Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Sep. 30, 2013 | Oct. 21, 2013 | |
Document and Entity Information | ||
Entity Registrant Name | IMMUNOGEN INC | |
Entity Central Index Key | 855654 | |
Document Type | 10-Q | |
Document Period End Date | 30-Sep-13 | |
Amendment Flag | FALSE | |
Current Fiscal Year End Date | -24 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 85,395,256 | |
Document Fiscal Year Focus | 2014 | |
Document Fiscal Period Focus | Q1 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Sep. 30, 2013 | Jun. 30, 2013 |
In Thousands, unless otherwise specified | ||
ASSETS | ||
Cash and cash equivalents | $174,838 | $194,960 |
Accounts receivable | 5,789 | |
Unbilled revenue | 1,979 | 2,121 |
Inventory | 1,671 | 703 |
Restricted cash | 319 | 319 |
Prepaid and other current assets | 3,140 | 2,581 |
Total current assets | 187,736 | 200,684 |
Property and equipment, net of accumulated depreciation | 10,173 | 10,783 |
Long-term restricted cash | 1,912 | 1,912 |
Other assets | 203 | 217 |
Total assets | 200,024 | 213,596 |
LIABILITIES AND SHAREHOLDERS' EQUITY | ||
Accounts payable | 3,122 | 4,498 |
Accrued compensation | 3,276 | 6,153 |
Other accrued liabilities | 6,904 | 6,049 |
Current portion of deferred lease incentive | 979 | 979 |
Current portion of deferred revenue | 2,260 | 1,494 |
Total current liabilities | 16,541 | 19,173 |
Deferred lease incentive, net of current portion | 5,382 | 5,626 |
Deferred revenue, net of current portion | 55,275 | 63,384 |
Other long-term liabilities | 3,385 | 3,566 |
Total liabilities | 80,583 | 91,749 |
Commitments and contingencies (Note E) | ||
Shareholders' equity: | ||
Preferred stock, $.01 par value; authorized 5,000 shares; no shares issued and outstanding | ||
Common stock, $.01 par value; authorized 150,000 shares; issued and outstanding 85,270 and 84,725 shares as of September 30, 2013 and June 30, 2013, respectively | 853 | 847 |
Additional paid-in capital | 706,581 | 697,767 |
Accumulated deficit | -587,993 | -576,767 |
Total shareholders' equity | 119,441 | 121,847 |
Total liabilities and shareholders' equity | $200,024 | $213,596 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Sep. 30, 2013 | Jun. 30, 2013 |
In Thousands, except Per Share data, unless otherwise specified | ||
CONSOLIDATED BALANCE SHEETS | ||
Preferred stock, par value (in dollars per share) | $0.01 | $0.01 |
Preferred stock, authorized shares | 5,000 | 5,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, authorized shares | 150,000 | 150,000 |
Common stock, issued shares | 85,270 | 84,725 |
Common stock, outstanding shares | 85,270 | 84,725 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Revenues: | ||
License and milestone fees | $13,167 | $933 |
Research and development support | 1,990 | 1,377 |
Clinical materials revenue | 8 | 1,781 |
Royalty revenue | 2,053 | |
Total revenues | 17,218 | 4,091 |
Operating Expenses: | ||
Research and development | 22,029 | 23,700 |
General and administrative | 6,526 | 5,639 |
Total operating expenses | 28,555 | 29,339 |
Loss from operations | -11,337 | -25,248 |
Other income, net | 111 | 56 |
Net loss | -11,226 | -25,192 |
Basic and diluted net loss per common share (in dollars per share) | ($0.13) | ($0.30) |
Basic and diluted weighted average common shares outstanding (in shares) | 85,010 | 83,350 |
Total comprehensive loss | ($11,226) | ($25,192) |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Cash flows from operating activities: | ||
Net loss | ($11,226) | ($25,192) |
Adjustments to reconcile net loss to net cash used for operating activities: | ||
Depreciation and amortization | 1,162 | 1,174 |
Loss (gain) on sale/disposal of fixed assets | 20 | -17 |
(Gain) loss on forward contracts | -2 | 2 |
Stock and deferred share unit compensation | 4,795 | 3,920 |
Deferred rent | -6 | -27 |
Changes in operating assets and liabilities: | ||
Accounts receivable | -5,789 | -724 |
Unbilled revenue | 142 | -250 |
Inventory | -968 | 1,118 |
Prepaid and other current assets | -559 | -11 |
Other assets | 14 | |
Accounts payable | -1,376 | -179 |
Accrued compensation | -2,877 | -2,506 |
Other accrued liabilities | 438 | 2,651 |
Deferred revenue | -7,343 | -965 |
Net cash used for operating activities | -23,575 | -21,006 |
Cash flows from investing activities: | ||
Purchases of property and equipment, net | -572 | -966 |
Payments from settlement of forward contracts | -46 | |
Net cash used for investing activities | -572 | -1,012 |
Cash flows from financing activities: | ||
Proceeds from common stock issuance, net | 94,006 | |
Proceeds from stock options exercised | 4,025 | 688 |
Net cash provided by financing activities | 4,025 | 94,694 |
Net change in cash and cash equivalents | -20,122 | 72,676 |
Cash and cash equivalents, beginning balance | 194,960 | 160,938 |
Cash and cash equivalents, ending balance | $174,838 | $233,614 |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 3 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Summary of Significant Accounting Policies | ||||||||||||||
Summary of Significant Accounting Policies | A. Summary of Significant Accounting Policies | |||||||||||||
Basis of Presentation | ||||||||||||||
The accompanying unaudited consolidated financial statements at September 30, 2013 and June 30, 2013 and for the three months ended September 30, 2013 and 2012 include the accounts of ImmunoGen, Inc., or the Company, and its wholly owned subsidiaries, ImmunoGen Securities Corp. and ImmunoGen Europe Limited. The consolidated financial statements include all of the adjustments, consisting only of normal recurring adjustments, which management considers necessary for a fair presentation of the Company’s financial position in accordance with accounting principles generally accepted in the U.S. for interim financial information. Certain information and footnote disclosures normally included in the Company’s annual financial statements have been condensed or omitted. The preparation of interim financial statements requires the use of management’s estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the interim financial statements and the reported amounts of revenues and expenditures during the reported periods. The results of the interim periods are not necessarily indicative of the results for the entire year. Accordingly, the interim financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2013. | ||||||||||||||
Subsequent Events | ||||||||||||||
The Company has evaluated all events or transactions that occurred after September 30, 2013 up through the date the Company issued these financial statements. In October 2013, Novartis extended the initial three-year term of its right-to-test agreement with the Company for an additional one-year period by payment of a $5 million fee and took its second license under the agreement which resulted in a $1 million payment to the Company. Additionally, Amgen converted its one non-exclusive license agreement to an exclusive license by payment of a $500,000 fee to the Company. The Company did not have any other material recognizable or unrecognizable subsequent events during this period. | ||||||||||||||
Revenue Recognition | ||||||||||||||
The Company enters into licensing and development agreements with collaborative partners for the development of monoclonal antibody-based anticancer therapeutics. The terms of these agreements contain multiple deliverables which may include (i) licenses, or options to obtain licenses, to the Company’s Targeted Antibody Payload, or TAP, technology, (ii) rights to future technological improvements, (iii) research activities to be performed on behalf of the collaborative partner, (iv) delivery of cytotoxic agents and (v) the manufacture of preclinical or clinical materials for the collaborative partner. Payments to the Company under these agreements may include upfront fees, option fees, exercise fees, payments for research activities, payments for the manufacture of preclinical or clinical materials, payments based upon the achievement of certain milestones and royalties on product sales. The Company follows the provisions of the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 605-25, “Revenue Recognition—Multiple-Element Arrangements,” and ASC Topic 605-28, “Revenue Recognition—Milestone Method,” in accounting for these agreements. In order to account for these agreements, the Company must identify the deliverables included within the agreement and evaluate which deliverables represent separate units of accounting based on whether certain criteria are met, including whether the delivered element has stand-alone value to the collaborator. The consideration received is allocated among the separate units of accounting, and the applicable revenue recognition criteria are applied to each of the separate units. | ||||||||||||||
At September 30, 2013, the Company had the following two types of agreements with the parties identified below: | ||||||||||||||
· Development and commercialization licenses to use the Company’s TAP technology and/or certain other intellectual property to develop compounds to a specified target antigen (referred to as development and commercialization licenses, as distinguished from the Company’s right-to-test agreements described elsewhere): | ||||||||||||||
Amgen (three exclusive single-target licenses; one non-exclusive single- target license) | ||||||||||||||
Bayer HealthCare (one exclusive single-target license) | ||||||||||||||
Biotest (one exclusive single-target license) | ||||||||||||||
Lilly (one exclusive single-target license) | ||||||||||||||
Novartis (one license to two related targets: one target on an exclusive basis and the second target on a non-exclusive basis) | ||||||||||||||
Roche, through its Genentech unit (five exclusive single-target licenses) | ||||||||||||||
Sanofi (exclusive license to multiple individual targets) | ||||||||||||||
· Option/research agreement for a defined period of time to secure development and commercialization licenses to use the Company’s TAP technology to develop anticancer compounds to specified targets on established terms (referred to herein as right-to-test agreements): | ||||||||||||||
Sanofi | ||||||||||||||
Novartis | ||||||||||||||
Lilly | ||||||||||||||
There are no performance, cancellation, termination or refund provisions in any of the arrangements that contain material financial consequences to the Company. | ||||||||||||||
Development and Commercialization Licenses | ||||||||||||||
The deliverables under a development and commercialization license agreement generally include the license to the Company’s TAP technology with respect to a specified antigen target, and may also include deliverables related to rights to future technological improvements, research activities to be performed on behalf of the collaborative partner and the manufacture of preclinical or clinical materials for the collaborative partner. | ||||||||||||||
Generally, development and commercialization licenses contain non-refundable terms for payments and, depending on the terms of the agreement, provide that the Company will (i) at the collaborator’s request, provide research services at negotiated prices which are generally consistent with what other third parties would charge, (ii) at the collaborator’s request, manufacture and provide to it preclinical and clinical materials or deliver cytotoxic agents at negotiated prices which are generally consistent with what other third parties would charge, (iii) earn payments upon the achievement of certain milestones and (iv) earn royalty payments, generally until the later of the last applicable patent expiration or 10 to 12 years after product launch. In the case of Kadcyla®, however, the minimum royalty term is 10 years and the maximum royalty term is 12 years on a country-by-country basis. Royalty rates may vary over the royalty term depending on the Company’s intellectual property rights. The Company may provide technical assistance and share any technology improvements with its collaborators during the term of the collaboration agreements. The Company does not directly control when or whether any collaborator will request research or manufacturing services, achieve milestones or become liable for royalty payments. As a result, the Company cannot predict when or if it will recognize revenues in connection with any of the foregoing. | ||||||||||||||
In determining the units of accounting, management evaluates whether the license has stand-alone value from the undelivered elements to the collaborative partner based on the consideration of the relevant facts and circumstances for each arrangement. Factors considered in this determination include the research capabilities of the partner and the availability of TAP technology research expertise in the general marketplace. If the Company concludes that the license has stand-alone value and therefore will be accounted for as a separate unit of accounting, the Company then determines the estimated selling prices of the license and all other units of accounting based on market conditions, similar arrangements entered into by third parties, and entity-specific factors such as the terms of the Company’s previous collaborative agreements, recent preclinical and clinical testing results of therapeutic products that use the Company’s TAP technology, the Company’s pricing practices and pricing objectives, the likelihood that technological improvements will be made, the likelihood that technological improvements made will be used by the Company’s collaborators and the nature of the research services to be performed on behalf of its collaborators and market rates for similar services. | ||||||||||||||
Upfront payments on development and commercialization licenses are deferred if facts and circumstances dictate that the license does not have stand-alone value. Prior to the adoption of Accounting Standards Update (ASU) No. 2009-13, “Revenue Arrangements with Multiple Deliverables” on July 1, 2010, the Company determined that its licenses lacked stand-alone value and were combined with other elements of the arrangement and any amounts associated with the license were deferred and amortized over a certain period, which the Company refers to as the Company’s period of substantial involvement. The determination of the length of the period over which to defer revenue is subject to judgment and estimation and can have an impact on the amount of revenue recognized in a given period. Historically the Company’s involvement with the development of a collaborator’s product candidate has been significant at the early stages of development, and lessens as it progresses into clinical trials. Also, as a drug candidate gets closer to commencing pivotal testing the Company’s collaborators have sought an alternative site to manufacture their products, as the Company’s facility does not produce pivotal or commercial drug product. Accordingly, the Company generally estimates this period of substantial involvement to begin at the inception of the collaboration agreement and conclude at the end of non-pivotal Phase II testing. The Company believes this period of substantial involvement is, depending on the nature of the license, on average six and one-half years. Quarterly, the Company reassesses its periods of substantial involvement over which the Company amortizes its upfront license fees and makes adjustments as appropriate. In the event a collaborator elects to discontinue development of a specific product candidate under a development and commercialization license, but retains its right to use the Company’s technology to develop an alternative product candidate to the same target or a target substitute, the Company would cease amortization of any remaining portion of the upfront fee until there is substantial preclinical activity on another product candidate and its remaining period of substantial involvement can be estimated. In the event that a development and commercialization license were to be terminated, the Company would recognize as revenue any portion of the upfront fee that had not previously been recorded as revenue, but was classified as deferred revenue, at the date of such termination. | ||||||||||||||
Subsequent to the adoption of ASU No. 2009-13, the Company determined that its research licenses lack stand-alone value and are considered for aggregation with the other elements of the arrangement and accounted for as one unit of accounting. | ||||||||||||||
Upfront payments on development and commercialization licenses may be recognized upon delivery of the license if facts and circumstances dictate that the license has stand-alone value from the undelivered elements, which generally include rights to future technological improvements, research services, delivery of cytotoxic agents and the manufacture of preclinical and clinical materials. | ||||||||||||||
The Company recognizes revenue related to research services that represent separate units of accounting as they are performed, as long as there is persuasive evidence of an arrangement, the fee is fixed or determinable, and collection of the related receivable is probable. The Company recognizes revenue related to the rights to future technological improvements over the estimated term of the applicable license. | ||||||||||||||
The Company may also provide cytotoxic agents to its collaborators or produce preclinical and clinical materials at negotiated prices which are generally consistent with what other third parties would charge. The Company recognizes revenue on cytotoxic agents and on preclinical and clinical materials when the materials have passed all quality testing required for collaborator acceptance and title and risk of loss have transferred to the collaborator. Arrangement consideration allocated to the manufacture of preclinical and clinical materials in a multiple-deliverable arrangement is below the Company’s full cost, and the Company’s full cost is not expected to be below its contract selling prices for its existing collaborations for the foreseeable future. During the three months ended September 30, 2012, the difference between the Company’s full cost to manufacture preclinical and clinical materials on behalf of its collaborators as compared to total amounts received from collaborators for the manufacture of preclinical and clinical materials was $755,000. There were no sales of manufactured preclinical or clinical materials during the three months ended September 30, 2013. The majority of the Company’s costs to produce these preclinical and clinical materials are fixed and then allocated to each batch based on the number of batches produced during the period. Therefore, the Company’s costs to produce these materials are significantly impacted by the number of batches produced during the period. The volume of preclinical and clinical materials the Company produces is directly related to the number of clinical trials for which the Company and its collaborators are preparing or currently have underway, the speed of enrollment in those trials, the dosage schedule of each clinical trial and the time period such trials last. Accordingly, the volume of preclinical and clinical materials produced, and therefore the Company’s per batch costs to manufacture these preclinical and clinical materials, may vary significantly from period to period. | ||||||||||||||
The Company may also produce research material for potential collaborators under material transfer agreements. Additionally, the Company performs research activities, including developing antibody specific conjugation processes, on behalf of its collaborators and potential collaborators during the early evaluation and preclinical testing stages of drug development. The Company records amounts received for research materials produced or services performed as a component of research and development support revenue. The Company also develops conjugation processes for materials for later stage testing and commercialization for certain collaborators. The Company is compensated at negotiated rates and may receive milestone payments for developing these processes which are recorded as a component of research and development support revenue. | ||||||||||||||
The Company’s development and commercialization license agreements have milestone payments which for reporting purposes are aggregated into three categories: (i) development milestones, (ii) regulatory milestones, and (iii) sales milestones. Development milestones are typically payable when a product candidate initiates or advances into different clinical trial phases. Regulatory milestones are typically payable upon submission for marketing approval with the U.S. Food and Drug Administration, or FDA, or other countries’ regulatory authorities or on receipt of actual marketing approvals for the compound or for additional indications. Sales milestones are typically payable when annual sales reach certain levels. | ||||||||||||||
At the inception of each agreement that includes milestone payments, the Company evaluates whether each milestone is substantive and at risk to both parties on the basis of the contingent nature of the milestone. This evaluation includes an assessment of whether (a) the consideration is commensurate with either (1) the entity’s performance to achieve the milestone, or (2) the enhancement of the value of the delivered item(s) as a result of a specific outcome resulting from the entity’s performance to achieve the milestone, (b) the consideration relates solely to past performance and (c) the consideration is reasonable relative to all of the deliverables and payment terms within the arrangement. The Company evaluates factors such as the scientific, regulatory, commercial and other risks that must be overcome to achieve the respective milestone, the level of effort and investment required to achieve the respective milestone and whether the milestone consideration is reasonable relative to all deliverables and payment terms in the arrangement in making this assessment. | ||||||||||||||
Non-refundable development and regulatory milestones that are expected to be achieved as a result of the Company’s efforts during the period of substantial involvement are considered substantive and are recognized as revenue upon the achievement of the milestone, assuming all other revenue recognition criteria are met. Milestones that are not considered substantive because we do not contribute effort to the achievement of such milestones are generally achieved after the period of substantial involvement and are recognized as revenue upon achievement of the milestone, as there are no undelivered elements remaining and no continuing performance obligations, assuming all other revenue recognition criteria are met. | ||||||||||||||
Under the Company’s development and commercialization license agreements, the Company receives royalty payments based upon its licensees’ net sales of covered products. Generally, under these agreements the Company is to receive royalty reports and payments from its licensees approximately one quarter in arrears, that is, generally in the second month of the quarter after the licensee has sold the royalty-bearing product or products. The Company recognizes royalty revenues when it can reliably estimate such amounts and collectability is reasonably assured. As such, the Company generally recognizes royalty revenues in the quarter reported to the Company by its licensees, or one quarter following the quarter in which sales by the Company’s licensees occurred. | ||||||||||||||
Right-to-Test Agreements | ||||||||||||||
The Company’s right-to-test agreements provide collaborators the right to (a) test the Company’s TAP technology for a defined period of time through a research, or right-to-test, license, (b) take options, for a defined period of time, to specified targets and (c) upon exercise of those options, secure or “take” licenses to develop and commercialize products for the specified targets on established terms. Under these agreements, fees may be due to the Company (i) at the inception of the arrangement (referred to as “upfront” fees or payments), (ii) upon taking an option with respect to a specific target (referred to as option fees or payments earned, if any, when the option is “taken”), (iii) upon the exercise of a previously taken option to acquire a development and commercialization license(s) (referred to as exercise fees or payments earned, if any, when the development and commercialization license is “taken”), or (iv) some combination of all of these fees. | ||||||||||||||
The accounting for right-to-test agreements is dependent on the nature of the options granted to the collaborative partner. Options are considered substantive if, at the inception of a right-to-test agreement, the Company is at risk as to whether the collaborative partner will choose to exercise the options to secure development and commercialization licenses. Factors that are considered in evaluating whether options are substantive include the overall objective of the arrangement, the benefit the collaborator might obtain from the agreement without exercising the options, the cost to exercise the options relative to the total upfront consideration, and the additional financial commitments or economic penalties imposed on the collaborator as a result of exercising the options. | ||||||||||||||
For right-to-test agreements where the options to secure development and commercialization licenses to the Company’s TAP technology are considered substantive, the Company does not consider the development and commercialization licenses to be a deliverable at the inception of the agreement. For those right-to-test agreements entered into prior to the adoption of ASU No. 2009-13 where the options to secure development and commercialization licenses are considered substantive, the Company has deferred the upfront payments received and recognizes this revenue over the period during which the collaborator could elect to take options for development and commercialization licenses. These periods are specific to each collaboration agreement. If a collaborator takes an option to acquire a development and commercialization license under these agreements, any substantive option fee is deferred and recognized over the life of the option, generally 12 to 18 months. If a collaborator exercises an option and takes a development and commercialization license to a specific target, the Company attributes the exercise fee to the development and commercialization license. Upon exercise of an option to acquire a development and commercialization license, the Company would also attribute any remaining deferred option fee to the development and commercialization license and apply the multiple-element revenue recognition criteria to the development and commercialization license and any other deliverables to determine the appropriate revenue recognition, which will be consistent with the Company’s accounting policy for upfront payments on single-target licenses. In the event a right-to-test agreement were to be terminated, the Company would recognize as revenue any portion of the upfront fee that had not previously been recorded as revenue, but was classified as deferred revenue, at the date of such termination. None of the Company’s right-to-test agreements entered into subsequent to the adoption of ASU No. 2009-13 has been determined to contain substantive options. | ||||||||||||||
For right-to-test agreements where the options to secure development and commercialization licenses to the Company’s TAP technology are not considered substantive, the Company considers the development and commercialization licenses to be a deliverable at the inception of the agreement and applies the multiple-element revenue recognition criteria to determine the appropriate revenue recognition. None of the Company’s right-to-test agreements entered into prior to the adoption of ASU No. 2009-13 has been determined to contain non-substantive options. | ||||||||||||||
The Company does not directly control when or if any collaborator will exercise its options for development and commercialization licenses. As a result, the Company cannot predict when or if it will recognize revenues in connection with any of the foregoing. | ||||||||||||||
Fair Value of Financial Instruments | ||||||||||||||
Fair value is defined under ASC Topic 820, “Fair Value Measurements and Disclosures,” as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchy to measure fair value which is based on three levels of inputs, of which the first two are considered observable and the last unobservable, as follows: | ||||||||||||||
· Level 1 - Quoted prices in active markets for identical assets or liabilities. | ||||||||||||||
· Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | ||||||||||||||
· Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. | ||||||||||||||
As of September 30, 2013, the Company held certain assets that are required to be measured at fair value on a recurring basis. The following table represents the fair value hierarchy for the Company’s financial assets measured at fair value on a recurring basis as of September 30, 2013 (in thousands): | ||||||||||||||
Fair Value Measurements at September 30, 2013 Using | ||||||||||||||
Quoted Prices in | Significant Other | Significant | ||||||||||||
Active Markets for | Observable Inputs | Unobservable | ||||||||||||
Identical Assets | Inputs | |||||||||||||
Total | (Level 1) | (Level 2) | (Level 3) | |||||||||||
Cash, cash equivalents and restricted cash | $ | 177,069 | $ | 177,069 | $ | — | $ | — | ||||||
As of June 30, 2013, the Company held certain assets that are required to be measured at fair value on a recurring basis. The following table represents the fair value hierarchy for the Company’s financial assets measured at fair value on a recurring basis as of June 30, 2013 (in thousands): | ||||||||||||||
Fair Value Measurements at June 30, 2013 Using | ||||||||||||||
Quoted Prices in | Significant Other | Significant | ||||||||||||
Active Markets for | Observable Inputs | Unobservable | ||||||||||||
Identical Assets | Inputs | |||||||||||||
Total | (Level 1) | (Level 2) | (Level 3) | |||||||||||
Cash, cash equivalents and restricted cash | $ | 197,191 | $ | 197,191 | $ | — | $ | — | ||||||
The fair value of the Company’s cash equivalents is based primarily on quoted prices from active markets. | ||||||||||||||
Unbilled Revenue | ||||||||||||||
The majority of the Company’s unbilled revenue at September 30, 2013 and June 30, 2013 represents research funding earned prior to those dates based on actual resources utilized under the Company’s agreements with various collaborators. | ||||||||||||||
Inventory | ||||||||||||||
Inventory costs relate to clinical trial materials being manufactured for sale to the Company’s collaborators. Inventory is stated at the lower of cost or market as determined on a first-in, first-out (FIFO) basis. | ||||||||||||||
Inventory at September 30, 2013 and June 30, 2013 is summarized below (in thousands): | ||||||||||||||
September 30, | June 30, | |||||||||||||
2013 | 2013 | |||||||||||||
Raw materials | $ | 363 | $ | 75 | ||||||||||
Work in process | 1,308 | 628 | ||||||||||||
Total | $ | 1,671 | $ | 703 | ||||||||||
Raw materials inventory consists entirely of DM1 and DM4, proprietary cell-killing agents the Company developed as part of its TAP technology. The Company considers more than a twelve month supply of raw materials that is not supported by firm, fixed orders and/or projections from its collaborators to be excess and establishes a reserve to reduce to zero the value of any such excess raw material inventory with a corresponding charge to research and development expense. In accordance with this policy, the Company recorded $135,000 of expense related to excess inventory during the three-month period ended September 30, 2013 compared to $390,000 recorded during the same period last year. | ||||||||||||||
Work in process inventory consists of conjugate manufactured for sale to the Company’s collaborators to be used in preclinical and clinical studies. All conjugate is made to order at the request of the collaborators and subject to the terms and conditions of respective supply agreements. As such, no reserve for work in process inventory is required. | ||||||||||||||
Computation of Net Loss per Common Share | ||||||||||||||
Basic and diluted net loss per share is calculated based upon the weighted average number of common shares outstanding during the period. During periods of income, participating securities are allocated a proportional share of income determined by dividing total weighted average participating securities by the sum of the total weighted average common shares and participating securities (the “two-class method”). The Company’s restricted stock participates in any dividends declared by the Company and are therefore considered to be participating securities. Participating securities have the effect of diluting both basic and diluted earnings per share during periods of income. During periods of loss, no loss is allocated to participating securities since they have no contractual obligation to share in the losses of the Company. Diluted (loss) earnings per share is computed after giving consideration to the dilutive effect of stock options that are outstanding during the period, except where such non-participating securities would be anti-dilutive. | ||||||||||||||
The Company’s common stock equivalents, as calculated in accordance with the treasury-stock method, are shown in the following table (in thousands): | ||||||||||||||
Three Months Ended | ||||||||||||||
September 30, | ||||||||||||||
2013 | 2012 | |||||||||||||
Options outstanding to purchase common stock and unvested restricted stock | 8,733 | 7,960 | ||||||||||||
Common stock equivalents under treasury stock method | 2,215 | 2,552 | ||||||||||||
The Company’s common stock equivalents have not been included in the net loss per share calculation because their effect is anti-dilutive due to the Company’s net loss position. | ||||||||||||||
Stock-Based Compensation | ||||||||||||||
As of September 30, 2013, the Company is authorized to grant future awards under one employee share-based compensation plan, which is the ImmunoGen, Inc. 2006 Employee, Director and Consultant Equity Incentive Plan, or the 2006 Plan. At the annual meeting of shareholders on November 13, 2012, an amendment to the 2006 Plan was approved and an additional 3,500,000 shares were authorized for issuance under this plan. As amended, the 2006 Plan provides for the issuance of Stock Grants, the grant of Options and the grant of Stock-Based Awards for up to 12,000,000 shares of the Company’s common stock, as well as any shares of common stock that are represented by awards granted under the previous stock option plan, the ImmunoGen, Inc. Restated Stock Option Plan, or the Former Plan, that are forfeited, expire or are cancelled without delivery of shares of common stock; provided, however, that no more than 5,900,000 shares shall be added to the 2006 Plan from the Former Plan, pursuant to this provision. Option awards are granted with an exercise price equal to the market price of the Company’s stock at the date of grant. Options vest at various periods of up to four years and may be exercised within ten years of the date of grant. | ||||||||||||||
The stock-based awards are accounted for under ASC Topic 718, “Compensation—Stock Compensation.” Pursuant to Topic 718, the estimated grant date fair value of awards is charged to the statement of operations and comprehensive loss over the requisite service period, which is the vesting period. Such amounts have been reduced by an estimate of forfeitures of all unvested awards. The fair value of each stock option is estimated on the date of grant using the Black-Scholes option-pricing model with the assumptions noted in the following table. As the Company has not paid dividends since inception, nor does it expect to pay any dividends for the foreseeable future, the expected dividend yield assumption is zero. Expected volatility is based exclusively on historical volatility data of the Company’s stock. The expected term of stock options granted is based exclusively on historical data and represents the period of time that stock options granted are expected to be outstanding. The expected term is calculated for and applied to one group of stock options as the Company does not expect substantially different exercise or post-vesting termination behavior among its option recipients. The risk-free rate of the stock options is based on the U.S. Treasury rate in effect at the time of grant for the expected term of the stock options. | ||||||||||||||
Three Months Ended | ||||||||||||||
September 30, | ||||||||||||||
2013 | 2012 | |||||||||||||
Dividend | None | None | ||||||||||||
Volatility | 60.44% | 60.44% | ||||||||||||
Risk-free interest rate | 1.69% | 0.84% | ||||||||||||
Expected life (years) | 6.3 | 6.3 | ||||||||||||
Using the Black-Scholes option-pricing model, the weighted average grant date fair values of options granted during the three months ended September 30, 2013 and 2012 were $10.93 and $8.91 per share, respectively. | ||||||||||||||
Stock compensation expense related to stock options and restricted stock awards granted under the 2006 Plan was $4.7 million and $3.8 million during the three months ended September 30, 2013 and 2012, respectively. As of September 30, 2013, the estimated fair value of unvested employee awards was $28.5 million, net of estimated forfeitures. The weighted-average remaining vesting period for these awards is approximately two and a half years. | ||||||||||||||
During the three months ended September 30, 2013, holders of options issued under the Company’s equity plans exercised their rights to acquire an aggregate of approximately 545,000 shares of common stock at prices ranging from $3.19 to $15.83 per share. The total proceeds to the Company from these option exercises were approximately $4.0 million. | ||||||||||||||
Financial Instruments and Concentration of Credit Risk | ||||||||||||||
The Company’s cash equivalents consist of money market funds with underlying investments primarily being U.S. Government-issued securities and high quality, short-term commercial paper. All of the Company’s cash and cash equivalents are maintained with three financial institutions in the U.S. The Company uses a Euro-denominated bank account to manage the foreign currency exposures that exist as part of our ongoing business operations. Our foreign currency risk management strategy is principally designed to mitigate the future potential financial impact of changes in the value of transactions, anticipated transactions and balances denominated in foreign currency, resulting from changes in foreign currency exchange rates. | ||||||||||||||
Segment Information | ||||||||||||||
During the three months ended September 30, 2013, the Company continued to operate in one reportable business segment which is the business of discovery of monoclonal antibody-based anticancer therapeutics. | ||||||||||||||
The percentages of revenues recognized from significant customers of the Company in the three months ended September 30, 2013 and 2012 are included in the following table: | ||||||||||||||
Three Months Ended | ||||||||||||||
September 30, | ||||||||||||||
Collaborative Partner: | 2013 | 2012 | ||||||||||||
Amgen | 1% | 23% | ||||||||||||
Bayer HealthCare | —% | 20% | ||||||||||||
Biotest | 1% | 23% | ||||||||||||
Lilly | 49% | 6% | ||||||||||||
Novartis | 7% | 24% | ||||||||||||
Roche | 41% | —% | ||||||||||||
There were no other customers of the Company with significant revenues in the three months ended September 30, 2013 and 2012. | ||||||||||||||
Recent Accounting Pronouncements | ||||||||||||||
In July 2013, the FASB issued guidance to address the diversity in practice related to the financial statement presentation of unrecognized tax benefits as either a reduction of a deferred tax asset or a liability when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. This guidance is effective prospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013. The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial statements. |
Collaborative_Agreements
Collaborative Agreements | 3 Months Ended |
Sep. 30, 2013 | |
Collaborative Agreements | |
Collaborative Agreements | B. Collaborative Agreements |
Roche | |
In May 2000, the Company granted Genentech, now a unit of Roche, an exclusive license to use the Company’s maytansinoid TAP technology with antibodies, such as trastuzumab, or other proteins that target HER2. Under the terms of this agreement, Roche has exclusive worldwide rights to develop and commercialize maytansinoid TAP compounds targeting HER2. In February 2013, the U.S. FDA granted marketing approval to the HER2-targeting TAP compound, Kadcyla. In September 2013, Roche received marketing approval for Kadcyla in Japan. Roche is responsible for the manufacturing, product development and marketing of Kadcyla and any other products resulting from the agreement. The Company received a $2 million non-refundable upfront payment from Roche upon execution of the agreement. The Company is also entitled to receive up to a total of $44 million in milestone payments, plus royalties on the commercial sales of Kadcyla or any other resulting products. Total milestones are categorized as follows: development milestones—$13.5 million; and regulatory milestones—$30.5 million. The marketing approval of Kadcyla in Japan in September 2013 triggered a $5 million regulatory milestone payment to the Company. Based on an evaluation of the effort contributed to the achievement of this milestone, the Company determined this milestone was not substantive. In consideration that there were no undelivered elements remaining, no continuing performance obligations and all other revenue recognition criteria had been met, the Company recognized the $5 million non-refundable payments as revenue upon achievement of the milestone, which is included in license and milestone fees for the three months ended September 30, 2013. Through September 30, 2013, the Company has received and recognized $13.5 million and $15.5 million in development and regulatory milestone payments, respectively, related to Kadcyla. The next potential milestone the Company will be entitled to receive is a $5 million regulatory milestone for marketing approval of Kadcyla in the European Union. Based on an evaluation of the effort contributed to the achievement of this milestone, the Company has determined this milestone is not substantive. The Company receives royalty reports and payments related to sales of Kadcyla from Roche one quarter in arrears. In accordance with the Company’s revenue recognition policy, $2.1 million of royalties on net sales of Kadcyla for the three-month period ended June 30, 2013 were recorded and included in royalty revenue for the three months ended September 30, 2013. | |
Novartis | |
In October 2010, the Company entered into a three-year right-to-test agreement with Novartis Institutes for BioMedical Research, Inc. (Novartis). The agreement provides Novartis with the right to (a) test the Company’s TAP technology with individual antibodies selected by Novartis under a right-to-test, or research, license, (b) take exclusive options, with certain restrictions, to individual targets selected by Novartis for specified option periods and (c) upon exercise of those options, take exclusive licenses to use the Company’s TAP technology to develop and commercialize products for a specified number of individual targets on terms agreed upon at the inception of the right-to-test agreement. The initial three-year term of the right-to-test agreement was extended by Novartis in October 2013 for an additional one-year period by payment of a $5 million fee to the Company. In addition to the one-year extension taken in October 2013, the terms of the right-to-test agreement allow Novartis to extend the research term for one additional one-year period by payment of additional consideration. The terms of the right-to-test agreement require Novartis to exercise its options for the development and commercialization licenses by the end of the term of the research license. The Company received a $45 million upfront payment in connection with the execution of the right-to-test agreement, and for each development and commercialization license for a specific target, the Company is entitled to receive an exercise fee of $1 million and up to a total of $199.5 million in milestone payments, plus royalties on the commercial sales of any resulting products. The total milestones are categorized as follows: development milestones—$22.5 million; regulatory milestones—$77 million; and sales milestones—$100 million. The Company also is entitled to receive payments for research and development activities performed on behalf of Novartis. Novartis is responsible for the manufacturing, product development and marketing of any products resulting from this agreement. | |
Effective March 29, 2013, the Company and Novartis amended the right-to-test agreement so that Novartis can take a license to develop and commercialize products directed at two pre-defined and related undisclosed targets, one target licensed on an exclusive basis and the other target initially licensed on a non-exclusive basis. The target licensed on a non-exclusive basis may be converted to an exclusive target by notice and payment to the Company of an agreed-upon fee of at least $5 million, depending on specific circumstances. The Company received a $3.5 million fee in connection with the execution of the amendment to the agreement. The Company may be required to credit this fee against future milestone payments if Novartis discontinues the development of a specified product under certain circumstances. | |
In connection with the amendment, on March 29, 2013, Novartis took the license referenced above under the right-to-test agreement, as amended, enabling it to develop and commercialize products directed at the two targets. The Company was entitled to a $1 million upfront fee with the execution of this license. Additionally, the execution of this license provides the Company the opportunity to receive milestone payments totaling $199.5 million (development milestones—$22.5 million; regulatory milestones—$77 million; and sales milestones—$100 million) or $238 million (development milestones—$22.5 million; regulatory milestones—$115.5 million; and sales milestones—$100 million), depending on the composition of any resulting products. In October 2013, Novartis took a second exclusive license to a single target, triggering a $1 million payment to the Company and the opportunity to receive milestone payments totaling $199.5 million, as outlined above. The first potential milestone the Company will be entitled to receive under either of these licenses will be a $5 million development milestone for commencement of a Phase I clinical trial. At the time of execution of these agreements, there was significant uncertainty as to whether these milestones would be achieved. In consideration of this, as well as the Company’s past involvement in the research and manufacturing of these product candidates, these milestones were deemed substantive. Additionally, the Company is entitled to receive royalties on product sales, if any. Novartis also has the right to convert the noted non-exclusive license to an exclusive license, in which case the Company would be entitled to receive, depending on the composition of resultant products, an upward adjustment on milestone payments. | |
In accordance with ACS 605-25 (as amended by ASU No. 2009-13), the Company identified all of the deliverables at the inception of the right-to-test agreement and subsequently when amended. The significant deliverables were determined to be the right-to-test, or research, license, the development and commercialization licenses, rights to future technological improvements, and the research services. The options to obtain development and commercialization licenses in the right-to-test agreement were determined not to be substantive and, as a result, the exclusive development and commercialization licenses were considered deliverables at the inception of the right-to-test agreement. Factors that were considered in determining the options were not substantive included (i) the overall objective of the agreement was for Novartis to obtain development and commercialization licenses, (ii) the size of the exercise fee of $1 million for each development and commercialization license obtained is not significant relative to the $45 million upfront payment that was due at the inception of the right-to-test agreement, (iii) the limited economic benefit that Novartis could obtain from the right-to-test agreement unless it exercised its options to obtain development and commercialization licenses, and (iv) the lack of economic penalties as a result of exercising the options. | |
The Company has determined that the research license together with the development and commercialization licenses represent one unit of accounting as the research license does not have stand-alone value from the development and commercialization licenses due to the lack of transferability of the research license and the limited economic benefit Novartis would derive if they did not obtain any development and commercialization licenses. The Company has also determined that this unit of accounting does have stand-alone value from the rights to future technological improvements and the research services. The rights to future technological improvements and the research services are considered separate units of accounting as each of these was determined to have stand-alone value. The rights to future technological improvements have stand-alone value as Novartis would be able to use those items for their intended purpose without the undelivered elements. The research services have stand-alone value as similar services are sold separately by other vendors. | |
The estimated selling prices for the development and commercialization licenses are the Company’s best estimate of selling price and were determined based on market conditions, similar arrangements entered into by third parties, including the Company’s understanding of pricing terms offered by its competitors for single-target development and commercialization licenses that utilize antibody-drug conjugate technology, and entity-specific factors such as the pricing terms of the Company’s previous single-target development and commercialization licenses, recent preclinical and clinical testing results of therapeutic products that use the Company’s TAP technology, and the Company’s pricing practices and pricing objectives. The estimated selling price of the right to technological improvements is the Company’s best estimate of selling price and was determined by estimating the probability that technological improvements will be made and the probability that such technological improvements made will be used by Novartis. In estimating these probabilities, we considered factors such as the technology that is the subject of the development and commercialization licenses, our history of making technological improvements, and when such improvements, if any, were likely to occur relative to the stage of development of any product candidates pursuant to the development and commercialization licenses. The Company’s estimate of probability considered the likely period of time that any improvements would be utilized, which was estimated to be ten years following delivery of a commercialization and development license. The value of any technological improvements made available after this ten year period was considered to be de minimis due to the significant additional costs that would be incurred to incorporate such technology into any existing product candidates. The estimate of probability was multiplied by the estimated selling price of the development and commercialization licenses and the resulting cash flow was discounted at a rate of 16%, representing the Company’s estimate of its cost of capital. The estimated selling price of the research services was based on third-party evidence given the nature of the research services to be performed for Novartis and market rates for similar services. | |
The total arrangement consideration of $55.2 million (which comprises the $45 million upfront payment, the amendment fee of $3.5 million, the exercise fee for each license, and the expected fees for the research services to be provided under the remainder of the arrangement) was allocated to the deliverables based on the relative selling price method as follows: $55.4 million to the development and commercialization licenses; $4.1 million to the rights to future technological improvements; and $710,000 to the research services. Since execution of the first development and commercialization license taken in March 2013, the amount of the total arrangement consideration allocated to future technological improvements is being recognized as revenue ratably over the period the Company is obligated to make available any technological improvements, which is equivalent to the estimated term of the agreement. The Company estimates the term of a development and commercialization license to be approximately 25 years, which reflects management’s estimate of the time necessary to develop and commercialize products pursuant to the license plus the estimated royalty term. The Company reassesses the estimated term at the end of each reporting period. The Company does not control when Novartis will exercise its options for development and commercialization licenses. As a result, the Company cannot predict when it will recognize the related license revenue except that it will be within the term of the research license. The Company will recognize research services revenue as the related services are delivered. | |
Lilly | |
In December 2011, the Company entered into a three-year right-to-test agreement with Eli Lilly and Company (Lilly). The agreement provides Lilly with the right to (a) take exclusive options, with certain restrictions, to individual targets selected by Lilly for specified option periods, (b) test the Company’s maytansinoid TAP technology with Lilly’s antibodies directed to the optioned targets under a right-to-test, or research, license, and (c) upon exercise of those options, take exclusive licenses to use the Company’s maytansinoid TAP technology to develop and commercialize products for a specified number of individual targets on terms agreed upon at the inception of the right-to-test agreement. The terms of the right-to-test agreement require Lilly to exercise its options for the development and commercialization licenses by the end of the term of the research license. In August 2013, Lilly took its first exclusive license to a single target. | |
The Company received a $20 million upfront payment in connection with the execution of the right-to-test agreement, and for the first development and commercialization license taken, which occurred in August 2013, the Company is entitled to receive up to a total of $200.5 million in milestone payments, plus royalties on the commercial sales of any resulting products. For each subsequent development and commercialization license taken, the Company is entitled to receive an exercise fee in the amount of $2 million and up to a total of $199 million in milestone payments, plus royalties on the commercial sales of any resulting products. The total milestones are categorized as follows: development milestones—$30.5 million for the first development and commercialization license and $29 million for each subsequent license; regulatory milestones—$70 million; and sales milestones—$100 million. The next payment the Company could receive would either be a $5 million development milestone payment with the initiation of a Phase I clinical trial under the first development and commercialization license taken, or a $2 million exercise fee for the execution of a second license. At the time of execution of this agreement, there was significant uncertainty as to whether the milestone related to initiation of a Phase I clinical trial under the first development and commercialization license would be achieved. In consideration of this, as well as the Company’s expected involvement in the research and manufacturing of these product candidates, this milestone was deemed substantive. The Company also is entitled to receive payments for delivery of cytotoxic agents to Lilly and research and development activities performed on behalf of Lilly. Lilly is responsible for the manufacturing, product development and marketing of any products resulting from this collaboration. | |
In accordance with ASC 605-25 (as amended by ASU No. 2009-13), the Company identified all of the deliverables at the inception of the right-to-test agreement. The significant deliverables were determined to be the right-to-test, or research, license, the exclusive development and commercialization licenses, rights to future technological improvements, delivery of cytotoxic agents and the research services. The options to obtain development and commercialization licenses in the right-to-test agreement were determined not to be substantive and, as a result, the exclusive development and commercialization licenses were considered deliverables at the inception of the right-to-test agreement. Factors that were considered in determining the options were not substantive included (i) the overall objective of the agreement was for Lilly to obtain development and commercialization licenses, (ii) the size of the exercise fees of $2 million for each development and commercialization license taken beyond the first license is not significant relative to the $20 million upfront payment that was due at the inception of the right-to-test agreement, (iii) the limited economic benefit that Lilly could obtain from the right-to-test agreement unless it exercised its options to obtain development and commercialization licenses, and (iv) the lack of economic penalties as a result of exercising the options. | |
The Company has determined that the research license together with the development and commercialization licenses represent one unit of accounting as the research license does not have stand-alone value from the development and commercialization licenses due to the lack of transferability of the research license and the limited economic benefit Lilly would derive if they did not obtain any development and commercialization licenses. The Company has also determined that this unit of accounting has stand-alone value from the rights to future technological improvements, the delivery of cytotoxic agents and the research services. The rights to future technological improvements, delivery of cytotoxic agents and the research services are considered separate units of accounting as each of these was determined to have stand-alone value. The rights to future technological improvements have stand-alone value as Lilly would be able to use those items for their intended purpose without the undelivered elements. The research services and cytotoxic agents have stand-alone value as similar services and products are sold separately by other vendors. | |
The estimated selling prices for the development and commercialization licenses are the Company’s best estimate of selling price and were determined based on market conditions, similar arrangements entered into by third parties, including pricing terms offered by our competitors for single-target development and commercialization licenses that utilize antibody-drug conjugate technology, and entity-specific factors such as the pricing terms of the Company’s previous single-target development and commercialization licenses, recent preclinical and clinical testing results of therapeutic products that use the Company’s TAP technology, and the Company’s pricing practices and pricing objectives. The estimated selling price of the rights to technological improvements is the Company’s best estimate of selling price and was determined by estimating the probability that technological improvements will be made, and the probability that technological improvements made will be used by Lilly. In estimating these probabilities, we considered factors such as the technology that is the subject of the development and commercialization licenses, our history of making technological improvements, and when such improvements, if any, were likely to occur relative to the stage of development of any product candidates pursuant to the development and commercialization licenses. The company’s estimate of probability considered the likely period of time that any improvements would be utilized, which was estimated to be ten years following delivery of a commercialization and development license. The value of any technological improvements made available after this ten year period was considered to be de minimis due to the significant additional costs that would be incurred to incorporate such technology into any existing product candidates. The estimate of probability was multiplied by the estimated selling price of the development and commercialization licenses and the resulting cash flow was discounted at a rate of 16%, representing the Company’s estimate of its cost of capital. The estimated selling price of the cytotoxic agent was based on third-party evidence given market rates for the manufacture of such cytotoxic agents. The estimated selling price of the research services was based on third-party evidence given the nature of the research services to be performed for Lilly and market rates for similar services. | |
The total arrangement consideration of $28.2 million (which comprises the $20 million upfront payment, the exercise fee, if any, for each license, the expected fees for the research services to be provided and the cytotoxic agent to be delivered under the arrangement) was allocated to the deliverables based on the relative selling price method as follows: $23.5 million to the development and commercialization licenses; $0.6 million to the rights to future technological improvements, $0.8 million to the sale of cytotoxic agent; and $3.3 million to the research services. Upon execution of the development and commercialization license taken by Lilly in August 2013, the Company recorded $7.8 million of the $23.5 million of the arrangement consideration outlined above, which is included in license and milestone fee revenue for the three month period ended September 30, 2013. With this first development and commercialization license taken, the amount of the total arrangement consideration allocated to future technological improvements will commence to be recognized as revenue ratably over the period the Company is obligated to make available any technological improvements, which is the equivalent to the estimated term of the license. The Company estimates the term of a development and commercialization license to be approximately 25 years, which reflects management’s estimate of the time necessary to develop and commercialize therapeutic products pursuant to the license plus the estimated royalty term. The Company will reassess the estimated term at each subsequent reporting period. The Company will recognize as license revenue an equal amount of the total remaining $15.7 million of arrangement consideration allocated to the development and commercialization licenses as each individual license is delivered to Lilly upon Lilly’s exercise of its remaining options to such licenses. The Company does not control when Lilly will exercise its options for development and commercialization licenses. As a result, the Company cannot predict when it will recognize the related license revenue except that it will be within the term of the research license. The Company will recognize research services revenue and revenue from the delivery of cytotoxic agents as the related services and cytotoxic agents are delivered. | |
For additional information related to these agreements, as well as the Company’s other significant collaborative agreements, please read Note C, Agreements to our consolidated financial statements included within the Company’s 2013 Form 10-K. | |
Kadcyla® is a registered trademark of Genentech, Inc., a member of the Roche Group. |
Capital_Stock
Capital Stock | 3 Months Ended |
Sep. 30, 2013 | |
Capital Stock | |
Capital Stock | C. Capital Stock |
2001 Non-Employee Director Stock Plan | |
During the three months ended September 30, 2013 and 2012, the Company recorded approximately $3,000 and $14,000 in expense, respectively, related to stock units outstanding under the Company’s 2001 Non-Employee Director Stock Plan, or the 2001 Plan. The value of the stock units are classified as a liability and adjusted to market value at each reporting period as the redemption amount of stock units for this plan will be paid in cash. No stock units have been issued under the 2001 Plan subsequent to June 30, 2004. | |
Compensation Policy for Non-Employee Directors | |
During the three months ended September 30, 2013 and 2012, the Company recorded approximately $98,000 and $78,000 in compensation expense, respectively, related to deferred share units issued and outstanding under the Company’s Compensation Policy for Non-Employee Directors. Pursuant to the Compensation Policy for Non-Employee Directors, the redemption amount of deferred share units issued will be paid in shares of common stock of the Company on the date a director ceases to be a member of the Board. Annual retainers vest quarterly over approximately one year from the date of grant, contingent upon the individual remaining a director of ImmunoGen as of each vesting date, and the number of deferred share units awarded is based on the market value of the Company’s common stock on the date of the award. All unvested deferred stock awards will automatically vest immediately prior to the occurrence of a change of control. | |
In addition to the deferred share units, the Non-Employee Directors are also entitled to receive stock option awards having a grant date fair value of $30,000, determined using the Black-Scholes option pricing model measured on the date of grant, which would be the date of the annual meeting of shareholders. These options vest quarterly over approximately one year from the date of grant. Any new directors will receive a pro-rated award, depending on their date of election to the Board. The directors received a total of 41,805 and 33,187 options in fiscal 2013 and 2012, respectively, and the related compensation expense for the three months ended September 30, 2013 and 2012 is included in the amounts discussed in the “Stock-Based Compensation” section of footnote A above. |
Cash_and_Cash_Equivalents
Cash and Cash Equivalents | 3 Months Ended |
Sep. 30, 2013 | |
Cash and Cash Equivalents | |
Cash and Cash Equivalents | D. Cash and Cash Equivalents |
As of September 30, 2013 and June 30, 2013, the Company held $174.8 million and $195.0 million, respectively, in cash and money market funds consisting principally of U.S. Government-issued securities and high quality, short-term commercial paper which were classified as cash and cash equivalents. |
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended | ||||
Sep. 30, 2013 | |||||
Commitments and Contingencies | |||||
Commitments and Contingencies | E. Commitments and Contingencies | ||||
Leases | |||||
Effective July 27, 2007, the Company entered into a lease agreement with Intercontinental Fund III for the rental of approximately 89,000 square feet of laboratory and office space at 830 Winter Street, Waltham, MA. The Company uses this space for its corporate headquarters, research and other operations. The initial term of the lease is for twelve years with an option for the Company to extend the lease for two additional terms of five years. The Company is required to pay certain operating expenses for the leased premises subject to escalation charges for certain expense increases over a base amount. The Company entered into a sublease in December 2009 for 14,100 square feet of this space in Waltham through January 2015, with the sublessee having a conditional option to extend the term for an additional two years. | |||||
Effective April 2012, the Company entered into a sublease agreement for the rental of 7,310 square feet of laboratory and office space at 830 Winter Street, Waltham, MA from Histogenics Corporation. The initial term of the sublease is for three years with a conditional option for the Company to extend the lease through October 2017. The Company is required to pay certain operating expenses for the leased premises subject to escalation charges for certain expense increases over a base amount. | |||||
Effective March 2013, the Company entered into a lease agreement for the rental of 43,850 square feet in Norwood, MA through 2018 with an option to extend the lease for an additional term of five years. The Company is required to pay certain operating expenses for the leased premises subject to escalation charges for certain expense increases over a base amount. | |||||
Effective April 2013, the Company entered into a lease agreement with River Ridge Limited Partnership for the rental of 7,507 square feet of additional office space at 100 River Ridge Drive, Norwood, MA. The initial term of the lease is for five years and two months commencing in August 2013 with an option for the Company to extend the lease for an additional term of five years. The Company is required to pay certain operating expenses for the leased premises subject to escalation charges for certain expense increases over a base amount. | |||||
As of September 30, 2013, the minimum rental commitments for the Company’s facilities, including real estate taxes and other expenses, for the next five fiscal years and thereafter under the non-cancelable operating lease agreements discussed above are as follows (in thousands): | |||||
2014 (nine months remaining) | $ | 5,012 | |||
2015 | 6,780 | ||||
2016 | 6,549 | ||||
2017 | 6,624 | ||||
2018 | 6,831 | ||||
Thereafter | 10,029 | ||||
Total minimum lease payments | $ | 41,825 | |||
Total minimum rental payments from sublease | (781 | ) | |||
Total minimum lease payments, net | $ | 41,044 | |||
Purchase Obligations | |||||
At September 30, 2013, the Company is obligated to a vendor for certain contractual services to be performed in fiscal 2014. Pursuant to the contract, the Company is required to make a $1.2 million payment to the vendor unless the contract is terminated by the Company for cause. | |||||
Collaborations | |||||
The Company is contractually obligated to make potential future success-based regulatory milestone payments in conjunction with a certain collaborative agreement. These payments are contingent upon the occurrence of certain future events and, given the nature of these events, it is unclear when, if ever, the Company may be required to pay such amounts. Further, the timing of any future payment is not reasonably estimable. As of September 30, 2013, the maximum amount that may be payable in the future under the Company’s current collaborative agreement is $2.0 million, $1.4 million of which is reimbursable by a third party under a separate agreement. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 3 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Summary of Significant Accounting Policies | ||||||||||||||
Basis of Presentation | Basis of Presentation | |||||||||||||
The accompanying unaudited consolidated financial statements at September 30, 2013 and June 30, 2013 and for the three months ended September 30, 2013 and 2012 include the accounts of ImmunoGen, Inc., or the Company, and its wholly owned subsidiaries, ImmunoGen Securities Corp. and ImmunoGen Europe Limited. The consolidated financial statements include all of the adjustments, consisting only of normal recurring adjustments, which management considers necessary for a fair presentation of the Company’s financial position in accordance with accounting principles generally accepted in the U.S. for interim financial information. Certain information and footnote disclosures normally included in the Company’s annual financial statements have been condensed or omitted. The preparation of interim financial statements requires the use of management’s estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the interim financial statements and the reported amounts of revenues and expenditures during the reported periods. The results of the interim periods are not necessarily indicative of the results for the entire year. Accordingly, the interim financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2013. | ||||||||||||||
Subsequent Events | Subsequent Events | |||||||||||||
The Company has evaluated all events or transactions that occurred after September 30, 2013 up through the date the Company issued these financial statements. In October 2013, Novartis extended the initial three-year term of its right-to-test agreement with the Company for an additional one-year period by payment of a $5 million fee and took its second license under the agreement which resulted in a $1 million payment to the Company. Additionally, Amgen converted its one non-exclusive license agreement to an exclusive license by payment of a $500,000 fee to the Company. The Company did not have any other material recognizable or unrecognizable subsequent events during this period. | ||||||||||||||
Revenue Recognition | Revenue Recognition | |||||||||||||
The Company enters into licensing and development agreements with collaborative partners for the development of monoclonal antibody-based anticancer therapeutics. The terms of these agreements contain multiple deliverables which may include (i) licenses, or options to obtain licenses, to the Company’s Targeted Antibody Payload, or TAP, technology, (ii) rights to future technological improvements, (iii) research activities to be performed on behalf of the collaborative partner, (iv) delivery of cytotoxic agents and (v) the manufacture of preclinical or clinical materials for the collaborative partner. Payments to the Company under these agreements may include upfront fees, option fees, exercise fees, payments for research activities, payments for the manufacture of preclinical or clinical materials, payments based upon the achievement of certain milestones and royalties on product sales. The Company follows the provisions of the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 605-25, “Revenue Recognition—Multiple-Element Arrangements,” and ASC Topic 605-28, “Revenue Recognition—Milestone Method,” in accounting for these agreements. In order to account for these agreements, the Company must identify the deliverables included within the agreement and evaluate which deliverables represent separate units of accounting based on whether certain criteria are met, including whether the delivered element has stand-alone value to the collaborator. The consideration received is allocated among the separate units of accounting, and the applicable revenue recognition criteria are applied to each of the separate units. | ||||||||||||||
At September 30, 2013, the Company had the following two types of agreements with the parties identified below: | ||||||||||||||
· Development and commercialization licenses to use the Company’s TAP technology and/or certain other intellectual property to develop compounds to a specified target antigen (referred to as development and commercialization licenses, as distinguished from the Company’s right-to-test agreements described elsewhere): | ||||||||||||||
Amgen (three exclusive single-target licenses; one non-exclusive single- target license) | ||||||||||||||
Bayer HealthCare (one exclusive single-target license) | ||||||||||||||
Biotest (one exclusive single-target license) | ||||||||||||||
Lilly (one exclusive single-target license) | ||||||||||||||
Novartis (one license to two related targets: one target on an exclusive basis and the second target on a non-exclusive basis) | ||||||||||||||
Roche, through its Genentech unit (five exclusive single-target licenses) | ||||||||||||||
Sanofi (exclusive license to multiple individual targets) | ||||||||||||||
· Option/research agreement for a defined period of time to secure development and commercialization licenses to use the Company’s TAP technology to develop anticancer compounds to specified targets on established terms (referred to herein as right-to-test agreements): | ||||||||||||||
Sanofi | ||||||||||||||
Novartis | ||||||||||||||
Lilly | ||||||||||||||
There are no performance, cancellation, termination or refund provisions in any of the arrangements that contain material financial consequences to the Company. | ||||||||||||||
Development and Commercialization Licenses | ||||||||||||||
The deliverables under a development and commercialization license agreement generally include the license to the Company’s TAP technology with respect to a specified antigen target, and may also include deliverables related to rights to future technological improvements, research activities to be performed on behalf of the collaborative partner and the manufacture of preclinical or clinical materials for the collaborative partner. | ||||||||||||||
Generally, development and commercialization licenses contain non-refundable terms for payments and, depending on the terms of the agreement, provide that the Company will (i) at the collaborator’s request, provide research services at negotiated prices which are generally consistent with what other third parties would charge, (ii) at the collaborator’s request, manufacture and provide to it preclinical and clinical materials or deliver cytotoxic agents at negotiated prices which are generally consistent with what other third parties would charge, (iii) earn payments upon the achievement of certain milestones and (iv) earn royalty payments, generally until the later of the last applicable patent expiration or 10 to 12 years after product launch. In the case of Kadcyla®, however, the minimum royalty term is 10 years and the maximum royalty term is 12 years on a country-by-country basis. Royalty rates may vary over the royalty term depending on the Company’s intellectual property rights. The Company may provide technical assistance and share any technology improvements with its collaborators during the term of the collaboration agreements. The Company does not directly control when or whether any collaborator will request research or manufacturing services, achieve milestones or become liable for royalty payments. As a result, the Company cannot predict when or if it will recognize revenues in connection with any of the foregoing. | ||||||||||||||
In determining the units of accounting, management evaluates whether the license has stand-alone value from the undelivered elements to the collaborative partner based on the consideration of the relevant facts and circumstances for each arrangement. Factors considered in this determination include the research capabilities of the partner and the availability of TAP technology research expertise in the general marketplace. If the Company concludes that the license has stand-alone value and therefore will be accounted for as a separate unit of accounting, the Company then determines the estimated selling prices of the license and all other units of accounting based on market conditions, similar arrangements entered into by third parties, and entity-specific factors such as the terms of the Company’s previous collaborative agreements, recent preclinical and clinical testing results of therapeutic products that use the Company’s TAP technology, the Company’s pricing practices and pricing objectives, the likelihood that technological improvements will be made, the likelihood that technological improvements made will be used by the Company’s collaborators and the nature of the research services to be performed on behalf of its collaborators and market rates for similar services. | ||||||||||||||
Upfront payments on development and commercialization licenses are deferred if facts and circumstances dictate that the license does not have stand-alone value. Prior to the adoption of Accounting Standards Update (ASU) No. 2009-13, “Revenue Arrangements with Multiple Deliverables” on July 1, 2010, the Company determined that its licenses lacked stand-alone value and were combined with other elements of the arrangement and any amounts associated with the license were deferred and amortized over a certain period, which the Company refers to as the Company’s period of substantial involvement. The determination of the length of the period over which to defer revenue is subject to judgment and estimation and can have an impact on the amount of revenue recognized in a given period. Historically the Company’s involvement with the development of a collaborator’s product candidate has been significant at the early stages of development, and lessens as it progresses into clinical trials. Also, as a drug candidate gets closer to commencing pivotal testing the Company’s collaborators have sought an alternative site to manufacture their products, as the Company’s facility does not produce pivotal or commercial drug product. Accordingly, the Company generally estimates this period of substantial involvement to begin at the inception of the collaboration agreement and conclude at the end of non-pivotal Phase II testing. The Company believes this period of substantial involvement is, depending on the nature of the license, on average six and one-half years. Quarterly, the Company reassesses its periods of substantial involvement over which the Company amortizes its upfront license fees and makes adjustments as appropriate. In the event a collaborator elects to discontinue development of a specific product candidate under a development and commercialization license, but retains its right to use the Company’s technology to develop an alternative product candidate to the same target or a target substitute, the Company would cease amortization of any remaining portion of the upfront fee until there is substantial preclinical activity on another product candidate and its remaining period of substantial involvement can be estimated. In the event that a development and commercialization license were to be terminated, the Company would recognize as revenue any portion of the upfront fee that had not previously been recorded as revenue, but was classified as deferred revenue, at the date of such termination. | ||||||||||||||
Subsequent to the adoption of ASU No. 2009-13, the Company determined that its research licenses lack stand-alone value and are considered for aggregation with the other elements of the arrangement and accounted for as one unit of accounting. | ||||||||||||||
Upfront payments on development and commercialization licenses may be recognized upon delivery of the license if facts and circumstances dictate that the license has stand-alone value from the undelivered elements, which generally include rights to future technological improvements, research services, delivery of cytotoxic agents and the manufacture of preclinical and clinical materials. | ||||||||||||||
The Company recognizes revenue related to research services that represent separate units of accounting as they are performed, as long as there is persuasive evidence of an arrangement, the fee is fixed or determinable, and collection of the related receivable is probable. The Company recognizes revenue related to the rights to future technological improvements over the estimated term of the applicable license. | ||||||||||||||
The Company may also provide cytotoxic agents to its collaborators or produce preclinical and clinical materials at negotiated prices which are generally consistent with what other third parties would charge. The Company recognizes revenue on cytotoxic agents and on preclinical and clinical materials when the materials have passed all quality testing required for collaborator acceptance and title and risk of loss have transferred to the collaborator. Arrangement consideration allocated to the manufacture of preclinical and clinical materials in a multiple-deliverable arrangement is below the Company’s full cost, and the Company’s full cost is not expected to be below its contract selling prices for its existing collaborations for the foreseeable future. During the three months ended September 30, 2012, the difference between the Company’s full cost to manufacture preclinical and clinical materials on behalf of its collaborators as compared to total amounts received from collaborators for the manufacture of preclinical and clinical materials was $755,000. There were no sales of manufactured preclinical or clinical materials during the three months ended September 30, 2013. The majority of the Company’s costs to produce these preclinical and clinical materials are fixed and then allocated to each batch based on the number of batches produced during the period. Therefore, the Company’s costs to produce these materials are significantly impacted by the number of batches produced during the period. The volume of preclinical and clinical materials the Company produces is directly related to the number of clinical trials for which the Company and its collaborators are preparing or currently have underway, the speed of enrollment in those trials, the dosage schedule of each clinical trial and the time period such trials last. Accordingly, the volume of preclinical and clinical materials produced, and therefore the Company’s per batch costs to manufacture these preclinical and clinical materials, may vary significantly from period to period. | ||||||||||||||
The Company may also produce research material for potential collaborators under material transfer agreements. Additionally, the Company performs research activities, including developing antibody specific conjugation processes, on behalf of its collaborators and potential collaborators during the early evaluation and preclinical testing stages of drug development. The Company records amounts received for research materials produced or services performed as a component of research and development support revenue. The Company also develops conjugation processes for materials for later stage testing and commercialization for certain collaborators. The Company is compensated at negotiated rates and may receive milestone payments for developing these processes which are recorded as a component of research and development support revenue. | ||||||||||||||
The Company’s development and commercialization license agreements have milestone payments which for reporting purposes are aggregated into three categories: (i) development milestones, (ii) regulatory milestones, and (iii) sales milestones. Development milestones are typically payable when a product candidate initiates or advances into different clinical trial phases. Regulatory milestones are typically payable upon submission for marketing approval with the U.S. Food and Drug Administration, or FDA, or other countries’ regulatory authorities or on receipt of actual marketing approvals for the compound or for additional indications. Sales milestones are typically payable when annual sales reach certain levels. | ||||||||||||||
At the inception of each agreement that includes milestone payments, the Company evaluates whether each milestone is substantive and at risk to both parties on the basis of the contingent nature of the milestone. This evaluation includes an assessment of whether (a) the consideration is commensurate with either (1) the entity’s performance to achieve the milestone, or (2) the enhancement of the value of the delivered item(s) as a result of a specific outcome resulting from the entity’s performance to achieve the milestone, (b) the consideration relates solely to past performance and (c) the consideration is reasonable relative to all of the deliverables and payment terms within the arrangement. The Company evaluates factors such as the scientific, regulatory, commercial and other risks that must be overcome to achieve the respective milestone, the level of effort and investment required to achieve the respective milestone and whether the milestone consideration is reasonable relative to all deliverables and payment terms in the arrangement in making this assessment. | ||||||||||||||
Non-refundable development and regulatory milestones that are expected to be achieved as a result of the Company’s efforts during the period of substantial involvement are considered substantive and are recognized as revenue upon the achievement of the milestone, assuming all other revenue recognition criteria are met. Milestones that are not considered substantive because we do not contribute effort to the achievement of such milestones are generally achieved after the period of substantial involvement and are recognized as revenue upon achievement of the milestone, as there are no undelivered elements remaining and no continuing performance obligations, assuming all other revenue recognition criteria are met. | ||||||||||||||
Under the Company’s development and commercialization license agreements, the Company receives royalty payments based upon its licensees’ net sales of covered products. Generally, under these agreements the Company is to receive royalty reports and payments from its licensees approximately one quarter in arrears, that is, generally in the second month of the quarter after the licensee has sold the royalty-bearing product or products. The Company recognizes royalty revenues when it can reliably estimate such amounts and collectability is reasonably assured. As such, the Company generally recognizes royalty revenues in the quarter reported to the Company by its licensees, or one quarter following the quarter in which sales by the Company’s licensees occurred. | ||||||||||||||
Right-to-Test Agreements | ||||||||||||||
The Company’s right-to-test agreements provide collaborators the right to (a) test the Company’s TAP technology for a defined period of time through a research, or right-to-test, license, (b) take options, for a defined period of time, to specified targets and (c) upon exercise of those options, secure or “take” licenses to develop and commercialize products for the specified targets on established terms. Under these agreements, fees may be due to the Company (i) at the inception of the arrangement (referred to as “upfront” fees or payments), (ii) upon taking an option with respect to a specific target (referred to as option fees or payments earned, if any, when the option is “taken”), (iii) upon the exercise of a previously taken option to acquire a development and commercialization license(s) (referred to as exercise fees or payments earned, if any, when the development and commercialization license is “taken”), or (iv) some combination of all of these fees. | ||||||||||||||
The accounting for right-to-test agreements is dependent on the nature of the options granted to the collaborative partner. Options are considered substantive if, at the inception of a right-to-test agreement, the Company is at risk as to whether the collaborative partner will choose to exercise the options to secure development and commercialization licenses. Factors that are considered in evaluating whether options are substantive include the overall objective of the arrangement, the benefit the collaborator might obtain from the agreement without exercising the options, the cost to exercise the options relative to the total upfront consideration, and the additional financial commitments or economic penalties imposed on the collaborator as a result of exercising the options. | ||||||||||||||
For right-to-test agreements where the options to secure development and commercialization licenses to the Company’s TAP technology are considered substantive, the Company does not consider the development and commercialization licenses to be a deliverable at the inception of the agreement. For those right-to-test agreements entered into prior to the adoption of ASU No. 2009-13 where the options to secure development and commercialization licenses are considered substantive, the Company has deferred the upfront payments received and recognizes this revenue over the period during which the collaborator could elect to take options for development and commercialization licenses. These periods are specific to each collaboration agreement. If a collaborator takes an option to acquire a development and commercialization license under these agreements, any substantive option fee is deferred and recognized over the life of the option, generally 12 to 18 months. If a collaborator exercises an option and takes a development and commercialization license to a specific target, the Company attributes the exercise fee to the development and commercialization license. Upon exercise of an option to acquire a development and commercialization license, the Company would also attribute any remaining deferred option fee to the development and commercialization license and apply the multiple-element revenue recognition criteria to the development and commercialization license and any other deliverables to determine the appropriate revenue recognition, which will be consistent with the Company’s accounting policy for upfront payments on single-target licenses. In the event a right-to-test agreement were to be terminated, the Company would recognize as revenue any portion of the upfront fee that had not previously been recorded as revenue, but was classified as deferred revenue, at the date of such termination. None of the Company’s right-to-test agreements entered into subsequent to the adoption of ASU No. 2009-13 has been determined to contain substantive options. | ||||||||||||||
For right-to-test agreements where the options to secure development and commercialization licenses to the Company’s TAP technology are not considered substantive, the Company considers the development and commercialization licenses to be a deliverable at the inception of the agreement and applies the multiple-element revenue recognition criteria to determine the appropriate revenue recognition. None of the Company’s right-to-test agreements entered into prior to the adoption of ASU No. 2009-13 has been determined to contain non-substantive options. | ||||||||||||||
The Company does not directly control when or if any collaborator will exercise its options for development and commercialization licenses. As a result, the Company cannot predict when or if it will recognize revenues in connection with any of the foregoing. | ||||||||||||||
Fair Value of Financial Instruments | Fair Value of Financial Instruments | |||||||||||||
Fair value is defined under ASC Topic 820, “Fair Value Measurements and Disclosures,” as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchy to measure fair value which is based on three levels of inputs, of which the first two are considered observable and the last unobservable, as follows: | ||||||||||||||
· Level 1 - Quoted prices in active markets for identical assets or liabilities. | ||||||||||||||
· Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | ||||||||||||||
· Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. | ||||||||||||||
As of September 30, 2013, the Company held certain assets that are required to be measured at fair value on a recurring basis. The following table represents the fair value hierarchy for the Company’s financial assets measured at fair value on a recurring basis as of September 30, 2013 (in thousands): | ||||||||||||||
Fair Value Measurements at September 30, 2013 Using | ||||||||||||||
Quoted Prices in | Significant Other | Significant | ||||||||||||
Active Markets for | Observable Inputs | Unobservable | ||||||||||||
Identical Assets | Inputs | |||||||||||||
Total | (Level 1) | (Level 2) | (Level 3) | |||||||||||
Cash, cash equivalents and restricted cash | $ | 177,069 | $ | 177,069 | $ | — | $ | — | ||||||
As of June 30, 2013, the Company held certain assets that are required to be measured at fair value on a recurring basis. The following table represents the fair value hierarchy for the Company’s financial assets measured at fair value on a recurring basis as of June 30, 2013 (in thousands): | ||||||||||||||
Fair Value Measurements at June 30, 2013 Using | ||||||||||||||
Quoted Prices in | Significant Other | Significant | ||||||||||||
Active Markets for | Observable Inputs | Unobservable | ||||||||||||
Identical Assets | Inputs | |||||||||||||
Total | (Level 1) | (Level 2) | (Level 3) | |||||||||||
Cash, cash equivalents and restricted cash | $ | 197,191 | $ | 197,191 | $ | — | $ | — | ||||||
The fair value of the Company’s cash equivalents is based primarily on quoted prices from active markets. | ||||||||||||||
Unbilled Revenue | Unbilled Revenue | |||||||||||||
The majority of the Company’s unbilled revenue at September 30, 2013 and June 30, 2013 represents research funding earned prior to those dates based on actual resources utilized under the Company’s agreements with various collaborators. | ||||||||||||||
Inventory | Inventory | |||||||||||||
Inventory costs relate to clinical trial materials being manufactured for sale to the Company’s collaborators. Inventory is stated at the lower of cost or market as determined on a first-in, first-out (FIFO) basis. | ||||||||||||||
Inventory at September 30, 2013 and June 30, 2013 is summarized below (in thousands): | ||||||||||||||
September 30, | June 30, | |||||||||||||
2013 | 2013 | |||||||||||||
Raw materials | $ | 363 | $ | 75 | ||||||||||
Work in process | 1,308 | 628 | ||||||||||||
Total | $ | 1,671 | $ | 703 | ||||||||||
Raw materials inventory consists entirely of DM1 and DM4, proprietary cell-killing agents the Company developed as part of its TAP technology. The Company considers more than a twelve month supply of raw materials that is not supported by firm, fixed orders and/or projections from its collaborators to be excess and establishes a reserve to reduce to zero the value of any such excess raw material inventory with a corresponding charge to research and development expense. In accordance with this policy, the Company recorded $135,000 of expense related to excess inventory during the three-month period ended September 30, 2013 compared to $390,000 recorded during the same period last year. | ||||||||||||||
Work in process inventory consists of conjugate manufactured for sale to the Company’s collaborators to be used in preclinical and clinical studies. All conjugate is made to order at the request of the collaborators and subject to the terms and conditions of respective supply agreements. As such, no reserve for work in process inventory is required. | ||||||||||||||
Computation of Net Loss per Common Share | Computation of Net Loss per Common Share | |||||||||||||
Basic and diluted net loss per share is calculated based upon the weighted average number of common shares outstanding during the period. During periods of income, participating securities are allocated a proportional share of income determined by dividing total weighted average participating securities by the sum of the total weighted average common shares and participating securities (the “two-class method”). The Company’s restricted stock participates in any dividends declared by the Company and are therefore considered to be participating securities. Participating securities have the effect of diluting both basic and diluted earnings per share during periods of income. During periods of loss, no loss is allocated to participating securities since they have no contractual obligation to share in the losses of the Company. Diluted (loss) earnings per share is computed after giving consideration to the dilutive effect of stock options that are outstanding during the period, except where such non-participating securities would be anti-dilutive. | ||||||||||||||
The Company’s common stock equivalents, as calculated in accordance with the treasury-stock method, are shown in the following table (in thousands): | ||||||||||||||
Three Months Ended | ||||||||||||||
September 30, | ||||||||||||||
2013 | 2012 | |||||||||||||
Options outstanding to purchase common stock and unvested restricted stock | 8,733 | 7,960 | ||||||||||||
Common stock equivalents under treasury stock method | 2,215 | 2,552 | ||||||||||||
The Company’s common stock equivalents have not been included in the net loss per share calculation because their effect is anti-dilutive due to the Company’s net loss position. | ||||||||||||||
Stock-Based Compensation | Stock-Based Compensation | |||||||||||||
As of September 30, 2013, the Company is authorized to grant future awards under one employee share-based compensation plan, which is the ImmunoGen, Inc. 2006 Employee, Director and Consultant Equity Incentive Plan, or the 2006 Plan. At the annual meeting of shareholders on November 13, 2012, an amendment to the 2006 Plan was approved and an additional 3,500,000 shares were authorized for issuance under this plan. As amended, the 2006 Plan provides for the issuance of Stock Grants, the grant of Options and the grant of Stock-Based Awards for up to 12,000,000 shares of the Company’s common stock, as well as any shares of common stock that are represented by awards granted under the previous stock option plan, the ImmunoGen, Inc. Restated Stock Option Plan, or the Former Plan, that are forfeited, expire or are cancelled without delivery of shares of common stock; provided, however, that no more than 5,900,000 shares shall be added to the 2006 Plan from the Former Plan, pursuant to this provision. Option awards are granted with an exercise price equal to the market price of the Company’s stock at the date of grant. Options vest at various periods of up to four years and may be exercised within ten years of the date of grant. | ||||||||||||||
The stock-based awards are accounted for under ASC Topic 718, “Compensation—Stock Compensation.” Pursuant to Topic 718, the estimated grant date fair value of awards is charged to the statement of operations and comprehensive loss over the requisite service period, which is the vesting period. Such amounts have been reduced by an estimate of forfeitures of all unvested awards. The fair value of each stock option is estimated on the date of grant using the Black-Scholes option-pricing model with the assumptions noted in the following table. As the Company has not paid dividends since inception, nor does it expect to pay any dividends for the foreseeable future, the expected dividend yield assumption is zero. Expected volatility is based exclusively on historical volatility data of the Company’s stock. The expected term of stock options granted is based exclusively on historical data and represents the period of time that stock options granted are expected to be outstanding. The expected term is calculated for and applied to one group of stock options as the Company does not expect substantially different exercise or post-vesting termination behavior among its option recipients. The risk-free rate of the stock options is based on the U.S. Treasury rate in effect at the time of grant for the expected term of the stock options. | ||||||||||||||
Three Months Ended | ||||||||||||||
September 30, | ||||||||||||||
2013 | 2012 | |||||||||||||
Dividend | None | None | ||||||||||||
Volatility | 60.44% | 60.44% | ||||||||||||
Risk-free interest rate | 1.69% | 0.84% | ||||||||||||
Expected life (years) | 6.3 | 6.3 | ||||||||||||
Using the Black-Scholes option-pricing model, the weighted average grant date fair values of options granted during the three months ended September 30, 2013 and 2012 were $10.93 and $8.91 per share, respectively. | ||||||||||||||
Stock compensation expense related to stock options and restricted stock awards granted under the 2006 Plan was $4.7 million and $3.8 million during the three months ended September 30, 2013 and 2012, respectively. As of September 30, 2013, the estimated fair value of unvested employee awards was $28.5 million, net of estimated forfeitures. The weighted-average remaining vesting period for these awards is approximately two and a half years. | ||||||||||||||
During the three months ended September 30, 2013, holders of options issued under the Company’s equity plans exercised their rights to acquire an aggregate of approximately 545,000 shares of common stock at prices ranging from $3.19 to $15.83 per share. The total proceeds to the Company from these option exercises were approximately $4.0 million. | ||||||||||||||
Financial Instruments and Concentration of Credit Risk | Financial Instruments and Concentration of Credit Risk | |||||||||||||
The Company’s cash equivalents consist of money market funds with underlying investments primarily being U.S. Government-issued securities and high quality, short-term commercial paper. All of the Company’s cash and cash equivalents are maintained with three financial institutions in the U.S. The Company uses a Euro-denominated bank account to manage the foreign currency exposures that exist as part of our ongoing business operations. Our foreign currency risk management strategy is principally designed to mitigate the future potential financial impact of changes in the value of transactions, anticipated transactions and balances denominated in foreign currency, resulting from changes in foreign currency exchange rates. | ||||||||||||||
Segment Information | Segment Information | |||||||||||||
During the three months ended September 30, 2013, the Company continued to operate in one reportable business segment which is the business of discovery of monoclonal antibody-based anticancer therapeutics. | ||||||||||||||
The percentages of revenues recognized from significant customers of the Company in the three months ended September 30, 2013 and 2012 are included in the following table: | ||||||||||||||
Three Months Ended | ||||||||||||||
September 30, | ||||||||||||||
Collaborative Partner: | 2013 | 2012 | ||||||||||||
Amgen | 1% | 23% | ||||||||||||
Bayer HealthCare | —% | 20% | ||||||||||||
Biotest | 1% | 23% | ||||||||||||
Lilly | 49% | 6% | ||||||||||||
Novartis | 7% | 24% | ||||||||||||
Roche | 41% | —% | ||||||||||||
There were no other customers of the Company with significant revenues in the three months ended September 30, 2013 and 2012. | ||||||||||||||
Recent Accounting Pronouncements | Recent Accounting Pronouncements | |||||||||||||
In July 2013, the FASB issued guidance to address the diversity in practice related to the financial statement presentation of unrecognized tax benefits as either a reduction of a deferred tax asset or a liability when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. This guidance is effective prospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013. The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial statements. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 3 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Summary of Significant Accounting Policies | ||||||||||||||
Schedule of assets that are required to be measured at fair value on a recurring basis | The following table represents the fair value hierarchy for the Company’s financial assets measured at fair value on a recurring basis as of September 30, 2013 (in thousands): | |||||||||||||
Fair Value Measurements at September 30, 2013 Using | ||||||||||||||
Quoted Prices in | Significant Other | Significant | ||||||||||||
Active Markets for | Observable Inputs | Unobservable | ||||||||||||
Identical Assets | Inputs | |||||||||||||
Total | (Level 1) | (Level 2) | (Level 3) | |||||||||||
Cash, cash equivalents and restricted cash | $ | 177,069 | $ | 177,069 | $ | — | $ | — | ||||||
As of June 30, 2013, the Company held certain assets that are required to be measured at fair value on a recurring basis. The following table represents the fair value hierarchy for the Company’s financial assets measured at fair value on a recurring basis as of June 30, 2013 (in thousands): | ||||||||||||||
Fair Value Measurements at June 30, 2013 Using | ||||||||||||||
Quoted Prices in | Significant Other | Significant | ||||||||||||
Active Markets for | Observable Inputs | Unobservable | ||||||||||||
Identical Assets | Inputs | |||||||||||||
Total | (Level 1) | (Level 2) | (Level 3) | |||||||||||
Cash, cash equivalents and restricted cash | $ | 197,191 | $ | 197,191 | $ | — | $ | — | ||||||
Schedule of inventory | Inventory at September 30, 2013 and June 30, 2013 is summarized below (in thousands): | |||||||||||||
September 30, | June 30, | |||||||||||||
2013 | 2013 | |||||||||||||
Raw materials | $ | 363 | $ | 75 | ||||||||||
Work in process | 1,308 | 628 | ||||||||||||
Total | $ | 1,671 | $ | 703 | ||||||||||
Schedule of common stock equivalents, as calculated in accordance with the treasury-stock method | The Company’s common stock equivalents, as calculated in accordance with the treasury-stock method, are shown in the following table (in thousands): | |||||||||||||
Three Months Ended | ||||||||||||||
September 30, | ||||||||||||||
2013 | 2012 | |||||||||||||
Options outstanding to purchase common stock and unvested restricted stock | 8,733 | 7,960 | ||||||||||||
Common stock equivalents under treasury stock method | 2,215 | 2,552 | ||||||||||||
Schedule of weighted-average assumptions used to estimate the fair value of each stock option | ||||||||||||||
Three Months Ended | ||||||||||||||
September 30, | ||||||||||||||
2013 | 2012 | |||||||||||||
Dividend | None | None | ||||||||||||
Volatility | 60.44% | 60.44% | ||||||||||||
Risk-free interest rate | 1.69% | 0.84% | ||||||||||||
Expected life (years) | 6.3 | 6.3 | ||||||||||||
Schedule of percentage of total revenue recognized from each significant customer | Three Months Ended | |||||||||||||
September 30, | ||||||||||||||
Collaborative Partner: | 2013 | 2012 | ||||||||||||
Amgen | 1% | 23% | ||||||||||||
Bayer HealthCare | —% | 20% | ||||||||||||
Biotest | 1% | 23% | ||||||||||||
Lilly | 49% | 6% | ||||||||||||
Novartis | 7% | 24% | ||||||||||||
Roche | 41% | —% |
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 3 Months Ended | ||||
Sep. 30, 2013 | |||||
Commitments and Contingencies | |||||
Minimum rental commitments for the next five fiscal years and thereafter under the non-cancelable operating lease agreements | As of September 30, 2013, the minimum rental commitments for the Company’s facilities, including real estate taxes and other expenses, for the next five fiscal years and thereafter under the non-cancelable operating lease agreements discussed above are as follows (in thousands): | ||||
2014 (nine months remaining) | $ | 5,012 | |||
2015 | 6,780 | ||||
2016 | 6,549 | ||||
2017 | 6,624 | ||||
2018 | 6,831 | ||||
Thereafter | 10,029 | ||||
Total minimum lease payments | $ | 41,825 | |||
Total minimum rental payments from sublease | (781 | ) | |||
Total minimum lease payments, net | $ | 41,044 |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details) (USD $) | 3 Months Ended | 1 Months Ended | 3 Months Ended | 22 Months Ended | 3 Months Ended | 1 Months Ended | 36 Months Ended | 3 Months Ended | 36 Months Ended | 0 Months Ended | 3 Months Ended | 0 Months Ended | 1 Months Ended | 3 Months Ended | 1 Months Ended | |||||||||||||
Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Oct. 31, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2011 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Mar. 29, 2013 | Sep. 30, 2013 | Mar. 29, 2013 | Oct. 31, 2010 | Oct. 31, 2013 | Sep. 30, 2013 | 31-May-00 | |
item | Development and Commercialization License | Development and Commercialization License | Development and Commercialization License | Development and Commercialization License | Development and Commercialization License | Development and Commercialization License | Right-to-Test Agreements | Right-to-Test Agreements | Amgen | Amgen | Amgen | Bayer HealthCare | Biotest | Lilly | Lilly | Lilly | Lilly | Novartis | Novartis | Novartis | Novartis | Novartis | Novartis | Novartis | Novartis | Roche | Roche | |
item | Minimum | Maximum | Kadcyla | Kadcyla | Minimum | Maximum | Subsequent event | Exclusive development and commercialization license | Non-exclusive development and commercialization license | Exclusive development and commercialization license | Exclusive development and commercialization license | Development and Commercialization License | Exclusive development and commercialization license | Right-to-Test Agreements | Development and Commercialization License | Development and Commercialization License | Exclusive development and commercialization license | Exclusive development and commercialization license | Right-to-Test Agreements | Right-to-Test Agreements | Right-to-Test Agreements | Exclusive development and commercialization license | Exclusive development and commercialization license | |||||
Minimum | Maximum | item | item | item | item | item | item | item | item | item | Subsequent event | item | Kadcyla | |||||||||||||||
Summary of Significant Accounting Policies | ||||||||||||||||||||||||||||
Term of agreement | 3 years | 3 years | 3 years | |||||||||||||||||||||||||
Term of extension of agreement | 1 year | 1 year | ||||||||||||||||||||||||||
Payments for extension of agreement | $5,000,000 | |||||||||||||||||||||||||||
Payments received for the second license | 28,200,000 | 23,500,000 | 20,000,000 | 55,200,000 | 55,400,000 | 1,000,000 | 45,000,000 | 1,000,000 | 2,000,000 | |||||||||||||||||||
Number of non-exclusive license agreements converted to an exclusive license agreement | 1 | |||||||||||||||||||||||||||
Payments received under collaboration agreement in connection with amended agreement | 500,000 | 3,500,000 | ||||||||||||||||||||||||||
Number of types of licensing and development agreements with collaborative partners | 2 | |||||||||||||||||||||||||||
Number of single-target licenses | 3 | 1 | 1 | 1 | 1 | 1 | 1 | 5 | ||||||||||||||||||||
Number of licenses to two related targets | 1 | |||||||||||||||||||||||||||
Number of related targets | 2 | |||||||||||||||||||||||||||
Period after product launch in which the company will earn royalty payments | 10 years | 12 years | 10 years | 12 years | ||||||||||||||||||||||||
Average involvement period over which the upfront payments on single-target licenses are amortized | 6 years 6 months | |||||||||||||||||||||||||||
Difference between the full cost to manufacture and amounts received from collaborators for preclinical and clinical materials | $0 | $755,000 | ||||||||||||||||||||||||||
Number of types of milestone payments under collaborative arrangements | 3 | |||||||||||||||||||||||||||
Average period over which upfront payments are deferred and recognized | 12 months | 18 months |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies (Details 2) (Recurring basis, USD $) | Sep. 30, 2013 | Jun. 30, 2013 |
In Thousands, unless otherwise specified | ||
Total | ||
Fair value hierarchy for the Company's financial assets measured at fair value | ||
Cash, cash equivalents and restricted cash | $177,069 | $197,191 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair value hierarchy for the Company's financial assets measured at fair value | ||
Cash, cash equivalents and restricted cash | $177,069 | $197,191 |
Summary_of_Significant_Account5
Summary of Significant Accounting Policies (Details 3) (USD $) | 3 Months Ended | ||
Share data in Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Jun. 30, 2013 |
Inventory | |||
Raw materials | $363,000 | $75,000 | |
Work in process | 1,308,000 | 628,000 | |
Total | 1,671,000 | 703,000 | |
Minimum supply period of raw materials that is not supported by firm, fixed orders and/or projections from collaborators considered to expense inventory | 12 months | ||
Charges to research and development expense related to raw material inventory identified as excess | $135,000 | $390,000 | |
Computation of Net Loss Per Common Share | |||
Options outstanding to purchase common stock and unvested restricted stock | 8,733 | 7,960 | |
Common stock equivalents under treasury stock method (in shares) | 2,215 | 2,552 |
Summary_of_Significant_Account6
Summary of Significant Accounting Policies (Details 4) (USD $) | 0 Months Ended | 3 Months Ended | |
Nov. 13, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
item | |||
Additional disclosure for options | |||
Cash received for exercise of stock options | $4,025,000 | $688,000 | |
Financial Instruments and Concentration of Credit Risk | |||
Number of financial institutions in the U.S. in which cash and cash equivalents are primarily maintained | 3 | ||
2006 Plan | |||
Stock-Based Compensation | |||
Stock compensation expense | 4,700,000 | 3,800,000 | |
Number of employee share-based compensation plans | 1 | ||
Additional number of shares authorized for issuance | 3,500,000 | ||
Common stock authorized for issuance (in shares) | 12,000,000 | ||
Additional disclosure for options | |||
Estimated fair value of unvested employee awards, net of estimated forfeitures | 28,500,000 | ||
Weighted average vesting period of unvested employee awards | 2 years 6 months | ||
2006 Plan | Maximum | |||
Stock-Based Compensation | |||
Number of shares of common stock added to the Plan from the Former Plan | 5,900,000 | ||
2006 Plan | Stock options | |||
Weighted-average assumptions used to estimate the fair value of each stock option | |||
Number of group of awards for which expected term is calculated for and applied | 1 | ||
Dividend (as a percent) | 0.00% | 0.00% | |
Volatility (as a percent) | 60.44% | 60.44% | |
Risk-free interest rate (as a percent) | 1.69% | 0.84% | |
Expected life | 6 years 3 months 18 days | 6 years 3 months 18 days | |
Weighted-average grant date fair values of options granted (in dollars per share) | $10.93 | $8.91 | |
Additional disclosure for options | |||
Exercised (in shares) | 545,000 | ||
Cash received for exercise of stock options | $4,000,000 | ||
2006 Plan | Stock options | Maximum | |||
Stock-Based Compensation | |||
Vesting period | 4 years | ||
Exercise period | 10 years | ||
Additional disclosure for options | |||
Exercised (in dollars per share) | $15.83 | ||
2006 Plan | Stock options | Minimum | |||
Additional disclosure for options | |||
Exercised (in dollars per share) | $3.19 |
Summary_of_Significant_Account7
Summary of Significant Accounting Policies (Details 5) | 3 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Segment Reporting | ||
Number of reportable segments | 1 | |
Amgen | ||
Collaborative Partner: | ||
Percentages of revenue recognized | 1.00% | 23.00% |
Bayer HealthCare | ||
Collaborative Partner: | ||
Percentages of revenue recognized | 20.00% | |
Biotest | ||
Collaborative Partner: | ||
Percentages of revenue recognized | 1.00% | 23.00% |
Lilly | ||
Collaborative Partner: | ||
Percentages of revenue recognized | 49.00% | 6.00% |
Novartis | ||
Collaborative Partner: | ||
Percentages of revenue recognized | 7.00% | 24.00% |
Roche | ||
Collaborative Partner: | ||
Percentages of revenue recognized | 41.00% |
Collaborative_Agreements_Detai
Collaborative Agreements (Details) (USD $) | 3 Months Ended | 1 Months Ended | 3 Months Ended | 41 Months Ended | 1 Months Ended | 41 Months Ended | ||||
Sep. 30, 2013 | Sep. 30, 2012 | 31-May-00 | Sep. 30, 2013 | 31-May-00 | Sep. 30, 2013 | 31-May-00 | Sep. 30, 2013 | Sep. 30, 2013 | 31-May-00 | |
Roche | Roche | Roche | Roche | Roche | Roche | Roche | Roche | |||
Development, Manufacturing and Commercialization | Development, Manufacturing and Commercialization | Development, Manufacturing and Commercialization | Development, Manufacturing and Commercialization | Development, Manufacturing and Commercialization | Development, Manufacturing and Commercialization | Development, Manufacturing and Commercialization | Development, Manufacturing and Commercialization | |||
Kadcyla | Kadcyla | Kadcyla | Kadcyla | Kadcyla | Kadcyla | Kadcyla | Kadcyla | |||
Maximum | Development milestones | Development milestones | Regulatory milestones | Regulatory milestones | Regulatory milestones | |||||
Collaborative Agreements disclosures | ||||||||||
Payments received under collaboration agreement | $2,000,000 | $13,500,000 | $15,500,000 | |||||||
Potential milestone payment receivable | 44,000,000 | 13,500,000 | 30,500,000 | |||||||
Amount of arrangement consideration included in license and milestone fees | 13,167,000 | 933,000 | 5,000,000 | |||||||
Period in arrears to receive royalty reports and payments related to sales of Kadcyla | 3 months | |||||||||
Royalties on net sales of Kadcyla | $2,053,000 | $2,100,000 |
Collaborative_Agreements_Detai1
Collaborative Agreements (Details 2) (Novartis, USD $) | 3 Months Ended | 36 Months Ended | 0 Months Ended | 1 Months Ended | 3 Months Ended | 36 Months Ended | 0 Months Ended | 3 Months Ended | 36 Months Ended | |||||||||||||
Sep. 30, 2013 | Sep. 30, 2013 | Mar. 29, 2013 | Oct. 31, 2010 | Oct. 31, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Mar. 29, 2013 | Oct. 31, 2010 | Oct. 31, 2010 | Sep. 30, 2013 | Mar. 29, 2013 | Oct. 31, 2010 | Mar. 29, 2013 | Oct. 31, 2010 | Mar. 29, 2013 | Oct. 31, 2010 | Mar. 29, 2013 | Sep. 30, 2013 | Mar. 29, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | |
Right-to-test agreement | Right-to-test agreement | Right-to-test agreement | Development and Commercialization License | Development and Commercialization License | Development and Commercialization License | Development and Commercialization License | Development and Commercialization License | Development and Commercialization License | Development and Commercialization License | Development and Commercialization License | Development and Commercialization License | Development and Commercialization License | Development and Commercialization License | Development and Commercialization License | Exclusive development and commercialization license | Exclusive development and commercialization license | Non-exclusive development and commercialization license | Future Technological Improvements | Research Services | |||
item | item | Subsequent event | Maximum | Development milestones | Development milestones | Development milestones | Regulatory milestones | Regulatory milestones | Sales milestones | Sales milestones | item | item | Minimum | |||||||||
Collaborative Agreements disclosures | ||||||||||||||||||||||
Term of agreement | 3 years | 3 years | ||||||||||||||||||||
Number of extension terms | 1 | |||||||||||||||||||||
Term of extension of agreement | 1 year | 1 year | ||||||||||||||||||||
Payments for extension of agreement | $5,000,000 | |||||||||||||||||||||
Payments received under collaboration agreement | 55,200,000 | 1,000,000 | 45,000,000 | 1,000,000 | 55,400,000 | 4,100,000 | 710,000 | |||||||||||||||
License exercise fee, per license | 1,000,000 | |||||||||||||||||||||
Potential milestone payment receivable | 199,500,000 | 199,500,000 | 5,000,000 | 22,500,000 | 22,500,000 | 77,000,000 | 77,000,000 | 100,000,000 | 100,000,000 | |||||||||||||
Number of development and commercialization licenses taken | 1 | 1 | ||||||||||||||||||||
Number of pre-defined and related undisclosed targets | 2 | |||||||||||||||||||||
Agreed upon fee receivable on conversion of non-exclusive target to an exclusive target | 5,000,000 | |||||||||||||||||||||
Payments received under collaboration agreement in connection with amended agreement | 3,500,000 | |||||||||||||||||||||
Potential milestone payments under second option | $238,000,000 | $22,500,000 | $115,500,000 | $100,000,000 | ||||||||||||||||||
Allocation of fees to deliverables | ||||||||||||||||||||||
Estimated utilization period after commercialization | 10 years | |||||||||||||||||||||
Discount rate (as a percent) | 16.00% | |||||||||||||||||||||
Estimated term of development and commercialization license | 25 years |
Collaborative_Agreements_Detai2
Collaborative Agreements (Details 3) (USD $) | 3 Months Ended | 22 Months Ended | 1 Months Ended | 3 Months Ended | 22 Months Ended | 22 Months Ended | |||||||||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2011 | Aug. 31, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2011 | Dec. 31, 2011 | Sep. 30, 2013 | Dec. 31, 2011 | Dec. 31, 2011 | Dec. 31, 2011 | Sep. 30, 2013 | Sep. 30, 2013 | |
Lilly | Lilly | Lilly | Lilly | Lilly | Lilly | Lilly | Lilly | Lilly | Lilly | Lilly | Lilly | Lilly | Lilly | Lilly | |||
Sales milestones | Right-to-test agreement | Development and Commercialization License | Development and Commercialization License | Development and Commercialization License | Development and Commercialization License | Development and Commercialization License | Development and Commercialization License | Development and Commercialization License | Development and Commercialization License | Development and Commercialization License | Future Technological Improvements | Research Services | |||||
Maximum | Phase I clinical trial | Development milestones | Regulatory milestones | Sales milestones | |||||||||||||
Collaborative Agreements disclosures | |||||||||||||||||
Term of agreement | 3 years | ||||||||||||||||
Payments received under collaboration agreement | $28,200,000 | $800,000 | $20,000,000 | $23,500,000 | $600,000 | $3,300,000 | |||||||||||
Potential milestone payment receivable | 200,500,000 | 5,000,000 | 30,500,000 | ||||||||||||||
License exercise fee, for second license | 2,000,000 | 2,000,000 | |||||||||||||||
License exercise fee, per subsequent license | 2,000,000 | ||||||||||||||||
Potential milestone payments receivable for each subsequent license under agreement | 199,000,000 | 29,000,000 | 70,000,000 | 100,000,000 | |||||||||||||
Allocation of fees to deliverables | |||||||||||||||||
Estimated utilization period after commercialization | 10 years | ||||||||||||||||
Discount rate (as a percent) | 16.00% | ||||||||||||||||
Amount of arrangement consideration included in license and milestone fees | 13,167,000 | 933,000 | 7,800,000 | ||||||||||||||
Estimated term of development and commercialization license | 25 years | ||||||||||||||||
Remaining arrangement consideration to be recognized as license revenue | $15,700,000 | $15,700,000 |
Capital_Stock_Details
Capital Stock (Details) (USD $) | 3 Months Ended | 12 Months Ended | 3 Months Ended | ||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Jun. 30, 2013 | Jun. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
2001 Director Plan | 2001 Director Plan | Compensation Policy for Non-Employee Directors | Compensation Policy for Non-Employee Directors | Compensation Policy for Non-Employee Directors | Compensation Policy for Non-Employee Directors | Compensation Policy for Non-Employee Directors | |
Stock options | Stock options | Stock options | Stock options | Stock options | Deferred share units | Deferred share units | |
Stock-Based Compensation | |||||||
Compensation expense | $3,000 | $14,000 | $98,000 | $78,000 | |||
Stock units issued | 0 | ||||||
Vesting period | 1 year | 1 year | |||||
Grant date fair value | $30,000 | ||||||
Stock options granted to directors (in shares) | 41,805 | 33,187 |
Cash_and_Cash_Equivalents_Deta
Cash and Cash Equivalents (Details) (USD $) | Sep. 30, 2013 | Jun. 30, 2013 | Sep. 30, 2012 | Jun. 30, 2012 |
In Thousands, unless otherwise specified | ||||
Cash and Cash Equivalents | ||||
Cash and cash equivalents | $174,838 | $194,960 | $233,614 | $160,938 |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | Sep. 30, 2013 | Jul. 27, 2007 | Apr. 30, 2012 | Dec. 31, 2009 | Mar. 31, 2013 | Aug. 31, 2013 |
830 Winter Street, Waltham, MA | 830 Winter Street, Waltham, MA | 830 Winter Street, Waltham, MA | Norwood, MA | 100 River Ridge Drive, Norwood, MA | ||
item | sqft | sqft | sqft | sqft | ||
sqft | ||||||
Operating leases | ||||||
Area of space leased (in square feet) | 89,000 | 7,310 | 43,850 | 7,507 | ||
Initial lease term period | 12 years | 3 years | 5 years 2 months | |||
Number of additional terms for which lease agreement can be extended | 2 | |||||
Additional term period for which lease agreement can be extended | 5 years | 5 years | 5 years | |||
Area of property covered under sublease agreement (in square feet) | 14,100 | |||||
Additional period for which sublease agreement can be extended | 2 years | |||||
Minimum rental commitments under the non-cancelable operating lease agreements | ||||||
2014 (nine months remaining) | $5,012,000 | |||||
2015 | 6,780,000 | |||||
2016 | 6,549,000 | |||||
2017 | 6,624,000 | |||||
2018 | 6,831,000 | |||||
Thereafter | 10,029,000 | |||||
Total minimum lease payments | 41,825,000 | |||||
Total minimum rental payments from subleases | -781,000 | |||||
Total minimum lease payments, net | 41,044,000 | |||||
Purchase Obligations | ||||||
Obligation to make payment to vendor for certain contractual services | 1,200,000 | |||||
Collaborations | ||||||
Potential milestone payments receivable | 2,000,000 | |||||
Amount reimbursable by a third party | $1,400,000 |