Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 28, 2018 | Jun. 30, 2017 | |
Document and Entity Information | |||
Entity Registrant Name | IMMUNOGEN INC | ||
Entity Central Index Key | 855,654 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 617,703,981 | ||
Entity Common Stock, Shares Outstanding | 132,846,535 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
ASSETS | ||
Cash and cash equivalents | $ 267,107 | $ 159,964 |
Accounts receivable | 2,649 | 2,026 |
Unbilled revenue | 2,580 | 6,778 |
Inventory | 1,038 | 2,192 |
Prepaid and other current assets | 2,967 | 5,386 |
Total current assets | 276,341 | 176,346 |
Property and equipment, net of accumulated depreciation | 14,538 | 19,498 |
Other assets | 3,797 | 3,020 |
Total assets | 294,676 | 198,864 |
LIABILITIES AND SHAREHOLDERS' DEFICIT | ||
Accounts payable | 8,562 | 7,895 |
Accrued compensation | 11,473 | 6,946 |
Other accrued liabilities | 15,767 | 11,150 |
Current portion of deferred lease incentive | 784 | 784 |
Current portion of liability related to the sale of future royalties, net of deferred financing costs of $772 and $850, respectively | 17,779 | 14,470 |
Current portion of deferred revenue | 1,405 | 14,531 |
Total current liabilities | 55,770 | 55,776 |
Deferred lease incentive, net of current portion | 5,129 | 5,914 |
Deferred revenue, net of current portion | 93,752 | 19,086 |
Convertible 4.5% senior notes, net of deferred financing costs of $50 and $3,035, respectively | 2,050 | 96,965 |
Liability related to the sale of future royalties, net of current portion and deferred financing costs of $2,373 and $3,144, respectively | 151,634 | 169,858 |
Other long-term liabilities | 4,236 | 4,115 |
Total liabilities | 312,571 | 351,714 |
Commitments and contingencies (Note H) | ||
Shareholders' deficit: | ||
Preferred stock, $.01 par value; authorized 5,000 shares; no shares issued and outstanding | ||
Common stock, $0.01 par value; authorized 200,000 shares; issued and outstanding 132,526 and 87,301 shares as of December 31, 2017 and December 31, 2016, respectively | 1,325 | 873 |
Additional paid-in capital | 1,009,362 | 778,847 |
Accumulated deficit | (1,028,582) | (932,570) |
Total shareholders’ deficit | (17,895) | (152,850) |
Total liabilities and shareholders’ deficit | $ 294,676 | $ 198,864 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
CONSOLIDATED BALANCE SHEETS | ||
Current portion of deferred financing costs for the liability related to the sale of future royalties | $ 772 | $ 850 |
Interest rate (as a percent) | 4.50% | |
Non-current deferred financing costs | $ 50 | 3,035 |
Noncurrent portion of deferred financing costs for the liability related to the sale of future royalties | $ 2,373 | $ 3,144 |
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 | 200,000 | 200,000 |
Common stock, issued shares | 132,526 | 87,301 |
Common stock, outstanding shares | 132,526 | 87,301 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) shares in Thousands, $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | |
Revenues: | ||||
License and milestone fees | $ 5,152 | $ 79,469 | $ 26,915 | $ 57,815 |
Royalty revenue | 195 | 13,867 | ||
Non-cash royalty revenue related to the sale of future royalties | 12,894 | 28,142 | 25,299 | 5,484 |
Research and development support | 2,781 | 3,482 | 4,014 | 2,848 |
Clinical materials revenue | 679 | 4,354 | 3,579 | 5,527 |
Total revenues | 21,506 | 115,447 | 60,002 | 85,541 |
Operating Expenses: | ||||
Research and development | 66,566 | 139,739 | 148,077 | 111,768 |
General and administrative | 17,995 | 33,911 | 36,916 | 28,228 |
Restructuring charge | 4,431 | 779 | ||
Total operating expenses | 88,992 | 174,429 | 184,993 | 139,996 |
Loss from operations | (67,486) | (58,982) | (124,991) | (54,455) |
Investment income, net | 259 | 1,146 | 325 | 69 |
Non-cash interest expense on liability related to the sale of future royalties and convertible senior notes | (8,665) | (13,682) | (20,130) | (5,437) |
Interest expense on convertible senior notes | (2,249) | (3,040) | (138) | |
Non-cash debt conversion expense | (22,915) | |||
Other income (expense), net | (742) | 1,461 | 117 | (916) |
Net loss | $ (78,883) | $ (96,012) | $ (144,817) | $ (60,739) |
Basic and diluted net loss per common share (in dollar per share) | $ (0.91) | $ (0.98) | $ (1.67) | $ (0.71) |
Basic and diluted weighted average common shares outstanding (in shares) | 87,102 | 98,068 | 86,976 | 86,038 |
Total comprehensive loss | $ (78,883) | $ (96,012) | $ (144,817) | $ (60,739) |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' (DEFICIT) EQUITY - USD ($) shares in Thousands, $ in Thousands | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Balance at Jun. 30, 2014 | $ 859 | $ 722,971 | $ (648,131) | $ 75,699 |
Balance (in shares) at Jun. 30, 2014 | 85,903 | |||
Increase (Decrease) in Shareholders' (Deficit) Equity | ||||
Net loss | (60,739) | (60,739) | ||
Stock options exercised | $ 7 | 4,422 | 4,429 | |
Stock options exercised (in shares) | 651 | |||
Restricted stock award - net of forfeitures (in shares) | 25 | |||
Stock option and restricted stock compensation expense | 15,326 | 15,326 | ||
Directors' deferred share unit compensation | 389 | 389 | ||
Balance at Jun. 30, 2015 | $ 866 | 743,108 | (708,870) | 35,104 |
Balance (in shares) at Jun. 30, 2015 | 86,579 | |||
Increase (Decrease) in Shareholders' (Deficit) Equity | ||||
Net loss | (144,817) | (144,817) | ||
Stock options exercised | $ 5 | 5,156 | 5,161 | |
Stock options exercised (in shares) | 555 | |||
Restricted stock award - net of forfeitures | $ 1 | (1) | ||
Restricted stock award - net of forfeitures (in shares) | 75 | |||
Stock option and restricted stock compensation expense | 21,868 | 21,868 | ||
Directors' deferred share unit compensation | 380 | 380 | ||
Balance at Jun. 30, 2016 | $ 872 | 770,511 | (853,687) | (82,304) |
Balance (in shares) at Jun. 30, 2016 | 87,209 | |||
Increase (Decrease) in Shareholders' (Deficit) Equity | ||||
Net loss | (78,883) | (78,883) | ||
Restricted stock award - net of forfeitures | $ 1 | 1 | ||
Restricted stock award - net of forfeitures (in shares) | 92 | |||
Stock option and restricted stock compensation expense | 8,121 | 8,121 | ||
Directors' deferred share unit compensation | 215 | 215 | ||
Balance at Dec. 31, 2016 | $ 873 | 778,847 | (932,570) | $ (152,850) |
Balance (in shares) at Dec. 31, 2016 | 87,301 | 87,301 | ||
Increase (Decrease) in Shareholders' (Deficit) Equity | ||||
Net loss | (96,012) | $ (96,012) | ||
Stock options exercised | $ 1 | 649 | 650 | |
Stock options exercised (in shares) | 191 | |||
Restricted stock award - net of forfeitures | $ 21 | (21) | ||
Restricted stock award - net of forfeitures (in shares) | 2,146 | |||
Stock option and restricted stock compensation expense | 11,119 | 11,119 | ||
Directors' deferred share units converted | $ 1 | (1) | 206 | |
Directors' deferred share units converted (in shares) | 53 | |||
Issuance of common stock | $ 167 | 101,496 | 101,663 | |
Issuance of common stock (in shares) | 16,675 | |||
Conversion of debt | $ 262 | 117,067 | 117,329 | |
Conversion of debt (in shares) | 26,160 | |||
Directors' deferred share unit compensation | 206 | |||
Balance at Dec. 31, 2017 | $ 1,325 | $ 1,009,362 | $ (1,028,582) | $ (17,895) |
Balance (in shares) at Dec. 31, 2017 | 132,526 | 132,526 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | |
Cash flows from operating activities: | ||||
Net loss | $ (78,883,000) | $ (96,012,000) | $ (144,817,000) | $ (60,739,000) |
Adjustments to reconcile net loss to net cash used for operating activities: | ||||
Non-cash royalty revenue related to sale of future royalties | (12,894,000) | (28,142,000) | (25,299,000) | (5,484,000) |
Non-cash interest expense on liability related to sale of future royalties and convertible senior notes | 8,665,000 | 13,682,000 | 20,130,000 | 5,437,000 |
Non-cash debt conversion expense | 22,915,000 | |||
Depreciation and amortization | 3,074,000 | 5,963,000 | 5,327,000 | 5,513,000 |
Loss on sale/disposal of fixed assets and impairment charges | 1,130,000 | 239,000 | (21,000) | 7,000 |
Stock and deferred share unit compensation | 8,337,000 | 11,325,000 | 22,248,000 | 15,715,000 |
Deferred rent | 88,000 | 91,000 | 161,000 | 195,000 |
Change in operating assets and liabilities: | ||||
Accounts receivable | (1,143,000) | (623,000) | 4,205,000 | (3,192,000) |
Unbilled revenue | (5,369,000) | 4,198,000 | (695,000) | 615,000 |
Inventory | (1,285,000) | 1,154,000 | 2,028,000 | 15,000 |
Prepaid and other current assets | (505,000) | 2,419,000 | (706,000) | (1,855,000) |
Other assets | 405,000 | (777,000) | (2,456,000) | (761,000) |
Accounts payable | (3,247,000) | 771,000 | 2,649,000 | 3,319,000 |
Accrued compensation | (3,778,000) | 4,527,000 | 2,378,000 | 1,481,000 |
Other accrued liabilities | 960,000 | 4,375,000 | (1,434,000) | 3,248,000 |
Deferred revenue | 747,000 | 61,540,000 | (8,318,000) | (20,155,000) |
Proceeds from landlord for tenant improvements | 42,000 | 144,000 | 1,350,000 | |
Net cash provided (used) for operating activities | (83,656,000) | 7,645,000 | (124,476,000) | (55,291,000) |
Cash flows from investing activities: | ||||
Purchases of property and equipment | (1,406,000) | (1,116,000) | (10,376,000) | (7,425,000) |
Net cash used for investing activities | (1,406,000) | (1,116,000) | (10,376,000) | (7,425,000) |
Cash flows from financing activities: | ||||
Proceeds from stock options exercised | 650,000 | 5,161,000 | 4,429,000 | |
Proceeds from common stock issuance, net of $222 of transaction costs | 101,663,000 | |||
Proceeds from sale of future royalties, net of $5,865 of transaction costs | 194,135,000 | |||
Fees for debt conversion | (1,699,000) | |||
Proceeds from issuance of convertible 4.5% notes, net of $3,392 of transaction costs | 96,608,000 | |||
Net cash provided by financing activities | 100,614,000 | 101,769,000 | 198,564,000 | |
Net change in cash and cash equivalents | (85,062,000) | 107,143,000 | (33,083,000) | 135,848,000 |
Cash and cash equivalents, beginning of period | 245,026,000 | 159,964,000 | 278,109,000 | 142,261,000 |
Cash and cash equivalents, end of period | $ 159,964,000 | 267,107,000 | $ 245,026,000 | $ 278,109,000 |
Supplemental disclosure: | ||||
Cash paid during the year for interest | $ 4,685,000 |
CONSOLIDATED STATEMENTS OF CAS7
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
CONSOLIDATED STATEMENTS OF CASH FLOWS | |
Transaction costs | $ 222 |
Interest rate (as a percent) | 4.50% |
Nature of Business and Plan of
Nature of Business and Plan of Operations | 12 Months Ended |
Dec. 31, 2017 | |
Nature of Business and Plan of Operations | |
Nature of Business and Plan of Operations | A. Nature of Business and Plan of Operations ImmunoGen, Inc. (the Company) was incorporated in Massachusetts in 1981 and is focused on the development of antibody‑drug, or ADC, therapeutics. The Company has generally incurred operating losses and negative cash flows from operations since inception, incurred a net loss of approximately $96.0 million during the year ended December 31, 2017, and has an accumulated deficit of approximately $1.03 billion as of December 31, 2017. The Company has primarily funded these losses through payments received from its collaborations and equity and convertible debt financings. To date, the Company has no product revenue and management expects operating losses to continue for the foreseeable future. At December 31, 2017, the Company had $267.1 million of cash and cash equivalents on hand. The Company anticipates that its current capital resources and expected future collaborator payments under existing collaborations will enable it to meet its operational expenses and capital expenditures for more than twelve months after these financial statements are issued. The Company may raise additional funds through equity or debt financings or generate revenues from collaborators through a combination of upfront license payments, milestone payments, royalty payments, research funding, and clinical material reimbursements. There can be no assurance that the Company will be able to obtain additional debt or equity financing or generate revenues from collaborators on terms acceptable to the Company or at all. The failure of the Company to obtain sufficient funds on acceptable terms when needed could have a material adverse effect on the Company’s business, results of operations and financial condition and require the Company to defer or limit some or all of its research, development and/or clinical projects. The Company is subject to risks common to companies in the biotechnology industry including, but not limited to, the development by its competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, manufacturing and marketing limitations, complexities associated with managing collaboration arrangements, third‑party reimbursements and compliance with governmental regulations. In June 2016, the Company’s Board of Directors approved a change in the Company’s fiscal year from a fiscal year ending on the last day of June of each year to a calendar fiscal year ending on the last day of December of each year, effective January 1, 2017. Accordingly, in addition to financial statements as of and for the year ended December 31, 2017, these financial statements contain six month transitional financial statements as of and for the period ending December 31, 2016. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | B. Summary of Significant Accounting Policies Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, ImmunoGen Securities Corp., ImmunoGen Europe Limited, ImmunoGen (Bermuda) Ltd. and Hurricane, LLC. All intercompany transactions and balances have been eliminated. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States (U.S.) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Subsequent Events The Company has evaluated all events or transactions that occurred after December 31, 2017 up through the date the Company issued these financial statements. In February 2018, following an in-depth review of manufacturing and quality operations, the Board of Directors of the Company authorized management to implement a new operating model that will rely on external manufacturing and quality testing for drug substance and drug product for development programs. The implementation of this new operating model will lead to the ramp-down of manufacturing and quality activities at the Company’s Norwood, Massachusetts facility by the end of 2018, with a full decommissioning of the facility expected by early 2019. Implementation of the new operating model will result in a net reduction of the current workforce by approximately 20 positions by the end of 2018. Communication of the plan to the affected employees was substantially completed on February 8, 2018. In connection with the implementation of the new operating model, the Company estimates the severance charges and retention benefits to be approximately $2.5 million and $2.5 million respectively. The severance charges are expected to be recorded in the first quarter of 2018 and cash payments will be substantially paid out by the end of the second quarter of 2019. The Company did not have any other material recognizable or unrecognizable subsequent events. Revenue Recognition The Company enters into licensing and development agreements with collaborators for the development of antibody‑drug conjugate, or ADC therapeutics. The terms of these agreements contain multiple deliverables which may include (i) licenses, or options to obtain licenses, to the Company’s ADC 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, or FASB, Accounting Standards Codification, or 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 December 31, 2017, the Company had the following three material types of agreements with the parties identified below: · Development and commercialization licenses, which provide the party with the right to use the Company’s ADC technology and/or certain other intellectual property to develop compounds to a specified antigen target: - Amgen (two exclusive single-target licenses – one of which has been sublicensed to Oxford BioTherapeutics Ltd.) - Bayer (one exclusive single-target license) - Biotest (one exclusive single-target license) - CytomX (one exclusive single-target license) - Fusion Pharmaceuticals (one exclusive single-target license) - Lilly (three exclusive single-target licenses) - Novartis (five exclusive single-target licenses and 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 (five fully-paid, exclusive single-target licenses) - Takeda, through its wholly owned subsidiary, Millennium Pharmaceuticals, Inc. (one exclusive single-target license) - Debiopharm (one exclusive single-compound license) · Research license/option agreement for a defined period of time to secure development and commercialization licenses to use the Company’s ADC technology to develop anticancer compounds to specified targets on established terms (referred to herein as right-to-test agreements): - Takeda, through its wholly owned subsidiary, Millennium Pharmaceuticals, Inc. · Collaboration and option agreement for a defined period of time to secure development and commercialization licenses to develop and commercialize specified anticancer compounds on established terms: - Jazz Pharmaceuticals 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 ADC 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, regardless of patent protection. Royalty rates may vary over the royalty term depending on the Company’s intellectual property rights and/or the presence of comparable competing products. 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 ADC 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 ADC technology, the Company’s pricing practices and pricing objectives, the likelihood that technological improvements will be made, and, if 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 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 ever be below its contract selling prices for its existing collaborations. During the year ended December 31, 2017, the six months ended December 31, 2016, and the fiscal years ended June 30, 2016 and 2015, 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 $3.1, $0.9, $6.9 and $9.2 million, respectively. 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 the Company and its collaborators are preparing for 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 or third 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 ADC 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. None of the Company’s right to test agreements entered into subsequent to the adoption of Accounting Standards Update, or ASU, No. 2009 13, “Revenue Arrangements with Multiple Deliverables” on July 1, 2010 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 ADC technology are not considered substantive, the Company considers the development and commercialization licenses to be a deliverable at the inception of the agreement and apply the multiple element revenue recognition criteria to determine the appropriate revenue recognition. 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. Collaboration and Option Agreements The Company’s collaboration and option agreements provide collaborators the right, for a defined period of time, to opt-in or “take” licenses to develop and commercialize anticancer compounds to 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 the opt-in 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”), (iii) at the collaborator’s request, provide research services at negotiated prices which are generally consistent with what other third parties would charge, or (iv) some combination of all of these fees. The accounting for collaboration and option agreements is dependent on the nature of the options granted to the collaborative partner. Options are considered substantive if, at the inception of an 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. In determining the units of accounting, management evaluates whether the options or licenses have stand‑alone value from the undelivered elements to the collaborative partner based on the consideration of the relevant facts and circumstances. An option may be a separate unit of accounting if it is granted at a significant discount, however it generally does not have stand-alone value from the license as it only grants a right to receive a license versus a license itself. If the Company concludes that an option and license combined has stand‑alone value and therefore will be accounted for as a separate unit of accounting, it then determines the estimated selling prices of the option and all other units of accounting based on an option pricing model using the following inputs; a) estimated fair value of each program, b) the amount the partner would pay to exercise the option to obtain the license, c) volatility during the expected term of the option and d) risk free interest rate. A risk adjusted discounted cash flow model is then used to estimate the fair value of the option with volatility determined using the stock prices of comparable companies. The cash flow is discounted at a rate representing the Company’s estimate of its cost of capital at the time. 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. The Company does not control when or if any collaborator will exercise its options for development and commercialization licenses. As a result, it cannot predict when or if it will recognize revenues in connection with any of the foregoing. In determining whether a collaboration and option agreement is within the scope of ASC 808, management evaluates the level of involvement of both companies in the development and commercialization of the products to determine if both parties are active participants and if both parties are exposed to risks and rewards dependent on the commercial success of the licensed products. If the agreement is determined to be within the scope of ASC 808, the Company will segregate the research and development activities and the related cost sharing arrangement. Payments made by the Company for such activities will be recorded as research and development expense and reimbursements received from its partner will be recognized as an offset to research and development expense. 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 net realizable value as determined on a first‑in, first‑out (FIFO) basis. Inventory at December 31, 2017 and 2016 is summarized below (in thousands): December 31, December 31, 2017 2016 Raw materials $ 40 $ 357 Work in process 998 1,835 Total $ 1,038 $ 2,192 Raw materials inventory consists entirely of proprietary cell‑killing agents the Company developed as part of its ADC technology. All raw materials inventory is currently procured from two suppliers. 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. Based on historical reprocessing or reimbursement required for conjugate that did not meet specification and status of current conjugate on hand or conjugate shipped to collaborators but not yet released per the terms of the respective supply agreements, no reserve for work in process inventory was determined to be required at December 31, 2017 or 2016. As discussed above, the Company’s costs to manufacture conjugate on behalf of its partners are greater than the supply prices charged to partners, and therefore costs are capitalized into inventory at the supply prices which represent net realizable value. Raw materials inventory cost is stated net of write‑downs of $1.1 million as of both December 31, 2017 and 2016. The write‑downs represent the cost of raw materials that the Company considers to be in excess of a twelve‑month supply based on firm, fixed orders and projections from its collaborators as of the respective balance sheet date. Due to yield fluctuations, the actual amount of raw materials that will be produced in future periods under third‑party supply agreements is highly uncertain. As such, the amount of raw materials produced could be more than is required to support the development of the Company’s collaborators’ product candidates. Such excess supply, as determined under the Company’s inventory reserve policy, is charged to research and development expense. The Company produces preclinical and clinical materials for its collaborators either in anticipation of or in support of preclinical studies and clinical trials, or for process development and analytical purposes. Under the terms of supply agreements with its collaborators, the Company generally receives rolling six‑month firm, fixed orders for conjugate that the Company is required to manufacture, and rolling twelve‑month manufacturing projections for the quantity of conjugate the collaborator expects to need in any given twelve‑month period. The amount of clinical material produced is directly related to the number of collaborator anticipated or on‑going clinical trials for which the Company is producing clinical material, the speed of enrollment in those trials, the dosage schedule of each clinical trial and the time period, if any, during which patients in the trial receive clinical benefit from the clinical materials. Because these elements are difficult to estimate over the course of a trial, substantial differences between collaborators’ actual manufacturing orders and their projections could result in the Company’s usage of raw materials varying significantly from estimated usage at an earlier reporting period. To the extent that a collaborator has provided the Company with a firm, fixed order, the collaborator is required by contract to reimburse the Company the full negotiated price of the conjugate, even if the collaborator subsequently cancels the manufacturing run. The Company capitalizes raw material as inventory upon receipt and accounts for the raw material inventory as follows: a) to the extent that the Company has up to twelve months of firm, fixed orders and/or projections from its collaborators, the Company capitalizes the value of raw materials that will be used in the production of conjugate subject to these firm, fixed orders and/or projections; b) 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; and c) the Company also considers any other external factors and information of which it becomes aware and assesses the impact of such factors or information on the net realizable value of the raw material inventory at each reporting period. During the year ended December 31, 2017, the six month transition period ended December 31, 2016 and fiscal years 2016 and 2015, the Company obtained additional amounts of its cell-killing agents DMx from its supplier which yielded more material than would be required by the Company’s collaborators over the next twelve months, and as a result, the Company recorded $403,000, $150,000, $1.1 million and $1.0 million, respectively, of charges to research and development expense related to raw material inventory identified as excess. Increases in the Company’s on‑hand supply of raw materials, or a reduction to the Company’s collaborators’ projections, could result in significant changes in the Company’s estimate of the net realizable value of such raw material inventory. Reductions in collaborators’ projections could indicate that the Company has excess raw material inventory and the Company would then evaluate the need to record write‑downs as charges to research and development expense. Unbilled Revenue Included in unbilled revenue at December 31, 2016 is a $5 million partner milestone achieved in December 2016 which was subsequently invoiced in January 2017. The additional balance at December 31, 2016, as well as the balance as of December 31, 2017, substantially represents research funding earned based on actual resources utilized under the Company’s various collaborator agreements. Other Accrued Liabilities Other accrued liabilities consisted of the following at December 31, 2017 and 2016 (in thousands): December 31, December 31, 2017 2016 Accrued contract payments $ 4,901 $ 1,980 Accrued clinical trial costs 8,400 4,700 Accrued professional services 723 865 Accrued employee benefits 574 676 Accrued public reporting charges 156 156 Accrued interest on convertible senior notes — 2,388 Other current accrued liabilities 1,013 385 Total $ 15,767 $ 11,150 Deferred Revenue Deferred revenue represents amounts related to partner agreements that have yet to be recognized as revenue. Included in the total of deferred revenue is $6.8 million related to the rights to future technological improvements for our partners at December 31, 2017 and $7.1 million at December 31, 2016. The balance of deferred revenue substantially relates to revenue to be recognized upon the granting of a license to partners. Research and Development Expenses The Company’s research and development expenses are charged to expense as incurred and relate to (i) research to evaluate new targets and to develop and evaluate new antibodies, linkers and cytotoxic agents, (ii) preclinical testing of its own and, in certain instances, its collaborators’ product candidates, and the cost of its own clinical trials, (iii) development related to clinical and commercial manufacturing processes and (iv) manufacturing operations which also include raw materials. Payments made by the Company in advance for research and development services not yet provided and/or materials not yet delivered and accepted are recorded as prepaid expenses and are included in the accompanying Consolidated Balance Sheets as prepaid and other current assets. Income Taxes The Company uses the liability method to account for income taxes. Deferred tax assets and liabilities are determined based on differences between the financial reporting and income tax basis of assets and liabilities, as well as net operating loss carry forwards and tax credits and are measured using the enacted tax rates and laws that will be in effect when the differences reverse. A valuation allowance against net deferred tax assets is recorded if, based on the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. Financial Instruments and Concentration of Credit Risk Cash and cash equivalents are primarily maintained with three financial institutions in the U.S. Deposits with banks may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed upon demand and, therefore, bear minimal 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. Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash, cash equivalents and marketable securities. The Company held no marketable securities as of December 31, 2017 or 2016. The Company’s investment policy, approved by the Board of Directors, limits the amount it may invest in any one type of investment, thereby reducing credit risk concentrations. Cash and Cash Equivalents All highly liquid financial instruments with maturities of three months or less when purchased are considered cash equivalents. As of December 31, 2017 and 2016, the Company held $267.1 million and $160.0 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 cla |
Agreements
Agreements | 12 Months Ended |
Dec. 31, 2017 | |
Agreements | |
Agreements | C. Agreements Significant Collaborative Agreements Roche In 2000, the Company granted Genentech, now a unit of Roche, an exclusive development and commercialization license to use the Company’s maytansinoid ADC 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 ADC compounds targeting HER2. In 2013, the HER2‑targeting ADC compound, Kadcyla, was approved for marketing in the U.S., Japan, and the European Union, or EU. Roche has also received marketing approval in various other countries around the world. Roche is responsible for the manufacturing, product development, and marketing of any 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. Through December 31, 2017, the Company has received and recognized $13.5 million and $20.5 million in development and regulatory milestone payments, respectively, related to Kadcyla. The next potential milestone the Company will be entitled to receive will be a $5 million regulatory milestone for marketing approval of Kadcyla for a first extended indication as defined in the agreement. Based on an evaluation of the effort contributed towards the achievement of this future milestone, the Company 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, $28.1, $12.9, $25.3, $5.5 million of non-cash royalties on net sales of Kadcyla were recorded and included in royalty revenue for the year ended December 31, 2017, the six‑month period ended December 31, 2016 the year ended June 30, 2016 and the year ended June 30, 2015. Kadcyla sales occurring after January 1, 2015 are covered by a royalty purchase agreement whereby the associated cash is remitted to Immunity Royalty Holdings, L.P, or IRH, as discussed further in Note F. Roche, through its Genentech unit, also has licenses for the exclusive right to use the Company’s maytansinoid ADC technology with antibodies to four undisclosed targets, which were granted under the terms of a separate, now expired, 2000 right‑to‑test agreement with Genentech. For each of these licenses the Company received a $1 million license fee and is entitled to receive up to a total of $38 million in milestone payments and also royalties on the sales of any resulting products. The total milestones are categorized as follows: development milestones—$8 million; regulatory milestones—$20 million; and sales milestones—$10 million. The Company has not received any milestone payments from these agreements through December 31, 2017. Roche is responsible for the development, manufacturing, and marketing of any products resulting from these licenses. The next potential milestone the Company will be entitled to receive under any of these agreements will be a development milestone for filing of an IND application which will result in a $1 million payment being due. At the time of execution of each of these development and commercialization licenses, there was significant uncertainty as to whether this milestone would be achieved. In consideration of this, as well as the Company’s past involvement in the research and manufacturing these products, this milestone was deemed substantive. The Company received non‑refundable technology access fees totaling $5 million for the eight‑year term of the right‑to‑test agreement. The upfront fees were deferred and recognized ratably over the period during which Genentech could elect to obtain product licenses. Amgen Under a now‑expired right‑to‑test agreement established in 2000, the Company granted Amgen three exclusive development and commercialization licenses, for which the Company received an exercise fee of $1 million for each license taken. In May 2013, the Company granted Amgen one non‑exclusive development and commercialization license, for which the Company received an exercise fee of $500,000. In October 2013, the non‑exclusive license was amended and converted to an exclusive license, for which Amgen paid an additional $500,000 fee to the Company. Amgen has sublicensed its rights under this license to Oxford BioTherapeutics Ltd. In December 2015, Amgen advised the Company that it had discontinued development of two product candidates, AMG 595 and AMG 172 that had been covered by two of Amgen’s four exclusive licenses, and in February 2016, Amgen subsequently terminated these two licenses. For each of the two remaining development and commercialization licenses taken, the Company is entitled to receive up to a total of $34 million in milestone payments, plus royalties on the commercial sales of any resulting products. The total milestones per license are categorized as follows: development milestones—$9 million; regulatory milestones—$20 million; and sales milestones—$5 million. Amgen (or its sublicensee(s)) is responsible for the manufacturing, product development, and marketing of any products resulting from these development and commercialization licenses. Through December 31, 2017, the Company has received and recognized an aggregate of $3 million in milestone payments for compounds covered under this agreement now or in the past. In September 2015, Amgen’s IND under the remaining license not sublicensed to Oxford BioTherapeutics became effective, triggering a $1 million milestone payment to the Company which is included in license and milestone fee revenue for the year ended June 30, 2016. The next potential milestone the Company will be entitled to receive under this license will be a development milestone for the first dosing of a patient in a U.S. Phase II clinical trial, which will result in a $3 million payment being due. The next potential milestone the Company will be entitled to receive under the May 2013 license will be a $1 million development milestone for an IND becoming effective. At the time of execution of each of these development and commercialization licenses, 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. Costs directly attributable to the Amgen collaborative agreement are comprised of compensation and benefits related to employees who provided research and development services on behalf of Amgen as well as costs of clinical materials sold. Indirect costs are not identified to individual collaborators. The costs related to the research and development services amounted to $15,000 and $62,000 for the fiscal years 2016 and 2015, respectively. There were no similar costs recorded after fiscal year 2016. Sanofi Collaboration Agreement In 2003, the Company entered into a broad collaboration agreement with Sanofi (formerly Aventis Pharmaceuticals) to discover, develop and commercialize antibody‑based products. The collaboration agreement provided Sanofi with worldwide development and commercialization rights to new antibody‑based products directed to targets that are included in the collaboration, including the exclusive right to use the Company’s maytansinoid ADC technology in the creation of products developed to these targets. Prior to the amendment of our license agreements with Sanofi, which is discussed below, the Company was entitled to receive milestone payments potentially totaling $21.5 million, per target, plus royalties on the commercial sales of any resulting products. The total milestones were categorized as follows: development milestones—$7.5 million; and regulatory milestones—$14 million. Through December 31, 2017, the Company has recognized an aggregate of $26.5 million in development milestone payments for compounds covered under this agreement now or in the past, including $6 million of milestone payments received and included in license and milestone fee revenue for the year ended December 31, 2017 and $4 million of milestone payments received and included in license and milestone fee revenue for the fiscal year ended June 30, 2015. Right-to-Test Agreement Under a separate, now expired right-to-test agreement, in December 2013, the Company granted Sanofi one exclusive development and commercialization license. Under this license, the Company received an exercise fee of $2 million and was recognizing this amount as revenue ratably over the Company’s estimated period of its substantial involvement. The Company had previously estimated this development period would conclude at the end of non-pivotal Phase II testing. During fiscal 2015, the Company determined it would not be substantially involved in the development and commercialization of the product based on Sanofi’s current plans to develop and manufacture the product without the assistance of the Company. As a result of this determination, the Company recognized the balance of the upfront exercise fee during the first quarter of fiscal 2015. This change in estimate resulted in an increase to license and milestone fees of $1.5 million for the year ended June 30, 2015 compared to amounts that would have been recognized pursuant to the Company’s previous estimate. In May 2017, the Company and an affiliate of Sanofi amended the license agreements covering all compounds in development by Sanofi using the Company’s technology. Under the terms of the amended 2003 collaboration and license agreement, the Company granted Sanofi a fully-paid, exclusive license to develop, manufacture, and commercialize four experimental compounds in development. The Company also amended a separate 2013 exclusive license to grant Sanofi a fully-paid, exclusive license to develop, manufacture and commercialize another experimental compound being studied for the treatment of solid tumors. As consideration for these amendments, the Company received a $30 million payment and agreed to forego a limited co-promotion option in the U.S. with respect to the compounds covered by the 2003 agreement, as well as future milestones or royalties with respect to all licensed products. In accordance with ASC-605-25, the Company determined that there were no remaining deliverables upon execution of the amendments, and accordingly, the $30 million has been recognized as revenue and is included in license and milestone fee revenue for the year ended December 31, 2017. Biotest In 2006, the Company granted Biotest an exclusive development and commercialization license to our maytansinoid ADC technology for use with antibodies that target CD138. The product candidate indatuximab ravtansine is in development under this agreement. Biotest is responsible for the manufacturing, product development, and marketing of any products resulting from the agreement. The Company received a $1 million upfront payment upon execution of the agreement and could receive up to $35.5 million in milestone payments, as well as royalties on the commercial sales of any resulting products. The total milestones are categorized as follows: development milestones—$4.5 million; and regulatory milestones—$31 million. In September 2008, Biotest began Phase I evaluation of indatuximab ravtansine which triggered a $500,000 milestone payment to the Company. The next potential milestone the Company will be entitled to receive will be a development milestone for commencement of a Phase IIb clinical trial (as defined in the agreement) which will result in a $2 million payment being due. At the time of execution of this agreement, 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 this product, these milestones were deemed substantive. Costs directly attributable to the Biotest collaborative agreement are comprised of compensation and benefits related to employees who provided research and development services on behalf of Biotest as well as costs of clinical materials sold. Indirect costs are not identified to individual collaborators. The costs related to the research and development services amounted to $41,000, $22,000, $160,000, and $309,000 for the year ended December 31, 2017, the six months ended December 31, 2016 and fiscal years 2016 and 2015, respectively. The costs related to clinical materials sold were $549,000, $1.8 million and $3 million for the six months ended December 31, 2016 and fiscal years 2016 and 2015, respectively. There were no costs related to clinical materials sold for the year ended December 31, 2017. Bayer In 2008, the Company granted Bayer an exclusive development and commercialization license to the Company’s maytansinoid ADC technology for use with antibodies or other proteins that target mesothelin. Bayer HealthCare is responsible for the research, development, manufacturing, and marketing of any products resulting from the license. The Company received a $4 million upfront payment upon execution of the agreement which was recognized as revenue ratably over the Company’s estimated period of substantial involvement which concluded in September 2012. For each compound developed and marketed by Bayer under this collaboration the Company is entitled to receive a total of $170.5 million in milestone payments, plus tiered royalties between 4 - 7% on the commercial sales of any resulting products. The total milestones are categorized as follows: development milestones—$16 million; regulatory milestones—$44.5 million; and sales milestones—$110 million. Through December 31, 2017, the Company has received and recognized an aggregate of $13 million in milestone payments under this agreement. In January 2016, Bayer initiated a Phase II clinical study designed to support registration of its ADC product candidate, anetumab ravtansine, triggering a $10 million development milestone payment to the Company which is included in license and milestone fee revenue for the year ended June 30, 2016. In July 2017, Bayer announced that its Phase II clinical study did not meet its primary endpoint of progression-free survival. The safety and tolerability of anetumab ravtansine were consistent with earlier clinical findings and Bayer is continuing development in additional studies, including a Phase 1b multi-indication study in six different types of advanced solid tumors, and a Phase 1b combination-study in patients with recurrent platinum-resistant ovarian cancer. The next potential milestone the Company will be entitled to receive will be either a development milestone for commencement of a pivotal clinical trial for a second indication for anetumab ravtansine which will result in a $2 million payment being due or a regulatory milestone for filing of regulatory approval for its first indication for anetumab ravtansine which will result in a $6 million payment being due. At the time of execution of this agreement, 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 supply of cytotoxic agent for this product candidate, these milestones were deemed substantive. Novartis The Company granted Novartis exclusive development and commercialization licenses to the Company’s maytansinoid and IGN ADC technology for use with antibodies to six specified targets under a now-expired right-to-test agreement established in 2010. The Company received a $45 million upfront payment in connection with the execution of the right‑to‑test agreement in 2010, and for each development and commercialization license taken for a specific target, the Company received an exercise fee of $1 million and is entitled to receive 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 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. 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. In March 2013, the Company and Novartis amended the right‑to‑test agreement so that Novartis could take a license to develop and commercialize products directed at two undisclosed, related 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 no longer be converted to an exclusive target due to the expiration of the right-to-test agreement. The Company received a $3.5 million fee in connection with the execution of the amendment to the agreement. In connection with the amendment, in March 2013, the Company granted Novartis 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 received 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 and November 2013, the Company granted Novartis its second and third exclusive licenses to single targets, and in October 2014, the three remaining exclusive licenses, each triggering a $1 million payment to the Company and the opportunity to receive milestone payments totaling $199.5 million, as outlined above, plus royalties on the commercial sales of any resulting products. In January 2015 and May 2015, Novartis initiated Phase I, first-in-human clinical testing of its cKit-targeting ADC product candidate, LOP628, and P-cadherin-targeting ADC product candidate, PCA062, respectively, triggering a $5 million development milestone payment to the Company with each event, both of which are included in license and milestone fee revenue for the year ended June 30, 2015. Novartis later discontinued clinical testing of LOP628. In December 2016, Novartis initiated Phase I, first-in-human clinical testing of its CDH6-targeting ADC product candidate, HKT288, triggering a $5 million milestone payment which the Company received in 2017. The next payment the Company could receive would be either a $7.5 million development milestone for commencement of a Phase II clinical trial under these three licenses or a $5 million development milestone for commencement of a Phase I clinical trial under any of its other three licenses. 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. Costs directly attributable to the Novartis collaborative agreement are comprised of compensation and benefits related to employees who provided research and development services on behalf of Novartis as well as costs of clinical materials sold. Indirect costs are not identified to individual collaborators. The costs related to the research and development services amounted to $32,000, $17,000, $67,000, and $141,000 for the year ended December 31, 2017, the six months ended December 31, 2016 and fiscal years 2016 and 2015, respectively. The cost related to clinical materials sold was $644,000 for fiscal year 2015. There were no similar costs recorded after fiscal year 2015. Lilly The Company granted Eli Lilly and Company (Lilly) three exclusive development and commercialization licenses under a now-expired right-to-test agreement established in 2011. The Company received a $20 million upfront payment in connection with the execution of the right‑to‑test agreement in 2011. Under the terms of this right-to-test agreement, the first license had no associated exercise fee, and the second and third licenses each had a $2 million exercise fee. The first development and commercialization license was granted in August 2013 and the agreement was amended in December 2013 to provide Lilly with an extension provision and retrospectively include a $2 million exercise fee for the first license in lieu of the fee due for either the second or third license. The second and third licenses were granted in December 2014, with one including the $2 million exercise fee and the other not. Under the two licenses with the $2 million exercise fee, the Company is entitled to receive up to a total of $199 million in milestone payments, plus royalties on the commercial sales of any resulting products. Under the license granted in December 2014 without the exercise fee, 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. The total milestones are categorized as follows: development milestones—$29 million for the two development and commercialization licenses with the $2 million exercise fee, and $30.5 million for the one development and commercialization license with no exercise fee; regulatory milestones—$70 million in all cases; and sales milestones—$100 million in all cases. In September 2015, Lilly began Phase I evaluation of one of its licensed ADC products which triggered a $5 million milestone payment to the Company which is included in license and milestone fee revenue for the fiscal year ended June 30, 2016. The next payment the Company could receive would be either a $9 million development milestone for commencement of a Phase II clinical trial under this license or a $5 million development milestone payment with the initiation of a Phase I clinical trial under either of its other two development and commercialization licenses taken. At the time of execution of this agreement, there was significant uncertainty as to whether these milestones would be achieved. In consideration of this, as well as the Company’s expected involvement in the research and manufacturing of these product candidates, these milestones were 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. Costs directly attributable to the Lilly collaborative agreement are comprised of compensation and benefits related to employees who provided research and development services on behalf of Lilly as well as costs of clinical materials sold. Indirect costs are not identified to individual collaborators. The costs related to the research and development services amounted to $74,000, $46,000, $182,000, and $499,000 for the year ended December 31, 2017, the six months ended December 31, 2016 and fiscal years 2016 and 2015, respectively. The costs related to clinical materials sold were $1.2 million $1.1 million and $1.1 million for the year ended December 31, 2017 and fiscal years 2016 and 2015, respectively. There were no similar costs recorded during the six months ended December 31, 2016. CytomX In January 2014, the Company entered into a reciprocal right-to-test agreement with CytomX Therapeutics, Inc. (CytomX). The agreement provides CytomX and the Company with the right to test the Company's ADC technology with CytomX masked antibodies, which it calls Probodies™, to create product candidates for a specified number of targets. Each company has defined rights to test the other company’s technology with its technology under a right-to-test, or research, license, and to subsequently take an exclusive, worldwide license to use the other company’s technology with its technology to develop and commercialize products for the specified targets on terms agreed upon at the inception of the right-to-test agreement. The Company received no upfront cash payment in connection with the execution of the right-to-test agreement. The terms of the right-to-test agreement require the Company and CytomX to each take its respective development and commercialization licenses by the end of the term of the research licenses. In addition, both the Company and CytomX are required to perform specific research activities under the right-to-test agreement on behalf of the other party for no monetary consideration. In February 2016, the Company granted CytomX its development and commercialization license for a specified target. An amendment of the agreement executed simultaneously with that license granted CytomX the right, for a specified period of time, to substitute the specified target with another as yet unspecified target. Accordingly, the revenue associated with this license was deferred until the expiration of that substitution right in January 2017, whereupon the Company recognized $12.7 million of the $13 million of arrangement consideration allocated to the development and commercialization license, which is included in license and milestone fee revenue for the year ended December 31, 2017. With respect to the development and commercialization license granted to CytomX, the Company is entitled to receive up to a total of $160 million in milestone payments plus royalties on the commercial sales of any resulting product. The total milestones are categorized as follows: development milestones—$10 million; regulatory milestones—$50 million; and sales milestones—$100 million. In June 2017, CytomX enrolled its first patient in a Phase 1 clinical trial for its product candidate, CX-2009, triggering a $1 million development milestone payment which is included in license and milestone fee revenue for the year ended December 31, 2017. Assuming no annual maintenance fee is payable as described below, the next payment the Company could receive would be a $3 million development milestone payment with commencement of a Phase II clinical trial. At the time of execution of the right‑to‑test agreement, there was significant uncertainty as to whether the milestones related to the Phase I and II clinical trials would be achieved. In consideration of this, as well as the Company’s expected involvement in the research and manufacturing of any product candidate, these milestones were deemed substantive. CytomX is responsible for the manufacturing, product development, and marketing of any products resulting from the development and commercialization license taken by CytomX under this collaboration. With respect to any development and commercialization license that may be granted by CytomX to the Company, the Company will potentially be required to pay up to a total of $80 million in milestone payments per license, plus royalties on the commercial sales of any resulting product. The total milestones per license are categorized as follows: development milestones—$7 million; regulatory milestones—$23 million; and sales milestones—$50 million. Assuming no annual maintenance fee is payable as described below, the next payment the Company could be required to make is a $1 million development milestone payment with commencement of a Phase I clinical trial. The Company is responsible for the manufacturing, product development and marketing of any products resulting from any development and commercialization license taken by the Company under this collaboration. In addition, each party may be liable to pay annual maintenance fees to the other party if the licensed product candidate covered under each development and commercialization license has not progressed to a specified stage of development within a specified time frame. The arrangement was accounted for based on the fair value of the items exchanged. The items to be delivered to CytomX under the arrangement are accounted for under the Company’s revenue recognition policy. The items to be received from CytomX are recorded as research and development expenses as incurred. 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 license, rights to future technological improvements, and the research services. The research license in the right‑to‑test agreement was determined not to be substantive and, as a result, the exclusive development and commercialization license was considered a deliverable at the inception of the right‑to‑test agreement. Factors that were considered in determining the research license was not substantive included (i) the overall objective of the agreement is for CytomX to obtain a development and commercialization license, (ii) there are no exercise fees payable upon taking the development and commercialization license, (iii) the limited economic benefit that CytomX could obtain from the right‑to‑test agreement unless CytomX was able to take the development and commercialization license, and (iv) the lack of economic penalties as a result of taking the license. The Company has determined that the research license from the Company to CytomX together with the development and commercialization license from the Company to CytomX represent one unit of accounting as the research license does not have stand‑alone value from the development and commercialization license due to the lack of transferability of the research license and the limited economic benefit CytomX would derive if they did not obtain any development and commercialization license. The Company has also determined that this unit of accounting has 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 CytomX 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 price for the development and commercialization license is the Company’s best estimate of selling price and was determined based on market conditions, similar arrangements entered into by third parties, including pricing terms offered by the Company’s 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 ADC technology, and the Company’s pricing practices and pricing objectives. In order to determine the best estimate of selling price, the Company determined the overall value of a license by calculating a risk‑ adjusted net present value of a recent, comparable transaction the Company entered into with another collaborator. This overall value was then decreased by risk‑adjusting the net present value of the contingent consideration (the milestones and royalties) payable by CytomX under the development and commercialization license. This amount represents the value that a third party would be willing to pay as an upfront payment for this license to the Company’s technology. The estimated se |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2017 | |
Property and Equipment | |
Property and Equipment | D. Property and Equipment Property and equipment consisted of the following at December 31, 2017 and 2016 (in thousands): December 31, December 31, 2017 2016 Leasehold improvements $ 36,460 $ 36,584 Machinery and equipment 23,123 23,535 Computer hardware and software 8,273 8,395 Furniture and fixtures 3,710 3,705 Assets under construction 416 124 $ 71,982 $ 72,343 Less accumulated depreciation (57,444) (52,845) Property and equipment, net $ 14,538 $ 19,498 Depreciation expense was $6.0, $3.1, $5.3, and $5.5 million for the year ended December 31, 2017, the six months ended December 31, 2016 and for the years ended June 30, 2016 and 2015, respectively. Included in the table above, the Company’s investment in equipment under capital leases was $449,000 and $583,000, net of accumulated amortization of $479,000 and $290,000, at December 31, 2017 and 2016, respectively. |
Convertible 4.5% Senior Notes
Convertible 4.5% Senior Notes | 12 Months Ended |
Dec. 31, 2017 | |
Convertible 4.5% Senior Notes | |
Convertible 4.5% Senior Notes | E. Convertible 4.5% Senior Notes In 2016, the Company issued Convertible 4.5% Senior Notes with an aggregate principal amount of $100 million. The Company received net proceeds of $96.6 million from the sale of the Convertible Notes, after deducting fees and expenses of $3.4 million. During the second half of calendar 2017, the Company entered into privately negotiated exchange agreements with a number of holders of our outstanding Convertible Notes, pursuant to which the Company agreed to exchange, in a private placement, $97.9 million in aggregate principal amount of Convertible Notes held by the holders for 26,160,187 newly issued shares of our common stock, equivalent to the number of shares based on the original conversion terms, plus an additional number of newly issued shares of common stock determined based on the volume-weighted average trading price of the common stock over certain trading days. As a result of the agreements, 2,784,870 additional shares were issued. In accordance with ASC, Topic 470-20, “Debt – Debt with Conversion and Other Options,” based on the short period of time the conversion offer was open and the substantive conversion feature offer, the Company accounted for the conversion of $96.9 million of the debt as an inducement by expensing the fair value of the shares that were issued in excess of the original terms of the Convertible Notes. Due to the passage of time between the inducement offer and execution of the agreement, the Company accounted for the conversion of the other $1 million of the debt as an extinguishment by expensing the fair value of the shares that were issued in excess of net book value of the Convertible Notes. As a result, the Company recorded a non-cash debt conversion expense in the amount of $22.9 million in the year ended December 31, 2017. In addition, accrued interest on the bonds of $743,000 which the noteholders forfeited, $2.5 million of deferred financing costs and $1.7 million in transaction costs were charged to paid-in capital as a result of the issuance of common stock upon conversion. The remaining $2.1 million of Convertible Notes are governed by the terms of an indenture between the Company, as issuer, and Wilmington Trust, National Association, as the trustee. The Convertible Notes are senior unsecured obligations and bear interest at a rate of 4.5% per year, payable semi-annually in arrears on January 1 and July 1 of each year, commencing on January 1, 2017. The Company recorded $3.0 million, 2.2 million and $138,000 of interest expense in the year ended December 31, 2017, the six months ended December 31, 2016 and the year ended June 30, 2016, respectively. The Convertible Notes will mature on July 1, 2021, unless earlier repurchased or converted. Holders may convert their notes at their option at any time prior to the close of business on the business day immediately preceding the stated maturity date. Upon conversion, the Company will deliver for each $1,000 principal amount of converted notes a number of shares equal to the conversion rate, which will initially be 238.7775 shares of common stock, equivalent to an initial conversion price of approximately $4.19. The conversion rate will be subject to adjustment in some circumstances, but will not be adjusted for any accrued and unpaid interest.. The Company analyzed the terms of the Convertible Notes and determined that under current accounting guidance the notes would be entirely accounted for as debt and none of the terms of the notes require separate accounting. As part of the issuance of the Convertible Notes, the Company incurred $3.4 million of transaction costs, of which $2.5 million was reclassed to equity upon conversion noted above. The remaining net unamortized balance of $50,000 remains netted against the Convertible Notes in the accompanying consolidated balance sheet and is being amortized to interest expense ratably over the term of the Convertible Notes. |
Liability Related to Sale of Fu
Liability Related to Sale of Future Royalties | 12 Months Ended |
Dec. 31, 2017 | |
Liability Related to Sale of Future Royalties | |
Liability Related to Sale of Future Royalties | F. Liability Related to Sale of Future Royalties In 2015, IRH purchased the right to receive 100% of the royalty payments on commercial sales of Kadcyla arising under the Company’s development and commercialization license with Genentech, until IRH has received aggregate royalties equal to $235 million or $260 million, depending on when the aggregate royalties received by IRH reach a specified milestone. Once the applicable threshold is met, if ever, the Company will thereafter receive 85% and IRH will receive 15% of the Kadcyla royalties for the remaining royalty term. At consummation of the transaction the Company received cash proceeds of $200 million. As part of this sale, the Company incurred $5.9 million of transaction costs, which are presented net of the liability in the accompanying consolidated balance sheet and are being amortized to interest expense over the estimated life of the royalty purchase agreement. Although the Company sold its rights to receive royalties from the sales of Kadcyla, as a result of its ongoing involvement in the cash flows related to these royalties, the Company will continue to account for these royalties as revenue and recorded the $200 million in proceeds from this transaction as a liability related to sale of future royalties (Royalty Obligation) that will be amortized using the interest method over the estimated life of the royalty purchase agreement. The following table shows the activity within the liability account during the year ended December 31, 2017 and the period from inception (in thousands): Twelve Months Period from Ended inception to December 31, December 31, 2017 2017 Liability related to sale of future royalties, net — beginning balance $ 184,328 $ — Proceeds from sale of future royalties, net — 194,135 Non-cash Kadcyla royalty revenue (28,142) (71,819) Non-cash interest expense recognized 13,227 47,097 Liability related to sale of future royalties, net — ending balance $ 169,413 $ 169,413 As royalties are remitted to IRH, the balance of the Royalty Obligation will be effectively repaid over the life of the agreement. In order to determine the amortization of the Royalty Obligation, the Company is required to estimate the total amount of future royalty payments to be received and remitted to IRH as noted above over the life of the agreement. The sum of these amounts less the $200 million proceeds the Company received will be recorded as interest expense over the life of the Royalty Obligation. Since inception, the Company’s estimate of this total interest expense resulted in an effective annual interest rate of 7.7%. The Company periodically assesses the estimated royalty payments to IRH and to the extent such payments are greater or less than its initial estimates, or the timing of such payments is materially different than its original estimates, the Company will prospectively adjust the amortization of the Royalty Obligation. There are a number of factors that could materially affect the amount and timing of royalty payments from Genentech, most of which are not within the Company’s control. Such factors include, but are not limited to, changing standards of care, the introduction of competing products, manufacturing or other delays, biosimilar competition, patent protection, adverse events that result in governmental health authority imposed restrictions on the use of the drug products, significant changes in foreign exchange rates as the royalties remitted to IRH are made in U.S. dollars (USD) while significant portions of the underlying sales of Kadcyla are made in currencies other than USD, and other events or circumstances that could result in reduced royalty payments from Kadcyla, all of which would result in a reduction of non-cash royalty revenues and the non-cash interest expense over the life of the Royalty Obligation. Conversely, if sales of Kadcyla are more than expected, the non-cash royalty revenues and the non-cash interest expense recorded by the Company would be greater over the term of the Royalty Obligation. In addition, the royalty purchase agreement grants IRH the right to receive certain reports and other information relating to the royalties and contains other representations and warranties, covenants and indemnification obligations that are customary for a transaction of this nature. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Taxes | |
Income Taxes | G. Income Taxes The difference between the Company’s expected tax benefit, as computed by applying the U.S. federal corporate tax rate of 34% to loss before the benefit for income taxes, and actual tax is reconciled in the following chart (in thousands): Year Ended Six Months Ended December 31, December 31, Year Ended June 30, 2017 2016 2016 2015 Loss before income tax expense $ (96,012) $ (78,883) $ (144,817) $ (60,739) Expected tax benefit at 34% $ (32,644) $ (26,820) $ (49,238) $ (20,651) Permanent differences 25 15 345 818 Incentive stock options 1,528 1,313 2,501 1,948 State tax benefit net of federal benefit (3,537) (4,157) (7,954) (3,252) Change in valuation allowance, net (63,238) 32,922 62,505 27,940 Federal research credit (2,204) (1,232) (4,109) (1,407) Federal orphan drug credit (7,118) (2,901) (4,241) (5,471) Expired loss and credit carryforwards — — 184 75 Change in U.S. tax law 97,479 — — — Debt inducement 8,044 — — — Stock option expirations 1,665 860 7 — Benefit for income taxes $ — $ — $ — $ — At December 31, 2017, the Company has net operating loss, or NOL, carryforwards of $473.6 million available to reduce federal taxable income, if any, that expire in 2027 through 2036 and $304 million available to reduce state taxable income, if any, that expire in fiscal 2033 through fiscal 2036. The Company also has federal and state credit carryforwards of $61.4 million available to offset federal and state income taxes, which expire beginning in 2018. Due to the degree of uncertainty related to the ultimate use of the loss carryforwards and tax credits, the Company has established a valuation allowance to fully reserve these tax benefits. During the first quarter of 2017, the Company adopted ASU 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. There is no net income statement impact at adoption related to the tax affect. The gross federal net operating loss was increased by the prior year excess benefit of $27.0 million, tax affect $9.2 million, and a corresponding valuation allowance has been applied against it. The state net operating loss has been increased by the prior year excess benefit of $23.3 million, tax affect net of federal benefit of $1.2 million, and a corresponding valuation allowance has been applied against it as well. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2017 and 2016 are as follows (in thousands): December 31, 2017 2016 Deferred tax assets: Net operating loss carryforwards $ 118,672 $ 167,869 Research and development tax credit carryforwards 58,606 43,096 Property and other intangible assets 2,272 2,982 Deferred revenue 25,997 13,205 Stock-based compensation 12,125 16,794 Deferred lease incentive 2,889 4,264 Other liabilities 3,037 2,107 Royalty sale 47,143 73,973 Total deferred tax assets $ 270,741 $ 324,290 Deferred tax liabilities: Royalty sale transaction costs (859) (1,569) Total deferred tax liabilities $ (859) $ (1,569) Valuation allowance (269,882) (322,721) Net deferred tax assets/(liabilities) $ — $ — The Company has evaluated the positive and negative evidence bearing upon the realizability of its deferred tax assets. As required by the provisions of ASC 740, the Company has determined that it is not more-likely-than-not that the tax benefits related to the federal and state deferred tax assets will be realized for financial reporting purposes. Accordingly, the deferred tax assets have been fully reserved at December 31, 2017 and 2016. The valuation allowance decreased by $52.8 million during the year ended December 31, 2017 due primarily to a reduction in the federal tax rate effective January 1, 2018 and the taxable income position of the Company for the year. In December 2017, the Tax Cuts and Jobs Act, or the Tax Act (“TCJA”), was signed into law. Among other things, the Tax Act permanently lowers the corporate federal income tax rate to 21% from the existing maximum rate of 35%, effective for tax years including or commencing January 1, 2018. As a result of the reduction of the corporate federal income tax rate to 21%, U.S. GAAP requires companies to revalue their deferred tax assets and deferred tax liabilities as of the date of enactment, with the resulting tax effects accounted for in the reporting period of enactment. This revaluation resulted in a provision of $97.5 million to income tax expense in continuing operations and a corresponding reduction in the valuation allowance. As a result, there was no impact to the Company’s income statement as a result of the reduction in tax rates. The Company’s preliminary estimate of the TCJA and the remeasurement of the Company’s deferred tax assets and liabilities is subject to the finalization of management’s analysis related to certain matters, such as developing interpretations of the provisions of the TCJA, changes to certain estimates and the filing of our tax returns, including potential changes related to the impact of the TCJA provisions on executive compensation. U.S. Treasury regulations, administrative interpretations or court decisions interpreting the TJCA may require further adjustments and changes in our estimates. The final determination of the TCJA and the remeasurement of the Company’s deferred assets and liabilities will be completed as additional information becomes available, but no later than one year from the enactment of the TCJA. Utilization of the NOL and credit carryforwards may be subject to a substantial annual limitation due to ownership change limitations that have occurred previously or that could occur in the future as provided by Section 382 of the Internal Revenue Code of 1986, as well as similar state and foreign provisions. These ownership changes may limit the amount of NOL and credit carry forwards that can be utilized annually to offset future taxable income and tax, respectively. In general, an ownership change, as defined by Section 382, results from transactions increasing the ownership of certain shareholders or public groups in the stock of a corporation by more than 50 percentage points over a three‑year period. Since the Company’s formation, it has raised capital through the issuance of capital stock on several occasions (both pre and post initial public offering) which, combined with the purchasing shareholders’ subsequent disposition of those shares, may have resulted in a change of control, as defined by Section 382, or could result in a change of control in the future upon subsequent disposition. During fiscal year 2015, the Company completed a study to assess whether a change of control has occurred or whether there have been multiple changes of control since its formation and determined no ownership change occurred under Section 382. The study has not been updated beyond fiscal year 2015. Additionally, the Company has not completed a detailed Research and Development Credit Study (including the Orphan Drug Credit); accordingly, it is probable that a portion of the tax credit carryforward may not be available to offset future income. The Company accounts for uncertain tax positions under the recognition and measurement criteria of ASC 740-10. For those tax positions for which it is more likely than not that a tax benefit will be sustained, the Company records the largest amount of tax benefit with a greater than 50% likelihood of being realized upon settlement with a taxing authority that has full knowledge of all relevant information. If the Company does not believe that it is not more likely than not that a tax benefit will be sustained, no tax benefit is recognized. As of December 31, 2017 and 2016, no uncertain tax positions have been recorded. Interest and penalties related to the settlement of uncertain tax positions, if any, will be reflected in income tax expense. The Company did not recognize any interest and penalties associated with unrecognized tax benefits in the accompanying consolidated financial statements. The Company does not expect any material changes to the unrecognized benefits within 12 months of the reporting date. Due to existence of the valuation allowance, future changes in the Company’s unrecognized tax benefits will not impact our effective tax rate. The statute of limitations for assessment by the Internal Revenue Service, or IRS, and state tax authorities is open for tax years ending after June 30, 2013, although carryforward attributes that were generated prior to fiscal year 2013 may still be adjusted upon examination by the IRS or state tax authorities if they either have been or will be used in a future period. |
Capital Stock
Capital Stock | 12 Months Ended |
Dec. 31, 2017 | |
Capital Stock | |
Capital Stock | H. Capital Stock Common Stock Reserved At December 31, 2017, the Company has reserved 17.7 million shares of authorized common stock for the future issuance of shares under the 2006 and 2016 Plans and the 2004 Director Plan. See “Stock‑Based Compensation” in Note B for a description of the 2016 Plan and below for a description of the 2004 Director Plan. Stock Options As of December 31, 2017, the 2016 Plan was the only employee share‑based compensation plan of the Company under which grants can be made. During the year ended December 31, 2017, holders of options issued under the 2016 Plan exercised their rights to acquire an aggregate of 191,000 shares of common stock at prices ranging from $2.68 to $6.11 per share. The total proceeds to the Company from these option exercises were $650,000. The Company granted options with an exercise price equal to the fair market value of the common stock on the date of such grant. The following options and their respective weighted‑average exercise prices per share were exercisable at December 31, 2017 and 2016 and June 30, 2016 and 2015: Weighted‑ Exercisable Average (in thousands) Exercise Price December 31, 2017 7,996 $ 12.16 December 31, 2016 7,898 $ June 30, 2016 6,453 $ 12.63 June 30, 2015 5,380 $ 11.89 2001 Non‑Employee Director Stock Plan In 2001, the Company’s shareholders approved the establishment of the 2001 Non‑Employee Director Stock Plan, or the 2001 Director Plan, and 50,000 shares of common stock to be reserved for grant thereunder. The 2001 Director Plan provided for the granting of awards to Non‑Employee Directors and, at the election of Non‑Employee Directors, to have all or a portion of their awards in the form of cash, stock, or stock units. All stock or stock units are immediately vested. The number of stock or stock units issued was determined by the market value of the Company’s common stock on the last date of the Company’s fiscal quarter for which the services are rendered. The 2001 Director Plan was administered by the Board of Directors which was authorized to interpret the provisions of the 2001 Director Plan, determine which Non‑Employee Directors would be granted awards, and determine the number of shares of stock for which a stock right will be granted. The 2001 Director Plan was replaced in 2004 by the 2004 Non‑Employee Director Compensation and Deferred Share Unit Plan. During the year ended December 31, 2017, the six months ended December 31, 2016 and the fiscal years ended June 30, 2016 and 2015, the Company recorded $28,000, $(7,000), $(72,000), and $16,000 in compensation expense (expense reduction), respectively, related to approximately 6,000 stock units outstanding under the 2001 Director Plan. The value of the stock units is adjusted to market value at each reporting period. No stock units have been issued under the 2001 Plan subsequent to June 30, 2004. 2004 Non‑Employee Director Compensation and Deferred Share Unit Plan Under the 2004 Non-Employee Director Compensation and Deferred Share Unit Plan, or the 2004 Director Plan, as amended, between 2004 and 2009 non-employee directors were paid their annual retainers in the form of deferred stock units, based on the fair market value of the Company’s common stock on the last date of the Company’s fiscal year prior to the year for which services were rendered, and in cash, with the option, at their discretion, to have all or a portion of the cash portion paid in additional deferred stock units. All deferred stock units awarded under the 2004 Director Plan have vested, and are redeemed on the date a director ceases to be a member of the Board, at which time such director’s deferred stock units will be settled in shares of common stock of the Company issued under the 2006 Plan at a rate of one share for each vested. Compensation Policy for Non‑Employee Directors In September 2009, the Board adopted a new Compensation Policy for Non‑Employee Directors, which superseded the 2004 Plan and made certain changes to the compensation of its non‑employee directors. The Compensation Policy for Non-Employee Directors, as amended, consists of three elements: cash compensation; deferred stock units; and stock options. Cash Compensation Each non-employee director receives annual meeting fees which are paid in quarterly installments in, at each director’s election, either cash or deferred stock units. Deferred Stock Units Non-employee directors receive deferred stock units as follows: New non-employee directors are initially awarded 6,500 deferred stock units, with each unit relating to one share of the Company’s common stock. These awards vest quarterly over three years from the date of grant, contingent upon the individual remaining a director of the Company as of each vesting date. On the first anniversary of a non-employee director’s initial election to the Board, such non-employee director is awarded 3,000 deferred stock units, pro-rated based on the number of whole months remaining between the first day of the month in which such grant date occurs and the first May 31 following the grant date. These awards generally vest quarterly over approximately the period from the grant date to the first June 1 following the grant date, contingent upon the individual remaining a director of the Company as of each vesting date. Thereafter, non-employee directors are annually awarded 3,000 deferred stock units. These awards vest quarterly over approximately one year from the date of grant, contingent upon the individual remaining a director of the Company as of each vesting date. Vested deferred stock units are redeemed on the date a director ceases to be a member of the Board, at which time such director’s deferred stock units will generally be settled in shares of the Company’s common stock issued under our 2016 Plan (or its predecessor 2006 Employee, Director and Consultant Equity Incentive Plan, or 2006 Plan, depending on the grant date of the deferred stock units) at a rate of one share for each vested deferred stock unit then held. Any deferred stock units that remain unvested at that time will be forfeited. All unvested deferred stock units will automatically vest immediately prior to the occurrence of a change of control, as defined in the 2016 Plan (or the substantially identical definition in the 2006 Plan, as applicable). Pursuant to the Compensation Policy for Non-Employee Directors, in January 2017, the Company issued a retiring director 53,248 shares of common stock of the Company to settle outstanding deferred share units. Pursuant to the Compensation Policy for Non‑Employee Directors, as amended, the Company recorded: · $206,000 in compensation expense during the year ended December 31, 2017 related to the grant of 47,000 deferred share units and 12,000 deferred share units previously granted · $215,000 in compensation expense during the six months ended December 31, 2016 related to the grant of 37,000 deferred share units and 12,000 deferred share units previously granted; · $380,000 in compensation expense during the year ended June 30, 2016 related to the grant of 41,000 deferred share units and 12,000 deferred share units previously granted; · $389,000 in compensation expense during the year ended June 30, 2015 related to the grant of 31,000 deferred share units and 15,000 deferred share units previously granted. Stock Options Non-employee directors also receive stock option awards as follows: Annual Stock Option Awards. Non-employee directors receive an annual stock option award covering 10,000 shares of our common stock on the date of our annual meeting of shareholders, which is the grant date. These awards will have an exercise price equal to the market price of the Company’s stock on the grant date, will vest quarterly over approximately one year from the grant date, and will expire on the tenth anniversary of the grant date, contingent upon the individual remaining a director of the Company during such period. Off-Cycle Initial Awards. If a non-employee director is first elected to the Board other than at an annual meeting of shareholders, such non-employee director will receive a stock option award covering 10,000 shares of our common stock, pro-rated based on the number of whole months remaining between the first day of the month in which such grant date (which will be the date of their initial election to the Board) occurs and the first May 31 following the grant date. These awards will have an exercise price equal to the market price of the Company’s stock on the date of grant, will generally vest quarterly over approximately the period from the grant date to the first June 1 following the date of grant, and will expire on the tenth anniversary of the grant date, contingent upon the individual remaining a director of the Company during such period. All unvested stock option awards granted to non-employee directors will automatically vest immediately as of the date of a change of control, as defined in the 2016 Plan (or, with respect to stock options granted on or before December 9, 2016, the substantially identical definition in the 2006 Plan). On December 9, 2016 the Board amended the Compensation Policy for Non-Employee Directors to create a transition period due to the change in the year-end. Effectively, one-half of the annual compensation awards described above were awarded to the directors on December 9, 2016 and a full-year’s compensation awarded on the date of the subsequent annual meetings. The directors received a total of 80,000 options in the year ended December 31, 2017, 40,000 options in the six months ended December 31, 2016 and 80,000 options in each fiscal year ended June 30, 2016 and 2015, and the related stock compensation expense is included in the amounts discussed in the “Stock‑Based Compensation” section of footnote B above. |
Restructuring Charge
Restructuring Charge | 12 Months Ended |
Dec. 31, 2017 | |
Restructuring Charge | |
Restructuring Charge | I. Restructuring Charge In September 2016, the Board of Directors approved a plan to reengineer the business, resulting in a reduction of the workforce by approximately 17%, or 65 positions, which included the separation of 60 current employees. Communication of the plan to the impacted employees was substantially completed on September 29, 2016. All of the workforce reduction was completed as of December 31, 2016. As a result of the workforce reduction, in the six months ended December 31, 2016, the Company recorded a restructuring charge totaling $4.4 million related to termination benefits and other related charges, of which $2.8 million was recorded as a one-time termination benefit, and $593,000 recorded as a benefit under an ongoing benefit plan. The related cash payments initiated in October 2016 and were fully paid out by December 31, 2017. Additionally, approximately 762,000 stock options were forfeited in connection with the workforce reduction, and as a result, the Company recorded an approximate $837,000 credit to stock compensation expense which is included in research and development expense and general and administrative expense for the six months ended December 31, 2016. In addition to the termination benefits and other related charges, as a result of the September 2016 workforce reduction, the Company began seeking to sub-lease 10,281 square feet of unoccupied office space in Waltham that was leased in 2016. As of September 30, 2016, based on an estimate of the potential time it would take to find a tenant of approximately nine months, the anticipated sub-lease terms, and consideration of the tenant allowance that was given to the Company to build out the space, the Company determined it did not need to record a loss on the sub-lease. The Company also evaluated the balance of the leasehold improvements for potential impairment as of September 30, 2016. In performing the recoverability test, the Company concluded that a substantial portion of the leasehold improvements were not recoverable. The Company recorded an impairment charge of $970,000 related to these assets after comparing the fair value (using probability weighted scenarios with discounted cash flows) to the leasehold improvements’ carrying value, leaving a $193,000 remaining cost basis. During 2017, based on further evaluation of the prospects for sub-leasing the space, the Company determined that additional time would be required to find a tenant. Accordingly, the calculation for the potential sub-lease loss was updated and it was determined that the remaining balance of the leasehold improvements was impaired. Also, due to the additional time that is expected to secure a tenant, additional lease loss was recorded based on the change in estimate of the sub-lease assumption. The total of these charges in 2017 was $779,000. A summary of activity against the restructuring charge related to the employee terminations is as follows: Employee Termination Benefits Costs Initial charge related to employee benefits - September 2016 $ 3,135 Additional charge in December 2016 273 Payments during the period (1,657) Balance December 31, 2016 $ 1,751 Payments during the period (1,751) Balance December 31, 2017 $ — In September 2016, the Compensation Committee of the Board of Directors approved cash and stock option retention incentive awards for certain remaining eligible employees who continue employment with the Company in order to execute the Company’s strategic priorities. The cash awards were paid to most all of these employees in October 2017 and a small number of employees will be paid in March 2018 based on continued employment and services performed during these periods. Stock option awards covering 847,000 shares were granted in September 2016 and vest annually in equal installments over three years from the date of grant unless forfeited and are included in the option summary table within the “Stock-Based Compensation” section of Note B above. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies | |
Commitments and Contingencies | J. Commitments and Contingencies Leases The Company currently has a lease agreement with CRP/King 830 Winter L.L.C. for the rental of approximately 110,000 square feet of laboratory and office space at 830 Winter Street, Waltham, MA through March 2026. The Company uses this space for its corporate headquarters and other operations. The Company may extend the lease for two additional terms of five years. Pursuant to lease amendments executed in 2013, 2014, and 2015 the Company received construction allowances of $746,000, $1.1 million, and $186,000 respectively, to build out office and lab space to the Company’s specifications. 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. In 2016, the Company entered into a lease agreement with PDM 930 Unit, LLC for the rental of 10,281 square feet of additional office space at 930 Winter Street, Waltham, MA through August 31, 2021. The Company received $617,000 as a construction allowance to build out the office space to the Company’s specifications. The Company is required to pay certain operating expenses for the leased premises based on its pro-rata share of such expenses for the entire rentable space of the building. The Company is actively seeking to sub-lease this space. The Company also leases 43,850 square feet of manufacturing and office space at 333 Providence Highway, Norwood, MA under an agreement through June 30, 2018. 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 in 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 was for five years and two months commencing in July 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. The Company has subleased this space through the remaining initial term of the lease. Facilities rent expense, net of sublease income, was $6.8, $3.5, $6.5,and $6.0 million during the year ended December 31, 2017, the six months ended December 31, 2016 and fiscal years 2016 and 2015, respectively. As of December 31, 2017, the minimum rental commitments, including real estate taxes and other expenses, for the next five years and thereafter under the non‑cancelable operating lease agreements discussed above are as follows (in thousands): 2018 $ 7,703 2019 7,202 2020 7,251 2021 7,074 2022 7,125 Thereafter 23,531 Total minimum lease payments $ 59,886 There are no obligations under capital leases as of December 31, 2017, as all of the capital leases were single payment obligations which have all been made. Collaborations and Licenses The Company is contractually obligated to make potential future success‑based regulatory milestone payments in conjunction with certain collaborative agreements. 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 December 31, 2017, the maximum amount that may be payable in the future under the Company’s current collaborative agreements is $80 million. Manufacturing Commitments As of December 31, 2017, the Company has noncancelable obligations under several agreements related to in-process and future manufacturing of antibody and cytotoxic agents required for clinical supply of the Company’s product candidates totaling $3.5 million, all of which will be paid in calendar 2018. In 2017, the Company executed a letter agreement with one of its antibody manufacturers to reserve capacity through calendar 2021. The total commitment over the five-year term of the agreement is €46.2 million, however only €13.9 million euros is noncancelable at December 31, 2017. Litigation The Company is not party to any material litigation. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2017 | |
Employee Benefit Plans | |
Employee Benefit Plans | K. Employee Benefit Plans The Company has a deferred compensation plan under Section 401(k) of the Internal Revenue Code (the 401(k) Plan). Under the 401(k) Plan, eligible employees are permitted to contribute, subject to certain limitations, up to 100% of their gross salary and the Company’s matching contribution is 50% of the first 6% of the eligible employees’ contributions. In the year ended December 31, 2017, the six months ended December 31, 2016 and fiscal years 2016 and 2015, the Company’s contributions to the 401(k) Plan totaled $982,000, $536,000, $1.1 million, and $875,000, respectively. |
Quarterly Financial Information
Quarterly Financial Information (Unaudited) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information (Unaudited) | |
Quarterly Financial Information (Unaudited) | L. Quarterly Financial Information (Unaudited) Calendar Year 2017 First Quarter Second Quarter Third Quarter Fourth Quarter Ended Ended Ended Ended March 31, 2017 June 30, 2017 September 30, 2017 December 31, 2017 (In thousands, except per share data) Revenues: License and milestone fees $ 18,730 $ 31,080 $ 79 $ 29,580 Royalty revenue — — — — Non-cash royalty revenue related to the sale of future royalties 7,613 6,439 6,503 7,587 Research and development support 1,478 902 650 452 Clinical materials revenue 678 599 1,248 1,829 Total revenues 28,499 39,020 8,480 39,448 Expenses: Research and development 32,888 35,319 31,689 39,843 General and administrative 8,119 8,836 7,908 9,048 Restructuring charge 386 — — 393 Total expenses 41,393 44,155 39,597 49,284 Loss from operations (12,894) (5,135) (31,117) (9,836) Non-cash interest expense on liability related to sale of future royalty and convertible senior notes (3,575) (3,501) (3,385) (3,221) Interest expense on senior convertible notes (1,125) (1,125) (762) (28) Non-cash debt conversion expense — — (22,191) (724) Other income, net 249 894 773 691 Net loss $ (17,345) $ (8,867) $ (56,682) $ (13,118) Basic and diluted net loss per common share $ $ $ $ Six Month Transition Period First Quarter Second Quarter Ended Ended September 30, 2016 December 31, 2016 (In thousands, except per share data) Revenues: License and milestone fees $ 76 $ 5,076 Royalty revenue — — Non-cash royalty revenue related to the sale of future royalties 6,184 6,710 Research and development support 1,354 1,427 Clinical materials revenue 46 633 Total revenues 7,660 13,846 Expenses: Research and development 32,909 33,657 General and administrative 9,459 8,536 Restructuring charge 4,130 301 Total expenses 46,498 42,494 Loss from operations (38,838) (28,648) Non-cash interest expense on liability related to sale of future royalty and convertible senior notes (5,018) (3,647) Interest expense on senior convertible notes (1,150) (1,099) Other income (expense), net 275 (758) Net loss $ (44,731) $ (34,152) Basic and diluted net loss per common share $ $ Fiscal Year 2016 First Quarter Second Quarter Third Quarter Fourth Quarter Ended Ended Ended Ended September 30, 2015 December 31, 2015 March 30, 2016 June 30, 2016 (In thousands, except per share data) Revenues: License and milestone fees $ 6,070 $ 10,692 $ 10,077 $ 76 Royalty revenue — 195 — — Non-cash royalty revenue related to the sale of future royalties 5,684 6,291 7,380 5,944 Research and development support 772 848 1,059 1,335 Clinical materials revenue 2,325 3 1,198 53 Total revenues 14,851 18,029 19,714 7,408 Expenses: Research and development 35,132 38,199 36,094 38,652 General and administrative 8,329 8,054 11,235 9,298 Total expenses 43,461 46,253 47,329 47,950 Loss from operations (28,610) (28,224) (27,615) (40,542) Non-cash interest expense on liability related to sale of future royalty (5,143) (5,059) (4,972) (4,956) Other income (expense), net 13 56 659 (424) Net loss $ (33,740) $ (33,227) $ (31,928) $ (45,922) Basic and diluted net loss per common share $ $ $ $ Fiscal Year 2015 First Quarter Second Quarter Third Quarter Fourth Quarter Ended Ended Ended Ended September 30, 2014 December 31, 2014 March 30, 2015 June 30, 2015 (In thousands, except per share data) Revenues: License and milestone fees $ 6,234 $ 41,417 $ 5,078 $ 5,086 Royalty revenue 4,166 4,625 5,099 (23) Non-cash royalty revenue related to the sale of future royalties — — — 5,484 Research and development support 776 832 532 708 Clinical materials revenue 2,027 1,426 718 1,356 Total revenues 13,203 48,300 11,427 12,611 Expenses: Research and development 28,018 27,647 25,666 30,437 General and administrative 7,095 6,872 7,000 7,261 Total expenses 35,113 34,519 32,666 37,698 (Loss) income from operations (21,910) 13,781 (21,239) (25,087) Non-cash interest expense on liability related to sale of future royalty — — — (5,437) Other (expense) income, net (372) (146) (379) 50 Net (loss) income $ (22,282) $ 13,635 $ (21,618) $ (30,474) Basic and diluted net (loss) income per common share $ (0.26) $ 0.16 $ (0.25) $ (0.35) |
Stub Period Comparative Data (U
Stub Period Comparative Data (Unaudited) | 12 Months Ended |
Dec. 31, 2017 | |
Stub Period Comparative Data (Unaudited) | |
Stub Period Comparative Data | M. Stub Period Comparative Data (Unaudited) The unaudited, condensed consolidated statements of earnings for the year ended December 31, 2016 and the six months ended December 31, 2015 is as follows: Year Ended Six Months Ended December 31, December 31, 2016 2015 Revenues: License and milestone fees $ 15,305 $ 16,762 Royalty revenue — 195 Non-cash royalty revenue related to the sale of future royalties 26,218 11,975 Research and development support 5,175 1,620 Clinical materials revenue 1,930 2,328 Total revenues 48,628 32,880 Operating Expenses: Research and development 141,312 73,331 General and administrative 38,528 16,383 Restructuring charge 4,431 — Total operating expenses 184,271 89,714 Loss from operations (135,643) (56,834) Investment income, net 473 111 Non-cash interest expense on liability related to the sale of future royalties and convertible senior notes (18,593) (10,202) Interest expense on convertible senior notes (2,387) — Other expense, net (583) (42) Net loss $ (156,733) $ (66,967) Basic and diluted net loss per common share $ $ |
Summary of Significant Accoun21
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Significant Accounting Policies | |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, ImmunoGen Securities Corp., ImmunoGen Europe Limited, ImmunoGen (Bermuda) Ltd. and Hurricane, LLC. All intercompany transactions and balances have been eliminated. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States (U.S.) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Subsequent Events | Subsequent Events The Company has evaluated all events or transactions that occurred after December 31, 2017 up through the date the Company issued these financial statements. In February 2018, following an in-depth review of manufacturing and quality operations, the Board of Directors of the Company authorized management to implement a new operating model that will rely on external manufacturing and quality testing for drug substance and drug product for development programs. The implementation of this new operating model will lead to the ramp-down of manufacturing and quality activities at the Company’s Norwood, Massachusetts facility by the end of 2018, with a full decommissioning of the facility expected by early 2019. Implementation of the new operating model will result in a net reduction of the current workforce by approximately 20 positions by the end of 2018. Communication of the plan to the affected employees was substantially completed on February 8, 2018. In connection with the implementation of the new operating model, the Company estimates the severance charges and retention benefits to be approximately $2.5 million and $2.5 million respectively. The severance charges are expected to be recorded in the first quarter of 2018 and cash payments will be substantially paid out by the end of the second quarter of 2019. The Company did not have any other material recognizable or unrecognizable subsequent events. |
Revenue Recognition | Revenue Recognition The Company enters into licensing and development agreements with collaborators for the development of antibody‑drug conjugate, or ADC therapeutics. The terms of these agreements contain multiple deliverables which may include (i) licenses, or options to obtain licenses, to the Company’s ADC 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, or FASB, Accounting Standards Codification, or 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 December 31, 2017, the Company had the following three material types of agreements with the parties identified below: · Development and commercialization licenses, which provide the party with the right to use the Company’s ADC technology and/or certain other intellectual property to develop compounds to a specified antigen target: - Amgen (two exclusive single-target licenses – one of which has been sublicensed to Oxford BioTherapeutics Ltd.) - Bayer (one exclusive single-target license) - Biotest (one exclusive single-target license) - CytomX (one exclusive single-target license) - Fusion Pharmaceuticals (one exclusive single-target license) - Lilly (three exclusive single-target licenses) - Novartis (five exclusive single-target licenses and 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 (five fully-paid, exclusive single-target licenses) - Takeda, through its wholly owned subsidiary, Millennium Pharmaceuticals, Inc. (one exclusive single-target license) - Debiopharm (one exclusive single-compound license) · Research license/option agreement for a defined period of time to secure development and commercialization licenses to use the Company’s ADC technology to develop anticancer compounds to specified targets on established terms (referred to herein as right-to-test agreements): - Takeda, through its wholly owned subsidiary, Millennium Pharmaceuticals, Inc. · Collaboration and option agreement for a defined period of time to secure development and commercialization licenses to develop and commercialize specified anticancer compounds on established terms: - Jazz Pharmaceuticals 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 ADC 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, regardless of patent protection. Royalty rates may vary over the royalty term depending on the Company’s intellectual property rights and/or the presence of comparable competing products. 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 ADC 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 ADC technology, the Company’s pricing practices and pricing objectives, the likelihood that technological improvements will be made, and, if 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 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 ever be below its contract selling prices for its existing collaborations. During the year ended December 31, 2017, the six months ended December 31, 2016, and the fiscal years ended June 30, 2016 and 2015, 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 $3.1, $0.9, $6.9 and $9.2 million, respectively. 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 the Company and its collaborators are preparing for 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 or third 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 ADC 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. None of the Company’s right to test agreements entered into subsequent to the adoption of Accounting Standards Update, or ASU, No. 2009 13, “Revenue Arrangements with Multiple Deliverables” on July 1, 2010 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 ADC technology are not considered substantive, the Company considers the development and commercialization licenses to be a deliverable at the inception of the agreement and apply the multiple element revenue recognition criteria to determine the appropriate revenue recognition. 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. Collaboration and Option Agreements The Company’s collaboration and option agreements provide collaborators the right, for a defined period of time, to opt-in or “take” licenses to develop and commercialize anticancer compounds to 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 the opt-in 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”), (iii) at the collaborator’s request, provide research services at negotiated prices which are generally consistent with what other third parties would charge, or (iv) some combination of all of these fees. The accounting for collaboration and option agreements is dependent on the nature of the options granted to the collaborative partner. Options are considered substantive if, at the inception of an 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. In determining the units of accounting, management evaluates whether the options or licenses have stand‑alone value from the undelivered elements to the collaborative partner based on the consideration of the relevant facts and circumstances. An option may be a separate unit of accounting if it is granted at a significant discount, however it generally does not have stand-alone value from the license as it only grants a right to receive a license versus a license itself. If the Company concludes that an option and license combined has stand‑alone value and therefore will be accounted for as a separate unit of accounting, it then determines the estimated selling prices of the option and all other units of accounting based on an option pricing model using the following inputs; a) estimated fair value of each program, b) the amount the partner would pay to exercise the option to obtain the license, c) volatility during the expected term of the option and d) risk free interest rate. A risk adjusted discounted cash flow model is then used to estimate the fair value of the option with volatility determined using the stock prices of comparable companies. The cash flow is discounted at a rate representing the Company’s estimate of its cost of capital at the time. 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. The Company does not control when or if any collaborator will exercise its options for development and commercialization licenses. As a result, it cannot predict when or if it will recognize revenues in connection with any of the foregoing. In determining whether a collaboration and option agreement is within the scope of ASC 808, management evaluates the level of involvement of both companies in the development and commercialization of the products to determine if both parties are active participants and if both parties are exposed to risks and rewards dependent on the commercial success of the licensed products. If the agreement is determined to be within the scope of ASC 808, the Company will segregate the research and development activities and the related cost sharing arrangement. Payments made by the Company for such activities will be recorded as research and development expense and reimbursements received from its partner will be recognized as an offset to research and development expense. |
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 net realizable value as determined on a first‑in, first‑out (FIFO) basis. Inventory at December 31, 2017 and 2016 is summarized below (in thousands): December 31, December 31, 2017 2016 Raw materials $ 40 $ 357 Work in process 998 1,835 Total $ 1,038 $ 2,192 Raw materials inventory consists entirely of proprietary cell‑killing agents the Company developed as part of its ADC technology. All raw materials inventory is currently procured from two suppliers. 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. Based on historical reprocessing or reimbursement required for conjugate that did not meet specification and status of current conjugate on hand or conjugate shipped to collaborators but not yet released per the terms of the respective supply agreements, no reserve for work in process inventory was determined to be required at December 31, 2017 or 2016. As discussed above, the Company’s costs to manufacture conjugate on behalf of its partners are greater than the supply prices charged to partners, and therefore costs are capitalized into inventory at the supply prices which represent net realizable value. Raw materials inventory cost is stated net of write‑downs of $1.1 million as of both December 31, 2017 and 2016. The write‑downs represent the cost of raw materials that the Company considers to be in excess of a twelve‑month supply based on firm, fixed orders and projections from its collaborators as of the respective balance sheet date. Due to yield fluctuations, the actual amount of raw materials that will be produced in future periods under third‑party supply agreements is highly uncertain. As such, the amount of raw materials produced could be more than is required to support the development of the Company’s collaborators’ product candidates. Such excess supply, as determined under the Company’s inventory reserve policy, is charged to research and development expense. The Company produces preclinical and clinical materials for its collaborators either in anticipation of or in support of preclinical studies and clinical trials, or for process development and analytical purposes. Under the terms of supply agreements with its collaborators, the Company generally receives rolling six‑month firm, fixed orders for conjugate that the Company is required to manufacture, and rolling twelve‑month manufacturing projections for the quantity of conjugate the collaborator expects to need in any given twelve‑month period. The amount of clinical material produced is directly related to the number of collaborator anticipated or on‑going clinical trials for which the Company is producing clinical material, the speed of enrollment in those trials, the dosage schedule of each clinical trial and the time period, if any, during which patients in the trial receive clinical benefit from the clinical materials. Because these elements are difficult to estimate over the course of a trial, substantial differences between collaborators’ actual manufacturing orders and their projections could result in the Company’s usage of raw materials varying significantly from estimated usage at an earlier reporting period. To the extent that a collaborator has provided the Company with a firm, fixed order, the collaborator is required by contract to reimburse the Company the full negotiated price of the conjugate, even if the collaborator subsequently cancels the manufacturing run. The Company capitalizes raw material as inventory upon receipt and accounts for the raw material inventory as follows: a) to the extent that the Company has up to twelve months of firm, fixed orders and/or projections from its collaborators, the Company capitalizes the value of raw materials that will be used in the production of conjugate subject to these firm, fixed orders and/or projections; b) 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; and c) the Company also considers any other external factors and information of which it becomes aware and assesses the impact of such factors or information on the net realizable value of the raw material inventory at each reporting period. During the year ended December 31, 2017, the six month transition period ended December 31, 2016 and fiscal years 2016 and 2015, the Company obtained additional amounts of its cell-killing agents DMx from its supplier which yielded more material than would be required by the Company’s collaborators over the next twelve months, and as a result, the Company recorded $403,000, $150,000, $1.1 million and $1.0 million, respectively, of charges to research and development expense related to raw material inventory identified as excess. Increases in the Company’s on‑hand supply of raw materials, or a reduction to the Company’s collaborators’ projections, could result in significant changes in the Company’s estimate of the net realizable value of such raw material inventory. Reductions in collaborators’ projections could indicate that the Company has excess raw material inventory and the Company would then evaluate the need to record write‑downs as charges to research and development expense. |
Unbilled Revenue | Unbilled Revenue Included in unbilled revenue at December 31, 2016 is a $5 million partner milestone achieved in December 2016 which was subsequently invoiced in January 2017. The additional balance at December 31, 2016, as well as the balance as of December 31, 2017, substantially represents research funding earned based on actual resources utilized under the Company’s various collaborator agreements. |
Other Accrued Liabilities | Other Accrued Liabilities Other accrued liabilities consisted of the following at December 31, 2017 and 2016 (in thousands): December 31, December 31, 2017 2016 Accrued contract payments $ 4,901 $ 1,980 Accrued clinical trial costs 8,400 4,700 Accrued professional services 723 865 Accrued employee benefits 574 676 Accrued public reporting charges 156 156 Accrued interest on convertible senior notes — 2,388 Other current accrued liabilities 1,013 385 Total $ 15,767 $ 11,150 |
Deferred Revenue | Deferred Revenue Deferred revenue represents amounts related to partner agreements that have yet to be recognized as revenue. Included in the total of deferred revenue is $6.8 million related to the rights to future technological improvements for our partners at December 31, 2017 and $7.1 million at December 31, 2016. The balance of deferred revenue substantially relates to revenue to be recognized upon the granting of a license to partners. |
Research and Development Expenses | Research and Development Expenses The Company’s research and development expenses are charged to expense as incurred and relate to (i) research to evaluate new targets and to develop and evaluate new antibodies, linkers and cytotoxic agents, (ii) preclinical testing of its own and, in certain instances, its collaborators’ product candidates, and the cost of its own clinical trials, (iii) development related to clinical and commercial manufacturing processes and (iv) manufacturing operations which also include raw materials. Payments made by the Company in advance for research and development services not yet provided and/or materials not yet delivered and accepted are recorded as prepaid expenses and are included in the accompanying Consolidated Balance Sheets as prepaid and other current assets. |
Income Taxes | Income Taxes The Company uses the liability method to account for income taxes. Deferred tax assets and liabilities are determined based on differences between the financial reporting and income tax basis of assets and liabilities, as well as net operating loss carry forwards and tax credits and are measured using the enacted tax rates and laws that will be in effect when the differences reverse. A valuation allowance against net deferred tax assets is recorded if, based on the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. |
Financial Instruments and Concentration of Credit Risk | Financial Instruments and Concentration of Credit Risk Cash and cash equivalents are primarily maintained with three financial institutions in the U.S. Deposits with banks may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed upon demand and, therefore, bear minimal 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. Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash, cash equivalents and marketable securities. The Company held no marketable securities as of December 31, 2017 or 2016. The Company’s investment policy, approved by the Board of Directors, limits the amount it may invest in any one type of investment, thereby reducing credit risk concentrations. |
Cash and Cash Equivalents | Cash and Cash Equivalents All highly liquid financial instruments with maturities of three months or less when purchased are considered cash equivalents. As of December 31, 2017 and 2016, the Company held $267.1 million and $160.0 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. |
Non-cash Investing Activities | Non-cash Investing Activities The Company had $482,000 and $356,000 of accrued capital expenditures as of December 31, 2017 and 2016 which have been treated as a non-cash investing activity and, accordingly, are not reflected in the consolidated statement of cash flows. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments ASC Topic 820 defines fair value, establishes a framework for measuring fair value in accordance with accounting principles generally accepted in the U.S., and expands disclosures about fair value measurements. Fair value is defined under ASC Topic 820 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 December 31, 2017, 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 December 31, 2017 (in thousands): Fair Value Measurements at December 31, 2017 Using Quoted Prices in Significant Active Markets for Significant Other Unobservable Identical Assets Observable Inputs Inputs Total (Level 1) (Level 2) (Level 3) Cash equivalents $ 240,013 $ 240,013 $ — $ — As of December 31, 2016, 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 December 31, 2016 (in thousands): Fair Value Measurements at December 31, 2016 Using Quoted Prices in Significant Active Markets for Significant Other Unobservable Identical Assets Observable Inputs Inputs Total (Level 1) (Level 2) (Level 3) Cash equivalents $ 144,176 $ 144,176 $ — $ — The fair value of the Company’s cash equivalents is based primarily on quoted prices from active markets. The carrying amounts reflected in the consolidated balance sheets for accounts receivable, unbilled revenue, prepaid and other current assets, accounts payable, accrued compensation, and other accrued liabilities approximate fair value due to their short‑term nature. The gross carrying amount and estimated fair value of the convertible 4.5% senior notes was $2.1 million and $3.8 million, respectively, as of December 31, 2017 compared to $100.0 million and $79.0 million, respectively, as of December 31, 2016. In the second half of 2017, $97.9 million of convertible debt outstanding was converted to 26,160,187 shares of the Company’s common stock causing the decrease in the gross carrying amount. The estimated fair value per $1,000 note on the debt remaining as of December 31, 2017 increased compared to December 31, 2016 due primarily to an increase in the Company’s stock price. The fair value of the Convertible Notes is influenced by interest rates, the Company’s stock price and stock price volatility and is determined by prices for the Convertible Notes observed in a market which is a Level 2 input for fair value purposes due to the low frequency of trades. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost. The Company provides for depreciation based upon expected useful lives using the straight‑line method over the following estimated useful lives: Machinery and equipment 5 years Computer hardware and software 3 years Furniture and fixtures 5 years Leasehold improvements Shorter of remaining lease term or 7 years Equipment under capital leases is amortized over the lives of the respective leases or the estimated useful lives of the assets, whichever is shorter, and included in depreciation expense. Maintenance and repairs are charged to expense as incurred. Upon retirement or sale, the cost of disposed assets and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the statement of operations. The Company recorded $(239,000), $(1.1 million), $21,000, and $(7,000) of (losses) gains on the sale/disposal of certain furniture and equipment during the year ended December 31, 2017, the six months ended December 31, 2016 and the years ended June 30, 2016 and 2015, respectively. |
Impairment of Long-Lived Assets | Impairment of Long‑Lived Assets In accordance with ASC Topic 360, “Property, Plant, and Equipment,” the Company continually evaluates whether events or circumstances have occurred that indicate that the estimated remaining useful life of its long‑lived assets may warrant revision or that the carrying value of these assets may be impaired if impairment indicators are present. The Company evaluates the realizability of its long‑lived assets based on cash flow expectations for the related asset. Any write‑downs to fair value are treated as permanent reductions in the carrying amount of the assets. The year ended December 31, 2017 and the six months ended December 31, 2016 include $180,000 and $970,000, respectively, of leasehold impairment charges resulting from the restructuring, the details of which are further discussed in Note I. Based on this evaluation, the Company believes that, as of each of the balance sheet dates presented, none of the Company’s remaining long‑lived assets were impaired. |
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”). Shares of the Company’s restricted stock participate in any dividends that may be 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) income per share is computed after giving consideration to the dilutive effect of stock options, convertible notes and restricted stock 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 for the options and unvested restricted stock and the if-converted method for the convertible notes, are shown in the following table (in thousands): Year Ended December 31, Six Months Ended December 31, Year Ended June 30, 2017 2016 2016 2015 Options outstanding to purchase common stock and unvested restricted stock at end of period 14,290 13,878 11,919 9,739 Common stock equivalents under treasury stock method for options and unvested restricted stock 1,579 1 735 770 Shares issuable upon conversion of convertible notes at end of period 501 23,878 23,878 — Common stock equivalents under if-converted method for convertible notes 501 23,878 718 — 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 December 31, 2017, the Company is authorized to grant future awards under one employee share‑based compensation plan, which is the ImmunoGen, Inc. 2016 Employee, Director and Consultant Equity Incentive Plan, or the 2016 Plan. At the annual meeting of shareholders on December 9, 2016, the 2016 Plan was approved and provides for the issuance of Stock Grants, the grant of Options and the grant of Stock‑Based Awards for up to 5,500,000 shares of the Company’s common stock, as well as up to 14,250,000 shares of common stock which represent awards granted under the previous stock option plan, the ImmunoGen, Inc. 2006 Employee, Director and Consultant Equity Incentive Plan, or the 2006 Plan, that forfeit, expire, or cancel without delivery of shares of common stock or which resulted in the forfeiture of shares of common stock back to the Company subsequent to December 9, 2016. At the annual meeting of shareholders on June 13, 2017, the 2016 Plan was amended to increase the number of shares authorized for issuance thereunder by 1,000,000. 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 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 weighted average 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 amongst its employee population. 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. Year Ended Six Months Ended December 31, December 31, Year Ended June 30, 2017 2016 2016 2015 Dividend None None None None Volatility % 65.63 % 66.34 % 60.86 % Risk-free interest rate % 1.29 % 1.80 % 1.84 % Expected life (years) 6.0 6.3 6.3 6.3 Using the Black‑Scholes option‑pricing model, the weighted average grant date fair values of options granted during the year ended December 31, 2017, the six months ended December 31, 2016 and fiscal years 2016 and 2015 were $1.98, $1.76, $8.91, and $6.04 per share, respectively. A summary of option activity under the 2006 and 2016 Plans as of December 31, 2017, December 31, 2016, and June 30, 2016 and changes during the year ended December 31, 2017, the six month period ended December 31, 2016 and the year ended June 30, 2016 is presented below (in thousands, except weighted‑average data): Weighted- Weighted- Number Average Average Aggregate of Stock Exercise Remaining Intrinsic Options Price Life in Yrs. Value Outstanding at June 30, 2015 $ Granted $ Exercised Forfeited/Canceled 14.84 Outstanding at June 30, 2016 $ — Outstanding at June 30, 2016—vested or unvested and expected to vest $ — Exercisable at June 30, 2016 $ — Outstanding at June 30, 2016 $ Granted Exercised — — Forfeited/Canceled Outstanding at December 31, 2016 10.70 $ 23 Outstanding at December 31, 2016—vested or unvested and expected to vest $ 22 Exercisable at December 31, 2016 $ — Outstanding at December 31, 2016 $ Granted Exercised (191) 3.42 Forfeited/Canceled Outstanding at December 31, 2017 $ 13,513 Outstanding at December 31, 2017—vested or unvested and expected to vest $ $ 13,283 Exercisable at December 31, 2017 $ $ 3,733 A summary of restricted stock activity under the 2006 and 2016 Plans as of December 31, 2017 and December 31, 2016, and changes during the year ended December 31, 2017, six month period ended December 31, 2016 and the fiscal year ended June 30, 2016 is presented below (in thousands, except weighted‑average data): Number of Weighted- Restricted Average Grant Stock Shares Date Fair Value Unvested at June 30, 2015 50 $ Awarded 75 5.65 Vested Unvested at June 30, 2016 $ Awarded 118 Vested — — Forfeited Unvested at December 31, 2016 $ Awarded 2,253 $ Vested (25) Forfeited Unvested at December 31, 2017 $ In August 2016, February 2017 and June 2017, the Company granted 117,800, 529,830 and 239,000 shares of restricted common stock with grant date fair values of $3.15, $2.47 and $4.71, respectively, to certain officers of the Company. These restrictions will lapse in three equal installments upon the achievement of specified performance goals within the next five years. The Company determined it is not currently probable that these performance goals will be achieved, and therefore, no expense has been recorded to date. Stock compensation expense related to stock options and restricted stock awards granted under the 2016 and 2006 Plans was $11.1, $8.1, $21.9, and $15.3 million during the year ended December 31, 2017, the six months ended December 31, 2016 and fiscal years ended June 30, 2016 and 2015, respectively. During the year ended December 31, 2017, the Company recorded approximately $742,000 of stock compensation cost related to the modification of certain outstanding common stock options with former officers of the Company. During fiscal year 2016, the Company recorded $3.1 million of stock compensation cost related to the modification of certain outstanding common stock options with the former Chief Executive Officer. No similar charges were recorded in the six month transition period ended December 31, 2016 or fiscal year 2015. As of December 31, 2017, the estimated fair value of unvested employee awards was $11.6 million, net of estimated forfeitures. The weighted‑average remaining vesting period for these awards is approximately two years. Included in stock compensation expense for the year ended December 31, 2017, the six months ended December 31, 2016 and fiscal years ended June 30, 2016 and 2015 are 206,000, $215,000, $380,000, and $389,000, respectively, of expense recorded for directors’ deferred share units, the details of which are discussed in Note H of the Company’s consolidated financial statements. A summary of option activity for options vested during the year ended December 31, 2017 and the six months ended December 31, 2016 and fiscal years ended June 30, 2016 and 2015 is presented below (in thousands): Year Ended December 31, Six Months Ended December 31, Year Ended June 30, 2017 2016 2016 2015 Total fair value of options vested $ 10,964 $ 17,121 $ 15,298 $ 16,145 Total intrinsic value of options exercised 598 — 3,142 3,275 Cash received for exercise of stock options 650 — 5,161 4,429 |
Comprehensive Loss | Year Ended December 31, Six Months Ended December 31, Year Ended June 30, 2017 2016 2016 2015 Total fair value of options vested $ 10,964 $ 17,121 $ 15,298 $ 16,145 Total intrinsic value of options exercised 598 — 3,142 3,275 Cash received for exercise of stock options 650 — 5,161 4,429 Comprehensive Loss The Company presents comprehensive loss in accordance with ASC Topic 220, Comprehensive Income. Comprehensive loss is comprised of the Company’s net loss for all periods presented. |
Segment Information | Segment Information During all periods presented, the Company continued to operate in one reportable business segment under the management approach of ASC Topic 280, Segment Reporting , which is the business of the discovery and development of ADCs for the treatment of cancer. The percentages of revenues recognized from significant customers of the Company in the year ended December 31, 2017, the six months ended December 31, 2016 and the years ended June 30, 2016 and 2015 are included in the following table: Year Ended December 31, Six Months Ended December 31, Year Ended June 30, Collaborative Partner: 2017 2016 2016 2015 Bayer — % — % 17 % — % CytomX 13 % — % — % — % Debiopharm 26 % — % — % — % Lilly 1 % 4 % 11 % 21 % Novartis — % 24 % 1 % 43 % Roche 24 % 60 % 43 % 23 % Sanofi 31 % — % — % — % Takeda 4 % 8 % 16 % — % There were no other customers of the Company with significant revenues in the periods presented. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In August 2014, the FASB issued ASU 2014‑15, Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. Under the new standard, management must evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. This evaluation initially does not take into consideration the potential mitigating effect of management’s plans that have not been fully implemented as of the date the financial statements are issued. When substantial doubt exists under this methodology, management evaluates whether the mitigating effect of its plans sufficiently alleviates substantial doubt about the Company’s ability to continue as a going concern. The mitigating effect of management’s plans, however, is only considered if both (1) it is probable that the plans will be effectively implemented within one year after the date that the financial statements are issued, and (2) it is probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued. Generally, to be considered probable of being effectively implemented, the plans must have been approved before the date that the financial statements are issued. This standard was adopted by the Company at December 31, 2016. In April 2015, the FASB issued ASU 2015-03, Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. To simplify presentation of debt issuance costs, this new standard requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by this update. This guidance is effective for annual reporting beginning after December 15, 2015, including interim periods within the year of adoption, and calls for retrospective application, with early application permitted. Accordingly, the standard is effective for the Company on July 1, 2016. The Company implemented the recommendations of this update, resulting in a reduction of prepaid and other current assets and non-current other assets of $1 million and $6.8 million, respectively, as of June 30, 2016, and $1.2 million and $4.4 million, respectively, as of June 30, 2015, with corresponding reductions of the debt liabilities as shown on the face of the accompanying consolidated balance sheet to the financial statements . In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory (Topic 330). To simplify the principles for subsequent measurement of inventory, this new standard requires inventory measured using any method other than LIFO or the retail method shall be measured at the lower of cost and net realizable value, rather than lower of cost or market. This guidance is effective for annual reporting beginning after December 15, 2016, including interim periods within the year of adoption, and calls for prospective application, with early application permitted. Accordingly, the standard was adopted by the Company on January 1, 2017. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements. In March 2016, the FASB issued ASU 2016-9, Improvements to Employee Share-Based Payment Accounting (Topic 718) that changes the accounting for certain aspects of share-based payments to employees. The guidance requires the recognition of the income tax effects of awards in the income statement when the awards vest or are settled, thus eliminating additional paid in capital pools. The guidance also allows for the employer to repurchase more of an employee’s shares for tax withholding purposes without triggering liability accounting. In addition, the guidance allows for a policy election to account for forfeitures as they occur rather than on an estimated basis. The guidance is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods with early adoption permitted. Accordingly, the standard was adopted by the Company on January 1, 2017. As a result of the adoption of this guidance, the net operating loss deferred tax assets for federal and state purposes increased by $9.2 million and $1.2 million, respectively, and were offset by corresponding increases in the valuation allowance. The adoption of the guidance has no impact on the Company’s consolidated financial statements. The Company elected not to adopt the provision that would allow actual forfeitures to be recognized in lieu of maintaining a forfeitures reserve. As such, the Company will continue to estimate forfeitures. Recently issued accounting pronouncements, not yet adopted In May 2014, the FASB issued ASU 2014‑9, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), to clarify the principles for recognizing revenue. This update provides a comprehensive new revenue recognition model that requires revenue to be recognized in a manner to depict the transfer of goods or services to a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date , which delayed the effective date of the new standard from January 1, 2017 to January 1, 2018. The FASB also agreed to allow entities to choose to adopt the standard as of the original effective date. In March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations , which clarifies the implementation guidance on principal versus agent considerations. In April 2016, the FASB issued ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing , which clarifies certain aspects of identifying performance obligations and licensing implementation guidance. In May 2016, the FASB issued ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients related to disclosures of remaining performance obligations, as well as other amendments to guidance on collectability, non-cash consideration and the presentation of sales and other similar taxes collected from customers. In December, 2016, the FASB issued ASU No. 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customer to correct unintended application of guidance. These standards have the same effective date and transition date of January 1, 2018. The new revenue standard allows for either full retrospective or modified retrospective application. The Company will use the modified retrospective approach to implement this standard. The Company has analyzed its existing revenue agreements to evaluate the impact of adoption. In performing this assessment, the Company noted that it will be required to recognize royalty income in the same period as the related sales occur on Kadcyla rather than one quarter in arrears, which is the point in which the amount is fixed and determinable. This will require the Company to make an estimate of the royalties as the information was not provided to the Company until 90 days after the end of the quarter. The Company expects to record an adjustment of approximately $9.0 million to increase consolidated assets and reduce accumulated deficit for the estimated royalties earned during the quarter ended December 31, 2017 as a cumulative effect of initially applying the standard to opening accumulated deficit as of January 1, 2018. Performance obligations were identified for all revenue arrangements and license revenue was recognized upon delivery of licenses based on their relative selling prices. Milestones achieved have been allocated to their respective performance obligations, and estimates of variable consideration related to future milestones have been made. Other than a $5.0 million milestone that is considered probable, future milestones have been fully constrained and will be subject to review on a quarterly basis. Certain options for future licenses represent material rights since the exercise price is at a discount, however, the impact is not materially different from how the options were valued previously. The balance of the cumulative effect related to this non-royalty revenue is primarily a result of the unconstrained milestone discussed above, and is expected to reduce the accumulated deficit by approximately $4.0 million to $6.0 million. The Company will continue to provide disclosures under the legacy accounting for the year ended December 31, 2018. In January 2016, the FASB issued ASU 2016-1, Recognition and Measurement of Financial Assets and Financial Liabilities (Topic 825). The amendments in this Update supersede the guidance to classify equity securities with readily determinable fair values into different categories (that is, trading or available-for-sale) and require equity securities (including other ownership interests, such as partnerships, unincorporated joint ventures, and limited liability companies) to be measured at fair value with changes in the fair value recognized through net income. The amendments allow equity investments that do not have readily determinable fair values to be remeasured at fair value either upon the occurrence of an observable price change or upon identification of an impairment. The amendments also require enhanced disclosures about those investments. The amendments improve financial reporting by providing relevant information about an entity’s equity investments and reducing the number of items that are recognized in other comprehensive income. This guidance is effective for annual reporting beginning after December 15, 2017, including interim periods within the year of adoption, and calls for prospective application, with early application permitted. Accordingly, the standard is effective for the Company on January 1, 2018. The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial statements. In February 2016, the FASB issued ASU 2016-2, Leases (Topic 842) that primarily requires lessees to recognize most leases on their balance sheets but record expenses on their income statements in a manner similar to current accounting. For lessors, the guidance modifies the classification criteria and the accounting for sales-type and direct financing leases. In September 2017, the FASB issued additional amendments providing clarification and implementation guidance. In January 2018, the FASB issued an update that permits an entity to elect an optional transition practical expedient to not evaluate land easements that existed or expired before the entity’s adoption of the new standard and that were not previously accounted for as leases. The guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, and calls for retrospective application, with early adoption permitted. Accordingly, the standard is effective for the Company on January 1, 2019. Although the Company has not finalized its process of evaluating the impact of adoption of the ASU on its consolidated financial statements, the Company expects there will be a material increase to assets and liabilities related to the recognition of new right-of-use assets and lease liabilities on the Company’s balance sheet for leases currently classified as operating leases. In May 2017, the FASB issued ASU 2017-09, Stock Compensation – Scope of Modification Accounting (Topic 718) regarding changes to terms and conditions of share-based payment awards. The amendment provides guidance about which changes to terms or conditions of a share-based payment award require an entity to apply modification accounting. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within that year. The Company does not anticipate that adoption of this guidance will have a material impact on its consolidated financial statements. |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Significant Accounting Policies | |
Schedule of inventory | Inventory at December 31, 2017 and 2016 is summarized below (in thousands): December 31, December 31, 2017 2016 Raw materials $ 40 $ 357 Work in process 998 1,835 Total $ 1,038 $ 2,192 |
Schedule of components of other accrued liabilities | Other accrued liabilities consisted of the following at December 31, 2017 and 2016 (in thousands): December 31, December 31, 2017 2016 Accrued contract payments $ 4,901 $ 1,980 Accrued clinical trial costs 8,400 4,700 Accrued professional services 723 865 Accrued employee benefits 574 676 Accrued public reporting charges 156 156 Accrued interest on convertible senior notes — 2,388 Other current accrued liabilities 1,013 385 Total $ 15,767 $ 11,150 |
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 December 31, 2017 (in thousands): Fair Value Measurements at December 31, 2017 Using Quoted Prices in Significant Active Markets for Significant Other Unobservable Identical Assets Observable Inputs Inputs Total (Level 1) (Level 2) (Level 3) Cash equivalents $ 240,013 $ 240,013 $ — $ — As of December 31, 2016, 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 December 31, 2016 (in thousands): Fair Value Measurements at December 31, 2016 Using Quoted Prices in Significant Active Markets for Significant Other Unobservable Identical Assets Observable Inputs Inputs Total (Level 1) (Level 2) (Level 3) Cash equivalents $ 144,176 $ 144,176 $ — $ — |
Schedule of estimated useful lives of property and equipment | Machinery and equipment 5 years Computer hardware and software 3 years Furniture and fixtures 5 years Leasehold improvements Shorter of remaining lease term or 7 years |
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 for the options and unvested restricted stock and the if-converted method for the convertible notes, are shown in the following table (in thousands): Year Ended December 31, Six Months Ended December 31, Year Ended June 30, 2017 2016 2016 2015 Options outstanding to purchase common stock and unvested restricted stock at end of period 14,290 13,878 11,919 9,739 Common stock equivalents under treasury stock method for options and unvested restricted stock 1,579 1 735 770 Shares issuable upon conversion of convertible notes at end of period 501 23,878 23,878 — Common stock equivalents under if-converted method for convertible notes 501 23,878 718 — |
Schedule of risk-free rate of the stock options based on US Treasury rate | Year Ended Six Months Ended December 31, December 31, Year Ended June 30, 2017 2016 2016 2015 Dividend None None None None Volatility % 65.63 % 66.34 % 60.86 % Risk-free interest rate % 1.29 % 1.80 % 1.84 % Expected life (years) 6.0 6.3 6.3 6.3 |
Summary of stock option activity | A summary of option activity under the 2006 and 2016 Plans as of December 31, 2017, December 31, 2016, and June 30, 2016 and changes during the year ended December 31, 2017, the six month period ended December 31, 2016 and the year ended June 30, 2016 is presented below (in thousands, except weighted‑average data): Weighted- Weighted- Number Average Average Aggregate of Stock Exercise Remaining Intrinsic Options Price Life in Yrs. Value Outstanding at June 30, 2015 $ Granted $ Exercised Forfeited/Canceled 14.84 Outstanding at June 30, 2016 $ — Outstanding at June 30, 2016—vested or unvested and expected to vest $ — Exercisable at June 30, 2016 $ — Outstanding at June 30, 2016 $ Granted Exercised — — Forfeited/Canceled Outstanding at December 31, 2016 10.70 $ 23 Outstanding at December 31, 2016—vested or unvested and expected to vest $ 22 Exercisable at December 31, 2016 $ — Outstanding at December 31, 2016 $ Granted Exercised (191) 3.42 Forfeited/Canceled Outstanding at December 31, 2017 $ 13,513 Outstanding at December 31, 2017—vested or unvested and expected to vest $ $ 13,283 Exercisable at December 31, 2017 $ $ 3,733 |
Summary of restricted stock activity | A summary of restricted stock activity under the 2006 and 2016 Plans as of December 31, 2017 and December 31, 2016, and changes during the year ended December 31, 2017, six month period ended December 31, 2016 and the fiscal year ended June 30, 2016 is presented below (in thousands, except weighted‑average data): Number of Weighted- Restricted Average Grant Stock Shares Date Fair Value Unvested at June 30, 2015 50 $ Awarded 75 5.65 Vested Unvested at June 30, 2016 $ Awarded 118 Vested — — Forfeited Unvested at December 31, 2016 $ Awarded 2,253 $ Vested (25) Forfeited Unvested at December 31, 2017 $ |
Summary of vested stock option activity | A summary of option activity for options vested during the year ended December 31, 2017 and the six months ended December 31, 2016 and fiscal years ended June 30, 2016 and 2015 is presented below (in thousands): Year Ended December 31, Six Months Ended December 31, Year Ended June 30, 2017 2016 2016 2015 Total fair value of options vested $ 10,964 $ 17,121 $ 15,298 $ 16,145 Total intrinsic value of options exercised 598 — 3,142 3,275 Cash received for exercise of stock options 650 — 5,161 4,429 |
Schedule of percentage of total revenues recognized from each significant customer | Year Ended December 31, Six Months Ended December 31, Year Ended June 30, Collaborative Partner: 2017 2016 2016 2015 Bayer — % — % 17 % — % CytomX 13 % — % — % — % Debiopharm 26 % — % — % — % Lilly 1 % 4 % 11 % 21 % Novartis — % 24 % 1 % 43 % Roche 24 % 60 % 43 % 23 % Sanofi 31 % — % — % — % Takeda 4 % 8 % 16 % — % |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property and Equipment | |
Schedule of components of property and equipment | Property and equipment consisted of the following at December 31, 2017 and 2016 (in thousands): December 31, December 31, 2017 2016 Leasehold improvements $ 36,460 $ 36,584 Machinery and equipment 23,123 23,535 Computer hardware and software 8,273 8,395 Furniture and fixtures 3,710 3,705 Assets under construction 416 124 $ 71,982 $ 72,343 Less accumulated depreciation (57,444) (52,845) Property and equipment, net $ 14,538 $ 19,498 |
Liability Related to Sale of 24
Liability Related to Sale of Future Royalties (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Liability Related to Sale of Future Royalties | |
Schedule of Liability account during the period from the inception of the royalty transaction | The following table shows the activity within the liability account during the year ended December 31, 2017 and the period from inception (in thousands): Twelve Months Period from Ended inception to December 31, December 31, 2017 2017 Liability related to sale of future royalties, net — beginning balance $ 184,328 $ — Proceeds from sale of future royalties, net — 194,135 Non-cash Kadcyla royalty revenue (28,142) (71,819) Non-cash interest expense recognized 13,227 47,097 Liability related to sale of future royalties, net — ending balance $ 169,413 $ 169,413 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Taxes | |
Reconciliation of the Company's expected tax benefit, as computed by applying the U.S. federal corporate tax rate to loss before the benefit for income taxes, and actual tax | The difference between the Company’s expected tax benefit, as computed by applying the U.S. federal corporate tax rate of 34% to loss before the benefit for income taxes, and actual tax is reconciled in the following chart (in thousands): Year Ended Six Months Ended December 31, December 31, Year Ended June 30, 2017 2016 2016 2015 Loss before income tax expense $ (96,012) $ (78,883) $ (144,817) $ (60,739) Expected tax benefit at 34% $ (32,644) $ (26,820) $ (49,238) $ (20,651) Permanent differences 25 15 345 818 Incentive stock options 1,528 1,313 2,501 1,948 State tax benefit net of federal benefit (3,537) (4,157) (7,954) (3,252) Change in valuation allowance, net (63,238) 32,922 62,505 27,940 Federal research credit (2,204) (1,232) (4,109) (1,407) Federal orphan drug credit (7,118) (2,901) (4,241) (5,471) Expired loss and credit carryforwards — — 184 75 Change in U.S. tax law 97,479 — — — Debt inducement 8,044 — — — Stock option expirations 1,665 860 7 — Benefit for income taxes $ — $ — $ — $ — |
Schedule of significant components of deferred tax assets | Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2017 and 2016 are as follows (in thousands): December 31, 2017 2016 Deferred tax assets: Net operating loss carryforwards $ 118,672 $ 167,869 Research and development tax credit carryforwards 58,606 43,096 Property and other intangible assets 2,272 2,982 Deferred revenue 25,997 13,205 Stock-based compensation 12,125 16,794 Deferred lease incentive 2,889 4,264 Other liabilities 3,037 2,107 Royalty sale 47,143 73,973 Total deferred tax assets $ 270,741 $ 324,290 Deferred tax liabilities: Royalty sale transaction costs (859) (1,569) Total deferred tax liabilities $ (859) $ (1,569) Valuation allowance (269,882) (322,721) Net deferred tax assets/(liabilities) $ — $ — |
Capital Stock (Tables)
Capital Stock (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Capital Stock | |
Schedule of options exercisable and their respective weighted average exercise prices per share | Weighted‑ Exercisable Average (in thousands) Exercise Price December 31, 2017 7,996 $ 12.16 December 31, 2016 7,898 $ June 30, 2016 6,453 $ 12.63 June 30, 2015 5,380 $ 11.89 |
Restructuring Charge (Tables)
Restructuring Charge (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Restructuring Charge | |
Schedule activity against the restructuring charge | Employee Termination Benefits Costs Initial charge related to employee benefits - September 2016 $ 3,135 Additional charge in December 2016 273 Payments during the period (1,657) Balance December 31, 2016 $ 1,751 Payments during the period (1,751) Balance December 31, 2017 $ — |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies | |
Schedule of minimum rental commitments | As of December 31, 2017, the minimum rental commitments, including real estate taxes and other expenses, for the next five years and thereafter under the non‑cancelable operating lease agreements discussed above are as follows (in thousands): 2018 $ 7,703 2019 7,202 2020 7,251 2021 7,074 2022 7,125 Thereafter 23,531 Total minimum lease payments $ 59,886 |
Quarterly Financial Informati29
Quarterly Financial Information (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information (Unaudited) | |
Schedule of Quarterly Financial Information (Unaudited) | Calendar Year 2017 First Quarter Second Quarter Third Quarter Fourth Quarter Ended Ended Ended Ended March 31, 2017 June 30, 2017 September 30, 2017 December 31, 2017 (In thousands, except per share data) Revenues: License and milestone fees $ 18,730 $ 31,080 $ 79 $ 29,580 Royalty revenue — — — — Non-cash royalty revenue related to the sale of future royalties 7,613 6,439 6,503 7,587 Research and development support 1,478 902 650 452 Clinical materials revenue 678 599 1,248 1,829 Total revenues 28,499 39,020 8,480 39,448 Expenses: Research and development 32,888 35,319 31,689 39,843 General and administrative 8,119 8,836 7,908 9,048 Restructuring charge 386 — — 393 Total expenses 41,393 44,155 39,597 49,284 Loss from operations (12,894) (5,135) (31,117) (9,836) Non-cash interest expense on liability related to sale of future royalty and convertible senior notes (3,575) (3,501) (3,385) (3,221) Interest expense on senior convertible notes (1,125) (1,125) (762) (28) Non-cash debt conversion expense — — (22,191) (724) Other income, net 249 894 773 691 Net loss $ (17,345) $ (8,867) $ (56,682) $ (13,118) Basic and diluted net loss per common share $ $ $ $ Six Month Transition Period First Quarter Second Quarter Ended Ended September 30, 2016 December 31, 2016 (In thousands, except per share data) Revenues: License and milestone fees $ 76 $ 5,076 Royalty revenue — — Non-cash royalty revenue related to the sale of future royalties 6,184 6,710 Research and development support 1,354 1,427 Clinical materials revenue 46 633 Total revenues 7,660 13,846 Expenses: Research and development 32,909 33,657 General and administrative 9,459 8,536 Restructuring charge 4,130 301 Total expenses 46,498 42,494 Loss from operations (38,838) (28,648) Non-cash interest expense on liability related to sale of future royalty and convertible senior notes (5,018) (3,647) Interest expense on senior convertible notes (1,150) (1,099) Other income (expense), net 275 (758) Net loss $ (44,731) $ (34,152) Basic and diluted net loss per common share $ $ Fiscal Year 2016 First Quarter Second Quarter Third Quarter Fourth Quarter Ended Ended Ended Ended September 30, 2015 December 31, 2015 March 30, 2016 June 30, 2016 (In thousands, except per share data) Revenues: License and milestone fees $ 6,070 $ 10,692 $ 10,077 $ 76 Royalty revenue — 195 — — Non-cash royalty revenue related to the sale of future royalties 5,684 6,291 7,380 5,944 Research and development support 772 848 1,059 1,335 Clinical materials revenue 2,325 3 1,198 53 Total revenues 14,851 18,029 19,714 7,408 Expenses: Research and development 35,132 38,199 36,094 38,652 General and administrative 8,329 8,054 11,235 9,298 Total expenses 43,461 46,253 47,329 47,950 Loss from operations (28,610) (28,224) (27,615) (40,542) Non-cash interest expense on liability related to sale of future royalty (5,143) (5,059) (4,972) (4,956) Other income (expense), net 13 56 659 (424) Net loss $ (33,740) $ (33,227) $ (31,928) $ (45,922) Basic and diluted net loss per common share $ $ $ $ Fiscal Year 2015 First Quarter Second Quarter Third Quarter Fourth Quarter Ended Ended Ended Ended September 30, 2014 December 31, 2014 March 30, 2015 June 30, 2015 (In thousands, except per share data) Revenues: License and milestone fees $ 6,234 $ 41,417 $ 5,078 $ 5,086 Royalty revenue 4,166 4,625 5,099 (23) Non-cash royalty revenue related to the sale of future royalties — — — 5,484 Research and development support 776 832 532 708 Clinical materials revenue 2,027 1,426 718 1,356 Total revenues 13,203 48,300 11,427 12,611 Expenses: Research and development 28,018 27,647 25,666 30,437 General and administrative 7,095 6,872 7,000 7,261 Total expenses 35,113 34,519 32,666 37,698 (Loss) income from operations (21,910) 13,781 (21,239) (25,087) Non-cash interest expense on liability related to sale of future royalty — — — (5,437) Other (expense) income, net (372) (146) (379) 50 Net (loss) income $ (22,282) $ 13,635 $ (21,618) $ (30,474) Basic and diluted net (loss) income per common share $ (0.26) $ 0.16 $ (0.25) $ (0.35) |
Stub Period Comparative Data 30
Stub Period Comparative Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Stub Period Comparative Data (Unaudited) | |
Unaudited condensed consolidated statements of earnings | Year Ended Six Months Ended December 31, December 31, 2016 2015 Revenues: License and milestone fees $ 15,305 $ 16,762 Royalty revenue — 195 Non-cash royalty revenue related to the sale of future royalties 26,218 11,975 Research and development support 5,175 1,620 Clinical materials revenue 1,930 2,328 Total revenues 48,628 32,880 Operating Expenses: Research and development 141,312 73,331 General and administrative 38,528 16,383 Restructuring charge 4,431 — Total operating expenses 184,271 89,714 Loss from operations (135,643) (56,834) Investment income, net 473 111 Non-cash interest expense on liability related to the sale of future royalties and convertible senior notes (18,593) (10,202) Interest expense on convertible senior notes (2,387) — Other expense, net (583) (42) Net loss $ (156,733) $ (66,967) Basic and diluted net loss per common share $ $ |
Nature of Business and Plan o31
Nature of Business and Plan of Operations (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2014 | |
Nature of Business and Plan of Operations | |||||
Net loss | $ (78,883) | $ (96,012) | $ (144,817) | $ (60,739) | |
Accumulated deficit | (932,570) | (1,028,582) | |||
Product revenue | 0 | ||||
Cash and cash equivalents | $ 159,964 | $ 267,107 | $ 245,026 | $ 278,109 | $ 142,261 |
Summary of Significant Accoun32
Summary of Significant Accounting Policies - Revenue (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||||||||
Feb. 28, 2018item | Dec. 31, 2015item | Mar. 31, 2015item | May 31, 2013item | Mar. 31, 2013item | Mar. 31, 2018USD ($) | Dec. 31, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2014USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2017USD ($)item | Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Dec. 31, 2011item | Dec. 31, 2010item | Dec. 31, 2000item | |
Summary of Significant Accounting Policies | ||||||||||||||||||
Number of types of licensing and development agreements with collaborative partners | 3 | |||||||||||||||||
Proceeds from common stock issuance, net of $222 of transaction costs | $ | $ 101,663 | |||||||||||||||||
Royalty revenue | $ | $ 195 | $ 5,099 | $ 4,625 | $ 4,166 | $ 195 | $ 195 | $ 13,867 | |||||||||||
Difference between full cost and amounts received | $ | $ 900 | $ 3,100 | $ 6,900 | $ 9,200 | ||||||||||||||
Number of types of milestone payments under collaborative arrangements | 3 | |||||||||||||||||
Number of quarters in arrear for revenue recognition | 1 | |||||||||||||||||
Minimum | ||||||||||||||||||
Summary of Significant Accounting Policies | ||||||||||||||||||
Period to earn royalty payments | 10 years | |||||||||||||||||
Maximum | ||||||||||||||||||
Summary of Significant Accounting Policies | ||||||||||||||||||
Period to earn royalty payments | 12 years | |||||||||||||||||
Kadcyla | Minimum | ||||||||||||||||||
Summary of Significant Accounting Policies | ||||||||||||||||||
Period to earn royalty payments | 10 years | |||||||||||||||||
Kadcyla | Maximum | ||||||||||||||||||
Summary of Significant Accounting Policies | ||||||||||||||||||
Period to earn royalty payments | 12 years | |||||||||||||||||
Forecast | ||||||||||||||||||
Summary of Significant Accounting Policies | ||||||||||||||||||
Reduction in current workforce, number | 20 | |||||||||||||||||
Severance charges | $ | $ 2,500 | |||||||||||||||||
Charge for retention benefits | $ | $ 2,500 | |||||||||||||||||
Amgen | ||||||||||||||||||
Summary of Significant Accounting Policies | ||||||||||||||||||
Number of single-target licenses | 4 | 1 | 2 | 3 | ||||||||||||||
Bayer | ||||||||||||||||||
Summary of Significant Accounting Policies | ||||||||||||||||||
Number of single-target licenses | 1 | |||||||||||||||||
Biotest | ||||||||||||||||||
Summary of Significant Accounting Policies | ||||||||||||||||||
Number of single-target licenses | 1 | |||||||||||||||||
CytomX | ||||||||||||||||||
Summary of Significant Accounting Policies | ||||||||||||||||||
Number of single-target licenses | 1 | |||||||||||||||||
Fusion Pharmaceuticals | ||||||||||||||||||
Summary of Significant Accounting Policies | ||||||||||||||||||
Number of single-target licenses | 1 | |||||||||||||||||
Lilly | ||||||||||||||||||
Summary of Significant Accounting Policies | ||||||||||||||||||
Number of single-target licenses | 3 | 3 | ||||||||||||||||
Novartis | ||||||||||||||||||
Summary of Significant Accounting Policies | ||||||||||||||||||
Number of single-target licenses | 1 | 5 | 6 | |||||||||||||||
Number of licenses to two related targets | 1 | |||||||||||||||||
Number of related targets | 2 | 2 | ||||||||||||||||
Number of related targets licenses on exclusive basis | 1 | |||||||||||||||||
Roche | ||||||||||||||||||
Summary of Significant Accounting Policies | ||||||||||||||||||
Number of single-target licenses | 5 | |||||||||||||||||
Roche | Undisclosed Target | ||||||||||||||||||
Summary of Significant Accounting Policies | ||||||||||||||||||
Number of related targets | 4 | |||||||||||||||||
Sanofi | ||||||||||||||||||
Summary of Significant Accounting Policies | ||||||||||||||||||
Number of single-target licenses | 5 | |||||||||||||||||
Takeda | ||||||||||||||||||
Summary of Significant Accounting Policies | ||||||||||||||||||
Number of single-target licenses | 2 | 1 | ||||||||||||||||
Oxford BioTherapeutics Ltd Member | ||||||||||||||||||
Summary of Significant Accounting Policies | ||||||||||||||||||
Number of single-target licenses | 1 | |||||||||||||||||
Debiopharm | ||||||||||||||||||
Summary of Significant Accounting Policies | ||||||||||||||||||
Number of single-target licenses | 1 |
Summary of Significant Accoun33
Summary of Significant Accounting Policies - Inventory (Details) | 6 Months Ended | 12 Months Ended | |||
Dec. 31, 2016USD ($) | Dec. 31, 2017USD ($)item | Dec. 31, 2016USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | |
Summary of Significant Accounting Policies | |||||
Unbilled partner milestone | $ 5,000,000 | $ 5,000,000 | |||
Inventory | |||||
Raw materials | 357,000 | $ 40,000 | 357,000 | ||
Work in process | 1,835,000 | 998,000 | 1,835,000 | ||
Total | 2,192,000 | $ 1,038,000 | 2,192,000 | ||
Number of suppliers | item | 2 | ||||
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 | ||||
Raw materials inventory write-downs | $ 1,100,000 | 1,100,000 | |||
Reserve for work in process | 0 | $ 0 | $ 0 | ||
Rolling period of firm, fixed orders for conjugate that the company is required to manufacture | 6 months | ||||
Rolling period of manufacturing projections for the quantity of conjugate the collaborator expects to need | 12 months | ||||
Maximum period of firm, fixed orders and/or projections from collaborators considered for capitalizing inventory | 12 months | ||||
Charges to research and development expense related to raw material inventory identified as excess | $ 150,000 | $ 403,000 | $ 1,100,000 | $ 1,000,000 |
Summary of Significant Accoun34
Summary of Significant Accounting Policies - Acc Liab (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Other Accrued Liabilities | ||
Accrued contract payments | $ 4,901 | $ 1,980 |
Accrued clinical trial costs | 8,400 | 4,700 |
Accrued professional services | 723 | 865 |
Accrued employee benefits | 574 | 676 |
Accrued public reporting charges | 156 | 156 |
Accrued interest on convertible senior notes | 2,388 | |
Other current accrued liabilities | 1,013 | 385 |
Total | 15,767 | 11,150 |
Deferred revenue | $ 6,800 | $ 7,100 |
Summary of Significant Accoun35
Summary of Significant Accounting Policies - Financial Instruments (Details) | 12 Months Ended | ||||
Dec. 31, 2017USD ($)item | Dec. 31, 2016USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | |
Financial Instruments and Concentration of Credit Risk | |||||
Number of financial institutions in the U.S. in which cash and cash equivalents are primarily maintained | item | 3 | ||||
Marketable securities held by entity | $ 0 | $ 0 | |||
Cash and Cash Equivalents | |||||
Cash and cash equivalents | 267,107,000 | 159,964,000 | $ 245,026,000 | $ 278,109,000 | $ 142,261,000 |
Noncash Investing Activities | |||||
Accrued capital expenditures | $ 482,000 | $ 356,000 |
Summary of Significant Accoun36
Summary of Significant Accounting Policies - Fair Value (Details) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2016 | |
Fair value hierarchy for the Company's financial assets measured at fair value | ||||
Interest rate (as a percent) | 4.50% | 4.50% | ||
Recurring basis | ||||
Fair value hierarchy for the Company's financial assets measured at fair value | ||||
Cash equivalents | $ 240,013,000 | $ 240,013,000 | $ 144,176,000 | |
Recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||||
Fair value hierarchy for the Company's financial assets measured at fair value | ||||
Cash equivalents | $ 240,013,000 | $ 240,013,000 | $ 144,176,000 | |
Convertible Notes | ||||
Fair value hierarchy for the Company's financial assets measured at fair value | ||||
Interest rate (as a percent) | 4.50% | 4.50% | 4.50% | |
Debt converted | $ 97,900,000 | $ 96,900,000 | ||
Shares issued with debt conversion (in shares) | 26,160,187 | |||
Principal amount of debt for conversion calculations | $ 1,000 | 1,000 | $ 1,000 | |
Convertible Notes | Significant Other Observable Inputs (Level 2) | Face Value | ||||
Fair value hierarchy for the Company's financial assets measured at fair value | ||||
Convertible debt fair value | 2,100,000 | 2,100,000 | $ 100,000,000 | |
Convertible Notes | Significant Other Observable Inputs (Level 2) | Estimated fair value | ||||
Fair value hierarchy for the Company's financial assets measured at fair value | ||||
Convertible debt fair value | $ 3,800,000 | $ 3,800,000 | $ 79,000,000 |
Summary of Significant Accoun37
Summary of Significant Accounting Policies - PPE (Details) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | |
Property and Equipment | ||||
(Losses) gains on the sale/disposal of furniture and equipment (in dollars) | $ (1,130,000) | $ (239,000) | $ 21,000 | $ (7,000) |
Leasehold impairment charge | 970,000 | $ 180,000 | ||
Machinery and equipment | ||||
Property and Equipment | ||||
Estimated useful lives | 5 years | |||
Computer hardware and software | ||||
Property and Equipment | ||||
Estimated useful lives | 3 years | |||
Furniture and fixtures | ||||
Property and Equipment | ||||
Estimated useful lives | 5 years | |||
(Losses) gains on the sale/disposal of furniture and equipment (in dollars) | $ (1,100,000) | $ (239,000) | $ 21,000 | $ (7,000) |
Leasehold improvements | Maximum | ||||
Property and Equipment | ||||
Estimated useful lives | 7 years |
Summary of Significant Accoun38
Summary of Significant Accounting Policies - EPS and SBC (Details) | Jun. 13, 2017shares | Dec. 09, 2016shares | Jun. 30, 2017$ / sharesshares | Feb. 28, 2017$ / sharesshares | Sep. 30, 2016shares | Aug. 31, 2016$ / sharesshares | Dec. 31, 2016USD ($)item$ / sharesshares | Dec. 31, 2015$ / sharesshares | Dec. 31, 2017USD ($)item$ / sharesshares | Jun. 30, 2016USD ($)item$ / sharesshares | Jun. 30, 2015USD ($)$ / sharesshares |
Computation of Net Loss per Common Share | |||||||||||
Options outstanding to purchase common stock and unvested restricted stock | 13,878,000 | 14,290,000 | 11,919,000 | 9,739,000 | |||||||
Common stock equivalents under treasury stock method for options and unvested restricted stock (in shares) | 1,000 | 1,579,000 | 735,000 | 770,000 | |||||||
Shares issuable upon conversion of convertible notes (in shares) | item | 23,878,000 | 501,000 | 23,878,000 | ||||||||
Common stock equivalents under if-converted method for convertible notes (in shares) | 23,878,000 | 501,000 | 718,000 | ||||||||
Weighted-average assumptions used to estimate the fair value of each stock option | |||||||||||
Dividend (as a percent) | 0.00% | ||||||||||
Volatility (as a percent) | 65.63% | ||||||||||
Risk-free interest rate (as a percent) | 1.29% | ||||||||||
Expected life | 6 years 3 months 18 days | ||||||||||
Additional disclosure for options | |||||||||||
Cash received for exercise of stock options | $ | $ 650,000 | $ 5,161,000 | $ 4,429,000 | ||||||||
Stock compensation expense (reduction) | $ | $ 8,100,000 | $ 11,100,000 | $ 21,900,000 | $ 15,300,000 | |||||||
Estimated fair value of unvested employee awards, net of estimated forfeitures | $ | $ 11,600,000 | ||||||||||
Weighted average vesting period of unvested employee awards | 2 years | ||||||||||
Stock options | |||||||||||
Weighted-average assumptions used to estimate the fair value of each stock option | |||||||||||
Dividend (as a percent) | 0.00% | 0.00% | 0.00% | ||||||||
Volatility (as a percent) | 67.34% | 66.34% | 60.86% | ||||||||
Risk-free interest rate (as a percent) | 2.00% | 1.80% | 1.84% | ||||||||
Expected life | 6 years | 6 years 3 months 18 days | 6 years 3 months 18 days | ||||||||
Weighted-average grant date fair value (in dollars per share) | $ / shares | $ 1.76 | $ 6.04 | $ 1.98 | $ 8.91 | |||||||
Number of Stock Options | |||||||||||
Outstanding at the beginning of the period (in shares) | 11,813,000 | 9,689,000 | 13,679,000 | 9,689,000 | |||||||
Granted (in shares) | 3,536,000 | 1,589,000 | 3,340,000 | ||||||||
Exercised (in shares) | (191,000) | (555,000) | |||||||||
Forfeited/Canceled (in shares) | (1,670,000) | (3,106,000) | (661,000) | ||||||||
Outstanding at the end of the period (in shares) | 13,679,000 | 11,971,000 | 11,813,000 | 9,689,000 | |||||||
Vested or unvested and expected to vest at the end of the period (in shares) | 13,516,000 | 11,881,000 | 11,475,000 | ||||||||
Exercisable at the end of the period (in shares) | 7,898,000 | 7,996,000 | 6,453,000 | 5,380,000 | |||||||
Weighted-Average Exercise Price | |||||||||||
Outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 13.03 | $ 12.49 | $ 10.70 | $ 12.49 | |||||||
Granted (in dollars per share) | $ / shares | 2.90 | 3.21 | 14.34 | ||||||||
Exercised (in dollars per share) | $ / shares | 3.42 | 9.30 | |||||||||
Forfeited/Canceled (in dollars per share) | $ / shares | 10.64 | 10.33 | 14.84 | ||||||||
Outstanding at the end of the period (in dollars per share) | $ / shares | 10.70 | 9.92 | 13.03 | $ 12.49 | |||||||
Vested or unvested and expected to vest at the end of the period (in dollars per share) | $ / shares | 10.76 | 9.96 | 13.05 | ||||||||
Exercisable at the end of the period (in dollars per share) | $ / shares | $ 13.15 | $ 12.16 | $ 12.63 | $ 11.89 | |||||||
Weighted-Average Remaining Life (in years) | |||||||||||
Outstanding at the end of the period | 6 years 6 months 18 days | 6 years 2 months 1 day | 6 years 9 months 26 days | ||||||||
Vested or unvested and expected to vest at the end of the period | 6 years 6 months 7 days | 6 years 1 month 24 days | 6 years 9 months 4 days | ||||||||
Exercisable at the end of the period | 4 years 8 months 12 days | 4 years 11 months 19 days | 5 years 3 months 18 days | ||||||||
Aggregate Intrinsic Value | |||||||||||
Outstanding at the end of the period | $ | $ 23,000 | $ 13,513,000 | |||||||||
Vested or unvested and expected to vest at the end of the period | $ | 22,000 | 13,283,000 | |||||||||
Exercisable at the end of the period | $ | 3,733,000 | ||||||||||
Additional disclosure for options | |||||||||||
Cash received for exercise of stock options | $ | 650,000 | $ 5,161,000 | $ 4,429,000 | ||||||||
Total fair value of options vested | $ | 17,121,000 | 10,964,000 | 15,298,000 | 16,145,000 | |||||||
Total intrinsic value of options exercised | $ | 598,000 | 3,142,000 | 3,275,000 | ||||||||
Stock options | Chief Executive Officer | |||||||||||
Additional disclosure for options | |||||||||||
Stock compensation cost due to modification | $ | $ 0 | $ 742,000 | $ 3,100,000 | $ 0 | |||||||
Restricted stock | |||||||||||
Number of Restricted Stock | |||||||||||
Unvested at the beginning of the period (in shares) | 106,000 | 50,000 | 199,000 | 50,000 | |||||||
Awarded (in shares) | 118,000 | 2,253,000 | 75,000 | ||||||||
Vested (in shares) | (25,000) | (19,000) | |||||||||
Forfeited (in shares) | (25,000) | (108,000) | |||||||||
Unvested at the end of the period (in shares) | 199,000 | 2,319,000 | 106,000 | 50,000 | |||||||
Weighted-Average Grant Date Fair Value | |||||||||||
Unvested at the beginning of the period (in dollars per share) | $ / shares | $ 6.54 | $ 9.23 | $ 4.41 | $ 9.23 | |||||||
Awarded (in dollars per share) | $ / shares | 3.15 | 2.71 | 5.65 | ||||||||
Vested (in dollars per share) | $ / shares | 5.87 | 10.13 | |||||||||
Forfeited (in dollars per share) | $ / shares | 7.52 | 2.68 | |||||||||
Unvested at the end of the period (in dollars per share) | $ / shares | $ 4.41 | $ 2.82 | $ 6.54 | $ 9.23 | |||||||
Restricted stock | Officers | |||||||||||
Number of Restricted Stock | |||||||||||
Awarded (in shares) | 239,000 | 529,830 | 117,800 | ||||||||
Weighted-Average Grant Date Fair Value | |||||||||||
Awarded (in dollars per share) | $ / shares | $ 4.71 | $ 2.47 | $ 3.15 | ||||||||
Deferred share units | |||||||||||
Additional disclosure for options | |||||||||||
Stock compensation expense (reduction) | $ | $ 215,000 | $ 206,000 | $ 380,000 | $ 389,000 | |||||||
Compensation Policy for Non-Employee Directors | Stock options | |||||||||||
Number of Stock Options | |||||||||||
Granted (in shares) | 40,000 | 80,000 | 80,000 | 80,000 | |||||||
Compensation Policy for Non-Employee Directors | Deferred share units | |||||||||||
Additional disclosure for options | |||||||||||
Stock compensation expense (reduction) | $ | $ 215,000 | $ 206,000 | $ 380,000 | $ 389,000 | |||||||
2016 Plan | |||||||||||
Computation of Net Loss per Common Share | |||||||||||
Common stock equivalents under treasury stock method for options and unvested restricted stock (in shares) | 14,250,000 | ||||||||||
Stock-Based Compensation | |||||||||||
Number of employee share-based compensation plans | item | 1 | ||||||||||
Additional shares authorized for issuance (in shares) | 1,000,000 | ||||||||||
Common stock authorized for issuance (in shares) | 5,500,000 | ||||||||||
2016 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 | item | 1 | ||||||||||
Number of Stock Options | |||||||||||
Exercised (in shares) | (191,000) | ||||||||||
2016 Plan | Stock options | Maximum | |||||||||||
Stock-Based Compensation | |||||||||||
Vesting period | 4 years | ||||||||||
Exercise period | 10 years | ||||||||||
Workforce reduction | Stock options | |||||||||||
Stock-Based Compensation | |||||||||||
Vesting period | 3 years | ||||||||||
Number of Stock Options | |||||||||||
Granted (in shares) | 847,000 | ||||||||||
Forfeited/Canceled (in shares) | (762,000) | ||||||||||
Additional disclosure for options | |||||||||||
Stock compensation expense (reduction) | $ | $ (837,000) |
Summary of Significant Accoun39
Summary of Significant Accounting Policies - Segments (Details) - item | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | |
Segment Information | ||||
Number of operating segments | 1 | |||
Bayer | Revenues percentage | Customer concentration | ||||
Segment Information | ||||
Percentages of revenue recognized | 17.00% | |||
CytomX | Revenues percentage | Customer concentration | ||||
Segment Information | ||||
Percentages of revenue recognized | 13.00% | |||
Debiopharm | Revenues percentage | Customer concentration | ||||
Segment Information | ||||
Percentages of revenue recognized | 26.00% | |||
Lilly | Revenues percentage | Customer concentration | ||||
Segment Information | ||||
Percentages of revenue recognized | 4.00% | 1.00% | 11.00% | 21.00% |
Novartis | Revenues percentage | Customer concentration | ||||
Segment Information | ||||
Percentages of revenue recognized | 24.00% | 1.00% | 43.00% | |
Roche | Revenues percentage | Customer concentration | ||||
Segment Information | ||||
Percentages of revenue recognized | 60.00% | 24.00% | 43.00% | 23.00% |
Sanofi | Revenues percentage | Customer concentration | ||||
Segment Information | ||||
Percentages of revenue recognized | 31.00% | |||
Takeda | Revenues percentage | Customer concentration | ||||
Segment Information | ||||
Percentages of revenue recognized | 8.00% | 4.00% | 16.00% |
Summary of Significant Accoun40
Summary of Significant Accounting Policies - Recently issued accounting pronouncements (Details) - USD ($) $ in Thousands | Jan. 01, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2016 | Jun. 30, 2015 |
Recent Accounting Pronouncements | |||||
Prepaid and other current assets | $ 2,967 | $ 5,386 | |||
Other assets | 3,797 | 3,020 | |||
Valuation allowance | 269,882 | 322,721 | |||
Cumulative effect on retained earnings | (1,028,582) | (932,570) | |||
Consolidated assets | 294,676 | 198,864 | |||
Accumulated deficit | (1,028,582) | $ (932,570) | |||
ASU 2015-03 | ASU Adjustment | |||||
Recent Accounting Pronouncements | |||||
Prepaid and other current assets | $ (1,000) | $ (1,200) | |||
Other assets | $ (6,800) | $ (4,400) | |||
ASU 2016-09 | Federal | ASU Adjustment | |||||
Recent Accounting Pronouncements | |||||
Valuation allowance | 9,200 | ||||
Net deferred tax assets | 9,200 | ||||
ASU 2016-09 | State | ASU Adjustment | |||||
Recent Accounting Pronouncements | |||||
Valuation allowance | 1,200 | ||||
Net deferred tax assets | $ 1,200 | ||||
ASU 2014-09 | ASU Adjustment | |||||
Recent Accounting Pronouncements | |||||
Cumulative effect on retained earnings | $ 9,000 | ||||
Consolidated assets | 9,000 | ||||
Accumulated deficit | 9,000 | ||||
Potential milestone payments | 5,000 | ||||
Minimum | ASU 2014-09 | ASU Adjustment | |||||
Recent Accounting Pronouncements | |||||
Unconstrained milestone expected reduction to accumulated deficit | 4,000 | ||||
Maximum | ASU 2014-09 | ASU Adjustment | |||||
Recent Accounting Pronouncements | |||||
Unconstrained milestone expected reduction to accumulated deficit | $ 6,000 |
Agreements - Roche (Details)
Agreements - Roche (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||||||||||||
Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2014USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Dec. 31, 2000USD ($)item | |
Collaborative Agreements disclosures | |||||||||||||||||||||
Non-cash royalty revenue related to sale of future royalties | $ 7,587 | $ 6,503 | $ 6,439 | $ 7,613 | $ 6,710 | $ 6,184 | $ 5,944 | $ 7,380 | $ 6,291 | $ 5,684 | $ 5,484 | $ 12,894 | $ 11,975 | $ 28,142 | $ 26,218 | $ 25,299 | $ 5,484 | ||||
Royalty revenue | $ 195 | $ 5,099 | $ 4,625 | $ 4,166 | $ 195 | 195 | 13,867 | ||||||||||||||
Roche | Kadcyla | |||||||||||||||||||||
Collaborative Agreements disclosures | |||||||||||||||||||||
Payments received under collaboration agreement | $ 2,000 | ||||||||||||||||||||
Potential milestone payments | 44,000 | ||||||||||||||||||||
Non-cash royalty revenue related to sale of future royalties | $ 12,900 | 28,100 | $ 25,300 | $ 5,500 | |||||||||||||||||
Roche | Kadcyla | Development milestones | |||||||||||||||||||||
Collaborative Agreements disclosures | |||||||||||||||||||||
Cumulative earnings | 13,500 | 13,500 | |||||||||||||||||||
Potential milestone payments | 13,500 | ||||||||||||||||||||
Roche | Kadcyla | Regulatory milestones | |||||||||||||||||||||
Collaborative Agreements disclosures | |||||||||||||||||||||
Cumulative earnings | 20,500 | 20,500 | |||||||||||||||||||
Potential milestone payments | 5,000 | 5,000 | 30,500 | ||||||||||||||||||
Roche | Undisclosed Target | |||||||||||||||||||||
Collaborative Agreements disclosures | |||||||||||||||||||||
Payments received under collaboration agreement | 5,000 | ||||||||||||||||||||
Potential milestone payments | $ 38,000 | ||||||||||||||||||||
Number of undisclosed targets with exclusive licenses | item | 4 | ||||||||||||||||||||
License exercise fee | $ 1,000 | ||||||||||||||||||||
Term of agreement | 8 years | ||||||||||||||||||||
Roche | Undisclosed Target | Development milestones | |||||||||||||||||||||
Collaborative Agreements disclosures | |||||||||||||||||||||
Potential milestone payments | $ 8,000 | ||||||||||||||||||||
Roche | Undisclosed Target | Regulatory milestones | |||||||||||||||||||||
Collaborative Agreements disclosures | |||||||||||||||||||||
Potential milestone payments | 20,000 | ||||||||||||||||||||
Roche | Undisclosed Target | Sales milestones | |||||||||||||||||||||
Collaborative Agreements disclosures | |||||||||||||||||||||
Potential milestone payments | $ 10,000 | ||||||||||||||||||||
Roche | Undisclosed Target | IND application filed | |||||||||||||||||||||
Collaborative Agreements disclosures | |||||||||||||||||||||
Potential milestone payments | $ 1,000 | $ 1,000 |
Agreements - Amgen (Details)
Agreements - Amgen (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||||||||||||||||
Feb. 29, 2016item | Dec. 31, 2015item | Sep. 30, 2015USD ($) | Oct. 31, 2013USD ($) | May 31, 2013USD ($)item | Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2014USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2017USD ($)item | Dec. 31, 2016USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Dec. 31, 2000USD ($)item | |
Collaborative Agreements disclosures | ||||||||||||||||||||||||||
License and milestone fees | $ 29,580,000 | $ 79,000 | $ 31,080,000 | $ 18,730,000 | $ 5,076,000 | $ 76,000 | $ 76,000 | $ 10,077,000 | $ 10,692,000 | $ 6,070,000 | $ 5,086,000 | $ 5,078,000 | $ 41,417,000 | $ 6,234,000 | $ 5,152,000 | $ 16,762,000 | $ 79,469,000 | $ 15,305,000 | $ 26,915,000 | $ 57,815,000 | ||||||
Remaining arrangement consideration to be recognized as license revenue | 6,800,000 | 7,100,000 | 7,100,000 | 6,800,000 | 7,100,000 | |||||||||||||||||||||
Costs related to the research and development services | 39,843,000 | $ 31,689,000 | $ 35,319,000 | $ 32,888,000 | $ 33,657,000 | $ 32,909,000 | $ 38,652,000 | $ 36,094,000 | $ 38,199,000 | $ 35,132,000 | $ 30,437,000 | $ 25,666,000 | $ 27,647,000 | $ 28,018,000 | $ 66,566,000 | $ 73,331,000 | $ 139,739,000 | $ 141,312,000 | 148,077,000 | 111,768,000 | ||||||
Amgen | ||||||||||||||||||||||||||
Collaborative Agreements disclosures | ||||||||||||||||||||||||||
Number of single-target licenses | item | 4 | 1 | 2 | 3 | ||||||||||||||||||||||
Fee received per license | $ 500,000 | $ 500,000 | $ 1,000,000 | |||||||||||||||||||||||
Number of licenses terminated | item | 2 | |||||||||||||||||||||||||
Potential milestone payments | 34,000,000 | |||||||||||||||||||||||||
Cumulative earnings | 3,000,000 | $ 3,000,000 | ||||||||||||||||||||||||
Costs related to the research and development services | 0 | $ 15,000 | $ 62,000 | |||||||||||||||||||||||
Amgen | Development milestones | ||||||||||||||||||||||||||
Collaborative Agreements disclosures | ||||||||||||||||||||||||||
Potential milestone payments | 9,000,000 | |||||||||||||||||||||||||
Amgen | IND application filed | ||||||||||||||||||||||||||
Collaborative Agreements disclosures | ||||||||||||||||||||||||||
Potential milestone payments | 1,000,000 | 1,000,000 | ||||||||||||||||||||||||
License and milestone fees | $ 1,000,000 | |||||||||||||||||||||||||
Amgen | Phase 2 clinical trial | ||||||||||||||||||||||||||
Collaborative Agreements disclosures | ||||||||||||||||||||||||||
Potential milestone payments | $ 3,000,000 | $ 3,000,000 | ||||||||||||||||||||||||
Amgen | Regulatory milestones | ||||||||||||||||||||||||||
Collaborative Agreements disclosures | ||||||||||||||||||||||||||
Potential milestone payments | 20,000,000 | |||||||||||||||||||||||||
Amgen | Sales milestones | ||||||||||||||||||||||||||
Collaborative Agreements disclosures | ||||||||||||||||||||||||||
Potential milestone payments | $ 5,000,000 |
Agreements - Sanofi (Details)
Agreements - Sanofi (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||||||||||||
May 31, 2017USD ($)item | Dec. 31, 2013USD ($)item | Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2014USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Dec. 31, 2003USD ($) | |
Collaborative Agreements disclosures | |||||||||||||||||||||||
License and milestone fees | $ 29,580 | $ 79 | $ 31,080 | $ 18,730 | $ 5,076 | $ 76 | $ 76 | $ 10,077 | $ 10,692 | $ 6,070 | $ 5,086 | $ 5,078 | $ 41,417 | $ 6,234 | $ 5,152 | $ 16,762 | $ 79,469 | $ 15,305 | $ 26,915 | $ 57,815 | |||
Sanofi | |||||||||||||||||||||||
Collaborative Agreements disclosures | |||||||||||||||||||||||
Potential milestone payments | $ 21,500 | ||||||||||||||||||||||
Number of compounds | item | 4 | 1 | |||||||||||||||||||||
Payments received under collaboration agreement | $ 30,000 | 6,000 | 4,000 | ||||||||||||||||||||
Cumulative earnings | $ 26,500 | 26,500 | |||||||||||||||||||||
Fee received per license | $ 2,000 | ||||||||||||||||||||||
License and milestone fees | $ 30,000 | $ 1,500 | |||||||||||||||||||||
Sanofi | Development milestones | |||||||||||||||||||||||
Collaborative Agreements disclosures | |||||||||||||||||||||||
Potential milestone payments | 7,500 | ||||||||||||||||||||||
Sanofi | Regulatory milestones | |||||||||||||||||||||||
Collaborative Agreements disclosures | |||||||||||||||||||||||
Potential milestone payments | $ 14,000 |
Agreements - Biotest (Details)
Agreements - Biotest (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||||||||||||
Sep. 30, 2008 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2006 | |
Collaborative Agreements disclosures | ||||||||||||||||||||||
Costs related to the research and development services | $ 39,843,000 | $ 31,689,000 | $ 35,319,000 | $ 32,888,000 | $ 33,657,000 | $ 32,909,000 | $ 38,652,000 | $ 36,094,000 | $ 38,199,000 | $ 35,132,000 | $ 30,437,000 | $ 25,666,000 | $ 27,647,000 | $ 28,018,000 | $ 66,566,000 | $ 73,331,000 | $ 139,739,000 | $ 141,312,000 | $ 148,077,000 | $ 111,768,000 | ||
Biotest | ||||||||||||||||||||||
Collaborative Agreements disclosures | ||||||||||||||||||||||
Payments received under collaboration agreement | $ 1,000,000 | |||||||||||||||||||||
Potential milestone payments | 35,500,000 | |||||||||||||||||||||
Costs related to the research and development services | 22,000 | 41,000 | 160,000 | 309,000 | ||||||||||||||||||
Costs related to clinical materials sold | $ 549,000 | 0 | $ 1,800,000 | $ 3,000,000 | ||||||||||||||||||
Biotest | Development milestones | ||||||||||||||||||||||
Collaborative Agreements disclosures | ||||||||||||||||||||||
Payments received under collaboration agreement | $ 500,000 | |||||||||||||||||||||
Potential milestone payments | 4,500,000 | |||||||||||||||||||||
Biotest | Phase IIb Clinical Trial | ||||||||||||||||||||||
Collaborative Agreements disclosures | ||||||||||||||||||||||
Potential milestone payments | $ 2,000,000 | $ 2,000,000 | ||||||||||||||||||||
Biotest | Regulatory milestones | ||||||||||||||||||||||
Collaborative Agreements disclosures | ||||||||||||||||||||||
Potential milestone payments | $ 31,000,000 |
Agreements - Bayer (Details)
Agreements - Bayer (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||||||||||||
Jan. 31, 2016 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2008 | |
Collaborative Agreements disclosures | ||||||||||||||||||||||
Amount of arrangement consideration included in license and milestone fees | $ 29,580 | $ 79 | $ 31,080 | $ 18,730 | $ 5,076 | $ 76 | $ 76 | $ 10,077 | $ 10,692 | $ 6,070 | $ 5,086 | $ 5,078 | $ 41,417 | $ 6,234 | $ 5,152 | $ 16,762 | $ 79,469 | $ 15,305 | $ 26,915 | $ 57,815 | ||
Bayer | ||||||||||||||||||||||
Collaborative Agreements disclosures | ||||||||||||||||||||||
Payments received under collaboration agreement | $ 4,000 | |||||||||||||||||||||
Potential milestone payments | $ 170,500 | |||||||||||||||||||||
Cumulative earnings | 13,000 | 13,000 | ||||||||||||||||||||
Bayer | Minimum | ||||||||||||||||||||||
Collaborative Agreements disclosures | ||||||||||||||||||||||
Percentage of royalty payments | 4.00% | |||||||||||||||||||||
Bayer | Maximum | ||||||||||||||||||||||
Collaborative Agreements disclosures | ||||||||||||||||||||||
Percentage of royalty payments | 7.00% | |||||||||||||||||||||
Bayer | Development milestones | ||||||||||||||||||||||
Collaborative Agreements disclosures | ||||||||||||||||||||||
Potential milestone payments | 2,000 | 2,000 | $ 16,000 | |||||||||||||||||||
Bayer | Phase 2 clinical trial | ||||||||||||||||||||||
Collaborative Agreements disclosures | ||||||||||||||||||||||
Amount of arrangement consideration included in license and milestone fees | $ 10,000 | |||||||||||||||||||||
Bayer | Regulatory milestones | ||||||||||||||||||||||
Collaborative Agreements disclosures | ||||||||||||||||||||||
Potential milestone payments | $ 6,000 | $ 6,000 | 44,500 | |||||||||||||||||||
Bayer | Sales milestones | ||||||||||||||||||||||
Collaborative Agreements disclosures | ||||||||||||||||||||||
Potential milestone payments | $ 110,000 |
Agreements - Novartis (Details)
Agreements - Novartis (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||||||||||||||||
May 31, 2015USD ($) | Jan. 31, 2015USD ($) | Oct. 31, 2014USD ($)item | Oct. 31, 2013USD ($) | Mar. 31, 2013USD ($)item | Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2014USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2017USD ($)item | Dec. 31, 2016USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Dec. 31, 2010USD ($)item | |
Collaborative Agreements disclosures | ||||||||||||||||||||||||||
Amount of arrangement consideration included in license and milestone fees | $ 29,580,000 | $ 79,000 | $ 31,080,000 | $ 18,730,000 | $ 5,076,000 | $ 76,000 | $ 76,000 | $ 10,077,000 | $ 10,692,000 | $ 6,070,000 | $ 5,086,000 | $ 5,078,000 | $ 41,417,000 | $ 6,234,000 | $ 5,152,000 | $ 16,762,000 | $ 79,469,000 | $ 15,305,000 | $ 26,915,000 | $ 57,815,000 | ||||||
Costs related to the research and development services | 39,843,000 | $ 31,689,000 | $ 35,319,000 | $ 32,888,000 | $ 33,657,000 | $ 32,909,000 | $ 38,652,000 | $ 36,094,000 | $ 38,199,000 | $ 35,132,000 | $ 30,437,000 | $ 25,666,000 | $ 27,647,000 | $ 28,018,000 | 66,566,000 | $ 73,331,000 | $ 139,739,000 | $ 141,312,000 | 148,077,000 | 111,768,000 | ||||||
Novartis | ||||||||||||||||||||||||||
Collaborative Agreements disclosures | ||||||||||||||||||||||||||
Number of single-target licenses | item | 1 | 5 | 6 | |||||||||||||||||||||||
Number of related targets | item | 2 | 2 | ||||||||||||||||||||||||
Payments received under collaboration agreement | $ 5,000,000 | $ 45,000,000 | ||||||||||||||||||||||||
License exercise fee | $ 1,000,000 | $ 1,000,000 | 1,000,000 | |||||||||||||||||||||||
Potential milestone payments | $ 199,500,000 | 199,500,000 | $ 199,500,000 | |||||||||||||||||||||||
Term of agreement | 1 year | 3 years | ||||||||||||||||||||||||
Potential milestone payments under second option | 238,000,000 | |||||||||||||||||||||||||
Number of remaining licenses | item | 3 | |||||||||||||||||||||||||
Costs related to the research and development services | $ 17,000 | $ 32,000 | $ 67,000 | 141,000 | ||||||||||||||||||||||
Costs related to clinical materials sold | 0 | $ 644,000 | ||||||||||||||||||||||||
Payments received under collaboration agreement in connection with amended agreement | 3,500,000 | |||||||||||||||||||||||||
Novartis | Development milestones | ||||||||||||||||||||||||||
Collaborative Agreements disclosures | ||||||||||||||||||||||||||
Payments received under collaboration agreement | $ 5,000,000 | $ 5,000,000 | ||||||||||||||||||||||||
Potential milestone payments | 22,500,000 | $ 22,500,000 | ||||||||||||||||||||||||
Potential milestone payments under second option | 22,500,000 | |||||||||||||||||||||||||
Novartis | Phase 1 clinical trial | ||||||||||||||||||||||||||
Collaborative Agreements disclosures | ||||||||||||||||||||||||||
Payments received under collaboration agreement | 5,000,000 | |||||||||||||||||||||||||
Potential milestone payments | 5,000,000 | 5,000,000 | ||||||||||||||||||||||||
Novartis | Phase 2 clinical trial | ||||||||||||||||||||||||||
Collaborative Agreements disclosures | ||||||||||||||||||||||||||
Potential milestone payments | $ 7,500,000 | $ 7,500,000 | ||||||||||||||||||||||||
Novartis | Regulatory milestones | ||||||||||||||||||||||||||
Collaborative Agreements disclosures | ||||||||||||||||||||||||||
Potential milestone payments | 77,000,000 | 77,000,000 | ||||||||||||||||||||||||
Potential milestone payments under second option | 115,500,000 | |||||||||||||||||||||||||
Novartis | Sales milestones | ||||||||||||||||||||||||||
Collaborative Agreements disclosures | ||||||||||||||||||||||||||
Potential milestone payments | 100,000,000 | $ 100,000,000 | ||||||||||||||||||||||||
Potential milestone payments under second option | $ 100,000,000 |
Agreements - Lily (Details)
Agreements - Lily (Details) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2014USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2017USD ($)item | Dec. 31, 2016USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Dec. 31, 2011USD ($)item | Dec. 31, 2013USD ($) | |
Collaborative Agreements disclosures | ||||||||||||||||||||||
License and Milestone Fees | $ 29,580,000 | $ 79,000 | $ 31,080,000 | $ 18,730,000 | $ 5,076,000 | $ 76,000 | $ 76,000 | $ 10,077,000 | $ 10,692,000 | $ 6,070,000 | $ 5,086,000 | $ 5,078,000 | $ 41,417,000 | $ 6,234,000 | $ 5,152,000 | $ 16,762,000 | $ 79,469,000 | $ 15,305,000 | $ 26,915,000 | $ 57,815,000 | ||
Costs related to the research and development services | $ 39,843,000 | $ 31,689,000 | $ 35,319,000 | $ 32,888,000 | $ 33,657,000 | $ 32,909,000 | 38,652,000 | $ 36,094,000 | $ 38,199,000 | $ 35,132,000 | $ 30,437,000 | $ 25,666,000 | 27,647,000 | $ 28,018,000 | 66,566,000 | $ 73,331,000 | $ 139,739,000 | $ 141,312,000 | 148,077,000 | 111,768,000 | ||
Lilly | ||||||||||||||||||||||
Collaborative Agreements disclosures | ||||||||||||||||||||||
Number of development and commercialization licenses | item | 3 | 3 | ||||||||||||||||||||
Payments received under collaboration agreement | $ 20,000,000 | |||||||||||||||||||||
License exercise fee, per license | $ 2,000,000 | 2,000,000 | $ 2,000,000 | |||||||||||||||||||
Potential milestone payments | 199,000,000 | |||||||||||||||||||||
Potential milestone payments with no exercise fee | $ 200,500,000 | |||||||||||||||||||||
Costs related to the research and development services | 46,000 | $ 74,000 | 182,000 | 499,000 | ||||||||||||||||||
Costs related to clinical materials sold | $ 0 | $ 1,200,000 | 1,100,000 | $ 1,100,000 | ||||||||||||||||||
Lilly | Exercise fee | ||||||||||||||||||||||
Collaborative Agreements disclosures | ||||||||||||||||||||||
Number of development and commercialization licenses | item | 2 | |||||||||||||||||||||
Lilly | No exercise fee | ||||||||||||||||||||||
Collaborative Agreements disclosures | ||||||||||||||||||||||
Number of development and commercialization licenses | item | 1 | |||||||||||||||||||||
Lilly | Development milestones | ||||||||||||||||||||||
Collaborative Agreements disclosures | ||||||||||||||||||||||
Potential milestone payments | $ 29,000,000 | |||||||||||||||||||||
Potential milestone payments with no exercise fee | 30,500,000 | |||||||||||||||||||||
Lilly | Phase 1 clinical trial | ||||||||||||||||||||||
Collaborative Agreements disclosures | ||||||||||||||||||||||
Potential milestone payments | 5,000,000 | 5,000,000 | ||||||||||||||||||||
License and Milestone Fees | 5,000,000 | |||||||||||||||||||||
Lilly | Phase 2 clinical trial | ||||||||||||||||||||||
Collaborative Agreements disclosures | ||||||||||||||||||||||
Potential milestone payments | $ 9,000,000 | $ 9,000,000 | ||||||||||||||||||||
Lilly | Regulatory milestones | ||||||||||||||||||||||
Collaborative Agreements disclosures | ||||||||||||||||||||||
Potential milestone payments | 70,000,000 | |||||||||||||||||||||
Lilly | Sales milestones | ||||||||||||||||||||||
Collaborative Agreements disclosures | ||||||||||||||||||||||
Potential milestone payments | $ 100,000,000 |
Agreements - CytomX (Details)
Agreements - CytomX (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | 48 Months Ended | |||||||||||||||||||
Jan. 31, 2014 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2014 | Dec. 31, 2017 | |
Collaborative Agreements disclosures | ||||||||||||||||||||||||
License and milestone fees | $ 29,580,000 | $ 79,000 | $ 31,080,000 | $ 18,730,000 | $ 5,076,000 | $ 76,000 | $ 76,000 | $ 10,077,000 | $ 10,692,000 | $ 6,070,000 | $ 5,086,000 | $ 5,078,000 | $ 41,417,000 | $ 6,234,000 | $ 5,152,000 | $ 16,762,000 | $ 79,469,000 | $ 15,305,000 | $ 26,915,000 | $ 57,815,000 | ||||
Costs related to the research and development services | 39,843,000 | $ 31,689,000 | 35,319,000 | $ 32,888,000 | 33,657,000 | $ 32,909,000 | $ 38,652,000 | $ 36,094,000 | $ 38,199,000 | $ 35,132,000 | $ 30,437,000 | $ 25,666,000 | $ 27,647,000 | $ 28,018,000 | 66,566,000 | $ 73,331,000 | 139,739,000 | 141,312,000 | 148,077,000 | 111,768,000 | ||||
CytomX | ||||||||||||||||||||||||
Collaborative Agreements disclosures | ||||||||||||||||||||||||
Payments received under collaboration agreement | $ 13,100,000 | |||||||||||||||||||||||
License and milestone fees | 12,700,000 | |||||||||||||||||||||||
Potential milestone payments | 160,000,000 | $ 160,000,000 | ||||||||||||||||||||||
Potential milestone payments to be paid | $ 80,000,000 | $ 80,000,000 | ||||||||||||||||||||||
Estimated utilization period after commercialization | 10 years | 10 years | ||||||||||||||||||||||
Discount rate (as a percent) | 13.00% | 13.00% | ||||||||||||||||||||||
Value of collaborators licenses | 13,100,000 | 13,100,000 | $ 13,100,000 | |||||||||||||||||||||
Estimated term of development and commercialization license | 25 years | |||||||||||||||||||||||
Costs related to the research and development services | 427,000 | 256,000 | $ 868,000 | $ 130,000 | ||||||||||||||||||||
CytomX | Development milestones | ||||||||||||||||||||||||
Collaborative Agreements disclosures | ||||||||||||||||||||||||
Payments received under collaboration agreement | $ 12,700,000 | |||||||||||||||||||||||
Potential milestone payments | 10,000,000 | $ 10,000,000 | ||||||||||||||||||||||
Potential milestone payments to be paid | 7,000,000 | 7,000,000 | ||||||||||||||||||||||
Fair value of consideration for services provided | 12,700,000 | |||||||||||||||||||||||
CytomX | Phase 1 clinical trial | ||||||||||||||||||||||||
Collaborative Agreements disclosures | ||||||||||||||||||||||||
Potential milestone payments | 1,000,000 | $ 1,000,000 | 1,000,000 | 1,000,000 | ||||||||||||||||||||
Potential milestone payments to be paid | 1,000,000 | $ 1,000,000 | $ 1,000,000 | 1,000,000 | $ 1,000,000 | 1,000,000 | ||||||||||||||||||
CytomX | Phase 2 clinical trial | ||||||||||||||||||||||||
Collaborative Agreements disclosures | ||||||||||||||||||||||||
Potential milestone payments | 3,000,000 | 3,000,000 | 3,000,000 | |||||||||||||||||||||
CytomX | Future Technological Improvements | ||||||||||||||||||||||||
Collaborative Agreements disclosures | ||||||||||||||||||||||||
Payments received under collaboration agreement | 350,000 | |||||||||||||||||||||||
Value of collaborators licenses | 13,000,000 | 13,000,000 | 13,000,000 | |||||||||||||||||||||
Fair value of consideration for services provided | 13,000,000 | 350,000 | ||||||||||||||||||||||
CytomX | Research Services | ||||||||||||||||||||||||
Collaborative Agreements disclosures | ||||||||||||||||||||||||
Payments received under collaboration agreement | 140,000 | |||||||||||||||||||||||
Value of collaborators licenses | $ 140,000 | $ 140,000 | $ 140,000 | |||||||||||||||||||||
Fair value of consideration for services provided | 140,000 | |||||||||||||||||||||||
Fair value of consideration for services received | 310,000 | $ 12,800,000 | ||||||||||||||||||||||
CytomX | Regulatory milestones | ||||||||||||||||||||||||
Collaborative Agreements disclosures | ||||||||||||||||||||||||
Potential milestone payments | 50,000,000 | 50,000,000 | ||||||||||||||||||||||
Potential milestone payments to be paid | 23,000,000 | 23,000,000 | ||||||||||||||||||||||
CytomX | Sales milestones | ||||||||||||||||||||||||
Collaborative Agreements disclosures | ||||||||||||||||||||||||
Potential milestone payments | 100,000,000 | 100,000,000 | ||||||||||||||||||||||
Potential milestone payments to be paid | $ 50,000,000 | $ 50,000,000 |
Agreements - Takeda (Details)
Agreements - Takeda (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||||||||||
Mar. 31, 2015USD ($)item | Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2014USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2017USD ($)item | Dec. 31, 2016USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | |
Collaborative Agreements disclosures | |||||||||||||||||||||
Amount of arrangement consideration included in license and milestone fees | $ 29,580,000 | $ 79,000 | $ 31,080,000 | $ 18,730,000 | $ 5,076,000 | $ 76,000 | $ 76,000 | $ 10,077,000 | $ 10,692,000 | $ 6,070,000 | $ 5,086,000 | $ 5,078,000 | $ 41,417,000 | $ 6,234,000 | $ 5,152,000 | $ 16,762,000 | $ 79,469,000 | $ 15,305,000 | $ 26,915,000 | $ 57,815,000 | |
Remaining arrangement consideration to be recognized as license revenue | 6,800,000 | 7,100,000 | 7,100,000 | 6,800,000 | 7,100,000 | ||||||||||||||||
Costs related to the research and development services | 39,843,000 | $ 31,689,000 | $ 35,319,000 | $ 32,888,000 | $ 33,657,000 | $ 32,909,000 | $ 38,652,000 | $ 36,094,000 | $ 38,199,000 | $ 35,132,000 | $ 30,437,000 | 25,666,000 | $ 27,647,000 | $ 28,018,000 | 66,566,000 | $ 73,331,000 | $ 139,739,000 | $ 141,312,000 | 148,077,000 | 111,768,000 | |
Takeda | |||||||||||||||||||||
Collaborative Agreements disclosures | |||||||||||||||||||||
Term of agreement | 3 years | ||||||||||||||||||||
Number of single-target licenses | item | 2 | 1 | |||||||||||||||||||
Term of extension of the agreement | 1 year | ||||||||||||||||||||
Potential payments to extend the agreement term | $ 4,000,000 | ||||||||||||||||||||
Potential payment to expand agreement scope | 8,000,000 | ||||||||||||||||||||
Payments received under collaboration agreement | 20,000,000 | ||||||||||||||||||||
Potential milestone payments | $ 210,000,000 | 210,000,000 | |||||||||||||||||||
Additional term of extension of the agreement | 2 years | ||||||||||||||||||||
Estimated utilization period after commercialization | 10 years | ||||||||||||||||||||
Discount rate (as a percent) | 13.00% | ||||||||||||||||||||
Amount of arrangement consideration included in license and milestone fees | 8,600,000 | ||||||||||||||||||||
Cumulative earnings | 31,400,000 | $ 31,400,000 | |||||||||||||||||||
Estimated term of development and commercialization license | 25 years | ||||||||||||||||||||
Remaining arrangement consideration to be recognized as license revenue | 17,300,000 | 17,300,000 | |||||||||||||||||||
Costs related to the research and development services | 678,000 | 913,000 | 469,000 | 113,000 | |||||||||||||||||
Costs related to clinical materials sold | $ 0 | 2,100,000 | $ 0 | $ 0 | |||||||||||||||||
Takeda | Development milestones | |||||||||||||||||||||
Collaborative Agreements disclosures | |||||||||||||||||||||
Potential milestone payments | $ 30,000,000 | 30,000,000 | |||||||||||||||||||
Cumulative earnings | 25,900,000 | 25,900,000 | |||||||||||||||||||
Takeda | Phase 1 clinical trial | |||||||||||||||||||||
Collaborative Agreements disclosures | |||||||||||||||||||||
Potential milestone payments | 5,000,000 | 5,000,000 | |||||||||||||||||||
Takeda | Regulatory milestones | |||||||||||||||||||||
Collaborative Agreements disclosures | |||||||||||||||||||||
Potential milestone payments | 85,000,000 | 85,000,000 | |||||||||||||||||||
Takeda | Sales milestones | |||||||||||||||||||||
Collaborative Agreements disclosures | |||||||||||||||||||||
Potential milestone payments | $ 95,000,000 | $ 95,000,000 | |||||||||||||||||||
Takeda | Future Technological Improvements | |||||||||||||||||||||
Collaborative Agreements disclosures | |||||||||||||||||||||
Cumulative earnings | 2,100,000 | 2,100,000 | |||||||||||||||||||
Takeda | Research Services | |||||||||||||||||||||
Collaborative Agreements disclosures | |||||||||||||||||||||
Cumulative earnings | $ 3,400,000 | $ 3,400,000 |
Agreements - Debiopharm (Detail
Agreements - Debiopharm (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||||||||||||
Dec. 31, 2017 | May 31, 2017 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2016 | Jun. 30, 2015 | |
Collaborative Agreements disclosures | ||||||||||||||||||||||
License and milestone fees | $ 29,580,000 | $ 79,000 | $ 31,080,000 | $ 18,730,000 | $ 5,076,000 | $ 76,000 | $ 76,000 | $ 10,077,000 | $ 10,692,000 | $ 6,070,000 | $ 5,086,000 | $ 5,078,000 | $ 41,417,000 | $ 6,234,000 | $ 5,152,000 | $ 16,762,000 | $ 79,469,000 | $ 15,305,000 | $ 26,915,000 | $ 57,815,000 | ||
Research and development support | 452,000 | $ 650,000 | $ 902,000 | $ 1,478,000 | 1,427,000 | $ 1,354,000 | $ 1,335,000 | $ 1,059,000 | $ 848,000 | $ 772,000 | $ 708,000 | $ 532,000 | $ 832,000 | $ 776,000 | 2,781,000 | $ 1,620,000 | 3,482,000 | 5,175,000 | $ 4,014,000 | $ 2,848,000 | ||
Remaining arrangement consideration to be recognized as license revenue | $ 6,800,000 | 6,800,000 | $ 7,100,000 | $ 7,100,000 | 6,800,000 | $ 7,100,000 | ||||||||||||||||
Debiopharm | ||||||||||||||||||||||
Collaborative Agreements disclosures | ||||||||||||||||||||||
Payments received under collaboration agreement | 4,500,000 | $ 25,000,000 | ||||||||||||||||||||
Potential milestone payments | 5,000,000 | |||||||||||||||||||||
License and milestone fees | 29,700,000 | 29,500,000 | ||||||||||||||||||||
Research and development support | 300,000 | |||||||||||||||||||||
Cumulative earnings | $ 30,000,000 | $ 30,000,000 | $ 30,000,000 | |||||||||||||||||||
Debiopharm | Phase 3 Clinical Trial | ||||||||||||||||||||||
Collaborative Agreements disclosures | ||||||||||||||||||||||
Potential milestone payments | $ 25,000,000 |
Agreements - Jazz (Details)
Agreements - Jazz (Details) $ in Millions | 1 Months Ended | 12 Months Ended | |
Aug. 31, 2017USD ($)productitem | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Collaborative Agreements disclosures | |||
Remaining arrangement consideration to be recognized as license revenue | $ 6.8 | $ 7.1 | |
Jazz | |||
Collaborative Agreements disclosures | |||
Number of early stage ADC programs | item | 2 | ||
Number of ADC programs | item | 3 | ||
Number of products with rights to co-commercialize | product | 1 | ||
Number of products with rights under certain limited circumstances | product | 2 | ||
Payments received under collaboration agreement | $ 75 | ||
Potential milestone payments | $ 100 | ||
Term of agreement | 7 years | ||
Offset to research and development expense | 3.3 | ||
Number of development and commercialization licenses | item | 3 | ||
Discount rate (as a percent) | 14.00% | ||
Estimated utilization period after commercialization | 10 years | ||
Remaining arrangement consideration to be recognized as license revenue | $ 75 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | |
Property and Equipment | ||||
Property and equipment, gross | $ 72,343,000 | $ 71,982,000 | ||
Less accumulated depreciation | (52,845,000) | (57,444,000) | ||
Property and equipment, net | 19,498,000 | 14,538,000 | ||
Depreciation expense | 3,074,000 | 5,963,000 | $ 5,327,000 | $ 5,513,000 |
Leasehold improvements | ||||
Property and Equipment | ||||
Property and equipment, gross | 36,584,000 | 36,460,000 | ||
Machinery and equipment | ||||
Property and Equipment | ||||
Property and equipment, gross | 23,535,000 | 23,123,000 | ||
Computer hardware and software | ||||
Property and Equipment | ||||
Property and equipment, gross | 8,395,000 | 8,273,000 | ||
Furniture and fixtures | ||||
Property and Equipment | ||||
Property and equipment, gross | 3,705,000 | 3,710,000 | ||
Assets under construction | ||||
Property and Equipment | ||||
Property and equipment, gross | 124,000 | 416,000 | ||
Equipment under capital leases | ||||
Property and Equipment | ||||
Less accumulated depreciation | (290,000) | (479,000) | ||
Property and equipment, net | $ 583,000 | $ 449,000 |
Convertible 4.5% Senior Notes (
Convertible 4.5% Senior Notes (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||
Jun. 30, 2016USD ($)$ / shares | Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Dec. 31, 2017USD ($)shares | Dec. 31, 2016USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Jun. 30, 2016USD ($)$ / shares | |
Convertible debt | ||||||||||||
Interest rate (as a percent) | 4.50% | 4.50% | 4.50% | |||||||||
Proceeds from issuance of debt | $ 96,608,000 | |||||||||||
Issuance of debt transaction costs | 3,392,000 | |||||||||||
Fees for debt conversion | $ 1,699,000 | |||||||||||
Interest expense | $ 28,000 | $ 762,000 | $ 1,125,000 | $ 1,125,000 | $ 1,099,000 | $ 1,150,000 | $ 2,249,000 | $ 3,040,000 | $ 2,387,000 | 138,000 | ||
Convertible Notes | ||||||||||||
Convertible debt | ||||||||||||
Interest rate (as a percent) | 4.50% | 4.50% | 4.50% | 4.50% | 4.50% | 4.50% | ||||||
Principal amount of debt | $ 2,100,000 | $ 100,000,000 | $ 2,100,000 | $ 100,000,000 | $ 2,100,000 | $ 100,000,000 | ||||||
Proceeds from issuance of debt | 96,600,000 | |||||||||||
Issuance of debt transaction costs | $ 3,400,000 | |||||||||||
Debt converted | $ 97,900,000 | 96,900,000 | ||||||||||
Shares issued with debt conversion (in shares) | shares | 26,160,187 | |||||||||||
Debt Conversion other amount | 1,000,000 | |||||||||||
Shares issued with debt conversion adjustment (in shares) | shares | 2,784,870 | |||||||||||
Debt conversion loss | 22,900,000 | |||||||||||
Accrued interest forfeited | 743,000 | |||||||||||
Charges to paid in capital | 2,500,000 | |||||||||||
Transaction costs | 1,700,000 | |||||||||||
Interest expense | $ 2,200,000 | 3,000,000 | 138,000 | |||||||||
Principal amount of debt for conversion calculations | $ 1,000 | 1,000 | $ 1,000 | 1,000 | $ 1,000 | |||||||
Ratio issued upon conversion | 238.7775 | |||||||||||
Initial conversion price (in dollars per share) | $ / shares | $ 4.19 | $ 4.19 | ||||||||||
Deferred financing costs | $ 50,000 | $ 50,000 | $ 50,000 |
Liability Related to Sale of 54
Liability Related to Sale of Future Royalties (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | 36 Months Ended | ||||||||||||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2016 | Dec. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2017 | |
Liability Related to Sale of Future Royalties | ||||||||||||||||||||||
Royalty revenue | $ 195 | $ 5,099 | $ 4,625 | $ 4,166 | $ 195 | $ 195 | $ 13,867 | |||||||||||||||
Proceeds from sale of future royalties - net | 194,135 | |||||||||||||||||||||
Transaction costs for royalty agreements | 5,865 | |||||||||||||||||||||
Roll forward | ||||||||||||||||||||||
Proceeds from sale of future royalties - net | 194,135 | |||||||||||||||||||||
Non-cash Kadcyla royalty revenue | $ (7,587) | $ (6,503) | $ (6,439) | $ (7,613) | $ (6,710) | $ (6,184) | $ (5,944) | $ (7,380) | (6,291) | $ (5,684) | $ (5,484) | $ (12,894) | (11,975) | $ (28,142) | $ (26,218) | (25,299) | (5,484) | |||||
Non-cash interest expense on liability related to sale of future royalties and convertible senior notes | 3,221 | $ 3,385 | $ 3,501 | 3,575 | 3,647 | $ 5,018 | $ 4,956 | $ 4,972 | $ 5,059 | $ 5,143 | $ 5,437 | 8,665 | $ 10,202 | 13,682 | 18,593 | $ 20,130 | $ 5,437 | |||||
Kadcyla | ||||||||||||||||||||||
Liability Related to Sale of Future Royalties | ||||||||||||||||||||||
Percentage of royalty payments if applicable threshold is met | 85.00% | |||||||||||||||||||||
Kadcyla | IRH | ||||||||||||||||||||||
Liability Related to Sale of Future Royalties | ||||||||||||||||||||||
Percentage of royalty payments | 100.00% | |||||||||||||||||||||
Royalty revenue | $ 235,000 | |||||||||||||||||||||
Royalties on net sales of Kadcyla when royalties to the purchaser reach a specified milestone | $ 260,000 | |||||||||||||||||||||
Percentage of royalty payments if applicable threshold is met | 15.00% | |||||||||||||||||||||
Proceeds from sale of future royalties - net | $ 200,000 | $ 194,135 | ||||||||||||||||||||
Transaction costs for royalty agreements | 5,900 | |||||||||||||||||||||
Roll forward | ||||||||||||||||||||||
Liability related to sale of future royalties, net — beginning balance | $ 184,328 | 184,328 | ||||||||||||||||||||
Proceeds from sale of future royalties - net | $ 200,000 | 194,135 | ||||||||||||||||||||
Non-cash Kadcyla royalty revenue | (28,142) | (71,819) | ||||||||||||||||||||
Non-cash interest expense on liability related to sale of future royalties and convertible senior notes | 13,227 | 47,097 | ||||||||||||||||||||
Liability related to sale of future royalties, net — ending balance | $ 169,413 | $ 184,328 | $ 184,328 | $ 169,413 | $ 184,328 | $ 169,413 | ||||||||||||||||
Effective annual interest rate | 7.70% |
Income Taxes - Expense (Details
Income Taxes - Expense (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | |
Reconciliation of the expected statutory tax benefit to the actual income taxes | ||||
U.S. federal corporate tax rate (as a percent) | 34.00% | |||
Loss before income tax expense | $ (78,883) | $ (96,012) | $ (144,817) | $ (60,739) |
Expected tax benefit at 34% | (26,820) | (32,644) | (49,238) | (20,651) |
Permanent differences | 15 | 25 | 345 | 818 |
Incentive stock options | 1,313 | 1,528 | 2,501 | 1,948 |
State tax benefit net of federal benefit | (4,157) | (3,537) | (7,954) | (3,252) |
Change in valuation allowance, net | 32,922 | (63,238) | 62,505 | 27,940 |
Federal research credit | (1,232) | (2,204) | (4,109) | (1,407) |
Federal orphan drug credit | (2,901) | (7,118) | (4,241) | (5,471) |
Expired loss and credit carryforwards | 184 | $ 75 | ||
Change in U.S. tax law | 97,479 | |||
Debt inducement | 8,044 | |||
Stock option expirations | $ 860 | $ 1,665 | $ 7 |
Income Taxes - Carryforward (De
Income Taxes - Carryforward (Details) $ in Millions | Dec. 31, 2017USD ($) |
Carryforward | |
Federal and state carryforwards | $ 61.4 |
Federal | |
Carryforward | |
Operating loss carryforward | 473.6 |
State | |
Carryforward | |
Operating loss carryforward | $ 304 |
Income Taxes - Accounting chang
Income Taxes - Accounting change (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2017 | |
Federal | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Gross operating loss carryforwards | $ 473.6 | |
State | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Gross operating loss carryforwards | $ 304 | |
ASU 2016-09 | Federal | ASU Adjustment | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Gross operating loss carryforwards | $ 27 | |
Tax affect | 9.2 | |
Valuation allowance | 9.2 | |
ASU 2016-09 | State | ASU Adjustment | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Gross operating loss carryforwards | 23.3 | |
Tax affect | 1.2 | |
Valuation allowance | $ 1.2 |
Income Taxes - Deferred (Detail
Income Taxes - Deferred (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Deferred tax assets: | |||
Net operating loss carryforwards | $ 118,672 | $ 167,869 | |
Research and development tax credit carryforwards | 58,606 | 43,096 | |
Property and other intangible assets | 2,272 | 2,982 | |
Deferred revenue | 25,997 | 13,205 | |
Stock-based compensation | 12,125 | 16,794 | |
Deferred lease incentive | 2,889 | 4,264 | |
Other liabilities | 3,037 | 2,107 | |
Royalty sale | 47,143 | 73,973 | |
Total deferred tax assets | 270,741 | 324,290 | |
Deferred tax liabilities: | |||
Royalty sale transaction costs | (859) | (1,569) | |
Total deferred tax liabilities | 859 | 1,569 | |
Valuation allowance | (269,882) | $ (322,721) | |
Income taxes, additional disclosures | |||
Increase (decrease) in valuation allowance | $ (52,800) | ||
U.S. federal corporate tax rate (as a percent) | 34.00% | ||
Provisional income tax expense, Tax Cuts and Jobs Act of 2017 | $ 97,500 | ||
Forecast | |||
Income taxes, additional disclosures | |||
U.S. federal corporate tax rate (as a percent) | 21.00% | ||
Maximum | |||
Income taxes, additional disclosures | |||
U.S. federal corporate tax rate (as a percent) | 35.00% |
Capital Stock (Details)
Capital Stock (Details) - USD ($) | 1 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jan. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2001 | |
Stock-based compensation disclosure | ||||||
Compensation expense | $ 8,100,000 | $ 11,100,000 | $ 21,900,000 | $ 15,300,000 | ||
Aggregate number of common shares reserved for future issuance | 17,700,000 | |||||
Proceeds from stock options exercised | $ 650,000 | $ 5,161,000 | 4,429,000 | |||
Stock options | ||||||
Stock-based compensation disclosure | ||||||
Stock options granted to directors (in shares) | 3,536,000 | 1,589,000 | 3,340,000 | |||
Options exercised (in shares) | 191,000 | 555,000 | ||||
Exercise price (in dollars per share) | $ 2.68 | |||||
Exercise price (in dollars per share) | $ 6.11 | |||||
Proceeds from stock options exercised | $ 650,000 | $ 5,161,000 | $ 4,429,000 | |||
Exercisable at the end of the period (in shares) | 7,898,000 | 7,996,000 | 6,453,000 | 5,380,000 | ||
Weighted-Average Exercise Price (in dollars per share) | $ 13.15 | $ 12.16 | $ 12.63 | $ 11.89 | ||
Deferred share units | ||||||
Stock-based compensation disclosure | ||||||
Compensation expense | $ 215,000 | $ 206,000 | $ 380,000 | $ 389,000 | ||
2001 Director Plan | ||||||
Stock-based compensation disclosure | ||||||
Aggregate number of common shares reserved for future issuance | 50,000 | |||||
2001 Director Plan | Deferred share units | ||||||
Stock-based compensation disclosure | ||||||
Compensation expense | $ (7,000) | $ 28,000 | $ (72,000) | $ 16,000 | ||
Stock units issued (in shares) | 0 | |||||
Stock units outstanding (in shares) | 6,000 | |||||
2016 Plan | Stock options | ||||||
Stock-based compensation disclosure | ||||||
Options exercised (in shares) | 191,000 | |||||
Compensation Policy for Non-Employee Directors | Stock options | ||||||
Stock-based compensation disclosure | ||||||
Stock options granted to directors (in shares) | 40,000 | 80,000 | 80,000 | 80,000 | ||
Compensation Policy for Non-Employee Directors | Deferred share units | ||||||
Stock-based compensation disclosure | ||||||
Compensation expense | $ 215,000 | $ 206,000 | $ 380,000 | $ 389,000 | ||
Stock units issued (in shares) | 53,248 | 37,000 | 47,000 | 41,000 | 31,000 | |
Common stock issued when a director ceases to be a member (in shares) | 1 | |||||
Stock units previously granted (in shares) | 12,000 | 12,000 | 12,000 | 15,000 | ||
Non-employee directors-initial grant | Deferred share units | ||||||
Stock-based compensation disclosure | ||||||
Vesting period | 3 years | |||||
Stock options granted to directors (in shares) | 6,500 | |||||
Non-employee directors-first anniversary | Deferred share units | ||||||
Stock-based compensation disclosure | ||||||
Stock options granted to directors (in shares) | 3,000 | |||||
Non-employee directors-after year one | Deferred share units | ||||||
Stock-based compensation disclosure | ||||||
Vesting period | 1 year | |||||
Stock options granted to directors (in shares) | 3,000 | |||||
Annual stock option awards | Stock options | ||||||
Stock-based compensation disclosure | ||||||
Vesting period | 1 year | |||||
Stock options granted to directors (in shares) | 10,000 | |||||
Off-Cycle initial awards | Stock options | ||||||
Stock-based compensation disclosure | ||||||
Stock options granted to directors (in shares) | 10,000 |
Restructuring Charge (Details)
Restructuring Charge (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
Dec. 31, 2016USD ($)ft² | Sep. 30, 2016USD ($)itemshares | Dec. 31, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($)ft² | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($)ft²shares | Sep. 30, 2016USD ($) | Dec. 31, 2017USD ($)shares | Dec. 31, 2016USD ($)ft² | Jun. 30, 2016USD ($)shares | Jun. 30, 2015USD ($) | |
Restructuring | ||||||||||||
Restructuring charge | $ 273,000 | $ 393,000 | $ 386,000 | $ 301,000 | $ 4,130,000 | $ 4,431,000 | $ 779,000 | $ 4,431,000 | ||||
Stock compensation expense (reduction) | 8,100,000 | 11,100,000 | $ 21,900,000 | $ 15,300,000 | ||||||||
Leasehold impairment charge | 970,000 | 180,000 | ||||||||||
Restructuring Reserve | ||||||||||||
Initial charge related to employee benefits, Beginning Balance | 1,751,000 | 3,135,000 | 1,751,000 | |||||||||
Additional charge | 273,000 | $ 393,000 | $ 386,000 | 301,000 | 4,130,000 | 4,431,000 | 779,000 | 4,431,000 | ||||
Payments for the period | (1,657,000) | (1,751,000) | ||||||||||
Balance at the End of the year | $ 1,751,000 | $ 3,135,000 | $ 1,751,000 | 3,135,000 | 1,751,000 | $ 3,135,000 | $ 1,751,000 | |||||
Workforce reduction | ||||||||||||
Restructuring | ||||||||||||
Approximate positions to be eliminated (as a percent) | 17.00% | |||||||||||
Approximate positions to be eliminated | item | 65 | |||||||||||
Approximate current positions to be eliminated | item | 60 | |||||||||||
Restructuring charge | 4,400,000 | |||||||||||
One-time charge for severance | 2,800,000 | |||||||||||
Benefit plan severance cost | 593,000 | |||||||||||
Restructuring Reserve | ||||||||||||
Additional charge | $ 4,400,000 | |||||||||||
930 Winter Street, Walham, MA | ||||||||||||
Restructuring | ||||||||||||
Area of space leased | ft² | 10,281 | 10,281 | 10,281 | 10,281 | ||||||||
930 Winter Street, Walham, MA | Lease | ||||||||||||
Restructuring | ||||||||||||
Area of space leased | ft² | 10,281 | 10,281 | 10,281 | 10,281 | ||||||||
Estimated period to sub-lease | 9 months | |||||||||||
Leasehold impairment charge | $ 970,000 | $ 779,000 | ||||||||||
Leasehold improvement cost | $ 193,000 | $ 193,000 | $ 193,000 | |||||||||
Stock options | ||||||||||||
Restructuring | ||||||||||||
Forfeited (in shares) | shares | 1,670,000 | 3,106,000 | 661,000 | |||||||||
Granted (in shares) | shares | 3,536,000 | 1,589,000 | 3,340,000 | |||||||||
Stock options | Workforce reduction | ||||||||||||
Restructuring | ||||||||||||
Forfeited (in shares) | shares | 762,000 | |||||||||||
Stock compensation expense (reduction) | $ (837,000) | |||||||||||
Granted (in shares) | shares | 847,000 | |||||||||||
Vesting period | 3 years |
Commitments and Contingencies61
Commitments and Contingencies (Details) € in Millions | 6 Months Ended | 12 Months Ended | |||||||
Dec. 31, 2016USD ($)ft² | Dec. 31, 2017USD ($)item | Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Dec. 31, 2013USD ($)ft² | Dec. 31, 2017EUR (€)ft² | Dec. 31, 2017USD ($)ft² | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Operating leases | |||||||||
Construction allowance | $ 5,914,000 | $ 5,129,000 | |||||||
Facilities rent expense, net of sublease income | $ 3,500,000 | $ 6,800,000 | $ 6,500,000 | $ 6,000,000 | |||||
Minimum rental commitments under the non-cancelable operating lease agreements | |||||||||
2,018 | 7,703,000 | ||||||||
2,019 | 7,202,000 | ||||||||
2,020 | 7,251,000 | ||||||||
2,021 | 7,074,000 | ||||||||
2,022 | 7,125,000 | ||||||||
Thereafter | 23,531,000 | ||||||||
Total minimum lease payments | 59,886,000 | ||||||||
Obligations under capital leases | 0 | ||||||||
Collaborations and Licenses | |||||||||
Potential milestone payable | 80,000,000 | ||||||||
Manufacturing commitments | |||||||||
Collaborations and Licenses | |||||||||
Manufacturing commitment | $ 3,500,000 | ||||||||
Reserve capacity | |||||||||
Collaborations and Licenses | |||||||||
Manufacturing commitment | € | € 46.2 | ||||||||
Term of agreement | 5 years | ||||||||
Noncancelable commitment | € | € 13.9 | ||||||||
830 Winter Street, Waltham, MA | |||||||||
Operating leases | |||||||||
Area of space leased | ft² | 110,000 | 110,000 | |||||||
Number of additional terms for which lease agreement can be extended | item | 2 | ||||||||
Operating lease term extension period | 5 years | ||||||||
Construction allowance | $ 746,000 | $ 186,000 | $ 1,100,000 | ||||||
930 Winter Street, Walham, MA | |||||||||
Operating leases | |||||||||
Area of space leased | ft² | 10,281 | ||||||||
Construction allowance | $ 617,000 | ||||||||
333 Providence Hwy, Norwood MA | |||||||||
Operating leases | |||||||||
Area of space leased | ft² | 43,850 | 43,850 | |||||||
100 River Ridge Drive, Norwood, MA | |||||||||
Operating leases | |||||||||
Area of space leased | ft² | 7,507 | ||||||||
Operating lease term extension period | 5 years | ||||||||
Operating lease term period | 5 years 2 months |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | |
Employee Benefit Plans | ||||
Maximum employees' contribution (as a percent) | 100.00% | |||
Matching contribution of first 6% of eligible employees' contributions (as a percent) | 50.00% | |||
Percentage of eligible employees' contributions matched by the company | 6.00% | |||
Company's contribution | $ 536,000 | $ 982,000 | $ 1,100,000 | $ 875,000 |
Quarterly Financial Informati63
Quarterly Financial Information (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||||||||||
Dec. 31, 2016 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2016 | Jun. 30, 2015 | |
Revenues: | |||||||||||||||||||||
License and milestone fees | $ 29,580 | $ 79 | $ 31,080 | $ 18,730 | $ 5,076 | $ 76 | $ 76 | $ 10,077 | $ 10,692 | $ 6,070 | $ 5,086 | $ 5,078 | $ 41,417 | $ 6,234 | $ 5,152 | $ 16,762 | $ 79,469 | $ 15,305 | $ 26,915 | $ 57,815 | |
Royalty revenue | 195 | 5,099 | 4,625 | 4,166 | 195 | 195 | 13,867 | ||||||||||||||
Royalty revenue (reversed) | (23) | ||||||||||||||||||||
Non-cash royalty revenue related to the sale of future royalties | 7,587 | 6,503 | 6,439 | 7,613 | 6,710 | 6,184 | 5,944 | 7,380 | 6,291 | 5,684 | 5,484 | 12,894 | 11,975 | 28,142 | 26,218 | 25,299 | 5,484 | ||||
Research and development support | 452 | 650 | 902 | 1,478 | 1,427 | 1,354 | 1,335 | 1,059 | 848 | 772 | 708 | 532 | 832 | 776 | 2,781 | 1,620 | 3,482 | 5,175 | 4,014 | 2,848 | |
Clinical materials revenue | 1,829 | 1,248 | 599 | 678 | 633 | 46 | 53 | 1,198 | 3 | 2,325 | 1,356 | 718 | 1,426 | 2,027 | 679 | 2,328 | 4,354 | 1,930 | 3,579 | 5,527 | |
Total revenues | 39,448 | 8,480 | 39,020 | 28,499 | 13,846 | 7,660 | 7,408 | 19,714 | 18,029 | 14,851 | 12,611 | 11,427 | 48,300 | 13,203 | 21,506 | 32,880 | 115,447 | 48,628 | 60,002 | 85,541 | |
Expenses: | |||||||||||||||||||||
Research and development | 39,843 | 31,689 | 35,319 | 32,888 | 33,657 | 32,909 | 38,652 | 36,094 | 38,199 | 35,132 | 30,437 | 25,666 | 27,647 | 28,018 | 66,566 | 73,331 | 139,739 | 141,312 | 148,077 | 111,768 | |
General and administrative | 9,048 | 7,908 | 8,836 | 8,119 | 8,536 | 9,459 | 9,298 | 11,235 | 8,054 | 8,329 | 7,261 | 7,000 | 6,872 | 7,095 | 17,995 | 16,383 | 33,911 | 38,528 | 36,916 | 28,228 | |
Restructuring charge | $ 273 | 393 | 386 | 301 | 4,130 | 4,431 | 779 | 4,431 | |||||||||||||
Total operating expenses | 49,284 | 39,597 | 44,155 | 41,393 | 42,494 | 46,498 | 47,950 | 47,329 | 46,253 | 43,461 | 37,698 | 32,666 | 34,519 | 35,113 | 88,992 | 89,714 | 174,429 | 184,271 | 184,993 | 139,996 | |
Loss from operations | (9,836) | (31,117) | (5,135) | (12,894) | (28,648) | (38,838) | (40,542) | (27,615) | (28,224) | (28,610) | (25,087) | (21,239) | 13,781 | (21,910) | (67,486) | (56,834) | (58,982) | (135,643) | (124,991) | (54,455) | |
Non-cash interest expense on liability related to the sale of future royalties and convertible senior notes | (3,221) | (3,385) | (3,501) | (3,575) | (3,647) | (5,018) | (4,956) | (4,972) | (5,059) | (5,143) | (5,437) | (8,665) | (10,202) | (13,682) | (18,593) | (20,130) | (5,437) | ||||
Interest expense on convertible senior notes | (28) | (762) | (1,125) | (1,125) | (1,099) | (1,150) | (2,249) | (3,040) | (2,387) | (138) | |||||||||||
Non-cash debt conversion expense | (724) | (22,191) | (22,915) | ||||||||||||||||||
Other (expense) income, net | 691 | 773 | 894 | 249 | (758) | 275 | (424) | 659 | 56 | 13 | 50 | (379) | (146) | (372) | |||||||
Net loss | $ (13,118) | $ (56,682) | $ (8,867) | $ (17,345) | $ (34,152) | $ (44,731) | $ (45,922) | $ (31,928) | $ (33,227) | $ (33,740) | $ (30,474) | $ (21,618) | $ 13,635 | $ (22,282) | $ (78,883) | $ (66,967) | $ (96,012) | $ (156,733) | $ (144,817) | $ (60,739) | |
Basic and diluted net (loss) income per common share (in dollars per share) | $ (0.11) | $ (0.61) | $ (0.10) | $ (0.20) | $ (0.39) | $ (0.51) | $ (0.53) | $ (0.37) | $ (0.38) | $ (0.39) | $ (0.35) | $ (0.25) | $ 0.16 | $ (0.26) | $ (0.91) | $ (0.77) | $ (0.98) | $ (1.80) | $ (1.67) | $ (0.71) |
Stub Period Comparative Data 64
Stub Period Comparative Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||||||||||
Dec. 31, 2016 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2016 | Jun. 30, 2015 | |
Revenues: | |||||||||||||||||||||
License and milestone fees | $ 29,580 | $ 79 | $ 31,080 | $ 18,730 | $ 5,076 | $ 76 | $ 76 | $ 10,077 | $ 10,692 | $ 6,070 | $ 5,086 | $ 5,078 | $ 41,417 | $ 6,234 | $ 5,152 | $ 16,762 | $ 79,469 | $ 15,305 | $ 26,915 | $ 57,815 | |
Royalty revenue | 195 | 5,099 | 4,625 | 4,166 | 195 | 195 | 13,867 | ||||||||||||||
Non-cash royalty revenue related to the sale of future royalties | 7,587 | 6,503 | 6,439 | 7,613 | 6,710 | 6,184 | 5,944 | 7,380 | 6,291 | 5,684 | 5,484 | 12,894 | 11,975 | 28,142 | 26,218 | 25,299 | 5,484 | ||||
Research and development support | 452 | 650 | 902 | 1,478 | 1,427 | 1,354 | 1,335 | 1,059 | 848 | 772 | 708 | 532 | 832 | 776 | 2,781 | 1,620 | 3,482 | 5,175 | 4,014 | 2,848 | |
Clinical materials revenue | 1,829 | 1,248 | 599 | 678 | 633 | 46 | 53 | 1,198 | 3 | 2,325 | 1,356 | 718 | 1,426 | 2,027 | 679 | 2,328 | 4,354 | 1,930 | 3,579 | 5,527 | |
Total revenues | 39,448 | 8,480 | 39,020 | 28,499 | 13,846 | 7,660 | 7,408 | 19,714 | 18,029 | 14,851 | 12,611 | 11,427 | 48,300 | 13,203 | 21,506 | 32,880 | 115,447 | 48,628 | 60,002 | 85,541 | |
Operating Expenses: | |||||||||||||||||||||
Research and development | 39,843 | 31,689 | 35,319 | 32,888 | 33,657 | 32,909 | 38,652 | 36,094 | 38,199 | 35,132 | 30,437 | 25,666 | 27,647 | 28,018 | 66,566 | 73,331 | 139,739 | 141,312 | 148,077 | 111,768 | |
General and administrative | 9,048 | 7,908 | 8,836 | 8,119 | 8,536 | 9,459 | 9,298 | 11,235 | 8,054 | 8,329 | 7,261 | 7,000 | 6,872 | 7,095 | 17,995 | 16,383 | 33,911 | 38,528 | 36,916 | 28,228 | |
Restructuring charge | $ 273 | 393 | 386 | 301 | 4,130 | 4,431 | 779 | 4,431 | |||||||||||||
Total operating expenses | 49,284 | 39,597 | 44,155 | 41,393 | 42,494 | 46,498 | 47,950 | 47,329 | 46,253 | 43,461 | 37,698 | 32,666 | 34,519 | 35,113 | 88,992 | 89,714 | 174,429 | 184,271 | 184,993 | 139,996 | |
Loss from operations | (9,836) | (31,117) | (5,135) | (12,894) | (28,648) | (38,838) | (40,542) | (27,615) | (28,224) | (28,610) | (25,087) | (21,239) | 13,781 | (21,910) | (67,486) | (56,834) | (58,982) | (135,643) | (124,991) | (54,455) | |
Investment income, net | 259 | 111 | 1,146 | 473 | 325 | 69 | |||||||||||||||
Non-cash interest expense on liability related to the sale of future royalties and convertible senior notes | (3,221) | (3,385) | (3,501) | (3,575) | (3,647) | (5,018) | (4,956) | (4,972) | (5,059) | (5,143) | (5,437) | (8,665) | (10,202) | (13,682) | (18,593) | (20,130) | (5,437) | ||||
Interest expense on convertible senior notes | (28) | (762) | (1,125) | (1,125) | (1,099) | (1,150) | (2,249) | (3,040) | (2,387) | (138) | |||||||||||
Other expense, net | (742) | (42) | 1,461 | (583) | 117 | (916) | |||||||||||||||
Net loss | $ (13,118) | $ (56,682) | $ (8,867) | $ (17,345) | $ (34,152) | $ (44,731) | $ (45,922) | $ (31,928) | $ (33,227) | $ (33,740) | $ (30,474) | $ (21,618) | $ 13,635 | $ (22,282) | $ (78,883) | $ (66,967) | $ (96,012) | $ (156,733) | $ (144,817) | $ (60,739) | |
Basic and diluted net (loss) income per common share (in dollars per share) | $ (0.11) | $ (0.61) | $ (0.10) | $ (0.20) | $ (0.39) | $ (0.51) | $ (0.53) | $ (0.37) | $ (0.38) | $ (0.39) | $ (0.35) | $ (0.25) | $ 0.16 | $ (0.26) | $ (0.91) | $ (0.77) | $ (0.98) | $ (1.80) | $ (1.67) | $ (0.71) |