Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | Apr. 30, 2019 | |
Document and Entity Information | ||
Entity Registrant Name | Theravance Biopharma, Inc. | |
Entity Central Index Key | 0001583107 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 56,137,175 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 223,235 | $ 378,021 |
Short-term marketable securities | 210,823 | 127,255 |
Accounts receivable, net of allowances of $0 at March 31, 2019 and December 31, 2018 | 113 | 620 |
Receivables from collaborative arrangements | 7,824 | 10,053 |
Prepaid taxes | 310 | 310 |
Other prepaid and current assets | 24,928 | 16,564 |
Total current assets | 467,233 | 532,823 |
Property and equipment, net | 12,899 | 13,176 |
Long-term marketable securities | 11,869 | |
Operating lease assets | 48,861 | |
Restricted cash | 833 | 833 |
Other assets | 1,439 | 1,534 |
Total assets | 531,265 | 560,235 |
Current liabilities: | ||
Accounts payable | 5,596 | 9,028 |
Accrued personnel-related expenses | 22,097 | 23,803 |
Accrued clinical and development expenses | 9,207 | 11,876 |
Accrued interest payable | 10,240 | 3,086 |
Non-recourse notes due 2033, net | 8,300 | |
Deferred revenue | 42,515 | 43,402 |
Other accrued liabilities | 15,587 | 7,359 |
Total current liabilities | 113,542 | 98,554 |
Convertible senior notes due 2023, net | 225,086 | 224,818 |
Non-recourse notes due 2033, net | 221,402 | 229,535 |
Deferred rent | 7,976 | |
Operating lease liabilities | 48,493 | |
Long-term deferred revenue | 21,733 | 26,179 |
Other long-term liabilities | 14,261 | 24,762 |
Commitments and contingencies | ||
Shareholders’ Deficit | ||
Preferred shares, $0.00001 par value: 230 shares authorized, no shares issued or outstanding | ||
Ordinary shares, $0.00001 par value: 200,000 shares authorized; 56,122 and 55,681 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively | 1 | 1 |
Additional paid-in capital | 971,508 | 960,721 |
Accumulated other comprehensive loss | (36) | (166) |
Accumulated deficit | (1,084,725) | (1,012,145) |
Total shareholders’ deficit | (113,252) | (51,589) |
Total liabilities and shareholders’ deficit | $ 531,265 | $ 560,235 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Accounts receivable, allowances | $ 0 | $ 0 |
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 | 56,122 | 55,681 |
Ordinary shares, outstanding shares | 56,122 | 55,681 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenue: | ||
Revenue | $ 5,338 | $ 8,319 |
Costs and expenses: | ||
Cost of goods sold | 826 | |
Research and development | 53,818 | 47,765 |
Selling, general and administrative | 25,186 | 24,704 |
Total costs and expenses | 79,004 | 73,295 |
Loss from operations | (73,666) | (64,976) |
Income from investment in TRC, LLC | 6,229 | 686 |
Interest expense | (7,858) | (2,137) |
Interest and other income, net | 2,795 | 1,484 |
Loss before income taxes | (72,500) | (64,943) |
Provision for income tax expense | (80) | (144) |
Net loss | (72,580) | (65,087) |
Net unrealized gain (loss) on available-for-sale investments | 130 | (120) |
Total comprehensive loss | $ (72,450) | $ (65,207) |
Net loss per share: | ||
Basic and diluted net loss per share (in dollars per share) | $ (1.32) | $ (1.22) |
Shares used to compute basic and diluted net loss per share (in shares) | 54,938 | 53,256 |
Share-based compensation expense | $ 12,220 | $ 13,998 |
Research and development | ||
Net loss per share: | ||
Share-based compensation expense | 6,159 | 6,559 |
Selling, general and administrative | ||
Net loss per share: | ||
Share-based compensation expense | 6,061 | 7,439 |
Product | ||
Revenue: | ||
Revenue | 3,679 | |
Collaborative revenue | ||
Revenue: | ||
Revenue | $ 5,338 | $ 4,640 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (DEFICIT) - USD ($) shares in Thousands, $ in Thousands | Ordinary Shares | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total |
Balances at Dec. 31, 2017 | $ 1 | $ 913,650 | $ (733) | $ (797,740) | $ 115,178 |
Balances (in shares) at Dec. 31, 2017 | 54,381 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Employee share-based compensation expense | 13,998 | 13,998 | |||
Issuance of restricted shares (in shares) | 415 | ||||
Option exercises | 35 | 35 | |||
Option exercises (in shares) | 2 | ||||
Cumulative effect upon the adoption of ASC 606 | 1,119 | 1,119 | |||
Repurchase of shares to satisfy tax withholding | (1,715) | (1,715) | |||
Net unrealized gain (loss) on marketable securities | (120) | (120) | |||
Net loss | (65,087) | (65,087) | |||
Balances at Mar. 31, 2018 | $ 1 | 925,968 | (853) | (861,708) | 63,408 |
Balances (in shares) at Mar. 31, 2018 | 54,798 | ||||
Balances at Dec. 31, 2018 | $ 1 | 960,721 | (166) | (1,012,145) | $ (51,589) |
Balances (in shares) at Dec. 31, 2018 | 55,681 | 55,681 | |||
Increase (Decrease) in Stockholders' Equity | |||||
Employee share-based compensation expense | 12,220 | $ 12,220 | |||
Issuance of restricted shares (in shares) | 426 | ||||
Option exercises | 254 | 254 | |||
Option exercises (in shares) | 15 | ||||
Repurchase of shares to satisfy tax withholding | (1,687) | (1,687) | |||
Net unrealized gain (loss) on marketable securities | 130 | 130 | |||
Net loss | (72,580) | (72,580) | |||
Balances at Mar. 31, 2019 | $ 1 | $ 971,508 | $ (36) | $ (1,084,725) | $ (113,252) |
Balances (in shares) at Mar. 31, 2019 | 56,122 | 56,122 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Operating activities | ||
Net loss | $ (72,580) | $ (65,087) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 1,316 | 1,007 |
Amortization and accretion income, net | (629) | (107) |
Share-based compensation | 12,220 | 13,998 |
Amortization of right-of-use assets | 986 | |
Undistributed earnings from investment in TRC, LLC | (6,229) | (493) |
Other | 16 | (397) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 507 | 280 |
Receivables from collaborative arrangements | 2,229 | 4,264 |
Other prepaid and current assets | (2,135) | (1,578) |
Inventories | (371) | |
Tax receivable | 5,092 | |
Accounts payable | (3,440) | (449) |
Accrued personnel-related expenses, accrued clinical and development expenses, and other accrued liabilities | (7,284) | (5,076) |
Deferred rent | 2,104 | |
Deferred revenue | (5,333) | 95,371 |
Long-term portion of lease liabilities | (910) | |
Other long-term liabilities | 73 | 1,267 |
Net cash (used in) provided by operating activities | (81,193) | 49,825 |
Investing activities | ||
Purchases of property and equipment | (1,220) | (2,771) |
Purchases of marketable securities | (148,138) | (54,839) |
Maturities of marketable securities | 77,198 | 46,299 |
Proceeds from the sale of fixed assets | 17 | |
Net cash used in investing activities | (72,160) | (11,294) |
Financing activities | ||
Proceeds from option exercises | 254 | 35 |
Repurchase of shares to satisfy tax withholding | (1,687) | (1,715) |
Net cash used in financing activities | (1,433) | (1,680) |
Net (decrease) increase in cash, cash equivalents, and restricted cash | (154,786) | 36,851 |
Cash, cash equivalents, and restricted cash at beginning of period | 378,854 | 89,813 |
Cash, cash equivalents, and restricted cash at end of period | 224,068 | 126,664 |
Supplemental disclosure of cash flow information | ||
Cash received (paid) for income taxes, net | $ 4,473 | |
Right-of-use assets obtained in exchange for lease obligations (1) | $ 49,847 |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2019 | |
Organization and Summary of Significant Accounting Policies | |
Organization and Summary of Significant Accounting Policies | 1. Organization and Summary of Significant Accounting Policies Theravance Biopharma, Inc. (“Theravance Biopharma” or the “Company”) is a diversified biopharmaceutical company primarily focused on the discovery, development and commercialization of organ-selective medicines. Our purpose is to create transformational medicines to improve the lives of patients suffering from serious illnesses. Our research is focused in the areas of inflammation and immunology. Basis of Presentation The Company’s condensed consolidated financial information as of March 31, 2019, and the three months ended March 31, 2019 and 2018 is unaudited but includes all adjustments (consisting only of normal recurring adjustments), which are considered 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 US 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, 2018 financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, filed with the Securities and Exchange Commission (“SEC”) on February 28, 2019. The results for the three months ended March 31, 2019 are not necessarily indicative of the results to be expected for the year ending December 31, 2019, for any other interim period or for any future period. These condensed consolidated financial statements include the accounts of the Company and its subsidiaries, and intercompany transactions and balances have been eliminated. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures in the condensed consolidated financial statements and accompanying notes. Management bases its estimates on historical experience and on assumptions believed to be reasonable under the circumstances. Actual results could differ materially from those estimates. Significant Accounting Policies Other than the recently adopted accounting pronouncements below, there have been no material revisions in the Company’s significant accounting policies described in Note 1 to the consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2018. Recently Adopted Accounting Pronouncements Effective January 1, 2019, the Company adopted Accounting Standards Update (“ASU”) 2016-02, Leases ( Topic 842 ) (“ASU 2016-02”) under the required modified retrospective approach. ASU 2016‑02 was aimed at making leasing activities more transparent and comparable, and requires leases with terms greater than one year to be recognized by lessees on their balance sheet as a right‑of‑use asset and corresponding lease liability. The Company elected the optional transition method to initially account for the impact of the adoption with a cumulative adjustment to accumulated deficit, if any, on the effective date of ASU 2016-02 of January 1, 2019, rather than applying the transition provisions in the earliest period presented, and the Company elected a package of practical expedients that allowed entities to not (i) reassess whether any expired or existing contracts are considered or contain leases; (ii) reassess the lease classification for any expired or existing leases; and (iii) reassess initial direct costs for any existing leases. In addition, the Company elected other practical expedients that allowed entities to (i) use hindsight in determining the term of a lease when the lease includes an option to extend the lease term; (ii) exclude all leases, on a go forward basis, that have a lease term of 12-month or less; and (iii) combine lease and non-lease components (e.g., office common area maintenance expenses) when recognizing a lease on an entity’s balance sheet on a go forward basis. As a result of the adoption of ASU 2016-02, on January 1, 2019, the Company recorded a right-of-use operating lease asset of $48.3 million and an operating lease liability of $56.3 million related to its office leases in South San Francisco, California and Dublin, Ireland. The lease liability included $8.0 million related to deferred rent liabilities. The adoption of ASU 2016-02 did not have an impact on the Company’s results of operations, lease expense, or cash flows. Effective January 1, 2019, the Company adopted ASU 2017-09, Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting (“ASU 2017-09”). ASU 2017-09 was issued to provide clarity and reduce both (1) diversity in practice and (2) cost and complexity when applying the guidance in Topic 718, Compensation—Stock Compensation, to a change to the terms or conditions of a share-based payment award. The amendments in ASU 2017-09 provided guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. Essentially, an entity will not have to account for the effects of a modification if: (1) the fair value of the modified award is the same immediately before and after the modification; (2) the vesting conditions of the modified award are the same immediately before and after the modification; and (3) the classification of the modified award as either an equity instrument or liability instrument is the same immediately before and after the modification. The adoption of ASU 2017-09 did not have a material impact upon the Company’s condensed consolidated financial statements and related disclosures as of January 1, 2019. Effective January 1, 2019, the Company adopted the new final rule under SEC Release No. 33-10532, Disclosure Update and Simplification, amending certain disclosure requirements that were redundant, duplicative, overlapping, outdated or superseded. In addition, the amendments expanded the disclosure requirements on the analysis of stockholders’ equity for interim financial statements. Under the amendments, an analysis of changes in each caption of stockholders’ equity presented in the balance sheet must be provided in a note or separate statement. The analysis should present a reconciliation of the beginning balance to the ending balance of each period for which a statement of comprehensive income is required to be filed. The Company has included condensed consolidated statements of shareholders’ equity (deficit) in this Form 10-Q for the three month periods ended March 31, 2019 and 2018. Recently Issued Accounting Pronouncements Not Yet Adopted In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13"). This guidance requires that financial assets measured at amortized cost be presented at the net amount expected to be collected. The measurement of expected credit losses is based on historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability. ASU 2016-13 also eliminates the concept of “other-than-temporary” impairment when evaluating available-for-sale debt securities and instead focuses on determining whether any impairment is a result of a credit loss or other factors. An entity will recognize an allowance for credit losses on available-for-sale debt securities rather than an other-than-temporary impairment that reduces the cost basis of the investment. ASU 2016-13 is effective for annual reporting periods and interim periods within those years beginning after December 15, 2019. The Company does not currently expect ASU 2016-13 to have a material impact on its consolidated financial statements and related disclosures based on the historical high credit quality of the Company’s financial instruments. The Company is currently evaluating other recently issued accounting pronouncements and does not currently believe that any of those pronouncements will have a material impact on its consolidated financial statements and related disclosures. |
Net Loss per Share
Net Loss per Share | 3 Months Ended |
Mar. 31, 2019 | |
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 ordinary shares had been issued for other dilutive securities. For the three months ended March 31, 2019 and 2018, diluted and basic net loss per share was identical since potential ordinary shares were excluded from the calculation, as their effect was anti-dilutive. Anti-dilutive Securities The following ordinary equivalent shares were not included in the computation of diluted net loss per share because their effect was anti-dilutive: Three Months Ended March 31, (In thousands) 2019 2018 Share issuances under equity incentive plans and ESPP 5,481 3,916 Restricted shares 1 5 Share issuances upon the conversion of convertible senior notes 6,676 6,676 Total 12,158 10,597 In addition, there were 468,000 and 1,305,000 shares that are subject to performance‑based vesting criteria which have been excluded from the ordinary equivalent shares table above as of March 31, 2019 and 2018, respectively. |
Collaborative Arrangements
Collaborative Arrangements | 3 Months Ended |
Mar. 31, 2019 | |
Collaborative Arrangements | |
Collaborative Arrangements | 3. Collaborative Arrangements Revenue from Collaborative Arrangements The Company recognized revenues from its collaborative arrangements as follows: Three Months Ended March 31, (In thousands) 2019 2018 Janssen $ 5,323 $ 4,613 Other 15 27 Total collaboration revenue $ 5,338 $ 4,640 Changes in Deferred Revenue Balances The Company recognized the following revenue from collaborative arrangements as a result of changes in its deferred revenue balance during the periods below: Three Months Ended March 31, (In thousands) 2019 2018 Collaboration revenue recognized in the period from: Amounts included in deferred revenue at the beginning of the period $ 5,333 $ 16 Performance obligations satisfied in previous period — — Janssen Biotech In February 2018, the Company entered into a global co-development and commercialization agreement with Janssen Biotech, Inc. (“Janssen”) for TD-1473 and related back-up compounds for inflammatory intestinal diseases, including ulcerative colitis and Crohn’s disease (the “Janssen Agreement”). Under the terms of the Janssen Agreement, the Company received an upfront payment of $100.0 million. The Company is conducting a Phase 2 (DIONE) study of TD-1473 in Crohn’s disease and a Phase 2b/3 (RHEA) induction and maintenance study of TD-1473 in ulcerative colitis. Following the initial Phase 2 development period, including the completion of the Phase 2 Crohn’s study and the Phase 2b induction portion of the ulcerative colitis study, Janssen can elect to obtain an exclusive license to develop and commercialize TD-1473 and certain related compounds by paying us a fee of $200.0 million. Upon any such election, the Company and Janssen will jointly develop and commercialize TD-1473 in inflammatory intestinal diseases and share profits in the US and expenses related to a potential Phase 3 program (67% to Janssen; 33% to Theravance Biopharma). The Company would receive royalties on ex-US sales at double-digit tiered percentage royalty rates, and the Company would be eligible to receive up to an additional $700.0 million in development and commercialization milestone payments from Janssen. The Janssen Agreement is considered to be within the scope of Accounting Standards Codification, Topic 808, Collaborative Arrangements (“ASC 808”), as the parties are active participants and exposed to the risks and rewards of the collaborative activity. The Company evaluated the terms of the Janssen Agreement and have analogized to Accounting Standards Codification, Topic 606, Revenue from Contracts with Customers (“ASC 606”) for the research and development activities to be performed through the initial Phase 2 development period of the collaborative arrangement that are considered to be part of the Company’s ongoing major or central operations. Using the concepts of ASC 606, the Company has identified research and development activities as its only performance obligation. The Company further determined that the transaction price under the arrangement was the $100.0 million upfront payment which was allocated to the single performance obligation. The $900.0 million in future potential payments is considered variable consideration if Janssen elects to remain in the collaboration arrangement following completion of the initial Phase 2 development period, as described above and, as such, was not included in the transaction price, as the potential payments were all determined to be fully constrained under ASC 606. As part of the Company’s evaluation of this variable consideration constraint, it determined that the potential payments are contingent upon developmental and regulatory milestones that are uncertain and are highly susceptible to factors outside of its control. The Company expects that any consideration related to royalties and sales-based milestones will be recognized when the subsequent sales occur. For the three months ended March 31, 2019 and 2018, the Company recognized $5.3 million and $4.6 million, respectively, as revenue from collaboration arrangements related to the Janssen Agreement. The remaining transaction price of $63.6 million was recorded in deferred revenue on the condensed consolidated balance sheets and is expected to be recognized as collaboration revenue as the research and development services are delivered over the initial Phase 2 development period. Collaboration revenue is recognized for the research and development services based on a measure of the Company’s efforts toward satisfying the performance obligation relative to the total expected efforts or inputs to satisfy the performance obligation (e.g., costs incurred compared to total budget). For the three months ended March 31, 2019 and 2018, the Company incurred $8.6 million and $6.5 million, respectively, in research and development costs related to the Janssen Agreement. In future reporting periods, the Company will reevaluate the Company’s estimates related to its efforts towards satisfying the performance obligation and may record a change in estimate if deemed necessary. Mylan Development and Commercialization Agreement In January 2015, the Company and Mylan Ireland Limited (“Mylan”) established a strategic collaboration (the “Mylan Agreement”) for the development and commercialization of revefenacin, including YUPELRI ® (revefenacin) inhalation solution. The Company entered into the collaboration to expand the breadth of its revefenacin development program and extend its commercial reach beyond the hospital setting. Under the Mylan Agreement, Mylan paid the Company an up-front fee of $15.0 million for the delivery of the revefenacin license in 2015 and, in 2016, Mylan paid the Company a milestone payment $15.0 million for the achievement of 50% enrollment in the Phase 3 twelve-month safety study. Separately, pursuant to an agreement to purchase ordinary shares entered into on January 30, 2015, Mylan Inc., a subsidiary of Mylan N.V., made a $30.0 million equity investment in the Company, buying 1,585,790 ordinary shares from the Company in February 2015 in a private placement transaction at a price of approximately $18.918 per share, which represented a 10% premium, equal to $4.2 million, over the volume weighted average price per share of the Company’s ordinary shares for the five trading days ending on January 30, 2015. As of March 31, 2019, the Company is eligible to receive from Mylan additional potential development, regulatory and sales milestone payments totaling up to $205.0 million in the aggregate, with $160.0 million associated with YUPELRI monotherapy, and $45.0 million associated with future potential combination products. Of the $160.0 million associated with monotherapy, $150.0 million relates to sales milestones based on achieving certain levels of net sales and $10.0 million relates to regulatory actions in the EU. The Mylan Agreement is considered to be within the scope of ASC 808, as the parties are active participants and exposed to the risks and rewards of the collaborative activity. Under the terms of the Mylan Agreement, Mylan was responsible for reimbursement of the Company’s costs related to the registrational program up until the approval of the first new drug application in November 2018, thereafter, R&D expenses are shared. Performing R&D services for reimbursement is considered to be a collaborative activity under the scope of ASC 808. Reimbursable program costs are recognized proportionately with the performance of the underlying services and accounted for as reductions to R&D expense. For this unit of account, the Company did not recognize revenue or analogize to ASC 606 and, as such, the reimbursable program costs are excluded from the transaction price. The Company analogized to ASC 606 for the accounting for two performance obligations: (1) delivery of the license to develop and commercialize revefenacin; and (2) joint steering committee participation. The Company determined the license to be distinct from the joint steering committee participation. The Company further determined that the transaction price under the arrangement was comprised of the following: (1) $15.0 million up-front license fee received in 2015; (2) $4.2 million premium related to the ordinary share purchase agreement received in 2015; and (3) $15.0 million milestone for 50% enrollment in the Phase 3 twelve-month safety study received in 2016. The total transaction price of $34.2 million was allocated to the two performance obligations based on the Company’s best estimate of the relative stand-alone selling price. For the delivery of the license, the Company based the stand-alone selling price on a discounted cash flow approach and considered several factors including, but not limited to: discount rate, development timeline, regulatory risks, estimated market demand and future revenue potential. For the committee participation, the Company based the stand-alone selling price on the average compensation of its committee members estimated to be incurred over the performance period. The Company expects to recognize collaboration revenue from the committee participation ratably over the performance period of approximately seventeen years. The future potential milestone amounts were not included in the transaction price, as they were all determined to be fully constrained following the concepts of ASC 606. As part of the Company’s evaluation of the development and regulatory milestones constraint, the Company determined that the achievement of such milestones are contingent upon success in future clinical trials and regulatory approvals which are not within its control and uncertain at this stage. The Company expects that the sales-based milestone payments and royalty arrangements will be recognized when the sales occur or the milestone is achieved. The Company will re-evaluate the transaction price each quarter and as uncertain events are resolved or other changes in circumstances occur. As of March 31, 2019, $0.3 million was recorded in deferred revenue on the condensed consolidated balance sheets under the Mylan Agreement. This amount reflects revenue allocated to joint steering committee participation and will be recognized as collaboration revenue over the course of the remaining performance period of approximately thirteen years. The Company recognized approximately $6,000 in each three month period ended March 31, 2019 and 2018 as collaboration revenue from the recognition of previously deferred revenue under the Mylan collaborative arrangement. The Company is also entitled to a share of US profits and losses (65% to Mylan; 35% to Theravance Biopharma) received in connection with commercialization of YUPELRI, and the Company is entitled to low double-digit royalties on ex-US net sales (excluding China). In China, the Company retains all rights to revefenacin in any dosage form. Mylan is the principal in the sales transactions, and as a result, the Company will not reflect the product sales in its financial statements. Net amounts payable to or receivable from Mylan each quarter under the profit sharing structure are disaggregated according to their individual components. The reimbursement received from Mylan for the Company’s R&D expense is characterized as a reduction of R&D expense, as the Company does not consider performing research and development services for reimbursement to be a part of its ongoing major or central operations. For the three months ended March 31, 2019 and 2018, the Company recorded $0.2 million and $1.9 million, respectively, as reductions to R&D expense related to the YUPELRI cost sharing payments with Mylan which were attributed to R&D services. If in any reporting period, the arrangement results in a receivable from Mylan after the Company’s R&D expenses have been reimbursed, then such a receivable is recognized as profit sharing revenue. If in any reporting period, the arrangement results in a payable to Mylan after the Company’s R&D expenses have been reimbursed, then such payments are recognized as collaboration expenses within operating expenses. For the three months ended March 31, 2019, the arrangement resulted in a payable of $1.4 million to Mylan after the Company’s R&D expenses had been reimbursed and, consequently, this amount was recognized within operating expenses. Reimbursement of R&D Expense Under certain collaborative arrangements, we are entitled to reimbursement of certain R&D expense. Activities under collaborative arrangements for which we are entitled to reimbursement are considered to be collaborative activities under the scope of ASC 808. For these units of account, we do not analogize to ASC 606 or recognize revenue. We record reimbursement payments received from 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 March 31, (In thousands) 2019 2018 Janssen $ 1,411 $ — Mylan 203 1,850 Total reduction to R&D expense $ 1,614 $ 1,850 |
Cash, Cash Equivalents, and Res
Cash, Cash Equivalents, and Restricted Cash | 3 Months Ended |
Mar. 31, 2019 | |
Cash, Cash Equivalents, and Restricted Cash | |
Cash, Cash Equivalents, and Restricted Cash | 4. Cash, Cash Equivalents, and Restricted Cash The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amount shown on the condensed consolidated statements of cash flows. March 31, (In thousands) 2019 2018 Cash and cash equivalents $ 223,235 $ 125,831 Restricted cash 833 833 Total cash, cash equivalents, and restricted cash shown on the $ 224,068 $ 126,664 |
Investments and Fair Value Meas
Investments and Fair Value Measurements | 3 Months Ended |
Mar. 31, 2019 | |
Investments and Fair Value Measurements | |
Investments and Fair Value Measurements | 5. Investments and Fair Value Measurements Available‑for‑Sale Securities 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 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. Available‑for‑sale securities are summarized below: March 31, 2019 Gross Gross Amortized Unrealized Unrealized Estimated (In thousands) Cost Gains Losses Fair Value US government securities Level 1 $ 61,422 $ 24 $ (41) $ 61,405 US government agency securities Level 2 19,882 3 — 19,885 Corporate notes Level 2 42,462 25 (4) 42,483 Commercial paper Level 2 217,453 7 (50) 217,410 Marketable securities 341,219 59 (95) 341,183 Money market funds Level 1 84,136 — — 84,136 Total $ 425,355 $ 59 $ (95) $ 425,319 December 31, 2018 Gross Gross Amortized Unrealized Unrealized Estimated (In thousands) Cost Gains Losses Fair Value US government securities Level 1 $ 48,807 $ — $ (86) $ 48,721 US government agency securities Level 2 9,852 2 — 9,854 Corporate notes Level 2 57,508 6 (88) 57,426 Commercial paper Level 2 90,919 — — 90,919 Marketable securities 207,086 8 (174) 206,920 Money market funds Level 1 294,751 — — 294,751 Total $ 501,837 $ 8 $ (174) $ 501,671 As of March 31, 2019, all of the available-for-sale securities had contractual maturities within one year and the weighted average maturity of marketable securities was approximately five months. There were no transfers between Level 1 and Level 2 during the periods presented, and there have been no changes to the Company’s valuation techniques during the three months ended March 31, 2019. In general, the Company invests in debt securities with the intent to hold such securities until maturity at par value. The Company does not intend to sell the investments that are currently in an unrealized loss position, and it is unlikely that it will be required to sell the investments before recovery of their amortized cost basis, which may be maturity. The Company has determined that the gross unrealized losses on its marketable securities, as of March 31, 2019, were temporary in nature, and there were no material unrealized losses on investments which have been in a loss position for more than twelve months as of March 31, 2019. As of March 31, 2019, the Company’s accumulated other comprehensive loss on its condensed consolidated balance sheets consisted of net unrealized losses on available-for-sale investments. During the three months ended March 31, 2019 and 2018, the Company did not sell any of its marketable securities. |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2019 | |
Long-Term Debt | |
Long-Term Debt | 6. Long-Term Debt 9.0% Non-Recourse Notes Due 2033 In November 2018, the Company entered into note purchase agreements relating to the private placement of $250.0 million aggregate principal amount of 9.0% non-recourse notes, due on or before 2033 (the "Non-Recourse 2033 Notes") issued by the Company’s wholly-owned subsidiary, Triple Royalty Sub LLC (the “Issuer”). The Non-Recourse 2033 Notes are secured by all of the Issuer’s rights, title and interest as a holder of certain membership interests (the “Issuer Class C Units”) in TRC. The primary source of funds to make payments on the Non-Recourse 2033 Notes will be the 63.75% economic interest of the Issuer (evidenced by the Issuer Class C Units) in any future payments made by GSK under the collaboration agreement, dated as of November 14, 2002, by and between Innoviva, Inc. (“Innoviva”) and GSK, as amended from time to time (net of the amount of cash, if any, expected to be used in TRC pursuant to the TRC LLC Agreement over the next four fiscal quarters) relating to the TRELEGY ELLIPTA program. The sole source of principal and interest payments for the Non-Recourse 2033 Notes are the future royalty payments generated from the TRELEGY ELLIPTA program, and as a result, the holders of the Non-Recourse 2033 Notes have no recourse against the Company even if the TRELEGY ELLIPTA payments are insufficient to cover the principal and interest payments for the Non-Recourse 2033 Notes. The Non-Recourse 2033 Notes are not convertible into Company equity and have no security interest in nor rights under any agreement with GSK. The Non-Recourse 2033 Notes may be redeemed at any time prior to maturity, in whole or in part, at specified redemption premiums. The Non-Recourse 2033 Notes bear an annual interest rate of 9.0%, with interest and principal paid quarterly beginning April 15, 2019. Prior to October 15, 2020, in the event that the distributions received by the Issuer from TRC in a quarter are less than the interest accrued for the quarter, the principal amount of the Non-Recourse 2033 Notes will increase by the interest shortfall amount for that period without a default or event of default occurring. The terms of the Notes also provide that the Company, at its option, may satisfy the quarterly interest payment obligations by making a capital contribution to the Issuer, but not for more than four (4) consecutive quarterly interest payment dates or for more than six (6) quarterly interest payment dates during the term of the Notes. Since the principal and interest payments on the Non-Recourse 2033 Notes are ultimately based on royalties from TRELEGY ELLIPTA product sales, which will vary from quarter to quarter, the Non-Recourse 2033 Notes may be repaid prior to the final maturity date in 2033. The portion of the Non-Recourse 2033 Notes classified as a current liability is based on the amount of royalties received, or receivable, as of March 31, 2019, that are expected to be used to make a principal repayment on the Non-Recourse 2033 Notes. Please refer to Note 12 for further information concerning the withholding of royalty payments by Innoviva due to us under the TRC LLC Agreement. In order to comply with Regulation RR – Credit Risk Retention (17 C.F.R. Part 246), 5.0% of the principal amount of the Non-Recourse 2033 Notes were retained by Theravance Biopharma R&D, Inc. and eliminated in the Company’s condensed consolidated financial statements. As of March 31, 2019, the net principal amount and estimated fair market value of the Non-Recourse 2033 Notes was $237.5 million. The inputs to determine fair value of the Non-Recourse 2033 Notes are categorized as Level 2 inputs. Level 2 inputs include quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. 3.25% Convertible Senior Notes Due 2023 The Company has $230.0 million of 3.250% convertible senior notes due in 2023 (“Convertible Senior 2023 Notes”) outstanding as of March 31, 2019 with an estimated fair value of $221.8 million. The estimated fair value was primarily based upon the underlying price of Theravance Biopharma’s publicly traded shares and other observable inputs as of March 31, 2019. The inputs to determine fair value of the Convertible Senior 2023 Notes are categorized as Level 2 inputs. Level 2 inputs include quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2019 | |
Leases | |
Leases | 7. Leases The Company leases approximately 170,000 square feet of office and laboratory space in two buildings in South San Francisco, California, under a non-cancelable operating lease that ends in May 2030 (“SSF Lease”) and includes a tenant improvement allowance with a remaining balance of $16.3 million, as of March 31, 2019 that expires in May 2022. The Company’s Irish subsidiary leases approximately 6,100 square feet of office space in Dublin, Ireland that ends in April 2027 (“Dublin Lease”). In addition, the Company leases equipment for clinical research studies with an estimated duration of approximately 21-months ending in 2021. The SSF Lease contains two options to extend the term of the lease for successive periods of five years each and the Dublin Lease contains a lease termination option in April 2024 at the Company’s discretion. The two options to extend the SSF Lease and the option to terminate the Dublin Lease were not recognized in the determination of the Company’s right-of-use assets and lease liabilities below. The Company has evaluated its leases and determined that they were all operating leases. The present values of the remaining lease payments and corresponding right-of-use assets were as follows, and the difference between the lease assets and lease liabilities amounts was due to deferred rent payments that are payable in future periods. (In thousands) Classification March 31, 2019 Assets Operating lease assets Operating lease assets $ 48,861 Liabilities Current: Operating lease liabilities Other accrued liabilities $ 8,420 Non-current: Operating lease liabilities Operating lease liabilities 48,493 Total operating lease liabilities $ 56,913 Lease expense was included within operating expenses in the condensed consolidated statements of operations as follows: Three Months Ended (In thousands) Classification March 31, 2019 Operating lease expense Selling, general and administrative expenses $ 2,543 Operating lease expense Research and development expenses 238 Total operating lease expense (1) $ 2,781 (1) Includes short-term leases which were immaterial. As of March 31, 2019, the maturities of our lease liabilities were as follows: (In thousands) Nine months ending December 31, 2019 $ 6,612 Years ending December 31: 2020 7,253 2021 9,492 2022 9,757 2023 10,035 Thereafter 70,208 Total operating lease payments $ 113,357 Less: Estimated tenant improvement allowance (16,318) Less: Imputed interest (40,126) Present value of operating lease liabilities $ 56,913 Cash paid for amounts included in the measurement of lease liabilities for the three months ended March 31, 2019 was $2.2 million and was included in net cash used in operating activities in the condensed consolidated statements of cash flows. As of March 31, 2019, the weighted average remaining lease term was 10.9 years, and the weighted average discount rate used to determine the lease liabilities was 8.65%. The Company’s discount rate was primarily derived from the 9.0% interest rate on its Non-Recourse 2033 Notes issued in November 2018 and did not involve any significant assumptions. |
Theravance Respiratory Company,
Theravance Respiratory Company, LLC | 3 Months Ended |
Mar. 31, 2019 | |
Theravance Respiratory Company, LLC | |
Theravance Respiratory Company, LLC | 8. Theravance Respiratory Company, LLC (“TRC”) Prior to the June 2014 spin-off from Innoviva, the Company’s former parent company, Innoviva assigned to TRC, a Delaware limited liability company formed by Innoviva, its strategic alliance agreement with GSK and all of its rights and obligations under its collaboration agreement with GSK other than with respect to RELVAR ® ELLIPTA ® /BREO ® ELLIPTA ® , ANORO ® ELLIPTA ® and vilanterol monotherapy. Through the Company’s 85% equity interests in TRC, the Company is entitled to receive an 85% economic interest in any future payments made by GSK under the strategic alliance agreement and under the portion of the collaboration agreement assigned to TRC (net of TRC expenses paid and the amount of cash, if any, expected to be used by TRC pursuant to the TRC LLC Agreement over the next four fiscal quarters). The drug programs assigned to TRC include Trelegy Ellipta and the MABA program, as monotherapy and in combination with other therapeutically active components, such as an inhaled corticosteroid (“ICS”), and any other product or combination of products that may be discovered and developed in the future under the GSK agreements. In May 2014, the Company entered into the TRC LLC Agreement with Innoviva that governs the operation of TRC. Under the TRC LLC Agreement, Innoviva is the manager of TRC, and the business and affairs of TRC are managed exclusively by the manager, including (i) day to day management of the drug programs in accordance with the existing GSK agreements; (ii) preparing an annual operating plan for TRC; and (iii) taking all actions necessary to ensure that the formation, structure and operation of TRC complies with applicable law and partner agreements. The Company is responsible for its proportionate share of TRC’s administrative expenses incurred, and communicated to the Company, by Innoviva. The Company analyzed its ownership, contractual and other interests in TRC to determine if it is a variable‑interest entity (“VIE”), whether the Company has a variable interest in TRC and the nature and extent of that interest. The Company determined that TRC is a VIE. The party with the controlling financial interest, the primary beneficiary, is required to consolidate the entity determined to be a VIE. Therefore, the Company also assessed whether it is the primary beneficiary of TRC based on the power to direct TRC’s activities that most significantly impact TRC’s economic performance and its obligation to absorb TRC’s losses or the right to receive benefits from TRC that could potentially be significant to TRC. Based on the Company’s assessment, the Company determined that it is not the primary beneficiary of TRC, and, as a result, the Company does not consolidate TRC in its condensed consolidated financial statements. TRC is recognized in the Company’s condensed consolidated financial statements under the equity method of accounting, and the value of the Company’s equity investment in TRC was $11.7 million and $5.4 million as of March 31, 2019 and December 31, 2018, respectively. This amount includes undistributed earnings from the Company’s investment in TRC which are recorded within “other prepaid and current assets” on the condensed consolidated balance sheets, net of the Company’s proportionate share of TRC’s administrative expenses incurred, and communicated to the Company, by Innoviva. Pursuant to the TRC operating agreement, the cash from the TRELEGY ELLIPTA royalties, net of any expenses, is distributed to the equity holders quarterly. For the three months ended March 31, 2019 and 2018, the Company recognized $6.2 million and $0.7 million, respectively, in income from its investment in TRC which was generated by royalty payments from GSK to TRC arising from the net sales of Trelegy Ellipta . |
Share-Based Compensation
Share-Based Compensation | 3 Months Ended |
Mar. 31, 2019 | |
Share-Based Compensation | |
Share-Based Compensation | 9 . 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 March 31, (In thousands) 2019 2018 Research and development $ 6,159 $ 6,559 Selling, general and administrative 6,061 7,439 Total share-based compensation expense $ 12,220 $ 13,998 Performance-Contingent Awards In the first quarter of 2016, the Compensation Committee of the Company’s board of directors (“Compensation Committee”) approved the grant of 1,575,000 performance-contingent restricted share awards (“RSAs”) and 135,000 performance-contingent restricted share units (“RSUs”) to senior management. The vesting of such awards is dependent on the Company meeting its critical operating goals and objectives during the five-year period from 2016 to December 31, 2020. The goals that must be met in order for the performance-contingent RSAs and RSUs to vest are strategically important for the Company, and the Compensation Committee believes the goals, if achieved, will increase shareholder value. The awards have dual triggers of vesting based upon the achievement of these goals and continued employment. As of March 31, 2019, there were 877,500 of these performance-contingent RSAs and 101,250 of these performance-contingent RSUs outstanding, and as of March 31, 2018, there were 1,305,000 of these performance-contingent RSAs and 135,000 of these performance-contingent RSUs outstanding. Expense associated with these awards is broken into three separate tranches and may be recognized during the years 2016 to 2020 depending on the probability of meeting the performance conditions. Compensation expense relating to awards subject to performance conditions is recognized if it is considered probable that the performance goals will be achieved. The probability of achievement is reassessed at each quarter-end reporting period. The performance conditions associated with the first tranche of these awards were completed in the second quarter of 2018, and the Company recognized $1.1 million of share-based compensation expense for the three months ended March 31, 2018 associated with the first tranche of these awards. The performance conditions associated with the second tranche of these awards were completed in the first quarter of 2019. For the three months ended March 31, 2019 and 2018, the Company recognized $0.8 million and $0.9 million, respectively, of share-based compensation expense related to the second tranche of these awards. The maximum remaining expense associated with the second tranche is $2.8 million (allocated as $1.2 million for research and development expense and $1.6 million for selling, general and administrative expense). As of March 31, 2019, the Company determined that the remaining third tranche was not probable of vesting and, as a result, no compensation expense related to the third tranche has been recognized to date. The maximum potential expense associated with the remaining third tranche could be up to $14.2 million (allocated as $5.9 million for research and development expense and $8.3 million for selling, general and administrative expense) if the performance conditions are achieved. In the fourth quarter of 2018, the Compensation Committee approved a grant of 3,000 performance-contingent RSUs to an employee. These RSUs have a maximum compensation expense of $75,000 which will be recognized when its single performance milestone is deemed to be probable of achievement. These 3,000 performance-contingent RSUs expire by December 31, 2020. In the first quarter of 2019, the Compensation Committee approved a grant of 60,000 performance-contingent RSUs and incentive cash bonus awards to certain employees. These awards have dual triggers of vesting based upon the achievement of certain performance milestones in specified timeframes, as well as a requirement for continued employment. The compensation expense related to these awards is broken into two separate performance milestones and recognized when the associated performance milestones are deemed to be probable of achievement. The maximum share-based compensation expense associated with 60,000 performance-contingent RSUs’ first and second performance milestones are $0.8 million each for a total of $1.6 million . The maximum compensation expense associated with the cash bonus’ first and second performance milestones are $75,000 and $225,000, respectively, for a total of $300,000. The 60,000 performance-contingent RSUs and cash bonus milestones expire by December 31, 2021, and December 31, 2020, respectively. As of March 31, 2019, the Company has determined that the performance milestones for the awards granted in the fourth quarter of 2018 and the first quarter of 2019 were not probable of achievement and, as a result, no compensation expense related to these awards has been recognized to date. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2019 | |
Income Taxes | |
Income Taxes | 10. Income Taxes The income tax provision was a $0.1 million expense for the three months ended March 31, 2019. The expense for the three months ended March 31, 2019 was primarily attributed to recording contingent tax liabilities for uncertain tax positions taken with respect to transfer pricing and tax credits. No provision for income taxes has been recognized on undistributed earnings of the Company’s foreign subsidiaries because it considers such earnings to be indefinitely reinvested. The Company follows the accounting guidance related to accounting for income taxes which requires that a company reduce its deferred tax assets by a valuation allowan ce 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 March 31, 2019, the Company’s deferred tax assets were offset in full by a valuation allowance. The Company records liabilities related to uncertain tax positions in accordance with the income tax guidance which clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements by prescribing a minimum recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Resolution of one or more of these uncertain tax positions in any period may have a material impact on the results of operations for that period. The Company includes any applicable interest and penalties within the provision for income taxes in the condensed consolidated statements of operations. The Company’s future income tax expense may be affected by such factors as changes in tax laws, its 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, its international organization, shifts in the amount of income before tax earned in the US as compared with other regions in the world, and changes in overall levels of income before tax. |
Reduction in Workforce
Reduction in Workforce | 3 Months Ended |
Mar. 31, 2019 | |
Reduction in Workforce | |
Reduction in Workforce | 11. Reduction in Workforce In January 2019, the Company announced a reduction in workforce to align with its focus on continued execution of key strategic programs and advancement of selected late-stage research programs toward clinical development. The Company reduced its overall headcount by 51 individuals, with the affected employees primarily focused on early research or the infrastructure in support of VIBATIV which was sold by the Company to Cumberland Pharmaceuticals Inc. in November 2018. The workforce reduction was substantially completed in the first quarter of 2019, and the Company recorded severance related charges totaling approximately $3.9 million including compensation expense made to affected employees through any minimum statutory notice periods. As of March 31, 2019, the Company had paid total severance of $3.4 million. The severance related charges are presented on the condensed consolidated statements of operations within research and development expenses and selling, general and administrative expenses for the three months ended March 31, 2019. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2019 | |
Subsequent Events | |
Subsequent Events | 12. Subsequent Events In May 2019, the Company announced that it had initiated an arbitration against Innoviva and TRC because Innoviva has caused TRC not to make any distributions to the Company with respect to its 85% economic interest in TRC for the quarter ended December 31, 2018, which distributions were due March 31, 2019, and Innoviva’s statement to the Company that it intends to cause TRC to withhold making further cash distributions through calendar year 2019. |
Organization and Summary of S_2
Organization and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Organization and Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation The Company’s condensed consolidated financial information as of March 31, 2019, and the three months ended March 31, 2019 and 2018 is unaudited but includes all adjustments (consisting only of normal recurring adjustments), which are considered 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 US 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, 2018 financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, filed with the Securities and Exchange Commission (“SEC”) on February 28, 2019. The results for the three months ended March 31, 2019 are not necessarily indicative of the results to be expected for the year ending December 31, 2019, for any other interim period or for any future period. These condensed consolidated financial statements include the accounts of the Company and its subsidiaries, and intercompany transactions and balances have been eliminated. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures in the condensed consolidated financial statements and accompanying notes. Management bases its estimates on historical experience and on assumptions believed to be reasonable under the circumstances. Actual results could differ materially from those estimates. |
Significant Accounting Policies | Significant Accounting Policies Other than the recently adopted accounting pronouncements below, there have been no material revisions in the Company’s significant accounting policies described in Note 1 to the consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2018. |
Recently Issued Accounting Pronouncements | Recently Adopted Accounting Pronouncements Effective January 1, 2019, the Company adopted Accounting Standards Update (“ASU”) 2016-02, Leases ( Topic 842 ) (“ASU 2016-02”) under the required modified retrospective approach. ASU 2016‑02 was aimed at making leasing activities more transparent and comparable, and requires leases with terms greater than one year to be recognized by lessees on their balance sheet as a right‑of‑use asset and corresponding lease liability. The Company elected the optional transition method to initially account for the impact of the adoption with a cumulative adjustment to accumulated deficit, if any, on the effective date of ASU 2016-02 of January 1, 2019, rather than applying the transition provisions in the earliest period presented, and the Company elected a package of practical expedients that allowed entities to not (i) reassess whether any expired or existing contracts are considered or contain leases; (ii) reassess the lease classification for any expired or existing leases; and (iii) reassess initial direct costs for any existing leases. In addition, the Company elected other practical expedients that allowed entities to (i) use hindsight in determining the term of a lease when the lease includes an option to extend the lease term; (ii) exclude all leases, on a go forward basis, that have a lease term of 12-month or less; and (iii) combine lease and non-lease components (e.g., office common area maintenance expenses) when recognizing a lease on an entity’s balance sheet on a go forward basis. As a result of the adoption of ASU 2016-02, on January 1, 2019, the Company recorded a right-of-use operating lease asset of $48.3 million and an operating lease liability of $56.3 million related to its office leases in South San Francisco, California and Dublin, Ireland. The lease liability included $8.0 million related to deferred rent liabilities. The adoption of ASU 2016-02 did not have an impact on the Company’s results of operations, lease expense, or cash flows. Effective January 1, 2019, the Company adopted ASU 2017-09, Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting (“ASU 2017-09”). ASU 2017-09 was issued to provide clarity and reduce both (1) diversity in practice and (2) cost and complexity when applying the guidance in Topic 718, Compensation—Stock Compensation, to a change to the terms or conditions of a share-based payment award. The amendments in ASU 2017-09 provided guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. Essentially, an entity will not have to account for the effects of a modification if: (1) the fair value of the modified award is the same immediately before and after the modification; (2) the vesting conditions of the modified award are the same immediately before and after the modification; and (3) the classification of the modified award as either an equity instrument or liability instrument is the same immediately before and after the modification. The adoption of ASU 2017-09 did not have a material impact upon the Company’s condensed consolidated financial statements and related disclosures as of January 1, 2019. Effective January 1, 2019, the Company adopted the new final rule under SEC Release No. 33-10532, Disclosure Update and Simplification, amending certain disclosure requirements that were redundant, duplicative, overlapping, outdated or superseded. In addition, the amendments expanded the disclosure requirements on the analysis of stockholders’ equity for interim financial statements. Under the amendments, an analysis of changes in each caption of stockholders’ equity presented in the balance sheet must be provided in a note or separate statement. The analysis should present a reconciliation of the beginning balance to the ending balance of each period for which a statement of comprehensive income is required to be filed. The Company has included condensed consolidated statements of shareholders’ equity (deficit) in this Form 10-Q for the three month periods ended March 31, 2019 and 2018. Recently Issued Accounting Pronouncements Not Yet Adopted In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13"). This guidance requires that financial assets measured at amortized cost be presented at the net amount expected to be collected. The measurement of expected credit losses is based on historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability. ASU 2016-13 also eliminates the concept of “other-than-temporary” impairment when evaluating available-for-sale debt securities and instead focuses on determining whether any impairment is a result of a credit loss or other factors. An entity will recognize an allowance for credit losses on available-for-sale debt securities rather than an other-than-temporary impairment that reduces the cost basis of the investment. ASU 2016-13 is effective for annual reporting periods and interim periods within those years beginning after December 15, 2019. The Company does not currently expect ASU 2016-13 to have a material impact on its consolidated financial statements and related disclosures based on the historical high credit quality of the Company’s financial instruments. The Company is currently evaluating other recently issued accounting pronouncements and does not currently believe that any of those pronouncements will have a material impact on its consolidated financial statements and related disclosures. |
Net Loss per Share (Tables)
Net Loss per Share (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Net Loss per Share | |
Schedule of anti-dilutive securities | Three Months Ended March 31, (In thousands) 2019 2018 Share issuances under equity incentive plans and ESPP 5,481 3,916 Restricted shares 1 5 Share issuances upon the conversion of convertible senior notes 6,676 6,676 Total 12,158 10,597 |
Collaborative Arrangements (Tab
Collaborative Arrangements (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Collaborative Arrangements | |
Schedule of revenue recognized from collaborative arrangements | Three Months Ended March 31, (In thousands) 2019 2018 Janssen $ 5,323 $ 4,613 Other 15 27 Total collaboration revenue $ 5,338 $ 4,640 |
Summary of changes in deferred revenue | Three Months Ended March 31, (In thousands) 2019 2018 Collaboration revenue recognized in the period from: Amounts included in deferred revenue at the beginning of the period $ 5,333 $ 16 Performance obligations satisfied in previous period — — |
Summary of reductions to R and D costs related to the reimbursement payments | Three Months Ended March 31, (In thousands) 2019 2018 Janssen $ 1,411 $ — Mylan 203 1,850 Total reduction to R&D expense $ 1,614 $ 1,850 |
Cash, Cash Equivalents, and R_2
Cash, Cash Equivalents, and Restricted Cash (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Cash, Cash Equivalents, and Restricted Cash | |
Schedule of reconciliation of cash, cash equivalents, and restricted cash | March 31, (In thousands) 2019 2018 Cash and cash equivalents $ 223,235 $ 125,831 Restricted cash 833 833 Total cash, cash equivalents, and restricted cash shown on the $ 224,068 $ 126,664 |
Investments and Fair Value Me_2
Investments and Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Investments and Fair Value Measurements | |
Schedule of available-for-sale securities | March 31, 2019 Gross Gross Amortized Unrealized Unrealized Estimated (In thousands) Cost Gains Losses Fair Value US government securities Level 1 $ 61,422 $ 24 $ (41) $ 61,405 US government agency securities Level 2 19,882 3 — 19,885 Corporate notes Level 2 42,462 25 (4) 42,483 Commercial paper Level 2 217,453 7 (50) 217,410 Marketable securities 341,219 59 (95) 341,183 Money market funds Level 1 84,136 — — 84,136 Total $ 425,355 $ 59 $ (95) $ 425,319 December 31, 2018 Gross Gross Amortized Unrealized Unrealized Estimated (In thousands) Cost Gains Losses Fair Value US government securities Level 1 $ 48,807 $ — $ (86) $ 48,721 US government agency securities Level 2 9,852 2 — 9,854 Corporate notes Level 2 57,508 6 (88) 57,426 Commercial paper Level 2 90,919 — — 90,919 Marketable securities 207,086 8 (174) 206,920 Money market funds Level 1 294,751 — — 294,751 Total $ 501,837 $ 8 $ (174) $ 501,671 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases | |
Summary of supplemental balance sheet information related to leases | (In thousands) Classification March 31, 2019 Assets Operating lease assets Operating lease assets $ 48,861 Liabilities Current: Operating lease liabilities Other accrued liabilities $ 8,420 Non-current: Operating lease liabilities Operating lease liabilities 48,493 Total operating lease liabilities $ 56,913 |
Summary of components of lease expense | Three Months Ended (In thousands) Classification March 31, 2019 Operating lease expense Selling, general and administrative expenses $ 2,543 Operating lease expense Research and development expenses 238 Total operating lease expense (1) $ 2,781 (1) Includes short-term leases which were immaterial. |
Summary of maturities of lease liabilities | (In thousands) Nine months ending December 31, 2019 $ 6,612 Years ending December 31: 2020 7,253 2021 9,492 2022 9,757 2023 10,035 Thereafter 70,208 Total operating lease payments $ 113,357 Less: Estimated tenant improvement allowance (16,318) Less: Imputed interest (40,126) Present value of operating lease liabilities $ 56,913 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Share-Based Compensation | |
Schedule of share-based compensation expense included in the consolidated statements of operations | Three Months Ended March 31, (In thousands) 2019 2018 Research and development $ 6,159 $ 6,559 Selling, general and administrative 6,061 7,439 Total share-based compensation expense $ 12,220 $ 13,998 |
Organization and Summary of S_3
Organization and Summary of Significant Accounting Policies - Recently Issued Accounting Pronouncements (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Lease, Practical Expedients, Package | true |
Lease, Practical Expedient, Use of Hindsight | true |
Operating lease asset | $ 48,861 |
Operating lease liability | 56,913 |
Restatement Adjustment | ASU 2016-02 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Operating lease asset | 48,300 |
Operating lease liability | 56,300 |
Deferred rent liabilities | $ 8,000 |
Net Loss per Share (Details)
Net Loss per Share (Details) - shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Anti-Dilutive Securities | ||
Anti-dilutive securities (in shares) | 12,158,000 | 10,597,000 |
Share issuances under equity incentive plans and ESPP | ||
Anti-Dilutive Securities | ||
Anti-dilutive securities (in shares) | 5,481,000 | 3,916,000 |
RSAs | ||
Anti-Dilutive Securities | ||
Anti-dilutive securities (in shares) | 1,000 | 5,000 |
Share issuances upon the conversion of convertible senior notes | ||
Anti-Dilutive Securities | ||
Anti-dilutive securities (in shares) | 6,676,000 | 6,676,000 |
Performance-based vesting | ||
Anti-Dilutive Securities | ||
Anti-dilutive securities (in shares) | 468,000 | 1,305,000 |
Collaborative Arrangements - Re
Collaborative Arrangements - Revenue from Collaborative Arrangements (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | |
Feb. 28, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Collaborative Arrangements and Co-Promote Agreement | |||
Revenue | $ 5,338 | $ 8,319 | |
Collaboration revenue recognized in the period from: | |||
Amounts included in deferred revenue at the beginning of the period | 5,333 | 16 | |
Janssen | |||
Collaborative Arrangements and Co-Promote Agreement | |||
Revenue | 5,323 | 4,613 | |
Collaboration revenue recognized in the period from: | |||
Amounts included in deferred revenue at the beginning of the period | $ 63,600 | ||
Other | |||
Collaborative Arrangements and Co-Promote Agreement | |||
Revenue | 15 | 27 | |
Collaborative revenue | |||
Collaborative Arrangements and Co-Promote Agreement | |||
Revenue | $ 5,338 | $ 4,640 |
Collaborative Arrangements - Ja
Collaborative Arrangements - Janssen Biotech Agreement (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | |
Feb. 28, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Collaborative Arrangements and Co-Promote Agreement | |||
Revenue | $ 5,338 | $ 8,319 | |
Percentage of profit share | 67.00% | 35.00% | |
Revenue from the recognition of previously deferred revenue | $ 5,333 | 16 | |
Research and development | 53,818 | 47,765 | |
Janssen | |||
Collaborative Arrangements and Co-Promote Agreement | |||
Upfront payment receivable | $ 100,000 | ||
Revenue | 5,323 | 4,613 | |
Percentage of profit share | 33.00% | ||
Maximum potential payments receivable | $ 900,000 | ||
Revenue from collaborative arrangements | 5,300 | 4,600 | |
Revenue from the recognition of previously deferred revenue | 63,600 | ||
Research and development | $ 8,600 | $ 6,500 | |
Janssen | Collaborative Arrangement | |||
Collaborative Arrangements and Co-Promote Agreement | |||
Revenue | 700,000 | ||
Janssen | Collaborative Arrangement | TD-1473 | |||
Collaborative Arrangements and Co-Promote Agreement | |||
Revenue | $ 200,000 |
Collaborative Arrangements - De
Collaborative Arrangements - Development and Commercialization Agreement (Details) | Jan. 30, 2015 | Feb. 28, 2018 | Feb. 28, 2015USD ($)$ / sharesshares | Jan. 31, 2015USD ($)plan | Mar. 31, 2019USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) |
Collaborative Arrangements and Co-Promote Agreement | ||||||||
Milestone payment | $ 5,338,000 | $ 8,319,000 | ||||||
Percentage of profit share | 67.00% | 35.00% | ||||||
Revenue from the recognition of previously deferred revenue | $ 5,333,000 | 16,000 | ||||||
Mylan | ||||||||
Collaborative Arrangements and Co-Promote Agreement | ||||||||
Potential milestone or contingent payments | $ 205,000,000 | |||||||
Transaction price | $ 34,200,000 | |||||||
Number of performance obligations | plan | 2 | |||||||
Percentage of profit share | 65.00% | |||||||
Performance period (in years) | 17 years | 13 years | ||||||
Deferred revenue | $ 300,000 | |||||||
Revenue from the recognition of previously deferred revenue | 6,000 | $ 6,000 | ||||||
Mylan | Purchase Agreement | ||||||||
Collaborative Arrangements and Co-Promote Agreement | ||||||||
Equity investments made in the entity | $ 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% | |||||||
Premium proceeds from sale of ordinary shares | $ 4,200,000 | |||||||
Trading days | 5 days | |||||||
Mylan | Development and Commercialization Agreement | ||||||||
Collaborative Arrangements and Co-Promote Agreement | ||||||||
Initial cash payment | $ 15,000,000 | |||||||
Mylan | Revefenacin Monotherapy (TD-4208) | ||||||||
Collaborative Arrangements and Co-Promote Agreement | ||||||||
Potential milestone or contingent payments | 160,000,000 | |||||||
Mylan | Future potential combination products | ||||||||
Collaborative Arrangements and Co-Promote Agreement | ||||||||
Potential milestone or contingent payments | 45,000,000 | |||||||
Mylan | Milestone - 50% enrollment in Phase 3 twelve-month safety study | Collaborative Arrangement | ||||||||
Collaborative Arrangements and Co-Promote Agreement | ||||||||
Milestone payment | $ 15,000,000 | |||||||
Mylan | Sales milestones | Revefenacin Monotherapy (TD-4208) | ||||||||
Collaborative Arrangements and Co-Promote Agreement | ||||||||
Potential milestone or contingent payments | 150,000,000 | |||||||
Mylan | Regulatory actions | Revefenacin Monotherapy (TD-4208) | European Union | ||||||||
Collaborative Arrangements and Co-Promote Agreement | ||||||||
Potential milestone or contingent payments | $ 10,000,000 |
Collaborative Arrangements - _2
Collaborative Arrangements - Reimbursement of R and D Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Research and Development Reimbursement | ||
Total reduction to R and D expense | $ 1,614 | $ 1,850 |
Operating expenses | ||
Research and Development Reimbursement | ||
Payable after the Company’s R&D expenses had been reimbursed | 1,400 | |
Mylan | ||
Research and Development Reimbursement | ||
Total reduction to R and D expense | 203 | 1,850 |
Mylan | Cost Sharing Payments | Development and Commercialization Agreement | ||
Research and Development Reimbursement | ||
Total reduction to R and D expense | 200 | $ 1,900 |
Janssen | ||
Research and Development Reimbursement | ||
Total reduction to R and D expense | $ 1,411 |
Cash, Cash Equivalents, and R_3
Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Cash, Cash Equivalents, and Restricted Cash | ||||
Cash and cash equivalents | $ 223,235 | $ 378,021 | $ 125,831 | |
Restricted cash | 833 | 833 | 833 | |
Total cash, cash equivalents, and restricted cash shown on the condensed consolidated statements of cash flows | $ 224,068 | $ 378,854 | $ 126,664 | $ 89,813 |
Investments and Fair Value Me_3
Investments and Fair Value Measurements - Available for sale securities (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Available for sale securities: | ||
Amortized Cost | $ 425,355 | $ 501,837 |
Gross Unrealized Gains | 59 | 8 |
Gross Unrealized Losses | (95) | (174) |
Estimated Fair Value | 425,319 | 501,671 |
Marketable securities | ||
Available for sale securities: | ||
Amortized Cost | 341,219 | 207,086 |
Gross Unrealized Gains | 59 | 8 |
Gross Unrealized Losses | (95) | (174) |
Estimated Fair Value | 341,183 | 206,920 |
US government securities | Level 1 | ||
Available for sale securities: | ||
Amortized Cost | 61,422 | 48,807 |
Gross Unrealized Gains | 24 | |
Gross Unrealized Losses | (41) | (86) |
Estimated Fair Value | 61,405 | 48,721 |
US government agency securities | Level 2 | ||
Available for sale securities: | ||
Amortized Cost | 19,882 | 9,852 |
Gross Unrealized Gains | 3 | 2 |
Estimated Fair Value | 19,885 | 9,854 |
Corporate notes | Level 2 | ||
Available for sale securities: | ||
Amortized Cost | 42,462 | 57,508 |
Gross Unrealized Gains | 25 | 6 |
Gross Unrealized Losses | (4) | (88) |
Estimated Fair Value | 42,483 | 57,426 |
Commercial paper | Level 2 | ||
Available for sale securities: | ||
Amortized Cost | 217,453 | 90,919 |
Gross Unrealized Gains | 7 | |
Gross Unrealized Losses | (50) | |
Estimated Fair Value | 217,410 | 90,919 |
Money market funds | Level 1 | ||
Available for sale securities: | ||
Amortized Cost | 84,136 | 294,751 |
Estimated Fair Value | $ 84,136 | $ 294,751 |
Investments and Fair Value Me_4
Investments and Fair Value Measurements - Convertible senior notes (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | |
Nov. 30, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Maturity period for marketable securities | |||
Maximum contractual maturity period | 1 year | ||
Weighted average contractual maturity period | 5 months | ||
Fair value transfers | |||
Fair value of assets transferred from Level 1 to Level 2 | $ 0 | ||
Fair value of assets transferred from Level 2 to Level 1 | 0 | ||
Fair value of liabilities transferred from Level 1 to Level 2 | 0 | ||
Fair value of liabilities transferred from Level 2 to Level 1 | 0 | ||
Unrealized losses | |||
Net unrealized losses | 0 | ||
Available-for-sale securities sold | $ 0 | $ 0 | |
9.0% non-recourse notes due 2033 | |||
Unrealized losses | |||
Proceeds from issuance of debt | $ 250,000 | ||
Interest rate (as a percent) | 9.00% | 9.00% | |
9.0% non-recourse notes due 2033 | Level 2 | |||
Unrealized losses | |||
Notes fair value | $ 237,500 | ||
9.0% non-recourse notes due 2033 | Theravance Biopharma R&D, Inc. | |||
Unrealized losses | |||
Interest rate (as a percent) | 5.00% |
Long-Term Debt (Details)
Long-Term Debt (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended |
Nov. 30, 2018 | Mar. 31, 2019 | |
Long-Term Debt | ||
Equity interest | 85.00% | |
9.0% non-recourse notes due 2033 | ||
Long-Term Debt | ||
Proceeds from issuance of debt | $ 250 | |
Interest rate (as a percent) | 9.00% | 9.00% |
Equity interest | 63.75% | |
9.0% non-recourse notes due 2033 | Level 2 | ||
Long-Term Debt | ||
Notes fair value | $ 237.5 | |
3.25% Convertible Senior Notes Due 2023 | ||
Long-Term Debt | ||
Proceeds from issuance of debt | $ 230 | |
Interest rate (as a percent) | 3.25% | |
Notes fair value | $ 221.8 | |
TRC | ||
Long-Term Debt | ||
Equity interest | 85.00% | |
Theravance Biopharma R&D, Inc. | 9.0% non-recourse notes due 2033 | ||
Long-Term Debt | ||
Interest rate (as a percent) | 5.00% |
Leases - General (Details)
Leases - General (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($)ft²Optionbuilding | |
Lessee, Lease, Description [Line Items] | |
Area of leased space | 170,000 |
Number of building leased | building | 2 |
Number of options to extend | Option | 2 |
Option to extend | true |
Renewal term | 5 years |
Tenant improvement allowance | $ | $ 16,318 |
Ireland | |
Lessee, Lease, Description [Line Items] | |
Area of leased space | 6,100 |
Option to terminate | true |
Lease term | 21 months |
Leases - Assets and Liabilities
Leases - Assets and Liabilities (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Assets and liabilities | |
Operating lease assets | $ 48,861 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Operating lease assets |
Operating lease liabilities, current | $ 8,420 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Other Accrued Liabilities, Current |
Operating lease liabilities, Noncurrent | $ 48,493 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Operating lease liabilities, Noncurrent |
Total operating lease liabilities | $ 56,913 |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Lessee, Lease, Description [Line Items] | |
Operating lease expense | $ 2,781 |
Selling, general and administrative | |
Lessee, Lease, Description [Line Items] | |
Operating lease expense | 2,543 |
Research and development | |
Lessee, Lease, Description [Line Items] | |
Operating lease expense | $ 238 |
Leases - Maturity of Lease Liab
Leases - Maturity of Lease Liabilities and Other Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Nov. 30, 2018 | |
Maturity of Lease Liabilities | ||
Nine months ending December 31, 2019 | $ 6,612 | |
2020 | 7,253 | |
2021 | 9,492 | |
2022 | 9,757 | |
2023 | 10,035 | |
Thereafter | 70,208 | |
Total operating lease payments | 113,357 | |
Less: Estimated tenant improvement allowance | (16,318) | |
Less: Imputed interest | (40,126) | |
Present value of operating lease liabilities | 56,913 | |
Operating cash flows from operating leases | $ 2,200 | |
Weighted-average remaining lease term (years) | 10 months 27 days | |
Weighted-average discount rate | 8.65% | |
9.0% non-recourse notes due 2033 | ||
Maturity of Lease Liabilities | ||
Interest rate (as a percent) | 9.00% | 9.00% |
Theravance Respiratory Compan_2
Theravance Respiratory Company, LLC (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Theravance Respiratory Company, LLC | |||
Equity interest | 85.00% | ||
TRC | |||
Theravance Respiratory Company, LLC | |||
Equity interest | 85.00% | ||
Value of investment | $ 11.7 | $ 5.4 | |
Royalty payments | $ 6.2 | $ 0.7 |
Share-Based Compensation - Expe
Share-Based Compensation - Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Share-Based Compensation | ||
Share-based compensation expense | $ 12,220 | $ 13,998 |
Research and development | ||
Share-Based Compensation | ||
Share-based compensation expense | 6,159 | 6,559 |
Selling, general and administrative | ||
Share-Based Compensation | ||
Share-based compensation expense | $ 6,061 | $ 7,439 |
Share-Based Compensation - Perf
Share-Based Compensation - Performance Contingent Awards (Details) | 3 Months Ended | |||
Mar. 31, 2019USD ($)trancheMilestoneshares | Mar. 31, 2018USD ($)shares | Dec. 31, 2018USD ($)shares | Mar. 31, 2016shares | |
Share-Based Compensation | ||||
Number of tranches | tranche | 3 | |||
Number of performance milestones | Milestone | 2 | |||
Share-based compensation expense | $ 12,220,000 | $ 13,998,000 | ||
Research and development | ||||
Share-Based Compensation | ||||
Share-based compensation expense | 6,159,000 | 6,559,000 | ||
Selling, general and administrative | ||||
Share-Based Compensation | ||||
Share-based compensation expense | $ 6,061,000 | $ 7,439,000 | ||
Performance-Contingent Awards - RSAs | ||||
Share-Based Compensation | ||||
Shares approved for grant (in shares) | shares | 1,575,000 | |||
Awards outstanding (in shares) | shares | 877,500 | 1,305,000 | ||
Performance-Contingent Awards - RSUs | ||||
Share-Based Compensation | ||||
Shares approved for grant (in shares) | shares | 60,000 | 135,000 | ||
Awards outstanding (in shares) | shares | 101,250 | 135,000 | ||
Maximum potential expense | RSUs | Employee | ||||
Share-Based Compensation | ||||
Shares approved for grant (in shares) | shares | 3,000 | |||
Maximum potential expense | RSUs | Employee | Maximum | ||||
Share-Based Compensation | ||||
Compensation expense | $ 75,000 | |||
First tranche | ||||
Share-Based Compensation | ||||
Share-based compensation expense | $ 1,100,000 | |||
Second tranche | ||||
Share-Based Compensation | ||||
Share-based compensation expense | $ 800,000 | $ 900,000 | ||
Second tranche | Maximum potential expense | ||||
Share-Based Compensation | ||||
Share-based compensation expense | 2,800,000 | |||
Second tranche | Maximum potential expense | Research and development | ||||
Share-Based Compensation | ||||
Share-based compensation expense | 1,200,000 | |||
Second tranche | Maximum potential expense | Selling, general and administrative | ||||
Share-Based Compensation | ||||
Share-based compensation expense | 1,600,000 | |||
Third tranche | ||||
Share-Based Compensation | ||||
Share-based compensation expense | 0 | |||
Third tranche | Maximum potential expense | ||||
Share-Based Compensation | ||||
Share-based compensation expense | 14,200,000 | |||
Third tranche | Maximum potential expense | Research and development | ||||
Share-Based Compensation | ||||
Share-based compensation expense | 5,900,000 | |||
Third tranche | Maximum potential expense | Selling, general and administrative | ||||
Share-Based Compensation | ||||
Share-based compensation expense | 8,300,000 | |||
First performance milestone | Maximum potential expense | Performance-Contingent Awards - RSUs | ||||
Share-Based Compensation | ||||
Share-based compensation expense | 800,000 | |||
First performance milestone | Maximum potential expense | Cash bonus award | ||||
Share-Based Compensation | ||||
Share-based compensation expense | 75,000 | |||
Second performance milestone | Maximum potential expense | Performance-Contingent Awards - RSUs | ||||
Share-Based Compensation | ||||
Share-based compensation expense | 800,000 | |||
Second performance milestone | Maximum potential expense | Cash bonus award | ||||
Share-Based Compensation | ||||
Share-based compensation expense | 225,000 | |||
First and second performance milestones | Performance-Contingent Awards – RSUs and cash bonus milestones | ||||
Share-Based Compensation | ||||
Share-based compensation expense | 0 | |||
First and second performance milestones | Maximum potential expense | Performance-Contingent Awards - RSUs | ||||
Share-Based Compensation | ||||
Share-based compensation expense | 1,600,000 | |||
First and second performance milestones | Maximum potential expense | Cash bonus award | ||||
Share-Based Compensation | ||||
Share-based compensation expense | $ 300,000 |
Income Taxes - Components of pr
Income Taxes - Components of provision for income taxes (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Provision for income tax benefit (expense) | |
Income tax expense | $ 0.1 |
Provision for income taxes on undistributed earnings of foreign subsidiaries | $ 0 |
Reduction in Workforce (Details
Reduction in Workforce (Details) $ in Millions | 1 Months Ended | 3 Months Ended |
Jan. 31, 2019employee | Mar. 31, 2019USD ($) | |
Reduction in Workforce | ||
Number of headcount reduced by Company on sale of VIBATIV | employee | 51 | |
Severance related charges | $ 3.9 | |
Total severance paid | $ 3.4 |
Subsequent Events (Details)
Subsequent Events (Details) | May 31, 2019 | Mar. 31, 2019 |
Subsequent Events | ||
Equity interest | 85.00% | |
TRC | ||
Subsequent Events | ||
Equity interest | 85.00% | |
Subsequent Events | TRC | ||
Subsequent Events | ||
Equity interest | 85.00% |