Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2020 | Jul. 31, 2020 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2020 | |
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 $0.00001 Par Value | |
Trading Symbol | TBPH | |
Security Exchange Name | NASDAQ | |
Entity Common Stock, Shares Outstanding | 63,515,410 | |
Entity Central Index Key | 0001583107 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 104,735 | $ 58,064 |
Short-term marketable securities | 333,605 | 222,767 |
Receivables from collaborative arrangements | 11,413 | 11,996 |
Receivables from licensing arrangements | 10,000 | |
Amounts due from TRC, LLC | 35,509 | 28,574 |
Other prepaid and current assets | 13,124 | 7,087 |
Total current assets | 498,386 | 338,488 |
Property and equipment, net | 14,433 | 12,644 |
Long-term marketable securities | 4,985 | |
Operating lease assets | 45,184 | 46,604 |
Tax receivable | 3,986 | 3,682 |
Restricted cash | 833 | 833 |
Other assets | 1,508 | 1,590 |
Total assets | 564,330 | 408,826 |
Current liabilities: | ||
Accounts payable | 10,065 | 4,758 |
Accrued personnel-related expenses | 26,757 | 28,180 |
Accrued clinical and development expenses | 25,229 | 17,587 |
Accrued interest payable | 3,702 | 5,659 |
Non-recourse notes due 2033, net | 9,851 | |
Operating lease liabilities | 8,741 | 7,762 |
Deferred revenue | 25,062 | 31,575 |
Other accrued liabilities | 7,018 | 6,331 |
Total current liabilities | 106,574 | 111,703 |
Convertible senior notes due 2023, net | 226,427 | 225,890 |
Non-recourse notes due 2035, net | 375,266 | |
Non-recourse notes due 2033, net | 219,300 | |
Long-term operating lease liabilities | 47,631 | 47,725 |
Long-term deferred revenue | 1,154 | 6,761 |
Other long-term liabilities | 9,614 | 21,287 |
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; 63,515 and 57,015 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively | 1 | 1 |
Additional paid-in capital | 1,191,923 | 1,024,614 |
Accumulated other comprehensive income | 280 | 145 |
Accumulated deficit | (1,394,540) | (1,248,600) |
Total shareholders' deficit | (202,336) | (223,840) |
Total liabilities and shareholders' deficit | $ 564,330 | $ 408,826 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
CONSOLIDATED BALANCE SHEETS | ||
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 | 63,515 | 57,015 |
Ordinary shares, outstanding shares | 63,515 | 57,015 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Revenue: | ||||
Revenue | $ 15,008,000 | $ 26,150,000 | $ 34,870,000 | $ 31,488,000 |
Costs and expenses: | ||||
Research and development (1) | 62,404,000 | 46,399,000 | 128,417,000 | 100,217,000 |
Selling, general and administrative (1) | 24,780,000 | 22,227,000 | 51,105,000 | 47,413,000 |
Total costs and expenses | 87,184,000 | 68,626,000 | 179,522,000 | 147,630,000 |
Loss from operations | (72,176,000) | (42,476,000) | (144,652,000) | (116,142,000) |
Income from investment in TRC, LLC | 21,381,000 | 8,366,000 | 34,896,000 | 14,595,000 |
Interest expense | (11,391,000) | (7,901,000) | (21,332,000) | (15,759,000) |
Loss on extinguishment of debt | (15,464,000) | |||
Interest and other income (expense), net | (662,000) | 2,374,000 | 798,000 | 5,169,000 |
Loss before income taxes | (62,848,000) | (39,637,000) | (145,754,000) | (112,137,000) |
Provision for income tax expense | (39,000) | (201,000) | (186,000) | (281,000) |
Net loss | (62,887,000) | (39,838,000) | (145,940,000) | (112,418,000) |
Net unrealized gain (loss) on available-for-sale investments | (232,000) | 165,000 | 135,000 | 295,000 |
Total comprehensive loss | $ (63,119,000) | $ (39,673,000) | $ (145,805,000) | $ (112,123,000) |
Net loss per share: | ||||
Basic and diluted net loss per share (in dollars per share) | $ (1) | $ (0.72) | $ (2.39) | $ (2.04) |
Shares used to compute basic and diluted net loss per share (in shares) | 62,861 | 55,529 | 61,162 | 55,235 |
Share-based compensation expense | $ 16,585,000 | $ 11,298,000 | $ 31,861,000 | $ 23,519,000 |
Research and development | ||||
Net loss per share: | ||||
Share-based compensation expense | 8,098,000 | 5,720,000 | 15,963,000 | 11,880,000 |
Selling, general and administrative | ||||
Net loss per share: | ||||
Share-based compensation expense | 8,487,000 | 5,578,000 | 15,898,000 | 11,639,000 |
Collaborative revenue | ||||
Revenue: | ||||
Revenue | 5,488,000 | 7,493,000 | 12,120,000 | 12,831,000 |
Licensing revenue | ||||
Revenue: | ||||
Revenue | 18,500,000 | 1,500,000 | 18,500,000 | |
Mylan collaboration agreement | ||||
Revenue: | ||||
Revenue | $ 9,520,000 | $ 157,000 | $ 21,250,000 | $ 157,000 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' DEFICIT - USD ($) shares in Thousands, $ in Thousands | Ordinary Shares | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Total |
Balances at Dec. 31, 2018 | $ 1 | $ 960,721 | $ (166) | $ (1,012,145) | $ (51,589) |
Balances (in shares) at Dec. 31, 2018 | 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 | 23,519 | 23,519 | |||
Issuance of restricted shares (in shares) | 689 | ||||
Option exercises | 2,545 | 2,545 | |||
Option exercises (in shares) | 122 | ||||
Repurchase of shares to satisfy tax withholding | (2,181) | (2,181) | |||
Net unrealized gain/loss on marketable securities | 295 | 295 | |||
Net loss | (112,418) | (112,418) | |||
Balances at Jun. 30, 2019 | $ 1 | 987,209 | 129 | (1,124,563) | (137,224) |
Balances (in shares) at Jun. 30, 2019 | 56,637 | ||||
Balances at Mar. 31, 2019 | $ 1 | 971,508 | (36) | (1,084,725) | (113,252) |
Balances (in shares) at Mar. 31, 2019 | 56,122 | ||||
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 | 11,298 | 11,298 | |||
Issuance of restricted shares (in shares) | 263 | ||||
Option exercises | 2,292 | 2,292 | |||
Option exercises (in shares) | 107 | ||||
Repurchase of shares to satisfy tax withholding | (494) | (494) | |||
Net unrealized gain/loss on marketable securities | 165 | 165 | |||
Net loss | (39,838) | (39,838) | |||
Balances at Jun. 30, 2019 | $ 1 | 987,209 | 129 | (1,124,563) | (137,224) |
Balances (in shares) at Jun. 30, 2019 | 56,637 | ||||
Balances at Dec. 31, 2019 | $ 1 | 1,024,614 | 145 | (1,248,600) | $ (223,840) |
Balances (in shares) at Dec. 31, 2019 | 57,015 | 57,015 | |||
Increase (Decrease) in Stockholders' Equity | |||||
Net proceeds from sale of ordinary shares | 139,915 | $ 139,915 | |||
Net proceeds from sale of ordinary shares (in shares) | 5,500 | ||||
Proceeds from ESPP purchases | 2,545 | 2,545 | |||
Proceeds from ESPP purchases (in shares) | 168 | ||||
Employee share-based compensation expense | 31,861 | 31,861 | |||
Issuance of restricted shares (in shares) | 1,097 | ||||
Option exercises | 936 | 936 | |||
Option exercises (in shares) | 41 | ||||
Repurchase of shares to satisfy tax withholding | (7,948) | (7,948) | |||
Repurchase of shares to satisfy tax withholding (in shares) | (306) | ||||
Net unrealized gain/loss on marketable securities | 135 | 135 | |||
Net loss | (145,940) | (145,940) | |||
Balances at Jun. 30, 2020 | $ 1 | 1,191,923 | 280 | (1,394,540) | $ (202,336) |
Balances (in shares) at Jun. 30, 2020 | 63,515 | 63,515 | |||
Balances at Mar. 31, 2020 | $ 1 | 1,173,204 | 512 | (1,331,653) | $ (157,936) |
Balances (in shares) at Mar. 31, 2020 | 63,004 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Proceeds from ESPP purchases | 2,545 | 2,545 | |||
Proceeds from ESPP purchases (in shares) | 168 | ||||
Employee share-based compensation expense | 16,585 | 16,585 | |||
Issuance of restricted shares (in shares) | 353 | ||||
Option exercises | 733 | 733 | |||
Option exercises (in shares) | 33 | ||||
Repurchase of shares to satisfy tax withholding | (1,144) | (1,144) | |||
Repurchase of shares to satisfy tax withholding (in shares) | (43) | ||||
Net unrealized gain/loss on marketable securities | (232) | (232) | |||
Net loss | (62,887) | (62,887) | |||
Balances at Jun. 30, 2020 | $ 1 | $ 1,191,923 | $ 280 | $ (1,394,540) | $ (202,336) |
Balances (in shares) at Jun. 30, 2020 | 63,515 | 63,515 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Operating activities | ||
Net loss | $ (145,940) | $ (112,418) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 4,034 | 2,867 |
Amortization and accretion income, net | (854) | (1,696) |
Share-based compensation | 31,861 | 23,519 |
Amortization of right-of-use assets | 1,420 | 2,016 |
Amounts due from TRC, LLC | (6,934) | (14,595) |
Interest shortfall on 2035 notes, net | 1,093 | |
Loss on extinguishment of debt | 15,464 | |
Other | (4) | 53 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 389 | |
Receivables from collaborative and licensing arrangements | 10,583 | 9,074 |
Other prepaid and current assets | (6,039) | (2,407) |
Tax receivable | (300) | (3,700) |
Other assets | (73) | 2 |
Accounts payable | 6,012 | (5,491) |
Accrued personnel-related expenses, accrued clinical and development expenses, and other accrued liabilities | (5,753) | (15,580) |
Accrued interest payable | (1,957) | 2,672 |
Deferred revenue | (12,120) | (12,826) |
Operating lease liabilities | 885 | (1,371) |
Other long-term liabilities | 175 | 269 |
Net cash used in operating activities | (108,447) | (129,223) |
Investing activities | ||
Purchases of property and equipment | (3,322) | (1,796) |
Purchases of marketable securities | (280,495) | (208,028) |
Maturities of marketable securities | 155,703 | 131,368 |
Proceeds from the sale of marketable securities | 19,927 | |
Proceeds from the sale of property and equipment | 1 | |
Proceeds from the sale of VIBATIV business, net | 5,000 | |
Net cash used in investing activities | (108,186) | (73,456) |
Financing activities | ||
Proceeds from the sale of ordinary shares, net | 139,915 | |
Proceeds from issuance of 2035 notes, net | 380,000 | |
Payment of issuance costs on 2035 notes | (5,326) | |
Payment of redemption premium on 2033 notes | (11,470) | |
Principal payment on 2033 notes | (235,347) | |
Proceeds from ESPP purchases | 2,545 | 2,605 |
Proceeds from option exercises | 936 | 2,545 |
Repurchase of shares to satisfy tax withholding | (7,948) | (2,181) |
Net cash provided by financing activities | 263,305 | 2,969 |
Net increase (decrease) in cash, cash equivalents, and restricted cash | 46,671 | (199,710) |
Cash, cash equivalents, and restricted cash at beginning of period | 58,897 | |
Cash, cash equivalents, and restricted cash at end of period | 105,568 | 179,144 |
Supplemental disclosure of cash flow information | ||
Cash paid for interest | 20,287 | 11,753 |
Cash paid for income taxes, net | $ 14 | 21 |
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 | 6 Months Ended |
Jun. 30, 2020 | |
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 June 30, 2020, and the three and six months ended June 30, 2020 and 2019 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 (“US”) generally accepted accounting principles (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated December 31, 2019 financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the Securities and Exchange Commission (“SEC”) on February 27, 2020. The results for the three and six months ended June 30, 2020 are not necessarily indicative of the results to be expected for the year ending December 31, 2020, 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, 2019. Recently Adopted Accounting Pronouncements 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 became effective on January 1, 2020, and the adoption did not have a material impact on the Company’s condensed consolidated financial statements and related disclosures primarily due to the high credit quality and short-term maturities of the Company’s marketable securities. 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 became effective on January 1, 2020, and the adoption did not have a material impact on the Company’s condensed consolidated financial statements and related disclosures. However, the adoption of ASU 2018-15 may result in an increase in capitalized assets related to qualifying cloud computing arrangement implementation costs in the future. 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 Topic 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 became effective on January 1, 2020, and the Company elected to adopt ASU 2018-18, retrospectively, only for contracts that were not completed as of January 1, 2020. The adoption of ASU 2018-18 did not have a material impact on the Company’s condensed consolidated financial statements and related disclosures. Recently Issued Accounting Pronouncements Not Yet Adopted On December 18, 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes Income Taxes The Company has evaluated other recently issued accounting pronouncements and does not currently believe that any of these pronouncements will have a material impact on its condensed consolidated financial statements and related disclosures. |
Net Loss per Share
Net Loss per Share | 6 Months Ended |
Jun. 30, 2020 | |
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 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 June 30, Six Months Ended June 30, (In thousands) 2020 2019 2020 2019 Numerator: Net loss $ (62,887) $ (39,838) $ (145,940) $ (112,418) Denominator: Weighted-average common shares outstanding 63,275 56,407 61,676 56,114 Less: weighted-average common shares subject to forfeiture (414) (878) (514) (879) Weighted-average common shares used to compute basic and diluted net loss per share 62,861 55,529 61,162 55,235 Basic and diluted net loss per share $ (1.00) $ (0.72) $ (2.39) $ (2.04) For the three and six months ended June 30, 2020 and 2019, 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 June 30, Six Months Ended June 30, (In thousands) 2020 2019 2020 2019 Share issuances under equity incentive plans and ESPP 5,713 7,468 5,741 6,227 Share issuances upon the conversion of convertible senior notes 6,676 6,676 6,676 6,676 Total 12,389 14,144 12,417 12,903 As of June 30, 2019, there were 468,000 shares subject to performance-based vesting criteria which have been excluded from the ordinary equivalent shares table above, and there were no such shares excluded as of June 30, 2020. GlaxoSmithKline plc Senior Notes Offering % over the volume weighted average price of Theravance Biopharma’s ordinary shares on June 17, 2020. |
Revenue
Revenue | 6 Months Ended |
Jun. 30, 2020 | |
Revenue | |
Revenue | 3. Revenue Revenue from Collaborative Arrangements The Company recognized revenues from its collaborative arrangements as follows: Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2020 2019 2020 2019 Janssen $ 5,479 $ 7,392 $ 12,101 $ 12,715 Other 9 101 19 116 Total collaboration revenue $ 5,488 $ 7,493 $ 12,120 $ 12,831 Changes in Deferred Revenue Balances 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 June 30, Six Months Ended June 30, (In thousands) 2020 2019 2020 2019 Collaboration revenue recognized in the period from: Amounts included in deferred revenue at the beginning of the period $ 5,488 $ 7,493 $ 12,120 $ 12,825 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 six months ended June 30, 2020, the Company recognized $5.5 million and $12.1 million, respectively, as revenue from collaboration arrangements related to the Janssen Agreement. The remaining transaction price of $25.7 million, related to the $100.0 million upfront payment, 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). Consequently, delays in trial activity and/or changes to the total budget will impact the timing and amount of revenue recognized in any given reporting period. For the three and six months ended June 30, 2020, the Company incurred $9.0 million and $19.2 million, respectively, in research and development costs related to the Janssen Agreement. For the three and six months ended June 30, 2019, the Company incurred $9.0 million and $17.7 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 of $15.0 million for the achievement of 50% enrollment in the related Phase 3 twelve-month safety study. As of June 30, 2020, excluding the aggregate $30.0 million payment noted above, 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 and partially within the scope of ASC 606, as the parties are active participants and exposed to the risks and rewards of the collaborative activity with a unit of account provided to Mylan as a customer. Under the terms of the Mylan Agreement, Mylan was responsible for reimbursement of the Company’s costs related to the registrational program up until the approval of the first new drug application in November 2018, thereafter, R&D expenses are shared. Performing R&D services for reimbursement is considered to be a collaborative activity under the scope of ASC 808. Reimbursable program costs are recognized proportionately with the performance of the underlying services and accounted for as reductions to R&D expense. For this unit of account, the Company did not recognize revenue or analogize to ASC 606 and, as such, the reimbursable program costs are excluded from the transaction price. The Company determined the license to develop and commercialize revefenacin to be a unit of account for which Mylan is a customer and a separate performance obligation. The joint steering committee participation was also determined to be a performance obligation for which the Company analogized to ASC 606 to recognize revenue. Using the concepts from ASC 606, 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 received in 2015 related to an ordinary share purchase agreement with Mylan; 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 prices. 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 June 30, 2020, $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. In accordance with the applicable accounting guidance, amounts receivable mounts payable to Mylan in connection with the commercialization of YUPELRI are recorded within the condensed consolidated statements of operations as a collaboration loss within selling, general and administrative expenses. Any reimbursement from Mylan attributed to the 65% cost-sharing of the Company’s R&D expenses 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 ordinary activities. The following YUPELRI-related amounts were recognized in the Company’s condensed consolidated statements of operations: Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2020 2019 2020 2019 Mylan collaboration agreement - Amounts receivable from Mylan $ 9,520 $ 157 $ 21,250 $ 157 Collaboration loss - Amounts payable to Mylan $ — $ 181 $ — $ 1,582 Reimbursement of R&D Expense As noted above, 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 June 30, Six Months Ended June 30, (In thousands) 2020 2019 2020 2019 Janssen $ 1,563 $ 784 $ 2,770 $ 2,195 Mylan 351 31 1,622 234 Total reduction to R&D expense $ 1,914 $ 815 $ 4,392 $ 2,429 Revenue from Licensing Arrangements Mylan 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 and 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 is 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 In March 2020, the Company earned a $1.5 million development milestone payment for the acceptance of a clinical trial application associated with the use of YUPELRI monotherapy in China and adjacent territories. Pfizer Under the Pfizer Agreement, Pfizer has an exclusive license to develop, manufacture and commercialize certain compounds for all uses other than gastrointestinal, ophthalmic and respiratory applications. Under the terms of the Pfizer Agreement, the Company received an upfront cash payment of $10.0 million and is eligible to receive up to an additional $240.0 million in development and sales milestone payments from Pfizer. In addition, the Company will be eligible to receive a tiered royalty on worldwide net sales of any potential products under the license at percentage royalty rates ranging from middle single-digits to low double-digits. The future potential milestones payable under the Pfizer Amendment were not included in the transaction price, as they were all determined to be fully constrained following the concepts of ASC 606. As part of the Company’s evaluation of the development milestones constraint, the Company determined that the achievement of such milestones is contingent upon success in future clinical trials and regulatory approvals which are not within its control and uncertain at this stage. The Company expects that the sales-based milestone payments will be recognized when the sales occur or the milestone is achieved. The Company will re-evaluate the transaction price each quarter and as uncertain events are resolved or other changes in circumstances occur. |
Cash, Cash Equivalents, and Res
Cash, Cash Equivalents, and Restricted Cash | 6 Months Ended |
Jun. 30, 2020 | |
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 current period and comparable prior year period condensed consolidated balance sheets that sum to the total of the same such amount shown on the condensed consolidated statements of cash flows. June 30, (In thousands) 2020 2019 Cash and cash equivalents $ 104,735 $ 178,311 Restricted cash 833 833 Total cash, cash equivalents, and restricted cash shown on the condensed $ 105,568 $ 179,144 Restricted cash pertained to certain lease agreements and letters of credit by which the Company has pledged cash and cash equivalents as collateral. The cash-related amounts reported in the table above exclude the Company’s investments in short and long-term marketable securities that are reported separately on the condensed consolidated balance sheets. |
Investments and Fair Value Meas
Investments and Fair Value Measurements | 6 Months Ended |
Jun. 30, 2020 | |
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 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. June 30, 2020 Gross Gross Amortized Unrealized Unrealized Estimated (In thousands) Cost Gains Losses Fair Value US government securities Level 1 $ 189,878 $ 211 $ (2) $ 190,087 US government agency securities Level 2 99,877 37 — 99,914 Corporate notes Level 2 2,616 9 — 2,625 Commercial paper Level 2 60,949 27 (2) 60,974 Marketable securities 353,320 284 (4) 353,600 Money market funds Level 1 30,637 — — 30,637 Total $ 383,957 $ 284 $ (4) $ 384,237 December 31, 2019 Gross Gross Amortized Unrealized Unrealized Estimated (In thousands) Cost Gains Losses Fair Value US government securities Level 1 $ 100,746 $ 108 $ — $ 100,854 Corporate notes Level 2 25,466 9 (1) 25,474 Commercial paper Level 2 112,066 31 (2) 112,095 Marketable securities 238,278 148 (3) 238,423 Money market funds Level 1 35,736 — — 35,736 Total $ 274,014 $ 148 $ (3) $ 274,159 As of June 30, 2020, all of the available-for-sale securities had contractual maturities within 10 months and the weighted-average maturity of marketable securities was approximately 4 months. There have been no material changes to the Company’s valuation techniques during the three and six months ended June 30, 2020. Available-for-sale debt securities with unrealized losses are summarized below: June 30, 2020 Less than 12 Months Greater than 12 Months Total Gross Gross Gross Estimated Unrealized Estimated Unrealized Estimated Unrealized (In thousands) Fair Value Losses Fair Value Losses Fair Value Losses US government securities $ 49,974 $ (1) $ — $ — $ 49,974 $ (1) Commercial paper 9,991 (2) — — 9,991 (2) Total $ 59,965 $ (3) $ — $ — $ 59,965 $ (3) December 31, 2019 Less than 12 Months Greater than 12 Months Total Gross Gross Gross Estimated Unrealized Estimated Unrealized Estimated Unrealized (In thousands) Fair Value Losses Fair Value Losses Fair Value Losses Corporate notes $ 5,507 $ (1) $ — $ — $ 5,507 $ (1) Commercial paper 28,137 (2) — — 28,137 (2) Total $ 33,644 $ (3) $ — $ — $ 33,644 $ (3) The Company invests primarily in high credit quality and short-term maturity T he Company reviewed its available-for-sale debt securities and determined that there were no credit-related losses to be recognized as of June 30, 2020. As of June 30, 2020, the Company’s accumulated other comprehensive income on its condensed consolidated balance sheets consisted of net unrealized gains or losses on available-for-sale investments. For the three and six months ended June 30, 2020, the Company sold marketable securities for total proceeds of $5.0 million and $19.9 million, respectively, and recognized minimal net realized gains from the sales based on the specific identification method. The Company did not sell any of its marketable securities for the three and six months ended June 30, 2019. |
Long-Term Debt
Long-Term Debt | 6 Months Ended |
Jun. 30, 2020 | |
Long-Term Debt | |
Long-Term Debt | 6. Long-Term Debt 9.5% Non-Recourse Notes Due 2035 On February 21, 2020, Theravance Biopharma R&D, Inc. (“Theravance R&D”), a wholly-owned subsidiary of the Company, and Triple Royalty Sub II LLC (the “Issuer II” or “Triple II”), a wholly-owned subsidiary of Theravance Biopharma R&D, entered into certain note purchase agreements (“Note Purchase Agreements”) with certain note purchasers (“Note Purchasers”), relating to the private placement by Issuer II of $400.0 million 9.5% Fixed Rate Term Notes due on or before 2035 (the “Non-Recourse 2035 Notes”). Ninety-five percent of the Non-Recourse 2035 Notes were sold to the Note Purchasers pursuant to the Note Purchase Agreements. The remaining 5% of the Non-Recourse 2035 Notes (the “Retained Notes”) were retained by the Company to comply with Regulation RR — Credit Risk Retention (17 C.F.R. Part 246). The Retained Notes are eliminated in the Company’s condensed consolidated financial statements. The transaction closed on February 28, 2020. The Non-Recourse 2035 Notes are secured by all of Issuer II’s right, title and interest as a holder of certain membership interests (the “Issuer II Class C Units”) in Theravance Respiratory Company, LLC (“TRC”). TRC LLC holds the right to receive upward-tiering royalties ranging from 6.5% to 10% on worldwide net sales of TRELEGY, and the Company holds an 85% economic interest in TRC LLC. The Issuer II Class C Units represent 75% of the Company's 85% economic interest, which equates to 63.75% of the economic interests in TRC LLC. The source of principal and interest payments for the Non-Recourse 2035 Notes are the future royalty payments generated from the TRELEGY program, and as a result, the holders of the Non-Recourse 2035 Notes have no recourse against the Company even if the TRELEGY payments are insufficient to cover the principal and interest payments for the Non-Recourse 2035 Notes. Prior to and including the December 5, 2024 payment date, in the event that the distributions received by the Issuer II from TRC in a quarter is less than the interest accrued for that quarter, the principal amount of the Non-Recourse 2035 Notes will increase by the interest shortfall amount for that quarter. During the three months ended June 30, 2020, the principal amount of the Non-Recourse 2035 Notes increased by $1.15 million which represented the shortfall between the distributions received from TRC and the total interest payment due in June 2020. While the holders of the Non-Recourse 2035 Notes have no recourse against the Company, the terms of the Non-Recourse 2035 Notes also provide that the Company, at its option, may satisfy the quarterly interest payment obligations by making a capital contribution to the Issuer II. The Non-Recourse 2035 Notes are not convertible into Company equity and have no security interest in nor rights under any agreement with Glaxo Group Limited or one of its affiliates (“GSK”). See “Note 7. Theravance Respiratory Company, LLC” TRELEGY TRELEGY The portion of the Non-Recourse 2035 Notes classified as a current liability, if any, is based on the amount of royalties received, or receivable, as of June 30, 2020, that are expected to be used to make a principal repayment on the Non-Recourse 2035 Notes within the next 12 months. The following is a summary of the carrying value of the Non-Recourse 2035 Notes as of June 30, 2020: June 30, (In thousands) 2020 9.5% Non-Recourse 2035 Notes Principal amount $ 401,150 Less: (20,057) Unamortized debt issuance costs - (4,124) Unamortized debt issuance costs - Modified (1,703) Total $ 375,266 As of June 30, 2020, the net principal and estimated fair value of the Non-Recourse 2035 Notes were both $381.1 million. The inputs to determine fair value of the Non-Recourse 2035 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. 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”). On February 28, 2020, the Company refinanced the Non-Recourse 2033 Notes by issuing the Non-Recourse 2035 Notes and a portion of those proceeds were used to repay, in full, the remaining outstanding balance of the Company’s Non-Recourse 2033 Notes. Pursuant to the terms of the Non-Recourse 2033 Notes, the Company paid a debt redemption premium of 5% of the outstanding principal as of the refinancing date. The refinancing of the Non-Recourse 2033 Notes involved multiple lenders who were considered members of a loan syndicate. To determine whether the refinancing was to be accounted for as a debt extinguishment or modification, the Company considered whether the lenders involved in the Non-Recourse 2033 Notes and the Non-Recourse 2035 Notes remained the same or changed and whether the change in debt terms was substantial. The debt terms are considered substantially different if the present value of the cash inflows and outflows of the Non-Recourse 2035 Notes, including all principal increases and lender fees on the refinancing date, was at least 10% different from the present value of the remaining cash inflows and outflows of the Non-Recourse 2033 Notes (the “10% Test”). The Company performed the 10% Test for each individual lender participating in the loan syndication by assuming the exercise and non-exercise of the prepayment option. The cash flow assumption generating the smaller change was used as the basis for determining whether the 10% threshold was met. For existing lenders who participated in the Non-Recourse 2035 Notes as part of the new loan syndicate, the refinancing was accounted for as an extinguishment or a modification depending upon whether the change in the cash flows was more or less than 10%, respectively. The lenders from the Non-Recourse 2033 Note offering who did not participate in the Non-Recourse 2035 Notes were accounted for as a debt extinguishment. For debt determined to be extinguished, the total unamortized deferred financing costs and the associated redemption premium of $15.5 million were expensed as “Loss on extinguishment of debt” within the condensed consolidated financial statements of operations for the six months ended June 30, 2020. In addition, $0.3 million of new third-party costs were expensed, and $4.4 million of new creditor fees were capitalized as debt discount. For debt determined to be modified, the related unamortized deferred financing costs of $1.8 million, as of February 28, 2020, continue to be amortized, and $0.5 million of new creditor fees were expensed for the six months ended June 30, 2020. 3.25% Convertible Senior Notes Due 2023 The Company has $230.0 million of 3.25% convertible senior notes due in 2023 (“Convertible Senior 2023 Notes”) outstanding as of June 30, 2020 with an estimated fair value of $218.4 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 June 30, 2020. 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. |
Theravance Respiratory Company,
Theravance Respiratory Company, LLC | 6 Months Ended |
Jun. 30, 2020 | |
Theravance Respiratory Company, LLC | |
Theravance Respiratory Company, LLC | 7. Theravance Respiratory Company, LLC Through the Company’s 85% equity interest in TRC, the Company is entitled to receive an 85% economic interest in any future payments made by GSK under the strategic alliance agreement and under the portion of the collaboration agreement assigned to TRC (net of TRC expenses paid and the amount of cash, if any, expected to be used by TRC pursuant to the TRC LLC Agreement over the next four fiscal quarters). The drug programs assigned to TRC include Trelegy In May 2014, the Company entered into the TRC LLC Agreement with Innoviva, Inc. (“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 $35.5 million and $28.6 million as of June 30, 2020 and December 31, 2019, 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 royalties, net of any expenses, is For the three and six months ended June 30, 2020, the Company recognized net royalty income of $21.4 million and $34.9 million, respectively, 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 $0.4 million and $0.6 million for the three and six months ended June 30, 2020, respectively. For the three and six months ended June 30, 2019, the Company recognized net royalty income of $8.4 million and $14.6 million, respectively, after the deducting the Company’s share of minimal TRC expenses. On June 10, 2020, the Company disclosed in a Form 8-K its objections to TRC and Innoviva, as the manager of TRC, regarding TRC’s proposed use of funds to invest in certain privately-held companies. The Company has objected to the withholding of funds by TRC for these and similar investments. On July 16, 2020, Innoviva and TRC filed a complaint in Delaware Chancery Court seeking an order establishing that the arbitration award from the parties’ 2019 dispute conclusively established that (a) Innoviva possesses the authority as manager of TRC to cause TRC to make such investments and (b) Innoviva possesses the authority as manager of TRC to cause TRC to reserve cash to make such investments. The Court directed the parties to refer certain relevant questions raised by the complaint to the arbitrator in the 2019 dispute between the parties, who in turn determined that the 2019 proceedings did not resolve the issues currently in dispute. On August 5, 2020, Innoviva and TRC voluntarily dismissed the complaint, without prejudice. The Company is pursuing and intends to continue to pursue the protection of the interests of the Company in this matter consistent with the dispute resolution procedures of the TRC LLC Agreement, including, if necessary, the initiation of a new arbitration proceeding. |
Share-Based Compensation
Share-Based Compensation | 6 Months Ended |
Jun. 30, 2020 | |
Share-Based Compensation | |
Share-Based Compensation | 8 . 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 June 30, Six Months Ended June 30, (In thousands) 2020 2019 2020 2019 Research and development $ 8,098 $ 5,720 $ 15,963 $ 11,880 Selling, general and administrative 8,487 5,578 15,898 11,639 Total share-based compensation expense $ 16,585 $ 11,298 $ 31,861 $ 23,519 Performance-Contingent Awards In 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 should increase shareholder value. The awards have dual triggers of vesting based upon the achievement of these goals and continued employment. Expense associated with these awards may be recognized during the years 2016 to 2020 depending on the probability of meeting certain 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 awards are broken into three separate tranches. As of June 30, 2020, there were 414,000 of these performance-contingent RSAs and 54,000 of these performance-contingent RSUs outstanding, and as of June 30, 2019, there were 877,500 of these performance-contingent RSAs and 101,250 of these performance-contingent RSUs outstanding. The performance conditions associated with the first tranche of these awards were completed in the second quarter of 2018, and the expense associated with the first tranche was fully recognized in 2018. The performance conditions associated with the second tranche of these awards were completed in the first quarter of 2019, and as of March 31, 2020, the expense associated with this second tranche was fully recognized. For the six months ended June 30, 2020, the Company recognized $0.4 million of share-based compensation expense related to the second tranche of these awards. For three and six months ended June 30, 2019, the Company recognized ($0.3) million and $0.5 million, respectively, of share-based compensation expense related to the second tranche of these awards. In the first quarter of 2020, the performance conditions associated with the remaining third tranche were completed and, as a result, the Company recognized $0.6 million and $1.3 million of share-based compensation expense related to these awards for the three and six months ended June 30, 2020, respectively. As of June 30, 2020, the maximum remaining expense associated with the third tranche is $1.7 million (allocated as $0.6 million for research and development expense and $1.1 million for selling, general and administrative expense) and will be amortized through the first quarter of 2021. Separate from the performance-contingent awards described above, the Company periodically grants performance-contingent RSUs to individual employees. For the three and six months ended June 30, 2020, the Company recognized $0.5 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2020 | |
Income Taxes | |
Income Taxes | 9. Income Taxes The income tax expense was $39,000 and $186,000 for the three and six months ended June 30, 2020, respectively. The expense was primarily attributed to recording contingent liabilities for uncertain tax positions taken with respect to transfer pricing and tax credits. No provision for income taxes has been recognized on undistributed earnings of the Company’s foreign subsidiaries because it considers such earnings to be indefinitely reinvested. The Company follows the accounting guidance related to accounting for income taxes which requires that a company reduce its deferred tax assets by a valuation 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 June 30, 2020, 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 is currently under Internal Revenue Service (“IRS”) examination for the tax year ended December 31, 2017. The Company believes that an adequate provision has been made for any adjustments that may result from the tax examination. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act 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. |
Public Offering of Ordinary Sha
Public Offering of Ordinary Shares | 6 Months Ended |
Jun. 30, 2020 | |
Public Offering of Ordinary Shares | |
Public Offering of Ordinary Shares | 10. Public Offering of Ordinary Shares |
Organization and Summary of S_2
Organization and Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Organization and Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation The Company’s condensed consolidated financial information as of June 30, 2020, and the three and six months ended June 30, 2020 and 2019 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 (“US”) generally accepted accounting principles (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated December 31, 2019 financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the Securities and Exchange Commission (“SEC”) on February 27, 2020. The results for the three and six months ended June 30, 2020 are not necessarily indicative of the results to be expected for the year ending December 31, 2020, 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, 2019. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements 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 became effective on January 1, 2020, and the adoption did not have a material impact on the Company’s condensed consolidated financial statements and related disclosures primarily due to the high credit quality and short-term maturities of the Company’s marketable securities. 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 became effective on January 1, 2020, and the adoption did not have a material impact on the Company’s condensed consolidated financial statements and related disclosures. However, the adoption of ASU 2018-15 may result in an increase in capitalized assets related to qualifying cloud computing arrangement implementation costs in the future. 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 Topic 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 became effective on January 1, 2020, and the Company elected to adopt ASU 2018-18, retrospectively, only for contracts that were not completed as of January 1, 2020. The adoption of ASU 2018-18 did not have a material impact on the Company’s condensed consolidated financial statements and related disclosures. Recently Issued Accounting Pronouncements Not Yet Adopted On December 18, 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes Income Taxes The Company has evaluated other recently issued accounting pronouncements and does not currently believe that any of these pronouncements will have a material impact on its condensed consolidated financial statements and related disclosures. |
Net Loss per Share (Tables)
Net Loss per Share (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Net Loss per Share | |
Schedule of basic and diluted net loss per share | Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2020 2019 2020 2019 Numerator: Net loss $ (62,887) $ (39,838) $ (145,940) $ (112,418) Denominator: Weighted-average common shares outstanding 63,275 56,407 61,676 56,114 Less: weighted-average common shares subject to forfeiture (414) (878) (514) (879) Weighted-average common shares used to compute basic and diluted net loss per share 62,861 55,529 61,162 55,235 Basic and diluted net loss per share $ (1.00) $ (0.72) $ (2.39) $ (2.04) |
Schedule of anti-dilutive securities | Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2020 2019 2020 2019 Share issuances under equity incentive plans and ESPP 5,713 7,468 5,741 6,227 Share issuances upon the conversion of convertible senior notes 6,676 6,676 6,676 6,676 Total 12,389 14,144 12,417 12,903 |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Revenue | |
Schedule of revenue recognized from collaborative arrangements | Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2020 2019 2020 2019 Janssen $ 5,479 $ 7,392 $ 12,101 $ 12,715 Other 9 101 19 116 Total collaboration revenue $ 5,488 $ 7,493 $ 12,120 $ 12,831 |
Summary of changes in deferred revenue | Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2020 2019 2020 2019 Collaboration revenue recognized in the period from: Amounts included in deferred revenue at the beginning of the period $ 5,488 $ 7,493 $ 12,120 $ 12,825 Performance obligations satisfied in previous period — — — — |
Summary of profit sharing revenue and collaboration loss | Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2020 2019 2020 2019 Mylan collaboration agreement - Amounts receivable from Mylan $ 9,520 $ 157 $ 21,250 $ 157 Collaboration loss - Amounts payable to Mylan $ — $ 181 $ — $ 1,582 |
Summary of the reductions to R&D costs related to reimbursement payments | Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2020 2019 2020 2019 Janssen $ 1,563 $ 784 $ 2,770 $ 2,195 Mylan 351 31 1,622 234 Total reduction to R&D expense $ 1,914 $ 815 $ 4,392 $ 2,429 |
Cash, Cash Equivalents, and R_2
Cash, Cash Equivalents, and Restricted Cash (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Cash, Cash Equivalents, and Restricted Cash | |
Schedule of reconciliation of cash, cash equivalents, and restricted cash | June 30, (In thousands) 2020 2019 Cash and cash equivalents $ 104,735 $ 178,311 Restricted cash 833 833 Total cash, cash equivalents, and restricted cash shown on the condensed $ 105,568 $ 179,144 |
Investments and Fair Value Me_2
Investments and Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Investments and Fair Value Measurements | |
Schedule of available-for-sale securities | June 30, 2020 Gross Gross Amortized Unrealized Unrealized Estimated (In thousands) Cost Gains Losses Fair Value US government securities Level 1 $ 189,878 $ 211 $ (2) $ 190,087 US government agency securities Level 2 99,877 37 — 99,914 Corporate notes Level 2 2,616 9 — 2,625 Commercial paper Level 2 60,949 27 (2) 60,974 Marketable securities 353,320 284 (4) 353,600 Money market funds Level 1 30,637 — — 30,637 Total $ 383,957 $ 284 $ (4) $ 384,237 December 31, 2019 Gross Gross Amortized Unrealized Unrealized Estimated (In thousands) Cost Gains Losses Fair Value US government securities Level 1 $ 100,746 $ 108 $ — $ 100,854 Corporate notes Level 2 25,466 9 (1) 25,474 Commercial paper Level 2 112,066 31 (2) 112,095 Marketable securities 238,278 148 (3) 238,423 Money market funds Level 1 35,736 — — 35,736 Total $ 274,014 $ 148 $ (3) $ 274,159 |
Schedule of Available for sale debt securities with unrealized losses | June 30, 2020 Less than 12 Months Greater than 12 Months Total Gross Gross Gross Estimated Unrealized Estimated Unrealized Estimated Unrealized (In thousands) Fair Value Losses Fair Value Losses Fair Value Losses US government securities $ 49,974 $ (1) $ — $ — $ 49,974 $ (1) Commercial paper 9,991 (2) — — 9,991 (2) Total $ 59,965 $ (3) $ — $ — $ 59,965 $ (3) December 31, 2019 Less than 12 Months Greater than 12 Months Total Gross Gross Gross Estimated Unrealized Estimated Unrealized Estimated Unrealized (In thousands) Fair Value Losses Fair Value Losses Fair Value Losses Corporate notes $ 5,507 $ (1) $ — $ — $ 5,507 $ (1) Commercial paper 28,137 (2) — — 28,137 (2) Total $ 33,644 $ (3) $ — $ — $ 33,644 $ (3) |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Long-Term Debt | |
Schedule of long-term debt | The following is a summary of the carrying value of the Non-Recourse 2035 Notes as of June 30, 2020: June 30, (In thousands) 2020 9.5% Non-Recourse 2035 Notes Principal amount $ 401,150 Less: (20,057) Unamortized debt issuance costs - (4,124) Unamortized debt issuance costs - Modified (1,703) Total $ 375,266 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Share-Based Compensation | |
Schedule of share-based compensation expense included in the consolidated statements of operations | Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2020 2019 2020 2019 Research and development $ 8,098 $ 5,720 $ 15,963 $ 11,880 Selling, general and administrative 8,487 5,578 15,898 11,639 Total share-based compensation expense $ 16,585 $ 11,298 $ 31,861 $ 23,519 |
Net Loss per Share (Details)
Net Loss per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Numerator: | ||||
Net loss | $ (62,887) | $ (39,838) | $ (145,940) | $ (112,418) |
Denominator: | ||||
Weighted-average common shares outstanding | 63,275 | 56,407 | 61,676 | 56,114 |
Less: weighted-average common shares subject to forfeiture | (414) | (878) | (514) | (879) |
Weighted-average common shares used to compute basic and diluted net loss per share | 62,861 | 55,529 | 61,162 | 55,235 |
Basic and diluted net loss per share | $ (1) | $ (0.72) | $ (2.39) | $ (2.04) |
Net Loss per Share - Anti-dilut
Net Loss per Share - Anti-dilutive Securities (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Anti-Dilutive Securities | ||||
Anti-dilutive securities (in shares) | 12,389,000 | 14,144,000 | 12,417,000 | 12,903,000 |
Share issuances under equity incentive plans and ESPP | ||||
Anti-Dilutive Securities | ||||
Anti-dilutive securities (in shares) | 5,713,000 | 7,468,000 | 5,741,000 | 6,227,000 |
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) | 0 | 468,000 |
Net Loss per Share - GSK Notes
Net Loss per Share - GSK Notes (Details) - GSK Notes | Jun. 22, 2020USD ($)$ / sharesshares |
Principal amount | $ 280,336,000,000,000 |
Value of exchangable shares | $ 9,644,792,000,000 |
Shares issued on conversion of Notes | shares | 9,644,807 |
Percentage of principal amount of debt (as a percent) | 108.50% |
Initial exchange ratio | 34.4044 |
Denomination for conversion of debt | $ 1,000 |
Initial exchange price | $ / shares | $ 29.066 |
Premium over volume weighted average price (as a percent) | 35.00% |
Revenue - Revenue from Collabor
Revenue - Revenue from Collaborative Arrangements (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Collaboration revenue recognized in the period from: | ||||
Revenue from collaborative arrangements | $ 5,488 | $ 7,493 | $ 12,120 | $ 12,825 |
Janssen | ||||
Collaboration revenue recognized in the period from: | ||||
Revenue from collaborative arrangements | 5,479 | 7,392 | 12,101 | 12,715 |
Other | ||||
Collaboration revenue recognized in the period from: | ||||
Revenue from collaborative arrangements | 9 | 101 | 19 | 116 |
Collaborative revenue | ||||
Collaboration revenue recognized in the period from: | ||||
Revenue from collaborative arrangements | $ 5,488 | $ 7,493 | $ 12,120 | $ 12,831 |
Revenue - Janssen Biotech Agree
Revenue - Janssen Biotech Agreement (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Feb. 28, 2018 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Collaborative Arrangements and Co-Promote Agreement | |||||
Percentage of profit share | 33.00% | 35.00% | |||
Revenue from collaborative arrangements | $ 5,488 | $ 7,493 | $ 12,120 | $ 12,825 | |
Research and development | 62,404 | 46,399 | 128,417 | 100,217 | |
Janssen | |||||
Collaborative Arrangements and Co-Promote Agreement | |||||
Upfront payment receivable | $ 100,000 | ||||
Percentage of profit share | 67.00% | ||||
Maximum potential payments receivable | $ 900,000 | ||||
Revenue from collaborative arrangements | 5,479 | 7,392 | 12,101 | 12,715 | |
Deferred revenue | 25,700 | 25,700 | |||
Research and development | $ 9,000 | $ 9,000 | $ 19,200 | $ 17,700 | |
Janssen | Collaborative Arrangement | |||||
Collaborative Arrangements and Co-Promote Agreement | |||||
Collaborative arrangement, future development and commercialization milestones | 700,000 | ||||
Janssen | Collaborative Arrangement | TD-1473 | |||||
Collaborative Arrangements and Co-Promote Agreement | |||||
Collaborative arrangement, opt in fee | $ 200,000 |
Revenue - Development and Comme
Revenue - Development and Commercialization Agreement (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | 24 Months Ended | ||||||||
Dec. 31, 2019USD ($)plan | Jun. 30, 2019USD ($) | Feb. 28, 2018 | Jan. 31, 2015plan | Jun. 30, 2020USD ($) | Dec. 31, 2019USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2016USD ($) | Mar. 31, 2020USD ($) | |
Collaborative Arrangements and Co-Promote Agreement | |||||||||||||
Milestone payment | $ 15,008 | $ 26,150 | $ 34,870 | $ 31,488 | |||||||||
Percentage of profit share | 33.00% | 35.00% | |||||||||||
Mylan | |||||||||||||
Collaborative Arrangements and Co-Promote Agreement | |||||||||||||
Upfront payment receivable | $ 18,500 | ||||||||||||
Potential milestone or contingent payments | $ 1,500 | ||||||||||||
Transaction price | 34,200 | $ 34,200 | |||||||||||
Number of performance obligations | plan | 2 | ||||||||||||
Performance period (in years) | 17 years | 12 years | |||||||||||
Deferred revenue | 300 | $ 300 | |||||||||||
Percentage of profit share | 65.00% | ||||||||||||
Mylan | Purchase Agreement | |||||||||||||
Collaborative Arrangements and Co-Promote Agreement | |||||||||||||
Premium proceeds from sale of ordinary shares | $ 4,200 | ||||||||||||
Mylan | Development and Commercialization Agreement | |||||||||||||
Collaborative Arrangements and Co-Promote Agreement | |||||||||||||
Initial cash payment | $ 15,000 | $ 30,000 | |||||||||||
Mylan | YUPELRI Monotherapy | |||||||||||||
Collaborative Arrangements and Co-Promote Agreement | |||||||||||||
Potential milestone or contingent payments | 9,000 | 9,000 | 9,000 | ||||||||||
Mylan | YUPELRI Monotherapy | Development and Commercialization Agreement | |||||||||||||
Collaborative Arrangements and Co-Promote Agreement | |||||||||||||
Potential milestone or contingent payments | 160,000 | $ 160,000 | |||||||||||
Mylan | Future potential combination products | |||||||||||||
Collaborative Arrangements and Co-Promote Agreement | |||||||||||||
Potential milestone or contingent payments | 7,500 | 45,000 | 7,500 | 45,000 | 7,500 | ||||||||
Mylan | Milestone - 50% enrollment in Phase 3 twelve-month safety study | Development and Commercialization Agreement | |||||||||||||
Collaborative Arrangements and Co-Promote Agreement | |||||||||||||
Milestone payment | $ 15,000 | ||||||||||||
Mylan | Sales milestones | |||||||||||||
Collaborative Arrangements and Co-Promote Agreement | |||||||||||||
Potential milestone or contingent payments | $ 37,500 | $ 37,500 | $ 37,500 | ||||||||||
Mylan | Sales milestones | YUPELRI Monotherapy | |||||||||||||
Collaborative Arrangements and Co-Promote Agreement | |||||||||||||
Potential milestone or contingent payments | $ 150,000 | $ 150,000 | |||||||||||
Pfizer | |||||||||||||
Collaborative Arrangements and Co-Promote Agreement | |||||||||||||
Upfront payment receivable | $ 10,000 | $ 10,000 | |||||||||||
Number of performance obligations | plan | 2 | ||||||||||||
Pfizer | Sales milestones | |||||||||||||
Collaborative Arrangements and Co-Promote Agreement | |||||||||||||
Milestone payment | $ 240,000 |
Revenue - Condensed Statement O
Revenue - Condensed Statement Of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Development and Collaboration Agreement | ||||
Revenue from collaborative arrangements | $ 5,488 | $ 7,493 | $ 12,120 | $ 12,825 |
Mylan collaboration agreement | ||||
Development and Collaboration Agreement | ||||
Revenue from collaborative arrangements | $ 9,520 | 157 | $ 21,250 | 157 |
Collaboration Loss | $ 181 | $ 1,582 |
Revenue - Reimbursement of R an
Revenue - Reimbursement of R and D Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Research and Development Reimbursement | ||||
Total reduction to R and D expense | $ 1,914 | $ 815 | $ 4,392 | $ 2,429 |
Janssen | ||||
Research and Development Reimbursement | ||||
Total reduction to R and D expense | 1,563 | 784 | 2,770 | 2,195 |
Mylan | ||||
Research and Development Reimbursement | ||||
Total reduction to R and D expense | $ 351 | $ 31 | $ 1,622 | $ 234 |
Revenue - Revenue from Licensin
Revenue - Revenue from Licensing Arrangements (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||||
Dec. 31, 2019USD ($)plan | Jun. 30, 2019USD ($) | Jan. 31, 2015plan | Jun. 30, 2020USD ($) | Dec. 31, 2019USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2020USD ($) | |
Collaborative Arrangements and Co-Promote Agreement | |||||||||
Milestone payment | $ 15,008 | $ 26,150 | $ 34,870 | $ 31,488 | |||||
Mylan | |||||||||
Collaborative Arrangements and Co-Promote Agreement | |||||||||
Potential milestone or contingent payments | $ 1,500 | ||||||||
Upfront payment receivable | $ 18,500 | ||||||||
Number of performance obligations | plan | 2 | ||||||||
Mylan | Sales milestones | |||||||||
Collaborative Arrangements and Co-Promote Agreement | |||||||||
Potential milestone or contingent payments | 37,500 | 37,500 | 37,500 | ||||||
Mylan | Development and Sales Milestones | |||||||||
Collaborative Arrangements and Co-Promote Agreement | |||||||||
Potential milestone or contingent payments | 205,000 | 205,000 | |||||||
Mylan | YUPELRI Monotherapy | |||||||||
Collaborative Arrangements and Co-Promote Agreement | |||||||||
Potential milestone or contingent payments | 9,000 | 9,000 | 9,000 | ||||||
Mylan | YUPELRI Monotherapy | Sales milestones | |||||||||
Collaborative Arrangements and Co-Promote Agreement | |||||||||
Potential milestone or contingent payments | 150,000 | 150,000 | |||||||
Mylan | YUPELRI Monotherapy | Development and Sales Milestones | |||||||||
Collaborative Arrangements and Co-Promote Agreement | |||||||||
Potential milestone or contingent payments | 160,000 | 160,000 | |||||||
Mylan | YUPELRI Monotherapy | European Union Regulatory Issues [Member] | |||||||||
Collaborative Arrangements and Co-Promote Agreement | |||||||||
Potential milestone or contingent payments | 10,000 | 10,000 | |||||||
Mylan | Future potential combination products | |||||||||
Collaborative Arrangements and Co-Promote Agreement | |||||||||
Potential milestone or contingent payments | 7,500 | $ 45,000 | 7,500 | $ 45,000 | 7,500 | ||||
Mylan | Future potential combination products | Development and Sales Milestones | |||||||||
Collaborative Arrangements and Co-Promote Agreement | |||||||||
Potential milestone or contingent payments | $ 54,000 | $ 54,000 | $ 54,000 | ||||||
Pfizer | |||||||||
Collaborative Arrangements and Co-Promote Agreement | |||||||||
Upfront payment receivable | $ 10,000 | $ 10,000 | |||||||
Number of performance obligations | plan | 2 | ||||||||
Pfizer | Sales milestones | |||||||||
Collaborative Arrangements and Co-Promote Agreement | |||||||||
Milestone payment | $ 240,000 |
Cash, Cash Equivalents, and R_3
Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2017 |
Cash, Cash Equivalents, and Restricted Cash | ||||
Cash and cash equivalents | $ 104,735 | $ 58,064 | $ 178,311 | |
Restricted cash | 833 | 833 | ||
Total cash, cash equivalents, and restricted cash shown on the condensed consolidated statements of cash flows | $ 105,568 | $ 58,897 | $ 179,144 | $ 378,854 |
Investments and Fair Value Me_3
Investments and Fair Value Measurements - Available-for-sale securities (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Available for sale securities: | ||
Amortized Cost | $ 383,957 | $ 274,014 |
Gross Unrealized Gains | 284 | 148 |
Gross Unrealized Losses | (4) | (3) |
Estimated Fair Value | 384,237 | 274,159 |
Debt Securities, Available-for-sale, Unrealized Gain (Loss) [Abstract] | ||
Estimated Fair Value lesser than 12 months | 59,965 | 33,644 |
Estimated Fair Value Total | 59,965 | 33,644 |
Gross unrealized lesser than 12 months | (3) | (3) |
Gross unrealized loss, Total | (3) | (3) |
Marketable securities | ||
Available for sale securities: | ||
Amortized Cost | 353,320 | 238,278 |
Gross Unrealized Gains | 284 | 148 |
Gross Unrealized Losses | (4) | (3) |
Estimated Fair Value | 353,600 | 238,423 |
US government securities | ||
Debt Securities, Available-for-sale, Unrealized Gain (Loss) [Abstract] | ||
Estimated Fair Value lesser than 12 months | 49,974 | |
Estimated Fair Value Total | 49,974 | |
Gross unrealized lesser than 12 months | (1) | |
Gross unrealized loss, Total | (1) | |
US government securities | Level 1 | ||
Available for sale securities: | ||
Amortized Cost | 189,878 | 100,746 |
Gross Unrealized Gains | 211 | 108 |
Gross Unrealized Losses | (2) | |
Estimated Fair Value | 190,087 | 100,854 |
US government agency securities | Level 2 | ||
Available for sale securities: | ||
Amortized Cost | 99,877 | |
Gross Unrealized Gains | 37 | |
Estimated Fair Value | 99,914 | |
Corporate notes | ||
Debt Securities, Available-for-sale, Unrealized Gain (Loss) [Abstract] | ||
Estimated Fair Value lesser than 12 months | 5,507 | |
Estimated Fair Value Total | 5,507 | |
Gross unrealized lesser than 12 months | (1) | |
Gross unrealized loss, Total | (1) | |
Corporate notes | Level 2 | ||
Available for sale securities: | ||
Amortized Cost | 2,616 | 25,466 |
Gross Unrealized Gains | 9 | 9 |
Gross Unrealized Losses | (1) | |
Estimated Fair Value | 2,625 | 25,474 |
Commercial paper | ||
Debt Securities, Available-for-sale, Unrealized Gain (Loss) [Abstract] | ||
Estimated Fair Value lesser than 12 months | 9,991 | 28,137 |
Estimated Fair Value Total | 9,991 | 28,137 |
Gross unrealized lesser than 12 months | (2) | (2) |
Gross unrealized loss, Total | (2) | (2) |
Commercial paper | Level 2 | ||
Available for sale securities: | ||
Amortized Cost | 60,949 | 112,066 |
Gross Unrealized Gains | 27 | 31 |
Gross Unrealized Losses | (2) | (2) |
Estimated Fair Value | 60,974 | 112,095 |
Money market funds | Level 1 | ||
Available for sale securities: | ||
Amortized Cost | 30,637 | 35,736 |
Estimated Fair Value | $ 30,637 | $ 35,736 |
Investments and Fair Value Me_4
Investments and Fair Value Measurements - Convertible senior notes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Maturity period for marketable securities | ||||
Maximum contractual maturity period | 10 months | |||
Weighted average contractual maturity period | 4 months | |||
Available-for-sale securities sold | $ 5,000 | $ 0 | $ 19,900 | $ 0 |
Long-Term Debt (Details)
Long-Term Debt (Details) - USD ($) $ in Thousands | Feb. 21, 2020 | Nov. 30, 2018 | Jun. 30, 2020 | Jun. 30, 2020 | Feb. 28, 2020 |
Debt Instrument [Line Items] | |||||
Percentage of note to be retained | 5.00% | 5.00% | |||
Interest shortfall on 2035 notes, net | $ 1,093 | ||||
Loss on extinguishment of debt | (15,464) | ||||
Issuer II Class C Units | |||||
Debt Instrument [Line Items] | |||||
Percentage of economic interest | 85.00% | ||||
Percentage of equity interest | 75.00% | ||||
9.5% fixed rate term notes due 2035 | |||||
Debt Instrument [Line Items] | |||||
Principal amount | $ 400,000 | $ 401,150 | 401,150 | ||
Less: 5% retention by the Company | (20,057) | (20,057) | |||
Unamortized debt issuance costs | (4,124) | (4,124) | |||
Total long-term debt | $ 375,266 | $ 375,266 | |||
Interest rate (as a percent) | 9.50% | 9.50% | 9.50% | ||
Percentage of note to be sold | 95.00% | ||||
Percentage of note to be retained | 5.00% | ||||
Interest shortfall on 2035 notes, net | $ 1,150 | ||||
Net principal | 381,100 | $ 381,100 | |||
Unamortized debt issuance costs | 4,124 | 4,124 | |||
9.0% non-recourse notes due 2033 | |||||
Debt Instrument [Line Items] | |||||
Principal amount | $ 250,000 | ||||
Unamortized debt issuance costs | $ (1,703) | $ (1,703) | $ (1,800) | ||
Interest rate (as a percent) | 9.00% | 9.00% | 9.00% | ||
Percentage of debt redemption premium | 5.00% | ||||
Loss on extinguishment of debt | $ 15,500 | ||||
Unamortized debt issuance costs | $ 1,703 | 1,703 | $ 1,800 | ||
Creditors fees | $ 4,400 | 500 | |||
Third party fees | $ 300 | ||||
3.25% Convertible Senior Notes Due 2023 | |||||
Debt Instrument [Line Items] | |||||
Principal amount | $ 230,000 | $ 230,000 | |||
Interest rate (as a percent) | 3.25% | 3.25% | |||
Notes fair value | $ 218,400 | $ 218,400 | |||
TRC | |||||
Debt Instrument [Line Items] | |||||
Percentage of economic interest | 85.00% | 85.00% | |||
Percentage of equity interest | 85.00% | 85.00% | |||
TRC | Minimum | |||||
Debt Instrument [Line Items] | |||||
Upward tiering royalties (as a percent) | 6.50% | ||||
TRC | Maximum | |||||
Debt Instrument [Line Items] | |||||
Upward tiering royalties (as a percent) | 10.00% | ||||
TRC | Issuer II Class C Units | |||||
Debt Instrument [Line Items] | |||||
Percentage of economic interest | 63.75% |
Theravance Respiratory Compan_2
Theravance Respiratory Company, LLC (Details) - TRC $ in Millions | Feb. 21, 2020 | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)item | Jun. 30, 2019USD ($) | Dec. 31, 2019USD ($) |
Theravance Respiratory Company, LLC | ||||||
Percentage of equity interest | 85.00% | 85.00% | ||||
Percentage of economic interest | 85.00% | 85.00% | ||||
Number of fiscal quarters | item | 4 | |||||
Equity method investments | $ 35.5 | $ 35.5 | $ 28.6 | |||
Royalty payments | 21.4 | $ 8.4 | 34.9 | $ 14.6 | ||
Royalty expenses | $ 0.4 | $ 0.6 |
Share-Based Compensation - Expe
Share-Based Compensation - Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Share-Based Compensation | ||||
Share-based compensation expense | $ 16,585 | $ 11,298 | $ 31,861 | $ 23,519 |
Research and development | ||||
Share-Based Compensation | ||||
Share-based compensation expense | 8,098 | 5,720 | 15,963 | 11,880 |
Selling, general and administrative | ||||
Share-Based Compensation | ||||
Share-based compensation expense | $ 8,487 | $ 5,578 | $ 15,898 | $ 11,639 |
Share-Based Compensation - Perf
Share-Based Compensation - Performance Contingent Awards (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2016 | |
Share-Based Compensation | |||||
Share-based compensation expense | $ 16,585 | $ 11,298 | $ 31,861 | $ 23,519 | |
Research and development | |||||
Share-Based Compensation | |||||
Share-based compensation expense | 8,098 | 5,720 | 15,963 | 11,880 | |
Selling, general and administrative | |||||
Share-Based Compensation | |||||
Share-based compensation expense | $ 8,487 | $ 5,578 | $ 15,898 | $ 11,639 | |
Performance-Contingent Awards - RSAs | |||||
Share-Based Compensation | |||||
Shares approved for grant (in shares) | 1,575,000 | ||||
Vesting period | 5 years | ||||
Awards outstanding (in shares) | 414,000 | 877,500 | 414,000 | 877,500 | |
Performance-Contingent Awards - RSUs | |||||
Share-Based Compensation | |||||
Awards outstanding (in shares) | 54,000 | 101,250 | 54,000 | 101,250 | |
Share-based compensation expense | $ 700 | ||||
Performance-Contingent Awards - RSUs | Senior management | |||||
Share-Based Compensation | |||||
Shares approved for grant (in shares) | 135,000 | ||||
Performance-Contingent Awards - RSUs | |||||
Share-Based Compensation | |||||
Awards outstanding (in shares) | 120,000 | 120,000 | |||
Share-based compensation expense | $ 500 | ||||
Maximum potential expense | Performance-Contingent Awards - RSUs | |||||
Share-Based Compensation | |||||
Share-based compensation expense | $ 1,800 | ||||
Second tranche | |||||
Share-Based Compensation | |||||
Share-based compensation expense | $ (300) | 400 | $ 500 | ||
Third tranche | |||||
Share-Based Compensation | |||||
Share-based compensation expense | $ 600 | 1,300 | |||
Third tranche | Maximum potential expense | |||||
Share-Based Compensation | |||||
Share-based compensation expense | 1,700 | ||||
Third tranche | Maximum potential expense | Research and development | |||||
Share-Based Compensation | |||||
Share-based compensation expense | 600 | ||||
Third tranche | Maximum potential expense | Selling, general and administrative | |||||
Share-Based Compensation | |||||
Share-based compensation expense | $ 1,100 |
Income Taxes - (Details)
Income Taxes - (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Provision for income tax benefit (expense) | ||||
Income tax provision | $ 39,000 | $ 201,000 | $ 186,000 | $ 281,000 |
Provision for income taxes on undistributed earnings of foreign subsidiaries | $ 0 | $ 0 |
Public Offering of Ordinary S_2
Public Offering of Ordinary Shares - (Details) - USD ($) $ / shares in Units, $ in Thousands | Feb. 14, 2020 | Jun. 30, 2020 |
Public Offering of Ordinary Shares | ||
Net proceeds from sale of ordinary shares (in shares) | 5,500,000 | |
Share price (in dollars per share) | $ 27 | |
Proceeds from sale of ordinary shares | $ 148,500 | $ 139,915 |