Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Oct. 31, 2015 | |
Document and Entity Information | ||
Entity Registrant Name | Theravance Biopharma, Inc. | |
Entity Central Index Key | 1,583,107 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2015 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 37,839,185 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 127,114 | $ 89,215 |
Short-term marketable securities | 68,856 | 165,396 |
Accounts receivable, net of allowances of $579 and $87 at September 30, 2015 and December 31, 2014, respectively | 783 | 289 |
Receivables from collaborative arrangements | 19,640 | 1,840 |
Prepaid and other current assets | 9,705 | 6,084 |
Inventories | 12,141 | 12,546 |
Total current assets | 238,239 | 275,370 |
Property and equipment, net | 9,513 | 9,663 |
Long-term marketable securities | 0 | 51,399 |
Other investments | 8,000 | 0 |
Restricted cash | 833 | 833 |
Other assets | 921 | 506 |
Total assets | 257,506 | 337,771 |
Current liabilities: | ||
Accounts payable | 5,963 | 9,921 |
Accrued personnel-related expenses | 10,222 | 18,156 |
Accrued clinical and development expenses | 6,652 | 7,871 |
Other accrued liabilities | 4,322 | 5,219 |
Deferred revenue | 271 | 89 |
Total current liabilities | 27,430 | 41,256 |
Deferred rent | 4,746 | 5,150 |
Other long-term liabilities | $ 2,785 | $ 1,578 |
Commitments and contingencies (Note 3) | ||
Shareholders' equity | ||
Preferred shares, $0.00001 par value: 230 shares authorized, no shares issued or outstanding at September 30, 2015 and December 31, 2014, respectively | ||
Ordinary shares, $0.00001 par value: 200,000 shares authorized at September 30, 2015 and December 31, 2014; 33,935 and 32,221 shares issued and outstanding at September 30, 2015 and December 31, 2014, respectively | ||
Additional paid-in capital | $ 499,232 | $ 429,206 |
Accumulated other comprehensive income (loss) | 43 | (82) |
Accumulated deficit | (276,730) | (139,337) |
Total shareholders' equity | 222,545 | 289,787 |
Total liabilities and shareholders' equity | $ 257,506 | $ 337,771 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Account receivable, allowance | $ 579 | $ 87 |
Preferred shares, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Preferred shares, shares authorized | 230 | 230 |
Preferred shares, shares issued | 0 | 0 |
Preferred shares, outstanding shares | 0 | 0 |
Ordinary shares, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Ordinary shares, authorized shares | 200,000 | 200,000 |
Ordinary shares, shares issued | 33,935 | 32,221 |
Ordinary shares, outstanding shares | 33,935 | 32,221 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Revenue: | ||||
Product sales | $ 2,312 | $ 1,303 | $ 5,716 | $ 3,109 |
Revenue from collaborative arrangements | 8,386 | 5,033 | 32,517 | 7,146 |
Total revenue | 10,698 | 6,336 | 38,233 | 10,255 |
Costs and expenses: | ||||
Cost of goods sold | 581 | 369 | 1,456 | 836 |
Research and development | 30,367 | 38,324 | 96,763 | 126,330 |
Selling, general and administrative | 22,845 | 17,705 | 66,139 | 49,875 |
Total costs and expenses | 53,793 | 56,398 | 164,358 | 177,041 |
Loss from operations | (43,095) | (50,062) | (126,125) | (166,786) |
Interest and other income | 104 | 668 | 518 | 882 |
Loss before income taxes | (42,991) | (49,394) | (125,607) | (165,904) |
Provision for income taxes | 4,323 | 5,101 | 11,786 | 6,824 |
Net loss | $ (47,314) | $ (54,495) | $ (137,393) | $ (172,728) |
Net loss per share: | ||||
Basic and diluted net loss per share (in dollars per share) | $ (1.40) | $ (1.72) | $ (4.12) | $ (5.44) |
Shares used to compute basic and diluted net loss per share (in shares) | 33,689 | 31,754 | 33,353 | 31,746 |
Net unrealized gain (loss) on available-for-sale investments | $ 19 | $ (97) | $ 125 | $ (118) |
Total comprehensive loss | (47,295) | (54,592) | (137,268) | (172,846) |
Share-based compensation expense | 12,251 | 9,350 | 42,539 | 28,814 |
Research and development | ||||
Net loss per share: | ||||
Share-based compensation expense | 6,035 | 5,132 | 20,334 | 14,046 |
Selling, general and administrative | ||||
Net loss per share: | ||||
Share-based compensation expense | $ 6,216 | $ 4,218 | $ 22,205 | $ 14,768 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Operating activities | ||
Net loss | $ (137,393) | $ (172,728) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 2,292 | 2,493 |
Share-based compensation | 42,539 | 28,814 |
Excess tax benefits from share-based compensation | (206) | (393) |
Noncash revenue from collaborative arrangements | (8,000) | 0 |
Other | 79 | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (494) | (328) |
Receivables from collaborative arrangements | (17,800) | 753 |
Receivable from Theravance, Inc | 0 | 14,984 |
Prepaid and other current assets | (3,621) | (3,256) |
Inventories | 118 | (6,422) |
Other assets | (415) | 0 |
Accounts payable | (3,489) | (492) |
Accrued personnel-related expenses, accrued clinical and development expenses, and other accrued liabilities | (9,927) | 4,896 |
Deferred rent | (404) | 296 |
Income taxes payable | 1,305 | 5,875 |
Deferred revenue | 222 | (7,108) |
Other long-term liabilities | 83 | 0 |
Net cash used in operating activities | (135,111) | (132,616) |
Investing activities | ||
Purchases of property and equipment | (2,041) | (2,342) |
Purchases of marketable securities | (11,059) | (145,869) |
Maturities of marketable securities | 158,642 | 32,276 |
Net cash provided by (used in) investing activities | 145,542 | (115,935) |
Financing activities | ||
Proceeds from sale of ordinary shares to Mylan, net of premium | 25,753 | 0 |
Proceeds from sale of ordinary shares | 1,509 | 0 |
Excess tax benefit of share-based compensation | 206 | 393 |
Repurchase of restricted stock | 0 | (131) |
Cash and cash equivalents contributed from Theravance, Inc. (Note 1) | 0 | 277,541 |
Transfers from Theravance, Inc. | 0 | 92,976 |
Net cash provided by financing activities | 27,468 | 370,779 |
Net increase in cash and cash equivalents | 37,899 | 122,228 |
Cash and cash equivalents at beginning of period | 89,215 | 0 |
Cash and cash equivalents at end of period | 127,114 | 122,228 |
Supplemental disclosure of non-cash information | ||
Contribution of net assets, excluding cash and cash equivalents from Theravance, Inc. | $ 0 | $ 125,337 |
Description of Operations and S
Description of Operations and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2015 | |
Description of Operations and Summary of Significant Accounting Policies | |
Description of Operations and Summary of Significant Accounting Policies | 1. Description of Operations and Summary of Significant Accounting Policies Description of Operations The mission of Theravance Biopharma, Inc. (“Theravance Biopharma”, the “Company”, or “we” and other similar pronouns) is to create value from a unique and diverse set of assets: an approved product; a development pipeline of late-stage assets; and a productive research platform designed for long-term growth. Our pipeline of internally discovered product candidates includes potential best-in-class opportunities in underserved markets in the acute care setting, representing multiple opportunities for value creation. VIBATIV ® (telavancin), our first commercial product, is a once-daily dual-mechanism antibiotic approved in the United States, Europe and certain other countries for certain difficult-to-treat infections. Revefenacin (TD-4208) is an investigational long-acting muscarinic antagonist (“LAMA”) being developed as a potential once-daily, nebulized treatment for chronic obstructive pulmonary disease (“COPD”). Axelopran (TD-1211) is an investigational potential once-daily, oral treatment for opioid-induced constipation (“OIC”). Our earlier-stage clinical assets represent novel approaches for potentially treating diseases of the lung and gastrointestinal tract and infectious disease. In addition, we have an economic interest in future payments that may be made by Glaxo Group Limited or one of its affiliates (“GSK”) pursuant to its agreements with Theravance, Inc. (“Theravance”) relating to certain drug development programs, including the combination of fluticasone furoate, umeclidinium, and vilanterol (the “Closed Triple”). On June 1, 2014, pursuant to a Separation and Distribution Agreement between Theravance and Theravance Biopharma (the “Separation and Distribution Agreement”), Theravance separated its late-stage respiratory assets partnered with GSK from its biopharmaceutical operations by transferring its discovery, development and commercialization operations (the “Biopharmaceutical Business”) and contributing $393.0 million of cash, cash equivalents and marketable securities into its then wholly-owned subsidiary Theravance Biopharma. On June 2, 2014, Theravance made a pro rata dividend distribution to its stockholders of record on May 15, 2014 of one ordinary share of Theravance Biopharma for every three and one half shares of Theravance common stock outstanding on the record date (the “Spin-Off”). The Spin-Off resulted in Theravance Biopharma operating as an independent, publicly-traded company. Prior to June 2, 2014, Theravance operated the Biopharmaceutical Business. While Theravance Biopharma is incorporated under Cayman Island law, the Company re-domiciled in Ireland and became an Irish tax resident effective July 1, 2015. Basis of Presentation The condensed consolidated financial information as of September 30, 2015, and the three and nine months ended September 30, 2015 and 2014 are unaudited but include all adjustments (consisting only of normal recurring adjustments), which we consider necessary for a fair presentation of the financial position at such date and of the operating results and cash flows for those periods, and have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated December 31, 2014 financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2014, filed with the Securities and Exchange Commission (“SEC”) on March 13, 2015. We describe the Biopharmaceutical Business transferred to us by Theravance in connection with the Spin-Off as if the Biopharmaceutical Business were our business for all historical periods presented and described. However, Theravance Biopharma did not conduct any operations prior to the Spin-Off. Significant Accounting Policies Other than the following, there have been no new or material revisions in our significant accounting policies described in Note 1 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2014. Inventories Inventories consist of raw materials, work-in-process and finished goods related to the production of VIBATIV. Raw materials include VIBATIV active pharmaceutical ingredient (API) and other raw materials. Work-in-process and finished goods include third-party manufacturing costs and labor and indirect costs we incur in the production process. Included in inventories are raw materials and work-in-process that may be used as clinical products, which are charged to research and development expense when consumed. In addition, under certain commercialization agreements, we may sell VIBATIV packaged in unlabeled vials that are recorded in work-in-process. Inventories are stated at the lower of cost or market value. We determine the cost of inventory using the average-cost method for validation batches. We assess our inventory levels quarterly and write down inventory that is expected to become obsolete, that has a cost basis in excess of its expected net realizable value and inventory quantities in excess of expected requirements. This assessment requires management to utilize judgement in formulating estimates and assumptions that we believe to be reasonable under the circumstances. Actual results may differ from those estimates and assumptions. When we recognize a loss on such inventory, it establishes a new, lower cost basis for that inventory, and subsequent changes in facts and circumstances will not result in the restoration or increase in that newly established cost basis. If inventory with a lower cost basis is subsequently sold, it will result in higher gross margin for the products making up that inventory. As of September 30, 2015, the carrying value of our inventory was $12.1 million. Refer to Note 5, “Inventories,” to the consolidated financial statements appearing in this Quarterly Report on Form 10-Q for further information. In order to realize the value of our recorded inventory, we will be dependent upon continued increases in the sales volumes of VIBATIV. Accrued Research and Development Expenses As part of the process of preparing financial statements, we are required to estimate and accrue expenses, the largest of which are research and development expenses. This process involves the following: · communicating with our applicable personnel to identify services that have been performed on our behalf and estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of actual cost; · estimating and accruing expenses in our financial statements as of each balance sheet date based on facts and circumstances known to us at the time; and · periodically confirming the accuracy of our estimates with selected service providers and making adjustments, if necessary. Examples of estimated research and development expenses that we accrue include: · fees paid to CROs in connection with preclinical and toxicology studies and clinical studies; · fees paid to investigative sites in connection with clinical studies; · fees paid to CMOs in connection with the production of product and clinical study materials; and · professional service fees for consulting and related services. We base our expense accruals related to clinical studies on our estimates of the services received and efforts expended pursuant to contracts with multiple research institutions and clinical research organizations that conduct and manage clinical studies on our behalf. The financial terms of these agreements vary from contract to contract and may result in uneven payment flows. Payments under some of these contracts depend on factors, such as the successful enrollment of patients and the completion of clinical study milestones. Our service providers invoice us monthly in arrears for services performed. In accruing service fees, we estimate the time period over which services will be performed and the level of effort to be expended in each period. If we do not identify costs that we have begun to incur or if we underestimate or overestimate the level of services performed or the costs of these services, our actual expenses could differ from our estimates. To date, we have not experienced significant changes in our estimates of accrued research and development expenses after a reporting period. However, due to the nature of estimates, we cannot assure you that we will not make changes to our estimates in the future as we become aware of additional information about the status or conduct of our clinical studies and other research activities. Non-Marketable Equity Securities As a result of entering into collaborations, we may hold minority investments in non-public companies. We record these non-marketable equity securities at cost in long-term assets, less any amounts for other-than-temporary impairment. We periodically review our non-marketable equity securities for impairment by determining whether impairment indicators are present. Common impairment indicators include a significant adverse change in the regulatory or economic environment in which the investee entity operates or cash used in operating activities and other working capital deficiencies. If we conclude that any of the non-marketable equity securities are impaired, we determine whether such impairment is other-than-temporary. Factors we consider to make such determination include the duration and severity of the impairment, the reason for the decline in value and the potential recovery period and our intent to sell. If any impairment is considered other-than-temporary, we will write down the asset to its fair value and record the corresponding charge as interest and other income (loss). |
Net Loss per Share
Net Loss per Share | 9 Months Ended |
Sep. 30, 2015 | |
Net Loss per Share | |
Net Loss per Share | 2. Net Loss per Share Basic net loss per share is computed by dividing net loss by the weighted-average number of shares of outstanding, less ordinary shares subject to forfeiture. Diluted net loss per share is computed by dividing net loss by the weighted-average number of shares outstanding, less ordinary shares subject to forfeiture, plus all additional ordinary shares that would have been outstanding, assuming dilutive potential common shares had been issued for other dilutive securities. For the three and nine months ended September 30, 2015 and 2014, diluted and basic net loss per share was identical since potential common shares were excluded from the calculation, as their effect was anti-dilutive. Prior to the Spin-Off in June 2014, we operated as part of Theravance and not as a separate entity. As a result, the calculation of basic and diluted net loss per share assumes that the 32,260,105 ordinary shares issued to Theravance stockholders in connection with the Spin-Off, less the number of ordinary shares subject to forfeiture, were outstanding from the beginning of all periods presented. Anti-Dilutive Securities The following common equivalent shares were not included in the computation of diluted net loss per share because their effect was anti-dilutive: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2015 2014 2015 2014 Share issuances under equity incentive plan and ESPP Forfeitable shares |
Collaborative Arrangements
Collaborative Arrangements | 9 Months Ended |
Sep. 30, 2015 | |
Collaborative Arrangements. | |
Collaborative Arrangements | 3. Collaborative Arrangements Revenue from Collaborative Arrangements We recognized revenue from our collaborative arrangements as follows: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2015 2014 2015 2014 Mylan $ $ — $ $ — Trek Therapeutics — — SciClone Pharmaceuticals — — R-Pharm Pendopharm — — Clinigen Group plc — — Other — — — Total revenue from collaborative arrangements $ $ $ $ Mylan Development and Commercialization Agreement In January 2015, Mylan Ireland Limited (“Mylan”) and we established a strategic collaboration for the development and, subject to regulatory approval, commercialization of revefenacin (TD-4208), our investigational LAMA in development for the treatment of COPD. We entered into this collaboration to expand the breadth of our revefenacin development program and extend our commercial reach beyond the acute care setting where we currently market VIBATIV. Under the terms of the Mylan Development and Commercialization Agreement (the “Mylan Agreement”), Mylan and we will co-develop nebulized revefenacin for COPD and other respiratory diseases. We are leading the U.S. Phase 3 development program and Mylan is responsible for reimbursement of our costs for that program up until the approval of the first new drug application, after which costs will be shared. If a product developed under the collaboration is approved in the U.S., Mylan will lead commercialization and we will retain the right to co-promote the product in the U.S. under a profit-sharing arrangement (65% Mylan/35% Theravance Biopharma). Outside the U.S. (excluding China), Mylan will be responsible for development and commercialization and will pay us a tiered royalty on net sales at percentage royalty rates ranging from low double-digits to mid-teens. Although China is not included in the ex-US territory, Mylan has a right of first negotiation with respect to the development and commercialization of nebulized revefenacin in China. We retain worldwide rights to revefenacin delivered through other dosage forms, such as a metered dose inhaler or dry powder inhaler (MDI/DPI), while Mylan has certain rights of first negotiation with respect to our development and commercialization of revefenacin delivered other than via a nebulized inhalation product. Under the Mylan Agreement, Mylan paid us an initial payment of $15.0 million in cash in the second quarter of 2015. Also, pursuant to an ordinary share purchase agreement entered into on January 30, 2015, Mylan Inc., a subsidiary of Mylan N.V., made a $30.0 million equity investment in us, buying 1,585,790 ordinary shares from us in early February 2015 in a private placement transaction at a price of approximately $18.918 per share, which represented a 10% premium over the volume weighted average price per share of our ordinary shares for the five trading days ending on January 30, 2015. We are eligible to receive from Mylan potential development and sales milestone payments totaling $220.0 million in the aggregate, with $175.0 million associated with revefenacin monotherapy and $45.0 million for future potential combination products. Development milestones are deemed to be substantive milestones and will be recognized as revenue in the period upon achievement of each respective milestone. Sales milestones are considered contingent payments and are not deemed to be substantive milestones due to the fact that the achievement of the event underlying the payment predominantly relates to Mylan’s performance of future commercial activities. Under the Mylan Agreement, the significant deliverables were determined to be the license, development responsibilities and committee participation. We determined that the license represents a separate unit of accounting as the license, which includes rights to our underlying technologies for revefenacin, has standalone value because the rights conveyed permit Mylan to perform all efforts necessary to use our technologies to bring the compounds through development and, upon regulatory approval, commercialization. We based the best estimate of selling price for the license using a discounted cash flow approach. We determined that development responsibilities and committee participation represent separate units of accounting as Mylan could negotiate for and/or acquire each of these services from other third parties and we based the best estimates of the respective selling prices on the nature and timing of the services to be performed. As payments are received from Mylan, they are allocated to the three units of accounting based on the relative selling price method. Amounts allocated to the license are recognized as collaborative revenue when delivered. Amounts allocated to the development responsibilities under the Mylan Agreement are recognized proportionately with the performance of the underlying services and accounted for as reductions to R&D expense. Amounts allocated to committee participation are recognized ratably over the estimated performance periods as revenue from collaborative arrangements. In first quarter of 2015, upfront payments totaling $19.2 million from Mylan were allocated to the license and committee participation based on the relative selling price method. The $19.2 million consists of the initial payment of $15.0 million in cash and the $4.2 million premium related to the equity investment, which represents the difference between the closing price on January 30, 2015 and the issued price of $18.918. For the three months ended September 30, 2015, we recognized $25,000 in revenue from collaborative arrangements primarily related to committee participation. For the nine months ended September 30, 2015, we recognized $19.1 million in revenue from collaborative arrangement related primarily to the license and technological know-how delivered in the first quarter of 2015. For the three and nine months ended September 30, 2015, we recorded reductions to R&D expense of $10.1 million and $25.9 million, respectively, related to the development responsibilities. As of September 30, 2015, our receivable from collaborative arrangements under the Mylan Agreement was $16.9 million. Trek Therapeutics Licensing Agreement In September 2015, Trek Therapeutics, PBC (“TREKtx”) and we entered into a licensing agreement (the “TREKtx Agreement”) granting TREKtx an exclusive worldwide license for the development, manufacturing, use, marketing and sale of our NS5A inhibitor known as TD-6450 as a component in combination hepatitis C virus (“HCV”) products (the “HVC Products”). Pursuant to the TREKtx Agreement, we received an upfront payment of $8.0 million in the form of TREKtx’s Series A preferred stock and will be eligible to receive future royalties based on net sales of the HCV Products. Other terms of the licensing transaction have not been disclosed. Based on the accounting guidance for non-monetary transactions, if the value of the consideration can be measured within reasonable limits, we measure the assets exchanged at either the fair value of the asset given up or the fair value of the asset acquired, depending on which can be more reliably measured. We estimated the fair value of the preferred stock received based upon the price of similar Series A preferred stock that TREKtx had recently sold to an independent third party for cash consideration. Based on this approach, we estimated the fair value of the consideration received to be $8.0 million which we believe is a more reliable measure of the non-monetary assets exchanged. Under the TREKtx Agreement, the significant deliverable was determined to be the license, which includes rights to our underlying technologies for TD-6450. We transferred the license and technological know-how upon execution of the TREKtx Agreement, and we recognized $8.0 million as revenue from collaborative arrangements for the three and nine months ended September 30, 2015. TREKtx will be solely responsible for all future costs associated with the supply, manufacture, development, sale and marketing of the licensed compound. As such, our maximum exposure to loss as a result of entering into the TREKtx Agreement is our $8.0 million investment in TREKtx’s Series A preferred stock. In accordance with the applicable accounting guidance for the consolidation of variable interest entities, we determined TREKtx to be a variable interest entity. Based on the contractual terms of the arrangement, we do not have the power to direct the activities of TREKtx that most significantly impact its economic performance. As a result, we are not considered to be the primary beneficiary of TREKtx and therefore, do not consolidate the financial results of the company into our financial statements. In addition, we do not have significant influence over TREKtx. Accordingly, we accounted for this investment using the cost method of accounting and recorded it in other investments on our consolidated balance sheets as of September 30, 2015. SciClone Pharmaceuticals Development and Commercialization Agreement In May 2015, SciClone Pharmaceuticals International Holding Ltd. (“SciClone”) and we entered into a development and commercialization agreement (the “SciClone Agreement”) granting SciClone exclusive development and commercial rights for VIBATIV in China, as well as the Hong Kong SAR, the Macau SAR, Taiwan and Vietnam. Under the SciClone Agreement, the companies plan to pursue the development and commercialization of VIBATIV in hospital-acquired bacterial pneumonia and ventilator-associated bacterial pneumonia (HABP/VABP). Additional indications may include complicated skin and skin structure infections (cSSSI), and potentially bacteremia. In exchange for the exclusive development and commercial rights granted to SciClone, we received an upfront payment of $3.0 million and will be eligible to receive a $3.0 million milestone payment upon a regulatory approval event. This regulatory milestone is considered to be a contingent payment and not deemed to be a substantive milestone due to the fact that the achievement of the event underlying the payment predominantly relates to SciClone’s performance of future development activities. SciClone will be responsible for all aspects of development and commercialization in the partnered regions, including pre- and post-launch activities and product registration. We will sell to SciClone all clinical and commercial product required to develop and commercialize VIBATIV in China. Under the SciClone Agreement, the significant deliverables were determined to be the license, manufacturing of clinical product and committee participation. We determined that the license represents a separate unit of accounting as the license, which includes rights to our underlying technologies for VIBATIV, has standalone value because the rights conveyed permit SciClone to perform all efforts necessary to use our technologies to bring the compounds through development and, upon regulatory approval, commercialization. We based the best estimate of selling price for the license using a discounted cash flow approach. We determined that manufacturing of clinical product represents a separate unit of accounting as SciClone could acquire manufacturing services from third parties. We based the best estimates of the respective selling prices on the nature and timing of the services to be performed. The upfront payment of $3.0 million was received in the second quarter of 2015 and was allocated to the three units of accounting based on the relative selling price method. For the nine months ended September 30, 2015, we recognized $2.95 million as revenue from collaborative arrangements in the condensed consolidated statements of operations as we delivered the license and technological know-how during the period. For the three months ended September 30, 2015, the amount of recognized revenue was approximately $2,000. The amount allocated to the manufacturing responsibilities will be recognized proportionately with the performance of the underlying services. The amount allocated to committee participation is being recognized ratably over the estimated performance period as revenue from collaborative arrangements. R-Pharm VIBATIV Development and Commercialization Agreement In October 2012, Theravance entered into a development and commercialization agreement with R-Pharm to develop and commercialize VIBATIV (the “R-Pharm VIBATIV Agreement”). Under the R-Pharm VIBATIV Agreement, Theravance granted R-Pharm exclusive rights to develop and commercialize VIBATIV in Russia, Ukraine, other member countries of the Commonwealth of Independent States, and Georgia. Theravance received $1.1 million in upfront payments for the R-Pharm VIBATIV Agreement. The R-Pharm VIBATIV Agreement was transferred to us as a result of the Spin-Off from Theravance. We are eligible to receive contingent payments potentially totaling up to $10.0 million, of which we have recognized $2.0 million, and royalties of 25% on net sales of VIBATIV by R-Pharm. The contingent payments are not deemed substantive milestones due to the fact that the achievement of the event underlying the payment predominantly relates to R-Pharm’s performance of future development and commercialization activities. Under the R-Pharm VIBATIV Agreement, the significant deliverables were determined to be the license, committee participation and a contingent obligation to supply R-Pharm with API at R-Pharm’s expense, subject to entering into a future supply agreement. Theravance determined that the license represents a separate unit of accounting as the license, which includes rights to Theravance’s underlying technologies for VIBATIV, has standalone value because the rights conveyed permit R-Pharm to perform all efforts necessary to use Theravance’s technologies to bring the compounds through development and, upon regulatory approval, commercialization and Theravance based the best estimate of selling price for the license based on potential future cash flows under the arrangement over the estimated performance period. Theravance determined that the committee participation represents a separate unit of accounting as R-Pharm could negotiate for and/or acquire these services from other third parties and Theravance based the best estimate of selling price on the nature and timing of the services to be performed. The $1.1 million upfront payment received for the R-Pharm VIBATIV Agreement was allocated to two units of accounting based on the relative selling price method. The amount allocated to the license was recognized by us as revenue in the second quarter of 2014 due to the completion of technical transfer. The amount allocated to committee participation was deferred and will be recognized as revenue over the estimated performance period. In June 2015, the Ministry of Health of the Russian Federation granted marketing authorization for VIBATIV for the treatment of complicated skin and soft tissue infections, as well as nosocomial pneumonia (including artificial lung ventilation-associated pneumonia), caused by Gram-positive bacteria, including methicillin-resistance Staphylococcus aureus (“MRSA”). As a result, we will receive a $2.0 million regulatory milestone payment which was recognized as revenue from collaborative arrangements in the second quarter of 2015. Reimbursement of R&D Expenses Under certain collaborative arrangements, we are entitled to reimbursement of certain R&D expenses. Our policy is to account for the reimbursement payments by our collaboration partners as reductions to R&D expense. The following table summarizes the reductions to R&D expenses related to the reimbursement payments: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2015 2014 2015 2014 Mylan $ $ — $ $ Alfa Wassermann R-Pharm — — Total reduction to R&D expense $ $ $ $ |
Marketable Securities and Fair
Marketable Securities and Fair Value Measurements | 9 Months Ended |
Sep. 30, 2015 | |
Marketable Securities and Fair Value Measurements | |
Marketable Securities and Fair Value Measurements | 4. Marketable Securities and Fair Value Measurements Our portfolio of cash and investments in marketable securities includes: Fair Value Hierarchy Estimated Fair Value (In thousands) Level September 30, 2015 December 31, 2014 U.S. government securities Level 1 $ $ U.S. government agencies Level 2 Corporate notes Level 2 Commercial paper Level 2 — Marketable securities Money market funds Level 1 Restricted cash N/A Total $ $ The estimated fair value of marketable securities is based on quoted market prices for these or similar investments that were based on prices obtained from a commercial pricing service. The fair value of our marketable securities classified within Level 2 is based upon observable inputs that may include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data including market research publications. Gross unrealized gains and losses were not significant at either September 30, 2015 or December 31, 2014. At September 30, 2015, all of the marketable securities had contractual maturities within one year and the weighted average maturity of the marketable securities was approximately five months. We do not intend to sell the investments that are in an unrealized loss position, and it is unlikely that we will be required to sell the investments before recovery of their amortized cost basis, which may be maturity. We have determined that the gross unrealized losses on our marketable securities at September 30, 2015 were temporary in nature, and no marketable securities with unrealized losses at September 30, 2015 have been in a loss position for more than twelve months. At September 30, 2015, our accumulated other comprehensive income on our consolidated balance sheets consisted of net unrealized gains on available-for-sale investments. During the three and nine months ended September 30, 2015, we did not sell any of our marketable securities. Restricted cash pertained to certain lease agreements and letters of credit where we have pledged cash and cash equivalents as collateral. There were no transfers between Level 1 and Level 2 during the periods presented and there have been no changes to our valuation techniques during the nine months ended September 30, 2015. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2015 | |
Inventories | |
Inventories | 5. Inventories Our inventories are as follows: September 30, December 31, (In thousands) 2015 2014 Raw materials $ $ Work-in-process — Finished goods Total inventories $ $ |
Share-Based Compensation
Share-Based Compensation | 9 Months Ended |
Sep. 30, 2015 | |
Share-Based Compensation. | |
Share-Based Compensation | 6. Share-Based Compensation Share-Based Compensation Expense Allocation The allocation of share-based compensation expense included in the condensed consolidated statements of operations was as follows: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2015 2014 2015 2014 Research and development $ $ $ $ Selling, general and administrative Total share-based compensation expense $ $ $ $ Total share-based compensation expense capitalized to inventory was not material for any of the periods presented. Employee Share Option Exchange Program On August 28, 2015, we gave eligible option holders of the Company and its subsidiaries the opportunity to exchange some or all of their outstanding options granted under the Company’s 2013 Equity Incentive Plan or the Company’s 2014 New Employee Equity Incentive Plan before August 4, 2015, whether vested or unvested, for restricted share units (the “Exchange Program”). The Exchange Program was designed to restore the intended employee retention and incentive value of our equity awards. In accordance with the terms of the Exchange Program, employees who held options that had an exercise price above the market price of our ordinary shares at the offer expiration date were eligible to exchange two shares subject to eligible options for one Restricted Share Unit (“RSU”) granted under the terms of the Company’s 2013 Equity Incentive Plan. The RSUs granted under the Exchange Program will vest over a three or four year service period depending on the grant date of the original option exchanged. The Company’s executive officers and members of the board of directors were not eligible to participate in the Exchange Program. The terms of the Exchange Program were detailed in the Offer to Exchange Certain Outstanding Options for Restricted Share Units filed as an exhibit to our Schedule TO on August 28, 2015, as amended. The Exchange Program closed on September 25, 2015 and we exchanged 1,975,009 outstanding options for 987,496 RSUs with a fair value of $12.43 per share. The exchange of options for RSUs is considered a modification to the terms of the original equity award. As such, the Exchange Program resulted in an incremental share based compensation costs of $1.4 million to be recognized, concurrently with the unamortized original compensation costs of the exchanged option awards, ratably over the new vesting period of three years. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2015 | |
Income Taxes | |
Income Taxes | 7. Income Taxes The income tax provision was $4.3 million and $11.8 million for the three and nine months ended September 30, 2015. While we incur operating losses on a consolidated basis, we operate in multiple jurisdictions and generate taxable income in our U.S. operations. The provision for income taxes was primarily due to timing differences between the book and tax treatment of certain income and expenses such as employee share-based compensation. Our operations have historically been included in Theravance’s U.S. federal and state income tax returns. Theravance included the period from January 1, 2014 to June 1, 2014 on its income tax return. The net operating losses (“NOL”) generated within Theravance, including our activity prior to the separation will be included within Theravance’s return and all NOL carryforwards and research and development tax credits generated by Theravance, including our activity prior to the Spin-Off were retained by Theravance upon the separation of the companies. As part of the Spin-Off, Theravance contributed certain assets and liabilities to us, including the related basis differences, consisting primarily of deferred tax assets of approximately $12.7 million. These deferred tax assets include accrued liabilities that will be deductible in future periods, share-based compensation and fixed assets. We had approximately $28.0 million in deferred tax assets as of September 30, 2015, which were subject to a full valuation allowance. We follow the accounting guidance related to accounting for income taxes which requires that a company reduce its deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some portion or all of its deferred tax assets will not be realized. As of September 30, 2015, we had unrecognized tax benefits and related interest and penalties of approximately $2.4 million. We include any applicable interest and penalties within the provision for income taxes in the condensed consolidated statement of operations. Our future income tax expense may be affected by such factors as changes in tax laws, our business, regulations, tax rates, interpretation of existing laws or regulations, the impact of accounting for share-based compensation, the impact of accounting for business combinations, our international organization, shifts in the amount of income before tax earned in the U.S. as compared with other regions in the world, and changes in overall levels of income before tax. Effective July 1, 2015, Theravance Biopharma re-domiciled in Ireland and became an Irish tax resident. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2015 | |
Subsequent Events | |
Subsequent Events | 8. Subsequent Events Purchases of Common Shares by GSK On October 9, 2015, GSK (a related party) purchased 44,574 shares of our ordinary shares for a per share price of $13.63 pursuant to GSK’s periodic “top-up” rights under the Governance Agreement between the Company and GSK, dated as of March 3, 2014, for an aggregate purchase price of approximately $0.6 million. As of October 31, 2015, GSK beneficially owned approximately 22.1% of our outstanding ordinary shares. Registered Direct Offering of Shares to funds managed by Woodford Investment Management LLP On October 26, 2015, we entered into an Ordinary Share Purchase Agreement (the “Purchase Agreement”) with funds managed by Woodford Investment Management LLP (collectively, the “Funds”) for the registered direct offering of an aggregate of 3,859,649 ordinary shares of the Company, $0.00001 par value (the “Shares”), at a purchase price of $14.25 per Share. The Shares were issued pursuant to a prospectus supplement filed with the SEC on October 26, 2015, in connection with a takedown from our shelf registration statement on Form S-3 (File no. 333-205275), which became effective on July 16, 2015. The closing of the transaction occurred on October 29, 2015. The gross offering proceeds were approximately $55.0 million, before deducting the estimated offering expenses of approximately $2.6 million. |
Description of Operations and14
Description of Operations and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Description of Operations and Summary of Significant Accounting Policies | |
Inventories | Inventories Inventories consist of raw materials, work-in-process and finished goods related to the production of VIBATIV. Raw materials include VIBATIV active pharmaceutical ingredient (API) and other raw materials. Work-in-process and finished goods include third-party manufacturing costs and labor and indirect costs we incur in the production process. Included in inventories are raw materials and work-in-process that may be used as clinical products, which are charged to research and development expense when consumed. In addition, under certain commercialization agreements, we may sell VIBATIV packaged in unlabeled vials that are recorded in work-in-process. Inventories are stated at the lower of cost or market value. We determine the cost of inventory using the average-cost method for validation batches. We assess our inventory levels quarterly and write down inventory that is expected to become obsolete, that has a cost basis in excess of its expected net realizable value and inventory quantities in excess of expected requirements. This assessment requires management to utilize judgement in formulating estimates and assumptions that we believe to be reasonable under the circumstances. Actual results may differ from those estimates and assumptions. When we recognize a loss on such inventory, it establishes a new, lower cost basis for that inventory, and subsequent changes in facts and circumstances will not result in the restoration or increase in that newly established cost basis. If inventory with a lower cost basis is subsequently sold, it will result in higher gross margin for the products making up that inventory. As of September 30, 2015, the carrying value of our inventory was $12.1 million. Refer to Note 5, “Inventories,” to the consolidated financial statements appearing in this Quarterly Report on Form 10-Q for further information. In order to realize the value of our recorded inventory, we will be dependent upon continued increases in the sales volumes of VIBATIV. |
Accrued Research and Development Expenses | Accrued Research and Development Expenses As part of the process of preparing financial statements, we are required to estimate and accrue expenses, the largest of which are research and development expenses. This process involves the following: · communicating with our applicable personnel to identify services that have been performed on our behalf and estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of actual cost; · estimating and accruing expenses in our financial statements as of each balance sheet date based on facts and circumstances known to us at the time; and · periodically confirming the accuracy of our estimates with selected service providers and making adjustments, if necessary. Examples of estimated research and development expenses that we accrue include: · fees paid to CROs in connection with preclinical and toxicology studies and clinical studies; · fees paid to investigative sites in connection with clinical studies; · fees paid to CMOs in connection with the production of product and clinical study materials; and · professional service fees for consulting and related services. We base our expense accruals related to clinical studies on our estimates of the services received and efforts expended pursuant to contracts with multiple research institutions and clinical research organizations that conduct and manage clinical studies on our behalf. The financial terms of these agreements vary from contract to contract and may result in uneven payment flows. Payments under some of these contracts depend on factors, such as the successful enrollment of patients and the completion of clinical study milestones. Our service providers invoice us monthly in arrears for services performed. In accruing service fees, we estimate the time period over which services will be performed and the level of effort to be expended in each period. If we do not identify costs that we have begun to incur or if we underestimate or overestimate the level of services performed or the costs of these services, our actual expenses could differ from our estimates. To date, we have not experienced significant changes in our estimates of accrued research and development expenses after a reporting period. However, due to the nature of estimates, we cannot assure you that we will not make changes to our estimates in the future as we become aware of additional information about the status or conduct of our clinical studies and other research activities. |
Non-Marketable Equity Securities | Non-Marketable Equity Securities As a result of entering into collaborations, we may hold minority investments in non-public companies. We record these non-marketable equity securities at cost in long-term assets, less any amounts for other-than-temporary impairment. We periodically review our non-marketable equity securities for impairment by determining whether impairment indicators are present. Common impairment indicators include a significant adverse change in the regulatory or economic environment in which the investee entity operates or cash used in operating activities and other working capital deficiencies. If we conclude that any of the non-marketable equity securities are impaired, we determine whether such impairment is other-than-temporary. Factors we consider to make such determination include the duration and severity of the impairment, the reason for the decline in value and the potential recovery period and our intent to sell. If any impairment is considered other-than-temporary, we will write down the asset to its fair value and record the corresponding charge as interest and other income (loss). |
Net Loss per Share (Tables)
Net Loss per Share (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Net Loss per Share | |
Schedule of anti-dilutive securities | Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2015 2014 2015 2014 Share issuances under equity incentive plan and ESPP Forfeitable shares |
Collaborative Arrangements (Tab
Collaborative Arrangements (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Collaborative Arrangements. | |
Schedule of revenue recognized from collaborative arrangements | Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2015 2014 2015 2014 Mylan $ $ — $ $ — Trek Therapeutics — — SciClone Pharmaceuticals — — R-Pharm Pendopharm — — Clinigen Group plc — — Other — — — Total revenue from collaborative arrangements $ $ $ $ |
Summary of reductions to R&D expenses related to the reimbursement payments | Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2015 2014 2015 2014 Mylan $ $ — $ $ Alfa Wassermann R-Pharm — — Total reduction to R&D expense $ $ $ $ |
Marketable Securities and Fai17
Marketable Securities and Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Marketable Securities and Fair Value Measurements | |
Schedule of cash and investments in marketable securities | Fair Value Hierarchy Estimated Fair Value (In thousands) Level September 30, 2015 December 31, 2014 U.S. government securities Level 1 $ $ U.S. government agencies Level 2 Corporate notes Level 2 Commercial paper Level 2 — Marketable securities Money market funds Level 1 Restricted cash N/A Total $ $ |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Inventories | |
Schedule of inventories | September 30, December 31, (In thousands) 2015 2014 Raw materials $ $ Work-in-process — Finished goods Total inventories $ $ |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Share-Based Compensation. | |
Schedule of share-based compensation expense included in the condensed consolidated statements of operations | Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2015 2014 2015 2014 Research and development $ $ $ $ Selling, general and administrative Total share-based compensation expense $ $ $ $ |
Description of Operations and20
Description of Operations and Summary of Significant Accounting Policies (Details) $ in Thousands | Jun. 02, 2014 | Jun. 01, 2014USD ($) | Sep. 30, 2015USD ($) | Dec. 31, 2014USD ($) |
Description of Operations and Summary of Significant Accounting Policies | ||||
Cash, cash equivalents and marketable securities contributed from Theravance | $ 393,000 | |||
Common stock dividend ratio | 0.286 | |||
Carrying value of inventory | $ 12,141 | $ 12,546 |
Net Loss per Share (Details)
Net Loss per Share (Details) - shares | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Net Loss per Share | |||||
Number of ordinary shares issued to Theravance stockholders in connection with the Spin-Off transaction | 32,260,105 | ||||
Anti-Dilutive Securities | |||||
Shares not included in the computation of diluted net loss per share (in shares) | 6,887,000 | 4,039,000 | 6,558,000 | 3,928,000 | |
Equity incentive plan and ESPP | |||||
Anti-Dilutive Securities | |||||
Shares not included in the computation of diluted net loss per share (in shares) | 6,653,000 | 3,581,000 | 6,324,000 | 3,470,000 | |
Forfeitable shares | |||||
Anti-Dilutive Securities | |||||
Shares not included in the computation of diluted net loss per share (in shares) | 234,000 | 458,000 | 234,000 | 458,000 |
Collaborative Arrangements (Det
Collaborative Arrangements (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Collaborative Arrangements | ||||
Total revenue from collaborative arrangements | $ 8,386,000 | $ 5,033,000 | $ 32,517,000 | $ 7,146,000 |
Mylan | ||||
Collaborative Arrangements | ||||
Total revenue from collaborative arrangements | 25,000 | 0 | 19,149,000 | 0 |
Trek Therapeutics | ||||
Collaborative Arrangements | ||||
Total revenue from collaborative arrangements | 8,000,000 | 0 | 8,000,000 | 0 |
SciClone Pharmaceuticals | ||||
Collaborative Arrangements | ||||
Total revenue from collaborative arrangements | 2,000 | 0 | 2,952,000 | 0 |
R-Pharm | ||||
Collaborative Arrangements | ||||
Total revenue from collaborative arrangements | 9,000 | 22,000 | 2,040,000 | 2,132,000 |
Pendopharm | ||||
Collaborative Arrangements | ||||
Total revenue from collaborative arrangements | 350,000 | 0 | 350,000 | 0 |
Clinigen Group plc | ||||
Collaborative Arrangements | ||||
Total revenue from collaborative arrangements | 0 | 5,011,000 | 0 | 5,014,000 |
Other | ||||
Collaborative Arrangements | ||||
Total revenue from collaborative arrangements | $ 0 | $ 0 | $ 26,000 | $ 0 |
Collaborative Arrangements (D23
Collaborative Arrangements (Details 2) | Jan. 30, 2015 | Sep. 30, 2015USD ($) | Feb. 28, 2015USD ($)$ / sharesshares | Oct. 31, 2012USD ($)item | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($)item | Mar. 31, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)item | Sep. 30, 2014USD ($) |
Collaborative Arrangements | ||||||||||
Revenue from collaborative arrangements | $ 8,386,000 | $ 5,033,000 | $ 32,517,000 | $ 7,146,000 | ||||||
Reduction to R&D expense | 10,962,000 | 175,000 | 27,769,000 | 309,000 | ||||||
Mylan | ||||||||||
Collaborative Arrangements | ||||||||||
Revenue from collaborative arrangements | 25,000 | 0 | 19,149,000 | 0 | ||||||
Reduction to R&D expense | 10,128,000 | 0 | 25,869,000 | 22,000 | ||||||
Total receivables from collaborative arrangements | $ 16,900,000 | 16,900,000 | $ 16,900,000 | |||||||
Mylan | Purchase Agreement | ||||||||||
Collaborative Arrangements | ||||||||||
Equity investments made by Mylan | $ 30,000,000 | |||||||||
Number of shares purchased | shares | 1,585,790 | |||||||||
Share Price | $ / shares | $ 18.918 | |||||||||
Price per share premium (as a percent) | 10.00% | |||||||||
Trading days | 5 days | |||||||||
Premium proceeds from sale of ordinary shares | $ 4,200,000 | |||||||||
Mylan | Development and Commercialization Agreement | ||||||||||
Collaborative Arrangements | ||||||||||
Percentage of profit share | 35.00% | |||||||||
Initial cash payment | $ 15,000,000 | 15,000,000 | ||||||||
Potential development and sales milestone payments | $ 220,000,000 | |||||||||
Payments received | $ 19,200,000 | |||||||||
Units of accounting | item | 3 | |||||||||
Mylan | Development and Commercialization Agreement | Revefenacin | ||||||||||
Collaborative Arrangements | ||||||||||
Potential development and sales milestone payments | $ 175,000,000 | |||||||||
Mylan | Development and Commercialization Agreement | Future Potential Combination Products | ||||||||||
Collaborative Arrangements | ||||||||||
Potential development and sales milestone payments | 45,000,000 | |||||||||
Trek Therapeutics | ||||||||||
Collaborative Arrangements | ||||||||||
Revenue from collaborative arrangements | 8,000,000 | 0 | 8,000,000 | 0 | ||||||
Trek Therapeutics | Licensing Agreement | TD-6450 | ||||||||||
Collaborative Arrangements | ||||||||||
Upfront payment received | 8,000,000 | |||||||||
Fair value of consideration received for preferred stock | 8,000,000 | 8,000,000 | 8,000,000 | |||||||
Maximum exposure to loss as a result of entering agreement | 8,000,000 | 8,000,000 | 8,000,000 | |||||||
SciClone Pharmaceuticals | ||||||||||
Collaborative Arrangements | ||||||||||
Revenue from collaborative arrangements | 2,000 | 0 | 2,952,000 | 0 | ||||||
SciClone Pharmaceuticals | Development and Commercialization Agreement | ||||||||||
Collaborative Arrangements | ||||||||||
Upfront payment received | $ 3,000,000 | |||||||||
Potential milestone payments | 3,000,000 | 3,000,000 | 3,000,000 | |||||||
Units of accounting | item | 3 | |||||||||
R-Pharm | ||||||||||
Collaborative Arrangements | ||||||||||
Revenue from collaborative arrangements | 9,000 | 22,000 | 2,040,000 | 2,132,000 | ||||||
Reduction to R&D expense | 130,000 | $ 0 | 407,000 | $ 0 | ||||||
R-Pharm | Development and Commercialization Agreement | VIBATIV | ||||||||||
Collaborative Arrangements | ||||||||||
Amount recognized | $ 2,000,000 | |||||||||
Royalty rate, as a percentage of net sales | 25.00% | |||||||||
Units of accounting | item | 2 | |||||||||
Regulatory milestone payment receivable | 2,000,000 | 2,000,000 | $ 2,000,000 | |||||||
R-Pharm | Development and Commercialization Agreement | VIBATIV | Maximum | ||||||||||
Collaborative Arrangements | ||||||||||
Potential future contingent payments receivable | $ 10,000,000 | $ 10,000,000 | $ 10,000,000 | |||||||
Theravance | R-Pharm | Development and Commercialization Agreement | VIBATIV | ||||||||||
Collaborative Arrangements | ||||||||||
Upfront payment received | $ 1,100,000 | |||||||||
Mylan | Development and Commercialization Agreement | ||||||||||
Collaborative Arrangements | ||||||||||
Percentage of profit share | 65.00% |
Collaborative Arrangements (D24
Collaborative Arrangements (Details 3) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Collaborative Arrangements | ||||
Total reduction to R&D expense | $ 10,962 | $ 175 | $ 27,769 | $ 309 |
Mylan | ||||
Collaborative Arrangements | ||||
Total reduction to R&D expense | 10,128 | 0 | 25,869 | 22 |
Alfa Wassermann | ||||
Collaborative Arrangements | ||||
Total reduction to R&D expense | 704 | 175 | 1,493 | 287 |
R-Pharm | ||||
Collaborative Arrangements | ||||
Total reduction to R&D expense | $ 130 | $ 0 | $ 407 | $ 0 |
Marketable Securities and Fai25
Marketable Securities and Fair Value Measurements (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Dec. 31, 2014 | |
Marketable securities | ||
Marketable securities | $ 68,856 | $ 216,795 |
Restricted cash | 833 | 833 |
Total | $ 165,200 | 287,494 |
Maturity period for marketable securities | ||
Maximum contractual maturity period | 1 year | |
Weighted average contractual maturity period | 5 months | |
Marketable securities with unrealized losses for more than twelve months | $ 0 | |
Fair value transfers | ||
Fair value measurements, asset transfers to Level 1 from Level 2 | 0 | 0 |
Fair value measurements, asset transfers to Level 2 from Level 1 | 0 | 0 |
Fair value measurements, liability transfers from Level 1 to Level 2 | 0 | 0 |
Fair value measurements, liability transfers from Level 2 to Level 1 | 0 | 0 |
Level 1 | ||
Marketable securities | ||
Money market funds | 95,511 | 69,866 |
U.S. government securities | Level 1 | ||
Marketable securities | ||
Marketable securities | 22,539 | 32,541 |
U.S. government agencies | Level 2 | ||
Marketable securities | ||
Marketable securities | 19,726 | 39,588 |
Corporate notes | Level 2 | ||
Marketable securities | ||
Marketable securities | 26,591 | 97,681 |
Commercial paper | Level 2 | ||
Marketable securities | ||
Marketable securities | $ 0 | $ 46,985 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Inventories | ||
Raw materials | $ 7,314 | $ 6,830 |
Work-in-process | 0 | 145 |
Finished goods | 4,827 | 5,571 |
Total inventories | $ 12,141 | $ 12,546 |
Share-Based Compensation (Detai
Share-Based Compensation (Details) $ / shares in Units, $ in Thousands | Aug. 28, 2015 | Sep. 25, 2015USD ($)$ / sharesshares | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) |
Share-Based Compensation | ||||||
Share-based compensation expense | $ 12,251 | $ 9,350 | $ 42,539 | $ 28,814 | ||
Research and development | ||||||
Share-Based Compensation | ||||||
Share-based compensation expense | 6,035 | 5,132 | 20,334 | 14,046 | ||
Selling, general and administrative | ||||||
Share-Based Compensation | ||||||
Share-based compensation expense | $ 6,216 | $ 4,218 | $ 22,205 | $ 14,768 | ||
Employee Stock Option Exchange Program | ||||||
Share-Based Compensation | ||||||
Vesting period | 3 years | |||||
Total incremental stock-based compensation expense recognized | $ 1,400 | |||||
Employee Stock Option Exchange Program | Options | ||||||
Share-Based Compensation | ||||||
Options exchanged (in shares) | shares | 1,975,009 | |||||
Employee Stock Option Exchange Program | RSUs | ||||||
Share-Based Compensation | ||||||
Exchange ratio | 2 | |||||
RSUs issued (in shares) | shares | 987,496 | |||||
Fair value (USD per share) | $ / shares | $ 12.43 | |||||
Employee Stock Option Exchange Program | Minimum | RSUs | ||||||
Share-Based Compensation | ||||||
Vesting period | 3 years | |||||
Employee Stock Option Exchange Program | Maximum | RSUs | ||||||
Share-Based Compensation | ||||||
Vesting period | 4 years |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | Jun. 01, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 |
Income Taxes | |||||
Income tax expense | $ 4,323 | $ 5,101 | $ 11,786 | $ 6,824 | |
Deferred tax assets transferred from Theravance | $ 12,700 | ||||
Deferred tax assets | 28,000 | 28,000 | |||
Unrecognized tax benefits and related interest and penalties | $ 2,400 | $ 2,400 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Thousands | Oct. 26, 2015 | Oct. 09, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | Oct. 31, 2015 | Dec. 31, 2014 |
Subsequent Event | ||||||
Ordinary shares, par value (in dollars per share) | $ 0.00001 | $ 0.00001 | ||||
Gross offering proceeds | $ 1,509 | $ 0 | ||||
Subsequent Events | GSK | ||||||
Subsequent Event | ||||||
Beneficial ownership percentage | 22.10% | |||||
Subsequent Events | GSK | Governance Agreement | ||||||
Subsequent Event | ||||||
Number of shares purchased | 44,574 | |||||
Share Price | $ 13.63 | |||||
Aggregate purchase price | $ 600 | |||||
Subsequent Events | Funds managed by Woodford Investment Management LLP | Purchase Agreement | ||||||
Subsequent Event | ||||||
Number of shares purchased | 3,859,649 | |||||
Share Price | $ 14.25 | |||||
Ordinary shares, par value (in dollars per share) | $ 0.00001 | |||||
Gross offering proceeds | $ 55,000 | |||||
Estimated offering expenses | $ 2,600 |