December 31, 2022 that had a material effect on its consolidated financial statements. In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity The Company adopted ASU 2020-06 on January 1, 2022 using the modified retrospective approach, which resulted in a cumulative-effect December 31, 2021 Effect of the Adoption January 1, 2022 Consolidated Balance Sheet As Reported of ASU 2020-06 As Adjusted Deferred tax assets $ 333,294 $ 16,855 $ 350,149 Current portion of convertible senior notes 116,858 3,581 120,439 Long-term portion of convertible senior notes 337,333 57,324 394,657 Additional paid-in-capital 1,543,357 (110,217) 1,433,140 Retained earnings (937,608) 66,167 (871,441) Interest expense recognized in subsequent periods is reduced as a result of accounting for convertible debt instruments as a single liability measured at amortized cost, with a decrease of $22.1 million of non-cash interest expense during the year ended December 31, 2022 compared to the year ended December 31, 2021 related to convertible debt instruments outstanding on the adoption date. The adoption of ASU 2020-06 does not impact the Company’s liquidity or cash flows. In May 2021, the FASB issued ASU No. 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options The Company adopted ASU 2021-04 as of January 1, 2022 . The adoption of ASU 2021-04 did not have a material impact on the Company’s financial position and results of operations. Other recent accounting pronouncements issued, but not yet effective, are not expected to be applicable to the Company or have a material effect on the consolidated financial statements upon future adoption. |
Net Income Per Share
Net Income Per Share | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure Text Block | |
Net Income Per Share | 3. Net Income Per Share The following table sets forth the computation of basic and diluted net income per common share (in thousands, except per share amounts): Year Ended December 31, 2022 2021 2020 Numerator: Net income $ 175,065 $ 528,448 $ 106,176 Add back interest expense, net of tax benefit, on assumed conversion of 2024 Convertible Notes 1,781 — — Add back interest expense, net of tax benefit, on assumed conversion of 2026 Convertible Notes 2,668 — — Numerator used in computing net income per share — diluted $ 179,514 $ 528,448 $ 106,176 Denominator: Weighted average number of common shares outstanding used in computing net income per share — basic 154,366 162,245 159,427 Effect of dilutive securities: Stock options 306 488 367 Time-based restricted stock units 1,375 1,422 766 Performance-based restricted stock units 282 146 1 Restricted stock 115 117 94 2024 Convertible Notes assumed conversion 14,934 — — 2026 Convertible Notes assumed conversion 14,934 — — Dilutive potential common shares Weighted average number of common shares outstanding used in computing net income per share — diluted 186,312 164,418 160,655 Net income per share — basic $ 1.13 $ 3.26 $ 0.67 Net income per share — diluted $ 0.96 $ 3.21 $ 0.66 The outstanding securities have been excluded from the computation of diluted weighted average shares outstanding, as applicable, as their effect would be anti-dilutive (in thousands): Year Ended December 31, 2022 2021 2020 Stock options 6,152 7,701 11,746 Restricted stock awards — — 2 Time-based restricted stock units 10 102 209 Performance-based restricted stock units 1,182 121 93 Note Hedge Warrants 8,318 8,318 8,318 2022 Convertible Notes — 8,318 8,318 2024 Convertible Notes — 14,934 14,934 2026 Convertible Notes — 14,934 14,934 Total 15,662 54,428 58,554 Prior to the adoption of ASU 2020-06, the potentially dilutive impact of the Convertible Senior Notes (Note 9) was determined using the treasury stock method. Under this method, no numerator or denominator adjustments arose from the principal and interest components of the Convertible Senior Notes because the Company had the intent and ability to settle the Convertible Senior Notes’ principal and interest in cash. Instead, the Company was required to increase the diluted net income per share denominator by the variable number of shares that would be issued upon conversion if it settled the conversion spread obligation with shares. For diluted net income per share purposes, the conversion spread obligation was calculated based on whether the average market price of the Company’s Class A Common Stock during the reporting period was in excess of the conversion price of the Convertible Senior Notes. Following the adoption of ASU 2020-06 on January 1, 2022, the dilutive impact of the Convertible Senior Notes is determined using the if-converted method. Under the if-converted method, the Convertible Senior Notes are assumed to be converted into common stock at the beginning of the period (or at the time of issuance, if later). Interest charges are deducted from the numerator, unless the principal amount of the convertible instruments is required to be paid in cash. There was no dilutive impact of the 2022 Convertible Notes for the year ended December 31, 2022 because the Company had elected prior to the beginning of the period to settle the conversion of 2022 Convertible Notes, if any, with a combination settlement of a cash payment equal to the principal value of converted notes and shares of Class A Common Stock equal to the conversion value in excess of the principal value, if any. Accordingly, interest expense was not removed from the numerator and there was no calculated spread added to the denominator because the average market price of the Company’s Class A common stock during the portion of each period in which the 2022 Convertible Notes were outstanding was not in excess of the conversion price. |
Collaboration, License, and Oth
Collaboration, License, and Other Agreements | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure Text Block | |
Collaboration, License, and Other Agreements | 4. Collaboration, License, and Other Agreements For the year ended December 31, 2022, the Company had linaclotide collaboration agreements with AbbVie for North America and AstraZeneca for China (including Hong Kong and Macau), as well as linaclotide license agreements with Astellas for Japan and with AbbVie for the AbbVie License Territory. The Company also had an agreement with Alnylam Pharmaceuticals, Inc (“Alnylam”) to perform disease awareness activities for acute hepatic porphyria (“AHP”) and sales detailing activities for GIVLAARI ® Year Ended December 31, Collaborative Arrangements Revenue 2022 2021 2020 Linaclotide Collaboration and License Agreements: AbbVie (North America) $ 401,498 $ 403,085 $ 370,902 AbbVie (Europe and other) 2,444 2,558 2,196 AstraZeneca (China, including Hong Kong and Macau) 635 743 682 Astellas (Japan) 2,001 2,232 2,128 Other Agreements: Alnylam (GIVLAARI) 2,194 2,411 4,302 Other 1,824 1,755 1,335 Total collaborative arrangements revenue $ 410,596 $ 412,784 $ 381,545 Sale of API Linaclotide Agreements: Astellas (Japan) $ — $ 149 $ 2,017 AstraZeneca (China, including Hong Kong and Macau) — 597 5,540 Other — 223 421 Total sale of API $ — $ 969 $ 7,978 Accounts receivable, net, included 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 during the years ended December 31, 2022, 2021, or 2020. Linaclotide Agreements Collaboration Agreement for North America with AbbVie In September 2007, the Company entered into a collaboration agreement with AbbVie 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 an upfront licensing fee, equity investment, and development and regulatory milestones, and shares equally with AbbVie all development costs as well as net profits or losses from the development and sale of linaclotide in the U.S. In addition, the Company receives royalties in the mid-teens percent based on net sales in Canada and Mexico. AbbVie is solely responsible for the further development, regulatory approval and commercialization of linaclotide in those countries and funding any costs. During the years ended December 31, 2022, 2021 and 2020, the Company incurred $8.0 million, $8.2 million, and $20.1 million in total research and development expenses under the linaclotide collaboration for North America. As a result of the research and development cost-sharing provisions of the linaclotide collaboration for North America, the Company incurred $8.9 million, $11.5 million, and $5.6 million in incremental research and development costs during the years ended December 31, 2022, 2021, and 2020, respectively, to reflect the obligations of each party under the collaboration to bear 50% of the development costs incurred. The Company and AbbVie 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 AbbVie 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 AbbVie and concluded that all development-period performance obligations had been satisfied as of September 2012. The Company has determined that there are three remaining commercial-period performance obligations, which include the sales detailing of LINZESS, participation in the joint commercialization committee, and approved additional trials. The consideration remaining includes cost reimbursements in the U.S. and net profit and loss sharing payments based on net sales in the U.S. Additionally, the Company receives royalties in the mid-teens percent based on net sales in Canada and Mexico. Royalties and net profit and loss sharing payments will be recorded as collaborative arrangements revenue or expense in the period earned, as these payments relate predominately to the license granted to AbbVie. The Company records royalty revenue in the period earned based on royalty reports from its partner, if available, or based on the projected sales and historical trends. The cost reimbursements received from AbbVie during the commercialization period will be recognized as earned in accordance with the right-to-invoice practical expedient, as the Company’s right to consideration corresponds directly with the value of the services transferred during the commercialization period. Under the Company’s collaboration agreement with AbbVie for North America, LINZESS net sales are calculated and recorded by AbbVie 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. less commercial expenses on a net basis, and presents the settlement payments to and from AbbVie 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 AbbVie for North America. The Company relies on AbbVie 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 AbbVie and record collaboration expense or collaborative arrangements revenue, as applicable. The Company recognized collaborative arrangements revenue from the AbbVie collaboration agreement for North America during the years ended December 31, 2022, 2021, and 2020 as follows (in thousands): Year Ended December 31, 2022 2021 2020 Collaborative arrangements revenue related to sales of LINZESS in the U.S. $ 398,767 $ 400,371 $ 368,603 Royalty revenue 2,731 2,714 2,299 Total collaborative arrangements revenue $ 401,498 $ 403,085 $ 370,902 The Company incurred $34.3 million, $30.3 million, and $39.9 million in total selling, general and administrative costs related to the sale of LINZESS in the U.S. in accordance with the cost-sharing arrangement with AbbVie for the years ended December 31, 2022, 2021, and 2020, respectively. In May 2014, CONSTELLA ® License Agreement with AbbVie (All countries other than the countries and territories of North America, China (including Hong Kong and Macau), and Japan) The Company has a license agreement with AbbVie to develop, manufacture and commercialize linaclotide in (i) Europe, and (ii) all countries other than China (including Hong Kong and Macau), Japan, and the countries and territories of North America, or collectively the “Expanded Territory,” for the treatment of IBS-C, CIC and other GI conditions. Under the license agreement, as amended, AbbVie is obligated to pay the Company, (i) royalties based on sales volume in Europe in the upper-teens percent, and (ii) on a country-by-country and product-by-product basis in the Expanded Territory, 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 Europe and 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 license agreement also contains certain sales-based milestones and commercial launch milestones, which could total up to The Company recognized $2.4 million, $2.6 million and $2.2 million of royalty revenue from the Amended European License Agreement during the years ended December 31, 2022, 2021, and 2020, respectively. License Agreement for Japan with Astellas The Company has a license agreement with Astellas to develop, manufacture, and commercialize linaclotide for the treatment of IBS-C, CIC and other GI conditions in Japan. Under the license agreement, as amended, 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 as an active ingredient. These royalty payments are subject to reduction following the expiration of certain licensed patents and the occurrence of generic competition in Japan. During the year ended December 31, 2022, the Company recognized $2.0 million in collaborative arrangements revenue related to royalties. During the year ended December 31, 2021, the Company recognized $2.2 million in collaborative arrangements revenue related to royalties, and $0.2 million from the sale of API to Astellas under the Amended Astellas License Agreement. During the year ended December 31, 2020, the Company recognized $2.1 million in collaborative arrangements revenue related to royalties, an insignificant amount of collaborative arrangements revenue related to adverse event reporting services, and $2.0 million from the sale of API to Astellas under the Amended Astellas License Agreement. Collaboration Agreement for China (including Hong Kong and Macau) with AstraZeneca The Company has a collaboration agreement with AstraZeneca under which AstraZeneca has the exclusive right to develop, manufacture and commercialize products containing linaclotide in the AstraZeneca License Territory. Under the collaboration agreement, AstraZeneca is required to pay tiered royalties to the Company at rates beginning in the mid-single-digit percent and increasing up to twenty percent based on the aggregate annual net sales of products containing linaclotide in the AstraZeneca License Territory. During the year ended December 31, 2021, the Company recognized During the year ended December 31, 2020, the Company recognized arrangements revenue related to the Amended AstraZeneca License, of which $0.6 million related to services provided under a transition services agreement and $0.1 million related to royalties, and recognized $5.5 million of sales of API relating to the supply of linaclotide finished drug product and finished goods under a commercial supply agreement. The Company is entitled to receive non-contingent payments totaling $35.0 million in three installments through 2024, of which $25.0 million remained outstanding at December 31, 2022. In addition, AstraZeneca may be required to make milestone payments totaling up to $90.0 million contingent on the achievement of certain sales targets. The significant financing component of the transaction was $2.6 million and is recognized as interest income through 2024 using the effective interest method. At December 31, 2022, the current portion and non-current portion of the non-contingent receivable due from AstraZeneca was $10.0 million and $14.6 million, respectively. At December 31, 2021, the non-contingent receivable due from AstraZeneca was $24.0 million and was classified as non-current. Other Collaboration and License Agreements Collaboration and License Option Agreement with Cour PBC patients, with early data assessing T-cell response from patients enrolled in the clinical study expected in the second half of 2023 Pursuant to the terms of the COUR Collaboration Agreement, the Company made an upfront, non-refundable payment of $6.0 million to COUR during the year ended December 31, 2021, and agreed to pay $13.5 million in non-contingent payments and milestone payments in connection with certain development activities and regulatory milestones. After reviewing the data from the clinical study for CNP-104, if the Company exercises the Option, the Company will pay COUR $35.0 million in exchange for the license. Upon commercialization, COUR will be eligible to receive commercial milestone payments of up to $440.0 million over the term of the agreement and royalties in the high-single digits to low-double digits percentage of the aggregated annual net sales in the U.S. of products containing CNP-104. Other Agreements Disease Education and Promotional Agreement with Alnylam In August 2019, the Company and Alnylam entered into a disease education and promotional agreement (the “Alnylam Agreement”) for Alnylam’s GIVLAARI for the treatment of AHP. The Alnylam Agreement, as amended, was terminated in June 2021 with an effective termination date of September 30, 2021. Under the terms of the Alnylam Agreement, the Company’s sales force performed disease awareness activities and sales detailing activities for GIVLAARI. The Company remained eligible to receive royalties based on a percentage of net sales of GIVLAARI that are directly attributable to the Company’s promotional efforts through September 30, 2022, which was one year following the termination of the agreement. During the years ended December 31, 2022, 2021 and 2020, the Company recognized $2.2 million, $2.4 million and $0.8 million, respectively, in collaborative arrangements revenue related to royalties. During the year ended December 31, 2020, the Company recognized $3.5 million in collaborative arrangements revenue related to the service fees. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2022 | |
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 December 31, 2022 and 2021 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 periodically 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 December 31, Identical Assets Inputs Inputs 2022 (Level 1) (Level 2) (Level 3) Assets: Cash and cash equivalents: Money market funds $ 250,313 $ 250,313 $ — $ — Repurchase agreements 261,075 — 261,075 — Commercial paper 138,809 — 138,809 — Restricted cash: Money market funds 1,735 1,735 — — Total assets measured at fair value $ 651,932 $ 252,048 $ 399,884 $ — Liabilities: Note hedge warrants $ 19 $ — $ — $ 19 Total liabilities measured at fair value $ 19 $ — $ — $ 19 Fair Value Measurements at Reporting Date Using Quoted Prices in Significant Other Significant Active Markets for Observable Unobservable December 31, Identical Assets Inputs Inputs 2021 (Level 1) (Level 2) (Level 3) Assets: Cash and cash equivalents: Money market funds $ 595,233 $ 595,233 $ — $ — Restricted cash: Money market funds 1,735 1,735 — — Convertible note hedges 1,115 — — 1,115 Total assets measured at fair value $ 598,083 $ 596,968 $ — $ 1,115 Liabilities: Note hedge warrants $ 1,316 $ — $ — $ 1,316 Total liabilities measured at fair value $ 1,316 $ — $ — $ 1,316 Cash equivalents, accounts receivable, prepaid expenses and other current assets, accounts payable, accrued research and development costs, accrued expenses and other current liabilities and current portion of operating lease obligations at December 31, 2022 and 2021 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. The following inputs were used in the fair market valuation of the Convertible Note Hedges as of December 31, 2021 and the Note Hedge Warrants as of December 31, 2022 and 2021: December 31, 2022 December 31, 2021 Note Hedge Convertible Note Hedge Warrants Note Hedges Warrants Risk-free interest rate (1) 4.5 % 0.2 % 0.4 % Expected term 0.3 0.5 1.0 Stock price (2) $ 12.39 $ 11.66 $ 11.66 Strike price (3) $ 18.82 $ 14.51 $ 18.82 Common stock volatility (4) 27.1 % 27.0 % 32.2 % 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 years ended December 31, 2022 and 2021, 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 consolidated statements of income. The following table reflects the change in the Company's Level 3 Convertible Note Hedges and Note Hedge Warrants from December 31, 2020 through December 31, 2022 (in thousands): Convertible Note Hedge Note Hedges Warrants Balance at December 31, 2020 $ 13,065 $ (12,088) Change in fair value, recorded as a component of gain (loss) on derivatives (11,950) 10,772 Balance at December 31, 2021 $ 1,115 $ (1,316) Change in fair value, recorded as a component of gain (loss) on derivatives (1,115) 1,297 Balance at December 31, 2022 $ — $ (19) Convertible Senior Notes In June 2015, the Company issued $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. In June 2022, the Company repaid the $120.7 million remaining aggregate principal amount of its 2022 Convertible Notes. Prior to the adoption of ASU 2020-06, 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 9). Following the adoption of ASU 2020-06 on January 1, 2022, the equity component was eliminated and each of the 2022 Convertible Notes, 2024 Convertible Notes, and 2026 Convertible Notes are measured as a single liability. 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 $125.2 million as of December 31, 2021. The estimated fair value of the 2024 Convertible Notes was $215.9 million and $221.9 million as of December 31, 2022 and 2021, respectively. The estimated fair value of the 2026 Convertible Notes was $219.0 million and $227.2 million as of December 31, 2022 and 2021, respectively. Capped Calls with Respect to 2024 Convertible Notes and 2026 Convertible Notes In connection with the issuance of the 2024 Convertible Notes and the 2026 Convertible Notes, the Company entered into the Capped Calls with certain financial institutions. The Capped Calls cover 29,867,480 shares of Class A Common Stock (subject to anti-dilution and certain other adjustments), which is the same number of shares of Class A Common Stock that initially underlie the 2024 Convertible Notes and the 2026 Convertible Notes. The Capped Calls have an initial strike price of approximately $13.39 per share, which corresponds to the initial conversion price of the 2024 Convertible Notes and the 2026 Convertible Notes, and have a cap price of approximately $17.05 per share (Note 9). The strike price and cap price are subject to anti-dilution adjustments generally similar to those applicable to the 2024 Convertible Notes and the 2026 Convertible Notes. These instruments meet the conditions outlined in ASC 815 to be classified in stockholders’ equity (deficit) and are not subsequently remeasured as long as the conditions for equity classification continue to be met (Note 9). |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure Text Block | |
Leases | 6. Leases The Company’s lease portfolio for the year ended December 31, 2022 includes: an office lease for its current headquarters location, vehicle leases for its salesforce representatives, and leases for computer and office equipment. The Company’s office lease and vehicle lease require letters of credit to secure the Company’s obligations under the lease agreements totaling Lease cost is recognized on a straight-line basis over the lease term. The components of lease cost for the years ended December 31, 2022, 2021 and 2020 are as follows (in thousands): Year Ended December 31, 2022 2021 2020 Operating lease cost $ 2,509 $ 2,520 $ 2,530 Short-term lease cost 1,070 960 1,420 Total lease cost $ 3,579 $ 3,480 $ 3,950 Supplemental information related to leases for the periods reported is as follows: Year Ended December 31, 2022 2021 2020 Cash paid for amounts included in the measurement of lease liabilities (in thousands) $ 3,114 $ 3,128 $ 1,146 Weighted-average remaining lease term of operating leases (in years) 7.3 8.3 9.3 Weighted-average discount rate of operating leases 5.8 % 5.8 % 5.8 % Summer Street Lease In June 2019, the Company entered into a non-cancelable operating lease (the “Summer Street Lease”) for approximately 39,000 square feet of office space on the 23 rd At lease commencement, the Company recorded a right-of-use asset and a lease liability using an incremental borrowing rate of 5.8%. At December 31, 2022, the balances of the right-of-use asset and operating lease liability were $14.0 million and $19.7 million, respectively. At December 31, 2021, the balances of the right-of-use asset and operating lease liability were $15.3 million and $21.5 million, respectively. Lease costs related to the Summer Street Lease recorded during each of the years ended December 31, 2022, 2021 and 2020 were $2.5 million. Future minimum lease payments under the Summer Street Lease as of December 31, 2022 are as follows (in thousands): 2023 $ 3,066 2024 3,126 2025 3,189 2026 3,252 2027 3,317 2028 and thereafter 8,285 Total future minimum lease payments 24,235 Less: present value adjustment (4,571) Operating lease liabilities 19,664 Less: current portion of operating lease liabilities (3,065) Operating lease liabilities, net of current portion $ 16,599 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure Text Block | |
Property and Equipment | 7. Property and Equipment Property and equipment, net consisted of the following (in thousands): December 31, 2022 2021 Software $ 5,414 $ 5,667 Leasehold improvements 7,407 7,407 Laboratory equipment 1,327 1,327 Furniture and fixtures 1,542 1,517 Computer and office equipment 1,362 1,285 17,052 17,203 Less accumulated depreciation and amortization (10,764) (9,628) $ 6,288 $ 7,575 Depreciation expense of property and equipment was $1.4 million, $1.5 million and $2.3 million for the years ended December 31, 2022, 2021 and 2020, respectively. During the year ended December 31, 2020, the Company recorded $1.2 million, in restructuring expenses in its consolidated statement of income |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure Text Block | |
Accrued Expenses and Other Current Liabilities | 8. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following (in thousands): December 31, 2022 2021 Accrued compensation and benefits $ 12,268 $ 16,653 Restructuring liabilities — 462 Stock repurchase — 3,009 Other 4,432 3,442 Total accrued expenses and other current liabilities $ 16,700 $ 23,566 As of December 31, 2022 and 2021, other accrued expenses of $4.4 million and $3.4 million were comprised primarily of $3.6 million and $2.7 million of uninvoiced vendor liabilities, respectively. |
Notes Payable
Notes Payable | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure Text Block | |
Notes Payable | 9. Notes Payable 2.25% Convertible Senior Notes due 2022 In June 2015, the Company issued $335.7 million aggregate principal amount of the 2022 Convertible Notes. The Company received net proceeds of $324.0 million from the sale of the 2022 Convertible Notes, after deducting fees and expenses of $11.7 million. The Company used $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. 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. Such portion of the 2022 Convertible Notes were repurchased at a premium totaling $227.3 million. In June 2022, the Company repaid the remaining $120.7 million aggregate principal amount of the 2022 Convertible Notes upon maturity. The 2022 Convertible Notes were governed by an indenture (the “2022 Indenture”) between the Company and U.S. Bank National Association, as trustee (the “Trustee”). The 2022 Convertible Notes were senior unsecured obligations and bore cash interest at the annual rate of 2.25%, payable on June 15 and December 15 of each year. The 2022 Convertible Notes matured on June 15, 2022. No conversions were exercised by holders of the 2022 Convertible Notes. Upon issuance, 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 conversion feature. 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 the date of issuance. The debt discount was amortized to interest expense using the effective interest method over seven years, or the expected life of the 2022 Convertible Notes. The equity component was not remeasured as long as it continued to meet the conditions for equity classification. Upon the adoption of ASU 2020-06 on January 1, 2022, the equity component is no longer bifurcated from the liability component and each debt instrument is accounted for as a single liability measured at amortized cost. Accordingly, the unamortized debt discount as of the adoption date in the amount of $3.5 million was derecognized, resulting in an increase to the current portion of convertible senior notes and a decrease to stockholders’ equity. Additionally, there is no longer non-cash interest expense associated with the amortization of the original issue discount. During the years ended December 31, 2021 and 2020, the Company recognized $7.2 million and $6.6 million in non-cash interest expense, respectively, related to the debt discount. 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 $391.0 million from the sale of the 2024 Convertible Notes and 2026 Convertible Notes, after deducting fees and expenses of $9.0 million. The Company used $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. The 2024 Convertible Notes and 2026 Convertible Notes were issued by the Company on August 12, 2019, pursuant to separate Indentures, each dated as of such date (each an “Indenture” and together the “Indentures”), between the Company and the Trustee. The 2024 Convertible Notes bear cash interest at the annual rate of 0.75% and the 2026 Convertible Notes bear cash interest at the annual rate of 1.50%, each payable on June 15 and December 15 of each year. The 2024 Convertible Notes will mature on June 15, 2024 and the 2026 Convertible Notes will mature on June 15, 2026, unless earlier converted or repurchased. The Company will settle conversions of the 2024 Convertible Notes and 2026 Convertible Notes through payment or delivery, as the case may be, of cash, shares of the Company’s Class A Common Stock 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 applicable Indenture). The initial conversion rate for each of the 2024 Convertible Notes and the 2026 Convertible Notes is 74.6687 shares of Class A Common Stock (subject to adjustment as provided for in the applicable Indenture) per $1,000 principal amount of the 2024 Convertible Notes and 2026 Convertible Notes, which is equal to an initial conversion price of approximately $13.39 per share. Holders of the 2024 Convertible Notes and 2026 Convertible Notes may convert their Notes at their option at any time prior to the close of business on the business day immediately preceding December 15, 2023, with respect to the 2024 Convertible Notes, and December 15, 2025, with respect to the 2026 Convertible Notes, in multiples of $1,000 principal amount, only under the following circumstances: ● during any calendar quarter commencing after the calendar quarter ending on December 31, 2019 (and only during such calendar quarter), if the last reported sale price of Class A Common Stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price for the Notes on each applicable trading day; ● during the five business day period after any five consecutive trading day period (the “measurement period”) in which the “trading price” (as defined in each Indenture) per $1,000 principal amount of Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of Class A Common Stock and the conversion rate for the Notes on each such trading day; or ● upon the occurrence of specified corporate events described in each Indenture. On or after December 15, 2023, with respect to the 2024 Convertible Notes, and December 15, 2025, with respect to the 2026 Convertible Notes, until the close of business on the second scheduled trading day immediately preceding the applicable maturity date, the holders of the Notes may convert their Notes, in multiples of $1,000 principal amount, regardless of the foregoing conditions. Upon the occurrence of fundamental changes, as described in the Indentures, prior to the maturity date of the respective Notes, holders of such Notes may require the Company to repurchase for cash all or a portion of their Notes at a repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest. If a make-whole fundamental change, as described in the Indentures, occurs and a holder elects to convert its 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 Indentures. The Indentures do 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 Indentures provide for customary events of default. In the case of an event of default with respect to a series of Notes arising from specified events of bankruptcy or insolvency, all outstanding Notes of such series will become due and payable immediately without further action or notice. If any other event of default with respect to a series of Notes under the relevant Indenture occurs or is continuing, the Trustee or holders of at least Upon issuance, 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 conversion feature. 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 debt discount was amortized to interest expense using the effective interest method over approximately five Upon the adoption of ASU 2020-06 on January 1, 2022, the equity component is no longer bifurcated from the liability component and each debt instrument is accounted for as a single liability measured at amortized cost. Accordingly, the unamortized debt discount as of the adoption date in the amount of $22.3 million and $35.8 million for the 2024 Convertible Notes and 2026 Convertible Notes, respectively, was derecognized, resulting in an increase to the non-current portion of convertible senior notes and a decrease to stockholders’ equity. Additionally, there is no longer non-cash interest expense associated with the amortization of the original issue discount. The Company’s outstanding balances for the convertible senior notes as of December 31, 2022 and 2021 consisted of the following (in thousands): December 31, 2022 2021 Liability component: Principal: 2022 Convertible Notes $ — $ 120,699 2024 Convertible Notes 200,000 200,000 2026 Convertible Notes 200,000 200,000 Less: unamortized debt discount — (61,641) Less: unamortized debt issuance costs (3,749) (4,867) Net carrying amount $ 396,251 $ 454,191 Equity component: 2022 Convertible Notes — 19,807 2024 Convertible Notes — 41,152 2026 Convertible Notes — 51,350 Total equity component $ — $ 112,309 In connection with the issuance of the 2022 Convertible Notes, the Company incurred $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 $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 $7.7 million were recorded as a reduction in the carrying value of the debt on the 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 $23.4 million, of which $2.8 million related to the initial debt issuance costs, during the year ended December 31, 2019. Upon the adoption of ASU 2020-06, the costs originally allocated to the equity component are reflected within the current portion of convertible senior notes and recorded as interest expense over the life of the 2022 Convertible Notes. 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 maturity in June 2022, the effective annual interest rate on the 2022 Convertible Notes was 2.7%. The effective annual interest rate is computed using the contractual interest and the amortization of debt issuance costs. Prior to the adoption of ASU 2020-06, the effective annual interest rate calculation also included the amortization of the original issue discount. The Company determined the expected life of the 2024 Convertible Notes and the 2026 Convertible Notes was equal to their approximately five and seven-year terms, respectively. The effective annual interest rates of the 2024 Convertible Notes and the 2026 Convertible Notes for the period from the date of issuance through December 31, 2022 was 1.2% and 1.9% , respectively. The effective annual interest rate is computed using the contractual interest and the amortization of debt issuance costs. Prior to the adoption of ASU 2020-06, the effective annual interest rate calculation also included the amortization of the original issue discount. The following table sets forth total interest expense recognized related to convertible senior notes during the years ended December 31, 2022, 2021, and 2020 (in thousands): Year Ended December 31, 2022 2021 2020 Contractual interest expense $ 5,745 $ 7,216 $ 7,216 Amortization of debt issuance costs 1,853 1,678 1,462 Amortization of debt discount — 22,256 20,800 Total interest expense $ 7,598 $ 31,150 $ 29,478 Future minimum payments under the convertible senior notes as of December 31, 2022, are as follows (in thousands): 2023 $ 4,500 2024 203,750 2025 3,000 2026 201,500 Total future minimum payments under the convertible senior notes 412,750 Less: amounts representing interest (12,750) Less: unamortized debt issuance costs (3,749) Convertible senior notes balance $ 396,251 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. The Convertible Note Hedges had an exercise price of $14.51 per share and covered 23,135,435 shares. If the 2022 Convertible Notes had been converted and the price of the Company’s Class A Common Stock was above the exercise price of the Convertible Note Hedges, the counterparties were 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 shares of the Company’s Class A Common Stock. An aggregate of 23,135,435 shares underlie the Note Hedge Warrants and each warrant has a strike price of $18.82 per share, subject to customary anti-dilution adjustments. The Note Hedge Warrants are exercisable over the 150 trading day period beginning on September 15, 2022. The Note Hedge Warrants could have a dilutive effect on the Class A Common Stock to the extent that the market price per share of the Company’s Class A Common Stock exceeds the applicable strike price of such warrants. 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 $91.9 million for the Convertible Note Hedges and received $70.8 million for the Note Hedge Warrants, resulting in a net cost to the Company of $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 $3.2 million of termination payments from the counterparties of the Convertible Note Hedges and Note Hedge Warrants. In June 2022, the Convertible Note Hedges terminated unexercised upon expiry. The Note Hedge Warrants remain outstanding as of December 31, 2022. The Convertible Note Hedges and Note Hedge Warrants are accounted for as derivative assets and liabilities, respectively, in accordance with ASC 815, and are remeasured to fair value at each reporting date (Note 5). As of December 31, 2022, the Note Hedge Warrants were classified as current liabilities on the Company’s consolidated balance sheet. As of December 31, 2021, the Convertible Note Hedges and Note Hedge Warrants were classified as current assets and current liabilities, respectively, on the Company’s consolidated balance sheet. Capped Calls with Respect to 2024 Convertible Notes and 2026 Convertible Notes To minimize the impact of potential dilution to the Company’s Class A common stockholders upon conversion of the 2024 Convertible Notes and the 2026 Convertible Notes, the Company entered into separate Capped Calls in connection with the issuance of the 2024 Convertible Notes and the 2026 Convertible Notes. The Company paid the counterparties $25.2 million to enter into the Capped Calls. The Capped Calls have an initial strike price of approximately $13.39 per share, which corresponds to the initial conversion price of the 2024 Convertible Notes and the 2026 Convertible Notes and is subject to anti-dilution adjustments generally similar to those applicable to the 2024 Convertible Notes and the 2026 Convertible Notes. The Capped Calls have a cap price of approximately $17.05 per share, subject to certain adjustments. The Capped Calls cover 29,867,480 shares of Class A Common Stock (subject to anti-dilution and certain other adjustments), which is the same number of shares of Class A Common Stock that initially underlie the 2024 Convertible Notes and the 2026 Convertible Notes. The Capped Calls are expected generally to reduce the potential dilution to the Class A Common Stock upon conversion of the 2024 Convertible Notes and the 2026 Convertible Notes in the event that the market price per share of Class A Common Stock is greater than the strike price of the Capped Calls as adjusted pursuant to the anti-dilution adjustments. If, however, the market price per share of Class A Common Stock exceeds the cap price of the Capped Calls, there would nevertheless be dilution upon conversion of the 2024 Convertible Notes and the 2026 Convertible Notes to the extent that such market price exceeds the cap price of the Capped Calls. The Capped Calls are separate transactions entered into by and between the Company and the Capped Calls counterparties and are not part of the terms of the 2024 Convertible Notes or the 2026 Convertible Notes. Holders of the 2024 Convertible Notes and the 2026 Convertible Notes do not have any rights with respect to the Capped Calls. The Company recorded a reduction to additional paid-in capital of $25.0 million during the year ended December 31, 2019 related to the premium payments for the Capped Calls. Additionally, the Company recorded a $0.2 million reduction to equity related to transaction costs incurred in connection with the Capped Calls during the year ended December 31, 2019. These instruments meet the conditions outlined in ASC 815 to be classified in stockholders’ equity and are not subsequently remeasured as long as the conditions for equity classification continue to be met. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure Text Block | |
Commitments and Contingencies | 10. Commitments and Contingencies Commitments with AbbVie The Company and AbbVie are jointly obligated to make minimum purchases of linaclotide API for the territories covered by the Company’s collaboration with AbbVie for North America. Currently, AbbVie fulfills all such minimum purchase commitments. Under the collaboration agreement with AbbVie for North America, the Company shares all development and commercialization costs related to linaclotide in the U.S. with AbbVie. The actual amounts that the Company pays to AbbVie or that AbbVie pays to the Company will depend on numerous factors outside of the Company’s control, including the success of certain clinical development efforts with respect to linaclotide, the content and timing of decisions made by the regulators, the reimbursement and competitive landscape around linaclotide and the Company’s other product candidates, and other factors. Other Funding Commitments As of December 31, 2022, the Company has ongoing studies in various pre-clinical and clinical trial stages. The Company’s most significant clinical trial expenditures are to contract research organizations. These contracts are generally cancellable, with notice, at the Company’s option and do not have any significant cancellation penalties. Guarantees As permitted under Delaware law, the Company indemnifies its directors and certain of its officers for certain events or occurrences while such director or officer is, or was, serving at the Company’s request in such capacity. The maximum potential amount of future payments the Company could be required to make is unlimited; however, the Company has directors’ and officers’ insurance coverage that is intended to limit its exposure and enable it to recover a portion of any future amounts paid. The Company enters into certain agreements with other parties in the ordinary course of business that contain indemnification provisions. These typically include agreements with business partners, contractors, landlords, clinical sites and customers. Under these provisions, the Company generally indemnifies and holds harmless the indemnified party for losses suffered or incurred by the indemnified party as a result of the Company’s activities. These indemnification provisions generally survive termination of the underlying agreements. The maximum potential amount of future payments the Company could be required to make under these indemnification provisions is unlimited. However, to date the Company has not incurred material costs to defend lawsuits or settle claims related to these indemnification provisions. As a result, the estimated fair value of these obligations is minimal. Accordingly, the Company did not have any liabilities recorded for these obligations as of December 31, 2022 and 2021. Litigation From time to time, the Company is involved in various legal proceedings and claims, either asserted or unasserted, which arise in the ordinary course of business. While the outcome of these other claims cannot be predicted with certainty, management does not believe that the outcome of any of these ongoing legal matters, individually and in aggregate, will have a material adverse effect on the Company’s consolidated financial statements. In January 2020, the Company and AbbVie entered into settlement agreements with Sandoz Inc. and Teva Pharmaceuticals, USA, Inc., (“Teva”), resolving patent litigation brought in response to the last outstanding abbreviated new drug applications seeking approval to market generic versions of LINZESS prior to the expiration of the Company’s and AbbVie’s applicable patents. In May 2021, the Company and AbbVie entered into a settlement agreement with Teva, under which the Company and AbbVie will grant Teva a license to market a generic version of 72 mcg LINZESS beginning March 31, 2029 (subject to FDA approval), unless certain limited circumstances, customary for settlement agreements of this nature, occur. With this settlement agreement, the Company and AbbVie have settled with the filers of all known ANDAs to date seeking approval to market generic versions of LINZESS. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure Text Block | |
Stockholders' Equity | 11. Stockholders’ Equity Preferred Stock The Company’s preferred stock may be issued from time to time in one or more series, with each such series to consist of such number of shares and to have such terms as adopted by the board of directors. Authority is given to the board of directors to determine and fix such voting powers, full or limited, or no voting powers, and such designations, preferences and relative participating, optional or other special rights, and qualifications, limitation or restrictions thereof, including without limitation, dividend rights, conversion rights, redemption privileges and liquidation preferences. Common Stock The Company has one class of common stock (“Class A Common Stock”). Class A Common Stock is entitled to one vote per share. The Company has reserved, out of its authorized but unissued shares of Class A Common Stock, sufficient shares to effect the conversion of the convertible senior notes and the Note Hedge Warrants pursuant to the terms thereof (Note 9). The Company’s stockholders are entitled to dividends if and when declared by the board of directors. Share Repurchase Program In May 2021, the Company’s Board of Directors authorized a program to repurchase up to Company’s Class A Common Stock. The Company completed the share repurchase program in May 2022 and retired the repurchased shares. During the year ended December 31, 2022, the Company repurchased 10.8 million shares of Class A Common Stock at an aggregate purchase price of $123.4 million. For the overall program, under which repurchases commenced in December 2021, the Company repurchased 13.1 million shares of Class A Common Stock at an average price per share of $11.47. |
Employee Stock Benefit Plans
Employee Stock Benefit Plans | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure Text Block | |
Employee Stock Benefit Plans | 12. Employee Stock Benefit Plans The Company has several share-based compensation plans under which stock options, RSAs, RSUs, 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 by award type (in thousands): Year Ended December 31, 2022 2021 2020 Stock options $ 1,471 $ 3,154 $ 7,680 Time-based restricted stock units 17,643 14,539 18,624 Performance-based restricted stock units 5,008 1,295 2,190 Restricted stock awards 2,439 2,684 1,886 Employee stock purchase plan 412 419 722 Stock awards 75 190 73 Total share-based compensation expense $ 27,048 $ 22,281 $ 31,175 The following table summarizes the share-based compensation expense reflected in the consolidated statements of income (in thousands): Year Ended December 31, 2022 2021 2020 Share-based compensation expense: Research and development $ 4,936 $ 4,849 $ 5,569 Selling, general and administrative 22,112 17,323 23,825 Restructuring expenses — 109 1,781 Total share-based compensation expense included in operating expenses 27,048 22,281 31,175 Income tax benefit 1,644 — — Total share-based compensation expense, net of tax $ 28,692 $ 22,281 $ 31,175 Restructuring expenses include modifications to share-based awards held by employees impacted by various workforce reductions (Note 16). Stock Benefit Plans As of December 31, 2022, the Company has the following active stock benefit plans pursuant to which awards are currently outstanding: the 2019 Equity Incentive Plan (the “2019 Equity Plan”), the Amended and Restated 2010 Employee Stock Purchase Plan (the “2010 Purchase Plan”) and the Amended and Restated 2010 Employee, Director, and Consultant Equity Incentive Plan (the “2010 Equity Plan”). At December 31, 2022, there were 11,790,625 shares available for future grant under the 2019 Equity Plan and the 2010 Purchase Plan. 2019 Equity Plan During 2019, the Company’s stockholders approved the 2019 Equity Plan under which stock options, RSAs, RSUs, and other stock-based awards may be granted to employees, officers, directors, or consultants of the Company. Under the 2019 Equity Plan, 10,000,000 shares of Class A Common Stock were initially reserved for issuance. Awards that are returned to the 2010 Equity Plan as a result of their expiration, cancellation, termination or repurchase are automatically made available for issuance under the 2019 Equity Plan. Awards that expire, cancel, terminate, or are repurchased under the 2019 Equity Plan will no longer be available for future grant. As of December 31, 2022, 7,366,153 shares were available for future grant under the 2019 Equity Plan. 2010 Purchase Plan During 2010, the Company’s stockholders approved the 2010 Purchase Plan, which gives eligible employees the right to purchase shares of common stock at the lower of 85% of the fair market value on the first or last day of an offering period. Each offering period is six months. There were 400,000 shares of common stock initially reserved for issuance pursuant to the 2010 Purchase Plan. The number of shares available for future grant under the 2010 Purchase Plan may be increased on the first day of each fiscal year by an amount equal to the lesser of: (i) 1,000,000 shares, (ii) 1% of the Class A shares of common stock outstanding on the last day of the immediately preceding fiscal year, or (iii) such lesser number of shares as is determined by the board of directors. As of December 31, 2022, there were 4,424,472 shares available for future grant under the 2010 Purchase Plan. 2010 Equity Plan The 2010 Equity Plan provided for the granting of stock options, RSAs, RSUs, and other share-based awards to employees, officers, directors, consultants, or advisors of the Company. At December 31, 2022, there were no shares available for future grant under the 2010 Equity Plan. Restricted Stock Awards RSAs are granted to non-employee members of the board of directors under restricted stock agreements in accordance with the terms of the 2019 Equity Plan and the Company’s non-employee director compensation policy, effective May 2019. Annual restricted stock grants to each non-employee member of the board of directors vest in full on the date immediately preceding the next annual meeting of stockholders, provided the individual continues to serve on the Company’s board of directors through each vest date. Initial restricted stock grants to new non-employee members of the board of directors vest annually over a three-year period from the date of grant provided the individual continues to serve on the Company’s board of directors through each vest date. A summary of restricted stock activity for the year ended December 31, 2022 is presented below: Weighted- Average Number of Grant Date Shares Fair Value Unvested as of December 31, 2021 263,260 $ 11.61 Granted 172,568 11.22 Vested (246,710) 11.64 Forfeited — — Unvested as of December 31, 2022 189,118 $ 11.22 The weighted-average grant date fair value per share of RSAs granted during the years ended December 31, 2022, 2021, and 2020 was $11.22, $11.67, and $10.16, respectively. The total fair value of RSAs that vested during the years ended December 31, 2022, 2021, and 2020 was $2.8 million, $2.5 million, and $1.9 million, respectively. Restricted Stock Units RSUs granted under the Company’s equity plans represent the right to receive one share of the Company’s Class A Common Stock pursuant to the terms of the applicable award agreement. Shares of the Company’s Class A Common Stock are delivered to the employee upon vesting, subject to payment of applicable withholding taxes. Time-based RSUs Time-based RSUs generally vest over a two A summary of time-based RSU activity for the year ended December 31, 2022 is as follows: Weighted- Average Number Grant Date of RSUs Fair Value Outstanding as of December 31, 2021 3,864,108 $ 10.89 Granted 2,265,661 11.08 Vested and released (1,327,573) 11.15 Forfeited (512,051) 10.95 Outstanding as of December 31, 2022 4,290,145 $ 10.91 Amounts relating to time-based RSUs granted prior to the Separation of the Company’s soluble guanylate cycle business, and certain other assets and liabilities, into Cyclerion Therapeutics, Inc. (the “Separation) have not been adjusted to reflect the effect of the Separation on the Company’s stock price. For additional information related to the Separation, refer to Note 15, Related Parties The weighted-average grant date fair value per share of time-based RSUs granted during the years ended December 31, 2022, 2021, and 2020 was $11.08, $10.40, and $11.59, respectively. The total fair value of time-based RSUs that vested during the years ended December 31, 2022, 2021, and 2020 was $14.8 million, $17.8 million, and $11.1 million, respectively. Performance-based RSUs Performance-based RSUs (“PSUs”) were granted to certain executives. PSUs vest upon the achievement of specified performance criteria over a two The fair value of Pipeline PSUs and Profitability PSUs is based on the market value of the Company's Class A Common Stock on the date of grant. The Relative TSR PSUs are valued using the Monte Carlo simulation method on the date of grant. The weighted average assumptions used to estimate the fair value of Relative TSR PSUs were as follows for the years ended December 31, 2022, 2021, and 2020: Year Ended December 31, 2022 2021 2020 Fair value of common stock $ 11.13 $ 11.39 $ 11.78 Expected volatility 41.7 % 47.9 % 53.3 % Expected term (in years) 2.8 2.6 2.8 Risk-free interest rate 1.6 % 0.3 % 1.0 % Expected dividend yield — % — % — % A summary of PSU activity for the year ended December 31, 2022 is as follows: Weighted- Average Number Grant Date of PSUs Fair Value Outstanding as of December 31, 2021 833,286 $ 14.06 Granted (1) 598,814 14.30 Vested and released (151,859) 11.68 Forfeited (111,470) 11.65 Outstanding as of December 31, 2022 1,168,771 $ 14.72 (1) Includes an adjustment of 70,759 PSUs related to PSUs granted in prior years which vested during the year ended December 31, 2022 in excess of the target number of PSUs. The weighted-average grant date fair value per share of PSUs granted during the years ended December 31, 2022, 2021, and 2020 was $14.30, $14.65, and $12.48, respectively. The total fair value of PSUs that vested during the year ended December 31, 2022 was $1.7 million. No PSUs vested during the years ended December 31, 2021 and 2020. Stock Options Stock options granted under the Company’s equity plans represent the right to purchase one share of the Company’s Class A Common Stock pursuant to the terms of the applicable award agreement. Shares of the Company's Class A Common Stock are delivered to the employee upon exercise, subject to payment of applicable withholding taxes. As of April 2020, the Company no longer grants stock options. Stock options previously granted under the Company’s equity plans generally have a ten-year term and vest over a period of four years, provided the individual continues to serve at the Company through the vesting dates. Options granted under all equity plans are exercisable at a price per share not less than the fair market value of the underlying common stock on the date of grant. The estimated fair value of options, including the effect of estimated forfeitures, is recognized over the requisite service period, which is typically the vesting period of each option. The weighted average assumptions used to estimate the fair value of the stock options using the Black-Scholes option-pricing model were as follows for the year ended December 31, 2020: Year Ended December 31, 2020 Expected volatility 46.6 % Expected term (in years) 6.1 Risk-free interest rate 1.5 % Expected dividend yield — % Expected volatility is based on the historical volatility of the Company’s Class A Common Stock. The Company estimates the expected term using historical data. The risk-free interest rate used for each grant is based on a zero-coupon U.S. Treasury instrument with a remaining term similar to the expected term of the share-based award. The Company has not paid and does not anticipate paying cash dividends on its shares of common stock in the foreseeable future; therefore, the expected dividend yield is assumed to be zero. The weighted-average grant date fair value per share of options granted during the year ended December 31, 2020 was $5.89. The following table summarizes stock option activity under the Company’s share-based compensation plans: Weighted- Weighted- Number of Average Average Aggregate Stock Exercise Contractual Intrinsic Options Price (1) Life Value (in years) (in thousands) Outstanding at December 31, 2021 9,372,794 $ 12.30 3.51 $ 4,528 Granted — — — — Exercised (951,355) 10.88 — — Cancelled (1,490,067) 13.04 — — Outstanding at December 31, 2022 6,931,372 12.34 3.32 5,786 Vested or expected to vest at December 31, 2022 6,929,248 12.34 3.32 5,782 Exercisable at December 31, 2022 6,877,104 12.35 3.30 5,709 (1) Amounts relating to stock options granted prior to the Separation have not been adjusted to reflect the effect of the Separation on the Company’s stock price. The total intrinsic value of options exercised during the years ended December 31, 2022, 2021, and 2020 was $0.9 million, $2.7 million, and $3.5 million, respectively. The intrinsic value was calculated as the difference between the fair value of the Company’s Class A Common Stock at the date of exercise and the exercise price of the option issued. The following table sets forth the Company's unrecognized share-based compensation expense, net of estimated forfeitures, as of December 31, 2022, by type of award and the weighted-average period over which that expense is expected to be recognized: Unrecognized Weighted-Average Expense, Net Remaining of Estimated Recognition Forfeitures Period (in thousands) (in years) Type of award: Stock options with time-based vesting $ 183 0.54 Restricted stock awards 968 0.45 Time-based restricted stock units 24,436 2.41 Performance-based restricted stock units 6,387 1.49 The total unrecognized share-based compensation cost will be adjusted for future changes in estimated forfeitures. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure Text Block | |
Income Taxes | 13. Income Taxes Year Ended December 31, 2022 2021 2020 Current taxes: Federal $ — $ — $ — State 11,618 5,503 2,685 Total current taxes 11,618 5,503 2,685 Deferred taxes: Federal 52,191 (251,367) — State 13,548 (81,927) — Total deferred taxes 65,739 (333,294) — Income tax expense (benefit) $ 77,357 $ (327,791) $ 2,685 During the year ended December 31, 2022, the Company recorded income tax expense of $77.4 million, comprised of non-cash tax expense of $73.4 million and cash tax expense of $4.0 million for state income taxes in certain states in which state taxable income exceeded available net operating losses. Due to the Company’s ability to utilize its net operating losses to offset federal taxable income and taxable income in many states, the majority of the Company’s tax provision is a non-cash tax expense until the Company’s net operating losses have been fully utilized. During the year ended December 31, 2021, the Company recorded income tax benefit of $327.8 million, which primarily pertains to the income tax benefit of not On March 27, 2020. the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act was enacted and signed into law. The Company benefitted from certain provisions of the CARES Act, specifically, the increase in allowable business interest deduction from 30% of adjusted taxable income to 50% of adjusted taxable income, which allowed the Company to take additional interest deductions for the period ended December 31, 2020. Additionally, the Company was able to claim 100% bonus depreciation on leasehold improvements incurred in the period ended December 31, 2020 and 2019. A reconciliation of income taxes computed using the U.S. federal statutory rate of 21% to that reflected in the consolidated statements of income are as follows (in thousands): Year Ended December 31, 2022 2021 2020 Income tax expense using U.S. federal statutory rate $ 53,009 $ 42,138 $ 22,861 Permanent differences (290) 426 325 State income taxes, net of federal benefit 16,160 12,554 7,565 Executive compensation - Section 162(m) 2,654 695 1,718 Excess tax benefits 3,613 6,270 5,132 Fair market valuation of Note Hedge Warrants and Convertible Note Hedges (50) 325 1,680 Tax credits (252) (9) (3,149) Expiring net operating losses and tax credits 1,087 491 1,991 Effect of change in state tax rate on deferred tax assets and deferred tax liabilities 2,581 123 (208) Change in the valuation allowance (1,155) (390,804) (35,230) Income tax expense (benefit) $ 77,357 $ (327,791) $ 2,685 The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities. These differences are measured using the enacted statutory tax rates that are expected to be in effect for the years in which differences are expected to reverse. Deferred tax assets and liabilities were determined based on the difference between financial statement and tax bases using enacted tax rates in effect for the year in which the differences are expected to reverse. December 31, 2022 2021 Deferred tax assets: Net operating loss carryforwards $ 88,769 $ 165,022 Tax credit carryforwards 59,290 60,125 Capitalized research and development 12,683 4,981 Share-based compensation 13,666 16,857 Basis difference on collaboration agreement for North America with AbbVie 95,460 78,194 Accruals and reserves 5,935 5,003 Basis difference on Convertible Notes 2,845 8,166 Intangible assets 5,299 5,396 Operating lease liability 5,337 5,971 Other 1,242 3,997 Total deferred tax assets 290,526 353,712 Deferred tax liabilities: Basis difference on Convertible Notes — (11,960) Operating lease right-of-use assets (3,810) (4,248) Total deferred tax liabilities (3,810) (16,208) Net deferred tax asset 286,716 337,504 Valuation allowance (3,055) (4,210) Net deferred tax asset $ 283,661 $ 333,294 On a periodic basis, the Company reassesses the valuation allowance on its deferred income tax assets weighing positive and negative evidence to assess the recoverability of the deferred tax assets. During the year ended December 31, 2021, the Company reassessed the valuation allowance noting the shift of positive evidence outweighing negative evidence, including: continued strong prescription demand growth of LINZESS, continued profitability of a GI-focused business since completing the tax-free spin-off of Cyclerion, and expectations regarding future profitability. After assessing both the positive evidence and negative evidence, management determined it was more likely than not that the Company will realize the majority of its deferred tax assets and during the year ended December 31, 2021, released the majority of its valuation allowance for the deferred tax assets that are expected to be utilized in future years. As of December 31, 2022, the Company maintained a valuation allowance of $3.1 million on deferred tax assets not expected to be realized, related primarily to certain tax credits that are expected to expire prior to utilization. The valuation allowance decreased by $1.2 million during the year ended December 31, 2022 primarily for certain tax credits that expired unused during 2022. The valuation allowance decreased by $390.8 million during the year ended December 31, 2021 primarily due to the Company’s release of the majority of its valuation allowance, as described above, as well as the use of net operating losses to offset taxable income. The valuation allowance decreased $35.2 million during the year ended December 31, 2020 primarily due to the Company’s offsetting taxable income with previously disallowed interest expense and net operating losses, partially offset by an increase in deferred tax asset for the basis difference of the collaboration agreement for North America with AbbVie. Subject to the limitations described below, at December 31, 2022, the Company had federal net operating loss carryforwards of $689.4 million, of which $559.8 million is subject to expiration between 2033 and 2038 and $129.6 million may be carried forward indefinitely. As of December 31, 2022, the Company had state net operating loss carryforwards of $509.5 million to offset future state taxable income, which is subject to expiration between 2032 and 2039. The Company also had tax credit carryforwards of $63.9 million as of December 31, 2022 to offset future federal and state income taxes, which is subject to expiration at various times through 2040. Utilization of net operating loss carryforwards and research and development credit carryforwards may be subject to a substantial annual limitation due to ownership change limitations that could occur in the future in accordance with Section 382 of the Internal Revenue Code of 1986 (“IRC Section 382”) and with Section 383 of the Internal Revenue Code of 1986, as well as similar state provisions. These ownership changes may limit the amount of net operating loss carryforwards and research and development credit carryforwards that can be utilized annually to offset future taxable income and taxes, respectively. In general, an ownership change, as defined by IRC Section 382, results from transactions increasing the ownership of certain stockholders or public groups in the stock of a corporation by more than 50 percentage points over a three-year period. The following table summarizes the changes in the Company’s unrecognized income tax benefits for the years ended December 31, 2022, 2021, and 2020 (in thousands): December 31, 2022 2021 2020 Balance at the beginning of the period $ 84,606 $ 68,087 $ 53,099 Increases based on tax positions related to the current period 101,225 83,206 66,687 Decreases for tax positions in prior periods (83,206) (66,687) (51,699) Balance at the end of the period $ 102,625 $ 84,606 $ 68,087 The Company had gross unrecognized tax benefits of $102.6 million, $84.6 million, and $68.1 million as of December 31, 2022, 2021 and 2020 . total unrecognized tax benefits at December 31, 2022, million would, if recognized, affect the Company’s effective tax rate, and the remaining amount would not affect the Company’s effective tax rate, as it relates to a temporary timing difference. Reserves for uncertain tax positions of $9.2 million and $2.9 million are recorded in other liabilities on the Company’s consolidated balance sheets as of December 31, 2022 and 2021, respectively. The Company will recognize interest and penalties, if any, related to uncertain tax positions in income tax expense. As of December 31, 2022 and 2021, an insignificant amount of penalties have been accrued. The statute of limitations for assessment by the Internal Revenue Service (“IRS”) and state tax authorities is open for tax years ended December 31, 2019 through the present, although net operating losses generated from years prior to 2019 could be subject to examination and adjustments to the extent utilized in future years. There are currently no federal or state income tax audits in progress. |
Defined Contribution Plan
Defined Contribution Plan | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure Text Block | |
Defined Contribution Plan | 14. Defined Contribution Plan The Ironwood Pharmaceuticals, Inc. 401(k) Savings Plan is a defined contribution plan in the form of a qualified 401(k) plan in which substantially all employees are eligible to participate upon employment. Subject to certain IRS limits, eligible employees may elect to contribute from 1% to 100% of their compensation. Company contributions to the plan are at the sole discretion of the Company. During the years ended December 31, 2022 and 2021, the Company provided a matching contribution equal to the greater of: (a) 100% of employee contributions on the first 3% of eligible compensation and 50% of employee contributions on the next 3% of eligible compensation; or (b) 75% of the first $10,000 of employee contributions. During the year ended December 31, 2020, the Company provided a matching contribution of 75% of the employee’s contributions, up to $6,000 annually. During the years ended December 31, 2022, 2021, and 2020, the Company recorded $2.2 million, $2.2 million, and $1.8 million of expense related to its 401(k) company match, respectively. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2022 | |
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Related Party Transactions | 15. Related Party Transactions The Company previously reflected amounts due from and due to Allergan prior to its acquisition by AbbVie in May 2020 as related party receivables and payables, as appropriate. Following the acquisition of Allergan by AbbVie, the Company determined that AbbVie is not a related party to the Company. On April 1, 2019, the Company completed the Separation of its soluble guanylate cyclase business, and certain other assets and liabilities, into 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 the Company’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. In connection with the Separation, the Company executed certain contracts with Cyclerion, whose President and Chief Scientific Officer at the time of the Separation became a member of the Company’s Board of Directors in April 2019. Pursuant to a development agreement with Cyclerion, Cyclerion provided the Company with certain research and development services with respect to certain of the Company’s products and product candidates. Services received were paid at a mutually agreed upon rate and development activities were governed by a joint steering committee comprised of representatives from both Cyclerion and the Company. The Company recorded $2.3 million in research and development expenses under the development agreement during the year ended December 31, 2020. |
Workforce Reduction and Restruc
Workforce Reduction and Restructuring | 12 Months Ended |
Dec. 31, 2022 | |
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Workforce Reduction and Restructuring | 16. Workforce Reductions and Restructuring In September 2020, the Company announced that one of its two identical Phase III trials evaluating IW-3718 in refractory GERD did not meet certain criteria, including the study’s primary endpoint of achieving a statistically significant improvement in heartburn severity. Based on these findings, the Company discontinued development of IW-3718. In connection with this decision, the Company reduced its workforce by approximately 100 full-time employees. This workforce reduction affected both field-based and home-office employees, including the relevant general and administrative support functions. The Company substantially completed the reduction in its workforce in the year ended December 31, 2020. The Company incurred $15.5 million for the year ended December 31, 2020, in restructuring expenses, primarily for severance, benefits and related costs related to this reduction in its workforce. Restructuring expenses during the year ended December 31, 2020 also included $1.2 million related to the impairment The following table summarizes the accrued liabilities activity recorded in connection with the reduction in workforce in September 2020 and related restructuring activities during the year ended December 31, 2022 (in thousands): Amounts Amounts Accrued at Accrued at December 31, 2021 Charges Amount Paid Adjustments December 31, 2022 Employee severance, benefits and related costs $ 462 $ — $ (462) $ — $ — The following table summarizes the accrued liabilities activity recorded in connection with the reductions in workforce and related restructuring activities during the year ended December 31, 2021 (in thousands): Amounts Amounts Accrued at Accrued at December 31, 2020 Charges Amount Paid Adjustments December 31, 2021 Employee severance, benefits and related costs $ 10,902 $ 1,025 $ (10,611) $ (854) $ 462 Contract related costs 5 48 (53) — — Total $ 10,907 $ 1,073 $ (10,664) $ (854) $ 462 |
Selected Quarterly Financial Da
Selected Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure Text Block | |
Selected Quarterly Financial Data (Unaudited) | 17. Selected Quarterly Financial Data (Unaudited) The following table contains quarterly financial information for the years ended December 31, 2022 and 2021. The Company believes that the following information reflects all normal recurring adjustments necessary for a fair presentation of the information for the periods presented. The operating results for any quarter are not necessarily indicative of results for any future period. First Second Third Fourth Total Quarter Quarter Quarter Quarter Year (in thousands, except per share data) 2022 Total revenues $ 97,529 $ 97,231 $ 108,637 $ 107,199 $ 410,596 Total cost and expenses 39,683 41,576 40,164 38,836 160,259 Other expense, net (1,381) (1,870) 1,434 3,902 2,085 Net income and comprehensive income 38,801 37,080 50,317 48,867 175,065 Net income per share—basic (1) 0.25 0.24 0.33 0.32 1.13 Net income per share—diluted (1) 0.21 0.21 0.28 0.27 0.96 (1) Quarterly basic and diluted net income per share do not add to full fiscal year total due to rounding. First Second Third Fourth Total Quarter Quarter Quarter Quarter Year (in thousands, except per share data) 2021 Total revenues $ 88,845 $ 104,031 $ 103,747 $ 117,130 $ 413,753 Total cost and expenses 43,447 38,933 38,576 60,538 181,494 Other expense, net (5,040) (10,726) (5,499) (10,337) (31,602) Net income and comprehensive income 39,926 391,303 55,845 41,374 528,448 Net income per share—basic 0.25 2.42 0.34 0.25 3.26 Net income per share—diluted 0.25 2.39 0.34 0.25 3.21 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
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Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of Ironwood and its wholly-owned subsidiaries, as of December 31, 2022, Ironwood Pharmaceuticals Securities Corporation and Ironwood Pharmaceuticals GmbH. All intercompany transactions and balances are eliminated in consolidation. |
Segment Information | Segment Information Operating segments are components of an enterprise for which separate financial information is available and is evaluated regularly by the Company’s chief operating decision-maker in deciding how to allocate resources and in assessing performance. The Company currently operates in one reportable business segment – human therapeutics. |
Reclassifications | Reclassifications |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in accordance with U.S. generally accepted accounting principles requires the Company’s management to make estimates and judgments that may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the 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 consolidated financial statements include those related to revenue recognition; accounts receivable; 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; balance sheet classification of convertible notes; fair value of derivatives; 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. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investment instruments with a remaining maturity when purchased of three months or less to be cash equivalents. Investments qualifying as cash equivalents primarily consist of money market funds, repurchase agreements, commercial paper, and corporate bonds. The carrying amount of cash equivalents approximates fair value. The amount of cash equivalents included in cash and cash equivalents was $650.2 million and $595.2 million at December 31, 2022 and 2021, respectively. |
Restricted Cash | Restricted Cash The Company is contingently liable under unused letters of credit with a bank, related to the Company’s facility lease and vehicle lease agreements, in the amount of $1.7 million as of December 31, 2022 and 2021. The Company records as restricted cash the collateral used to secure these letters of credit. The amount of restricted cash in current assets and non-current assets was $1.3 million and $0.5 million, respectively, at December 31, 2022 and 2021. |
Concentrations of Suppliers | Concentrations of Suppliers The Company relies on its collaboration partners and their suppliers to manufacture linaclotide API, linaclotide finished drug product, and finished goods. If any of the Company’s collaboration partners and their suppliers were to limit or terminate production or otherwise fail to meet the quality or delivery requirements needed to satisfy the supply commitments, the process of locating and qualifying alternate sources could require up to several months, during which time production could be delayed. Such delays could have a material adverse effect on the Company’s business, financial position and results of operations. |
Accounts Receivable | Accounts Receivable The Company makes judgments as to its ability to collect outstanding receivables and provides an allowance for credit losses when collection becomes doubtful. Provisions are made based upon a specific review of all significant outstanding invoices and the overall quality and age of those invoices not specifically reviewed. The Company’s receivables relate primarily to amounts reimbursed under its collaboration, license, and other agreements. The Company believes that credit risks associated with these partners are not significant. The Company reviews the need for an allowance for credit losses for its receivables based on various factors including payment history and historical bad debt experience. The Company had no allowance for credit losses as of December 31, 2022 or 2021. |
Concentrations of Credit Risk | Concentrations of Credit Risk Financial instruments that subject the Company to credit risk primarily consist of cash and cash equivalents, restricted cash, and accounts receivable. The Company maintains its cash and cash equivalent balances with high-quality financial institutions and the Company believes that such funds are subject to minimal credit risk. The Company has adopted an investment policy which limits the amounts the Company may invest in certain types of investments, and requires all investments held by the Company to be at least A- rated, thereby reducing credit risk exposure. Accounts receivable primarily consist of amounts due under the linaclotide collaboration agreement with AbbVie for North America (Note 4). The Company does not obtain collateral for its accounts receivable. The Company previously reflected amounts due from Allergan plc (“Allergan”), net of amounts payable to Allergan, prior to its acquisition by AbbVie as related party accounts receivable, net. Following the acquisition of Allergan by AbbVie, the Company determined that AbbVie is not a related party to the Company (Note 15). The percentages of revenue recognized from significant collaborative partners of the Company in the years ended December 31, 2022, 2021 and 2020 as well as the account receivable balances, net of any payables due, at December 31, 2022 and 2021 are included in the following table: Accounts Receivable Revenue December 31, Year Ended December 31, 2022 2021 2022 2021 2020 Collaborative Partner: AbbVie (North America and Europe) 80 % 81 % 98 % 98 % 96 % |
Property and Equipment | Property and Equipment Property and equipment, including leasehold improvements, are recorded at cost, and are depreciated when placed into service using the straight-line method based on their estimated useful lives as follows: Estimated Useful Life Asset Description (In Years) Laboratory equipment 5 Computer and office equipment 3 Furniture and fixtures 7 Software 3 Included in property and equipment are certain costs of software obtained for internal use. Costs incurred during the preliminary project stage are expensed as incurred, while costs incurred during the application development stage are capitalized and amortized over the estimated useful life of the software. The Company also capitalizes costs related to specific upgrades and enhancements when it is probable the expenditures will result in additional functionality. Maintenance and training costs related to software obtained for internal use are expensed as incurred. Leasehold improvements are amortized over the shorter of the estimated useful life of the asset or the lease term. Costs for capital assets not yet placed into service have been capitalized as construction in process, and will be depreciated in accordance with the above guidelines once placed into service. Maintenance and repair costs are expensed as incurred. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company regularly reviews the carrying amount of its long-lived assets to determine whether indicators of impairment may exist, which warrant adjustments to carrying values or estimated useful lives. If indications of impairment exist, projected future undiscounted cash flows associated with the asset are compared to the carrying amount to determine whether the asset’s value is recoverable. If the carrying value of the asset exceeds such projected undiscounted cash flows, the asset will be written down to its estimated fair value. |
Income Taxes | Income Taxes The Company provides for income taxes under the asset and liability method. Deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates in effect when the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to reflect the uncertainty associated with their ultimate realization. The Company accounts for uncertain tax positions recognized in the consolidated financial statements in accordance with the provisions of Accounting Standards Codification (“ASC”) Topic 740, Income Taxes |
Financing Costs | Financing Costs Financing costs include costs directly attributable to the Company’s offerings of its equity securities and its debt financings. Costs attributable to equity offerings are charged as a reduction to stockholders’ equity against the proceeds of the offering once the offering is completed. Costs attributable to debt financings are deferred and amortized to interest expense over the term of the debt using the effective interest method. In accordance with ASC Topic 835, Interest |
Leases | Leases The Company’s lease portfolio for the year ended December 31, 2022 included: an office lease for its headquarters location, vehicle leases for its salesforce representatives, and leases for computer and office equipment. The Company determines if an arrangement is a lease at the inception of the contract and determines the classification of its leases at lease commencement. The asset component of the Company’s operating leases is recorded as operating lease right-of-use assets, and the liability component is recorded as current portion of operating lease liabilities and operating lease liabilities, net of current portion in the Company’s consolidated balance sheets. As of December 31, 2022, the Company did not record any finance leases. Right-of-use assets and operating lease liabilities are recognized based on the present value of lease payments over the lease term at the lease commencement date. The lease term used to measure the right-of-use asset and operating lease liability may include options to extend the lease when it is reasonably certain that the Company will exercise the option. The Company accounts for lease components and non-lease components together as a single lease component for the asset class of right-of-use real estate assets. The Company uses an incremental borrowing rate based on the information available at lease commencement in determining the present value of lease payments, if an implicit rate of return is not readily determinable. Operating lease right-of-use assets are adjusted for prepaid rent, initial direct costs, and lease incentives. Right-of-use assets and operating lease liabilities are remeasured upon reassessment events and modifications to leases using the present value of remaining lease payments and estimated incremental borrowing rate at the time of remeasurement, as applicable. Operating lease cost is recognized on a straight-line basis over the lease term, and includes amounts related to short-term leases. The Company has elected to not recognize lease terms with a term of twelve months or less on its balance sheet for all classes of underlying asset types. The Company recognizes variable lease payments as operating expenses in the period in which the obligation for those payments is incurred. Variable lease payments primarily include common area maintenance, utilities, real estate taxes, insurance, and other operating costs that are passed on from the lessor in proportion to the space leased by the Company. |
Derivative Assets and Liabilities | Derivative Assets and Liabilities In June 2015, the Company issued Convertible Senior Notes due 2026 (the “2026 Convertible Notes”, and together with the 2022 Convertible Notes and the 2024 Convertible Notes, the “Convertible Senior Notes”). I Derivatives and Hedging These derivatives are recorded as assets or liabilities at fair value each reporting date and the fair value is determined using the Black-Scholes option-pricing model. The changes in fair value are recorded as a component of other (expense) income in the consolidated statements of income. Significant inputs used to determine the fair value include 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 derivative instruments. 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 cover the same number of shares of Class A Common Stock that initially underlie the 2024 Convertible Notes and the 2026 Convertible Notes (subject to anti-dilution and certain other adjustments). These instruments meet the conditions outlined in ASC 815 to be classified in stockholders’ equity (deficit) and are not subsequently remeasured as long as the conditions for equity classification continue to be met. |
Share Repurchases | Share Repurchases The Company accounts for repurchases of its Class A Common Stock on the trade date by recording the excess of the repurchase price over the par value entirely to additional paid-in capital. All repurchased shares are retired or constructively retired. Issued and outstanding shares are reduced by shares repurchased. |
Revenue Recognition | Revenue Recognition The Company’s revenues are generated primarily through collaborative arrangements and license agreements related to the research and development and commercialization of linaclotide. The terms of the collaborative research and development, license, co-promotion and other agreements contain multiple performance obligations which may include (i) licenses, (ii) research and development activities, including participation on joint steering committees, (iii) the manufacture of finished drug product, API, or development materials for a partner, which are reimbursed at a contractually determined rate, and (iv) education or co-promotion activities by the Company’s clinical sales specialists. Non-refundable payments to the Company under these agreements may include (i) up-front license fees, (ii) payments for research and development activities, (iii) payments for the manufacture of finished drug product, API, or development materials, (iv) payments based upon the achievement of certain milestones, (v) payments for sales detailing, promotional support services and medical education initiatives, and (vi) royalties on product sales. The Company receives its share of the net profits or bears its share of the net losses from the sale of linaclotide in the U.S. through its collaboration agreement with AbbVie for North America. The Company has adopted a policy to recognize revenue net of tax withholdings, as applicable. Collaboration, License, and Other Commercial Agreements Upon licensing intellectual property to a customer, the Company determines if the license is distinct from the other performance obligations identified in the arrangement. The Company recognizes revenues from the transaction price, including non-refundable, up-front fees allocated to the license when the license is transferred to the customer if the license has distinct benefit to the customer. For licenses that are combined with other promises, the Company assesses the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time. For performance obligations that are satisfied over time, the Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. The Company’s license and collaboration agreements include milestone payments, such as development and other milestones. The Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price using the most likely amount method at the inception of the agreement. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the control of the Company, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. The transaction price is then allocated to each performance obligation on a relative standalone selling price basis, for which the Company recognizes revenue as or when the performance obligations under the contract are satisfied. The Company re-evaluates the probability of achievement of such milestones and any related constraint at each reporting period, and any adjustments are recorded on a cumulative catch-up basis. Agreements that include the supply of API or drug product for either clinical development or commercial supply at the customer’s discretion are generally considered as options. The Company assesses if these options provide a material right to its partner, and if so, they are accounted for as separate performance obligations. If the Company is entitled to additional payments when the customer exercises these options, any additional payments are recorded as revenue when the customer obtains control of the goods, which is typically upon shipment for sales of API and finished drug product. For agreements that include sales-based royalties, including milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue when the related sales occur. Net Profit or Net Loss Sharing In accordance with ASC Topic 808, Collaborative Arrangements Revenue from Contracts with Customers The Company’s collaborative arrangements revenues generated from sales of LINZESS in the U.S. are considered akin to sales-based royalties. In accordance with the sales-based royalty exception, the Company recognizes its share of the pre-tax commercial net profit or net loss generated from the sales of LINZESS in the U.S. in the period the product sales are earned, as reported by AbbVie, and related cost of goods sold and selling, general and administrative expenses as incurred by the Company and AbbVie. These amounts are partially determined based on amounts provided by AbbVie and involve the use of estimates and judgments, such as product sales allowances and accruals related to prompt payment discounts, chargebacks, governmental and contractual rebates, wholesaler fees, product returns, and co-payment assistance costs, which could be adjusted based on actual results in the future. The Company is highly dependent on AbbVie for timely and accurate information regarding net revenues from sales of LINZESS in the U.S. in accordance with both ASC 808 and ASC 606, and the related costs, in order to accurately report its results of operations. If the Company does not receive timely and accurate information or incorrectly estimates activity levels associated with the collaboration at a given point in time, the Company could be required to record adjustments in future periods. In accordance with ASC 606-10-55, Principal Agent Considerations Sale of Active Pharmaceutical Ingredient During the year ended December 31, 2020 the Company produced linaclotide API, finished drug product, finished goods, and/or development materials for certain of its partners. As of December 31, 2020, the Company was no longer responsible for the supply of linaclotide API, finished drug product, finished goods or development materials to its partners, though the Company may provide development materials to certain of its partners on a periodic basis. Sales of such development materials have been and are expected to continue to be immaterial. The Company recognizes revenue on linaclotide API, finished drug product, finished goods, and development materials when control has transferred to the partner, which generally occurs upon shipment after the material passed all quality testing required for acceptance by the partner. Other The Company’s deferred revenue balance consists of advance billings and payments received from customers in excess of revenue recognized. |
Cost of Revenues | Cost of Revenues Cost of revenues includes cost related to the sales of linaclotide API, finished drug product, and finished goods and are generally recognized upon shipment to certain of the Company’s partners outside of the U.S. The Company’s cost of revenues for linaclotide consists of the internal and external costs of producing such API, finished drug product, and finished goods. |
Research and Development Costs | Research and Development Costs The Company generally expenses research and development costs to operations as incurred. The Company capitalizes nonrefundable advance payments made by the Company for research and development activities and defers expense recognition until the related goods are received or the related services are performed. Research and development expenses are comprised of costs incurred in performing research and development activities, including salary, benefits, share-based compensation, and other employee-related expenses; laboratory supplies and other direct expenses; facilities expenses; overhead expenses; third-party contractual costs relating to nonclinical studies and clinical trial activities and related contract manufacturing expenses, development of manufacturing processes and regulatory registration of third-party manufacturing facilities; licensing fees for the Company’s product candidates; and other outside expenses. The Company has certain collaboration agreements pursuant to which it shares or has shared research and development expenses related to linaclotide. The Company records expenses incurred under such linaclotide collaboration arrangements as research and development expense. Under the Company’s collaboration agreement with AbbVie for North America, the Company is reimbursed for certain research and development expenses and nets these reimbursements against its research and development expenses as incurred. Research and development expense includes up-front payment, non-contingent payment, and milestone payment obligations under the COUR Collaboration Agreement (Note 4). Expense is recognized when the obligation is determined to be probable. |
Restructuring Expenses | Restructuring Expenses Restructuring expenses are comprised primarily of costs associated with exit and disposal activities in accordance with ASC Topic 420, Exit or Disposal Cost Obligations |
Selling, General and Administrative Expenses | Selling, General and Administrative Expenses The Company expenses selling, general and administrative costs to operations as incurred. Selling, general and administrative expenses consist primarily of compensation, benefits and other employee-related expenses for personnel in the Company’s administrative, finance, legal, information technology, business development, commercial, sales, marketing, communications and human resources functions. Other costs include the legal costs of pursuing patent protection of the Company’s intellectual property, general and administrative related facility costs, insurance costs and professional fees for accounting, tax, consulting, legal and other services. The Company includes AbbVie’s selling, general and administrative cost-sharing payments in the calculation of the net profits and net losses from the sale of LINZESS in the U.S. and presents the net payment to or from AbbVie as collaboration expense or collaborative arrangements revenue, respectively. |
Share-Based Compensation Expense | Share-Based Compensation Expense The Company grants awards under its share-based compensation programs, including stock awards, restricted stock awards (“RSAs”), restricted stock units (“RSUs”) (including both time-based and performance-based RSUs), stock options, and shares issued under the Company’s employee stock purchase plan (“ESPP”). Share-based compensation is recognized as expense in the consolidated statements of income based on the grant date fair value over the requisite service period, net of estimated forfeitures. The Company estimates forfeitures over the requisite service period using historical forfeiture activity and records share-based compensation expense only for those awards that are expected to vest. The Company estimates the fair value of stock options using the Black-Scholes option-pricing model, which requires the use of subjective assumptions including volatility and expected term, among others. The fair value of stock awards, RSAs, and RSUs is based on the market value of the Company’s Class A Common Stock on the date of grant, with the exception of performance-based RSUs with market conditions, which are measured using the Monte Carlo simulation method on the date of grant (Note 12). Discounted stock purchases under the Company’s ESPP are valued on the first date of the offering period using the Black-Scholes option-pricing model to compute the fair value of the lookback provision plus the purchase discount. For awards that vest based on service conditions and market conditions, the Company uses a straight-line method to recognize compensation expense over the respective service period. For awards that contain performance conditions, the Company determines the appropriate amount to expense at each reporting date based on the anticipated achievement of performance targets, which requires judgement, including forecasting the achievement of future specified targets. At the date performance conditions are determined to be probable of achievement, the Company records a cumulative expense catch-up, with remaining expense amortized over the remaining service period. Throughout the performance period, the Company re-assesses the estimated performance and updates the number of performance-based awards that it believes will ultimately vest. Discounted stock purchases under the Company’s ESPP are recognized over the offering period. Compensation expense related to modified awards is measured based on the fair value for the awards as of the modification date. Any incremental compensation expense arising from the excess of the fair value of the awards on the modification date compared to the fair value of the awards immediately before the modification date is recognized at the modification date or ratably over the requisite remaining service period, as appropriate. While the assumptions used to calculate and account for share-based compensation awards represent management’s best estimates, these estimates involve inherent uncertainties and the application of management’s judgment. As a result, if revisions are made to the Company’s underlying assumptions and estimates, the Company’s share-based compensation expense could vary significantly from period to period. |
Patent Costs | Patent Costs The Company incurred and recorded as operating expense legal and other fees related to patents of $1.3 million, $1.7 million, and $2.3 million for the years ended December 31, 2022, 2021 and 2020, respectively. These costs were charged to selling, general and administrative expenses as incurred. |
Net Income Per Share | Net Income Per Share Basic net income per common share is computed by dividing the net income by the weighted average number of common shares outstanding during the period. Diluted net income per share reflects the potential dilution beyond common shares for basic net income per share that could occur if securities or other contracts to issue common shares were exercised, converted into common shares, or resulted in the issuance of common shares that would have shared in the Company’s earnings. |
Subsequent Events | Subsequent Events The Company considers events or transactions that have occurred after the balance sheet date of December 31, 2022, but prior to the filing of the financial statements with the Securities and Exchange Commission (“SEC”) to provide additional evidence relative to certain estimates or to identify matters that require additional recognition or disclosure. Subsequent events have been evaluated through the filing of the financial statements accompanying this Annual Report on Form 10-K. |
New Accounting Pronouncements | New Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (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 year ended December 31, 2022 that had a material effect on its consolidated financial statements. In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity The Company adopted ASU 2020-06 on January 1, 2022 using the modified retrospective approach, which resulted in a cumulative-effect December 31, 2021 Effect of the Adoption January 1, 2022 Consolidated Balance Sheet As Reported of ASU 2020-06 As Adjusted Deferred tax assets $ 333,294 $ 16,855 $ 350,149 Current portion of convertible senior notes 116,858 3,581 120,439 Long-term portion of convertible senior notes 337,333 57,324 394,657 Additional paid-in-capital 1,543,357 (110,217) 1,433,140 Retained earnings (937,608) 66,167 (871,441) Interest expense recognized in subsequent periods is reduced as a result of accounting for convertible debt instruments as a single liability measured at amortized cost, with a decrease of $22.1 million of non-cash interest expense during the year ended December 31, 2022 compared to the year ended December 31, 2021 related to convertible debt instruments outstanding on the adoption date. The adoption of ASU 2020-06 does not impact the Company’s liquidity or cash flows. In May 2021, the FASB issued ASU No. 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options The Company adopted ASU 2021-04 as of January 1, 2022 . The adoption of ASU 2021-04 did not have a material impact on the Company’s financial position and results of operations. Other recent accounting pronouncements issued, but not yet effective, are not expected to be applicable to the Company or have a material effect on the consolidated financial statements upon future adoption. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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Schedule of percentages of revenue and accounts receivable recognized from significant customers | Accounts Receivable Revenue December 31, Year Ended December 31, 2022 2021 2022 2021 2020 Collaborative Partner: AbbVie (North America and Europe) 80 % 81 % 98 % 98 % 96 % |
Schedule of property and equipment | Estimated Useful Life Asset Description (In Years) Laboratory equipment 5 Computer and office equipment 3 Furniture and fixtures 7 Software 3 Property and equipment, net consisted of the following (in thousands): December 31, 2022 2021 Software $ 5,414 $ 5,667 Leasehold improvements 7,407 7,407 Laboratory equipment 1,327 1,327 Furniture and fixtures 1,542 1,517 Computer and office equipment 1,362 1,285 17,052 17,203 Less accumulated depreciation and amortization (10,764) (9,628) $ 6,288 $ 7,575 |
Schedule of ASU 2020-06 cumulative-effect adjustment | December 31, 2021 Effect of the Adoption January 1, 2022 Consolidated Balance Sheet As Reported of ASU 2020-06 As Adjusted Deferred tax assets $ 333,294 $ 16,855 $ 350,149 Current portion of convertible senior notes 116,858 3,581 120,439 Long-term portion of convertible senior notes 337,333 57,324 394,657 Additional paid-in-capital 1,543,357 (110,217) 1,433,140 Retained earnings (937,608) 66,167 (871,441) |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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Schedule of computation of basic and diluted net loss per common share | The following table sets forth the computation of basic and diluted net income per common share (in thousands, except per share amounts): Year Ended December 31, 2022 2021 2020 Numerator: Net income $ 175,065 $ 528,448 $ 106,176 Add back interest expense, net of tax benefit, on assumed conversion of 2024 Convertible Notes 1,781 — — Add back interest expense, net of tax benefit, on assumed conversion of 2026 Convertible Notes 2,668 — — Numerator used in computing net income per share — diluted $ 179,514 $ 528,448 $ 106,176 Denominator: Weighted average number of common shares outstanding used in computing net income per share — basic 154,366 162,245 159,427 Effect of dilutive securities: Stock options 306 488 367 Time-based restricted stock units 1,375 1,422 766 Performance-based restricted stock units 282 146 1 Restricted stock 115 117 94 2024 Convertible Notes assumed conversion 14,934 — — 2026 Convertible Notes assumed conversion 14,934 — — Dilutive potential common shares Weighted average number of common shares outstanding used in computing net income per share — diluted 186,312 164,418 160,655 Net income per share — basic $ 1.13 $ 3.26 $ 0.67 Net income per share — diluted $ 0.96 $ 3.21 $ 0.66 |
Schedule of potentially dilutive securities that have been excluded from computation of diluted weighted average shares outstanding | The outstanding securities have been excluded from the computation of diluted weighted average shares outstanding, as applicable, as their effect would be anti-dilutive (in thousands): Year Ended December 31, 2022 2021 2020 Stock options 6,152 7,701 11,746 Restricted stock awards — — 2 Time-based restricted stock units 10 102 209 Performance-based restricted stock units 1,182 121 93 Note Hedge Warrants 8,318 8,318 8,318 2022 Convertible Notes — 8,318 8,318 2024 Convertible Notes — 14,934 14,934 2026 Convertible Notes — 14,934 14,934 Total 15,662 54,428 58,554 |
Collaboration, License, and O_2
Collaboration, License, and Other Agreements (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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Schedule of revenue attributable to transactions from collaboration and license arrangements | Year Ended December 31, Collaborative Arrangements Revenue 2022 2021 2020 Linaclotide Collaboration and License Agreements: AbbVie (North America) $ 401,498 $ 403,085 $ 370,902 AbbVie (Europe and other) 2,444 2,558 2,196 AstraZeneca (China, including Hong Kong and Macau) 635 743 682 Astellas (Japan) 2,001 2,232 2,128 Other Agreements: Alnylam (GIVLAARI) 2,194 2,411 4,302 Other 1,824 1,755 1,335 Total collaborative arrangements revenue $ 410,596 $ 412,784 $ 381,545 Sale of API Linaclotide Agreements: Astellas (Japan) $ — $ 149 $ 2,017 AstraZeneca (China, including Hong Kong and Macau) — 597 5,540 Other — 223 421 Total sale of API $ — $ 969 $ 7,978 |
AbbVie Plc | |
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Schedule of revenue attributable to transactions from collaboration and license arrangements | The Company recognized collaborative arrangements revenue from the AbbVie collaboration agreement for North America during the years ended December 31, 2022, 2021, and 2020 as follows (in thousands): Year Ended December 31, 2022 2021 2020 Collaborative arrangements revenue related to sales of LINZESS in the U.S. $ 398,767 $ 400,371 $ 368,603 Royalty revenue 2,731 2,714 2,299 Total collaborative arrangements revenue $ 401,498 $ 403,085 $ 370,902 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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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 December 31, Identical Assets Inputs Inputs 2022 (Level 1) (Level 2) (Level 3) Assets: Cash and cash equivalents: Money market funds $ 250,313 $ 250,313 $ — $ — Repurchase agreements 261,075 — 261,075 — Commercial paper 138,809 — 138,809 — Restricted cash: Money market funds 1,735 1,735 — — Total assets measured at fair value $ 651,932 $ 252,048 $ 399,884 $ — Liabilities: Note hedge warrants $ 19 $ — $ — $ 19 Total liabilities measured at fair value $ 19 $ — $ — $ 19 Fair Value Measurements at Reporting Date Using Quoted Prices in Significant Other Significant Active Markets for Observable Unobservable December 31, Identical Assets Inputs Inputs 2021 (Level 1) (Level 2) (Level 3) Assets: Cash and cash equivalents: Money market funds $ 595,233 $ 595,233 $ — $ — Restricted cash: Money market funds 1,735 1,735 — — Convertible note hedges 1,115 — — 1,115 Total assets measured at fair value $ 598,083 $ 596,968 $ — $ 1,115 Liabilities: Note hedge warrants $ 1,316 $ — $ — $ 1,316 Total liabilities measured at fair value $ 1,316 $ — $ — $ 1,316 |
Schedule of assumptions used in fair market valuations | The following inputs were used in the fair market valuation of the Convertible Note Hedges as of December 31, 2021 and the Note Hedge Warrants as of December 31, 2022 and 2021: December 31, 2022 December 31, 2021 Note Hedge Convertible Note Hedge Warrants Note Hedges Warrants Risk-free interest rate (1) 4.5 % 0.2 % 0.4 % Expected term 0.3 0.5 1.0 Stock price (2) $ 12.39 $ 11.66 $ 11.66 Strike price (3) $ 18.82 $ 14.51 $ 18.82 Common stock volatility (4) 27.1 % 27.0 % 32.2 % 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 years ended December 31, 2022 and 2021, 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 assets | Convertible Note Hedge Note Hedges Warrants Balance at December 31, 2020 $ 13,065 $ (12,088) Change in fair value, recorded as a component of gain (loss) on derivatives (11,950) 10,772 Balance at December 31, 2021 $ 1,115 $ (1,316) Change in fair value, recorded as a component of gain (loss) on derivatives (1,115) 1,297 Balance at December 31, 2022 $ — $ (19) |
Schedule of the change in Level 3 liabilities | Convertible Note Hedge Note Hedges Warrants Balance at December 31, 2020 $ 13,065 $ (12,088) Change in fair value, recorded as a component of gain (loss) on derivatives (11,950) 10,772 Balance at December 31, 2021 $ 1,115 $ (1,316) Change in fair value, recorded as a component of gain (loss) on derivatives (1,115) 1,297 Balance at December 31, 2022 $ — $ (19) |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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Schedule of components of lease cost and supplemental cash flow information | Year Ended December 31, 2022 2021 2020 Operating lease cost $ 2,509 $ 2,520 $ 2,530 Short-term lease cost 1,070 960 1,420 Total lease cost $ 3,579 $ 3,480 $ 3,950 Year Ended December 31, 2022 2021 2020 Cash paid for amounts included in the measurement of lease liabilities (in thousands) $ 3,114 $ 3,128 $ 1,146 Weighted-average remaining lease term of operating leases (in years) 7.3 8.3 9.3 Weighted-average discount rate of operating leases 5.8 % 5.8 % 5.8 % |
Schedule of future minimum lease payments under non-cancelable operating leases | 2023 $ 3,066 2024 3,126 2025 3,189 2026 3,252 2027 3,317 2028 and thereafter 8,285 Total future minimum lease payments 24,235 Less: present value adjustment (4,571) Operating lease liabilities 19,664 Less: current portion of operating lease liabilities (3,065) Operating lease liabilities, net of current portion $ 16,599 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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Schedule of property and equipment | Estimated Useful Life Asset Description (In Years) Laboratory equipment 5 Computer and office equipment 3 Furniture and fixtures 7 Software 3 Property and equipment, net consisted of the following (in thousands): December 31, 2022 2021 Software $ 5,414 $ 5,667 Leasehold improvements 7,407 7,407 Laboratory equipment 1,327 1,327 Furniture and fixtures 1,542 1,517 Computer and office equipment 1,362 1,285 17,052 17,203 Less accumulated depreciation and amortization (10,764) (9,628) $ 6,288 $ 7,575 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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Schedule of accrued expenses and other current liabilities | Accrued expenses and other current liabilities consisted of the following (in thousands): December 31, 2022 2021 Accrued compensation and benefits $ 12,268 $ 16,653 Restructuring liabilities — 462 Stock repurchase — 3,009 Other 4,432 3,442 Total accrued expenses and other current liabilities $ 16,700 $ 23,566 |
Notes Payable (Tables)
Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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Schedule of outstanding Convertible Note | The Company’s outstanding balances for the convertible senior notes as of December 31, 2022 and 2021 consisted of the following (in thousands): December 31, 2022 2021 Liability component: Principal: 2022 Convertible Notes $ — $ 120,699 2024 Convertible Notes 200,000 200,000 2026 Convertible Notes 200,000 200,000 Less: unamortized debt discount — (61,641) Less: unamortized debt issuance costs (3,749) (4,867) Net carrying amount $ 396,251 $ 454,191 Equity component: 2022 Convertible Notes — 19,807 2024 Convertible Notes — 41,152 2026 Convertible Notes — 51,350 Total equity component $ — $ 112,309 |
Schedule of interest expense related to Convertible Notes | Year Ended December 31, 2022 2021 2020 Contractual interest expense $ 5,745 $ 7,216 $ 7,216 Amortization of debt issuance costs 1,853 1,678 1,462 Amortization of debt discount — 22,256 20,800 Total interest expense $ 7,598 $ 31,150 $ 29,478 |
Schedule of future minimum payments details of debt | 2023 $ 4,500 2024 203,750 2025 3,000 2026 201,500 Total future minimum payments under the convertible senior notes 412,750 Less: amounts representing interest (12,750) Less: unamortized debt issuance costs (3,749) Convertible senior notes balance $ 396,251 |
Employee Stock Benefit Plans (T
Employee Stock Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Table Text Blocks | |
Summary of expense recognized for share-based compensation arrangements | The following table summarizes share-based compensation expense by award type (in thousands): Year Ended December 31, 2022 2021 2020 Stock options $ 1,471 $ 3,154 $ 7,680 Time-based restricted stock units 17,643 14,539 18,624 Performance-based restricted stock units 5,008 1,295 2,190 Restricted stock awards 2,439 2,684 1,886 Employee stock purchase plan 412 419 722 Stock awards 75 190 73 Total share-based compensation expense $ 27,048 $ 22,281 $ 31,175 |
Share-based compensation expense reflected in the condensed consolidated statements of operations | Year Ended December 31, 2022 2021 2020 Stock options $ 1,471 $ 3,154 $ 7,680 Time-based restricted stock units 17,643 14,539 18,624 Performance-based restricted stock units 5,008 1,295 2,190 Restricted stock awards 2,439 2,684 1,886 Employee stock purchase plan 412 419 722 Stock awards 75 190 73 Total share-based compensation expense $ 27,048 $ 22,281 $ 31,175 |
Schedule of weighted-average assumptions used to estimate the fair value of Relative TSR PSUs | Year Ended December 31, 2022 2021 2020 Fair value of common stock $ 11.13 $ 11.39 $ 11.78 Expected volatility 41.7 % 47.9 % 53.3 % Expected term (in years) 2.8 2.6 2.8 Risk-free interest rate 1.6 % 0.3 % 1.0 % Expected dividend yield — % — % — % |
Summary of restricted stock activity | Weighted- Average Number of Grant Date Shares Fair Value Unvested as of December 31, 2021 263,260 $ 11.61 Granted 172,568 11.22 Vested (246,710) 11.64 Forfeited — — Unvested as of December 31, 2022 189,118 $ 11.22 |
Schedule of weighted-average assumptions used to estimate the fair value of the stock options using the Black-Scholes option-pricing model | Year Ended December 31, 2020 Expected volatility 46.6 % Expected term (in years) 6.1 Risk-free interest rate 1.5 % Expected dividend yield — % |
Summary of stock option activity | Weighted- Weighted- Number of Average Average Aggregate Stock Exercise Contractual Intrinsic Options Price (1) Life Value (in years) (in thousands) Outstanding at December 31, 2021 9,372,794 $ 12.30 3.51 $ 4,528 Granted — — — — Exercised (951,355) 10.88 — — Cancelled (1,490,067) 13.04 — — Outstanding at December 31, 2022 6,931,372 12.34 3.32 5,786 Vested or expected to vest at December 31, 2022 6,929,248 12.34 3.32 5,782 Exercisable at December 31, 2022 6,877,104 12.35 3.30 5,709 (1) Amounts relating to stock options granted prior to the Separation have not been adjusted to reflect the effect of the Separation on the Company’s stock price. |
Schedule of unrecognized share-based compensation expense, net of estimated forfeitures by type of awards and weighted-average period | Unrecognized Weighted-Average Expense, Net Remaining of Estimated Recognition Forfeitures Period (in thousands) (in years) Type of award: Stock options with time-based vesting $ 183 0.54 Restricted stock awards 968 0.45 Time-based restricted stock units 24,436 2.41 Performance-based restricted stock units 6,387 1.49 |
Time-based Restricted Stock Units | |
Table Text Blocks | |
Summary of RSU activity | Weighted- Average Number Grant Date of RSUs Fair Value Outstanding as of December 31, 2021 3,864,108 $ 10.89 Granted 2,265,661 11.08 Vested and released (1,327,573) 11.15 Forfeited (512,051) 10.95 Outstanding as of December 31, 2022 4,290,145 $ 10.91 |
Performance-based Restricted Stock Units | |
Table Text Blocks | |
Summary of RSU activity | Weighted- Average Number Grant Date of PSUs Fair Value Outstanding as of December 31, 2021 833,286 $ 14.06 Granted (1) 598,814 14.30 Vested and released (151,859) 11.68 Forfeited (111,470) 11.65 Outstanding as of December 31, 2022 1,168,771 $ 14.72 (1) Includes an adjustment of 70,759 PSUs related to PSUs granted in prior years which vested during the year ended December 31, 2022 in excess of the target number of PSUs. The weighted-average grant date fair value per share of PSUs granted during the years ended December 31, 2022, 2021, and 2020 was $14.30, $14.65, and $12.48, respectively. The total fair value of PSUs that vested during the year ended December 31, 2022 was $1.7 million. No PSUs vested during the years ended December 31, 2021 and 2020. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Table Text Blocks | |
Schedule of the components of the provision for (benefit from) income taxes | Year Ended December 31, 2022 2021 2020 Current taxes: Federal $ — $ — $ — State 11,618 5,503 2,685 Total current taxes 11,618 5,503 2,685 Deferred taxes: Federal 52,191 (251,367) — State 13,548 (81,927) — Total deferred taxes 65,739 (333,294) — Income tax expense (benefit) $ 77,357 $ (327,791) $ 2,685 |
Reconciliation of income taxes from continuing operations computed using U.S. federal statutory rate to that reflected in operations | Year Ended December 31, 2022 2021 2020 Income tax expense using U.S. federal statutory rate $ 53,009 $ 42,138 $ 22,861 Permanent differences (290) 426 325 State income taxes, net of federal benefit 16,160 12,554 7,565 Executive compensation - Section 162(m) 2,654 695 1,718 Excess tax benefits 3,613 6,270 5,132 Fair market valuation of Note Hedge Warrants and Convertible Note Hedges (50) 325 1,680 Tax credits (252) (9) (3,149) Expiring net operating losses and tax credits 1,087 491 1,991 Effect of change in state tax rate on deferred tax assets and deferred tax liabilities 2,581 123 (208) Change in the valuation allowance (1,155) (390,804) (35,230) Income tax expense (benefit) $ 77,357 $ (327,791) $ 2,685 |
Schedule of components of deferred tax assets and liabilities | December 31, 2022 2021 Deferred tax assets: Net operating loss carryforwards $ 88,769 $ 165,022 Tax credit carryforwards 59,290 60,125 Capitalized research and development 12,683 4,981 Share-based compensation 13,666 16,857 Basis difference on collaboration agreement for North America with AbbVie 95,460 78,194 Accruals and reserves 5,935 5,003 Basis difference on Convertible Notes 2,845 8,166 Intangible assets 5,299 5,396 Operating lease liability 5,337 5,971 Other 1,242 3,997 Total deferred tax assets 290,526 353,712 Deferred tax liabilities: Basis difference on Convertible Notes — (11,960) Operating lease right-of-use assets (3,810) (4,248) Total deferred tax liabilities (3,810) (16,208) Net deferred tax asset 286,716 337,504 Valuation allowance (3,055) (4,210) Net deferred tax asset $ 283,661 $ 333,294 |
Summary of changes in the unrecognized tax benefits | December 31, 2022 2021 2020 Balance at the beginning of the period $ 84,606 $ 68,087 $ 53,099 Increases based on tax positions related to the current period 101,225 83,206 66,687 Decreases for tax positions in prior periods (83,206) (66,687) (51,699) Balance at the end of the period $ 102,625 $ 84,606 $ 68,087 |
Workforce Reduction and Restr_2
Workforce Reduction and Restructuring (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Table Text Blocks | |
Schedule of charges made to the reduction in field-based workforce | The following table summarizes the accrued liabilities activity recorded in connection with the reduction in workforce in September 2020 and related restructuring activities during the year ended December 31, 2022 (in thousands): Amounts Amounts Accrued at Accrued at December 31, 2021 Charges Amount Paid Adjustments December 31, 2022 Employee severance, benefits and related costs $ 462 $ — $ (462) $ — $ — The following table summarizes the accrued liabilities activity recorded in connection with the reductions in workforce and related restructuring activities during the year ended December 31, 2021 (in thousands): Amounts Amounts Accrued at Accrued at December 31, 2020 Charges Amount Paid Adjustments December 31, 2021 Employee severance, benefits and related costs $ 10,902 $ 1,025 $ (10,611) $ (854) $ 462 Contract related costs 5 48 (53) — — Total $ 10,907 $ 1,073 $ (10,664) $ (854) $ 462 |
Selected Quarterly Financial _2
Selected Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Table Text Blocks | |
Selected Quarterly Financial Data (Unaudited) | First Second Third Fourth Total Quarter Quarter Quarter Quarter Year (in thousands, except per share data) 2022 Total revenues $ 97,529 $ 97,231 $ 108,637 $ 107,199 $ 410,596 Total cost and expenses 39,683 41,576 40,164 38,836 160,259 Other expense, net (1,381) (1,870) 1,434 3,902 2,085 Net income and comprehensive income 38,801 37,080 50,317 48,867 175,065 Net income per share—basic (1) 0.25 0.24 0.33 0.32 1.13 Net income per share—diluted (1) 0.21 0.21 0.28 0.27 0.96 (1) Quarterly basic and diluted net income per share do not add to full fiscal year total due to rounding. First Second Third Fourth Total Quarter Quarter Quarter Quarter Year (in thousands, except per share data) 2021 Total revenues $ 88,845 $ 104,031 $ 103,747 $ 117,130 $ 413,753 Total cost and expenses 43,447 38,933 38,576 60,538 181,494 Other expense, net (5,040) (10,726) (5,499) (10,337) (31,602) Net income and comprehensive income 39,926 391,303 55,845 41,374 528,448 Net income per share—basic 0.25 2.42 0.34 0.25 3.26 Net income per share—diluted 0.25 2.39 0.34 0.25 3.21 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Segment Information (Details) - segment | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Segment information | |||
Number of reportable segments | 1 | 1 | 1 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Cash and Cash Equivalents (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Cash and Cash Equivalents | ||
Cash Equivalent included in cash and cash equivalent | $ 650.2 | $ 595.2 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Restricted Cash (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Restricted Cash [Abstract] | |||
Restricted cash | $ 1,735 | $ 1,735 | $ 2,220 |
Restricted cash, current | 1,250 | 1,250 | |
Restricted cash, noncurrent | $ 485 | $ 485 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Accounts Receivable (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Accounts Receivable | ||
Allowance for credit losses | $ 0 | $ 0 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Concentrations of Credit Risk (Details) - AbbVie Plc | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Accounts receivable | Credit Concentration Risk | |||
Concentrations | |||
Concentration risk percentage (as a percent) | 80% | 81% | |
Revenue from Contract with Customer Benchmark | Customer Concentration Risk | |||
Concentrations | |||
Concentration risk percentage (as a percent) | 98% | 98% | 96% |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Property and Equipment (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Laboratory equipment | |
Property and Equipment | |
Estimated useful life | 5 years |
Computer and office equipment | |
Property and Equipment | |
Estimated useful life | 3 years |
Furniture and fixtures | |
Property and Equipment | |
Estimated useful life | 7 years |
Software | |
Property and Equipment | |
Estimated useful life | 3 years |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Derivative Assets and Liabilities (Details) - Convertible Senior Notes | Sep. 16, 2019 | Aug. 12, 2019 | Jun. 30, 2015 |
2.25% Convertible Senior Notes due 2022 | |||
Notes Payable | |||
Stated interest rate (as a percent) | 2.25% | 2.25% | |
0.75% Convertible Senior Notes due 2024 | |||
Notes Payable | |||
Stated interest rate (as a percent) | 0.75% | ||
1.50% Convertible Senior Notes due 2026 | |||
Notes Payable | |||
Stated interest rate (as a percent) | 1.50% |
Summary of Significant Accou_11
Summary of Significant Accounting Policies - Revenue Recognition (Details) | 12 Months Ended |
Dec. 31, 2022 | |
U.S. | AbbVie Plc | |
Collaboration agreements | |
Percentage of the pre-tax net profit or loss (as a percent) | 50% |
Summary of Significant Accou_12
Summary of Significant Accounting Policies - Patent Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Patent Costs | |||
Selling, general and administrative | $ 115,994 | $ 111,133 | $ 140,003 |
Patents | |||
Patent Costs | |||
Selling, general and administrative | $ 1,300 | $ 1,700 | $ 2,300 |
Summary of Significant Accou_13
Summary of Significant Accounting Policies - New Accounting Pronouncements (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Standards Update 2020-06 | |
New Accounting Pronouncements | |
Change in Accounting Principle, Accounting Standards Update, Adopted | true |
Change in Accounting Principle, Accounting Standards Update, Adoption Date | Jan. 01, 2022 |
Change in Accounting Principle, Accounting Standards Update, Transition Option Elected | us-gaap:AccountingStandardsUpdate202006CumulativeEffectPeriodOfAdoptionMember |
Accounting Standards Update 2021-04 | |
New Accounting Pronouncements | |
Change in Accounting Principle, Accounting Standards Update, Adopted | true |
Change in Accounting Principle, Accounting Standards Update, Adoption Date | Jan. 01, 2022 |
Summary of Significant Accou_14
Summary of Significant Accounting Policies - Cumulative-effect Adjustment - Tabular Disclosure (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
New Accounting Pronouncements | ||
Deferred tax assets | $ 283,661 | $ 333,294 |
Current portion of convertible senior notes | 116,858 | |
Long-term portion of convertible senior notes | 396,251 | 337,333 |
Additional paid-in capital | 1,348,600 | 1,543,357 |
Retained earnings | $ (696,376) | (937,608) |
Cumulative Effect, Period of Adoption, Adjusted Balance | ||
New Accounting Pronouncements | ||
Deferred tax assets | 350,149 | |
Current portion of convertible senior notes | 120,439 | |
Long-term portion of convertible senior notes | 394,657 | |
Additional paid-in capital | 1,433,140 | |
Retained earnings | (871,441) | |
Accounting Standards Update 2020-06 | Cumulative Effect, Period of Adoption, Adjustment | ||
New Accounting Pronouncements | ||
Deferred tax assets | 16,855 | |
Current portion of convertible senior notes | 3,581 | |
Long-term portion of convertible senior notes | 57,324 | |
Additional paid-in capital | (110,217) | |
Retained earnings | $ 66,167 |
Summary of Significant Accou_15
Summary of Significant Accounting Policies - Cumulative-effect Adjustment - Additional Information (Details) $ in Millions | Dec. 31, 2022 USD ($) |
Accounting Standards Update 2020-06 | |
New Accounting Pronouncements | |
Interest expense, non-cash, expected increase (decrease) in current fiscal year | $ 22.1 |
Net Income Per Share - Computat
Net Income Per Share - Computation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Numerator: | |||||||||||
Net income | $ 48,867 | $ 50,317 | $ 37,080 | $ 38,801 | $ 41,374 | $ 55,845 | $ 391,303 | $ 39,926 | $ 175,065 | $ 528,448 | $ 106,176 |
Net income (loss) available to common stockholders, basic | 175,065 | 528,448 | 106,176 | ||||||||
Net income (loss) available to common stockholders, diluted | $ 179,514 | $ 528,448 | $ 106,176 | ||||||||
Denominator: | |||||||||||
Weighted average number of common shares outstanding used in computing net income per share - basic (in shares) | 154,366 | 162,245 | 159,427 | ||||||||
Effect of dilutive securities: | |||||||||||
Weighted average number of common shares outstanding used in computing net income per share - diluted (in shares) | 186,312 | 164,418 | 160,655 | ||||||||
Net income per share - basic (in dollars per share) | $ 0.32 | $ 0.33 | $ 0.24 | $ 0.25 | $ 0.25 | $ 0.34 | $ 2.42 | $ 0.25 | $ 1.13 | $ 3.26 | $ 0.67 |
Net income per share - diluted (in dollars per share) | $ 0.27 | $ 0.28 | $ 0.21 | $ 0.21 | $ 0.25 | $ 0.34 | $ 2.39 | $ 0.25 | $ 0.96 | $ 3.21 | $ 0.66 |
Employee stock options | |||||||||||
Effect of dilutive securities: | |||||||||||
Effect of dilutive securities, share-based compensation | 306 | 488 | 367 | ||||||||
Time-based Restricted Stock Units | |||||||||||
Effect of dilutive securities: | |||||||||||
Effect of dilutive securities, share-based compensation | 1,375 | 1,422 | 766 | ||||||||
Performance-based Restricted Stock Units | |||||||||||
Effect of dilutive securities: | |||||||||||
Effect of dilutive securities, share-based compensation | 282 | 146 | 1 | ||||||||
Restricted Stock | |||||||||||
Effect of dilutive securities: | |||||||||||
Effect of dilutive securities, share-based compensation | 115 | 117 | 94 | ||||||||
0.75% Convertible Senior Notes due 2024 | |||||||||||
Numerator: | |||||||||||
Add back interest expense, net of tax benefit, on assumed conversion of convertible notes | $ 1,781 | ||||||||||
Effect of dilutive securities: | |||||||||||
Effect of dilutive securities, convertible notes | 14,934 | ||||||||||
1.50% Convertible Senior Notes due 2026 | |||||||||||
Numerator: | |||||||||||
Add back interest expense, net of tax benefit, on assumed conversion of convertible notes | $ 2,668 | ||||||||||
Effect of dilutive securities: | |||||||||||
Effect of dilutive securities, convertible notes | 14,934 |
Net Income Per Share - Potentia
Net Income Per Share - Potentially Dilutive Securities (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Potentially dilutive securities | |||
Total potentially dilutive securities excluded from the computation of diluted weighted average shares outstanding (in shares) | 15,662 | 54,428 | 58,554 |
Employee stock options | |||
Potentially dilutive securities | |||
Total potentially dilutive securities excluded from the computation of diluted weighted average shares outstanding (in shares) | 6,152 | 7,701 | 11,746 |
Restricted Stock | |||
Potentially dilutive securities | |||
Total potentially dilutive securities excluded from the computation of diluted weighted average shares outstanding (in shares) | 2 | ||
Time-based Restricted Stock Units | |||
Potentially dilutive securities | |||
Total potentially dilutive securities excluded from the computation of diluted weighted average shares outstanding (in shares) | 10 | 102 | 209 |
Performance-based Restricted Stock Units | |||
Potentially dilutive securities | |||
Total potentially dilutive securities excluded from the computation of diluted weighted average shares outstanding (in shares) | 1,182 | 121 | 93 |
Note Hedge Warrants | |||
Potentially dilutive securities | |||
Total potentially dilutive securities excluded from the computation of diluted weighted average shares outstanding (in shares) | 8,318 | 8,318 | 8,318 |
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 | 8,318 | |
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 | 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 | 14,934 |
Collaboration, License, and O_3
Collaboration, License, and Other Agreements - Summary (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenues: | |||||||||||
Revenue | $ 107,199 | $ 108,637 | $ 97,231 | $ 97,529 | $ 117,130 | $ 103,747 | $ 104,031 | $ 88,845 | $ 410,596 | $ 413,753 | $ 389,523 |
Collaborative arrangements revenue | |||||||||||
Revenues: | |||||||||||
Revenue | 410,596 | 412,784 | 381,545 | ||||||||
Collaborative arrangement, other agreements | |||||||||||
Revenues: | |||||||||||
Revenue | 1,824 | 1,755 | 1,335 | ||||||||
Sale of active pharmaceutical ingredient | |||||||||||
Revenues: | |||||||||||
Revenue | 969 | 7,978 | |||||||||
AbbVie Plc | Sale of active pharmaceutical ingredient | |||||||||||
Revenues: | |||||||||||
Revenue | 223 | 421 | |||||||||
AbbVie Plc | North America | Collaborative arrangements revenue | |||||||||||
Revenues: | |||||||||||
Revenue | 401,498 | 403,085 | 370,902 | ||||||||
AbbVie Plc | North America | Collaborative arrangement, collaboration and license agreements | |||||||||||
Revenues: | |||||||||||
Revenue | 401,498 | 403,085 | 370,902 | ||||||||
AbbVie Plc | Europe and Other | Collaborative arrangement, collaboration and license agreements | |||||||||||
Revenues: | |||||||||||
Revenue | 2,444 | 2,558 | 2,196 | ||||||||
AstraZeneca | Collaborative arrangement, collaboration and license agreements | |||||||||||
Revenues: | |||||||||||
Revenue | 635 | 743 | 682 | ||||||||
AstraZeneca | Sale of active pharmaceutical ingredient | |||||||||||
Revenues: | |||||||||||
Revenue | 597 | 5,540 | |||||||||
Astellas Pharma Inc. | Collaborative arrangement, collaboration and license agreements | |||||||||||
Revenues: | |||||||||||
Revenue | 2,001 | 2,232 | 2,128 | ||||||||
Astellas Pharma Inc. | Sale of active pharmaceutical ingredient | |||||||||||
Revenues: | |||||||||||
Revenue | 149 | 2,017 | |||||||||
Alnylam | Collaborative arrangement, co-promotion agreements | |||||||||||
Revenues: | |||||||||||
Revenue | $ 2,194 | $ 2,411 | $ 4,302 |
Collaboration, License, and O_4
Collaboration, License, and Other Agreements - Accounts Receivable (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Accounts receivable, net | ||
Accounts receivable, net | $ 130 | $ 138 |
Accounts receivable, net of accounts payable | 104.4 | 112.2 |
AbbVie Plc | ||
Accounts receivable, net | ||
Accounts payable | $ 4 | $ 5 |
Collaboration, License, and O_5
Collaboration, License, and Other Agreements - North America - General Information (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 USD ($) item | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Collaboration, License, Promotion and Other Commercial Agreements | |||
Research and development expense | $ 44,265 | $ 70,405 | $ 88,062 |
AbbVie Plc | |||
Collaboration, License, Promotion and Other Commercial Agreements | |||
Remaining commercial-period performance obligations | item | 3 | ||
Cost sharing amount, reduction to research and development | $ 8,900 | 11,500 | 5,600 |
Collaborative arrangement, percentage of obligation of development costs incurred | 50% | ||
Percentage of net profit from commercialization (as a percent) | 50% | ||
Percentage of net loss from commercialization (as a percent) | 50% | ||
North America | |||
Collaboration, License, Promotion and Other Commercial Agreements | |||
Research and development expense | $ 8,000 | $ 8,200 | $ 20,100 |
Collaboration, License, and O_6
Collaboration, License, and Other Agreements - North America - Collaborative Arrangements Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenues: | |||||||||||
Revenue | $ 107,199 | $ 108,637 | $ 97,231 | $ 97,529 | $ 117,130 | $ 103,747 | $ 104,031 | $ 88,845 | $ 410,596 | $ 413,753 | $ 389,523 |
Collaborative arrangements revenue | |||||||||||
Revenues: | |||||||||||
Revenue | 410,596 | 412,784 | 381,545 | ||||||||
AbbVie Plc | North America | Collaborative arrangements revenue | |||||||||||
Revenues: | |||||||||||
Revenue | 401,498 | 403,085 | 370,902 | ||||||||
AbbVie Plc | North America | Collaborative arrangement, collaboration and license agreements | |||||||||||
Revenues: | |||||||||||
Revenue | 401,498 | 403,085 | 370,902 | ||||||||
AbbVie Plc | North America | Collaborative arrangements, LINZESS | |||||||||||
Revenues: | |||||||||||
Revenue | 398,767 | 400,371 | 368,603 | ||||||||
AbbVie Plc | North America | Royalty | |||||||||||
Revenues: | |||||||||||
Revenue | $ 2,731 | $ 2,714 | $ 2,299 |
Collaboration, License, and O_7
Collaboration, License, and Other Agreements - North America - Commercial Efforts (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Collaboration, License, Promotion and Other Commercial Agreements | |||||||||||
Revenue | $ 107,199 | $ 108,637 | $ 97,231 | $ 97,529 | $ 117,130 | $ 103,747 | $ 104,031 | $ 88,845 | $ 410,596 | $ 413,753 | $ 389,523 |
Selling, general and administrative | 115,994 | 111,133 | 140,003 | ||||||||
Collaborative arrangements revenue | |||||||||||
Collaboration, License, Promotion and Other Commercial Agreements | |||||||||||
Revenue | 410,596 | 412,784 | 381,545 | ||||||||
Collaborative arrangements, LINZESS | AbbVie Plc | U.S. | |||||||||||
Collaboration, License, Promotion and Other Commercial Agreements | |||||||||||
Selling, general and administrative | $ 34,300 | $ 30,300 | $ 39,900 |
Collaboration, License, and O_8
Collaboration, License, and Other Agreements - North America - Royalty Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenues: | |||||||||||
Revenue | $ 107,199 | $ 108,637 | $ 97,231 | $ 97,529 | $ 117,130 | $ 103,747 | $ 104,031 | $ 88,845 | $ 410,596 | $ 413,753 | $ 389,523 |
Collaborative arrangements revenue | |||||||||||
Revenues: | |||||||||||
Revenue | 410,596 | 412,784 | 381,545 | ||||||||
Collaborative arrangements revenue | North America | AbbVie Plc | |||||||||||
Revenues: | |||||||||||
Revenue | 401,498 | 403,085 | 370,902 | ||||||||
Collaborative arrangement, collaboration and license agreements | North America | AbbVie Plc | |||||||||||
Revenues: | |||||||||||
Revenue | 401,498 | 403,085 | 370,902 | ||||||||
Royalty | North America | AbbVie Plc | |||||||||||
Revenues: | |||||||||||
Revenue | 2,731 | 2,714 | 2,299 | ||||||||
Royalty | Canada and Mexico | AbbVie Plc | |||||||||||
Revenues: | |||||||||||
Revenue | $ 2,700 | $ 2,700 | $ 2,300 |
Collaboration, License, and O_9
Collaboration, License, and Other Agreements - European and Other Territories (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Oct. 31, 2015 | |
Collaboration, License, Promotion and Other Commercial Agreements | ||||||||||||
Revenue | $ 107,199 | $ 108,637 | $ 97,231 | $ 97,529 | $ 117,130 | $ 103,747 | $ 104,031 | $ 88,845 | $ 410,596 | $ 413,753 | $ 389,523 | |
Collaborative arrangements revenue | ||||||||||||
Collaboration, License, Promotion and Other Commercial Agreements | ||||||||||||
Revenue | 410,596 | 412,784 | 381,545 | |||||||||
Collaborative arrangement, collaboration and license agreements | AbbVie Plc | Europe and Other | ||||||||||||
Collaboration, License, Promotion and Other Commercial Agreements | ||||||||||||
Revenue | 2,444 | 2,558 | 2,196 | |||||||||
License | AbbVie Plc | ||||||||||||
Collaboration, License, Promotion and Other Commercial Agreements | ||||||||||||
Remaining milestone payment due upon the amendment to the license agreement | $ 42,500 | |||||||||||
Royalty | AbbVie Plc | Europe and Other | ||||||||||||
Collaboration, License, Promotion and Other Commercial Agreements | ||||||||||||
Revenue | $ 2,400 | $ 2,600 | $ 2,200 |
Collaboration, License, and _10
Collaboration, License, and Other Agreements - Japan (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Collaboration, License, Promotion and Other Commercial Agreements | |||||||||||
Revenue | $ 107,199 | $ 108,637 | $ 97,231 | $ 97,529 | $ 117,130 | $ 103,747 | $ 104,031 | $ 88,845 | $ 410,596 | $ 413,753 | $ 389,523 |
Collaborative arrangements revenue | |||||||||||
Collaboration, License, Promotion and Other Commercial Agreements | |||||||||||
Revenue | 410,596 | 412,784 | 381,545 | ||||||||
Collaborative arrangement, collaboration and license agreements | Astellas Pharma Inc. | |||||||||||
Collaboration, License, Promotion and Other Commercial Agreements | |||||||||||
Revenue | 2,001 | 2,232 | 2,128 | ||||||||
Collaborative arrangement, collaboration and license agreements, upfront fee | Astellas Pharma Inc., 2009 License Agreement, Amended 2019 | |||||||||||
Collaboration, License, Promotion and Other Commercial Agreements | |||||||||||
Revenue | 2,100 | ||||||||||
Royalty | Astellas Pharma Inc., 2009 License Agreement, Amended 2019 | |||||||||||
Collaboration, License, Promotion and Other Commercial Agreements | |||||||||||
Revenue | $ 2,000 | 2,200 | |||||||||
Sale of active pharmaceutical ingredient | |||||||||||
Collaboration, License, Promotion and Other Commercial Agreements | |||||||||||
Revenue | 969 | 7,978 | |||||||||
Sale of active pharmaceutical ingredient | Astellas Pharma Inc. | |||||||||||
Collaboration, License, Promotion and Other Commercial Agreements | |||||||||||
Revenue | 149 | 2,017 | |||||||||
Sale of active pharmaceutical ingredient | Astellas Pharma Inc., 2009 License Agreement, Amended 2019 | |||||||||||
Collaboration, License, Promotion and Other Commercial Agreements | |||||||||||
Revenue | $ 200 | $ 2,000 |
Collaboration, License, and _11
Collaboration, License, and Other Agreements - China, Hong Kong and Macau (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2022 USD ($) | Sep. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Sep. 30, 2021 USD ($) | Jun. 30, 2021 USD ($) | Mar. 31, 2021 USD ($) | Dec. 31, 2022 USD ($) installment | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Collaboration, License, Promotion and Other Commercial Agreements | |||||||||||
Milestone payment to be received by company upon milestone achievement | $ 90,000 | ||||||||||
Revenue | $ 107,199 | $ 108,637 | $ 97,231 | $ 97,529 | $ 117,130 | $ 103,747 | $ 104,031 | $ 88,845 | 410,596 | $ 413,753 | $ 389,523 |
Collaborative arrangements revenue | |||||||||||
Collaboration, License, Promotion and Other Commercial Agreements | |||||||||||
Revenue | 410,596 | 412,784 | 381,545 | ||||||||
Sale of active pharmaceutical ingredient | |||||||||||
Collaboration, License, Promotion and Other Commercial Agreements | |||||||||||
Revenue | 969 | 7,978 | |||||||||
AstraZeneca | |||||||||||
Collaboration, License, Promotion and Other Commercial Agreements | |||||||||||
Collaborative arrangement, significant financing component, transaction price | 2,600 | 2,600 | |||||||||
Amount of non-contingent arrangement consideration | $ 35,000 | ||||||||||
Non-contingent consideration installments | installment | 3 | ||||||||||
Collaborative arrangement, non-contingent installment payments receivable | 25,000 | $ 25,000 | |||||||||
Collaborative arrangement, non-contingent receivable, current | 10,000 | 10,000 | |||||||||
Collaborative arrangement, non-contingent receivable, non-current | $ 14,600 | $ 24,000 | 14,600 | 24,000 | |||||||
AstraZeneca | Collaborative arrangement, collaboration and license agreements | |||||||||||
Collaboration, License, Promotion and Other Commercial Agreements | |||||||||||
Revenue | 635 | 743 | 682 | ||||||||
AstraZeneca | Collaborative arrangement, transition services agreement | |||||||||||
Collaboration, License, Promotion and Other Commercial Agreements | |||||||||||
Revenue | 200 | 600 | |||||||||
AstraZeneca | Royalty | |||||||||||
Collaboration, License, Promotion and Other Commercial Agreements | |||||||||||
Revenue | $ 600 | 500 | 100 | ||||||||
AstraZeneca | Sale of active pharmaceutical ingredient | |||||||||||
Collaboration, License, Promotion and Other Commercial Agreements | |||||||||||
Revenue | $ 597 | $ 5,540 |
Collaboration, License, and _12
Collaboration, License, and Other Agreements - Other Collaboration and License Agreements (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Collaboration, License, Promotion and Other Commercial Agreements | |||||||||||
Revenue | $ 107,199 | $ 108,637 | $ 97,231 | $ 97,529 | $ 117,130 | $ 103,747 | $ 104,031 | $ 88,845 | $ 410,596 | $ 413,753 | $ 389,523 |
Research and development expense | 44,265 | 70,405 | 88,062 | ||||||||
Accrued research and development costs | 5,258 | 15,896 | 5,258 | 15,896 | |||||||
Collaborative arrangements revenue | |||||||||||
Collaboration, License, Promotion and Other Commercial Agreements | |||||||||||
Revenue | 410,596 | 412,784 | 381,545 | ||||||||
Alnylam | Collaborative arrangement, co-promotion agreements | |||||||||||
Collaboration, License, Promotion and Other Commercial Agreements | |||||||||||
Revenue | 2,194 | 2,411 | 4,302 | ||||||||
Alnylam | Service fees | |||||||||||
Collaboration, License, Promotion and Other Commercial Agreements | |||||||||||
Revenue | 3,500 | ||||||||||
Alnylam | Royalty | |||||||||||
Collaboration, License, Promotion and Other Commercial Agreements | |||||||||||
Revenue | 2,200 | 2,400 | $ 800 | ||||||||
COUR Pharmaceuticals Development Company, Inc. | |||||||||||
Collaboration, License, Promotion and Other Commercial Agreements | |||||||||||
Collaborative arrangement, upfront payment | 6,000 | ||||||||||
Collaborative arrangement, contingent payment, payable | 13,500 | 13,500 | |||||||||
Collaborative arrangement, option to acquire license, exercise price, payable | 35,000 | 35,000 | |||||||||
Collaborative arrangement, milestones. potential commercial milestone payments, term of agreement, payable | 440,000 | 440,000 | |||||||||
Research and development expense | 19,500 | ||||||||||
Accrued research and development costs | $ 3,800 | $ 13,500 | $ 3,800 | $ 13,500 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - General Information (Details) | Dec. 31, 2022 |
Fair Value of Financial Instruments | |
Threshold percentage of collateralized value (as a percent) | 102% |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Measured on Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Assets: | ||
Derivative Asset, Statement of Financial Position | Convertible note hedges | |
Liabilities: | ||
Derivative Liability, Statement of Financial Position | Note hedge warrants | Note hedge warrants |
Recurring basis | ||
Assets: | ||
Convertible note hedges | $ 1,115 | |
Total assets measured at fair value | $ 651,932 | 598,083 |
Liabilities: | ||
Note hedge warrants | 19 | 1,316 |
Total liabilities measured at fair value | 19 | 1,316 |
Recurring basis | Money market funds | ||
Assets: | ||
Cash and cash equivalents | 250,313 | 595,233 |
Restricted cash | 1,735 | 1,735 |
Recurring basis | Repurchase agreements | ||
Assets: | ||
Cash and cash equivalents | 261,075 | |
Recurring basis | Commercial paper | ||
Assets: | ||
Cash and cash equivalents | 138,809 | |
Recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Assets: | ||
Total assets measured at fair value | 252,048 | 596,968 |
Recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | Money market funds | ||
Assets: | ||
Cash and cash equivalents | 250,313 | 595,233 |
Restricted cash | 1,735 | 1,735 |
Recurring basis | Significant Other Observable Inputs (Level 2) | ||
Assets: | ||
Total assets measured at fair value | 399,884 | |
Recurring basis | Significant Other Observable Inputs (Level 2) | Repurchase agreements | ||
Assets: | ||
Cash and cash equivalents | 261,075 | |
Recurring basis | Significant Other Observable Inputs (Level 2) | Commercial paper | ||
Assets: | ||
Cash and cash equivalents | 138,809 | |
Recurring basis | Significant Unobservable Inputs (Level 3) | ||
Assets: | ||
Convertible note hedges | 1,115 | |
Total assets measured at fair value | 1,115 | |
Liabilities: | ||
Note hedge warrants | 19 | 1,316 |
Total liabilities measured at fair value | $ 19 | $ 1,316 |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments - Assumptions - Convertible Note Hedges (Details) | Dec. 31, 2021 item Y |
Fair Value of Financial Instruments | |
Derivative asset, valuation technique | us-gaap:ValuationTechniqueOptionPricingModelMember |
Measurement Input, Risk Free Interest Rate | |
Fair Value of Financial Instruments | |
Derivative asset, measurement input | 0.002 |
Measurement Input, Expected Term | |
Fair Value of Financial Instruments | |
Derivative asset, measurement input | Y | 0.5 |
Measurement Input, Share Price | |
Fair Value of Financial Instruments | |
Derivative asset, measurement input | 11.66 |
Measurement Input, Exercise Price | |
Fair Value of Financial Instruments | |
Derivative asset, measurement input | 14.51 |
Measurement Input, Price Volatility | |
Fair Value of Financial Instruments | |
Derivative asset, measurement input | 0.270 |
Measurement Input, Expected Dividend Rate | |
Fair Value of Financial Instruments | |
Derivative asset, measurement input | 0 |
Fair Value of Financial Instr_6
Fair Value of Financial Instruments - Assumptions - Note Hedge Warrants (Details) | Dec. 31, 2022 item Y | Dec. 31, 2021 Y item |
Fair Value of Financial Instruments | ||
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 | 0.045 | 0.004 |
Measurement Input, Expected Term | ||
Fair Value of Financial Instruments | ||
Derivative liability, measurement input | Y | 0.3 | 1 |
Measurement Input, Share Price | ||
Fair Value of Financial Instruments | ||
Derivative liability, measurement input | 12.39 | 11.66 |
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 | 0.271 | 0.322 |
Measurement Input, Expected Dividend Rate | ||
Fair Value of Financial Instruments | ||
Derivative liability, measurement input | 0 | 0 |
Fair Value of Financial Instr_7
Fair Value of Financial Instruments - Change in Level 3 - Convertible Note Hedges (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Change in Level 3 Assets | ||
Balance at beginning of period | $ 1,115 | $ 13,065 |
Change in fair value, recorded as a component of gain (loss) on derivatives | (1,115) | (11,950) |
Balance at end of period | $ 0 | $ 1,115 |
Fair Value, Asset, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income | Gain (loss) on derivatives | Gain (loss) on derivatives |
Fair Value of Financial Instr_8
Fair Value of Financial Instruments - Change in Level 3 - Note Hedge Warrants (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Change in Level 3 Liabilities | ||
Balance at beginning of period | $ (1,316) | $ (12,088) |
Change in fair value, recorded as a component of (loss) gain on derivatives | 1,297 | 10,772 |
Balance at end of period | $ (19) | $ (1,316) |
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income | Gain (loss) on derivatives | Gain (loss) on derivatives |
Fair Value of Financial Instr_9
Fair Value of Financial Instruments - Notes Payable (Details) - Convertible Senior Notes - USD ($) $ in Thousands | Dec. 31, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | Aug. 31, 2019 | Jun. 30, 2015 |
2.25% Convertible Senior Notes due 2022 | |||||
Fair value disclosures | |||||
Aggregate principal amount of notes issued | $ 120,699 | $ 335,700 | |||
Debt redeemed/repurchased | $ 120,700 | $ 215,000 | |||
2.25% Convertible Senior Notes due 2022 | Significant Other Observable Inputs (Level 2) | |||||
Fair value disclosures | |||||
Estimated fair value | 125,200 | ||||
0.75% Convertible Senior Notes due 2024 | |||||
Fair value disclosures | |||||
Aggregate principal amount of notes issued | $ 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 | 215,900 | 221,900 | |||
1.50% Convertible Senior Notes due 2026 | |||||
Fair value disclosures | |||||
Aggregate principal amount of notes issued | 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 | $ 219,000 | $ 227,200 |
Fair Value of Financial Inst_10
Fair Value of Financial Instruments - 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 | 1 Months Ended |
Aug. 31, 2019 $ / shares $ / item shares | |
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 |
Leases - Restricted Cash (Detai
Leases - Restricted Cash (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Restricted Cash | |||
Restricted cash | $ 1,735 | $ 1,735 | $ 2,220 |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Lease Cost | |||
Operating lease cost | $ 2,509 | $ 2,520 | $ 2,530 |
Short-term lease cost | 1,070 | 960 | 1,420 |
Total lease cost | $ 3,579 | $ 3,480 | $ 3,950 |
Leases - Supplemental Informati
Leases - Supplemental Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Operating Leases | |||
Cash paid for amounts included in the measurement of lease liabilities | $ 3,114 | $ 3,128 | $ 1,146 |
Weighted-average remaining lease term of operating leases | 7 years 3 months 18 days | 8 years 3 months 18 days | 9 years 3 months 18 days |
Weighted-average discount rate of operating leases (as a percent) | 5.80% | 5.80% | 5.80% |
Leases - Summer Street Lease (D
Leases - Summer Street Lease (Details) ft² in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Jun. 30, 2019 ft² | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Operating Leases | ||||
Weighted-average discount rate of operating leases (as a percent) | 5.80% | 5.80% | 5.80% | |
Operating lease right-of-use assets | $ 14,023 | $ 15,350 | ||
Operating lease liability | 19,664 | |||
Operating lease cost | 2,509 | 2,520 | $ 2,530 | |
Summer Street Lease | ||||
Operating Leases | ||||
Rentable area leased (in square feet) | ft² | 39 | |||
Annual rent escalation (as a percent) | 2% | |||
Option to extend the term of the lease | true | |||
Operating lease, renewal term | 5 years | |||
Weighted-average discount rate of operating leases (as a percent) | 5.80% | |||
Operating lease right-of-use assets | 14,000 | 15,300 | ||
Operating lease liability | 19,700 | 21,500 | ||
Operating lease cost | $ 2,500 | $ 2,500 | $ 2,500 |
Leases - Future Minimum Lease P
Leases - Future Minimum Lease Payments (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Future Minimum Lease Payments | |
2023 | $ 3,066 |
2024 | 3,126 |
2025 | 3,189 |
2026 | 3,252 |
2027 | 3,317 |
2028 and thereafter | 8,285 |
Total future minimum lease payments | $ 24,235 |
Leases - Operating Lease Obliga
Leases - Operating Lease Obligations (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Operating lease obligations | ||
Total future minimum lease payments | $ 24,235 | |
Less: present value adjustment | (4,571) | |
Operating lease liabilities | 19,664 | |
Less: current portion of operating lease liabilities | (3,065) | $ (3,127) |
Operating lease liabilities, net of current portion | $ 16,599 | $ 18,484 |
Property and Equipment - Tabula
Property and Equipment - Tabular Disclosure (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Property and Equipment | ||
Property and equipment, gross | $ 17,052 | $ 17,203 |
Less accumulated depreciation and amortization | (10,764) | (9,628) |
Property and equipment, net | 6,288 | 7,575 |
Software | ||
Property and Equipment | ||
Property and equipment, gross | 5,414 | 5,667 |
Leasehold improvements | ||
Property and Equipment | ||
Property and equipment, gross | 7,407 | 7,407 |
Laboratory equipment | ||
Property and Equipment | ||
Property and equipment, gross | 1,327 | 1,327 |
Furniture and fixtures | ||
Property and Equipment | ||
Property and equipment, gross | 1,542 | 1,517 |
Computer and office equipment | ||
Property and Equipment | ||
Property and equipment, gross | $ 1,362 | $ 1,285 |
Property and Equipment - Deprec
Property and Equipment - Depreciation Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Property and Equipment | |||
Depreciation and amortization | $ 1.4 | $ 1.5 | $ 2.3 |
Property and Equipment - Restru
Property and Equipment - Restructuring (Details) - Reduction in Workforce, Discontinued Development of IW-3718, September 29, 2020 $ in Millions | 12 Months Ended |
Dec. 31, 2020 USD ($) | |
Impairment of Long-Lived Assets | |
Impairment of long-lived assets | $ 1.2 |
Impairment, Long-Lived Asset, Held-for-Use, Statement of Income or Comprehensive Income | Restructuring expenses |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities - Tabular Disclosure (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Accrued Expenses | ||
Accrued compensation and benefits | $ 12,268 | $ 16,653 |
Restructuring liabilities | 462 | |
Stock repurchase | 3,009 | |
Other | 4,432 | 3,442 |
Total accrued expenses and other current liabilities | $ 16,700 | $ 23,566 |
Accrued Expenses and Other Cu_4
Accrued Expenses and Other Current Liabilities - Additional Information (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Accrued Expenses | ||
Other accrued expenses | $ 4,432 | $ 3,442 |
Other accrued liabilities, uninvoiced vendor liabilities | $ 3,600 | $ 2,700 |
Notes Payable - General Informa
Notes Payable - General Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | |||||
Aug. 31, 2019 | Jun. 30, 2015 | Jun. 30, 2022 | Dec. 31, 2021 | Sep. 16, 2019 | Apr. 15, 2019 | |
Notes Payable | ||||||
Proceeds from partial termination of convertible note hedges and note hedge warrants | $ 3,200 | |||||
Convertible Note Hedge | ||||||
Notes Payable | ||||||
Conversion price (in dollars per share) | $ 14.51 | |||||
2.25% Convertible Senior Notes due 2022 | Convertible Senior Notes | ||||||
Notes Payable | ||||||
Aggregate principal amount of notes issued | $ 335,700 | $ 120,699 | ||||
Net proceed received | 324,000 | |||||
Fees and expenses | 11,700 | |||||
Payments for convertible note hedges | $ 21,100 | |||||
Stated interest rate (as a percent) | 2.25% | 2.25% | ||||
Debt redeemed/repurchased | 215,000 | $ 120,700 | ||||
Debt redemption/repurchase price | 227,300 | |||||
Loss on extinguishment of debt | 23,400 | |||||
Initial debt issuance costs | $ 2,800 |
Notes Payable - Convertible Sen
Notes Payable - Convertible Senior Notes - Balances (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Aug. 31, 2019 | Jun. 30, 2015 |
Liability component: | ||||
Less: unamortized debt issuance costs | $ (3,749) | |||
Net carrying amount | 396,251 | |||
Convertible Senior Notes | ||||
Liability component: | ||||
Less: unamortized debt discount | $ (61,641) | |||
Less: unamortized debt issuance costs | (3,749) | (4,867) | ||
Net carrying amount | 396,251 | 454,191 | ||
Total equity component | 112,309 | |||
2.25% Convertible Senior Notes due 2022 | Convertible Senior Notes | ||||
Liability component: | ||||
Aggregate principal amount of notes issued | 120,699 | $ 335,700 | ||
Less: unamortized debt discount | (3,500) | |||
Total equity component | 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 | |
Less: unamortized debt discount | (22,300) | |||
Total equity component | 41,152 | |||
1.50% Convertible Senior Notes due 2026 | Convertible Senior Notes | ||||
Liability component: | ||||
Aggregate principal amount of notes issued | $ 200,000 | 200,000 | $ 200,000 | |
Less: unamortized debt discount | (35,800) | |||
Total equity component | $ 51,350 |
Notes Payable - Convertible S_2
Notes Payable - Convertible Senior Notes - Additional Information (Details) - 2.25% Convertible Senior Notes due 2022 - Convertible Senior Notes - USD ($) $ in Millions | 1 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2022 | |
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 | 2.70% |
Notes Payable - Convertible S_3
Notes Payable - Convertible Senior Notes - Interest Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Interest Expense | |||
Contractual interest expense | $ 5,745 | $ 7,216 | $ 7,216 |
Amortization of debt issuance costs | 1,853 | 1,678 | 1,462 |
Amortization of debt discount | 22,256 | 20,800 | |
Total interest expense | $ 7,598 | $ 31,150 | $ 29,478 |
Notes Payable - Convertible S_4
Notes Payable - Convertible Senior Notes - Future Minimum Payments (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Future minimum payments of Convertible senior notes | |
2023 | $ 4,500 |
2024 | 203,750 |
2025 | 3,000 |
2026 | 201,500 |
Total future minimum payments under the convertible senior notes | 412,750 |
Less: amounts representing interest | (12,750) |
Less: unamortized debt issuance costs | (3,749) |
Net carrying amount | $ 396,251 |
Notes Payable - Convertible S_5
Notes Payable - Convertible Senior Notes Due 2024 and Convertible Senior Notes Due 2026 (Details) | 1 Months Ended | |||||||
Aug. 12, 2019 | Aug. 07, 2019 USD ($) $ / shares | Apr. 15, 2019 shares | Aug. 31, 2019 USD ($) D | Jun. 30, 2015 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Sep. 16, 2019 | |
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 | ||||||
Net proceed received | 324,000,000 | |||||||
Fees and expenses | 11,700,000 | |||||||
Payments for convertible note hedges | $ 21,100,000 | |||||||
Stated interest rate (as a percent) | 2.25% | 2.25% | ||||||
Debt instrument term | 7 years | |||||||
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 | |||||||
Payments for convertible note hedges | 25,200,000 | |||||||
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 | |||||||
Number of consecutive trading days before five business days during the measurement period | D | 5 | |||||||
Repurchase price | 100% | |||||||
Percentage of aggregate principal amount of notes outstanding and payable in case of event of default under the agreement | 25% | |||||||
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% | |||||||
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% | |||||||
0.75% Convertible Senior Notes due 2024 | Convertible Senior Notes | ||||||||
Notes Payable | ||||||||
Aggregate principal amount of notes issued | $ 200,000,000 | $ 200,000,000 | 200,000,000 | |||||
Stated interest rate (as a percent) | 0.75% | |||||||
Amortization period | 5 years | |||||||
Debt instrument term | 5 years | |||||||
1.50% Convertible Senior Notes due 2026 | Convertible Senior Notes | ||||||||
Notes Payable | ||||||||
Aggregate principal amount of notes issued | $ 200,000,000 | $ 200,000,000 | $ 200,000,000 | |||||
Stated interest rate (as a percent) | 1.50% | |||||||
Amortization period | 7 years | |||||||
Debt instrument term | 7 years |
Notes Payable - Convertible S_6
Notes Payable - Convertible Senior Notes Due 2022, Convertible Senior Notes Due 2024 and Convertible Senior Notes Due 2026 (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Aug. 31, 2019 | Jun. 30, 2015 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Jun. 30, 2022 | |
Notes Payable | ||||||
Non-cash interest expense | $ 7,598 | $ 31,150 | $ 29,478 | |||
Convertible Senior Notes | ||||||
Notes Payable | ||||||
Unamortized debt discount | 61,641 | |||||
2.25% Convertible Senior Notes due 2022 | Convertible Senior Notes | ||||||
Notes Payable | ||||||
Debt issuance costs incurred | $ 11,700 | |||||
Debt issuance costs allocated to equity components | 4,000 | |||||
Debt issuance costs allocated to liability components | $ 7,700 | |||||
Debt instrument term | 7 years | |||||
Effective interest rate on liability components | 2.70% | |||||
Unamortized debt discount | 3,500 | |||||
Non-cash interest expense | 7,200 | 6,600 | ||||
0.75% Convertible Senior Notes due 2024 and 1.50% Convertible Senior Notes due 2026 | Convertible Senior Notes | ||||||
Notes Payable | ||||||
Debt issuance costs incurred | $ 9,000 | |||||
Debt issuance costs allocated to equity components | 2,100 | |||||
Debt issuance costs allocated to liability components | $ 6,900 | |||||
0.75% Convertible Senior Notes due 2024 | Convertible Senior Notes | ||||||
Notes Payable | ||||||
Debt instrument term | 5 years | |||||
Effective interest rate on liability components | 1.20% | |||||
Unamortized debt discount | 22,300 | |||||
Non-cash interest expense | 8,200 | 7,800 | ||||
1.50% Convertible Senior Notes due 2026 | Convertible Senior Notes | ||||||
Notes Payable | ||||||
Debt instrument term | 7 years | |||||
Effective interest rate on liability components | 1.90% | |||||
Unamortized debt discount | 35,800 | |||||
Non-cash interest expense | $ 6,800 | $ 6,400 |
Notes Payable - Convertible Not
Notes Payable - Convertible Note Hedge and Warrant Transactions (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 12 Months Ended | |
Jun. 30, 2015 | Dec. 31, 2022 | Apr. 15, 2019 | |
Notes Payable | |||
Net derivative issuance cost | $ 21.1 | ||
Convertible Note Hedge | |||
Notes Payable | |||
Conversion price (in dollars per share) | $ 14.51 | ||
Long-term asset | 91.9 | ||
Note Hedge Warrant Derivatives | |||
Notes Payable | |||
Trading day period | 150 days | ||
Long-term liability | $ 70.8 | ||
Note Hedge Warrants | |||
Notes Payable | |||
Warrants strike price (in dollars per share) | $ 18.82 |
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, 2019 USD ($) $ / shares $ / item shares | |
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 |
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 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Indemnification Agreement | ||
Guarantees | ||
Liabilities recorded | $ 0 | $ 0 |
Stockholders' Equity - Common S
Stockholders' Equity - Common Stock (Details) | 12 Months Ended |
Dec. 31, 2022 Vote | |
Common stock | |
Number of voting rights per share | 1 |
Description of the number of voting rights per share | Class A Common Stock is entitled to one vote per share. |
Stockholders' Equity - Stock Re
Stockholders' Equity - Stock Repurchase Program (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions | 12 Months Ended | 13 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | May 31, 2021 | |
Stock Repurchase Program | ||||
Stock repurchase program, authorized amount | $ 150,000 | |||
Common stock repurchased and retired (in shares) | 10.8 | 13.1 | ||
Common stock repurchased and retired | $ 123,386 | $ 27,139 | ||
Common stock repurchased and retired, weighted-average price (in dollars per share) | $ 11.47 |
Employee Stock Benefit Plans -
Employee Stock Benefit Plans - Summary of Expense Recognized by Share-based Compensation Arrangement (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Employee Stock Benefit Plans | |||
Expense recognized for share-based compensation arrangements | $ 27,048 | $ 22,281 | $ 31,175 |
Employee stock options | |||
Employee Stock Benefit Plans | |||
Expense recognized for share-based compensation arrangements | 1,471 | 3,154 | 7,680 |
Time-based Restricted Stock Units | |||
Employee Stock Benefit Plans | |||
Expense recognized for share-based compensation arrangements | 17,643 | 14,539 | 18,624 |
Performance-based Restricted Stock Units | |||
Employee Stock Benefit Plans | |||
Expense recognized for share-based compensation arrangements | 5,008 | 1,295 | 2,190 |
Restricted Stock | |||
Employee Stock Benefit Plans | |||
Expense recognized for share-based compensation arrangements | 2,439 | 2,684 | 1,886 |
Employee Stock | |||
Employee Stock Benefit Plans | |||
Expense recognized for share-based compensation arrangements | 412 | 419 | 722 |
Stock awards | |||
Employee Stock Benefit Plans | |||
Expense recognized for share-based compensation arrangements | $ 75 | $ 190 | $ 73 |
Employee Stock Benefit Plans _2
Employee Stock Benefit Plans - Share-based Compensation Reflected in the Consolidated Statement of Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Employee Stock Benefit Plans | |||
Share-based compensation expense | $ 27,048 | $ 22,281 | $ 31,175 |
Research and Development Expense | |||
Employee Stock Benefit Plans | |||
Share-based compensation expense | 4,936 | 4,849 | 5,569 |
Selling, General and Administrative Expenses | |||
Employee Stock Benefit Plans | |||
Share-based compensation expense | $ 22,112 | 17,323 | 23,825 |
Restructuring Charges | |||
Employee Stock Benefit Plans | |||
Share-based compensation expense | $ 109 | $ 1,781 |
Employee Stock Benefit Plans _3
Employee Stock Benefit Plans - Share-based Compensation Expense - Net of Tax (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Employee Stock Benefit Plans | |||
Total share-based compensation expense included in operating expenses | $ 27,048 | $ 22,281 | $ 31,175 |
Income tax benefit | 1,644 | ||
Total share-based compensation expense included in costs and expenses, net of tax | $ 28,692 | $ 22,281 | $ 31,175 |
Employee Stock Benefit Plans _4
Employee Stock Benefit Plans - Stock Benefit Plans (Details) - shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2010 | |
2010 Plan | Employee Stock | ||
Stock Benefit Plans | ||
Purchase price as a percentage of fair market value of a share of common stock on the first or last day of an offering period (as a percent) | 85% | |
Offering period | 6 months | |
Shares reserved for issuance (in shares) | 400,000 | |
Threshold number of additional shares available for future grant (in shares) | 1,000,000 | |
Shares available for future grant (in shares) | 4,424,472 | |
2010 Plan | Employee Stock | Class A common stock | ||
Stock Benefit Plans | ||
Percentage for the threshold number of additional shares available for future grant, expressed as percentage of common stock outstanding on the last day of the immediately preceding fiscal year (as a percent) | 1% | |
2019 Equity plan | ||
Stock Benefit Plans | ||
Shares available for future grant (in shares) | 7,366,153 | |
2019 Equity plan | Class A common stock | ||
Stock Benefit Plans | ||
Shares reserved for issuance (in shares) | 10,000,000 | |
2005 Equity Plan | ||
Stock Benefit Plans | ||
Shares available for future grant (in shares) | 0 | |
2019 Equity Plan and 2010 Purchase Plan | ||
Stock Benefit Plans | ||
Shares available for future grant (in shares) | 11,790,625 |
Employee Stock Benefit Plans _5
Employee Stock Benefit Plans - Restricted Stock Awards - Activity (Details) - Restricted Stock - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Number of Shares | |||
Outstanding at the beginning of the period (in shares) | 263,260 | ||
Granted (in shares) | 172,568 | ||
Vested and released (in shares) | (246,710) | ||
Outstanding at the end of the period (in shares) | 189,118 | 263,260 | |
Weighted-Average Grant Date Fair Value | |||
Outstanding at the beginning of the period (in dollars per share) | $ 11.61 | ||
Granted (in dollars per share) | 11.22 | $ 11.67 | $ 10.16 |
Vested and released (in dollars per share) | 11.64 | ||
Outstanding at the end of the period (in dollars per share) | $ 11.22 | $ 11.61 |
Employee Stock Benefit Plans _6
Employee Stock Benefit Plans - Restricted Stock Awards - Additional Information (Details) - Restricted Stock - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Weighted-Average Grant Date Fair Value | |||
Weighted-average grant date fair value (in dollars per share) | $ 11.22 | $ 11.67 | $ 10.16 |
Employee Stock Benefit Plans | |||
Vested in period, total fair value | $ 2.8 | $ 2.5 | $ 1.9 |
Employee Stock Benefit Plans _7
Employee Stock Benefit Plans - Restricted Stock Units (Details) | 12 Months Ended |
Dec. 31, 2020 shares | |
Restricted Stock Units | |
Stock Benefit Plans | |
Right to number of shares of common stock per RSU (in shares) | 1 |
Employee Stock Benefit Plans _8
Employee Stock Benefit Plans - Time-based RSUs - Vesting (Details) - Time-based Restricted Stock Units | 12 Months Ended |
Dec. 31, 2022 | |
Minimum | |
Stock Benefit Plans | |
Vesting period | 2 years |
Maximum | |
Stock Benefit Plans | |
Vesting period | 4 years |
Employee Stock Benefit Plans _9
Employee Stock Benefit Plans - Time-based RSUs - Activity (Details) - Time-based Restricted Stock Units - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Number of Shares | |||
Outstanding at the beginning of the period (in shares) | 3,864,108 | ||
Granted (in shares) | 2,265,661 | ||
Vested and released (in shares) | (1,327,573) | ||
Forfeited (in shares) | (512,051) | ||
Outstanding at the end of the period (in shares) | 4,290,145 | 3,864,108 | |
Weighted-Average Grant Date Fair Value | |||
Outstanding at the beginning of the period (in dollars per share) | $ 10.89 | ||
Granted (in dollars per share) | 11.08 | $ 10.40 | $ 11.59 |
Vested and released (in dollars per share) | 11.15 | ||
Forfeited (in dollars per share) | 10.95 | ||
Outstanding at the end of the period (in dollars per share) | $ 10.91 | $ 10.89 |
Employee Stock Benefit Plans_10
Employee Stock Benefit Plans - Time-based RSUs - Additional Information (Details) - Time-based Restricted Stock Units - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Weighted-Average Grant Date Fair Value | |||
Weighted-average grant date fair value (in dollars per share) | $ 11.08 | $ 10.40 | $ 11.59 |
Employee Stock Benefit Plans | |||
Vested in period, total fair value | $ 14.8 | $ 17.8 | $ 11.1 |
Employee Stock Benefit Plans_11
Employee Stock Benefit Plans - Performance-based RSUs - Vesting (Details) - Performance-based Restricted Stock Units | 12 Months Ended |
Dec. 31, 2022 | |
Share-based Payment Arrangement, Tranche One | |
Stock Benefit Plans | |
Vesting period | 2 years |
Share-based Payment Arrangement, Tranche Two | |
Stock Benefit Plans | |
Vesting period | 3 years |
Employee Stock Benefit Plans_12
Employee Stock Benefit Plans - Performance-based RSUs - Assumptions (Details) - Performance-based Restricted Stock Units - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Weighted-average assumptions used to estimate fair value | |||
Fair value of common stock (in dollars per share) | $ 11.13 | $ 11.39 | $ 11.78 |
Expected volatility (as a percent) | 41.70% | 47.90% | 53.30% |
Expected term | 2 years 9 months 18 days | 2 years 7 months 6 days | 2 years 9 months 18 days |
Risk-free interest rate (as a percent) | 1.60% | 0.30% | 1% |
Expected dividend yield (as a percent) | 0% | 0% | 0% |
Employee Stock Benefit Plans_13
Employee Stock Benefit Plans - Performance-based RSUs - Activity (Details) - Performance-based Restricted Stock Units - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Number of Shares | |||
Outstanding at the beginning of the period (in shares) | 833,286 | ||
Granted (in shares) | 598,814 | ||
Vested and released (in shares) | (151,859) | ||
Forfeited (in shares) | (111,470) | ||
Outstanding at the end of the period (in shares) | 1,168,771 | 833,286 | |
Weighted-Average Grant Date Fair Value | |||
Outstanding at the beginning of the period (in dollars per share) | $ 14.06 | ||
Granted (in dollars per share) | 14.30 | $ 14.65 | $ 12.48 |
Vested and released (in dollars per share) | 11.68 | ||
Forfeited (in dollars per share) | 11.65 | ||
Outstanding at the end of the period (in dollars per share) | $ 14.72 | $ 14.06 |
Employee Stock Benefit Plans_14
Employee Stock Benefit Plans - Performance-based RSUs - Additional Information (Details) - Performance-based Restricted Stock Units - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Employee Stock Benefit Plans | |||
Granted in prior years which vested during the current year (in shares) | 70,759 | ||
Vested in period, total fair value | $ 1,700 | $ 0 | $ 0 |
Weighted-Average Grant Date Fair Value | |||
Weighted-average grant date fair value (in dollars per share) | $ 14.30 | $ 14.65 | $ 12.48 |
Employee Stock Benefit Plans_15
Employee Stock Benefit Plans - Stock Options - General Information (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Stock Benefit Plans | |
Expiration period | 10 years |
Employee stock options | |
Stock Benefit Plans | |
Vesting period | 4 years |
Employee Stock Benefit Plans_16
Employee Stock Benefit Plans - Stock Options - Assumptions (Details) - Employee stock options | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Weighted-average assumptions used to estimate fair value | |||
Expected volatility (as a percent) | 46.60% | ||
Expected term | 6 years 1 month 6 days | ||
Risk-free interest rate (as a percent) | 1.50% | ||
Expected dividend yield (as a percent) | 0% | 0% | 0% |
Employee Stock Benefit Plans_17
Employee Stock Benefit Plans - Stock Options - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2021 $ / shares | |
Stock Benefit Plans | |
Weighted average grant date fair value (in dollars per share) | $ 5.89 |
Employee Stock Benefit Plans_18
Employee Stock Benefit Plans - Stock Options - Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Number of Shares | ||
Outstanding at the beginning of the period (in shares) | 9,372,794 | |
Exercised (in shares) | (951,355) | |
Cancelled (in shares) | (1,490,067) | |
Outstanding at the end of the period (in shares) | 6,931,372 | 9,372,794 |
Weighted-Average Exercise Price | ||
Outstanding at the beginning of the period (in dollars per share) | $ 12.30 | |
Exercised (in dollars per share) | 10.88 | |
Cancelled (in dollars per share) | 13.04 | |
Outstanding at the end of the period (in dollars per share) | $ 12.34 | $ 12.30 |
Vested or expected to vest | ||
Number of Shares (in shares) | 6,929,248 | |
Weighted-Average Exercise Price (in dollars per share) | $ 12.34 | |
Weighted Average Contractual Life | 3 years 3 months 25 days | |
Aggregate Intrinsic Value | $ 5,782 | |
Stock options | ||
Weighted Average Contractual Life - Outstanding | 3 years 3 months 25 days | 3 years 6 months 3 days |
Aggregate Intrinsic Value - Outstanding | $ 5,786 | $ 4,528 |
Number of Shares - Exercisable (in shares) | 6,877,104 | |
Weighted-Average Exercise Price - Exercisable (in dollars per share) | $ 12.35 | |
Weighted Average Contractual Life - Exercisable | 3 years 3 months 18 days | |
Aggregate Intrinsic Value - Exercisable | $ 5,709 |
Employee Stock Benefit Plans_19
Employee Stock Benefit Plans - Stock Options - Total Intrinsic Value (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Stock options | |||
Total intrinsic value of options exercised | $ 0.9 | $ 2.7 | $ 3.5 |
Employee Stock Benefit Plans_20
Employee Stock Benefit Plans - Unrecognized Share-based Compensation (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Stock options with time-based vesting | |
Unrecognized share-based compensation | |
Unrecognized expense, net of estimated forfeitures, options | $ 183 |
Weighted-average remaining recognition period | 6 months 14 days |
Restricted Stock | |
Unrecognized share-based compensation | |
Unrecognized expense, net of estimated forfeitures, other than options | $ 968 |
Weighted-average remaining recognition period | 5 months 12 days |
Time-based Restricted Stock Units | |
Unrecognized share-based compensation | |
Unrecognized expense, net of estimated forfeitures, other than options | $ 24,436 |
Weighted-average remaining recognition period | 2 years 4 months 28 days |
Performance-based Restricted Stock Units | |
Unrecognized share-based compensation | |
Unrecognized expense, net of estimated forfeitures, other than options | $ 6,387 |
Weighted-average remaining recognition period | 1 year 5 months 26 days |
Income Taxes - Provision for (B
Income Taxes - Provision for (Benefit from) Income Taxes - Tabular Disclosure (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Current taxes: | |||
State | $ 11,618 | $ 5,503 | $ 2,685 |
Total current taxes | 11,618 | 5,503 | 2,685 |
Deferred taxes: | |||
Federal | 52,191 | (251,367) | |
State | 13,548 | (81,927) | |
Total deferred taxes | 65,739 | (333,294) | |
Income tax expense (benefit) | $ 77,357 | $ (327,791) | $ 2,685 |
Income Taxes - Provision for _2
Income Taxes - Provision for (Benefit from) Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Taxes | |||
Income tax (benefit) expense | $ 77,357 | $ (327,791) | $ 2,685 |
Income tax (benefit) expense, non-cash expense | 73,400 | ||
Income tax (benefit) expense, cash expense | 4,000 | ||
Deferred Income Tax Expense (Benefit) | |||
Deferred taxes | 65,739 | (333,294) | |
Current taxes: | |||
State | $ 11,618 | $ 5,503 | 2,685 |
Federal Income Tax Expense (Benefit) | |||
Income tax expense related to federal income tax | 0 | ||
State Income Tax Expense (Benefit) | |||
Income tax expense related to state income tax | $ 2,700 |
Income Taxes - Federal Statutor
Income Taxes - Federal Statutory Rate (Details) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Effective Income Tax Rate Reconciliation, Percent | |||
Federal statutory rate (as a percent) | 21% | 21% | 21% |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Reconciliation of income taxes | |||
Income tax expense using U.S. federal statutory rate | $ 53,009 | $ 42,138 | $ 22,861 |
Permanent differences | (290) | 426 | 325 |
State income taxes, net of federal benefit | 16,160 | 12,554 | 7,565 |
Executive compensation - Section 162(m) | 2,654 | 695 | 1,718 |
Excess tax benefits | 3,613 | 6,270 | 5,132 |
Fair market valuation of Note Hedge Warrants and Convertible Note Hedges | (50) | 325 | 1,680 |
Tax credits | (252) | (9) | (3,149) |
Expiring net operating losses and tax credits | 1,087 | 491 | 1,991 |
Effect of change in state tax rate on deferred tax assets and deferred tax liabilities | 2,581 | 123 | (208) |
Change in the valuation allowance | (1,155) | (390,804) | (35,230) |
Income tax expense (benefit) | $ 77,357 | $ (327,791) | $ 2,685 |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 88,769 | $ 165,022 |
Tax credit carryforwards | 59,290 | 60,125 |
Capitalized research and development | 12,683 | 4,981 |
Share-based compensation | 13,666 | 16,857 |
Basis difference on Convertible Notes | 2,845 | 8,166 |
Basis difference on collaboration agreement for North America with AbbVie | 95,460 | 78,194 |
Accruals and reserves | 5,935 | 5,003 |
Intangible assets | 5,299 | 5,396 |
Operating lease liability | 5,337 | 5,971 |
Other | 1,242 | 3,997 |
Total deferred tax assets | 290,526 | 353,712 |
Deferred tax liabilities: | ||
Basis difference on Convertible Notes | (11,960) | |
Operating lease right-of-use assets | (3,810) | (4,248) |
Total deferred tax liabilities | (3,810) | (16,208) |
Net deferred tax assets | 286,716 | 337,504 |
Valuation allowance | (3,055) | (4,210) |
Net deferred tax asset | $ 283,661 | $ 333,294 |
Income Taxes - Valuation Allowa
Income Taxes - Valuation Allowance (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Taxes | |||
Valuation allowance | $ 3,055 | $ 4,210 | |
Net deferred tax assets | 286,716 | 337,504 | |
(Decrease) increase in valuation allowance | $ (1,200) | (390,800) | $ (35,200) |
Release of Valuation Allowance on Majority of Tax Attributes and Other Deferred Tax Assets | |||
Income Taxes | |||
(Decrease) increase in valuation allowance | $ 333,300 |
Income Taxes - Net Operating Lo
Income Taxes - Net Operating Loss Carryforwards (Details) $ in Millions | Dec. 31, 2022 USD ($) |
Domestic Tax Authority | |
Net operating loss carryforwards | |
Net operating loss carryforwards | $ 689.4 |
Net operating loss carryforwards, subject to expiration | 559.8 |
Net operating loss carryforwards, indefinite | 129.6 |
State | |
Net operating loss carryforwards | |
Net operating loss carryforwards | $ 509.5 |
Income Taxes - Tax Credit Carry
Income Taxes - Tax Credit Carryforwards (Details) $ in Millions | Dec. 31, 2022 USD ($) |
Tax credit carryforward | |
Tax credit carryforward | $ 63.9 |
Income Taxes - Unrecognized Inc
Income Taxes - Unrecognized Income Tax Benefits - Tabular Disclosure (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Unrecognized income tax benefits | |||
Unrecognized Tax Benefits, Beginning Balance | $ 84,606 | $ 68,087 | $ 53,099 |
Increases based on tax positions related to the current period | 101,225 | 83,206 | 66,687 |
Decreases for tax positions in prior periods | (83,206) | (66,687) | (51,699) |
Unrecognized Tax Benefits, End Balance | $ 102,625 | $ 84,606 | $ 68,087 |
Income Taxes - Unrecognized I_2
Income Taxes - Unrecognized Income Tax Benefits - Additional Information (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Unrecognized tax benefits | ||||
Unrecognized tax benefits | $ 102,625 | $ 84,606 | $ 68,087 | $ 53,099 |
Amount of unrecognized tax benefits that, if recognized, would affect effective tax rate | 1,400 | |||
Reserve for uncertain tax positions recorded in other liabilities | $ 9,200 | $ 2,900 |
Defined Contribution Plan (Deta
Defined Contribution Plan (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Defined Contribution Plan | |||
Matching contribution, percentage of employee contribution (as a percent) | 75% | ||
Matching contribution, annual employee contribution limit, amount | $ 6,000 | ||
Compensation cost | $ 2,200,000 | $ 2,200,000 | $ 1,800,000 |
Minimum | |||
Defined Contribution Plan | |||
Employee contribution percentage per calendar year (as a percent) | 1% | ||
Maximum | |||
Defined Contribution Plan | |||
Employee contribution percentage per calendar year (as a percent) | 100% | ||
Ironwood Pharmaceuticals, Inc 401(k) Savings Plan, Matching Contributions, 100 Percent on First 3 Percent and 50 Percent on Next 3 Percent, 100 Percent on First 3 Percent | |||
Defined Contribution Plan | |||
Matching contribution, percent of match (as a percent) | 100% | ||
Matching contribution, percent of employees' gross pay (as a percent) | 3% | ||
Ironwood Pharmaceuticals, Inc 401(k) Savings Plan, Matching Contributions, 100 Percent on First 3 Percent and 50 Percent on Next 3 Percent, 50 Percent on Next 3 Percent | |||
Defined Contribution Plan | |||
Matching contribution, percent of match (as a percent) | 50% | ||
Matching contribution, percent of employees' gross pay (as a percent) | 3% | ||
Ironwood Pharmaceuticals, Inc 401(k) Savings Plan, Matching Contributions, 75 Percent on First $10,000, up to $7,500 | |||
Defined Contribution Plan | |||
Matching contribution, percentage of employee contribution (as a percent) | 75% | ||
Matching contribution, annual employee eligible contribution limit, amount | $ 10,000 |
Related Party Transactions (Det
Related Party Transactions (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2020 USD ($) | |
Affiliated Entity | Cyclerion Therapeutics, Inc | Research and Development Expense | |
Related Party Transactions | |
Expense for service provided by related party | $ 2.3 |
Workforce Reduction and Restr_3
Workforce Reduction and Restructuring - General Information (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 employee | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Restructuring Expenses | ||||
Restructuring expenses | $ 1,073 | |||
Reduction in Workforce, Discontinued Development of IW-3718, September 29, 2020 | ||||
Workforce Reduction | ||||
Number of employees expected to be eliminated | employee | 100 | |||
Restructuring Expenses | ||||
Restructuring expenses | $ 0 | |||
Restructuring expenses and impairment of certain fixed assets | $ 15,500 | |||
Impairment of Long-Lived Assets | ||||
Impairment of long-lived assets | $ 1,200 | |||
Impairment, Long-Lived Asset, Held-for-Use, Statement of Income or Comprehensive Income | Restructuring expenses |
Workforce Reduction and Restr_4
Workforce Reduction and Restructuring - Tabular Disclosure (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Workforce Reduction | ||
Balance at beginning of period | $ 462 | $ 10,907 |
Charges | 1,073 | |
Amounts paid | (10,664) | |
Adjustments | (854) | |
Balance at end of period | 462 | |
Employee severance, benefits and related costs | ||
Workforce Reduction | ||
Balance at beginning of period | 462 | 10,902 |
Charges | 0 | 1,025 |
Amounts paid | (462) | (10,611) |
Adjustments | (854) | |
Balance at end of period | 0 | 462 |
Contract related costs | ||
Workforce Reduction | ||
Balance at beginning of period | $ 0 | 5 |
Charges | 48 | |
Amounts paid | (53) | |
Balance at end of period | $ 0 |
Selected Quarterly Financial _3
Selected Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Selected Quarterly Financial Data | |||||||||||
Total revenues | $ 107,199 | $ 108,637 | $ 97,231 | $ 97,529 | $ 117,130 | $ 103,747 | $ 104,031 | $ 88,845 | $ 410,596 | $ 413,753 | $ 389,523 |
Total operating expenses | 38,836 | 40,164 | 41,576 | 39,683 | 60,538 | 38,576 | 38,933 | 43,447 | 160,259 | 181,494 | 246,583 |
Other expense, net | 3,902 | 1,434 | (1,870) | (1,381) | (10,337) | (5,499) | (10,726) | (5,040) | 2,085 | (31,602) | (34,079) |
Net income | $ 48,867 | $ 50,317 | $ 37,080 | $ 38,801 | 41,374 | 55,845 | 391,303 | 39,926 | 175,065 | 528,448 | 106,176 |
Comprehensive income | $ 41,374 | $ 55,845 | $ 391,303 | $ 39,926 | $ 175,065 | $ 528,448 | $ 106,176 | ||||
Net income per share - basic (in dollars per share) | $ 0.32 | $ 0.33 | $ 0.24 | $ 0.25 | $ 0.25 | $ 0.34 | $ 2.42 | $ 0.25 | $ 1.13 | $ 3.26 | $ 0.67 |
Net income per share - diluted (in dollars per share) | $ 0.27 | $ 0.28 | $ 0.21 | $ 0.21 | $ 0.25 | $ 0.34 | $ 2.39 | $ 0.25 | $ 0.96 | $ 3.21 | $ 0.66 |