Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Feb. 03, 2014 | Jun. 30, 2013 | |
Document and Entity Information | ' | ' | ' |
Entity Registrant Name | 'AMAG PHARMACEUTICALS INC. | ' | ' |
Entity Central Index Key | '0000792977 | ' | ' |
Document Type | '10-K | ' | ' |
Document Period End Date | 31-Dec-13 | ' | ' |
Amendment Flag | 'false | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Entity Well-known Seasoned Issuer | 'No | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Filer Category | 'Accelerated Filer | ' | ' |
Entity Public Float | ' | ' | $480,230,000 |
Entity Common Stock, Shares Outstanding | ' | 21,800,008 | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $26,986 | $46,293 |
Investments | 186,803 | 180,750 |
Accounts receivable, net | 6,842 | 6,410 |
Inventories | 17,217 | 12,451 |
Receivable from collaboration | 278 | 263 |
Assets held for sale | ' | 2,000 |
Prepaid and other current assets | 3,396 | 6,213 |
Restricted cash | 2,883 | ' |
Total current assets | 244,405 | 254,380 |
Property and equipment, net | 1,846 | 3,297 |
Intangible assets, net | 16,844 | ' |
Restricted cash | 400 | 460 |
Other long-term assets | 1,964 | ' |
Total assets | 265,459 | 258,137 |
Current liabilities: | ' | ' |
Accounts payable | 2,629 | 3,515 |
Accrued expenses | 22,266 | 20,338 |
Deferred revenues | 8,226 | 9,104 |
Total current liabilities | 33,121 | 32,957 |
Long-term liabilities: | ' | ' |
Deferred revenues | 44,534 | 50,350 |
Acquisition-related contingent consideration, net of current portion | 13,609 | ' |
Other long-term liabilities | 1,787 | 2,033 |
Total liabilities | 93,051 | 85,340 |
Commitments and contingencies (Notes G, P & Q) | ' | ' |
Stockholders' equity: | ' | ' |
Preferred stock, par value $0.01 per share, 2,000,000 shares authorized; none issued | ' | ' |
Common stock, par value $0.01 per share, 58,750,000 shares authorized; 21,772,571 and 21,506,754 shares issued and outstanding at December 31, 2013 and 2012, respectively | 218 | 215 |
Additional paid-in capital | 641,941 | 632,487 |
Accumulated other comprehensive loss | -3,491 | -3,247 |
Accumulated deficit | -466,260 | -456,658 |
Total stockholders' equity | 172,408 | 172,797 |
Total liabilities and stockholders' equity | $265,459 | $258,137 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Consolidated Balance Sheets | ' | ' |
Preferred stock, par value (in dollars per share) | $0.01 | $0.01 |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, shares authorized | 58,750,000 | 58,750,000 |
Common stock, shares issued | 21,772,571 | 21,506,754 |
Common stock, shares outstanding | 21,772,571 | 21,506,754 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Revenues: | ' | ' | ' |
U.S. Feraheme product sales, net | $71,362 | $58,287 | $52,097 |
License fee and other collaboration revenues | 8,385 | 26,475 | 8,321 |
Other product sales and royalties | 1,109 | 616 | 831 |
Total revenues | 80,856 | 85,378 | 61,249 |
Costs and expenses: | ' | ' | ' |
Cost of product sales | 11,960 | 14,220 | 10,531 |
Research and development expenses | 20,564 | 33,296 | 58,140 |
Selling, general and administrative expenses | 59,949 | 53,071 | 68,863 |
Restructuring expenses | ' | 2,215 | 3,508 |
Total costs and expenses | 92,473 | 102,802 | 141,042 |
Other income (expense): | ' | ' | ' |
Interest and dividend income, net | 1,051 | 1,286 | 1,747 |
Gains on sale of assets | 924 | ' | ' |
Gains (losses) on investments, net | 40 | -1,466 | -193 |
Total other income (expense) | 2,015 | -180 | 1,554 |
Net loss before income taxes | -9,602 | -17,604 | -78,239 |
Income tax benefit | ' | 854 | 1,170 |
Net loss | ($9,602) | ($16,750) | ($77,069) |
Net loss per share: | ' | ' | ' |
Basic and diluted (in dollars per share) | ($0.44) | ($0.78) | ($3.64) |
Weighted average shares outstanding used to compute net loss per share: | ' | ' | ' |
Basic and diluted (in shares) | 21,703 | 21,392 | 21,189 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Loss (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Consolidated Statements of Comprehensive Loss | ' | ' | ' |
Net loss | ($9,602) | ($16,750) | ($77,069) |
Unrealized gains (losses) on securities: | ' | ' | ' |
Holding gains (losses) arising during period, net of tax | -268 | 129 | 1,980 |
Reclassification adjustment for (gains) losses included in net loss | 24 | 1,466 | 206 |
Net unrealized gains (losses) on securities | -244 | 1,595 | 2,186 |
Total comprehensive loss | ($9,846) | ($15,155) | ($74,883) |
Consolidated_Statements_of_Sto
Consolidated Statements of Stockholders' Equity (USD $) | Total | Common Stock | Additional Paid - in Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit |
In Thousands, unless otherwise specified | |||||
Balance at Dec. 31, 2010 | $245,286 | $211 | $614,942 | ($7,028) | ($362,839) |
Balance (in shares) at Dec. 31, 2010 | ' | 21,137 | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' |
Net shares issued in connection with the exercise of stock options and restricted stock units | 121 | 1 | 120 | ' | ' |
Net shares issued in connection with the exercise of stock options and restricted stock units (in shares) | ' | 132 | ' | ' | ' |
Shares issued in connection with employee stock purchase plan | 508 | 1 | 507 | ' | ' |
Shares issued in connection with employee stock purchase plan (in shares) | ' | 37 | ' | ' | ' |
Non-cash equity-based compensation | 9,564 | ' | 9,564 | ' | ' |
Unrealized gains (losses) on securities, net of tax of $0.9 and $1.2 million at December 31, 2012 and 2011, respectively | 2,186 | ' | ' | 2,186 | ' |
Net loss | -77,069 | ' | ' | ' | -77,069 |
Balance at Dec. 31, 2011 | 180,596 | 213 | 625,133 | -4,842 | -439,908 |
Balance (in shares) at Dec. 31, 2011 | ' | 21,306 | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' |
Net shares issued in connection with the exercise of stock options and restricted stock units | 100 | 2 | 98 | ' | ' |
Net shares issued in connection with the exercise of stock options and restricted stock units (in shares) | ' | 178 | ' | ' | ' |
Shares issued in connection with employee stock purchase plan | 270 | ' | 270 | ' | ' |
Shares issued in connection with employee stock purchase plan (in shares) | ' | 23 | ' | ' | ' |
Non-cash equity-based compensation | 6,986 | ' | 6,986 | ' | ' |
Unrealized gains (losses) on securities, net of tax of $0.9 and $1.2 million at December 31, 2012 and 2011, respectively | 1,595 | ' | ' | 1,595 | ' |
Net loss | -16,750 | ' | ' | ' | -16,750 |
Balance at Dec. 31, 2012 | 172,797 | 215 | 632,487 | -3,247 | -456,658 |
Balance (in shares) at Dec. 31, 2012 | ' | 21,507 | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' |
Net shares issued in connection with the exercise of stock options and restricted stock units | 1,277 | 3 | 1,274 | ' | ' |
Net shares issued in connection with the exercise of stock options and restricted stock units (in shares) | ' | 252 | ' | ' | ' |
Shares issued in connection with employee stock purchase plan | 176 | ' | 176 | ' | ' |
Shares issued in connection with employee stock purchase plan (in shares) | ' | 14 | ' | ' | ' |
Non-cash equity-based compensation | 8,004 | ' | 8,004 | ' | ' |
Unrealized gains (losses) on securities, net of tax of $0.9 and $1.2 million at December 31, 2012 and 2011, respectively | -244 | ' | ' | -244 | ' |
Net loss | -9,602 | ' | ' | ' | -9,602 |
Balance at Dec. 31, 2013 | $172,408 | $218 | $641,941 | ($3,491) | ($466,260) |
Balance (in shares) at Dec. 31, 2013 | ' | 21,773 | ' | ' | ' |
Consolidated_Statements_of_Sto1
Consolidated Statements of Stockholders' Equity (Parenthetical) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2011 |
Consolidated Statements of Stockholders' Equity | ' | ' |
Unrealized gains (losses) on securities, tax | $0.90 | $1.20 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Cash flows from operating activities: | ' | ' | ' |
Net loss | ($9,602) | ($16,750) | ($77,069) |
Adjustments to reconcile net loss to net cash used in operating activities: | ' | ' | ' |
Depreciation and amortization | 3,085 | 3,084 | 2,536 |
Impairment loss on assets held for sale | ' | 1,100 | ' |
Amortization of premium/discount on purchased securities | 2,758 | 2,808 | 3,639 |
Write-down of inventory to net realizable value | 2,175 | 1,822 | 685 |
Non-cash equity-based compensation expense | 8,004 | 7,024 | 10,038 |
Non-cash income tax benefit | ' | -854 | -1,170 |
Gains on sale of assets | -924 | ' | ' |
(Gains) losses on investments, net | -40 | 1,466 | 193 |
Change in fair value of contingent consideration | 1,074 | ' | ' |
Changes in operating assets and liabilities: | ' | ' | ' |
Accounts receivable, net | -432 | -478 | -147 |
Inventories | -1,040 | 4,069 | 821 |
Receivable from collaboration | -15 | 165 | 13 |
Prepaid and other current assets | 2,817 | 75 | 1,661 |
Other long-term assets | -1,964 | ' | ' |
Accounts payable and accrued expenses | -5,730 | -12,195 | 1,698 |
Deferred revenues | -6,694 | 7,912 | -6,353 |
Other long-term liabilities | -246 | -405 | -349 |
Total adjustments | 2,828 | 15,593 | 13,265 |
Net cash used in operating activities | -6,774 | -1,157 | -63,804 |
Cash flows from investing activities: | ' | ' | ' |
Proceeds from sales or maturities of investments | 106,030 | 133,061 | 141,095 |
Purchase of investments | -115,046 | -149,406 | -126,585 |
Acquisition of MuGard Rights and inventory | -3,434 | ' | ' |
Proceeds from sale of assets | 2,970 | ' | ' |
Change in restricted cash | -2,823 | ' | ' |
Capital expenditures | -1,632 | -47 | -507 |
Net cash (used in) provided by investing activities | -13,935 | -16,392 | 14,003 |
Cash flows from financing activities: | ' | ' | ' |
Payment of contingent consideration | -51 | ' | ' |
Proceeds from the exercise of stock options | 1,277 | 98 | 121 |
Proceeds from the issuance of common stock under ESPP | 176 | 270 | 508 |
Net cash provided by financing activities | 1,402 | 368 | 629 |
Net decrease in cash and cash equivalents | -19,307 | -17,181 | -49,172 |
Cash and cash equivalents at beginning of the year | 46,293 | 63,474 | 112,646 |
Cash and cash equivalents at end of the year | 26,986 | 46,293 | 63,474 |
Non-cash investing activities: | ' | ' | ' |
Accrued construction in progress | ' | $228 | ' |
Description_of_Business
Description of Business | 12 Months Ended |
Dec. 31, 2013 | |
Description of Business | ' |
Description of Business | ' |
A. Description of Business | |
AMAG Pharmaceuticals, Inc., a Delaware corporation, was founded in 1981. We are a specialty pharmaceutical company that markets Feraheme® (ferumoxytol) Injection for Intravenous, or IV, use to treat iron deficiency anemia, or IDA, and MuGard® Mucoadhesive Oral Wound Rinse for the management of oral mucositis. | |
Currently, our principal source of revenue is from the sale of Feraheme, which was approved for marketing in the U.S. in June 2009 by the U.S. Food and Drug Administration, or the FDA, for use as an IV iron replacement therapy for the treatment of IDA in adult patients with chronic kidney disease, or CKD. We began selling Feraheme in the U.S. in July 2009 through our own commercial organization, including a specialty sales force. We sell Feraheme to authorized wholesalers and specialty distributors, who in turn, sell Feraheme to healthcare providers who administer Feraheme primarily within hospitals, hematology and oncology centers, and nephrology clinics. | |
Outside of the U.S., ferumoxytol has been granted marketing approval in Canada, Switzerland and the European Union, or EU, for use as an IV iron replacement therapy for the treatment of IDA in adult patients with CKD. The marketing authorization for Rienso in the EU is valid in the 28 EU Member States as well as in Iceland, Liechtenstein and Norway. Under our amended agreement with Takeda Pharmaceutical Company Limited, or Takeda, Takeda has an exclusive license to market and sell ferumoxytol in Canada, the EU and Switzerland, as well as certain other geographic territories. In Canada, Takeda promotes ferumoxytol under the trade name Feraheme and in the EU and Switzerland, Takeda promotes ferumoxytol under the trade name Rienso® 30mg/ml solution for Injection. | |
On June 6, 2013, or the Acquisition Date, we entered into a License Agreement with Access Pharmaceuticals, Inc., or Access, under which we acquired the U.S. commercial rights to MuGard, or the Access License Agreement. MuGard was launched in the U.S. by Access in 2010 after receiving 510(k) clearance from the FDA. MuGard is indicated for the management of oral mucositis/stomatitis (that may be caused by radiotherapy and/or chemotherapy) and all types of oral wounds (mouth sores and injuries), including aphthous ulcers/canker sores and traumatic ulcers, such as those caused by oral surgery or ill-fitting dentures or braces. Under the Access License Agreement, we obtained an exclusive, royalty-bearing license, with the right to grant sublicenses, to certain intellectual property rights, including know-how, patents and trademarks, to use, import, offer for sale, sell, manufacture and commercialize MuGard in the U.S. and its territories, or the U.S. Territory, for the management of all diseases or conditions of the oropharyngeal cavity, including mucositis, or the MuGard Rights. Additional details regarding the Access License Agreement and the MuGard Rights can be found in Note G. | |
We are subject to risks common to companies in the pharmaceutical industry including, but not limited to, our primary dependence on the success of Feraheme/Rienso, uncertainties related to the regulatory approval process for the broader Feraheme/Rienso indication, including limitations to our future revenues, the potential development of significant safety or drug interaction problems with respect to Feraheme/Rienso, competition in our industry, uncertainties related to potential collaborations, in-licensing arrangements or acquisition agreements, our dependence on third parties to manufacture Feraheme/Rienso and MuGard, the potential inability of our or Access' third-party manufacturers to operate their facilities in compliance with current good manufacturing practices and manufacture sufficient quantities of Feraheme/Rienso or MuGard, uncertainties related to the protection of our proprietary technology related to Feraheme, our reliance on Takeda to commercialize Feraheme/Rienso in certain territories outside of the U.S., uncertainties regarding market acceptance of Feraheme/Rienso or MuGard, our reliance on a limited number of customers for Feraheme, uncertainties related to patient insurance coverage and third-party reimbursement rates and terms for Feraheme/Rienso or MuGard, uncertainties related to the impact of current and future healthcare initiatives and legislation, our third-party manufacturers, or Access' potential inability to obtain raw or other materials, our potential inadvertent failure to comply with reporting and payment obligations under government pricing programs, our potential inability to become profitable in the future, our limited experience commercializing and distributing a pharmaceutical product, our dependence on key personnel, the potential fluctuation of our operating results, potential differences between actual future results and the estimates or assumptions used by us in preparation of our consolidated financial statements, our potential inadvertent failure to comply with the regulations of the FDA or other federal, state or foreign government agencies, the volatility of our stock price, uncertainties related to the actions of activist stockholders, potential product liability, potential legislative and regulatory changes, and potential costs and liabilities associated with pending or future litigation or patent challenges. | |
Throughout this Annual Report on Form 10-K, AMAG Pharmaceuticals, Inc. and our consolidated subsidiaries are collectively referred to as "the Company," "we," "us," or "our." | |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Summary of Significant Accounting Policies | ' | |||||||||||||
Summary of Significant Accounting Policies | ' | |||||||||||||
B. Summary of Significant Accounting Policies | ||||||||||||||
Use of Estimates and Assumptions | ||||||||||||||
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the related disclosure of contingent assets and liabilities. The most significant estimates and assumptions are used in, but are not limited to, revenue recognition related to product sales and collaboration agreements, product sales allowances and accruals, assessing investments for potential other-than-temporary impairment and determining fair values of our investments, the fair value of our assets held for sale, fair value of assets acquired in a business combination, contingent consideration, the impairment of long-lived assets, including intangible assets, accrued expenses, and equity-based compensation expense. Actual results could differ materially from those estimates. | ||||||||||||||
Principles of Consolidation | ||||||||||||||
The accompanying consolidated financial statements include our accounts and the accounts of our wholly-owned subsidiaries, AMAG Europe Limited, AMAG Securities Corporation and Snowbird, Inc. AMAG Europe Limited was incorporated in October 2009 in London, England. AMAG Securities Corporation is a Massachusetts corporation which was incorporated in August 2007. Snowbird, Inc. is a Delaware corporation which was incorporated in December 2013. All intercompany account balances and transactions between the companies have been eliminated. | ||||||||||||||
Cash and Cash Equivalents | ||||||||||||||
Cash and cash equivalents consists principally of cash held in commercial bank accounts, money market funds and U.S. Treasury securities having an original maturity of less than three months. We consider all highly liquid investments with a maturity of three months or less at acquisition date to be cash equivalents. At December 31, 2013, substantially all of our cash and cash equivalents were held in either commercial bank accounts or money market funds. | ||||||||||||||
Investments | ||||||||||||||
We account for and classify our investments as either "available-for-sale," "trading," or "held-to-maturity," in accordance with current guidance related to the accounting and classification of certain investments in debt and equity securities. The determination of the appropriate classification by us is based on a variety of factors, including management's intent at the time of purchase. During the years ended December 31, 2013 and 2012, all of our investments were classified as available-for-sale securities. | ||||||||||||||
Available-for-sale securities are those securities which we view as available for use in current operations, if needed. We generally classify our available-for-sale securities as short-term investments, even though the stated maturity date may be one year or more beyond the current balance sheet date. Available-for-sale investments are stated at fair value with their unrealized gains and losses included as a separate component of stockholders' equity entitled "Accumulated other comprehensive loss," until such gains and losses are realized or until an unrealized loss is considered other-than-temporary. | ||||||||||||||
We recognize and report other-than-temporary impairments of our debt securities in accordance with current accounting guidance, which requires that for debt securities with a decline in fair value below amortized cost basis, an other-than-temporary impairment exists if (a) we have the intent to sell the security or (b) it is more likely than not that we will be required to sell the security prior to recovery of its amortized cost basis. If either of these conditions is met, we recognize the difference between the amortized cost of the security and its fair value at the impairment measurement date in our consolidated statement of operations. If neither of these conditions is met, we must perform additional analyses to evaluate whether the unrealized loss is associated with the creditworthiness of the security rather than other factors, such as interest rates or market factors. These factors include evaluation of the security, issuer and other factors such as the duration of the period that, and extent to which, the fair value was less than cost basis, the financial health of and business outlook for the issuer, including industry and sector performance, operational and financing cash flow factors, overall market conditions and trends, underlying collateral, whether we have a favorable history in redeeming similar securities at prices at or above fair value, and credit ratings with respect to our investments provided by investments ratings agencies. If we determine from this analysis that we do not expect to receive cash flows sufficient to recover the entire amortized cost of the security, a credit loss exists. In this situation, the impairment is considered other-than-temporary and is recognized in our consolidated statement of operations. | ||||||||||||||
Fair Value Measurements | ||||||||||||||
Under current accounting standards, fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. | ||||||||||||||
Current accounting guidance establishes a hierarchy used to categorize how fair value is measured and which is based on three levels of inputs, of which the first two are considered observable and the third unobservable, as follows: | ||||||||||||||
Level 1—Quoted prices in active markets for identical assets or liabilities. | ||||||||||||||
Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices 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. | ||||||||||||||
We hold certain assets and liabilities that are required to be measured at fair value on a recurring basis, including our cash equivalents, investments, and contingent consideration. The following tables represent the fair value hierarchy as of December 31, 2013 and 2012, for those assets and liabilities that we measure at fair value on a recurring basis (in thousands): | ||||||||||||||
Fair Value Measurements at December 31, 2013 Using: | ||||||||||||||
Total | Quoted Prices in | Significant Other | Significant | |||||||||||
Active Markets for | Observable Inputs | Unobservable | ||||||||||||
Identical Assets | (Level 2) | Inputs | ||||||||||||
(Level 1) | (Level 3) | |||||||||||||
Assets: | ||||||||||||||
Money market funds | $ | 18,767 | $ | 18,767 | $ | — | $ | — | ||||||
Corporate debt securities | 134,123 | — | 134,123 | — | ||||||||||
U.S. treasury and government agency securities | 52,680 | — | 52,680 | — | ||||||||||
| | | | | | | | | | | | | | |
Total Assets | $ | 205,570 | $ | 18,767 | $ | 186,803 | $ | — | ||||||
Liabilities: | ||||||||||||||
Acquisition-related contingent consideration | $ | 14,550 | $ | — | $ | — | $ | 14,550 | ||||||
| | | | | | | | | | | | | | |
Total Liabilities | $ | 14,550 | $ | — | $ | — | $ | 14,550 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Fair Value Measurements at December 31, 2012 Using: | ||||||||||||||
Total | Quoted Prices in | Significant Other | Significant | |||||||||||
Active | Observable Inputs | Unobservable | ||||||||||||
Markets for | (Level 2) | Inputs | ||||||||||||
Identical Assets | (Level 3) | |||||||||||||
(Level 1) | ||||||||||||||
Money market funds | $ | 24,058 | $ | 24,058 | $ | — | $ | — | ||||||
Corporate debt securities | 111,690 | — | 111,690 | — | ||||||||||
U.S. treasury and government agency securities | 59,569 | — | 59,569 | — | ||||||||||
Commercial paper | 9,491 | — | 9,491 | — | ||||||||||
| | | | | | | | | | | | | | |
$ | 204,808 | $ | 24,058 | $ | 180,750 | $ | — | |||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
With the exception of our money market funds and our acquisition-related contingent consideration, the fair value of our investments is primarily determined from independent pricing services. Independent pricing services normally derive security prices from recently reported trades for identical or similar securities, making adjustments based upon other significant observable market transactions. At the end of each reporting period, we perform quantitative and qualitative analyses of prices received from third parties to determine whether prices are reasonable estimates of fair value. After completing our analyses, we did not adjust or override any fair value measurements provided by our pricing services as of either December 31, 2013 or 2012. In addition, there were no transfers or reclassifications of any securities between Level 1 and Level 2 during either 2013 or 2012. | ||||||||||||||
We also analyze when the volume and level of activity for an asset or liability have significantly decreased and when circumstances indicate that a transaction may not be considered orderly. In order to determine whether the volume and level of activity for an asset or liability have significantly decreased, we assess current activity as compared to normal market activity for the asset or liability. We rely on many factors such as trading volume, trading frequency, the levels at which market participants indicate their willingness to buy and sell our securities, as reported by market participants, and current market conditions. Using professional judgment and experience, we evaluate and weigh the relevance and significance of all applicable factors to determine if there has been a significant decrease in the volume and level of activity for an asset, group of similar assets or liabilities. Similarly, in order to identify transactions that are not orderly, we take into consideration the activity in the market which can influence the determination and occurrence of an orderly transaction. Also, we inquire as to whether there may have been restrictions on the marketing of the security to a single or limited number of participants. Where possible, we assess the financial condition of the seller to determine whether observed transactions may have been forced. If there is a significant disparity between the trading price for a security held by us as compared to the trading prices of similar recent transactions, we consider whether this disparity is an indicator of a disorderly trade. Using professional judgment and experience, we evaluate and weigh the relevance and significance of all applicable factors to determine if the evidence suggests that a transaction or group of similar transactions is not orderly. Based upon these procedures, we determined that market activity for our assets appeared normal and that transactions did not appear disorderly as of December 31, 2013 and 2012. | ||||||||||||||
In 2012, our Level 3 assets consisted solely of auction rate securities, which we sold in mid-2012. The following table provides a rollforward of these Level 3 assets for 2012 (in thousands): | ||||||||||||||
December 31, 2012 | ||||||||||||||
Balance at beginning of period | $ | 17,527 | ||||||||||||
Transfers to Level 3 | — | |||||||||||||
Total gains (losses) (realized or unrealized): | ||||||||||||||
Included in earnings | (1,471 | ) | ||||||||||||
Included in other comprehensive income (loss) | 2,373 | |||||||||||||
Purchases, issuances, sales and settlements: | ||||||||||||||
Purchases | — | |||||||||||||
Issuances | — | |||||||||||||
Sales | (18,329 | ) | ||||||||||||
Settlements | (100 | ) | ||||||||||||
| | | | | ||||||||||
Balance at end of period | $ | — | ||||||||||||
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The amount of total gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to assets still held at end of period | $ | — | ||||||||||||
| | | | | ||||||||||
| | | | | ||||||||||
We are accounting for the acquisition of the MuGard Rights as a business combination under the acquisition method of accounting. Additional details regarding the Access License Agreement and the MuGard Rights can be found in Note G. The fair value measurements of contingent consideration obligations and the related intangible asset arising from business combinations are determined using unobservable, or Level 3, inputs. These inputs include (a) the estimated amount and timing of projected cash flows; (b) the probability of the achievement of the factors on which the contingency is based; and (c) the risk-adjusted discount rate used to present value the probability-weighted cash flows. Significant increases (decreases) in any of those inputs in isolation could result in a significantly lower or higher fair value measurement. | ||||||||||||||
The following table presents a reconciliation of contingent consideration obligations related to our acquisition of the MuGard Rights measured on a recurring basis using Level 3 inputs as of December 31, 2013 (in thousands): | ||||||||||||||
Balance as of June 6, 2013 | $ | — | ||||||||||||
Acquisition date fair value of contingent consideration | 13,700 | |||||||||||||
| | | | | ||||||||||
Balance as of June 30, 2013 | $ | 13,700 | ||||||||||||
Payments made | (51 | ) | ||||||||||||
Adjustments to fair value of contingent consideration | 1,074 | |||||||||||||
Other adjustments | (173 | ) | ||||||||||||
| | | | | ||||||||||
Balance as of December 31, 2013 | $ | 14,550 | ||||||||||||
| | | | | ||||||||||
| | | | | ||||||||||
During 2013, we recorded $1.1 million in expense related to the increase in fair value of the contingent consideration liability. This expense represents the time value of money impact of the contingent consideration fair value assessment as of December 31, 2013 and is included in selling, general and administrative expenses in our consolidated statements of operations. As of December 31, 2013, we estimate that the undiscounted royalty amounts we could pay under the Access License Agreement may range from $28.0 million to $34.0 million over a ten year period, which is our best estimate of the period over which we expect the majority of the asset's cash flows to be derived. This measure is based on significant Level 3 inputs not observable in the market. Key assumptions include a discount rate of approximately 15%. As of December 31, 2013, the assumptions used for determining fair value of the contingent consideration have not changed significantly from those used at the Acquisition Date. We have classified $0.9 million of the contingent consideration as a short-term liability, which was included in accrued expenses in our consolidated balance sheet as of December 31, 2013. | ||||||||||||||
In addition, in connection with the acquisition of the MuGard Rights, we acquired an intangible asset of $16.9 million, which was originally determined based on fair value measurements. These measures were based on significant Level 3 inputs not observable in the market. Key assumptions include a discount rate of 19%. We believe the estimated fair values of the MuGard Rights are based on reasonable assumptions, however, we cannot provide assurance that the underlying assumptions used to forecast the cash flows will materialize as we estimated and thus, our actual results may vary significantly from the estimated results. | ||||||||||||||
Inventories | ||||||||||||||
Inventories are stated at the lower of cost or market (net realizable value), with approximate cost being determined on a first-in, first-out basis. | ||||||||||||||
Prior to initial approval from the FDA or other regulatory agencies, we expense costs relating to the production of inventory in the period incurred. After such time as the product receives initial regulatory approval, we begin to capitalize the inventory costs related to the product. Prior to the June 2009 FDA approval of Feraheme for commercial sale in the U.S., all production costs related to Feraheme were expensed to research and development. Subsequent to receiving FDA approval, costs related to the production of Feraheme are capitalized to inventory, including the costs of converting previously existing raw or other materials to inventory and vialing, labeling, and packaging inventory manufactured prior to approval whose costs had already been recorded as research and development expense. We continue to expense costs associated with clinical trial material as research and development expense. | ||||||||||||||
Property and Equipment | ||||||||||||||
Property and equipment are recorded at cost and depreciated when placed into service using the straight-line method based on their estimated useful lives. Our laboratory and production equipment and furniture and fixtures are being depreciated over five years. Furniture, fixtures, and leasehold improvements associated with our facility lease are being depreciated over the shorter of their useful lives or the remaining life of the original lease (excluding optional lease renewal terms). | ||||||||||||||
Costs for capital assets not yet placed in service are capitalized on our balance sheets, and the cost of maintenance and repairs is expensed as incurred. Upon sale or other disposition of property and equipment, the cost and related depreciation are removed from the accounts and any resulting gain or loss is charged to our consolidated statement of operations. Long-lived assets to be held and used are evaluated for impairment whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset (asset group) and its eventual disposition. In the event such cash flows are not expected to be sufficient to recover the carrying amount of the assets, the assets are written down to their estimated fair values. Assets classified as held for sale are no longer subject to depreciation and are recorded at the lower of carrying value or estimated net realizable value. | ||||||||||||||
Restricted Cash | ||||||||||||||
As of December 31, 2013 and 2012, we classified $3.3 million and $0.5 million as restricted cash, respectively. Included in the $3.3 million restricted cash balance as of December 31, 2013 was a $2.9 million escrow payment related to a business development transaction that we did not complete. The escrow payment was returned to us in January 2014 and as such was classified as short-term as of December 31, 2013. We also included $0.4 million and $0.5 million in our December 31, 2013 and 2012 restricted cash balances, respectively, related to security deposits delivered to the landlord of our then current locations in the form of irrevocable letters of credits. | ||||||||||||||
Patents | ||||||||||||||
We expense all patent-related costs as incurred. | ||||||||||||||
Research and Development Expenses | ||||||||||||||
Research and development expenses include external expenses, such as costs of clinical trials, contract research and development expenses, certain manufacturing research and development costs, regulatory filing fees, consulting and professional fees and expenses, and internal expenses, such as compensation of employees engaged in research and development activities, the manufacture of product needed to support research and development efforts, related costs of facilities, and other general costs related to research and development. Manufacturing costs are expensed as incurred until a product has received the necessary initial regulatory approval. | ||||||||||||||
Advertising Costs | ||||||||||||||
Advertising costs are expensed as incurred and are included in selling, general and administrative expenses in our consolidated statement of operations. Advertising costs, including promotional expenses and costs related to trade shows were $1.9 million, $1.8 million and $3.1 million for the years ended December 31, 2013, 2012 and 2011, respectively. | ||||||||||||||
Revenue Recognition and Related Sales Allowances and Accruals | ||||||||||||||
We recognize revenue from the sale of Feraheme/Rienso and MuGard as well as license fee and other collaboration revenues, including milestone payments, other product sale revenues, and royalties we receive from our licensees. We recognize revenue in accordance with current accounting guidance related to the recognition, presentation and disclosure of revenue in financial statements, which outlines the basic criteria that must be met to recognize revenue and provides guidance for disclosure of revenue in financial statements. We recognize revenue when: | ||||||||||||||
• | ||||||||||||||
Persuasive evidence of an arrangement exists; | ||||||||||||||
• | ||||||||||||||
Delivery of product has occurred or services have been rendered; | ||||||||||||||
• | ||||||||||||||
The sales price charged is fixed or determinable; and | ||||||||||||||
• | ||||||||||||||
Collection is reasonably assured. | ||||||||||||||
U.S. Feraheme Product Sales, Net | ||||||||||||||
We record Feraheme product sales allowances and accruals related to prompt payment discounts, chargebacks, government and other rebates, distributor, wholesaler and group purchasing organization, or GPO, fees, and product returns as a reduction of revenue in our consolidated statement of operations at the time product sales are recorded. Calculating these gross-to-net sales adjustments involves estimates and judgments based primarily on actual Feraheme sales data, forecasted customer buying patterns, and market research data related to utilization rates by various end-users. In addition, we also monitor our distribution channel to determine whether additional allowances or accruals are required based on inventory in our sales channel. An analysis of our U.S. Feraheme product sales allowances and accruals for the years ended December 31, 2013, 2012 and 2011 is as follows (in thousands): | ||||||||||||||
2013 | 2012 | 2011 | ||||||||||||
Provision for U.S. product sales allowances and accruals | ||||||||||||||
Discounts and chargebacks | $ | 37,098 | $ | 26,517 | $ | 13,851 | ||||||||
Government and other rebates | 10,868 | 6,058 | 8,544 | |||||||||||
Medicaid rebate reserve adjustment | (568 | ) | (621 | ) | (2,532 | ) | ||||||||
Returns | 952 | (1,516 | ) | 1,259 | ||||||||||
| | | | | | | | | | | ||||
Total provision for U.S. product sales allowances and accruals | $ | 48,350 | $ | 30,438 | $ | 21,122 | ||||||||
Total gross U.S. product sales | $ | 119,712 | $ | 88,725 | $ | 73,219 | ||||||||
Total provision for U.S. product sales allowances and accruals as a percent of total gross U.S. product sales | 40 | % | 34 | % | 29 | % | ||||||||
Classification of U.S. Feraheme Product Sales Allowances and Accruals | ||||||||||||||
Product sales allowances and accruals are primarily comprised of both direct and indirect fees, discounts and rebates and provisions for estimated product returns. Direct fees, discounts and rebates are contractual fees and price adjustments payable to wholesalers, specialty distributors and other customers that purchase products directly from us. Indirect fees, discounts and rebates are contractual price adjustments payable to healthcare providers and organizations, such as certain physicians, clinics, hospitals, GPOs, and dialysis organizations that typically do not purchase products directly from us but rather from wholesalers and specialty distributors. In accordance with guidance related to accounting for fees and consideration given by a vendor to a customer, including a reseller of a vendor's products, these fees, discounts and rebates are presumed to be a reduction of the selling price of Feraheme. Product sales allowances and accruals are based on definitive contractual agreements or legal requirements (such as Medicaid laws and regulations) related to the purchase and/or utilization of the product by these entities and are recorded in the same period that the related revenue is recognized. We estimate product sales allowances and accruals using either historical, actual and/or other data, including estimated patient usage, applicable contractual rebate rates, contract performance by the benefit providers, other current contractual and statutory requirements, historical market data based upon experience of Feraheme and other products similar to Feraheme, specific known market events and trends such as competitive pricing and new product introductions, current and forecasted customer buying patterns and inventory levels, and the shelf life of Feraheme. As part of this evaluation, we also review changes to federal and other legislation, changes to rebate contracts, changes in the level of discounts, and changes in product sales trends. Although allowances and accruals are recorded at the time of product sale, certain rebates are typically paid out, on average, up to three months or longer after the sale. | ||||||||||||||
Allowances against receivable balances primarily relate to prompt payment discounts, provider chargebacks and certain government agency rebates and are recorded at the time of sale, resulting in a reduction in product sales revenue and the reporting of product sales receivables net of allowances. Accruals related to Medicaid and provider volume rebates, wholesaler and distributor fees, GPO fees, other discounts to healthcare providers and product returns are recorded at the time of sale, resulting in a reduction in product sales revenue and the recording of an increase in accrued expenses. | ||||||||||||||
Discounts | ||||||||||||||
We typically offer a 2% prompt payment discount to our customers as an incentive to remit payment in accordance with the stated terms of the invoice, generally thirty days. Because we anticipate that those customers who are offered this discount will take advantage of the discount, we accrue 100% of the prompt payment discount, at the time of sale, based on the gross amount of each invoice. We adjust the accrual quarterly to reflect actual experience. | ||||||||||||||
Chargebacks | ||||||||||||||
Chargeback reserves represent our estimated obligations resulting from the difference between the prices at which we sell Feraheme to wholesalers and the sales price ultimately paid to wholesalers under fixed price contracts by third-party payors, including governmental agencies. We determine our chargeback estimates based on actual Feraheme sales data and forecasted customer buying patterns. Actual chargeback amounts are determined at the time of resale to the qualified healthcare provider, and we generally issue credits for such amounts within several weeks of receiving notification from the wholesaler. Estimated chargeback amounts are recorded at the time of sale, and we adjust the allowance quarterly to reflect actual experience. | ||||||||||||||
Government and Other Rebates | ||||||||||||||
Government and other rebate reserves relate to our reimbursement arrangements with state Medicaid programs or performance rebate agreements with certain classes of trade. We determine our estimates for Medicaid rebates based on actual Feraheme sales data and our historical Feraheme claims experience. In estimating these reserves, we provide for a Medicaid rebate associated with both those expected instances where Medicaid will act as the primary insurer as well as in those instances where we expect Medicaid will act as the secondary insurer. For rebates associated with reaching defined performance goals, we determine our estimates using actual Feraheme sales data and forecasted customer buying patterns. Rebate amounts generally are invoiced quarterly and are paid in arrears, and we expect to pay such amounts within several weeks of notification by the Medicaid or provider entity. Estimated government and other rebates are recorded at the time of sale and, with the exception of Medicaid as discussed below, we adjust the accrual quarterly to reflect actual experience. | ||||||||||||||
During 2013, 2012 and 2011, we revised our estimated Medicaid utilization rate based on actual rebate claims received since the 2009 launch of Feraheme, our expectations of state level activity, and estimated rebate claims not yet submitted, which resulted in a reduction of our estimated Medicaid rebate reserve related to prior period Feraheme sales of $0.6 million, $0.6 million and $2.5 million, respectively. These changes in estimates were reflected as an increase in our net product sales for 2013, 2012 and 2011. As a result, our gross to net percentages for 2013, 2012 and 2011 were lower than they otherwise would have been had we not reduced our Medicaid rebate reserve. The reduction of our estimated Medicaid rebate reserve had an impact of $0.03, $0.03 and $0.12 per basic and diluted share for 2013, 2012 and 2011, respectively. We regularly assess our Medicaid reserve balance and the rate at which we accrue for claims against product sales. If we determine in future periods that our actual rebate experience is not indicative of expected claims, or if other factors affect estimated claims rates, we may be required to change our estimated Medicaid reserve and/or the current rate at which we estimate our Medicaid claims, which would affect our earnings in the period of the change in estimate and such change could be significant. | ||||||||||||||
Distributor/Wholesaler and Group Purchasing Organization Fees | ||||||||||||||
Fees under our arrangements with distributors and wholesalers are usually based upon units of Feraheme purchased during the prior month or quarter and are usually paid by us within several weeks of our receipt of an invoice from the wholesaler or distributor, as the case may be. Fees under our arrangements with GPOs are usually based upon member purchases during the prior quarter and are generally billed by the GPO within 30 days after period end. Current accounting standards related to consideration given by a vendor to a customer, including a reseller of a vendor's products, specify that cash consideration given by a vendor to a customer is presumed to be a reduction of the selling price of the vendor's products or services and therefore should be characterized as a reduction of revenue. Consideration should be characterized as a cost incurred if we receive, or will receive, an identifiable benefit (goods or services) in exchange for the consideration and we can reasonably estimate the fair value of the benefit received. Because the fees we pay to wholesalers do not meet the foregoing conditions to be characterized as a cost, we have characterized these fees as a reduction of revenue and have included them in government and other rebates in the table above. We generally pay such amounts within several weeks of our receipt of an invoice from the distributor, wholesaler, or GPO. Accordingly, we accrue the estimated fee due at the time of sale, based on the contracted price invoiced to the customer. We adjust the accrual quarterly to reflect actual experience. | ||||||||||||||
Product Returns | ||||||||||||||
Consistent with industry practice, we generally offer our wholesalers, specialty distributors and other customers a limited right to return Feraheme purchased directly from us based on the product's expiration date which, once packaged, is currently five years in the U.S. We estimate product returns based on the historical return patterns and known or expected changes in the marketplace. We currently have limited actual returns data, and therefore are not able to solely rely on our actual returns experience. We track actual returns by individual production lots. Returns on lots eligible for credits under our returned goods policy are monitored and compared with historical return trends and rates. | ||||||||||||||
We consider several additional factors in our product return estimation process, including our internal sales forecasts and inventory levels in the distribution channel. We expect that wholesalers and healthcare providers will not stock significant inventory due to Feraheme's cost and expense to store. Based on the level of inventory in the wholesale distribution channel, we determine whether an adjustment to the sales return reserve is appropriate. | ||||||||||||||
We record an estimate of returns at the time of sale. If necessary, our estimated rate of returns may be adjusted for actual return experience as it becomes available and for known or expected changes in the marketplace. During 2012, we reduced our reserve for product returns by approximately $2.2 million primarily as a result of a lower than expected rate of product returns as well as the lapse of the product return period on certain manufactured Feraheme lots that carried a two year expiration. As a result, the product returns provision applied to gross product sales for the year ended December 31, 2012 was a credit of $1.5 million, resulting in an increase to net product sales for the year. The reduction of our estimated product returns reserve had a positive impact of $0.10 per basic and diluted share for year ended December 31, 2012. We did not significantly adjust our reserve for product returns during 2013 or 2011. Feraheme is still early in its product lifecycle and returns experience may change over time. A future revision to our product returns estimate would result in a corresponding change to our net product sales in the period in which the change is made and could be significant. | ||||||||||||||
Other Product Sales and Royalties | ||||||||||||||
Other product sales and royalties include product sales of Feraheme/Rienso and GastroMARK® to our licensees, net product sales of MuGard and royalties received from our licensees' sales of Feraheme/Rienso and GastroMARK. We record all product sales for Feraheme/Rienso sold to Takeda in deferred revenues in our consolidated balance sheet. We recognize these deferred revenues, and the associated cost of product sales, in our consolidated statement of operations at the time Takeda reports to us that sales have been made to its customers. | ||||||||||||||
License Fee and Other Collaboration Revenues | ||||||||||||||
The terms of product development and commercialization agreements entered into between us and our collaborative licensees may include non-refundable license fees, payments based on the achievement of certain milestones and performance goals, reimbursement of certain out-of-pocket costs, payment for manufacturing services, and royalties on product sales. We recognize license fee and research and development revenue under collaborative arrangements over the term of the applicable agreements using a proportional performance model, if practical. Otherwise, we recognize such revenue on a straight-line basis. Under this model, revenue is generally recognized in an amount equal to the lesser of the amount due under the agreements or an amount based on the proportional performance to date. In cases where project costs or other performance metrics are not estimable but there is an established contract period, revenues are recognized on a straight-line basis over the term of the relevant agreement. In cases where we are reimbursed for certain research and development costs associated with our collaboration agreements and where we are acting as the principal in carrying out these services, any reimbursement payments are recorded in license fee and other collaboration revenues in our consolidated statement of operations to match the costs that we incur during the period in which we perform those services. Nonrefundable payments and fees are recorded as deferred revenue upon receipt and may require deferral of revenue recognition to future periods. | ||||||||||||||
Multiple Element Arrangements and Milestone Payments | ||||||||||||||
We evaluate revenue from arrangements that have multiple elements to determine whether the components of the arrangement represent separate units of accounting as defined in the accounting guidance related to revenue arrangements with multiple deliverables. Under current accounting guidance, which governs any agreements that contain multiple elements that are either entered into or materially modified subsequent to January 1, 2011, companies are required to establish the fair value of undelivered products and services based on a separate revenue recognition process using management's best estimate of the selling price for an undelivered item when there is no vendor-specific objective evidence or third-party evidence to determine the fair value of that undelivered item. Agreements entered into prior to January 1, 2011, that have not been materially modified, including our agreement with Takeda, are accounted for under previous accounting guidance, which provides that an element of a contract can be accounted for separately if the delivered elements have standalone value and the fair value of all undelivered elements is determinable. If an element is considered to have standalone value but the fair value of any of the undelivered items cannot be determined, all elements of the arrangement are recognized as revenue as a single unit of accounting over the period of performance for such undelivered items or services. Significant management judgment is required in determining what elements constitute deliverables and what deliverables or combination of deliverables should be considered units of accounting. | ||||||||||||||
When multiple deliverables are combined and accounted for as a single unit of accounting, we base our revenue recognition pattern on the last to be delivered element. Revenue is recognized using either a proportional performance or straight-line method, depending on whether we can reasonably estimate the level of effort required to complete our performance obligations under an arrangement and whether such performance obligations are provided on a best-efforts basis. To the extent we cannot reasonably estimate our performance obligations, we recognize revenue on a straight-line basis over the period we expect to complete our performance obligations. Significant management judgment is required in determining the level of effort required under an arrangement and the period over which we are expected to complete our performance obligations under an arrangement. We may have to revise our estimates based on changes in the expected level of effort or the period we expect to complete our performance obligations. | ||||||||||||||
Our collaboration agreements may entitle us to additional payments upon the achievement of performance-based milestones. If a milestone involves substantive effort on our part and its achievement is not considered probable at the inception of the collaboration, we recognize the milestone consideration as revenue in the period in which the milestone is achieved only if it meets the following additional criteria: | ||||||||||||||
• | ||||||||||||||
The milestone consideration received is commensurate with either the level of effort required to achieve the milestone or the enhancement of the value of the item delivered as a result of a specific outcome resulting from our performance to achieve the milestone; | ||||||||||||||
• | ||||||||||||||
The milestone is related solely to our past performance; and | ||||||||||||||
• | ||||||||||||||
The milestone consideration is reasonable relative to all deliverables and payment terms in the arrangement. | ||||||||||||||
There is significant judgment involved in determining whether a milestone meets all of these criteria. For milestones that do not meet the above criteria and are therefore not considered substantive milestones, we recognize that portion of the milestone payment equal to the percentage of the performance period completed at the time the milestone is achieved and the above conditions are met. The remaining portion of the milestone will be recognized over the remaining performance period using a proportional performance or straight-line method. | ||||||||||||||
Amounts received prior to satisfying the above revenue recognition criteria are recorded as deferred revenue in our consolidated balance sheets. Amounts not expected to be recognized within the next 12 months are classified as long-term deferred revenue. | ||||||||||||||
Acquisitions | ||||||||||||||
We account for acquired businesses using the acquisition method of accounting, which requires, with limited exceptions, that assets acquired and liabilities assumed be recognized at their estimated fair values as of the acquisition date. Transaction costs are expensed as incurred. Any excess of the consideration transferred over the estimated fair values of the net assets acquired is recorded as goodwill. | ||||||||||||||
Intangible Assets | ||||||||||||||
Intangible assets with definite useful lives are amortized to their estimated residual values over their estimated useful lives and reviewed for impairment if certain events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. | ||||||||||||||
Contingent Consideration | ||||||||||||||
Contingent consideration arising from a business combination is included as part of the acquisition cost and is recognized at fair value as of the acquisition date. Any liability resulting from contingent consideration is remeasured to its fair value at each reporting date until the contingency is resolved. These changes in fair value are recognized in our consolidated statements of operations. | ||||||||||||||
Shipping and Handling Costs | ||||||||||||||
We utilize a third-party logistics provider, which is a subsidiary of one of our distribution customers, to provide us with various shipping and handling services related to sales of Feraheme. As we receive an identifiable benefit and we can reasonably estimate the fair value of this benefit, we have recorded $0.3 million, $0.2 million and $0.1 million as a selling, general and administrative expense during 2013, 2012 and 2011, respectively. | ||||||||||||||
Equity-Based Compensation | ||||||||||||||
Under the fair value recognition guidance of equity-based compensation accounting rules, equity-based compensation cost is generally required to be measured at the grant date (based upon an estimate of the fair value of the compensation granted) and recorded to expense over the requisite service period, which generally is the vesting period. Because equity-based compensation expense is based on awards ultimately expected to vest, we must make certain judgments about whether employees and directors will complete the requisite service period. Accordingly, we have reduced the compensation expense being recognized for estimated forfeitures. Under current accounting guidance, forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Forfeitures are estimated based upon historical experience, adjusted for unusual events such as the corporate restructurings in 2012 and 2011, which resulted in higher than expected turnover and forfeitures in those years. If factors change and we employ different assumptions in future periods, the compensation expense that we record in the future may differ significantly from what we have recorded in the current period. | ||||||||||||||
We estimate the fair value of equity-based compensation involving stock options based on the Black-Scholes option pricing model. We estimate the fair value of our restricted stock units whose vesting is contingent upon market conditions using the Monte-Carlo simulation model. These models require the input of several factors such as the expected option term, the expected risk-free interest rate over the expected option term, the expected volatility of our stock price over the expected option term, and the expected dividend yield over the expected option term and are subject to various assumptions. The fair value of awards whose fair values are calculated using the Black-Scholes option pricing model is generally being amortized on a straight-line basis over the requisite service period and is recognized based on the proportionate amount of the requisite service period that has been rendered during each reporting period. The fair value of awards with market conditions is being amortized based upon the estimated derived service period. We believe our valuation methodologies are appropriate for estimating the fair value of the equity awards we grant to our employees and directors. Our equity award valuations are estimates and thus may not be reflective of actual future results or amounts ultimately realized by recipients of these grants. These amounts, and the amounts applicable to future quarters, are also subject to future quarterly adjustments based upon a variety of factors, which include, but are not limited to, changes in estimated forfeiture rates and the issuance of new equity-based awards. The fair value of restricted stock units granted to our employees and directors is determined based upon the quoted closing market price per share on the date of grant, adjusted for estimated forfeitures. | ||||||||||||||
Income Taxes | ||||||||||||||
Deferred tax assets and deferred tax liabilities are recognized based on temporary differences between the financial reporting and tax basis of assets and liabilities using future enacted rates. A valuation allowance is recorded against deferred tax assets if it is more likely than not that some or all of our deferred tax assets will not be realized. | ||||||||||||||
Concentrations and Significant Customer Information | ||||||||||||||
Financial instruments which potentially subject us to concentrations of credit risk consist principally of cash, investments, and accounts receivable. As of December 31, 2013, our cash, cash equivalents and investments amounted to approximately $213.8 million. We currently invest our excess cash primarily in U.S. government and agency money market funds, and investments in corporate debt securities and U.S. treasury and government agency securities. As of December 31, 2013, we had approximately $18.8 million of our total $27.0 million cash and cash equivalents balance invested in institutional money market funds, of which $12.2 million was invested in a single fund, which is collateralized solely by U.S. treasury and government agency securities. | ||||||||||||||
Our operations are located solely within the U.S. We are focused principally on developing, manufacturing, and commercializing Feraheme/Rienso and commercializing MuGard. We perform ongoing credit evaluations of our customers and generally do not require collateral. The following table sets forth customers who represented 10% or more of our total revenues for 2013, 2012 and 2011: | ||||||||||||||
Years Ended | ||||||||||||||
December 31, | ||||||||||||||
2013 | 2012 | 2011 | ||||||||||||
AmerisourceBergen Drug Corporation | 41 | % | 34 | % | 41 | % | ||||||||
McKesson Corporation | 24 | % | 17 | % | 21 | % | ||||||||
Cardinal Health, Inc. | 16 | % | 12 | % | 13 | % | ||||||||
Takeda Pharmaceuticals Company Limited | 11 | % | 31 | % | 13 | % | ||||||||
In addition, approximately 30%, 32% and 35% of our end-user demand in 2013, 2012 and 2011, respectively, was generated by members of a single GPO with which we have contracted. Revenues from customers outside of the U.S. amounted to approximately 11%, 32% and 14% of our total revenues for 2013, 2012 and 2011, respectively, and were principally related to collaboration revenue recognized in connection with our collaboration agreement with Takeda, which is headquartered in Japan. | ||||||||||||||
We are currently solely dependent on a single supply chain for our Feraheme/Rienso drug substance and finished drug product. We are exposed to a significant loss of revenue from the sale of Feraheme/Rienso if our suppliers and/or manufacturers cannot fulfill demand for any reason. | ||||||||||||||
Comprehensive Income (Loss) | ||||||||||||||
The current accounting guidance related to comprehensive income (loss) requires us to display comprehensive loss and its components as part of our consolidated financial statements. Our comprehensive loss consists of net loss and other comprehensive income (loss). Other comprehensive income (loss) includes changes in equity that are excluded from net loss, which for all periods presented related to unrealized holding gains and losses on available-for-sale investments, net of tax. | ||||||||||||||
Net Loss per Share | ||||||||||||||
We compute basic net loss per share by dividing net loss by the weighted average number of common shares outstanding during the relevant period. The components of basic and diluted net loss per share were as follows (in thousands, except per share data): | ||||||||||||||
Years Ended December 31, | ||||||||||||||
2013 | 2012 | 2011 | ||||||||||||
Net loss | $ | (9,602 | ) | $ | (16,750 | ) | $ | (77,069 | ) | |||||
Weighted average common shares outstanding | 21,703 | 21,392 | 21,189 | |||||||||||
Net loss per share: | ||||||||||||||
Basic and diluted | $ | (0.44 | ) | $ | (0.78 | ) | $ | (3.64 | ) | |||||
The following table sets forth the potential common shares issuable upon the exercise of outstanding options and the vesting of restricted stock units (prior to consideration of the treasury stock method), that were excluded from our computation of diluted net loss per share because such options and restricted stock units were anti-dilutive (in thousands): | ||||||||||||||
Years Ended | ||||||||||||||
December 31, | ||||||||||||||
2013 | 2012 | 2011 | ||||||||||||
Options to purchase shares of common stock | 2,820 | 2,190 | 1,817 | |||||||||||
Shares of common stock issuable upon the vesting of restricted stock units | 465 | 374 | 669 | |||||||||||
| | | | | | | | | | | ||||
Total | 3,285 | 2,564 | 2,486 | |||||||||||
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| | | | | | | | | | | ||||
Reclassifications | ||||||||||||||
Certain amounts in prior periods have been reclassified in order to conform to the current period presentation. | ||||||||||||||
Investments
Investments | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Investments | ' | |||||||||||||
Investments | ' | |||||||||||||
C. Investments | ||||||||||||||
As of December 31, 2013 and 2012, our investments equaled $186.8 million and $180.8 million, respectively, and consisted of securities classified as available-for-sale in accordance with accounting standards which provide guidance related to accounting and classification of certain investments in debt and equity securities. | ||||||||||||||
The following is a summary of our investments as of December 31, 2013 and 2012 (in thousands): | ||||||||||||||
December 31, 2013 | ||||||||||||||
Amortized | Gross | Gross | Estimated | |||||||||||
Cost | Unrealized | Unrealized | Fair | |||||||||||
Gains | Losses | Value | ||||||||||||
Corporate debt securities | ||||||||||||||
Due in one year or less | $ | 42,609 | $ | 44 | $ | (4 | ) | $ | 42,649 | |||||
Due in one to three years | 91,443 | 137 | (106 | ) | 91,474 | |||||||||
U.S. treasury and government agency securities | ||||||||||||||
Due in one year or less | 18,526 | 19 | — | 18,545 | ||||||||||
Due in one to three years | 34,123 | 37 | (25 | ) | 34,135 | |||||||||
| | | | | | | | | | | | | | |
Total investments | $ | 186,701 | $ | 237 | $ | (135 | ) | $ | 186,803 | |||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
December 31, 2012 | ||||||||||||||
Amortized | Gross | Gross | Estimated | |||||||||||
Cost | Unrealized | Unrealized | Fair | |||||||||||
Gains | Losses | Value | ||||||||||||
Corporate debt securities | ||||||||||||||
Due in one year or less | $ | 52,332 | $ | 88 | $ | (6 | ) | $ | 52,414 | |||||
Due in one to three years | 59,176 | 137 | (37 | ) | 59,276 | |||||||||
U.S. treasury and government agency securities | ||||||||||||||
Due in one year or less | 24,795 | 86 | — | 24,881 | ||||||||||
Due in one to three years | 34,606 | 84 | (2 | ) | 34,688 | |||||||||
Commercial paper | ||||||||||||||
Due in one year or less | 9,494 | 1 | (4 | ) | 9,491 | |||||||||
| | | | | | | | | | | | | | |
Total investments | $ | 180,403 | $ | 396 | $ | (49 | ) | $ | 180,750 | |||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Impairments and Unrealized Gains and Losses on Investments | ||||||||||||||
We did not recognize any other-than-temporary impairment losses in our consolidated statements of operations related to our securities during either 2013 or 2012. We considered various factors, including the length of time that each security was in an unrealized loss position and our ability and intent to hold these securities until the recovery of their amortized cost basis occurs. As of December 31, 2013, none of our investments has been in an unrealized loss position for more than one year. Future events may occur, or additional information may become available, which may cause us to identify credit losses where we do not expect to receive cash flows sufficient to recover the entire amortized cost basis of a security and which may necessitate the recording of future realized losses on securities in our portfolio. Significant losses in the estimated fair values of our investments could have a material adverse effect on our earnings in future periods. | ||||||||||||||
Realized Gains and Losses on Investments | ||||||||||||||
Gains and losses are determined on the specific identification method. Realized gains were insignificant during 2013. During 2012, we recorded realized losses of $1.5 million to our consolidated statement of operations related to the sale of our then-remaining auction rate securities portfolio. | ||||||||||||||
Accounts_Receivable_Net
Accounts Receivable, Net | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Accounts Receivable, Net | ' | |||||||
Accounts Receivable, Net | ' | |||||||
D. Accounts Receivable, Net | ||||||||
Our net accounts receivable were $6.8 million and $6.4 million as of December 31, 2013 and 2012, respectively, and primarily represented amounts due from wholesalers and distributors to whom we sell Feraheme directly. Accounts receivable are recorded net of reserves for estimated chargeback obligations, prompt payment discounts and any allowance for doubtful accounts. | ||||||||
As part of our credit management policy, we perform ongoing credit evaluations of our customers, and we have not required collateral from any customer. To date, we have not experienced significant bad debts. Accordingly, we have not established an allowance for doubtful accounts at either December 31, 2013 or 2012. If the financial condition of any of our significant customers was to deteriorate and result in an impairment of its ability to make payments owed to us, an allowance for doubtful accounts may be required which could have a material effect on earnings in the period of any such adjustment. | ||||||||
Customers which represented greater than 10% of our accounts receivable balances as of December 31, 2013 and 2012 were as follows: | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
AmerisourceBergen Drug Corporation | 43 | % | 48 | % | ||||
McKesson Corporation | 29 | % | 28 | % | ||||
Cardinal Health, Inc. | 19 | % | 18 | % |
Inventories
Inventories | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Inventories | ' | |||||||
Inventories | ' | |||||||
E. Inventories | ||||||||
Our major classes of inventories were as follows as of December 31, 2013 and 2012 (in thousands): | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
Raw materials | $ | 3,157 | $ | 2,652 | ||||
Work in process | 8,322 | 2,524 | ||||||
Finished goods | 5,738 | 7,275 | ||||||
| | | | | | | | |
Total inventories | $ | 17,217 | $ | 12,451 | ||||
| | | | | | | | |
| | | | | | | | |
During 2013, we expensed $1.1 million of commercial inventory deemed no longer saleable, which we recorded in cost of goods sold. In addition, during 2013, we expensed $1.1 million of commercial inventory which we determined would solely be used in manufacturing processes development activities at our third-party suppliers, which we have recorded in research and development expense. | ||||||||
During 2012, we expensed $0.6 million of inventory which was initially produced to validate the manufacturing process at third-party suppliers and which we no longer believed was suitable for sale. We have recorded this $0.6 million in research and development expenses. In addition, during 2012, we expensed $0.6 million of commercial inventory deemed no longer saleable, which we recorded in cost of goods sold. We expensed $0.7 million of additional inventory related to our then-ongoing divestiture of our Cambridge, Massachusetts manufacturing facility and recorded the expense in restructuring costs. | ||||||||
On a quarterly basis, we analyze our inventory levels to determine whether we have any obsolete, expired, or excess inventory. If any inventory is expected to expire prior to being sold, has a cost basis in excess of its net realizable value, is in excess of expected sales requirements as determined by internal sales forecasts, or fails to meet commercial sale specifications, the inventory is written-down through a charge to cost of goods sold. The determination of whether inventory costs will be realizable requires estimates by management of future expected inventory requirements, based on internal sales forecasts and forecasts received from Takeda. Once packaged, Feraheme/Rienso currently has a shelf-life of five years in the U.S. and between two and three years outside of the U.S., and as a result of comparison to internal sales forecasts, we expect to fully realize the carrying value of our current Feraheme/Rienso finished goods inventory. If actual market conditions are less favorable than those projected by management, additional inventory write-downs may be required. Charges for inventory write-downs are not reversed if it is later determined that the product is saleable. | ||||||||
Property_and_Equipment_Net
Property and Equipment, Net | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Property and Equipment, Net | ' | |||||||
Property and Equipment, Net | ' | |||||||
F. Property and Equipment, Net | ||||||||
Property and equipment consisted of the following as of December 31, 2013 and 2012, respectively (in thousands): | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
Furniture and fixtures | $ | 1,536 | $ | 5,326 | ||||
Leasehold improvements | 430 | 5,373 | ||||||
Laboratory and production equipment | 376 | 115 | ||||||
Construction in process | — | 228 | ||||||
| | | | | | | | |
2,342 | 11,042 | |||||||
Less—accumulated depreciation | (496 | ) | (7,745 | ) | ||||
| | | | | | | | |
Property and equipment, net | $ | 1,846 | $ | 3,297 | ||||
| | | | | | | | |
| | | | | | | | |
In September 2013, we relocated our corporate offices from Lexington, Massachusetts to Waltham, Massachusetts. In connection with our relocation, we recorded $1.6 million of new leasehold improvements and furniture and fixtures related to our new location. In addition, during 2013, we recorded $3.0 million of depreciation expense, including $1.9 million of accelerated depreciation expense related to fixed assets at our prior office facility. | ||||||||
During 2012, we determined that certain assets related to our Cambridge, Massachusetts manufacturing facility, including the related land, building and certain equipment, met the criteria established by current accounting guidance for classifying assets as held for sale. As a result, we reclassified these assets from property, plant and equipment to assets held for sale in our consolidated balance sheet as of December 31, 2012 and recorded the value of these assets at $2.0 million, their estimated fair market value. In October 2013, we sold our Cambridge, Massachusetts manufacturing facility, including the land and building, to 61 Mooney Street LLC. We received $2.0 million in consideration for the land and building at the time of sale and we did not recognize a material gain or loss on this transaction. In addition, we sold certain equipment previously reclassified as held for sale and recognized a $0.4 million gain during 2013. | ||||||||
Business_Combination
Business Combination | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Business Combination | ' | ||||
Business Combination | ' | ||||
G. Business Combination | |||||
As part of our strategy to expand our portfolio with additional commercial-stage specialty products, in June 2013, we entered into the Access License Agreement pursuant to which we obtained an exclusive, royalty-bearing license, with the right to grant sublicenses, to certain intellectual property rights, including know-how, patents and trademarks, to use, import, offer for sale, sell, manufacture and commercialize MuGard in the U.S. Territory for the management of all diseases or conditions of the oropharyngeal cavity, including mucositis. | |||||
MuGard was launched in the U.S. by Access in 2010 after receiving 510(k) clearance from the FDA and is indicated for the management of oral mucositis/stomatitis (that may be caused by radiotherapy and/or chemotherapy) and all types of oral wounds (mouth sores and injuries), including aphthous ulcers/canker sores and traumatic ulcers, such as those caused by oral surgery or ill-fitting dentures or braces. | |||||
Access remains responsible for the manufacture of MuGard and we have entered into a quality agreement and plan to enter into a supply agreement with Access under which we will purchase MuGard inventory from Access. Our inventory purchases are at the price actually paid by Access to purchase it from a third-party plus a mark-up to cover administration, handling and overhead. | |||||
In consideration for the license, we paid Access an upfront payment of $3.3 million in June 2013. We are required to pay royalties to Access on net sales of MuGard until the later of (a) the expiration of the licensed patents or (b) the tenth anniversary of the first commercial sale of MuGard under the Access License Agreement in the U.S. Territory, or the Royalty Term. These tiered, double-digit royalty rates decrease for any part of the Royalty Term occurring after the expiration of the licensed patents and are subject to off-set against certain of our expenses. After the expiration of the Royalty Term, the license shall become a fully paid-up, royalty-free and perpetual license in the U.S. Territory. In addition to making an upfront payment of $3.3 million, we also acquired $0.2 million of existing MuGard inventory from Access, which was included in our condensed consolidated balance sheet as of the Acquisition Date. | |||||
We did not assume any pre-existing liabilities related to the MuGard business, contingent or otherwise, arising prior to the Acquisition Date. We are accounting for the acquisition of the MuGard Rights as a business combination under the acquisition method of accounting since we acquired the U.S. commercial rights for MuGard and inventory, and obtained access to certain related regulatory assets and product supply, employees and other assets, including certain patent and trademark rights, contracts, and related books and records, held by Access which are exclusively related to MuGard (inputs), including the infrastructure to sell, distribute and market MuGard (processes) and net sales of MuGard (outputs). In addition, during the term of the Access License Agreement, we will have control over sales, distribution and marketing of MuGard in the U.S. as Access has assigned to us all of its right, title and interest in MuGard-related internet and social media outlets and other sales, marketing and promotional materials currently owned or controlled by Access. Access will no longer commercialize, market, promote, sell or make public communications relating to MuGard in the U.S Territory, except as may be agreed to by us. Access has also agreed to not, directly or indirectly, research, develop, market, sell or commercialize any medical devices that directly compete with MuGard for the treatment of any diseases or conditions of the oropharyngeal cavity in the U.S. Territory. | |||||
We estimated the fair value of the acquired MuGard Rights using the income approach. The income approach uses valuation techniques to convert future amounts to a single present amount (discounted). This approach begins with a forecast of the net cash flows expected to be generated by the asset over its estimated useful life. These cash flows are then adjusted to present value by applying an appropriate discount rate that reflects the risk factors associated with the cash flow streams. Some of the more significant estimates and assumptions inherent in the income approach include the following: | |||||
• | |||||
The amount and timing of projected future cash flows, adjusted for the probability of marketing success; | |||||
• | |||||
The discount rate selected to measure the risks inherent in the future cash flows; and | |||||
• | |||||
An assessment of the asset's life-cycle and the competitive trends impacting the asset. | |||||
The following table summarizes the total consideration for the MuGard Rights (in thousands): | |||||
Consideration: | |||||
Cash | $ | 3,434 | |||
Acquisition-related contingent consideration | 13,700 | ||||
| | | | | |
Total consideration | $ | 17,134 | |||
| | | | | |
| | | | | |
The $17.1 million total consideration includes the estimated fair value of the contingent consideration at the Acquisition Date. During 2013, we completed the valuation for the acquisition of the MuGard Rights and determined the fair value of the contingent consideration to be $13.7 million as of the Acquisition Date, and the fair value of the intangible asset was determined to be $16.9 million as of the Acquisition Date. The Acquisition Date fair value of the contingent consideration was determined based on various market factors, including an analysis of estimated sales using a discount rate of approximately 15%. As of December 31, 2013, we estimated that the undiscounted royalty amounts we could pay under the Access License Agreement may range from $28.0 million to $34.0 million over a ten year period, which is our best estimate of the period over which we expect the majority of the asset's cash flows to be derived. The measurement period adjustments represent updates made to the preliminary valuation based on revisions to estimates in the interim period subsequent to the acquisition and initial accounting date. | |||||
The following table summarizes the estimated fair values of the assets acquired related to the business combination as of the Acquisition Date (in thousands): | |||||
Assets Acquired: | |||||
MuGard intangible asset | $ | 16,893 | |||
Inventory | 241 | ||||
| | | | | |
Net identifiable assets acquired | $ | 17,134 | |||
| | | | | |
| | | | | |
The Acquisition Date fair value of the intangible asset was determined based on various market factors, including an analysis of estimated sales using a discount rate of 19%. This measure is based on significant Level 3 inputs not observable in the market. Such valuations require significant estimates and assumptions including but not limited to: estimating future cash flows from product sales and developing appropriate discount and probability rates. We believe the estimated fair values of the MuGard Rights are based on reasonable assumptions, however, we cannot provide assurance that the underlying assumptions used to forecast the cash flows will materialize as we estimated and thus, our actual results may vary significantly from the estimated results. | |||||
Commencing from the Acquisition Date, our consolidated financial statements include the assets, liabilities, operating results and cash flows from the acquired product. Revenues related to MuGard sales for 2013 were not material. | |||||
Transaction costs are not included as a component of consideration transferred and are expensed as incurred. We incurred approximately $0.8 million of acquisition-related costs in 2013. These costs were primarily related to professional and legal fees and are included in selling, general and administrative expenses in our consolidated statements of operations for 2013. | |||||
Pro forma results of operations would not be materially different as a result of the acquisition of the MuGard Rights and therefore are not presented. | |||||
Intangible_Assets_Net
Intangible Assets, Net | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Intangible Assets, Net | ' | ||||
Intangible Assets, Net | ' | ||||
H. Intangible Assets, Net | |||||
In June 2013, we acquired the MuGard Rights from Access and recorded $16.9 million to finite-lived intangible assets based on the estimated fair value of the MuGard Rights as of the Acquisition Date. | |||||
We will amortize the MuGard Rights using an economic consumption model over ten years, which represents our best estimate of the period over which we expect the majority of the asset's cash flows to be derived. We believe this is the best approximation of the period over which we will derive the majority of value of the MuGard Rights. We recorded less than $0.1 million of amortization related to the MuGard Rights in cost of product sales in our consolidated statements of operations for 2013 and as a result, our intangible asset related to the MuGard Rights was $16.8 million as of December 31, 2013. | |||||
Intangible assets are reviewed for impairment at least annually and whenever facts or circumstances suggest that the carrying value of these assets may not be recoverable. Our policy is to identify and record impairment losses, if necessary, on intangible assets when events and circumstances indicate that the assets might be impaired and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amounts of those assets. | |||||
We expect future annual amortization expense related to our intangible asset to be as follows (in thousands): | |||||
Period | Estimated | ||||
Amortization | |||||
Expense | |||||
Year Ended December 31, 2014 | 679 | ||||
Year Ended December 31, 2015 | 914 | ||||
Year Ended December 31, 2016 | 1,215 | ||||
Year Ended December 31, 2017 | 1,616 | ||||
Year Ended December 31, 2018 | 2,103 | ||||
Thereafter | 10,317 | ||||
| | | | | |
Total | $ | 16,844 | |||
| | | | | |
| | | | | |
Current_and_LongTerm_Liabiliti
Current and Long-Term Liabilities | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Current and Long-Term Liabilities | ' | |||||||
Current and Long-Term Liabilities | ' | |||||||
I. Current and Long-Term Liabilities | ||||||||
Accrued Expenses | ||||||||
Accrued expenses consisted of the following as of December 31, 2013 and 2012 (in thousands): | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
Clinical, manufacturing and regulatory consulting fees and expenses | $ | 7,834 | $ | 7,737 | ||||
Salaries, bonuses, and other compensation | 5,419 | 5,236 | ||||||
Commercial rebates, fees and returns | 4,839 | 3,448 | ||||||
Professional, license, and other fees and expenses | 1,932 | 1,719 | ||||||
Commercial consulting fees and expenses | 1,301 | 815 | ||||||
Short-term contingent consideration | 941 | — | ||||||
Restructuring expense | — | 1,383 | ||||||
| | | | | | | | |
Total accrued expenses | $ | 22,266 | $ | 20,338 | ||||
| | | | | | | | |
| | | | | | | | |
Deferred Revenues | ||||||||
Deferred revenues consisted of the following as of December 31, 2013 and 2012 (in thousands): | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
Short-term deferred revenues: | ||||||||
Takeda | $ | 8,226 | $ | 8,854 | ||||
Other short-term deferred revenues | — | 250 | ||||||
| | | | | | | | |
Total | $ | 8,226 | $ | 9,104 | ||||
| | | | | | | | |
| | | | | | | | |
Long-term deferred revenues: | ||||||||
Takeda | $ | 43,534 | $ | 49,350 | ||||
3SBio | 1,000 | 1,000 | ||||||
| | | | | | | | |
Total | $ | 44,534 | $ | 50,350 | ||||
| | | | | | | | |
| | | | | | | | |
Our deferred revenues related to Takeda are recorded in our consolidated balance sheets and include the following as of December 31, 2013: | ||||||||
• | ||||||||
$49.3 million related to the amortization of upfront payments and milestone payments recognized under the Amended Takeda Agreement. Included in the $49.3 million was the amortization of upfront payments we received from Takeda in 2010, which we are recognizing on a straight-line basis over a period of 10 years, which represents the current patent life of Feraheme/Rienso and our best estimate of the period over which we will substantially perform our obligations. In addition, included in the $49.3 million was the amortization of an aggregate of $18.0 million in milestone payments we received from Takeda in 2012 associated with the commercial launches of Feraheme/Rienso in Canada and the EU, which we are amortizing over the original life of the Takeda Agreement. During 2013 and 2012, we recorded $7.9 million and $11.1 million to license fee and other collaboration revenues in our consolidated statement of operations; and | ||||||||
• | ||||||||
$2.4 million related to product shipped to Takeda but not yet sold through to Takeda's customers, which are included in our consolidated balance sheet. | ||||||||
In consideration of the grant of the license to 3SBio Inc., or 3SBio, in 2008, we received an upfront payment of $1.0 million, the recognition of which has been deferred. In late January 2014, we mutually terminated the agreement with 3SBio, effective immediately, due to the fact that, despite the best efforts of the parties, regulatory approval in China could not be obtained within the agreed upon time period. | ||||||||
Other Long-Term Liabilities | ||||||||
Other long-term liabilities at both December 31, 2013 and 2012 consisted solely of deferred rent related to the lease of our principal executive offices in Lexington, Massachusetts and after September 2013, Waltham, Massachusetts. | ||||||||
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Income Taxes | ' | ||||||||||
Income Taxes | ' | ||||||||||
J. Income Taxes | |||||||||||
For the years ended December 31, 2012 and 2011, we recognized $0.9 million and $1.2 million in current federal income tax benefits, respectively. We did not recognize any current federal income tax benefit for the year ended December 31, 2013. The 2012 and 2011 federal income tax benefits were the result of the recognition of corresponding income tax expense associated with the decrease in the unrealized loss on our investments, primarily related to our auction rate securities, which we carried at fair market value during 2012 and 2011. The corresponding income tax expense was recorded in other comprehensive loss. Due to the uncertainty surrounding the realization of favorable tax attributes in future tax returns, we have recorded a full valuation allowance against our otherwise recognizable net deferred tax assets. We did not recognize any federal income tax benefits in 2013. | |||||||||||
The reconciliation of the statutory U.S. federal income tax rate to our effective income tax rate is as follows: | |||||||||||
Years Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Statutory U.S. federal tax rate | (34.0 | )% | (34.0 | )% | (34.0 | )% | |||||
State taxes, net of federal benefit | 2.4 | % | 4.2 | % | (3.4 | )% | |||||
Equity-based compensation expense | 9.4 | % | 42.4 | % | 2.4 | % | |||||
Permanent items, net | 5.3 | % | 1.2 | % | 0.4 | % | |||||
Tax credits | 0.5 | % | 0.8 | % | (1.6 | )% | |||||
Valuation allowance | 16.4 | % | (19.5 | )% | 34.7 | % | |||||
| | | | | | | | | | | |
Total tax (benefit) expense | 0 | % | (4.9 | )% | (1.5 | )% | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Deferred tax assets and deferred tax liabilities are recognized based on temporary differences between the financial reporting and tax basis of assets and liabilities using future enacted rates. A valuation allowance is recorded against deferred tax assets if it is more likely than not that some or all of the deferred tax assets will not be realized. The components of our deferred tax assets and liabilities are as follows (in thousands): | |||||||||||
December 31, | |||||||||||
2013 | 2012 | ||||||||||
Assets | |||||||||||
Net operating loss carryforwards | $ | 85,269 | $ | 75,740 | |||||||
Tax credit carryforwards | 12,396 | 12,403 | |||||||||
Deferred revenue | 20,368 | 22,315 | |||||||||
Equity-based compensation expense | 4,176 | 3,681 | |||||||||
Capitalized research & development | 39,214 | 45,137 | |||||||||
Intangibles | 680 | ||||||||||
Other | 4,371 | 4,239 | |||||||||
Property and Equipment Depreciation | — | 1,393 | |||||||||
Liabilities | |||||||||||
Property, Plant, and Equipment Depreciation | (58 | ) | — | ||||||||
| | | | | | | | ||||
166,416 | 164,908 | ||||||||||
Valuation allowance | (166,416 | ) | (164,908 | ) | |||||||
| | | | | | | | ||||
Net deferred taxes | $ | — | $ | — | |||||||
| | | | | | | | ||||
Due to the uncertainty surrounding the realization of favorable tax attributes in future tax returns, we have recorded a full valuation allowance against our otherwise recognizable net deferred tax assets. The valuation allowance increased by approximately $1.5 million for the year ended December 31, 2013 primarily due to an increase in net operating loss, or NOL, carryforwards, partially offset by a decrease in capitalized research and development expense, deferred revenue, and property and equipment. The valuation allowance decreased by approximately $2.8 million for the year ended December 31, 2012 primarily due to an increase in our net operating loss, or NOL, carryforwards, capitalized research and development expense, and equity-based compensation expense. The valuation allowance increased by approximately $26.8 million for the year ended December 31, 2011 primarily due to an increase in our NOL carryforwards, capitalized research and development expense, and equity-based compensation expense. | |||||||||||
At December 31, 2013, we had federal NOL carryforwards of approximately $234.5 million and state NOL carryforwards of up to $118.9 million. We also had federal capital loss carryforwards of $3.3 million to offset future capital gains and an additional $24.6 million and $4.8 million of federal and state NOLs, respectively, not reflected above which were attributable to deductions from the exercise of equity awards. The benefit from these deductions will be recorded as a credit to additional paid-in capital if and when realized through a reduction of taxes paid in cash. Our federal NOLs and our most significant state NOLs expire at various dates through 2033. Our capital loss carryforwards will expire through 2017. In addition, we have federal and state tax credits of approximately $9.3 million and $4.6 million, respectively, to offset future tax liabilities. Our tax credits will expire periodically through 2032 if not utilized. | |||||||||||
Utilization of our NOLs and research and development, or R&D, credit carryforwards may be subject to a substantial annual limitation due to ownership change limitations that have occurred previously or that could occur in the future in accordance with Section 382 of the Internal Revenue Code of 1986, or Section 382, as well as similar state provisions. These ownership changes may limit the amount of NOL and R&D credit carryforwards that can be utilized annually to offset future taxable income and taxes, respectively. In general, an ownership change as defined by Section 382 results from transactions increasing the ownership of certain shareholders or public groups in the stock of a corporation by more than 50 percentage points over a three-year period. Since our formation, we have raised capital through the issuance of capital stock on several occasions. These financings, combined with the purchasing shareholders' subsequent disposition of those shares, may have resulted in a change of control as defined by Section 382 or could result in a change of control in the future upon subsequent disposition. In May 2011, we conducted an analysis under Section 382 to determine if historical changes in ownership through December 31, 2010 would limit or otherwise restrict our ability to utilize these NOL and R&D credit carryforwards. As a result of this analysis, we do not believe there are any significant limitations on our ability to utilize these carryforwards. However, changes in ownership after December 31, 2010 could affect the limitation in future years. Any limitation may result in expiration of a portion of the NOL or R&D credit carryforwards before utilization. | |||||||||||
At December 31, 2013 and 2012, we had no unrecognized tax benefits. We have not, as yet, conducted a study of our R&D credit carryforwards. Such a study could result in an adjustment to our R&D credit carryforwards; however, until a study is completed and any adjustment is known, no amounts are being presented as an uncertain tax position. A full valuation allowance has been provided against our R&D credits and, if an adjustment is required, this adjustment would be offset by an adjustment to the valuation allowance. Thus, there would be no impact to the consolidated balance sheet or statement of operations if an adjustment were required. | |||||||||||
We would recognize both accrued interest and penalties related to unrecognized benefits in income tax expense. We have not recorded any interest or penalties on any unrecognized benefits since inception. | |||||||||||
The statute of limitations for assessment by the Internal Revenue Service, or the IRS, and state tax authorities is closed for tax years prior to December 31, 2010, although carryforward attributes that were generated prior to tax year 2010 may still be adjusted upon examination by the IRS or state tax authorities if they either have been or will be used in a future period. We file income tax returns in the U.S. federal and various state jurisdictions. There are currently no federal or state audits in progress. | |||||||||||
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Loss | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Accumulated Other Comprehensive Loss | ' | |||||||
Accumulated Other Comprehensive Loss | ' | |||||||
K. Accumulated Other Comprehensive Loss | ||||||||
In February 2013, the Financial Accounting Standards Board issued an amendment to the accounting guidance for the reporting of amounts reclassified out of accumulated other comprehensive loss, or AOCI. The amendment expands the existing disclosure by requiring entities to present information about significant items reclassified out of AOCI by component. In addition, an entity is required to provide information about the effects on net income of significant amounts reclassified out of each component of AOCI to net income either on the face of the income statement or as a separate disclosure in the notes of the financial statements. The amendment is effective for annual or interim reporting periods beginning after December 31, 2012. The adoption of this accounting pronouncement did not have a material impact on our financial statement disclosures. | ||||||||
The changes in AOCI, net of tax, for 2013 and 2012 consisted of the following (in thousands): | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
Beginning Balance | $ | (3,247 | ) | $ | (4,842 | ) | ||
Other comprehensive income (loss) before reclassifications | (268 | ) | 129 | |||||
Gain (loss) reclassified from other accumulated comprehensive loss | 24 | 1,466 | ||||||
| | | | | | | | |
Ending Balance | $ | (3,491 | ) | $ | (3,247 | ) | ||
| | | | | | | | |
| | | | | | | | |
The amounts reclassified from other comprehensive loss for 2013 primarily represented realized gains on investments, which are included in our consolidated statement of operations under "Gains (losses) on investments, net." | ||||||||
EquityBased_Compensation
Equity-Based Compensation | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||
Equity-Based Compensation | ' | |||||||||||||||||||
Equity-Based Compensation | ' | |||||||||||||||||||
L. Equity-Based Compensation | ||||||||||||||||||||
We currently maintain two equity compensation plans, including our Third Amended and Restated 2007 Equity Incentive Plan, or the 2007 Plan, and our Amended and Restated 2000 Stock Plan, or the 2000 Plan. During 2012 and 2013, we also granted equity to certain newly hired executive officers through inducement grants outside of these plans. | ||||||||||||||||||||
Third Amended and Restated 2007 Equity Incentive Plan | ||||||||||||||||||||
Our 2007 Plan was originally approved by our stockholders in November 2007. In each of May 2009, May 2010, and May 2013 our stockholders approved proposals to amend and restate our 2007 Plan to, among other things, increase the number of shares authorized for issuance thereunder by 600,000, 800,000 and 1,100,000 shares, respectively. In addition, the amendment approved by our stockholders in May 2009 replaced a limitation on the number of shares in the aggregate which could be issued under the 2007 Plan with respect to restricted stock units, restricted stock, stock and similar equity interests in our company with a fungible share reserve whereby the number of shares available for issuance under the 2007 Plan is reduced by one share of our common stock issued pursuant to an option or stock appreciation right and by 1.5 shares for each share of our common stock issued pursuant to a restricted stock unit award or other similar equity-based award. | ||||||||||||||||||||
The 2007 Plan provides for the grant of stock options, restricted stock units, restricted stock, stock, and other equity interests in our company to employees, officers, directors, consultants, and advisors of our company and our subsidiaries. We generally issue common stock from previously authorized but unissued shares to satisfy option exercises and restricted stock awards. The terms and conditions of each such grant, including, but not limited to, the number of shares, the exercise price, term of the option/award and vesting requirements, are determined by our Board of Directors, or Board, or the Compensation Committee of our Board. Our Board may award stock options in the form of nonqualified stock options or incentive stock options, or ISOs. Stock options may be granted at an exercise price no less than fair market value of a share of our common stock on the date of grant, as determined by our Board or the Compensation Committee of our Board, subject to certain limitations. | ||||||||||||||||||||
As of December 31, 2013, we have granted options and restricted stock units covering 6,289,350 shares of common stock under our 2007 Plan, of which 2,558,113 stock options and 626,348 restricted stock units have expired or terminated, and of which 139,146 options have been exercised and 475,614 shares of common stock have been issued pursuant to restricted stock units that became fully vested. The number of options and restricted stock units outstanding under this plan as of December 31, 2013, was 2,199,735 and 290,394, respectively. The remaining number of shares available for future grants as of December 31, 2013 was 2,024,621, not including shares subject to outstanding awards under the 2000 Plan, which will be added to the total number of shares available for issuance under the 2007 Plan to the extent that such awards expire or terminate for any reason prior to exercise. All outstanding stock options granted under our 2007 Plan have an exercise price equal to the closing price of a share of our common stock on the grant date and have either a seven or ten-year term. | ||||||||||||||||||||
Amended and Restated 2000 Stock Plan | ||||||||||||||||||||
Our 2000 Plan provided for the grant of options and other equity-based awards to our directors, officers, employees and consultants. The terms and conditions of each such grant, including, but not limited to, the number of shares, the exercise price, term of the option/award and vesting requirements, were determined by our Board or the Compensation Committee of our Board. As of December 31, 2013, we have granted stock options and restricted stock units covering 2,182,700 shares of common stock under the 2000 Plan, of which 984,339 stock options and 1,500 restricted stock units have expired or terminated, and of which 1,049,420 stock options have been exercised and 42,500 shares of common stock have been issued pursuant to restricted stock units that became fully vested. The remaining number of shares underlying outstanding stock options which were issued pursuant to our 2000 Plan as of December 31, 2013, was 104,941. There were no remaining restricted stock units which were issued pursuant to our 2000 Plan as of December 31, 2013. All outstanding stock options granted under the 2000 Plan have an exercise price equal to the closing price of our common stock on the grant date and have a ten year term. In November 2007, the 2000 Plan was succeeded by our 2007 Plan and, accordingly, no further grants may be made under this plan. Any shares that remained available for issuance under the 2000 Plan as of the date of adoption of the 2007 Plan are included in the number of shares that may be issued under the 2007 Plan. Any shares subject to outstanding awards granted under the 2000 Plan that expire or terminate for any reason prior to exercise will be added to the total number of shares available for issuance under the 2007 Plan. | ||||||||||||||||||||
Other Equity Compensation Grants | ||||||||||||||||||||
In February 2013, we granted restricted stock units to certain members of our senior management covering a maximum of 82,500 shares of common stock, which are subject to a performance condition tied to the price of our common stock. These restricted stock units vest, if at all, at the end of the three-year period ending December 31, 2015 based on the achievement of a minimum, target or maximum stock price range. In the event that the minimum stock price range is not achieved at the measurement date, none of the restricted stock units will vest. The maximum total fair value of these restricted stock units is $0.7 million, which are being recognized to expense over a period of three years from the date of grant, net of any estimated and actual forfeitures. | ||||||||||||||||||||
During 2013 and 2012, our Board granted options to purchase 270,000 and 300,000 shares of our common stock, respectively, to certain members of our senior management to induce them to accept employment with us. These options were granted at an exercise price equal to the fair market value of a share of our common stock on the respective grant dates. The options will be exercisable in four equal annual installments beginning on the first anniversary of the respective grant dates. Of the 270,000 options granted in 2013, 45,000 were forfeited during 2013. In addition, during 2013 and 2012, our Board granted 115,000 and 100,000 restricted stock units, respectively, to certain members of our senior management to induce them to accept employment with us. These grants will vest in four equal annual installments beginning on the first anniversary of the respective grant dates. Of the 115,000 restricted stock units granted in 2013, 15,000 were forfeited during 2013. The foregoing grants were made pursuant to inducement grants outside of our 2007 Plan as permitted under the NASDAQ Global Market rules. We assessed the terms of these awards and determined there was no possibility that we would have to settle these awards in cash and therefore, equity accounting was applied. These shares were registered in August 2013. | ||||||||||||||||||||
Equity-based compensation expense | ||||||||||||||||||||
Equity-based compensation expense for 2013, 2012 and 2011 consisted of the following (in thousands): | ||||||||||||||||||||
Years Ended December 31, | ||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||
Cost of product sales | $ | 121 | $ | 225 | $ | 616 | ||||||||||||||
Research and development | 2,149 | 1,994 | 1,874 | |||||||||||||||||
Selling, general and administrative | 5,734 | 4,805 | 7,548 | |||||||||||||||||
| | | | | | | | | | | ||||||||||
Total equity-based compensation expense | $ | 8,004 | $ | 7,024 | $ | 10,038 | ||||||||||||||
| | | | | | | | | | | ||||||||||
| | | | | | | | | | | ||||||||||
We reduce the compensation expense being recognized to account for estimated forfeitures, which we estimate based primarily on historical experience, adjusted for unusual events such as the corporate restructurings in 2012 and 2011, which resulted in higher than expected turnover and forfeitures in those years. Under current accounting guidance, forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. | ||||||||||||||||||||
Due to the uncertainty surrounding the realization of the favorable tax attributes in future tax returns associated with operating losses we incurred in the past, we have not recognized any excess tax benefits from the exercise of options. Accordingly, there was no impact recorded in cash flows from financing activities or cash flows from operating activities as reported in the accompanying consolidated statements of cash flows. | ||||||||||||||||||||
The following table summarizes the weighted average assumptions we utilized for purposes of valuing grants of options to our employees and non-employee directors: | ||||||||||||||||||||
Years Ended December 31, | ||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||
Employees | Non-Employee | Employees | Non-Employee | Employees | Non-Employee | |||||||||||||||
Directors | Directors | Directors | ||||||||||||||||||
Risk free interest rate (%) | 0.95 | 0.85 | 0.66 | 0.68 | 1.67 | 1.36 | ||||||||||||||
Expected volatility (%) | 59 | 46 | 57 | 56 | 51 | 51 | ||||||||||||||
Expected option term (years) | 5 | 4 | 4.66 | 4 | 5.5 | 4 | ||||||||||||||
Dividend yield | none | none | none | none | none | none | ||||||||||||||
Risk free interest rates utilized are based upon published U.S. Treasury yields at the date of the grant for the expected option term. During 2013, we estimated our expected stock price volatility by basing it on the historical volatility of our own common stock price over the prior period equivalent to our expected option term to better reflect expected future volatility. During 2012 and 2011, we estimated our expected stock price volatility by basing it on a blend of our own common stock price and the historical volatility of other similar companies over the prior period equivalent to our expected option term to better reflect expected future volatility. To compute the expected option term, we analyze historical exercise experience as well as expected stock option exercise patterns. | ||||||||||||||||||||
The following table summarizes details regarding stock options granted under our equity incentive plans for the year ended December 31, 2013: | ||||||||||||||||||||
December 31, 2013 | ||||||||||||||||||||
Options | Weighted Average | Weighted | Aggregate Intrinsic | |||||||||||||||||
Exercise Price | Average | Value ($ in | ||||||||||||||||||
Remaining | millions) | |||||||||||||||||||
Contractual | ||||||||||||||||||||
Term | ||||||||||||||||||||
Outstanding at beginning of year | 2,190,073 | $ | 23.07 | |||||||||||||||||
Granted | 1,120,050 | 18.73 | ||||||||||||||||||
Exercised | (123,658 | ) | 15.02 | |||||||||||||||||
Expired and/or forfeited | (366,789 | ) | 26.06 | |||||||||||||||||
| | | | | | | | | | | | | | |||||||
Outstanding at end of year | 2,819,676 | $ | 21.31 | 7.1 | $ | 17.5 | ||||||||||||||
| | | | | | | | | | | | | | |||||||
| | | | | | | | | | | | | | |||||||
Outstanding at end of year—vested and unvested expected to vest | 2,644,475 | $ | 21.51 | 7.1 | $ | 16.4 | ||||||||||||||
| | | | | | | | | | | | | | |||||||
| | | | | | | | | | | | | | |||||||
Exercisable at end of year | 1,003,804 | $ | 28.75 | 5.2 | $ | 4 | ||||||||||||||
| | | | | | | | | | | | | | |||||||
| | | | | | | | | | | | | | |||||||
The weighted average grant date fair value of stock options granted during 2013, 2012 and 2011 was $8.60, $6.90 and $7.40, respectively. A total of 521,734 stock options vested during 2013. The total grant date fair value of options that vested during 2013, 2012 and 2011 was $4.5 million, $5.5 million and $9.8 million, respectively. The aggregate intrinsic value of options exercised during 2013, 2012 and 2011, excluding purchases made pursuant to our employee stock purchase plans, measured as of the exercise date, was approximately $1.0 million, $0.1 million and $0.1 million, respectively. The intrinsic value of a stock option is the amount by which the fair market value of the underlying stock on a specific date exceeds the exercise price of the common stock option. | ||||||||||||||||||||
In 2013, we issued an aggregate of 270,525 restricted stock units to our employees and directors. In general, these grants vest on an annual basis over a four year period. The estimated fair value of restricted stock units granted was determined at the grant date based upon the quoted market price per share on the date of the grant. | ||||||||||||||||||||
The following table summarizes details regarding restricted stock units granted under our equity incentive plans for the year ended December 31, 2013: | ||||||||||||||||||||
December 31, 2013 | ||||||||||||||||||||
Unvested | Weighted Average | |||||||||||||||||||
Restricted | Grant Date | |||||||||||||||||||
Stock Units | Fair Value | |||||||||||||||||||
Outstanding at beginning of year | 373,676 | $ | 17.02 | |||||||||||||||||
Granted | 270,525 | 16.31 | ||||||||||||||||||
Vested | (152,889 | ) | 18.44 | |||||||||||||||||
Forfeited | (25,918 | ) | 20.77 | |||||||||||||||||
| | | | | | | | |||||||||||||
Outstanding at end of year | 465,394 | $ | 17.28 | |||||||||||||||||
| | | | | | | | |||||||||||||
| | | | | | | | |||||||||||||
Outstanding at end of year and expected to vest | 382,897 | $ | 17.26 | |||||||||||||||||
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| | | | | | | | |||||||||||||
The weighted average grant date fair value of restricted stock units granted during 2013, 2012 and 2011 was $16.31, $15.64 and $15.99, respectively. The total grant date fair of restricted stock units that vested during 2013, 2012 and 2011 was $2.8 million, $3.5 million and $3.1 million, respectively. | ||||||||||||||||||||
At December 31, 2013, the amount of unrecorded equity-based compensation expense for both option and restricted stock unit awards, net of forfeitures, attributable to future periods was approximately $16.0 million. Of this amount, $11.5 million was associated with stock options and is expected to be amortized on a straight-line basis to expense over a weighted average period of approximately 2.7 years, and $4.5 million was associated with restricted stock units and is expected to be amortized to on a straight-line basis to expense over a weighted average period of approximately 2.1 years. Such amounts will be amortized primarily to research and development or selling, general and administrative expense. These future estimates are subject to change based upon a variety of future events, which include, but are not limited to, changes in estimated forfeiture rates, employee turnover, and the issuance of new stock options and other equity-based awards. | ||||||||||||||||||||
Employee_Savings_Plan
Employee Savings Plan | 12 Months Ended |
Dec. 31, 2013 | |
Employee Savings Plan | ' |
Employee Savings Plan | ' |
M. Employee Savings Plan | |
We provide a 401(k) Plan to our employees by which they may defer compensation for income tax purposes under Section 401(k) of the Internal Revenue Code. Each employee may elect to defer a percentage of his or her salary up to a specified maximum. Our 401(k) Plan provides, among other things, for a company contribution of 3% of each employee's combined salary and certain other compensation for the plan year. Salary deferred by employees and contributions by us to the 401(k) Plan are not taxable to employees until withdrawn from the 401(k) Plan and contributions are deductible by us when made. The amount of our company contribution for the 401(k) Plan was $0.7 million, $0.8 million, and $1.0 million for 2013, 2012 and 2011, respectively. | |
Stockholders_Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2013 | |
Stockholders' Equity | ' |
Stockholders' Equity | ' |
N. Stockholders' Equity | |
Our certificate of incorporation authorizes our Board to issue preferred stock from time to time in one or more series. The rights, preferences, restrictions, qualifications and limitations of such stock are determined by our Board. In September 2009, our Board adopted a shareholder rights plan, or Rights Plan. The terms of the Rights Plan provide for a dividend distribution of one preferred share purchase right, or Right, for each outstanding share of our common stock, par value $0.01 per share, to shareholders of record as of September 17, 2009, and for one such Right to attach to each newly issued share of common stock thereafter. Each Right entitles shareholders to purchase one one-thousandth of a share of Series A Junior Participating Preferred Stock for each outstanding share of our common stock. The Rights issued pursuant to our Rights Plan become exercisable generally upon the earlier of 10 days after a person or group, or an Acquiring Person, acquires 20% or more of our outstanding common stock or 10 business days after the announcement by a person or group of an intention to acquire 20% of our outstanding common stock via tender offer or similar transaction. In that event, each holder of a Right, other than the Acquiring Person, would for a period of 60 days be entitled to purchase, at the exercise price of the Right, such number of shares of our common stock having a current value of twice the exercise price of the Right. Once a person becomes an Acquiring Person, until such Acquiring Person acquires 50% or more of our common stock, our Board can exchange the Rights, in part or in whole, for our common stock at an exchange ratio of one share of common stock per Right. If we are acquired in a merger or other business combination transaction, each holder of a Right, other than the Acquiring Person, would then be entitled to purchase, at the exercise price of the Right, such number of shares of the acquiring company's common stock having a current value of twice the exercise price of the Right. The Board may redeem the Rights or terminate the Rights Plan at any time before a person or group becomes an Acquiring Person. The Rights will expire on September 17, 2019 unless the Rights are earlier redeemed or exchanged by us. | |
Business_Segments
Business Segments | 12 Months Ended |
Dec. 31, 2013 | |
Business Segments | ' |
Business Segments | ' |
O. Business Segments | |
We have determined that we conduct our operations in one business segment: the manufacture, development and commercialization of products for use in treating human diseases. Long-lived assets consist entirely of property and equipment and are located in the U.S. for all periods presented. | |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Commitments and Contingencies | ' | ||||
Commitments and Contingencies | ' | ||||
P. Commitments and Contingencies | |||||
Commitments | |||||
Operating and Facility Lease Obligations | |||||
We have entered into certain operating leases, including certain office equipment which expire through 2014. Expense associated with these operating leases, including previous leases of certain automobiles, amounted to approximately $(0.3) million, $0.9 million, and $0.8 million for 2013, 2012 and 2011, respectively. The net credit for operating lease expense in 2013 is due to the excess of the sales value of certain automobiles we previously leased over the contracted value in connection with the termination of the automobile leases and the subsequent sales of the automobiles by the leasing companies. Future minimum lease payments associated with all non-cancellable equipment, service and lease agreements, excluding facility-related leases are approximately $0.1 million for 2014. | |||||
In June 2013, we entered into a lease agreement with BP Bay Colony LLC, or the Landlord, for the lease of certain real property located at 1100 Winter Street, Waltham, Massachusetts, or the Premises, for use as our principal executive offices. Beginning in September 2013, the initial term of the lease is five years and two months with one five-year extension term at our option. During the extension period, the base rent will be an amount agreed upon by us and the Landlord. In addition to base rent, we are also required to pay a proportionate share of the Landlord's operating costs. The lease requires us to pay base rent during the initial term as follows (in thousands): | |||||
Period | Minimum Lease | ||||
Payments | |||||
Year Ended December 31, 2014 | $ | 1,128 | |||
Year Ended December 31, 2015 | 1,128 | ||||
Year Ended December 31, 2016 | 1,128 | ||||
Year Ended December 31, 2017 | 1,128 | ||||
Thereafter | 1,034 | ||||
| | | | | |
Total | $ | 5,546 | |||
| | | | | |
| | | | | |
The Landlord agreed to pay for certain agreed-upon improvements and we agreed to pay for any increased costs due to changes by us to the agreed-upon plans. We record all tenant improvements paid by us as leasehold improvements and amortize these improvements over the shorter of the estimated useful life of the improvement or the remaining life of the initial lease term. Amortization of leasehold improvements is included in depreciation expense. | |||||
In addition, in connection with our new facility lease, in June 2013 we delivered to the Landlord a security deposit of $0.4 million in the form of an irrevocable letter of credit. This security deposit will be reduced to $0.3 million on the second anniversary of the date the lease commenced. The cash securing this letter of credit is classified on our balance sheet as of December 31, 2013 as a long-term asset and is restricted in its use. | |||||
In June 2013, we also entered into an Assignment and Assumption of Lease, or the Assignment Agreement, with Shire Human Genetic Therapies, Inc., or Shire, effecting the assignment to Shire of the right to occupy our former office space located at 100 Hayden Avenue, Lexington, Massachusetts, or the Prior Space. Under the Assignment Agreement, the assignment to Shire became effective on September 21, 2013, the date of our departure from the Prior Space, and Shire assumed all of our obligations as the tenant of the Prior Space. The Assignment Agreement also provided for the conveyance of furniture and other personal property by us to Shire. | |||||
Facility-related rent expense was $1.5 million, $1.7 million and $1.7 million for 2013, 2012, and 2011. | |||||
Purchase Commitments | |||||
During 2013, we entered into various agreements with third parties for which we had remaining purchase commitments of approximately $6.8 million as of December 31, 2013. These agreements principally related to certain purchase orders for the production of Feraheme/Rienso, certain outsourced commercial activities, manufacturing commitments, our information technology infrastructure, and other operational activities. | |||||
Other Funding Commitments | |||||
As of December 31, 2013, we had several ongoing clinical studies in various clinical trial stages. Our most significant clinical trial expenditures were to clinical research organizations, or CROs. The contracts with CROs are generally cancellable, with notice, at our option. We have recorded accrued expenses in our consolidated balance sheet of approximately $0.3 million representing expenses incurred with these organizations as of December 31, 2013, net of any amounts prepaid to these CROs. As a result of our cancellation rights, we have not included these CRO contracts in the contractual obligations table above. | |||||
Severance Arrangements | |||||
We have entered into employment agreements or other arrangements with most of our executive officers and certain other employees, which provide for salary continuation payments and, in certain instances, the acceleration of the vesting of certain equity awards to such individuals in the event that the individual is terminated other than for cause, as defined in the applicable employment agreements or arrangements. | |||||
Indemnification Obligations | |||||
As permitted under Delaware law, pursuant to our certificate of incorporation, by-laws and agreements with all of our current directors, executive officers, and certain of our employees, we are obligated to indemnify such individuals for certain events or occurrences while the officer, director or employee is, or was, serving at our request in such capacity. The maximum potential amount of future payments we could be required to make under these indemnification obligations is not capped. Our director and officer insurance policy limits our initial exposure to $1.0 million and our policy provides significant coverage. As a result, we believe the estimated fair value of these indemnification obligations is likely to be immaterial. | |||||
We are also a party to a number of other agreements entered into in the ordinary course of business, which contain typical provisions and which obligate us to indemnify the other parties to such agreements upon the occurrence of certain events. Such indemnification obligations are usually in effect from the date of execution of the applicable agreement for a period equal to the applicable statute of limitations. Our aggregate maximum potential future liability under such indemnification provisions is uncertain. Except for expenses we incurred related to the ongoing class action lawsuit filed against us in March 2010, we have not incurred any expenses as a result of such indemnification provisions. Accordingly, we have determined that the estimated aggregate fair value of our potential liabilities under such indemnification provisions is not significant, and we have not recorded any liability related to such indemnification. | |||||
Contingencies | |||||
Legal Proceedings | |||||
We accrue a liability for legal contingencies when we believe that it is both probable that a liability has been incurred and that we can reasonably estimate the amount of the loss. We review these accruals and adjust them to reflect ongoing negotiations, settlements, rulings, advice of legal counsel and other relevant information. To the extent new information is obtained and our views on the probable outcomes of claims, suits, assessments, investigations or legal proceedings change, changes in our accrued liabilities would be recorded in the period in which such determination is made. For the matters referenced below, the liability is not probable or the amount cannot be reasonably estimated and, therefore, accruals have not been made. In addition, in accordance with the relevant authoritative guidance, for any matters in which the likelihood of material loss is at least reasonably possible, we will provide disclosure of the possible loss or range of loss. If a reasonable estimate cannot be made, however, we will provide disclosure to that effect. | |||||
A purported class action complaint was originally filed on March 18, 2010 in the U.S. District Court for the District of Massachusetts, entitled Silverstrand Investments et. al. v. AMAG Pharm., Inc., et. al., Civil Action No. 1:10-CV-10470-NMG, and was amended on September 15, 2010 and on December 17, 2010. The second amended complaint, or SAC, filed on December 17, 2010 alleged that we and our former President and Chief Executive Officer, former Chief Financial Officer, the then-members of our Board, and certain underwriters in our January 2010 offering of common stock violated certain federal securities laws, specifically Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended, and that our former President and Chief Executive Officer and former Chief Financial Officer violated Section 15 of such Act, respectively, by making certain alleged omissions in a registration statement filed in January 2010. The plaintiffs sought unspecified damages on behalf of a purported class of purchasers of our common stock pursuant to our common stock offering on or about January 21, 2010. On August 11 and 15, 2011, respectively, the District Court issued an Opinion and Order dismissing the SAC with prejudice for failure to state a claim upon which relief could be granted. On September 14, 2011, the plaintiffs filed a Notice of Appeal to the U.S. Court of Appeals for the First Circuit, or the Court of Appeals. The Court of Appeals heard oral argument on May 11, 2012. On February 4, 2013, the Court of Appeals affirmed in part and reversed in part the District Court's Opinion and Order and remanded the case to the District Court. On February 19, 2013, we filed a Petition for Panel Rehearing and Rehearing En Banc, which was denied on March 15, 2013. On March 22, 2013, we filed a Motion to Stay the Mandate remanding the case to the District Court pending review by the U.S. Supreme Court of the Court of Appeals' February 4, 2013 decision. The Court of Appeals granted the Motion to Stay the Mandate on April 8, 2013. On June 13, 2013, we filed a Petition for a Writ of Certiorari, or the Petition, with the U.S. Supreme Court seeking review of the Court of Appeal's decision and to have that decision overturned. On October 7, 2013 the U.S. Supreme Court denied our Petition, resulting in the case's return to the District Court for further proceedings relative to the SAC's surviving claims. On November 6, 2013, we filed a renewed Motion to Dismiss the SAC's surviving claims. On December 6, 2013, the plaintiffs filed a brief in opposition to our Motion to Dismiss and we filed a reply brief in support of our Motion on December 27, 2013. The plaintiffs are seeking leave of court to file a sur-reply in further opposition to our Motion to Dismiss. No hearing on the Motion to Dismiss is currently scheduled. We are currently unable to predict the outcome or reasonably estimate the range of potential loss associated with this matter, if any, and have therefore not recorded any potential estimated liability as we do not believe that such a liability is probable nor do we believe that a range of loss is currently estimable. | |||||
In July 2010, Sandoz GmbH, or Sandoz, filed with the European Patent Office, or the EPO, an opposition to a previously issued patent which covers ferumoxytol in EU jurisdictions. In October 2012, at an oral hearing, the Opposition Division of the EPO revoked this patent. In December 2012, our notice of appeal of that decision was recorded with the EPO, which also suspended the revocation of our patent. On May 13, 2013, we filed a statement of grounds of appeal and on September 27, 2013, Sandoz filed a response to that statement. We will continue to defend the validity of this patent throughout the appeals process, which we expect to take two to three years. However, in the event that we do not experience a successful outcome from the appeals process, under EU regulations ferumoxytol would still be entitled to eight years of data protection and ten years of market exclusivity from the date of approval, which we believe would create barriers to entry for any generic version of ferumoxytol into the EU market until sometime between 2020 and 2022. This decision had no impact on our revenues for the year ended December 31, 2013. However, any future unfavorable outcome in this matter could negatively affect the magnitude and timing of future revenues, including royalties and milestone payments we may receive from Takeda pursuant to our collaboration agreement with Takeda. We do not expect to incur any related liability regardless of the outcome of the appeal and therefore have not recorded any liability as of December 31, 2013. We continue to believe the patent is valid and intend to vigorously appeal the decision. | |||||
We may periodically become subject to other legal proceedings and claims arising in connection with ongoing business activities, including claims or disputes related to patents that have been issued or that are pending in the field of research on which we are focused. Other than the above actions, we are not aware of any material claims against us at December 31, 2013. We expense legal costs as they are incurred. | |||||
Collaborative_Agreements
Collaborative Agreements | 12 Months Ended |
Dec. 31, 2013 | |
Collaborative Agreements | ' |
Collaborative Agreements | ' |
Q. Collaborative Agreements | |
Our commercial strategy includes the formation of collaborations with other pharmaceutical companies to facilitate the sale and distribution of Feraheme/Rienso, primarily outside of the U.S., as well as expanding our portfolio through the in-license or purchase of additional specialty pharmaceutical products. As of December 31, 2013, we were a party to the following collaborations: | |
Takeda | |
In March 2010, we entered into the Takeda Agreement with Takeda under which we granted exclusive rights to Takeda to develop and commercialize Feraheme/Rienso as a therapeutic agent in Europe, certain Asia-Pacific countries (excluding Japan, China and Taiwan), the Commonwealth of Independent States, Canada, India and Turkey. In June 2012, we entered into an amendment to the Takeda Agreement, or the Amended Takeda Agreement, which removed the Commonwealth of Independent States from the territories under which Takeda has the exclusive rights to develop and commercialize Feraheme/Rienso. In addition, the Amended Takeda Agreement modified the timing and pricing arrangements for a supply agreement to be entered into between us and Takeda, and which was entered into in February 2014, the terms related to primary and secondary manufacturing for drug substance and drug product, certain patent related provisions, and the re-allocation of certain of the agreed-upon milestone payments. We analyzed the Amended Takeda Agreement and determined that the amended terms did not result in a material modification of the original Takeda Agreement (and thus did not require us to change our accounting model) because (a) there were no changes to the deliverables under the original Takeda Agreement as a result of the amendment, and (b) the change in arrangement consideration as a result of the amendment was not quantitatively material in relation to the total arrangement consideration. | |
Under the Amended Takeda Agreement, except under limited circumstances, we have retained the right to manufacture Feraheme/Rienso and, accordingly, are responsible for supply of Feraheme/Rienso to Takeda at a fixed price per unit, which is capped for a certain period of time. We are also responsible for conducting, and bearing the costs related to, certain pre-defined clinical studies with the costs of future modifications or additional studies to be allocated between the parties according to an agreed-upon cost-sharing mechanism. We have determined that our obligations under the Amended Takeda Agreement have not changed from those under the original Takeda Agreement and include the following four deliverables: the license, access to future know-how and improvements to the Feraheme/Rienso technology, regulatory and clinical research activities, and the manufacturing and supply of product. Pursuant to the accounting guidance in effect in March 2010, when we signed the original Takeda Agreement and which governed revenue recognition on multiple element arrangements, we evaluated the four deliverables under the original Takeda Agreement and determined that our obligation to provide manufacturing supply of product meets the criteria for separation and is therefore treated as a single unit of accounting, which we refer to as the supply unit of accounting. Further, we concluded that the license is not separable from the undelivered future know-how and technological improvements or the undelivered regulatory and clinical research activities. Accordingly, these deliverables are being combined and also treated as a single unit of accounting, which we refer to as the combined unit of accounting. With respect to the combined unit of accounting, our obligation to provide access to our future know-how and technological improvements is the final deliverable and is an obligation which exists throughout the term of the Amended Takeda Agreement. | |
In connection with the execution of the original Takeda Agreement, we received a $60.0 million upfront payment from Takeda in April 2010, which we recorded as deferred revenue, as well as approximately $1.0 million reimbursed to us during 2010 for certain expenses incurred prior to entering the agreement, which we considered an additional upfront payment. Because we cannot reasonably estimate the total level of effort required to complete the obligations under the combined deliverable, we are recognizing the entire $60.0 million upfront payment, the $1.0 million reimbursed to us in 2010, as well as any non-substantive milestone payments that are achieved into revenues on a straight-line basis over a period of ten years from March 31, 2010, the date on which we originally entered the Takeda Agreement, which represented the then current patent life of Feraheme/Rienso and our best estimate of the period over which we will substantively perform our obligations. We continue to believe that the then-current patent life of Feraheme/Rienso is our best estimate of the period over which we will substantively perform our obligations under this agreement. | |
In addition, the remaining milestone payments we may be entitled to receive under the Amended Takeda Agreement could over time equal up to $186.0 million. For any milestone payments we may receive based upon the approval by certain regulatory agencies, we have determined that these will be deemed substantive milestones and, therefore, will be accounted for as revenue in the period in which they are achieved. In June 2012, we earned a $15.0 million milestone payment from Takeda based on the European Commission marketing authorization for ferumoxytol. We deemed the $15.0 million milestone payment as a substantive milestone and therefore recognized the full amount as revenue. We have also determined that any non-substantive milestone payments will be accounted for in accordance with our revenue attribution method for the upfront payment, as described above. During 2012, we received an aggregate of $18.0 million in milestone payments from Takeda associated with the commercial launches of Feraheme/Rienso in Canada and the EU, which we deemed to be non-substantive milestone payments. Revenues related to the combined unit of accounting are recorded in license fee and other collaboration revenues in our consolidated statement of operations. During 2013, we recorded $7.9 million in revenues associated with the upfront payments and the $18.0 million in non-substantive milestone payments we received in 2012. Any potential non-substantive milestone payments that may be received in the future will be recognized as revenue on a cumulative catch up basis when they become due and payable. | |
We have received and may also receive additional regulatory approval and performance-based milestone payments, reimbursement of certain out-of-pocket regulatory and clinical supply costs, defined payments for supply of Feraheme/Rienso, and tiered double-digit royalties on net product sales in the agreed-upon territories under the Amended Takeda Agreement. | |
Under the terms of the Amended Takeda Agreement, Takeda is responsible for reimbursing us for certain out-of-pocket regulatory and clinical trial supply costs associated with carrying out our regulatory and clinical research activities under the collaboration agreement. Because we are acting as the principal in carrying out these services, any reimbursement payments received from Takeda are recorded in license fee and other collaboration revenues in our consolidated statement of operations to match the costs that we incur during the period in which we perform those services. We recorded $0.5 million, $0.4 million and $2.0 million for 2013, 2012 and 2011, respectively, associated with other reimbursement revenues received from Takeda. | |
At the time of shipment, we defer recognition of all revenue for Feraheme/Rienso sold to our licensees in our consolidated balance sheets. We recognize revenues from product sales to our licensees, the related cost of goods sold, and any royalty revenues due from our licensees, in our consolidated statement of operations at the time our licensees report to us that sales have been made to their customers. During 2013, we recognized $0.5 million in product sales and royalty revenue related to the Amended Takeda Agreement and we have included this revenue in other product sales and royalties in our consolidated statement of operations. As of December 31, 2013, we had approximately $2.4 million in deferred revenue related to product shipped to Takeda but not yet sold through to Takeda's customers, of which $ 0.3 was classified as short-term and $2.1 was classified as long-term. In addition, we had $2.3 million in deferred cost of product sales, of which $ 0.3 was classified as short-term and $2.0 was classified as long-term. These deferred revenue and deferred cost of product sales are recorded in our consolidated balance sheet as of December 31, 2013. | |
3SBio | |
In 2008, we entered into a Collaboration and Exclusive License Agreement, or the 3SBio License Agreement, and a Supply Agreement, or the 3SBio Supply Agreement, with 3SBio Inc., or 3SBio, for the development and commercialization of Feraheme as an IV iron replacement therapeutic agent in China. In consideration of the grant of the license, we received an upfront payment of $1.0 million, the recognition of which has been deferred. In late January 2014, we mutually terminated the agreement with 3SBio, effective immediately, due to the fact that, despite the best efforts of the parties, regulatory approval in China could not be obtained within the agreed upon time period. | |
Restructuring
Restructuring | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Restructuring | ' | |||||||
Restructuring | ' | |||||||
R. Restructuring | ||||||||
During 2012, we initiated corporate restructurings, including a workforce reduction plan. The majority of the workforce reduction plan was associated with our manufacturing and development infrastructure, including our decision to divest our Cambridge, Massachusetts manufacturing facility. The workforce reductions were substantially completed by the end of 2012 and the majority of the related expenses were paid by the end of 2012. | ||||||||
The following table outlines the components of our restructuring expenses which were recorded in operating expenses and current liabilities for 2013 and 2012 (in thousands): | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
Accrued restructuring, beginning of period | $ | 1,383 | $ | 2,366 | ||||
Employee severance, benefits and related costs | — | 1,624 | ||||||
Payments | (1,383 | ) | (2,674 | ) | ||||
Inventory and other adjustments | — | 67 | ||||||
| | | | | | | | |
Accrued restructuring, end of period | $ | — | $ | 1,383 | ||||
| | | | | | | | |
| | | | | | | | |
Consolidated_Quarterly_Financi
Consolidated Quarterly Financial Data-Unaudited | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Consolidated Quarterly Financial Data-Unaudited | ' | |||||||||||||
Consolidated Quarterly Financial Data-Unaudited | ' | |||||||||||||
S. Consolidated Quarterly Financial Data—Unaudited | ||||||||||||||
The following tables provide unaudited consolidated quarterly financial data for 2013 and 2012 (in thousands, except per share data): | ||||||||||||||
March 31, 2013 | June 30, 2013 | September 30, 2013 | December 31, 2013 | |||||||||||
U.S. Feraheme product sales, net(a) | $ | 15,578 | $ | 17,456 | $ | 19,347 | $ | 18,981 | ||||||
License fee and other collaboration revenues | 2,003 | 2,055 | 1,998 | 2,329 | ||||||||||
Other product sales and royalties | 299 | 138 | 271 | 401 | ||||||||||
| | | | | | | | | | | | | | |
Total revenues | 17,880 | 19,649 | 21,616 | 21,711 | ||||||||||
Cost of product sales | 2,942 | 3,145 | 2,547 | 3,326 | ||||||||||
Gross margin | 14,938 | 16,504 | 19,069 | 18,385 | ||||||||||
Operating expenses | 19,409 | 19,260 | 19,464 | 22,380 | ||||||||||
Interest and dividend income, net | 271 | 256 | 246 | 278 | ||||||||||
Gains on assets held for sale | 299 | 566 | — | 59 | ||||||||||
Gains on investments, net | 6 | 26 | 4 | 4 | ||||||||||
| | | | | | | | | | | | | | |
Net loss | $ | (3,895 | ) | $ | (1,908 | ) | $ | (145 | ) | $ | (3,654 | ) | ||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Net loss per share—basic and diluted | $ | (0.18 | ) | $ | (0.09 | ) | $ | (0.01 | ) | $ | (0.17 | ) | ||
March 31, 2012 | June 30, 2012 | September 30, 2012 | December 31, 2012 | |||||||||||
U.S. product sales, net(a) | $ | 13,626 | $ | 14,094 | $ | 16,186 | $ | 14,381 | ||||||
License fee and other collaboration revenues(b) | 1,753 | 16,592 | 1,566 | 6,564 | ||||||||||
Other product sales and royalties | 101 | 326 | -10 | 199 | ||||||||||
| | | | | | | | | | | | | | |
Total revenues | 15,480 | 31,012 | 17,742 | 21,144 | ||||||||||
Cost of product sales | 2,646 | 3,224 | 4,323 | 4,027 | ||||||||||
Gross margin | 12,834 | 27,788 | 13,419 | 17,117 | ||||||||||
Operating expenses | 25,643 | 22,772 | 17,420 | 20,532 | ||||||||||
Restructuring expenses(c) | — | 1,058 | 562 | 595 | ||||||||||
Interest and dividend income, net | 393 | 338 | 295 | 260 | ||||||||||
(Losses) gains on investments, net(d) | — | (1,471 | ) | 2 | 3 | |||||||||
Income tax benefit | — | 494 | 299 | 61 | ||||||||||
| | | | | | | | | | | | | | |
Net income (loss) | $ | (12,416 | ) | $ | 3,319 | $ | (3,967 | ) | $ | (3,686 | ) | |||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Net income (loss) per share—basic | $ | (0.58 | ) | $ | 0.16 | $ | (0.19 | ) | $ | (0.17 | ) | |||
Net income (loss) per share—diluted | $ | (0.58 | ) | $ | 0.15 | $ | (0.19 | ) | $ | (0.17 | ) | |||
Quarterly loss per share totals differ from annual loss per share totals due to rounding. | ||||||||||||||
(a) In each of the quarters ended September 30, 2013 and 2012, we revised our estimated Medicaid utilization rate, which resulted in a reduction of our estimated Medicaid rebate reserve related to prior year Feraheme sales of $0.6 million. In addition, in the first three quarters of 2012 we reduced our reserve for product returns by $2.2 million. | ||||||||||||||
(b) During the quarters ended June 30, 2012 and December 31, 2012, we recognized $15.0 million and $5.0 million related to certain milestone payments we received from Takeda upon the EU marketing authorization of Rienso and the commercial launches of Feraheme/Rienso in Canada and the EU, respectively. | ||||||||||||||
(c) In 2012 we carried out corporate restructurings pursuant to which we reduced our workforce and incurred charges related to employee severance and other related costs. See Note R. | ||||||||||||||
(d) In June 2012, we sold our then remaining ARS portfolio and recognized a loss of approximately $1.5 million. | ||||||||||||||
Valuation_and_Qualifying_Accou
Valuation and Qualifying Accounts | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Valuation and Qualifying Accounts | ' | |||||||||||||
Valuation and Qualifying Accounts | ' | |||||||||||||
T. Valuation and Qualifying Accounts (in thousands) | ||||||||||||||
Balance at | Additions(a) | Deductions | Balance at | |||||||||||
Beginning | Charged to | End of | ||||||||||||
of Period | Reserves | Period | ||||||||||||
Year ended December 31, 2013: | ||||||||||||||
Accounts receivable allowances(b) | $ | 1,771 | $ | 37,098 | $ | (36,186 | ) | $ | 2,683 | |||||
Rebates, fees and returns reserves | $ | 3,448 | $ | 11,820 | $ | (10,469 | ) | $ | 4,799 | |||||
Year ended December 31, 2012: | ||||||||||||||
Accounts receivable allowances(b) | $ | 1,822 | $ | 26,517 | $ | (26,568 | ) | $ | 1,771 | |||||
Rebates, fees and returns reserves | $ | 5,943 | $ | 6,729 | $ | (9,224 | ) | $ | 3,448 | |||||
Year ended December 31, 2011: | ||||||||||||||
Accounts receivable allowances(b) | $ | 1,148 | $ | 14,074 | $ | (13,400 | ) | $ | 1,822 | |||||
Rebates, fees and returns reserves | $ | 10,015 | $ | 9,864 | $ | (13,936 | ) | $ | 5,943 | |||||
(a) | ||||||||||||||
Additions to sales discounts, rebates, fees and returns reserves are recorded as a reduction of revenues. | ||||||||||||||
(b) | ||||||||||||||
We have not recorded an allowance for doubtful accounts in any of the years presented above. These accounts receivable allowances represent discounts and other chargebacks related to the provision for U.S. Feraheme product sales. | ||||||||||||||
Recently_Issued_and_Proposed_A
Recently Issued and Proposed Accounting Pronouncements | 12 Months Ended |
Dec. 31, 2013 | |
Recently Issued and Proposed Accounting Pronouncements | ' |
Recently Issued and Proposed Accounting Pronouncements | ' |
U. Recently Issued and Proposed Accounting Pronouncements | |
From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board or other standard setting bodies that are adopted by us as of the specified effective date. Unless otherwise discussed, we believe that the impact of recently issued standards that are not yet effective will not have a material impact on our financial position or results of operations upon adoption. | |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Summary of Significant Accounting Policies | ' | |||||||||||||
Use of Estimates and Assumptions | ' | |||||||||||||
Use of Estimates and Assumptions | ||||||||||||||
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the related disclosure of contingent assets and liabilities. The most significant estimates and assumptions are used in, but are not limited to, revenue recognition related to product sales and collaboration agreements, product sales allowances and accruals, assessing investments for potential other-than-temporary impairment and determining fair values of our investments, the fair value of our assets held for sale, fair value of assets acquired in a business combination, contingent consideration, the impairment of long-lived assets, including intangible assets, accrued expenses, and equity-based compensation expense. Actual results could differ materially from those estimates. | ||||||||||||||
Principles of Consolidation | ' | |||||||||||||
Principles of Consolidation | ||||||||||||||
The accompanying consolidated financial statements include our accounts and the accounts of our wholly-owned subsidiaries, AMAG Europe Limited, AMAG Securities Corporation and Snowbird, Inc. AMAG Europe Limited was incorporated in October 2009 in London, England. AMAG Securities Corporation is a Massachusetts corporation which was incorporated in August 2007. Snowbird, Inc. is a Delaware corporation which was incorporated in December 2013. All intercompany account balances and transactions between the companies have been eliminated. | ||||||||||||||
Cash and Cash Equivalents | ' | |||||||||||||
Cash and Cash Equivalents | ||||||||||||||
Cash and cash equivalents consists principally of cash held in commercial bank accounts, money market funds and U.S. Treasury securities having an original maturity of less than three months. We consider all highly liquid investments with a maturity of three months or less at acquisition date to be cash equivalents. At December 31, 2013, substantially all of our cash and cash equivalents were held in either commercial bank accounts or money market funds. | ||||||||||||||
Investments | ' | |||||||||||||
Investments | ||||||||||||||
We account for and classify our investments as either "available-for-sale," "trading," or "held-to-maturity," in accordance with current guidance related to the accounting and classification of certain investments in debt and equity securities. The determination of the appropriate classification by us is based on a variety of factors, including management's intent at the time of purchase. During the years ended December 31, 2013 and 2012, all of our investments were classified as available-for-sale securities. | ||||||||||||||
Available-for-sale securities are those securities which we view as available for use in current operations, if needed. We generally classify our available-for-sale securities as short-term investments, even though the stated maturity date may be one year or more beyond the current balance sheet date. Available-for-sale investments are stated at fair value with their unrealized gains and losses included as a separate component of stockholders' equity entitled "Accumulated other comprehensive loss," until such gains and losses are realized or until an unrealized loss is considered other-than-temporary. | ||||||||||||||
We recognize and report other-than-temporary impairments of our debt securities in accordance with current accounting guidance, which requires that for debt securities with a decline in fair value below amortized cost basis, an other-than-temporary impairment exists if (a) we have the intent to sell the security or (b) it is more likely than not that we will be required to sell the security prior to recovery of its amortized cost basis. If either of these conditions is met, we recognize the difference between the amortized cost of the security and its fair value at the impairment measurement date in our consolidated statement of operations. If neither of these conditions is met, we must perform additional analyses to evaluate whether the unrealized loss is associated with the creditworthiness of the security rather than other factors, such as interest rates or market factors. These factors include evaluation of the security, issuer and other factors such as the duration of the period that, and extent to which, the fair value was less than cost basis, the financial health of and business outlook for the issuer, including industry and sector performance, operational and financing cash flow factors, overall market conditions and trends, underlying collateral, whether we have a favorable history in redeeming similar securities at prices at or above fair value, and credit ratings with respect to our investments provided by investments ratings agencies. If we determine from this analysis that we do not expect to receive cash flows sufficient to recover the entire amortized cost of the security, a credit loss exists. In this situation, the impairment is considered other-than-temporary and is recognized in our consolidated statement of operations. | ||||||||||||||
Fair Value Measurements | ' | |||||||||||||
Fair Value Measurements | ||||||||||||||
Under current accounting standards, fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. | ||||||||||||||
Current accounting guidance establishes a hierarchy used to categorize how fair value is measured and which is based on three levels of inputs, of which the first two are considered observable and the third unobservable, as follows: | ||||||||||||||
Level 1—Quoted prices in active markets for identical assets or liabilities. | ||||||||||||||
Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices 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. | ||||||||||||||
We hold certain assets and liabilities that are required to be measured at fair value on a recurring basis, including our cash equivalents, investments, and contingent consideration. The following tables represent the fair value hierarchy as of December 31, 2013 and 2012, for those assets and liabilities that we measure at fair value on a recurring basis (in thousands): | ||||||||||||||
Fair Value Measurements at December 31, 2013 Using: | ||||||||||||||
Total | Quoted Prices in | Significant Other | Significant | |||||||||||
Active Markets for | Observable Inputs | Unobservable | ||||||||||||
Identical Assets | (Level 2) | Inputs | ||||||||||||
(Level 1) | (Level 3) | |||||||||||||
Assets: | ||||||||||||||
Money market funds | $ | 18,767 | $ | 18,767 | $ | — | $ | — | ||||||
Corporate debt securities | 134,123 | — | 134,123 | — | ||||||||||
U.S. treasury and government agency securities | 52,680 | — | 52,680 | — | ||||||||||
| | | | | | | | | | | | | | |
Total Assets | $ | 205,570 | $ | 18,767 | $ | 186,803 | $ | — | ||||||
Liabilities: | ||||||||||||||
Acquisition-related contingent consideration | $ | 14,550 | $ | — | $ | — | $ | 14,550 | ||||||
| | | | | | | | | | | | | | |
Total Liabilities | $ | 14,550 | $ | — | $ | — | $ | 14,550 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Fair Value Measurements at December 31, 2012 Using: | ||||||||||||||
Total | Quoted Prices in | Significant Other | Significant | |||||||||||
Active | Observable Inputs | Unobservable | ||||||||||||
Markets for | (Level 2) | Inputs | ||||||||||||
Identical Assets | (Level 3) | |||||||||||||
(Level 1) | ||||||||||||||
Money market funds | $ | 24,058 | $ | 24,058 | $ | — | $ | — | ||||||
Corporate debt securities | 111,690 | — | 111,690 | — | ||||||||||
U.S. treasury and government agency securities | 59,569 | — | 59,569 | — | ||||||||||
Commercial paper | 9,491 | — | 9,491 | — | ||||||||||
| | | | | | | | | | | | | | |
$ | 204,808 | $ | 24,058 | $ | 180,750 | $ | — | |||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
With the exception of our money market funds and our acquisition-related contingent consideration, the fair value of our investments is primarily determined from independent pricing services. Independent pricing services normally derive security prices from recently reported trades for identical or similar securities, making adjustments based upon other significant observable market transactions. At the end of each reporting period, we perform quantitative and qualitative analyses of prices received from third parties to determine whether prices are reasonable estimates of fair value. After completing our analyses, we did not adjust or override any fair value measurements provided by our pricing services as of either December 31, 2013 or 2012. In addition, there were no transfers or reclassifications of any securities between Level 1 and Level 2 during either 2013 or 2012. | ||||||||||||||
We also analyze when the volume and level of activity for an asset or liability have significantly decreased and when circumstances indicate that a transaction may not be considered orderly. In order to determine whether the volume and level of activity for an asset or liability have significantly decreased, we assess current activity as compared to normal market activity for the asset or liability. We rely on many factors such as trading volume, trading frequency, the levels at which market participants indicate their willingness to buy and sell our securities, as reported by market participants, and current market conditions. Using professional judgment and experience, we evaluate and weigh the relevance and significance of all applicable factors to determine if there has been a significant decrease in the volume and level of activity for an asset, group of similar assets or liabilities. Similarly, in order to identify transactions that are not orderly, we take into consideration the activity in the market which can influence the determination and occurrence of an orderly transaction. Also, we inquire as to whether there may have been restrictions on the marketing of the security to a single or limited number of participants. Where possible, we assess the financial condition of the seller to determine whether observed transactions may have been forced. If there is a significant disparity between the trading price for a security held by us as compared to the trading prices of similar recent transactions, we consider whether this disparity is an indicator of a disorderly trade. Using professional judgment and experience, we evaluate and weigh the relevance and significance of all applicable factors to determine if the evidence suggests that a transaction or group of similar transactions is not orderly. Based upon these procedures, we determined that market activity for our assets appeared normal and that transactions did not appear disorderly as of December 31, 2013 and 2012. | ||||||||||||||
In 2012, our Level 3 assets consisted solely of auction rate securities, which we sold in mid-2012. The following table provides a rollforward of these Level 3 assets for 2012 (in thousands): | ||||||||||||||
December 31, 2012 | ||||||||||||||
Balance at beginning of period | $ | 17,527 | ||||||||||||
Transfers to Level 3 | — | |||||||||||||
Total gains (losses) (realized or unrealized): | ||||||||||||||
Included in earnings | (1,471 | ) | ||||||||||||
Included in other comprehensive income (loss) | 2,373 | |||||||||||||
Purchases, issuances, sales and settlements: | ||||||||||||||
Purchases | — | |||||||||||||
Issuances | — | |||||||||||||
Sales | (18,329 | ) | ||||||||||||
Settlements | (100 | ) | ||||||||||||
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Balance at end of period | $ | — | ||||||||||||
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The amount of total gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to assets still held at end of period | $ | — | ||||||||||||
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We are accounting for the acquisition of the MuGard Rights as a business combination under the acquisition method of accounting. Additional details regarding the Access License Agreement and the MuGard Rights can be found in Note G. The fair value measurements of contingent consideration obligations and the related intangible asset arising from business combinations are determined using unobservable, or Level 3, inputs. These inputs include (a) the estimated amount and timing of projected cash flows; (b) the probability of the achievement of the factors on which the contingency is based; and (c) the risk-adjusted discount rate used to present value the probability-weighted cash flows. Significant increases (decreases) in any of those inputs in isolation could result in a significantly lower or higher fair value measurement. | ||||||||||||||
The following table presents a reconciliation of contingent consideration obligations related to our acquisition of the MuGard Rights measured on a recurring basis using Level 3 inputs as of December 31, 2013 (in thousands): | ||||||||||||||
Balance as of June 6, 2013 | $ | — | ||||||||||||
Acquisition date fair value of contingent consideration | 13,700 | |||||||||||||
| | | | | ||||||||||
Balance as of June 30, 2013 | $ | 13,700 | ||||||||||||
Payments made | (51 | ) | ||||||||||||
Adjustments to fair value of contingent consideration | 1,074 | |||||||||||||
Other adjustments | (173 | ) | ||||||||||||
| | | | | ||||||||||
Balance as of December 31, 2013 | $ | 14,550 | ||||||||||||
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During 2013, we recorded $1.1 million in expense related to the increase in fair value of the contingent consideration liability. This expense represents the time value of money impact of the contingent consideration fair value assessment as of December 31, 2013 and is included in selling, general and administrative expenses in our consolidated statements of operations. As of December 31, 2013, we estimate that the undiscounted royalty amounts we could pay under the Access License Agreement may range from $28.0 million to $34.0 million over a ten year period, which is our best estimate of the period over which we expect the majority of the asset's cash flows to be derived. This measure is based on significant Level 3 inputs not observable in the market. Key assumptions include a discount rate of approximately 15%. As of December 31, 2013, the assumptions used for determining fair value of the contingent consideration have not changed significantly from those used at the Acquisition Date. We have classified $0.9 million of the contingent consideration as a short-term liability, which was included in accrued expenses in our consolidated balance sheet as of December 31, 2013. | ||||||||||||||
In addition, in connection with the acquisition of the MuGard Rights, we acquired an intangible asset of $16.9 million, which was originally determined based on fair value measurements. These measures were based on significant Level 3 inputs not observable in the market. Key assumptions include a discount rate of 19%. We believe the estimated fair values of the MuGard Rights are based on reasonable assumptions, however, we cannot provide assurance that the underlying assumptions used to forecast the cash flows will materialize as we estimated and thus, our actual results may vary significantly from the estimated results. | ||||||||||||||
Inventories | ' | |||||||||||||
Inventories | ||||||||||||||
Inventories are stated at the lower of cost or market (net realizable value), with approximate cost being determined on a first-in, first-out basis. | ||||||||||||||
Prior to initial approval from the FDA or other regulatory agencies, we expense costs relating to the production of inventory in the period incurred. After such time as the product receives initial regulatory approval, we begin to capitalize the inventory costs related to the product. Prior to the June 2009 FDA approval of Feraheme for commercial sale in the U.S., all production costs related to Feraheme were expensed to research and development. Subsequent to receiving FDA approval, costs related to the production of Feraheme are capitalized to inventory, including the costs of converting previously existing raw or other materials to inventory and vialing, labeling, and packaging inventory manufactured prior to approval whose costs had already been recorded as research and development expense. We continue to expense costs associated with clinical trial material as research and development expense. | ||||||||||||||
Property and Equipment | ' | |||||||||||||
Property and Equipment | ||||||||||||||
Property and equipment are recorded at cost and depreciated when placed into service using the straight-line method based on their estimated useful lives. Our laboratory and production equipment and furniture and fixtures are being depreciated over five years. Furniture, fixtures, and leasehold improvements associated with our facility lease are being depreciated over the shorter of their useful lives or the remaining life of the original lease (excluding optional lease renewal terms). | ||||||||||||||
Costs for capital assets not yet placed in service are capitalized on our balance sheets, and the cost of maintenance and repairs is expensed as incurred. Upon sale or other disposition of property and equipment, the cost and related depreciation are removed from the accounts and any resulting gain or loss is charged to our consolidated statement of operations. Long-lived assets to be held and used are evaluated for impairment whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset (asset group) and its eventual disposition. In the event such cash flows are not expected to be sufficient to recover the carrying amount of the assets, the assets are written down to their estimated fair values. Assets classified as held for sale are no longer subject to depreciation and are recorded at the lower of carrying value or estimated net realizable value. | ||||||||||||||
Restricted Cash | ' | |||||||||||||
Restricted Cash | ||||||||||||||
As of December 31, 2013 and 2012, we classified $3.3 million and $0.5 million as restricted cash, respectively. Included in the $3.3 million restricted cash balance as of December 31, 2013 was a $2.9 million escrow payment related to a business development transaction that we did not complete. The escrow payment was returned to us in January 2014 and as such was classified as short-term as of December 31, 2013. We also included $0.4 million and $0.5 million in our December 31, 2013 and 2012 restricted cash balances, respectively, related to security deposits delivered to the landlord of our then current locations in the form of irrevocable letters of credits. | ||||||||||||||
Patents | ' | |||||||||||||
Patents | ||||||||||||||
We expense all patent-related costs as incurred. | ||||||||||||||
Research and Development Expenses | ' | |||||||||||||
Research and Development Expenses | ||||||||||||||
Research and development expenses include external expenses, such as costs of clinical trials, contract research and development expenses, certain manufacturing research and development costs, regulatory filing fees, consulting and professional fees and expenses, and internal expenses, such as compensation of employees engaged in research and development activities, the manufacture of product needed to support research and development efforts, related costs of facilities, and other general costs related to research and development. Manufacturing costs are expensed as incurred until a product has received the necessary initial regulatory approval. | ||||||||||||||
Advertising Costs | ' | |||||||||||||
Advertising Costs | ||||||||||||||
Advertising costs are expensed as incurred and are included in selling, general and administrative expenses in our consolidated statement of operations. Advertising costs, including promotional expenses and costs related to trade shows were $1.9 million, $1.8 million and $3.1 million for the years ended December 31, 2013, 2012 and 2011, respectively. | ||||||||||||||
Revenue Recognition and Related Sales Allowances and Accruals | ' | |||||||||||||
Revenue Recognition and Related Sales Allowances and Accruals | ||||||||||||||
We recognize revenue from the sale of Feraheme/Rienso and MuGard as well as license fee and other collaboration revenues, including milestone payments, other product sale revenues, and royalties we receive from our licensees. We recognize revenue in accordance with current accounting guidance related to the recognition, presentation and disclosure of revenue in financial statements, which outlines the basic criteria that must be met to recognize revenue and provides guidance for disclosure of revenue in financial statements. We recognize revenue when: | ||||||||||||||
• | ||||||||||||||
Persuasive evidence of an arrangement exists; | ||||||||||||||
• | ||||||||||||||
Delivery of product has occurred or services have been rendered; | ||||||||||||||
• | ||||||||||||||
The sales price charged is fixed or determinable; and | ||||||||||||||
• | ||||||||||||||
Collection is reasonably assured. | ||||||||||||||
U.S. Feraheme Product Sales, Net | ||||||||||||||
We record Feraheme product sales allowances and accruals related to prompt payment discounts, chargebacks, government and other rebates, distributor, wholesaler and group purchasing organization, or GPO, fees, and product returns as a reduction of revenue in our consolidated statement of operations at the time product sales are recorded. Calculating these gross-to-net sales adjustments involves estimates and judgments based primarily on actual Feraheme sales data, forecasted customer buying patterns, and market research data related to utilization rates by various end-users. In addition, we also monitor our distribution channel to determine whether additional allowances or accruals are required based on inventory in our sales channel. An analysis of our U.S. Feraheme product sales allowances and accruals for the years ended December 31, 2013, 2012 and 2011 is as follows (in thousands): | ||||||||||||||
2013 | 2012 | 2011 | ||||||||||||
Provision for U.S. product sales allowances and accruals | ||||||||||||||
Discounts and chargebacks | $ | 37,098 | $ | 26,517 | $ | 13,851 | ||||||||
Government and other rebates | 10,868 | 6,058 | 8,544 | |||||||||||
Medicaid rebate reserve adjustment | (568 | ) | (621 | ) | (2,532 | ) | ||||||||
Returns | 952 | (1,516 | ) | 1,259 | ||||||||||
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Total provision for U.S. product sales allowances and accruals | $ | 48,350 | $ | 30,438 | $ | 21,122 | ||||||||
Total gross U.S. product sales | $ | 119,712 | $ | 88,725 | $ | 73,219 | ||||||||
Total provision for U.S. product sales allowances and accruals as a percent of total gross U.S. product sales | 40 | % | 34 | % | 29 | % | ||||||||
Classification of U.S. Feraheme Product Sales Allowances and Accruals | ||||||||||||||
Product sales allowances and accruals are primarily comprised of both direct and indirect fees, discounts and rebates and provisions for estimated product returns. Direct fees, discounts and rebates are contractual fees and price adjustments payable to wholesalers, specialty distributors and other customers that purchase products directly from us. Indirect fees, discounts and rebates are contractual price adjustments payable to healthcare providers and organizations, such as certain physicians, clinics, hospitals, GPOs, and dialysis organizations that typically do not purchase products directly from us but rather from wholesalers and specialty distributors. In accordance with guidance related to accounting for fees and consideration given by a vendor to a customer, including a reseller of a vendor's products, these fees, discounts and rebates are presumed to be a reduction of the selling price of Feraheme. Product sales allowances and accruals are based on definitive contractual agreements or legal requirements (such as Medicaid laws and regulations) related to the purchase and/or utilization of the product by these entities and are recorded in the same period that the related revenue is recognized. We estimate product sales allowances and accruals using either historical, actual and/or other data, including estimated patient usage, applicable contractual rebate rates, contract performance by the benefit providers, other current contractual and statutory requirements, historical market data based upon experience of Feraheme and other products similar to Feraheme, specific known market events and trends such as competitive pricing and new product introductions, current and forecasted customer buying patterns and inventory levels, and the shelf life of Feraheme. As part of this evaluation, we also review changes to federal and other legislation, changes to rebate contracts, changes in the level of discounts, and changes in product sales trends. Although allowances and accruals are recorded at the time of product sale, certain rebates are typically paid out, on average, up to three months or longer after the sale. | ||||||||||||||
Allowances against receivable balances primarily relate to prompt payment discounts, provider chargebacks and certain government agency rebates and are recorded at the time of sale, resulting in a reduction in product sales revenue and the reporting of product sales receivables net of allowances. Accruals related to Medicaid and provider volume rebates, wholesaler and distributor fees, GPO fees, other discounts to healthcare providers and product returns are recorded at the time of sale, resulting in a reduction in product sales revenue and the recording of an increase in accrued expenses. | ||||||||||||||
Discounts | ||||||||||||||
We typically offer a 2% prompt payment discount to our customers as an incentive to remit payment in accordance with the stated terms of the invoice, generally thirty days. Because we anticipate that those customers who are offered this discount will take advantage of the discount, we accrue 100% of the prompt payment discount, at the time of sale, based on the gross amount of each invoice. We adjust the accrual quarterly to reflect actual experience. | ||||||||||||||
Chargebacks | ||||||||||||||
Chargeback reserves represent our estimated obligations resulting from the difference between the prices at which we sell Feraheme to wholesalers and the sales price ultimately paid to wholesalers under fixed price contracts by third-party payors, including governmental agencies. We determine our chargeback estimates based on actual Feraheme sales data and forecasted customer buying patterns. Actual chargeback amounts are determined at the time of resale to the qualified healthcare provider, and we generally issue credits for such amounts within several weeks of receiving notification from the wholesaler. Estimated chargeback amounts are recorded at the time of sale, and we adjust the allowance quarterly to reflect actual experience. | ||||||||||||||
Government and Other Rebates | ||||||||||||||
Government and other rebate reserves relate to our reimbursement arrangements with state Medicaid programs or performance rebate agreements with certain classes of trade. We determine our estimates for Medicaid rebates based on actual Feraheme sales data and our historical Feraheme claims experience. In estimating these reserves, we provide for a Medicaid rebate associated with both those expected instances where Medicaid will act as the primary insurer as well as in those instances where we expect Medicaid will act as the secondary insurer. For rebates associated with reaching defined performance goals, we determine our estimates using actual Feraheme sales data and forecasted customer buying patterns. Rebate amounts generally are invoiced quarterly and are paid in arrears, and we expect to pay such amounts within several weeks of notification by the Medicaid or provider entity. Estimated government and other rebates are recorded at the time of sale and, with the exception of Medicaid as discussed below, we adjust the accrual quarterly to reflect actual experience. | ||||||||||||||
During 2013, 2012 and 2011, we revised our estimated Medicaid utilization rate based on actual rebate claims received since the 2009 launch of Feraheme, our expectations of state level activity, and estimated rebate claims not yet submitted, which resulted in a reduction of our estimated Medicaid rebate reserve related to prior period Feraheme sales of $0.6 million, $0.6 million and $2.5 million, respectively. These changes in estimates were reflected as an increase in our net product sales for 2013, 2012 and 2011. As a result, our gross to net percentages for 2013, 2012 and 2011 were lower than they otherwise would have been had we not reduced our Medicaid rebate reserve. The reduction of our estimated Medicaid rebate reserve had an impact of $0.03, $0.03 and $0.12 per basic and diluted share for 2013, 2012 and 2011, respectively. We regularly assess our Medicaid reserve balance and the rate at which we accrue for claims against product sales. If we determine in future periods that our actual rebate experience is not indicative of expected claims, or if other factors affect estimated claims rates, we may be required to change our estimated Medicaid reserve and/or the current rate at which we estimate our Medicaid claims, which would affect our earnings in the period of the change in estimate and such change could be significant. | ||||||||||||||
Distributor/Wholesaler and Group Purchasing Organization Fees | ||||||||||||||
Fees under our arrangements with distributors and wholesalers are usually based upon units of Feraheme purchased during the prior month or quarter and are usually paid by us within several weeks of our receipt of an invoice from the wholesaler or distributor, as the case may be. Fees under our arrangements with GPOs are usually based upon member purchases during the prior quarter and are generally billed by the GPO within 30 days after period end. Current accounting standards related to consideration given by a vendor to a customer, including a reseller of a vendor's products, specify that cash consideration given by a vendor to a customer is presumed to be a reduction of the selling price of the vendor's products or services and therefore should be characterized as a reduction of revenue. Consideration should be characterized as a cost incurred if we receive, or will receive, an identifiable benefit (goods or services) in exchange for the consideration and we can reasonably estimate the fair value of the benefit received. Because the fees we pay to wholesalers do not meet the foregoing conditions to be characterized as a cost, we have characterized these fees as a reduction of revenue and have included them in government and other rebates in the table above. We generally pay such amounts within several weeks of our receipt of an invoice from the distributor, wholesaler, or GPO. Accordingly, we accrue the estimated fee due at the time of sale, based on the contracted price invoiced to the customer. We adjust the accrual quarterly to reflect actual experience. | ||||||||||||||
Product Returns | ||||||||||||||
Consistent with industry practice, we generally offer our wholesalers, specialty distributors and other customers a limited right to return Feraheme purchased directly from us based on the product's expiration date which, once packaged, is currently five years in the U.S. We estimate product returns based on the historical return patterns and known or expected changes in the marketplace. We currently have limited actual returns data, and therefore are not able to solely rely on our actual returns experience. We track actual returns by individual production lots. Returns on lots eligible for credits under our returned goods policy are monitored and compared with historical return trends and rates. | ||||||||||||||
We consider several additional factors in our product return estimation process, including our internal sales forecasts and inventory levels in the distribution channel. We expect that wholesalers and healthcare providers will not stock significant inventory due to Feraheme's cost and expense to store. Based on the level of inventory in the wholesale distribution channel, we determine whether an adjustment to the sales return reserve is appropriate. | ||||||||||||||
We record an estimate of returns at the time of sale. If necessary, our estimated rate of returns may be adjusted for actual return experience as it becomes available and for known or expected changes in the marketplace. During 2012, we reduced our reserve for product returns by approximately $2.2 million primarily as a result of a lower than expected rate of product returns as well as the lapse of the product return period on certain manufactured Feraheme lots that carried a two year expiration. As a result, the product returns provision applied to gross product sales for the year ended December 31, 2012 was a credit of $1.5 million, resulting in an increase to net product sales for the year. The reduction of our estimated product returns reserve had a positive impact of $0.10 per basic and diluted share for year ended December 31, 2012. We did not significantly adjust our reserve for product returns during 2013 or 2011. Feraheme is still early in its product lifecycle and returns experience may change over time. A future revision to our product returns estimate would result in a corresponding change to our net product sales in the period in which the change is made and could be significant. | ||||||||||||||
Other Product Sales and Royalties | ||||||||||||||
Other product sales and royalties include product sales of Feraheme/Rienso and GastroMARK® to our licensees, net product sales of MuGard and royalties received from our licensees' sales of Feraheme/Rienso and GastroMARK. We record all product sales for Feraheme/Rienso sold to Takeda in deferred revenues in our consolidated balance sheet. We recognize these deferred revenues, and the associated cost of product sales, in our consolidated statement of operations at the time Takeda reports to us that sales have been made to its customers. | ||||||||||||||
License Fee and Other Collaboration Revenues | ||||||||||||||
The terms of product development and commercialization agreements entered into between us and our collaborative licensees may include non-refundable license fees, payments based on the achievement of certain milestones and performance goals, reimbursement of certain out-of-pocket costs, payment for manufacturing services, and royalties on product sales. We recognize license fee and research and development revenue under collaborative arrangements over the term of the applicable agreements using a proportional performance model, if practical. Otherwise, we recognize such revenue on a straight-line basis. Under this model, revenue is generally recognized in an amount equal to the lesser of the amount due under the agreements or an amount based on the proportional performance to date. In cases where project costs or other performance metrics are not estimable but there is an established contract period, revenues are recognized on a straight-line basis over the term of the relevant agreement. In cases where we are reimbursed for certain research and development costs associated with our collaboration agreements and where we are acting as the principal in carrying out these services, any reimbursement payments are recorded in license fee and other collaboration revenues in our consolidated statement of operations to match the costs that we incur during the period in which we perform those services. Nonrefundable payments and fees are recorded as deferred revenue upon receipt and may require deferral of revenue recognition to future periods. | ||||||||||||||
Multiple Element Arrangements and Milestone Payments | ||||||||||||||
We evaluate revenue from arrangements that have multiple elements to determine whether the components of the arrangement represent separate units of accounting as defined in the accounting guidance related to revenue arrangements with multiple deliverables. Under current accounting guidance, which governs any agreements that contain multiple elements that are either entered into or materially modified subsequent to January 1, 2011, companies are required to establish the fair value of undelivered products and services based on a separate revenue recognition process using management's best estimate of the selling price for an undelivered item when there is no vendor-specific objective evidence or third-party evidence to determine the fair value of that undelivered item. Agreements entered into prior to January 1, 2011, that have not been materially modified, including our agreement with Takeda, are accounted for under previous accounting guidance, which provides that an element of a contract can be accounted for separately if the delivered elements have standalone value and the fair value of all undelivered elements is determinable. If an element is considered to have standalone value but the fair value of any of the undelivered items cannot be determined, all elements of the arrangement are recognized as revenue as a single unit of accounting over the period of performance for such undelivered items or services. Significant management judgment is required in determining what elements constitute deliverables and what deliverables or combination of deliverables should be considered units of accounting. | ||||||||||||||
When multiple deliverables are combined and accounted for as a single unit of accounting, we base our revenue recognition pattern on the last to be delivered element. Revenue is recognized using either a proportional performance or straight-line method, depending on whether we can reasonably estimate the level of effort required to complete our performance obligations under an arrangement and whether such performance obligations are provided on a best-efforts basis. To the extent we cannot reasonably estimate our performance obligations, we recognize revenue on a straight-line basis over the period we expect to complete our performance obligations. Significant management judgment is required in determining the level of effort required under an arrangement and the period over which we are expected to complete our performance obligations under an arrangement. We may have to revise our estimates based on changes in the expected level of effort or the period we expect to complete our performance obligations. | ||||||||||||||
Our collaboration agreements may entitle us to additional payments upon the achievement of performance-based milestones. If a milestone involves substantive effort on our part and its achievement is not considered probable at the inception of the collaboration, we recognize the milestone consideration as revenue in the period in which the milestone is achieved only if it meets the following additional criteria: | ||||||||||||||
• | ||||||||||||||
The milestone consideration received is commensurate with either the level of effort required to achieve the milestone or the enhancement of the value of the item delivered as a result of a specific outcome resulting from our performance to achieve the milestone; | ||||||||||||||
• | ||||||||||||||
The milestone is related solely to our past performance; and | ||||||||||||||
• | ||||||||||||||
The milestone consideration is reasonable relative to all deliverables and payment terms in the arrangement. | ||||||||||||||
There is significant judgment involved in determining whether a milestone meets all of these criteria. For milestones that do not meet the above criteria and are therefore not considered substantive milestones, we recognize that portion of the milestone payment equal to the percentage of the performance period completed at the time the milestone is achieved and the above conditions are met. The remaining portion of the milestone will be recognized over the remaining performance period using a proportional performance or straight-line method. | ||||||||||||||
Amounts received prior to satisfying the above revenue recognition criteria are recorded as deferred revenue in our consolidated balance sheets. Amounts not expected to be recognized within the next 12 months are classified as long-term deferred revenue. | ||||||||||||||
Acquisitions | ' | |||||||||||||
Acquisitions | ||||||||||||||
We account for acquired businesses using the acquisition method of accounting, which requires, with limited exceptions, that assets acquired and liabilities assumed be recognized at their estimated fair values as of the acquisition date. Transaction costs are expensed as incurred. Any excess of the consideration transferred over the estimated fair values of the net assets acquired is recorded as goodwill. | ||||||||||||||
Intangible Assets | ' | |||||||||||||
Intangible Assets | ||||||||||||||
Intangible assets with definite useful lives are amortized to their estimated residual values over their estimated useful lives and reviewed for impairment if certain events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. | ||||||||||||||
Contingent Consideration | ' | |||||||||||||
Contingent Consideration | ||||||||||||||
Contingent consideration arising from a business combination is included as part of the acquisition cost and is recognized at fair value as of the acquisition date. Any liability resulting from contingent consideration is remeasured to its fair value at each reporting date until the contingency is resolved. These changes in fair value are recognized in our consolidated statements of operations. | ||||||||||||||
Shipping and Handling Costs | ' | |||||||||||||
Shipping and Handling Costs | ||||||||||||||
We utilize a third-party logistics provider, which is a subsidiary of one of our distribution customers, to provide us with various shipping and handling services related to sales of Feraheme. As we receive an identifiable benefit and we can reasonably estimate the fair value of this benefit, we have recorded $0.3 million, $0.2 million and $0.1 million as a selling, general and administrative expense during 2013, 2012 and 2011, respectively. | ||||||||||||||
Equity-Based Compensation | ' | |||||||||||||
Equity-Based Compensation | ||||||||||||||
Under the fair value recognition guidance of equity-based compensation accounting rules, equity-based compensation cost is generally required to be measured at the grant date (based upon an estimate of the fair value of the compensation granted) and recorded to expense over the requisite service period, which generally is the vesting period. Because equity-based compensation expense is based on awards ultimately expected to vest, we must make certain judgments about whether employees and directors will complete the requisite service period. Accordingly, we have reduced the compensation expense being recognized for estimated forfeitures. Under current accounting guidance, forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Forfeitures are estimated based upon historical experience, adjusted for unusual events such as the corporate restructurings in 2012 and 2011, which resulted in higher than expected turnover and forfeitures in those years. If factors change and we employ different assumptions in future periods, the compensation expense that we record in the future may differ significantly from what we have recorded in the current period. | ||||||||||||||
We estimate the fair value of equity-based compensation involving stock options based on the Black-Scholes option pricing model. We estimate the fair value of our restricted stock units whose vesting is contingent upon market conditions using the Monte-Carlo simulation model. These models require the input of several factors such as the expected option term, the expected risk-free interest rate over the expected option term, the expected volatility of our stock price over the expected option term, and the expected dividend yield over the expected option term and are subject to various assumptions. The fair value of awards whose fair values are calculated using the Black-Scholes option pricing model is generally being amortized on a straight-line basis over the requisite service period and is recognized based on the proportionate amount of the requisite service period that has been rendered during each reporting period. The fair value of awards with market conditions is being amortized based upon the estimated derived service period. We believe our valuation methodologies are appropriate for estimating the fair value of the equity awards we grant to our employees and directors. Our equity award valuations are estimates and thus may not be reflective of actual future results or amounts ultimately realized by recipients of these grants. These amounts, and the amounts applicable to future quarters, are also subject to future quarterly adjustments based upon a variety of factors, which include, but are not limited to, changes in estimated forfeiture rates and the issuance of new equity-based awards. The fair value of restricted stock units granted to our employees and directors is determined based upon the quoted closing market price per share on the date of grant, adjusted for estimated forfeitures. | ||||||||||||||
Income Taxes | ' | |||||||||||||
Income Taxes | ||||||||||||||
Deferred tax assets and deferred tax liabilities are recognized based on temporary differences between the financial reporting and tax basis of assets and liabilities using future enacted rates. A valuation allowance is recorded against deferred tax assets if it is more likely than not that some or all of our deferred tax assets will not be realized. | ||||||||||||||
Comprehensive Income (Loss) | ' | |||||||||||||
Comprehensive Income (Loss) | ||||||||||||||
The current accounting guidance related to comprehensive income (loss) requires us to display comprehensive loss and its components as part of our consolidated financial statements. Our comprehensive loss consists of net loss and other comprehensive income (loss). Other comprehensive income (loss) includes changes in equity that are excluded from net loss, which for all periods presented related to unrealized holding gains and losses on available-for-sale investments, net of tax. | ||||||||||||||
Net Loss per Share | ' | |||||||||||||
Net Loss per Share | ||||||||||||||
We compute basic net loss per share by dividing net loss by the weighted average number of common shares outstanding during the relevant period. The components of basic and diluted net loss per share were as follows (in thousands, except per share data): | ||||||||||||||
Years Ended December 31, | ||||||||||||||
2013 | 2012 | 2011 | ||||||||||||
Net loss | $ | (9,602 | ) | $ | (16,750 | ) | $ | (77,069 | ) | |||||
Weighted average common shares outstanding | 21,703 | 21,392 | 21,189 | |||||||||||
Net loss per share: | ||||||||||||||
Basic and diluted | $ | (0.44 | ) | $ | (0.78 | ) | $ | (3.64 | ) | |||||
The following table sets forth the potential common shares issuable upon the exercise of outstanding options and the vesting of restricted stock units (prior to consideration of the treasury stock method), that were excluded from our computation of diluted net loss per share because such options and restricted stock units were anti-dilutive (in thousands): | ||||||||||||||
Years Ended | ||||||||||||||
December 31, | ||||||||||||||
2013 | 2012 | 2011 | ||||||||||||
Options to purchase shares of common stock | 2,820 | 2,190 | 1,817 | |||||||||||
Shares of common stock issuable upon the vesting of restricted stock units | 465 | 374 | 669 | |||||||||||
| | | | | | | | | | | ||||
Total | 3,285 | 2,564 | 2,486 | |||||||||||
| | | | | | | | | | | ||||
| | | | | | | | | | | ||||
Reclassifications | ' | |||||||||||||
Reclassifications | ||||||||||||||
Certain amounts in prior periods have been reclassified in order to conform to the current period presentation. | ||||||||||||||
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Summary of Significant Accounting Policies | ' | |||||||||||||
Schedule of assets and liabilities measured at fair value on a recurring basis | ' | |||||||||||||
The following tables represent the fair value hierarchy as of December 31, 2013 and 2012, for those assets and liabilities that we measure at fair value on a recurring basis (in thousands): | ||||||||||||||
Fair Value Measurements at December 31, 2013 Using: | ||||||||||||||
Total | Quoted Prices in | Significant Other | Significant | |||||||||||
Active Markets for | Observable Inputs | Unobservable | ||||||||||||
Identical Assets | (Level 2) | Inputs | ||||||||||||
(Level 1) | (Level 3) | |||||||||||||
Assets: | ||||||||||||||
Money market funds | $ | 18,767 | $ | 18,767 | $ | — | $ | — | ||||||
Corporate debt securities | 134,123 | — | 134,123 | — | ||||||||||
U.S. treasury and government agency securities | 52,680 | — | 52,680 | — | ||||||||||
| | | | | | | | | | | | | | |
Total Assets | $ | 205,570 | $ | 18,767 | $ | 186,803 | $ | — | ||||||
Liabilities: | ||||||||||||||
Acquisition-related contingent consideration | $ | 14,550 | $ | — | $ | — | $ | 14,550 | ||||||
| | | | | | | | | | | | | | |
Total Liabilities | $ | 14,550 | $ | — | $ | — | $ | 14,550 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Fair Value Measurements at December 31, 2012 Using: | ||||||||||||||
Total | Quoted Prices in | Significant Other | Significant | |||||||||||
Active | Observable Inputs | Unobservable | ||||||||||||
Markets for | (Level 2) | Inputs | ||||||||||||
Identical Assets | (Level 3) | |||||||||||||
(Level 1) | ||||||||||||||
Money market funds | $ | 24,058 | $ | 24,058 | $ | — | $ | — | ||||||
Corporate debt securities | 111,690 | — | 111,690 | — | ||||||||||
U.S. treasury and government agency securities | 59,569 | — | 59,569 | — | ||||||||||
Commercial paper | 9,491 | — | 9,491 | — | ||||||||||
| | | | | | | | | | | | | | |
$ | 204,808 | $ | 24,058 | $ | 180,750 | $ | — | |||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Schedule of rollforward of Level 3 assets | ' | |||||||||||||
In 2012, our Level 3 assets consisted solely of auction rate securities, which we sold in mid-2012. The following table provides a rollforward of these Level 3 assets for 2012 (in thousands): | ||||||||||||||
December 31, 2012 | ||||||||||||||
Balance at beginning of period | $ | 17,527 | ||||||||||||
Transfers to Level 3 | — | |||||||||||||
Total gains (losses) (realized or unrealized): | ||||||||||||||
Included in earnings | (1,471 | ) | ||||||||||||
Included in other comprehensive income (loss) | 2,373 | |||||||||||||
Purchases, issuances, sales and settlements: | ||||||||||||||
Purchases | — | |||||||||||||
Issuances | — | |||||||||||||
Sales | (18,329 | ) | ||||||||||||
Settlements | (100 | ) | ||||||||||||
| | | | | ||||||||||
Balance at end of period | $ | — | ||||||||||||
| | | | | ||||||||||
| | | | | ||||||||||
The amount of total gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to assets still held at end of period | $ | — | ||||||||||||
| | | | | ||||||||||
| | | | | ||||||||||
Schedule of reconciliation of contingent consideration obligations related to acquisition of MuGard rights measured on recurring basis using Level 3 inputs | ' | |||||||||||||
The following table presents a reconciliation of contingent consideration obligations related to our acquisition of the MuGard Rights measured on a recurring basis using Level 3 inputs as of December 31, 2013 (in thousands): | ||||||||||||||
Balance as of June 6, 2013 | $ | — | ||||||||||||
Acquisition date fair value of contingent consideration | 13,700 | |||||||||||||
| | | | | ||||||||||
Balance as of June 30, 2013 | $ | 13,700 | ||||||||||||
Payments made | (51 | ) | ||||||||||||
Adjustments to fair value of contingent consideration | 1,074 | |||||||||||||
Other adjustments | (173 | ) | ||||||||||||
| | | | | ||||||||||
Balance as of December 31, 2013 | $ | 14,550 | ||||||||||||
| | | | | ||||||||||
| | | | | ||||||||||
Analysis of U.S. Feraheme product sales allowances and accruals | ' | |||||||||||||
An analysis of our U.S. Feraheme product sales allowances and accruals for the years ended December 31, 2013, 2012 and 2011 is as follows (in thousands): | ||||||||||||||
2013 | 2012 | 2011 | ||||||||||||
Provision for U.S. product sales allowances and accruals | ||||||||||||||
Discounts and chargebacks | $ | 37,098 | $ | 26,517 | $ | 13,851 | ||||||||
Government and other rebates | 10,868 | 6,058 | 8,544 | |||||||||||
Medicaid rebate reserve adjustment | (568 | ) | (621 | ) | (2,532 | ) | ||||||||
Returns | 952 | (1,516 | ) | 1,259 | ||||||||||
| | | | | | | | | | | ||||
Total provision for U.S. product sales allowances and accruals | $ | 48,350 | $ | 30,438 | $ | 21,122 | ||||||||
Total gross U.S. product sales | $ | 119,712 | $ | 88,725 | $ | 73,219 | ||||||||
Total provision for U.S. product sales allowances and accruals as a percent of total gross U.S. product sales | 40 | % | 34 | % | 29 | % | ||||||||
Schedule of customers representing 10% or more of revenues | ' | |||||||||||||
The following table sets forth customers who represented 10% or more of our total revenues for 2013, 2012 and 2011: | ||||||||||||||
Years Ended | ||||||||||||||
December 31, | ||||||||||||||
2013 | 2012 | 2011 | ||||||||||||
AmerisourceBergen Drug Corporation | 41 | % | 34 | % | 41 | % | ||||||||
McKesson Corporation | 24 | % | 17 | % | 21 | % | ||||||||
Cardinal Health, Inc. | 16 | % | 12 | % | 13 | % | ||||||||
Takeda Pharmaceuticals Company Limited | 11 | % | 31 | % | 13 | % | ||||||||
Schedule of components of basic and diluted net loss per share | ' | |||||||||||||
The components of basic and diluted net loss per share were as follows (in thousands, except per share data): | ||||||||||||||
Years Ended December 31, | ||||||||||||||
2013 | 2012 | 2011 | ||||||||||||
Net loss | $ | (9,602 | ) | $ | (16,750 | ) | $ | (77,069 | ) | |||||
Weighted average common shares outstanding | 21,703 | 21,392 | 21,189 | |||||||||||
Net loss per share: | ||||||||||||||
Basic and diluted | $ | (0.44 | ) | $ | (0.78 | ) | $ | (3.64 | ) | |||||
Schedule of anti-dilutive securities excluded from computation of diluted net loss per share | ' | |||||||||||||
The following table sets forth the potential common shares issuable upon the exercise of outstanding options and the vesting of restricted stock units (prior to consideration of the treasury stock method), that were excluded from our computation of diluted net loss per share because such options and restricted stock units were anti-dilutive (in thousands): | ||||||||||||||
Years Ended | ||||||||||||||
December 31, | ||||||||||||||
2013 | 2012 | 2011 | ||||||||||||
Options to purchase shares of common stock | 2,820 | 2,190 | 1,817 | |||||||||||
Shares of common stock issuable upon the vesting of restricted stock units | 465 | 374 | 669 | |||||||||||
| | | | | | | | | | | ||||
Total | 3,285 | 2,564 | 2,486 | |||||||||||
| | | | | | | | | | | ||||
| | | | | | | | | | | ||||
Investments_Tables
Investments (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Investments | ' | |||||||||||||
Summary of investments | ' | |||||||||||||
The following is a summary of our investments as of December 31, 2013 and 2012 (in thousands): | ||||||||||||||
December 31, 2013 | ||||||||||||||
Amortized | Gross | Gross | Estimated | |||||||||||
Cost | Unrealized | Unrealized | Fair | |||||||||||
Gains | Losses | Value | ||||||||||||
Corporate debt securities | ||||||||||||||
Due in one year or less | $ | 42,609 | $ | 44 | $ | (4 | ) | $ | 42,649 | |||||
Due in one to three years | 91,443 | 137 | (106 | ) | 91,474 | |||||||||
U.S. treasury and government agency securities | ||||||||||||||
Due in one year or less | 18,526 | 19 | — | 18,545 | ||||||||||
Due in one to three years | 34,123 | 37 | (25 | ) | 34,135 | |||||||||
| | | | | | | | | | | | | | |
Total investments | $ | 186,701 | $ | 237 | $ | (135 | ) | $ | 186,803 | |||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
December 31, 2012 | ||||||||||||||
Amortized | Gross | Gross | Estimated | |||||||||||
Cost | Unrealized | Unrealized | Fair | |||||||||||
Gains | Losses | Value | ||||||||||||
Corporate debt securities | ||||||||||||||
Due in one year or less | $ | 52,332 | $ | 88 | $ | (6 | ) | $ | 52,414 | |||||
Due in one to three years | 59,176 | 137 | (37 | ) | 59,276 | |||||||||
U.S. treasury and government agency securities | ||||||||||||||
Due in one year or less | 24,795 | 86 | — | 24,881 | ||||||||||
Due in one to three years | 34,606 | 84 | (2 | ) | 34,688 | |||||||||
Commercial paper | ||||||||||||||
Due in one year or less | 9,494 | 1 | (4 | ) | 9,491 | |||||||||
| | | | | | | | | | | | | | |
Total investments | $ | 180,403 | $ | 396 | $ | (49 | ) | $ | 180,750 | |||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Accounts_Receivable_Net_Tables
Accounts Receivable, Net (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Accounts Receivable, Net | ' | |||||||
Schedule of customers representing greater than 10% of accounts receivable balances | ' | |||||||
Customers which represented greater than 10% of our accounts receivable balances as of December 31, 2013 and 2012 were as follows: | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
AmerisourceBergen Drug Corporation | 43 | % | 48 | % | ||||
McKesson Corporation | 29 | % | 28 | % | ||||
Cardinal Health, Inc. | 19 | % | 18 | % |
Inventories_Tables
Inventories (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Inventories | ' | |||||||
Schedule of major classes of inventories | ' | |||||||
Our major classes of inventories were as follows as of December 31, 2013 and 2012 (in thousands): | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
Raw materials | $ | 3,157 | $ | 2,652 | ||||
Work in process | 8,322 | 2,524 | ||||||
Finished goods | 5,738 | 7,275 | ||||||
| | | | | | | | |
Total inventories | $ | 17,217 | $ | 12,451 | ||||
| | | | | | | | |
| | | | | | | | |
Property_and_Equipment_Net_Tab
Property and Equipment, Net (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Property and Equipment, Net | ' | |||||||
Schedule of property and equipment | ' | |||||||
Property and equipment consisted of the following as of December 31, 2013 and 2012, respectively (in thousands): | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
Furniture and fixtures | $ | 1,536 | $ | 5,326 | ||||
Leasehold improvements | 430 | 5,373 | ||||||
Laboratory and production equipment | 376 | 115 | ||||||
Construction in process | — | 228 | ||||||
| | | | | | | | |
2,342 | 11,042 | |||||||
Less—accumulated depreciation | (496 | ) | (7,745 | ) | ||||
| | | | | | | | |
Property and equipment, net | $ | 1,846 | $ | 3,297 | ||||
| | | | | | | | |
| | | | | | | | |
Business_Combination_Tables
Business Combination (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Business Combination | ' | ||||
Summary of total consideration for the MuGard Rights | ' | ||||
The following table summarizes the total consideration for the MuGard Rights (in thousands): | |||||
Consideration: | |||||
Cash | $ | 3,434 | |||
Acquisition-related contingent consideration | 13,700 | ||||
| | | | | |
Total consideration | $ | 17,134 | |||
| | | | | |
| | | | | |
Summary of estimated fair values of the assets acquired related to the business combination | ' | ||||
The following table summarizes the estimated fair values of the assets acquired related to the business combination as of the Acquisition Date (in thousands): | |||||
Assets Acquired: | |||||
MuGard intangible asset | $ | 16,893 | |||
Inventory | 241 | ||||
| | | | | |
Net identifiable assets acquired | $ | 17,134 | |||
| | | | | |
| | | | | |
Intangible_Assets_Net_Tables
Intangible Assets, Net (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Intangible Assets, Net | ' | ||||
Schedule of expected future annual amortization expense related to intangible asset | ' | ||||
We expect future annual amortization expense related to our intangible asset to be as follows (in thousands): | |||||
Period | Estimated | ||||
Amortization | |||||
Expense | |||||
Year Ended December 31, 2014 | 679 | ||||
Year Ended December 31, 2015 | 914 | ||||
Year Ended December 31, 2016 | 1,215 | ||||
Year Ended December 31, 2017 | 1,616 | ||||
Year Ended December 31, 2018 | 2,103 | ||||
Thereafter | 10,317 | ||||
| | | | | |
Total | $ | 16,844 | |||
| | | | | |
| | | | | |
Current_and_LongTerm_Liabiliti1
Current and Long-Term Liabilities (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Current and Long-Term Liabilities | ' | |||||||
Schedule of accrued expenses | ' | |||||||
Accrued expenses consisted of the following as of December 31, 2013 and 2012 (in thousands): | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
Clinical, manufacturing and regulatory consulting fees and expenses | $ | 7,834 | $ | 7,737 | ||||
Salaries, bonuses, and other compensation | 5,419 | 5,236 | ||||||
Commercial rebates, fees and returns | 4,839 | 3,448 | ||||||
Professional, license, and other fees and expenses | 1,932 | 1,719 | ||||||
Commercial consulting fees and expenses | 1,301 | 815 | ||||||
Short-term contingent consideration | 941 | — | ||||||
Restructuring expense | — | 1,383 | ||||||
| | | | | | | | |
Total accrued expenses | $ | 22,266 | $ | 20,338 | ||||
| | | | | | | | |
| | | | | | | | |
Schedule of deferred revenues | ' | |||||||
Deferred revenues consisted of the following as of December 31, 2013 and 2012 (in thousands): | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
Short-term deferred revenues: | ||||||||
Takeda | $ | 8,226 | $ | 8,854 | ||||
Other short-term deferred revenues | — | 250 | ||||||
| | | | | | | | |
Total | $ | 8,226 | $ | 9,104 | ||||
| | | | | | | | |
| | | | | | | | |
Long-term deferred revenues: | ||||||||
Takeda | $ | 43,534 | $ | 49,350 | ||||
3SBio | 1,000 | 1,000 | ||||||
| | | | | | | | |
Total | $ | 44,534 | $ | 50,350 | ||||
| | | | | | | | |
| | | | | | | | |
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Income Taxes | ' | ||||||||||
Schedule of reconciliation of the statutory U.S. federal income tax rate to the entity's effective income tax rate | ' | ||||||||||
The reconciliation of the statutory U.S. federal income tax rate to our effective income tax rate is as follows: | |||||||||||
Years Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Statutory U.S. federal tax rate | (34.0 | )% | (34.0 | )% | (34.0 | )% | |||||
State taxes, net of federal benefit | 2.4 | % | 4.2 | % | (3.4 | )% | |||||
Equity-based compensation expense | 9.4 | % | 42.4 | % | 2.4 | % | |||||
Permanent items, net | 5.3 | % | 1.2 | % | 0.4 | % | |||||
Tax credits | 0.5 | % | 0.8 | % | (1.6 | )% | |||||
Valuation allowance | 16.4 | % | (19.5 | )% | 34.7 | % | |||||
| | | | | | | | | | | |
Total tax (benefit) expense | 0 | % | (4.9 | )% | (1.5 | )% | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Schedule of components of the entity's deferred tax assets and liabilities | ' | ||||||||||
The components of our deferred tax assets and liabilities are as follows (in thousands): | |||||||||||
December 31, | |||||||||||
2013 | 2012 | ||||||||||
Assets | |||||||||||
Net operating loss carryforwards | $ | 85,269 | $ | 75,740 | |||||||
Tax credit carryforwards | 12,396 | 12,403 | |||||||||
Deferred revenue | 20,368 | 22,315 | |||||||||
Equity-based compensation expense | 4,176 | 3,681 | |||||||||
Capitalized research & development | 39,214 | 45,137 | |||||||||
Intangibles | 680 | ||||||||||
Other | 4,371 | 4,239 | |||||||||
Property and Equipment Depreciation | — | 1,393 | |||||||||
Liabilities | |||||||||||
Property, Plant, and Equipment Depreciation | (58 | ) | — | ||||||||
| | | | | | | | ||||
166,416 | 164,908 | ||||||||||
Valuation allowance | (166,416 | ) | (164,908 | ) | |||||||
| | | | | | | | ||||
Net deferred taxes | $ | — | $ | — | |||||||
| | | | | | | |
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Loss (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Accumulated Other Comprehensive Loss | ' | |||||||
Schedule of changes in AOCI, net of tax | ' | |||||||
The changes in AOCI, net of tax, for 2013 and 2012 consisted of the following (in thousands): | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
Beginning Balance | $ | (3,247 | ) | $ | (4,842 | ) | ||
Other comprehensive income (loss) before reclassifications | (268 | ) | 129 | |||||
Gain (loss) reclassified from other accumulated comprehensive loss | 24 | 1,466 | ||||||
| | | | | | | | |
Ending Balance | $ | (3,491 | ) | $ | (3,247 | ) | ||
| | | | | | | | |
| | | | | | | | |
EquityBased_Compensation_Table
Equity-Based Compensation (Tables) | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||
Equity-Based Compensation | ' | |||||||||||||||||||
Schedule of equity-based compensation expense | ' | |||||||||||||||||||
Equity-based compensation expense for 2013, 2012 and 2011 consisted of the following (in thousands): | ||||||||||||||||||||
Years Ended December 31, | ||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||
Cost of product sales | $ | 121 | $ | 225 | $ | 616 | ||||||||||||||
Research and development | 2,149 | 1,994 | 1,874 | |||||||||||||||||
Selling, general and administrative | 5,734 | 4,805 | 7,548 | |||||||||||||||||
| | | | | | | | | | | ||||||||||
Total equity-based compensation expense | $ | 8,004 | $ | 7,024 | $ | 10,038 | ||||||||||||||
| | | | | | | | | | | ||||||||||
| | | | | | | | | | | ||||||||||
Summary of weighted average assumptions used for valuing option awards granted | ' | |||||||||||||||||||
The following table summarizes the weighted average assumptions we utilized for purposes of valuing grants of options to our employees and non-employee directors: | ||||||||||||||||||||
Years Ended December 31, | ||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||
Employees | Non-Employee | Employees | Non-Employee | Employees | Non-Employee | |||||||||||||||
Directors | Directors | Directors | ||||||||||||||||||
Risk free interest rate (%) | 0.95 | 0.85 | 0.66 | 0.68 | 1.67 | 1.36 | ||||||||||||||
Expected volatility (%) | 59 | 46 | 57 | 56 | 51 | 51 | ||||||||||||||
Expected option term (years) | 5 | 4 | 4.66 | 4 | 5.5 | 4 | ||||||||||||||
Dividend yield | none | none | none | none | none | none | ||||||||||||||
Summary of details regarding stock options granted under equity incentive plans | ' | |||||||||||||||||||
The following table summarizes details regarding stock options granted under our equity incentive plans for the year ended December 31, 2013: | ||||||||||||||||||||
December 31, 2013 | ||||||||||||||||||||
Options | Weighted Average | Weighted | Aggregate Intrinsic | |||||||||||||||||
Exercise Price | Average | Value ($ in | ||||||||||||||||||
Remaining | millions) | |||||||||||||||||||
Contractual | ||||||||||||||||||||
Term | ||||||||||||||||||||
Outstanding at beginning of year | 2,190,073 | $ | 23.07 | |||||||||||||||||
Granted | 1,120,050 | 18.73 | ||||||||||||||||||
Exercised | (123,658 | ) | 15.02 | |||||||||||||||||
Expired and/or forfeited | (366,789 | ) | 26.06 | |||||||||||||||||
| | | | | | | | | | | | | | |||||||
Outstanding at end of year | 2,819,676 | $ | 21.31 | 7.1 | $ | 17.5 | ||||||||||||||
| | | | | | | | | | | | | | |||||||
| | | | | | | | | | | | | | |||||||
Outstanding at end of year—vested and unvested expected to vest | 2,644,475 | $ | 21.51 | 7.1 | $ | 16.4 | ||||||||||||||
| | | | | | | | | | | | | | |||||||
| | | | | | | | | | | | | | |||||||
Exercisable at end of year | 1,003,804 | $ | 28.75 | 5.2 | $ | 4 | ||||||||||||||
| | | | | | | | | | | | | | |||||||
| | | | | | | | | | | | | | |||||||
Summary of details regarding restricted stock units granted under equity incentive plans | ' | |||||||||||||||||||
The following table summarizes details regarding restricted stock units granted under our equity incentive plans for the year ended December 31, 2013: | ||||||||||||||||||||
December 31, 2013 | ||||||||||||||||||||
Unvested | Weighted Average | |||||||||||||||||||
Restricted | Grant Date | |||||||||||||||||||
Stock Units | Fair Value | |||||||||||||||||||
Outstanding at beginning of year | 373,676 | $ | 17.02 | |||||||||||||||||
Granted | 270,525 | 16.31 | ||||||||||||||||||
Vested | (152,889 | ) | 18.44 | |||||||||||||||||
Forfeited | (25,918 | ) | 20.77 | |||||||||||||||||
| | | | | | | | |||||||||||||
Outstanding at end of year | 465,394 | $ | 17.28 | |||||||||||||||||
| | | | | | | | |||||||||||||
| | | | | | | | |||||||||||||
Outstanding at end of year and expected to vest | 382,897 | $ | 17.26 | |||||||||||||||||
| | | | | | | | |||||||||||||
| | | | | | | | |||||||||||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Commitments and Contingencies | ' | ||||
Schedule of future minimum rent payments | ' | ||||
The lease requires us to pay base rent during the initial term as follows (in thousands): | |||||
Period | Minimum Lease | ||||
Payments | |||||
Year Ended December 31, 2014 | $ | 1,128 | |||
Year Ended December 31, 2015 | 1,128 | ||||
Year Ended December 31, 2016 | 1,128 | ||||
Year Ended December 31, 2017 | 1,128 | ||||
Thereafter | 1,034 | ||||
| | | | | |
Total | $ | 5,546 | |||
| | | | | |
| | | | | |
Restructuring_Tables
Restructuring (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Restructuring | ' | |||||||
Schedule of components of restructuring expenses and current liabilities | ' | |||||||
The following table outlines the components of our restructuring expenses which were recorded in operating expenses and current liabilities for 2013 and 2012 (in thousands): | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
Accrued restructuring, beginning of period | $ | 1,383 | $ | 2,366 | ||||
Employee severance, benefits and related costs | — | 1,624 | ||||||
Payments | (1,383 | ) | (2,674 | ) | ||||
Inventory and other adjustments | — | 67 | ||||||
| | | | | | | | |
Accrued restructuring, end of period | $ | — | $ | 1,383 | ||||
| | | | | | | | |
| | | | | | | | |
Consolidated_Quarterly_Financi1
Consolidated Quarterly Financial Data-Unaudited (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Consolidated Quarterly Financial Data-Unaudited | ' | |||||||||||||
Schedule of unaudited consolidated quarterly financial data | ' | |||||||||||||
The following tables provide unaudited consolidated quarterly financial data for 2013 and 2012 (in thousands, except per share data): | ||||||||||||||
March 31, 2013 | June 30, 2013 | September 30, 2013 | December 31, 2013 | |||||||||||
U.S. Feraheme product sales, net(a) | $ | 15,578 | $ | 17,456 | $ | 19,347 | $ | 18,981 | ||||||
License fee and other collaboration revenues | 2,003 | 2,055 | 1,998 | 2,329 | ||||||||||
Other product sales and royalties | 299 | 138 | 271 | 401 | ||||||||||
| | | | | | | | | | | | | | |
Total revenues | 17,880 | 19,649 | 21,616 | 21,711 | ||||||||||
Cost of product sales | 2,942 | 3,145 | 2,547 | 3,326 | ||||||||||
Gross margin | 14,938 | 16,504 | 19,069 | 18,385 | ||||||||||
Operating expenses | 19,409 | 19,260 | 19,464 | 22,380 | ||||||||||
Interest and dividend income, net | 271 | 256 | 246 | 278 | ||||||||||
Gains on assets held for sale | 299 | 566 | — | 59 | ||||||||||
Gains on investments, net | 6 | 26 | 4 | 4 | ||||||||||
| | | | | | | | | | | | | | |
Net loss | $ | (3,895 | ) | $ | (1,908 | ) | $ | (145 | ) | $ | (3,654 | ) | ||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Net loss per share—basic and diluted | $ | (0.18 | ) | $ | (0.09 | ) | $ | (0.01 | ) | $ | (0.17 | ) | ||
March 31, 2012 | June 30, 2012 | September 30, 2012 | December 31, 2012 | |||||||||||
U.S. product sales, net(a) | $ | 13,626 | $ | 14,094 | $ | 16,186 | $ | 14,381 | ||||||
License fee and other collaboration revenues(b) | 1,753 | 16,592 | 1,566 | 6,564 | ||||||||||
Other product sales and royalties | 101 | 326 | -10 | 199 | ||||||||||
| | | | | | | | | | | | | | |
Total revenues | 15,480 | 31,012 | 17,742 | 21,144 | ||||||||||
Cost of product sales | 2,646 | 3,224 | 4,323 | 4,027 | ||||||||||
Gross margin | 12,834 | 27,788 | 13,419 | 17,117 | ||||||||||
Operating expenses | 25,643 | 22,772 | 17,420 | 20,532 | ||||||||||
Restructuring expenses(c) | — | 1,058 | 562 | 595 | ||||||||||
Interest and dividend income, net | 393 | 338 | 295 | 260 | ||||||||||
(Losses) gains on investments, net(d) | — | (1,471 | ) | 2 | 3 | |||||||||
Income tax benefit | — | 494 | 299 | 61 | ||||||||||
| | | | | | | | | | | | | | |
Net income (loss) | $ | (12,416 | ) | $ | 3,319 | $ | (3,967 | ) | $ | (3,686 | ) | |||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Net income (loss) per share—basic | $ | (0.58 | ) | $ | 0.16 | $ | (0.19 | ) | $ | (0.17 | ) | |||
Net income (loss) per share—diluted | $ | (0.58 | ) | $ | 0.15 | $ | (0.19 | ) | $ | (0.17 | ) | |||
Quarterly loss per share totals differ from annual loss per share totals due to rounding. | ||||||||||||||
(a) In each of the quarters ended September 30, 2013 and 2012, we revised our estimated Medicaid utilization rate, which resulted in a reduction of our estimated Medicaid rebate reserve related to prior year Feraheme sales of $0.6 million. In addition, in the first three quarters of 2012 we reduced our reserve for product returns by $2.2 million. | ||||||||||||||
(b) During the quarters ended June 30, 2012 and December 31, 2012, we recognized $15.0 million and $5.0 million related to certain milestone payments we received from Takeda upon the EU marketing authorization of Rienso and the commercial launches of Feraheme/Rienso in Canada and the EU, respectively. | ||||||||||||||
(c) In 2012 we carried out corporate restructurings pursuant to which we reduced our workforce and incurred charges related to employee severance and other related costs. See Note R. | ||||||||||||||
(d) In June 2012, we sold our then remaining ARS portfolio and recognized a loss of approximately $1.5 million. | ||||||||||||||
Valuation_and_Qualifying_Accou1
Valuation and Qualifying Accounts (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Valuation and Qualifying Accounts | ' | |||||||||||||
Schedule of valuation and qualifying accounts | ' | |||||||||||||
Balance at | Additions(a) | Deductions | Balance at | |||||||||||
Beginning | Charged to | End of | ||||||||||||
of Period | Reserves | Period | ||||||||||||
Year ended December 31, 2013: | ||||||||||||||
Accounts receivable allowances(b) | $ | 1,771 | $ | 37,098 | $ | (36,186 | ) | $ | 2,683 | |||||
Rebates, fees and returns reserves | $ | 3,448 | $ | 11,820 | $ | (10,469 | ) | $ | 4,799 | |||||
Year ended December 31, 2012: | ||||||||||||||
Accounts receivable allowances(b) | $ | 1,822 | $ | 26,517 | $ | (26,568 | ) | $ | 1,771 | |||||
Rebates, fees and returns reserves | $ | 5,943 | $ | 6,729 | $ | (9,224 | ) | $ | 3,448 | |||||
Year ended December 31, 2011: | ||||||||||||||
Accounts receivable allowances(b) | $ | 1,148 | $ | 14,074 | $ | (13,400 | ) | $ | 1,822 | |||||
Rebates, fees and returns reserves | $ | 10,015 | $ | 9,864 | $ | (13,936 | ) | $ | 5,943 | |||||
(a) | ||||||||||||||
Additions to sales discounts, rebates, fees and returns reserves are recorded as a reduction of revenues. | ||||||||||||||
(b) | ||||||||||||||
We have not recorded an allowance for doubtful accounts in any of the years presented above. These accounts receivable allowances represent discounts and other chargebacks related to the provision for U.S. Feraheme product sales. | ||||||||||||||
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details) (Recurring basis, USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Fair value of assets and liabilities measured on a recurring basis | ' | ' |
Transfers or reclassifications of securities from Level 1 to Level 2 | $0 | $0 |
Transfers or reclassifications of securities from Level 2 to Level 1 | 0 | 0 |
Total | ' | ' |
Fair value of assets and liabilities measured on a recurring basis | ' | ' |
Total Assets | 205,570 | 204,808 |
Total Liabilities | 14,550 | ' |
Total | Acquisition-related contingent consideration | ' | ' |
Fair value of assets and liabilities measured on a recurring basis | ' | ' |
Total Liabilities | 14,550 | ' |
Total | Money market funds | ' | ' |
Fair value of assets and liabilities measured on a recurring basis | ' | ' |
Total Assets | 18,767 | 24,058 |
Total | Corporate debt securities | ' | ' |
Fair value of assets and liabilities measured on a recurring basis | ' | ' |
Total Assets | 134,123 | 111,690 |
Total | U.S. treasury and government agency securities | ' | ' |
Fair value of assets and liabilities measured on a recurring basis | ' | ' |
Total Assets | 52,680 | 59,569 |
Total | Commercial paper | ' | ' |
Fair value of assets and liabilities measured on a recurring basis | ' | ' |
Total Assets | ' | 9,491 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ' | ' |
Fair value of assets and liabilities measured on a recurring basis | ' | ' |
Total Assets | 18,767 | 24,058 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Money market funds | ' | ' |
Fair value of assets and liabilities measured on a recurring basis | ' | ' |
Total Assets | 18,767 | 24,058 |
Significant Other Observable Inputs (Level 2) | ' | ' |
Fair value of assets and liabilities measured on a recurring basis | ' | ' |
Total Assets | 186,803 | 180,750 |
Significant Other Observable Inputs (Level 2) | Corporate debt securities | ' | ' |
Fair value of assets and liabilities measured on a recurring basis | ' | ' |
Total Assets | 134,123 | 111,690 |
Significant Other Observable Inputs (Level 2) | U.S. treasury and government agency securities | ' | ' |
Fair value of assets and liabilities measured on a recurring basis | ' | ' |
Total Assets | 52,680 | 59,569 |
Significant Other Observable Inputs (Level 2) | Commercial paper | ' | ' |
Fair value of assets and liabilities measured on a recurring basis | ' | ' |
Total Assets | ' | 9,491 |
Significant Unobservable Inputs (Level 3) | ' | ' |
Fair value of assets and liabilities measured on a recurring basis | ' | ' |
Total Liabilities | 14,550 | ' |
Significant Unobservable Inputs (Level 3) | Acquisition-related contingent consideration | ' | ' |
Fair value of assets and liabilities measured on a recurring basis | ' | ' |
Total Liabilities | $14,550 | ' |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies (Details 2) (USD $) | 12 Months Ended | 0 Months Ended | 6 Months Ended | 12 Months Ended | |||||
Dec. 31, 2013 | Dec. 31, 2012 | Jun. 06, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | |
Access | Access | Access | Access | Access | Access | Access | |||
MuGard Rights | MuGard Rights | MuGard Rights | MuGard Rights | MuGard Rights | MuGard Rights | MuGard Rights | |||
Significant Unobservable Inputs (Level 3) | Recurring basis | Minimum | Maximum | ||||||
Significant Unobservable Inputs (Level 3) | |||||||||
Rollforward of Level 3 assets | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Balance at beginning of period | ' | $17,527,000 | ' | ' | ' | ' | ' | ' | ' |
Total gains (losses) (realized or unrealized): | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Included in earnings | ' | -1,471,000 | ' | ' | ' | ' | ' | ' | ' |
Included in other comprehensive income (loss) | ' | 2,373,000 | ' | ' | ' | ' | ' | ' | ' |
Purchases, issuances, sales, and settlements: | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sales | ' | -18,329,000 | ' | ' | ' | ' | ' | ' | ' |
Settlements | ' | -100,000 | ' | ' | ' | ' | ' | ' | ' |
Reconciliation of contingent consideration obligations related to acquisition of MuGard rights | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Balance at beginning of period | ' | ' | ' | 13,700,000 | ' | ' | ' | ' | ' |
Acquisition-date fair value of contingent consideration | ' | ' | 13,700,000 | ' | ' | ' | ' | ' | ' |
Payments made | ' | ' | ' | -51,000 | ' | ' | ' | ' | ' |
Adjustments to fair value of contingent consideration | 1,074,000 | ' | ' | 1,074,000 | ' | ' | ' | ' | ' |
Other adjustments | ' | ' | ' | -173,000 | ' | ' | ' | ' | ' |
Balance at end of period | ' | ' | ' | 14,550,000 | 14,550,000 | ' | ' | ' | ' |
Fair value of the contingent consideration | ' | ' | 13,700,000 | ' | ' | ' | ' | ' | ' |
Estimated undiscounted royalty amounts payable | ' | ' | ' | ' | ' | ' | ' | 28,000,000 | 34,000,000 |
Period over which estimated undiscounted royalty amounts could be paid | ' | ' | ' | ' | '10 years | ' | ' | ' | ' |
Intangible assets | ' | ' | ' | ' | ' | 16,900,000 | ' | ' | ' |
Discount rate (as a percent) | ' | ' | ' | ' | ' | 19.00% | 15.00% | ' | ' |
Contingent consideration classified as short-term liability | $941,000 | ' | ' | $900,000 | $900,000 | ' | ' | ' | ' |
Summary_of_Significant_Account5
Summary of Significant Accounting Policies (Details 3) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Restricted Cash | ' | ' | ' | ' | ' | ' |
Total restricted cash | ' | ' | ' | $3,300,000 | $500,000 | ' |
Escrow payment related to business development transaction | ' | ' | ' | 2,883,000 | ' | ' |
Restricted cash related to security deposits | ' | ' | ' | 400,000 | 460,000 | ' |
Advertising Costs | ' | ' | ' | ' | ' | ' |
Advertising costs, including promotional expenses and costs related to trade shows | ' | ' | ' | 1,900,000 | 1,800,000 | 3,100,000 |
Provision for U.S. product sales allowances and accruals | ' | ' | ' | ' | ' | ' |
Discounts and chargebacks | ' | ' | ' | 37,098,000 | 26,517,000 | 13,851,000 |
Government and other rebates | ' | ' | ' | 10,868,000 | 6,058,000 | 8,544,000 |
Medicaid rebate reserve adjustment | 600,000 | 600,000 | 2,200,000 | -568,000 | -621,000 | -2,532,000 |
Returns | ' | ' | ' | 952,000 | -1,516,000 | 1,259,000 |
Total provision for U.S. product sales allowances and accruals | ' | ' | ' | 48,350,000 | 30,438,000 | 21,122,000 |
Total gross U.S. product sales | ' | ' | ' | 119,712,000 | 88,725,000 | 73,219,000 |
Total provision for U.S. product sales allowances and accruals as a percent of total gross U.S. product sales | ' | ' | ' | 40.00% | 34.00% | 29.00% |
Typical average period from time of product sale to payment of rebate, up to or longer than | ' | ' | ' | '3 months | ' | ' |
Discounts | ' | ' | ' | ' | ' | ' |
Percentage of prompt payment discount to customers | ' | ' | ' | 2.00% | ' | ' |
Period within which discount is offered to customers for prompt payment | ' | ' | ' | '30 days | ' | ' |
Accrued percentage of the prompt payment discount | ' | ' | ' | 100.00% | ' | ' |
Government and Other Rebates | ' | ' | ' | ' | ' | ' |
Reduction in Medicaid rebate reserves | ' | ' | ' | 600,000 | 600,000 | 2,500,000 |
Reduction in estimated Medicaid rebate reserve, impact per basic and diluted share (in dollars per share) | ' | ' | ' | $0.03 | $0.03 | $0.12 |
Distributor/Wholesaler and Group Purchasing Organization Fees | ' | ' | ' | ' | ' | ' |
Period within which fees are billed by the GPO | ' | ' | ' | '30 days | ' | ' |
Product Returns | ' | ' | ' | ' | ' | ' |
Current expiration period for packaged products | ' | ' | ' | '5 years | ' | ' |
Reduction of reserve for product returns | ' | ' | ' | ' | 2,200,000 | ' |
Expiration period for certain manufactured Feraheme lots | ' | ' | ' | ' | '2 years | ' |
Product returns provision applied to gross sales | ' | ' | ' | ' | 1,500,000 | ' |
Reduction in estimated product returns reserve, impact per basic and diluted share (in dollars per share) | ' | ' | ' | ' | $0.10 | ' |
Shipping and Handling Costs | ' | ' | ' | ' | ' | ' |
Costs for shipping and handling services | ' | ' | ' | $300,000 | $200,000 | $100,000 |
Laboratory and production equipment | ' | ' | ' | ' | ' | ' |
Property and Equipment | ' | ' | ' | ' | ' | ' |
Estimated useful lives | ' | ' | ' | '5 years | ' | ' |
Furniture and fixtures | ' | ' | ' | ' | ' | ' |
Property and Equipment | ' | ' | ' | ' | ' | ' |
Estimated useful lives | ' | ' | ' | '5 years | ' | ' |
Summary_of_Significant_Account6
Summary of Significant Accounting Policies (Details 4) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Sales Revenue, Net | Sales Revenue, Net | Sales Revenue, Net | Sales Revenue, Net | Sales Revenue, Net | Sales Revenue, Net | Sales Revenue, Net | Sales Revenue, Net | Sales Revenue, Net | Sales Revenue, Net | Sales Revenue, Net | Sales Revenue, Net | Sales Revenue, Net | Sales Revenue, Net | Sales Revenue, Net | Sales Revenue, Net | Sales Revenue, Net | Sales Revenue, Net | |||||
Revenue Concentration Risk | Revenue Concentration Risk | Revenue Concentration Risk | Revenue Concentration Risk | Revenue Concentration Risk | Revenue Concentration Risk | Revenue Concentration Risk | Revenue Concentration Risk | Revenue Concentration Risk | Revenue Concentration Risk | Revenue Concentration Risk | Revenue Concentration Risk | Revenue Concentration Risk | Revenue Concentration Risk | Revenue Concentration Risk | Geographical Concentration Risk | Geographical Concentration Risk | Geographical Concentration Risk | |||||
AmerisourceBergen Drug Corporation. | AmerisourceBergen Drug Corporation. | AmerisourceBergen Drug Corporation. | McKesson Corporation | McKesson Corporation | McKesson Corporation | Cardinal Health, Inc | Cardinal Health, Inc | Cardinal Health, Inc | Takeda Pharmaceutical Company Limited (outside the U.S.) | Takeda Pharmaceutical Company Limited (outside the U.S.) | Takeda Pharmaceutical Company Limited (outside the U.S.) | GPO | GPO | GPO | ||||||||
Investment Concentration Risk | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash, cash equivalents and investments | $213,800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Investment in institutional money market funds | 18,800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash and cash equivalents | 26,986,000 | 46,293,000 | 63,474,000 | 112,646,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount invested in a single money market fund collateralized by U.S. treasury and government agency securities | $12,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Customers representing 10% or more of revenues | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of revenues from major customer | ' | ' | ' | ' | 41.00% | 34.00% | 41.00% | 24.00% | 17.00% | 21.00% | 16.00% | 12.00% | 13.00% | 11.00% | 31.00% | 13.00% | 30.00% | 32.00% | 35.00% | ' | ' | ' |
Percentage of revenues From customers outside of the U.S. | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Approximate percentage of revenues from customers outside the U.S. | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 11.00% | 32.00% | 14.00% |
Summary_of_Significant_Account7
Summary of Significant Accounting Policies (Details 5) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Summary of Significant Accounting Policies | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net loss | ($3,654) | ($145) | ($1,908) | ($3,895) | ($3,686) | ($3,967) | $3,319 | ($12,416) | ($9,602) | ($16,750) | ($77,069) |
Weighted average common shares outstanding | ' | ' | ' | ' | ' | ' | ' | ' | 21,703 | 21,392 | 21,189 |
Net loss per share: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Basic and diluted (in dollars per share) | ($0.17) | ($0.01) | ($0.09) | ($0.18) | ' | ' | ' | ' | ($0.44) | ($0.78) | ($3.64) |
Anti-dilutive securities excluded from the computation of diluted net loss per share | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Anti-dilutive securities (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | 3,285 | 2,564 | 2,486 |
Options to purchase shares of common stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Anti-dilutive securities excluded from the computation of diluted net loss per share | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Anti-dilutive securities (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | 2,820 | 2,190 | 1,817 |
Shares of common stock issuable upon the vesting of restricted stock units | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Anti-dilutive securities excluded from the computation of diluted net loss per share | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Anti-dilutive securities (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | 465 | 374 | 669 |
Investments_Details
Investments (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Summary of Investments | ' | ' |
Available-for-sale securities, Amortized Cost | $186,701 | $180,403 |
Available-for-sale securities, Gross Unrealized Gains | 237 | 396 |
Available-for-sale securities, Gross Unrealized Losses | -135 | -49 |
Available-for-sale securities, Estimated Fair Value | 186,803 | 180,750 |
Corporate debt securities | ' | ' |
Summary of Investments | ' | ' |
Available-for-sale securities due in one year or less, Amortized Cost | 42,609 | 52,332 |
Available-for-sale securities due in one to three years, Amortized Cost | 91,443 | 59,176 |
Available-for-sale securities due in one year or less, Gross Unrealized Gains | 44 | 88 |
Available-for-sale securities due in one to three years, Gross Unrealized Gains | 137 | 137 |
Available-for-sale securities due in one year or less, Gross Unrealized Losses | -4 | -6 |
Available-for-sale securities due in one to three years, Gross Unrealized Losses | -106 | -37 |
Available-for-sale securities due in one year or less, Estimated Fair Value | 42,649 | 52,414 |
Available-for-sale securities due in one to three years, Estimated Fair Value | 91,474 | 59,276 |
U.S. treasury and government agency securities | ' | ' |
Summary of Investments | ' | ' |
Available-for-sale securities due in one year or less, Amortized Cost | 18,526 | 24,795 |
Available-for-sale securities due in one to three years, Amortized Cost | 34,123 | 34,606 |
Available-for-sale securities due in one year or less, Gross Unrealized Gains | 19 | 86 |
Available-for-sale securities due in one to three years, Gross Unrealized Gains | 37 | 84 |
Available-for-sale securities due in one to three years, Gross Unrealized Losses | -25 | -2 |
Available-for-sale securities due in one year or less, Estimated Fair Value | 18,545 | 24,881 |
Available-for-sale securities due in one to three years, Estimated Fair Value | 34,135 | 34,688 |
Commercial paper | ' | ' |
Summary of Investments | ' | ' |
Available-for-sale securities due in one year or less, Amortized Cost | ' | 9,494 |
Available-for-sale securities due in one year or less, Gross Unrealized Gains | ' | 1 |
Available-for-sale securities due in one year or less, Gross Unrealized Losses | ' | -4 |
Available-for-sale securities due in one year or less, Estimated Fair Value | ' | $9,491 |
Investments_Details_2
Investments (Details 2) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | Auction rate securities | |
Summary of Fair Value of Investments with Gross Unrealized Losses | ' | ' |
Investments in unrealized loss position for more than one year | $0 | ' |
Realized Gains and Losses on Investments | ' | ' |
Realized losses | ' | $1.50 |
Accounts_Receivable_Net_Detail
Accounts Receivable, Net (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Accounts Receivable, Net | ' | ' |
Net Accounts receivable | 6,842 | 6,410 |
Accounts Receivable. | Accounts receivable balances | AmerisourceBergen Drug Corporation. | ' | ' |
Customers representing greater than 10% of accounts receivable balances | ' | ' |
Accounts receivable by major customer (as a percent) | 43.00% | 48.00% |
Accounts Receivable. | Accounts receivable balances | McKesson Corporation | ' | ' |
Customers representing greater than 10% of accounts receivable balances | ' | ' |
Accounts receivable by major customer (as a percent) | 29.00% | 28.00% |
Accounts Receivable. | Accounts receivable balances | Cardinal Health, Inc | ' | ' |
Customers representing greater than 10% of accounts receivable balances | ' | ' |
Accounts receivable by major customer (as a percent) | 19.00% | 18.00% |
Inventories_Details
Inventories (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Inventories | ' | ' | ' |
Raw materials | $3,157 | $2,652 | ' |
Work in process | 8,322 | 2,524 | ' |
Finished goods | 5,738 | 7,275 | ' |
Total inventories | 17,217 | 12,451 | ' |
Inventories disclosure | ' | ' | ' |
Inventory expensed | 2,175 | 1,822 | 685 |
U.S. | ' | ' | ' |
Inventories disclosure | ' | ' | ' |
Shelf-life of Feraheme/Rienso | '5 years | ' | ' |
Outside U.S. | Minimum | ' | ' | ' |
Inventories disclosure | ' | ' | ' |
Shelf-life of Feraheme/Rienso | '2 years | ' | ' |
Outside U.S. | Maximum | ' | ' | ' |
Inventories disclosure | ' | ' | ' |
Shelf-life of Feraheme/Rienso | '3 years | ' | ' |
Cost of product sales | ' | ' | ' |
Inventories disclosure | ' | ' | ' |
Inventory expensed | 1,100 | 600 | ' |
Research and development expenses | ' | ' | ' |
Inventories disclosure | ' | ' | ' |
Inventory expensed | 1,100 | 600 | ' |
Restructuring costs | ' | ' | ' |
Inventories disclosure | ' | ' | ' |
Inventory expensed | ' | $700 | ' |
Property_and_Equipment_Net_Det
Property and Equipment, Net (Details) (USD $) | 1 Months Ended | 12 Months Ended | ||
Oct. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Property and Equipment | ' | ' | ' | ' |
Property and Equipment, gross | ' | $2,342,000 | $11,042,000 | ' |
Less - accumulated depreciation | ' | -496,000 | -7,745,000 | ' |
Property and equipment, net | ' | 1,846,000 | 3,297,000 | ' |
Additions to leasehold improvements, furniture and fixtures | ' | 1,632,000 | 47,000 | 507,000 |
Assets held for sale | ' | ' | 2,000,000 | ' |
Proceeds from sale of land and building | 2,000,000 | ' | ' | ' |
Gain on sale of equipment | ' | 400,000 | ' | ' |
Furniture and fixtures | ' | ' | ' | ' |
Property and Equipment | ' | ' | ' | ' |
Property and Equipment, gross | ' | 1,536,000 | 5,326,000 | ' |
Leasehold improvements | ' | ' | ' | ' |
Property and Equipment | ' | ' | ' | ' |
Property and Equipment, gross | ' | 430,000 | 5,373,000 | ' |
Laboratory and production equipment | ' | ' | ' | ' |
Property and Equipment | ' | ' | ' | ' |
Property and Equipment, gross | ' | 376,000 | 115,000 | ' |
Construction in process | ' | ' | ' | ' |
Property and Equipment | ' | ' | ' | ' |
Property and Equipment, gross | ' | ' | 228,000 | ' |
Corporate office | ' | ' | ' | ' |
Property and Equipment | ' | ' | ' | ' |
Depreciation expense | ' | 3,000,000 | ' | ' |
Accelerated depreciation expense | ' | $1,900,000 | ' | ' |
Business_Combination_Details
Business Combination (Details) (MuGard Rights, USD $) | 0 Months Ended | 1 Months Ended | 12 Months Ended |
Jun. 06, 2013 | Jun. 30, 2013 | Dec. 31, 2013 | |
Assets Acquired | ' | ' | ' |
Acquired finite-lived intangible assets | $16,900,000 | ' | $16,800,000 |
Access | ' | ' | ' |
Business Combination | ' | ' | ' |
Upfront payment in consideration of license | ' | 3,300,000 | ' |
Consideration: | ' | ' | ' |
Cash | 3,434,000 | ' | ' |
Acquisition-related contingent consideration | 13,700,000 | ' | ' |
Total consideration | 17,134,000 | ' | ' |
Fair value inputs | ' | ' | ' |
Period over which estimated undiscounted royalty amounts could be paid | ' | ' | '10 years |
Assets Acquired | ' | ' | ' |
Acquired finite-lived intangible assets | 16,893,000 | ' | ' |
Inventory | 241,000 | ' | ' |
Net identifiable assets acquired | 17,134,000 | ' | ' |
Acquisition-related costs | ' | ' | 800,000 |
Access | Significant Unobservable Inputs (Level 3) | ' | ' | ' |
Fair value inputs | ' | ' | ' |
Discount rate (as a percent) | ' | ' | 19.00% |
Access | Recurring basis | Significant Unobservable Inputs (Level 3) | ' | ' | ' |
Fair value inputs | ' | ' | ' |
Discount rate (as a percent) | ' | ' | 15.00% |
Access | Minimum | ' | ' | ' |
Fair value inputs | ' | ' | ' |
Estimated undiscounted royalty amounts payable | ' | ' | 28,000,000 |
Access | Maximum | ' | ' | ' |
Fair value inputs | ' | ' | ' |
Estimated undiscounted royalty amounts payable | ' | ' | $34,000,000 |
Intangible_Assets_Net_Details
Intangible Assets, Net (Details) (MuGard Rights, USD $) | 0 Months Ended | 12 Months Ended | |
Jun. 06, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | |
Maximum | |||
Intangible Assets, Net | ' | ' | ' |
Acquired finite-lived intangible assets | $16,900,000 | $16,800,000 | ' |
Useful life | '10 years | ' | ' |
Amortization of MuGard intangible asset | ' | ' | 100,000 |
Expected future annual amortization expense | ' | ' | ' |
Year Ended December 31, 2014 | ' | 679,000 | ' |
Year Ended December 31, 2015 | ' | 914,000 | ' |
Year Ended December 31, 2016 | ' | 1,215,000 | ' |
Year Ended December 31, 2017 | ' | 1,616,000 | ' |
Year Ended December 31, 2018 | ' | 2,103,000 | ' |
Thereafter | ' | 10,317,000 | ' |
Total | ' | $16,844,000 | ' |
Current_and_LongTerm_Liabiliti2
Current and Long-Term Liabilities (Details) (USD $) | 3 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2012 | Jun. 30, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2010 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2008 | Dec. 31, 2013 | Dec. 31, 2012 | |
Takeda | Takeda | Takeda | Takeda upfront payments and milestone payments | Takeda upfront payments and milestone payments | Takeda products shipped but not yet sold | Other short-term deferred revenues | 3SBio | 3SBio | 3SBio | ||||
Accrued Expenses | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Clinical, manufacturing and regulatory consulting fees and expenses | $7,737,000 | ' | $7,834,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Salaries, bonuses, and other compensation | 5,236,000 | ' | 5,419,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Commercial rebates, fees and returns | 3,448,000 | ' | 4,839,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Professional, license, and other fees and expenses | 1,719,000 | ' | 1,932,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Commercial consulting fees and expenses | 815,000 | ' | 1,301,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Short-term contingent consideration | ' | ' | 941,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Restructuring expense | 1,383,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total accrued expenses | 20,338,000 | ' | 22,266,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred Revenues | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total short-term deferred revenues | 9,104,000 | ' | 8,226,000 | 8,854,000 | ' | 8,226,000 | ' | ' | ' | 250,000 | ' | ' | ' |
Total long-term deferred revenues | 50,350,000 | ' | 44,534,000 | 49,350,000 | ' | 43,534,000 | ' | ' | ' | ' | ' | 1,000,000 | 1,000,000 |
Upfront payment received | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,000,000 | ' | ' |
Amortization period for recognizing nonsubstantive milestone payments | ' | ' | ' | ' | '10 years | ' | ' | ' | ' | ' | ' | ' | ' |
Milestone payments received under agreement related to commercial launches | ' | ' | ' | 18,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Milestone revenue recognized | 5,000,000 | 15,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred revenue recognized | ' | ' | ' | ' | ' | ' | 7,900,000 | 11,100,000 | ' | ' | ' | ' | ' |
Deferred revenues | ' | ' | ' | ' | ' | ' | $49,300,000 | ' | $2,400,000 | ' | ' | ' | ' |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||
Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Income Taxes | ' | ' | ' | ' | ' | ' |
Current Income Tax Expense (Benefit) | ($61,000) | ($299,000) | ($494,000) | ' | ($854,000) | ($1,170,000) |
Reconciliation of statutory U.S. federal income tax rate to effective income tax rate | ' | ' | ' | ' | ' | ' |
Statutory U.S. federal tax rate (as a percent) | ' | ' | ' | -34.00% | -34.00% | -34.00% |
State taxes, net of federal benefit (as a percent) | ' | ' | ' | 2.40% | 4.20% | -3.40% |
Equity-based compensation expense (as a percent) | ' | ' | ' | 9.40% | 42.40% | 2.40% |
Permanent items, net (as a percent) | ' | ' | ' | 5.30% | 1.20% | 0.40% |
Tax credits (as a percent) | ' | ' | ' | 0.50% | 0.80% | -1.60% |
Valuation allowance (as a percent) | ' | ' | ' | 16.40% | -19.50% | 34.70% |
Total tax (benefit) expense (as a percent) | ' | ' | ' | 0.00% | -4.90% | -1.50% |
Assets | ' | ' | ' | ' | ' | ' |
Net operating loss carryforwards | 75,740,000 | ' | ' | 85,269,000 | 75,740,000 | ' |
Tax credit carryforwards | 12,403,000 | ' | ' | 12,396,000 | 12,403,000 | ' |
Deferred revenue | 22,315,000 | ' | ' | 20,368,000 | 22,315,000 | ' |
Equity-based compensation expense | 3,681,000 | ' | ' | 4,176,000 | 3,681,000 | ' |
Capitalized research & development | 45,137,000 | ' | ' | 39,214,000 | 45,137,000 | ' |
Intangibles | ' | ' | ' | 680,000 | ' | ' |
Other | 4,239,000 | ' | ' | 4,371,000 | 4,239,000 | ' |
Property and Equipment Depreciation | 1,393,000 | ' | ' | ' | 1,393,000 | ' |
Liabilities | ' | ' | ' | ' | ' | ' |
Property, Plant, and Equipment Depreciation | ' | ' | ' | -58,000 | ' | ' |
Gross deferred taxes | 164,908,000 | ' | ' | 166,416,000 | 164,908,000 | ' |
Valuation allowance | -164,908,000 | ' | ' | -166,416,000 | -164,908,000 | ' |
Increase (Decrease) in valuation allowance | ' | ' | ' | $1,500,000 | ($2,800,000) | $26,800,000 |
Income_Taxes_Details_2
Income Taxes (Details 2) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Income Taxes | ' | ' |
Unrecognized tax benefits | $0 | $0 |
Federal | ' | ' |
Income Taxes | ' | ' |
NOL carryforwards | 234.5 | ' |
Capital loss carryforwards | 3.3 | ' |
Additional NOLs | 24.6 | ' |
Tax credits | 9.3 | ' |
State | ' | ' |
Income Taxes | ' | ' |
Additional NOLs | 4.8 | ' |
Tax credits | 4.6 | ' |
State | Maximum | ' | ' |
Income Taxes | ' | ' |
NOL carryforwards | $118.90 | ' |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Loss (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Changes in accumulated other comprehensive income, net of tax | ' | ' |
Beginning Balance | ($3,247) | ($4,842) |
Other comprehensive income (loss) before reclassifications | -268 | 129 |
Gain (loss) reclassified from other accumulated comprehensive loss | 24 | 1,466 |
Ending Balance | ($3,491) | ($3,247) |
EquityBased_Compensation_Detai
Equity-Based Compensation (Details) (USD $) | 12 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | ||||||||||||||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Feb. 28, 2013 | Feb. 28, 2013 | 31-May-13 | 31-May-10 | 31-May-09 | Dec. 31, 2013 | 31-May-09 | Dec. 31, 2013 | Dec. 31, 2013 | 31-May-09 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 |
item | Stock options | Stock options | Restricted stock units | Restricted stock units | Restricted stock units | Restricted stock units | 2007 Equity Incentive Plan | 2007 Equity Incentive Plan | 2007 Equity Incentive Plan | 2007 Equity Incentive Plan | 2007 Equity Incentive Plan | 2007 Equity Incentive Plan | 2007 Equity Incentive Plan | 2007 Equity Incentive Plan | 2007 Equity Incentive Plan | 2000 Stock Plan | 2000 Stock Plan | Other Equity Compensation Grants | Other Equity Compensation Grants | Other Equity Compensation Grants | Other Equity Compensation Grants | |
Senior management | Senior management | Stock options | Stock options | Stock options | Restricted stock units | Restricted stock units | Stock options | Stock options | Stock options | Restricted stock units | Restricted stock units | |||||||||||
Maximum | Minimum | Maximum | Senior management | Senior management | Senior management | Senior management | ||||||||||||||||
Equity-Based Compensation | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of equity compensation plans | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Equity compensation plans | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares authorized for issuance | ' | ' | ' | ' | ' | ' | ' | 1,100,000 | 800,000 | 600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Reduction in number of shares available for issuance | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1 | ' | ' | 1.5 | ' | ' | ' | ' | ' | ' | ' |
Award vesting period | ' | ' | ' | ' | ' | '3 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | '4 years | ' | ' | '4 years | '4 years | '4 years | '4 years |
Number of options and restricted stock units granted since inception (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6,289,350 | ' | ' | ' | ' | ' | 2,182,700 | ' | ' | ' | ' | ' |
Number of stock options expired or terminated since inception (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,558,113 | ' | ' | ' | ' | ' | 984,339 | ' | ' | ' | ' | ' |
Number of restricted stock units forfeited since inception (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 626,348 | ' | ' | ' | ' | ' | 1,500 | ' | ' | ' | ' | ' |
Stock options exercised since inception (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 139,146 | ' | ' | ' | ' | ' | 1,049,420 | ' | ' | ' | ' | ' |
Shares of common stock issued pursuant to vested restricted stock units since inception | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 475,614 | ' | ' | ' | ' | ' | 42,500 | ' | ' | ' | ' | ' |
Number of stock options outstanding (in shares) | ' | 2,819,676 | 2,190,073 | ' | ' | ' | ' | ' | ' | ' | 2,199,735 | ' | ' | ' | ' | ' | 104,941 | ' | ' | ' | ' | ' |
Number of restricted stock units outstanding (in shares) | ' | ' | ' | 465,394 | 373,676 | ' | ' | ' | ' | ' | 290,394 | ' | ' | ' | ' | ' | 0 | ' | ' | ' | ' | ' |
Remaining number of shares available for future grants | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,024,621 | ' | ' | ' | ' | ' | 0 | ' | ' | ' | ' | ' |
Expiration term | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '7 years | '10 years | ' | ' | ' | '10 years | ' | ' | ' | ' |
Granted (in shares) | ' | 1,120,050 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 270,000 | 300,000 | ' | ' |
Forfeited (in shares) | ' | -366,789 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -45,000 | ' | ' | ' |
Granted (in shares) | ' | ' | ' | 270,525 | ' | 82,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 115,000 | 100,000 |
Forfeited (in shares) | ' | ' | ' | -25,918 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -15,000 | ' |
Fair value of awards issued | ' | ' | ' | ' | ' | ' | $0.70 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Expense recognition period | ' | '2 years 8 months 12 days | ' | '2 years 1 month 6 days | ' | '3 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
EquityBased_Compensation_Detai1
Equity-Based Compensation (Details 2) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Equity-based compensation expense | ' | ' | ' |
Total equity-based compensation expense | $8,004 | $7,024 | $10,038 |
Cost of product sales | ' | ' | ' |
Equity-based compensation expense | ' | ' | ' |
Total equity-based compensation expense | 121 | 225 | 616 |
Research and development | ' | ' | ' |
Equity-based compensation expense | ' | ' | ' |
Total equity-based compensation expense | 2,149 | 1,994 | 1,874 |
Selling, general and administrative | ' | ' | ' |
Equity-based compensation expense | ' | ' | ' |
Total equity-based compensation expense | $5,734 | $4,805 | $7,548 |
EquityBased_Compensation_Detai2
Equity-Based Compensation (Details 3) (USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Employees | ' | ' | ' |
Weighted average assumptions utilized for purposes of valuing grants of options to employees and non-employee directors | ' | ' | ' |
Risk free interest rate (as a percent) | 0.95% | 0.66% | 1.67% |
Expected volatility (as a percent) | 59.00% | 57.00% | 51.00% |
Expected option term | '5 years | '4 years 7 months 28 days | '5 years 6 months |
Non-Employee Directors | ' | ' | ' |
Weighted average assumptions utilized for purposes of valuing grants of options to employees and non-employee directors | ' | ' | ' |
Risk free interest rate (as a percent) | 0.85% | 0.68% | 1.36% |
Expected volatility (as a percent) | 46.00% | 56.00% | 51.00% |
Expected option term | '4 years | '4 years | '4 years |
Stock options | ' | ' | ' |
Options | ' | ' | ' |
Outstanding at beginning of year (in shares) | 2,190,073 | ' | ' |
Granted (in shares) | 1,120,050 | ' | ' |
Exercised (in shares) | -123,658 | ' | ' |
Expired and/or forfeited (in shares) | -366,789 | ' | ' |
Outstanding at end of year (in shares) | 2,819,676 | 2,190,073 | ' |
Outstanding at end of year - vested and unvested expected to vest (in shares) | 2,644,475 | ' | ' |
Exercisable at end of year (in shares) | 1,003,804 | ' | ' |
Weighted Average Exercise Price | ' | ' | ' |
Outstanding at beginning of year (in dollars per share) | 23.07 | ' | ' |
Granted (in dollars per share) | 18.73 | ' | ' |
Exercised (in dollars per share) | 15.02 | ' | ' |
Expired and/or forfeited (in dollars per share) | 26.06 | ' | ' |
Outstanding at end of year (in dollars per share) | 21.31 | 23.07 | ' |
Outstanding at end of year - vested and unvested expected to vest (in dollars per share) | 21.51 | ' | ' |
Exercisable at end of year (in dollars per share) | 28.75 | ' | ' |
Outstanding at end of year | '7 years 1 month 6 days | ' | ' |
Outstanding at end of year - vested and unvested expected to vest | '7 years 1 month 6 days | ' | ' |
Exercisable at end of year | '5 years 2 months 12 days | ' | ' |
Aggregate Intrinsic Value | ' | ' | ' |
Outstanding at end of year | 17.5 | ' | ' |
Outstanding at end of year - vested and unvested expected to vest | 16.4 | ' | ' |
Exercisable at end of year | 4 | ' | ' |
Additional Disclosures | ' | ' | ' |
Weighted average grant date fair value (in dollars per share) | 8.6 | 6.9 | 7.4 |
Options vested (in shares) | 521,734 | ' | ' |
Total grant date fair value of options vested (in dollars) | 4.5 | 5.5 | 9.8 |
Aggregate intrinsic value of options exercised (in dollars) | 1 | 0.1 | 0.1 |
EquityBased_Compensation_Detai3
Equity-Based Compensation (Details 4) (USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Additional disclosures | ' | ' | ' |
Equity-based compensation expense, net of forfeitures, attributable to future periods (in dollars) | $16 | ' | ' |
Restricted stock units | ' | ' | ' |
Unvested Restricted Stock Units | ' | ' | ' |
Outstanding at beginning of year (in shares) | 373,676 | ' | ' |
Granted (in shares) | 270,525 | ' | ' |
Vested (in shares) | -152,889 | ' | ' |
Forfeited (in shares) | -25,918 | ' | ' |
Outstanding at end of year (in shares) | 465,394 | 373,676 | ' |
Outstanding at end of year and expected to vest (in shares) | 382,897 | ' | ' |
Weighted Average Grant Date Fair Value | ' | ' | ' |
Outstanding at beginning of year (in dollars per share) | $17.02 | ' | ' |
Granted (in dollars per share) | $16.31 | $15.64 | $15.99 |
Vested (in dollars per share) | $18.44 | ' | ' |
Forfeited (in dollars per share) | $20.77 | ' | ' |
Outstanding at end of year (in dollars per share) | $17.28 | $17.02 | ' |
Outstanding at end of year and expected to vest (in dollars per share) | $17.26 | ' | ' |
Additional disclosures | ' | ' | ' |
Total grant date fair value | 2.8 | 3.5 | 3.1 |
Equity-based compensation expense, net of forfeitures, attributable to future periods (in dollars) | 4.5 | ' | ' |
Weighted average amortization periods | '2 years 1 month 6 days | ' | ' |
Stock options | ' | ' | ' |
Additional disclosures | ' | ' | ' |
Equity-based compensation expense, net of forfeitures, attributable to future periods (in dollars) | $11.50 | ' | ' |
Weighted average amortization periods | '2 years 8 months 12 days | ' | ' |
2007 Equity Incentive Plan | ' | ' | ' |
Unvested Restricted Stock Units | ' | ' | ' |
Outstanding at end of year (in shares) | 290,394 | ' | ' |
2007 Equity Incentive Plan | Restricted stock units | ' | ' | ' |
Equity compensation plans | ' | ' | ' |
Shares issued | 270,525 | ' | ' |
Award vesting period | '4 years | ' | ' |
Employee_Savings_Plan_Details
Employee Savings Plan (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Employee Savings Plan | ' | ' | ' |
Company contribution as a percentage of each employee's combined salary and certain other compensation for the plan year under the 401(k) Plan | 3.00% | ' | ' |
Amount of company contribution for the 401(k) Plan | $0.70 | $0.80 | $1 |
Stockholders_Equity_Details
Stockholders' Equity (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 17, 2009 | Dec. 31, 2013 | Dec. 31, 2013 |
Series A Junior Participating Preferred Stock | Series A Junior Participating Preferred Stock | Series A Junior Participating Preferred Stock | |||
item | item | Minimum | |||
Preferred Stock | ' | ' | ' | ' | ' |
Number of rights for each outstanding share of common stock | ' | ' | 1 | ' | ' |
Common stock, par value (in dollars per share) | $0.01 | $0.01 | $0.01 | ' | ' |
Number of preferred share purchase rights for each outstanding share of the entity's common stock | ' | ' | ' | 0.001 | ' |
Number of days following the acquisition of twenty percent or more of the common stock by person or group whose rights are exercisable | ' | ' | ' | '10 days | ' |
Percentage of common stock to be acquired by a person or group for rights to be exercisable | ' | ' | ' | ' | 20.00% |
Number of business days following a tender offer or similar transaction resulting in the acquisition of twenty percent of common stock by a person or group whose rights are exercisable | ' | ' | ' | '10 days | ' |
Percentage of common stock to be acquired in a tender offer or a similar transaction by a person or group for rights to be exercisable | ' | ' | ' | 20.00% | ' |
Period during which each holder of a right, other than the acquiring person will be entitled to purchase shares of common stock | ' | ' | ' | '60 days | ' |
Number of multiples of the exercise price that the right holder has the right to receive in value of the entity's common stock | ' | ' | ' | 2 | ' |
Percentage of common stock to be acquired by an acquiring person for exchange of rights | ' | ' | ' | ' | 50.00% |
Exchange ratio for conversion of right into common stock by the board, if the acquiring person acquires fifty percent or more of the entity's common stock | ' | ' | ' | 1 | ' |
Number of multiples of the exercise price that the right holder has the right to receive in value of the acquiring the company's common stock under the merger or other business combination transaction | ' | ' | ' | 2 | ' |
Business_Segments_Details
Business Segments (Details) | 12 Months Ended |
Dec. 31, 2013 | |
item | |
Business Segments | ' |
Number of business segments | 1 |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | 12 Months Ended | |||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Jun. 30, 2013 | |
item | ||||
Purchase Commitments | ' | ' | ' | ' |
Remaining purchase commitments under various agreements with third-parties | $6,800,000 | ' | ' | ' |
Other Funding Commitments | ' | ' | ' | ' |
Accrued expenses for clinical studies | 300,000 | ' | ' | ' |
Minimum | ' | ' | ' | ' |
Indemnification Obligations | ' | ' | ' | ' |
Estimated term to defend the validity of patent through the appeals process | '2 years | ' | ' | ' |
Ferumoxytol term of data and market exclusivity even if there is no successful outcome from the appeals process | '8 years | ' | ' | ' |
Maximum | ' | ' | ' | ' |
Indemnification Obligations | ' | ' | ' | ' |
Initial indemnification exposure for actions or events involving officers, directors and certain employees | 1,000,000 | ' | ' | ' |
Estimated term to defend the validity of patent through the appeals process | '3 years | ' | ' | ' |
Ferumoxytol term of data and market exclusivity even if there is no successful outcome from the appeals process | '10 years | ' | ' | ' |
Real property | ' | ' | ' | ' |
Facility Lease Obligations | ' | ' | ' | ' |
Expenses associated with operating leases | 1,500,000 | 1,700,000 | 1,700,000 | ' |
Initial lease term | '5 years 2 months | ' | ' | ' |
Number of successive five year extension terms | 1 | ' | ' | ' |
Extension period of the lease terms | '5 years | ' | ' | ' |
Minimum Lease Payments | ' | ' | ' | ' |
Year Ended December 31, 2014 | 1,128,000 | ' | ' | ' |
Year Ended December 31, 2015 | 1,128,000 | ' | ' | ' |
Year Ended December 31, 2016 | 1,128,000 | ' | ' | ' |
Year Ended December 31, 2017 | 1,128,000 | ' | ' | ' |
Thereafter | 1,034,000 | ' | ' | ' |
Total | 5,546,000 | ' | ' | ' |
Security deposit in the form of an irrevocable letter of credit | ' | ' | ' | 400,000 |
Security deposit as of second anniversary of the commencement date | ' | ' | ' | 300,000 |
Office equipment | ' | ' | ' | ' |
Facility Lease Obligations | ' | ' | ' | ' |
Expenses associated with operating leases | -300,000 | 900,000 | 800,000 | ' |
Minimum Lease Payments | ' | ' | ' | ' |
Year Ended December 31, 2014 | $100,000 | ' | ' | ' |
Collaborative_Agreements_Detai
Collaborative Agreements (Details) (USD $) | 3 Months Ended | 1 Months Ended | 12 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2012 | Jun. 30, 2012 | Dec. 31, 2013 | Jun. 30, 2012 | Apr. 30, 2010 | Mar. 31, 2010 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2013 | Dec. 31, 2008 | |
Takeda | Takeda | Takeda | Takeda | Takeda | Takeda | Takeda | Takeda | 3SBio License Agreement | ||||
item | Maximum | |||||||||||
Collaborative Agreements | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of deliverables | ' | ' | ' | ' | ' | ' | 4 | ' | ' | ' | ' | ' |
Upfront payment received | ' | ' | ' | ' | $60,000,000 | ' | ' | ' | ' | ' | ' | $1,000,000 |
Additional upfront payment | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,000,000 | ' | ' |
Period of recognition of deferred revenues | ' | ' | ' | ' | ' | '10 years | ' | ' | ' | ' | ' | ' |
Milestone payments expected to be received under the agreement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 186,000,000 | ' |
Milestone payments revenue recognized under the agreement | 5,000,000 | 15,000,000 | ' | 15,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Milestone revenue received | ' | ' | ' | ' | ' | ' | ' | 18,000,000 | ' | ' | ' | ' |
Deferred revenue recognized in earnings related to upfront payments and an $18.0 million milestone payment | ' | ' | ' | ' | ' | ' | 7,900,000 | ' | ' | ' | ' | ' |
Other reimbursement revenues | ' | ' | ' | ' | ' | ' | 500,000 | 400,000 | 2,000,000 | ' | ' | ' |
Product sales and royalty revenue recognized | ' | ' | ' | ' | ' | ' | 500,000 | ' | ' | ' | ' | ' |
Deferred revenues | ' | ' | ' | ' | ' | ' | 2,400,000 | ' | ' | ' | ' | ' |
Deferred revenues, short-term | 9,104,000 | ' | 8,226,000 | ' | ' | ' | 300,000 | ' | ' | ' | ' | ' |
Deferred revenues, long-term | 50,350,000 | ' | 44,534,000 | ' | ' | ' | 2,100,000 | ' | ' | ' | ' | ' |
Deferred costs | ' | ' | ' | ' | ' | ' | 2,300,000 | ' | ' | ' | ' | ' |
Deferred costs, short-term | ' | ' | ' | ' | ' | ' | 300,000 | ' | ' | ' | ' | ' |
Deferred costs, long-term | ' | ' | ' | ' | ' | ' | $2,000,000 | ' | ' | ' | ' | ' |
Restructuring_Details
Restructuring (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Components of restructuring expenses and reserve | ' | ' |
Accrued restructuring, beginning of period | $1,383 | $2,366 |
Employee severance, benefits and related costs | ' | 1,624 |
Payments | -1,383 | -2,674 |
Inventory and other adjustments | ' | 67 |
Accrued restructuring, end of period | ' | $1,383 |
Consolidated_Quarterly_Financi2
Consolidated Quarterly Financial Data-Unaudited (Details) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Sep. 30, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Trading Securities and Other Trading Assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
U.S. Feraheme product sales, net | $18,981,000 | $19,347,000 | $17,456,000 | $15,578,000 | $14,381,000 | $16,186,000 | $14,094,000 | $13,626,000 | ' | $71,362,000 | $58,287,000 | $52,097,000 |
License fee and other collaboration revenues | 2,329,000 | 1,998,000 | 2,055,000 | 2,003,000 | 6,564,000 | 1,566,000 | 16,592,000 | 1,753,000 | ' | 8,385,000 | 26,475,000 | 8,321,000 |
Other product sales and royalties | 401,000 | 271,000 | 138,000 | 299,000 | 199,000 | -10,000 | 326,000 | 101,000 | ' | 1,109,000 | 616,000 | 831,000 |
Total revenues | 21,711,000 | 21,616,000 | 19,649,000 | 17,880,000 | 21,144,000 | 17,742,000 | 31,012,000 | 15,480,000 | ' | 80,856,000 | 85,378,000 | 61,249,000 |
Cost of product sales | 3,326,000 | 2,547,000 | 3,145,000 | 2,942,000 | 4,027,000 | 4,323,000 | 3,224,000 | 2,646,000 | ' | 11,960,000 | 14,220,000 | 10,531,000 |
Gross margin | 18,385,000 | 19,069,000 | 16,504,000 | 14,938,000 | 17,117,000 | 13,419,000 | 27,788,000 | 12,834,000 | ' | ' | ' | ' |
Operating expenses | 22,380,000 | 19,464,000 | 19,260,000 | 19,409,000 | 20,532,000 | 17,420,000 | 22,772,000 | 25,643,000 | ' | ' | ' | ' |
Restructuring expenses | ' | ' | ' | ' | 595,000 | 562,000 | 1,058,000 | ' | ' | ' | 2,215,000 | 3,508,000 |
Interest and dividend income, net | 278,000 | 246,000 | 256,000 | 271,000 | 260,000 | 295,000 | 338,000 | 393,000 | ' | 1,051,000 | 1,286,000 | 1,747,000 |
Gains on assets held for sale | 59,000 | ' | 566,000 | 299,000 | ' | ' | ' | ' | ' | ' | ' | ' |
(Losses) gains on investments, net | 4,000 | 4,000 | 26,000 | 6,000 | 3,000 | 2,000 | -1,471,000 | ' | ' | 40,000 | -1,466,000 | -193,000 |
Income tax benefit | ' | ' | ' | ' | 61,000 | 299,000 | 494,000 | ' | ' | ' | 854,000 | 1,170,000 |
Net loss | -3,654,000 | -145,000 | -1,908,000 | -3,895,000 | -3,686,000 | -3,967,000 | 3,319,000 | -12,416,000 | ' | -9,602,000 | -16,750,000 | -77,069,000 |
Net income (loss) per share-basic and diluted (in dollars per share) | ($0.17) | ($0.01) | ($0.09) | ($0.18) | ' | ' | ' | ' | ' | ($0.44) | ($0.78) | ($3.64) |
Net income (loss) per share - basic (in dollars per share) | ' | ' | ' | ' | ($0.17) | ($0.19) | $0.16 | ($0.58) | ' | ' | ' | ' |
Net income (loss) per share - diluted (in dollars per share) | ' | ' | ' | ' | ($0.17) | ($0.19) | $0.15 | ($0.58) | ' | ' | ' | ' |
Reduction in estimated Medicaid rebate reserve related to Feraheme sales | ' | 600,000 | ' | ' | ' | 600,000 | ' | ' | 2,200,000 | -568,000 | -621,000 | -2,532,000 |
Milestone payments revenue recognized under the agreement | ' | ' | ' | ' | 5,000,000 | ' | 15,000,000 | ' | ' | ' | ' | ' |
ARS portfolio | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Trading Securities and Other Trading Assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
(Losses) gains on investments, net | ' | ' | ' | ' | ' | ' | $1,500,000 | ' | ' | ' | ' | ' |
Valuation_and_Qualifying_Accou2
Valuation and Qualifying Accounts (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Accounts receivable allowances | ' | ' | ' |
Changes in valuation and qualifying accounts | ' | ' | ' |
Balance at Beginning of Period | $1,771 | $1,822 | $1,148 |
Additions | 37,098 | 26,517 | 14,074 |
Deductions Charged to Reserves | -36,186 | -26,568 | -13,400 |
Balance at End of Period | 2,683 | 1,771 | 1,822 |
Rebates, fees and returns reserves | ' | ' | ' |
Changes in valuation and qualifying accounts | ' | ' | ' |
Balance at Beginning of Period | 3,448 | 5,943 | 10,015 |
Additions | 11,820 | 6,729 | 9,864 |
Deductions Charged to Reserves | -10,469 | -9,224 | -13,936 |
Balance at End of Period | $4,799 | $3,448 | $5,943 |