Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 01, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2021 | |
Document Fiscal Year Focus | 2021 | |
Document Transition Report | false | |
Entity File Number | 001-37841 | |
Entity Registrant Name | Kadmon Holdings, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 27-3576929 | |
Entity Address, Address Line One | 450 East 29th Street | |
Entity Address, City or Town | New York | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 10016 | |
City Area Code | 833 | |
Local Phone Number | 900-5366 | |
Title of 12(b) Security | Common stock, par value $0.001 per share | |
Trading Symbol | KDMN | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 178,521,071 | |
Amendment Flag | false | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0001557142 | |
Current Fiscal Year End Date | --12-31 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 68,826,000 | $ 74,423,000 |
Marketable debt securities, available-for-sale | 182,821,000 | 49,435,000 |
Accounts receivable, net | 17,975,000 | 695,000 |
Inventories, net | 22,000 | 102,000 |
Prepaid expenses and other current assets | 2,918,000 | 2,082,000 |
Investment, equity securities | 9,196,000 | 10,564,000 |
Total current assets | 281,758,000 | 137,301,000 |
Fixed assets, net | 885,000 | 1,287,000 |
Right of use lease asset | 13,554,000 | 16,112,000 |
Goodwill | 3,580,000 | 3,580,000 |
Restricted cash | 2,117,000 | 2,117,000 |
Investment, at cost | 2,300,000 | 2,300,000 |
Other noncurrent assets | 71,000 | 13,000 |
Total assets | 304,265,000 | 162,710,000 |
Current liabilities: | ||
Accounts payable | 21,360,000 | 10,933,000 |
Accrued expenses | 15,238,000 | 11,534,000 |
PPP loan - current | 1,699,000 | |
Lease liability - current | 4,560,000 | 4,223,000 |
Warrant liabilities | 3,408,000 | 1,082,000 |
Total current liabilities | 44,566,000 | 29,471,000 |
Lease liability - noncurrent | 12,223,000 | 15,579,000 |
Deferred tax liability | 278,000 | 278,000 |
PPP loan - noncurrent | 1,359,000 | |
Convertible notes, net | 233,186,000 | |
Total liabilities | 290,253,000 | 46,687,000 |
Commitments and contingencies (Note 12) | ||
Stockholders’ equity: | ||
Convertible preferred stock, $0.001 par value; 10,000,000 shares authorized at September 30, 2021 and December 31, 2020; 28,708 shares issued and outstanding at September 30, 2021 and December 31, 2020. | 46,212,000 | 44,555,000 |
Common stock, $0.001 par value; 400,000,000 shares authorized at September 30, 2021 and December 31, 2020; 176,489,990 and 171,530,045 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively | 176,000 | 171,000 |
Additional paid-in capital | 505,250,000 | 515,429,000 |
Accumulated deficit | (538,107,000) | (444,104,000) |
Noncontrolling interest | 580,000 | |
Accumulated other comprehensive loss | (99,000) | (28,000) |
Total stockholders’ equity | 14,012,000 | 116,023,000 |
Total liabilities and stockholders’ equity | $ 304,265,000 | $ 162,710,000 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2021 | Dec. 31, 2020 |
Convertible preferred stock | $ 0.001 | |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 400,000,000 | 400,000,000 |
Common stock, shares issued | 176,489,990 | 171,530,045 |
Common stock, shares outstanding | 176,489,990 | 171,530,045 |
Convertible Preferred Stock [Member] | ||
Convertible preferred stock | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 28,708 | 28,708 |
Preferred stock, shares outstanding | 28,708 | 28,708 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Revenues: | ||||
Total revenue | $ 14,706,000 | $ 490,000 | $ 15,466,000 | $ 7,673,000 |
Cost of sales | 643,000 | 214,000 | 750,000 | 704,000 |
Write-down of inventory | 148,000 | 1,054,000 | ||
Gross profit | 14,063,000 | 128,000 | 14,716,000 | 5,915,000 |
Operating expenses: | ||||
Research and development | 18,850,000 | 17,268,000 | 52,649,000 | 46,658,000 |
Selling, general and administrative | 21,599,000 | 10,865,000 | 47,852,000 | 30,299,000 |
Total operating expenses | 40,449,000 | 28,133,000 | 100,501,000 | 76,957,000 |
Loss from operations | (26,386,000) | (28,005,000) | (85,785,000) | (71,042,000) |
Other (expense) income: | ||||
Interest income | 1,246,000 | 208,000 | 2,966,000 | 802,000 |
Interest expense | (2,492,000) | (8,000) | (6,218,000) | (13,000) |
Change in fair value of warrant liabilities | (2,674,000) | 602,000 | (2,326,000) | 469,000 |
Realized gain on equity securities | 4,274,000 | 19,784,000 | ||
Unrealized loss on equity securities | (1,619,000) | (3,254,000) | (1,368,000) | (32,759,000) |
PPP-Loan forgiveness | 3,091,000 | |||
Gain on extinguishment of obligations | 1,626,000 | 458,000 | 1,754,000 | |
Other expense | (1,118,000) | (49,000) | (2,584,000) | (50,000) |
Total other (expense) income | (6,657,000) | 3,399,000 | (5,981,000) | (10,013,000) |
Loss before income tax expense | (33,043,000) | (24,606,000) | (91,766,000) | (81,055,000) |
Income tax expense | 0 | 0 | 0 | 0 |
Net loss | (33,043,000) | (24,606,000) | (91,766,000) | (81,055,000) |
Less: Net income attributable to noncontrolling interest | 580,000 | 580,000 | ||
Less: Deemed dividend on convertible preferred stock | 571,000 | 543,000 | 1,657,000 | 1,578,000 |
Net loss attributable to common stockholders | $ (34,194,000) | $ (25,149,000) | $ (94,003,000) | $ (82,633,000) |
Basic and diluted net loss per share of common stock | $ (0.20) | $ (0.15) | $ (0.55) | $ (0.50) |
Weighted average basic and diluted shares of common stock outstanding | 173,443,975 | 169,310,056 | 172,373,463 | 165,107,295 |
Other comprehensive (income) loss: | ||||
Net unrealized (gain) loss on available-for-sale securities | $ (66,000) | $ 25,000 | $ 71,000 | $ 25,000 |
Other comprehensive (income) loss | (66,000) | 25,000 | 71,000 | 25,000 |
Comprehensive loss attributable to common shareholders | (34,128,000) | (25,174,000) | (94,074,000) | (82,658,000) |
Net Sales [Member] | ||||
Revenues: | ||||
Total revenue | 12,223,000 | 339,000 | 12,607,000 | 1,227,000 |
Other Revenue [Member] | ||||
Revenues: | ||||
Total revenue | $ 2,483,000 | $ 151,000 | $ 2,859,000 | $ 6,446,000 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive Loss [Member] | Noncontrolling Interest [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2019 | $ 42,433,000 | $ 160,000 | $ 456,211,000 | $ (333,069,000) | $ 165,735,000 | ||
Balance, Shares at Dec. 31, 2019 | 28,708 | 159,759,996 | |||||
Share-based compensation expense | 7,111,000 | 7,111,000 | |||||
Common stock issued in public offering, net | $ 11,000 | 48,430,000 | 48,441,000 | ||||
Common stock issued in public offering, net, shares | 11,060,786 | ||||||
Common stock issued under ESPP plan | 216,000 | 216,000 | |||||
Common stock issued under ESPP plan, shares | 98,840 | ||||||
Common stock issued for warrant exercises | 7,000 | 7,000 | |||||
Common stock issued for warrant exercises, shares | 2,777 | ||||||
Common stock issued for option and warrant exercises | 929,000 | 929,000 | |||||
Common stock issued for option and warrant exercises, shares | 298,193 | ||||||
Beneficial conversion feature on convertible preferred stock | $ 316,000 | (316,000) | |||||
Accretion of dividends on convertible preferred stock | 1,262,000 | (1,262,000) | |||||
Other comprehensive income or loss | (25,000) | ||||||
Net loss | (81,055,000) | (81,055,000) | |||||
Balance at Sep. 30, 2020 | $ 44,011,000 | $ 171,000 | 512,904,000 | $ (25,000) | (415,702,000) | 141,359,000 | |
Balance, Shares at Sep. 30, 2020 | 28,708 | 171,220,592 | |||||
Balance at Jun. 30, 2020 | $ 43,468,000 | $ 171,000 | 510,171,000 | (390,553,000) | 163,257,000 | ||
Balance, Shares at Jun. 30, 2020 | 28,708 | 171,097,067 | |||||
Share-based compensation expense | 2,453,000 | 2,453,000 | |||||
Common stock issued for option and warrant exercises | 280,000 | 280,000 | |||||
Common stock issued for option and warrant exercises, shares | 123,525 | ||||||
Beneficial conversion feature on convertible preferred stock | $ 109,000 | (109,000) | |||||
Accretion of dividends on convertible preferred stock | 434,000 | (434,000) | |||||
Other comprehensive income or loss | (25,000) | (25,000) | |||||
Net loss | (24,606,000) | (24,606,000) | |||||
Balance at Sep. 30, 2020 | $ 44,011,000 | $ 171,000 | 512,904,000 | (25,000) | (415,702,000) | 141,359,000 | |
Balance, Shares at Sep. 30, 2020 | 28,708 | 171,220,592 | |||||
Balance at Dec. 31, 2020 | $ 44,555,000 | $ 171,000 | 515,429,000 | (28,000) | (444,104,000) | 116,023,000 | |
Balance, Shares at Dec. 31, 2020 | 28,708 | 171,530,045 | |||||
Share-based compensation expense | 11,144,000 | 11,144,000 | |||||
Common stock issued under ESPP plan | 313,000 | 313,000 | |||||
Common stock issued under ESPP plan, shares | 94,420 | ||||||
Common stock issued for option and warrant exercises | $ 5,000 | 11,364,000 | $ 11,369,000 | ||||
Common stock issued for option and warrant exercises, shares | 4,865,525 | 1,252,894 | |||||
Payments for capped call transactions | (33,000,000) | $ (33,000,000) | |||||
Beneficial conversion feature on convertible preferred stock | $ 331,000 | (331,000) | |||||
Accretion of dividends on convertible preferred stock | 1,326,000 | (1,326,000) | |||||
Other comprehensive income or loss | (71,000) | (71,000) | |||||
Net loss | (92,346,000) | (91,766,000) | |||||
Balance at Sep. 30, 2021 | $ 46,212,000 | $ 176,000 | 505,250,000 | (99,000) | $ 580,000 | (538,107,000) | 14,012,000 |
Balance, Shares at Sep. 30, 2021 | 28,708 | 176,489,990 | |||||
Balance at Jun. 30, 2021 | $ 45,641,000 | $ 171,000 | 491,721,000 | (165,000) | (503,913,000) | 33,455,000 | |
Balance, Shares at Jun. 30, 2021 | 28,708 | 171,985,864 | |||||
Share-based compensation expense | 3,523,000 | 3,523,000 | |||||
Common stock issued for option and warrant exercises | $ 5,000 | 10,006,000 | 10,011,000 | ||||
Common stock issued for option and warrant exercises, shares | 4,504,126 | ||||||
Beneficial conversion feature on convertible preferred stock | $ 114,000 | (114,000) | |||||
Accretion of dividends on convertible preferred stock | 457,000 | (457,000) | |||||
Other comprehensive income or loss | 66,000 | 66,000 | |||||
Net loss | 580,000 | (33,623,000) | (33,043,000) | ||||
Balance at Sep. 30, 2021 | $ 46,212,000 | $ 176,000 | $ 505,250,000 | $ (99,000) | $ 580,000 | $ (538,107,000) | $ 14,012,000 |
Balance, Shares at Sep. 30, 2021 | 28,708 | 176,489,990 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Cash flows from operating activities: | ||||
Net loss | $ (33,043) | $ (24,606) | $ (91,766) | $ (81,055) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Amortization of premium and discounts on available-for-sale securities | 2,591 | 122 | ||
Amortization of debt discount | 792 | |||
Depreciation and amortization of fixed assets | 100 | 500 | 647 | 1,263 |
Non-cash operating lease cost | 2,798 | 2,638 | ||
Write-down of inventory | 148 | 1,054 | ||
Share-based compensation | 11,144 | 7,111 | ||
Change in fair value of warrant liabilities | 2,326 | (469) | ||
Net unrealized loss on equity securities | 1,368 | 12,975 | ||
Gain on settlement of obligations | (3,549) | (1,754) | ||
Changes in operating assets and liabilities: | ||||
Accounts receivable, net | (17,280) | 581 | ||
Inventories, net | 80 | (442) | ||
Prepaid expenses and other assets | (894) | (738) | ||
Accounts payable | 10,427 | 2,919 | ||
Lease liability | (3,259) | (2,951) | ||
Accrued expenses | 4,195 | (2,383) | ||
Net cash used in operating activities | (80,380) | (61,129) | ||
Cash flows from investing activities: | ||||
Purchases of investment debt securities | (185,152) | (44,661) | ||
Maturities of investment debt securities | 49,104 | |||
Purchases of fixed assets | (245) | (291) | ||
Proceeds from sale of equity securities | 19,784 | |||
Net cash used in investing activities | (136,293) | (25,168) | ||
Cash flows from financing activities: | ||||
Proceeds from issuance of common stock, net | 48,441 | |||
Proceeds from issuance of term debt | 3,057 | |||
Proceeds from issuance of convertible notes, net of issuance costs | 232,394 | |||
Payments for capped call transactions | (33,000) | |||
Proceeds from exercise of options and warrants | 11,369 | 936 | ||
Proceeds from issuance of ESPP shares | 313 | 216 | ||
Net cash provided by financing activities | 211,076 | 52,650 | ||
Net decrease in cash, cash equivalents and restricted cash | (5,597) | (33,647) | ||
Cash, cash equivalents and restricted cash, beginning of period | 76,540 | 141,713 | ||
Cash, cash equivalents and restricted cash, end of period | 70,943 | 108,066 | 70,943 | 108,066 |
Components of cash, cash equivalents and restricted cash | ||||
Cash and cash equivalents | 68,826 | 105,949 | 68,826 | 105,949 |
Restricted Cash | 2,117 | 2,117 | 2,117 | 2,117 |
Total cash, cash equivalents and restricted cash | 70,943 | 108,066 | 70,943 | 108,066 |
Supplemental cash flow disclosures: | ||||
Cash paid for interest | 4,326 | |||
Non-cash investing and financing activities: | ||||
PPP-Loan forgiveness | 3,091 | |||
Operating lease liabilities arising from obtaining right-of-use assets | 240 | |||
Operating cash flows paid for amounts included in the measurement of lease liabilities | 3,682 | 3,609 | ||
Unpaid fixed asset additions | 148 | |||
Preferred Stock [Member] | ||||
Non-cash investing and financing activities: | ||||
Beneficial conversion feature on convertible preferred stock | 114 | 109 | 331 | 316 |
Accretion of dividends on convertible preferred stock | $ 457 | $ 434 | $ 1,326 | $ 1,262 |
Organization
Organization | 9 Months Ended |
Sep. 30, 2021 | |
Organization [Abstract] | |
Organization | 1. Organization The Company Kadmon Holdings, Inc. (together with its subsidiaries, “Kadmon” or the “Company”) is a biopharmaceutical company engaged in the discovery, development and commercialization of small molecules and biologics to address significant unmet medical needs, with a near-term clinical focus on immune and fibrotic diseases as well as immuno-oncology. The Company leverages its multi - disciplinary research and development team members to identify and pursue a diverse portfolio of novel product candidates, both through in-licensing products and employing its small molecule and biologics platforms. In July 2021, the U.S. Food and Drug Administration (“FDA”) approved REZUROCK™ (belumosudil) 200 mg once daily (“QD”) for the treatment of adult and pediatric patients 12 years and older with chronic graft-versus-host disease (“cGVHD”) after failure of at least two prior lines of systemic therapy. REZUROCK was made available in the United States in August 2021. Pending Acquisition by Sanofi On September 7, 2021, Kadmon entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Sanofi, a French société anonyme (“Sanofi”), and Latour Merger Sub, Inc., a Delaware corporation and an indirect wholly owned subsidiary of Sanofi (“Merger Subsidiary”), providing for the merger of Merger Subsidiary with and into the Company (the “Merger”), with the Company surviving the Merger as a wholly owned subsidiary of Sanofi (the “Parent”). Capitalized terms not otherwise defined in this section “Pending Acquisition by Sanofi” have the meanings set forth in the Merger Agreement. The Company’s board of directors (the “Board”) has unanimously approved the Merger and the Merger Agreement and recommended that the stockholders of the Company adopt the Merger Agreement. At the Effective Time of the Merger: each share of common stock, par value $ 0.001 per share, of the Company (the “Company Common Stock”) issued and outstanding as of immediately prior to the Effective Time (other than Dissenting Shares, Company Common Stock held by the Company as treasury stock or owned by Parent, Merger Subsidiary or any Subsidiary of the Company or Parent) will be cancelled and cease to exist and automatically convert into the right to receive cash in an amount equal to $ 9.50 , without interest (the “Common Stock Merger Consideration”); each share of 5 % convertible preferred stock, par value $ 0.001 per share, of the Company (“Company Preferred Stock”) issued and outstanding as of immediately prior to the Effective Time (other than Dissenting Shares) will be cancelled and cease to exist and automatically convert into the right to receive cash in an amount equal to the greater of (i) the Stated Liquidation Preference Amount (as defined in the Company’s Certificate of Designation dated July 26, 2016) plus any dividends (whether or not earned or declared) accrued and unpaid thereon from the last Dividend Payment Date (as defined in the Certificate of Designation) through the closing date of the Merger and (ii) the amount that would be payable per share of Company Preferred Stock if such share of Company Preferred Stock had been converted to Company Common Stock immediately prior to the effective time of the Merger (the “Preferred Stock Merger Consideration”); all unvested options to purchase Company Common Stock (“Company Options”) which are outstanding immediately prior to the Effective Time will fully vest and become exercisable and, to the extent not exercised prior to the Effective Time, be canceled at the Effective Time with the former holder of such canceled Company Option becoming entitled to receive an amount in cash (without interest and subject to any applicable withholding or other taxes, or other amount as required by law) equal to (1) the number of shares of Company Common Stock subject to such Company Option multiplied by (2) the excess, if any, of the Common Stock Merger Consideration over the exercise price per share of such Company Option; provided that each Company Option with an exercise price per share equal to or greater than the Common Stock Merger Consideration will be canceled without consideration; all unvested stock appreciation rights granted by the Company (“Company SARs”) which are outstanding as of immediately prior to the Effective Time will fully vest and, to the extent not exercised prior to the Effective Time, be canceled at the Effective Time, with the former holder of such canceled Company SAR becoming entitled to receive an amount in cash (without interest and subject to any applicable withholding or other taxes, or other amount as required by law) equal to (A) the excess, if any, of the Common Stock Merger Consideration over the exercise price per share of such Company SAR multiplied by (B) the number of shares of Company Common Stock underlying such Company SAR; provided that each Company SAR with an exercise price per share equal to or greater than the Common Stock Merger Consideration will be canceled without consideration; and all unvested equity appreciation rights granted by the Company (“Company EARs”) which are outstanding as of immediately prior to the Effective Time will fully vest and be canceled at the Effective Time, with the former holder of such canceled Company EAR becoming entitled to receive an amount in cash (without interest and subject to any applicable withholding or other taxes, or other amount as required by law) equal to (A) the excess of the Common Stock Merger Consideration over the base price per share of such Company EAR multiplied by (B) the number of shares of Common Stock underlying such Company EAR; provided that each Company EAR with a base price per share equal to or greater than the Common Stock Merger Consideration will be canceled without consideration. Consummation of the Merger is subject to customary closing conditions, including, without limitation, the absence of certain legal impediments and approval by the holders of a majority of the voting power of the outstanding shares of Company Common Stock and Company Preferred Stock, voting on an as converted to Company Common Stock basis, entitled to vote on such matter. The Company has made representations and warranties in the Merger Agreement and has agreed to covenants regarding the operation of the business of the Company and the Company Subsidiaries prior to the Effective Time. The Company is also subject to customary restrictions on its ability to solicit alternative acquisition proposals from third parties and to provide non-public information to, and participate in discussions and engage in negotiations with, third parties regarding alternative acquisition proposals. The Merger Agreement also contains customary covenants requiring the Board, subject to certain exceptions, to recommend that the Company’s stockholders approve the Merger. Prior to the approval of the Merger by the Company’s stockholders, the Board may withhold, withdraw, qualify, or modify its recommendation that the Company’s stockholders approve the Merger because of a Company Intervening Event or may adopt, approve or recommend any Superior Proposal, subject to complying with notice and other specified conditions. The Merger Agreement contains certain termination rights for both the Company and Parent, including that, subject to certain limitations, (i) the Company or Parent may terminate the Merger Agreement if the Merger is not consummated by March 7, 2022, (ii) the Company and Parent may mutually agree to terminate the Merger Agreement, (iii) the Company may terminate the Merger Agreement to accept a Superior Proposal and (iv) Parent may terminate the Merger Agreement because the Board changes its recommendation to the Company stockholders with respect to approval of the Merger. The Company will be required to pay a termination fee of $ 60.1 million in the event that the Company terminates the Merger Agreement to accept a Superior Proposal or if Parent terminates the Merger Agreement because the Board changes its recommendation to the Company’s stockholders to approve the Merger. In addition, the Company will be required to pay the termination fee under specified circumstances if, within 12 months after the termination of the Merger Agreement, the Company enters into or consummates a Competing Acquisition Transaction. The foregoing description of the Merger Agreement and the transactions contemplated thereby does not purport to be complete and is subject to, and qualified in its entirety by reference to, the full text of the Merger Agreement, which is attached as an exhibit to our Current Report on Form 8-K filed with the SEC on September 8, 2021 and incorporated herein by reference. In connection with the approval of the Merger Agreement, the Board approved certain amendments to the employment agreements between the Company and each of Harlan W. Waksal, M.D., the Company’s President and Chief Executive Officer, Steven Meehan, the Company’s Executive Vice President and Chief Financial Officer, and Gregory S. Moss, the Company’s Executive Vice President, General Counsel and Corporate Secretary, Chief Compliance Officer (the “Employment Agreement Amendments”). The Employment Agreement Amendments provide for the payment of retention bonuses in the amount of $ 3.5 million to Dr. Waksal and $ 1.0 million to each of Mr. Meehan and Mr. Moss (the “Retention Bonuses”). The Retention Bonuses shall be paid as follows: (1) 25 % of the Retention Bonus shall be paid on the date the Merger Agreement is fully executed and (2) the remaining 75 % of the Retention Bonus will be earned at the Closing Date, subject to the executive’s continuous and active employment with the Company through such date, with certain exceptions. The Company incurred transaction-related costs of approximately $ 6.0 million for the three and nine months ended September 30, 2021, inclusive of $ 1.4 million related to the Employment Agreement Amendment, which are recorded as selling, general and administrative expense in the consolidated financial statements. COVID-19 Update The ongoing COVID-19 pandemic has severely impacted global economic activity and caused significant volatility in financial markets. While the Company’s financial condition, results of operations, cybersecurity and liquidity have not been materially impacted by the direct effects of the pandemic, the COVID-19 pandemic continues to evolve. The Company is continuing to monitor developments with respect to the COVID-19 pandemic and to make adjustments as needed to assist in protecting the safety of the Company’s employees and communities while continuing business activities. To date, implementation of these measures has not required material expenditures or significantly impacted these unaudited financial statements. The Company is continuing to monitor the potential impacts of COVID-19 on its operations and those of its partners, suppliers, customers, and regulators, including commercial and clinical drug supply chain continuity and commercial launch of REZUROCK. Notwithstanding the foregoing, the Company cannot precisely predict the impact that the COVID-19 pandemic will have in the future due to numerous uncertainties, including the severity of the disease and its variants, the duration of the pandemic, actions that may be taken by governmental authorities, the impact to the business of potential variations or disruptions in the Company’s supply chain. The Company will continue to closely monitor and evaluate the nature and extent of the impact of the COVID-19 pandemic to its business, consolidated results of operations, and financial condition. Liquidity The Company maintained cash, cash equivalents and marketable debt securities of $ 251.6 million at September 30, 2021. The Company had an accumulated deficit of $ 538.1 million and working capital of $ 237.2 million at September 30, 2021. On February 16, 2021, the Company issued $ 240.0 million aggregate principal amount of 3.625 % convertible senior notes due 2027 (the "Notes"), pursuant to an Indenture dated February 16, 2021, between the Company and U.S. Bank National Association, as trustee, in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act. On February 10, 2021, concurrently with the pricing of the Notes, the Company entered into privately negotiated capped call transactions (the “Capped Call Transactions”) with certain financial institutions. The Company used approximately $ 33.0 million of the net proceeds from the Notes offering to pay for the cost of the Capped Call Transactions (Note 5). The net proceeds from the offering were $ 199.4 million after deducting issuance costs and the cost of Capped Call Transactions. Based on the Company’s expectations for revenue, operating expenses, and its cash, cash equivalents and marketable debt securities available on hand at September 30, 2021, the Company believes it will continue to be able to advance its commercial launch efforts for REZUROCK ™ (belumosudil), advance certain of its other pipeline product candidates, including KD033, and provide for other working capital purposes . Although cash, cash equivalents and marketable debt securities available at September 30, 2021 is expected to execute the Company’s current business plans, it may not be sufficient to enable the Company to meet its long-term expected plans. The Company has sustained operating losses for the majority of its corporate history and the Company expects to continue to incur operating losses and negative cash flows until revenues reach a level sufficient to support ongoing operations. The Company’s future liquidity needs and ability to address those needs will be largely determined by the success of operations in regard to the successful commercialization of REZUROCK and the progression of its product candidates in the future, scope and magnitude of its commercial expenses and key development and regulatory events in the future. Management’s plans may include continuing to finance operations through the issuance of debt and sale of additional equity securities, monetization of assets, and expanding the Company’s commercial portfolio through the development of its current pipeline or through strategic collaborations. The Company has no commitments for any additional financing and may not be successful in its efforts to raise additional funds or achieve profitable operations. Any transactions that occur may contain covenants that restrict the ability of management to operate the business or may have rights, preferences or privileges senior to the Company’s common stock and may dilute current stockholders of the Company. The Company filed a shelf registration statement on Form S-3 (File No. 333-238969) on June 5, 2020, which was declared effective by the U.S. Securities and Exchange Commission (“SEC”) on June 16, 2020. Under this registration statement, the Company may sell, in one or more transactions, up to $ 300.0 million of common stock, preferred stock, debt securities, warrants, purchase contracts and units. The Company had not sold any securities pursuant to this registration statement as of September 30, 2021. The Company entered into a Sales Agreement with Cantor Fitzgerald & Co. in August 2017 under which the Company could sell up to $ 50.0 million in shares of its common stock in one or more placements at prevailing market prices for its common stock (the “ATM Program”). The Company has not sold any securities pursuant to this ATM Program as of September 30, 2021. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2021 | |
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 its products and the regulatory environment in which the Company operates. The accompanying consolidated financial statements, which include the accounts of Kadmon Holdings, Inc. and its domestic and international subsidiaries have been prepared in accordance with a ccounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and pursuant to the rules and regulations of the SEC. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the Company’s opinion, the financial statements include all adjustments (consisting of normal recurring adjustments) and disclosures considered necessary in order to make the financial statements not misleading. Operating results for the three and nine months ended September 30, 2021 are not necessarily indicative of the final results that may be expected for the year ending December 31, 2021. These unaudited financial statements should be read in conjunction with the audited financial statements included in Item 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on March 4, 2021. Use of Estimates The preparation of financial statements in accordance 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. The most significant estimates are related to share-based compensation (Note 10) and the accrual of research and development and clinical trial expenses (Note 11). Critical Accounting Policies The Company’s significant accounting policies are disclosed in the audited financial statements included in Item 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on March 4, 2021. Since the date of such financial statements, there have been no changes or updates to the Company’s significant accounting policies, other than those described below. Cash, Cash Equivalents and Marketable Debt Securities The Company considers all highly liquid securities with an original or remaining maturity of three months or less at the time of acquisition to be cash equivalents. The Company determines the appropriate classification of its investments in debt securities at the time of purchase. All of the Company’s debt securities are classified as available-for-sale and are reported as short-term or long-term based on maturity dates and whether such assets are available for use in current operations and are reasonably expected to be realized in cash or consumed during the normal cycle of business. Our available-for-sale debt securities generally have contractual maturity dates between six and eighteen months. The following tables summarize the Company’s cash, cash equivalents and marketable debt securities as of September 30, 2021 and December 31, 2020 (in thousands): September 30, 2021 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash and cash equivalents: Cash and money market funds $ 68,826 $ — $ — 68,826 Total cash and cash equivalents 68,826 — — 68,826 Marketable debt securities: Corporate debt securities 182,920 11 ( 110 ) 182,821 Total marketable debt securities 182,920 11 ( 110 ) 182,821 Total cash, cash equivalents and marketable debt securities $ 251,746 $ 11 $ ( 110 ) $ 251,647 December 31, 2020 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash and cash equivalents: Cash and money market funds $ 71,382 $ — $ — 71,382 Corporate debt securities 3,041 3,041 Total cash and cash equivalents 74,423 — — 74,423 Marketable debt securities: Corporate debt securities 49,463 4 ( 32 ) 49,435 Total marketable debt securities 49,463 4 ( 32 ) 49,435 Total cash, cash equivalents and marketable debt securities $ 123,886 $ 4 $ ( 32 ) $ 123,858 At September 30, 2021, the Company had invested in 29 available-for-sale marketable debt securities that were in an unrealized loss position for less than one year and no securities in an unrealized loss position for more than one year. The aggregate fair value of debt securities in an unrealized loss position at September 30, 2021 was $ 133.2 million. The unrealized losses of $ 0.1 million related to these corporate debt securities were included in accumulated other comprehensive loss as of September 30, 2021. Unrealized losses on corporate debt securities have not been recognized into income because the issuers’ bonds are of high credit quality (rated A3/A- or higher), it is likely that management will not be required to sell the securities prior to their anticipated recovery, and the decline in fair value is largely due to market conditions and/or changes in interest rates. The issuers continue to make timely interest payments on the bonds. The fair value is expected to recover as the bonds approach maturity and the Company does not believe any unrealized losses represent other-than-temporary impairments. Convertible Notes Transaction In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2020-06, “ Debt with Conversion and Other Options and Derivatives and Hedging - Contracts in Entity’s Own Equity ” (“ASU 2020-06”) to address the complexity associated with applying GAAP to certain financial instruments with characteristics of liabilities and equity. This ASU includes amendments to the guidance on convertible instruments and the derivative scope exception for contracts in an entity’s own equity and simplifies the accounting for convertible instruments by eliminating the cash conversion accounting model for convertible instruments. The Company early adopted ASU 2020-06 effective January 1, 2021, and the standard did not have a significant impact on its consolidated financial statements. By adopting ASU 2020-06, the Company eliminates the separation model for convertible debt and the requirement to separately present in equity an embedded conversion feature in such debt. In February 2021, the Company issued $ 240.0 million in aggregate principal of 3.625 % convertible senior notes due February 15, 2027 (Note 5). The Company accounts for the convertible notes wholly as debt in accordance with FASB Accounting Standards Codification (“ASC”) 470, Debt . The Company does not separately account for the liability and equity components of convertible notes transactions that can be settled in cash by allocating the proceeds from issuance between the liability component and the embedded conversion option. The Company recognizes amortization of the debt discount related to issuance costs as interest expense using the effective interest method. In February 2021, the Company purchased capped call options from financial institutions to minimize the impact of potential dilution of Kadmon common stock upon conversion of the convertible notes. The capped call options meet the definition of a derivative in accordance with FASB ASC 815, Derivatives and Hedging (“ASC 815”), however, qualify for derivative scope exception under ASC 815 for instruments indexed to a company’s own stock. Accordingly, the premiums for the capped call options were recorded as additional paid-in capital on the Company’s consolidated balance sheet as the options are settleable in Kadmon common stock at the election of the Company. See Note 5 for additional information. Embedded Derivatives The Company accounts for derivative financial instruments as either equity or liabilities in accordance with ASC 815, based on the characteristics and provisions of each instrument. Embedded derivatives are required to be bifurcated from the host instruments and recorded at fair value if the derivatives are not clearly and closely related to the host instruments on the date of issuance. The Company’s convertible notes (Note 5) contain certain features that, in accordance with ASC 815, are not clearly and closely related to the host instrument and represent derivatives that are required to be re-measured at fair value each reporting period. The Company determined that the estimated fair value of the derivatives at issuance and as of September 30, 2021 were not material based on a scenario-based cash flow model that uses unobservable inputs that reflect the Company’s own assumptions. Should the Company’s assessment of the probabilities around these scenarios change, including due to changes in market conditions, there could be a change to the fair value. Revenue Recognition The Company recognizes revenue in accordance with FASB ASC 606, Revenue from Contracts with Customers , 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 Company’s revenues have primarily been generated through product sales, collaborative research, development and commercialization license agreements, and other service agreements. The following table summarizes revenue from contracts with customers for the three and nine months ended September 30, 2021 and 2020 (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 Product sales, net REZUROCK $ 12,215 $ — $ 12,215 $ — Other 8 339 392 1,227 Total product sales, net $ 12,223 $ 339 $ 12,607 $ 1,227 License revenue 2,000 — 2,000 6,000 Other revenue 483 151 859 446 Total revenue $ 14,706 $ 490 $ 15,466 $ 7,673 Product Sales These contracts typically include a single promise to deliver a fixed amount of product to a customer with payment due within 30 - 60 days of shipment, with a prompt pay discount for payments made within the terms of the applicable contract. 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, which generally occurs upon delivery. The timing of revenue recognition may differ from the timing of invoicing to customers. The Company has not recognized any assets for costs to obtain or fulfill a contract with a customer as of September 30, 2021. On July 16, 2021, the FDA approved REZUROCK for the treatment of adult and pediatric patients 12 years and older with cGVHD after failure of at least two prior lines of systemic therapy. The Company expects REZUROCK to be its principal source of product sales in the future. For REZUROCK, the Company will classify payments to its customers for certain services provided by its customers as reductions to revenue. The Company sells REZUROCK to patients through a limited distribution network of specialty pharmacy and specialty distributors in the United States. Net revenue from sales of REZUROCK will be recorded at net selling price (transaction price), which includes estimates of variable consideration for which reserves are established for (i) estimated government rebates, such as Medicaid and Medicare Part D reimbursements, and estimated managed care rebates, (ii) estimated chargebacks, (iii) estimated costs of co-payment assistance programs and (iv) product returns. These reserves are based on the amounts earned or to be claimed on the related sales and are classified as reductions of accounts receivable or as a current liability. Where appropriate, these estimates take into consideration items such as the Company’s current contractual and statutory requirements and forecasted customer buying and payment patterns. Overall, these reserves reflect the Company’s best estimates of the amount of consideration to which it is entitled based on the terms of the applicable contract. The amount of variable consideration included in the transaction price may be constrained and is included in the net sales price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. Actual amounts of consideration ultimately received may differ from the Company's estimates. If actual results in the future vary from estimates, the Company will adjust these estimates, which would affect net product revenue and earnings in the period such variances become known. Government and Managed Care Rebates . The Company contracts with government agencies and managed care organizations or, collectively, third-party payors, so that REZUROCK will be eligible for purchase by, or partial or full reimbursement from, such third-party payors. The Company estimates the rebates it will provide to third-party payors and deducts these estimated amounts from total gross product revenues at the time the revenues are recognized. These reserves are recorded in the same period in which the revenue is recognized, resulting in a reduction of product revenue and the establishment of a current liability. The Company estimates the rebates that it will provide to third-party payors based upon (i) the Company's contracts with these third-party payors, (ii) the government mandated discounts applicable to government-funded programs, (iii) a range of possible outcomes that are probability-weighted for the estimated payor mix, and (iv) product distribution information obtained from the Company's distribution network of specialty pharmacy and specialty distributors. During the three and nine months ended September 30, 2021, the Company recognized $ 0.7 million of rebates expense as a reduction to revenue related to REZUROCK and has recorded a current liability of $ 0.7 million in the consolidated balance sheets as of September 30, 2021. Chargebacks . Chargebacks are discounts that occur when certain contracted customers, pharmacy benefit managers, insurance companies, government programs and group purchasing organizations purchase directly from the Company’s specialty distributors. These customers purchase the Company’s product under contracts negotiated between them and the Company’s specialty distributors. The specialty distributor, in turn, charges back to the Company the difference between the price the specialty distributor paid and the negotiated price paid by the contracted customers, which may be higher or lower than the specialty distributor’s purchase price from the Company. The Company estimates chargebacks and adjusts gross product revenues and accounts receivable based on the estimates at the time revenues are recognized. During the three and nine months ended September 30, 2021, the Company recognized $ 0.8 million of chargebacks expense as a reduction to revenue related to REZUROCK and has recorded a current liability of $ 0.2 million in the consolidated balance sheet as of September 30, 2021. Co-payment assistance and patient assistance programs . Patients who have commercial insurance and meet certain eligibility requirements may receive co-payment assistance. Based upon the terms of the program and co-payment assistance utilization reports received from the Company’s hub services provider, the Company is able to estimate the co-payment assistance amounts, which are recorded in the same period in which the related revenue is recognized, resulting in a reduction of product revenue. The Company also offers a patient assistance program that provides free drug product, for a limited period of time, to allow a patient’s insurance coverage to be established. Based on patient assistance program utilization reports provided by the Company’s hub services provider, the Company records gross revenue of the product provided and a full reduction of the revenue amount for the free drug discount. During the three and nine months ended September 30, 2021, the Company recognized $ 0.1 million of co-payments assistance expense as a reduction to revenue related to REZUROCK and has recorded a current liability of $ 0.1 million in the consolidated balance sheet as of September 30, 2021. Product returns . The Company provides contractual return rights to its customers, based on product dating and in instances where the product is damaged or defective. Non-acceptance of shipped drug product is reflected as a reversal of sales in the period in which the sales were originally recorded. Reserves for estimated returns are recorded as a reduction of revenue in the period that the related revenue is recognized, as well as a liability. Estimates of returns are based on third party analogs of recent drug product launches and quantitative information provided by the Company's distribution network of specialty pharmacies and specialty distributors. During the three and nine months ended September 30, 2021, the Company recognized $ 0.2 million of returns expense as a reduction to revenue related to REZUROCK and has recorded a liability of $ 0.2 million in the consolidated balance sheet as of September 30, 2021. License Revenue License revenue in 2021 consists of a milestone payment earned pursuant to a strategic partnership entered into with BioNova Pharmaceuticals Ltd. to develop belumosudil (KD025) in China. The transaction price of $ 2.0 million was allocated to the single combined performance obligation under the contract and the performance obligation was completed during the third quarter of 2021. License revenue in 2020 consists of a milestone payment earned pursuant to a joint venture and license agreement entered into with Meiji Seika Pharma Co., Ltd (“Meiji”) to develop belumosudil (KD025) in Japan. The transaction price of $ 6.0 million was allocated to the single combined performance obligation under the contract and the performance obligation was completed during the first quarter of 2020. There are no performance obligations that have not yet been satisfied and there is no transaction price allocated to future performance obligations as of September 30, 2021. Other Revenue The other revenue generated by the Company is primarily related to a sublease agreement with MeiraGTx Holdings plc (“MeiraGTx”). The Company recognizes revenue related to sublease agreements as they are performed. Cost of Sales Cost of product sales includes the cost of producing and distributing inventories that are related to product revenue during the respective period, including royalties owed under license agreements (Note 9). In addition, shipping and handling costs for product shipments are recorded as incurred. Concentration and Credit Risks Risks from Third-Party Manufacturing and Distribution Concentration The Company relies on single source manufacturers for active pharmaceutical ingredient and finished drug product manufacturing of product candidates in development and on a limited number of distributors for distribution of approved drug products. Delays in the manufacture or distribution of any product could adversely impact the commercial revenue and future inventory procurement of the Company’s product candidates. Credit Risk The Company’s receivables from sales of REZUROCK are primarily due from six customers, accounting for approximately 96 % of receivables from sales of REZUROCK and approximately 64 % of total receivables, resulting in a concentration of credit risk. Sales of REZUROCK occur once an order of product has been received by the specialty pharmacy or specialty distributor customer. Aditionally, the Company’s receivables include approximately $ 6.4 million due from one customer related to a collaboration agreement. This receivable accounts for approximately 36 % of total receivables, resulting in a credit risk. Related Party Transactions The Company’s related party transactions are disclosed in the audited financial statements included in “Note 2. Summary of Significant Accounting Policies–Related Party Transactions” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. Since the date of such financial statements, there have been no changes to the Company’s related party transactions. Recent Accounting Pronouncements In December 2019, the FASB issued ASU No. 2019-12, “Income Taxes: Simplifying the Accounting for Income Taxes” , which removes certain exceptions for recognizing deferred taxes for investments, performing intraperiod allocation and calculating income taxes in interim periods. The Company adopted this standard on January 1, 2021, and the standard did not have a significant impact on its consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, “Measurement of Credit Losses on Financial Instruments” , to require financial assets carried at amortized cost to be presented at the net amount expected to be collected based on historical experience, current conditions and forecasts. For smaller reporting companies, the ASU is effective for interim and annual periods beginning after December 15, 2022, with early adoption permitted. Adoption of the ASU is on a modified retrospective basis. The Company does not expect this guidance to have a material impact on its financial statements. |
Stockholders_ Equity
Stockholders’ Equity | 9 Months Ended |
Sep. 30, 2021 | |
Stockholders’ Equity [Abstract] | |
Stockholders’ Equity | 3. Stockholders’ Equity 5% Convertible Preferred Stock The Company had 28,708 shares of 5 % convertible preferred stock outstanding at September 30, 2021, which shares convert into shares of the Company’s common stock at a 20 % discount to the initial public offering price per share of common stock in the Company’s initial public offering of $ 12.00 per share, or $ 9.60 per share. The stated liquidation preference amount on the 5 % convertible preferred stock totaled $ 36.5 million at September 30, 2021. Common Stock The Company’s restated certificate of incorporation authorizes the issuance of up to 400,000,000 shares of the Company’s common stock, par value $ 0.001 per share. |
Net Loss per Share Attributable
Net Loss per Share Attributable to Common Stockholders | 9 Months Ended |
Sep. 30, 2021 | |
Net Loss per Share Attributable to Common Stockholders [Abstract] | |
Net Loss per Share Attributable to Common Stockholders | 4. Net Loss per Share Attributable to Common Stockholders Basic net loss attributable to common stockholders per share is computed by dividing the net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding for the period. Because the Company has reported a net loss for each period presented, diluted net loss per share of common stock is the same as basic net loss per share of common stock for the three and nine months ended September 30, 2021 and 2020. The following table summarizes the computation of basic and diluted net loss per share attributable to common stockholders of the Company (in thousands, except share and per share amounts) : Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 Numerator – basic and diluted: Net loss available to common stockholders - basic and diluted $ ( 34,194 ) $ ( 25,149 ) $ ( 94,003 ) $ ( 82,633 ) Denominator – basic and diluted: Weighted average shares of common stock outstanding used to compute basic and diluted net loss per share 173,443,975 169,310,056 172,373,463 165,107,295 Net loss per share, basic and diluted $ ( 0.20 ) $ ( 0.15 ) $ ( 0.55 ) $ ( 0.50 ) The amounts in the table below were excluded from the calculation of diluted net loss per share, due to their anti-dilutive effect: Three and Nine Months Ended September 30, 2021 2020 Options to purchase common stock 24,310,370 17,357,285 Warrants to purchase common stock 6,261,586 11,917,052 Convertible preferred stock 3,851,033 3,667,651 Convertible notes 34,507,560 — Total shares of common stock equivalents 68,930,549 32,941,988 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2021 | |
Debt [Abstract] | |
Debt | 5. Debt 3.625% Convertible Senior Notes Due in 2027 In February 2021, the Company issued $ 240.0 million in aggregate principal of 3.625 % convertible senior notes due February 15, 2027 (the "Notes") through a private placement to qualified institutional buyers pursuant to Rule 144A of the Securities Act of 1933, as amended. The debt issuance costs of $ 7.6 million were recorded as a debt discount and are being amortized to interest expense over the contractual term of the Notes. The Notes, governed by an indenture between the Company and a trustee, are senior, unsecured obligations and do not include financial and operating covenants nor any restrictions on the payments of dividends, the incurrence of indebtedness or the issuance or repurchase of securities by Kadmon or any of its subsidiaries. Interest on the Notes is payable semi-annually in cash in arrears at a rate of 3.625 % per annum on February 15 and August 15 of each year. The Notes will mature February 15, 2027 unless they are redeemed, repurchased or converted prior to such date. Before November 15, 2026, noteholders will have the right to convert their Notes only upon the occurrence of certain events. From and after November 15, 2026, noteholders may convert their Notes at any time at their election until the close of business on the second scheduled trading day immediately before the maturity date. Upon conversion, the Notes may be settled in shares of Kadmon common stock, cash or a combination thereof, at the Company’s election. The initial conversion rate is 143.7815 shares of common stock per $1,000 in principal amount of Notes, which represents an initial conversion price of approximately $ 6.96 per share of common stock, or a premium of approximately 30 % to the $ 5.35 per share closing price of the Company’s common stock on February 10, 2021, the date the Company priced the offering. The conversion rate and conversion price will be subject to customary adjustments upon the occurrence of certain events. In addition, if certain corporate events that constitute a “Make-Whole Fundamental Change” (as defined in the applicable indenture) occur, then the conversion rate will, in certain circumstances, be increased for a specified period of time. The Company may redeem all or any portion of the Notes, at its option, on or after February 20, 2024 and on or before the 40 th scheduled trading day immediately before the maturity date, at a cash redemption price equal to the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any, up to, but excluding, the redemption date, but only if the last reported sale price per share of the Company’s common stock exceeds 130 % of the conversion price then in effect for at least each of 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately before the date the Company provides written notice of redemption; and the trading day immediately before the notice is sent. In addition, calling any Note for redemption will constitute a Make-Whole Fundamental Change with respect to that Note, in which case the conversion rate applicable to the conversion of that Note will be increased in certain circumstances if it is converted after it is called for redemption. Holders of Notes may require the Company to repurchase their Notes upon the occurrence of certain events that constitute a fundamental change under the indenture governing the Notes at a fundamental change repurchase price equal to 100 % of the principal amount thereof, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. The following table summarizes the carrying value of the Notes at September 30, 2021 (in thousands): September 30, 2021 December 31, 2020 Gross proceeds $ 240,000 $ - Unamortized debt discount ( 6,814 ) - Carrying value $ 233,186 $ - The following table summarizes the interest expense recognized related to the No tes for the three and nine months ended September 30, 2021 (in thousands): Three Months Ended Nine Months Ended September 30, 2021 September 30, 2021 Stated interest $ 2,175 $ 5,413 Amortized debt discount 316 792 Interest expense $ 2,491 $ 6,205 Capped Call Transactions Separately, the Company entered into privately negotiated capped call options with financial institutions. The capped call options cover, subject to customary anti-dilution adjustments, the number of shares of the Company’s common stock that initially underlie the Notes. The cap price of the capped call options is $ 10.70 per share, representing a premium of 100 % above the closing price of $ 5.35 per share of the Company’s common stock on February 10, 2021, and is subject to certain adjustments under the terms of the capped call options. The capped call options, which have a final expiration date of February 11, 2027, are generally intended to reduce or offset potential dilution to the Company’s common stock upon conversion of the Notes with such reduction and/or offset, subject to a cap based on the cap price. The capped call transactions are separate transactions entered into by the Company, are not part of the terms of the Notes and will not change the holders’ rights under the Notes. Holders of the Notes will not have any rights with respect to the capped call options. The Company paid a total of $ 33.0 million in premiums for the capped call options, which was recorded as additional paid-in capital, using a portion of the gross proceeds from the issuance and sale of the Notes. The capped call options are excluded from diluted earnings per share because the impact would be anti-dilutive. Paycheck Protection Program of the Coronavirus Aid, Relief, and Economic Security Act. On April 15, 2020, the Company received the proceeds from a loan in the amount of approximately $ 3.1 million (the “Loan”) from PNC Bank, National Association, as lender, pursuant to the Paycheck Protection Program (“PPP”) of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). Under the CARES Act, loan forgiveness is available for the sum of eligible and documented payroll costs, covered rent payments, covered mortgage interest and covered utilities during the eight-week period beginning on the date of loan approval. On June 10, 2021, the loan was forgiven by the U.S. Small Business Administration (“SBA”). The Company has recorded the forgiven amount of the Loan of approximately $ 3.1 million as other income for the nine months ended September 30, 2021. |
Financial Instruments
Financial Instruments | 9 Months Ended |
Sep. 30, 2021 | |
Financial Instruments [Abstract] | |
Financial Instruments | 6. Financial Instruments The Company is required to disclose information on all assets and liabilities reported at fair value that enables an assessment of the inputs used in determining the reported fair values. The fair value hierarchy defines three levels and prioritizes valuation inputs based on the observable nature of those inputs. The fair value hierarchy applies only to the valuation inputs used in determining the reported fair value of investments and is not a measure of investment credit quality. Items classified as Level 1 within the valuation hierarchy consist of the Company’s cash equivalents held in money market funds and its ownership of MeiraGTx. The Company measures these investments at fair value determined based on Level 1 observable quoted price market inputs. Items classified as Level 2 within the valuation hierarchy consist of the Company’s marketable debt securities, warrant liabilities and convertible notes. The Company estimates the fair values of the marketable debt securities by taking into consideration valuations obtained from third-party pricing sources. These pricing sources utilize industry standard valuation models, including both income and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include market pricing based on real-time trade data for the same or similar securities, issuer credit spreads, benchmark yields, and other observable inputs. The Level 2 inputs used to value the Company’s warrant liabilities were determined using prices that can be directly observed. Although the fair value of this obligation is calculated using the observable market price of the Company’s common stock, an active market for this financial instrument does not exist. The fair value of the Notes, which differs from their carrying value, is influenced by interest rates, stock price and stock price volatility and is determined by prices observed in market trading. The market for trading of the Notes is not considered to be an active market and therefore the estimate of fair value is based on Level 2 inputs. The estimated fair value of the Notes was approximately $ 348.3 million at September 30, 2021. The following table presents the Company’s financial assets and liabilities that have been measured at fair value at September 30, 2021 and the fair value hierarchy of the valuation inputs utilized to determine such fair value (in thousands) : Fair Value Measurements Using Description Total Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Financial assets Cash equivalents: Money market funds $ 60,939 $ 60,939 $ — $ — Short-term investments: Corporate debt securities 182,821 — 182,821 — Ownership of MeiraGTx 9,196 9,196 — — $ 252,956 $ 70,135 $ 182,821 $ — Financial liabilities Warrant liabilities $ 3,408 $ — $ 3,408 $ — The following table presents the Company’s financial assets and liabilities that have been measured at fair value at December 31, 2020 and the fair value hierarchy of the valuation inputs utilized to determine such fair value (in thousands) : Fair Value Measurements Using Description Total Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Financial assets Cash equivalents: Money market funds $ 67,467 $ 67,467 $ — $ — Corporate debt securities 3,041 — 3,041 — Short-term investments: Corporate debt securities 49,435 — 49,435 — Ownership of MeiraGTx 10,564 10,564 — — $ 130,507 $ 78,031 $ 52,476 $ — Financial liabilities Warrant liabilities $ 1,082 $ — $ 1,082 $ — The Company has not recognized any material gross realized gains or losses on sales of available-for-sale marketable debt securities. Ownership of MeiraGTx The Company maintained a 1.6 % ownership in the ordinary shares of MeiraGTx, a clinical-stage gene therapy company, with a fair value of $ 9.2 million and $ 10.6 million, at September 30, 2021 and December 31, 2020, respectively. The Company did not realize any gains in the three and nine months ended September 30, 2021, and realized gains of $ 4.2 million and $ 15.5 million for the three and nine months ended September 30, 2020, respectively, which represents the sale of 0.3 million and 1.1 million ordinary shares of MeiraGTx, respectively. The Company has recorded a net unrealized loss on its ownership of MeiraGTx ordinary shares of $ 1.6 million and $ 1.4 million for the three and nine months ended September 30, 2021, respectively, and net unrealized loss of $ 3.3 million and $ 32.8 million for the three and nine months ended September 30, 2020 , respectively. The unrealized gain (loss) on equity securities consists of the change in unrealized gain or loss resulting from mark-to-market adjustments on equity securities still held. The Company’s ownership of MeiraGTx ordinary shares is valued using Level 1 inputs, which includes quoted prices in active markets for identical assets in accordance with the fair value hierarchy. Warrant Liabilities In connection with the 2015 credit agreement, as fees to the lenders thereunder, the Company issued warrants to purchase an aggregate of $ 6.3 million of the Company’s Class A units with an expiration date of August 2022, which were exchanged for 617,651 warrants with a strike price of $ 10.20 per share to purchase the same number of shares of the Company’s common stock upon consummation of the Company’s IPO in August 2016 (the “2015 Warrants”). As of September 30, 2021, the exercise price of a portion of the 2015 Warrants to purchase an aggregate of 529,413 shares of the Company’s common stock was $ 3.30 per warrant share and the exercise price of the remaining 2015 Warrants to purchase an aggregate of 88,238 shares of the Company’s common stock was $ 4.50 per warrant share. Since these warrants are exercisable and are redeemable at the option of the holder upon the occurrence of, and during the continuance of, an event of default, the fair value of the 2015 Warrants was recorded as a short-term liability of approximately $ 3.4 million at September 30, 2021 and approximately $ 1.1 million at December 31, 2020. The Company used the Black-Scholes pricing model to value the liability related to the 2015 Warrants at September 30, 2021 with the following assumptions: risk-free interest rate of 0.1 %, expected term of 0.9 years, expected volatility of 85.0 % and a dividend rate of 0 %. The change in fair value of the 2015 Warrants was approximately $ 2.7 million and $ 2.3 million for the three and nine months ended September 30, 2021 and approximately $( 0.6 ) million and $( 0.5 ) million for the three and nine months ended September 30, 2020, respectively. None of these instruments had been exercised as of September 30, 2021 . The table below represents a roll-forward of warrant liabilities measured using Level 2 inputs from January 1, 2021 to September 30, 2021 (in thousands): Significant Other Observable Inputs (Level 2) Balance at January 1, 2021 $ 1,082 Change in fair value of warrant liabilities 2,326 Balance at September 30, 2021 $ 3,408 The following table represents a roll-forward of warrants outstanding from January 1, 2021 to September 30, 2021: Warrants Weighted Average Exercise Price Balance, January 1, 2021 10,582,119 $ 6.30 Exercised ( 4,320,533 ) 3.35 Balance, September 30, 2021 6,261,586 $ 8.34 |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2021 | |
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 capitalizes inventory costs associated with the Company’s products after regulatory approval, if ever, when, based on management’s judgment, future commercialization is considered probable and the future economic benefit is expected to be realized; otherwise, such costs are expensed as research and development. On July 16, 2021, REZUROCK received FDA approval and all subsequent inventory costs associated with REZUROCK are being capitalized. Raw materials and work-in-process include all inventory costs prior to packaging and labelling, including raw material, active product ingredient, and drug product. Finished goods include packaged and labelled products. The inventory balance as of September 30, 2021 does not include $ 0.1 million of inventory on hand that was previously expensed as research & development cost prior to FDA approval. The Company periodically analyzes its inventory levels to identify inventory that may expire prior to expected sale or has a cost basis in excess of its estimated realizable value, and writes-down such inventories as appropriate. In addition, the Company’s product is subject to strict quality control and monitoring which the Company performs throughout the manufacturing process. If certain batches or units of product no longer meet quality specifications or the Company identifies excess, obsolete or unsalable inventory, its value is written down to net realizable value. Inventories are comprised of the following (in thousands): September 30, December 31, 2021 2020 Raw materials $ — $ — Finished goods, net 22 102 Total inventories, net $ 22 $ 102 |
Fixed Assets
Fixed Assets | 9 Months Ended |
Sep. 30, 2021 | |
Fixed Assets [Abstract] | |
Fixed Assets | 8. Fixed Assets Fixed assets consisted of the following (in thousands): Useful Lives September 30, December 31, (Years) 2021 2020 Leasehold improvements 4 - 8 $ 10,397 $ 10,398 Office equipment and furniture 3 - 15 1,244 1,363 Machinery and laboratory equipment 3 - 15 3,963 3,835 Software 1 - 5 4,103 4,136 19,707 19,732 Less accumulated depreciation and amortization ( 18,822 ) ( 18,445 ) Fixed assets, net $ 885 $ 1,287 Depreciation and amortization of fixed assets totaled $ 0.6 million and $ 1.3 million for the nine months ended September 30, 2021 and 2020, respectively, and $ 0.1 million and $ 0.5 million for the three months ended September 30, 2021 and 2020, respectively. |
License Agreements
License Agreements | 9 Months Ended |
Sep. 30, 2021 | |
License Agreements [Abstract] | |
License Agreements | 9. License Agreements The Company has entered into several license agreements for products currently under development. The Company’s license agreements are disclosed in the audited financial statements included in “Note 11. License Agreements” of its Annual Report on Form 10-K for the year ended December 31, 2020 . Since the date of such financial statements, there have been no significant changes to the Company’s license agreements. Nano Terra, Inc. On April 8, 2011, the Company entered into a series of transactions with Nano Terra, Inc. (“Nano Terra” ) and entered into a joint venture with Surface Logix, Inc. (“SLx”) (Nano Terra’s wholly-owned subsidiary) through the formation of NT Life Sciences, LLC (“NTLS”), which had no material operations prior to 2021, and entered into a sub-licensing arrangement with NTLS and SLx. Pursuant to the sub-licensing arrangement, the Company was granted a worldwide, exclusive license under certain intellectual property owned by SLx to three clinical-stage product candidates, including belumosudil, each of which were licensed by SLx to NTLS. NTLS is a research and development company, which independently maintains intellectual property for the purpose of pursuing medical discoveries. The Company is represented on the board of managers of NTLS and is a party to decisions which influence the direction of the organization. The Company must pay to the previous shareholders of SLx from which Nano Terra acquired SLx, royalties on net sales in the amount of 5 %. Additionally, after the 5 % royalty has been paid, the Company must also pay royalties on the remaining net sales in the amount of 10 % to NTLS. As the Company owns 50 % of NTLS, the cumulative results of these obligations is that the Company will owe aggregate royalty payments totaling 9.75 % on net sales of licensed products. The royalties will become due and recognizable at the time of sale and are payable to SLx and NTLS 45 calendar days after each quarter. All royalties paid to third parties are recorded as Cost of Sales in the Company’s consolidated financial statements. NTLS is required to distribute any royalties from belumosudil to the two parties (Kadmon and SLx) within 15 days of receipt as equity distributions. Since inception, the Company has continuously assessed the applicability of FASB ASC 810, “Consolidation”, based on the corporate structure, voting rights and contributions of the various parties in connection with these agreements. The Company consolidates entities where the Company has a direct or indirect controlling financial interest based on either a variable interest model or voting interest modeltity. As such, the Company will consolidate an entity that is concluded to be a variable interest entity (“VIE”) for which the Company is deemed to be the primary beneficiary and any entity in which the Company holds a majority voting interest or has majority ownership and control over the operational, financial and investing decisions of that entity. With the approval of REZUROCK, NTLS has started to operationalize its structure and there was no activity of the joint venture prior to August 2021. NTLS does not meet any of the criteria for VIE classification, however, NTLS is subject to consolidation by the Company under the voting interest model as the Company has majority control over the operational, financial and investing decisions of NTLS. The Company controls the board of managers of NTLS and any major operational decisions. The Company has recorded a noncontrolling interest in the activity of NTLS based on its 50 % ownership. During the three and nine months ended September 30, 2021, the Company accrued royalties of approximately $ 0.6 million to SLx and approximately $ 1.2 million to NTLS related to net sales of REZUROCK. The royalties owed to SLx are recorded as accrued liabilities in the consolidated financial statements as of September 30, 2021. As NTLS is consolidated, the Company has eliminated the $ 1.2 million and recorded a noncontrolling interest of approximately $ 0.6 million related to 50 % of the net income of NTLS related to the royalties. |
Share-based Compensation
Share-based Compensation | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Compensation [Abstract] | |
Share-based Compensation | 10. Share-based Compensation 2016 Equity Incentive Plan A total of 21,785,738 shares of the Company’s common stock were authorized and reserved for issuance under the Company’s Amended and Restated 2016 Equity Incentive Plan (the “2016 Equity Plan”) at December 31, 2020. On January 1, 2021, pursuant to the evergreen provision contained in the 2016 Equity Plan, the number of shares reserved for future grants was increased by 6,861,201 shares, which was four percent ( 4 %) of the outstanding shares of common stock on December 31, 2020. This reserve will 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 Company’s board of directors. The following table summarizes share-based compensation expense under the 2016 Equity Plan for the three and nine months ended September 30, 2021 and 2020. Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 General and administrative $ 2,554 $ 1,745 $ 8,115 $ 4,916 Research and development 969 708 3,029 2,195 Total stock-based compensation expense $ 3,523 $ 2,453 $ 11,144 $ 7,111 Total unrecognized compensation expense related to unvested options granted under the Company’s share-based compensation plan was $ 26.0 million and $ 11.9 million at September 30, 2021 and December 31, 2020, respectively. That expense is expected to be recognized over a weighted average period of 2.0 years and 1.9 years as of September 30, 2021 and December 31, 2020, respectively. The following table summarizes information about stock options outstanding, not including performance stock options, from January 1, 2021 to September 30, 2021: Options Outstanding Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (years) Aggregate Intrinsic Value (in thousands) Balance, January 1, 2021 16,000,685 $ 5.29 7.11 $ 7,365 Granted 9,837,493 3.96 Exercised ( 1,252,894 ) 3.72 2,019 Forfeited ( 1,257,414 ) 5.25 Balance, September 30, 2021 23,327,870 $ 4.81 7.69 $ 99,960 Options vested and exercisable, September 30, 2021 10,496,431 $ 5.83 6.08 $ 39,287 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 September 30, 2021 ($ 8.71 per share) and December 31, 2020 ($ 4.15 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. The fair value of each stock option award, not including performance stock options, was estimated at the date of grant using the Black-Scholes option-pricing model and the assumptions noted in the following table: Nine Months Ended Nine Months Ended September 30, 2021 September 30, 2020 Options granted 9,837,493 4,966,040 Weighted average exercise price $ 3.96 $ 4.35 Weighted average fair value of grants $ 2.85 $ 2.87 Expected volatility 87.20 % - 127.92 % 75.46 % - 84.95 % Risk-free interest rate 0.05 % - 1.03 % 0.29 % - 1.64 % Expected life (years) 0.87 - 6.0 5.5 - 6.0 Expected dividend yield 0 % 0 % Performance Options A total of 982,500 performance options (“Performance Options”) with an exercise price of $ 4.06 were outstanding at September 30, 2021 with an intrinsic value of $ 4.6 million and 1,290,000 at December 31, 2020 with an intrinsic value of $ 0.3 million. The weighted average remaining contractual life of outstanding Performance Options at September 30, 2021 was 6.5 years. Compensation expense for Performance Options was recognized on a straight-line basis over the awards’ requisite service period of three years . At September 30, 2021, 1,290,000 Performance Options had vested and 307,500 had been exercised. At December 31, 2020, 962,502 Performance Options had vested and no Performance Options had been exercised. Stock Appreciation Rights A total of 655,000 stock appreciation rights (“SARs”) with an exercise price of $ 3.64 were outstanding at September 30, 2021 and 835,000 at December 31, 2020 with an intrinsic value of $ 3.3 million and $ 0.5 million, respectively. The weighted average remaining contractual life of outstanding SARs at September 30, 2021 was 6.2 years. Compensation expense for SARs was recognized on a straight-line basis over three years . At September 30, 2021, 835,000 SARs had vested and 180,000 had been exercised. At December 31, 2020, 835,000 SARs had vested and no SARs had been exercised. 2 014 Long-term Incentive Plan (the “LTIP”) A total of 9,750 units have been granted under the LTIP as of both September 30, 2021 and December 31, 2020. The LTIP is payable upon the fair market value of the Company’s common stock exceeding 333 % of the $ 6.00 grant price (or $ 20.00 ) per share prior to December 7, 2024. The holders of the LTIP awards 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. No LTIP awards were exercisable or had been exercised at September 30, 2021. 2016 Employee Stock Purchase Plan A total of 2,551,180 shares of the Company’s common stock were reserved for issuance under the Amended and Restated 2016 Employee Stock Purchase Plan (the “2016 ESPP”) at December 31, 2020. The Company’s board of directors elected not to increase the shares reserved for issuance under the 2016 ESPP on January 1, 2021. The Company issued 94,420 and 98,840 shares under the 2016 ESPP during the nine months ended September 30, 2021 and 2020, respectively. No meaningful compensation expense was recognized for the ESPP during the three and nine months ended September 30, 2021 and 2020. |
Accrued Expenses
Accrued Expenses | 9 Months Ended |
Sep. 30, 2021 | |
Accrued Expenses [Abstract] | |
Accrued Expenses | 11. Accrued Expenses Short-term accrued expenses at September 30, 2021 and December 31, 2020 include the following (in thousands): September 30, December 31, 2021 2020 Compensation and benefits $ 4,937 $ 5,585 Research and development 6,728 4,183 Interest 1,088 20 Other 2,485 1,746 Total accrued expenses $ 15,238 $ 11,534 Compensation and benefits Compensation and benefits primarily represents earned and unpaid employee wages and bonuses. 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. Interest Interest represents accrued and unpaid interest on the Company’s outstanding indebtedness (Note 5). |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | 12. Commitments and Contingencies The Company’s commitments are disclosed in the audited financial statements included in “Note 15. Commitments and Contingencies” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 . Since the date of such financial statements, there have been no material changes to the Company’s commitments or contingencies, including leases, other than the legal proceedings described below. Contingent License Agreement Milestones The Company has entered into several license agreements for products currently under development (Note 9). 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 $ 229.1 million at September 30, 2021. Any payments made prior to FDA approval will be expensed as research and development. Any payments made after FDA approval will be capitalized. 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. Legal Proceedings The Company is 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 are 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. GoldenTree Master Fund, Ltd. v. Kadmon Holdings, Inc . On April 21, 2021, GoldenTree Master Fund, Ltd (“GoldenTree”) filed suit in the Supreme Court of New York bringing claims for breach of contract, unjust enrichment, and fraudulent inducement. On October 18, 2021, the Supreme Court of New York signed a stipulation filed by the parties whereby the parties have agreed, subject to certain terms and conditions, that this suit should be stayed in its entirety pending the outcome of the vote of Kadmon stockholders to approve or disapprove the Sanofi Merger, and that the action should be voluntarily discontinued upon approval and closing of the Sanofi Merger and the cancellation of the preferred shares in exchange for the applicable Liquidation Value as defined in the applicable Certificate of Designations of the securities that form the subject matter of the dispute. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2021 | |
Income Taxes [Abstract] | |
Income Taxes | 13. 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. There was no change in deferred tax liability and no income tax expense recorded for the three and nine months ended September 30, 2021 and 2020. 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 (“NOL”) 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 September 30, 2021 and December 31, 2020. At December 31, 2020, the Company had unused federal and state NOL carryforwards of $ 408.4 million and $ 349.6 million, respectively, that may be applied against future taxable income. The Company has fully reserved the deferred tax asset related to these NOL carryforwards as reflected in its consolidated financial statements. Approximately $ 291.1 million of the federal NOL carryforwards expire at various dates through December 31, 2037 , and approximately $ 117.3 million of federal net operating loss carryforwards will not expire. Approximately all of the $ 349.6 million state NOL carryforwards expire at various dates through December 31, 2040 . |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | 14. Subsequent Events Legal Proceedings Between October 1 and October 26, 2021, ten alleged stockholders of the Company filed actions in federal courts located in the states of New York, Delaware, and Pennsylvania against the Company and the members of its Board of Directors under the following captions: (i) Nancy Jaser v. Kadmon Holdings, Inc., et al., No. 1:21-cv-08154 (S.D.N.Y.); (ii) John Dillon v. Kadmon Holdings, Inc., et al., No. 1:21-cv-08169 (S.D.N.Y.); (iii) Alex Ciccotelli v. Kadmon Holdings, Inc., et al., No. 1:21-cv-08299 (S.D.N.Y.); (iv) Michael Young v. Kadmon Holdings, Inc., et al., No. 1:21-cv-05641 (E.D.N.Y.); (v) Michael Bierman v. Kadmon Holdings, Inc., et al., No. 1:21-cv-08441 (S.D.N.Y.); (vi) Jacob Wheeler v. Kadmon Holdings, Inc., et al., No. 1:21-cv-08576 (S.D.N.Y.); (vii) Robert Wilhelm v. Kadmon Holdings, Inc., et al., No. 1:21-cv-01470 (D. Del.); (viii) Matthew Whitfield v. Kadmon Holdings, Inc., et al., No. 2:21-cv-04605 (E.D. Pa.); (ix) Jerome Anderson v. Kadmon Holdings, Inc., et al., No. 1:21-cv-08705 (S.D.N.Y.); and (x) Joseph Gibson v. Kadmon Holdings, Inc., et al., No. 1:21-cv-01503 (D. Del.) (collectively, the “Merger Actions”). The Merger Actions assert claims solely on behalf of the individual stockholders and generally allege that the Company and its Board of Directors failed to disclose allegedly material information in the definitive proxy statement on Schedule 14A filed with the SEC on October 4, 2021. The Merger Actions seek an order enjoining the consummation of the transactions contemplated by the Merger Agreement and awarding damages. The Company believes that the claims asserted in the Merger Actions are without merit. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policy) | 9 Months Ended |
Sep. 30, 2021 | |
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 its products and the regulatory environment in which the Company operates. |
Principles of Consolidation | The accompanying consolidated financial statements, which include the accounts of Kadmon Holdings, Inc. and its domestic and international subsidiaries have been prepared in accordance with a ccounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and pursuant to the rules and regulations of the SEC. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the Company’s opinion, the financial statements include all adjustments (consisting of normal recurring adjustments) and disclosures considered necessary in order to make the financial statements not misleading. |
Interim Financial Statements | Operating results for the three and nine months ended September 30, 2021 are not necessarily indicative of the final results that may be expected for the year ending December 31, 2021. These unaudited financial statements should be read in conjunction with the audited financial statements included in Item 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on March 4, 2021. |
Use of Estimates | Use of Estimates The preparation of financial statements in accordance 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. The most significant estimates are related to share-based compensation (Note 10) and the accrual of research and development and clinical trial expenses (Note 11). |
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 Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on March 4, 2021. Since the date of such financial statements, there have been no changes or updates to the Company’s significant accounting policies, other than those described below. |
Cash, Cash Equivalents and Marketable Debt Securities | Cash, Cash Equivalents and Marketable Debt Securities The Company considers all highly liquid securities with an original or remaining maturity of three months or less at the time of acquisition to be cash equivalents. The Company determines the appropriate classification of its investments in debt securities at the time of purchase. All of the Company’s debt securities are classified as available-for-sale and are reported as short-term or long-term based on maturity dates and whether such assets are available for use in current operations and are reasonably expected to be realized in cash or consumed during the normal cycle of business. Our available-for-sale debt securities generally have contractual maturity dates between six and eighteen months. The following tables summarize the Company’s cash, cash equivalents and marketable debt securities as of September 30, 2021 and December 31, 2020 (in thousands): September 30, 2021 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash and cash equivalents: Cash and money market funds $ 68,826 $ — $ — 68,826 Total cash and cash equivalents 68,826 — — 68,826 Marketable debt securities: Corporate debt securities 182,920 11 ( 110 ) 182,821 Total marketable debt securities 182,920 11 ( 110 ) 182,821 Total cash, cash equivalents and marketable debt securities $ 251,746 $ 11 $ ( 110 ) $ 251,647 December 31, 2020 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash and cash equivalents: Cash and money market funds $ 71,382 $ — $ — 71,382 Corporate debt securities 3,041 3,041 Total cash and cash equivalents 74,423 — — 74,423 Marketable debt securities: Corporate debt securities 49,463 4 ( 32 ) 49,435 Total marketable debt securities 49,463 4 ( 32 ) 49,435 Total cash, cash equivalents and marketable debt securities $ 123,886 $ 4 $ ( 32 ) $ 123,858 At September 30, 2021, the Company had invested in 29 available-for-sale marketable debt securities that were in an unrealized loss position for less than one year and no securities in an unrealized loss position for more than one year. The aggregate fair value of debt securities in an unrealized loss position at September 30, 2021 was $ 133.2 million. The unrealized losses of $ 0.1 million related to these corporate debt securities were included in accumulated other comprehensive loss as of September 30, 2021. Unrealized losses on corporate debt securities have not been recognized into income because the issuers’ bonds are of high credit quality (rated A3/A- or higher), it is likely that management will not be required to sell the securities prior to their anticipated recovery, and the decline in fair value is largely due to market conditions and/or changes in interest rates. The issuers continue to make timely interest payments on the bonds. The fair value is expected to recover as the bonds approach maturity and the Company does not believe any unrealized losses represent other-than-temporary impairments. |
Convertible Notes Transaction | Convertible Notes Transaction In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2020-06, “ Debt with Conversion and Other Options and Derivatives and Hedging - Contracts in Entity’s Own Equity ” (“ASU 2020-06”) to address the complexity associated with applying GAAP to certain financial instruments with characteristics of liabilities and equity. This ASU includes amendments to the guidance on convertible instruments and the derivative scope exception for contracts in an entity’s own equity and simplifies the accounting for convertible instruments by eliminating the cash conversion accounting model for convertible instruments. The Company early adopted ASU 2020-06 effective January 1, 2021, and the standard did not have a significant impact on its consolidated financial statements. By adopting ASU 2020-06, the Company eliminates the separation model for convertible debt and the requirement to separately present in equity an embedded conversion feature in such debt. In February 2021, the Company issued $ 240.0 million in aggregate principal of 3.625 % convertible senior notes due February 15, 2027 (Note 5). The Company accounts for the convertible notes wholly as debt in accordance with FASB Accounting Standards Codification (“ASC”) 470, Debt . The Company does not separately account for the liability and equity components of convertible notes transactions that can be settled in cash by allocating the proceeds from issuance between the liability component and the embedded conversion option. The Company recognizes amortization of the debt discount related to issuance costs as interest expense using the effective interest method. In February 2021, the Company purchased capped call options from financial institutions to minimize the impact of potential dilution of Kadmon common stock upon conversion of the convertible notes. The capped call options meet the definition of a derivative in accordance with FASB ASC 815, Derivatives and Hedging (“ASC 815”), however, qualify for derivative scope exception under ASC 815 for instruments indexed to a company’s own stock. Accordingly, the premiums for the capped call options were recorded as additional paid-in capital on the Company’s consolidated balance sheet as the options are settleable in Kadmon common stock at the election of the Company. See Note 5 for additional information. |
Embedded Derivatives | Embedded Derivatives The Company accounts for derivative financial instruments as either equity or liabilities in accordance with ASC 815, based on the characteristics and provisions of each instrument. Embedded derivatives are required to be bifurcated from the host instruments and recorded at fair value if the derivatives are not clearly and closely related to the host instruments on the date of issuance. The Company’s convertible notes (Note 5) contain certain features that, in accordance with ASC 815, are not clearly and closely related to the host instrument and represent derivatives that are required to be re-measured at fair value each reporting period. The Company determined that the estimated fair value of the derivatives at issuance and as of September 30, 2021 were not material based on a scenario-based cash flow model that uses unobservable inputs that reflect the Company’s own assumptions. Should the Company’s assessment of the probabilities around these scenarios change, including due to changes in market conditions, there could be a change to the fair value. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue in accordance with FASB ASC 606, Revenue from Contracts with Customers , 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 Company’s revenues have primarily been generated through product sales, collaborative research, development and commercialization license agreements, and other service agreements. The following table summarizes revenue from contracts with customers for the three and nine months ended September 30, 2021 and 2020 (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 Product sales, net REZUROCK $ 12,215 $ — $ 12,215 $ — Other 8 339 392 1,227 Total product sales, net $ 12,223 $ 339 $ 12,607 $ 1,227 License revenue 2,000 — 2,000 6,000 Other revenue 483 151 859 446 Total revenue $ 14,706 $ 490 $ 15,466 $ 7,673 Product Sales These contracts typically include a single promise to deliver a fixed amount of product to a customer with payment due within 30 - 60 days of shipment, with a prompt pay discount for payments made within the terms of the applicable contract. 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, which generally occurs upon delivery. The timing of revenue recognition may differ from the timing of invoicing to customers. The Company has not recognized any assets for costs to obtain or fulfill a contract with a customer as of September 30, 2021. On July 16, 2021, the FDA approved REZUROCK for the treatment of adult and pediatric patients 12 years and older with cGVHD after failure of at least two prior lines of systemic therapy. The Company expects REZUROCK to be its principal source of product sales in the future. For REZUROCK, the Company will classify payments to its customers for certain services provided by its customers as reductions to revenue. The Company sells REZUROCK to patients through a limited distribution network of specialty pharmacy and specialty distributors in the United States. Net revenue from sales of REZUROCK will be recorded at net selling price (transaction price), which includes estimates of variable consideration for which reserves are established for (i) estimated government rebates, such as Medicaid and Medicare Part D reimbursements, and estimated managed care rebates, (ii) estimated chargebacks, (iii) estimated costs of co-payment assistance programs and (iv) product returns. These reserves are based on the amounts earned or to be claimed on the related sales and are classified as reductions of accounts receivable or as a current liability. Where appropriate, these estimates take into consideration items such as the Company’s current contractual and statutory requirements and forecasted customer buying and payment patterns. Overall, these reserves reflect the Company’s best estimates of the amount of consideration to which it is entitled based on the terms of the applicable contract. The amount of variable consideration included in the transaction price may be constrained and is included in the net sales price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. Actual amounts of consideration ultimately received may differ from the Company's estimates. If actual results in the future vary from estimates, the Company will adjust these estimates, which would affect net product revenue and earnings in the period such variances become known. Government and Managed Care Rebates . The Company contracts with government agencies and managed care organizations or, collectively, third-party payors, so that REZUROCK will be eligible for purchase by, or partial or full reimbursement from, such third-party payors. The Company estimates the rebates it will provide to third-party payors and deducts these estimated amounts from total gross product revenues at the time the revenues are recognized. These reserves are recorded in the same period in which the revenue is recognized, resulting in a reduction of product revenue and the establishment of a current liability. The Company estimates the rebates that it will provide to third-party payors based upon (i) the Company's contracts with these third-party payors, (ii) the government mandated discounts applicable to government-funded programs, (iii) a range of possible outcomes that are probability-weighted for the estimated payor mix, and (iv) product distribution information obtained from the Company's distribution network of specialty pharmacy and specialty distributors. During the three and nine months ended September 30, 2021, the Company recognized $ 0.7 million of rebates expense as a reduction to revenue related to REZUROCK and has recorded a current liability of $ 0.7 million in the consolidated balance sheets as of September 30, 2021. Chargebacks . Chargebacks are discounts that occur when certain contracted customers, pharmacy benefit managers, insurance companies, government programs and group purchasing organizations purchase directly from the Company’s specialty distributors. These customers purchase the Company’s product under contracts negotiated between them and the Company’s specialty distributors. The specialty distributor, in turn, charges back to the Company the difference between the price the specialty distributor paid and the negotiated price paid by the contracted customers, which may be higher or lower than the specialty distributor’s purchase price from the Company. The Company estimates chargebacks and adjusts gross product revenues and accounts receivable based on the estimates at the time revenues are recognized. During the three and nine months ended September 30, 2021, the Company recognized $ 0.8 million of chargebacks expense as a reduction to revenue related to REZUROCK and has recorded a current liability of $ 0.2 million in the consolidated balance sheet as of September 30, 2021. Co-payment assistance and patient assistance programs . Patients who have commercial insurance and meet certain eligibility requirements may receive co-payment assistance. Based upon the terms of the program and co-payment assistance utilization reports received from the Company’s hub services provider, the Company is able to estimate the co-payment assistance amounts, which are recorded in the same period in which the related revenue is recognized, resulting in a reduction of product revenue. The Company also offers a patient assistance program that provides free drug product, for a limited period of time, to allow a patient’s insurance coverage to be established. Based on patient assistance program utilization reports provided by the Company’s hub services provider, the Company records gross revenue of the product provided and a full reduction of the revenue amount for the free drug discount. During the three and nine months ended September 30, 2021, the Company recognized $ 0.1 million of co-payments assistance expense as a reduction to revenue related to REZUROCK and has recorded a current liability of $ 0.1 million in the consolidated balance sheet as of September 30, 2021. Product returns . The Company provides contractual return rights to its customers, based on product dating and in instances where the product is damaged or defective. Non-acceptance of shipped drug product is reflected as a reversal of sales in the period in which the sales were originally recorded. Reserves for estimated returns are recorded as a reduction of revenue in the period that the related revenue is recognized, as well as a liability. Estimates of returns are based on third party analogs of recent drug product launches and quantitative information provided by the Company's distribution network of specialty pharmacies and specialty distributors. During the three and nine months ended September 30, 2021, the Company recognized $ 0.2 million of returns expense as a reduction to revenue related to REZUROCK and has recorded a liability of $ 0.2 million in the consolidated balance sheet as of September 30, 2021. License Revenue License revenue in 2021 consists of a milestone payment earned pursuant to a strategic partnership entered into with BioNova Pharmaceuticals Ltd. to develop belumosudil (KD025) in China. The transaction price of $ 2.0 million was allocated to the single combined performance obligation under the contract and the performance obligation was completed during the third quarter of 2021. License revenue in 2020 consists of a milestone payment earned pursuant to a joint venture and license agreement entered into with Meiji Seika Pharma Co., Ltd (“Meiji”) to develop belumosudil (KD025) in Japan. The transaction price of $ 6.0 million was allocated to the single combined performance obligation under the contract and the performance obligation was completed during the first quarter of 2020. There are no performance obligations that have not yet been satisfied and there is no transaction price allocated to future performance obligations as of September 30, 2021. Other Revenue The other revenue generated by the Company is primarily related to a sublease agreement with MeiraGTx Holdings plc (“MeiraGTx”). The Company recognizes revenue related to sublease agreements as they are performed. |
Cost of sales | Cost of Sales Cost of product sales includes the cost of producing and distributing inventories that are related to product revenue during the respective period, including royalties owed under license agreements (Note 9). In addition, shipping and handling costs for product shipments are recorded as incurred. |
Concentration Of Credit Risk | Concentration and Credit Risks Risks from Third-Party Manufacturing and Distribution Concentration The Company relies on single source manufacturers for active pharmaceutical ingredient and finished drug product manufacturing of product candidates in development and on a limited number of distributors for distribution of approved drug products. Delays in the manufacture or distribution of any product could adversely impact the commercial revenue and future inventory procurement of the Company’s product candidates. Credit Risk The Company’s receivables from sales of REZUROCK are primarily due from six customers, accounting for approximately 96 % of receivables from sales of REZUROCK and approximately 64 % of total receivables, resulting in a concentration of credit risk. Sales of REZUROCK occur once an order of product has been received by the specialty pharmacy or specialty distributor customer. Aditionally, the Company’s receivables include approximately $ 6.4 million due from one customer related to a collaboration agreement. This receivable accounts for approximately 36 % of total receivables, resulting in a credit risk. |
Related Party Transactions | Related Party Transactions The Company’s related party transactions are disclosed in the audited financial statements included in “Note 2. Summary of Significant Accounting Policies–Related Party Transactions” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. Since the date of such financial statements, there have been no changes to the Company’s related party transactions. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In December 2019, the FASB issued ASU No. 2019-12, “Income Taxes: Simplifying the Accounting for Income Taxes” , which removes certain exceptions for recognizing deferred taxes for investments, performing intraperiod allocation and calculating income taxes in interim periods. The Company adopted this standard on January 1, 2021, and the standard did not have a significant impact on its consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, “Measurement of Credit Losses on Financial Instruments” , to require financial assets carried at amortized cost to be presented at the net amount expected to be collected based on historical experience, current conditions and forecasts. For smaller reporting companies, the ASU is effective for interim and annual periods beginning after December 15, 2022, with early adoption permitted. Adoption of the ASU is on a modified retrospective basis. The Company does not expect this guidance to have a material impact on its financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Cash, Cash Equivalents and Marketable Debt Securities | September 30, 2021 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash and cash equivalents: Cash and money market funds $ 68,826 $ — $ — 68,826 Total cash and cash equivalents 68,826 — — 68,826 Marketable debt securities: Corporate debt securities 182,920 11 ( 110 ) 182,821 Total marketable debt securities 182,920 11 ( 110 ) 182,821 Total cash, cash equivalents and marketable debt securities $ 251,746 $ 11 $ ( 110 ) $ 251,647 December 31, 2020 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash and cash equivalents: Cash and money market funds $ 71,382 $ — $ — 71,382 Corporate debt securities 3,041 3,041 Total cash and cash equivalents 74,423 — — 74,423 Marketable debt securities: Corporate debt securities 49,463 4 ( 32 ) 49,435 Total marketable debt securities 49,463 4 ( 32 ) 49,435 Total cash, cash equivalents and marketable debt securities $ 123,886 $ 4 $ ( 32 ) $ 123,858 |
Disaggregation of Revenue | Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 Product sales, net REZUROCK $ 12,215 $ — $ 12,215 $ — Other 8 339 392 1,227 Total product sales, net $ 12,223 $ 339 $ 12,607 $ 1,227 License revenue 2,000 — 2,000 6,000 Other revenue 483 151 859 446 Total revenue $ 14,706 $ 490 $ 15,466 $ 7,673 |
Net Loss per Share Attributab_2
Net Loss per Share Attributable to Common Stockholders (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Net 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 Nine Months Ended September 30, September 30, 2021 2020 2021 2020 Numerator – basic and diluted: Net loss available to common stockholders - basic and diluted $ ( 34,194 ) $ ( 25,149 ) $ ( 94,003 ) $ ( 82,633 ) Denominator – basic and diluted: Weighted average shares of common stock outstanding used to compute basic and diluted net loss per share 173,443,975 169,310,056 172,373,463 165,107,295 Net loss per share, basic and diluted $ ( 0.20 ) $ ( 0.15 ) $ ( 0.55 ) $ ( 0.50 ) |
Anti-dilutive Amounts Excluded From Calculation of Diluted Net Income (Loss) per Share | Three and Nine Months Ended September 30, 2021 2020 Options to purchase common stock 24,310,370 17,357,285 Warrants to purchase common stock 6,261,586 11,917,052 Convertible preferred stock 3,851,033 3,667,651 Convertible notes 34,507,560 — Total shares of common stock equivalents 68,930,549 32,941,988 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Debt [Abstract] | |
Schedule of Carrying Value of Notes | September 30, 2021 December 31, 2020 Gross proceeds $ 240,000 $ - Unamortized debt discount ( 6,814 ) - Carrying value $ 233,186 $ - |
Schedule of Interest Expense | Three Months Ended Nine Months Ended September 30, 2021 September 30, 2021 Stated interest $ 2,175 $ 5,413 Amortized debt discount 316 792 Interest expense $ 2,491 $ 6,205 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Financial Instruments [Abstract] | |
Fair Values of Financial Instruments | Fair Value Measurements Using Description Total Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Financial assets Cash equivalents: Money market funds $ 60,939 $ 60,939 $ — $ — Short-term investments: Corporate debt securities 182,821 — 182,821 — Ownership of MeiraGTx 9,196 9,196 — — $ 252,956 $ 70,135 $ 182,821 $ — Financial liabilities Warrant liabilities $ 3,408 $ — $ 3,408 $ — The following table presents the Company’s financial assets and liabilities that have been measured at fair value at December 31, 2020 and the fair value hierarchy of the valuation inputs utilized to determine such fair value (in thousands) : Fair Value Measurements Using Description Total Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Financial assets Cash equivalents: Money market funds $ 67,467 $ 67,467 $ — $ — Corporate debt securities 3,041 — 3,041 — Short-term investments: Corporate debt securities 49,435 — 49,435 — Ownership of MeiraGTx 10,564 10,564 — — $ 130,507 $ 78,031 $ 52,476 $ — Financial liabilities Warrant liabilities $ 1,082 $ — $ 1,082 $ — |
Rollforward of Level 2 Investments | Significant Other Observable Inputs (Level 2) Balance at January 1, 2021 $ 1,082 Change in fair value of warrant liabilities 2,326 Balance at September 30, 2021 $ 3,408 |
Warrants Outstanding | Warrants Weighted Average Exercise Price Balance, January 1, 2021 10,582,119 $ 6.30 Exercised ( 4,320,533 ) 3.35 Balance, September 30, 2021 6,261,586 $ 8.34 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Inventories [Abstract] | |
Schedule of Inventories | September 30, December 31, 2021 2020 Raw materials $ — $ — Finished goods, net 22 102 Total inventories, net $ 22 $ 102 |
Fixed Assets (Tables)
Fixed Assets (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Fixed Assets [Abstract] | |
Fixed Assets | Useful Lives September 30, December 31, (Years) 2021 2020 Leasehold improvements 4 - 8 $ 10,397 $ 10,398 Office equipment and furniture 3 - 15 1,244 1,363 Machinery and laboratory equipment 3 - 15 3,963 3,835 Software 1 - 5 4,103 4,136 19,707 19,732 Less accumulated depreciation and amortization ( 18,822 ) ( 18,445 ) Fixed assets, net $ 885 $ 1,287 |
Share-based Compensation (Table
Share-based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Compensation [Abstract] | |
Summary of share-based compensation expense under the 2016 Equity Plan | Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 General and administrative $ 2,554 $ 1,745 $ 8,115 $ 4,916 Research and development 969 708 3,029 2,195 Total stock-based compensation expense $ 3,523 $ 2,453 $ 11,144 $ 7,111 |
Stock Options Outstanding | Options Outstanding Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (years) Aggregate Intrinsic Value (in thousands) Balance, January 1, 2021 16,000,685 $ 5.29 7.11 $ 7,365 Granted 9,837,493 3.96 Exercised ( 1,252,894 ) 3.72 2,019 Forfeited ( 1,257,414 ) 5.25 Balance, September 30, 2021 23,327,870 $ 4.81 7.69 $ 99,960 Options vested and exercisable, September 30, 2021 10,496,431 $ 5.83 6.08 $ 39,287 |
Weighted-average Fair Value of Stock Option Awards Granted | Nine Months Ended Nine Months Ended September 30, 2021 September 30, 2020 Options granted 9,837,493 4,966,040 Weighted average exercise price $ 3.96 $ 4.35 Weighted average fair value of grants $ 2.85 $ 2.87 Expected volatility 87.20 % - 127.92 % 75.46 % - 84.95 % Risk-free interest rate 0.05 % - 1.03 % 0.29 % - 1.64 % Expected life (years) 0.87 - 6.0 5.5 - 6.0 Expected dividend yield 0 % 0 % |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Accrued Expenses [Abstract] | |
Short-term Accrued Expenses | September 30, December 31, 2021 2020 Compensation and benefits $ 4,937 $ 5,585 Research and development 6,728 4,183 Interest 1,088 20 Other 2,485 1,746 Total accrued expenses $ 15,238 $ 11,534 |
Organization (Narrative) (Detai
Organization (Narrative) (Details) | Sep. 07, 2021USD ($) | Sep. 30, 2021USD ($)$ / shares | Feb. 16, 2021USD ($) | Dec. 31, 2020USD ($)$ / shares |
Organization [Line Items] | ||||
Working capital | $ 237,200,000 | |||
Cash, cash equivalents, and marketable securities | 251,600,000 | |||
Accumulated deficit | (538,107,000) | $ (444,104,000) | ||
Cost of capped call | 33,000,000 | |||
Proceeds from secured debt, net of debt discount and capped call | $ 199,400,000 | |||
Common Stock, Par or Stated Value Per Share | $ / shares | $ 0.001 | $ 0.001 | ||
Price per share of common stock | $ / shares | $ 9.50 | |||
Preferred Stock, Dividend Rate, Percentage | 5.00% | |||
Preferred Stock, Par or Stated Value Per Share | $ / shares | $ 0.001 | |||
Potential Termination Fee Related To Merger | $ 60,100,000 | |||
Transaction-related costs | $ 6,000,000 | |||
Percentage of bonus payable when Merger Agreement is fully executed | 25 | |||
Percentage of bonus payable on closing | 75 | |||
Employment contract related costs | $ 1,400,000 | |||
Dr. Waksal [Member] | ||||
Organization [Line Items] | ||||
Retention bonuses payable | 3,500,000 | |||
Mr. Meehan and Mr. Moss [Member] | ||||
Organization [Line Items] | ||||
Retention bonuses payable | $ 1,000,000 | |||
Convertible Preferred Stock [Member] | ||||
Organization [Line Items] | ||||
Preferred Stock, Dividend Rate, Percentage | 5.00% | |||
Preferred Stock, Par or Stated Value Per Share | $ / shares | $ 0.001 | $ 0.001 | ||
Senior Notes, Due 2027 [Member] | ||||
Organization [Line Items] | ||||
Borrowings, face amount | $ 240,000,000 | |||
Interest rate | 3.625% | 3.625% | ||
2020 Registration Statement [Member] | ||||
Organization [Line Items] | ||||
Registration statement, authorized amount | $ 300,000,000 | |||
2020 Registration Statement [Member] | Common Stock [Member] | ||||
Organization [Line Items] | ||||
Registration statement, authorized amount | $ 50,000,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Narrative) (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021USD ($)contractsecurity | Sep. 30, 2021USD ($)contractsegmentsecurity | Feb. 16, 2021USD ($) | Dec. 31, 2020USD ($) | |
Summary Of Significant Accounting Policies [Line Items] | ||||
Number of operating segments | segment | 1 | |||
Number of securities in unrealized loss position, less than a year | contract | 29 | 29 | ||
Number of securities in unrealized loss position, more than 12 months | security | 0 | 0 | ||
Fair value of debt securities in unrealized loss positions | $ 133,200,000 | $ 133,200,000 | ||
Gross unrealized losses | 110,000 | 110,000 | $ 32,000 | |
Rebates expense | 700,000 | |||
Estimated rebates earned but unpaid | 700,000 | 700,000 | ||
Sales returns reserve | 200,000 | 200,000 | ||
Sales returns expense | 200,000 | |||
Reserve for wholesaler chargebacks and rebates | 200,000 | 200,000 | ||
Wholesaler chargebacks and rebates expense | 800,000 | |||
Patient Assistance Programs Expense | 100,000 | |||
Patient Assistance Program Liability | $ 100,000 | |||
License Revenue [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Number of performance obligations | contract | 0 | |||
License revenue | 2,000,000 | $ 6,000,000 | ||
Minimum [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Debt securities maturity period | 6 months | |||
Minimum [Member] | Net Sales [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Payment term | 30 days | |||
Maximum [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Debt securities maturity period | 18 months | |||
Gross unrealized losses | 100,000 | $ 100,000 | ||
Maximum [Member] | Net Sales [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Payment term | 60 days | |||
Customer Concentration Risk [Member] | Net Accounts Receivable [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Revenue percentage | 36.00% | |||
Concentration Risk, Percentage | 36.00% | |||
Accounts Receivable, before Allowance for Credit Loss | $ 6,400,000 | $ 6,400,000 | ||
Product Concentration Risk [Member] | Net Accounts Receivable [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Revenue percentage | 64.00% | |||
Concentration Risk, Percentage | 64.00% | |||
Product Concentration Risk [Member] | Net Accounts Receivable [Member] | REZUROCK Product Sales [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Revenue percentage | 96.00% | |||
Concentration Risk, Percentage | 96.00% | |||
Senior Notes, Due 2027 [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Borrowings, face amount | $ 240,000,000 | |||
Interest rate | 3.625% | 3.625% | 3.625% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Summary of Cash, Cash Equivalents and Marketable Debt Securities) (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 251,746 | $ 123,886 |
Gross Unrealized Gains | 11 | 4 |
Gross Unrealized Losses | (110) | (32) |
Fair Value | 251,647 | 123,858 |
Corporate Debt Securities [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value | 182,821 | 49,435 |
Cash and Cash Equivalents [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 68,826 | 74,423 |
Gross Unrealized Gains | ||
Gross Unrealized Losses | ||
Fair Value | 68,826 | 74,423 |
Cash and Cash Equivalents [Member] | Cash and Money Market Funds [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 68,826 | 71,382 |
Gross Unrealized Gains | ||
Gross Unrealized Losses | ||
Fair Value | 68,826 | 71,382 |
Cash and Cash Equivalents [Member] | Corporate Debt Securities [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 3,041 | |
Gross Unrealized Gains | ||
Gross Unrealized Losses | ||
Fair Value | 3,041 | |
Marketable Debt Securities [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 182,920 | 49,463 |
Gross Unrealized Gains | 11 | 4 |
Gross Unrealized Losses | (110) | (32) |
Fair Value | 182,821 | 49,435 |
Marketable Debt Securities [Member] | Corporate Debt Securities [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 182,920 | 49,463 |
Gross Unrealized Gains | 11 | 4 |
Gross Unrealized Losses | (110) | (32) |
Fair Value | $ 182,821 | $ 49,435 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Disaggregation of Revenue) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 14,706 | $ 490 | $ 15,466 | $ 7,673 |
REZUROCK Product Sales [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 12,215 | 12,215 | ||
Other Product Sales [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 8 | 339 | 392 | 1,227 |
Net Sales [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 12,223 | 339 | 12,607 | 1,227 |
License Revenue [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 2,000 | 2,000 | 6,000 | |
Other Revenue [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 483 | $ 151 | $ 859 | $ 446 |
Stockholders_ Equity (Narrative
Stockholders’ Equity (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions | 9 Months Ended | |||
Sep. 30, 2021 | Feb. 10, 2021 | Dec. 31, 2020 | Apr. 01, 2016 | |
Equity [Line Items] | ||||
Convertible preferred stock rate | 5.00% | |||
Unit price | $ 8.71 | $ 5.35 | $ 4.15 | $ 12 |
Preferred stock conversion price | $ 9.60 | |||
Common stock, shares authorized | 400,000,000 | 400,000,000 | ||
Common stock, par value | $ 0.001 | $ 0.001 | ||
Convertible Preferred Stock [Member] | ||||
Equity [Line Items] | ||||
Preferred stock outstanding | 28,708 | 28,708 | ||
Convertible preferred stock rate | 5.00% | |||
Liquidation preference | $ 36.5 | |||
Beneficial conversion feature, discount percentage | 20.00% |
Net Loss per Share Attributab_3
Net Loss per Share Attributable to Common Stockholders (Computation of Basic and Diluted Net Income (Loss) per Share Attributable to Common Stockholders) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Net Loss per Share Attributable to Common Stockholders [Abstract] | ||||
Net loss available to common stockholders - basic and diluted | $ (34,194) | $ (25,149) | $ (94,003) | $ (82,633) |
Weighted average shares of common stock outstanding used to compute basic and diluted net loss per share | 173,443,975 | 169,310,056 | 172,373,463 | 165,107,295 |
Net loss per share, basic and diluted | $ (0.20) | $ (0.15) | $ (0.55) | $ (0.50) |
Net Loss per Share Attributab_4
Net 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 | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total shares of common stock equivalents | 68,930,549 | 32,941,988 |
Options To Purchase Common Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total shares of common stock equivalents | 24,310,370 | 17,357,285 |
Warrants [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total shares of common stock equivalents | 6,261,586 | 11,917,052 |
Convertible Preferred Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total shares of common stock equivalents | 3,851,033 | 3,667,651 |
Convertible Notes [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total shares of common stock equivalents | 34,507,560 |
Debt (Narrative) (Details)
Debt (Narrative) (Details) | Feb. 10, 2021$ / shares | Apr. 15, 2020USD ($) | Sep. 30, 2021USD ($)item$ / shares | Sep. 30, 2020USD ($) | Feb. 28, 2021USD ($) | Feb. 16, 2021USD ($) | Dec. 31, 2020$ / shares | Apr. 01, 2016$ / shares |
Debt Instrument [Line Items] | ||||||||
Common stock, price per share | $ / shares | $ 5.35 | $ 8.71 | $ 4.15 | $ 12 | ||||
Cap stock price | $ / shares | $ 10.70 | |||||||
Coverage as a percent of share price | 100.00% | |||||||
Cost of capped call | $ 33,000,000 | |||||||
Proceeds from issuance of term debt | $ 3,057,000 | |||||||
Senior Notes, Due 2027 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Total borrowings | $ 240,000,000 | |||||||
Interest rate | 3.625% | 3.625% | ||||||
Debt discount | $ 6,814,000 | $ 7,600,000 | ||||||
Debt conversion ratio | 0.1437815 | |||||||
Conversion price | $ / shares | $ 6.96 | |||||||
Share price premium percent | 30.00% | |||||||
Trading days prior to maturity to convert | item | 40 | |||||||
Percentage of trading price per share for conversion | 130.00% | |||||||
Trading days triggering conversion option | item | 20 | |||||||
Consecutive trading days triggering conversion option | item | 30 | |||||||
Fundamental change purchase price as percentage of principal | 100.00% | |||||||
CARES Act Loan [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Proceeds from issuance of term debt | $ 3,100,000 | |||||||
Other Income | $ 3,100,000 |
Debt (Schedule of Carrying Valu
Debt (Schedule of Carrying Value of Notes) (Details) - Senior Notes, Due 2027 [Member] - USD ($) $ in Thousands | Sep. 30, 2021 | Feb. 28, 2021 |
Debt Instrument [Line Items] | ||
Gross proceeds | $ 240,000 | |
Unamortized debt discount | (6,814) | $ (7,600) |
Carrying value | $ 233,186 |
Debt (Schedule of Interest Expe
Debt (Schedule of Interest Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Debt Instrument [Line Items] | ||||
Amortization of debt discount | $ 792 | |||
Interest expense | $ 2,492 | $ 8 | 6,218 | $ 13 |
Senior Notes, Due 2027 [Member] | ||||
Debt Instrument [Line Items] | ||||
Stated Interest | 2,175 | 5,413 | ||
Amortization of debt discount | 316 | 792 | ||
Interest expense | $ 2,491 | $ 6,205 |
Financial Instruments (Narrativ
Financial Instruments (Narrative) (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||
Aug. 31, 2016$ / sharesshares | Sep. 30, 2021USD ($)item$ / sharesshares | Sep. 30, 2020USD ($) | Jun. 30, 2021USD ($) | Sep. 30, 2021USD ($)item$ / sharesshares | Sep. 30, 2020USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2020USD ($)shares | |
Financial Instruments [Line Items] | ||||||||
Convertible debt fair value | $ 348,300 | $ 348,300 | ||||||
Equity securities fair value | $ 9,196 | 9,196 | $ 10,564 | |||||
Equity securities, unrealized loss | $ 1,368 | $ 12,975 | ||||||
Realized gain on equity securities | $ 4,274 | 19,784 | ||||||
Common Stock, Shares, Issued | shares | 176,489,990 | 176,489,990 | 171,530,045 | |||||
Warrants outstanding, shares | shares | 6,261,586 | 6,261,586 | 10,582,119 | |||||
MeiraGTx Ltd. [Member] | ||||||||
Financial Instruments [Line Items] | ||||||||
Ownership percentage | 1.60% | |||||||
Equity securities fair value | $ 9,200 | $ 9,200 | $ 10,600 | |||||
Equity securities, unrealized loss | 1,600 | 3,300 | $ 1,400 | 32,800 | ||||
Realized gain on equity securities | 0 | 4,200 | 0 | 15,500 | ||||
Warrants [Member] | ||||||||
Financial Instruments [Line Items] | ||||||||
Fair value of liability | $ 3,408 | $ 3,408 | $ 1,082 | |||||
2015 Credit Agreement, Warrants [Member] | ||||||||
Financial Instruments [Line Items] | ||||||||
Warrants to purchase | $ 6,300 | |||||||
Common units converted to warrants | shares | 617,651 | |||||||
Strike price | $ / shares | $ 10.20 | $ 4.50 | $ 4.50 | |||||
Warrants outstanding, shares | shares | 88,238 | 88,238 | ||||||
Expected term | 10 months 24 days | 10 months 24 days | ||||||
Change in fair value of warrant | $ 2,700 | $ (600) | $ 2,300 | $ (500) | ||||
Warrants exercised | shares | 0 | 0 | ||||||
2015 Credit Agreement, Warrants [Member] | Expected Dividend Yield [Member] | ||||||||
Financial Instruments [Line Items] | ||||||||
Warrants and Rights Outstanding, Measurement Input | item | 0 | 0 | ||||||
2015 Credit Agreement, Warrants [Member] | Expected Volatility [Member] | ||||||||
Financial Instruments [Line Items] | ||||||||
Warrants and Rights Outstanding, Measurement Input | item | 0.850 | 0.850 | ||||||
2015 Credit Agreement, Warrants [Member] | Risk Free Interest Rate [Member] | ||||||||
Financial Instruments [Line Items] | ||||||||
Warrants and Rights Outstanding, Measurement Input | item | 0.001 | 0.001 | ||||||
2015 Credit Agreement, Fifth Amendment [Member] | ||||||||
Financial Instruments [Line Items] | ||||||||
Strike price | $ / shares | $ 3.30 | $ 3.30 | ||||||
Warrants outstanding, shares | shares | 529,413 | 529,413 |
Financial Instruments (Fair Val
Financial Instruments (Fair Values of Financial Instruments) (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Financial Instruments [Line Items] | ||
Debt securities | $ 251,647 | $ 123,858 |
Equity securities fair value | 9,196 | 10,564 |
Financial assets | 252,956 | 130,507 |
Quoted Prices in Active Markets for Identical Items (Level 1) [Member] | ||
Financial Instruments [Line Items] | ||
Financial assets | 70,135 | 78,031 |
Significant Other Observable Inputs (Level 2) [Member] | ||
Financial Instruments [Line Items] | ||
Financial assets | 182,821 | 52,476 |
Money Market Funds [Member] | ||
Financial Instruments [Line Items] | ||
Cash equivalents | 60,939 | 67,467 |
Money Market Funds [Member] | Quoted Prices in Active Markets for Identical Items (Level 1) [Member] | ||
Financial Instruments [Line Items] | ||
Cash equivalents | 60,939 | 67,467 |
Corporate Debt Securities [Member] | ||
Financial Instruments [Line Items] | ||
Cash equivalents | 3,041 | |
Debt securities | 182,821 | 49,435 |
Corporate Debt Securities [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Financial Instruments [Line Items] | ||
Cash equivalents | 3,041 | |
Debt securities | 182,821 | 49,435 |
Ownership of MeiraGTx[Member] | ||
Financial Instruments [Line Items] | ||
Equity securities fair value | 9,196 | 10,564 |
Ownership of MeiraGTx[Member] | Quoted Prices in Active Markets for Identical Items (Level 1) [Member] | ||
Financial Instruments [Line Items] | ||
Equity securities fair value | 9,196 | 10,564 |
Warrants [Member] | ||
Financial Instruments [Line Items] | ||
Financial liabilities | 3,408 | 1,082 |
Warrants [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Financial Instruments [Line Items] | ||
Financial liabilities | $ 3,408 | $ 1,082 |
Financial Instruments (Rollforw
Financial Instruments (Rollforward of Level 2 Investments) (Details) - Significant Other Observable Inputs (Level 2) [Member] $ in Thousands | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Financial Instruments [Line Items] | |
Balance | $ 1,082 |
Change in fair value of warrant liabilities | 2,326 |
Balance | $ 3,408 |
Financial Instruments (Warrants
Financial Instruments (Warrants Outstanding) (Details) | 9 Months Ended |
Sep. 30, 2021$ / sharesshares | |
Financial Instruments [Abstract] | |
Warrants, Balance | shares | 10,582,119 |
Warrants, Exercised | shares | (4,320,533) |
Warrants, Balance | shares | 6,261,586 |
Weighted Average Exercise Price, Balance | $ / shares | $ 6.30 |
Weighted Average Exercise Price, Exercised | $ / shares | 3.35 |
Weighted Average Exercise Price, Balance | $ / shares | $ 8.34 |
Inventories (Narrative) (Detail
Inventories (Narrative) (Details) $ in Millions | Sep. 30, 2021USD ($) |
REZUROCK Product [Member] | |
Inventory [Line Items] | |
Inventory costs to be capitalized | $ 0.1 |
Inventories (Schedule of Invent
Inventories (Schedule of Inventories) (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Inventories [Abstract] | ||
Raw materials | ||
Finished goods, net | 22 | 102 |
Total inventories, net | $ 22 | $ 102 |
Fixed Assets (Narrative) (Detai
Fixed Assets (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Fixed Assets [Abstract] | ||||
Depreciation and amortization of fixed assets | $ 100 | $ 500 | $ 647 | $ 1,263 |
Fixed Assets (Fixed Assets) (De
Fixed Assets (Fixed Assets) (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | ||
Fixed assets, gross | $ 19,707 | $ 19,732 |
Less accumulated depreciation and amortization | (18,822) | (18,445) |
Fixed assets, net | 885 | 1,287 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Fixed assets, gross | 10,397 | 10,398 |
Office Equipment and Furniture [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Fixed assets, gross | 1,244 | 1,363 |
Machinery and Laboratory Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Fixed assets, gross | 3,963 | 3,835 |
Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Fixed assets, gross | $ 4,103 | $ 4,136 |
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 |
License Agreements (Narrative)
License Agreements (Narrative) (Details) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2021USD ($) | Sep. 30, 2021USD ($)contract | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||
Noncontrolling Interest | $ 580 | $ 580 |
50% of the net income of NTLS | 50.00% | |
License Revenue [Member] | ||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||
License revenue | $ 2,000 | $ 6,000 |
Number of performance obligations | contract | 0 | |
License Agreement, Surface Logix, Inc. (“SLx”) [Member] | ||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||
Royalty expense | $ 600 | |
NT Life Sciences, LLC (NTLS) [Member] | ||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||
Ownership percentage | 50.00% | |
Estimated percentage of royalty based on net sales of products | 9.75% | |
Royalty expense | $ 1,200 | |
Estimated percentage of sublicensing revenue | 5.00% | |
NT Life Sciences, LLC (NTLS) [Member] | Consolidation, Eliminations [Member] | ||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||
Royalty expense | $ 1,200 | |
NT Life Sciences, LLC (NTLS) [Member] | Maximum [Member] | ||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||
Estimated percentage of sublicensing revenue | 10.00% |
Share-based Compensation (Narra
Share-based Compensation (Narrative) (Details) - USD ($) | Jan. 01, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Feb. 10, 2021 | Apr. 01, 2016 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Stock Price | $ 8.71 | $ 8.71 | $ 4.15 | $ 5.35 | $ 12 | ||||
Share-based compensation, options outstanding, weighted average remaining contractual term (years) | 7 years 8 months 8 days | 7 years 1 month 9 days | |||||||
Share based compensation, options outstanding, aggregate intrinsic value | $ 99,960,000 | $ 99,960,000 | $ 7,365,000 | ||||||
Options outstanding | 23,327,870 | 23,327,870 | 16,000,685 | ||||||
Options outstanding, Exercise price | $ 4.81 | $ 4.81 | $ 5.29 | ||||||
Options Outstanding, Units, Exercised | 1,252,894 | ||||||||
Stock options exercised, intrinsic value | $ 2,019,000 | ||||||||
Options Outstanding, Value, Exercised | $ 10,011,000 | $ 280,000 | $ 11,369,000 | $ 929,000 | |||||
Share based compensation, options granted | 9,837,493 | 4,966,040 | |||||||
Performance Awards [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Options vested | 1,290,000 | 962,502 | |||||||
Options Outstanding, Units, Exercised | 307,500 | 0 | |||||||
Stock Appreciation Rights [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Weighted average period for recognition of compensation expense | 3 years | ||||||||
Share-based compensation, options outstanding, weighted average remaining contractual term (years) | 6 years 2 months 12 days | ||||||||
Share based compensation, options outstanding, aggregate intrinsic value | $ 3,300,000 | $ 3,300,000 | $ 500,000 | ||||||
Options outstanding | 655,000 | 655,000 | 835,000 | ||||||
Options outstanding, Exercise price | $ 3.64 | $ 3.64 | |||||||
Options vested | 835,000 | 835,000 | |||||||
Options Outstanding, Units, Exercised | 180,000 | 0 | |||||||
2016 Equity Incentive Plan [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Shares authorized for issuance | 21,785,738 | ||||||||
Additional units available for grant | 6,861,201 | ||||||||
Increase in authorized shares as a percentage of common stock issued | 4.00% | ||||||||
Unrecognized compensation expense | $ 26,000,000 | $ 26,000,000 | $ 11,900,000 | ||||||
Weighted average period for recognition of compensation expense | 2 years | 1 year 10 months 24 days | |||||||
Stock compensation expense | 3,523,000 | $ 2,453,000 | $ 11,144,000 | $ 7,111,000 | |||||
2016 Equity Incentive Plan [Member] | Performance Awards [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Share-based compensation, options outstanding, weighted average remaining contractual term (years) | 6 years 6 months | ||||||||
Share based compensation, options outstanding, aggregate intrinsic value | $ 4,600,000 | $ 4,600,000 | $ 300,000 | ||||||
Options outstanding | 982,500 | 982,500 | 1,290,000 | ||||||
Options outstanding, Exercise price | $ 4.06 | $ 4.06 | |||||||
Service period | 3 years | ||||||||
2014 Long-Term Incentive Plan (“LTIP”) [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Options Outstanding, Units, Exercised | 0 | ||||||||
Equity instruments granted | 9,750 | 9,750 | |||||||
Equity instruments base price | $ 6 | ||||||||
Equity instrument payable, common stock value percent above grant price | 333.00% | ||||||||
Equity instrument payable, common stock value | $ 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 | ||||||||
Stock compensation expense | $ 0 | ||||||||
Share based compensation, options granted | 94,420 | 98,840 | |||||||
Maximum [Member] | 2016 Equity Incentive Plan [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Increase in authorized shares annual percentage | 4.00% |
Share-based Compensation (Summa
Share-based Compensation (Summary of share-based compensation expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Compensation Items [Abstract] | ||||
Research and development | $ 18,850 | $ 17,268 | $ 52,649 | $ 46,658 |
2016 Equity Incentive Plan [Member] | ||||
Compensation Items [Abstract] | ||||
General and Administrative | 2,554 | 1,745 | 8,115 | 4,916 |
Research and development | 969 | 708 | 3,029 | 2,195 |
Total stock-based compensation expense | $ 3,523 | $ 2,453 | $ 11,144 | $ 7,111 |
Share-based Compensation (Stock
Share-based Compensation (Stock Options Outstanding) (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Share-based Compensation [Abstract] | |||
Options Outstanding, Units, Beginning Balance | 16,000,685 | ||
Options Outstanding, Units, Granted | 9,837,493 | 4,966,040 | |
Options Outstanding, Units, Exercised | (1,252,894) | ||
Options Outstanding, Units, Forfeited | (1,257,414) | ||
Options Outstanding, Units, Ending Balance | 23,327,870 | 16,000,685 | |
Options Vested and Exercisable, Units | 10,496,431 | ||
Options Outstanding, Weighted Average Exercise Price, Beginning Balance | $ 5.29 | ||
Options Outstanding, Weighted Average Exercise Price, Granted | 3.96 | $ 4.35 | |
Options Outstanding, Weighted Average Exercise Price, Exercised | 3.72 | ||
Options Outstanding, Weighted Average Exercise Price, Forfeited | 5.25 | ||
Options Outstanding, Weighted Average Exercise Price, Ending Balance | 4.81 | $ 5.29 | |
Options Vested and Exercisable, Weighted Average Exercise Price | $ 5.83 | ||
Options Outstanding, Weighted Average Remaining Contractual Term (years) | 7 years 8 months 8 days | 7 years 1 month 9 days | |
Options Vested and Exercisable, Weighted Average Remaining Contractual Term (years) | 6 years 29 days | ||
Options Outstanding, Aggregate Intrinsic Value | $ 99,960 | $ 7,365 | |
Options exercised, aggregate intrinsic value | 2,019 | ||
Options Vested and Exercisable, Aggregate Intrinsic Value | $ 39,287 |
Share-based Compensation (Weigh
Share-based Compensation (Weighted-average Fair Value of Stock Option Awards Granted) (Details) - $ / shares | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share based compensation, options granted | 9,837,493 | 4,966,040 |
Weighted average exercise price | $ 3.96 | $ 4.35 |
Options To Purchase Common Stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted average fair value of grants | $ 2.85 | $ 2.87 |
Expected dividend yield | 0.00% | 0.00% |
Options To Purchase Common Stock [Member] | Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected volatility | 87.20% | 75.46% |
Risk-free interest rate | 0.05% | 0.29% |
Expected life (years) | 10 months 13 days | 5 years 6 months |
Options To Purchase Common Stock [Member] | Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected volatility | 127.92% | 84.95% |
Risk-free interest rate | 1.03% | 1.64% |
Expected life (years) | 6 years |
Accrued Expenses (Narrative) (D
Accrued Expenses (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Accrued Expenses [Abstract] | |||
Non-cash gain on settlement of obligation | $ 1,626 | $ 458 | $ 1,754 |
Accrued Expenses (Short-term Ac
Accrued Expenses (Short-term Accrued Expenses) (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Accrued Expenses [Abstract] | ||
Compensation and benefits | $ 4,937 | $ 5,585 |
Research and development | 6,728 | 4,183 |
Interest | 1,088 | 20 |
Other | 2,485 | 1,746 |
Total accrued expenses | $ 15,238 | $ 11,534 |
Commitments and Contingencies (
Commitments and Contingencies (Narrative) (Details) $ in Millions | Sep. 30, 2021USD ($) |
Commitments and Contingencies [Abstract] | |
Contingent milestone payments | $ 229.1 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Income Tax Disclosure [Line Items] | |||||
Change in deferred tax liability | $ 0 | $ 0 | $ 0 | $ 0 | |
Income tax expense (benefit) | $ 0 | $ 0 | $ 0 | $ 0 | |
Federal [Member] | |||||
Income Tax Disclosure [Line Items] | |||||
Net operating loss carryforwards | $ 408,400,000 | ||||
Operating loss carryforwards with expiration | 291,100,000 | ||||
Operating loss carryforwards, no expiration | 117,300,000 | ||||
Operating Loss Carryforwards, Expiration Date | Dec. 31, 2037 | ||||
State [Member] | |||||
Income Tax Disclosure [Line Items] | |||||
Net operating loss carryforwards | 349,600,000 | ||||
Operating loss carryforwards with expiration | $ 349,600,000 | ||||
Operating Loss Carryforwards, Expiration Date | Dec. 31, 2040 |