Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2020 | Oct. 23, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Trading Symbol | SRNE | |
Document Period End Date | Sep. 30, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Transition Report | false | |
Entity File Number | 001-36150 | |
Entity Registrant Name | SORRENTO THERAPEUTICS, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 33-0344842 | |
Entity Address, Address Line One | 4955 Directors Place | |
Entity Address, City or Town | San Diego | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 92121 | |
City Area Code | 858 | |
Local Phone Number | 203-4100 | |
Title of 12(b) Security | Common Stock, $0.0001 par value | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 262,938,148 | |
Entity Central Index Key | 0000850261 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 75,176 | $ 22,521 |
Restricted cash | 13,098 | |
Accounts receivables, net | 14,768 | 14,454 |
Inventory | 2,144 | 3,362 |
Prepaid expenses and other | 13,900 | 14,153 |
Total current assets | 105,988 | 67,588 |
Property and equipment, net | 29,454 | 29,888 |
Operating lease right-of-use assets | 44,833 | 46,384 |
Intangibles, net | 79,967 | 63,308 |
Goodwill | 38,298 | 38,298 |
Equity investments | 256,420 | 262,241 |
Restricted cash | 45,000 | 45,150 |
Other, net | 2,125 | 4,775 |
Total assets | 602,085 | 557,632 |
Current liabilities: | ||
Accounts payable | 22,849 | 27,630 |
Accrued payroll and related benefits | 17,930 | 15,914 |
Accrued expenses | 24,562 | 18,728 |
Current portion of deferred revenue | 4,170 | 3,643 |
Acquisition consideration payable | 398 | 908 |
Current portion of derivative liabilities | 8,800 | |
Current portion of debt | 18,529 | 36,261 |
Current portion of operating lease liabilities | 3,687 | 3,322 |
Total current liabilities | 92,125 | 115,206 |
Long-term debt, net of discount | 149,459 | 199,088 |
Deferred tax liabilities, net | 7,055 | 9,043 |
Deferred revenue | 113,477 | 114,389 |
Derivative liabilities | 42,900 | 35,000 |
Operating lease liabilities | 51,236 | 52,111 |
Other long-term liabilities | 549 | 39 |
Total liabilities | 456,801 | 524,876 |
Commitments and contingencies (See Note 10) | ||
Sorrento Therapeutics, Inc. equity | ||
Preferred stock, $0.0001 par value; 100,000,000 shares authorized and no shares issued or outstanding | ||
Common stock, $0.0001 par value 750,000,000 shares authorized and 261,737,622 and 167,798,120 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively | 28 | 18 |
Additional paid-in capital | 1,141,208 | 788,122 |
Accumulated other comprehensive gain (loss) | 444 | (270) |
Accumulated deficit | (886,776) | (659,818) |
Treasury stock, 7,568,182 shares at cost at September 30, 2020, and December 31, 2019 | (49,464) | (49,464) |
Total Sorrento Therapeutics, Inc. stockholders’ equity | 205,440 | 78,588 |
Noncontrolling interests | (60,156) | (45,832) |
Total equity | 145,284 | 32,756 |
Total liabilities and stockholders’ equity | $ 602,085 | $ 557,632 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2020 | Dec. 31, 2019 |
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) | 261,737,622 | 167,798,120 |
Common stock, shares outstanding (in shares) | 261,737,622 | 167,798,120 |
Treasury stock, shares (in shares) | 7,568,182 | 7,568,182 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Revenues: | ||||
Revenues | $ 11,753 | $ 5,778 | $ 28,481 | $ 18,398 |
Operating costs and expenses: | ||||
Research and development | 32,003 | 27,610 | 77,307 | 78,019 |
Acquired in-process research and development | 34,884 | 39,765 | 75,301 | |
Selling, general and administrative | 24,265 | 25,234 | 75,027 | 78,128 |
Intangible amortization | 1,034 | 991 | 3,018 | 2,949 |
Total operating costs and expenses | 94,857 | 59,061 | 202,476 | 245,212 |
Loss from operations | (83,104) | (53,283) | (173,995) | (226,814) |
Other income (loss) | 238 | (221) | 179 | (203) |
Loss on debt extinguishment | (51,939) | |||
Gain (loss) on derivative liabilities | (1,000) | (10,700) | 5,900 | (35,792) |
(Loss) gain on foreign currency exchange | 30 | (521) | 7 | (619) |
Interest expense | (2,563) | (9,459) | (17,686) | (28,059) |
Interest income | 1 | 182 | 22 | 1,021 |
Loss before income tax | (86,398) | (74,002) | (237,512) | (290,466) |
Income tax expense (benefit) | 145 | (221) | (2,050) | (782) |
Loss on equity method investments | (566) | (1,431) | (5,821) | (3,902) |
Net loss | (87,109) | (75,212) | (241,283) | (293,586) |
Net loss attributable to noncontrolling interests | (3,086) | (10,797) | (14,324) | (64,338) |
Net loss attributable to Sorrento | $ (84,023) | $ (64,415) | $ (226,959) | $ (229,248) |
Net loss per share - basic per share attributable to Sorrento (USD per share) | $ (0.33) | $ (0.49) | $ (1.05) | $ (1.83) |
Net loss per share - diluted per share attributable to Sorrento (USD per share) | $ (0.33) | $ (0.50) | $ (1.05) | $ (2) |
Weighted-average shares used during period - basic per share attributable to Sorrento (in shares) | 251,211 | 130,800 | 217,050 | 125,240 |
Weighted-average shares used during period - diluted per share attributable to Sorrento (in shares) | 257,670 | 140,445 | 223,509 | 132,265 |
Product | ||||
Revenues: | ||||
Revenues | $ 7,874 | $ 3,810 | $ 18,916 | $ 11,868 |
Operating costs and expenses: | ||||
Cost of products sold and services | 549 | 2,839 | 1,796 | 3,868 |
Service | ||||
Revenues: | ||||
Revenues | 3,879 | 1,968 | 9,565 | 6,530 |
Operating costs and expenses: | ||||
Cost of products sold and services | $ 2,122 | $ 2,387 | $ 5,563 | $ 6,947 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Net loss | $ (87,109) | $ (75,212) | $ (241,283) | $ (293,586) |
Other comprehensive loss (gain): | ||||
Foreign currency translation adjustments | 669 | (177) | 714 | (144) |
Total other comprehensive loss (gain) | 669 | (177) | 714 | (144) |
Comprehensive loss | (86,440) | (75,389) | (240,569) | (293,730) |
Comprehensive loss attributable to noncontrolling interests | (3,086) | (10,797) | (14,324) | (64,338) |
Comprehensive loss attributable to Sorrento | $ (83,354) | $ (64,592) | $ (226,245) | $ (229,392) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Public Offering Of Common Stock And Warrants 2019 | Common Stock | Common StockPublic Offering Of Common Stock And Warrants 2019 | Treasury Stock | Additional Paid-in Capital | Additional Paid-in CapitalPublic Offering Of Common Stock And Warrants 2019 | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Noncontrolling Interest | SmartPharm | SmartPharmCommon Stock | SmartPharmAdditional Paid-in Capital | Semnur | SemnurAdditional Paid-in Capital | SemnurNoncontrolling Interest |
Balance, shares (in shares) at Dec. 31, 2018 | 122,280,092 | 7,568,182 | ||||||||||||||
Balance at Dec. 31, 2018 | $ 207,500 | $ 13 | $ (49,464) | $ 626,658 | $ 15 | $ (367,750) | $ (1,972) | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Exercise of stock options (in shares) | 158,699 | |||||||||||||||
Exercise of stock options, net | 289 | 289 | ||||||||||||||
Issuance of common stock for equity offerings (in shares) | 229,168 | 8,333,334 | ||||||||||||||
Issuance of common stock for equity offerings | 947 | $ 23,322 | 947 | $ 23,322 | ||||||||||||
Issuance of common stock, conversion of notes payable | $ 54,591 | $ 27,991 | $ 26,600 | |||||||||||||
Stock-based compensation | 8,978 | 8,978 | ||||||||||||||
Issuance of 2019 Warrants | 4,288 | 4,288 | ||||||||||||||
Adjustment to noncontrolling interest | 484 | 484 | ||||||||||||||
Foreign currency translation adjustment | (144) | (144) | ||||||||||||||
Net loss | (293,586) | (229,248) | (64,338) | |||||||||||||
Balance, shares (in shares) at Sep. 30, 2019 | 131,001,293 | 7,568,182 | ||||||||||||||
Balance at Sep. 30, 2019 | 6,669 | $ 13 | $ (49,464) | 692,473 | (129) | (596,998) | (39,226) | |||||||||
Balance, shares (in shares) at Jun. 30, 2019 | 122,645,334 | 7,568,182 | ||||||||||||||
Balance at Jun. 30, 2019 | 54,616 | $ 13 | $ (49,464) | 665,515 | 48 | (532,583) | (28,913) | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Exercise of stock options (in shares) | 22,625 | |||||||||||||||
Exercise of stock options, net | 30 | 30 | ||||||||||||||
Issuance of common stock for equity offerings (in shares) | 8,333,334 | |||||||||||||||
Issuance of common stock for equity offerings | $ 23,322 | $ 23,322 | ||||||||||||||
Issuance of common stock, conversion of notes payable | $ (409) | $ (409) | ||||||||||||||
Stock-based compensation | 4,015 | 4,015 | ||||||||||||||
Adjustment to noncontrolling interest | 484 | 484 | ||||||||||||||
Foreign currency translation adjustment | (177) | (177) | ||||||||||||||
Net loss | (75,212) | (64,415) | (10,797) | |||||||||||||
Balance, shares (in shares) at Sep. 30, 2019 | 131,001,293 | 7,568,182 | ||||||||||||||
Balance at Sep. 30, 2019 | 6,669 | $ 13 | $ (49,464) | 692,473 | (129) | (596,998) | (39,226) | |||||||||
Balance, shares (in shares) at Dec. 31, 2019 | 167,798,120 | 7,568,182 | ||||||||||||||
Balance at Dec. 31, 2019 | $ 32,756 | $ 18 | $ (49,464) | 788,122 | (270) | (659,818) | (45,832) | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Exercise of stock options (in shares) | 1,213,924 | 1,213,924 | ||||||||||||||
Exercise of stock options, net | $ 5,074 | 5,074 | ||||||||||||||
Issuance of common stock upon issuance of warrants (in shares) | 33,080,916 | |||||||||||||||
Issuance of common stock upon exercise of warrants | 92,736 | $ 3 | 92,733 | |||||||||||||
Issuance of common stock for equity offerings (in shares) | 55,815,693 | |||||||||||||||
Issuance of common stock for equity offerings | 213,009 | $ 7 | 213,002 | |||||||||||||
Issuance of common stock, conversion of notes payable (in shares) | 1,832,166 | |||||||||||||||
Issuance of common stock, conversion of notes payable | $ 19,421 | $ 19,421 | ||||||||||||||
Other acquisitions, license agreements and investments paid in equity (in shares) | 1,996,803 | |||||||||||||||
Other acquisitions, license agreements and investments paid in equity | 9,544 | 9,544 | ||||||||||||||
Stock-based compensation | 13,312 | 13,312 | ||||||||||||||
Foreign currency translation adjustment | 714 | 714 | ||||||||||||||
Net loss | (241,283) | (226,959) | (14,324) | |||||||||||||
Balance, shares (in shares) at Sep. 30, 2020 | 261,737,622 | 7,568,182 | ||||||||||||||
Balance at Sep. 30, 2020 | 145,284 | $ 28 | $ (49,464) | 1,141,208 | 444 | (886,776) | (60,156) | |||||||||
Balance, shares (in shares) at Jun. 30, 2020 | 231,846,901 | 7,568,182 | ||||||||||||||
Balance at Jun. 30, 2020 | 80,215 | $ 25 | $ (49,464) | 989,702 | (225) | (802,753) | (57,070) | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Exercise of stock options (in shares) | 287,979 | |||||||||||||||
Exercise of stock options, net | 1,177 | 1,177 | ||||||||||||||
Issuance of common stock upon issuance of warrants (in shares) | 19,956,874 | |||||||||||||||
Issuance of common stock upon exercise of warrants | 53,876 | $ 2 | 53,874 | |||||||||||||
Issuance of common stock for equity offerings (in shares) | 6,816,899 | |||||||||||||||
Issuance of common stock for equity offerings | 63,765 | $ 1 | 63,764 | |||||||||||||
Issuance of common stock, conversion of notes payable (in shares) | 1,832,166 | |||||||||||||||
Issuance of common stock, conversion of notes payable | $ 19,421 | $ 19,421 | ||||||||||||||
Other acquisitions, license agreements and investments paid in equity (in shares) | 996,803 | |||||||||||||||
Other acquisitions, license agreements and investments paid in equity | 6,975 | 6,975 | ||||||||||||||
Stock-based compensation | 6,295 | 6,295 | ||||||||||||||
Foreign currency translation adjustment | 669 | 669 | ||||||||||||||
Net loss | (87,109) | (84,023) | (3,086) | |||||||||||||
Balance, shares (in shares) at Sep. 30, 2020 | 261,737,622 | 7,568,182 | ||||||||||||||
Balance at Sep. 30, 2020 | $ 145,284 | $ 28 | $ (49,464) | $ 1,141,208 | $ 444 | $ (886,776) | $ (60,156) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Operating activities | ||
Net loss | $ (241,283) | $ (293,586) |
Adjustments to reconcile net loss to net cash used for operating activities: | ||
Depreciation and amortization | 8,790 | 8,248 |
Non-cash operating lease cost | 2,802 | 3,069 |
Non-cash interest expense and amortization of debt issuance costs | 10,440 | 17,554 |
Acquired in-process research and development | 39,765 | 75,301 |
Stock-based compensation | 13,312 | 8,978 |
Loss on debt extinguishment | 51,939 | |
(Gain) Loss on derivative liabilities | (5,900) | 35,792 |
Loss on equity method investments | 5,821 | 3,902 |
Deferred tax provision | (1,989) | (782) |
Changes in operating assets and liabilities, excluding effect of acquisitions: | ||
Accounts receivable | (313) | (7,727) |
Accrued payroll | 2,016 | 4,429 |
Prepaid expenses, deposits and other assets | 4,588 | (3,393) |
Accounts payable | (8,556) | 8,782 |
Accrued expenses and other liabilities | 1,544 | 3,137 |
Deferred revenue | (385) | (581) |
Other | (1,258) | (97) |
Net cash used for operating activities | (118,667) | (136,974) |
Investing activities | ||
Purchases of property and equipment | (3,840) | (9,582) |
Purchase of assets related to Semnur, net of cash acquired | (17,040) | |
Payments related to license agreements | (22,325) | |
Other acquisitions and investments | (2,344) | (1,162) |
Net cash used for investing activities | (28,509) | (27,784) |
Financing activities | ||
Proceeds from short-term debt, net of issuance costs | 7,815 | 18,858 |
Proceeds from exercise of stock options and warrants | 97,810 | 289 |
Repayments of debt and other obligations | (132,819) | (2,441) |
Net cash provided by (used for) financing activities | 185,815 | 40,975 |
Net change in cash, cash equivalents and restricted cash | 38,639 | (123,783) |
Net effect of exchange rate changes on cash | 768 | (156) |
Cash, cash equivalents and restricted cash at beginning of period | 80,769 | 213,330 |
Cash, cash equivalents and restricted cash at end of period | 120,176 | 89,391 |
Cash paid during the period for: | ||
Interest | 3,148 | 10,046 |
Supplemental disclosures of non-cash investing and financing activities: | ||
Semnur acquisition costs incurred but not paid | 601 | |
Other acquisitions, license agreements and investments paid in equity | 9,544 | |
Property and equipment costs incurred but not paid | 1,524 | 1,408 |
Reconciliation of cash, cash equivalents and restricted cash within the Company’s consolidated balance sheets: | ||
Cash and cash equivalents | 75,176 | 34,649 |
Restricted cash | 45,000 | 54,742 |
Cash, cash equivalents, and restricted cash | 120,176 | 89,391 |
Semnur | ||
Supplemental disclosures of non-cash investing and financing activities: | ||
Acquisition consideration paid in equity | 54,591 | |
SmartPharm | ||
Supplemental disclosures of non-cash investing and financing activities: | ||
Acquisition consideration paid in equity | 19,421 | |
Public Offering Of Common Stock And Warrants 2019 | ||
Financing activities | ||
Proceeds from equity offerings, net of issuance costs | $ 213,009 | $ 24,269 |
Description of Business and Bas
Description of Business and Basis of Presentation | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Description of Business and Basis of Presentation | 1. Description of Business and Basis of Presentation Description of Business Sorrento Therapeutics, Inc., together with its subsidiaries (the “Company”), is a clinical stage and commercial biopharmaceutical company focused on delivering innovative and clinically meaningful therapies to address unmet medical needs. At its core, the Company is antibody-centric and leverages its proprietary G-MAB™ library and 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. The Company also has programs assessing the use of its technologies and products in autoimmune, inflammatory, viral and neurodegenerative diseases. Outside of immuno-oncology programs, as part of the Company’s global aim to provide a wide range of therapeutic and diagnostic products to meet underserved markets, the Company has made investments in non-opioid pain management and is currently conducting preclinical development of multiple therapeutic, vaccine and diagnostic product candidates utilizing its proprietary platforms for the potential treatment, prevention and detection of COVID-19 and SARS-CoV-2. Basis of Presentation and Principles of Consolidation 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. These consolidated financial statements should be read in conjunction with the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019. Operating results for interim periods are not expected to be indicative of operating results for the Company’s 2020 fiscal year, or any subsequent period. The unaudited interim financial statements included herein reflect all normal and recurring adjustments that are necessary for a fair presentation of the results for the interim periods presented. Use of Estimates To prepare consolidated financial statements in conformity with accounting principles generally accepted in the U.S. (“U.S. GAAP”), management must make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Significant Accounting Policies During the nine months ended September 30, 2020, there have been no changes to the Company`s significant accounting policies as described in its Annual Report on Form 10-K for the fiscal year ended December 31, 2019 outside of new accounting pronouncements as described below. Revenue Recognition The following table shows revenue disaggregated by product and service type for the three and nine months ended September 30, 2020 and 2019 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Scilex Pharmaceuticals Inc. product sales $ 7,837 $ 3,770 $ 18,806 $ 11,289 Other product revenue 37 40 110 579 Net product revenue $ 7,874 $ 3,810 $ 18,916 $ 11,868 Concortis Biosystems Corporation $ 2,261 $ 1,607 $ 5,089 $ 4,622 Bioserv Corporation 1,498 233 4,116 1,540 Other service revenue 120 128 360 368 Service revenue $ 3,879 $ 1,968 $ 9,565 $ 6,530 Recent Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, In August 2018, the FASB issued ASU No. 2018-13, Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement, In December 2019, the FASB issued ASU No. 2019-12, Income Taxes Topic 740): Simplifying the Accounting for Income Taxes. In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment (Topic 350). |
Liquidity and Going Concern
Liquidity and Going Concern | 9 Months Ended |
Sep. 30, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Liquidity and Going Concern | 2. 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 negative working capital and 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, debt servicing 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 for one year after the date the financial statements are issued. 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. Furthermore, the spread of COVID-19, which has caused a broad impact globally, may materially affect the Company economically. While the potential economic impact brought by, and the duration of, COVID-19 may be difficult to assess or predict, a widespread pandemic could result in significant disruption of global financial markets, reducing the Company’s ability to access capital, which could, in the future, negatively affect its liquidity. 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. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 3. Fair Value Measurements 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 September 30, 2020 Balance Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Cash and cash equivalents $ 75,176 $ 75,176 $ — $ — Restricted cash 45,000 45,000 — — Total assets $ 120,176 $ 120,176 $ — $ — Liabilities: Derivative liabilities - non-current $ 42,900 $ — $ — $ 42,900 Acquisition consideration payable 398 — — 398 Acquisition consideration payable - non-current 549 — — 549 Total liabilities $ 43,847 $ — $ — $ 43,847 Fair Value Measurements at December 31, 2019 Balance Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Cash and cash equivalents $ 22,521 $ 22,521 $ — $ — Restricted cash 58,248 58,248 — — Total assets $ 80,769 $ 80,769 $ — $ — Liabilities: Derivative liabilities $ 8,800 $ — $ — $ 8,800 Derivative liabilities - non-current 35,000 — — 35,000 Acquisition consideration payable 908 — — 908 Acquisition consideration payable - non-current 39 — — 39 Total liabilities $ 44,747 $ — $ — $ 44,747 The Company’s financial assets and liabilities carried at fair value are comprised of cash, cash equivalents, restricted cash, derivative liabilities and acquisition consideration payable. Cash and cash equivalents consist of money market accounts and bank deposits that are highly liquid and readily tradable. These investments are valued using inputs observable in active markets for identical securities. The fair value of the acquisition consideration payable is measured on a recurring basis using significant unobservable inputs (Level 3). Acquisition consideration payable 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. There were no changes to the fair value of acquisition consideration payable during the nine months ended September 30, 2020. Derivative liabilities The Company recorded a loss on derivative liabilities of $1.0 million and a gain on derivative liabilities of $5.9 million for the three and nine months ended September 30, 2020, respectively, which related to the compound derivative liabilities associated with the Term Loans (as defined in Note 7 ) and the Scilex Notes (as defined in Note 7 ). The compound derivative liabilities consist of the fair value of various embedded features. Significant, Level 3 inputs and assumptions for the Term Loans consisted of the estimated probability of restructuring debt arrangements during the first half of 2020 and estimated probabilities of satisfying certain commercial and financial milestones estimated using a with and without discounted cash flow approach. As explained further in Note 7 , the Term Loans were paid in full as of September 30, 2020. As o f September 30, 2020 , the fair value of the derivative liabilities associated with the Scilex Notes was estimated using the discounted cash flow method under the income approach combined with a Monte Carlo simulation model. This involves significant Level 3 inputs and assumptions. The key assumptions for the Scilex Notes include a % risk adjusted net sales forecast, an effective debt yield of 18 %, estimated probabilities of % and 100 % of not obtaining marketing approval before July 1, 2023 and March 31, 2021, respectively, and an estimated probability of a n initial public offering by Scilex Holding Company (“Scilex Holding”) that satisfies certain valuation thresholds and timing considerations. The following table includes a summary of the derivative liabilities measured at fair value using significant unobservable inputs (Level 3) during the nine months ended September 30, 2020: (in thousands) Fair Value Beginning Balance at December 31, 2019 $ 43,800 Additions 8,800 Re-measurement of Fair Value (9,700 ) Ending Balance at September 30, 2020 $ 42,900 |
Investments
Investments | 9 Months Ended |
Sep. 30, 2020 | |
Equity Method Investments And Joint Ventures [Abstract] | |
Investments | 4. Investments 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. The Company’s equity method investments primarily include an ownership interest in Immunotherapy NANTibody, LLC (“NANTibody”) and NantCancerStemCell, LLC (“NantStem”). The Company’s other equity investments primarily include an ownership interest in ImmunityBio, Inc., NantBioScience, Inc. (“NantBioScience”) and Celularity Inc. These other investments are carried at cost, less impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments. During the nine months ended September 30, 2020, the Company recorded an impairment loss of approximately $3.8 million related to an equity method investment for which the Company determined the investment’s value is no longer supportable. The loss is included within loss on equity method investments in the Company’s consolidated statement of operations. 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 3.0 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 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 In April 2015, the Company and NantCell, Inc. (which subsequently changed its name to ImmunityBio, Inc.) (“NantCell”), a subsidiary of 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 contribute its portion of the initial joint funding of $40.0 million to NANTibody from the proceeds of the sale of IgDraSol. Additionally, the Company and NantCell were allowed to appoint two and three representatives, respectively, to NANTibody’s five-member Board of Directors. NANTibody focuses 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. 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, 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 approximated its ratable 40% ownership of the cash maintained by NANTibody expected to be used for future research and development. As of September 30, 2020 and 2019, the carrying value of the Company’s investment in NANTibody was approximately $0.6 million and $2.5 million, respectively. The Company’s investment in NANTibody is reported in equity method investments on its consolidated balance sheets and its share of NANTibody’s income or loss is recorded in loss on equity method investments on its consolidated statement of operations. 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 one quarter lag. NANTibody recorded a net loss of $1.6 million and $1.7 million for the three months ended June 30, 2020 and 2019, respectively. As of June 30, 2020, NANTibody had $6.4 million in current assets, $4.7 million in current liabilities, $0.2 million in noncurrent assets and no noncurrent liabilities. NantStem In July 2015, the Company and NantBioScience 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 Equities, L.P. (“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. 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. As of September 30, 2020 and 2019, the carrying value of the Company’s investment in NantStem was approximately $18.0 million and $17.8 million, respectively. The Company’s investment in NantStem is reported in equity method investments on its consolidated balance sheets and its share of NantStem’s income or loss is recorded in loss on equity method investments on its consolidated statement of operations. 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 one quarter lag. NantStem recorded a net gain of $0.9 million and a net loss of $0.3 million for the three months ended June 30, 2020 and 2019, respectively. As of June 30, 2020, NantStem had $78.9 million in current assets, $2.2 million in noncurrent assets and no current and noncurrent liabilities. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | 5. Goodwill and Intangible Assets At both September 30, 2020 and December 31, 2019, the Company had recorded goodwill of $38.3 million. Goodwill for the Sorrento Therapeutics segment and Scilex segment was $31.6 million and $6.7 million, respectively, as of September 30, 2020. Intangible assets with indefinite useful lives totaling $33.5 million are included in acquired in-process research and development in the table below. A summary of the Company’s identifiable intangible assets as of September 30, 2020 and December 31, 2019 is as follows (in thousands, except for years): September 30, 2020 Weighted Average Amortization Period (Years) Gross Carrying Amount Accumulated Amortization Intangibles, Net Customer relationships 6 $ 1,585 $ 1,419 $ 166 Acquired developed technology 19 3,410 1,192 2,218 Acquired in-process research and development — 33,516 — 33,516 Technology placed in service 15 21,940 2,925 19,015 Patent rights 15 32,720 8,558 24,162 Assembled workforce 5 605 192 413 Internally developed software 1 520 43 477 Total intangible assets $ 94,296 $ 14,329 $ 79,967 December 31, 2019 Weighted Average Amortization Period (Years) Gross Carrying Amount Accumulated Amortization Intangibles, Net Customer relationships 6 $ 1,585 $ 1,401 $ 184 Acquired developed technology 19 3,410 1,060 2,350 Acquired in-process research and development — 14,360 — 14,360 Technology placed in service 15 21,940 1,828 20,112 Patent rights 15 32,720 6,922 25,798 Assembled workforce 5 605 101 504 Total intangible assets $ 74,620 $ 11,312 $ 63,308 Aggregate amortization expense was $1.0 million for each of the three months ended September 30, 2020 and 2019. Aggregate amortization expense was $3.0 million and $2.9 million for the nine months ended September 30, 2020 and 2019, respectively. Estimated future amortization expense related to intangible assets, excluding indefinite-lived intangible assets, at September 30, 2020 is as follows (in thousands): Years Ending December 31, Amount 2020 (Remaining three months) $ 1,035 2021 4,400 2022 3,966 2023 3,961 2024 3,870 2025 3,845 Thereafter 25,373 Total expected future amortization $ 46,450 |
Significant Agreements and Cont
Significant Agreements and Contracts | 9 Months Ended |
Sep. 30, 2020 | |
Significant Agreements And Contracts [Abstract] | |
Significant Agreements and Contracts | 6. Significant Agreements and Contracts 2020 Acquisition Acquisition of SmartPharm Therapeutics, Inc. On September 1, 2020, the Company completed the acquisition of SmartPharm Therapeutics, Inc. (“SmartPharm”), a gene-encoded protein therapeutics company developing non-viral DNA and RNA gene delivery platforms for COVID-19, Influenza and rare diseases with broad potential for application in enhancing antibody-centric therapeutics. The total base consideration paid to the holders of capital stock of SmartPharm in the acquisition was approximately $19.5 million, which was comprised of approximately 1.8 million shares of the Company’s common stock and is subject to certain adjustments for net working capital, indebtedness, transaction expenses and cash The preliminary purchase price allocation resulted in net identifiable assets of approximately $19.5 million, which includes separate and distinct intangible assets of approximately $19.2 million and other net assets of approximately $0.3 million. The purchase price allocation is preliminary as the Company is still completing the valuation of the intangible assets, assumed liabilities and goodwill. Results of operations since the date of acquisition were not material. 2019 Acquisitions Acquisition of Semnur Pharmaceuticals, Inc. In March 2019, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Semnur Pharmaceuticals, Inc. (“Semnur”) and Scilex Holding, whereby Semnur became a wholly-owned subsidiary of Scilex Holding (the “Merger”), and thereby Scilex Holding acquired Semnur’s SEMDEXA TM Pursuant to the Merger Agreement, Scilex Holding also agreed to pay the holders of Semnur’s capital stock and options (the “Semnur Equityholders”) up to $280.0 million in aggregate contingent cash consideration based on the achievement of certain milestones, which is comprised of a $40.0 million payment that will be due upon obtaining the first approval of a New Drug Application of a Semnur product by the U.S. Food and Drug Administration (the “FDA”) and additional payments that will be due upon the achievement of certain amounts of net sales of Semnur products as follows: (a) a $20.0 million payment upon the achievement of $100.0 million in cumulative net sales of a Semnur product, (b) a $20.0 million payment upon the achievement of $250.0 million in cumulative net sales of a Semnur product, (c) a $50.0 million payment upon the achievement of $500.0 million in cumulative net sales of a Semnur product, and (d) a $150.0 million payment upon the achievement of $750.0 million in cumulative net sales of a Semnur product. In March 2019, the Company also entered into an Exchange and Registration Rights Agreement (the “Exchange Agreement”) with the Semnur Equityholders. Pursuant to the Exchange Agreement, if within 18 months of the closing of the Merger, 100% of the outstanding equity of Scilex Holding had not been acquired by a third party or Scilex Holding had not entered into a definitive agreement with respect to, or otherwise consummated, a firmly underwritten offering of Scilex Holding’s capital stock that meets certain requirements and includes the Stock Consideration, then the Semnur Equityholders could collectively elect to exchange, during the 60-day period commencing the date that is the 18 month anniversary of the closing of the Merger, the Stock Consideration for shares of the Company’s common stock with a value of $55.0 million (the “Semnur Share Exchange”) based on a price per share of the Company’s common stock equal to the greater of (a) the 30-day trailing volume weighted average price of one share of the Company’s common stock as reported on the Nasdaq Capital Market as of the consummation of the Semnur Share Exchange and (b) $ 5.55 (subject to adjustment for any stock dividend, stock split, stock combination, reclassification or similar transaction ) ( the “Exchange Price”). On September 28, 2020, the Company entered into an amendment to the Exchange Agreement (the Exchange Agreement, as amended, the “Amended Exchange Agreement”) to, among other things, provide that if the Company received notice from the Semnur Equityholders that they will proceed with the Semnur Share Exchange (the “Exchange Notice”), the Company could, in its sole discretion, elect, within seven days of receipt of the Exchange Notice, to exchange all the Stock Consideration and the rights to receive cash from Scilex Holding held by the Semnur Equityholders for an amount in cash equal to $ 55.0 million, in lieu of issuing $ 55.0 million of shares of the Company’s common stock at the Exchange Price . The Semnur acquisition was accounted for as an asset acquisition since substantially all the value of the gross assets was concentrated in a single asset. No contingent consideration was recorded as of December 31, 2019 or September 30, 2020 since the related regulatory approval milestones are not deemed probable until they actually occur. Approximately $75.3 million was expensed as acquired in-process research and development during the three months ended March 31, 2019. Semnur Cash Exchange Payment Pursuant to the Amended Exchange Agreement, as described above, on September 28, 2020, the Semnur Equityholders delivered the Exchange Notice. On October 5, 2020, the Company notified the Semnur Equityholders of its election to pay cash, and paid $55.0 million in cash to the Semnur Equityholders in exchange for the Stock Consideration on October 9, 2020. Following the completion of the Semnur Share Exchange, the Company holds approximately 82.3% of the outstanding common stock of Scilex Holding. License Agreements License Agreement with ACEA Therapeutics, Inc. In July 2020, the Company entered into a License Agreement (the “ACEA License Agreement”) with ACEA Therapeutics, Inc. (“ACEA”). Pursuant to the ACEA License Agreement, ACEA granted the Company an exclusive license and right under certain patents and certain know-how and other intellectual property (“Licensed Know-How”) to fully utilize, exploit and commercialize (i) the Licensed Know-How, (ii) Abivertinib (AC0010), a selective, orally available irreversible small molecule tyrosine kinase inhibitor to Bruton’s tyrosine kinase and mutant epidermal growth factor receptor, including any improvements thereto, and (iii) (a) any composition, product, or component part thereof, and (b) any and all services offered in connection or associated therewith, in all fields of use, including the diagnosis, treatment and/or cure of any human disease or disorder worldwide, other than the People’s Republic of China. As consideration for the license under the ACEA License Agreement, the Company paid ACEA an up-front license fee of $15.0 million in cash, which was expensed as acquired in-process research and development during the three and nine months ended September 30, 2020. The Company also agreed to pay ACEA (i) certain milestone payments upon the receipt of certain regulatory approvals, and (ii) certain milestone payments upon the Company’s or its affiliates’ achievement of certain commercial sales milestones. The milestone payments may be comprised of cash or any combination of cash and common stock of the Company, in any case as determined by the Company so long as no more than 50% of any upfront payment or milestone payment is comprised of common stock. The Company will also pay certain royalties in the mid-single digit to low-double digit percentages of annual net sales by the Company. License Agreement with The Trustees of Columbia University in the City of New York In July 2020, the Company entered into an Exclusive License Agreement (the “Columbia License Agreement”) with The Trustees of Columbia University in the City of New York (“Columbia”). Pursuant to the Columbia License Agreement, Columbia granted the Company (i) an exclusive license under certain patents, other intellectual property and materials to discover, develop, commercialize and exploit certain products and services (“Products”) in all diagnostic applications of high-performance loop-mediated isothermal amplification (“HP-LAMP”) for coronaviruses and influenza viruses (the “Field”) worldwide, subject to certain limitations. Pursuant to the Columbia License Agreement, Columbia also granted to the Company an option, exercisable for twelve months from the effective date of the Columbia License Agreement and subject to the satisfaction of certain conditions, to acquire an exclusive worldwide license to such patents, other intellectual property and materials for additional diagnostic application(s) of HP-LAMP (other than for coronaviruses and influenza viruses), subject to certain limitations. As consideration for the license under the Columbia License Agreement, the Company paid Columbia an up-front license fee of $5.0 million in cash, which was expensed as acquired in-process research and development during the three and nine months ended September 30, 2020. The Company also agreed to pay Columbia (i) an earned royalty on the net sales of Products in the Field worldwide, and (ii) minimum annual royalty payments of $1.0 million no later than ten days following the first bona fide commercial sale of a Product to a third-party customer and on an annual basis thereafter. In addition, the Company agreed to pay Columbia a percentage of certain non-royalty sublicense revenue and other payments received by the Company from its sublicensees as consideration for the grant of any sublicense, option or similar rights. Pursuant to the Columbia License Agreement, the Company also agreed to pay certain one-time, development milestone payments to Columbia upon the receipt of certain regulatory approvals or the first commercial sale of certain Products for diagnostic applications within the Field. License Agreement with Mayo Foundation In September 2020, the Company entered into a patent and know-how license agreement (the “Mayo License Agreement”) with Mayo Foundation for Medical Education and Research (“Mayo”). Pursuant to the Mayo License Agreement, Mayo granted the Company a sublicensable license under certain of Mayo’s patents, know-how, and materials relating to targeted nanoparticle therapies (“Patent Rights”, “Know-How”, and “Materials”, respectively) to reproduce, use, commercialize, and exploit related products, processes and services (“Licensed Products”) for the prevention, diagnosis and/or treatment of human diseases and conditions worldwide. As consideration for the license under the Mayo License Agreement, the Company paid Mayo an upfront license fee of $9.3 million comprised of approximately $2.3 million in cash and 996,803 shares of the Company’s common stock, and which was expensed as acquired in-process research and development during the three and nine months ended September 30, 2020. The Company also agreed to (i) reimburse Mayo up to $3.4 million for preclinical and clinical research expenses associated with the Know-How, Patent Rights and Materials arising prior to the entry into the Mayo License Agreement, and (ii) reimburse Mayo approximately $2.0 million for expenses related to the development and manufacturing of the Materials arising prior to the entry into the Mayo License Agreement. Such reimbursements were accrued for and expensed as acquired in-process research and development during the three and nine months ended September 30, 2020. The Company also agreed to pay Mayo (i) certain milestone payments upon the initiation of certain clinical trials, (ii) certain milestone payments upon the receipt of certain regulatory approvals, and (iii) certain milestone payments upon the achievement of certain commercial sales milestones. The Company will also pay certain royalties in the low-single digit to mid-single digit percentages of annual net sales of Licensed Products by the Company and a share of any sublicense revenue received by the Company from sublicensees. 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. The Company terminated the agreement, effective January 29, 2020, due to NantCell`s material breach of the agreement. The termination and remedies related to such termination are currently pending in an arbitration before the American Arbitration Association. The Company has therefore deferred recognition of the upfront payment and the value of the equity interest received until the arbitration is concluded or resolved. 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, less impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of NantCell. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt | 7. Debt 2018 Purchase Agreements and Indenture for Scilex On September 7, 2018, Scilex Pharmaceuticals Inc. (“Scilex Pharma”) 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 Pharma issued and sold to the Scilex Note Purchasers senior secured notes due 2026 in an aggregate principal amount of $224.0 million (the “Scilex Notes”) for an aggregate purchase price of $140.0 million (the “Scilex Notes Offering”). In connection with the Scilex Notes Offering, Scilex Pharma also entered into an Indenture (the “Indenture”) governing the Scilex Notes with U.S. Bank National Association, a national banking association, as trustee and collateral agent, and the Company. Pursuant to the Indenture, the Company agreed to irrevocably and unconditionally guarantee, on a senior unsecured basis, the punctual performance and payment when due of all obligations of Scilex Pharma under the Indenture. To estimate the fair value of the Scilex Notes, 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 principal payments and the discounted rate of return reflective of the Company’s credit risk. Borrowings of the Scilex Notes consisted of the following (in thousands): September 30, 2020 December 31, 2019 Principal $ 218,187 $ 221,666 Unamortized debt discount (60,131 ) (67,839 ) Unamortized debt issuance costs (3,866 ) (4,360 ) Carrying value $ 154,190 $ 149,467 Estimated fair value $ 171,100 $ 150,800 Future minimum payments under the Scilex Notes, based on a percentage of projected net sales of ZTlido Year Ending December 31, 2020 (Remaining three months) $ 1,315 2021 4,636 2022 5,535 2023 7,233 2024 8,830 2025 10,142 Thereafter 180,496 Total future minimum payments 218,187 Unamortized debt discount (60,131 ) Unamortized capitalized debt issuance costs (3,866 ) Total Scilex Notes 154,190 Current portion (4,732 ) Long-term portion of Scilex Notes $ 149,458 The Company made principal payments of $3.5 million and $1.7 million during the nine months ended September 30, 2020 and 2019, respectively, which were based on a percentage of net sales of ZTlido. The imputed effective interest rate at September 30, 2020 was 6.5%. The amount of debt discount and debt issuance costs included in interest expense for the three months ended September 30, 2020 and 2019 was approximately $2.5 million and $3.2 million, respectively. During the nine months ended September 30, 2020 and 2019, the amount of debt discount and debt issuance costs included in interest expense was $8.2 million and $12.0 million, respectively. The Company identified a number of embedded derivatives that require bifurcation from the Scilex Notes and that were separately accounted for in the consolidated financial statements as derivative liabilities. Certain of these embedded features include default interest provisions, contingent rate increases, contingent put options, optional and automatic acceleration provisions and tax indemnification obligations. The fair value of the derivative liabilities associated with the Scilex Notes was estimated using the discounted cash flow method under the income approach combined with a Monte Carlo simulation model. This involves significant Level 3 inputs and assumptions, including a risk adjusted net sales forecast, an effective debt yield, estimated marketing approval probabilities for SP-103 and an estimated probability of an initial public offering by Scilex Holding that satisfies certain valuation thresholds and timing considerations (See Note 3 ). The Company re-evaluates this assessment each reporting period. The 2018 Purchase Agreements and Indenture, as amended, provide that, upon the occurrence of an event of default, the lenders thereunder may, by written notice to the Company, declare all of the outstanding principal and interest under the Indenture immediately due and payable. For purposes of the Indenture, an event of default includes, among other things, (i) a failure to pay any amounts when due under the Indenture, (ii) a breach or other failure to comply with the covenants (including financial, notice and reporting covenants) under the Indenture, (iii) a failure to make any payment on, or other event triggering an acceleration under, other material indebtedness of the Company, and (iv) the occurrence of certain insolvency or bankruptcy events (both voluntary and involuntary) involving the Company or certain of its subsidiaries. The Company is subject to certain customary default clauses under the Indenture and is in compliance with event of default clauses under the Indenture. 2018 Oaktree Term Loan Agreement In November 2018, the Company 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”). In May 2019, the Company entered into an amendment to the Loan Agreement, under which terms the Lenders agreed to make available to the Company $20.0 million (collectively, with the Initial Loan, the “Term Loans”). During the nine months ended September 30, 2020, the Company repaid $120.0 million of outstanding principal under the Term Loans plus approximately $9.4 million of related prepayment premium, exit fees and accrued interest thereon. In connection with the repayment of outstanding principal, the Company recorded a loss on debt settlement of $51.9 million. Interest expense recognized for stated interest on the Term Loans was $0.0 million and $0.5 million for the three months ended September 30, 2020 and 2019, respectively. For the nine months ended September 30, 2020 and 2019 the interest expense for stated interest on the Term Loans totaled $3.0 million and $1.4 million, respectively. The amount of debt discount and debt issuance costs included in interest expense on the Term Loans for the three months ended September 30, 2020 and 2019 was $0.0 million and $0.6 million, respectively. During the nine months ended September 30, 2020 and 2019, the amount of debt discount and debt issuance costs included in interest expense was $2.2 million and $1.7 million, respectively. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Stockholders' Equity | 8. Stockholders’ Equity Aspire Transaction In February 2020, the Company entered into a Common Stock Purchase Agreement (the “Aspire Purchase Agreement”) with Aspire Capital Fund, LLC, (“Aspire Capital”), pursuant to which Aspire Capital was committed to purchase up to an aggregate of $75.0 million of shares of the Company’s common stock over a 24-month term. Upon execution of the Aspire Purchase Agreement, the Company issued to Aspire Capital 897,308 shares of the Company’s common stock as a commitment fee. The Company used and is using proceeds it received under the Aspire Purchase Agreement for working capital and general corporate purposes and for the repayment of the Term Loans. During the nine months ended September 30, 2020, the Company issued and sold an aggregate of 33,825,010 shares of the Company’s common stock to Aspire Capital for aggregate net proceeds to the Company of $75.0 million. On April 24, 2020, the Aspire Purchase Agreement terminated effective immediately in accordance with its terms as the Company issued and sold, as of such date, the full $75.0 million of shares available for issuance thereunder. Equity Distribution Agreement On April 27, 2020, the Company voluntarily terminated the Equity Distribution Agreement, dated October 1, 2019 (the “Distribution Agreement”), that the Company entered into with JMP Securities LLC (“JMP Sales Agent”), effective immediately. Sales Agreement On April 27, 2020, the Company entered into a Sales Agreement (the “Sales Agreement”) with A.G.P./Alliance Global Partners, as sales agent (the “Sales Agent”), pursuant to which the Company may offer and sell through or to the Sales Agent (the “Offering”) up to $250.0 million in shares of its common stock (the “Shares”). Any Shares offered and sold in the Offering will be issued pursuant to the Company’s universal shelf registration statement on Form S-3 (the “Shelf Registration Statement”) and the prospectus supplement relating to the Offering filed with the Securities and Exchange Commission (the “SEC”) on April 27, 2020. Common Stock Purchase Agreement On April 27, 2020, the Company entered into a Common Stock Purchase Agreement (the “Purchase Agreement”) with Arnaki Ltd. (the “Purchaser”), pursuant to which the Purchaser is committed to purchase up to an aggregate of $250.0 million of shares of the Company’s common stock over the 36-month term of the Purchase Agreement on the terms set forth therein. Any Shares offered and sold to the Purchaser will be issued pursuant to the Shelf Registration Statement and the prospectus supplement relating to offering of shares pursuant to the Purchase Agreement filed with the SEC on April 27, 2020. On any business day over the term of the Purchase Agreement (each, a “Purchase Date”), the Company has the right, in its sole discretion, to present the Purchaser with a purchase notice directing the Purchaser to purchase up to 650,000 shares of common stock per business day. The Company and the Purchaser also may mutually agree to increase the number of shares that may be sold to as much as an additional 3,600,000 shares per Purchase Date. The Company also has the right, in its sole discretion, to grant the Purchaser an option to purchase additional shares of common stock, subject to a maximum number of shares determined by the Company on each Purchase Date. The aggregate purchase price paid by the Purchaser shall not exceed $5.0 million per Purchase Date, unless mutually agreed upon by the Company and the Purchaser. The purchase price of the common stock pursuant to the Purchase Agreement will generally be equal to 97.5% of the daily volume weighted average purchase price of the common stock on the Purchase Date. During the nine months ended September 30, 2020, the Company sold an aggregate of 1,423,077 shares of its common stock pursuant to the Purchase Agreement for aggregate net proceeds of $8.0 million. Effective October 27, 2020, the Company voluntarily terminated the Purchase Agreement. The Purchase Agreement was terminable at will by the Company with no penalty. |
Stock Based Compensation
Stock Based Compensation | 9 Months Ended |
Sep. 30, 2020 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock Based Compensation | 9. Stock Based Compensation 2019 Stock Incentive Plan A summary of stock option activity under the Sorrento Therapeutics, Inc. 2009 Stock Incentive Plan and the Sorrento Therapeutics, Inc. 2019 Stock Incentive Plan for the nine months ended September 30, 2020 is as follows (in thousands, except price data): Options Outstanding Weighted- Average Exercise Price Aggregate Intrinsic Value Outstanding at December 31, 2019 14,586,661 $ 4.36 $ 5,136 Options Granted 6,339,500 $ 5.25 Options Canceled (2,682,068 ) $ 4.57 Options Exercised (1,213,924 ) $ 4.21 Outstanding at September 30, 2020 17,030,169 $ 4.68 $ 111,676 During the three and nine months ended September 30, 2020, the Company also granted 37,891 shares of unrestricted stock that vested on the grant date and were fully expensed in the period therein. The estimated fair value of each stock option grant was determined on the grant date using the Black-Scholes valuation model with the following weighted-average assumptions. Nine Months Ended September 30, 2020 2019 Weighted-average grant date fair value $ 4.14 $ 3.05 Dividend yield — % — % Volatility 104 % 100 % Risk-free interest rate 0.45 % 1.87 % Expected life of options (years) 5.7 6.1 Total stock-based compensation recorded as operating expense under the Sorrento Therapeutics, Inc. 2019 Stock Incentive Plan was $5.0 million and $2.4 million for the three months ended September 30, 2020 and 2019, respectively, and $9.2 million and $6.1 million for the nine months ended September 30, 2020 and 2019, respectively. The total unrecognized compensation cost related to unvested stock option grants as of September 30, 2020 was $34.0 million and the weighted average period over which these grants are expected to vest is 2.7 years. Scilex Holding Company Under the Scilex Holding Company 2019 Stock Option Plan and Scilex Pharmaceuticals Inc. 2017 Equity Incentive Plan, total stock-based compensation recorded as operating expense was $1.3 million and $1.6 million for the three months ended September 30, 2020 and 2019, respectively, and $4.1 million and $2.6 million for the nine months ended September 30, 2020 and 2019, respectively. The total unrecognized compensation cost related to unvested stock option grants as of September 30, 2020 was $11.5 million and the weighted average period over which these grants are expected to vest is 2.5 years. Employee Stock Purchase Plan On October 16, 2020 at the Company’s 2020 Annual Meeting of Stockholders (the “Annual Meeting”), the Company’s stockholders approved the Company’s 2020 Employee Stock Purchase Plan (“ESPP”). Under the terms of the ESPP, the Company’s employees can elect to have up to 15% of their annual compensation, up to a maximum of $25,000 per year, withheld to purchase shares of the Company’s common stock for a purchase price equal to 85% of the lesser of the fair market value per share (at closing) of the Company’s common stock on (i) the commencement date of the six-month offering period, or (ii) the respective purchase date. The initial offering period will commence on November 6 th th th th CEO Performance Award On August 7, 2020, the Compensation Committee of the Company`s Board of Directors (the “Compensation Committee”) approved a grant to Henry Ji, Ph.D., the Company’s Chairman of the Board, Chief Executive Officer and President, of a 10-year CEO performance award tied solely to achieving market capitalization milestones (the “CEO Performance Award”), subject to approval of the Company’s stockholders at the Annual Meeting. The CEO Performance Award consists of a 10-year option to purchase an aggregate of 24,935,882 shares of the Company’s common stock, which was equal to 10% of the Company’s outstanding shares of common stock on the day prior to the date of grant, and vests in ten tranches. Each of the ten tranches vests only if a market capitalization milestone is met. To meet the first market capitalization milestone, the Company’s current market capitalization must increase to $5.0 billion. For the next two milestones, the Company’s market capitalization must continue to increase in additional $2.0 billion increments. For the three milestones thereafter, the Company’s market capitalization must increase in additional $3.0 billion increments. For the next three milestones thereafter, the Company’s market capitalization must increase in additional $4.0 billion increments. For the final milestone, the Company’s market capitalization must increase by an additional $5.0 billion. Thus, for Dr. Ji to fully vest in the award, the Company’s market capitalization must increase to $35.0 billion. The exercise price per share subject to the CEO Performance Award is $17.30, which is a 20% premium to the closing sales price of the Company’s common stock on August 7, 2020, the date the CEO Performance Award was approved by the Compensation Committee. The CEO Performance Award was approved by the Company`s stockholders at the Annual Meeting held on October 16, 2020, which represents the date of grant for accounting purposes. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 10. Commitments and Contingencies Litigation In the normal course of business, the Company may be named as a defendant in one or more lawsuits. Other than as set forth below, 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. On April 3, 2019, the Company filed two legal actions against, among others, Patrick Soon-Shiong and entities controlled by him, asserting claims for, among other things, fraud and breach of contract, arising out of Dr. Soon-Shiong’s purchase of the drug Cynviloq™ from the Company in May 2015. The actions allege that Dr. Soon-Shiong and the other defendants, among other things, acquired the drug Cynviloq™ for the purpose of halting its progression to the market. Specifically, the Company has filed: • An arbitration demand with the American Arbitration Association in Los Angeles, California against NantPharma, LLC and Chief Executive Officer Patrick Soon-Shiong, related to alleged fraud and breaches of the Stock Sale and Purchase Agreement, dated May 14, 2015, entered into between NantPharma, LLC and the Company, filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed with SEC on August 7, 2015. On May 24, 2019, NantCell, Inc., Dr. Soon-Shiong and Immunotherapy NANTibody LLC (“NANTibody”) General Counsel Charles Kim filed a motion in the Los Angeles Superior Court to stay or dismiss the Company’s arbitration demand. On October 9, 2019, the Los Angeles Superior Court denied the motion to stay or dismiss the arbitration demand, and the arbitration is ongoing against NantPharma. On March 5, 2020, the Company filed a legal action against Dr. Soon-Shiong in Los Angeles Superior Court, asserting claims for fraudulent inducement and common law fraud, arising out of Dr. Soon-Shiong’s purchase of the drug Cynviloq™ from the Company in May 2015. The action alleges that, among other things, Dr. Soon-Shiong acquired the drug Cynviloq for the purpose of halting its progression to the market. In connection with filing this civil action in the Los Angeles Superior Court, where the Company will have the right to a jury trial against Dr. Soon-Shiong, the Company has dismissed Dr. Soon-Shiong from the related, ongoing arbitration against NantPharma, LLC ; and • An action in the Los Angeles Superior Court derivatively on behalf of NANTibody against NantCell, Inc., NANTibody Board Member and NantCell, Inc. Chief Executive Officer Patrick Soon-Shiong, and NANTibody officer Charles Kim, related to several breaches of the June 11, 2015 Limited Liability Company Agreement for NANTibody entered into between the Company and NantCell, Inc. The suit also alleges breaches of fiduciary duties and seeks, inter alia, a declaration that the Assignment Agreement entered into on July 2, 2017, between NantPharma, LLC and NANTibody is void and an equitable unwinding of the Assignment Agreement. The suit calls for the restoration of $90.05 million to the NANTibody capital account, thereby restoring the Company’s equity method investment in NANTibody to its invested amount as of June 30, 2017 of $40.0 million. On May 24, 2019, NantCell, Inc. and Dr. Soon-Shiong filed a cross-complaint against the Company and Dr. Ji, seeking unspecified damages, as well as additional punitive damages and specific performance, related to alleged fraud, alleged breaches of the Exclusive License Agreement for certain antibodies (dated June 11, 2015 and entered into between NANTibody, LLC and the Company), and tortious interference with contract. On May 24, 2019, NANTibody and NantPharma, LLC filed a new complaint in the action against the Company and Dr. Ji, seeking unspecified damages, as well as additional punitive damages and specific performance, related to alleged fraud, alleged breaches of the Stock Sale and Purchase Agreement, alleged breaches of the Exclusive License Agreement for certain antibodies (dated April 21, 2015 and entered into between NantCell, Inc. and the Company), and tortious interference with contract. On July 8, 2019, the Company and Dr. Ji filed motions to compel the cross-complaint and new action to arbitration. On October 9, 2019, the Los Angeles Superior Court granted the motions to compel to arbitration all of the claims brought by NANTibody, NantCell, Inc. and NantPharma, LLC, and denied the motions to compel as to the claims brought by Dr. Soon-Shiong. Subsequently, NANTibody, NantCell, Inc., and NantPharma, LLC have re-filed their claims in arbitration with the American Arbitration Association. On May 4, 2020, the Company filed counterclaims against NANTibody and NantPharma related to breaches of the April 21, 2015 and June 11, 2015 Exclusive License Agreements. With the counterclaims, the Company is seeking money damages in an amount yet to be determined. The claims against Dr. Soon-Shiong have been stayed pending resolution of the claims filed in arbitration. The original derivative action is no longer stayed, and the parties are currently engaged in discovery in the suit. On May 26, 2020, Wasa Medical Holdings filed a putative federal securities class action in the U.S. District Court for the Southern District of California, Case No. 3:20-cv-00966-AJB-DEB, against the Company, its President, Chief Executive Officer and Chairman of the Board of Directors, Henry Ji, Ph.D., and its SVP of Regulatory Affairs, Mark R. Brunswick, Ph.D. The action alleges that the Company, Dr. Ji and Dr. Brunswick made materially false and/or misleading statements to the investing public by publicly issuing false and/or misleading statements regarding STI-1499 and its ability to inhibit the SARS-CoV-2 virus infection and that such statements violated Section 10(b) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder. The suit seeks to recover damages caused by the alleged violations of federal securities laws, along with the plaintiffs’ reasonable costs and expenses incurred in the lawsuit, including counsel fees and expert fees. On June 11, 2020, Jeannette Calvo filed a second putative federal securities class action in the U.S. District Court for the Southern District of California, Case No. 3:20-cv-01066-JAH-WVG, against the same defendants alleging the same claims and seeking the same relief. It is anticipated that these cases will be consolidated as part of the lead plaintiff and counsel appointment process under the Private Securities Litigation Reform Act. The Company is defending these matters vigorously. Operating Leases As of September 30, 2020, the Company’s leases have remaining lease terms of approximately 0.2 to 9.2 years Supplemental quantitative information related to leases includes the following (in thousands, except for years and percentages): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Operating cash flows used for operating leases $ 2,531 $ 1,712 $ 7,354 $ 5,057 ROU assets obtained in exchange for new and amended operating lease liabilities $ 1,083 $ 2,030 $ 1,878 $ 6,777 Operating lease expense $ 2,580 $ 2,554 $ 7,550 $ 7,416 Weighted average remaining lease term in years 8.6 9.5 8.6 9.5 Weighted average discount rate 12.2 % 12.2 % 12.2 % 12.2 % Maturities of lease liabilities were as follows (in thousands): Years ending December 31, Operating leases 2020 (Remaining three months) $ 2,576 2021 9,985 2022 10,047 2023 10,285 2024 10,418 2025 9,757 Thereafter 43,174 Total lease payments 96,242 Less imputed interest (41,319 ) Total lease liabilities as of September 30, 2020 $ 54,923 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 11. Income Taxes The Company maintains deferred tax assets that 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. These deferred tax assets include net operating loss carryforwards, research credits and temporary differences. In assessing the Company’s ability to realize deferred tax assets, management considers, on a periodic basis, whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. As such, management has determined that it is appropriate to maintain a valuation allowance against the Company’s U.S. federal and state deferred tax assets, with the exception of an amount equal to schedulable deferred tax liabilities. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted in response to the COVID-19 pandemic. The CARES Act, among other things, permits net operating loss carryforwards generated in taxable years beginning after December 31, 2017, to offset 100% of taxable income for taxable years beginning before January 1, 2021, and 80% of taxable income in taxable years beginning after December 31, 2020. In addition, the CARES Act makes the Alternative Minimum Tax Credit 100% refundable for taxable years beginning in 2018 and 2019. The Company has recorded an income tax benefit of $0.1 million related to this legislation. The Company’s income tax benefit of $2.1 The difference between the expected statutory federal tax rate of 21% and the 0.9% effective tax rate for the nine months ended September 30, 2020 was primarily attributable to the valuation allowance against most of the Company’s deferred tax assets. For the nine months ended September 30, 2020, when compared to the same period in 2019, the increase in the tax benefit and change in effective income tax rate was primarily attributable to the impact of the Company’s valuation allowance. The Company is subject to taxation in the U.S. and various state and foreign jurisdictions. The Company’s tax years for 2007 forward are subject to examination by the U.S. and state tax authorities due to the existence of the net operating loss and research credit carryforwards. |
Related Party Agreements
Related Party Agreements | 9 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Agreements | 12. Related Party Agreements As of September 30, 2020, approximately 14.7% of the outstanding capital stock of Scilex Holding represents a portion of noncontrolling interest and continues to be held by ITOCHU CHEMICAL FRONTIER Corporation. Scilex Pharma has entered into a product development agreement with ITOCHU CHEMICAL FRONTIER Corporation, which serves as the sole manufacturer and supplier to Scilex Pharma for the ZTlido |
Loss Per Share
Loss Per Share | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Loss Per Share | 13. Loss Per Share For the three and nine months ended September 30, 2020 and 2019, basic loss per common share is computed by dividing net loss by the weighted average number of common shares 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 and the if-converted method for potentially dilutive shares of common stock issuable upon the Semnur Share Exchange. The following table sets forth the reconciliation of basic and diluted loss per share for the three and nine months ended September 30, 2020 and 2019 (in thousands except per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Numerator Net loss attributable to Sorrento $ (84,023 ) $ (64,415 ) $ (226,959 ) $ (229,248 ) Net loss attributable to Semnur holders of Scilex Holding (1,868 ) (6,205 ) (8,524 ) (34,819 ) Net loss used for diluted earnings per share $ (85,891 ) $ (70,620 ) $ (235,483 ) $ (264,067 ) Denominator for Basic Loss Per Share 251,211 130,800 217,050 125,240 Potentially dilutive shares of Sorrento common stock issuable upon Semnur Share Exchange 6,459 9,645 6,459 7,025 Denominator for Diluted Loss Per Share 257,670 140,445 223,509 132,265 Basic Loss Per Share $ (0.33 ) $ (0.49 ) $ (1.05 ) $ (1.83 ) Diluted Loss Per Share $ (0.33 ) $ (0.50 ) $ (1.05 ) $ (2.00 ) The potentially dilutive stock options that would have been excluded because the effect would have been anti-dilutive for the nine months ended September 30, 2020 and 2019 were 9.3 million and 9.7 million, respectively. The potentially dilutive warrants that would have been excluded because the effect would have been anti-dilutive for the nine months ended September 30, 2020 and 2019 were 18.6 million and 47.8 million, respectively. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Segment Information | 14. Segment Information The Company operates in two operating and reportable segments, Sorrento Therapeutics and Scilex. With the exception of unrestricted cash balances, the Company’s Chief Operating Decision Maker does not regularly review asset information by reportable segment and, therefore, it does not report asset information by reportable segment. The majority of long-lived assets for both segments are located in the United States. The following table presents information about the Company’s reportable segments for the three and nine months ended September 30, 2020 and 2019 (in thousands): Three Months Ended September 30, 2020 2019 Sorrento Therapeutics Scilex Total Sorrento Therapeutics Scilex Total External revenues $ 3,927 $ 7,826 $ 11,753 $ 2,007 $ 3,771 $ 5,778 Operating expenses 82,868 11,989 94,857 34,480 24,581 59,061 Operating loss (78,941 ) (4,163 ) (83,104 ) (32,473 ) (20,810 ) (53,283 ) Unrestricted cash 71,004 4,172 75,176 20,860 13,789 34,649 Nine Months Ended September 30, 2020 2019 Sorrento Therapeutics Scilex Total Sorrento Therapeutics Scilex Total External revenues $ 9,694 $ 18,787 $ 28,481 $ 7,109 $ 11,289 $ 18,398 Operating expenses 157,559 44,917 202,476 105,912 139,300 $ 245,212 Operating loss (147,865 ) (26,130 ) (173,995 ) (98,803 ) (128,011 ) (226,814 ) Unrestricted cash 71,004 4,172 75,176 20,860 13,789 34,649 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | 15. Subsequent Events License Agreement with Personalized Stem Cells, Inc. On October 12, 2020, the Company entered into a license agreement (the “License Agreement”) with Personalized Stem Cells, Inc. (“PSC”). Pursuant to the License Agreement, PSC granted the Company an exclusive license and right under certain patents, certain know-how and other intellectual property to fully utilize, exploit and commercialize certain products and services using allogeneic adipose-derived stem cells for or in respect of human health, including the diagnosis and treatment and/or cure of any human disease or disorder (excluding commercial sales for the diagnosis, treatment and/or cure of SARS-CoV-2 or other respiratory diseases in the People’s Republic of China) worldwide (excluding the People’s Republic of China for products directed at COVID-19 or other respiratory diseases). PSC also agreed to transfer certain cell lines composed of stromal vascular cells, master cell banks and finished final drug lots (the “Product Materials”) to the Company. The Company agreed to grant PSC rights to use data derived by the Company from a certain Phase I COVID-19 study for PSC’s own programs that are not competitive with the businesses or activities of the Company, and for PSC to sublicense such data to third parties for research, development and regulatory purposes. As consideration for the license under the License Agreement, the Company has agreed to pay PSC an upfront license fee of $3.5 million in cash. |
Description of Business and B_2
Description of Business and Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation 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. These consolidated financial statements should be read in conjunction with the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019. Operating results for interim periods are not expected to be indicative of operating results for the Company’s 2020 fiscal year, or any subsequent period. The unaudited interim financial statements included herein reflect all normal and recurring adjustments that are necessary for a fair presentation of the results for the interim periods presented. |
Use of Estimates | Use of Estimates To prepare consolidated financial statements in conformity with accounting principles generally accepted in the U.S. (“U.S. GAAP”), management must make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. |
Significant Accounting Policies | Significant Accounting Policies During the nine months ended September 30, 2020, there have been no changes to the Company`s significant accounting policies as described in its Annual Report on Form 10-K for the fiscal year ended December 31, 2019 outside of new accounting pronouncements as described below. |
Revenue Recognition | Revenue Recognition The following table shows revenue disaggregated by product and service type for the three and nine months ended September 30, 2020 and 2019 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Scilex Pharmaceuticals Inc. product sales $ 7,837 $ 3,770 $ 18,806 $ 11,289 Other product revenue 37 40 110 579 Net product revenue $ 7,874 $ 3,810 $ 18,916 $ 11,868 Concortis Biosystems Corporation $ 2,261 $ 1,607 $ 5,089 $ 4,622 Bioserv Corporation 1,498 233 4,116 1,540 Other service revenue 120 128 360 368 Service revenue $ 3,879 $ 1,968 $ 9,565 $ 6,530 |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, In August 2018, the FASB issued ASU No. 2018-13, Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement, In December 2019, the FASB issued ASU No. 2019-12, Income Taxes Topic 740): Simplifying the Accounting for Income Taxes. In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment (Topic 350). |
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 negative working capital and 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, debt servicing 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 for one year after the date the financial statements are issued. 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. Furthermore, the spread of COVID-19, which has caused a broad impact globally, may materially affect the Company economically. While the potential economic impact brought by, and the duration of, COVID-19 may be difficult to assess or predict, a widespread pandemic could result in significant disruption of global financial markets, reducing the Company’s ability to access capital, which could, in the future, negatively affect its liquidity. 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. |
Description of Business and B_3
Description of Business and Basis of Presentation (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Revenue Disaggregated by Product and Service Type | The following table shows revenue disaggregated by product and service type for the three and nine months ended September 30, 2020 and 2019 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Scilex Pharmaceuticals Inc. product sales $ 7,837 $ 3,770 $ 18,806 $ 11,289 Other product revenue 37 40 110 579 Net product revenue $ 7,874 $ 3,810 $ 18,916 $ 11,868 Concortis Biosystems Corporation $ 2,261 $ 1,607 $ 5,089 $ 4,622 Bioserv Corporation 1,498 233 4,116 1,540 Other service revenue 120 128 360 368 Service revenue $ 3,879 $ 1,968 $ 9,565 $ 6,530 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
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 September 30, 2020 Balance Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Cash and cash equivalents $ 75,176 $ 75,176 $ — $ — Restricted cash 45,000 45,000 — — Total assets $ 120,176 $ 120,176 $ — $ — Liabilities: Derivative liabilities - non-current $ 42,900 $ — $ — $ 42,900 Acquisition consideration payable 398 — — 398 Acquisition consideration payable - non-current 549 — — 549 Total liabilities $ 43,847 $ — $ — $ 43,847 Fair Value Measurements at December 31, 2019 Balance Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Cash and cash equivalents $ 22,521 $ 22,521 $ — $ — Restricted cash 58,248 58,248 — — Total assets $ 80,769 $ 80,769 $ — $ — Liabilities: Derivative liabilities $ 8,800 $ — $ — $ 8,800 Derivative liabilities - non-current 35,000 — — 35,000 Acquisition consideration payable 908 — — 908 Acquisition consideration payable - non-current 39 — — 39 Total liabilities $ 44,747 $ — $ — $ 44,747 |
Summary of Derivative Liabilities Measured at Fair Value Using Significant Unobservable Inputs (Level 3) | The following table includes a summary of the derivative liabilities measured at fair value using significant unobservable inputs (Level 3) during the nine months ended September 30, 2020: (in thousands) Fair Value Beginning Balance at December 31, 2019 $ 43,800 Additions 8,800 Re-measurement of Fair Value (9,700 ) Ending Balance at September 30, 2020 $ 42,900 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Summary of Company's Identifiable Intangible Assets | A summary of the Company’s identifiable intangible assets as of September 30, 2020 and December 31, 2019 is as follows (in thousands, except for years): September 30, 2020 Weighted Average Amortization Period (Years) Gross Carrying Amount Accumulated Amortization Intangibles, Net Customer relationships 6 $ 1,585 $ 1,419 $ 166 Acquired developed technology 19 3,410 1,192 2,218 Acquired in-process research and development — 33,516 — 33,516 Technology placed in service 15 21,940 2,925 19,015 Patent rights 15 32,720 8,558 24,162 Assembled workforce 5 605 192 413 Internally developed software 1 520 43 477 Total intangible assets $ 94,296 $ 14,329 $ 79,967 December 31, 2019 Weighted Average Amortization Period (Years) Gross Carrying Amount Accumulated Amortization Intangibles, Net Customer relationships 6 $ 1,585 $ 1,401 $ 184 Acquired developed technology 19 3,410 1,060 2,350 Acquired in-process research and development — 14,360 — 14,360 Technology placed in service 15 21,940 1,828 20,112 Patent rights 15 32,720 6,922 25,798 Assembled workforce 5 605 101 504 Total intangible assets $ 74,620 $ 11,312 $ 63,308 |
Schedule of Estimated Future Amortization Expense Related to Intangible Assets | Aggregate amortization expense was $1.0 million for each of the three months ended September 30, 2020 and 2019. Aggregate amortization expense was $3.0 million and $2.9 million for the nine months ended September 30, 2020 and 2019, respectively. Estimated future amortization expense related to intangible assets, excluding indefinite-lived intangible assets, at September 30, 2020 is as follows (in thousands): Years Ending December 31, Amount 2020 (Remaining three months) $ 1,035 2021 4,400 2022 3,966 2023 3,961 2024 3,870 2025 3,845 Thereafter 25,373 Total expected future amortization $ 46,450 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt and Unamortized Discount Balances | Borrowings of the Scilex Notes consisted of the following (in thousands): September 30, 2020 December 31, 2019 Principal $ 218,187 $ 221,666 Unamortized debt discount (60,131 ) (67,839 ) Unamortized debt issuance costs (3,866 ) (4,360 ) Carrying value $ 154,190 $ 149,467 Estimated fair value $ 171,100 $ 150,800 |
Future Minimum Payments under Amended and Restated Loan and Security Agreement | Future minimum payments under the Scilex Notes, based on a percentage of projected net sales of ZTlido Year Ending December 31, 2020 (Remaining three months) $ 1,315 2021 4,636 2022 5,535 2023 7,233 2024 8,830 2025 10,142 Thereafter 180,496 Total future minimum payments 218,187 Unamortized debt discount (60,131 ) Unamortized capitalized debt issuance costs (3,866 ) Total Scilex Notes 154,190 Current portion (4,732 ) Long-term portion of Scilex Notes $ 149,458 |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of Stock Option Activity | A summary of stock option activity under the Sorrento Therapeutics, Inc. 2009 Stock Incentive Plan and the Sorrento Therapeutics, Inc. 2019 Stock Incentive Plan for the nine months ended September 30, 2020 is as follows (in thousands, except price data): Options Outstanding Weighted- Average Exercise Price Aggregate Intrinsic Value Outstanding at December 31, 2019 14,586,661 $ 4.36 $ 5,136 Options Granted 6,339,500 $ 5.25 Options Canceled (2,682,068 ) $ 4.57 Options Exercised (1,213,924 ) $ 4.21 Outstanding at September 30, 2020 17,030,169 $ 4.68 $ 111,676 |
Summary of Estimated Fair Value of Stock Option Grant Determined on Grant Date Using black-Scholes Valuation Model | The estimated fair value of each stock option grant was determined on the grant date using the Black-Scholes valuation model with the following weighted-average assumptions. Nine Months Ended September 30, 2020 2019 Weighted-average grant date fair value $ 4.14 $ 3.05 Dividend yield — % — % Volatility 104 % 100 % Risk-free interest rate 0.45 % 1.87 % Expected life of options (years) 5.7 6.1 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Supplemental Quantitative Information Related to Leases | Supplemental quantitative information related to leases includes the following (in thousands, except for years and percentages): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Operating cash flows used for operating leases $ 2,531 $ 1,712 $ 7,354 $ 5,057 ROU assets obtained in exchange for new and amended operating lease liabilities $ 1,083 $ 2,030 $ 1,878 $ 6,777 Operating lease expense $ 2,580 $ 2,554 $ 7,550 $ 7,416 Weighted average remaining lease term in years 8.6 9.5 8.6 9.5 Weighted average discount rate 12.2 % 12.2 % 12.2 % 12.2 % |
Schedule of Operating Lease Liability Maturities | Maturities of lease liabilities were as follows (in thousands): Years ending December 31, Operating leases 2020 (Remaining three months) $ 2,576 2021 9,985 2022 10,047 2023 10,285 2024 10,418 2025 9,757 Thereafter 43,174 Total lease payments 96,242 Less imputed interest (41,319 ) Total lease liabilities as of September 30, 2020 $ 54,923 |
Loss Per Share (Tables)
Loss Per Share (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Reconciliation of Basic and Diluted Loss Per Share | The following table sets forth the reconciliation of basic and diluted loss per share for the three and nine months ended September 30, 2020 and 2019 (in thousands except per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Numerator Net loss attributable to Sorrento $ (84,023 ) $ (64,415 ) $ (226,959 ) $ (229,248 ) Net loss attributable to Semnur holders of Scilex Holding (1,868 ) (6,205 ) (8,524 ) (34,819 ) Net loss used for diluted earnings per share $ (85,891 ) $ (70,620 ) $ (235,483 ) $ (264,067 ) Denominator for Basic Loss Per Share 251,211 130,800 217,050 125,240 Potentially dilutive shares of Sorrento common stock issuable upon Semnur Share Exchange 6,459 9,645 6,459 7,025 Denominator for Diluted Loss Per Share 257,670 140,445 223,509 132,265 Basic Loss Per Share $ (0.33 ) $ (0.49 ) $ (1.05 ) $ (1.83 ) Diluted Loss Per Share $ (0.33 ) $ (0.50 ) $ (1.05 ) $ (2.00 ) |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Summary of Information by Reportable Segments | The following table presents information about the Company’s reportable segments for the three and nine months ended September 30, 2020 and 2019 (in thousands): Three Months Ended September 30, 2020 2019 Sorrento Therapeutics Scilex Total Sorrento Therapeutics Scilex Total External revenues $ 3,927 $ 7,826 $ 11,753 $ 2,007 $ 3,771 $ 5,778 Operating expenses 82,868 11,989 94,857 34,480 24,581 59,061 Operating loss (78,941 ) (4,163 ) (83,104 ) (32,473 ) (20,810 ) (53,283 ) Unrestricted cash 71,004 4,172 75,176 20,860 13,789 34,649 Nine Months Ended September 30, 2020 2019 Sorrento Therapeutics Scilex Total Sorrento Therapeutics Scilex Total External revenues $ 9,694 $ 18,787 $ 28,481 $ 7,109 $ 11,289 $ 18,398 Operating expenses 157,559 44,917 202,476 105,912 139,300 $ 245,212 Operating loss (147,865 ) (26,130 ) (173,995 ) (98,803 ) (128,011 ) (226,814 ) Unrestricted cash 71,004 4,172 75,176 20,860 13,789 34,649 |
Description of Business and B_4
Description of Business and Basis of Presentation - Schedule of Revenue Disaggregated by Product and Service Type (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Disaggregation Of Revenue [Line Items] | ||||
Revenues | $ 11,753 | $ 5,778 | $ 28,481 | $ 18,398 |
Scilex Pharmaceuticals Inc. product sales | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenues | 7,837 | 3,770 | 18,806 | 11,289 |
Other Product Revenue | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenues | 37 | 40 | 110 | 579 |
Product | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenues | 7,874 | 3,810 | 18,916 | 11,868 |
Concortis Biosystems Corporation | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenues | 2,261 | 1,607 | 5,089 | 4,622 |
Bioserv Corporation | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenues | 1,498 | 233 | 4,116 | 1,540 |
Other Service Revenue | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenues | 120 | 128 | 360 | 368 |
Service revenue | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenues | $ 3,879 | $ 1,968 | $ 9,565 | $ 6,530 |
Description of Business and B_5
Description of Business and Basis of Presentation - Additional Information (Details) | Sep. 30, 2020 |
ASU 2016-13 | |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |
Change in Accounting Principle, Accounting Standards Update, Adopted [true false] | true |
Change in Accounting Principle, Accounting Standards Update, Adoption Date | Jan. 1, 2020 |
Change in Accounting Principle, Accounting Standards Update, Immaterial Effect [true false] | true |
ASU 2018-13 | |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |
Change in Accounting Principle, Accounting Standards Update, Adopted [true false] | true |
Change in Accounting Principle, Accounting Standards Update, Immaterial Effect [true false] | true |
ASU 2017-04 | |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |
Change in Accounting Principle, Accounting Standards Update, Adopted [true false] | true |
Change in Accounting Principle, Accounting Standards Update, Immaterial Effect [true false] | true |
Change in Accounting Principle, Accounting Standards Update, Early Adoption [true false] | true |
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 | Sep. 30, 2020 | Dec. 31, 2019 |
Assets: | ||
Total assets | $ 120,176 | $ 80,769 |
Liabilities: | ||
Total liabilities | 43,847 | 44,747 |
Derivative liabilities - Non-current | ||
Liabilities: | ||
Total liabilities | 42,900 | 35,000 |
Acquisition consideration payable | ||
Liabilities: | ||
Total liabilities | 398 | 908 |
Acquisition consideration payable, non-current | ||
Liabilities: | ||
Total liabilities | 549 | 39 |
Derivative liabilities | ||
Liabilities: | ||
Total liabilities | 8,800 | |
Quoted Prices in Active Markets (Level 1) | ||
Assets: | ||
Total assets | 120,176 | 80,769 |
Liabilities: | ||
Total liabilities | 0 | 0 |
Quoted Prices in Active Markets (Level 1) | Derivative liabilities - Non-current | ||
Liabilities: | ||
Total liabilities | 0 | 0 |
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 | 0 |
Quoted Prices in Active Markets (Level 1) | Derivative liabilities | ||
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) | Derivative liabilities - Non-current | ||
Liabilities: | ||
Total liabilities | 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 | 0 |
Significant Other Observable Inputs (Level 2) | Derivative liabilities | ||
Liabilities: | ||
Total liabilities | 0 | |
Significant Unobservable Inputs (Level 3) | ||
Assets: | ||
Total assets | 0 | 0 |
Liabilities: | ||
Total liabilities | 43,847 | 44,747 |
Significant Unobservable Inputs (Level 3) | Derivative liabilities - Non-current | ||
Liabilities: | ||
Total liabilities | 42,900 | 35,000 |
Significant Unobservable Inputs (Level 3) | Acquisition consideration payable | ||
Liabilities: | ||
Total liabilities | 398 | 908 |
Significant Unobservable Inputs (Level 3) | Acquisition consideration payable, non-current | ||
Liabilities: | ||
Total liabilities | 549 | 39 |
Significant Unobservable Inputs (Level 3) | Derivative liabilities | ||
Liabilities: | ||
Total liabilities | 8,800 | |
Cash and cash equivalents | ||
Assets: | ||
Total assets | 75,176 | 22,521 |
Cash and cash equivalents | Quoted Prices in Active Markets (Level 1) | ||
Assets: | ||
Total assets | 75,176 | 22,521 |
Cash and cash equivalents | Significant Other Observable Inputs (Level 2) | ||
Assets: | ||
Total assets | 0 | 0 |
Cash and cash equivalents | Significant Unobservable Inputs (Level 3) | ||
Assets: | ||
Total assets | 0 | 0 |
Restricted cash | ||
Assets: | ||
Total assets | 45,000 | 58,248 |
Restricted cash | Quoted Prices in Active Markets (Level 1) | ||
Assets: | ||
Total assets | 45,000 | 58,248 |
Restricted cash | Significant Other Observable Inputs (Level 2) | ||
Assets: | ||
Total assets | 0 | 0 |
Restricted cash | Significant Unobservable Inputs (Level 3) | ||
Assets: | ||
Total assets | $ 0 | $ 0 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | |
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | ||||
Gain (loss) on derivative liabilities | $ (1,000) | $ (10,700) | $ 5,900 | $ (35,792) |
Risk Adjusted Net Sales Forecast | Scilex Notes | ||||
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | ||||
Derivative liability, measurement input | 0.066 | 0.066 | ||
Effective Debt Yield | ||||
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | ||||
Derivative liability, measurement input | 0.18 | 0.18 | ||
Revenue Multiple | Minimum | ||||
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | ||||
Derivative liability, measurement input | 0.55 | 0.55 | ||
Revenue Multiple | Maximum | ||||
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | ||||
Derivative liability, measurement input | 1 | 1 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Derivative Liabilities Measured at Fair Value Using Significant Unobservable Inputs (Level 3) (Details) - Derivative Liabilities $ in Thousands | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Beginning balance | $ 43,800 |
Additions | 8,800 |
Re-measurement of Fair Value | (9,700) |
Ending balance | $ 42,900 |
Investments - Additional Inform
Investments - Additional Information (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Investments Debt And Equity Securities [Abstract] | |
Equity method investment, impairment losses | $ 3.8 |
Investments - NANTibody - Addit
Investments - NANTibody - Additional Information (Details) | Jul. 03, 2018USD ($) | Jul. 02, 2017USD ($) | May 31, 2015USD ($)joint_venture | Sep. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Dec. 31, 2013USD ($)shares | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Jun. 30, 2017USD ($) | 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 | $ 256,420,000 | $ 256,420,000 | $ 262,241,000 | |||||||||||||
Equity balance of equity method investments | 145,284,000 | $ 80,215,000 | $ 6,669,000 | $ 54,616,000 | 145,284,000 | $ 6,669,000 | 32,756,000 | $ 207,500,000 | ||||||||
Net (loss) income on equity method investments | (87,109,000) | (75,212,000) | (241,283,000) | (293,586,000) | ||||||||||||
Current assets of equity method investment | 105,988,000 | 105,988,000 | 67,588,000 | |||||||||||||
Current liabilities of equity method investment | 92,125,000 | 92,125,000 | $ 115,206,000 | |||||||||||||
NANTibody | ||||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||||
Initial joint funding | $ 100,000,000 | |||||||||||||||
Equity method investment ownership percentage | 40.00% | 40.00% | ||||||||||||||
Initial joint funding contributed | $ 40,000,000 | |||||||||||||||
Number of board members | board_member | 2 | |||||||||||||||
Cash and cash equivalents of equity method investment | $ 100,000,000 | $ 9,500,000 | $ 99,600,000 | |||||||||||||
Equity method investments | $ 3,700,000 | 40,000,000 | $ 600,000 | $ 2,500,000 | $ 600,000 | $ 2,500,000 | ||||||||||
Equity balance of equity method investments | 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 | |||||||||||||||
Net (loss) income on equity method investments | (1,600,000) | $ (1,700,000) | ||||||||||||||
Current assets of equity method investment | 6,400,000 | |||||||||||||||
Current liabilities of equity method investment | 4,700,000 | |||||||||||||||
Noncurrent assets of equity method investment | 200,000 | |||||||||||||||
Noncurrent liabilities of equity method investment | $ 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 | 3 | |||||||||||||||
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] | ||||||||||||||||
Issuance of common stock upon acquisition (in shares) | shares | 3,000,000 | |||||||||||||||
Cash consideration to equity holders | $ 380,000 | |||||||||||||||
Total purchase consideration | $ 29,100,000 | |||||||||||||||
Upfront fee received from selling equity interests in IgDraSol | $ 90,100,000 | |||||||||||||||
Restricted money to be funding two joint ventures | $ 60,000,000 |
Investments - NantStem - Additi
Investments - NantStem - Additional Information (Details) - USD ($) | Oct. 13, 2015 | Sep. 30, 2020 | Jun. 30, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Jul. 31, 2015 |
Schedule of Equity Method Investments [Line Items] | ||||||||||
Equity method investments | $ 256,420,000 | $ 256,420,000 | $ 262,241,000 | |||||||
Net (loss) income on equity method investments | (87,109,000) | $ (75,212,000) | (241,283,000) | $ (293,586,000) | ||||||
Current assets of equity method investment | 105,988,000 | 105,988,000 | 67,588,000 | |||||||
Current liabilities of equity method investment | $ 92,125,000 | $ 92,125,000 | $ 115,206,000 | |||||||
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 | |||||||||
Equity method investment ownership percentage | 20.00% | 20.00% | ||||||||
Equity method investments | $ 18,000,000 | $ 17,800,000 | $ 18,000,000 | $ 17,800,000 | ||||||
Net (loss) income on equity method investments | $ 900,000 | $ (300,000) | ||||||||
Current assets of equity method investment | 78,900,000 | |||||||||
Noncurrent assets of equity method investment | 2,200,000 | |||||||||
Current liabilities of equity method investment | 0 | |||||||||
Noncurrent liabilities of equity method investment | $ 0 | |||||||||
Nant Cancer Stem LLC | NantBioScience, Inc. | ||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||
Initial joint funding contributed | $ 60,000,000 | |||||||||
Equity method investment ownership percentage | 60.00% |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Goodwill And Intangible Assets [Line Items] | |||||
Goodwill | $ 38,298,000 | $ 38,298,000 | $ 38,298,000 | ||
Indefinite-lived intangible assets | 33,500,000 | 33,500,000 | |||
Intangible amortization | 1,034,000 | $ 991,000 | 3,018,000 | $ 2,949,000 | |
Sorrento Therapeutics | |||||
Goodwill And Intangible Assets [Line Items] | |||||
Goodwill | 31,600,000 | 31,600,000 | |||
Scilex Pharmaceuticals, Inc | |||||
Goodwill And Intangible Assets [Line Items] | |||||
Goodwill | $ 6,700,000 | 6,700,000 | |||
Impairment of goodwill | $ 0 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Summary of Company's Identifiable Intangible Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 94,296 | $ 74,620 |
Accumulated Amortization | 14,329 | 11,312 |
Intangibles, Net | $ 79,967 | $ 63,308 |
Customer relationships | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period (Years) | 6 years | 6 years |
Gross Carrying Amount | $ 1,585 | $ 1,585 |
Accumulated Amortization | 1,419 | 1,401 |
Intangibles, Net | $ 166 | $ 184 |
Acquired developed technology | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period (Years) | 19 years | 19 years |
Gross Carrying Amount | $ 3,410 | $ 3,410 |
Accumulated Amortization | 1,192 | 1,060 |
Intangibles, Net | $ 2,218 | $ 2,350 |
Acquired in-process research and development | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period (Years) | 0 years | 0 years |
Gross Carrying Amount | $ 33,516 | $ 14,360 |
Intangibles, Net | $ 33,516 | $ 14,360 |
Technology placed in service | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period (Years) | 15 years | 15 years |
Gross Carrying Amount | $ 21,940 | $ 21,940 |
Accumulated Amortization | 2,925 | 1,828 |
Intangibles, Net | $ 19,015 | $ 20,112 |
Patent rights | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period (Years) | 15 years | 15 years |
Gross Carrying Amount | $ 32,720 | $ 32,720 |
Accumulated Amortization | 8,558 | 6,922 |
Intangibles, Net | $ 24,162 | $ 25,798 |
Assembled workforce | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period (Years) | 5 years | 5 years |
Gross Carrying Amount | $ 605 | $ 605 |
Accumulated Amortization | 192 | 101 |
Intangibles, Net | $ 413 | $ 504 |
Internally developed software | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period (Years) | 1 year | |
Gross Carrying Amount | $ 520 | |
Accumulated Amortization | 43 | |
Intangibles, Net | $ 477 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Schedule of Estimated Future Amortization Expense Related to Intangible Assets (Details) $ in Thousands | Sep. 30, 2020USD ($) |
Goodwill And Intangible Assets Disclosure [Abstract] | |
2020 (Remaining three months) | $ 1,035 |
2021 | 4,400 |
2022 | 3,966 |
2023 | 3,961 |
2024 | 3,870 |
2025 | 3,845 |
Thereafter | 25,373 |
Total expected future amortization | $ 46,450 |
Significant Agreements and Co_2
Significant Agreements and Contracts - Acquisition of SmartPharm Therapeutics, Inc. - Additional Information (Details) - SmartPharm shares in Millions, $ in Millions | Sep. 01, 2020USD ($)shares |
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |
Consideration transferred | $ 19.5 |
Stock consideration value | shares | 1.8 |
Purchase price allocation resulted in net identifiable assets | $ 19.5 |
Purchase price allocation resulted in net identifiable assets, intangible assets | 19.2 |
Purchase price allocation resulted in net identifiable assets, other net assets | $ 0.3 |
Significant Agreements and Co_3
Significant Agreements and Contracts - Acquisition of Semnur Pharmaceuticals - Additional Information (Details) - Semnur - USD ($) | Sep. 28, 2020 | Mar. 18, 2019 | Mar. 31, 2019 | Sep. 30, 2020 |
Research and Development Arrangement, Contract to Perform for Others [Line Items] | ||||
Consideration transferred | $ 70,000,000 | |||
Cash consideration | 15,000,000 | |||
Stock consideration value | $ 55,000,000 | 55,000,000 | ||
Asset acquisition, transaction costs | 3,100,000 | |||
Asset acquisition, liabilities assumed | 4,200,000 | |||
Eligible percentage of equity interest acquired by third party to exchange share | 100.00% | |||
Share exchange period | 60 days | |||
Trailing volume weighted average share price, term | 30 days | |||
Stock consideration value per share (usd per share) | $ 5.55 | |||
Cash consideration to equity holders | $ 55,000,000 | |||
Stock consideration common stock value | $ 55,000,000 | |||
Contingent consideration, liability | $ 0 | |||
Acquired in-process research and development | $ 75,300,000 | |||
Milestones Achievement | ||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | ||||
Additional cash consideration upon certain milestones | 280,000,000 | |||
New Drug Application, First Approval | ||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | ||||
Asset acquisition, contingent consideration arrangements | 40,000,000 | |||
Cumulative Net Sales, $100 million | ||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | ||||
Asset acquisition, contingent consideration arrangements | 20,000,000 | |||
Asset acquisition, contingent consideration arrangements, cumulative net sales threshold | 100,000,000 | |||
Cumulative Net Sales, $250 million | ||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | ||||
Asset acquisition, contingent consideration arrangements | 20,000,000 | |||
Asset acquisition, contingent consideration arrangements, cumulative net sales threshold | 250,000,000 | |||
Cumulative Net Sales, $500 million | ||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | ||||
Asset acquisition, contingent consideration arrangements | 50,000,000 | |||
Asset acquisition, contingent consideration arrangements, cumulative net sales threshold | 500,000,000 | |||
Cumulative Net Sales, $750 million | ||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | ||||
Asset acquisition, contingent consideration arrangements | 150,000,000 | |||
Asset acquisition, contingent consideration arrangements, cumulative net sales threshold | $ 750,000,000 |
Significant Agreements and Co_4
Significant Agreements and Contracts - Semnur Cash Exchange Payment - Additional Information (Details) - Semnur Cash Exchange Payment - Subsequent Event $ in Millions | Oct. 09, 2020USD ($) |
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |
Stock consideration value | $ 55 |
Percentage of outstanding common stock held | 82.30% |
Significant Agreements and Co_5
Significant Agreements and Contracts -License Agreement with ACEA Therapeutics, Inc. - Additional Information (Details) - ACEA Therapeutics, Inc - License Agreement $ in Millions | 1 Months Ended |
Jul. 31, 2020USD ($) | |
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |
Up-front licensee fee | $ 15 |
Minimum | |
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |
Percentage of upfront payment or milestone payment comprised of common stock | 50.00% |
Significant Agreements and Co_6
Significant Agreements and Contracts - License Agreement with The Trustees of Columbia University in the City of New York - Additional Information (Details) - Columbia License Agreement - License Agreement $ in Millions | 1 Months Ended |
Jul. 31, 2020USD ($) | |
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |
Up-front license fee payable within ten business days | $ 5 |
Minimum annual royalty payments | $ 1 |
Significant Agreements and Co_7
Significant Agreements and Contracts - License Agreement with Mayo Foundation - Additional Information (Details) - Mayo - License Agreement shares in Millions, $ in Millions | 1 Months Ended |
Sep. 30, 2020USD ($)shares | |
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |
Up-front licensee fee | $ 9.3 |
Cash consideration to equity holders | $ 2.3 |
Issuance of common stock upon acquisition (in shares) | shares | 996,803 |
Preclinical and Clinical Research Expenses | Maximum | |
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |
Acquired in-process research and development | $ 3.4 |
Development and manufacturing expenses | |
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |
Acquired in-process research and development | $ 2 |
Significant Agreements and Co_8
Significant Agreements and Contracts - License Agreement with NantCell - Additional Information (Details) - Nant Cell - USD ($) $ in Millions | 1 Months Ended | |
Apr. 30, 2015 | Sep. 30, 2020 | |
Research and Development Arrangement, Contract to Perform for Others [Line Items] | ||
Upfront payment received from customers | $ 10 | |
Common stock received (in shares) | 10,000,000 | |
Vested equity received | $ 100 | |
Cost-method investments, aggregate carrying amount | $ 100 | |
Maximum | ||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | ||
Royalty rate percent of net sales | (5.00%) |
Debt - 2018 Purchase Agreement
Debt - 2018 Purchase Agreement and Indenture for Scilex - Additional Information (Details) - Senior Notes - Scilex Pharmaceuticals, Inc - Senior Secured Notes, Due 2026 - USD ($) | Sep. 07, 2018 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||||||
Face value of loan | $ 224,000,000 | $ 218,187,000 | $ 218,187,000 | $ 221,666,000 | ||
Proceeds from issuance of senior long-term debt | $ 140,000,000 | |||||
Principal payments | $ 3,500,000 | $ 1,700,000 | ||||
Debt instrument, interest rate, effective percentage | 6.50% | 6.50% | ||||
Amount of debt discount and debt issuance included in interest expense | $ 2,500,000 | $ 3,200,000 | $ 8,200,000 | $ 12,000,000 |
Debt - 2018 Purchase Agreemen_2
Debt - 2018 Purchase Agreement and Indenture for Scilex - Schedule of Long-Term Debt and Unamortized Discount Balances (Details) - Senior Secured Notes, Due 2026 - Scilex Pharmaceuticals, Inc - Senior Notes - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 07, 2018 |
Debt Instrument [Line Items] | |||
Principal | $ 218,187,000 | $ 221,666,000 | $ 224,000,000 |
Unamortized debt discount | (60,131,000) | (67,839,000) | |
Unamortized debt issuance costs | (3,866,000) | (4,360,000) | |
Carrying value | 154,190,000 | 149,467,000 | |
Estimated fair value | $ 171,100,000 | $ 150,800,000 |
Debt - Future Minimum Payments
Debt - Future Minimum Payments (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||
Current portion | $ (18,529) | $ (36,261) |
Long-term portion of Scilex Notes | 149,459 | 199,088 |
Senior Secured Notes, Due 2026 | Scilex Pharmaceuticals, Inc | Senior Notes | ||
Debt Instrument [Line Items] | ||
2020 (Remaining three months) | 1,315 | |
2021 | 4,636 | |
2022 | 5,535 | |
2023 | 7,233 | |
2024 | 8,830 | |
2025 | 10,142 | |
Thereafter | 180,496 | |
Total future minimum payments | 218,187 | |
Unamortized debt discount | (60,131) | (67,839) |
Unamortized capitalized debt issuance costs | (3,866) | |
Total Scilex Notes | 154,190 | $ 149,467 |
Current portion | (4,732) | |
Long-term portion of Scilex Notes | $ 149,458 |
Debt - 2018 Oaktree Term Loan A
Debt - 2018 Oaktree Term Loan Agreement - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | May 31, 2019 | Nov. 30, 2018 | |
Debt Instrument [Line Items] | ||||||
Loss on debt extinguishment | $ (51,939,000) | |||||
Interest expense | $ 2,563,000 | $ 9,459,000 | 17,686,000 | $ 28,059,000 | ||
Oaktree Capital Management, L.P. | Oaktree Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Face value of loan | $ 20,000,000 | $ 100,000,000 | ||||
Repayments of debt | 120,000,000 | |||||
Debt prepayment costs | 9,400,000 | |||||
Loss on debt extinguishment | 51,900,000 | |||||
Interest expense | 0 | 500,000 | 3,000,000 | 1,400,000 | ||
Amount of debt discount and debt issuance included in interest expense | $ 0 | $ 600,000 | $ 2,200,000 | $ 1,700,000 |
Stockholders' Equity - Aspire T
Stockholders' Equity - Aspire Transaction - Additional Information (Details) - Aspire Purchase Agreement - USD ($) | 1 Months Ended | 9 Months Ended | |
Feb. 29, 2020 | Sep. 30, 2020 | Apr. 24, 2020 | |
Class Of Stock [Line Items] | |||
Potential proceeds from issuance, public offering, maximum | $ 75,000,000 | ||
Stock issued as commitment fee | 897,308 | ||
Common stock sold in registered direct offering | 33,825,010 | ||
Sale of stock proceeds, net | $ 75,000,000 | ||
Value of shares available for issuance | $ 75,000,000 |
Stockholders' Equity - Equity D
Stockholders' Equity - Equity Distribution Agreement - Additional Information (Details) - Distribution Agreement | Apr. 27, 2020USD ($)shares |
Class Of Stock [Line Items] | |
Common stock sold in registered direct offering | shares | 2,120,149 |
Sale of stock proceeds, net | $ 7,400,000 |
Maximum | |
Class Of Stock [Line Items] | |
Proceeds from equity offerings, net of issuance costs | $ 75,000,000 |
Stockholders' Equity - Sales Ag
Stockholders' Equity - Sales Agreement - Additional Information (Details) - Sales Agreement - USD ($) $ in Millions | Apr. 27, 2020 | Nov. 06, 2020 | Sep. 30, 2020 |
Class Of Stock [Line Items] | |||
Proceeds from equity offerings, net of issuance costs | $ 250 | ||
Sales agent commission percentage | 3.00% | ||
Common stock sold in registered direct offering | 17,579,496 | ||
Sale of stock proceeds, net | $ 122.8 | ||
Subsequent Event | |||
Class Of Stock [Line Items] | |||
Common stock sold in registered direct offering | 4,596,637 | ||
Sale of stock proceeds, net | $ 36.2 |
Stockholders' Equity - Common S
Stockholders' Equity - Common Stock Purchase Agreement - Additional Information (Details) - Purchase Agreement - USD ($) | Apr. 27, 2020 | Sep. 30, 2020 |
Class Of Stock [Line Items] | ||
Potential proceeds from issuance, public offering, maximum | $ 250,000,000 | |
Number of maximum shares available to direct for purchase per business day | 650,000 | |
Number of maximum shares available to direct for purchase per business day, optional increased amount | 3,600,000 | |
Maximum consideration available to direct for purchase per business day | $ 5,000,000 | |
Maximum percent of trading price for daily volume-weighted average purchase notice | 97.50% | |
Common stock sold in registered direct offering | 1,423,077 | |
Sale of stock proceeds, net | $ 8,000,000 |
Stock Based Compensation - Summ
Stock Based Compensation - Summary of Stock Option Activity (Details) $ / shares in Units, $ in Thousands | 9 Months Ended | |
Sep. 30, 2020USD ($)$ / sharesshares | Dec. 31, 2019USD ($) | |
Options Outstanding | ||
Options Outstanding beginning balance (in shares) | shares | 14,586,661 | |
Options Granted (in shares) | shares | 6,339,500 | |
Options Canceled (in shares) | shares | (2,682,068) | |
Options Exercised (in shares) | shares | (1,213,924) | |
Options Outstanding ending balance (in shares) | shares | 17,030,169 | |
Weighted-Average Exercise Price | ||
Weighted Average Exercise Price, beginning balance (USD per share) | $ / shares | $ 4.36 | |
Weighted Average Exercise Price, Options Granted (USD per share) | $ / shares | 5.25 | |
Weighted Average Exercise Price, Options Canceled (USD per share) | $ / shares | 4.57 | |
Weighted Average Exercise Price, Options Exercised (USD per share) | $ / shares | 4.21 | |
Weighted Average Exercise Price, ending balance (USD per share) | $ / shares | $ 4.68 | |
Aggregate Intrinsic Value | $ | $ 111,676 | $ 5,136 |
Stock Based Compensation - 2019
Stock Based Compensation - 2019 Stock Incentive Plan - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
2019 Stock Incentive Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 5 | $ 2.4 | $ 9.2 | $ 6.1 |
Unrecognized compensation cost related to unvested stock option grants | $ 34 | $ 34 | ||
Period for recognized compensation cost | 2 years 8 months 12 days | |||
Unrestricted Stock | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Unrestricted stock granted | 37,891 | 37,891 |
Stock Based Compensation - Su_2
Stock Based Compensation - Summary of Estimated Fair Value of Stock Option Grant Determined on Grant Date Using black-Scholes Valuation Model (Details) - Employee Stock Option - $ / shares | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Weighted-average grant date fair value | $ 4.14 | $ 3.05 |
Volatility | 104.00% | 100.00% |
Risk-free interest rate | 0.45% | 1.87% |
Expected life of options (years) | 5 years 8 months 12 days | 6 years 1 month 6 days |
Stock Based Compensation - Scil
Stock Based Compensation - Scilex Holding Company - Additional Information (Details) - Scilex Holding Company 2019 Stock Option Plan and Scilex Pharmaceuticals Inc. 2017 Equity Incentive Plan - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 1.3 | $ 1.6 | $ 4.1 | $ 2.6 |
Unrecognized compensation cost related to unvested stock option grants | $ 11.5 | $ 11.5 | ||
Period for recognized compensation cost | 2 years 6 months |
Stock Based Compensation - Empl
Stock Based Compensation - Employee Stock Purchase Plan - Additional Information (Details) - USD ($) | Oct. 16, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Stock-based compensation | $ 6,295,000 | $ 4,015,000 | $ 13,312,000 | $ 8,978,000 | |
2020 Employee Stock Purchase Plan | Subsequent Event | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Maximum percentage of their annual compensation | 15.00% | ||||
Stock-based compensation | $ 25,000 | ||||
Percentage of outstanding shares of common stock sold | 85.00% |
Stock Based Compensation - CEO
Stock Based Compensation - CEO Performance Award - Additional Information (Details) - Chief Executive Officer - C E O Performance Award $ / shares in Units, $ in Billions | Aug. 07, 2020USD ($)Tranche$ / sharesshares |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Option to purchase common stock period | 10 years |
Common stock sold in registered direct offering | shares | 24,935,882 |
Percentage of outstanding shares of common stock sold | 10.00% |
Number of tranches | Tranche | 10 |
First market capitalization milestone amount | $ 5 |
Amount of capitalization to meet next two milestones | 2 |
Amount of capitalization to meet next three milestones | 3 |
Amount of capitalization to meet next three milestones thereafter | 4 |
Amount of capitalization to meet final milestones | 5 |
Market capitalization to fully vest in award increase | $ 35 |
Exercise price per share | $ / shares | $ 17.30 |
Percentage of premium to closing sales price of common stock | 20.00% |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - NANTibody $ in Thousands | Apr. 03, 2019USD ($) |
Other Commitments [Line Items] | |
Damages sought to restore equity method investment | $ 40,000 |
Damages sought | $ 90,050 |
Commitments and Contingencies_2
Commitments and Contingencies - Operating Leases - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2020 | |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Operating lease remaining lease terms | 2 months 12 days |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Operating lease remaining lease terms | 9 years 2 months 12 days |
Operating lease option to extend, period | 5 years |
Commitments and Contingencies_3
Commitments and Contingencies - Supplemental Quantitative Information Related to Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | ||||
Operating cash flows used for operating leases | $ 2,531 | $ 1,712 | $ 7,354 | $ 5,057 |
ROU assets obtained in exchange for new and amended operating lease liabilities | 1,083 | 2,030 | 1,878 | 6,777 |
Operating lease expense | $ 2,580 | $ 2,554 | $ 7,550 | $ 7,416 |
Weighted average remaining lease term in years | 8 years 7 months 6 days | 9 years 6 months | 8 years 7 months 6 days | 9 years 6 months |
Weighted average discount rate | 12.20% | 12.20% | 12.20% | 12.20% |
Commitments and Contingencies_4
Commitments and Contingencies - Schedule of Operating Lease Liability Maturities (Details) $ in Thousands | Sep. 30, 2020USD ($) |
Commitments And Contingencies Disclosure [Abstract] | |
2020 (Remaining three months) | $ 2,576 |
2021 | 9,985 |
2022 | 10,047 |
2023 | 10,285 |
2024 | 10,418 |
2025 | 9,757 |
Thereafter | 43,174 |
Total lease payments | 96,242 |
Less imputed interest | (41,319) |
Total lease liabilities as of September 30, 2020 | $ 54,923 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | Mar. 27, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 |
Income Tax [Line Items] | |||||
CARES act of 2020, percentage of alternative minimum tax credit refundable | 100.00% | ||||
CARES act of 2020, income tax benefit | $ (100) | ||||
Income tax expense (benefit) | $ 145 | $ (221) | $ (2,050) | $ (782) | |
Effective income tax rate | 0.10% | 0.30% | 0.90% | 0.27% | |
Expected statutory federal tax rate | 21.00% | ||||
Taxable Years Beginning After January 1, 2021 | |||||
Income Tax [Line Items] | |||||
CARES act of 2020, percentage of net operating loss carryforwards | 100.00% | ||||
Taxable Years Beginning After December 31, 2020 | |||||
Income Tax [Line Items] | |||||
CARES act of 2020, percentage of net operating loss carryforwards | 80.00% |
Related Party Agreements - Addi
Related Party Agreements - Additional Information (Details) - Itochu $ in Millions | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Affiliated Entity | |
Related Party Transaction [Line Items] | |
Purchases from related party | $ 0.7 |
Scilex Pharmaceuticals, Inc | Itochu | |
Related Party Transaction [Line Items] | |
Noncontrolling interest ownership percentage | 14.70% |
Loss Per Share - Reconciliation
Loss Per Share - Reconciliation of Basic and Diluted Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Numerator | ||||
Net loss attributable to Sorrento | $ (84,023) | $ (64,415) | $ (226,959) | $ (229,248) |
Net loss attributable to Semnur holders of Scilex Holding | (1,868) | (6,205) | (8,524) | (34,819) |
Net loss used for diluted earnings per share | $ (85,891) | $ (70,620) | $ (235,483) | $ (264,067) |
Denominator for Basic Loss Per Share | 251,211 | 130,800 | 217,050 | 125,240 |
Potentially dilutive shares of Sorrento common stock issuable upon Semnur Share Exchange | 6,459 | 9,645 | 6,459 | 7,025 |
Denominator for Diluted Loss Per Share | 257,670 | 140,445 | 223,509 | 132,265 |
Basic Loss Per Share | $ (0.33) | $ (0.49) | $ (1.05) | $ (1.83) |
Diluted Loss Per Share | $ (0.33) | $ (0.50) | $ (1.05) | $ (2) |
Loss Per Share - Additional Inf
Loss Per Share - Additional Information (Details) - shares shares in Millions | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Stock Options | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of EPS (in shares) | 9.3 | 9.7 |
Warrants | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of EPS (in shares) | 18.6 | 47.8 |
Segment Information - Additiona
Segment Information - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2020segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
Number of reportable segments | 2 |
Segment Information - Summary o
Segment Information - Summary of Information by Reportable Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Segment Reporting Information [Line Items] | |||||
External revenues | $ 11,753 | $ 5,778 | $ 28,481 | $ 18,398 | |
Operating expenses | 94,857 | 59,061 | 202,476 | 245,212 | |
Operating loss | (83,104) | (53,283) | (173,995) | (226,814) | |
Unrestricted cash | 75,176 | 34,649 | 75,176 | 34,649 | $ 22,521 |
Sorrento Therapeutics | |||||
Segment Reporting Information [Line Items] | |||||
External revenues | 3,927 | 2,007 | 9,694 | 7,109 | |
Operating expenses | 82,868 | 34,480 | 157,559 | 105,912 | |
Operating loss | (78,941) | (32,473) | (147,865) | (98,803) | |
Unrestricted cash | 71,004 | 20,860 | 71,004 | 20,860 | |
Scilex | |||||
Segment Reporting Information [Line Items] | |||||
External revenues | 7,826 | 3,771 | 18,787 | 11,289 | |
Operating expenses | 11,989 | 24,581 | 44,917 | 139,300 | |
Operating loss | (4,163) | (20,810) | (26,130) | (128,011) | |
Unrestricted cash | $ 4,172 | $ 13,789 | $ 4,172 | $ 13,789 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) $ in Millions | Oct. 12, 2020USD ($) |
Personalized Stem Cells, Inc. | License Agreement | Subsequent Event | |
Subsequent Event [Line Items] | |
Up-front licensee fee | $ 3.5 |