Aptevo Therapeutics (APVO) 10-Q 7 Nov 19 2019 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2019	Nov. 06, 2019
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
Trading Symbol	APVO
Entity Registrant Name	APTEVO THERAPEUTICS INC.
Entity Central Index Key	0001671584
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Extended Transition Period	true
Entity Common Stock, Shares Outstanding		45,279,244
Entity Current Reporting Status	Yes
Entity Shell Company	false
Entity File Number	001-37746
Entity Tax Identification Number	81-1567056
Entity Address, Address Line One	2401 4th Avenue
Entity Address, Address Line Two	Suite 1050
Entity Address, City or Town	Seattle
Entity Address, State or Province	WA
Entity Address, Postal Zip Code	98121
City Area Code	206
Local Phone Number	838-0500
Entity Interactive Data Current	Yes
Document Quarterly Report	true
Document Transition Report	false
Entity Incorporation, State or Country Code	DE
Security Exchange Name	NASDAQ
Title of 12(b) Security	Common Stock, $0.001 par value per share

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 17,683	$ 30,635
Accounts receivable, net	7,918	5,220
Inventories	7,482	1,785
Prepaid expenses	2,215	6,907
Other current assets	1,491	4,142
Total current assets	36,789	48,689
Restricted cash	7,498	7,448
Property and equipment, net	4,271	5,202
Intangible assets, net	4,628	5,250
Operating lease right-of-use asset	3,981
Other assets	3,389	905
Total assets	60,556	67,494
Current liabilities:
Accounts payable	12,073	11,671
Accrued compensation	3,483	3,898
Sales rebates and discounts payable	868	1,245
Loan payable, net	19,707
Other short-term liabilities	1,121	796
Total current liabilities	37,252	17,610
Long-term debt, net		19,278
Operating lease liability, net of current portion	3,547
Other liabilities	12	200
Total liabilities	40,811	37,088
Stockholders' equity:
Preferred stock: $0.001 par value; 15,000,000 shares authorized, zero shares issued or outstanding
Common stock: $0.001 par value; 500,000,000 shares authorized; 45,279,244 and 22,808,416 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively	45	23
Additional paid-in capital	179,382	157,791
Accumulated deficit	(159,682)	(127,408)
Total stockholders' equity	19,745	30,406
Total liabilities and stockholders' equity	$ 60,556	$ 67,494

CONDENSED CONSOLIDATED BALANC_2

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares	Sep. 30, 2019	Dec. 31, 2018
Statement Of Financial Position [Abstract]
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	15,000,000	15,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	500,000,000	500,000,000
Common stock, shares issued	45,279,244	22,808,416
Common stock, shares outstanding	45,279,244	22,808,416

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Revenues:
Product sales	$ 9,011	$ 5,824	$ 23,393	$ 16,721
Type of Revenue [Extensible List]	us-gaap:ProductMember	us-gaap:ProductMember	us-gaap:ProductMember	us-gaap:ProductMember
Costs and expenses:
Cost of product sales	$ 3,959	$ 2,437	$ 13,791	$ 6,752
Type of Cost, Good or Service [Extensible List]	us-gaap:ProductMember	us-gaap:ProductMember	us-gaap:ProductMember	us-gaap:ProductMember
Research and development	$ 9,125	$ 8,574	$ 24,143	$ 26,486
Selling, general and administrative	6,476	6,940	20,344	21,556
Loss from operations	(10,549)	(12,127)	(34,885)	(38,073)
Other expense from continuing operations	(625)	(435)	(1,639)	(1,488)
Loss before income tax	(11,174)	(12,562)	(36,524)	(39,561)
Benefit from income tax	999		999
Net loss from continuing operations	(10,175)	(12,562)	(35,525)	(39,561)
Discontinued operations (Note 11):
Income from discontinued operations, before income taxes	4,250		4,250
Income tax expense	(999)		(999)
Income from discontinued operations	3,251		3,251
Net loss	$ (6,924)	$ (12,562)	$ (32,274)	$ (39,561)
Basic and diluted per share amounts:
Net loss from continuing operations	$ (0.23)	$ (0.55)	$ (0.90)	$ (1.76)
Income from discontinued operations	0.07		0.08
Net loss per basic share	$ (0.16)	$ (0.55)	$ (0.82)	$ (1.76)
Weighted-average shares used to compute per share calculations	45,169,864	22,672,721	39,341,974	22,431,146

CONDENSED CONSOLIDATED STATEM_2

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Statement Of Income And Comprehensive Income [Abstract]
Net loss	$ (6,924)	$ (12,562)	$ (32,274)	$ (39,561)
Other comprehensive gain:
Unrealized gain on available-for-sale investments, net		34		103
Total comprehensive loss	$ (6,924)	$ (12,528)	$ (32,274)	$ (39,458)

CONDENSED CONSOLIDATED STATEM_3

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Operating Activities
Net loss	$ (32,274)	$ (39,561)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation	1,329	1,647
Depreciation and amortization	1,702	1,784
Non-cash interest expense and other	564	691
Gain on sale of Hyperimmune Business	(4,250)
Changes in operating assets and liabilities:
Accounts receivable	(2,698)	(4,061)
Inventories	(5,697)	(2,941)
Prepaid expenses and other assets	4,688	(1,570)
Operating lease right of use asset	711
Accounts payable, accrued compensation and other liabilities	(162)	(432)
Long-term operating lease liability	(819)
Sales rebates and discounts	(377)	313
Net cash used in operating activities	(37,283)	(44,130)
Investing Activities
Proceeds from the maturity of investments		81,152
Cash received from sale of Hyperimmune Business	4,250	65
Purchases of property and equipment	(153)	(927)
Purchases of investments		(16,534)
Net cash provided by investing activities	4,097	63,756
Financing Activities
Proceeds from issuance of common stock, warrants, and pre-funded warrants, net	20,321
Proceeds from exercise of common stock options		572
Proceeds from the exercise of pre-funded warrants	21
Payment of tax liability for vested equity awards	(58)	(797)
Debt issuance costs		(601)
Net cash provided by (used in) financing activities	20,284	(826)
(Decrease) Increase in cash, cash equivalents, and restricted cash	(12,902)	18,800
Cash, cash equivalents, and restricted cash at beginning of period	38,083	17,495
Cash, cash equivalents, and restricted cash at end of period	$ 25,181	$ 36,295

CONDENSED CONSOLIDATED STATEM_4

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited) - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Accumulated Deficit	Accumulated Other Comprehensive Loss
Balance at Dec. 31, 2017	$ 82,035	$ 22	$ 155,836	$ (73,718)	$ (105)
Balance (in shares) at Dec. 31, 2017		21,605,716
Unrealized gain on available-for-sale investments	103				103
Common stock issued upon exercise of stock options	572		572
Common stock issued upon exercise of stock options (in shares)		257,550
Common stock issued upon vesting of restricted stock units	(796)	$ 1	(797)
Common stock issued upon vesting of restricted stock units (in shares)		814,004
Stock-based compensation	1,647		1,647
Net loss for the period	(39,561)			(39,561)
Balance at Sep. 30, 2018	44,000	$ 23	157,258	(113,279)	(2)
Balance (in shares) at Sep. 30, 2018		22,677,270
Balance at Jun. 30, 2018	56,029	$ 23	156,759	(100,717)	(36)
Balance (in shares) at Jun. 30, 2018		22,667,873
Unrealized gain on available-for-sale investments	34				34
Common stock issued upon exercise of stock options	8		8
Common stock issued upon exercise of stock options (in shares)		3,464
Common stock issued upon vesting of restricted stock units	10		10
Common stock issued upon vesting of restricted stock units (in shares)		5,933
Stock-based compensation	481		481
Net loss for the period	(12,562)			(12,562)
Balance at Sep. 30, 2018	44,000	$ 23	157,258	(113,279)	$ (2)
Balance (in shares) at Sep. 30, 2018		22,677,270
Balance at Dec. 31, 2018	30,406	$ 23	157,791	(127,408)
Balance (in shares) at Dec. 31, 2018		22,808,416
Issuance of common stock, pre-funded warrants and warrants,net	20,342	$ 22	20,320
Issuance of common stock, pre-funded warrants and warrants, net (in shares)		22,180,421
Issuance of commitment shares of common stock, non-cash transaction (in shares)		195,867
Common stock issued upon vesting of restricted stock units	(58)		(58)
Common stock issued upon vesting of restricted stock units (in shares)		94,540
Stock-based compensation	1,329		1,329
Net loss for the period	(32,274)			(32,274)
Balance at Sep. 30, 2019	19,745	$ 45	179,382	(159,682)
Balance (in shares) at Sep. 30, 2019		45,279,244
Balance at Jun. 30, 2019	26,199	$ 45	178,912	(152,758)
Balance (in shares) at Jun. 30, 2019		45,098,823
Issuance of common stock, net	136		136
Issuance of common stock, net (in shares)		180,421
Stock-based compensation	334		334
Net loss for the period	(6,924)			(6,924)
Balance at Sep. 30, 2019	$ 19,745	$ 45	$ 179,382	$ (159,682)
Balance (in shares) at Sep. 30, 2019		45,279,244

Nature of Business and Signific

Nature of Business and Significant Accounting Policies	9 Months Ended
	Sep. 30, 2019
Accounting Policies [Abstract]
Nature of Business and Significant Accounting Policies	Note 1. Nature of Business and Significant Accounting Policies Organization Aptevo Therapeutics Inc. (Aptevo, we, us, or the Company) is a biotechnology company focused on novel oncology (cancer) and hematology (blood disease) therapeutics to meaningfully improve patients’ lives. Our core technology is the ADAPTIR (modular protein technology) platform. We currently have one revenue-generating product in the area of hematology, IXINITY, as well as various investigational stage product candidates in the area of immuno-oncology. We are currently trading on the Nasdaq Capital Market under the symbol “APVO.” Basis of Presentation The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries: Aptevo Research and Development LLC; Aptevo BioTherapeutics LLC; and Aptevo Europe Limited. All intercompany balances and transactions have been eliminated and we have determined that we operate in one segment. The accompanying condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (SEC) and U.S. generally accepted accounting principles (GAAP) for unaudited interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for audited annual financial statements. These condensed consolidated financial statements include all adjustments, which include normal recurring adjustments, necessary for the fair presentation of the Company’s financial position. These unaudited condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and accompanying notes included in our Form 10-K for the year ended December 31, 2018, which was filed with the SEC on March 18, 2019. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. The accompanying financial statements have been prepared on a basis that assumes we will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and commitments in the normal course of business. We have suffered recurring losses from operations and negative cash flows from operating activities. At September 30, 2019, we had cash, cash equivalents, short-term investments, and restricted cash totaling $25.2 million and an accumulated deficit of $159.7 million. While we continue to generate cash inflows from the sale of IXINITY, we expect to continue spending significantly on research and development and in marketing IXINITY. When considered in aggregate, these factors raise substantial doubt about our ability to continue as a going concern for the one-year period from the date of issuance of these financial statements. We will need to raise additional funds to support our operating and capital needs in 2020. We continue to face significant challenges and uncertainties and, as a result, our available capital resources may be consumed more rapidly than currently expected due to: (a) potential decreases in sales of IXINITY, our sole marketed product, and the uncertainty of future revenues; (b) changes we may make to the business that affect ongoing operating expenses; (c) changes we may make in our business strategy; (d) regulatory developments affecting IXINITY; (e) changes we may make in our research and development spending plans; and (f) other items affecting our forecasted level of expenditures and use of cash resources. We may attempt to obtain additional funding through our existing equity sales agreement with Lincoln Park Financial LLC or our Equity Distribution Agreement with Piper Jaffray, or other public or private financing, collaborative arrangements with strategic partners, or through additional credit lines or other debt financing sources to increase the funds available to fund operations. However, we may not be able to secure such funding in a timely manner or on favorable terms, if at all. Furthermore, if we issue equity or debt securities to raise additional funds, our existing stockholders may experience dilution, and the new equity or debt securities may have rights, preferences and privileges senior to those of our existing stockholders. If we raise additional funds through collaboration, licensing or other similar arrangements, it may be necessary to relinquish valuable rights to our potential products or proprietary technologies, or grant licenses on terms that are not favorable to us. Without additional funds, we may be forced to delay, scale back or eliminate some of our sales and marketing efforts, research and development activities, or other operations and potentially delay product development in an effort to provide sufficient funds to continue our operations. If any of these events occurs, our ability to achieve our development and commercialization goals may be adversely affected. Significant Accounting Policies Leases On January 1, 2019 we adopted ASU No. 2016-02, Leases (ASC 842), which amended the existing standards for lease accounting, requiring lessees to recognize most leases on their balance sheets and disclose key information about leasing arrangements. We adopted the new standard using a modified retrospective transition approach at the beginning of the current fiscal year, January 1, 2019. We did not adjust comparative periods in our financial statements prior to that period. For transition leases, entities were permitted to make an election to apply a package of practical expedients that allows entities not to reassess (i) whether any expired or existing contracts are or contain leases, (ii) lease classification for any expired or existing leases, and (iii) whether initial direct costs for any expired or existing leases qualify for capitalization under ASC 842. In addition, entities were also permitted to make an election to use hindsight when determining lease terms and when assessing the impairment of right-of-use assets. We have chosen to elect the package of practical expedients but did not elect the hindsight practical expedient for our transition leases. We determine if an arrangement is a lease at inception date. Leases are to be classified as finance or operating at the lease commencement date, which affects the classification of expense recognition in the income statement. Right-of-use assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments, as agreed to in the lease. Operating lease liabilities and the corresponding right-of-use assets are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. An operating right-of-use asset is measured as the amount of the initial measurement of the lease liability, adjusted for prepaid or accrued lease payments, the remaining balance of any lease incentive received, unamortized initial direct costs, and any impairment of the right-of-use asset. The initial measurement of the lease liabilities and right-to-use assets of finance leases is the same as for operating leases. We include options to extend the lease and certain termination options in our lease liability and right-of-use asset when it is reasonably certain that we will exercise those options. As our existing leases do not contain an implicit interest rate, we estimate our incremental borrowing rate (IBR) based on information available at commencement date in determining the present value of future payments. Due to the significant judgment involved and the complex analysis needed to determine this discount rate, we engaged a third-party valuation specialist to advise us in our determination of our IBR for the initial adoption of the standard. Lease expense for operating leases is recognized on a straight-line basis over the lease term as part of our selling, general and administrative expenses and our research and development expenses on our consolidated statement of operations. Lease expense for financing leases consists of amortization of the right-of-use asset and interest on the lease liability as part of our research and development expenses on our consolidated statement of operations. Adoption of the new standard resulted in the recognition of a right-to-use asset of $1.5 million, an operating lease liability of $2.2 million dollars, and a related decrease in deferred rent liability of $0.7 million at January 1, 2019. Refer to Note 6 for additional information. Stock-Based Compensation Stock-based compensation expense is recognized for all share-based payments made to employees, directors and non-employees based on estimated fair values as of the date of grant. The fair value of our stock options is calculated using the Black-Scholes option-pricing model which requires judgmental assumptions including volatility, risk-free rates and expected option life. We recognize stock-based compensation expense on a straight-line basis over the requisite service period, net of an estimated forfeiture rate. O ther Significant Accounting Policies Our other significant accounting policies were reported in our Annual Report on Form 10-K for the year ended December 31, 2018 that was filed with the SEC on March 18, 2019. Our other significant accounting policies have not changed materially from the policies previously reported. Recent Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses, (Topic 326) which changes how entities account for credit losses on most financial assets and certain other instruments, and expands disclosures. The standard is effective for annual and interim periods beginning after December 15, 2022, with early adoption permitted, for Aptevo, as we meet the definition of a smaller reporting company (SRC). We expect to adopt the standard on January 1, 2020 and are still in the process of evaluating the effect of adoption on our consolidated financial statements and disclosures. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”), which modifies the disclosure requirements for fair value measurements. The new standard is effective for the Company on January 1, 2020. Early adoption is permitted. We are evaluating the impact the adoption of ASU 2018-13 may have on our disclosures.

Collaboration Agreements

Collaboration Agreements	9 Months Ended
	Sep. 30, 2019
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Collaboration Agreements	Note 2. Collaboration Agreements Alligator On July 20, 2017, our wholly owned subsidiary Aptevo Research and Development LLC (Aptevo R&D), entered into a collaboration and option agreement (Collaboration Agreement) with Alligator Bioscience AB (Alligator), pursuant to which Aptevo and Alligator will collaboratively develop ALG.APV-527, a lead bispecific antibody candidate simultaneously targeting 4-1BB (CD137), a member of the TNFR superfamily of a costimulatory receptor found on activated T-cells, and 5T4, a tumor antigen widely overexpressed in a number of different types of cancer. This product candidate is built on our novel ADAPTIR platform, which is designed to expand on the utility and effectiveness of therapeutic antibodies. Subject to certain exceptions for Aptevo’s manufacturing and platform technologies, the parties will jointly own intellectual property generated in the performance of the development activities under the Collaboration Agreement. Under the terms of this Collaboration Agreement, the parties intend to share revenue received from a third-party commercialization partner equally, or, if the development costs are not equally shared under this Collaboration Agreement, in proportion to the development costs borne by each party. The Collaboration Agreement also contains several points in development at which either party may elect to “opt-out” (i.e., terminate without cause) and, following a termination notice period, cease paying development costs for this product candidate, which would be borne fully by the continuing party. Following an opt-out by a party, the continuing party will be granted exclusive rights to continue the development and commercialization of the product candidate, subject to a requirement to pay a percentage of revenue received from any future commercialization partner for this product, or, if the continuing party elects to self-commercialize, tiered royalties on the net sales of the product by the continuing party ranging from the low to mid-single digits, based on the point in development at which the opt-out occurs. The parties have also agreed on certain technical criteria or “stage gates” related to the development of this product candidate that, if not met, will cause an automatic termination and wind-down of this Collaboration Agreement and the activities thereunder, provided that the parties do not agree to continue. Aptevo and Alligator have made a joint decision to delay submission of the clinical trial authorization (CTA) for ALG-APV.527 previously planned for the fourth quarter of 2019. Alligator and Aptevo have made a joint decision to focus efforts on partnering ALG.APV-527 prior to phase 1 clinical development. The adjustment to the development plan for ALG.APV -527 will allow both Aptevo and Alligator to align their resources with their respective ongoing clinical programs. The companies are initiating discussions with potential partners for the upcoming clinical development of ALG.APV-527. The Collaboration Agreement contains industry standard termination rights, including for material breach following a specified cure period, and in the case of a party’s insolvency. We assessed the arrangement in accordance with ASC 606 and concluded that the contract counterparty, Alligator, is not a customer. As such the arrangement is not in the scope of ASC 606 and is instead treated as a collaborative agreement under ASC 808. For the three and nine months ended September 30, 2019, we recorded a reduction in our research and development expense of $1.0 million and $1.6 million, respectively, and for the three and nine months ended September 30, 2018, we recorded a decrease in our research and development expense of $0.2 million and $0.4 million, respectively, related to the collaboration arrangement.

Fair Value Measurements

Fair Value Measurements	9 Months Ended
	Sep. 30, 2019
Fair Value Disclosures [Abstract]
Fair Value Measurements	Note 3. Fair Value Measurements The Company’s estimates of fair value for financial assets and financial liabilities are based on the framework established in the fair value accounting guidance. The framework is based on the inputs used in valuation, gives the highest priority to quoted prices in active markets and requires that observable inputs be used in the valuations when available. The disclosure of fair value estimates in the fair value accounting guidance hierarchy is based on whether the significant inputs into the valuation are observable. In determining the level of the hierarchy in which the estimate is disclosed, the highest priority is given to unadjusted quoted prices in active markets and the lowest priority to unobservable inputs that reflect the Company’s significant market assumptions. The level in the fair value hierarchy within which the fair value measurement is reported is based on the lowest level input that is significant to the measurement in its entirety. The three levels of the hierarchy are as follows: Level 1— Quoted prices in active markets for identical assets and liabilities; Level 2— Inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3— Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. At September 30, 2019 and December 31, 2018, we had $10.4 million and $29.0 million in money market funds, respectively. Money market funds are level one balances as they are valued at fair value, which is the closing price reported by the fund sponsor from an actively traded exchange. At September 30, 2019 and December 31, 2018, we did not have any level two or level three assets or liabilities.

Cash, Cash Equivalents, and Res

Cash, Cash Equivalents, and Restricted Cash	9 Months Ended
	Sep. 30, 2019
Cash And Cash Equivalents [Abstract]
Cash, Cash Equivalents, and Restricted Cash	Note 4. Cash, Cash Equivalents, and Restricted Cash The Company’s cash equivalents are highly liquid investments with a maturity of 90 days or less at the date of purchase and include time deposits and investments in money market funds. Restricted cash, long-term includes $5.0 million related to the minimum cash covenant included in the Company’s Credit and Security Agreement (the Credit Agreement) with MidCap Financial Trust, and $2.5 million securing letters of credit, which will be released between March and September 2021. The following table shows our cash, cash equivalents and long-term restricted cash as of September 30, 2019 and December 31, 2018: September 30, December 31, (in thousands) 2019 2018 Cash $ 7,262 $ 6,588 Cash equivalents 10,421 24,047 Restricted cash 7,498 7,448 Total cash, cash equivalents, and restricted cash $ 25,181 $ 38,083

Inventories

Inventories	9 Months Ended
	Sep. 30, 2019
Inventory Disclosure [Abstract]
Inventories	Note 5. Inventories Inventories consist of the following: September 30, December 31, (in thousands) 2019 2018 Raw materials and supplies $ 640 $ 194 Work-in-process 5,469 916 Finished goods 1,373 675 Total inventories $ 7,482 $ 1,785

Leases

Leases	9 Months Ended
	Sep. 30, 2019
Leases [Abstract]
Leases	Note 6. Leases Office Space Lease – Operating We have an operating lease related to our office and laboratory space in Seattle, Washington. This lease was amended and extended in March 2019. The term of the amended lease is through April 2030 and we have two options to extend the lease term, each by five years, as well as a one-time option to terminate the lease in April 2023. We recorded a right-of-use asset for this lease on January 1, 2019 of $1.2 million which reflects the amount of the remaining lease liability, less the balance of accrued and deferred rent, and net of the unamortized balance of tenant incentives. We also recorded a lease liability of $1.9 million, which reflects the present value of the remaining lease payments, discounted using our incremental borrowing rate of 16.95% for the remaining term of the lease. The future expense for this lease will be recorded as a straight-line expense, less the unamortized tenant incentive portion, plus any variable expenses due to true-ups of operating costs or real estate taxes. In August of 2019, we amended the lease to reduce the space included in the original lease to equal the space in the renewed lease. As a result, we recorded an adjustment of $0.1 million to the right-of-use asset and lease liability. As a result of the lease amendment in March 2019, we recorded an increase to our right-of-use asset for this lease amendment of $3.2 million which reflects the amount of the remaining lease liability through April 30, 2023, less the balance of accrued and deferred rent, and net of the unamortized balance of tenant incentives. In March 2019, we also recorded an increase to our lease liability for this lease amendment of $3.2 million which reflects the present value of the remaining lease payments through April 30, 2023, discounted using our incremental borrowing rate of 14.45% for the remaining term of the lease on the date of amendment. The amended lease has a renewal option of two five-year renewals at fair market value as determined at the time of renewal, and a termination option after month thirty-six with nine months written notice. The termination option also requires a penalty equal to the unamortized tenant improvement allowance at 8% interest, the unamortized real estate taxes at 8% interest, and the equivalent of four-months’ rent at the base rent price at the time of termination. The estimated termination penalty has been recorded in our lease payments. We determined we should not include any periods after the termination option when evaluating this amendment as we are not reasonably certain to not exercise the option, therefore we are recording our liability through April 30, 2023. For the three and nine months ended September 30, 2019, we recorded $0.1 million and $0.4 million, respectively, related to variable expenses. Equipment Leases - Operating As of January 1, 2019, we have operating leases for one piece of lab equipment and four copiers in our Seattle, Washington headquarters. We recorded a right-of-use asset of $0.3 million on January 1, 2019 which reflects the remaining liability of the leases, less the balance of accrued and deferred rent. We also recorded a lease liability of $0.3 million which reflects the present value of the remaining payment for the leases, discounted using our incremental borrowing rate for the lab equipment lease is 16.53% and for the copier leases it is 16.19%, for the remaining term of the leases. The future expense for these leases will be straight-line and will include any variable expenses that arise. Equipment Lease – Financing As of January 1, 2019, we had one equipment lease classified as a financing lease as the lease transfers ownership of the underlying asset to us at the end of the lease term. The remaining term of this lease is eleven months and has a remaining expense obligation of less than $0.1 million. There were no financing lease payments in the nine months ended September 30, 2019. Components of lease expense: For the Three Months Ended September 30, For the Nine Months Ended September 30, (in thousands) 2019 2019 Operating lease cost $ 398 $ 1,131 Finance lease cost: Amortization of right-of-use assets 0 3 Interest on lease liabilities 0 1 Total lease cost $ 398 $ 1,135 Right of use assets acquired under operating leases: For the Nine Months Ended September 30, (in thousands) 2019 Operating leases, excluding Seattle office lease $ 345 Seattle office lease, including amendment 4,347 Total operating leases $ 4,692 Lease payments: For the Nine Months Ended September 30, (in thousands) 2019 For operating leases $ 1,296 Future minimum payments as of September 30, 2019 are as follows: (in thousands) 2019 (remainder of year) $ 418 2020 1,480 2021 1,387 2022 1,294 2023 1,399 Total Future minimum lease payments 5,978 Less: imputed interest (1,467 ) Total $ 4,511 The long-term portion of the lease liabilities included in the amounts above is $3.5 million and the remainder of our lease liabilities are included in other current liabilities on our condensed consolidated balance sheets. As of September 30, 2019, the weighted average remaining lease term and weighted discount rate for operating leases was 3.5 years and 14.56%.

Debt

Debt	9 Months Ended
	Sep. 30, 2019
Debt Disclosure [Abstract]
Debt	Note 7. Debt Credit Agreement On August 4, 2016, we entered into a Credit and Security Agreement (Credit Agreement), with MidCap Financial Trust. The original Credit Agreement provided us with up to $35.0 million of available borrowing capacity composed of two tranches of $20.0 million and $15.0 million. The first tranche of $20.0 million was made available to us, and drawn, on the closing date of the Credit Agreement. On September 28, 2017, we and MidCap Financial Trust entered into a second amendment to the Credit Agreement in order to accommodate the sale of our hyperimmune business under the LLC purchase agreement, and to reflect changes in the remaining business as a result of such sale Pursuant to the second Amendment, the agent and the lenders consented to the LLC purchase agreement and the consummation of the sale transaction, released the agent’s liens on the assets transferred to one of our subsidiaries prior to the sale, and agreed that no prepayment of the term loans under the credit agreement would be required as a result the sale. As part of the second amendment, the agent and the lenders agreed that: (i) the commitments of the lenders to make the remaining $15.0 million tranche of loans under the credit agreement were terminated, (ii) the covenant levels set forth in the minimum net commercial product revenue covenant were revised, (iii) a new covenant requiring us to maintain a minimum $10.0 million unrestricted cash balance.. On February 23, 2018, we entered into a third Amendment with the agent and lenders to amend certain provisions of the Credit Agreement in order to permit us to maintain a cash collateral account as security for our reimbursement obligations, in respect of certain letters of credit to be issued for our account. On August 6, 2018, we entered into an Amended and Restated Credit and Security Agreement (Amended Credit Agreement) amending the terms of our original $20 million term loan agreement with MidCap. Under the Amended Credit Agreement, the timeline for us to begin making principal repayments has been extended to February 1, 2020, with an opportunity for further deferral through August 1, 2020. The amount of restricted cash that we are required to maintain on our balance sheet has been reduced from $10 million to $5 million. In January 2019, our unrestricted cash level fell below $25.0 million which triggered the effectiveness of a security agreement in favor of MidCap with respect to our registered intellectual property to secure our obligations under the Amended Credit Agreement. MidCap now holds a security interest in our registered intellectual property and may take ownership of such intellectual property if we do not satisfy our obligations under the Amended Credit Agreement. This facility is subject to a subjective acceleration clause that could be invoked by the lender upon the occurrence of any event the lender deems to have a material adverse effect on our ability to repay the lender. As a result of the uncertainty related to our ability to continue as a going concern and the assessment that the material adverse change clause under the Amended Credit agreement is not within the Company’s control, the long-term portion of our outstanding debt has been reclassified to current in these financial statements as of September 30, 2019. We have not been notified of an event of default by MidCap as of the date of the filing of this Quarterly Report on Form 10-Q. The obligations under the Amended Credit Agreement will mature on February 1, 2023. Amounts drawn under the Amended Credit Agreement continue to accrue interest at a rate of LIBOR plus 7.60% per annum.

Net Loss Per Share

Net Loss Per Share	9 Months Ended
	Sep. 30, 2019
Earnings Per Share [Abstract]
Net Loss Per Share	Note 8. Net Loss per Share Basic net loss per share is calculated by dividing the net loss by the weighted average number of common shares outstanding for the period. Diluted net loss per share is computed by dividing the net loss by the weighted average number of common share equivalents outstanding for the period using the as-if converted method. For the purpose of this calculation, warrants, stock options and restricted stock units (RSUs) are only included in the calculation of diluted net income per share when their effect is dilutive. Common stock equivalents include warrants, stock options and unvested RSUs. The following table represents all potentially dilutive shares, which were all anti-dilutive and therefore excluded from the calculation of diluted net loss per share: As of September 30, (in thousands) 2019 2018 Warrants 22,000 — Outstanding options to purchase common stock 4,015 3,358 Unvested RSUs — 139

Equity

Equity	9 Months Ended
	Sep. 30, 2019
Equity [Abstract]
Equity	Note 9. Equity C ommon Stock On March 11, 2019, we completed a public offering of common stock and warrants, as follows: • for a combined public offering price of $1.00 per share of common stock and related warrants, 19,850,000 shares of common stock and related warrants with a 5-year life to purchase up to 19,850,000 shares of common stock at an exercise price of $1.30 per share, • for a combined public offering price of $0.99 per pre-funded warrant and related warrant, pre-funded warrants with a 10-year life to purchase up to 2,150,000 shares of common stock at an exercise price of $0.01 per share and related warrants with a 5-year life to purchase up to 2,150,000 shares of common stock at an exercise price of $1.30 per share. These pre-funded warrants were exercised on March 21, 2019. We received net proceeds of $20.2 million, net of transaction costs, as a result of this offering. For the nine months ended September 30, 2019, we issued 94,540 shares of common stock due to the vesting of RSUs. During the nine months ended September 30, 2018, we received proceeds of $0.6 million upon the exercise of stock options which resulted in the issuance of 257,550 shares of common stock and issued 814,004 shares of common stock due to the vesting of restricted stock units. Purchase Agreement On December 20, 2018, we entered into the Purchase Agreement, and a registration rights agreement, with Lincoln Park, pursuant to this agreement Lincoln Park has committed to purchase up to $35.0 million worth of our common stock over a 36-month period commencing on February 13, 2019, the date the registration statement covering the resale of the shares was deemed effective by the SEC. Pursuant to this purchase agreement we issued 105,467 commitment shares of common stock in December 2018, and 195,867 commitment shares of common stock in the first quarter of 2019. Equity Distribution Agreement On November 9, 2017, we entered into an Equity Distribution Agreement (the Equity Distribution Agreement) with Piper Jaffray. The Equity Distribution Agreement provides that, upon the terms and subject to the conditions set forth therein, we may issue and sell through Piper Jaffray, acting as sales agent, shares of our common stock, $0.001 par value per share (the Common Stock) having an aggregate offering price of up to $17.5 million. We have no obligation to sell any such shares under the Equity Distribution Agreement. The sale of such shares of common stock by Piper Jaffray have been and will be effected pursuant to a Registration Statement on Form S-3 which we filed on November 9, 2017. We issued 13,265 shares under the Equity Distribution Agreement in the fourth quarter of 2018, and 180,421 C onverted Equity Awards Incentive Plan In connection with the spin-off from Emergent BioSolutions, Inc. (Emergent) in August 2016, we adopted the Converted Equity Awards Incentive Plan (Converted Plan) and outstanding equity awards of Emergent held by Aptevo employees were converted into or replaced with equity awards of Aptevo (Conversion Awards) under the Converted Plan and were adjusted to maintain the economic value before and after the distribution date using the relative fair market value of the Emergent and Aptevo common stock based on the closing prices as of August 1, 2016. A total of 1.3 million shares of Aptevo common stock have been authorized for issuance under the Converted Plan. Options issued as Conversion Awards were priced according to the Converted Plan. RSUs issued as part of the Converted Plan provide for the issuance of a share of Aptevo’s stock at no cost to the holder. 2016 Stock Incentive Plan On August 1, 2016, the Company adopted the 2016 Stock Incentive Plan (2016 SIP). A total of 3.1 million shares of Aptevo common stock have been authorized for issuance under the 2016 SIP in the form of equity stock options. Stock options under the 2016 SIP generally vest pro rata over a three-year period and terminate ten years from the grant date, though the specific terms of each grant are determined individually. The Company’s executive officers and certain other employees may be awarded options with different vesting criteria, and options granted to non-employee directors also vest over a three-year period. Option exercise prices for new options granted by the Company equal the closing price of the Company’s common stock on the Nasdaq Capital Market on the date of grant. RSUs issued under the 2016 SIP provide for the issuance of a share of the Company’s common stock at no cost to the holder. RSUs granted to employees under the 2016 SIP generally provide for time-based vesting over an eighteen-month to three-year period, although certain employees may be awarded RSUs with different time-based vesting criteria. Prior to vesting, RSUs granted under the 2016 SIP do not have dividend equivalent rights, do not have voting rights and the shares underlying the RSUs are not considered issued or outstanding. The equity compensation awards granted by the Company generally vest only if the employee is employed by the Company (or in the case of directors, the director continues to serve on the Board) on the vesting date. On May 31, 2017, at the 2017 Annual Meeting of Stockholders (Annual Meeting), the Company’s stockholders approved the amendment and restatement of the Company’s 2016 SIP (Restated 2016 Plan) to, among other things, increase the number of authorized shares issuable by 1.3 million shares of Aptevo common stock. The Restated 2016 Plan was previously approved, subject to stockholder approval, by the Board of Directors of the Company. 2018 Stock Incentive Plan On June 1, 2018, at the 2018 Annual Meeting, the Company’s stockholders approved a new 2018 Stock Incentive Plan (2018 SIP), which replaced the Restated 2016 Plan on a go-forward basis. All stock options, RSUs or other equity awards granted subsequent to June 1, 2018 will be issued out of the 2018 SIP, which has 2.9 million shares of Aptevo common stock authorized for issuance. The 2018 Plan became effective immediately upon stockholder approval at the Annual Meeting. Any shares subject to outstanding stock awards granted under the 2016 SIP that (a) expire or terminate for any reason prior to exercise or settlement; (b) are forfeited because of the failure to meet a contingency or condition required to vest such shares or otherwise return to the Company; or (c) otherwise would have returned to the 2016 SIP for future grant pursuant to the terms of the 2016 Plan (such shares, the “Returning Shares”) will immediately be added to the share reserve under the 2018 SIP as and when such shares become Returning Shares, up to a maximum of 3,711,620 shares. The 2018 SIP was previously approved, subject to stockholder approval, by the Board of Directors of the Company. As of September 30, 2019, there are 2.0 million shares available to be granted under the 2018 SIP. Stock options under the 2018 SIP generally vest pro rata over a three-year period and terminate ten years from the grant date, though the specific terms of each grant are determined individually. The Company’s executive officers and certain other employees may be awarded options with different vesting criteria, and options granted to non-employee directors also vest over a three-year period. Option exercise prices for new options granted by the Company equal the closing price of the Company’s common stock on the Nasdaq Capital Market on the date of grant. Stock-Based Compensation Expense Stock-based compensation expense includes amortization of stock options and RSUs granted to employees and has been reported in our condensed consolidated statements of operations as follows: For the Three Months Ended September 30, For the Nine Months Ended September 30, (in thousands) 2019 2018 2019 2018 Research and development $ 102 $ 190 $ 450 $ 695 Selling, general and administrative 232 291 $ 879 952 Total stock-based compensation expense $ 334 $ 481 $ 1,329 $ 1,647 Management has applied an estimated forfeiture rate of 10% for the periods presented. Stock Options Aptevo utilizes the Black-Scholes valuation model for estimating the fair value of all stock options granted. Set forth below are the assumptions used in valuing the stock options granted: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2019 2018 2019 2018 Expected dividend yield 0.00% 0.00% 0.00% 0.00% Expected volatility 75.00% 75.00% 75.00% 75.00% Risk-free interest rate 1.78% 2.78% 2.42% 2.73% Expected average life of options 6 years 6 years 6 years 6 years The following is a summary of option activity for the nine months ended September 30, 2019: Number of Shares Weighted- Average Exercise Price Weighted- Average Remaining Term Aggregate Intrinsic Value Balance at December 31, 2018 3,329,618 $ 2.74 — $ — Granted 979,223 1.39 — — Exercised — — — — Forfeited and expired (293,994 ) 2.28 — — Outstanding at September 30, 2019 4,014,847 $ 2.46 7.02 $ — Exercisable at September 30, 2019 2,252,157 $ 2.64 5.60 $ — As of September 30, 2019, we had $1.9 million of unrecognized compensation expense related to options expected to vest over a weighted average period of 1.7 years. The weighted average remaining contractual life of outstanding and exercisable options is 5.6 years. The aggregate intrinsic value in the table above represents the total pretax intrinsic value (the difference between the closing stock price of Aptevo’s common stock on the last trading day of September 2019 and the exercise price, multiplied by the number of in the money options) that would have been received by the option holders had all the option holders exercised their options on the last trading day of the quarter. As of December 31, 2018 and September 30, 2019, we had no outstanding options with an exercise price below the trading price of our common stock. Restricted Stock Units The following is a summary of RSU activity for the nine months ended September 30, 2019: Number of Units Weighted Average Fair Value per Unit Aggregate Fair Value Balance at December 31, 2018 133,040 $ 2.97 $ 168,961 Vested 133,040 2.97 — Forfeited — — — Outstanding at September 30, 2019 — $ — $ — Expected to Vest — $ — $ — As of September 30, 2019, there was no unrecognized stock-based compensation expense related to unvested RSUs. The fair value of each RSU has been determined to be the closing trading price of the Company’s common stock on the date of grant as quoted on the Nasdaq Capital Market. Warrants In March 2019, as part of a public offering, we issued warrants to purchase up to 24,150,000 shares of our common stock, 22,000,000 of which have an exercise price of $1.30 per share and have a five-year life, and 2,150,000 of pre-funded warrants with an exercise price of $0.01 per share. The pre-funded warrants had a ten-year life and would have expired on March 11, 2029; however, the pre-funded warrants were exercised in March 2019. We determined the warrants do not meet liability classification pursuant to ASC 480 – Distinguishing Liabilities from Equity. They are therefore included within equity on our consolidated balance sheet. As of September 30, 2019, there were 22,000,000 warrants outstanding.

Revenue Reserves

Revenue Reserves	9 Months Ended
	Sep. 30, 2019
Revenue From Contract With Customer [Abstract]
Revenue Reserves	Note 10. Revenue Reserves The following table summarizes activity in each of our product revenue allowance and reserve categories for the nine months ending September 30, 2019: (in thousands) Chargebacks and Cash Discounts Distribution Fees, Rebates and Patient Assistance Balance at December 31, 2018 $ (1,323 ) $ (865 ) Provision related to current period sales (2,600 ) (2,047 ) Credit or payments made during the period 2,584 2,044 Balance at September 30, 2019 $ (1,339 ) $ (868 )

Discontinued Operations _ Miles

Discontinued Operations – Milestone Payment	9 Months Ended
	Sep. 30, 2019
Discontinued Operations Milestone Payment [Abstract]
Discontinued Operations - Milestone Payment	Note 11. Discontinued Operations – Milestone Payment In the third quarter of 2019, we received a $4.25 million milestone payment from Saol International Limited

Nature of Business and Signif_2

Nature of Business and Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2019
Accounting Policies [Abstract]
Leases	Leases On January 1, 2019 we adopted ASU No. 2016-02, Leases (ASC 842), which amended the existing standards for lease accounting, requiring lessees to recognize most leases on their balance sheets and disclose key information about leasing arrangements. We adopted the new standard using a modified retrospective transition approach at the beginning of the current fiscal year, January 1, 2019. We did not adjust comparative periods in our financial statements prior to that period. For transition leases, entities were permitted to make an election to apply a package of practical expedients that allows entities not to reassess (i) whether any expired or existing contracts are or contain leases, (ii) lease classification for any expired or existing leases, and (iii) whether initial direct costs for any expired or existing leases qualify for capitalization under ASC 842. In addition, entities were also permitted to make an election to use hindsight when determining lease terms and when assessing the impairment of right-of-use assets. We have chosen to elect the package of practical expedients but did not elect the hindsight practical expedient for our transition leases. We determine if an arrangement is a lease at inception date. Leases are to be classified as finance or operating at the lease commencement date, which affects the classification of expense recognition in the income statement. Right-of-use assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments, as agreed to in the lease. Operating lease liabilities and the corresponding right-of-use assets are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. An operating right-of-use asset is measured as the amount of the initial measurement of the lease liability, adjusted for prepaid or accrued lease payments, the remaining balance of any lease incentive received, unamortized initial direct costs, and any impairment of the right-of-use asset. The initial measurement of the lease liabilities and right-to-use assets of finance leases is the same as for operating leases. We include options to extend the lease and certain termination options in our lease liability and right-of-use asset when it is reasonably certain that we will exercise those options. As our existing leases do not contain an implicit interest rate, we estimate our incremental borrowing rate (IBR) based on information available at commencement date in determining the present value of future payments. Due to the significant judgment involved and the complex analysis needed to determine this discount rate, we engaged a third-party valuation specialist to advise us in our determination of our IBR for the initial adoption of the standard. Lease expense for operating leases is recognized on a straight-line basis over the lease term as part of our selling, general and administrative expenses and our research and development expenses on our consolidated statement of operations. Lease expense for financing leases consists of amortization of the right-of-use asset and interest on the lease liability as part of our research and development expenses on our consolidated statement of operations. Adoption of the new standard resulted in the recognition of a right-to-use asset of $1.5 million, an operating lease liability of $2.2 million dollars, and a related decrease in deferred rent liability of $0.7 million at January 1, 2019. Refer to Note 6 for additional information.
Stock-Based Compensation	Stock-Based Compensation Stock-based compensation expense is recognized for all share-based payments made to employees, directors and non-employees based on estimated fair values as of the date of grant. The fair value of our stock options is calculated using the Black-Scholes option-pricing model which requires judgmental assumptions including volatility, risk-free rates and expected option life. We recognize stock-based compensation expense on a straight-line basis over the requisite service period, net of an estimated forfeiture rate.
Other Significant Accounting Policies	O ther Significant Accounting Policies Our other significant accounting policies were reported in our Annual Report on Form 10-K for the year ended December 31, 2018 that was filed with the SEC on March 18, 2019. Our other significant accounting policies have not changed materially from the policies previously reported.
Recent Accounting Pronouncements Not Yet Adopted	Recent Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses, (Topic 326) which changes how entities account for credit losses on most financial assets and certain other instruments, and expands disclosures. The standard is effective for annual and interim periods beginning after December 15, 2022, with early adoption permitted, for Aptevo, as we meet the definition of a smaller reporting company (SRC). We expect to adopt the standard on January 1, 2020 and are still in the process of evaluating the effect of adoption on our consolidated financial statements and disclosures. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”), which modifies the disclosure requirements for fair value measurements. The new standard is effective for the Company on January 1, 2020. Early adoption is permitted. We are evaluating the impact the adoption of ASU 2018-13 may have on our disclosures.

Cash, Cash Equivalents, and R_2

Cash, Cash Equivalents, and Restricted Cash (Tables)	9 Months Ended
	Sep. 30, 2019
Cash And Cash Equivalents [Abstract]
Schedule of Cash, Cash Equivalents and Long-term Restricted Cash	The following table shows our cash, cash equivalents and long-term restricted cash as of September 30, 2019 and December 31, 2018: September 30, December 31, (in thousands) 2019 2018 Cash $ 7,262 $ 6,588 Cash equivalents 10,421 24,047 Restricted cash 7,498 7,448 Total cash, cash equivalents, and restricted cash $ 25,181 $ 38,083

Inventories (Tables)

Inventories (Tables)	9 Months Ended
	Sep. 30, 2019
Inventory Disclosure [Abstract]
Schedule of Inventories	Inventories consist of the following: September 30, December 31, (in thousands) 2019 2018 Raw materials and supplies $ 640 $ 194 Work-in-process 5,469 916 Finished goods 1,373 675 Total inventories $ 7,482 $ 1,785

Leases (Tables)

Leases (Tables)	9 Months Ended
	Sep. 30, 2019
Leases [Abstract]
Components of Lease Expense	Components of lease expense: For the Three Months Ended September 30, For the Nine Months Ended September 30, (in thousands) 2019 2019 Operating lease cost $ 398 $ 1,131 Finance lease cost: Amortization of right-of-use assets 0 3 Interest on lease liabilities 0 1 Total lease cost $ 398 $ 1,135
Summary of Right of Use Assets Acquired Under Operating Leases	Right of use assets acquired under operating leases: For the Nine Months Ended September 30, (in thousands) 2019 Operating leases, excluding Seattle office lease $ 345 Seattle office lease, including amendment 4,347 Total operating leases $ 4,692 Lease payments: For the Nine Months Ended September 30, (in thousands) 2019 For operating leases $ 1,296
Summary of Future Minimum Lease Payments	Future minimum payments as of September 30, 2019 are as follows: (in thousands) 2019 (remainder of year) $ 418 2020 1,480 2021 1,387 2022 1,294 2023 1,399 Total Future minimum lease payments 5,978 Less: imputed interest (1,467 ) Total $ 4,511

Net Loss Per Share (Tables)

Net Loss Per Share (Tables)	9 Months Ended
	Sep. 30, 2019
Earnings Per Share [Abstract]
Summary of Potentially Dilutive Shares Excluded from Calculation of Net Loss Per Share	The following table represents all potentially dilutive shares, which were all anti-dilutive and therefore excluded from the calculation of diluted net loss per share: As of September 30, (in thousands) 2019 2018 Warrants 22,000 — Outstanding options to purchase common stock 4,015 3,358 Unvested RSUs — 139

Equity (Tables)

Equity (Tables)	9 Months Ended
	Sep. 30, 2019
Equity [Abstract]
Summary of Stock-based Compensation Expense Includes Amortization of Stock Options and Restricted Stock Units Granted	Stock-based compensation expense includes amortization of stock options and RSUs granted to employees and has been reported in our condensed consolidated statements of operations as follows: For the Three Months Ended September 30, For the Nine Months Ended September 30, (in thousands) 2019 2018 2019 2018 Research and development $ 102 $ 190 $ 450 $ 695 Selling, general and administrative 232 291 $ 879 952 Total stock-based compensation expense $ 334 $ 481 $ 1,329 $ 1,647
Assumptions used in Valuing the Stock Options Granted under Black-Scholes Valuation Model	Aptevo utilizes the Black-Scholes valuation model for estimating the fair value of all stock options granted. Set forth below are the assumptions used in valuing the stock options granted: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2019 2018 2019 2018 Expected dividend yield 0.00% 0.00% 0.00% 0.00% Expected volatility 75.00% 75.00% 75.00% 75.00% Risk-free interest rate 1.78% 2.78% 2.42% 2.73% Expected average life of options 6 years 6 years 6 years 6 years
Summary of Stock Option Activity	The following is a summary of option activity for the nine months ended September 30, 2019: Number of Shares Weighted- Average Exercise Price Weighted- Average Remaining Term Aggregate Intrinsic Value Balance at December 31, 2018 3,329,618 $ 2.74 — $ — Granted 979,223 1.39 — — Exercised — — — — Forfeited and expired (293,994 ) 2.28 — — Outstanding at September 30, 2019 4,014,847 $ 2.46 7.02 $ — Exercisable at September 30, 2019 2,252,157 $ 2.64 5.60 $ —
Summary of RSU Activity	The following is a summary of RSU activity for the nine months ended September 30, 2019: Number of Units Weighted Average Fair Value per Unit Aggregate Fair Value Balance at December 31, 2018 133,040 $ 2.97 $ 168,961 Vested 133,040 2.97 — Forfeited — — — Outstanding at September 30, 2019 — $ — $ — Expected to Vest — $ — $ —

Revenue Reserves (Tables)

Revenue Reserves (Tables)	9 Months Ended
	Sep. 30, 2019
Revenue From Contract With Customer [Abstract]
Summary of Product Revenue Allowance and Reserve Categories	The following table summarizes activity in each of our product revenue allowance and reserve categories for the nine months ending September 30, 2019: (in thousands) Chargebacks and Cash Discounts Distribution Fees, Rebates and Patient Assistance Balance at December 31, 2018 $ (1,323 ) $ (865 ) Provision related to current period sales (2,600 ) (2,047 ) Credit or payments made during the period 2,584 2,044 Balance at September 30, 2019 $ (1,339 ) $ (868 )

Nature of Business and Signif_3

Nature of Business and Significant Accounting Policies - Additional Information (Details) $ in Thousands	Jan. 01, 2019USD ($)	Sep. 30, 2019USD ($)ProductSegment	Dec. 31, 2018USD ($)
Nature Of Business [Line Items]
Number of revenue-generating product | Product		1
Number of operating segments | Segment		1
Cash, cash equivalents, short-term investments and restricted cash		$ 25,181	$ 38,083
Accumulated deficit		159,682	$ 127,408
Operating lease right-of-use asset		3,981
Operating lease liability		$ 4,511
ASU No. 2016-02
Nature Of Business [Line Items]
Operating lease right-of-use asset	$ 1,500
Operating lease liability	2,200
Decrease in deferred rent liability	$ 700

Collaboration Agreements - Addi

Collaboration Agreements - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Reduction in research and development expense	$ 1	$ 0.2	$ 1.6	$ 0.4

Fair Value Measurements - Addit

Fair Value Measurements - Additional Information (Details) - USD ($)	Sep. 30, 2019	Dec. 31, 2018
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Money market funds	$ 10,400,000	$ 29,000,000
Level Two
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair value assets	0	0
Level Three
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair value assets	$ 0	$ 0

Cash, Cash Equivalents and Rest

Cash, Cash Equivalents and Restricted Cash - Additional Information (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2019	Dec. 31, 2018	Dec. 31, 2017
Restricted Cash And Cash Equivalents Items [Line Items]
Long-term restricted cash	$ 7,498	$ 7,448	$ 10,000
Maximum
Restricted Cash And Cash Equivalents Items [Line Items]
Cash equivalents, maturity period	90 days
Letter of Credit
Restricted Cash And Cash Equivalents Items [Line Items]
Long-term restricted cash	$ 2,500
Covenant of MidCap Loan Agreement
Restricted Cash And Cash Equivalents Items [Line Items]
Long-term restricted cash	$ 5,000

Cash, Cash Equivalents and Re_2

Cash, Cash Equivalents and Restricted Cash - Schedule of Cash, Cash Equivalents and Long-term Restricted Cash (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018	Dec. 31, 2017
Cash And Cash Equivalents [Abstract]
Cash	$ 7,262	$ 6,588
Cash equivalents	10,421	24,047
Restricted cash	7,498	7,448	$ 10,000
Total cash, cash equivalents, and restricted cash	$ 25,181	$ 38,083

Inventories - Schedule of Inven

Inventories - Schedule of Inventories (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Inventory Adjustments [Abstract]
Raw materials and supplies	$ 640	$ 194
Work-in-process	5,469	916
Finished goods	1,373	675
Total inventories	$ 7,482	$ 1,785

Leases - Additional Information

Leases - Additional Information (Details)	Mar. 19, 2019RenewalOption	Jan. 01, 2019USD ($)PieceCopierEquipment	Aug. 31, 2019USD ($)	Mar. 31, 2019USD ($)	Sep. 30, 2019USD ($)	Sep. 30, 2019USD ($)
Lessee Lease Description [Line Items]
Operating lease right-of-use asset					$ 3,981,000	$ 3,981,000
Operating lease liability					4,511,000	$ 4,511,000
Operating lease number of piece for lab equipment | Piece		1
Operating lease number of copiers | Copier		4
Financing lease number of equipment | Equipment		1
Financing lease remaining term						11 months
Financing lease remaining expense obligation					0	$ 1,000
Financing lease payments						0
Long term portion of operating lease liabilities					$ 3,547,000	$ 3,547,000
Weighted average remaining lease term for operating leases					3 years 6 months	3 years 6 months
Weighted discount rate for operating leases					14.56%	14.56%
Maximum
Lessee Lease Description [Line Items]
Operating lease right-of-use asset					$ 300,000	$ 300,000
Operating lease liability					300,000	300,000
Minimum
Lessee Lease Description [Line Items]
Financing lease remaining expense obligation						100,000
Office Space Lease
Lessee Lease Description [Line Items]
Initial operating lease term date	2030-04
Operating lease renewal option description	The term of the amended lease is through April 2030 and we have two options to extend the lease term, each by five years, as well as a one-time option to terminate the lease in April 2023.
Operating lease renewal option term	5 years
Number of operating lease renewal option | RenewalOption	2
Operating lease option to extend	true
Variable expense					100,000	400,000
Office Space Lease | Amended Seven Operating Lease
Lessee Lease Description [Line Items]
Number of operating lease renewal option | RenewalOption	2
Operating lease right-of-use asset		$ 1,200,000
Operating lease liability					$ 1,900,000	$ 1,900,000
Operating lease, discounted incremental borrowing rate	14.45%				16.95%	16.95%
Adjustment to right to use asset and operating lease liability			$ 100,000
Operating lease termination option written notice period	9 months
Operating lease termination option unamortized tenant improvement allowance interest rate	8.00%
Operating lease termination option unamortized real estate taxes interest rate	8.00%
Office Space Lease | Amended Seven Operating Lease | Renewal Option Two
Lessee Lease Description [Line Items]
Operating lease renewal option term					5 years	5 years
Office Space Lease | Amended Seven Operating Lease | Maximum
Lessee Lease Description [Line Items]
Operating lease right-of-use asset				$ 3,200,000
Operating lease liability				$ 3,200,000
Lab Equipment Lease
Lessee Lease Description [Line Items]
Operating lease, discounted incremental borrowing rate					16.53%	16.53%
Copier Leases
Lessee Lease Description [Line Items]
Operating lease, discounted incremental borrowing rate					16.19%	16.19%

Leases - Components of Lease Ex

Leases - Components of Lease Expense (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2019
Leases [Abstract]
Operating lease cost	$ 398	$ 1,131
Finance lease cost:
Amortization of right-of-use assets	0	3
Interest on lease liabilities	0	1
Total lease cost	$ 398	$ 1,135

Leases - Summary of Right of Us

Leases - Summary of Right of Use Assets Acquired Under Operating Leases (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2019USD ($)
Lessee Lease Description [Line Items]
Total operating leases	$ 4,692
For operating leases	1,296
Operating Leases, Excluding Seattle Office Lease
Lessee Lease Description [Line Items]
Total operating leases	345
Seattle Office Lease, Including Amendment
Lessee Lease Description [Line Items]
Total operating leases	$ 4,347

Leases - Summary of Future Mini

Leases - Summary of Future Minimum Lease Payments (Details) $ in Thousands	Sep. 30, 2019USD ($)
Leases [Abstract]
2019 (remainder of year)	$ 418
2020	1,480
2021	1,387
2022	1,294
2023	1,399
Total Future minimum lease payments	5,978
Less: imputed interest	(1,467)
Total	$ 4,511

Debt - Additional Information (

Debt - Additional Information (Details) - USD ($)	Aug. 06, 2018	Sep. 28, 2017	Jun. 30, 2019	Sep. 30, 2019	Jan. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Aug. 04, 2016
Line Of Credit Facility [Line Items]
Maximum borrowing capacity								$ 35,000,000
Unrestricted cash balance				$ 7,262,000		$ 6,588,000
Long-term restricted cash				$ 7,498,000		$ 7,448,000	$ 10,000,000
Amended Credit Agreement
Line Of Credit Facility [Line Items]
Maximum borrowing capacity	$ 20,000,000
Line of credit, repayment begin date	Feb. 1, 2020
Line of credit, repayment deferral begin date	Aug. 1, 2020
Long-term restricted cash	$ 5,000,000
Credit agreement, maturity date	Feb. 1, 2023
Credit agreement reference rate for the variable rate			LIBOR
Credit agreement basis spread on variable rate	7.60%
Maximum | Amended Credit Agreement
Line Of Credit Facility [Line Items]
Unrestricted cash balance					$ 25,000,000
Credit Agreement First Tranche
Line Of Credit Facility [Line Items]
Maximum borrowing capacity								20,000,000
Credit facility available and drawn								20,000,000
Credit Agreement Second Tranche
Line Of Credit Facility [Line Items]
Maximum borrowing capacity								$ 15,000,000
Prepayment of term loans		$ 0
Terminated maximum borrowing capacity		15,000,000
Credit Agreement Second Tranche | Minimum
Line Of Credit Facility [Line Items]
Unrestricted cash balance		$ 10,000,000

Net Loss Per Share - Summary of

Net Loss Per Share - Summary of Potentially Dilutive Shares Excluded from Calculation of Net Loss Per Share (Details) - shares shares in Thousands	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Warrants
Schedule Of Earnings Per Share Basic And Diluted [Line Items]
Anti-dilutive shares excluded from calculation of diluted net loss per share	22,000
Outstanding Options to Purchase Common Stock
Schedule Of Earnings Per Share Basic And Diluted [Line Items]
Anti-dilutive shares excluded from calculation of diluted net loss per share	4,015	3,358
Unvested RSUs
Schedule Of Earnings Per Share Basic And Diluted [Line Items]
Anti-dilutive shares excluded from calculation of diluted net loss per share		139

Equity - Additional Information

Equity - Additional Information (Details) - USD ($)

Mar. 11, 2019

Jun. 01, 2018

Nov. 09, 2017

Aug. 01, 2016

Mar. 31, 2019

Dec. 31, 2018

Dec. 20, 2018

Sep. 30, 2019

Mar. 31, 2019

Dec. 31, 2018

Sep. 30, 2018

Sep. 30, 2019

Sep. 30, 2018

May 31, 2017

Share Based Compensation Arrangement By Share Based Payment Award [Line Items]

Pre funded warrants outstanding, term

10 years

Proceeds from issuance of warrants

$ 200,000

Proceeds upon exercise of stock options

$ 572,000

Issuance of common stock, net

$ 136,000

Common stock, par value

$ 0.001

$ 0.001

$ 0.001

$ 0.001

Number of shares, outstanding

0

0

0

0

Pre funded warrants expire date

Mar. 11, 2029

RSUs

Share Based Compensation Arrangement By Share Based Payment Award [Line Items]

Unrecognized compensation expense

$ 0

$ 0

Stock Option

Share Based Compensation Arrangement By Share Based Payment Award [Line Items]

Estimated forfeiture rate

10.00%

Unrecognized compensation expense

$ 1,900,000

$ 1,900,000

Options expected to vest, weighted average period

1 year 8 months 12 days

Options outstanding and exercisable weighted average remaining contractual life

5 years 7 months 6 days

Number of shares, outstanding

3,329,618

4,014,847

3,329,618

4,014,847

2016 Stock Incentive Plan

Share Based Compensation Arrangement By Share Based Payment Award [Line Items]

Stock authorized for issuance under Stock Plan

3,100,000

Stock plan vesting period

3 years

Stock plan termination period

10 years

2016 Stock Incentive Plan | RSUs

Share Based Compensation Arrangement By Share Based Payment Award [Line Items]

Increase of authorized shares issuable

1,300,000

2016 Stock Incentive Plan | Non-employee Directors

Share Based Compensation Arrangement By Share Based Payment Award [Line Items]

Stock plan vesting period

3 years

2018 Stock Incentive Plan | RSUs

Share Based Compensation Arrangement By Share Based Payment Award [Line Items]

Stock authorized for issuance under Stock Plan

2,900,000

Stock plan vesting period

3 years

Stock plan termination period

10 years

Maximum number of returning shares from old plan to be add to shares reserve

3,711,620

Number of shares available for grant

2,000,000

2,000,000

2018 Stock Incentive Plan | Non-employee Directors | RSUs

Share Based Compensation Arrangement By Share Based Payment Award [Line Items]

Stock plan vesting period

3 years

Equity Distribution Agreement

Share Based Compensation Arrangement By Share Based Payment Award [Line Items]

Common stock, par value

$ 0.001

Issuance of common stock shares

13,265

180,421

Proceeds from Issuance of Common Stock

$ 17,300,000

Tranche Two

Share Based Compensation Arrangement By Share Based Payment Award [Line Items]

Number of common stock to be issued exercise of prefunded warrants

2,150,000

Pre funded warrants exercise price, per share

$ 0.01

Common Stock

Share Based Compensation Arrangement By Share Based Payment Award [Line Items]

Shares issued price per share

$ 1

Number of warrants issued

19,850,000

Warrants outstanding, term

5 years

Warrants exercise price, per share

$ 1.30

Pre funded warrant issued price, per share

$ 0.99

Pre funded warrants outstanding, term

10 years

Pre funded warrants exercise price, per share

$ 0.01

Proceeds from issuance of warrants

$ 20,200,000

Common stock issued upon vesting of restricted stock units (in shares)

5,933

94,540

814,004

Proceeds upon exercise of stock options

$ 600,000

Common stock issued upon exercise of stock options

3,464

257,550

Common stock issued upon vesting of restricted stock units

814,004

Issuance of commitment shares of common stock, non-cash transaction (in shares)

195,867

Issuance of common stock shares

180,421

Common Stock | Converted Equity Awards Incentive Plan

Share Based Compensation Arrangement By Share Based Payment Award [Line Items]

Stock authorized for issuance under Stock Plan

1,300,000

Common Stock | Purchase Agreement

Share Based Compensation Arrangement By Share Based Payment Award [Line Items]

Issuance of common stock, net

$ 35,000,000

Issuance of commitment shares of common stock, non-cash transaction (in shares)

105,467

195,867

Common Stock | Tranche One

Share Based Compensation Arrangement By Share Based Payment Award [Line Items]

Warrants outstanding, term

5 years

Warrants exercise price, per share

$ 1.30

Warrants

Share Based Compensation Arrangement By Share Based Payment Award [Line Items]

Warrants outstanding, term

5 years

5 years

Warrants outstanding

22,000,000

22,000,000

Warrants | Tranche One

Share Based Compensation Arrangement By Share Based Payment Award [Line Items]

Number of warrants issued

22,000,000

Warrants exercise price, per share

$ 1.30

$ 1.30

Maximum | 2016 Stock Incentive Plan | RSUs

Share Based Compensation Arrangement By Share Based Payment Award [Line Items]

Stock plan vesting period

3 years

Maximum | Common Stock

Share Based Compensation Arrangement By Share Based Payment Award [Line Items]

Number of common stock to be issued up conversion of warrants

19,850,000

Number of common stock to be issued exercise of prefunded warrants

2,150,000

Maximum | Common Stock | Equity Distribution Agreement

Share Based Compensation Arrangement By Share Based Payment Award [Line Items]

Aggregate offering price

$ 17,500,000

Maximum | Common Stock | Tranche One

Share Based Compensation Arrangement By Share Based Payment Award [Line Items]

Number of common stock to be issued up conversion of warrants

2,150,000

Maximum | Warrants

Share Based Compensation Arrangement By Share Based Payment Award [Line Items]

Number of common stock to be issued up conversion of warrants

24,150,000

24,150,000

Minimum | 2016 Stock Incentive Plan | RSUs

Share Based Compensation Arrangement By Share Based Payment Award [Line Items]

Stock plan vesting period

18 months

Equity - Summary of Stock-based

Equity - Summary of Stock-based Compensation Expense Includes Amortization of Stock Options and Restricted Stock Units Granted (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	$ 334	$ 481	$ 1,329	$ 1,647
Research and Development
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	102	190	450	695
Selling, General and Administrative
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	$ 232	$ 291	$ 879	$ 952

Equity - Assumptions used in Va

Equity - Assumptions used in Valuing the Stock Options Granted under Black-Scholes Valuation Model (Details) - Stock Option	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Expected dividend yield	0.00%	0.00%	0.00%	0.00%
Expected volatility	75.00%	75.00%	75.00%	75.00%
Risk-free interest rate	1.78%	2.78%	2.42%	2.73%
Expected average life of options	6 years	6 years	6 years	6 years

Equity - Summary of Stock Optio

Equity - Summary of Stock Option Activity (Details)	9 Months Ended
	Sep. 30, 2019$ / sharesshares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of Shares, Outstanding, Beginning balance	0
Number of Shares, Outstanding, Ending balance	0
Stock Option
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of Shares, Outstanding, Beginning balance	3,329,618
Number of Shares, Granted	979,223
Number of Shares, Forfeited and expired	(293,994)
Number of Shares, Outstanding, Ending balance	4,014,847
Number of Shares, Exercisable	2,252,157
Weighted-Average Exercise Price, Outstanding, Beginning balance | $ / shares	$ 2.74
Weighted-Average Exercise Price, Granted | $ / shares	1.39
Weighted-Average Exercise Price, Forfeited and expired | $ / shares	2.28
Weighted-Average Exercise Price, Outstanding, Ending balance | $ / shares	2.46
Weighted-Average Exercise Price, Exercisable | $ / shares	$ 2.64
Weighted-Average Remaining Term, Outstanding	7 years 7 days
Weighted-Average Remaining Term, Exercisable	5 years 7 months 6 days

Equity - Summary of Restricted

Equity - Summary of Restricted Stock Activity (Details) - RSUs	9 Months Ended
	Sep. 30, 2019USD ($)$ / sharesshares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of Units, Outstanding, Beginning balance | shares	133,040
Number of Units, Vested | shares	133,040
Weighted Average Fair Value per Unit, Outstanding Beginning Balance | $ / shares	$ 2.97
Weighted Average Fair Value per Unit, Vested | $ / shares	$ 2.97
Aggregate Fair Value, Outstanding, Beginning balance | $	$ 168,961

Revenue Reserves - Summary of P

Revenue Reserves - Summary of Product Revenue Allowance and Reserve Categories (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2019USD ($)
Chargebacks and Cash Discount
Valuation And Qualifying Accounts Disclosure [Line Items]
Beginning balance	$ (1,323)
Provision related to current period sales	(2,600)
Credit or payments made during the period	2,584
Ending balance	(1,339)
Distribution Fees, Rebates and Patient Assistance
Valuation And Qualifying Accounts Disclosure [Line Items]
Beginning balance	(865)
Provision related to current period sales	(2,047)
Credit or payments made during the period	2,044
Ending balance	$ (868)

Discontinued Operations - Addit

Discontinued Operations - Additional Information (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2019USD ($)
Schedule Of Equity Method Investments [Line Items]
Gain in discontinued operations, net of tax	$ 3,300
Hyperimmune Business
Schedule Of Equity Method Investments [Line Items]
Amount received in exchange of outstanding milestone payment	$ 4,250