Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Aug. 04, 2018 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | kdmn | |
Entity Registrant Name | Kadmon Holdings, Inc. | |
Entity Central Index Key | 1,557,142 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 113,101,776 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 131,470 | $ 67,517 |
Accounts receivable, net | 534 | 325 |
Accounts receivable from affiliates | 861 | |
Inventories, net | 665 | 201 |
Prepaid expenses and other current assets | 1,613 | 1,109 |
Total current assets | 134,282 | 70,013 |
Fixed assets, net | 4,233 | 4,292 |
Goodwill | 3,580 | 3,580 |
Restricted cash | 2,116 | 2,116 |
Investment, equity securities | 40,508 | |
Investment, at cost | 2,300 | 3,542 |
Other noncurrent assets | 4 | 9 |
Total assets | 187,023 | 83,552 |
Current liabilities: | ||
Accounts payable | 6,031 | 8,008 |
Accrued expenses | 7,975 | 8,577 |
Deferred revenue | 4,400 | |
Fair market value of financial instruments | 1,334 | 1,952 |
Secured term debt - current | 28,046 | 33,707 |
Total current liabilities | 43,386 | 56,644 |
Deferred revenue | 19,617 | |
Deferred rent | 4,344 | 4,347 |
Deferred tax liability | 377 | 939 |
Other long term liabilities | 68 | 247 |
Total liabilities | 48,175 | 81,794 |
Commitments and contingencies (Note 14 and 15) | ||
Stockholders’ equity: | ||
Convertible Preferred Stock, $0.001 par value; 10,000,000 shares authorized at June 30, 2018 and December 31, 2017; 30,000 shares issued and outstanding at June 30, 2018 and December 31, 2017 | 41,201 | 40,220 |
Common Stock, $0.001 par value; 200,000,000 shares authorized at June 30, 2018 and December 31, 2017; 113,101,776 and 78,643,954 shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively | 113 | 79 |
Additional paid-in capital | 310,831 | 198,856 |
Accumulated deficit | (213,297) | (237,397) |
Total stockholders’ equity | 138,848 | 1,758 |
Total liabilities and stockholders’ equity | $ 187,023 | $ 83,552 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2018 | Dec. 31, 2017 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 113,101,776 | 78,643,954 |
Common stock, shares outstanding | 113,101,776 | 78,643,954 |
Convertible Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 30,000 | 30,000 |
Preferred stock, shares outstanding | 30,000 | 30,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenues | ||||
Total revenue | $ 359,000 | $ 2,957,000 | $ 792,000 | $ 8,523,000 |
Cost of sales | 103,000 | 266,000 | 302,000 | 833,000 |
Write-down of inventory | 98,000 | 373,000 | 245,000 | 743,000 |
Gross profit | 158,000 | 2,318,000 | 245,000 | 6,947,000 |
Operating expenses: | ||||
Research and development | 10,178,000 | 10,056,000 | 19,958,000 | 18,503,000 |
Selling, general and administrative | 8,812,000 | 9,902,000 | 17,062,000 | 20,020,000 |
Total operating expenses | 18,990,000 | 19,958,000 | 37,020,000 | 38,523,000 |
Loss from operations | (18,832,000) | (17,640,000) | (36,775,000) | (31,576,000) |
Other expense (income) : | ||||
Interest income | (139,000) | (21,000) | (208,000) | (33,000) |
Interest expense | 1,338,000 | 1,430,000 | 2,803,000 | 3,030,000 |
Change in fair value of financial instruments | (463,000) | 180,000 | (604,000) | (726,000) |
Loss on equity method investment | 3,095,000 | 1,242,000 | 5,729,000 | |
Unrealized gain on equity securities | (40,508,000) | (40,508,000) | ||
Other income | (3,000) | (10,000) | (2,000) | (11,000) |
Total other expense (income) | (39,775,000) | 4,674,000 | (37,277,000) | 7,989,000 |
Income (loss) before income tax | 20,943,000 | (22,314,000) | 502,000 | (39,565,000) |
Income tax expense (benefit) | (562,000) | (562,000) | 316,000 | |
Net income (loss) | 21,505,000 | (22,314,000) | 1,064,000 | (39,881,000) |
Deemed dividend on convertible preferred stock | 491,000 | 469,000 | 981,000 | 938,000 |
Net income (loss) attributable to common stockholders | $ 21,014,000 | $ (22,783,000) | $ 83,000 | $ (40,819,000) |
Basic net income (loss) per share of common stock | $ 0.25 | $ (0.44) | $ 0 | $ (0.83) |
Diluted net income (loss) per share of common stock | $ 0.24 | $ (0.44) | $ 0 | $ (0.83) |
Weighted average basic shares of common stock outstanding | 85,004,107 | 51,846,521 | 81,844,677 | 49,191,727 |
Weighted average diluted shares of common stock outstanding | 90,164,248 | 51,846,521 | 82,216,399 | 49,191,727 |
License and Other Revenue [Member] | ||||
Revenues | ||||
Total revenue | $ 198,000 | $ 1,259,000 | $ 357,000 | $ 4,489,000 |
Net Sales [Member] | ||||
Revenues | ||||
Total revenue | $ 161,000 | $ 1,698,000 | $ 435,000 | $ 4,034,000 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - 6 months ended Jun. 30, 2018 - USD ($) $ in Thousands | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2017 | $ 40,220 | $ 79 | $ 198,856 | $ (237,397) | $ 1,758 |
Balance, Shares at Dec. 31, 2017 | 30,000 | 78,643,954 | |||
Share-based compensation expense | 5,595 | 5,595 | |||
Common stock issued in public offering, net | $ 34 | 105,727 | 105,761 | ||
Common stock issued in public offering, net, shares | 34,303,030 | ||||
Common stock issued for warrant exercises | 588 | 588 | |||
Common stock issued for warrant exercises, shares | 131,834 | ||||
Common stock issued under ESPP plan | 65 | 65 | |||
Common stock issued under ESPP plan, shares | 22,958 | ||||
Cumulative effect of change in accounting principle - ASC 606 adoption at Dec. 31, 2017 | 24,017 | 24,017 | |||
Beneficial conversion feature on convertible preferred stock | $ 196 | (196) | 196 | ||
Accretion of dividends on convertible preferred stock | 785 | (785) | 785 | ||
Net income | 1,064 | 1,064 | |||
Balance at Jun. 30, 2018 | $ 41,201 | $ 113 | $ 310,831 | $ (213,297) | $ 138,848 |
Balance, Shares at Jun. 30, 2018 | 30,000 | 113,101,776 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 1,064,000 | $ (39,881,000) |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||
Depreciation and amortization of fixed assets | 702,000 | 927,000 |
Write-down of inventory | 245,000 | 743,000 |
Amortization of deferred financing costs | 228,000 | 255,000 |
Amortization of debt discount | 1,030,000 | 1,146,000 |
Amortization of debt premium | (345,000) | (188,000) |
Share-based compensation | 5,595,000 | 7,580,000 |
Change in fair value of financial instruments | (604,000) | (726,000) |
Loss on equity method investment | 1,242,000 | 5,729,000 |
Unrealized gain on equity securities | (40,508,000) | |
Deferred tax liability | (562,000) | |
Bad debt expense | 3,000 | |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | 649,000 | (402,000) |
Inventories, net | (709,000) | 69,000 |
Prepaid expenses and other assets | (499,000) | (1,171,000) |
Accounts payable | (2,092,000) | (936,000) |
Accrued expenses, other liabilities and deferred rent | (784,000) | (2,577,000) |
Deferred revenue | (2,200,000) | |
Net cash used in operating activities | (35,345,000) | (31,632,000) |
Cash flows from investing activities: | ||
Purchases of fixed assets | (528,000) | (309,000) |
Net cash used in investing activities | (528,000) | (309,000) |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock and warrants, net | 105,761,000 | 22,094,000 |
Payment of financing costs | (20,000) | |
Principal payments on secured term debt | (6,574,000) | |
Proceeds from issuance of ESPP shares | 65,000 | |
Proceeds from exercise of warrants | 574,000 | |
Net cash provided by financing activities | 99,826,000 | 22,074,000 |
Net increase (decrease) in cash, cash equivalents and restricted cash | 63,953,000 | (9,867,000) |
Cash, cash equivalents and restricted cash, beginning of period | 69,633,000 | 38,209,000 |
Cash, cash equivalents and restricted cash, end of period | 133,586,000 | 28,342,000 |
Components of cash, cash equivalents, and restricted cash | ||
Total cash, cash equivalents, and restricted cash | 69,633,000 | 38,209,000 |
Supplemental cash flow disclosures: | ||
Cash paid for interest | 1,899,000 | 1,826,000 |
Cash paid for taxes | 348,000 | |
Non-cash investing and financing activities: | ||
Fair value of warrants issued in private placement | 1,651,000 | |
Fair value of modification to lender warrants | 908,000 | |
Capitalized lease obligations | 208,000 | |
Unpaid financing/offering costs | 1,227,000 | |
Unpaid fixed asset purchases | 115,000 | 75,000 |
Beneficial conversion feature on convertible preferred stock | 196,000 | 188,000 |
Accretion of dividends on convertible preferred stock | 785,000 | $ 750,000 |
Cumulative effect of change in accounting principle - ASC 606 adoption | $ 24,017,000 |
Organization
Organization | 6 Months Ended |
Jun. 30, 2018 | |
Organization [Abstract] | |
Organization | 1. Organization Nature of Business Kadmon Holdings, Inc. (together with its subsidiaries, “Kadmon” or “Company”) is a fully integrated biopharmaceutical company engaged in the discovery, development and commercialization of small molecules and biologics to address disease areas of significant unmet medical needs, with a near-term clinical focus on inflammatory and fibrotic diseases. The Company leverages its multi ‑disciplinary research and clinical development team to identify and pursue a diverse portfolio of novel product candidates, both through in-licensing products and employing its small molecule and biologics platforms. By retaining global commercial rights to its lead product candidates, the Company believes that it has the ability to develop these candidates while maintaining flexibility for commercial and licensing arrangements. The Company expects to continue to progress its clinical candidates and have further clinical trial data to report in the second half of 2018. Liquidity The Company had an accumulated deficit of $213.3 million and working capital of $90.9 million at June 30, 2018 . The Company maintained cash and cash equivalents of $131.5 million at June 30, 2018 . In June 2018, the Company raised $113.2 million ( $105.8 million net of $7.4 million of underwriting discounts and other offering expenses payable by the Company) from the issuance of 34,303,030 shares of common stock at a price of $3.30 per share (“2018 Public Offering”). The Company’s existing cash and cash equivalents is expected to enable it to advance its planned Phase 2 clinical studies for KD025 and tesevatinib, advance certain of its other pipeline product candidates and provide for other working capital purposes . The Company believes its cash and cash equivalents balance at June 30, 2018 , when considered with its forecasted cash expenditures, alleviates the substantial doubt about its ability to continue as a going concern . On June 12, 2018, the Company entered into the fourth amendment to the 2015 Credit Agreement (the “Fourth Amendment”). Pursuant to the Fourth Amendment, the maturity date of the 2015 Credit Agreement was extended to August 31, 2018 (the “Extension Period”). The Company repaid $4.7 million of the outstanding principal on June 18, 2018, representing all amounts due under the 2015 Credit Agreement to GoldenTree Credit Opportunities, LP, GoldenTree Credit Opportunities, Ltd, GoldenTree Insurance Fund Series Interests of the SALI Multi-Series Fund, LP, GT NM, LP, an d San Berndino County Employees’ Retirement Association. All other material terms of the 2015 Credit Agreement remain the same during the Extension Period, including a minimum liquidity covenant . No assurances can be given that the Company will be able to comply with these covenants or that the Company will be able to amend the 2015 Credit Agreement to further extend the maturity date or refinance this debt on or before the maturity date. The Company has not established a source of revenue sufficient to cover its operating costs, and as such, has been dependent on funding operations through the issuance of debt and sale of equity securities. The Company expects to incur further losses over the next several years as it develops its business. The Company anticipates that it will need additional capital to fund its continued operations and remain in compliance with its debt covenants. T he Company has no commitments for any additional financing, and there can be no assurance that, if needed, additional capital will be available to the Company on commercially acceptable terms or at all. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2018 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2 . Summary of Significant Accounting Policies Basis of Presentation The Company operates in one segment considering the nature of the Company’s products and services, class of customers, methods used to distribute the products and the regulatory environment in which the Company operates. Principles of Consolidation The accompanying consolidated financial statements have been prepare d in conformity with accounting principles generally accepted in the United States of America (“GAAP”) . The consolidated financial statements include the accounts of Kadmon Holdings, Inc. and its domestic and international subsidiaries, all of which are wholly owned. Interim Financial Statements The accompanying financial statements have been prepared in accordance with GAAP for interim financial information and with the instructions to F orm 10 - Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In management’s opinion , the financial statements include all adjustments (consisting of normal recurring accruals) necessary in order to make the financial statements not misleading. Operating results for the three and six months ended June 30, 2018 are not necessarily indicative of the final results that may be expected for the year ended December 31, 201 8 . These unaudited financial statements should be read in conjunction with the audited financial statements in Item 15 of the Company’s Annual Report on Form 10-K for the year ended December 31, 201 7 . Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements. Actual results could differ from those estimates . Critical accounting policies The Company’s significant accounting policies are disclosed in the audited financial statements included in Item 8 of the Annual Report on Form 10-K as of and for the year ended December 31, 2017. Since the date of such financial statements, there have been no changes to the Company’s significant accounting policies, other than those described below. Investment in Equity Securities Equity securities consist of investments in common stock of companies traded on public markets (Note 10). These shares are carried on the Company’s balance sheet at fair value based on the closing price of the shares owned on the last trading day before the balance sheet of this report. Fluctutations in the underlying bid price of the shares result in unrealized gains or losses. In accordance with FASB ASC 321, Investments – Equity Securities (“ASC 321”), the Company recognizes these fluctuations in value as other expense (income). For investments sold, the Company recognizes the gains and losses attributable to these investments as realized gains or losses in other expense (income). Revenue Recognition The Company adopted FASB ASC 606, Revenue from Contracts with Customers ( “ ASC 606 ” ), on January 1, 2018 using the modified retrospective method for all contracts not completed as of the date of adoption – i.e. , by recognizing the cumulative effect of initially applying ASC 606 as an adjustment to the opening balance of stockholders ’ equity at January 1, 2018. For contracts that were modified before the effective date, the Company reflected the aggregate effect of all modifications when identifying performance obligations and allocating transaction price in accordance with practical expedient ASC 606-10-65-1-(f)-4. The reported results for 2018 reflect the application of ASC 606 guidance while the reported results for 2017 were prepared under the guidance of ASC 605, Revenue Recognition ( “ ASC 605 ” ), which is also referred to herein as the "previous guidance". The adoption of ASC 606 represents a change in accounting principle that will more closely align revenue recognition with the delivery of the Company's services and will provide financial statement readers with enhanced disclosures. Therefore, the comparative information prior to January 1, 2018 has not been adjusted and continues to be reported under ASC 605. The details of significant changes and quantitative impact of the changes are set out below. The Company recognizes revenue in accordance with ASC 606, the core principle of which is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to receive in exchange for those goods or services. To achieve this core principle, five basic criteria must be met before revenue can be recognized: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to performance obligations in the contract; and (5) recognize revenue when or as the Company satisfies a performance obligation. Disaggregation of Revenue The following table summarizes revenue from contracts with customers for the three and six months ended June 30, 2018 : Three Months Ended Six Months Ended June 30, 2018 June 30, 2018 Product sales $ 161 $ 435 Other revenue 198 357 Total revenue $ 359 $ 792 Product Sales The Company markets a portfolio of branded and generic ribavirin products used as part of a combination treatment for chronic HCV infection (Ribasphere RibaPak and Ribasphere) and also distributes products in a variety of other therapeutic areas, including tetrabenazine for the treatment of chorea associated with Huntington’s disease. These contracts typically include a single promise to deliver a fixed amount of product to the customer with payment due within 30 days of shipment. Revenues are recognized when control of the promised goods is transferred to the customer, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods. As is typical in the pharmaceutical industry, gross product sales are subject to a variety of deductions, primarily representing rebates, chargebacks, returns, and discounts to government agencies, wholesalers, and managed care organizations. These deductions represent management’s best estimates of the related reserves and, as such, judgment is required when estimating the impact of these sales deductions on gross sales for a reporting period. If estimates are not representative of the actual future settlement, results could be materially affected. Other Revenue The other revenue generated by the Company is primarily related to the transition services agreement with MeiraGTx Holdings plc (“MeiraGTx”) (Note 10) . The Company performed various professional services under this agreement that support MeiraGTx. The Company recognizes revenue related to transition services as they are performed. Contract Balances The timing of revenue recognition may differ from the timing of invoicing to customers. Accounts receivable are recorded at the invoiced amount, net of an allowance for doubtful accounts. A receivable is recognized in the period we deliver goods or provide services or when our right to consideration is unconditional. The Company has not recognized any assets for costs to obtain or fulfill a contract with a customer as of June 30, 2018 . Financial Statement Impact of Adopting ASC 606 The Company adopted ASC 606 using the modified retrospective method. The cumulative effect of applying the new guidance to all contracts with customers that were not completed as of January 1, 2018 was recorded as an adjustment to accumulated deficit as of the adoption date as follows: As Reported Adjustments Adjusted (in thousands) December 31, AbbVie January 1, 2017 Agreement 2018 (unaudited) (unaudited) Cash, cash equivalents, and restricted cash $ 69,633 $ $ 69,633 Accounts receivable, net 1,186 1,186 Inventories, net 201 201 Prepaid expenses and other current assets 1,109 1,109 Fixed assets, net 4,292 4,292 Goodwill 3,580 3,580 Investments at cost 3,542 3,542 Other noncurrent assets 9 9 Total assets $ 83,552 $ $ 83,552 Accounts payable and accrued expenses $ 16,585 $ $ 16,585 Fair market value of financial instruments - current 1,952 1,952 Secured term debt - current 33,707 33,707 Deferred revenue, current 4,400 (4,400) — Deferred revenue, long term 19,617 (19,617) — Other long term liabilities 5,533 5,533 Total liabilities 81,794 (24,017) 57,777 Common stock, preferred stock, and additional paid-in capital 239,155 239,155 Accumulated deficit (237,397) 24,017 (213,380) Total stockholders’ equity 1,758 24,017 25,775 Total liabilities and stockholders’ equity $ 83,552 $ — $ 83,552 The year-end condensed balance sheet data was derived from audited consolidated financial statements, but does not include all disclosures required by GAAP. Commercial Partnership Agreement with AbbVie Inc. (“Abbvie”) On June 17, 2013, the Company entered int o a series of agreements with AbbVie related to certain of the Company’s ribavirin products. Pursuant to an asset purchase agreement, as amended, we sold marketing authorizations and related assets for ribavirin in certain countries outside the United States. The Company received upfront payments totaling $64.0 million, and could have received additional contingent payments totaling $51.0 million based on the achievement of certain milestones. The Company did not earn any such milestones during the six months ended June 30, 2018 . Of the $64.0 million upfront payments, $44.0 million was considered allocable to the domestic licensing arrangement and was recorded as deferred revenue to be recognized over the 10 year term of the agreement. The Company recognized $1.1 million and $2.2 million during the three and six months ended June 30, 2017 , respectively. At June 30, 2018 and December 31, 2017, $0.0 and $24.0 million is recorded as deferred revenue, respectively, of which $4.4 million was short ‑term at December 31, 2017. The Company is required to supply ribavirin products, maintain the marketing authorization for certain ribavirin products and maintain the intellectual property for Ribasphere and RibaPak through the term of the agreements ending December 31, 2020. The Company’s agreements with AbbVie provide AbbVie with access to various forms of in tellectual property, as well as supply of product. Under the previous guidance, certain of the upfront payments under the agreements was considered allocable to a 10-year domestic license arrangement and, as a result, the associated revenue was previously deferred and recognized straight line over the life of the agreements. Under ASC 606, the Company has determined that two distinct performance obligations under the domestic license agreement exist, both of which are considered to be completed as of the date of adoption. No other material rights or enforceable rights or obligations exist under the AbbVie agreements. In conjunction with the January 1, 2018 adoption of ASC 606, the Company adjusted its accumulated deficit by $24.0 million, reflecting the recognition of $24.0 million of deferred revenue related to the domestic license agreement with AbbVie. Income Taxes The adoption of ASC 606 primarily resulted in an acceleration of revenue as of January 1, 2018, which in turn generated additional deferred tax liabilities that ultimately reduced the Company's net deferred tax asset position. As the Company fully reserves its net deferred tax assets in the jurisdictions impacted by the adoption of ASC 606, this impact was offset by a corresponding reduction to the valuation allowance. Impact of New Revenue Guidance on Financial Statement Line Items The following table compares the reported condensed consolidated balance sheet as of June 30, 2018 to the pro-forma amounts had the previous guidance been in effect (in thousands): As Reported Balances without adoption of ASC 606 June 30, 2018 Adjustments June 30, 2018 December 31, 2017 (unaudited) (unaudited) (unaudited) Cash, cash equivalents, and restricted cash $ 133,586 $ $ 133,586 $ 69,633 Accounts receivable, net 534 534 1,186 Inventories, net 665 665 201 Investment, equity securities 40,508 40,508 — Prepaid expenses and other current assets 1,613 1,613 1,109 Fixed assets, net 4,233 4,233 4,292 Goodwill 3,580 3,580 3,580 Investment, at cost 2,300 2,300 3,542 Other noncurrent assets 4 4 9 Total assets $ 187,023 $ — $ 187,023 $ 83,552 Accounts payable and accrued expenses $ 14,006 $ $ 14,006 $ 16,585 Fair market value of financial instruments - current 1,334 1,334 1,952 Secured term debt - current 28,046 28,046 33,707 Deferred revenue, current — 4,400 4,400 4,400 Deferred revenue, long term — 17,417 17,417 19,617 Other long term liabilities 4,789 4,789 5,533 Total liabilities 48,175 21,817 69,992 81,794 Common stock, preferred stock, and additional paid-in capital 352,145 352,145 239,155 Accumulated deficit (213,297) (21,817) (235,114) (237,397) Total stockholders’ equity (deficit) 138,848 (21,817) 117,031 1,758 Total liabilities and stockholders’ equity $ 187,023 $ — $ 187,023 $ 83,552 The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. Total reported liabilities were $21.8 million less than the pro-forma balance sheet, which assumes the Company had continued to recognize revenues under ASC 605 as of June 30, 2018 . This is due to the recognition of the deferred revenue related to the AbbVie agreement upon adoption of ASC 606. The following summarizes the significant changes on the Company’s condensed consolidated statement of operations for the three months ended June 30, 2018 as a result of the adoption of ASC 606 on January 1, 2018, which assumes the Company had continued to recognize revenues under ASC 605 (in thousands): As Reported Three Months Ended Balances without adoption of ASC 606 Three Months Ended June 30, 2018 Adjustments June 30, 2018 June 30, 2017 (unaudited) (unaudited) (unaudited) (unaudited) Net sales $ 161 $ $ 161 $ 1,698 License and other revenue 198 1,100 1,298 1,259 Total revenue 359 1,100 1,459 2,957 Cost of sales and write-down of inventory 201 201 639 Research and development 10,178 10,178 10,056 Selling, general and administrative 8,812 8,812 9,902 Total other expense (income) (39,775) (39,775) 4,674 Income tax benefit (562) (562) — Net income (loss) attributable to common stockholders $ 21,505 $ 1,100 $ 22,605 $ (22,314) Deemed dividend on convertible preferred stock 491 491 469 Net income (loss) attributable to common stockholders $ 21,014 $ 1,100 $ 22,114 $ (22,783) Basic net income (loss) per share of common stock $ 0.25 $ 0.01 $ 0.26 $ (0.44) Diluted net income (loss) per share of common stock $ 0.24 $ 0.01 $ 0.25 $ (0.44) Weighted average basic shares of common stock outstanding 85,004,107 85,004,107 85,004,107 51,846,521 Weighted average diluted shares of common stock outstanding 90,164,248 90,164,248 90,164,248 51,846,521 The following summarizes the significant changes on the Company’s condensed consolidated statement of operations for the six months ended June 30, 2018 as a result of the adoption of ASC 606 on January 1, 2018, which assumes the Company had continued to recognize revenues under ASC 605 (in thousands): As Reported Six Months Ended Balances without adoption of ASC 606 Six Months Ended June 30, 2018 Adjustments June 30, 2018 June 30, 2017 (unaudited) (unaudited) (unaudited) (unaudited) Net sales $ 435 $ $ 435 $ 4,034 License and other revenue 357 2,200 2,557 4,489 Total revenue 792 2,200 2,992 8,523 Cost of sales and write-down of inventory 547 547 1,576 Research and development 19,958 19,958 18,503 Selling, general and administrative 17,062 17,062 20,020 Total other expense (income) (37,277) (37,277) 7,989 Income tax expense (benefit) (562) (562) 316 Net income (loss) attributable to common stockholders $ 1,064 $ 2,200 $ 3,264 $ (39,881) Deemed dividend on convertible preferred stock 981 981 938 Net income (loss) attributable to common stockholders $ 83 $ 2,200 $ 2,283 $ (40,819) Basic net income (loss) per share of common stock $ 0.00 $ 0.03 $ 0.03 $ (0.83) Diluted net income (loss) per share of common stock $ 0.00 $ 0.03 $ 0.03 $ (0.83) Weighted average basic shares of common stock outstanding 81,844,677 81,844,677 81,844,677 49,191,727 Weighted average diluted shares of common stock outstanding 82,216,399 82,216,399 82,216,399 49,191,727 The Company’s adoption of ASC 606 accelerated the recognition of revenue that was previously deferred under the AbbVie domestic license agreement, resulting in a cumulative effect adjustment to accumulated deficit on January 1, 2018. Therefore no further revenue will be recognized under the AbbVie domestic license agreement. Revenue under this agreement had previously been recognized under license and other revenue. The adoption of ASC 606 had no impact on the Company’s cash flows from operations. The aforementioned adjustments resulted in offsetting shifts in cash flows to net income ( loss ) and change in deferred revenue. Transaction Price Allocated to Future Performance Obligations ASC 606 requires that the Company disclose the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied as of June 30, 2018 . The guidance provides certain practical expedients that limit this requirement. The Company has various contracts that meet the following practical expedients provided by ASC 606: 1. The performance obligation is part of a contract that has an original expected duration of one year or less. 2. Revenue is recognized from the satisfaction of the performance obligations in the amount billable to the customer. 3. The variable consideration is allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied promise to transfer a distinct good or service that forms part of a single performance obligation. The Company does not have any performance obligations, outside of the practical expedients above, that have not yet been satisfied as of June 30, 2018 and therefore there is no transaction price allocated to future performance obligations under ASC 606. Recent Accounting Pronouncements In June 2018 , the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 201 8-07 , Compensation – Stock Compensation , which expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees, except for specific exceptions. This ASU is effective for annual or any interim periods beginning after December 15, 201 8 . The Company does not expect the standard to have a significant impact on its consolidated financial statements, as the fair value of the Company’s awards to nonemployees is immaterial . In May 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-09, Compensation – Stock Compensation , which clarifies the guidance about which changes to the terms and conditions of a share-based payments award require an entity to apply modific ation accounting in Topic 718. This ASU is effective for annual or any interim periods beginning after December 15, 2017. The Company adopted this standard on January 1, 2018, which did not impact the consolidated financial statements as the fair value of the Company’s modified awards is immaterial . In January 2017, the FASB issued ASU No. 2017-04, Intangibles – Goodwill and Other (“ASU 2017-04”), which simplifies the subsequent measurement of goodwill by eliminating “Step 2” from the goodwill impairment test. Instead of performing Step 2 to determine the amount of an impairment charge, the fair value of a reporting unit will be compared with its carrying amount and an impairment charge will be recognized for the value by which the carrying amount exceeds the reporting unit’s fair value. ASU 2017-04 is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company does not expect the standard to have a significant impact on its consolidated financial statements . In November 2016, the FASB issued ASU No. 2016-18, “ Statement of Cash Flows (Topic 230): Restricted Cash ”. This ASU requires that the statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Entities will also be required to reconcile such total amounts on the balance sheet and disclose the nature of the restrictions. The Company adopted this standard on January 1, 2018, which did not have a significant impact on its consolidated financial statements as the Company’s restricted cash balances are immaterial. In February 2016, the FASB issued ASU No. 2016 ‑02, “ Leases ”. This ASU amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets. Current GAAP does not require lessees to recognize assets and liabilities arising from operating leases on the balance sheet. This guidance is effective for annual and interim reporting periods of public entities beginning after December 15, 2018, with early adoption permitted. The Company is in the early stages of implementation and expects to adopt this guidance when it becomes effective. The Company expects that adoption of this standard will have a material impact on the Company’s consolidated financial statements, primarily to the consolidated balance sheets and related disclosures, as a result of recognizing right-of-use assets and lease liabilities arising from its operating leases . |
Stockholders_ Equity
Stockholders’ Equity | 6 Months Ended |
Jun. 30, 2018 | |
Stockholders’ Equity [Abstract] | |
Stockholders’ Equity | 3 . Stockholders’ Equity 5% Convertible Preferred Stock The Company had 30,000 shares of 5% convertible preferred stock outstanding at June 30, 2018 , which converts into shares of the Company’s common stock at a 20% discount to the price per share of common stock in the Company’s initial public offering (“IPO”) of $12.00 per share. T he Company accrued dividends on the 5% convertible preferred stock of $0.4 million and $0.8 million for each the three and six months ended June 30, 2018 and 2017 . T he Company calculated a deemed dividend of $0.1 million on the $0.4 million of accrued dividends during each of the three months ended June 30, 2018 and 2017 , and $0.2 million on the $0.8 million of accrued dividends during each of the six months ended June 30, 2018 and 2017 , which is a beneficial conversion feature. Approxima tely $1.6 million and $1.4 million of accrued dividends that were payable on June 30, 201 8 and June 30, 2017, respectively, were added to the stated liquidation preference amount of the 5% convertible preferred stock on those respective dates. The stated liquidation preference amount on the 5% convertible preferred stock totaled $33.0 million at June 30, 2018 . Common Stock The Company’s certificate of incorporation authorizes the issuance of up to 200,000,000 shares of the Company’s common stock, par value $0.001 per share. |
Net Income (Loss) per Share Att
Net Income (Loss) per Share Attributable to Common Stockholders | 6 Months Ended |
Jun. 30, 2018 | |
Net Income (Loss) per Share Attributable to Common Stockholders [Abstract] | |
Net Income (Loss) per Share Attributable to Common Stockholders | 4 . Net Income ( Loss ) per Share Attributable to Common Stockholders Basic net income ( loss ) attributable to common stockholders per share is computed by dividing the net income ( loss ) attributable to common stockholders by the weighted-average number of common shares outstanding for the period. Shares issued during the period are weighted for the portion of the period that they were outstanding. Because the Company has reported a net loss for the three and six months ended June 30, 2017 , diluted net loss per common share is the same as basic net loss per common share for those periods. For the three and six months ended June 30, 2018, diluted net income per share is calculated in a manner consistent with that of basic net income per share while giving effect to all potentially dilutive common shares that were outstanding during the period. The following table summarizes the computation of basic and diluted net income ( loss ) per share attributable to common stockholders of the Company (in thousands, except share and per share amounts) : Three Months Ended Six Months Ended June 30, June 30, 2018 2017 2018 2017 Numerator – basic and diluted: Net income (loss) available to common stockholders - basic $ 21,014 $ (22,783) $ 83 $ (40,819) Effect of Dilution: Warrants to purchase common stock (179) — — — Convertible preferred stock 491 — — — Net income (loss) available to common stockholders - diluted $ 21,326 $ (22,783) $ 83 $ (40,819) Denominator – basic and diluted: Weighted average common shares outstanding used to compute basic net income (loss) per share 85,004,107 51,846,521 81,844,677 49,191,727 Effect of Dilution: Options to purchase common stock 152,400 — 257,297 — Stock appreciation rights 69,333 — 114,425 Warrants to purchase common stock 1,504,941 — — — Convertible preferred stock 3,433,467 — — — Weighted average common shares outstanding used to compute diluted net income (loss) per share 90,164,248 51,846,521 82,216,399 49,191,727 Net income (loss) per share, basic $ 0.25 $ (0.44) $ 0.00 $ (0.83) Net income (loss) per share, diluted $ 0.24 $ (0.44) $ 0.00 $ (0.83) The amounts in the table below were excluded from the calculation of diluted net income ( loss ) per share, due to their anti-dilutive effect: Three Months Ended Six Months Ended June 30, June 30, 2018 2017 2018 2017 Options to purchase common stock 7,395,342 6,256,941 5,795,842 6,256,941 Warrants to purchase common stock 1,328,452 4,035,590 11,999,852 4,035,590 Convertible preferred stock — 3,269,968 3,433,467 3,269,968 Total shares of common stock equivalents 8,723,794 13,562,499 21,229,161 13,562,499 |
Debt
Debt | 6 Months Ended |
Jun. 30, 2018 | |
Debt [Abstract] | |
Debt | 5 . Debt The Company is a party to one credit agreement in the following amount (in thousands): June 30, December 31, 2018 2017 Secured term debt due August 31, 2018 $ 28,046 $ 34,620 Total debt before fees, interest and debt discount/premium 28,046 34,620 Less: Deferred financing costs — (228) Debt discount — (1,030) Add: Debt premium — 345 Total debt payable $ 28,046 $ 33,707 Debt payable, current portion $ 28,046 $ 33,707 Secured Term Debt August 2015 Secured Term Debt In August 2015, the Company entered into a secured term loan in the amount of $35.0 million with two lenders (“2015 Credit Agreement”). The interest rate on the loan is LIBOR plus 9.375% with a 1% floor. The Company incurred and paid a $788,000 commitment fee in connection with the loan that will be amortized to interest expense over the term of the agreement. The basic terms of the loan require monthly payments of interest only , through the first anniversary date of the loan , and require the Company to maintain certain financial covenants requiring the Company to maintain a minimum liquidity amount and minimum revenue levels beginning after June 30, 2016 through August 1, 2016, the date the Company consummated its IPO . Beginning on the first anniversary date of the loan, the Company was required to make monthly principal payments in the amount of $380,000 . Any outstanding balance of the loan and accrued inte rest was to be repaid on June 17, 2018 . The secured term loan is collateralized by a first priority perfected security interest in all the tangible and intangible property of the Company . In conjunction with the 2015 Credit Agreement, warrants to purchase $6.3 million of Class A units were issued to two lenders, of which $5.4 million was recorded as a debt discount and $900,000 was recorded as loss on extinguishment of debt (Note 6). The debt discount is being amortized over the life of the outstanding term loan using the effective interest method. Deferred financing costs of $1.3 million were recognized in recording the 2015 Credit Agreement and will be amortized to interest expense over the three year term of the agreement. There were no unamortized deferred financing costs at June 30, 2018 . Unamortized deferred financing costs $0.2 million at December 31, 2017 . Approximately $0.1 million and $0.2 million was charged to interest expense during the three and six months ended June 30, 2018 and a pproximately $0. 2 million and $0. 3 million was charged to interest expense during the three and six months ended June 30, 2017 . The Company entered into a third waiver agreement to the 2015 Credit Agreement in September 2016 to negotiate the amendment and restatement of certain covenants of the Company contained in the 2015 Credit Agreement. In connection with such negotiation, the lenders under the 2015 Credit Agreement had agreed to refrain from exercising certain rights under the 2015 Credit Agreement, including the declaration of a default and to forbear from acceleration of any repayment rights with respect to existing covenants until the parties have consummated the amendment and restatement of such provisions. In addition, certain payments required to be made under the 2015 Credit Agreement had been deferred while the parties negotiated the amendment. The parties executed a second amendment to the 2015 Credit Agreement in November 2016 whereby the Company deferred further principal payments owed under the 2015 Credit Agreement in the amount of $380,000 per month until August 31, 2017. Additionally, the parties amended various clinical development milestones and added a covenant pursuant to which the Company was required to raise $40.0 million of additional equity capital by the end of the second quarter of 2017. All other material terms of the 2015 Credit Agreement, including the maturity date, remained the same. The Company entered into a fourth waiver agreement to the 2015 Credit Agreement in March 2017 under which the lenders under the 2015 Credit Agreement agreed to refrain from exercising certain rights under the 2015 Credit Agreement, including the declaration of a default and to forbear from acceleration of any repayment rights with respect to existing covenants. On March 31, 2017, the Company entered into the Third Amendment. Pursuant to this amendment, principal payments owed under the 2015 Credit Agreement, in the amount of $380,000 per month, were deferred until January 31, 2018. Additionally, the parties amended a future capital raising covenant by extending the time period by which the Company was required to raise the remaining $17.0 million of capital by six months, from June 30, 2017 to December 31, 2017 , which was satisfied in September 2017. All other material terms of the 2015 Credit Agreement, including the maturity date, remain the same. The clinical development milestone was deemed satisfied in a letter agreement entered into on December 22, 2017 with a majority of lenders u nder our 2015 Credit Agreement. The Third Amendment also amended certain terms of the warrants to purchase an aggregate of 617,651 shares of the Company’s common stock issued in connection with the 2015 Credit Agreement (the “2015 Warrants”). Pursuant to the Third Amendment, the warrants may now only be exercised for cash and the exercise price was reduced from $10.20 per share to $4.50 per share. The redemption feature in the 2015 Warrants was also amended such that the warrant holder may only demand a redemption of the 2015 Warrants upon the occurrence of, and during the continuance of, an event of default. Prior to this amendment, the warrant could be redeemed by the warrant holder at any time after the 51 st month. As amended, if these warrants are exercised, the Company will receive approximately $2.8 million in proceeds in the aggregate. As a result of the Third Amendment, $0.9 million was recorded as a debt premium at March 31, 2017, inclusive of the fair value of the warrant modification utilizing a Black-Scholes calculation, and will be amortized to interest expense over the remaining term of the agreement as the amendment was deemed to be a modification in accordance with ASC 470 ( Note 6 ). Approximately $0.2 million and $0.4 million was recorded to interest expense during three and six months ended June 30, 2018 , respectively, and a pproximately $0.2 million was recorded to interest expense during each of the three and six months ended June 30, 2017 , respectively. The Company entered into a fifth waiver agreement to the 2015 Credit Agreement in March 201 8 under which the lenders under the 2015 Credit Agreement agreed to refrain from exercising certain rights under the 2015 Credit Agreement, including the declaration of a default and to forbear from acceleration of any repayment rights with respect to existing covenants. The report and opinion of the Company’s independent registered public accounting firm, BDO USA, LLP, for the year end December 31, 2017 contained an explanatory paragraph regarding the Company’s ability to continue as a going concern , which was an event of default under the 2015 Credit Agreement. The Company entered into the fourth amendment to the 2015 Credit Agreement in June 2018 (the “Fourth Amendment”). Pursuant to the Fourth Amendment, the maturity date of the 2015 Credit Agreement was extended to August 31, 2018 (the “Extension Period”). The Company repaid $4.7 million of the outstanding principal on June 18, 2018, representing all amounts due under the 2015 Credit Agreement to GoldenTree Credit Opportunities, LP, GoldenTree Credit Opportunities, Ltd, GoldenTree Insurance Fund Series Interests of the SALI Multi-Series Fund, LP, GT NM, LP, and San Berndino County Employees' Retirement Association. All other material terms of the 2015 Credit Agreement remain the same during the Extension Period, including certain financial covenants. As of the date hereof, the Company is not in default under the terms of the 2015 Credit Agreement. The minimum payments required on the outstanding balances of the 2015 Credit Agreement a t June 30, 2018 are (in thousands): 2015 Credit Agreement 2018 $ 28,046 $ 28,046 The following table provides components of interest expense and other related financing costs (in thousands) : Three Months Ended Six Months Ended June 30, June 30, 2018 2017 2018 2017 Interest expense and other financing costs $ 939 $ 915 $ 1,890 $ 1,817 Amortization of deferred financing costs, debt discount and debt premium 399 515 913 1,213 Interest expense $ 1,338 $ 1,430 $ 2,803 $ 3,030 |
Financial Instruments
Financial Instruments | 6 Months Ended |
Jun. 30, 2018 | |
Financial Instruments [Abstract] | |
Financial Instruments | 6 . Financial Instruments Equity issued pursuant to Credit Agreements In connection with the 2015 Credit Agreement, the Company issued warrants as fees to the lenders to purchase an aggregate of $6.3 million of the Company’s Class A units. The strike price of the warrants was 85% of the price per unit in an IPO or , if before an IPO, 85% of the deemed per unit equity value as defined in the 2015 Credit Agreement. The warrants were exercisable as of the earlier of an IPO or July 1, 2016 . Since these warrants are also redeemable at the option of the holder upon the occurrence of, and during the continuance of, an event of default , the warrants are recorded as a liability of $1.3 million and $1.2 million at June 30, 2018 and December 31, 2017 . Upon entry into the agreement in August 2015, the warrants issued to an existing lender was recorded to loss on extinguishment of debt of $0.9 million and the warrants issued to the new lender was recorded as a debt discount of $5.4 million and will be amortized over the three year term (Note 5 ) in accordance with ASC 470. As a result of the Third Amendment, $0.9 million was recorded as a debt premium and will be amortized to interest expense over the remaining term of the agreement as the Third Amendment was deemed to be a modification in accordance with ASC 470. The Company used the Black-Scholes pricing model to value the warrant liability at June 30, 2018 with the following assumptions: risk-free interest rate of 2.7% , expected term of 4.2 years, expected volatility of 73.2% and a dividend rate of 0% . Upon consummation of the Company’s IPO on August 1, 2016 with a price per share of common stock in the IPO of $12.00, the warrants to purchase Class A units issued to lenders under the 2015 Credit Agreement were exchanged for 617,651 warrants to purchase the same number of shares of the Company’s common stock. The change in fair value of the warrants was $(0.2) million and $0.1 million for the three and six months ended June 30, 2018 , respectively , and $0.1 million and $(1.0) million for the three and six months ended June 30, 2017 , respectively. None of these instruments have been exercised as of June 30, 2018 and December 31, 2017 . At June 30, 2018 , the fair value of the warrant liability was approximately $1.3 million and is recorded as a short-term liability since the redemption feature of the warrant terminates upon the current maturity of the 2015 credit agreement on August 31 , 2018. Other Warrants In connection with the sale of common stock in March 2017, warrants to purchase 2,707,138 shares of common stock were issued at an exercise price of $4.50 per share. During April 2018, warrants to purchase 119,047 shares of common stock were exercised for which the Company received proceeds of $0.5 million. The remaining 2,588,091 warrants expired i n April 2018. These warrants included a cash settlement option requiring the Company to record a liability for the fair value of the warrants at the time of issuance and at each reporting period with any change in the fair value repor ted as other income or expense. At the time of issuance, approximately $1.6 million was recorded as a warrant liability. The change in the fair value of these warrants was $(0.3) million and $(0.7) million for the three and six months ended June 30, 2018 , respectively , and $0.1 million and $0.3 million for the three and six months ended June 30, 2017 , respectively . In connection with the 2017 Public Offering, the Company issued warrants to purchase 10,710,000 shares of common stock at an initial exercise price of $3.35 per share for a term of 5 years from the date of issuance. At June 30, 2018 , warrants to purchase 10,671,400 shares of common stock were outstanding. The Company assessed the warrants under FASB ASC 480 and determined that the warrants were outside the scope of ASC 480. The Company next assessed the warrants under FASB ASC 815. Under the related guidance, a reporting entity shall not consider a contract to be a derivative instrument if the contract is both (1) indexed to the entity’s own stock and (2) classified in stockholders’ equity. The Company determined that the warrants were indexed to the Company’s stock, as the agreements do not contain any exercise contingencies and the warrants’ settlement amount equals the difference between the fair value of the Company’s common stock price and the warrant strike price. The Company also assessed the classification in stockholders’ equity and determined the warrants met all of the criteria for classification as equity under ASC 815. Based on this analysis, the Company determined that the warrant should be classified as equity and recorded $22.8 million to additional paid in capital, which represents the allocation of the 2017 Public Offering proceeds to the fair value of the warrants at issuance date. Fair Value of Long ‑term Debt The Company had no long-term secured debt at June 30, 2018 or December 31, 2017 . Since the secured debt becomes due on August 31, 2018 , it has been recorded as short-term secured debt at both June 30, 2018 and December 31, 2017 . The underlying agreements for these balances were negotiated with parties that included fully independent third parties, at an interest rate which is con sidered to be in line with over- arching market conditions. Based on these factors management considers the carrying value of the debt to approximate fair value at June 30, 2018 and December 31, 2017 . Fair Value Classification The Company held certain liabilities that are required to be measured at fair value on a recurring basis. Fair value guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: · 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. The table below represents the values of the Company’s financial instruments at June 30, 2018 and December 31, 2017 (in thousands): Fair Value Measurement Using Significant Other Observable Inputs (Level 2) June 30, December 31, Description 2018 2017 Warrants $ 1,334 $ 1,952 Total $ 1,334 $ 1,952 The table below represents a rollforward of the Level 2 financial instruments from January 1, 201 7 to June 30, 2018 (in thousands). Significant Other Observable Inputs (Level 2) Balance at January 1, 2017 $ 3,305 Fair value of warrants modified in the Third Amendment (908) Issuance of warrants in private placement 1,651 Change in fair value of financial instruments (2,096) Balance at December 31, 2017 $ 1,952 Change in fair value of financial instruments (604) Exercise of warrants recorded as liability (14) Balance at June 30, 2018 $ 1,334 The Level 2 inputs used to value our financial instruments were determined using prices that can be directly observed or corroborated in active markets. Although the fair value of this obligation is calculated using the observable market price of Kadmon Holdings Inc. common stock, an active market for this financial instrument does not exist and therefore the Company has classified the fair value of this liability as a Level 2 liability in the table above. Warrants The following table summarizes information about warrants outstanding at June 30, 2018 and December 31, 2017 : Warrants Weighted Average Exercise Price Balance, December 31, 2017 14,722,790 $ 5.70 Granted — — Exercised (134,847) 4.21 Forfeited (2,588,091) 4.50 Balance, June 30, 2018 11,999,852 $ 5.97 |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2018 | |
Inventories [Abstract] | |
Inventories | 7 . Inventories Inventories are stated at the lower of cost or net realizable value (on a first ‑in, first ‑out basis) using standard costs. Standard costs include an allocation of overhead rates, which include those costs attributable to managing the supply chain and are evaluated regularly. Variances are expensed as incurred. The Company regularly reviews the expiration date s of its inventories and maintains a reserve for inventories that are probable to expire before shipment. Inventories recorded on the Company’s consolidated balance sheets are net of a reserve for expirable inventory of $3.5 million and $4.8 million at June 30, 2018 and December 31, 2017 , respectively. The Company expensed Ribasphere inventory that it believes will not be sold prior to reaching its ex p iration date totaling $ 0.1 million and $0.2 million during the three and six months ended June 30, 2018 , respectively , and $0.3 million and $0.7 million during the three and six months ended June 30, 2017 , respectively. If the amount and timing of future sales differ from management’s assumptions, adjustments to the estimated inventory reserves may be required. Inventories Produced in Preparation for Product Launches The Company capitalizes inventories produced in preparation for product launches sufficient to support estimated initial market demand. Typically, capitalization of such inventory begins when positive results have been obtained for the clinical trials that the Company believes are necessary to support regulatory approval, uncertainties regarding ultimate regulatory approval have been significantly reduced and the Company has determined it is probable that these capitalized costs will provide some future economic benefit in excess of capitalized costs. The material factors considered by the Company in evaluating these uncertainties include the receipt and analysis of positive Phase 3 clinical trial results for the underlying product candidate, results from meetings with the relevant regulatory authorities prior to the filing of regulatory applications, and the compilation of the regulatory application. The Company closely monitors the status of each respective product within the regulatory approval process, including all relevant communication with regulatory authorities. The Company also considers its historical experience with manufacturing and commercializing similar products and the relevant product candidate. If the Company is aware of any specific material risks or contingencies other than the normal regulatory review and approval process or if there are any specific issues identified relating to safety, efficacy, manufacturing, marketing or labeling, the related inventory would generally not be capitalized. For inventories that are capitalized in preparation of product launch, anticipated future sales, expected approval date and shelf lives are evaluated in assessing realizability. The shelf life of a product is determined as part of the regulatory approval process; however in evaluating whether to capitalize pre-launch inventory production costs, the Company considers the product stability data of all of the pre-approval production to date to determine whether there is adequate expected shelf life for the capitalized pre-launch production costs. The Company has concluded that KD034, its generic version of trientine hydrochloride, is commercially viable since it is the chemical equivalent of the original FDA approved drug, the Company has submitted two A brreviated New Drug Application’s with the FDA , and economic benefits are probable. Accordingly, the pre-launch costs are realizable as the Company expects the inventory will be sold or used prior to expiration. An assessment of likelihood that regulatory approval will not be obtained will be made at each reporting period. If at any time regulatory approval is deemed to not be probable, the inventory will be written down to its net realizable value , which is presumably zero , as the product would have no alternative future use. The Company maintained $0.6 million and $0.1 million of work-in-process inventory related to KD034 at June 30, 2018 and December 31, 2017 , respectively. Inventories are comprised of the following (in thousands): June 30, December 31, 2018 2017 Raw materials $ — $ — Work-in-process 579 80 Finished goods, net 86 121 Total inventories $ 665 $ 201 |
Fixed Assets
Fixed Assets | 6 Months Ended |
Jun. 30, 2018 | |
Fixed Assets [Abstract] | |
Fixed Assets | 8 . Fixed Assets Fixed assets consisted of the following (in thousands): Useful Lives June 30, December 31, (Years) 2018 2017 Leasehold improvements 4 -8 $ 10,138 $ 10,120 Office equipment and furniture 3 -15 1,497 1,488 Machinery and laboratory equipment 3 -15 3,213 2,765 Software 1 -5 3,238 3,162 Construction-in-progress ̶̶̶̶ 501 408 18,587 17,943 Less accumulated depreciation and amortization (14,354) (13,651) Fixed assets, net $ 4,233 $ 4,292 Depreciation and amortization of fixed assets totaled $0.7 million and $0.9 million during the six months ended June 30, 2018 and 2017 , respectively, and $0.4 million and $0.4 million in the three months ended June 30, 2018 and 2017 . The construction ‑in ‑progress balance is related to costs of unimplemented software still under development. Unamortized computer software costs were $0.2 million at June 30, 2018 and December 31, 2017 . The amortization of computer software costs amounted to $0.1 million and $0.3 million for the six months ended June 30, 2018 and 2017 , respectively , and $0.1 million for each of the three months ended June 30, 2018 and 2017 . During the first quarter of 2017, the Company disposed of $2.1 million of fully depreciated assets. There was no consideration received for the disposal of these assets and the disposal did not have a significant impact on the consolidated financial statements of the Company . |
Goodwill
Goodwill | 6 Months Ended |
Jun. 30, 2018 | |
Goodwill [Abstract] | |
Goodwill | 9 . Goodwill The Company’s goodwill relates to the 2010 acquisition of Kadmon Pharmaceuticals , LLC , a Pennsylvania limited liability company that was formed in April 2000. The re were no changes in the carrying amount of goodwill for the six months ended June 30, 2018 and the year ended December 31, 2017 . |
Investment in MeiraGTx
Investment in MeiraGTx | 6 Months Ended |
Jun. 30, 2018 | |
Investment in MeiraGTx [Abstract] | |
Investment in MeiraGTx | 10. Investment in MeiraGTx In April 2015, the Company executed several agreements which transferred its ownership of Kadmon Gene Therapy, LLC to MeiraGTx, a then wholly ‑owned subsidiary of the Company. As part of these agreements, the Company also transferred various property rights, employees and management tied to the intellectual property and contracts identified in the agreements to MeiraGTx. At a later date, MeiraGTx ratified its shareholder agreement and accepted the pending equity subscription agreements, which provided equity ownership to various parties. The execution of these agreements resulted in a 48% ownership in MeiraGTx by the Company. After MeiraGTx was deconsolidated or derecognized, the retained ownership interest was initially recognized at fair value and a gain of $24.0 million was recorded based on the fair value of this equity investment. The Company’s investment was accounted for under the equity method at zero cost with an estimated fair value at the time of the transaction of $24.0 million. This value was determined based upon the implied value established by the cash raised by MeiraGTx in exchange for equity interests by third parties. As of March 31, 2018, the Company had no basis in any of the investments in MeiraGTx. The Company assessed the applicability of ASC 810 to the aforementioned agreements and based on the corporate structure, voting rights and contributions of the various parties in connection with these agreements, determined that MeiraGTx is a variable interest entity, however consolidation is not required as the Company is not the primary beneficiary based upon the voting and managerial structure of the entity. On June 12, 2018, MeiraGTx completed its initial public offering (the “MeiraGTx IPO”) whereby it sold 5,000,000 shares of common stock at $15.00 per share. Upon the closing of the MeiraGTx IPO, 27,184,132 shares of common stock were outstanding, which includes the conversion of all C preferred shares into common stock at MeiraGTx IPO. The shares began trading on the Nasdaq Global Select Market on June 7, 2018 under the symbol “MGTX.” Prior to the MeiraGTx IPO, t he Company ha d no basis in any of the investments held in MeiraGTx. Upon completion of the MeiraGTx IPO, the Company’s investment was diluted to 13.0% ownership in MeiraGTx common stock and no longer has the ability to exert significant influence over MeiraGTx. The Company discontinued the equity method of accounting for the investment in MeiraGTx on June 12, 2018 and determined t he remaining investment to be an equity security accounted for in accordance with ASC 321 at the date the investment no longer qualifies for t he equity method of accounting. ASC 321 requires the investments to be recorded at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer. As the Company’s investment in MeiraGTx common stock has a readily determinable market value, t he Company recorded an unrealized gain of $40.5 million for the three and six months ended June 30, 2018 related to the fair value of its ownership of common stock of MeiraGTx. As of June 30, 2018 , the Company maintains a 13.0% ownership in the common stock of MeiraGTx with a fair value of $40.5 million recorded as a noncurrent investment in equity securities as the Company is restricted from trading during the 180 day lock-up period from the date of the MeiraGTx IPO. The investment in MeiraGTx is valued using Level 1 inputs which includes quoted prices in active markets for identicial assets in accordance with the fair value hierarchy (see Note 6). The Company has not re alized any gains related to the investment in common stock of MeiraGTx. As part of a transition services agreement with MeiraGTx, the Company recognized $0.3 million of service revenue to lice nse and other revenue during each of the six months ended June 30, 2018 and 2017 and $0.2 million during each of the three months ended June 30, 2018 and 2017 . The Co mpany received cash payments of $1.1 million and $0.3 million for service revenue earned under the transition services agreement during the six months ended June 30, 2018 and 2017 , respectively. The Company has amounts receivable from MeiraGTx of approximately $0 and $0.9 million at June 30, 2018 and December 31, 2017 , respectively. For the period beginning January 1, 2018 through June 12, 2018 , the Company recorded its share of MeiraGTx’s net loss under the equity method of accounting of $1.2 million . For the the three and six months ended June 30, 2017 the Company recorded its share of MeiraGTx’s net loss under the equity method of accounting of $3.1 million and $5.7 million, respectively . No share of losses were recorded during the three months ended June 30, 2018 , as the carrying value of the Company’s investments in MeiraGTx was zero at March 31, 2018 and Company has discontinued the equity method of accounting for the investment in MeiraGTx as of June 12, 2018. In February 2016, Meira GTx entered into a five -year lease with Moorfields Eye Hospital and NHS Foundation Trust. Under the lease, Kadmon is a guarantor of Meira GTx ’s rent obligations and has agreed to indemnify Moorfields as the landlord against any failure by Meira GTx to pay the rent or otherwise perform its obligations thereunder. Remaining payments under the lease are approximately $0.7 million. |
License Agreements
License Agreements | 6 Months Ended |
Jun. 30, 2018 | |
License Agreements [Abstract] | |
License Agreements | 1 1 . License Agreements The Company’s license agreements are disclosed in the audited financial statements included in Item 8 of the Annual Report on Form 10-K as of and for the year ended December 31, 2017 . Since the date of such financial statements, there have been no changes to the Company’s license agreements, other than those described below. Dyax Corp. (acquired by Shire Plc in January 2016) On September 13, 2012 the Company entered into a license agreement with Dyax whereby the Company obtained from Dyax the exclusive, worldwide license to use research, develop, manufacture and commercialize DX ‑2400 in exchange for payment of $0.5 million. All payments associated with this agreement were recorded as research and development expense at the time the agreement was executed. On April 2, 2018, we gave notice of our intent to terminate this agreement effective six months from the date of notice. Oncon and Ras On May 19, 2016, the Company entered into a development and license agreement with Limited Liability Company Oncon (“Oncon”) whereby the Company granted Oncon exclusive licenses for certain antibodies. While Oncon is not considered a related party to Kadmon, a family member of an executive management member of Kadmon is a limited, non-controlling partner and minority shareholder in Oncon who is unable to exert significant influence on the policies or operations of Oncon. Upon commercial sale of the licensed antibodies , the Company is eligible to receive a royalty equal to a percentage of net sales in the high-teens. The Company is also eligible to receive a portion of subl icensing revenue from Oncon ranging from the low ten percents to low thirty percents based on the development stage of the product. No such revenue was earned during the three and six months ended June 30, 2018 and 2017 . In connection with the development and license agreement, the Company also entered into an exclusive supply agreement with Limited Liability Company Ras (“Ras”) whereby the Company will supply Ras with antibodies under the agreement for Ras to supply to Oncon. Ras is controlled by the family member of an executive management member of Kadmon and is a related party to Kadmon . There has been no activity between the Company and Ras under the development and license agreement as of June 30, 2018. On April 20, 2018, the Company entered into a cell bank development and royalty agreement with Oncon whereby the Company would serve as an agent to engage a third party to develop and manufacture a biological product for Oncon. Under the cell bank development agreement, Ras, a related party to Kadmon , is Oncon’s designated recipient of the m aster cell bank, if and when it s development is complete. There has been no activity between the Company and Ras under the cell bank development agreement as of June 30, 2018. In June 2018, the Company received an upfront payment from Oncon totaling $0.8 million which the Company is required to deliver to the third party upon completion of development of the master cell bank. At June 30, 2018 , the Company has $0.8 million recorded as an accrued liability as no payments have been made to the third party as of June 30, 2018 . Under this agreement, the Company is also to provide expertise and know-how to the development process and is eligible to receive a royalty equal to a percentage of net sales in the low single digit percents upon commercialization of the biological product. The Company is also eligible to receive a portion of sublicensing revenue from Oncon in the low single digit percents. No such revenue was earned during the three and six months ended June 30, 2018 and 2017 . |
Share-based Compensation
Share-based Compensation | 6 Months Ended |
Jun. 30, 2018 | |
Share-based Compensation [Abstract] | |
Share-based Compensation | 12 . Share ‑based Compensation 2016 Equity Incentive Plan A total of 8,523,147 shares of the Company’s common stock were authorized and reserved for issuance under the Company’s 2016 Equity Incentive Plan , as amended (the “2016 Equity Plan”) at December 31, 2017 . This reserve automatically increased to 11,668,905 on January 1, 201 8 and will automatically increase each subsequent anniversary through January 1, 2025, by an amount equal to the smaller of (a) 4% of the number of shares of common stock issued and outstanding on the immediately preceding December 31, or (b) an amount determined by the board of directors. A t June 30, 2018 , there were options to purchase an aggregate of 8,083,842 shares of common stock outstanding at a weighted average price of $7.13 per share under the 2016 Equity Plan. Total unrecognized compensation expense related to unvested options granted under the Company’s share ‑based compensation plan was $7.8 million and $13.3 million at June 30, 2018 and December 31, 2017 , respectively. That expense is expected to be recognized over a weighted average period of 1.8 years and 1.9 years as of June 30, 2018 and December 31, 2017 , respectively. The Company recorded share ‑based compensation expense under the 2016 Equity Plan of $ 5.6 million and $7.6 million for the six months ended June 30, 2018 and 2017 , respectively , and $3.0 million and $3.7 million for the three months ended June 30, 2018 and 2017 , respectively . The following table summarizes information about stock options outstanding at June 30, 2018 and December 31, 2017 : Options Outstanding Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (years) Aggregate Intrinsic Value (in thousands) Balance, December 31, 2017 8,496,872 $ 6.96 8.83 $ — Granted 80,924 7.75 Exercised — — Forfeited (493,954) 4.36 Balance, June 30, 2018 8,083,842 $ 7.13 8.21 $ 800,160 Options vested and exercisable, June 30, 2018 4,174,190 $ 9.51 7.45 $ — The aggregate intrinsic value in the table above represents the total pre ‑tax intrinsic value calculated as the difference between the fair value of the Company’s common stock at June 30, 2018 ( $3.99 per share ) and the exercise price, multiplied by the related in ‑the ‑money options that would have been received by the option holders had they exercised their options at the end of the fiscal year. This amount changes based on the fair value of the Company’s common stock . There were no options exercised during the six months ended June 30, 2018 and 2017 . There were 80,924 stock options granted during the six months ended June 30, 2018 with a weighted-average exercise price of $7.75 . During the six months ended June 30, 2017 , 285,000 stock options were granted with a weighted ‑average exercise price of $4.11 . The fair value of each stock option award was estimated at the date of grant using the Black ‑Scholes option ‑pricing model and the assumptions noted in the following table: Six Months Ended Six Months Ended June 30, 2018 June 30, 2017 Weighted average fair value of grants $2.30 $2.62 Expected volatility 72.94% - 75.14% 74.48% -74.70% Risk-free interest rate 2.44% - 2.75% 1.87% -2.00% Expected life (years) 5.60 - 6.00 5.50 -5.75 years Expected dividend yield 0% 0% Peformance Awards On April 3, 2018 the Company granted 1,597,500 nonqualified performance-based stock options (“Performance Options”) to certain executive officers (each, a “Grantee”), which represents the maximum number of Performance Options that may be earned if all three performance milestones (each, a “Performance Goal”) are achieved during the three -year period following the Grant Date (the “Performance Period”), as described below. If two of the three Performance Goals are achieved during the Performance Period, two -thirds of the Performance Options may be earned (the “Target” number of Performance Options), and if one of the three Performance Goals are achieved during the Performance Period (the minimum performance threshold for the Performance Options), one -third of the Performance Options is earned. In addition to the achievement of the Performance Goals, the Performance Options are also subject to time-based vesting requirements. Each Performance Option was granted with an exercise price of $4.06 per share and does not contain any voting rights. No Performance Options were granted under the 2016 Equity Plan prior to 2018. The Performance Options may be earned based on the achievement of three separate Performance Goals related to the Company’s operating and research and development activities during the Performance Period, subject to the Grantee’s employment through the achievement date. If no Performance Goals are achieved during the Performance Period, the Performance Options will be forfeited. Any Performance Options earned upon the achievement of a Performance Goal will generally vest in three equal installments on specified vesting dates between the date of achievement of the Performance Goal and the third anniversary of the Grant Date based on continued employment; provided , that, if the relevant achievement date for a Performance Goal occurs after the second anniversary of the Grant Date, the full vesting of the Options earned will occur on the one year anniversary of the date of achievement of the applicable Performance Goal. Unvested Performance Options will be forfeited upon the Grantee’s termination of employment, unless the Grantee is terminated without cause or resigns for good reason or due to the Grantee’s death or disability, in which case earned but unvested Performance Options will accelerate and vest (and unearned Performance Options will be forfeited). If the Grantee is terminated for cause, all Performance Options, whether earned, unearned, vested or unvested, will be forfeited. If a change in control (as defined in the 2016 Equity Plan) occurs during the Performance Period, the Target number of Performance Options will be deemed earned (if not previously earned), and any unearned Performance Options will be forfeited. In addition, following a change in control (whether such change in control occurs within or after three years following the Grant Date), and subject to the terms of the 2016 Equity Plan, Performance Options earned upon such change in control will vest on the first anniversary of the change in control based on continued employment, and any Performance Options earned prior to the change in control will vest no later than the first anniversary of the change in control based on continued employment; provided , that, in each case, any unvested Performance Options will vest upon a Grantee’s earlier termination by the Company without cause or resignation for good reason. The weighted-average fair value of the Performance Options granted was $2.71 and was estimated at the date of grant using the Black-Scholes option-pricing model with the following assumptions: risk-free interest rate of 2.67% , expected term of 6.0 years, expected volatility of 74.50% , and a dividend rate of 0% . Compensation expense for the Performance Options is recognized on a straight-line basis over the awards’ requisite service period. The Performance Options vest upon the satisfaction of both a service condition and the satisfaction of one or more performance conditions, therefore the Company initially determined which outcomes are probable of achievement. The Company believes that the three-year service condition (explicit service period) and all three performance conditions (implicit service periods) will be satisfied. The requisite service period would be three years as that is the longest period of both the explicit service period and the implicit service periods. Total unrecognized compensation expense related to unvested Performance Options was $3.6 million at June 30, 2018 . The unrecognized compensation cost is expected to be recognized over a weighted-average period of 1.7 years. The weighted average remaining contractual term of the Performance Options is 9.8 years. No Performance Options were exercised during the six months ended June 30, 2018 . Stock Appreciation Rights The Company granted 1,040,000 stock appreciation rights to certain executive officers during the year ended December 31, 2017 with an exercise price of $3.64 per share. No stock appreciation rights were granted under the 2016 Equity Plan prior to 2017. The weighted average remaining contractual term of the stock appreciation rights is 9.5 years. Compensation expense for stock appreciation rights is recognized on a straight-line basis over the awards’ requisite service period. Total unrecognized compensation expense related to unvested stock appreciation rights was $2.0 million and $2.5 million at June 30, 2018 and December 31, 2017 , respectively. The unrecognized compensation cost is expected to be recognized over a weighted-average period of 2.4 years and 2.9 years, respectively. No stock appreciation rights were exercised during the six months ended June 30, 2018 and 2017 . The aggregate intrinsic value of the stock appreciation rights was $0.4 million as of June 30, 2018 . 2014 Long ‑term Incentive Plan (“LTIP”) A total of 9,750 units were granted under the LTIP at June 30, 2018 and December 31, 2017 . The LTIP is payable upon the fair market value of the Company’s common stock exceeding 333% of the $6.00 grant price ( $20.00 ) per share prior to December 7, 2024. The holders of the LTIP have no right to demand a particular form of payment, and the Company reserves the right to make payment in the form of cash or common stock. 2016 Employee Stock Purchase Plan (“2016 ESPP”) A total of 1,801,180 shares of the Company’s common stock were reserved for issuance under the 2016 ESPP at December 31, 2017 , which increased to 2,551,180 on January 1, 2018. The 2016 ESPP was amended and restated on March 16, 2018. The Company issued 10,594 shares and 22,958 shares of common stock under the 2016 ESPP in October 2017 and April 2018, respectively. No meaningful compensation expense was recognized for the ESPP during the six months ended June 30, 2018 and 2017 . |
Accrued Expenses
Accrued Expenses | 6 Months Ended |
Jun. 30, 2018 | |
Accrued Expenses [Abstract] | |
Accrued Expenses | 13 . Accrued Expenses Short ‑term accrued expenses at June 30, 2018 and December 31, 2017 include the following (in thousands): June 30, December 31, 2018 2017 Commission payable $ 2,395 $ 2,395 Compensation and benefits 592 758 Severance 741 1,122 Research and development 1,254 1,915 Other 2,993 2,387 Total Accrued Expenses $ 7,975 $ 8,577 Commission Payable During 2014 and 2015 , the Company raised $40.4 million in gross proceeds, $37.3 million net of $3.1 million in transaction costs, through the issuance of 3,514,859 Class E redeemable convertible units. Of the $3.1 million in transaction costs, $2.4 million remains in accrued liabilities at June 30, 2018 and December 31, 2017 relating to commissions to third parties for Class E redeemable convertible raises during 2014 and 2015 . Severance Severance balances represent contractual compensation to be paid to former employees, a significant portion of which relates to the separation agreement with Dr. Samuel D. Waksal. Effective as of February 8, 2016, Dr. Samuel D. Waksal resigned from all positions with the Company and is no longer employed by the Company in any capacity. A t June 30, 2018 , accrued severance payments payable to Dr. Samuel D. Waksal total $0.6 million , which is recorded as accrued expense . At December 31, 201 7 , accrued severance payable to Dr. Samuel D. Waksal totaled $1.2 million, of which $1.0 million was recorded as accrued expense and $0.2 million was recorded as other long ‑ term liabilities. The separation agreement with Dr. Samuel D. Waksal contains certain supplement conditional payments, none of which have been met at June 30, 2018 . T he Company has not recorded any expense related to these conditional payments at June 30, 2018 and will continue to evaluate the probability of these conditional payments. Research and development The Company has contracts with third parties for the development of the company’s product candidates. The timing of the expenses varies depending upon the timing of initiation of clinical trials and enrollment of patients in clinical trials. At June 30, 2018 and December 31, 2017 , accrued research and development expenses for which the Company has not yet been invoiced totaled $1.3 million and $1.9 million, respectively. |
Commitments
Commitments | 6 Months Ended |
Jun. 30, 2018 | |
Commitments [Abstract] | |
Commitments | 1 4 . Commitments The Company’s commitments are disclosed in the audited financial statements included in Item 8 of the Annual Report on Form 10-K as of and for the year ended December 31, 2017 . Since the date of such financial statements, there have been no changes to the Company’s commitments . Licensing Commitments The Company has entered into several license agreements for products currently under development (Note 11 ). The Company may be obligated in future periods to make additional payments, which would become due and payable only upon the achievement of certain research and development, regulatory, and approval milestones. The specific timing of such milestones cannot be predicted and depends upon future discretionary clinical developments as well as regulatory agency actions which cannot be predicted with certainty (including action which may never occur). These additional contingent milestone payments aggregate to $400.4 million at June 30, 2018 . Any payments made prior to U.S. Food and Drug Administration (“ FDA ”) approval will be expensed as research and development. Payments made after FDA approval will be capitalized. Further, under the terms of certain licensing agreements, the Company may be obligated to pay commercial milestones contingent upon the realization of sales revenues and sublicense revenues. Due to the long ‑range nature of such commercial milestones, they are neither probable at this time nor predictable, and consequently are not included in the additional contingent milestone payment amount. |
Contingencies
Contingencies | 6 Months Ended |
Jun. 30, 2018 | |
Contingencies [Abstract] | |
Contingencies | 1 5 . Contingencies The Company has been subject to various legal proceedings that arise from time to time in the ordinary course of its business. Although the Company believes that the various proceedings brought against it have been without merit, and that it has adequate product liability and other insurance to cover any claims, litigation is subject to many factors which are difficult to predict and there can be no assurance that the Company will not incur material costs in the resolution of legal matters. Should the Company determine that any future obligations will exist, the Company will record expense equal to the amount which is deemed probable and estimable. Legal Proceedings The Glodek Litigation On July 25, 2016, Kevin Glodek filed and served a Summons with Notice against Kadmon Holdings, LLC and Kadmon Holdings, Inc. in the New York State Supreme Court, for the county of New York, for an amount of no less than $2.8 million with interest, plus costs and disbursements. Company counsel demanded a complaint and that complaint was served and filed on September 6, 2016. In the complaint, Glodek alleges fraud, misrepresentation, breach of contract, breach of the implied covenant of good faith and fair dealing, and unjust enrichment, for amounts to be determined at trial, but in no event less than $4 million with interest, plus costs and disbursements. Glodek’s claims arise out of a 2015 settlement agreement, in which he released all claims he had against Kadmon Holdings, LLC and Kadmon Holdings, Inc. On September 21, 2016, Glodek filed an Amended Summons and an Amended Complaint adding Steven N. Gordon and Mr. Poukalov as named defendants. All defendants moved (i) to dismiss the Amended Complaint and (ii) for sanctions or, in the alternative, to disqualify Glodek’s counsel. Argument on the motions was conducted on January 24, 2017 before the Honorable Anil Singh. On April 18, 2017, the complaint was dismissed in its entirety. Glodek filed a Notice of Appeal on May 18, 2017, and had 9 months within which to “perfect” his appeal by filing a brief and the record. Defendants filed a Notice of Cross Appeal on May 18, 2017. Glodek filed a motion to expand his time to perfect his appeal, and this motion was granted thereby extending the deadline to perfect his appeal and for the defendants to file their cross appeal(s) to September 2018. On July 10, 2018, Glodek filed his opening appellate brief. Defendants have filed their brief, which includes a cross-appeal seeking sanctions. The appeal is scheduled to be heard in the Appellate Division’s September 2018 term . |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 1 6 . Related Party Transactions At December 31, 2016 Kadmon I, LLC held approximately 12.1% of the total outstanding common stock of Kadmon Holdings. The sole manager of Kadmon I, LLC was an executive officer of the Company. Kadmon I had no special rights or preferences in connection with its investment into Kadmon Holdings, and had the same rights as all other holders of Kadmon Holdings Class A units. On January 23, 2017, Kadmon I, LLC was dissolved and liquidated. Upon dissolution and liquidation, all assets of Kadmon I, LLC which consists solely of the shares of common stock in Kadmon Holdings, Inc., were distributed to the members of Kadmon I, LLC . |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2018 | |
Income Taxes [Abstract] | |
Income Taxes | 1 7 . Income Taxes The Company files a consolidated tax return for Kadmon Holdings, Inc. and its domestic subsidiaries and the required information returns for its international subsidiaries, all of which are wholly owned. Where permitted, the Company files combined state returns, but in some instances separate company returns for certain subsidiaries on a stand ‑alone basis are required. Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The Company’s deferred tax assets relate primarily to its net operating loss carryforwards and other balance sheet basis differences. In accordance with ASC 740, “Income Taxes,” the Company recorded a valuation allowance to fully offset the gross deferred tax asset, because it is more likely than not that the Company will not realize future benefits associated with these deferred tax assets at June 30, 2018 and December 31, 2017 . The Tax Cuts and Jobs Act (the “Act”) was enacted in December 2017. The Act reduces the U.S. federal corporate tax rate from 35 percent to 21 percent, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred, creates new taxes on certain foreign earnings and reduces the orphan drug tax credit. In accordance with the Act, the Company determined it necessary to reduce the recorded deferred tax liability by $0.6 million during the six months ended June 30, 2018 to allow naked credit deferred tax liabilities to be used as a source of t axable income in the future. This change in deferred tax liability has been recognized as income tax benefit in the consolidated financial statements of operations for the three and six months ended June 30, 2018 . There was no change in deferred tax liability for the three and six months ended June 30, 2017 . For the six months ended June 30, 2017 , the Company recorded income tax expense of $0.3 million related to the $2.0 million milestone payments received from Jinghua. No income tax expense was recorded for the three months ended June 30, 2017 or the three and six months ended June 30, 2018 . |
Summary of Significant Accoun24
Summary of Significant Accounting Policies (Policy) | 6 Months Ended |
Jun. 30, 2018 | |
Summary of Significant Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The Company operates in one segment considering the nature of the Company’s products and services, class of customers, methods used to distribute the products and the regulatory environment in which the Company operates. |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements have been prepare d in conformity with accounting principles generally accepted in the United States of America (“GAAP”) . The consolidated financial statements include the accounts of Kadmon Holdings, Inc. and its domestic and international subsidiaries, all of which are wholly owned. |
Interim Financial Statements | Interim Financial Statements The accompanying financial statements have been prepared in accordance with GAAP for interim financial information and with the instructions to F orm 10 - Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In management’s opinion , the financial statements include all adjustments (consisting of normal recurring accruals) necessary in order to make the financial statements not misleading. Operating results for the three and six months ended June 30, 2018 are not necessarily indicative of the final results that may be expected for the year ended December 31, 201 8 . These unaudited financial statements should be read in conjunction with the audited financial statements in Item 15 of the Company’s Annual Report on Form 10-K for the year ended December 31, 201 7 . |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements. Actual results could differ from those estimates . |
Critical Accounting Policies | Critical accounting policies The Company’s significant accounting policies are disclosed in the audited financial statements included in Item 8 of the Annual Report on Form 10-K as of and for the year ended December 31, 2017. Since the date of such financial statements, there have been no changes to the Company’s significant accounting policies, other than those described below. |
Investment in Equity Securities | Investment in Equity Securities Equity securities consist of investments in common stock of companies traded on public markets (Note 10). These shares are carried on the Company’s balance sheet at fair value based on the closing price of the shares owned on the last trading day before the balance sheet of this report. Fluctutations in the underlying bid price of the shares result in unrealized gains or losses. In accordance with FASB ASC 321, Investments – Equity Securities (“ASC 321”), the Company recognizes these fluctuations in value as other expense (income). For investments sold, the Company recognizes the gains and losses attributable to these investments as realized gains or losses in other expense (income). |
Revenue Recognition | Revenue Recognition The Company adopted FASB ASC 606, Revenue from Contracts with Customers ( “ ASC 606 ” ), on January 1, 2018 using the modified retrospective method for all contracts not completed as of the date of adoption – i.e. , by recognizing the cumulative effect of initially applying ASC 606 as an adjustment to the opening balance of stockholders ’ equity at January 1, 2018. For contracts that were modified before the effective date, the Company reflected the aggregate effect of all modifications when identifying performance obligations and allocating transaction price in accordance with practical expedient ASC 606-10-65-1-(f)-4. The reported results for 2018 reflect the application of ASC 606 guidance while the reported results for 2017 were prepared under the guidance of ASC 605, Revenue Recognition ( “ ASC 605 ” ), which is also referred to herein as the "previous guidance". The adoption of ASC 606 represents a change in accounting principle that will more closely align revenue recognition with the delivery of the Company's services and will provide financial statement readers with enhanced disclosures. Therefore, the comparative information prior to January 1, 2018 has not been adjusted and continues to be reported under ASC 605. The details of significant changes and quantitative impact of the changes are set out below. The Company recognizes revenue in accordance with ASC 606, the core principle of which is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to receive in exchange for those goods or services. To achieve this core principle, five basic criteria must be met before revenue can be recognized: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to performance obligations in the contract; and (5) recognize revenue when or as the Company satisfies a performance obligation. Disaggregation of Revenue The following table summarizes revenue from contracts with customers for the three and six months ended June 30, 2018 : Three Months Ended Six Months Ended June 30, 2018 June 30, 2018 Product sales $ 161 $ 435 Other revenue 198 357 Total revenue $ 359 $ 792 Product Sales The Company markets a portfolio of branded and generic ribavirin products used as part of a combination treatment for chronic HCV infection (Ribasphere RibaPak and Ribasphere) and also distributes products in a variety of other therapeutic areas, including tetrabenazine for the treatment of chorea associated with Huntington’s disease. These contracts typically include a single promise to deliver a fixed amount of product to the customer with payment due within 30 days of shipment. Revenues are recognized when control of the promised goods is transferred to the customer, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods. As is typical in the pharmaceutical industry, gross product sales are subject to a variety of deductions, primarily representing rebates, chargebacks, returns, and discounts to government agencies, wholesalers, and managed care organizations. These deductions represent management’s best estimates of the related reserves and, as such, judgment is required when estimating the impact of these sales deductions on gross sales for a reporting period. If estimates are not representative of the actual future settlement, results could be materially affected. Other Revenue The other revenue generated by the Company is primarily related to the transition services agreement with MeiraGTx Holdings plc (“MeiraGTx”) (Note 10) . The Company performed various professional services under this agreement that support MeiraGTx. The Company recognizes revenue related to transition services as they are performed. Contract Balances The timing of revenue recognition may differ from the timing of invoicing to customers. Accounts receivable are recorded at the invoiced amount, net of an allowance for doubtful accounts. A receivable is recognized in the period we deliver goods or provide services or when our right to consideration is unconditional. The Company has not recognized any assets for costs to obtain or fulfill a contract with a customer as of June 30, 2018 . Financial Statement Impact of Adopting ASC 606 The Company adopted ASC 606 using the modified retrospective method. The cumulative effect of applying the new guidance to all contracts with customers that were not completed as of January 1, 2018 was recorded as an adjustment to accumulated deficit as of the adoption date as follows: As Reported Adjustments Adjusted (in thousands) December 31, AbbVie January 1, 2017 Agreement 2018 (unaudited) (unaudited) Cash, cash equivalents, and restricted cash $ 69,633 $ $ 69,633 Accounts receivable, net 1,186 1,186 Inventories, net 201 201 Prepaid expenses and other current assets 1,109 1,109 Fixed assets, net 4,292 4,292 Goodwill 3,580 3,580 Investments at cost 3,542 3,542 Other noncurrent assets 9 9 Total assets $ 83,552 $ $ 83,552 Accounts payable and accrued expenses $ 16,585 $ $ 16,585 Fair market value of financial instruments - current 1,952 1,952 Secured term debt - current 33,707 33,707 Deferred revenue, current 4,400 (4,400) — Deferred revenue, long term 19,617 (19,617) — Other long term liabilities 5,533 5,533 Total liabilities 81,794 (24,017) 57,777 Common stock, preferred stock, and additional paid-in capital 239,155 239,155 Accumulated deficit (237,397) 24,017 (213,380) Total stockholders’ equity 1,758 24,017 25,775 Total liabilities and stockholders’ equity $ 83,552 $ — $ 83,552 The year-end condensed balance sheet data was derived from audited consolidated financial statements, but does not include all disclosures required by GAAP. Commercial Partnership Agreement with AbbVie Inc. (“Abbvie”) On June 17, 2013, the Company entered int o a series of agreements with AbbVie related to certain of the Company’s ribavirin products. Pursuant to an asset purchase agreement, as amended, we sold marketing authorizations and related assets for ribavirin in certain countries outside the United States. The Company received upfront payments totaling $64.0 million, and could have received additional contingent payments totaling $51.0 million based on the achievement of certain milestones. The Company did not earn any such milestones during the six months ended June 30, 2018 . Of the $64.0 million upfront payments, $44.0 million was considered allocable to the domestic licensing arrangement and was recorded as deferred revenue to be recognized over the 10 year term of the agreement. The Company recognized $1.1 million and $2.2 million during the three and six months ended June 30, 2017 , respectively. At June 30, 2018 and December 31, 2017, $0.0 and $24.0 million is recorded as deferred revenue, respectively, of which $4.4 million was short ‑term at December 31, 2017. The Company is required to supply ribavirin products, maintain the marketing authorization for certain ribavirin products and maintain the intellectual property for Ribasphere and RibaPak through the term of the agreements ending December 31, 2020. The Company’s agreements with AbbVie provide AbbVie with access to various forms of in tellectual property, as well as supply of product. Under the previous guidance, certain of the upfront payments under the agreements was considered allocable to a 10-year domestic license arrangement and, as a result, the associated revenue was previously deferred and recognized straight line over the life of the agreements. Under ASC 606, the Company has determined that two distinct performance obligations under the domestic license agreement exist, both of which are considered to be completed as of the date of adoption. No other material rights or enforceable rights or obligations exist under the AbbVie agreements. In conjunction with the January 1, 2018 adoption of ASC 606, the Company adjusted its accumulated deficit by $24.0 million, reflecting the recognition of $24.0 million of deferred revenue related to the domestic license agreement with AbbVie. Income Taxes The adoption of ASC 606 primarily resulted in an acceleration of revenue as of January 1, 2018, which in turn generated additional deferred tax liabilities that ultimately reduced the Company's net deferred tax asset position. As the Company fully reserves its net deferred tax assets in the jurisdictions impacted by the adoption of ASC 606, this impact was offset by a corresponding reduction to the valuation allowance. Impact of New Revenue Guidance on Financial Statement Line Items The following table compares the reported condensed consolidated balance sheet as of June 30, 2018 to the pro-forma amounts had the previous guidance been in effect (in thousands): As Reported Balances without adoption of ASC 606 June 30, 2018 Adjustments June 30, 2018 December 31, 2017 (unaudited) (unaudited) (unaudited) Cash, cash equivalents, and restricted cash $ 133,586 $ $ 133,586 $ 69,633 Accounts receivable, net 534 534 1,186 Inventories, net 665 665 201 Investment, equity securities 40,508 40,508 — Prepaid expenses and other current assets 1,613 1,613 1,109 Fixed assets, net 4,233 4,233 4,292 Goodwill 3,580 3,580 3,580 Investment, at cost 2,300 2,300 3,542 Other noncurrent assets 4 4 9 Total assets $ 187,023 $ — $ 187,023 $ 83,552 Accounts payable and accrued expenses $ 14,006 $ $ 14,006 $ 16,585 Fair market value of financial instruments - current 1,334 1,334 1,952 Secured term debt - current 28,046 28,046 33,707 Deferred revenue, current — 4,400 4,400 4,400 Deferred revenue, long term — 17,417 17,417 19,617 Other long term liabilities 4,789 4,789 5,533 Total liabilities 48,175 21,817 69,992 81,794 Common stock, preferred stock, and additional paid-in capital 352,145 352,145 239,155 Accumulated deficit (213,297) (21,817) (235,114) (237,397) Total stockholders’ equity (deficit) 138,848 (21,817) 117,031 1,758 Total liabilities and stockholders’ equity $ 187,023 $ — $ 187,023 $ 83,552 The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. Total reported liabilities were $21.8 million less than the pro-forma balance sheet, which assumes the Company had continued to recognize revenues under ASC 605 as of June 30, 2018 . This is due to the recognition of the deferred revenue related to the AbbVie agreement upon adoption of ASC 606. The following summarizes the significant changes on the Company’s condensed consolidated statement of operations for the three months ended June 30, 2018 as a result of the adoption of ASC 606 on January 1, 2018, which assumes the Company had continued to recognize revenues under ASC 605 (in thousands): As Reported Three Months Ended Balances without adoption of ASC 606 Three Months Ended June 30, 2018 Adjustments June 30, 2018 June 30, 2017 (unaudited) (unaudited) (unaudited) (unaudited) Net sales $ 161 $ $ 161 $ 1,698 License and other revenue 198 1,100 1,298 1,259 Total revenue 359 1,100 1,459 2,957 Cost of sales and write-down of inventory 201 201 639 Research and development 10,178 10,178 10,056 Selling, general and administrative 8,812 8,812 9,902 Total other expense (income) (39,775) (39,775) 4,674 Income tax benefit (562) (562) — Net income (loss) attributable to common stockholders $ 21,505 $ 1,100 $ 22,605 $ (22,314) Deemed dividend on convertible preferred stock 491 491 469 Net income (loss) attributable to common stockholders $ 21,014 $ 1,100 $ 22,114 $ (22,783) Basic net income (loss) per share of common stock $ 0.25 $ 0.01 $ 0.26 $ (0.44) Diluted net income (loss) per share of common stock $ 0.24 $ 0.01 $ 0.25 $ (0.44) Weighted average basic shares of common stock outstanding 85,004,107 85,004,107 85,004,107 51,846,521 Weighted average diluted shares of common stock outstanding 90,164,248 90,164,248 90,164,248 51,846,521 The following summarizes the significant changes on the Company’s condensed consolidated statement of operations for the six months ended June 30, 2018 as a result of the adoption of ASC 606 on January 1, 2018, which assumes the Company had continued to recognize revenues under ASC 605 (in thousands): As Reported Six Months Ended Balances without adoption of ASC 606 Six Months Ended June 30, 2018 Adjustments June 30, 2018 June 30, 2017 (unaudited) (unaudited) (unaudited) (unaudited) Net sales $ 435 $ $ 435 $ 4,034 License and other revenue 357 2,200 2,557 4,489 Total revenue 792 2,200 2,992 8,523 Cost of sales and write-down of inventory 547 547 1,576 Research and development 19,958 19,958 18,503 Selling, general and administrative 17,062 17,062 20,020 Total other expense (income) (37,277) (37,277) 7,989 Income tax expense (benefit) (562) (562) 316 Net income (loss) attributable to common stockholders $ 1,064 $ 2,200 $ 3,264 $ (39,881) Deemed dividend on convertible preferred stock 981 981 938 Net income (loss) attributable to common stockholders $ 83 $ 2,200 $ 2,283 $ (40,819) Basic net income (loss) per share of common stock $ 0.00 $ 0.03 $ 0.03 $ (0.83) Diluted net income (loss) per share of common stock $ 0.00 $ 0.03 $ 0.03 $ (0.83) Weighted average basic shares of common stock outstanding 81,844,677 81,844,677 81,844,677 49,191,727 Weighted average diluted shares of common stock outstanding 82,216,399 82,216,399 82,216,399 49,191,727 The Company’s adoption of ASC 606 accelerated the recognition of revenue that was previously deferred under the AbbVie domestic license agreement, resulting in a cumulative effect adjustment to accumulated deficit on January 1, 2018. Therefore no further revenue will be recognized under the AbbVie domestic license agreement. Revenue under this agreement had previously been recognized under license and other revenue. The adoption of ASC 606 had no impact on the Company’s cash flows from operations. The aforementioned adjustments resulted in offsetting shifts in cash flows to net income ( loss ) and change in deferred revenue. Transaction Price Allocated to Future Performance Obligations ASC 606 requires that the Company disclose the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied as of June 30, 2018 . The guidance provides certain practical expedients that limit this requirement. The Company has various contracts that meet the following practical expedients provided by ASC 606: 1. The performance obligation is part of a contract that has an original expected duration of one year or less. 2. Revenue is recognized from the satisfaction of the performance obligations in the amount billable to the customer. 3. The variable consideration is allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied promise to transfer a distinct good or service that forms part of a single performance obligation. The Company does not have any performance obligations, outside of the practical expedients above, that have not yet been satisfied as of June 30, 2018 and therefore there is no transaction price allocated to future performance obligations under ASC 606. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2018 , the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 201 8-07 , Compensation – Stock Compensation , which expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees, except for specific exceptions. This ASU is effective for annual or any interim periods beginning after December 15, 201 8 . The Company does not expect the standard to have a significant impact on its consolidated financial statements, as the fair value of the Company’s awards to nonemployees is immaterial . In May 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-09, Compensation – Stock Compensation , which clarifies the guidance about which changes to the terms and conditions of a share-based payments award require an entity to apply modific ation accounting in Topic 718. This ASU is effective for annual or any interim periods beginning after December 15, 2017. The Company adopted this standard on January 1, 2018, which did not impact the consolidated financial statements as the fair value of the Company’s modified awards is immaterial . In January 2017, the FASB issued ASU No. 2017-04, Intangibles – Goodwill and Other (“ASU 2017-04”), which simplifies the subsequent measurement of goodwill by eliminating “Step 2” from the goodwill impairment test. Instead of performing Step 2 to determine the amount of an impairment charge, the fair value of a reporting unit will be compared with its carrying amount and an impairment charge will be recognized for the value by which the carrying amount exceeds the reporting unit’s fair value. ASU 2017-04 is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company does not expect the standard to have a significant impact on its consolidated financial statements . In November 2016, the FASB issued ASU No. 2016-18, “ Statement of Cash Flows (Topic 230): Restricted Cash ”. This ASU requires that the statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Entities will also be required to reconcile such total amounts on the balance sheet and disclose the nature of the restrictions. The Company adopted this standard on January 1, 2018, which did not have a significant impact on its consolidated financial statements as the Company’s restricted cash balances are immaterial. In February 2016, the FASB issued ASU No. 2016 ‑02, “ Leases ”. This ASU amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets. Current GAAP does not require lessees to recognize assets and liabilities arising from operating leases on the balance sheet. This guidance is effective for annual and interim reporting periods of public entities beginning after December 15, 2018, with early adoption permitted. The Company is in the early stages of implementation and expects to adopt this guidance when it becomes effective. The Company expects that adoption of this standard will have a material impact on the Company’s consolidated financial statements, primarily to the consolidated balance sheets and related disclosures, as a result of recognizing right-of-use assets and lease liabilities arising from its operating leases |
Summary of Significant Accoun25
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Summary of Significant Accounting Policies [Abstract] | |
Disaggregation of Revenue | Three Months Ended Six Months Ended June 30, 2018 June 30, 2018 Product sales $ 161 $ 435 Other revenue 198 357 Total revenue $ 359 $ 792 |
Adoption of New Accounting Pronouncements | As Reported Adjustments Adjusted (in thousands) December 31, AbbVie January 1, 2017 Agreement 2018 (unaudited) (unaudited) Cash, cash equivalents, and restricted cash $ 69,633 $ $ 69,633 Accounts receivable, net 1,186 1,186 Inventories, net 201 201 Prepaid expenses and other current assets 1,109 1,109 Fixed assets, net 4,292 4,292 Goodwill 3,580 3,580 Investments at cost 3,542 3,542 Other noncurrent assets 9 9 Total assets $ 83,552 $ $ 83,552 Accounts payable and accrued expenses $ 16,585 $ $ 16,585 Fair market value of financial instruments - current 1,952 1,952 Secured term debt - current 33,707 33,707 Deferred revenue, current 4,400 (4,400) — Deferred revenue, long term 19,617 (19,617) — Other long term liabilities 5,533 5,533 Total liabilities 81,794 (24,017) 57,777 Common stock, preferred stock, and additional paid-in capital 239,155 239,155 Accumulated deficit (237,397) 24,017 (213,380) Total stockholders’ equity 1,758 24,017 25,775 Total liabilities and stockholders’ equity $ 83,552 $ — $ 83,552 |
Initial Application Period Cumulative Effect Transition on Balance Sheet | As Reported Balances without adoption of ASC 606 June 30, 2018 Adjustments June 30, 2018 December 31, 2017 (unaudited) (unaudited) (unaudited) Cash, cash equivalents, and restricted cash $ 133,586 $ $ 133,586 $ 69,633 Accounts receivable, net 534 534 1,186 Inventories, net 665 665 201 Investment, equity securities 40,508 40,508 — Prepaid expenses and other current assets 1,613 1,613 1,109 Fixed assets, net 4,233 4,233 4,292 Goodwill 3,580 3,580 3,580 Investment, at cost 2,300 2,300 3,542 Other noncurrent assets 4 4 9 Total assets $ 187,023 $ — $ 187,023 $ 83,552 Accounts payable and accrued expenses $ 14,006 $ $ 14,006 $ 16,585 Fair market value of financial instruments - current 1,334 1,334 1,952 Secured term debt - current 28,046 28,046 33,707 Deferred revenue, current — 4,400 4,400 4,400 Deferred revenue, long term — 17,417 17,417 19,617 Other long term liabilities 4,789 4,789 5,533 Total liabilities 48,175 21,817 69,992 81,794 Common stock, preferred stock, and additional paid-in capital 352,145 352,145 239,155 Accumulated deficit (213,297) (21,817) (235,114) (237,397) Total stockholders’ equity (deficit) 138,848 (21,817) 117,031 1,758 Total liabilities and stockholders’ equity $ 187,023 $ — $ 187,023 $ 83,552 |
Initial Application Period Cumulative Effect Transition on Income Statement | As Reported Three Months Ended Balances without adoption of ASC 606 Three Months Ended June 30, 2018 Adjustments June 30, 2018 June 30, 2017 (unaudited) (unaudited) (unaudited) (unaudited) Net sales $ 161 $ $ 161 $ 1,698 License and other revenue 198 1,100 1,298 1,259 Total revenue 359 1,100 1,459 2,957 Cost of sales and write-down of inventory 201 201 639 Research and development 10,178 10,178 10,056 Selling, general and administrative 8,812 8,812 9,902 Total other expense (income) (39,775) (39,775) 4,674 Income tax benefit (562) (562) — Net income (loss) attributable to common stockholders $ 21,505 $ 1,100 $ 22,605 $ (22,314) Deemed dividend on convertible preferred stock 491 491 469 Net income (loss) attributable to common stockholders $ 21,014 $ 1,100 $ 22,114 $ (22,783) Basic net income (loss) per share of common stock $ 0.25 $ 0.01 $ 0.26 $ (0.44) Diluted net income (loss) per share of common stock $ 0.24 $ 0.01 $ 0.25 $ (0.44) Weighted average basic shares of common stock outstanding 85,004,107 85,004,107 85,004,107 51,846,521 Weighted average diluted shares of common stock outstanding 90,164,248 90,164,248 90,164,248 51,846,521 The following summarizes the significant changes on the Company’s condensed consolidated statement of operations for the six months ended June 30, 2018 as a result of the adoption of ASC 606 on January 1, 2018, which assumes the Company had continued to recognize revenues under ASC 605 (in thousands): As Reported Six Months Ended Balances without adoption of ASC 606 Six Months Ended June 30, 2018 Adjustments June 30, 2018 June 30, 2017 (unaudited) (unaudited) (unaudited) (unaudited) Net sales $ 435 $ $ 435 $ 4,034 License and other revenue 357 2,200 2,557 4,489 Total revenue 792 2,200 2,992 8,523 Cost of sales and write-down of inventory 547 547 1,576 Research and development 19,958 19,958 18,503 Selling, general and administrative 17,062 17,062 20,020 Total other expense (income) (37,277) (37,277) 7,989 Income tax expense (benefit) (562) (562) 316 Net income (loss) attributable to common stockholders $ 1,064 $ 2,200 $ 3,264 $ (39,881) Deemed dividend on convertible preferred stock 981 981 938 Net income (loss) attributable to common stockholders $ 83 $ 2,200 $ 2,283 $ (40,819) Basic net income (loss) per share of common stock $ 0.00 $ 0.03 $ 0.03 $ (0.83) Diluted net income (loss) per share of common stock $ 0.00 $ 0.03 $ 0.03 $ (0.83) Weighted average basic shares of common stock outstanding 81,844,677 81,844,677 81,844,677 49,191,727 Weighted average diluted shares of common stock outstanding 82,216,399 82,216,399 82,216,399 49,191,727 |
Net Income (Loss) per Share A26
Net Income (Loss) per Share Attributable to Common Stockholders (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Net Income (Loss) per Share Attributable to Common Stockholders [Abstract] | |
Computation of Basic and Diluted Net Income (Loss) per Share Attributable to Common Stockholders | Three Months Ended Six Months Ended June 30, June 30, 2018 2017 2018 2017 Numerator – basic and diluted: Net income (loss) available to common stockholders - basic $ 21,014 $ (22,783) $ 83 $ (40,819) Effect of Dilution: Warrants to purchase common stock (179) — — — Convertible preferred stock 491 — — — Net income (loss) available to common stockholders - diluted $ 21,326 $ (22,783) $ 83 $ (40,819) Denominator – basic and diluted: Weighted average common shares outstanding used to compute basic net income (loss) per share 85,004,107 51,846,521 81,844,677 49,191,727 Effect of Dilution: Options to purchase common stock 152,400 — 257,297 — Stock appreciation rights 69,333 — 114,425 Warrants to purchase common stock 1,504,941 — — — Convertible preferred stock 3,433,467 — — — Weighted average common shares outstanding used to compute diluted net income (loss) per share 90,164,248 51,846,521 82,216,399 49,191,727 Net income (loss) per share, basic $ 0.25 $ (0.44) $ 0.00 $ (0.83) Net income (loss) per share, diluted $ 0.24 $ (0.44) $ 0.00 $ (0.83) |
Anti-dilutive Amounts Excluded From Calculation of Diluted Net Income (Loss) per Share | Three Months Ended Six Months Ended June 30, June 30, 2018 2017 2018 2017 Options to purchase common stock 7,395,342 6,256,941 5,795,842 6,256,941 Warrants to purchase common stock 1,328,452 4,035,590 11,999,852 4,035,590 Convertible preferred stock — 3,269,968 3,433,467 3,269,968 Total shares of common stock equivalents 8,723,794 13,562,499 21,229,161 13,562,499 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Debt [Abstract] | |
Debt Payable | June 30, December 31, 2018 2017 Secured term debt due August 31, 2018 $ 28,046 $ 34,620 Total debt before fees, interest and debt discount/premium 28,046 34,620 Less: Deferred financing costs — (228) Debt discount — (1,030) Add: Debt premium — 345 Total debt payable $ 28,046 $ 33,707 Debt payable, current portion $ 28,046 $ 33,707 |
Minimum Payments Required on Outstanding Balances | 2015 Credit Agreement 2018 $ 28,046 $ 28,046 |
Interest Expense and Other Related Financing Costs | Three Months Ended Six Months Ended June 30, June 30, 2018 2017 2018 2017 Interest expense and other financing costs $ 939 $ 915 $ 1,890 $ 1,817 Amortization of deferred financing costs, debt discount and debt premium 399 515 913 1,213 Interest expense $ 1,338 $ 1,430 $ 2,803 $ 3,030 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Financial Instruments [Abstract] | |
Fair Values of Financial Instruments | Fair Value Measurement Using Significant Other Observable Inputs (Level 2) June 30, December 31, Description 2018 2017 Warrants $ 1,334 $ 1,952 Total $ 1,334 $ 1,952 |
Rollforward of Level 2 Investments | Significant Other Observable Inputs (Level 2) Balance at January 1, 2017 $ 3,305 Fair value of warrants modified in the Third Amendment (908) Issuance of warrants in private placement 1,651 Change in fair value of financial instruments (2,096) Balance at December 31, 2017 $ 1,952 Change in fair value of financial instruments (604) Exercise of warrants recorded as liability (14) Balance at June 30, 2018 $ 1,334 |
Warrants Outstanding | Warrants Weighted Average Exercise Price Balance, December 31, 2017 14,722,790 $ 5.70 Granted — — Exercised (134,847) 4.21 Forfeited (2,588,091) 4.50 Balance, June 30, 2018 11,999,852 $ 5.97 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Inventories [Abstract] | |
Schedule of Inventories | June 30, December 31, 2018 2017 Raw materials $ — $ — Work-in-process 579 80 Finished goods, net 86 121 Total inventories $ 665 $ 201 |
Fixed Assets (Tables)
Fixed Assets (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Fixed Assets [Abstract] | |
Fixed Assets | Useful Lives June 30, December 31, (Years) 2018 2017 Leasehold improvements 4 -8 $ 10,138 $ 10,120 Office equipment and furniture 3 -15 1,497 1,488 Machinery and laboratory equipment 3 -15 3,213 2,765 Software 1 -5 3,238 3,162 Construction-in-progress ̶̶̶̶ 501 408 18,587 17,943 Less accumulated depreciation and amortization (14,354) (13,651) Fixed assets, net $ 4,233 $ 4,292 |
Share-based Compensation (Table
Share-based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Share-based Compensation [Abstract] | |
Stock Options Outstanding | Options Outstanding Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (years) Aggregate Intrinsic Value (in thousands) Balance, December 31, 2017 8,496,872 $ 6.96 8.83 $ — Granted 80,924 7.75 Exercised — — Forfeited (493,954) 4.36 Balance, June 30, 2018 8,083,842 $ 7.13 8.21 $ 800,160 Options vested and exercisable, June 30, 2018 4,174,190 $ 9.51 7.45 $ — |
Weighted-average Fair Value of Stock Option Awards Granted | Six Months Ended Six Months Ended June 30, 2018 June 30, 2017 Weighted average fair value of grants $2.30 $2.62 Expected volatility 72.94% - 75.14% 74.48% -74.70% Risk-free interest rate 2.44% - 2.75% 1.87% -2.00% Expected life (years) 5.60 - 6.00 5.50 -5.75 years Expected dividend yield 0% 0% |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Accrued Expenses [Abstract] | |
Short-term Accrued Expenses | June 30, December 31, 2018 2017 Commission payable $ 2,395 $ 2,395 Compensation and benefits 592 758 Severance 741 1,122 Research and development 1,254 1,915 Other 2,993 2,387 Total Accrued Expenses $ 7,975 $ 8,577 |
Organization (Narrative) (Detai
Organization (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands | Jun. 18, 2018 | Jun. 30, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | Jan. 01, 2018 | Dec. 31, 2017 |
Accumulated deficit | $ (213,297) | $ (213,297) | $ (213,380) | $ (237,397) | ||
Working capital | 90,900 | 90,900 | ||||
Cash and cash equivalents | $ 131,470 | 131,470 | $ 26,226 | $ 67,517 | ||
Net proceeds from common stock | $ 105,761 | $ 22,094 | ||||
Common stock issued | 113,101,776 | 113,101,776 | 78,643,954 | |||
2018 Public Offering [Member] | ||||||
Gross proceeds from common stock | $ 113,200 | |||||
Net proceeds from common stock | 105,800 | |||||
Underwriting discounts and commissions | $ 7,400 | |||||
Common stock issued | 34,303,030 | 34,303,030 | ||||
Price per share of common stock | $ 3.30 | $ 3.30 | ||||
Secured Term Debt [Member] | 2015 Credit Agreement, Fourth Amendment [Member] | ||||||
Debt repaid | $ 4,700 | $ 4,700 |
Summary of Significant Accoun34
Summary of Significant Accounting Policies (Narrative) (Details) | Jun. 17, 2013USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($)segmentitem | Jun. 30, 2017USD ($) | Jan. 01, 2018USD ($) | Dec. 31, 2017USD ($) |
Summary Of Significant Accounting Policies [Line Items] | |||||||
Number of operating segments | segment | 1 | ||||||
Capitalized lease obligations | $ 208,000 | ||||||
Accumulated deficit | $ 213,297,000 | $ 213,297,000 | $ 213,380,000 | $ 237,397,000 | |||
Deferred revenue, current | 4,400,000 | ||||||
Liabilities | 48,175,000 | 48,175,000 | 57,777,000 | 81,794,000 | |||
Revenues | 359,000 | $ 2,957,000 | 792,000 | 8,523,000 | |||
Adjustments [Member] | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Accumulated deficit | 21,817,000 | 21,817,000 | (24,017,000) | ||||
Deferred revenue, current | 4,400,000 | 4,400,000 | (4,400,000) | ||||
Liabilities | 21,817,000 | 21,817,000 | $ (24,017,000) | ||||
Revenues | 1,100,000 | 2,200,000 | |||||
Balances Without Adoption of ASC 606 [Member] | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Accumulated deficit | 235,114,000 | 235,114,000 | |||||
Deferred revenue, current | 4,400,000 | 4,400,000 | |||||
Liabilities | 69,992,000 | 69,992,000 | |||||
Revenues | 1,459,000 | $ 2,992,000 | |||||
AbbVie, Inc. [Member] | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Number of performance obligations | item | 2 | ||||||
Upfront Payment | $ 64,000,000 | ||||||
Contingent milestone payments | 51,000,000 | ||||||
Deferred Revenue | $ 44,000,000 | $ 0 | $ 0 | 24,000,000 | |||
License agreement, term | 10 years | ||||||
License revenue | $ 1,100,000 | $ 2,200,000 | |||||
Deferred revenue, current | $ 4,400,000 | ||||||
Revenues | $ 0 |
Summary of Significant Accoun35
Summary of Significant Accounting Policies (Disaggregation of Revenue) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenues | $ 359,000 | $ 2,957,000 | $ 792,000 | $ 8,523,000 |
Product Sales [Member] | ||||
Revenues | 161,000 | 435,000 | ||
Other Revenue [Member] | ||||
Revenues | $ 198,000 | $ 357,000 |
Summary of Significant Accoun36
Summary of Significant Accounting Policies (Adoption of New Accounting Pronouncements) (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | Dec. 31, 2016 |
Cash and cash equivalents | $ 133,586 | $ 69,633 | $ 69,633 | $ 28,342 | $ 38,209 |
Accounts receivable, net | 534 | 1,186 | 1,186 | ||
Inventories, net | 665 | 201 | 201 | ||
Prepaid expenses and other current assets | 1,613 | 1,109 | 1,109 | ||
Fixed assets, net | 4,233 | 4,292 | 4,292 | ||
Goodwill | 3,580 | 3,580 | 3,580 | ||
Investment, at cost | 2,300 | 3,542 | 3,542 | ||
Other noncurrent assets | 4 | 9 | 9 | ||
Total assets | 187,023 | 83,552 | 83,552 | ||
Accounts payable and accrued expenses | 14,006 | 16,585 | 16,585 | ||
Fair market value of financial instruments | 1,334 | 1,952 | 1,952 | ||
Secured term debt - current | 28,046 | 33,707 | 33,707 | ||
Deferred revenue, current | 4,400 | ||||
Deferred revenue, long term | 19,617 | ||||
Other long term liabilities | 4,789 | 5,533 | 5,533 | ||
Total liabilities | 48,175 | 57,777 | 81,794 | ||
Common stock, preferred stock, and additional paid-in capital | 352,145 | 239,155 | 239,155 | ||
Accumulated deficit | (213,297) | (213,380) | (237,397) | ||
Total stockholders’ equity | 138,848 | 25,775 | 1,758 | ||
Total liabilities and stockholders’ equity | 187,023 | 83,552 | $ 83,552 | ||
Adjustments [Member] | |||||
Deferred revenue, current | 4,400 | (4,400) | |||
Deferred revenue, long term | 17,417 | (19,617) | |||
Total liabilities | 21,817 | (24,017) | |||
Accumulated deficit | (21,817) | 24,017 | |||
Total stockholders’ equity | (21,817) | $ 24,017 | |||
Balances Without Adoption of ASC 606 [Member] | |||||
Cash and cash equivalents | 133,586 | ||||
Accounts receivable, net | 534 | ||||
Inventories, net | 665 | ||||
Prepaid expenses and other current assets | 1,613 | ||||
Fixed assets, net | 4,233 | ||||
Goodwill | 3,580 | ||||
Investment, at cost | 2,300 | ||||
Other noncurrent assets | 4 | ||||
Total assets | 187,023 | ||||
Accounts payable and accrued expenses | 14,006 | ||||
Fair market value of financial instruments | 1,334 | ||||
Secured term debt - current | 28,046 | ||||
Deferred revenue, current | 4,400 | ||||
Deferred revenue, long term | 17,417 | ||||
Other long term liabilities | 4,789 | ||||
Total liabilities | 69,992 | ||||
Common stock, preferred stock, and additional paid-in capital | 352,145 | ||||
Accumulated deficit | (235,114) | ||||
Total stockholders’ equity | 117,031 | ||||
Total liabilities and stockholders’ equity | $ 187,023 |
Summary of Significant Accoun37
Summary of Significant Accounting Policies (Initial Application Period Cumulative Effect Transition on Balance Sheet) (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | Dec. 31, 2016 |
Cash and cash equivalents | $ 133,586 | $ 69,633 | $ 69,633 | $ 28,342 | $ 38,209 |
Accounts receivable, net | 534 | 1,186 | 1,186 | ||
Inventories, net | 665 | 201 | 201 | ||
Investment, equity securities | 40,508 | ||||
Prepaid expenses and other current assets | 1,613 | 1,109 | 1,109 | ||
Fixed assets, net | 4,233 | 4,292 | 4,292 | ||
Goodwill | 3,580 | 3,580 | 3,580 | ||
Investment, at cost | 2,300 | 3,542 | 3,542 | ||
Other noncurrent assets | 4 | 9 | 9 | ||
Total assets | 187,023 | 83,552 | 83,552 | ||
Accounts payable and accrued expenses | 14,006 | 16,585 | 16,585 | ||
Fair market value of financial instruments | 1,334 | 1,952 | 1,952 | ||
Secured term debt - current | 28,046 | 33,707 | 33,707 | ||
Deferred revenue, current | 4,400 | ||||
Deferred revenue, long term | 19,617 | ||||
Other long term liabilities | 4,789 | 5,533 | 5,533 | ||
Total liabilities | 48,175 | 57,777 | 81,794 | ||
Common stock, preferred stock, and additional paid-in capital | 352,145 | 239,155 | 239,155 | ||
Accumulated deficit | (213,297) | (213,380) | (237,397) | ||
Total stockholders’ equity | 138,848 | 25,775 | 1,758 | ||
Total liabilities and stockholders’ equity | 187,023 | 83,552 | $ 83,552 | ||
Adjustments [Member] | |||||
Deferred revenue, current | 4,400 | (4,400) | |||
Deferred revenue, long term | 17,417 | (19,617) | |||
Total liabilities | 21,817 | (24,017) | |||
Accumulated deficit | (21,817) | 24,017 | |||
Total stockholders’ equity | (21,817) | $ 24,017 | |||
Balances Without Adoption of ASC 606 [Member] | |||||
Cash and cash equivalents | 133,586 | ||||
Accounts receivable, net | 534 | ||||
Inventories, net | 665 | ||||
Investment, equity securities | 40,508 | ||||
Prepaid expenses and other current assets | 1,613 | ||||
Fixed assets, net | 4,233 | ||||
Goodwill | 3,580 | ||||
Investment, at cost | 2,300 | ||||
Other noncurrent assets | 4 | ||||
Total assets | 187,023 | ||||
Accounts payable and accrued expenses | 14,006 | ||||
Fair market value of financial instruments | 1,334 | ||||
Secured term debt - current | 28,046 | ||||
Deferred revenue, current | 4,400 | ||||
Deferred revenue, long term | 17,417 | ||||
Other long term liabilities | 4,789 | ||||
Total liabilities | 69,992 | ||||
Common stock, preferred stock, and additional paid-in capital | 352,145 | ||||
Accumulated deficit | (235,114) | ||||
Total stockholders’ equity | 117,031 | ||||
Total liabilities and stockholders’ equity | $ 187,023 |
Summary of Significant Accoun38
Summary of Significant Accounting Policies (Initial Application Period Cumulative Effect Transition on Income Statement) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Total revenue | $ 359,000 | $ 2,957,000 | $ 792,000 | $ 8,523,000 |
Cost of sales and write-down of inventory | 201,000 | 639,000 | 547,000 | 1,576,000 |
Research and development | 10,178,000 | 10,056,000 | 19,958,000 | 18,503,000 |
Selling, general and administrative | 8,812,000 | 9,902,000 | 17,062,000 | 20,020,000 |
Total other expense (income) | (39,775,000) | 4,674,000 | (37,277,000) | 7,989,000 |
Income tax expense (benefit) | (562,000) | (562,000) | 316,000 | |
Net income (loss) | 21,505,000 | (22,314,000) | 1,064,000 | (39,881,000) |
Deemed dividend on convertible preferred stock | 491,000 | 469,000 | 981,000 | 938,000 |
Net income (loss) attributable to common stockholders | $ 21,014,000 | $ (22,783,000) | $ 83,000 | $ (40,819,000) |
Basic net income (loss) per share of common stock | $ 0.25 | $ (0.44) | $ 0 | $ (0.83) |
Diluted net income (loss) per share of common stock | $ 0.24 | $ (0.44) | $ 0 | $ (0.83) |
Weighted average basic shares of common stock outstanding | 85,004,107 | 51,846,521 | 81,844,677 | 49,191,727 |
Weighted average diluted shares of common stock outstanding | 90,164,248 | 51,846,521 | 82,216,399 | 49,191,727 |
Net Sales [Member] | ||||
Total revenue | $ 161,000 | $ 1,698,000 | $ 435,000 | $ 4,034,000 |
License and Other Revenue [Member] | ||||
Total revenue | 198,000 | $ 1,259,000 | 357,000 | $ 4,489,000 |
Adjustments [Member] | ||||
Total revenue | 1,100,000 | 2,200,000 | ||
Net income (loss) | 1,100,000 | 2,200,000 | ||
Net income (loss) attributable to common stockholders | $ 1,100,000 | $ 2,200,000 | ||
Basic net income (loss) per share of common stock | $ 0.01 | $ 0.03 | ||
Diluted net income (loss) per share of common stock | $ 0.01 | $ 0.03 | ||
Weighted average basic shares of common stock outstanding | 85,004,107 | 81,844,677 | ||
Weighted average diluted shares of common stock outstanding | 90,164,248 | 82,216,399 | ||
Adjustments [Member] | License and Other Revenue [Member] | ||||
Total revenue | $ 1,100,000 | $ 2,200,000 | ||
Balances Without Adoption of ASC 606 [Member] | ||||
Total revenue | 1,459,000 | 2,992,000 | ||
Cost of sales and write-down of inventory | 201,000 | 547,000 | ||
Research and development | 10,178,000 | 19,958,000 | ||
Selling, general and administrative | 8,812,000 | 17,062,000 | ||
Total other expense (income) | (39,775,000) | (37,277,000) | ||
Income tax expense (benefit) | (562,000) | (562,000) | ||
Net income (loss) | 22,605,000 | 3,264,000 | ||
Deemed dividend on convertible preferred stock | 491,000 | 981,000 | ||
Net income (loss) attributable to common stockholders | $ 22,114,000 | $ 2,283,000 | ||
Basic net income (loss) per share of common stock | $ 0.26 | $ 0.03 | ||
Diluted net income (loss) per share of common stock | $ 0.25 | $ 0.03 | ||
Weighted average basic shares of common stock outstanding | 85,004,107 | 81,844,677 | ||
Weighted average diluted shares of common stock outstanding | 90,164,248 | 82,216,399 | ||
Balances Without Adoption of ASC 606 [Member] | Net Sales [Member] | ||||
Total revenue | $ 161,000 | $ 435,000 | ||
Balances Without Adoption of ASC 606 [Member] | License and Other Revenue [Member] | ||||
Total revenue | $ 1,298,000 | $ 2,557,000 |
Stockholders_ Equity (Narrative
Stockholders’ Equity (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2014 | Dec. 31, 2017 | |
Beneficial conversion feature on convertible preferred stock | $ 196 | $ 188 | ||||
Accrued dividends on preferred stock | $ 785 | 750 | ||||
IPO price per share | $ 12 | |||||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | |||
Common stock, shares authorized | 200,000,000 | 200,000,000 | 200,000,000 | |||
Shares outstanding | 113,101,776 | 113,101,776 | 78,643,954 | |||
Net proceeds from common stock | $ 105,761 | 22,094 | ||||
Common stock issued | 113,101,776 | 113,101,776 | 78,643,954 | |||
Class E Redeemable Convertible Units [Member] | ||||||
Transaction costs | $ 3,100 | |||||
Stock issued, shares | 3,514,859 | |||||
Convertible Preferred Stock [Member] | ||||||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | 10,000,000 | |||
Preferred stock issued | 30,000 | 30,000 | 30,000 | |||
Preferred stock outstanding | 30,000 | 30,000 | 30,000 | |||
Convertible preferred stock rate | 5.00% | |||||
Accrued dividends added to liquidation preference | $ 1,600 | 1,400 | ||||
Liquidation preference | $ 33,000 | $ 33,000 | ||||
Beneficial conversion feature, discount percentage | 20.00% | |||||
Accrued dividends on preferred stock | 400 | $ 400 | $ 800 | 800 | ||
Deemed dividends on preferred stock | $ 100 | $ 400 | $ 200 | $ 800 |
Net Income (Loss) per Share A40
Net Income (Loss) per Share Attributable to Common Stockholders (Computation of Basic and Diluted Net Income (Loss) per Share Attributable to Common Stockholders) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Net Income (Loss) per Share Attributable to Common Stockholders [Abstract] | ||||
Net loss available to common stockholders | $ 21,014,000 | $ (22,783,000) | $ 83,000 | $ (40,819,000) |
Warrants to purchase common stock | (179,000) | |||
Convertible preferred stock | 491,000 | |||
Net income (loss) available to common stockholders - diluted | $ 21,326,000 | $ (22,783,000) | $ 83,000 | $ (40,819,000) |
Weighted average common shares outstanding used to compute basic net income (loss) per share | 85,004,107 | 51,846,521 | 81,844,677 | 49,191,727 |
Options to purchase common stock | 152,400 | 257,297 | ||
Stock appreciation rights | 69,333 | 114,425 | ||
Warrants to purchase common stock | 1,504,941 | |||
Convertible preferred stock | 3,433,467 | |||
Weighted average common shares outstanding used to compute diluted net income (loss) per share | 90,164,248 | 51,846,521 | 82,216,399 | 49,191,727 |
Net income (loss) per share, basic | $ 0.25 | $ (0.44) | $ 0 | $ (0.83) |
Net income (loss) per share, diluted | $ 0.24 | $ (0.44) | $ 0 | $ (0.83) |
Net Income (Loss) per Share A41
Net Income (Loss) per Share Attributable to Common Stockholders (Anti-dilutive Amounts Excluded From Calculation of Diluted Net Income (Loss) per Share) (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total shares of common stock equivalents | 8,723,794 | 13,562,499 | 21,229,161 | 13,562,499 |
Options [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total shares of common stock equivalents | 7,395,342 | 6,256,941 | 5,795,842 | 6,256,941 |
Warrant [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total shares of common stock equivalents | 1,328,452 | 4,035,590 | 11,999,852 | 4,035,590 |
Convertible Preferred Stock [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total shares of common stock equivalents | 3,269,968 | 3,433,467 | 3,269,968 |
Debt (Narrative) (Details)
Debt (Narrative) (Details) | Jun. 18, 2018USD ($) | Jun. 30, 2018USD ($)$ / shares | Aug. 31, 2015USD ($)item | Jun. 30, 2018USD ($)$ / shares | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($)$ / sharesshares | Jun. 30, 2017USD ($) | Dec. 31, 2017USD ($) |
Debt Instrument [Line Items] | ||||||||
Warrants to purchase | $ 10,671,400 | |||||||
Debt discount | $ 1,030,000 | |||||||
Debt Instrument, Unamortized Premium | 345,000 | |||||||
Deferred financing costs | 228,000 | |||||||
Secured Term Debt [Member] | 2015 Credit Agreement [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Total borrowings | $ 35,000,000 | |||||||
Commitment Fee | $ 788,000 | |||||||
Monthly principal payments | $ 380,000 | |||||||
Maturity date | Jun. 17, 2018 | |||||||
Number of lenders | item | 2 | |||||||
Deferred financing costs | $ 1,300,000 | $ 1,300,000 | $ 1,300,000 | |||||
Unamortized deferred financing costs | 0 | 0 | $ 0 | $ 200,000 | ||||
Debt term | 3 years | |||||||
Interest expense | 100,000 | $ 200,000 | $ 200,000 | $ 300,000 | ||||
Deferred principal payments | 380,000 | 380,000 | 380,000 | |||||
Additional equity capital to be raised | $ 40,000,000 | $ 40,000,000 | $ 40,000,000 | |||||
Warrants exercise price | $ / shares | $ 10.20 | $ 10.20 | $ 10.20 | |||||
Secured Term Debt [Member] | 2015 Credit Agreement [Member] | Class A Warrants [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Warrants to purchase | $ 6,300,000 | $ 6,300,000 | ||||||
Debt discount | $ 5,400,000 | 5,400,000 | $ 5,400,000 | 5,400,000 | ||||
Loss on extinguishment of debt | $ 900,000 | 900,000 | ||||||
Secured Term Debt [Member] | 2015 Credit Agreement, Third Amendment [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt Instrument, Unamortized Premium | 900,000 | 900,000 | ||||||
Interest expense | $ 200,000 | 200,000 | $ 400,000 | 200,000 | ||||
Deferred principal payments | 380,000 | 380,000 | ||||||
Additional equity capital to be raised | $ 17,000,000 | $ 17,000,000 | ||||||
Warrants issued | shares | 617,651 | |||||||
Warrants exercise price | $ / shares | $ 4.50 | $ 4.50 | $ 4.50 | |||||
Expected proceeds if warrants are exercised | $ 2,800,000 | |||||||
Secured Term Debt [Member] | 2015 Credit Agreement, Fourth Amendment [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt repaid | $ 4,700,000 | $ 4,700,000 | ||||||
Secured Term Debt [Member] | London Interbank Offered Rate (LIBOR) [Member] | 2015 Credit Agreement [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument spread | 9.375% | |||||||
Secured Term Debt [Member] | London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member] | 2015 Credit Agreement [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument spread | 1.00% |
Debt (Debt Payable) (Details)
Debt (Debt Payable) (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Dec. 31, 2017 | |
Debt Instrument [Line Items] | ||
Total debt before fees, interest and debt discount/premium | $ 28,046 | $ 34,620 |
Less: Deferred financing costs | (228) | |
Debt discount | (1,030) | |
Add: Debt premium | 345 | |
Total debt payable | 28,046 | 33,707 |
Debt payable, current portion | 28,046 | 33,707 |
Secured Term Debt Due August 31, 2018 [Member] | Secured Term Debt [Member] | ||
Debt Instrument [Line Items] | ||
Total debt before fees, interest and debt discount/premium | $ 28,046 | $ 34,620 |
Maturity date | Aug. 31, 2018 |
Debt (Minimum Payments Required
Debt (Minimum Payments Required on Outstanding Balances) (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
Total debt payable | $ 28,046 | $ 33,707 |
2015 Credit Agreement [Member] | ||
Debt Instrument [Line Items] | ||
2,018 | 28,046 | |
Total debt payable | $ 28,046 |
Debt (Interest Expense and Othe
Debt (Interest Expense and Other Related Financing Costs) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Debt [Abstract] | ||||
Interest expense and other financing costs | $ 939,000 | $ 915,000 | $ 1,890,000 | $ 1,817,000 |
Amortization of deferred financing costs, debt discount and debt premium | 399,000 | 515,000 | 913,000 | 1,213,000 |
Interest expense | $ 1,338,000 | $ 1,430,000 | $ 2,803,000 | $ 3,030,000 |
Financial Instruments (Narrativ
Financial Instruments (Narrative) (Details) - USD ($) | Aug. 01, 2016 | Apr. 30, 2018 | Sep. 30, 2017 | Mar. 31, 2017 | Aug. 31, 2015 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 |
Change in fair value of liability | $ 900,000 | |||||||||
Change in fair value of warrant | $ (200,000) | $ 100,000 | $ 100,000 | (1,000,000) | ||||||
Long-term secured term debt fair value | 0 | 0 | $ 0 | |||||||
Warrants to purchase | $ 10,671,400 | |||||||||
Debt discount | 1,030,000 | |||||||||
IPO price per share | $ 12 | |||||||||
Warrants [Member] | ||||||||||
Risk-free interest rate | 2.70% | |||||||||
Expected life | 4 years 2 months 12 days | |||||||||
Volatility | 73.20% | |||||||||
Expected dividend yield | 0.00% | |||||||||
Equity Issued from Credit Agreement [Member] | ||||||||||
Fair value of liability | $ 1,300,000 | $ 1,300,000 | $ 1,200,000 | |||||||
2015 Credit Agreement [Member] | ||||||||||
Common units converted to warrants | 617,651 | |||||||||
Warrants exercised | 0 | 0 | 0 | |||||||
2015 Credit Agreement [Member] | Equity Issued from Credit Agreement [Member] | ||||||||||
Fair value of liability | $ 1,300,000 | $ 1,300,000 | ||||||||
Other Warrants [Member] | ||||||||||
Fair value of liability | 1,600,000 | 1,600,000 | ||||||||
Change in fair value of liability | $ (300,000) | $ 100,000 | (700,000) | $ 300,000 | ||||||
Strike price | $ 4.50 | |||||||||
Warrants reclassified from liabilities to equity | $ 22,800,000 | |||||||||
Warrants to purchase | $ 2,707,138 | |||||||||
Warrants exercised | 119,047 | |||||||||
Proceeds from warrants exercises | $ 500,000 | |||||||||
Warrants expired | 2,588,091 | |||||||||
Secured Term Debt [Member] | 2015 Credit Agreement [Member] | ||||||||||
Strike price | $ 10.20 | $ 10.20 | ||||||||
Secured Term Debt [Member] | Class A Warrants [Member] | 2015 Credit Agreement [Member] | ||||||||||
Warrants to purchase | $ 6,300,000 | $ 6,300,000 | ||||||||
Strike price, percent for calculation | 85.00% | |||||||||
Loss on extinguishment of debt | $ 900,000 | 900,000 | ||||||||
Debt discount | $ 5,400,000 | $ 5,400,000 | $ 5,400,000 | |||||||
Debt discount amortization term | 3 years | |||||||||
2017 Public Offering [Member] | ||||||||||
Warrants issued | 10,710,000 | |||||||||
Strike price | $ 3.35 | |||||||||
Warrant exercise price term | 5 years |
Financial Instruments (Fair Val
Financial Instruments (Fair Values of Financial Instruments) (Details) - Significant Other Observable Inputs (Level 2) [Member] - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Total financial instruments | $ 1,334 | $ 1,952 |
Warrants [Member] | ||
Total financial instruments | $ 1,334 | $ 1,952 |
Financial Instruments (Rollforw
Financial Instruments (Rollforward of Level 2 Investments) (Details) - Significant Other Observable Inputs (Level 2) [Member] - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2018 | Dec. 31, 2017 | |
Balance | $ 1,952 | $ 3,305 |
Fair value of warrants modified in the Third Amendment | (908) | |
Issuance of warrants in private placement | 1,651 | |
Change in fair value of financial instruments | (604) | (2,096) |
Exercise of warrants recorded as liability | (14) | |
Balance | $ 1,334 | $ 1,952 |
Financial Instruments (Warrants
Financial Instruments (Warrants Outstanding) (Details) | 6 Months Ended |
Jun. 30, 2018$ / sharesshares | |
Financial Instruments [Abstract] | |
Warrants, Outstanding | shares | 14,722,790 |
Warrants, Granted | shares | |
Warrants, Exercised | shares | (134,847) |
Warrants, Forfeited | shares | (2,588,091) |
Warrants, Outstanding | shares | 11,999,852 |
Warrants, Weighted Average Exercise Price, Outstanding | $ / shares | $ 5.70 |
Warrants, Weighted Average Exercise Price, Granted | $ / shares | |
Warrant, Weighted Average Exercise Price, Exercised | $ / shares | 4.21 |
Warrants, Weighted Average Exercise Price, Forfeited | $ / shares | 4.50 |
Warrants, Weighted Average Exercise Price, Outstanding | $ / shares | $ 5.97 |
Inventories (Narrative) (Detail
Inventories (Narrative) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Reserve for expirable inventory | $ 3,500,000 | $ 3,500,000 | $ 4,800,000 | ||
Expensed inventory | 98,000 | $ 373,000 | 245,000 | $ 743,000 | |
Work-in-process inventory | 579,000 | 579,000 | 80,000 | ||
KD034 [Member] | |||||
Work-in-process inventory | $ 600,000 | $ 600,000 | $ 100,000 |
Inventories (Schedule of Invent
Inventories (Schedule of Inventories) (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Inventories [Abstract] | |||
Raw materials | |||
Work-in-process | 579 | 80 | |
Finished goods, net | 86 | 121 | |
Total inventories | $ 665 | $ 201 | $ 201 |
Fixed Assets (Narrative) (Detai
Fixed Assets (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2018 | Jun. 30, 2017 | Mar. 31, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Fixed Assets [Abstract] | ||||||
Depreciation and amortization of fixed assets | $ 400 | $ 400 | $ 702 | $ 927 | ||
Unamortized computer software costs | 200 | 200 | $ 200 | |||
Amortization of computer software costs | $ 100 | $ 100 | $ 100 | $ 300 | ||
Fully depreciated assets disposed of | $ 2,100 |
Fixed Assets (Fixed Assets) (De
Fixed Assets (Fixed Assets) (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Line Items] | |||
Fixed assets, gross | $ 18,587 | $ 17,943 | |
Less accumulated depreciation and amortization | (14,354) | (13,651) | |
Fixed assets, net | 4,233 | $ 4,292 | 4,292 |
Leasehold Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Fixed assets, gross | 10,138 | 10,120 | |
Office Equipment and Furniture [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Fixed assets, gross | 1,497 | 1,488 | |
Machinery and Laboratory Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Fixed assets, gross | 3,213 | 2,765 | |
Software [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Fixed assets, gross | 3,238 | 3,162 | |
Construction-in-progress [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Fixed assets, gross | $ 501 | $ 408 | |
Minimum [Member] | Leasehold Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Useful Lives (Years) | 4 years | ||
Minimum [Member] | Office Equipment and Furniture [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Useful Lives (Years) | 3 years | ||
Minimum [Member] | Machinery and Laboratory Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Useful Lives (Years) | 3 years | ||
Minimum [Member] | Software [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Useful Lives (Years) | 1 year | ||
Maximum [Member] | Leasehold Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Useful Lives (Years) | 8 years | ||
Maximum [Member] | Office Equipment and Furniture [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Useful Lives (Years) | 15 years | ||
Maximum [Member] | Machinery and Laboratory Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Useful Lives (Years) | 15 years | ||
Maximum [Member] | Software [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Useful Lives (Years) | 5 years |
Goodwill (Narrative) (Details)
Goodwill (Narrative) (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2018 | Dec. 31, 2017 | |
Goodwill [Abstract] | ||
Change in goodwill | $ 0 | $ 0 |
Investment in MeiraGTx (Narrati
Investment in MeiraGTx (Narrative) (Details) - USD ($) | Jun. 12, 2018 | Jun. 30, 2018 | Apr. 30, 2015 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | Jun. 30, 2015 |
Common Stock, Shares, Outstanding | 113,101,776 | 113,101,776 | 113,101,776 | 78,643,954 | |||||
Unrealized gain on equity securities | $ 40,508,000 | $ 40,508,000 | |||||||
Equity securities fair value | $ 40,508,000 | 40,508,000 | 40,508,000 | ||||||
Accounts receivable, net | $ 534,000 | 534,000 | 534,000 | $ 325,000 | |||||
MeiraGTx Ltd. [Member] | |||||||||
Stock issued, shares | 5,000,000 | ||||||||
Common Stock, Shares, Outstanding | 27,184,132 | ||||||||
Sale of Stock, Price Per Share | $ 15 | ||||||||
Ownership percentage | 13.00% | ||||||||
Remaining payments on lease | $ 700,000 | ||||||||
License Agreement, MeiraGTx Ltd. [Member] | |||||||||
Service revenue to license | 200,000 | $ 200,000 | 300,000 | $ 300,000 | |||||
Cash payments for service revenue | 1,100,000 | 300,000 | |||||||
Accounts receivable, net | $ 0 | 0 | 0 | $ 900,000 | |||||
MeiraGTx Ltd. [Member] | |||||||||
Equity method investment, ownership percentage | 48.00% | ||||||||
Equity method investment, fair value | $ 24,000,000 | ||||||||
Equity method investment, gain based on the fair value | $ 24,000,000 | ||||||||
Equity method investment, gross profit (loss) | $ 0 | $ (1,200,000) | $ (5,700,000) | ||||||
Lease period | 5 years |
License Agreements (Narrative)
License Agreements (Narrative) (Details) - USD ($) | Sep. 13, 2012 | Jun. 30, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jan. 01, 2018 | Dec. 31, 2017 |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Accounts receivable, net | $ 534,000 | $ 534,000 | $ 534,000 | $ 325,000 | ||||
Cost method investment | 2,300,000 | 2,300,000 | 2,300,000 | $ 3,542,000 | 3,542,000 | |||
Loss on equity method investment | $ (3,095,000) | (1,242,000) | $ (5,729,000) | |||||
Accrued expenses | 7,975,000 | 7,975,000 | 7,975,000 | $ 8,577,000 | ||||
License Agreement, Dyax Corp. [Member] | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
License agreement, upfront fee / payment | $ 500,000 | |||||||
License Agreement, Limited Liability Company Oncon [Member] | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
License agreement, upfront fee / payment | 800,000 | |||||||
Contingent milestone payments | 0 | 0 | 0 | |||||
Revenue | 0 | $ 0 | 0 | $ 0 | ||||
Accrued expenses | $ 800,000 | $ 800,000 | $ 800,000 |
Share-based Compensation (Narra
Share-based Compensation (Narrative) (Details) $ / shares in Units, $ in Thousands | Apr. 03, 2018$ / sharesshares | Apr. 30, 2018shares | Oct. 31, 2017shares | Jun. 30, 2018USD ($)$ / sharesshares | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($)item$ / sharesshares | Jun. 30, 2017USD ($)$ / sharesshares | Dec. 31, 2017USD ($)$ / sharesshares | Jan. 01, 2018shares |
Performance Awards [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Unrecognized compensation expense | $ | $ 3,600 | $ 3,600 | |||||||
Weighted average period for recognition of compensation expense | 1 year 8 months 12 days | ||||||||
Share based compensation, options granted | 1,597,500 | 0 | |||||||
Weighted average exercise price of options granted during the period (per share) | $ / shares | $ 4.06 | $ 2.71 | |||||||
Share-based compensation, options outstanding, weighted average remaining contractual term (years) | 9 years 9 months 18 days | ||||||||
Options Outstanding, Units, Exercised | 0 | ||||||||
Expected dividend yield | 0.00% | ||||||||
Expected life | 6 years | ||||||||
Risk-free interest rate | 2.67% | ||||||||
Volatility | 74.50% | ||||||||
Number of performance goals | item | 3 | ||||||||
Performance period | 3 years | ||||||||
Options [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Share based compensation, options granted | 80,924 | 285,000 | |||||||
Weighted average exercise price of options granted during the period (per share) | $ / shares | $ 7.75 | $ 4.11 | |||||||
Share-based compensation, options outstanding, weighted average remaining contractual term (years) | 8 years 2 months 16 days | ||||||||
Share based compensation, options granted, aggregate intrinsic value | $ | 800,160 | $ 800,160 | |||||||
Options Outstanding, Units, Exercised | |||||||||
Weighted average grant date fair value of options granted during the period (per share) | $ / shares | $ 2.30 | $ 2.62 | |||||||
Stock Appreciation Rights [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Unrecognized compensation expense | $ | 2,000 | $ 2,000 | $ 2,500 | ||||||
Weighted average period for recognition of compensation expense | 2 years 4 months 24 days | 2 years 10 months 24 days | |||||||
Share based compensation, options granted | 1,040,000 | ||||||||
Weighted average exercise price of options granted during the period (per share) | $ / shares | $ 3.64 | ||||||||
Share-based compensation, options outstanding, weighted average remaining contractual term (years) | 9 years 6 months | ||||||||
Share based compensation, options granted, aggregate intrinsic value | $ | 400 | $ 400 | |||||||
Options Outstanding, Units, Exercised | 0 | ||||||||
Employees and Director [Member] | Options [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Share based compensation, options granted | 80,924 | ||||||||
Weighted average exercise price of options granted during the period (per share) | $ / shares | $ 7.75 | ||||||||
Tranche One [Member] | Performance Awards [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Percentage of options granted upon reaching goal | 33.33% | ||||||||
Tranche Two [Member] | Performance Awards [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Percentage of options granted upon reaching goal | 66.66% | ||||||||
2016 Equity Incentive Plan [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Increase in authorized shares as a percentage of common stock issued | 4.00% | ||||||||
Shares authorized for issuance | 8,523,147 | 11,668,905 | |||||||
Unrecognized compensation expense | $ | 7,800 | $ 7,800 | $ 13,300 | ||||||
Weighted average period for recognition of compensation expense | 1 year 9 months 18 days | 1 year 10 months 24 days | |||||||
Share based compensation, options granted | 8,083,842 | ||||||||
Weighted average exercise price of options granted during the period (per share) | $ / shares | $ 7.13 | ||||||||
Stock compensation expense | $ | $ 3,000 | $ 3,700 | $ 5,600 | $ 7,600 | |||||
2016 Equity Incentive Plan [Member] | Stock Appreciation Rights [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Share based compensation, options granted | 0 | ||||||||
2014 Long-Term Incentive Plan (“LTIP”) [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Equity instruments granted | 9,750 | 9,750 | |||||||
Equity instruments base price | $ / shares | $ 6 | ||||||||
Equity instrument payable, common stock value percent above grant price | 333.00% | ||||||||
Equity instrument payable, common stock value | $ / shares | $ 20 | ||||||||
2016 Employee Stock Purchase Plan [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Shares authorized for issuance | 2,551,180 | 2,551,180 | 1,801,180 | ||||||
Share based compensation, options granted | 22,958 | 10,594 | |||||||
Class A [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Unit price | $ / shares | $ 3.99 | $ 3.99 |
Share-based Compensation (Stock
Share-based Compensation (Stock Options Outstanding) (Details) - Options [Member] - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options Outstanding, Units, Beginning Balance | 8,496,872 | ||
Options Outstanding, Units, Granted | 80,924 | 285,000 | |
Options Outstanding, Units, Exercised | |||
Options Outstanding, Units, Forfeited | (493,954) | ||
Options Outstanding, Units, Ending Balance | 8,083,842 | 8,496,872 | |
Options Vested and Exercisable, Units | 4,174,190 | ||
Options Outstanding, Weighted Average Exercise Price, Beginning Balance | $ 6.96 | ||
Options Outstanding, Weighted Average Exercise Price, Granted | 7.75 | $ 4.11 | |
Options Outstanding, Weighted Average Exercise Price, Exercised | |||
Options Outstanding, Weighted Average Exercise Price, Forfeited | 4.36 | ||
Options Outstanding, Weighted Average Exercise Price, Ending Balance | 7.13 | $ 6.96 | |
Options Vested and Exercisable, Weighted Average Exercise Price | $ 9.51 | ||
Options Outstanding, Weighted Average Remaining Contractual Term (years) | 8 years 2 months 16 days | ||
Options Vested and Exercisable, Weighted Average Remaining Contractual Term (years) | 7 years 5 months 12 days | 8 years 9 months 29 days | |
Options Outstanding, Aggregate Intrinsic Value | $ 800,160 |
Share-based Compensation (Weigh
Share-based Compensation (Weighted-average Fair Value of Stock Option Awards Granted) (Details) - Options [Member] - $ / shares | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted average fair value of grants | $ 2.30 | $ 2.62 |
Expected dividend yield | 0.00% | 0.00% |
Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected volatility | 72.94% | 74.48% |
Risk-free interest rate | 2.44% | 1.87% |
Expected life | 5 years 7 months 6 days | 5 years 6 months |
Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected volatility | 75.14% | 74.70% |
Risk-free interest rate | 2.75% | 2.00% |
Expected life | 6 years | 5 years 9 months |
Accrued Expenses (Narrative) (D
Accrued Expenses (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2014 | Jun. 30, 2018 | |
Short-Term Accrued Expenses [Line Items] | |||
Severance cost | $ 1,122 | $ 741 | |
Accrued expenses | 8,577 | 7,975 | |
Other long term liabilities | 247 | 68 | |
Deferred revenue, current | 4,400 | ||
Research and development | 1,915 | 1,254 | |
Board of Directors Chairman [Member] | |||
Short-Term Accrued Expenses [Line Items] | |||
Severance expense | 1,200 | ||
Accrued expenses | 1,000 | ||
Other long term liabilities | 200 | ||
Class E Redeemable Convertible Units [Member] | |||
Short-Term Accrued Expenses [Line Items] | |||
Gross proceeds from issuance of redeemable convertible units | $ 40,400 | ||
Net proceeds from issuance of redeemable convertible units | 37,300 | ||
Payments of transition costs | $ 3,100 | ||
Stock issued, shares | 3,514,859 | ||
Third Party Investors [Member] | 2014 Stock Issuance [Member] | Class E Redeemable Convertible Units [Member] | |||
Short-Term Accrued Expenses [Line Items] | |||
Accrued liabilities current, commissions payable | $ 2,400 | $ 2,400 |
Accrued Expenses (Short-term Ac
Accrued Expenses (Short-term Accrued Expenses) (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Accrued Expenses [Abstract] | ||
Commission payable | $ 2,395 | $ 2,395 |
Compensation and benefits | 592 | 758 |
Severance | 741 | 1,122 |
Research and development | 1,254 | 1,915 |
Other | 2,993 | 2,387 |
Total accrued expenses | $ 7,975 | $ 8,577 |
Commitments (Narrative) (Detail
Commitments (Narrative) (Details) $ in Millions | Jun. 30, 2018USD ($) |
Future Discretionary Clinical Developments and Regulatory Agency Actions [Member] | |
Commitments [Line Items] | |
Additional contingent milestone payments | $ 400.4 |
Contingencies (Narrative) (Deta
Contingencies (Narrative) (Details) - USD ($) $ in Millions | Sep. 06, 2016 | Jul. 25, 2016 |
The Glodek Litigation [Member] | ||
Loss Contingencies [Line Items] | ||
Claim amount | $ 4 | $ 2.8 |
Related Party Transactions (Nar
Related Party Transactions (Narrative) (Details) | Dec. 31, 2016 |
Kadmon I [Member] | |
Related Party Transaction [Line Items] | |
Ownership percentage | 12.10% |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Income Tax Disclosure [Line Items] | |||||
Income tax expense (benefit) | $ (562,000) | $ (562,000) | $ 316,000 | ||
U.S. federal corporate tax rate | 21.00% | 35.00% | |||
License Agreement, Jinghua [Member] | |||||
Income Tax Disclosure [Line Items] | |||||
Income tax expense (benefit) | $ 0 | $ 0 | $ 0 | 300,000 | |
Milestone payment | $ 2,000,000 |
Uncategorized Items - kdmn-2018
Label | Element | Value |
Restricted Cash and Cash Equivalents | us-gaap_RestrictedCashAndCashEquivalents | $ 2,116,000 |
Restricted Cash and Cash Equivalents | us-gaap_RestrictedCashAndCashEquivalents | $ 2,116,000 |