Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Feb. 21, 2019 | Jun. 30, 2018 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Year Focus | 2018 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | SRNE | ||
Entity Registrant Name | Sorrento Therapeutics, Inc. | ||
Entity Central Index Key | 0000850261 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | false | ||
Entity Shell Company | false | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 122,280,092 | ||
Entity Public Float | $ 836.9 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 158,738 | $ 20,429 |
Restricted cash | 9,592 | 0 |
Marketable securities | 297 | 441 |
Grants and accounts receivables, net | 3,833 | 2,211 |
Income tax receivable | 526 | 1,715 |
Prepaid expenses and other, net | 6,578 | 4,904 |
Total current assets | 179,564 | 29,700 |
Property and equipment, net | 24,384 | 19,345 |
Intangibles, net | 66,283 | 71,013 |
Goodwill | 38,298 | 38,298 |
Cost method investments | 237,008 | 237,008 |
Equity method investments | 27,980 | 32,999 |
Restricted cash | 45,000 | 0 |
Other, net | 5,570 | 3,250 |
Total assets | 624,087 | 431,613 |
Current liabilities: | ||
Accounts payable | 13,817 | 9,911 |
Accrued payroll and related | 10,236 | 4,485 |
Accrued expenses | 13,403 | 7,274 |
Current portion of deferred revenue | 2,703 | 3,864 |
Current portion of deferred rent | 0 | 212 |
Acquisition consideration payable | 11,312 | 53,209 |
Current portion of debt | 10,150 | 0 |
Total current liabilities | 61,621 | 78,955 |
Long-term debt, net of discount | 223,136 | 5,211 |
Deferred tax liabilities, net | 9,416 | 15,535 |
Deferred revenue | 116,274 | 119,287 |
Deferred rent and other | 6,140 | 6,015 |
Total liabilities | 416,587 | 225,003 |
Commitments and contingencies | ||
Equity: | ||
Preferred stock, $0.0001 par value; 100,000,000 shares authorized and no shares issued or outstanding | 0 | 0 |
Common stock, $0.0001 par value; 750,000,000 shares authorized and 122,280,092 and 82,903,567 shares issued and outstanding at December 31, 2018 and 2017, respectively | 13 | 9 |
Additional paid-in capital | 626,658 | 413,901 |
Accumulated other comprehensive income | 15 | 242 |
Accumulated deficit | (367,750) | (165,120) |
Treasury stock, 7,568,182 shares and 7,568,182 shares at cost at December 31, 2018 and 2017, respectively | (49,464) | (49,464) |
Total Sorrento Therapeutics, Inc. stockholders' equity | 209,472 | 199,568 |
Noncontrolling interests | (1,972) | 7,042 |
Total equity | 207,500 | 206,610 |
Total liabilities and equity | $ 624,087 | $ 431,613 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (USD per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (USD per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 750,000,000 | 750,000,000 |
Common stock, shares issued (in shares) | 122,280,092 | 82,903,567 |
Common stock, shares outstanding (in shares) | 122,280,092 | 82,903,567 |
Treasury stock, shares (in shares) | 7,568,182 | 7,568,182 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues: | |||
Total revenues | $ 21,193 | $ 151,856 | $ 8,152 |
Operating costs and expenses: | |||
Costs of revenues | 7,060 | 3,945 | 811 |
Research and development | 76,963 | 55,532 | 42,175 |
Acquired in-process research and development | 11,304 | 26,102 | 45,000 |
General and administrative | 63,638 | 38,332 | 24,219 |
Intangible amortization | 3,009 | 2,610 | 845 |
Loss (gain) on contingent liabilities | 9,644 | 0 | (8,121) |
Total costs and operating expenses | 171,618 | 126,521 | 104,929 |
(Loss) income from operations | (150,425) | 25,335 | (96,777) |
Gain on derivative liabilities | 2,830 | 0 | 5,520 |
Gain on marketable securities | 0 | 0 | 27,193 |
Loss on foreign currency exchange | (1,243) | (178) | 0 |
(Loss) gain on trading securities | (144) | (665) | 356 |
Interest expense | (57,631) | (4,980) | (1,610) |
Interest income | 921 | 241 | 272 |
Loss on debt extinguishment | (8,089) | (4,275) | (222) |
Loss on receivable | 0 | (163) | 0 |
(Loss) income before income tax (benefit) loss and (loss) income on equity method investments | (213,781) | 15,315 | (65,268) |
Income tax benefit | (6,274) | (36,038) | (896) |
(Loss) income on equity method investments | (5,019) | (40,244) | 435 |
Net (loss) income | (212,526) | 11,109 | (63,937) |
Net (loss) income attributable to noncontrolling interests | (8,986) | 1,977 | (3,014) |
Net (loss) income attributable to Sorrento | $ (203,540) | $ 9,132 | $ (60,923) |
Net (loss) income per share - basic per share attributable to Sorrento (USD per share) | $ (1.92) | $ 0.13 | $ (1.21) |
Net (loss) income per share - diluted per share attributable to Sorrento (USD per share) | $ (1.92) | $ 0.13 | $ (1.21) |
Weighted-average shares used during period - basic per share attributable to Sorrento (in shares) | 106,150 | 69,742 | 50,360 |
Weighted-average shares used during period - diluted per share attributable to Sorrento (in shares) | 106,150 | 70,381 | 50,360 |
Grant | |||
Revenues: | |||
Total revenues | $ 356 | $ 206 | $ 1,033 |
Royalties and licenses | |||
Revenues: | |||
Total revenues | 480 | 140,381 | 4,017 |
Sales and services | |||
Revenues: | |||
Total revenues | $ 20,357 | $ 11,269 | $ 3,102 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | |||
Net (loss) income | $ (212,526) | $ 11,109 | $ (63,937) |
Other comprehensive income: | |||
Unrealized loss on marketable securities, net of tax of $0, $0, and $(14,294) | 0 | 0 | (73,579) |
Foreign currency translation adjustments | (227) | 360 | (118) |
Total other comprehensive (loss) income | (227) | 360 | (73,697) |
Comprehensive (loss) income | (212,753) | 11,469 | (137,634) |
Comprehensive (loss) income attributable to noncontrolling interests | 8,986 | (1,977) | 3,014 |
Comprehensive (loss) income attributable to Sorrento | $ (203,767) | $ 9,492 | $ (134,620) |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | |||
Unrealized loss on marketable securities, tax | $ 0 | $ 0 | $ (14,294) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Scilex Pharmaceuticals, Inc | BDL Products Inc | Virttu Biologics Limited | Common Stock | Common StockScilex Pharmaceuticals, Inc | Common StockBDL Products Inc | Common StockVirttu Biologics Limited | Treasury Stock | Additional Paid-in Capital | Additional Paid-in CapitalScilex Pharmaceuticals, Inc | Additional Paid-in CapitalBDL Products Inc | Additional Paid-in CapitalVirttu Biologics Limited | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Noncontrolling Interest | Noncontrolling InterestScilex Pharmaceuticals, Inc | June 2018 Warrants, Amendment | June 2018 Warrants, AmendmentAdditional Paid-in Capital |
Balance, shares (in shares) at Dec. 31, 2015 | 37,771,459 | 0 | |||||||||||||||||
Balance at Dec. 31, 2015 | $ 140,938 | $ 4 | $ 0 | $ 184,898 | $ 73,579 | $ (113,329) | $ (4,214) | ||||||||||||
Issuance of common stock with exercise of options (in shares) | 204,668 | ||||||||||||||||||
Issuance of common stock with exercise of options | 527 | 524 | |||||||||||||||||
Issuance of common stock for public placement and investments, net (in shares) | 27,598,235 | ||||||||||||||||||
Issuance of common stock for public placement and investments, net | 108,301 | 108,298 | |||||||||||||||||
Warrants issued in connection with convertible notes | $ 0 | ||||||||||||||||||
Issuance of common stock upon acquisition (in shares) | 754,911 | ||||||||||||||||||
Issuance of common stock upon acquisition | $ 19,061 | $ 1 | $ 5,368 | $ 13,693 | |||||||||||||||
Cancellation of stock issuance (in shares) | 15,446,417 | 7,568,182 | |||||||||||||||||
Cancellation of stock issuance | (50,807) | $ (2) | $ (49,464) | (1,341) | |||||||||||||||
Stock-based compensation | 4,741 | 4,741 | |||||||||||||||||
Change in unrealized gain on marketable securities | (73,579) | (73,579) | |||||||||||||||||
Foreign currency translation adjustment | (118) | (118) | |||||||||||||||||
Hercules warrant | 1,377 | 1,377 | |||||||||||||||||
Net loss | (63,937) | (60,923) | (3,014) | ||||||||||||||||
Balance, shares (in shares) at Dec. 31, 2016 | 50,882,856 | 7,568,182 | |||||||||||||||||
Balance at Dec. 31, 2016 | 86,502 | $ 6 | $ (49,464) | 303,865 | (118) | (174,252) | 6,465 | ||||||||||||
Scilex acquisition adjustments | (2,027) | (627) | (1,400) | ||||||||||||||||
Issuance of common stock for public placement and investments, net (in shares) | 30,468,700 | ||||||||||||||||||
Issuance of common stock for public placement and investments, net | 57,928 | 57,925 | |||||||||||||||||
Beneficial conversion feature recorded on convertible notes | 32,062 | 32,062 | |||||||||||||||||
Warrants issued in connection with convertible notes | 12,669 | 12,669 | 0 | ||||||||||||||||
Issuance of common stock upon acquisition (in shares) | 1,552,011 | ||||||||||||||||||
Issuance of common stock upon acquisition | 3,055 | 3,055 | |||||||||||||||||
Stock-based compensation | 4,952 | 4,952 | |||||||||||||||||
Change in unrealized gain on marketable securities | 0 | ||||||||||||||||||
Foreign currency translation adjustment | 360 | 360 | |||||||||||||||||
Net loss | $ 11,109 | 9,132 | 1,977 | ||||||||||||||||
Balance, shares (in shares) at Dec. 31, 2017 | 82,903,567 | 82,903,567 | 7,568,182 | ||||||||||||||||
Balance at Dec. 31, 2017 | $ 206,610 | $ 9 | $ (49,464) | 413,901 | 242 | (165,120) | 7,042 | ||||||||||||
Adoption impact of ASC 606 | 910 | 910 | |||||||||||||||||
Issuance of common stock with exercise of options (in shares) | 57,690 | ||||||||||||||||||
Issuance of common stock with exercise of options | 211 | 211 | |||||||||||||||||
Issuance of common stock for public placement and investments, net (in shares) | 13,793,997 | ||||||||||||||||||
Issuance of common stock for public placement and investments, net | 83,610 | $ 2 | 83,608 | ||||||||||||||||
Beneficial conversion feature recorded on convertible notes | 12,006 | 12,006 | |||||||||||||||||
Warrants issued in connection with convertible notes | 9,646 | 9,646 | $ 1,916 | $ 1,916 | |||||||||||||||
Issuance of common stock upon acquisition (in shares) | 1,381,346 | 309,916 | 1,795,011 | ||||||||||||||||
Issuance of common stock upon acquisition | $ 13,744 | $ 2,340 | $ 11,308 | $ 13,744 | $ 2,340 | $ 11,308 | |||||||||||||
Issuance of common stock for conversion of notes payable (in shares) | 22,038,565 | ||||||||||||||||||
Issuance of common stock related to conversion of notes payable | 50,000 | $ 2 | 49,998 | ||||||||||||||||
Warrants issued in connection with Term Loan Agreement | 21,746 | 21,746 | |||||||||||||||||
Stock-based compensation | 6,206 | 6,234 | (28) | ||||||||||||||||
Change in unrealized gain on marketable securities | 0 | ||||||||||||||||||
Foreign currency translation adjustment | (227) | (227) | |||||||||||||||||
Net loss | $ (212,526) | (203,540) | (8,986) | ||||||||||||||||
Balance, shares (in shares) at Dec. 31, 2018 | 122,280,092 | 122,280,092 | 7,568,182 | ||||||||||||||||
Balance at Dec. 31, 2018 | $ 207,500 | $ 13 | $ (49,464) | $ 626,658 | $ 15 | $ (367,750) | $ (1,972) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Operating activities | |||
Net (loss) income | $ (212,526) | $ 11,109 | $ (63,937) |
Adjustments to reconcile net loss to net cash provided by and (used for) operating activities: | |||
Depreciation and amortization | 9,054 | 7,079 | 2,885 |
Non-cash interest expense | 52,841 | 1,326 | 164 |
Amortization of debt issuance costs and debt discount | 550 | 477 | 0 |
Loss (gain) on sale of marketable securities | 0 | 0 | (27,193) |
Loss (gain) on sale of marketable securities | 144 | 665 | 0 |
Stock-based compensation | 6,206 | 4,952 | 4,741 |
Acquired in-process research and development | 9,895 | 0 | 0 |
Loss on disposal for property and equipment | 440 | 59 | 0 |
Loss on receivable | 0 | 163 | 0 |
Loss on debt extinguishment | 8,089 | 4,275 | 0 |
(Gain) on derivative liability | (2,830) | 0 | (5,520) |
Loss (income) on equity method investments | 5,019 | 40,244 | (435) |
Non-cash income on cost method investments | 0 | (116,249) | 0 |
Loss (gain) on contingent liabilities | 9,644 | 0 | (8,121) |
Loss on IPR&D impairment | 1,826 | 0 | 0 |
Deferred tax provision | (6,119) | (35,679) | 982 |
Changes in operating assets and liabilities; net of dispositions: | |||
Grants and other receivables | (1,623) | (515) | (472) |
Accrued payroll | 5,751 | 920 | 0 |
Prepaid expenses and other | (1,674) | (1,902) | 40 |
Deposits and other assets | (1,130) | 233 | (448) |
Accounts payable | 3,578 | 1,592 | 3,714 |
Deferred revenue | (3,263) | (20,891) | 23,534 |
Deferred rent and other | 251 | 639 | (2,535) |
Acquisition consideration payable | (2,020) | 0 | 0 |
Accrued expenses and other liabilities | 6,130 | 2,323 | 1,673 |
Net cash used for operating activities | (111,767) | (99,180) | (70,928) |
Investing activities | |||
Purchases of property and equipment | (11,195) | (10,972) | (6,860) |
Purchase of assets related to Sofusa | (10,000) | 0 | 0 |
Purchase of business, net of cash acquired | 0 | (557) | (3,842) |
Net cash used for investing activities | (21,195) | (16,529) | (17,452) |
Financing activities | |||
Net borrowings under loan and security agreement | 0 | 49,916 | 0 |
Payments on short term bridge loan | (20,000) | 0 | 0 |
Bridge loan for Scilex settlement | 19,675 | 0 | 0 |
Proceeds from loan agreement | 1,586 | 0 | 0 |
Scilex consideration for regulatory milestones | (22,466) | 0 | 0 |
Proceeds from issuance of common stock, net | 83,608 | 57,928 | 107,986 |
Proceeds from issuance of Scilex notes | 140,000 | 0 | 0 |
Scilex notes issuance of Scilex notes | (5,725) | 0 | 0 |
Proceeds from issuance of convertible notes | 37,849 | 0 | 0 |
Cash payments for treasury shares | 0 | 0 | (15,639) |
Proceeds from loan and security agreement, net of fees | 0 | 0 | 48,320 |
Payments of debt on retired note | 0 | (53,157) | (9,451) |
Net payments of deferred compensation | 0 | (1,012) | 0 |
Proceeds from exercise of stock options | 211 | 0 | 524 |
Net cash provided by financing activities | 325,998 | 53,675 | 131,740 |
Net change in cash, cash equivalents and restricted cash | 193,036 | (62,034) | 43,360 |
Net effect of exchange rate changes on cash | (135) | 65 | 0 |
Cash, cash equivalents and restricted cash at beginning of period | 20,429 | 82,398 | 39,038 |
Cash, cash equivalents and restricted cash at end of period | 213,330 | 20,429 | 82,398 |
Cash paid during the period for: | |||
Income taxes | 6 | 34 | 2 |
Interest | 1,620 | 3,499 | 1,342 |
Supplemental disclosures of non-cash investing and financing activities: | |||
Conversion of 2017 convertible notes | 50,000 | 0 | 0 |
Loss on debt extinguishment | 9,646 | 12,669 | |
Property and equipment costs incurred but not paid | 328 | 37 | 0 |
Reconciliation of cash, cash equivalents and restricted cash within the Company's consolidated balance sheets: | |||
Cash, cash equivalents, and restricted cash | 20,429 | 82,398 | 39,038 |
Virttu Biologics Limited | |||
Supplemental disclosures of non-cash investing and financing activities: | |||
Non-cash consideration given | 11,308 | 15,465 | 0 |
Scilex Pharmaceuticals, Inc | |||
Supplemental disclosures of non-cash investing and financing activities: | |||
Non-cash consideration given | 13,744 | 1,380 | 0 |
Non-cash consideration received | 0 | 0 | (45,368) |
Oaktree Term Loan | |||
Financing activities | |||
Proceeds from loan agreement | 100,000 | 0 | 0 |
Scilex notes issuance of Scilex notes | (8,740) | 0 | 0 |
Milestones Achievement | |||
Financing activities | |||
Payments on short term bridge loan | (20,000) | 0 | 0 |
Bridge loan for Scilex settlement | 20,000 | 0 | 0 |
Sini West | |||
Investing activities | |||
Payments to Investments | 0 | 0 | (1,000) |
Supplemental disclosures of non-cash investing and financing activities: | |||
Non-cash consideration received | 0 | 0 | (2,832) |
Celularity Inc | |||
Investing activities | |||
Payments to Investments | 0 | (5,000) | (5,000) |
MedoveX | |||
Investing activities | |||
Payments to Investments | 0 | 0 | (750) |
Roger Williams Medical Center | |||
Supplemental disclosures of non-cash investing and financing activities: | |||
Non-cash consideration received | 0 | 0 | (3,398) |
ImmuneOncia Therapeutics, LLC | |||
Supplemental disclosures of non-cash investing and financing activities: | |||
Investment in ImmuneOncia | 0 | 0 | (9,608) |
BDL | |||
Supplemental disclosures of non-cash investing and financing activities: | |||
Non-cash consideration received | 2,340 | 0 | 0 |
June 2018 Warrants, Amendment | |||
Supplemental disclosures of non-cash investing and financing activities: | |||
Loss on debt extinguishment | $ 1,916 | $ 0 | $ 0 |
Nature of Operations and Busine
Nature of Operations and Business Activities | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations and Business Activities | Nature of Operations and Business Activities Nature of Operations and Basis of Presentation Sorrento Therapeutics, Inc. (Nasdaq: SRNE), together with its subsidiaries (collectively, the “Company”) is a clinical stage and commercial biopharma company focused on delivering innovative and clinically meaningful therapies to patients and their families, globally, to address unmet medical needs. The Company primarily focuses on therapeutics areas in Immune-Oncology and Non-Opioid Pain Management. The Company also has programs assessing the use of its technologies and products in auto-immune, inflammatory and neurodegenerative diseases. At its core, the Company is an antibody-centric company and leverages its proprietary G-MAB™ library and targeted delivery modalities to generate the next generation of cancer therapeutics. the Company’s fully human antibodies include PD-1, PD-L1, CD38, CD123, CD47, c-MET, VEGFR2, CCR2 and CD137 among others. The Company’s vision is to leverage these antibodies in conjunction with proprietary targeted delivery modalities to generate the next generation of cancer therapeutics. These modalities include proprietary chimeric antigen receptor T-cell therapy (“CAR-T”), dimeric antigen receptor T-cell therapy (“DAR-T”), antibody drug conjugates (“ADCs”) as well as bispecific antibody approaches. Additionally, the Company acquired Sofusa®, a revolutionary drug delivery system, in July 2018, which delivers biologics directly into the lymphatic system to potentially achieve improved efficacy and fewer adverse effects than standard parenteral immunotherapy. With each of the Company’s clinical and pre-clinical programs, it aims to tailor its therapies to treat specific stages in the evolution of cancer, from elimination, to equilibrium and escape. In addition, the Company’s objective is to focus on tumors that are resistant to current treatments and where it can design focused trials based on a genetic signature or biomarker to ensure patients have the best chance of a durable and significant response. The Company has several immuno-oncology programs that are in or near to entering the clinic. These include cellular therapies, an oncolytic virus and a palliative care program targeted to treat intractable cancer pain. Through December 31, 2018, the Company had devoted substantially all of its efforts to product development, raising capital and building infrastructure, and had not realized revenues from its planned principal operations. The accompanying consolidated financial statements include the accounts of the Company’s subsidiaries. For consolidated entities where the Company owns or is exposed to less than 100% of the economics, the Company records net income (loss) attributable to noncontrolling interests in its consolidated statements of operations equal to the percentage of the economic or ownership interest retained in such entities by the respective noncontrolling parties. All intercompany balances and transactions have been eliminated in consolidation. |
Liquidity and Going Concern
Liquidity and Going Concern | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Liquidity and Going Concern | Liquidity and Going Concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company has recurring losses from operations, recurring negative cash flows from operations and substantial cumulative net losses to date and anticipates that it will continue to do so for the foreseeable future as it continues to identify and invest in advancing product candidates, as well as expanding corporate infrastructure. The Company has plans in place to obtain sufficient additional fundraising to fulfill its operating and capital requirements for the next 12 months. The Company’s plans include continuing to fund its operating losses and capital funding needs through public or private equity or debt financings, strategic collaborations, licensing arrangements, asset sales, government grants or other arrangements. Although management believes such plans, if executed, should provide the Company sufficient financing to meet its needs, successful completion of such plans is dependent on factors outside of the Company’s control. As such, management cannot conclude that such plans will be effectively implemented within one year after the date that the financial statements are issued. As a result, management has concluded that the aforementioned conditions, among others, raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date the financial statements are issued. As of December 31, 2018, the Company had $361.8 million of long term debt outstanding under the 2018 Securities Purchase Agreement in Private Placement and Amendment to Warrants, 2018 Purchase Agreements and Indenture for Scilex and 2018 Oaktree Term Loan Agreement (collectively, the “Debt Arrangements”) (See Note 12). Each of the Debt Arrangements provide that, upon the occurrence of an event of default, the Purchasers thereof may, by written notice to the Company, declare all of the outstanding principal and interest under such Note immediately due and payable. For purposes of the Debt Arrangements, an event of default includes, among other things, one or more events that have, or could reasonably be expected to have, a material adverse effect on (i) the business, assets, financial condition or operations of the Company, (ii) the Company’s ability to comply with its obligations under the agreements, or (iii) the legality, validity or enforceability of the agreements. The Company believes that it is not probable that the material adverse event clause under the Debt Arrangements will be exercised. If the Company is unable to raise additional capital in sufficient amounts or on terms acceptable, the Company may have to significantly delay, scale back or discontinue the development or commercialization of one or more of its product candidates. The Company may also seek collaborators for one or more of its current or future product candidates at an earlier stage than otherwise would be desirable or on terms that are less favorable than might otherwise be available. The consolidated financial statements do not reflect any adjustments that might be necessary if the Company is unable to continue as a going concern. Universal Shelf Registration In November 2014, the Company filed a universal shelf registration statement on Form S-3 (the “2014 Shelf Registration Statement”) with the SEC, which was declared effective by the SEC in December 2014. This 2014 Shelf Registration Statement provided the Company with the ability to offer up to $250 million of securities, including equity and other securities as described in the registration statement. Included in the 2014 shelf registration is a sales agreement prospectus covering the offering, issuance and sale by the Company of up to a maximum aggregate offering price of $50.0 million of the Company’s common stock that may be issued and sold under a sales agreement with MLV & Co. LLC (the “2014 ATM Facility”). During the twelve months ended December 31, 2017 and 2016, the Company sold approximately $13.9 million and $3.6 million in shares of common stock under the 2014 ATM Facility, respectively. In April 2017, the Company completed a public offering of $47.5 million of shares of common stock pursuant to the 2014 Shelf Registration Statement for net proceeds of approximately $43.1 million . In November 2017, the Company filed a universal shelf registration statement on Form S-3 (the “2017 Shelf Registration Statement”) with the SEC, which was declared effective by the SEC in December 2017. The 2014 Shelf Registration Statement expired on December 6, 2017 when the 2017 Shelf Registration was declared effective. This 2017 Shelf Registration Statement provides the Company with the ability to offer up to $350 million of securities, including equity and other securities as described in the registration statement. Included in the 2017 Shelf Registration Statement is a sales agreement prospectus covering the offering, issuance and sale by the Company of up to a maximum aggregate offering price of $100.0 million of the Company’s common stock that may be issued and sold under a sales agreement with B. Riley FBR, Inc. (the “ATM Facility”). During the twelve months ended December 31, 2018, the Company sold approximately $83.6 million in shares of common stock under the ATM Facility. The Company can offer up to $15.5 million of additional shares of common stock under the ATM Facility, subject to certain limitations. Pursuant to the 2017 Shelf Registration Statement, the Company may offer such securities from time to time and through one or more methods of distribution, subject to market conditions and the Company’s capital needs. Specific terms and prices will be determined at the time of each offering under a separate prospectus supplement, which will be filed with the SEC at the time of any offering. However, the Company cannot be sure that such additional funds will be available on reasonable terms, or at all. If the Company raises additional funds by issuing equity securities, substantial dilution to existing stockholders would result. If the Company raises additional funds by incurring debt financing, the terms of the debt may involve significant cash payment obligations as well as covenants and specific financial ratios that may restrict the Company’s ability to operate its business. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Management believes that these estimates are reasonable; however, actual results may differ from these estimates. Cash and Cash Equivalents The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. The Company minimizes its credit risk associated with cash and cash equivalents by periodically evaluating the credit quality of its primary financial institution. The balance at times may exceed federally insured limits. The Company has not experienced any losses on such accounts. Restricted Cash Restricted cash in the Company's consolidated balance sheet as of December 31, 2018, included approximately $45.0 million of restricted cash related to the Scilex Notes in the form of both the Reserve Account and the Collateral Account (See Note 12). Restricted cash in the Company's consolidated balance sheet as of December 31, 2018 also included approximately $9.6 million of restricted cash related to the Loan Agreement in the form of a Reserve Account (See Note 12). Fair Value of Financial Instruments The Company follows accounting guidance on fair value measurements for financial instruments measured on a recurring basis, as well as for certain assets and liabilities that are initially recorded at their estimated fair values. Fair value is defined as the exit price, or the amount that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company uses the following three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs to value its financial instruments: • Level 1: Observable inputs such as unadjusted quoted prices in active markets for identical instruments. • Level 2: Quoted prices for similar instruments that are directly or indirectly observable in the marketplace. • Level 3: Significant unobservable inputs which are supported by little or no market activity and that are financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation. Financial instruments measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires it to make judgments and consider factors specific to the asset or liability. The use of different assumptions and/or estimation methodologies may have a material effect on estimated fair values. Accordingly, the fair value estimates disclosed or initial amounts recorded may not be indicative of the amount that the Company or holders of the instruments could realize in a current market exchange. The carrying amounts of cash equivalents and marketable securities approximate their fair value based upon quoted market prices. Certain of the Company’s financial instruments are not measured at fair value on a recurring basis, but are recorded at amounts that approximate their fair value due to their liquid or short-term nature, such as cash, accounts receivable and payable, and other financial instruments in current assets or current liabilities. Marketable Securities Marketable securities are designated either as trading or available-for-sale securities and are accounted for at fair value. Marketable securities are classified as short-term or long-term based on the nature of the securities and their availability to meet current operating requirements. Marketable securities that are readily available for use in current operations and are classified as short-term available-for-sale securities are reported as a component of current assets in the accompanying consolidated balance sheets. Marketable securities that are not trading securities and are not considered available for use in current operations are classified as long-term available-for-sale securities and are reported as a component of long-term assets in the accompanying consolidated balance sheets. Securities that are classified as trading are carried at fair value, with changes to fair value reported as a component of income. Securities that are classified as available-for-sale are carried at fair value, with temporary unrealized gains and losses reported as a component of stockholders' equity until their disposition. The cost of securities sold is based on the specific identification method. All of the Company’s marketable securities are subject to a periodic impairment review. The Company recognizes an impairment charge when a decline in the fair value of its investments below the cost basis is judged to be other-than-temporary. For the year ended December 31, 2018, no other-than-temporary impairment charges were recorded for marketable securities. Grants and Accounts Receivable Grants receivable at December 31, 2018 and 2017 represent amounts due under several federal contracts with the National Institute of Allergy and Infectious Diseases (“NIAID”), a division of the National Institutes of Health (“NIH”) (collectively, the “NIH Grants”). The Company considers the grants receivable to be fully collectible; accordingly, no allowance for doubtful amounts has been established. If amounts become uncollectible, they are charged to operations. Accounts receivable at December 31, 2018, 2017 and 2016 consists of trade receivables from sales and services provided to certain customers, which are generally unsecured and due within 30 days. Estimated credit losses related to trade accounts receivable are recorded as general and administrative expenses and as an allowance for doubtful accounts within grants and accounts receivable, net. The Company reviews reserves and makes adjustments based on historical experience and known collectability issues and disputes. When internal collection efforts on accounts have been exhausted, the accounts are written off by reducing the allowance for doubtful accounts. As of December 31, 2018, 2017 and 2016, the allowance for doubtful accounts was $20 thousand , $20 thousand and $26 thousand , respectively. Inventory The Company determines inventory cost on a first-in, first-out basis. The Company reduces the carrying value of inventories to a lower of cost or market basis for those items that are potentially excess, obsolete or slow-moving. The Company reserves for excess and obsolete inventory based upon historical experience, sales trends, and specific categories of inventory and age of on-hand inventory. As of December 31, 2018, the Company's inventory is primarily comprised of finished goods and is recorded as a component of Prepaid expenses and other, net on the consolidated balance sheets. Property and Equipment Property and equipment are carried at cost less accumulated depreciation. Depreciation of property and equipment is computed using the straight-line method over the estimated useful lives of the assets, which are generally three to five years. Leasehold improvements are amortized over the lesser of the life of the lease or the life of the asset. Repairs and maintenance are charged to expense as incurred. Acquisitions and Intangibles The Company has engaged in business combination activity. The accounting for business combinations requires management to make judgments and estimates of the fair value of assets acquired, including the identification and valuation of intangible assets, as well as liabilities assumed. Such judgments and estimates directly impact the amount of goodwill recognized in connection with each acquisition, as goodwill presents the excess of the purchase price of an acquired business over the fair value of its net tangible and identifiable intangible assets. Goodwill and Other Long-Lived Assets Goodwill, which has an indefinite useful life, represents the excess of cost over fair value of net assets acquired. Goodwill is reviewed for impairment at least annually during the fourth quarter, or more frequently if events occur indicating the potential for impairment. During its goodwill impairment review, the Company may assess qualitative factors to determine whether it is more likely than not that the fair value of its reporting unit is less than its carrying amount, including goodwill. The qualitative factors include, but are not limited to, macroeconomic conditions, industry and market considerations, and the overall financial performance of the Company. If, after assessing the totality of these qualitative factors, the Company determines that it is not more likely than not that the fair value of its reporting unit is less than its carrying amount, then no additional assessment is deemed necessary. Otherwise, the Company proceeds to perform the two-step test for goodwill impairment. The first step involves comparing the estimated fair value of the reporting unit with its carrying value, including goodwill. If the carrying amount of the reporting unit exceeds its fair value, the Company performs the second step of the goodwill impairment test to determine the amount of loss, which involves comparing the implied fair value of the goodwill to the carrying value of the goodwill. The Company may also elect to bypass the qualitative assessment in a period and elect to proceed to perform the first step of the goodwill impairment test. The Company performed its annual assessment for goodwill impairment in the fourth quarter of 2018, noting no impairment and that the fair value of the goodwill exceeded the carrying value by a significant margin. There have not been any triggering events indicating the potential for impairment through December 31, 2018. In determining the fair value utilized in the goodwill impairment assessment, the Company considers qualitative factors such as changes in strategy, cash flows and the regulatory environment as well as the market capitalization of the Company’s publicly traded common stock. The Company’s share price is highly volatile and although there was significant excess of fair value over book value at the annual impairment assessment date as well as December 31, 2018, there have been subsequent declines in the market share price and there could be risk of impairment in the future. It is not possible at this time to determine if an impairment charge would result from these factors, or, if it does, whether such charge would be material. The Company will continue to monitor the recoverability of its goodwill. The Company evaluates its long-lived and intangible assets with definite lives, such as property and equipment, acquired technology, customer relationships, patent and license rights, for impairment by considering competition by products prescribed for the same indication, the likelihood and estimated future entry of non-generic and generic competition with the same or similar indication and other related factors. The factors that drive the estimate of useful life are often uncertain and are reviewed on a periodic basis or when events occur that warrant review. Recoverability is measured by comparison of the assets’ book value to future net undiscounted cash flows that the assets are expected to generate. There have not been any impairment losses of long-lived assets through December 31, 2018. Acquisition Consideration Payable - Gain or Loss on Contingent Liabilities Acquisition consideration payable relates to the Company’s acquisition of businesses and various other assets and is recorded on the Company’s consolidated balance sheets at fair value and is re-measured at each balance sheet date until such contingent liabilities have been settled, with changes in fair value recorded as gain or loss on contingent liabilities. The Company estimates the fair value of contingent consideration based on level 3 inputs primarily driven by the probability of achieving certain financing or operating related milestones. The Company estimates the fair value of contingent consideration based on level 3 inputs, which, for acquisition consideration payable related to asset acquisitions, are primarily driven by the probability of achieving certain financing or operating related milestones. Debt, Including Debt With Detachable Warrants Debt with detachable warrants are evaluated for the classification of warrants as either equity instruments, derivative liabilities, or liabilities depending on the specific terms of the warrant agreement. In circumstances in which debt is issued with equity-classified warrants, the proceeds from the issuance of convertible debt are first allocated to the debt and the warrants at their relative estimated fair values. The portion of the proceeds so allocated to the warrants are accounted for as paid-in capital and a debt discount. The remaining proceeds, as further reduced by discounts created by the bifurcation of embedded derivatives and beneficial conversion features, are allocated to the debt. The Company accounts for debt as liabilities measured at amortized cost and amortizes the resulting debt discount from the allocation of proceeds, to interest expense using the effective interest method over the expected term of the debt instrument. The Company considers whether there are any embedded features in debt instruments that require bifurcation and separate accounting as derivative financial instruments pursuant to ASC 815, Derivatives and Hedging . If the amount allocated to the convertible debt results in an effective per share conversion price less than the fair value of the Company’s common stock on the commitment date, the intrinsic value of this beneficial conversion feature is recorded as a discount to the convertible debt with a corresponding increase to additional paid in capital. The beneficial conversion feature discount is equal to the difference between the effective conversion price and the fair value of the Company’s common stock at the commitment date, unless limited by the remaining proceeds allocated to the debt. The Company may enter financing arrangements, the terms of which involve significant assumptions and estimates, including future net product sales, in determining interest expense, amortization period of the debt discount, as well as the classification between current and long-term portions. In estimating future net product sales, the Company assesses prevailing market conditions using various external market data against the Company’s anticipated sales and planned commercial activities. See Note 12 for discussion of the Scilex Notes, which include repayments based on a percentage of net sales of ZTlido® (lidocaine topical system 1.8%). Consequently, the Company imputes interest on the carrying value of the debt and record interest expense using an imputed effective interest rate. The Company reassesses the expected payments each reporting period and account for any changes through an adjustment to the effective interest rate on a prospective basis, with a corresponding impact to the classification of the Company’s current and long-term portions. Investments in Other Entities The Company holds a portfolio of investments in equity securities that are accounted for under either the equity method or cost method. Investments in entities over which the Company has significant influence but not a controlling interest are accounted for using the equity method, with the Company’s share of earnings or losses reported in loss on equity method investments. All investments are reviewed on a regular basis for possible impairment. If an investment's fair value is determined to be less than its net carrying value and the decline is determined to be other-than-temporary, the investment is written down to its fair value. Such an evaluation is judgmental and dependent on specific facts and circumstances. Factors considered in determining whether an other-than-temporary decline in value has occurred include: the magnitude of the impairment and length of time that the estimated market value was below the cost basis; financial condition and business prospects of the investee; the Company’s intent and ability to retain the investment for a sufficient period of time to allow for recovery in market value of the investment; issues that raise concerns about the investee's ability to continue as a going concern; any other information that the Company may be aware of related to the investment. Research and Development Costs and Collaborations All research and development costs are charged to expense as incurred. Such costs primarily consist of lab supplies, contract services, stock-based compensation expense, salaries and related benefits. Acquired In-Process Research and Development Expense The Company has acquired and may continue to acquire the rights to develop and commercialize new drug candidates. The up-front payments to acquire a new drug compound or drug delivery devices, as well as future milestone payments associated with asset acquisitions that do not meet the definition of derivative and are deemed probable to achieve the milestones, are immediately expensed as acquired in-process research and development provided that the drug has not achieved regulatory approval for marketing and, absent obtaining such approval, have no alternative future use. The acquired in-process research and development related to the business combination of Virttu Biologics Limited ("Virttu"), for which certain products are under development and expected to be commercialized in the future, was capitalized and recorded within “Intangibles, net” on the accompanying consolidated balance sheet. The Company commenced amortization of acquired in-process research and development related to the business combination of Scilex upon commercialization of ZTlido® (lidocaine topical system 1.8%) in October 2018. Capitalized in-process research and development will be reviewed annually for impairment or more frequently as changes in circumstance or the occurrence of events suggest that the remaining value may not be recoverable. (See Note 4 for further discussion of acquired in-process research and development expense related to the Sofusa acquisition). Income Taxes The provisions of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 740 “Income Taxes,” addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under ASC Topic 740-10, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The Company has determined that it has uncertain tax positions. The Company accounts for income taxes using the asset and liability method to compute the differences between the tax basis of assets and liabilities and the related financial amounts, using currently enacted tax rates. The Company has deferred tax assets, which are subject to periodic recoverability assessments. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount that more likely than not will be realized. As of December 31, 2018, the Company maintained a full valuation allowance against its deferred tax assets, with the exception of an amount equal to its deferred tax liabilities. Revenue Recognition The Company’s revenues are generated from various NIH grant awards, license fees, product sales, the sale of customized reagents and other materials, and the provision of contract manufacturing and other services. The Company does not have significant costs associated with costs to obtain contracts with its customers. Substantially all of the Company’s revenues and accounts receivable result from contracts with customers. Grant Revenues The revenue from the NIH grant awards is based upon subcontractor and internal costs incurred that are specifically covered by the grant, and where applicable, a facilities and administrative rate that provides funding for overhead expenses. These revenues are recognized when expenses have been incurred by subcontractors or when the Company incurs internal expenses that are related to the grant. Grant revenues were not material for the twelve months ended December 31, 2018. Royalty and License Revenues License fees for the licensing of product rights are recorded as deferred revenue upon receipt of cash and recognized as revenue on a straight-line basis over the license period, with the exception of license agreements with no remaining performance obligations or undelivered obligations. The Company applies judgment in determining the timing of revenue recognition related to contracts that include multiple performance obligations. The total transaction price of the contract is allocated to each performance obligation in an amount based on the estimated relative standalone selling prices of the promised goods or services underlying each performance obligation. For goods or services for which observable standalone selling prices are not available, the Company develops an estimated standalone selling price of each performance obligation. As of December 31, 2018, the future performance obligations for royalty and license revenues relate to the ImmuneOncia Therapeutics, LLC (“ImmuneOncia”) and NantCell, Inc. (“NantCell”) license agreements. The total consideration for the ImmuneOncia license performance obligation, effective September 1, 2016, represented $9.6 million . The estimated revenue expected to be recognized for future performance obligations, as of December 31, 2018 was approximately $8.5 million . The Company expects to recognize license revenue of approximately $0.5 million of the remaining performance obligation annually through the remaining term. The Company applied judgment in estimating the 20 -year contract term, analogous to the expected life of the patent, over which revenue is recognized over time given the ongoing performance obligation related to the Company's participation on a steering committee for the technologies under the agreement. As of December 31, 2018 and December 31, 2017, the NantCell license agreement, effective April 21, 2015, represented $110 million of contract liabilities reflected in long-term deferred revenue. See Note 11 for additional information regarding the remaining performance obligation for the agreement. Sales and Services Revenues Sales and services revenues are comprised of Scilex product sales of ZTlido® (lidocaine topical system 1.8%), contract manufacturing associated with sales of customized reagents at Concortis Biosystems Corp. ("Concortis"), materials and supply agreements, contract manufacturing services at BioServ Corporation, and the Company’s joint development agreement with Celularity Inc. The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which it recognizes revenue at the amount to which it has the right to invoice for services performed. The Company applied the practical expedient in ASC Topic 606-10-50-14 to the revenue contracts for Concortis sales and services and materials and supply agreements due to the short-term length of such contracts. The following table shows sales and service revenues disaggregated by product and services type for the years ended December 31, 2018, 2017 and 2016 (in thousands): Years Ended December 31, 2018 2017 2016 Scilex product sales 2,606 — — Concortis sales and services 5,159 4,049 2,223 Materials and supply agreements 3,267 553 879 Bioserv sales and services 5,992 5,000 — Joint development agreement 3,333 1,667 — $ 20,357 $ 11,269 $ 3,102 The Company is obligated to accept from customers the return of products sold that are damaged or do not meet certain specifications. The Company may authorize the return of products sold in accordance with the terms of its sales contracts, and estimates allowances for such amounts at the time of sale. The Company has not experienced any sales returns. Scilex Pharmaceuticals Inc. (“Scilex”) Revenues from Scilex product sales include sales of its ZTlido® (lidocaine topical system 1.8%). Scilex’s performance obligation with respect to Scilex product sales is satisfied at a point in time, which transfers control upon delivery of product to the customer. The Company considers control to have transferred upon delivery because the customer has legal title to the asset, physical possession of the asset has been transferred to the customer, the customer has significant risks and rewards of ownership of the asset, and the Company has a present right to payment at that time. The Company identified a single performance obligation. Invoicing typically occurs upon shipment and the length of time between invoicing and when payment is due is not significant. The aggregate dollar value of unfulfilled orders as of December 31, 2018 was not material. For Scilex product sales, the Company records gross-to-net sales adjustments for government and managed care rebates, chargebacks, wholesaler fees, sales returns and prompt payment discounts. Such variable consideration are estimated in the period of the sale and are estimated using a most likely amount approach based primarily upon provisions included in the Company’s customer contract, customary industry practices and current government regulations and was not significant for the year ended December 31, 2018. There were no significant changes during the year ended December 31, 2018. Concortis Biosystems Corporation (“Concortis”) Contract manufacturing associated with sales of customized reagents for Concortis operations relate to providing synthetic expertise to customers’ synthesis by delivering proprietary cytotoxins, linkers and linker-toxins and ADC service using industry standard toxin and antibodies provided by customers which are recognized at a point in time upon the transfer of control, which is generally upon shipment given the short contract terms which are generally three months or less. Materials and Supply Agreements Revenues from the sale of materials associated with the Company's research and development arrangements are recognized at a point in time upon the transfer of control, which is generally, upon shipment. As of December 31, 2018, outstanding performance obligations related to materials and supply agreements was $0.9 million , of which $0.6 million is expected to be fulfilled during the next twelve months. Bioserv Corporation ( “ Bioserv ” ) Revenues from contract manufacturing services associated with the Company's Bioserv operations related to finish and fill activities for drug products and reagents are recognized ratably over the contract term based on a time-based measure, which reflects the transfer of services to the customer, because the manufactured products are highly customized and do not have an alternative use to the Company. As of December 31, 2018 and 2017 , the Company had approximately $0.4 million and $0.5 million of unbilled accounts receivable for which revenue has been recognized but not billed at the reporting date, respectively. As of December 31, 2018 and 2017 , the Company had approximately $0.2 million and $0.4 million of upfront payments related to its contract manufacturing services included in deferred revenue, respectively. As of December 31, 2018 and 2017 , the estimated revenue expected to be recognized for future performance obligations associated with contract manufacturing services was approximately $1.6 million and $3.0 million , respectively. The following table includes Bioserv sales and services revenue expected to be recognized in the future related to performance obligations that are undelivered or partially delivered at the end of the reporting period and do not include contracts with original durations of one year or less (in thousands): 2019 2020 and thereafter Contract manufacturing services $1,118 $529 Joint Development Agreement On September 26, 2017, the Company entered into a joint development agreement with Celularity Inc. whereby the Company agreed to provide research services to Celularity Inc. through June 30, 2018 in exchange for an upfront payment of $5.0 million . The revenue related to the joint development agreement of $5.0 million was recognized over the length of the service agreement as services were performed. The Company recorded sales and services revenues under the joint development agreement of $3.3 million and $1.7 million for the years ended December 31, 2018 and 2017, respectively. Stock-Based Compensation The Company accounts for stock-based compensation in accordance with FASB ASC Topic 718 “Compensation – Stock Compensation,” which establishes accounting for equity instruments exchanged for employee services. Under such provisions, stock-based compensation cost is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense, under the straight-line method, over the employee’s requisite service period (generally the vesting period of the equity grant). The Company accounts for equity instruments, including restricted stock or stock options, issued to non-employees in accordance with authoritative guidance for equity based payments to non-employees. Stock options issued to non-employees are accounted for at their estimated fair value determined using the Black-Scholes option-pricing model. The fair value of options and restricted stock granted to non-employees is re-measured over the vesting period, and the resulting changes in fair value are recognized as expense in the period of the change in proportion to the services rendered to date. Comprehensive (Loss) Income Comprehensive (loss) income is primarily comprised of net income (loss) and adjustments for the change in unrealized gains and losses on the Company’s investments in available-for-sale marketable securities, net of taxes. The Company displays comprehensive (loss) income and its components in its consolidated statements of comprehensive (loss) income. Net Income (Loss) per Share Basic net income (loss) per share is computed by dividing net loss for the period by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share reflects the additional dilution from potential issuances of common stock, such as stock issuable pursuant to the exercise of stock options or the exercise of outstanding warrants. The treasury stock method and if-converted method are used to calculate the potential dilutive effect of these common stock equivalents. Potentially dilutive shares are excluded from the computation of diluted net loss per share when their effect is anti-dilutive. In periods where a net loss is presented, all potentially dilutive securities are anti-dilutive and are excluded from the computation of diluted net loss per share. During 2018, 2017 and 2016, the Company had securities outstanding which could potentially dilute basic earnings per share in the future, but were excluded from the computation of diluted net loss per share, as their effect would have been anti-dilutive. These outstanding securities consist of the following: Years Ended December 31, 2018 2017 2016 Outstanding options 10,523,075 6,321,400 4,332,876 Outstanding warrants 25,635,117 4,708,860 7,740,340 Segment Information The Company is engaged primarily in the discovery and development of innovative therapies focused on oncology and the treatment of chronic cancer pain as well as immunology and infectious diseases based on its platform technologies. Accordingly, the Company has determined that it operates in one operating segment. Recent Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) , which supersedes all existing revenue recognition requirements, including most industry-specific guidance. |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions Sofusa ® Acquisition On July 2, 2018, the Company entered into an Asset Purchase Agreement (the “Sofusa Purchase Agreement”) with Kimberly-Clark Corporation (“KCC”); Kimberly-Clark Global Sales, LLC (“KCCGS”); and Kimberly-Clark Worldwide, Inc. (“KCCW” and together with KCC and KCCGS, “Kimberly-Clark”) pursuant to which, among other things, the Company acquired certain of Kimberly-Clark’s assets related to micro-needle drug delivery system, including the Sofusa® platform (the “Sofusa Assets”) and related fixed assets, and assumed certain of Kimberly-Clark’s liabilities related to the Sofusa Assets (the “Sofusa Acquisition”). The closing of the Sofusa Acquisition (the “Sofusa Closing”) occurred on July 2, 2018. At the Sofusa Closing, the Company paid $10.0 million and agreed to pay additional consideration to Kimberly-Clark upon the achievement of certain regulatory and net sales milestones, as well as a percentage in the low double-digits of any non-royalty amounts received by the Company in connection with any license, sale or other grant of rights by the Company to develop or commercialize the Sofusa Assets (all such additional consideration, the “Sofusa Contingent Consideration”). Under the Sofusa Purchase Agreement, the aggregate amount of the Sofusa Contingent Consideration payable by the Company will not exceed $300.0 million . The Company also agreed to pay Kimberly-Clark a low single-digit royalty on all net sales with respect to the first five products developed by the Company or its licensees that utilizes intellectual property included in the Sofusa Assets. The transaction was accounted for as an asset acquisition since substantially all the value of the gross assets was concentrated in a single asset. Under the Asset Purchase Agreement, the Company acquired the Sofusa DoseDisc micro-needle technology designed to increase the efficacy of drug delivery by way of transdermal drug delivery for cash consideration of $10.0 million which was allocated based on the relative fair value of the assets acquired. No contingent consideration was recorded as of December 31, 2018 since the related regulatory approval milestones are not deemed probable until they actually occur. As a result, $9.5 million was expensed as a component of acquired in-process research and development and the remaining $0.5 million was recorded primarily to fixed assets. Acquisition of Virttu Biologics Limited On April 27, 2017, the Company entered into a Share Purchase Agreement (the “Virttu Purchase Agreement”) with TNK Therapeutics, Inc., a majority-owned subsidiary of the Company (“TNK”), Virttu Biologics Limited (“Virttu”), the shareholders of Virttu (the “Virttu Shareholders”) and Dayspring Ventures Limited, as the representative of the Virttu Shareholders, pursuant to which, among other things, TNK acquired from the Virttu Shareholders 100% of the outstanding ordinary shares of Virttu (the “Virttu Acquisition”). Virttu focuses on the development of oncolytic viruses that infect and selectively multiply in and destroy tumor cells without damaging healthy tissue. Its lead oncolytic virus candidate, Seprehvir, infects and replicates in cancer cells selectively, leaving normal cells unharmed. Under the Virttu Purchase Agreement, the total amount of the consideration payable to the Virttu Shareholders in the Virttu Acquisition is equal to $25 million , less Virttu’s net debt (the “Virttu Base Consideration”). An additional $10 million contingent consideration is payable upon the achievement of certain regulatory milestones (as described below) (the “Regulatory Approval Consideration”). At the closing of the Virttu Acquisition (the “Closing”), the Company issued to the Virttu Shareholders consideration valued at approximately $2.2 million , which consisted primarily of an aggregate of 797,081 shares (the “Virttu Closing Shares”) and approximately $557,000 in cash (the “Cash Consideration”). The issuance of the Virttu Closing Shares and the payment of the Cash Consideration satisfied TNK’s obligation to pay 20% of the Virttu Base Consideration at the Closing. Under the terms of the Virttu Purchase Agreement, the Company agreed to provide additional consideration to the Virttu Shareholders, as follows: (1) Upon a financing resulting in gross proceeds (individually or in the aggregate) to TNK of at least $50.0 million (a “Qualified Financing”), TNK agreed to issue to the Virttu Shareholders an aggregate number of shares of its capital stock (“TNK Capital Stock”) as is equal to the quotient obtained by dividing 80% of the Virttu Base Consideration by the lowest per share price paid by investors in the Qualified Financing (the “TNK Financing Consideration”); provided, however, that 20% of the TNK Financing Consideration was to be held in escrow until April 27, 2018 (the “Financing Due Date”), to be used to, among other things, satisfy the indemnification obligations of the Virttu Shareholders. In the event that a Qualified Financing did not occur, then on the Financing Due Date, the Company agreed to issue to the Virttu Shareholders an aggregate number of shares of the Company’s common stock as is equal to the quotient obtained by dividing 80% of the Virttu Base Consideration, by $5.55 (as adjusted, as appropriate, to reflect any stock splits or similar events affecting the Company’s common stock after the Closing). (2) Within 45 business days after Virttu becomes aware that certain governmental bodies in the United States, the European Union, the United Kingdom or Japan have approved for commercialization, on or before October 26, 2024, Seprehvir (or any enhancement, combination or derivative thereof) as a monotherapy or in combination with one or more other active components (each of the first two such approvals by a governmental body being a “Regulatory Approval”), TNK shall pay half of the Regulatory Approval Consideration to the Virttu Shareholders, in a combination of (a) up to $5.0 million in cash (the “Regulatory Approval Cash”) and/or (b) (i) such number of shares of the Company’s common stock as is equal to the quotient obtained by dividing $5.0 million less the Regulatory Approval Cash (the “Regulatory Approval Share Value”) by the 30 Day VWAP (as defined below) of one share of the Company’s common stock; (ii) if TNK has completed its first public offering of TNK Capital Stock, the number of shares of TNK Capital Stock as is equal to the quotient obtained by dividing the Regulatory Approval Share Value by the 30 Day VWAP of one share of TNK Capital Stock; or (iii) such number of shares of common stock of a publicly traded company as is equal to the quotient obtained by dividing the Regulatory Approval Share Value by the volume weighted average price of the relevant security, as reported on the Nasdaq Capital Market (or other principal stock exchange or securities market on which the shares are then listed or quoted) for the thirty trading days immediately following the receipt of Regulatory Approval (the “30 Day VWAP”), with the composition of the Regulatory Approval Consideration to be at TNK’s option. In order for a second regulatory approval to qualify as a Regulatory Approval under the Purchase Agreement, the second approval must be granted by a different governmental body in a different jurisdiction than that which granted the first Regulatory Approval. At April 27, 2017, the 80% of the Virttu Base Consideration was valued at $12.8 million . The fair value of the 80% of the Virttu Base Consideration is recorded as a current liability and will be adjusted quarterly for changes in fair value or as events and circumstances arise. At April 27, 2017, the contingent Regulatory Approval Consideration was valued at $1.0 million . The fair value of the contingent Regulatory Approval Consideration is recorded as a non-current liability within "Deferred rent and other" on the accompanying consolidated balance sheet and will be adjusted quarterly for changes in fair value or as events and circumstances arise. The consolidated financial statements include the results of operations from this transaction, which have been accounted for as a business combination, and require, among other things, that assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date. The valuation of the acquired assets and liabilities resulted in the recognition of identifiable assets of approximately $16.0 million comprised mainly of in-process research and development of approximately $15.4 million , deferred tax liabilities of $0.8 million and goodwill of approximately $1.4 million . Various factors contributed to the establishment of goodwill, including an assembled workforce. There is no tax deductible goodwill for Virttu. In connection with the Virttu transaction, the Company recorded acquisition costs of approximately $0.9 million in general and administrative expenses for the twelve months ended December 31, 2017, for legal and related costs. Acquisition costs are expensed as incurred. The acquisition of Virttu was not significant to the Company's consolidated financial statements. TNK did not complete a Qualified Financing prior to the Financing Due Date and on April 27, 2018. The Company, TNK and Dayspring entered into the Amendment, pursuant to which, among other things, the Company agreed that the acquisition consideration, otherwise payable on April 27, 2018 to the Virttu Shareholders, shall be as follows: (1) an issuance of 1,795,011 shares of the Company's common stock to the Virttu Shareholders and (2) $9.9 million payable in cash. The Company issued an aggregate of 1,795,011 shares of the Company's common stock to the Virttu Shareholders on April 27, 2018 for a value of $11.3 million . The approximately $9.9 million payable in cash is recorded on the Company's consolidated balance sheet under Acquisition Consideration Payable and has not been paid as of the date of this filing. Acquisition of Scilex Pharmaceuticals Inc. On November 8, 2016, the Company entered into a Stock Purchase Agreement (the “Scilex Purchase Agreement”) with Scilex and a majority of the stockholders of Scilex (the “Scilex Stockholders”) pursuant to which, on November 8, 2016, the Company acquired from the Scilex Stockholders, and the Scilex Stockholders sold to the Company, approximately 72% of the outstanding capital stock of Scilex (the “Scilex Acquisition”). The remainder of the outstanding capital stock of Scilex represents a noncontrolling interest of which approximately 19.3% continues to be held by ITOCHU CHEMICAL FRONTIER CORPORATION following the Scilex Acquisition. Scilex focuses on the development and commercialization of specialty pharmaceutical products for the treatment of pain; its lead product, ZTlido® (lidocaine topical system 1.8%), is a branded lidocaine topical system formulation for the treatment of chronic pain. As discussed in Note 17, ITOCHU CHEMICAL FRONTIER Corporation serves as the sole manufacturer and supplier to Scilex for the ZTlido® product. At the closing of the Scilex Acquisition, the Company issued to the Scilex Stockholders that were accredited investors (the “Accredited Scilex Stockholders”) consideration valued at $4.8 million which consisted primarily of an aggregate of 754,911 shares of the Company’s common stock (the “Common Stock”). Under the terms of the Scilex Purchase Agreement, the Company agreed to provide additional consideration to the Accredited Scilex Stockholders upon the achievement of certain milestones, as follows: (1) Upon receipt of notice from the U.S. Food and Drug Administration (the “FDA”) that the FDA has accepted Scilex’s resubmitted new drug application for ZTlido® (lidocaine topical system 1.8%) for the treatment of postherpetic neuralgia (the “NDA”), the Company agreed to deliver to the Accredited Scilex Stockholders a number of shares of Common Stock equal to the quotient obtained by dividing 10% of the total undiscounted purchase consideration of approximately $47.8 million (the “Adjusted Base Consideration”) by a price (the “FDA Acceptance Price”) equal to the closing market price of one share of Common Stock, as reported by The Nasdaq Stock Market LLC (“Nasdaq”) on the date of Scilex’s receipt of the FDA notice or, if no closing price is reported for such date, the closing price on the last preceding date for which such quotation exists; provided, however, that in no event was the FDA Acceptance Price to be greater than $25.32 or less than $6.33 (in each case as adjusted, as appropriate, to reflect any stock splits or similar events affecting the Common Stock). On September 11, 2017, the Company received notice from the FDA that the FDA had accepted the NDA and the Company issued to the Accredited Scilex Stockholders consideration valued at $1.4 million , which consisted primarily of an aggregate of 754,930 shares of Common Stock. (2) Upon receipt of notice from the FDA that the FDA has approved the NDA for commercialization, the Company will deliver to the Accredited Scilex Stockholders cash and shares of Common Stock in such proportion to be determined in the Company’s sole discretion, with a total value equal to 80% of the Adjusted Base Consideration (the “FDA Approval Consideration”). To the extent that the Company elects to pay any portion of the FDA Approval Consideration in shares of Common Stock, the number of shares shall be equal to the quotient obtained by dividing (a) the portion of the FDA Approval Consideration to be paid in shares of Common Stock by (b) a price (the “FDA Approval Price”) equal to the closing market price of one share of Common Stock, as reported by Nasdaq on the date of the Scilex’s receipt of the FDA notice or, if no closing price is reported for such date, the closing price on the last preceding date for which such quotation exists; provided, however, that in no event shall the FDA Approval Price be greater than $25.32 or less than $6.33 (in each case as adjusted, as appropriate, to reflect any stock splits or similar events affecting the Common Stock). However, in no event may the Company make an election with respect to the FDA Approval Consideration so as to cause the total number of shares of Common Stock issued in connection with the Scilex Acquisition to exceed 4.99% of the total number of shares of Common Stock of the Company outstanding as of immediately prior to the Closing (as adjusted, as appropriate, to reflect any stock splits or similar events affecting the Common Stock), unless the Company has obtained stockholder approval to issue a greater number of shares. On February 28, 2018, the Company received notice that the FDA had approved the NDA and the Company issued the Accredited Scilex Stockholders consideration valued at $38.2 million , which included an aggregate of 1,381,346 shares of Common Stock. At November 8, 2016, the contingent consideration was valued at $33.5 million , resulting in a total purchase consideration of approximately $38.2 million . The fair value of the contingent consideration is recorded as a current liability and will be periodically adjusted for changes in fair value or as events and circumstances arise. The remainder of the outstanding capital stock of Scilex represents a noncontrolling interest which was valued at $12.3 million at November 8, 2016. The consolidated financial statements include the results of operations from this transaction, which have been accounted for as a business combination, and require, among other things, that assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date. The valuation of the acquired assets resulted in the recognition of identifiable assets of approximately $54.9 million comprised mainly of in-process research and development of $21.9 million and patents of $32.6 million . The valuation of the acquired liabilities resulted in the recognition of liabilities of approximately $17.9 million comprised mainly deferred tax liabilities of $13.9 million . The Company recorded goodwill of $13.5 million associated with the acquisition. The amounts in this Note reflect the adjustment described above. Various factors contributed to the establishment of goodwill, including an assembled workforce. There is no tax deductible goodwill for Scilex. Acquired In-process Research and Development of BDL In August 2015, the Company and TNK entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) with BDL Products, Inc. (“BDL”) and the stockholders of BDL (“Stockholders”) pursuant to which the Stockholders sold all of their shares of capital stock in BDL to TNK for: (1) a cash payment of $100.00 , and (2) $6.0 million in shares of TNK Class A Stock, subject to adjustment in certain circumstances, to be issued to the Stockholders upon a financing resulting in gross proceeds (individually or in the aggregate) to TNK of at least $50.0 million (a “Qualified Financing”). In accordance with subsequent amendments to the Stock Purchase Agreement, in the event a Qualified Financing did not occur by October 15, 2017 (which is subject to further extension as implied and based on previously amended dates) or TNK did not complete an initial public offering of shares of its capital stock by September 15, 2017, in lieu of receiving shares of TNK pursuant to the acquisition, the Stockholders were entitled to receive an aggregate of 309,916 shares of the Company’s common stock, subject to adjustment in certain circumstances. A Qualified Financing did not occur by October 15, 2017 and TNK did not complete an initial public offering by September 15, 2017 and the Company issued 309,916 shares of its common stock to the Stockholders on March 19, 2018. Acquired In-process Research and Development of Cargenix In August 2015, the Company and TNK Therapeutics, Inc., its subsidiary (“TNK”) entered into a Membership Interest Purchase Agreement (the “Membership Interest Purchase Agreement”) with CARgenix Holdings LLC (“CARgenix”) and the members of CARgenix (the “Members”) pursuant to which the Members sold all of their membership interests in CARgenix to TNK for: (1) a cash payment of $100.00 , and (2) $ 6.0 million in shares of TNK Class A common stock (“TNK Class A Stock”), subject to adjustment in certain circumstances, to be issued to the Members upon a financing resulting in gross proceeds (individually or in the aggregate) to TNK of at least $50.0 million (a “Qualified Financing”). In accordance with an amendment to the Membership Interest Purchase Agreement entered into in March 2016, in the event a Qualified Financing did not occur by September 15, 2016 or TNK did not complete an initial public offering of shares of its capital stock by October 15, 2016, in lieu of receiving shares of TNK pursuant to the acquisition, the Members would receive an aggregate of 309,917 shares of the Company’s common stock, subject to adjustment in certain circumstances. TNK did not complete a Qualified Financing by the amended financing deadline and the Company issued 309,917 shares of its common stock to the Members on October 7, 2016. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Fair value measurement is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. A fair value hierarchy is established, which prioritizes the inputs used in measuring fair value into three broad levels as follows: Level 1—Quoted prices in active markets for identical assets or liabilities. Level 2—Inputs, other than quoted prices in active markets, that are observable either directly or indirectly. Level 3—Unobservable inputs based on the Company's own assumptions. The following table presents the Company’s financial assets and liabilities that are measured at fair value on a recurring basis (in thousands): Fair Value Measurements at December 31, 2018 Balance Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Cash and cash equivalents $ 158,738 $ 158,738 $ — $ — Restricted cash 54,592 54,592 — — Marketable securities 297 247 — 50 Total assets $ 213,627 $ 213,577 $ — $ 50 Liabilities: Acquisition consideration payable $ 11,312 $ — $ — $ 11,312 Acquisition consideration payable, non-current 725 — — 725 Total liabilities $ 12,037 $ — $ — $ 12,037 Fair Value Measurements at December 31, 2017 Balance Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Cash and Cash Equivalents $ 20,429 $ 20,429 $ — $ — Marketable securities 441 356 — 85 Total assets $ 20,870 $ 20,785 $ — $ 85 Liabilities: Acquisition consideration payable $ 53,209 $ — $ — $ 53,209 Acquisition consideration payable, non-current 1,063 1,063 Total liabilities $ 54,272 $ — $ — $ 54,272 The Company's financial assets and liabilities carried at fair value are comprised of cash, cash equivalents, restricted cash, marketable securities and acquisition consideration payable. Cash and cash equivalents consist of money market accounts and bank deposits which are highly liquid and readily tradable. These investments are valued using inputs observable in active markets for identical securities. Marketable securities are valued using inputs observable in active markets for identical securities. The fair value of the contingent consideration is measured on a recurring basis using significant unobservable inputs (Level 3). Contingent consideration is measured using the income approach and discounting to present value the contingent payments expected to be made based on assessment of the probability that the company would be required to make such future payment. In connection with the issuance of the Loan Agreement as described in Note 12, the Company recorded a derivative liability associated with the Conditional Warrants in the amount of $2.8 million , which balance was immaterial as of December 31, 2018 based on the probability of achieving certain milestones and resulted in a $2.8 million gain on derivative liability recorded during the quarter ended December 31, 2018. Such derivative liability was valued using a Monte Carlo simulation model using significant unobservable inputs (Level 3) related to the probability of achieving certain commercial and financial milestones as outlined in the Loan Agreement. The following is a summary of the contingent consideration liabilities associated with acquisitions entered into during the years ended 2017 and 2016. During the year ended December 31, 2018, the fair value remeasurement adjustments related to the Company’s acquisitions resulted in an increase to the contingent consideration liabilities by $9.6 million and there were $51.9 million in settlements of contingent consideration related to such liabilities. Settlements of contingent consideration for the twelve months ended December 31, 2018 include the settlements of Scilex and BDL liabilities for $38.2 million and $2.3 million , respectively, and the $11.3 million partial settlement of the Virttu financing milestone in common stock of the Company ( $9.9 million of the Virttu contingent liability remains to be paid in cash). The following tables includes a summary of the changes to contingent consideration liabilities during the year ended December 31, 2018, 2017 and 2016. The contingent consideration is measured at fair value using significant unobservable inputs (Level 3) during the twelve months ended December 31, 2018, 2017 and 2016: (in thousands) 2018 Beginning Balance at December 31, 2017 54,272 Re-measurement of Fair Value 9,644 Settlements of current year contingent consideration (51,879 ) Ending Balance at December 31, 2018 $ 12,037 (in thousands) 2017 Beginning Balance at December 31, 2016 48,362 Scilex acquisition adjustment (See Note 4) (6,500 ) Acquisition consideration payable - current year acquisitions (See Note 4) 12,807 Contingent consideration (Non-current) - current year acquisitions (See Note 4) 983 Re-measurement of Fair Value — Payment of shares for current year contingent consideration (1,380 ) Ending Balance at December 31, 2017 $ 54,272 (in thousands) 2016 Beginning Balance at December 31, 2015 — Contingent consideration - current year acquisitions (1) 50,137 Re-measurement of Fair Value – current year acquisitions (1,775 ) Payment of current year contingent consideration — Ending Balance at December 31, 2016 $ 48,362 (1) Includes the BDL contingent consideration of 309,917 shares. The following table includes a summary of the Company’s contingent and financing liabilities, related inputs used to determine fair value, and the valuation methodologies used for the fair value measurements using significant unobservable inputs (Level 3) at December 31, 2018: (in thousands) Fair Value Measurements at December 31, 2018 Valuation Methodology Significant Unobservable Input Weighted Average (range, if applicable) Virttu Contingent Consideration (Non-Current) $ 725 Multiple outcome discounted cash flow Discount Rate Probability of Regulatory Milestone 19.2% Concortis Contingent Consideration 511 Multiple outcome discounted cash flow Discount Rate Percent probabilities assigned to scenarios 19.2% Shanghai Three Contingent Consideration 336 Multiple outcome discounted cash flow Discount Rate Percent probabilities assigned to scenarios 19.2% RWMC Contingent Consideration 503 Multiple outcome discounted cash flow Discount Rate, Percent probabilities assigned to scenarios 19.2% The principal significant unobservable inputs used in the valuations of the contingent considerations are the discount rates, and probabilities assigned to scenario outcomes. An increase in the discount rate will cause a decrease in the fair value of the contingent consideration. Conversely, a decrease in the discount rate will cause an increase in the fair value of the contingent consideration. An increase in the probabilities assigned to certain scenarios will cause the fair value of contingent consideration to increase. Conversely, a decrease in the probabilities assigned to certain scenarios will cause the fair value of contingent considerations to decrease. |
Marketable Securities
Marketable Securities | 12 Months Ended |
Dec. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Marketable Securities | Marketable Securities Marketable securities consisted of the following as of December 31, 2018 (in thousands): December 31, 2018 Cost Gross Realized Gains (Losses) Fair Value Trading securities: MedoveX common shares and warrants $ 750 $ (453 ) $ 297 December 31, 2017 Cost Gross Realized Gains (Losses) Fair Value Trading securities: MedoveX common shares and warrants $ 750 $ (309 ) $ 441 Trading Securities On August 5, 2016, the Company entered into a Unit Purchase Agreement (the “Unit Purchase Agreement”) with MedoveX Corporation (“MedoveX”). Pursuant to the terms of the Unit Purchase Agreement, the Company purchased three Units for $750 thousand . Each Unit had a purchase price of $250 thousand and consisted of (i) 208,333 shares of MedoveX common stock (the “MedoveX Common Stock”), and (ii) a warrant to purchase 104,167 shares of MedoveX Common Stock (the “MedoveX Warrant”). The MedoveX Warrant has an initial exercise price of $1.52 per share, subject to adjustment, and is initially exercisable six months following the date of issuance for a period of five years from the date of issuance. In addition, the Company entered into a Registration Rights Agreement with MedoveX pursuant to which MedoveX was required to file a registration statement registering for resale all shares of MedoveX Common Stock and shares of MedoveX Common Stock issuable pursuant to the MedoveX Warrant issued as part of the Units. For the twelve months ended December 31, 2018 and 2017, the Company recorded a loss of $0.1 million and a loss of $0.7 million on trading securities, respectively. The Company’s investment in MedoveX will be revalued on each balance sheet date. The fair value of the Company’s holding in MedoveX Common Stock at December 31, 2018 is a Level 1 measurement. The fair value of the Company’s holdings in the MedoveX Warrant was estimated using the Black-Scholes option-pricing method. The risk-free rate was derived from the U.S. Treasury yield curve, matching the MedoveX Warrant’s term, in effect at the measurement date. The volatility factor was determined based on MedoveX’s historical stock prices. The warrant valuation is a Level 3 measurement. The following table includes a summary of the warrant measured at fair value using significant unobservable inputs (Level 3) during the twelve months ended December 31, 2018 (in thousands): Total Beginning balance at December 31, 2017 $ 84 Addition of warrant — Change in fair value of warrant (34 ) Ending balance at December 31, 2018 $ 50 Available-for-sale Securities In July 2016, the Company completed the transactions contemplated by a letter agreement (the “Letter Agreement”) with the Chan Soon-Shiong Family Foundation (“Foundation”) and Cambridge Equities, LP (“Cambridge”). Pursuant to the terms of the Letter Agreement, among other things, (i) the Company agreed to sell to Foundation, and Foundation agreed to purchase from the Company, an aggregate of 5,618,326 shares of common stock of NantKwest held by the Company (representing all shares of NantKwest held by the Company), (ii) Foundation agreed to sell to the Company, and the Company agreed to purchase all reported shares held by Foundation and Cambridge, constituting an aggregate of 7,878,098 shares of Common Stock, (iii) Cambridge agreed to forfeit its right to purchase 500,000 shares of Common Stock issuable pursuant to a warrant to purchase 1,724,138 shares of Common Stock issued by the Company, and (iv) the Company agreed to pay to Foundation an aggregate of approximately $15.6 million . Effective upon closing, the Company repurchased the 7,878,098 shares of Common Stock. The Company recognized a gain of $27.2 million on the sale of the NantKwest stock in its consolidated statement of operations for the twelve months ended December 31, 2016 as a result of the transaction. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment consisted of the following as of December 31, 2018 and 2017 (in thousands): December 31, 2018 2017 Furniture and fixtures $ 1,127 $ 1,035 Office equipment 632 493 Machinery and lab equipment 27,690 19,868 Leasehold improvements 9,001 7,327 Construction in progress 1,221 — 39,671 28,723 Less accumulated depreciation (15,287 ) (9,378 ) $ 24,384 $ 19,345 Depreciation expense for the years ended December 31, 2018, 2017 and 2016 was $6.0 million , $4.5 million and $2.0 million , respectively. |
Cost Method Investments
Cost Method Investments | 12 Months Ended |
Dec. 31, 2018 | |
Investments [Abstract] | |
Cost Method Investments | Cost Method Investments As of December 31, 2018 and 2017, the aggregate carrying amount of the Company’s cost-method investments in non-publicly traded companies was $237.0 million and included an ownership interest in NantCell, Inc. (“NantCell”), NantBioScience, Inc. (“NantBioScience”), Globavir Biosciences, Inc., Brink Biologics, Inc., Coneksis, Inc., and Celularity Inc. The Company’s cost-method investments are assessed for impairment quarterly. The Company has determined that it is not practicable to estimate the fair value of its cost-method investments on a regular basis and does not reassess the fair value of cost-method investments if there are no identified events or changes in circumstances that may have a significant adverse effect on the fair value of the investments. No impairment losses were recorded during the years ended December 31, 2018, 2017 and 2016. |
Equity Method Investments
Equity Method Investments | 12 Months Ended |
Dec. 31, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments | Equity Method Investments NANTibody In 2013, the Company acquired IgDraSol Inc. (“IgDraSol”), a private company focused on the development of oncologic agents for the treatment of cancer, from a third party unrelated to the NantWorks, LLC (“NantWorks”) affiliated entities for 3 million shares of the Company's common stock and $380,000 of cash for a total purchase price of $29.1 million . This transaction included the acquisition of IgDraSol’s lead compound, Cynviloq TM , a micellar diblock copolymeric paclitaxel formulation drug product. In May 2015, the Company entered into an agreement with NantPharma, LLC (“NantPharma”), a NantWorks company, pursuant to which the Company sold to NantPharma all of its equity interests in IgDraSol, which continued to hold the rights to Cynviloq TM . Pursuant to the agreement, NantPharma paid the Company an upfront fee of $90.1 million , of which $60.0 million was required to be used by the Company to fund two joint ventures, as described below. In April 2015, the Company and NantCell, a subsidiary of NantWorks, LLC (“NantWorks”), a private company owned by Dr. Patrick Soon-Shiong, established a new entity called Immunotherapy NANTibody, LLC (“NANTibody”) as a stand-alone biotechnology company with $100.0 million initial joint funding. NantCell owns 60% of the equity interest of NANTibody and agreed to contribute $60.0 million to NANTibody. The Company owns 40% of NANTibody and in July 2015, the Company had NantPharma, LLC (“NantPharma”) contribute its portion of the initial joint funding of $40.0 million to NANTibody from the proceeds of the sale of IgDraSol, Inc. (“IgDraSol”). Additionally, the Company and NantCell were allowed to appoint three and two representatives, respectively, to NANTibody’s five -member Board of Directors. NANTibody will focus on accelerating the development of multiple immuno-oncology mAbs for the treatment of cancer, including but not limited to anti-PD-1, anti-PD-L1, anti-CTLA4mAbs, and other immune-check point antibodies as well as ADCs and bispecific antibodies. NANTibody had been formed to advance pre-clinical and clinical immunology assets contributed by the Company and NantCell. The Company continues to hold 40% of the outstanding equity of NANTibody and NantCell holds the remaining 60% . Until July 2, 2017, NANTibody held approximately $100.0 million of cash and cash equivalents, and the Company recorded its investment in NANTibody at approximately $40.0 million . As an equity method investment, the Company's ratable portion of 40% of money expended for the development of intellectual property assets held by NANTibody would be reflected within income (loss) on equity method investments in its statement of operations. As a result of limited spending at NANTibody, the cash on hand at NANTibody remained at approximately $100.0 million since the inception of the NANTibody joint venture until July 2, 2017. Further, the Company's equity method investment in NANTibody remained at approximately $40.0 million until July 2, 2017. The financial statements of NANTibody are not received sufficiently timely for the Company to record its portion of earnings or loss in the current financial statements and therefore the Company reports its portion of earnings or loss on a quarter lag. In February 2018, NANTibody notified the Company that on July 2, 2017, NANTibody acquired all of the outstanding equity of IgDraSol in exchange for $90.1 million in cash. NANTibody purchased IgDraSol from NantPharma, LLC, which is controlled by NantWorks, an entity with a controlling interest in NantCell and NantPharma. Although the Company has had a designee serving on the Board of Directors of NANTibody since the formation of NANTibody in April 2015, and although the Company has held 40% of the outstanding equity of NANTibody since NANTibody’s formation, neither the Company nor its director designee was given any advance notice of NANTibody’s purchase of IgDraSol or of any board meeting or action to approve such purchase. As such, the Company's designee on NANTibody’s Board of Directors was not given an opportunity to consider or vote on the transaction as a director and the Company was not given an opportunity to consider or vote on the transaction in its position as a significant ( 40% ) equity holder of NANTibody. As a result of the July 2, 2017 purchase of IgDraSol, NANTibody’s cash and cash equivalents were reduced from $99.6 million as of June 30, 2017 to $9.5 million as of September 30, 2017, and NANTibody’s contributed capital was reduced from $100.0 million as of June 30, 2017 to $10.0 million as of September 30, 2017, to effect the transfer of IgDraSol from NantPharma to NANTibody. No additional information was provided to the Company to explain why NANTibody’s total assets as of September 30, 2017 were reduced by approximately $90.1 million . The Company requested, but did not receive, additional information from NANTibody for purposes of supporting the value of IgDraSol, including any information regarding clinical advancements in the entity since the sale of IgDraSol by the Company in May 2015. Prior to the communication of the transfer of IgDraSol from NantPharma to NANTibody, the Company relied on the cash and cash equivalents of NANTibody for purposes of determining the value of its investment in NANTibody, which capital was expended by NANTibody to acquire IgDraSol on July 2, 2017. As a result of the transfer of IgDraSol, the Company reassessed the recoverability of its equity method investment in NANTibody as of July 2, 2017. In doing so, the Company considered the expected outcomes for the intellectual property assets held by NANTibody as of July 2, 2017. As a result of the lack of evidence of any development activity associated with any of the assets held in NANTibody, given the passage of time since the formation of the joint venture, many competitive products from other drug developers worldwide have advanced and/or commercialized for the targeted disease indications of the assets held in NANTibody, and given the Company's minority interest in NANTibody (the investee), the Company concluded that it does not have the ability to recover the carrying amount of the investment and an other-than-temporary decline in the value of the investment had occurred. Accordingly, an impairment was recorded to the Company's equity method investment in NANTibody for the three and nine months ended September 30, 2017. The fair value of the Company’s investment in NANTibody was measured at fair value on July 2, 2017 using significant unobservable inputs (Level 3) due to the determination of fair value requiring significant judgment, including the potential outcomes of the intellectual property assets held by NANTibody. For these reasons, fair value was determined by applying the Company's 40% equity interest in NANTibody to the remaining cash and cash equivalents, which resulted in an impairment of $36.0 million . The impairment resulted in a revised carrying value of the Company's investment in NANTibody of $3.7 million which approximates its ratable 40% ownership of the cash maintained by NANTibody expected to be used for future research and development. NANTibody recorded net loss of $0.7 million , $1.1 million and $0.6 million for the twelve months ended September 30, 2018, 2017 and 2016, respectively. The Company recorded its portion of loss from NANTibody in (loss) income on equity investments on its consolidated statements of operations for the twelve months ended December 31, 2018 and 2017. As of September 30, 2018, NANTibody had $9.7 million in current assets, $0.8 million in current liabilities, and no noncurrent assets or noncurrent liabilities. As of September 30, 2017, NANTibody had $9.9 million in current assets and $0.6 million in current liabilities and no noncurrent assets or noncurrent liabilities. NantStem In July 2015, the Company and NantBioScience, a subsidiary of NantWorks, established a new entity called NantCancerStemCell, LLC (“NantStem”) as a stand-alone biotechnology company with $100.0 million initial joint funding. As initially organized, NantBioScience was obligated to make a $60.0 million cash contribution to NantStem for a 60% equity interest in NantStem, and the Company was obligated to make a $40.0 million cash contribution to NantStem for a 40% equity interest in NantStem. Fifty percent of these contributions were funded in July 2015 and the remaining amounts were to be made by no later than September 30, 2015. The Company had NantPharma contribute its portion of the initial joint funding of $20.0 million to NantStem from the proceeds of the sale of IgDraSol. Pursuant to a Side Letter dated October 13, 2015, the NantStem joint venture agreement was amended to relieve the Company of the obligation to contribute the second $20.0 million payment, and its ownership interest in NantStem was reduced to 20% . NantBioScience’s funding obligations were unchanged. The Side Letter was negotiated at the same time the Company issued a call option on shares of NantKwest that it owned to Cambridge, a related party to NantBioScience. A loss related to other-than-temporary impairment of $0.5 million was recognized for the equity investment in NantStem for the year ended December 31, 2018. There was no loss related to other-than-temporary impairment recognized for the equity investment for the years ended December 31, 2017 or 2016. The Company is accounting for its interest in NantStem as an equity method investment, due to the significant influence the Company has over the operations of NantStem through its board representation and 20% voting interest. The Company’s investment in NantStem is reported in equity method investments on its consolidated balance sheets and its share of NantStem’s loss is recorded in loss on equity investments on its consolidated statement of operations. As of December 31, 2018 and 2017, the carrying value of the Company’s investment in NantStem was approximately $18.0 million and $18.7 million , respectively. The financial statements of NantStem are not received sufficiently timely for the Company to record its portion of earnings or loss in the current financial statements and therefore the Company reports its portion of earnings or loss on a quarter lag. NantStem recorded a net loss of $0.7 million for the twelve months ended September 30, 2018 and net income of $0.7 million and $0.9 million for the years ended 2017 and 2016, respectively. The Company recorded its portion of gain from NantStem in gain on equity investments on its consolidated statements of operations for the twelve months ended December 31, 2018 and 2017. As of September 30, 2018, NantStem had $74.1 million in current assets and $0.1 million in current liabilities and $6.9 million noncurrent assets and no noncurrent liabilities. As of September 30, 2017, NantStem had $82.5 million in current assets and no current liabilities and no noncurrent assets or noncurrent liabilities. Yuhan Agreement In March 2016, the Company and Yuhan Corporation, a South Korea company (“Yuhan”), entered into an agreement to form a joint venture company called ImmuneOncia Therapeutics, LLC (“ImmuneOncia”) to develop and commercialize a number of immune checkpoint antibodies against undisclosed targets for both hematological malignancies and solid tumors. Under the terms of the joint venture agreement, Yuhan contributed an initial investment of $10.0 million to ImmuneOncia, and the Company granted ImmuneOncia an exclusive license to one of its immune checkpoint antibodies for specified countries while retaining the rights for the U.S., European and Japanese markets, as well as global rights for ImmuneOncia to two additional antibodies that will be selected by ImmuneOncia from a group of pre-specified antibodies from the Company’s immuno-oncology antibody portfolio. Yuhan owns 51% of ImmuneOncia, while the Company owns 49% . The Company is accounting for its interest in ImmuneOncia as an equity method investment, due to the significant influence the Company has over the operations of ImmuneOncia through its board representation and 49% voting interest while not sharing joint control with Yuhan. The Company’s investment in ImmuneOncia is reported in equity method investments on its consolidated balance sheets and its share of ImmuneOncia’s loss is recorded in loss on equity investments on its consolidated statement of operations. As of December 31, 2018 and 2017, the carrying value of the Company’s investment in ImmuneOncia was approximately $2.7 million and $6.8 million , respectively. The difference between the Company’s investment in ImmuneOncia and the Company’s 49% interest in the net assets of ImmuneOncia was approximately $0.8 million at December 31, 2018. ImmuneOncia recorded net loss of $8.4 million for the twelve months ended December 31, 2018. The Company recorded its portion ( 49% equity interest) of loss from ImmuneOncia in loss on equity investments on its consolidated statement of operations for the twelve months ended December 31, 2018. As of December 31, 2018, ImmuneOncia had $0.8 million in current assets, $1.1 million in current liabilities, $7.5 million in noncurrent assets, and $87 thousand in noncurrent liabilities. As of December 31, 2018, no material activity had occurred subsequent to the Company's initial investment. ImmuneOncia recorded net loss of $5.4 million for the twelve months ended December 31, 2017. The Company recorded its portion ( 49% equity interest) of loss from ImmuneOncia in loss on equity investments on its consolidated statement of operations for the twelve months ended December 31, 2017. As of December 31, 2017, ImmuneOncia had $7.4 million in current assets, $129 thousand in current liabilities, $8.8 million in noncurrent assets, and $33 thousand noncurrent liabilities. In April 2016, Yuhan purchased $10.0 million of shares of Common Stock, and warrants as part of the Company’s private placement offering. As of December 31, 2016, no material activity had occurred subsequent to the Company's initial investment. Shanghai Three On March 7, 2016, TNK agreed to issue to SiniWest Holdings, Inc. (“SiniWest Holdings”) $4.0 million in shares of TNK Class A Stock, subject to certain circumstances, to be issued upon a financing resulting in gross proceeds (individually or in the aggregate) to TNK of at least $10.0 million and a $1.0 million upfront cash payment in exchange for SiniWest Holdings transferring certain assets to TNK, including SiniWest Holdings’ 25% interest in Shanghai Three-Alliance Biotech Co. LTD, a China based company (“Shanghai Three”). The Company is accounting for its interest in Shanghai Three as an equity method investment, due to the significant influence the Company has over the operations of Shanghai Three through its 25% voting interest. The Company’s investment in Shanghai Three is reported in equity method investments on the consolidated balance sheets and its share of Shanghai Three’s income or loss is recorded in income (loss) on equity investments on the consolidated statement of operations. As of each of the years ended December 31, 2018 and 2017, the carrying value of the Company’s investment in Shanghai Three was approximately $3.8 million . The financial statements of Shanghai Three are not received sufficiently timely for the Company to record its portion of earnings or loss in the current financial statements and therefore the Company reports its portion of earnings or loss on a quarter lag. Shanghai Three incurred no operating expenses for the twelve months ended September 30, 2018 and 2017. As of September 30, 2018, Shanghai Three had approximately $0.3 million in current assets, $5.1 million in noncurrent assets, $2.6 million in current liabilities, and $2.0 million in noncurrent liabilities. As of December 31, 2017, Shanghai Three had approximately $0.4 million in current assets, $5.3 million in noncurrent assets, $2.8 million in current liabilities, and $2.0 million in noncurrent liabilities. Fair Value of Equity Method Investment The Company periodically evaluates the carrying value of the Company's equity method investments, when events and circumstances indicate that the carrying amount of an asset may not be recovered. The Company determines the fair value of its equity method investments to evaluate whether impairment losses shall be recorded using Level 3 inputs. These investments include the Company's holdings in privately held biotechnology companies that are not exchange traded and therefore not supported with observable market prices. However, these investments are valued by reference to their net asset values that can be market supported and unobservable inputs including future cash flows if available. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets The Company had goodwill of $38.3 million for each of years ended December 31, 2018 and 2017. The Company performed a qualitative test for goodwill impairment as of December 31, 2018. Based upon the results of the qualitative testing the Company concluded that it is more-likely-than-not that the fair values of the Company’s goodwill was in excess of its carrying value and therefore performing the first step of the two-step impairment test was unnecessary. No goodwill impairment was recognized for the years ended December 31, 2018, 2017 and 2016. The Company’s intangible assets, excluding goodwill, include acquired license and patent rights, core technologies, customer relationships and acquired in-process research and development. Amortization for the intangible assets that have finite useful lives is generally recorded on a straight-line basis over their useful lives. A summary of the Company’s identifiable intangible assets as of December 31, 2018 and 2017 is as follows (in thousands): December 31, 2018 Gross Carrying Amount Accumulated Amortization Intangibles, net Customer relationships $ 1,585 $ 1,373 $ 212 Acquired technology 3,410 885 2,525 Acquired in-process research and development 35,834 366 35,468 Patent rights 32,720 4,742 27,978 Assembled workforce 105 5 100 Total intangible assets $ 73,654 $ 7,371 $ 66,283 December 31, 2017 Gross Carrying Amount Accumulated Amortization Intangibles, net Customer relationships $ 1,585 $ 1,091 $ 494 Acquired technology 3,410 709 2,701 Acquired in-process research and development 37,660 — 37,660 Patent rights 32,720 2,562 30,158 Total intangible assets $ 75,375 $ 4,362 $ 71,013 As of December 31, 2018, the remaining weighted average life for identifiable intangible assets is 15 years . Patent rights are stated at cost and amortized on a straight-line basis over the estimated useful lives of the assets, determined to be approximately fifteen years or nineteen years from the date of transfer of the rights to the Company. Amortization expense for the years ended December 31, 2018, 2017 and 2016 was $2.2 million , $2.1 million and $0.4 million . Acquired technology is stated at cost and amortized on a straight-line basis over the estimated useful lives of the assets, determined to be approximately nineteen years from the date of acquisition of the technology in December 2013. Amortization expense for the each of the years ended December 31, 2018, 2017 and 2016 was $0.2 million . Customer relationships are stated at cost and amortized on a straight-line basis over the estimated useful lives of the assets and are generally determined to be approximately five years from the date of acquisition. Amortization expense for each of the years ended December 31, 2018, 2017 and 2016 was $0.3 million . Acquired in-process research and development is stated at cost and may be immediately expensed if there is no alternative future use. The Company commenced amortization of acquired in-process research and development related to the business combination of Scilex upon commercialization of ZTlido® (lidocaine topical system 1.8%) in October 2018. Amortization expense for the year ended December 31, 2018 was $0.4 million and is being amortized on a straight-line basis over the estimated useful life of approximately fifteen years . The Company intends to begin amortization of acquired in-process research and development costs associated with the Virttu business combination upon commercialization of products. The acquired in-process research and development is reviewed annually for impairment or more frequently as changes in circumstance or the occurrence of events suggest that the remaining value may not be recoverable. The Company recorded an impairment charge of $1.8 million associated with Virttu IPR&D for the quarter ended December 31, 2018. Estimated future amortization expense related to intangible assets at December 31, 2018 is as follows (in thousands): Years Ending December 31, Amount 2019 $ 3,866 2020 3,866 2021 4,920 2022 4,920 2023 4,915 Thereafter 43,796 Total $ 66,283 |
Significant Agreements and Cont
Significant Agreements and Contracts | 12 Months Ended |
Dec. 31, 2018 | |
Significant Agreements And Contracts [Abstract] | |
Significant Agreements and Contracts | Significant Agreements and Contracts License Agreement with Mabtech Limited In August 2015, the Company entered into an exclusive licensing agreement to develop and commercialize multiple prespecified biosimilar and biobetter antibodies from Mabtech Limited. Under the terms of the agreement, the Company will develop and market four mAbs for the North American, European and Japanese markets. The Company made an initial license payment of $10.0 million and in February 2016, paid an additional $10.0 million license payment, both of which were recognized as acquired in-process research and development expense in the consolidated statements of operations as the Company determined there was no alternative future use for the license. In June 2016, the Company agreed to accelerate and pay a $30.0 million milestone license payment which has been recognized as acquired in-process research and development expense in the consolidated statements of operations, in exchange for the purchase by Mabtech Limited in June 2016, of $10.0 million of common stock and warrants. In December 2017, the Company agreed to accelerate and, as a result, paid a $25.0 million milestone license payment, which has been recognized as acquired in-process research and development expense in the consolidated statements of operations. The amended agreement includes additional milestone payments totaling $125.0 million payable following the completion of the technology transfer from Mabtech Limited and for payables to extend the license agreement. The Company is not obligated to extend the license agreement. Accordingly, the additional future milestone payments have not yet been accrued as of December 31, 2018. Immunotherapy Research Collaboration Agreement with Roger Williams Medical Center In April 2016, the Company entered into an immunotherapy research collaboration agreement with Roger Williams Medical Center to provide certain clinical trial, research and manufacturing services. Under the terms of the agreement, Roger Williams Medical Center will perform pre-clinical and clinical research related to the development and delivery of CAR-T immunotherapies. In exchange, the Company granted Roger Williams Medical Center $6.0 million in shares of TNK Class A Stock, subject to adjustment in certain circumstances, to be issued upon a financing resulting in gross proceeds (individually or in the aggregate) to TNK of at least $20.0 million . The Company determined the fair value of this obligation was $3.4 million as of the April 2016 agreement effective date, and the amount was recognized as prepaid expense and other and acquisition consideration payable in the consolidated balance sheet. The Company will recognize the upfront payment over the expected performance period of five years. During the twelve months ended December 31, 2018, 2017 and 2016 the Company recognized approximately $0.4 million , $0.7 million and $0.5 million in pre-clinical research and development expense pursuant to the agreement, respectively. License Agreement with NantCell In April 2015, the Company and NantCell entered into a license agreement. Under the terms of the agreement the Company granted an exclusive license to NantCell covering patent rights, know-how, and materials related to certain antibodies, ADCs and two CAR-TNK products. NantCell agreed to pay a royalty not to exceed five percent ( 5% ) to the Company on any net sales of products (as defined) from the assets licensed by the Company to NantCell. In addition to the future royalties payable under this agreement, NantCell paid an upfront payment of $10.0 million to the Company and issued 10 million shares of NantCell common stock to the Company valued at $100.0 million based on a recent equity sale of NantCell common stock to a third party. As of December 31, 2018, the Company had not yet provided all of the items noted in the agreement, including research services for and on behalf of NantCell, and therefore has recorded the entire upfront payment and value of the equity interest received as deferred revenue. Specifically, only a portion of the materials associated with the licensed assets have been delivered while the majority of the licensed assets remain undelivered and the related research activities are still to be performed. The Company will recognize the upfront payment and the value of the equity interest received over the period beginning with the commencement of the last item delivered. The Company’s ownership interest in NantCell does not provide the Company with control or the ability to exercise significant influence; therefore the $100.0 million investment is carried at cost in the consolidated balance sheets and evaluated for other-than-temporary impairment on a quarterly basis. NIH Grants In June 2014, the NIAID awarded the Company a Phase II Small Business Technology Transfer (“STTR”) grant (the “Staph Grant III Award”) to support the advanced preclinical development of human bispecific antibody therapeutics to prevent and treat Staphylococcus aureus (“ S. aureus ” or “Staph”) infections, including methicillin-resistant S. aureus (“MRSA”). The project period for the Staph Grant III Award covered a two -year period which commenced in June 2014, which was subsequently extended by one year, with total funds available of approximately $1.0 million per year for up to two years. The Staph Grant III Award was not extended beyond June 30, 2017 and the remaining amounts for the award have been recorded as of December 31, 2017. The Company recorded $0 and $0.2 million of revenue associated with the Staph Grant III Award during the twelve months ended December 31, 2018 and 2017, respectively. The Company recorded $0.4 million of revenue associated with other grants during the twelve months ended December 31, 2018. |
Loan and Security Agreement and
Loan and Security Agreement and Convertible Notes | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Loan and Security Agreement and Convertible Notes | Loan and Security Agreement and Convertible Notes Loan and Security Agreement with Hercules Capital, Inc. On November 23, 2016, the Company and certain of its domestic subsidiaries (together with the Company, the “Borrowers”) entered into a Loan and Security Agreement (the “Hercules Loan Agreement”) with Hercules Capital, Inc. (“Hercules”), as a lender and agent for several banks and other financial institutions or entities from time to time party to the Hercules Loan Agreement for a term loan of up to $75.0 million , subject to funding in multiple tranches (the “Term Loan”). The Term Loan would have matured on December 1, 2020. The proceeds of the Term Loan were used for general corporate purposes and coincided with the repayment of the outstanding debt financing arrangement with Oxford Finance LLC and Silicon Valley Bank. The first tranche of $50.0 million was funded upon execution of the Hercules Loan Agreement on November 23, 2016. Pursuant to the terms of the third amendment to the Hercules Loan Agreement entered into on March 15, 2017, the Company paid Hercules $1.5 million for a portion of the backend fee. Pursuant to the terms of the fourth amendment to the Hercules Loan Agreement entered into on March 23, 2017 (the “Fourth Amendment”), the Company repaid Hercules, without repayment penalty, $20.0 million of the outstanding principal and unpaid interest accrued thereon on March 23, 2017. The Fourth Amendment also provided for the following: (1) Hercules reduced the minimum amount of unrestricted cash that the Company must maintain under the Hercules Loan Agreement, and (2) the parties agreed to change the date by which the Company must achieve a fundraising milestone. Pursuant to the terms of the seventh amendment to the Hercules Loan Agreement entered into on November 6, 2017 (the “Seventh Amendment”), (i) the Company repaid Hercules, without repayment penalty, $10.0 million of the outstanding principal and unpaid interest accrued thereon on November 6, 2017, and (ii) Hercules agreed to reduce the minimum amount of unrestricted cash that the Company must maintain under the Hercules Loan Agreement from $20.0 million to $8.0 million . On December 21, 2017, the Company paid off all obligations owing under, and terminated, the Hercules Loan Agreement. The secured interests under the Hercules Loan Agreement were terminated in connection with the Company’s discharge of indebtedness thereunder. In connection with the Hercules Loan Agreement, the Company issued Hercules a warrant, dated November 23, 2016 (the “Hercules Warrant”), to purchase up to 460,123 shares of Common Stock, at an initial exercise price of $4.89 , subject to adjustment as provided in the Hercules Warrant. The Hercules Warrant is initially exercisable for 306,748 shares of common stock of the Company, and may automatically become exercisable for additional shares of common stock on such dates (if any) based upon the funding amounts of Tranche II or Tranche III of the Term Loan that may be extended to the Borrowers. The Hercules Warrant will terminate, if not earlier exercised, on the earlier of November 23, 2023 and the closing of certain merger or other transactions in which the consideration is cash, stock of a publicly-traded acquirer or a combination thereof. In connection with the extinguishment of the Hercules Loan Agreement on December 21, 2017, a loss of $4.3 million on the extinguishment of debt was recorded representing the difference between the reacquisition price of debt and the net carrying amount of the loan as of December 21, 2017. 2018 Chinese Yuan (“RMB”) Loan In March 2018, the Company entered into a term loan in the aggregate principal amount of $1.6 million ("RMB 10.0 million ") with the Bank of China and the Agricultural Bank of China, which is guaranteed by Levena Suzhou Biopharma, Co. Ltd. This one year bank facility was used for working capital purposes. The proceeds from the loan agreement are reflected as financing activities in the consolidated statements of cash flows for the twelve months ended December 31, 2018. The outstanding balance is repayable from February 2018 to March 2019. The interest rate on this loan is 5% . 2016 Private Investment in Public Entity Financing On April 3, 2016, the Company entered into a Securities Purchase Agreement (the “ABG Purchase Agreement”) with ABG SRNE Limited and Ally Bridge LB Healthcare Master Fund Limited (collectively, “Ally Bridge”), pursuant to which, among other things, the Company agreed to issue and sell to Ally Bridge and other purchasers that may be designated by Ally Bridge (collectively, the “ABG Purchasers”), in a private placement transaction (the “ABG Private Placement”), up to $50.0 million in shares of the Common Stock and warrants to purchase shares of Common Stock. Upon the closing of the ABG Private Placement, the Company issued to the ABG Purchasers (1) an aggregate of 9,009,005 shares (the “ABG Shares”) of Common Stock, and (2) warrants to purchase an aggregate of 2,702,700 shares of Common Stock (each, an “ABG Warrant”). Each ABG Warrant had an exercise price of $8.50 per share, was immediately exercisable upon issuance, had a term of three years and was exercisable on a cash or cashless exercise basis. Under the terms of the ABG Purchase Agreement, the Company was obligated to prepare and file with the SEC, within 30 days of the closing date of the ABG Private Placement, a registration statement to register for resale the ABG Shares and the shares of Common Stock issuable upon exercise of each ABG Warrant (the “ABG Warrant Shares”), and may be required to effect certain registrations to register for resale the ABG Shares and the ABG Warrant Shares in connection with certain “piggy-back” registration rights granted to the ABG Purchasers. On April 3, 2016, the Company also entered into a Securities Purchase Agreement (collectively, the “Additional Purchase Agreements”) with each of Beijing Shijilongxin Investment Co., Ltd. ( “Beijing Shijilongxin”), FREJOY Investment Management Co., Ltd. (“Frejoy”) and Yuhan Corporation (“Yuhan”), pursuant to which, among other things, the Company agreed to issue and sell, in separate private placement transactions: (1) to Beijing Shijilongxin, 8,108,108 shares of Common Stock, and a warrant to purchase 1,176,471 shares of Common Stock, for an aggregate purchase price of $45.0 million ; (2) to Frejoy, 8,108,108 shares of Common Stock, and a warrant to purchase 1,176,471 shares of Common Stock, for an aggregate purchase price of $45.0 million ; and (3) to Yuhan, 1,801,802 shares of Common Stock, and a warrant to purchase 235,294 shares of Common Stock, for an aggregate purchase price of $10.0 million . The warrants to be issued pursuant to each of the Additional Purchase Agreements (collectively, the “Additional Warrants” and, together with each ABG Warrant, the “Warrants”) had an exercise price of $8.50 per share, were immediately exercisable upon issuance, had a term of three years and were exercisable on a cash or cashless exercise basis. Under the terms of the Additional Purchase Agreements, each of Beijing Shijilongxin, Frejoy and Yuhan had the right to demand, at any time beginning six months after the closing of the transactions contemplated by the applicable Additional Purchase Agreement, that the Company prepare and file with the SEC a registration statement to register for resale such investor’s shares of Common Stock purchased pursuant to the applicable Additional Purchase Agreement and the shares of Common Stock issuable upon exercise of such investor’s Additional Warrant. In addition, the Company may be required to effect certain registrations to register for resale such shares in connection with certain “piggy-back” registration rights granted to Beijing Shijilongxin, Frejoy and Yuhan. On May 2, 2016, the Company closed its private placement of common stock and warrants with Yuhan for gross proceeds of $10.0 million . Yuhan purchased 1,801,802 shares of common stock at $5.55 per share and a warrant to purchase 235,294 shares of common stock. The warrant was exercisable for three years at an exercise price of $8.50 per share. Between May 31, 2016 and June 7, 2016, the Company closed on the remainder of the $150.0 million financing with the ABG Purchasers, Beijing Shijilongxin, and Frejoy. The ABG Purchasers led the financing and, together with Beijing Shijilongxin and Frejoy, collectively purchased 25,225,221 shares of common stock at $5.55 per share, and warrants to purchase 5,055,642 shares of common stock for total cash consideration of $86.5 million and secured promissory notes (the “2016 Notes”) in an aggregate principal amount of $53.5 million . On December 31, 2016, the Company entered into Warrant and Note Cancellation and Share Forfeiture Agreements (the “Cancellation and Forfeiture Agreements”) with certain investors (the “Investors”) that held an aggregate of 7,838,259 shares of Common Stock and certain of the Warrants granting the right to purchase an aggregate of 1,137,316 shares of Common Stock. Pursuant to the Cancellation and Forfeiture Agreements, effective December 31, 2016, the Warrants held by the Investors and the 2016 Notes, of which $43.5 million was then outstanding, were cancelled and the shares of Common Stock held by the Investors were forfeited and returned to the Company. 2017 Securities Purchase Agreement in Private Placement On December 11, 2017, the Company entered into a Securities Purchase Agreement (the “December 2017 Securities Purchase Agreement”) with certain accredited investors (collectively, the “December 2017 Purchasers”). Pursuant to the December 2017 Securities Purchase Agreement, on December 21, 2017, the Company issued and sold to the December 2017 Purchasers, in a private placement transaction, (1) convertible promissory notes in an aggregate principal amount of $50,000,000 (the “December 2017 Notes”), which will accrue simple interest at a rate equal to 5.0% per annum and mature upon the earlier to occur of (a) December 21, 2022, and (b) the date of the closing of a change in control (the “December 2017 Maturity Date”), and (2) warrants (the “December 2017 Warrants”) to purchase an aggregate of 12,121,210 shares of its common stock. At any time and from time to time before the December 2017 Warrant Maturity Date, each December 2017 Purchaser had the option to convert any portion of the outstanding principal amount of such December 2017 Purchaser’s December 2017 Note that was equal to or greater than the lesser of: (1) $4,000,000 , and (2) the then-outstanding principal amount of such December 2017 Purchaser's December 2017 Note into shares of common stock at a price per share of $2.26875 , subject to adjustment for stock splits, reverse stock splits, stock dividends and similar transactions. Accrued but unpaid interest on the December 2017 Notes was to be paid in cash semi-annually in arrears on or prior to the 30th day of June and 31st day of December of each calendar year commencing with the year ending December 31, 2018. Each December 2017 Warrant has an exercise price of $2.61 per share, subject to adjustment for stock splits, reverse stock splits, stock dividends and similar transactions, became exercisable on June 20, 2018, has a term of five and a half years and is exercisable on a cash basis, unless there is not an effective registration statement covering the resale of the shares issuable upon exercise of the December 2017 Warrants, in which case the December 2017 Warrants shall also be exercisable on a cashless exercise basis. The fair value of the Notes was estimated using a valuation model with Level 2 inputs including the stock price volatility, risk-free interest rate, and debt yield. As of December 31, 2017, the estimated fair value of the Notes was approximately $89.5 million , compared to the carrying value of $5.2 million . On May 17, 2018, the December 2017 Purchasers converted in full the outstanding principal and accrued interest under the December 2017 Notes into 22,038,565 shares of the Company’s common stock, and the Company paid to the December 2017 Purchasers cash in an aggregate amount of $1.0 million in accrued but unpaid interest. The unamortized discount remaining at the date of conversion of $44.3 million was recognized immediately at that date as interest expense. See Note 3 for discussion of the Company’s policies for accounting for debt with detachable warrants. In connection with the issuance of the December 2017 Notes and December 2017 Warrants, the Company recorded a debt discount of approximately $44.8 million based on an allocation of proceeds to the December 2017 Warrants of approximately $12.7 million and a beneficial conversion feature of approximately $32.1 million , before issuance costs. Borrowings under the December 2017 Notes consisted of the following (in thousands): Principal amount $ 50,000 Debt discount - warrant (12,669 ) Debt discount - beneficial conversion feature (32,062 ) Capitalized debt issuance costs (84 ) Accretion of debt issuance costs and other — Accretion of debt discount 26 Balance at December 31, 2017 $ 5,211 2018 Securities Purchase Agreement in Private Placement and Amendment to Warrants On March 26, 2018, the Company entered into a Securities Purchase Agreement (the “March 2018 Securities Purchase Agreement”) with certain accredited investors (the “March 2018 Purchasers”). Pursuant the March 2018 Securities Purchase Agreement, the Company agreed to issue and sell to the March 2018 Purchasers, in a Private Placement (the “March 2018 Private Placement”), (1) convertible promissory notes in an aggregate principal amount of $120,500,000 (the “Notes”), and (2) warrants to purchase 8,591,794 shares of the common stock of the Company (the “Warrants”). On June 13, 2018, the Company entered into an amendment (the “June 2018 Amendment”) to the March 2018 Securities Purchase Agreement. Under the terms of the June 2018 Amendment, the Company and the March 2018 Purchasers agreed that the aggregate principal amount of the Notes was reduced to $37,848,750 and that the aggregate number of shares of Common Stock issuable upon exercise of the Warrants was reduced to 2,698,662 , and also agreed to certain other adjustments to the threshold principal amount of the Notes required to remain outstanding in order for certain rights and obligations to apply to the Notes. On June 13, 2018, pursuant to the March 2018 Securities Purchase Agreement, as amended by the June 2018 Amendment, the Company issued and sold to the March 2018 Purchasers, in the March 2018 Private Placement (1) Notes in an aggregate principal amount of $37,848,750 , and (2) Warrants to purchase an aggregate of 2,698,662 shares of Common Stock. The Notes accrue interest at a rate equal to 5.0% per annum and mature upon the earlier to occur of June 13, 2023 and the date of the closing of a change of control (the “Maturity Date”). At any time and from time to time before the Maturity Date, each March 2018 Purchaser shall have the option to convert any portion of the outstanding principal amount of such March 2018 Purchaser’s Note that is equal to or greater than the lesser of: (1) $4,000,000 , and (2) the then-outstanding principal amount of such March 2018 Purchaser’s Note into shares of common stock at a price per share of $7.0125 , subject to adjustment for stock splits, reverse stock splits, stock dividends and similar transactions. Accrued but unpaid interest on the Notes shall be paid in cash semi-annually in arrears on or prior to the 30th day of June and 31st day of December of each calendar year commencing with December 31, 2018. Each Warrant has an exercise price of $3.28 per share, subject to adjustment for stock splits, reverse stock splits, stock dividends and similar transactions, became exercisable on December 11, 2018, has a term of five and a half years from the date of issuance and will be exercisable on a cash basis, unless there is not an effective registration statement covering the resale of the shares issuable upon exercise of the Warrants, in which case the Warrants shall also be exercisable on a cashless exercise basis. See Note 3 for discussion of the Company’s policies for accounting for debt with detachable warrants. In connection with the issuance of the Notes and the Warrants, the Company recorded a debt discount of approximately $21.6 million based on an allocation of proceeds to the Warrants of approximately $9.6 million and a beneficial conversion feature of approximately $12.0 million , before issuance costs. The Company accounts for the debt at amortized cost and amortizes the debt discount to interest expense using the effective interest method over the expected term of the Notes. The fair value of the Notes was estimated using a lattice model with Level 3 inputs including the historical stock price volatility, risk-free interest rate, and debt yield. On November 7, 2018, the Company entered into an Agreement and Consent (the “Agreement and Consent”) with the March 2018 Purchasers. Pursuant to the Agreement and Consent, in consideration for certain of the March 2018 Purchasers, in their capacity as holders of the Notes, providing a waiver and consent on behalf of all holders of the Notes, pursuant to which the March 2018 Purchasers provided the Company with certain waivers of their rights and certain of the Company’s covenants under the Securities Purchase Agreement, as amended by Amendment No. 1 thereto, with respect to the Loan Agreement (as defined below) and the transactions contemplated thereby, the Company and the March 2018 Purchasers agreed to amend the Warrants to reduce the exercise price per share of its common stock thereunder from $8.77 to $3.28 . The amendment of the Warrants resulted in a loss on debt extinguishment of $1.9 million representing the incremental fair value of the modified Warrants along with the difference between the fair value and carrying value of the Notes at the modification date of November 7, 2018. The Company determined that the amendment of the Warrants resulted in an extinguishment at the modification date. As a result, the Company recorded a loss on debt extinguishment for the difference between the fair value of $23.1 million and the carrying value of $17.0 million , or $6.1 million . The Company recorded the loss as of the date of modification, or November 7, 2018. As of December 31, 2018, the estimated fair value of the Notes was approximately $15.8 million , compared to the carrying value of $23.6 million . Borrowings under the Notes consisted of the following (in thousands): Face value of loan $ 37,849 Unamortized debt discount (14,804 ) Accretion of debt discount 515 Balance at December 31, 2018 $ 23,560 Interest expense recognized on the Notes for the year ended December 31, 2018 totaled $1.0 million for the stated interest. Debt discount and debt issuance costs, which are presented as a direct reduction of the Notes in the consolidated balance sheets, are amortized as interest expense using the effective interest method. The amount of debt discount and debt issuance costs included in interest expense for the year ended December 31, 2018 was approximately $0.5 million . 2018 Purchase Agreements and Indenture for Scilex On September 7, 2018, Scilex entered into Purchase Agreements (the "2018 Purchase Agreements") with certain investors (collectively, the "Scilex Note Purchasers") and the Company. Pursuant to the 2018 Purchase Agreements, on September 7, 2018, Scilex, among other things, issued and sold to the Scilex Note Purchasers senior secured notes due 2026 in an aggregate principal amount of $224,000,000 (the "Scilex Notes") for an aggregate purchase price of $140,000,000 (the "Offering"). In connection with the Offering, Scilex also entered into the Indenture governing the Scilex Notes with the Trustee and Collateral Agent, and the Company. Pursuant to the Indenture, the Company agreed to the Guarantee. The net proceeds of the Offering were approximately $89.3 million , after deducting the Offering expenses payable by Scilex and funding the Reserve Account and the Collateral Account pursuant to the terms of the Indenture. The net proceeds of the Offering will be used by Scilex to support the commercialization of ZTlido® (lidocaine topical system 1.8%), for working capital and general corporate purposes in respect of the commercialization of ZTlido® (lidocaine topical system 1.8%). Funds in the Reserve Account will be released to Scilex upon receipt by the Trustee of an officer’s certificate under the Indenture from Scilex confirming receipt of the Marketing Approval Letter on or prior to July 1, 2023. Funds in the Collateral Account will be released upon receipt of a written consent authorizing such release from the holders of a majority in principal amount of the Scilex Notes issued, upon the occurrence and during the continuance of an event of default at the direction of the holders of a majority in principal amount of the Scilex Notes issued or upon the repayment in full of all amounts owed under the Scilex Notes. The holders of the Scilex Notes will be entitled to receive quarterly payments of principal of the Scilex Notes equal to a percentage, in the range of 10% to 20% of the net sales of ZTlido® (lidocaine topical system 1.8%) for the prior fiscal quarter, beginning on February 15, 2019. If Scilex has not received the Marketing Approval Letter by March 31, 2021, the percentage of net sales payable shall be increased to be in the range of 15% to 25% . If actual cumulative net sales of ZTlido® (lidocaine topical system 1.8%) from October 1, 2022 through September 30, 2023 are less than 60% of a predetermined target sales threshold for such period, then Scilex will be obligated to pay an additional installment of principal of the Scilex Notes each quarter in an amount equal to an amount to be determined by reference to the amount of such deficiency. The aggregate principal amount due under the Scilex Notes shall be increased by $28,000,000 on February 15, 2022 if actual cumulative net sales of ZTlido® (lidocaine topical system 1.8%) from the issue date of the Scilex Notes through December 31, 2021 do not equal or exceed 95% of a predetermined target sales threshold for such period. If actual cumulative net sales of ZTlido® (lidocaine topical system 1.8%) for the period from October 1, 2022 through September 30, 2023 do not equal or exceed 80% of a predetermined target sales threshold for such period, the aggregate principal amount shall also be increased on November 15, 2023 by an amount equal to an amount to be determined by reference to the amount of such deficiency. The final maturity date of the Scilex Notes will be August 15, 2026. The Scilex Notes may be redeemed in whole at any time upon 30 days’ written notice at Scilex’s option prior to August 15, 2026 at a redemption price equal to 100% of the then-outstanding principal amount of the Scilex Notes. In addition, upon a change of control of Scilex (as defined in the Indenture), each holder of a Scilex Note shall have the right to require Scilex to repurchase all or any part of such holder’s Scilex Note at a repurchase price in cash equal to 101% of the then-outstanding principal amount thereof. The 2018 Purchase Agreements include the terms and conditions of the offer and sale of the Scilex Notes, representations and warranties of the parties, indemnification and contribution obligations and other terms and conditions customary in agreements of this type. The Indenture governing the Scilex Notes contains customary events of default with respect to the Scilex Notes (including a failure to make any payment of principal on the Scilex Notes when due and payable), and, upon certain events of default occurring and continuing, the Trustee by notice to Scilex, or the holders of at least 25% in principal amount of the outstanding Scilex Notes by notice to Scilex and the Trustee, may (subject to the provisions of the Indenture) declare 100% of the then-outstanding principal amount of the Scilex Notes to be due and payable. Upon such a declaration of acceleration, such principal will be due and payable immediately. In the case of certain events, including bankruptcy, insolvency or reorganization involving the Company or Scilex, the Scilex Notes will automatically become due and payable. Pursuant to the Indenture, the Company and Scilex must also comply with certain covenants with respect to the commercialization of ZTlido® (lidocaine topical system 1.8%), as well as customary additional affirmative covenants, such as furnishing financial statements to the holders of the Scilex Notes, minimum cash requirements and net sales reports; and negative covenants, including limitations on the following: the incurrence of debt; the payment of dividends, the repurchase of shares and under certain conditions making certain other restricted payments; the prepayment, redemption or repurchase of subordinated debt; a merger, amalgamation or consolidation involving Scilex; engaging in certain transactions with affiliates; and the making of investments other than those permitted by the Indenture. The Scilex Notes and related Guarantee have not been, and will not be, registered under the Securities Act of 1933, as amended, or the securities laws of any other jurisdiction and may not be offered or sold in the United States without registration or an applicable exemption from registration requirements. The holders of the Scilex Notes do not have any registration rights. Pursuant to a Collateral Agreement by and among Scilex, the Trustee and the Collateral Agent (the “Collateral Agreement”), the Scilex Notes will be secured by ZTlido® (lidocaine topical system 1.8%) and all of the existing and future property and assets of Scilex necessary for, or otherwise relevant to, now or in the future, the manufacture and sale of ZTlido® (lidocaine topical system 1.8%), on a worldwide basis (exclusive of Japan), including, but not limited to, the intellectual property related to ZTlido® (lidocaine topical system 1.8%), the marketing or similar regulatory approvals related to ZTlido® (lidocaine topical system 1.8%), any licenses, agreements and other contracts related to ZTlido® (lidocaine topical system 1.8%), and the current assets related to ZTlido® (lidocaine topical system 1.8%) such as inventory, accounts receivable and cash and any and all future iterations, improvements or modifications of such product made, developed or licensed (or sub-licensed) by Scilex or any of its affiliates or licensees (or sub-licensees) (including ZTlido® (lidocaine topical system 5.4%)). Pursuant to the terms of the Indenture, the Company issued an irrevocable standby letter of credit to Scilex (the “Letter of Credit”), which provides that, in the event that (1) Scilex does not hold at least $35,000,000 in unrestricted cash as of the end of any calendar month during the term of the Scilex Notes, (2) actual cumulative net sales of ZTlido® (lidocaine topical system 1.8%) from the issue date of the Scilex Notes through December 31, 2021 are less than a specified sales threshold for such period, or (3) actual cumulative net sales of ZTlido® (lidocaine topical system 1.8%) for any calendar year during the term of the Scilex Notes, beginning with the 2022 calendar year, are less than a specified sales threshold for such calendar year, Scilex, as beneficiary of the Letter of Credit, will draw, and the Company will pay to Scilex, $35,000,000 in a single lump-sum amount as a subordinated loan. The Letter of Credit will terminate upon the earliest to occur of: (a) the repayment of the Scilex Notes in full, (b) the actual net sales of ZTlido® (lidocaine topical system 1.8%) for any calendar year during the term of the Scilex Notes exceeding a certain threshold, (c) the consummation of an initial public offering on a major international stock exchange by Scilex that satisfies certain valuation thresholds, and (d) the replacement of the Letter of Credit with another letter of credit in form and substance, including as to the identity and creditworthiness of issuer, reasonably acceptable to the holders of at least 80% in principal amount of outstanding Scilex Notes. The Company performed a level 3 based assessment for certain of these contingent features related to the Letter of Credit, which, included significant judgment and assumptions related to the likelihood of the aforementioned terms being achieved. Based on its assessment, it was concluded that the estimated fair value of these embedded features were not material as of December 31, 2018. As of December 31, 2018 , the estimated fair value of the Notes was approximately $122.8 million compared to the carrying value of $141.1 million . The Company uses the discounted cash flow method under the income approach, which involves significant level 3 inputs and assumptions, combined with a Monte Carlo simulation, as appropriate. The value of the debt instrument is based on the present value of future interest and principal payments, discounted a rate of return reflective the Company's credit risk. Borrowings of the Notes consisted of the following (in thousands): Face value of loan $ 224,000 Unamortized debt discount (84,000 ) Capitalized debt issuance costs (5,748 ) Accretion of debt discount 6,376 Accretion of debt issuance cost 435 Balance at December 31, 2018 $ 141,063 Future minimum payments under the Notes, based on a percentage of projected net sales of ZTlido® (lidocaine topical system 1.8%) are as follows (in thousands): Year Ending December 31, 2019 $ 8,696 2020 30,010 2021 52,474 2022 99,153 2023 33,667 Total future minimum payments 224,000 Unamortized debt discount (77,624 ) Unamortized capitalized debt issuance costs (5,313 ) Total minimum payment 141,063 Current portion (8,696 ) Long-term portion of Scilex Notes $ 132,367 Debt discount and debt issuance costs, which are presented as a direct reduction of the Scilex Notes in the consolidated balance sheets, are amortized as interest expense using the effective interest method. As principal repayments on the Scilex Notes are based on a percentage of net sales of ZTlido® (lidocaine topical system 1.8% and lidocaine topical system 5.4%, if a Marketing Approval Letter is received), the Company has elected to account for changes in estimated cash flows from future net sales prospectively. Specifically, a new effective interest rate will be determined based on revised estimates of remaining cash flows and changes in expected cash flows will be recognized prospectively. The amount of debt discount and debt issuance costs included in interest expense for the fiscal year ended December 31, 2018 was approximately $6.8 million . The Company identified a number of embedded derivatives that require bifurcation from the Scilex Notes and separate accounting as a single compound derivative. However, as the current fair value attributed to the bifurcated compound derivative is immaterial, The Company has not recorded this derivative within its consolidated financial statements. The Company re-evaluates this assessment each reporting period. 2018 Oaktree Term Loan Agreement On November 7, 2018, the Company and certain of its domestic subsidiaries (the “Guarantors”) entered into a Term Loan Agreement (the “Loan Agreement”) with certain funds and accounts managed by Oaktree Capital Management, L.P. (collectively, the “Lenders”) and Oaktree Fund Administration, LLC, as administrative and collateral agent, for an initial term loan of $100.0 million (the “Initial Loan”) and a second tranche of $50.0 million , subject to the achievement of certain commercial and financial milestones between August 7, 2019 and November 7, 2019, and the satisfaction of certain customary conditions (the “Conditional Loan”). The Initial Loan matures on November 7, 2023 (the “Maturity Date”) and bears interest at a rate equal to the London Interbank Offered Rate ("LIBOR") plus the applicable margin, or 7% . The Initial Loan was funded on November 7, 2018. The net proceeds of the Initial Loan were approximately $91.3 million , after deducting estimated loan costs, commissions, fees and expenses, and will be used for general corporate purposes. In connection with the Loan Agreement, on November 7, 2018, the Company issued to the Lenders warrants to purchase 6,288,985 shares of the Company’s common stock (the “Initial Warrants”). The Initial Warrants have an exercise price per share of $3.28 , subject to adjustment for stock splits, reverse stock splits, stock dividends and similar transactions, will be exercisable from May 7, |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stockholders' Equity | Stockholders’ Equity 2009 Non-Employee Director Grants In September 2009, prior to the adoption of the 2009 Stock Incentive Plan (the “2009 Plan”), the Company’s board of directors approved the reservation and issuance of 8,000 nonstatutory stock options to the Company’s non-employee directors. The outstanding options vested on the one year anniversary of the vesting commencement date in October 2010, and are exercisable for up to 10 years from the grant date. No further shares may be granted under this plan and, as of December 31, 2018, 3,200 options with a weighted-average exercise price of $1.12 were outstanding. 2009 Stock Incentive Plan In October 2009, the Company’s stockholders approved the 2009 Stock Incentive Plan. In August 2018, the Company’s stockholders approved, among other items, the amendment and restatement of the 2009 Stock Incentive Plan (as amended and restated, the “Stock Plan”) to increase the number of shares of the Company’s common stock authorized to be issued pursuant to the Stock Plan to 18,860,000 . Such shares of the Company’s common stock are reserved for issuance to employees, non-employee directors and consultants of the Company. The Stock Plan provides for the grant of incentive stock options, non-incentive stock options, stock appreciation rights, restricted stock awards, unrestricted stock awards, restricted stock unit awards and performance awards to eligible recipients. Recipients of stock options shall be eligible to purchase shares of the Company’s common stock at an exercise price equal to no less than the estimated fair market value of such stock on the date of grant. The maximum term of options granted under the Stock Plan is ten years. Employee option grants generally vest 25% on the first anniversary of the original vesting commencement date, with the balance vesting monthly over the remaining three years. The vesting schedules for grants to non-employee directors and consultants will be determined by the Company’s Compensation Committee. Stock options are generally not exercisable prior to the applicable vesting date, unless otherwise accelerated under the terms of the applicable stock plan agreement. The following table summarizes stock option activity as of December 31, 2018, 2017 and 2016, and the changes for the years then ended (in thousands, except for share amounts): Options Outstanding Weighted- Average Exercise Price Aggregate Intrinsic Value Outstanding at December 31, 2017 6,343,400 $ 4.74 $ 6,290 Options Granted 4,737,800 $ 5.23 Options Canceled (500,435 ) $ 5.84 Options Exercised (57,690 ) $ 3.69 Outstanding at December 31, 2018 10,523,075 $ 4.91 $ 1,723 The aggregate intrinsic value of options exercised during the years ended December 31, 2018, 2017 and 2016 were $133 thousand , $0 thousand and $194 thousand , respectively. The Company uses the Black-Scholes valuation model to calculate the fair value of stock options. The fair value of employee stock options was estimated at the grant date using the following assumptions: Years Ended December 31, 2018 2017 2016 Weighted-average grant date fair value $ 3.65 $ 1.28 $ 5.86 Dividend yield — — — Volatility 81 % 81 % 75 % Risk-free interest rate 2.87 % 1.92 % 1.49 % Expected life of options 6.1 years 6.1 years 6.1 years The assumed dividend yield was based on the Company’s expectation of not paying dividends in the foreseeable future. Due to the Company’s limited historical data, the estimated volatility incorporates the historical and implied volatility of comparable companies whose share prices are publicly available. The risk-free interest rate assumption was based on the U.S. Treasury’s rates for U.S. Treasury zero-coupon bonds with maturities similar to those of the expected term of the award being valued. The weighted average expected life of options was estimated using the average of the contractual term and the weighted average vesting term of the options. The total employee and director stock-based compensation recorded as operating expenses was $5,139 thousand , $4,423 thousand and $4,354 thousand for the years ended December 31, 2018, 2017 and 2016, respectively. The total unrecognized compensation cost related to unvested employee and director stock option grants as of December 31, 2018 was $16,857 thousand and the weighted average period over which these grants are expected to vest is 3.0 years . The Company records equity instruments issued to non-employees as expense at their fair value over the related service period as determined in accordance with the authoritative guidance and periodically revalues the equity instruments as they vest. Stock-based compensation expense related to non-employee consultants recorded as operating expenses was $1,055 thousand , $228 thousand , and $198 thousand for the years ended December 31, 2018, 2017 and 2016, respectively. Common Stock Reserved for Future Issuance Common stock reserved for future issuance consists of the following at December 31, 2018: Common stock warrants outstanding under the loan and security agreement 6,354,877 Common stock warrants outstanding under the Hercules securities agreement 306,748 Common stock warrants outstanding under the convertible notes 14,819,872 Common stock warrants outstanding under private placements 4,153,620 Common stock options outstanding under the Non-Employee Director Plan 3,200 Authorized for future grant or issuance under the 2009 Stock Incentive Plan 18,324,406 Shares issuable upon the conversion of the 2018 Notes 5,397,325 Issuable under assignment agreement based upon achievement of certain milestones 80,000 49,440,048 2017 Stock Option Plan In June 2017, the Company’s subsidiary, Scilex, adopted the Scilex 2017 Stock Option Plan, reserved 4.0 million shares of Scilex common stock and awarded 1.0 million options to certain Company personnel, directors and consultants under such plan. Stock options granted under this plan typically vest 1/4th of the shares on the first anniversary of the vesting commencement date and 1/48th of the remaining options vest each month thereafter. As of December 31, 2018, 1.6 million shares were canceled. As of December 31, 2018, 0.7 million options were outstanding. 2015 Stock Option Plans In May 2015, the Company’s subsidiary, TNK, adopted the TNK 2015 Stock Option Plan and reserved 10.0 million shares of TNK class A common stock and awarded 3.6 million options to certain Company personnel, directors and consultants under such plan. In November 2015, TNK awarded 0.5 million options to certain Company personnel. Stock options granted under this plan typically vest a portion immediately upon grant and the remaining options over two to four years or monthly over four years from the grant date and have a contractual term of ten years. As of December 31, 2018, 2.1 million shares were canceled. As of December 31, 2018, 0.9 million options were outstanding. In May 2015, TNK granted a warrant to the Company’s CEO to purchase 9.5 million shares of TNK class B common stock which have 10 to 1 voting rights. Warrant shares totaling 4.0 million are exercisable evenly over forty months and the remaining warrant shares are exercisable if certain defined events occur within four years from date of issuance at an initial exercise price of $0.01 per share. This warrant was canceled in its entirety effective August 29, 2017. In May 2015, the Company’s subsidiary, LA Cell, adopted the LA Cell 2015 Stock Option Plan and reserved 10.0 million shares of LA Cell class A common stock and awarded 2.9 million options to certain Company personnel, directors and consultants under such plan. Stock options granted under this plan typically vest a portion immediately upon grant and the remaining options over two to four years or monthly over four years from the grant date and have a contractual term of ten years. As of December 31, 2018, 1.7 million shares were canceled. As of December 31, 2018, 0.3 million options were outstanding. In May 2015, LA Cell granted a warrant to the Company’s CEO to purchase 9.5 million shares of LA Cell class B common stock which have 10 to 1 voting rights. Warrant shares totaling 4.0 million are exercisable evenly over forty months and the remaining warrant shares are exercisable if certain defined events occur within four years from date of issuance at an initial exercise price of $0.01 per share. This warrant was canceled in its entirety effective August 29, 2017. In October 2015, the Company’s subsidiary, Concortis Biosystems, Corp., (“CBC”), adopted the CBC 2015 Stock Option Plan and reserved 10.0 million shares of CBC class A common stock and awarded 1.8 million options to certain Company personnel, directors and consultants under such plan. Stock options granted under this plan typically vest a portion immediately upon grant and the remaining options over two to four years or monthly over four years from the grant date and have a contractual term of ten years. As of December 31, 2018, 1.7 million shares were canceled. As of December 31, 2018, no options were outstanding. In October 2015, CBC granted a warrant to the Company’s CEO to purchase 9.5 million shares of CBC class B common stock which have 10 to 1 voting rights. Warrant shares totaling 4.0 million are exercisable evenly over forty months and the remaining warrant shares are exercisable if certain defined events occur within four years from date of issuance at an initial exercise price of $0.25 per share. This warrant was canceled in its entirety effective August 29, 2017. In October 2015, the Company’s subsidiary, Scintilla, adopted the Scintilla 2015 Stock Option Plan and reserved 10.0 million shares of Scintilla class A common stock and awarded 2.1 million options to certain Company personnel, directors and consultants under such plan. Stock options granted under this plan typically vest a portion immediately upon grant and the remaining options over two to four years or monthly over four years from the grant date and have a contractual term of ten years. As of December 31, 2018, 0.9 million shares were canceled. As of December 31, 2018, no options were outstanding. In October 2015, Scintilla granted a warrant to the Company’s CEO to purchase 9.5 million shares of Scintilla class B common stock which have 10 to 1 voting rights. Warrant shares totaling 4.0 million are exercisable evenly over forty months and the remaining warrant shares are exercisable if certain defined events occur within four years from date of issuance at an initial exercise price of $0.01 per share. This warrant was canceled in its entirety effective August 29, 2017. In October 2015, the Company’s subsidiary, Sorrento Biologics, Inc. (“Biologics”), adopted the Biologics 2015 Stock Option Plan and reserved 10.0 million shares of Biologics class A common stock and awarded 2.6 million options to certain Company personnel, directors and consultants under such plan. Stock options granted under this plan typically vest a portion immediately upon grant and the remaining options over two to four years or monthly over four years from the grant date and have a contractual term of ten years. As of December 31, 2018, 1.4 million shares were canceled. As of December 31, 2018, no options were outstanding. In October 2015, Biologics granted a warrant to the Company’s CEO to purchase 9.5 million shares of Biologics class B common stock which have 10 to 1 voting rights. Warrant shares totaling 4.0 million are exercisable evenly over forty months and the remaining warrant shares are exercisable if certain defined events occur within four years from date of issuance at an initial exercise price of $0.01 per share. This warrant was canceled in its entirety effective August 29, 2017. On August 29, 2017, the options and warrants were canceled in accordance with the terms of a settlement agreement and, as a result, unrecognized compensation expense of $281 thousand associated with these previously issued shares was accelerated and recognized upon cancellation. The total director stock-based compensation recorded as operating expenses by the Company for TNK, LA Cell, CBC, Scintilla and Biologics for the year ended December 31, 2017 and 2016 was $0 and $166 thousand , respectively. Total unrecognized stock-based compensation expense related to unvested director stock option and warrant grants for these entities as of December 31, 2017 was $0 , and the weighted-average period over which these grants are expected to vest is approximately 3.5 years. The Company records equity instruments issued to non-employees as expense at their fair value over the related service period as determined in accordance with the authoritative guidance and periodically revalues the equity instruments as they vest. Stock based compensation expense related to non-employee consultants recorded as operating expenses by the Company for TNK, LA Cell, CBC, Scintilla and Biologics for the year ended December 31, 2018 and 2017 was $655 thousand and $156 thousand , respectively. The weighted-average assumptions used in the Black-Scholes option and warrant pricing model used by TNK, LA Cell, CBC, Scintilla and Biologics to determine the fair value of stock option grants for directors and non-employee consultants were as follows: expected dividend yield – 0% , risk-free interest rate – 1.39% to 2.24% , expected volatility – 76% to 77% , and expected term of 4.0 to 6.1 years. 2014 Stock Option Plan In May 2014, the Company’s subsidiary, Ark Animal Health, Inc. (“Ark”), adopted the Ark 2014 Stock Option Plan and reserved and awarded 600,000 options to certain directors and consultants under such plan. Stock options granted under such plan typically vest a portion immediately upon grant and the remaining options over one year from the grant date and have a contractual term of ten years. Effective August 29, 2017, options to purchase an aggregate of 135,000 shares were canceled. As of December 31, 2018, 88,000 options were outstanding. There were no operating expenses recorded for total director and consultant stock-based compensation by the Company for Ark for each of the years ended December 31, 2018 and 2017. No unrecognized stock-based compensation expense remains related to stock option grants as of December 31, 2018. |
Derivative Liability
Derivative Liability | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Liability | Derivative Liability On October 13, 2015, the Company wrote a call option to Cambridge, on up to 2.0 million shares of NantKwest common stock held by the Company (the “Option Agreement”). As of December 31, 2015, the Company held approximately 5.6 million shares of common stock of NantKwest, par value $0.0001 per share, which was classified as available-for-sale and reported in its consolidated financial statements as marketable securities. The Option Agreement gave Cambridge the right to purchase up to 2.0 million shares at a price of $15.295 per share from time to time in the first quarter of 2016. There was no contractual option premium associated with this Option Agreement. The Option Agreement was a derivative as defined in ASC Topic 815 and was recognized at fair value every reporting period the Option Agreement is in effect, with changes in fair value recognized in current operations. For the year ended December 31, 2015, the Company recorded a loss of $3.4 million on the derivative liability. The call option expired unexercised on March 31, 2016 and the Company recorded a gain of $5.5 million upon the cancellation of the derivative liability. As of December 31, 2018, no derivative liability was recorded on the Company’s consolidated balance sheets. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation In the normal course of business, the Company may be named as a defendant in one or more lawsuits. The Company is not a party to any outstanding material litigation and management is currently not aware of any legal proceedings that, individually or in the aggregate, are deemed to be material to the Company’s financial condition or results of operations. Immunomedics Litigation On June 26, 2015, Immunomedics, Inc. (“Immunomedics”) filed a complaint in the United States District Court for the District of New Jersey (the “New Jersey Case”) against the Board of Directors of RWMC, Dr. Richard P. Junghans, Dr. Steven C. Katz, the Office of the Board of Advisors of Tufts University School of Medicine, and one or more individuals or entities to be identified later. This complaint (the "Initial Complaint") alleged, among other things: (1) breach of contract; (2) breach of covenant of good faith and fair dealing; (3) tortious interference with prospective economic gain; (4) tortious interference with contracts; (5) misappropriation; (6) conversion; (7) bailment; (8) negligence; (9) vicarious liability; and (10) patent infringement. Overall, the allegations in the Initial Complaint were generally directed to an alleged material transfer agreement dated December 2008 and Immunomedics’ alleged request for the return of certain alleged research material, as well as the alleged improper use and conversion of such research materials outside the scope of the material transfer agreement. On October 22, 2015, Immunomedics filed an amended complaint (the “First Amended Complaint”), which, among other things, no longer named the Board of Directors of RWMC and The Office of the Board of Advisors of Tufts University School of Medicine as defendants. RWMC and Tufts Medical Center were added as new defendants. On January 14, 2016, Immunomedics filed a second amended complaint (the "Second Amended Complaint"), which, among other things, no longer named Tufts Medical Center as a defendant. In addition, the Second Amended Complaint contained allegations directed to two additional alleged material transfer agreements dated September 1993 and May 2010, respectively, and also added an allegation of unjust enrichment. The Second Amended Complaint also no longer asserted claims for (1) breach of covenant of good faith and fair dealing; (2) misappropriation; (3) bailment; (4) negligence; and (5) vicarious liability. On October 12, 2016, Immunomedics filed a third amended complaint (the “Third Amended Complaint”), which added the Company, TNK, BDL and CARgenix as defendants. TNK is a subsidiary of the Company and purchased BDL and CARgenix in August 2015. The Third Amended Complaint included, among other things, allegations against the Company, TNK, BDL and CARgenix regarding (1) conversion; (2) tortious interference; and (3) unjust enrichment. On December 2, 2016, the Company, TNK, BDL, and CARgenix filed a motion to dismiss Immunomedics’ complaint against them for lack of personal jurisdiction. On January 25, 2017, the District of New Jersey granted this motion, and the Company, TNK, BDL and CARgenix were dismissed as defendants from the New Jersey Case. Under various agreements, TNK has certain indemnification obligations to RWMC, Dr. Richard P. Junghans and Dr. Steven C. Katz that may be implicated by the New Jersey Case. On April 27, 2018, Immunomedics filed a Complaint against the Company and TNK in San Diego Superior Court, Case No. 37-2018-00021006-CU-NP-CTL (the “San Diego Case”). The Complaint includes, among other things, allegations against the Company and TNK regarding (1) conversion; (2) tortious interference; and (3) inducing breach of contract. On October 25, 2018, the parties to the New Jersey Case and the San Diego Case entered into a Mutual General Release and Settlement Agreement resolving both matters. Pursuant to the terms of the settlement, among other things, both the New Jersey Case and San Diego Case were dismissed with prejudice upon payment by Sorrento to Immunomedics of $2.35 million , which payment was timely made as called for by the agreement. Cantor Fitzgerald & Co. Litigation On May 25, 2018, Cantor Fitzgerald & Co. (“CF&Co.”) filed a Complaint against the Company in the Supreme Court of the State of New York, County of New York, Index No. 652633/2018. The Complaint included, among other things, allegations against the Company for breach of contract arising out of a letter agreement whereby CF&Co. was to supply certain services to the Company in exchange for a fee (the “CF & Co. Litigation”). The Company filed an Answer and Counterclaim for breach of contract against CF&Co claiming that CF&Co. did not perform under the letter agreement. Following a mediation held on December 19, 2018, the parties entered into a settlement agreement resolving the matter. Pursuant to the terms of the agreement, the litigation was dismissed with prejudice upon payment by Sorrento to CF&Co. of $1 million , which payment was timely made as called for by the agreement. Operating Leases The Company currently has leases in San Diego, California of approximately 130,584 square feet of corporate office and laboratory space, approximately 1,405 square feet of laboratory and office space at a second location as well as approximately 36,400 square feet for offices and cGMP fill and finish and storage space. In November 2018, the Company entered into a new lease in San Diego, California for approximately 61,200 square feet of additional corporate office and laboratory space. Operations for the new lease are expected to begin in the first quarter of 2019 and the lease expires in October 2029. In December 2018, the Company entered into a new lease in Broomfield, Colorado, for approximately 4,500 square feet of additional office space, which is expected to commence in the second quarter of 2019 and expires in 2024. The Company’s lease agreements in San Diego, as amended, for its corporate office and laboratory space expire in October 2029 . Its second laboratory and office space and its cGMP fill and finish and storage space expire in September 2020 and November 2022, respectively. The Company also leases 25,381 square feet of office and laboratory space in Suzhou, China, which lease expires in June 30, 2021 . The Company leases 2,312 square feet of office, laboratory, and storage space in Scotland, which lease expires in March 2021. The Company subleases in New York, New York for approximately 4,550 square feet of additional corporate office space. The sublease began in July of 2017 and expires in December 2020. The Company leases approximately 3,432 square feet of office and laboratory space in Atlanta, Georgia which began in October of 2018 and expires in September 2024. Minimum future non-cancelable annual operating lease obligations are as follows for the years ending December 31 (in thousands): 2019 $ 6,396 2020 8,733 2021 8,011 2022 7,959 2023 8,186 Thereafter 52,425 $ 91,710 Rent expense for operating leases totaled approximately $6.1 million , $3.2 million and $2.1 million , for the years ended December 31, 2018 , December 31, 2017 and December 31, 2016 , respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The components of the provision expense (benefit) were as follows for the years ended December 31, 2018, 2017 and 2016 (in thousands): 2018 2017 2016 Current: Federal $ (178 ) $ (366 ) $ (1,785 ) State 23 14 (600 ) Foreign (44 ) 30 — (199 ) (322 ) (2,385 ) Deferred: Federal (3,499 ) (33,178 ) 3,554 State (2,421 ) (2,538 ) (2,065 ) Foreign (155 ) — — (6,075 ) (35,716 ) 1,489 Totals $ (6,274 ) $ (36,038 ) $ (896 ) Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The components of the Company’s net deferred tax liabilities and related valuation allowance are as follows as of December 31, 2018 and 2017 (in thousands): 2018 2017 Deferred tax assets: Amortization of intangibles $ 27,075 $ 21,862 Deferred revenue 25,448 34,754 Tax credit carryforwards 13,720 10,160 Net operating loss carryforwards 43,542 21,172 Stock based compensation 1,786 1,743 Accrued expenses and other 14,037 1,877 Total deferred tax assets 125,608 91,568 Less valuation allowance (74,970 ) (43,405 ) Total deferred tax assets 50,638 48,163 Deferred tax liabilities: Amortization of intangibles (12,739 ) (15,225 ) Depreciation (543 ) (757 ) Investment in common stock (46,772 ) (47,716 ) Total deferred tax liabilities (60,054 ) (63,698 ) Net deferred tax assets / liabilities $ (9,416 ) $ (15,535 ) The reconciliation between U.S. federal income taxes at the statutory rate and the Company’s provision for income taxes are as follows for the years ended December 31 (in thousands): 2018 2017 Income tax expense (benefit) at federal statutory rate $ (46,011 ) $ (8,725 ) State, net of federal tax benefit (3,075 ) (834 ) Other permanent differences 2,814 1,290 Debt discount 11,357 — Incentive stock compensation 1,001 1,025 Transaction costs 102 408 Other 123 715 Return to provision adjustment (8 ) (42 ) Acquired in-process research and development 677 71 Change in Federal rate — 10,006 Change in State rate (453 ) 810 Research tax credits (4,664 ) (4,051 ) Uncertain tax positions 879 1,027 Prior year true-ups and carrybacks (889 ) (1,095 ) Stock compensation true-up 308 1,788 Change in valuation allowance 31,565 (38,431 ) Income tax provision $ (6,274 ) $ (36,038 ) The Company has evaluated the available evidence supporting the realization of its gross deferred tax assets, including the amount and timing of future taxable income, and has determined that it is more likely than not that the deferred tax assets will not be realized. Due to such uncertainties surrounding the realization of the domestic deferred tax assets, the Company maintains a valuation allowance of $75.0 million against its deferred tax assets as of December 31, 2018. Realization of the deferred tax assets will be primarily dependent upon the Company's ability to generate sufficient taxable income prior to the expiration of its net operating losses. As of December 31, 2018, the Company had net operating loss carryforwards of approximately $169.7 million and $77.1 million for federal and state income tax purposes, respectively. These may be used to offset future taxable income and will begin to expire in varying amounts in 2029 to 2038 , except for a portion of the federal net operating loss that have an indefinite carryforward period. The Company also has research and development and orphan drug credits of approximately $12.2 million and $6.1 million for federal and state income taxes purposes, respectively. The federal credits may be used to offset future tax and will begin to expire in varying amounts in 2029 to 2038 . The state credits may be used to offset future tax, such credits carryforward indefinitely. Internal Revenue Code Section 382 rules apply to limit a corporation's ability to utilize existing net operating loss and tax credit carryforwards once the corporation experiences an ownership change as defined in Section 382. The Company has undergone an ownership change in a prior year. For the year ended December 31, 2018, there was no impact of such limitations on the income tax provision. Due to the existence of the valuation allowance, it is not expected that any possible limitation will have an impact on the results of operations or financial position of the Company. The Company is subject to taxation in the U.S., various state tax jurisdictions and various foreign tax jurisdictions. The Company's tax years starting in December 31, 2007 through December 31, 2018 are open and subject to examination by the U.S. and state taxing authorities due to the carryforward of utilized net operating losses and research and development credits. During 2018 the Company was notified by the Franchise Tax Board that its California income tax return for the 2015 and 2016 calendar year was selected for examination. The Company has responded to information requested. The Company adopted the provisions of ASC Topic 740 regarding uncertain tax positions on January 1, 2009. Under ASC Topic 740, the impact of an uncertain income tax position taken on a tax return must be recognized at the largest amount that is cumulatively “more likely than not” to be sustained upon audit by relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. A reconciliation of the beginning and ending amount of unrecognized tax expense (benefits) is as follows (in thousands): Amount Unrecognized tax benefits balance at December 31, 2017 $ 3,883 Increase related to current year tax positions 916 Increase related to prior year tax positions 150 Decrease related to prior year tax positions (597 ) Unrecognized tax benefits balance at December 31, 2018 $ 4,352 The Company’s policy is to recognize interest and penalties related to income tax matters in income tax expense. No interest has been recognized as of and for the period ended December 31, 2018. The Company believes that no material amount of the liabilities for uncertain tax positions will expire within 12 months of December 31, 2018. U.S. Tax Reform On December 22, 2017, the U.S. government enacted comprehensive tax legislation referred to as the Tax Cuts and Jobs Act (the “Tax Act’’), which significantly revises the Internal Revenue Code of 1986, as amended. The Tax Act contains, among other things, significant changes to corporate taxation, including reduction of the corporate tax rate from a top marginal rate of 35% to a flat rate of 21% for tax years beginning after December 31, 2017, limitations on the deduction for net operating losses to 80% of current year taxable income, indefinite carryover period for net operating losses and limitations on the deductibility of interest to 30% of adjusted taxable income. On December 22, 2017, the SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”), which allowed the Company to record provisional amounts during a measurement period not to extend beyond one year of the enactment date. As of December 22, 2018, the Company’s accounting for the Tax Act was complete and there were no material changes to the provisional amounts previously recorded. |
Related Party Agreements and Ot
Related Party Agreements and Other | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Agreements and Other | Related Party Agreements and Other During the year ended December 31, 2015, the Company entered into a joint venture called Immunotherapy NANTibody, LLC, with NantCell, a subsidiary of NantWorks. In July 2015, the Company contributed its portion of the initial joint funding of $40.0 million to the NANTibody joint venture. The Company and NantCell have also entered into a license agreement pursuant to which the Company received a $10.0 million upfront license payment and $100.0 million of vested NantCell common stock. During the year ended December 31, 2015, the Company entered into a joint venture called NantCancerStemCell, LLC, with NantBioScience, a wholly-owned subsidiary of NantWorks. In connection with negotiated changes to the structure of NantStem the Company issued a call option on shares of NantKwest that it owned to Cambridge, a related party to the Company and to NantBioScience. In April 2015, the Company purchased 1.0 million shares of NantBioScience common stock for $10.0 million . In March 2016, the Company and Yuhan entered into an agreement to form a joint venture company called ImmuneOncia Therapeutics, LLC, to develop and commercialize a number of immune checkpoint antibodies against undisclosed targets for both hematological malignancies and solid tumors. As of December 31, 2018, the carrying value of the Company’s investment in ImmuneOncia Therapeutics, LLC was approximately $2.7 million . During the three months ended June 30, 2016, Yuhan purchased $10.0 million of Common Stock and warrants. On August 15, 2017, the transactions contemplated by that certain Contribution Agreement, dated June 12, 2017, by and among the Company, TNK and Celularity Inc. (“Celularity”), pursuant to which, among other things, the Company and TNK agreed to contribute certain intellectual property rights related to their proprietary chimeric antigen receptor constructs and related CARs to Celularity in exchange for shares of Celularity’s Series A Preferred Stock equal to 25% of Celularity’s outstanding shares of capital stock, calculated on a fully-diluted basis closed. Dr. Henry Ji, the Company's Chairman of the Board, President and Chief Executive Officer, Jaisim Shah, a member of the Company’s Board of Directors and David Deming, a member of the Company’s Board of Directors, were previously appointed as members of the board of directors of Celularity. On November 8, 2016, the Company entered into the Scilex Purchase Agreement, pursuant to which the Company acquired from the Scilex Stockholders approximately 72% of the outstanding capital stock of Scilex. Dr. Henry Ji, the Company’s President and Chief Executive Officer and a member of the Company’s Board of Directors, and George K. Ng, the Company’s Vice President, Chief Administrative Officer and Chief Legal Officer, were stockholders of Scilex prior to the acquisition transaction. The remainder of the outstanding capital stock of Scilex represents a noncontrolling interest of which approximately 19.3% continues to be held by ITOCHU CHEMICAL FRONTIER Corporation following the Scilex acquisition. Scilex has entered into a product development agreement with ITOCHU CHEMICAL FRONTIER Corporation which serves as the sole manufacturer and supplier to Scilex for the ZTlido® product. |
401(k) Plan
401(k) Plan | 12 Months Ended |
Dec. 31, 2018 | |
Retirement Benefits [Abstract] | |
401(k) Plan | 401(k) Plan The Company maintains a defined contribution 401(k) plan available to eligible employees. Employee contributions are voluntary and are determined on an individual basis, limited to the maximum amount allowable under federal tax regulations. The Company made matching contributions to the 401(k) plan totaling $898 thousand , $658 thousand and $424 thousand , for the years ended December 31, 2018, 2017 and 2016, respectively. |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data (Unaudited) | Quarterly Financial Data (Unaudited) The following table sets forth selected quarterly data for the years presented, in thousands, except per share data. Quarter Ended Quarter Ended Quarter Ended Quarter Ended Year Ended 2018 December 31, September 30, June 30, March 31, December 31, Revenues $ 6,929 $ 4,105 $ 3,913 $ 6,246 $ 21,193 Operating costs and expenses $ 48,530 $ 52,012 $ 32,284 $ 38,792 $ 171,618 Net loss attributable to Sorrento $ (49,774 ) $ (47,328 ) $ (73,864 ) $ (32,574 ) $ (203,540 ) Net loss per share - basic $ (0.41 ) $ (0.40 ) $ (0.73 ) $ (0.38 ) $ (1.92 ) Net loss per share - diluted $ (0.41 ) $ (0.40 ) $ (0.73 ) $ (0.38 ) $ (1.92 ) Weighted-average shares - basic 121,552 117,021 100,563 84,941 106,150 Weighted-average shares - diluted 121,552 117,021 100,563 84,941 106,150 Quarter Ended Quarter Ended Quarter Ended Quarter Ended Year Ended 2017 December 31, (1) September 30, June 30, March 31, December 31, Revenues $ 20,407 $ 121,910 1 $ 4,665 $ 4,874 $ 151,856 Operating costs and expenses $ 55,205 $ 24,993 $ 18,123 $ 28,200 $ 126,521 Net income (loss) attributable to Sorrento $ 48,444 $ (2,061 ) $ (14,187 ) $ (23,064 ) $ 9,132 Net income (loss) per share - basic $ 0.60 $ (0.03 ) $ (0.20 ) $ (0.45 ) $ 0.13 Net income (loss) per share - diluted $ 0.58 $ (0.03 ) $ (0.20 ) $ (0.45 ) $ 0.13 Weighted-average shares - basic 80,486 76,887 70,302 50,886 69,742 Weighted-average shares - diluted 82,996 76,888 70,302 50,886 70,381 (1) Quarter-over-quarter increase primarily due to revenue recognized from the intangibles transferred to Celularity as a result of closing the Contribution Agreement in 2017. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share For the years ended December 31, 2018, 2017, and 2016, basic earnings per share of common stock is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share of common stock is calculated to give effect to all dilutive securities, using the treasury stock method. The following table sets forth the reconciliation of basic and diluted earnings per share for the years ended December 31, 2018, 2017 and 2016 (in thousands, except per share): Years Ended December 31, 2018 2017 2016 Net Income (Loss) $ (203,540 ) $ 9,132 $ (60,923 ) Net Income Adjusted for Tax-Effected Interest on Convertible Notes — (71 ) — Adjusted Net Income (203,540 ) 9,061 (60,923 ) Denominator for Basic Earnings Per Share 106,150 69,742 50,360 Effect of Dilutive Securities: Stock Options — 8 — Convertible Notes — 604 — Convertible Notes - Warrants — 27 — Denominator for Diluted Earnings per Share – Adjusted for Dilutive Securities 106,150 70,381 50,360 Dilutive Earnings Per Share $ (1.92 ) $ 0.13 $ (1.21 ) The potentially dilutive stock options that would have been excluded because the effect would have been antidilutive for years ended December 31, 2018, 2017, and 2016 were 10.5 million , 6.3 million , and 4.3 million , respectively. The potentially dilutive warrants that would have been excluded because the effect would have been antidilutive for years ended December 31, 2018, 2017, and 2016 were 25.6 million , 4.7 million , and 7.7 million , respectively. Basic and diluted per share amounts are computed independently in the consolidated statements of income. Therefore, the sum of per share components may not equal the per share amounts presented. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Scilex Non-binding Term Sheet for ZTlido® in Europe Scilex Pharmaceuticals Inc. (“Scilex”), a subsidiary of Sorrento Therapeutics, Inc., recently executed a non-binding term sheet for the rights to ZTlido® (lidocaine medicated plaster 1.8%) in certain European countries with a major European pharmaceutical company. After discussions with such potential partner, Scilex also intends to withdraw its Marketing Authorization Application (“MAA”) for ZTlido® for the treatment of pain associated with post-herpetic neuralgia (PHN), and notified the Medicines and Healthcare Products Regulatory Agency in the United Kingdom (the application's Reference Member State) on January 23, 2019 of such intent. Scilex submitted its MAA in November 2017 through a hybrid regulatory pathway via the Decentralized Procedure. Scilex plans to resubmit the MAA in collaboration with such partner in the near future. |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2018 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
Schedule II - Valuation and Qualifying Accounts | SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS (in thousands) Balance at Beginning of Period Reserves Acquired Additions Deductions Balance at End of Period Fiscal Year 2018: Income tax valuation allowance 43,405 — 31,565 — 74,970 $ 43,405 $ — $ 31,565 $ — $ 74,970 Fiscal Year 2017: Income tax valuation allowance 81,039 797 — (38,431 ) 43,405 $ 81,039 $ 797 $ — $ (38,431 ) $ 43,405 Fiscal Year 2016: Income tax valuation allowance 39,605 — 41,434 — 81,039 $ 39,605 $ — $ 41,434 $ — $ 81,039 |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Nature of Operations and Basis of Presentation | Nature of Operations and Basis of Presentation Sorrento Therapeutics, Inc. (Nasdaq: SRNE), together with its subsidiaries (collectively, the “Company”) is a clinical stage and commercial biopharma company focused on delivering innovative and clinically meaningful therapies to patients and their families, globally, to address unmet medical needs. The Company primarily focuses on therapeutics areas in Immune-Oncology and Non-Opioid Pain Management. The Company also has programs assessing the use of its technologies and products in auto-immune, inflammatory and neurodegenerative diseases. At its core, the Company is an antibody-centric company and leverages its proprietary G-MAB™ library and targeted delivery modalities to generate the next generation of cancer therapeutics. the Company’s fully human antibodies include PD-1, PD-L1, CD38, CD123, CD47, c-MET, VEGFR2, CCR2 and CD137 among others. The Company’s vision is to leverage these antibodies in conjunction with proprietary targeted delivery modalities to generate the next generation of cancer therapeutics. These modalities include proprietary chimeric antigen receptor T-cell therapy (“CAR-T”), dimeric antigen receptor T-cell therapy (“DAR-T”), antibody drug conjugates (“ADCs”) as well as bispecific antibody approaches. Additionally, the Company acquired Sofusa®, a revolutionary drug delivery system, in July 2018, which delivers biologics directly into the lymphatic system to potentially achieve improved efficacy and fewer adverse effects than standard parenteral immunotherapy. With each of the Company’s clinical and pre-clinical programs, it aims to tailor its therapies to treat specific stages in the evolution of cancer, from elimination, to equilibrium and escape. In addition, the Company’s objective is to focus on tumors that are resistant to current treatments and where it can design focused trials based on a genetic signature or biomarker to ensure patients have the best chance of a durable and significant response. The Company has several immuno-oncology programs that are in or near to entering the clinic. These include cellular therapies, an oncolytic virus and a palliative care program targeted to treat intractable cancer pain. Through December 31, 2018, the Company had devoted substantially all of its efforts to product development, raising capital and building infrastructure, and had not realized revenues from its planned principal operations. The accompanying consolidated financial statements include the accounts of the Company’s subsidiaries. For consolidated entities where the Company owns or is exposed to less than 100% of the economics, the Company records net income (loss) attributable to noncontrolling interests in its consolidated statements of operations equal to the percentage of the economic or ownership interest retained in such entities by the respective noncontrolling parties. All intercompany balances and transactions have been eliminated in consolidation. |
Liquidity and Going Concern | Liquidity and Going Concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company has recurring losses from operations, recurring negative cash flows from operations and substantial cumulative net losses to date and anticipates that it will continue to do so for the foreseeable future as it continues to identify and invest in advancing product candidates, as well as expanding corporate infrastructure. The Company has plans in place to obtain sufficient additional fundraising to fulfill its operating and capital requirements for the next 12 months. The Company’s plans include continuing to fund its operating losses and capital funding needs through public or private equity or debt financings, strategic collaborations, licensing arrangements, asset sales, government grants or other arrangements. Although management believes such plans, if executed, should provide the Company sufficient financing to meet its needs, successful completion of such plans is dependent on factors outside of the Company’s control. As such, management cannot conclude that such plans will be effectively implemented within one year after the date that the financial statements are issued. As a result, management has concluded that the aforementioned conditions, among others, raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date the financial statements are issued. As of December 31, 2018, the Company had $361.8 million of long term debt outstanding under the 2018 Securities Purchase Agreement in Private Placement and Amendment to Warrants, 2018 Purchase Agreements and Indenture for Scilex and 2018 Oaktree Term Loan Agreement (collectively, the “Debt Arrangements”) (See Note 12). Each of the Debt Arrangements provide that, upon the occurrence of an event of default, the Purchasers thereof may, by written notice to the Company, declare all of the outstanding principal and interest under such Note immediately due and payable. For purposes of the Debt Arrangements, an event of default includes, among other things, one or more events that have, or could reasonably be expected to have, a material adverse effect on (i) the business, assets, financial condition or operations of the Company, (ii) the Company’s ability to comply with its obligations under the agreements, or (iii) the legality, validity or enforceability of the agreements. The Company believes that it is not probable that the material adverse event clause under the Debt Arrangements will be exercised. If the Company is unable to raise additional capital in sufficient amounts or on terms acceptable, the Company may have to significantly delay, scale back or discontinue the development or commercialization of one or more of its product candidates. The Company may also seek collaborators for one or more of its current or future product candidates at an earlier stage than otherwise would be desirable or on terms that are less favorable than might otherwise be available. The consolidated financial statements do not reflect any adjustments that might be necessary if the Company is unable to continue as a going concern. Universal Shelf Registration In November 2014, the Company filed a universal shelf registration statement on Form S-3 (the “2014 Shelf Registration Statement”) with the SEC, which was declared effective by the SEC in December 2014. This 2014 Shelf Registration Statement provided the Company with the ability to offer up to $250 million of securities, including equity and other securities as described in the registration statement. Included in the 2014 shelf registration is a sales agreement prospectus covering the offering, issuance and sale by the Company of up to a maximum aggregate offering price of $50.0 million of the Company’s common stock that may be issued and sold under a sales agreement with MLV & Co. LLC (the “2014 ATM Facility”). During the twelve months ended December 31, 2017 and 2016, the Company sold approximately $13.9 million and $3.6 million in shares of common stock under the 2014 ATM Facility, respectively. In April 2017, the Company completed a public offering of $47.5 million of shares of common stock pursuant to the 2014 Shelf Registration Statement for net proceeds of approximately $43.1 million . In November 2017, the Company filed a universal shelf registration statement on Form S-3 (the “2017 Shelf Registration Statement”) with the SEC, which was declared effective by the SEC in December 2017. The 2014 Shelf Registration Statement expired on December 6, 2017 when the 2017 Shelf Registration was declared effective. This 2017 Shelf Registration Statement provides the Company with the ability to offer up to $350 million of securities, including equity and other securities as described in the registration statement. Included in the 2017 Shelf Registration Statement is a sales agreement prospectus covering the offering, issuance and sale by the Company of up to a maximum aggregate offering price of $100.0 million of the Company’s common stock that may be issued and sold under a sales agreement with B. Riley FBR, Inc. (the “ATM Facility”). During the twelve months ended December 31, 2018, the Company sold approximately $83.6 million in shares of common stock under the ATM Facility. The Company can offer up to $15.5 million of additional shares of common stock under the ATM Facility, subject to certain limitations. Pursuant to the 2017 Shelf Registration Statement, the Company may offer such securities from time to time and through one or more methods of distribution, subject to market conditions and the Company’s capital needs. Specific terms and prices will be determined at the time of each offering under a separate prospectus supplement, which will be filed with the SEC at the time of any offering. However, the Company cannot be sure that such additional funds will be available on reasonable terms, or at all. If the Company raises additional funds by issuing equity securities, substantial dilution to existing stockholders would result. If the Company raises additional funds by incurring debt financing, the terms of the debt may involve significant cash payment obligations as well as covenants and specific financial ratios that may restrict the Company’s ability to operate its business. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Management believes that these estimates are reasonable; however, actual results may differ from these estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. The Company minimizes its credit risk associated with cash and cash equivalents by periodically evaluating the credit quality of its primary financial institution. The balance at times may exceed federally insured limits. The Company has not experienced any losses on such accounts. |
Restricted Cash | Restricted Cash Restricted cash in the Company's consolidated balance sheet as of December 31, 2018, included approximately $45.0 million of restricted cash related to the Scilex Notes in the form of both the Reserve Account and the Collateral Account (See Note 12). Restricted cash in the Company's consolidated balance sheet as of December 31, 2018 also included approximately $9.6 million of restricted cash related to the Loan Agreement in the form of a Reserve Account |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company follows accounting guidance on fair value measurements for financial instruments measured on a recurring basis, as well as for certain assets and liabilities that are initially recorded at their estimated fair values. Fair value is defined as the exit price, or the amount that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company uses the following three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs to value its financial instruments: • Level 1: Observable inputs such as unadjusted quoted prices in active markets for identical instruments. • Level 2: Quoted prices for similar instruments that are directly or indirectly observable in the marketplace. • Level 3: Significant unobservable inputs which are supported by little or no market activity and that are financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation. Financial instruments measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires it to make judgments and consider factors specific to the asset or liability. The use of different assumptions and/or estimation methodologies may have a material effect on estimated fair values. Accordingly, the fair value estimates disclosed or initial amounts recorded may not be indicative of the amount that the Company or holders of the instruments could realize in a current market exchange. The carrying amounts of cash equivalents and marketable securities approximate their fair value based upon quoted market prices. Certain of the Company’s financial instruments are not measured at fair value on a recurring basis, but are recorded at amounts that approximate their fair value due to their liquid or short-term nature, such as cash, accounts receivable and payable, and other financial instruments in current assets or current liabilities. |
Marketable Securities | Marketable Securities Marketable securities are designated either as trading or available-for-sale securities and are accounted for at fair value. Marketable securities are classified as short-term or long-term based on the nature of the securities and their availability to meet current operating requirements. Marketable securities that are readily available for use in current operations and are classified as short-term available-for-sale securities are reported as a component of current assets in the accompanying consolidated balance sheets. Marketable securities that are not trading securities and are not considered available for use in current operations are classified as long-term available-for-sale securities and are reported as a component of long-term assets in the accompanying consolidated balance sheets. Securities that are classified as trading are carried at fair value, with changes to fair value reported as a component of income. Securities that are classified as available-for-sale are carried at fair value, with temporary unrealized gains and losses reported as a component of stockholders' equity until their disposition. The cost of securities sold is based on the specific identification method. All of the Company’s marketable securities are subject to a periodic impairment review. The Company recognizes an impairment charge when a decline in the fair value of its investments below the cost basis is judged to be other-than-temporary. For the year ended December 31, 2018, no other-than-temporary impairment charges were recorded for marketable securities. |
Grants and Accounts Receivable | Grants and Accounts Receivable Grants receivable at December 31, 2018 and 2017 represent amounts due under several federal contracts with the National Institute of Allergy and Infectious Diseases (“NIAID”), a division of the National Institutes of Health (“NIH”) (collectively, the “NIH Grants”). The Company considers the grants receivable to be fully collectible; accordingly, no allowance for doubtful amounts has been established. If amounts become uncollectible, they are charged to operations. Accounts receivable at December 31, 2018, 2017 and 2016 consists of trade receivables from sales and services provided to certain customers, which are generally unsecured and due within 30 days. Estimated credit losses related to trade accounts receivable are recorded as general and administrative expenses and as an allowance for doubtful accounts within grants and accounts receivable, net. The Company reviews reserves and makes adjustments based on historical experience and known collectability issues and disputes. When internal collection efforts on accounts have been exhausted, the accounts are written off by reducing the allowance for doubtful accounts. As of December 31, 2018, 2017 and 2016, the allowance for doubtful accounts was $20 thousand , $20 thousand and $26 thousand , respectively. |
Inventory | Inventory The Company determines inventory cost on a first-in, first-out basis. The Company reduces the carrying value of inventories to a lower of cost or market basis for those items that are potentially excess, obsolete or slow-moving. The Company reserves for excess and obsolete inventory based upon historical experience, sales trends, and specific categories of inventory and age of on-hand inventory. As of December 31, 2018, the Company's inventory is primarily comprised of finished goods and is recorded as a component of Prepaid expenses and other, net on the consolidated balance sheets. |
Property and Equipment | Property and Equipment Property and equipment are carried at cost less accumulated depreciation. Depreciation of property and equipment is computed using the straight-line method over the estimated useful lives of the assets, which are generally three to five years. Leasehold improvements are amortized over the lesser of the life of the lease or the life of the asset. Repairs and maintenance are charged to expense as incurred. |
Acquisitions and Intangibles | Acquisitions and Intangibles The Company has engaged in business combination activity. The accounting for business combinations requires management to make judgments and estimates of the fair value of assets acquired, including the identification and valuation of intangible assets, as well as liabilities assumed. Such judgments and estimates directly impact the amount of goodwill recognized in connection with each acquisition, as goodwill presents the excess of the purchase price of an acquired business over the fair value of its net tangible and identifiable intangible assets. |
Goodwill and Other Long-Lived Assets | Goodwill and Other Long-Lived Assets Goodwill, which has an indefinite useful life, represents the excess of cost over fair value of net assets acquired. Goodwill is reviewed for impairment at least annually during the fourth quarter, or more frequently if events occur indicating the potential for impairment. During its goodwill impairment review, the Company may assess qualitative factors to determine whether it is more likely than not that the fair value of its reporting unit is less than its carrying amount, including goodwill. The qualitative factors include, but are not limited to, macroeconomic conditions, industry and market considerations, and the overall financial performance of the Company. If, after assessing the totality of these qualitative factors, the Company determines that it is not more likely than not that the fair value of its reporting unit is less than its carrying amount, then no additional assessment is deemed necessary. Otherwise, the Company proceeds to perform the two-step test for goodwill impairment. The first step involves comparing the estimated fair value of the reporting unit with its carrying value, including goodwill. If the carrying amount of the reporting unit exceeds its fair value, the Company performs the second step of the goodwill impairment test to determine the amount of loss, which involves comparing the implied fair value of the goodwill to the carrying value of the goodwill. The Company may also elect to bypass the qualitative assessment in a period and elect to proceed to perform the first step of the goodwill impairment test. The Company performed its annual assessment for goodwill impairment in the fourth quarter of 2018, noting no impairment and that the fair value of the goodwill exceeded the carrying value by a significant margin. There have not been any triggering events indicating the potential for impairment through December 31, 2018. In determining the fair value utilized in the goodwill impairment assessment, the Company considers qualitative factors such as changes in strategy, cash flows and the regulatory environment as well as the market capitalization of the Company’s publicly traded common stock. The Company’s share price is highly volatile and although there was significant excess of fair value over book value at the annual impairment assessment date as well as December 31, 2018, there have been subsequent declines in the market share price and there could be risk of impairment in the future. It is not possible at this time to determine if an impairment charge would result from these factors, or, if it does, whether such charge would be material. The Company will continue to monitor the recoverability of its goodwill. The Company evaluates its long-lived and intangible assets with definite lives, such as property and equipment, acquired technology, customer relationships, patent and license rights, for impairment by considering competition by products prescribed for the same indication, the likelihood and estimated future entry of non-generic and generic competition with the same or similar indication and other related factors. The factors that drive the estimate of useful life are often uncertain and are reviewed on a periodic basis or when events occur that warrant review. Recoverability is measured by comparison of the assets’ book value to future net undiscounted cash flows that the assets are expected to generate. There have not been any impairment losses of long-lived assets through December 31, 2018. |
Acquisition Consideration Payable - Gain or Loss on Contingent Liabilities | Acquisition Consideration Payable - Gain or Loss on Contingent Liabilities Acquisition consideration payable relates to the Company’s acquisition of businesses and various other assets and is recorded on the Company’s consolidated balance sheets at fair value and is re-measured at each balance sheet date until such contingent liabilities have been settled, with changes in fair value recorded as gain or loss on contingent liabilities. The Company estimates the fair value of contingent consideration based on level 3 inputs primarily driven by the probability of achieving certain financing or operating related milestones. The Company estimates the fair value of contingent consideration based on level 3 inputs, which, for acquisition consideration payable related to asset acquisitions, are primarily driven by the probability of achieving certain financing or operating related milestones. |
Debt, Including Debt With Detachable Warrants | Debt, Including Debt With Detachable Warrants Debt with detachable warrants are evaluated for the classification of warrants as either equity instruments, derivative liabilities, or liabilities depending on the specific terms of the warrant agreement. In circumstances in which debt is issued with equity-classified warrants, the proceeds from the issuance of convertible debt are first allocated to the debt and the warrants at their relative estimated fair values. The portion of the proceeds so allocated to the warrants are accounted for as paid-in capital and a debt discount. The remaining proceeds, as further reduced by discounts created by the bifurcation of embedded derivatives and beneficial conversion features, are allocated to the debt. The Company accounts for debt as liabilities measured at amortized cost and amortizes the resulting debt discount from the allocation of proceeds, to interest expense using the effective interest method over the expected term of the debt instrument. The Company considers whether there are any embedded features in debt instruments that require bifurcation and separate accounting as derivative financial instruments pursuant to ASC 815, Derivatives and Hedging . If the amount allocated to the convertible debt results in an effective per share conversion price less than the fair value of the Company’s common stock on the commitment date, the intrinsic value of this beneficial conversion feature is recorded as a discount to the convertible debt with a corresponding increase to additional paid in capital. The beneficial conversion feature discount is equal to the difference between the effective conversion price and the fair value of the Company’s common stock at the commitment date, unless limited by the remaining proceeds allocated to the debt. The Company may enter financing arrangements, the terms of which involve significant assumptions and estimates, including future net product sales, in determining interest expense, amortization period of the debt discount, as well as the classification between current and long-term portions. In estimating future net product sales, the Company assesses prevailing market conditions using various external market data against the Company’s anticipated sales and planned commercial activities. See Note 12 for discussion of the Scilex Notes, which include repayments based on a percentage of net sales of ZTlido® (lidocaine topical system 1.8%). Consequently, the Company imputes interest on the carrying value of the debt and record interest expense using an imputed effective interest rate. The Company reassesses the expected payments each reporting period and account for any changes through an adjustment to the effective interest rate on a prospective basis, with a corresponding impact to the classification of the Company’s current and long-term portions. |
Investments in Other Entities | Investments in Other Entities The Company holds a portfolio of investments in equity securities that are accounted for under either the equity method or cost method. Investments in entities over which the Company has significant influence but not a controlling interest are accounted for using the equity method, with the Company’s share of earnings or losses reported in loss on equity method investments. All investments are reviewed on a regular basis for possible impairment. If an investment's fair value is determined to be less than its net carrying value and the decline is determined to be other-than-temporary, the investment is written down to its fair value. Such an evaluation is judgmental and dependent on specific facts and circumstances. Factors considered in determining whether an other-than-temporary decline in value has occurred include: the magnitude of the impairment and length of time that the estimated market value was below the cost basis; financial condition and business prospects of the investee; the Company’s intent and ability to retain the investment for a sufficient period of time to allow for recovery in market value of the investment; issues that raise concerns about the investee's ability to continue as a going concern; any other information that the Company may be aware of related to the investment. |
Research and Development Costs and Collaborations | Research and Development Costs and Collaborations All research and development costs are charged to expense as incurred. Such costs primarily consist of lab supplies, contract services, stock-based compensation expense, salaries and related benefits. |
Acquired In-Process Research and Development Expense | Acquired In-Process Research and Development Expense The Company has acquired and may continue to acquire the rights to develop and commercialize new drug candidates. The up-front payments to acquire a new drug compound or drug delivery devices, as well as future milestone payments associated with asset acquisitions that do not meet the definition of derivative and are deemed probable to achieve the milestones, are immediately expensed as acquired in-process research and development provided that the drug has not achieved regulatory approval for marketing and, absent obtaining such approval, have no alternative future use. The acquired in-process research and development related to the business combination of Virttu Biologics Limited ("Virttu"), for which certain products are under development and expected to be commercialized in the future, was capitalized and recorded within “Intangibles, net” on the accompanying consolidated balance sheet. The Company commenced amortization of acquired in-process research and development related to the business combination of Scilex upon commercialization of ZTlido® (lidocaine topical system 1.8%) in October 2018. Capitalized in-process research and development will be reviewed annually for impairment or more frequently as changes in circumstance or the occurrence of events suggest that the remaining value may not be recoverable. (See Note 4 for further discussion of acquired in-process research and development expense related to the Sofusa acquisition). |
Income Taxes | Income Taxes The provisions of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 740 “Income Taxes,” addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under ASC Topic 740-10, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The Company has determined that it has uncertain tax positions. The Company accounts for income taxes using the asset and liability method to compute the differences between the tax basis of assets and liabilities and the related financial amounts, using currently enacted tax rates. The Company has deferred tax assets, which are subject to periodic recoverability assessments. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount that more likely than not will be realized. As of December 31, 2018, the Company maintained a full valuation allowance against its deferred tax assets, with the exception of an amount equal to its deferred tax liabilities |
Revenue Recognition | Revenue Recognition The Company’s revenues are generated from various NIH grant awards, license fees, product sales, the sale of customized reagents and other materials, and the provision of contract manufacturing and other services. The Company does not have significant costs associated with costs to obtain contracts with its customers. Substantially all of the Company’s revenues and accounts receivable result from contracts with customers. Grant Revenues The revenue from the NIH grant awards is based upon subcontractor and internal costs incurred that are specifically covered by the grant, and where applicable, a facilities and administrative rate that provides funding for overhead expenses. These revenues are recognized when expenses have been incurred by subcontractors or when the Company incurs internal expenses that are related to the grant. Grant revenues were not material for the twelve months ended December 31, 2018. Royalty and License Revenues License fees for the licensing of product rights are recorded as deferred revenue upon receipt of cash and recognized as revenue on a straight-line basis over the license period, with the exception of license agreements with no remaining performance obligations or undelivered obligations. The Company applies judgment in determining the timing of revenue recognition related to contracts that include multiple performance obligations. The total transaction price of the contract is allocated to each performance obligation in an amount based on the estimated relative standalone selling prices of the promised goods or services underlying each performance obligation. For goods or services for which observable standalone selling prices are not available, the Company develops an estimated standalone selling price of each performance obligation. As of December 31, 2018, the future performance obligations for royalty and license revenues relate to the ImmuneOncia Therapeutics, LLC (“ImmuneOncia”) and NantCell, Inc. (“NantCell”) license agreements. The total consideration for the ImmuneOncia license performance obligation, effective September 1, 2016, represented $9.6 million . The estimated revenue expected to be recognized for future performance obligations, as of December 31, 2018 was approximately $8.5 million . The Company expects to recognize license revenue of approximately $0.5 million of the remaining performance obligation annually through the remaining term. The Company applied judgment in estimating the 20 -year contract term, analogous to the expected life of the patent, over which revenue is recognized over time given the ongoing performance obligation related to the Company's participation on a steering committee for the technologies under the agreement. As of December 31, 2018 and December 31, 2017, the NantCell license agreement, effective April 21, 2015, represented $110 million of contract liabilities reflected in long-term deferred revenue. See Note 11 for additional information regarding the remaining performance obligation for the agreement. Sales and Services Revenues Sales and services revenues are comprised of Scilex product sales of ZTlido® (lidocaine topical system 1.8%), contract manufacturing associated with sales of customized reagents at Concortis Biosystems Corp. ("Concortis"), materials and supply agreements, contract manufacturing services at BioServ Corporation, and the Company’s joint development agreement with Celularity Inc. The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which it recognizes revenue at the amount to which it has the right to invoice for services performed. The Company applied the practical expedient in ASC Topic 606-10-50-14 to the revenue contracts for Concortis sales and services and materials and supply agreements due to the short-term length of such contracts. The following table shows sales and service revenues disaggregated by product and services type for the years ended December 31, 2018, 2017 and 2016 (in thousands): Years Ended December 31, 2018 2017 2016 Scilex product sales 2,606 — — Concortis sales and services 5,159 4,049 2,223 Materials and supply agreements 3,267 553 879 Bioserv sales and services 5,992 5,000 — Joint development agreement 3,333 1,667 — $ 20,357 $ 11,269 $ 3,102 The Company is obligated to accept from customers the return of products sold that are damaged or do not meet certain specifications. The Company may authorize the return of products sold in accordance with the terms of its sales contracts, and estimates allowances for such amounts at the time of sale. The Company has not experienced any sales returns. Scilex Pharmaceuticals Inc. (“Scilex”) Revenues from Scilex product sales include sales of its ZTlido® (lidocaine topical system 1.8%). Scilex’s performance obligation with respect to Scilex product sales is satisfied at a point in time, which transfers control upon delivery of product to the customer. The Company considers control to have transferred upon delivery because the customer has legal title to the asset, physical possession of the asset has been transferred to the customer, the customer has significant risks and rewards of ownership of the asset, and the Company has a present right to payment at that time. The Company identified a single performance obligation. Invoicing typically occurs upon shipment and the length of time between invoicing and when payment is due is not significant. The aggregate dollar value of unfulfilled orders as of December 31, 2018 was not material. For Scilex product sales, the Company records gross-to-net sales adjustments for government and managed care rebates, chargebacks, wholesaler fees, sales returns and prompt payment discounts. Such variable consideration are estimated in the period of the sale and are estimated using a most likely amount approach based primarily upon provisions included in the Company’s customer contract, customary industry practices and current government regulations and was not significant for the year ended December 31, 2018. There were no significant changes during the year ended December 31, 2018. Concortis Biosystems Corporation (“Concortis”) Contract manufacturing associated with sales of customized reagents for Concortis operations relate to providing synthetic expertise to customers’ synthesis by delivering proprietary cytotoxins, linkers and linker-toxins and ADC service using industry standard toxin and antibodies provided by customers which are recognized at a point in time upon the transfer of control, which is generally upon shipment given the short contract terms which are generally three months or less. Materials and Supply Agreements Revenues from the sale of materials associated with the Company's research and development arrangements are recognized at a point in time upon the transfer of control, which is generally, upon shipment. As of December 31, 2018, outstanding performance obligations related to materials and supply agreements was $0.9 million , of which $0.6 million is expected to be fulfilled during the next twelve months. Bioserv Corporation ( “ Bioserv ” ) Revenues from contract manufacturing services associated with the Company's Bioserv operations related to finish and fill activities for drug products and reagents are recognized ratably over the contract term based on a time-based measure, which reflects the transfer of services to the customer, because the manufactured products are highly customized and do not have an alternative use to the Company. As of December 31, 2018 and 2017 , the Company had approximately $0.4 million and $0.5 million of unbilled accounts receivable for which revenue has been recognized but not billed at the reporting date, respectively. As of December 31, 2018 and 2017 , the Company had approximately $0.2 million and $0.4 million of upfront payments related to its contract manufacturing services included in deferred revenue, respectively. As of December 31, 2018 and 2017 , the estimated revenue expected to be recognized for future performance obligations associated with contract manufacturing services was approximately $1.6 million and $3.0 million , respectively. The following table includes Bioserv sales and services revenue expected to be recognized in the future related to performance obligations that are undelivered or partially delivered at the end of the reporting period and do not include contracts with original durations of one year or less (in thousands): 2019 2020 and thereafter Contract manufacturing services $1,118 $529 Joint Development Agreement On September 26, 2017, the Company entered into a joint development agreement with Celularity Inc. whereby the Company agreed to provide research services to Celularity Inc. through June 30, 2018 in exchange for an upfront payment of $5.0 million . The revenue related to the joint development agreement of $5.0 million was recognized over the length of the service agreement as services were performed. The Company recorded sales and services revenues under the joint development agreement of $3.3 million and $1.7 million for the years ended December 31, 2018 and 2017, respectively. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for stock-based compensation in accordance with FASB ASC Topic 718 “Compensation – Stock Compensation,” which establishes accounting for equity instruments exchanged for employee services. Under such provisions, stock-based compensation cost is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense, under the straight-line method, over the employee’s requisite service period (generally the vesting period of the equity grant). The Company accounts for equity instruments, including restricted stock or stock options, issued to non-employees in accordance with authoritative guidance for equity based payments to non-employees. Stock options issued to non-employees are accounted for at their estimated fair value determined using the Black-Scholes option-pricing model. The fair value of options and restricted stock granted to non-employees is re-measured over the vesting period, and the resulting changes in fair value are recognized as expense in the period of the change in proportion to the services rendered to date. |
Comprehensive (Loss) Income | Comprehensive (Loss) Income Comprehensive (loss) income is primarily comprised of net income (loss) and adjustments for the change in unrealized gains and losses on the Company’s investments in available-for-sale marketable securities, net of taxes. The Company displays comprehensive (loss) income and its components in its consolidated statements of comprehensive (loss) income. |
Net Income (Loss) per Share | Net Income (Loss) per Share Basic net income (loss) per share is computed by dividing net loss for the period by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share reflects the additional dilution from potential issuances of common stock, such as stock issuable pursuant to the exercise of stock options or the exercise of outstanding warrants. The treasury stock method and if-converted method are used to calculate the potential dilutive effect of these common stock equivalents. Potentially dilutive shares are excluded from the computation of diluted net loss per share when their effect is anti-dilutive. In periods where a net loss is presented, all potentially dilutive securities are anti-dilutive and are excluded from the computation of diluted net loss per share. During 2018, 2017 and 2016, the Company had securities outstanding which could potentially dilute basic earnings per share in the future, but were excluded from the computation of diluted net loss per share, as their effect would have been anti-dilutive. These outstanding securities consist of the following: Years Ended December 31, 2018 2017 2016 Outstanding options 10,523,075 6,321,400 4,332,876 Outstanding warrants 25,635,117 4,708,860 7,740,340 |
Segment Information | Segment Information The Company is engaged primarily in the discovery and development of innovative therapies focused on oncology and the treatment of chronic cancer pain as well as immunology and infectious diseases based on its platform technologies. Accordingly, the Company has determined that it operates in one operating segment. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) , which supersedes all existing revenue recognition requirements, including most industry-specific guidance. The new standard requires a company to recognize revenue when it transfers goods or services to customers in an amount that reflects the consideration that the company expects to receive for those goods or services. ASU No. 2014-09 was originally effective for annual reporting periods beginning after December 15, 2016, and interim periods thereafter. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which delayed the effective date of the new standard for annual reporting periods beginning after December 15, 2017, and interim periods thereafter. The FASB also agreed to allow entities to choose to adopt the standard as of the original effective date. The standard allows for either a full retrospective or modified retrospective method of adoption. The Company adopted this standard on its effective date, January 1, 2018 under the modified retrospective method of adoption. Under this method, entities recognize the cumulative impact of applying the new standard at the date of adoption without restatement of prior periods presented. The cumulative effect of applying the new standard to contracts that were not completed as of January 1, 2018 did not have a material impact on the Company’s consolidated financial position, results of operations or cash flows. Had ASC 605 continued to be applied for the year ended December 31, 2018, the effect of applying ASC 605 would not have had a material impact on the Company’s consolidated financial position, results of operations or cash flows. In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities . The ASU amends the guidance in GAAP on the classification and measurement of financial instruments. Changes to the current guidance primarily affect the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. ASU No. 2016-01 was effective for fiscal years and interim periods beginning after December 15, 2017, and upon adoption, an entity should apply the amendments by means of a cumulative-effect adjustment to the balance sheet at the beginning of the first reporting period in which the guidance is effective. Early adoption is not permitted except for the provision to record fair value changes for financial liabilities under the fair value option resulting from instrument-specific credit risk in other comprehensive income. The adoption of this standard did not have a material impact on the Company’s consolidated financial position, results of operations or cash flows. In February 2016, the FASB issued ASU No. 2016-02, Leases . ASU No. 2016-02 is aimed at making leasing activities more transparent and comparable, and requires substantially all leases be recognized by lessees on their balance sheet as a right-of-use asset and corresponding lease liability, including leases currently accounted for as operating leases. ASU No. 2016-2 is effective for financial statements issued for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. In July 2018, the FASB issued ASU No. 2018-11, which allows for an alternative method to adopt the lease standard by recognizing a cumulative-effect adjustment to the opening balance sheet of retained earnings in the period of adoption, with no adjustment to prior comparative periods. ASU No. 2016-02 and all subsequent amendments (collectively, "ASC 842") were effective for public entities for annual reporting periods beginning after December 15, 2018, including interim periods therein. The Company will adopt ASC 842 during the first quarter of 2019 and has elected to apply the cumulative-effect adjustment to the opening balance sheet and optional transition method to not present comparable prior periods as allowed under ASU No. 2018-11. The Company also expects to make the following transitional practical expedients elections: (1) elect the short term lease exception, (2) not elect hindsight and (3) elect to not separate its non-lease components for its real estate, vehicle and equipment leases. While substantially complete, the Company is still in the process of finalizing its evaluation of the effect of ASC 842 on the Company’s financial statements, disclosures, and internal controls and has determined that ASC 842 will have a material impact on its consolidated financial position. The Company is finalizing its determination of the incremental borrowing rate to be applied in the calculation of the operating right-of-use assets and operating lease liabilities. The Company will continue to report financial information for fiscal years ending before December 31, 2018 under the current lease accounting standard. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. The ASU requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. The ASU also requires enhanced disclosures to help investors and other financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an organization’s portfolio. The ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early application will be permitted for all organizations for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the impact that the adoption of ASU No. 2016-13 will have on its consolidated financial position, results of operations and cash flows. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments , to improve financial reporting in regards to how certain transactions are classified in the statement of cash flows. The ASU requires that (1) debt extinguishment costs be classified as cash outflows for financing activities and provides additional classification guidance for the statement of cash flows, (2) the classification of cash receipts and payments that have aspects of more than one class of cash flows to be determined by applying specific guidance under generally accepted accounting principles, and (3) each separately identifiable source or use within the cash receipts and payments be classified on the basis of their nature in financing, investing or operating activities. The ASU was effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The adoption of this standard did not have a material impact on the Company’s consolidated financial position, results of operations or cash flows. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force) . The ASU requires the statement of cash flows to explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents are to be included with cash and cash equivalents when reconciling the beginning of period and end of period amounts shown on the statement of cash flows. The ASU was effective for the Company for annual reporting periods beginning after December 15, 2017 and was required to be adopted using a retrospective approach, if applicable, with early adoption permitted. The Company adopted the new standard on January 1, 2018. The adoption of this ASU impacted the presentation of cash flows with the inclusion of restricted cash for the year ended December 31, 2018. In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business , to clarify the definition of a business to add guidance for evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. Specifically, this ASU provides a screen to assist entities in determining when a set should not be considered a business, which screen provides that if substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or group of similar assets, the set is not a business. The ASU was effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company applied this standard in the evaluation of the Sofusa acquisition. (See Note 4). In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment (Topic 350) . This standard eliminates Step 2 from the goodwill impairment test, instead requiring an entity to recognize a goodwill impairment charge for the amount by which the goodwill carrying amount exceeds the reporting unit’s fair value. This guidance is effective for interim and annual goodwill impairment tests in fiscal years beginning after December 15, 2019 with early adoption permitted. This guidance must be applied on a prospective basis. The Company is currently evaluating the impact that the adoption of ASU No. 2017-04 will have on the Company’s consolidated financial position, results of operations or cash flows. In May 2017, the FASB issued ASU No. 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting , to provide clarity and reduce both the diversity in practice and cost of complexity when applying the guidance. Specifically, the ASU provides additional modification conditions in determining whether or not modification accounting should be applied. The ASU was effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The adoption of this standard did not have a material impact on the Company’s consolidated financial position, results of operations or cash flows. In February 2018, the FASB issued ASU No. 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income , to allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act and improves the usefulness of information reported to financial statement users. The ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial position, results of operations or cash flows. In June 2018, the FASB issued ASU No. 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting , to include share-based payment transactions for acquiring goods and services from nonemployees. The ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the impact that the adoption of ASU No. 2018-07 will have on the Company’s consolidated financial position, results of operations or cash flows. In August 2018, the FASB issued ASU No. 2018-13, Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement, to improve the effectiveness of the disclosure requirements for fair value measurements. The ASU is effective for fiscal years and interim periods beginning after December 15, 2019. Amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements and the narrative description of measurement uncertainty will be applied prospectively as of the beginning of the fiscal year of adoption with all other amendments being applied retrospectively to all periods presented upon their effective date. Early adoption is permitted. The Company is evaluating the impact the standard will have on its consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. The amendments in this update align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The amendments in this update are effective for interim and annual periods for the Company beginning on January 1, 2020, with early adoption permitted. The amendments in this update may be applied either retrospectively or prospectively. The Company is evaluating the impact the standard will have on its consolidated financial statements. In November 2018, the FASB issued ASU No. 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction Between Topic 808 and Topic 606. The amendments in this update provide guidance on how to assess whether certain transactions between collaborative arrangement participants should be accounted for within the revenue recognition standard. The amendments in this update are effective for interim and annual periods for the Company beginning on January 1, 2020, with early adoption permitted. The Company is evaluating the impact the standard will have on its consolidated financial statements. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Disaggregation of Revenue | The following table shows sales and service revenues disaggregated by product and services type for the years ended December 31, 2018, 2017 and 2016 (in thousands): Years Ended December 31, 2018 2017 2016 Scilex product sales 2,606 — — Concortis sales and services 5,159 4,049 2,223 Materials and supply agreements 3,267 553 879 Bioserv sales and services 5,992 5,000 — Joint development agreement 3,333 1,667 — $ 20,357 $ 11,269 $ 3,102 |
Schedule of Remaining Performance Obligation | The following table includes Bioserv sales and services revenue expected to be recognized in the future related to performance obligations that are undelivered or partially delivered at the end of the reporting period and do not include contracts with original durations of one year or less (in thousands): 2019 2020 and thereafter Contract manufacturing services $1,118 $529 |
Components of Outstanding Securities | These outstanding securities consist of the following: Years Ended December 31, 2018 2017 2016 Outstanding options 10,523,075 6,321,400 4,332,876 Outstanding warrants 25,635,117 4,708,860 7,740,340 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis | The following table presents the Company’s financial assets and liabilities that are measured at fair value on a recurring basis (in thousands): Fair Value Measurements at December 31, 2018 Balance Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Cash and cash equivalents $ 158,738 $ 158,738 $ — $ — Restricted cash 54,592 54,592 — — Marketable securities 297 247 — 50 Total assets $ 213,627 $ 213,577 $ — $ 50 Liabilities: Acquisition consideration payable $ 11,312 $ — $ — $ 11,312 Acquisition consideration payable, non-current 725 — — 725 Total liabilities $ 12,037 $ — $ — $ 12,037 Fair Value Measurements at December 31, 2017 Balance Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Cash and Cash Equivalents $ 20,429 $ 20,429 $ — $ — Marketable securities 441 356 — 85 Total assets $ 20,870 $ 20,785 $ — $ 85 Liabilities: Acquisition consideration payable $ 53,209 $ — $ — $ 53,209 Acquisition consideration payable, non-current 1,063 1,063 Total liabilities $ 54,272 $ — $ — $ 54,272 |
Liabilities Measured at Fair Value Using Significant Unobservable Inputs (Level 3) | The following tables includes a summary of the changes to contingent consideration liabilities during the year ended December 31, 2018, 2017 and 2016. The contingent consideration is measured at fair value using significant unobservable inputs (Level 3) during the twelve months ended December 31, 2018, 2017 and 2016: (in thousands) 2018 Beginning Balance at December 31, 2017 54,272 Re-measurement of Fair Value 9,644 Settlements of current year contingent consideration (51,879 ) Ending Balance at December 31, 2018 $ 12,037 (in thousands) 2017 Beginning Balance at December 31, 2016 48,362 Scilex acquisition adjustment (See Note 4) (6,500 ) Acquisition consideration payable - current year acquisitions (See Note 4) 12,807 Contingent consideration (Non-current) - current year acquisitions (See Note 4) 983 Re-measurement of Fair Value — Payment of shares for current year contingent consideration (1,380 ) Ending Balance at December 31, 2017 $ 54,272 (in thousands) 2016 Beginning Balance at December 31, 2015 — Contingent consideration - current year acquisitions (1) 50,137 Re-measurement of Fair Value – current year acquisitions (1,775 ) Payment of current year contingent consideration — Ending Balance at December 31, 2016 $ 48,362 (1) Includes the BDL contingent consideration of 309,917 shares. The following table includes a summary of the warrant measured at fair value using significant unobservable inputs (Level 3) during the twelve months ended December 31, 2018 (in thousands): Total Beginning balance at December 31, 2017 $ 84 Addition of warrant — Change in fair value of warrant (34 ) Ending balance at December 31, 2018 $ 50 |
Schedule of Quantitative Information about Inputs and Valuation Methodologies Used for Fair Value Measurements Classified in Level 3 of Fair Value Hierarchy | The following table includes a summary of the Company’s contingent and financing liabilities, related inputs used to determine fair value, and the valuation methodologies used for the fair value measurements using significant unobservable inputs (Level 3) at December 31, 2018: (in thousands) Fair Value Measurements at December 31, 2018 Valuation Methodology Significant Unobservable Input Weighted Average (range, if applicable) Virttu Contingent Consideration (Non-Current) $ 725 Multiple outcome discounted cash flow Discount Rate Probability of Regulatory Milestone 19.2% Concortis Contingent Consideration 511 Multiple outcome discounted cash flow Discount Rate Percent probabilities assigned to scenarios 19.2% Shanghai Three Contingent Consideration 336 Multiple outcome discounted cash flow Discount Rate Percent probabilities assigned to scenarios 19.2% RWMC Contingent Consideration 503 Multiple outcome discounted cash flow Discount Rate, Percent probabilities assigned to scenarios 19.2% |
Marketable Securities (Tables)
Marketable Securities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Marketable Securities | Marketable securities consisted of the following as of December 31, 2018 (in thousands): December 31, 2018 Cost Gross Realized Gains (Losses) Fair Value Trading securities: MedoveX common shares and warrants $ 750 $ (453 ) $ 297 December 31, 2017 Cost Gross Realized Gains (Losses) Fair Value Trading securities: MedoveX common shares and warrants $ 750 $ (309 ) $ 441 |
Liabilities Measured at Fair Value Using Significant Unobservable Inputs (Level 3) | The following tables includes a summary of the changes to contingent consideration liabilities during the year ended December 31, 2018, 2017 and 2016. The contingent consideration is measured at fair value using significant unobservable inputs (Level 3) during the twelve months ended December 31, 2018, 2017 and 2016: (in thousands) 2018 Beginning Balance at December 31, 2017 54,272 Re-measurement of Fair Value 9,644 Settlements of current year contingent consideration (51,879 ) Ending Balance at December 31, 2018 $ 12,037 (in thousands) 2017 Beginning Balance at December 31, 2016 48,362 Scilex acquisition adjustment (See Note 4) (6,500 ) Acquisition consideration payable - current year acquisitions (See Note 4) 12,807 Contingent consideration (Non-current) - current year acquisitions (See Note 4) 983 Re-measurement of Fair Value — Payment of shares for current year contingent consideration (1,380 ) Ending Balance at December 31, 2017 $ 54,272 (in thousands) 2016 Beginning Balance at December 31, 2015 — Contingent consideration - current year acquisitions (1) 50,137 Re-measurement of Fair Value – current year acquisitions (1,775 ) Payment of current year contingent consideration — Ending Balance at December 31, 2016 $ 48,362 (1) Includes the BDL contingent consideration of 309,917 shares. The following table includes a summary of the warrant measured at fair value using significant unobservable inputs (Level 3) during the twelve months ended December 31, 2018 (in thousands): Total Beginning balance at December 31, 2017 $ 84 Addition of warrant — Change in fair value of warrant (34 ) Ending balance at December 31, 2018 $ 50 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property and Equipment | Property and equipment consisted of the following as of December 31, 2018 and 2017 (in thousands): December 31, 2018 2017 Furniture and fixtures $ 1,127 $ 1,035 Office equipment 632 493 Machinery and lab equipment 27,690 19,868 Leasehold improvements 9,001 7,327 Construction in progress 1,221 — 39,671 28,723 Less accumulated depreciation (15,287 ) (9,378 ) $ 24,384 $ 19,345 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Company's Identifiable Intangible Assets | A summary of the Company’s identifiable intangible assets as of December 31, 2018 and 2017 is as follows (in thousands): December 31, 2018 Gross Carrying Amount Accumulated Amortization Intangibles, net Customer relationships $ 1,585 $ 1,373 $ 212 Acquired technology 3,410 885 2,525 Acquired in-process research and development 35,834 366 35,468 Patent rights 32,720 4,742 27,978 Assembled workforce 105 5 100 Total intangible assets $ 73,654 $ 7,371 $ 66,283 December 31, 2017 Gross Carrying Amount Accumulated Amortization Intangibles, net Customer relationships $ 1,585 $ 1,091 $ 494 Acquired technology 3,410 709 2,701 Acquired in-process research and development 37,660 — 37,660 Patent rights 32,720 2,562 30,158 Total intangible assets $ 75,375 $ 4,362 $ 71,013 |
Schedule of Estimated Future Amortization Expense Related to Intangible Assets | Estimated future amortization expense related to intangible assets at December 31, 2018 is as follows (in thousands): Years Ending December 31, Amount 2019 $ 3,866 2020 3,866 2021 4,920 2022 4,920 2023 4,915 Thereafter 43,796 Total $ 66,283 |
Loan and Security Agreement a_2
Loan and Security Agreement and Convertible Notes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt and Unamortized Discount Balances | Borrowings under the December 2017 Notes consisted of the following (in thousands): Principal amount $ 50,000 Debt discount - warrant (12,669 ) Debt discount - beneficial conversion feature (32,062 ) Capitalized debt issuance costs (84 ) Accretion of debt issuance costs and other — Accretion of debt discount 26 Balance at December 31, 2017 $ 5,211 Borrowings of the Notes consisted of the following (in thousands): Face value of loan $ 224,000 Unamortized debt discount (84,000 ) Capitalized debt issuance costs (5,748 ) Accretion of debt discount 6,376 Accretion of debt issuance cost 435 Balance at December 31, 2018 $ 141,063 As of December 31, 2018, the estimated fair value of the Initial Loan was approximately $64.0 million compared to the carrying value of $67.2 million . Borrowings under the Initial Loan consisted of the following (in thousands): Face value of loan $ 100,000 Debt discount - warrant (26,659 ) Capitalized debt issuance costs (6,658 ) Accretion of debt discount and issuance costs 526 Balance at December 31, 2018 $ 67,209 Borrowings under the Notes consisted of the following (in thousands): Face value of loan $ 37,849 Unamortized debt discount (14,804 ) Accretion of debt discount 515 Balance at December 31, 2018 $ 23,560 |
Future Minimum Payments under Amended and Restated Loan and Security Agreement | Future minimum payments under the Notes, based on a percentage of projected net sales of ZTlido® (lidocaine topical system 1.8%) are as follows (in thousands): Year Ending December 31, 2019 $ 8,696 2020 30,010 2021 52,474 2022 99,153 2023 33,667 Total future minimum payments 224,000 Unamortized debt discount (77,624 ) Unamortized capitalized debt issuance costs (5,313 ) Total minimum payment 141,063 Current portion (8,696 ) Long-term portion of Scilex Notes $ 132,367 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Stock Option Activity | The following table summarizes stock option activity as of December 31, 2018, 2017 and 2016, and the changes for the years then ended (in thousands, except for share amounts): Options Outstanding Weighted- Average Exercise Price Aggregate Intrinsic Value Outstanding at December 31, 2017 6,343,400 $ 4.74 $ 6,290 Options Granted 4,737,800 $ 5.23 Options Canceled (500,435 ) $ 5.84 Options Exercised (57,690 ) $ 3.69 Outstanding at December 31, 2018 10,523,075 $ 4.91 $ 1,723 |
Fair Value of Employee Stock Options | The fair value of employee stock options was estimated at the grant date using the following assumptions: Years Ended December 31, 2018 2017 2016 Weighted-average grant date fair value $ 3.65 $ 1.28 $ 5.86 Dividend yield — — — Volatility 81 % 81 % 75 % Risk-free interest rate 2.87 % 1.92 % 1.49 % Expected life of options 6.1 years 6.1 years 6.1 years |
Summary of Common Stock Reserved for Future Issuance | Common stock reserved for future issuance consists of the following at December 31, 2018: Common stock warrants outstanding under the loan and security agreement 6,354,877 Common stock warrants outstanding under the Hercules securities agreement 306,748 Common stock warrants outstanding under the convertible notes 14,819,872 Common stock warrants outstanding under private placements 4,153,620 Common stock options outstanding under the Non-Employee Director Plan 3,200 Authorized for future grant or issuance under the 2009 Stock Incentive Plan 18,324,406 Shares issuable upon the conversion of the 2018 Notes 5,397,325 Issuable under assignment agreement based upon achievement of certain milestones 80,000 49,440,048 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Summary of Minimum Future Non-Cancelable Annual Operating Lease Obligations | Minimum future non-cancelable annual operating lease obligations are as follows for the years ending December 31 (in thousands): 2019 $ 6,396 2020 8,733 2021 8,011 2022 7,959 2023 8,186 Thereafter 52,425 $ 91,710 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | The components of the provision expense (benefit) were as follows for the years ended December 31, 2018, 2017 and 2016 (in thousands): 2018 2017 2016 Current: Federal $ (178 ) $ (366 ) $ (1,785 ) State 23 14 (600 ) Foreign (44 ) 30 — (199 ) (322 ) (2,385 ) Deferred: Federal (3,499 ) (33,178 ) 3,554 State (2,421 ) (2,538 ) (2,065 ) Foreign (155 ) — — (6,075 ) (35,716 ) 1,489 Totals $ (6,274 ) $ (36,038 ) $ (896 ) |
Summary of Components of Net Deferred Tax Liabilities | The components of the Company’s net deferred tax liabilities and related valuation allowance are as follows as of December 31, 2018 and 2017 (in thousands): 2018 2017 Deferred tax assets: Amortization of intangibles $ 27,075 $ 21,862 Deferred revenue 25,448 34,754 Tax credit carryforwards 13,720 10,160 Net operating loss carryforwards 43,542 21,172 Stock based compensation 1,786 1,743 Accrued expenses and other 14,037 1,877 Total deferred tax assets 125,608 91,568 Less valuation allowance (74,970 ) (43,405 ) Total deferred tax assets 50,638 48,163 Deferred tax liabilities: Amortization of intangibles (12,739 ) (15,225 ) Depreciation (543 ) (757 ) Investment in common stock (46,772 ) (47,716 ) Total deferred tax liabilities (60,054 ) (63,698 ) Net deferred tax assets / liabilities $ (9,416 ) $ (15,535 ) |
Summary of Reconciliation Between Federal Income Tax and Company Provision for Income Taxes | The reconciliation between U.S. federal income taxes at the statutory rate and the Company’s provision for income taxes are as follows for the years ended December 31 (in thousands): 2018 2017 Income tax expense (benefit) at federal statutory rate $ (46,011 ) $ (8,725 ) State, net of federal tax benefit (3,075 ) (834 ) Other permanent differences 2,814 1,290 Debt discount 11,357 — Incentive stock compensation 1,001 1,025 Transaction costs 102 408 Other 123 715 Return to provision adjustment (8 ) (42 ) Acquired in-process research and development 677 71 Change in Federal rate — 10,006 Change in State rate (453 ) 810 Research tax credits (4,664 ) (4,051 ) Uncertain tax positions 879 1,027 Prior year true-ups and carrybacks (889 ) (1,095 ) Stock compensation true-up 308 1,788 Change in valuation allowance 31,565 (38,431 ) Income tax provision $ (6,274 ) $ (36,038 ) |
Summary of Reconciliation of Unrecognized Tax Expense (Benefits) | A reconciliation of the beginning and ending amount of unrecognized tax expense (benefits) is as follows (in thousands): Amount Unrecognized tax benefits balance at December 31, 2017 $ 3,883 Increase related to current year tax positions 916 Increase related to prior year tax positions 150 Decrease related to prior year tax positions (597 ) Unrecognized tax benefits balance at December 31, 2018 $ 4,352 |
Quarterly Financial Data (Una_2
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Data | The following table sets forth selected quarterly data for the years presented, in thousands, except per share data. Quarter Ended Quarter Ended Quarter Ended Quarter Ended Year Ended 2018 December 31, September 30, June 30, March 31, December 31, Revenues $ 6,929 $ 4,105 $ 3,913 $ 6,246 $ 21,193 Operating costs and expenses $ 48,530 $ 52,012 $ 32,284 $ 38,792 $ 171,618 Net loss attributable to Sorrento $ (49,774 ) $ (47,328 ) $ (73,864 ) $ (32,574 ) $ (203,540 ) Net loss per share - basic $ (0.41 ) $ (0.40 ) $ (0.73 ) $ (0.38 ) $ (1.92 ) Net loss per share - diluted $ (0.41 ) $ (0.40 ) $ (0.73 ) $ (0.38 ) $ (1.92 ) Weighted-average shares - basic 121,552 117,021 100,563 84,941 106,150 Weighted-average shares - diluted 121,552 117,021 100,563 84,941 106,150 Quarter Ended Quarter Ended Quarter Ended Quarter Ended Year Ended 2017 December 31, (1) September 30, June 30, March 31, December 31, Revenues $ 20,407 $ 121,910 1 $ 4,665 $ 4,874 $ 151,856 Operating costs and expenses $ 55,205 $ 24,993 $ 18,123 $ 28,200 $ 126,521 Net income (loss) attributable to Sorrento $ 48,444 $ (2,061 ) $ (14,187 ) $ (23,064 ) $ 9,132 Net income (loss) per share - basic $ 0.60 $ (0.03 ) $ (0.20 ) $ (0.45 ) $ 0.13 Net income (loss) per share - diluted $ 0.58 $ (0.03 ) $ (0.20 ) $ (0.45 ) $ 0.13 Weighted-average shares - basic 80,486 76,887 70,302 50,886 69,742 Weighted-average shares - diluted 82,996 76,888 70,302 50,886 70,381 (1) Quarter-over-quarter increase primarily due to revenue recognized from the intangibles transferred to Celularity as a result of closing the Contribution Agreement in 2017. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Reconciliation of Basic and Diluted Earnings Per Share | The following table sets forth the reconciliation of basic and diluted earnings per share for the years ended December 31, 2018, 2017 and 2016 (in thousands, except per share): Years Ended December 31, 2018 2017 2016 Net Income (Loss) $ (203,540 ) $ 9,132 $ (60,923 ) Net Income Adjusted for Tax-Effected Interest on Convertible Notes — (71 ) — Adjusted Net Income (203,540 ) 9,061 (60,923 ) Denominator for Basic Earnings Per Share 106,150 69,742 50,360 Effect of Dilutive Securities: Stock Options — 8 — Convertible Notes — 604 — Convertible Notes - Warrants — 27 — Denominator for Diluted Earnings per Share – Adjusted for Dilutive Securities 106,150 70,381 50,360 Dilutive Earnings Per Share $ (1.92 ) $ 0.13 $ (1.21 ) |
Liquidity and Going Concern - U
Liquidity and Going Concern - Universal Shelf Registration (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||||
Apr. 30, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Nov. 30, 2017 | Dec. 31, 2014 | |
Liquidity And Going Concern [Line Items] | ||||||
Long-term debt outstanding | $ 361,800,000 | |||||
Maximum amount of equity and other securities authorized to offer | $ 250,000,000 | |||||
Remaining amount of equity and other securities authorized to offer | $ 50,000,000 | |||||
Aggregate purchase price of common stock warrants & warrants | 83,610,000 | $ 57,928,000 | $ 108,301,000 | |||
Proceeds from issuance of common stock, net | 83,608,000 | 57,928,000 | 107,986,000 | |||
November 2014 Registration | ||||||
Liquidity And Going Concern [Line Items] | ||||||
Common stock issued and sold under sales agreement | $ 13,900,000 | $ 3,600,000 | ||||
November 2017 Registration | ||||||
Liquidity And Going Concern [Line Items] | ||||||
Remaining amount of equity and other securities authorized to offer | $ 350,000,000 | |||||
November 2017 Registration | ATM Facility | ||||||
Liquidity And Going Concern [Line Items] | ||||||
Maximum maximum aggregate offering price authorized | $ 100,000,000 | |||||
Additional value of common stock allowable for issuance | 15,500,000 | |||||
Common Stock | ||||||
Liquidity And Going Concern [Line Items] | ||||||
Aggregate purchase price of common stock warrants & warrants | $ 47,500,000 | |||||
Proceeds from issuance of common stock, net | $ 43,100,000 | |||||
Common Stock | November 2017 Registration | ATM Facility | ||||||
Liquidity And Going Concern [Line Items] | ||||||
Aggregate purchase price of common stock warrants & warrants | $ 83,600,000 |
Significant Accounting Polici_4
Significant Accounting Policies - Narrative (Details) | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2018USD ($) | Dec. 31, 2018USD ($)segment | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Significant Accounting Policies [Line Items] | ||||
Restricted cash | $ 45,000,000 | $ 45,000,000 | $ 0 | |
Restricted cash | 9,592,000 | 9,592,000 | 0 | |
Other-than-temporary impairment charges | 0 | |||
Goodwill impairment | 0 | 0 | 0 | $ 0 |
Impairment losses of long-lived assets | $ 0 | |||
Number of operating segments | segment | 1 | |||
Minimum | ||||
Significant Accounting Policies [Line Items] | ||||
Estimated useful life of fixed asset | 3 years | |||
Maximum | ||||
Significant Accounting Policies [Line Items] | ||||
Estimated useful life of fixed asset | 5 years | |||
Grants Receivable | ||||
Significant Accounting Policies [Line Items] | ||||
Allowance for doubtful accounts | 0 | $ 0 | 0 | |
Trade Accounts Receivable | ||||
Significant Accounting Policies [Line Items] | ||||
Allowance for doubtful accounts | 20,000 | 20,000 | $ 20,000 | $ 26,000 |
Senior Notes | Scilex Pharmaceuticals, Inc | Scilex Notes | ||||
Significant Accounting Policies [Line Items] | ||||
Restricted cash | 45,000,000 | 45,000,000 | ||
Oaktree Capital Management, L.P. | Oaktree Term Loan | ||||
Significant Accounting Policies [Line Items] | ||||
Restricted cash | $ 9,600,000 | $ 9,600,000 |
Significant Accounting Polici_5
Significant Accounting Policies - Revenue Recognition (Details) - USD ($) $ in Thousands | Sep. 26, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||
Deferred revenue | $ 116,274 | $ 119,287 | ||
Total revenues | $ 21,193 | 151,856 | $ 8,152 | |
Royalties and licenses | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||
Estimated license contract term based on expected life of patent | 20 years | |||
Total revenues | $ 480 | 140,381 | 4,017 | |
Materials and supply agreements | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||
Total revenues | 3,267 | 553 | 879 | |
Bioserv sales and services | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||
Unbilled contracts receivable | 400 | 500 | ||
Deferred revenue | 200 | 400 | ||
Total revenues | 5,992 | 5,000 | 0 | |
Joint development agreement | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||
Proceeds from customers | $ 5,000 | |||
Total revenues | 3,333 | 1,667 | $ 0 | |
ImmuneOncia Therapeutics, LLC | Royalties and licenses | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||
Proceeds from customers | 9,600 | |||
Remaining performance obligation expected to be recognized in the next twelve months | 500 | |||
Nant Cell | Royalties and licenses | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||
Deferred revenue | $ 110,000 | $ 110,000 |
Significant Accounting Polici_6
Significant Accounting Policies - Schedule of Remaining Performance Obligations (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Sep. 26, 2017 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01 | Materials and supply agreements | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Remaining performance obligation | $ 600 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01 | Bioserv sales and services | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Remaining performance obligation | $ 1,118 | ||
Expected period of satisfaction | 1 year | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | Bioserv sales and services | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Remaining performance obligation | $ 529 | ||
Expected period of satisfaction | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: (nil) | Materials and supply agreements | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Remaining performance obligation | $ 900 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: (nil) | Bioserv sales and services | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Remaining performance obligation | 1,600 | $ 3,000 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: (nil) | Joint development agreement | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Remaining performance obligation | $ 5,000 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: (nil) | ImmuneOncia Therapeutics, LLC | Royalties and licenses | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Remaining performance obligation | $ 8,500 |
Significant Accounting Polici_7
Significant Accounting Policies - Schedule of Revenues by Category (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disaggregation of Revenue [Line Items] | |||
Total revenues | $ 21,193 | $ 151,856 | $ 8,152 |
Scilex product sales | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 2,606 | 0 | 0 |
Concortis sales and services | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 5,159 | 4,049 | 2,223 |
Materials and supply agreements | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 3,267 | 553 | 879 |
Bioserv sales and services | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 5,992 | 5,000 | 0 |
Joint development agreement | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 3,333 | 1,667 | 0 |
Product And Service [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | $ 20,357 | $ 11,269 | $ 3,102 |
Significant Accounting Polici_8
Significant Accounting Policies - Schedule of Outstanding Securities (Details) - shares | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||||||||
Weighted-average shares used during period - basic per share attributable to Sorrento (in shares) | 121,552,000 | 117,021,000 | 100,563,000 | 84,941,000 | 80,486,000 | 76,887,000 | 70,302,000 | 50,886,000 | 106,150,000 | 69,742,000 | 50,360,000 |
Outstanding options | |||||||||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||||||||
Weighted-average shares used during period - basic per share attributable to Sorrento (in shares) | 10,523,075 | 6,321,400 | 4,332,876 | ||||||||
Outstanding warrants | |||||||||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||||||||
Weighted-average shares used during period - basic per share attributable to Sorrento (in shares) | 25,635,117 | 4,708,860 | 7,740,340 |
Acquisitions - Sofusa Purchase
Acquisitions - Sofusa Purchase Agreement (Details) | Jul. 03, 2018USD ($)product | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Business Acquisition [Line Items] | ||||
Purchase of assets | $ 10,000,000 | $ 0 | $ 0 | |
Research and development in process | 9,895,000 | 0 | $ 0 | |
Property and equipment | 39,671,000 | 28,723,000 | ||
Sofusa | ||||
Business Acquisition [Line Items] | ||||
Total purchase consideration | $ 10,000,000 | |||
Number of products developed for royalty payment | product | 5 | |||
Purchase of assets | $ 10,000,000 | |||
Milestones Achievement | Sofusa | ||||
Business Acquisition [Line Items] | ||||
Business combination additional consideration transferred | $ 300,000,000 | |||
Contingent consideration, liability | 0 | |||
Research and development in process | 9,500,000 | |||
Construction in progress | ||||
Business Acquisition [Line Items] | ||||
Property and equipment | 1,221,000 | $ 0 | ||
Construction in progress | Sofusa | ||||
Business Acquisition [Line Items] | ||||
Property and equipment | $ 500,000 |
Acquisitions - Acquisition of V
Acquisitions - Acquisition of Virttu Biologics Limited (Details) | Apr. 27, 2018USD ($)shares | Apr. 27, 2017USD ($)day$ / sharesshares | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Business Acquisition [Line Items] | ||||
Acquisition consideration payable | $ 11,312,000 | $ 53,209,000 | ||
Goodwill | 38,298,000 | 38,298,000 | ||
Issuance of common stock upon acquisition | 3,055,000 | |||
Virttu Biologics Limited | ||||
Business Acquisition [Line Items] | ||||
Issuance of common stock upon acquisition | 11,308,000 | |||
Virttu Biologics Limited | TNK Therapeutics | ||||
Business Acquisition [Line Items] | ||||
Business acquisition, percentage of voting interests acquired | 100.00% | |||
Total purchase consideration | $ 25,000,000 | |||
Business acquisition, common stock consideration | $ 2,200,000 | |||
Issuance of common stock upon acquisition (in shares) | shares | 797,081 | |||
Cash consideration to equity holders | $ 557,000 | |||
Percentage of consideration due at closing | 20.00% | |||
Percentage of adjusted base consideration payable in cash | 80.00% | |||
Escrow shares percentage | 20.00% | |||
Business acquisition, share price | $ / shares | $ 5.55 | |||
Acquisition consideration payable | $ 12,800,000 | 9,900,000 | ||
Noncurrent contingent consideration liability | 1,000,000 | |||
Identifiable assets recognized | 16,000,000 | |||
Deferred tax liabilities assumed | 800,000 | |||
Goodwill | 1,400,000 | |||
Tax deductible goodwill | 0 | |||
Issuance of common stock upon acquisition (in shares) | shares | 1,795,011 | |||
Contingent consideration, liability | $ 9,900,000 | $ 9,900,000 | ||
Issuance of common stock upon acquisition | $ 11,300,000 | |||
Virttu Biologics Limited | TNK Therapeutics | General and administrative expenses | ||||
Business Acquisition [Line Items] | ||||
Business acquisition related costs | $ 900,000 | |||
Virttu Biologics Limited | TNK Therapeutics | Acquired in-process research and development | ||||
Business Acquisition [Line Items] | ||||
Intangible assets acquired | 15,400,000 | |||
Virttu Biologics Limited | TNK Therapeutics | Minimum | ||||
Business Acquisition [Line Items] | ||||
Financial support for equity interest | 50,000,000 | |||
Virttu Biologics Limited | TNK Therapeutics | Regulatory approval consideration | ||||
Business Acquisition [Line Items] | ||||
Business combination additional consideration transferred | $ 10,000,000 | |||
Number of business days to satisfy one half payment upon achievement of regulatory approval | day | 45 | |||
Contingent consideration payment option two, share value | $ 5,000,000 | |||
Volume weighted average price period | 30 days | |||
Virttu Biologics Limited | TNK Therapeutics | Regulatory approval consideration | Maximum | ||||
Business Acquisition [Line Items] | ||||
Contingent consideration payment option one, cash | $ 5,000,000 |
Acquisitions - Acquisition of S
Acquisitions - Acquisition of Scilex Pharmaceuticals Inc. (Details) - USD ($) $ / shares in Units, $ in Thousands | Feb. 28, 2018 | Sep. 11, 2017 | Nov. 08, 2016 | Dec. 31, 2018 | Dec. 31, 2017 |
Business Acquisition [Line Items] | |||||
Acquisition consideration payable | $ 11,312 | $ 53,209 | |||
Noncontrolling interests | (1,972) | 7,042 | |||
Goodwill | $ 38,298 | $ 38,298 | |||
Scilex Pharmaceuticals, Inc | |||||
Business Acquisition [Line Items] | |||||
Business acquisition, percentage of voting interests acquired | 72.00% | ||||
Business acquisition, common stock consideration | $ 1,400 | $ 4,800 | |||
Issuance of common stock upon acquisition (in shares) | 754,930 | 754,911 | |||
Total purchase consideration | $ 38,200 | ||||
Acquisition consideration payable | 33,500 | ||||
Noncontrolling interests | 12,300 | ||||
Identifiable assets recognized | 54,900 | ||||
Liabilities assumed in a business acquisition | 17,900 | ||||
Deferred tax liabilities assumed | 13,900 | ||||
Goodwill | 13,500 | ||||
Tax deductible goodwill | 0 | ||||
Scilex Pharmaceuticals, Inc | Acquired in-process research and development | |||||
Business Acquisition [Line Items] | |||||
Assets acquired | 21,900 | ||||
Scilex Pharmaceuticals, Inc | Patent rights | |||||
Business Acquisition [Line Items] | |||||
Assets acquired | $ 32,600 | ||||
Scilex Pharmaceuticals, Inc | Upon FDA acceptance | |||||
Business Acquisition [Line Items] | |||||
Discounted rate on consideration transferred | 10.00% | ||||
Undiscounted purchase consideration | $ 47,800 | ||||
Scilex Pharmaceuticals, Inc | Upon FDA acceptance | Maximum | |||||
Business Acquisition [Line Items] | |||||
Stock price (USD per share) | $ 25.32 | ||||
Scilex Pharmaceuticals, Inc | Upon FDA acceptance | Minimum | |||||
Business Acquisition [Line Items] | |||||
Stock price (USD per share) | $ 6.33 | ||||
Scilex Pharmaceuticals, Inc | FDA approval | |||||
Business Acquisition [Line Items] | |||||
Issuance of common stock upon acquisition (in shares) | 1,381,346 | ||||
Adjusted base consideration percentage | 80.00% | ||||
Maximum percentage of common stock issued in connection with acquisition | 4.99% | ||||
Total purchase consideration | $ 38,200 | ||||
Scilex Pharmaceuticals, Inc | FDA approval | Maximum | |||||
Business Acquisition [Line Items] | |||||
Stock price (USD per share) | $ 25.32 | ||||
Scilex Pharmaceuticals, Inc | FDA approval | Minimum | |||||
Business Acquisition [Line Items] | |||||
Stock price (USD per share) | $ 6.33 | ||||
Scilex Pharmaceuticals, Inc | Itochu | Itochu | |||||
Business Acquisition [Line Items] | |||||
Noncontrolling interest ownership percentage | 19.30% |
Acquisitions - Acquired In-proc
Acquisitions - Acquired In-process Research and Development of BDL (Details) - BDL Products Inc - Stock purchase agreement - USD ($) | Mar. 19, 2018 | Aug. 31, 2015 |
Business Acquisition [Line Items] | ||
Cash payment to acquire interest in subsidiaries and affiliates | $ 100 | |
Minimum qualified financing | $ 50,000,000 | |
Aggregate common stock to be issued (in shares) | 309,916 | |
Issuance of common stock upon acquisition (in shares) | 309,916 | |
Common class A | ||
Business Acquisition [Line Items] | ||
Common stock to be issued, value | $ 6,000,000 |
Acquisitions - Acquired In-pr_2
Acquisitions - Acquired In-process Research and Development of Cargenix (Details) - TNK Therapeutics - USD ($) | Oct. 07, 2016 | Aug. 31, 2015 | Mar. 07, 2016 |
Common class A | |||
Business Acquisition [Line Items] | |||
Common stock to be issued, value | $ 4,000,000 | ||
CARgenix Holding LLC | Membership interest purchase agreement | |||
Business Acquisition [Line Items] | |||
Cash payment to acquire interest in subsidiaries and affiliates | $ 100 | ||
Minimum qualified financing | $ 50,000,000 | ||
Aggregate common stock to be issued (in shares) | 309,917 | 309,917 | |
CARgenix Holding LLC | Membership interest purchase agreement | Common class A | |||
Business Acquisition [Line Items] | |||
Common stock to be issued, value | $ 6,000,000 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Assets: | ||
Total assets | $ 213,627 | $ 20,870 |
Liabilities: | ||
Total liabilities | 12,037 | 54,272 |
Cash and cash equivalents | ||
Assets: | ||
Total assets | 158,738 | 20,429 |
Restricted cash | ||
Assets: | ||
Total assets | 54,592 | |
Marketable securities | ||
Assets: | ||
Total assets | 297 | 441 |
Acquisition consideration payable | ||
Liabilities: | ||
Total liabilities | 11,312 | 53,209 |
Acquisition consideration payable, non-current | ||
Liabilities: | ||
Total liabilities | 725 | 1,063 |
Quoted Prices in Active Markets (Level 1) | ||
Assets: | ||
Total assets | 213,577 | 20,785 |
Liabilities: | ||
Total liabilities | 0 | 0 |
Quoted Prices in Active Markets (Level 1) | Cash and cash equivalents | ||
Assets: | ||
Total assets | 158,738 | 20,429 |
Quoted Prices in Active Markets (Level 1) | Restricted cash | ||
Assets: | ||
Total assets | 54,592 | |
Quoted Prices in Active Markets (Level 1) | Marketable securities | ||
Assets: | ||
Total assets | 247 | 356 |
Quoted Prices in Active Markets (Level 1) | Acquisition consideration payable | ||
Liabilities: | ||
Total liabilities | 0 | 0 |
Quoted Prices in Active Markets (Level 1) | Acquisition consideration payable, non-current | ||
Liabilities: | ||
Total liabilities | 0 | |
Significant Other Observable Inputs (Level 2) | ||
Assets: | ||
Total assets | 0 | 0 |
Liabilities: | ||
Total liabilities | 0 | 0 |
Significant Other Observable Inputs (Level 2) | Cash and cash equivalents | ||
Assets: | ||
Total assets | 0 | 0 |
Significant Other Observable Inputs (Level 2) | Restricted cash | ||
Assets: | ||
Total assets | 0 | |
Significant Other Observable Inputs (Level 2) | Marketable securities | ||
Assets: | ||
Total assets | 0 | 0 |
Significant Other Observable Inputs (Level 2) | Acquisition consideration payable | ||
Liabilities: | ||
Total liabilities | 0 | 0 |
Significant Other Observable Inputs (Level 2) | Acquisition consideration payable, non-current | ||
Liabilities: | ||
Total liabilities | 0 | |
Significant Unobservable Inputs (Level 3) | ||
Assets: | ||
Total assets | 50 | 85 |
Liabilities: | ||
Total liabilities | 12,037 | 54,272 |
Significant Unobservable Inputs (Level 3) | Cash and cash equivalents | ||
Assets: | ||
Total assets | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Restricted cash | ||
Assets: | ||
Total assets | 0 | |
Significant Unobservable Inputs (Level 3) | Marketable securities | ||
Assets: | ||
Total assets | 50 | 85 |
Significant Unobservable Inputs (Level 3) | Acquisition consideration payable | ||
Liabilities: | ||
Total liabilities | 11,312 | 53,209 |
Significant Unobservable Inputs (Level 3) | Acquisition consideration payable, non-current | ||
Liabilities: | ||
Total liabilities | $ 725 | $ 1,063 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||
Dec. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Nov. 07, 2018 | Apr. 27, 2017 | Nov. 08, 2016 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||
Derivative liability recorded | $ 2,800 | ||||||
Gain on derivative liabilities | $ (2,830) | $ (2,830) | $ 0 | $ (5,520) | |||
Re-measurement of Fair Value | 9,644 | 0 | (1,775) | ||||
Settlement of contingent consideration | 51,879 | (1,380) | $ 0 | ||||
Acquisition consideration payable | 11,312 | 11,312 | $ 53,209 | ||||
Acquisition consideration | |||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||
Re-measurement of Fair Value | 9,600 | ||||||
Scilex Pharmaceuticals, Inc | |||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||
Settlement of contingent consideration | 38,200 | ||||||
Acquisition consideration payable | $ 33,500 | ||||||
TNK Therapeutics | Virttu Biologics Limited | |||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||
Settlement of contingent consideration | 11,300 | ||||||
Acquisition consideration payable | $ 9,900 | 9,900 | $ 12,800 | ||||
CARgenix Holding LLC | Membership interest purchase agreement | TNK Therapeutics | |||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||
Settlement of contingent consideration | $ 2,300 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Contingent Consideration Liabilities Measured at Fair Value Using Significant Unobservable Inputs (Level 3) (Details) - USD ($) $ in Thousands | Oct. 07, 2016 | Aug. 31, 2015 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||
Beginning balance | $ 54,272 | $ 48,362 | $ 0 | ||
Acquisition and contingent considerations | 983 | ||||
Re-measurement of Fair Value | 9,644 | 0 | (1,775) | ||
Settlements of current year contingent consideration | (51,879) | 1,380 | 0 | ||
Ending balance | 12,037 | 54,272 | 48,362 | ||
Contingent Consideration Liabilities | |||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||
Acquisition adjustment | (6,500) | ||||
Acquisition consideration | |||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||
Acquisition and contingent considerations | $ 12,807 | $ 50,137 | |||
Re-measurement of Fair Value | 9,600 | ||||
Membership interest purchase agreement | TNK Therapeutics | CARgenix Holding LLC | |||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||
Settlements of current year contingent consideration | $ (2,300) | ||||
Aggregate common stock to be issued (in shares) | 309,917 | 309,917 |
Fair Value Measurements - Sum_2
Fair Value Measurements - Summary of Quantitative Information about Inputs and Valuation Methodologies used for Fair Value Measurements Classified in Level 3 (Details) $ in Thousands | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Fair Value | $ 12,037 | $ 54,272 | $ 48,362 | $ 0 |
Contingent consideration liabilities | Virttu Biologics Limited | Significant Unobservable Inputs (Level 3) | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Fair Value | 725 | |||
Contingent consideration liabilities | Concortis | Significant Unobservable Inputs (Level 3) | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Fair Value | 511 | |||
Contingent consideration liabilities | Shanghai Three | Significant Unobservable Inputs (Level 3) | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Fair Value | 336 | |||
Contingent consideration liabilities | RWMC | Significant Unobservable Inputs (Level 3) | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Fair Value | $ 503 | |||
Discount Rate | Contingent consideration liabilities | Virttu Biologics Limited | Significant Unobservable Inputs (Level 3) | Weighted average | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Percent probabilities assigned to scenarios | 0.192 | |||
Discount Rate | Contingent consideration liabilities | Concortis | Significant Unobservable Inputs (Level 3) | Weighted average | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Percent probabilities assigned to scenarios | 0.192 | |||
Discount Rate | Contingent consideration liabilities | Shanghai Three | Significant Unobservable Inputs (Level 3) | Weighted average | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Percent probabilities assigned to scenarios | 0.192 | |||
Discount Rate | Contingent consideration liabilities | RWMC | Significant Unobservable Inputs (Level 3) | Weighted average | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Percent probabilities assigned to scenarios | 0.1223 | |||
Probability Of Regulatory Milestone | Contingent consideration liabilities | Virttu Biologics Limited | Significant Unobservable Inputs (Level 3) | Weighted average | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Percent probabilities assigned to scenarios | 0.16 | |||
Probability Of Regulatory Milestone | Contingent consideration liabilities | Concortis | Significant Unobservable Inputs (Level 3) | Weighted average | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Percent probabilities assigned to scenarios | 0.20 | |||
Probability Of Regulatory Milestone | Contingent consideration liabilities | Shanghai Three | Significant Unobservable Inputs (Level 3) | Weighted average | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Percent probabilities assigned to scenarios | 0.10 | |||
Probability Of Regulatory Milestone | Contingent consideration liabilities | RWMC | Significant Unobservable Inputs (Level 3) | Weighted average | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Percent probabilities assigned to scenarios | 0.10 |
Marketable Securities - Schedul
Marketable Securities - Schedule of Marketable Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Marketable Securities [Line Items] | ||
Cost method investments | $ 237,008 | $ 237,008 |
Trading securities, cost | 750 | |
Gross Realized Gains (Losses) | (309) | |
Trading securities,fair value | $ 441 | |
MedoveX common shares and warrants | ||
Marketable Securities [Line Items] | ||
Trading securities, cost | 750 | |
Gross Realized Gains (Losses) | (453) | |
Cost method investments | $ 297 |
Marketable Securities - Trading
Marketable Securities - Trading Securities Narrative (Details) $ / shares in Units, $ in Thousands | Aug. 05, 2016USD ($)unit$ / sharesshares | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Debt Securities, Available-for-sale [Line Items] | ||||
Loss on trading securities | $ 144 | $ 665 | $ (356) | |
MedoveX common shares and warrants | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Loss on trading securities | $ 100 | $ 700 | ||
MedoveX | Unit purchase agreement | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Number of units purchased | unit | 3 | |||
Payment for purchase of units | $ 750 | |||
Aggregate purchase price of common stock warrants | $ 250 | |||
Common stock agreed to issue and sell (in shares) | shares | 208,333 | |||
Warrants to purchase common stock (in shares) | shares | 104,167 | |||
Warrant exercise price per share (USD per share) | $ / shares | $ 1.52 | |||
Warrant exercisable period | 5 years |
Marketable Securities - Summary
Marketable Securities - Summary of Warrant Measured at Fair Value Using Significant Unobservable Inputs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Beginning balance | $ 54,272 | $ 48,362 | $ 0 |
Addition of warrant | 983 | ||
Ending balance | 12,037 | 54,272 | $ 48,362 |
Outstanding warrants | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Beginning balance | 84 | ||
Addition of warrant | 0 | ||
Change in fair value of warrant | (34) | ||
Ending balance | $ 50 | $ 84 |
Marketable Securities - Availab
Marketable Securities - Available-for-sale Securities Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Jul. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Debt Securities, Available-for-sale [Line Items] | ||||
Stock repurchased during period (in shares) | 7,878,098 | |||
Gain on sale of stock | $ 0 | $ 0 | $ 27,193 | |
Foundation | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Common stock agreed to issue and sell (in shares) | 5,618,326 | |||
Stock repurchased during period (in shares) | 7,878,098 | |||
Payments for issuance of common stock and warrants | $ 15,600 | |||
Cambridge Equities LP | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Common stock shares forfeited (in shares) | 500,000 | |||
Warrants to purchase common stock (in shares) | 1,724,138 | |||
NantKwest | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Gain on sale of stock | $ 27,200 |
Property and Equipment - Summar
Property and Equipment - Summary of Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, total | $ 39,671 | $ 28,723 |
Less accumulated depreciation | (15,287) | (9,378) |
Property and equipment, net | 24,384 | 19,345 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, total | 1,127 | 1,035 |
Office equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, total | 632 | 493 |
Machinery and lab equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, total | 27,690 | 19,868 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, total | 9,001 | 7,327 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, total | $ 1,221 | $ 0 |
Property and Equipment - Narrat
Property and Equipment - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation expense | $ 6 | $ 4.5 | $ 2 |
Cost Method Investments (Detail
Cost Method Investments (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Investments [Abstract] | |||
Cost method investments | $ 237,008,000 | $ 237,008,000 | |
Cost method investments, impairment losses | $ 0 | $ 0 | $ 0 |
Equity Method Investments - NAN
Equity Method Investments - NANTibody (Details) shares in Millions | Jul. 02, 2017USD ($) | May 31, 2015USD ($)joint_venture | Sep. 30, 2017USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Dec. 31, 2013USD ($)shares | Dec. 31, 2018USD ($) | Jul. 03, 2018USD ($) | Dec. 31, 2017USD ($) | Jun. 30, 2017USD ($) | Jul. 31, 2015USD ($)board_member | Apr. 30, 2015USD ($) |
Schedule of Equity Method Investments [Line Items] | ||||||||||||||
Number of joint venture to be funded by the Company per agreement | joint_venture | 2 | |||||||||||||
Equity method investments | $ 27,980,000 | $ 32,999,000 | ||||||||||||
NANTibody | ||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||
Initial joint funding | $ 100,000,000 | |||||||||||||
Equity method investment ownership percentage | 40.00% | 40.00% | 40.00% | 40.00% | 40.00% | |||||||||
Initial joint funding contributed | $ 40,000,000 | |||||||||||||
Number of board members | board_member | 3 | |||||||||||||
Cash and cash equivalents of equity method investment | $ 100,000,000 | $ 9,500,000 | $ 9,500,000 | $ 9,500,000 | $ 99,600,000 | |||||||||
Equity method investments | 40,000,000 | $ 3,700,000 | ||||||||||||
Equity balance of equity method investments | 10,000,000 | 10,000,000 | 10,000,000 | $ 100,000,000 | ||||||||||
Decrease in cash and cash equivalent of equity method invests | 90,100,000 | |||||||||||||
Loss on equity investments | 36,000,000 | 36,000,000 | ||||||||||||
Net income (loss) of equity investments | $ (700,000) | (1,100,000) | $ (600,000) | |||||||||||
Current assets of equity method investment | 9,900,000 | 9,900,000 | 9,700,000 | 9,900,000 | ||||||||||
Current liabilities of equity method investment | 600,000 | 600,000 | 800,000 | 600,000 | ||||||||||
Noncurrent assets of equity method investment | $ 0 | |||||||||||||
Noncurrent liabilities of equity method investment | $ 0 | $ 0 | $ 0 | |||||||||||
Nant Cell | NANTibody | ||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||
Equity method investment ownership percentage | 60.00% | |||||||||||||
Initial joint funding contributed | $ 60,000,000 | |||||||||||||
Number of board members | board_member | 2 | |||||||||||||
NANTibody | ||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||
Number of board members | board_member | 5 | |||||||||||||
NANTibody | Equity method investments | ||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||
Cash consideration to equity holders | $ 90,100,000 | |||||||||||||
IgDraSol Inc | ||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||
Upfront fee received from selling equity interests in IgDraSol | $ 90,100,000 | |||||||||||||
Restricted money to be funding two joint ventures | $ 60,000,000 | |||||||||||||
IgDraSol Inc | ||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||
Issuance of common stock upon acquisition (in shares) | shares | 3 | |||||||||||||
Cash consideration to equity holders | $ 380,000 | |||||||||||||
Total purchase consideration | $ 29,100,000 |
Equity Method Investments - N_2
Equity Method Investments - NantStem (Details) - USD ($) | Oct. 13, 2015 | Dec. 31, 2015 | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2018 | Sep. 30, 2017 | Jul. 31, 2015 |
Schedule of Equity Method Investments [Line Items] | ||||||||
Equity method investments | $ 32,999,000 | $ 27,980,000 | ||||||
Nant Cancer Stem LLC | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Initial joint funding | $ 100,000,000 | |||||||
Initial joint funding contributed | $ 40,000,000 | |||||||
Equity method investment ownership percentage | 20.00% | 40.00% | ||||||
Joint venture agreement second payment contribution | $ 20,000,000 | |||||||
Loss on equity investments | $ 500,000 | $ 0 | ||||||
Equity method investment ownership percentage | 20.00% | |||||||
Equity method investments | $ 18,000,000 | 18,700,000 | ||||||
Net income (loss) of equity investments | $ (700,000) | $ 700,000 | $ 900,000 | |||||
Current assets of equity method investment | 74,100,000 | $ 82,500,000 | ||||||
Current liabilities of equity method investment | 100,000 | 0 | ||||||
Noncurrent assets of equity method investment | 6,900,000 | 0 | ||||||
Noncurrent liabilities of equity method investment | $ 0 | $ 0 | ||||||
NantBioScience, Inc. | Nant Cancer Stem LLC | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Initial joint funding contributed | $ 60,000,000 | |||||||
Equity method investment ownership percentage | 60.00% |
Equity Method Investments - Yuh
Equity Method Investments - Yuhan Agreement (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Apr. 30, 2016USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Mar. 31, 2016USD ($)antibody | |
Schedule of Equity Method Investments [Line Items] | ||||
Equity method investments | $ 27,980 | $ 32,999 | ||
ImmuneOncia Therapeutics, LLC | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Number of monoclonal antibodies | antibody | 2 | |||
Equity method investment ownership percentage | 49.00% | 49.00% | 49.00% | |
Equity method investments | $ 2,700 | $ 6,800 | ||
Difference between carrying amount and underlying equity | 800 | |||
Net income (loss) of equity investments | (8,400) | (5,400) | ||
Current assets of equity method investment | 800 | 7,400 | ||
Current liabilities of equity method investment | 1,100 | 129 | ||
Noncurrent assets of equity method investment | 7,500 | 8,800 | ||
Noncurrent liabilities of equity method investment | $ 87 | $ 33 | ||
Yuhan Corporation | Private Placement | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Gross proceeds of common stock and warrants | $ 10,000 | |||
Yuhan Corporation | ImmuneOncia Therapeutics, LLC | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Initial investment | $ 10,000 | |||
Ownership percentage | 51.00% |
Equity Method Investments - Sha
Equity Method Investments - Shanghai Three (Details) - USD ($) | Mar. 07, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2018 | Dec. 31, 2017 |
Schedule of Equity Method Investments [Line Items] | |||||
Equity method investments | $ 27,980,000 | $ 32,999,000 | |||
TNK Therapeutics | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Gross proceeds of common stock and warrants | $ 10,000,000 | ||||
Upfront payments received | 1,000,000 | ||||
Common class A | TNK Therapeutics | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Common stock to be issued, value | $ 4,000,000 | ||||
Shanghai Three | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Equity method investment ownership percentage | 25.00% | ||||
Equity method investments | $ 3,800,000 | 3,800,000 | |||
Operating expenses of equity method investment | $ 0 | $ 0 | |||
Current assets of equity method investment | 300,000 | 400,000 | |||
Noncurrent assets of equity method investment | 5,100,000 | 5,300,000 | |||
Current liabilities of equity method investment | 2,600,000 | 2,800,000 | |||
Noncurrent liabilities of equity method investment | $ 2,000,000 | $ 2,000,000 |
Significant Agreements and Co_2
Significant Agreements and Contracts - License Agreement with Mabtech Limited (Details) - Mabtech Limited $ in Millions | 1 Months Ended | |||
Dec. 31, 2017USD ($) | Jun. 30, 2016USD ($) | Feb. 29, 2016USD ($) | Aug. 31, 2015USD ($)antibody | |
Research and Development Arrangement, Contract to Perform for Others [Line Items] | ||||
Number of monoclonal antibodies | antibody | 4 | |||
Additional payment for licensing agreement | $ 10 | |||
Aggregate purchase price of common stock warrants | $ 10 | |||
License fees payable | $ 125 | |||
Acquired in progress research and development expense | ||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | ||||
Initial payment for licensing agreement | $ 10 | |||
Additional payment for licensing agreement | $ 25 | $ 30 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Nov. 08, 2016 | |
Disclosure - Goodwill and Intangible Assets - Additional Information (Detail) [Line Items] | |||||
Goodwill | $ 38,298,000 | $ 38,298,000 | $ 38,298,000 | ||
Goodwill impairment | 0 | 0 | 0 | $ 0 | |
Intangible asset impairment | 1,826,000 | 0 | 0 | ||
Patent rights | |||||
Disclosure - Goodwill and Intangible Assets - Additional Information (Detail) [Line Items] | |||||
Amortization expense | $ 2,200,000 | 2,100,000 | 400,000 | ||
Acquired technology | |||||
Disclosure - Goodwill and Intangible Assets - Additional Information (Detail) [Line Items] | |||||
Estimated useful life of intangible asset | 19 years | ||||
Amortization expense | $ 200,000 | 200,000 | 200,000 | ||
Customer relationships | |||||
Disclosure - Goodwill and Intangible Assets - Additional Information (Detail) [Line Items] | |||||
Estimated useful life of intangible asset | 5 years | ||||
Amortization expense | $ 300,000 | $ 300,000 | $ 300,000 | ||
Weighted average | |||||
Disclosure - Goodwill and Intangible Assets - Additional Information (Detail) [Line Items] | |||||
Identifiable intangible assets, weighted average life | 15 years | ||||
Minimum | Patent rights | |||||
Disclosure - Goodwill and Intangible Assets - Additional Information (Detail) [Line Items] | |||||
Estimated useful life of intangible asset | 15 years | ||||
Maximum | Patent rights | |||||
Disclosure - Goodwill and Intangible Assets - Additional Information (Detail) [Line Items] | |||||
Estimated useful life of intangible asset | 19 years | ||||
Scilex Pharmaceuticals, Inc | |||||
Disclosure - Goodwill and Intangible Assets - Additional Information (Detail) [Line Items] | |||||
Goodwill | $ 13,500,000 | ||||
Scilex Pharmaceuticals, Inc | Acquired in-process research and development | |||||
Disclosure - Goodwill and Intangible Assets - Additional Information (Detail) [Line Items] | |||||
Estimated useful life of intangible asset | 15 years | ||||
Amortization expense | $ 400,000 | ||||
Virttu Biologics Limited | Acquired in-process research and development | |||||
Disclosure - Goodwill and Intangible Assets - Additional Information (Detail) [Line Items] | |||||
Intangible asset impairment | $ 1,800,000 |
Significant Agreements and Co_3
Significant Agreements and Contracts - Immunotherapy Research Collaboration Agreement (Details) - USD ($) $ in Thousands | Mar. 07, 2016 | Apr. 30, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||||
Stock-based compensation | $ 6,206 | $ 4,952 | $ 4,741 | ||
Acquisition consideration payable | 11,312 | 53,209 | |||
Acquired in-process research and development | 11,304 | 26,102 | 45,000 | ||
TNK Therapeutics | |||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||||
Gross proceed from shares issued | $ 10,000 | ||||
Roger Williams Medical Center | |||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||||
Upfront payment period for recognition | 5 years | ||||
Acquired in-process research and development | $ 400 | $ 700 | $ 500 | ||
Roger Williams Medical Center | Common class A | TNK Therapeutics | |||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||||
Stock-based compensation | $ 6,000 | ||||
Gross proceed from shares issued | 20,000 | ||||
Acquisition consideration payable | $ 3,400 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Summary of Company's Identifiable Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 73,654 | $ 75,375 |
Accumulated Amortization | 7,371 | 4,362 |
Intangibles, net | 66,283 | 71,013 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1,585 | 1,585 |
Accumulated Amortization | 1,373 | 1,091 |
Intangibles, net | 212 | 494 |
Acquired technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 3,410 | 3,410 |
Accumulated Amortization | 885 | 709 |
Intangibles, net | 2,525 | 2,701 |
Acquired in-process research and development | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 35,834 | 37,660 |
Accumulated Amortization | 366 | 0 |
Intangibles, net | 35,468 | 37,660 |
Patent rights | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 32,720 | 32,720 |
Accumulated Amortization | 4,742 | 2,562 |
Intangibles, net | 27,978 | $ 30,158 |
Assembled workforce | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 105 | |
Accumulated Amortization | 5 | |
Intangibles, net | $ 100 |
Significant Agreements and Co_4
Significant Agreements and Contracts - License Agreement with NantCell (Details) - USD ($) $ in Thousands, shares in Millions | 1 Months Ended | ||
Apr. 30, 2015 | Dec. 31, 2018 | Dec. 31, 2017 | |
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||
Cost-method investments, aggregate carrying amount | $ 237,008 | $ 237,008 | |
Nant Cell | |||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||
Deferred revenue | $ 10,000 | ||
Common stock received (in shares) | 10 | ||
Vested equity received | $ 100,000 | ||
Cost-method investments, aggregate carrying amount | $ 100,000 | ||
Nant Cell | Maximum | |||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||
Royalty rate percent of net sales | (5.00%) |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Schedule of Estimated Future Amortization Expense Related to Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2019 | $ 3,866 | |
2020 | 3,866 | |
2021 | 4,920 | |
2022 | 4,920 | |
2023 | 4,915 | |
Thereafter | 43,796 | |
Intangibles, net | $ 66,283 | $ 71,013 |
Significant Agreements and Co_5
Significant Agreements and Contracts - NIH Grants (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Jun. 30, 2014 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Research and Development Arrangement, Contract to Perform for Others [Line Items] | ||||
Grant revenue recognized as the related costs and expenses incurred | $ 21,193 | $ 151,856 | $ 8,152 | |
Staph Grant III Award | ||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | ||||
Period of grant | 2 years | |||
Period of grant subsequently extended | 1 year | |||
Amount of grant awards | $ 1,000 | |||
Grant | ||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | ||||
Grant revenue recognized as the related costs and expenses incurred | 356 | 206 | $ 1,033 | |
Grant | Staph Grant III Award | ||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | ||||
Grant revenue recognized as the related costs and expenses incurred | 0 | $ 200 | ||
Other Grants | ||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | ||||
Grant revenue recognized as the related costs and expenses incurred | $ 400 |
Loan and Security Agreement a_3
Loan and Security Agreement and Convertible Notes - Hercules Capital, Inc. (Details) - USD ($) | Dec. 21, 2017 | Nov. 06, 2017 | Mar. 23, 2017 | Mar. 15, 2017 | Nov. 23, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2017 |
Debt Instrument [Line Items] | |||||||||
Face value of loan | $ 50,000,000 | ||||||||
Payment of backend fee | $ 5,725,000 | 0 | $ 0 | ||||||
Warrant received to purchase aggregate of common stock - shares | 460,123 | ||||||||
Warrant received to purchase aggregate of common stock - exercise price | $ 4.89 | ||||||||
Warrants exercisable | 306,748 | ||||||||
Loss on debt extinguishment | $ 8,089,000 | $ 4,275,000 | $ 222,000 | ||||||
Term Loan | |||||||||
Debt Instrument [Line Items] | |||||||||
Amended and restated principal amount of loan agreement | $ 75,000,000 | ||||||||
Payment of backend fee | $ 1,500,000 | ||||||||
Repayment of loan | $ 10,000,000 | $ 20,000,000 | |||||||
Loss on debt extinguishment | $ 4,300,000 | ||||||||
Oaktree Term Loan | |||||||||
Debt Instrument [Line Items] | |||||||||
Face value of loan | $ 50,000,000 | ||||||||
Loan and Security Agreement | |||||||||
Debt Instrument [Line Items] | |||||||||
Unrestricted cash covenant requirement for long term debt | $ 20,000,000 | ||||||||
Amended Loan And Security Agreement | |||||||||
Debt Instrument [Line Items] | |||||||||
Unrestricted cash covenant requirement for long term debt | $ 8,000,000 |
Loan and Security Agreement a_4
Loan and Security Agreement and Convertible Notes - 2018 Chinese Yuan Loan (Details) | Jun. 30, 2018 | Mar. 31, 2018USD ($) | Mar. 31, 2018CNY (¥) | Dec. 31, 2017USD ($) |
Debt Instrument [Line Items] | ||||
Face value of loan amount | $ 50,000,000 | |||
Chinese Yuan Term Loan | ||||
Debt Instrument [Line Items] | ||||
Face value of loan amount | $ 1,600,000 | ¥ 10,000,000 | ||
Stated interest rate on debt instrument | 5.00% |
Loan and Security Agreement a_5
Loan and Security Agreement and Convertible Notes - 2016 Private Investment in Public Entity Financing (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 31, 2016 | Jun. 07, 2016 | May 02, 2016 | Apr. 03, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | |||||||
Aggregate purchase price of common stock warrants & warrants | $ 83,610 | $ 57,928 | $ 108,301 | ||||
ABG Purchase Agreement | Private Placement | |||||||
Debt Instrument [Line Items] | |||||||
Aggregate purchase price of common stock warrants & warrants | $ 50,000 | ||||||
Common stock agreed to issue and sell (in shares) | 9,009,005 | ||||||
Warrants to purchase common stock (in shares) | 2,702,700 | ||||||
Warrant exercise price per share (USD per share) | $ 8.50 | ||||||
Warrant exercisable period | 3 years | ||||||
ABG Purchase Agreement | Private Placement | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Issuance of securities for resale, period | 30 days | ||||||
ABG Purchasers, Beijing Shijilongxin, and Frejoy | |||||||
Debt Instrument [Line Items] | |||||||
Common stock agreed to issue and sell (in shares) | 25,225,221 | ||||||
Warrants to purchase common stock (in shares) | 5,055,642 | ||||||
Gross proceeds of common stock and warrants | $ 86,500 | ||||||
Common stock price per share (USD per share) | $ 5.55 | ||||||
Closed consideration of common stock and warrants | $ 150,000 | ||||||
Aggregate principal amount | $ 53,500 | ||||||
Beijing Shijilongxin Investment Co Ltd | Additional Purchase Agreements | Private Placement | |||||||
Debt Instrument [Line Items] | |||||||
Aggregate purchase price of common stock warrants & warrants | $ 45,000 | ||||||
Common stock agreed to issue and sell (in shares) | 8,108,108 | ||||||
Warrants to purchase common stock (in shares) | 1,176,471 | ||||||
FREJOY Investment Management Co Ltd | Additional Purchase Agreements | Private Placement | |||||||
Debt Instrument [Line Items] | |||||||
Aggregate purchase price of common stock warrants & warrants | $ 45,000 | ||||||
Common stock agreed to issue and sell (in shares) | 8,108,108 | ||||||
Warrants to purchase common stock (in shares) | 1,176,471 | ||||||
Yuhan Corporation | Private Placement | |||||||
Debt Instrument [Line Items] | |||||||
Common stock agreed to issue and sell (in shares) | 1,801,802 | ||||||
Warrants to purchase common stock (in shares) | 235,294 | ||||||
Warrant exercise price per share (USD per share) | $ 8.50 | ||||||
Warrant exercisable period | 3 years | ||||||
Gross proceeds of common stock and warrants | $ 10,000 | ||||||
Common stock price per share (USD per share) | $ 5.55 | ||||||
Yuhan Corporation | Additional Purchase Agreements | Private Placement | |||||||
Debt Instrument [Line Items] | |||||||
Aggregate purchase price of common stock warrants & warrants | $ 10,000 | ||||||
Common stock agreed to issue and sell (in shares) | 1,801,802 | ||||||
Warrants to purchase common stock (in shares) | 235,294 | ||||||
Warrant exercise price per share (USD per share) | $ 8.50 | ||||||
Warrant exercisable period | 3 years | ||||||
Investors | Cancellation and Forfeiture Agreements | |||||||
Debt Instrument [Line Items] | |||||||
Common stock agreed to issue and sell (in shares) | 7,838,259 | ||||||
Common stock shares forfeited (in shares) | 1,137,316 | ||||||
Investors | Cancellation and Forfeiture Agreements | Secured Promissory Notes | |||||||
Debt Instrument [Line Items] | |||||||
Outstanding balance of promissory note forfeited | $ 43,500 |
Loan and Security Agreement a_6
Loan and Security Agreement and Convertible Notes - 2017 Securities Purchase Agreement in Private Placement (Details) - USD ($) | May 17, 2018 | Dec. 21, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | |||||
Face value of loan | $ 50,000,000 | ||||
Interest expense | $ 57,631,000 | 4,980,000 | $ 1,610,000 | ||
Debt discount | $ 44,800,000 | ||||
Debt discount allocated to warrant | 12,700,000 | 12,669,000 | |||
Debt beneficial conversion feature | 32,100,000 | $ 32,062,000 | |||
Convertible Debt | |||||
Debt Instrument [Line Items] | |||||
Face value of loan | 37,849,000 | ||||
Debt discount allocated to warrant | $ 14,804,000 | ||||
Convertible Debt | Convertible Notes | |||||
Debt Instrument [Line Items] | |||||
Interest paid | $ 1,000,000 | ||||
Interest expense | $ 44,300,000 | ||||
Private Placement | Convertible Debt | Convertible Notes | |||||
Debt Instrument [Line Items] | |||||
Face value of loan | $ 50,000,000 | ||||
Stated interest rate on debt instrument | 5.00% | ||||
If converted - outstanding principal threshold amount | $ 4,000,000 | ||||
Debt conversion price (USD per share) | $ 2.26875 | ||||
2017 Warrants | Private Placement | |||||
Debt Instrument [Line Items] | |||||
Number of common stock shares called by warrants (in shares) | 12,121,210 | ||||
Warrant exercise price per share (USD per share) | $ 2.61 | ||||
Warrant exercisable period | 5 years 6 months | ||||
Common Stock | |||||
Debt Instrument [Line Items] | |||||
Issuance of common stock for conversion of notes payable (in shares) | 22,038,565 | 22,038,565 | |||
Fair Value | Private Placement | Convertible Debt | Convertible Notes | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, fair value disclosure | $ 89,500,000 | ||||
Carrying value | Private Placement | Convertible Debt | Convertible Notes | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, fair value disclosure | $ 5,200,000 |
Loan and Security Agreement a_7
Loan and Security Agreement and Convertible Notes - Schedule of Long-Term Debt and Unamortized Discount Balances (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||
Dec. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Nov. 07, 2018 | Sep. 07, 2018 | Nov. 23, 2016 | |
Debt Instrument [Line Items] | |||||||
Face value of loan | $ 50,000,000 | ||||||
Unamortized debt discount | $ (12,700,000) | $ (12,700,000) | (12,669,000) | ||||
Debt discount - beneficial conversion feature | (32,100,000) | (32,062,000) | |||||
Capitalized debt issuance costs | (84,000) | ||||||
Amortization of debt issuance costs and debt discount | 550,000 | 477,000 | $ 0 | ||||
Accretion of debt discount | 26,000 | ||||||
Accretion of debt issuance costs and other | 0 | ||||||
Long-term debt | $ 5,211,000 | ||||||
Convertible Debt | |||||||
Debt Instrument [Line Items] | |||||||
Face value of loan | 37,849,000 | 37,849,000 | |||||
Unamortized debt discount | (14,804,000) | (14,804,000) | |||||
Accretion of debt discount | 515,000 | ||||||
Long-term debt | 23,560,000 | 23,560,000 | |||||
Senior Notes | |||||||
Debt Instrument [Line Items] | |||||||
Face value of loan | $ 224,000,000 | ||||||
Senior Secured Notes, Due 2026 | Scilex Pharmaceuticals, Inc | Senior Notes | |||||||
Debt Instrument [Line Items] | |||||||
Face value of loan | 224,000,000 | 224,000,000 | |||||
Unamortized debt discount | (84,000,000) | (84,000,000) | |||||
Capitalized debt issuance costs | (5,748,000) | (5,748,000) | |||||
Amortization of debt issuance costs and debt discount | 6,800,000 | ||||||
Accretion of debt discount | 6,376,000 | ||||||
Accretion of debt issuance cost | 435,000 | ||||||
Long-term debt | 141,063,000 | 141,063,000 | |||||
Oaktree Term Loan | |||||||
Debt Instrument [Line Items] | |||||||
Face value of loan | $ 50,000,000 | ||||||
Oaktree Capital Management, L.P. | Oaktree Term Loan | |||||||
Debt Instrument [Line Items] | |||||||
Face value of loan | 100,000,000 | 100,000,000 | $ 100,000,000 | ||||
Unamortized debt discount | (26,659,000) | (26,659,000) | |||||
Capitalized debt issuance costs | (6,658,000) | (6,658,000) | |||||
Amortization of debt issuance costs and debt discount | 500,000 | 526,000 | |||||
Long-term debt | $ 67,209,000 | $ 67,209,000 |
Loan and Security Agreement a_8
Loan and Security Agreement and Convertible Notes - 2018 Securities Purchase Agreement in Private Placement and Amendment to Warrants (Details) - USD ($) | Nov. 07, 2018 | Jun. 13, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Mar. 26, 2018 |
Debt Instrument [Line Items] | ||||||
Face value of loan | $ 50,000,000 | |||||
Debt discount allocated to warrant | $ 12,700,000 | 12,669,000 | ||||
Debt beneficial conversion feature | 32,100,000 | 32,062,000 | ||||
Warrants issued in connection with convertible notes | 9,646,000 | 12,669,000 | ||||
Loss on debt extinguishment | 8,089,000 | 4,275,000 | $ 222,000 | |||
Long-term debt | 5,211,000 | |||||
Long-term debt, excluding current maturities | 223,136,000 | 5,211,000 | ||||
Convertible Debt | ||||||
Debt Instrument [Line Items] | ||||||
Face value of loan | 37,849,000 | |||||
Debt discount allocated to warrant | 14,804,000 | |||||
Loss on debt extinguishment | $ 6,100,000 | |||||
Long-term debt | 23,560,000 | |||||
Interest expense | 1,000,000 | |||||
Convertible Debt | March 2018 Notes | ||||||
Debt Instrument [Line Items] | ||||||
Face value of loan | $ 120,500,000 | |||||
Convertible Debt | March 2018 Notes, Amendment | ||||||
Debt Instrument [Line Items] | ||||||
Face value of loan | $ 37,848,750 | |||||
If converted - outstanding principal threshold amount | $ 4,000,000 | |||||
Debt conversion price (USD per share) | $ 7.0125 | |||||
Debt discount allocated to warrant | 21,600,000 | |||||
Debt beneficial conversion feature | 12,000,000 | |||||
June 2018 Warrants | Convertible Debt | March 2018 Notes, Amendment | ||||||
Debt Instrument [Line Items] | ||||||
Debt discount allocated to warrant | $ 9,600,000 | |||||
June 2018 Warrants, Amendment | ||||||
Debt Instrument [Line Items] | ||||||
Warrants issued in connection with convertible notes | 1,916,000 | $ 0 | $ 0 | |||
Private Placement | March 2018 Warrant | ||||||
Debt Instrument [Line Items] | ||||||
Number of common stock shares called by warrants (in shares) | 8,591,794 | |||||
Warrant exercise price per share (USD per share) | $ 8.77 | |||||
Private Placement | June 2018 Warrants | ||||||
Debt Instrument [Line Items] | ||||||
Number of common stock shares called by warrants (in shares) | 2,698,662 | |||||
Warrant exercise price per share (USD per share) | $ 3.28 | |||||
Private Placement | June 2018 Warrants, Amendment | ||||||
Debt Instrument [Line Items] | ||||||
Warrant exercise price per share (USD per share) | $ 3.28 | |||||
Warrants issued in connection with convertible notes | 1,900,000 | |||||
Fair Value | Significant Other Observable Inputs (Level 2) | Convertible Debt | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt, fair value disclosure | $ 23,100,000 | 15,800,000 | ||||
Carrying value | Significant Other Observable Inputs (Level 2) | Convertible Debt | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt, fair value disclosure | $ 17,000,000 | $ 23,600,000 |
Loan and Security Agreement a_9
Loan and Security Agreement and Convertible Notes - 2018 Purchase Agreement and Indenture for Scilex (Details) - USD ($) | Sep. 07, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||||
Face value of loan | $ 50,000,000 | |||
Proceeds from issuance of senior long-term debt | $ 140,000,000 | 0 | $ 0 | |
Amortization of debt issuance costs and debt discount | 550,000 | $ 477,000 | $ 0 | |
Standby Letters of Credit | ||||
Debt Instrument [Line Items] | ||||
Maximum exposure under guarantor obligations | $ 35,000,000 | |||
Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Face value of loan | 224,000,000 | |||
Scilex Pharmaceuticals, Inc | Senior Notes | Senior Secured Notes, Due 2026 | ||||
Debt Instrument [Line Items] | ||||
Face value of loan | 224,000,000 | |||
Proceeds from issuance of senior long-term debt | 140,000,000 | |||
Senior Notes | $ 89,300,000 | |||
Amortization of debt issuance costs and debt discount | 6,800,000 | |||
ZTlido | Scilex Pharmaceuticals, Inc | Senior Notes | Senior Secured Notes, Due 2026 | ||||
Debt Instrument [Line Items] | ||||
Percentage of outstanding principal holders can declare debt payable upon default | 25.00% | |||
Percentage of outstanding payable due upon default | 100.00% | |||
Compensating balance | $ 35,000,000 | |||
Percentage of principal amount outstanding holders need as an acceptance to replace letter of credit | 80.00% | |||
ZTlido | Scilex Pharmaceuticals, Inc | Senior Notes | Senior Secured Notes, Due 2026 | Prior to August 15, 2026 | ||||
Debt Instrument [Line Items] | ||||
Period of notice for debt redemption | 30 days | |||
Redemption price as a percentage of outstanding principal | 100.00% | |||
ZTlido | Scilex Pharmaceuticals, Inc | Senior Notes | Senior Secured Notes, Due 2026 | Change of control | ||||
Debt Instrument [Line Items] | ||||
Redemption price as a percentage of outstanding principal | 101.00% | |||
Fair Value | Scilex Pharmaceuticals, Inc | Senior Notes | Senior Secured Notes, Due 2026 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, fair value disclosure | 122,800,000 | |||
Carrying value | Scilex Pharmaceuticals, Inc | Senior Notes | Senior Secured Notes, Due 2026 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, fair value disclosure | $ 141,100,000 | |||
February 15, 2019 - March 31, 2021 | ZTlido | Scilex Pharmaceuticals, Inc | Senior Notes | Senior Secured Notes, Due 2026 | Minimum | ||||
Debt Instrument [Line Items] | ||||
Quarterly principal payment as a percentage of net sales | 10.00% | |||
February 15, 2019 - March 31, 2021 | ZTlido | Scilex Pharmaceuticals, Inc | Senior Notes | Senior Secured Notes, Due 2026 | Maximum | ||||
Debt Instrument [Line Items] | ||||
Quarterly principal payment as a percentage of net sales | 20.00% | |||
Market approval by March 31, 2021 | ZTlido | Scilex Pharmaceuticals, Inc | Senior Notes | Senior Secured Notes, Due 2026 | Minimum | ||||
Debt Instrument [Line Items] | ||||
Quarterly principal payment as a percentage of net sales | 15.00% | |||
Market approval by March 31, 2021 | ZTlido | Scilex Pharmaceuticals, Inc | Senior Notes | Senior Secured Notes, Due 2026 | Maximum | ||||
Debt Instrument [Line Items] | ||||
Quarterly principal payment as a percentage of net sales | 25.00% | |||
October 1, 2022 - September 30, 2023 | ZTlido | Scilex Pharmaceuticals, Inc | Senior Notes | Senior Secured Notes, Due 2026 | Minimum | ||||
Debt Instrument [Line Items] | ||||
Additional principal payments, sales threshold | 60.00% | |||
February 15, 2022 | ZTlido | Scilex Pharmaceuticals, Inc | Senior Notes | Senior Secured Notes, Due 2026 | ||||
Debt Instrument [Line Items] | ||||
Aggregate principal payment increase amount if cumulative net sales are not met | $ 28,000,000 | |||
February 15, 2022 | ZTlido | Scilex Pharmaceuticals, Inc | Senior Notes | Senior Secured Notes, Due 2026 | Minimum | ||||
Debt Instrument [Line Items] | ||||
Additional principal payments, sales threshold | 95.00% | |||
October 1, 2022 - September 30, 2023 | ZTlido | Scilex Pharmaceuticals, Inc | Senior Notes | Senior Secured Notes, Due 2026 | Minimum | ||||
Debt Instrument [Line Items] | ||||
Additional principal payments, sales threshold | 80.00% |
Loan and Security Agreement _10
Loan and Security Agreement and Convertible Notes - Future Minimum Payments (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 21, 2017 |
Debt Instrument [Line Items] | |||
Unamortized debt discount | $ (44,800) | ||
Total minimum payment | $ 5,211 | ||
Current portion | $ (10,150) | 0 | |
Long-term debt, excluding current maturities | 223,136 | $ 5,211 | |
Scilex Pharmaceuticals, Inc | Senior Secured Notes, Due 2026 | Senior Notes | |||
Debt Instrument [Line Items] | |||
Amounts due in 2019 | 8,696 | ||
Amount due in 2020 | 30,010 | ||
Amount due in 2021 | 52,474 | ||
Amount due in 2022 | 99,153 | ||
Amount due in 2023 | 33,667 | ||
Total future minimum payments | 224,000 | ||
Unpaid interest | (77,624) | ||
Unamortized debt discount | (5,313) | ||
Total minimum payment | 141,063 | ||
Current portion | (8,696) | ||
Long-term debt, excluding current maturities | $ 132,367 |
Loan and Security Agreement _11
Loan and Security Agreement and Convertible Notes Loan and Security Agreement and Convertible Notes - 2018 Oaktree Term Loan Agreement (Details) - USD ($) | Nov. 07, 2018 | Dec. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Nov. 23, 2016 |
Debt Instrument [Line Items] | ||||||
Face value of loan amount | $ 50,000,000 | |||||
Amortization of debt issuance costs and debt discount | $ 550,000 | $ 477,000 | $ 0 | |||
Oaktree Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Face value of loan amount | $ 50,000,000 | |||||
Oaktree Capital Management, L.P. | Oaktree Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Face value of loan amount | $ 100,000,000 | $ 100,000,000 | 100,000,000 | |||
Basis spread on variable rate | 7.00% | |||||
Proceeds from issuance of debt, net of issuance costs | $ 91,300,000 | |||||
Interest expense | 1,400,000 | |||||
Amortization of debt issuance costs and debt discount | 500,000 | 526,000 | ||||
Oaktree Capital Management, L.P. | Term Loan Tranche Two | ||||||
Debt Instrument [Line Items] | ||||||
Face value of loan amount | $ 50,000,000 | |||||
Initial Warrants | Oaktree Capital Management, L.P. | ||||||
Debt Instrument [Line Items] | ||||||
Number of common stock shares called by warrants (in shares) | 6,288,985 | |||||
Warrant exercise price per share (USD per share) | $ 3.28 | |||||
Fair Value | Oaktree Capital Management, L.P. | Oaktree Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, fair value disclosure | 64,000,000 | 64,000,000 | ||||
Carrying value | Oaktree Capital Management, L.P. | Oaktree Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, fair value disclosure | $ 67,200,000 | $ 67,200,000 |
Loan and Security Agreement _12
Loan and Security Agreement and Convertible Notes - 2018 Short-term Bridge Loan (Details) - USD ($) $ in Thousands | Sep. 10, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Short-term Debt [Line Items] | ||||
Proceeds from short-term debt | $ 19,675 | $ 0 | $ 0 | |
Bridge Loan | ||||
Short-term Debt [Line Items] | ||||
Proceeds from short-term debt | $ 19,600 | |||
Commitment fee on short-term debt | $ 300 | |||
Stated interest rate on debt instrument | 8.50% |
Stockholders' Equity - 2009 Non
Stockholders' Equity - 2009 Non-Employee Director Grants (Details) - Non Employee Directors - 2009 Non-Employee Director Grants - $ / shares | Sep. 30, 2009 | Dec. 31, 2018 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common stock reserved for issuance (in shares) | 8,000 | |
Outstanding options vesting anniversary period | 1 year | |
Shares available for grant (in shares) | 0 | |
Option outstanding (in shares) | 3,200 | |
Weighted-average exercise price (USD per share) | $ 1.12 | |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Outstanding options exercisable period | 10 years |
Stockholders' Equity - 2009 Sto
Stockholders' Equity - 2009 Stock Incentive Plan (Details) - 2009 Stock Incentive Plan - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Jul. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common stock reserved for issuance (in shares) | 18,860,000 | |||
Outstanding options exercisable period | 10 years | |||
Employee option grants vested | 25.00% | |||
Aggregate intrinsic value of options exercised | $ 133 | $ 0 | $ 194 | |
Unrecognized compensation cost related to unvested stock option grants | $ 16,857 | |||
Period for recognized compensation cost | 3 years | |||
Employee and Director | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation | $ 5,139 | 4,423 | 4,354 | |
Non-employee consultants | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation | $ 1,055 | $ 228 | $ 198 | |
Employee Stock Option | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Outstanding options vesting anniversary period | 3 years |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Stock Option Activity (Details) - 2009 Stock Incentive Plan - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Options Outstanding | ||
Option Outstanding Beginning Balance (in shares) | 6,343,400 | |
Options Granted (in shares) | 4,737,800 | |
Options Canceled (in shares) | (500,435) | |
Options Exercised (in shares) | (57,690) | |
Option Outstanding Ending Balance (in shares) | 10,523,075 | |
Weighted- Average Exercise Price | ||
Weighted Average Exercise Price, Beginning Balance (USD per share) | $ 4.74 | |
Options Granted (USD per share) | 5.23 | |
Options Canceled (USD per share) | 5.84 | |
Options Exercised (USD per share) | 3.69 | |
Weighted Average Exercise Price, Ending Balance (USD per share) | $ 4.91 | |
Aggregate Intrinsic Value, Beginning Balance | $ 1,723 | $ 6,290 |
Stockholders' Equity - Fair Val
Stockholders' Equity - Fair Value of Employee Stock Options (Details) - Employee Stock Option - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted-average grant date fair value | $ 3.65 | $ 1.28 | $ 5.86 |
Dividend yield | 0.00% | 0.00% | 0.00% |
Volatility | 81.00% | 81.00% | 75.00% |
Risk-free interest rate | 2.87% | 1.92% | 1.49% |
Expected life of options | 6 years 1 month 6 days | 6 years 1 month 6 days | 6 years 1 month 6 days |
Stockholders' Equity - Summar_2
Stockholders' Equity - Summary of Common Stock Reserved for Future Issuance (Details) | Dec. 31, 2018shares |
Class of Stock [Line Items] | |
Common stock reserved for future issuance (in shares) | 49,440,048 |
Loan and Security Agreement | Outstanding warrants | |
Class of Stock [Line Items] | |
Common stock reserved for future issuance (in shares) | 6,354,877 |
Hercules Securities Agreement | Outstanding warrants | |
Class of Stock [Line Items] | |
Common stock reserved for future issuance (in shares) | 306,748 |
Convertible Notes | Outstanding warrants | |
Class of Stock [Line Items] | |
Common stock reserved for future issuance (in shares) | 14,819,872 |
Private Placement | Outstanding warrants | |
Class of Stock [Line Items] | |
Common stock reserved for future issuance (in shares) | 4,153,620 |
Non-Employee Director Plan | Employee Stock Option | |
Class of Stock [Line Items] | |
Common stock reserved for future issuance (in shares) | 3,200 |
2009 Stock Incentive Plan | |
Class of Stock [Line Items] | |
Common stock reserved for future issuance (in shares) | 18,324,406 |
Shares issuable upon the conversion of the 2018 Notes | |
Class of Stock [Line Items] | |
Common stock reserved for future issuance (in shares) | 5,397,325 |
Assignment Agreement | |
Class of Stock [Line Items] | |
Common stock reserved for future issuance (in shares) | 80,000 |
Stockholders' Equity - 2017 Sto
Stockholders' Equity - 2017 Stock Option Plans (Details) - shares | 1 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common stock reserved for future issuance (in shares) | 49,440,048 | |
2017 Stock Options Plans | Scilex Pharmaceuticals, Inc | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options Granted (in shares) | 1,000,000 | |
Options canceled in the period (in shares) | 1,600,000 | |
Option outstanding (in shares) | 700,000 | |
2017 Stock Options Plans | Scilex Pharmaceuticals, Inc | Common class A | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common stock reserved for future issuance (in shares) | 4,000,000 | |
2017 Stock Options Plans | Scilex Pharmaceuticals, Inc | Vesting in the first year [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting right (percent) | 25.00% | |
2017 Stock Options Plans | Scilex Pharmaceuticals, Inc | Vesting per quarter [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting right (percent) | 2.0833% |
Stockholders' Equity - 2015 Sto
Stockholders' Equity - 2015 Stock Option Plans (Details) - USD ($) $ / shares in Units, $ in Thousands | Aug. 29, 2017 | Nov. 30, 2015 | Oct. 31, 2015 | May 31, 2015 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Common stock reserved for issuance (in shares) | 49,440,048 | ||||||
2015 Stock Incentive Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Accelerated compensation cost | $ 281 | ||||||
2015 Stock Incentive Plan | Director | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock-based compensation | $ 0 | $ 166 | |||||
Unrecognized compensation cost related to unvested stock option and warrant grants | $ 0 | ||||||
Period for recognized compensation cost | 3 years 6 months | ||||||
2015 Stock Incentive Plan | Non-employee consultants | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock-based compensation | $ 655 | $ 156 | |||||
2015 Stock Incentive Plan | Directors and non-employee consultants | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Dividend yield | 0.00% | ||||||
Risk-free interest rate, minimum | 1.39% | ||||||
Risk-free interest rate, maximum | 2.24% | ||||||
Expected volatility, minimum | 76.00% | ||||||
Expected volatility, maximum | 77.00% | ||||||
2015 Stock Incentive Plan | Minimum | Directors and non-employee consultants | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Expected life of options | 4 years | ||||||
2015 Stock Incentive Plan | Maximum | Directors and non-employee consultants | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Expected life of options | 6 years 1 month 6 days | ||||||
2015 Stock Incentive Plan | TNK Therapeutics | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Options Granted (in shares) | 500,000 | 3,600,000 | |||||
Stock options, contractual term | 10 years | ||||||
Options Canceled (in shares) | 2,100,000 | ||||||
Option outstanding (in shares) | 900,000 | ||||||
Warrant shares exercisable | 4,000,000 | ||||||
Warrant exercise price per share (USD per share) | $ 0.01 | ||||||
2015 Stock Incentive Plan | TNK Therapeutics | Minimum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Outstanding options vesting anniversary period | 2 years | ||||||
Warrant exercisable period | 40 months | ||||||
2015 Stock Incentive Plan | TNK Therapeutics | Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Outstanding options vesting anniversary period | 4 years | ||||||
Warrant exercisable period | 4 years | ||||||
2015 Stock Incentive Plan | TNK Therapeutics | Common class A | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Common stock reserved for issuance (in shares) | 10,000,000 | ||||||
2015 Stock Incentive Plan | TNK Therapeutics | Class B | CEO | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Warrant granted to purchase common stock (in shares) | 9,500,000 | ||||||
Voting rights, number of shares per vote | 10 | ||||||
2015 Stock Incentive Plan | L A Cell | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Options Granted (in shares) | 2,900,000 | ||||||
Stock options, contractual term | 10 years | ||||||
Options Canceled (in shares) | 1,700,000 | ||||||
Option outstanding (in shares) | 300,000 | ||||||
Warrant shares exercisable | 4,000,000 | ||||||
Warrant exercise price per share (USD per share) | $ 0.01 | ||||||
2015 Stock Incentive Plan | L A Cell | Minimum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Outstanding options vesting anniversary period | 2 years | ||||||
Warrant exercisable period | 40 months | ||||||
2015 Stock Incentive Plan | L A Cell | Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Outstanding options vesting anniversary period | 4 years | ||||||
Warrant exercisable period | 4 years | ||||||
2015 Stock Incentive Plan | L A Cell | Common class A | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Common stock reserved for issuance (in shares) | 10,000,000 | ||||||
2015 Stock Incentive Plan | L A Cell | Class B | CEO | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Warrant granted to purchase common stock (in shares) | 9,500,000 | ||||||
Voting rights, number of shares per vote | 10 | ||||||
2015 Stock Incentive Plan | Concortis Biosystems, Corp. | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Options Granted (in shares) | 1,800,000 | ||||||
Stock options, contractual term | 10 years | ||||||
Options Canceled (in shares) | 1,700,000 | ||||||
Option outstanding (in shares) | 0 | ||||||
Warrant shares exercisable | 4,000,000 | ||||||
Warrant exercise price per share (USD per share) | $ 0.25 | ||||||
2015 Stock Incentive Plan | Concortis Biosystems, Corp. | Minimum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Outstanding options vesting anniversary period | 2 years | ||||||
Warrant exercisable period | 40 months | ||||||
2015 Stock Incentive Plan | Concortis Biosystems, Corp. | Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Outstanding options vesting anniversary period | 4 years | ||||||
Warrant exercisable period | 4 years | ||||||
2015 Stock Incentive Plan | Concortis Biosystems, Corp. | Common class A | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Common stock reserved for issuance (in shares) | 10,000,000 | ||||||
2015 Stock Incentive Plan | Concortis Biosystems, Corp. | Class B | CEO | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Warrant granted to purchase common stock (in shares) | 9,500,000 | ||||||
Voting rights, number of shares per vote | 10 | ||||||
2015 Stock Incentive Plan | Scintilla Pharmaceuticals, Inc. | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock options, contractual term | 10 years | ||||||
Options Canceled (in shares) | 900,000 | ||||||
Option outstanding (in shares) | 0 | ||||||
Warrant shares exercisable | 4,000,000 | ||||||
Warrant exercise price per share (USD per share) | $ 0.01 | ||||||
2015 Stock Incentive Plan | Scintilla Pharmaceuticals, Inc. | Minimum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Outstanding options vesting anniversary period | 2 years | ||||||
Warrant exercisable period | 40 months | ||||||
2015 Stock Incentive Plan | Scintilla Pharmaceuticals, Inc. | Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Outstanding options vesting anniversary period | 4 years | ||||||
Warrant exercisable period | 4 years | ||||||
2015 Stock Incentive Plan | Scintilla Pharmaceuticals, Inc. | Common class A | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Common stock reserved for issuance (in shares) | 10,000,000 | ||||||
Options Granted (in shares) | 2,100,000 | ||||||
2015 Stock Incentive Plan | Scintilla Pharmaceuticals, Inc. | Class B | CEO | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Warrant granted to purchase common stock (in shares) | 9,500,000 | ||||||
Voting rights, number of shares per vote | 10 | ||||||
2015 Stock Incentive Plan | Sorrento Biologics, Inc. | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Options Granted (in shares) | 2,600,000 | ||||||
Stock options, contractual term | 10 years | ||||||
Options Canceled (in shares) | 1,400,000 | ||||||
Option outstanding (in shares) | 0 | ||||||
Warrant shares exercisable | 4,000,000 | ||||||
Warrant exercise price per share (USD per share) | $ 0.01 | ||||||
2015 Stock Incentive Plan | Sorrento Biologics, Inc. | Minimum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Outstanding options vesting anniversary period | 2 years | ||||||
Warrant exercisable period | 40 months | ||||||
2015 Stock Incentive Plan | Sorrento Biologics, Inc. | Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Outstanding options vesting anniversary period | 4 years | ||||||
Warrant exercisable period | 4 years | ||||||
2015 Stock Incentive Plan | Sorrento Biologics, Inc. | Common class A | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Common stock reserved for issuance (in shares) | 10,000,000 | ||||||
2015 Stock Incentive Plan | Sorrento Biologics, Inc. | Class B | CEO | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Warrant granted to purchase common stock (in shares) | 9,500,000 | ||||||
Voting rights, number of shares per vote | 10 |
Stockholders' Equity - 2014 Sto
Stockholders' Equity - 2014 Stock Option Plan (Details) - 2014 Stock Option Plan - Directors and consultants - Ark Animal Health, Inc. - USD ($) shares in Thousands | Aug. 29, 2017 | May 31, 2014 | Dec. 31, 2018 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options Granted (in shares) | 600 | ||
Outstanding options vesting anniversary period | 1 year | ||
Stock options, contractual term | 10 years | ||
Options Canceled (in shares) | 135 | ||
Option outstanding (in shares) | 88 | ||
Unrecognized compensation cost related to unvested stock option grants | $ 0 |
Derivative Liability (Details)
Derivative Liability (Details) - USD ($) | Oct. 13, 2015 | Mar. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2018 | Dec. 31, 2017 |
Derivative [Line Items] | |||||
Common stock, par value (USD per share) | $ 0.0001 | $ 0.0001 | |||
Loss on derivative liability | $ 3,400,000 | ||||
Gain on derivative liability | $ 5,500,000 | ||||
Derivative liability | $ 0 | ||||
NantKwest | |||||
Derivative [Line Items] | |||||
Number of common shares held (in shares) | 5,600,000 | ||||
Common stock, par value (USD per share) | $ 0.0001 | ||||
Call Option | |||||
Derivative [Line Items] | |||||
Contractual option premium associated with option agreement | $ 0 | ||||
Call Option | Cambridge Equities LP | |||||
Derivative [Line Items] | |||||
Underlying maximum shares (in shares) | 2,000,000 | ||||
Number of shares right to purchase (in shares) | 2,000,000 | ||||
Strike price per share (USD per share) | $ 15.295 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) $ in Thousands | Dec. 19, 2018USD ($) | Oct. 31, 2018USD ($) | Dec. 31, 2018USD ($)ft² | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Other Commitments [Line Items] | |||||
Rental expense paid | $ | $ 6,100 | $ 3,200 | $ 2,100 | ||
Corporate office and laboratory space | San Diego, California | |||||
Other Commitments [Line Items] | |||||
Leased office space | 130,584 | ||||
Corporate office and laboratory space | Suzhou, China | |||||
Other Commitments [Line Items] | |||||
Leased office space | 25,381 | ||||
Corporate office and laboratory space | New York, New York | |||||
Other Commitments [Line Items] | |||||
Leased office space | 4,550 | ||||
Corporate office and laboratory space | Atlanta, Georgia [Member] | |||||
Other Commitments [Line Items] | |||||
Leased office space | 3,432 | ||||
Laboratory and office space | San Diego, California | |||||
Other Commitments [Line Items] | |||||
Leased office space | 1,405 | ||||
Office space | San Diego, California | |||||
Other Commitments [Line Items] | |||||
Leased office space | 36,400 | ||||
Office space | Broomfield, CO | |||||
Other Commitments [Line Items] | |||||
Leased office space | 4,500 | ||||
Additional Corporate Office And Laboratory Space | San Diego, California | |||||
Other Commitments [Line Items] | |||||
Leased office space | 61,200 | ||||
Office, laboratory and storage space | Scotland | |||||
Other Commitments [Line Items] | |||||
Leased office space | 2,312 | ||||
Immunomedics Case | Settled Litigation | |||||
Other Commitments [Line Items] | |||||
Payments for legal settlements | $ | $ 2,350 | ||||
Cantor Fitzgerald & Co. | Settled Litigation | |||||
Other Commitments [Line Items] | |||||
Payments for legal settlements | $ | $ 1,000 |
Commitments and Contingencies_2
Commitments and Contingencies - Summary of Minimum Future Non-Cancelable Annual Operating Lease Obligations (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2019 | $ 6,396 |
2020 | 8,733 |
2021 | 8,011 |
2022 | 7,959 |
2023 | 8,186 |
Thereafter | 52,425 |
Total | $ 91,710 |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Provision Expense (Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Current: | |||
Federal | $ (178) | $ (366) | $ (1,785) |
State | 23 | 14 | (600) |
Foreign | (44) | 30 | 0 |
Total current income tax expense (benefit) | (199) | (322) | (2,385) |
Deferred: | |||
Federal | (3,499) | (33,178) | 3,554 |
State | (2,421) | (2,538) | (2,065) |
Foreign | (155) | 0 | 0 |
Total deferred income tax expense (benefit) | (6,075) | (35,716) | 1,489 |
Income tax provision | $ (6,274) | $ (36,038) | $ (896) |
Income Taxes - Summary of Compo
Income Taxes - Summary of Components of Net Deferred Tax Liabilities and Related Valuation Allowance (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets: | ||
Amortization of intangibles | $ 27,075 | $ 21,862 |
Deferred revenue | 25,448 | 34,754 |
Tax credit carryforwards | 13,720 | 10,160 |
Net operating loss carryforwards | 43,542 | 21,172 |
Stock based compensation | 1,786 | 1,743 |
Accrued expenses and other | 14,037 | 1,877 |
Total deferred tax assets | 125,608 | 91,568 |
Less valuation allowance | (74,970) | (43,405) |
Total deferred tax assets | 50,638 | 48,163 |
Deferred tax liabilities: | ||
Amortization of intangibles | (12,739) | (15,225) |
Depreciation | (543) | (757) |
Investment in common stock | (46,772) | (47,716) |
Total deferred tax liabilities | (60,054) | (63,698) |
Net deferred tax assets / liabilities | $ (9,416) | $ (15,535) |
Income Taxes - Summary of Recon
Income Taxes - Summary of Reconciliation Between Federal Income Tax and Company Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Income tax expense (benefit) at federal statutory rate | $ (46,011) | $ (8,725) | |
State, net of federal tax benefit | (3,075) | (834) | |
Other permanent differences | 2,814 | 1,290 | |
Debt discount | 11,357 | 0 | |
Incentive stock compensation | 1,001 | 1,025 | |
Transaction costs | 102 | 408 | |
Other | 123 | 715 | |
Return to provision adjustment | (8) | (42) | |
Acquired in-process research and development | 677 | 71 | |
Change in Federal rate | 0 | 10,006 | |
Change in State rate | (453) | 810 | |
Research tax credits | (4,664) | (4,051) | |
Uncertain tax positions | 879 | 1,027 | |
Prior year true-ups and carrybacks | (889) | (1,095) | |
Stock compensation true-up | 308 | 1,788 | |
Change in valuation allowance | 31,565 | (38,431) | |
Income tax provision | $ (6,274) | $ (36,038) | $ (896) |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Operating Loss Carryforwards [Line Items] | ||
Valuation allowance | $ 74,970,000 | $ 43,405,000 |
Interest recognized | 0 | |
IRS | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforward | 169,700,000 | |
IRS | Research tax credit carryforward | ||
Operating Loss Carryforwards [Line Items] | ||
Research and development credits | 12,200,000 | |
State and local jurisdiction | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforward | 77,100,000 | |
State and local jurisdiction | Research tax credit carryforward | ||
Operating Loss Carryforwards [Line Items] | ||
Research and development credits | $ 6,100,000 |
Income Taxes - Summary of Rec_2
Income Taxes - Summary of Reconciliation of Unrecognized Tax Expense (Benefits) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |
Unrecognized tax benefits balance at December 31, 2017 | $ 3,883 |
Increase related to current year tax positions | 916 |
Increase related to prior year tax positions | 150 |
Decrease related to prior year tax positions | (597) |
Unrecognized tax benefits balance at December 31, 2018 | $ 4,352 |
Related Party Agreements and _2
Related Party Agreements and Other (Details) - USD ($) $ in Thousands, shares in Millions | 1 Months Ended | 3 Months Ended | ||||||
Jul. 31, 2015 | Jun. 30, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Jun. 12, 2017 | Nov. 08, 2016 | Mar. 31, 2016 | Apr. 30, 2015 | |
Related Party Transaction [Line Items] | ||||||||
Equity method investments | $ 27,980 | $ 32,999 | ||||||
ImmuneOncia Therapeutics, LLC | ||||||||
Related Party Transaction [Line Items] | ||||||||
Equity method investments | $ 2,700 | $ 6,800 | ||||||
Equity method investment ownership percentage | 49.00% | 49.00% | 49.00% | |||||
Celularity Inc | ||||||||
Related Party Transaction [Line Items] | ||||||||
Equity method investment ownership percentage | 25.00% | |||||||
NantBioScience, Inc. | ||||||||
Related Party Transaction [Line Items] | ||||||||
Number of common stock shares acquired | 1 | |||||||
Cost method investments | $ 10,000 | |||||||
Nant Cell | ||||||||
Related Party Transaction [Line Items] | ||||||||
Payments to acquire interest in joint venture | $ 40,000 | |||||||
Non-refundable up-front payment | 10,000 | |||||||
Vested equity received | $ 100,000 | |||||||
Yuhan Corporation | ||||||||
Related Party Transaction [Line Items] | ||||||||
Gross proceeds of common stock and warrants | $ 10,000 | |||||||
Scilex Pharmaceuticals, Inc | ||||||||
Related Party Transaction [Line Items] | ||||||||
Business acquisition, percentage of voting interests acquired | 72.00% | |||||||
Itochu | Scilex Pharmaceuticals, Inc | Itochu | ||||||||
Related Party Transaction [Line Items] | ||||||||
Noncontrolling interest ownership percentage | 19.30% |
401(k) Plan (Details)
401(k) Plan (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Retirement Benefits [Abstract] | |||
401(k) plan, Employer contribution amount | $ 898 | $ 658 | $ 424 |
Quarterly Financial Data (Una_3
Quarterly Financial Data (Unaudited) - Schedule of Quarterly Financial Data (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenues | $ 6,929 | $ 4,105 | $ 3,913 | $ 6,246 | $ 20,407 | $ 121,910 | $ 4,665 | $ 4,874 | $ 21,193 | $ 151,856 | |
Operating costs and expenses | 48,530 | 52,012 | 32,284 | 38,792 | 55,205 | 24,993 | 18,123 | 28,200 | 171,618 | 126,521 | $ 104,929 |
Net income (loss) attributable to Sorrento | $ (49,774) | $ (47,328) | $ (73,864) | $ (32,574) | $ 48,444 | $ (2,061) | $ (14,187) | $ (23,064) | $ (203,540) | $ 9,132 | $ (60,923) |
Net income (loss) per share - basic (USD per share) | $ (0.41) | $ (0.40) | $ (0.73) | $ (0.38) | $ 0.60 | $ (0.03) | $ (0.20) | $ (0.45) | $ (1.92) | $ 0.13 | $ (1.21) |
Net income (loss) per share - diluted (USD per share) | $ (0.41) | $ (0.40) | $ (0.73) | $ (0.38) | $ 0.58 | $ (0.03) | $ (0.20) | $ (0.45) | $ (1.92) | $ 0.13 | $ (1.21) |
Weighted-average shares - basic (in shares) | 121,552 | 117,021 | 100,563 | 84,941 | 80,486 | 76,887 | 70,302 | 50,886 | 106,150 | 69,742 | 50,360 |
Weighted-average shares - diluted (shares) | 121,552 | 117,021 | 100,563 | 84,941 | 82,996 | 76,888 | 70,302 | 50,886 | 106,150 | 70,381 | 50,360 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | |||||||||||
Net income (loss) | $ (49,774) | $ (47,328) | $ (73,864) | $ (32,574) | $ 48,444 | $ (2,061) | $ (14,187) | $ (23,064) | $ (203,540) | $ 9,132 | $ (60,923) |
Net Income Adjusted for Tax-Effected Interest on Convertible Notes | 0 | (71) | 0 | ||||||||
Adjusted Net Income | $ (203,540) | $ 9,061 | $ (60,923) | ||||||||
Incremental Weighted Average Shares Attributable to Dilutive Effect [Abstract] | |||||||||||
Denomiator for Basic Earnings Per Share (in shares) | 121,552 | 117,021 | 100,563 | 84,941 | 80,486 | 76,887 | 70,302 | 50,886 | 106,150 | 69,742 | 50,360 |
Stock Options (in shares) | 0 | 8 | 0 | ||||||||
Convertible Notes (in shares) | 0 | 604 | 0 | ||||||||
Convertible Notes - Warrants (in shares) | 0 | 27 | 0 | ||||||||
Denominator for Diluted Earnings per Share – Adjusted for Dilutive Securities (in shares) | 121,552 | 117,021 | 100,563 | 84,941 | 82,996 | 76,888 | 70,302 | 50,886 | 106,150 | 70,381 | 50,360 |
Net income (loss) per share - diluted (USD per share) | $ (0.41) | $ (0.40) | $ (0.73) | $ (0.38) | $ 0.58 | $ (0.03) | $ (0.20) | $ (0.45) | $ (1.92) | $ 0.13 | $ (1.21) |
Employee Stock Option | |||||||||||
Incremental Weighted Average Shares Attributable to Dilutive Effect [Abstract] | |||||||||||
Antidilutive securities excluded from computation of EPS (in shares) | 10,500 | 6,300 | 4,300 | ||||||||
Outstanding warrants | |||||||||||
Incremental Weighted Average Shares Attributable to Dilutive Effect [Abstract] | |||||||||||
Antidilutive securities excluded from computation of EPS (in shares) | 25,600 | 4,700 | 7,700 |
Schedule II - Valuation and Q_2
Schedule II - Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | $ 43,405 | $ 81,039 | $ 39,605 |
Reserves Acquired | 0 | 797 | 0 |
Additions | 31,565 | 0 | 41,434 |
Deductions | 0 | (38,431) | 0 |
Balance at End of Period | 74,970 | 43,405 | 81,039 |
Income tax valuation allowance | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | 43,405 | 81,039 | 39,605 |
Reserves Acquired | 0 | 797 | 0 |
Additions | 31,565 | 0 | 41,434 |
Deductions | 0 | (38,431) | 0 |
Balance at End of Period | $ 74,970 | $ 43,405 | $ 81,039 |
Uncategorized Items - srne-2018
Label | Element | Value |
Restricted Cash | us-gaap_RestrictedCash | $ 0 |
Restricted Cash | us-gaap_RestrictedCash | 0 |
Restricted Cash | us-gaap_RestrictedCash | $ 54,592,000 |