Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2023 | Nov. 02, 2023 | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-39801 | |
Entity Registrant Name | XOMA Corporation | |
Entity Incorporation State Country Code | DE | |
Entity Tax Identification Number | 52-2154066 | |
Entity Address Address Line1 | 2200 Powell Street | |
Entity Address Address Line2 | Suite 310 | |
Entity Address City Or Town | Emeryville | |
Entity Address State Or Province | CA | |
Entity Address Postal Zip Code | 94608 | |
City Area Code | 510 | |
Local Phone Number | 204-7200 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 11,487,808 | |
Entity Central Index Key | 0000791908 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Common Stock | ||
Security12b Title | Common Stock, $0.0075 par value | |
Trading Symbol | XOMA | |
Security Exchange Name | NASDAQ | |
8.625% Series A Cumulative, Perpetual Preferred Stock | ||
Security12b Title | 8.625% Series A Cumulative Perpetual Preferred Stock, par value $0.05 | |
Trading Symbol | XOMAP | |
Security Exchange Name | NASDAQ | |
Series B Depositary Shares | ||
Security12b Title | Depositary Shares (each representing 1/1000th interest in a share of 8.375% Series B Cumulative Perpetual Preferred Stock, par value $0.05) | |
Trading Symbol | XOMAO | |
Security Exchange Name | NASDAQ |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 33,472 | $ 57,826 |
Short-term equity securities | 214 | 335 |
Trade and other receivables, net | 43 | 1 |
Short-term royalty and commercial payment receivables | 0 | 2,366 |
Prepaid expenses and other current assets | 776 | 725 |
Total current assets | 34,505 | 61,253 |
Property and equipment, net | 5 | 7 |
Operating lease right-of-use assets | 29 | |
Long-term royalty and commercial payment receivables | 74,696 | 63,683 |
Intangible assets, net | 14,477 | 15,150 |
Other assets - long term | 411 | 260 |
Total assets | 124,094 | 140,382 |
Current liabilities: | ||
Accounts payable | 728 | 524 |
Accrued and other liabilities | 2,160 | 2,918 |
Contingent consideration under RPAs, AAAs and CPPAs | 4,000 | 75 |
Operating lease liabilities | 0 | 34 |
Unearned revenue recognized under units-of-revenue method | 2,078 | 1,899 |
Preferred stock dividend accrual | 1,368 | 1,368 |
Total current liabilities | 10,334 | 6,818 |
Unearned revenue recognized under units-of-revenue method - long-term | 7,796 | 9,550 |
Total liabilities | 18,130 | 16,368 |
Commitments and Contingencies (Note 9) | ||
Stockholders' equity: | ||
Common stock, $0.0075 par value, 277,333,332 shares authorized, 11,472,808 and 11,454,025 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively | 86 | 86 |
Additional paid-in capital | 1,308,943 | 1,306,271 |
Accumulated deficit | (1,203,114) | (1,182,392) |
Total stockholders' equity | 105,964 | 124,014 |
Total liabilities and stockholders' equity | 124,094 | 140,382 |
8.625% Series A Cumulative, Perpetual Preferred Stock | ||
Stockholders' equity: | ||
Preferred Stock | 49 | 49 |
8.375% Series B Cumulative, Perpetual Preferred Stock | ||
Stockholders' equity: | ||
Preferred Stock | ||
Convertible preferred stock | ||
Stockholders' equity: | ||
Preferred Stock |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Preferred stock, par value (in dollars per share) | $ 0.05 | $ 0.05 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Common stock, par value (in dollars per share) | $ 0.0075 | $ 0.0075 |
Common stock, shares authorized (in shares) | 277,333,332 | 277,333,332 |
Common stock, shares issued (in shares) | 11,472,808 | 11,454,025 |
Common stock, shares outstanding (in shares) | 11,472,808 | 11,454,025 |
8.625% Series A Cumulative, Perpetual Preferred Stock | ||
Preferred stock, dividend rate (as a percent) | 8.625% | 8.625% |
Preferred stock, shares issued (in shares) | 984,000 | 984,000 |
Preferred stock, shares outstanding (in shares) | 984,000 | 984,000 |
8.375% Series B Cumulative, Perpetual Preferred Stock | ||
Preferred stock, dividend rate (as a percent) | 8.375% | 8.375% |
Preferred stock, shares issued (in shares) | 1,600 | 1,600 |
Preferred stock, shares outstanding (in shares) | 1,600 | 1,600 |
Convertible preferred stock | ||
Preferred stock, shares issued (in shares) | 5,003 | 5,003 |
Preferred stock, shares outstanding (in shares) | 5,003 | 5,003 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenues: | ||||
Revenue from contracts with customers | $ 225 | $ 25 | $ 1,350 | $ 3,300 |
Revenue recognized under units-of-revenue method | 605 | 426 | 1,575 | 1,241 |
Total revenues | 830 | 451 | 2,925 | 4,541 |
Operating expenses: | ||||
Research and development | 25 | 29 | 118 | 125 |
General and administrative | 6,368 | 4,794 | 18,341 | 15,620 |
Royalty purchase agreement asset impairment | 1,575 | |||
Arbitration settlement costs (Note 3) | 4,132 | |||
Amortization of intangible assets | 224 | 673 | ||
Total operating expenses | 6,617 | 4,823 | 24,839 | 15,745 |
Loss from operations | (5,787) | (4,372) | (21,914) | (11,204) |
Other income (expense), net | 278 | 194 | 1,192 | 76 |
Net loss | (5,509) | (4,178) | (20,722) | (11,128) |
Comprehensive loss | (5,509) | (4,178) | (20,722) | (11,128) |
Less: accumulated dividends on Series A and Series B preferred stock | (1,368) | (1,368) | (4,104) | (4,104) |
Net loss attributable to common stockholders, basic | (6,877) | (5,546) | (24,826) | (15,232) |
Net loss attributable to common stockholders, diluted | $ (6,877) | $ (5,546) | $ (24,826) | $ (15,232) |
Basic net loss per share attributable to common stockholders (in dollars per share) | $ (0.60) | $ (0.48) | $ (2.17) | $ (1.34) |
Diluted net loss per share attributable to common stockholders (in dollars per share) | $ (0.60) | $ (0.48) | $ (2.17) | $ (1.34) |
Weighted average shares used in computing basic net loss per share attributable to common stockholders (in shares) | 11,473 | 11,447 | 11,466 | 11,400 |
Weighted average shares used in computing diluted net loss per share attributable to common stockholders (in shares) | 11,473 | 11,447 | 11,466 | 11,400 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Preferred Stock 8.625% Series A Cumulative, Perpetual Preferred Stock | Preferred Stock 8.375% Series B Cumulative, Perpetual Preferred Stock | Preferred Stock Convertible preferred stock | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Balance at beginning of period at Dec. 31, 2021 | $ 49 | $ 85 | $ 1,307,030 | $ (1,165,288) | $ 141,876 | ||
Balance at beginning of period (in shares) at Dec. 31, 2021 | 984,000 | 2,000 | 5,000 | 11,315,000 | |||
Increase (Decrease) in Stockholders' Equity | |||||||
Exercise of stock options | $ 1 | 632 | 633 | ||||
Exercise of stock options (in shares) | 91,000 | ||||||
Issuance of common stock related to 401(k) contribution | 85 | 85 | |||||
Issuance of common stock related to 401(k) contribution (in shares) | 4,000 | ||||||
Stock-based compensation expense | 978 | 978 | |||||
Preferred stock dividends | (1,368) | (1,368) | |||||
Net loss and comprehensive loss | (2,280) | (2,280) | |||||
Balance at end of period at Mar. 31, 2022 | $ 49 | $ 86 | 1,307,357 | (1,167,568) | 139,924 | ||
Balance at end of period (in shares) at Mar. 31, 2022 | 984,000 | 2,000 | 5,000 | 11,410,000 | |||
Balance at beginning of period at Dec. 31, 2021 | $ 49 | $ 85 | 1,307,030 | (1,165,288) | 141,876 | ||
Balance at beginning of period (in shares) at Dec. 31, 2021 | 984,000 | 2,000 | 5,000 | 11,315,000 | |||
Increase (Decrease) in Stockholders' Equity | |||||||
Net loss and comprehensive loss | (11,128) | ||||||
Balance at end of period at Sep. 30, 2022 | $ 49 | $ 86 | 1,306,606 | (1,176,416) | 130,325 | ||
Balance at end of period (in shares) at Sep. 30, 2022 | 984,000 | 2,000 | 5,000 | 11,451,000 | |||
Balance at beginning of period at Mar. 31, 2022 | $ 49 | $ 86 | 1,307,357 | (1,167,568) | 139,924 | ||
Balance at beginning of period (in shares) at Mar. 31, 2022 | 984,000 | 2,000 | 5,000 | 11,410,000 | |||
Increase (Decrease) in Stockholders' Equity | |||||||
Exercise of stock options | 189 | 189 | |||||
Exercise of stock options (in shares) | 11,000 | ||||||
Issuance of common stock related to ESPP | 45 | 45 | |||||
Issuance of common stock related to ESPP (in shares) | 3,000 | ||||||
Stock-based compensation expense | 836 | 836 | |||||
Preferred stock dividends | (1,368) | (1,368) | |||||
Net loss and comprehensive loss | (4,670) | (4,670) | |||||
Balance at end of period at Jun. 30, 2022 | $ 49 | $ 86 | 1,307,059 | (1,172,238) | 134,956 | ||
Balance at end of period (in shares) at Jun. 30, 2022 | 984,000 | 2,000 | 5,000 | 11,424,000 | |||
Increase (Decrease) in Stockholders' Equity | |||||||
Exercise of stock options | 109 | 109 | |||||
Exercise of stock options (in shares) | 27,000 | ||||||
Stock-based compensation expense | 806 | 806 | |||||
Preferred stock dividends | (1,368) | (1,368) | |||||
Net loss and comprehensive loss | (4,178) | (4,178) | |||||
Balance at end of period at Sep. 30, 2022 | $ 49 | $ 86 | 1,306,606 | (1,176,416) | 130,325 | ||
Balance at end of period (in shares) at Sep. 30, 2022 | 984,000 | 2,000 | 5,000 | 11,451,000 | |||
Balance at beginning of period at Dec. 31, 2022 | $ 49 | $ 86 | 1,306,271 | (1,182,392) | 124,014 | ||
Balance at beginning of period (in shares) at Dec. 31, 2022 | 984,000 | 2,000 | 5,000 | 11,454,000 | |||
Increase (Decrease) in Stockholders' Equity | |||||||
Issuance of common stock related to 401(k) contribution | 123 | 123 | |||||
Issuance of common stock related to 401(k) contribution (in shares) | 7,000 | ||||||
Stock-based compensation expense | 1,570 | 1,570 | |||||
Preferred stock dividends | (1,368) | (1,368) | |||||
Net loss and comprehensive loss | (9,813) | (9,813) | |||||
Balance at end of period at Mar. 31, 2023 | $ 49 | $ 86 | 1,306,596 | (1,192,205) | 114,526 | ||
Balance at end of period (in shares) at Mar. 31, 2023 | 984,000 | 2,000 | 5,000 | 11,461,000 | |||
Balance at beginning of period at Dec. 31, 2022 | $ 49 | $ 86 | 1,306,271 | (1,182,392) | $ 124,014 | ||
Balance at beginning of period (in shares) at Dec. 31, 2022 | 984,000 | 2,000 | 5,000 | 11,454,000 | |||
Increase (Decrease) in Stockholders' Equity | |||||||
Exercise of stock options (in shares) | 8,473 | ||||||
Net loss and comprehensive loss | $ (20,722) | ||||||
Balance at end of period at Sep. 30, 2023 | $ 49 | $ 86 | 1,308,943 | (1,203,114) | 105,964 | ||
Balance at end of period (in shares) at Sep. 30, 2023 | 984,000 | 2,000 | 5,000 | 11,472,000 | |||
Balance at beginning of period at Mar. 31, 2023 | $ 49 | $ 86 | 1,306,596 | (1,192,205) | 114,526 | ||
Balance at beginning of period (in shares) at Mar. 31, 2023 | 984,000 | 2,000 | 5,000 | 11,461,000 | |||
Increase (Decrease) in Stockholders' Equity | |||||||
Exercise of stock options | 153 | 153 | |||||
Exercise of stock options (in shares) | 8,000 | ||||||
Issuance of common stock related to ESPP | 50 | 50 | |||||
Issuance of common stock related to ESPP (in shares) | 3,000 | ||||||
Stock-based compensation expense | 2,163 | 2,163 | |||||
Preferred stock dividends | (1,368) | (1,368) | |||||
Net loss and comprehensive loss | (5,400) | (5,400) | |||||
Balance at end of period at Jun. 30, 2023 | $ 49 | $ 86 | 1,307,594 | (1,197,605) | 110,124 | ||
Balance at end of period (in shares) at Jun. 30, 2023 | 984,000 | 2,000 | 5,000 | 11,472,000 | |||
Increase (Decrease) in Stockholders' Equity | |||||||
Stock-based compensation expense | 2,717 | 2,717 | |||||
Preferred stock dividends | (1,368) | (1,368) | |||||
Net loss and comprehensive loss | (5,509) | (5,509) | |||||
Balance at end of period at Sep. 30, 2023 | $ 49 | $ 86 | $ 1,308,943 | $ (1,203,114) | $ 105,964 | ||
Balance at end of period (in shares) at Sep. 30, 2023 | 984,000 | 2,000 | 5,000 | 11,472,000 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Cash flows from operating activities: | ||||
Net loss | $ (20,722) | $ (11,128) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Stock-based compensation expense | 6,450 | 2,620 | ||
Royalty purchase agreement asset impairment | 1,575 | |||
Change in fair value of contingent consideration under RPAs, AAAs, and CPPAs | (75) | |||
Common stock contribution to 401(k) | 123 | 85 | ||
Amortization of intangible assets | $ 224 | 673 | ||
Depreciation | 2 | 7 | ||
Non-cash lease expense | 115 | 127 | ||
Change in fair value of equity securities | 121 | 330 | ||
Changes in assets and liabilities: | ||||
Trade and other receivables, net | (42) | 193 | ||
Prepaid expenses and other assets | (202) | (343) | ||
Accounts payable and accrued liabilities | (554) | 596 | ||
Income taxes payable | (91) | |||
Operating lease liabilities | (120) | (144) | ||
Unearned revenue recognized under units-of-revenue method | (1,575) | (1,241) | ||
Net cash used in operating activities | (14,231) | (8,989) | ||
Cash flows from investing activities: | ||||
Payments of consideration under RPAs, AAAs and CPPAs | (14,650) | (8,000) | ||
Receipts under RPAs, AAAs and CPPAs | 8,428 | 3,026 | ||
Net cash used in investing activities | (6,222) | (4,974) | ||
Cash flows from financing activities: | ||||
Payment of preferred stock dividends | (4,104) | (4,104) | ||
Proceeds from exercise of options and other share-based compensation | 208 | 2,373 | ||
Taxes paid related to net share settlement of equity awards | (5) | (1,398) | ||
Net cash used in financing activities | (3,901) | (3,129) | ||
Net decrease in cash, cash equivalents and restricted cash | (24,354) | (17,092) | ||
Cash, cash equivalents and restricted cash at the beginning of the period | 57,826 | 95,377 | $ 95,377 | |
Cash, cash equivalents and restricted cash at the end of the period | 33,472 | 33,472 | 78,285 | $ 57,826 |
Supplemental Cash Flow Information: | ||||
Cash paid for taxes | 95 | |||
Right-of-use assets obtained in exchange for operating lease liabilities | 85 | |||
Non-cash investing and financing activities: | ||||
Preferred stock dividend accrual | $ 1,368 | 1,368 | $ 1,368 | |
Estimated fair value of contingent consideration under the LadRx Agreements | 1,000 | |||
Accrual of contingent consideration under the Affitech CPPA | $ 3,000 |
Description of Business
Description of Business | 9 Months Ended |
Sep. 30, 2023 | |
Description of Business | |
Description of Business | 1. Description of Business XOMA, a Delaware corporation, is a biotech royalty aggregator with a sizable portfolio of economic rights to future potential milestone and royalty payments associated with partnered commercial and pre-commercial therapeutic candidates. The Company’s portfolio was built through the acquisition of rights to future milestones, royalties and commercial payments that the Company has made since the royalty aggregator business model was implemented in 2017 combined with out-licensing its proprietary products and platforms from its legacy discovery and development business. The Company’s drug royalty aggregator business is primarily focused on early to mid-stage clinical assets in Phase 1 and 2 with significant commercial sales potential that are licensed to large-cap partners. The Company expects that most of its future revenue will be based on payments the Company may receive for milestones and royalties related to these programs. Liquidity and Financial Condition The Company has incurred significant operating losses and negative cash flows from operations since its inception. As of September 30, 2023, the Company had cash and cash equivalents of $33.5 million. Based on the Company’s current cash balance and its ability to control discretionary spending, such as milestone and royalty acquisitions, the Company has evaluated and concluded its financial condition is sufficient to fund its planned operations and commitments and contractual obligations for a period of at least one year following the date that these condensed consolidated financial statements are issued. |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2023 | |
Basis of Presentation and Significant Accounting Policies | |
Basis of Presentation and Significant Accounting Policies | 2. Basis of Presentation and Significant Accounting Policies Basis of Presentation The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions among consolidated entities were eliminated upon consolidation. The unaudited condensed consolidated financial statements were prepared in accordance with GAAP in the United States and with the instructions to Form 10-Q and Article 10 of Regulation S-X for interim financial reporting. As permitted under those rules certain footnotes or other financial information can be condensed or omitted. These condensed consolidated financial statements and related disclosures have been prepared with the assumption that users of the interim financial information have read or have access to the audited consolidated financial statements for the preceding fiscal year. Accordingly, these statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on March 9, 2023. These condensed consolidated financial statements have been prepared on the same basis as the Company’s annual consolidated financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal and recurring adjustments that are necessary for a fair statement of the Company’s consolidated financial information. The interim results of operations are not necessarily indicative of the results that may be expected for the full year, or for any other future annual or interim period. Use of Estimates The preparation of financial statements in conformity with GAAP in the United States requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosures. On an ongoing basis, management evaluates its estimates including, but not limited to, those related to revenue recognition, revenue recognized under the units-of-revenue method, royalty and commercial payment receivables, intangible assets, legal contingencies, contingent consideration, accrued expenses and stock-based compensation. The Company bases its estimates on historical experience and on various other market-specific and other relevant assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ significantly from these estimates, such as the Company’s amortization of the payments received from HCRP. Under the contracts with HCRP, the amortization for the reporting period is calculated based on the payments expected to be made by the licensees to HCRP over the term of the arrangement. Any changes to the estimated payments by the licensees to HCRP can result in a material adjustment to revenue previously reported. Cash and Cash Equivalents Cash consists of bank deposits held in business checking and interest-bearing deposit accounts. As of September 30, 2023, the Company had a cash balance of $5.5 million and cash equivalent balances of $28.0 million, defined as highly liquid financial instruments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. As of December 31, 2022, the Company had a cash balance of $27.5 million and cash equivalent balances of $30.3 million. Revenue Recognition The Company recognizes revenue from all contracts with customers according to ASC 606, except for contracts that are within the scope of other standards, such as leases, insurance and financial instruments. The Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract on whether each promised good or service is distinct to determine those that are performance obligations. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation based on relative fair values, when (or as) the performance obligation is satisfied. The Company recognizes revenue from its license and collaboration arrangements and royalties. The terms of the arrangements generally include payment to the Company of one or more of the following: non-refundable, upfront license fees, development, regulatory and commercial milestone payments, and royalties on net sales of licensed products. License of intellectual property If the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenue from non-refundable, upfront fees allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license. For licenses that are bundled with other promises, such as transfer of related materials, process and know-how, the Company utilizes judgement to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time. Under the Company’s license agreements, the nature of the combined performance obligation is the granting of licenses to the customers as the other promises are not separately identifiable in the context of the arrangement. Since the Company grants the license to a customer as it exists at the point of transfer and is not involved in any future development or commercialization of the products related to the license, the nature of the license is a right to use the Company’s intellectual property as transferred. As such, the Company recognizes revenue related to the combined performance obligation upon completion of the delivery of the related materials, process and know-how (i.e., at a point in time). Milestone payments At the inception of each arrangement that includes development and regulatory milestone payments, the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price. ASC 606 suggests two alternatives to use when estimating the amount of variable consideration: the expected value method and the most likely amount method. Under the expected value method, an entity considers the sum of probability-weighted amounts in a range of possible consideration amounts. Under the most likely amount method, an entity considers the single most likely amount in a range of possible consideration amounts. The Company uses the most likely amount method for development and regulatory milestone payments. If it is probable that a significant cumulative revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the control of the Company or the licensee, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. The transaction price is then allocated to each performance obligation on a relative stand-alone selling price basis. The Company recognizes revenue as or when the performance obligations under the contract are satisfied. At the end of each subsequent reporting period, the Company re-evaluates the probability or achievement of each such milestone and any related constraint, and if necessary, adjusts its estimates of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenue and earnings in the period of adjustment. Royalties For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). Upfront payments and fees are recorded as deferred revenue upon receipt or when due and may require deferral of revenue recognition to a future period until the Company performs its obligations under these arrangements. Amounts payable to the Company are recorded as accounts receivable when the Company’s right to consideration is unconditional. The Company does not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the customer and the transfer of the promised goods or services to the customer will be one year or less. Sale of Future Revenue Streams The Company has sold its rights to receive certain milestones and royalties on product sales. In the circumstance where the Company has sold its rights to future milestones and royalties under a license agreement and also maintains limited continuing involvement in the arrangement (but not significant continuing involvement in the generation of the cash flows that are due to the purchaser), the Company defers recognition of the proceeds it receives for the sale of milestone or royalty streams and recognizes such unearned revenue as revenue under the units-of-revenue method over the life of the underlying license agreement. Under the units-of-revenue method, amortization for a reporting period is calculated by computing a ratio of the proceeds received from the purchaser to the total payments expected to be made to the purchaser over the term of the agreement, and then applying that ratio to the period’s cash payment. Estimating the total payments expected to be received by the purchaser over the term of such arrangements requires management to use subjective estimates and assumptions. Changes to the Company’s estimate of the payments expected to be made to the purchaser over the term of such arrangements could have a material effect on the amount of revenues recognized in any particular period. Stock-Based Compensation The Company recognizes compensation expense for all stock-based payment awards made to the Company’s employees, consultants and directors that are expected to vest based on estimated fair values. The valuation of stock option awards is determined at the date of grant using the Black-Scholes Model. The Black-Scholes Model requires inputs such as the expected term of the option, expected volatility and risk-free interest rate. To establish an estimate of expected term, the Company considers the vesting period and contractual period of the award and its historical experience of stock option exercises, post-vesting cancellations and volatility. The estimate of expected volatility is based on the Company’s historical volatility. The risk-free rate is based on the yield available on United States Treasury zero-coupon issues corresponding to the expected term of the award. The Company records forfeitures when they occur. The Company records compensation expense for service-based awards on a straight-line basis over the requisite service period, which is generally the vesting period of the award, or to the date on which retirement eligibility is achieved, if shorter. The grant date fair value of PSUs with market conditions are determined using the Monte Carlo valuation model. The Company records compensation expenses for PSUs based on graded expense attribution over the requisite service periods. Equity Securities The Company entered into a license agreement with Rezolute in December 2017, in which it received shares of common stock from Rezolute (Note 4). Equity investments in Rezolute are classified in the condensed consolidated balance sheets as equity securities. The equity securities are measured at fair value, with changes in fair value recorded in the other income (expense), net line item of the condensed consolidated statement of operations and comprehensive loss at each reporting period. The Company remeasures its equity investments at each reporting period until such time that the investment is sold or disposed of. If the Company sells an investment, any realized gains and losses on the sale of the securities will be recognized in the condensed consolidated statement of operations and comprehensive loss in the period of sale. Purchase of Rights to Future Milestones, Royalties and Commercial Payments The Company has purchased rights to receive a portion of certain future developmental, regulatory and commercial sales milestones, royalties and option fees on sales of products currently in clinical development or recently commercialized. The Company acquired such rights from various entities and recorded the amount paid for these rights as long-term royalty receivables (Note 5). In addition, the Company may be obligated to make contingent payments related to certain product development milestones, fees upon exercise of options related to future license products and sales-based milestones. The contingent payments are evaluated to determine if they are freestanding instruments or embedded derivatives. If the contingent payments fall within the scope of ASC 815, the contingent payments are measured at fair value at the inception of the arrangement, and subject to remeasurement to fair value each reporting period. Any changes in the estimated fair value are recorded in the condensed consolidated statement of operations and comprehensive loss. Contingent consideration payments that do not fall within the scope of ASC 815 are recognized when the amount is probable and estimable according to ASC 450. The Company accounts for milestone and royalty rights related to developmental pipeline or recently commercialized products on a non-accrual basis using the cost recovery method. These developmental pipeline products are non-commercialized, non-approved products that require FDA or other regulatory approval, and thus have uncertain cash flows. The recently commercialized products do not have an established reliable sales pattern, and thus have uncertain cash flows. The Company is not yet able to reliably forecast future cash flows given their stages of development and commercialization. The related receivable balance is classified as noncurrent or current based on whether payments are probable and reasonably estimable to be received in the near term. Under the cost recovery method, any milestone or royalty payment received is recorded as a direct reduction of the recorded receivable balance. When the recorded receivable balance has been fully collected, any additional amounts collected are recognized as revenue. Allowance for Current Expected Credit Losses The Company evaluates the long-term royalty and commercial payment receivables on a collective, i.e., pool, basis if they share similar risk characteristics. The Company would evaluate a royalty and commercial payment receivable individually if its risk characteristics are not similar to other royalty and commercial payment receivables. The Company reviews public information on clinical trials, press releases and updates from its partners regularly to identify any impairment indicators or changes in expected recoverability of the long-term royalty and commercial payment receivable asset. At each reporting date, if the Company determines expected future cash flows discounted to the current period are less than the carrying value of the asset, the Company will record impairment. The impairment will be recognized as an allowance expense that increases the long-term royalty and commercial payment receivable asset’s cumulative allowance, which reduces the net carrying value of the long-term royalty and commercial payment receivable asset. In a subsequent period, if there is an increase in expected future cash flows, or if the actual cash flows are greater than previously expected, the Company will reduce the previously established cumulative allowance. Amounts not expected to be collected are written off against the allowance at the time that such a determination is made. Asset Acquisitions As a first step, for each acquisition, the Company determines if it is an acquisition of a business or an asset acquisition under ASC 805. Acquisitions of assets or a group of assets that do not meet the definition of a business are accounted for as asset acquisitions under ASC 805-50, using the cost accumulation method, whereby the cost of the acquisition, including certain transaction costs, is allocated to the assets acquired on the basis of relative fair values (Note 4). Contingent payments are evaluated whether they are freestanding instruments or embedded derivatives. If the contingent payments fall within the scope of ASC 815, the contingent payments are measured at fair value at the acquisition date, and subject to remeasurement to fair value each reporting period. The estimated fair value at the acquisition date is included in the cost of the acquired assets. Any subsequent changes in the estimated fair value are recorded in the condensed consolidated statement of operations and comprehensive loss. Contingent consideration payments that do not fall within the scope of ASC 815 are recognized when the amount is probable and estimable according to ASC 450. Cash payments related to acquired assets are reflected as an investing cash flow in the Company’s condensed consolidated statement of cash flows. Intangible Assets The identifiable intangible asset consists of IP acquired in the ObsEva IP Acquisition Agreement in 2022. This intangible asset is amortized on a straight-line basis over its estimated useful life of 17 years. The straight-line method of amortization represents the Company’s best estimate of the distribution of the economic value of the identifiable intangible asset. The intangible asset is carried at cost less accumulated amortization. Amortization will be included in amortization of intangible assets in the condensed consolidated statement of operations and comprehensive loss. Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparison of the carrying amount of an asset group to the future net undiscounted cash flows that the assets are expected to generate. If the carrying amount of an asset group exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset group exceeds the fair value of the asset group. Leases The Company leases its headquarters office space in Emeryville, California. The Company determines the initial classification and measurement of its right-of-use assets and lease liabilities at the lease commencement date and thereafter if modified. The lease term includes any renewal options and termination options that the Company is reasonably certain to exercise. The present value of lease payments is determined by using the interest rate implicit in the lease, if that rate is readily determinable; otherwise, the Company uses its incremental borrowing rate. The incremental borrowing rate is determined by using the rate of interest that the Company would pay to borrow on a collateralized basis an amount equal to the lease payments for a similar term and in a similar economic environment. The Company built its incremental borrowing rate starting with the interest rate on its fully collateralized debt and then adjusted it for lease term length. Rent expense for the operating lease is recognized on a straight-line basis, over the reasonably assured lease term based on the total lease payments and is included in operating expenses in the condensed consolidated statements of operations and comprehensive loss. The Company has elected the practical expedient to not separate lease and non-lease components. The Company’s non-lease components are primarily related to property maintenance, which varies based on future outcomes, and thus are recognized in rent expense when incurred. The Company has also elected not to record on the consolidated balance sheet a lease which term is 12 months or less and does not include a purchase option that the Company is reasonably certain to exercise. Income Taxes The Company accounts for income taxes using the liability method under which deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amount which is more likely than not to be realizable. The recognition, derecognition and measurement of a tax position is based on management’s best judgment given the facts, circumstances and information available at each reporting date. The Company’s policy is to recognize interest and penalties related to the underpayment of income taxes as a component of income tax expense. To date, there have been no interest or penalties charged in relation to the unrecognized tax benefits. Net Loss per Share Attributable to Common Stockholders The Company calculates basic and diluted loss per share attributable to common stockholders using the two-class method. The Company’s convertible Series X preferred stocks participate in any dividends declared by the Company on its common stock and are therefore considered to be participating securities. The Company’s Series A and Series B Preferred Stock do not participate in any dividends or distribution by the Company on its common stock and are therefore not considered to be participating securities. Under the two-class method, net income, as adjusted for any accumulated dividends on Series A and Series B Preferred Stock for the period, is allocated to each class of common stock and participating security as if all of the net income for the period had been distributed. Undistributed earnings allocated to participating securities are subtracted from net income in determining net income attributable to common stockholders. During periods of loss, the Company allocates no loss to participating securities because they have no contractual obligation to share in the losses of the Company. Basic net loss per share attributable to common stockholders is then calculated by dividing the net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. All participating securities are excluded from the basic weighted average common shares outstanding. Diluted net loss per share attributable to common stockholders is based on the weighted average number of shares outstanding during the period, adjusted to include the assumed exercise of certain stock options and warrants for common stock using the treasury method, if dilutive. The calculation assumes that any proceeds that could be obtained upon exercise of options and warrants would be used to purchase common stock at the average market price during the period. Adjustments to the denominator are required to reflect the related dilutive shares. The Company’s Series A and Series B Preferred Stock become convertible upon the occurrence of specific events other than a change in the Company’s share price and, therefore, are not included in the diluted shares until the contingency is resolved. Concentration of Risk Cash, cash equivalents and receivables are financial instruments which potentially subject the Company to concentrations of credit risk, as well as liquidity risk. The Company maintains cash balances at commercial banks. Balances commonly exceed the amount insured by the FDIC. The Company has not experienced any losses in such accounts. The Company monitors the creditworthiness of its customers to which it grants credit terms in the normal course of business but does not generally require collateral on receivables. For the three months ended September 30, 2023, two partners represented 73% and 24% of total revenues. For the nine months ended September 30, 2023, two partners represented 54% and 44% of total revenues. For the three months ended September 30, 2022, one partner represented 94% of total revenues. For the nine months ended September 30, 2022, four partners represented 44% , 27% , 17% and 11% of total revenues. Comprehensive Loss Comprehensive loss is comprised of two components: net loss and other comprehensive loss. Other comprehensive loss refers to gains and losses that under U.S. GAAP are recorded as an element of stockholders’ equity but are excluded from net loss. The Company did not record any transactions within other comprehensive loss in the periods presented and, therefore, the net loss and comprehensive loss were the same for all periods presented. Accounting Pronouncements Recently Adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (ASC 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 replaced the incurred loss impairment methodology under current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. ASU 2016-13 requires use of a forward-looking expected credit loss model for accounts receivables, loans, and other financial instruments. Adoption of the standard requires using a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the effective date to align existing credit loss methodology with the new standard. The Company adopted ASU 2016-13 and related updates on January 1, 2023. The adoption of ASU 2016-13 had no impact on the condensed consolidated financial statements. In October 2021, the FASB issued ASU 2021-08, Business Combinations – Accounting for Contract Assets and Contact Liabilities from Contracts with Customers. The guidance is intended to improve the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice. The guidance requires an acquirer to recognize and measure contract assets and liabilities acquired in a business combination in accordance with ASC 606 as if they had originated the contracts, as opposed to at fair value on the acquisition date. The Company adopted ASU 2021-08 and related updates on January 1, 2023. The adoption of ASU 2021-08 had no impact on the condensed consolidated financial statements. |
Condensed Consolidated Financia
Condensed Consolidated Financial Statements Details | 9 Months Ended |
Sep. 30, 2023 | |
Condensed Consolidated Financial Statements Details | |
Condensed Consolidated Financial Statements Details | 3. Condensed Consolidated Financial Statements Details Equity Securities Equity securities consisted of an investment in Rezolute’s common stock of $0.2 million and $0.3 million as of September 30, 2023 and December 31, 2022, respectively (Note 4). For each of the three and nine months ended September 30, 2023, the Company recognized a loss of $0.1 million due to the change in fair value of its investment in Rezolute’s common stock in the other income (expense), net line item of the condensed consolidated statements of operations and comprehensive loss. For the three and nine months ended September 30, 2022, the Company recognized a loss of $0.1 million and $0.3 million, respectively, due to the change in fair value of its investment. Intangible assets, net The following table summarizes cost, accumulated amortization, and net carrying value of the intangible assets as of September 30, 2023 (in thousands): Accumulated Net Carrying Cost Amortization Value As of September 30, 2023 Ebopiprant IP (Note 4) $ 15,247 $ 770 $ 14,477 Total intangible assets $ 15,247 $ 770 $ 14,477 The following table summarizes cost, accumulated amortization, and net carrying value of the intangible assets as of December 31, 2022 (in thousands): Accumulated Net Carrying Cost Amortization Value As of December 31, 2022 Ebopiprant IP (Note 4) $ 15,247 $ 97 $ 15,150 Total intangible assets $ 15,247 $ 97 $ 15,150 The remaining life of the intangible assets is 16.2 years. The following table presents the projected amortization expense for the next five years (in thousands): Intangible Asset Amortization 2023 (excluding nine months ended September 30, 2023) $ 224 2024 897 2025 897 2026 897 2027 897 Total $ 3,812 Accrued and Other Liabilities Accrued and other liabilities consisted of the following (in thousands): September 30, December 31, 2023 2022 Accrued payroll, severance and retention costs 903 1,449 Accrued incentive compensation 902 562 Accrued legal and accounting fees 325 867 Other accrued liabilities 30 40 Total $ 2,160 $ 2,918 Net Loss Per Share Attributable to Common Stockholders The following is a reconciliation of the numerator (net loss) and the denominator (number of shares) used in the calculation of basic and diluted net loss per share attributable to common stockholders (in thousands, except per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Numerator Net loss $ (5,509) $ (4,178) $ (20,722) $ (11,128) Less: Series A accumulated dividends (530) (530) (1,591) (1,591) Less: Series B accumulated dividends (838) (838) (2,513) (2,513) Net loss attributable to common stockholders, basic and diluted (6,877) (5,546) $ (24,826) (15,232) Denominator Weighted average shares used in computing basic and diluted net loss per share attributable to common stockholders 11,473 11,447 11,466 11,400 Basic and diluted net loss per share attributable to common stockholders $ (0.60) (0.48) $ (2.17) $ (1.34) Potentially dilutive securities are excluded from the calculation of diluted net loss per share attributable to common stockholders if their inclusion is anti-dilutive. The following table shows the weighted-average shares from outstanding securities considered anti-dilutive and therefore excluded from the computation of diluted net loss per share attributable to common stockholders (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Convertible preferred stock 5,003 5,003 5,003 5,003 Common stock options 1,804 888 1,781 831 Warrants for common stock 6 6 6 6 Total 6,813 5,897 6,790 5,840 For PSUs with market conditions, if the market conditions have not been satisfied by the end of the reporting period, the number of shares that would be issuable based on the market price at the end of the reporting period, as if the end of the reporting period were the end of the contingency period, will be included in the calculation of diluted earnings per share if the effect is dilutive. No shares would be issuable based on the market price of $14.09 per share as of September 30, 2023. Arbitration Proceeding In June 2021, the Company initiated a binding arbitration proceeding with one of its licensees (the “Licensee”) at the American Arbitration Association/International Centre for Dispute Resolution, seeking milestone and royalty payments under its license agreement. A hearing before a panel of arbitrators was held in November 2022, and the parties submitted post-hearing briefs. On March 21, 2023, the Company received an adverse decision in this arbitration proceeding. The panel of arbitrators declined to award the Company damages and ruled that the license agreement has expired. The panel ruled that the Company is responsible for the Licensee’s costs as well as arbitrators’ and administrative fees previously incurred by the Licensee of $4.1 million, which the Company paid in April 2023. |
Licensing and Other Arrangement
Licensing and Other Arrangements | 9 Months Ended |
Sep. 30, 2023 | |
Licensing and Other Arrangements | |
Licensing and Other Arrangements | 4. Licensing and Other Arrangements ObsEva On November 21, 2022, the Company entered into the ObsEva IP Acquisition Agreement pursuant to which the Company acquired all of ObsEva’s intellectual property (patents and know-how) and license agreement rights related to ebopiprant, an investigational compound previously licensed by ObsEva from Merck KGaA. The Company also assumed ObsEva’s ongoing rights and obligations under the Organon License Agreement and the Merck KGaA License Agreement. Pursuant to the Organon License Agreement, XOMA was eligible to receive up to $475.0 million in payments for ebopiprant development, commercialization and sales-based milestones (Note 13). If ebopiprant was successfully commercialized, the Company would be entitled to receive royalties on net sales that range from low to mid-teens from Organon and would be required to make mid-single-digit royalty payments on net sales to Merck KGaA. The Company paid ObsEva a $15.0 million upfront payment at closing and will pay potential earn-out payments of up to $97.5 million for development, regulatory and sales-based milestones, representing a portion of what the Company would receive pursuant to the Organon License Agreement. The transaction was treated as an acquisition of a finite-lived intangible asset (Note 2). As such, the Company’s cost to acquire said intangible asset of $15.2 million, consisting of $15.0 million cash paid upon closing of the ObsEva IP Acquisition Agreement and direct incremental transaction costs of $0.2 million, was recognized as a long-term asset in the consolidated balance sheet for the year ended December 31, 2022. The estimated useful life of the intangible asset at acquisition represented 17 years. No impairment indicators were identified, and no impairment was recorded as of September 30, 2023 and December 31, 2022. The Company recognized $0.2 million and $0.7 million of amortization expense in the condensed consolidated statement of operations and comprehensive loss for the three and nine months ended September 30, 2023, respectively. The Company concluded that the development and regulatory milestone payments of $46.5 million, sales-based milestones payments of $51.0 million and royalty payments to Merck KGaA do not meet the definition of a derivative under ASC 815 and a liability will be recognized at the time that the underlying revenue is recognized under the Organon License Agreement for the corresponding development and regulatory milestone payments, sales-based milestone payments, and royalty payments. ASC 450 may require recognition of the contingent consideration if it is probable that a liability has been incurred and the amount of that liability can be reasonably estimated. Due to the nature of the non-sales and sales-based milestones the Company expects the contingent payments to be probable of payment at the same time that revenue from the Organon License Agreement would be recorded. As of September 30, 2023 and December 31, 2022, there were no contract assets or contract liabilities related to this arrangement. The Company did not recognize any revenue related to this arrangement during the three and nine months ended September 30, 2023. Novartis – Anti-TGFβ Antibody (NIS793) On September 30, 2015, the Company and Novartis entered into the Anti-TGFβ Antibody License Agreement under which the Company granted Novartis an exclusive, world-wide, royalty-bearing license to the Company’s anti-transforming growth factor beta (“TGFβ”) antibody program (now “NIS793”). Under the terms of the Anti-TGFβ Antibody License Agreement, Novartis has worldwide rights to NIS793 and is responsible for the development and commercialization of antibodies and products containing antibodies arising from NIS793. Unless terminated earlier, the Anti-TGFβ Antibody License Agreement will remain in effect, on a country-by-country and product-by-product basis, until Novartis’ royalty obligations end. The Anti-TGFβ Antibody License Agreement contains customary termination rights relating to material breach by either party. Novartis also has a unilateral right to terminate the Anti-TGFβ Antibody License Agreement on an antibody-by-antibody and country-by-country basis or in its entirety on one hundred eighty days’ notice. The Company concluded that there were multiple promised goods and services under the Anti-TGFβ Antibody License Agreement, including the transfer of license, regulatory services and transfer of materials, process and know-how, which were determined to represent one combined performance obligation. The Company recognized the entire upfront payment of $37.0 million as revenue in the consolidated statement of comprehensive loss in 2015 as it had completed its performance obligations as of December 31, 2015. The Company was eligible to receive up to a total of $480.0 million in development, regulatory and commercial milestones under the Anti-TGFβ Antibody License Agreement. During the year ended December 31, 2017, Novartis achieved a clinical development milestone pursuant to the Anti-TGFβ Antibody License Agreement, and as a result, the Company earned a $10.0 million milestone payment. The Company concluded that the development and regulatory milestone payments are solely dependent on Novartis’ performance and achievement of the specified events. The Company determined that it is not probable that a significant cumulative revenue reversal will not occur in future periods for these future payments. Therefore, the remaining development and regulatory milestones are fully constrained and excluded from the transaction price. Any consideration related to commercial milestones (including royalties) will be recognized when the related sales occur as they were determined to relate predominantly to the licenses granted to Novartis and therefore, have also been excluded from the transaction price. At the end of each reporting period, the Company will update its assessment of whether an estimate of variable consideration is constrained and update the estimated transaction price accordingly. The Company is also eligible to receive royalties on sales of licensed products, which are tiered based on sales levels and range from a mid-single-digit percentage rate to up to a low double-digit percentage rate. Novartis’ obligation to pay royalties with respect to a particular product and country will continue for the longer of the date of expiration of the last valid patent claim covering the product in that country, or ten years from the date of the first commercial sale of the product in that country. In October 2020, the Company earned a $25.0 million milestone upon the dosing of the first patient in Novartis’ first NIS793 Phase 2 clinical trial. As specified under the terms of the Anti-TGFβ Antibody License Agreement, the Company received $17.7 million in cash, and the remaining balance of $7.3 million was recognized as a reduction to the Company's debt obligation to Novartis. In October 2021, the Company earned a $35.0 million milestone payment upon dosing of the first patient in Novartis’ first NIS793 Phase 3 clinical trial. In August 2023, Novartis communicated to the Company that it intends to discontinue development activities related to NIS793. Novartis will cease enrolling patients in the remaining active TGFß clinical studies and will collect all data upon conclusion of these studies. As of September 30, 2023 and December 31, 2022, there were no contract assets or contract liabilities related to this arrangement. None of the costs to obtain or fulfill the contract were capitalized. The Company did not recognize any revenue related to this arrangement during the three and nine months ended September 30, 2023 and 2022. Novartis – Anti-IL-1β Antibody (VPM087) On August 24, 2017, the Company and Novartis entered into the Gevokizumab License Agreement under which the Company granted to Novartis an exclusive, worldwide, royalty-bearing license to gevokizumab (“VPM087”), a novel anti-Interleukin-1 (“IL-1”) beta allosteric monoclonal antibody and related know-how and patents. Under the terms of the Gevokizumab License Agreement, Novartis is solely responsible for the development and commercialization of VPM087 and products containing VPM087. On August 24, 2017, pursuant to a separate agreement (the “IL-1 Target License Agreement”), the Company granted to Novartis non-exclusive licenses to its intellectual property covering the use of IL-1 beta targeting antibodies in the treatment and prevention of cardiovascular disease and other diseases and conditions, and an option to obtain an exclusive license (the “Exclusivity Option”) to such intellectual property for the treatment and prevention of cardiovascular disease. Under the Gevokizumab License Agreement, the Company received total consideration of $30.0 million for the license and rights granted to Novartis. Of the total consideration, $15.7 million was paid in cash and $14.3 million (equal to €12.0 million) was paid by Novartis, on behalf of the Company, to settle the Company’s outstanding debt with Les Laboratories Servier (“Servier”) (the “Servier Loan”). In addition, Novartis extended the maturity date on the Company’s debt to Novartis. The Company also received $5.0 million cash related to the sale of 539,131 shares of the Company’s common stock, at a purchase price of $9.2742 per share. The fair market value of the common stock issued to Novartis was $4.8 million, based on the closing stock price of $8.93 per share on August 24, 2017, resulting in a $0.2 million premium paid to the Company. Based on the achievement of pre-specified criteria, the Company is eligible to receive up to $438.0 million in development, regulatory and commercial milestones under the Gevokizumab License Agreement. The Company is also eligible to receive royalties on sales of licensed products, which are tiered based on sales levels and range from the high single-digits to mid teens. Under the IL-1 Target License Agreement, the Company received an upfront cash payment of $10.0 million and is eligible to receive low single-digit royalties on canakinumab sales in cardiovascular indications covered by the Company’s patents. Should Novartis exercise the Exclusivity Option, the royalties on canakinumab sales will increase to the mid single-digits. Unless terminated earlier, the Gevokizumab License Agreement and IL-1 Target License Agreement will remain in effect, on a country-by-country and product-by-product basis, until Novartis’ royalty obligations end. The two agreements contain customary termination rights relating to material breach by either party. Novartis also has a unilateral right to terminate the Gevokizumab License Agreement on a product-by-product and country-by-country basis or in its entirety on six months’ prior written notice to the Company. Under the IL-1 Target License Agreement, Novartis has a unilateral right to terminate the agreement on a product-by-product and country-by-country basis or in its entirety upon a prior written notice. The Gevokizumab License Agreement and IL-1 Target License Agreement were accounted for as one arrangement because they were entered into at the same time in contemplation of each other. The Company concluded that there are multiple promised goods and services under the combined arrangement, including the transfer of license to IL-1 beta targeting antibodies, and the transfer of license, know-how, process, materials and inventory related to the VPM087 antibody, which were determined to represent two distinct performance obligations. The Company determined that the Exclusivity Option is not an option with material right because the upfront payments to the Company were not negotiated to provide an incremental discount for the future additional royalties upon exercise of the Exclusivity Option. Therefore, the Company concluded that the Exclusivity Option is not a performance obligation. The additional royalties will be recognized as revenue when, and if, Novartis exercises its option because the Company has no further performance obligations at that point. At the inception of the arrangement, the Company determined that the transaction price under the arrangement was $40.2 million, which consisted of the $25.7 million upfront cash payments, the $14.3 million Servier Loan payoff and the $0.2 million premium on the sale of the common stock. The transaction price was allocated to the two performance obligations based on their standalone selling prices. The Company determined that the nature of the two performance obligations is the right to use the licenses as they exist at the point of transfer, which occurred when the transfer of materials, process and know-how, and filings to regulatory authority were completed. During the year ended December 31, 2017, the Company recognized the entire transaction price of $40.2 million as revenue upon completion of the delivery of the licenses and related materials, process and know-how, and filings to regulatory authority. The Company concluded that the development and regulatory milestone payments are solely dependent on Novartis’ performance and achievement of specified events. The Company determined that it is not probable that a significant cumulative revenue reversal will not occur in future periods for these future payments. Therefore, the development and regulatory milestones are fully constrained and excluded from the transaction price until the respective milestone is achieved. Any consideration related to commercial milestones (including royalties) will be recognized when the related sales occur as they were determined to relate predominantly to the licenses granted to Novartis and therefore, have also been excluded from the transaction price. At the end of each reporting period, the Company will update its assessment of whether an estimate of variable consideration is constrained and update the estimated transaction price accordingly. As of September 30, 2023 and December 31, 2022, there were no contract assets or contract liabilities related to this arrangement, and none of the costs to obtain or fulfill the contract were capitalized. The Company did not recognize any revenue related to this arrangement during the three and nine months ended September 30, 2023 and 2022. Takeda On November 1, 2006, the Company entered into the Takeda Collaboration Agreement with Takeda under which the Company agreed to discover and optimize therapeutic antibodies against multiple targets selected by Takeda. Under the terms of the Takeda Collaboration Agreement, the Company may receive additional milestone payments aggregating up to $19.0 million relating to TAK-079 (mezagitamab) and TAK-169 (MT-0169), and low single-digit royalties on future sales of all products subject to this license. The Company’s right to milestone payments expires on the later of the receipt of payment from Takeda of the last amount to be paid under the agreement or the cessation by Takeda of all research and development activities with respect to all program antibodies, collaboration targets or collaboration products. The Company’s right to royalties expires on the later of 13.5 years from the first commercial sale of each royalty-bearing discovery product or the expiration of the last-to-expire licensed patent (or 12 years from first commercial sale if there is significant generic competition post patent-expiration). In February 2009, the Company expanded the existing collaboration to provide Takeda with access to multiple antibody technologies, including a suite of research and development technologies and integrated information and data management systems. The Company may receive milestones of up to $3.3 million per discovery product candidate and low single-digit royalties on future sales of all antibody products subject to this license. The Company’s right to milestone payments expires on the later of the receipt of payment from Takeda of the last amount to be paid under the agreement or the cessation by Takeda of all research and development activities with respect to all program antibodies, collaboration targets or collaboration products. The Company’s right to royalties expires on the later of 10 years from the first commercial sale of such royalty-bearing discovery product or the expiration of the last-to-expire licensed patent. In November 2020, the first patient was dosed in Takeda’s Phase 2 study of mezagitamab and the Company earned a $2.0 million milestone payment from Takeda. In August 2021, Molecular Templates, Inc., assumed full rights to TAK-169 from Takeda, including full control of TAK-169 clinical development, per the terms of its terminated collaboration agreement with Takeda. In January 2022, the Company earned a development milestone pursuant to the Takeda Collaboration and recognized $0.8 million as revenue from contracts with customers in the condensed consolidated statement of operations and comprehensive loss for the nine months ended September 30, 2022. No revenue was recognized for the three and nine months ended September 30, 2023, or for the three months ended September 30, 2022. As of September 30, 2023 and December 31, 2022 there were no contract assets or contract liabilities related to this arrangement and none of the costs to obtain or fulfill the contract were capitalized. The Company is eligible to receive remaining milestones up to a total of $16.0 million under the Takeda Collaboration Agreement. Rezolute On December 6, 2017, the Company entered into a license agreement with Rezolute pursuant to which the Company granted an exclusive global license to Rezolute to develop and commercialize X358 (now “RZ358”) products for all indications. The Company and Rezolute also entered into a common stock purchase agreement pursuant to which Rezolute agreed to issue to the Company, as consideration for receiving the license for RZ358, a certain number of its common stock related to its future financing activities. Under the terms of the license agreement, Rezolute is responsible for all development, regulatory, manufacturing and commercialization activities associated with RZ358 and is required to make certain development, regulatory and commercial milestone payments to the Company of up to $232.0 million in the aggregate based on the achievement of pre-specified criteria. Under the license agreement, the Company is also eligible to receive royalties ranging from the high single-digits to the mid-teens based upon annual net sales of any commercial product incorporating RZ358. The Company concluded that the development and regulatory milestone payments are solely dependent on Rezolute’s performance and achievement of the specified events. The Company determined that it is not probable that a significant cumulative revenue reversal will not occur in future periods for these future payments. Therefore, the remaining development and regulatory milestones are fully constrained and excluded from the transaction price until the respective milestone is achieved. Any consideration related to commercial milestones (including royalties) will be recognized when the related sales occur as they were determined to relate predominantly to the licenses granted to Rezolute and therefore, have also been excluded from the transaction price. At the end of each reporting period, the Company will update its assessment of whether an estimate of variable consideration is constrained and update the estimated transaction price accordingly. Rezolute’s obligation to pay royalties with respect to a particular RZ358 product and country will continue for the longer of the date of expiration of the last valid patent claim covering the product in that country, or twelve years from the date of the first commercial sale of the product in that country. Rezolute’s future royalty obligations in the United States will be reduced by 20% if the manufacture, use or sale of a licensed product is not covered by a valid XOMA patent claim, until such a claim is issued. Pursuant to the license agreement, XOMA is eligible to receive a low single-digit royalty on sales of Rezolute’s other non-RZ358 products from its current programs, including RZ402 which is in Phase 2 clinical testing. Rezolute’s obligation to pay royalties with respect to a particular Rezolute product and country will continue for the longer of twelve years from the date of the first commercial sale of the product in that country or for so long as Rezolute or its licensee is selling such product in such country, provided that any such licensee royalty will terminate upon the termination of the licensee’s obligation to make payments to Rezolute based on sales of such product in such country The license agreement contains customary termination rights relating to material breach by either party. Rezolute also has a unilateral right to terminate the license agreement in its entirety on ninety days’ notice at any time. To the extent permitted by applicable laws, the Company has the right to terminate the license agreement if Rezolute challenges the licensed patents. No consideration was exchanged upon execution of the arrangement. In consideration for receiving the license for RZ358, Rezolute agreed to issue shares of its common stock and pay cash to the Company upon the occurrence of Rezolute’s financing activities. The license agreement was subsequently amended in 2018, 2019 and 2020. Pursuant to the terms of the license agreement as amended, the Company received a total of $6.0 million upon Rezolute’s financing and $8.5 million in installment payments through October 2020. The Company also received 161,861 shares of Rezolute’s common stock (as adjusted for the 1 In January 2022, Rezolute dosed the last patient in its Phase 2b clinical trial for RZ358, which triggered a $2.0 million milestone payment due to the Company pursuant to the Rezolute License Agreement. No revenue was recognized for the three and nine months ended September 30, 2023. The Company recognized no revenue and $2.0 million as revenue from contracts with customers in the condensed consolidated statement of operations and comprehensive loss for the three and nine months ended September 30, 2022, respectively. As of September 30, 2023 and December 31, 2022 there were no contract assets or contract liabilities related to this arrangement. None of the costs to obtain or fulfill the contract were capitalized. Janssen Biotech The Company and Janssen were parties to a license agreement which was terminated in 2017. to Janssen to develop and commercialize certain drug candidates under the XOMA patents and know-how. Under the new agreement, Janssen made a one-time payment of $2.5 million to XOMA. Additionally, for each drug candidate, the Company is entitled to receive milestone payments of up to $3.0 million upon Janssen’s achievement of certain clinical development and regulatory approval events. Additional milestones may be due for drug candidates which are the subject of multiple clinical trials. Upon commercialization, the Company is eligible to receive 0.75% royalty on net sales of each product. Janssen’s obligation to pay royalties with respect to a particular product and country will continue until the eighth-year-and-sixth-month anniversary of the first commercial sale of the product in such country. The new agreement will remain in effect unless terminated by mutual written agreement of the parties. The Company concluded that the new agreement should be accounted for separately from any prior arrangements with Janssen and that the license grant is the only performance obligation under the new agreement. The Company recognized the entire one-time payment of $2.5 million as revenue for the year ended December 31, 2019 as it had completed its performance obligation. The Company concluded that the development and regulatory milestone payments are solely dependent on Janssen’s performance and achievement of specified events and thus it is not probable that a significant cumulative revenue reversal will not occur in future periods for these future payments. Therefore, the development and regulatory milestones are fully constrained and excluded from the transaction price until the respective milestone is achieved. Any consideration related to royalties will be recognized when the related sales occur as they were determined to relate predominantly to the license granted to Janssen and therefore, have also been excluded from the transaction price. At the end of each reporting period, the Company will update its assessment of whether an estimate of variable consideration is constrained and update the estimated transaction price accordingly. As of September 30, 2023 and December 31, 2022, there were no contract assets or contract liabilities related to this arrangement. None of the costs to obtain or fulfill the contract were capitalized. In April 2023, the Company earned a $0.5 million milestone from Janssen, upon dosing of the first patient in a Phase 3 clinical trial evaluating one of Janssen’s biologic assets. In addition, during the second quarter of 2023, the Company also earned $0.6 million total for three additional milestones pursuant to its agreement with Janssen. The Company recognized milestone revenue of $0.2 million and $1.3 million for the three and nine months ended September 30, 2023, respectively. The Company did not recognize any revenue related to this arrangement during the three and nine months ended September 30, 2022. Affimed In April 2021, the Company and Affimed entered into a contractual agreement, under which the Company is eligible to receive payments from Affimed on potential future commercial sales related to three ICE The Company concluded that the commercial milestone payments are solely dependent on Affimed’s performance and achievement of specified events. The Company determined that it is not probable that a significant cumulative revenue reversal will not occur in future periods for these future payments. Therefore, the commercial milestones are fully constrained and excluded from the transaction price until the respective milestone is achieved. Any consideration related to commercial milestones (including royalties) will be recognized when the related approvals occur and therefore have also been excluded from the transaction price. At the end of each reporting period, the Company will update its assessment of whether an estimate of variable consideration is constrained and update the estimated transaction price accordingly. As of September 30, 2023 and December 31, 2022, there were no contract assets or contract liabilities related to this arrangement. None of the costs to obtain or fulfill the contract were capitalized. The Company did not recognize any revenue related to this arrangement during the three and nine months ended September 30, 2023 and 2022. Sale of Future Revenue Streams On December 21, 2016, the Company entered into two royalty interest sale agreements (together, the “Royalty Sale Agreements”) with HCRP. Under the first Royalty Sale Agreement, the Company sold its right to receive milestone payments and royalties on future sales of products subject to a License Agreement, dated August 18, 2005, between XOMA and Wyeth Pharmaceuticals (subsequently acquired by Pfizer) for an upfront cash payment of $6.5 million, plus potential additional payments totaling $4.0 million in the event three specified net sales milestones were met in 2017, 2018 and 2019. Based on actual sales, 2017, 2018, and 2019 sales milestones were not achieved. Under the second Royalty Sale Agreement entered into in December 2016, the Company sold its right to receive certain royalties under an Amended and Restated License Agreement dated October 27, 2006 between XOMA and Dyax Corp. for a cash payment of $11.5 million. The Company classified the proceeds received from HCRP as unearned revenue, to be recognized as revenue under the units-of-revenue method over the life of the license agreements because of the Company’s limited continuing involvement in the Acquisition Agreements. Such limited continuing involvement is related to the Company’s undertaking to cooperate with HCRP in the event of litigation or a dispute related to the license agreements. Because the transaction was structured as a non-cancellable sale, the Company does not have significant continuing involvement in the generation of the cash flows due to HCRP and there are no guaranteed rates of return to HCRP, the Company recorded the total proceeds of $18.0 million as unearned revenue recognized under the units-of-revenue method. The Company allocated the total proceeds between the two Royalty Sale Agreements based on the relative fair value of expected payments to be made to HCRP under the license agreements. The unearned revenue is being recognized as revenue over the life of the underlying license agreements under the "units-of-revenue" method. Under this method, amortization for a reporting period is calculated by computing a ratio of the allocated proceeds received from HCRP to the payments expected to be made by the licensees to HCRP over the term of the Acquisition Agreements and then applying that ratio to the period’s cash payment. During the third quarter of 2018, the Shire product underlying the Dyax Corp. license agreement was approved, and the Company began recognizing revenue under the units-of-revenue method due to sales of the approved product. The Company recognized $0.6 million and $1.6 million as revenue under the units-of-revenue method under these arrangements during the three and nine months ended September 30, 2023, respectively. The Company recognized $0.4 million and $1.2 million as revenue under the units-of-revenue method under these arrangements during the three and nine months ended September 30, 2022, respectively. As of December 31, 2022, the current and non-current portion of the remaining unearned revenue recognized under the units-of-revenue method was $1.9 million and $9.6 million, respectively. As of September 30, 2023, the Company classified $2.1 million and $7.8 million as current and non-current unearned revenue recognized under the units-of-revenue method, respectively. |
Royalty and Commercial Payment
Royalty and Commercial Payment Purchase Agreements | 9 Months Ended |
Sep. 30, 2023 | |
Royalty and Commercial Payment Purchase Agreements | |
Royalty and Commercial Payment Purchase Agreements | 5. Royalty and Commercial Payment Purchase Agreements Short-term royalty and commercial payment receivables were $0 million and $2.4 million as of September 30, 2023 and December 31, 2022, respectively. Long-term royalty and commercial payment receivables were $74.7 million and $63.7 million as of September 30, 2023 and December 31, 2022, respectively. LadRx Agreements On June 21, 2023, the Company entered into the LadRx AAA pursuant to which the Company acquired from LadRx all of its rights, title and interest related to arimoclomol under an asset purchase agreement dated May 13, 2011 between Zevra and LadRx. The Company also entered into the LadRx RPA, pursuant to which the Company acquired the right to receive all of the future royalties, regulatory and commercial milestones as well as other related payments due to LadRx from ImmunityBio related to aldoxorubicin under a license agreement dated July 27, 2017, as amended on September 27, 2018, between ImmunityBio and LadRx. The purchased rights related to arimoclomol include potential regulatory and commercial milestones of up to $52.5 million (net of certain payment obligations of up to $9.5 million based on a portion of the regulatory and commercial milestone payments) and potential royalty payments in low single-digit percentages of aggregate net sales associated with arimoclomol. The purchased payments related to aldoxorubicin include potential regulatory and commercial milestones of up to $342.7 million and royalty payments on aggregate net sales of aldoxorubicin in the low to mid-teens for sales of orphan indications and mid to high single-digit percentages on other licensed products. Upon closing of the LadRx Agreements, the Company paid LadRx an upfront payment of $5.0 million and may pay up to an additional $6.0 million in regulatory and commercial sales milestones which included $5.0 million related to regulatory milestones and $1.0 million related to commercial sales milestones. The Company concluded that the regulatory milestone payments of $5.0 million met the definition of a derivative under ASC 815 and should be accounted for at fair value and recorded as a current liability at the inception of the transaction. The fair value of the regulatory milestone payments was estimated to be $1.0 million. The Company concluded the commercial milestone payment of $1.0 million did not meet the definition of a derivative under ASC 815 and a liability will be recognized when probable and estimable. At the inception of the LadRx Agreements, the Company recorded $6.0 million as long-term royalty receivables related to the aggregate of the arimoclomol and aldoxorubicin Under the cost recovery method, the Company does not expect to recognize any income related to royalties, milestones and other payments until the purchase price has been fully collected. The Company performed its impairment assessment and no allowance for credit losses was recorded as of September 30, 2023. Aptevo Commercial Payment Purchase Agreement On March 29, 2023, the Company entered into the Aptevo CPPA, pursuant to which the Company acquired from Aptevo a portion of its milestone and commercial payment rights under a sale agreement dated February 28, 2020 between Aptevo and Medexus, related to IXINITY, which is marketed by Medexus for the control and prevention of bleeding episodes and postoperative management in people with Hemophilia B. The Company is entitled to receive a mid-single digit percentage of all IXINITY quarterly net sales from January 1, 2023 into the first quarter of 2035, and will be entitled to milestone payments of up to $5.3 million. At the inception of the Aptevo CPPA, the Company recorded $9.7 million as long-term royalty receivables which included a $9.6 million upfront payment and a $50,000 one-time payment in its condensed consolidated balance sheet, which would be due if XOMA received more than $0.5 million in receipts for first quarter 2023 sales of IXINITY. At inception of the agreement, the Company concluded the one-time payment of $50,000 was probable and reasonably estimable. Therefore, the payment was recorded as contingent liabilities under ASC 450 in its condensed consolidated balance sheet (the “Aptevo Contingent Consideration”) at inception and was paid in June 2023 when related receipts exceeded $0.5 million. In June 2023, the Company received $0.6 million from Medexus representing the first commercial payment attributable to net sales of IXINITY that occurred during the first quarter of 2023. In September 2023, the Company received $0.6 million attributable to sales during the second quarter of 2023. In accordance with the cost recovery method, the cash received was recorded as a direct reduction of the long-term royalty receivable balance. Based upon limited available information, the Company is unable to reasonably estimate its commercial payment stream from sales of future net sales and the commercial payments to be received during the twelve-month period following the balance sheet date of September 30, 2023 and, as such, no amounts are reflected as short-term royalty and commercial payment receivables. Under the cost recovery method, the Company does not expect to recognize any income related to milestones and commercial payment received until the purchase price has been fully collected. The Company performed its impairment assessment and no allowance for credit losses was recorded as of September 30, 2023. Agenus Royalty Purchase Agreement On September 20, 2018, the Company entered into the Agenus RPA, pursuant to which the Company acquired the right to receive 33% of the future royalties on six Incyte Europe S.a.r.l. (“Incyte”) immuno-oncology assets, currently in development, due to Agenus from Incyte (net of certain royalties payable by Agenus to a third party) and 10% of all future developmental, regulatory and commercial milestones related to these assets. However, the Company did not have a right to the expected near-term milestone associated with the entry of INCAGN2390 (anti-TIM-3) into its Phase 1 clinical trial. The future royalties due to Agenus from Incyte are based on low single to mid teen-digit percentage of applicable net sales. In addition, the Company acquired the right to receive 33% of the future royalties on MK-4830, an immuno-oncology product currently in clinical development, due to Agenus from Merck and 10% of all future developmental, regulatory and commercial milestones related to this asset. The future royalties due to Agenus from Merck are based on low single-digit percentage of applicable net sales. Pursuant to the Agenus RPA, the Company’s share in future potential development, regulatory and commercial milestones is up to $59.5 million. There is no limit on the amount of future royalties on sales that the Company may receive under the agreements. Under the terms of the Agenus RPA, the Company paid Agenus $15.0 million. At the inception of the agreement, the Company recorded $15.0 million as long-term royalty receivables in the consolidated balance sheets. In November 2020, MK-4830 advanced into Phase 2 development, and Agenus earned a $10.0 million clinical development milestone under its license agreement with Merck, of which the Company earned $1.0 million. In accordance with the cost recovery method, the $1.0 million milestone received was recorded as a direct reduction of the recorded long-term royalty receivable balance. The Company continues to assess that no further payments are probable to be received under this agreement in the near term. Under the cost recovery method, the Company does not expect to recognize any income related to milestones and royalties received until the purchase price has been fully collected. The Company performed its impairment assessment and no allowance for credit losses was recorded as of September 30, 2023 or December 31, 2022. Bioasis Royalty Purchase Agreement On February 25, 2019, the Company entered into the Bioasis RPA, pursuant to which the Company acquired potential future milestone and royalty rights from Bioasis for product candidates that are being developed pursuant to a license agreement between Bioasis and Prothena Biosciences Limited. In addition, the Company was granted options to purchase a 1% royalty right on the next two license agreements entered into between Bioasis and third-party licensees subject to certain payments and conditions as well as a right of first negotiation on the purchase of royalty rights on subsequent Bioasis license agreements with third parties. Upon exercise of the option related to the second license agreement executed by Bioasis, the Company would have been obligated to pay up to $0.3 million per licensed product. Upon exercise of the option related to the third license agreement executed by Bioasis, the Company may be obligated to pay up to $0.4 million per licensed product. Under the terms of the Bioasis RPA, the Company paid $0.3 million and would have made contingent future cash payments of up to $0.2 million to Bioasis as the licensed product candidates reach certain development milestones (the “Bioasis Contingent Consideration”). At the inception of the agreement, the Company recorded $0.4 million as long-term royalty receivables in its consolidated balance sheet, including the estimated fair value of the Bioasis Contingent Consideration of $75,000. On November 2, 2020, the Company entered into the Second Bioasis RPA, pursuant to which the Company acquired potential future milestone and other payments, and royalty rights from Bioasis for product candidates that were being developed pursuant to a research collaboration and license agreement between Bioasis and Chiesi. The Company paid Bioasis $1.2 million upon closing of the Second Bioasis RPA for the purchased rights. At the inception of the Second Bioasis RPA, the Company recorded $1.2 million as long-term royalty receivables in its consolidated balance sheet. On June 20, 2023, Bioasis announced the suspension of all its operations and the termination of the research collaboration and license agreement between Bioasis and Chiesi. As a result, the Company recorded an impairment of $1.6 million under royalty purchase agreement asset impairment in its condensed consolidated statement of operations and a reduction of $1.6 million under long-term royalty receivables related to the Bioasis RPA and Second Bioasis RPA. Due to the assessment that the credit loss will not potentially reverse in the future, the Company wrote off the royalty asset receivable and no allowance for credit losses was recorded as of September 30, 2023. There was no allowance for credit losses recorded as of December 31, 2022. The fair value of the Bioasis Contingent Consideration was reduced to $0 with the change in the estimated fair value recognized in other income (expense), net in the condensed consolidated statement of operations and comprehensive loss. Aronora On April 7, 2019, the Company entered into the Aronora RPA which closed on June 26, 2019. Under the Aronora RPA, the Company acquired the right to receive future royalties and a portion of upfront, milestone, and option payments (the “Non-Royalties”) related to five anti-thrombotic hematology drug candidates. Three candidates were subject to Aronora’s collaboration with Bayer (the “Bayer Products”), including one which was subject to an exclusive license option by Bayer. The Company will receive 100% of future royalties and 10% of future Non-Royalties economics from these Bayer Products. The other two candidates are unpartnered (the “non-Bayer Products”) for which the Company will receive low single-digit percentage of net sales and 10% of Non-Royalties. The future payment percentage for Non-Royalties will be reduced from 10% to 5% upon the Company’s receipt of two times the total cumulative amount of consideration paid by the Company to Aronora. In July 2020, Bayer elected to not exercise its option on the third Bayer Product and that product is now subject to the same economics as the non-Bayer Products. Under the terms of the Aronora RPA, the Company paid Aronora a $6.0 million upfront payment at the close of the transaction. The Company financed $3.0 million of the upfront payment with a term loan under its Loan and Security Agreement with SVB. The Company was required to make a contingent future cash payment of $1.0 million for each of the three Bayer Products that were active on September 1, 2019 (up to a total of $3.0 million, the “Aronora Contingent Consideration”). Pursuant to the Aronora RPA, if the Company receives $250.0 million in cumulative royalties on net sales per product, the Company will be required to pay associated tiered milestone payments to Aronora in an aggregate amount of up to $85.0 million per product (the “Royalty Milestones”). The Royalty Milestones are paid based upon various royalty tiers prior to reaching $250.0 million in cumulative royalties on net sales per product. Royalties per product in excess of $250.0 million are retained by the Company. At the inception of the agreement, the Company recorded $9.0 million as long-term royalty receivables in its consolidated balance sheet, including the estimated fair value of the Aronora Contingent Consideration of $3.0 million. In September 2019, the Company paid the $3.0 million contingent consideration to Aronora. As the Company receives royalties from Aronora for a product, the Company will recognize the liability for future Royalty Milestones for such product when probable and estimable. The Company continues to assess that no payments are probable to be received under this agreement in the near term. Under the cost recovery method, the Company does not expect to recognize any income related to milestones and royalties received until the purchase price has been fully collected. The Company performed its impairment assessment and no allowance for credit losses was recorded as of September 30, 2023 or December 31, 2022. Palobiofarma Royalty Purchase Agreement On September 26, 2019, the Company entered into the Palo RPA, pursuant to which the Company acquired the rights to potential royalty payments in low single-digit percentages of aggregate net sales associated with six drug candidates in various clinical development stages, targeting the adenosine pathway with potential applications in solid tumors, non-Hodgkin’s lymphoma, asthma/chronic obstructive pulmonary disease, ulcerative colitis, idiopathic pulmonary fibrosis, lung cancer, psoriasis and nonalcoholic steatohepatitis and other indications (the “Palo Licensed Products”) that are being developed by Palo. Novartis is a development partner on NIR178, one of the Palo Licensed Products, and NIR178 is being developed pursuant to a license agreement between Palo and Novartis. Under the terms of the Palo RPA, the Company paid Palo a $10.0 million payment at the close of the transaction, which occurred simultaneously upon parties’ entry into the Palo RPA on September 26, 2019. At the inception of the agreement, the Company recorded $10.0 million as long-term royalty receivables in its consolidated balance sheet. The Company continues to assess that no payments are probable to be received under this agreement in the near term. Under the cost recovery method, the Company does not expect to recognize any income related to royalties received until the purchase price has been fully collected. The Company performed its impairment assessment and no allowance for credit losses was recorded as of September 30, 2023 or December 31, 2022. Viracta Royalty Purchase Agreement On March 22, 2021, the Company entered into the Viracta RPA, pursuant to which the Company acquired the right to receive future royalties, milestones, and other payments related to two clinical-stage drug candidates for $13.5 million. The first candidate, DAY101 (pan-RAF kinase inhibitor), is being developed by Day One Biopharmaceuticals, and the second candidate, vosaroxin (topoisomerase II inhibitor), is being developed by Denovo Biopharma. The Company acquired the right to receive (i) up to $54.0 million in potential milestones, potential royalties on sales, if approved, and other payments related to DAY101, excluding up to $20.0 million consideration retained by Viracta, and (ii) up to $57.0 million in potential regulatory and commercial milestones and high single-digit royalties on sales related to vosaroxin, if approved. At the inception of the Viracta RPA, the Company recorded $13.5 million as long-term royalty receivables in its consolidated balance sheet. No payments are probable to be received under the Viracta RPA in the near term. Under the cost recovery method, the Company does not expect to recognize any income related to royalties, milestones and other payments until the purchase price has been fully collected. The Company performed its impairment assessment and no allowance for credit losses was recorded as of September 30, 2023 or December 31, 2022. Kuros Royalty Purchase Agreement On July 14, 2021, the Company entered into the Kuros RPA, pursuant to which the Company acquired the rights to 100% of the potential future royalties from commercial sales, which are tiered from high single-digit to low double-digits, and up to $25.5 million in pre-commercial milestone payments associated with an existing license agreement related to Checkmate Pharmaceuticals’ vidutolimod (CMP-001), a Toll-like receptor 9 agonist, packaged in a virus-like particle, for an upfront payment of $7.0 million. The Company may pay up to an additional $142.5 million to Kuros in sales-based milestones. At the inception of the Kuros RPA, the Company recorded $7.0 million as long-term royalty receivables in its consolidated balance sheet. Under the cost recovery method, the Company does not expect to recognize any income related to royalties, milestones and other payments until the purchase price has been fully collected. In May 2022, Regeneron completed its acquisition of Checkmate Pharmaceuticals resulting in a $5.0 million milestone payment to Kuros. Pursuant to the Kuros RPA, the Company is entitled to 50% of the milestone payment, which was received by XOMA in July 2022. In accordance with the cost recovery method, the $2.5 million milestone received was recorded as a direct reduction of the recorded long-term royalty receivable balance. The Company performed its impairment assessment and no allowance for credit losses was recorded as of September 30, 2023 or December 31, 2022. Commercial Payment Purchase Agreement with Affitech On October 6, 2021, the Company entered into the Affitech CPPA, pursuant to which, the Company purchased a future stream of commercial payment rights to Roche’s faricimab from Affitech for an upfront payment of $6.0 million. The Company is eligible to receive 0.5% of future net sales of faricimab for a ten-year period following the first commercial sales in each applicable jurisdiction. Under the terms of the Affitech CPPA, the Company may pay up to an additional $20.0 million based on the achievement of certain regulatory and sales milestones. At the inception of the Affitech CPPA, the Company recorded $14.0 million as long-term royalty receivables which included the $6.0 million upfront payment and $8.0 million in regulatory milestones in its consolidated balance sheet. The Company concluded the regulatory milestone payments of $8.0 million met the definition of a derivative under ASC 815 and should be accounted at fair value and recorded as a current liability at the inception of the transaction. Therefore, the regulatory milestone payments were recorded as contingent liabilities in its consolidated balance sheet. The Company concluded the sales-based milestone payments of $12.0 million do not meet the definition of a derivative under ASC 815 and a liability will be recognized when probable and estimable. In January 2022, Roche received approval from the FDA to commercialize VABYSMO (faricimab-svoa) for the treatment of wet, or neovascular, age-related macular degeneration and diabetic macular edema. In September 2022, Roche received approval from the European Commission to commercialize VABYSMO for the treatment of wet, or neovascular, age-related macular degeneration and visual impairment due to diabetic macular edema. Pursuant to the Affitech CPPA, the Company paid Affitech a $5.0 million milestone tied to the U.S. marketing approvals and a $3.0 million milestone tied to the EC approvals. In August 2022, the Company received $0.5 million from Roche representing the first commercial payment for sales of VABYSMO during the first six months of 2022. In accordance with the cost recovery method, the $0.5 million received was recorded as a direct reduction of the long-term royalty receivable balance. In February 2023, the Company received $2.4 million, representing its commercial payment received from sales of VABYSMO during the last six months of 2022. The payment amount was classified as a short-term royalty and commercial payment receivable as of December 31, 2022. In accordance with the cost recovery method, the $2.4 million received in February 2023 was recorded as a direct reduction of the short-term royalty receivable balance. In September 2023, the Company received $4.9 million, representing its commercial payment received for sales of VABYSMO during the first six months of 2023. The payment amount was classified as a short-term royalty and commercial payment receivable as of June 30, 2023. In accordance with the cost recovery method, the $4.9 million received in September 2023 was recorded as a direct reduction of the short-term royalty receivable balance as of September 30, 2023. The achievement of the first sales-based milestone under the Affitech CPPA was considered probable as of September 30, 2023, and the Company recognized a $3.0 million contingent liability. The Company may pay up to $9.0 million in additional sales-based milestone payments upon the achievement of certain incremental sales milestones in the future which are not assessed as probable and as a result not recorded as a contingent liability as of September 30, 2023. Under the cost recovery method, the Company does not expect to recognize any income related to future commercial payment receipts until the purchase price has been fully collected. The Company performed its impairment assessment and no allowance for credit losses was recorded as of September 30, 2023 or December 31, 2022. The following table summarizes the royalty and commercial payment receivable activities during the nine months ended September 30, 2023 (in thousands): Short-Term Long-Term Balance at January 1, 2023 $ 2,366 $ 63,683 Acquisition of royalty and commercial payment receivables: Aptevo — 9,650 LadRx — 6,000 Receipt of royalty and commercial payments: Affitech (7,284) — Aptevo — (1,144) Impairment of royalty and commercial payment receivables: Bioasis — (1,575) Reclassification to short-term royalty and commercial payment receivables: Affitech 4,918 (4,918) Recognition of contingent consideration: Affitech — 3,000 Balance at September 30, 2023 $ — $ 74,696 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Measurements | |
Fair Value Measurements | 6. Fair Value Measurements The Company records its financial assets and liabilities at fair value. The carrying amounts of certain of the Company’s financial instruments, including cash, trade receivables, net and accounts payable, approximate their fair value due to their short maturities. Fair value is defined as the exchange price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The accounting guidance for fair value establishes a framework for measuring fair value and a fair value hierarchy that prioritizes the inputs used in valuation techniques. The accounting standard describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following: Level 1 – Observable inputs, such as unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 – Observable inputs, either directly or indirectly, other than quoted prices in active markets for identical assets or liabilities, such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. 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; therefore, requiring an entity to develop its own valuation techniques and assumptions. The following tables set forth the Company’s fair value hierarchy for its financial assets and liabilities measured at fair value on a recurring basis as follows (in thousands): Fair Value Measurements at September 30, 2023 Using: Quoted Prices in Significant Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs (Level 1) (Level 2) (Level 3) Total Assets: Cash equivalents: Money market funds $ 27,985 $ — $ — $ 27,985 Total cash equivalents 27,985 — — 27,985 Equity securities 214 — — 214 Total financial assets $ 28,199 $ — $ — $ 28,199 Liabilities: Contingent consideration under RPAs, AAAs and CPPAs $ — $ — $ 1,000 $ 1,000 Fair Value Measurements at December 31, 2022 Using: Quoted Prices in Significant Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs (Level 1) (Level 2) (Level 3) Total Assets: Cash equivalents: Money market funds $ 30,334 $ — $ — $ 30,334 Total cash equivalents 30,334 — — 30,334 Equity securities 335 — — 335 Total financial assets $ 30,669 $ — $ — $ 30,669 Liabilities: Contingent consideration under RPAs, AAAs and CPPAs $ — $ — $ 75 $ 75 Equity Securities The equity securities consisted of an investment in Rezolute’s common stock and are classified on the condensed consolidated balance sheets as current assets as of September 30, 2023 and December 31, 2022. The equity securities are revalued each reporting period with changes in fair value recorded in the other income (expense), net line item of the condensed consolidated statements of operations and comprehensive loss. As of September 30, 2023 and December 31, 2022, the Company valued the equity securities using the closing price for Rezolute’s common stock traded on the Nasdaq Stock Market of $1.32 and $2.07, respectively. The inputs that were used to calculate the fair value of the equity securities were observable prices in active markets and therefore were classified as a Level 1 fair value measurement. Contingent Consideration at Fair Value The estimated fair value of the LadRx contingent consideration liability at the inception of the LadRx Agreements represents the future consideration that is contingent upon the achievement of specified regulatory milestones for the product candidates related to arimoclomol and aldoxorubicin. The fair value measurement is based on significant Level 3 inputs such as anticipated timelines and probability of achieving development milestones of each product candidate. Changes in the fair value of the liability for contingent consideration will be recorded in the other income (expense), net line item of the condensed consolidated statements of operations and comprehensive loss until settlement. From June 21, 2023 to September 30, 2023, there were no changes in the estimated fair value of the contingent consideration recorded pursuant to the LadRx Agreements from the initial value of $1.0 million. |
Lease Agreements
Lease Agreements | 9 Months Ended |
Sep. 30, 2023 | |
Lease Agreements | |
Lease Agreements | 7. Lease Agreements The Company leases one facility in Emeryville, California under an operating lease. In January 2023, the Company amended the original lease to extend the lease term five months from its original expiration of February 28, 2023 to July 31, 2023. The Company retains no option to further extend, renew or terminate the lease under the amended terms and all other material terms and conditions, including the monthly base rent, will remain consistent with the original lease. In accordance with ASC 842, the Company accounted for the amendment to extend the lease term as a modification of the original lease and, as such, remeasured the lease liability and recognized a corresponding adjustment to the right-of-use asset of $0.1 million to reflect the changes in the lease payments due to the extended lease term. On June 27, 2023, the Company executed an amended lease agreement for its corporate headquarters lease in Emeryville, California with the same counterparty, in a different location in the same building to replace its existing lease expiring in July 2023. The amended lease agreement has a term of 65 months and has an expected commencement date in the fourth quarter of 2023. Undiscounted future rent payments associated with the new lease through the 65-month term is expected to be $0.5 million. Under the amended lease agreement, the Company retains access to its existing premises under the lease which expired in July 2023 until the new premises are available. Payments made between when the lease expired in July 2023 and the commencement date of the new premises are recorded as variable lease costs. As of December 31, 2022, the total net lease liability was $34,000. There was no net lease liability as of September 30, 2023. The following table summarizes the cost components of the Company’s operating lease for the three and nine months ended September 30, 2023 and 2022 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Lease costs: Operating lease cost $ 17 $ 45 $ 116 $ 133 Variable lease cost (1) 20 4 32 9 Total lease costs $ 37 $ 49 $ 148 $ 142 (1) The following information represents supplemental disclosure for the statement of cash flows related to operating leases (in thousands): Nine Months Ended September 30, 2023 2022 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows under operating leases $ 121 $ 151 The present value assumptions used in calculating the present value of the lease payments for the Company’s operating lease as of September 30, 2023 and December 31, 2022 were as follows: September 30, December 31, 2023 2022 Weighted-average remaining lease term 0 years (2) 0.17 years (1) Weighted-average discount rate n/a 5.51 % (1) (2) |
Common Stock Warrants
Common Stock Warrants | 9 Months Ended |
Sep. 30, 2023 | |
Common Stock Warrants | |
Common Stock Warrants | 8. Common Stock Warrants As of September 30, 2023 and December 31, 2022, the following common stock warrants were outstanding: Exercise Price September 30, December 31, Issuance Date Expiration Date Balance Sheet Classification per Share 2023 2022 May 2018 May 2028 Stockholders’ equity $ 23.69 6,332 6,332 March 2019 March 2029 Stockholders’ equity $ 14.71 4,845 4,845 11,177 11,177 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies | |
Commitments and Contingencies | 9. Commitments and Contingencies Collaborative Agreements, Royalties and Milestone Payments The Company has committed to make potential future milestone payments and legal fees to third parties as part of licensing and development programs. Payments under these agreements become due and payable only upon the achievement of certain developmental, regulatory and commercial milestones by the Company’s licensees. Because it is uncertain if and when these milestones will be achieved, such contingencies, aggregating up to $6.3 million (assuming one product per contract meets all milestone events) have not been recorded on the accompanying condensed consolidated balance sheets. The Company is unable to determine precisely when and if payment obligations under the agreements will become due as these obligations are based on milestone events, the achievement of which is subject to a significant number of risks and uncertainties. Contingent Consideration Pursuant to the Company’s agreements with Bioasis, Aronora, Kuros, Affitech, ObsEva and Aptevo the Company has committed to pay the Bioasis Contingent Consideration, the Aronora Royalty Milestones, the Kuros Sales Milestones, the Affitech Sales Milestones, the ObsEva Sales Milestones, the ObsEva Non-Sales Milestones, the Merck KGaA royalties and the Aptevo Contingent Consideration. The Company included $75,000 for the Bioasis Contingent Consideration that represented the estimated fair value of the potential future payments of the Bioasis RPA as of December 31, 2022. The Bioasis Contingent Consideration was remeasured at fair value at each reporting period, with changes in fair value recorded in other income (expense), net. During the second quarter of 2023, the estimated fair value of the Bioasis Contingent Consideration was reduced to $0 and, as such, no balance remains as of September 30, 2023. The Company recorded $1.0 million for the LadRx contingent consideration that represents the estimated fair value of the potential future payments upon the achievement of regulatory milestones related to arimoclomol and aldoxorubicin In the first quarter of 2023, the Company recorded a contingent liability of $50,000 under ASC 450 for the Aptevo Contingent Consideration at the inception of the Aptevo CPPA. During the nine months ended September 30, 2023, the contingent liability recorded pursuant to the Aptevo CPPA decreased to zero after the Company paid Aptevo $50,000 upon achievement of the related commercial sales milestone. In the third quarter of 2023, a certain sales milestone related to VABYSMO pursuant to the Affitech CPPA was assessed to be probable under ASC 450. As such, a $3.0 million liability was recorded in contingent consideration under RPAs, AAAs and CPPAs and a corresponding $3.0 million asset was recorded under long-term royalty and commercial payment receivables on the condensed consolidated balance sheet. The liability for future Aronora Royalty Milestones, Kuros Sales Milestones, remaining Affitech Sales Milestones and LadRx milestones will be recorded when the amounts, by product, are estimable and probable. The liability for future ObsEva Non-Sales Milestones, ObsEva Sales Milestones and Merck KGaA royalties will be recorded at the time that the corresponding underlying revenue under the Organon License Agreement is estimatable and probable. As of September 30, 2023, none of the Aronora Royalty Milestones, Kuros Sales Milestones, remaining Affitech Sales Milestones, LadRx milestones, ObsEva Non-Sales Milestones, ObsEva Sales Milestones, or Merck KGaA royalties were assessed to be probable and as such, no liability was recorded on the condensed consolidated balance sheet |
Stock Based Compensation
Stock Based Compensation | 9 Months Ended |
Sep. 30, 2023 | |
Stock Based Compensation | |
Stock Based Compensation | 10. Stock Based Compensation The Company may grant qualified and non-qualified stock options, common stock, PSUs and other stock-based awards under various plans to directors, officers, employees and other individuals. Stock options are granted at exercise prices of not less than the fair market value of the Company’s common stock on the date of grant. Additionally, the Company has an ESPP that allows employees to purchase Company shares at a purchase price equal to 85% of the lower of the fair market value of the Company’s common stock on the first trading day of the offering period or on the last day of the offering period. Stock Options and Other Benefit Plans 2010 Plan Stock Options Stock options issued under the 2010 Plan generally vest monthly over three years for employees and one year for directors. Stock options held by employees who qualify for retirement age (defined as employees that are a minimum of 55 years of age and the sum of their age plus years of full-time employment with the Company exceeds 70 years) vest on the earlier of scheduled vest date or the date of retirement. Fair Value Assumptions of 2010 Plan Stock Options The fair value of the stock options granted under the 2010 Plan during the three and nine months ended September 30, 2023 and 2022, was estimated based on the following weighted average assumptions: Three Months Ended September 30, Nine Months Ended September 30, 2023 (1) 2022 (1) 2023 2022 Dividend yield — — 0 % 0 % Expected volatility — — 70 % 70 % Risk-free interest rate — — 3.60 % 2.17 % Expected term — — 5.79 years 5.65 years (1) No stock options were granted under the 2010 Plan during the three months ended September 30, 2023 and 2022. The weighted-average grant-date fair value per share of the options granted under the 2010 Plan during the nine months ended September 30, 2023 and 2022 was $13.46 and $12.21, respectively. Stock Option Inducement Awards On December 30, 2022, the Board appointed Owen Hughes as Executive Chairman of the Board and Interim Chief Executive Officer (principal executive officer) and Bradley Sitko as the Company’s Chief Investment Officer, effective as of January 1, 2023. Pursuant to the terms of their respective employment agreements, Mr. Hughes and Mr. Sitko were each granted two separate awards of non-qualified stock options on January 3, 2023 (collectively, the “Stock Option Inducement Awards”) when the Company’s stock price was $18.66 per share. The Stock Option Inducement Awards were granted to Mr. Hughes and Mr. Sitko outside the 2010 Plan as an inducement material to entering into their respective employment with the Company in accordance with Nasdaq Listing Rule 5635(c)(4) but are subject to the terms and conditions of the 2010 Plan. On January 3, 2023, the Company granted Mr. Hughes two separate non-qualified stock options to purchase: (i) 100,000 shares of the Company’s common stock at a fair market value exercise price of $18.66 per share that will vest in a series of four equal installments on March 31, 2023, June 30, 2023, September 30, 2023 and December 31, 2023 and (ii) 75,000 shares of the Company’s common stock at an above fair market value exercise price of $30.00 per share that will vest in a series of 36 successive equal monthly installments measured from January 1, 2023. On January 3, 2023, the Company granted Mr. Sitko two separate non-qualified stock options to purchase: (i) 300,000 shares of the Company’s common stock at a fair market value exercise price of $18.66 per share and (ii) 250,000 shares of the Company’s common stock at an above fair market value exercise price of $30.00 per share. Twenty-five percent of the shares subject to Mr. Sitko’s option grants will vest and become exercisable on January 3, 2024, and the balance of the shares will vest and become exercisable in a series of 36 successive equal monthly installments thereafter. Fair Value Assumptions of Stock Option Inducement Awards The fair value of the stock options granted to Mr. Hughes and Mr. Sitko at an exercise price of $18.66 per share during the nine months ended September 30, 2023, was estimated based on the following weighted average assumptions: Three Months Ended September 30, Nine Months Ended September 30, 2023 (1) 2022 (1) 2023 2022 (1) Dividend yield — — 0 % — Expected volatility — — 69 % — Risk-free interest rate — — 3.92 % — Expected term — — 5.79 years — (1) No Stock Option Inducement Awards were granted during the three months ended September 30, 2023 or the three and nine months ended September 30, 2022. The weighted-average grant-date fair value per share of options granted to Mr. Hughes and Mr. Sitko at an exercise price of $18.66 per share during the first quarter of 2023 was $11.91. The fair value of the stock options granted to Mr. Hughes and Mr. Sitko at an exercise price of $30.00 per share during the first quarter of 2023 was estimated based on the following weighted average assumptions: Three Months Ended September 30, Nine Months Ended September 30, 2023 (1) 2022 (1) 2023 2022 (1) Dividend yield — — 0 % — Expected volatility — — 91 % — Risk-free interest rate — — 3.86 % — Expected term — — 8.01 years — (1) No Stock Option Inducement Awards were granted during the three months ended September 30, 2023 or the three and nine months ended September 30, 2022. The weighted-average grant-date fair value per share of options granted to Mr. Hughes and Mr. Sitko at an exercise price of $30.00 per share during the first quarter of 2023 was $14.68. The activity for all stock options for the nine months ended September 30, 2023, was as follows: Weighted Weighted Average Average Aggregate Exercise Contractual Intrinsic Number of Price Remaining Term Value shares Per Share (in years) (in thousands) Outstanding at January 1, 2023 2,025,542 $ 20.24 6.10 $ 10,804 Granted 796,802 23.50 Exercised (8,473) 18.29 Forfeited, expired or cancelled (71,303) 36.51 Outstanding at September 30, 2023 2,742,568 $ 20.77 6.51 $ 6,799 Exercisable at September 30, 2023 1,887,253 $ 19.45 5.32 $ 6,799 The aggregate intrinsic value of stock options exercised during the nine months ended September 30, 2023 and 2022 was $18,000 and $2.8 million, respectively. As of September 30, 2023, $9.4 million of total unrecognized compensation expense related to stock options is expected to be recognized over a weighted average period of 2.61 years. Performance Stock Unit Awards In May 2023, the Company granted employees 430,400 PSUs in the aggregate under the 2010 Plan. The PSUs are subject to market-based vesting conditions and the number of PSUs vested will be based on the stock price of the Company’s common stock as compared to four stock price hurdles over a three-year period from the May 2023 grant date (the “performance period”). A stock price hurdle is considered attained when, at any time during the performance period, the Company’s volume-weighted average stock price equals or exceeds the hurdle stock price value for 30 consecutive calendar days. Upon attainment of a stock price hurdle, 1/3 1/3 1/3 Fair Value Assumptions of Performance Stock Unit Awards The fair value of the PSUs granted was estimated based on Monte Carlo valuation model which incorporates into the valuation the possibility that the stock price hurdles may not be satisfied. The range of grant date fair values of the PSUs issued in May 2023 were estimated as follows: Derived Hurdle Price Number of Fair Value Service Period Per Share PSUs Per Share (in years) $ 30.00 232,956 $ 16.36-17.45 0.69-0.76 $ 35.00 87,708 $ 15.03-16.07 0.93-0.99 $ 40.00 57,851 $ 13.82-14.84 1.12-1.18 $ 45.00 51,885 $ 12.75-13.72 1.27-1.33 430,400 The Company estimates that it will recognize total stock-based compensation expense of approximately $6.7 million in aggregate using the graded expense attribution method over the requisite service period of each tranche. If the stock price hurdles are met sooner than the requisite service period, the stock-based compensation expense for the respective stock price hurdle will be accelerated. Stock-based compensation expense will be recognized over the requisite service period if the grantees continue to provide service to the Company, regardless of whether the PSU stock price hurdles are achieved. The activity for all PSUs for the nine months ended September 30, 2023, was as follows: Weighted Average Grant Date Number of Fair Value Unvested PSUs Per Share Unvested balance at January 1, 2023 — $ — Granted 430,400 15.61 Vested — — Forfeited — — Unvested balance at September 30, 2023 430,400 $ 15.61 The Company recorded $1.1 million and $1.7 million of stock-based compensation expense related to the PSUs during the three and nine months ended September 30, 2023, respectively. As of September 30, 2023, there was $5.1 million unrecognized stock-based compensation expense related to outstanding PSUs granted to employees, with a weighted-average remaining recognition period of 1.6 years. Stock-based Compensation Expense All stock-based compensation expense is recorded in G&A expense. The following table shows total stock-based compensation expense for stock options and PSUs issued under the 2010 Plan, the Stock Option Inducement Awards and ESPP in the condensed consolidated statements of operations and comprehensive loss (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Total stock-based compensation expense included in G&A $ 2,717 $ 806 $ 6,450 $ 2,620 Employee Retention Bonus In October 2022, the Company approved the Amended Retention Plan which provided that each of its then current employees, excluding the Chief Executive Officer, would be eligible to receive a cash retention bonus if employed through each of two periods: (1) the three-month anniversary of November 1, 2022 (the “Initial Period”) and (2) the nine-month period immediately following the Initial Period. All other terms of the Amended Retention Plan remain consistent with the Retention Plan. The Company is accruing and recognizing the cost of the cash retention bonus as expense on a straight-line basis from November 1, 2022 through October 31, 2023. The Company paid $0.2 million of cash retention bonuses accrued over the Initial Period in January 2023. Pursuant to the Amended Retention Plan, as of September 30, 2023, the Company expects to pay an additional $0.5 million in cash in 2023 related to the cash retention bonuses. The Company recognized $0.1 million and $0.5 million for cash retention bonuses in operating expenses in the condensed consolidated statement of operations and comprehensive loss during the three and nine months ended September 30, 2023, respectively, and will recognize the remaining amount of $0.1 million for cash retention bonuses in operating expenses through October 31, 2023. The Company accrued cash retention bonuses in accrued and other liabilities in the condensed consolidated balance sheets of $0.5 million as of September 30, 2023 and $0.1 million as of December 31, 2022. James R. Neal Departure and Continuity Incentive James R. Neal retired as the Company’s Chief Executive Officer effective as of December 31, 2022 (the “Departure Date”) and resigned as a member of the Board and Chairman of the Board, effective as of January 1, 2023. Pursuant to Mr. Neal’s Amended and Restated Employment Agreement, dated December 15, 2021, by and between the Company and Mr. Neal, following the Departure Date, Mr. Neal is entitled to a cash payment of $1.2 million (the “Continuity Incentive”) which will be made in equal monthly installments starting in January 2023 through December 2023, less deductions and withholdings. The Company accrued the full $1.2 million Continuity Incentive in operating expenses in the consolidated statement of operations and comprehensive loss during the year ended December 31, 2022. The unpaid accrued Continuity Incentive recorded in accrued and other liabilities in the condensed consolidated balance sheets as of September 30, 2023 and December 31, 2022 was $0.3 million and $1.2 million, respectively |
Capital Stock
Capital Stock | 9 Months Ended |
Sep. 30, 2023 | |
Capital Stock | |
Capital Stock | 11. Capital Stock Dividends During the nine months ended September 30, 2023, the Company’s Board of Directors declared and paid cash dividends on the Company’s Series A Preferred Stock and Series B Depositary shares as follows: Series A Preferred Stock Series B Depositary Share Cash Dividend Declared Cash Dividend Declared Dividend Declaration Date ($ per share) ($ per share) Dividend Payment Date October 26, 2022 $ 0.53906 $ 0.52344 January 17, 2023 February 22, 2023 $ 0.53906 $ 0.52344 April 17, 2023 May 17, 2023 $ 0.53906 $ 0.52344 July 17, 2023 July 26, 2023 $ 0.53906 $ 0.52344 October 16, 2023 BVF Ownership As of September 30, 2023, BVF owned approximately 31.7% of the Company’s total outstanding shares of common stock, and if all the Series X convertible preferred shares were converted, BVF would own 52.4% of the Company’s total outstanding shares of common stock. The Company’s Series A Preferred Stock becomes convertible upon the occurrence of specific events and as of September 30, 2023, the contingency was not met, therefore the Series A Preferred Stock owned by BVF is not included in the as-converted ownership calculation. Due to its significant equity ownership, BVF is considered a related party of the Company. 2018 Common Stock ATM Agreement On December 18, 2018, the Company entered into the 2018 Common Stock ATM Agreement with HCW, under which the Company may offer and sell from time to time at its sole discretion shares of its common stock through HCW as its sales agent, in an aggregate amount not to exceed $30.0 million. HCW may sell the shares by any method permitted by law deemed to be an “at the market” offering as defined in Rule 415 of the Securities Act and will use its commercially reasonable efforts consistent with its normal trading and sales practices to sell the shares up to the amount specified. The Company will pay HCW a commission of up to 3% of the gross proceeds of any shares of common stock sold under the 2018 Common Stock ATM Agreement. On March 10, 2021, the Company amended the 2018 Common Stock ATM Agreement with HCW to increase the aggregate amount of shares of its common stock that it could sell through HCW as its sales agent to $50.0 million. No shares have been sold under the 2018 Common Stock ATM Agreement since the agreement was executed. 2021 Series B Preferred Stock ATM Agreement On August 5, 2021, the Company entered into the 2021 Series B Preferred Stock ATM Agreement with B. Riley, under which the Company may offer and sell from time to time, at its sole discretion, through or to B. Riley, as agent or principal an aggregate amount not to exceed $50.0 million of its Series B Depositary Shares. B. Riley may sell the shares by any method permitted by law deemed to be an “at the market” offering as defined in Rule 415 of the Securities Act and will use its commercially reasonable efforts consistent with its normal trading and sales practices to sell the shares up to the amount specified. The Company will pay B. Riley a commission of up to 3% of the gross proceeds of any Series B Depositary Shares sold under the 2021 Series B Preferred Stock ATM Agreement. No shares have been sold under the 2021 Series B Preferred Stock ATM Agreement since the agreement was executed. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2023 | |
Income Taxes | |
Income Taxes | 12. Income Taxes No provision was made for federal income tax, since the Company has incurred net operating losses during the three and nine months ended September 30, 2023 and 2022. The Company continues to maintain a full valuation allowance against its remaining net deferred tax assets. The Company has a total of $5.9 million of gross unrecognized tax benefits, none of which would affect the effective tax rate upon realization as it currently has a full valuation allowance against its net deferred tax assets. The reversal of related deferred tax assets will be offset by a valuation allowance, should any of these uncertain tax positions be favorably settled in the future. The Company does not expect its unrecognized tax benefits to change significantly over the next twelve months. The Company will recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. Through September 30, 2023, the Company has not accrued interest or penalties related to uncertain tax positions. On August 16, 2022, President Biden signed the Inflation Reduction Act of 2022 (the Inflation Act) into law. The Inflation Act contains certain tax measures, including a corporate alternative minimum tax of 15% on some large corporations and an excise tax of 1% on corporate stock buy-backs. The various provisions of the Inflation Act do not have a material impact on the Company’s financial statements. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2023 | |
Subsequent Events | |
Subsequent Events | 13. Subsequent Events On October 23, 2023, Organon notified the Company of its intent to terminate for convenience the Organon License Agreement, which XOMA assumed pursuant to the ObsEva IP Acquisition Agreement dated November 21, 2022. On October 30, 2023, the Company earned a $5.0 million milestone pursuant to the Viracta RPA related to the FDA’s acceptance of Day One Biopharmaceuticals’ NDA for tovorafenib. |
Basis of Presentation and Sig_2
Basis of Presentation and Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Basis of Presentation and Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions among consolidated entities were eliminated upon consolidation. The unaudited condensed consolidated financial statements were prepared in accordance with GAAP in the United States and with the instructions to Form 10-Q and Article 10 of Regulation S-X for interim financial reporting. As permitted under those rules certain footnotes or other financial information can be condensed or omitted. These condensed consolidated financial statements and related disclosures have been prepared with the assumption that users of the interim financial information have read or have access to the audited consolidated financial statements for the preceding fiscal year. Accordingly, these statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on March 9, 2023. These condensed consolidated financial statements have been prepared on the same basis as the Company’s annual consolidated financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal and recurring adjustments that are necessary for a fair statement of the Company’s consolidated financial information. The interim results of operations are not necessarily indicative of the results that may be expected for the full year, or for any other future annual or interim period. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP in the United States requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosures. On an ongoing basis, management evaluates its estimates including, but not limited to, those related to revenue recognition, revenue recognized under the units-of-revenue method, royalty and commercial payment receivables, intangible assets, legal contingencies, contingent consideration, accrued expenses and stock-based compensation. The Company bases its estimates on historical experience and on various other market-specific and other relevant assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ significantly from these estimates, such as the Company’s amortization of the payments received from HCRP. Under the contracts with HCRP, the amortization for the reporting period is calculated based on the payments expected to be made by the licensees to HCRP over the term of the arrangement. Any changes to the estimated payments by the licensees to HCRP can result in a material adjustment to revenue previously reported. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash consists of bank deposits held in business checking and interest-bearing deposit accounts. As of September 30, 2023, the Company had a cash balance of $5.5 million and cash equivalent balances of $28.0 million, defined as highly liquid financial instruments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. As of December 31, 2022, the Company had a cash balance of $27.5 million and cash equivalent balances of $30.3 million. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue from all contracts with customers according to ASC 606, except for contracts that are within the scope of other standards, such as leases, insurance and financial instruments. The Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract on whether each promised good or service is distinct to determine those that are performance obligations. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation based on relative fair values, when (or as) the performance obligation is satisfied. The Company recognizes revenue from its license and collaboration arrangements and royalties. The terms of the arrangements generally include payment to the Company of one or more of the following: non-refundable, upfront license fees, development, regulatory and commercial milestone payments, and royalties on net sales of licensed products. License of intellectual property If the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenue from non-refundable, upfront fees allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license. For licenses that are bundled with other promises, such as transfer of related materials, process and know-how, the Company utilizes judgement to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time. Under the Company’s license agreements, the nature of the combined performance obligation is the granting of licenses to the customers as the other promises are not separately identifiable in the context of the arrangement. Since the Company grants the license to a customer as it exists at the point of transfer and is not involved in any future development or commercialization of the products related to the license, the nature of the license is a right to use the Company’s intellectual property as transferred. As such, the Company recognizes revenue related to the combined performance obligation upon completion of the delivery of the related materials, process and know-how (i.e., at a point in time). Milestone payments At the inception of each arrangement that includes development and regulatory milestone payments, the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price. ASC 606 suggests two alternatives to use when estimating the amount of variable consideration: the expected value method and the most likely amount method. Under the expected value method, an entity considers the sum of probability-weighted amounts in a range of possible consideration amounts. Under the most likely amount method, an entity considers the single most likely amount in a range of possible consideration amounts. The Company uses the most likely amount method for development and regulatory milestone payments. If it is probable that a significant cumulative revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the control of the Company or the licensee, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. The transaction price is then allocated to each performance obligation on a relative stand-alone selling price basis. The Company recognizes revenue as or when the performance obligations under the contract are satisfied. At the end of each subsequent reporting period, the Company re-evaluates the probability or achievement of each such milestone and any related constraint, and if necessary, adjusts its estimates of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenue and earnings in the period of adjustment. Royalties For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). Upfront payments and fees are recorded as deferred revenue upon receipt or when due and may require deferral of revenue recognition to a future period until the Company performs its obligations under these arrangements. Amounts payable to the Company are recorded as accounts receivable when the Company’s right to consideration is unconditional. The Company does not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the customer and the transfer of the promised goods or services to the customer will be one year or less. |
Sale of Future Revenue Streams | Sale of Future Revenue Streams The Company has sold its rights to receive certain milestones and royalties on product sales. In the circumstance where the Company has sold its rights to future milestones and royalties under a license agreement and also maintains limited continuing involvement in the arrangement (but not significant continuing involvement in the generation of the cash flows that are due to the purchaser), the Company defers recognition of the proceeds it receives for the sale of milestone or royalty streams and recognizes such unearned revenue as revenue under the units-of-revenue method over the life of the underlying license agreement. Under the units-of-revenue method, amortization for a reporting period is calculated by computing a ratio of the proceeds received from the purchaser to the total payments expected to be made to the purchaser over the term of the agreement, and then applying that ratio to the period’s cash payment. Estimating the total payments expected to be received by the purchaser over the term of such arrangements requires management to use subjective estimates and assumptions. Changes to the Company’s estimate of the payments expected to be made to the purchaser over the term of such arrangements could have a material effect on the amount of revenues recognized in any particular period. |
Stock-Based Compensation | Stock-Based Compensation The Company recognizes compensation expense for all stock-based payment awards made to the Company’s employees, consultants and directors that are expected to vest based on estimated fair values. The valuation of stock option awards is determined at the date of grant using the Black-Scholes Model. The Black-Scholes Model requires inputs such as the expected term of the option, expected volatility and risk-free interest rate. To establish an estimate of expected term, the Company considers the vesting period and contractual period of the award and its historical experience of stock option exercises, post-vesting cancellations and volatility. The estimate of expected volatility is based on the Company’s historical volatility. The risk-free rate is based on the yield available on United States Treasury zero-coupon issues corresponding to the expected term of the award. The Company records forfeitures when they occur. The Company records compensation expense for service-based awards on a straight-line basis over the requisite service period, which is generally the vesting period of the award, or to the date on which retirement eligibility is achieved, if shorter. The grant date fair value of PSUs with market conditions are determined using the Monte Carlo valuation model. The Company records compensation expenses for PSUs based on graded expense attribution over the requisite service periods. |
Equity Securities | Equity Securities The Company entered into a license agreement with Rezolute in December 2017, in which it received shares of common stock from Rezolute (Note 4). Equity investments in Rezolute are classified in the condensed consolidated balance sheets as equity securities. The equity securities are measured at fair value, with changes in fair value recorded in the other income (expense), net line item of the condensed consolidated statement of operations and comprehensive loss at each reporting period. The Company remeasures its equity investments at each reporting period until such time that the investment is sold or disposed of. If the Company sells an investment, any realized gains and losses on the sale of the securities will be recognized in the condensed consolidated statement of operations and comprehensive loss in the period of sale. |
Purchase of Rights to Future Milestones, Royalties and Commercial Payments | Purchase of Rights to Future Milestones, Royalties and Commercial Payments The Company has purchased rights to receive a portion of certain future developmental, regulatory and commercial sales milestones, royalties and option fees on sales of products currently in clinical development or recently commercialized. The Company acquired such rights from various entities and recorded the amount paid for these rights as long-term royalty receivables (Note 5). In addition, the Company may be obligated to make contingent payments related to certain product development milestones, fees upon exercise of options related to future license products and sales-based milestones. The contingent payments are evaluated to determine if they are freestanding instruments or embedded derivatives. If the contingent payments fall within the scope of ASC 815, the contingent payments are measured at fair value at the inception of the arrangement, and subject to remeasurement to fair value each reporting period. Any changes in the estimated fair value are recorded in the condensed consolidated statement of operations and comprehensive loss. Contingent consideration payments that do not fall within the scope of ASC 815 are recognized when the amount is probable and estimable according to ASC 450. The Company accounts for milestone and royalty rights related to developmental pipeline or recently commercialized products on a non-accrual basis using the cost recovery method. These developmental pipeline products are non-commercialized, non-approved products that require FDA or other regulatory approval, and thus have uncertain cash flows. The recently commercialized products do not have an established reliable sales pattern, and thus have uncertain cash flows. The Company is not yet able to reliably forecast future cash flows given their stages of development and commercialization. The related receivable balance is classified as noncurrent or current based on whether payments are probable and reasonably estimable to be received in the near term. Under the cost recovery method, any milestone or royalty payment received is recorded as a direct reduction of the recorded receivable balance. When the recorded receivable balance has been fully collected, any additional amounts collected are recognized as revenue. |
Allowance for Current Expected Credit Losses | Allowance for Current Expected Credit Losses The Company evaluates the long-term royalty and commercial payment receivables on a collective, i.e., pool, basis if they share similar risk characteristics. The Company would evaluate a royalty and commercial payment receivable individually if its risk characteristics are not similar to other royalty and commercial payment receivables. The Company reviews public information on clinical trials, press releases and updates from its partners regularly to identify any impairment indicators or changes in expected recoverability of the long-term royalty and commercial payment receivable asset. At each reporting date, if the Company determines expected future cash flows discounted to the current period are less than the carrying value of the asset, the Company will record impairment. The impairment will be recognized as an allowance expense that increases the long-term royalty and commercial payment receivable asset’s cumulative allowance, which reduces the net carrying value of the long-term royalty and commercial payment receivable asset. In a subsequent period, if there is an increase in expected future cash flows, or if the actual cash flows are greater than previously expected, the Company will reduce the previously established cumulative allowance. Amounts not expected to be collected are written off against the allowance at the time that such a determination is made. |
Asset Acquisitions | Asset Acquisitions As a first step, for each acquisition, the Company determines if it is an acquisition of a business or an asset acquisition under ASC 805. Acquisitions of assets or a group of assets that do not meet the definition of a business are accounted for as asset acquisitions under ASC 805-50, using the cost accumulation method, whereby the cost of the acquisition, including certain transaction costs, is allocated to the assets acquired on the basis of relative fair values (Note 4). Contingent payments are evaluated whether they are freestanding instruments or embedded derivatives. If the contingent payments fall within the scope of ASC 815, the contingent payments are measured at fair value at the acquisition date, and subject to remeasurement to fair value each reporting period. The estimated fair value at the acquisition date is included in the cost of the acquired assets. Any subsequent changes in the estimated fair value are recorded in the condensed consolidated statement of operations and comprehensive loss. Contingent consideration payments that do not fall within the scope of ASC 815 are recognized when the amount is probable and estimable according to ASC 450. Cash payments related to acquired assets are reflected as an investing cash flow in the Company’s condensed consolidated statement of cash flows. |
Intangible Assets | Intangible Assets The identifiable intangible asset consists of IP acquired in the ObsEva IP Acquisition Agreement in 2022. This intangible asset is amortized on a straight-line basis over its estimated useful life of 17 years. The straight-line method of amortization represents the Company’s best estimate of the distribution of the economic value of the identifiable intangible asset. The intangible asset is carried at cost less accumulated amortization. Amortization will be included in amortization of intangible assets in the condensed consolidated statement of operations and comprehensive loss. Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparison of the carrying amount of an asset group to the future net undiscounted cash flows that the assets are expected to generate. If the carrying amount of an asset group exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset group exceeds the fair value of the asset group. |
Leases | Leases The Company leases its headquarters office space in Emeryville, California. The Company determines the initial classification and measurement of its right-of-use assets and lease liabilities at the lease commencement date and thereafter if modified. The lease term includes any renewal options and termination options that the Company is reasonably certain to exercise. The present value of lease payments is determined by using the interest rate implicit in the lease, if that rate is readily determinable; otherwise, the Company uses its incremental borrowing rate. The incremental borrowing rate is determined by using the rate of interest that the Company would pay to borrow on a collateralized basis an amount equal to the lease payments for a similar term and in a similar economic environment. The Company built its incremental borrowing rate starting with the interest rate on its fully collateralized debt and then adjusted it for lease term length. Rent expense for the operating lease is recognized on a straight-line basis, over the reasonably assured lease term based on the total lease payments and is included in operating expenses in the condensed consolidated statements of operations and comprehensive loss. The Company has elected the practical expedient to not separate lease and non-lease components. The Company’s non-lease components are primarily related to property maintenance, which varies based on future outcomes, and thus are recognized in rent expense when incurred. The Company has also elected not to record on the consolidated balance sheet a lease which term is 12 months or less and does not include a purchase option that the Company is reasonably certain to exercise. |
Income Taxes | Income Taxes The Company accounts for income taxes using the liability method under which deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amount which is more likely than not to be realizable. The recognition, derecognition and measurement of a tax position is based on management’s best judgment given the facts, circumstances and information available at each reporting date. The Company’s policy is to recognize interest and penalties related to the underpayment of income taxes as a component of income tax expense. To date, there have been no interest or penalties charged in relation to the unrecognized tax benefits. |
Net Loss per Share Attributable to Common Stockholders | Net Loss per Share Attributable to Common Stockholders The Company calculates basic and diluted loss per share attributable to common stockholders using the two-class method. The Company’s convertible Series X preferred stocks participate in any dividends declared by the Company on its common stock and are therefore considered to be participating securities. The Company’s Series A and Series B Preferred Stock do not participate in any dividends or distribution by the Company on its common stock and are therefore not considered to be participating securities. Under the two-class method, net income, as adjusted for any accumulated dividends on Series A and Series B Preferred Stock for the period, is allocated to each class of common stock and participating security as if all of the net income for the period had been distributed. Undistributed earnings allocated to participating securities are subtracted from net income in determining net income attributable to common stockholders. During periods of loss, the Company allocates no loss to participating securities because they have no contractual obligation to share in the losses of the Company. Basic net loss per share attributable to common stockholders is then calculated by dividing the net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. All participating securities are excluded from the basic weighted average common shares outstanding. Diluted net loss per share attributable to common stockholders is based on the weighted average number of shares outstanding during the period, adjusted to include the assumed exercise of certain stock options and warrants for common stock using the treasury method, if dilutive. The calculation assumes that any proceeds that could be obtained upon exercise of options and warrants would be used to purchase common stock at the average market price during the period. Adjustments to the denominator are required to reflect the related dilutive shares. The Company’s Series A and Series B Preferred Stock become convertible upon the occurrence of specific events other than a change in the Company’s share price and, therefore, are not included in the diluted shares until the contingency is resolved. |
Concentration of Risk | Concentration of Risk Cash, cash equivalents and receivables are financial instruments which potentially subject the Company to concentrations of credit risk, as well as liquidity risk. The Company maintains cash balances at commercial banks. Balances commonly exceed the amount insured by the FDIC. The Company has not experienced any losses in such accounts. The Company monitors the creditworthiness of its customers to which it grants credit terms in the normal course of business but does not generally require collateral on receivables. For the three months ended September 30, 2023, two partners represented 73% and 24% of total revenues. For the nine months ended September 30, 2023, two partners represented 54% and 44% of total revenues. For the three months ended September 30, 2022, one partner represented 94% of total revenues. For the nine months ended September 30, 2022, four partners represented 44% , 27% , 17% and 11% of total revenues. |
Comprehensive Loss | Comprehensive Loss Comprehensive loss is comprised of two components: net loss and other comprehensive loss. Other comprehensive loss refers to gains and losses that under U.S. GAAP are recorded as an element of stockholders’ equity but are excluded from net loss. The Company did not record any transactions within other comprehensive loss in the periods presented and, therefore, the net loss and comprehensive loss were the same for all periods presented. |
Accounting Pronouncements Recently Adopted | Accounting Pronouncements Recently Adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (ASC 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 replaced the incurred loss impairment methodology under current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. ASU 2016-13 requires use of a forward-looking expected credit loss model for accounts receivables, loans, and other financial instruments. Adoption of the standard requires using a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the effective date to align existing credit loss methodology with the new standard. The Company adopted ASU 2016-13 and related updates on January 1, 2023. The adoption of ASU 2016-13 had no impact on the condensed consolidated financial statements. In October 2021, the FASB issued ASU 2021-08, Business Combinations – Accounting for Contract Assets and Contact Liabilities from Contracts with Customers. The guidance is intended to improve the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice. The guidance requires an acquirer to recognize and measure contract assets and liabilities acquired in a business combination in accordance with ASC 606 as if they had originated the contracts, as opposed to at fair value on the acquisition date. The Company adopted ASU 2021-08 and related updates on January 1, 2023. The adoption of ASU 2021-08 had no impact on the condensed consolidated financial statements. |
Condensed Consolidated Financ_2
Condensed Consolidated Financial Statements Details (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Condensed Consolidated Financial Statements Details | |
Schedule of cost, accumulated amortization, and net carrying value of intangible assets | The following table summarizes cost, accumulated amortization, and net carrying value of the intangible assets as of September 30, 2023 (in thousands): Accumulated Net Carrying Cost Amortization Value As of September 30, 2023 Ebopiprant IP (Note 4) $ 15,247 $ 770 $ 14,477 Total intangible assets $ 15,247 $ 770 $ 14,477 The following table summarizes cost, accumulated amortization, and net carrying value of the intangible assets as of December 31, 2022 (in thousands): Accumulated Net Carrying Cost Amortization Value As of December 31, 2022 Ebopiprant IP (Note 4) $ 15,247 $ 97 $ 15,150 Total intangible assets $ 15,247 $ 97 $ 15,150 |
Schedule of projected amortization expense for next five years | The remaining life of the intangible assets is 16.2 years. The following table presents the projected amortization expense for the next five years (in thousands): Intangible Asset Amortization 2023 (excluding nine months ended September 30, 2023) $ 224 2024 897 2025 897 2026 897 2027 897 Total $ 3,812 |
Schedule of accrued and other liabilities | Accrued and other liabilities consisted of the following (in thousands): September 30, December 31, 2023 2022 Accrued payroll, severance and retention costs 903 1,449 Accrued incentive compensation 902 562 Accrued legal and accounting fees 325 867 Other accrued liabilities 30 40 Total $ 2,160 $ 2,918 |
Schedule of reconciliation of numerator and denominator used in calculation of basic and diluted net (loss) per share available to common stockholders | The following is a reconciliation of the numerator (net loss) and the denominator (number of shares) used in the calculation of basic and diluted net loss per share attributable to common stockholders (in thousands, except per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Numerator Net loss $ (5,509) $ (4,178) $ (20,722) $ (11,128) Less: Series A accumulated dividends (530) (530) (1,591) (1,591) Less: Series B accumulated dividends (838) (838) (2,513) (2,513) Net loss attributable to common stockholders, basic and diluted (6,877) (5,546) $ (24,826) (15,232) Denominator Weighted average shares used in computing basic and diluted net loss per share attributable to common stockholders 11,473 11,447 11,466 11,400 Basic and diluted net loss per share attributable to common stockholders $ (0.60) (0.48) $ (2.17) $ (1.34) |
Schedule of outstanding securities considered anti-dilutive | The following table shows the weighted-average shares from outstanding securities considered anti-dilutive and therefore excluded from the computation of diluted net loss per share attributable to common stockholders (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Convertible preferred stock 5,003 5,003 5,003 5,003 Common stock options 1,804 888 1,781 831 Warrants for common stock 6 6 6 6 Total 6,813 5,897 6,790 5,840 |
Royalty and Commercial Paymen_2
Royalty and Commercial Payment Purchase Agreements (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Royalty and Commercial Payment Purchase Agreements | |
Summary of royalty and commercial payment receivable activities | The following table summarizes the royalty and commercial payment receivable activities during the nine months ended September 30, 2023 (in thousands): Short-Term Long-Term Balance at January 1, 2023 $ 2,366 $ 63,683 Acquisition of royalty and commercial payment receivables: Aptevo — 9,650 LadRx — 6,000 Receipt of royalty and commercial payments: Affitech (7,284) — Aptevo — (1,144) Impairment of royalty and commercial payment receivables: Bioasis — (1,575) Reclassification to short-term royalty and commercial payment receivables: Affitech 4,918 (4,918) Recognition of contingent consideration: Affitech — 3,000 Balance at September 30, 2023 $ — $ 74,696 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Measurements | |
Schedule of Financial Assets and Liabilities Carried at Fair Value on Recurring Basis | The following tables set forth the Company’s fair value hierarchy for its financial assets and liabilities measured at fair value on a recurring basis as follows (in thousands): Fair Value Measurements at September 30, 2023 Using: Quoted Prices in Significant Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs (Level 1) (Level 2) (Level 3) Total Assets: Cash equivalents: Money market funds $ 27,985 $ — $ — $ 27,985 Total cash equivalents 27,985 — — 27,985 Equity securities 214 — — 214 Total financial assets $ 28,199 $ — $ — $ 28,199 Liabilities: Contingent consideration under RPAs, AAAs and CPPAs $ — $ — $ 1,000 $ 1,000 Fair Value Measurements at December 31, 2022 Using: Quoted Prices in Significant Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs (Level 1) (Level 2) (Level 3) Total Assets: Cash equivalents: Money market funds $ 30,334 $ — $ — $ 30,334 Total cash equivalents 30,334 — — 30,334 Equity securities 335 — — 335 Total financial assets $ 30,669 $ — $ — $ 30,669 Liabilities: Contingent consideration under RPAs, AAAs and CPPAs $ — $ — $ 75 $ 75 |
Lease Agreements (Tables)
Lease Agreements (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Lease Agreements | |
Schedule of cost components of operating leases | The following table summarizes the cost components of the Company’s operating lease for the three and nine months ended September 30, 2023 and 2022 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Lease costs: Operating lease cost $ 17 $ 45 $ 116 $ 133 Variable lease cost (1) 20 4 32 9 Total lease costs $ 37 $ 49 $ 148 $ 142 (1) |
Summary of supplemental cash flow information related to operating leases | The following information represents supplemental disclosure for the statement of cash flows related to operating leases (in thousands): Nine Months Ended September 30, 2023 2022 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows under operating leases $ 121 $ 151 |
Schedule of present value assumptions used in calculating the present value of lease payments | September 30, December 31, 2023 2022 Weighted-average remaining lease term 0 years (2) 0.17 years (1) Weighted-average discount rate n/a 5.51 % (1) (2) |
Common Stock Warrants (Tables)
Common Stock Warrants (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Common Stock Warrants | |
Summary of Common Stock Warrants Outstanding | Exercise Price September 30, December 31, Issuance Date Expiration Date Balance Sheet Classification per Share 2023 2022 May 2018 May 2028 Stockholders’ equity $ 23.69 6,332 6,332 March 2019 March 2029 Stockholders’ equity $ 14.71 4,845 4,845 11,177 11,177 |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Share-based compensation | |
Schedule of stock option activity | Weighted Weighted Average Average Aggregate Exercise Contractual Intrinsic Number of Price Remaining Term Value shares Per Share (in years) (in thousands) Outstanding at January 1, 2023 2,025,542 $ 20.24 6.10 $ 10,804 Granted 796,802 23.50 Exercised (8,473) 18.29 Forfeited, expired or cancelled (71,303) 36.51 Outstanding at September 30, 2023 2,742,568 $ 20.77 6.51 $ 6,799 Exercisable at September 30, 2023 1,887,253 $ 19.45 5.32 $ 6,799 |
Schedule of grant date fair value per PSU issued | The range of grant date fair values of the PSUs issued in May 2023 were estimated as follows: Derived Hurdle Price Number of Fair Value Service Period Per Share PSUs Per Share (in years) $ 30.00 232,956 $ 16.36-17.45 0.69-0.76 $ 35.00 87,708 $ 15.03-16.07 0.93-0.99 $ 40.00 57,851 $ 13.82-14.84 1.12-1.18 $ 45.00 51,885 $ 12.75-13.72 1.27-1.33 430,400 |
Schedule of performance shares, outstanding activity | Weighted Average Grant Date Number of Fair Value Unvested PSUs Per Share Unvested balance at January 1, 2023 — $ — Granted 430,400 15.61 Vested — — Forfeited — — Unvested balance at September 30, 2023 430,400 $ 15.61 |
Summary of stock-based compensation expense | All stock-based compensation expense is recorded in G&A expense. The following table shows total stock-based compensation expense for stock options and PSUs issued under the 2010 Plan, the Stock Option Inducement Awards and ESPP in the condensed consolidated statements of operations and comprehensive loss (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Total stock-based compensation expense included in G&A $ 2,717 $ 806 $ 6,450 $ 2,620 |
2010 Plan | |
Share-based compensation | |
Schedule of valuation assumptions | Three Months Ended September 30, Nine Months Ended September 30, 2023 (1) 2022 (1) 2023 2022 Dividend yield — — 0 % 0 % Expected volatility — — 70 % 70 % Risk-free interest rate — — 3.60 % 2.17 % Expected term — — 5.79 years 5.65 years (1) No stock options were granted under the 2010 Plan during the three months ended September 30, 2023 and 2022. |
Stock Option Inducement Award, Exercise price of $18.66 per share | |
Share-based compensation | |
Schedule of valuation assumptions | Three Months Ended September 30, Nine Months Ended September 30, 2023 (1) 2022 (1) 2023 2022 (1) Dividend yield — — 0 % — Expected volatility — — 69 % — Risk-free interest rate — — 3.92 % — Expected term — — 5.79 years — (1) No Stock Option Inducement Awards were granted during the three months ended September 30, 2023 or the three and nine months ended September 30, 2022. |
Stock Option Inducement Award, Exercise price of $30.00 per share | |
Share-based compensation | |
Schedule of valuation assumptions | Three Months Ended September 30, Nine Months Ended September 30, 2023 (1) 2022 (1) 2023 2022 (1) Dividend yield — — 0 % — Expected volatility — — 91 % — Risk-free interest rate — — 3.86 % — Expected term — — 8.01 years — (1) No Stock Option Inducement Awards were granted during the three months ended September 30, 2023 or the three and nine months ended September 30, 2022. |
Capital Stock (Tables)
Capital Stock (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Capital Stock | |
Schedule of declared and paid cash dividends | Series A Preferred Stock Series B Depositary Share Cash Dividend Declared Cash Dividend Declared Dividend Declaration Date ($ per share) ($ per share) Dividend Payment Date October 26, 2022 $ 0.53906 $ 0.52344 January 17, 2023 February 22, 2023 $ 0.53906 $ 0.52344 April 17, 2023 May 17, 2023 $ 0.53906 $ 0.52344 July 17, 2023 July 26, 2023 $ 0.53906 $ 0.52344 October 16, 2023 |
Description of Business - Liqui
Description of Business - Liquidity (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Description of Business | ||
Cash and cash equivalents | $ 33,472 | $ 57,826 |
Basis of Presentation and Sig_3
Basis of Presentation and Significant Accounting Policies - Cash and Cash Equivalents (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Basis of Presentation and Significant Accounting Policies | ||
Cash | $ 5.5 | $ 27.5 |
Cash equivalents | $ 28 | $ 30.3 |
Basis of Presentation and Sig_4
Basis of Presentation and Significant Accounting Policies - Intangible Assets and Income Taxes (Details) - USD ($) $ in Millions | Nov. 21, 2022 | Sep. 30, 2023 |
Basis of Presentation and Significant Accounting Policies | ||
Estimated useful life of intangible asset | 17 years | |
Income tax penalties or interest charged | $ 0 |
Basis of Presentation and Sig_5
Basis of Presentation and Significant Accounting Policies - Concentration of Risk (Details) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 customer | Sep. 30, 2022 customer | Sep. 30, 2023 customer | Sep. 30, 2022 customer | Dec. 31, 2022 USD ($) | |
Concentration of Risk | |||||
Trade receivable, net | $ | $ 0 | ||||
Customer Concentration Risk | Revenues | |||||
Concentration of Risk | |||||
Number of major partners | 2 | 1 | 2 | 4 | |
Customer Concentration Risk | Revenues | Partner 1 | |||||
Concentration of Risk | |||||
Concentration risk (as a percent) | 73% | 94% | 54% | 44% | |
Customer Concentration Risk | Revenues | Partner 2 | |||||
Concentration of Risk | |||||
Concentration risk (as a percent) | 24% | 44% | 27% | ||
Customer Concentration Risk | Revenues | Partner 3 | |||||
Concentration of Risk | |||||
Concentration risk (as a percent) | 17% | ||||
Customer Concentration Risk | Revenues | Two partners | |||||
Concentration of Risk | |||||
Concentration risk (as a percent) | 11% | ||||
Credit Concentration Risk | Trade Receivables | Partner 1 | |||||
Concentration of Risk | |||||
Number of major partners | 1 | ||||
Concentration risk (as a percent) | 100% |
Condensed Consolidated Financ_3
Condensed Consolidated Financial Statements Details - Equity Securities (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Equity Securities | |||||
Gain (loss) recognized due to change in fair value of investment | $ (121) | $ (330) | |||
Rezolute | |||||
Equity Securities | |||||
Long-term equity securities | $ 200 | 200 | $ 300 | ||
Gain (loss) recognized due to change in fair value of investment | $ (100) | $ (100) | $ (100) | $ (300) |
Condensed Consolidated Financ_4
Condensed Consolidated Financial Statements Details - Intangible assets, net (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Intangible assets | ||
Cost | $ 15,247 | $ 15,247 |
Accumulated Amortization | 770 | 97 |
Net Carrying Value | $ 14,477 | 15,150 |
Remaining useful life | 16 years 2 months 12 days | |
Projected amortization expense for the next five years | ||
2023 (excluding nine months ended September 30, 2023) | $ 224 | |
2024 | 897 | |
2025 | 897 | |
2026 | 897 | |
2027 | 897 | |
Total | 3,812 | |
Ebopiprant IP | ||
Intangible assets | ||
Cost | 15,247 | 15,247 |
Accumulated Amortization | 770 | 97 |
Net Carrying Value | $ 14,477 | $ 15,150 |
Condensed Consolidated Financ_5
Condensed Consolidated Financial Statements Details - Accrued and Other Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Accrued and other liabilities | ||
Accrued payroll, severance and retention costs | $ 903 | $ 1,449 |
Accrued incentive compensation | 902 | 562 |
Accrued legal and accounting fees | 325 | 867 |
Other accrued liabilities | 30 | 40 |
Total | $ 2,160 | $ 2,918 |
Condensed Consolidated Financ_6
Condensed Consolidated Financial Statements Details - Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Numerator | ||||||||
Net loss | $ (5,509) | $ (5,400) | $ (9,813) | $ (4,178) | $ (4,670) | $ (2,280) | $ (20,722) | $ (11,128) |
Less: accumulated dividends | (1,368) | (1,368) | (4,104) | (4,104) | ||||
Net loss attributable to common stockholders, basic | (6,877) | (5,546) | (24,826) | (15,232) | ||||
Net loss attributable to common stockholders, diluted | $ (6,877) | $ (5,546) | $ (24,826) | $ (15,232) | ||||
Denominator | ||||||||
Weighted average shares used in computing basic net loss per share attributable to common stockholders (in shares) | 11,473 | 11,447 | 11,466 | 11,400 | ||||
Weighted average shares used in computing diluted net loss per share attributable to common stockholders (in shares) | 11,473 | 11,447 | 11,466 | 11,400 | ||||
Basic net loss per share attributable to common stockholders (in dollars per share) | $ (0.60) | $ (0.48) | $ (2.17) | $ (1.34) | ||||
Diluted net loss per share attributable to common stockholders (in dollars per share) | $ (0.60) | $ (0.48) | $ (2.17) | $ (1.34) | ||||
8.625% Series A Cumulative, Perpetual Preferred Stock | ||||||||
Numerator | ||||||||
Less: accumulated dividends | $ (530) | $ (530) | $ (1,591) | $ (1,591) | ||||
8.375% Series B Cumulative, Perpetual Preferred Stock | ||||||||
Numerator | ||||||||
Less: accumulated dividends | $ (838) | $ (838) | $ (2,513) | $ (2,513) |
Condensed Consolidated Financ_7
Condensed Consolidated Financial Statements Details - Outstanding Securities Considered Anti-Dilutive (Details) - $ / shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share | ||||
Antidilutive securities excluded from computation of net loss per share (in shares) | 6,813 | 5,897 | 6,790 | 5,840 |
Common Stock | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share | ||||
Stock price (in dollars per share) | $ 14.09 | $ 14.09 | ||
Convertible preferred stock | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share | ||||
Antidilutive securities excluded from computation of net loss per share (in shares) | 5,003 | 5,003 | 5,003 | 5,003 |
Common stock options | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share | ||||
Antidilutive securities excluded from computation of net loss per share (in shares) | 1,804 | 888 | 1,781 | 831 |
Warrants for common stock | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share | ||||
Antidilutive securities excluded from computation of net loss per share (in shares) | 6 | 6 | 6 | 6 |
Condensed Consolidated Financ_8
Condensed Consolidated Financial Statements Details - Arbitration Proceeding (Details) $ in Thousands | 1 Months Ended | 9 Months Ended |
Jun. 30, 2021 item | Sep. 30, 2023 USD ($) | |
Commitments and Contingencies | ||
Number of arbitration proceedings initiated | item | 1 | |
Arbitration settlement costs | $ | $ 4,132 |
Licensing and Other Arrangeme_2
Licensing and Other Arrangements - ObsEva (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Nov. 21, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Asset acquisition | ||||||
Changes in estimated fair value of contingent consideration | $ 75 | |||||
Estimated useful life of intangible asset | 17 years | |||||
Amortization expense | $ 224 | 673 | ||||
Revenue recognized | 225 | $ 25 | 1,350 | $ 3,300 | ||
License Agreement | ObsEva | ||||||
Asset acquisition | ||||||
Contract assets | 0 | 0 | $ 0 | |||
Contract liabilities | 0 | 0 | 0 | |||
Revenue recognized | 0 | 0 | ||||
License Agreement | ObsEva, Organon | ||||||
Asset acquisition | ||||||
Maximum eligible milestone payments receivable upon achievement of milestones | $ 475,000 | |||||
Maximum earn-out payments | 97,500 | |||||
License Agreement | ObsEva, Organon | Development and regulatory milestones | ||||||
Asset acquisition | ||||||
Maximum earn-out payments | 46,500 | |||||
License Agreement | ObsEva, Organon | Sales-based milestones | ||||||
Asset acquisition | ||||||
Maximum earn-out payments | 51,000 | |||||
ObsEva IP | ||||||
Asset acquisition | ||||||
Payment for IP acquired under the ObsEva IP Acquisition Agreement | 15,000 | |||||
Cost to acquire assets | 15,200 | |||||
Transaction costs | $ 200 | |||||
Estimated useful life of intangible asset | 17 years | |||||
Impairment of intangible asset | 0 | $ 0 | ||||
Amortization expense | $ 200 | $ 700 |
Licensing and Other Arrangeme_3
Licensing and Other Arrangements - Novartis - NIS793 (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Sep. 30, 2015 USD ($) item | Oct. 31, 2021 USD ($) | Oct. 31, 2020 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Dec. 31, 2017 USD ($) | Dec. 31, 2015 USD ($) | Dec. 31, 2022 USD ($) | |
Licensing and other arrangements | ||||||||||
Revenue from contracts with customers | $ 225 | $ 25 | $ 1,350 | $ 3,300 | ||||||
Novartis Note | ||||||||||
Licensing and other arrangements | ||||||||||
Reduction in debt obligation | $ 7,300 | |||||||||
Novartis International | License Agreement | ||||||||||
Licensing and other arrangements | ||||||||||
Agreement termination prior written notice period | 180 days | |||||||||
Number of performance obligations | item | 1 | |||||||||
Cash payment received | 17,700 | $ 37,000 | ||||||||
Revenue from contracts with customers | $ 35,000 | $ 25,000 | 0 | $ 0 | 0 | $ 0 | $ 10,000 | $ 37,000 | ||
Maximum eligible milestone payments receivable upon achievement of milestones | $ 480,000 | |||||||||
Royalty payment period, minimum | 10 years | |||||||||
Contract assets | 0 | 0 | $ 0 | |||||||
Contract liabilities | 0 | 0 | 0 | |||||||
Capitalized contract costs | $ 0 | $ 0 | $ 0 |
Licensing and Other Arrangeme_4
Licensing and Other Arrangements - Novartis - VPM087 (Details) $ / shares in Units, $ in Thousands, € in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Aug. 24, 2017 USD ($) item agreement $ / shares shares | Aug. 24, 2017 EUR (€) item agreement shares | Sep. 30, 2023 USD ($) $ / shares | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) $ / shares | Sep. 30, 2022 USD ($) | Dec. 31, 2017 USD ($) | Dec. 31, 2022 USD ($) | |
Licensing and other arrangements | ||||||||
Revenue from contracts with customers | $ 225 | $ 25 | $ 1,350 | $ 3,300 | ||||
Common Stock | ||||||||
Licensing and other arrangements | ||||||||
Stock price (in dollars per share) | $ / shares | $ 14.09 | $ 14.09 | ||||||
Novartis Pharma AG | Gevokizumab License Agreement and IL-1 Target License Agreement | ||||||||
Licensing and other arrangements | ||||||||
Transaction price | $ 40,200 | |||||||
Cash payment received | 25,700 | |||||||
License agreement consideration received, repayment of debt | 14,300 | |||||||
Common stock premium | $ 200 | |||||||
Number of agreements | agreement | 2 | 2 | ||||||
Number of arrangements | item | 1 | 1 | ||||||
Number of performance obligations | item | 2 | 2 | ||||||
Revenue from contracts with customers | $ 0 | $ 0 | $ 0 | $ 0 | $ 40,200 | |||
Contract assets | 0 | 0 | $ 0 | |||||
Contract liabilities | 0 | 0 | 0 | |||||
Capitalized contract costs | $ 0 | $ 0 | $ 0 | |||||
Novartis Pharma AG | Gevokizumab License Agreement | ||||||||
Licensing and other arrangements | ||||||||
License agreement consideration received | $ 30,000 | |||||||
Cash payment received | 15,700 | |||||||
License agreement consideration received, repayment of debt | 14,300 | € 12 | ||||||
Proceeds from issuance of common stock | 5,000 | |||||||
Common stock premium | 200 | |||||||
Maximum eligible milestone payments receivable upon achievement of milestones | $ 438,000 | |||||||
Agreement termination prior written notice period | 6 months | 6 months | ||||||
Novartis Pharma AG | Gevokizumab License Agreement | Common Stock | ||||||||
Licensing and other arrangements | ||||||||
Shares issued (in shares) | shares | 539,131 | 539,131 | ||||||
Purchase price (in dollars per share) | $ / shares | $ 9.2742 | |||||||
Issuance of common stock, fair value | $ 4,800 | |||||||
Stock price (in dollars per share) | $ / shares | $ 8.93 | |||||||
Novartis Pharma AG | IL-1 Target License Agreement | ||||||||
Licensing and other arrangements | ||||||||
Cash payment received | $ 10,000 |
Licensing and Other Arrangeme_5
Licensing and Other Arrangements - Takeda (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||
Nov. 01, 2006 | Nov. 30, 2020 | Feb. 28, 2009 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Licensing and other arrangements | ||||||||
Revenue from contracts with customers | $ 225 | $ 25 | $ 1,350 | $ 3,300 | ||||
Takeda Pharmaceutical Company Limited | Collaboration Agreement | ||||||||
Licensing and other arrangements | ||||||||
Maximum eligible milestone payments receivable upon achievement of milestones | 16,000 | 16,000 | ||||||
Revenue from contracts with customers | $ 2,000 | 0 | $ 0 | 0 | $ 800 | |||
Contract assets | 0 | 0 | $ 0 | |||||
Contract liabilities | 0 | 0 | 0 | |||||
Capitalized contract costs | $ 0 | $ 0 | $ 0 | |||||
Takeda Pharmaceutical Company Limited | Collaboration Agreement | TAK-079 and TAK-169 | ||||||||
Licensing and other arrangements | ||||||||
Maximum eligible milestone payments receivable upon achievement of milestones | $ 19,000 | |||||||
Royalty payment period, minimum | 13 years 6 months | |||||||
Royalty payment period from the first commercial sale of each royalty-bearing discovery product | 12 years | |||||||
Takeda Pharmaceutical Company Limited | Collaboration Agreement | Other antibodies | ||||||||
Licensing and other arrangements | ||||||||
Maximum eligible milestone payments receivable per discovery product candidate | $ 3,300 | |||||||
Royalty payment period, minimum | 10 years |
Licensing and Other Arrangeme_6
Licensing and Other Arrangements - Rezolute (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | 35 Months Ended | |||||
Dec. 06, 2017 USD ($) | Jan. 31, 2022 USD ($) | Oct. 31, 2020 | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Oct. 31, 2020 USD ($) shares | Dec. 31, 2022 USD ($) | |
Licensing and other arrangements | |||||||||
Revenue recognized | $ 225 | $ 25 | $ 1,350 | $ 3,300 | |||||
Rezolute | |||||||||
Licensing and other arrangements | |||||||||
Reverse stock split | 0.02 | ||||||||
Rezolute | License Agreement and Common Stock Purchase Agreement | |||||||||
Licensing and other arrangements | |||||||||
Payments received upon achievement of financing activities | $ 6,000 | ||||||||
Installment payments received | $ 8,500 | ||||||||
Number of shares received | shares | 161,861 | ||||||||
Rezolute | License Agreement | |||||||||
Licensing and other arrangements | |||||||||
Percentage of decrease in future royalty obligations | 20% | ||||||||
Agreement termination prior written notice period | 90 days | ||||||||
License agreement consideration received | $ 0 | ||||||||
Revenue recognized | 0 | $ 0 | 0 | $ 2,000 | |||||
Contract assets | 0 | 0 | $ 0 | ||||||
Contract liabilities | 0 | 0 | 0 | ||||||
Capitalized contract costs | $ 0 | $ 0 | $ 0 | ||||||
Rezolute | License Agreement, RZ358 | |||||||||
Licensing and other arrangements | |||||||||
Maximum eligible milestone payments receivable upon achievement of milestones | $ 232,000 | ||||||||
Royalty payment period, minimum | 12 years | ||||||||
Revenue recognized | $ 2,000 | ||||||||
Rezolute | License Agreement, Non-RZ358 products | |||||||||
Licensing and other arrangements | |||||||||
Royalty payment period, minimum | 12 years |
Licensing and Other Arrangeme_7
Licensing and Other Arrangements - Janssen Biotech (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Apr. 30, 2023 USD ($) | Aug. 31, 2019 USD ($) | Sep. 30, 2023 USD ($) | Jun. 30, 2023 USD ($) item | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Dec. 31, 2019 USD ($) | Dec. 31, 2022 USD ($) | |
Licensing and other arrangements | |||||||||
Revenue from contracts with customers | $ 225 | $ 25 | $ 1,350 | $ 3,300 | |||||
Janssen Biotech Inc. | License Agreement | |||||||||
Licensing and other arrangements | |||||||||
Cash payment received | $ 2,500 | ||||||||
Maximum eligible milestone payments receivable per discovery product candidate | $ 3,000 | ||||||||
Percentage of royalty on worldwide net sales of each product upon commercialization | 0.75% | ||||||||
Number of milestones earned during the period | item | 3 | ||||||||
Revenue from contracts with customers | 200 | $ 0 | 1,300 | $ 0 | $ 2,500 | ||||
Contract assets | 0 | 0 | $ 0 | ||||||
Contract liabilities | 0 | 0 | 0 | ||||||
Capitalized contract costs | $ 0 | $ 0 | $ 0 | ||||||
Janssen Biotech Inc. | License Agreement | Dosing of first patient in a Phase 3 clinical trial | |||||||||
Licensing and other arrangements | |||||||||
Revenue from contracts with customers | $ 500 | ||||||||
Janssen Biotech Inc. | License Agreement | Milestone achieved pursuant to agreement | |||||||||
Licensing and other arrangements | |||||||||
Revenue from contracts with customers | $ 600 |
Licensing and Other Arrangeme_8
Licensing and Other Arrangements - Affimed (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Licensing and other arrangements | |||||
Revenue from contracts with customers | $ 225 | $ 25 | $ 1,350 | $ 3,300 | |
License Agreement | Affimed | |||||
Licensing and other arrangements | |||||
Contract assets | 0 | 0 | $ 0 | ||
Contract liabilities | 0 | 0 | $ 0 | ||
Capitalized contract costs | 0 | 0 | |||
Revenue from contracts with customers | $ 0 | $ 0 | $ 0 | $ 0 |
Licensing and Other Arrangeme_9
Licensing and Other Arrangements - Sale of Future Revenue Streams (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Dec. 21, 2016 USD ($) agreement period | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Licensing and other arrangements | ||||||
Unearned revenue recognized under units-of-revenue method | $ (1,575) | $ (1,241) | ||||
Revenue recognized under units-of-revenue method | $ 605 | $ 426 | 1,575 | 1,241 | ||
Unearned revenue recognized under units-of-revenue method, current | 2,078 | 2,078 | $ 1,899 | |||
Unearned revenue recognized under units-of-revenue method, noncurrent | 7,796 | 7,796 | 9,550 | |||
HealthCare Royalty Partners II, L.P. | Royalty Sale Agreements | ||||||
Licensing and other arrangements | ||||||
Number of agreements | agreement | 2 | |||||
Unearned revenue recognized under units-of-revenue method | $ 18,000 | |||||
Revenue recognized under units-of-revenue method | 600 | $ 400 | 1,600 | $ 1,200 | ||
Unearned revenue recognized under units-of-revenue method, current | 2,100 | 2,100 | 1,900 | |||
Unearned revenue recognized under units-of-revenue method, noncurrent | $ 7,800 | $ 7,800 | $ 9,600 | |||
HealthCare Royalty Partners II, L.P. | First Royalty Sale Agreement | ||||||
Licensing and other arrangements | ||||||
Cash payment received | 6,500 | |||||
Eligible potential additional payments receivable upon achievement of specified net sales milestones in future years | $ 4,000 | |||||
Number of milestone periods | period | 3 | |||||
HealthCare Royalty Partners II, L.P. | Second Royalty Sale Agreement | ||||||
Licensing and other arrangements | ||||||
Cash payment received | $ 11,500 |
Royalty and Commercial Paymen_3
Royalty and Commercial Payment Purchase Agreements - Summary (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Agreements | ||
Short-term royalty and commercial payment receivables | $ 0 | $ 2,366 |
Long-term royalty and commercial payment receivables | $ 74,696 | $ 63,683 |
Royalty and Commercial Paymen_4
Royalty and Commercial Payment Purchase Agreements - LadRx (Details) - USD ($) $ in Thousands | 9 Months Ended | |||
Jun. 21, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Agreements | ||||
Payments of consideration under RPAs, AAAs and CPPAs | $ 14,650 | $ 8,000 | ||
Contingent consideration under RPAs, AAAs and CPPAs | 4,000 | $ 75 | ||
Long-term royalty and commercial payment receivables | 74,696 | $ 63,683 | ||
Assignment and Assumption Agreement and Royalty Purchase Agreement | ||||
Agreements | ||||
Long-term royalty and commercial payment receivables | $ 6,000 | |||
LadRx | Assignment and Assumption Agreement and Royalty Purchase Agreement | ||||
Agreements | ||||
Payments of consideration under RPAs, AAAs and CPPAs | 5,000 | |||
Maximum payments related to regulatory and commercial sales milestones | 6,000 | |||
Maximum payable on regulatory milestone | 5,000 | |||
Maximum payable in sales-based milestones | 1,000 | |||
Amount of allowance for credit losses | $ 0 | |||
LadRx | Assignment and Assumption Agreement and Royalty Purchase Agreement | Regulatory milestones | ||||
Agreements | ||||
Contingent consideration under RPAs, AAAs and CPPAs | 1,000 | |||
LadRx | Assignment and Assumption Agreement | Arimoclomol | ||||
Agreements | ||||
Maximum potential regulatory and commercial milestones, net | 52,500 | |||
Maximum payment obligations based on a portion of regulatory and commercial milestone payments | 9,500 | |||
LadRx | Royalty Purchase Agreement | ||||
Agreements | ||||
Contingent consideration under RPAs, AAAs and CPPAs | 1,000 | |||
LadRx | Royalty Purchase Agreement | Regulatory milestones | ||||
Agreements | ||||
Contingent consideration under RPAs, AAAs and CPPAs | 1,000 | |||
LadRx | Royalty Purchase Agreement | Aldoxorubicin | ||||
Agreements | ||||
Maximum potential regulatory and commercial milestones, net | $ 342,700 |
Royalty and Commercial Paymen_5
Royalty and Commercial Payment Purchase Agreements - Aptevo (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||
Mar. 29, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Jun. 30, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Mar. 31, 2023 | Dec. 31, 2022 | |
Agreements | ||||||||
Long-term royalty and commercial payment receivables | $ 74,696 | $ 74,696 | $ 63,683 | |||||
Payments of consideration under RPAs, AAAs and CPPAs | 14,650 | $ 8,000 | ||||||
Contingent consideration under RPAs, AAAs and CPPAs | 4,000 | 4,000 | 75 | |||||
Receipts under RPAs, AAAs and CPPAs | 8,428 | $ 3,026 | ||||||
Short-term royalty and commercial payment receivables | 0 | 0 | $ 2,366 | |||||
Aptevo | ||||||||
Agreements | ||||||||
Reduction in long-term royalty receivable balance due to receipt of payment | 1,144 | |||||||
Aptevo | Commercial Payment Purchase Agreement | ||||||||
Agreements | ||||||||
Maximum milestone payments entitled to receive | $ 5,300 | |||||||
Long-term royalty and commercial payment receivables | 9,700 | |||||||
Payments of consideration under RPAs, AAAs and CPPAs | 9,600 | |||||||
Contingent consideration under RPAs, AAAs and CPPAs | 50 | 0 | 0 | $ 50 | ||||
Commercial payments attributable to net sales threshold | $ 500 | |||||||
Short-term royalty and commercial payment receivables | 0 | 0 | ||||||
Amount of allowance for credit losses | 0 | $ 0 | ||||||
Aptevo | Commercial Payment Purchase Agreement | Minimum | ||||||||
Agreements | ||||||||
Receipts under RPAs, AAAs and CPPAs | $ 500 | |||||||
Medexus | Commercial Payment Purchase Agreement | ||||||||
Agreements | ||||||||
Receipts under RPAs, AAAs and CPPAs | $ 600 | $ 600 |
Royalty and Commercial Paymen_6
Royalty and Commercial Payment Purchase Agreements - Agenus (Details) $ in Thousands | 1 Months Ended | 9 Months Ended | |||
Sep. 20, 2018 USD ($) item | Nov. 30, 2020 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Agreements | |||||
Payments of consideration under RPAs, AAAs and CPPAs | $ 14,650 | $ 8,000 | |||
Long-term royalty and commercial payment receivables | 74,696 | $ 63,683 | |||
Royalty Purchase Agreement | Merck Immuno-Oncology Product | Agenus | |||||
Agreements | |||||
Amount of milestone earned under agreement | $ 10,000 | ||||
Agenus | Royalty Purchase Agreement | |||||
Agreements | |||||
Payments of consideration under RPAs, AAAs and CPPAs | $ 15,000 | ||||
Long-term royalty and commercial payment receivables | $ 15,000 | ||||
Amount of allowance for credit losses | $ 0 | $ 0 | |||
Agenus | Royalty Purchase Agreement | Incyte Immuno-Oncology Assets | |||||
Agreements | |||||
Royalties entity has right to receive (as a percent) | 33% | ||||
Number of licensed products related to milestone and royalties | item | 6 | ||||
Purchased percentage of milestones | 10% | ||||
Agenus | Royalty Purchase Agreement | Merck Immuno-Oncology Product | |||||
Agreements | |||||
Royalties entity has right to receive (as a percent) | 33% | ||||
Purchased percentage of milestones | 10% | ||||
Purchased eligible milestone payments receivable upon achievement of potential development, regulatory and commercial milestones | $ 59,500 | ||||
Amount of milestone earned under agreement | 1,000 | ||||
Reduction in long-term royalty receivable balance due to receipt of payment | $ 1,000 |
Royalty and Commercial Paymen_7
Royalty and Commercial Payment Purchase Agreements - Bioasis (Details) $ in Thousands | 9 Months Ended | |||||
Jun. 20, 2023 USD ($) | Nov. 02, 2020 USD ($) | Feb. 25, 2019 USD ($) agreement | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Agreements | ||||||
Payments of consideration under RPAs, AAAs and CPPAs | $ 14,650 | $ 8,000 | ||||
Royalty purchase agreement asset impairment | 1,575 | |||||
Contingent consideration under RPAs, AAAs and CPPAs | 4,000 | $ 75 | ||||
Changes in estimated fair value of contingent consideration | 75 | |||||
Receipts under RPAs, AAAs and CPPAs | 8,428 | $ 3,026 | ||||
Long-term royalty and commercial payment receivables | 74,696 | 63,683 | ||||
Bioasis | ||||||
Agreements | ||||||
Royalty purchase agreement asset impairment | 1,575 | |||||
Bioasis | Royalty Purchase Agreement and Second Royalty Purchase Agreement | ||||||
Agreements | ||||||
Royalty purchase agreement asset impairment | $ 1,600 | |||||
Reduction in long-term royalty receivables | $ 1,600 | |||||
Amount of allowance for credit losses | 0 | 0 | ||||
Long-term royalty and commercial payment receivables | 0 | |||||
Bioasis | Royalty Purchase Agreement | ||||||
Agreements | ||||||
Percentage of option to purchase royalty right on future license agreements | 1% | |||||
Number of future license agreements under optional purchase right | agreement | 2 | |||||
Obligation upon exercise of options per licensed product, second agreement | $ 300 | |||||
Obligation upon exercise of options per licensed product, third agreement | 400 | |||||
Payments of consideration under RPAs, AAAs and CPPAs | 300 | |||||
Contingent consideration under RPAs, AAAs and CPPAs | 75 | $ 0 | $ 75 | |||
Long-term royalty and commercial payment receivables | 400 | |||||
Bioasis | Royalty Purchase Agreement | Maximum | ||||||
Agreements | ||||||
Potential future cash payments | $ 200 | |||||
Bioasis | Second Royalty Purchase Agreement | ||||||
Agreements | ||||||
Payments of consideration under RPAs, AAAs and CPPAs | $ 1,200 | |||||
Long-term royalty and commercial payment receivables | $ 1,200 |
Royalty and Commercial Paymen_8
Royalty and Commercial Payment Purchase Agreements - Aronora (Details) $ in Thousands | 1 Months Ended | 9 Months Ended | |||
Apr. 07, 2019 USD ($) item | Sep. 30, 2019 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Agreements | |||||
Payments of consideration under RPAs, AAAs and CPPAs | $ 14,650 | $ 8,000 | |||
Long-term royalty and commercial payment receivables | 74,696 | $ 63,683 | |||
Contingent consideration under RPAs, AAAs and CPPAs | 4,000 | 75 | |||
Aronora | Royalty Purchase Agreement | |||||
Agreements | |||||
Number of drug candidates | item | 5 | ||||
Non-royalties to be received (as a percent) | 10% | ||||
Future non-royalty payments to be received (as a percent) | 5% | ||||
Multiplier for cumulative amount of consideration paid | item | 2 | ||||
Payments of consideration under RPAs, AAAs and CPPAs | $ 6,000 | $ 3,000 | |||
Threshold amount of cumulative royalties on net sales per product | 250,000 | ||||
Aggregate royalty milestone payments to be paid per product | 85,000 | ||||
Long-term royalty and commercial payment receivables | 9,000 | ||||
Contingent consideration under RPAs, AAAs and CPPAs | 3,000 | ||||
Amount of allowance for credit losses | $ 0 | $ 0 | |||
Aronora | Royalty Purchase Agreement | SVB Loan | |||||
Agreements | |||||
Payments of consideration under RPAs, AAAs and CPPAs | $ 3,000 | ||||
Aronora | Royalty Purchase Agreement | Bayer Products | |||||
Agreements | |||||
Number of drug candidates | item | 3 | ||||
Number of drug candidates subject to exclusive license option | item | 1 | ||||
Royalties entity has right to receive (as a percent) | 100% | ||||
Non-royalties to be received (as a percent) | 10% | ||||
Contingent future cash payment for each product | $ 1,000 | ||||
Aronora | Royalty Purchase Agreement | Bayer Products | Maximum | |||||
Agreements | |||||
Contingent consideration under RPAs, AAAs and CPPAs | $ 3,000 | ||||
Aronora | Royalty Purchase Agreement | Non-Bayer Products | |||||
Agreements | |||||
Number of drug candidates | item | 2 | ||||
Non-royalties to be received (as a percent) | 10% |
Royalty and Commercial Paymen_9
Royalty and Commercial Payment Purchase Agreements - Palo (Details) $ in Thousands | 9 Months Ended | |||
Sep. 26, 2019 USD ($) item | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Agreements | ||||
Payments of consideration under RPAs, AAAs and CPPAs | $ 14,650 | $ 8,000 | ||
Long-term royalty and commercial payment receivables | 74,696 | $ 63,683 | ||
Palo | Royalty Purchase Agreement | ||||
Agreements | ||||
Number of drug candidates | item | 6 | |||
Payments of consideration under RPAs, AAAs and CPPAs | $ 10,000 | |||
Long-term royalty and commercial payment receivables | $ 10,000 | |||
Amount of allowance for credit losses | $ 0 | $ 0 |
Royalty and Commercial Payme_10
Royalty and Commercial Payment Purchase Agreements - Viracta (Details) $ in Thousands | 9 Months Ended | |||
Mar. 22, 2021 USD ($) item | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Agreements | ||||
Payments of consideration under RPAs, AAAs and CPPAs | $ 14,650 | $ 8,000 | ||
Long-term royalty and commercial payment receivables | 74,696 | $ 63,683 | ||
Viracta | Royalty Purchase Agreement | ||||
Agreements | ||||
Number of drug candidates | item | 2 | |||
Payments of consideration under RPAs, AAAs and CPPAs | $ 13,500 | |||
Maximum amount of potential milestones, potential royalties on sales and other payments receivable | 54,000 | |||
Amount of maximum consideration retained | 20,000 | |||
Maximum amount of potential regulatory and commercial milestones receivable | 57,000 | |||
Long-term royalty and commercial payment receivables | $ 13,500 | |||
Amount of allowance for credit losses | $ 0 | $ 0 |
Royalty and Commercial Payme_11
Royalty and Commercial Payment Purchase Agreements - Kuros (Details) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | ||||
Jul. 14, 2021 | Jul. 31, 2022 | May 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Agreements | ||||||
Payments of consideration under RPAs, AAAs and CPPAs | $ 14,650 | $ 8,000 | ||||
Receipts under RPAs, AAAs and CPPAs | 8,428 | $ 3,026 | ||||
Long-term royalty and commercial payment receivables | 74,696 | $ 63,683 | ||||
Short-term royalty and commercial payment receivables | 0 | 2,366 | ||||
Kuros | Royalty Purchase Agreement | ||||||
Agreements | ||||||
Royalties entity has right to receive (as a percent) | 100% | |||||
Pre-commercial milestone payments, maximum | $ 25,500 | |||||
Payments of consideration under RPAs, AAAs and CPPAs | 7,000 | |||||
Maximum payable in sales-based milestones | 142,500 | |||||
Long-term royalty and commercial payment receivables | $ 7,000 | |||||
Milestone payment received by Kuros | $ 5,000 | |||||
Percentage of milestone payment received by Kuros that company is entitled to receive | 50% | |||||
Reduction in long-term royalty receivable balance due to receipt of payment | $ 2,500 | |||||
Amount of allowance for credit losses | $ 0 | $ 0 |
Royalty and Commercial Payme_12
Royalty and Commercial Payment Purchase Agreements - Affitech (Details) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Oct. 06, 2021 | Sep. 30, 2023 | Feb. 28, 2023 | Aug. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Agreements | |||||||
Payments of consideration under RPAs, AAAs and CPPAs | $ 14,650 | $ 8,000 | |||||
Long-term royalty and commercial payment receivables | $ 74,696 | 74,696 | $ 63,683 | ||||
Contingent consideration under RPAs, AAAs and CPPAs | 4,000 | 4,000 | 75 | ||||
Receipts under RPAs, AAAs and CPPAs | 8,428 | $ 3,026 | |||||
Short-term royalty and commercial payment receivables | 0 | 0 | 2,366 | ||||
Affitech | Commercial Payment Purchase Agreement | |||||||
Agreements | |||||||
Payments of consideration under RPAs, AAAs and CPPAs | $ 6,000 | ||||||
Maximum payments related to regulatory and commercial sales milestones | 20,000 | ||||||
Long-term royalty and commercial payment receivables | 14,000 | 3,000 | 3,000 | ||||
Maximum payable on regulatory milestone | 8,000 | ||||||
Maximum payable in sales-based milestones | $ 12,000 | 9,000 | 9,000 | ||||
Contingent consideration under RPAs, AAAs and CPPAs | 3,000 | 3,000 | |||||
Receipts under RPAs, AAAs and CPPAs | 4,900 | $ 2,400 | $ 500 | ||||
Reduction in long-term royalty receivable balance due to receipt of payment | 4,900 | $ 2,400 | $ 500 | ||||
Amount of allowance for credit losses | 0 | 0 | 0 | ||||
Affitech | Commercial Payment Purchase Agreement | United States | |||||||
Agreements | |||||||
Payments of consideration under RPAs, AAAs and CPPAs | 5,000 | ||||||
Affitech | Commercial Payment Purchase Agreement | Europe | |||||||
Agreements | |||||||
Payments of consideration under RPAs, AAAs and CPPAs | $ 3,000 | ||||||
Affitech | Commercial Payment Purchase Agreement | Faricimab | |||||||
Agreements | |||||||
Payments eligible to receive (as a percent) | 0.50% | ||||||
Commercial payment receivable term | 10 years | ||||||
Affitech | Commercial Payment Purchase Agreement | Regulatory milestones | |||||||
Agreements | |||||||
Contingent consideration under RPAs, AAAs and CPPAs | $ 8,000 | ||||||
Affitech | Commercial Payment Purchase Agreement | Sales-based milestones | |||||||
Agreements | |||||||
Contingent consideration under RPAs, AAAs and CPPAs | $ 3,000 | $ 3,000 |
Royalty and Commercial Payme_13
Royalty and Commercial Payment Purchase Agreements - Summary of Royalty Receivable Activities (Details) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended |
Jul. 31, 2022 | Sep. 30, 2023 | |
Agreements | ||
Short-term royalty receivable, Balance at beginning of period | $ 2,366 | |
Short-term royalty receivable, Balance at end of period | 0 | |
Long-term royalty receivable, Balance at beginning of period | 63,683 | |
Impairment of royalty and commercial payment rights, Long-Term | (1,575) | |
Long-term royalty receivable, Balance at end of period | 74,696 | |
Affitech | ||
Agreements | ||
Receipt of royalty and commercial payments, Short-Term | (7,284) | |
Recognition of contingent consideration, Long-Term | 3,000 | |
Reclassification to short-term royalty and commercial payment receivables, Short-Term | 4,918 | |
Reclassification to short-term royalty and commercial payment receivables, Long-Term | (4,918) | |
Aptevo | ||
Agreements | ||
Acquisition of royalty and commercial payment rights, Long-Term | 9,650 | |
Receipt of royalty and commercial payments, Long-Term | (1,144) | |
LadRx | ||
Agreements | ||
Acquisition of royalty and commercial payment rights, Long-Term | 6,000 | |
Bioasis | ||
Agreements | ||
Impairment of royalty and commercial payment rights, Long-Term | $ (1,575) | |
Royalty Purchase Agreement | Kuros | ||
Agreements | ||
Receipt of royalty and commercial payments, Long-Term | $ (2,500) |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Assets and Liabilities Carried at Fair Value on Recurring Basis (Details) - Fair Value, Recurring - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Assets: | ||
Cash equivalents | $ 27,985 | $ 30,334 |
Equity securities | 214 | 335 |
Total financial assets | 28,199 | 30,669 |
Liabilities: | ||
Contingent consideration under RPAs and CPPAs | 1,000 | 75 |
Money market funds | ||
Assets: | ||
Cash equivalents | 27,985 | 30,334 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Assets: | ||
Cash equivalents | 27,985 | 30,334 |
Equity securities | 214 | 335 |
Total financial assets | 28,199 | 30,669 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Money market funds | ||
Assets: | ||
Cash equivalents | 27,985 | 30,334 |
Significant Unobservable Inputs (Level 3) | ||
Liabilities: | ||
Contingent consideration under RPAs and CPPAs | $ 1,000 | $ 75 |
Fair Value Measurements - Equit
Fair Value Measurements - Equity Securities (Details) | Sep. 30, 2023 | Dec. 31, 2022 |
Closing Common Stock Price | ||
Fair Value Measurements | ||
Valuation assumptions, measurement input | 1.32 | 2.07 |
Fair Value Measurements - Conti
Fair Value Measurements - Contingent Consideration (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2023 | Jun. 21, 2023 | Dec. 31, 2022 | Feb. 25, 2019 | |
Fair Value Measurements | |||||
Changes in estimated fair value of contingent consideration | $ 75 | ||||
Contingent consideration under RPAs, AAAs and CPPAs | $ 4,000 | 4,000 | $ 75 | ||
Bioasis | Royalty Purchase Agreement | |||||
Fair Value Measurements | |||||
Contingent consideration under RPAs, AAAs and CPPAs | 0 | $ 0 | $ 75 | $ 75 | |
LadRx | Royalty Purchase Agreement | |||||
Fair Value Measurements | |||||
Changes in estimated fair value of contingent consideration | $ 0 | ||||
Contingent consideration under RPAs, AAAs and CPPAs | $ 1,000 |
Lease Agreements - Leased facil
Lease Agreements - Leased facilities (Details) $ in Thousands | 1 Months Ended | 9 Months Ended | ||
Jan. 31, 2023 USD ($) | Sep. 30, 2023 USD ($) facility | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Leases | ||||
Operating lease liabilities | $ 0 | $ 34 | ||
Leased facilities, Emeryville, California, current location | ||||
Leases | ||||
Operating leases, number of leased facilities | facility | 1 | |||
Period of lease extension | 5 months | |||
Adjustment to right of use asset for lease modification | $ 100 | |||
Leased facilities, Emeryville, California, future location | Forecast | ||||
Leases | ||||
Lease term | 65 months | |||
Total undiscounted lease payments | $ 500 |
Lease Agreements - Lease costs
Lease Agreements - Lease costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Lease costs | ||||
Operating lease cost | $ 17 | $ 45 | $ 116 | $ 133 |
Variable lease cost | 20 | 4 | 32 | 9 |
Total lease costs | $ 37 | $ 49 | $ 148 | $ 142 |
Lease Agreements - Additional i
Lease Agreements - Additional information (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Lease Agreements | |||
Cash paid for amounts included in the measurement of lease liabilities, Operating cash flows under operating leases | $ 121 | $ 151 | |
Weighted-average remaining lease term, Operating leases | 0 years | 2 months 1 day | |
Weighted-average discount rate, Operating leases | 5.51% |
Common Stock Warrants (Details)
Common Stock Warrants (Details) - $ / shares | Sep. 30, 2023 | Dec. 31, 2022 |
Warrants | ||
Warrant outstanding (in shares) | 11,177 | 11,177 |
Common Stock Warrants, Issued May 2018 | ||
Warrants | ||
Exercise price of warrants (in dollars per share) | $ 23.69 | $ 23.69 |
Warrant outstanding (in shares) | 6,332 | 6,332 |
Common Stock Warrants, Issued March 2019 | ||
Warrants | ||
Exercise price of warrants (in dollars per share) | $ 14.71 | $ 14.71 |
Warrant outstanding (in shares) | 4,845 | 4,845 |
Commitments and Contingencies -
Commitments and Contingencies - Collaborative Agreements, Royalties and Milestone Payments (Details) $ in Millions | Sep. 30, 2023 USD ($) product |
Commitments and Contingencies | |
Estimate of milestone payments | $ | $ 6.3 |
Assumed number of products per contract | product | 1 |
Commitments and Contingencies_2
Commitments and Contingencies - Contingent Consideration (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2023 | Sep. 30, 2023 | Jun. 21, 2023 | Mar. 31, 2023 | Mar. 29, 2023 | Dec. 31, 2022 | Oct. 06, 2021 | Feb. 25, 2019 | |
Commitments And Contingencies | ||||||||
Contingent consideration under RPAs, AAAs and CPPAs | $ 4,000 | $ 4,000 | $ 75 | |||||
Changes in estimated fair value of contingent consideration | 75 | |||||||
Long-term royalty and commercial payment receivables | 74,696 | 74,696 | 63,683 | |||||
Royalty Purchase Agreement | LadRx | ||||||||
Commitments And Contingencies | ||||||||
Contingent consideration under RPAs, AAAs and CPPAs | $ 1,000 | |||||||
Changes in estimated fair value of contingent consideration | 0 | |||||||
Royalty Purchase Agreement | LadRx | Regulatory milestones | ||||||||
Commitments And Contingencies | ||||||||
Contingent consideration under RPAs, AAAs and CPPAs | $ 1,000 | |||||||
Changes in estimated fair value of contingent consideration | 0 | |||||||
Royalty Purchase Agreement | Bioasis | ||||||||
Commitments And Contingencies | ||||||||
Contingent consideration under RPAs, AAAs and CPPAs | 0 | 0 | $ 75 | $ 75 | ||||
Long-term royalty and commercial payment receivables | $ 400 | |||||||
Commercial Payment Purchase Agreement | Aptevo | ||||||||
Commitments And Contingencies | ||||||||
Contingent consideration under RPAs, AAAs and CPPAs | 0 | 0 | $ 50 | $ 50 | ||||
Payment for contingent consideration under CPPA | 50 | |||||||
Long-term royalty and commercial payment receivables | $ 9,700 | |||||||
Commercial Payment Purchase Agreement | Affitech | ||||||||
Commitments And Contingencies | ||||||||
Contingent consideration under RPAs, AAAs and CPPAs | 3,000 | 3,000 | ||||||
Long-term royalty and commercial payment receivables | 3,000 | 3,000 | $ 14,000 | |||||
Commercial Payment Purchase Agreement | Affitech | Regulatory milestones | ||||||||
Commitments And Contingencies | ||||||||
Contingent consideration under RPAs, AAAs and CPPAs | $ 8,000 | |||||||
Commercial Payment Purchase Agreement | Affitech | Sales-based milestones | ||||||||
Commitments And Contingencies | ||||||||
Contingent consideration under RPAs, AAAs and CPPAs | $ 3,000 | $ 3,000 |
Stock Based Compensation - ESPP
Stock Based Compensation - ESPP (Details) | 9 Months Ended |
Sep. 30, 2023 | |
2015 ESPP | |
Share-based compensation | |
Percentage of compensation of eligible employees to purchase shares of entity common stock at discount through payroll deductions | 85% |
Stock Based Compensation - 2010
Stock Based Compensation - 2010 Plan Stock Options (Details) - $ / shares | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Weighted average assumptions | ||
Number of shares, Granted | 796,802 | |
Exercise price (in dollars per share) | $ 23.50 | |
2010 Plan | ||
Weighted average assumptions | ||
Weighted-average grant-date fair value (in dollars per share) | $ 13.46 | $ 12.21 |
Common stock options | 2010 Plan | ||
Share-based compensation | ||
Minimum age required for employees to qualify for immediate vesting of award | 55 years | |
Threshold years required for retirement age | 70 years | |
Weighted average assumptions | ||
Dividend yield | 0% | 0% |
Expected volatility | 70% | 70% |
Risk-free interest rate | 3.60% | 2.17% |
Expected term | 5 years 9 months 14 days | 5 years 7 months 24 days |
Common stock options | 2010 Plan | Employees | ||
Share-based compensation | ||
Vesting period | 3 years | |
Common stock options | 2010 Plan | Directors | ||
Share-based compensation | ||
Vesting period | 1 year |
Stock Based Compensation - Indu
Stock Based Compensation - Inducement Awards (Details) | 3 Months Ended | 9 Months Ended | ||||
Jan. 03, 2023 item installment $ / shares shares | Sep. 30, 2023 shares | Mar. 31, 2023 $ / shares | Sep. 30, 2022 shares | Sep. 30, 2023 $ / shares shares | Sep. 30, 2022 shares | |
Share-based compensation | ||||||
Number of shares, Granted | shares | 796,802 | |||||
Exercise price (in dollars per share) | $ 23.50 | |||||
Stock Option Inducement Awards | ||||||
Share-based compensation | ||||||
Stock price (in dollars per share) | $ 18.66 | |||||
Number of shares, Granted | shares | 0 | 0 | ||||
Stock Option Inducement Awards | Executive Chairman of the Board and Interim CEO, Owen Hughes | ||||||
Share-based compensation | ||||||
Number of award grants | item | 2 | |||||
Stock Option Inducement Awards | Chief Investment Officer, Bradley Sitko | ||||||
Share-based compensation | ||||||
Number of award grants | item | 2 | |||||
Stock Option Inducement Awards | Chief Investment Officer, Bradley Sitko | Share-Based Payment Arrangement, Tranche One | ||||||
Share-based compensation | ||||||
Vesting (as a percent) | 25% | |||||
Stock Option Inducement Awards | Chief Investment Officer, Bradley Sitko | Share-Based Payment Arrangement, Tranche Two | ||||||
Share-based compensation | ||||||
Number of successive equal monthly vesting installments | installment | 36 | |||||
Stock Option Inducement Award, Exercise price of $18.66 per share | ||||||
Share-based compensation | ||||||
Number of shares, Granted | shares | 0 | 0 | 0 | |||
Exercise price (in dollars per share) | $ 18.66 | $ 18.66 | ||||
Weighted average assumptions | ||||||
Weighted-average grant-date fair value (in dollars per share) | 11.91 | |||||
Stock Option Inducement Award, Exercise price of $18.66 per share | Executive Chairman of the Board and Interim CEO, Owen Hughes | ||||||
Share-based compensation | ||||||
Number of shares, Granted | shares | 100,000 | |||||
Exercise price (in dollars per share) | $ 18.66 | |||||
Number of equal quarterly vesting installments | installment | 4 | |||||
Stock Option Inducement Award, Exercise price of $18.66 per share | Chief Investment Officer, Bradley Sitko | ||||||
Share-based compensation | ||||||
Number of shares, Granted | shares | 300,000 | |||||
Exercise price (in dollars per share) | $ 18.66 | |||||
Stock Option Inducement Award, Exercise price of $18.66 per share | Common stock options | ||||||
Weighted average assumptions | ||||||
Dividend yield | 0% | |||||
Expected volatility | 69% | |||||
Risk-free interest rate | 3.92% | |||||
Expected term | 5 years 9 months 14 days | |||||
Stock Option Inducement Award, Exercise price of $30.00 per share | ||||||
Share-based compensation | ||||||
Number of shares, Granted | shares | 0 | 0 | 0 | |||
Exercise price (in dollars per share) | 30 | |||||
Weighted average assumptions | ||||||
Weighted-average grant-date fair value (in dollars per share) | $ 14.68 | |||||
Stock Option Inducement Award, Exercise price of $30.00 per share | Executive Chairman of the Board and Interim CEO, Owen Hughes | ||||||
Share-based compensation | ||||||
Number of shares, Granted | shares | 75,000 | |||||
Exercise price (in dollars per share) | $ 30 | |||||
Number of successive equal monthly vesting installments | installment | 36 | |||||
Stock Option Inducement Award, Exercise price of $30.00 per share | Chief Investment Officer, Bradley Sitko | ||||||
Share-based compensation | ||||||
Number of shares, Granted | shares | 250,000 | |||||
Exercise price (in dollars per share) | $ 30 | |||||
Stock Option Inducement Award, Exercise price of $30.00 per share | Common stock options | ||||||
Weighted average assumptions | ||||||
Dividend yield | 0% | |||||
Expected volatility | 91% | |||||
Risk-free interest rate | 3.86% | |||||
Expected term | 8 years 3 days |
Stock Based Compensation - Stoc
Stock Based Compensation - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Share-based compensation | |||
Number of shares, Outstanding at beginning of period | 2,025,542 | ||
Number of shares, Granted | 796,802 | ||
Number of shares, Exercised | (8,473) | ||
Number of shares, Forfeited, expired or cancelled | (71,303) | ||
Number of shares, Outstanding at end of period | 2,742,568 | 2,025,542 | |
Number of shares, Exercisable at end of period | 1,887,253 | ||
Weighted Average Exercise Price Per Share, Outstanding at beginning of period | $ 20.24 | ||
Weighted Average Exercise Price Per Share, Granted | 23.50 | ||
Weighted Average Exercise Price Per Share, Exercised | 18.29 | ||
Weighted Average Exercise Price Per Share, Forfeited, expired or cancelled | 36.51 | ||
Weighted Average Exercise Price Per Share, Outstanding at end of period | 20.77 | $ 20.24 | |
Weighted Average Exercise Price Per Share, Exercisable at end of period | $ 19.45 | ||
Weighted Average Contractual Remaining Term, Outstanding | 6 years 6 months 3 days | 6 years 1 month 6 days | |
Weighted Average Contractual Remaining Term, Exercisable | 5 years 3 months 25 days | ||
Aggregate Intrinsic Value, Outstanding | $ 6,799 | $ 10,804 | |
Aggregate Intrinsic Value, Exercisable | 6,799 | ||
Options exercised, aggregate intrinsic value | 18 | $ 2,800 | |
Common stock options | |||
Share-based compensation | |||
Unrecognized compensation expense related to stock options (in dollars) | $ 9,400 | ||
Weighted average period over which unrecognized compensation expense is expected to be recognized | 2 years 7 months 9 days |
Stock Based Compensation - Perf
Stock Based Compensation - Performance Stock Unit Awards (Details) - Performance Stock Unit Awards | 1 Months Ended | 9 Months Ended |
May 31, 2023 item D shares | Sep. 30, 2023 shares | |
Performance Stock Unit Awards | ||
Granted (in shares) | 430,400 | 430,400 |
Number of hurdles | item | 4 | |
Vesting period | 3 years | |
Number of consecutive calendar days used to calculate volume-weighted average stock price | D | 30 | |
Share-Based Payment Arrangement, Tranche One | ||
Performance Stock Unit Awards | ||
Vesting (as a percent) | 33.30% | |
Share-Based Payment Arrangement, Tranche Two | ||
Performance Stock Unit Awards | ||
Vesting period | 2 years | |
Vesting (as a percent) | 33.30% | |
Share-Based Payment Arrangement, Tranche Three | ||
Performance Stock Unit Awards | ||
Vesting period | 3 years | |
Vesting (as a percent) | 33.30% | |
2010 Plan | ||
Performance Stock Unit Awards | ||
Granted (in shares) | 430,400 |
Stock Based Compensation - Pe_2
Stock Based Compensation - Performance Stock Unit Awards Fair Value (Details) - Performance Stock Unit Awards - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 9 Months Ended |
May 31, 2023 | Sep. 30, 2023 | |
Share-based compensation | ||
Number of PSUs (in shares) | 430,400 | 430,400 |
Stock-based compensation expense, not yet recognized | $ 6.7 | $ 5.1 |
Hurdle Price Per PSU - $30.00 | ||
Share-based compensation | ||
Hurdle Price Per PSU (in dollars per share) | $ 30 | |
Number of PSUs (in shares) | 232,956 | |
Hurdle Price Per PSU - $30.00 | Minimum | ||
Share-based compensation | ||
Fair Value Per Share (in dollars per share) | $ 16.36 | |
Derived Service Period | 8 months 8 days | |
Hurdle Price Per PSU - $30.00 | Maximum | ||
Share-based compensation | ||
Fair Value Per Share (in dollars per share) | $ 17.45 | |
Derived Service Period | 9 months 3 days | |
Hurdle Price Per PSU - $35.00 | ||
Share-based compensation | ||
Hurdle Price Per PSU (in dollars per share) | $ 35 | |
Number of PSUs (in shares) | 87,708 | |
Hurdle Price Per PSU - $35.00 | Minimum | ||
Share-based compensation | ||
Fair Value Per Share (in dollars per share) | $ 15.03 | |
Derived Service Period | 11 months 4 days | |
Hurdle Price Per PSU - $35.00 | Maximum | ||
Share-based compensation | ||
Fair Value Per Share (in dollars per share) | $ 16.07 | |
Derived Service Period | 11 months 26 days | |
Hurdle Price Per PSU - $40.00 | ||
Share-based compensation | ||
Hurdle Price Per PSU (in dollars per share) | $ 40 | |
Number of PSUs (in shares) | 57,851 | |
Hurdle Price Per PSU - $40.00 | Minimum | ||
Share-based compensation | ||
Fair Value Per Share (in dollars per share) | $ 13.82 | |
Derived Service Period | 1 year 1 month 13 days | |
Hurdle Price Per PSU - $40.00 | Maximum | ||
Share-based compensation | ||
Fair Value Per Share (in dollars per share) | $ 14.84 | |
Derived Service Period | 1 year 2 months 4 days | |
Hurdle Price Per PSU - $45.00 | ||
Share-based compensation | ||
Hurdle Price Per PSU (in dollars per share) | $ 45 | |
Number of PSUs (in shares) | 51,885 | |
Hurdle Price Per PSU - $45.00 | Minimum | ||
Share-based compensation | ||
Fair Value Per Share (in dollars per share) | $ 12.75 | |
Derived Service Period | 1 year 3 months 7 days | |
Hurdle Price Per PSU - $45.00 | Maximum | ||
Share-based compensation | ||
Fair Value Per Share (in dollars per share) | $ 13.72 | |
Derived Service Period | 1 year 3 months 29 days |
Stock Based Compensation - Pe_3
Stock Based Compensation - Performance Stock Unit Awards Activity (Details) - Performance Stock Unit Awards - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | |
May 31, 2023 | Sep. 30, 2023 | Sep. 30, 2023 | Dec. 31, 2022 | |
Number of Unvested PSUs | ||||
Number of shares, Outstanding at beginning of period | 0 | |||
Granted (in shares) | 430,400 | 430,400 | ||
Number of shares, Outstanding at end of period | 430,400 | 430,400 | ||
Weighted Average Grant Date Fair Value Per Share | ||||
Granted (in dollars per share) | $ 15.61 | |||
Balance (in dollars per share) | $ 15.61 | $ 15.61 | $ 0 | |
Weighted Average Exercise Price Per Share | ||||
Stock-based compensation expense | $ 1.1 | $ 1.7 | ||
Stock-based compensation expense, not yet recognized | $ 6.7 | $ 5.1 | $ 5.1 | |
Weighted average period over which unrecognized compensation expense is expected to be recognized | 1 year 7 months 6 days |
Stock Based Compensation - St_2
Stock Based Compensation - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
General and administrative | ||||
Share-based compensation expense | ||||
Stock-based compensation expense | $ 2,717 | $ 806 | $ 6,450 | $ 2,620 |
Stock Based Compensation - Empl
Stock Based Compensation - Employee Retention Bonus (Details) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Nov. 01, 2022 | Oct. 31, 2023 USD ($) | Dec. 31, 2023 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2023 USD ($) | Dec. 31, 2022 USD ($) | Oct. 31, 2022 period | |
Employee Retention Bonus | |||||||
Number of periods in which employees will be eligible to receive cash retention bonus | period | 2 | ||||||
Accrued retention bonus | $ 0.5 | $ 0.5 | $ 0.1 | ||||
Current employees, excluding Chief Executive Officer | |||||||
Employee Retention Bonus | |||||||
Initial period for which employees will be eligible for retention bonus | 3 months | ||||||
Period following initial period for which employees will be eligible for retention bonus | 9 months | ||||||
Amount of retention bonus paid | 0.2 | ||||||
Amount of retention bonus expense | $ 0.1 | $ 0.5 | |||||
Current employees, excluding Chief Executive Officer | Forecast | |||||||
Employee Retention Bonus | |||||||
Amount of retention bonus paid | $ 0.5 | ||||||
Amount of retention bonus expense | $ 0.1 |
Stock Based Compensation - CEO
Stock Based Compensation - CEO Departure and Continuity Incentive (Details) - Chief Executive Officer, Retired, James R. Neal - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Sep. 30, 2023 | |
Departure and Continuity Incentive | ||
Accrued cash payment related to Continuity Incentive under Employment Agreement | $ 1.2 | $ 0.3 |
Compensation expense related to Continuity Incentive under Employment Agreement | $ 1.2 |
Capital Stock - Dividends (Deta
Capital Stock - Dividends (Details) - $ / shares | Oct. 16, 2023 | Jul. 26, 2023 | Jul. 17, 2023 | May 17, 2023 | Apr. 17, 2023 | Feb. 22, 2023 | Jan. 17, 2023 | Oct. 26, 2022 |
8.625% Series A Cumulative, Perpetual Preferred Stock | ||||||||
Dividends | ||||||||
Cash dividend declared (in dollars per share) | $ 0.53906 | $ 0.53906 | $ 0.53906 | $ 0.53906 | ||||
Cash dividend paid (in dollars per share) | $ 0.53906 | $ 0.53906 | $ 0.53906 | |||||
8.375% Series B Cumulative, Perpetual Preferred Stock | ||||||||
Dividends | ||||||||
Cash dividend declared (in dollars per share) | $ 0.52344 | $ 0.52344 | $ 0.52344 | $ 0.52344 | ||||
Cash dividend paid (in dollars per share) | $ 0.52344 | $ 0.52344 | $ 0.52344 | |||||
Forecast | 8.625% Series A Cumulative, Perpetual Preferred Stock | ||||||||
Dividends | ||||||||
Cash dividend paid (in dollars per share) | $ 0.53906 | |||||||
Forecast | 8.375% Series B Cumulative, Perpetual Preferred Stock | ||||||||
Dividends | ||||||||
Cash dividend paid (in dollars per share) | $ 0.52344 |
Capital Stock - BVF Ownership (
Capital Stock - BVF Ownership (Details) - BVF - Xoma Corporation - Common Stock | Sep. 30, 2023 |
Sale of stock | |
Ownership interest (as a percent) | 31.70% |
Ownership interest, if shares are converted (as a percent) | 52.40% |
Capital Stock - ATM Agreements
Capital Stock - ATM Agreements (Details) - USD ($) $ in Millions | 26 Months Ended | 57 Months Ended | |||
Aug. 05, 2021 | Mar. 10, 2021 | Dec. 18, 2018 | Sep. 30, 2023 | Sep. 30, 2023 | |
2018 Common Stock ATM Agreement | Common Stock | |||||
Sale of stock | |||||
Maximum amount of shares to be issued | $ 50 | $ 30 | |||
Shares issued (in shares) | 0 | ||||
2018 Common Stock ATM Agreement | Common Stock | Maximum | |||||
Sale of stock | |||||
Sales commission paid per transaction (as a percent) | 3% | ||||
2021 ATM Agreement | Series B Depositary Shares | |||||
Sale of stock | |||||
Maximum amount of shares to be issued | $ 50 | ||||
Shares issued (in shares) | 0 | ||||
2021 ATM Agreement | Series B Depositary Shares | Maximum | |||||
Sale of stock | |||||
Sales commission paid per transaction, preferred stock (as a percent) | 3% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Taxes | ||||
Federal income tax provision | $ 0 | $ 0 | $ 0 | $ 0 |
Unrecognized tax benefits | 5.9 | 5.9 | ||
Unrecognized tax benefits that would impact effective tax rate | 0 | 0 | ||
Unrecognized tax benefits expected to change significantly over the next twelve months | 0 | 0 | ||
Accrued interest or penalties related to uncertain tax positions | $ 0 | $ 0 |
Subsequent Events (Details)
Subsequent Events (Details) $ in Millions | Oct. 30, 2023 USD ($) |
Subsequent Event | Viracta | Royalty Purchase Agreement | |
Subsequent Event | |
Amount of milestone earned under agreement | $ 5 |