Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2021 | Jul. 30, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 30, 2021 | |
Entity File Number | 001-35347 | |
Entity Registrant Name | Clovis Oncology, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 90-0475355 | |
Entity Address, Address Line One | 5500 Flatiron Parkway, Suite 100 | |
Entity Address, City or Town | Boulder | |
Entity Address, State or Province | CO | |
Entity Address, Postal Zip Code | 80301 | |
City Area Code | 303 | |
Local Phone Number | 625-5000 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | CLVS | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 118,409,780 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q2 | |
Entity Central Index Key | 0001466301 | |
Amendment Flag | false |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Revenues: | ||||
Product revenue | $ 36,820 | $ 39,887 | $ 74,873 | $ 82,451 |
Product revenue - extensible list | Product | Product | Product | Product |
Operating expenses: | ||||
Research and development | $ 45,759 | $ 69,878 | $ 98,564 | $ 138,099 |
Selling, general and administrative | 32,918 | 41,902 | 62,859 | 84,500 |
Acquired in-process research and development | 2,204 | 2,204 | ||
Other operating expenses | 3,884 | 355 | 7,591 | 3,805 |
Total expenses | 94,402 | 122,535 | 190,466 | 247,112 |
Operating loss | (57,582) | (82,648) | (115,593) | (164,661) |
Other income (expense): | ||||
Interest expense | (8,770) | (6,739) | (16,807) | (16,300) |
Foreign currency (loss) gain | (206) | 142 | (752) | (735) |
Loss on convertible senior notes conversion | (7,791) | |||
Loss on extinguishment of debt | (3,277) | (3,277) | ||
Other income | 107 | 239 | 290 | 1,081 |
Other income (expense), net | (8,869) | (9,635) | (17,269) | (27,022) |
Loss before income taxes | (66,451) | (92,283) | (132,862) | (191,683) |
Income tax benefit | 3 | 36 | 137 | 104 |
Net loss | (66,448) | (92,247) | (132,725) | (191,579) |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments, net of tax | 14 | 61 | (66) | (42) |
Net unrealized loss on available-for-sale securities, net of tax | (84) | (6) | ||
Other comprehensive income (loss): | 14 | (23) | (66) | (48) |
Comprehensive loss | $ (66,434) | $ (92,270) | $ (132,791) | $ (191,627) |
Loss per basic and diluted common share: | ||||
Basic net loss per common share | $ (0.61) | $ (1.15) | $ (1.25) | $ (2.52) |
Diluted net loss per common share | $ (0.61) | $ (1.15) | $ (1.25) | $ (2.52) |
Basic weighted average common shares outstanding | 108,481 | 80,453 | 106,375 | 76,057 |
Diluted weighted average common shares outstanding | 108,481 | 80,453 | 106,375 | 76,057 |
Product | ||||
Operating expenses: | ||||
Cost of sales | $ 8,294 | $ 9,120 | $ 16,562 | $ 18,216 |
Intangible asset amortization | ||||
Operating expenses: | ||||
Cost of sales | $ 1,343 | $ 1,280 | $ 2,686 | $ 2,492 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 230,204 | $ 240,229 |
Accounts receivable, net | 24,180 | 26,511 |
Inventories, net | 24,993 | 30,714 |
Prepaid research and development expenses | 3,920 | 4,245 |
Other current assets | 13,056 | 9,130 |
Total current assets | 296,353 | 310,829 |
Inventories | 104,046 | 104,123 |
Property and equipment, net | 7,792 | 12,085 |
Right-of-use assets, net | 21,046 | 30,438 |
Intangible assets, net | 63,057 | 65,743 |
Goodwill | 63,074 | 63,074 |
Other assets | 16,861 | 19,262 |
Total assets | 572,229 | 605,554 |
Current liabilities: | ||
Accounts payable | 22,479 | 26,692 |
Accrued research and development expenses | 40,065 | 43,500 |
Lease liabilities | 3,572 | 5,330 |
Convertible senior notes | 64,353 | 64,198 |
Other accrued expenses | 43,410 | 45,208 |
Total current liabilities | 173,879 | 184,928 |
Long-term lease liabilities - less current portion | 21,584 | 31,640 |
Convertible senior notes - less current portion | 435,759 | 434,846 |
Borrowings under financing agreement | 147,365 | 110,917 |
Other long-term liabilities | 625 | 1,971 |
Total liabilities | 779,212 | 764,302 |
Commitments and contingencies (Note 14) | ||
Stockholders' equity: | ||
Preferred stock, par value $0.001 per share; 10,000,000 shares authorized, no shares issued and outstanding at June 30, 2021 and December 31, 2020 | ||
Common stock, $0.001 par value per share, 200,000,000 shares authorized at June 30, 2021 and December 31, 2020, respectively; 118,403,984 and 103,699,109 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively | 118 | 104 |
Additional paid-in capital | 2,582,721 | 2,498,179 |
Accumulated other comprehensive loss | (44,370) | (44,304) |
Accumulated deficit | (2,745,452) | (2,612,727) |
Total stockholders' deficit | (206,983) | (158,748) |
Total liabilities and stockholders' equity (deficit) | $ 572,229 | $ 605,554 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2021 | Dec. 31, 2020 |
CONSOLIDATED BALANCE SHEETS | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 118,403,984 | 103,699,109 |
Common stock, shares outstanding | 118,403,984 | 103,699,109 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) $ in Thousands | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Total |
Beginning Balance at Dec. 31, 2019 | $ 55 | $ 2,114,068 | $ (44,865) | $ (2,243,515) | $ (174,257) |
Beginning Balance (in shares) at Dec. 31, 2019 | 54,956,341 | ||||
Exercise of stock options | 2 | 2 | |||
Exercise of stock options (in shares) | 759 | ||||
Issuance of common stock from vesting of restricted stock units (in shares) | 662,323 | ||||
Share-based compensation expense | 12,961 | 12,961 | |||
Foreign currency translation adjustments | (103) | (103) | |||
Net unrealized gain (loss) on available-for-sale securities | 78 | 78 | |||
Convertible senior notes conversion | $ 18 | 133,640 | 133,658 | ||
Convertible senior notes conversion (in shares) | 17,877,164 | ||||
Net loss | (99,332) | (99,332) | |||
Ending Balance at Mar. 31, 2020 | $ 73 | 2,260,671 | (44,890) | (2,342,847) | (126,993) |
Ending Balance (in shares) at Mar. 31, 2020 | 73,496,587 | ||||
Beginning Balance at Dec. 31, 2019 | $ 55 | 2,114,068 | (44,865) | (2,243,515) | (174,257) |
Beginning Balance (in shares) at Dec. 31, 2019 | 54,956,341 | ||||
Foreign currency translation adjustments | (42) | ||||
Net unrealized gain (loss) on available-for-sale securities | (6) | ||||
Net loss | (191,579) | ||||
Ending Balance at Jun. 30, 2020 | $ 88 | 2,382,544 | (44,913) | (2,435,094) | (97,375) |
Ending Balance (in shares) at Jun. 30, 2020 | 88,196,705 | ||||
Beginning Balance at Mar. 31, 2020 | $ 73 | 2,260,671 | (44,890) | (2,342,847) | (126,993) |
Beginning Balance (in shares) at Mar. 31, 2020 | 73,496,587 | ||||
Exercise of stock options | (41) | (41) | |||
Exercise of stock options (in shares) | 6,661 | ||||
Issuance of common stock from vesting of restricted stock units (in shares) | 113,461 | ||||
Issuance of common stock under employee stock purchase plan | 907 | 907 | |||
Issuance of common stock under employee stock purchase plan (in shares) | 158,126 | ||||
Share-based compensation expense | 13,313 | 13,313 | |||
Foreign currency translation adjustments | 61 | 61 | |||
Net unrealized gain (loss) on available-for-sale securities | (84) | (84) | |||
Issuance of common stock, net of issuance costs | $ 11 | 83,416 | 83,427 | ||
Issuance of common stock, net of issuance costs (in shares) | 11,090,000 | ||||
Convertible senior notes conversion | $ 4 | 24,278 | 24,282 | ||
Convertible senior notes conversion (in shares) | 3,331,870 | ||||
Net loss | (92,247) | (92,247) | |||
Ending Balance at Jun. 30, 2020 | $ 88 | 2,382,544 | (44,913) | (2,435,094) | (97,375) |
Ending Balance (in shares) at Jun. 30, 2020 | 88,196,705 | ||||
Beginning Balance at Dec. 31, 2020 | $ 104 | 2,498,179 | (44,304) | (2,612,727) | $ (158,748) |
Beginning Balance (in shares) at Dec. 31, 2020 | 103,699,109 | 103,699,109 | |||
Exercise of stock options | 27 | $ 27 | |||
Exercise of stock options (in shares) | 5,609 | ||||
Issuance of common stock from vesting of restricted stock units | $ 1 | (1) | |||
Issuance of common stock from vesting of restricted stock units (in shares) | 853,239 | ||||
Share-based compensation expense | 4,039 | 4,039 | |||
Foreign currency translation adjustments | (80) | (80) | |||
Net loss | (66,277) | (66,277) | |||
Ending Balance at Mar. 31, 2021 | $ 105 | 2,502,244 | (44,384) | (2,679,004) | (221,039) |
Ending Balance (in shares) at Mar. 31, 2021 | 104,557,957 | ||||
Beginning Balance at Dec. 31, 2020 | $ 104 | 2,498,179 | (44,304) | (2,612,727) | $ (158,748) |
Beginning Balance (in shares) at Dec. 31, 2020 | 103,699,109 | 103,699,109 | |||
Exercise of stock options (in shares) | 7,087 | ||||
Foreign currency translation adjustments | $ (66) | ||||
Net loss | (132,725) | ||||
Ending Balance at Jun. 30, 2021 | $ 118 | 2,582,721 | (44,370) | (2,745,452) | $ (206,983) |
Ending Balance (in shares) at Jun. 30, 2021 | 118,403,984 | 118,403,984 | |||
Beginning Balance at Mar. 31, 2021 | $ 105 | 2,502,244 | (44,384) | (2,679,004) | $ (221,039) |
Beginning Balance (in shares) at Mar. 31, 2021 | 104,557,957 | ||||
Exercise of stock options | 9 | 9 | |||
Exercise of stock options (in shares) | 1,478 | ||||
Issuance of common stock from vesting of restricted stock units (in shares) | 193,936 | ||||
Issuance of common stock under employee stock purchase plan | 647 | 647 | |||
Issuance of common stock under employee stock purchase plan (in shares) | 158,382 | ||||
Share-based compensation expense | 7,362 | 7,362 | |||
Foreign currency translation adjustments | 14 | 14 | |||
Issuance of common stock, net of issuance costs | $ 13 | 72,459 | 72,472 | ||
Issuance of common stock, net of issuance costs (in shares) | 13,492,231 | ||||
Net loss | (66,448) | (66,448) | |||
Ending Balance at Jun. 30, 2021 | $ 118 | $ 2,582,721 | $ (44,370) | $ (2,745,452) | $ (206,983) |
Ending Balance (in shares) at Jun. 30, 2021 | 118,403,984 | 118,403,984 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Operating activities | ||
Net loss | $ (132,725) | $ (191,579) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Share-based compensation expense | 11,401 | 26,274 |
Depreciation and amortization | 4,478 | 4,128 |
Amortization of premiums and discounts on available-for-sale securities | (174) | |
Amortization of debt issuance costs | 1,260 | 1,423 |
Write-off of debt issuance costs related to convertible senior notes transactions | 4,344 | |
Loss on convertible senior notes conversion | 7,791 | |
Loss on extinguishment of debt | 3,277 | |
Other | 1,908 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | 2,331 | 2,359 |
Inventory | 6,525 | 4,357 |
Prepaid and accrued research and development expenses | (1,736) | (5,328) |
Other operating assets and liabilities | (3,963) | 5,895 |
Accounts payable | (4,551) | (7,804) |
Other accrued expenses | 6,427 | 2,686 |
Net cash used in operating activities | (108,645) | (142,351) |
Investing activities | ||
Purchases of property and equipment | (154) | (75) |
Purchases of available-for-sale securities | (9,962) | |
Sales of available-for-sale securities | 144,644 | |
Acquired in-process research and development - milestone payment | (8,000) | |
Net cash (used in) provided by investing activities | (154) | 126,607 |
Financing activities | ||
Proceeds from sale of common stock, net of issuance costs | 72,472 | 246,727 |
Payment of convertible senior notes | (164,443) | |
Proceeds from borrowings under financing agreement | 27,154 | 33,322 |
Proceeds from the exercise of stock options and employee stock purchases | 683 | 868 |
Payments on finance leases | (780) | (720) |
Payments on other long-term liabilities | (213) | (103) |
Net cash provided by financing activities | 99,316 | 115,651 |
Effect of exchange rate changes on cash and cash equivalents | (542) | (304) |
(Decrease) increase in cash and cash equivalents | (10,025) | 99,603 |
Cash and cash equivalents at beginning of period | 240,229 | 161,833 |
Cash and cash equivalents at end of period | 230,204 | 261,436 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 5,167 | 6,006 |
Non-cash investing and financing activities: | ||
Vesting of restricted stock units | $ 8,274 | $ 6,255 |
Nature of Business
Nature of Business | 6 Months Ended |
Jun. 30, 2021 | |
Nature of Business | |
Nature of Business | CLOVIS ONCOLOGY, INC. NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS 1. Nature of Business Clovis Oncology, Inc. (together with its consolidated subsidiaries, the “Company”, “Clovis”, “we”, “our”, “us”) is a biopharmaceutical company focused on acquiring, developing and commercializing innovative anti-cancer agents in the United States, Europe and additional international markets. We target our development programs for the treatment of specific subsets of cancer populations, and simultaneously develop, with partners, for those indications that require them, diagnostic tools intended to direct a compound in development to the population that is most likely to benefit from its use. We have and intend to continue to license or acquire rights to oncology compounds in all stages of development. In exchange for the right to develop and commercialize these compounds, we generally expect to provide the licensor with a combination of upfront payments, milestone payments and royalties on future sales. In addition, we generally expect to assume the responsibility for future drug development and commercialization costs. We currently operate in two segments. Since inception, our operations have consisted primarily of developing in-licensed compounds, evaluating new product acquisition candidates and general corporate activities and since 2016 we have also marketed and sold products. Our marketed product Rubraca® (rucaparib), an oral small molecule inhibitor of poly ADP-ribose polymerase (“PARP”), is marketed in the United States for two indications specific to recurrent epithelial ovarian, fallopian tube or primary peritoneal cancer and also an indication specific to metastatic castration-resistant prostate cancer (“mCRPC”). The initial indication received approval from the United States Food and Drug Administration (“FDA”) in December 2016 and covers the treatment of adult patients with deleterious BRCA In May 2020, the FDA approved Rubraca for the treatment of adult patients with mCRPC associated with a deleterious BRCA BRCA ATM In Europe, the European Commission granted a conditional marketing authorization in May 2018 for Rubraca as monotherapy treatment of adult patients with platinum-sensitive, relapsed or progressive, BRCA BRCA In December 2020, Rubraca met the primary study endpoint of significantly improving PFS BRCA Beyond our labeled indications, we have a clinical development program underway to further evaluate Rubraca in a variety of solid tumor types, either as monotherapy or in combination with other agents, including several studies as part of our ongoing clinical collaboration with Bristol Myers Squibb Company (“Bristol Myers Squibb”) to evaluate its immunotherapy OPDIVO® (nivolumab) in combination with Rubraca. We anticipate initial data of Rubraca monotherapy versus placebo from our ATHENA study in the first quarter of 2022, with results of the separate analysis of Rubraca in combination with Opdivo anticipated in the second half of 2022 based on protocol-defined assumptions. However, the actual timing of ATHENA data readouts is dependent on the occurrence of the protocol-specified number of progression events. The three anticipated data readouts, ATHENA monotherapy, ATHENA combination and TRITON3 discussed above, provide the potential to obtain approvals that reach larger patient populations in earlier lines of therapy for ovarian and prostate cancers, in which Rubraca is currently approved in later-line indications. We initiated the Phase 2 LODESTAR study in December 2019 to evaluate Rubraca as monotherapy treatment in patients with recurrent solid tumors associated with a deleterious mutation in homologous recombination repair genes. Based on initial results from the ongoing study, we see encouraging evidence of activity in patients with a biallelic tumor mutation of BRCA BRCA We hold worldwide rights to Rubraca. Pursuant to our license and collaboration agreement with 3B Pharmaceuticals GmbH (“ investigational new drug application (“ We hold U.S. and global rights to FAP-2286, excluding Europe (defined to include Russia, Turkey and Israel), where 3BP retains rights. We are also collaborating with 3BP on a discovery program directed to up to three additional, undisclosed targets for targeted radionuclide therapy, to which we would have global rights for any resulting product candidates. We may potentially file an additional IND, for a candidate from this discovery program, in the second half of 2022. Lucitanib, our product candidate currently in clinical development, is an investigational, oral, potent angiogenesis inhibitor which inhibits vascular endothelial growth factor receptors 1 through 3 (“VEGFR1-3”), platelet-derived growth factor receptors alpha and beta (“PDGFR α/β”) and fibroblast growth factor receptors 1 through 3 (“FGFR1-3”). Lucitanib inhibits the same three pathways as Lenvima® (lenvatinib), which has received an FDA approval for use in endometrial cancer in combination with Keytruda® (pembrolizumab), a PD-1 inhibitor. This, together with preclinical data for lucitanib in combination with a PD-1 inhibitor that demonstrated enhanced anti-tumor activity compared to that of single agents, represent a scientific rationale for development of lucitanib in combination with a PD-1 inhibitor, and in February 2019, lucitanib was added to our clinical collaboration with Bristol Myers Squibb. We hold the global (excluding China) development and commercialization rights for lucitanib. Basis of Presentation All financial information presented includes the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. The unaudited financial statements of Clovis Oncology, Inc. included herein reflect all adjustments that, in the opinion of management, are necessary to fairly state our financial position, results of operations and cash flows for the periods presented herein. Interim results may not be indicative of the results that may be expected for the full year. Certain information and footnote disclosures normally included in audited financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto which are included in our Annual Report on Form 10-K for the year ended December 31, 2020 (“2020 Form 10-K”) for a broader discussion of our business and the opportunities and risks inherent in such business. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, expenses and revenue and related disclosures. On an ongoing basis, we evaluate our estimates, including estimates related to revenue deductions, intangible asset impairment, clinical trial accruals and share-based compensation expense. We base our estimates on historical experience and other market-specific or other relevant assumptions that we believe to be reasonable under the circumstances. Actual results may differ from those estimates or assumptions. Liquidity We have incurred significant net losses since inception and have relied on our ability to fund our operations through debt and equity financings. We expect operating losses and negative cash flows to continue for the foreseeable future. As we continue to incur losses, transition to profitability is dependent upon achieving a level of revenue from Rubraca adequate to support our cost structure. We may never achieve profitability, and unless or until we do, we will continue to need to raise additional cash. Based on current estimates, we believe that our cash, cash equivalents and liquidity available under our financing agreement related to our ATHENA trial, together with current estimates for revenues generated by sales of Rubraca, will allow us to fund our operating plan through at least the next 12 months. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2021 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Recently Issued Accounting Standards From time to time, the Financial Accounting Standards Board (“FASB”) or other standards-setting bodies issue new accounting pronouncements. Updates to the FASB Accounting Standards Codification (“ASC”) are communicated through the issuance of an Accounting Standards Update (“ASU”). In August 2020, the FASB issued guidance that simplifies an issuer’s accounting for debt and equity instruments. The guidance is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early application is permitted. We plan to adopt this guidance on January 1, 2022. We will evaluate the impact this guidance may have on our consolidated financial statements and related disclosures as the adoption date approaches. Revenue Recognition We are currently approved to sell Rubraca in the United States and Europe markets. We distribute our product principally through a limited number of specialty distributor and specialty pharmacy providers, collectively, our customers. Our customers subsequently sell our products to patients and health care providers. Separately, we have arrangements with certain payors and other third parties that provide for government-mandated and privately-negotiated rebates, chargebacks and discounts. Product Revenue Revenue from product sales are recognized when the performance obligation is satisfied, which is when customers obtain control of our product at a point in time, typically upon delivery. We expense incremental costs of obtaining a contract as and when incurred if the expected amortization period of the asset that we would have recognized is one year or less. Reserves for Variable Consideration Revenues from product sales are recorded at the net sales price (transaction price), which includes estimates of variable consideration for which reserves are established and which result from price concessions that include rebates, chargebacks, discounts, co-pay assistance, estimated product returns and other allowances that are offered within contracts between us and our customers, health care providers, payors and other indirect customers relating to the sales of our product. These reserves are based on the amounts earned or to be claimed on the related sales and are classified as reductions of accounts receivable or a current liability. Where appropriate, these estimates take into consideration a range of possible outcomes which are probability-weighted for relevant factors such as our historical experience, current contractual and statutory requirements, specific known market events and trends, industry data and forecasted customer buying and payment patterns. Overall, these reserves reflect our best estimates of the amount of consideration to which we are entitled based on the terms of the contract. The amount of variable consideration which is included in the transaction price may be constrained and is included in the net sales price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. 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 product revenue and earnings in the period such variances become known. Government Rebates GPO and Payor Rebates. Chargebacks Discounts and Fees Co-pay assistance Returns Cost of Sales – Product Product cost of sales consists primarily of materials, third-party manufacturing costs as well as freight and royalties owed to our licensing partners for Rubraca sales. Cost of Sales – Intangible Asset Amortization Cost of sales for intangible asset amortization consists of the amortization of capitalized milestone payments made to our licensing partners upon FDA approval of Rubraca. Milestone payments are amortized on a straight-line basis over the estimated remaining patent life of Rubraca. Accounts Receivable We provide an allowance for credit losses based on experience and specifically identified risks. Accounts receivable are charged off against the allowance when we determine that recovery is unlikely and we cease collection efforts. Inventory Inventories are stated at the lower of cost or estimated net realizable value, on a first-in, first-out (“FIFO”) basis. Inventories include active pharmaceutical ingredient (“API”), contract manufacturing costs and overhead allocations. We begin capitalizing incurred inventory related costs upon regulatory approval. Prior to regulatory approval, incurred costs for the manufacture of the drugs that could potentially be available to support the commercial launch of our products are recognized as research and development expense. We regularly analyze our inventory levels for excess quantities and obsolescence (expiration), considering factors such as historical and anticipated future sales compared to quantities on hand and the remaining shelf-life of Rubraca. Rubraca finished goods have a shelf-life of four years from the date of manufacture. We expect to sell the finished goods prior to expiration. The API currently has a shelf-life of four years from the date of manufacture but can be retested at an immaterial cost with no expected reduction in potency, thereby extending its shelf-life as needed. We expect to consume substantially all of the API over a period of approximately six years based on our long-range sales projections of Rubraca. We write down inventory that has become obsolete, inventory that has a cost basis in excess of its estimated realizable value and/or inventory in excess of expected sales requirements. Expired inventory would be disposed of and the related costs would be written off as cost of product revenue. Inventories that are not expected to be consumed within 12 months following the balance sheet date are classified as long-term inventories. Long-term inventories primarily consist of API. API is currently produced by Lonza. As the API has undergone significant manufacturing specific to its intended purpose at the point it is purchased by us, we classify the API as work-in-process inventory. In addition, we currently manufacture Rubraca finished goods with a single third-party manufacturer. The disruption or termination of the supply of API or the disruption or termination of the manufacturing of our commercial products could have a material adverse effect on our business, financial position and results of operations. API that is written off due to damage and certain costs related to our dedicated production train at Lonza are included in Other Operating Expenses on the Consolidated Statements of Operations and Comprehensive Loss. Inventory used in clinical trials is expensed as research and development expense when it has been identified for such use. Segment Information We have two operating and reportable segments, U.S. and ex-U.S., based on product revenue by geographic areas. We designated our reporting segments based on the internal reporting used by the Chief Operating Decision Maker (“CODM”), which is our Chief Executive Officer, for making decisions and assessing performance as the source of our reportable segments. The CODM allocates resources and assesses the performance of each operating segment based on product revenue by geographic areas. Accordingly, we view our business as two reportable operating segments to evaluate performance, allocate resources, set operational targets and forecast our future period financial results. We manage our assets on a company basis, not by segments, as many of our assets are shared or commingled. Our CODM does not regularly review asset information by reportable segment. The majority of long-lived assets for both segments are located in the United States. Research and Development Expense Research and development costs are charged to expense as incurred and include, but are not limited to, salary and benefits, share-based compensation, clinical trial activities, drug development and manufacturing, companion diagnostic development and third-party service fees, including contract research organizations and investigative sites. Costs for certain development activities, such as clinical trials, are recognized based on an evaluation of the progress to completion of specific tasks using data such as patient enrollment, clinical site activations or information provided to us by our vendors on their actual costs incurred. Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred and are reflected on the Consolidated Balance Sheets as prepaid or accrued research and development expenses. Our other significant accounting policies are described in Note 2, Summary of Significant Accounting Policies |
Financial Instruments and Fair
Financial Instruments and Fair Value Measurements | 6 Months Ended |
Jun. 30, 2021 | |
Financial Instruments and Fair Value Measurements | |
Financial Instruments and Fair Value Measurements | 3. Financial Instruments and Fair Value Measurements Fair value is defined as the exchange price that would be received to sell an asset or paid to transfer a liability (at exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The three levels of inputs that may be used to measure fair value include: Level 1: Quoted prices in active markets for identical assets or liabilities. Our Level 1 assets consist of money market investments. We do not have Level 1 liabilities. Level 2: Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities in active markets or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. We do not have Level 2 assets or liabilities. Level 3: Unobservable inputs that are supported by little or no market activity. We do not have Level 3 assets or liabilities. The following table identifies our assets and liabilities that were measured at fair value on a recurring basis (in thousands): Balance Level 1 Level 2 Level 3 June 30, 2021 Assets: Money market $ 132,928 $ 132,928 $ — $ — Total assets at fair value $ 132,928 $ 132,928 $ — $ — December 31, 2020 Assets: Money market $ 147,921 $ 147,921 $ — $ — Total assets at fair value $ 147,921 $ 147,921 $ — $ — There were no liabilities that were measured at fair value on a recurring basis as of June 30, 2021. Financial instruments not recorded at fair value include our convertible senior notes. At June 30, 2021, the carrying amount of the 2021 Notes was $64.4 million, which represents the aggregate principal amount net of remaining debt issuance costs, and the fair value was $63.1 million. At June 30, 2021, the carrying amount of the 2024 Notes (2019 Issuance) was $84.2 million, which represents the aggregate principal amount net of remaining debt issuance costs, and the fair value was $90.3 million. At June 30, 2021, the carrying amount of the 2024 Notes (2020 Issuance) was $56.7 million, which represents the aggregate principal amount net of remaining debt issuance costs, and the fair value was $60.2 million. At June 30, 2021, the carrying amount of the 2025 Notes was $294.9 million, which represents the aggregate principal amount net of remaining debt issuance costs, and the fair value was $223.2 million. The fair value was determined using Level 2 inputs based on the indicative pricing published by certain investment banks or trading levels of the convertible senior notes, which are not listed on any securities exchange or quoted on an inter-dealer automated quotation system. See Note 9, Debt |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2021 | |
Inventories | |
Inventories | 4. Inventories The following table presents inventories as of June 30, 2021 and December 31, 2020 (in thousands): June 30, December 31, 2021 2020 Work-in-process $ 94,138 $ 102,507 Finished goods, net 34,901 32,330 Total inventories $ 129,039 $ 134,837 At June 30, 2021, we had $25.0 million of current inventory and $104.0 million of long-term inventory. |
Other Current Assets
Other Current Assets | 6 Months Ended |
Jun. 30, 2021 | |
Other Current Assets | |
Other Current Assets | 5. Other Current Assets Other current assets were comprised of the following (in thousands): June 30, December 31, 2021 2020 Prepaid insurance $ 2,485 $ 782 Prepaid IT 553 753 Prepaid variable considerations 440 1,191 Prepaid expenses - other 3,852 2,193 Value-added tax ("VAT") receivable 3,545 2,202 Receivable - other 2,101 1,884 Other 80 125 Total $ 13,056 $ 9,130 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 6 Months Ended |
Jun. 30, 2021 | |
Intangible Assets and Goodwill | |
Intangible Assets and Goodwill | 6. Intangible Assets and Goodwill Intangible assets related to capitalized milestones under license agreements consisted of the following (in thousands): June 30, December 31, 2021 2020 Intangible asset - milestones $ 79,850 $ 79,850 Accumulated amortization (16,793) (14,107) Total intangible asset, net $ 63,057 $ 65,743 The estimated useful lives of these intangible assets are based on the estimated remaining patent life of Rubraca and extend through 2031 in Europe and 2035 in the U.S. We recorded amortization expense of $1.3 million and $2.7 million related to capitalized milestone payments during the three and six months ended June 30, 2021, respectively. We recorded amortization expense of $1.3 million and $2.5 million related to capitalized milestone payments during the three and six months ended June 30, 2020, respectively. Amortization expense is included in cost of sales – intangible asset amortization on the Consolidated Statements of Operations and Comprehensive Loss. Estimated future amortization expense associated with intangibles is expected to be as follows (in thousands): 2021 (remaining six months) $ 2,686 2022 5,371 2023 5,371 2024 5,371 2025 5,371 Thereafter 38,887 $ 63,057 |
Other Accrued Expenses
Other Accrued Expenses | 6 Months Ended |
Jun. 30, 2021 | |
Other Accrued Expenses | |
Other Accrued Expenses | 7. Other Accrued Expenses Other accrued expenses were comprised of the following (in thousands): June 30, December 31, 2021 2020 Accrued personnel costs $ 12,058 $ 18,334 Accrued interest payable for convertible senior notes 3,753 2,991 Income tax payable 1,340 907 Accrued corporate legal fees and professional services 280 459 Accrued royalties 5,579 6,617 Accrued variable considerations 13,901 11,701 Accrued expenses - other 6,499 4,199 Total $ 43,410 $ 45,208 |
Leases
Leases | 6 Months Ended |
Jun. 30, 2021 | |
Leases | |
Leases | 8. Leases At the inception of an arrangement, we determine whether the arrangement is or contains a lease based on the unique facts and circumstances. Most leases with a term greater than one year are recognized on the balance sheet as right-of-use assets, lease liabilities and, if applicable, long-term lease liabilities. We elected not to recognize on the balance sheet leases with terms of one year or less. Lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected lease term. The interest rate implicit in lease contracts is typically not readily determinable. As such, we utilize the appropriate incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term at an amount equal to the lease payments in a similar economic environment. Certain adjustments to the right-of-use asset may be required for items such as initial direct costs paid or incentives received. The components of a lease should be split into three categories: lease components (e.g. land, building, etc.), non-lease components (e.g. common area maintenance, maintenance, consumables, etc.) and non-components (e.g. property taxes, insurance, etc.). Then the fixed and in-substance fixed contract consideration (including any related to non-components) must be allocated based on fair values assigned to the lease components and non-lease components. Our facilities operating leases have lease components, non-lease components and non-components, which we have separated because the non-lease components and non-components have variable lease payments and are excluded from the measurement of the lease liabilities. The lease component results in a right-of-use asset being recorded on the balance sheet and amortized as lease expense on a straight-line basis to the statements of operations. We lease all of our office facilities in the U.S. and Europe. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. Most leases include one or more options to renew. The exercise of lease renewal options is at our sole discretion. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. Prior to June 30, 2021, we had a finance lease and operating lease for certain equipment at the dedicated production train at Lonza, our non-exclusive manufacturer of the Rubraca API. Pursuant to the terms of Amendment 2 discussed in Note 14, Commitments and Contingencies The components of lease expense and related cash flows were as follows (in thousands): Three months ended June 30, Three months ended June 30, 2021 2020 Lease cost Finance lease cost: Amortization of right-of-use assets $ 474 $ 474 Interest on lease liabilities 178 208 Operating lease cost 1,280 998 Short-term lease cost 80 116 Variable lease cost 640 472 Total lease cost $ 2,652 $ 2,268 Operating cash flows from finance leases $ 178 $ 208 Operating cash flows from operating leases $ 1,280 $ 998 Financing cash flows from finance leases $ 394 $ 364 Six months ended June 30, Six months ended June 30, 2021 2020 Lease cost Finance lease cost: Amortization of right-of-use assets $ 947 $ 947 Interest on lease liabilities 363 423 Operating lease cost 2,533 2,124 Short-term lease cost 160 222 Variable lease cost 1,163 1,070 Total lease cost $ 5,166 $ 4,786 Operating cash flows from finance leases $ 363 $ 423 Operating cash flows from operating leases $ 2,533 $ 2,124 Financing cash flows from finance leases $ 780 $ 720 The weighted-average remaining lease term and weighted-average discount rate were as follows: June 30, 2021 June 30, 2020 Weighted-average remaining lease term (years) Operating leases 6.2 7.0 Finance leases N/A 5.5 Weighted-average discount rate Operating leases 8% 8% Finance leases N/A 8% Future minimum commitments due under these lease agreements as of June 30, 2021 are as follows (in thousands): Operating Leases 2021 (remaining six months) 2,842 2022 5,249 2023 4,690 2024 4,686 2025 4,843 Thereafter 9,972 Present value adjustment (7,126) Present value of lease payments $ 25,156 |
Debt
Debt | 6 Months Ended |
Jun. 30, 2021 | |
Long-term Debt | |
Long-term Debt | 9. Debt The following is a summary of our convertible senior notes at June 30, 2021 and December 31, 2020 (principal amount in thousands): Principal Amount Principal Amount Conversion rate per $1,000 June 30, 2021 December 31, 2020 Interest Rate Maturity Date principal amount (shares) 2021 Notes $ 64,418 $ 64,418 2.50% September 15, 2021 16.1616 2024 Notes (2019 Issuance) 85,782 85,782 4.50% August 1, 2024 137.2213 2024 Notes (2020 Issuance) 57,500 57,500 4.50% August 1, 2024 160.3334 2025 Notes 300,000 300,000 1.25% May 1, 2025 13.1278 Total 507,700 507,700 Unamortized debt issuance costs (7,588) (8,656) Convertible senior notes $ 500,112 $ 499,044 Our convertible senior notes are governed by the terms of their respective indentures between the Company, as issuer, and The Bank of New York Mellon Trust Company, N.A., as trustee. Holders may convert all or any portion of the senior notes at any time prior to the close of business on the business day immediately preceding the maturity date. Upon conversion, the holders will receive shares of our common stock at an initial conversion rate as noted above. The conversion rate is subject to adjustment upon the occurrence of certain events described in the indentures. If we undergo a fundamental change, as defined in the indenture, prior to the maturity date of the senior notes, holders may require us to repurchase for cash all or any portion of the senior notes at a fundamental change repurchase price equal to 100% of the principal amount of the senior notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. The senior notes rank senior in right of payment to any of our indebtedness that is expressly subordinated in right of payment to the senior notes; equal in right of payment to all of our liabilities that are not so subordinated; effectively junior in right of payment to any secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities (including trade payables) of our subsidiaries. The debt issuance costs are presented as a deduction from the convertible senior notes on the Consolidated Balance Sheets and are amortized as interest expense over the expected life of the convertible senior notes using the effective interest method. Sixth Street Financing Agreement On May 1, 2019, we entered into a financing agreement (the “Financing Agreement”) with certain affiliates of Sixth Street Partners, LLC (“Sixth Street”) in which we plan to borrow from Sixth Street amounts required to reimburse our actual costs and expenses incurred during each fiscal quarter (limited to agreed budgeted amounts), as such expenses are incurred, related to the ATHENA clinical trial, in an aggregate amount of up to $175 million (the amount actually borrowed, the “Borrowed Amount”). We incur borrowings under the Financing Agreement on a quarterly basis, beginning with such expenses incurred during the quarter ended March 31, 2019 and ending generally by September 30, 2022. We are obligated to repay on a quarterly basis, beginning by September 30, 2022 (the “Repayment Start Date”). Quarterly payments are generally 9.75% of the direct worldwide Rubraca net sales, capped at $8.5 million. Dates and amounts may be impacted by certain milestones achieved by our ATHENA clinical trial. The maximum amount required to be repaid under the Financing Agreement is two times the aggregate Borrowed Amount, which may be $350 million in the event we borrow the full $175 million under the Financing Agreement. See full details of the Financing Agreement in our 2020 Form 10-K. Our obligations under the Financing Agreement are secured under a Pledge and Security agreement by a first priority security interest in all of our assets related to Rubraca, including intellectual property rights and a pledge of the equity of our wholly owned subsidiaries, Clovis Oncology UK Limited and Clovis Oncology Ireland Limited. In addition, the obligations are guaranteed by Clovis Oncology UK Limited and Clovis Oncology Ireland Limited, secured by a first priority security interest in all the assets of those subsidiaries. For the six months ended June 30, 2021, we have recorded $147.4 million as a long-term liability on the Consolidated Balance Sheets and future quarterly draws will be recorded as a long-term liability on the Consolidated Balance Sheets. In connection with the transaction, we incurred $1.8 million of debt issuance costs. The debt issuance costs are presented as a deduction from the Sixth Street financing liability on the Consolidated Balance Sheets and are amortized as interest expense over the expected life of the Financing Agreement using the straight-line method. As of June 30, 2021, the balance of unamortized debt issuance costs was $1.4 million. For the six months ended June 30, 2021, we used an effective interest rate of 14.6%, which is based on the estimate of remaining cash flows. For subsequent periods, we will use the prospective method whereby a new effective interest rate is determined based on the revised estimate of remaining cash flows. The new rate is the discount rate that equates the present value of the revised estimate of remaining cash flows with the carrying amount of the debt, and it will be used to recognize interest expense for the remaining periods. Under this method, the effective interest rate is not constant, and any change in expected cash flows is recognized prospectively as an adjustment to the effective yield. The following table sets forth total interest expense recognized during the three and six months ended June 30, 2021 and 2020 (in thousands): Three months ended June 30, Six months ended June 30, 2021 2020 2021 2020 Interest on convertible notes $ 2,952 $ 2,811 $ 5,929 $ 5,994 Amortization of debt issuance costs 622 637 1,260 1,423 Debt issuance cost derecognized related to convertible debt transactions — 789 — 4,344 Interest on finance lease 178 208 363 423 Interest on borrowings under financing agreement 4,993 2,264 9,203 4,055 Other interest 25 30 52 61 Total interest expense $ 8,770 $ 6,739 $ 16,807 $ 16,300 |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2021 | |
Stockholders' Equity | |
Stockholders' Equity | 10. Stockholders’ Equity Common Stock The holders of common stock are entitled to one vote per share on all matters to be voted upon by our stockholders. Subject to the preferences that may be applicable to any outstanding shares of preferred stock, the holders of common stock are entitled to receive ratably such dividends, if any, as may be declared by our Board of Directors. On May 17, 2021, we entered into a distribution agreement (the “Distribution Agreement”) with J.P. Morgan Securities LLC and BofA Securities, Inc., as agents (the “Agents”), pursuant to which we may offer and sell, from time to time, through the Agents, shares of our common stock having an aggregate offering price of up to $75.0 million in transactions that are deemed to be “at the market” offerings as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended, including sales made by means of ordinary brokers’ transactions, including directly on the Nasdaq Global Select Market or into any other existing trading market for the Shares, or sales made to or through a market maker, in block transactions or by any other method permitted by law, including negotiated transactions. Sales may be made at market prices prevailing at the time of a sale or at prices related to prevailing market prices or at negotiated prices. During the period between May 18, 2021 and June 9, 2021, we sold an aggregate of 13,492,231 shares of our common stock under the Distribution Agreement resulting gross proceeds of $75.0 million and net proceeds to us of $72.5 million, after deducting commissions and offering expenses, effectively closing out sales we may make pursuant to the Distribution Agreement. We have used and intend to use the net proceeds of this offering for general corporate purposes, including funding of our development programs, sales and marketing expenses associated with Rubraca, repayment, repurchase or refinance of our debt obligations, payment of milestones pursuant to our license agreements, general and administrative expenses, acquisition or licensing of additional product candidates or businesses and working capital. Accumulated Other Comprehensive Loss Accumulated other comprehensive loss consists of changes in foreign currency translation adjustments, which includes changes in a subsidiary’s functional currency, and unrealized gains and losses on available-for-sale securities. The changes in accumulated balances related to each component of other comprehensive income (loss) are summarized for the three months ended June 30, 2021 and 2020, as follows (in thousands): Foreign Currency Unrealized Total Accumulated Translation Adjustments (Losses) Gains Other Comprehensive Loss 2021 2020 2021 2020 2021 2020 Balance at April 1, $ (44,245) $ (44,835) $ (139) $ (55) $ (44,384) $ (44,890) Other comprehensive income (loss) 14 61 — (84) 14 (23) Total before tax (44,231) (44,774) (139) (139) (44,370) (44,913) Tax effect — — — — — — Balance at June 30, $ (44,231) $ (44,774) $ (139) $ (139) $ (44,370) $ (44,913) The changes in accumulated balances related to each component of other comprehensive income (loss) are summarized for the six months ended June 30, 2021 and 2020, as follows (in thousands): Foreign Currency Unrealized Total Accumulated Translation Adjustments (Losses) Gains Other Comprehensive Loss 2021 2020 2021 2020 2021 2020 Balance at January 1, $ (44,165) $ (44,732) $ (139) $ (133) $ (44,304) $ (44,865) Other comprehensive (loss) income (66) (42) — (6) (66) (48) Total before tax (44,231) (44,774) (139) (139) (44,370) (44,913) Tax effect — — — — — — Balance at June 30, $ (44,231) $ (44,774) $ (139) $ (139) $ (44,370) $ (44,913) There were no reclassifications out of accumulated other comprehensive loss in each of the three and six months ended June 30, 2021 and 2020. |
Share-Based Compensation
Share-Based Compensation | 6 Months Ended |
Jun. 30, 2021 | |
Share-Based Compensation | |
Share-Based Compensation | 11. Share-Based Compensation Share-based compensation expense for all equity-based programs, including stock options, restricted stock units and the employee stock purchase plan, for the three and six months ended June 30, 2021 and 2020 was recognized in the accompanying Consolidated Statements of Operations and Comprehensive Loss as follows (in thousands): Three months ended June 30, Six months ended June 30, 2021 2020 2021 2020 Research and development $ 3,474 $ 6,636 $ 6,350 $ 13,561 Selling, general and administrative 3,888 6,677 5,051 12,713 Total share-based compensation expense $ 7,362 $ 13,313 $ 11,401 $ 26,274 We did not recognize a tax benefit related to share-based compensation expense during the three and six months ended June 30, 2021 and 2020, as we maintain net operating loss carryforwards and have established a valuation allowance against the entire net deferred tax asset as of June 30, 2021. Stock Options The following table summarizes the activity relating to our options to purchase common stock for the six months ended June 30, 2021: Weighted Weighted Average Aggregate Average Remaining Intrinsic Number of Exercise Contractual Value Options Price Term (Years) (Thousands) Outstanding at December 31, 2020 6,502,169 $ 37.78 Granted 1,017,132 6.11 Exercised (7,087) 4.98 Forfeited (316,917) 39.02 Outstanding at June 30, 2021 7,195,297 $ 33.28 5.8 $ 309 Vested and expected to vest at June 30, 2021 7,007,820 $ 33.93 5.7 $ 277 Vested and exercisable at June 30, 2021 5,440,479 $ 40.40 4.8 $ 84 The aggregate intrinsic value in the table above represents the pretax intrinsic value, based on our closing stock price of $5.80 as of June 30, 2021, which would have been received by the option holders had all option holders with in-the-money options exercised their options as of that date. The following table summarizes information about our stock options as of and for the three and six months ended June 30, 2021 and 2020 (in thousands, except per share amounts): Three months ended June 30, Six months ended June 30, 2021 2020 2021 2020 Weighted-average grant date fair value per share $ 4.72 $ 5.06 $ 4.85 $ 5.87 Intrinsic value of options exercised $ 1 $ 87 $ 15 $ 91 Cash received from stock option exercises $ 8 $ 72 $ 35 $ 74 As of June 30, 2021, the unrecognized share-based compensation expense related to unvested options, adjusted for expected forfeitures, was $14.1 million and the estimated weighted-average remaining vesting period was 1.6 years. Restricted Stock The following table summarizes the activity relating to our unvested restricted stock units (“RSUs”) for the six months ended June 30, 2021: Weighted Average Number of Grant Date Units Fair Value Unvested at December 31, 2020 2,964,297 $ 14.36 Granted 2,631,278 6.22 Vested (1,047,175) 16.73 Forfeited (294,733) 9.10 Unvested at June 30, 2021 4,253,667 $ 9.11 Expected to vest after June 30, 2021 3,655,671 $ 9.35 As of June 30, 2021, the unrecognized share-based compensation expense related to unvested RSUs, adjusted for expected forfeitures, was $35.3 million and the estimated weighted-average remaining vesting period was 2.3 years. |
License Agreements
License Agreements | 6 Months Ended |
Jun. 30, 2021 | |
License Agreements | |
License Agreements | 12. License Agreements Rucaparib In June 2011, we entered into a license agreement with Pfizer, Inc. (“Pfizer”) to obtain the exclusive global rights to develop and commercialize Rubraca. The exclusive rights are exclusive even as to Pfizer and include the right to grant sublicenses. Pursuant to the terms of the license agreement, we made a $7.0 million upfront payment to Pfizer and are required to make additional payments to Pfizer for the achievement of certain development and regulatory and sales milestones and royalties on sales as required by the license agreement. Prior to the FDA approval of Rubraca, we made milestone payments of $1.4 million, which were recognized as acquired in-process research and development expense. During 2016 through 2020, we paid Pfizer a total of $82.5 million in milestone payments related to FDA and European Commission approvals received for Rubraca. These milestone payments were recognized as intangible assets and are amortized over the estimated remaining useful life of Rubraca. We are obligated under the license agreement to use commercially reasonable efforts to develop and commercialize Rubraca and we are responsible for all ongoing development and commercialization costs for Rubraca. We are required to make regulatory milestone payments to Pfizer of up to an additional $8.0 million in aggregate if specified clinical study objectives and regulatory filings, acceptances and approvals are achieved. In addition, we are obligated to make sales milestone payments to Pfizer if specified annual sales targets for Rubraca are met, which relate to annual sales targets of $250.0 million and above, which, in the aggregate, could amount to total milestone payments of $170.0 million, and tiered royalty payments at a mid-teen percentage rate on net sales, with standard provisions for royalty offsets to the extent we need to obtain any rights from third parties to commercialize Rubraca. The license agreement with Pfizer will remain in effect until the expiration of all of our royalty and sublicense revenue obligations to Pfizer, determined on a product-by-product and country-by-country basis, unless we elect to terminate the license agreement earlier. If we fail to meet our obligations under the agreement and are unable to cure such failure within specified time periods, Pfizer can terminate the agreement, resulting in a loss of our rights to Rubraca and an obligation to assign or license to Pfizer any intellectual property rights or other rights we may have in Rubraca, including our regulatory filings, regulatory approvals, patents and trademarks for Rubraca. In April 2012, we entered into a license agreement with AstraZeneca to acquire exclusive rights associated with Rubraca under a family of patents and patent applications that claim methods of treating patients with PARP inhibitors in certain indications. The license enables the development and commercialization of Rubraca for the uses claimed by these patents. AstraZeneca also receives royalties on net sales of Rubraca. FAP-2286 and the R adionuclide Therapy Development Program In September 2019, we entered into a global license and collaboration agreement with 3BP to develop and commercialize a PTRT and imaging agent targeting FAP. The lead candidate, designated internally as FAP-2286, is being developed pursuant to a global development plan agreed to by the parties. We are responsible for the costs of all preclinical and clinical development activities described in the plan, including the costs for a limited number of 3BP full-time equivalents and external costs incurred during the preclinical development phase of the collaboration. Upon the signing of the license and collaboration agreement in September 2019, we made a $9.4 million upfront payment to 3BP, which we recognized as acquired in-process research and development expense. Pursuant to the terms of the FAP agreement, we are required to make additional payments to 3BP for annual technology access fees and upon the achievement of certain development and regulatory milestone events (or on certain dates, whichever occur earlier). We are also obligated to pay 3BP single- to low-double-digit royalties on net sales of the FAP-targeted therapeutic product and imaging agent, based on the volume of annual net sales achieved. In addition, 3BP is entitled to receive 34% of any consideration, excluding royalties on the therapeutic product, pursuant to any sublicenses we may grant. We are obligated under the license and collaboration agreement to use diligent efforts to develop FAP-2286 and commercialize a FAP-targeted therapeutic product and imaging agent, and we are responsible for all commercialization costs in our territory. The agreement with 3BP will remain in effect until the expiration of our royalty obligations to 3BP, determined on a product-by-product and country-by-country basis, unless we elect to terminate the agreement earlier. If we fail to meet our obligations under the agreement and are unable to cure such failure within specified time periods, 3BP can terminate the agreement, resulting in a loss of our rights. 3BP also has the right to terminate the agreement under certain circumstances in connection with our change of control in which the acquiring party retains a product competitive with the FAP-targeted therapeutic product or, in the event marketing authorization has not yet been obtained, does not agree to the then-current global development plan. We submitted two INDs for FAP-2286 for use as imaging and treatment agents in December 2020 to support an initial Phase 1 study to determine the dose and tolerability of FAP-2286 as a therapeutic agent with expansion cohorts planned in multiple tumor types as part of a global development program. In April 2021, we made a milestone payment to 3BP under the license and collaboration agreement of $2.2 million as a result of the FDA’s acceptance of the IND for the treatment agent. In February 2020, we finalized the terms of a drug discovery collaboration agreement with 3BP to identify up to three additional, undisclosed targets for peptide-targeted radionuclide therapy, to which we will obtain global rights for any resulting product candidates. We are responsible for the costs of all preclinical and clinical development activities conducted under the discovery program, including the costs for a limited number of 3BP full-time equivalents and external costs incurred during the discovery and preclinical development phase for each collaboration target. The discovery collaboration agreement was effective December 31, 2019, for which we incurred a $2.1 million technology access fee, which we accrued and recognized as a research and development expense. Pursuant to the terms of the discovery collaboration agreement, we are required to make additional payments to 3BP for annual technology access fees and upon the achievement of certain development and regulatory milestone events (or on certain dates, whichever occur earlier). We are also obligated to pay 3BP a 6% royalty on net sales of License Products (as defined in the agreement), based on the volume of quarterly net sales achieved. We are obligated under the discovery collaboration agreement to use diligent efforts to develop and commercialize the product candidates, if any, that result from the discovery program, and we are responsible for all clinical development and commercialization costs. The agreement with 3BP will remain in effect until the expiration of our royalty obligations to 3BP, determined on a product-by-product and country-by-country basis, unless we elect to terminate the agreement earlier. If we fail to meet our obligations under the agreement and are unable to cure such failure within specified time periods, 3BP can terminate the agreement, resulting in a loss of our rights. Lucitanib On November 19, 2013, we acquired all of the issued and outstanding capital stock of EOS pursuant to the terms set forth in that certain Stock Purchase Agreement, dated as of November 19, 2013 (the “Stock Purchase Agreement”), by and among the Company, EOS, its shareholders (the “Sellers”) and Sofinnova Capital V FCPR, acting in its capacity as the Sellers’ representative. Following the acquisition, EOS became a wholly-owned subsidiary of the Company. Under the terms of the Stock Purchase Agreement, in addition to the initial purchase price paid at the time of the closing of the acquisition and other license fees due to Advenchen described below, we will also be obligated to pay to the Sellers a milestone payment of $65.0 million upon obtaining the first NDA approval from the FDA with respect to lucitanib. In October 2008, Ethical Oncology Science, S.p.A. (“EOS”) (now known as Clovis Oncology Italy S.r.l.) entered into an exclusive license agreement with Advenchen Laboratories LLC (“Advenchen”) to develop and commercialize lucitanib on a global basis, excluding China. We are obligated to pay Advenchen tiered royalties at percentage rates in the mid-single digits on net sales of lucitanib, based on the volume of annual net sales achieved. In addition, after giving effect to the first and second amendments to the license agreement, we are required to pay to Advenchen 25% of any consideration, excluding royalties, we receive from sublicensees, in lieu of the milestone obligations set forth in the agreement. We are obligated under the agreement to use commercially reasonable efforts to develop and commercialize at least one product containing lucitanib, and we are also responsible for all remaining development and commercialization costs for lucitanib. The license agreement with Advenchen will remain in effect until the expiration of all of our royalty obligations to Advenchen, determined on a product-by-product and country-by-country basis, unless we elect to terminate the agreement earlier. If we fail to meet our obligations under the agreement and are unable to cure such failure within specified time periods, Advenchen can terminate the agreement, resulting in a loss of our rights to lucitanib. |
Net Loss Per Common Share
Net Loss Per Common Share | 6 Months Ended |
Jun. 30, 2021 | |
Net Loss Per Common Share | |
Net Loss Per Common Share | 13. Net Loss Per Common Share Basic net loss per share is calculated by dividing net loss by the weighted-average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted-average number of common share equivalents outstanding using the treasury-stock method for the stock options and RSUs and the if-converted method for the convertible senior notes. As a result of our net losses for the periods presented, all potentially dilutive common share equivalents were considered anti-dilutive and were excluded from the computation of diluted net loss per share. The shares outstanding at the end of the respective periods presented in the table below were excluded from the calculation of diluted net loss per share due to their anti-dilutive effect (in thousands): Three and six months ended June 30, 2021 2020 Common shares under stock incentive plans 4,524 4,156 Convertible senior notes 25,969 25,648 Total potential dilutive shares 30,493 29,804 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2021 | |
Commitments and Contingencies | |
Commitments and Contingencies | 14. Commitments and Contingencies Royalty and License Fee Commitments We have entered into certain license agreements, as identified in Note 12, License Agreements Manufacture and Services Agreement Commitments On October 3, 2016, we entered into a Manufacturing and Services Agreement (the “Agreement”) with a non-exclusive third-party supplier for the production of the active ingredient for Rubraca. Under the terms of the Agreement, we will provide the third-party supplier a rolling forecast for the supply of the active ingredient in Rubraca that will be updated by us on a quarterly basis. We are obligated to order material sufficient to satisfy an initial quantity specified in a forecast. In addition, the third-party supplier has constructed, in its existing facility, a production train that will be exclusively dedicated to the manufacture of the Rubraca active ingredient. We made scheduled capital program fee payments toward capital equipment and other costs associated with the construction of the dedicated production train. Beginning in the fourth quarter of 2018, once the facility was operational, we were obligated to pay a fixed facility fee each quarter for the duration of the Agreement, which expires on December 31, 2025, unless extended by mutual consent of the parties. As of June 30, 2021, $49.4 million of purchase commitments remain under the Agreement. At the time we entered into the Agreement, we evaluated the Agreement as a whole and bifurcated into lease and non-lease components, which consisted of an operating lease of warehouse space, financial lease of equipment, purchase of leasehold improvements and prepaid manufacturing costs based upon the relative fair values of each of the deliverables. During October 2018, the production train was placed into service and we recorded the various components of the Agreement. On June 16, 2021, we entered into amendment no. 2 of the Agreement with Lonza (“Amendment 2”). Pursuant to the terms of Amendment 2, we are paying Lonza $1.1 million to repurpose the production train so that Lonza will be able to use the facility to manufacture other products for third parties in addition to API for Clovis. Lonza is guaranteeing a minimum percentage usage of this production train for third parties and Lonza would reduce our fixed facility fee starting in 2023 based on this minimum percentage usage. If Lonza is able to utilize greater than the minimum guaranteed percentage, it will increase the reduction to our fixed facility fee. We evaluated Amendment 2 and determined that we no longer have a lease with Lonza at June 30, 2021 because Amendment 2 modified the terms of the Agreement in that Lonza will use a portion of the production train for third parties. The Agreement no longer conveys the right to direct the use of the identified asset and Clovis no longer has the right to obtain substantially all the economic benefit from the asset. As a result, the arrangement is no longer in scope of Legal Proceedings We and certain of our officers were named as defendants in several lawsuits, as described below. We cannot reasonably predict the outcome of these legal proceedings, nor can we estimate the amount of loss or range of loss, if any, that may result. An adverse outcome in these proceedings could have a material adverse effect on our results of operations, cash flows or financial condition. Rociletinib-Related Litigation In March 2017, two putative shareholders of the Company, Macalinao and McKenry (“ Plaintiffs”), filed shareholder derivative complaints against certain directors and officers of the Company in the Court of Chancery of the State of Delaware. On May 4, 2017, the Macalinao and McKenry actions were consolidated for all purposes in a single proceeding under the caption In re Clovis Oncology, Inc. Derivative Litigation, Case No, 2017-0222 (the “Consolidated Derivative Action”). On May 18, 2017, Plaintiffs filed a Consolidated Verified Shareholder Derivative Complaint (the “Consolidated Derivative Complaint”). The Consolidated Derivative Complaint generally alleged that the defendants breached their fiduciary duties owed to the Company by allegedly causing or allowing misrepresentations of the Company’s business operations and prospects, failing to ensure that the TIGER-X clinical trial for rociletinib was being conducted in accordance with applicable rules, regulations and protocols, and engaging in insider trading. The Consolidated Derivative Complaint sought, among other things, an award of money damages. On July 31, 2017, the defendants filed a motion to dismiss the Consolidated Derivative Complaint. Plaintiffs filed an opposition to the motion to dismiss on August 31, 2017, and the defendants filed a reply in further support of the motion to dismiss on September 26, 2017. While the motion to dismiss remained pending, on November 19, 2018, Plaintiffs filed a motion for leave to file a supplemental consolidated complaint, and on November 20, 2018, the Court granted that motion. On November 27, 2018, Plaintiffs filed their supplemental complaint (the “Supplemental Derivative Complaint”), which adds allegations concerning the Company’s, Mr. Mahaffy’s and Mr. Mast’s settlements with the United States Securities and Exchange Commission. Pursuant to a briefing schedule entered by the Court, the defendants filed a supplemental motion to dismiss the Supplemental Derivative Complaint on February 6, 2019; Plaintiffs filed an opposition brief on February 22, 2019; and the defendants filed a reply brief on March 5, 2019. The Court held oral arguments on the defendants’ motions to dismiss on June 19, 2019. At the oral arguments, the Court ordered the parties to submit supplemental letter briefs on the motion to dismiss. On October 1, 2019, Vice Chancellor Joseph R. Slights III of the Delaware Chancery Court, issued a Memorandum Opinion granting in part and denying in part defendants’ motions to dismiss. The Supplemental Derivative Complaint was dismissed as to Plaintiffs’ derivative claims for unjust enrichment and insider trading. The Court allowed Plaintiffs’ remaining derivative claim for breach of fiduciary duty to proceed. Defendants filed an answer to the Supplemental Derivative Complaint on December 27, 2019. On December 17, 2019, the parties participated in a mediation, which did not result in a settlement. On December 22, 2019, the Company’s Board of Directors formed a Special Litigation Committee (the “SLC”) to conduct an investigation of the claims asserted in the Supplemental Derivative Complaint. On February 18, 2020, the SLC moved to stay all proceedings in the Consolidated Derivative Action pending completion of its investigation. Plaintiffs filed their opposition to the motion to stay on March 3, 2020 and the SLC filed its reply on March 13, 2020. On May 12, 2020, after hearing oral argument, Vice Chancellor Slights granted the SLC’s motion to stay proceedings until September 18, 2020 so that the SLC may complete its investigation. On September 11, 2020, Vice Chancellor Slights granted the parties’ request to extend the stay until October 31, 2020, to allow the SLC further time to complete its investigation. On October 26, 2020, Vice Chancellor Slights granted the parties’ request to further extend the stay until November 15, 2020. On November 13, 2020, Vice Chancellor Slights granted the parties’ request to further extend the stay until December 15, 2020. On December 16, 2020, the SLC filed a report (the “SLC Report”) containing the findings of its investigation. The SLC Report concludes that the claims asserted in the Consolidated Derivative Action lack merit. Specifically, the SLC Report finds that the defendants did not breach their fiduciary duties in connection with the Company’s TIGER-X clinical trial. Accordingly, on the same date that the SLC Report was filed, the SLC filed a motion to terminate the Consolidated Derivative Action in Delaware Chancery Court. A briefing schedule on the motion to terminate has not yet been set. On March 26, 2021, in response to discovery requests from Plaintiffs, the SLC filed a motion for a protective order seeking to preclude discovery into the merits of the claims investigated by the SLC. On March 29, 2021, the Company joined the SLC’s motion for a protective order. Pursuant to a scheduling stipulation entered by the Court on April 5, 2021, Plaintiffs filed an opposition to the motion for a protective order on April 16, 2021, and the SLC filed its reply on April 30, 2021. Oral argument on the SLC’s motion for a protective order, originally scheduled for May 24, 2021, will occur on August 23, 2021. While the motion to terminate the action remains pending before Vice Chancellor Slights, the Company does not believe this litigation will have a material impact on its financial position or results of operations. European Patent Opposition Two European patents in the rucaparib camsylate salt/polymorph patent family (European Patent 2534153 and its divisional European Patent 3150610) were opposed. In particular, opposition notices against European Patent 2534153 were filed by two parties on June 20, 2017. During an oral hearing that took place on December 4, 2018, the European Patent Office’s Opposition Division maintained European Patent 2534153 in amended and narrowed form with claims to certain crystalline forms of rucaparib camsylate, including, but not limited to, rucaparib S-camsylate Form A, the crystalline form in Rubraca. Clovis and one opponent, Hexal AG, appealed the written decision of the European Opposition Division and filed reply appeal briefs in early November 2019. An opposition against European Patent 3150610 was filed by Generics (UK) Limited on April 30, 2020 on grounds similar to those raised in the opposition notices against European Patent 2534153, which grounds are common in such proceedings. Moreover, these grounds of opposition, as well as documents based on which lack of patentability has been alleged, were considered by the European Patent Office during the examination stage, and the claims were deemed to comply with the applicable law when granting the patent. Clovis responded to the opposition notice in European Patent 3150610 on January 8, 2021, amending the claims to be directed to the use of rucaparib maleate in a method of inhibiting PARP activity or treating cancer. A preliminary opinion and summons to oral proceedings were issued on January 26, 2021. The oral hearing is scheduled for November 18, 2021. The preliminary opinion provides a non-binding indication of the Opposition Division’s initial view based on the documents that have thus far been submitted, which agrees with our positions on a number of grounds of opposition and agrees with an objection made by the opponent, but only with respect to some of the claims. As part of the opposition proceedings, we have the opportunity to submit further arguments and pursue alternative claims in the form of auxiliary requests. While the ultimate results of patent challenges can be difficult to predict, it is our view that a number of factors support patentability, and we believe a successful challenge of all claims would be difficult. |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2021 | |
Segment Information | |
Segment Information | 15. Segment Information The following table presents information about our reportable segments for the three months ended June 30, 2021 and 2020 (in thousands): Three months ended June 30, 2021 2020 U.S. Ex-U.S. Total U.S. Ex-U.S. Total Product revenue $ 27,680 $ 9,140 $ 36,820 $ 36,719 $ 3,168 $ 39,887 Operating expenses: Cost of sales - product 5,402 2,892 8,294 7,522 1,598 9,120 Cost of sales - intangible asset amortization 620 723 1,343 557 723 1,280 Research and development 43,774 1,985 45,759 67,862 2,016 69,878 Selling, general and administrative 26,351 6,567 32,918 35,969 5,933 41,902 Acquired in-process research and development 2,204 — 2,204 — — — Other operating expenses 3,884 — 3,884 355 — 355 Total expenses 82,235 12,167 94,402 112,265 10,270 122,535 Operating loss $ (54,555) $ (3,027) (57,582) $ (75,546) $ (7,102) (82,648) Other income (expense): Interest expense (8,770) (6,739) Foreign currency (loss) gain (206) 142 Loss on extinguishment of debt — (3,277) Other income 107 239 Other income (expense), net (8,869) (9,635) Loss before income taxes (66,451) (92,283) Income tax benefit 3 36 Net loss $ (66,448) $ (92,247) The following table presents information about our reportable segments for the six months ended June 30, 2021 and 2020 (in thousands): Six months ended June 30, 2021 2020 U.S. Ex-U.S. Total U.S. Ex-U.S. Total Product revenue $ 59,381 $ 15,492 $ 74,873 $ 76,022 $ 6,429 $ 82,451 Operating expenses: Cost of sales - product 11,560 5,002 16,562 15,577 2,639 18,216 Cost of sales - intangible asset amortization 1,241 1,445 2,686 1,047 1,445 2,492 Research and development 94,604 3,960 98,564 134,149 3,950 138,099 Selling, general and administrative 50,672 12,187 62,859 72,124 12,376 84,500 Acquired in-process research and development 2,204 — 2,204 — — — Other operating expenses 7,591 — 7,591 3,805 — 3,805 Total expenses 167,872 22,594 190,466 226,702 20,410 247,112 Operating loss $ (108,491) $ (7,102) (115,593) $ (150,680) $ (13,981) (164,661) Other income (expense): Interest expense (16,807) (16,300) Foreign currency loss (752) (735) Loss on convertible senior notes conversion — (7,791) Loss on extinguishment of debt — (3,277) Other income 290 1,081 Other income (expense), net (17,269) (27,022) Loss before income taxes (132,862) (191,683) Income tax benefit 137 104 Net loss $ (132,725) $ (191,579) |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2021 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation All financial information presented includes the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. The unaudited financial statements of Clovis Oncology, Inc. included herein reflect all adjustments that, in the opinion of management, are necessary to fairly state our financial position, results of operations and cash flows for the periods presented herein. Interim results may not be indicative of the results that may be expected for the full year. Certain information and footnote disclosures normally included in audited financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto which are included in our Annual Report on Form 10-K for the year ended December 31, 2020 (“2020 Form 10-K”) for a broader discussion of our business and the opportunities and risks inherent in such business. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, expenses and revenue and related disclosures. On an ongoing basis, we evaluate our estimates, including estimates related to revenue deductions, intangible asset impairment, clinical trial accruals and share-based compensation expense. We base our estimates on historical experience and other market-specific or other relevant assumptions that we believe to be reasonable under the circumstances. Actual results may differ from those estimates or assumptions. |
Liquidity | Liquidity We have incurred significant net losses since inception and have relied on our ability to fund our operations through debt and equity financings. We expect operating losses and negative cash flows to continue for the foreseeable future. As we continue to incur losses, transition to profitability is dependent upon achieving a level of revenue from Rubraca adequate to support our cost structure. We may never achieve profitability, and unless or until we do, we will continue to need to raise additional cash. Based on current estimates, we believe that our cash, cash equivalents and liquidity available under our financing agreement related to our ATHENA trial, together with current estimates for revenues generated by sales of Rubraca, will allow us to fund our operating plan through at least the next 12 months. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards From time to time, the Financial Accounting Standards Board (“FASB”) or other standards-setting bodies issue new accounting pronouncements. Updates to the FASB Accounting Standards Codification (“ASC”) are communicated through the issuance of an Accounting Standards Update (“ASU”). In August 2020, the FASB issued guidance that simplifies an issuer’s accounting for debt and equity instruments. The guidance is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early application is permitted. We plan to adopt this guidance on January 1, 2022. We will evaluate the impact this guidance may have on our consolidated financial statements and related disclosures as the adoption date approaches. |
Revenue Recognition | Revenue Recognition We are currently approved to sell Rubraca in the United States and Europe markets. We distribute our product principally through a limited number of specialty distributor and specialty pharmacy providers, collectively, our customers. Our customers subsequently sell our products to patients and health care providers. Separately, we have arrangements with certain payors and other third parties that provide for government-mandated and privately-negotiated rebates, chargebacks and discounts. Product Revenue Revenue from product sales are recognized when the performance obligation is satisfied, which is when customers obtain control of our product at a point in time, typically upon delivery. We expense incremental costs of obtaining a contract as and when incurred if the expected amortization period of the asset that we would have recognized is one year or less. Reserves for Variable Consideration Revenues from product sales are recorded at the net sales price (transaction price), which includes estimates of variable consideration for which reserves are established and which result from price concessions that include rebates, chargebacks, discounts, co-pay assistance, estimated product returns and other allowances that are offered within contracts between us and our customers, health care providers, payors and other indirect customers relating to the sales of our product. These reserves are based on the amounts earned or to be claimed on the related sales and are classified as reductions of accounts receivable or a current liability. Where appropriate, these estimates take into consideration a range of possible outcomes which are probability-weighted for relevant factors such as our historical experience, current contractual and statutory requirements, specific known market events and trends, industry data and forecasted customer buying and payment patterns. Overall, these reserves reflect our best estimates of the amount of consideration to which we are entitled based on the terms of the contract. The amount of variable consideration which is included in the transaction price may be constrained and is included in the net sales price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. 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 product revenue and earnings in the period such variances become known. Government Rebates GPO and Payor Rebates. Chargebacks Discounts and Fees Co-pay assistance Returns |
Cost of Sales | Cost of Sales – Product Product cost of sales consists primarily of materials, third-party manufacturing costs as well as freight and royalties owed to our licensing partners for Rubraca sales. Cost of Sales – Intangible Asset Amortization Cost of sales for intangible asset amortization consists of the amortization of capitalized milestone payments made to our licensing partners upon FDA approval of Rubraca. Milestone payments are amortized on a straight-line basis over the estimated remaining patent life of Rubraca. |
Accounts Receivable | Accounts Receivable We provide an allowance for credit losses based on experience and specifically identified risks. Accounts receivable are charged off against the allowance when we determine that recovery is unlikely and we cease collection efforts. |
Inventory | Inventory Inventories are stated at the lower of cost or estimated net realizable value, on a first-in, first-out (“FIFO”) basis. Inventories include active pharmaceutical ingredient (“API”), contract manufacturing costs and overhead allocations. We begin capitalizing incurred inventory related costs upon regulatory approval. Prior to regulatory approval, incurred costs for the manufacture of the drugs that could potentially be available to support the commercial launch of our products are recognized as research and development expense. We regularly analyze our inventory levels for excess quantities and obsolescence (expiration), considering factors such as historical and anticipated future sales compared to quantities on hand and the remaining shelf-life of Rubraca. Rubraca finished goods have a shelf-life of four years from the date of manufacture. We expect to sell the finished goods prior to expiration. The API currently has a shelf-life of four years from the date of manufacture but can be retested at an immaterial cost with no expected reduction in potency, thereby extending its shelf-life as needed. We expect to consume substantially all of the API over a period of approximately six years based on our long-range sales projections of Rubraca. We write down inventory that has become obsolete, inventory that has a cost basis in excess of its estimated realizable value and/or inventory in excess of expected sales requirements. Expired inventory would be disposed of and the related costs would be written off as cost of product revenue. Inventories that are not expected to be consumed within 12 months following the balance sheet date are classified as long-term inventories. Long-term inventories primarily consist of API. API is currently produced by Lonza. As the API has undergone significant manufacturing specific to its intended purpose at the point it is purchased by us, we classify the API as work-in-process inventory. In addition, we currently manufacture Rubraca finished goods with a single third-party manufacturer. The disruption or termination of the supply of API or the disruption or termination of the manufacturing of our commercial products could have a material adverse effect on our business, financial position and results of operations. API that is written off due to damage and certain costs related to our dedicated production train at Lonza are included in Other Operating Expenses on the Consolidated Statements of Operations and Comprehensive Loss. Inventory used in clinical trials is expensed as research and development expense when it has been identified for such use. |
Segment Information | Segment Information We have two operating and reportable segments, U.S. and ex-U.S., based on product revenue by geographic areas. We designated our reporting segments based on the internal reporting used by the Chief Operating Decision Maker (“CODM”), which is our Chief Executive Officer, for making decisions and assessing performance as the source of our reportable segments. The CODM allocates resources and assesses the performance of each operating segment based on product revenue by geographic areas. Accordingly, we view our business as two reportable operating segments to evaluate performance, allocate resources, set operational targets and forecast our future period financial results. We manage our assets on a company basis, not by segments, as many of our assets are shared or commingled. Our CODM does not regularly review asset information by reportable segment. The majority of long-lived assets for both segments are located in the United States. |
Research and Development Expense | Research and Development Expense Research and development costs are charged to expense as incurred and include, but are not limited to, salary and benefits, share-based compensation, clinical trial activities, drug development and manufacturing, companion diagnostic development and third-party service fees, including contract research organizations and investigative sites. Costs for certain development activities, such as clinical trials, are recognized based on an evaluation of the progress to completion of specific tasks using data such as patient enrollment, clinical site activations or information provided to us by our vendors on their actual costs incurred. Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred and are reflected on the Consolidated Balance Sheets as prepaid or accrued research and development expenses. Our other significant accounting policies are described in Note 2, Summary of Significant Accounting Policies |
Net Loss Per Common Share | Basic net loss per share is calculated by dividing net loss by the weighted-average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted-average number of common share equivalents outstanding using the treasury-stock method for the stock options and RSUs and the if-converted method for the convertible senior notes. As a result of our net losses for the periods presented, all potentially dilutive common share equivalents were considered anti-dilutive and were excluded from the computation of diluted net loss per share. |
Financial Instruments and Fai_2
Financial Instruments and Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Financial Instruments and Fair Value Measurements | |
Assets Measured at Fair Value on Recurring Basis | The following table identifies our assets and liabilities that were measured at fair value on a recurring basis (in thousands): Balance Level 1 Level 2 Level 3 June 30, 2021 Assets: Money market $ 132,928 $ 132,928 $ — $ — Total assets at fair value $ 132,928 $ 132,928 $ — $ — December 31, 2020 Assets: Money market $ 147,921 $ 147,921 $ — $ — Total assets at fair value $ 147,921 $ 147,921 $ — $ — |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Inventories | |
Schedule of Inventories | June 30, December 31, 2021 2020 Work-in-process $ 94,138 $ 102,507 Finished goods, net 34,901 32,330 Total inventories $ 129,039 $ 134,837 |
Other Current Assets (Tables)
Other Current Assets (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Other Current Assets | |
Schedule Of other current assets | Other current assets were comprised of the following (in thousands): June 30, December 31, 2021 2020 Prepaid insurance $ 2,485 $ 782 Prepaid IT 553 753 Prepaid variable considerations 440 1,191 Prepaid expenses - other 3,852 2,193 Value-added tax ("VAT") receivable 3,545 2,202 Receivable - other 2,101 1,884 Other 80 125 Total $ 13,056 $ 9,130 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Intangible Assets and Goodwill | |
Intangible assets related to capitalized milestones under license agreements | Intangible assets related to capitalized milestones under license agreements consisted of the following (in thousands): June 30, December 31, 2021 2020 Intangible asset - milestones $ 79,850 $ 79,850 Accumulated amortization (16,793) (14,107) Total intangible asset, net $ 63,057 $ 65,743 |
Estimated future amortization expense for intangible assets | Estimated future amortization expense associated with intangibles is expected to be as follows (in thousands): 2021 (remaining six months) $ 2,686 2022 5,371 2023 5,371 2024 5,371 2025 5,371 Thereafter 38,887 $ 63,057 |
Other Accrued Expenses (Tables)
Other Accrued Expenses (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Other Accrued Expenses | |
Schedule of other accrued expenses | Other accrued expenses were comprised of the following (in thousands): June 30, December 31, 2021 2020 Accrued personnel costs $ 12,058 $ 18,334 Accrued interest payable for convertible senior notes 3,753 2,991 Income tax payable 1,340 907 Accrued corporate legal fees and professional services 280 459 Accrued royalties 5,579 6,617 Accrued variable considerations 13,901 11,701 Accrued expenses - other 6,499 4,199 Total $ 43,410 $ 45,208 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Leases | |
Schedule of components of lease expense and related cash flows | The components of lease expense and related cash flows were as follows (in thousands): Three months ended June 30, Three months ended June 30, 2021 2020 Lease cost Finance lease cost: Amortization of right-of-use assets $ 474 $ 474 Interest on lease liabilities 178 208 Operating lease cost 1,280 998 Short-term lease cost 80 116 Variable lease cost 640 472 Total lease cost $ 2,652 $ 2,268 Operating cash flows from finance leases $ 178 $ 208 Operating cash flows from operating leases $ 1,280 $ 998 Financing cash flows from finance leases $ 394 $ 364 Six months ended June 30, Six months ended June 30, 2021 2020 Lease cost Finance lease cost: Amortization of right-of-use assets $ 947 $ 947 Interest on lease liabilities 363 423 Operating lease cost 2,533 2,124 Short-term lease cost 160 222 Variable lease cost 1,163 1,070 Total lease cost $ 5,166 $ 4,786 Operating cash flows from finance leases $ 363 $ 423 Operating cash flows from operating leases $ 2,533 $ 2,124 Financing cash flows from finance leases $ 780 $ 720 |
Schedule of weighted-average remaining lease term and weighted-average discount rate | June 30, 2021 June 30, 2020 Weighted-average remaining lease term (years) Operating leases 6.2 7.0 Finance leases N/A 5.5 Weighted-average discount rate Operating leases 8% 8% Finance leases N/A 8% |
Schedule of future minimum commitments due under lease agreements | Operating Leases 2021 (remaining six months) 2,842 2022 5,249 2023 4,690 2024 4,686 2025 4,843 Thereafter 9,972 Present value adjustment (7,126) Present value of lease payments $ 25,156 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Long-term Debt | |
Schedule of Future Annual Principal Payments on Convertible Senior Notes | The following is a summary of our convertible senior notes at June 30, 2021 and December 31, 2020 (principal amount in thousands): Principal Amount Principal Amount Conversion rate per $1,000 June 30, 2021 December 31, 2020 Interest Rate Maturity Date principal amount (shares) 2021 Notes $ 64,418 $ 64,418 2.50% September 15, 2021 16.1616 2024 Notes (2019 Issuance) 85,782 85,782 4.50% August 1, 2024 137.2213 2024 Notes (2020 Issuance) 57,500 57,500 4.50% August 1, 2024 160.3334 2025 Notes 300,000 300,000 1.25% May 1, 2025 13.1278 Total 507,700 507,700 Unamortized debt issuance costs (7,588) (8,656) Convertible senior notes $ 500,112 $ 499,044 |
Schedule of Total Interest Expense Recognized Related to Notes | Three months ended June 30, Six months ended June 30, 2021 2020 2021 2020 Interest on convertible notes $ 2,952 $ 2,811 $ 5,929 $ 5,994 Amortization of debt issuance costs 622 637 1,260 1,423 Debt issuance cost derecognized related to convertible debt transactions — 789 — 4,344 Interest on finance lease 178 208 363 423 Interest on borrowings under financing agreement 4,993 2,264 9,203 4,055 Other interest 25 30 52 61 Total interest expense $ 8,770 $ 6,739 $ 16,807 $ 16,300 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Stockholders' Equity | |
Component of Other Comprehensive Income (Loss) | The changes in accumulated balances related to each component of other comprehensive income (loss) are summarized for the three months ended June 30, 2021 and 2020, as follows (in thousands): Foreign Currency Unrealized Total Accumulated Translation Adjustments (Losses) Gains Other Comprehensive Loss 2021 2020 2021 2020 2021 2020 Balance at April 1, $ (44,245) $ (44,835) $ (139) $ (55) $ (44,384) $ (44,890) Other comprehensive income (loss) 14 61 — (84) 14 (23) Total before tax (44,231) (44,774) (139) (139) (44,370) (44,913) Tax effect — — — — — — Balance at June 30, $ (44,231) $ (44,774) $ (139) $ (139) $ (44,370) $ (44,913) The changes in accumulated balances related to each component of other comprehensive income (loss) are summarized for the six months ended June 30, 2021 and 2020, as follows (in thousands): Foreign Currency Unrealized Total Accumulated Translation Adjustments (Losses) Gains Other Comprehensive Loss 2021 2020 2021 2020 2021 2020 Balance at January 1, $ (44,165) $ (44,732) $ (139) $ (133) $ (44,304) $ (44,865) Other comprehensive (loss) income (66) (42) — (6) (66) (48) Total before tax (44,231) (44,774) (139) (139) (44,370) (44,913) Tax effect — — — — — — Balance at June 30, $ (44,231) $ (44,774) $ (139) $ (139) $ (44,370) $ (44,913) |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Share-Based Compensation | |
Share-Based Compensation Expense Recognized in Accompanying Statements of Operations | Share-based compensation expense for all equity-based programs, including stock options, restricted stock units and the employee stock purchase plan, for the three and six months ended June 30, 2021 and 2020 was recognized in the accompanying Consolidated Statements of Operations and Comprehensive Loss as follows (in thousands): Three months ended June 30, Six months ended June 30, 2021 2020 2021 2020 Research and development $ 3,474 $ 6,636 $ 6,350 $ 13,561 Selling, general and administrative 3,888 6,677 5,051 12,713 Total share-based compensation expense $ 7,362 $ 13,313 $ 11,401 $ 26,274 |
Summary of Stock Options Activity | Weighted Weighted Average Aggregate Average Remaining Intrinsic Number of Exercise Contractual Value Options Price Term (Years) (Thousands) Outstanding at December 31, 2020 6,502,169 $ 37.78 Granted 1,017,132 6.11 Exercised (7,087) 4.98 Forfeited (316,917) 39.02 Outstanding at June 30, 2021 7,195,297 $ 33.28 5.8 $ 309 Vested and expected to vest at June 30, 2021 7,007,820 $ 33.93 5.7 $ 277 Vested and exercisable at June 30, 2021 5,440,479 $ 40.40 4.8 $ 84 |
Schedule of Share-Based Compensation Arrangements by Share-Based Payment Award | The following table summarizes information about our stock options as of and for the three and six months ended June 30, 2021 and 2020 (in thousands, except per share amounts): Three months ended June 30, Six months ended June 30, 2021 2020 2021 2020 Weighted-average grant date fair value per share $ 4.72 $ 5.06 $ 4.85 $ 5.87 Intrinsic value of options exercised $ 1 $ 87 $ 15 $ 91 Cash received from stock option exercises $ 8 $ 72 $ 35 $ 74 |
Summary of activity related to our unvested RSUs | Weighted Average Number of Grant Date Units Fair Value Unvested at December 31, 2020 2,964,297 $ 14.36 Granted 2,631,278 6.22 Vested (1,047,175) 16.73 Forfeited (294,733) 9.10 Unvested at June 30, 2021 4,253,667 $ 9.11 Expected to vest after June 30, 2021 3,655,671 $ 9.35 |
Net Loss Per Common Share (Tabl
Net Loss Per Common Share (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Net Loss Per Common Share | |
Shares Outstanding Excluded from Calculation of Diluted Net Loss Per Share | The shares outstanding at the end of the respective periods presented in the table below were excluded from the calculation of diluted net loss per share due to their anti-dilutive effect (in thousands): Three and six months ended June 30, 2021 2020 Common shares under stock incentive plans 4,524 4,156 Convertible senior notes 25,969 25,648 Total potential dilutive shares 30,493 29,804 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Segment Information | |
Schedule of information about reportable segments | Three months ended June 30, 2021 2020 U.S. Ex-U.S. Total U.S. Ex-U.S. Total Product revenue $ 27,680 $ 9,140 $ 36,820 $ 36,719 $ 3,168 $ 39,887 Operating expenses: Cost of sales - product 5,402 2,892 8,294 7,522 1,598 9,120 Cost of sales - intangible asset amortization 620 723 1,343 557 723 1,280 Research and development 43,774 1,985 45,759 67,862 2,016 69,878 Selling, general and administrative 26,351 6,567 32,918 35,969 5,933 41,902 Acquired in-process research and development 2,204 — 2,204 — — — Other operating expenses 3,884 — 3,884 355 — 355 Total expenses 82,235 12,167 94,402 112,265 10,270 122,535 Operating loss $ (54,555) $ (3,027) (57,582) $ (75,546) $ (7,102) (82,648) Other income (expense): Interest expense (8,770) (6,739) Foreign currency (loss) gain (206) 142 Loss on extinguishment of debt — (3,277) Other income 107 239 Other income (expense), net (8,869) (9,635) Loss before income taxes (66,451) (92,283) Income tax benefit 3 36 Net loss $ (66,448) $ (92,247) Six months ended June 30, 2021 2020 U.S. Ex-U.S. Total U.S. Ex-U.S. Total Product revenue $ 59,381 $ 15,492 $ 74,873 $ 76,022 $ 6,429 $ 82,451 Operating expenses: Cost of sales - product 11,560 5,002 16,562 15,577 2,639 18,216 Cost of sales - intangible asset amortization 1,241 1,445 2,686 1,047 1,445 2,492 Research and development 94,604 3,960 98,564 134,149 3,950 138,099 Selling, general and administrative 50,672 12,187 62,859 72,124 12,376 84,500 Acquired in-process research and development 2,204 — 2,204 — — — Other operating expenses 7,591 — 7,591 3,805 — 3,805 Total expenses 167,872 22,594 190,466 226,702 20,410 247,112 Operating loss $ (108,491) $ (7,102) (115,593) $ (150,680) $ (13,981) (164,661) Other income (expense): Interest expense (16,807) (16,300) Foreign currency loss (752) (735) Loss on convertible senior notes conversion — (7,791) Loss on extinguishment of debt — (3,277) Other income 290 1,081 Other income (expense), net (17,269) (27,022) Loss before income taxes (132,862) (191,683) Income tax benefit 137 104 Net loss $ (132,725) $ (191,579) |
Nature of Business (Details)
Nature of Business (Details) | 6 Months Ended |
Jun. 30, 2021itemproductsegment | |
Number of operating segments | segment | 2 |
Number of other product candidates | product | 2 |
Minimum | |
Number of chemotherapies received by an adult patient | 2 |
Number of prior lines of platinum based chemotherapy received by patient | 2 |
Summary of Significant Policies
Summary of Significant Policies (Details) | 6 Months Ended |
Jun. 30, 2021segment | |
Schedule Of Significant Accounting Policies | |
Amortization period of the asset | true |
Payment terms number of days | 30 days |
Shelf-life of API | 4 years |
Consumption period of API | 6 years |
Number Of Operating Segments | 2 |
Number of Reportable Segments | 2 |
Rucaparib | |
Schedule Of Significant Accounting Policies | |
Shelf life of inventory | 4 years |
Financial Instruments and Fai_3
Financial Instruments and Fair Value Measurements (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Fair Value Measurements | ||
Liabilities at fair value | $ 0 | |
Recurring | ||
Fair Value Measurements | ||
Assets at fair value | 132,928 | $ 147,921 |
Money Market | Recurring | ||
Fair Value Measurements | ||
Assets at fair value | 132,928 | 147,921 |
Fair Value, Inputs, Level 1 | Recurring | ||
Fair Value Measurements | ||
Assets at fair value | 132,928 | 147,921 |
Fair Value, Inputs, Level 1 | Money Market | Recurring | ||
Fair Value Measurements | ||
Assets at fair value | 132,928 | 147,921 |
Fair Value, Inputs, Level 2 | Money Market | Recurring | ||
Fair Value Measurements | ||
Assets at fair value | 0 | 0 |
Fair Value, Inputs, Level 3 | Recurring | ||
Fair Value Measurements | ||
Assets at fair value | 0 | 0 |
Fair Value, Inputs, Level 3 | Money Market | Recurring | ||
Fair Value Measurements | ||
Assets at fair value | $ 0 | $ 0 |
Financial Instruments and Fai_4
Financial Instruments and Fair Value Measurements - Additional Information (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Fair Value Measurements | ||
Current portion | $ 64,353 | $ 64,198 |
Principal amount outstanding | 500,112 | $ 499,044 |
Convertible Senior Unsecured Notes 2021 Notes | ||
Fair Value Measurements | ||
Current portion | 64,400 | |
Convertible senior notes, fair value | 63,100 | |
2024 Notes (2019 Issuance) | ||
Fair Value Measurements | ||
Convertible senior notes, fair value | 90,300 | |
Principal amount outstanding | 84,200 | |
2024 Notes (2020 Issuance) | ||
Fair Value Measurements | ||
Convertible senior notes, fair value | 60,200 | |
Principal amount outstanding | 56,700 | |
Convertible Senior Unsecured Notes 2025 Notes | ||
Fair Value Measurements | ||
Convertible senior notes, fair value | 223,200 | |
Principal amount outstanding | $ 294,900 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Inventories | ||
Work-in-process | $ 94,138 | $ 102,507 |
Finished goods, net | 34,901 | 32,330 |
Total inventories | 129,039 | 134,837 |
Current inventory | 24,993 | 30,714 |
Long-term inventory | $ 104,046 | $ 104,123 |
Other Current Assets (Details)
Other Current Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Other Current Assets | ||
Prepaid insurance | $ 2,485 | $ 782 |
Prepaid IT | 553 | 753 |
Prepaid variable considerations | 440 | 1,191 |
Prepaid expenses - other | 3,852 | 2,193 |
Value-added tax ("VAT") receivable | 3,545 | 2,202 |
Receivable - other | 2,101 | 1,884 |
Other | 80 | 125 |
Total | $ 13,056 | $ 9,130 |
Intangible Assets and Goodwil_2
Intangible Assets and Goodwill (Details) - Licensing Agreements - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Finite Lived Intangible Assets [Line Items] | ||
Intangible asset - milestones | $ 79,850 | $ 79,850 |
Accumulated amortization | (16,793) | (14,107) |
Total intangible asset, net | $ 63,057 | $ 65,743 |
Intangible Assets and Goodwil_3
Intangible Assets and Goodwill - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Licensing Agreements | ||||
Finite Lived Intangible Assets | ||||
Amortization of Intangible Assets | $ 1.3 | $ 1.3 | $ 2.7 | $ 2.5 |
Intangible Assets and Goodwil_4
Intangible Assets and Goodwill - Estimated Future Amortization (Details) - Licensing Agreements - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Finite Lived Intangible Assets | ||
2021 (remaining six months) | $ 2,686 | |
2022 | 5,371 | |
2023 | 5,371 | |
2024 | 5,371 | |
2025 | 5,371 | |
Thereafter | 38,887 | |
Total intangible asset, net | $ 63,057 | $ 65,743 |
Other Accrued Expenses (Details
Other Accrued Expenses (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Other Accrued Expenses | ||
Accrued personnel costs | $ 12,058 | $ 18,334 |
Accrued interest payable for convertible senior notes | 3,753 | 2,991 |
Income tax payable | 1,340 | 907 |
Accrued corporate legal fees and professional services | 280 | 459 |
Accrued royalties | 5,579 | 6,617 |
Accrued variable considerations | 13,901 | 11,701 |
Accrued expenses - other | 6,499 | 4,199 |
Total | $ 43,410 | $ 45,208 |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | Jun. 16, 2021 | Jun. 30, 2021 |
Lessee, Lease, Description [Line Items] | ||
Payments on derecognition of lease components | $ 1,100 | $ 1,100 |
Impairment of prepaid manufacturing costs | 0 | |
Other operating expense | ||
Lessee, Lease, Description [Line Items] | ||
Loss on derecognition of fixed assets | $ 300 |
Leases - Components of lease ex
Leases - Components of lease expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Lessee Disclosure [Abstract] | ||||
Amortization of right-of-use assets | $ 474 | $ 474 | $ 947 | $ 947 |
Interest on lease liabilities | 178 | 208 | 363 | 423 |
Operating lease cost | 1,280 | 998 | 2,533 | 2,124 |
Short-term lease cost | 80 | 116 | 160 | 222 |
Variable lease cost | 640 | 472 | 1,163 | 1,070 |
Total lease cost | 2,652 | 2,268 | 5,166 | 4,786 |
Cash flows from leases | ||||
Operating cash flows from finance leases | 178 | 208 | 363 | 423 |
Operating cash flows from operating leases | 1,280 | 998 | 2,533 | 2,124 |
Financing cash flows from finance leases | $ 394 | $ 364 | $ 780 | $ 720 |
Leases - Weighted Average (Deta
Leases - Weighted Average (Details) | Jun. 30, 2021 | Jun. 30, 2020 |
Weighted-average remaining lease term (years) | ||
Operating leases | 6 years 2 months 12 days | 7 years |
Finance leases | 5 years 6 months | |
Weighted-average discount rate | ||
Operating leases | 8.00% | 8.00% |
Finance leases | 8.00% |
Leases - Future minimum commitm
Leases - Future minimum commitments (Details) $ in Thousands | Jun. 30, 2021USD ($) |
Operating Leases | |
2021 (remaining six months) | $ 2,842 |
2021 | 5,249 |
2022 | 4,690 |
2023 | 4,686 |
2024 | 4,843 |
Thereafter | 9,972 |
Present value adjustment | (7,126) |
Present value of lease payments | $ 25,156 |
Operating Lease, Liability, Statement of Financial Position [Extensible List] | us-gaap:OtherLiabilitiesCurrent, us-gaap:OtherLiabilitiesNoncurrent |
Debt (Details)
Debt (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020USD ($) | Jun. 30, 2021USD ($) | Jun. 30, 2020USD ($) | Dec. 31, 2020USD ($) | May 01, 2019USD ($) | |
Debt Instrument | |||||
Aggregate principal amount | $ 507,700 | $ 507,700 | |||
Unamortized debt issuance costs | (7,588) | (8,656) | |||
Principal amount outstanding | 500,112 | 499,044 | |||
Gain (loss) on extinguishment of debt | $ (3,277) | $ (3,277) | |||
Sixth Street Partners, LLC | |||||
Debt Instrument | |||||
Aggregate principal amount | 175,000 | ||||
Unamortized debt issuance costs | (1,400) | ||||
Principal amount outstanding | 147,400 | ||||
Quarterly payments based on a certain percentage of revenues | $ 8,500 | ||||
Percentage of direct worldwide sales that determine quarterly payments | 9.75% | ||||
Debt issuance costs | $ 1,800 | ||||
Effective interest rate | 14.60% | ||||
Ratio of repayment amount | 2 | ||||
Sixth Street Partners, LLC | Maximum | |||||
Debt Instrument | |||||
Aggregate principal amount | $ 175,000 | ||||
Maximum amount required to be repaid | $ 350,000 | ||||
2021 Notes | |||||
Debt Instrument | |||||
Aggregate principal amount | $ 64,418 | 64,418 | |||
Convertible senior notes, interest rate | 2.50% | ||||
Convertible senior notes, maturity date | Sep. 15, 2021 | ||||
Conversion rate per $1,000 principal amount (shares) | 16.1616 | ||||
2024 Notes (2019 Issuance) | |||||
Debt Instrument | |||||
Aggregate principal amount | $ 85,782 | 85,782 | |||
Convertible senior notes, interest rate | 4.50% | ||||
Convertible senior notes, maturity date | Aug. 1, 2024 | ||||
Conversion rate per $1,000 principal amount (shares) | 137.2213 | ||||
Principal amount outstanding | $ 84,200 | ||||
2024 Notes (2020 Issuance) | |||||
Debt Instrument | |||||
Aggregate principal amount | $ 57,500 | 57,500 | |||
Convertible senior notes, interest rate | 4.50% | ||||
Convertible senior notes, maturity date | Aug. 1, 2024 | ||||
Conversion rate per $1,000 principal amount (shares) | 160.3334 | ||||
Principal amount outstanding | $ 56,700 | ||||
2025 Notes | |||||
Debt Instrument | |||||
Aggregate principal amount | $ 300,000 | $ 300,000 | |||
Convertible senior notes, interest rate | 1.25% | ||||
Convertible senior notes, maturity date | May 1, 2025 | ||||
Conversion rate per $1,000 principal amount (shares) | 13.1278 |
Debt - Interest expense recogni
Debt - Interest expense recognized (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Long-term Debt | ||||
Interest on convertible notes | $ 2,952 | $ 2,811 | $ 5,929 | $ 5,994 |
Amortization of debt issuance costs | 622 | 637 | 1,260 | 1,423 |
Debt issuance cost derecognized related to convertible debt transactions | 789 | 4,344 | ||
Interest on finance lease | 178 | 208 | 363 | 423 |
Interest on borrowings under financing agreement | 4,993 | 2,264 | 9,203 | 4,055 |
Other interest | 25 | 30 | 52 | 61 |
Total interest expense | $ 8,770 | $ 6,739 | $ 16,807 | $ 16,300 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) $ in Thousands | May 17, 2021USD ($) | Jun. 09, 2021USD ($)shares | Jun. 30, 2021USD ($)Vote | Jun. 30, 2020USD ($) |
Class Of Stock [Line Items] | ||||
Number of votes per common share | Vote | 1 | |||
Proceeds from offering | $ 72,472 | $ 246,727 | ||
At the market offering | ||||
Class Of Stock [Line Items] | ||||
Aggregate offering price | $ 75,000 | |||
Common shares issued in a public offering | shares | 13,492,231 | |||
Gross proceeds from offering | $ 75,000 | |||
Proceeds from offering | $ 72,500 |
Stockholders' Equity - Accumula
Stockholders' Equity - Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Accumulated Other Comprehensive Loss | ||||
Beginning balance | $ (44,384) | $ (44,890) | $ (44,304) | $ (44,865) |
Other comprehensive income (loss) | 14 | (23) | (66) | (48) |
Total before tax | (44,370) | (44,913) | (44,370) | (44,913) |
Tax effect | 0 | 0 | ||
Ending balance | (44,370) | (44,913) | (44,370) | (44,913) |
Reclassifications out of accumulated other comprehensive loss | 0 | 0 | 0 | 0 |
Foreign Currency Translation Adjustments | ||||
Accumulated Other Comprehensive Loss | ||||
Beginning balance | (44,245) | (44,835) | (44,165) | (44,732) |
Other comprehensive income (loss) | 14 | 61 | (66) | (42) |
Total before tax | (44,231) | (44,774) | (44,231) | (44,774) |
Tax effect | 0 | 0 | ||
Ending balance | (44,231) | (44,774) | (44,231) | (44,774) |
Unrealized Losses | ||||
Accumulated Other Comprehensive Loss | ||||
Beginning balance | (139) | (55) | (139) | (133) |
Other comprehensive income (loss) | (84) | (6) | ||
Total before tax | (139) | (139) | (139) | (139) |
Tax effect | 0 | 0 | ||
Ending balance | $ (139) | $ (139) | $ (139) | $ (139) |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Share Based Compensation Arrangement By Share Based Payment Award | ||||
Share-based compensation expense, tax benefit recognized | $ 0 | $ 0 | $ 0 | $ 0 |
Closing stock price | $ 5.80 | $ 5.80 | ||
Stock-based compensation expense | $ 7,362 | $ 13,313 | $ 11,401 | $ 26,274 |
Common shares under stock incentive plans | ||||
Share Based Compensation Arrangement By Share Based Payment Award | ||||
Unrecognized stock-based compensation expense related to unvested stock options | 14,100 | $ 14,100 | ||
Unrecognized stock-based compensation expense related to non-vested options and/or RSUs, weighted-average remaining vesting period | 1 year 7 months 6 days | |||
Restricted Stock Units (RSUs) | ||||
Share Based Compensation Arrangement By Share Based Payment Award | ||||
Unrecognized stock-based compensation expense related to non-vested options and/or RSUs, weighted-average remaining vesting period | 2 years 3 months 18 days | |||
Weighted-average estimated grant date fair value of purchase awards under Purchase Plan | $ 16.73 | |||
Unrecognized stock-based compensation expense related to unvested RSUs | $ 35,300 | $ 35,300 |
Share-Based Compensation - Shar
Share-Based Compensation - Share-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Share-Based Compensation Expense Recognized in Accompanying Statements of Operations | ||||
Total Share-based compensation expense | $ 7,362 | $ 13,313 | $ 11,401 | $ 26,274 |
Research and development | ||||
Share-Based Compensation Expense Recognized in Accompanying Statements of Operations | ||||
Total Share-based compensation expense | 3,474 | 6,636 | 6,350 | 13,561 |
General and administrative | ||||
Share-Based Compensation Expense Recognized in Accompanying Statements of Operations | ||||
Total Share-based compensation expense | $ 3,888 | $ 6,677 | $ 5,051 | $ 12,713 |
Share-Based Compensation - Summ
Share-Based Compensation - Summary of Stock Options Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended |
Jun. 30, 2021 | |
Share-Based Compensation | |
Beginning Balance, Number of Options Outstanding | 6,502,169 |
Granted, Number of Options | 1,017,132 |
Exercised, Number of Options | (7,087) |
Forfeited, Number of Options | (316,917) |
Ending Balance, Number of Options Outstanding | 7,195,297 |
Vested and expected to vest, Number of Options Outstanding | 7,007,820 |
Vested and exercisable, Number of Options Outstanding | 5,440,479 |
Beginning Balance, Weighted Average Exercise Price | $ 37.78 |
Granted, Weighted Average Exercise Price | 6.11 |
Exercised, Weighted Average Exercise Price | 4.98 |
Forfeited, Weighted Average Exercise Price | 39.02 |
Ending Balance, Weighted Average Exercise Price | 33.28 |
Vested and expected to vest, Weighted Average Exercise Price | 33.93 |
Vested and exercisable, Weighted Average Exercise Price | $ 40.40 |
Outstanding, Weighted Average Remaining Contractual Term (Years) | 5 years 9 months 18 days |
Vested and expected to vest, Weighted Average Remaining Contractual Term (Years) | 5 years 8 months 12 days |
Vested and exercisable, Weighted Average Remaining Contractual Term (Years) | 4 years 9 months 18 days |
Outstanding, Aggregate Intrinsic Value | $ 309 |
Vested and expected to vest, Aggregate Intrinsic Value | 277 |
Vested and exercisable, Aggregate Intrinsic Value | $ 84 |
Share-Based Compensation - Sche
Share-Based Compensation - Schedule of Share-Based Compensation Arrangements by Share-Based Payment Award (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Share-Based Compensation | ||||
Weighted-average grant date fair value per share | $ 4.72 | $ 5.06 | $ 4.85 | $ 5.87 |
Intrinsic value of options exercised | $ 1 | $ 87 | $ 15 | $ 91 |
Cash received from stock option exercises | $ 8 | $ 72 | $ 35 | $ 74 |
Share-Based Compensation - RSUs
Share-Based Compensation - RSUs Activity (Details) - Restricted Stock Units (RSUs) | 6 Months Ended |
Jun. 30, 2021$ / sharesshares | |
Share Based Compensation Arrangement By Share Based Payment Award | |
Number of Units, Unvested as of Beginning Balance | shares | 2,964,297 |
Number of Units, Granted | shares | 2,631,278 |
Number of Units, Vested | shares | (1,047,175) |
Number of Units, Forfeited | shares | (294,733) |
Number of Units, Unvested as of Ending Balance | shares | 4,253,667 |
Expected to vest after December 31, 2020 | shares | 3,655,671 |
Weighted Average Grant Date Fair Value, Beginning Balance | $ / shares | $ 14.36 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | 6.22 |
Weighted Average Grant Date Fair Value, Vested | $ / shares | 16.73 |
Weighted Average Grant Date Fair Value, Forfeited | $ / shares | 9.10 |
Weighted Average Grant Date Fair Value, Ending Balance | $ / shares | 9.11 |
Weighted Average Grant Date Fair Value, Expected to vest after December 31, 2020 | $ / shares | $ 9.35 |
License Agreements (Details)
License Agreements (Details) $ in Millions | Nov. 19, 2013USD ($) | Apr. 30, 2021USD ($) | Feb. 29, 2020item | Sep. 30, 2019USD ($) | Jun. 30, 2011USD ($) | Oct. 31, 2008 | Jun. 30, 2021USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2020USD ($) |
3B Pharmaceuticals | |||||||||
License Agreements | |||||||||
Percentage of Non-Royalty Consideration Payable on Sublicense Agreements | 34.00% | ||||||||
License Agreements Licensor Pfizer | Rucaparib | Minimum | |||||||||
License Agreements | |||||||||
Annual sales target for sales milestone payments | $ 250 | ||||||||
License Agreements Licensor Pfizer | Rucaparib | Maximum | |||||||||
License Agreements | |||||||||
Maximum potential future development, regulatory milestone payments | 8 | ||||||||
Additional maximum payments payable on attaining the sales target | $ 170 | ||||||||
License Agreement Terms | 3B Pharmaceuticals | |||||||||
License Agreements | |||||||||
Milestone payments | $ 2.2 | ||||||||
Acquired in-process research and development | $ 9.4 | ||||||||
Number of additional undisclosed targets | item | 3 | ||||||||
Research and development expense | $ 2.1 | ||||||||
Percentage Of Royalty On Net Sales | 6.00% | ||||||||
License Agreement Terms | License Agreements Licensor Pfizer | Rucaparib | |||||||||
License Agreements | |||||||||
Upfront payment | $ 7 | ||||||||
Milestones paid to Pfizer prior to FDA approval | $ 1.4 | ||||||||
Milestone payments | $ 82.5 | ||||||||
License Agreement Terms | Advenchen Laboratories LLC | License Agreements Lucitanib | |||||||||
License Agreements | |||||||||
Milestone payment obligation | $ 65 | ||||||||
Percentage of Non-Royalty Consideration Payable on Sublicense Agreements | 25.00% |
Net Loss Per Common Share (Deta
Net Loss Per Common Share (Details) - shares shares in Thousands | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share | ||
Total potential dilutive shares | 30,493 | 29,804 |
Common shares under stock incentive plans | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share | ||
Total potential dilutive shares | 4,524 | 4,156 |
Convertible senior notes | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share | ||
Total potential dilutive shares | 25,969 | 25,648 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Thousands | Jun. 16, 2021USD ($) | Nov. 10, 2019plaintiff | Jun. 20, 2017patent | Mar. 31, 2017shareholder | Jun. 30, 2021USD ($) |
Purchase commitments | $ 49,400 | ||||
Payments on derecognition of lease components | $ 1,100 | 1,100 | |||
Impairment of prepaid manufacturing costs | 0 | ||||
Number of putative shareholders | shareholder | 2 | ||||
Number of patents in salt and polymorph patent family | patent | 2 | ||||
Number of opponents | plaintiff | 1 | ||||
Other operating expense | |||||
Loss on derecognition of fixed assets | $ 300 |
Segment Information - Reportabl
Segment Information - Reportable segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Segment Reporting Information [Line Items] | ||||||
Product revenue | $ 36,820 | $ 39,887 | $ 74,873 | $ 82,451 | ||
Product revenue - extensible list | Product | Product | Product | Product | ||
Operating expenses: | ||||||
Research and development | $ 45,759 | $ 69,878 | $ 98,564 | $ 138,099 | ||
Selling, general and administrative | 32,918 | 41,902 | 62,859 | 84,500 | ||
Acquired in-process research and development | 2,204 | 2,204 | ||||
Other operating expenses | 3,884 | 355 | 7,591 | 3,805 | ||
Total expenses | 94,402 | 122,535 | 190,466 | 247,112 | ||
Operating loss | (57,582) | (82,648) | (115,593) | (164,661) | ||
Other income (expense): | ||||||
Interest expense | (8,770) | (6,739) | (16,807) | (16,300) | ||
Foreign currency (loss) gain | (206) | 142 | (752) | (735) | ||
Loss on convertible senior notes conversion | (7,791) | |||||
Loss on extinguishment of debt | (3,277) | (3,277) | ||||
Other income | 107 | 239 | 290 | 1,081 | ||
Other income (expense), net | (8,869) | (9,635) | (17,269) | (27,022) | ||
Loss before income taxes | (66,451) | (92,283) | (132,862) | (191,683) | ||
Income tax benefit | 3 | 36 | 137 | 104 | ||
Net loss | (66,448) | $ (66,277) | (92,247) | $ (99,332) | (132,725) | (191,579) |
Product | ||||||
Operating expenses: | ||||||
Cost of sales | 8,294 | 9,120 | 16,562 | 18,216 | ||
Intangible asset amortization | ||||||
Operating expenses: | ||||||
Cost of sales | 1,343 | 1,280 | 2,686 | 2,492 | ||
U.S. | ||||||
Segment Reporting Information [Line Items] | ||||||
Product revenue | $ 27,680 | $ 36,719 | 59,381 | 76,022 | ||
Product revenue - extensible list | Product | Product | ||||
Operating expenses: | ||||||
Research and development | $ 43,774 | $ 67,862 | 94,604 | 134,149 | ||
Selling, general and administrative | 26,351 | 35,969 | 50,672 | 72,124 | ||
Acquired in-process research and development | 2,204 | 2,204 | ||||
Other operating expenses | 3,884 | 355 | 7,591 | 3,805 | ||
Total expenses | 82,235 | 112,265 | 167,872 | 226,702 | ||
Operating loss | (54,555) | (75,546) | (108,491) | (150,680) | ||
U.S. | Product | ||||||
Operating expenses: | ||||||
Cost of sales | 5,402 | 7,522 | 11,560 | 15,577 | ||
U.S. | Intangible asset amortization | ||||||
Operating expenses: | ||||||
Cost of sales | 620 | 557 | 1,241 | 1,047 | ||
ex U.S. | ||||||
Segment Reporting Information [Line Items] | ||||||
Product revenue | $ 9,140 | $ 3,168 | 15,492 | 6,429 | ||
Product revenue - extensible list | Product | Product | ||||
Operating expenses: | ||||||
Research and development | $ 1,985 | $ 2,016 | 3,960 | 3,950 | ||
Selling, general and administrative | 6,567 | 5,933 | 12,187 | 12,376 | ||
Total expenses | 12,167 | 10,270 | 22,594 | 20,410 | ||
Operating loss | (3,027) | (7,102) | (7,102) | (13,981) | ||
ex U.S. | Product | ||||||
Operating expenses: | ||||||
Cost of sales | 2,892 | 1,598 | 5,002 | 2,639 | ||
ex U.S. | Intangible asset amortization | ||||||
Operating expenses: | ||||||
Cost of sales | $ 723 | $ 723 | $ 1,445 | $ 1,445 |