Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Oct. 25, 2019 | |
Document Document And Entity Information [Abstract] | ||
Entity Current Reporting Status | Yes | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | Prothena Corp plc | |
Entity Central Index Key | 0001559053 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Ordinary Shares Outstanding | 39,896,561 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 390,304 | $ 427,659 |
Prepaid expenses and other current assets | 18,898 | 3,731 |
Total current assets | 409,202 | 431,390 |
Non-current assets: | ||
Property and equipment, net | 4,245 | 52,835 |
Operating lease right-of-use assets | 24,607 | 0 |
Deferred tax assets | 9,459 | 9,702 |
Restricted cash, non-current | 2,704 | 4,056 |
Other non-current assets | 677 | 813 |
Total non-current assets | 41,692 | 67,406 |
Total assets | 450,894 | 498,796 |
Current liabilities: | ||
Accounts payable | 2,418 | 1,470 |
Accrued research and development | 4,253 | 5,370 |
Income taxes payable, current | 12 | 54 |
Lease liability, current | 5,002 | 0 |
Build-to-suit lease obligation, current | 0 | 1,645 |
Restructuring liability | 0 | 461 |
Other current liabilities | 20,078 | 5,926 |
Total current liabilities | 31,763 | 14,926 |
Non-current liabilities: | ||
Deferred revenue | 110,242 | 110,242 |
Deferred rent | 0 | 176 |
Lease liability, non-current | 19,161 | 0 |
Build-to-suit lease obligation, non-current | 0 | 49,901 |
Other liabilities | 553 | 553 |
Total non-current liabilities | 129,956 | 160,872 |
Total liabilities | 161,719 | 175,798 |
Commitments and contingencies (Note 6) | ||
Shareholders’ equity: | ||
Euro deferred shares | 0 | 0 |
Ordinary shares | 399 | 399 |
Additional paid-in capital | 939,107 | 920,594 |
Accumulated deficit | (650,331) | (597,995) |
Total shareholders’ equity | 289,175 | 322,998 |
Total liabilities and shareholders’ equity | $ 450,894 | $ 498,796 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) | Sep. 30, 2019$ / sharesshares | Sep. 30, 2019€ / sharesshares | Dec. 31, 2018$ / sharesshares | Dec. 31, 2018€ / sharesshares |
Statement of Financial Position [Abstract] | ||||
Euro deferred shares, nominal value (in euros per share) | € / shares | € 22 | € 22 | ||
Euro deferred shares, number of shares authorized (in shares) | 10,000 | 10,000 | 10,000 | 10,000 |
Euro deferred shares, number of issued shares (in shares) | 0 | 0 | 0 | 0 |
Euro deferred shares, number of outstanding shares (in shares) | 0 | 0 | 0 | 0 |
Ordinary shares, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | ||
Ordinary shares, number of authorized shares (in shares) | 100,000,000 | 100,000,000 | 100,000,000 | 100,000,000 |
Ordinary shares, number of issued shares (in shares) | 39,896,561 | 39,896,561 | 39,863,711 | 39,863,711 |
Ordinary shares, number of outstanding shares (in shares) | 39,896,561 | 39,896,561 | 39,863,711 | 39,863,711 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | ||||
Collaboration revenue | $ 205 | $ 255 | $ 558 | $ 761 |
Total revenue | 205 | 255 | 558 | 761 |
Operating expenses: | ||||
Research and development | 12,486 | 18,515 | 35,365 | 84,673 |
General and administrative | 8,691 | 9,235 | 27,677 | 34,456 |
Restructuring charges (credits) | 0 | (3,172) | (61) | 17,732 |
Total operating expenses | 21,177 | 24,578 | 62,981 | 136,861 |
Loss from operations | (20,972) | (24,323) | (62,423) | (136,100) |
Other income (expense): | ||||
Interest income, net | 2,034 | 791 | 6,634 | 1,822 |
Other income (expense), net | (42) | (65) | 176 | 73 |
Total other income, net | 1,992 | 726 | 6,810 | 1,895 |
Loss before income taxes | (18,980) | (23,597) | (55,613) | (134,205) |
Provision for (benefit from) income taxes | 468 | 962 | 510 | (1,021) |
Net loss | $ (19,448) | $ (24,559) | $ (56,123) | $ (133,184) |
Basic and diluted net loss per share (in dollars per share) | $ (0.49) | $ (0.62) | $ (1.41) | $ (3.38) |
Shares used to compute basic and diluted net loss per share (in shares) | 39,897 | 39,850 | 39,877 | 39,457 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Operating activities | ||
Net loss | $ (56,123) | $ (133,184) |
Adjustments to reconcile net loss to cash used in operating activities: | ||
Depreciation and amortization | 1,164 | 2,390 |
Share-based compensation | 18,298 | 20,253 |
Restructuring share-based compensation | 0 | 2,512 |
Deferred income taxes | (751) | 1,250 |
Interest expense under build-to-suit lease obligation | 0 | 2,761 |
Amortization of right-of-use assets | 3,923 | 0 |
Loss from disposal of fixed assets | 0 | 101 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 2 | 240 |
Prepaid and other assets | (15,033) | 5,412 |
Deferred revenue | 0 | 110,242 |
Accounts payable, accruals and other liabilities | 13,993 | (23,345) |
Restructuring liability | (461) | 4,344 |
Operating lease liabilities | (3,493) | 0 |
Net cash used in operating activities | (38,481) | (7,024) |
Investing activities | ||
Purchases of property and equipment | (449) | (432) |
Proceeds from disposal of fixed assets | 8 | 0 |
Net cash used in investing activities | (441) | (432) |
Financing activities | ||
Proceeds from subscription of ordinary shares | 0 | 39,758 |
Proceeds from issuance of ordinary shares upon exercise of stock options | 215 | 4,686 |
Reduction of build-to-suit lease obligation | 0 | (3,096) |
Net cash provided by financing activities | 215 | 41,348 |
Net increase (decrease) in cash, cash equivalents and restricted cash | (38,707) | 33,892 |
Cash, cash equivalents and restricted cash, beginning of the year | 431,715 | 421,676 |
Cash, cash equivalents and restricted cash, end of the period | 393,008 | 455,568 |
Supplemental disclosures of cash flow information | ||
Cash paid for income taxes, net of refunds | 1,200 | 1,101 |
Supplemental disclosures of non-cash investing and financing activities | ||
Acquisition of property and equipment included in accounts payable and accrued liabilities | 82 | 195 |
Right-of-use assets recorded upon adoption of ASC 842 | 28,530 | 0 |
Reduction of build-to-suit lease obligation upon adoption of ASC 842 | (51,546) | 0 |
Reduction of amounts capitalized under build-to-suit lease upon adoption of ASC 842 | (46,760) | 0 |
Reduction of capitalized interest under build-to-suit lease upon adoption of ASC 842 | $ (1,099) | $ 0 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows, Reconciliation of Cash, Cash Equivalents and Restricted Cash - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017 |
Statement of Cash Flows [Abstract] | ||||
Cash and cash equivalents | $ 390,304 | $ 427,659 | $ 451,512 | |
Restricted cash, non-current | 2,704 | 4,056 | 4,056 | |
Total cash, cash equivalents and restricted cash, end of the period | $ 393,008 | $ 431,715 | $ 455,568 | $ 421,676 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands | Total | Ordinary Share | Additional Paid-in Capital | Retained Earnings |
Beginning balance (in shares) at Dec. 31, 2017 | 38,482,764 | |||
Beginning balance at Dec. 31, 2017 | $ 407,189 | $ 385 | $ 849,154 | $ (442,350) |
Issuance of ordinary shares under share subscription agreement with Celgene (in shares) | 1,174,536 | |||
Issuance of ordinary shares under share subscription agreement with Celgene | 39,758 | $ 12 | 39,746 | |
Share-based compensation | 20,253 | 20,253 | ||
Restructuring share-based compensation | 948 | 948 | ||
Issuance of ordinary shares upon exercise of stock options (in shares) | 206,411 | |||
Issuance of ordinary shares upon exercise of stock options | 4,686 | $ 1 | 4,685 | |
Net loss | (133,184) | (133,184) | ||
Ending balance (in shares) at Sep. 30, 2018 | 39,863,711 | |||
Ending balance at Sep. 30, 2018 | 339,650 | $ 398 | 914,786 | (575,534) |
Beginning balance (in shares) at Jun. 30, 2018 | 39,831,836 | |||
Beginning balance at Jun. 30, 2018 | 356,006 | $ 398 | 906,583 | (550,975) |
Share-based compensation | 7,042 | 7,042 | ||
Restructuring share-based compensation | 948 | 948 | ||
Issuance of ordinary shares upon exercise of stock options (in shares) | 31,875 | |||
Issuance of ordinary shares upon exercise of stock options | 213 | 213 | ||
Net loss | (24,559) | (24,559) | ||
Ending balance (in shares) at Sep. 30, 2018 | 39,863,711 | |||
Ending balance at Sep. 30, 2018 | 339,650 | $ 398 | 914,786 | (575,534) |
Beginning balance (in shares) at Dec. 31, 2018 | 39,863,711 | |||
Beginning balance at Dec. 31, 2018 | 322,998 | $ 399 | 920,594 | (597,995) |
Share-based compensation | $ 18,298 | 18,298 | ||
Issuance of ordinary shares upon exercise of stock options (in shares) | 32,850 | 32,850 | ||
Issuance of ordinary shares upon exercise of stock options | $ 215 | 215 | ||
Net loss | (56,123) | (56,123) | ||
Ending balance (in shares) at Sep. 30, 2019 | 39,896,561 | |||
Ending balance at Sep. 30, 2019 | 289,175 | $ 399 | 939,107 | (650,331) |
Beginning balance (in shares) at Jun. 30, 2019 | 39,896,561 | |||
Beginning balance at Jun. 30, 2019 | 302,807 | $ 399 | 933,291 | (630,883) |
Share-based compensation | 5,816 | 5,816 | ||
Net loss | (19,448) | (19,448) | ||
Ending balance (in shares) at Sep. 30, 2019 | 39,896,561 | |||
Ending balance at Sep. 30, 2019 | $ 289,175 | $ 399 | $ 939,107 | $ (650,331) |
Organization
Organization | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization Description of Business Prothena Corporation plc (“Prothena” or the “Company”) is a clinical-stage neuroscience company focused on the discovery and development of novel therapies with the potential to fundamentally change the course of devastating neurological disorders. Fueled by its deep scientific understanding built over decades of neuroscience research, Prothena is advancing a pipeline of therapeutic candidates for a number of indications and novel targets including Parkinson’s disease and other related synucleinopathies (prasinezumab - PRX002/RG7935, in collaboration with Roche) and ATTR amyloidosis (PRX004), as well as tau for the potential treatment of Alzheimer’s disease and other neurodegenerative disorders and TDP-43 for the potential treatment of ALS (amyotrophic lateral sclerosis) and FTD (frontotemporal dementia) (both programs in collaboration with Celgene), for which its scientific understanding of disease pathology can be leveraged. The Company was formed on September 26, 2012 under the laws of Ireland and re-registered as an Irish public limited company on October 25, 2012. The Company's ordinary shares began trading on The Nasdaq Global Market under the symbol “PRTA” on December 21, 2012 and currently trade on The Nasdaq Global Select Market. Liquidity and Business Risks As of September 30, 2019 , the Company had an accumulated deficit of $650.3 million and cash and cash equivalents of $390.3 million . Based on the Company's business plans, management believes that the Company’s cash and cash equivalents at September 30, 2019 are sufficient to meet its obligations for at least the next twelve months. To operate beyond such period, or if the Company elects to increase its spending on research and development programs significantly above current long-term plans or enters into potential licenses and or other acquisitions of complementary technologies, products or companies, the Company may need additional capital. The Company expects to continue to finance future cash needs that exceed its cash from operating activities primarily through its current cash and cash equivalents, its collaborations with Roche and Celgene, and to the extent necessary, through proceeds from public or private equity or debt financings, loans and other collaborative agreements with corporate partners or other arrangements. The Company is subject to a number of risks, including but not limited to: the uncertainty of the Company’s research and development (“R&D”) efforts resulting in future successful commercial products; obtaining regulatory approval for its product candidates; its ability to successfully commercialize its product candidates, if approved; significant competition from larger organizations; reliance on the proprietary technology of others; dependence on key personnel; uncertain patent protection; dependence on corporate partners and collaborators; and possible restrictions on reimbursement from governmental agencies and healthcare organizations, as well as other changes in the healthcare industry. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Preparation and Presentation of Financial Information These accompanying Unaudited Interim Condensed Consolidated Financial Statements have been prepared in accordance with the accounting principles generally accepted in the U.S. (“GAAP”) and with the instructions for Form 10-Q and Regulation S-X statements. Accordingly, they do not include all of the information and notes required for complete financial statements. These interim Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Notes thereto contained in the Company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 15, 2019 (the “2018 Form 10-K”). These Unaudited Interim Condensed Consolidated Financial Statements are presented in U.S. dollars, which is the functional currency of the Company and its consolidated subsidiaries. These Unaudited Interim Condensed Consolidated Financial Statements include the accounts of the Company and its consolidated subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Unaudited Interim Financial Information The accompanying Unaudited Interim Condensed Consolidated Financial Statements and related disclosures are unaudited, have been prepared on the same basis as the annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for a fair presentation of the results of operations for the periods presented. The year-end condensed consolidated balance sheet data was derived from audited financial statements, however certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. The condensed consolidated results of operations for any interim period are not necessarily indicative of the results to be expected for the full year or for any other future year or interim period. Use of Estimates The preparation of the Condensed Consolidated Financial Statements in conformity with GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures. On an ongoing basis, management evaluates its estimates, including critical accounting policies or estimates related to revenue recognition, share-based compensation and research and development expenses. The Company bases its estimates on historical experience and on various other market specific and other relevant assumptions that management believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Because of the uncertainties inherent in such estimates, actual results may differ materially from these estimates. Significant Accounting Policies There were no significant changes to the accounting policies during the nine months ended September 30, 2019 , from the significant accounting policies described in Note 2 of the Notes to Consolidated Financial Statements in the 2018 Form 10-K, with the exception of those noted below. Loss Contingencies Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. The Company's accruals for losses are based on management's judgment of all possible outcomes and their financial effect, the probability of losses, and where applicable, the consideration of opinions of the Company's legal counsel. The Company’s accounting policy for legal costs related to loss contingencies is to accrue for the probable fees that can be reasonably estimated and expensed as incurred. Additionally, the Company records insurance recovery receivable from third party insurers when recovery has been determined to be probable. A s of September 30, 2019 , the Company has recorded a provision for legal settlement for $15.75 million within other current liabilities and a litigation insurance recovery receivable of $15.75 million , which represents the expected payment of the settlement by the Company’s insurance carriers, within prepaid expenses and other current assets on its Condensed Consolidated Balance Sheets. Recently Adopted Accounting Pronouncement In August 2018, the SEC issued Final Rule 33-10532, which updates and simplifies certain disclosure requirements. The rule was effective for filings on or after November 5, 2018. However, the SEC released guidance advising it will not object to a registrant adopting the requirement to include changes in stockholders' equity in the Form 10-Q for the first quarter beginning after the effective date of the rule (e.g. for a calendar year-end company, the first quarter of fiscal year 2019). The following amendments from the Final Rule 33-10532 are applicable to the Company: (1) an analysis of changes in stockholders' equity will now be required for the current and comparative year-to-date interim periods; and (2) for market price information, a registrant will disclose the ticker symbol of its common equity instead of disclosure of the high and low trading prices of an entity's common stock for specified quarterly periods. The Company's disclosure reflects the applicable amendments. In February 2016, the FASB issued Accounting Standards Update 2016-02 Topic 842, Leases ("ASC 842"), which requires lessees to recognize assets and liabilities for leases with lease terms of more than 12 months and disclose key information about leasing arrangements. ASC 842 was subsequently amended by ASU 2018-01, Land Easement Practical Expedient for Transition to Topic 842; ASU 2018-10, Codification Improvements to Topic 842, Leases; ASU 2018-11, Targeted Improvements; ASU 2018-20, Narrow-Scope Improvements for Lessors; and ASU 2019-01, Codification Improvements. Under the new standard, a lessee will recognize liabilities on the balance sheet, initially measured at the present value of the lease payments, and right-of-use (ROU) assets representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less at the commencement date, a lessee is permitted to make an accounting policy election not to recognize lease assets and lease liabilities. The new standard also eliminates the previous build-to-suit lease accounting guidance, which results in the derecognition of build-to-suit assets and liabilities that remained on the balance sheet after the end of the construction period. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. The new guidance requires both types of leases to be recognized on the balance sheet. The Company adopted the new standard on January 1, 2019 using the modified retrospective transition method wherein the effective date is its date of initial application. Consequently, prior period amounts are not adjusted and continue to be reported in accordance with the Company’s historical accounting under ASC 840. The new standard provides a number of optional practical expedients in transition. The Company elected the "package of practical expedients", which permitted the Company not to reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct cost. The Company did not elect the use-of-hindsight or the practical expedient pertaining to land easements; the latter not being applicable to the Company. For the Company's build-to-suit lease, Prothena has historically excluded executory costs, when part of the fixed payments in a lease contract, as part of the minimum rental payment disclosed in its financial statements footnote for the Current SSF Facility lease under ASC 840. Executory cost of a lease includes costs of taxes, insurance and maintenance (including common area maintenance). With the selection of practical expedient, the Company believes it is appropriate to continue applying the same accounting policy with its transition to ASC 842 (i.e. exclude the executory cost in determining the minimum rental payment). As of January 1, 2019, the Company recorded $3.8 million change to the opening balance of the accumulated deficit for the cumulative effect of applying ASC 842, which included a reduction of $1.0 million in deferred tax assets. See Note 6, “Commitments and Contingencies,” which provides additional details on the Company's current lease arrangements. The impact of the adoption of ASC 842 on the accompanying Condensed Consolidated Balance Sheet as of January 1, 2019 was as follows (in thousands): December 31, 2018 Adjustments due to the Adoption of Topic 842 January 1, 2019 Property and equipment, net $ 52,835 $ (47,859 ) $ 4,976 Operating lease right-of-use assets $ — $ 28,530 $ 28,530 Deferred tax assets $ 9,702 $ (994 ) $ 8,708 Lease liability, current $ — $ 4,717 $ 4,717 Other current liabilities (1) $ 5,926 $ (44 ) $ 5,882 Build-to-suit lease obligation, current $ 1,645 $ (1,645 ) $ — Lease liability, non-current $ — $ 22,939 $ 22,939 Build-to-suit lease obligation, non-current $ 49,901 $ (49,901 ) $ — Deferred rent, non-current $ 176 $ (176 ) $ — Accumulated deficit $ (597,995 ) $ 3,787 $ (594,208 ) __________________ (1) Amount as of December 31, 2018 includes Deferred rent, current. The adjustments due to the adoption of ASC 842 relate to (1) the change in classification of build-to-suit lease under ASC 840 for the Company's current facility in South San Francisco, California to an operating lease under ASC 842 and as a result the Company derecognized its build-to-suit asset of $47.9 million under Property and equipment, net as of December 31, 2018 and related liability of $51.5 million , and (2) recognized an operating lease right-of-use asset of $28.5 million and operating lease liability of $27.7 million on the condensed consolidated balance sheet for the Company's operating lease. The right-of-use asset includes tenant improvements added by the Company wherein the lessor was deemed the accounting owner, net of tenant improvement allowance paid by the lessor. The Company has no debt and has not had an established incremental borrowing rate. For the purpose of estimating the incremental borrowing rate in the adoption of ASC 842, the Company inquired with banks that had business relationship with the Company to determine the Company's collateralized incremental borrowing rate. The discount rate used to determine the lease liability was 4.25% . There is no change in the accounting of the Sub-Sublease of the Current SSF Facility upon adoption of ASC 842. Further, the Company's operating lease at Dublin is not included in the lease liability and right-of-use asset recorded due to its nominal amount. For the purpose of the adoption of ASC 842, the Company also performed an evaluation of its other contracts with customers and suppliers in accordance with ASC 842 and determined that, except for the office leases described in Note 6, “Commitments and Contingencies” (a nominal operating lease for medical monitoring equipment and a nominal operating lease for office equipment), none of the Company’s contracts contain a lease. Leases At the inception, the Company determines if an arrangement is a lease. If so, the Company evaluates the lease agreement to determine whether the lease is an operating or capital using the criteria in ASC 842. The Company does not recognize right-of-use assets and lease liabilities that arise from short-term leases for any class of underlying assets. When lease agreements also require the Company to make additional payments for taxes, insurance and other operating expenses incurred during the lease period, such payments are expensed as incurred. Operating Leases Operating leases are included in the operating lease right-of-use assets, lease liability, current and lease liability, non-current in the Company's Condensed Consolidated Balance Sheets. Operating lease right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized at the lease commencement date based on the present value of minimum lease payments over the lease term. In determining the present value of lease payments, the Company uses its incremental borrowing rate based on information available at the lease commencement date. The operating lease right-of-use assets also include any lease prepayments made and exclude lease incentives including rent abatements and/or concessions and rent holidays. Tenant improvements made by the Company as a lessee in which they are deemed to be owned by the lessor is viewed as lease prepayments by the Company and included in the operating lease right-of-use assets. Lease expense is recognized on a straight-line basis over the expected lease term. For lease agreements entered after the adoption of ASC 842 that include lease and non-lease components, such components are generally accounted separately. Segment and Concentration of Risks The Company operates in one segment. The Company’s chief operating decision maker (the “CODM”), its Chief Executive Officer, manages the Company’s operations on a consolidated basis for purposes of allocating resources. When evaluating the Company’s financial performance, the CODM reviews all financial information on a consolidated basis. Financial instruments that potentially subject the Company to concentration of credit risk consist of cash and cash equivalents and accounts receivable. The Company places its cash equivalents with high credit quality financial institutions and by policy, limits the amount of credit exposure with any one financial institution. Deposits held with banks may exceed the amount of insurance provided on such deposits. The Company has not experienced any losses on its deposits of cash and cash equivalents and its credit risk exposure is up to the extent recorded on the Company's Consolidated Balance Sheet. The receivable from Roche recorded in prepaid expenses and other current assets in the Condensed Consolidated Balance Sheet are amounts due from a Roche entity located in Switzerland under the License Agreement that became effective January 22, 2014. Revenue recorded in the Condensed Consolidated Statements of Operations consists of reimbursement from Roche for research and development services. The Company's credit risk exposure is up to the extent recorded on the Company's Condensed Consolidated Balance Sheet. As of September 30, 2019 , $4.2 million of the Company’s property and equipment, net were held in the U.S. and none were in Ireland. As of December 31, 2018 , $52.8 million of the Company's property and equipment, net were held in the U.S. and none were in Ireland. The Company does not own or operate facilities for the manufacture, packaging, labeling, storage, testing or distribution of nonclinical or clinical supplies of any of its drug candidates. The Company instead contracts with and relies on third-parties to manufacture, package, label, store, test and distribute all preclinical development and clinical supplies of our drug candidates, and it plans to continue to do so for the foreseeable future. The Company also relies on third-party consultants to assist in managing these third-parties and assist with its manufacturing strategy. Recent Accounting Pronouncements In November 2018, the FASB issued Accounting Standards Update 2018-18 ("ASU 2018-18"), Collaborative Arrangements: Clarifying the Interaction between Topic 808 and Topic 606, which clarifies when transactions between collaborative arrangement participants are in the scope of ASC 606 and provides some guidance on presentation of transactions not in the scope of ASC 606. This ASU is effective for public business entities for annual and interim periods in fiscal years beginning after December 15, 2019. Early adoption is permitted as long as entities have already adopted the guidance in ASC 606. The Company does not currently expect the adoption of ASU 2018-18 to have an impact on its consolidated financial statements. The Company will continue to evaluate the impact of ASU 2018-18 on its consolidated financial statements in connection with Roche License Agreement and Celgene Collaboration Agreement. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The Company measures certain financial assets and liabilities at fair value on a recurring basis, including cash equivalents. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. A three-tier fair value hierarchy is established as a basis for considering such assumptions and for inputs used in the valuation methodologies in measuring fair value: Level 1 — Observable inputs such as quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 — Include other inputs that are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant inputs are observable in the market or can be derived from observable market data. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs including interest rate curves, foreign exchange rates, and credit ratings. Level 3 — Unobservable inputs that are supported by little or no market activities, which would require the Company to develop its own assumptions. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The carrying amounts of certain financial instruments, such as cash equivalents, accounts receivable, accounts payable and accrued liabilities, approximate fair value due to their relatively short maturities, and low market interest rates, if applicable. Based on the fair value hierarchy, the Company classifies its cash equivalents within Level 1. This is because the Company values its cash equivalents using quoted market prices. The Company’s Level 1 securities consisted of $359.0 million and $306.2 million in money market funds included in cash and cash equivalents at September 30, 2019 and December 31, 2018 , respectively. |
Composition of Certain Balance
Composition of Certain Balance Sheet Items | 9 Months Ended |
Sep. 30, 2019 | |
Composition of Certain Balance Sheet Items [Abstract] | |
Composition of Certain Balance Sheet Items | Composition of Certain Balance Sheet Items Prepaid expenses and other current assets Prepaid expenses and other current assets consisted of the following (in thousands): September 30, December 31, 2019 2018 Litigation insurance recovery receivable (1) $ 15,750 $ — Other 3,148 3,731 Prepaid expenses and other current assets $ 18,898 $ 3,731 ______________________ (1) The Company has recorded a litigation insurance recovery receivable of $15.75 million as of September 30, 2019 within prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets, which represents the expected payment of the litigation settlement by the Company’s insurance carriers. See Note 6, “ Commitments and Contingencies ” . Property and Equipment, net Property and equipment, net consisted of the following (in thousands): September 30, December 31, 2019 2018 Machinery and equipment $ 9,319 $ 9,693 Leasehold improvements 1,245 98 Purchased computer software 1,303 1,303 Build-to-suit property (2) — 52,245 11,867 63,339 Less: accumulated depreciation and amortization (7,622 ) (10,504 ) Property and equipment, net $ 4,245 $ 52,835 ______________________ (2) The Company derecognized its build-to-suit asset for its current facility in South San Francisco, California on January 1, 2019 upon adoption of ASC 842 due to a change in classification of its build-to-suit lease under ASC 840 to an operating lease under ASC 842. Depreciation expense was $0.4 million and $1.2 million for the three and nine months ended September 30, 2019 , respectively, compared to $0.8 million and $2.4 million for the three and nine months ended September 30, 2018 , respectively. Other Current Liabilities Other current liabilities consisted of the following (in thousands): September 30, December 31, 2019 2018 Payroll and related expenses $ 3,647 $ 4,507 Provision for legal settlement (3) 15,750 — Professional services 353 1,097 Deferred rent — 44 Other 328 278 Other current liabilities $ 20,078 $ 5,926 ______________________ (3) As a result of signing of the memorandum of understanding and the potential liability becoming probable and estimable, the Company has recorded a provision for legal settlement for $15.75 million within other current liabilities on the Condensed Consolidated Balance Sheets as of September 30, 2019 . See Note 6, "Commitment and Contingencies". |
Net Loss Per Ordinary Share
Net Loss Per Ordinary Share | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Ordinary Share | Net Loss Per Ordinary Share Basic net income (loss) per ordinary share is calculated by dividing net income (loss) by the weighted-average number of ordinary shares outstanding during the period. Shares used in diluted net income per ordinary share would include the dilutive effect of ordinary shares potentially issuable upon the exercise of stock options outstanding. However, potentially issuable ordinary shares are not used in computing diluted net loss per ordinary share as their effect would be anti-dilutive due to the loss recorded during the three and nine months ended September 30, 2019 and 2018 , and therefore diluted net loss per share is equal to basic net loss per share. Net loss per ordinary share was determined as follows (in thousands, except per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Numerator: Net loss $ (19,448 ) $ (24,559 ) $ (56,123 ) $ (133,184 ) Denominator: Weighted-average ordinary shares outstanding 39,897 39,850 39,877 39,457 Net loss per share: Basic and diluted net loss per share $ (0.49 ) $ (0.62 ) $ (1.41 ) $ (3.38 ) The equivalent ordinary shares not included in diluted net loss per share because their effect would be anti-dilutive are as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Stock options to purchase ordinary shares 7,185 7,253 7,185 7,253 |
Commitment and Contingencies
Commitment and Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitment and Contingencies | Commitments and Contingencies Lease Commitments The Company adopted ASC 842 effective January 1, 2019. Prior period amounts have not been adjusted and continued to be reported in accordance with the Company’s historical accounting under ASC 840. For lease arrangements entered prior to the adoption of ASC 842, right-of-use asset and lease liability are determined based on the present value of minimum lease payments over the remaining lease term and the Company’s incremental borrowing rate based on information available as of January 1, 2019. The right-of-use asset also includes any lease prepayments made and excludes unamortized lease incentives including rent abatements and/or concessions and rent holidays. Tenant improvements made by the Company as a lessee in which they are deemed to be owned by the lessor is viewed as lease prepayments by the Company and are included in the right-of-use asset. Lease expense is recognized on a straight-line basis over the expected lease term. Total operating lease cost was $1.6 million and $4.8 million for the three and nine months ended September 30, 2019 , respectively. Total cash paid against the operating lease liability was $1.5 million and $4.3 million for the three and nine months ended September 30, 2019 , respectively. See Note 2,“Summary of Significant Accounting Policies,” which provides additional details on the Company's adoption of ASC 842. Prior to the adoption of ASC 842, the Company recognized rent expense for its operating leases on a straight-line basis over the noncancelable lease term and recorded the difference between cash rent payments and the recognition of rent expense as a deferred rent liability. Where leases contained escalation clauses, rent abatements and/or concessions, such as rent holidays and landlord or tenant incentives or allowances, the Company applied them in the determination of straight-line rent expense over the lease term. The Company recorded the tenant improvement allowance for operating leases as deferred rent and associated expenditures as leasehold improvements that were being amortized over the shorter of their estimated useful life or the term of the lease. Rent expense was $0.2 million and $0.6 million for the three and nine months ended September 30, 2018 , respectively. As of September 30, 2019 , the Company performed an evaluation of its other contracts with customers and suppliers in accordance with ASC 842 and have determined that, except for the leases described below, a nominal operating lease for medical monitoring equipment and a nominal operating lease for office equipment, none of the Company’s contracts contain a lease. Current SSF Facility In March 2016 , the Company entered into a noncancelable operating sublease (the “Lease”) to lease 128,751 square feet of office and laboratory space in South San Francisco, California, U.S. (the “Current SSF Facility”). Subsequently, in April 2016, the Company took possession of the Current SSF Facility. The Lease includes a free rent period and escalating rent payments and has a remaining lease term of 4.3 years that expires on December 31, 2023 , unless terminated earlier. The Company's obligation to pay rent commenced on August 1, 2016. The Company is obligated to make lease payments totaling approximately $39.2 million over the lease term. The Lease further provides that the Company is obligated to pay to the sublandlord and master landlord certain costs, including taxes and operating expenses. Prior to the adoption of ASC 842 on January 1, 2019, this Lease was considered a build-to-suit lease. In connection with this Lease, the Company received a tenant improvement allowance of $14.2 million from the sublandlord and the master landlord, for the costs associated with the design, development and construction of tenant improvements for the Current SSF Facility. The Company is obligated to fund all costs incurred in excess of the tenant improvement allowance. The scope of the tenant improvements did not qualify as “normal tenant improvements” under ASC 840. Accordingly, for accounting purposes, the Company was the deemed owner of the building during the construction period under ASC 840 and the Company capitalized $36.5 million within property and equipment, net, including $1.2 million for capitalized interest and recognized a corresponding build-to-suit obligation in other non-current liabilities in the Consolidated Balance Sheets as of December 31, 2018. The Company has also recognized structural and non-structural tenant improvements totaling $15.8 million as of December 31, 2018 as an addition to the build-to-suit lease property for amounts incurred by the Company during the construction period, of which $14.2 million were reimbursed by the landlord during the year ended December 31, 2016 through the tenant improvement allowance. Under ASC 840, the Company increased its financing obligation for the additional building costs reimbursements received from the landlord during the construction period. For the three and nine months ended September 30, 2018 , the Company recorded rent expense associated with the ground lease of $0.1 million and $0.4 million , respectively, in the Condensed Consolidated Statements of Operations. Total interest expense, which represents the cost of financing obligation under the Lease agreement, was $0.9 million and $2.8 million for the three and nine months ended September 30, 2018 , respectively, which was recognized in its Condensed Consolidated Statements of Operations. No corresponding amounts were recorded for the three and nine months ended September 30, 2019 due to the adoption of ASC 842. During the fourth quarter of 2016, construction on the build-to-suit lease property was substantially completed and the build-to-suit lease property was placed in service. As such, the Company evaluated the Lease under ASC 840 to determine whether it had met the requirements for sale-leaseback accounting, including evaluating whether all risks of ownership have been transferred back to the landlord, as evidenced by a lack of continuing involvement in the build-to-suit lease property. The Company determined that the construction project did not qualify for sale-leaseback accounting and was accounted for under ASC 840 as a financing lease, given the Company’s expected continuing involvement after the conclusion of the construction period. Prior to the adoption of the new lease guidance, ASC 842, the build-to-suit lease property was recorded on the Company’s Consolidated Balance Sheet as of December 31, 2018 at its historical cost of $52.3 million and the total amount of the build-to-suit lease obligation as of December 31, 2018 was $51.5 million , of which $1.6 million and $49.9 million were classified as current and non-current liability, respectively. The Lease is considered to be an operating lease under ASC 842 as it does not meet the criteria of a capital lease under ASC 840 and the construction was completed before the adoption of ASC 842. The Company derecognized the build-to-suit property and build-to-suit lease obligations upon adoption of ASC 842 and as of September 30, 2019 , the operating lease right-of-use asset and lease liability was $24.6 million and $24.2 million , respectively. The discount rate used to determine the lease liability was 4.25% . The Company obtained a standby letter of credit in April 2016 in the initial amount of $4.1 million , which may be drawn down by the sublandlord in the event the Company fails to fully and faithfully perform all of its obligations under the Lease and to compensate the sublandlord for all losses and damages the sublandlord may suffer as a result of the occurrence of any default on the part of Company not cured within the applicable cure period. This standby letter of credit is collateralized by a certificate of deposit of the same amount which is classified as restricted cash. The Company was entitled to a $1.4 million reduction in the face amount of the standby letter of credit on the third anniversary of the contractual rent commencement, which was received during the three months ended September 30, 2019 , and another $1.4 million on the fifth anniversary of the contractual rent commencement. As a condition to the reduction of the standby letter of credit amount, no uncured default by the Company shall then exist under the Lease. As of September 30, 2019 , none of the standby letter of credit amount of $2.7 million has been used. Sub-Sublease of Current SSF Facility On July 18, 2018 , the Company entered into a Sub-Sublease Agreement (the “Sub-Sublease”) with Assembly Biosciences, Inc. (the “Sub-Subtenant”) for Sub-Subtenant to sub-sublease from the Company approximately 46,641 square feet of office and laboratory space of the Company’s Current SSF Facility. Prior to the adoption of ASC 842 on January 1, 2019, this Sub-Sublease was considered an operating lease. There is no change in the accounting of the Sub-Sublease of the Current SSF Facility upon adoption of ASC 842. For the three and nine months ended September 30, 2019 , the Company recorded $0.7 million and $2.2 million , respectively, for sub-lease rental income as an offset to its operating expenses. The Sub-Sublease provides for initial annual base rent for the complete Sub-Subleased Premises of approximately $2.7 million , with increases of approximately 3.5% in annual base rent on September 1, 2019 and each anniversary thereof. The Sub-Sublease rental income excludes reimbursements for executory costs received from the Sub-Subtenant. The Sub-Sublease became effective on September 24, 2018 and has a term of 5.2 years which terminates on December 15, 2023 . The Sub-Sublease will terminate if the Master Lease or the Sublease terminates. The Company or the Sub-Subtenant may elect, subject to limitations set forth in the Sub-Sublease, to terminate the Sub-Sublease following a material casualty or condemnation affecting the Subleased Premises. The Company may terminate the Sub-Sublease following an event of default, which is defined in the Sub-Sublease to include, among other things, non-payment of amounts owing by the Sub-Subtenant under the Sub-Sublease. The Company is required under the Lease to pay to the sublandlord 50% of that portion of the cash sums and other economic consideration received from the Sub-Subtenant that exceeds the base rent paid by the Company to the sublandlord after deducting certain of the Company’s costs. Dublin In September 2018 , the Company entered into an agreement to lease 133 square feet of office space in Dublin, Ireland. The lease has a term of one year and expires on November 30, 2019 . The Dublin Lease also has an automatic renewal clause, in which the agreement will be extended automatically for successive periods equal to the current term but no less than three months , unless the agreement is cancelled by the Company. The Company renewed the Dublin Lease in August 2019 for one year and expires on November 30, 2020 . This operating lease is not included in the lease liability and operating lease right-of-use asset recorded due to its nominal amount. As of September 30, 2019 , the Company is obligated to make lease payments over the remaining term of the lease of approximately €28,000 , or $31,000 as converted using an exchange rate as of September 30, 2019 . Future minimum payments under the above-described noncancelable operating leases, including a reconciliation to the lease liabilities recognized in the Condensed Consolidated Balance Sheets, and future minimum rentals to be received under the Sub-Sublease as of September 30, 2019 are as follows (in thousands): Year Ended December 31, Operating Leases Sub-Sublease Rental 2019 (3 months) 1,482 $ 702 2020 6,004 2,843 2021 6,165 2,944 2022 6,350 3,047 2023 6,535 3,019 Total 26,536 $ 12,555 Less: Present value adjustment (2,343 ) Nominal lease payments (31 ) Lease liability $ 24,162 Under ASC 840, future minimum payments under operating lease, build-to-suit lease obligation and future minimum rentals to be received under the Sub-Sublease as of December 31, 2018 was as follows (in thousands): Year Ended December 31, Operating Lease Expected Cash Payments Under Build-To-Suit Lease Obligation Sub-Sublease Rental 2019 $ 23 $ 5,803 $ 2,746 2020 — 5,979 2,843 2021 — 6,165 2,944 2022 — 6,350 3,047 2023 — 6,535 3,019 Total $ 23 $ 30,832 $ 14,599 Indemnity Obligations The Company has entered into indemnification agreements with its current and former directors and officers and certain key employees. These agreements contain provisions that may require the Company, among other things, to indemnify such persons against certain liabilities that may arise because of their status or service and advance their expenses incurred as a result of any indemnifiable proceedings brought against them. The obligations of the Company pursuant to the indemnification agreements continue during such time as the indemnified person serves the Company and continues thereafter until such time as a claim can be brought. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited; however, the Company has a director and officer liability insurance policy that limits its exposure and enables the Company to recover a portion of any future amounts paid. As a result of its insurance policy coverage, the Company believes the estimated fair value of these indemnification agreements is minimal. Accordingly, the Company had no liabilities recorded for these agreements as of September 30, 2019 and December 31, 2018 . Other Commitments In the normal course of business, the Company enters into various firm purchase commitments primarily related to research and development activities. As of September 30, 2019 , the Company had non-cancelable purchase commitments to suppliers for $0.5 million of which $0.1 million is included in accrued current liabilities, contractual obligations under license agreements of $1.2 million of which $0.2 million is included in accrued current liabilities and provision for legal settlement of $15.75 million , which is included in accrued current liabilities. The following is a summary of the Company's non-cancelable purchase commitments and contractual obligations as of September 30, 2019 (in thousands): Total 2019 2020 2021 2022 2023 Thereafter Purchase Obligations (1) $ 545 $ 545 $ — $ — $ — $ — $ — Provision for legal settlement (2) 15,750 15,750 — — — — — Contractual obligations under license agreements (3) 1,160 265 105 95 80 80 535 Total $ 17,455 $ 16,560 $ 105 $ 95 $ 80 $ 80 $ 535 ________________ (1) Purchase obligations consist of non-cancelable purchase commitments to suppliers. (2) The Company has recorded a litigation insurance recovery receivable of $15.75 million as of September 30, 2019 within prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets, which represents the expected payment of the litigation settlement by the Company’s insurance carriers. (3) Excludes future obligations pursuant to the cost-sharing arrangement under the Company's License Agreement with Roche. Amounts of such obligations, if any, cannot be determined at this time. Legal Proceedings On July 16, 2018, a purported class action lawsuit entitled Granite Point Capital v. Prothena Corporation plc, et al ., Civil Action No. 18-cv-06425, was filed in the U.S. District Court for the Southern District of New York against the Company and certain of its current and former officers. The plaintiff seeks compensatory damages, costs and expenses in an unspecified amount on behalf of a putative class of persons who purchased the Company’s ordinary shares between October 15, 2015 and April 20, 2018, inclusive. The complaint alleges that the defendants violated federal securities laws by allegedly making false and misleading statements and omitting certain material facts in certain public statements and in the Company’s filings with the U.S. Securities and Exchange Commission during the putative class period, regarding the clinical trial results and prospects for approval of the Company’s NEOD001 drug development program. On October 31, 2018, the Court issued an order naming Granite Point Capital and Simon James, an individual, as the lead plaintiffs in the purported class action, which is now entitled In re Prothena Corporation plc Securities Litigation . On June 10, 2019, the Company and the individual defendants entered into a binding memorandum of understanding with the lead plaintiffs to settle that lawsuit based on an aggregate settlement amount of $15.75 million , to be paid by the Company’s directors and officers insurance carriers. On August 26, 2019, the parties entered into a Stipulation and Agreement of Settlement and the lead plaintiffs filed an Unopposed Motion for Preliminary Approval of Proposed Class Action Settlement. On September 12, 2019, the Court granted preliminary approval of Class Action Settlement, Approving Form and Manner of Notice, And Setting Date for Hearing on Final Approval of Settlement and specified December 2, 2019 at 11:30 a.m. for the Settlement Hearing. If the settlement is approved by the Court, it will resolve, as to all settlement class members, all of the claims that were or could have been brought in the lawsuit. The Company continues to believe that the claims in the lawsuit are without merit and, to the extent the settlement is not finalized, intends to vigorously defend against them. The Company maintains insurance for claims of this nature. As a result of signing of the memorandum of understanding and the potential liability becoming probable and estimable, the Company has recorded a provision for legal settlement for $15.75 million within other current liabilities on the Condensed Consolidated Balance Sheets as of September 30, 2019 . Additionally, the Company recorded a litigation insurance recovery receivable of $15.75 million within prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets as of September 30, 2019 , which represents the expected payment of the settlement by the Company’s insurance carriers. |
Significant Agreements
Significant Agreements | 9 Months Ended |
Sep. 30, 2019 | |
Collaborative Agreement [Abstract] | |
License Agreements | Significant Agreements Roche License Agreement In December 2013 , the Company through its wholly owned subsidiary Prothena Biosciences Limited and Prothena Biosciences Inc entered into a License, Development, and Commercialization Agreement (the “License Agreement”) with F. Hoffmann-La Roche Ltd. and Hoffmann-La Roche Inc. (together, “Roche”) to develop and commercialize certain antibodies that target α - synuclein, including prasinezumab, which are referred to collectively as “Licensed Products.” Upon the effectiveness of the License Agreement in January 2014, the Company granted to Roche an exclusive, worldwide license to develop, make, have made, use, sell, offer to sell, import and export the Licensed Products. The Company retained certain rights to conduct development of the Licensed Products and an option to co-promote prasinezumab in the U.S. During the term of the License Agreement, the Company and Roche will work exclusively with each other to research and develop antibody products targeting alpha-synuclein (or α - synuclein) potentially including incorporation of Roche’s proprietary Brain Shuttle™ technology to potentially increase delivery of therapeutic antibodies to the brain. The License Agreement provided for Roche making an upfront payment to the Company of $30.0 million , which was received in February 2014; making a clinical milestone payment of $15.0 million upon initiation of the Phase 1 study for prasinezumab, which was received in May 2014; and making a clinical milestone payment of $30.0 million upon dosing of the first patient in the Phase 2 study for prasinezumab, which was achieved in June 2017. For prasinezumab, Roche is also obligated to pay: • up to $350.0 million upon the achievement of development, regulatory and various first commercial sales milestones; • up to an additional $175.0 million upon achievement of ex-U.S. commercial sales milestones; and • tiered, high single-digit to high double-digit royalties in the teens on ex-U.S. annual net sales, subject to certain adjustments. Roche bore 100% of the cost of conducting the research collaboration under the License Agreement during the research term, which expired December 31, 2017. In the U.S., the parties share all development and commercialization costs, as well as profits, all of which will be allocated 70% to Roche and 30% to the Company, for prasinezumab in the Parkinson’s disease indication, as well as any other Licensed Products and/or indications for which the Company opts in to participate in co-development and co-funding. After the completion of specific clinical trial activities, the Company may opt out of the co-development and cost and profit sharing on any co-developed Licensed Products and instead receive U.S. commercial sales milestones totaling up to $155.0 million and tiered, single-digit to high double-digit royalties in the teens based on U.S. annual net sales, subject to certain adjustments, with respect to the applicable Licensed Product. The Company filed an Investigational New Drug Application (“IND”) with the FDA for prasinezumab and subsequently initiated a Phase 1 study in 2014. Following the Phase 1 studies, Roche became primarily responsible for developing, obtaining and maintaining regulatory approval for and commercializing Licensed Products. Roche also became responsible for the clinical and commercial manufacture and supply of Licensed Products. In addition, the Company has an option under the License Agreement to co-promote prasinezumab in the U.S. in the Parkinson’s disease indication. If the Company exercises such option, it may also elect to co-promote additional Licensed Products in the U.S. approved for Parkinson’s disease. Outside the U.S., Roche will have responsibility for developing and commercializing the Licensed Products. Roche bears all costs that are specifically related to obtaining or maintaining regulatory approval outside the U.S. and will pay the Company a variable royalty based on annual net sales of the Licensed Products outside the U.S. While Roche will record product revenue from sales of the Licensed Products, the Company and Roche will share in the net profits and losses of sales of the prasinezumab for the Parkinson's disease indication in the U.S. on a 70% / 30% basis with the Company receiving 30% of the profit and losses provided that the Company has not exercised its opt-out right. The License Agreement continues on a country-by-country basis until the expiration of all payment obligations under the License Agreement. The License Agreement may also be terminated (i) by Roche at will after the first anniversary of the effective date of the License Agreement, either in its entirety or on a Licensed Product-by-Licensed Product basis, upon 90 days’ prior written notice to the Company prior to first commercial sale and 180 days’ prior written notice to Prothena after first commercial sale, (ii) by either party, either in its entirety or on a Licensed Product-by-Licensed Product or region-by-region basis, upon written notice in connection with a material breach uncured 90 days after initial written notice, and (iii) by either party, in its entirety, upon insolvency of the other party. The License Agreement may be terminated by either party on a patent-by-patent and country-by-country basis if the other party challenges a given patent in a given country. The Company’s rights to co-develop Licensed Products under the License Agreement will terminate if the Company commences certain studies for certain types of competitive products. The Company’s rights to co-promote Licensed Products under the License Agreement will terminate if the Company commences a Phase 3 study for such competitive products. The License Agreement cannot be assigned by either party without the prior written consent of the other party, except to an affiliate of such party or in the event of a merger or acquisition of such party, subject to certain conditions. The License Agreement also includes customary provisions regarding, among other things, confidentiality, intellectual property ownership, patent prosecution, enforcement and defense, representations and warranties, indemnification, insurance, and arbitration and dispute resolution. Collaboration Accounting The License Agreement was evaluated under ASC 808, Collaborative Agreements. At the outset of the License Agreement, the Company concluded that it did not qualify as collaboration under ASC 808 because the Company does not share significant risks due to the net profit and loss split (under which Roche incurs substantially more of the costs of the collaboration) and because of the Company’s opt-out provision. The Company believes that Roche will be the principal in future sales transactions with third parties as Roche will be the primary obligor bearing inventory and credit risk. The Company will record its share of pre-tax commercial profit generated from the collaboration as collaboration revenue once the Company can conclude it is probable that a significant revenue reversal will not occur in future periods. Prior to commercialization of a Licensed Product, the Company’s portion of the expenses related to the License Agreement reflected on its income statement will be limited to R&D expenses. After commercialization, if the Company opts-in to co-detail commercialization, expenses related to commercial capabilities, including expenses related to the establishment of a field sales force and other activities to support the Company’s commercialization efforts, will be recorded as sales, general and administrative (“SG&A”) expense and will be factored into the computation of the profit and loss share. The Company will record the receivable related to commercialization activities as collaboration revenue once the Company can conclude it is probable that a significant revenue reversal will not occur in future periods. Adoption of ASC 606, Revenue from Contracts with Customers The Company adopted ASC 606, Revenue from Contracts with Customers, as of January 1, 2018 using the modified retrospective transition method. The Company recognized the cumulative effect of applying the new revenue standard as an adjustment to the opening balance of the accumulated deficit as of January 1, 2018. As of January 1, 2018, the Company did not record any changes to the opening balance of the accumulated deficit since the cumulative effect of applying the new revenue standard was the same as applying ASC 605. The impact of the adoption of ASC 606 to revenues for the three and nine months ended September 30, 2018 was an increase of 0.3 million and $0.8 million , respectively, which represents the revenue recognized for the development services provided by the Company during the period that is reimbursable by Roche. Historically, the Company recorded such reimbursement as an offset against its R&D expenses under ASC 605. Upon the adoption of ASC 606, the reimbursement for development services is now included as part of the Company’s collaboration revenue. Performance Obligations The License Agreement was evaluated under ASC 606. The License Agreement includes the following distinct performance obligations: (1) the Company’s grant of an exclusive royalty bearing license, with the right to sublicense to develop and commercialize certain antibodies that target α - synuclein, including prasinezumab, and the initial know how transfer which was delivered at the effective date (the “Royalty Bearing License”); (2) the Company’s obligation to supply clinical material as requested by Roche for a period up to twelve months (the “Clinical Product Supply Obligation”); (3) the Company’s obligation to provide manufacturing related services to Roche for a period up to twelve months (the “Supply Services Obligation”); (4) the Company’s obligation to prepare and file the IND (the “IND Obligation”); and (5) the Company’s obligation to provide development activities under the development plan during Phase 1 clinical trials (the “Development Services Obligation”). Revenue allocated to the above performance obligations under the License Agreement are recognized when the Company has satisfied its obligations either at a point in time or over a period of time. The Company concluded that the Royalty Bearing License and the Clinical Product Supply Obligation were satisfied at a point in time. The Royalty Bearing License is considered to be a functional intellectual property, in which the revenue would be recognized at the point in time since (a) the Company concluded that the license to Roche has a significant stand-alone functionality, (b) the Company does not expect the functionality of the intellectual property to be substantially changed during the license period as a result of activities of Prothena, and (c) Prothena’s activities transfer a good or service to Roche. The Clinical Product Supply Obligation does not meet criteria for over time recognition; as such, the revenue related to such performance obligation was recognized the point in time at which Roche obtained control of manufactured supplies, which occurred during the first quarter of 2014. The Company concluded that the Supply Services Obligation, the IND Obligation and the Development Services Obligation were satisfied over time. The Company utilized an input method measure of progress by basing the recognition period on the efforts or inputs towards satisfying the performance obligation (i.e. costs incurred and the time elapsed to complete the related performance obligations). The Company determined that such input method provides an appropriate measure of progress toward complete satisfaction of such performance obligations. As of September 30, 2019 and December 31, 2018 , there were no remaining performance obligations under License Agreement since the obligations related to research and development activities were only for the Phase 1 clinical trial and the remaining obligations were delivered or performed. Transaction Price According to ASC 606-10-32-2, the transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties (for example, some sales taxes). The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. Factors considered in the determination of the transaction price include, among other things, estimated selling price of the license and costs for clinical supply and development costs. The initial transaction price under the License Agreement, pursuant to ASC 606, was $55.1 million , including $45.0 million for the Royalty Bearing License, $9.1 million for the IND and Development Services Obligations, and $1.1 million for the Supply Services Obligation. The $45.0 million for the Royalty Bearing License included the upfront payment of $30.0 million and the clinical milestone payment of $15.0 million upon initiation of the Phase 1 clinical trial of prasinezumab, both of which were made in 2014. The remaining transaction price amounts the Company expected to receive as reimbursements were based on costs expected to be paid to third parties and other costs to be incurred by the Company in order to satisfy its performance obligations. They are considered to be variable considerations not subject to constraint. The Company did not incur any incremental costs, such as commissions, to obtain or fulfill the License Agreement. Under ASC 606, the transaction price was allocated to the performance obligations as follows: $48.9 million to the Royalty Bearing License; $4.6 million to the IND and Development Services Obligations; $1.1 million to the Clinical Product Supply Obligation; and $0.6 million to the Supply Services Obligation. As of September 30, 2019 , the aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied is $nil . Prior to the adoption of ASC 606, the transaction price was allocated to the deliverables as follows: $35.6 million to the Royalty Bearing License; $3.3 million to the IND and Development Services Obligations; $0.8 million to the Clinical Product Supply Obligation; and $0.4 million to the Supply Services Obligation. The Company allocated the initial transaction price to the Royalty Bearing License and other performance obligations using the relative selling price method based on its best estimate of selling price for the Royalty Bearing License and third party evidence for the remaining performance obligations. The best estimate of selling price for the Royalty Bearing License was based on a discounted cash flow model. The key assumptions used in the discounted cash flow model used to determine the best estimate of selling price for the Royalty Bearing License included the market opportunity for commercialization of prasinezumab in the U.S. and the royalty territory (for licensed products that are jointly funded the royalty territory is worldwide except for the U.S., and for all licensed products that are not jointly funded the Royalty Territory is worldwide), the probability of successfully developing and commercializing prasinezumab, the estimated remaining development costs for prasinezumab, and the estimated time to commercialization of prasinezumab. The Company concluded that a change in the assumptions used to determine the best estimate of selling price (“BESP”) of the license deliverable would not have a significant effect on the allocation of arrangement consideration. The Company’s discounted cash flow model included several market conditions and entity-specific inputs, including the likelihood that clinical trials for prasinezumab will be successful, the likelihood that regulatory approval will be obtained and the product commercialized, the appropriate discount rate, the market locations, size and potential market share of the product, the expected life of the product, and the competitive environment for the product. The market assumptions were generated using a patient-based forecasting approach, with key epidemiological, market penetration, dosing, compliance, length of treatment and pricing assumptions derived from primary and secondary market research, referenced from third-party sources. Significant Payment Terms Payments for development services are due within 45 days after receiving an invoice from the Company. Variable considerations related to clinical and regulatory milestone payments are constrained due to high likelihood of a revenue reversal. The payment term for all milestone payments are due within 45 days after the achievement of the relevant milestone and receipt by Roche of an invoice for such an amount from the Company. According to ASC 606-10-32-17, a significant financing component does not exist if a substantial amount of the consideration promised by the customer is variable, and the amount or timing of that consideration varies on the basis of the occurrence or nonoccurrence of a future event that is not substantially within the control of the customer or the entity. Since a “substantial amount of the consideration” promised by Roche to the Company is variable (i.e., is in the form of either milestone payments or sales-based royalties) and the amount of such variable consideration varies based upon the occurrence or nonoccurrence of future events that are not within the control of either Roche or the Company (i.e., are largely subject to regulatory approval), the License Agreement does not have a significant financing component. Optional Goods and Services An option for additional goods or services exists when a customer has a present contractual right that allows it to choose the amount of additional distinct goods or services that are purchased. Prior to the customer’s exercise of that right, the vendor is not presently obligated to provide those goods or services. ASC 606-10-25-18(j) requires recognition of an option as a distinct performance obligation when the option provides a customer with a material right. In addition to the distinct performance obligations noted above, the Company was obligated to provide indeterminate research services for up to three years ending in 2017 at rates that were not significantly discounted and fully reimbursable by Roche (the “Research Services”). The amount for any such Research Services was not fixed and determinable and was not at a significant incremental discount. There were no refund rights, concessions or performance bonuses to consider. The Company evaluated the obligation to perform Research Services under ASC 606-10-55-42 and 55-43 to determine whether it gave Roche a “material right”. According to ASC 606-10-55-43, if a customer has the option to acquire an additional good or services at a price that would reflect the standalone selling price for that good or service, that option does not provide the customer with a material right even if the option can be exercised only by entering into a previous contract. The Company concluded that Roche’s option to have the Company perform Research Services did not represent a “material right” to Roche that it would not have received without entering into the License Agreement. As a result, Roche’s option to acquire additional Research Services was not considered a performance obligation at the outset of the License Agreement under ASC 606. Accordingly, this deliverable will become new performance obligation for Prothena when Roche asks Prothena to conduct such Research Services. As of September 30, 2019 , there were no remaining Research Services performance obligations. Prior to the adoption of ASC 606, the Company recognized Research Services as collaboration revenue as earned. Post Contract Deliverables Any development services provided by the Company after performance of the Development Service Obligation are not considered a contractual performance obligation under the License Agreement, since the License Agreement does not require the Company to provide any development services after completion of the Development Service Obligation. However, the collaboration’s Joint Steering Committee approved continued funding for additional development services to be provided by the Company (the “Additional Development Services”). Under the License Agreement and upon the adoption of ASC 606, the Company recognizes the reimbursements for Additional Development Services as collaboration revenue as earned. Revenue and Expense Recognition The Company recognized $0.2 million and $0.6 million as collaboration revenue for the three and nine months ended September 30, 2019 , respectively from Roche for Additional Development Services, as compared to $0.3 million and $0.8 million as collaboration revenue from Roche for Additional Development Services for the three and nine months ended September 30, 2018 , respectively. Cost sharing payments to Roche are recorded as R&D expenses. The Company recognized $2.7 million and $6.7 million in R&D expenses for payments made to Roche during the three and nine months ended September 30, 2019 , as compared to $3.1 million and $9.5 million for the three and nine months ended September 30, 2018 , respectively. The Company had accounts receivable from Roche of $42,000 and $2,000 recorded in prepaid expenses and other current assets at September 30, 2019 and December 31, 2018 , respectively. Milestone Accounting Under the License Agreement, only if the U.S. and or global options are exercised, the Company is eligible to receive milestone payments upon the achievement of development, regulatory and various first commercial sales milestones. Milestone payments are evaluated under ASC Topic 606. Factors considered in this determination included scientific and regulatory risk that must be overcome to achieve each milestone, the level of effort and investment required to achieve the milestone, and the monetary value attributed to the milestone. Accordingly, the Company estimates payments in the transaction price based on the most likely approach, which considers the single most likely amount in a range of possible amounts related to the achievement of these milestones. Additionally, milestone payments are included in the transaction price only when the Company can conclude it is probable that a significant revenue reversal will not occur in future periods when the milestone is achieved. The Company excludes the milestone payments and royalties in the initial transaction price calculation because such payments are considered to be variable considerations with constraint. Such milestone payments and royalties will be recognized as revenue once the Company can conclude it is probable that a significant revenue reversal will not occur in future periods. The clinical and regulatory milestones under the License Agreement after the point at which the Company could opt-out are considered to be variable considerations with constraint due to the fact that active participation in the development activities that generate the milestones is not required under the License Agreement, and the Company can opt-out of these activities. There are no refunds or claw-back provisions and the milestones are uncertain of occurrence even after the Company has opted out. Based on this determination, these milestones will be recognized when the Company can conclude it is probable that a significant revenue reversal will not occur in future periods. In June 2017, the Company achieved a $30.0 million clinical milestone under the License Agreement as a result of dosing of first patient in Phase 2 study for prasinezumab. The milestone was accounted for under ASC 605 and was allocated to the units of accounting based on the relative selling price method for income statement classification purposes. As such, the Company recognized $26.6 million of the $30.0 million milestone as collaboration revenue and $3.4 million as an offset to R&D expenses in 2017. The Company did not achieve any clinical and regulatory milestones under the License Agreement during the nine months ended September 30, 2019 . Celgene Collaboration Agreement Overview On March 20, 2018 , the Company, through its wholly owned subsidiary Prothena Biosciences Limited, entered into a Master Collaboration Agreement (the “Collaboration Agreement”) with Celgene Switzerland LLC (“Celgene”), a subsidiary of Celgene Corporation, pursuant to which Prothena granted to Celgene a right to elect in its sole discretion to exclusively license rights both in the U.S. (the “US Rights”) and on a global basis (the “Global Rights”), with respect to the Company’s programs to develop and commercialize antibodies targeting Tau, TDP-43 and an undisclosed target (the “Collaboration Targets”). For each such program, Celgene may exercise its US Rights at the IND filing, and if it so exercises such US Rights would also have a right to expand the license to Global Rights. If Celgene exercises its US Rights for a program, then following the first to occur of (a) completion by the Company, in its discretion and at its cost, of Phase 1 clinical trials for such program or (b) the date on which Celgene elects to assume responsibility for completing such Phase 1 clinical trials (at its cost), Celgene would have decision making authority over development activities and all regulatory, manufacturing and commercialization activities in the U.S. The Collaboration Agreement provided for Celgene making an upfront payment to the Company of $100.0 million , which was received in April 2018, plus future potential license exercise payments and regulatory and commercial milestones for each program under the Collaboration Agreement, as well as royalties on net sales of any resulting marketed products. In connection with the Collaboration Agreement, the Company and Celgene entered into a Share Subscription Agreement on March 20, 2018 , under which Celgene subscribed to 1,174,536 of the Company’s ordinary shares for a price of $42.57 per share, for a total of approximately $50.0 million . Celgene US and Global Rights and Licenses On a program-by-program basis, beginning on the effective date of the Collaboration Agreement and ending on the date that the IND Option term expires for such program (which generally occurs sixty days after the date on which Prothena delivers to Celgene the first complete data package for an IND that was filed for a lead candidate from the relevant program), Celgene may elect in its sole discretion to exercise its US Rights to receive an exclusive license to develop, manufacture and commercialize antibodies targeting the applicable Collaboration Target in the U.S. (the “US License”). If Celgene exercises its US Rights for a collaboration program, it is obligated to pay the Company an exercise fee of approximately $80.0 million per program. Thereafter, following the first to occur of (a) completion by the Company, in its discretion and at its cost, of Phase 1 clinical trials for such program or (b) Celgene’s election to assume responsibility to complete such Phase 1 clinical trials (at its cost), Celgene would have the sole right to develop, manufacture and commercialize antibody products targeting the relevant Collaboration Target for such program (the “Collaboration Products”) in the U.S. On a program-by-program basis, following completion of a Phase 1 clinical trial for a collaboration program for which Celgene has previously exercised its US Rights, Celgene may elect in its sole discretion to exercise its Global Rights with respect to such collaboration program to receive a worldwide, exclusive license to develop, manufacture and commercialize antibodies targeting the applicable Collaboration Target (the “Global License”). If Celgene exercises its Global Rights, Celgene would be obligated to pay the Company an additional exercise fee of $55.0 million for such collaboration program. The Global Rights would then replace the US Rights for that collaboration program, and Celgene would have decision making authority over developing, obtaining and maintaining regulatory approval for, manufacturing and commercializing the Collaboration Products worldwide. After Celgene’s exercise of Global Rights for a collaboration program, the Company is eligible to receive up to $562.5 million in regulatory and commercial milestones per program. Following an exercise by Celgene of either US Rights or Global Rights for such collaboration program, the Company will also be eligible to receive tiered royalties on net sales of Collaboration Products ranging from high single digit to high teen percentages, on a weighted average basis depending on the achievement of certain net sales thresholds. Such exercise fees, milestones and royalty payments are subject to certain reductions as specified in the Collaboration Agreement, the agreement for US Rights and the agreement for Global Rights. Celgene will continue to pay royalties on a Collaboration Product-by-Collaboration Product and country-by-country basis, until the latest of (i) expiration of certain patents covering the Collaboration Product, (ii) expiration of all regulatory exclusivity for the Collaboration Product, and (iii) an agreed period of time after the first commercial sale of the Collaboration Product in the applicable country (the “Royalty Term”). Term and Termination The research term under the Collaboration Agreement continues for a period of six years , which Celgene may extend for up to two additional 12 -month periods by paying an extension fee of $10.0 million per extension period. The term of the Collaboration Agreement continues until the last to occur of the following: (i) expiration of the research term; (ii) expiration of all US Rights terms; and (iii) expiration of all Global Rights terms. The term of any US License or Global License would continue on a Licensed Product-by-Licensed Product and country-by-country basis until the expiration of all Royalty Terms under such agreement. The Collaboration Agreement may be terminated (i) by either party on a program-by-program basis if the other party remains in material breach of the Collaboration Agreement following a cure period to remedy the material breach, (ii) by Celgene at will on a program-by-program basis or in its entirety, (iii) by either party, in its entirety, upon insolvency of the other party, or (iv) by Prothena, in its entirety, if Celgene challenges a patent licensed by Prothena to Celgene under the Collaboration Agreement. Share Subscription Agreement Pursuant to the terms of the Collaboration Agreement, the Company entered into a Share Subscription Agreement (the “SSA”) with Celgene, pursuant to which the Company issued, and Celgene subscribed for, 1,174,536 of the Company’s ordinary shares (the “Shares”) for an aggregate subscription price of approximately $50.0 million , pursuant to the terms and conditions thereof. Under the SSA, Celgene is subject to certain transfer restrictions. In addition, Celgene will be entitled to request the registration of the Shares with the U.S. Securities and Exchange Commission on Form S-3ASR or Form S-3 following termination of the transfer restrictions if the Shares cannot be resold without restriction pursuant to Rule 144 promulgated under the U.S. Securities Act of 1933, as amended (the “Securities Act”). Collaboration Accounting The Collaboration Agreement was evaluated under ASC 808, Collaborative Agreements. At the outset of the Collaboration Agreement, the Company concluded that it does not qualify as collaboration under ASC 808 because the Company does not share significant risks due to economics of the collaboration. Performance Obligations The Company assessed the Collaboration Agreement and concluded that it represented a contract with a customer within the scope of ASC 606. Per ASC 606, a performance obligation is defined as a promise to transfer a good or service or a series of distinct goods or services. At inception of the Collaboration Agreement, the Company is not obligated to transfer the US License or Global License to Celgene unless Celgene exercises its US Rights or Global Rights, respectively, and the Company is not obligated to perform development activities under the development plan during preclinical and Phase 1 clinical trials including the regulatory filing of the IND. The discovery, preclinical and clinical development activities performed by the Company are to be performed at the Company’s discretion and are not promised goods or services and therefore are not considered performance obligations under ASC 606, unless and until the Company agrees to perform |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Shareholders' Equity | Shareholders' Equity Ordinary Shares As of September 30, 2019 , the Company had 100,000,000 ordinary shares authorized for issuance with a par value of $0.01 per ordinary share and 39,896,561 ordinary shares issued and outstanding. Each ordinary share is entitled to one vote and, on a pro rata basis, to dividends when declared and the remaining assets of the Company in the event of a winding up. Euro Deferred Shares As of September 30, 2019 , the Company had 10,000 Euro Deferred Shares authorized for issuance with a nominal value of €22 per share. No Euro Deferred Shares are outstanding at September 30, 2019 . The rights and restrictions attaching to the Euro Deferred Shares rank pari passu with the ordinary shares and are treated as a single class in all respects. Celgene Share Subscription Agreement In connection with the Celgene Collaboration Agreement, the Company entered into a Share Subscription Agreement (the “SSA”) with Celgene, pursuant to which the Company issued, and Celgene subscribed for, 1,174,536 of the Company’s ordinary shares (the “Shares”) for an aggregate subscription price of approximately $50.0 million , of which the fair value of $39.8 million was recorded in shareholders' equity and the premium of $10.2 million was recorded as deferred revenue from Celgene. Under the SSA, Celgene is subject to certain transfer restrictions. In addition, Celgene will be entitled to request the registration of the Shares with the SEC on Form S-3ASR or Form S-3 following termination of the transfer restrictions if the Shares cannot be resold without restriction pursuant to Rule 144 promulgated under the Securities Act. |
Share-Based Compensation
Share-Based Compensation | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based Compensation | Share-Based Compensation 2018 Long Term Incentive Plan In May 2018, the Company’s shareholders approved the 2018 Long Term Incentive Plan (the “2018 LTIP”), which provides for the grant of ISOs, NQSOs, SARs, restricted shares, RSUs, performance bonus awards, performance share units awards, dividend equivalents and other share or cash-based awards to eligible individuals. Options under the 2018 LTIP may be granted for periods up to ten years. All options issued to date have had a ten year life. Under the 2018 LTIP, the number of ordinary shares authorized for issuance under the 2018 LTIP is equal to the sum of (a) 1,800,000 shares, (b) 1,177,933 shares that were available for issuance under the 2012 LTIP as of the May 15, 2018 effective date of the 2018 LTIP, and (c) any shares subject to issued and outstanding awards under the 2012 Long Term Incentive Plan (the “2012 LTIP”) that expire, are cancelled or otherwise terminate following the effective date of the 2018 LTIP; provided, that no more than 2,500,000 shares may be issued pursuant to the exercise of ISOs. Amended and Restated 2012 Long Term Incentive Plan Prior to the effective date of the 2018 LTIP, employees and consultants of the Company, its subsidiaries and affiliates, as well as members of the Company’s Board of Directors, received equity awards under the 2012 LTIP. Options under the 2012 LTIP were granted for periods up to ten years. All options issued to date have had a ten year life. Shares Available for Grant The Company granted 292,500 options and none during the three months ended September 30, 2019 and 2018 , respectively, and 1,290,475 and 4,046,300 options during the nine months ended September 30, 2019 and 2018 , respectively, in aggregate under the 2012 LTIP and the 2018 LTIP. The Company’s option awards generally vest over four years. As of September 30, 2019 , 1,044,256 ordinary shares remained available for grant under the 2018 LTIP, and options to purchase 7,184,980 ordinary shares in aggregate under the 2012 LTIP and the 2018 LTIP were outstanding with a weighted-average exercise price of approximately $23.44 per share. Share-based Compensation Expense The Company estimates the fair value of share-based compensation on the date of grant using an option-pricing model. The Company uses the Black-Scholes model to value share-based compensation, excluding RSUs, which the Company values using the fair market value of its ordinary shares on the date of grant. The Black-Scholes option-pricing model determines the fair value of share-based payment awards based on the share price on the date of grant and is affected by assumptions regarding a number of complex and subjective variables. These variables include, but are not limited to, the Company’s share price, volatility over the expected life of the awards and actual and projected employee stock option exercise behaviors. Since the Company does not have sufficient historical employee share option exercise data, the simplified method has been used to estimate the expected life of all options. The Company uses its historical volatility for the Company’s stock to estimate expected volatility starting January 1, 2018. Although the fair value of share options granted by the Company is estimated by the Black-Scholes model, the estimated fair value may not be indicative of the fair value observed in a willing buyer and seller market transaction. As share-based compensation expense recognized in the Condensed Consolidated Financial Statements is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from estimates. Forfeitures were estimated based on estimated future turnover and historical experience. Share-based compensation expense will continue to have an adverse impact on the Company’s results of operations, although it will have no impact on its overall financial position. The amount of unearned share-based compensation currently estimated to be expensed from now through the year 2023 related to unvested share-based payment awards at September 30, 2019 is $47.2 million . The weighted-average period over which the unearned share-based compensation is expected to be recognized is 2.74 years . If there are any modifications or cancellations of the underlying unvested securities, the Company may be required to accelerate and/or increase any remaining unearned share-based compensation expense. Future share-based compensation expense and unearned share-based compensation will increase to the extent that the Company grants additional equity awards. Share-based compensation expense recorded in these Condensed Consolidated Financial Statements for the three and nine months ended September 30, 2019 and 2018 was based on awards granted under the 2012 LTIP and the 2018 LTIP. The following table summarizes share-based compensation expense for the periods presented (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Research and development $ 1,955 $ 2,888 $ 6,154 $ 7,699 General and administrative 3,861 4,154 12,144 12,554 Restructuring costs (1) $ — $ — — $ 2,512 Total share-based compensation expense $ 5,816 $ 7,042 $ 18,298 $ 22,765 (1) Restructuring costs for the nine months ended September 30, 2018 included $2.5 million of share-based compensation expenses related to the contractual acceleration of vesting of certain stock options granted to executive officers. The Company recognized tax benefits from share-based awards of $1.2 million and $1.3 million for the three months ended September 30, 2019 and 2018 , respectively, and $3.6 million and $3.4 million for nine months ended September 30, 2019 and 2018 , respectively. The fair value of the options granted to employees and non-employee directors during the three and nine months ended September 30, 2019 and 2018 was estimated as of the grant date using the Black-Scholes option-pricing model assuming the weighted-average assumptions listed in the following table: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Expected volatility 81.0% —% 81.4% 79.4% Risk-free interest rate 1.8% —% 2.3% 2.8% Expected dividend yield —% —% —% —% Expected life (in years) 6.0 0 6.0 6.0 Weighted average grant date fair value $7.09 $— $8.61 $13.82 The fair value of employee stock options is being amortized on a straight-line basis over the requisite service period for each award. Each of the inputs discussed above is subjective and generally requires significant management judgment to determine. The following table summarizes the Company’s stock option activity during the nine months ended September 30, 2019 : Options Weighted Weighted Aggregate Outstanding at December 31, 2018 6,726,715 $ 26.82 7.39 $ 2,169 Granted 1,290,475 12.24 Exercised (32,850 ) 6.56 Canceled (799,360 ) 34.54 Outstanding at September 30, 2019 7,184,980 $ 23.44 7.37 $ 720 Vested and expected to vest at September 30, 2019 6,787,765 $ 23.78 7.30 $ 720 Vested at September 30, 2019 3,418,454 $ 28.10 6.11 $ 720 The total intrinsic value of options exercised was approximately nil and $0.3 million during the three months ended September 30, 2019 and 2018 , respectively, and $0.1 million and $2.4 million during the nine months ended September 30, 2019 and 2018 , respectively, determined as of the date of exercise. |
Restructuring
Restructuring | 9 Months Ended |
Sep. 30, 2019 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | Restructuring In May 2018, the Company commenced a reorganization plan to reduce its operating costs and better align its workforce with the needs of its business following the Company’s April 23, 2018 announcement of its decision to discontinue further development of NEOD001. Restructuring charges incurred under this plan primarily consisted of employee termination benefits and contract termination costs primarily associated with exit fees relating to third-party manufacturers that the Company contracted with for NEOD001 clinical and commercial supplies. Restructuring charges incurred under this plan primarily consisted of employee termination benefits and contract termination costs primarily associated with exit fees relating to third-party manufacturers that the Company contracted with for NEOD001 clinical and commercial supplies. Employee termination benefits included severance costs, employee-related benefits, supplemental one-time termination payments and non-cash share-based compensation expense related to the acceleration of stock options. Charges and other costs related to the workforce reduction and structure realignment were presented as restructuring costs in the Condensed Consolidated Statements of Operations. The Company recorded a restructuring credit of approximately $61,000 for the nine months ended September 30, 2019 as compared to aggregate restructuring charges of approximately $17.7 million for the same period in the prior year. No restructuring cost was recorded for the three months ended September 30, 2019 . The following table summarizes the restructuring charges (credits) recognized in the Condensed Consolidated Statements of Operations during the three and nine months ended September 30, 2019 and 2018 (in thousands): Three Months Ended September 30, Nine Months Ended 2019 2018 2019 2018 Termination Benefits $ — $ 466 $ (61 ) $ 8,973 Non-Cash Termination Benefits — — — 2,512 Contract Termination Costs — (4,343 ) — 5,532 Non-Cash Contract Termination Costs — — — 10 Other — 705 — 705 Total restructuring charges (credits) $ — $ (3,172 ) $ (61 ) $ 17,732 The Company has completed all of its restructuring activities and does not expect to incur additional costs associated with the restructuring. The cumulative amount incurred to date is $16.1 million as of September 30, 2019 . The following table summarizes the restructuring liability and utilization by cost type associated with the restructuring activities during the nine months ended September 30, 2019 (in thousands): Restructuring Liability Termination Benefits Contract Termination Costs Assets Impairment Other Total Balance at December 31, 2018 $ 461 $ — $ — $ — $ 461 Restructuring charges (credit) (61 ) — — — (61 ) Reductions for cash payments (400 ) — — — (400 ) Balance at September 30, 2019 $ — $ — $ — $ — $ — |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The major taxing jurisdictions for the Company are Ireland and the U.S. The Company recorded an income tax provision of $468,000 and $510,000 for the three and nine months ended September 30, 2019 , respectively, as compared to an income tax provision of $1.0 million and an income tax benefit of $1.0 million for three and nine months ended September 30, 2018 , respectively. The provision for income taxes differs from the statutory tax rate of 12.5% applicable to Ireland primarily due to Irish net operating losses for which a tax provision benefit is not recognized, U.S. income taxed at different rates, and net tax shortfall from cancellations of stock options. The income tax provision reflects the estimate of the effective tax rate expected to be applicable for the full year and the Company re-evaluates this estimate each quarter based on its forecasted tax expense for the full year. Jurisdictions with a projected loss for the year where no tax benefit can be recognized are excluded from the estimated annual effective tax rate. The Company adopted ASU 2016-09 on January 1, 2017. Pursuant to the adoption of ASU 2016-09, tax attributes previously tracked off balance sheet have been recorded as deferred tax assets, offset by a valuation allowance. Further, excess benefits of stock compensation have been recorded as a benefit to the tax provision for all periods presented. The Company recorded a net tax shortfall of $0.9 million and $1.9 million for the three and nine months ended September 30, 2019 , respectively, and a net tax shortfall of $1.0 million and $1.3 million for the three and nine months ended September 30, 2018 , respectively, all of which were recorded as part of its income tax provision in the Condensed Consolidated Statements of Operations. The Company’s income tax expense will continue to be impacted by fluctuations in stock price between the grant dates and the exercise dates of its option awards. On January 1, 2019, the Company adopted ASC 842, Leases and it recorded a reduction in deferred tax assets of $1.0 million as part of the $3.8 million change in the opening balance of the accumulated deficit for the cumulative effect of applying ASC 842 (See Note 2, “Summary of Significant Accounting Policies”). The Company's deferred tax assets are composed primarily of its Irish subsidiaries' net operating loss carryovers, state net operating loss carryforwards available to reduce future taxable income of the Company's U.S. subsidiary, federal and California tax credit carryforwards, share-based compensation and other temporary differences. The Company maintains a valuation allowance against certain U.S. federal and state and Irish deferred tax assets. Each reporting period, the Company evaluates the need for a valuation allowance on its deferred tax assets by jurisdiction. No provision for income tax in Ireland has been recognized on undistributed earnings of the Company’s U.S. and Swiss subsidiaries. The Company considers the U.S. earnings to be indefinitely reinvested. The Company expects to distribute the remaining cash from its Swiss subsidiary to its Irish parent in 2019 however, the Company considers any potential tax associated with the distribution of Swiss earnings to be insignificant. Unremitted earnings may be subject to withholding taxes (potentially at 5% in the U.S. and 5% in Switzerland) and Irish taxes (potentially at a rate of 12.5% ) if they were to be distributed as dividends. However, Ireland allows a credit against Irish taxes for U.S. and Swiss taxes withheld, and the Company's current year net operating losses in Ireland are sufficient to offset any potential dividend income received from its overseas subsidiaries. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Preparation and Presentation of Financial Information | Basis of Preparation and Presentation of Financial Information These accompanying Unaudited Interim Condensed Consolidated Financial Statements have been prepared in accordance with the accounting principles generally accepted in the U.S. (“GAAP”) and with the instructions for Form 10-Q and Regulation S-X statements. Accordingly, they do not include all of the information and notes required for complete financial statements. These interim Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Notes thereto contained in the Company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 15, 2019 (the “2018 Form 10-K”). These Unaudited Interim Condensed Consolidated Financial Statements are presented in U.S. dollars, which is the functional currency of the Company and its consolidated subsidiaries. These Unaudited Interim Condensed Consolidated Financial Statements include the accounts of the Company and its consolidated subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Unaudited Interim Financial Information The accompanying Unaudited Interim Condensed Consolidated Financial Statements and related disclosures are unaudited, have been prepared on the same basis as the annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for a fair presentation of the results of operations for the periods presented. The year-end condensed consolidated balance sheet data was derived from audited financial statements, however certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. The condensed consolidated results of operations for any interim period are not necessarily indicative of the results to be expected for the full year or for any other future year or interim period. |
Use of Estimates | Use of Estimates The preparation of the Condensed Consolidated Financial Statements in conformity with GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures. On an ongoing basis, management evaluates its estimates, including critical accounting policies or estimates related to revenue recognition, share-based compensation and research and development expenses. The Company bases its estimates on historical experience and on various other market specific and other relevant assumptions that management believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Because of the uncertainties inherent in such estimates, actual results may differ materially from these estimates. |
Loss Contingencies | Loss Contingencies Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. The Company's accruals for losses are based on management's judgment of all possible outcomes and their financial effect, the probability of losses, and where applicable, the consideration of opinions of the Company's legal counsel. The Company’s accounting policy for legal costs related to loss contingencies is to accrue for the probable fees that can be reasonably estimated and expensed as incurred. Additionally, the Company records insurance recovery receivable from third party insurers when recovery has been determined to be probable. |
Lessee, Leases | Leases At the inception, the Company determines if an arrangement is a lease. If so, the Company evaluates the lease agreement to determine whether the lease is an operating or capital using the criteria in ASC 842. The Company does not recognize right-of-use assets and lease liabilities that arise from short-term leases for any class of underlying assets. When lease agreements also require the Company to make additional payments for taxes, insurance and other operating expenses incurred during the lease period, such payments are expensed as incurred. Operating Leases Operating leases are included in the operating lease right-of-use assets, lease liability, current and lease liability, non-current in the Company's Condensed Consolidated Balance Sheets. Operating lease right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized at the lease commencement date based on the present value of minimum lease payments over the lease term. In determining the present value of lease payments, the Company uses its incremental borrowing rate based on information available at the lease commencement date. The operating lease right-of-use assets also include any lease prepayments made and exclude lease incentives including rent abatements and/or concessions and rent holidays. Tenant improvements made by the Company as a lessee in which they are deemed to be owned by the lessor is viewed as lease prepayments by the Company and included in the operating lease right-of-use assets. Lease expense is recognized on a straight-line basis over the expected lease term. For lease agreements entered after the adoption of ASC 842 that include lease and non-lease components, such components are generally accounted separately. |
Segment and Concentration of Risk | Segment and Concentration of Risks The Company operates in one segment. The Company’s chief operating decision maker (the “CODM”), its Chief Executive Officer, manages the Company’s operations on a consolidated basis for purposes of allocating resources. When evaluating the Company’s financial performance, the CODM reviews all financial information on a consolidated basis. Financial instruments that potentially subject the Company to concentration of credit risk consist of cash and cash equivalents and accounts receivable. The Company places its cash equivalents with high credit quality financial institutions and by policy, limits the amount of credit exposure with any one financial institution. Deposits held with banks may exceed the amount of insurance provided on such deposits. The Company has not experienced any losses on its deposits of cash and cash equivalents and its credit risk exposure is up to the extent recorded on the Company's Consolidated Balance Sheet. The receivable from Roche recorded in prepaid expenses and other current assets in the Condensed Consolidated Balance Sheet are amounts due from a Roche entity located in Switzerland under the License Agreement that became effective January 22, 2014. Revenue recorded in the Condensed Consolidated Statements of Operations consists of reimbursement from Roche for research and development services. The Company's credit risk exposure is up to the extent recorded on the Company's Condensed Consolidated Balance Sheet. As of September 30, 2019 , $4.2 million of the Company’s property and equipment, net were held in the U.S. and none were in Ireland. As of December 31, 2018 , $52.8 million of the Company's property and equipment, net were held in the U.S. and none were in Ireland. The Company does not own or operate facilities for the manufacture, packaging, labeling, storage, testing or distribution of nonclinical or clinical supplies of any of its drug candidates. The Company instead contracts with and relies on third-parties to manufacture, package, label, store, test and distribute all preclinical development and clinical supplies of our drug candidates, and it plans to continue to do so for the foreseeable future. The Company also relies on third-party consultants to assist in managing these third-parties and assist with its manufacturing strategy. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In November 2018, the FASB issued Accounting Standards Update 2018-18 ("ASU 2018-18"), Collaborative Arrangements: Clarifying the Interaction between Topic 808 and Topic 606, which clarifies when transactions between collaborative arrangement participants are in the scope of ASC 606 and provides some guidance on presentation of transactions not in the scope of ASC 606. This ASU is effective for public business entities for annual and interim periods in fiscal years beginning after December 15, 2019. Early adoption is permitted as long as entities have already adopted the guidance in ASC 606. The Company does not currently expect the adoption of ASU 2018-18 to have an impact on its consolidated financial statements. The Company will continue to evaluate the impact of ASU 2018-18 on its consolidated financial statements in connection with Roche License Agreement and Celgene Collaboration Agreement. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | The impact of the adoption of ASC 842 on the accompanying Condensed Consolidated Balance Sheet as of January 1, 2019 was as follows (in thousands): December 31, 2018 Adjustments due to the Adoption of Topic 842 January 1, 2019 Property and equipment, net $ 52,835 $ (47,859 ) $ 4,976 Operating lease right-of-use assets $ — $ 28,530 $ 28,530 Deferred tax assets $ 9,702 $ (994 ) $ 8,708 Lease liability, current $ — $ 4,717 $ 4,717 Other current liabilities (1) $ 5,926 $ (44 ) $ 5,882 Build-to-suit lease obligation, current $ 1,645 $ (1,645 ) $ — Lease liability, non-current $ — $ 22,939 $ 22,939 Build-to-suit lease obligation, non-current $ 49,901 $ (49,901 ) $ — Deferred rent, non-current $ 176 $ (176 ) $ — Accumulated deficit $ (597,995 ) $ 3,787 $ (594,208 ) __________________ (1) Amount as of December 31, 2018 includes Deferred rent, current. |
Composition of Certain Balanc_2
Composition of Certain Balance Sheet Items (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Composition of Certain Balance Sheet Items [Abstract] | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure | Prepaid expenses and other current assets consisted of the following (in thousands): September 30, December 31, 2019 2018 Litigation insurance recovery receivable (1) $ 15,750 $ — Other 3,148 3,731 Prepaid expenses and other current assets $ 18,898 $ 3,731 ______________________ (1) The Company has recorded a litigation insurance recovery receivable of $15.75 million as of September 30, 2019 within prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets, which represents the expected payment of the litigation settlement by the Company’s insurance carriers. See Note 6, “ Commitments and Contingencies ” . |
Schedule of Property and Equipment | Property and equipment, net consisted of the following (in thousands): September 30, December 31, 2019 2018 Machinery and equipment $ 9,319 $ 9,693 Leasehold improvements 1,245 98 Purchased computer software 1,303 1,303 Build-to-suit property (2) — 52,245 11,867 63,339 Less: accumulated depreciation and amortization (7,622 ) (10,504 ) Property and equipment, net $ 4,245 $ 52,835 ______________________ (2) The Company derecognized its build-to-suit asset for its current facility in South San Francisco, California on January 1, 2019 upon adoption of ASC 842 due to a change in classification of its build-to-suit lease under ASC 840 to an operating lease under ASC 842. |
Schedule of Other Current Liabilities | Other current liabilities consisted of the following (in thousands): September 30, December 31, 2019 2018 Payroll and related expenses $ 3,647 $ 4,507 Provision for legal settlement (3) 15,750 — Professional services 353 1,097 Deferred rent — 44 Other 328 278 Other current liabilities $ 20,078 $ 5,926 ______________________ (3) As a result of signing of the memorandum of understanding and the potential liability becoming probable and estimable, the Company has recorded a provision for legal settlement for $15.75 million within other current liabilities on the Condensed Consolidated Balance Sheets as of September 30, 2019 . See Note 6, "Commitment and Contingencies". |
Net Loss Per Ordinary Share (Ta
Net Loss Per Ordinary Share (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Calculation of Basic and Diluted Net Income or Loss Per Ordinary Share | Net loss per ordinary share was determined as follows (in thousands, except per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Numerator: Net loss $ (19,448 ) $ (24,559 ) $ (56,123 ) $ (133,184 ) Denominator: Weighted-average ordinary shares outstanding 39,897 39,850 39,877 39,457 Net loss per share: Basic and diluted net loss per share $ (0.49 ) $ (0.62 ) $ (1.41 ) $ (3.38 ) |
Ordinary Shares Equivalent Not Included in Diluted Net Loss Per Share | The equivalent ordinary shares not included in diluted net loss per share because their effect would be anti-dilutive are as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Stock options to purchase ordinary shares 7,185 7,253 7,185 7,253 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of lease liability maturity analysis and future minimum rentals to be received | Future minimum payments under the above-described noncancelable operating leases, including a reconciliation to the lease liabilities recognized in the Condensed Consolidated Balance Sheets, and future minimum rentals to be received under the Sub-Sublease as of September 30, 2019 are as follows (in thousands): Year Ended December 31, Operating Leases Sub-Sublease Rental 2019 (3 months) 1,482 $ 702 2020 6,004 2,843 2021 6,165 2,944 2022 6,350 3,047 2023 6,535 3,019 Total 26,536 $ 12,555 Less: Present value adjustment (2,343 ) Nominal lease payments (31 ) Lease liability $ 24,162 |
Schedule of Future Minimum Rental Payments under operating lease, build-to-suit lease obligation and future minimum rentals to be received under ASC 840 | Under ASC 840, future minimum payments under operating lease, build-to-suit lease obligation and future minimum rentals to be received under the Sub-Sublease as of December 31, 2018 was as follows (in thousands): Year Ended December 31, Operating Lease Expected Cash Payments Under Build-To-Suit Lease Obligation Sub-Sublease Rental 2019 $ 23 $ 5,803 $ 2,746 2020 — 5,979 2,843 2021 — 6,165 2,944 2022 — 6,350 3,047 2023 — 6,535 3,019 Total $ 23 $ 30,832 $ 14,599 |
Schedule of Contractual Obligations by Fiscal Year Maturity | The following is a summary of the Company's non-cancelable purchase commitments and contractual obligations as of September 30, 2019 (in thousands): Total 2019 2020 2021 2022 2023 Thereafter Purchase Obligations (1) $ 545 $ 545 $ — $ — $ — $ — $ — Provision for legal settlement (2) 15,750 15,750 — — — — — Contractual obligations under license agreements (3) 1,160 265 105 95 80 80 535 Total $ 17,455 $ 16,560 $ 105 $ 95 $ 80 $ 80 $ 535 ________________ (1) Purchase obligations consist of non-cancelable purchase commitments to suppliers. (2) The Company has recorded a litigation insurance recovery receivable of $15.75 million as of September 30, 2019 within prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets, which represents the expected payment of the litigation settlement by the Company’s insurance carriers. (3) Excludes future obligations pursuant to the cost-sharing arrangement under the Company's License Agreement with Roche. Amounts of such obligations, if any, cannot be determined at this time. |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Summary of Share-Based Compensation Expense | The following table summarizes share-based compensation expense for the periods presented (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Research and development $ 1,955 $ 2,888 $ 6,154 $ 7,699 General and administrative 3,861 4,154 12,144 12,554 Restructuring costs (1) $ — $ — — $ 2,512 Total share-based compensation expense $ 5,816 $ 7,042 $ 18,298 $ 22,765 (1) Restructuring costs for the nine months ended September 30, 2018 included $2.5 million of share-based compensation expenses related to the contractual acceleration of vesting of certain stock options granted to executive officers. |
Fair Value of Options Granted | The fair value of the options granted to employees and non-employee directors during the three and nine months ended September 30, 2019 and 2018 was estimated as of the grant date using the Black-Scholes option-pricing model assuming the weighted-average assumptions listed in the following table: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Expected volatility 81.0% —% 81.4% 79.4% Risk-free interest rate 1.8% —% 2.3% 2.8% Expected dividend yield —% —% —% —% Expected life (in years) 6.0 0 6.0 6.0 Weighted average grant date fair value $7.09 $— $8.61 $13.82 |
Summary of Company's Share Option Activity | The following table summarizes the Company’s stock option activity during the nine months ended September 30, 2019 : Options Weighted Weighted Aggregate Outstanding at December 31, 2018 6,726,715 $ 26.82 7.39 $ 2,169 Granted 1,290,475 12.24 Exercised (32,850 ) 6.56 Canceled (799,360 ) 34.54 Outstanding at September 30, 2019 7,184,980 $ 23.44 7.37 $ 720 Vested and expected to vest at September 30, 2019 6,787,765 $ 23.78 7.30 $ 720 Vested at September 30, 2019 3,418,454 $ 28.10 6.11 $ 720 |
Restructuring (Tables)
Restructuring (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring and Related Costs | The following table summarizes the restructuring charges (credits) recognized in the Condensed Consolidated Statements of Operations during the three and nine months ended September 30, 2019 and 2018 (in thousands): Three Months Ended September 30, Nine Months Ended 2019 2018 2019 2018 Termination Benefits $ — $ 466 $ (61 ) $ 8,973 Non-Cash Termination Benefits — — — 2,512 Contract Termination Costs — (4,343 ) — 5,532 Non-Cash Contract Termination Costs — — — 10 Other — 705 — 705 Total restructuring charges (credits) $ — $ (3,172 ) $ (61 ) $ 17,732 The Company has completed all of its restructuring activities and does not expect to incur additional costs associated with the restructuring. The cumulative amount incurred to date is $16.1 million as of September 30, 2019 . The following table summarizes the restructuring liability and utilization by cost type associated with the restructuring activities during the nine months ended September 30, 2019 (in thousands): Restructuring Liability Termination Benefits Contract Termination Costs Assets Impairment Other Total Balance at December 31, 2018 $ 461 $ — $ — $ — $ 461 Restructuring charges (credit) (61 ) — — — (61 ) Reductions for cash payments (400 ) — — — (400 ) Balance at September 30, 2019 $ — $ — $ — $ — $ — |
Organization - Additional Infor
Organization - Additional Information (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 | Sep. 30, 2018 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Accumulated deficit | $ (650,331) | $ (594,208) | $ (597,995) | |
Cash and cash equivalents | $ 390,304 | $ 427,659 | $ 451,512 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Impact of Adoption of ASC 842 (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Property and equipment, net | $ 4,245 | $ 4,976 | $ 52,835 |
Operating lease right-of-use assets | 24,607 | 28,530 | 0 |
Deferred tax assets | 9,459 | 8,708 | 9,702 |
Lease liability, current | 5,002 | 4,717 | 0 |
Other current liabilities | 20,078 | 5,882 | 5,926 |
Build-to-suit lease obligation, current | 0 | 0 | 1,645 |
Lease liability, non-current | 19,161 | 22,939 | 0 |
Build-to-suit lease obligation, non-current | 0 | 0 | 49,901 |
Deferred rent | 0 | 0 | 176 |
Accumulated deficit | (650,331) | (594,208) | $ (597,995) |
Total Operating Lease liability | $ 24,162 | ||
ASC-842 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Property and equipment, net | (47,859) | ||
Operating lease right-of-use assets | 28,530 | ||
Cumulative effect of new accounting pronouncement | (994) | ||
Lease liability, current | 4,717 | ||
Other current liabilities | (44) | ||
Build-to-suit lease obligation, current | (1,645) | ||
Lease liability, non-current | 22,939 | ||
Build-to-suit lease obligation, non-current | (49,901) | ||
Deferred rent | (176) | ||
Accumulated deficit | 3,787 | ||
Discount rate, percent | 4.25% | ||
Total Operating Lease liability | 27,700 | ||
Built-to-suit leases, asset | 47,900 | ||
Built-to-suit leases, liability | $ 51,500 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 | |
Accounting Policies [Abstract] | ||||
Provision for legal settlement | $ 15,750 | [1] | $ 0 | |
Litigation insurance recovery receivable | 15,750 | [2] | 0 | |
Significant accounting policies [line item] | ||||
Property and equipment, net | 4,245 | $ 4,976 | 52,835 | |
UNITED STATES | ||||
Significant accounting policies [line item] | ||||
Property and equipment, net | 4,200 | 52,800 | ||
IRELAND | ||||
Significant accounting policies [line item] | ||||
Property and equipment, net | $ 0 | $ 0 | ||
[1] | As a result of signing of the memorandum of understanding and the potential liability becoming probable and estimable, the Company has recorded a provision for legal settlement for $15.75 million within other current liabilities on the Condensed Consolidated Balance Sheets as of September 30, 2019. See Note 6, "Commitment and Contingencies". | |||
[2] | The Company has recorded a litigation insurance recovery receivable of $15.75 million as of September 30, 2019 within prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets, which represents the expected payment of the litigation settlement by the Company’s insurance carriers. See Note 6, “Commitments and Contingencies”. |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Level 1 [Member] | ||
Fair Value Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market funds at carrying value | $ 359 | $ 306.2 |
Composition of Certain Balanc_3
Composition of Certain Balance Sheet Items Composition of Certain Balance Sheet Items - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||
Litigation insurance recovery receivable | $ 15,750 | [1] | $ 0 |
Other | 3,148 | 3,731 | |
Prepaid expenses and other current assets | $ 18,898 | $ 3,731 | |
[1] | The Company has recorded a litigation insurance recovery receivable of $15.75 million as of September 30, 2019 within prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets, which represents the expected payment of the litigation settlement by the Company’s insurance carriers. See Note 6, “Commitments and Contingencies”. |
Composition of Certain Balanc_4
Composition of Certain Balance Sheet Items - Schedule of Property and Equipment (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 | |
Composition of Certain Balance Sheet Items [Abstract] | ||||
Machinery and equipment | $ 9,319 | $ 9,693 | ||
Leasehold improvements | 1,245 | 98 | ||
Purchased computer software | 1,303 | 1,303 | ||
Build-to-suit property | 0 | [1] | 52,245 | |
Property and equipment, gross | 11,867 | 63,339 | ||
Less: accumulated depreciation and amortization | (7,622) | (10,504) | ||
Property and equipment, net | $ 4,245 | $ 4,976 | $ 52,835 | |
[1] | The Company derecognized its build-to-suit asset for its current facility in South San Francisco, California on January 1, 2019 upon adoption of ASC 842 due to a change in classification of its build-to-suit lease under ASC 840 to an operating lease under ASC 842. |
Composition of Certain Balanc_5
Composition of Certain Balance Sheet Items - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Composition of Certain Balance Sheet Items [Abstract] | ||||
Depreciation expense | $ 0.4 | $ 0.8 | $ 1.2 | $ 2.4 |
Composition of Certain Balanc_6
Composition of Certain Balance Sheet Items - Schedule of Other Current Liabilities (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 | |
Composition of Certain Balance Sheet Items [Abstract] | ||||
Payroll and related expenses | $ 3,647 | $ 4,507 | ||
Provision for legal settlement | 15,750 | [1] | 0 | |
Professional services | 353 | 1,097 | ||
Deferred rent | 0 | 44 | ||
Other | 328 | 278 | ||
Other current liabilities | $ 20,078 | $ 5,882 | $ 5,926 | |
[1] | As a result of signing of the memorandum of understanding and the potential liability becoming probable and estimable, the Company has recorded a provision for legal settlement for $15.75 million within other current liabilities on the Condensed Consolidated Balance Sheets as of September 30, 2019. See Note 6, "Commitment and Contingencies". |
Net Loss Per Ordinary Share - C
Net Loss Per Ordinary Share - Calculation of Basic and Diluted Net Loss Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Net Income (Loss) Attributable to Parent [Abstract] | ||||
Net loss | $ (19,448) | $ (24,559) | $ (56,123) | $ (133,184) |
Weighted Average Number of Shares Outstanding, Basic [Abstract] | ||||
Weighted-average ordinary shares outstanding (in shares) | 39,897 | 39,850 | 39,877 | 39,457 |
Earnings Per Share, Basic and Diluted [Abstract] | ||||
Basic and diluted net loss per share (in dollars per share) | $ (0.49) | $ (0.62) | $ (1.41) | $ (3.38) |
Net Loss Per Ordinary Share - O
Net Loss Per Ordinary Share - Ordinary Shares Equivalent Not Included in Diluted Net Loss Per Share (Detail) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Options to purchase ordinary shares [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Stock options to purchase ordinary shares not included in diluted net loss per share (in shares) | 7,185 | 7,253 | 7,185 | 7,253 |
Commitment and Contingencies -
Commitment and Contingencies - Lease Narrative (Details) | Sep. 24, 2018 | Jul. 18, 2018USD ($)ft² | Apr. 30, 2016USD ($) | Mar. 31, 2016ft² | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2016USD ($) | Jan. 01, 2019USD ($) |
Lease Description [Line Items] | |||||||||||
Total operating lease cost recorded under ASC 842 | $ 1,600,000 | $ 4,800,000 | |||||||||
Total cash paid against operating lease liability | $ 1,500,000 | $ 4,300,000 | |||||||||
Rent expense recorded under ASC 840 | $ 200,000 | $ 600,000 | |||||||||
Operating Lease, Current SSF Facility (in sq ft) | ft² | 128,751 | ||||||||||
Operating Lease, Weighted Average Remaining Lease Term | 4 years 3 months | 4 years 3 months | |||||||||
Operating Lease, Current SSF Facility, term of contract | 7 years 9 months 30 days | ||||||||||
Operating Lease, Current SSF Facility, Expiration date | Dec. 31, 2023 | ||||||||||
Operating, Current SSF Facility, Total lease payments due over lease term | $ 39,200,000 | ||||||||||
Built-to-suit leases, at cost | $ 52,300,000 | ||||||||||
Build-to-suit lease obligation, current and noncurrent | 51,500,000 | ||||||||||
Build-to-suit lease obligation, current | $ 0 | $ 0 | 1,645,000 | $ 0 | |||||||
Build-to-suit lease obligation, non-current | 0 | 0 | 49,901,000 | 0 | |||||||
Operating lease right-of-use assets | 24,607,000 | 24,607,000 | 0 | 28,530,000 | |||||||
Lease liability | 24,162,000 | 24,162,000 | |||||||||
Restricted cash, non-current | 2,704,000 | 4,056,000 | 2,704,000 | 4,056,000 | 4,056,000 | ||||||
Area of sub-sublease rental | ft² | 46,641 | ||||||||||
Sublease income | $ 700,000 | $ 2,200,000 | |||||||||
Sub-sublease rentals, initial annual base rent | $ 2,700,000 | ||||||||||
Sub-sublease rentals, percent annual rent increase | 3.50% | ||||||||||
Sub-sublease rentals, term of contract | 5 years 2 months 12 days | ||||||||||
Sub-sublease rentals, Percent of rental gain attributable to sublandlord | 50.00% | ||||||||||
ASC-842 | |||||||||||
Lease Description [Line Items] | |||||||||||
Build-to-suit lease obligation, current | (1,645,000) | ||||||||||
Build-to-suit lease obligation, non-current | (49,901,000) | ||||||||||
Operating lease right-of-use assets | 28,530,000 | ||||||||||
Lease liability | $ 27,700,000 | ||||||||||
Discount rate, percent | 4.25% | 4.25% | |||||||||
Built-to-Suit Lease [Member] | |||||||||||
Lease Description [Line Items] | |||||||||||
Tenant improvement allowance | $ 14,200,000 | ||||||||||
Amount capitalized under Build-to-Suit Transaction | 36,500,000 | ||||||||||
Capitalized Interest under Build-to-Suit Transaction | 1,200,000 | ||||||||||
Tenant improvements | $ 15,800,000 | ||||||||||
Payments for (Proceeds from) Tenant Allowance | $ (14,200,000) | ||||||||||
Ground rent | 100,000 | 400,000 | |||||||||
Built-to-Suit Lease [Member] | Other Nonoperating Income (Expense) [Member] | |||||||||||
Lease Description [Line Items] | |||||||||||
Build-to-suit lease, interest expense | $ 900,000 | $ 2,800,000 | |||||||||
Current SSF Facility operating lease under ASC 842 | |||||||||||
Lease Description [Line Items] | |||||||||||
Line of credit facility | 4,100,000 | ||||||||||
Face amount reduction on third anniversary | 1,400,000 | ||||||||||
Face amount reduction on fifth anniversary | $ 1,400,000 | ||||||||||
Line of credit has been used | $ 0 | $ 0 |
Commitment and Contingencies _2
Commitment and Contingencies - Dublin Lease (Details) | 1 Months Ended | ||||
Sep. 30, 2018ft² | Dec. 01, 2019 | Sep. 30, 2019EUR (€) | Sep. 30, 2019USD ($) | Sep. 27, 2018 | |
Lease Description [Line Items] | |||||
Operating lease, future minimum payments due | $ | $ 26,536,000 | ||||
Dublin, Ireland [Member] | |||||
Lease Description [Line Items] | |||||
Operating lease, Dublin, area of office space (in sq ft) | ft² | 133 | ||||
Operating lease, Dublin, term of contract (in years) | 1 year | ||||
Operating lease, Dublin, renewal term | 1 year | ||||
Operating lease, future minimum payments due | € 28,000 | $ 31,000 | |||
Minimum [Member] | Dublin, Ireland [Member] | |||||
Lease Description [Line Items] | |||||
Operating lease, Dublin, renewal term | 3 months |
Commitment and Contingencies _3
Commitment and Contingencies - Schedule of Lease Liability Maturity Analysis and Future Minimum Rentals to be Received - (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Operating Lease | |
2019 (3 months) | $ 1,482 |
2020 | 6,004 |
2021 | 6,165 |
2022 | 6,350 |
2023 | 6,535 |
Total | 26,536 |
Less: Present value adjustment | (2,343) |
Nominal lease payments | (31) |
Lease liability | 24,162 |
Sub-Sublease Rental | |
2019 (3 months) | 702 |
2020 | 2,843 |
2021 | 2,944 |
2022 | 3,047 |
2023 | 3,019 |
Total | $ 12,555 |
Commitment and Contingencies _4
Commitment and Contingencies - Future Minimum Lease Payments Under Topic 840 (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Operating Lease | |
2019 | $ 23 |
2020 | 0 |
2021 | 0 |
2022 | 0 |
2023 | 0 |
Total | 23 |
Sub-Sublease Rental | |
2019 | 2,746 |
2020 | 2,843 |
2021 | 2,944 |
2022 | 3,047 |
2023 | 3,019 |
Total | 14,599 |
Built-to-Suit Lease [Member] | |
Expected Cash Payments Under Build-To-Suit Lease Obligation | |
2019 | 5,803 |
2020 | 5,979 |
2021 | 6,165 |
2022 | 6,350 |
2023 | 6,535 |
Total | $ 30,832 |
Commitment and Contingencies Co
Commitment and Contingencies Commitment and Contingencies - Commitment Narrative (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 | ||
Long-term Purchase Commitment [Line Items] | ||||
Purchase obligation | [1] | $ 545 | ||
Provision for legal settlement | 15,750 | [2] | $ 0 | |
Litigation insurance recovery receivable | 15,750 | [3] | $ 0 | |
Accrued Liabilities [Member] | ||||
Long-term Purchase Commitment [Line Items] | ||||
Commitment to suppliers included in accrued current liabilities | 100 | |||
Contractual obligations under license agreements included in accrued current liabilities | 200 | |||
Licensing Agreements [Member] | ||||
Long-term Purchase Commitment [Line Items] | ||||
Contractual Obligations under license agreements | $ 1,200 | |||
[1] | Purchase obligations consist of non-cancelable purchase commitments to suppliers. | |||
[2] | As a result of signing of the memorandum of understanding and the potential liability becoming probable and estimable, the Company has recorded a provision for legal settlement for $15.75 million within other current liabilities on the Condensed Consolidated Balance Sheets as of September 30, 2019. See Note 6, "Commitment and Contingencies". | |||
[3] | The Company has recorded a litigation insurance recovery receivable of $15.75 million as of September 30, 2019 within prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets, which represents the expected payment of the litigation settlement by the Company’s insurance carriers. See Note 6, “Commitments and Contingencies”. |
Commitment and Contingencies _5
Commitment and Contingencies - Contractual Obligations (Details) $ in Thousands | Sep. 30, 2019USD ($) | |
Purchase Obligations | ||
Total | $ 545 | [1] |
2019 | 545 | [1] |
2020 | 0 | |
2021 | 0 | |
2022 | 0 | |
2023 | 0 | |
Thereafter | 0 | |
Total | ||
Total | 17,455 | |
2019 | 16,560 | |
2020 | 105 | |
2021 | 95 | |
2022 | 80 | |
2023 | 80 | |
Thereafter | 535 | |
Provision for Legal Settlement [Member] | ||
Contractual obligations, Fiscal Year Maturity | ||
Total | 15,750 | [2] |
2019 | 15,750 | [2] |
2020 | 0 | |
2021 | 0 | |
2022 | 0 | |
2023 | 0 | |
Thereafter | 0 | |
License Agreements [Member] | ||
Contractual obligations, Fiscal Year Maturity | ||
Total | 1,160 | [3] |
2019 | 265 | [3] |
2020 | 105 | [3] |
2021 | 95 | [3] |
2022 | 80 | [3] |
2023 | 80 | [3] |
Thereafter | $ 535 | [3] |
[1] | Purchase obligations consist of non-cancelable purchase commitments to suppliers. | |
[2] | The Company has recorded a litigation insurance recovery receivable of $15.75 million as of September 30, 2019 within prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets, which represents the expected payment of the litigation settlement by the Company’s insurance carriers. | |
[3] | Excludes future obligations pursuant to the cost-sharing arrangement under the Company's License Agreement with Roche. Amounts of such obligations, if any, cannot be determined at this time. |
Commitment and Contingencies _6
Commitment and Contingencies Commitment and Contingencies - Legal Proceedings (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Provision for legal settlement | $ 15,750 | [1] | $ 0 |
Litigation insurance recovery receivable | $ 15,750 | [2] | $ 0 |
[1] | As a result of signing of the memorandum of understanding and the potential liability becoming probable and estimable, the Company has recorded a provision for legal settlement for $15.75 million within other current liabilities on the Condensed Consolidated Balance Sheets as of September 30, 2019. See Note 6, "Commitment and Contingencies". | ||
[2] | The Company has recorded a litigation insurance recovery receivable of $15.75 million as of September 30, 2019 within prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets, which represents the expected payment of the litigation settlement by the Company’s insurance carriers. See Note 6, “Commitments and Contingencies”. |
Significant Agreements - Roche
Significant Agreements - Roche License Agreement (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Jun. 30, 2017 | May 31, 2014 | Feb. 28, 2014 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | |
License Agreement [Line Items] | |||||||||
Collaboration revenue | $ 205,000 | $ 255,000 | $ 558,000 | $ 761,000 | |||||
Collaborative Arrangement [Member] | |||||||||
License Agreement [Line Items] | |||||||||
Licensing Agreement, Portion of Revenue and Expenses Attributable to Company, Percentage | 30.00% | ||||||||
Roche [Member] | |||||||||
License Agreement [Line Items] | |||||||||
Milestone Achievement, Clinical Milestone | $ 30,000,000 | ||||||||
Milestone Method, Portion of Milestone Amount Recognized as Offset to R&D Expense | $ 3,400,000 | ||||||||
Collaboration Revenue, Clinical Milestone | $ 26,600,000 | ||||||||
Revenue, Remaining Performance Obligation, Amount | 0 | $ 0 | $ 0 | ||||||
License Agreement, Development Services, Payment Term | 45 days | ||||||||
License Agreement, Milestone Payments, Payment Term | 45 days | ||||||||
Roche [Member] | Royalty Bearing License [Member] | |||||||||
License Agreement [Line Items] | |||||||||
Allocated Consideration to Performance Obligations | 48,900,000 | $ 48,900,000 | |||||||
ASC 605 Allocated Consideration to Deliverables | 35,600,000 | 35,600,000 | |||||||
Roche [Member] | IND and Development Services [Member] | |||||||||
License Agreement [Line Items] | |||||||||
Allocated Consideration to Performance Obligations | 4,600,000 | 4,600,000 | |||||||
ASC 605 Allocated Consideration to Deliverables | 3,300,000 | 3,300,000 | |||||||
Roche [Member] | Supply Services [Member] | |||||||||
License Agreement [Line Items] | |||||||||
Allocated Consideration to Performance Obligations | 600,000 | 600,000 | |||||||
ASC 605 Allocated Consideration to Deliverables | 400,000 | 400,000 | |||||||
Roche [Member] | Clinical Product Supply [Member] | |||||||||
License Agreement [Line Items] | |||||||||
Allocated Consideration to Performance Obligations | 1,100,000 | 1,100,000 | |||||||
ASC 605 Allocated Consideration to Deliverables | 800,000 | 800,000 | |||||||
Roche [Member] | Collaborative Arrangement [Member] | |||||||||
License Agreement [Line Items] | |||||||||
Collaboration Revenue, License, Upfront Payment | $ 30,000,000 | ||||||||
Milestone Payment Received, Clinical Milestone | $ 15,000,000 | ||||||||
License Agreement, Potential Payment Upon Achievement of Development, Regulatory and Various First Commercial Sales Milestones | 350,000,000 | ||||||||
License Agreement, Potential Payment for Achievement of non U.S. Commercial Sales Milestones | $ 175,000,000 | ||||||||
Licensing Agreement, Cost Allocation, Percentage | 100.00% | ||||||||
Licensing Agreement, Portion of Revenue and Expenses Attributable to Company, Percentage | 70.00% | ||||||||
License Agreement, Potential Alternative Commercial Sales Milestones | $ 155,000,000 | ||||||||
License Agreement, Initial Transaction Price | 55,100,000 | 55,100,000 | |||||||
Cost sharing payments recognized as research and development expense | 2,700,000 | 3,100,000 | 6,700,000 | 9,500,000 | |||||
Accounts Receivable, after Allowance for Credit Loss, Current | 42,000 | 42,000 | $ 2,000 | ||||||
Roche [Member] | Collaborative Arrangement [Member] | Royalty Bearing License [Member] | |||||||||
License Agreement [Line Items] | |||||||||
License Agreement, Initial Transaction Price | 45,000,000 | 45,000,000 | |||||||
Roche [Member] | Collaborative Arrangement [Member] | IND and Development Services [Member] | |||||||||
License Agreement [Line Items] | |||||||||
License Agreement, Initial Transaction Price | 9,100,000 | 9,100,000 | |||||||
Roche [Member] | Collaborative Arrangement [Member] | Supply Services [Member] | |||||||||
License Agreement [Line Items] | |||||||||
License Agreement, Initial Transaction Price | 1,100,000 | 1,100,000 | |||||||
Roche [Member] | Development Costs Reimbursement [Member] | |||||||||
License Agreement [Line Items] | |||||||||
Development Reimbursement | $ 300,000 | $ 800,000 | |||||||
Roche [Member] | Research Reimbursement [Member] | |||||||||
License Agreement [Line Items] | |||||||||
Revenue, Remaining Performance Obligation, Amount | $ 0 | $ 0 |
Significant Agreements - Celgen
Significant Agreements - Celgene Collaboration Agreement (Details) $ / shares in Units, $ in Millions | Mar. 20, 2018USD ($)agreement_term$ / sharesshares |
Collaboration Program, US Rights [Member] | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |
Collaboration Agreement, Potential Regulatory Milestone Payments Per Program | $ 90 |
Collaboration Agreement, Potential Commercial Milestone Payments Per Program | 375 |
Collaboration Program, US Rights [Member] | Minimum [Member] | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |
Collaboration Agreement, Expected Allocation of Initial Transaction Price | 15 |
Collaboration Program, US Rights [Member] | Maximum [Member] | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |
Collaboration Agreement, Expected Allocation of Initial Transaction Price | 25 |
Collaboration Program, Global Rights [Member] | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |
Collaboration Agreement, Potential Regulatory Milestone Payments Per Program | 187.5 |
Collaboration Agreement, Potential Commercial Milestone Payments Per Program | 375 |
Collaboration Program, Global Rights [Member] | Minimum [Member] | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |
Collaboration Agreement, Expected Allocation of Initial Transaction Price | 10 |
Collaboration Program, Global Rights [Member] | Maximum [Member] | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |
Collaboration Agreement, Expected Allocation of Initial Transaction Price | 18 |
Celgene [Member] | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |
Collaboration Agreement, Upfront Payment | $ 100 |
Collaboration Agreement, Upfront Payment, Payment Term | 10 days |
Collaboration Agreement, Option Fees and Milestone Payments, Payment Term | 30 days |
Collaboration Agreement, Potential Regulatory and Commercial Milestone Payments Per Program | $ 562.5 |
Collaboration Agreement, Term of Agreement | 6 years |
Collaboration Agreement, Number of Additional 12 Month Period Extension Allowed | agreement_term | 2 |
Collaboration Agreement, Extension Fee per Extension Period | $ 10 |
Celgene [Member] | Collaboration Program, US Rights [Member] | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |
Collaboration Agreement, Exercise Fee per Program | 80 |
Celgene [Member] | Collaboration Program, Global Rights [Member] | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |
Collaboration Agreement, Exercise Fee per Program | $ 55 |
Celgene [Member] | Private Placement [Member] | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |
Share Subscription Agreement, Number of Ordinary Shares Issued in Transaction | shares | 1,174,536 |
Share Subscription Agreement, Price Per Share | $ / shares | $ 42.57 |
Share Subscription Agreement, Consideration Received on Transaction | $ 50 |
Share Subscription Agreement, Premium Received on Transaction | 10.2 |
Collaborative Arrangement [Member] | Celgene [Member] | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |
Collaboration Agreement, Initial Transaction Price | $ 110.2 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) $ / shares in Units, $ in Millions | Mar. 20, 2018USD ($)$ / sharesshares | Sep. 30, 2019vote$ / sharesshares | Sep. 30, 2019€ / sharesshares | Dec. 31, 2018$ / sharesshares | Dec. 31, 2018€ / sharesshares |
Class of Stock [Line Items] | |||||
Ordinary shares, number of authorized shares (in shares) | 100,000,000 | 100,000,000 | 100,000,000 | 100,000,000 | |
Ordinary shares, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | |||
Ordinary shares, number of issued shares (in shares) | 39,896,561 | 39,896,561 | 39,863,711 | 39,863,711 | |
Ordinary shares, number of outstanding shares (in shares) | 39,896,561 | 39,896,561 | 39,863,711 | 39,863,711 | |
Votes per share | vote | 1 | ||||
Euro deferred shares, number of shares authorized (in shares) | 10,000 | 10,000 | 10,000 | 10,000 | |
Euro deferred shares, nominal value (in euros per share) | € / shares | € 22 | € 22 | |||
Euro deferred shares, number of outstanding shares (in shares) | 0 | 0 | 0 | 0 | |
Celgene [Member] | Private Placement [Member] | |||||
Shareholders Equity [Line Items] | |||||
Ordinary Shares Sold, Number of Shares Issued in Transaction | 1,174,536 | ||||
Ordinary Shares Sold, Price Per Share | $ / shares | $ 42.57 | ||||
Ordinary Shares Sold, Consideration Received on Transaction | $ | $ 50 | ||||
Share Subscription Agreement, Fair Value of Shares Sold | $ | 39.8 | ||||
Share Subscription Agreement, Premium Received on Transaction | $ | $ 10.2 |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | May 15, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||||
Number of stock options granted to employees | 292,500 | 0 | 1,290,475 | 4,046,300 | ||
Vesting period | 4 years | |||||
Options outstanding | 7,184,980 | 7,184,980 | 6,726,715 | |||
Weighted average exercise price | $ 23.44 | $ 23.44 | $ 26.82 | |||
Non-vested awards, share-based compensation expected to be expensed through 2023, stock options | $ 47.2 | $ 47.2 | ||||
Expected recognition period of share-based compensation not yet recognized | 2 years 8 months 26 days | |||||
Stock Option [Member] | ||||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||||
Tax benefit from compensation expense | 1.2 | $ 1.3 | $ 3.6 | $ 3.4 | ||
Intrinsic value of options exercised | $ 0 | $ 0.3 | $ 0.1 | $ 2.4 | ||
2018 Long Term Incentive Plan [Member] | ||||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||||
Grant period | 10 years | |||||
Number of additional shares authorized | 1,177,933 | |||||
Maximum Number of Shares to be Issued - ISO Exercise | 2,500,000 | 2,500,000 | ||||
Authorized shares for issuance | 1,800,000 | |||||
Number of shares available for grant | 1,044,256 | 1,044,256 | ||||
2012 Long Term Incentive Plan [Member] | ||||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||||
Grant period | 10 years |
Share-Based Compensation - Summ
Share-Based Compensation - Summary of Share-Based Compensation Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 5,816 | $ 7,042 | $ 18,298 | $ 22,765 |
Research and development [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | 1,955 | 2,888 | 6,154 | 7,699 |
General and administrative [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | 3,861 | 4,154 | 12,144 | 12,554 |
Restructuring Charges [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 0 | $ 0 | $ 0 | $ 2,512 |
Share-Based Compensation - Fair
Share-Based Compensation - Fair Value of Options Granted (Detail) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Share-based Payment Arrangement [Abstract] | ||||
Expected volatility | 81.00% | 0.00% | 81.40% | 79.40% |
Risk-free interest rate | 1.80% | 0.00% | 2.30% | 2.80% |
Expected dividend yield | 0.00% | 0.00% | 0.00% | 0.00% |
Expected life (in years) | 6 years | 0 years | 6 years | 6 years |
Weighted average grant date fair value | $ 7.09 | $ 0 | $ 8.61 | $ 13.82 |
Share-based Compensation - Shar
Share-based Compensation - Share-based Compensation Plan - Option Activity (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Options | |||||
Options, outstanding beginning balance | 6,726,715 | ||||
Options, granted | 292,500 | 0 | 1,290,475 | 4,046,300 | |
Options, exercised | (32,850) | ||||
Options, canceled | (799,360) | ||||
Options, outstanding ending balance | 7,184,980 | 7,184,980 | 6,726,715 | ||
Options, vested and expected to vest ending balance | 6,787,765 | 6,787,765 | |||
Options, vested | 3,418,454 | 3,418,454 | |||
Weighted Average Exercise Price | |||||
Weighted Average Exercise Price, outstanding beginning balance | $ 26.82 | ||||
Weighted Average Exercise Price, granted | 12.24 | ||||
Weighted Average Exercise Price, exercised | 6.56 | ||||
Weighted Average Exercise Price, canceled | 34.54 | ||||
Weighted Average Exercise Price, outstanding ending balance | $ 23.44 | 23.44 | $ 26.82 | ||
Weighted Average Exercise Price, vested and expected to vest, ending balance | 23.78 | 23.78 | |||
Weighted Average Exercise Price, vested | $ 28.10 | $ 28.10 | |||
Options, Additional Disclosures | |||||
Weighted Average Remaining Contractual Life, outstanding (in years) | 7 years 4 months 13 days | 7 years 4 months 21 days | |||
Weighted Average Remaining Contractual Life, vested and expected to vest (in years) | 7 years 3 months 18 days | ||||
Weighted Average Remaining Contractual Life, vested (in years) | 6 years 1 month 9 days | ||||
Aggregate Intrinsic Value, outstanding | $ 720 | $ 720 | $ 2,169 | ||
Aggregate Intrinsic Value, vested and expected to vest, ending balance | 720 | 720 | |||
Aggregate Intrinsic Value, vested | $ 720 | $ 720 |
Restructuring - Schedule of Res
Restructuring - Schedule of Restructuring Charges (Credits) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges (credits) | $ 0 | $ (3,172) | $ (61) | $ 17,732 |
Termination Benefits | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges (credits) | 0 | 466 | (61) | 8,973 |
Non-cash Termination Benefits | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges (credits) | 0 | 0 | 0 | 2,512 |
Contract Termination Costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges (credits) | 0 | (4,343) | 0 | 5,532 |
Non-cash Contract Termination | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges (credits) | 0 | 0 | 0 | 10 |
Other | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges (credits) | $ 0 | $ 705 | $ 0 | $ 705 |
Restructuring - Schedule of R_2
Restructuring - Schedule of Restructuring Rollforward (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Restructuring Cost and Reserve [Line Items] | |
Cost incurred to date | $ 16,100 |
Restructuring Reserve [Roll Forward] | |
Beginning balance | 461 |
Restructuring charges | (61) |
Reductions for cash payments | (400) |
Ending balance | 0 |
Termination Benefits | |
Restructuring Reserve [Roll Forward] | |
Beginning balance | 461 |
Restructuring charges | (61) |
Reductions for cash payments | (400) |
Ending balance | 0 |
Contract Termination Costs | |
Restructuring Reserve [Roll Forward] | |
Beginning balance | 0 |
Restructuring charges | 0 |
Reductions for cash payments | 0 |
Ending balance | 0 |
Assets Impairment | |
Restructuring Reserve [Roll Forward] | |
Beginning balance | 0 |
Restructuring charges | 0 |
Reductions for cash payments | 0 |
Ending balance | 0 |
Other | |
Restructuring Reserve [Roll Forward] | |
Beginning balance | 0 |
Restructuring charges | 0 |
Reductions for cash payments | 0 |
Ending balance | $ 0 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Jan. 01, 2019 | Dec. 31, 2018 | |
Income Taxes [Line Items] | ||||||
Income tax expense (benefit) | $ 468 | $ 962 | $ 510 | $ (1,021) | ||
Net Tax Shortfall (Excess tax benefit) booked to Income Tax Provision, Amount | 900 | $ 1,000 | 1,900 | $ 1,300 | ||
Cumulative adj to Accumulated Deficit upon adoption of ASC 842 | $ (650,331) | $ (650,331) | $ (594,208) | $ (597,995) | ||
Revenue Commissioners, Ireland | ||||||
Income Taxes [Line Items] | ||||||
Effective income tax rate, percent | 12.50% | |||||
Internal Revenue Service (IRS) [Member] | ||||||
Income Taxes [Line Items] | ||||||
Potential Withholding Tax Rate | 5.00% | |||||
Swiss Federal Tax Administration (FTA) [Member] | ||||||
Income Taxes [Line Items] | ||||||
Potential Withholding Tax Rate | 5.00% | |||||
ASC-842 | ||||||
Income Taxes [Line Items] | ||||||
Cumulative effect of new accounting pronouncement | (994) | |||||
Cumulative adj to Accumulated Deficit upon adoption of ASC 842 | $ 3,787 |
Uncategorized Items - prta-2019
Label | Element | Value |
Accounting Standards Update 2016-02 [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 3,787,000 |
Accounting Standards Update 2016-02 [Member] | Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 3,787,000 |