Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Oct. 25, 2019 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2019 | |
Document Transition Report | false | |
Entity File Number | 001-36033 | |
Entity Registrant Name | THERAVANCE BIOPHARMA, INC. | |
Entity Incorporation, State or Country Code | KY | |
Entity Tax Identification Number | 98-1226628 | |
Entity Address, Address Line One | PO Box 309 | |
Entity Address, Address Line Two | Ugland House, South Church Street | |
Entity Address, City or Town | George Town, Grand Cayman | |
Entity Address, Country | KY | |
Entity Address, Postal Zip Code | KY1-1104 | |
City Area Code | 650 | |
Local Phone Number | 808-6000 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Title of 12(b) Security | Ordinary Share $0.00001 Par Value | |
Trading Symbol | TBPH | |
Security Exchange Name | NASDAQ | |
Entity Common Stock, Shares Outstanding | 56,762,307 | |
Entity Central Index Key | 0001583107 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 102,403 | $ 378,021 |
Short-term marketable securities | 217,278 | 127,255 |
Accounts receivable, net of allowances of $0 at September 30, 2019 and December 31, 2018 | 87 | 620 |
Receivables from collaborative arrangements | 4,595 | 10,053 |
Amounts due from TRC, LLC | 16,661 | 5,422 |
Short-term restricted cash | 7,496 | |
Other prepaid and current assets | 7,132 | 11,452 |
Total current assets | 355,652 | 532,823 |
Property and equipment, net | 12,189 | 13,176 |
Long-term marketable securities | 24,939 | 11,869 |
Operating lease assets | 46,755 | |
Tax receivable | 3,664 | |
Restricted cash | 833 | 833 |
Other assets | 1,305 | 1,534 |
Total assets | 445,337 | 560,235 |
Current liabilities: | ||
Accounts payable | 8,713 | 9,028 |
Accrued personnel-related expenses | 25,801 | 23,803 |
Accrued clinical and development expenses | 10,907 | 11,876 |
Accrued interest payable | 7,568 | 3,086 |
Non-recourse notes due 2033, net | 8,701 | |
Operating lease liabilities | 6,833 | |
Deferred revenue | 33,751 | 43,402 |
Other accrued liabilities | 6,549 | 7,359 |
Total current liabilities | 108,823 | 98,554 |
Convertible senior notes due 2023, net | 225,622 | 224,818 |
Non-recourse notes due 2033, net | 222,008 | 229,535 |
Deferred rent | 7,976 | |
Long-term operating lease liabilities | 48,620 | |
Long-term deferred revenue | 14,169 | 26,179 |
Other long-term liabilities | 8,900 | 24,762 |
Commitments and contingencies | ||
Shareholders' Deficit | ||
Preferred shares, $0.00001 par value: 230 shares authorized, no shares issued or outstanding | 0 | 0 |
Ordinary shares, $0.00001 par value: 200,000 shares authorized; 56,762 and 55,681 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively | 1 | 1 |
Additional paid-in capital | 1,000,094 | 960,721 |
Accumulated other comprehensive income (loss) | 94 | (166) |
Accumulated deficit | (1,182,994) | (1,012,145) |
Total shareholders' deficit | (182,805) | (51,589) |
Total liabilities and shareholders' deficit | $ 445,337 | $ 560,235 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Sep. 30, 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 | 56,762 | 55,681 |
Ordinary shares, outstanding shares | 56,762 | 55,681 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenue: | ||||
Revenue | $ 12,427,000 | $ 12,838,000 | $ 43,915,000 | $ 44,633,000 |
Costs and expenses: | ||||
Cost of goods sold | 705,000 | 83,000 | ||
Research and development | 52,006,000 | 52,693,000 | 152,223,000 | 149,079,000 |
Selling, general and administrative | 25,622,000 | 21,890,000 | 73,035,000 | 71,601,000 |
Total costs and expenses | 77,628,000 | 75,288,000 | 225,258,000 | 220,763,000 |
Loss from operations | (65,201,000) | (62,450,000) | (181,343,000) | (176,130,000) |
Income from investment in TRC, LLC | 7,197,000 | 3,119,000 | 21,792,000 | 5,754,000 |
Interest expense | (8,068,000) | (2,137,000) | (23,827,000) | (6,411,000) |
Interest and other income, net | 2,089,000 | 1,376,000 | 7,258,000 | 4,144,000 |
Loss before income taxes | (63,983,000) | (60,092,000) | (176,120,000) | (172,643,000) |
Provision for income tax benefit | 5,552,000 | 659,000 | 5,271,000 | 7,305,000 |
Net loss | (58,431,000) | (59,433,000) | (170,849,000) | (165,338,000) |
Net unrealized (loss) gain on available-for-sale investments | (35,000) | 194,000 | 260,000 | 402,000 |
Total comprehensive loss | $ (58,466,000) | $ (59,239,000) | $ (170,589,000) | $ (164,936,000) |
Net loss per share: | ||||
Basic and diluted net loss per share (in dollars per share) | $ (1.05) | $ (1.10) | $ (3.08) | $ (3.07) |
Shares used to compute basic and diluted net loss per share (in shares) | 55,858 | 54,248 | 55,445 | 53,771 |
Share-based compensation expense | $ 13,019,000 | $ 11,746,000 | $ 36,538,000 | $ 39,599,000 |
Research and development | ||||
Net loss per share: | ||||
Share-based compensation expense | 6,458,000 | 6,294,000 | 18,338,000 | 19,757,000 |
Selling, general and administrative | ||||
Net loss per share: | ||||
Share-based compensation expense | 6,561,000 | 5,452,000 | 18,200,000 | 19,842,000 |
Product | ||||
Revenue: | ||||
Revenue | 3,849,000 | 12,889,000 | ||
Collaborative revenue | ||||
Revenue: | ||||
Revenue | 8,836,000 | $ 8,989,000 | 21,666,000 | $ 31,744,000 |
Licensing revenue | ||||
Revenue: | ||||
Revenue | 18,500,000 | |||
Mylan collaroration agreement | ||||
Revenue: | ||||
Revenue | $ 3,591,000 | $ 3,749,000 |
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 | |||||
Proceeds from ESPP purchases | 2,742 | 2,742 | |||
Proceeds from ESPP purchases (in shares) | 135 | ||||
Employee share-based compensation expense | 39,599 | 39,599 | |||
Issuance of restricted shares (in shares) | 971 | ||||
Option exercises | 1,306 | 1,306 | |||
Option exercises (in shares) | 69 | ||||
Cumulative effect upon the adoption of ASC 606 | 1,119 | 1,119 | |||
Repurchase of shares to satisfy tax withholding | (8,453) | (8,453) | |||
Repurchase of shares to satisfy tax withholding (in shares) | (146) | ||||
Net unrealized gain (loss) on marketable securities | 402 | 402 | |||
Net loss | (165,338) | (165,338) | |||
Balances at Sep. 30, 2018 | $ 1 | 948,844 | (331) | (961,959) | (13,445) |
Balances (in shares) at Sep. 30, 2018 | 55,410 | ||||
Balances at Jun. 30, 2018 | $ 1 | 937,437 | (525) | (902,526) | 34,387 |
Balances (in shares) at Jun. 30, 2018 | 55,104 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Employee share-based compensation expense | 11,730 | 11,730 | |||
Issuance of restricted shares (in shares) | 242 | ||||
Option exercises | 1,225 | 1,225 | |||
Option exercises (in shares) | 64 | ||||
Repurchase of shares to satisfy tax withholding | (1,548) | (1,548) | |||
Net unrealized gain (loss) on marketable securities | 194 | 194 | |||
Net loss | (59,433) | (59,433) | |||
Balances at Sep. 30, 2018 | $ 1 | 948,844 | (331) | (961,959) | (13,445) |
Balances (in shares) at Sep. 30, 2018 | 55,410 | ||||
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 | |||||
Proceeds from ESPP purchases | 2,605 | $ 2,605 | |||
Proceeds from ESPP purchases (in shares) | 145 | ||||
Employee share-based compensation expense | 36,538 | 36,538 | |||
Issuance of restricted shares (in shares) | 898 | ||||
Option exercises | 2,973 | 2,973 | |||
Option exercises (in shares) | 151 | ||||
Repurchase of shares to satisfy tax withholding | (2,743) | (2,743) | |||
Repurchase of shares to satisfy tax withholding (in shares) | (113) | ||||
Net unrealized gain (loss) on marketable securities | 260 | 260 | |||
Net loss | (170,849) | (170,849) | |||
Balances at Sep. 30, 2019 | $ 1 | 1,000,094 | 94 | (1,182,994) | $ (182,805) |
Balances (in shares) at Sep. 30, 2019 | 56,762 | 56,762 | |||
Balances at Jun. 30, 2019 | $ 1 | 987,209 | 129 | (1,124,563) | $ (137,224) |
Balances (in shares) at Jun. 30, 2019 | 56,637 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Employee share-based compensation expense | 13,019 | 13,019 | |||
Issuance of restricted shares (in shares) | 209 | ||||
Option exercises | 428 | 428 | |||
Option exercises (in shares) | 29 | ||||
Repurchase of shares to satisfy tax withholding | (562) | (562) | |||
Repurchase of shares to satisfy tax withholding (in shares) | (113) | ||||
Net unrealized gain (loss) on marketable securities | (35) | (35) | |||
Net loss | (58,431) | (58,431) | |||
Balances at Sep. 30, 2019 | $ 1 | $ 1,000,094 | $ 94 | $ (1,182,994) | $ (182,805) |
Balances (in shares) at Sep. 30, 2019 | 56,762 | 56,762 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Operating activities | ||
Net loss | $ (170,849) | $ (165,338) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 4,676 | 3,195 |
Amortization and accretion income, net | (2,599) | (887) |
Share-based compensation | 36,538 | 39,599 |
Reversal of inventory purchase commitment liability | (2,250) | |
Amortization of right-of-use assets | 3,029 | |
Undistributed earnings from investment in TRC, LLC | (11,239) | (2,803) |
Other | 148 | (68) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 534 | (771) |
Receivables from collaborative arrangements | 5,458 | 3,202 |
Other prepaid and current assets | (681) | (493) |
Inventories | (552) | |
Tax receivable | (3,700) | 5,092 |
Other assets | 3 | (115) |
Accounts payable | (543) | (1,665) |
Accrued personnel-related expenses, accrued clinical and development expenses, and other accrued liabilities | (9,846) | (14,324) |
Accrued interest payable | 4,482 | |
Deferred rent | 3,370 | |
Deferred revenue | (21,661) | 79,266 |
Long-term portion of lease liabilities | (2,307) | |
Other long-term liabilities | (5,288) | (5,147) |
Net cash used in operating activities | (173,845) | (60,689) |
Investing activities | ||
Purchases of property and equipment | (1,873) | (5,740) |
Purchases of marketable securities | (366,412) | (166,412) |
Maturities of marketable securities | 266,168 | 249,450 |
Proceeds from the sale of VIBATIV business, net | 5,000 | |
Proceeds from the sale of fixed assets | 5 | 17 |
Net cash (used in) provided by investing activities | (97,112) | 77,315 |
Financing activities | ||
Proceeds from ESPP purchases | 2,605 | 2,742 |
Proceeds from option exercises | 2,973 | 1,306 |
Repurchase of shares to satisfy tax withholding | (2,743) | (8,452) |
Net cash provided by (used in) financing activities | 2,835 | (4,404) |
Net (decrease) increase in cash, cash equivalents, and restricted cash | (268,122) | 12,222 |
Cash, cash equivalents, and restricted cash at beginning of period | 378,854 | 89,813 |
Cash, cash equivalents, and restricted cash at end of period | 110,732 | 102,035 |
Supplemental disclosure of cash flow information | ||
Cash paid for interest | 17,097 | 3,738 |
Cash paid (received) for income taxes, net | 22 | $ (5,027) |
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 | 9 Months Ended |
Sep. 30, 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. The Company’s purpose is to create transformational medicines to improve the lives of patients suffering from serious illnesses. The Company’s research is focused in the areas of inflammation and immunology. Basis of Presentation The Company’s condensed consolidated financial information as of September 30, 2019, and the three and nine months ended September 30, 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 United States 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 and nine months ended September 30, 2019 are not necessarily indicative of the results to be expected for the year ending December 31, 2019, or 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 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-months 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 Effective January 1, 2019, the Company adopted ASU 2017-09, Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting 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 and nine months ended September 30, 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 collectability. 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 historically high credit quality of the Company’s financial instruments. In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (“ASU 2018-15”) . ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. Accordingly, ASU 2018-15 requires a customer in a hosting arrangement that is a service contract to follow the guidance in Subtopic 350-40 to determine which implementation costs to capitalize as an asset related to the service contract and which costs to expense. ASU 2018-15 is effective for annual reporting periods and interim periods within those years beginning after December 15, 2019 . The Company is currently evaluating the impact of adopting ASU 2018-15 on its consolidated financial statements and related disclosures. In November 2018, the FASB issued ASU 2018-18, Collaboration Arrangements: Clarifying the Interaction between Topic 808 and Topic 606 (“ASU 2018-18”) . The issuance of Topic 606 raised questions about the interaction between the guidance on collaborative arrangements and revenue recognition. addresses this uncertainty by: (i) clarifying that certain transactions between collaborative arrangement participants should be accounted for as revenue under ASC 606 when the collaboration arrangement participant is a customer; (ii) adding unit of account guidance to assess whether the collaboration arrangement or a part of the arrangement is with a customer; and (iii) precluding a company from presenting transactions with collaboration arrangement participants that are not directly related to sales to third parties together with revenue from contracts with customers. ASU 2018-18 is effective for annual reporting periods and interim periods within those years beginning after December 15, 2019 . Early adoption is permitted. The Company is currently evaluating the impact of adopting ASU 2018-18 on its consolidated financial statements and related disclosures. 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 | 9 Months Ended |
Sep. 30, 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. Three Months Ended Nine Months Ended September 30, September 30, (In thousands) 2019 2018 2019 2018 Numerator: Net loss $ (58,431) $ (59,433) $ (170,849) $ (165,338) Denominator: Weighted-average common shares outstanding 56,690 55,230 56,308 54,920 Less: weighted-average common shares subject to forfeiture (832) (982) (863) (1,149) Weighted-average common shares used to compute basic and diluted net loss per share 55,858 54,248 55,445 53,771 Basic and diluted net loss per share $ (1.05) $ (1.10) $ (3.08) $ (3.07) For the three and nine months ended September 30, 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 Nine Months Ended September 30, September 30, (In thousands) 2019 2018 2019 2018 Share issuances under equity incentive plans and ESPP 7,340 3,783 6,491 4,741 Restricted shares — 4 — 4 Share issuances upon the conversion of convertible senior notes 6,676 6,676 6,676 6,676 Total 14,016 10,463 13,167 11,421 As of September 30, 2019 and 2018, there were 414,000 and 978,750 shares, respectively, subject to performance-based vesting criteria which have been excluded from the anti-dilutive securities table above. |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2019 | |
Revenue | |
Revenue | 3. Revenue Revenue from Collaborative Arrangements The Company recognized revenues from its collaborative arrangements as follows: Three Months Ended Nine Months Ended September 30, September 30, (In thousands) 2019 2018 2019 2018 Janssen $ 8,807 $ 8,866 $ 21,522 $ 21,044 Alfasigma 23 117 121 10,650 Other 6 6 23 50 Total collaboration revenue $ 8,836 $ 8,989 $ 21,666 $ 31,744 Changes in Deferred Revenue Balances The changes in the deferred revenue balances arose as a result of the Company recognizing the following revenue from collaborative arrangements during the periods below: Three Months Ended Nine Months Ended September 30, September 30, (In thousands) 2019 2018 2019 2018 Collaboration revenue recognized in the period from: Amounts included in deferred revenue at the beginning of the period $ 8,836 $ 7 $ 21,661 $ 39 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. The Janssen Agreement is considered to be within the scope of Accounting Standards Codification, Topic 808, Collaborative Arrangements Revenue from Contracts with Customers The $900.0 million in future potential payments, inclusive of the $200.0 million opt-in fee and $700.0 million future development and commercialization milestones, 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 and nine months ended September 30, 2019, the Company recognized $8.8 million and $21.5 million, respectively, as revenue from collaboration arrangements related to the Janssen Agreement. The remaining transaction price of $47.4 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 and nine months ended September 30, 2019, the Company incurred $11.5 million and $29.1 million, respectively, in research and development costs related to the Janssen Agreement, and for the three and nine months ended September 30, 2018, the Company incurred $10.5 million and $28.1 million, respectively, in research and development costs related to the Janssen Agreement. In future reporting periods, the Company will reevaluate the estimates related to its efforts towards satisfying the performance obligation and may record a change in estimate if deemed necessary. Mylan 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 ® Under the Mylan Agreement, Mylan paid the Company an upfront 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. Under the Mylan Agreement, as of September 30, 2019, the Company is eligible to receive from Mylan potential global (ex-China and adjacent territories) 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, research and development (“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 upfront 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 for As of September 30, 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 which will be recognized as collaboration revenue over the course of the remaining performance period of approximately twelve years. 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 tiered royalties on ex-US net sales. Mylan is the principal in the sales transactions, and as a result, the Company does not reflect the product sales in its financial statements. Following the US Food and Drug Administration (“FDA”) approval of YUPELRI in November 2018, net amounts payable to or receivable from Mylan each quarter under the profit sharing structure are disaggregated according to their individual components. Any 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. All other amounts receivable from, or payable to, Mylan in connection with the commercialization of YUPELRI are recorded within the condensed consolidated statements of operations as revenue from “Mylan collaboration agreement” or as a collaboration loss within selling, general and administrative expenses, respectively. The following YUPLERI-related amounts were recognized in the Company’s condensed consolidated statements of operations: Three Months Ended Nine Months Ended September 30, September 30, (In thousands) 2019 2019 Mylan collaboration agreement - Amounts receivable from Mylan $ 3,591 $ 3,749 Collaboration loss - Amounts payable to Mylan $ — $ 1,582 Prior to the FDA approval of YUPELRI in late 2018, the Company recognized its 35% share of expenses within R&D expense and selling, general and administrative expense on its condensed consolidated statements of operations. For the three and nine months ended September 30, 2018, the arrangement resulted in total collaboration expense, net of reimbursements from Mylan, of $1.5 million and $3.3 million, respectively. Reimbursement of R&D Expense Under certain collaborative arrangements, the Company is entitled to reimbursement of certain R&D expenses. Activities under collaborative arrangements for which the Company is entitled to reimbursement are considered to be collaborative activities under the scope of ASC 808. For these units of account, the Company does not analogize to ASC 606 or recognize revenue. The Company records reimbursement payments received from its collaboration partners as reductions to R&D expense. The following table summarizes the reductions to R&D expense related to the reimbursement payments: Three Months Ended Nine Months Ended September 30, September 30, (In thousands) 2019 2018 2019 2018 Janssen $ 930 $ 610 $ 3,125 $ 610 Mylan 53 2,598 287 5,843 Total reduction to R&D expense $ 983 $ 3,208 $ 3,412 $ 6,453 Revenue from Licensing Arrangements In June 2019, the Company announced the expansion of the Mylan Agreement (the “Mylan Amendment”) to grant Mylan exclusive development and commercialization rights to nebulized revefenacin in China and adjacent territories. In exchange, the Company received an upfront payment of $18.5 million (before a required tax withholding) and will be eligible to receive potential development and sales milestones totaling $54.0 million together with low double-digit tiered royalties on net sales of nebulized revefenacin, if approved. Of the $54.0 million in potential milestones, $9.0 million is associated with the development of $37.5 million is associated with sales milestones. Mylan will be responsible for all aspects of development and commercialization in the partnered regions, including pre- and post-launch activities and product registration and all associated costs. The Mylan Amendment is accounted for under ASC 606 as a separate contract from the original Mylan Agreement that was entered into in January 2015. The Company identified a The future potential milestone amounts for |
Cash, Cash Equivalents, and Res
Cash, Cash Equivalents, and Restricted Cash | 9 Months Ended |
Sep. 30, 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. September 30, (In thousands) 2019 2018 Cash and cash equivalents $ 102,403 $ 101,202 Restricted cash 8,329 833 Total cash, cash equivalents, and restricted cash shown on the $ 110,732 $ 102,035 As of September 30, 2019, the Company maintained restricted cash to secure a line of credit and debt servicing of its 9.0% non-recourse notes, due on or before 2033. See “Note 6. Long-Term Debt” |
Investments and Fair Value Meas
Investments and Fair Value Measurements | 9 Months Ended |
Sep. 30, 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 obtained from a commercial pricing service. The fair market value of marketable securities classified within Level 1 is based on quoted prices for identical instruments in active markets. The fair value of marketable securities classified within Level 2 is based on quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; or model-driven valuations whose inputs are observable or whose significant value drivers are observable. 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. September 30, 2019 Gross Gross Amortized Unrealized Unrealized Estimated (In thousands) Cost Gains Losses Fair Value US government securities Level 1 $ 132,492 $ 61 $ (15) $ 132,538 Corporate notes Level 2 32,227 41 (1) 32,267 Commercial paper Level 2 122,328 17 (7) 122,338 Marketable securities 287,047 119 (23) 287,143 Money market funds Level 1 47,626 — — 47,626 Total $ 334,673 $ 119 $ (23) $ 334,769 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 September 30, 2019, all of the available-for-sale securities had contractual maturities within 19 months and the weighted-average maturity of marketable securities was approximately six 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 and nine months ended September 30, 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 September 30, 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 September 30, 2019. As of September 30, 2019, the Company’s accumulated other comprehensive income (loss) on its condensed consolidated balance sheets consisted of unrealized gains or losses on available-for-sale investments. During the three and nine months ended September 30, 2019 and 2018, the Company did not sell any of its marketable securities. |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Sep. 30, 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 Theravance Respiratory Company, LLC (“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 the Glaxo Group or one of its affiliates (“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 (“LLC Agreement”) over the next four fiscal quarters) relating to the TRELEGY ELLIPTA 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 Note 8. Theravance Respiratory Company, LLC 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. 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 September 30, 2019 with an estimated fair value of $212.3 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 September 30, 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 | 9 Months Ended |
Sep. 30, 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 $15.7 million, as of September 30, 2019, that expires in May 2022. The Company’s Irish subsidiary leases approximately 6,100 square feet of office space in Dublin, Ireland under a lease that expires in April 2027 (“Dublin Lease”). In addition, the Company leases equipment for clinical research studies with an estimated lease period ending in September 2020. 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 right-of-use assets and lease liabilities amounts was due to deferred rent payments that are payable in future periods. (In thousands) Classification September 30, 2019 Assets Operating lease assets Operating lease assets $ 46,755 Liabilities Current: Operating lease liabilities Operating lease liabilities $ 6,833 Non-current: Operating lease liabilities Long-term operating lease liabilities 48,620 Total operating lease liabilities $ 55,453 Lease expense was included within operating expenses in the condensed consolidated statements of operations as follows: Three Months Nine Months Ended Ended (In thousands) Classification September 30, 2019 September 30, 2019 Operating lease expense Selling, general and administrative expenses $ 2,512 $ 7,431 Operating lease expense Research and development expenses 238 715 Total operating lease expense (1) $ 2,750 $ 8,146 (1) Includes short-term leases which were immaterial. (In thousands) Three months ending December 31, 2019 $ 2,201 Years ending December 31: 2020 7,242 2021 9,481 2022 9,746 2023 10,024 Thereafter 70,172 Total operating lease payments $ 108,866 Less: Estimated tenant improvement allowance (15,721) Less: Imputed interest (37,692) Present value of operating lease liabilities $ 55,453 Cash paid for amounts included in the measurement of lease liabilities for the three and nine months ended September 30, 2019 was $2.1 million and $6.0 million, respectively, and is included in net cash used in operating activities in the condensed consolidated statements of cash flows. As of September 30, 2019, the weighted-average remaining lease term was 10.4 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 | 9 Months Ended |
Sep. 30, 2019 | |
Theravance Respiratory Company, LLC | |
Theravance Respiratory Company, LLC | 8. Theravance Respiratory Company, LLC 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 ® ® ® ® ® ® Trelegy Ellipta 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 $16.7 million and $5.4 million as of September 30, 2019 and December 31, 2018, respectively. This amount includes undistributed earnings from the Company’s investment in TRC which are recorded on the condensed consolidated balance sheets as “Amounts due from TRC, LLC” and are 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 and nine months ended September 30, 2019, the Company recognized net royalty income of $7.2 million and $21.8 million within the condensed consolidated statements of operations within “Income from investment in TRC, LLC”. These amounts were recorded net of the Company’s share of TRC’s expenses of $2.3 million for the three and nine months ended September 30, 2019, which was primarily comprised of TRC’s legal and related fees associated with the arbitration between Innoviva and TRC and the Company. For the three and nine months ended September 30, 2018, the Company recognized net royalty income of $3.1 million and $5.8 million, respectively. There were minimal TRC expenses for the three and nine months ended September 30, 2018. In May 2019, the Company announced that it had initiated an arbitration against Innoviva and TRC because Innoviva, as manager of TRC, had caused TRC to withhold certain distributions owed to the Company with respect to the Company’s 85% economic interest in TRC since the quarter ended December 31, 2018, and Innoviva’s previous statement to the Company that it intended to prevent TRC from making cash distributions during 2019. The arbitration hearing commenced on July 23, 2019. As of June 30, 2019, the Company was owed, under the LLC Agreement, $20.0 million in net royalty income payments for the period from the fourth quarter of 2018 through the second quarter of 2019. After initiation of the arbitration and prior to the final decision being issued in the third quarter of 2019, Innoviva caused TRC to make a partial distribution of funds to the Company of $10.6 million against these amounts due. Innoviva withheld $6.9 million, representing the Company’s share of the $8.0 million of total TRC funds earmarked for certain TRELEGY ELLIPTA development and commercialization initiatives proposed by Innoviva, pursuant to the arbitrator’s final decision. The amount due to the Company as of September 30, 2019 was $16.7 million and includes the $6.9 million currently being withheld by Innoviva. The Company believes the $16.7 million will be received by early 2020. In the event GSK agrees to the TRELEGY ELLIPTA development and commercialization initiatives proposed by Innoviva, the Company will reclassify the $6.9 million from “Amounts due from TRC, LLC” within total current assets to “Investment in TRC, LLC” within long-term assets on its condensed consolidated balance sheets. |
Share-Based Compensation
Share-Based Compensation | 9 Months Ended |
Sep. 30, 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 Nine Months Ended September 30, September 30, (In thousands) 2019 2018 2019 2018 Research and development $ 6,458 $ 6,294 $ 18,338 $ 19,757 Selling, general and administrative 6,561 5,452 18,200 19,842 Total share-based compensation expense $ 13,019 $ 11,746 $ 36,538 $ 39,599 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, as well as, continued employment. 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 September 30, 2019, there were 776,250 of these performance-contingent RSAs and 101,250 of these performance-contingent RSUs outstanding, and as of September 30, 2018, there were 978,750 of these performance-contingent RSAs and 101,250 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. Previously recognized expense is reversed in the period in which it becomes probable that the requisite service period will not be rendered. The performance conditions associated with the first tranche of these awards were completed in the second quarter of 2018, and the Company recognized $1.8 million of share-based compensation expense for the nine months ended September 30, 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 and nine months ended September 30, 2019, the Company recognized $0.7 million and $1.2 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 $1.1 million (allocated as $0.4 million for research and development expense and $0.7 million for selling, general and administrative expense). For the three and nine months ended September 30, 2018, the Company recognized $47,000 and $1.8 million, respectively, of share-based compensation expense related to the second tranche of these awards. As of September 30, 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 $12.8 million (allocated as $4.4 million for research and development expense and $8.4 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 expire by December 31, 2020 and have a maximum share-based compensation expense of $75,000 which will be recognized when its single performance milestone is deemed to be probable of achievement. As of September 30, 2019, the Company determined that the performance milestone was not probable of achievement and, as a result, no compensation expense related to these RSUs has been recognized to date. In the first quarter of 2019, the Compensation Committee approved a grant of 60,000 performance-contingent RSUs to an employee. These RSUs 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 the 60,000 performance-contingent RSUs’ first and second performance milestones are $0.8 million each for a total of $1.6 million, and the RSUs expire by December 31, 2021. In the third quarter of 2019, the Company determined that a portion of performance milestone associated with the first tranche was probable of achievement and recognized $0.3 million of share-based compensation expense. The Company determined that the second tranche was not probable as of September 30, 2019 and, as a result, no compensation expense related to these RSUs has been recognized to date. In the third quarter of 2019, the Compensation Committee approved a grant of 60,000 performance-contingent RSUs to an employee. These RSUs 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 RSUs is broken into three separate performance milestones and will be recognized when the associated performance milestones are deemed to be probable of achievement. The maximum share-based compensation expense associated with the 60,000 performance-contingent RSUs’ three performance milestones are approximately $0.3 million each for a total of $1.0 million, and the 60,000 performance-contingent RSUs expire by June 30, 2022. As of September 30, 2019, the Company determined that the performance milestones were not probable of achievement and, as a result, no compensation expense related to these RSUs has been recognized to date. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2019 | |
Income Taxes | |
Income Taxes | 10. Income Taxes The income tax provision was a $5.6 million net benefit and $5.3 million net benefit for the three and nine months ended September 30, 2019, respectively. The net income tax benefit was primarily attributed to a reversal of previously accrued contingent tax liabilities for uncertain tax positions due to a lapse of the statute of limitations and current year US research and development 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 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, 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. New United Kingdom (“UK”) tax legislation was introduced by the Finance Act 2019 December 31, 2019. On October 15, 2019, the UK published further guidance intended to facilitate the administration of the ORIP regime. However, a number of issues and areas of uncertainty remain . The Company has reviewed the original legislation in conjunction with the guidance and believes that the ORIP regime may apply to certain cash receipts. Based on this analysis, the Company believes that the ORIP charge on UK-derived cash receipts through the third quarter of 2019 is not material, but the Company will continue to refine its ORIP conclusions as guidance evolves. |
Reduction in Workforce
Reduction in Workforce | 9 Months Ended |
Sep. 30, 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 and paid severance related charges totaling |
Organization and Summary of S_2
Organization and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Organization and Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation The Company’s condensed consolidated financial information as of September 30, 2019, and the three and nine months ended September 30, 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 United States 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 and nine months ended September 30, 2019 are not necessarily indicative of the results to be expected for the year ending December 31, 2019, or 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 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-months 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 Effective January 1, 2019, the Company adopted ASU 2017-09, Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting 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 and nine months ended September 30, 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 collectability. 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 historically high credit quality of the Company’s financial instruments. In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (“ASU 2018-15”) . ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. Accordingly, ASU 2018-15 requires a customer in a hosting arrangement that is a service contract to follow the guidance in Subtopic 350-40 to determine which implementation costs to capitalize as an asset related to the service contract and which costs to expense. ASU 2018-15 is effective for annual reporting periods and interim periods within those years beginning after December 15, 2019 . The Company is currently evaluating the impact of adopting ASU 2018-15 on its consolidated financial statements and related disclosures. In November 2018, the FASB issued ASU 2018-18, Collaboration Arrangements: Clarifying the Interaction between Topic 808 and Topic 606 (“ASU 2018-18”) . The issuance of Topic 606 raised questions about the interaction between the guidance on collaborative arrangements and revenue recognition. addresses this uncertainty by: (i) clarifying that certain transactions between collaborative arrangement participants should be accounted for as revenue under ASC 606 when the collaboration arrangement participant is a customer; (ii) adding unit of account guidance to assess whether the collaboration arrangement or a part of the arrangement is with a customer; and (iii) precluding a company from presenting transactions with collaboration arrangement participants that are not directly related to sales to third parties together with revenue from contracts with customers. ASU 2018-18 is effective for annual reporting periods and interim periods within those years beginning after December 15, 2019 . Early adoption is permitted. The Company is currently evaluating the impact of adopting ASU 2018-18 on its consolidated financial statements and related disclosures. 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) | 9 Months Ended |
Sep. 30, 2019 | |
Net Loss per Share | |
Schedule of basic and diluted net loss per share | Three Months Ended Nine Months Ended September 30, September 30, (In thousands) 2019 2018 2019 2018 Numerator: Net loss $ (58,431) $ (59,433) $ (170,849) $ (165,338) Denominator: Weighted-average common shares outstanding 56,690 55,230 56,308 54,920 Less: weighted-average common shares subject to forfeiture (832) (982) (863) (1,149) Weighted-average common shares used to compute basic and diluted net loss per share 55,858 54,248 55,445 53,771 Basic and diluted net loss per share $ (1.05) $ (1.10) $ (3.08) $ (3.07) |
Schedule of anti-dilutive securities | Three Months Ended Nine Months Ended September 30, September 30, (In thousands) 2019 2018 2019 2018 Share issuances under equity incentive plans and ESPP 7,340 3,783 6,491 4,741 Restricted shares — 4 — 4 Share issuances upon the conversion of convertible senior notes 6,676 6,676 6,676 6,676 Total 14,016 10,463 13,167 11,421 |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Revenue | |
Schedule of revenue recognized from collaborative arrangements | Three Months Ended Nine Months Ended September 30, September 30, (In thousands) 2019 2018 2019 2018 Janssen $ 8,807 $ 8,866 $ 21,522 $ 21,044 Alfasigma 23 117 121 10,650 Other 6 6 23 50 Total collaboration revenue $ 8,836 $ 8,989 $ 21,666 $ 31,744 |
Summary of changes in deferred revenue | Three Months Ended Nine Months Ended September 30, September 30, (In thousands) 2019 2018 2019 2018 Collaboration revenue recognized in the period from: Amounts included in deferred revenue at the beginning of the period $ 8,836 $ 7 $ 21,661 $ 39 Performance obligations satisfied in previous period — — — — |
Summary of profit sharing revenue and collaboration loss | Three Months Ended Nine Months Ended September 30, September 30, (In thousands) 2019 2019 Mylan collaboration agreement - Amounts receivable from Mylan $ 3,591 $ 3,749 Collaboration loss - Amounts payable to Mylan $ — $ 1,582 |
Summary of reductions to R and D costs related to the reimbursement payments | Three Months Ended Nine Months Ended September 30, September 30, (In thousands) 2019 2018 2019 2018 Janssen $ 930 $ 610 $ 3,125 $ 610 Mylan 53 2,598 287 5,843 Total reduction to R&D expense $ 983 $ 3,208 $ 3,412 $ 6,453 |
Cash, Cash Equivalents, and R_2
Cash, Cash Equivalents, and Restricted Cash (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Cash, Cash Equivalents, and Restricted Cash | |
Schedule of reconciliation of cash, cash equivalents, and restricted cash | September 30, (In thousands) 2019 2018 Cash and cash equivalents $ 102,403 $ 101,202 Restricted cash 8,329 833 Total cash, cash equivalents, and restricted cash shown on the $ 110,732 $ 102,035 |
Investments and Fair Value Me_2
Investments and Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Investments and Fair Value Measurements | |
Schedule of available-for-sale securities | September 30, 2019 Gross Gross Amortized Unrealized Unrealized Estimated (In thousands) Cost Gains Losses Fair Value US government securities Level 1 $ 132,492 $ 61 $ (15) $ 132,538 Corporate notes Level 2 32,227 41 (1) 32,267 Commercial paper Level 2 122,328 17 (7) 122,338 Marketable securities 287,047 119 (23) 287,143 Money market funds Level 1 47,626 — — 47,626 Total $ 334,673 $ 119 $ (23) $ 334,769 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) | 9 Months Ended |
Sep. 30, 2019 | |
Leases | |
Summary of supplemental balance sheet information related to leases | (In thousands) Classification September 30, 2019 Assets Operating lease assets Operating lease assets $ 46,755 Liabilities Current: Operating lease liabilities Operating lease liabilities $ 6,833 Non-current: Operating lease liabilities Long-term operating lease liabilities 48,620 Total operating lease liabilities $ 55,453 |
Summary of components of lease expense | Three Months Nine Months Ended Ended (In thousands) Classification September 30, 2019 September 30, 2019 Operating lease expense Selling, general and administrative expenses $ 2,512 $ 7,431 Operating lease expense Research and development expenses 238 715 Total operating lease expense (1) $ 2,750 $ 8,146 (1) Includes short-term leases which were immaterial. |
Summary of maturities of lease liabilities | (In thousands) Three months ending December 31, 2019 $ 2,201 Years ending December 31: 2020 7,242 2021 9,481 2022 9,746 2023 10,024 Thereafter 70,172 Total operating lease payments $ 108,866 Less: Estimated tenant improvement allowance (15,721) Less: Imputed interest (37,692) Present value of operating lease liabilities $ 55,453 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Share-Based Compensation | |
Schedule of share-based compensation expense included in the consolidated statements of operations | Three Months Ended Nine Months Ended September 30, September 30, (In thousands) 2019 2018 2019 2018 Research and development $ 6,458 $ 6,294 $ 18,338 $ 19,757 Selling, general and administrative 6,561 5,452 18,200 19,842 Total share-based compensation expense $ 13,019 $ 11,746 $ 36,538 $ 39,599 |
Organization and Summary of S_3
Organization and Summary of Significant Accounting Policies - Recently Issued Accounting Pronouncements (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Jan. 01, 2019 | |
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 | $ 46,755 | |
Operating lease liability | $ 55,453 | |
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) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Numerator: | ||||
Net loss | $ (58,431) | $ (59,433) | $ (170,849) | $ (165,338) |
Denominator: | ||||
Weighted-average common shares outstanding | 56,690 | 55,230 | 56,308 | 54,920 |
Less: weighted-average common shares subject to forfeiture | (832) | (982) | (863) | (1,149) |
Weighted-average common shares used to compute basic and diluted net loss per share | 55,858 | 54,248 | 55,445 | 53,771 |
Basic and diluted net loss per share | $ (1.05) | $ (1.10) | $ (3.08) | $ (3.07) |
Net Loss per Share - Anti-dilut
Net Loss per Share - Anti-dilutive Securities (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Jun. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Anti-Dilutive Securities | ||||
Anti-dilutive securities (in shares) | 14,016,000 | 10,463,000 | 13,167,000 | 11,421,000 |
Share issuances under equity incentive plans and ESPP | ||||
Anti-Dilutive Securities | ||||
Anti-dilutive securities (in shares) | 7,340,000 | 3,783,000 | 6,491,000 | 4,741,000 |
Restricted shares | ||||
Anti-Dilutive Securities | ||||
Anti-dilutive securities (in shares) | 4,000 | 4,000 | ||
Share issuances upon the conversion of convertible senior notes | ||||
Anti-Dilutive Securities | ||||
Anti-dilutive securities (in shares) | 6,676,000 | 6,676,000 | 6,676,000 | 6,676,000 |
Performance-based vesting | ||||
Anti-Dilutive Securities | ||||
Anti-dilutive securities (in shares) | 414,000 | 978,750 |
Revenue - Revenue from Collabor
Revenue - Revenue from Collaborative Arrangements (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Collaborative Arrangements and Co-Promote Agreement | ||||
Revenue | $ 12,427 | $ 12,838 | $ 43,915 | $ 44,633 |
Collaboration revenue recognized in the period from: | ||||
Amounts included in deferred revenue at the beginning of the period | 8,836 | 7 | 21,661 | 39 |
Janssen | ||||
Collaborative Arrangements and Co-Promote Agreement | ||||
Revenue | 8,807 | 8,866 | 21,522 | 21,044 |
Alfasigma | ||||
Collaborative Arrangements and Co-Promote Agreement | ||||
Revenue | 23 | 117 | 121 | 10,650 |
Other | ||||
Collaborative Arrangements and Co-Promote Agreement | ||||
Revenue | 6 | 6 | 23 | 50 |
Collaborative revenue | ||||
Collaborative Arrangements and Co-Promote Agreement | ||||
Revenue | $ 8,836 | $ 8,989 | $ 21,666 | $ 31,744 |
Revenue - Janssen Biotech Agree
Revenue - Janssen Biotech Agreement (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Feb. 28, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Collaborative Arrangements and Co-Promote Agreement | |||||
Revenue | $ 12,427 | $ 12,838 | $ 43,915 | $ 44,633 | |
Percentage of profit share | 67.00% | 65.00% | |||
Revenue from the recognition of previously deferred revenue | 8,836 | 7 | $ 21,661 | 39 | |
Research and development | 52,006 | 52,693 | 152,223 | 149,079 | |
Janssen | |||||
Collaborative Arrangements and Co-Promote Agreement | |||||
Upfront payment receivable | $ 100,000 | ||||
Revenue | 8,807 | 8,866 | 21,522 | 21,044 | |
Percentage of profit share | 33.00% | ||||
Maximum potential payments receivable | $ 900,000 | ||||
Collaborative arrangement, opt in fee | 200,000 | ||||
Collaborative arrangement, future development and commercialization milestones | $ 700,000 | ||||
Revenue from collaborative arrangements | 8,800 | 21,500 | |||
Research and development | 11,500 | $ 10,500 | 29,100 | $ 28,100 | |
Deferred revenue | $ 47,400 | $ 47,400 |
Revenue - Development and Comme
Revenue - Development and Commercialization Agreement (Details) - USD ($) $ / shares in Units, $ in Thousands | Jan. 30, 2015 | Feb. 28, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2016 | Dec. 31, 2015 | Jan. 31, 2015 |
Collaborative Arrangements and Co-Promote Agreement | |||||||||
Milestone payment | $ 12,427 | $ 12,838 | $ 43,915 | $ 44,633 | |||||
Percentage of profit share | 67.00% | 65.00% | |||||||
Revenue from the recognition of previously deferred revenue | 8,836 | 7 | $ 21,661 | 39 | |||||
Mylan | |||||||||
Collaborative Arrangements and Co-Promote Agreement | |||||||||
Initial cash payment | $ 15,000 | ||||||||
Number of shares purchased | 1,585,790 | ||||||||
Potential milestone or contingent payments | $ 205,000 | ||||||||
Transaction price | $ 34,200 | ||||||||
Percentage of profit share | 35.00% | ||||||||
Performance period (in years) | 12 years | 17 years | |||||||
Deferred revenue | 300 | $ 300 | |||||||
Mylan | Purchase Agreement | |||||||||
Collaborative Arrangements and Co-Promote Agreement | |||||||||
Equity investments made in the entity | $ 30,000 | ||||||||
Share Price | $ 18.918 | ||||||||
Price per share premium (as a percent) | 10.00% | ||||||||
Premium proceeds from sale of ordinary shares | $ 4,200 | $ 4,200 | |||||||
Mylan | Future potential combination products | |||||||||
Collaborative Arrangements and Co-Promote Agreement | |||||||||
Initial cash payment | 15,000 | ||||||||
Potential milestone or contingent payments | 7,500 | 7,500 | $ 45,000 | ||||||
Mylan | Milestone - 50% enrollment in Phase 3 twelve-month safety study | |||||||||
Collaborative Arrangements and Co-Promote Agreement | |||||||||
Milestone payment | $ 15,000 | ||||||||
Mylan | Milestone - 50% enrollment in Phase 3 twelve-month safety study | Development and Commercialization Agreement | |||||||||
Collaborative Arrangements and Co-Promote Agreement | |||||||||
Initial cash payment | $ 15,000 | ||||||||
Alfasigma | |||||||||
Collaborative Arrangements and Co-Promote Agreement | |||||||||
Milestone payment | $ 23 | $ 117 | $ 121 | $ 10,650 |
Revenue - Revenue from Licensin
Revenue - Revenue from Licensing Arrangements (Details) - Mylan - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2019 | Jan. 31, 2015 | |
Collaborative Arrangements and Co-Promote Agreement | ||
Potential milestone or contingent payments | $ 205 | |
Upfront payment receivable | $ 18.5 | |
YUPELRI Monotherapy | ||
Collaborative Arrangements and Co-Promote Agreement | ||
Potential milestone or contingent payments | 9 | 160 |
YUPELRI Monotherapy | Sales milestones | ||
Collaborative Arrangements and Co-Promote Agreement | ||
Potential milestone or contingent payments | 37.5 | 150 |
YUPELRI Monotherapy | European Union Regulatory Issues [Member] | ||
Collaborative Arrangements and Co-Promote Agreement | ||
Potential milestone or contingent payments | 10 | |
Future potential combination products | ||
Collaborative Arrangements and Co-Promote Agreement | ||
Potential milestone or contingent payments | 7.5 | $ 45 |
Future potential combination products | Development and Sales Milestones | ||
Collaborative Arrangements and Co-Promote Agreement | ||
Potential milestone or contingent payments | $ 54 |
Revenue - Condensed Statement O
Revenue - Condensed Statement Of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Development and Collaboration Agreement | ||||
Revenues | $ 12,427 | $ 12,838 | $ 43,915 | $ 44,633 |
Mylan collaroration agreement | ||||
Development and Collaboration Agreement | ||||
Revenues | $ 3,591 | 3,749 | ||
Collaboration Loss | $ 1,582 |
Revenue - Reimbursement of R an
Revenue - Reimbursement of R and D Costs (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Feb. 28, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Research and Development Reimbursement | |||||
Total reduction to R and D expense | $ 983 | $ 3,208 | $ 3,412 | $ 6,453 | |
Percentage of profit share | 67.00% | 65.00% | |||
Operating expenses | |||||
Research and Development Reimbursement | |||||
Percentage of profit share | 35.00% | ||||
Payable after the Company's R&D expenses had been reimbursed | 1,500 | $ 3,300 | |||
Mylan | |||||
Research and Development Reimbursement | |||||
Total reduction to R and D expense | 53 | 2,598 | $ 287 | 5,843 | |
Percentage of profit share | 35.00% | ||||
Janssen | |||||
Research and Development Reimbursement | |||||
Total reduction to R and D expense | $ 930 | $ 610 | $ 3,125 | $ 610 | |
Percentage of profit share | 33.00% |
Cash, Cash Equivalents, and R_3
Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 | Nov. 30, 2018 | Sep. 30, 2018 | Dec. 31, 2017 |
Cash and cash equivalents | $ 102,403 | $ 378,021 | $ 101,202 | ||
Restricted cash | 8,329 | 833 | |||
Total cash, cash equivalents, and restricted cash shown on the condensed consolidated statements of cash flows | $ 110,732 | $ 378,854 | $ 102,035 | $ 89,813 | |
9.0% non-recourse notes due 2033 | |||||
Interest rate (as a percent) | 9.00% | 9.00% |
Investments and Fair Value Me_3
Investments and Fair Value Measurements - Available for sale securities (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Available for sale securities: | ||
Amortized Cost | $ 334,673 | $ 501,837 |
Gross Unrealized Gains | 119 | 8 |
Gross Unrealized Losses | (23) | (174) |
Estimated Fair Value | 334,769 | 501,671 |
Marketable securities | ||
Available for sale securities: | ||
Amortized Cost | 287,047 | 207,086 |
Gross Unrealized Gains | 119 | 8 |
Gross Unrealized Losses | (23) | (174) |
Estimated Fair Value | 287,143 | 206,920 |
US government securities | Level 1 | ||
Available for sale securities: | ||
Amortized Cost | 132,492 | 48,807 |
Gross Unrealized Gains | 61 | |
Gross Unrealized Losses | (15) | (86) |
Estimated Fair Value | 132,538 | 48,721 |
US government agency securities | Level 2 | ||
Available for sale securities: | ||
Amortized Cost | 9,852 | |
Gross Unrealized Gains | 2 | |
Estimated Fair Value | 9,854 | |
Corporate notes | Level 2 | ||
Available for sale securities: | ||
Amortized Cost | 32,227 | 57,508 |
Gross Unrealized Gains | 41 | 6 |
Gross Unrealized Losses | (1) | (88) |
Estimated Fair Value | 32,267 | 57,426 |
Commercial paper | Level 2 | ||
Available for sale securities: | ||
Amortized Cost | 122,328 | 90,919 |
Gross Unrealized Gains | 17 | |
Gross Unrealized Losses | (7) | |
Estimated Fair Value | 122,338 | 90,919 |
Money market funds | Level 1 | ||
Available for sale securities: | ||
Amortized Cost | 47,626 | 294,751 |
Estimated Fair Value | $ 47,626 | $ 294,751 |
Investments and Fair Value Me_4
Investments and Fair Value Measurements - Convertible senior notes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Maturity period for marketable securities | ||||
Maximum contractual maturity period | 19 months | |||
Weighted average contractual maturity period | 6 months | |||
Fair value transfers | ||||
Fair value of assets transferred from Level 2 to Level 1 | $ 0 | $ 0 | $ 0 | $ 0 |
Fair value of liabilities transferred from Level 1 to Level 2 | 0 | 0 | ||
Unrealized losses | ||||
Net unrealized losses | 0 | 0 | ||
Available-for-sale securities sold | $ 0 | $ 0 | $ 0 | $ 0 |
Long-Term Debt (Details)
Long-Term Debt (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended |
Nov. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2019 | |
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% | 9.00% |
Notes net principal amount | $ 237.5 | $ 237.5 | |
Percentage of equity interest | 63.75% | ||
9.0% non-recourse notes due 2033 | Level 2 | |||
Long-Term Debt | |||
Notes fair value | $ 225.6 | 225.6 | |
3.25% Convertible Senior Notes Due 2023 | |||
Long-Term Debt | |||
Proceeds from issuance of debt | $ 230 | ||
Interest rate (as a percent) | 3.25% | 3.25% | |
Notes fair value | $ 212.3 | $ 212.3 | |
Arbitration against Innoviva and TRC | |||
Long-Term Debt | |||
Amount of distribution withheld | $ 6.9 | ||
TRC | |||
Long-Term Debt | |||
Percentage of equity interest | 85.00% | 85.00% | |
TRC | Arbitration against Innoviva and TRC | |||
Long-Term Debt | |||
Amount of distribution withheld | $ 8 | $ 8 | |
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 | 9 Months Ended |
Sep. 30, 2019USD ($)ft²Option | |
Lessee, Lease, Description [Line Items] | |
Area of leased space | 170,000 |
Number of building leased | 2 |
Tenant improvement allowance | $ | $ 15,721 |
Number of options to extend | Option | 2 |
Option to extend | true |
Renewal term | 5 years |
Ireland | |
Lessee, Lease, Description [Line Items] | |
Area of leased space | 6,100 |
Option to terminate | true |
Leases - Assets and Liabilities
Leases - Assets and Liabilities (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Assets and liabilities | |
Operating lease assets | $ 46,755 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Operating lease assets |
Operating lease liabilities, current | $ 6,833 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Other Accrued Liabilities, Current |
Operating lease liabilities | $ 48,620 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Operating lease liabilities |
Total operating lease liabilities | $ 55,453 |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Lessee, Lease, Description [Line Items] | ||
Operating lease expense | $ 2,750 | $ 8,146 |
Selling, general and administrative | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease expense | 2,512 | 7,431 |
Research and development | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease expense | $ 238 | $ 715 |
Leases - Maturity of Lease Liab
Leases - Maturity of Lease Liabilities and Other Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2019 | Nov. 30, 2018 | |
Maturity of Lease Liabilities | |||
Nine months ending December 31, 2019 | $ 2,201 | $ 2,201 | |
2020 | 7,242 | 7,242 | |
2021 | 9,481 | 9,481 | |
2022 | 9,746 | 9,746 | |
2023 | 10,024 | 10,024 | |
Thereafter | 70,172 | 70,172 | |
Total operating lease payments | 108,866 | 108,866 | |
Less: Estimated tenant improvement allowance | (15,721) | (15,721) | |
Less: Imputed interest | (37,692) | (37,692) | |
Present value of operating lease liabilities | 55,453 | 55,453 | |
Operating cash flows from operating leases | $ 2,100 | $ 6,000 | |
Weighted-average remaining lease term (years) | 10 years 4 months 24 days | 10 years 4 months 24 days | |
Weighted-average discount rate | 8.65% | 8.65% | |
9.0% non-recourse notes due 2033 | |||
Maturity of Lease Liabilities | |||
Interest rate (as a percent) | 9.00% | 9.00% | 9.00% |
Theravance Respiratory Compan_2
Theravance Respiratory Company, LLC (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
May 31, 2019 | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)item | Sep. 30, 2018USD ($) | Jun. 30, 2019USD ($) | Dec. 31, 2018USD ($) | |
Theravance Respiratory Company, LLC | |||||||
Income (Loss) from Equity Method Investments | $ 7,197 | $ 3,119 | $ 21,792 | $ 5,754 | |||
Amounts due from TRC, LLC | 16,661 | $ 16,661 | $ 5,422 | ||||
Arbitration against Innoviva and TRC | |||||||
Theravance Respiratory Company, LLC | |||||||
Amount of distribution withheld | 6,900 | ||||||
Partial dsitribution received | $ 10,600 | ||||||
Amounts due from TRC, LLC | $ 20,000 | ||||||
TRC | |||||||
Theravance Respiratory Company, LLC | |||||||
Percentage of equity interest | 85.00% | 85.00% | |||||
Percentage of economic interest | 85.00% | ||||||
Number of fiscal quarters | item | 4 | ||||||
Equity method investments | $ 16,700 | $ 16,700 | $ 5,400 | ||||
Royalty payments | 7,200 | $ 3,100 | 21,800 | $ 5,800 | |||
Royalty expenses | 2,300 | ||||||
Amounts due from TRC, LLC | 16,700 | 16,700 | |||||
TRC | Arbitration against Innoviva and TRC | |||||||
Theravance Respiratory Company, LLC | |||||||
Percentage of economic interest | 85.00% | ||||||
Amount of distribution withheld | $ 8,000 | $ 8,000 |
Share-Based Compensation - Expe
Share-Based Compensation - Expense (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Share-Based Compensation | ||||
Share-based compensation expense | $ 13,019,000 | $ 11,746,000 | $ 36,538,000 | $ 39,599,000 |
Research and development | ||||
Share-Based Compensation | ||||
Share-based compensation expense | 6,458,000 | 6,294,000 | 18,338,000 | 19,757,000 |
Selling, general and administrative | ||||
Share-Based Compensation | ||||
Share-based compensation expense | $ 6,561,000 | $ 5,452,000 | $ 18,200,000 | $ 19,842,000 |
Share-Based Compensation - Perf
Share-Based Compensation - Performance Contingent Awards (Details) | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2019USD ($)Milestoneshares | Sep. 30, 2018USD ($)shares | Mar. 31, 2016shares | Sep. 30, 2019USD ($)Milestonetrancheshares | Sep. 30, 2018USD ($)shares | Mar. 31, 2019shares | Dec. 31, 2018USD ($)shares | |
Share-Based Compensation | |||||||
Number of tranches | tranche | 3 | ||||||
Number of performance milestones | Milestone | 3 | 2 | |||||
Share-based compensation expense | $ 13,019,000 | $ 11,746,000 | $ 36,538,000 | $ 39,599,000 | |||
Research and development | |||||||
Share-Based Compensation | |||||||
Share-based compensation expense | 6,458,000 | 6,294,000 | 18,338,000 | 19,757,000 | |||
Selling, general and administrative | |||||||
Share-Based Compensation | |||||||
Share-based compensation expense | $ 6,561,000 | $ 5,452,000 | $ 18,200,000 | $ 19,842,000 | |||
Performance-Contingent Awards - RSAs | |||||||
Share-Based Compensation | |||||||
Shares approved for grant (in shares) | shares | 1,575,000 | ||||||
Vesting period | 5 years | ||||||
Awards outstanding (in shares) | shares | 776,250 | 978,750 | 776,250 | 978,750 | |||
Performance-Contingent Awards - RSUs | |||||||
Share-Based Compensation | |||||||
Shares approved for grant (in shares) | shares | 60,000 | 135,000 | 60,000 | 60,000 | |||
Awards outstanding (in shares) | shares | 101,250 | 101,250 | 101,250 | 101,250 | |||
Maximum potential expense | Employee | |||||||
Share-Based Compensation | |||||||
Shares approved for grant (in shares) | shares | 3,000 | ||||||
Maximum potential expense | Performance-Contingent Awards - RSUs | |||||||
Share-Based Compensation | |||||||
Share-based compensation expense | $ 1,000,000 | $ 1,600,000 | |||||
Maximum potential expense | RSUs | Employee | Maximum | |||||||
Share-Based Compensation | |||||||
Compensation expense | $ 75,000 | ||||||
First tranche | |||||||
Share-Based Compensation | |||||||
Share-based compensation expense | 300,000 | $ 1,800,000 | |||||
Second tranche | |||||||
Share-Based Compensation | |||||||
Share-based compensation expense | $ 700,000 | $ 47,000 | 1,200,000 | $ 1,800,000 | |||
Second tranche | Maximum potential expense | |||||||
Share-Based Compensation | |||||||
Share-based compensation expense | 1,100,000 | ||||||
Second tranche | Maximum potential expense | Research and development | |||||||
Share-Based Compensation | |||||||
Share-based compensation expense | 400,000 | ||||||
Second tranche | Maximum potential expense | Selling, general and administrative | |||||||
Share-Based Compensation | |||||||
Share-based compensation expense | 700,000 | ||||||
Third tranche | |||||||
Share-Based Compensation | |||||||
Share-based compensation expense | 0 | ||||||
Third tranche | Maximum potential expense | |||||||
Share-Based Compensation | |||||||
Share-based compensation expense | 12,800,000 | ||||||
Third tranche | Maximum potential expense | Research and development | |||||||
Share-Based Compensation | |||||||
Share-based compensation expense | 4,400,000 | ||||||
Third tranche | Maximum potential expense | Selling, general and administrative | |||||||
Share-Based Compensation | |||||||
Share-based compensation expense | $ 8,400,000 | ||||||
First and second performance milestones | Performance-Contingent Awards - RSUs | |||||||
Share-Based Compensation | |||||||
Shares approved for grant (in shares) | shares | 60,000 | 60,000 | |||||
First and second performance milestones | Maximum potential expense | Performance-Contingent Awards - RSUs | |||||||
Share-Based Compensation | |||||||
Share-based compensation expense | $ 800,000 | ||||||
Second and third performance milestones | Performance-Contingent Awards - RSUs | |||||||
Share-Based Compensation | |||||||
Shares approved for grant (in shares) | shares | 60,000 | 60,000 | |||||
Second and third performance milestones | Maximum potential expense | Performance-Contingent Awards - RSUs | |||||||
Share-Based Compensation | |||||||
Share-based compensation expense | $ 300,000 |
Income Taxes - Components of pr
Income Taxes - Components of provision for income taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Provision for income tax benefit (expense) | ||
Income tax expense | $ 5.6 | $ 5.3 |
UK income tax (as a percent) | 20.00% |
Reduction in Workforce (Details
Reduction in Workforce (Details) $ in Millions | 1 Months Ended | 9 Months Ended |
Jan. 31, 2019individual | Sep. 30, 2019USD ($) | |
Reduction in Workforce | ||
Number of headcount reduced by Company on sale of VIBATIV | individual | 51 | |
Severance related charges | $ | $ 3.5 |