Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 02, 2018 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | MLNT | |
Entity Registrant Name | MELINTA THERAPEUTICS, INC. /NEW/ | |
Entity Central Index Key | 1,461,993 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 31,353,254 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets | ||
Cash and equivalents | $ 91,479 | $ 128,387 |
Trade receivables | 11,271 | |
Other receivables | 11,619 | 7,564 |
Inventory | 28,220 | 10,825 |
Prepaid expenses and other current assets | 7,322 | 2,988 |
Total current assets | 149,911 | 149,764 |
Property and equipment, net | 2,276 | 1,596 |
In-process research and development | 20,000 | |
Other intangible assets | 240,825 | 7,500 |
Goodwill | 13,059 | |
Other assets | 22,678 | 1,413 |
Total assets | 448,749 | 160,273 |
Current liabilities | ||
Accounts payable | 12,463 | 7,405 |
Accrued expenses | 29,437 | 24,041 |
Warrant liability | 9,179 | |
Current deferred purchase price and contingent consideration | 22,830 | |
Contingent milestone payments | 27,184 | |
Accrued interest on notes payable | 284 | |
Total current liabilities | 101,093 | 31,730 |
Long-term liabilities | ||
Notes payable, net of debt discount | 106,090 | 39,555 |
Deferred revenues | 10,008 | |
Deferred purchase price and contingent consideration | 33,393 | |
Other long-term liabilities | 8,340 | 6,644 |
Total long-term liabilities | 147,823 | 56,207 |
Total liabilities | 248,916 | 87,937 |
Commitments and contingencies | ||
Shareholders' Equity | ||
Preferred stock; $.001 par value; 5,000,000 shares authorized; no shares issued or outstanding at March 31, 2018, and December 31, 2017, respectively | ||
Common stock; $.001 par value; 80,000,000 shares authorized; 31,353,254 and 21,998,942 issued and outstanding at March 31, 2018, and December 31, 2017, respectively | 31 | 22 |
Additional paid-in capital | 791,885 | 644,973 |
Accumulated deficit | (592,083) | (572,659) |
Total shareholders’ equity | 199,833 | 72,336 |
Total liabilities and shareholders’ equity | $ 448,749 | $ 160,273 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2018 | Dec. 31, 2017 |
Statement Of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 80,000,000 | 80,000,000 |
Common stock, shares issued | 31,353,254 | 21,998,942 |
Common stock, shares outstanding | 31,353,254 | 21,998,942 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenue | ||
Product sales, net | $ 11,846 | |
Contract research | 2,995 | $ 2,558 |
License | 19,905 | |
Total revenue | 14,841 | 22,463 |
Operating expenses: | ||
Cost of goods sold | 7,686 | |
Research and development | 16,129 | 12,917 |
Selling, general and administrative | 34,624 | 7,973 |
Total operating expenses | 58,439 | 20,890 |
Loss from operations | (43,598) | 1,573 |
Other income (expense): | ||
Interest income | 210 | 5 |
Interest expense | (10,196) | (1,622) |
Change in fair value of warrant liability | 24,085 | (55) |
Loss on extinguishment of debt | (2,595) | |
Other income | 4 | 25 |
Grant income | 2,658 | |
Other income (expense), net | 14,166 | (1,647) |
Net loss | (29,432) | (74) |
Accretion to redemption value of convertible preferred stock | (5,720) | |
Net loss attributable to common shareholders | $ (29,432) | $ (5,794) |
Basic and diluted net loss per share | $ (0.95) | $ (208.16) |
Basic and diluted weighted average shares outstanding | 30,917,700 | 27,835 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Operating activities | ||
Net loss | $ (29,432) | $ (74) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Depreciation and amortization | 4,805 | 114 |
Non-cash interest expense | 5,954 | 1,155 |
Share-based compensation | 955 | 572 |
Change in fair value of warrant liability | (24,085) | 55 |
Loss on disposal of assets | 9 | |
Loss on extinguishment of debt | 2,595 | |
Changes in operating assets and liabilities | ||
Receivables | (5,868) | (2,623) |
Inventory | (2,002) | |
Prepaid expenses and other current assets | (1,293) | 1,178 |
Accounts payable | 3,983 | 1,342 |
Accrued expenses | (4,817) | 2,022 |
Accrued interest on notes payable | (284) | (20) |
Other non-current assets and liabilities | (1,930) | (165) |
Net cash (used in) provided by operating activities | (51,419) | 3,565 |
Investing activities | ||
IDB acquisition | (166,383) | |
Purchases of property and equipment | (504) | (109) |
Net cash used in investing activities | (166,887) | (109) |
Proceeds from financing (see Note 4): | ||
Proceeds from the issuance of notes payable, net of issuance costs | 104,966 | 8,010 |
Proceeds from the issuance of warrants | 33,264 | |
Proceeds from the issuance of royalty agreement | 1,472 | |
Purchase of notes payable disbursement option | (7,609) | |
Proceeds from issuance of common stock, net | 51,452 | |
Other financing activities: | ||
Proceeds from issuance of common stock, net | 40,000 | |
Debt extinguishment | (2,150) | |
Proceeds from the exercise of stock options, net of cancellations | 3 | 95 |
Principal payments on notes payable | (40,000) | (2,844) |
Net cash provided by financing activities | 181,398 | 5,261 |
Net change in cash and equivalents | (36,908) | 8,717 |
Cash, cash equivalents and restricted cash at beginning of the period | 128,587 | 11,409 |
Cash, cash equivalents and restricted cash at end of the period | 91,679 | 20,126 |
Supplemental cash flow information | ||
Cash paid for interest | 4,480 | 488 |
Supplemental non-cash flow information | ||
Accrued purchases of fixed assets | $ 327 | 56 |
Accrued deferred stock issuance costs | $ 479 |
Financial Statements
Financial Statements | 3 Months Ended |
Mar. 31, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Financial Statements | NOTE 1 – FINANCIAL STATEMENTS The accompanying unaudited consolidated financial statements have been prepared assuming Melinta , Inc. (the “Company,” “we,” “us,” “our,” or “Melinta”) We have incurred losses from operations since our inception and had an accumulated deficit of $592,083 as of March 31, 2018. We expect to incur substantial expenses and further losses in the foreseeable future for the research, development, and commercialization of our product candidates and approved products. As a result, we will need to fund our operations through public or private equity offerings, debt financings, or corporate collaborations and licensing arrangements. We have concluded it is not probable that our current operating plans, existing cash and cash collections from existing revenue arrangements and product sales will be sufficient to fund our operations for the next 12 months. We are currently pursuing various funding options, including seeking additional equity or debt financing, grants, and strategic collaborations or partnerships to obtain additional funding or expand our product offerings. While the recent acquisition of the Infectious Disease Business (“IDB”) from The Medicines Company (“Medicines”) does provide incremental revenues, the cost to further develop and commercialize Baxdela™ and to support the IDB products is expected to significantly exceed revenues for at least the next twelve months. While there can be no assurance that we will be successful in our efforts, we have a strong history of raising equity financing to fund our development activities. Should we be unable to obtain adequate financing in the near term, our business, result of operations, liquidity and financial condition would be materially and negatively affected, and we would be unable to continue as a going concern. Additionally, there can be no assurance that, assuming we are able to strengthen our cash position, we will achieve sufficient revenue or profitable operations to continue as a going concern. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation and Basis of Presentation —The accompanying unaudited consolidated financial statements include the accounts and results of operations of Melinta and its wholly-owned subsidiaries. The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The information reflects all adjustments (consisting of only normal, recurring adjustments) necessary for a fair presentation of the information. All intercompany balances and transactions have been eliminated in consolidation. Use of Estimates —The preparation of these unaudited consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Trade and Other Receivables —Trade receivables consist of amounts billed for product shipments. Receivables for product shipments are recorded as shipments are made and title to the product is transferred to the customer. Other receivables consist of amounts billed, and amounts earned but unbilled, under our licensing agreements and our contracts with the Biomedical Advanced Research and Development Authority of the U.S. Department of Health and Human Services (“BARDA”) We carry our receivables less an allowance for doubtful accounts. On a periodic basis, we evaluate our receivables for collectability. We have not recorded an allowance for doubtful accounts as we believe all receivables are fully collectible. Concentration of Credit Risk —Concentration of credit risk exists with respect to cash and cash equivalents and receivables. We maintain our cash and cash equivalents with federally insured financial institutions, and at times, the amounts may exceed the federally insured deposit limits. To date, we have not experienced any losses on our deposits of cash and cash equivalents. We believe that we are not exposed to significant credit risk due to the financial position of the depository institutions in which deposits are held. Until we transition the management of our order-to-sales process for Vabomere™, Minocin ® ® Inventory —Inventory is stated at the lower of cost or estimated net realizable value. Inventory is valued on a first-in, first-out basis and consists primarily of third-party manufacturing costs, overhead—principally the cost of managing our manufacturers—and related transportation costs. We capitalize inventory upon regulatory approval when, based on our judgment, future commercialization is considered probable and future economic benefit is expected to be realized; otherwise, such costs are expensed. We review inventories on hand at least quarterly and record provisions for estimated excess, slow-moving and obsolete inventory, as well as inventory with a carrying value in excess of net realizable value. As of March 31, 2018, we had recorded no reserves for our inventory. Fair Value of Financial Instruments —The carrying amounts of our financial instruments, which include cash and cash equivalents, trade and other receivables, accounts payable, accrued expenses, notes payable, royalty liability and common stock warrants, approximated their fair values at March 31, 2018, and December 31, 2017. Debt Issuance Costs —Debt issuance costs represent legal and other direct costs incurred in connection with our notes payable. These costs were either recorded as debt issuance costs in the balance sheets at the time they were incurred, or as a contra-liability included in the notes payable line item, and amortized as a non-cash component of interest expense using the effective interest method over the term of the note payable. Impairment of Long-Lived Assets —Long-lived assets consist primarily of property and equipment and intangible assets. We record impairment losses on long-lived assets used in operations when events and circumstances indicate that the carrying amount of an asset or group of assets may not be fully recoverable. We have not recorded any significant impairment charges to date with respect to our long-lived assets. Intangible Assets —Intangible assets consist of capitalized milestone payments for the licenses we use to make our products and the fair value of identifiable intangible assets, including in-process research and development (“IPRD”), acquired in the IDB transaction. We amortize the cost of intangible assets on a straight-line basis over the estimated economic life of each asset, generally the exclusivity period of each associated product. Amortization for IPRD does not begin until the associated product has received approval and sales have commenced. Revenue Recognition —On January 1, 2018, we adopted Accounting Standards Update (“ASU” or “Update”) 2014-09, Revenue from Contracts with Customers (Topic 606) , and all related amendments. For further information regarding the adoption of Topic 606, see the “Recently Issued and Adopted Accounting Pronouncements” section of this Note 2. Topic 606 outlines a single comprehensive model to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance. The core principle of this new revenue recognition guidance is that a company will recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. Topic 606 defines the following five-step process to achieve this core principle, and in doing so, it is possible that significant judgment and estimates may be required within the revenue recognition process. 1) identify the contract(s) with a customer; 2) identify the performance obligations in the contract; 3) determine the transaction price; 4) allocate the transaction price to the performance obligations in the contract; and 5) recognize revenue when (or as) the entity satisfies a performance obligation. The new guidance only applies the five-step model to arrangements that meet the definition of a contract under Topic 606, including the consideration of whether it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of Topic 606, we assess the goods or services promised within each contract and determine those that are performance obligations; the assessment includes the evaluation of whether each promised good or service is distinct within the context of the contract. Under Topic 606, we recognize revenue separately for performance obligations that are “distinct.” Performance obligations are considered to be distinct if (a) the customer can benefit from the license or services either on its own or together with other resources that are readily available to the customer, and (b) our promise to transfer the license or services is separately identifiable from other promises in the contract. If a license or service is not individually distinct, we combine the license or service with other promised licenses and/or services until we identify a bundle of licenses and/or services that together are distinct. We recognize, as revenue, the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. In determining the transaction price, we consider all forms of variable consideration, which can take various forms, including, but not limited to, prompt-pay discounts, rebates, credits, and milestone payments. We estimate variable consideration using either the “expected value” or “most likely amount” method, depending on which method better predicts the amount of consideration to which we will be entitled. The expected value method is a probability-weighted approach that considers all possible outcomes while the most likely approach uses the single most likely amount in a range of possible outcomes. We apply a variable consideration constraint to the estimated transaction price if we conclude that it is probable that there is a risk of significant reversal of revenue once the uncertainty related to the variable consideration is resolved. Under the guidance of Topic 606, we recognize revenue for each performance obligation when the customer obtains control of the product and we have satisfied each of our respective obligations. Control is defined as the ability of the customer to direct the use of and obtain substantially all the benefits of the asset. In addition, as of March 31, 2018, we do not have any contract assets or liabilities and our contracts do not have any significant financing components. And, we generally do not capitalize contract origination costs. Licensing Arrangements We enter into license and collaboration agreements for the research and development and/or commercialization of therapeutic products. The terms of these agreements may include nonrefundable licensing fees, funding for research, development and manufacturing, milestone payments and royalties on any product sales derived from the collaborations in exchange for the delivery of licenses and rights to sell our products within specified territories outside the United States. In the determination of whether our license and collaboration agreements are accounted for under Topic 606 or Accounting Standards Classification (“ASC”) 808, Contract Accounting Our license agreements may include contingent or variable consideration based upon the achievement of regulatory- and sales-based milestones and future royalties based on a percentage of the partner’s net product sales. Performance obligations to deliver distinct licenses are recognized at a point in time. Milestone payments from licensees that are contingent and/or variable upon future regulatory events and product sales are not considered probable of being achieved until the milestones are earned and, therefore, the contingent revenue is subject to significant risk of reversal. As such, we constrain this variable consideration and do not include it in the transaction price (or recognize the revenue related to these milestones) until such time that the contingencies are resolved and generally recognized at a point in time. In addition, under the sales- or usage- based royalty exception in Topic 606, we do not estimate, at the onset of the arrangement, the variable consideration from future royalties or sales-based milestones. Instead, we wait to recognize royalty revenue until the future sales occur. Adoption of Topic 606 We adopted Topic 606 on January 1, 2018, using the modified retrospective method applied to those contracts which were not complete as of January 1, 2018. Results for reporting periods beginning after January 1, 2018, are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with legacy U.S. GAAP under ASC 605. In our adoption of Topic 606, we did not use practical expedients. In addition, we have considered the nature, amount and timing of our different revenue sources. Accordingly, the disaggregation of revenue from contracts with customers is reflected in different captions within the condensed consolidated statement of operations. For our Eurofarma distribution arrangements under which revenue was previously deferred, revenue is now recognized at the point in time when the license is granted and has benefit to Eurofarma. These deferred revenues were originally expected to be recognized in future periods over the period of time over which we supplied Baxdela under the supply arrangement, which could have lasted up to 10 years or longer. The cumulative effect of the adoption was recognized as a decrease to opening accumulated deficit and a decrease to deferred revenue of $10,008 on January 1, 2018. The effect of the adoption of Topic 606 on our condensed consolidated balance sheet is as follows: Balance at December 31, 2017 Adjustments Due to Topic 606 Balance at January 1, 2018 Liabilities: Deferred revenue $ 10,008 $ (10,008 ) $ - Shareholders’ Equity: Accumulated deficit $ (572,659 ) $ 10,008 $ (562,651 ) In connection with the adoption of Topic 606, we no longer recognize grant income as revenue (see Grant Income discussion below), but there was no change to the timing of historical recognition. Also, there was no change to the timing of recognition of contract revenue under our licensing agreements. However, unlike Topic 606, we believe that ASC 605 would have precluded revenue recognition for the recent launches of Baxdela and Vabomere for the initial stocking of product at wholesalers that had not sold through as of the end of the first quarter of 2018. As such, the following reflects what we believe our condensed consolidated balance sheet and condensed consolidated statement of operations would have been under ASC 605 compared to the recognition of revenue under Topic 606 as of, and for the three months ended, March 31, 2018: Revenue Recognized Adjustments Due to Topic 606 Pro Forma Revenue Under ASC 605 Revenue: Product sales, net $ 11,846 $ (2,218 ) $ 9,628 Cost of goods sold $ 7,686 $ (1,054 ) $ 6,632 Net loss $ (29,432 ) $ (1,164 ) $ (30,596 ) Net loss per share $ (0.95 ) $ (0.99 ) Balance at March 31, 2018 Adjustments Due to Topic 606 Pro Forma Balance Under ASC 605 Assets: Prepaid and other current assets $ 7,322 $ 1,054 $ 8,376 Liabilities: Deferred revenue $ - $ 2,218 $ 2,218 Shareholders’ equity: Accumulated deficit $ (592,083 ) $ (1,164 ) $ (593,247 ) The table above does not reflect the reclassification of Grant income from Other income to Revenue under ASC 605. The reclassification would have no effect on net loss per share. With respect to outstanding performance obligations, we had none as of January 1, 2018. Although we have agreements in place to supply Baxdela to our partners once they achieve regulatory approval in their respective territories, we concluded that the option to purchase Baxdela from us is not a material right because the product will not be priced at a significant discount. All performance obligations under our licensing arrangements were satisfied historically at a point in time. Variable consideration in the form of regulatory and sales-based milestones, which are payable under the terms of our licensing arrangements, has been constrained because of the risk of significant revenue reversal as in our revenue recognition policy included in Note 2. Further, we recognize contract research revenue from Menarini as we incur the reimbursable development costs. We expect to continue these development efforts through early 2019, and we expect the related revenue to be consistent with the previous several quarters. Product Sales Historically, substantially all our revenue was related to licensing and contract research arrangements related to our Baxdela product, and we did not sell any products. Beginning in January of 2018, as a result of both the acquisition of IDB and the launch of Baxdela, we now distribute Baxdela, Orbactiv, Minocin and Vabomere products commercially in the United States. The majority of our product sales are made directly to wholesale customers who subsequently resell our products to hospitals or certain medical centers, as well as specialty pharmacy providers and other retail pharmacies. The wholesaler places orders with us for sufficient quantities of our products to maintain an appropriate level of inventory based on their customers’ historical purchase volumes and demand. We recognize revenue once we have transferred physical possession of the goods and the wholesaler obtains legal title to the product and accepts responsibility for all credit and collection activities with the resale customer. In addition to distribution agreements with wholesaler customers, we enter into arrangements with health care providers and payers that provide for government mandated and/or privately negotiated rebates, chargebacks and discounts with respect to the purchase of our products. The transaction price reflects the amount we expect to be entitled to in connection with the sale and transfer of control of product to our customers. Variable consideration is only included in the transaction price, to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. At the time the customer takes control of the product, which is when our performance obligation under the sales contracts is complete, we record product revenues net of applicable reserves for various types of variable consideration, most of which are subject to constraint while also considering the likelihood and the magnitude of any revenue reversal, based on our estimates of channel mix. The types of variable consideration in our product revenue are as follows: • Prompt pay discounts • Product returns • Chargebacks and rebates • Fee-for-service • Government rebates • Commercial payer rebates • Group Purchasing Organization (“GPO”) administration fees • MelintAssist voluntary patient assistance programs In determining the amounts of certain allowances and accruals, we must make significant judgments and estimates. For example, in determining these amounts, we estimate hospital demand, buying patterns by hospitals, hospital systems and/or group purchasing organizations from wholesalers and the levels of inventory held by wholesalers and customers. Making these determinations involves analyzing third party industry data to determine whether trends in historical channel distribution patterns will predict future product sales. We receive data periodically from our wholesale customers on inventory levels and historical channel sales mix, and we consider this data when determining the amount of the allowances and accruals for variable consideration. The amount of variable consideration is estimated by using either of the following methods, depending on which method better predicts the amount of consideration to which we are entitled: a) The “expected value” is the sum of probability-weighted amounts in a range of possible consideration amounts. Under Topic 606, an expected value may be an appropriate estimate of the amount of variable consideration if we have many contracts with similar characteristics. b) The “most likely amount” is the single most likely amount in a range of possible consideration amounts (i.e., the single most likely outcome of the contract). Under Topic 606, the most likely amount may be an appropriate estimate of the amount of variable consideration if the contract has only two possible outcomes (i.e., either achieve or don’t achieve a threshold specified in a contract). The method selected is applied consistently throughout the contract when estimating the effect of an uncertainty on an amount of variable consideration. In addition, we consider all the information (historical, current, and forecasts) that is reasonably available to us and shall identify a reasonable number of possible consideration amounts. The relevant factors used in this determination include, but are not limited to, current contractual and statutory requirements, specific known market events and trends, industry data, and forecasted customer buying and payment patterns. In assessing whether a constraint is necessary, we consider both the likelihood and the magnitude of the revenue reversal. Actual amounts of consideration ultimately received may differ from our estimates. If actual results in the future vary from our estimates, we adjust these estimates, which would affect net product revenue and earnings in the period such variances become known. The specific considerations we use in estimating these amounts related to variable consideration associated with our products are as follows: Prompt Pay Discounts Product returns ‐ ‐ At the end of each reporting period for any of our products, we may decide to constrain revenue for product returns based on information from various sources, including channel inventory levels and dating and sell-through data, the expiration dates of product currently being shipped, price changes of competitive products and introductions of generic products. At March 31, 2018, incremental to the historically-based returns rate, we increased our returns reserve by approximately $0.3 million due to risk factors that were present in connection with the initial stocking of inventory for the launch of our new products. Chargebacks ‐ Fees ‐ for ‐ service ‐ ‐ Government Rebates Medicaid – The Medicaid Drug Rebate Program is a program that includes The Centers for Medicare and Medicaid Services (CMS), State Medicaid agencies, and participating drug manufacturers that helps to offset the federal and state costs of most outpatient prescription drugs dispensed to Medicaid patients. The Medicaid Drug Rebate Program is jointly funded by the states and the federal government. The program reimburses hospitals, physicians, and pharmacies for providing care to qualifying recipients who cannot finance their own medical expenses. TRICARE – TRICARE is a benefit established by law as the health care program for uniformed service members, retired service members, and their families. We must pay the Department of Defense (“DOD”) refunds for drugs entered into the normal commercial chain of transactions that end up as prescriptions given to TRICARE beneficiaries and paid for by the DOD. The refund amount is the portion of the price of the drug sold by us that exceeds the federal ceiling price. Refunds due to TRICARE are based solely on utilization of pharmaceutical agents dispensed through a TRICARE Retail Pharmacy (“TRRx”) to DOD beneficiaries. Medicare Part D – We maintain contracts with Managed Care Organizations (“MCOs”) that administer prescription benefits for Medicare Part D. MCOs either own pharmacy benefit managers (“PBMs”) or contract with several PBMs to fulfill prescriptions for patients enrolled under their plans. As patients obtain their prescriptions, utilization data are reported to the MCOs, which generally submit claims for rebates quarterly. Commercial Payer Rebates The amount of consideration to which we will be entitled is based on a range of possible consideration outcomes and, therefore, we use the expected value method as this is an appropriate estimate of the amount of variable consideration. GPO Administration Fees MelintAssist At the end of each reporting period, we adjust our allowances for cash discounts, product returns, chargebacks, fees ‐ ‐ Cash Discounts Product Returns Chargebacks Fees-for-Service MelintAssist Government Rebates Commercial Rebates Admin Fee Balance as of January 1, 2018 $ - $ - $ - $ - $ - $ - $ - $ - Allowances for sales 328 817 2,354 1,003 440 350 483 177 Payments & credits issued (76 ) (1 ) (1,295 ) (254 ) (32 ) - (111 ) (15 ) Balance as of March 31, 2018 $ 252 $ 816 $ 1,059 $ 749 $ 408 $ 350 $ 372 $ 161 The allowances for cash discounts and chargebacks are recorded as contra-assets in trade receivables; the other balances are recorded in other accrued expenses. Grant Income We have several agreements with BARDA related to certain development costs for solithromycin and Vabomere. We concluded that BARDA is not a customer under Topic 606 because it does not engage with us in reciprocal transactions but, rather, provides contributions to our development efforts to encourage the development of more antibiotics for the welfare of society. As such, we view the income as a contribution and classify it within other income and expense, net, rather than in revenue. We recognize grant income under the BARDA contracts over time as qualifying research activities are conducted. In the first quarter of 2018, we and BARDA agreed to terminate the solithromycin BARDA contract and wind down the study, but we will continue to recognize grant income until the wind-down activities are completed later this year. Comprehensive Loss —Comprehensive loss is equal to net loss as presented in the accompanying statements of operations. Segment and Geographic Information —Operating segments are defined as components of an enterprise engaging in business activities for which discrete financial information is available and regularly reviewed by the chief operating decision maker in deciding how to allocate resources and in assessing performance. We operate and manage our business as one operating segment. Although substantially all of our license and contract research revenue is generated from agreements with companies that are domiciled outside of the U.S., we do not operate outside of the U.S., nor do we have any significant assets in any foreign country. See Note 2 for further discussion of the license and contract research revenue. Recently Issued and Adopted Accounting Pronouncements: On January 1, 2018, we adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606) The Financial Accounting Standards Board (“FASB”) has also issued certain clarifying guidance to Topic 606 that we have considered as follows: • ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), • ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, • ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients, o Allowed companies that elect the modified retrospective transition method to apply the guidance of Topic 606 to either: 1) all contracts, completed or not completed, or 2) only to contracts that were not completed. We elected to apply the new standard to contracts with our customers that were incomplete of January 1, 2018. o Clarified the objective of the entity’s collectability assessment (one of the five criteria of step 1 of the revenue recognition model) and provides new guidance on when an entity would recognize as revenue consideration it receives if the entity concludes that collectability is not probable. o Permitted an entity to present revenue net of sales taxes collected on behalf of governmental authorities (i.e., exclude sales taxes that meet certain criteria, from the transaction price). o Specifies that the fair value measurement date for noncash consideration to be received is the contract inception date. Subsequent changes in the fair value of noncash consideration after contract inception would be included in the transaction price as variable consideration (subject to the variable consideration constraint) only if the fair value varies for reasons other than the “form” of the consideration. • ASU No. 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers The new guidance provided for two transition methods, a full retrospective approach and a modified retrospective approach, and requires more detailed disclosures to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. We utilized the modified retrospective method of adoption and recognized the cumulative effect of adoption as an adjustment to retained earnings at January 1, 2018, in the amount of $10,008, solely related to revenue that was previously deferred on a contract that has yet to be completed. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805) Clarifying the Definition of a Business In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments Recently Issued Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other: Simplifying the Test for Goodwill Impairment |
Balance Sheet Components
Balance Sheet Components | 3 Months Ended |
Mar. 31, 2018 | |
Balance Sheet Related Disclosures [Abstract] | |
Balance Sheet Components | NOTE 3 – BALANCE SHEET COMPONENTS Cash, Cash Equivalents and Restricted Cash— Cash, cash equivalents and restricted cash, as presented on the Consolidated Statements of Cash Flows, consisted of the following: March 31, December 31, 2018 2017 Cash and cash equivalents $ 91,479 $ 128,387 Restricted cash (included in Other Assets) 200 200 Total cash, cash equivalents and restricted cash shown in the Consolidated Statements of Cash Flows $ 91,679 $ 128,587 Inventory —Inventory consisted of the following: March 31, December 31, 2018 2017 Raw materials $ 17,401 $ 5,545 Work in process 3,240 181 Finished goods 7,579 5,099 Total inventory $ 28,220 $ 10,825 Other Assets —Other assets consisted of the following: March 31, December 31, 2018 2017 Deerfield disbursement option $ 7,609 $ - Long-term inventory deposits 13,291 - VAT receivable 665 248 Research study deposit 500 500 Security deposits 413 465 Restricted cash 200 200 Total other assets $ 22,678 $ 1,413 Accrued Expenses —Accrued expenses consisted of the following: March 31, December 31, 2018 2017 Accrued contracted services $ 4,038 $ 5,596 Payroll related expenses 8,740 9,885 Professional fees 3,423 3,621 Accrued royalty payment 2,795 2,040 Accrued sales allowances 2,856 - Accrued other 7,585 2,899 Total accrued expenses $ 29,437 $ 24,041 Accrued contracted services are primarily comprised of amounts owed to third-party clinical research organizations and contract manufacturers for research and development work performed on behalf of Melinta, and amounts owed to third-party marketing organizations for work performed to support the commercialization and sale of our products. Accrued payroll related expenses are primarily comprised of accrued employee termination benefits, bonus and vacation. The amounts accrued represent our best estimate of amounts owed through period-end. Such estimates are subject to change as additional information becomes available. |
Financing Arrangements
Financing Arrangements | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Financing Arrangements | NOTE 4 – FINANCING ARRANGEMENTS Melinta’s outstanding debt balances consisted of the following as of March 31, 2018 and December 31, 2017: March 31, December 31, 2018 2017 Principal balance under loan agreements $ 115,268 $ 40,000 Debt discount and deferred financing costs for loan agreements (9,178 ) (445 ) Long-term balance under the loan agreements $ 106,090 $ 39,555 2014 Loan Agreement In December 2014, we entered into an agreement with a lender pursuant to which we borrowed an initial term loan amount of $20,000 (the “2014 Loan Agreement”). In December 2015, pursuant to the achievement of certain milestones with respect to the terms in the 2014 Loan Agreement, we borrowed an additional term loan advance in the amount of $10,000. We were obligated to make monthly payments in arrears of interest only, at a rate of the greater of 8.25% or the sum of 8.25% plus the prime rate minus 4.5% per annum, commencing on January 1, 2015, and continuing on the first day of each successive month thereafter through and including June 1, 2016. Commencing on July 1, 2016, and continuing on the first day of each month through and including June 1, 2018, we were required to make consecutive equal monthly payments of principal and interest. All unpaid principal and accrued and unpaid interest with respect to the 2014 Loan Agreement were due and payable in full on June 1, 2018. In June 2017, we repaid the outstanding principal under the 2014 Loan Agreement (see discussion below under 2017 Loan Agreement). In the three months ended March 31, 2017, we recognized $1,155 of interest expense related to the 2014 Loan Agreement. 2017 Loan Agreement On May 2, 2017, we entered into a Loan and Security Agreement with a new lender (the “2017 Loan Agreement”). Under the 2017 Loan Agreement, the lender made available to us up to $80,000 in debt financing and up to $10,000 in equity financing. The 2017 Loan Agreement bore an annual interest rate equal to the greater of 8.25% or the sum of 8.25% plus the prime rate minus 4.5%. We were also required to pay the lender an end of term fee upon the termination of the arrangement. If the outstanding principal was at or below $40,000, the 2017 Loan Agreement required interest-only monthly payments for 18 months from the funding of the first tranche, at which time we would have had the option to pay the principal due or convert the outstanding loan to an interest plus royalty-bearing note. On June 28, 2017, we drew the first tranche of financing under the 2017 Loan Agreement, the gross proceeds of which were $30,000. We used the proceeds to retire amounts outstanding under the 2014 Loan Agreement. In August 2017, we drew the second tranche of financing, receiving $10,000. We retired the 2017 Loan Agreement in January 2018 (see discussion below). Facility Agreement On January 5, 2018 (the “Agreement Date”), in connection with the IDB acquisition, we entered into the Facility Agreement (the “Facility Agreement”) with affiliates of Deerfield Management Company, L.P. (collectively, “Deerfield”). Pursuant to the terms of the Facility Agreement, Deerfield agreed to loan to us $147,774 as an initial disbursement (the “Term Loan”). The Facility Agreement also provides us the right to draw from Deerfield additional disbursements up to $50,000 (the “Disbursement Option”), which may be made available upon the satisfaction of certain conditions, such as our having achieved annualized net sales of at least $75,000 during the applicable period. We agreed to pay Deerfield an upfront fee and a yield enhancement fee, both equal to 2% of the principal amount of the funds disbursed pursuant to the Facility Agreement. The Term Loan bears interest at a rate of 11.75%, while funds distributed pursuant to the Disbursement Option will bear interest at a rate of 14.75%. We are also required to pay Deerfield an exit fee of 2% of the amount of any loans on the payment, repayment, redemption or prepayment thereof. The principal of the Term Loan must be paid by January 5, 2024. The Facility Agreement requires the outstanding principal amount of the Term Loan and any loans drawn pursuant to the Disbursement Option to be repaid in equal monthly cash amortization payments between the fourth and the sixth anniversary of the Agreement Date. The Term Loan and any loans drawn pursuant to the Disbursement Option are not permitted to be prepaid prior to January 6, 2021 under the terms of the Facility Agreement and are subject to certain prepayment fees for prepayments occurring on or after such date. In addition, the Facility Agreement allows for us to secure a revolving credit line of up to $20,000 from a different lender. Deerfield holds a first lien on all our assets, including our intellectual property, but would hold a second lien behind a revolver for working capital accounts. The Facility Agreement includes normal covenants, including periodic financial reporting and a restriction on the payment of dividends. In connection with the Facility Agreement, we also issued 3,127,846 shares of our common stock to Deerfield at a price of $13.50 on January 5, 2018, pursuant to a Securities Purchase Agreement. We received proceeds of $42,226 from this issuance of common stock. We received total proceeds of $190,000 from the Term Loan and the issuance of common stock together. We used these proceeds to fund the IDB acquisition, to retire the $40,000 of principal balance outstanding under our then-existing loan agreement and to fund ongoing working capital requirements and other general corporate expenses. As a result, we recognized a debt extinguishment loss of $2,595, comprised of prepayment penalties and exit fees totaling $2,150 and unamortized debt issuance costs of $445. In connection with the Facility Agreement and the Securities Purchase Agreement, we entered into the following freestanding instruments with Deerfield as a counterparty on January 5, 2018: • Term Loan with stated principal of $147,774 with a 11.75% interest rate; • Disbursement Option for additional draw of up to $50,000; • 3,127,846 shares of our common stock; • Warrants to purchase 3,792,868 shares of our common stock with a purchase price of $16.50 and expiration date of January 5, 2025 (the “Warrants”); and • Rights to royalty payments equal to between 2% and 3% of certain U.S. sales of Vabomere for a period of 7 years, ending on December 31, 2024, as further described below (the “Royalty Agreement”). For accounting purposes, because there are multiple freestanding instruments within the arrangement to which we are required to assign value under U.S. GAAP, we performed a valuation to determine the allocation of the gross proceeds of $190,000 to the five financial instruments listed above. We first calculated the fair value of the warrants, and then we allocated the remaining proceeds across the other four instruments using the relative fair value approach. The relative fair values of these financial instruments, which approximated their respective fair values as of the Agreement Date, were as follows (in thousands): Term Loan $ 111,421 Warrants 33,264 Royalty Agreement 1,472 Disbursement Option (7,609 ) Common Stock Consideration 51,452 Total Consideration $ 190,000 The terms of these instruments and the methodology and assumptions used to value each of them are discussed below. Term Loan The relative fair value of the term loan was estimated to be $111,421 using a discounted cash flow model. We used a risk-adjusted discount rate of 19.82%. In connection with the Facility Agreement, $6,455 of upfront term loan fees and legal debt issuance costs were paid for the total consideration received. For accounting purposes, we elected to allocate these upfront fees and costs all to the term loan, leaving a net carrying value of $104,966. The $6,455 of upfront fees and costs was recorded as debt discount and is being amortized as additional interest expense over the term of the loan. In addition, a 2% exit fee of $2,956 is payable as the loan principal payments are made. Therefore, total required future cash payments are $150,730 (term loan principal of $147,774 plus exit fee of $2,956). The exit fee cost is also being amortized as additional interest expense over the life of the loan. The total cost of all items (cash-based interest payments, upfront fees and costs, and the 2% exit fee) is being expensed as interest expense using an effective interest rate of 21.38%. During the first quarter of 2018, we recorded cash interest expense and term loan accretion expense of $4,196 and $1,124, respectively. Both amounts were recorded as interest expense in our statement of operations. The accretion of the principal of the term loan and the future payments, including the 2% exit fee due at the end of the term, and excluding the 11.75% rate applied to the $147,774 note per the form of the Facility Agreement, are as follows: Beginning Balance Accretion of Interest Expense Principal Payments and Exit Fee Ending Balance January 5 - March 31, 2018 $ 104,966 $ 1,124 $ - $ 106,090 April 1 - December 31, 2018 106,090 4,484 - 110,574 Year Ending December 31, 2019 110,574 7,040 - 117,614 Year Ending December 31, 2020 117,614 8,637 - 126,251 Year Ending December 31, 2021 126,251 10,798 - 137,049 Year Ending December 31, 2022 137,049 9,826 (69,085 ) 77,790 Year Ending December 31, 2023 77,790 3,846 (75,365 ) 6,271 Year Ending December 31, 2024 6,271 9 (6,280 ) - Total $ 45,764 $ (150,730 ) Warrants Under the terms of the Facility Agreement, we issued Warrants to Deerfield to purchase 3,792,868 shares of common stock with an exercise price of $16.50 and a term of seven years. The holders of the Warrants may exercise the Warrants for cash, on a cashless basis or through a reduction of an amount of principal outstanding under the Term Loan or any subsequent disbursements pursuant to the Disbursement Option. In connection with certain major transactions, the holders may have the option to convert the Warrants, in whole or in part, into the right to receive the transaction consideration payable upon consummation of such major transaction in respect of a number of shares of common stock of the Company equal to the Black-Scholes value of the Warrants, as defined therein, and in the case of other major transactions, the holders may have the right to exercise the Warrants, in whole or in part, for a number of shares of common stock of the Company equal to the Black-Scholes value of the Warrants. We used the Black-Scholes option-pricing model to estimate the fair value of the Warrants, which resulted in a fair value of $33,264 on the Agreement Date. To measure the Warrants at January 5, 2018, the assumptions used in the Black-Scholes option-pricing model were: the price of the common stock on January 5, 2018, an expected life of 7 years, a risk-free interest rate of 2.39% and an expected volatility of 50.0%. We classified the Warrants as a liability in our balance sheet and are required to remeasure the carrying value of these Warrants to fair value at each balance sheet date, with adjustments for changes in fair value recorded to other income or expense in our statements of operations. As of March 31, 2018, the fair value of the Warrants was $9,179, resulting in a gain of $24,085. To remeasure the Warrants at March 31, 2018, the assumptions used in the Black-Scholes option-pricing model were: the price of the common stock on March 31, 2018, an expected life of 6.77 years, a risk-free interest rate of 2.67% and an expected volatility of 50.0%. Royalty Agreement In connection with the Facility Agreement, we entered into a Royalty Agreement with Deerfield, pursuant to which we agreed to make royalty payments equal to 3% (or 2%, following the satisfaction of all our obligations under the Facility Agreement and other loan documents) of annual U.S. sales of Vabomere exceeding $75,000 ($74,178 for 2018) and less than or equal to $500,000 for a seven-year period. To determine the fair value of the obligation under the Royalty Agreement, we applied a Monte Carlo simulation model to our revenue forecasts for Vabomere, which was discounted using an adjusted weighted average cost of capital (“WACC”). The WACC incorporated our estimated senior unsecured discount rate, our expected tax rate, and our estimated cost of equity, and then was adjusted for operational leverage. On January 5, 2018, we estimated the fair market value of the royalty liability under the Royalty Agreement to be $1,472. Over the seven-year term, we will accrete the royalty liability using an effective interest rate of 42.88% and reduce the liability for any royalty payments made to Deerfield. During the first quarter of 2018, we recorded interest expense of $152, increasing the value of the liability to $1,624 at March 31, 2018. At the end of each quarter, we are required to prospectively revise the rate of accretion if there are any significant changes in our sales forecasts. There were no such changes in the first quarter of 2018. Disbursement Option The Disbursement Option allows us to draw additional funds up to $50,000 once we achieve annual net product sales of at least $75,000. The annual net sales target is measured by using the sales result for the preceding six months and multiplying by two. The disbursement must be drawn within two years from the effective date of the transaction and requires quarterly interest payments at a rate of 14.75% and requires the principal amount outstanding to be repaid in equal monthly cash amortization payments between the fourth and the sixth anniversary of the effective date of the agreement. We calculated the fair value of the Disbursement Option using a discounted cash flow model, under which estimated cash flows were discounted using a risk-adjusted rate that aligns with the lender’s estimated credit risk to disburse the $50.0 million. We estimated the relative fair value of the Disbursement Option to be $7,609 as of the effective date of the transaction, which we recorded as a long-term asset on our balance sheet to be carried at that cost until settlement. Common Stock Consideration Pursuant to the terms of the Securities Purchase Agreement, we issued 3,127,846 shares of our common stock to Deerfield at a price of $13.50 on January 5, 2018. Based on our closing stock price on January 5, 2018, of $16.45, the fair value of this consideration was $51,452, which was recorded as additional paid-in capital in stockholders’ equity. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | NOTE 5 – FAIR VALUE MEASUREMENTS The following table lists our assets and liabilities that are measured at fair value and the level of inputs used to measure their fair value at March 31, 2018, and December 31, 2017. The money market fund is included in cash & cash equivalents on the balance sheet; the other items are in the captioned line of the balance sheet. As of March 31, 2018 Level 1 Level 2 Level 3 Total Assets: Money market fund $ 73,977 $ - $ - $ 73,977 Total assets at fair value $ 73,977 $ - $ - $ 73,977 Liabilities: Royalty liability in current deferred purchase price $ - $ - $ (1,330 ) $ (1,330 ) Royalty liability in noncurrent deferred purchase price - - (13,891 ) (13,891 ) Contingent milestone payments - - (27,184 ) (27,184 ) Royalty liability in other long-term liabilities - - (1,624 ) (1,624 ) Common stock warrants - - (9,179 ) (9,179 ) Total liabilities at fair value $ - $ - $ (53,208 ) $ (53,208 ) As of December 31, 2017 Level 1 Level 2 Level 3 Total Assets: Money market fund $ 76,777 $ - $ - $ 76,777 Total assets at fair value $ 76,777 $ - $ - $ 76,777 The common stock warrants were valued using a Black-Scholes option-pricing model and Level 3 unobservable inputs. The significant unobservable inputs include the risk-free interest rate, remaining contractual term, and expected volatility. Significant increases or decreases in any of these inputs in isolation would result in a significantly different fair value measurement. An increase in the risk-free interest rate, and/or an increase in the remaining contractual term or expected volatility, would result in an increase in the fair value of the warrants. The following tables summarize the changes in fair value of our Level 3 assets and liabilities for the three months ended March 31, 2018: Level 3 Liabilities Fair Value at December 31, 2017 Realized Gains (Losses) Change in Unrealized Gains (Losses) (Issuances) Settlements Net Transfer (In) Out of Level 3 Fair Value at March 31, 2018 Royalty liability in current deferred purchase price $ - $ - $ (152 ) $ (1,178 ) $ - $ (1,330 ) Royalty liability in noncurrent deferred purchase price - - (1,475 ) (12,416 ) - (13,891 ) Contingent milestone payments - - (1,217 ) (25,967 ) - (27,184 ) Royalty liability in other long-term liabilities - - (152 ) (1,472 ) - (1,624 ) Common stock warrants - - 24,085 (33,264 ) - (9,179 ) Total liabilities at fair value $ - $ - $ 21,089 $ (74,297 ) $ - $ (53,208 ) |
Shareholders Equity
Shareholders Equity | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Shareholders Equity | NOTE 6 – SHAREHOLDERS EQUITY Under our certificate of incorporation, we are authorized to issue up to 5,000,000 shares of preferred stock and 80,000,000 shares of common stock. There was no outstanding preferred stock as of March 31, 2018, or December 31, 2017. Holders of our common stock are not entitled to receive dividends, unless declared by the board of directors. There have been no dividends declared to date. We have reserved and keep available out of our authorized but unissued common stock a sufficient number of shares of common stock to affect the conversion of all issued and outstanding warrants and stock options. Outstanding common stock as of March 31, 2018, and December 31, 2017, was 31,353,254 and 21,998,942, respectively. On January 5, 2018, we issued 3,313,702 shares of common stock to Medicines as part of the purchase price of IDB (See Note 11 for further discussion.). We also issued 3,127,846 shares of common stock and warrants to purchase 3,792,868 shares of common stock to Deerfield as part of the Facility Agreement (see Note 4 for further discussion). In conjunction with the IDB transaction, we received $40,000 in additional equity financing from existing and new investors. We issued 2,884,961 shares of common stock in exchange for the equity financing. During the three months ended March 31, 2018, we issued 27,803 shares of common stock for restricted stock units that vested in the period. Warrants We have warrants to purchase our common stock outstanding at March 31, 2018, as follows: Issued Warrants Outstanding Exercise price Expiration August 2011 18,979 $ 30.00 August 2018 February 2012 42 $ 17,334.07 February 2019 December 2014 33,788 $ 33.30 December 2024 December 2015 6,757 $ 33.30 December 2024 January 2018 3,792,868 $ 16.50 January 2025 |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation | NOTE 7 – STOCK-BASED COMPENSATION 2006 Stock Plan —Upon closing the merger with Cempra on November 3, 2017, Melinta assumed the 2006 Stock Plan, which had been adopted by Cempra in January 2006 (“the 2006 Plan”). The 2006 Plan provided for the granting of incentive share options, nonqualified share options and restricted shares to Company employees, representatives and consultants. As of March 31, 2018, there were options for an aggregate of 68,273 shares issued and outstanding under the 2006 Plan. During the period January 1, 2018, to March 31, 2018, 91 options were forfeited; there was no other activity during the period. 2011 Equity Incentive Plan —Upon closing the merger with Cempra on November 3, 2017, Melinta assumed the 2011 Equity Incentive Plan, which had been adopted by Cempra in October 2011 (the “2011 Incentive Plan”). On January 1, 2018, under the evergreen feature of the 2011 Incentive Plan, the authorized shares under the 2011 Incentive Plan increased by 879,957 to 2,619,447, and, as of March 31, 2018, there were 1,666,119 shares available under the 2011 Incentive Plan to award as either options or restricted stock units. Private Melinta 2011 Equity Incentive Plan —In November 2011, the Melinta board of directors adopted the 2011 Equity Incentive Plan (“Melinta 2011 Plan”). The Melinta 2011 Plan provided for the granting of incentive stock options, nonqualified options, stock grants, and stock-based awards to employees, directors, and consultants of the Company. On November 3, 2017, in conjunction with the merger with Cempra, all outstanding options under the Melinta 2011 Plan converted to 732,499 options to purchase common shares of Cempra (re-named Melinta in the merger), the Melinta 2011 Plan was frozen and authorized shares under the Melinta 2011 Plan were reduced to 732,499. Any grants under the Melinta 2011 Plan that expire or are forfeited will reduce the authorized shares under the plan. As of March 31, 2018, we had 667,702 shares of common stock reserved under the Melinta 2011 Plan for issuance upon exercise of stock options. Inducement Grant —On November 3, 2017, Melinta granted Daniel Wechsler, our President and Chief Executive Officer, an option to purchase 550,981 shares of common stock, at a strike price of $11.65 per share, and 183,661 restricted stock units, pursuant to the option and restricted stock unit inducement agreements made with Mr. Wechsler. Both grants will vest over four years, 25% after one year and then ratably monthly over the remaining 36 months. Stock Option Activity —The exercise price of each stock option issued under all of the stock plans is specified by the board of directors at the time of grant, but cannot be less than 100% of the fair market value of the stock on the grant date. In addition, the vesting period is determined by the board of directors at the time of the grant and specified in the applicable option agreement. Our practice is to issue new shares upon the exercise of options, unless it is a cashless exercise. A summary of the combined activity under the 2011 Incentive Plan and the Melinta 2011 Plan is presented in the table below: Weighted Weighted Average Average Aggregate Number of Exercise Contractual Intrinsic Options Price Term (in years) Value Outstanding - January 1, 2018 1,441,714 $ 43.11 Granted - $ - Exercised (203 ) $ 15.61 Forfeited (64,194 ) $ 32.25 Expired (9,422 ) $ 36.84 Outstanding - March 31, 2018 1,367,895 $ 43.67 4.8 $ - Exercisable - March 31, 2018 1,056,971 $ 49.19 3.7 $ - Vested and expected to vest at March 31, 2018 1,367,895 $ 43.67 4.8 $ - During the three months ended March 31, 2018, 7,600 restricted stock units vested and 12,600 restricted stock units forfeited. There was no other restricted stock activity in the period. There were 96,800 restricted stock units outstanding under the two plans at March 31, 2018. In addition, the awards given under the inducement grant were also outstanding. Stock-based compensation expense recognized in the three months ended March 31, 2018, was as follows: March 31, March 31, 2018 2017 Manufacturing $ 125 $ - Research and development 131 146 Selling, general and administrative 699 426 Total $ 955 $ 572 Stock-based compensation expense recorded in manufacturing is capitalized in inventory as a component of overhead expense and recognized as cost of goods sold based on inventory turns. $75 of accelerated vesting expense related to employee terminations is included in selling, general and administrative expenses. No related tax benefits associated with stock-based compensation expense have been recognized and no related tax benefits have been realized from the exercise of stock options due to our net operating loss carryforwards. In April 2018, we granted stock options to purchase 1,628,767 shares of common stock under the 2011 Incentive Plan at an exercise price of $7.45. Subject to, and contingent upon, shareholder approval at the annual meeting scheduled for June 2018, we also granted stock options to purchase 865,267 shares of common stock, with an exercise price of $7.45, under a newly established plan, the Melinta 2018 Incentive Stock Plan (the “2018 Plan”). If approved by shareholders, the 2018 Plan will replace the 2011 Incentive Plan, and no further equity awards will be granted from the 2011 Incentive Plan. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 8 – INCOME TAXES At the end of each interim period, the Company makes its best estimate of the effective tax rate expected to be applicable for the full calendar year and uses that rate to provide for income taxes on a current year-to-date basis before discrete items. If a reliable estimate cannot be made, the Company may make a reasonable estimate of the annual effective tax rate, including use of the actual effective rate for the year-to-date. The impact of the discrete items is recorded in the quarter in which they occur. The Company utilizes the liability method of accounting for income taxes and deferred taxes which are determined based on the differences between the financial statements and tax basis of assets and liabilities given the provisions of the enacted tax laws. In assessing the realizability of the deferred tax assets, the Company considered whether it is more likely than not that some portion or all of the deferred tax assets will not be realized through the generation of future taxable income. In making this determination, the Company assessed all of the evidence available at the time including recent earnings, forecasted income projections, and historical financial performance. The Company has fully reserved deferred tax assets as a result of this assessment. Based on the Company’s full valuation allowance against the net deferred tax assets, the Company’s effective tax rate for the calendar year is zero and zero income tax expense is recorded in the three months ended March 31, 2018. On November 3, 2017, we completed our tax-free merger with Cempra. To reflect the opening balance sheet deferred tax assets and liabilities of Cempra, we recorded a net deferred tax asset of $107,688 offset with a valuation allowance of $107,688. Under ASC 805, Business Combinations On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the “Act”) was signed into law making significant changes to the Internal Revenue Code. Changes include, but not limited to, a corporate tax decrease from 34% to 21% effective for tax years beginning after December 31, 2017, limitation of the business interest deduction, modification of the net operating loss deduction, reduction of the business tax credit for qualified clinical testing expenses for certain drugs for rare diseases or conditions, and acceleration of depreciation for certain assets placed into service after September 27, 2017. On December 22, 2017, the Securities and Exchange Commission (“SEC”) staff issued Staff Accounting Bulletin No. 118 (“SAB 118”), which provides guidance on accounting for the tax effects of the Act. SAB 118 provides a measurement period that should not extend beyond one year from the Act enactment date for companies to complete the accounting under ASC 740, Income Taxes We have calculated our best estimate of the impact of the Act in our 2017 income tax provision in accordance with our understanding of the Act and guidance available, and, as a result, as of December 31, 2017, have recorded $44,438 as an additional income tax expense offset with $44,438 tax benefit from the change in the valuation allowance in the fourth quarter of 2017, the period in which the legislation was enacted. The adjustments to deferred tax assets and liability are provisional amounts estimated based on information available as of December 31, 2017. We have not updated our estimates as of March 31, 2018, nor have we recorded any additional income tax expense or valuation allowance based on our net loss for the period. As we collect and prepare necessary data and interpret the Act—and any additional guidance issued by the U.S. Treasury Department, the Internal Revenue Service and other standard-setting bodies—we may make adjustments to the provisional amounts. We will recognize any changes to the provisional amounts as we refine our estimates of our cumulative temporary differences related to Cempra’s opening balance sheet from the Merger, in accordance with ASC 805. |
Net Loss Per Share
Net Loss Per Share | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | NOTE 9 –NET LOSS PER SHARE Basic net loss attributable to common shareholders per share is computed by dividing the net loss attributable to common shareholders by the weighted-average number of common shares outstanding for the period. Prior to the merger with Cempra, during periods when we earned net income, we would allocate to participating securities a proportional share of net income determined by dividing total weighted-average participating securities by the sum of the total weighted-average common shares and participating securities (the “two-class method”). Historically, our preferred stock participated in any dividends declared by us and were therefore considered to be participating securities. Participating securities have the effect of diluting both basic and diluted earnings per share during periods of income. During periods where we incur net losses, we allocate no loss to participating securities because they have no contractual obligation to share in our losses. We compute diluted loss per common share after giving consideration to the dilutive effect of stock options and warrants that are outstanding during the period, except where such nonparticipating securities would be antidilutive. Because we have reported net losses for the three months ended March 31, 2018 and 2017, diluted net loss per common share is the same as basic net loss per common share for those periods. The weighted-average shares outstanding, reported loss per share and potential dilutive common share equivalents for the three months ended March 31, 2017, have been retrospectively adjusted to reflect historical weighted-average number of common shares outstanding multiplied by the exchange ratio established in the merger with Cempra. The following potentially dilutive securities (in common stock equivalent shares) have been excluded from the computation of diluted weighted-average shares outstanding because such securities have an antidilutive impact due to losses reported: Three Months Ended March 31, 2018 2017 Warrants outstanding 3,852,434 31,702 Stock options outstanding 1,987,149 545,556 Restricted stock units outstanding 280,461 - Convertible preferred stock outstanding - 5,800,922 6,120,044 6,378,180 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 10 – COMMITMENTS AND CONTINGENCIES As discussed in Note 11, on November 3, 2017, Melinta merged with Cempra, Inc. in a business combination. Prior to the merger, o n November 4, 2016, a securities class action lawsuit was commenced in the United States District Court, Middle District of North Carolina, Durham Division, naming Cempra, Inc. (now known as Melinta Therapeutics, Inc.) (for purposes of this Contingencies section, “Cempra”) and certain of Cempra’s officers as defendants. Two substantially similar lawsuits were filed in the United States District Court, Middle District of North Carolina on November 22, 2016, and December 30, 2016, respectively. Pursuant to the Private Securities Litigation Reform Act, on July 6, 2017, the court consolidated the three lawsuits into a single action and appointed a lead plaintiff and co-lead counsel in the consolidated case. On August 16, 2017, the plaintiff filed a consolidated amended complaint. Plaintiff alleges violations of the Securities Exchange Act of 1934 (the “Exchange Act”) in connection with allegedly false and misleading statements made by the defendants between July 7, 2015, and November 4, 2016 (the “Class Period”). Plaintiff seeks to represent a class comprised of purchasers of Cempra’s common stock during the Class Period and seeks damages, costs and expenses and such other relief as determined by the court. On September 29, 2017, the defendants filed a motion to dismiss the consolidated amended complaint. On November 13, 2017, the plaintiff filed an opposition to the defendants’ motion to dismiss the consolidated amended complaint. On December 4, 2017, the defendants filed a reply brief. The motion remains pending and oral argument has yet to be scheduled. We believe that we have meritorious defenses and we intend to defend the lawsuit vigorously. It is possible that similar lawsuits may yet be filed in the same or other courts that name the same or additional defendants. On December 21, 2016, a shareholder derivative lawsuit was commenced in the North Carolina Durham County Superior Court, naming certain of Cempra’s former and current On January 3, 2018, the plaintiff who commenced the February 2017 Action, which was subsequently consolidated into the December 2016 Action, transmitted to the former Acting Chief Executive Officer of Cempra a litigation demand (the “Demand”). The Demand requested that Cempra’s Board of Directors (the “Board”) “commence an independent investigation into the matters raised” in the complaint filed in the February 2017 Action and the Demand, “take any and all appropriate steps for Cempra to recover, through litigation if necessary, the damages proximately caused by the directors' and officers' alleged breaches of fiduciary duty,” and “implement corporate governance enhancements to prevent recurrence of the alleged wrongdoing.” The Board has not yet formally responded to the Demand. On July 31, 2017, a shareholder derivative lawsuit was commenced in the Court of Chancery of the State of Delaware, naming certain of Cempra’s former and current officers and directors as defendants and Cempra as nominal defendant, and asserting claims for breach of fiduciary duty, unjust enrichment, and corporate waste. The complaint is based on similar allegations as asserted in the putative securities class action described above, and seeks unspecified damages and attorneys’ fees. On October 23, 2017, the defendants filed a motion to dismiss or, in the alternative, stay, the complaint, which was supported by an opening brief filed on November 9, 2017. On January 8, 2018, the plaintiff filed his answering brief in opposition to the defendants’ motion. The defendants filed their reply in support of their motion on February 7, 2018. Oral argument on the motion is scheduled for June 22, 2018. We believe that we have meritorious defenses and we intend to defend the lawsuit vigorously. It is possible that similar lawsuits may yet be filed in the same or other courts that name the same or additional defendants. On September 15, 2017, a shareholder derivative lawsuit was commenced in the United States District Court for the Middle District of North Carolina, Durham Division, naming certain of Cempra’s former and current officers and directors as defendants and Cempra as nominal defendant, and asserting claims for breach of fiduciary duty, unjust enrichment, abuse of control, gross On September 27, 2017, and October 6, 2017, putative class action complaints were filed against Cempra, members of its board of directors and Melinta Therapeutics, Inc. (now known as Melinta Subsidiary Corp.) (for the purposes of this Contingencies section, “Melinta”) on behalf of the public stockholders of Cempra in the United States District Court for the Middle District of North Carolina. The complaints allege that the preliminary proxy statement issued in connection with the proposed merger between Cempra and Melinta omitted material information in violation of Sections 14(a) and 20(a) of the Exchange Act, rendering the preliminary proxy statement false and misleading. On February 7, 2018, the plaintiffs and the defendants executed a settlement agreement that resolved plaintiffs’ claims with prejudice as to the named plaintiffs and without prejudice to any other member of the putative class. We paid attorneys’ fees of $263 in connection with settlement of the actions. Other than as described above, we are not a party to any legal proceedings and we are not aware of any claims or actions pending or threatened against us. In the future, we might from time to time become involved in litigation relating to claims arising from our ordinary course of business. |
Business Combinations
Business Combinations | 3 Months Ended |
Mar. 31, 2018 | |
Business Combinations [Abstract] | |
Business Combinations | NOTE 11 – BUSINESS COMBINATIONS Acquisition of the Infectious Disease Business On January 5, 2018, we completed the acquisition of the IDB, in which we acquired a group of antibiotic drug products and certain other assets from Medicines, including 100% of the capital stock of certain subsidiaries and the pharmaceutical products containing (i) meropenem and vaborbactam as the active pharmaceutical ingredient and distributed under the brand name Vabomere, (ii) oritavancin as the active pharmaceutical ingredient and distributed under the brand name Orbactiv and (iii) minocycline as the active pharmaceutical ingredient and distributed under the brand name Minocin for injection and line extensions of such products. The integration of the acquired products within our existing portfolio further strengthens our ability to serve the needs of providers treating patients with serious bacterial infections across the healthcare delivery continuum. In addition to the products acquired in the IDB transaction, we added approximately 135 individuals from Medicines to our team. The new team members bring with them significant experience specific to infectious diseases and better position us to effectively execute our commercial and other activities. The acquisition was financed using borrowings under the Facility Agreement and additional equity financing from existing and new investors. See Note 4 for further information regarding these financing arrangements. Expenses related to legal and other services in connection with the IDB acquisition were $2,600 and $1,900 in the fourth quarter of 2017 and the first quarter of 2018, respectively. The expenses incurred in the first quarter of 2018 included $900 related to certain transition services that Medicines agreed to provide to us to facilitate transition and integration of the IDB. The transition services included the temporary provision of facilities and equipment for newly hired personnel, assistance with finance functions and support in connection with the transition of the supply, sale and distribution of the products to our third-party logistics provider. We expect these transition services will be completed by the end of the second quarter of 2018. The purchase price paid to Medicines consisted of a cash payment of $166,383 and 3,313,702 shares of our common stock, which was calculated by dividing The purchase price, including non-cash consideration, for the acquisition of IDB is as follows: • Cash of $166,383, including a net working capital adjustment of $1,383; • Common stock of $54,510; • Deferred consideration of $39,167, representing the present value of two payments of $25,000 each due in January and July 2019; and • Contingent consideration of $14,000, representing the fair value of sales-based royalty payments. We recorded the contingent consideration related to the sales-based royalty payments at fair value, and we are accreting the amount to the estimated amounts payable to Medicines based on an effective interest of rate of 40% which is in line with the effective interest rate used to accrete the royalty liability associated with the Facility Agreement. During the first quarter of 2018, we recorded $1,627 of non-cash interest expense related to the accretion of the fair value of sales-based royalty payments. At March 31, 2018, $406 of the royalty liability became currently due and was reclassified out of current deferred purchase price and recorded as a credit offset to receivables from Medicines in other receivables. At March 31, 2018, the carrying values of the short-term and long-term liabilities were $1,330 and $13,891, respectively. We are currently in the process of finalizing the valuation of the significant acquired intangible assets, deferred and contingent purchase consideration and related deferred tax liabilities, which will be completed in 2018. The goodwill resulting from the acquisition largely consists of the estimated value of IDB’s assembled and trained workforce, our expected future product sales, synergies resulting from combining IDB products with our existing product offering and IDB’s going concern value. The following table sets forth the preliminary purchase price allocation, as of the acquisition date. Current assets $ 28,299 Goodwill 13,059 Intangible assets 258,000 Non-current assets 12,278 Current liabilities (37,000 ) Non-current liabilities (576 ) Total purchase price $ 274,060 We believe that the historical values of IDB’s current assets and current liabilities approximate their fair values based on the short-term nature of such items. IDB’s current liabilities include a contingent liability of $25,967, representing the present value of a $30,000 milestone payment payable third parties upon the approval of Vabomere in Europe. During the first The accretion is based on an effective interest rate of 19.82% which is consistent with the interest rate associated with the Facility Agreement. We recorded the two $25,000 deferred payments to Medicines at fair value, and we are accreting them to $50,000 based on an effective interest rate of 19.82%. During the first quarter of 2018, we recorded $1,835 of non-cash interest expense related to the accretion of these deferred payments. At March 31, 2018, the carrying values of the short-term and long-term liabilities were $21,500 and $19,502, respectively. The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives as of the date of the acquisition: Average useful life Fair value Developed product rights 13 $ 238,000 In-process research and development Indefinite 20,000 Total intangible assets $ 258,000 For the three months ended March 31, 2018, IDB added $9,514 of revenue to our unaudited consolidated results. It is impracticable to measure the effect IDB had on our net loss for the three months ended March 31, 2018, because IDB has been integrated into our existing operations and is not accounted for separately. Since the date of the acquisition, IDB’s results are reflected in our unaudited consolidated financial statements. Merger with Cempra Cempra’s results have been reflected in our consolidated financial statements since the date of our merger with them on November 3, 2017. As a result, we added $2,658 of grant income to our unaudited consolidated results of operations in the first quarter of 2018. We also incurred an additional $217 of acquisition-related expense in the first quarter of 2018 related to the merger with Cempra. It is impracticable to measure the effect Cempra had on our net loss for the three months ended March 31, 2018, because Cempra has been integrated into our existing operations and is not accounted for separately. Pro Forma Financial Information The following unaudited pro forma information shows our results of operations as if the acquisition of IDB and merger with Cempra had been completed as of the beginning of fiscal 2017. Adjustments have been made for the pro forma effects of Topic 606, interest expense and accretion related to the financing of the business combinations, loss on extinguishment of debt, accretion expense related to the IDB acquisition deferred and contingent payments, the bargain purchase gain recognized in the Cempra merger, transaction costs, amortization of intangible assets recognized as part of the business combinations and the fair value gain on the warrant liability. Three Months Ended March 31, 2017 Pro forma revenue $ 29,214 Pro forma net loss $ (53,863 ) |
Severance
Severance | 3 Months Ended |
Mar. 31, 2018 | |
Restructuring And Related Activities [Abstract] | |
Severance | NOTE 12 – SEVERANCE In connection with the merger with Cempra, several employees were terminated under established individual employment plans and a corporate-wide severance plan. The legacy Cempra entity had put in place a severance plan that provided severance benefits to employees who, in connection with a change-in-control event, either were terminated or resigned due to having a diminished role going forward with the combined company. Most of the affected employees were notified that they would be terminated in connection with the change-in-control event in advance of the merger, and the Company recognized the associated severance costs when the liability became probable, which was after the merger closed. The postemployment benefits for the individuals include continued salary and benefits for a period of time determined by historical length of service to, and role with, the Company (up to six months for non-executives, 18 months for executives, and 24 months for the CEO), outplacement services and contractual or prorated bonuses. While all the affected employees were notified before or immediately after the merger, some of the termination dates were extended into 2018. A summary of activity in our severance accrual (included in accrued expenses or long-term liabilities on the consolidated balance sheets) is below. Balance - December 31, 2017 $ 6,721 Additional severance accruals 1,532 Bonus to be paid as severance 223 Severance payments (3,423 ) Balance - March 31, 2018 $ 5,053 On March 31, 2018, $4,243 was included in accrued expenses and $810 was included in long-term liabilities. We also recognized $75 of additional stock-based compensation expense related to the acceleration of equity awards for terminated employees under ASC 718 as severance expense during the three months ended March 31, 2018. |
Summary of Significant Accoun18
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation —The accompanying unaudited consolidated financial statements include the accounts and results of operations of Melinta and its wholly-owned subsidiaries. The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The information reflects all adjustments (consisting of only normal, recurring adjustments) necessary for a fair presentation of the information. All intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates —The preparation of these unaudited consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Trade and Other Receivables | Trade and Other Receivables —Trade receivables consist of amounts billed for product shipments. Receivables for product shipments are recorded as shipments are made and title to the product is transferred to the customer. Other receivables consist of amounts billed, and amounts earned but unbilled, under our licensing agreements and our contracts with the Biomedical Advanced Research and Development Authority of the U.S. Department of Health and Human Services (“BARDA”) We carry our receivables less an allowance for doubtful accounts. On a periodic basis, we evaluate our receivables for collectability. We have not recorded an allowance for doubtful accounts as we believe all receivables are fully collectible. |
Concentration of Credit Risk | Concentration of Credit Risk —Concentration of credit risk exists with respect to cash and cash equivalents and receivables. We maintain our cash and cash equivalents with federally insured financial institutions, and at times, the amounts may exceed the federally insured deposit limits. To date, we have not experienced any losses on our deposits of cash and cash equivalents. We believe that we are not exposed to significant credit risk due to the financial position of the depository institutions in which deposits are held. Until we transition the management of our order-to-sales process for Vabomere™, Minocin ® ® |
Inventory | Inventory —Inventory is stated at the lower of cost or estimated net realizable value. Inventory is valued on a first-in, first-out basis and consists primarily of third-party manufacturing costs, overhead—principally the cost of managing our manufacturers—and related transportation costs. We capitalize inventory upon regulatory approval when, based on our judgment, future commercialization is considered probable and future economic benefit is expected to be realized; otherwise, such costs are expensed. We review inventories on hand at least quarterly and record provisions for estimated excess, slow-moving and obsolete inventory, as well as inventory with a carrying value in excess of net realizable value. As of March 31, 2018, we had recorded no reserves for our inventory. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments —The carrying amounts of our financial instruments, which include cash and cash equivalents, trade and other receivables, accounts payable, accrued expenses, notes payable, royalty liability and common stock warrants, approximated their fair values at March 31, 2018, and December 31, 2017. |
Debt Issuance Costs | Debt Issuance Costs —Debt issuance costs represent legal and other direct costs incurred in connection with our notes payable. These costs were either recorded as debt issuance costs in the balance sheets at the time they were incurred, or as a contra-liability included in the notes payable line item, and amortized as a non-cash component of interest expense using the effective interest method over the term of the note payable. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets —Long-lived assets consist primarily of property and equipment and intangible assets. We record impairment losses on long-lived assets used in operations when events and circumstances indicate that the carrying amount of an asset or group of assets may not be fully recoverable. We have not recorded any significant impairment charges to date with respect to our long-lived assets. |
Intangible Assets | Intangible Assets —Intangible assets consist of capitalized milestone payments for the licenses we use to make our products and the fair value of identifiable intangible assets, including in-process research and development (“IPRD”), acquired in the IDB transaction. We amortize the cost of intangible assets on a straight-line basis over the estimated economic life of each asset, generally the exclusivity period of each associated product. Amortization for IPRD does not begin until the associated product has received approval and sales have commenced. |
Revenue Recognition | Revenue Recognition —On January 1, 2018, we adopted Accounting Standards Update (“ASU” or “Update”) 2014-09, Revenue from Contracts with Customers (Topic 606) , and all related amendments. For further information regarding the adoption of Topic 606, see the “Recently Issued and Adopted Accounting Pronouncements” section of this Note 2. Topic 606 outlines a single comprehensive model to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance. The core principle of this new revenue recognition guidance is that a company will recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. Topic 606 defines the following five-step process to achieve this core principle, and in doing so, it is possible that significant judgment and estimates may be required within the revenue recognition process. 1) identify the contract(s) with a customer; 2) identify the performance obligations in the contract; 3) determine the transaction price; 4) allocate the transaction price to the performance obligations in the contract; and 5) recognize revenue when (or as) the entity satisfies a performance obligation. The new guidance only applies the five-step model to arrangements that meet the definition of a contract under Topic 606, including the consideration of whether it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of Topic 606, we assess the goods or services promised within each contract and determine those that are performance obligations; the assessment includes the evaluation of whether each promised good or service is distinct within the context of the contract. Under Topic 606, we recognize revenue separately for performance obligations that are “distinct.” Performance obligations are considered to be distinct if (a) the customer can benefit from the license or services either on its own or together with other resources that are readily available to the customer, and (b) our promise to transfer the license or services is separately identifiable from other promises in the contract. If a license or service is not individually distinct, we combine the license or service with other promised licenses and/or services until we identify a bundle of licenses and/or services that together are distinct. We recognize, as revenue, the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. In determining the transaction price, we consider all forms of variable consideration, which can take various forms, including, but not limited to, prompt-pay discounts, rebates, credits, and milestone payments. We estimate variable consideration using either the “expected value” or “most likely amount” method, depending on which method better predicts the amount of consideration to which we will be entitled. The expected value method is a probability-weighted approach that considers all possible outcomes while the most likely approach uses the single most likely amount in a range of possible outcomes. We apply a variable consideration constraint to the estimated transaction price if we conclude that it is probable that there is a risk of significant reversal of revenue once the uncertainty related to the variable consideration is resolved. Under the guidance of Topic 606, we recognize revenue for each performance obligation when the customer obtains control of the product and we have satisfied each of our respective obligations. Control is defined as the ability of the customer to direct the use of and obtain substantially all the benefits of the asset. In addition, as of March 31, 2018, we do not have any contract assets or liabilities and our contracts do not have any significant financing components. And, we generally do not capitalize contract origination costs. Licensing Arrangements We enter into license and collaboration agreements for the research and development and/or commercialization of therapeutic products. The terms of these agreements may include nonrefundable licensing fees, funding for research, development and manufacturing, milestone payments and royalties on any product sales derived from the collaborations in exchange for the delivery of licenses and rights to sell our products within specified territories outside the United States. In the determination of whether our license and collaboration agreements are accounted for under Topic 606 or Accounting Standards Classification (“ASC”) 808, Contract Accounting Our license agreements may include contingent or variable consideration based upon the achievement of regulatory- and sales-based milestones and future royalties based on a percentage of the partner’s net product sales. Performance obligations to deliver distinct licenses are recognized at a point in time. Milestone payments from licensees that are contingent and/or variable upon future regulatory events and product sales are not considered probable of being achieved until the milestones are earned and, therefore, the contingent revenue is subject to significant risk of reversal. As such, we constrain this variable consideration and do not include it in the transaction price (or recognize the revenue related to these milestones) until such time that the contingencies are resolved and generally recognized at a point in time. In addition, under the sales- or usage- based royalty exception in Topic 606, we do not estimate, at the onset of the arrangement, the variable consideration from future royalties or sales-based milestones. Instead, we wait to recognize royalty revenue until the future sales occur. Adoption of Topic 606 We adopted Topic 606 on January 1, 2018, using the modified retrospective method applied to those contracts which were not complete as of January 1, 2018. Results for reporting periods beginning after January 1, 2018, are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with legacy U.S. GAAP under ASC 605. In our adoption of Topic 606, we did not use practical expedients. In addition, we have considered the nature, amount and timing of our different revenue sources. Accordingly, the disaggregation of revenue from contracts with customers is reflected in different captions within the condensed consolidated statement of operations. For our Eurofarma distribution arrangements under which revenue was previously deferred, revenue is now recognized at the point in time when the license is granted and has benefit to Eurofarma. These deferred revenues were originally expected to be recognized in future periods over the period of time over which we supplied Baxdela under the supply arrangement, which could have lasted up to 10 years or longer. The cumulative effect of the adoption was recognized as a decrease to opening accumulated deficit and a decrease to deferred revenue of $10,008 on January 1, 2018. The effect of the adoption of Topic 606 on our condensed consolidated balance sheet is as follows: Balance at December 31, 2017 Adjustments Due to Topic 606 Balance at January 1, 2018 Liabilities: Deferred revenue $ 10,008 $ (10,008 ) $ - Shareholders’ Equity: Accumulated deficit $ (572,659 ) $ 10,008 $ (562,651 ) In connection with the adoption of Topic 606, we no longer recognize grant income as revenue (see Grant Income discussion below), but there was no change to the timing of historical recognition. Also, there was no change to the timing of recognition of contract revenue under our licensing agreements. However, unlike Topic 606, we believe that ASC 605 would have precluded revenue recognition for the recent launches of Baxdela and Vabomere for the initial stocking of product at wholesalers that had not sold through as of the end of the first quarter of 2018. As such, the following reflects what we believe our condensed consolidated balance sheet and condensed consolidated statement of operations would have been under ASC 605 compared to the recognition of revenue under Topic 606 as of, and for the three months ended, March 31, 2018: Revenue Recognized Adjustments Due to Topic 606 Pro Forma Revenue Under ASC 605 Revenue: Product sales, net $ 11,846 $ (2,218 ) $ 9,628 Cost of goods sold $ 7,686 $ (1,054 ) $ 6,632 Net loss $ (29,432 ) $ (1,164 ) $ (30,596 ) Net loss per share $ (0.95 ) $ (0.99 ) Balance at March 31, 2018 Adjustments Due to Topic 606 Pro Forma Balance Under ASC 605 Assets: Prepaid and other current assets $ 7,322 $ 1,054 $ 8,376 Liabilities: Deferred revenue $ - $ 2,218 $ 2,218 Shareholders’ equity: Accumulated deficit $ (592,083 ) $ (1,164 ) $ (593,247 ) The table above does not reflect the reclassification of Grant income from Other income to Revenue under ASC 605. The reclassification would have no effect on net loss per share. With respect to outstanding performance obligations, we had none as of January 1, 2018. Although we have agreements in place to supply Baxdela to our partners once they achieve regulatory approval in their respective territories, we concluded that the option to purchase Baxdela from us is not a material right because the product will not be priced at a significant discount. All performance obligations under our licensing arrangements were satisfied historically at a point in time. Variable consideration in the form of regulatory and sales-based milestones, which are payable under the terms of our licensing arrangements, has been constrained because of the risk of significant revenue reversal as in our revenue recognition policy included in Note 2. Further, we recognize contract research revenue from Menarini as we incur the reimbursable development costs. We expect to continue these development efforts through early 2019, and we expect the related revenue to be consistent with the previous several quarters. Product Sales Historically, substantially all our revenue was related to licensing and contract research arrangements related to our Baxdela product, and we did not sell any products. Beginning in January of 2018, as a result of both the acquisition of IDB and the launch of Baxdela, we now distribute Baxdela, Orbactiv, Minocin and Vabomere products commercially in the United States. The majority of our product sales are made directly to wholesale customers who subsequently resell our products to hospitals or certain medical centers, as well as specialty pharmacy providers and other retail pharmacies. The wholesaler places orders with us for sufficient quantities of our products to maintain an appropriate level of inventory based on their customers’ historical purchase volumes and demand. We recognize revenue once we have transferred physical possession of the goods and the wholesaler obtains legal title to the product and accepts responsibility for all credit and collection activities with the resale customer. In addition to distribution agreements with wholesaler customers, we enter into arrangements with health care providers and payers that provide for government mandated and/or privately negotiated rebates, chargebacks and discounts with respect to the purchase of our products. The transaction price reflects the amount we expect to be entitled to in connection with the sale and transfer of control of product to our customers. Variable consideration is only included in the transaction price, to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. At the time the customer takes control of the product, which is when our performance obligation under the sales contracts is complete, we record product revenues net of applicable reserves for various types of variable consideration, most of which are subject to constraint while also considering the likelihood and the magnitude of any revenue reversal, based on our estimates of channel mix. The types of variable consideration in our product revenue are as follows: • Prompt pay discounts • Product returns • Chargebacks and rebates • Fee-for-service • Government rebates • Commercial payer rebates • Group Purchasing Organization (“GPO”) administration fees • MelintAssist voluntary patient assistance programs In determining the amounts of certain allowances and accruals, we must make significant judgments and estimates. For example, in determining these amounts, we estimate hospital demand, buying patterns by hospitals, hospital systems and/or group purchasing organizations from wholesalers and the levels of inventory held by wholesalers and customers. Making these determinations involves analyzing third party industry data to determine whether trends in historical channel distribution patterns will predict future product sales. We receive data periodically from our wholesale customers on inventory levels and historical channel sales mix, and we consider this data when determining the amount of the allowances and accruals for variable consideration. The amount of variable consideration is estimated by using either of the following methods, depending on which method better predicts the amount of consideration to which we are entitled: a) The “expected value” is the sum of probability-weighted amounts in a range of possible consideration amounts. Under Topic 606, an expected value may be an appropriate estimate of the amount of variable consideration if we have many contracts with similar characteristics. b) The “most likely amount” is the single most likely amount in a range of possible consideration amounts (i.e., the single most likely outcome of the contract). Under Topic 606, the most likely amount may be an appropriate estimate of the amount of variable consideration if the contract has only two possible outcomes (i.e., either achieve or don’t achieve a threshold specified in a contract). The method selected is applied consistently throughout the contract when estimating the effect of an uncertainty on an amount of variable consideration. In addition, we consider all the information (historical, current, and forecasts) that is reasonably available to us and shall identify a reasonable number of possible consideration amounts. The relevant factors used in this determination include, but are not limited to, current contractual and statutory requirements, specific known market events and trends, industry data, and forecasted customer buying and payment patterns. In assessing whether a constraint is necessary, we consider both the likelihood and the magnitude of the revenue reversal. Actual amounts of consideration ultimately received may differ from our estimates. If actual results in the future vary from our estimates, we adjust these estimates, which would affect net product revenue and earnings in the period such variances become known. The specific considerations we use in estimating these amounts related to variable consideration associated with our products are as follows: Prompt Pay Discounts Product returns ‐ ‐ At the end of each reporting period for any of our products, we may decide to constrain revenue for product returns based on information from various sources, including channel inventory levels and dating and sell-through data, the expiration dates of product currently being shipped, price changes of competitive products and introductions of generic products. At March 31, 2018, incremental to the historically-based returns rate, we increased our returns reserve by approximately $0.3 million due to risk factors that were present in connection with the initial stocking of inventory for the launch of our new products. Chargebacks ‐ Fees ‐ for ‐ service ‐ ‐ Government Rebates Medicaid – The Medicaid Drug Rebate Program is a program that includes The Centers for Medicare and Medicaid Services (CMS), State Medicaid agencies, and participating drug manufacturers that helps to offset the federal and state costs of most outpatient prescription drugs dispensed to Medicaid patients. The Medicaid Drug Rebate Program is jointly funded by the states and the federal government. The program reimburses hospitals, physicians, and pharmacies for providing care to qualifying recipients who cannot finance their own medical expenses. TRICARE – TRICARE is a benefit established by law as the health care program for uniformed service members, retired service members, and their families. We must pay the Department of Defense (“DOD”) refunds for drugs entered into the normal commercial chain of transactions that end up as prescriptions given to TRICARE beneficiaries and paid for by the DOD. The refund amount is the portion of the price of the drug sold by us that exceeds the federal ceiling price. Refunds due to TRICARE are based solely on utilization of pharmaceutical agents dispensed through a TRICARE Retail Pharmacy (“TRRx”) to DOD beneficiaries. Medicare Part D – We maintain contracts with Managed Care Organizations (“MCOs”) that administer prescription benefits for Medicare Part D. MCOs either own pharmacy benefit managers (“PBMs”) or contract with several PBMs to fulfill prescriptions for patients enrolled under their plans. As patients obtain their prescriptions, utilization data are reported to the MCOs, which generally submit claims for rebates quarterly. Commercial Payer Rebates The amount of consideration to which we will be entitled is based on a range of possible consideration outcomes and, therefore, we use the expected value method as this is an appropriate estimate of the amount of variable consideration. GPO Administration Fees MelintAssist At the end of each reporting period, we adjust our allowances for cash discounts, product returns, chargebacks, fees ‐ ‐ Cash Discounts Product Returns Chargebacks Fees-for-Service MelintAssist Government Rebates Commercial Rebates Admin Fee Balance as of January 1, 2018 $ - $ - $ - $ - $ - $ - $ - $ - Allowances for sales 328 817 2,354 1,003 440 350 483 177 Payments & credits issued (76 ) (1 ) (1,295 ) (254 ) (32 ) - (111 ) (15 ) Balance as of March 31, 2018 $ 252 $ 816 $ 1,059 $ 749 $ 408 $ 350 $ 372 $ 161 The allowances for cash discounts and chargebacks are recorded as contra-assets in trade receivables; the other balances are recorded in other accrued expenses. Grant Income We have several agreements with BARDA related to certain development costs for solithromycin and Vabomere. We concluded that BARDA is not a customer under Topic 606 because it does not engage with us in reciprocal transactions but, rather, provides contributions to our development efforts to encourage the development of more antibiotics for the welfare of society. As such, we view the income as a contribution and classify it within other income and expense, net, rather than in revenue. We recognize grant income under the BARDA contracts over time as qualifying research activities are conducted. In the first quarter of 2018, we and BARDA agreed to terminate the solithromycin BARDA contract and wind down the study, but we will continue to recognize grant income until the wind-down activities are completed later this year. |
Comprehensive Loss | Comprehensive Loss —Comprehensive loss is equal to net loss as presented in the accompanying statements of operations. |
Segment and Geographic Information | Segment and Geographic Information —Operating segments are defined as components of an enterprise engaging in business activities for which discrete financial information is available and regularly reviewed by the chief operating decision maker in deciding how to allocate resources and in assessing performance. We operate and manage our business as one operating segment. Although substantially all of our license and contract research revenue is generated from agreements with companies that are domiciled outside of the U.S., we do not operate outside of the U.S., nor do we have any significant assets in any foreign country. See Note 2 for further discussion of the license and contract research revenue. |
Recently Issued and Adopted Accounting Pronouncements | Recently Issued and Adopted Accounting Pronouncements: On January 1, 2018, we adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606) The Financial Accounting Standards Board (“FASB”) has also issued certain clarifying guidance to Topic 606 that we have considered as follows: • ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), • ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, • ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients, o Allowed companies that elect the modified retrospective transition method to apply the guidance of Topic 606 to either: 1) all contracts, completed or not completed, or 2) only to contracts that were not completed. We elected to apply the new standard to contracts with our customers that were incomplete of January 1, 2018. o Clarified the objective of the entity’s collectability assessment (one of the five criteria of step 1 of the revenue recognition model) and provides new guidance on when an entity would recognize as revenue consideration it receives if the entity concludes that collectability is not probable. o Permitted an entity to present revenue net of sales taxes collected on behalf of governmental authorities (i.e., exclude sales taxes that meet certain criteria, from the transaction price). o Specifies that the fair value measurement date for noncash consideration to be received is the contract inception date. Subsequent changes in the fair value of noncash consideration after contract inception would be included in the transaction price as variable consideration (subject to the variable consideration constraint) only if the fair value varies for reasons other than the “form” of the consideration. • ASU No. 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers The new guidance provided for two transition methods, a full retrospective approach and a modified retrospective approach, and requires more detailed disclosures to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. We utilized the modified retrospective method of adoption and recognized the cumulative effect of adoption as an adjustment to retained earnings at January 1, 2018, in the amount of $10,008, solely related to revenue that was previously deferred on a contract that has yet to be completed. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805) Clarifying the Definition of a Business In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments |
Recently Issued Accounting Pronouncements Not Yet Adopted | Recently Issued Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other: Simplifying the Test for Goodwill Impairment |
Summary of Significant Accoun19
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Summary of Activity with Respect to Sales Allowances and Accruals | The following table provides a summary of activity with respect to our sales allowances and accruals during 2018: Cash Discounts Product Returns Chargebacks Fees-for-Service MelintAssist Government Rebates Commercial Rebates Admin Fee Balance as of January 1, 2018 $ - $ - $ - $ - $ - $ - $ - $ - Allowances for sales 328 817 2,354 1,003 440 350 483 177 Payments & credits issued (76 ) (1 ) (1,295 ) (254 ) (32 ) - (111 ) (15 ) Balance as of March 31, 2018 $ 252 $ 816 $ 1,059 $ 749 $ 408 $ 350 $ 372 $ 161 |
Adoption of Topic 606 | |
Summary of Effect of Adoption of Topic 606 on Condensed Consolidated Balance Sheet | The effect of the adoption of Topic 606 on our condensed consolidated balance sheet is as follows: Balance at December 31, 2017 Adjustments Due to Topic 606 Balance at January 1, 2018 Liabilities: Deferred revenue $ 10,008 $ (10,008 ) $ - Shareholders’ Equity: Accumulated deficit $ (572,659 ) $ 10,008 $ (562,651 ) |
Schedule of Adjustments to Condensed Consolidated Financial Statements Due to Adoption of New Guidance | As such, the following reflects what we believe our condensed consolidated balance sheet and condensed consolidated statement of operations would have been under ASC 605 compared to the recognition of revenue under Topic 606 as of, and for the three months ended, March 31, 2018: Revenue Recognized Adjustments Due to Topic 606 Pro Forma Revenue Under ASC 605 Revenue: Product sales, net $ 11,846 $ (2,218 ) $ 9,628 Cost of goods sold $ 7,686 $ (1,054 ) $ 6,632 Net loss $ (29,432 ) $ (1,164 ) $ (30,596 ) Net loss per share $ (0.95 ) $ (0.99 ) Balance at March 31, 2018 Adjustments Due to Topic 606 Pro Forma Balance Under ASC 605 Assets: Prepaid and other current assets $ 7,322 $ 1,054 $ 8,376 Liabilities: Deferred revenue $ - $ 2,218 $ 2,218 Shareholders’ equity: Accumulated deficit $ (592,083 ) $ (1,164 ) $ (593,247 ) |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Balance Sheet Related Disclosures [Abstract] | |
Summary of Cash, Cash Equivalents and Restricted Cash | Cash, cash equivalents and restricted cash, as presented on the Consolidated Statements of Cash Flows, consisted of the following: March 31, December 31, 2018 2017 Cash and cash equivalents $ 91,479 $ 128,387 Restricted cash (included in Other Assets) 200 200 Total cash, cash equivalents and restricted cash shown in the Consolidated Statements of Cash Flows $ 91,679 $ 128,587 |
Summary of Inventory | Inventory consisted of the following: March 31, December 31, 2018 2017 Raw materials $ 17,401 $ 5,545 Work in process 3,240 181 Finished goods 7,579 5,099 Total inventory $ 28,220 $ 10,825 |
Summary of Other Assets | Other assets consisted of the following: March 31, December 31, 2018 2017 Deerfield disbursement option $ 7,609 $ - Long-term inventory deposits 13,291 - VAT receivable 665 248 Research study deposit 500 500 Security deposits 413 465 Restricted cash 200 200 Total other assets $ 22,678 $ 1,413 |
Summary of Accrued Expenses | Accrued expenses consisted of the following: March 31, December 31, 2018 2017 Accrued contracted services $ 4,038 $ 5,596 Payroll related expenses 8,740 9,885 Professional fees 3,423 3,621 Accrued royalty payment 2,795 2,040 Accrued sales allowances 2,856 - Accrued other 7,585 2,899 Total accrued expenses $ 29,437 $ 24,041 |
Financing Arrangements (Tables)
Financing Arrangements (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Outstanding Debt Balances | Melinta’s outstanding debt balances consisted of the following as of March 31, 2018 and December 31, 2017: March 31, December 31, 2018 2017 Principal balance under loan agreements $ 115,268 $ 40,000 Debt discount and deferred financing costs for loan agreements (9,178 ) (445 ) Long-term balance under the loan agreements $ 106,090 $ 39,555 |
Relative Fair Values of Financial Instruments as of Agreement Date | The relative fair values of these financial instruments, which approximated their respective fair values as of the Agreement Date, were as follows (in thousands): Term Loan $ 111,421 Warrants 33,264 Royalty Agreement 1,472 Disbursement Option (7,609 ) Common Stock Consideration 51,452 Total Consideration $ 190,000 |
Schedule of Accretion of Principal Term Loan and Future Payments | The accretion of the principal of the term loan and the future payments, including the 2% exit fee due at the end of the term, and excluding the 11.75% rate applied to the $147,774 note per the form of the Facility Agreement, are as follows: Beginning Balance Accretion of Interest Expense Principal Payments and Exit Fee Ending Balance January 5 - March 31, 2018 $ 104,966 $ 1,124 $ - $ 106,090 April 1 - December 31, 2018 106,090 4,484 - 110,574 Year Ending December 31, 2019 110,574 7,040 - 117,614 Year Ending December 31, 2020 117,614 8,637 - 126,251 Year Ending December 31, 2021 126,251 10,798 - 137,049 Year Ending December 31, 2022 137,049 9,826 (69,085 ) 77,790 Year Ending December 31, 2023 77,790 3,846 (75,365 ) 6,271 Year Ending December 31, 2024 6,271 9 (6,280 ) - Total $ 45,764 $ (150,730 ) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value | The following table lists our assets and liabilities that are measured at fair value and the level of inputs used to measure their fair value at March 31, 2018, and December 31, 2017. The money market fund is included in cash & cash equivalents on the balance sheet; the other items are in the captioned line of the balance sheet. As of March 31, 2018 Level 1 Level 2 Level 3 Total Assets: Money market fund $ 73,977 $ - $ - $ 73,977 Total assets at fair value $ 73,977 $ - $ - $ 73,977 Liabilities: Royalty liability in current deferred purchase price $ - $ - $ (1,330 ) $ (1,330 ) Royalty liability in noncurrent deferred purchase price - - (13,891 ) (13,891 ) Contingent milestone payments - - (27,184 ) (27,184 ) Royalty liability in other long-term liabilities - - (1,624 ) (1,624 ) Common stock warrants - - (9,179 ) (9,179 ) Total liabilities at fair value $ - $ - $ (53,208 ) $ (53,208 ) As of December 31, 2017 Level 1 Level 2 Level 3 Total Assets: Money market fund $ 76,777 $ - $ - $ 76,777 Total assets at fair value $ 76,777 $ - $ - $ 76,777 |
Summary of Changes in Fair Value of Level 3 Assets and Liabilities | The following tables summarize the changes in fair value of our Level 3 assets and liabilities for the three months ended March 31, 2018: Level 3 Liabilities Fair Value at December 31, 2017 Realized Gains (Losses) Change in Unrealized Gains (Losses) (Issuances) Settlements Net Transfer (In) Out of Level 3 Fair Value at March 31, 2018 Royalty liability in current deferred purchase price $ - $ - $ (152 ) $ (1,178 ) $ - $ (1,330 ) Royalty liability in noncurrent deferred purchase price - - (1,475 ) (12,416 ) - (13,891 ) Contingent milestone payments - - (1,217 ) (25,967 ) - (27,184 ) Royalty liability in other long-term liabilities - - (152 ) (1,472 ) - (1,624 ) Common stock warrants - - 24,085 (33,264 ) - (9,179 ) Total liabilities at fair value $ - $ - $ 21,089 $ (74,297 ) $ - $ (53,208 ) |
Shareholders Equity (Tables)
Shareholders Equity (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Summary of Warrants to Purchase Common Stock Outstanding | We have warrants to purchase our common stock outstanding at March 31, 2018, as follows: Issued Warrants Outstanding Exercise price Expiration August 2011 18,979 $ 30.00 August 2018 February 2012 42 $ 17,334.07 February 2019 December 2014 33,788 $ 33.30 December 2024 December 2015 6,757 $ 33.30 December 2024 January 2018 3,792,868 $ 16.50 January 2025 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Stock-Based Compensation Expense Reported in Statements of Operations | Stock-based compensation expense recognized in the three months ended March 31, 2018, was as follows: March 31, March 31, 2018 2017 Manufacturing $ 125 $ - Research and development 131 146 Selling, general and administrative 699 426 Total $ 955 $ 572 |
2011 Incentive Plan and Melinta 2011 Plan | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Stock Option Plans | A summary of the combined activity under the 2011 Incentive Plan and the Melinta 2011 Plan is presented in the table below: Weighted Weighted Average Average Aggregate Number of Exercise Contractual Intrinsic Options Price Term (in years) Value Outstanding - January 1, 2018 1,441,714 $ 43.11 Granted - $ - Exercised (203 ) $ 15.61 Forfeited (64,194 ) $ 32.25 Expired (9,422 ) $ 36.84 Outstanding - March 31, 2018 1,367,895 $ 43.67 4.8 $ - Exercisable - March 31, 2018 1,056,971 $ 49.19 3.7 $ - Vested and expected to vest at March 31, 2018 1,367,895 $ 43.67 4.8 $ - |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Antidilutive Securities Excluded from Computation of Diluted Weighted Average Shares Outstanding | The following potentially dilutive securities (in common stock equivalent shares) have been excluded from the computation of diluted weighted-average shares outstanding because such securities have an antidilutive impact due to losses reported: Three Months Ended March 31, 2018 2017 Warrants outstanding 3,852,434 31,702 Stock options outstanding 1,987,149 545,556 Restricted stock units outstanding 280,461 - Convertible preferred stock outstanding - 5,800,922 6,120,044 6,378,180 |
Business Combinations (Tables)
Business Combinations (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
IDB | |
Business Acquisition [Line Items] | |
Schedule of Preliminary Purchase Price Allocation of Acquired Intangible Assets and Related Deferred Tax Liabilities | The following table sets forth the preliminary purchase price allocation, as of the acquisition date. Current assets $ 28,299 Goodwill 13,059 Intangible assets 258,000 Non-current assets 12,278 Current liabilities (37,000 ) Non-current liabilities (576 ) Total purchase price $ 274,060 |
Schedule of Identifiable Intangible Assets Acquired and Estimated Useful Lives | The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives as of the date of the acquisition: Average useful life Fair value Developed product rights 13 $ 238,000 In-process research and development Indefinite 20,000 Total intangible assets $ 258,000 |
IDB and Cempra, Inc | |
Business Acquisition [Line Items] | |
Schedule of Unaudited Pro Forma Information | The following unaudited pro forma information shows our results of operations as if the acquisition of IDB and merger with Cempra had been completed as of the beginning of fiscal 2017. Adjustments have been made for the pro forma effects of Topic 606, interest expense and accretion related to the financing of the business combinations, loss on extinguishment of debt, accretion expense related to the IDB acquisition deferred and contingent payments, the bargain purchase gain recognized in the Cempra merger, transaction costs, amortization of intangible assets recognized as part of the business combinations and the fair value gain on the warrant liability. Three Months Ended March 31, 2017 Pro forma revenue $ 29,214 Pro forma net loss $ (53,863 ) |
Severance (Tables)
Severance (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Restructuring And Related Activities [Abstract] | |
Summary of Activity in Severance Accrual (Included In Accrued Expenses or Long-Term Liabilities on Consolidated Balance Sheets) | A summary of activity in our severance accrual (included in accrued expenses or long-term liabilities on the consolidated balance sheets) is below. Balance - December 31, 2017 $ 6,721 Additional severance accruals 1,532 Bonus to be paid as severance 223 Severance payments (3,423 ) Balance - March 31, 2018 $ 5,053 |
Financial Statements - Addition
Financial Statements - Additional Information (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | ||
Accumulated deficit | $ (592,083) | $ (572,659) |
Summary of Significant Accoun29
Summary of Significant Accounting Policies - Additional Information (Details) | Jan. 01, 2018USD ($) | Jun. 30, 2018 | Mar. 31, 2018USD ($)RebateSegment | Dec. 31, 2017USD ($) |
Summary Of Significant Accounting Policies [Line Items] | ||||
Inventory reserve | $ 0 | |||
Contract assets | 0 | |||
Contract liabilities | $ 0 | |||
Outstanding performance obligations | $ 0 | |||
Description of Term on Prompt Pay Discounts | We provide wholesale customers with certain discounts if the wholesaler pays within the payment term, which is generally between 30 and 60 days. | |||
Product return, description | Generally, our customers have the right to return any unopened product during the 18‐month period beginning six months prior to the labeled expiration date and ending 12 months after the labeled expiration date. Where historical rates of return exist, we use history as a basis to establish a returns reserve for product shipped to wholesalers. For our newly launched products, for which we currently do not have history of product returns, we estimate returns based on third‐party industry data for comparable products in the market. As we distribute our products and establish historical sales over a longer period of time (i.e., two years), we will be able to place more reliance on historical purchasing and return patterns of our customers when evaluating our reserves for product return. | |||
Increase in product returns reserve | $ 300,000 | |||
Number of government rebate programs | Rebate | 3 | |||
Number of operating segments | Segment | 1 | |||
Deferred revenue | $ (10,008,000) | |||
Baxdela | Minimum | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Deferred revenues expected recognized period | 10 years | |||
ASU 2014-09 | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Cumulative effect of the adoption recognized as net decrease to opening accumulated deficit and a decrease to deferred rvenue | $ 10,008,000 | |||
ASU 2014-09 | Adjustments Due to Topic 606 | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Deferred revenue | $ 10,008,000 | $ (2,218,000) | ||
Trade Receivables | Customer Cocentration Risk | Scenario, Forecast | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Concentration risk percentage | 74.00% |
Summary of Significant Accoun30
Summary of Significant Accounting Policies - Summary of Effect of Adoption of Topic 606 on Condensed Consolidated Balance Sheet (Detail) - USD ($) $ in Thousands | Mar. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Liabilities | |||
Deferred revenue | $ 10,008 | ||
Shareholders' Equity | |||
Accumulated deficit | $ (592,083) | $ (572,659) | |
Adoption of Topic 606 | |||
Shareholders' Equity | |||
Accumulated deficit | $ (562,651) | ||
Adoption of Topic 606 | Adjustments Due to Topic 606 | |||
Liabilities | |||
Deferred revenue | 2,218 | (10,008) | |
Shareholders' Equity | |||
Accumulated deficit | $ (1,164) | $ 10,008 |
Summary of Significant Accoun31
Summary of Significant Accounting Policies - Schedule of Adjustments to Condensed Consolidated Financial Statements Due to Adoption of New Guidance (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Jan. 01, 2018 | Dec. 31, 2017 | |
Revenue | ||||
Product sales, net | $ 11,846 | |||
Cost of goods sold | 7,686 | |||
Net loss | $ (29,432) | $ (74) | ||
Net loss per share | $ (0.95) | $ (208.16) | ||
Assets | ||||
Prepaid expenses and other current assets | $ 7,322 | $ 2,988 | ||
Liabilities | ||||
Deferred revenue | 10,008 | |||
Shareholders' Equity | ||||
Accumulated deficit | (592,083) | $ (572,659) | ||
Adoption of Topic 606 | ||||
Shareholders' Equity | ||||
Accumulated deficit | $ (562,651) | |||
Adoption of Topic 606 | Adjustments Due to Topic 606 | ||||
Revenue | ||||
Product sales, net | (2,218) | |||
Cost of goods sold | (1,054) | |||
Net loss | (1,164) | |||
Assets | ||||
Prepaid expenses and other current assets | 1,054 | |||
Liabilities | ||||
Deferred revenue | 2,218 | (10,008) | ||
Shareholders' Equity | ||||
Accumulated deficit | (1,164) | $ 10,008 | ||
Adoption of Topic 606 | Pro Forma Revenue Under ASC 605 | ||||
Revenue | ||||
Product sales, net | 9,628 | |||
Cost of goods sold | 6,632 | |||
Net loss | $ (30,596) | |||
Net loss per share | $ (0.99) | |||
Assets | ||||
Prepaid expenses and other current assets | $ 8,376 | |||
Liabilities | ||||
Deferred revenue | 2,218 | |||
Shareholders' Equity | ||||
Accumulated deficit | $ (593,247) |
Summary of Significant Accoun32
Summary of Significant Accounting Policies - Summary of Activity with Respect to Sales Allowances and Accruals (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Cash Discounts | |
Valuation And Qualifying Accounts Disclosure [Line Items] | |
Allowances for sales | $ 328 |
Payments & credits issued | (76) |
Balance as of March 31, 2018 | 252 |
Product Returns | |
Valuation And Qualifying Accounts Disclosure [Line Items] | |
Allowances for sales | 817 |
Payments & credits issued | (1) |
Balance as of March 31, 2018 | 816 |
Chargebacks | |
Valuation And Qualifying Accounts Disclosure [Line Items] | |
Allowances for sales | 2,354 |
Payments & credits issued | (1,295) |
Balance as of March 31, 2018 | 1,059 |
Fees-for-Service | |
Valuation And Qualifying Accounts Disclosure [Line Items] | |
Allowances for sales | 1,003 |
Payments & credits issued | (254) |
Balance as of March 31, 2018 | 749 |
Melint Assist | |
Valuation And Qualifying Accounts Disclosure [Line Items] | |
Allowances for sales | 440 |
Payments & credits issued | (32) |
Balance as of March 31, 2018 | 408 |
Government Rebates | |
Valuation And Qualifying Accounts Disclosure [Line Items] | |
Allowances for sales | 350 |
Balance as of March 31, 2018 | 350 |
Commercial Rebates | |
Valuation And Qualifying Accounts Disclosure [Line Items] | |
Allowances for sales | 483 |
Payments & credits issued | (111) |
Balance as of March 31, 2018 | 372 |
Admin Fee | |
Valuation And Qualifying Accounts Disclosure [Line Items] | |
Allowances for sales | 177 |
Payments & credits issued | (15) |
Balance as of March 31, 2018 | $ 161 |
Balance Sheet Components - Summ
Balance Sheet Components - Summary of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 |
Balance Sheet Related Disclosures [Abstract] | ||||
Cash and cash equivalents | $ 91,479 | $ 128,387 | ||
Restricted cash (included in Other Assets) | 200 | 200 | ||
Total cash, cash equivalents and restricted cash shown in the Consolidated Statements of Cash Flows | $ 91,679 | $ 128,587 | $ 20,126 | $ 11,409 |
Balance Sheet Components - Su34
Balance Sheet Components - Summary of Inventory (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Balance Sheet Related Disclosures [Abstract] | ||
Raw materials | $ 17,401 | $ 5,545 |
Work in process | 3,240 | 181 |
Finished goods | 7,579 | 5,099 |
Total inventory | $ 28,220 | $ 10,825 |
Balance Sheet Components - Su35
Balance Sheet Components - Summary of Other Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Balance Sheet Related Disclosures [Abstract] | ||
Deerfield disbursement option | $ 7,609 | |
Long-term inventory deposits | 13,291 | |
VAT receivable | 665 | $ 248 |
Research study deposit | 500 | 500 |
Security deposits | 413 | 465 |
Restricted cash | 200 | 200 |
Total other assets | $ 22,678 | $ 1,413 |
Balance Sheet Components - Su36
Balance Sheet Components - Summary of Accrued Expenses (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Balance Sheet Related Disclosures [Abstract] | ||
Accrued contracted services | $ 4,038 | $ 5,596 |
Payroll related expenses | 8,740 | 9,885 |
Professional fees | 3,423 | 3,621 |
Accrued royalty payment | 2,795 | 2,040 |
Accrued sales allowances | 2,856 | |
Accrued other | 7,585 | 2,899 |
Total accrued expenses | $ 29,437 | $ 24,041 |
Financing Arrangements - Schedu
Financing Arrangements - Schedule of Outstanding Debt Balances (Details) - Loan Agreements - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
Principal balance under loan agreements | $ 115,268 | $ 40,000 |
Debt discount and deferred financing costs for loan agreements | (9,178) | (445) |
Long-term balance under the loan agreements | $ 106,090 | $ 39,555 |
Financing Arrangements - Additi
Financing Arrangements - Additional Information (Details) | Jan. 05, 2018USD ($)FinancialInstrument$ / sharesshares | Jun. 28, 2017USD ($) | May 02, 2017USD ($) | Dec. 31, 2014USD ($) | Mar. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2017USD ($)shares | Mar. 31, 2017USD ($) | Dec. 31, 2015USD ($) |
Debt Instrument [Line Items] | ||||||||
Proceeds received from notes payable | $ 104,966,000 | $ 8,010,000 | ||||||
Product sales, net | 11,846,000 | |||||||
Proceeds from issuance of common stock | 51,452,000 | |||||||
Prepayment penalties and exit fees related to debt instrument | 2,150,000 | |||||||
Loss on extinguishment of debt | $ (2,595,000) | |||||||
Common stock, shares issued | shares | 31,353,254 | 21,998,942 | ||||||
Gross proceeds allocated to financial instruments | $ 190,000,000 | $ 53,208,000 | ||||||
Number of financial instruments | FinancialInstrument | 5 | |||||||
Total future cash payments | 150,730,000 | |||||||
Change in fair value of warrant liability | $ 33,264,000 | (24,085,000) | 55,000 | |||||
Fair value of warrants | 9,179,000 | |||||||
Gain on fair value of warrants and conversion option | 24,085,000 | |||||||
Interest expense | 10,196,000 | $ 1,622,000 | ||||||
Long-term asset | 73,977,000 | $ 76,777,000 | ||||||
U.S. Sales of Vabomere | ||||||||
Debt Instrument [Line Items] | ||||||||
Product sales, net | $ 74,178 | |||||||
Common Stock | ||||||||
Debt Instrument [Line Items] | ||||||||
Gross proceeds allocated to financial instruments | $ 51,452,000 | |||||||
Fair value assumptions, expected term | 7 years | 6 years 9 months 7 days | ||||||
Fair value assumptions, risk free rate | 2.39% | 2.67% | ||||||
Fair value assumptions, expected volatility | 50.00% | 50.00% | ||||||
Warrants | ||||||||
Debt Instrument [Line Items] | ||||||||
Exercise price of warrant | $ / shares | $ 16.50 | |||||||
Gross proceeds allocated to financial instruments | $ 33,264,000 | |||||||
Warrants issued to purchase convertible common stock | shares | 3,792,868 | |||||||
Warrants expiration term | 7 years | |||||||
Disbursement Option | ||||||||
Debt Instrument [Line Items] | ||||||||
Percentage of convertible notes | 14.75% | |||||||
Disbursement option drawn period | 2 years | |||||||
Long-term asset | $ 7,609,000 | $ 7,609,000 | ||||||
IDB | ||||||||
Debt Instrument [Line Items] | ||||||||
Business acquired from Medicines Company, effective date of acquired | Jan. 5, 2018 | |||||||
Deerfield | Securities Purchase Agreement | ||||||||
Debt Instrument [Line Items] | ||||||||
Common stock, shares issued | shares | 3,127,846 | |||||||
Common stock issued price per share | $ / shares | $ 13.50 | |||||||
Deerfield | Additional Paid-in Capital | Securities Purchase Agreement | ||||||||
Debt Instrument [Line Items] | ||||||||
Fair value of common stock consideration | $ 51,452,000 | |||||||
Closing price of common stock shares | $ / shares | $ 16.45 | |||||||
Equity Financing | IDB | ||||||||
Debt Instrument [Line Items] | ||||||||
Loan and security agreement | $ 40,000,000 | |||||||
Minimum | U.S. Sales of Vabomere | ||||||||
Debt Instrument [Line Items] | ||||||||
Product sales, net | $ 75,000 | |||||||
Minimum | Disbursement Option | ||||||||
Debt Instrument [Line Items] | ||||||||
Product sales, net | 75,000 | |||||||
Maximum | U.S. Sales of Vabomere | ||||||||
Debt Instrument [Line Items] | ||||||||
Product sales, net | 500,000 | |||||||
Maximum | Disbursement Option | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, disbursement | $ 50,000,000 | |||||||
2014 Loan Agreement | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, maturity date | Jun. 1, 2018 | |||||||
Loan agreement, interest rate description | We were obligated to make monthly payments in arrears of interest only, at a rate of the greater of 8.25% or the sum of 8.25% plus the prime rate minus 4.5% per annum, commencing on January 1, 2015, and continuing on the first day of each successive month thereafter through and including June 1, 2016. Commencing on July 1, 2016, and continuing on the first day of each month through and including June 1, 2018, we were required to make consecutive equal monthly payments of principal and interest. All unpaid principal and accrued and unpaid interest with respect to the 2014 Loan Agreement were due and payable in full on June 1, 2018 | |||||||
Interest expense | $ 1,155,000 | |||||||
2014 Loan Agreement | Prime Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, basis spread on variable rate | 4.50% | |||||||
2014 Loan Agreement | Minimum | ||||||||
Debt Instrument [Line Items] | ||||||||
Long-term loan, effective interest rate | 8.25% | |||||||
2017 Loan Agreement | ||||||||
Debt Instrument [Line Items] | ||||||||
Percentage of convertible notes | 8.25% | 8.25% | ||||||
Debt instrument interest rate, description | The 2017 Loan Agreement bore an annual interest rate equal to the greater of 8.25% or the sum of 8.25% plus the prime rate minus 4.5%. | |||||||
2017 Loan Agreement | Principal Amount at or below 40000 | ||||||||
Debt Instrument [Line Items] | ||||||||
Loan and security agreement | $ 40,000,000 | |||||||
Debt instrument, interest payment period | 18 months | |||||||
2017 Loan Agreement | Debt Financing | ||||||||
Debt Instrument [Line Items] | ||||||||
Loan and security agreement | $ 80,000,000 | |||||||
2017 Loan Agreement | Equity Financing | ||||||||
Debt Instrument [Line Items] | ||||||||
Loan and security agreement | $ 10,000,000 | |||||||
2017 Loan Agreement | Prime Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, basis spread on variable rate | 4.50% | |||||||
Facility Agreement | Deerfield | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, shares issued | shares | 3,127,846 | |||||||
Debt instrument, issued price per share | $ / shares | $ 13.50 | |||||||
Proceeds from issuance of common stock | $ 42,226,000 | |||||||
Payment of outstanding principal | 40,000,000 | |||||||
Prepayment penalties and exit fees related to debt instrument | 2,150,000 | |||||||
Loss on extinguishment of debt | 2,595,000 | |||||||
Unamortized debt issuance costs | $ 445,000 | |||||||
Common stock, shares issued | shares | 3,127,846 | |||||||
Warrants assumed to purchase of common stock | shares | 3,792,868 | |||||||
Exercise price of warrant | $ / shares | $ 16.50 | |||||||
Warrants expiration date | Jan. 5, 2025 | |||||||
Facility Agreement | Deerfield | U.S. Sales of Vabomere | ||||||||
Debt Instrument [Line Items] | ||||||||
Rights to royalty payments sales of period | 7 years | |||||||
Rights to royalty payments sales of period ending date | Dec. 31, 2024 | |||||||
Facility Agreement | Deerfield | IDB | ||||||||
Debt Instrument [Line Items] | ||||||||
Business acquired from Medicines Company, effective date of acquired | Jan. 5, 2018 | |||||||
Percentage of upfront fee on principal amount | 2.00% | |||||||
Percentage of enhancement fee on principal amount | 2.00% | |||||||
Facility Agreement | Minimum | Deerfield | U.S. Sales of Vabomere | ||||||||
Debt Instrument [Line Items] | ||||||||
Rights to royalty payments percentage | 2.00% | |||||||
Facility Agreement | Minimum | Deerfield | IDB | ||||||||
Debt Instrument [Line Items] | ||||||||
Product sales, net | $ 75,000 | |||||||
Facility Agreement | Maximum | Deerfield | U.S. Sales of Vabomere | ||||||||
Debt Instrument [Line Items] | ||||||||
Rights to royalty payments percentage | 3.00% | |||||||
Facility Agreement | Maximum | Deerfield | IDB | Disbursement Option | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, disbursement | $ 50,000,000 | |||||||
Royalty Agreement | ||||||||
Debt Instrument [Line Items] | ||||||||
Accretion expense | $ 0 | |||||||
Percentage of royalty payments | 3.00% | |||||||
Estimated the fair market value of the royalty liability | 1,472,000 | |||||||
Effective interest rate on royalty liability | 42.88% | |||||||
Interest expense | $ 152,000 | |||||||
Increasing the value of liability | $ 1,624,000 | |||||||
Facility Agreement and Other Loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Percentage of royalty payments | 2.00% | |||||||
Term Loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Gross proceeds allocated to financial instruments | $ 111,421,000 | |||||||
Term Loan | Facility Agreement | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest expense | $ 4,196,000 | |||||||
Loan and security agreement | $ 147,774,000 | |||||||
Percentage of convertible notes | 21.38% | |||||||
Debt instrument exit fee percentage | 2.00% | |||||||
Estimated fair value of borrowed amount | $ 111,421,000 | |||||||
Risk-adjusted discount rate | 19.82% | |||||||
Upfront term loan fees and legal debt issuance costs | $ 6,455,000 | |||||||
Net carrying value | 104,966,000 | |||||||
Debt instrument exit fee | 2,956,000 | |||||||
Total future cash payments | 150,730,000 | |||||||
Accretion expense | $ 1,124,000 | |||||||
Term Loan | 2014 Loan Agreement | ||||||||
Debt Instrument [Line Items] | ||||||||
Borrowed amount | $ 20,000,000 | $ 10,000,000 | ||||||
Term Loan | Facility Agreement | Deerfield | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, maturity date | Jan. 6, 2021 | |||||||
Loan and security agreement | $ 147,774,000 | |||||||
Percentage of convertible notes | 11.75% | |||||||
Debt instrument, disbursement | $ 50,000,000 | |||||||
Debt instrument exit fee percentage | 2.00% | |||||||
Debt instrument maturity date principal | Jan. 5, 2024 | |||||||
Line credit maximum borrowing capacity | $ 20,000,000 | |||||||
Term Loan | Facility Agreement | Deerfield | Common Stock | ||||||||
Debt Instrument [Line Items] | ||||||||
Proceeds received from notes payable | $ 190,000,000 | |||||||
Term Loan | Facility Agreement | Deerfield | Disbursement Option | ||||||||
Debt Instrument [Line Items] | ||||||||
Percentage of convertible notes | 14.75% | |||||||
Term Loan | Facility Agreement | Deerfield | IDB | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, disbursement | $ 147,774,000 | |||||||
Tranche One | 2017 Loan Agreement | ||||||||
Debt Instrument [Line Items] | ||||||||
Proceeds received from notes payable | $ 30,000,000 | |||||||
Tranche Two | 2017 Loan Agreement | ||||||||
Debt Instrument [Line Items] | ||||||||
Proceeds received from notes payable | $ 10,000,000 |
Financing Arrangements - Relati
Financing Arrangements - Relative Fair Values of Financial Instruments as of Agreement Date (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Jan. 05, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | |||
Total Consideration | $ 53,208 | $ 190,000 | |
Total Consideration | (73,977) | $ (76,777) | |
Term Loan | |||
Debt Instrument [Line Items] | |||
Total Consideration | 111,421 | ||
Warrants | |||
Debt Instrument [Line Items] | |||
Total Consideration | 33,264 | ||
Common Stock Consideration | |||
Debt Instrument [Line Items] | |||
Total Consideration | 51,452 | ||
Royalty Agreement | |||
Debt Instrument [Line Items] | |||
Total Consideration | 1,472 | ||
Disbursement Option | |||
Debt Instrument [Line Items] | |||
Total Consideration | $ (7,609) | $ (7,609) |
Financing Arrangements - Sche40
Financing Arrangements - Schedule of Accretion of Principal Term Loan and Future Payments (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Debt Instrument [Line Items] | |
Beginning Balance | $ 39,555 |
Accretion of Interest Expense | 45,764 |
Principal Payments and Exit Fee | (150,730) |
Ending Balance | 106,090 |
January 5 - March 31, 2018 | |
Debt Instrument [Line Items] | |
Beginning Balance | 104,966 |
Accretion of Interest Expense | 1,124 |
Ending Balance | 106,090 |
April 1 - December 31, 2018 | |
Debt Instrument [Line Items] | |
Beginning Balance | 106,090 |
Accretion of Interest Expense | 4,484 |
Ending Balance | 110,574 |
Year Ending December 31, 2019 | |
Debt Instrument [Line Items] | |
Beginning Balance | 110,574 |
Accretion of Interest Expense | 7,040 |
Ending Balance | 117,614 |
Year Ending December 31, 2020 | |
Debt Instrument [Line Items] | |
Beginning Balance | 117,614 |
Accretion of Interest Expense | 8,637 |
Ending Balance | 126,251 |
Year Ending December 31, 2021 | |
Debt Instrument [Line Items] | |
Beginning Balance | 126,251 |
Accretion of Interest Expense | 10,798 |
Ending Balance | 137,049 |
Year Ending December 31, 2022 | |
Debt Instrument [Line Items] | |
Beginning Balance | 137,049 |
Accretion of Interest Expense | 9,826 |
Principal Payments and Exit Fee | (69,085) |
Ending Balance | 77,790 |
Year Ending December 31, 2023 | |
Debt Instrument [Line Items] | |
Beginning Balance | 77,790 |
Accretion of Interest Expense | 3,846 |
Principal Payments and Exit Fee | (75,365) |
Ending Balance | 6,271 |
Year Ending December 31, 2024 | |
Debt Instrument [Line Items] | |
Beginning Balance | 6,271 |
Accretion of Interest Expense | 9 |
Principal Payments and Exit Fee | $ (6,280) |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Assets and Liabilities Measured at Fair Value (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Jan. 05, 2018 | Dec. 31, 2017 |
Assets: | |||
Total assets at fair value | $ 73,977 | $ 76,777 | |
Liabilities: | |||
Total liabilities at fair value | (53,208) | $ (190,000) | |
Royalty Liability in Current Deferred Purchase Price | |||
Liabilities: | |||
Total liabilities at fair value | (1,330) | ||
Royalty Liability in Noncurrent Deferred Purchase Price | |||
Liabilities: | |||
Total liabilities at fair value | (13,891) | ||
Common Stock Warrants | |||
Liabilities: | |||
Total liabilities at fair value | (9,179) | ||
Contingent Milestone Payments | |||
Liabilities: | |||
Total liabilities at fair value | (27,184) | ||
Royalty Liability in Other Long-term Liabilities | |||
Liabilities: | |||
Total liabilities at fair value | (1,624) | ||
Money Market Funds | |||
Assets: | |||
Total assets at fair value | 73,977 | 76,777 | |
Level 1 Measurement | |||
Assets: | |||
Total assets at fair value | 73,977 | 76,777 | |
Level 1 Measurement | Money Market Funds | |||
Assets: | |||
Total assets at fair value | 73,977 | $ 76,777 | |
Level 3 | |||
Liabilities: | |||
Total liabilities at fair value | (53,208) | ||
Level 3 | Royalty Liability in Current Deferred Purchase Price | |||
Liabilities: | |||
Total liabilities at fair value | (1,330) | ||
Level 3 | Royalty Liability in Noncurrent Deferred Purchase Price | |||
Liabilities: | |||
Total liabilities at fair value | (13,891) | ||
Level 3 | Common Stock Warrants | |||
Liabilities: | |||
Total liabilities at fair value | (9,179) | ||
Level 3 | Contingent Milestone Payments | |||
Liabilities: | |||
Total liabilities at fair value | (27,184) | ||
Level 3 | Royalty Liability in Other Long-term Liabilities | |||
Liabilities: | |||
Total liabilities at fair value | $ (1,624) |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Changes in Fair Value of Level 3 Assets and Liabilities (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Fair Value Net Derivative Asset Liability Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | |
Total liabilities at fair value, Change in Unrealized Gains (Losses) | $ 21,089 |
Total liabilities at fair value, Issuances (Settlements) | (74,297) |
Total liabilities at fair value, Fair Value at March 31, 2018 | (53,208) |
Royalty Liability in Current Deferred Purchase Price | |
Fair Value Net Derivative Asset Liability Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | |
Total liabilities at fair value, Change in Unrealized Gains (Losses) | (152) |
Total liabilities at fair value, Issuances (Settlements) | (1,178) |
Total liabilities at fair value, Fair Value at March 31, 2018 | (1,330) |
Royalty Liability in Noncurrent Deferred Purchase Price | |
Fair Value Net Derivative Asset Liability Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | |
Total liabilities at fair value, Change in Unrealized Gains (Losses) | (1,475) |
Total liabilities at fair value, Issuances (Settlements) | (12,416) |
Total liabilities at fair value, Fair Value at March 31, 2018 | (13,891) |
Contingent Milestone Payments | |
Fair Value Net Derivative Asset Liability Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | |
Total liabilities at fair value, Change in Unrealized Gains (Losses) | (1,217) |
Total liabilities at fair value, Issuances (Settlements) | (25,967) |
Total liabilities at fair value, Fair Value at March 31, 2018 | (27,184) |
Royalty Liability in Other Long-term Liabilities | |
Fair Value Net Derivative Asset Liability Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | |
Total liabilities at fair value, Change in Unrealized Gains (Losses) | (152) |
Total liabilities at fair value, Issuances (Settlements) | (1,472) |
Total liabilities at fair value, Fair Value at March 31, 2018 | (1,624) |
Common Stock Warrants | |
Fair Value Net Derivative Asset Liability Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | |
Total liabilities at fair value, Change in Unrealized Gains (Losses) | 24,085 |
Total liabilities at fair value, Issuances (Settlements) | (33,264) |
Total liabilities at fair value, Fair Value at March 31, 2018 | $ (9,179) |
Shareholders Equity - Additiona
Shareholders Equity - Additional Information (Details) - USD ($) | Jan. 05, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Class Of Stock [Line Items] | |||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | |
Common stock, shares authorized | 80,000,000 | 80,000,000 | |
Preferred stock, shares outstanding | 0 | 0 | |
Dividends declared | $ 0 | ||
Common stock, shares outstanding | 31,353,254 | 21,998,942 | |
Common stock, shares issued | 31,353,254 | 21,998,942 | |
Common Stock | Restricted Stock Units | |||
Class Of Stock [Line Items] | |||
Shares in exchange | 27,803 | ||
Facility Agreement | Deerfield | |||
Class Of Stock [Line Items] | |||
Common stock, shares issued | 3,127,846 | ||
Warrants assumed to purchase of common stock | 3,792,868 | ||
IDB | |||
Class Of Stock [Line Items] | |||
Business combination, issuance of common stock shares | 3,313,702 | ||
IDB | Equity Financing | |||
Class Of Stock [Line Items] | |||
Additional financing from existing and new investors | $ 40,000,000 | ||
IDB | Equity Financing | Common Stock | |||
Class Of Stock [Line Items] | |||
Shares in exchange | 2,884,961 |
Shareholders Equity - Summary o
Shareholders Equity - Summary of Warrants to Purchase Common Stock Outstanding (Details) | 3 Months Ended |
Mar. 31, 2018$ / sharesshares | |
Issued Warrants August 2011 | |
Class Of Warrant Or Right [Line Items] | |
Issued | 2011-08 |
Warrants Outstanding | shares | 18,979 |
Exercise price | $ / shares | $ 30 |
Expiration | 2018-08 |
Issued Warrants February 2012 | |
Class Of Warrant Or Right [Line Items] | |
Issued | 2012-02 |
Warrants Outstanding | shares | 42 |
Exercise price | $ / shares | $ 17,334.07 |
Expiration | 2019-02 |
Issued Warrants December 2014 | |
Class Of Warrant Or Right [Line Items] | |
Issued | 2014-12 |
Warrants Outstanding | shares | 33,788 |
Exercise price | $ / shares | $ 33.30 |
Expiration | 2024-12 |
Issued Warrants December 2015 | |
Class Of Warrant Or Right [Line Items] | |
Issued | 2015-12 |
Warrants Outstanding | shares | 6,757 |
Exercise price | $ / shares | $ 33.30 |
Expiration | 2024-12 |
Issued Warrants January 2018 | |
Class Of Warrant Or Right [Line Items] | |
Issued | 2018-01 |
Warrants Outstanding | shares | 3,792,868 |
Exercise price | $ / shares | $ 16.50 |
Expiration | 2025-01 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) $ / shares in Units, $ in Thousands | Jan. 01, 2018shares | Nov. 03, 2017$ / sharesshares | Apr. 30, 2018$ / sharesshares | Mar. 31, 2018USD ($)Planshares | Dec. 31, 2017shares |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Purchase price of stock options | 100.00% | ||||
Number of restricted stock units outstanding plans | Plan | 2 | ||||
Selling, General and Administrative Expenses | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Accelerated vesting expense related to employee terminations | $ | $ 75 | ||||
President and Chief Executive Officer | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Stock options granted to purchase shares of common stock | 550,981 | ||||
Common stock purchase price per share | $ / shares | $ 11.65 | ||||
Stock vesting period | 4 years | ||||
Stock vesting percentage | 25.00% | ||||
Stock plan description | Both grants will vest over four years, 25% after one year and then ratably monthly over the remaining 36 months. | ||||
President and Chief Executive Officer | Restricted Stock Units | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Stock options granted to purchase shares of common stock | 183,661 | ||||
2006 Stock Plan | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Options for shares issued and outstanding | 68,273 | ||||
Options forfeited | 91 | ||||
Stock options, Granted | 0 | ||||
2011 Equity Incentive Plan | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Number of shares authorized | 2,619,447 | ||||
Number of additional shares authorized | 879,957 | ||||
Options shares available under the 2011 Plan | 1,666,119 | ||||
2011 Equity Incentive Plan | Subsequent Event | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Stock options granted to purchase shares of common stock | 1,628,767 | ||||
Exercise price per share | $ / shares | $ 7.45 | ||||
2011 Equity Incentive Plan | Stock Options | Subsequent Event | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Stock options granted to purchase shares of common stock | 0 | ||||
Private Melinta 2011 Equity Incentive Plan | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Options shares available under the 2011 Plan | 732,499 | ||||
Number of stock option to purchase shares of common stock | 732,499 | ||||
Common share options avaliable for issuance | 667,702 | ||||
2011 Incentive Plan and Melinta 2011 Plan | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Options for shares issued and outstanding | 1,367,895 | 1,441,714 | |||
Options forfeited | 64,194 | ||||
2011 Incentive Plan and Melinta 2011 Plan | Restricted Stock Units | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Number of units vested | 7,600 | ||||
Number of units forfeited | 12,600 | ||||
Number of units outstanding | 96,800 | ||||
2018 Incentive Stock Plan | Stock Options | Subsequent Event | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Stock options granted to purchase shares of common stock | 865,267 | ||||
Exercise price per share | $ / shares | $ 7.45 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Option Plans - 2011 Equity Incentive Plan and Melinta 2011 Plan (Details) - 2011 Incentive Plan and Melinta 2011 Plan | 3 Months Ended |
Mar. 31, 2018$ / sharesshares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Number of Options, Outstanding - Beginning Balance | shares | 1,441,714 |
Number of Options, Exercised | shares | (203) |
Number of Options, Forfeited | shares | (64,194) |
Number of Options, Expired | shares | (9,422) |
Number of Options, Outstanding - Ending Balance | shares | 1,367,895 |
Number of Options, Exercisable - March 31, 2018 | shares | 1,056,971 |
Number of Options, Vested and expected to vest at March 31, 2018 | shares | 1,367,895 |
Weighted Average Exercise Price, Outstanding - Beginning Balance | $ / shares | $ 43.11 |
Weighted Average Exercise Price, Exercised | $ / shares | 15.61 |
Weighted Average Exercise Price, Forfeited | $ / shares | 32.25 |
Weighted Average Exercise Price, Expired | $ / shares | 36.84 |
Weighted Average Exercise Price, Outstanding - Ending Balance | $ / shares | 43.67 |
Weighted Average Exercise Price, Exercisable - December March 31, 2018 | $ / shares | 49.19 |
Weighted Average Exercise Price, Vested and expected to vest at March 31,2018 | $ / shares | $ 43.67 |
Weighted Average Contractual Term (in years), Outstanding | 4 years 9 months 18 days |
Weighted Average Contractual Term (in years), Exercisable - March 31, 2018 | 3 years 8 months 12 days |
Weighted Average Contractual Term (in years), Vested and expected to vest at March 31, 2018 | 4 years 9 months 18 days |
Stock-Based Compensation - St47
Stock-Based Compensation - Stock-Based Compensation Expense Reported in Statements of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Share-based compensation | $ 955 | $ 572 |
Manufacturing | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Share-based compensation | 125 | |
Research and Development | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Share-based compensation | 131 | 146 |
Selling ,General and Administrative | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Share-based compensation | $ 699 | $ 426 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2017 | Nov. 03, 2017 |
Income Tax Disclosure [Abstract] | |||||
Effective tax rate | 0.00% | ||||
Income tax expense | $ 0 | ||||
Deferred tax assets, net | $ 107,688 | ||||
Valuation allowance | $ 107,688 | ||||
Federal Statutory rate | 21.00% | 34.00% | |||
Additional income tax expense | $ 44,438 | ||||
Change in valuation allowance due to impact of the act | $ 44,438 |
Net Loss Per Share - Antidiluti
Net Loss Per Share - Antidilutive Securities Excluded from Computation of Diluted Weighted Average Shares Outstanding (Details) - shares | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of diluted weighted average shares outstanding | 6,120,044 | 6,378,180 |
Warrants Outstanding | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of diluted weighted average shares outstanding | 3,852,434 | 31,702 |
Stock Options Outstanding | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of diluted weighted average shares outstanding | 1,987,149 | 545,556 |
Restricted Stock Units Outstanding | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of diluted weighted average shares outstanding | 280,461 | |
Convertible Preferred Stock Outstanding | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of diluted weighted average shares outstanding | 5,800,922 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) $ in Thousands | Feb. 07, 2018USD ($) | Jul. 06, 2017Lawsuit | Mar. 31, 2018Lawsuit |
Loss Contingencies [Line Items] | |||
Attorneys’ fees paid | $ | $ 263 | ||
Securities Class Action | |||
Loss Contingencies [Line Items] | |||
Lawsuit commencement date | Nov. 4, 2016 | ||
Lawsuit action domicile | United States District Court, Middle District of North Carolina, Durham Division | ||
Name of defendant | Cempra’s officers | ||
Allegations in the class period | between July 7, 2015, and November 4, 2016 | ||
Loss contingency, actions determined by court | Plaintiff seeks to represent a class comprised of purchasers of Cempra’s common stock during the Class Period and seeks damages, costs and expenses and such other relief as determined by the court. | ||
Number of lawsuits filed | 2 | ||
Lawsuit filing date | November 22, 2016, and December 30, 2016 | ||
Lawsuit description | Two substantially similar lawsuits were filed in the United States District Court, Middle District of North Carolina on November 22, 2016, and December 30, 2016, respectively. | ||
Number of lawsuits consolidated | 3 | ||
Shareholder Derivative | |||
Loss Contingencies [Line Items] | |||
Lawsuit commencement date | Dec. 21, 2016 | ||
Lawsuit action domicile | North Carolina Durham County Superior Court | ||
Name of defendant | Cempra’s former and current officers and directors | ||
Shareholder Derivative | Pending Litigation | |||
Loss Contingencies [Line Items] | |||
Lawsuit commencement date | Jul. 31, 2017 | ||
Lawsuit action domicile | Court of Chancery of the State of Delaware | ||
Name of defendant | Cempra’s former and current officers and directors | ||
Lawsuit filing date | October 23, 2017 | ||
Legal Proceedings Case Four | |||
Loss Contingencies [Line Items] | |||
Lawsuit commencement date | Sep. 15, 2017 | ||
Lawsuit action domicile | United States District Court for the Middle District of North Carolina, Durham Division | ||
Name of defendant | Cempra’s former and current officers and directors | ||
Legal Proceedings Case Five | |||
Loss Contingencies [Line Items] | |||
Lawsuit action domicile | United States District Court for the Middle District of North Carolina | ||
Lawsuit filing date | September 27, 2017 | ||
Legal Proceedings Case Six | |||
Loss Contingencies [Line Items] | |||
Lawsuit action domicile | United States District Court for the Middle District of North Carolina | ||
Lawsuit filing date | October 6, 2017 |
Business Combinations - Additio
Business Combinations - Additional Information (Details) $ / shares in Units, $ in Thousands | Jan. 05, 2018USD ($)IndividualInstallmentMilestone$ / sharesshares | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Mar. 31, 2017USD ($) |
Business Acquisition [Line Items] | ||||
Revenue | $ 14,841 | $ 22,463 | ||
Grant income | $ 2,658 | |||
IDB | ||||
Business Acquisition [Line Items] | ||||
Business acquired from Medicines Company, effective date of acquired | Jan. 5, 2018 | |||
Percentage of capital stock of subsidiaries acquired | 100.00% | |||
Number of individuals added to team from Medicines Company | Individual | 135 | |||
Expenses related to legal and other services | $ 1,900 | $ 2,600 | ||
Expenses incurred related to transition and integration services | 900 | |||
Business combination, cash payment | $ 166,383 | |||
Business combination, issuance of common stock shares | shares | 3,313,702 | |||
Business combination, issuance of common shares amount | $ 50,000 | |||
Business combination, share price | $ / shares | $ 15.08886 | |||
Percentage of weighted average price of common stock | 90.00% | |||
Volume weighted average trading price of common stock trading days | 10 days | |||
Number of installment | Installment | 2 | |||
Cash and cash equivalents | $ 166,383 | |||
Net working capital adjustment | 1,383 | |||
Common stock | $ 54,510 | |||
Number of milestone payments | Milestone | 2 | |||
Deferred consideration | $ 39,167 | |||
Contingent consideration fair value of sales based royalty payments | $ 14,000 | $ 1,627 | ||
Effective interest rate | 19.82% | 40.00% | ||
Accrued royalty payment current | $ 406 | |||
Contingent liability current | $ 25,967 | 1,330 | ||
Carrying values of the long-term liabilities | 13,891 | |||
Milestone payment payable | $ 30,000 | |||
Non-cash interest expense related to accretion of contingent payment | 1,217 | |||
Revenue | 9,514 | |||
IDB | Medicines Company | ||||
Business Acquisition [Line Items] | ||||
Number of installment | Installment | 2 | |||
Effective interest rate | 19.82% | |||
Contingent liability current | 21,500 | |||
Carrying values of the long-term liabilities | 19,502 | |||
Milestone payment payable | $ 50,000 | |||
Non-cash interest expense related to accretion of contingent payment | 1,835 | |||
Deferred payments recorded at fair value | 25,000 | |||
IDB | Twelve Month Anniversaries | ||||
Business Acquisition [Line Items] | ||||
Business combination, cash payment | 25,000 | |||
IDB | Eighteen Month Anniversaries | ||||
Business Acquisition [Line Items] | ||||
Business combination, cash payment | 25,000 | |||
IDB | Milestone Payment Due on January 2019 | ||||
Business Acquisition [Line Items] | ||||
Present value of milestone payment | 25,000 | |||
IDB | Milestone Payment Due on July 2019 | ||||
Business Acquisition [Line Items] | ||||
Present value of milestone payment | $ 25,000 | |||
Cempra, Inc. | ||||
Business Acquisition [Line Items] | ||||
Expenses related to legal and other services | 217 | |||
Grant income | $ 2,658 |
Business Combinations - Schedul
Business Combinations - Schedule of Preliminary Purchase Price Allocation of Acquired Intangible Assets and Related Deferred Tax Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Jan. 05, 2018 |
Business Acquisition [Line Items] | ||
Goodwill | $ 13,059 | |
IDB | ||
Business Acquisition [Line Items] | ||
Current assets | $ 28,299 | |
Goodwill | 13,059 | |
Intangible assets | 258,000 | |
Non-current assets | 12,278 | |
Current liabilities | (37,000) | |
Non-current liabilities | (576) | |
Total purchase price | $ 274,060 |
Business Combinations - Sched53
Business Combinations - Schedule of Identifiable Intangible Assets Acquired and Estimated Useful Lives (Details) $ in Thousands | Jan. 05, 2018USD ($) |
Business Acquisition [Line Items] | |
Fair value | $ 258,000 |
In-Process Research and Development | |
Business Acquisition [Line Items] | |
Indefinite lived average useful life | Indefinite |
Indefinite lived fair value | $ 20,000 |
Developed Product Rights | |
Business Acquisition [Line Items] | |
Finite lived, average useful life | 13 years |
Finite lived fair value | $ 238,000 |
Business Combinations - Sched54
Business Combinations - Schedule of Unaudited Pro Forma Information (Details) - IDB and Cempra, Inc $ in Thousands | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Business Acquisition [Line Items] | |
Pro forma revenue | $ 29,214 |
Pro forma net loss | $ (53,863) |
Severance - Additional Informat
Severance - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Restructuring Cost And Reserve [Line Items] | ||
Accrued expenses | $ 29,437 | $ 24,041 |
Long-term liabilities | 8,340 | $ 6,644 |
Employee Severance | ||
Restructuring Cost And Reserve [Line Items] | ||
Accrued expenses | 4,243 | |
Long-term liabilities | 810 | |
Additional stock-based compensation expense related to acceleration of equity awards | $ 75 | |
Postemployment Benefits | Non-executives | ||
Restructuring Cost And Reserve [Line Items] | ||
Postemployment benefits for individuals include continued salary and benefits for period of time | 6 months | |
Postemployment Benefits | Executives | ||
Restructuring Cost And Reserve [Line Items] | ||
Postemployment benefits for individuals include continued salary and benefits for period of time | 18 months | |
Postemployment Benefits | CEO | ||
Restructuring Cost And Reserve [Line Items] | ||
Postemployment benefits for individuals include continued salary and benefits for period of time | 24 months |
Severance - Summary of Activity
Severance - Summary of Activity in Severance Accrual (Included In Accrued Expenses or Long-Term Liabilities on Consolidated Balance Sheets) (Details) - Employee Severance $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Restructuring Cost And Reserve [Line Items] | |
Balance - December 31, 2017 | $ 6,721 |
Additional severance accruals | 1,532 |
Bonus to be paid as severance | 223 |
Severance payments | (3,423) |
Balance - March 31, 2018 | $ 5,053 |