Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | Apr. 28, 2017 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | CHRS | |
Entity Registrant Name | Coherus BioSciences, Inc. | |
Entity Central Index Key | 1,512,762 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 51,288,117 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 | [1] |
Current assets: | |||
Cash and cash equivalents | $ 124,924 | $ 124,947 | |
Investments in marketable securities | 49,900 | ||
Restricted cash | 60 | 60 | |
Receivables from collaboration and license agreement | 26 | 1,859 | |
Prepaid assets (includes related parties of $3,450 and $3,714 as of March 31, 2017 and December 31, 2016, respectively) | 30,484 | 31,634 | |
Other assets (includes related parties of $1,984 and $2,184 as of March 31, 2017 and December 31, 2016, respectively) | 2,866 | 2,986 | |
Total current assets | 208,260 | 161,486 | |
Property and equipment, net | 14,873 | 10,772 | |
Intangible assets | 2,620 | 2,620 | |
Goodwill | 943 | 943 | |
Restricted cash, non-current | 785 | 785 | |
Other assets, non-current | 14 | 1,879 | |
Total assets | 227,495 | 178,485 | |
Current liabilities: | |||
Accounts payable | 12,560 | 19,706 | |
Accounts payable - related parties | 2,109 | 877 | |
Accrued liabilities (includes related parties of $1,832 and $3,542 as of March 31, 2017 and December 31, 2016, respectively) | 24,667 | 28,022 | |
Advance payments under license agreement | 1,070 | 1,070 | |
Deferred revenue | 669 | 892 | |
Contingent consideration | 5,940 | 5,550 | |
Other liabilities | 281 | 259 | |
Total current liabilities | 47,296 | 56,376 | |
Deferred revenue, non-current | 725 | 669 | |
Convertible notes | 75,437 | 75,192 | |
Convertible notes - related parties | 25,146 | 25,064 | |
Other liabilities, non-current | 1,932 | 1,830 | |
Total liabilities | 150,536 | 159,131 | |
Commitments and contingencies (Note 7) | |||
Stockholders’ equity: | |||
Preferred stock | |||
Common stock | 5 | 5 | |
Additional paid-in capital | 691,078 | 558,474 | |
Accumulated other comprehensive loss | (807) | (630) | |
Accumulated deficit | (612,100) | (537,322) | |
Total Coherus stockholders' equity | 78,176 | 20,527 | |
Non-controlling interest | (1,217) | (1,173) | |
Total stockholders' equity | 76,959 | 19,354 | |
Total liabilities and stockholders’ equity | $ 227,495 | $ 178,485 | |
[1] | The consolidated balance sheet as of December 31, 2016 has been derived from the audited consolidated balance sheet included in the Company’s 2016 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 14, 2017. |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 | |
Prepaid assets | $ 30,484 | $ 31,634 | [1] |
Other assets, related parties | 1,984 | 2,184 | |
Accrued liabilities, related parties | 1,832 | 3,542 | |
Clinical Material Manufacturing and Other Related Parties | |||
Prepaid assets | $ 3,450 | $ 3,714 | |
[1] | The consolidated balance sheet as of December 31, 2016 has been derived from the audited consolidated balance sheet included in the Company’s 2016 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 14, 2017. |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Revenue: | ||
Collaboration and license revenue | $ 161 | $ 12,359 |
Operating expenses: | ||
Research and development (includes related party of $3,791 and $13,262 for the three months ended March 31, 2017 and 2016, respectively) | 53,775 | 65,313 |
General and administrative (includes related party of $65 and $0 for the three months ended March 31, 2017 and 2016, respectively) | 18,803 | 11,398 |
Total operating expenses | 72,578 | 76,711 |
Loss from operations | (72,417) | (64,352) |
Interest expense (includes related party of $593 and $209 for the three months ended March 31, 2017 and 2016) | (2,376) | (837) |
Other expense, net | (29) | (349) |
Net loss | (74,822) | (65,538) |
Net loss attributable to non-controlling interest | 44 | 150 |
Net loss attributable to Coherus | $ (74,778) | $ (65,388) |
Net loss per share attributable to Coherus, basic and diluted | $ (1.54) | $ (1.67) |
Weighted-average number of shares used in computing net loss per share attributable to Coherus, basic and diluted | 48,711,958 | 39,095,975 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
General and administrative expenses from transactions with related party | $ 65 | $ 0 |
Interest expense from transactions with related party | 593 | 209 |
Research and Development Expense | ||
Research and development from transactions with related party | $ 3,791 | $ 13,262 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
Net loss | $ (74,822) | $ (65,538) |
Other comprehensive loss: | ||
Unrealized loss on available-for-sale securities, net of tax | (9) | |
Foreign currency translation adjustments, net of tax | (168) | (48) |
Comprehensive loss | (74,999) | (65,586) |
Comprehensive loss attributable to non-controlling interest | 44 | 150 |
Comprehensive loss attributable to Coherus | $ (74,955) | $ (65,436) |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | ||
Operating activities | |||
Net loss | $ (74,822) | $ (65,538) | |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Depreciation and amortization | 865 | 717 | |
Remeasurement of fair-value contingent consideration | 390 | 190 | |
Amortization of premium on marketable securities | (19) | ||
Non-cash interest expense from amortization of debt discount | 326 | 107 | |
Provision for other receivables | (1,300) | ||
Stock-based compensation expense | 7,810 | 5,318 | |
Changes in operating assets and liabilities: | |||
Receivables from collaboration and license agreement | 1,833 | 365 | |
Prepaid assets | 1,153 | 8,776 | |
Other assets | 118 | (668) | |
Other assets, non-current | 86 | ||
Accounts payable | (7,265) | (6,797) | |
Accounts payable - related parties | 1,232 | (54) | |
Accrued and other liabilities | (4,831) | (4,735) | |
Deferred revenue | (168) | (12,365) | |
Advance payments under license agreements | (360) | ||
Other liabilities, non-current | 101 | (58) | |
Net cash used in operating activities | (73,277) | (76,316) | |
Investing activities | |||
Purchases of property and equipment | (1,691) | (2,148) | |
Purchase of investments in marketable securities | (49,887) | ||
Net cash used in investing activities | (51,578) | (2,148) | |
Financing activities | |||
Proceeds from issuance of convertible notes | 75,000 | ||
Proceeds from issuance of convertible notes - related parties | 25,000 | ||
Proceeds from common stock offering, net of underwriters discounts and commissions | 124,866 | ||
Payments of convertible notes issuance costs | (455) | ||
Proceeds from issuance of common stock upon exercise of stock options | 265 | 298 | |
Net cash provided by financing activities | 124,997 | 99,843 | |
Effect of exchange rate changes in cash and cash equivalents | (165) | (47) | |
Net (decrease) increase in cash and cash equivalents | (23) | 21,332 | |
Cash and cash equivalents at beginning of period | 124,947 | [1] | 158,226 |
Cash and cash equivalents at end of period | 124,924 | $ 179,558 | |
Common Stock Offering | |||
Financing activities | |||
Payments of offering costs | $ (134) | ||
[1] | The consolidated balance sheet as of December 31, 2016 has been derived from the audited consolidated balance sheet included in the Company’s 2016 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 14, 2017. |
Organization and Operations
Organization and Operations | 3 Months Ended |
Mar. 31, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Organization and Operations | 1. Organization and Operations Description of the Business Coherus BioSciences, Inc. (the “Company”, “Coherus”, “we”, our” or “us”) is a late-stage clinical biologics platform company, focused on the global biosimilar market. The Company’s headquarters and laboratories are located in Redwood City, California and in Camarillo, California, respectively. Need to Raise Additional Capital As of March 31, 2017 the Company had an accumulated deficit of $612.1 million and cash and cash equivalents and short-term investments in marketable securities of $174.8 million. In January 2017, the Company issued and sold 148,827 shares of common stock at a weighted average price of $28.88 per share through its ATM Offering Program and received total net proceeds of $4.2 million, and in February and March 2017, the Company issued and sold 5,294,902 shares of common stock at a price of $24.25 per share from its follow-on offering and received total net proceeds of $120.4 million (see Note 8). The Company believes that its current available cash and cash equivalents and short-term investments in marketable securities will be sufficient to fund its planned expenditures and meet the Company’s obligations for at least 12 months following our financial statement issuance date . |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | 2. Basis of Presentation and Summary of Significant Accounting Policies Unaudited Condensed Consolidated Financial Statements The accompanying condensed consolidated financial statements include the accounts of Coherus and its wholly owned subsidiaries as of March 31, 2017: Coherus Intermediate Corp, Coherus Oncology, Inc., Orphonix, Inc., InteKrin Therapeutics Inc. (“InteKrin”), and InteKrin’s 82.5% majority owned subsidiary of InteKrin Russia. Unless otherwise specified, references to the Company are references to Coherus and its consolidated subsidiaries. All intercompany transactions and balances have been eliminated upon consolidation. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X of the Securities Act of 1933, as amended (Securities Act). Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. These unaudited condensed consolidated financial statements include all adjustments, consisting only of normal recurring accruals that the Company believes are necessary to fairly state the financial position and the results of the Company’s operations and cash flows for interim periods in accordance with U.S. GAAP. Interim-period results are not necessarily indicative of results of operations or cash flows for a full year or any subsequent interim period. The accompanying condensed financial statements should be read in conjunction with the Company’s audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K filed with the SEC on March 14, 2017. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts and disclosures reported in the financial statements. Management uses significant judgment when making estimates related to its stock-based compensation, valuation of deferred tax assets, impairment of goodwill and long-lived assets, the valuation of acquired intangible assets, clinical trial accruals, revenue recognition period, contingent consideration, convertible notes valuation, as well as certain accrued liabilities. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates. Foreign Currency The functional currency of InteKrin Russia, which the Company acquired in February 2014, is the Russian Ruble. Accordingly, the financial statements of this subsidiary are translated into U.S. dollars using appropriate exchange rates. Unrealized gains or losses on translation are recognized in accumulated other comprehensive loss in the condensed consolidated balance sheet. The foreign exchange gains and losses recorded in other expense, net in the condensed consolidated statements of operations for the three months ended March 31, 2017 and 2016, were a net gain of $171,000 and a net loss of $264,000, respectively. Segment Reporting and Customer Concentration The Company operates and manages its business as one reportable and operating segment, which is the business of developing and commercializing biosimilar products, and, as part of the InteKrin acquisition, small molecules. The Company’s chief executive officer, who is the chief operating decision maker, reviews financial information on an aggregate basis for purposes of allocating resources and evaluating financial performance. Long-lived assets are primarily maintained in the United States of America. The following table summarizes revenue by geographic region (in thousands): Three Months Ended March 31, 2017 2016 United States $ — $ 12,005 Rest of world 161 354 Total revenue $ 161 $ 12,359 Customers whose collaboration and license revenue accounted for 10% or more of total revenues were as follows: Three Months Ended March 31, 2017 2016 Baxalta * 97 % Daiichi Sankyo 100 % * * less than 10% Cash and Cash Equivalents Cash and cash equivalents are comprised of cash and highly liquid investments with remaining maturities of 90 days or less at the date of purchase. The Company limits cash investments to financial institutions with high credit standings; therefore, management believes that there is no significant exposure to any credit risk in the Company’s cash and cash equivalents. Investments in Marketable Securities Management determines the appropriate classification of investments in marketable securities at the time of purchase based upon management’s intent with regards to such investments and reevaluates such designation as of each balance sheet date. All investments in marketable securities are held as “available-for-sale” and are carried at estimated fair value as determined based upon quoted market prices or pricing models for similar securities. The Company classifies investments in marketable securities as short-term when they have remaining contractual maturities of one year or less from the balance sheet date. Unrealized gains and losses are excluded from earnings and are reported as a component of accumulated comprehensive income (loss). Realized gains and losses and declines in value judged to be other than temporary, if any, on available –for-sale securities are included in other expense, net, based on specific identification method. Revenue Recognition The Company recognizes revenue when persuasive evidence of an arrangement exists; transfer of technology has been completed, services have been performed or products have been delivered; the fee is fixed and determinable; and collection is reasonably assured. For revenue agreements with multiple elements, the Company identifies the deliverables included within the agreement and evaluates which deliverables may represent separate units of accounting based on the achievement of certain criteria, including whether the delivered element has stand-alone value to the collaborator. Deliverables under the arrangement are a separate unit of accounting if (i) the delivered item has value to the customer on a standalone basis and (ii) if the arrangement includes a general right of return relative to the delivered item and delivery or performance of the undelivered items are considered probable and substantially within the Company’s control. The Company determines how to allocate arrangement consideration to identified units of accounting based on the selling price hierarchy provided under the relevant guidance. The selling price used for each unit of accounting is based on vendor-specific objective evidence, if available, third party evidence if vendor-specific objective evidence is not available or estimated selling price if neither vendor-specific nor third-party evidence is available. Management may be required to exercise considerable judgment in determining whether a deliverable is a separate unit of accounting and in estimating the selling prices of identified units of accounting under its agreements. Upfront payments received in connection with licenses of the Company’s technology rights are deferred if facts and circumstances dictate that the license does not have stand-alone value. Such payments are recognized as license revenue over the estimated period of performance that is generally consistent with the terms of the research and development obligations contained in the specific collaboration and license agreement. The Company regularly reviews the estimated period of performance based on the progress made under each arrangement. Amounts received as funding of research and development activities are recognized as revenue if the collaboration arrangement involves the sale of the Company’s research or development services. However, such funding is recognized as a reduction in research and development expense when the Company engages in a research and development project jointly with another entity, with both entities participating in project activities and sharing costs and potential benefits of the arrangement. Payments that are contingent upon the achievement of a substantive milestone are recognized in their entirety in the period in which the milestone is achieved, assuming all other revenue recognition criteria are met. A milestone is defined as an event that can only be achieved based on the Company’s performance where there is substantive uncertainty about whether the event will be achieved at the inception of the arrangement. Events that are contingent only on the passage of time or only on counterparty performance are not considered milestones under accounting guidance. The Company’s evaluation includes an assessment of whether (a) the consideration is commensurate with either (1) the Company’s performance to achieve the milestone, or (2) the enhancement of the value of the delivered item(s) as a result of a specific outcome resulting from the Company’s performance to achieve the milestone, (b) the consideration relates solely to past performance and (c) the consideration is reasonable relative to all of the deliverables and payment terms within the arrangement. The Company evaluates factors such as the scientific, regulatory, commercial and other risks that must be overcome to achieve the respective milestone, the level of effort and investment required to achieve the respective milestone and whether the milestone consideration is reasonable relative to all deliverables and payment terms in the arrangement in making this assessment. Other contingent payments in which a portion of the payment is refundable or adjusts based on future performance or non-performance (e.g., through a penalty or claw-back provision) are not considered to relate solely to the Company’s past performance, and therefore, not considered substantive. Non-substantive contingent payments are classified as deferred revenue if they are ultimately expected to result in revenue recognition. The Company recognizes non-substantive contingent payments over the remaining estimated period of performance once the specific objective is achieved. Any portion of the non-substantive contingent payments which may be required to be refunded to the collaborator are not included in deferred revenue and instead are reflected as contingent liability to collaborator on the condensed consolidated balance sheets. Contingent payments associated with the achievement of specific objectives in certain contracts that are not considered substantive because the Company does not contribute effort to the achievement of such milestones are recognized as revenue upon achievement of the objective, as long as there are no undelivered elements remaining and no continuing performance obligations by the Company, assuming all other revenue recognition criteria are met. Revenue from a government contract is recognized in the period during which the related costs are incurred and the related services are rendered, provided that the funds received are not refundable and applicable conditions under the government contract have been met. Funds received in advance are recorded as deferred revenue. Research and Development Expenses Research and development costs are charged to expenses as incurred. Research and development expenses include, among other costs, salaries and other personnel-related costs, consultant fees, preclinical costs, cost to manufacture drug candidates and clinical trial costs and supplies, laboratory supplies costs and facility-related costs. Costs incurred under agreements with third parties are charged to expense as incurred in accordance with the specific contractual performance terms of such agreements. Costs of third parties include costs associated with manufacturing drug candidates, preclinical and clinical support activities. Advance payments for goods or services to be received in the future to be utilized in research and development activities are deferred and capitalized. The capitalized amounts are expensed as the related goods are delivered or the services are received. The Company considers regulatory approval of product candidates to be uncertain, and product manufactured prior to regulatory approval may not be sold unless regulatory approval is obtained. The Company expenses manufacturing costs for product candidates incurred prior to regulatory approval as research and development expenses as the Company incurs them. If and when regulatory approval of a product is obtained, the Company will begin capitalizing manufacturing costs related to the approved product into inventory. Comprehensive Loss Comprehensive loss is composed of two components: net loss and other comprehensive loss. Other comprehensive loss refers to gains and losses that under U.S. GAAP are recorded as an element of stockholders’ equity, but are excluded from net loss. The Company’s other comprehensive loss includes unrealized gains and losses from available-for-sale marketable securities and foreign currency translation adjustments for the three months ended March 31, 2017 and 2016. Net Loss per Share Attributable to Coherus Basic net loss per share attributable to Coherus is calculated by dividing the net loss attributable to Coherus by the weighted-average number of shares of common stock outstanding for the period, without consideration for potential dilutive common shares. Since the Company was in a net loss position for the periods presented, basic net loss per share attributable to Coherus is the same as diluted net loss per share attributable to Coherus as the inclusion of all potential dilutive common shares would have been anti-dilutive for those periods presented. Recent Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers Revenue from Contracts with Customers Principal versus Agent Considerations Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients The new revenue standard permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (the modified retrospective method). The Company plans to adopt the standard in the first quarter of 2018 using the modified retrospective method. The Company has evaluated its contracts and assessed that the license agreement with Daiichi Sankyo (see Note 5) is the only contract that would be impacted by the new revenue standard, and the Company is currently evaluating the materiality that this contract may have on its condensed consolidated financial statements and related disclosures. In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities. all annual and interim reporting periods thereafter. E In February 2016, the FASB issued ASU No. 2016-02, Leases In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation: Improvements to Employee Share-Based Payment Accounting In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments In October 2016, the FASB issued ASU No. 2016-16, Income Taxes: Intra-Entity Transfers of Assets Other Than Inventory In January 2017, the FASB issued ASU No. 2017-04, Intangibles-Goodwill and Other: Simplifying the Test for Goodwill Impairment The Company has reviewed other recent accounting pronouncements and concluded they are either not applicable to the business or that no material effect is expected on the condensed consolidated financial statements as a result of future adoption. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 3. Fair Value Measurements Financial assets and liabilities are recorded at fair value. The carrying amounts of certain of the Company’s financial instruments, including cash and cash equivalents, restricted cash, investments in marketable securities, accounts receivable, accounts payable and other current liabilities approximate their fair value due to their short maturities. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The accounting guidance describes a fair value hierarchy based on three levels of inputs that may be used to measure fair value, of which the first two are considered observable and the last is considered unobservable. These levels of inputs are the following: Level 1 — Quoted prices in active markets for identical assets or liabilities. Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The Company’s financial instruments consist of Level 1 and Level 2 assets, and Level 3 liabilities. Where quoted prices are available in an active market, securities are classified as Level 1. Level 1 assets consist of highly liquid money market funds and U.S. government agency securities. When quoted market prices are not available for the specific security, then the Company estimate fair value by using quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs obtained from various third party data providers, including but not limited to, benchmark yields, interest rate curves, reported trades, broker/dealer quotes and market reference data. Level 2 assets consist of corporate notes and commercial paper. Level 2 inputs for the valuations are limited to quoted prices for similar assets or liabilities in active markets and inputs other than quoted prices that are observable for the asset or liability. In certain cases where there is limited activity or less transparency around inputs to valuation, securities are classified as Level 3. Level 3 liabilities consist of the contingent consideration. There were no transfers between Level 1 and Level 3 during the periods presented. In March 2017, there were transfers from Level 1 into Level 2 for the purchase of short-term investments in marketable securities. Financial assets and liabilities subject to fair value measurements on a recurring basis and the level of inputs used in such measurements are as follows (in thousands): Fair Value Measurements March 31, 2017 Total Level 1 Level 2 Level 3 Financial Assets: Money market funds $ 53,202 $ 53,202 $ — $ — Restricted cash (money market funds) 845 845 — — U.S. government agency securities 25,000 25,000 — — Corporate notes and commercial paper 93,804 — 93,804 — Total financial assets $ 172,851 $ 79,047 $ 93,804 $ — Financial Liabilities: Contingent consideration $ 5,940 $ — $ — $ 5,940 Fair Value Measurements December 31, 2016 Total Level 1 Level 2 Level 3 Financial Assets: Money market funds $ 104,240 $ 104,240 $ — $ — Restricted cash (money market funds) 845 845 — — Total financial assets $ 105,085 $ 105,085 $ — $ — Financial Liabilities: Contingent consideration $ 5,550 $ — $ — $ 5,550 Cash equivalents, investments in marketable securities, which are classified as available-for-sale securities, and restricted cash, consisted of the following (in thousands): March 31, 2017 Cost Unrealized Gain Unrealized (Loss) Estimated Fair Value Money market funds $ 53,202 $ — $ — $ 53,202 Corporate notes and commercial paper 48,928 1 (5 ) 48,924 U.S. government agency securities 19,979 1 — 19,980 Classified as cash equivalents $ 122,109 $ 2 $ (5 ) $ 122,106 Corporate notes and commercial paper $ 44,885 $ — $ (5 ) 44,880 U.S. government agency securities 5,021 — (1 ) 5,020 Classified as investments in marketable securities $ 49,906 $ — $ (6 ) $ 49,900 Restricted cash (money market funds) $ 845 $ — $ — $ 845 Classified as restricted cash $ 845 $ — $ — $ 845 December 31, 2016 Cost Unrealized Gain Unrealized (Loss) Estimated Fair Value Money market funds $ 104,240 $ — $ — $ 104,240 Classified as cash equivalents $ 104,240 $ — $ — $ 104,240 Restricted cash (money market funds) $ 845 $ — $ — $ 845 Classified as restricted cash $ 845 $ — $ — $ 845 As of March 31, 2017, the remaining contractual maturities of available-for-sale securities were less than one year. Contingent Consideration As part of the InteKrin acquisition in February 2014, the Company recognized contingent consideration associated with potential payments to be made to the former InteKrin stockholders upon (i) the first dosing of a human subject in the first Phase 2 Clinical Trial for CHS-131 ("Earn-Out Payment") and (ii) per a compound transaction agreement as defined in the purchase agreement (the “Compound Transaction Payment”). The contingent consideration related to the Earn-Out Payment was settled on March 6, 2015. This fair value measurement of the Compound Transaction Payment uses a probability-weighted discounted cash flow approach based on significant inputs not observable in the market and thus represents a Level 3 measurement within the fair value hierarchy. The Compound Transaction analysis as of March 31, 2017 applied a 25% risk-adjusted discount rate to measure present value and also captured an additional 8% credit spread for counterparty credit risk given the cash payment. The Company’s management estimates of probability of occurrence and timing were used to formulate an expected cash flow. The value of the consideration is tiered based on the value of a license or similar agreement with a third party and the timing of such agreement. Generally, increases or decreases in the probability of occurrence would result in a directionally similar impact in the fair value measurement of the Compound Transaction Payment and it is estimated that a 1% increase (decrease) in the probability of occurrence would result in a fair value fluctuation of approximately $0.2 million. The change in the fair value of the Compound Transaction Payment was recognized in other expense, net within the condensed consolidated statement of operations of $390,000 and $190,000 for the three months ended March 31, 2017 and 2016, respectively. The following table sets forth a summary of changes in the estimated fair value of the contingent consideration (in thousands): Balance as of December 31, 2016 $ 5,550 Change in fair value of the contingent consideration liability 390 Balance as of March 31, 2017 $ 5,940 Convertible Notes The estimated fair value of the 8.2% Convertible Senior Notes Due 2022, which the Company issued on February 29, 2016 (see Note 6) is based on an income approach. The estimated fair value was approximately $144.0 million (par value $100.0 million) as of March 31, 2017 and represents a Level 3 valuation. When determining the estimated fair value of the Company’s long-term debt, the Company uses a single factor binomial lattice model which incorporates the terms and conditions of the convertible notes and market based risk measurement that are indirectly observable, such as credit risk. The lattice model produces an estimated fair value based on changes in the price of the underlying common shares price over successive periods of time. An estimated yield based on market data is used to discount straight debt cash flows. Key valuation assumptions used for the convertible debt valuation was volatility of 70% for the Company’s common stock and straight debt yield of 14.6% as of March 31 ,2017. |
Balance Sheet Components
Balance Sheet Components | 3 Months Ended |
Mar. 31, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Balance Sheet Components | 4. Balance Sheet Components Prepaid Assets Prepaid assets are as follows (in thousands): March 31, December 31, 2017 2016 Prepaid clinical and other - related parties (see Note 10) $ 3,450 $ 3,714 Prepaid clinical, material and manufacturing 24,377 25,095 Prepaid other 2,657 2,825 Prepaid assets $ 30,484 $ 31,634 Property and Equipment, Net Property and equipment, net are as follows (in thousands): March 31, December 31, 2017 2016 Machinery and equipment $ 10,819 $ 10,294 Computer equipment and software 1,657 1,500 Furniture and fixtures 714 682 Leasehold improvements 4,344 4,322 Construction in progress 4,229 — Total property and equipment 21,763 16,798 Accumulated depreciation and amortization (6,890 ) (6,026 ) Property and equipment, net $ 14,873 $ 10,772 Depreciation and amortization expense was $865,000 and $717,000 for the three months ended March 31, 2017 and 2016, respectively. Accrued Liabilities Accrued liabilities are as follows (in thousands): March 31, December 31, 2017 2016 Accrued clinical - related parties (See Note 10) $ 1,832 $ 3,542 Accrued clinical and manufacturing 14,858 16,039 Accrued compensation 3,754 6,945 Accrued other 4,223 1,496 Accrued liabilities $ 24,667 $ 28,022 |
Collaboration and License Agree
Collaboration and License Agreements | 3 Months Ended |
Mar. 31, 2017 | |
Collaboration And License Agreements [Abstract] | |
Collaboration and License Agreements | 5. Collaboration and License Agreements The Company recognized revenue related to the collaboration and license agreements for the periods presented as follows (in thousands): Three Months Ended March 31, 2017 2016 Baxalta $ — $ 12,005 Daiichi Sankyo 161 354 Total collaboration and license revenue $ 161 $ 12,359 Daiichi Sankyo In January 2012, the Company entered into a license agreement with Daiichi Sankyo, under which the Company granted certain licenses to Daiichi Sankyo to develop and commercialize biosimilar forms of etanercept and rituximab in Japan, Taiwan, and South Korea, with an option to develop in China. Upon execution of the agreement, Daiichi Sankyo paid a non-refundable, upfront license fee of $10.0 million which was recorded as deferred revenue and is being amortized over the remaining estimated performance period under the agreement using the straight line method. In June 2013, the Company and Daiichi Sankyo entered into a Memorandum of Understanding No. 1 (the “MOU 1”) in which both parties agreed to cooperate and share costs to conduct a global Phase 1 study of a biosimilar form of etanercept. This program was not originally contemplated in the license agreement. The amounts received from Daiichi Sankyo under the MOU 1 are recognized as a reduction in research and development expense as the Company engages in a research and development project jointly with Daiichi Sankyo, with both parties incurring costs while actively participating in development activities and both parties sharing costs and potential benefits of the arrangement. In January 2014, the Company and Daiichi Sankyo entered into the Memorandum of Understanding No. 2 (the “MOU 2”) in which both parties agreed to cooperate to conduct a global Phase 3 clinical trial in rheumatoid arthritis. In June 2015, the parties also entered into the Memorandum of Understanding No. 3 (the “MOU 3”) in which both parties agreed to cooperate further on a global Phase 3 clinical trial for an open label, safety extension study (“OLSES”) in rheumatoid arthritis. Daiichi Sankyo will be responsible for a minimum of 20% of the cost of the clinical trial. The Company also entered into a clinical supply agreement as part of MOU 2 and MOU 3 in which the Company will supply finished study drug and study comparator drug for Daiichi Sankyo’s use in the Japanese portion of the product’s clinical trial. Daiichi Sankyo reimburses these research and development costs in quarterly advance payments, for which the Company recorded $1.1 million at both March 31, 2017 and December 31, 2016 in the condensed consolidated balance sheet, as advance payments under license agreement. The Company will recognize the advance payment as a reduction in the research and development expense when the research and development activity has been performed. In July 2016 and December 2016, the Company entered into three memoranda of understanding (“MOU 4” “MOU 5” and “MOU 6”) with Daiichi Sankyo. Under MOU 4, MOU 5 and MOU 6, the Company will receive up to or reimbursements of certain past costs incurred and to be incurred and the Company will recognize these reimbursements as a reduction of research and development expenses when the research and development activity is performed. As of March 31, 2017, $1.4 million of revenue was deferred under all arrangements with Daiichi Sankyo, of which $0.7 million was included in current liabilities and $0.7 million was included in non-current liabilities in the condensed consolidated balance sheet. As of December 31, 2016, $1.6 million of revenue was deferred under all arrangements with Daiichi Sankyo, of which $0.9 million was included in current liabilities and $0.7 million was included in non-current liabilities in the condensed consolidated balance sheet. The Company recognized in its condensed consolidated statements of operations a reduction of research and development expense related to the costs reimbursed by Daiichi Sankyo of $1.9 million and $1.1 million for the three months ended March 31, 2017 and 2016, respectively. Baxalta The Company entered into a license agreement in August 2013 and two subsequent amendments thereto with Baxalta Incorporated, Baxalta US Inc., and Baxalta GmbH (collectively “Baxalta”) (then Baxter International, Inc., part of Shire plc as of June 2016 On September 26, 2016, Shire issued a termination notice of the Baxalta Agreement, in its entirety as part of its strategic portfolio review after its acquisition of Baxalta. Upon the termination of the Baxalta Agreement, the Company regained from Shire all development and commercial rights previously licensed under the CHS-0214. There were no further contractual obligations. Therefore, th e Company recognized the outstanding balances of deferred revenue and contingent liability to collaborator as revenue in its condensed consolidated statements of operations in 2016. |
Convertible Notes
Convertible Notes | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Convertible Notes | 6. Convertible Notes On February 29, 2016, the Company issued and sold $100.0 million aggregate principal amount of its 8.2% Convertible Senior Notes (the “Convertible Notes”). The Convertible Notes constitute general, senior unsubordinated obligations of the Company and are guaranteed by certain subsidiaries of the Company. The Convertible Notes bear interest at a fixed coupon rate of 8.2% per annum payable quarterly in arrears on March 31, June 30, September 30 and December 31 of each year, which commenced on March 31, 2016, and mature on March 31, 2022, unless earlier converted, redeemed or repurchased. The Convertible Notes also bear a premium of 9% of their principal amount, which is payable when the Convertible Notes mature or are repurchased or redeemed by the Company. The Convertible Notes were issued to Healthcare Royalty Partners III, L.P., for $75.0 million in aggregate principal amount, and to three related party investors, KKR Biosimilar L.P., MX II Associates LLC, and KMG Capital Partners, LLC, for $20.0 million, $4.0 million, and $1.0 million, respectively, in aggregate principal amount. The Convertible Notes are convertible at the option of the holder at any time prior to the close of business on the business day immediately preceding March 31, 2022 at the initial conversion rate of 44.7387 shares of common stock per $1,000 principal amount of Convertible Notes, which is equivalent to an initial conversion price of approximately $22.35 per share, and is subject to adjustment in certain events. Upon conversion of the Convertible Notes by a holder, the holder will receive shares of the Company’s common stock together, if applicable, with cash in lieu of any fractional share. The Convertible Notes are redeemable in whole, and not in part, at the Company’s option on or after March 31, 2020, if the last reported sale price per share of common stock exceeds 160% of the conversion price on 20 or more trading days during the 30 consecutive trading days preceding the date on which the Company sends notice of such redemption to the holders of the Convertible Notes. At maturity or redemption, if not earlier converted, the Company will pay 109% of the principal amount of the Convertible Notes maturing or being redeemed, together with accrued and unpaid interest, in cash. The Convertible Notes contain customary negative covenants and events of default (as defined in the Convertible Note purchase agreement), the occurrence of which could result in the acceleration of all amounts due under the Convertible Note. As of March 31, 2017, the Company was in full compliance with these covenants and there were no events of default under the Convertible Notes. The Convertible Notes are accounted for in accordance with ASC Subtopic 470-20, Debt with Conversion and Other Options The following table summarizes information about the components of the Convertible Notes (in thousands): March 31, December 31, 2017 2016 Principal amount of the Convertible Notes $ 81,750 $ 81,750 Unamortized debt discount and debt issuance costs (6,313 ) (6,558 ) Convertible Notes $ 75,437 $ 75,192 Principal amount of the Convertible Notes - related parties $ 27,250 $ 27,250 Unamortized debt discount and debt issuance costs - related parties (2,104 ) (2,186 ) Convertible Notes - related parties $ 25,146 $ 25,064 Total Convertible Notes $ 100,583 $ 100,256 If the Convertible Notes were to be converted on March 31, 2017, the holders of the Convertible Notes would receive common shares with an aggregate value of $94.6 million based on the Company’s closing stock price of $21.15. The following table presents the components of interest expense (in thousands): Three Months Ended March 31, 2017 2016 Stated coupon interest $ 1,538 $ 547 Accretion of debt discount and debt issuance costs 245 80 Interest expense $ 1,783 $ 627 Stated coupon interest - related parties $ 512 $ 182 Accretion of debt discount and debt issuance costs - related parties 81 27 Interest expense - related parties $ 593 $ 209 Total interest expense $ 2,376 $ 836 The remaining unamortized debt discount and debt offering costs related to the Company’s Convertible Notes of approximately $8.4 million as of March 31, 2017, will be amortized using the effective interest rate over the remaining term of the Convertible Notes of 5.0 years. The annual effective interest rate is 9.48% for the Convertible Notes. During the three months ended March 31, 2017 and 2016, respectively, the Company recognized total interest expense of $2.4 million and $0.8 million, respectively, related to the Convertible Notes’ accrued interest and amortization of the debt discount. Future payments on the Convertible Notes as of March 31, 2017 are as follows (in thousands): Year ending December 31, Remainder of 2017 $ 6,150 2018 8,200 2019 8,200 2020 8,200 2021 8,200 2022 and thereafter 111,050 Total minimum payments 150,000 Less amount representing interest (41,000 ) Convertible Notes, principal amount 109,000 Less debt discount and debt issuance costs on Convertible Notes (8,417 ) Net carrying amount of Convertible Notes $ 100,583 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 7. Commitments and Contingencies Purchase Commitments The Company enters into contracts in the normal course of business with contract research organizations for preclinical studies and clinical trials and contract manufacturing organizations for the manufacture of clinical trial materials. The contracts are cancellable, with varying provisions regarding termination. If a contract with a specific vendor were to be terminated, the Company would only be obligated for products or services that the Company had received as of the effective date of the termination and any applicable cancellation fees. Contingencies On March 3, 2017, Amgen Inc. and Amgen USA Inc. (collectively “Amgen”) filed an action against the Company, KBI BioPharma Inc., the Company’s employee Howard S. Weiser and Does 1-20 in the Superior Court of the State of California, County of Ventura. The complaint alleges that the Company engaged in unfair competition and improperly solicited and hired certain former Amgen employees in order to acquire and access trade secrets and other confidential information belonging to Amgen. On April 21, 2017, Amgen filed a First Amended Complaint, which alleges as to Coherus (i) unfair competition under California Business and Professions Code Section 17200 et seq., (ii) misappropriation of trade secrets, (iii) aiding and abetting breach of duty of loyalty and (iv) tortious interference with contract. As to defendant Weiser, the First Amended Complaint also alleges (i) breach of contract, (ii) violation of Penal Code Section 502 and (iii) breach of duty of loyalty. The First Amended Complaint seeks injunctive relief and monetary damages. Although Amgen has indicated it intends to seek a preliminary injunction, no motion has been filed yet, and no schedule has been set in this matter. The Company believes that this lawsuit is without merit and intends to vigorously defend its position. However, if Amgen were to be successful in its effort to seek injunctive relief, this legal action may delay the timing of our CHS-1701 commercial release, and negatively affect our future revenues and results of operations. It is not possible at this time to determine the likelihood of an unfavorable outcome or an estimate of the amount or range of any potential loss. Guarantees and Indemnifications In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and provide for general indemnifications. The Company’s exposure under these agreements is unknown because it involves claims that may be made against the Company in the future, but have not yet been made. To date, the Company has not paid any claims or been required to defend any action related to its indemnification obligations. However, the Company may record charges in the future as a result of these indemnification obligations. The Company would assess the likelihood of any adverse judgments or related claims, as well as ranges of probable losses. In the cases where the Company believes that a reasonably possible or probable loss exists, it will disclose the facts and circumstances of the claims, including an estimate range, if possible. |
Common Stock and Stock-Based Co
Common Stock and Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Common Stock and Stock-Based Compensation | 8. Common Stock and Stock-Based Compensation Common Stock Offerings In October 28, 2016, the Company entered into a sales agreement (the “Sales Agreement”) with Cowen to sell shares of the Company’s common stock, with aggregate gross sales proceeds of up to $100,000,000, from time to time, through an at-the-market equity offering program under which Cowen will act as its sales agent (the “ATM Offering Program”). Cowen is entitled to compensation for its services equal to 3.0% of the gross proceeds of any shares of common stock sold through Cowen under the Sales Agreement. In January 2017, the Company sold 148,827 shares of common stock at a weighted average price of $28.88 per share through its ATM Offering Program and received total gross proceeds of $4.3 million. After deducting commissions of $0.1 million, the net proceeds were $4.2 million. In February and March 2017, the Company issued and sold 5,294,902 shares of common stock at a price of $24.25 per share. The Company received total gross proceeds from the offering of $128.4 million. After deducting underwriting discounts and commissions of $7.7 million and offering expense of $0.3 million, the net proceeds were $120.4 million. Stock-Based Compensation The stock-based compensation expense recorded related to options and restricted stock units granted to employees and nonemployees were as follows (in thousands): Three Months Ended March 31, 2017 2016 Research and development $ 3,900 $ 2,520 General and administrative 3,910 2,798 $ 7,810 $ 5,318 |
Net Loss Per Share Attributable
Net Loss Per Share Attributable to Coherus | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share Attributable to Coherus | 9. Net Loss Per Share Attributable to Coherus The following table sets forth the computation of the basic and diluted net loss per share attributable to Coherus (in thousands, except share and per share data): Three Months Ended March 31, 2017 2016 Numerator: Net loss attributable to Coherus $ (74,778 ) $ (65,388 ) Denominator: Weighted-average number of shares used in computing net loss per share attributable to Coherus, basic and diluted 48,711,958 39,095,975 Net loss per share attributable to Coherus, basic and diluted $ (1.54 ) $ (1.67 ) The following outstanding dilutive potential shares have been excluded from the calculation of diluted net loss per share attributable to Coherus due to their anti-dilutive effect: Outstanding as of March 31, 2017 2016 Stock options 10,656,082 8,110,487 Restricted stock units 12,000 — Shares issuable upon conversion of Convertible Notes 4,473,871 4,473,871 Total 15,141,953 12,584,358 |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 10. Related Party Transactions Transactions Associated with Medpace Agreement One member of the Company’s board of directors is also the chief executive officer of Medpace. As such, Medpace was deemed to be a related party. As March 31, 2017, the Company had $3.5 million in prepaid assets (prepaid clinical and other–related parties), $2.0 million in current other assets, $2.1 million in accounts payable–related parties, and $1.8 million in accrued and other liabilities (accrued clinical and other–related parties), all reflected on the Company’s condensed consolidated balance sheet associated with Medpace. As of December 31, 2016, the Company had $3.7 million in prepaid assets (prepaid clinical and other–related parties), $2.2 million in current other assets, $0.9 million in accounts payable–related parties, and $3.5 million in accrued and other liabilities (accrued clinical–related parties), all reflected on the Company’s condensed consolidated balance sheet associated with Medpace. The Company recognized $3.8 million and $13.1 million during the three months ended March 31, 2017 and 2016, respectively, for services rendered by Medpace within research and development expense in the condensed consolidated statements of operations. Recruiting Services One member of the Company’s board of directors is a partner of a firm that provided recruiting services to the Company. As such, the recruiting services provided were deemed to be related party transactions. As of March 31, 2017 and December 31, 2016, there were no such related party balances in the Company’s condensed consolidated balance sheet. The Company recorded in research and development expense in its condensed consolidated statements of operations, $0 and $131,000 for the three months ended March 31, 2017 and 2016, respectively, for services rendered by the recruiting company. The Company recorded in general and administrative expense in its condensed consolidated statements of operations, $65,000 and $0 for the three months ended March 31, 2017 and 2016, respectively, for services rendered by the recruiting company. Convertible Notes In February 2016, the Company issued Convertible Notes to certain related parties (some companies affiliated with members of the Company’s board of directors), for an aggregate principal amount of $25.0 million (see Note 6 for related party disclosure). |
Basis of Presentation and Sum18
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Unaudited Condensed Consolidated Financial Statements | Unaudited Condensed Consolidated Financial Statements The accompanying condensed consolidated financial statements include the accounts of Coherus and its wholly owned subsidiaries as of March 31, 2017: Coherus Intermediate Corp, Coherus Oncology, Inc., Orphonix, Inc., InteKrin Therapeutics Inc. (“InteKrin”), and InteKrin’s 82.5% majority owned subsidiary of InteKrin Russia. Unless otherwise specified, references to the Company are references to Coherus and its consolidated subsidiaries. All intercompany transactions and balances have been eliminated upon consolidation. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X of the Securities Act of 1933, as amended (Securities Act). Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. These unaudited condensed consolidated financial statements include all adjustments, consisting only of normal recurring accruals that the Company believes are necessary to fairly state the financial position and the results of the Company’s operations and cash flows for interim periods in accordance with U.S. GAAP. Interim-period results are not necessarily indicative of results of operations or cash flows for a full year or any subsequent interim period. The accompanying condensed financial statements should be read in conjunction with the Company’s audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K filed with the SEC on March 14, 2017. |
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 amounts and disclosures reported in the financial statements. Management uses significant judgment when making estimates related to its stock-based compensation, valuation of deferred tax assets, impairment of goodwill and long-lived assets, the valuation of acquired intangible assets, clinical trial accruals, revenue recognition period, contingent consideration, convertible notes valuation, as well as certain accrued liabilities. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates. |
Foreign Currency | Foreign Currency The functional currency of InteKrin Russia, which the Company acquired in February 2014, is the Russian Ruble. Accordingly, the financial statements of this subsidiary are translated into U.S. dollars using appropriate exchange rates. Unrealized gains or losses on translation are recognized in accumulated other comprehensive loss in the condensed consolidated balance sheet. The foreign exchange gains and losses recorded in other expense, net in the condensed consolidated statements of operations for the three months ended March 31, 2017 and 2016, were a net gain of $171,000 and a net loss of $264,000, respectively. |
Segment Reporting and Customer Concentration | Segment Reporting and Customer Concentration The Company operates and manages its business as one reportable and operating segment, which is the business of developing and commercializing biosimilar products, and, as part of the InteKrin acquisition, small molecules. The Company’s chief executive officer, who is the chief operating decision maker, reviews financial information on an aggregate basis for purposes of allocating resources and evaluating financial performance. Long-lived assets are primarily maintained in the United States of America. The following table summarizes revenue by geographic region (in thousands): Three Months Ended March 31, 2017 2016 United States $ — $ 12,005 Rest of world 161 354 Total revenue $ 161 $ 12,359 Customers whose collaboration and license revenue accounted for 10% or more of total revenues were as follows: Three Months Ended March 31, 2017 2016 Baxalta * 97 % Daiichi Sankyo 100 % * * less than 10% |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents are comprised of cash and highly liquid investments with remaining maturities of 90 days or less at the date of purchase. The Company limits cash investments to financial institutions with high credit standings; therefore, management believes that there is no significant exposure to any credit risk in the Company’s cash and cash equivalents. |
Investments in Marketable Securities | Investments in Marketable Securities Management determines the appropriate classification of investments in marketable securities at the time of purchase based upon management’s intent with regards to such investments and reevaluates such designation as of each balance sheet date. All investments in marketable securities are held as “available-for-sale” and are carried at estimated fair value as determined based upon quoted market prices or pricing models for similar securities. The Company classifies investments in marketable securities as short-term when they have remaining contractual maturities of one year or less from the balance sheet date. Unrealized gains and losses are excluded from earnings and are reported as a component of accumulated comprehensive income (loss). Realized gains and losses and declines in value judged to be other than temporary, if any, on available –for-sale securities are included in other expense, net, based on specific identification method. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue when persuasive evidence of an arrangement exists; transfer of technology has been completed, services have been performed or products have been delivered; the fee is fixed and determinable; and collection is reasonably assured. For revenue agreements with multiple elements, the Company identifies the deliverables included within the agreement and evaluates which deliverables may represent separate units of accounting based on the achievement of certain criteria, including whether the delivered element has stand-alone value to the collaborator. Deliverables under the arrangement are a separate unit of accounting if (i) the delivered item has value to the customer on a standalone basis and (ii) if the arrangement includes a general right of return relative to the delivered item and delivery or performance of the undelivered items are considered probable and substantially within the Company’s control. The Company determines how to allocate arrangement consideration to identified units of accounting based on the selling price hierarchy provided under the relevant guidance. The selling price used for each unit of accounting is based on vendor-specific objective evidence, if available, third party evidence if vendor-specific objective evidence is not available or estimated selling price if neither vendor-specific nor third-party evidence is available. Management may be required to exercise considerable judgment in determining whether a deliverable is a separate unit of accounting and in estimating the selling prices of identified units of accounting under its agreements. Upfront payments received in connection with licenses of the Company’s technology rights are deferred if facts and circumstances dictate that the license does not have stand-alone value. Such payments are recognized as license revenue over the estimated period of performance that is generally consistent with the terms of the research and development obligations contained in the specific collaboration and license agreement. The Company regularly reviews the estimated period of performance based on the progress made under each arrangement. Amounts received as funding of research and development activities are recognized as revenue if the collaboration arrangement involves the sale of the Company’s research or development services. However, such funding is recognized as a reduction in research and development expense when the Company engages in a research and development project jointly with another entity, with both entities participating in project activities and sharing costs and potential benefits of the arrangement. Payments that are contingent upon the achievement of a substantive milestone are recognized in their entirety in the period in which the milestone is achieved, assuming all other revenue recognition criteria are met. A milestone is defined as an event that can only be achieved based on the Company’s performance where there is substantive uncertainty about whether the event will be achieved at the inception of the arrangement. Events that are contingent only on the passage of time or only on counterparty performance are not considered milestones under accounting guidance. The Company’s evaluation includes an assessment of whether (a) the consideration is commensurate with either (1) the Company’s performance to achieve the milestone, or (2) the enhancement of the value of the delivered item(s) as a result of a specific outcome resulting from the Company’s performance to achieve the milestone, (b) the consideration relates solely to past performance and (c) the consideration is reasonable relative to all of the deliverables and payment terms within the arrangement. The Company evaluates factors such as the scientific, regulatory, commercial and other risks that must be overcome to achieve the respective milestone, the level of effort and investment required to achieve the respective milestone and whether the milestone consideration is reasonable relative to all deliverables and payment terms in the arrangement in making this assessment. Other contingent payments in which a portion of the payment is refundable or adjusts based on future performance or non-performance (e.g., through a penalty or claw-back provision) are not considered to relate solely to the Company’s past performance, and therefore, not considered substantive. Non-substantive contingent payments are classified as deferred revenue if they are ultimately expected to result in revenue recognition. The Company recognizes non-substantive contingent payments over the remaining estimated period of performance once the specific objective is achieved. Any portion of the non-substantive contingent payments which may be required to be refunded to the collaborator are not included in deferred revenue and instead are reflected as contingent liability to collaborator on the condensed consolidated balance sheets. Contingent payments associated with the achievement of specific objectives in certain contracts that are not considered substantive because the Company does not contribute effort to the achievement of such milestones are recognized as revenue upon achievement of the objective, as long as there are no undelivered elements remaining and no continuing performance obligations by the Company, assuming all other revenue recognition criteria are met. Revenue from a government contract is recognized in the period during which the related costs are incurred and the related services are rendered, provided that the funds received are not refundable and applicable conditions under the government contract have been met. Funds received in advance are recorded as deferred revenue. |
Research and Development Expenses | Research and Development Expenses Research and development costs are charged to expenses as incurred. Research and development expenses include, among other costs, salaries and other personnel-related costs, consultant fees, preclinical costs, cost to manufacture drug candidates and clinical trial costs and supplies, laboratory supplies costs and facility-related costs. Costs incurred under agreements with third parties are charged to expense as incurred in accordance with the specific contractual performance terms of such agreements. Costs of third parties include costs associated with manufacturing drug candidates, preclinical and clinical support activities. Advance payments for goods or services to be received in the future to be utilized in research and development activities are deferred and capitalized. The capitalized amounts are expensed as the related goods are delivered or the services are received. The Company considers regulatory approval of product candidates to be uncertain, and product manufactured prior to regulatory approval may not be sold unless regulatory approval is obtained. The Company expenses manufacturing costs for product candidates incurred prior to regulatory approval as research and development expenses as the Company incurs them. If and when regulatory approval of a product is obtained, the Company will begin capitalizing manufacturing costs related to the approved product into inventory. |
Comprehensive Loss | Comprehensive Loss Comprehensive loss is composed of two components: net loss and other comprehensive loss. Other comprehensive loss refers to gains and losses that under U.S. GAAP are recorded as an element of stockholders’ equity, but are excluded from net loss. The Company’s other comprehensive loss includes unrealized gains and losses from available-for-sale marketable securities and foreign currency translation adjustments for the three months ended March 31, 2017 and 2016. |
Net Loss per Share Attributable to Coherus | Net Loss per Share Attributable to Coherus Basic net loss per share attributable to Coherus is calculated by dividing the net loss attributable to Coherus by the weighted-average number of shares of common stock outstanding for the period, without consideration for potential dilutive common shares. Since the Company was in a net loss position for the periods presented, basic net loss per share attributable to Coherus is the same as diluted net loss per share attributable to Coherus as the inclusion of all potential dilutive common shares would have been anti-dilutive for those periods presented. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers Revenue from Contracts with Customers Principal versus Agent Considerations Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients The new revenue standard permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (the modified retrospective method). The Company plans to adopt the standard in the first quarter of 2018 using the modified retrospective method. The Company has evaluated its contracts and assessed that the license agreement with Daiichi Sankyo (see Note 5) is the only contract that would be impacted by the new revenue standard, and the Company is currently evaluating the materiality that this contract may have on its condensed consolidated financial statements and related disclosures. In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities. all annual and interim reporting periods thereafter. E In February 2016, the FASB issued ASU No. 2016-02, Leases In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation: Improvements to Employee Share-Based Payment Accounting In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments In October 2016, the FASB issued ASU No. 2016-16, Income Taxes: Intra-Entity Transfers of Assets Other Than Inventory In January 2017, the FASB issued ASU No. 2017-04, Intangibles-Goodwill and Other: Simplifying the Test for Goodwill Impairment The Company has reviewed other recent accounting pronouncements and concluded they are either not applicable to the business or that no material effect is expected on the condensed consolidated financial statements as a result of future adoption. |
Fair Value Measurements | Fair Value Measurements Financial assets and liabilities are recorded at fair value. The carrying amounts of certain of the Company’s financial instruments, including cash and cash equivalents, restricted cash, investments in marketable securities, accounts receivable, accounts payable and other current liabilities approximate their fair value due to their short maturities. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The accounting guidance describes a fair value hierarchy based on three levels of inputs that may be used to measure fair value, of which the first two are considered observable and the last is considered unobservable. These levels of inputs are the following: Level 1 — Quoted prices in active markets for identical assets or liabilities. Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The Company’s financial instruments consist of Level 1 and Level 2 assets, and Level 3 liabilities. Where quoted prices are available in an active market, securities are classified as Level 1. Level 1 assets consist of highly liquid money market funds and U.S. government agency securities. When quoted market prices are not available for the specific security, then the Company estimate fair value by using quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs obtained from various third party data providers, including but not limited to, benchmark yields, interest rate curves, reported trades, broker/dealer quotes and market reference data. Level 2 assets consist of corporate notes and commercial paper. Level 2 inputs for the valuations are limited to quoted prices for similar assets or liabilities in active markets and inputs other than quoted prices that are observable for the asset or liability. In certain cases where there is limited activity or less transparency around inputs to valuation, securities are classified as Level 3. Level 3 liabilities consist of the contingent consideration. |
Basis of Presentation and Sum19
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Revenue by Geographical Region | The following table summarizes revenue by geographic region (in thousands): Three Months Ended March 31, 2017 2016 United States $ — $ 12,005 Rest of world 161 354 Total revenue $ 161 $ 12,359 |
Summary of Customers Revenue Accounted for 10% or More of Total Revenue | Customers whose collaboration and license revenue accounted for 10% or more of total revenues were as follows: Three Months Ended March 31, 2017 2016 Baxalta * 97 % Daiichi Sankyo 100 % * * less than 10% |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Financial Assets and Liabilities Measured on a Recurring Basis | Financial assets and liabilities subject to fair value measurements on a recurring basis and the level of inputs used in such measurements are as follows (in thousands): Fair Value Measurements March 31, 2017 Total Level 1 Level 2 Level 3 Financial Assets: Money market funds $ 53,202 $ 53,202 $ — $ — Restricted cash (money market funds) 845 845 — — U.S. government agency securities 25,000 25,000 — — Corporate notes and commercial paper 93,804 — 93,804 — Total financial assets $ 172,851 $ 79,047 $ 93,804 $ — Financial Liabilities: Contingent consideration $ 5,940 $ — $ — $ 5,940 Fair Value Measurements December 31, 2016 Total Level 1 Level 2 Level 3 Financial Assets: Money market funds $ 104,240 $ 104,240 $ — $ — Restricted cash (money market funds) 845 845 — — Total financial assets $ 105,085 $ 105,085 $ — $ — Financial Liabilities: Contingent consideration $ 5,550 $ — $ — $ 5,550 |
Schedule of Cash Equivalents, Investments in Marketable Securities Classified as Available-for-Sale Securities and Restricted Cash | Cash equivalents, investments in marketable securities, which are classified as available-for-sale securities, and restricted cash, consisted of the following (in thousands): March 31, 2017 Cost Unrealized Gain Unrealized (Loss) Estimated Fair Value Money market funds $ 53,202 $ — $ — $ 53,202 Corporate notes and commercial paper 48,928 1 (5 ) 48,924 U.S. government agency securities 19,979 1 — 19,980 Classified as cash equivalents $ 122,109 $ 2 $ (5 ) $ 122,106 Corporate notes and commercial paper $ 44,885 $ — $ (5 ) 44,880 U.S. government agency securities 5,021 — (1 ) 5,020 Classified as investments in marketable securities $ 49,906 $ — $ (6 ) $ 49,900 Restricted cash (money market funds) $ 845 $ — $ — $ 845 Classified as restricted cash $ 845 $ — $ — $ 845 December 31, 2016 Cost Unrealized Gain Unrealized (Loss) Estimated Fair Value Money market funds $ 104,240 $ — $ — $ 104,240 Classified as cash equivalents $ 104,240 $ — $ — $ 104,240 Restricted cash (money market funds) $ 845 $ — $ — $ 845 Classified as restricted cash $ 845 $ — $ — $ 845 |
Summary of Changes in the Estimated Fair Value of Contingent Consideration | The following table sets forth a summary of changes in the estimated fair value of the contingent consideration (in thousands): Balance as of December 31, 2016 $ 5,550 Change in fair value of the contingent consideration liability 390 Balance as of March 31, 2017 $ 5,940 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Schedule of Prepaid Assets | Prepaid assets are as follows (in thousands): March 31, December 31, 2017 2016 Prepaid clinical and other - related parties (see Note 10) $ 3,450 $ 3,714 Prepaid clinical, material and manufacturing 24,377 25,095 Prepaid other 2,657 2,825 Prepaid assets $ 30,484 $ 31,634 |
Schedule of Property and Equipment, Net | Property and equipment, net are as follows (in thousands): March 31, December 31, 2017 2016 Machinery and equipment $ 10,819 $ 10,294 Computer equipment and software 1,657 1,500 Furniture and fixtures 714 682 Leasehold improvements 4,344 4,322 Construction in progress 4,229 — Total property and equipment 21,763 16,798 Accumulated depreciation and amortization (6,890 ) (6,026 ) Property and equipment, net $ 14,873 $ 10,772 |
Schedule of Accrued Liabilities | Accrued liabilities are as follows (in thousands): March 31, December 31, 2017 2016 Accrued clinical - related parties (See Note 10) $ 1,832 $ 3,542 Accrued clinical and manufacturing 14,858 16,039 Accrued compensation 3,754 6,945 Accrued other 4,223 1,496 Accrued liabilities $ 24,667 $ 28,022 |
Collaboration and License Agr22
Collaboration and License Agreements (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Collaboration And License Agreements [Abstract] | |
Schedule of Revenue Related to Collaboration and License Agreements | The Company recognized revenue related to the collaboration and license agreements for the periods presented as follows (in thousands): Three Months Ended March 31, 2017 2016 Baxalta $ — $ 12,005 Daiichi Sankyo 161 354 Total collaboration and license revenue $ 161 $ 12,359 |
Convertible Notes (Tables)
Convertible Notes (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Components of Convertible Notes | The following table summarizes information about the components of the Convertible Notes (in thousands): March 31, December 31, 2017 2016 Principal amount of the Convertible Notes $ 81,750 $ 81,750 Unamortized debt discount and debt issuance costs (6,313 ) (6,558 ) Convertible Notes $ 75,437 $ 75,192 Principal amount of the Convertible Notes - related parties $ 27,250 $ 27,250 Unamortized debt discount and debt issuance costs - related parties (2,104 ) (2,186 ) Convertible Notes - related parties $ 25,146 $ 25,064 Total Convertible Notes $ 100,583 $ 100,256 |
Components of Interest Expense | The following table presents the components of interest expense (in thousands): Three Months Ended March 31, 2017 2016 Stated coupon interest $ 1,538 $ 547 Accretion of debt discount and debt issuance costs 245 80 Interest expense $ 1,783 $ 627 Stated coupon interest - related parties $ 512 $ 182 Accretion of debt discount and debt issuance costs - related parties 81 27 Interest expense - related parties $ 593 $ 209 Total interest expense $ 2,376 $ 836 |
Schedule of Future Payments on the Convertible Notes | Future payments on the Convertible Notes as of March 31, 2017 are as follows (in thousands): Year ending December 31, Remainder of 2017 $ 6,150 2018 8,200 2019 8,200 2020 8,200 2021 8,200 2022 and thereafter 111,050 Total minimum payments 150,000 Less amount representing interest (41,000 ) Convertible Notes, principal amount 109,000 Less debt discount and debt issuance costs on Convertible Notes (8,417 ) Net carrying amount of Convertible Notes $ 100,583 |
Common Stock and Stock-Based 24
Common Stock and Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Employees and Nonemployees Stock Option Restricted Stock Units | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |
Schedule of Stock-Based Compensation Expense | The stock-based compensation expense recorded related to options and restricted stock units granted to employees and nonemployees were as follows (in thousands): Three Months Ended March 31, 2017 2016 Research and development $ 3,900 $ 2,520 General and administrative 3,910 2,798 $ 7,810 $ 5,318 |
Net Loss Per Share Attributab25
Net Loss Per Share Attributable to Coherus (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Net Loss Per Share Attributable to Coherus | The following table sets forth the computation of the basic and diluted net loss per share attributable to Coherus (in thousands, except share and per share data): Three Months Ended March 31, 2017 2016 Numerator: Net loss attributable to Coherus $ (74,778 ) $ (65,388 ) Denominator: Weighted-average number of shares used in computing net loss per share attributable to Coherus, basic and diluted 48,711,958 39,095,975 Net loss per share attributable to Coherus, basic and diluted $ (1.54 ) $ (1.67 ) |
Outstanding Dilutive Potential Shares Excluded from Calculation of Diluted Net Loss Per Share Attributable to Coherus | The following outstanding dilutive potential shares have been excluded from the calculation of diluted net loss per share attributable to Coherus due to their anti-dilutive effect: Outstanding as of March 31, 2017 2016 Stock options 10,656,082 8,110,487 Restricted stock units 12,000 — Shares issuable upon conversion of Convertible Notes 4,473,871 4,473,871 Total 15,141,953 12,584,358 |
Organization and Operations - A
Organization and Operations - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 2 Months Ended | ||
Jan. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | [1] | |
Organization And Operations [Line Items] | ||||
Accumulated deficit | $ 612,100 | $ 537,322 | ||
Cash and cash equivalents and short-term investments | $ 174,800 | |||
At-the-Market Equity Offering Program | ||||
Organization And Operations [Line Items] | ||||
Common stock, shares issued and sold | 148,827 | 5,294,902 | ||
Share price | $ 28.88 | $ 24.25 | ||
Common stock, net proceeds | $ 4,200 | $ 120,400 | ||
[1] | The consolidated balance sheet as of December 31, 2016 has been derived from the audited consolidated balance sheet included in the Company’s 2016 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 14, 2017. |
Basis of Presentation and Sum27
Basis of Presentation and Summary of Significant Accounting Policies - Additional Information (Details) | 3 Months Ended | |
Mar. 31, 2017USD ($)Segments | Mar. 31, 2016USD ($) | |
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||
Foreign exchange gain (loss) | $ | $ 171,000 | $ (264,000) |
Number of reportable segment | Segments | 1 | |
Number of operating segments | Segments | 1 | |
Accounting Standards Update 2016-09 | ||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||
Deferred tax asset valuation allowance | $ | $ 10,800,000 | |
RUSSIA | Coherus Intermediate Corp, InteKrin Therapeutics, Inc. | ||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||
Controlling interest, ownership percentage by parent | 82.50% |
Basis of Presentation and Sum28
Basis of Presentation and Summary of Significant Accounting Policies - Summary of Revenue by Geographical Region (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Revenues From External Customers And Long Lived Assets [Line Items] | ||
Total revenue | $ 161 | $ 12,359 |
United States | ||
Revenues From External Customers And Long Lived Assets [Line Items] | ||
Total revenue | 12,005 | |
Rest of World | ||
Revenues From External Customers And Long Lived Assets [Line Items] | ||
Total revenue | $ 161 | $ 354 |
Basis of Presentation and Sum29
Basis of Presentation and Summary of Significant Accounting Policies - Summary of Customers Revenue Accounted for 10% or More of Total Revenue (Details) - Collaboration and License Revenue - Customer Concentration Risk | 3 Months Ended | |||
Mar. 31, 2017 | Mar. 31, 2016 | |||
Baxalta | ||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||
Percentage of total revenues by single customer | [1] | 97.00% | ||
Daiichi Sankyo | ||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||
Percentage of total revenues by single customer | 100.00% | [1] | ||
[1] | less than 10% |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) - USD ($) | Feb. 29, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 |
Fair Value Disclosures [Line Items] | ||||
Transfers from Level 1 to Level 3 | $ 0 | $ 0 | ||
Transfers from Level 3 to Level 1 | 0 | $ 0 | ||
Remeasurement of fair-value contingent consideration | 390,000 | $ 190,000 | ||
8.2% Senior Convertible Notes Due 2022 | ||||
Fair Value Disclosures [Line Items] | ||||
Aggregate principal amount | $ 100,000,000 | |||
Convertible notes, interest rate | 8.20% | |||
Debt instrument maturity date | Mar. 31, 2022 | |||
Fair value assumptions, expected volatility rate | 70.00% | |||
Other Expense, Net | ||||
Fair Value Disclosures [Line Items] | ||||
Remeasurement of fair-value contingent consideration | 390,000,000 | $ 190,000,000 | ||
Level 3 | 8.2% Senior Convertible Notes Due 2022 | ||||
Fair Value Disclosures [Line Items] | ||||
Debt instrument fair value | $ 144,000,000 | |||
Level 3 | Long-Term Debt | Straight Debt | ||||
Fair Value Disclosures [Line Items] | ||||
Discount rate | 14.60% | |||
Fair Value Measurements Recurring Basis | Level 3 | Contingent Consideration | ||||
Fair Value Disclosures [Line Items] | ||||
Discount rate | 25.00% | |||
Counterparty credit risk given the cash payment | 8.00% | |||
Increase (decrease) in expected probability of compound transaction payment occurrence | 1.00% | |||
Estimated fair value fluctuation of Compound Transaction Payment | $ 200,000 | |||
Maximum | ||||
Fair Value Disclosures [Line Items] | ||||
Available sale of securities remaining contractual period | 1 year |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Assets and Liabilities Measured on a Recurring Basis (Details) - Fair Value Measurements Recurring Basis - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total financial assets | $ 172,851 | $ 105,085 |
Contingent Consideration | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total financial liabilities | 5,940 | 5,550 |
Money Market Funds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total financial assets | 53,202 | 104,240 |
Restricted Cash (Money Market Funds) | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total financial assets | 845 | 845 |
U.S. Government Agency Securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total financial assets | 25,000 | |
Corporate Notes and Commercial Paper | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total financial assets | 93,804 | |
Level 1 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total financial assets | 79,047 | 105,085 |
Level 1 | Money Market Funds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total financial assets | 53,202 | 104,240 |
Level 1 | Restricted Cash (Money Market Funds) | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total financial assets | 845 | 845 |
Level 1 | U.S. Government Agency Securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total financial assets | 25,000 | |
Level 2 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total financial assets | 93,804 | |
Level 2 | Corporate Notes and Commercial Paper | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total financial assets | 93,804 | |
Level 3 | Contingent Consideration | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total financial liabilities | $ 5,940 | $ 5,550 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Cash Equivalents, Investments in Marketable Securities Classified as Available-for-Sale Securities and Restricted Cash (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Money Market Funds | ||
Schedule of Available-for-sale securities [Line Items] | ||
Cost | $ 53,202 | $ 104,240 |
Estimated Fair Value | 53,202 | 104,240 |
Restricted Cash (Money Market Funds) | ||
Schedule of Available-for-sale securities [Line Items] | ||
Cost | 845 | |
Estimated Fair Value | 845 | |
Cash Equivalents | ||
Schedule of Available-for-sale securities [Line Items] | ||
Cost | 122,109 | 104,240 |
Unrealized Gain | 2 | |
Unrealized (Loss) | (5) | |
Estimated Fair Value | 122,106 | 104,240 |
Cash Equivalents | Corporate Notes and Commercial Paper | ||
Schedule of Available-for-sale securities [Line Items] | ||
Cost | 48,928 | |
Unrealized Gain | 1 | |
Unrealized (Loss) | (5) | |
Estimated Fair Value | 48,924 | |
Cash Equivalents | U.S. Government Agency Securities | ||
Schedule of Available-for-sale securities [Line Items] | ||
Cost | 19,979 | |
Unrealized Gain | 1 | |
Estimated Fair Value | 19,980 | |
Investment in Marketable Securities | ||
Schedule of Available-for-sale securities [Line Items] | ||
Cost | 49,906 | |
Unrealized (Loss) | (6) | |
Estimated Fair Value | 49,900 | |
Investment in Marketable Securities | Corporate Notes and Commercial Paper | ||
Schedule of Available-for-sale securities [Line Items] | ||
Cost | 44,885 | |
Unrealized (Loss) | (5) | |
Estimated Fair Value | 44,880 | |
Investment in Marketable Securities | U.S. Government Agency Securities | ||
Schedule of Available-for-sale securities [Line Items] | ||
Cost | 5,021 | |
Unrealized (Loss) | (1) | |
Estimated Fair Value | 5,020 | |
Restricted Cash | ||
Schedule of Available-for-sale securities [Line Items] | ||
Cost | 845 | 845 |
Estimated Fair Value | 845 | $ 845 |
Restricted Cash | Restricted Cash (Money Market Funds) | ||
Schedule of Available-for-sale securities [Line Items] | ||
Cost | 845 | |
Estimated Fair Value | $ 845 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Changes in the Estimated Fair Value of Contingent Consideration (Details) - Contingent Consideration $ in Thousands | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | |
Beginning balance | $ 5,550 |
Change in fair value of the contingent consideration liability | 390 |
Ending balance | $ 5,940 |
Balance Sheet Components - Sche
Balance Sheet Components - Schedule of Prepaid Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 | |
Schedule Of Prepaid Assets [Line Items] | |||
Prepaid assets | $ 30,484 | $ 31,634 | [1] |
Prepaid Clinical and Other Related Parties | |||
Schedule Of Prepaid Assets [Line Items] | |||
Prepaid assets | 3,450 | 3,714 | |
Prepaid Clinical, Material and Manufacturing | |||
Schedule Of Prepaid Assets [Line Items] | |||
Prepaid assets | 24,377 | 25,095 | |
Prepaid Other | |||
Schedule Of Prepaid Assets [Line Items] | |||
Prepaid assets | $ 2,657 | $ 2,825 | |
[1] | The consolidated balance sheet as of December 31, 2016 has been derived from the audited consolidated balance sheet included in the Company’s 2016 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 14, 2017. |
Balance Sheet Components - Sc35
Balance Sheet Components - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 | |
Property Plant And Equipment [Line Items] | |||
Total property and equipment | $ 21,763 | $ 16,798 | |
Accumulated depreciation and amortization | (6,890) | (6,026) | |
Property and equipment, net | 14,873 | 10,772 | [1] |
Machinery and Equipment | |||
Property Plant And Equipment [Line Items] | |||
Total property and equipment | 10,819 | 10,294 | |
Computer Equipment and Software | |||
Property Plant And Equipment [Line Items] | |||
Total property and equipment | 1,657 | 1,500 | |
Furniture and Fixtures | |||
Property Plant And Equipment [Line Items] | |||
Total property and equipment | 714 | 682 | |
Leasehold Improvements | |||
Property Plant And Equipment [Line Items] | |||
Total property and equipment | 4,344 | $ 4,322 | |
Construction in Progress | |||
Property Plant And Equipment [Line Items] | |||
Total property and equipment | $ 4,229 | ||
[1] | The consolidated balance sheet as of December 31, 2016 has been derived from the audited consolidated balance sheet included in the Company’s 2016 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 14, 2017. |
Balance Sheet Components - Addi
Balance Sheet Components - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Property Plant And Equipment [Abstract] | ||
Depreciation and amortization | $ 865 | $ 717 |
Balance Sheet Components - Sc37
Balance Sheet Components - Schedule of Accrued Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 | |
Payables And Accruals [Abstract] | |||
Accrued clinical - related parties | $ 1,832 | $ 3,542 | |
Accrued clinical and manufacturing | 14,858 | 16,039 | |
Accrued compensation | 3,754 | 6,945 | |
Accrued other | 4,223 | 1,496 | |
Accrued liabilities | $ 24,667 | $ 28,022 | [1] |
[1] | The consolidated balance sheet as of December 31, 2016 has been derived from the audited consolidated balance sheet included in the Company’s 2016 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 14, 2017. |
Collaboration and License Agr38
Collaboration and License Agreements - Schedule of Revenue Related to Collaboration and License Agreements (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||
Collaboration and license revenue | $ 161 | $ 12,359 |
Baxalta License Agreement | ||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||
Collaboration and license revenue | 12,005 | |
Daiichi Sankyo License Agreement | ||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||
Collaboration and license revenue | $ 161 | $ 354 |
Collaboration and License Agr39
Collaboration and License Agreements - Additional Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
Jun. 30, 2015 | Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | Jan. 31, 2012 | ||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||
Advance payments under license agreement | $ 1,070,000 | $ 1,070,000 | [1] | |||
Deferred revenue, current | 669,000 | 892,000 | [1] | |||
Deferred revenue, non-current | 725,000 | 669,000 | [1] | |||
Daiichi Sankyo License Agreement | ||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||
Deferred revenue | 1,400,000 | 1,600,000 | $ 10,000,000 | |||
Minimum percentage of clinical trial cost | 20.00% | |||||
Advance payments under license agreement | 1,100,000 | 1,100,000 | ||||
Reimbursement of past cost incurred and to be incurred | 4,500,000 | |||||
Deferred revenue, current | 700,000 | 900,000 | ||||
Deferred revenue, non-current | 700,000 | $ 700,000 | ||||
Research and development | $ 1,900,000 | $ 1,100,000 | ||||
Baxalta License Agreement | ||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||
Business acquisition date | Jun. 3, 2016 | |||||
Contractual obligations | $ 0 | |||||
[1] | The consolidated balance sheet as of December 31, 2016 has been derived from the audited consolidated balance sheet included in the Company’s 2016 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 14, 2017. |
Convertible Notes - Additional
Convertible Notes - Additional Information (Details) | Feb. 29, 2016USD ($)d$ / sharesshares | Mar. 31, 2017USD ($)$ / shares | Mar. 31, 2016USD ($) |
KKR Member | |||
Debt Instrument [Line Items] | |||
Aggregate principal amount | $ 20,000,000 | ||
MX II Member | |||
Debt Instrument [Line Items] | |||
Aggregate principal amount | 4,000,000 | ||
KMGCP Member | |||
Debt Instrument [Line Items] | |||
Aggregate principal amount | 1,000,000 | ||
HRP III Member | |||
Debt Instrument [Line Items] | |||
Aggregate principal amount | 75,000,000 | ||
8.2% Senior Convertible Notes Due 2022 | |||
Debt Instrument [Line Items] | |||
Aggregate principal amount | $ 100,000,000 | ||
Convertible notes, interest rate | 8.20% | ||
Convertible notes, interest rate description | The Convertible Notes bear interest at a fixed coupon rate of 8.2% per annum payable quarterly in arrears on March 31, June 30, September 30 and December 31 of each year, which commenced on March 31, 2016 | ||
Debt instrument maturity date | Mar. 31, 2022 | ||
Convertible notes, premium percentage | 9.00% | ||
Common shares at conversion | shares | 44.7387 | ||
Conversion price per common share | $ / shares | $ 22.35 | ||
Principal amount of notes converted into shares | $ 1,000 | ||
Percentage of applicable conversion price | 160.00% | ||
Convertible trading days | d | 20 | ||
Convertible consecutive trading days | 30 days | ||
Percentage to pay in cash of the par value of notes | 109.00% | ||
Convertible notes, covenant compliance | As of March 31, 2017, the Company was in full compliance with these covenants and there were no events of default under the Convertible Notes. | ||
Convertible notes, converted amount | $ 94,600,000 | ||
Closing stock, price per share | $ / shares | $ 21.15 | ||
Unamortized debt discount and debt issuance costs on Convertible Notes | $ 8,417,000 | ||
Amortized effective interest rate convertible notes period | 5 years | ||
Convertible notes, effective interest rate | 9.48% | ||
Total interest expense related to accrued interest and amortization of debt discount | $ 2,400,000 | $ 800,000 |
Convertible Notes - Components
Convertible Notes - Components of Convertible Notes (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 | Feb. 29, 2016 | |
Debt Instrument [Line Items] | ||||
Convertible Notes | $ 75,437 | $ 75,192 | [1] | |
Convertible Notes - related parties | 25,146 | 25,064 | [1] | |
8.2% Senior Convertible Notes Due 2022 | ||||
Debt Instrument [Line Items] | ||||
Principal amount of the Convertible Notes | $ 100,000 | |||
Unamortized debt discount and debt issuance costs | (8,417) | |||
Total Convertible Notes | 100,583 | 100,256 | ||
8.2% Senior Convertible Notes Due 2022 | Related Party Debt | ||||
Debt Instrument [Line Items] | ||||
Principal amount of the Convertible Notes | 27,250 | 27,250 | ||
Unamortized debt discount and debt issuance costs | (2,104) | (2,186) | ||
Convertible Notes - related parties | 25,146 | 25,064 | ||
8.2% Senior Convertible Notes Due 2022 | Parent Company | ||||
Debt Instrument [Line Items] | ||||
Principal amount of the Convertible Notes | 81,750 | 81,750 | ||
Unamortized debt discount and debt issuance costs | (6,313) | (6,558) | ||
Convertible Notes | $ 75,437 | $ 75,192 | ||
[1] | The consolidated balance sheet as of December 31, 2016 has been derived from the audited consolidated balance sheet included in the Company’s 2016 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 14, 2017. |
Convertible Notes - Component42
Convertible Notes - Components of Interest Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Debt Instrument [Line Items] | ||
Accretion of debt discount and debt issuance costs | $ 326 | $ 107 |
Interest expense | 593 | 209 |
Total interest expense | 2,376 | 837 |
8.2% Senior Convertible Notes Due 2022 | ||
Debt Instrument [Line Items] | ||
Interest expense | 2,400 | 800 |
Total interest expense | 2,376 | 836 |
8.2% Senior Convertible Notes Due 2022 | Related Party Debt | ||
Debt Instrument [Line Items] | ||
Stated coupon interest | 512 | 182 |
Accretion of debt discount and debt issuance costs | 81 | 27 |
Interest expense | 593 | 209 |
8.2% Senior Convertible Notes Due 2022 | Parent Company | ||
Debt Instrument [Line Items] | ||
Stated coupon interest | 1,538 | 547 |
Accretion of debt discount and debt issuance costs | 245 | 80 |
Interest expense | $ 1,783 | $ 627 |
Convertible Notes - Schedule of
Convertible Notes - Schedule of Future Payments on the Convertible Notes (Details) - 8.2% Senior Convertible Notes Due 2022 $ in Thousands | Mar. 31, 2017USD ($) |
Debt Instrument [Line Items] | |
Remainder of 2017 | $ 6,150 |
2,018 | 8,200 |
2,019 | 8,200 |
2,020 | 8,200 |
2,021 | 8,200 |
2022 and thereafter | 111,050 |
Total minimum payments | 150,000 |
Less amount representing interest | (41,000) |
Convertible Notes, principal amount | 109,000 |
Less debt discount and debt issuance costs on Convertible Notes | (8,417) |
Net carrying amount of Convertible Notes | $ 100,583 |
Common Stock and Stock-Based 44
Common Stock and Stock-Based Compensation - Additional Information (Details) - At-the-Market Equity Offering Program - USD ($) | Oct. 28, 2016 | Jan. 31, 2017 | Mar. 31, 2017 |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Common stock, shares issued and sold | 148,827 | 5,294,902 | |
Issuance price per share of convertible preferred stock | $ 28.88 | $ 24.25 | |
Gross proceeds from issuance of common stock | $ 128,400,000 | ||
Underwriting discounts and commissions | 7,700,000 | ||
Common stock, net proceeds | $ 4,200,000 | 120,400,000 | |
Offering expense | $ 300,000 | ||
Cowen and Company LLC | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Maximum amount of sales that agent may sell in shares of its common stock | $ 100,000,000 | ||
Percentage of gross sales proceeds of common stock payable as compensation | 3.00% | ||
Common stock, shares issued and sold | 148,827 | ||
Issuance price per share of convertible preferred stock | $ 28.88 | ||
Gross proceeds from issuance of common stock | $ 4,300,000 | ||
Underwriting discounts and commissions | 100,000 | ||
Common stock, net proceeds | $ 4,200,000 |
Common Stock and Stock-Based 45
Common Stock and Stock-Based Compensation - Schedule of Stock-Based Compensation Expense Related to Options and Restricted Stock Units (Details) - Employees and Nonemployees Stock Option and Restricted Stock Units - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | $ 7,810 | $ 5,318 |
Research and Development Expense | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | 3,900 | 2,520 |
General and Administrative Expense | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | $ 3,910 | $ 2,798 |
Net Loss Per Share Attributab46
Net Loss Per Share Attributable to Coherus - Computation of Basic and Diluted Net Loss Per Share Attributable to Coherus (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Numerator: | ||
Net loss attributable to Coherus | $ (74,778) | $ (65,388) |
Denominator: | ||
Weighted-average number of shares used in computing net loss per share attributable to Coherus, basic and diluted | 48,711,958 | 39,095,975 |
Net loss per share attributable to Coherus, basic and diluted | $ (1.54) | $ (1.67) |
Net Loss Per Share Attributab47
Net Loss Per Share Attributable to Coherus - Outstanding Dilutive Potential Shares Excluded from Calculation of Diluted Net Loss Per Share Attributable to Coherus (Details) - shares | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from the calculation of diluted net loss per share | 15,141,953 | 12,584,358 |
Stock Options | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from the calculation of diluted net loss per share | 10,656,082 | 8,110,487 |
Shares Issuable Upon Conversion of Convertible Notes | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from the calculation of diluted net loss per share | 4,473,871 | 4,473,871 |
Restricted Stock Units | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from the calculation of diluted net loss per share | 12,000 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) | 3 Months Ended | ||||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | Feb. 29, 2016 | ||
Related Party Transaction [Line Items] | |||||
Prepaid assets | $ 30,484,000 | $ 31,634,000 | [1] | ||
Other assets, current | 2,866,000 | 2,986,000 | [1] | ||
Accounts payable - related parties | 2,109,000 | 877,000 | [1] | ||
Research and development expense | 53,775,000 | $ 65,313,000 | |||
General and administrative expenses from transactions with related party | 65,000 | 0 | |||
Medpace Inc | |||||
Related Party Transaction [Line Items] | |||||
Other assets, current | 2,000,000 | 2,200,000 | |||
Accounts payable - related parties | 2,100,000 | 900,000 | |||
Research and development expense | 3,800,000 | 13,100,000 | |||
Medpace Inc | Prepaid Clinical and Other Related Parties | |||||
Related Party Transaction [Line Items] | |||||
Prepaid assets | 3,500,000 | 3,700,000 | |||
Medpace Inc | Accrued Clinical and Other - Related Parties | |||||
Related Party Transaction [Line Items] | |||||
Accrued and other liabilities | 1,800,000 | 3,500,000 | |||
Board of Directors | Recruiting Services | |||||
Related Party Transaction [Line Items] | |||||
Research and development expense | 0 | 131,000 | |||
Related party balances | 0 | $ 0 | |||
General and administrative expenses from transactions with related party | $ 65,000 | $ 0 | |||
Affiliated Entity | |||||
Related Party Transaction [Line Items] | |||||
Aggregate principal amount | $ 25,000,000 | ||||
[1] | The consolidated balance sheet as of December 31, 2016 has been derived from the audited consolidated balance sheet included in the Company’s 2016 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 14, 2017. |